SOURCE: International Monetary Systems, Ltd

November 12, 2010 13:07 ET

International Monetary Systems Reports Third Quarter and Nine Months 2010 Financial Results

Trend Toward Operating Profitability Continues

NEW BERLIN, WI--(Marketwire - November 12, 2010) - International Monetary Systems, Ltd. (OTCBB: ITNM), a worldwide leader in business-to-business barter services, reports its financial results for the third quarter and nine months ended September 30, 2010.

Financial Highlights Include:

--  Revenue increased 1.2% compared to the third quarter of 2009.

--  Year-to-date employee costs were reduced by 1.7% compared to the first
    nine months of 2009.  

--  Total liabilities have been reduced by more than $900,000 since 
    December 31, 2009.
 
--  Absent extraordinary legal fees and the cost of settling income tax 
    audits, year-to-date net income would have been approximately $350,000.

For the third quarter ended September 30, 2010 International Monetary Systems generated gross revenues of $3,760,487, an increase of $46,040 or 1.2%, compared to the third quarter of 2009. Much of this increase in gross revenue resulted from a significant transaction in its corporate barter division. The Company continues to develop and grow this division, with the anticipation that its corporate barter division will become an increasingly important part of its business model. Operating expenses in the quarter were $3,318,451, an increase of $149,325 or 4.7% compared to the third quarter of 2009. This increase is primarily due to increased legal and investor relations costs. The net operating profit was $197,278 for the quarter, compared to a net operating profit of $357,666 in the third quarter of 2009. After adjusting for interest and income taxes, the net loss for the current period of $37,642 compared to net income of $214,180 in the third quarter of 2009.

EBITDA (Earnings before interest, taxes, depreciation and amortization) for the quarters ended September 30, 2010 and 2009 was $602,901 for the third quarter 2010 compared with $748,792 in the prior year's third quarter.

The following table details our EBITDA calculation:

 
         
                                    September 30,  September 30,
                                        2010           2009
                                    -------------  --------------
Net income (loss)                   $     (37,642) $      214,180
Interest expense                           52,272          55,345
Income tax expense                        180,436          88,224
Depreciation                               76,811          55,095
Amortization                              331,024         335,948
                                    -------------  --------------

EBITDA                              $     602,901  $      748,792
                                    =============  ==============

For the nine months ended September 30, 2010, revenue was $10,868,980 compared with $10,925,781 in the year-ago nine-month period. Much of the decrease was the result of a slower than average first quarter of the year. Operating expenses were $9,753,011, an increase of $98,037 or 1.0% compared to the first nine months of 2009. Included in operating results were non-recurring legal and accounting fees of approximately $400,000. Excluding these non-recurring fees, operating results would have improved approximately $300,000 or 3.1%. The extraordinary professional fees resulted primarily from the Company's involvement in three separate lawsuits, two of which are now settled, and two tax audits, both of which are settled. The largest decreases in other categories versus 2009 are primarily due to efficiencies realized in personnel and selling costs. EBITDA for the nine month period ending September 30, 2010 was $1,591,573 compared with $1,921,768 in the year-ago nine-month period.

The following table details our EBITDA calculation:

 
                                          Nine Months Ended
                                    ----------------------------  
                                    September 30,  September 30,
                                        2010           2009
                                    -------------  --------------
Net income (loss)                   $    (135,688) $      339,762
Interest expense                          154,173         180,335
Income tax expense                        354,235         185,343
Depreciation                              222,837         208,483
Amortization                              996,016       1,007,845
                                    -------------  --------------

EBITDA                              $   1,591,573  $    1,921,768
                                    =============  ==============   
                                               

Donald F. Mardak, Chief Executive Officer of International Monetary Systems, said, "During the quarter, we continued to build our corporate barter division, and we expect it to become an increasingly larger part of our business as we devote more of our efforts toward promoting this division. We also have been successful this quarter in recruiting new members throughout the country, and expect to see the impact of our new, active members on our revenues, in the quarters ahead. On the operational front, our new proprietary process management software was launched during the beginning of the quarter, and it is providing us with flexibility, customizability, in-house support, and cost savings," Mr. Mardak added.

He concluded, "With the upcoming holiday season, we anticipate an increase in the popularity of our barter system, as our members seek ways to take full advantage of the benefits of the IMS platform. We look forward to the increased activity and participation of our new membership base."

Use of Non-GAAP Measures

The company feels that EBITDA (Earnings before interest, taxes, depreciation and amortization) is an important measure of operations as it shows the contribution of ongoing operations, without the significant non-cash expenses associated with acquiring additional markets.

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.

Forward-Looking Statement

This press release contains forward-looking statements that involve risks and uncertainties concerning our expected performance as described without limitation in comments about the company's performance within the safe harbor provisions established under The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from the results predicted and reported results should not be considered as an indication of our future performance. We believe that these potential risks and uncertainties include, without limitation: the continuing development of successful marketing strategies for our concepts; our ability to increase revenues and sustain profitability; the availability of adequate working capital; our dependence both on key personnel, and the effect of changes in the overall economy and in technology. Statements in this release should be evaluated in light of these factors. These risk factors and other important factors that could affect our business and financial results are discussed in our periodic reports and filings with the Securities and Exchange Commission, including our Forms 10-K and Forms 10-Q, which are available at www.sec.gov. All information set forth in this release is as of November 12, 2010, and International Monetary Systems, Ltd. undertakes no duty to update this information.

FINANCIAL TABLES FOLLOW



 
                    INTERNATIONAL MONETARY SYSTEMS, LTD.                    
                        CONSOLIDATED BALANCE SHEETS                        

         
         
                                              September 30,  December 31,
                                                  2010           2009
                                               (UNAUDITED)
                                              -------------- --------------
                            ASSETS
Current assets
  Cash                                        $      545,427 $      894,396
  Restricted cash                                    124,293        149,682
  Marketable securities                              139,368        115,110
  Accounts receivable, net                           939,612      1,201,403
  Refundable income taxes                                 --        133,000
  Earned trade account                               723,482         33,561
  Prepaid expenses                                   311,382        103,027

                                              -------------- --------------

     Total current assets                          2,783,564      2,630,179
                                              -------------- --------------

Property and equipment, net                          711,424        921,473
                                              -------------- --------------

Other assets

  Membership lists, net                            7,157,247      8,153,093
  Goodwill                                         3,435,479      3,435,479
  Assets held for investment                          99,298         99,298
  Investment in real estate                           26,000         26,000
  Cash surrender value                                53,234         49,361
                                              -------------- --------------

     Total other assets                           10,771,258     11,763,231
                                              -------------- --------------

     Total assets                             $   14,266,246 $   15,314,883
                                              ============== ==============





                   INTERNATIONAL MONETARY SYSTEMS, LTD.                    
                        CONSOLIDATED BALANCE SHEETS                        
                                Continued                                          
         
                                                September 30, December 31,
                                                   2010           2009
                                                (UNAUDITED)
                                                ------------  ------------ 
                            LIABILITIES
Current liabilities
    Accounts payable and accrued expenses       $    670,938  $    867,469
    Income taxes payable                             483,329       422,995
    Credit lines                                     234,984       246,385
    Current portion of notes payable                  67,108       236,997
    Current portion of convertible notes
     payable                                         200,464       299,226
    Current portion of common stock subject to
     guarantee                                       640,000       706,500
    Current portion of convertible notes
     payable, related parties                        100,000        50,000
                                                ------------  ------------ 

          Total current liabilities                2,396,823     2,829,572
                                                ------------  ------------ 

Long-term liabilities
    Notes payable, less current portion              360,000       100,000
    Convertible notes payable, less current
     portion                                       1,151,698     1,423,445
    Common stock subject to guarantee, less
     current portion                                 396,000       620,000
    Convertible notes payable, related parties,
     less current portion                             20,000        50,000
    Deferred compensation                            286,250       275,000
    Deferred income taxes                          1,418,936     1,679,565
                                                ------------  ------------ 

          Total long-term liabilities              3,632,884     4,148,010
                                                ------------  ------------ 

          Total liabilities                        6,029,707     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 September 30, 2010
 and December 31, 2009 respectively                    1,053         1,030
Paid in capital                                   13,324,932    12,772,904
Treasury stock, 851,050 and 646,095
 shares, respectively                             (2,951,496)   (2,428,422)
Accumulated other comprehensive loss                  (4,632)      (10,581)
Accumulated deficit                               (2,133,318)   (1,997,630)
                                                ------------  ------------ 

          Total stockholders' equity               8,236,539     8,337,301
                                                ------------  ------------ 

          Total liabilities and stockholders'
           equity                               $ 14,266,246  $ 15,314,883
                                                ============  ============ 




                                       
                         INTERNATIONAL MONETARY SYSTEMS, LTD.
 
                   CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

                                                      
                            Three Months Ended        Nine Months Ended
                              September 30,             September 30,
                          ----------------------  ------------------------  
                             2010        2009         2010         2009
                          ----------  ----------  -----------  ----------- 
Gross revenue             $3,760,487  $3,714,447  $10,868,980  $10,925,781
                          ----------  ----------  -----------  ----------- 

Cost of revenues             244,758     187,655      741,136      565,946
                          ----------  ----------  -----------  ----------- 

Gross profit               3,515,729   3,526,792   10,127,844   10,359,835
                          ----------  ----------  -----------  ----------- 

Operating Expenses

  Employee costs           1,918,628   1,773,103    5,660,553    5,758,093
  General and 
   administrative            624,857     431,632    1,821,018    1,282,224
  Occupancy                  293,682     287,037      837,110      908,189
  Selling                     73,449     286,311      215,477      490,140
  Depreciation                76,811      55,095      222,837      208,483
  Amortization               331,024     335,948      996,016    1,007,845
                          ----------  ----------  -----------  ----------- 

  Total operating
   expenses                3,318,451   3,169,126    9,753,011    9,654,974
                          ----------  ----------  -----------  ----------- 

  Income from operations     197,278     357,666      374,833      704,861
                          ----------  ----------  -----------  ----------- 

Other income (expense)
   Interest income                62          83          161          579
   Loss on disposal of
    assets                    (2,274)          -       (2,274)           -
   Interest expense          (52,272)    (55,345)    (154,173)    (180,335)
                          ----------  ----------  -----------  ----------- 

   Total other income
    (expense)                (54,484)    (55,262)    (156,286)    (179,756)
                          ----------  ----------  -----------  ----------- 

   Income before income
    taxes                    142,794     302,404      218,547      525,105
   Income tax expense       (180,436)    (88,224)    (354,235)    (185,343)
                          ----------  ----------  -----------  ----------- 

   Net income (loss)      $  (37,642) $  214,180  $  (135,688) $   339,762
                          ==========  ==========  ===========  =========== 

   Net income (loss) per
    common share - basic  $    (0.00) $     0.02  $     (0.01) $      0.03
              - dilutive  $    (0.00) $     0.02  $     (0.01) $      0.03
 Weighted average common
  shares outstanding -
  basic                  10,529,191   9,715,606   10,434,718    9,740,880
             - dilutive  10,529,191   9,715,606   10,434,718    9,740,880

Contact Information

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

    Investor Relations Contact:
    Porter, LeVay& Rose, Inc.
    Linda Decker
    Vice President
    212-564-4700