Quorum Information Technologies Inc. (TSX Venture: QIS) ("Quorum"),
a leading provider of innovative and robust technology solutions
and services to traditional and electric vehicle dealerships and
Original Equipment Manufacturers ("OEM") across North America,
released its results for 2020 today.
“COVID-19 presented a number of challenges in
2020 for the automotive industry. Despite the challenges, Quorum
had a strong year posting a record Adjusted EBITDA1,” stated Maury
Marks, President and CEO. “One-time, COVID-19 related Q2 customer
discounts of $1.5 and $0.2 million for SaaS and BDC respectively
resulted in a SaaS revenue decrease of 1% and BDC revenue increase
of only 9% in 2020 compared to 2019. In Q4, Quorum reported a
record SaaS revenue quarter as both SaaS and BDC revenue increased
in Q4 over Q3 by 2% and 5% respectively, which equates to 8% and
20% when annualized.”
“With the Q3 addition of MyDeal and PowerLane
solutions to our product suite, Quorum continues to be a leader in
transforming automotive digital operations,” continued Marks.
“These new solutions allow dealership consumers to buy a vehicle
online and to have a touchless service experience. We expect these
solutions to help increase our ‘share of wallet’ going
forward.”
“I would especially like to acknowledge our
employees and customers who helped Quorum to navigate the
challenges in these unprecedented times,” added Marks. “Our
employees are the driving force behind our strong 2020 results and
their continued innovation ensures Quorum has a product suite
prepared for the future of automotive.”
_______________1 Adjusted EBITDA (non-GAAP) –
Net income (loss) before interest and financing costs, taxes,
depreciation, amortization, stock-based compensation, foreign
exchange gains and losses, one-time acquisition-related expenses
and restructuring fees.
Fourth Quarter Results
- SaaS revenue was $6.0 million, an increase of 4% compared to Q4
2019 and an increase of 2% compared to Q3 2020.
- BDC revenue was $1.9 million, an increase of 11% compared to Q4
2019 and an increase of 5% compared to Q3 2020.
- Services and one-time revenue were $0.3 million, a decrease of
71% compared to Q4 2019.
- Total revenue was $8.3 million, a decrease of 4% compared to Q4
2019.
- Gross margin was $3.7 million, a decrease of 2% compared to Q4
2019.
- Adjusted EBITDA1 was $1.5 million, an increase of 44% compared
to Q4 2019.
- Net loss was $0.5 million, a decrease of 68% compared to Q4
2019.
Fiscal Year 2020 Results
- SaaS revenue was $22.1 million, a decrease of 1% compared to
2019.
- BDC revenue was $7.5 million, an increase of 9% compared to
2019.
- Services and one-time revenue were $1.2 million, a decrease of
67% compared to 2019.
- Total revenue was $30.9 million, a decrease of 6% compared to
2019.
- Gross margin was $13.7 million, a decrease of 10% compared to
2019.
- Adjusted EBITDA1 was $4.9 million, an increase of 7% compared
to 2019.
- Net loss was $1.9 million, an increase of 68% compared to
2019.
- Cash balance was $9.3 million as of December 31, 2020 compared
to $8.6 million as of December 31, 2019.
Financial Summary
($000’s) |
Year EndedDecember 31, 2020 |
Year EndedDecember 31, 2019 |
Q4 EndedDecember 31, 2020 |
Q4 EndedDecember 31, 2019 |
SaaS revenue |
$ |
22,136 |
|
$ |
22,303 |
|
$ |
6,038 |
|
$ |
5,832 |
|
BDC
revenue |
|
7,487 |
|
|
6,849 |
|
|
1,953 |
|
|
1,752 |
|
Services
and one-time revenue |
|
1,234 |
|
|
3,690 |
|
|
326 |
|
|
1,119 |
|
Total
revenue |
|
30,856 |
|
|
32,841 |
|
|
8,317 |
|
|
8,703 |
|
|
|
|
|
|
Cost of
revenue |
|
17,202 |
|
|
17,618 |
|
|
4,637 |
|
|
4,944 |
|
|
|
|
|
|
Margin
after direct costs |
|
13,654 |
|
|
15,223 |
|
|
3,680 |
|
|
3,759 |
|
Gross
margin percentage |
|
44 |
% |
|
46 |
% |
|
44 |
% |
|
43 |
% |
|
|
|
|
|
Adjusted
EBITDA1 |
|
4,904 |
|
|
4,568 |
|
|
1,493 |
|
|
1,035 |
|
|
|
|
|
|
Adjusted
cash income2 |
|
2,477 |
|
|
1,754 |
|
|
815 |
|
|
294 |
|
|
|
|
|
|
Net loss |
$ |
(1,859 |
) |
$ |
(1,106 |
) |
$ |
(476 |
) |
$ |
(1,479 |
) |
_______________2 Adjusted Cash Income (“ACI”)
(non-GAAP) – Adjusted EBITDA less capitalized salaries and
overhead.
2020 Business Highlights
- In February 2020, Autovance
released its next generation Finance and Insurance (“F&I”) Menu
functionality.
- In February 2020, XSellerator
released its enhanced automotive dealerships service lane
technology, PowerLane.
- In February 2020, Quorum released
its new advanced reporting and analysis tool for dealership
customers called Q Analytics. Strategically this tool integrates
the complete product suite under one enterprise reporting tool for
dealerships.
- In April 2020, Autovance announced
its MyDeal Digital Retailing System to allow dealers and customers
to interact online for vehicle sales.
- In September 2020, Mr. Mike
Herenberg joined the Corporation as Chief Operating Officer.
- In September 2020, DealerMine
expanded its BDC to a second location utilizing Quorum’s existing
leased space in St. John’s, NL to allow for accelerated growth and
improved customer satisfaction.
- In Q3 2020, Quorum launched the
process of providing remote installation and training services for
most of the Corporation’s products to both new and existing
dealership customers.
- In October 2020, DealerMine
expanded its strategic partnerships with AutoCanada to provide
expanded electronic messaging handling through a separate BDC
team.
Quorum 2020 Results Conference Call
Details and Investor Presentation
Maury Marks, President and Chief Executive
Officer and Marilyn Bown, Chief Financial Officer will present the
Year End 2020 Annual Results at a conference call with concurrent
audio webcast, scheduled for:
Date: |
|
Thursday, April 22, 2021 |
|
|
|
Time: |
|
9:00 am MST |
|
|
|
Dial-In #: |
|
Toll-Free North America: 1 (844) 967-3741 |
|
|
|
Webcast Link: |
|
2020 Year End Results Webcast |
|
|
|
The Year End 2020 Results Investor Presentation,
a replay of the conference call and transcripts of the conference
call will also be available under the Investors section at
www.QuorumInformationSystems.com.
Forward Looking Information
This report contains certain forward-looking
information and statements within the meaning of applicable
securities laws. All statements in this report, other than
statements of historical fact, which address events or developments
concerning Quorum Information Technologies Inc. ("Quorum" or the
“Corporation”) that Quorum expects to occur are "forward-looking
information and statements". The use of any of the words "expect",
"anticipate", "continue", "estimate", "objective", "ongoing",
"may", "will", "project", "should", "potential", "could",
"scheduled", "believe", "plans", "intends", "might" and similar
expressions are intended to identify forward-looking information or
statements.
In particular, but without limiting the
foregoing, this document may contain forward-looking information
and statements pertaining to the following: business plan of Quorum
including its plans for targeting new Original Equipment
Manufacturer (“OEM”) integration, new dealership rooftop sales, and
increasing Automotive Group Partnerships; the timing for completion
and cost of OEM integration; estimates of return on assets and
Adjusted EBITDA1; potential merger and acquisition (“M&A”)
opportunities; the timing of adoption of new accounting standards
and the potential impact of new accounting standards on the
Corporation’s financial statements; the effect of acquisitions on
the Corporation including the effect of the Autovance, DealerMine
and Oasis acquisitions; the effect of the BDC Capital facility; the
effect of the Corporation’s private placement financing; the effect
of the COVID-19 pandemic on industry activity and economic activity
in North America as a whole; various industry activity forecasts;
growth opportunities including those in the United States;
anticipated requirements by OEM manufacturers relating to
integrations and certifications; and other expectations, beliefs,
plans, goals, objectives, assumptions, information and statements
about possible future events, conditions, results of operations or
performance. Various assumptions were used in drawing the
conclusions or making the forecasts and projections contained in
the forward-looking statements throughout this report. The
forward-looking information and statements contained in this report
reflect several material factors, expectations and assumptions
including, without limitation: (i) capital expenditures by dealers;
(ii) market availability of current and future dealership rooftops;
(iii) schedules and timing of certain projects and Quorum's
strategy for growth; (iv) Quorum's future operating and financial
results; and (v) treatment under governmental regulatory regimes
and tax and other laws. The forward-looking information and
statements included in this report are not guarantees of future
performance and should not be unduly relied upon.
Forward-looking statements are based on current
expectations, estimates and projections that involve a number of
risks and uncertainties, which could cause actual results to differ
materially from those anticipated and described in the
forward-looking information and statements. Such information and
statements involve known and unknown risks, uncertainties and other
factors that may cause actual results or events to differ
materially from those anticipated in such forward-looking
information or statements including, without limitation: (i)
volatility in exchange rates for the Canadian dollar relative to
the US dollar; (ii) liabilities and risks inherent in the software
services industry; (iii) competition for, among other things,
capital and skilled personnel; (iv) changes in general economic,
market and business conditions in Canada and the United States; and
(v) actions by governmental or regulatory authorities including
changes in income tax laws or changes in tax laws. Quorum cautions
that the foregoing list of assumptions, risks and uncertainties is
not exhaustive. The forward-looking information and statements
contained in this document speak only as of the date of this
document, and Quorum assumes no obligation to update or revise them
to reflect new events or circumstances, except as may be required
pursuant to applicable laws. Any financial outlook or
future-oriented financial information in this document, as defined
by applicable securities legislation, has been approved by
management of Quorum. Such financial outlook or future-oriented
financial information is provided for the purpose of providing
information about management's current expectations and plans
relating to the future. Readers are cautioned that reliance on such
information may not be appropriate for other purposes.
About Quorum Information Technologies Inc.
Quorum is a North American company focused on developing,
marketing, implementing and supporting its portfolio of software
and services for automotive dealerships that includes:
- XSellerator, a Dealership
Management System (DMS) that automates, integrates and streamlines
key processes across departments in a dealership, and emphasizes
revenue generation and customer satisfaction.
- DealerMine CRM, a sales and service
Customer Relationship Management (CRM) system and set of Business
Development Centre services that drives revenue into the critical
sales and service departments in a dealership.
- Autovance, a modern retailing
platform that helps dealerships attract more business through
Digital Retailing, improve in-store profits and closing rates
through its desking tool and maximize their efficiency and CSI
through Autovance’s F&I menu solution.
- Advantage, a full showroom system
for independent dealerships and a management system that also
includes in-house leasing, inventory management, and
accounting.
Quorum has filed its 2020 audited consolidated
financial statements and notes thereto as at and for the year ended
December 31, 2020, and accompanying management and discussion and
analysis in accordance with National Instrument 51-102 - Continuous
Disclosure Obligations adopted by the Canadian securities
regulatory authorities.
Quorum Information Technologies Inc. is traded
on the Toronto Venture Exchange (TSX-V) under the symbol QIS. For
additional information please go to
www.QuorumInformationSystems.com.
Neither the TSX Venture Exchange nor its
regulation services provider (as that term is defined in the
policies of the TSX Venture Exchange) has reviewed this release and
neither accepts responsibility for the adequacy or accuracy of this
release.
Contact: Maury Marks
403-777-0036Investors@QuorumInfoTech.com
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