CALGARY, ALBERTA–(Marketwired – Aug. 18, 2014) – Quorum Information Technologies Inc. (“Quorum” or the “Company”) (TSX VENTURE:QIS) today released its Second Quarter (Q2) Fiscal Year (FY) 2014 results. Quorum delivers its dealership management system (DMS), XSellerator™, and related services to automotive dealerships throughout North America. Quorum is a leader in technology for automotive dealerships focused on providing innovation that helps dealerships increase their customer satisfaction and revenue. The Company is driven to provide exceptional customer support and assist dealerships to capitalize on their technology investment by maximizing utilization of the Quorum DMS, XSellerator™ to enhance their business. Quorum supplies its product to GM, Chrysler, Hyundai, Kia, Nissan, Subaru, NAPA and Bumper to Bumper franchised dealership customers as well as independent and other non-automotive dealerships.
Maury Marks, Quorum's President and CEO made the following remarks about the Company's Q2 FY2014 results. Some of our most significant measurable operational results in Q2 FY2014 are as follows:
- During the quarter we started building integration to new manufacturers and due to the strong demand from three new manufacturer's we plan to continue to build new manufacturer integration for at least the next twelve months.
- Customer 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.
- Product – during Q2 FY2014 we general released V4.7.7. This version has new Make More Money (“M3”) initiatives that will help drive additional incremental revenue into our dealership customers' operations. The version also has a number of enhancements to Communicator, our 2- way text, email and instant messaging solution that is embedded into XSellerator. Our Dealership customers sent 286,975 messages in Q2 FY2014 compared to 183,652 in Q1 FY2014 through Communicator.
Financial Results highlights for Q2 FY2014 are as follows:
- Sales increased by 23% to $2,396K in Q2 FY2014 from $1,941K in Q2 FY2013. The increase in sales is due to:
- An increase of $111K in recurring support revenue as a result of having more active dealership rooftops at the end of Q2 FY2014 as compared to the end of Q2 FY2013;
- A decrease in integration revenue of $26K;
- An increase of $81K in net new revenue which was a result of completing more installations in Q2 FY2014 as compared to Q2 FY2013; and
- An increase of $288K in transitions (hardware and software platform upgrades) revenue as compared to Q2 FY2013.
- Margin after direct costs increased to $1,431K in Q2 FY2014, as compared to $1,031K in Q2 FY2013, a 39% increase. The 39% increase was larger than our 23% sales increase because a higher percentage of our revenue comes from higher margin recurring support revenue and due to some Corporate initiatives focused on continually reducing our directs costs.
- Earnings before interest, taxes, depreciation, amortization, stock-based compensation and foreign exchange (EBITDA) increased by $197K to $431K in Q2 FY2014 from $234K in Q2 FY2013.
- Income before deferred income tax expense increased by $174K to $214K in Q2 FY2014 from $40K in Q2 FY2013
- Quorum had a comprehensive loss of $60K in Q2 FY2014 compared to a comprehensive loss of $22K in Q2 FY2013. The loss is due to deferred income tax expense of $210K and foreign exchange loss of $64K, both of which are non-cash expenses.
- Working capital increased to $1,743K at June 30, 2014 compared with $1,526K at March 31, 2014 and $1,454K at December 31, 2013. Cash increased to $1,251K at June 30, 2014, compared with $942K at March 31, 2014 and $812K at December 31, 2013.
Q2 FY2014 was a strong quarter with revenues up 23% to $2,396K, an 84% increase in EBITDA to $431K, and an increase in income before deferred income tax expense of $174K to $214K. In Q2 FY2014 Quorum generated a 60% gross margin percentage and EBITDA as a percentage of revenue was 18%. Additionally both of Quorum's Q2 FY2014 working capital and cash increased by $217K and $309K respectively over Q1 FY2014.
Quorum has filed its Q2 2014 consolidated financial statements and notes thereto as at and for the period ended June 30, 2014 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, 2014 | Six Months Ended June 30, 2013 |
Q2 Ended June 30, 2014 |
Q2 Ended June 30, 2013 |
Q1 Ended March 31, 2014 |
Q1 Ended March 31, 2013 |
||||||||||||||||
| Gross revenue | $ | 4,597,773 | $ | 3,900,649 | $ | 2,395,446 | $ | 1,941,358 | $ | 2,202,327 | $ | 1,959,291 | |||||||||
| Direct costs | 1,879,206 | 1,837,658 | 964,610 | 910,460 | 914,596 | 927,198 | |||||||||||||||
| Margin after direct costs | 2,718,567 | 2,062,991 | 1,430,836 | 1,030,898 | 1,287,731 | 1,032,093 | |||||||||||||||
| Earnings before interest, taxes, depreciation and amortization (EBITDA) | 808,687 | 392,061 | 430,570 | 234,503 | 378,117 | 157,558 | |||||||||||||||
| Income (loss) before deferred income tax expense |
382,187 |
2,093 |
213,723 |
39,756 |
168,464 |
(37,663 |
) | ||||||||||||||
| Net income (loss) | 85,699 | (132,618 | ) | 3,478 | (84,452 | ) | 82,221 | (48,166 | ) | ||||||||||||
| Comprehensive income (loss) | 76,083 | (34,582 | ) | (60,496 | ) | (22,167 | ) | 136,579 | (12,415 | ) | |||||||||||
| Basic income (loss) per share | $ | 0.0021 | $ | (0.0034 | ) | $ | 0.0001 | $ | (0.0021 | ) | $ | 0.0021 | $ | (0.0012 | ) | ||||||
| Fully diluted income (loss) per share | $ | 0.0020 | $ | (0.0034 | ) | $ | 0.0001 | $ | (0.0021 | ) | $ | 0.0021 | $ | (0.0012 | ) | ||||||
| Weighted average number of common shares | |||||||||||||||||||||
| Basic | 40,137,138 | 39,298,438 | 40,137,138 | 39,298,438 | 39,298,438 | 39,298,438 | |||||||||||||||
| Diluted | 42,232,997 | 39,298,438 | 42,292,997 | 39,298,438 | 39,298,438 | 39,298,438 | |||||||||||||||
About Quorum
Quorum is a North American company focused on developing, marketing, implementing and supporting its XSellerator product for GM, 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' DTAP program, Quorum is also one of 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, 2014. 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
