OTTAWA, Nov. 17 /CNW Telbec/ -- In-Touch Survey Systems Ltd. ("In-Touch" TSX-Venture: INX) is pleased to announce a net profit for Q3. Although revenue decreased by 22% to $1,324,784 in Q3 2009 compared to $1,695,019 in Q3 2008 the Company recorded a net profit of $37,633 for Q3 2009.
The strength of the Canadian dollar caused a foreign exchange loss of $15,915 in Q3 2009 compared to a gain of $7,639 in Q3 2008. The higher Canadian dollar also negatively affects revenues for the Canadian invoicing to U.S. clients. Market Research revenues were also not as high as expected.
Cash flow from operations (adjusted EBITDA - see details in MD&A) was $158,000 in Q3 2009 compared to $296,000 in Q3 2008. The Q3 2009 gross margin was 64% compared to 69% in Q3 2008.
"We previously announced that customers had cancelled over $1.3 million in orders, approximately 20% of 2008 revenues, early in the year following the collapse of the financial markets. While Q3 2009 revenues are down compared to 2008 I am very proud of the In-Touch team given that we will end the year within 5% of 2008 revenues and with a much improved cost structure. We almost replaced the cancelled revenue with new orders from three major US companies (Insurance, Auto, Telecommunications), one major Canadian company (Grocery) and several other new clients. Given the state of the economy this is a major achievement," said Michael Gaffney, Chief Executive Officer.
"Another positive outcome was the ongoing development of our software technology which improved our scalability and will become a SaaS product in its own right in 2010," said Gaffney.
Consolidated Statements of Operations Q3 2009 Q3 2008
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Revenue $ 1,324,784 $ 1,695,019
Cost of services and goods sold 477,647 533,141
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Gross profit 847,137 1,161,878
Total operating expenses 746,649 939,418
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Earnings (loss) before undernoted items 100,488 222,460
Interest expense (41,748) (27,259)
Amortization of financing costs (2,670) (4,645)
Amortization of discount on promissory note - (17,417)
Amortization of intangible asset (2,522) (35,655)
Gain (loss) on foreign exchange (15,915) 7,639
Gain on disposal of property and equipment - 2,603
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Net income $ 37,633 $ 147,726
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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.
The TSX Venture Exchange has not reviewed the foregoing and has neither
approved or disapproved the contents of this press release.
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