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