International Monetary Systems Annual Report

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New Berlin, Wisconsin, April 05, 2010 — International Monetary Systems, Ltd. (OTCBB: ITNM), a worldwide leader in business-to-business barter services, has filed its 2009 Annual Report on form 10-K. 2009 was a very successful year for International Monetary Systems. Contrary to the results for many other companies in this very difficult economic downturn, IMS had the most profitable year in its history. The Company effectively streamlined operations, while continuing to build infrastructure.

Following are some of the highlights of 2009:

Operations

  • IMS had operating income or EBITDA (earnings before interest, taxes, depreciation and amortization) of $2,252,138 or $.23 per share.
  • Cash flow from operations totaled approximately $2,155,000 or $.22 per share.
  • Income from operations totaled $539,305, compared to a loss of $1,244,536 last year.
  • Total liabilities were reduced by $1,776,133 since the end of 2008.
  • Total operating expenses were reduced by $2,019,239 during the same period.
  • Payroll expenses were reduced by $1,755,903 from 2008, with no reduction in cash revenue from transactions fees.
  • The Company continued to make progress in upgrading its website. One of the most significant improvements is the growing use of the online marketplace, where sales volume continues to hit new records.

Management believes that all of these achievements continue to portend a great future for International Monetary Systems, even in these very trying economic times.

RESULTS OF OPERATIONS

Net cash flows from operations totaled $2,155,283 in 2009, compared to $610,238 in 2008.

EBITDA (earnings before interest, taxes, depreciation and amortization)

EBITDA grew 286% in 2009 to $2,252,138, compared to EBITDA of $593,728 in 2008.

EBITDA Calculation
2009 2008
Net profit (loss) $ 206,817 $(940,521)
Interest expense 228,936 275,332
Taxes 104,206 (594,222)
Depreciation & amortization 1,631,809 1,643,534
Impairment 80,370 209,605
Total EBITDA $2,252,138 $593,728

These markedly improved operating results were due to solid revenue levels retained in a slow economy, enhanced by reduced operating expenses.

Cash Flows from Operations

Revenue

During the year ended December 31, 2009, IMS processed more than $109 million in trade sales transactions, generating gross revenue of $13,968,152, compared to $14,203,550 in 2008. Most of the minimal decline in revenue was experienced in the corporate barter division, resulting in a lowering of trade revenue. While revenue from the corporate division has decreased year over year, as operated, it is an incrementally less significant segment of business.

Reduced Operating Expenses

Beginning in late 2008, and continuing throughout 2009, management implemented a cost reduction and containment program with very successful results.

Total operating expenses decreased from $15,448,086 in 2008 to $13,428,847 for the year ended December 31, 2009, a reduction of 13.1%. This decrease is due to 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.

Payroll expenses decreased 18.6% from $9,483,364 in 2008 to $7,727,461 in 2009, due to the aforementioned reduction in sales force and a temporary wage reduction for senior management and several key employees.

Occupancy expenses increased from $1,078,288 to $1,208,104, or 12.1%, due to having expense for the entire year in 3 markets acquired in 2008.

Selling expenses decreased 20.9%, from $840,926 in 2008 to $665,394 in 2009. The decrease in selling expenses was a direct result of the Company realigning its sales force.

In 2009, general and administrative expenses were essentially flat, totaling $2,041,020, compared to $2,014,856 last year.

At December 31, 2009, the Company had a net profit of $206,817

CHANGES IN ASSETS AND LIABILITIES

During 2009 cash balances increased to $894,396 from $279,227 in 2008. At the end of 2009, accounts receivable, net of allowance for doubtful accounts, totaled $1,201,403, compared to $1,401,383 at the end of 2008. Total current assets increased from $2,460,261 on December 31, 2008 to $2,630,179 at the end of 2009.

Other assets decreased by $1,492,928, and total assets decreased from $16,772,946 in 2008 to $15,314,883 on December 31, 2009, because of depreciation and amortization.

Current liabilities decreased by $804,496, or 22.2%, from $3,634,068 in 2008 to $2,829,572 at the end of 2009, as the current maturities of many notes were paid off or renegotiated to allow for better use of operating cash flow.

Current and long-term notes payable consist of various notes to former owners of acquired trade exchanges, or to investors who funded the acquisitions. At the end of 2009, long-term debt was $4,148,010 compared to $5,119,647 in 2008, a decrease of $971,637, or 19%. Total liabilities decreased 20.8%, from $8,753,715 in 2008 to $6,977,528 at the end of 2009.

Common stock and paid-in capital increased from $11,703,201 in 2008 to $12,773,934 in 2009. Treasury stock increased from $1,403,216 (387,090 shares) in 2008 to $2,428,422 (646,095 shares) in 2009. Total shareholder equity increased 4.0%, from $8,019,231 in 2008 to $8,337,301 on December 31, 2009.

To read the full 10-K report, please go to www.sec.gov.

CEO Don Mardak commented: “We are extremely pleased with the fabulous year IMS had in 2009. Our commitment to reducing expenses while still upholding our revenue stream, combined with the remarkable work of our dedicated employees, has made all of this possible. I cannot thank them enough. We believe that the stage has been set for even greater achievements in the future.”

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