OTTAWA, April 14 /CNW Telbec/ - In-Touch Survey Systems Ltd. ("In-Touch" TSX-Venture: INX) announces that it will acquire MarketLine Research Inc. ("MarketLine") and that Q1 Revenues are up 20% over Q1 2006 but short of previous guidance estimates.
MarketLine was founded in Minneapolis by a team of market research experts in 1995. The company's products and services are primarily founded on an internally developed call centre and software technology called MarketVU. MarketVU is a proprietary computer aided telephone interviewing (CATI) system plus a tabulation and reporting engine which provides a significant competitive advantage over rivals that have to outsource this requirement.
MarketLine will be acquired for cash and a promissory note - payable over five years. In-Touch will internally fund the acquisition. In calendar 2007, MarketLine revenues exceeded $750,000.
"We expect to close this transaction in the next several weeks pending board and regulatory approvals. MarketLine provides In-Touch with a new complimentary data collection technology, which strengthens and broadens our product line, along with new customers and a sales and service hub for the Midwest USA. The addition of the MarketVu technology moves In-Touch closer to our strategic goal of being the leading supplier of real-time, mobile, data collection and reporting technology to Fortune 1000 marketing and operations departments. We are looking forward to the immediate positive impact from MarketLine to increase In-Touch revenues", said Michael Gaffney, Chief Executive Officer.
First quarter In-Touch revenues will increase 20% over the same quarter last year but will fall short of the expected growth in sales because of delays in orders from one major customer. In-Touch is scaling back on cost and infrastructure that had been put in place to manage this large customer to ensure that the company meets its annual cash flow and profitability targets. In-Touch does expect negative earnings, only in the first quarter, because of this customer's reduced level of purchases.
"One major US customer, a financial company, has delayed their planned program and purchases for the first quarter and most likely the second quarter. In-Touch continues to sell a small amount of product to this client but, at this time, is unable to predict when planned major purchases might start. Our client was acquired late last year, is the middle of a major reorganization and is also dealing with the sub-prime market challenges in the United States", said Gaffney.
"In-Touch is hopeful that the client will resume its planned purchases in the final two quarters of the year. In-Touch is on target with its sales growth estimates from all other customers", said Gaffney.
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.