OTTAWA, Nov. 26, 2015- In-Touch Survey Systems Ltd. ("In-Touch") (TSXV: INX) today announced its operating and financial results for the quarter ended September 30, 2015.
Revenue for the third quarter was $2,315,974, which was 5% higher than revenue of $2,204,004 in the same quarter in 2014. Recurring revenue from our SaaS products increased significantly to 83% during the third quarter to $576,402 compared to $315,549 in third quarter 2014. Services revenue were 8% lower quarter over quarter from $1,888,455 in 2014 to $1,739,572 in 2015.
Gross Margin remained stable at 59% in the third quarter compared to the same quarter in 2014. Earnings from operating activities increased 11% for Q3 2015 to $178,392 an increase of $17,227 compared to $161,165 in Q3 2014. Net earnings before income taxes for the third quarter increased 136% to $159,954 compared to net earnings before income taxes of $67,860 in the same quarter in 2014. The increase in earnings is mostly a result of the Company having written off $80,000 of its share of loss from investments in associates accounted for using the equity method in Q3 2014 compared to $8,000 in Q3 2015.
Company-defined adjusted EBITDA increased 9% to $336,000 for the third quarter, compared to an EBITDA of $307,000 for the same quarter in 2014.
"We are extremely pleased with the outcome of the third quarter, particularly the strong growth in recurring revenue from software licensing and user fees. Based on the growth in sales in 2015, and the acquisition of Statopex, we expect to finish FY 2015 with revenue growth in excess of 15% over FY 2014," said Cameron Watt, President & Chief Executive Officer.
"We expect revenues to accelerate in FY 2016 and exceed 20% year over year growth. Given this positive growth outlook, in September 2015 we accelerated spending in marketing and product development and will continue to ramp up spending throughout the remainder of the year and into 2016. We also remain focused on continuing to deliver profits, positive EBITDA, and maintaining a strong balance sheet. Our strategy of effectively investing our resources around recurring revenue products is the key to accelerating and sustaining our future growth and delivering value for our shareholders", said Watt.
|Consolidated Statements of Operations||Q3 2015||Q3 2014|
|Revenue||$ 2,315,974||$ 2,204,004|
|Cost of services||947,911||910,934|
|Total operating expenses||1,189,671||1,131,905|
|Earnings from operating activities||178,392||161,165|
|Change in fair value of contingent consideration||(8,069)||(80,109)|
|Net earnings before income taxes||$ 159,954||$ 67,860|
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 inaccurate given that they are subject to certain risks and uncertainties.
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