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March 18, 2003

Written by Bob Meyer, Editor of BarterNews

Surge In Attendance At NATE Convention Reported

The National Association of Trade Exchanges reports that their upcoming national convention next month in Atlanta, April 10-12,is running 50% ahead of last year's attendance. Forty-six exchanges have registered for the event, and last minute attendees are expected to push the total higher. For information: www.nate.org.


ITEX Announces Second Quarter Earnings

Proxy Fight Proves Costly To Company

For the quarter ending January 31, 2003, ITEX (OTCBB:ITEX) generated net income of $3,000, compared to a net loss of $155,000 for the same period last year.

Earning before interests, taxes, depreciation and amortization (EBITDA) for the quarter were $150,000 compared to $28,000 for the same period last year. Revenue from the trade exchange increased 4.1% to $109,000 from the prior year's quarter.

CEO Spike Humer noted, "Our second quarter was impacted by several non-recurring events, most notably the proxy contest. While we absorbed $151,000 in costs this quarter related to a contested election of directors, we will benefit by the substantial on-going savings and the increased cash flow resulting from the greatly reduced board compensation.

"Operationally," he continued, "we will continue to restructure and to reinvest in our infrastructure to strive for maximum efficiency and effectiveness for both the immediate future and our long-term growth.

"In the last six fiscal quarters, our highest non-asset producing costs were director, legal, and professional fees related to matters outside of our core business and routine operations. Given the changes in the latter part of the second quarter, we should be better positioned to invest in revenue producing and asset sustaining activities." For more information: www.itex.com.


Kuznik Joins Jim Pattison Trade Group

One of the barter industry's real professionals is Frank Kuznik. Two years ago he ran the BarterNet Inter-Exchange program, he then took over the Canadian operations of Intagio. Now he is working for one of Canada's most famous entrepreneurs—74-year-old Jim Pattison, whose interests in billboards, grocery stores, and auto dealerships are worth $2.2 billion.

Kuznik is representing the Jim Pattison Trade Group—which consists of some 50 different companies and 25,000 employees—and looking to expand their barter efforts. Companies wanting to trade with the Pattison companies should contact Kuznik. (416) 977-1771 ext. 227, or check their web site: www.jptradegroup.com.

Editor's Note: In 1995 Jim Pattison bought Frank Sinatra's Palm Springs house, with its 32 bathrooms, and now uses it to entertain business associates. He also has a 150-foot yacht, Nova Spirit, in Vancouver's Howe Sound.


More Media Ahead...College Sports Television

Intercollegiate sports will soon be broadcast round-the-clock on College Sports Television (CSTV). The creator of the new programming is Brian Bedol, who in 1995 created Classic Sports Network which became ESPN Classic two years later and now reaches 47 million homes.

Bedol's channel is backed by $100 million in private equity from athletes like Tiki Barber, Kevin Garnett and Joe Namath. CSTV is one of a slew of new sports channels planning a 2003 launch on digital and satellite cable.

You won't see big sporting events on any of them, as the national networks hold those rights. But CSTV and the others can afford inexpensive
programming because their costs are low. In short, they're paying next to nothing, if anything at all, for the rights, because colleges want the exposure.

So, receiving around 7¢ per month for each subscriber (ESPN gets $2 a month) from the cable operators will still be profitable. CSTV is previewing in 25 million homes now, and will be launching on digital and satellite cable on April 7.

Editor's Note: Other new sports channels vying to attract the nation's 87 million cable subscribers include: BlackbeltTV—which will show Thai kickboxing championships, martial arts workouts and reruns of Bruce Lee flicks; the Tennis Channel—with Andre Agassi and Pete Sampras among the backers; the Ice Channel—which will feature skating news, a soap opera, a cooking show (Skate 'N Bake) and a cartoon; the Football Network--consisting of Pop Warner, junior college, and European games.


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Here And There. . .
  • ITEX reports its newest franchisees are Chris Nater and Robert Knight in Albuquerque. Plus Patrick and Mike Newman in Denver. Three previously announced areas include Melbourne (FL), Atlanta (GA) and Lincoln (NE). The second franchise broker training session is scheduled for March 31 to April 4.

    According to CEO Spike Humer, their investment of time, energy, and expertise in the franchise program is beginning to show the expected return in the projected time frame. For more information: www.itex.com.

  • According to the highly esteemed University of Michigan's Index of Consumer Sentiment, Americans over age 55 are the ones whose confidence is falling markedly. Close to retirement, they had more money in the stock market, lost more, and have less time to make up for it.

    This group, which accounts for more than 25% of national consumer spending, is postponing major purchases...which could lead to another softening in the economy.

  • Have you signed up to receive a summary via e-mail of the Tuesday Report every week? If not, go to the top of this issue (right hand corner) to sign up!

  • National broadcasters will soon begin selling commercial time for the fall season in the so called "Upfront Market." And it looks like confidence in the coming TV season, debuting in mid-September, will be strong again. Last year there was a 17% increase from 2001; this year prices are expected to increase around 15%.

    (Reportedly, the nation's big marketers believe Americans will resume spending post-war. The perception is that any war will be short.)

  • Hotel loan delinquencies are the highest they've been since the early 1990s and they're expected to rise sharply this year, according to PKF Consulting's Hospitality Research Group in Atlanta. PKF recently examined the financial statements of 3,900 hotels and found that a growing number (19.8%) are unable to cover the interest on their loans with operating income.

  • Experts say Japan has the world's finest elementary schools, and Germany has outstanding high schools, but no country can touch USA's 2,500 colleges and universities. American higher education is a $14 billion export, with more than 550,000 foreign students studying in the United States.

    We spend a lot of tax dollars selling American agricultural products abroad, yet the experience of spending even a single summer semester on a U.S. college campus not only helps our trade deficit, it wins life-long friends for the United States.

  • A report by Washington's Inter-American Development Bank shows that guest workers (emigrant workers) in the U.S. are sending money home at a rate equal to direct foreign investments in Latin America. Money sent home has increased 60% since 2000, and topped $32 billion in 2002.

  • The Financial Accounting Standards Board (the body that sets the nation's accounting standards) voted to add to its agenda the issue of how stock options are accounted for, and to coordinate its efforts with an international accounting group.

    (Under current rules, implemented as a compromise in the mid-1990s, companies only have to disclose the theoretical value of stock options in the footnotes of their financial statements.

We welcome your comments, questions, and observations.
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