UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
November 1, 2007 (November 1, 2007)
Date of Report (Date of earliest event reported)
QC HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Kansas 000-50840 48-1209939
(State or other jurisdiction (Commission file (IRS Employer
of incorporation) number) Identification Number)
9401 Indian Creek Parkway, Suite 1500
Overland Park, Kansas 66210
(Address of principal executive offices)
(913) 234-5000
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425).
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12).
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b)).
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c)).
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Item 2.02. Results of Operations and Financial Condition.
On November 1, 2007, QC Holdings, Inc. issued a press release announcing
its financial results for the three and nine months ended September 30, 2007. A
copy of the press release is attached as Exhibit 99.1 to this report and is
incorporated herein by reference.
The attached press release includes three non-GAAP financial measures that
management uses and that the company believes may be useful to investors: (i)
adjusted net income, (ii) adjusted net income per share, and (iii) adjusted
EBITDA. Adjusted net income is calculated as net income plus the after tax
effect of the costs and charges associated with activities to close an unusually
high number of branch closings in first quarter 2007 (the majority of which were
consolidated into nearby branches) and to terminate the de novo process on eight
branches never opened, as well as the costs and charges associated with the
company's second quarter 2007 activities to close its eight Oregon branches due
to changes in the payday loan laws that effectively preclude the product in that
state. Adjusted EPS is calculated as adjusted net income on a fully diluted per
share basis. Adjusted EBITDA is calculated as net income before interest, taxes,
depreciation and amortization expenses, adjusted to exclude the after tax
charges related to stock options and restricted stock awards. For the nine
months ended September 30, 2007, the pre-tax costs and charges associated with
the Oregon branches and the unusually high number of branch
closings/consolidations in first quarter 2007 have been excluded from the
computation. Reconciliations of each of these non-GAAP measures are included in
schedules to the press release filed with this report.
These non-GAAP financial measures are intended to supplement the company's
financial information prepared in accordance with accounting principles
generally accepted in the United States of America (GAAP) included in the press
release by providing management and investors with additional insight regarding
results of operations. Management uses adjusted net income in its strategic
planning for the company and in evaluating the results of operations of the
company, and anticipates that its compensation committee will use adjusted net
income in evaluating financial performance of the company and management in
2007. Management believes the adjusted net income measure may be similarly
useful to investors when evaluating financial results of the company for
comparable periods because the Oregon branch closings represent the termination
of operations in an entire state, and the number of branch closings in first
quarter 2007 was unusually high (31 branches) and is not consistent with the
normal practice of evaluating and periodically closing a handful of branches
each year. Additionally, certain of these branch closing costs represent
significant non-cash charges in computing GAAP net income. For the same reasons,
management also computes and uses adjusted earnings per share.
Management recognizes that its use of adjusted net income and adjusted EPS,
as with any non-GAAP financial measure, has various limitations, including the
fact that an adjusted item may be a normally recurring expense for the company
or may involve the actual use of cash. Nonetheless, management believes that
these adjusted net income and adjusted EPS measures provide additional insight
for investors into the operating results and business trends of the company. A
reconciliation of adjusted net income and adjusted EPS to net income and net
income per share is included in the schedules to the press release filed with
this report.
Management also uses adjusted EBITDA as a non-GAAP performance measure.
Management regularly reviews EBITDA as it assesses its current and prospective
operating results. Management uses adjusted EBITDA in its strategic planning for
the company and in evaluating the results of operations of the company. The
compensation committee has used adjusted EBITDA in evaluating the performance of
the company and management and in determining certain components of executive
compensation, including performance based vesting of restricted stock awards for
2007. Management calculates adjusted EBITDA as net income before interest,
taxes, depreciation and amortization expenses, adjusted to exclude the after tax
charges related to stock options and restricted stock awards (and for the three
and nine months ended September 30, 2007, the costs and charges associated with
the activities to close the Oregon branches and the unusually high number of
branch closings/consolidations in first quarter 2007). Management believes
adjusted EBITDA is useful to management and may be useful to investors because
certain of the adjusted items represent non-cash charges to net income, and
certain of the adjusted items can fluctuate significantly from period-to-period,
due in part to the timing of equity-based awards for compensation purposes.
Management recognizes that its use of adjusted EBITDA has various
limitations, including the fact that the adjusted items may be a normally
recurring expense or may involve the actual use of cash. Nonetheless, management
believes that this adjusted EBITDA measure provides additional insight for
investors into the operating results and business trends of the company.
The information in Item 2.02 of this report and in the exhibit attached to
this report is not filed for purposes of Section 18 of the Securities and
Exchange Act of 1934, as amended, or otherwise subject to the liabilities of
that section or Sections 11 or 12(a)(2) of the Securities Act of 1933, as
amended. The information contained in this Item 2.02 and in the accompanying
exhibit is not incorporated by reference into any filing with the SEC made by
the registrant, whether made before or after the date of this report, regardless
of any general incorporation language in that filing.
Item 8.01 Other Events.
On October 30, 2007, the company's board of directors declared a cash
dividend of 10 cents per common share. The dividend is payable November 19,
2007, to stockholders of record as of November 12, 2007.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits.
The following exhibit is filed as part of this report:
Exhibit No. Description
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99.1 QC Holdings, Inc. Press Release issued November 1, 2007,
reporting the three and nine months ended September 30,
2007 financial results.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
QC HOLDINGS, INC.
Date: November 1, 2007
By: /s/ Douglas E. Nickerson
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Name: Douglas E. Nickerson
Title: Chief Financial Officer
(Principal Financial and
Accounting Officer)