ITEX Announces Results for Second Quarter of Fiscal 2010
Income from Operations Increases 124%
Revenue Increases 4%
BELLEVUE, Wash., March 9 /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 second quarter ended January 31, 2010.
"Our quarterly results recognized gains in all key areas; most notably in revenue and income from operations compared to last year's second quarter, and in our cash position compared to our 2009 fiscal year end," said Steven White, Chairman and CEO. "Revenue growth was primary due to our media and web services initiatives and in part to an increase in association fee revenue. Income from operations increased as a result of revenue growth and reduced operating expenses. Our cash position increase reflected our operational income and the retirement of debt from acquisitions. In the second quarter of the prior year, $928,000 was used for acquisition loan repayments."
Mr. White continued, "Non-traditional digital currencies that supplement or replace cash, check and credit card transactions are gaining in popularity in a variety of business models. ITEX has a proven technology platform utilizing a digital currency for B2B transactions. We will continue to expand our presence in the cashless processing marketplace by improving our services to members and franchisees, enhancing our technology platform and website, and expanding our web services initiative. Our strong financial position provides us the ability to consider a variety of opportunities to expand our market share, enhance our technology and increase shareholder value. We will continue to manage our finances in a disciplined and prudent manner while investing in our future to ensure our continued success."
Second Quarter 2010 Highlights
- Income from operations of $526,000 compared to $235,000 in the same period last year;
- Revenue of $4,537,000 compared to $4,365,000 in the same period last year;
- Net income of $172,000 compared to $134,000 in the same period last year;
- Cash at end of period of $3,627,000 compared to $2,557,000 on July 31, 2009;
- Stockholder equity of $14,460,000 compared to $13,981,000 on July 31, 2009;
- Broker incentive expense of $79,000 for a computer upgrade initiative planned in conjunction with the upcoming launch of Office 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)
January 31, 2010 July 31, 2009
(unaudited)
--------- ---------
ASSETS
Current assets:
Cash and cash equivalents $3,627 $2,557
Accounts receivable, net of
allowance of $330 and $351 1,234 895
Prepaid expenses 194 82
Loans and advances 62 57
Prepaid advertising credits 157 157
Deferred tax asset 739 739
Notes receivable - corporate
office sales 164 242
Other current assets 12 19
------ ------
Total current assets 6,189 4,748
Property and equipment, net of
accumulated depreciation of $358 and $280 171 247
Intangible assets, net of amortization
of $1,956 and $1,703 1,242 1,572
Deferred tax asset, net of current portion 5,543 5,798
Notes receivable - corporate office sales,
net of current portion 514 624
Other long-term assets 337 354
Goodwill 3,282 3,318
------ ------
Total assets $17,278 $16,661
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $113 $98
Commissions payable to brokers 372 691
Accrued commissions to brokers 1,268 828
Accrued expenses 592 521
Deferred revenue 125 144
Advance payments 124 138
------ ------
Total current liabilities 2,594 2,420
Long-term liabilities:
Other long-term liabilities 224 260
------ ------
Total Liabilities 2,818 2,680
------ ------
Commitments and contingencies
Stockholders' equity:
Common stock, $.01 par value; 50,000
shares authorized; 17,887 and 17,856
shares issued and outstanding,
respectively 181 179
Additional paid-in capital 28,990 28,962
Accumulated deficit (14,711) (15,160)
------ ------
Total stockholders' equity 14,460 13,981
------ ------
Total liabilities and
stockholders' equity $17,278 $16,661
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ITEX CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Three Months ended January 31
2010 2009
(unaudited) (unaudited)
--------- ---------
Revenue
Marketplace revenue and other revenue $4,537 $4,365
Cost and expenses
Costs of marketplace revenue 2,907 2,779
Corporate salaries, wages and
employee benefits 479 455
Selling, general and administrative 462 707
Depreciation and amortization 163 189
------ ------
4,011 4,130
------ ------
Income from operations 526 235
Other income (expense)
Net interest 10 7
Gain (loss) on sale of assets (257) -
------ ------
(247) 7
------ ------
Income before income taxes 279 242
Provision for income taxes 107 108
------ ------
Net income $172 $ 134
====== ======
Net income per common share
Basic $0.01 $0.01
Diluted $0.01 $0.01
Average common and equivalent shares
Basic 17,873 17,756
Diluted 17,892 17,858
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 March 9, 2010, and ITEX undertakes no duty to update this information.
For more information, please visit www.itex.com
SOURCE ITEX Corporation
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