Mr. Maury Marks reports

QUORUM RELEASES Q1 FISCAL YEAR 2015 RESULTS

Quorum Information Technologies Inc. has released its fiscal 2015 first quarter 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 Corp. 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 chief executive officer made the following remarks about the company's fiscal 2015 first quarter operational and financial results.

Operational results highlights for the first quarter of fiscal 2015 are as follows:

• Quorum continues to enhance two important areas of its software and the company now tracks key dealership utilization metrics related to these areas in a dealership success scorecard:
  • Communicator features text, e-mail and instant message functionality that is integrated into the Xsellerator workflow. Data on Communicator's recent usage is as follows.
  • The Make More Money (M3) initiative focuses on 10 Xsellerator processes that drive incremental revenue into the company's dealership customers' operations. Data from the vehicle inspection process (VIP), which is just one of the 10 M3 processes, is shown as follows.

Dealership success scorecard

Communicator dealerships trained:  148

Messages in April, 2015:  256,782 (11,672 per day)

Percentage of Quorum's customers:  51 per cent

Year-over-year message growth:  366 per cent

M3 (VIP only) dealerships trained:  47

Percenage of Quorum's customers:  16 per cent

Total April, 2015, incremental customer pay revenue:  $3,190,262

Year-over-year revenue growth:  226 per cent

April, 2015, average incremental customer pay revenue:  $67,878 per dealership

• 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 eight dealerships, and associated usage statistics will be added to the dealership success scorecard later in 2015.
• Key customer metrics are as follows:
  • A customer satisfaction index (CSI) semi-annual survey in the first quarter of fiscal 2015 showed an average of 81 per cent of dealer principals as satisfied or very satisfied and an average of 94 per cent of end-users as satisfied or very satisfied over all. An additional 19 per cent of dealer principals and 6 per cent of end-users reported somewhat satisfied. The company's survey in the first quarter of fiscal 2014 reported satisfied or very satisfied comparative numbers of 89 per cent for dealer principals and 81 per cent for end-users.
  • Quorum's monthly support centre CSI survey continues to report an average of approximately 95 per cent very satisfied with the service received from the company's support team.

Financial results highlights for the first quarter of fiscal 2015 are as follows:

• Sales increased by 10 per cent to $2.43-million in the first quarter of fiscal 2015 from $2,202,000 in the first quarter of fiscal 2014. The increase in sales is largely due to:
  • An increase of $129,000 in recurring support revenue as a result from having more active dealership rooftops at the end of the first quarter of fiscal 2015 compared with the end of the first quarter of fiscal 2014;
  • An increase of $93,000 in support plus revenue, which is largely due to higher training revenues;
  • An increase of $141,000 in net new revenue, which was a result of completing more installations in the first quarter of fiscal 2015 as compared with the first quarter of fiscal 2014;
  • A decrease of $127,000 in transition revenue (server and operating system upgrades) from converting the company's customers to the new Microsoft Windows and SQL Server 2012 products.
• Margin after direct costs increased by $120,000 to $1,408,000 in the first quarter of fiscal 2015, as compared with $1,288,000 in the first quarter of fiscal 2014, a 9-per-cent increase.
• Earnings before interest, taxes, depreciation, amortization, foreign exchange gains and losses and stock-based compensation (EBITDA) decreased by $3,000 to $375,000 in the first quarter of fiscal 2015 from $378,000 in the first quarter of fiscal 2014. Increased margin after direct costs was offset by:
  • Larger salaries and benefit expenses due to increased staffing levels;
  • Larger sales and marketing expenses due to the expansion of Quorum's booth at the National Automobile Dealers Association (NADA) convention.
• Income before deferred income tax expense decreased by $25,000 to $143,000 in the first quarter of fiscal 2015 compared with $168,000 in the first quarter of fiscal 2014.
• Quorum had comprehensive income of $214,000 in the first quarter of fiscal 2015 compared with $137,000 in the first quarter of fiscal 2014. The improvement is largely due to an increase in foreign exchange gain offset by an increase in deferred taxes.
• Net working capital at March 31, 2015, was $1,932,469 with a current ratio of 2.55, compared with $1,922,518 at Dec. 31, 2014, with a current ratio of 2.69.

The corporation had another strong growth quarter with sales rising by 10 per cent. Sales growth came from more net new installs, increased recurring support revenues and higher support plus training revenue. Quorum has seen six consecutive quarters of significant revenue growth (over the prior-year quarters), and the company continues to increase its staffing levels in anticipation of future growth. The company's strategy to focus on product innovations, improving product utilization and superior levels of customer service, has increased the market demand for its product and services.

Quorum has filed its fiscal 2015 first quarter consolidated financial statements and notes thereto as at and for the period ended March 31, 2015, and accompanying management 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 and Quorum's website.

                             FINANCIAL HIGHLIGHTS
                                                                            
                                                 Three months   Three months
                                                  ended March    ended March
                                                     31, 2015       31, 2014

Gross revenue                                    $  2,430,307   $  2,202,327
Direct costs                                        1,022,070        914,596
Margin after direct costs                           1,408,237      1,287,731
Earnings before interest, taxes, 
depreciation and amortization (EBITDA)                374,960        378,117
Income before deferred income tax expense             143,101        168,464
Net income (loss)                                      (5,648)        82,221
Comprehensive income                                  213,670        136,579
Basic income (loss) per share                    $    (0.0001)  $     0.0021
Fully diluted income (loss) per share            $    (0.0001)  $     0.0021

We seek Safe Harbor.