International Monetary Systems Files Annual Report

Revenue up 31%
EBITDA and cash flow hit new record
Firm takes write-off for accounting adjustments and amortization

New Berlin, Wis., April 14, 2006 -- International Monetary Systems, Ltd. (OTC BB:INLM), a worldwide leader in business-to-business barter services, today announced that it has filed its Form 10-KSB Annual Report for the year ending December 31, 2005.

For IMS, 2005 was a banner year, with five acquisitions, revenue growth of 31%, EBIDTA of over $531,000, and positive cash flows from operations in excess of $678,000. Yet after deducting expenses resulting primarily from accounting adjustments and changes to comply with generally accepted accounting principles, the S.E.C. standards, and Sarbanes-Oxley rules, the Company reported a net loss for the year. Most of this loss was attributed to non-cash accounting adjustments and write-offs.

In 2005, we accelerated the amortization of our membership lists, increased the costs of stock issued for services, and posted additional charges for imputed beneficial interest on convertible notes that were signed last year. We also reclassified selected balance sheet accounts. These changes were not anticipated, and created unexpected expenses which resulted in the reported loss. Since these expenses were non-cash charges they had virtually no effect on our operating profit or cash flow.

In 2005, we decided to invest in our infrastructure by hiring additional employees who could help us improve our internal controls, revenue growth and profitability. We now have a full-time attorney on staff to expedite collections and to review documents relating to our acquisitions and other contractual matters. To strengthen our organic growth we increased the size of our outside sales force to fourteen, averaging nearly 100 new-client enrollments each month. In an effort to create more market awareness of our stock, we increased our outlay for investor relations' services. Though this was somewhat costly, most of the charges were paid with non-cash currency such as restricted shares of stock or the Company's trade dollars. These efforts resulted in higher trading volume of IMS' shares, and that volume continues to grow in 2006. We also made a concerted effort to spend surplus trade dollars earned in previous years, thereby saving cash on advertising and promotion, printing, maintenance and repair of equipment, leasehold improvements, and substantially higher promotional costs for our annual barter expos.

Following is a summary of our operating statement for the year ended December 31, 2005.

Income and Expenses

In 2005, our Continental Trade Exchange subsidiary processed more than $52 million in barter transactions, generating revenues of $6.2 million; in 2004 we processed $37 million in barter transactions that produced revenues of $4.7 million. Total barter transactions for 2005 increased 37%, and revenues increased nearly 31%. The increase in revenue was primarily a result of five trade exchange acquisitions plus a higher volume of transactions in the barter network.

For 2005, operating expenses increased by $1,726,000 or 38%, in proportion to the increases in revenue. Most of the additional operating expenses were a result of the 2005 acquisitions, along with the additional non-cash expenses outlined above. In 2005, CTE recorded net income of $166,000. Adjusting for income and expenses from barter dollars, and adding non-cash charges such as interest, amortization and depreciation, cash-basis EBITDA was $984,000 for the barter system. However, these profits were diluted by investor relations costs, the accelerated amortization of our client lists, the imputed beneficial interest on the convertible notes, and other expenses incurred by IMS. Many of these were non-cash accounting adjustments or expenses paid in trade dollars or by issuances of stock.

In 2005, payroll expenses increased nearly 37% to $3,625,000, while occupancy expenses increased from $285,000 to $589,000. Both increases resulted from the acquisitions. Selling expenses decreased by $103,000 and other expenses (primarily interest) increased by $114,000. Much of this increase was for interest on long-term debt, and imputed interest on the convertible notes executed in 2005. General and administrative expenses increased 31%, from $812,000 to $1,066,000. As a result of these charges, IMS had a net loss from operations of $36,765. After deducting interest and adding back income tax benefit, IMS had a loss of $221,639 for the calendar year ended December 31, 2005, compared to a profit of $25,246 for the same period in 2004.

EBITDA

In 2005, operating profit (earnings before interest, taxes, depreciation and amortization) totaled $531,000.

Effects of Acquisitions

During fiscal 2005, we incurred additional expenses associated with the acquisitions of United Trade Network of Reno and Las Vegas, NV, Eagle Barter Exchange of Chattanooga, TN, International Barter Network of New York, NY, and Barter Business Unlimited of Hartford, CT. These expenses resulted from the integration of the operations of those firms into our business, and were not separately itemized. Additional expenses are anticipated in all acquisitions, but after a transition period we expect most of the new operations to add to our profitability and cash flow.

Financial Condition

In 2005, IMS experienced positive cash flow, as net cash provided by operating activities was $678,000, compared to a cash flow of $484,000 in 2004. During 2005, IMS raised $1,050,000 from private investors in the form of convertible notes. All of this was used for down payments on the five trade-exchange acquisitions.

Changes in Assets and Liabilities

During 2005, cash balances decreased only slightly from 2004, resulting from payments for acquired trade exchanges. Also $363,400 in restricted cash has been deposited in escrow accounts to guarantee the repurchase of shares issued in the acquisitions of Tradecard, Inc. and Barter Business Unlimited. Our total assets increased 62% from $4,902,000 to $7,938,000, primarily because of acquisitions. Additional details and other information about the re-classification of certain assets and liabilities can be found in our 10-KSB filing at www.sec.gov.

In discussing the Annual Report, CEO Don Mardak stated: "2005 was a year of historic growth for IMS. Rather than resting on our laurels, we decided to invest in the company's future by strengthening our infrastructure. Though we will continue to grow through acquisitions, we have also taken the steps necessary to create future organic growth. And in spite of that commitment, we still reported nearly $1 million of cash-based EBITDA for our trade exchange operation. Furthermore, our assets increased 62% and now total just under $8 million. Investors should realize that the non-cash adjustments which affected our bottom line have no impact on our operating profit or cash flow."

About International Monetary Systems

Founded in 1989, International Monetary Systems (IMS) serves more than 9,700 customers representing 14,000 cardholders in 35 U.S. markets. Based in New Berlin, Wis., IMS is one of the largest publicly traded barter companies in the world and is continually expanding its exchange locations. The company's proprietary transaction network enables businesses and individuals to trade goods and services throughout North America. Using an electronic currency known as trade dollars, IMS exchanges allow companies to create cost savings and to improve operations by taking advantage of barter opportunities in their business models. Managed by seasoned industry veterans, IMS is a recognized member of the National Association of Trade Exchanges (NATE) and International Reciprocal Trade Association (IRTA). Further information can be obtained at the company's Web site at: www.internationalmonetary.com.

Contact:

International Monetary Systems, Ltd., New Berlin
Don Mardak, 800-559-8515
http://www.internationalmonetary.com

Source: International Monetary Systems, Ltd.