Strong Pipeline of Partnerships and Upcoming Launch of Global Points Exchange Position the Company for a Strong Second HalfRaises the Bottom end of the 2007 Full year Revenue Guidance

Points International Ltd. “Points” - - 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

Posted: 08|15|07 at 10:34 pm. Filed under: News.