Points International Ltd. Reports 75% Annual Revenue Growth in the Second Quarter of 2007



    
     Strong Pipeline of Partnerships and Upcoming Launch of Global Points
           Exchange Position the Company for a Strong Second Half

         Raises the Bottom end of the 2007 Full year Revenue Guidance
    

    TORONTO, Aug. 15 /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, 2007. The Company reported a 75% year-over-year
increase in total revenue to $4.8 million in the second quarter driven by new
and expanded partnerships with the leading loyalty program providers around
the world. For the first half of 2007, Points grew revenues 80% over the prior
year period to a record $10 million and announced a total of 10 new contracts,
renewals, and integration add-ons.
    "Points had an extremely productive first half of 2007 as we posted
strong revenue growth, positive EBITDA(1) and announced a number of exciting
new agreements and partnership expansions," said Rob MacLean, CEO of Points.
"During the second quarter, we announced new agreements with ATA Airlines,
Inc. and Icelandair Group and partnership expansions with Alaska Airlines,
Inc., Continental Airlines, Inc. and Delta Airlines, Inc. We also successfully
released the first phase of Book with Points on Points.com, in conjunction
with our partner Travelocity, and ongoing development will add airline, car
rental and other travel related categories. Despite typical seasonality and a
weakened U.S. dollar against the Canadian dollar, Points continues to execute
above plan."
    "Looking ahead to the balance of 2007, we will focus on capturing a
number of opportunities available to us and expanding the penetration of our
principal model, which minimizes risk for our partners and enhances our
overall performance. We expect to close a number of new deals and are on track
to launch our Global Points Exchange, the first peer to peer loyalty points
exchange platform in the world, by the end of the year. Based on our
leadership position in a rapidly growing market, a strong new business
pipeline, upcoming product launches and an improving financial model, we are
raising the bottom end of the full year revenue guidance range that we raised
last quarter to $21.5 - $24.0 million and expect to report positive EBITDA(1)
for 2007," concluded Mr. MacLean.
    Total revenue was $4.8 million for the second quarter of 2007, an
increase of 75% over the $2.7 million reported in the second quarter of 2006,
and down from $5.3 million in the first quarter of 2007. Second quarter total
revenue was impacted by a weakening of the U.S. dollar against the Canadian
dollar as well as anticipated seasonality associated with certain products.
Adjusting total revenue for the change in the U.S. dollar would result in an
additional $244,000 in the second quarter. For the first six months of 2007,
total expenses increased 18% to $10.0 million, as compared to $8.4 million in
the same prior year period.
    For the second quarter of 2007, principal revenue totaled $2.4 million,
an increase of 115% over $1.1 million in the same period last year, and up
from $2.2 million in the first quarter of 2007. Adjusting for the weakened
U.S. dollar against the Canadian dollar, principal revenue in the second
quarter would be higher by an additional $125,000. Commission revenue was $2.2
million, an increase of 42% over $1.6 million reported in the same period of
last year and down from $3.0 million in the first quarter of 2007. Adjusting
for the weakened U.S. dollar would result in an additional $119,000 in
commission revenue in the second quarter. Interest income was $168,000, an
increase of 180% over $60,000 reported in the same period of last year and up
from $43,000 in the first quarter of 2007.
    Points continues to have a strong recurring revenue base, with 90% of its
revenues in the quarter being recurring in nature, compared to 88% in the
second quarter of 2006.
    Points reported a net loss for the second quarter of 2007 of $1.6
million, or $0.01 per share, compared to a net loss of $3.2 million, or $0.03
per share, and versus a net loss of $811,000, or $0.01 per share, in the first
quarter of 2007. Non-cash charges, including foreign exchange loss, accrued
interest, the amortization of property, plant and equipment, intangible
assets, stock option expense and deferred costs, accounted for $1.5 million of
the net loss in the second quarter of 2007. For the first six months of 2007,
Points reported a net loss of $2.5 million, a 54% improvement compared to the
prior year period loss of $5.4 million for the same period.
    During the second quarter of 2007, the Company reported an EBITDA(1) loss
of $275,000 compared to an EBITDA(1) loss of $1.8 million in the same period
in 2006 and versus positive EBITDA(1) of $317,000 in the first quarter of
2007. Staff and technical resources were added in the second quarter to
address the growing backlog of new revenue driving business. Adjusting for the
weakened U.S. dollar would reduce the EBITDA(1) loss by $123,000 in the second
quarter. For the first six months of 2007, the Company reported positive
EBITDA(1) of $42,000 compared to an EBITDA(1) loss of $2.9 million in the
previous year period. These results demonstrate a second quarter EBITDA(1)
improvement of more than $1.5 million from the prior year period and improved
EBITDA(1) of more than $2.9 million for the first six months of 2006.

    
    Business Metrics in the Second Quarter of 2007

    -  Total points/miles transacted during the second quarter increased 32%
       versus last year to 2.5 billion, bringing total cumulative
       points/miles transacted to 28.4 billion
    -  The total number of transactions increased 17% versus last year to
       approximately 265,000

    Private Branded Channels
    ------------------------
    -  Total points/miles transacted on products distributed through Points'
       partner channels rose 41% to 2.2 billion bringing the cumulative total
       to 25.2 billion

    Points.com Channel
    ------------------
    -  Over 290 million points were transacted on Points.com, a 12% decrease
       versus 2006
    -  Cumulative registered users on Points.com increased 27% year-over-year
       to 1.7 million

    Recent Business Highlights

    -  Points announced a new principal role partnership with ATA Airlines,
       Inc. to enhance frequency, value and options for ATA Travel Awards
       Members.

    -  Points teamed up with Continental Airlines, Inc. to redesign the
       OnePass(R) Online Auction, using technology developed by Points and
       its partner Truition.

    -  Delta Air Lines, Inc. expanded their relationship with Points and used
       their technology to develop a new online auction platform for members
       of Delta's SkyMiles.

    -  Points announced a new international partnership with Icelandair Group
       to increase options for Icelandair's frequent flyer members.
    

    About Points International Ltd.

    Points International Ltd. is the 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), Cendant TripRewards(R), Delta SkyMiles(R), Gold
Points Reward Network, InterContinental Hotels Group's Priority Club(R)
Rewards, and S&H greenpoints. Redemption partners include Amazon.com(R) and
Starbucks.

    Website: http://www.points.com

    Safe Harbor Statement

    This press release contains or incorporates forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995, as
amended, and forward-looking information within the meaning of the "safe
harbour" provisions of applicable Canadian provincial securities legislation
(collectively "forward-looking statements"). These forward-looking statements
relate to, among other things, our guidance for 2007 with respect to revenue,
EBITDA, and 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 and 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 the 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 involve certain risks and
uncertainties that are difficult to predict. Undue reliance should not be
placed on such statements. Certain material factors, assumptions or estimates
are applied in making forward-looking statements. Known and unknown factors
could cause actual results may 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" contained in Points' Annual Information Form
filed with applicable securities regulators and the factors detailed in the
Points' other filings with applicable securities regulators, including the
factors detailed in the Points' annual and interim financial statements and
the notes thereto. Readers of this press release are cautioned that
forward-looking statements are not guarantees of future performance.
    Points does not undertake any obligation to update or release any
revisions to these forward-looking statements to reflect events or
circumstances after the date of this press release or to reflect the
occurrence of unanticipated events, except as required by law. All dollar
amounts are in Canadian dollars unless otherwise specified.



    
                          POINTS INTERNATIONAL LTD.

                    UNAUDITED CONSOLIDATED BALANCE SHEETS


                                                       June 30,  December 31,
    AS AT                                                 2007          2006
    -------------------------------------------------------------------------

                                   ASSETS
                                   ------

    CURRENT
      Cash and cash equivalents                   $ 29,428,801  $ 24,689,040
      Accounts receivable                            2,073,379     2,310,253
      Prepaid and sundry assets                      2,113,079     2,124,925
                                                  ------------- -------------
                                                    33,615,259    29,124,218
                                                  ------------- -------------

      PROPERTY, PLANT AND EQUIPMENT                  2,350,797     2,934,238
      GOODWILL AND INTANGIBLE ASSETS                 6,453,407     6,837,155
      DEFERRED COSTS                                   901,482     1,167,331
      FUTURE INCOME TAXES RECOVERABLE                  590,000       590,000
                                                  ------------- -------------
                                                    10,295,686    11,528,724
                                                  ------------- -------------
                                                  $ 43,910,945  $ 40,652,942
                                                  ------------- -------------
                                                  ------------- -------------


                                 LIABILITIES
                                 -----------

    CURRENT
      Accounts payable and accrued liabilities    $  2,208,921  $  3,342,868
      Deposits                                      26,782,935    21,159,193
      Current portion of loan payable                   22,712        33,515
                                                  ------------- -------------
                                                    29,014,568    24,535,576

      LOAN PAYABLE                                           -         5,289
      CONVERTIBLE PREFERRED SHARES                  20,061,190    19,506,279
                                                  ------------- -------------
                                                    49,075,758    44,047,144
                                                  ------------- -------------

                          SHAREHOLDERS'  DEFICIENCY
                          -------------------------

      CAPITAL STOCK                                 44,598,353    43,051,048
      WARRANTS                                         186,688       186,688
      CONTRIBUTED SURPLUS                            7,844,656     8,703,517
      DEFICIT                                      (57,794,510)  (55,335,455)
                                                  ------------- -------------
                                                    (5,164,813)   (3,394,202)
                                                  ------------- -------------

                                                  $ 43,910,945  $ 40,652,942
                                                  ------------- -------------
                                                  ------------- -------------



                          POINTS INTERNATIONAL LTD.

     UNAUDITED CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME

                            3 Month Period              6 Month Period
                      --------------------------- ---------------------------
    FOR THE PERIODS
    ENDED JUNE 30         2007          2006          2007          2006
    -------------------------------------------------------------------------

    REVENUES
      Principal       $  2,359,559  $  1,095,645  $  4,599,847  $  1,859,728
      Commission         2,234,788     1,570,629     5,218,066     3,580,900
      Interest income      167,876        59,977       210,850       125,096
                      ------------- ------------- ------------- -------------
                         4,762,223     2,726,251    10,028,763     5,565,724

    GENERAL AND
     ADMINISTRATION
     EXPENSES            5,037,069     4,542,915     9,986,917     8,432,644
                      ------------- ------------- ------------- -------------

    EARNINGS (LOSS)
     - Before interest,
     amortization and
     other items          (274,846)   (1,816,664)       41,846    (2,866,920)

      Foreign exchange
       loss                288,087       255,513       304,954       243,049
      Interest on
       convertible
       debenture                 -        24,046             -       194,753
      Interest on
       convertible
       preferred
       shares              277,456       277,456       554,911       554,911
      Capital tax,
       interest and
       loss on
       short-term
       investment           30,646         1,310        68,651        10,914
      Amortization of
       property, plant
       and equipment,
       intangible
       assets and
       deferred costs      776,972       775,701     1,572,385     1,531,355
                      ------------- ------------- ------------- -------------
                         1,373,161     1,334,026     2,500,901     2,534,982
                      ------------- ------------- ------------- -------------
    NET LOSS AND
     COMPREHENSIVE
     LOSS             $ (1,648,007) $ (3,150,690) $ (2,459,055) $ (5,401,902)
                      ------------- ------------- ------------- -------------

    LOSS PER SHARE    $      (0.01) $      (0.03) $      (0.02) $      (0.06)
                      ------------- ------------- ------------- -------------
                      ------------- ------------- ------------- -------------



                          POINTS INTERNATIONAL LTD.

                 UNAUDITED CONSOLIDATED STATEMENTS OF DEFICIT

                            3 Month Period              6 Month Period
                      --------------------------- ---------------------------
    FOR THE PERIODS
    ENDED JUNE 30         2007          2006          2007          2006
    -------------------------------------------------------------------------
    DEFICIT -
     Beginning of the
     period           $(56,146,503) $(49,679,971) $(55,335,455) $(47,428,759)
    NET LOSS - For the
     period             (1,648,007)   (3,150,690)   (2,459,055)   (5,401,902)
                      ------------- ------------- ------------- -------------
    DEFICIT - End of
     the period       $(57,794,510) $(52,830,661) $(57,794,510) $(52,830,661)
                      ------------- ------------- ------------- -------------
                      ------------- ------------- ------------- -------------


    (1)EBITDA (Earnings (loss) before interest, amortization and other items)
    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).
    





For further information:

For further information: For investor relations: 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; For
partnerships and other inquiries: Peter Lockhard, Senior Vice President
Partners, Points International Ltd., (416) 596-6392,
peter.lockhard@points.com

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POINTS INTERNATIONAL LTD.

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