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05/26/2009

IMS Quarterly Report Reveals Cash Flow, Operating Profits Increase

 

International Monetary Systems (OTCBB:INLM), a worldwide leader in business-to-business barter services, filed its first-quarter report on Form 10-Q. The three-month period ending March 31, 2009, showed much improvement in the firm�s financial performance.

 

During the past nine months, IMS made a great effort to achieve profitability by reducing payroll and other elements of overhead. As a result, net income from operations totaled $56,314 for the first quarter of 2009, and net cash provided by operating activities was $557,464, a substantial increase over all previous quarters. Operating profits (EBITDA) totaled $469,261, an improvement over past performances.

IMS reports that primarily due to the global recession, first quarter revenue of $3,351,224 declined 4.8% from the $3,518,839 generated in the first quarter of 2008, despite an increase in trade transactions of 2.1%, from $24,847,894 in the first quarter of 2008 to $25,369,715 in the first quarter of 2009. (U.S. gross domestic product declined 7.1% in 2008.) As in the general economy IMS members are experiencing declines in their businesses, with resulting reductions in discretionary and luxury spending.

Total expenses decreased from $3,828,108 in the first quarter of 2008 to $3,294,910 for the same period in 2009, a reduction in expenses of 13.9% This substantial decrease was achieved through payroll cuts and other overhead reductions. Over the past twelve months, IMS has trimmed its work force by 40 people, without substantial revenue reduction.
 

The resulting net profit from operations was $56,314 for the first three months of 2009, compared to a loss of $309,269 for the same period last year. After deducting non-cash expenses such as depreciation, amortization, bad-debt expense and stock issued for services rendered, the loss before income taxes was just $1,369, compared to a loss of $371,407 for the same period of 2008.

After deducting current and deferred income taxes, the net loss in the first three months of 2009 was $54,369, compared to $230,907 last year, which was net of a deferred tax benefit. The deferred tax represents the adjustment to the deferred tax liability, which arises primarily from the differences in basis of acquired membership lists for financial reporting versus tax reporting.

For this year�s quarter, net cash provided by operating activities totaled $557,464, compared to $43,457 for the first quarter of 2008. A portion of this substantial increase was the result of one-time occurrences. Management, however, expects improvements in cash flow throughout the year, as effects of cost reductions are fully realized. Furthermore, third and fourth quarter revenues are typically significantly higher than the first quarter.

Operating profit or EBITDA (earnings before interest, taxes, depreciation and amortization) this quarter totaled $469,261, an increase of 406% from the $92,674 reported for the first quarter of 2008.

Liquidity, Sources of Capital and Lines of Credit

On March 31, 2009, current assets were $2,151,542, and total assets were $15,978,055. Current liabilities were $2,994,553 and total liabilities were $8,004,458, resulting in total shareholder equity of $7,973,597.

At the end of the first quarter of 2009, the company�s unrestricted cash balance was $519,648 compared to $279,227 on December 31, 2008.

CEO Don Mardak, commented, �We are very pleased with International Monetary Systems� first-quarter results. The numbers demonstrate the progress that we have made in our quest for profitability. We believe that our lower overhead and ongoing strong sales should enable us to continue showing similar improvements in the months ahead, in spite of the current economic environment.�

For more information visit www.imsbarter.com.



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