CALGARY, ALBERTA–(Marketwire – Nov. 21, 2011) – Quorum Information Technologies Inc. (“Quorum” or the “Company”) (TSX VENTURE:QIS) today released its Third Quarter (Q3) Fiscal Year (FY) 2011 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 an industry partner with Microsoft. Quorum's XSellerator product is broadly promoted to its target dealerships throughout North America by these prominent companies.
Maury Marks, Quorum's President and CEO made the following remarks about the Company's Q3 FY2011 results:
Over the last two years, Quorum has become an “all makes” organization, with a continued emphasis on GM dealerships. Quorum supplies our product to GM, Isuzu, Chrysler, Hyundai, Kia, Nissan, Subaru, Saab, NAPA and Bumper to Bumper franchised dealership customers. As the Company has grown in the market, we have also enhanced our operational excellence by focusing on measurable improvements. Some of our key Q3 FY2011 milestones are as follows:
- Quorum attained 250 installed active dealership rooftops at the end of Q3 FY2011. During the quarter we also sold an additional seven dealership rooftops that should be installed in Q4 FY2011. For the remainder of FY2011, we expect to experience some dealership losses attributed to dealerships closing after unsuccessfully operating with a new franchise. Our 250 dealership rooftops encompass 8,616 active users – approximately 35 users per rooftop.
- Our dealership Customer Satisfaction (“CSI”) score results in Q3 FY2011 were as follows:
- CSI semi annual survey – 86% of end users reported “satisfied” or “very satisfied” and 89% of dealer principles reported “satisfied” or “very satisfied”.
- Our monthly Support CSI survey reported an average of 94% “very satisfied” with the service they received from our support centre.
- For XSellerator, we started development on the ground-breaking Communicator project which is designed to transform how dealership staff is able take advantage of modern technology to communicate with their customers and with each other. First release of “Communicator” is scheduled for Q1 FY2012.
Key financial results summary:
- Sales increased by 1% to $1,874K in Q3 FY2011 up from $1,863K in Q3 FY2010 and margin after direct costs increased to $1,105K in Q3 FY2011 compared to $1,059 in Q3 FY2010, a 4% gain. The change in sales is due to:
- An increase of $86K in recurring support revenue as a result from having 250 active dealership rooftops at the end of Q3 FY2011.
- A decrease of $176K in net new revenue which was a result of completing three installations in Q3 FY2011 down from eight installations in Q3 FY2010.
- An increase in integration revenue of $102K due to an increased number of GM IDMS integration projects.
- Earnings before interest, taxes, depreciation and amortization (EBITDA) increased to $372K in Q3 FY2011 from $337K in Q3 FY2010. The increase is largely due to a reduced cost structure.
- Net income increased to $411K in Q3 FY2011 compared to a net loss of $292K in Q3 FY2010. The increase is largely due to two non-cash items as follows:
- Foreign exchange gain in Q3 FY2011 of $187K and a loss in Q3 FY2010 of $97K.
- Income tax recovery in Q3 FY2011 of $24K and an expense in Q3 FY2010 of $283K.
- Quorum posted its ninth consecutive quarter of cash flow positive results. These results are due to a well-managed cost structure and from attaining a critical mass of dealerships that generate significant higher margin recurring support revenues.
- Net working capital at September 30, 2011 was $913,532 with a current ratio of 2.37, compared to $640,309 at December 31, 2010, with a current ratio of 1.91, an increase of $273,223.
The Company continues to improve its financial and operational results. Our single biggest challenge in 2012 is to grow our quarterly sales and implementation rates. The seven new sales in Q3 FY2011 are a good indication that we are on the right track. Currently, we are approximately 1/3 of the way through completing the many Company-wide sales focused improvements that we have planned.
In other news, Ms. Marilyn Bown, the Company controller, will take over the role of Chief Financial Officer (CFO). The Company's existing CFO, Mr. Jeff Sharpe, is leaving the company to pursue other interests. Quorum wishes to thank Mr. Sharpe for his contributions to the Company.
Quorum has filed its Q3 2011 consolidated financial statements and notes thereto as at and for the period ended September 30, 2011 and accompanying management's discussion and analysis in accordance with National Instrument 51-102 – Continuous Disclosure Obligations adopted by the Canadian securities regulatory authorities. Additional information about Quorum will be available on Quorum's SEDAR profile at www.sedar.com and Quorum's website at www.QuorumDMS.com.
|(dollar figures in '000)|
|Nine Months Ended
Sept. 30, 2011
|Nine Months Ended
Sept. 30, 2010
|Q3 Ended Sept. 30, 2011||Q3 Ended Sept. 30, 2010||Q2 Ended
June 30, 2011
June 30, 2010
March 31, 2011
|Margin after direct costs||3,229||3,297||1,105||1,059||1,059||1,162||1,065||1,076|
|Earnings before interest, taxes and amortization (EBITDA)||934||1,046||372||337||
|Net income (loss) before deferred income tax||
|Net income (loss)||404||49||411||(292||)||93||369||(100||)||(28||)|
|Basic earnings per share||$||0.0103||$||0.0012||$||0.0105||$||(0.0074||)||$||0.0024||$||0.0094||$||(0.0025||)||$||(0.0007||)|
|Fully diluted earnings per share||$||0.0103||$||0.0012||$||0.0105||$||(0.0074||)||$||0.0023||$||0.0087||$||(0.0025||)||$||(0.0007||)|
|Weighted average number of common shares|
|XSellerator installations – in the period||15||27||3||8||6||9||6||10|
|XSellerator active dealership rooftops||250||235||250||235||249||228||245||221|
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 Partner 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 September 30, 2011. 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.
President and CEO
403-777-0036 ext 104