Points International Delivers Record Revenues and Transactions for the Second Quarter of 2008



    Second Consecutive Quarter of Profitability for Leading Loyalty Rewards
    Solutions Provider

    
    Second Quarter 2008 Financial Highlights:
    -   Highest Quarterly Revenue in Company History of $17.3 Million(1), up
        313% Year-Over-Year
    -   Second Consecutive Quarter of Profitability
    -   Positive EBITDA(2) of $474,000, up from an EBITDA loss of $345,000 in
        Q207
    -   Record Second Quarter Transaction Volume of 3.2 Billion Points/Miles
        - Up from 2.5 Billion a Year Ago

    Company Reaffirms 2008 Guidance:
    -   On Track to Post 2008 Revenue of $65 - $75 Million
    -   Expects Meaningful and Material Growth in Positive EBITDA Year-Over-
        Year
    -   Record Business Metrics and Growth Demonstrate Value of Company's
        Programs to Loyalty Partners in Difficult Market Conditions
    

    TORONTO, Aug. 6 /CNW/ - Points International Ltd. ("Points") - (OTCBB:
PTSEF, TSX: PTS) - the world's leading loyalty reward solutions provider and
owner of the Points.com portal - today announced results for the second
quarter ended June 30, 2008.
    "Points delivered another record quarter with the highest revenues in
Company history, our second consecutive quarter of profitability and our
strongest business metrics to date. We believe that these results demonstrate
the increasing value of Points' services to our loyalty partners and
consumers, particularly given the slowdown in the travel sector and the fact
that our second quarter has historically been weaker than the first quarter,"
said CEO Rob MacLean. "During the second quarter, we experienced very strong
performance within our installed base of loyalty partners as 3.2 billion
points/miles were transacted across our platform, up sharply from the prior
year. We expanded our relationship with American Express Membership Rewards
with the launch of the bonus points programs. Additionally, we are excited to
have recently completed a three-year extension of our broad relationship with
American Airlines. We continue to focus efforts on extending our
principal-based partnerships, and have recently signed an agreement
strengthening our longstanding partnership with Alaska Airlines. Looking
ahead, we are optimistic that there are a number of opportunities on the
horizon with both new and existing partners which will continue to drive
growth in the second half of 2008."
    "We also made strong progress on the consumer side of our business during
the second quarter by adding new functionality to our consumer portal at
www.points.com. We are very pleased with the progress of our Global Points
Exchange (GPX) platform, the first peer-to-peer trading platform between
loyalty programs, and in the second quarter, we made GPX more accessible to
users with the expansion of a number of features and tools. These changes, in
conjunction with a comprehensive refresh of the Points.com website, continue
to make it easier for our growing base of over 2 million users, to track,
manage and trade among various loyalty program currencies. We have begun the
initial phases of our communication efforts, and are seeing increased traffic
to the website as we implement our Partner and PR plans for the second half of
the year," concluded Mr. MacLean.

    Second Quarter 2008 Financial Results

    Total revenue was a record $17.3 million for the second quarter of 2008,
an increase of 313% over the $4.2 million reported in the second quarter of
2007, and up 7% from $16.2 million in the first quarter of 2008. For the
second quarter of 2008, principal revenue totaled $14.4 million, an increase
of 701% over $1.8 million in the same period last year, and up 11% from
$13.0 million in the first quarter of 2008. Commission revenue was
$2.7 million, an increase of 19% over $2.2 million reported in the same period
of last year and down 8% from $2.9 million in the first quarter of 2008.
Interest revenue was $219,000, an increase of 44% over $153,000 reported in
the same period last year and down 21% from $277,000 in the first quarter of
2008.
    Points reported net income for the second quarter of 2008 of $43,484, or
$0.00 per share, compared to a net loss of $1,514,934, or ($0.01) per share in
the same period in the previous year, and a net income of $801,760 or
$0.01 per share, in the first quarter of 2008.
    During the second quarter of 2008, Points reported positive EBITDA of
$474,000 compared to negative EBITDA of $345,000 in the same period of 2007
and positive EBITDA of $584,000 in the first quarter of 2008.

    
    Second Quarter 2008 Business Metrics

    Total All Channels:
    -------------------
    -   Total points/miles transacted during the second quarter increased 26%
        versus last year to 3.2 billion, bringing the total cumulative
        points/miles transacted to 40.4 billion
    -   The total number of transactions increased 32% versus last year to
        approximately 350,000

    Private Branded Channels:
    -------------------------
    -   Total points/miles transacted on products distributed through
        Points' partner channels rose 30% over the prior year to 2.9 billion
        bringing the cumulative total to 35.7 billion

    Points.com Channel:
    -------------------
    -   Cumulative points/miles transacted during the second quarter of 2008
        reached approximately 4.7 billion on Points.com, a 47% increase
        versus 2007
    -   Cumulative registered users on Points.com increased 16% year-over-
        year to 2.0 million


                                                  Q2/08                Q2/08
                                                   vs.                  vs.
                      Q2/08           Q1/08       Q1/08     Q2/07      Q2/07
                  -----------------------------------------------------------
    TOTAL ALL
     CHANNELS

    Points/Miles
     Transacted    3,167,975,685   3,154,149,529     0%  2,516,181,034    26%
    #
     of Points/Miles
     Transactions        350,104         356,025    -2%        265,138    32%
    Cumulative
     Points/Miles
     Transacted   40,421,214,212  37,253,238,527     9% 28,434,558,027    42%

    PRIVATE BRANDED
     CHANNELS

    Points/Miles
     Transacted    2,884,407,602   2,816,801,473     2%  2,225,758,214    30%
    #
     of Points/Miles
     Transactions        315,921         336,840    -6%        248,637    27%
    Cumulative
     Points/Miles
     Transacted   35,726,103,800  32,841,696,198     9% 25,229,925,166    42%

    POINTS.COM
     CHANNELS

    Points/Miles
     Transacted      283,568,083     337,348,056   -16%    290,422,820    -2%
    #
     of Points/Miles
     Transactions         17,382          19,185    -9%         16,501     5%
    Cumulative
     Points/Miles
     Transacted    4,695,110,412   4,411,542,329     6%  3,204,632,861    47%
    Cumulative
     Registered
     Users             1,962,883       1,905,213     3%      1,685,786    16%
    

    Business Outlook

    "Our record first half 2008 results, combined with excellent performance
from our installed partners and increased clarity on our new business outlook
gives us confidence in our 2008 guidance calling for revenues in the range of
$65 million to $75 million and meaningful EBITDA growth over 2007 levels,"
said Anthony Lam, Chief Financial Officer. "Our current partners are driving
record traffic across our industry-leading platform and this momentum, along
with a solid new business pipeline and the expansion and marketing of our GPX
points-swap program in the second half of 2008, should result in continued
strong top and bottom-line growth for Points."

    Investor Conference Call

    Points' quarterly conference call with Rob MacLean, Points CEO,
Christopher Barnard, Points President and Anthony Lam, Points CFO, will be
held today at 5:00 p.m. Eastern Time. To participate in the conference call,
investors from the U.S. and Canada should dial (800) 257-7087 five minutes
prior to the scheduled start time. International callers should dial (303)
262-2131. Points will also offer a live and archived webcast of the conference
call, accessible from the "Investor Relations" section of the company's Web
site at http://phx.corporate-ir.net/phoenix.zhtml?c=132211&p=irol-irhome.

    About Points International Ltd.

    Points International Ltd. is owner and operator of Points.com, the
world's leading reward-program management portal. 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(R) program, American Express(R) Membership Rewards(R),
Aeroplan(R), AsiaMiles(TM), British Airways Executive Club, Northwest
WorldPerks(R), Wyndham Hotel Group's TripRewards(R), Delta SkyMiles(R), and
InterContinental Hotels Group's Priority Club(R) Rewards. Redemption partners
include Amazon.com(R) and Starbucks.
    Consumer Website: www.points.com
    Corporate Website: www.pointsinternational.com

    Caution Regarding Forward-Looking Statements

    This press release contains or incorporates forward-looking statements
within the meaning of the United States Private Securities Litigation Reform
Act of 1995, as amended, and forward-looking information within the meaning of
Canadian securities legislation (collectively forward-looking statements").
All statements, other than statements of historical fact are forward-looking
statements. These forward-looking statements include statements relating to
our guidance for 2008 with respect to revenue and EBITDA, statements relating
to our objectives, strategic plans and business development goals, and may
also include other statements that are predictive in nature or that depend
upon or refer to future events or conditions. Such forward-looking statements
can generally be identified by words such as "will", "may", "expects,"
"anticipates," "intends," "plans," "believes," "estimates" or similar
expressions. In addition, any statements that refer to expectations,
projections or other characterizations of future events or circumstances are
forward-looking statements. 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, the forward-looking 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. Known and unknown factors could cause actual results to differ
materially from those expressed or implied in such statements. Important
factors that could cause actual results to differ materially are referred to
in the body of this news release and also include the risks and uncertainties
discussed herein, the matters set forth under "Risks and Uncertainties" or
"Risk Factors" contained in Points' Annual Information Form and Management's
Discussion and Analysis filed with applicable securities regulators and the
factors detailed in Points' other filings with applicable securities
regulators, including the factors detailed in Points' 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.

    
    (1) All amounts herein are expressed in US dollars
    (2) EBITDA (Earnings (loss) before interest, amortization and foreign
        exchange) is considered by management to be a useful supplemental
        measure of performance.  However, EBITDA is not a recognized earnings
        measure under generally accepted accounting principles (GAAP).


                          POINTS INTERNATIONAL LTD.
                UNAUDITED INTERIM CONSOLIDATED BALANCE SHEETS
                     (Expressed in United States dollars)

                                                                    Restated
                                                       June 30,  December 31,
    AS AT                                                 2008          2007
    -------------------------------------------------------------------------
                                   ASSETS
                                   ------
    CURRENT
      Cash and cash equivalents                   $ 33,296,738  $ 21,535,978
      Funds receivable from payment processors       3,302,349     5,126,499
      Short-term investments                         4,843,090     7,405,499
      Security deposits                              2,068,546     1,561,175
      Accounts receivable                            2,237,745     3,353,656
      Future income tax assets                         584,100       600,815
      Current portion of deferred costs                250,157       279,355
      Prepaid and sundry assets                      1,679,471     1,767,349
                                                  ------------- -------------
                                                    48,262,196    41,630,326
                                                  ------------- -------------

    PROPERTY AND EQUIPMENT                           1,849,653     2,017,783
    INTANGIBLE ASSETS                                1,443,407     1,409,450
    GOODWILL                                         4,204,755     4,204,755
    DEFERRED COSTS                                     245,468       483,679
                                                  ------------- -------------
                                                     7,743,283     8,115,667
                                                  ------------- -------------
                                                  $ 56,005,479  $ 49,745,993
                                                  ------------- -------------
                                                  ------------- -------------

                                 LIABILITIES
                                 -----------
    CURRENT
      Accounts payable and accrued liabilities    $  2,837,217  $  3,487,927
      Current portion of deferred revenue            1,067,923     1,629,525
      Payable to loyalty program partners           35,494,983    30,749,149
      Current portion of loan payable                        -         5,927
                                                  ------------- -------------
                                                    39,400,123    35,872,528

    DEFERRED REVENUE                                   237,860       387,013
    CONVERTIBLE PREFERRED SHARES                             -    20,679,073
                                                  ------------- -------------
                                                    39,637,983    56,938,614
                                                  ------------- -------------

                      SHAREHOLDERS' EQUITY (DEFICIENCY)
                      ---------------------------------

    CAPITAL STOCK                                   56,762,948    34,887,258
    WARRANTS                                                 -        25,092
    CONTRIBUTED SURPLUS                              7,297,578     6,433,303
    ACCUMULATED OTHER COMPREHENSIVE LOSS            (2,566,230)   (2,566,230)
    DEFICIT                                        (45,126,800)  (45,972,044)
                                                  ------------- -------------
                                                    16,367,496    (7,192,621)
                                                  ------------- -------------
                                                  $ 56,005,479  $ 49,745,993
                                                  ------------- -------------
                                                  ------------- -------------



                          POINTS INTERNATIONAL LTD.
     UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
                     (Expressed in United States dollars)

    FOR THE PERIODS
     ENDED JUNE 30,       Three Month Period           Six Month Period
    -------------------------------------------------------------------------
                                        Restated                    Restated
                              2008          2007          2008          2007
    -------------------------------------------------------------------------
    REVENUE
      Principal       $ 14,425,604  $  1,801,812  $ 27,466,629  $  3,505,230
      Commission         2,655,232     2,239,026     5,548,043     4,959,046
      Interest             218,988       152,573       495,904       189,238
                      ------------- ------------- ------------- -------------
                        17,299,824     4,193,411    33,510,576     8,653,514
                      ------------- ------------- ------------- -------------

    GENERAL AND
     ADMINISTRATION
     EXPENSES

      Direct cost of
       principal
       revenue          12,166,227       901,040    22,901,161     1,734,615
      Employment costs   2,653,565     1,855,923     5,400,399     3,692,460
      Sales commissions
       and related
       expenses            774,631       339,524     1,597,181       737,479
      Marketing and
       communications      203,652       373,186       565,310       670,663
      Technology
       services            238,679       197,356       440,350       435,860
      Amortization of
       property and
       equipment           223,350       401,718       436,716       794,562
      Amortization of
       intangible
       assets               31,162       183,621        63,038       355,992
      Amortization of
       deferred costs      120,360       107,423       240,720       208,268
      Foreign exchange
       (gain)/loss        (190,740)      184,089    (1,075,524)      190,556
      Operating
       expenses            789,226       871,064     1,548,611     1,476,742
                      ------------- ------------- ------------- -------------
                        17,010,112     5,414,944    32,117,962    10,297,197
                      ------------- ------------- ------------- -------------
    OPERATING INCOME
     (LOSS) - before
     undernoted            289,712    (1,221,533)    1,392,614    (1,643,683)
                      ------------- ------------- ------------- -------------
    OTHER EXPENSES
      Interest on
       preferred shares    225,516       265,548       516,577       514,827
      Interest and
       other charges        20,712        27,853        30,793        60,276
                      ------------- ------------- ------------- -------------
                           246,228       293,401       547,370       575,103
                      ------------- ------------- ------------- -------------
    NET INCOME (LOSS) $     43,484  $ (1,514,934) $    845,244  $ (2,218,786)
                      ------------- ------------- ------------- -------------
                      ------------- ------------- ------------- -------------
    EARNINGS (LOSS)
     PER SHARE
      Basic                  $0.00        ($0.01)        $0.01        ($0.02)
      Diluted                $0.00        ($0.01)        $0.01        ($0.02)

    DEFICIT - Beginning
     of period
      As previously
       reported       $(45,170,284) $(41,553,125) $(45,972,044) $(40,861,164)
      Effect of
       restatement of
       prior periods             -      (986,315)            -      (974,424)
                      ------------- ------------- ------------- -------------
      As restated      (45,170,284)  (42,539,440)  (45,972,044)  (41,835,588)
      Net income
       (loss) for the
       period               43,484    (1,514,934)      845,244    (2,218,786)
                      ------------- ------------- ------------- -------------
    DEFICIT - End of
     period           $(45,126,800) $(44,054,374) $(45,126,800) $(44,054,374)
                      ------------- ------------- ------------- -------------
                      ------------- ------------- ------------- -------------



                          POINTS INTERNATIONAL LTD.
     UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
                   AND ACCUMULATED OTHER COMPREHENSIVE LOSS
                     (Expressed in United States dollars)

    FOR THE PERIODS
     ENDED JUNE 30,       Three Month Period           Six Month Period
    -------------------------------------------------------------------------
                                        Restated                    Restated
                              2008          2007          2008          2007
    -------------------------------------------------------------------------
    COMPREHENSIVE
     INCOME (LOSS)
      Net income
       (loss) for the
       period         $     43,484  $ (1,514,934) $    845,244  $ (2,218,786)
      Foreign currency
       translation
       adjustment                -      (443,562)            -      (476,423)
                      ------------- ------------- ------------- -------------
    Comprehensive
     income (loss)    $     43,484  $ (1,958,496) $    845,244  $ (2,695,209)
                      ------------- ------------- ------------- -------------
                      ------------- ------------- ------------- -------------

    ACCUMULATED OTHER
     COMPREHENSIVE LOSS

      Balance -
       Beginning of
       period         $ (2,566,230) $ (1,617,377) $ (2,566,230) $ (1,584,516)
        Foreign
         currency
         translation
         adjustment              -      (443,562)            -      (476,423)
                      ------------- ------------- ------------- -------------
      Balance - End
       of period      $ (2,566,230) $ (2,060,939) $ (2,566,230) $ (2,060,939)
                      ------------- ------------- ------------- -------------
                      ------------- ------------- ------------- -------------



                          POINTS INTERNATIONAL LTD.
           UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
                     (Expressed in United States dollars)

    FOR THE PERIODS
     ENDED JUNE 30,       Three Month Period           Six Month Period
    -------------------------------------------------------------------------
                                        Restated                    Restated
                              2008          2007          2008          2007
    -------------------------------------------------------------------------
    CASH FLOWS FROM
     OPERATING
     ACTIVITIES

    Net income (loss) $     43,484  $ (1,514,934) $    845,244  $ (2,218,786)

    Items not
     affecting cash
      Amortization of
       property and
       equipment           223,350       401,718       436,716       794,562
      Amortization of
       intangible
       assets               31,162       183,621        63,038       355,992
      Amortization of
       deferred costs      120,360       107,423       240,720       208,268
      Unrealized foreign
       exchange (gain)
       loss                (81,609)    2,334,602      (962,342)    2,632,723
      Employee stock
       option expense      165,356       145,650       327,363       263,001
      Interest on
       Series Two and
       Four Preferred
       Shares              225,516       265,548       516,577       514,827
    Changes in non-cash
     balances related
     to operations        (366,424)   (3,670,845)    5,931,625     3,659,188
                      ------------- ------------- ------------- -------------

    CASH FLOWS
     PROVIDED BY
     (USED IN)
     OPERATING
     ACTIVITIES            361,195    (1,747,217)    7,398,943     6,209,774
                      ------------- ------------- ------------- -------------

    CASH FLOWS FROM
     INVESTING
     ACTIVITIES
      Additions to
       property and
       equipment          (145,229)     (175,866)     (268,586)     (322,838)
      Additions to
       intangible assets   (51,195)            -       (96,996)      (23,726)
      Sale of
       short-term
       investments       7,537,903             -     7,537,903             -
      Purchase of
       short-term
       investments               -             -    (4,975,494)            -
                      ------------- ------------- ------------- -------------
    CASH FLOWS
     PROVIDED BY
     (USED IN)
     INVESTING
     ACTIVITIES          7,341,479      (175,866)    2,196,827      (346,564)
                      ------------- ------------- ------------- -------------
    CASH FLOWS FROM
     FINANCING
     ACTIVITIES
      Loan repayments            -        (5,247)       (5,927)      (11,828)
      Share issuance
       on capital
       transaction       1,799,041             -     1,799,041             -
      Issuance of
       capital stock
       on exercise of
       stock options
       and warrants        168,715       179,083       262,011       326,154
                      ------------- ------------- ------------- -------------
    CASH FLOWS
     PROVIDED BY
     FINANCING
     ACTIVITIES          1,967,756       173,836     2,055,125       314,326
                      ------------- ------------- ------------- -------------
    EFFECT OF EXCHANGE
     RATE CHANGES ON
     CASH HELD IN
     FOREIGN CURRENCY       23,613       132,136       109,865       157,455
                      ------------- ------------- ------------- -------------
    INCREASE (DECREASE)
     IN CASH AND CASH
     EQUIVALENTS         9,694,043    (1,617,111)   11,760,760     6,334,991
    CASH AND CASH
     EQUIVALENTS -
     Beginning of the
     period             23,602,695    24,891,823    21,535,978    16,939,721
                      ------------- ------------- ------------- -------------
    CASH AND CASH
     EQUIVALENTS -
     End of the
     period           $ 33,296,738  $ 23,274,712  $ 33,296,738  $ 23,274,712
                      ------------- ------------- ------------- -------------
                      ------------- ------------- ------------- -------------

    Supplemental
    ------------
     Information
     -----------
      Interest
       received       $    169,973  $    128,839  $    443,905  $    165,321
      Interest paid   $         87  $      1,299  $      1,164  $      2,297
    





For further information:

For further information: Anthony Lam, Chief Financial Officer, Points
International Ltd., (416) 596-6382, anthony.lam@points.com; Alex Wellins or
Brinlea Johnson, The Blueshirt Group, (415) 217-7722, alex@blueshirtgroup.com,
brinlea@blueshirtgroup.com

Organization Profile

POINTS INTERNATIONAL LTD.

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890