An Ottawa software company that helps clients track customer satisfaction as well as collect data on issues such as employee health and safety concerns says it’s confident demand for its products will rebound after plummeting during the height of the COVID-19 pandemic.
Intouch Insight (TSX-V:INX) said this week its revenues dropped 71 per cent in the second quarter to $1.46 million, down from $5 million in the same period a year earlier. The company blamed the steep decline in income on the coronavirus’s “profound and dramatic effect” on the global economy, which led many customers to stop using the firm’s services.
“Many of the industries that Intouch serves, including retail, convenience stores, grocery, pharmacy, hotels and restaurants, have been in the eye of the storm,” Intouch said in its second-quarter financial filings.
“For many customers, this meant allowing them to put their programs on hold despite the negative effect on revenues. However, it is essential to understand that the expected impact is temporary. Clients have not cancelled their agreements or relationship with the company and have simply pressed pause on their recurring programs.”
Intouch, whose customers include the likes of A&W and Sobeys, reported a net loss of $247,000 in the three-month period ending June 30, compared to a loss of slightly less than $35,000 in the second quarter of 2019.
But CEO Cameron Watt said the firm’s adjusted EBITDA – that is, its earnings before income tax expenses, financing costs and other costs such as depreciation and amortization are factored in – remained positive at nearly $177,000 “thanks to aggressive cost containment and effective use of government relief programs” in Canada and the U.S.
Watt said he believes Intouch is poised for a turnaround as the economy begins to recover from the crisis and customers start to “rethink their approach to customer service.”
In a statement, he said the company’s products and services “can play a key role in measuring the new and evolving requirements regarding the health and safety of both employees and customers.”
Signing new customers
In financial documents, the company said it’s continued to sign new customers throughout the pandemic, adding it expects existing clients “to restart programs over the coming months” as the economy improves and other measures aimed at curbing the spread of COVID-19 such as physical distancing and shelter-in-place restrictions are relaxed.
Still, management was careful to temper any expectations of a dramatic bounceback, saying the firm “is still unable to confidently predict the actual impact on revenues for the coming quarters as many variables remain outside the company’s control.”
Intouch shares were trading at 56 cents Friday afternoon on the TSX Venture Exchange, up one cent from Thursday’s close.