Itex Corp. · OTC:ITEX
Itex — Investor Presentation (March 2009)
29 slides from Itex's investor presentation, Mar 9, 2009
Slide 1: The ITEX Opportunity
(ITEX) The ITEX Opportunity Presented March 9, 2009 By Steven White, Chairman and CEO
Slide 2: Safe Harbor
Safe Harbor During the course of this presentation, we may make projections or other forward looking statements regarding future events or the future financial performance of ITEX. Such statements are only predictions and actual events or results may differ materially. We refer you to ITEX's filings
Slide 3: About ITEX
About ITEX Symbol Recent Price Range 52 Weeks Shares Outstanding Market Cap Long Term Debt Credit Line nstitutional Ownership nsider Ownership Fiscal Year Revenue FY/2008 ncome/operations FY/2008$1.5M ITEX.OB $0.51 $0.35- $1.05 18.0 M $9.2M $1.5M ~20% ~17% July ~S16M (TEX) 3
Slide 4: Cashless Exchange Industry
Cashless Exchange Industry * $1.4B transaction value via local exchanges * 250 exchanges * Fragmented industry * 200,000 member companies ¢ IRS codifies tax treatment in 1982 under 1099B rules *Source — ITEX estimates (ie)
Slide 5: ITEX Overview
ITEX Overview + Largest membership B-2-B Trading Community in the United States and Canada © 24,000 Registered Members © Customer service outsourced via Franchised Broker Network ¢ Enables members to attract new customers and generate incremental sales ¢ Members buy and sell within the community uti
Slide 6: Craigslist Barter Section
Craigslist Barter Section Wed Jan 28 12 chocolate on chocolate cupcakes in antioch - (pittsburg / antioch) Need keys for your Car..House..office ect - A-1 Cabinet Maker/Remodel/Repair/New/Vanity Master - $1 - (santarosa) Kettle One Citroen - (mission district) pic machanic for ford wagon - (san mate
Slide 7: Craigslist barter listing
Craigslist barter listing * Canon 40D, like new + 2GB compact flash (Renton) Reply to: sale-970341446 @craigslist.org!”! Date: 2008-01-28, 1:02PM PST I'd like to trade my year and a half old Canon 40D body. Like new condition. Always kept in a Crumpler bag, no scratches, etc. Includes box, manuals,
Slide 8: Marketplace Listing
Slide 9: Marketplace listing: Hilton Hotel Costa Mesa
= Tom ee) penton Marketplace >> Listings >> Hilton Hotel Costa Mesa
Slide 10: ITEX Member Benefits
ITEX Member Benefits Obtain new customers Utilize unique sales channel Cash conservation by purchasing with ITEX dollars Monetize unproductive assets, excess capacity and inventory Broker Network for transaction support Customer loyalty and retention ITEX) 10
Slide 11: ITEX Community in Action
ITEX Community in Action Spending ITEX dollars Resort Hotel Hires contractors to expand ‘and upgrade their faces, Purchases hotel for sales prc cards and s and business irom a pinta ¥ General Contractor Trades for dental services for nd purchases direct mail advertising, Florist Launches an ad campa
Slide 12: Client Example - Seattle Dentist
Client Example - Seattle Dentist Accepted ITEX $ from: Paid ITEX $ for: * CPA * Printing * Contractor * Auto detail * Advertiser * Flowers * Moving Company *« Accommodations Total Sales: Avg Transactions: 22 $47,367 Avg Volume: $9,814 Total Purchases: Avg Client: 6 years $41,559 Total Cash Fees: $ (
Slide 13: ITEX Competitive Advantages
ITEX Competitive Advantages * Membership critical mass * Customer service capability * Products / services depth and diversity ¢ Brand recognition and currency liquidity ¢ Web based trading platform * Established Infrastructure
Slide 14: ITEX web trading platform
ITEXTEAM-Corperte 8 Offepl Medio» | OTTER Payest Sytem | TER Bay WehITEX || restr Page Ts (TEX) Fey ITEX, -P:976,909,0099 F 976,998,9909 Buy It With [TEX o— a ioe © Str amin Betti ee ne EE aoe on Broker Drectory @ = Here Bextor Lest Enews (sampue 1 eee 7 Mt Lease eee SUAVORENTION ALD FORE ON ev Fran
Slide 15: ITEX payment system screen
CITED: a aia $145.00 300.00, §'2s0000 $ 2610.00 8 ee SiSiera ie Sroazaite [esaraes | Sra syase BUY AMBCUNIUE DESIGN ThE F009 Be erm couren — ss Please charge/debit Cash Dus on my credit card: i Discover AMEX VISA 3 Mastercard Account i Expiration: ‘30207: WORLOWIDE MARKET March 19,2008 CASH DUE $145
Slide 16: Member Products & Services
Member Products & Services « Accommodation & Travel * Retail — gifts, florists ° Advertising & Media* * Architects & Design * Business Products/Services* ° Consultants * Contractors ° Restaurants * Entertainment* * Professional Services * Printing * Business Equipment * Magazines & Newspapers * Real
Slide 17: Brand Name Partners
Brand Name Partners ITEX Payroll Services — Provided by ADP Small Business Services ITEX Job Listings — Powered by Simply Hired ITEX Co-branded MasterCard — 60 days interest free terms National Partnership — Sysco iCare - Leverage Sysco’s customer base Media Services — Business Week — Forbes = Grier
Slide 18: ITEX Strategic Objectives
ITEX Strategic Objectives * Establish the ITEX trading platform as the standard for B to B cashless transactions ° Market penetration into the 25 million small businesses in the US* * Brand recognition of ITEX dollars e Enhance, create and manage business rules of the trading community License platf
Slide 19: ITEX Growth Opportunities
ITEX Growth Opportunities Organic Growth —Increase transaction volume through registration growth —Supplement primary franchise system with online marketplace National Business Partnerships —Sysco iCare Media Services —Launched August 2008 Licensing —ITEX SaaS Platform (ix) 19
Slide 20: Software as a Service (SaaS)
Software as a Service (SaaS) * Scalable platform technology —CRM —Payment processing Record keeping Billing functionality —Reports ¢ Track digital currency; with any value * Calculates transaction or subscription fees in USD * Windows web-based platform * Co-location & backup data facility ° First c
Slide 21: ITEX Key Metrics
ITEX Key Metrics* * Goods & Services Value (GMV) $120 million * Avg transaction amount Listings on site Unique visitors Page views New members Closed members * Churn * Number of transactions “Trailing Twelve Months $469 27,000+ 246,323 6,272,219 3,374 2,782 16% 253,471 (tex) 24
Slide 22: Testimonials
Testimonials "ITEX has helped me connect with the exact customers we want -from Florida to California - that we wouldn't have had any other way. ITEX has also helped us pay for real business expenses with ITEX dollars instead of cash." - Nick Owner of a commercial printing business "Not only have we
Slide 23: Revenue
Revenue Fiscal 2005-2008 ($ in millions) $18.0 $15.0 4 $14.6 $14.2 $120 4 $10.2 i 6 a ee a wn w a 2005 2006 2007
Slide 24: ITEX Revenue Mix
ITEX Revenue Mix * Transaction fees: 70% * Subscription fee: 28% ° Ancillary fees: 2% * Cost of Goods —ITEX retains 25% of transaction fee, balance to Broker —ITEX retains 65% of subscription fee, balance to Broker * Transaction fee: 5% to 7.5% (to buyer and seller) * Subscription fee: | $20 per mem
Slide 25: Income From Operations
Income From Operations Fiscal 2005-2008 (Sin millions) $L5 - - $1.34 $10 — $0.73 "| Lo =
Slide 26: Balance Sheet 1/31/2009
Balance Sheet 1/31/2009 Assets: Cash & ST Investments $ 1,207,000 Accounts receivable, net 1,063,000 Tax asset 6,817,000 Goodwill 3,318,000 Notes receivable (office sales) 993,000 Other assets & equip. 2,876,000 Total assets $16,274,000 Liabilities & Shareholder Equity Broker commissions $ 1,540,000
Slide 27: Management Team
Management Team Years in Name Title Prior Experience Industry Steven White Chairman/CEO/CFO Ubarter.com, 26 Network Commerce Robert Benson VP Operations Ubarter.com, 16 Network Commerce Brian Argetsinger VP Marketplace ITEX Franchisee 16 Douglas Dagenais National Sales Chicago Barter 24 Shell Vacati
Slide 28: Peer Group Valuation
Peer Group Valuation ITEX INLM DINE WWWW. Price (03/04/09) $.51 $.10 §2.99 Shares 18M 61M 27M Revenue (ttm) S16M S15M $216M Market Cap (MC) SoM S6M $80M MC / Revenue 56x 4x 37x EBITDA (ttm) $1.9M $1.32M $13.72M MC / EBITDA 4.68x 4.5x 5.8x Gross Margin 40% 36% 30% Op Margin 8% (2%) 3.8% ITEX ITEX Cor
Slide 29: Reasons to Invest
Reasons to Invest Industry leader with attractive growth potential Strong cash flow *Scalable business model *Proprietary SaaS technology *Unique distribution channel and community eIntrinsic value of membership network (TEX ) 2