CALGARY, ALBERTA–(Marketwired – Nov. 17, 2014) – Quorum Information Technologies Inc. (“Quorum” or the “Company”) (TSX VENTURE:QIS) today released its Third Quarter (Q3) 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 Q3 FY2014 results. Some of our most significant measurable sales and operational results in Q3 FY2014 are as follows:
- During the quarter we continued to work with three different new manufacturers (“OEM”). We took our first pilot dealership live after eight months of development and testing with one of these the manufacturers. Our development with another manufacturer is underway and we are finalizing the contracts with a third OEM.
- 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 Q3 FY2014 we worked on V4.79. In this version we continue to:
- Refine our ten Make More Money (“M3”) initiatives that help drive additional incremental revenue into our dealership customers' operations. One key M3 initiative is our Vehicle Inspection Process (“VIP”) that produced a total of $1,817,630 in customer pay service and parts revenue in September for the 30 dealerships that are trained on the process.
- Enhance Communicator, our two-way text, email and instant messaging solution that is embedded in XSellerator. Our dealership customers sent 327,133 messages in Q3 FY2014 compared to 286,975 in Q2 FY2014 through Communicator.
- Improve our Sales Planner window for sales staff and the Showroom functionality in XSellerator. We had two early, key successes when two key customers moved from another provider`s Showroom/CRM software back to our integrated Showroom solution.
Financial Results highlights for Q3 FY2014 are as follows:
- Sales increased by 18% to $2,242K in Q3 FY2014 from $1,896K in Q3 FY2013. The increase in sales is due to:
- An increase of $52K in recurring support revenue as a result of having more active dealership rooftops at the end of Q3 FY2014 as compared to the end of Q3 FY2013;
- A decrease in integration revenue of $11K;
- An increase of $125K in net new revenue which was a result of completing more installations in Q3 FY2014 as compared to Q3 FY2013; and
- An increase of $181K in transitions (server and operating system upgrades) revenue as compared to Q3 FY2013.
- Margin after direct costs increased by $217K to $1,302K in Q3 FY2014, as compared to $1,085K in Q3 FY2013, a 20% increase. The 20% increase is similar to our 18% increase in sales.
- Earnings before interest, taxes, depreciation, amortization, stock-based compensation and foreign exchange (EBITDA) increased by $88K to $446K in Q3 FY2014 from $358K in Q3 FY2013. The $217K increase margin after direct cost was partially offset by salaries and benefits which increased from $548K in Q3 FY2014 from $449K in Q3 FY2013.
- Income before deferred income tax expense decreased by $42K to $124K in Q3 FY2014 from $166K in Q3 FY2013 largely due to the a non-cash $109K stock based compensation expense in Q3 FY2014.
- Quorum had comprehensive income of $262K in Q3 FY2014 compared to comprehensive income of $35K in Q3 FY2013. The increase is due to a deferred income tax recovery of $61K and a foreign exchange gain of $77K, both of which are non-cash expenses.
- Working capital increased to $2,001K at September 30, 2014 compared with $1,743K at June 30, 2014 and $1,454K at December 31, 2013. Cash increased to $1,516K at September 30, 2014, compared with $1,251K at June 30, 2014 and $812K at December 31, 2013.
Q3 FY2014 was a strong quarter with revenues up 18% to $2,242K, a 25% increase in EBITDA to $446K, and cash balance in excess of $1.5 million and working capital in excess of $2.0 million. In Q3 FY2014 Quorum generated a 58% gross margin percentage and EBITDA as a percentage of revenue was 20%. Additionally both of Quorum's Q3 FY2014 working capital and cash increased by $258K and $265K respectively over Q2 FY2014.
Quorum has filed its Q3 2014 consolidated financial statements and notes thereto as at and for the period ended September 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
| Nine Months Ended Sept 30, 2014 |
Nine Months Ended Sept 30, 2013 |
Q3 Ended Sept 30, 2014 |
Q3 Ended Sept 30, 2013 |
Q2 Ended June 30, 2014 |
Q2 Ended June 30, 2013 |
Q1 Ended March 31, 2014 |
Q1 Ended March 31, 2013 |
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| Gross revenue | $ | 6,840,379 | $ | 5,796,859 | $ | 2,242,606 | $ | 1,896,210 | $ | 2,395,446 | $ | 1,941,358 | $ | 2,202,327 | $ | 1,959,291 | ||||||
| Direct costs | 2,819,458 | 2,649,056 | 940,252 | 811,398 | 964,610 | 910,460 | 914,596 | 927,198 | ||||||||||||||
| Margin after direct costs | 4,020,921 | 3,147,803 | 1,302,354 | 1,084,812 | 1,430,836 | 1,030,898 | 1,287,731 | 1,032,093 | ||||||||||||||
| Earnings before interest, taxes, depreciation and amortization (EBITDA) |
1,254,914 |
750,151 |
446,227 |
358,090 |
430,570 |
234,503 |
378,117 |
157,558 |
||||||||||||||
| Income (loss) before deferred income tax expense | 506,098 |
168,074 |
123,911 |
165,981 |
213,723 |
39,756 |
168,464 | (37,663 | ) | |||||||||||||
| Net income (loss) | 270,785 | (56,581 | ) | 185,086 | 76,037 | 3,478 | (84,452 | ) | 82,221 | (48,166 | ) | |||||||||||
| Comprehensive income (loss) | 338,577 | 390 | 262,494 | 34,972 | (60,496 | ) | (22,167 | ) | 136,579 | (12,415 | ) | |||||||||||
| Basic income (loss) per share | $ | 0.0067 | $ | (0.0014 | ) | $ | 0.0046 | $ | 0.0019 | $ | 0.0001 | $ | (0.0021 | ) | $ | 0.0021 | $ | (0.0012 | ) | |||
| Fully diluted income (loss) per share | $ | 0.0066 | $ (0.0014 | ) | $ | 0.0045 | $ 0.0019 | $ | 0.0001 | $ (0.0021 | ) | $ | 0.0021 | $ (0.0012 | ) | |||||||
| Weighted average number of common shares | ||||||||||||||||||||||
| Basic | 40,496,946 | 39,298,438 | 40,621,485 | 39,298,438 | 40,137,138 | 39,298,438 | 39,298,438 | 39,298,438 | ||||||||||||||
| Diluted | 40,852,605 | 39,298,438 | 40,977,144 | 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 September 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
