ITEX Corporation Plans to File Form 10-K By December 23, 1998
PORTLAND, Ore.--(BUSINESS WIRE)--Dec. 4, 1998--ITEX Corporation
(NASDAQ:ITEX)today indicated that it expects to file its Annual Report
on Form 10-K for the fiscal year ended July 31, 1998 by December 23,
1998.
The Company was unable to file its Form 10-K by the extended due
date of November 13, 1998 because of the need for more time for its
newly engaged independent audit firm to complete the annual audit of
the Company's financial statements. The late filing could have serious
consequences, including the possibility of delisting of the Company's
common stock from the NASDAQ Small Cap Market. Should this occur,
trading of the Company's stock would continue on the NASDAQ Bulletin
Board. In connection with the filing of this Form 10-K, the Company is
seeking to resolve certain accounting issues which have arisen during
an investigation by the Securities and Exchange Commission ("SEC").
Resolution of these accounting issues could have a material
adverse effect on the Company's financial statements but would not
reflect impairment of the Company's core business and primary revenue
and earnings streams. While the resolutions would effect how the
subject assets are accounted for, they would not reflect on the
assets' expected economic benefits. The Company believes that the
resolutions will not affect any of its current (short-term) assets,
its working capital, or its ability to continue to develop its core
business.
The issues relate primarily to the accounting for certain assets
received by the Company in nonmonetary transactions. These assets are
not directly related to the core business of the Company in which it
earns fees and commissions from brokering and processing barter
transactions. This includes facilitating Internet-based transactions
through its web site and proprietary online mall. ITEX operates
commercial barter networks with approximately 50,000 clients
worldwide. The Company had total revenue from its trade exchanges for
the fiscal year ended July 31, 1998 of $19,900,000, which included
$862,000 for July 1998 from its newly acquired BXI Trade Exchange.
Graham H. Norris, President and Chief Executive Officer, said
"This has been an exhaustive and costly process. ITEX and its audit
firm have put forward a tremendous effort in completing this
first-year audit. We are hopeful that this effort will bring about
prompt resolution of the accounting issues. We can again focus all our
energies and resources on developing our business."
Following are unaudited financial data, which have been prepared
consistent with the Company's previous accounting practices. The
Company does not expect that amounts shown for its core business, the
retail trade exchange operations, will change materially as a result
of the resolution of the issues. However, the resolution of the issues
may have a material adverse effect on the Company's overall financial
statements, including reduction of earnings reported for the current
year.
-0-
*T
Fiscal Years Ended July 31,
1998 1997
(in thousands, except per share amounts)
(unaudited)
Revenue:
Trade exchange $19,900 $17,582
Corporate trading and other 11,703 11,602
31,603 29,184
Costs and expenses:
Costs of trade exchange revenue 9,143 6,715
Costs of corporate and other revenue 10,663 9,245
Selling, general and administrative 9,987 8,445
29,793 24,405
Income from operations 1,810 4,779
Other income (expense), net 1,067 201
Income before taxes and equity investee 2,877 4,980
Provision for income taxes 672 1,755
Income before equity investee income 2,205 3,225
Share of equity investee income -- 1,247
Net income $2,205 $4,472
Basic net income per common share $0.28 $0.64
Total assets $41,326 $29,968
Stockholders' equity $37,143 $27,774
*T
In the above table, income per common share for the fiscal year
ended July 31, 1997 has been restated to conform with the new
requirements of FASB Statement No. 128. During the fourth quarter of
the fiscal year ended July 31, 1998, the Company incurred higher than
normal expenses, including approximately $250,000 for the Company's
annual broker convention, approximately $350,000 for legal and other
expenses related to significant efforts at resolving the Company's
regulatory issues, approximately $100,000 related to software
development, and approximately $200,000 related to initial operating
costs of the Company's newest subsidiary.
ITEX is an Internet-based trading and financial services company
with domestic and international operations. The sister ITEX and BXI
trade exchanges operate through more than 250 broker offices
worldwide. The Company currently has licensed exchanges in
Australasia, Europe, and the Middle East, with expansion under
development throughout the Americas, the Caribbean, and the Far East.
This press release includes "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities and Exchange Act of 1934, as
amended. All statements other than statements of historical fact
included in this press release, including without limitations, ITEX's
business strategy, plans and objectives, are forward-looking
statements.
CONTACT:
ITEX Corporation
Investor Relations, 888/699-4839 |
