QC Holdings, Inc. (NASDAQ: QCCO) reported income from continuing operations of $2.3 million and revenues of $48.4 million for the quarter ended September 30, 2010. For the nine months ended September 30, 2010, income from continuing operations totaled $9.4 million and revenues were $142.8 million.
“Our third quarter results reflect the ongoing challenges associated with the negative effects of legislative changes in Washington, South Carolina, Arizona, Virginia and Kentucky,” said QC Chairman and Chief Executive Officer Don Early. “With our revenue down significantly in each of those states, our field employees are focused on delivering outstanding service to our customers, collecting past-due loans and limiting discretionary expenditures.
“With respect to states where there have been no recent regulatory or legislative changes, our third quarter results were unremarkable, with lower losses and expenses being substantially offset by reduced loan volumes compared to prior year.”
For the three and nine months ended September 30, 2009, income from continuing operations totaled $4.7 million and $15.5 million, respectively, and revenues were $55.5 million and $160.0 million, respectively.
The three and nine months ended September 30, 2010 and 2009 include discontinued operations relating to branches that were closed during each period. Schedules reconciling adjusted EBITDA to income from continuing operations for the three and nine months ended September 30, 2010 and 2009 are provided below.
** Third Quarter **
Revenues decreased $7.1 million, or 12.8%, quarter-to-quarter. This decline is primarily due to reduced payday loan volumes from unfavorable law changes effective January 1, 2010 in Washington and South Carolina that restrict customer access to payday loans and the June 30, 2010 termination of the payday loan law in Arizona. A $1.4 million improvement in automotive sales and interest revenues partially offset these declines.
Branch operating costs, exclusive of loan losses, increased $882,000 compared to prior year’s third quarter, totaling $23.4 million during the three months ended September 30, 2010. This increase is attributable to higher cost of sales associated with the automotive business.