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

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Presentation on theme: "Corporate Overview June 2009 – Confidential. Quorum Confidential 2 Company Overview Highlights Supply automotive software to dealerships throughout North."— Presentation transcript:

1 Corporate Overview June 2009 – Confidential

2 Quorum Confidential 2 Company Overview Highlights Supply 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 Focus Exclusively Automotive Retail, North America. 85 % of customers are GM Dealerships (accounts for 90% + revenue)

3 Quorum Confidential 3 Navigating a Difficult Environment Car Sales and Dealership News Car Sales Decline 2009 10 million SAAR 2008 13.2 million 2007 16.1 million GM US Entered Bankruptcy - June 1 st Dealership Closures GM 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 10 th

4 Quorum Confidential 4 Navigating a Difficult Environment Dealership News – Impact to Quorum Dealership Closures – 225 Quorum dealership rooftops IndustryQuorum GM US 6200 down to 3600 – 42%- 16% GM Canada700 down to 400 – 42%- 26% Dealers will not have their Oct 2010 franchise agreement renewed 85% of Quorum’s customers are GM; however, 90% of our dealerships are effected by GM closures Estimate that at least 60% of our GM dealerships that are losing their franchise should stay in business Net effect to Quorum – likely to lose 10% of our customer base over the next 18 months

5 Quorum Confidential 5 Navigating a Difficult Environment GM Bankruptcy – Impact to Quorum GM 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 4 th Quorum IDMS Contract Assigned to New GM – June 18 th Quorum should have no interruption in GM payments

6 6 Q2 09Q3 09Q4 09Q1 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 Strategy Quorum Confidential

7 7 Cost 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 Structure Recent layoffs Continual improvement - Find 50 & Business Transformation eResearch 12-month valuation - price range of $0.20 to $0.37 Quorum’s valuation is severely impacted by GM

8 Forecast 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) 200620072008Q12009 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%

9 Quorum Confidential 9


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