In-Touch Survey Systems Ltd. (“In-Touch”) (TSXV: INX) today announced its operating and financial results for the quarter ended June 30, 2014.
Net income before taxes for the second quarter increased to $158,989 compared to a net loss of $139,964 reported in the same quarter in 2013. Gross Margin increased to 56% in the second quarter compared to 54% for the same quarter in 2013.
Revenue for the second quarter was $2,224,118, which was 21% lower than revenue of $2,815,598 in the same quarter in 2013. Revenues from the EDC segment decreased 19% from $2,597,060 in Q2 2013 to $2,102,278 for the same quarter in 2014. IMS division revenue decreased from $218,538 in Q2 2013 to $121,840 in Q2 2014. The Company previously announced that it expected account losses to begin impacting comparisons starting with Q2 2014 and these revenue losses are within Management’s expectations.
Company-defined adjusted EBITDA increased to $183,000 for the second quarter, compared to an EBITDA of $1,000 for the same quarter in 2013. Because of ongoing improved gross margins and solid cost structure management, EBITDA is expected to remain positive throughout 2014.
“As anticipated, we have started to feel the revenue impact of the account losses from 2013 and expect that impact to continue throughout the remainder of 2014. We are very pleased with the year over year significant turn around in profits and increasing gross margin that we have been able to achieve despite the decline in revenue,” said Cameron Watt, President and Chief Executive Officer.
“We expect additional pressure on net income in the back half of the year as we increase our investment in product development and support throughout Q3 and Q4. We will be launching at least one new product in 2014 setting the stage for 2015 growth,” said Watt.
| Consolidated Statements of Operations | Q2 2014 | Q2 2013 |
|---|---|---|
| Revenue | $ 2,224,118 | $ 2,815,598 |
| Cost of services | 987,051 | 1,305,721 |
| Gross profit | 1,237,067 | 1,509,877 |
| Total operating expenses | 1,078,078 | 1,641,953 |
| Earnings from operating activities | 158,989 | (132,076) |
| Finance costs | (10,755) | (2,610) |
| Change in fair value of contingent consideration | - | (5,278) |
| Gain on dilution of associate | 106,680 | - |
| Portion of associate expenses | (101,373) | - |
| Net earnings before income taxes | $ 153,541 | (139,964) |
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
For more information please contact:
George Pretli
Controller
gpretli@intouchinsight.com
613-270-7916