Mr. Rob MacLean reports

POINTS INTERNATIONAL LTD. REPORTS FOURTH QUARTER AND FULL YEAR 2013 FINANCIAL RESULTS

Points International Ltd. has released its results for the fourth quarter and full-year ended Dec. 31, 2013.

"Two thousand thirteen was another record year for Points," said Rob MacLean, chief executive officer of Points. "We finished the year on target, with revenues increasing roughly 45 per cent to $202-million and adjusted EBITDA [earnings before interest, taxes, depreciation and amortization] growing steadily during this aggressive growth period. Our performance reflects the contribution from new products and partners launched over the last 12 months, as well as increased transactional activity among existing partners. In 2013, Points launched 15 new products with five new partners, most notably welcoming Southwest Airlines, Speedway, Finnair, and SVM Fuel Circle to our growing loyalty network.

"Two thousand thirteen was also an investment year for Points, in which we added key product functionality as well as began to set the groundwork for Points' open-platform strategy. The opportunities that we are investing against are diverse -- spanning from enhancing our mobile capabilities to broadening our payments functionality, improved data analytics capabilities and innovative enhancements to our white-label products that we believe will create value within the loyalty landscape.

"Importantly, our positive momentum has continued into 2014. In February, we announced a new partnership with MasterCard Worldwide, where we will partner with their loyalty division to add value to the dozens of bank loyalty programs around the world that leverage the MasterCard loyalty platform. This partnership will dramatically expand our exposure to the financial services sector and will benefit not only those new relationships, but also many of our existing partnerships already in place. Additionally, we recently launched Spirit Airlines on our network, providing Free Spirit members the ability to buy and gift their miles. And today, we are excited to announce the addition of Hilton Worldwide and the Hilton HHonors program to our partner network. Further details on the Hilton relationship will be shared at the launch of services.

"Our performance in 2013 and early results in 2014 translate into strong forecasted growth in 2014. Revenues are anticipated to grow from 25 per cent to 40 per cent, led by growth in our organic business, as well as the contribution from new partners and products launched or announced over the last 12 months. With respect to profitability, we expect the business to demonstrate meaningful leverage, as we continue to drive oversized top-line growth across our increasingly efficient loyalty commerce platform. As a result, we expect full-year adjusted EBITDA to be in the range of $16-million to $20-million prior to making strategic investments."

Fourth quarter 2013 financial results (unless otherwise stated, all comparisons for the fourth quarter of 2013 are on a year-over-year basis)

Revenues totalled $69.1-million, up 69 per cent from $40.8-million. Principal revenues totalled $66.9-million, up 75 per cent from $38.1-million. The year-over-year increase in principal revenues was largely due to the impact of new partners launched over the last 12 months.

Gross-margin dollars totalled $10.3-million, or 14.9 per cent of total revenue, compared with $8-million, or 19.6 per cent of total revenue. The increase in gross margin dollars was largely driven by the impact of new partnerships launched over the last 12 months. As a percentage of revenue, gross margin reflects the relative mix of partner and product activity during the quarter.

Adjusted EBITDA totalled $3.4-million, up 118 per cent from $1.6-million. Record revenue and gross margin dollars in the quarter, combined with a steady total operating cost structure, have resulted in adjusted EBITDA more than doubling in the fourth quarter.

The company reported net income of $2.3-million, or 15 cents per diluted share, compared with net income of $5.6-million, or 37 cents per share, in the fourth quarter of 2012. In the fourth quarter of 2012, the company benefited from approximately $4.9-million in previously unrecognized deferred tax assets.

              FOURTH QUARTER 2013 BUSINESS METRICS
                                                                                            
                                          Q4, 2013   Q4, 2012   Q3, 2013    
Total all channels                                                                          
Points/miles transacted (in 000s)        5,348,320  4,411,123  4,249,170          
Number of points/miles transactions        500,782    371,399    500,204            

Full-year 2013 results

Revenues were $202.4-million, up 45 per cent from $139.5-million in 2012.

Gross-margin dollars totalled $33.1-million, or 16.4 per cent of revenue, compared with $28.6-million, or 20.5 per cent of revenue, in 2012.

Adjusted EBITDA totalled $7.4-million, up 17 per cent from $6.3-million in 2012.

Net income was $3.6-million, or 23 cents per diluted share, compared with net income of $8.3-million, or 54 cents per share, in 2012. Net income in 2012 benefited from the recognition of previously unrecognized deferred tax assets, which resulted in a recovery of $4.8-million for the year.

As of Dec. 31, 2013, total funds available, comprising cash and cash equivalents together with security deposits, restricted cash, and amounts with payment processors was $74.9-million. The company remains debt free and is pleased with its overall financial position.

Outlook

The company is initiating financial guidance for the year ending Dec. 31, 2014, as follows. Revenue is expected to grow in the range of 25 per cent to 40 per cent over 2013. This revenue range contemplates organic growth within Points' existing business, as well as the contribution from partners and products announced or launched since 2013. Adjusted EBITDA is expected to be in the range of $16-million to $20-million, prior to making strategic investments. Strategic investments are expected to be in the range of $5-million to $6-million for 2014.

Investor conference call

Points' conference call with investors will be held on March 5, 2014, at 4:30 p.m. Eastern Time. To participate, investors from the United States and Canada should dial 877-407-0784 10 minutes prior to the start time. International callers should call 201-689-8560.

In addition, the call is being webcast and can be accessed at the company's website and will be archived on-line upon completion of the call. A telephonic replay of the conference call will be available through March 19, 2014, by dialling 877-870-5176 in the United States or Canada or 858-384-5517 internationally and entering the conference ID 13574701.

                                CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 
                           (in thousands of U.S. dollars, except per-share amounts)       
                       
                                                       For the three months ended           For the 12 months ended
                                                     Dec. 31, 2013  Dec. 31, 2012    Dec. 31, 2013    Dec. 31, 2012
Revenue
Principal                                               $ 66,910         $ 38,139        $ 193,880        $ 129,859
Other partner revenue                                      2,157            2,657            8,431            9,617
Interest                                                      20                7               59               33
Total revenue                                             69,087           40,803          202,370          139,509
Expenses
Direct cost of principal revenue                          58,785           32,825          169,266          110,949
Employment costs                                           5,201            4,373           18,934           15,368
Marketing and communications                                 223              439            1,066            1,520
Technology services                                          241              159            1,013              677
Depreciation and amortization                                715              728            3,285            2,803
Foreign exchange (gain) loss                                 (77)             (33)            (123)             (68)
Operating expenses                                         1,234            1,446            4,657            4,664
Impairment of long-lived assets                               --              110               --              110
Total expenses                                            66,322           40,047          198,098          136,023
Operating income                                           2,765              756            4,272            3,486
Interest and other charges (income)                           --                1               --               (7)
Earnings before income taxes                               2,765              755            4,272            3,493
Income tax recovery                                          474           (4,883)             666           (4,769)
Net income                                                 2,291            5,638            3,606            8,262
Other comprehensive (loss) income
(Loss) gain on foreign exchange derivatives
designated as cash flow hedges, net of income
tax recovery of $222 (2012: expense of $41)                 (308)            (144)            (616)             113
Reclassification to net income of (loss) gain
on foreign exchange derivatives designated as
cash flow hedges, net of income tax recovery of
$117 (2012: expense of $75)                                  157              (97)             325             (210)
Other comprehensive (loss) income for
the period, net of income tax                               (151)            (241)            (291)             (97)
Total comprehensive income                               $ 2,140          $ 5,397          $ 3,315          $ 8,165
Earnings per share
Basic earnings per share                                 $  0.15           $ 0.37           $ 0.24           $ 0.55
Diluted earnings per share                               $  0.15           $ 0.37          $  0.23           $ 0.54

We seek Safe Harbor.