QC Holdings, Inc. (NASDAQ: QCCO) reported income from continuing operations of $3.2 million and revenues of $49.7 million for the quarter ended December 31, 2011. For the year ended December 31, 2011, income from continuing operations totaled $10.8 million and revenues were $187.5 million.
“Our fourth quarter results were slightly below our expectations,” said QC Chairman and Chief Executive Officer Don Early. “While we expected higher revenues and profit due to the inclusion of our new Canadian online lending subsidiary, we were disappointed with the ongoing drag associated with the change in the Illinois payday lending law that took effect in late first quarter 2011. Exclusive of Illinois, our US branch network generated a 3.9% improvement in revenues over prior year’s fourth quarter.
“Full year 2011 presented various challenges for the company and industry. For QC, we managed through higher losses and declining revenues in our financial services branches located in legislative-affected states. In our automotive division, escalating vehicle acquisition costs and higher losses offset the impressive increase in revenues year-to-year.
“From an industry perspective, the 2011 state legislative and regulatory activity was generally favorable, indicative of broader understanding and acceptance of short-term lending products. With respect to federal regulation, we expect that the Consumer Financial Protection Bureau will approach its oversight mandate through thoughtful research, reasoned judgment and pragmatism.”
For the three months and year ended December 31, 2010, income from continuing operations totaled $4.1 million and $13.8 million, respectively, and revenues were $47.8 million and $183.9 million, respectively.
The three months and year ended December 31, 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 year ended December 31, 2011 and 2010 are provided below.
** Fourth Quarter **
Revenues improved $1.9 million, or 4.0%, quarter-to-quarter, primarily due to the inclusion of fees and interest from the company’s Canadian online lending subsidiary (Direct Credit), which was acquired on September 30, 2011. The company’s automotive division reported a $284,000 increase in revenues over prior year’s fourth quarter. Payday and installment revenues in the company’s branches were down slightly during the three months ended December 31, 2011. This decline is attributable to the previously-noted change in the Illinois lending law, substantially offset by higher revenues in the majority of other states.