QC Holdings, Inc. (NASDAQ: QCCO) reported income from continuing operations of $5.2 million, or $0.29 per diluted share, and revenues of $46.2 million for first quarter 2011.
“We were pleased with our first quarter results,” said QC Chairman and Chief Executive Officer Don Early. “With respect to our short-term loan branches, we experienced earnings improvements in the majority of our states during first quarter 2011, largely due to improved losses, reduced operating expenses and stable revenues.
“Our revenue mix continues to evolve, with automotive sales and fees from installment and title loans representing nearly 30% of total revenues in first quarter 2011 compared to about 20% in prior year’s first quarter. This evolution reflects diversification within our short-term loan branch network, as well as external to it through our buy here, pay here business.”
For the three months ended March 31, 2010, income from continuing operations totaled $5.6 million, or $0.31 per diluted share, and revenues totaled $46.8 million.
The three months ended March 31, 2011 and 2010 include discontinued operations relating to branches that were closed or sold during each period. Schedules reconciling adjusted EBITDA to income from continuing operations for the three months ended March 31, 2011 and 2010 are provided below.
Revenues declined $589,000, or 1.3%, quarter-to-quarter. This decline is primarily due to reduced loan volumes in Arizona resulting from the expiration of the existing payday loan law on June 30, 2010, substantially offset by higher automotive revenues.
Branch operating costs, exclusive of loan losses, totaled $23.1 million during the three months ended March 31, 2011, a $1.8 million increase over the $21.3 million in the same 2010 period. The increase was primarily attributable to higher cost of sales in the automotive business.
During the three months ended March 31, 2011, the company reported a decline in loan losses to $4.9 million compared to $5.7 million in the same 2010 quarter. The loss ratio for the current quarter totaled 10.6%, down from the 12.2% in first quarter 2010. This improvement reflects fewer returned items and a better collection rate quarter-to-quarter. The company received cash of approximately $205,000 and $65,000 from selling older debt during first quarter 2011 and 2010, respectively.