Quorum Information Technologies Inc. (TSX VENTURE:QIS) ("Quorum" or the
"Company") today released its Second Quarter (Q2) 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 Q2 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 Q2 FY2012
milestones are as follows:
-- Quorum attained 263 installed active dealership rooftops at the end of
Q2 FY2012. During the quarter we also sold an additional five dealership
rooftops that will be installed in future quarters.
-- During the quarter we released version 4.7.4, which contains two key
features as follows:
-- "Communicator" which is designed to transform how dealership staff
are able to take advantage of modern technology to communicate with
their customers and with each other; and
-- "Console" 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.
-- Our monthly Support CSI survey reported an average of 95% "very
satisfied" with the service they received from our support center.
Key financial results summary:
-- Sales increased slightly by 0.09% to $1,831K in Q2 FY2012 from $1,830K
in Q2 FY2011. The change in sales is due to:
-- A decrease of $28K in net new revenue which was a result of
completing six installations in Q2 FY2012 as compared to six larger
dealership installations in Q2 FY2011.
-- An increase of $39K in recurring support revenue as a result from
having 263 active dealership rooftops at the end of Q2 FY2012 versus
249 at the end of Q2 FY2011.
-- A decrease in integration revenue of $9K due to a reduced number of
GM integration projects.
-- Earnings before interest, taxes, depreciation and amortization (EBITDA)
decreased to $226K in Q2 FY2012 from $239K in Q2 FY2011. Income before
taxes increased to $65K in Q2 FY2012 compared to income of $63K in Q2
FY2011.
-- Quorum had a net loss of $80K in Q2 FY2012 compared to a net income of
$111K in Q2 FY2011. The loss in Q2 FY2012 is due to a deferred income
tax expense of $145K while Q2 FY2011 had a deferred income tax recovery
of $48K.
-- Cash flows from operating activities increased to $326K in Q2 FY2012
compared to $288K in Q2 FY2011 due to the effective management of cash
collections and accounts payable. Net working capital at June 30, 2012
was $904K, with a current ratio of 2.25, compared to $1,065K at December
31, 2011, with a current ratio of 2.43. The decrease in working capital
is primarily due to a decrease in accounts receivable from having less
GM integration projects at the end of Q2 FY2012 versus Q4 FY2011 and the
expiration of the Newfoundland and Labrador government wage subsidy
payment as of March 31, 2012.
-- Quorum posted its twelfth 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 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 Q2 2012 consolidated financial statements and notes thereto
as at and for the period ended June 30, 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
Six Months
Six Month Ended
Ended June 30, Q2 Ended June Q2 Ended June
June 30, 2012 2011 30, 2012 30, 2011
----------------------------------------------------------------------------
Gross revenue $ 3,673,318 $ 3,741,783 $ 1,831,132 $ 1,829,515
Direct costs 1,679,660 1,618,412 850,760 770,837
Margin after direct
costs 1,993,658 2,123,371 980,462 1,058,678
Earnings before
interest, taxes and
amortization
(EBITDA) 352,542 561,265 226,086 238,508
Income (loss) before
deferred income tax 27,591 216,813 65,027 62,603
Net income (loss) (132,565) 62,914 (80,311) 110,638
Comprehensive income
(loss) (134,217) (7,306) (41,613) 92,871
Basic net income
(loss) per share $ (0.0034) $ 0.0016 $ (0.0020) $ 0.0028
Fully diluted net
income (loss) per
share $ (0.0034) $ 0.0016 $ (0.0020) $ 0.0028
Weighted average
number of common
shares
Basic 39,298,438 39,298,438 39,298,438 39,298,438
Diluted 39,298,438 39,684,319 39,298,438 39,684,319
XSellerator
installations - in
the period 12 12 6 6
XSellerator active
dealership rooftops 263 249 263 249
----------------------------------------------------------------------------
Q1 Ended Q1 Ended
March 31, March 31,
2012 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 income (loss) (52,254) (47,724)
Comprehensive income
(loss) (92,604) (100,177)
Basic net income
(loss) per share $ (0.0013) $ (0.0012)
Fully diluted net
income (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
-------------------------------------------------
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
June 30, 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.
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