Points International Ltd. Reports Third Quarter 2011 Results

–        Revenue of $28.8 million increased 23% year over year

–        Record Gross Margin¹ of $6.3 million increased 21% year over year

–        EBITDA² of $1.9 million increased 66% year over year

–        Strong new partner and product launches with robust pipeline for the remainder of 2011

–     Full year 2011 guidance reiterated

TORONTO, Nov. 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 third quarter ended September 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 third quarter performance emphasizes Points' consistent financial and operational successes, as demonstrated by our revenue growth and profitability as well as the expansion of our loyalty reward management platform," said Points International Chief Executive Officer Rob MacLean.  "Moreover, we have been able to deliver meaningful improvements in our profitability metrics with EBITDA expanding 66% over the prior year quarter and 40% sequentially.  This continued expansion in profitability was driven by year-over-year revenue growth in addition to consistent focus on margins and operating expense discipline."

MacLean continued, "In the first three quarters of 2011, we welcomed 5 new transactional partners and launched 32 new products, to end the third quarter with approximately 180 products and services with nearly 50 partners worldwide. Recently, we also extended our existing strategic partnerships with American Airlines AAdvantage and US Airways as we re-launched our corporate wholesale platform and introduced our very first miles gift registry.  Additionally, we launched our new multi-currency ecommerce merchant app Incentify by Points.com, which has generated significant interest since going live last month. This ability to continue to develop our pre-existing relationships across the private label and Points.com branded platforms is a key driver of our success."

Mr. MacLean concluded, "We expect to build upon our positive momentum and are on track to deliver results in-line with our financial objectives for the year.  We enter the fourth quarter with a strong pipeline of prospective product deployments for the remainder of 2011. We look forward to sharing our success in the coming months as we continue to gain importance in the loyalty currency ecosystem."

Third Quarter 2011 Financial Results

Total revenue was $28.8 million for the third quarter of 2011. Revenue was up 23% over the $23.5 million reported in the third quarter of 2010, and down 12% from the $32.7 million reported in second quarter 2011. Principal revenue totaled $26.9 million, an increase of 22% over the $22.0 million in same period last year and down 13% from the $30.8 million reported in the second quarter 2011. Other partner revenue was $1.9 million, up from $1.5 million in the third quarter 2010 but down slightly from $2.0 million sequentially.

While revenues were down sequentially, gross margin dollars for the third quarter of 2011 increased, totaling $6.3 million, or 22% of total revenue, compared to gross margin of $6.2 million or 19% of revenue in the second quarter of 2011. On a year-over-year basis, gross margin dollars saw marked improvement, increasing $1.1 million or 21% over the third quarter of 2010. This improvement in gross margin dollars positions Points well from a cash flow and profitability standpoint for the remainder of the year and into 2012.

Net income for the third quarter of 2011 was $1.7 million, or $0.11 per share. This compares to net income of $501,000, or $0.03 per share, in the second quarter of 2011 and net income of $1.1 million, or $0.07 per share, in the third quarter of 2010.

During the third quarter of 2011, Points reported positive EBITDA of $1.9 million compared to positive EBITDA of $1.2 million in the same period of 2010 and positive EBITDA of $1.4 million in the second quarter of 2011.

As of September 30, 2011, total funds available, comprised of cash and cash equivalents together with security deposits, restricted cash and amounts with payment processors was $41.1 million, down from $43.1 million at the end of the second quarter 2011 due in part to capital expenditures of $0.5 million during the third quarter. The company remains debt free and is pleased with its overall financial position.

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 before interest, depreciation, 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.

Business Outlook

The Company is reiterating its financial guidance for the year ending 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) 941-1427 ten minutes prior to the start time. International dialers should call (480) 629-9664. 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 November 16, 2011 by dialing (877) 870-5176 in the U.S. or Canada or (858) 384-5517 internationally and entering the conference ID 4477786.

About Points International Ltd

Points International Ltd. (TSX:PTS) (Nasdaq:PCOM) is the owner and operator of Points.com, the world's leading reward program management platform. The site was named one of the 30 Best Travel Sites in 2008 and 28 Best Travel Sites in 2009 by Kiplinger's. At Points.com consumers can Earn, Buy, Gift, Share, Trade, Exchange and Redeem miles and points from more than 25 of the world's leading reward programs. Participating programs include American Airlines AAdvantage(R) program, Aeroplan(R), AsiaMiles(TM), US Airways Dividend Miles(R) and InterContinental Hotels Group's Priority Club(R) Rewards. Redemption partners include Amazon.com(R), PayPal and Starbucks. For more information, visit www.pointsinternational.com, follow us on Twitter, @pointsadvisor, on Facebook (www.facebook.com/pointsfans), or on our blog (http://blog.points.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 nine months ended September 30, 2011 and the comparative information presented in these interim financial statements for both the three and nine months ended September 30, 2010 and the year ended December 31, 2010.