CALGARY, ALBERTA–(Marketwired – Nov. 27, 2013) – Quorum Information Technologies Inc. (“Quorum” or the “Company”) (TSX VENTURE:QIS) today released its Third Quarter (Q3) Fiscal Year (FY) 2013 results. Quorum delivers its dealership management system (DMS), XSellerator™, and related services to automotive dealerships throughout North America. The Company is a strategic partner with General Motors Corporation (GM) and an industry 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 Isuzu, Chrysler, Hyundai, Kia, Nissan, Subaru, NAPA and Bumper to Bumper franchised dealership customers.
Maury Marks, Quorum's President and CEO made the following remarks about the Company's Q3 FY2013 results:
Some of our most significant measurable sales and operational results in Q3 FY2013 are as follows:
- During the third quarter of 2013 we initiated our Make More Money (“M3”) project. We identified ten processes inside our XSellerator software that can drive revenue in our customers' operations. During our pilot process, in which we partnered with 11 of our dealership customers, we were able to generate a significant increase in monthly service and parts revenue per dealership. Our plan is to roll the M3 functionality to our customer base in Q4 FY2013 and provide the necessary process training from Q4 FY2013 to Q2 FY2014 to get more of our dealerships utilizing the M3 processes.
- We completed our Customer Satisfaction Index (“CSI”) semi-annual survey which showed an average of 87% of dealer principals as “satisfied” or very satisfied. The remaining 13% of dealer principals reported “somewhat satisfied”.
Financial Results highlights for Q3 FY2013 are as follows:
- Sales decreased by 0.6% to $1,896K in Q3 FY2013 from $1,907K in Q3 FY2012, and margin after direct costs increased to $1,084K in Q3 FY2013, as compared to $1,031K in Q3 FY2012, a 5% increase. The decrease in sales is due to:
- An increase of $110K in recurring support revenue as a result from having more active dealership rooftops at the end of Q3 FY2013 versus the end of Q3 FY2012;
- A decrease in paid integration software development revenue of $69K;
- A decrease of $68K in net new revenue which was a result of completing less installs in Q3 FY2013 as compared to Q3 FY2012; and
- An increase of $16K in transitions revenue (replacing outdated dealership servers).
- Earnings before interest, taxes, depreciation, amortization, stock-based compensation and foreign exchange (EBITDA) increased to $358K in Q3 FY2013 from $239K in Q3 FY2012. The increase in EBITDA is largely due to:
- A $54K increase in margin after direct costs in Q3 FY2013 compared to Q3 FY2012;
- A $13K decrease in salaries and benefits expense in Q3 FY2013 compared to Q3 FY2012. The decrease is due proceeds of $13K received from the Atlantic Canada Opportunities Agency (ACOA) Grant during Q3 FY2013;
- A $50K decrease in general and administrative expense due to lower US State tax expense due to lower integration revenue and to the concentrated effort of management to reduce expenses; and
- A $3K decrease in sales and marketing expense in Q3 FY2013 compared to Q3 FY2012.
- Quorum had comprehensive income of $35K in Q3 FY2013 compared to a comprehensive loss of $41K in Q3 FY2012. The improvement is due to:
- An increase in EBIDTA of $119K in Q3 FY2013 compared to Q3 FY2012. This increase is offset by increased amortization expense of $27K, decreased stock option benefits of $4K and increased interest expense of $11K in Q3 FY2013 compared to Q3 FY2012;
- Deferred income tax expense of $90K during Q3 FY2013 compared to $46K in Q3 FY2012; and
- A foreign exchange loss of $41K during Q3 FY2013 compared to $75K during Q3 FY2012.
- Quorum posted its seventeenth consecutive quarter of cash flow positive results. These results are due to a well-managed cost structure and from attaining a critical mass of dealerships that generate significant higher margin recurring support revenues.
The Company had a strong Q3 FY2013 compared to Q3 FY2012. Although sales were flat compared to Q3 FY2013, margin after direct costs was up by 5% in Q3 FY2013 compared to Q3 FY2012. This resulted in a stronger EBITDA and Comprehensive Income for Q3 FY2013 compared to Q3 FY2012.
Quorum has filed its Q3 2013 consolidated financial statements and notes thereto as at and for the period ended September 30, 2013 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, 2013 |
Nine Months Ended Sept 30, 2012 |
Q3 Ended |
Q3 Ended |
Q2 Ended |
Q2 Ended |
Q1 Ended |
Q1 Ended |
|||||||||||||||||
| Gross revenue | $ | 5,796,859 | $ | 5,580,724 | $ | 1,896,210 | $ | 1,907,406 | $ | 1,941,358 | $ | 1,831,132 | $ | 1,959,291 | $ | 1,842,186 | ||||||||
| Direct costs | 2,649,056 | 2,556,320 | 811,398 | 876,660 | 910,460 | 850,670 | 927,198 | 828,990 | ||||||||||||||||
| Margin after direct costs | 3,147,803 | 3,024,404 | 1,084,812 | 1,030,746 | 1,030,898 | 980,462 | 1,032,093 | 1,013,196 | ||||||||||||||||
| Earnings before interest, taxes, depreciation and amortization (EBITDA) |
750,151 |
591,133 |
358,090 |
238,591 |
234,503 |
226,086 |
157,558 |
126,456 |
||||||||||||||||
| Income (loss) before deferred income tax expense |
168,074 |
108,114 |
165,981 |
80,523 |
39,756 |
65,027 |
(37,663 |
) |
(37,436 |
) | ||||||||||||||
| Net income (loss) | (56,581 | ) | (98,458 | ) | 76,037 | 34,107 | (84,452 | ) | (80,311 | ) | (48,166 | ) | (52,254 | ) | ||||||||||
| Comprehensive income (loss) | 390 | (175,007 | ) | 34,972 | (40,790 | ) | (22,167 | ) | (41,613 | ) | (12,415 | ) | (92,604 | ) | ||||||||||
| Basic income (loss) per share | $ | (0.0014 | ) | $ | (0.0025 | ) | $ | 0.0019 | $ | 0.0009 | $ | (0.0021 | ) | $ | (0.0020 | ) | $ | (0.0012 | ) | $ | (0.0013 | ) | ||
| Fully diluted income (loss) per share | $ | (0.0014 | ) | $ | (0.0025 | ) | $ | 0.0019 | $ 0.0009 | $ | (0.0021 | ) | $ (0.0020 | ) | $ | (0.0012 | ) | $ (0.0013 | ) | |||||
| Weighted average number of common shares | ||||||||||||||||||||||||
| Basic | 39,298,438 | 39,298,438 | 39,298,438 | 39,298,438 | 39,298,438 | 39,298,438 | 39,298,438 | 39,298,438 | ||||||||||||||||
| Diluted | 39,298,438 | 39,298,438 | 39,298,438 | 39,298,438 | 39,298,438 | 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, Isuzu, 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' Canada IDMS program, Quorum is the second 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, 2013. 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
