QC Holdings, Inc. (NASDAQ:QCCO) reported income from continuing operations of $2.1 million and revenues of $48.3 million for the quarter ended September 30, 2011. For the nine months ended September 30, 2011, income from continuing operations totaled $7.6 million and revenues were $138.1 million. The nine months ended September 30, 2011 includes $2.0 million in accrued costs ($1.2 million, net of income taxes) resulting from a tentative settlement of an outstanding legal matter.
“We were pleased to see revenue growth during the third quarter, largely driven by increases in our installment and title lending products,” said QC Chairman and Chief Executive Officer Don Early. “This improvement, however, was offset by a higher loss ratio quarter-to-quarter, largely due to the transition to new products in connection with recent changes in lending laws in several states.
“Entering 2011, we challenged our financial services field personnel to maintain operating margins despite negative consumer confidence and consumer spending headwinds. Through nine months of 2011, our store-level margins are essentially unchanged from prior year, indicative of the level of talent and commitment to excellence throughout our branch network.”
For the three months and nine months ended September 30, 2010, income from continuing operations totaled $2.9 million and $9.6 million, respectively, and revenues were $47.1 million and $136.3 million, respectively.
The three months and nine months ended September 30, 2011 and 2010 include discontinued operations relating to branches that were closed during each period. Schedules reconciling adjusted EBITDA to income from continuing operations for the three months and nine months ended September 30, 2011 and 2010 are provided below.
** Third Quarter **
The $1.2 million improvement in revenues quarter-to-quarter is attributable to higher installment and title loan volumes, as well as an increase in automotive revenues, partially offset by lower payday loan fees. The change in the mix of lending revenues in the company’s financial services branches is attributable to new lending legislation in various states, as well as the addition of complementary products in several other states.