Sales Increase by 17% Over FY2014 Results

/EINPresswire.com/ -- CALGARY, ALBERTA -- (Marketwired) -- 04/25/16 -- Quorum Information Technologies Inc. ("Quorum" or the "Company") (TSX VENTURE: QIS) today released its Fiscal Year (FY) 2015 results. Quorum delivers its dealership management system (DMS), XSELLERATOR™, and related services to General Motors, Chrysler, Ford, Toyota, Hyundai, Kia, Nissan, Subaru, NAPA and Bumper to Bumper franchised dealership customers as well as some non-automotive dealerships throughout North America.

Maury Marks, Quorum's President and CEO made the following remarks about the Company's FY2015 operational and financial results:

Operational results highlights for FY2015 are as follows:

--  In January FY2016 Quorum completed the successful software conversion
    for Sunset Country Ford in Fort Frances, Ontario. This strategic client
    for Quorum represents an entry into a new market segment. Completion of
    this conversion required months of development and testing in FY2015,
    plus additional implementation resources to ensure a smooth conversion.
--  Quorum continues to enhance three important areas of our software and we
    track key dealership utilization metrics related to these areas in a
    Dealership Success Scorecard:
    --  Communicator features text, email and instant message functionality
        that is integrated into the XSELLERATOR workflow. Aggregate data on
        Communicator's recent usage is shown below.
    --  Make More Money ("M3") is an initiative which focuses on ten
        XSELLERATOR processes that drive incremental revenue into our
        dealership customers' operations. Aggregate data from the Vehicle
        Inspection Process ("VIP"), which is just one of the ten M3
        processes, is shown below.
    --  Sales CRM - Quorum continues to make significant enhancements to
        sales Customer Relationship Management (CRM) features within
        XSELLERATOR. Additional usage statistics will be included to the
        Dealership Success Scorecard early in 2016.

Dealership Success Scorecard(1)
----------------------------------------------------------------------------
Communicator - Dealerships utilizing Communicator: 182
Messages in FY2015: 3,260,903
Year over year message growth: 270%

M3 (VIP only) - Dealerships utilizing VIP: 83
Total FY2015 incremental Customer Pay revenue: $51,115,825
Year over year revenue growth: 190%

Sales CRM - Dealerships trained: 30
Total # of dealerships that have moved away from 3rd party CRM systems: 9
----------------------------------------------------------------------------

--  Key customer metrics are as follows:
    --  Customer Satisfaction Index ("CSI") semi-annual survey in Q3 FY2015
        showed an average of 82% of dealer principals as "satisfied" or
        "very satisfied" and an average of 85% of end users as "satisfied"
        or "very satisfied" overall. Our survey in Q1 FY2015 reported
        "satisfied" or "very satisfied" comparative numbers of 81% for
        dealer principals and 94% for end users. Our survey in Q1 FY2014
        reported "satisfied" or "very satisfied" comparative numbers of 89%
        for dealer principals and 81% for end users. In all three surveys in
        the last two years almost all the remaining respondents reported as
        "somewhat satisfied". Any dealer principals or end users that report
        as dissatisfied are immediately followed-up on by our support teams.
    --  Our monthly Support Center CSI survey continues to report an average
        of approximately 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).
--  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 FY2015 are as follows:

--  Revenue increased by 17% to $10,744K in FY2015 from $9,216K in FY2014.
    The increase in sales is due to:
    --  An increase of $870K in recurring support revenue as a result of
        having more active dealership rooftops at the end of FY2015 compared
        to the end of FY2014;
    --  An increase of $565K in support plus revenue, which is add on sales
        to existing customers due to an increase in training revenue;
    --  An increase of $306K in new installation revenue, previously
        referred to as net new revenue, which was a result of completing
        more installations in FY2015 as compared to FY2014; and
    --  A decrease of $203K in transitions revenue (server and operating
        system upgrades) from converting our customers to the new Microsoft
        Windows and SQL Server 2012 products.
--  Margin after direct costs increased to $5,571K in FY2015, from $5,018K
    in FY2014, an 11% increase. Margin increased 11% compared to a 17%
    increase in revenue due to:
    --  Increased salaries and benefits from the addition of employees
        required to meet the Corporation's future business plan.
    --  Significantly higher third party costs due to:
        1.  Increased new implementation revenue in FY2015. This revenue
            stream has a higher cost of goods sold and lower margin compared
            to recurring support revenue.
        2.  An increase in the foreign exchange rate which resulted in
            higher hardware and software license costs. Many of the licenses
            required for transitions and new installations are purchased in
            US dollars and this has had a substantial impact on third party
            costs.
--  Earnings before interest, taxes, depreciation and amortization (EBITDA)
    increased to $1,716K in FY2015 from $1,476K in FY2014. Increased margin
    after direct costs was offset by:
    --  Larger salaries and benefits expense due to increased staffing
        levels.
    --  Increased sales and marketing costs due to a larger presence at the
        National Automobile Dealers Association (NADA) trade show in order
        to capitalize on the momentum we have created in the market from our
        investments in new OEM integration, M3 and Communicator..
    --  Lower general and administrative expense due to lower office rental
        cost because the Company signed a new lease for the Calgary office.
--  Income before deferred income tax expense increased to $594K for FY2015
    compared to $502K in FY2014.
--  Comprehensive income increased to $710K in FY2015 compared with $309K in
    FY2014 largely due to a $168K lower deferred income tax expense and a
    $142K higher foreign exchange gain.
--  Working capital increased to $5,129K at December 31, 2015 compared to
    $1,923K at December 31, 2014, an increase of $3,206K largely due to an
    increase in cash of $3,291K. The increase in cash is due to:
    --  The Corporation receiving $3,044K through the issuance of shares,
        net of share issue costs, from a non-brokered private placement to
        strategic investors and $25K from the exercise of stock options.
    --  Cash Flow from operating activities of $1,713K that was offset by an
        investment in our software product and purchase of equipment of
        $1,437K. The $276K net operating cash flow was further increased by
        $33K in SR&ED receipts and offset by $87K of long-term debt
        repayment to reduce the long-term debt outstanding to $166K at
        December 31, 2015.

In February FY2016 Quorum was ranked on the 2016 TSX Venture 50© list. Quorum was listed as one of the top 10 companies in the technology sector based on the criteria of market capitalization growth, share price appreciation and trading volume.

This award really belongs to our employees, whose innovation and dedication allowed us to execute on our business plan and post record revenues. The award also belongs to our investors, board members and partners for their continued support and belief in our technology solutions and market vision.

Quorum has filed its 2015 consolidated financial statements and notes thereto as at and for the period ended December 31, 2014 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,
                                          2015           2014           2013
----------------------------------------------------------------------------

Gross revenue                     $ 10,744,478    $ 9,215,768    $ 7,986,772

Direct costs                         5,173,396      4,197,747      3,499,641

Margin after direct costs            5,571,082      5,018,021      4,487,131

Earnings before interest,
 taxes, depreciation and             1,716,184      1,476,110      1,254,890
 amortization (EBITDA)
Income before deferred income
 tax                                   593,586        502,087        470,924

Net income                             451,714        192,516        294,686

Comprehensive income                   709,727        308,761        409,402

Basic net income per share            $ 0.0107       $ 0.0046       $ 0.0075
Fully diluted net income per          $ 0.0107       $ 0.0046       $ 0.0075
 share

Weighted average number of
 common shares
  Basic                             42,318,803     41,529,838     39,298,438
  Diluted                           42,318,803     41,818,297     39,298,438

About Quorum

Quorum is a North American company focused on developing, marketing, implementing and supporting its XSELLERATOR product for GM, Chrysler, Ford, Toyota, 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, 2015. 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.

(1) The numbers and dollar figures included in the Dealership Success Scorecard are based on dealership results.

Contacts:
Quorum Information Technologies Inc.
Maury Marks
403-777-0036 ext 104
MarksM@QuorumDMS.com