GlobeNewswire Inc | May 12, 2021 04:05PM EDT

May 12, 2021

- Continued Operational Resilience Drives Second Consecutive Quarter of Sequential Revenue, Gross Profit and Adjusted EBITDA Growth -- Strong Quarter of New and Expanded Partnership Activity -

TORONTO, May 12, 2021 (GLOBE NEWSWIRE) -- Points International Ltd. (TSX: PTS) (Nasdaq: PCOM) (Points or the Company), the global leader in powering loyalty commerce, is reporting financial results for the first quarter ended March 31, 2021.

Unless otherwise noted, all amounts are in USD. The complete first quarter Condensed Consolidated Interim Financial Statements and Managements Discussion & Analysis are available at www.sedar.com and www.sec.gov.

Our first quarter results represent our best quarterly performance since the onset of the pandemic, said Rob MacLean, CEO of Points. We drove continued sequential improvements across revenue and gross profit, as well as significant Adjusted EBITDA expansion. Further, our recent equity offering has bolstered our strong liquidity position, giving us additional flexibility as we execute on our growth drivers throughout the year. As the broader travel and hospitality industry works towards recovery, we are seeing increased consumer confidence and pent-up travel demand which is driving improved performance across our products and services. These positive trends are strengthening our confidence in the important role loyalty programs will play in the coming years of growth in travel and hospitality.

Building on our pipeline momentum in 2020, we have continued to execute on our core growth drivers so far in 2021. We expanded our relationships with several existing partnerships, including additional deployments of our new Subscription and Accelerate Anything services, both of which have generated strong partner interest during the pandemic. In addition, we have continued to develop new relationships and deepened our presence in the growing Middle East travel market.

Mr. MacLean concluded: As we look to the rest of 2021, the progress we have seen over the past 2 quarters provides us with confidence that the initial stages of the travel recovery are underway. We will continue to execute on our growth drivers and support our partners as we accelerate our performance in the coming quarters of recovery. Points has demonstrated tremendous resilience throughout the pandemic, and I am proud of our teams commitment and effort as we emerge from the past year as an even stronger organization.

First Quarter 2021 Financial Highlights

For the three months ended(in millions USD) March 31, December 31, 2020 March 31, 2021 2020Total Revenue $65.0 $56.4 $82.7Gross Profit $9.0 $8.5 $13.8Total Operating Expenses $10.2 $9.9 $12.5Net Income/(Loss) ($1.1) ($0.7) $1.1Adjusted EBITDA^1 $1.2 $0.4 $3.6

-- Total revenue in the first quarter of 2021 increased 15% on a quarter over quarter basis due to improved marketing performance and increased transactional metrics and decreased 21% year over year due to the continued impacts of COVID-19. -- Gross profit improved 6% compared to the fourth quarter of 2020 due to continued performance improvements across multiple partners and was down 34% on a year over year basis due to the impacts of COVID-19. -- Operating expenses decreased $2.3 million or 18% compared to the prior year quarter due to $1.2 million in wage subsidies recognized during the first quarter of 2021 combined with continued reductions to discretionary spending and prudent cost management in response to the pandemic. Operating expenses increased slightly by 3% compared to the fourth quarter of 2020. -- Total funds available2 at the end of the first quarter were $94.2 million compared to $79.1 million as at December 31, 2020. The increase primarily reflects net proceeds received from the closing of the Companys equity offering in March 2021, partially offset by the repayment of all remaining borrowings from the senior secured credit facility during the quarter.

Recent Operational Highlights

-- Deployed our new Accelerate Anything service with the Emirates Skywards program in the first quarter, which enables members to quickly boost their prior mileage earnings, including miles earned on credit card and other non-travel related activity. -- Expanded the reach of our Buy service with Spirit Airlines in the first quarter, giving members the ability to use their miles balance plus cash to top up seamlessly for flight awards. -- Launched Rapid Rewards Subscription Plan with Southwest Airlines in March, allowing members to build towards a pre-determined rewards balance through monthly points deposits. -- In April, launched a new partnership with Mashreq Bank, a leading United Arab Emirates financial institution, to allow members of Mashreqs Salaam program to exchange points into Emirates Skywards miles. -- Expanded our partnership with the Qatar Airways Privilege Club program with two additional services: (1) Deployed our Hotel & Car Rewards service in April, enabling members to now earn and redeem their miles on both hotel bookings and car rentals; and (2) Enabled our Accelerate Anything service for Privilege Club members in May. Qatar is the third loyalty program partner to take advantage of this new capability over the last year. -- In April, we expanded our existing integration between Hilton Honors and Lyft to support Lyfts vaccine access initiative, rewarding members who have donated a Lyft ride to those in need with a one-time reward of Hilton Honors points.

1Adjusted EBITDA (Earnings before income tax expense, depreciation and amortization, foreign exchange, finance costs and equity-settled share-based compensation) is considered by management to be a useful supplemental measure when assessing financial performance. Management also believes that Adjusted EBITDA is an important indicator of the Companys ability to generate liquidity through operating cash flow to fund future capital expenditures and working capital needs. However, Adjusted EBITDA is not a measure of financial performance under IFRS and should not be considered a substitute for Net Income, which we believe to be the most directly comparable IFRS measure. See Non-GAAP Financial Measures section of Managements Discussion and Analysis.2Total funds available is defined as cash and cash equivalents, cash held in trust, and funds receivable from payment processors.

Conference Call

Points will hold a conference call today at 4:30 p.m. Eastern time to discuss its first quarter 2021 results, followed by a question-and-answer session.

Date: Wednesday, May 12, 2021Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)Toll-free dial-in number: 1-877-407-0784International dial-in number: 1-201-689-8560Conference ID: 13719066

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at 1-949-574-3860.

The conference call will be broadcast live and available for replay here and via the Events section of Points Internationals IR site here.

A replay of the conference call will be available after 7:30 p.m. Eastern time on the same day through May 26, 2021.

Toll-free replay number: 1-844-512-2921International replay number: 1-412-317-6671Replay ID: 13719066

About Points International Ltd.

Points, (TSX: PTS) (Nasdaq: PCOM) is a trusted partner to the worlds leading loyalty programs, leveraging its unique Loyalty Commerce Platform to build, power, and grow a network of ways members can get and use their favourite loyalty currency. Our platform combines insights, technology, and resources to make the movement of loyalty currency simpler and more intelligent for nearly 60 reward programs worldwide. Founded in 2000, Points is headquartered in Toronto with teams operating around the globe.

For more information, visit 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 or relate to but are not limited to, among other things, plans we have implemented in response to the COVID-19 pandemic and its expected impact on us (including with respect to: cost saving measures that have been implemented and our capitalization), our financial performance, our growth strategies, our business pipeline and ability to sign and launch new loyalty program partnerships, and our beliefs on the long-term sustainability of the loyalty industry, the role of the loyalty industry in the recovery of the travel industry, the competitive environment in which we operate, the recovery of the broader travel and hospitality industries, other objectives, strategic plans and business development goals, and may also include other statements that are predictive in nature, or that depend upon or refer to future events or conditions, and can generally be identified by words such as "may," "will," "expects," "anticipates," "continue," "intends," "plans," "believes," "estimates" or similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements.

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 actual results may differ materially from those expressed or implied in such statements. Undue reliance should not be placed on such statements. In particular, uncertainty around the duration and scope of the COVID-19 pandemic and the impact of the pandemic and actions taken in response on global and regional economies, economic activity, and all elements of the travel and hospitality industry may have a significant and materially adverse impact on our business. In addition, the risks, uncertainties and other factors that may impact the results expressed or implied in such forward-looking statements include, but are not limited to: (i) airline or travel industry disruptions, such as an airline insolvency and continued airline consolidation; (ii) our dependence on a limited number of large clients for a significant portion of our consolidated revenue; (iii) our reliance on contractual relationships with loyalty program partners that are subject to termination and renegotiation; (iv) our exposure to significant liquidity risk if we fail to meet contractual performance commitments; (v) our ability to convert our pipeline of prospective partners or launch new products with new or existing partners as expected or planned; (vi) our dependence on various third-parties that provide certain solutions in our Platform Partners segment that we market to loyalty program partners; (vii) the fact that our operations are conducted in multiple jurisdictions and in multiple currencies and as such dramatic fluctuations in exchange rates of the foreign currencies can have a dramatic effect on our financial results and (viii) the risk of an event of default under our senior secured credit facility. These and other important risk factors that could cause actual results to differ materially are discussed in Points' annual information form, Form 40-F, annual and interim management's discussion and analysis (MD&A), 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.

Non-GAAP Financial Measures The Companys financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS"). Management uses certain non-GAAP measures, which are defined in the appropriate sections of this press release, to better assess the Companys underlying performance. These measures are reviewed regularly by management and the Company's Board of Directors in assessing the Companys performance and in making decisions about ongoing operations. In addition, we use certain non-GAAP measures to determine the components of management compensation. We believe that these measures are also used by investors as an indicator of the Companys operating performance. Readers are cautioned that these terms are not recognized GAAP measures and do not have a standardized GAAP meaning under IFRS and should not be construed as alternatives to IFRS terms, such as net income. Refer to Non-GAAP Financial Measures section of the Companys Q1 2021 MD&A for reconciliation to, and description of the Companys non-GAAP financial measures.

Investor Relations Contact

Cody Slach and Jackie KeshnerGateway Investor Relations 1-949-574-3860IR@points.com

Points International Ltd. Key Financial Measures and Schedule of Non-GAAP Reconciliations Reconciliation of Net Income to Adjusted EBITDA ^[1] Expressed in thousands of United States dollars For the three months ended Mar 31, 2021 Mar 31, 2020 Net (Loss) Income $ (1,092 ) $ 1,118 Income tax (recovery) expense (415 ) 309 Finance costs 126 88 Depreciation and amortization 1,417 1,249 Foreign exchange loss (gain) 227 (38 ) Equity-settled share-based compensation 930 879 expenseAdjusted EBITDA $ 1,193 $ 3,605 ^[1] Adjusted EBITDA is a non-GAAP financial measure, which is defined asearnings before income tax expense, finance costs, depreciation andamortization, equity-settled share-based compensation expense, and foreignexchange. Management believes that adjusted EBITDA is an important indicator ofthe Company?s ability to generate liquidity through operating cash flow to fundfuture capital expenditures and working capital needs. However, adjusted EBITDAis not a measure of financial performance under IFRS and should not beconsidered a substitute for Net Income, which we believe to be the mostdirectly comparable IFRS measure.

Points International Ltd.Condensed Consolidated Interim Statements of Financial Position Expressed in thousands of United States dollars(Unaudited) As at March 31, December 31, 2021 2020 ASSETS Current assets Cash and cash equivalents $ 84,682 $ 73,070 Cash held in trust 599 280 Funds receivable from payment processors 8,955 5,795 Accounts receivable 5,965 3,559 Prepaid taxes 1,527 1,760 Prepaid expenses and other assets 2,942 3,075 Total current assets $ 104,670 $ 87,539 Non-current assets Property and equipment 1,266 1,529 Right-of-use assets 1,700 1,862 Intangible assets 11,677 12,130 Goodwill 5,681 5,681 Deferred tax assets 3,431 3,087 Other assets 202 202 Total non-current assets $ 23,957 $ 24,491 Total assets $ 128,627 $ 112,030 LIABILITIES Current liabilities Accounts payable and accrued liabilities $ 5,435 $ 5,766 Income taxes payable 675 489 Payable to loyalty program partners 60,096 50,629 Current portion of lease liabilities 1,173 1,156 Current portion of other liabilities 953 847 Current portion of long term debt - 3,500 Total current liabilities $ 68,332 $ 62,387 Non-current liabilities Long term debt - 11,500 Lease liabilities 887 1,136 Other liabilities 50 57 Deferred tax liabilities 1,526 1,731 Total non-current liabilities $ 2,463 $ 14,424 Total liabilities $ 70,795 $ 76,811 SHAREHOLDERS? EQUITY Share capital 72,769 49,251 Contributed surplus 2,025 1,795 Accumulated other comprehensive income 580 623 Accumulated deficit (17,542 ) (16,450 )Total shareholders? equity $ 57,832 $ 35,219 Total liabilities and shareholders? equity $ 128,627 $ 112,030

Points International Ltd.Condensed Consolidated Interim Statements of Comprehensive (Loss) Income Expressed in thousands of United States dollars, except per share amounts(Unaudited) For the three months ended March 31 2021 2020^[2] REVENUE Principal $ 60,242 $ 75,870 Other partner revenue 4,783 6,803 Total Revenue $ 65,025 $ 82,673 Direct cost of revenue 56,025 68,846 Gross Profit $ 9,000 $ 13,827 OPERATING EXPENSES Sales and marketing 3,560 4,521 Research and development 2,530 3,628 General and administrative 2,701 3,141 Depreciation and amortization 1,417 1,249 Total Operating Expenses $ 10,208 $ 12,539 Foreign exchange loss (gain) 227 (38 ) Finance and other income (54 ) (189 ) Finance costs 126 88 (LOSS) INCOME BEFORE INCOME TAXES $ (1,507 ) $ 1,427 Income tax (recovery) expense (415 ) 309 NET (LOSS) INCOME $ (1,092 ) $ 1,118 OTHER COMPREHENSIVE LOSS Items that will subsequently be reclassified to profit or loss: Unrealized gain (loss) on foreign exchange 253 (1,485 ) derivatives designated as cash flow hedges Income tax effect (67 ) 393 Reclassification to net income of (gain) loss on foreign exchange derivatives (314 ) 99 designated as cash flow hedges Income tax effect 83 (26 ) Foreign currency translation adjustment 2 17 Other comprehensive loss for the period, net $ (43 ) $ (1,002 ) of income taxTOTAL COMPREHENSIVE (LOSS) INCOME $ (1,135 ) $ 116 (LOSS) EARNINGS PER SHARE Basic (loss) earnings per share $ (0.08 ) $ 0.08 Diluted (loss) earnings per share $ (0.08 ) $ 0.08 ^[2] Prior period comparatives had been reclassified to conform with currentyear presentation.

Points International Ltd. Condensed Consolidated Interim Statements of Changes in Shareholders? Equity Attributable to equity holders of the CompanyExpressed inthousands of Accumulated TotalUnited States Share Capital Contributed other Accumulated shareholders? dollars except Surplus comprehensive deficit equitynumber of shares income (loss)(Unaudited) Number of Amount Shares Balance atDecember 31, 13,227,407 $ 49,251 $ 1,795 $ 623 $ (16,450 ) $ 35,219 2020Net loss - - - - (1,092 ) (1,092 ) Other )comprehensive - - - (43 ) - (43 loss, net of taxTotalcomprehensive - - - (43 ) (1,092 ) (1,135 )lossEffect ofequity-settledshare-based - - 930 - - 930 compensationexpenseSettlement of - 243 (700 ) - - (457 )RSUsShares issued,net of issuance 1,687,510 23,275 - - - 23,275 costsBalance at March 14,914,917 $ 72,769 $ 2,025 $ 580 $ (17,542 ) $ 57,832 31, 2021 Balance atDecember 31, 13,241,516 $ 45,799 $ - $ 184 $ (6,791 ) $ 39,192 2019Net income - - - - 1,118 1,118 Othercomprehensive - - - (1,002 ) - (1,002 )loss, net of taxTotalcomprehensive - - - (1,002 ) 1,118 116 incomeEffect ofequity-settledshare-based - - 879 - - 879 compensationexpenseShare issuances? options 50,299 506 (439 ) - - 67 exercisedSettlement of - 2,759 (3,938 ) - - (1,179 )RSUsSharesrepurchased and (67,483 ) (238 ) (804 ) - - (1,042 )cancelledReclassificationwithin equity^ - - 4,302 - (4,302 ) - [3]Balance at March 13,224,332 $ 48,826 $ - $ (818 ) $ (9,975 ) $ 38,033 31, 2020 ^[3] The Corporation has adopted a policy that when contributed surplus is indebit balance, the amount is reclassified to accumulated deficit for financialstatement presentation purposes.

Points International Ltd. Condensed Consolidated Interim Statements of Cash Flows Expressed in thousands of United States dollars (Unaudited) For the three months ended March 31 2021 2020 Cash flows from operating activities Net (loss) income for the period $ (1,092 ) $ 1,118 Adjustments for: Depreciation of property and equipment 515 339 Depreciation of right-of-use assets 245 299 Amortization of intangible assets 657 611 Unrealized foreign exchange gain (51 ) (1,087 ) Equity-settled share-based compensation expense 930 879 Finance costs 126 88 Deferred income tax (recovery) expense (533 ) 170 Derivative contracts designated as cash flow hedges (61 ) (1,386 )Changes in cash held in trust (319 ) 1,380 Changes in non-cash balances related to operations 4,258 (5,282 )Interest paid (163 ) (43 )Net cash provided by (used in) by operating $ 4,512 $ (2,914 )activities Cash flows from investing activities Acquisition of property and equipment (252 ) (303 )Additions to intangible assets (204 ) (604 )Net cash used in investing activities $ (456 ) $ (907 ) Cash flows from financing activities Net proceeds from issuance of share capital 23,275 - Proceeds from long term debt - 40,000 Repayment of long term debt (15,000 ) - Payment of lease liabilities (334 ) (326 )Proceeds from exercise of share options - 67 Shares repurchased and cancelled - (1,042 )Taxes paid on net settlement of RSUs (457 ) (1,179 )Net cash provided by financing activities $ 7,484 $ 37,520 Effect of exchange rate fluctuations on cash held 72 853 Net increase in cash and cash equivalents $ 11,612 $ 34,552 Cash and cash equivalents at beginning of the $ 73,070 $ 69,965 periodCash and cash equivalents at end of the period $ 84,682 $ 104,517 Interest received $ 24 $ 213 Taxes received $ 355 $ - Taxes paid $ - $ (1,842 ) Amounts received for interest and paid in taxes were reflected as operatingcash flows in the condensed consolidated interim statements of cash flows.