Mr. George Pretli reports

IN-TOUCH SURVEY SYSTEMS LTD. ANNOUNCES Q3 2015 FINANCIAL RESULTS AND PREDICTS STRONG FUTURE GROWTH

In-Touch Survey Systems Ltd. has released its operating and financial results for the quarter ended Sept. 30, 2015.

Revenue for the third quarter was $2,315,974, which was 5 per cent higher than revenue of $2,204,004 in the same quarter in 2014. Recurring revenue from the company's SaaS products increased significantly to 83 per cent during the third quarter to $576,402 compared with $315,549 in third quarter 2014. Services revenue was 8 per cent lower quarter over quarter from $1,888,455 in 2014 to $1,739,572 in 2015.

Gross margin remained stable at 59 per cent in the third quarter compared with the same quarter in 2014. Earnings from operating activities increased 11 per cent for third quarter 2015 to $178,392, an increase of $17,227 compared with $161,165 in third quarter 2014. Net earnings before income taxes for the third quarter increased 136 per cent to $159,954 compared with 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 third quarter 2014 compared with $8,000 in third quarter 2015.

Company-defined adjusted earnings before interest, taxes, depreciation and amortization increased 9 per cent to $336,000 for the third quarter, compared with 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 per cent over FY 2014," said Cameron Watt, president and chief executive officer.

"We expect revenues to accelerate in FY 2016 and exceed 20-per-cent 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 Mr. Watt.

            CONSOLIDATED STATEMENTS OF OPERATIONS

                                          Q3 2015      Q3 2014

Revenue                                $2,315,974   $2,204,004
Cost of services                          947,911      910,934
Gross profit                            1,368,063    1,293,070
Total operating expenses                1,189,671    1,131,905
Earnings from operating activities        178,392      161,165
Finance costs                             (10,369)     (13,196)
Portion of associate expenses              (8,069)     (80,109)
Net earnings before income taxes         $159,954      $67,860

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