CALGARY, ALBERTA–(Marketwired – May 24, 2016) – Quorum Information Technologies Inc. (TSX VENTURE:QIS) (“Quorum” or the “Company”) today released its First Quarter (Q1) Fiscal Year (FY) 2016 results. Quorum delivers its dealership management system (DMS), XSellerator™, and related services to General Motors, Chrysler, Ford, Toyota, Hyundai, Kia, Nissan, Subaru, NAPA and Bumper to Bumper franchised dealership customers as well as some non-automotive dealerships throughout North America.
Maury Marks, Quorum's President and CEO made the following remarks about the Company's Q1 FY2016 operational and financial results:
Operational results highlights for Q1 FY2016 are as follows:
- In January FY2016 Quorum completed the successful software conversion for its first Ford dealership. This strategic client for Quorum represents an entry into a new market segment.
- Quorum continues to enhance three important areas of our software and we track key dealership utilization metrics related to these areas in a Dealership Success Scorecard:
- 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.
- Make More Money (“M3”) is an 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.
- Sales CRM – Quorum continues to make significant enhancements to sales Customer Relationship Management (CRM) features within XSellerator. Additional usage statistics will be included to the Dealership Success Scorecard later in 2016.
Dealership Success Scorecard1
|Communicator – Dealerships utilizing Communicator: 189|
|Messages in Q1 FY2016: 911,080|
|Year over year message growth: 47%|
|M3 (VIP only) – Dealerships utilizing VIP: 90|
|Total Q1 FY2016 incremental Customer Pay revenue: $13,703,401|
|Year over year revenue growth: 46%|
|Sales CRM – Dealerships trained: 33|
|Total # of dealerships that have moved away from 3rd party CRM systems: 10|
- Key customer metrics are as follows:
- Customer Satisfaction Index (“CSI”) semi-annual survey in Q1 FY2016 showed an average of 100% of dealer principals as “satisfied” or “very satisfied” and an average of 88% of end users as “satisfied” or “very satisfied” overall. An additional 11% of end users reported “somewhat satisfied”. Our survey in Q1 FY2015 reported 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.
- 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 FY2016 are as follows:
- Sales increased by 21% to $2,947K in Q1 FY2016 from $2,430K in Q1 FY2015. The increase in sales is due to:
- An increase of $225K in recurring support revenue as a result from having more active dealership rooftops at the end of Q1 FY2016 compared to the end of Q1 FY2015;
- An increase of $84K in training revenue;
- An increase of $199K in new implementations revenue, which was a result of completing more installations in Q1 FY2016 as compared to Q1 FY2015; and
- An increase of $8K in transitions revenue (server and operating system upgrades) from converting our customers to the new Microsoft Windows and SQL Server 2012 Products.
- During Q1 FY2016, margin after direct costs increased by $106K to $1,514K or 51% compared to $1,408K or 58% for Q1 FY2015. The 7% decrease in gross margin percentage is due to:
- The cost of new hires that were added during Q1 FY2016 in anticipation of future growth;
- New implementations revenue and transitions revenue increased in Q1 FY2016 and these revenue streams have a higher cost of goods sold and lower margin compared to recurring support and support plus revenue;
- Higher foreign exchange rate which increased the cost of the Microsoft licenses that are purchased in US dollars for existing customers, transitions and new installations.
- Earnings before interest, taxes, depreciation, amortization, foreign exchange gains and losses and stock-based compensation (EBITDA) increased by $135K to $510K in Q1 FY2016 from $375K in Q1 FY2015.
- Income before deferred income tax expense increased by $108K to $251K in Q1 FY2016 compared to $143K in Q1 FY2015.
- Quorum had comprehensive income of $8K in Q1 FY2016 compared to $214K in Q1 FY2015. The reduction is due to a large increase in the non-cash foreign exchange expense of $340K ($121K loss in Q1 FY2016 compared to a $219K gain in Q1 FY2015), offset by a decrease in the non-cash deferred income tax expense of $26K and the above-mentioned $106K increase in margin after direct costs.
- Net working capital at March 31, 2016 was $5,144,092 with a current ratio of 5.01, compared to $5,128,841 at December 31, 2015, with a current ratio of 5.05, an increase of $15,251.
1 The numbers and dollar figures included in the Dealership Success Scorecard are based on dealership results.
The Corporation had a very strong growth quarter with sales rising by 21%. Sales growth came from more net new installs, increased recurring support revenues and higher training revenue. Quorum has seen ten consecutive quarters of significant revenue growth (over the prior year quarters) and we continue to increase our staffing levels in anticipation of future growth. Our strategy to focus on product innovations, improving product utilization and superior levels of customer service has increased the market demand for our product and services.
Quorum has filed its Q1 2016 consolidated financial statements and notes thereto as at and for the period ended March 31, 2016 and accompanying management's discussion and analysis in accordance with National Instrument 51-102 – Continuous Disclosure Obligations adopted by the Canadian securities regulatory authorities. Additional information about Quorum will be available on Quorum's SEDAR profile at www.sedar.com and Quorum's website at www.QuorumDMS.com.
|Three Months Ended
March 31, 2016
|Three Months Ended
March 31, 2015
|Margin after direct costs||1,514,123||1,408,237|
|Earnings before interest, taxes, depreciation and amortization (EBITDA)||509,794||374,960|
|Income before deferred income tax expense||251,093||143,101|
|Net income (loss)||128,695||(5,648||)|
|Basic income (loss) per share||$||0.0025||$||(0.0001||)|
|Fully diluted income (loss) per share||$||0.0025||$||(0.0001||)|
|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, Ford, Toyota, 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, 2016. 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.
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