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(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 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-- An increase of $16K in transitions revenue (replacing outdated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 Nine
Months Months
Ended Ended Q3 Ended Q3 Ended
Sept 30, Sept 30, Sept 30, Sept 30,
2013 2012 2013 2012
----------------------------------------------------------------------------
Gross revenue $ 5,796,859 $ 5,580,724 $ 1,896,210 $ 1,907,406
Direct costs
2,649,056 2,556,320 811,398 876,660
Margin after direct
costs 3,147,803 3,024,404 1,084,812 1,030,746
Earnings before
interest, taxes,
depreciation and
amortization (EBITDA) 750,151 591,133 358,090 238,591
Income (loss) before
deferred income tax
expense
168,074 108,114 165,981 80,523
Net income (loss) (56,581) (98,458) 76,037 34,107
Comprehensive income
(loss) 390 (175,007) 34,972 (40,790)
Basic income (loss) per
share $ (0.0014) $ (0.0025) $ 0.0019 $ 0.0009
Fully diluted income
(loss) per share $ (0.0014) $ (0.0025) $ 0.0019 $ 0.0009
Weighted average number
of common shares
Basic 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
Q2 Ended Q2 Ended Q1 Ended Q1 Ended
June 30, June 30, March 31, March 31,
2013 2012 2013 2012
----------------------------------------------------------------------------
Gross revenue $ 1,941,358 $ 1,831,132 $ 1,959,291 $ 1,842,186
Direct costs
910,460 850,670 927,198 828,990
Margin after direct
costs 1,030,898 980,462 1,032,093 1,013,196
Earnings before
interest, taxes,
depreciation and
amortization (EBITDA) 234,503 226,086 157,558 126,456
Income (loss) before
deferred income tax
expense
39,756 65,027 (37,663) (37,436)
Net income (loss) (84,452) (80,311) (48,166) (52,254)
Comprehensive income
(loss) (22,167) (41,613) (12,415) (92,604)
Basic income (loss) per
share $ (0.0021) $ (0.0020) $ (0.0012) $ (0.0013)
Fully diluted income
(loss) per share $ (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
Diluted 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.
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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