Quorum Releases Fiscal Year 2013 Results
April 29 2014 - 10:46AM
Marketwired Canada
Quorum Information Technologies Inc. ("Quorum" or the "Company") (TSX
VENTURE:QIS) today released its 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 both a Dealer
Technology Assistance Program (DTAP) 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 also supplies its product to
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 FY2013 operational and financial results:
Operational results highlights for FY2013 are as follows:
-- Key customer metrics are as follows:
-- Customer Satisfaction Index ("CSI") semi-annual survey in Q3 FY2013
showed an average of 87% of dealer principals as "satisfied" or
"very satisfied" and an average of 75% of end users as "satisfied"
or "very satisfied" overall. The remaining 13% of dealer principals
reported "somewhat satisfied" and 3/4 of the remaining 25% of end
users reported "somewhat satisfied". The results are up from our
survey in Q1 FY2013 which reported "satisfied" or "very satisfied"
comparative numbers of 75% for dealer principals and 73% for end
users.
-- Our monthly Support Center CSI survey reported an average of over
95% "very satisfied" with the service received from our support
team.
-- For our Support services, on average, we now close 73% of all
support calls within 30 minutes (up from 60% in 2008, when we first
started measuring this statistic) and 87% of all calls within 24
hours (up from 81% in 2008).
-- Product - during FY2013 we released two new versions of XSellerator to
all of our dealership customers. The following two ground-breaking
product features were included in these versions:
-- "Communicator," which transforms how dealership staff communicate
with their customers and each other. Communicator features text,
email and instant message functionality that is integrated into the
XSellerator workflow. The number of email and texts that
Communicator handles, for the 20% of our customers that utilize the
functionality, grew from 7,487 messages in September 2013 to 48,326
in December 2013. This explosive growth coincided with the release
of V4.7.6 which had a number of changes that allowed us to scale the
rollout of Communicator to our customers. In Q1 and Q2 FY2014 we
will focus on a broader rollout of Communicator to more of our
customers.
-- Make More Money ("M3") initiative which focuses on ten key
XSellerator processes that drive incremental revenue into our
dealership customers' operations. During our pilot process, in which
we partnered with 11 of our dealership customers, we were able to
generate an increase in monthly service and parts revenue of over
$50,000 per dealership. In Q1 and Q2 FY2014, we will focus on
training more of our dealerships on the M3 processes.
-- Employees - none of the Company's accomplishments are possible without
highly motivated, engaged people. Our sincere thanks to the people that
drive Quorum. Every year we measure our staff engagement and we actively
work towards improving our job satisfaction and engagement throughout
the Company.
Financial Results highlights for FY2013 are as follows:
-- Quorum's key to growing profits is having a critical mass of installed
dealerships that supply a recurring revenue stream, along with a well-
managed fixed and variable cost structure. Sales increased by 6% to
$7,987K in FY2013 from $7,567K in FY2012 and margin after direct costs
increased to $4,487K in FY2013, from $4,113K in FY2012, a 9% increase.
The increase in sales is due to:
-- An increase of $450K in recurring support revenue as a result of
having more active dealership rooftops at the end of FY2013 compared
to the end of FY2012;
-- A decrease in integration revenue of $126K because Quorum does not
receive paid integration work under the new GM DTAP program;
-- A decrease of $262K in net new revenue which was a result of
completing less installations in FY2013 as compared to FY2012; and
-- An increase of $358K in transitions revenue from converting our
customers to the new Microsoft Windows and SQL Server 2012 products.
-- Earnings before interest, taxes, depreciation and amortization (EBITDA)
increased to $1,255K in FY2013 from $848K in FY2012. Income before
deferred income tax expense increased to $471K for FY2013 compared to
$189K in FY2012. The increases in both EBITDA and income before deferred
income tax expense are largely due to:
-- $374K increase in margin after direct costs in FY2013 compared to
FY2012;
-- $40K decrease in general and administrative expense in FY2013
compared to FY2012; and
-- $9K decrease in sales and marketing expense in FY2013 compared to
FY2012.
-- Net income for FY2013 was $295K or $0.0075 per share, compared to net
loss of $65K or $0.0017 per share for FY2012. This is a $360K increase
from FY2012 which is due to the above-noted factors.
-- Comprehensive income increased to $409K in FY2013 compared with a loss
of $118K in FY2012 due to a foreign exchange gain in FY2013 of $115K
versus a foreign exchange loss in FY2012 of $53K.
-- Working capital increased to $1,454K at December 31, 2013 compared with
$1,004K at December 31, 2012. Cash increased to $812K at the end of
December 2013 compared with $425K at the end of December 2012.
2013 was a strong year with revenues up 6% to $7,987K, working capital up $451K,
and income before deferred income tax expense of $471K. During the year we
introduced our innovative Communicator and Make More Money ("M3") initiatives.
These features allow our dealerships to provide a better level of customer
service to their customers and drive additional revenue into their dealerships.
By the end of Q2 FY2014, we expect to have completed a broader roll out of these
features to our customers. With broader adoption, we anticipate that our
customers' demonstrated results from using these two features will enhance the
value equation that we present to prospective customers and to help increase
sales of new systems.
My sincere appreciation is extended to Quorum's Board of Directors and to our
employees and consultants who have been diligent and dedicated in their support
of the Corporation's goals and objectives. My thanks also extend to our
investors for their long-term and continued support of Quorum.
Quorum has filed its 2013 consolidated financial statements and notes thereto as
at and for the period ended December 31, 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
Year ended Year ended Year ended
December 31, December 31, December 31,
2013 2012 2011
----------------------------------------------------------------------------
Gross revenue $ 7,986,772 $ 7,566,580 $ 7,727,502
Direct costs 3,499,641 3,453,317 3,280,810
Margin after direct costs 4,487,131 4,113,263 4,446,692
Earnings before interest, taxes,
depreciation and amortization
(EBITDA) 1,254,890 847,906 1,307,465
Income before deferred income tax
470,924 188,588 611,124
Net income (loss) 294,686 (65,237) 331,147
Comprehensive income (loss) 409,402 (118,488) 371,523
Basic net income (loss) per share $ 0.008 $ (0.002) $ 0.008
Fully diluted net income (loss) per
share $ 0.008 $ (0.002) $ 0.008
Weighted average number of common
shares
Basic 39,298,438 39,298,438 39,298,438
Diluted 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, 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' DTAP program, Quorum is
also one of 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 year ended
December 31, 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
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