SOURCE: International Monetary Systems, Ltd

March 11, 2011 17:26 ET

International Monetary Systems Files 2010 Annual Report

NEW BERLIN, WI--(Marketwire - March 11, 2011) - International Monetary Systems, Ltd. (OTCBB: ITNM), a worldwide leader in business-to-business barter services, recently filed its 2010 annual report on form 10-K.

2010 was a year of transition, litigation, and continuing to build infrastructure for International Monetary Systems. The Company spent a good deal of time and resources settling litigation and tax examinations, while streamlining operations and strengthening controls.

Following are some of the highlights of 2010:

Return to Shareholders

--  During the year 198,790 shares of the Company's outstanding common 
stock were repurchased into treasury. This represents approximately 1.8% of 
the outstanding shares of the Company.

--  The Company's stock generally traded in a higher range in 2010 than in 
2009.

Operations

--  In 2010, there was a loss from operations of $333,620, compared to 
income of $539,305 last year. The 2010 loss included approximately $182,000 
in legal fees and a charge of $220,000 related to settlement of an 
employment contract. Also incurred were approximately $316,000 of other 
professional fees that are not expected to recur. Adjusted for these non-
recurring expenses, net operating income would have been approximately 
$385,000.

--  International Monetary Systems, Ltd. had EBITDA (earnings before 
interest, taxes, depreciation and amortization) of $1,297,547 or 
approximately $.12 per share. Exclusive of the non-recurring items noted 
above, EBITDA would be approximately $2,016,000 in 2010.

--  Cash flow from operations totaled approximately $960,000 or $.09 per 
share.
 
--  Total liabilities were reduced by $1,161,468 during the year.
 
--  Corporate finance, accounting, and human resources were relocated to 
the corporate headquarters in Milwaukee, WI from offices in northern 
California, resulting in increased operating efficiencies and lower 
administrative costs.
 
--  In August 2010, the Company implemented its new TNT barter software, 
which allows for enhanced sales, operations and reporting. 

--  During the third quarter of 2010, several purchase notes were paid in 
full, which frees cash flow of approximately $16,000 per month. Also, 
another purchase note requiring payments of approximately $9,000 per month 
was paid in full in December 2010.  Several of the Company's offices, 
notably the Chicago office, will be moved in early 2011 resulting in an 
estimated savings of approximately $21,000 per month.

RESULTS OF OPERATIONS

To evaluate operations, management monitors, among other measures, EBIDTA, cash flow, trade volume, revenue generated from said trade volume, number of customers and levels of significant operating expense categories. Key metrics to evaluate the health of the Company include cash position, ratio of current assets to current liabilities, debt levels, and equity trading activity.


EBITDA (earnings before interest, taxes, depreciation and amortization)

EBITDA was $1,297,547 in 2010 versus $2,252,138 in 2009.


         Adjustments to reconcile GAAP Net Income (Loss) to EBITDA         

                                                      2010         2009
                                                  -----------  ------------
Net income (loss)                                 $  (490,133) $    206,817
Interest expense                                      200,642       228,936
Taxes                                                 (42,118)      104,206
Depreciation & amortization                         1,629,156     1,631,809
Impairment                                                  -        80,370
                                                  -----------  ------------
Total EBITDA                                      $ 1,297,547  $  2,252,138
                                                  ===========  ============

Excluding the legal and settlement expenses described above, EBITDA would have been approximately $2,016,000 in 2010.

Revenue

During the year ended December 31, 2010, IMS processed more than $106 million in trade sales transactions, generating gross revenue of $13,704,307 compared to $13,968,152 in 2009. The 1.9 % decrease is primarily due to an increase of $261,000 in trade dollar sales discounts, which offset revenue from several large transactions in the corporate barter division.

Operating Expenses

Total other operating expenses increased from $13,428,847 in 2009 to $14,037,927 in 2010, an increase attributable to approximately $498,000 of non-recurring professional fees associated with settling litigation, tax audits and abandonment of a secondary stock offering, and $220,000 of settlement expense. We continue to see savings from the continuation of a cost containment and realignment exercise where redundant costs in acquired markets were eliminated and the Company's outside sales force was restructured and reduced.

Employee costs increased 2.9% from $7,727,461 in 2009 to $7,949,398 in 2010, due to a new tele-selling program and the discontinuance of the temporary wage reduction for senior management and several key employees.

Occupancy expenses, included in selling, general and administrative costs, decreased from $1,208,104 to $1,128,590, or 6.6%, due to consolidation of some offices and relocation to smaller offices for others.

Selling expense decreased slightly from $665,394 in 2009 to $589,567 in 2010, due to less national advertising for brand awareness.

In 2010, other general and administrative expenses increased from $2,041,020 to $2,741,216, due to the non-recurring professional fees and legal settlement expenses described above.


                   INTERNATIONAL MONETARY SYSTEMS, LTD.                    
                        CONSOLIDATED BALANCE SHEETS                        
                        December 31, 2010 and 2009                         

         
         
                                                    2010          2009
                                                ------------  ------------ 
                    ASSETS
Current assets
    Cash                                        $    804,108  $    894,396
    Restricted cash                                   41,829       149,682
    Marketable securities                            157,014       115,110
    Accounts receivable, net                       1,075,965     1,201,403
    Refundable income taxes                               --       133,000
    Earned trade account                             285,282        33,561
    Prepaid expenses                                 184,513       103,027
          Total current assets                     2,548,711     2,630,179
Other assets
Property and equipment, net                          727,549       921,473
Membership lists, net                              6,826,464     8,153,093
Goodwill                                           3,435,479     3,435,479
Assets held for investment                           179,181       174,659
          Total non-current assets                11,168,673    12,684,704

          Total assets                          $ 13,717,384  $ 15,314,883

                 LIABILITIES
Current liabilities
    Accounts payable and accrued expenses       $  1,294,213  $  1,290,464
    Credit lines and current portions of long
     term debt                                       465,120       782,608
    Current portion of common stock subject to
     guarantee                                       640,000       706,500
    Current portion of convertible notes
     payable, related parties                             --        50,000
          Total current liabilities                2,399,333     2,829,572
Long-term liabilities
    Long term debt, net of current portion         1,491,377     1,523,445
    Common stock subject to guarantee, less
     current portion                                 178,500       620,000
    Convertible notes payable to related
     parties, less current portion                   120,000        50,000
    Deferred compensation                            290,000       275,000
    Deferred income taxes                          1,336,904     1,679,565
          Total long-term liabilities              3,416,781     4,148,010
          Total liabilities                        5,816,114     6,977,582
Commitments and contingencies
             STOCKHOLDERS' EQUITY
Preferred stock, $.0001 par value, 20,000,000
 authorized, 0 outstanding                                 -             -
Common stock, $.0001 par value 280,000,000
 authorized 10,544,800 and 10,343,467 issued
 and outstanding December 31, 2010 and December
 31, 2009, respectively                                1,050         1,030
Paid in capital                                   13,542,436    12,772,904
Treasury stock, 904,049 and 646,095 shares,
 respectively                                     (3,170,571)   (2,428,422)
Accumulated other comprehensive income (loss)         16,118       (10,581)
Accumulated deficit                               (2,487,763)   (1,997,630)
          Total stockholders' equity               7,901,270     8,337,301

          Total liabilities and stockholders'
           equity                               $ 13,717,384  $ 15,314,883
                                                ============  ============


                   INTERNATIONAL MONETARY SYSTEMS, LTD.                    
  CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)    
                  Years Ended December 31, 2010 and 2009                   

         
         
                                                    2010          2009
                                                ------------  ------------ 

Gross revenue                                   $ 13,704,307  $ 13,968,152 

Operating Expenses
    Employee costs                                 7,949,398     7,727,461
    Selling, general and administrative            4,057,286     4,069,577
    Depreciation and amortization                  1,629,156     1,631,809
    Unusual items - cost of legal settlements        402,087            --
        Total operating expenses                  14,037,927    13,428,847

    Income (loss) from operations                   (333,620)      539,305

Other income (expense)
    Interest income                                    2,011           654
    Interest expense                                (200,642)     (228,936)

        Total other income (expense)                (198,631)     (228,282)

Income (loss) before income taxes                   (532,251)      311,023
Income tax (expense) benefit                          42,118      (104,206)

    Net income (loss)                               (490,133)      206,817
Components of comprehensive income (loss):
    Unrealized gain on available for sale
     investments                                      16,685        21,938
    Foreign currency translation gain                 10,014        18,321

        Comprehensive net income (loss)         $   (463,434) $    247,076

        Net income (loss) per
         common share - basic                   $      (0.04) $       0.02
                      - dilutive                $      (0.04) $       0.02
Weighted average common
 shares outstanding - basic                       10,462,465     9,731,062
                    - dilutive                    10,462,465     9,731,602

About International Monetary Systems

Founded in 1985, International Monetary Systems (IMS) serves 23,000 cardholders in 50 North American markets. Based in New Berlin, Wisconsin, and managed by seasoned industry veterans, IMS is one of the largest publicly traded barter companies in the world. The company's proprietary transaction clearing software enables businesses and individuals to trade goods and services online using an electronic currency known as trade dollars. The IMS network allows companies to create cost savings and connect to new customers by incorporating barter opportunities in their business models. Further information can be obtained at the company's Web site at: www.imsbarter.com.

Contact Information

  • Contact:
    International Monetary Systems, Ltd., New Berlin, WI
    Company Contact:
    John Strabley
    Executive V.P.
    (800) 559-8515