OTTAWA, Nov. 6 /CNW Telbec/ - In-Touch Survey Systems Ltd. ("In-Touch" TSX-Venture: INX) is pleased to announce that revenue increased 48% to $1,413,081 in Q3 2007 compared to $925,479 in Q3 2006. Net income increased significantly to $164,749 compared to a net income of $1,037 in Q3 2006. Cash flow from operations (adjusted EBITDA - see detailed financials) increased 227% to $295,000 in Q3 2007 compared to $94,000 in Q3 2006. The Q3 FY 2007 gross margin was 59% (58% YTD 2007) compared to 64% for Q3 (61% YTD 2006). Management is encouraged with the fiscal performance, given the lower margins, and anticipates margins moving back to historical levels in the future.
Q4 revenues are typically lower than previous quarters as In-Touch customers' focus on the annual holiday sales cycle. Management expects Q4 Revenue in the range of $1.25 million to $1.4 million CDN and expectations for FY 2007 revenue in the range of $4.8 million and $5.0 million. Revenues are also expected to grow 40% in fiscal 2008.
"New US-based customers were a major reason for the strong sales growth. These customers provide a significant opportunity for In-Touch to grow sales over the next few years. Becoming a major supplier to these Fortune 50 customers also validates our investment in our software and hardware technology," said Michael Gaffney, Chief Executive Officer.
"Over the past three years, we have significantly changed the strategy of the company from being just a market research company to a software and hardware solutions company that provides products directly to the marketing and operations divisions of Fortune 1000 business to consumer companies. Our customers want more than just market research. We provide our customers with highly secure real-time data collection along with one-to-one marketing capabilities, a robust real-time reporting system and digital signage capabilities. We continue to enhance our software technology and services by adding user friendly, leading edge, business intelligence tools for managers and executives - helping our customers sell to their customers," said Gaffney.
Consolidated statements
of comprehensive
earnings
Three months ended Three months to Nine Months to
September 30, 2007 September 30 September 30
and 2006 (unaudited) 2007 2006 2007 2006
Revenue $ 1,413,081 $ 956,307 $ 3,606,155 $ 2,769,109
Cost of goods sold 579,213 348,955 1,499,066 1,081,132
----------------------- -------------------------
Gross profit 833,868 607,352 2,107,089 1,687,977
Total operating
expenses 634,318 579,294 1,945,991 1,601,629
----------------------- -------------------------
Earnings before
undernoted items 199,550 28,058 161,098 86,348
Interest expense (28,378) (11,201) (79,855) (33,045)
Amortization of
discount on
promissory note (13,335) (10,211) (37,479) (27,128)
Amortization of
intangible asset (4,761) (4,761) (14,283) (14,179)
Loss on foreign
exchange (4,650) -848 (17,621) (4,657)
Gain on disposal of
assets 16,323 - 32,098 -
----------------------- -------------------------
Net comprehensive
earnings $ 164,749 $ 1,037 $ 43,958 $ 7,339
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Certain statements included in this news release contain forward looking statements, which by their nature are necessarily subject to risks and uncertainties and other factors that may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such statements reflect the Company's current views with respect to future events, and are based on information currently available to the Company and on hypotheses which it considers to be reasonable; however, management warns the reader that hypotheses relative to future events which are beyond the control of management could prove to be false, given that they are subject to certain risks and uncertainties.
Detailed financial statements and Management's Discussion and Analysis can be found on www.sedar.com.
The TSX Venture Exchange has not reviewed the foregoing and has neither
approved or disapproved the contents of this press release.
%SEDAR: 00007687E