International Monetary Systems Files 3rd Quarter Report

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International Monetary Systems, Ltd.

Nov 09, 2012, 01:28 ET

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

RESULTS OF OPERATIONS

HIGHLIGHTS

Operations

Revenue increased 4.2% in the first three quarters of 2012 compared to the same period in 2011.

Income from operations increased to $334,730 in the first three quarters of 2012 compared to an operating income of $149,378 in the first three quarters of 2011.

The Company has completed the sale of two franchise territories during the year, with a third sale to be completed in the fourth quarter. They are not expected to materially affect the Company's results of operations for the next twelve months.

Return to Shareholders

During the nine months ended September 30, 2012, 815,668 shares of the Company's stock have been repurchased under the Company's stock buyback plan and stock buyback guarantees.

During the nine months ended September 30, 2012, 624,385 shares of treasury stock were retired.

CURRENT QUARTER

During the quarter ended September 30, 2012 International Monetary Systems ("IMS" or "the Company") generated revenues of $3,256,392, an increase of $51,606 or 1.6%, compared to the third quarter of 2011.

Operating expenses in the quarter were $3,134,982 an increase of $119,498 or 3.9% compared to the third 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 $121,410 for the third quarter, compared to $189,302 in 2011. After adjusting for interest and income taxes, the net income for the quarter was $25,256 compared to net income of $105,490 in the third quarter of 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 three months ended September 30, 2012 and 2011 were as follows:

Adjustments to Reconcile GAAP Net Income to EBITDA
	2012		2011
Net income	$	25,256	$	105,490
Interest expense		82,253		63,348
Income tax expense		11,438		20,098
Depreciation and amortization		371,977		409,909
EBITDA	$	490,924	$	598,845

YEAR TO DATE

During the nine months ended September 30, 2012 International Monetary Systems ("IMS" or "the Company") generated revenues of $9,913,249, an increase of $396,482 or 4.2%, compared to the first nine months of 2011. This is the result of a 3.6% increase in transactions processed, attributable in part to our 2011 acquisitions.

Operating expenses for the first nine months were $9,578,519 an increase of $211,130 or 2.2% compared to first nine months 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 $334,730 year to date, compared to operating income of $149,378 in 2011. After adjusting for interest and income taxes, the net income for the first nine months of 2012 was $79,068 compared to a net loss of $1,869 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 nine months ended September 30, 2012 and 2011 were as follows:

Adjustments to Reconcile GAAP Net Income to EBITDA
	2012		2011
Net income (loss)	$	79,068	$	(1,869)
Interest expense		246,994		160,971
Income tax expense (benefit)		12,542		(9,949)
Depreciation and amortization		1,150,855		1,228,623
EBITDA	$	1,489,459	$	1,377,776

INTERNATIONAL MONETARY SYSTEMS, LTD. CONSOLIDATED BALANCE SHEETS
	September 30, 2012			December 31, 2011
	(UNAUDITED)
ASSETS
Current assets
Cash		$	968,207	$	1,018,250
Restricted cash			-		206,956
Marketable securities			193,145		162,323
Accounts receivable, net			723,219		1,006,278
Earned trade account			388,577		210,582
Prepaid expenses			167,985		188,715
Total current assets			2,441,133		2,793,104
Other assets
Property and equipment, net			660,015		651,118
Membership lists and other intangibles, net			4,729,720		5,718,435
Goodwill			3,507,522		3,507,522
Assets held for investment			163,061		169,031
Total non-current assets			9,060,318		10,046,106
Total assets		$	11,501,451	$	12,839,210
LIABILITIES
Current liabilities
Accounts payable and accrued expenses		$	1,008,236	$	1,091,823
Credit lines, short term notes, and current portion of long term debt			1,396,894		1,009,897
Current portion of notes payable to related parties, including short term note			346,797		90,000
Common stock subject to guarantee			75,000		418,495
Total current liabilities			2,826,927		2,610,215
Long-term liabilities
Long term debt, net of current portion			1,982,223		2,159,434
Notes payable related parties, net of current portion			213,816		275,000
Deferred compensation			291,000		290,000
Deferred income taxes			768,748		1,015,325
Total long-term liabilities			3,255,787		3,739,759
Total liabilities			6,082,714		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 7,482,632 and 8,097,020 issued and outstanding at September 30, 2012 and December 31, 2011 respectively			749		810
Paid in capital			7,752,316		9,137,003
Treasury stock, 97,313 shares at September 30, 2012 and 172,703 shares at December 31, 2011			(134,594)		(351,614)
Accumulated other comprehensive income			36,776		18,615
Accumulated deficit			(2,236,510)		(2,315,578)
Total stockholders' equity			5,418,737		6,489,236
Total liabilities and stockholders' equity		$	11,501,451	$	12,839,210

INTERNATIONAL MONETARY SYSTEMS, LTD. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011

Net revenue	$	3,256,392	$	3,204,786	$	9,913,249	$	9,516,767
Operating expenses:
Employee costs		1,943,879		1,879,594		5,940,971		5,681,577
Selling, general and administrative		819,126		725,981		2,486,693		2,457,189
Depreciation and amortization		371,977		409,909		1,150,855		1,228,623
Total operating expenses		3,134,982		3,015,484		9,578,519		9,367,389

Income from operations		121,410		189,302		334,730		149,378

Other income(expense)
Interest income		137		43		802		184
Gain (Loss) on sales of assets		(2,600)		(409)		3,072		(409)
Interest expense		(82,253)		(63,348)		(246,994)		(160,971)
Total other income (expense)		(84,716)		(63,714)		(243,120)		(161,196)

Income (loss) before income taxes		36,694		125,588		91,610		(11,818)
Income tax (expense) benefit		(11,438)		(20,098)		(12,542)		9,949

Net income (loss)		25,256		105,490		79,068		(1,869)

Components of comprehensive income (loss):
Foreign currency translation adjustment		989		(13,267)		(5,974)		(6,700)
Unrealized gain on available for sale securities		9,937		(23,914)		24,136		(18,318)

Comprehensive income (loss)	$	36,182	$	68,309	$	97,230	$	(26,887)

Net income (loss) per
common share – basic	$	.00	$	.01	$	.01	$	(.00)
- dilutive	$	.00	$	.01	$	.01	$	(.00)
Weighted average common
shares outstanding – basic		7,721,790		8,949,610		7,971,030		9,849,885
- dilutive		7,721,790		10,273,087		7,971,030		9,849,885

About International Monetary Systems
Founded in 1985, International Monetary Systems (IMS) serves 21,000 cardholders in 53 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.

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 9, 2012, and International Monetary Systems, Ltd. undertakes no duty to update this information.

Contact:
International Monetary Systems, Ltd., New Berlin, WI 
Company Contact:
John Strabley – CEO.
(800) 559-8515

SOURCE International Monetary Systems, Ltd.