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QC Holdings, Inc. Reports Second Quarter 2018 Results

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OVERLAND PARK, Kan., Aug. 30, 2018 (GLOBE NEWSWIRE) -- QC Holdings, Inc. (OTC:QCCO) reported a net loss of $3.0 million and revenues of $47.4 million for the six months ended June 30, 2018. Net loss totaled $1.6 million and revenues totaled $46.2 million for the six months ended June 30, 2017.

The 3% improvement in revenues during the first six months of 2018 compared to 2017 was primarily attributable to an acceleration of installment loan revenues as customers migrate from single-pay products.

Loan loss rates increased during the six months ended June 30, 2018 compared to 2017, largely due to approximately $1.0 million in first quarter 2017 cash recoveries from the business-to-business portfolio and from branches that were closed at the end of 2016.

About QC Holdings, Inc.
Headquartered in Lenexa, 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 257 branches in 14 states at June 30, 2018. 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 many 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 announced regulations 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)

 
Quarter Ended
June 30,
  Year Ended
June 30,
    2017       2018       2017       2018  
Revenues              
Consumer loan interest and fees $     20,555     $     21,226     $     41,712     $     43,034  
Other       2,261           2,112           4,522           4,405  
Total revenues     22,816         23,338         46,234         47,439  
               
Provision for losses     6,198         7,150         9,468         12,373  
Operating expenses       11,889           12,170           24,443           24,516  
Gross profit     4,729         4,018         12,323         10,550  
               
Corporate and Regional expenses     6,025         6,097         12,294         11,902  
Other expense, net       563           781           1,382           1,570  
Loss before income taxes     (1,859 )         (2,860 )       (1,353 )       (2,922 )
                   
Provision (benefit) for income taxes       81           (10 )         222           42  
Net loss $     (1,940 )   $     (2,850 )   $     (1,575 )   $     (2,964 )
                               
Loss per share:              
Basic              
  Net loss $     (0.11 )   $     (0.16 )   $     (0.09 )   $     (0.17 )
                               
Diluted              
  Net loss $     (0.11 )   $     (0.16 )   $     (0.09 )   $     (0.17 )
Weighted average number of common shares outstanding:                              
Basic     17,333         17,333         17,333         17,333  
Diluted     17,333         17,333         17,333         17,333  


QC Holdings, Inc.
Consolidated Condensed Balance Sheets
(in thousands)

 
December 31,
2017

  June 30,
2018
ASSETS      (Unaudited)  
Current assets        
Cash and cash equivalents $   16,198   $   16,525  
Restricted cash     1,879       2,069  
Loans receivable, less allowance for losses of $7,755 at  December 31, 2017 and $7,742 at June 30, 2018     32,921       30,079  
Other current assets       3,748         3,469  
Total current assets     54,746       52,142  
Non-current loans receivable, less allowance for losses of $83 at  December 31, 2017 and $64 at June 30, 2018     258       192  
Property and equipment, net     8,241       8,703  
Other assets, net       7,313         7,112  
Total assets $   70,558   $   68,149  
         
LIABILITIES AND STOCKHOLDERS' EQUITY        
Current liabilities        
Accounts payable and other current liabilities $     9,355   $     8,103  
Revolving credit facility     2,500       4,678  
Subordinated debt       8,168         7,822  
Total current liabilities     20,023       20,603  
         
Non-current liabilities       4,471         4,482  
Total liabilities     24,494       25,085  
         
Stockholders' equity       46,064         43,064  
Total liabilities and stockholders' equity $   70,558   $   68,149  


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

 
Six Months Ended
June 30, 2017

    Six Months Ended
June 30, 2018
Operating activities:                
                 
Net loss $     (1,575 )     $     (2,964 )
Adjustments to reconcile net loss to net cash     11,148           14,202  
Changes in assets and liabilities     (4,968 )           (10,463 )
Net operating       4,605             775  
                 
Investing activities:                
Capital expenditures     (1,407 )         (1,875 )
Other       1             -  
Net investing       (1,406 )           (1,875 )
                 
Financing activities:                
Net repayment of borrowings     (2,625 )         1,700  
Other       -             (38 )
Net financing       (2,625 )           1,662  
                 
Effect of exchange rate changes on cash, cash equivalents and restricted cash       67             (45 )
                 
Net increase in cash, cash equivalents and restricted cash     641           517  
Cash, cash equivalents and restricted cash at beginning of year       18,525             18,077  
Cash, cash equivalents and restricted cash at end of period $   19,166       $   18,594  

Contact:
Douglas E. Nickerson (913-234-5154)
Chief Financial Officer

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