Points International Ltd. Reports First Quarter 2013 Financial Results

– Q1 Revenues of $36.9 million, an increase of 32% over Q1 2012

– Reiterates 2013 revenue guidance of $200 - $220 million; 42% - 57% estimated growth year-over-year

TORONTO, May 2, 2013 (GLOBE NEWSWIRE) -- Points International Ltd. (TSX:PTS) (Nasdaq:PCOM), the global leader in reward currency management, today announced results for the first quarter ended March 31, 2013.

"I am happy to report that the momentum we saw in 2012 continued into the first quarter of 2013," said Points Chief Executive Officer, Rob MacLean. "Points delivered first quarter financial performance slightly ahead of our expectations, with revenues growing 32% over the prior-year period. As top-line revenues increased so too did transactions across our platform, with points and miles transacted increasing 18% over the first quarter of 2012. As I highlighted last quarter, the first quarter of 2013 marked the start of an important investment year for Points. During the quarter we began to invest in the continued innovation and expansion of our core business as well as to advance our open platform strategy."

"While we worked diligently this past quarter to grow and expand our current business and platform, the development and execution of our new business pipeline also remained top-of-mind. To-date in 2013, we have launched three of our previously announced new partners and deployed 6 new products into the market.  Among those partners launched were Speedway, one of America's largest company-owned and operated gasoline and convenience stores in the United States, and SVM Fuel Links, a leader in gasoline and retail gift cards, as participants in our Corporate Mileage Sales program. In addition, we launched Finnair, a leading European airline, for buy and gift products. We are also extremely excited for the anticipated launch of Southwest, which combined with recently launched partnerships, will contribute materially to the second-half of 2013."

MacLean concluded, "Looking ahead, we expect to continue to meaningfully invest against innovation in the quarters to come. We are confident that the progress and investments we are making today will continue to position Points for long-term leadership in the loyalty ecosystem. We remain on track to meet our 2013 revenue guidance of $200-$220 million and expect that the leverage inherent in our model will be increasingly evident in the second half of 2013 and even more so in 2014."

First Quarter 2013 Financial Results

Revenues totaled $36.9 million up 32% from $28.0 million in the prior-year time period. Principal revenues totaled $34.6 million, up 37% from $25.3 million in the first quarter of 2012.  The year-over-year increase in principal revenues was led by strong transactional growth from Points' reseller partners. Other partner revenue totaled $2.3 million, down 14% from $2.7 million in the prior-year time period.  

Gross margin dollars totaled $6.7 million, or 18% of total revenue. This compares to $6.4 million, or roughly 23% of total revenue, in the first quarter of 2012. In absolute dollars and as a percent of revenue, gross margin was impacted by the relative mix of partner and product sales during the quarter. With the addition of larger partnerships throughout the year, Points expects meaningful growth in margin dollars coupled with margin percentages in the sub-20% range.

The Company has continued to focus on strategic investments and hires to support the long-term growth of Points International. In light of these investments, EBITDA was $529,000 compared to $1.1 million in the first quarter of 2012.

The Company reported a net loss of $48,000, or break-even per share, compared to net income of $574,000, or $0.04 per share, in the first quarter of 2012. The year-over-year decrease in net income was largely due to a combination of lower EBITDA and increased depreciation and amortization expense.

As of March 31, 2013, total funds available, comprised of cash and cash equivalents together with security deposits, restricted cash, and amounts with payment processors was $55.6 million. The company remains debt free and is pleased with its overall financial position.

Outlook

The Company is reiterating its financial guidance for the year ending December 31, 2013, as follows:

• The Company expects revenue to be in the range of $200 million to $220 million, an increase of 42% — 57% over 2012.
• The Company expects EBITDA to be in the range of $10 million to $13 million prior to making strategic investments.
• The Company plans to re-invest a portion of its incremental profitability in 2013 in the range of $2-$3 million.
• Based on business in market today combined with deals announced to-date, the Company expects to exit 2013 at approximately $300 million annualized revenue run rate.

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) 407-0789 ten minutes prior to the start time. International dialers should call (201) 689-8562.

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 May 16, 2013 by dialing (877) 870-5176 in the U.S. or Canada or (858) 384-5517 internationally and entering the conference ID 411940.

About Points

Points, publicly traded as Points International Ltd. (TSX:PTS) (Nasdaq:PCOM), is the global leader in loyalty currency management. Via a state-of-the-art loyalty commerce platform, Points provides loyalty eCommerce and technology solutions to the world's top brands to enhance their consumer offerings and streamline their back-end operations.

Points' solutions enhance the management and monetization of loyalty currencies ranging from frequent flyer miles and hotel points to retailer and credit card rewards, for more than 45 partners worldwide. In addition to these services, Points' unique SaaS products allow eCommerce merchants to add loyalty solutions directly to their online stores, rewarding customers for purchases at the point-of-sale.

Points has been widely recognized among the loyalty and technology communities alike. The Company was named the 4th largest Canadian software company and the 40th largest Canadian technology company by the 2013 Branham300 list. Points also ranked 40th among PROFIT Magazine's top 200 Canadian companies by five-year revenue growth. For more information on Points, please visit www.Points.com, follow us @PointsBiz on Twitter or read the Points Loyalty News blog. 

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 2013 with respect to organic revenue growth, the size of our pipeline opportunity and our operating leverage. 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. Our ability to convert our pipeline of prospective partners and product launches is subject to significant risk and there can be no assurance that we will launch new partners or new products with existing partners as expected or planned.  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.

Points International Ltd.
Key Financial Measures and Schedule of Non-GAAP Reconciliations

Gross Margin Information¹

Reconciliation of Operating Income (Loss) to EBITDA²

CONTACT:  Addo Communications
          Laura Bainbridge / Kimberly Esterkin
          laurab@addocommunications.com / 
          kimberlye@addocommunications.com
          (310) 829-5400