OTTAWA, Nov. 22, 2012 /CNW/ - In-Touch Survey Systems Ltd. ("In-Touch") (TSXV: INX) announces revenue of $2.8 million, which was comparable to revenue reported in Q3 2011. Year to date revenue of $8.5 million was 44% higher than revenue reported in the comparable period last year. Net income before taxes for the third quarter of 2012 was $318 thousand, which was 68% higher than net income before taxes reported in the third quarter of 2011. For the nine months ended September 30, 2012, net income before taxes was $800 thousand, which was 131% higher than the comparable period in 2011. Gross profit as a percentage of revenue for the three months ended September 30, 2012 increased to 54% compared to 46% in the comparable period year ago. Gross profit as a percentage of revenue in the third quarter of 54% also represented the third consecutive quarter-over-quarter increase compared to 49% reported in Q2 '2012 and 44% reported in Q1' 2012. The Company-defined adjusted EBITDA increased 25% to $468,000 in Q3 2012 (YTD 2012 - $1,239,000), compared to an adjusted EBITDA of $376,000 in Q3 2011 (YTD 2011 - $792,000).
"I am very pleased to report excellent bottom-line results for the third quarter ended September 30, 2012," said Michael Gaffney, Chief Executive Officer. "Although third quarter revenues were similar to last year, Q3 2012 was our eleventh consecutive quarter of profit. We anticipate 2012 annual revenues to be just under our target growth rate of 25% over fiscal 2011 revenues.. Several large retail customers with Mystery Shopping programs have put their projects on hold although we expect these projects to resume in January 2013. Generally, these customers have postponed our programs due to their own internal management and program changes and strategic reviews. We believe that current economic conditions have also caused our customers to take a more conservative approach to spending on services," explained Mr. Gaffney.
"During Q3 we acquired two new contracts from European luxury brand automobile manufacturers that open the doors to a specialized product focus and a new business vertical. 2012 saw a tremendous amount of effort invested into solving the gross margin challenges associated with last year's acquisition of Service Intelligence from Global Compliance. The tremendous improvement in gross margins is a direct result of the efforts of our operations teams. On November 12 in New York we launched EventMatrix (eventmatrix.com) a platform as a service solution for Chief Marketing Officers and Chief Information Officers to leverage investments in their CRM. Beginning in the summer of 2012 investments in marketing and sales increased significantly as we refocused our efforts and resources from acquisition integration of existing customers towards new customer acquisition," said Gaffney.
|Consolidated Statements of Operations||Q3 2012||Q3 2011|
|Cost of services||1,285,024||1,495,352|
|Earnings from operating activities||360,121||297,264|
|Loss on fair value of derivative||-||(80,398)|
|Loss on fair value of contingent consideration||(945)||-|
|(Loss) gain on foreign exchange||(30,325)||362|
|Gain on disposal of property and equipment||7,949||-|
|Net earnings before income taxes||$||318,518||$||197,281|
|Weighted average number of common shares - basic||14,226,312||14,049,646|
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.
SOURCE: In-Touch Insight Systems Inc.
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