CALGARY, ALBERTA–(Marketwire – May 20, 2009) – Quorum Information Technologies Inc. (“Quorum” or the “Corporation”) (TSX VENTURE:QIS) today released First Quarter (Q1) Fiscal Year (FY) 2009 results. Quorum provides services to General Motors (GM), Chrysler and Hyundai dealerships in North America. The Corporation is an Integrated Dealership Management System (IDMS) strategic partner with GM and a strategic partner with Microsoft. Quorum's XSELLERATORTM product is broadly promoted to GM dealerships by these prominent industry partners.
The automotive industry and GM in particular, is undergoing a significant transformation. At the end of this process, we expect that the future industry will be right-sized and GM will exist as a leaner, profitable organization. Quorum's XSELLERATOR solution is ideally suited for the future industry because it significantly improves dealerships' processes and allows them to become customer-centric organizations. In partnership with GM, we have built factory-to-dealership integration that is unparalleled, scalable to other OEMs, and drives real efficiencies to both dealerships and the OEM (GM).
The automotive industry transformation will provide Quorum with an interesting and challenging business environment in 2009. GM's plan to restructure its operations and reduce its North American dealership count by approximately 40% presents immediate challenges. While the impact of this announcement is not to be minimized, it is Quorum management's informed opinion that the demographic of our customer base is such that the impact will be significantly lower than the forecasted total 40% reduction. Of Quorum's 225 customers, 75% are Canadian, 25% are US, while 15% are non-GM and 60% are Chevrolet dealerships, GM's strongest brand.
Considering the GM reductions in 2009, Quorum's management is forecasting a year of very little (if any) growth yet improved profitability. However, the opportunity in the wake of the industry transition will present Quorum with significant growth potential and the strategies implemented during 2008 and 2009 have put the Company in a good position capitalize on it.
Highlights of our strong Q1 FY2009 results (in 000's) are as follows:
– Increased revenue by 13% from $1,673K in Q1 FY2008 to $1,896K in Q1 FY2009;
– Generated a positive EBITDA (earnings before interest, taxes and amortization) in Q1 FY2009 of $369K versus a negative EBITDA in Q1 FY2008 of $331K;
– Generated a positive net income in Q1 FY2009 of $189K versus a net loss in Q1 FY2008 of $522K;
– Including Q1 FY2009, the Company generated a positive net income for the last three quarters in a row;
– Generated positive cash flow from operating activities in Q1 FY2009 of $289K versus a negative cash flow in Q1 FY2008 of $226K;
– Cash flow from investing activities in Q1 FY2009 consumed $286K versus a consumption of $338K in Q1 FY2008.
Financial Highlights
Three months Three months
ended March 31, ended March 31,
2009 2008
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Gross revenue $ 1,896,352 $ 1,672,884
Cost of products and services sold 789,270 1,167,624
Gross profit 1,107,082 505,260
Income (loss) before interest, taxes and
amortization (EBITDA)
369,137 (331,239)
Net income (loss) 188,818 (522,220)
Basic earnings (loss) per share 0.005 (0.013)
Fully diluted earnings (loss) per share $ 0.005 $ (0.013)
Weighted average number of common shares
Basic 39,298,438 39,298,438
Diluted 39,298,438 39,298,438
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About Quorum
Headquartered in Calgary, Alberta, Quorum's focus is on developing, marketing, implementing and supporting its XSELLERATORTM product for the automotive vertical. XSELLERATOR is a dealership and customer management software product which automates, integrates and streamlines every process across departments in a dealership. One of the select North American suppliers of General Motors' IDMS, Quorum is the third largest DMS provider for GM's Canadian dealerships with over 20% of the market. Quorum is a Microsoft Gold Certified Partner and Field-Level Managed ISV in both Canada and the United States. Quorum Information Technologies Inc. is traded on the Toronto Venture Exchange (TSX-V) under the symbol QIS. For additional information, please go to www.QuorumDMS.com.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
Quorum Information Technologies Inc.
Leanne Bannon
(403) 777-0036 ext 164
Email: BannonL@QuorumDMS.com
Website: www.QuorumDMS.com
