Points International Ltd. reports 2004 third quarter results
New partner relationships and development of consumer enhancements position company
for growth
Toronto, November 10, 2004 – Points International Ltd. (TSX: PTS, OTC: PTSEF), operator of
the world’s leading reward program management portal – at www.points.com – reported financial
results for the third quarter and nine months ended September 30, 2004.
The Company reported revenues of $1.98 million in the 2004 third quarter, an increase of 20%
versus $1.65 million during the same period in 2003. New business established in both the
second and third quarters, as well as price increases for consumer activity implemented at the end
of the third quarter, contributed to the increase in revenue, and are expected to generate revenue
growth in subsequent periods. Points powered the cumulative online exchange, sale and transfer
of 6.5 billion points and miles, up from 5.3 billion at the end of the third quarter of 2004 and 3.0
billion at 2003 year end.
“Points.com continued its successful strategy of establishing partner relationships with the
world’s most important and successful loyalty program operators,” noted CEO Rob MacLean.
“New relationships launched or announced in the third and early fourth quarter include partners
such as British Airways, Prime Hospitality, Goldpoints, Frontier Airlines and Hawaiian Airlines.”
Several new partners will be joining Points.com and/or launching additional private branded
solutions with Points.com in the fourth quarter, including the previously announced relationship
with Frontier Airlines. These new partners are expected to increase the number of transactions we
perform and grow traffic significantly.”
In addition to ongoing efforts to establish additional partner relationships, the third quarter saw
the company begin development on the next version of its consumer experience at the website
www.points.com. In the second quarter of 2005, several significant changes to the Points.com
consumer experience will be launched.
The company is working closely with its partners, and industry experts, on the development of
the next version of the Points.com website, which represents a major enhancement in the
relationship with both reward program partners and consumers. Today, the consumer interacts
with a site that centers on a single feature: Exchange. The new Points.com website will broaden
its offerings, and present each consumer with a personalized view of their reward program
universe.
“As a result of this personalized view, Points.com will help consumers realize more value from
their favorite programs, and “Get More Rewards, Faster™”. This is accomplished by adding new
mile and point management tools such as ways to purchase and earn more miles or points in their favorite programs. In addition, the system will be driven by an Amazon-style associative
relevance suggestion engine that will use the consumer’s unique program, reward goals and point
balance mix to suggest ways to use the earn, buy and exchange tools to “Get More Rewards,
Faster™”, stated Mr. MacLean.
The result of these changes is the evolution of Points.com to a “reward management portal”,
providing a more comprehensive and engaging consumer experience.
This reward program management utility will add new revenue streams to the Points.com
business model, including a focus on subscription membership. Management anticipates
accessing significant revenue streams from the additional functionality on the site.
Investment is well underway, and these changes will be phased in over the course of 2005, with
monthly releases beginning in the second quarter. During the second quarter, Points.com users
will immediately notice a new look and feel, reflecting the more consumer-focused approach.
Over the course of the spring and summer, Points.com will add purchase, earn, and suggestion
functionality. In the second half of 2005, management will begin driving significant consumer
traffic to the new Points.com website to leverage the site’s ongoing evolution.
Third quarter highlights include:
•Strong recurring revenues, as 92% of Points.com’s revenues were recurring.
•General and administrative expenses were $2.91 million for the quarter, up from $2.16
million in 2003 and down from $3.10 million in the second quarter of 2004. As Points
continues to enhance the consumer functionality of Points.com, general and administrative
expenses in the fourth quarter are likely to be marginally higher than the third quarter of
2004.
• Loss before interest, amortization and other deductions (“EBITDA”) was reduced to
($926,256) for the third quarter of 2004 compared with ($1.07 million) in the prior quarter
and ($513,413) for the same period in 2003.
• The period net loss decreased to ($2.0 million) compared with ($2.15 million) in the prior
quarter, and ($1.63 million) for the previous year.
• Cash was $15.25 million at quarter-end, compared to $18.43 million in the prior quarter.
Decreased cash is attributed to a lower foreign exchange rate, decreased deposits and the
operating loss for the third quarter.
• As at quarter-end, Points.com’s activity continued to demonstrate strong growth as there was
a 186% increase in points transacted versus the year earlier period. This represented a record
level of transactions.
• The transaction size of each exchange increased to 18,041 points per exchange, up from
15,663 in the third quarter of 2003, and 15,060 in the prior quarter.
The company expects that the fourth quarter and year-end results will be released on or about
March 10, 2005.
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 exchange points and miles between
reward programs so that they can Get More Rewards, Faster™. Points.com has attracted over 40
of the world’s most important reward programs, including industry leaders American Airlines
(the AAdvantage® program), Delta Air Lines (SkyMiles®), eBay (Anything Points),
InterContinental Hotels (Priority Club® Rewards), and Starbucks.
Points` shares trade on the TSX under the stock symbol PTS. For more information, visit
www.points.com.
Contacts:
For investor relations:
Steve Yuzpe, CFO
(416) 596-6382
steve.yuzpe@points.com
For partnerships and other inquiries:
Christopher Barnard, President
(416) 596-6381
christopher.barnard@points.com.
Ed Lewis
CEOcast, Inc. for Points International
(212) 732-4300
elewis@ceocast.com
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