CALGARY, ALBERTA–(Marketwired – Aug. 15, 2013) – Quorum Information Technologies Inc. (TSX VENTURE:QIS) (“Quorum” or the “Company”) today released its Second Quarter (Q2) Fiscal Year (FY) 2013 results. Quorum delivers its dealership management system (DMS), XSellerator™, and related services to automotive dealerships throughout North America. The Company is a 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 industry partners. Quorum also supplies its product to Isuzu, Chrysler, Hyundai, Kia, Nissan, Subaru, NAPA and Bumper to Bumper franchised dealership customers.
Maury Marks, Quorum's President and CEO made the following remarks about the Company's Q2 FY2013 results:
Some of our most significant measurable sales and operational results in Q2 FY2013 are as follows:
- Customer Base – Quorum reached 273 active dealership rooftops at the end of Q2 FY2013.
- Customers Satisfaction Index (CSI) – our monthly Support Center CSI survey reported an average of over 95% “very satisfied” with the service received from our support team.
- Quorum's first western Customer Conference in Q2 FY2013 was double the attendance of our eastern Customer Conference hosted in Q4 FY2012.
- Product – during Q2 FY2013 we general released V4.7.6 which is the largest new version of XSellerator that the company has ever developed. This release has approximately 250 changes and enhancements designed to help dealership productivity and profitability.
- Manufacturers – Quorum entered into an agreement with Nissan Canada to participate in Nissan's new certification program. We also entered into an agreement with General Motors US for their new Dealer Technical Assistance Program (DTAP).
Financial Results highlights for Q2 FY2013 are as follows:
- Sales increased by 6% to $1,941K in Q2 FY2013 from $1,831K in Q2 FY2012 due to:
- An increase of $124K in recurring support revenue as a result from having 273 active dealership rooftops at the end of Q2 FY2013 versus 263 at the end of Q2 FY2012;
- A decrease of $54K in net new revenue which was a result of completing six small installations in Q2 FY2013 as compared to six larger dealership installations in Q2 FY2012;
- A decrease in integration revenue of $21K; and
- An increase of $61K in transitions revenue (dealership server and platform upgrades).
- Earnings before interest, taxes, depreciation, amortization, stock-based compensation and foreign exchange (EBITDA) increased to $234K in Q2 FY2013 from $226K in Q2 FY2012 due to:
- A $50K increase in margin after direct costs in Q2 FY2013 compared to Q2 FY2012;
- A $24K decrease in salaries and benefits expense in Q2 FY2013 compared to Q2 FY2012. The decrease is largely due to proceeds of $13K received from the Atlantic Canada Opportunities Agency (ACOA) grant during Q2 FY2013;
- A $32K increase in general and administrative expense due to the renegotiating of a contract with Central Consulting Services Inc. during Q2 FY2012; and
- A $34K increase in sales and marketing expense due to the added costs of hosting our first western Customer Conference and our attendance at the National Independent Automobile Dealers Association (NIADA) conference during Q2 FY2013.
- Quorum had a Comprehensive loss of $22K in Q2 FY2013 compared to a Comprehensive loss of $42K in Q2 FY2012. The improvement is due to:
- An increase in EBIDTA of $8K in Q2 FY2013 compared to Q2 FY2012. This increase is offset by increased amortization expense of $27K, decreased stock option benefits of $5K and increased interest expense of $11K in Q2 FY2013 compared to Q2 FY2012.
- Deferred income tax expense of $124K during Q2 FY2013 compared to $145K in Q2 FY2012.
- A foreign exchange gain of $62K during Q2 FY2013 compared to a $39K during Q2 FY2012.
- Quorum posted its sixteenth 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.
The Company had a strong Q2 FY2013 compared to Q2 FY2012. The highlights were a 6% increase in revenue and an $8K increase in EBITDA.
Quorum has filed its Q2 2013 consolidated financial statements and notes thereto as at and for the period ended June 30, 2013 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.
| Financial Highlights | |||||||||||||||||||
| Six Months Ended June 30, 2013 | Six Months Ended June 30, 2012 |
Q2 Ended June 30, 2013 |
Q2 Ended June 30, 2012 |
Q1 Ended March 31, 2013 |
Q1 Ended March 31, 2012 |
||||||||||||||
| Gross revenue | $ | 3,900,649 | $ | 3,673,318 | $ | 1,941,358 | $ | 1,831,132 | $ | 1,959,291 | $ | 1,842,186 | |||||||
| Direct costs | 1,837,658 | 1,679,660 | 910,460 | 850,670 | 927,198 | 828,990 | |||||||||||||
| Margin after direct costs | 2,062,991 | 1,993,658 | 1,030,898 | 980,462 | 1,032,093 | 1,013,196 | |||||||||||||
| Earnings before interest, taxes, depreciation and amortization (EBITDA) | 392,061 | 352,542 | 234,503 | 226,086 | 157,558 | 126,456 | |||||||||||||
| Income (loss) before deferred income tax expense | 2,093 | 27,591 | 39,756 | 65,027 | (37,663 | ) | (37,436 | ) | |||||||||||
| Net loss | (132,618 | ) | (132,565 | ) | (84,452 | ) | (80,311 | ) | (48,166 | ) | (52,254 | ) | |||||||
| Comprehensive loss | (34,582 | ) | (134,217 | ) | (22,167 | ) | (41,613 | ) | (12,415 | ) | (92,604 | ) | |||||||
| Basic loss per share | $ | (0.0034 | ) | $ | (0.0034 | ) | $ | (0.0021 | ) | $ | (0.0020 | ) | $ | (0.0012 | ) | $ | (0.0013 | ) | |
| Fully diluted loss per share | $ | (0.0034 | ) | $ | (0.0034 | ) | $ | (0.0021 | ) | $ | (0.0020 | ) | $ | (0.0012 | ) | $ | (0.0013 | ) | |
| Weighted average number of common shares | |||||||||||||||||||
| Basic | 39,298,438 | 39,298,438 | 39,298,438 | 39,298,438 | 39,298,438 | 39,298,438 | |||||||||||||
| Diluted | 39,298,438 | 39,298,438 | 39,298,438 | 39,298,438 | 39,298,438 | 39,298,438 | |||||||||||||
| XSellerator installations – in the period | 9 | 12 | 6 | 6 | 3 | 6 | |||||||||||||
| XSellerator active dealership rooftops | 273 | 263 | 273 | 263 | 271 | 259 | |||||||||||||
About Quorum
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' Canada 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.
Forward-Looking Information
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 period ended June 30, 2013. 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.
Contact Information:
Maury Marks
403-777-0036 ext 104
MarksM@QuorumDMS.com
www.QuorumDMS.com
