OTTAWA, Nov. 26 /CNW Telbec/ - In-Touch Survey Systems Ltd. ("In-Touch" TSX-Venture: INX) is pleased to announce that revenue increased 20% to $1,695,019 in Q3 2008 compared to $1,413,081 in Q3 2007. Net income was $149,536 compared to a net income of $164,749 in Q3 2007. Cash flow from operations (adjusted EBITDA - see chart below) increased to $296,347 in Q3 2008 compared to $295,000 in Q3 2007. Gross margin increased significantly to 68.5% compared to 59% for Q3 2007.
"Given the current economic environment, we are pleased with our sales and financial performance in Q3. The acquisitions of MarketLine of Minneapolis and NCI Mobility of Chicago have added significant market presence and core competence in key US markets and have contributed to this revenue growth. ", said Michael Gaffney, Chief Executive Officer.
"Our financial performance should be viewed in the context of our investments in Chicago and Minneapolis for sales growth and operational capacity. Our continued goal is to increase our overall revenue through acquisition and internal growth while at the same time maintaining positive net income and EBITDA. We expect revenue in Q4 2008 to exceed Q3 2008", said Gaffney
2008 revenues are expected to be in the range of $5.95-$6.1 million - approximately a 19% increase over 2007 revenues of $5,060,576.
The global economic environment may challenge the company to maintain revenue growth in 2009 even though In-Touch continues to see strong demand for its products with requests for proposals. The company signed two large new customers in the months of September and October - a large European automaker and a major Canadian retailer. These two new customers will add approximately $800,000 in revenue over the next twelve months. However, the Company cautions that over 30% of its 2008 revenues came from major automobile manufacturers in the US and Canada. While these automakers have indicated their satisfaction with In-Touch and the value that In-Touch products and services bring to their operations, and have indicated that they plan to continue purchasing from In-Touch, the company believes that it is prudent to forecast a decrease in revenue from these automakers in fiscal year 2009 and is planning accordingly.
The following chart shows highlights of quarterly operating results over
the past 8 quarters. Some accounts have been left out. For the complete
chart please see page 5 of the Company's Q3 2008 Management's Discussion
and Analysis of Financial Conditions & Results of Operations available
on-line at www.sedar.com.
(000,s) 2008 2008 2008 2007 2007 2007 2007 2006
Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4
Sales
revenue $1,695 $1,313 $1,160 $1,455 $1,413 $1,232 $961 $863
Cost of
services 533 474 499 591 579 529 391 418
Gross
profit 1,162 839 661 864 834 703 570 445
Total
operating
expenses 940 913 895 760 634 694 617 544
Earnings
(loss)
before
undernoted
items $222 $(74) $(234) $104 $200 $9 $(47) ($99)
Net earnings
(loss) $149 $(86) $(241) $(269) $165 $(25) $(96) ($153)
Calculation
of non-GAAP
earnings
from
operations.
To net
earnings
add:
Interest
expense 27 20 26 33 28 22 30 47
Amortization 111 105 86 150 79 70 58 55
Change
in fair
value of
derivative (44) 4 60 - - - -
Comprehensive
income
adjustment
for foreign
exchange (1) - - - - - - -
Stock-based
compensation
and shares
released
from escrow 10 35 45 27 23 23 47 81
Adjusted
EBITDA $296 $30 $(80) $1 $295 $90 $39 $30
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