OTTAWA, May 30 /CNW Telbec/ - In-Touch Survey Systems Ltd. ("In-Touch" TSX-Venture: INX) is pleased to announce that revenue increased 21% to $1,159,999 in Q1 2008 compared to $961,238 in Q1 2007. Net loss increased to $240,806 compared to a net loss of $95,589 in Q1 2007. Cash flow from operations (adjusted EBITDA - see detailed financials) decreased to $(80,000) in Q1 2008 compared to $39,000 in Q1 2007. The Q1 FY 2008 gross margin was 57% compared to 59% for Q1 2007.
"While we achieved significant sales growth, compared to the same quarter last year, sales growth was lower than expected due to a major US customer delaying its purchases. We had ramped expenses with the understanding that this customer would begin purchases in Q1 but have since pulled back on these costs which will not reappear in Q2 2008. This customer, one of the largest financial institutions in the United States, continues to purchase at reduced levels. We are pleased that during the quarter In-Touch completed several software development projects that allow the company to scale significantly without adding employees. The benefits of this technology will be seen in the next quarter with considerably improved margins and fewer employees - at higher revenue levels," said Michael Gaffney, Chief Executive Officer.
"In-Touch is also pleased to announce that the previously announced acquisition of MarketLine Research Corp., of Minneapolis Minnesota, has closed and is expected to make an immediate positive impact. Q2 2008 sales are also expected to be higher than Q2 2007 and that the company will have positive EBITDA and close to positive Net Income," said Gaffney.
2008 2007 2007 2007 2007 2006 2006 2006
Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2
Sales
revenue $1,160 $1,455 $1,413 $1,232 $961 $863 $956 $925
Cost of
services 499 591 579 529 391 418 349 362
Gross
profit 661 864 834 703 570 445 607 563
Total
operating
expenses 895 760 634 694 617 544 579 529
Earnings
(loss)
before
undernoted
items $(234) $104 $200 $9 $(47) ($99) $28 $34
Net
earnings
(loss) $(241) $(269) $165 $(25) $(96) ($153) $1 $5
Calculation
of non-GAAP
earnings
from
operations.
To net
earnings
add:
Interest
expense 26 33 28 22 30 47 11 15
Amorti-
zation 86 150 79 70 58 55 61 55
Change in
fair
value of
derivative 4 60 - - - - - -
Stock-based
compen-
sation and
shares
released
from escrow 45 27 23 23 47 81 21 10
Adjusted
EBITDA $(80) $1 $295 $90 $39 $30 $94 $85
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