Quorum Releases Fiscal Year 2009 Results
April 27 2010 - 6:30PM
Marketwired Canada
Quorum Information Technologies Inc. ("Quorum" or the "Company") (TSX
VENTURE:QIS) today released Fiscal Year (FY) 2009 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 FY2009 results:
2009 was a very challenging year for everyone in our industry. The global
recession had a significant impact on the automotive industry. GM emerged from
Chapter 11 Bankruptcy protection in July, 2009 as a new, leaner organization. As
part of the process, GM announced that 42% of its franchised dealerships in both
Canada and the U.S. would not have their GM franchise renewed. At the time, over
90% of our 225 customers were GM dealerships. The net impact on Quorum was:
-- Only 23% of our customers were affected. Two-thirds of those customers
changed their business model, and remained with Quorum as their DMS
provider. To support these customers, Quorum enhanced its product to
support other makes and we now provide vehicle manufacturer integration
to GM, Isuzu, Chrysler, Hyundai, Kia, Nissan, Subaru, NAPA and Bumper to
Bumper dealerships.
-- In the last quarter of 2009, Quorum sold a record 16 dealership rooftops
(a record for a quarter). These sales, once implemented by May 2010,
will get Quorum back to 225 dealership rooftops deployed and
approximately 75% will be GM dealerships.
-- As a result of Quorum's strong Q4 FY2009 sales, combined with high
dealership losses by our competitors, Quorum attained 25% market share
and is now the second largest provider of dealership management systems
to GM dealerships in Canada.
Quorum enters 2010 with a stronger focus on continuing to open new vehicle
manufacturer markets and a more diversified customer base with reduced
dependence on GM dealerships. Longer term, our "all makes" strategy will
continue to diversify our customer base; however, GM franchises will remain a
key focus for the organization.
Some of Quorum's key results are as follows:
-- Revenue was reduced by 14% from $8,451K in FY2008 to $7,268K in FY2009
due to the following:
-- A decrease of 58% in one-time revenue from new sales (seven new
dealerships were installed in 2009 compared with 31 installs in
2008). This was largely because spending was frozen across many
dealerships for most of the year due to franchise concerns.
-- An increase of 7% in support revenues. With limited new installs and
dealership closures, our critical support revenues still had a small
increase in 2009.
-- Gross Margin percent improved to 61% in FY2009 compared to 43% in
FY2008. Stronger cost controls and more efficient business processes
combined with support revenues representing a higher percentage of total
revenues were responsible for the improvement. As our customer base and
support revenues grow as a percentage of total revenue, the higher
margin support revenue drives our gross margin percentage up.
-- Earnings before interest, taxes and amortization (EBITDA) of $1,549K for
FY2009 compared to negative $(40K) in FY2008. EBITDA increased because
Quorum has reached a critical mass of customers, and the related support
payments are covering a significant portion of our cost of operations.
-- Net income of $236K for FY2009 compared with a net loss of $(626K) in
FY2008.
-- Working capital as at December 31, 2009 was $1,844K, an improvement of
$849K over December 31, 2008. This improvement is a result of working
capital generated from operations and the receipt of $475K of a $500K
interest-free, five year, unsecured government loan with the Atlantic
Canada Opportunities Agency (ACOA).
In light of dealing with the effects of the global recession and GM's corporate
bankruptcy, the Company had a successful year. The Company is expecting sales
growth in 2010 and plans to continue our "all makes" expansion as we partner
with new vehicle manufacturers.
Financial Highlights
Year ended Year ended Year ended
December 31, December 31, December 31,
2009 2008 2007
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Gross revenue $7,267,857 $8,451,030 $8,162,503
Cost of products and services 2,813,728 4,802,411 5,610,441
sold
Gross profit 4,454,129 3,648,619 2,552,062
Income (loss) before interest,
taxes and amortization 1,548,963 (39,931) (1,096,660)
(EBITDA)
Net income (loss) 236,045 (625,679) (1,951,916)
Basic earnings (loss) per share $0.006 $(0.016) $(0.051)
Fully diluted earnings (loss) $0.006
per share $(0.016) $(0.051)
Weighted average number of
common shares
Basic 39,298,438 39,298,438 38,214,449
Diluted 39,298,438 39,298,438 38,406,972
XSellerator installations - in 7 31 29
the period
XSellerator active dealership 222 226 201
rooftops
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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 which 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 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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