QC Holdings (QCCO)

Our business and results of operations may be adversely affected if we are unable to manage our growth effectively.

In the second half of 2004 and all of 2005, we grew our business dramatically, primarily through the opening of 219 de novo branches during that 18-month time period. The dramatic growth in new branches created numerous operating challenges for us in 2005, including particularly high loan losses in the second and third quarters in 2005, compared to the same quarters in 2004. We believe that the higher loan losses were attributable in part to the challenges of managing that growth.

Managing growth requires a number of key support functions, including the ability to hire, train and retain an adequate number of experienced managers and employees, the ability to effectively communicate our branch-level policies, procedures and practices to new managers and employees, the ability to identify good branch locations, the ability to obtain government permits and licenses for new branches and other factors that are beyond our control. Expansion beyond the geographic areas where our branches are presently located will continue to place time demands on management and divert their attention, which could have an adverse impact on our business and financial results.

While we have completed only one larger acquisition since our initial public offering in July 2004, we continue to evaluate acquisition opportunities as a regular part of our business. Acquisitions may entail numerous integration risks and impose costs on us, including:

In addition, we may not be successful in identifying attractive acquisitions or completing acquisitions on favorable terms. Our failure to identify, close and integrate acquired branches could adversely affect our business.

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Our business and results of operations may be adversely affected if we are unable to manage our growth effectively.

In the second half of 2004 and all of 2005, we grew our business dramatically, primarily through the opening of 219 de novo branches during that 18-month time period. The dramatic growth in new branches created numerous operating challenges for us in 2005, including particularly high loan losses in the second and third quarters in 2005, compared to the same quarters in 2004. We believe that the higher loan losses were attributable in part to the challenges of managing that growth.

Managing growth requires a number of key support functions, including the ability to hire, train and retain an adequate number of experienced managers and employees, the ability to effectively communicate our branch-level policies, procedures and practices to new managers and employees, the ability to identify good branch locations, the ability to obtain government permits and licenses for new branches and other factors that are beyond our control. Expansion beyond the geographic areas where our branches are presently located will continue to place time demands on management and divert their attention, which could have an adverse impact on our business and financial results.

While we have completed only one larger acquisition since our initial public offering in July 2004, we continue to evaluate acquisition opportunities as a regular part of our business. Acquisitions may entail numerous integration risks and impose costs on us, including:

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In addition, we may not be successful in identifying attractive acquisitions or completing acquisitions on favorable terms. Our failure to identify, close and integrate acquired branches could adversely affect our business.

Our business and results of operations may be adversely affected if we are unable to manage our growth effectively.

In the second half of 2004 and all of 2005, we grew our business dramatically, primarily through the opening of 219 de novo branches during that 18-month time period. The dramatic growth in new branches created numerous operating challenges for us in 2005, including particularly high loan losses in the second and third quarters in 2005, compared to the same quarters in 2004. We believe that the higher loan losses were attributable in part to the challenges of managing that growth.

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Managing growth requires a number of key support functions, including the ability to hire, train and retain an adequate number of experienced managers and employees, the ability to effectively communicate our branch-level policies, procedures and practices to new managers and employees, the ability to identify good branch locations, the ability to obtain government permits and licenses for new branches and other factors that are beyond our control. Expansion beyond the geographic areas where our branches are presently located will continue to place time demands on management and divert their attention, which could have an adverse impact on our business and financial results.

While we have not completed any material acquisitions since our initial public offering in July 2004, we continue to evaluate acquisition opportunities as a regular part of our business. Acquisitions may entail numerous integration risks and impose costs on us, including:

In addition, we may not be successful in identifying attractive acquisitions or completing acquisitions on favorable terms. Our failure to identify, close and integrate acquired branches could adversely affect our business.

Our business and results of operations may be adversely affected if we are unable to manage our growth effectively.

Our continued growth is dependent upon a number of factors, including the ability to hire, train and retain an adequate number of experienced managers and employees, the availability of good store locations, the availability of adequate financing for our expansion activities, the ability to obtain any government permits and licenses and other factors that are beyond our control. Expansion beyond the geographic areas where our stores are presently located will increase demands on management and divert their attention, which could have an adverse impact on our business and financial results.

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Further, acquisitions may entail numerous integration risks and impose costs on us, including:

In addition, we may not be successful in identifying attractive acquisitions or completing acquisitions on favorable terms. Our failure to integrate acquired stores could adversely affect our business.