Quorum Releases Q3 Fiscal Year 2012 Results

Quorum Releases Q3 Fiscal Year 2012 Results 
Quorum produces solid Operational and Financial Results 
CALGARY, ALBERTA -- (Marketwire) -- 11/20/12 -- Quorum Information
Technologies Inc. (TSX VENTURE:QIS) ("Quorum" or the "Company") today
released its Third Quarter (Q3) 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 Q3 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 Q3 FY2012 milestones are as follows: 


 
--  Customer Base - we attained 267 installed active dealership rooftops at
    the end of Q3 FY2012. Although we continue to grow, one of our key goals
    is to increase our sales and implementation rate. We are working on
    multiple initiatives; for example, in Q3 FY2012 we hired an additional
    salesperson and we also initiated activities focused on increasing the
    number of qualified sales leads per salesperson. 
--  Product and Product Utilization - during the quarter we piloted V4.7.5
    in six dealerships. The version has seven new major features and
    multiple small enhancements. In 2012, one of the Company's key goals is
    to increase dealerships' utilization of XSellerator. We are working on
    multiple initiatives to help increase utilization; for example, we
    recently launched eQUIP (whi
ch is a web training subscription service
    for our customers), we planned our 1st annual customer conference which
    will take place Nov 27th and 28th and engaged our support desk to have
    them proactively show dealerships new features during support calls.  
--  Customer Metrics - our dealership Customer Satisfaction ("CSI") score
    results in Q3 FY2012 were as follows: 
    --  CSI semi annual survey - 85% of end users reported "satisfied" or
        "very satisfied" and 70% of dealer principals reported "satisfied"
        or "very satisfied". Note that if "somewhat satisfied" is included
        in our results, the numbers would be 94% of end users and 85% of
        dealer principals. 
    --  CSI monthly support surveys - over 95% of our end users reported
        "very satisfied" with the service they received from our support
        center.
--  Financing - during the quarter we signed a $500K interest-free, five
    year, unsecured government loan with the Atlantic Canada Opportunities
    Agency (ACOA). The financing will be received as Quorum incurs specific
    expenditures made from Q3 FY2012 to Q2 FY2013. Additionally, we signed a
    $50K grant with ACOA for specific expenditures from Q4 FY2012 to Q3
    FY2013.

 
Key financial results summary: 


 
--  Sales increased by 2% to $1,907K in Q3 FY2012 from $1,874K in Q3 FY2011,
    and margin after direct costs decreased to $1,031K in Q3 FY2012, as
    compared to $1,105K in Q3 FY2011, a 7% decrease. The increase in sales
    is due to: 
    --  An increase of $41K in net new revenue which was a result of
        completing four installations in Q3 FY2012 as compared to three
        dealership installations in Q3 FY2011.  
    --  An increase of $115K in recurring support revenue as a result from
        having 267 active dealership rooftops at the end of Q3 FY2012 versus
        250 at the end of Q3 FY2011. 
    --  A decrease in integration revenue of $152K due to a reduced number
        of GM integration projects.  
    --  An increase of $29K in transition revenue.
        The decrease in margin after direct costs is largely due to an
        increase in low margin net new and transition revenue and a decrease
        in higher margin integration revenue. 
 
--  Earnings before interest, taxes, depreciation and amortization
    ("EBITDA") decreased to $239K in Q3 FY2012 from $372K in Q3 FY2011.
    Income before taxes decreased to $81K in Q3 FY2012 from $200K in Q3
    FY2011. The decreases in both EBITDA and income before taxes are largely
    due to: 
    --  $74K decrease in margin after direct costs in Q3 FY2012 compared to
        Q3 FY2011 as explained above; and 
    --  an increase in sales and marketing staffing levels which increased
        Salaries and Benefits costs by $61K in Q3 FY2012 versus Q3 FY2011.
--  Cash flows from operating activities were $157K in Q3 FY2012 compared to
    $163K in Q3 FY2011.  
--  Net working capital at September 30, 2012 was $968K, with a current
    ratio of 2.26, 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 Q3 FY2012 versus Q4 FY2011 and the expiration of the
    Newfoundland and Labrador Government wage subsidy payment as of March
    31, 2012.

 
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 Q3 2012 consolidated financial statements and
notes thereto as at and for the period ended September 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 


 
                               Nine          Nine                           
                             Months        Months                           
                              Ended         Ended     Q3 Ended      Q3 Ended
                          Sept. 30,     Sept. 30,    Sept. 30,     Sept. 30,
                               2012          2011         2012          2011
----------------------------------------------------------------------------
Gross revenue            $5,580,724    $5,616,280   $1,907,406    $1,874,497
                                                                            
Direct Costs              2,556,320     2,387,713      876,660       769,301
                                                                            
Margin after direct                                                         
 costs      
              3,024,404     3,228,567    1,030,746     1,105,196
                                                                            
Earnings before                                                             
 interest, taxes and                                                        
 amortization (EBITDA)      591,133       933,387      238,591       372,122
                                                                            
Income (loss) before                                                        
 deferred income tax        108,114       416,877       80,523       200,064
                                                                            
Net income (loss)           (98,458)      287,241       34,107       224,327
                                                                            
Comprehensive income                                                        
 (loss)                    (175,007)      404,032      (40,790)      411,338
                                                                            
Basic net income (loss)                                                     
 per share                $ (0.0025)     $ 0.0073     $ 0.0009      $ 0.0057
Fully diluted net                                                           
 income (loss) per                                                          
 share                    $ (0.0025)     $ 0.0073     $ 0.0009      $ 0.0057
                                                                            
Weighted average number                                                     
 of common shares                                                           
Basic                    39,298,438    39,298,438   39,298,438    39,298,438
Diluted                  39,298,438    39,298,438   39,298,438    39,298,438
                                                                            
XSellerator                                                                 
 installations - in the                                                     
 period                          16            15            4             3
XSellerator active                                                          
 dealership rooftops            267           250          267           250
----------------------------------------------------------------------------
 
                            Q2 Ended      Q2 Ended    Q1 Ended     Q1 Ended 
                            June 30,      June 30,   March 31,    March 31, 
                                2012          2011        2012         2011 
----------------------------------------------------------------------------
Gross revenue             $1,831,132    $1,829,515  $1,842,186   $1,912,268 
                                                                            
Direct Costs                 850,670       770,837     828,990      847,575 
                                                                            
Margin after direct                                                         
 costs                       980,462     1,058,678   1,013,196    1,064,693 
                                                                            
Earnings before                                                             
 interest, taxes and                                                        
 amortization (EBITDA)       226,086       238,508     126,456      322,757 
                                                                            
Income (loss) before                                                        
 deferred income tax          65,027        62,603     (37,436)     154,210 
                                                                            
Net income (loss)            (80,311)      110,638     (52,254)     (47,724)
                                                                            
Comprehensive income                                                        
 (loss)                      (41,613)       92,871     (92,604)    (100,177)
                                                                            
Basic net income (loss)                                                     
 per share                 $ (0.0020)     $ 0.0028   $ (0.0013)   $ (0.0012)
Fully diluted net                                                           
 income (loss) per                                                          
 share                     $ (0.0020)     $ 0.0028   $ (0.0013)   $ (0.0012)
                                                                            
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                            6             6           6            6 
XSellerator active                                                          
 dealership rooftops             263           249         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 uncert
ainties, 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 September 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. 
The TSX Venture Exchange does not accept responsibility for the
adequacy or accuracy of this release. 
Contacts:
Quorum Information Technologies Inc.
Maury Marks
403-777-0036 ext 104
MarksM@QuorumDMS.com
www.QuorumDMS.com