QC Holdings, Inc. Reports 2015 Results

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| Source: QC Holdings

OVERLAND PARK, Kan., March 31, 2016 (GLOBE NEWSWIRE) -- QC Holdings, Inc. (OTC PINK:QCCO) reported a loss from continuing operations of $1.0 million and revenues of $135.5 million for the year ended December 31, 2015. The year ended December 31, 2015 includes $1.5 million (approximately $900,000 net of income taxes) in accrued costs associated with a tentative settlement of an outstanding legal matter.

For the year ended December 31, 2014, income from continuing operations totaled $5.1 million and revenues were $153.1 million. The year ended December 31, 2014 includes discontinued operations relating to branches that were closed during the year.

The revenue decline during 2015 compared to 2014 reflects lower interest and fees from the company’s consumer loan products, indicative of competitive pressures as customers explore alternative loan products and distribution channels.  Loan loss rates were slightly lower in 2015 versus 2014, indicative of similar branch level experience year-to-year and improvements in installment loan performance. The reduction in revenues exceeded the improved losses, resulting in a gross profit decline in $10.8 million year-to-year.

During 2016, QC will continue its efforts to expand the suite of products available to customers across its network, as well as to develop an online capability that will complement the branches by providing customers an alternative method for accessing lending products.

About QC Holdings, Inc.
Headquartered in Overland Park, Kansas, QC Holdings, Inc. is a leading provider of consumer loans in the United States and Canada. In the United States, QC offers various products, including single-pay, installment and title loans, check cashing, debit cards and money transfer services, through 394 branches in 22 states at December 31, 2015. In Canada, the company, through its subsidiary Direct Credit Holdings Inc., is engaged in short-term, consumer Internet lending in various provinces.

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 short-term lending practices, (2) uncertainties relating to the interpretation, application and promulgation of regulations under the Dodd-Frank Wall Street Reform and Consumer Protection Act, including the impact of proposed rulemaking by the Consumer Financial Protection Bureau (CFPB), (3) ballot referendum initiatives by industry opponents to cap the rates and fees that can be charged to customers, (4) uncertainties related to the examination process by the CFPB and indirect rulemaking through the examination process, (5) litigation or regulatory action directed towards us or the short-term consumer loan industry, (6) volatility in our earnings, primarily as a result of fluctuations in loan loss experience and closures of branches, (7) risks associated with our dependence on cash management banking services and the Automated Clearing House for loan collections, (8) negative media reports and public perception of the short-term consumer loan industry and the impact on federal and state legislatures and federal and state regulators, (9) changes in our key management personnel, (10) risks associated with owning and managing non-U.S. businesses, and (11) other various risks. QC will not update any forward-looking statements made in this press release to reflect future events or developments.

(Financial and Statistical Information Follows)

QC Holdings, Inc.
Consolidated Condensed Statements of Operations
(in thousands, except per share amounts)
(Unaudited)
   
  Year Ended 
  December 31,
   2014 2015 
Revenues     
Consumer loan interest and fees $142,910  $126,318  
Other  10,155   9,183  
Total revenues  153,065   135,501  
Provision for losses  44,887   39,190  
Operating expenses  67,666   66,629  
Gross profit  40,512   29,682  
Corporate and Regional expenses  26,863   28,042  
Other expense, net  5,219   2,777  
Income (loss) from continuing operations before income taxes  8,430   (1,137) 
Provision (benefit) for income taxes  3,351   (94) 
Income (loss) from continuing operations  5,079   (1,043) 
Gain from discontinued operations, net of income tax  266      
Net income (loss) $5,345  $(1,043) 
          
Earnings (loss) per share:     
Basic     
Net income (loss) $0.30  $(0.06) 
          
Diluted         
Net income (loss) $0.30  $(0.06) 
Weighted average number of common shares outstanding:         
Basic  17,484   17,351  
Diluted  17,512   17,351  
          


QC Holdings, Inc.
Consolidated Condensed Balance Sheets
(in thousands)
 
 December 31,
2014
December 31,
2015
ASSETS (Unaudited)
Current assets  
Cash and cash equivalents$  14,220 $  16,115 
Restricted cash   950    950 
Loans receivable, less allowance for losses of $6,794 at December 31, 2014 and $6,395 at December 31, 2015   55,744    50,555 
Other current assets     6,828      6,286 
Total current assets     77,742    73,906 
Non-current loans receivable, less allowance for losses of $2,133 at December 31, 2014 and $1,556 at December 31, 2015   5,603    3,802 
Property and equipment, net   5,013    4,797 
Other assets, net     13,141      11,486 
Total assets$  101,499 $  93,991 
       
LIABILITIES AND STOCKHOLDERS’ EQUITY  
Current liabilities  
Accounts payable and other current liabilities$  10,247 $  11,407 
Revolving credit facility   12,000    6,250 
Subordinated debt         3,553 
Total current liabilities   22,247    21,210 
   
Non-current liabilities   5,482    4,967 
Subordinated debt     3,415     
Total liabilities   31,144    26,177 
   
Stockholders’ equity     70,355      67,814 
Total liabilities and stockholders’ equity$  101,499 $  93,991 
       


QC Holdings, Inc.
Consolidated Condensed Statements of Cash Flows
(in thousands)
(Unaudited)
 
 December 31,
2014

 December 31,
2015

Operating activities:        
Net income (loss)$5,345  $(1,043)
Adjustments to reconcile net income (loss) to net cash 51,390   42,806 
Changes in assets and liabilities (43,376)  (31,131)
Net operating 13,359   10,632 
         
Investing activities:        
Capital expenditures (2,379)  (2,220)
Other 1,242   1,195 
Net investing (1,137)  (1,025)
         
Financing activities:        
Net repayment of borrowings (8,800)  (5,750)
Other (1,712)  (1,535)
Net financing (10,512)  (7,285)
         
Effect of exchange rate changes on cash and cash equivalents (175)  (427)
         
Net increase in cash and cash equivalents 1,535   1,895 
Cash and cash equivalents at beginning of year 12,685   14,220 
Cash and cash equivalents at end of year$14,220  $16,115 
         
Contact:
Douglas E. Nickerson  (913-234-5154)
Chief Financial Officer