OVERLAND PARK, Kan., Aug. 30, 2016 (GLOBE NEWSWIRE) -- OREANDA-NEWS.  QC Holdings, Inc. (OTC PINK:QCCO) reported a net loss of $4.3 million and revenues of $29.2 million for the second quarter ended June 30, 2016. For the six months ended June 30, 2016, net loss totaled $3.1 million and revenues were $60.9 million. The three months and six months ended June 30, 2016 include a charge of $2.7 million (approximately $1.7 million net of income taxes) in connection with recording a loan loss reserve for a business-to-business receivable.

For the three months ended June 30, 2015, net loss totaled $1.0 million and revenues were $32.0 million. Net income totaled $106,000 and revenues totaled $66.5 million for the six months ended June 30, 2015.

The revenue decline during 2016 compared to 2015 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 higher in 2016 versus 2015 as a result of the business-to-business loan reserve noted above.  Exclusive of that reserve, loan losses were very similar when comparing to prior year’s periods.

Store Swap Transaction
On June 30, 2016, QC entered into a store swap transaction with Community Choice Financial Inc. (CCFI).  As part of the transaction, QC acquired all of CCFI’s 33 branches operated in Illinois, Kansas, Missouri and Utah and CCFI acquired all of QC’s 98 branches operated in Alabama, Arizona, California, Mississippi and Ohio.

Other than the transfer of the equity interests and assets, the transaction did not provide for the payment or receipt of any other consideration by QC or by CCFI, other than customary post-closing adjustments.  In entering into the transaction, QC and CCFI each concluded that the net value of the equity interests and other assets received by CCFI are substantially equal to the net value of the equity interests and other assets received by QC. 

The transaction was effective on July 1, 2016. The fair market value of the assets acquired or disposed of has not yet been determined.

Election of Directors
On July 27, 2016, the Company held its annual meeting of stockholders, where Don Early, Mary Lou Early, Richard B. Chalker and Jack L. Sutherland were elected as directors to serve for one year terms until the 2017 annual meeting of stockholders.

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 310 branches in 17 states at July 31, 2016. In Canada, the company, through its subsidiary Direct Credit Holdings Inc., is engaged in short-term, consumer Internet lending in various provinces.

(Financial and Statistical Information Follows)

 
QC Holdings, Inc.
Consolidated Condensed Statements of Operations
(in thousands, except per share amounts)
(Unaudited)
 
    Three Months Ended 
June 30,
   Six Months Ended 
June 30,
  2015   2016    2015   2016
Revenues              
Consumer loan interest and fees $     29,875     $     27,187     $  61,954     $     56,396  
Other       2,113           2,035           4,549           4,499  
Total revenues       31,988           29,222           66,503           60,895  
Provision for losses     10,619         12,376         18,681         19,618  
Operating expenses       16,118           15,708           32,733           31,581  
Gross profit     5,251         1,138         15,089         9,696  
               
Corporate and Regional expenses     6,314         7,264         13,434         13,794  
Other expense, net       316           475           1,271           588  
Income (loss) from continuing operations before income taxes     (1,379 )       (6,601 )       384         (4,686 )
Provision (benefit) for income taxes       (398 )         (2,258 )         278           (1,565 )
Net income (loss) $     (981 )   $     (4,343 )   $     106     $     (3,121 )
                   
Earnings (loss) per share:              
Basic              
  Net income (loss) $     (0.06 )   $     (0.25 )   $     0.01     $     (0.18 )
                       
Diluted              
  Net income (loss) $     (0.06 )   $     (0.25 )   $     0.01     $     (0.18 )
Weighted average number of common shares outstanding:              
Basic     17,375         17,333         17,369         17,333  
Diluted     17,375         17,333         17,369         17,333  
QC Holdings, Inc.
Consolidated Condensed Balance Sheets
(in thousands)
               
    December 31,
2015		       June 30,
2016		  
ASSETS            (Unaudited)  
Current assets              
Cash and cash equivalents $   16,115     $   13,456  
Restricted cash     950         950  
Loans receivable, less allowance for losses of $6,395 at December 31, 2015 and $8,932 at June 30, 2016     50,555         42,337  
Other current assets       6,286           8,159  
Total current assets     73,906         64,902  
Non-current loans receivable, less allowance for losses of $1,556 at December 31, 2015 and $872 at June 30, 2016     3,802         2,752  
Property and equipment, net     4,797         5,266  
Other assets, net       11,486           9,784  
Total assets $ 93,991     $   82,704  
               
LIABILITIES AND STOCKHOLDERS’ EQUITY              
Current liabilities              
Accounts payable and other current liabilities $   11,407     $   10,301  
Revolving credit facility     6,250         1,750  
Subordinated debt       3,553           3,624  
Total current liabilities     21,210         15,675  
               
Non-current liabilities     4,967         3,557  
Subordinated debt              
Total liabilities     26,177         19,232  
               
Stockholders’ equity       67,814           63,472  
Total liabilities and stockholders’ equity $   93,991     $   82,704