CALGARY, ALBERTA–(Marketwire – June 17, 2009) – Quorum Information Technologies Inc. (TSX VENTURE:QIS) (Quorum) issued statements today regarding its operations, highlighting its strong positioning in the automotive dealer management market.
On June 1st, General Motors filed for Chapter 11 bankruptcy protection. On the same day, GM Canada Ltd announced that it will complete its restructuring without the use of a court-supervised process. As the #1 GM IDMS vendor in North America, a significant portion of Quorum's monthly support revenues is billed via the GM electronic billing system. Dan Ichelson, Quorum's VP Operations and Development confirmed, “According to the bankruptcy court rulings, our special supplier status means that we should see no interruption in our support or software development payments.”
In May 2009, General Motors reported that it began a process of notifying a number of its dealerships that their franchises would not be renewed past October 2010. Due to the relative strength and demographic profile of Quorum's dealership customer base, the Company has confirmed that while the publicized GM dealer reductions were approximately 42%, less than 23% of Quorum's GM dealers (approximately 20% of its total customers) have been affected. “We believe that this is a strong statement about the progressive nature of the dealerships that have selected the Quorum system. We're proud to have such a successful customer base,” commented Mark Allen, Quorum's VP of Sales, Marketing and Services. “Based on the conversations we've had with our customers that are losing their GM franchises, about 60% or more intend to continue automotive operations, and we are here to help them in that endeavor,” he added. In total, Quorum expects that less than 10% of its customer base will cease operations entirely, and those closures will be spread over the next 18 months.
Beyond the impact of dealer reductions, Quorum's management is optimistic regarding future sales opportunities. According to Allen, “As the dust settles and the GM dealers who are secure about their future begin to evaluate their on-going operations, we will have a unique opportunity to provide them with a premium system to help further their business while also helping them reduce monthly expenses. We are confident that there is significant market opportunity for us in the near future and believe our software provides GM dealers with a more efficient retail business process and improved customer relationship tools. We are putting programs in place to help dealers overcome the initial expense of a system change, and to realize savings quickly. All-in-all, while we're cautious about our short-term forecasts and the recovery of the North American automotive marketplace, we are confident of the long-term prospects for Quorum.”
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 is traded on the Toronto Venture Exchange (TSX-V) under the symbol QIS. For additional information, please go to www.QuorumDMS.com.
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Quorum Information Technologies Inc.
Leanne Bannon
(403) 777-0036 ext 164
Email: BannonL@QuorumDMS.com
Website: www.QuorumDMS.com
