Corporate Overview June 2009 – Confidential. Quorum Confidential 2 Company Overview Highlights...

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Corporate Overview June 2009 – Confidential

Transcript of Corporate Overview June 2009 – Confidential. Quorum Confidential 2 Company Overview Highlights...

Page 1: Corporate Overview June 2009 – Confidential. Quorum Confidential 2 Company Overview Highlights Supply automotive software to dealerships throughout North.

Corporate OverviewCorporate Overview

June 2009 – Confidential

Page 2: Corporate Overview June 2009 – Confidential. Quorum Confidential 2 Company Overview Highlights Supply automotive software to dealerships throughout North.

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Company OverviewCompany Overview

HighlightsSupply automotive software to dealerships throughout North America.Third largest supplier of Dealership Management Systems to GM dealerships in Canada.Selected as the new technology choice under GM’s Integrated Dealer Management Systems (IDMS) initiative in North America.Microsoft Strategic Partner for North American automotive (MS - Gold Certified and ISV-Managed Partner).Currently supported OEM integration: all GM franchises, Chrysler, Isuzu MD, Hyundai Canada and Kia Canada.

Market FocusExclusively Automotive Retail, North America.85 % of customers are GM Dealerships (accounts for 90% + revenue)

Page 3: Corporate Overview June 2009 – Confidential. Quorum Confidential 2 Company Overview Highlights Supply automotive software to dealerships throughout North.

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Navigating a Difficult EnvironmentNavigating a Difficult Environment

Car Sales and Dealership News Car Sales Decline

2009 10 million SAAR 2008 13.2 million2007 16.1 million

GM US Entered Bankruptcy - June 1st

Dealership ClosuresGM US 6200 down to 3600 – 42%GM Canada 700 down to 400 – 42%Chrysler US 3600 down to 2800 – 25%Chrysler Canada Unknown

Chrysler Exits Bankruptcy in 42 days – June 10th

Page 4: Corporate Overview June 2009 – Confidential. Quorum Confidential 2 Company Overview Highlights Supply automotive software to dealerships throughout North.

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Navigating a Difficult EnvironmentNavigating a Difficult Environment

Dealership News – Impact to QuorumDealership Closures – 225 Quorum dealership rooftops

Industry Quorum

GM US 6200 down to 3600 – 42% - 16%GM Canada 700 down to 400 – 42% - 26%

Dealers will not have their Oct 2010 franchise agreement renewed85% of Quorum’s customers are GM; however, 90% of our dealerships are effected by GM closuresEstimate that at least 60% of our GM dealerships that are losing their franchise should stay in businessNet effect to Quorum – likely to lose 10% of our customer base over the next 18 months

Page 5: Corporate Overview June 2009 – Confidential. Quorum Confidential 2 Company Overview Highlights Supply automotive software to dealerships throughout North.

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Navigating a Difficult EnvironmentNavigating a Difficult Environment

GM Bankruptcy – Impact to QuorumGM US in Chapter 11

GM Canada not in bankruptcy

75% of Quorum support revenue from Canada

Under Chapter 11 – typically don’t get paid for open AR

Quorum has two GM Revenue Streams – BARS and Integration

Quorum named Essential Supplier – June 4th

Quorum IDMS Contract Assigned to New GM – June 18th

Quorum should have no interruption in GM payments

Page 6: Corporate Overview June 2009 – Confidential. Quorum Confidential 2 Company Overview Highlights Supply automotive software to dealerships throughout North.

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Q2 09 Q3 09 Q4 09 Q1 10

Aggressive Lower Pricing to Primary GM Market

“Blitz” Hyundai Canada Market

Independent Dealer Market (“new breed”)

Small Add-On OEMs

Adjacent (RV, marine, etc.)

Chrysler US (Tentative)

Chrysler Canada (Tentative)

Reduction in monthly support requirements and aggressive marketing to GM dealers – direct price leader competition

Direct marketing to all Canadian Hyundai dealers with existing product (continue to pursue addt’l integration oppty)

Specifically target former new car dealers – some small product changes

Ability to handle secondary franchises

Position product for non-Auto (TENTATIVE)

Complete “usability” of existing integration, market to surviving Chrysler US dealers

Add parts file and file select Canadian dealers – need certification

High Level Market StrategyHigh Level Market Strategy

Quorum Confidential

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Cost StructureCost Structure

Atlantic Canada Opportunities Agency (ACOA)$0.5 million unsecured, interest free loan agreement

Continue to grow St. John’s office (currently 55% of our staff)

Cost StructureRecent layoffs

Continual improvement - Find 50 & Business Transformation

eResearch12-month valuation - price range of $0.20 to $0.37

Quorum’s valuation is severely impacted by GM

Page 8: Corporate Overview June 2009 – Confidential. Quorum Confidential 2 Company Overview Highlights Supply automotive software to dealerships throughout North.

ForecastForecast

Notes: - Integration / Services in 2006 includes $1.1 Million in one-time Palm Revenue - Dramatic Improvement in EBITDA - Higher margin support revenue drives EBITDA

Sales($ Millions)

2006 2007 2008 Q1 2009

Installs / Migrations $3.3 $3.4 $2.4 $0.3 $1.0

Support $2.8 $4.3 $5.5 $1.4 $5.5

Integration / Services $1.3 $0.5 $0.6 $0.2 $0.9

Total Sales $7.4 $8.2 $8.5 $1.9 $7.4

EBITDA ($) -$3.7 - $1.1 - $0.0 $0.4 $1.2

EBITDA (%) -50% -18% 0% 20% 16%

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