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ITEX ANNOUNCES RESULTS FOR SECOND QUARTER OF 2008
Bellevue, WA March 3, 2008ITEX Corporation (OTCBB: ITEX), The Membership Trading Community
"We are pleased to report a 14% increase in second quarter revenue over the same quarter last year. Increased revenue positively impacted net cash provided by operating activities which increased a remarkable 141% for our second quarter over the same quarter last year, said Steven White, Chairman and CEO. The second quarter is historically strong due to holiday events and year-end business spending. Contributing to this quarter's results are our three corporate-managed offices that are showing steady increases in enrollment and transaction volume."
"Quarter after quarter, we have been able to report positive net cash provided by operating activities. During the second quarter, we received 87% of our net payments from our Marketplace members electronically, via credit card or electronic funds transfer (EFT). EFT enables us to collect payments sooner and lessens the likelihood of non-payments. Strong cash flow has been an important component in helping us complete three key acquisitions, buy back and retire our common stock, and pursue initiatives to increase future revenues."
White continued, "Several of our revenue initiatives over the last twelve months are beginning to gain traction, including our hiring of an industry veteran as our national sales manager and engaging a seasoned new member registration individual in our Chicago location. Expenses for corporate salaries, wages and employee benefits and selling, general and administrative have increased over last year as we invest in new revenue generating activities; however, as a percentage of revenue these expenses have trended downward from 41% in 2003 to 22% today. While continuing to refine and enhance our current initiatives, we will be devoting resources to our newest revenue generating initiative, Software as a Service (SaaS), which we announced last week. We believe the SaaS program launch has great potential. The Board and I are committed to taking proactive and measured steps to strengthen and enhance the value of your company."
Second Quarter 2008 Highlights
- Revenue was $4,175,000 in 2008 compared to $3,665,000 for the second quarter in 2007, a 14% increase. Revenue for first six months of 2008 was $8,028,000 compared to $7,455,000 in the same period in 2007, an 8% increase.
- For the quarter and six month period, we generated revenue from our acquisition of Intagio assets of $352,000 and $639,000, respectively, and $119,000 and $211,000 in organic growth from existing operations, respectively.
- Net cash provided by operating activities for the second quarter increased to $1,018,000 from $423,000 for the same period in 2007, a 141% increase. For the six month period ended January 31, 2008, net cash provided by operating activities increased 31% to $1,785,000 from $1,367,000 for the same period in 2007.
- Stockholders' equity increased $413,000 or 3% to $12,754,000 at January 31, 2008 from October 31, 2007. Cash and cash equivalents increased to $1,091,000 at January 31, 2008 from $254,000 at October 31, 2007.
- Income from operations excluding the non-cash items of stock-based compensation, depreciation and amortization was $671,000 or 4 cents per share for the second quarter of 2008 and $1,128,000 or 6 cents per share for the six month period of 2008.
- New member registrations increased 28% to 632 in the second quarter from 492 in the same period last year, and for the six month periods, registrations increased 19% to 1,588 from 1,333.
- We acquired a 15% equity position in MyTypes, Inc., a Seattle-based technology and small business blogging company. As part of our collaboration, we engaged two MyTypes senior software engineers, for a limited time, to work on our Search Engine Optimization (SEO) and Search Engine Marketing (SEM) initiatives.
- We retained two top Chicago marketing firms - The Goodness Company and Sigale Public Relations - to provide additional, professional assistance to our franchisees.
- We dismissed a defamation complaint we had filed in September 2006 upon execution of a stipulated judgment payable to us in the sum of $100,000 contingent on certain, future events. There was no impact to earnings or the balance sheet for this judgment.
- Subsequent to the end of our second quarter, we acquired a membership list of approximately 400 member businesses in Cleveland, Ohio.
White added, "As our success and visibility increases, we expect to become more attractive to the investment community, as evidenced by the recent invitations to present at the Roth Capital 20th Annual Growth Stock Conference in February and the upcoming Montgomery Technology Conference in mid March. Meanwhile, as we expected, the hostile tender offer is getting little attention from shareholders. Income from operations for our second quarter includes our expenses associated with responding to this tender offer."
ITEX has elected to file this quarter's report on Form 10-Q, rather than on Form 10-QSB, in advance of the implementation deadline for the SEC's new disclosure rules for smaller reporting companies. ITEX Corporation's report on Form 10-Q can be found at www.sec.gov.
About ITEX:
ITEX, The Cashless Marketplace, is a leading marketplace for cashless business transactions in North America. ITEX processes more than $250 million a year in transactions through 22,000 member businesses managed by 95 franchisees and licensees. Member businesses increase sales through an exclusive distribution channel by utilizing the ITEX Dollar 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, Washington.
Contact:
Alan Zimmelman
425.463.4017
alan@itex.com
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-KSB and Forms 10-QSB, which are available at www.sec.gov., including under the caption, "Management's Discussion and Analysis of Financial Condition and Results of Operations." All information set forth in this release is as of March 3, 2008, and ITEX undertakes no duty to update this information.
