IMS Reports Record Year Of Achievement & Growth

International Monetary Systems (OTCBB:INLM) recently filed its 2007 annual report on Form 10-KSB.

In October 2006, IMS acquired National Trade Association and its subsidiary Illinois Trade Association, America's largest independent barter network. Then in February 2007 it procured Alliance Barter, with offices in Rochester (NY) and Toronto, Canada. Both acquisitions have had a significant impact on 2007 operations, resulting in increased trade volume, gross revenue, new-client enrollments and operating profit, or EBITDA.

The increased revenue enabled IMS to invest in an infrastructure that supported and implemented critical Best Practices to create future organic growth:

�         In 2006 and 2007 IMS invested more than $700,000 in new computers, monitors, printers, servers, and other equipment to enhance the efficiency of its trade brokering and sales staffs.

�         In 2007 the company invested more than $250,000 to acquire the source code for TradeWorks, its proprietary trade dollar clearing system, and to migrate the entire database from the original RPG format into a more current .net technology.

�         The IMSbarter.com web site is undergoing a facelift, toward the goal of creating a fully interactive, web-based online marketplace. More than $200,000 has been spent on this project, with expected completion in spring of 2008.

�         The company hired additional technicians and programmers to integrate the new hardware, to convert the clearing system software and to develop the website. The IT department has been expanded to four full-time employees.

�         IMS hired a full-time national sales trainer and a full-time national broker trainer to implement Best Practices for the Sales and Trade Brokering departments.

�         The company doubled the size of its Columbus (OH) office to expand its telemarketing and tele-sales staff. As a result IMS enrolled more than 3,500 new members during 2007.

�         In 2007 a full-time marketing and public relations director was hired. She is working with the IT staff to develop critical IT/Marketing efforts and streamline the online experience for members and prospective members. She is also developing a campaign to strengthen the IMS brand in the marketplace.

�         In October the company hosted the IMS Academy, the organization�s first national convention/seminar, which was attended by 118 employees.

�         Throughout the year, IMS hired additional sales staff to expand the base of National Trade Association, its corporate barter division, resulting in the enrollment of a number of high-profile businesses.

In spite of these expenditures, many of which will not recur in 2008, IMS produced positive cash flow of nearly $1 million, and operating profit (EBITDA) of over $1.3 million in 2007. However, the company experienced a net loss of $414,290, comparable to that in 2006.

During 2007 IMS processed more than $114 million in trade transactions, compared to $72 million in 2006, an increase of 58% (reporting just one side of each transaction). This generated gross revenue of $14,772,045 for the year, compared to $8,782,666 in 2006, an increase of 68%.

Total expenses increased from $8,857,798 in 2006 to $14,945,745 for the year ended December 31, 2007, a 68% increase (comparable to the increase in sales).

Net cash flow from operations totaled $945,111 in 2007, compared to $871,631 in 2006. Operating profit or EBITDA (earnings before interest, taxes, depreciation and amortization) totaled $1,375,839 an increase of nearly 23 % over the EBITDA of $1,120,993 recorded in 2006.

The company also has an option to purchase New York Commerce Group in 2008, and with that exception, there are no other purchase obligations. However, the firm will continue to seek opportunities to acquire quality exchanges.