Points International, Ltd.
Aug 9, 2011

Points International Ltd. Reports Second Quarter 2011 Results

TORONTO, Aug. 9, 2011 (GLOBE NEWSWIRE) -- Points International Ltd. (TSX:PTS) (Nasdaq:PCOM), owner of the loyalty reward management program platform www.Points.com, today announced results for the second quarter ended June 30, 2011. All financial results are in U.S. dollars and both 2011 and 2010 comparatives have been presented in accordance with International Financial Reporting Standards ("IFRS").

"Our second quarter performance highlights Points' continued financial and operational success, as evidenced by our strong growth in revenue and profitability and continued expansion of our loyalty reward program management platform," said CEO Rob MacLean. "Our exceptional revenue growth was led by increased transactional activity among our existing partners as well as new transactional products and partners added to our platform over the past twelve months. In addition, we were able to deliver meaningful improvements in our profitability metrics with net income and EBITDA expanding nearly six-fold as compared to the prior year period. Expansion in our profitability metrics was driven not only by our year-over-year revenue growth, but also from our continued focus on margin expansion and operating expense discipline."

MacLean continued, "The second quarter also marked a continuation of our positive momentum in adding new products and transactional partners across our loyalty reward program management platform. Year-to-date, we have welcomed 5 new transactional partners and deployed 23 new products, to end the second quarter with over 163 products and services with approximately 50 partners worldwide. Importantly, during, or just subsequent to the second quarter, we extended several strategic partnerships including American Airlines AAdvantage, Air France KLM, Hawaiian Airlines' Hawaiian Miles, Hyatt Gold Passport, Virgin Atlantic's Flying Club, Best Buy's Reward Zone and Cathay Pacific's Asia Miles. Our continued ability to expand our pre-existing relationships across our private label and Points.com branded platforms is a key driver of our future growth and ultimately speaks to Points' growing importance in the loyalty reward program ecosystem."

Mr. MacLean continued, "Looking forward, we expect to build upon our positive momentum in the back-half of the year and are on track to deliver strong results in-line with our financial objectives for 2011. Critical to our success will be the on-going expansion of our loyalty reward program management platform. As such, we are pleased with our most recent announcement, the addition of Iberia Airlines' Iberia Plus Frequent Flyer Program to our partner platform. We are very pleased to enter the third quarter with a strong product and partner pipeline and expect the volume of our deployments in the second half of 2011 to be consistent with that of the first half of 2011. We look forward to sharing our success in the coming months."

1 Gross Margin is considered by Management to be an integral measure of financial performance and is defined as total revenues less the direct cost of principal revenues. However, gross margin is not a recognized measure of profitability under IFRS.

2 EBITDA [Earnings (loss) before interest, amortization, foreign exchange and impairment costs] is considered by management to be a useful supplemental measure of performance. However, EBITDA is not a recognized earnings measure under IFRS.

Second Quarter 2011 Financial Results

Total revenue was $32.7 million for the second quarter of 2011. Revenue was up 51% over the $21.7 million reported in the second quarter of 2010, and up 15% over the $28.5 million reported in the first quarter of 2011. Principal revenue totaled $30.8 million, an increase of 53% over the $20.1 million in the same period last year and up 15% over the $26.7 million reported in the first quarter of 2011. Other partner revenue was $2.0 million, up from $1.6 million in the second quarter of 2010 and up from $1.8 million in the first quarter of 2011.

Gross margin for the second quarter of 2011 was $6.2 million, or 19.0% of total revenue, compared to gross margin of $4.3 million or 19.9% of revenue in the second quarter of 2010. Gross margin for the first quarter of 2011 was $5.1 million, or 17.9% of revenue.

Net income for the second quarter of 2011 was $501,000, or $0.03 per share. This compares to net income of $88,000, or $0.01 per share, in the second quarter of 2010 and a net loss of $189,000, or ($0.01) per share, in the first quarter of 2011.

During the second quarter of 2011, Points reported positive EBITDA of $1.4 million compared to positive EBITDA of $233,000 in the same period of 2010 and positive EBITDA of $313,000 in the first quarter of 2011.

As of June 30, 2011, total funds available, comprised of cash and cash equivalents together with security deposits, restricted cash and amounts with payment processors was $43.1 million, up from $41.3 million at the end of the first quarter of 2011. The company remains debt free and is pleased with its overall financial position and its ability to generate positive cash flow.


Second Quarter 2011 Business Metrics

  --------------------------------------  ---------  ---------  -----  ---------  -----

                                                                Q2/11             Q2/11
                                                                 vs.               vs.
                                            Q2/11      Q1/11    Q1/11    Q2/10    Q2/10
  --------------------------------------  ---------  ---------  -----  ---------  -----

  TOTAL ALL CHANNELS
  --------------------------------------  ---------  ---------  -----  ---------  -----

   Points/Miles Transacted (in 000s)      3,641,292  3,066,878    19%  2,724,245    34%
  --------------------------------------  ---------  ---------  -----  ---------  -----

   No. of Points/Miles Transactions         347,134    342,012     1%    286,953    21%
  --------------------------------------  ---------  ---------  -----  ---------  -----

  LOYALTY CURRENCY SERVICES
  --------------------------------------  ---------  ---------  -----  ---------  -----

   Points/Miles Transacted (in 000s)      3,319,885  2,764,000    20%  2,484,218    34%
  --------------------------------------  ---------  ---------  -----  ---------  -----

   No. of Points/Miles Transactions         329,561    321,326     3%    271,374    21%
  --------------------------------------  ---------  ---------  -----  ---------  -----

  POINTS.COM CHANNELS
  --------------------------------------  ---------  ---------  -----  ---------  -----

   Points/Miles Transacted (in 000s)        321,407    302,878     6%    240,027    34%
  --------------------------------------  ---------  ---------  -----  ---------  -----

   No. of Points/Miles Transactions          17,573     20,686   -15%     15,579    13%
  --------------------------------------  ---------  ---------  -----  ---------  -----

   Cumulative Registered Users            2,724,144  2,655,605     3%  2,525,059     8%
  --------------------------------------  ---------  ---------  -----  ---------  -----


Business Outlook

The Company is reiterating its financial guidance for the year ended December 31, 2011, as follows:

  --  The Company continues to expect revenue to be in the range of $120
      million to $130 million, representing a 25% to 36% increase over 2010
      revenue
  --  The Company continues to expect EBITDA to be in the range of $5 million
      to $8 million
  --  The Company continues to expect net income to be in the range of $3
      million to $6 million, or $0.20 to $0.40 per diluted share


Investor Conference Call

Points' conference call with investors will be held today at 5:00 p.m. Eastern Time. To participate, investors from the US and Canada should dial (877) 941-2068 ten minutes prior to the start time. International dialers should call (480) 629-9712. In addition, the call is being webcast and can be accessed at the Company's web site: www.pointsinternational.com and will be archived online upon completion of the call. A telephonic replay of the conference call will be available through August 16, 2011 by dialing (877) 870-5176 in the U.S. or Canada or (858) 384-5517 internationally and entering the conference ID 445806.

About Points International Ltd

Points International Ltd. is the owner and operator of Points.com, the world's leading reward program management web site which was recently named one of the 28 Best Travel Sites by Kiplinger's. At Points.com consumers can Swap, Earn, Buy, Gift, Share and Redeem miles and points from more than 25 of the world's leading reward programs. Participating programs include American Airlines AAdvantage® program, Aeroplan®, AsiaMiles, British Airways Executive Club, Delta SkyMiles® and InterContinental Hotels Group's Priority Club® Rewards. Redemption partners include Amazon.com® and Starbucks. For more information, visit www.pointsinternational.com.

Caution Regarding Forward-Looking Statements

This press release contains or incorporates forward-looking statements within the meaning of United States securities legislation, and forward-looking information within the meaning of Canadian securities legislation (collectively "forward-looking statements"). These forward-looking statements include our guidance for 2011 with respect to revenue, net income and EBITDA. These statements are not historical facts but instead represent only Points' expectations, estimates and projections regarding future events.

Although Points believes the expectations reflected in such forward-looking statements are reasonable, such statements are not guarantees of future performance and are subject to important risks and uncertainties that are difficult to predict. Certain material assumptions or estimates are applied in making forward-looking statements, and may not prove to be correct. In particular, the financial outlooks herein assume we will be able to generate new business from our pipeline at expected margins, our in-market and newly launched products and services will perform in a manner consistent with the Company's past experience, and we will be able to contain costs and realize operational efficiencies from our upgraded technology platform. Other important risk factors that could cause actual results to differ materially include the risk factors discussed in Points' annual information form, Form-40-F, annual and interim management's discussion and analysis, and annual and interim financial statements and the notes thereto. These documents are available at www.sedar.com and www.sec.gov.

The forward-looking statements contained in this press release are made as at the date of this release and, accordingly, are subject to change after such date. Except as required by law, Points does not undertake any obligation to update or revise any forward-looking statements made or incorporated in this press release, whether as a result of new information, future events or otherwise.

Transition to IFRS

The preparation of these condensed consolidated interim financial statements resulted in changes to the accounting policies as compared with the most recent annual financial statements prepared under Canadian GAAP. The accounting policies set out below have been applied consistently to all periods presented in these condensed consolidated interim financial statements for the three and six months ended June 30, 2011 and the comparative information presented in these interim financial statements for both the three and six months ended June 30, 2010 and the year ended December 31, 2010.

  Points International Ltd.
  Condensed Consolidated Interim Balance Sheets


  Expressed in thousands of              December   January
   United States dollars      June 30,     31,        1,
  (Unaudited)                   2011       2010       2010
                             ---------  ---------  ---------

  ASSETS
  Current assets
   Cash and cash
    equivalents                $30,593    $28,463    $26,414
   Restricted cash               1,789      1,776        802
   Funds receivable from
    payment processors           8,066      4,624      5,855
   Security deposits             2,628      2,123      2,463
   Accounts receivable           2,209      2,054      1,907
   Prepaid expenses and
    other assets                 1,485      1,179        898
                             ---------  ---------  ---------

  Total current assets          46,770     40,219     38,339
                             ---------  ---------  ---------



  Non-current assets
   Property and equipment        1,849      1,611        607
   Intangible assets             4,873      4,844      2,014
   Goodwill                      2,580      2,580      2,580
   Deferred tax assets             551        984        945

   Other assets                    467        613      1,033
                             ---------  ---------  ---------

  Total non-current assets      10,320     10,632      7,179
                             ---------  ---------  ---------

  Total assets                 $57,090    $50,851    $45,518
                             ---------  ---------  ---------


  LIABILITIES

  Current liabilities
   Accounts payable and
    accrued liabilities         $2,945     $3,679     $2,820
   Provisions                       84        102        267
   Current portion of other
    liabilities                    654        629        609
   Payable to loyalty
    program partners            37,413     31,337     30,215
                             ---------  ---------  ---------

  Total current liabilities     41,096     35,747     33,911
                             ---------  ---------  ---------



  Non-current liabilities

   Other liabilities               845        951        301
                             ---------  ---------  ---------
  Total non-current
   liabilities                     845        951        301
                             ---------  ---------  ---------



  Total liabilities             41,941     36,698     34,212
                             ---------  ---------  ---------



  SHAREHOLDERS' EQUITY
   Share capital                57,288     56,683     56,662
   Contributed surplus           9,441      9,255      8,677
   Accumulated other
    comprehensive income           190        297         --

   Accumulated deficit        (51,770)   (52,082)   (54,033)
                             ---------  ---------  ---------
  Total shareholders'
   equity                       15,149     14,153     11,306
                             ---------  ---------  ---------
  Total liabilities and
   shareholders' equity        $57,090    $50,851    $45,518
                             ---------  ---------  ---------



  Points International Ltd.
  Condensed Consolidated Interim Statements of Comprehensive Income
   (Loss)

  Expressed in thousands of
   United States dollars,          For the three       For the six
   except per share amounts           months             months
  (Unaudited)                          ended             ended

                                  June               June     June
                                   30,    June 30,    30,      30,
                                  2011      2010     2011     2010
                                 -------  --------  -------  -------



  REVENUE
   Principal                     $30,766   $20,063  $57,463  $41,900
   Other partner revenue           1,955     1,595    3,726    3,259

   Interest                            4         5        9        6
                                 -------  --------  -------  -------
   Total Revenue                  32,725    21,663   61,198   45,165



  EXPENSES
   Direct cost of principal
    revenue                       26,519    17,356   49,904   36,643
   Employment costs                3,258     2,650    6,502    5,331
   Marketing & communications        348       282      627      544
   Technology services               156       224      302      435
   Depreciation and
    amortization                     563       152    1,008      287
   Foreign exchange gain            (24)      (13)     (92)     (35)

   Operating expenses              1,071       918    2,177    1,750
                                 -------  --------  -------  -------
   Total Expenses                 31,891    21,569   60,428   44,955


  OPERATING INCOME                   834        94      770      210

   Interest and other charges       (17)         6     (17)       21
                                 -------  --------  -------  -------
  EARNINGS BEFORE INCOME TAX         851        88      787      189
   Deferred income tax expense
    (recovery)                       350        --      475    (342)
                                 -------  --------  -------  -------

  NET INCOME                         501        88      312      531
                                 -------  --------  -------  -------



  OTHER COMPREHENSIVE LOSS
   (Loss) Gain on foreign
    exchange derivatives
    designated as cash flow
    hedges, net of income tax
    recovery of $10 and expense
    of $50 for the three and
    six months ended June 30,
    2011 (2010 -- $95 and $7)       (26)     (212)      127       16
   Reclassification to net
    income of gain on foreign
    exchange derivatives
    designated as cash flow
    hedges, net of income tax
    expense of $46 and $92 for
    the three and six months
    ended June 30, 2011 (2010
    -- $18 and $26)

                                   (116)      (39)    (234)     (57)
                                 -------  --------  -------  -------
  Other comprehensive loss for
   the period, net of income
   tax                             (142)     (251)    (107)     (41)
                                 -------  --------  -------  -------
  TOTAL COMPREHENSIVE INCOME
   (LOSS)                          $ 359   $ (163)    $ 205    $ 490
                                 -------  --------  -------  -------

  EARNINGS PER SHARE
   Basic earnings per share        $0.03     $0.01    $0.02    $0.04

   Diluted earnings per share      $0.03     $0.01    $0.02    $0.04
                                 -------  --------  -------  -------


  Points International Ltd.
  Condensed Consolidated Interim Statements of Changes in Shareholders' Equity

                                                  Attributable to equity holders of the Company

                                                                 Unrealized     Accumulated
                                                               gains/(losses)      other                       Total
  Expressed in                         Contributed                             comprehensive  Accumulated  shareholders'
   thousands of United      Share                     Total     on cash flow
   States dollars           Capital      Surplus     Capital       hedges         income        deficit       equity
  (Unaudited)

  Balance at December
   31, 2010                   $56,683       $9,255    $65,938            $297           $297    $(52,082)        $14,153
  Net income                       --           --         --              --             --          312            312
  Other comprehensive
   loss                            --           --         --           (107)          (107)           --          (107)
  Total comprehensive
   income                          --           --         --           (107)          (107)          312            205
  Effect of stock
   option compensation
   plan                            --          332        332              --             --           --            332

  Share issuances                 605        (146)        459              --             --           --            459
                         ------------  -----------  ---------  --------------  -------------  -----------  -------------
  Balance at June 30,
   2011                      $ 57,288      $ 9,441   $ 66,729           $ 190          $ 190   $ (51,770)       $ 15,149
                         ------------  -----------  ---------  --------------  -------------  -----------  -------------


  Balance at January 1,
   2010                      $ 56,662      $ 8,677   $ 65,339            $ --           $ --   $ (54,033)       $ 11,306
  Net income                       --           --         --              --             --          531            531
  Other comprehensive
   loss                            --           --         --            (41)           (41)           --           (41)
  Total comprehensive
   income                          --           --         --            (41)           (41)          531            490
  Effect of stock
   option compensation
   plan                            --          315        315              --             --           --            315

  Share Issuances                   3           --          3              --             --           --              3
                         ------------  -----------  ---------  --------------  -------------  -----------  -------------
  Balance at June 30,
   2010                      $ 56,665      $ 8,992   $ 65,657          $ (41)         $ (41)   $ (53,502)       $ 12,114
                         ------------  -----------  ---------  --------------  -------------  -----------  -------------


  Points International Ltd.
  Condensed Consolidated Interim Statements of Cash Flows

  Expressed in thousands of United States      For the three months
   dollars                                                            For the six months
  (Unaudited)                                         Ended                 Ended
                                                June 30,   June 30,   June 30,   June 30,
                                                  2011       2010       2011       2010



  Cash flows from operating activities
  Net income for the period                         $501        $88       $312       $531

  Adjustments for:
   Depreciation of property and equipment            127         82        230        147
   Amortization of intangible assets                 436         70        778        140
   Unrealized foreign exchange loss                  738        302        394        554
   Equity-settled share-based payment
    transactions                                     163        153        332        315
   Deferred income tax expense (recovery)            350         --        475      (342)
   Unrealized net (gain) loss on derivative
    contracts designated as cash flow hedges       (198)      (365)      (150)       (60)
   Changes in non-cash balances related to
    operations                                   (1,410)    (3,406)        981      (682)
                                               ---------  ---------  ---------  ---------
  Net cash provided (used in) by operating
   activities                                        707    (3,076)      3,352        603
                                               ---------  ---------  ---------  ---------



  Cash flows from investing activities
   Acquisition of property and equipment           (308)      (836)      (468)      (881)
   Additions to intangible assets                  (291)    (1,732)      (807)    (2,249)

   Changes in restricted cash                         --        471         --      (950)
                                               ---------  ---------  ---------  ---------

  Net cash used in investing activities            (599)    (2,097)    (1,275)    (4,080)
                                               ---------  ---------  ---------  ---------



  Cash flows from financing activities

   Proceeds from exercise of share options           410          2        458          2
                                               ---------  ---------  ---------  ---------

  Net cash provided by financing activities          410          2        458          2
                                               ---------  ---------  ---------  ---------


  Net increase (decrease) in cash and cash
   equivalents                                       518    (5,171)      2,535    (3,475)
                                               ---------  ---------  ---------  ---------
   Cash and cash equivalents at beginning of
    the period                                    30,810     27,857     28,463     26,414
   Effect of exchange rate fluctuations on
    cash held                                      (735)      (300)      (405)      (553)
                                               ---------  ---------  ---------  ---------
  Cash and cash equivalents at end of the
   period                                       $ 30,593   $ 22,386   $ 30,593   $ 22,386
                                               ---------  ---------  ---------  ---------


  Interest Received                                    4          5         10          6
  Interest Paid                                       --         --         --         --


  Points International Ltd.
  Schedule of Non-IFRS Reconciliations

  Gross Margin Information

  Expressed in thousands of       For the three       For the six
   United States dollars              months            months
  (Unaudited)                         ended             ended
                                  June     June     June     June
                                   30,      30,      30,      30,
                                  2011     2010     2011     2010


  Total Revenue                  $32,725  $21,663  $61,198  $45,165
  Direct cost of principal
   revenue                        26,519   17,356   49,904   36,643
                                 -------  -------  -------  -------

  Gross Margin                    $6,206   $4,307  $11,294   $8,522
                                 -------  -------  -------  -------

  Gross Margin %                   19.0%    19.9%    18.5%    18.9%
                                 -------  -------  -------  -------



  Reconciliation of Operating Income to EBITDA

  Expressed in thousands of       For the three       For the six
   United States dollars              months            months
  (Unaudited)                         ended             ended
                                  June     June     June     June
                                   30,      30,      30,      30,
                                  2011     2010     2011     2010


  Operating income                  $834      $94     $770     $210
  Depreciation and amortization      563      152    1,008      287

  Foreign exchange gain             (24)     (13)     (92)     (35)
                                 -------  -------  -------  -------

  EBITDA                          $1,373     $233   $1,686     $462
                                 -------  -------  -------  -------

This news release was distributed by GlobeNewswire, www.globenewswire.com

SOURCE: Points International Ltd.

CONTACT: Addo Communications
Andrew Greenebaum/Laura Foster
andrewg@addocommunications.com/lauraf@addocommunications.com