In-Touch Survey Systems Ltd. announces Q2 2012 financial results with 71% increase in sales and 190% increase in profits
OTTAWA , Aug. 29, 2012 /CNW/ - In-Touch Survey Systems Ltd. ("In-Touch") (INX.V) announces revenue of $2,947,069 in Q2 2012, which was 71% higher than revenue of $1,722,998 in Q2 2011. Year to date revenue of $5,737,408 was 82% higher than the same period last year. Net income before taxes for Q2 2012 was $351,933 , which was 190% higher than net income of $121,195 reported in Q2 2011. Gross profit as a percentage of revenue was up 5% to 49% in Q2 2012, compared to 44% in Q1 2012 and down 5% compared to 56% in Q2 2011. The Company-defined adjusted EBITDA increased 93% to $493,000 in Q2 2012, compared to an adjusted EBITDA of $255,000 in Q2 2011.
The Company acquired Service Intelligence ("SI") on Aug 4, 2011 with the intent of migrating all of SI's services and products onto In-Touch platforms. The company's gross profit significantly improved by 5% between Q1 2012 (44%) and Q2 2012 (49%) due to the successful ongoing migration. The company expects all but one or two customers to have moved entirely off legacy Service Intelligence technology by the end of Q3 2012 and therefore expects further gross profit margin improvements at a similar level of sales.
"I am very pleased to report superb Q2 results. Q2 2012 was our tenth consecutive quarter of growth and profit. Kudos are due to our management team and all our employees for these results. The past three quarters have been dominated with integrating and migrating Service Intelligence into In-Touch. These activities have taken longer and been far more complex than anticipated. However, to date I am pleased to report that to date we have kept 100% of Service Intelligence customers - even with the tremendous strain of legacy SI systems. It has become patently clear about the superiority of In-Touch systems to provide audit and mystery shopping and mobile on-site audit services," said Michael Gaffney , Chief Executive Officer.
"In January 2012 we had expected to complete at least one acquisition in 2012 that would contribute 25% growth over last year's revenues in addition to the 25% organic growth target. While we have investigated a number of different acquisition opportunities during the year, none have yet met our desired financial criteria. Notwithstanding this, acquisitions are still very much a part of our ongoing strategic plan and thus efforts to identify suitable targets will continue throughout the fiscal year but will only be consummated if our financial criteria are met. We have met or exceeded our organic revenue targets for the first two quarters and the team is working hard to ensure that we meet our 25% revenue growth goals for 2012," said Gaffney.
Consolidated Statements of Operations Q2 2012 Q2 2011
Revenue $ 2,947,069 $ 1,722,998
Cost of services 1,489,552 750,211
Gross profit 1,457,517 972,787
Total operating expenses (1,097,333) (856,804)
Earnings from operating activities 360,184 115,983
Finance costs (28,226) (13,676)
Loss on fair value of derivative - (45,712)
Gain on fair value of contingent consideration 730 -
Gain on foreign exchange 14,763 63,864
Gain on disposal of property and equipment 4,482 736
Net earnings before income taxes $ 351,933 $ 121,195
Weighted average number of common shares - basic 14,226,312 13,897,979
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.
