ITEX Announces Results for Third Quarter of Fiscal Year 2012

News provided by

Jun 14, 2012, 05:05 ET

BELLEVUE, Wash., June 14, 2012 /PRNewswire/ -- ITEX Corporation (OTCBB: 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 2012 third quarter ended April 30, 2012.

"I am pleased to report that transaction fees increased 9% and 5%, respectively, for the three and nine month periods ended April 30, 2012, as compared to the same periods last year. In addition, we managed our costs efficiently, reducing selling, general and administrative expenses by $167,000 and $381,000 or 28% and 19%, respectively, for the three and nine month periods ended April 30, 2012, as compared to the same periods last year," stated Steven White, Chairman and CEO.

Mr. White concluded, "In April we completed a tender offer of our common stock, purchasing and retiring 1,072,808 shares, which provided a liquidity event and return of capital to stockholders."

Third Quarter 2012 Highlights

Revenue of $3.787 million compared to $3.960 million in the same period last year
Income from operations of $324,000 compared to $388,000 in the same period last year
Selling, general and administrative expenses decreased to $435,000 from $602,000
Repurchased 1,072,808 shares for $4,505,793
Paid a $0.04 per share cash dividend in March.

Subsequent Event
On June 1, 2012, the Board of Directors of ITEX Corporation declared a quarterly cash dividend of $0.04 per share payable on June 20, 2012, to stockholders of record as of the close of business on June 11, 2012.

About ITEX
ITEX, The Membership Trading Community(SM), is a leading marketplace for cashless business transactions. Members increase sales through an exclusive distribution channel managed by our broker and franchise network, by utilizing ITEX dollars to exchange goods and services. We generate revenue by charging members percentage-based transaction fees and association fees. ITEX is headquartered in Bellevue, WA. We routinely post important information on the investor relations portion of our website. For more information, please visit www.itex.com.

This press release contains forward-looking statements that involve risks and uncertainties concerning our expected performance 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: our revenue growth and success being tied to the operations of our broker network; our future revenue growth remaining uncertain; adverse effects of a proxy fight and related litigation; our business being subject to online security risks; our brokers defaulting on their loans; unplanned system interruptions or system failures; claims and lawsuits against us that may result in adverse outcomes; 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, which are available at www.sec.gov. ITEX undertakes no duty to update or revise any forward-looking statements.

For more information, please visit www.itex.com.

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

	April 30, 2012	July 31, 2011
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$ 922	$ 5,386
Accounts receivable, net of allowance of $308 and $354	1,157	805
Prepaid expenses	109	131
Loans and advances	44	10
Prepaid advertising credits	8	60
Deferred tax asset, net of allowance of $22 and $22	798	798
Notes receivable	309	180
Other current assets	26	6
Total current assets	3,373	7,376

Property and equipment, net of accumulated depreciation of $419 and $468	50	89
Goodwill	3,191	3,266
Deferred tax asset, net of allowance of $130 and $130, and net of current portion	4,252	4,681
Intangible assets, net of accumulated amortization of $2,884 and $2,691	586	855
Notes receivable, net of current portion	1,316	729
Other long-term assets	19	25
Total assets	$ 12,787	$ 17,021

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts and other expenses payable	$ 66	$ 76
Commissions payable to brokers	-	669
Accrued commissions to brokers	1,393	785
Accrued expenses	371	545
Deferred revenue	28	47
Advance payments	106	133
Total current liabilities	1,964	2,255

Long-term liabilities:
Other long-term liabilities	11	8
Total Liabilities	1,975	2,263

Commitments and contingencies

Stockholders' equity:
Common stock, $0.01 par value; 9,000 shares authorized; 2,611 and 3,646 shares issued and outstanding, respectively	26	36
Additional paid-in capital	25,114	29,452
Stockholder Note Receivable	(512)	(585)
Accumulated deficit	(13,816)	(14,145)
Total stockholders' equity	10,812	14,758
Total liabilities and stockholders' equity	$ 12,787	$ 17,021

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

		Three-Months Ended April 30,		Nine-Months Ended April 30,
		2012	2011	2012	2011

Revenue:
	Marketplace revenue and other revenue	$ 3,787	$ 3,960	$ 11,986	$ 12,490

Costs and expenses:
	Cost of Marketplace revenue	2,445	2,336	7,763	7,578
	Corporate salaries, wages and employee benefits	509	487	1,481	1,504
	Selling, general and administrative	435	602	1,655	2,036
	Depreciation and amortization	74	147	239	456
		3,463	3,572	11,138	11,574

Income from operations		324	388	848	916

Other income (expense)
	Interest, net	25	13	75	33
	Other income/(expense), net	-	-	312	33
		25	13	387	66

Income before income taxes		349	401	1,235	982

	Income tax expense	119	162	421	389

Net income		$ 230	$ 239	$ 814	$ 593

Net income per common share:
	Basic	$ 0.07	$ 0.07	$ 0.23	$ 0.17
	Diluted	$ 0.07	$ 0.07	$ 0.23	$ 0.16

Weighted average shares outstanding
	Basic	3,486	3,611	3,590	3,590
	Diluted	3,488	3,634	3,591	3,630