Exhibit 99.1
QC Holdings, Inc. Issues Revised Fourth Quarter and Full Year Results;
Income from Continuing Operations Increased by $576,000
OVERLAND PARK, Kan.--(BUSINESS WIRE)--Feb. 28, 2006--QC Holdings,
Inc. (NASDAQ:QCCO) today issued revised financial results for the
three months and year ended December 31, 2005. The Company originally
released its fourth quarter and fiscal year 2005 results on February
9, 2006. On February 24, 2006, the Company finalized its evaluation
with respect to overtime to be paid to salaried branch managers that
work in branches with less than two additional employees. The Company
originally recorded an estimate of $1.4 million related to this issue
based on information available as of February 8, 2006. Based on
information received subsequent to that date and discussions with
relevant parties, the Company has concluded that approximately
$440,000 will be paid to affected branch managers, which results in
changes to the financial information originally released by the
Company.
As a result of the change in estimate, the Company's fourth
quarter 2005 branch salaries and benefits declined to $11.5 million
from $12.4 million, causing income from continuing operations to
increase to $1.6 million from $1.0 million as originally released.
Similarly, for the year ended December 31, 2005, the Company reported
branch salaries and benefits of $38.1 million (down from $39.0
million) and income from operations of $6.3 million compared to $5.7
million as originally released.
About QC Holdings, Inc.
Headquartered in Overland Park, Kansas, QC Holdings, Inc. is a
leading provider of payday loans in the United States, operating 532
branches in 25 states at December 31, 2005. With more than 20 years of
operating experience in the retail consumer finance industry, the
Company entered the payday loan market in 1992 and, since 1998, has
grown from 48 branches to 532 branches through a combination of new,
or de novo, branches and acquisitions. During fiscal 2005, the Company
advanced $985 million to customers through payday loans and reported
total revenues of $152.9 million.
Forward-Looking Statement Disclaimer: This press release contains
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements are based on the Company's current expectations and are
subject to a number of risks and uncertainties, which could cause
actual results to differ materially from those forward-looking
statements. These risks include (1) changes in laws or regulations or
governmental interpretations of existing laws and regulations
governing consumer protection or payday lending practices, (2)
litigation or regulatory action directed towards us or the payday loan
industry, (3) volatility in our earnings, primarily as a result of
fluctuations in loan loss experience and the rate of revenue growth in
branches, (4) negative media reports and public perception of the
payday loan industry and the impact on state legislatures and federal
and state regulators, (5) changes in our key management personnel, (6)
integration risks and costs associated with acquisitions, and (7) the
other risks detailed under the caption "Risk Factors" in our Annual
Report on Form 10-K for the year ended December 31, 2004 filed with
the Securities and Exchange Commission. QC will not update any
forward-looking statements made in this press release to reflect
future events or developments.
(Revised Financial Information Follows)
QC Holdings, Inc.
Consolidated Statements of Income
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
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2004 2005 2004 2005
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Revenues
Payday loan and credit
service fees $31,195 $38,804 $106,648 $140,341
Other 2,754 3,092 11,562 12,537
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Total revenues 33,949 41,896 118,210 152,878
----------------------------------------
Branch expenses
Salaries and benefits 7,141 11,473 25,043 38,073
Provision for losses 7,812 10,102 24,422 41,417
Occupancy 3,360 5,666 11,731 19,062
Depreciation and amortization 459 1,581 1,617 3,890
Other 3,242 3,911 9,499 13,521
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Total branch expenses 22,014 32,733 72,312 115,963
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Branch gross profit 11,935 9,163 45,898 36,915
Regional expenses 1,775 2,479 6,915 9,364
Corporate expenses 3,114 4,006 9,743 16,221
Depreciation and amortization 193 259 753 856
Interest expense
(income), net (143) (38) 451 (476)
Other expense (income), net (56) 4 (291) 715
----------------------------------------
Income from continuing
operations before
taxes 7,052 2,453 28,327 10,235
Provision for income taxes 2,378 861 10,790 3,912
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Income from continuing
operations 4,674 1,592 17,537 6,323
Income (loss) from
discontinued operations,
net of income tax 250 (542) 942 (944)
----------------------------------------
Net income $4,924 $1,050 $18,479 $5,379
Earnings (loss) per share(a):
Basic
Continuing operations $0.23 $0.08 $0.98 $0.31
Discontinued operations 0.01 (0.03) 0.05 (0.05)
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Net income $0.24 $0.05 $1.03 $0.26
Diluted
Continuing operations $0.22 $0.07 $0.91 $0.29
Discontinued operations 0.01 (0.02) 0.05 (0.04)
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Net income $0.23 $0.05 $0.96 $0.25
Weighted average number of
common shares outstanding(a):
Basic 20,371 20,466 15,864 20,508
Diluted 21,705 21,376 16,970 21,448
(a) See computations of earnings per share below
QC Holdings, Inc.
Computations of Earnings per Share
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
----------------------------------------
2004 2005 2004 2005
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Income from continuing
operations $4,674 $1,592 $17,537 $6,323
Less: dividend and
participation rights from
mandatory stock redemption(a) (2,025)
----------------------------------------
Income from continuing
operations available to
common stockholders 4,674 1,592 15,512 6,323
----------------------------------------
Discontinued operations, net
of income tax 250 (542) 942 (944)
Less: dividend and
participation rights from
mandatory stock redemption(a) (110)
----------------------------------------
Income (loss) from
discontinued operations
available to common
stockholders 250 (542) 832 (944)
----------------------------------------
Income available to common
stockholders $4,924 $1,050 $16,344 $5,379
Weighted average number of
actual common shares
outstanding 20,371 20,466 17,664 20,508
Reduction in weighted average
shares from mandatory stock
redemption(a) (1,800)
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Weighted average number of
common shares outstanding 20,371 20,466 15,864 20,508
Incremental shares from
assumed conversion of stock
options 1,334 910 1,106 940
----------------------------------------
Weighted average number of
diluted common shares
outstanding 21,705 21,376 16,970 21,448
Earnings (loss) per share:
Basic
Continuing operations $0.23 $0.08 $0.98 $0.31
Discontinued operations 0.01 (0.03) 0.05 (0.05)
----------------------------------------
Net income $0.24 $0.05 $1.03 $0.26
Diluted
Continuing operations $0.22 $0.07 $0.91 $0.29
Discontinued operations 0.01 (0.02) 0.05 (0.04)
----------------------------------------
Net income $0.23 $0.05 $0.96 $0.25
Notes:
Basic and diluted earnings per share are computed by dividing income
available to common stockholders by the weighted average number of
common shares outstanding during the period. Through June 30, 2004,
the Company used the two-class method for computing basic and diluted
earnings per share to consider the effect of the mandatory stock
redemption under a Stockholders Agreement between the Company and two
principal stockholders. The Stockholders Agreement was terminated on
June 30, 2004.
(a) As set forth in Statement of Financial Accounting Standards No.
150 (SFAS 150), Accounting for Certain Financial Instruments with
Characteristics of Both Liabilities and Equity, which was adopted
on July 1, 2003, the shares considered to be subject to redemption
under the Stockholders Agreement for which a liability had been
recorded through June 30, 2004 are excluded from weighted average
shares for purposes of computing basic and diluted earnings per
share. Further, SFAS 150 requires that the portion of net income
representing dividend and participation rights associated with the
mandatory redemption be removed from income available to common
stockholders pursuant to the two-class method set forth by
Statement of Financial Accounting Standards No. 128, Earnings per
Share. The Stockholders Agreement was terminated effective June
30, 2004 and the computations for earnings per share no longer
require ongoing adjustments.
QC Holdings, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share amounts)
December 31, December 31,
2004 2005
----------------------------
ASSETS (Unaudited)
Current assets
Cash, cash equivalents and
short-term investments $40,526 $31,640
Loans receivable, less allowance for
losses of $1,520 at December 31, 2004
and $1,705 at December 31, 2005 49,385 52,778
Prepaid expenses and other
current assets 2,893 2,945
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Total current assets 92,804 87,363
Property and equipment, net 17,236 32,147
Goodwill 7,298 7,265
Other assets, net 1,098 1,364
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Total assets $118,436 $128,139
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $396 $644
Accrued expenses and other liabilities 2,751 6,270
Deferred revenue 2,926 4,121
Deferred income taxes 3,428 2,384
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Total current liabilities 9,501 13,419
Non-current liabilities 737
Deferred income taxes 2,643 3,167
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Total liabilities 12,144 17,323
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Commitments and contingencies
Stockholders' equity
Common stock, $0.01 par value:
75,000,000 shares authorized;
20,371,000 shares issued and
outstanding at December 31, 2004;
20,700,250 shares issued and
20,432,850 outstanding at
December 31, 2005 204 207
Additional paid-in capital 69,417 71,687
Retained earnings 36,671 42,050
Treasury stock (3,128)
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Total stockholders' equity 106,292 110,816
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Total liabilities and stockholders'
equity $118,436 $128,139
CONTACT: QC Holdings, Inc.
Investor Relations Contact:
Douglas E. Nickerson, 913-234-5154
or
Media Contact:
Tom Linafelt, 913-234-5237