Michael Gaffney. (Darren Brown, OBJ)

In-Touch Survey Systems Ltd. saw net losses nearly double in its fiscal 2007, with writedowns from obsolete equipment hitting the company's bottom line hard.

The Ottawa-based company said its full-year net loss was $225,797, compared to a loss of $145,542 a year earlier, as a result of a one-time writedown of $233,088 when In-Touch formally retired its oldest hardware after the last customer using the technology returned its units.

However, excluding the writedowns, the company actually posted a profit of about $5,000 and had an operating income of $266,182, compared to an operating loss of $13,068 a year earlier. Earnings before income tax, depreciation, amortization and stock-based compensation (EBITDA) also improved, to $425,000 from $292,000.

Revenues grew by a strong 39.3 per cent to $5.1 million, the company's highest-ever yearly sales level, as In-Touch saw an increase in sales of its electronic and manual data collection technologies.

"2007 was a great year for In-Touch with significant improvements in all facets of our business," said In-Touch CEO Michael Gaffney in a statement. "We generated significant cash from operations, raised $550,000 in debt from the Business Development Bank of Canada and with a new chartered bank, and banking agreement, we have a much stronger balance sheet."

Mr. Gaffney also said it expected its recently announced acquisition of Minneapolis-based MarketLine Research would wrap up in the next few days and have an "immediate positive impact" on sales.

For the fourth quarter alone, net losses widened to roughly $269,000 from $153,000, while revenues jumped 68.6 per cent to $1.5 million. Adjusted EBITDA fell to roughly $1,000 from $30,000 a year earlier.

The company said it expected year-over-year revenue growth in 2008, despite its recent warning that first-quarter revenues would be weaker than expected because of uncertainty surrounding one of its major U.S. clients.