Quorum Releases Q2 Fiscal Year 2010 Results
August 18 2010 - 11:58AM
Marketwired Canada
Quorum Information Technologies Inc. (TSX VENTURE:QIS) ("Quorum" or the
"Company") today released its Second Quarter (Q2) Fiscal Year (FY) 2010 results.
Quorum delivers its dealership management system (DMS), XSellerator(TM), and
related services to 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.
Maury Marks, Quorum's President and CEO made the following remarks about the
Company's Q2 FY2010 results:
Quorum is focused on responsible growth and exceptional customer care. Our
overriding strategic goals are to continue to expand our customer base through
new sales while generating sustained positive cash flow every quarter. At the
same time, we are committed to providing outstanding service and support to our
loyal customers. Following are highlights of our progress towards those goals in
Q2 FY2010:
-- High Growth Installation Rate - the Company completed 19 rooftop
installations for the six months ended June 30, 2010 compared with three
for the six months ended June 30, 2009. We are on track to beat our
previous company record of 36 rooftop installations for a year.
-- Record Level of Active Dealership Rooftops - at the end of Q2 FY2010, we
set a new company record for total active XSellerator dealership
rooftops at 228. Additionally, we now have a more diverse customer base
as 25% of our dealerships are now non-GM franchised dealerships, up from
10% at June 30, 2009. The Company currently supports GM, Isuzu,
Chrysler, Hyundai, KIA, Nissan, Subaru, NAPA and Bumper to Bumper
dealerships.
-- Customer Driven New Version - during the quarter we released a new
version of our XSellerator software with a significant number of
customer-driven enhancements. Additionally, we are preparing for the
release of a new customer support portal in Q3 of this year.
-- Results - this quarter was one of the strongest financial quarters in
Quorum's history. Our revenues, earnings and cash flows were up when
compared to Q1 FY2010 and Q2 FY2009. We are definitely meeting our goal
to grow responsibly.
The following is a summary of our Q2 FY2010 financial performance:
-- Revenue increased by 24% compared to Q2 FY2009 and 4% compared to Q1
FY2010. When compared to Q2 FY2009, our net new revenue increased by
161% from the installation of nine new dealership rooftops in the
quarter compared to one in Q2 FY2009. With the added growth in our
customer base, our recurring support revenues increased by 7% over Q2
FY2009.
-- Gross Profit margin increased slightly from 55% in both Q2 FY2009 and Q1
FY2010 to 57% in Q2 FY2010. This performance is particularly important
because it was achieved in a high installation quarter and installation
revenue is lower margin revenue compared to our recurring support
revenues.
-- EBITDA (earnings before interest, taxes, depreciation and amortization)
in Q2 FY2010 was $383K versus $250K in Q2 FY2009 and $297K in Q1 FY2010.
We managed to increase our EBITDA despite incurring some added costs
(including staffing) to increase our implementation capacity.
-- Net income for Q2 FY2010 was $330K compared to $3K in Q2 FY2009 and $15K
for Q1 FY2010.
-- Positive quarterly cash flow from operating activities of $305K was
achieved in Q2 FY2010 versus $53K in Q2 FY2009 and $285K in Q1 FY2010.
Net cash outflows for investing and financing activities were $140K in
Q2 FY2010 for a quarterly increase in cash of $165K.
With our sales and installation activity restored, we are focused on balancing
the growth of the Company while remaining fiscally responsible and providing
exceptional customer care. We are excited about the prospects for the rest of
2010.
Quorum has filed its 2010 Q2 consolidated financial statements and notes thereto
as at and for the period ended June 30, 2010 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
Ended June 30, Ended June 30, Q2 Ended June
2010 2009 30, 2010
----------------------------------------------------------------------------
Gross revenue $ 3,977,087 $ 3,532,715 $ 2,031,488
Cost of products and services
sold 1,738,639 1,522,497 869,470
Gross profit 2,238,448 2,010,218 1,162,018
Earnings before interest,
taxes and amortization
(EBITDA) 680,024 619,003 383,246
Net income 345,198 191,497 329,927
Basic earnings per share $ 0.009 $ 0.005 $ 0.008
Fully diluted earnings per
share $ 0.008 $ 0.005 $ 0.008
Weighted average number of
common shares
Basic 39,298,438 39,298,438 39,298,438
Diluted 42,398,938 39,298,438 42,398,938
XSellerator installations - in
the period 19 3 9
XSellerator active dealership
rooftops 228 224 228
----------------------------------------------------------------------------
Q2 Ended June Q1 Ended March Q1 Ended March
30, 2009 31, 2010 31, 2009
----------------------------------------------------------------------------
Gross revenue $ 1,636,363 $ 1,945,599 $ 1,896,352
Cost of products and services
sold 733,227 869,169 789,270
Gross profit 903,136 1,076,430 1,107,082
Earnings before interest,
taxes and amortization
(EBITDA) 249,886 296,777 369,137
Net income 2,679 15,271 188,818
Basic earnings per share $ 0.0001 $ 0.00039 $ 0.00480
Fully diluted earnings per
share $ 0.0001 $ 0.00036 $ 0.00480
Weighted average number of
common shares
Basic 39,298,438 39,298,438 39,298,438
Diluted 39,298,438 42,398,938 39,298,438
XSellerator installations - in
the period 1 10 2
XSellerator active dealership
rooftops 224 221 225
----------------------------------------------------------------------------
About Quorum
Quorum is a North American company focused on developing, marketing,
implementing and supporting its XSellerator(TM) 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 Gold Certified Partner and Field-Level
Managed ISV 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 year ended
December 31, 2009. 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.
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