CALGARY, ALBERTA–(Marketwire – April 28, 2011) – Quorum Information Technologies Inc. (“Quorum” or the “Company”) (TSX VENTURE:QIS) today released its Fiscal Year (FY) 2010 results. Quorum delivers its dealership management system (DMS), XSellerator™, and related services to automotive 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 FY2010 results:
If 2009 was a year of contraction, 2010 was a year of change in the automotive industry. In 2009 a new, leaner GM organization emerged from bankruptcy protection. As part of the process it was announced that 42% of GM's franchised dealerships in both Canada and the U.S. would not have their GM franchises renewed. Prior to GM entering bankruptcy protection, over 90% of Quorum's 225 deployed dealership rooftops were GM dealerships. The impact to Quorum's customers through the last half of 2009 and 2010 was as follows:
- Although 42% of GM dealerships across North America lost their franchise in the process, only 24% of Quorum's customers were affected.
- Of the 24% affected, 28 customers changed their business model to another form of dealership still requiring Quorum's DMS, and 26 closed their businesses.
- To support the 28 customers that changed their business model, Quorum enhanced our product to support other makes and we now have GM, Isuzu, Chrysler, Hyundai, Kia, Nissan, Subaru, Saab, Suzuki, NAPA and Bumper to Bumper franchised dealership customers.
- In 2010, the Company installed 33 systems, up significantly from the seven installed in 2009 (the year the industry was in turmoil).
At the end of FY2010, Quorum had 240 installed dealership rooftops and approximately 75% of those rooftops are GM dealerships. GM's bankruptcy accelerated Quorum's movement to an “all makes” strategy. Longer term, our “all makes” strategy will continue to diversify our customer base, however, GM franchises will remain a key focus for the organization.
In 2010, the Company had a number of significant achievements as follows:
- Customer Care – our semi-annual GM IDMS customer satisfaction survey results showed that two-thirds of our Dealer Principals would definitely recommend us and the remaining one-third would likely recommend us.
- Product – we completed two new releases during the year with the highlight being version 4.7.1, that was general released in the U.S. late in 2010 and in Canada early in 2011. The V4.7.1 release contains the largest number of key enhancements in a single release in the Company's history.
- Implementations – it was an amazing achievement to scale our implementations up from seven installs in 2009 to 33 in 2010. Great people and a continual drive to improve our process facilitated this achievement. To deliver more consistent, reliable implementations for new customers, we introduced a Quorum and Dealer scorecard to ensure all key implementation deliverables are accomplished.
- Support Services – our support desk improved their responsiveness yet again. On average, we now close 74% of all Support calls within 30 minutes (up from 69% in 2009) and 87% of all calls within 24 hours (up from 85% in 2009).
- Our “We've got you covered” approach to our solution offering was launched in early FY2011; however, a lot of the development and process work took place in FY2010. This is a broad program designed to ensure that we offer our customers a comprehensive set of technology services to take the worry out of running their businesses. The offering includes a suite of network security and monitoring services as well as compliance solutions for the ever-increasing complexities of dealership Finance and Insurance (“F&I”).
- Sales – our “We've got you covered” marketing approach extends to sales with the recently announced groundbreaking DMS Assurance program that covers price, software and business assurance. These assurance programs include favorable contract terms for new customers including lifetime monthly price protection and all new versions of XSellerator and Microsoft server technology at no additional cost. The programs provide dealerships with price predictability for their DMS services – maximum value at the best possible prices.
- Financial – in Q4 FY2010 Quorum posted our sixth consecutive cash flow positive quarter. During the year, we paid off and retired our convertible debenture, four months before its original maturity date. On December 15, 2010, the Company also entered into a demand operating line of $525,000 with HSBC Bank.
- Employees – none of the Company's accomplishments are possible without highly motivated, engaged people. Our sincere thanks to the people that drive Quorum. In FY2010, we started measuring our staff engagement and taking action to improve our job satisfaction and engagement throughout the Company.
Some of Quorum's key financial results are as follows:
- Revenues increased by 6% from $7,268K in FY2009 to $7,696K in FY2010. The primary reasons were an increase in both:
- Net new customer installations of 33 in FY2010, up from 7 in FY2009.
- Recurring support of $6,075K in FY2010, compared to $5,839K in FY2009, an increase of 4%.
- Earnings before interest, taxes and amortization (EBITDA) of $1,390K for FY2010 compared to $1,548K in FY2009. EBITDA decreased slightly because our cost structure increased to accommodate the much higher installation rate in FY2010 compared to FY2009.
- Net income before income taxes increased to $354K for FY2010 compared with $93K in FY2009. Although there was a slight decline in EBITDA for FY2010, this was offset by a significantly lower non-cash Foreign Exchange expense which was $163K in FY2010, down from $458K in FY2009.
- Net Income decreased to $95K for FY2010 compared with $236K in FY2009. This change was due to a significant increase of $402K in non-cash future income tax expense to $259K in FY2010 from a $143K recovery in FY2009.
With a stronger balance sheet, an incredible product, excellent implementations and support services, exceptional staff and customers and six consecutive quarters of cash flow positive operations, the Company is well positioned to take advantage of the challenging automotive market. For our dealership customers, “We've got you covered”.
Quorum has filed its 2010 consolidated financial statements and notes thereto as at and for the period ended December 31, 2010 and accompanying management's discussion and analysis in accordance with National Instrument 51-102 – Continuous Disclosure Obligations adopted by the Canadian securities regulatory authorities. Additional information about Quorum will be available on Quorum's SEDAR profile at www.sedar.com and Quorum's website at www.QuorumDMS.com.
|(dollar figures in '000)|
|Year ended December 31, 2010||Year ended December 31, 2009||Year ended December 31, 2008|
|Cost of products and services sold||3,303,450||2,813,728||4,802,411|
|Income (loss) before interest, taxes and amortization (EBITDA)||1,389,639||1,548,963||(39,931||)|
|Net income (loss)||95,083||236,045||(625,679||)|
|Basic earnings (loss) per share||$||0.002||$||0.006||$||(0.016||)|
|Fully diluted earnings (loss) per share||$||0.002||$||0.006||$||(0.016||)|
|Weighted average number of common shares|
– in the period
|XSellerator active dealership rooftops||240||222||226|
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 that 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 Inc. 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, 2010. 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.