CALGARY, ALBERTA–(Marketwire – Aug. 20, 2009) – Quorum Information Technologies Inc. (TSX VENTURE:QIS) (“Quorum” or the “Corporation”) today released Second Quarter (Q2) 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.
With Chrysler's and General Motor's recent emergence from the bankruptcy process, the automotive industry has begun to stabilize and the resulting reorganized domestic manufacturing companies are focused on lean, profitable operations. Quorum's XSELLERATOR solution is ideally suited for the industry at a time when dealerships are looking for strategic advantages, reduced costs and increased profitability. XSELLERATOR significantly improves dealerships' and manufacturers' business processes and allows them to become customer-centric organizations. XSELLERATOR also provides immediate and direct cost reductions on an on-going basis from the traditional fees charged by the dominant market providers.
The impact to Quorum of GM's U.S. bankruptcy proceedings and dealership franchise reductions was fairly minimal. Quorum did not experience any interruption in its GM payments during the bankruptcy proceedings. According to published accounts, GM notified 42% of their dealerships across the U.S. and Canada that their franchises would not be renewed at the end of 2010. Approximately twenty three percent (23%) of Quorum's GM dealership customers received such notifications. Many of these dealerships are transforming their business to provide other automotive sales and services and will remain with Quorum to serve their DMS needs. Quorum predicts that approximately ten percent (10%) of its customer base will cease operations entirely as a result of the franchise changes, and those closures will be spread over the next 18 months. Quorum also expects new sales to completely offset those closures during this timeframe.
The automotive industry remains a challenging environment, however, despite all of the recent turmoil, Quorum continues to produce positive results:
– Four consecutive quarters of profitable results.
– Positive Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) for Q2 FY2009 of $250K and FY2009 year-to-date of $619K.
– Although Net New and Integration revenue declined for the quarter our recurring support revenues remained consistent at $1,460K for both Q1 and Q2 FY2009.
– #1 GM IDMS Supplier in North America measured by number of GM IDMS dealerships.
– Only Dealer Service Provider (DSP) to have developed and deployed all available GM integration points in both Canada and the U.S.
– Strong partnership with Newfoundland government allowed Quorum to strengthen its balance sheet with a $0.5 million, 0%, non-secured government loan with the Atlantic Canada Opportunities Agency (ACOA).
Quorum produced solid results during one of the most challenging quarters for both the automotive industry and specifically General Motors. Now that the major restructuring is complete for GM and Chrysler, we look forward to getting “back to business” and growing the Company profitably.
Six Months Six Months Q2 Ended Q2 Ended Q1 Ended Q1 Ended
Ended Ended June 30, June 30, March 31, March 31,
June 30, June 30, 2009 2008 2009 2008
Gross revenue $ 3,533 $ 3,790 $ 1,636 $ 2,117 $ 1,896 $ 1,673
Gross profit 2,010 1,352 903 847 1,107 505
Expenses 2,119 2,146 1,180 1,093 772 945
(EBITDA) 619 (271) 250 60 369 (331)
(loss) 191 (774) 3 (252) 189 (522)
activities 342 (490) 53 (264) 289 (226)
expenditures $ 4,032 $ 4,757 $ 2,072 $ 2,422 $ 1,960 $ 2,336
- in the
period 3 12 1 10 2 2
Rooftops 224 213 224 213 225 203
Quorum is a North American company focused 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. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.