In-Touch Survey Systems Ltd. announces Q1 2014 financial results
By: Navi Vaid May 29, 2014
In-Touch Survey Systems Ltd. ("In-Touch") (TSXV: INX) today announced its operating and financial results for the quarter ended March 31, 2014.
Revenue for the first quarter was $2,323,307, which was 2% higher than revenue of $2,282,441 in the same quarter in 2013. Revenues from the EDC segment increased 9% from $1,988,273 in 2013 to $2,174,762 for the same quarter in 2014. A decrease in revenue from the IMS division from $294,168 in Q1 2013 to $148,545 in Q1 2014 was expected due to the loss of contracts. Q1 benefited from the overlap of the GCS acquisition which mitigated the account losses from 2013. The full impact of the account losses is expected to impact year over year revenue comparisons starting with Q2, 2014. It is anticipated that revenue replacement will accelerate in Q3 and Q4 with the introduction of new products.
Net income before taxes for the first quarter was $29,172 compared to a net loss of $145,339 reported in the same quarter in 2013. Gross Margin increased to 56% in the first quarter compared to 52% for the same quarter in 2013. The significant improvement in gross margin is attributed to cost reductions and efficiency initiatives which started in 2013. There was also some benefit received through product mix shift.
Company-defined adjusted EBITDA increased to $163,000 for the first quarter, compared to an EBITDA of ($52,000) for the same quarter in 2013. Because of improved margins EBITDA is expected to remain positive throughout 2014.
"We are very pleased to see the tangible results of the efforts over the last few quarters reflected in the Q1 2014 financial statements. We expect Q2 to be a challenging revenue quarter given the year over year customer replacement requirement. We are meeting the challenge with a focus on new sales while maintaining operational efficiencies to ensure comparable profitability to 2013." said Cameron Watt, President & Chief Executive Officer.
"We remain committed to our investment in product development and believe that the products we plan to launch in 2014 will be integral to both the revenue replacement efforts as well as the future growth of the company.", said Watt.
|Consolidated Statements of Operations||Q1 2014||Q1 2013|
|Revenue||$ 2,323,307||$ 2,828,441|
|Cost of services||1,019,929||1,086,823|
|Total operating expenses||1,264,135||1,326,070|
|Earnings from operating activities||39,243||(130,452)|
|Change in fair value of contingent consideration||-||1,129|
|Net earnings before income taxes||$ 29,172||(145,339)|
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.
For more information please contact: