In-Touch Survey Systems Ltd. announces revenue up 33% and major new US customers



    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




For further information:

For further information: Michael J. Gaffney, Chief Executive Officer,
(613) 270-7911, mgaffney@intouchsurvey.com

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In-Touch Survey Systems Ltd.

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