OTTAWA, Aug. 23 /CNW Telbec/ - In-Touch Survey Systems Ltd. ("In-Touch" TSX-Venture: INX) is pleased to announce that revenue increased 33% to $1,231,836 in Q2 2007 compared to $925,479 in Q2 2006. Net loss was ($25,202) compared to a net income of $5,028 in Q2 2006. Cash flow from operations in Q2 2007 used cash of $78,480 compared to negative cash flows from operations in Q2 2006 of $126,250. The gross margin decreased to 57% in Q2 2007 compared to 61% in Q2 2006 and the decrease was largely attributed to the higher costs of the US pilot programs. Management expects future gross margins to return to historical levels in the next two quarters.
Capital expenditures increased to $380,682 for the first six months of 2007 compared to $132,785 for the same period in 2006 to support new customers.
"In-Touch successfully completed pilot programs for two major United States based companies. As a result of these pilot programs, both customers have issued major purchase orders for Q3 and Q4. These new customers will add substantial revenue to the company," said Michael Gaffney, Chief Executive Officer.
Guidance
Q3 Revenue in the range of $1.35 million to $1.45 million CDN
Annual Revenue in the range of $4.5 million to $4.7 million CDN
"We are very pleased with the 33% increase for Q2 and we also expect significant revenue growth in Q3 2007 compared to the same period in 2006. Our strong revenue growth will continue for the remainder of the fiscal year and into 2008," said Gaffney.
2nd Quarter 2nd Quarter $ %
2007 2006 Change Change
Sales Revenue $1,231,836 $925,479 $306,357 33.1%
Cost of Goods Sold 529,059 362,260 (166,799) -46.0%
Gross Profit 702,777 563,219 139,558 24.8%
Total Operating
Expenses 693,729 529,155 (164,574) -31.1%
Earnings (loss) before
undernoted items $9,048 $34,064 (25,016)
Interest Expense (21,795) (15,003) (6,792)
Amortization of
discount on
promissory note (12,475) (9,551) (2,924)
Amortization of
intangible asset (4,761) (4,761) 0
Gain (loss) on foreign
exchange (10,993) 279 (11,272)
Gain on disposal of
assets 15,774 0 15,774
Net earnings (loss) $(25,202) $5,028 $(30,230)
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 information 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