Income from operations increases to $340,000 from $22,000 in 2009

BELLEVUE, Wash., Dec. 10 /PRNewswire-FirstCall/ -- ITEX Corporation (OTC Bulletin Board: ITEX), The Membership Trading Community(SM), a leading marketplace for cashless business transactions in North America, today filed its Form 10-Q with the Securities and Exchange Commission and announced results for its fiscal 2010 first quarter ended October 31, 2009.

"Income from operations increased more than 15 times over what we reported for the corresponding period last year; when we were investing in our strategic initiatives. We achieved growth in a number of areas during a very difficult economic time while many other businesses recognized declines," said Steven White, Chairman and CEO. "We realized a small increase in revenues for the quarter with expenses and earnings in line with what we anticipated, resulting in an increase in net income. Our cash from operations remained strong."

Mr. White continued, "As I conveyed in my annual letter to shareholders last week, our financial condition has never been stronger. We attribute our financial success in part to our disciplined, conservative and astute management of our finances; our ability to run the company with a lean, smart and dedicated staff; our hard-working broker network and their employees; and our understanding that in order to make forward leaps, we need to follow our entrepreneurial drive with fearless pursuit of opportunity. The upside for growth in our trading community is enormous and largely untapped, while our downside is limited due to the strength of our balance sheet, cash flow and proven revenue streams."

First Quarter 2010 Highlights

• Income from operations of $340,000 compared to $22,000 in the same period last year;
• Revenue of $3,924,000 compared to $3,899,000 in the same period last year;
• Net income of $277,000 compared to $45,000 in the same period last year;
• Cash at end of period was $3,098,000 compared to $2,557,000 on July 31, 2009;
• Stockholder equity of $14,271,000 compared to $13,981,000 in the same period last year;
• Sold our San Francisco, CA corporate owned office to an existing franchisee.

Subsequent Event

• In November, we entered into an agreement with U.S. Bank to increase the maximum loan amount under our revolving credit facility from $1.5 million to $2.5 million, to lower the interest rate to 2 1/4% (adjustable), and to extend the maturity date to November 30, 2010.

ITEX Corporation's report on Form 10-Q can be found at www.sec.gov.

About ITEX

ITEX, The Membership Trading Community(SM), is a thriving network of participating member businesses. Members increase sales through an exclusive distribution channel managed by franchisees, licensees and corporate-owned locations, by utilizing ITEX dollars to exchange goods and services. ITEX is powered by ITEX Payment Systems, the leading payment technology platform for processing cashless business transactions. ITEX is headquartered in Bellevue, WA. For more information, please visit ITEX's website at www.itex.com. We routinely post important information on the investor relations portion of our website.

                               ITEX CORPORATION
                         CONSOLIDATED BALANCE SHEETS
                 (In thousands, except per share amounts)

                                                      October 31, July 31,
                                                         2009       2009
                                                      (unaudited)
                                                      ----------- --------
                      ASSETS
Current assets:
     Cash and cash equivalents                            $3,098   $2,557
     Accounts receivable, net of allowance
      of $340 and $351                                       765      895
     Prepaid expenses                                        113       82
     Loans and advances                                       50       57
     Prepaid advertising credits                             157      157
     Deferred tax asset                                      739      739
     Notes receivable -corporate office
      sales                                                  225      242
     Other current assets                                     13       19
                                                             ---      ---
             Total current assets                          5,160    4,748

Property and equipment, net of
 accumulated depreciation of $320 and $280                   212      247
Intangible assets, net of amortization
 of $1,832 and $1,703                                      1,366    1,572
Deferred tax asset, net of current
 portion                                                   5,641    5,798
Notes receivable -corporate office
 sales, net of current portion                               768      624
Other long-term assets                                       366      354
Goodwill                                                   3,282    3,318
                                                           -----    -----
               Total assets                              $16,795  $16,661
                                                         =======  =======

       LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
         Accounts payable                                    $53      $98
         Commissions payable to brokers                      318      691
         Accrued commissions to brokers                      973      828
         Accrued expenses                                    656      521
         Deferred revenue                                    150      144
         Advance payments                                    132      138
                                                             ---      ---
             Total current liabilities                     2,282    2,420

Long-term liabilities:
       Other long-term liabilities                           242      260
                                                             ---      ---
Total Liabilities                                          2,524    2,680
                                                           -----    -----

Commitments and contingencies

Stockholders' equity:
     Common stock, $.01 par value; 50,000
      shares authorized;                                     181      179
     18,051 and 17,856 shares issued and
      outstanding, respectively
      Additional paid-in capital                          28,973   28,962
     Accumulated deficit                                 (14,883) (15,160)
                                                         -------  -------
         Total stockholders' equity                       14,271   13,981
                                                          ------   ------
                Total liabilities and stockholders'
                 equity                                  $16,795  $16,661
                                                         =======  =======

                              ITEX CORPORATION
                       CONSOLIDATED STATEMENTS OF INCOME
                    (In thousands, except per share amounts)

                            Three Months ended October 31
                                 2009             2008
                                 ----             ----
                             (unaudited)      (unaudited)
                             -----------      -----------
Revenue
         Marketplace revenue
         and other revenue      $3,924           $3,899

 Cost And expenses:
          Costs of
           marketplace
           revenue               2,549            2,522
          Corporate salaries,
           wages and
           employee benefits       411              510
          Selling, general
           and administrative      454              660
          Depreciation
           and amortization        170              185
                                   ---              ---
                                 3,584            3,877
                                 -----            -----

 Income from operations            340               22

        Interest, net               11               (2)
        Other                       99                -
                                   ---              ---
                                   110               (2)
                                   ---              ---

 Income before income taxes        450               20
        Provision for income
         taxes                     173              (25)
                                   ---              ---
 Net income                       $277              $45
                                  ====              ===

 Net income per common share
 Basic                           $0.02               $-
 Diluted                         $0.02               $-

 Average common and
 equivalent shares
 Basic                          17,856           17,720
 Diluted                        17,905           17,816

This press release contains forward-looking statements that involve risks and uncertainties concerning our expected performance (as described without limitation in the quotations from current management in this release) and comments 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 our franchise network; 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 December 10, 2009, and ITEX undertakes no duty to update this information.

For more information, please visit www.itex.com

SOURCE ITEX Corporation

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