International Monetary Systems files 2nd Quarter Report

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International Monetary Systems, Ltd.

Aug 09, 2012, 09:37 ET

NEW BERLIN, Wis., Aug. 9, 2012 /PRNewswire/ -- International Monetary Systems, Ltd. (OTCBB: ITNM), a worldwide leader in business-to-business barter services, has filed its second quarter report on Form 10-Q.

HIGHLIGHTS

Operations

Revenue increased 5.5% in the first two quarters of 2012 compared to the same period in 2011.

Income from operations increased to $213,273 in the first half of 2012 compared to an operating loss of $(39,925) in the first half of 2011.

The Company has completed the sale of two franchise territories during the year. They are not expected to have a material affect on the Company's results of operations for the next twelve months.

Return to Shareholders

During the six months ended June 30, 2012, 793,351 shares of the Company's stock have been repurchased under the Company's stock buyback plan and stock buyback guarantees.

CURRENT QUARTER

During the quarter ended June 30, 2012 International Monetary Systems ("IMS" or "the Company") generated revenues of $3,390,078, an increase of $56,939 or 1.7 %, compared to the second quarter of 2011.

Operating expenses in the quarter were $3,188,978 an increase of $ 38,251 or 1.2% compared to the second quarter of 2011. This increase is primarily due to increased employee costs, including staff costs in offices acquired in 2011, higher variable compensation tied to higher revenue, and expansion of the Company's tele-selling staff.

The Company generated operating income of $201,100 for the second quarter, compared to $182,412 in 2011. After adjusting for interest and income taxes, the net income for the quarter was $98,647 compared to net income of $77,196 in the second quarter of 2012. Interest expense has increased as the Company services the increased debt load taken on strategically to fund the stock buyback program expanded in 2011.

EBITDA for the three months ended June 30, 2012 and 2011 were as follows:

Adjustments to Reconcile GAAP Net Income to EBITDA

	2012		2011
Net (loss)	$	98,647	$	77,196
Interest expense		84,040		52,505
Income tax expense (benefit)		24,179		52,734
Depreciation and amortization		390,200		409,905
EBITDA	$	597,066	$	592,340

YEAR TO DATE

During the six months ended June 30, 2012 International Monetary Systems generated revenues of $6,656,857, an increase of $344,876 or 5.5 %, compared to the first six months of 2011. This is the result of a 6% increase in transactions processed, attributable in part to our 2011 acquisitions.

Operating expenses in the quarter were $6,443,584 an increase of $91,678 or 1.4% compared to the second quarter of 2011. This increase is primarily due to increased employee costs, including staff costs in offices acquired in 2011, higher variable compensation tied to higher revenue, and expansion of the Company's tele-selling staff.

The Company generated operating income of $213,273 year to date, compared to an operating loss of $(39,925) in 2011. After adjusting for interest and income taxes, the net income for the first six months of 2012 was $53,772 compared to a loss of $(107,359) for the same period in 2011. Interest expense has increased as the Company services the increased debt load taken on strategically to fund the stock buyback program expanded in 2011.

EBITDA for the six months ended June 30, 2012 and 2011 were as follows:

Adjustments to Reconcile GAAP Net Income to EBITDA

	2012		2011
Net income (loss)	$	53,772	$	(107,359)
Interest expense		164,742		97,623
Income tax expense (benefit)		1,105		(30,047)
Depreciation and amortization		778,878		818,714
EBITDA	$	998,497	$	778,931

INTERNATIONAL MONETARY SYSTEMS, LTD. CONSOLIDATED BALANCE SHEETS

	June 30, 2012			December 31, 2011
	(UNAUDITED)
ASSETS
Current assets
Cash		$	868,709	$	1,018,250
Restricted cash			-		206,956
Marketable securities			180,958		162,323
Accounts receivable, net			827,538		1,006,278
Earned trade account			388,244		210,582
Prepaid expenses			169,100		188,715
Total current assets			2,434,549		2,793,104
Other assets
Property and equipment, net			690,186		651,118
Membership lists and other intangibles, net			5,054,924		5,718,435
Goodwill			3,507,522		3,507,522
Assets held for investment			171,861		169,031
Total non-current assets			9,424,493		10,046,106
Total assets		$	11,859,042	$	12,839,210
LIABILITIES
Current liabilities
Accounts payable and accrued expenses		$	1,008,501	$	1,091,823
Credit lines, short term notes, and current portion of long term debt			1,173,491		1,009,897
Current portion of notes payable to related parties, including short term note			405,317		90,000
Common stock subject to guarantee			89,975		418,495
Total current liabilities			2,677,284		2,610,215
Long-term liabilities
Long term debt, net of current portion			2,429,324		2,159,434
Notes payable related parties, net of current portion			230,765		275,000
Deferred compensation			291,000		290,000
Deferred income taxes			833,581		1,015,325
Total long-term liabilities			3,784,670		3,739,759
Total liabilities			6,461,954		6,349,974
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, and 8,107,020 and
8,097,020 issued and outstanding at June 30, 2012 and December 31, 2011 respectively			811		810
Paid in capital			9,472,306		9,137,003
Treasury stock, 699,383 shares at June 30, 2012 and 172,703 shares at December 31, 2011			(1,840,074)		(351,614)
Accumulated other comprehensive income			25,851		18,615
Accumulated deficit			(2,261,806)		(2,315,578)
Total stockholders' equity			5,397,088		6,489,236
Total liabilities and stockholders' equity		$	11,859,042	$	12,839,210

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011

Net revenue	$	3,390,078	$	3,333,139	$	6,656,857	$	6,311,981
Operating expenses:
Employee costs		2,000,061		1,875,275		3,997,141		3,801,983
Selling, general and administrative		798,717		865,547		1,667,565		1,731,209
Depreciation and amortization		390,200		409,905		778,878		818,714

Total operating expenses		3,188,978		3,150,727		6,443,584		6,351,906

Income (loss) from operations		201,100		182,412		213,273		(39,925)

Other income (expense)
Interest income		94		23		674		142
Gain on sales of assets		5,672		--		5,672		--
Interest expense		(84,040)		(52,505)		(164,742)		(97,623)
Total other income (expense)		(78,274)		(52,482)		(158,396)		(97,481)

Income (loss) before income taxes		122,826		129,930		54,877		(137,406)
Income tax (expense) benefit		(24,179)		(52,734)		(1,105)		30,047

Net income (loss)		98,647		77,196		53,772		(107,359)

Components of comprehensive income (loss):
Foreign currency translation adjustment		(4,466)		1,802		(6,963)		6,567
Unrealized gain on available for sale securities		(7,331)		(370)		14,199		5,596

Comprehensive income (loss)	$	86,850		78,628	$	61,008		(95,196)

Net income (loss) per
common share – basic	$	.01	$	.01	$	.01	$	(.01)