Written by Bob Meyer, Editor of BarterNews

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ITEX Moves Forward On Several Fronts

ITEX Corporation (OTCBB:ITEX) has announced third quarter fiscal 2004 results showing success in several areas, including:

• Income from operations for the 3rd quarter was $284,000, excluding reduction of certain accruals, i.e. legal accruals of $101,000. Also a reduction of $66,000 on prior accruals for the dismissal of a labor claim dispute. Including these reductions, reported income from operations for the quarter was $451,000.

• Revenues for the quarter decreased 16% to $2.3 million from $2.7 million from the prior year’s similar quarter. Revenues for the nine-month period ended April 30, 2004 is down 5% compared to the same period in 2003.

• Selling, general, and administrative costs declined from $833,000 to $491,000, 41%, from the prior year, due partly to the divestiture of corporate-owned offices.

• Total liabilities were reduced from $2,401,000 to $1,292,000 since the July 31, 2003 fiscal year end, reflecting improved efficiencies, renegotiated contracts and leases, and divestiture of non-essential services.

According the Steven White, CEO, “Results for the third quarter of fiscal 2004 reflect our successful efforts to create profitable operations. During the first three quarters, management focused on selling corporate-owned stores along with improving the balance sheet by reducing debt and settling outstanding legal issues.

“During the third quarter, we completed the divestiture of our last corporate-owned office, moved into new corporate headquarters in Bellevue (WA), settled all material lawsuits, and generated a profit with positive cash flow.

“Moving forward, we can focus on the opportunities in front of us to drive revenue growth. I encourage all shareholders to read our quarterly report on Form 10-QSB, which can be found at www.sec.gov.”

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Upcoming Political Conventions Will Again See
Barter Playing Important Role

Soon the two political parties will be holding their national conventions and, if precedent continues, barter will be playing an important role.

In the past issues of BarterNews we have reported how these convention settings are viewed by Corporate America as an excellent opportunity to impress a very important set of customers.

Previously, we’ve seen Pacific Bell distributing 600 cellular phones to delegates and the media, in exchange for the publicity of being the official local telephone carrier.

Additionally, General Motors once provided 310 cars for use by party officials, Mitsubishi has provided the big-screen TV sets, Xerox has been the official document producer, and AT&T has handled the long distance and internet access service.

In short, corporate executives see the national conventions as the political equivalent of the Olympics. It’s a highly visible showcase for products and services. And offers a golden opportunity to promote corporate images with the people who set national policy, as well as with the national media.

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Stash Tea Traded With B&Bs

Stash Tea Company, manufacturer and cataloger of more than 80 blends of tea, expanded the company’s awareness when they successfully bartered with more than 1,000 bed-and-breakfast inns.

They did so through a program where the inns were included in a 78-page B&B guide that Stash publishes annually. Participating B&Bs received a sampler box of tea as a “thank you” for joining the promotion.

Innkeepers can order additional product from the Stash Tea catalog at a discount. In exchange, the inns provide a free night’s lodging to Stash catalog and retail customers who pay for a two-night stay.

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“Just-in-Time” Financing Enables Greater & More
Profitable Global Trade

Major corporation buyers and sellers presently settle their payments predominantly by a paper-heavy method called the letter of credit, first popularized by the Medici banking family of Florence more than 400 years ago. (The process, requiring the banks of buyer and seller to exchange documents, often takes two weeks.)

But recently companies have begun investing in new internet-based platforms that instantly link buyer and seller...sometimes relegating banks to the sidelines. Although these online procurement efforts were started in the late 1990s, they’ve gained significant traction in the marketplace only in the last two years.

TradeCard, a company launched in 1994, allows a buyer to connect the flow of physical goods with the flow of electronic funds by handling both through the same electronic document. (TradeCard had 750 major clients at the end of 2003.)

A similar product is being pushed by UPS Capital, a subsidiary of logistics titan United Parcel Service. Last year the firm handled $1.4 billion in payment transactions.

At stake is more than a tech upgrade. Today the cost of processing trade documents is more than 5% of the total annual value of world trade! Consider that the present cost of processing a simple transaction is about $400, up to 24 forms must be completed for each transaction, and that half of all letter-of-credit transactions are rejected by banks because of incorrect information.

The growth and usage of just-in-time financing is not surprising, considering the savings in time and money. It’s a natural evolution, following the explosion of just-in-time manufacturing and just-in-time inventory. And as the financial supply chain works faster, the physical supply chain can move faster, too. Which in turn greases the global supply chain and the interdependence of nations around the world.

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Independent Restaurant Owners Concerned

As chain restaurants extend their reach into urban locales, independent restaurant owners are beginning to join forces through a new organization. Known as the Council of Independent Restaurants of America (CIRA), they now have 15 chapters scattered across the United States.

CIRA’s objective: To protect the independent restaurant owners’ turf by joining forces against the chains...working together to buy co-op billboard ads, post links on local web sites, and spread the word that independent restaurateurs are people with a passion for food who are working together to better their communities. Don Luria is the president of CIRA, phone: (520) 579-5771.

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Here & There...

• Last year Russia’s economy grew by 7.2%, and the national government now has a $100-billion surplus, thanks to the high price of oil. Vladimir Putin’s economic policies—including his 13% personal flat tax—is a positive too.

Today, for the first time in Russian history, a nascent mortgage market exists and entrepreneurship is flourishing. What’s needed now, in a big way, is more foreign direct investment to modernize an inefficient and unprofitable industrial base. That will come about as Russia makes a commitment to civil liberties, democracy, and the rule of law.

• Whether you’re buying or bartering for a used car, be aware of one thing...we’re seeing the sharpest drop in used-card prices in over 40 years, according to CarMax.com.

• 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) and sign up!

• The latest World Wealth Report, a study conducted by consulting firm Capgemini Group and brokerage house Merrill Lynch, shows the wealthy last year poured a large portion of their more conservative cash and bond holdings into riskier assets increasing their fortunes...of those the biggest driver of wealth was stocks.

Between 2002 and 2003, 48% of high-net-worth individuals around the world increased their appetite for risk. The total fortunes of high-net-worth individuals in North America swelled $1.1 trillion in 2003, with Europe gaining $300 billion and Asia up $600 billion.

• Economists looking for clues about the future of the nation’s housing boom might want to take a look at Australia. Like the U.S. they enjoyed a spectacular run-up in home values over the past few years, with the reasons for the boom being similar...low interest rates, easy credit, and buyers seeking to offset stock-market losses.

The only critical difference is that home prices in Sydney fell 7.5% in the first quarter of 2004, and could tumble by 20% by the end of the years, according to Australian Property Monitors. The fall in prices was a result of policy-maker moves to rein Australia’s inflated property market by raising interest rates, plus a new tax on investment properties (similar to our 1986 real estate tax hike).