International Monetary Systems Files its Annual Report
Barter Firm returns to Profitability, EBITDA and Operating Cash Flow are Strong
NEW BERLIN, Wis., March 13, 2012 /PRNewswire/ -- International Monetary Systems Ltd. (OTCBB:ITNM) has filed its 2011 annual report on Form 10-K. The year was one of the best in the company's history, relative to operating income, cash flow and profitability.
Following are some of the highlights of 2011:
Return to Shareholders
- During the year, 1,789,437 shares of the Company's outstanding common stock were repurchased into treasury. This represents approximately 17% of the outstanding shares of the Company as of January 1, 2011
- The Company's stock generally traded in a higher range in 2011 than in 2010, hitting a new 52-week high of $3.34 per share.
Operations
- In 2011, the Company produced income from operations of $515,675, compared to an operating loss of $333,620 last year.
- International Monetary Systems, Ltd. had EBITDA (earnings before interest, taxes, depreciation and amortization) of $2,171,976 or approximately $.23 per share, compared to EBITDA of $1,297,547 in 2010.
- Cash flow from operations totaled approximately $1,519,000 or $.16 per share.
- Several regional offices were relocated, resulting in savings in occupancy expenses of approximately $250,000.
- Trade exchanges in two additional markets, St. Louis, MO and Peterborough, Ontario, were acquired in 2011, adding approximately 800 new members to the IMS network.
- Throughout the year, the Company continued to significantly improve its new TNT barter software, which allows for enhanced sales, operating and reporting efficiencies.
RESULTS OF OPERATIONS
Net cash flows from operations totaled $1,518,776 in 2011 compared to $960,630 in 2010.
EBITDA (earnings before interest, taxes, depreciation and amortization) was $2,171,976 in 2011 versus $1,297,547 in 2010.
Adjustments to reconcile GAAP Net Income (Loss) to EBITDA |
|||
2011 |
2010 |
||
Net income (loss) |
$ 172,173 |
$ (490,133) |
|
Interest expense |
233,739 |
200,642 |
|
Taxes |
108,759 |
(42,118) |
|
Depreciation & amortization |
1,333,792 |
1,629,156 |
|
Total EBITDA |
$2,171,976 |
$1,297,547 |
|
Revenue
During the year ended December 31, 2011, IMS processed approximately $210 million in billable trade purchase and sales transactions, generating gross revenue of $13,481,858 compared to $14,219,874 in 2010. The 5.2 % decrease is primarily due to approximately $600,000 of non-recurring trade dollar sales in 2010.
Operating Expenses
Total other operating expenses decreased to $12,966,183 from $14,553,494 in 2010, a 12.2% decrease. The main elements of the cost savings were a $250,000 decrease in occupancy costs due to relocation of several offices; elimination of approximately $600,000 of professional fees incurred in 2010 associated with settling litigation, tax audits and abandonment of a secondary stock offering; $200,000 of reduced investor relations consulting; and $220,000 of legal settlement expense. We continue to see savings from the continuation of a cost containment and realignment exercise where redundant costs in acquired markets were eliminated and the Company's outside sales force was restructured and reduced.
Employee costs decreased 2.4% from $7,949,398 in 2010 to $7,758,710 in 2011, primarily due to payment of a payroll tax audit settlement in 2010.
Occupancy expenses, included in selling, general and administrative costs, decreased by approximately $250,000 due to consolidation of some offices and relocation to smaller facilities for others.
In 2010, other general and administrative expenses decreased, due primarily to the non-recurring professional fees and legal settlement expenses described above.
FINANCIAL CONDITION
LIQUIDITY, COMMITMENTS FOR CAPITAL RESOURCES, AND SOURCES OF FUNDS
In 2011, senior management and the board of directors believed the Company's stock was undervalued and a stock buyback program was a good way to enhance shareholder value. Additional debt was issued to fund the majority of the buyback program.
The Company also expects to achieve a number of enhancements to cash flow that will result in 2012 as follows:
- In 2011, IMS produced positive cash flows from operations of approximately $1,518,000. Our principal source of liquidity from operations has been cash earnings from membership charges, monthly service fees and transaction processing charges. The recently acquired St. Louis market is expected to add to cash flows from operations over the course of a full year.
- In 2012, the final payments will be made on stock buyback guarantees arising from the purchase of several markets. This is expected to improve cash flow by approximately $400,000 in 2012 relative to 2011.
- In December 2011, the final payment was made on a legal settlement. Conclusion of these payments is expected to improve cash flow by $240,000 in 2012 relative to 2011.
INTERNATIONAL MONETARY SYSTEMS, LTD. CONSOLIDATED BALANCE SHEETS December 31, 2011 and 2010 |
|||
2011 |
2010 |
||
ASSETS |
|||
Current assets |
|||
Cash |
$ 1,018,250 |
$ 804,108 |
|
Restricted cash |
206,956 |
41,829 |
|
Marketable securities |
162,323 |
157,014 |
|
Accounts receivable, net |
1,006,278 |
1,075,965 |
|
Earned trade account |
210,582 |
285,282 |
|
Prepaid expenses |
188,715 |
184,513 |
|
Total current assets |
2,793,104 |
2,548,711 |
|
Property and equipment, net |
651,118 |
727,549 |
|
Membership lists and other intangibles, net |
5,718,435 |
6,826,464 |
|
Goodwill |
3,507,522 |
3,435,479 |
|
Assets held for investment |
169,031 |
179,181 |
|
Total non-current assets |
10,046,106 |
11,168,673 |
|
Total assets |
$ 12,839,210 |
$13,717,384 |
|
LIABILITIES |
|||
Current liabilities |
|||
Accounts payable and accrued expenses |
$ 1,091,823 |
$ 1,294,213 |
|
Credit lines, short term notes, and current portions of long term debt |
1,009,897 |
465,120 |
|
Current portion of common stock subject to guarantee |
418,495 |
640,000 |
|
Current portion of convertible notes payable to related parties, including short |
90,000 |
- |
|
Total current liabilities |
2,610,215 |
2,399,333 |
|
Long-term liabilities |
|||
Long term debt, net of current portion |
2,159,434 |
1,491,377 |
|
Common stock subject to guarantee, less current portion |
-- |
178,500 |
|
Convertible notes payable to related parties, less current portion |
275,000 |
120,000 |
|
Deferred compensation |
290,000 |
290,000 |
|
Deferred income taxes |
1,015,325 |
1,336,904 |
|
Total long-term liabilities |
3,739,759 |
3,416,781 |
|
Total liabilities |
6,349,974 |
5,816,114 |
|
Commitments and contingencies |
|||
STOCKHOLDERS' EQUITY |
|||
Preferred stock, $.0001 par value, 20,000,000 authorized, 0 issued and outstanding |
-- |
-- |
|
Common stock, $.0001 par value 280,000,000 authorized 8,097,017 and 10,544,800 issued and outstanding at December 31, 2011 and 2010, respectively |
810 |
1,050 |
|
Paid in capital |
9,137,003 |
13,542,436 |
|
Treasury stock, 172,703 and 904,049 shares, respectively |
(351,614) |
(3,170,571) |
|
Accumulated other comprehensive income |
18,615 |
16,118 |
|
Accumulated deficit |
(2,315,578) |
(2,487,763) |
|
Total stockholders' equity |
6,489,236 |
7,901,270 |
|
Total liabilities and stockholders' equity |
$ 12,839,210 |
$ 13,717,384 |
|
INTERNATIONAL MONETARY SYSTEMS, LTD. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) Years Ended December 31, 2011 and 2010 |
|||
2011 |
2010 |
||
Gross revenue |
$ 13,481,858 |
$ 14,219,874 |
|
Operating Expenses |
|||
Employee costs |
7,758,710 |
7,949,398 |
|
Selling, general and administrative |
3,551,172 |
4,572,853 |
|
Depreciation and amortization |
1,656,301 |
1,629,156 |
|
Unusual items - cost of legal settlements |
-- |
402,087 |
|
Total operating expenses |
12,966,183 |
14,553,494 |
|
Income (loss) from operations |
515,675 |
(333,620) |
|
Other income (expense) |
|||
Gain (loss) on disposal of assets |
(3,534) |
-- |
|
Interest income |
2,542 |
2,011 |
|
Interest expense |
(233,739) |
(200,642) |
|
Total other income (expense) |
(234,731) |
(198,631) |
|
Income (loss) before income taxes |
280,944 |
(532,251) |
|
Income tax (expense) benefit |
(108,759) |
42,118 |
|
Net income (loss) |
172,185 |
(490,133) |
|
Components of comprehensive income (loss): |
|||
Unrealized gain on available for sale investments |
(5,454) |
16,685 |
|
Foreign currency translation gain |
7,951 |
10,014 |
|
Comprehensive net income (loss) |
$ 174,682 |
(463,434) |
|
Net income (loss) per |
|||
common share – basic |
$ 0.02 |
$ (0.04) |
|
– dilutive |
$ 0.02 |
$ (0.04) |
|
Weighted average common |
|||
shares outstanding – basic |
9,431,654 |
10,462,465 |
|
– dilutive |
10,618,605 |
10,462,465 |
|
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.
FORWARD-LOOKING STATEMENT
This press release contains certain "forward-looking" statements, as defined in the United States Private Securities Litigation Reform Act of 1995 that involve a number of risks and uncertainties. Statements, which are not historical facts, are forward-looking statements. The Company, through its management, makes forward-looking public statements concerning its expected future operations, performance and other developments. Such forward-looking statements are necessarily estimates reflecting the Company's best judgment based upon current information and involve a number of risks and uncertainties, and there can be no factors that could cause actual results to differ materially from those estimated by the Company. They include, but are not limited to, the Company's ability to develop operations, the Company's ability to consummate and complete the acquisition, the Company's access to future capital, the successful integration of acquired companies, government regulation, managing and maintaining growth, the effect of adverse publicity, litigation, competition, sales and other factors that may be identified from time to time in the Company's public announcements.
Contact:
Investor Relations:
DME Capital, LLC
Steven Marcus
917-648-0663 or [email protected]
International Monetary Systems, Ltd., New Berlin, WI
Company Contact:
John Strabley – CEO.
(800) 559-8515
SOURCE International Monetary Systems Ltd.
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