Quorum Information Technologies Inc. (TSX VENTURE:QIS) ("Quorum" or the
"Company") today released its Second Quarter (Q2) Fiscal Year (FY) 2013 results.
Quorum delivers its dealership management system (DMS), XSellerator(TM), 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 Q2 FY2013 results:
Some of our most significant measurable sales and operational results in Q2
FY2013 are as follows:
-- Customer Base - Quorum reached 273 active dealership rooftops at the end
of Q2 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.
-- Quorum's first western Customer Conference in Q2 FY2013 was double the
attendance of our eastern Customer Conference hosted in Q4 FY2012.
-- Product - during Q2 FY2013 we general released V4.7.6 which is the
largest new version of XSellerator that the company has ever developed.
This release has approximately 250 changes and enhancements designed to
help dealership productivity and profitability.
-- Manufacturers - Quorum entered into an agreement with Nissan Canada to
participate in Nissan's new certification program. We also entered into
an agreement with General Motors US for their new Dealer Technical
Assistance Program (DTAP).
Financial Results highlights for Q2 FY2013 are as follows:
-- Sales increased by 6% to $1,941K in Q2 FY2013 from $1,831K in Q2 FY2012
due to:
-- An increase of $124K in recurring support revenue as a result from
having 273 active dealership rooftops at the end of Q2 FY2013 versus
263 at the end of Q2 FY2012;
-- A decrease of $54K in net new revenue which was a result of
completing six small installations in Q2 FY2013 as compared to six
larger dealership installations in Q2 FY2012;
-- A decrease in integration revenue of $21K; and
-- An increase of $61K in transitions revenue (dealership server and
platform upgrades).
-- Earnings before interest, taxes, depreciation, amortization, stock-based
compensation and foreign exchange (EBITDA) increased to $234K in Q2
FY2013 from $226K in Q2 FY2012 due to:
-- A $50K increase in margin after direct costs in Q2 FY2013 compared
to Q2 FY2012;
-- A $24K decrease in salaries and benefits expense in Q2 FY2013
compared to Q2 FY2012. The decrease is largely due to proceeds of
$13K received from the Atlantic Canada Opportunities Agency (ACOA)
grant during Q2 FY2013;
-- A $32K increase in general and administrative expense due to the
renegotiating of a contract with Central Consulting Services Inc.
during Q2 FY2012; and
-- A $34K increase in sales and marketing expense due to the added
costs of hosting our first western Customer Conference and our
attendance at the National Independent Automobile Dealers
Association (NIADA) conference during Q2 FY2013.
-- Quorum had a Comprehensive loss of $22K in Q2 FY2013 compared to a
Comprehensive loss of $42K in Q2 FY2012. The improvement is due to:
-- An increase in EBIDTA of $8K in Q2 FY2013 compared to Q2 FY2012.
This increase is offset by increased amortization expense of $27K,
decreased stock option benefits of $5K and increased interest
expense of $11K in Q2 FY2013 compared to Q2 FY2012.
-- Deferred income tax expense of $124K during Q2 FY2013 compared to
$145K in Q2 FY2012.
-- A foreign exchange gain of $62K during Q2 FY2013 compared to a $39K
during Q2 FY2012.
-- Quorum posted its sixteenth 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 Q2 FY2013 compared to Q2 FY2012. The highlights were a
6% increase in revenue and an $8K increase in EBITDA.
Quorum has filed its Q2 2013 consolidated financial statements and notes thereto
as at and for the period ended June 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
Six Months Six Months Q2 Ended
Ended June Ended June June 30,
30, 2013 30, 2012 2013
----------------------------------------------------------------------------
Gross revenue $ 3,900,649 $ 3,673,318 $ 1,941,358
Direct costs 1,837,658 1,679,660 910,460
Margin after direct costs 2,062,991 1,993,658 1,030,898
Earnings before interest, taxes,
depreciation and amortization
(EBITDA) 392,061 352,542 234,503
Income (loss) before deferred income
tax expense 2,093 27,591 39,756
Net loss (132,618) (132,565) (84,452)
Comprehensive loss (34,582) (134,217) (22,167)
Basic loss per share $ (0.0034) $ (0.0034) $ (0.0021)
Fully diluted loss per share $ (0.0034) $ (0.0034) $ (0.0021)
Weighted average number of common
shares
Basic 39,298,438 39,298,438 39,298,438
Diluted 39,298,438 39,298,438 39,298,438
XSellerator installations - in the
period 9 12 6
XSellerator active dealership
rooftops 273 263 273
----------------------------------------------------------------------------
Financial Highlights
Q2 Ended Q1 Ended Q1 Ended
June 30, March 31, March 31,
2012 2013 2012
----------------------------------------------------------------------------
Gross revenue $ 1,831,132 $ 1,959,291 $ 1,842,186
Direct costs 850,670 927,198 828,990
Margin after direct costs 980,462 1,032,093 1,013,196
Earnings before interest, taxes,
depreciation and amortization
(EBITDA) 226,086 157,558 126,456
Income (loss) before deferred income
tax expense 65,027 (37,663) (37,436)
Net loss (80,311) (48,166) (52,254)
Comprehensive loss (41,613) (12,415) (92,604)
Basic loss per share $ (0.0020) $ (0.0012) $ (0.0013)
Fully diluted loss per share $ (0.0020) $ (0.0012) $ (0.0013)
Weighted average number of common
shares
Basic 39,298,438 39,298,438 39,298,438
Diluted 39,298,438 39,298,438 39,298,438
XSellerator installations - in the
period 6 3 6
XSellerator active dealership
rooftops 263 271 259
----------------------------------------------------------------------------
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' 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
June 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.
FOR FURTHER INFORMATION PLEASE CONTACT:
Quorum Information Technologies Inc.
Maury Marks
403-777-0036 ext 104
MarksM@QuorumDMS.com
www.QuorumDMS.com
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