CALGARY, ALBERTA–(Marketwired – May 25, 2015) – Quorum Information Technologies Inc. (“Quorum” or the “Company”) (TSX VENTURE:QIS) today released its First Quarter (Q1) Fiscal Year (FY) 2015 results. Quorum delivers its dealership management system (DMS), XSELLERATOR™, and related services to automotive dealerships throughout North America. The Company is both a Dealer Technology Assistance Program (DTAP) 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. Quorum also supplies its product to Chrysler, Hyundai, Kia, Nissan, Subaru, NAPA and Bumper to Bumper franchised dealership customers as well as other franchised, independent and some non-automotive dealerships.
Maury Marks, Quorum's President and CEO made the following remarks about the Company's Q1 FY2015 operational and financial results:
Operational results highlights for Q1 FY2015 are as follows:
|•||Quorum continues to enhance two important areas of our software and we now track key dealership utilization metrics related to these areas in a Dealership Success Scorecard:|
|o||Communicator features text, email and instant message functionality that is integrated into the XSELLERATOR workflow. Aggregate data on Communicator's recent usage is shown below.|
|o||Make More Money (“M3”) initiative which focuses on ten XSELLERATOR processes that drive incremental revenue into our dealership customers' operations. Aggregate data from the Vehicle Inspection Process (“VIP”), which is just one of the ten M3 processes, is shown below.|
Dealership Success Scorecard1
|Communicator – Dealerships trained: 148||% of our customers: 51%|
|Messages in April 2015: 256,782 (11,672 per day)||Year over year message growth: 366%|
|M3 (VIP only) – Dealerships trained: 47||% of our customers: 16%|
|Total April 2015 incremental CP revenue: $3,190,262||Year over year revenue growth: 226%|
|April 2015 average incremental customer pay (CP) revenue: $67,878 per dealership|
|•||Quorum continues to make significant enhancements to sales Customer Relationship Management (CRM) features within XSELLERATOR. The new enhanced sales CRM process is currently in pilot with eight dealerships and associated usage statistics will be added to the Dealership Success Scorecard later in 2015.|
|•||Key customer metrics are as follows:|
|o||Customer Satisfaction Index (“CSI”) semi-annual survey in Q1 FY2015 showed an average of 81% of dealer principals as “satisfied” or “very satisfied” and an average of 94% of end users as “satisfied” or “very satisfied” overall. An additional 19% of dealer principals and 6% of end users reported “somewhat satisfied”. Our survey in Q1 FY2014 reported “satisfied” or “very satisfied” comparative numbers of 89% for dealer principals and 81% for end users.|
|o||Our monthly Support Center CSI survey continues to report an average of approximately 95% “very satisfied” with the service received from our support team.|
Financial Results highlights for Q1 FY2015 are as follows:
|•||Sales increased by 10% to $2,430K in Q1 FY2015 from $2,202K in Q1 FY2014. The increase in sales is largely due to:|
|o||An increase of $129K in recurring support revenue as a result from having more active dealership rooftops at the end of Q1 FY2015 compared to the end of Q1 FY2014;|
|o||An increase of $93K in support plus revenue, which is largely due to higher training revenues;|
|o||An increase of $141K in net new revenue which was a result of completing more installations in Q1 FY2015 as compared to Q1 FY2014; and|
|o||A decrease of $127K in transitions revenue (server and operating system upgrades) from converting our customers to the new Microsoft Windows and SQL Server 2012 Products.|
|•||Margin after direct costs increased by $120K to $1,408K in Q1 FY2015, as compared to $1,288K in Q1 FY2014, a 9% increase.|
|•||Earnings before interest, taxes, depreciation, amortization, foreign exchange gains and losses and stock-based compensation (EBITDA) decreased by $3K to $375K in Q1 FY2015 from $378K in Q1 FY2014. Increased margin after direct costs was offset by:|
|o||larger salaries and benefits expense due to increased staffing levels; and|
|o||larger sales and marketing expense due to the expansion of Quorum's booth at the National Automobile Dealers Association (NADA) convention.|
|•||Income before deferred income tax expense decreased by $25K to $143K in Q1 FY2015 compared to $168K in Q1 FY2014.|
|•||Quorum had comprehensive income of $214K in Q1 FY2015 compared to $137K in Q1 FY2014. The improvement is largely due to an increase in foreign exchange gain offset by an increase in deferred taxes.|
|•||Net working capital at March 31, 2015 was $1,932,469 with a current ratio of 2.55, compared to $1,922,518 at December 31, 2014, with a current ratio of 2.69.|
The Corporation had another strong growth quarter with sales rising by 10%. Sales growth came from more net new installs, increased recurring support revenues and higher support plus training revenue. Quorum has seen six consecutive quarters of significant revenue growth (over the prior year quarters) and we continue to increase our staffing levels in anticipation of future growth. Our strategy to focus on product innovations, improving product utilization and superior levels of customer service has increased the market demand for our product and services.
Quorum has filed its Q1 2015 consolidated financial statements and notes thereto as at and for the period ended March 31, 2015 and accompanying management's discussion and analysis in accordance with National Instrument 51-102 – Continuous Disclosure Obligations adopted by the Canadian securities regulatory authorities. Additional information about Quorum will be available on Quorum's SEDAR profile at www.sedar.com and Quorum's website at www.QuorumDMS.com.
|Three Months Ended March 31, 2015||Three Months Ended March 31, 2014|
|Margin after direct costs||1,408,237||1,287,731|
|Earnings before interest, taxes, depreciation and amortization (EBITDA)||374,960||378,117|
|Income before deferred income tax expense||143,101||168,464|
|Net income (loss)||(5,648||)||82,221|
|Basic income (loss) per share||$||(0.0001||)||$||0.0021|
|Fully diluted income (loss) per share||$||(0.0001||)||$||0.0021|
|Weighted average number of common shares|
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.
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 March 31, 2015. 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.
1 The numbers and dollar figures included in the Dealership Success Scorecard are based on dealerships results.
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