Quorum Releases Q2 Fiscal Year 2015 Results

CALGARY, ALBERTA -- (Marketwired) -- 08/17/15 -- Quorum Information Technologies Inc. ("Quorum" or the "Company") (TSX VENTURE: QIS) today released its First Quarter (Q2) Fiscal Year (FY) 2015 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 Q2 FY2015 operational and financial results:

Operational results highlights for Q2 FY2015 are as follows:

--  Quorum continues to enhance two important areas of our software and we
    now 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") 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.

Dealership Success Scorecard(1)

----------------------------------------------------------------------------
Communicator  - Dealerships trained: 164      % of our customers: 54%
-------------
Messages in Q2 FY2015: 858,543                Year over year message growth:
                                               193%

M3 (VIP only) - Dealerships trained: 62       % of our customers: 20%
-------------
Total June 2015 incremental CP revenue:       Year over year revenue growth:
 $4,197,832                                    57%
June 2015 average incremental customer pay (CP) revenue: $67,707 per
 dealership
----------------------------------------------------------------------------

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

--  Quorum continues to make significant enhancements to sales Customer
    Relationship Management (CRM) features within XSELLERATOR. The new
    enhanced sales CRM process is currently in pilot with twelve dealerships
    and associated usage statistics will be added to the Dealership Success
    Scorecard later in 2015.
--  Quorum has entered into agreements with Ford and their DMS integration
    technology partner, Oxlo, to develop a full suite of Ford integration
    and offer its XSELLERATOR dealership and customer management system to
    Ford and Lincoln dealerships. Quorum initially plans to focus on the
    Ford Canadian market and will later offer our DMS to the Ford US market.
--  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. An additional 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.

Financial Results highlights for Q2 FY2015 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 13% to
    $2,706K in Q2 FY2015 from $2,395K in Q2 FY2014. The increase in sales is
    due to:
    --  An increase of $218K in recurring support revenue as a result of
        having more active dealership rooftops at the end of Q2 FY2015 as
        compared to the end of Q2 FY2014;
    --  An increase of $108K in support plus revenue;
    --  A decrease of $26K in net new revenue which was a result of
        completing fewer installations in Q2 FY2015 as compared to Q2
        FY2014; and
    --  An increase of $11K in transitions revenue as compared to Q2 FY2014
        from converting our customers to the new Microsoft Windows and SQL
        Server 2012 Products.
--  Margin after direct costs increased by $109K to $1,540K in Q2 FY2015, as
    compared to $1,431K in Q2 FY2014, a 8% increase.
--  Earnings before interest, taxes, depreciation, amortization, stock-based
    compensation and foreign exchange (EBITDA) increased by $174K to $605K
    in Q2 FY2015 from $431K in Q2 FY2014. Increased margin after direct
    costs was offset by larger salaries and benefits expense due to
    increased staffing levels. General & administrative expense decreased
    due to a decrease in rental expense.
--  Income before deferred income tax expense increased by $156K to $370K in
    Q2 FY2015 from $214K in Q2 FY2014.
--  Quorum had comprehensive income of $282K in Q2 FY2015 compared to a loss
    of $60K in Q2 FY2014. The improvement is largely due to the above-
    mentioned EBITDA increase of $174K as well as a $234K decrease in
    deferred taxes, offset by a $47K increase in foreign exchange loss.
--  Net working capital at June 30, 2015 was $2,095K with a current ratio of
    2.76, compared to $1,923K at December 31, 2014, with a current ratio of
    2.69, an increase of $172K.

The Corporation had its strongest growth quarter to date with sales rising by 13%. Sales growth came from more net new installs, increased recurring support revenues and higher support plus training revenue. Quorum has seen seven consecutive quarters of significant revenue growth (over the prior year quarters) and we continue to increase our staffing levels in anticipation of future growth. Our strategy to focus on product innovations, improving product utilization and superior levels of customer service has increased the market demand for our product and services.

Quorum has filed its Q2 2015 consolidated financial statements and notes thereto as at and for the period ended June 30, 2015 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

                                   Six Months     Six Months
                                        Ended          Ended       Q2 Ended
                                June 30, 2015  June 30, 2014  June 30, 2015
----------------------------------------------------------------------------

Gross revenue                      $5,136,234     $4,597,773     $2,705,927
Direct costs
                                    2,188,305      1,879,206      1,116,235

Margin after direct costs           2,947,929      2,718,567      1,539,692

Earnings before interest,
 taxes, depreciation and
 amortization (EBITDA)                980,322        808,687        605,362
Income before deferred income
 tax expense
                                      512,683        382,187        369,582
Net income (loss)
                                      387,876         85,699        393,524

Comprehensive income (loss)           495,956         76,083        282,286

Basic income (loss) per share        $ 0.0093       $ 0.0021       $ 0.0095
Fully diluted income (loss) per
 share                               $ 0.0093       $ 0.0020       $ 0.0094

Weighted average number of
 common shares
  Basic                            41,614,361     40,137,138     41,614,361
  Diluted                          41,818,297     42,232,997     41,818,297

----------------------------------------------------------------------------



                                     Q2 Ended       Q1 Ended       Q1 Ended
                                June 30, 2014 March 31, 2015 March 31, 2014
----------------------------------------------------------------------------

Gross revenue                      $2,395,446     $2,430,307     $2,202,327
Direct costs
                                      964,610      1,022,070        914,596

Margin after direct costs           1,430,836      1,408,237      1,287,731

Earnings before interest,
 taxes, depreciation and
 amortization (EBITDA)                430,570        374,960        378,117
Income before deferred income
 tax expense
                                      213,723        143,101        168,464
Net income (loss)
                                        3,478         (5,648)        82,221

Comprehensive income (loss)           (60,496)       213,670        136,579

Basic income (loss) per share        $ 0.0001      $ (0.0001)      $ 0.0021
Fully diluted income (loss) per
 share                               $ 0.0001      $ (0.0001)      $ 0.0021

Weighted average number of
 common shares
  Basic                            40,137,138     41,532,538     39,298,438
  Diluted                          42,292,997     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, 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 period ended June 30, 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.

Contacts:
Quorum Information Technologies Inc.
Maury Marks
403-777-0036 ext 104
[email protected]

Source: Quorum Information Technologies Inc.

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