Quorum Information Technologies Inc.

Quorum Information Technologies Inc.

May 30, 2006 12:40 ET

Quorum Information Technologies Inc. Releases First Quarter 2006 Results

CALGARY, ALBERTA--(CCNMatthews - May 30, 2006) - Quorum Information Technologies Inc. (TSX VENTURE:QIS) (Quorum) today released First Quarter (Q1) Fiscal Year (FY) 2006 results. Quorum continued to expand its customer base and added another eight dealership customers; five of these dealerships are located in Canada and three in the United States. This brings the exit total of customers for Quorum at March 31, 2006 to 151 dealerships.

During FY2005, Quorum spent considerable effort pursuing a major contract with General Motors Corporation ("GM") and these efforts were rewarded with the announcement on January 3, 2006 that Quorum had been named one of two providers, on behalf of GM, of its Integrated Dealership Management System ("IDMS") throughout North America. The award of this multi-year contract is a positive endorsement of Quorum's XSELLERATOR™ product and will provide accelerated access to more than 8,000 GM-branded dealerships throughout North America. The IDMS program is part of a long-term initiative by GM and as expected it has taken some time to transition Quorum to doing business through GM under the IDMS program. During Q1 FY2006, Quorum was focused on putting the internal systems, processes and teams in place to work effectively under IDMS with GM. Quorum's primary focus is now on selling under the IDMS program; the results will be measured through increased sales in the months ahead.

During Q1 FY2006, Quorum also released a new version of XSELLERATOR, Version 4.4, providing additional functionality for our dealership customers. The key component of Version 4.4 is the new multi-manufacturer, multi-rooftop capability ("OEM/RT"). This project gives XSELLERATOR the ability to run multiple physical locations and multi-franchise dealerships from one database. Dealers will now have the ability to share customer and vehicle data and an unprecedented ability to analyze the dealership group's activities. Consolidation of stand-alone dealerships into groups is a growing trend in the industry and Quorum's OEM/RT functionality positions Quorum better to service and sell to dealership groups.

In order to meet the planned capital requirements of Quorum's growth, Quorum completed a public offering in January 2006 by way of a non-brokered private placement, raising gross proceeds of $4,100,000. 50% of the placement was purchased by XSELLERATOR customers.

Q1 2006 Financial Highlights

- 18% increase in gross revenues from Q1 FY2005.

- 61% increase in ongoing annuity XSELLERATOR software support revenue over Q1 FY2005.

- 6% increase in customer base since December 31, 2005 from 143 to 151.

- Net loss for Q1 FY2006 increased to $942,272 versus $334,042 in Q1 FY2005.

Financial Highlights

Period ended Period ended
March 31, 2006 March 31, 2005

Gross Revenue $ 1,699,797 $ 1,438,787
Cost of products and services sold $ 1,555,286 $ 1,241,924

Gross Profit $ 144,511 $ 196,863

Loss Before Interest, Taxes,
Depreciation and Amortization (EBITDA) $ (1,220,848) $ (400,451)

Net loss $ (939,549) $ (334,042)

Basic Loss per share $ (0.033) $ (0.013)
Fully diluted Loss per share $ (0.032) $ (0.011)

Weighted average number of common
Basic 28,781,981 26,263,160
Diluted 29,445,427 29,238,717

XSELLERATOR Installations - in the
period 8 4
XSELLERATOR Installations - to date 151 120

For detailed Q1 FY2006 financial information including the unaudited Interim Consolidated Financial Statements for the period ended March 31, 2006 and 2005, and the accompanying Management's Discussion and Analysis, please go to www.Sedar.com, or www.QuorumIs.com.

About Quorum:

Quorum's focus is on developing, marketing, implementing and supporting its XSELLERATOR™ product for the automotive vertical. XSELLERATOR is a dealership and customer management software product which automates, integrates and streamlines every department in a dealership. Quorum currently has over 17% of the GM dealership market in Canada making it the third largest supplier of Dealership Management Systems for GM in Canada. Quorum was also recently named General Motors' IDMS Supplier for North America. Quorum is a Microsoft Gold Certified Partner and managed ISV.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Quorum Information Technologies Inc.
    Craig F. Nieboer
    V.P. & CFO
    (403) 777-0035 Ext. 110
    (403) 777-0039 (FAX)
    Email: nieboerc@quorumis.com
    Quorum Information Technologies Inc.
    #200, 6715 8 Street N.E.
    Calgary, AB T2E 7H7