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Quorum Releases Q1 Fiscal Year 2012 ResultsQuorum produces solid Operation and Financial Results (May 22, 2012)
CALGARY, ALBERTA -- (Marketwire) -- 05/22/12 -- Quorum Information Technologies Inc. ("Quorum" or the "Company") (TSX VENTURE:QIS) today released its First Quarter (Q1) Fiscal Year (FY) 2012 results. Quorum delivers its dealership management system (DMS), XSellerator(TM), 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 supplies its DMS to Isuzu, Chrysler, Hyundai, Kia, Nissan, Subaru, NAPA and Bumper to Bumper franchised and independent dealership customers.
Maury Marks, Quorum's President and CEO made the following remarks about the Company's Q1 FY2012 results:
Over the last two years, Quorum has become an "all makes" organization, with a continued emphasis on GM dealerships. Quorum supplies our product to GM, Isuzu, Chrysler, Hyundai, Kia, Nissan, Subaru, NAPA and Bumper to Bumper franchised dealership as well as independent dealership customers.
As the Company has grown in the market, we have also enhanced our operational excellence by focusing on measurable improvements. Some of our key Q1 FY2012 milestones are as follows:
-- Quorum attained 259 installed active dealership rooftops at the end of Q1 FY2012. During the quarter we also sold an additional seven dealership rooftops that will be installed in future quarters. Our 259 dealership rooftops encompass 8,215 active users - approximately 30 users per rooftop. -- Our dealership Customer Satisfaction ("CSI") score results in Q1 FY2012 were as follows: -- CSI semi annual survey - 78% of end users reported "satisfied" or "very satisfied" and 83% of dealer principles reported "satisfied" or "very satisfied". -- Our monthly Support CSI survey reported an average of 95% "very satisfied" with the service they received from our support center. -- We piloted the ground-breaking Communicator project which is designed to transform how dealership staff is able take advantage of modern technology to communicate with their customers and with each other. We also piloted "Console" which is a new customizable workspace with a cadre of productivity tools to help dealerships improve customer service, increase utilization of XSellerator and track key performance indicators. Full release of both "Communicator" and the "Console" is planned for Q2 FY2012. Key financial results summary: -- Sales decreased slightly by 4% to $1,842K in Q1 FY2012 from $1,912K in Q1 FY2011, and margin after direct costs decreased to $1,013K in Q1 FY2012, as compared to $1,065K in Q1 FY2011, a 5% decrease. The change in sales is due to: -- A decrease of $89K in net new revenue which was a result of completing six smaller installations in Q1 FY2012 as compared to six larger dealership installations in Q1 FY2011. -- An increase of $60K in recurring support revenue as a result from having 259 active dealership rooftops at the end of Q1 FY2012 versus 245 at the end of Q1 FY2011. -- A decrease in integration revenue of $41K due to a reduced number of GM integration projects. -- Earnings before interest, taxes, depreciation and amortization (EBITDA) decreased to $126K in Q1 FY2012 from $323K in Q1 FY2011. Loss before taxes decreased to $37K in Q1 FY2012 compared to income of $154K in Q1 FY2011. The short term decrease is largely due to the movement of some key roles within the Company from one office to another. In each case, duplicate salaries and benefits expense was incurred as we trained the new employee while maintaining the salary of the former employee. As well, during Q1 FY2012, the Company incurred marketing expenses from hosting the largest booth that Quorum has had since 2007 at the National Automobile Dealers Association (NADA) conference. Additionally, the Company incurred the cost of hosting a booth at the "by invitation only" BMW conference. -- Quorum had a net loss of $52K in Q1 FY2012 compared to a net loss of $48K in Q1 FY2011. The loss in Q1 FY2012 is due to a short term increase in salaries and the costs associated with attendance at the NADA and BMW conferences -- Quorum posted its eleventh 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 continues to grow our customer base, improve our service offerings and customer satisfaction, and lead the market in product innovation. We also continue to deliver solid financial results and improve our cash and working capital positions by producing improved positive cash flow every year. Our single biggest challenge in 2012 is to grow our sales and implementation rates to the "next level." We have already embarked on a number of initiatives that are focused on meeting this challenge.
Quorum has filed its Q1 2012 consolidated financial statements and notes thereto as at and for the period ended March 31, 2012 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 Three Months Ended March 31, 2012 March 31, 2011 ---------------------------------------------------------------------------- Gross revenue $ 1,842,186 $ 1,912,268 Direct costs 828,990 847,575 Margin after direct costs 1,013,196 1,064,693 Earnings before interest, taxes and amortization (EBITDA) 126,456 322,757 Income (loss) before deferred income tax (37,436) 154,210 Net loss (52,254) (47,724) Comprehensive loss (92,604) (100,177) Basic loss per share (0.0013) (0.0012) Fully diluted loss per share $ (0.0013) $ (0.0012) Weighted average number of common shares Basic 39,298,438 39,298,438 Diluted 39,298,438 39,684,319 XSellerator installations - in the period 6 6 XSellerator active dealership rooftops 259 245 ----------------------------------------------------------------------------
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.
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, 2012. 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.
Quorum Information Technologies Inc.
403-777-0036 ext 104
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