International Monetary Systems Files 3rd Quarter Report

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NEW BERLIN, Wis.--(BUSINESS WIRE)-- International Monetary Systems, Ltd. (OTCBB: ITNM), a worldwide leader in business-to-business barter services, today announced that it has filed its 3rd quarter report on Form 10-Q.

HIGHLIGHTS

Operations

Cash provided by operations was $934,592 in 2011 compared to $404,525 in the first nine months of 2010, a 131% increase.

During the current year, the Company completed the purchase of two trade exchanges, one in Peterborough, Ontario and one in St. Louis, Missouri, adding approximately 900 members. It is expected that the additional offices will be immediately accretive.

During the current year, selling, general and administrative costs were reduced by $679,030, or 20.3%.

The Company has begun the process of registering in a number of states to offer IMS franchises.

Return to Shareholders

Management and the board of directors feel that the stock of the Company is significantly undervalued and presents an attractive opportunity to reinvest. In the first nine months of 2011, the following steps were taken to position the Company to take advantage of this opportunity:

The board of directors approved increases in the amount of stock that is authorized to be repurchased, granting management discretion to buy back the Company’s stock at up to $4.00 per share.

Financing was secured at attractive, flexible terms to allow for repurchase of shares without hindering operating cash flow.

1,528,078 shares of the Company’s stock have been repurchased so far this year under the Company’s stock repurchase back plan.

2,319,611 shares of Treasury stock have been retired through September 30, 2011, reducing the number of outstanding shares to 8,298,189.

CURRENT QUARTER

During the quarter ended September 30, 2011 International Monetary Systems (“IMS” or “the Company) generated revenues of $3,204,786, a decrease of $505,233 or 13.6%, compared to the third quarter of 2010. This decrease is almost entirely due to decreased trade dollar revenue, including a large non-recurring transaction in our media/corporate barter division which provided approximately $240,000 in trade dollar revenue in 2010.

Operating expenses in the quarter were $3,015,484 a decrease of $497,257 or 14.2% compared to the third quarter of 2010. This decrease is comprised of $95,000 of decreased occupancy expenses, a decrease of $160,000 in legal and professional fees, $42,000 less provision for uncollectable accounts and $50,000 less investor relations costs.

The net operating income was $189,302 for the quarter, compared to net operating income of $197,278 in the third quarter of 2010. After adjusting for interest and income taxes, net income for the current period was $105,490 compared to a net loss of $(37,642) in the third quarter of 2010.

EBITDA for the quarters ended September 30, 2011 and 2010 were as follows:

Adjustments to Reconcile GAAP Net Income to EBITDA
							2011				2010
Net income (loss)							$	105,490			$	(37,642	)
Interest expense								63,348				52,272
Income tax expense (benefit)								20,098				180,436
Depreciation and amortization								409,909				407,835
EBITDA							$	598,845			$	602,901

YEAR TO DATE

During the nine months ended September 30, 2011 IMS generated revenues of $9,516,767, a decrease of $1,050,839 or 9.9%, compared to the nine months ended September 30, 2010. The decrease is due to lower trade dollar revenue, including approximately $650,000 in large non-recurring transactions in our media/corporate barter division in 2010.

Operating expenses were $9,367,389, a decrease of $825,384 or 8.10%, compared to the nine months ended September 30, 2010.

This decrease is primarily due to decreased occupancy costs of $169,000, $390,000 less legal and professional fees expense, and $136,000 less in investor relations costs. These savings are partially offset by higher employee costs arising from higher health insurance and unemployment insurance costs as well as continued investment in our tele-selling model.

The net operating income was $149,378 for the nine months ended September 30, 2011, compared to a net operating profit of $374,833 in the same period of 2010. After adjusting for interest and income taxes, there was a net loss for the first nine months of 2011, of $(1,869) compared to a net loss of $(135,688) in the first nine months of 2010. The differences are the large non-recurring transactions described above offset by reductions in operating costs and income tax expense.

Cash flow from operations improved from $404,525 in the first nine months of 2010 to $934,592 in the first nine months of 2011, an increase of 231%. This is primarily due to increased utilization of trade dollars earned.

EBITDA for the nine months ended September 30, 2011 and 2010 were as follows:

Adjustments to Reconcile GAAP Net (Loss) to EBITDA
							2011					2010
Net (loss)							$	(1,869	)			$	(135,688	)
Interest expense								160,971					154,173
Income tax expense (benefit)								(9,949	)				354,235
Depreciation and amortization								1,228,623					1,218,853
EBITDA							$	1,377,776				$	1,591,573

INTERNATIONAL MONETARY SYSTEMS, LTD.
CONSOLIDATED BALANCE SHEETS
		September 30,						December 31,
		2011						2010
		(UNAUDITED)
ASSETS
Current assets
Cash			$	997,593				$	804,108
Restricted cash				244,403					41,829
Marketable securities				145,380					157,014
Accounts receivable, net				937,989					1,075,965
Earned trade account				168,211					285,282
Prepaid expenses				192,833					184,513
Total current assets				2,686,409					2,548,711
Other assets
Property and equipment, net				681,005					727,549
Membership lists and other intangibles, net				6,103,644					6,826,464
Goodwill				3,507,522					3,435,479
Assets held for investment				183,382					179,181
Total non-current assets				10,475,553					11,168,673
Total assets			$	13,161,962				$	13,717,384
LIABILITIES
Current liabilities
Accounts payable and accrued expenses			$	933,019				$	1,294,213
Credit lines, short term note, and current portion of long term debt				1,240,401					465,120
Current portion of convertible notes payable, related parties				70,000					-
Current portion of common stock subject to guarantee				591,000					640,000
Total current liabilities				2,834,420					2,399,333
Long-term liabilities
Long term debt, net of current portion				2,026,420					1,491,377
Convertible notes payable, related parties, net of current portion				255,000					120,000
Common stock subject to guarantee, net of current portion				-					178,500
Deferred compensation				290,000					290,000
Deferred income taxes				1,123,443					1,336,904
Total long-term liabilities				3,694,863					3,416,781
Total liabilities				6,529,283					5,816,114
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, 8,298,189 and 10,544,800
issued and outstanding September 30, 2011 and December 31, 2010, respectively				847					1,050
Paid in capital				9,398,350					13,542,436
Treasury stock, 170,851 and 904,049 shares respectively				(267,986	)				(3,170,571	)
Accumulated other comprehensive income (loss)				(8,900	)				16,118
Accumulated deficit				(2,489,632	)				(2,487,763	)
Total stockholders’ equity				6,632,679					7,901,270
Total liabilities and stockholders’ equity			$	13,161,962				$	13,717,384
See accompanying notes to consolidated financial statements.

INTERNATIONAL MONETARY SYSTEMS, LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
				Three Months Ended									Nine Months Ended
				September 30,									September 30,
				2011				2010					2011				2010
Net revenue				$	3,204,786			$	3,710,019				$	9,516,767			$	10,567,606
Operating expenses
Employee costs					1,879,594				1,918,628					5,681,577				5,660,553
Selling, general and administrative					725,981				1,117,097					2,457,189				3,136,219
Depreciation and amortization					409,909				407,835					1,228,623				1,218,853
Unusual items – cost of legal settlement					-				69,181					-				177,148
Total operating expenses					3,015,484				3,512,741					9,367,389				10,192,773
Income from operations					189,302				197,278					149,378				374,833
Other income (expense)
Loss on disposal of assets					(409	)			(2,274	)				(409	)			(2,274	)
Interest income					43				62					184				161
Interest expense					(63,348	)			(52,272	)				(160,971	)			(154,173	)
Total other income (expense)					(63,714	)			(54,484	)				(161,196	)			(156,286	)
Income (loss) before income taxes					125,588				142,794					(11,818	)			218,547
Income tax (expense) benefit					(20,098	)			(180,436	)				9,949				(354,235	)
Net income (loss)				$	105,490			$	(37,642	)			$	(1,869	)		$	(135,688	)
Net income (loss) per
common share	- basic			$	0.01			$	(0.00)				$	(0.00	)		$	(0.01	)
	- dilutive			$	0.01			$	(0.00)				$	(0.00	)		$	(0.01	)
Weighted average common
shares outstanding	- basic				8,949,610				10,529,191					9,849,885				10,434,718
	- dilutive				10,273,087				10,529,191					9,849,885				10,434,718

About International Monetary Systems

Founded in 1985, International Monetary Systems (IMS) serves 23,000 cardholders in 52 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.

International Monetary Systems, Ltd., New Berlin, WIJohn Strabley – CEO(800) 559-8515

Source: International Monetary Systems, Ltd.

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