CALGARY, ALBERTA–(Marketwire – Nov. 25, 2009) – Quorum Information Technologies Inc. (“Quorum” or the “Corporation”) (TSX VENTURE:QIS) today released Third Quarter (Q3) Fiscal Year (FY) 2009 results. Quorum provides services to General Motors (GM), Chrysler and Hyundai dealerships in North America. The Corporation is an Integrated Dealership Management System (IDMS) strategic partner with GM and a strategic partner with Microsoft. Quorum's XSELLERATORTM product is broadly promoted to GM dealerships by these prominent industry partners.
Maury Marks, Quorum's President and CEO made the following remarks about the Company's Q3 FY2009 results:
We are starting to see market conditions rebound and although GM and Chrysler dealerships are approaching the future with caution, there is some optimism and a desire to return to “business as usual”. We've experienced recent key events that indicate a return to “business as usual.” In Q3 FY2009, our qualified leads pipeline grew by 35% and grew by a further 20% in the first half of Q4 FY2009. Starting at the end of Q3 we began to sign a greater volume of new customers to contracts, including a continuous period where we signed a new customer a week for six weeks. Dealerships that lost their GM franchises are “changing over” their business to new manufacturer franchises or to aftermarket operations. The consequence for Quorum is that we will add three new markets by the end of this year in partnership with our existing, change-over customers. Additionally, Quorum deployed the GM Global Warranty integration point for Canada and four new integration projects were initiated by GM in Q3 FY2009.
In Q3 we had strong improvements in the following two key numbers:
– Gross Margin percent improved to 66% in Q3 FY2009. Our “cost of products and services sold” represents support and implementation salaries and other direct costs related to installations and migrations. As our support revenue grows, the high margin support revenue drives our gross margin up.
– EBITDA (earnings before interest, taxes and amortization) increased to $529.552 for Q3 FY2009 compared to Q3 FY2008 of $262,718.
A key significant result for Q3 FY2009 was Quorum's cash balance increase of $64,697 and related working capital increase of $210,810 over Q2 FY2009. These increases were made while we paid off $17,282 in financing. At the end of Q3 FY2009, Quorum had a cash balance of $923,564 and a positive working capital position of $1,417,884. In Q4 FY2009, we received $203,303 of Provincial Government Scientific Research and Experimental Development (SRED) cash payments and an additional $35,595 pursuant to our Atlantic Canada Opportunities Agency (ACOA), 0%, non-secured government loan.
Despite dealing with the aftermath of the global recession and GM's and Chrysler's corporate bankruptcies, the Company had a very strong quarter. Our diligence towards reducing our cost structure and finding alternate revenue sources has allowed Quorum to generate our strongest quarterly working capital growth in the history of the Company.
Financial Highlights (dollar figures in '000)
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Nine Nine
Months Months Q3 Q3
Ended Ended Ended Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2009 2008 2009 2008
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Gross revenue $ 5,386 $ 6,271 $ 1,853 $ 2,481
Gross profit 3,226 2,422 1,216 1,070
Expenses 2,071 2,723 608 877
Operating income (loss) before
interest, taxes, depreciation
and amortization (EBITDA) 1,149 (9) 530 263
Net income (loss) 201 (702) 9 72
Cash flow from operating
activities 673 (54) 332 436
Quarterly cash expenditures $ 5,881 $ 6,981 $ 1,849 $ 2,224
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KEY MANAGEMENT METRICS
XSELLERATOR installations - in
the period 6 22 3 10
XSELLERATOR total rooftops 221 223 221 223
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Q2 Q2 Q1 Q1
Ended Ended Ended Ended
June 30, June 30, March 31, March 31,
2009 2008 2009 2008
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Gross revenue $ 1,636 $ 2,117 $ 1,896 $ 1,673
Gross profit 903 847 1,107 505
Expenses 691 901 772 945
Operating income (loss) before
interest, taxes, depreciation
and amortization (EBITDA) 250 60 369 (331)
Net income (loss) 3 (252) 189 (522)
Cash flow from operating
activities 53 (264) 289 (226)
Quarterly cash expenditures $ 2,072 $ 2,422 $ 1,960 $ 2,336
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KEY MANAGEMENT METRICS
XSELLERATOR installations - in
the period 1 10 2 2
XSELLERATOR total rooftops 224 213 225 203
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About Quorum
Quorum is a North American company focused on developing, marketing, implementing and supporting its XSELLERATORTM product for the automotive vertical. XSELLERATOR is a dealership and customer management software product which automates, integrates and streamlines every process across departments in a dealership. One of the select North American suppliers of General Motors' IDMS, Quorum is the third largest DMS provider for GM's Canadian dealerships with over 20% of the market. Quorum is a Microsoft Gold Certified Partner and Field-Level Managed ISV in both Canada and the United States. Quorum Information Technologies is traded on the Toronto Venture Exchange (TSX-V) under the symbol QIS. For additional information please go to www.QuorumDMS.com. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
Quorum Information Technologies Inc.
Jeff Sharpe
(403) 777-0036 ext 120
SharpeJ@QuorumDMS.com
www.QuorumDMS.com
