Quorum Releases FY2014 Annual Results

CALGARY, ALBERTA -- (Marketwired) -- 04/20/15 -- Quorum Information Technologies Inc. ("Quorum" or the "Company") (TSX VENTURE: QIS) today released its Fiscal Year (FY) 2014 results. Quorum delivers its dealership management system (DMS), XSellerator", 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 as well as other franchised, independent and some non-automotive dealerships.

Maury Marks, Quorum's President and CEO made the following remarks about the Company's FY2014 operational and financial results:

Operational results highlights for FY2014 are as follows:

--  During FY2014 Quorum completed the successful software conversion for
    Sean Sargent Toyota in Grand Prairie, Alberta. This strategic client for
    Quorum represents an entry into a new market segment. Completion of this
    conversion required months of development and testing, plus additional
    implementation resources to ensure a smooth conversion.
--  Quorum continues to enhance the two following areas of our software and
    now tracks key dealership utilization metrics related to these areas in
    the Dealership Success Scorecard:
    --  Communicator features text, email and instant message functionality
        that is integrated into the XSellerator workflow. Data on
        Communicator's usage is shown below.
    --  Make More Money ("M3") initiative which focuses on ten XSellerator
        processes that drive incremental revenue into our dealership
        customers' operations. The data from the vehicle inspection process
        ("VIP") which is one of the ten M3 processes is shown below.

Dealership Success Scorecard

Communicator - Dealerships trained: 138      % of our customers: 48%
Messages in Feb 2015: 187,840 (9,292 per     Year over year message growth:
day)                                         340%

M3 (VIP only) - Dealerships trained: 41      % of our customers: 14%

Total Feb 2015 incremental CP revenue: $2,499,235 Year over year revenue growth: 215%

Feb 2015 average incremental customer pay (CP) revenue: $60,957 per dealership

--  During FY2014 Quorum made some significant enhancements to its sales
    customer relationship management (CRM) features. The sales CRM process
    is currently in pilot with eight dealerships and will be added to the
    Dealership Success Scorecard in 2015.
--  Key customer metrics are as follows:
    --  Customer Satisfaction Index ("CSI") semi-annual survey in Q1 FY2015
        showed an average of 81% of dealer principals as "satisfied" or
        "very satisfied" and an average of 94% of end users as "satisfied"
        or "very satisfied" overall. 19% of dealer principals and 6% of end
        users reported "somewhat satisfied". Our survey in Q1 FY2014
        reported "satisfied" or "very satisfied" comparative numbers of 89%
        for dealer principals and 81% for end users.
    --  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 72% 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 FY2014 are as follows:

--  Sales increased by 15% to $9,216K in FY2014 from $7,987K in FY2013 and
    margin after direct costs increased to $5,018K in FY2014, from $4,487K
    in FY2013, a 12% increase. The increase in sales is due to:
    --  An increase of $193K in recurring support revenue as a result from
        having more active dealership rooftops at the end of FY2014 compared
        to the end of FY2013;
    --  An increase of $129K in support plus revenue;
    --  A decrease in integration revenue of $63K because Quorum does not
        receive paid integration work under the new GM DTAP program;
    --  An increase of $297K in net new revenue which was a result of
        completing more installations in FY2014 as compared to FY2013; and
    --  An increase of $673K 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 only increased 12% compared to sales increases
    of 15% because of increases in the lower margin net new and transition
    revenues. Both of these revenue streams have a higher cost of goods sold
    and a lower margin compared to recurring support and support plus
    revenue.
--  Earnings before interest, taxes, depreciation and amortization (EBITDA)
    increased to $1,476K in FY2014 from $1,255K in FY2013. The $221K
    increase in EBITDA is largely due to a $531K increase in margin after
    direct costs in FY2014 compared to FY2013, offset by a $312K increase in
    salaries and benefits in FY2014. The increase in salaries and benefits
    is due to additional variable compensation and the addition of employees
    required to meet the Corporation's future business plan.
--  Income before deferred income tax expense increased by $31K from $471K
    for FY2013 to $502K for FY2014. The $31K increase is due to the $221K
    EBITDA increase noted above offset by a $108K increase in stock-based
    compensation and an $82K increase in amortization and depreciation.
--  Comprehensive income decreased to $309K in FY2014 compared with $409K in
    FY2013 due to an increase in deferred income tax expense of $133K.
--  Working capital increased to $1,923K at December 31, 2014 compared with
    $1,454K at December 31, 2013 and increase of $468K. Additionally, $109K
    of long term debt was paid off during the year to reduce the long term
    debt outstanding to $223K at December 31, 2014.

Quorum invested significantly in our XSellerator product in 2014 by converting Sean Sargent Toyota and making significant improvements in Communicator, Make More Money and Sales CRM. By leveraging our product innovations, improving product utilization and providing superior levels of customer service we were able to achieve 15% revenue growth for the year. In 2015 we will continue to invest to grow revenues and open up new market opportunities.

Quorum has filed its 2014 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,
                                          2014           2013          2012
----------------------------------------------------------------------------

Gross revenue                      $ 9,215,768    $ 7,986,772   $ 7,566,580

Direct costs                         4,197,747      3,499,641     3,453,317

Margin after direct costs            5,018,021      4,487,131     4,113,263

Earnings before interest,
 taxes, depreciation and
 amortization (EBITDA)               1,476,110      1,254,890       847,906
Income before deferred income
 tax                                   502,087        470,924       188,588

Net income (loss)                      192,516        294,686       (65,237)

Comprehensive income (loss)            308,761        409,402      (118,488)

Basic net income (loss) per
 share                                $ 0.0046        $ 0.008      $ (0.002)
Fully diluted net income (loss)
 per share                            $ 0.0046        $ 0.008      $ (0.002)

Weighted average number of
 common shares
 Basic                              41,529,838     39,298,438    39,298,438
 Diluted                            41,818,297     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, 2014. 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:
Maury Marks
403-777-0036 ext 104
[email protected]

Source: Quorum Information Technologies Inc.

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