Quorum Information Technologies Inc.
TSX VENTURE : QIS

Quorum Information Technologies Inc.

May 16, 2013 15:50 ET

Quorum Releases Q1 Fiscal Year 2013 Results

Quorum produces solid Operational and Financial Results

CALGARY, ALBERTA--(Marketwired - May 16, 2013) - Quorum Information Technologies Inc. ("Quorum" or the "Company") (TSX VENTURE:QIS) today released its First Quarter (Q1) 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 both an Integrated Dealership Management System (IDMS) 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 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 Q1 FY2013 results:

Some of our most significant measurable sales and operational results in Q1 FY2013 are as follows:

  • Customer Base - Quorum reached 271 active dealership rooftops at the end of Q1 FY2013.
  • Customers Satisfaction Index (CSI) - our monthly Support Center CSI survey reported an average of over 95% "very satisfied" with the service received from our support team.
  • Product - during Q1 FY2013 we continued work on V4.7.6 which is the largest release that the company has ever developed. This release has approximately 250 different changes and enhancements designed to help dealership productivity and profitability. We plan to release this version in Q2 FY2013.
  • Employees - during the quarter, the Company launched Q-School which is an internal training portal that provides web based courses focused on improving staff efficiency and awareness on Quorum initiatives.

Financial Results highlights for Q1 FY2013 are as follows:

  • Sales increased by 6% to $1,959K in Q1 FY2013 from $1,842K in Q1 FY2012. The increase in sales is due to:
    • An increase of $98K in recurring support revenue as a result from having 271 active dealership rooftops at the end of Q1 FY2013 versus 259 at the end of Q1 FY2012.
    • A decrease of $38K in net new revenue which was a result of completing three installations in Q1 FY2013 as compared to six dealership installations in Q1 FY2012.
    • An increase of $57K in transitions revenue.
  • Earnings before interest, taxes, depreciation and amortization (EBITDA) increased to $158K in Q1 FY2013 from $126K in Q1 FY2012. The increase in EBITDA is largely due to:
    • A $19K increase in margin after direct costs in Q1 FY2013 compared to Q1 FY2012.
    • A $22K decrease in sales and marketing expense in Q1 FY2013 compared to Q1 FY2012. The decrease is due to the cost incurred of hosting a booth at the "by invitation only" BMW conference during Q1 FY2012.
  • Quorum had a Comprehensive loss of $12K in Q1 FY2013 compared to a Comprehensive loss of $93K in Q1 FY2012. The improvement is due to:
    • An increase in EBIDTA of $32K from Q1 FY2013 compared to Q1 FY2012. This increase is largely offset by increase in amortization expense of $26K from Q1 FY2013 compared to Q1 FY2012.
    • A foreign exchange gain of $36K in Q1 FY2013 compared to a foreign exchange loss of $40K in Q1 FY2012.
  • Quorum posted its fifteenth 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 Q1 FY2013 compared to Q1 FY2012. The highlights were a 6% increase in revenue, a $32K increase in EBITDA and a Comprehensive loss of $12K (which was a significant reduction from the $93K loss in Q1 FY2012). It is important to note that the first quarter of every year is a high cost quarter largely because of the added expenses associated with Quorum's booth at the North America Auto Dealership Association (NADA) trade show, which is the largest trade show in North America, and annual manufacturer's costs that are paid in Q1 for part files, warranty information or integration fees.

Quorum has filed its Q1 2013 consolidated financial statements and notes thereto as at and for the period ended March 31, 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

Three Months Ended March 31, 2013 Three Months Ended March 31, 2012
Gross revenue $ 1,959,291 $ 1,842,186
Direct costs 927,198 828,990
Margin after direct costs 1,032,093 1,013,196
Earnings before interest, taxes, depreciation and amortization (EBITDA) 157,558 126,456
Loss before deferred income tax expense (37,663 ) (37,436 )
Net loss (48,166 ) (52,254 )
Comprehensive loss (12,415 ) (92,604 )
Basic loss per share (0.0012 ) (0.0013 )
Fully diluted loss per share $ (0.0012 ) $ (0.0013 )
Weighted average number of common shares
Basic 39,298,438 39,298,438
Diluted 39,298,438 39,298,438
XSellerator installations - in the period 3 6
XSellerator active dealership rooftops 271 259

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' 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 March 31, 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