CALGARY, ALBERTA–(Marketwire – April 27, 2010) – Quorum Information Technologies Inc. (“Quorum” or the “Company”) (TSX VENTURE:QIS) today released Fiscal Year (FY) 2009 results. Quorum delivers its dealership management system (DMS), XSellerator™, and related services to dealerships throughout North America. The Company is both an Integrated Dealership Management System (IDMS) strategic partner with General Motors Corporation (GM) and a strategic partner with Microsoft. Quorum's XSellerator product is broadly promoted to its target dealerships throughout North America by these prominent industry partners.
Maury Marks, Quorum's President and CEO made the following remarks about the Company's FY2009 results:
2009 was a very challenging year for everyone in our industry. The global recession had a significant impact on the automotive industry. GM emerged from Chapter 11 Bankruptcy protection in July, 2009 as a new, leaner organization. As part of the process, GM announced that 42% of its franchised dealerships in both Canada and the U.S. would not have their GM franchise renewed. At the time, over 90% of our 225 customers were GM dealerships. The net impact on Quorum was:
- Only 23% of our customers were affected. Two-thirds of those customers changed their business model, and remained with Quorum as their DMS provider. To support these customers, Quorum enhanced its product to support other makes and we now provide vehicle manufacturer integration to GM, Isuzu, Chrysler, Hyundai, Kia, Nissan, Subaru, NAPA and Bumper to Bumper dealerships.
- In the last quarter of 2009, Quorum sold a record 16 dealership rooftops (a record for a quarter). These sales, once implemented by May 2010, will get Quorum back to 225 dealership rooftops deployed and approximately 75% will be GM dealerships.
- As a result of Quorum's strong Q4 FY2009 sales, combined with high dealership losses by our competitors, Quorum attained 25% market share and is now the second largest provider of dealership management systems to GM dealerships in Canada.
Quorum enters 2010 with a stronger focus on continuing to open new vehicle manufacturer markets and a more diversified customer base with reduced dependence on GM dealerships. Longer term, our “all makes” strategy will continue to diversify our customer base; however, GM franchises will remain a key focus for the organization.
Some of Quorum's key results are as follows:
- Revenue was reduced by 14% from $8,451K in FY2008 to $7,268K in FY2009 due to the following:
- A decrease of 58% in one-time revenue from new sales (seven new dealerships were installed in 2009 compared with 31 installs in 2008). This was largely because spending was frozen across many dealerships for most of the year due to franchise concerns.
- An increase of 7% in support revenues. With limited new installs and dealership closures, our critical support revenues still had a small increase in 2009.
- Gross Margin percent improved to 61% in FY2009 compared to 43% in FY2008. Stronger cost controls and more efficient business processes combined with support revenues representing a higher percentage of total revenues were responsible for the improvement. As our customer base and support revenues grow as a percentage of total revenue, the higher margin support revenue drives our gross margin percentage up.
- Earnings before interest, taxes and amortization (EBITDA) of $1,549K for FY2009 compared to negative $(40K) in FY2008. EBITDA increased because Quorum has reached a critical mass of customers, and the related support payments are covering a significant portion of our cost of operations.
- Net income of $236K for FY2009 compared with a net loss of $(626K) in FY2008.
- Working capital as at December 31, 2009 was $1,844K, an improvement of $849K over December 31, 2008. This improvement is a result of working capital generated from operations and the receipt of $475K of a $500K interest-free, five year, unsecured government loan with the Atlantic Canada Opportunities Agency (ACOA).
In light of dealing with the effects of the global recession and GM's corporate bankruptcy, the Company had a successful year. The Company is expecting sales growth in 2010 and plans to continue our “all makes” expansion as we partner with new vehicle manufacturers.
|Year ended December 31, 2009||Year ended December 31, 2008||Year ended December 31, 2007|
|Cost of products and services sold||2,813,728||4,802,411||5,610,441|
|Income (loss) before interest, taxes and amortization (EBITDA)||1,548,963||(39,931||)||(1,096,660||)|
|Net income (loss)||236,045||(625,679||)||(1,951,916||)|
|Basic earnings (loss) per share||$0.006||$(0.016||)||$(0.051||)|
|Fully diluted earnings (loss) per share||$0.006||$(0.016||)||$(0.051||)|
|Weighted average number of common shares|
|XSellerator installations – in the period||7||31||29|
|XSellerator active dealership rooftops||222||226||201|
Quorum is a North American company focused on developing, marketing, implementing and supporting its XSellerator™ product for GM, Isuzu, Chrysler, Hyundai, Kia, Nissan, Subaru, NAPA and Bumper to Bumper dealerships. 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 under General Motors' IDMS program, Quorum is the second largest DMS provider for GM's Canadian dealerships with 25% 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.
This press release contains certain forward-looking statements and forward-looking information (“forward-looking information”) within the meaning of applicable Canadian securities laws. Forward-looking information is often, but not always, identified by the use of words such as “anticipate”, “believe”, “plan”, “intend”, “objective”, “continuous”, “ongoing”, “estimate”, “expect”, “may”, “will”, “project”, “should” or similar words suggesting future outcomes. In particular, this press release includes forward-looking information relating to results of operations, plans and objectives, projected costs and business strategy. Quorum believes the expectations reflected in such forward-looking information are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking information should not be unduly relied upon.
Forward-looking information is not a guarantee of future performance and involves a number of risks and uncertainties some of which are described herein. Such forward-looking information necessarily involves known and unknown risks and uncertainties, which may cause Quorum's actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking information. These risks and uncertainties include but are not limited to the risks identified in Quorum's Management's Discussion and Analysis for the year ended December 31, 2009. Any forward-looking information is made as of the date hereof and, except as required by law, Quorum assumes no obligation to publicly update or revise such information to reflect new information, subsequent or otherwise.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.