Itex Corp. · OTC:ITEX
Itex — Investor Presentation (March 2009)
29 slides from Itex's investor presentation, Mar 9, 2009
Slide 1: The ITEX Opportunity
. The ITEX Opportunity Presented March 9, 2009 By Steven White, Chairman and CEO 1
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 ITEX.OB Recent Price $0.51 Range 52 Weeks $0.35- $1.05 Shares Outstanding 18.0 M Market Cap $9.2M Long Term Debt ~ Credit Line $1.5M Institutional Ownership ~20% Insider Ownership ~17% Fiscal Year July Revenue FY/2008 ~$16M Income/operations FY/2008 $1.5M 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 4
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 - (santa rosa) • Kettle One Citroen - (mission district) pic • machanic for ford wago
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
Marketplace Listinc >> Marketplace >> Search - Internet Explorer provided by Dell ed < bttp://www.itec.com/marketplace/ = Links J: Links J. Personal @) Customize Links she | 88) ~ |] Dashboard - Google Analy... |< ITEX >> Marketplace >... > ~ [sp Page + @ Tools » (7x Introducing ITEX ITEX Media Serv
Slide 9: Marketplace Detail
Marketplace Detail Listings >> Hilton Hotel Costa Mesa, LB.TS., FL, , Online Marketplace, - Internet Explorer provided by ITEX >> Marketplace > = @ <_ http://www.itex.com/marketplace/ca/orange_county/hilton_hotel_costa_mesa/95970/keyword=Hotel&srcsic=9901 &srccity= Orange+ County&isrest=CA&srcarea=
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 10
Slide 11: ITEX Community in Action
ITEX Community in Action Spending ITEX dollars 11
Slide 12: Client Example - Seattle Dentist
Client Example - Seattle Dentist Accepted ITEX $ Paid ITEX $ for : from: • Printing • CPA • Auto detail • Contractor • Flowers • Advertiser • Accommodations • Moving Company Avg Transactions: Total Sales: 22 $47,367 Avg Volume: $9,814 Total Purchases: Avg Client: 6 $41,559 years Total Cash Fees: $ 1
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 13
Slide 14: Transaction Methods
Transaction Methods 2) Online Capability 3) Automated Authorization Line – 1.800.426.5777 14
Slide 15: Sample Member Statement
2926 160th Ave. SE ITEX ) 2s STATEMENT RETAIN THIS STATEMENT FOR TAX PURPOSES ACCOUNT NUMBER ‘STATEMENT DATE. 502172-123456-0 March 19 , 2008 Your Trade Director is Bob Smith - Phone: 916.679.1111 Fees paid by electronic funds transfer (EFT) will be processed Contact: JOHN Q. CITIZEN WORLDWIDE MARKE
Slide 16: Member Products & Services
Member Products & Services • Accommodation & Travel • Retail – gifts, florists • Advertising & Media* • Architects & Design • Business • Consultants Products/Services* • Restaurants • Contractors • Professional Services • Entertainment* • Business Equipment • Printing • Real Estate & Related Service
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 – Forb
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 • Enhance, create and manage business rules of the trading community • License pla
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 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
Slide 21: ITEX Key Metrics
ITEX Key Metrics* • Goods & Services Value (GMV) $120 million • Avg transaction amount $469 • Listings on site 27,000+ • Unique visitors 246,323 • Page views 6,272,219 • New members 3,374 • Closed members 2,782 • Churn 16% • Number of transactions 253,471 21
Slide 22: Testimonials
Testimonials "ITEX has helped me connect with the exact customers we want -from Florida to California - that we wouldn't have had any other way. ITEX has also helped us pay for real business expenses with ITEX dollars instead of cash." - Nick Owner of a commercial printing business "Not only have we
Slide 23: Revenue
Revenue ($ in millions) Fiscal 2005-2008 23
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) 24 • Subscription fee: $20 per me
Slide 25: Income From Operations
Income From Operations ($ in millions) Fiscal 2005-2008 25
Slide 26: Balance Sheet
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 $ 1,540,00
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 $2.65 Shares 18M 61M 27M 27M Revenue (ttm) $16M $15M $216M $122M Market Cap (MC) $9M $6M $80M $70M MC / Revenue .56x .4x .37x .57x EBITDA (ttm) $1.9M $1.32M $13.72M $19.89M MC / EBITDA 4.68x 4.5x 5.8x 3.51x Gross Margin 40% 36
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 •Intrinsic value of membership network 29