After seeing its revenues plummet by more than a third last year as COVID-19 ravaged the global economy, Ottawa’s Intouch Insight says it expects to bounce back with double-digit growth in 2021.
Intouch (TSX-V:INX), which makes software that helps clients track customer satisfaction as well as collect data on issues such as employee health and safety concerns, posted revenues of $12.8 million in the fiscal year ending Dec. 31.
That’s down 34 per cent from 2019’s total of $19.3 million, a drop the firm blamed on the closure of vast swaths of the North American economy due to the pandemic.
COVID-19 restrictions hit the firm’s domestic clients particularly hard, Intouch said in financial filings. Revenues from Canadian customers fell 43 per cent to just under $4 million last year compared with a 29 per cent drop in U.S.-based revenues, which totalled about $8.8 million.
But the company also pointed out a few rays of light amid the gloom.
Net loss of $11.5K
Intouch’s software-as-a-service revenues jumped nearly 30 per cent to more than $950,000 in 2020, thanks mainly to its acquisition of Calgary-based PerformaLogics and sister company MobilForce early last year.
Meanwhile, the company slashed its operating expenses by nearly 30 per cent as it imposed a series of cost-cutting measures in the wake of the pandemic. In the end, Intouch posted a net loss of $11,500 in 2020, compared with a net profit of about $460,000 a year earlier, while boosting its earnings before taxes, financing costs, depreciation and amortization from $1.5 million in 2019 to nearly $1.7 million last year.
“The pandemic caused a dramatic shift in priorities towards revenue retention and cost containment,” CEO Cameron Watt said in a statement.
“Fortunately, the strength of the underlying business was evident. As a result, the company finished the year with key employees and customer contracts intact. This combined with a strong balance sheet will allow us to emerge from the pandemic with strength.”
Intouch, whose customers include A&W and Sobeys, said it’s starting to see signs of recovery in target customer verticals such as retail stores, restaurants and supermarkets. The Ottawa firm said it plans to “aggressively pursue new business opportunities” as it gradually increases sales and marketing spending to pre-COVID levels.
While conceding “it is difficult to predict what will unfold in 2021 with confidence,” management said Intouch expects to deliver “double-digit growth” and higher earnings this year.
“With the warmer weather coming and vaccine programs accelerating we expect to welcome most of our customers back on recurring programs by June,” the firm said.
“The actual timing of the recovery will depend on decisions made by the various governments across North America.”
Intouch shares ended Monday down a penny at 75 cents in trading on the TSX Venture Exchange. The company’s share price has nearly doubled since bottoming out at 40 cents in early November.