Quorum Information Technologies Inc. (“Quorum” or the “Company”), a
leading provider of dealership and customer management software and
value-added services to the automotive industry, released its
results for Q1 2020 today.
“In Q1 2020 Quorum had another strong quarter as
we posted both record SaaS and BDC revenue,” stated Maury Marks,
President and CEO. “We are continuing to build on the momentum of
our acquisitions of Oasis in 2019, DealerMine in 2018 and Autovance
in 2017 as well as adding dealers to the XSellerator platform.
Quorum also significantly expanded its product offering in the
quarter by releasing the new Autovance F&I Menu, XSellerator
Power Lane and Q Analytics reporting tool. While a major focus has
been on product integration, we are now continuing to implement our
One Quorum approach to the company and are working on significant
operational integration that will springboard us to becoming a more
cohesive, efficient, and focused organization.
We have noted recently a trend toward re-opening
the economy in both Canada and the US which should allow for
increased activity for our dealerships and Quorum. While the
COVID-19 pandemic will impact our 2020 results, we are extremely
well capitalized and have a strong plan to emerge healthier than
ever as we move through 2020, just as we did in the last recession
in 2009.”
First Quarter Results
- SaaS revenue was $5.9 million, an increase of 12% compared to
Q1 2019.
- BDC revenue was $2.1 million, an increase of 60%.
- Total revenue was $8.5 million, an increase of 16%.
- Gross margin was $3.9 million, an increase of 12%.
- Adjusted EBTIDA was $0.9 million, an increase of 16%.
Financial Summary
Three months
ended($000’s) |
March 31, 2020 |
March 31, 2019 |
SaaS revenue |
$ |
5,921 |
|
$ |
5,289 |
|
BDC
revenue |
|
2,128 |
|
|
1,331 |
|
Services
and one-time revenue |
|
466 |
|
|
728 |
|
Total
revenue |
|
8,515 |
|
|
7,348 |
|
|
|
|
Cost of
revenue |
|
4,647 |
|
|
3,897 |
|
|
|
|
Gross
margin |
|
3,868 |
|
|
3,451 |
|
Gross
margin percentage |
|
45 |
% |
|
47 |
% |
|
|
|
Adjusted
EBITDA |
|
883 |
|
|
759 |
|
|
|
|
Adjusted
cash income |
|
52 |
|
|
38 |
|
|
|
|
Net
loss |
$ |
(960 |
) |
$ |
(556 |
) |
Recent Business Highlights
- In January 2020, the Corporation signed a contribution
agreement with NRC-IRAP for grant proceeds of $270K to assist
Quorum in undertaking the VIP refactoring project.
- 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, Power Lane.
- In February 2020, Quorum released its new advanced reporting
and analysis tool for dealerships customers called Q Analytics.
Strategically this tool integrates our complete product suite
under one enterprise reporting tool for dealerships.
- In February 2020, DealerMine was approved as a vendor partner
for the General Motors Canada Dealer Data Share program.
- In March 2020, XSellerator announced an agreement to build
integration with Affinitiv XRM for Internet Lead Management for US
dealerships.
Novel Coronavirus (“COVID-19”)
Due to the concerns over the COVID-19 pandemic,
the Corporation transitioned all staff to work from home and all
onsite training and installation activities were put on hold by
March 20, 2020.
In April 2020, dealerships’ sales departments
were shut down or operating on minimal staff, while service and
parts departments operations have slowed down considerably. With
its dealership customers facing an extremely difficult business
environment, the Corporation has proactively addressed their
concerns by providing a 50% discount on their monthly support
invoices for April and May. Quorum is working with both the US and
the Canadian governments for relief from the lost revenues in April
and May and currently has not committed to any additional discounts
beyond May. Strategically, this was a short-term discount to
protect long-term SaaS revenue.
While there remains some uncertainty regarding
the duration and depth of the disruption to our customers’
businesses, we are confident that the combination of the actions we
have taken to stem cash outflow, the proceeds raised from the
financing in November and government support provides us with
sufficient resources to regain growth momentum through the
recovery. Our solutions are critical to dealership operations and
should be highly valued in helping dealers recover from the
COVID-19 shutdown. Furthermore, our management team guided Quorum
through similar challenges in 2008-09 where we emerged from the
Global Financial Crisis stronger than we entered. For more details
on our COVID-19 response, please see our MD&A.
Quorum Q1 2020 Results Conference Call Details and
Investor Presentation
Anyone wishing to participate in the call is
asked to dial-in using the following numbers and ask for the Quorum
Information Technologies Inc. Q1 2020 Quarterly Results Conference
Call. Callers are asked to dial-in 5 minutes before the scheduled
start time on May 19 at 11:00 MT (13:00 ET).
Details for anyone wishing to participate in the
conference call are:
Local: |
1 (403) 451-9838 |
Toll-Free North America: |
1 (888) 231-8191 |
A replay of the conference call will be
available beginning at approximately 14:00 MT on May 19, 2020 until
21:59 MT on June 2, 2020, and can be accessed by dialing:
Local: |
1 (403) 451-9481 |
Toll-Free North America: |
1 (855) 859-2056 |
Password#: |
9555486 |
A replay of the conference call will also be
available for at least 30 days following the call on Quorum’s
website, under the Investors section, at www.quorumdms.com.
Quorum’s Q1 2020 Quarterly Results investor
presentation will also available for download after the press
release has been issued under the Investors section on the
Company’s website at www.quorumdms.com.
Quorum Contact: Maury Marks
403-777-0036MarksM@QuorumDMS.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
EBITDA; 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 statement; 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
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 news 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:
- XSelleratorTM, 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 system and set of Business Development Center services
that drives revenue into the critical sales and service departments
in a dealership.
- Autovance, a sales desking system that increases sales
department gross margins and improves customer satisfaction for
dealerships.
- Advantage, a full showroom system for both franchised and
independent dealerships and a comprehensive operating system that
includes accounting for the independent market.
Quorum has filed its Q1 2020 unaudited condensed
consolidated financial statements and notes thereto as at and for
the three months ended March 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.QuorumDMS.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.
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