Exhibit 99.38
(POINTS INTERNATIONAL LTD LOGO)
POINTS INTERNATIONAL LTD. REPORTS FOURTH QUARTER AND YEAR-END RESULTS
INCREASE OF 33% IN REVENUE; FOURTH QUARTER REVENUE RISES 49% YEAR-OVER-YEAR
TORONTO, March 10th, 2005 - POINTS INTERNATIONAL LTD. (TSX: PTS; OTC: PTSEF)
("Points International" or the "Company"), the owner and operator of Points.com,
the world's leading reward program management portal, announced financial
results for the fourth quarter and the year ended December 31, 2004.
The Company reported revenue of $2.16 million in the 2004 fourth quarter, an
increase of 49% versus $1.45 million during the same period in 2003. Adjusted
for the impact of the weakened US dollar, Points International's Q4 revenue
growth would have included a further $323,200, resulting in 72% growth vs. 2003.
Strong growth at both Points.com and Points.com Business Solutions contributed
to the growth in revenue. The Company powered the online exchange, sale and
transfer of 1.45 billion points and miles in the fourth quarter of 2004, up from
0.54 billion during the fourth quarter of 2003.
The Company recorded an operating loss of $1.41 million for the fourth quarter
of 2004, versus $1.20 million in the fourth quarter in the previous year. The
increased loss was a result of higher employment and product development costs
in connection with the Company's anticipated launch of its enhanced consumer
Website. The Company reported a net loss of $2.75 million, or ($0.04) per share
versus a net loss of $2.61 million, or ($0.03) per share, in the 2003 fourth
quarter. Non-cash charges, including accrued interest, the amortization of
property, plant and equipment, intangible assets and deferred costs accounted
for $1.28 million of the fourth quarter 2004 net loss versus $1.40 in the fourth
quarter of 2003.
For the fiscal year ended December 31, 2004, Points International reported
revenue of $7.79 million, a 32.9% increase versus $5.86 million in the 2003
fiscal year. Adjusted for the impact of the weakened US dollar, the Company's
annual revenue growth would have included a further $900,000, resulting in 48%
growth vs. the comparable prior year. The Company powered the online exchange,
sale and transfer of 4.92 billion miles and points versus 2.0 billion in the
year-earlier period. The Company had an operating loss of $4.44 million compared
to $2.17 million in the 2003 fiscal year. Higher
employment costs and marketing and communications expenses in connection with
the upcoming launch of Points.com's new consumer Website contributed to the
increased loss. The Company reported a net loss of $8.81 million, or $(0.13) per
share, versus a net loss of $6.54 million, or $(0.11) per share for the 2003
fiscal year. Non-cash charges, including: accrued interest, the amortization of
property, plant and equipment, intangible assets and deferred costs accounted
for $4.24 million of the net loss in 2004 versus $4.36 in 2003.
"2004 was marked by significant accomplishments," said Rob MacLean, Points
International's CEO. "We added many new partners, including British Airways, US
Airways, Starbucks, Goldpoints, Frontier Airlines and Hawaiian Airlines. We will
continue to add great partners to our business in 2005 as demonstrated by our
recent introduction of Cendant Corporation's Trip Rewards program and other
recent announcements. We also took important steps to prepare for the launch of
our feature-rich reward management portal, which will provide consumers and
loyalty partners with numerous advantages. We are on schedule to commence launch
of the new Website next month."
The new Web site will include broader consumer offerings, and present each
consumer with a comprehensive personalized view of their entire reward program
universe. New management tools, such as Join, Earn and Buy, will help consumers
realize more value from their favorite reward programs, to help them "Get More
Rewards, Faster(TM)". These tools will also add additional revenue streams for
the Company. The system will be driven by an ATG Marketing Enterprise System
that will use the consumer's unique reward program, reward goals and point
balance mix to suggest ways to use the Join, Earn, Buy and Swap tools most
effectively.
In connection with the expanded offering, the Company will change the pricing
and structure of its current PointsPlus membership. The enhanced pricing model,
which will be unveiled during the second quarter in greater detail, will include
a recurring subscription model and higher price points, supported by pricing
research and market comparatives.
"We increased revenue from our Points.com business by 160% during 2004 with very
limited marketing to a vast consumer base," added Mr. MacLean. "We believe with
our marketing plan to drive cost-effective traffic and membership to the new
Points.com Website that we will be able to substantially increase our customer
base. We expect to begin
driving significant consumer traffic to the Website during the third quarter of
the year. With the new products and services we will offer, combined with
notable new partnerships, we are excited about the many opportunities we will
have to monetize both existing and prospective consumers."
Some of the highlights of 2004 include:
- - Growing revenue from both Points.com and Points Business Solutions
operations. Revenue from Points.com increased by 160%, in fiscal 2004,
while Points.com's Business Solutions grew by 30%.
- - Strong recurring revenues. 95% of Points.com's revenues were recurring
versus 80% in 2003.
- - Increase in number of partners on Points.com. Points.com increased its
partners to 45 at the end of 2004, versus 35 at 2003 year-end.
- - Increase in Points.com Business Solutions partners and products. 21
partners are now offering Points.com Business Solutions products to their
members, increased from 12 at the end of 2003. There are now 55 product
installations in the market, up from 30 at the end of 2003, providing a
strong and growing recurring revenue base for the company.
- - Growth in Transaction activity. Total miles and points transacted increased
140% from 2.0 billion in fiscal 2003 to 4.92 billion in fiscal 2004.
- - Increase in size and commissions per transaction. The average number of
miles or points exchanged per transaction was 17,920, an increase of 8%
versus 2003. The average commission generated by Points per transaction
also was up 9% from the year-earlier period.
- - Increase in Website traffic. Approximately 1.1 million unique visitors
accessed the Company's Points.com Website in 2004, compared to 781,000
visitors during fiscal 2003.
- - Strong User Registration. The Company's database of Registered Users
increased to approximately 606,000 at the end of 2004.
As the Company launches the new Website in April, it will also establish a more
comprehensive approach to reporting on key metrics associated with the business.
The current transactional metrics will be supplemented with information relevant
to the enhanced consumer offering.
The company expects that the first quarter 2005 results will be released on or
about May 13, 2005 and will include an investor conference call.
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 miles
and points between reward programs so that they can Get More Rewards,
Faster(TM). Points.com has attracted over 40 of the world's leading reward
programs including Delta SkyMiles(R), eBay Anything Points, American Airlines
AAdvantage(R) program, S&H greenpoints, Cendant Trip Rewards, Starbucks Asia
Miles(R), and Intercontinental Hotels Group's Priority Club(R) Rewards.
Website: http://www.points.com /
FOR FURTHER INFORMATION
Steve Yuzpe, Investor Relations, Chief Financial Officer, 416-596-6382,
steve.yuzpe@points.com,
or Business Development Inquiries, Christopher Barnard, President,
416-596-6381, christopher.barnard@points.com, both of Points International
Ltd.
or Ed Lewis of CEOcast, Inc., +1-212-732-4300, elewis@ceocast.com, for
Points International
POINTS INTERNATIONAL LTD.
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004 AND 2003
POINTS INTERNATIONAL LTD.
CONSOLIDATED BALANCE SHEETS
AS AT DECEMBER 31 2004 2003
- ----------------- ----------- -----------
ASSETS
CURRENT
Cash and cash equivalents $13,754,818 $20,274,836
Accounts receivable 2,024,342 1,004,370
Prepaids and sundry assets 1,229,091 825,221
----------- -----------
17,008,251 22,104,427
PROPERTY, PLANT AND EQUIPMENT 2,056,282 513,723
INTANGIBLE ASSETS 8,282,453 1,320,692
DEFERRED COSTS 2,242,868 2,790,816
LONG-TERM INVESTMENTS -- 161,629
FUTURE INCOME TAXES RECOVERABLE 590,000 590,000
----------- -----------
13,171,603 5,376,859
$30,179,854 $27,481,286
=========== ===========
POINTS INTERNATIONAL LTD.
CONSOLIDATED BALANCE SHEETS
AS AT DECEMBER 31 2004 2003
- ----------------- ------------ ------------
LIABILITIES
CURRENT
Accounts payable and accrued liabilities $ 1,894,599 $ 1,187,598
Deposits 13,153,623 10,455,646
Current portion of loan payable 29,860 --
Current portion of acquisition loan payable 777,443 --
Convertible debenture 8,920,373 --
------------ ------------
24,775,900 11,643,244
LOAN PAYABLE 67,186 --
ACQUISITION LOAN PAYABLE 380,118
CONVERTIBLE DEBENTURE -- 8,036,372
CONVERTIBLE PREFERRED SHARES 13,892,478 13,024,478
------------ ------------
39,115,681 32,704,094
------------ ------------
SHAREHOLDERS' EQUITY
CAPITAL STOCK 22,705,734 17,728,461
CONTRIBUTED SURPLUS 482,092 --
WARRANTS 2,610,992 2,785,737
DEFICIT (34,734,645) (25,737,007)
------------ ------------
(8,935,827) (5,222,809)
------------ ------------
30,179,854 27,481,286
============ ============
POINTS INTERNATIONAL LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31 2004 2003
- ------------------------------- ----------- -----------
REVENUES
Points operations $ 7,560,012 $ 5,502,744
Interest income 231,579 355,960
----------- -----------
7,791,591 5,858,704
GENERAL AND ADMINISTRATION EXPENSES 12,230,652 8,029,471
----------- -----------
LOSS- Before interest, amortization and other items (4,439,061) (2,170,767)
----------- -----------
Interest on convertible debenture 884,001 853,872
Interest on Series Two Preferred Share 868,000 624,478
Interest, loss on short-term investments and bank
charges 132,843 9,753
Write-off of ThinApse Corporation 161,629 --
Amortization of property, plant and equipment,
intangible assets and deferred costs 2,322,749 2,877,321
----------- -----------
4,369,223 4,365,424
----------- -----------
LOSS (8,808,284) (6,536,191)
----------- -----------
LOSS PER SHARE ($0.13) ($0.11)
=========== ===========
POINTS INTERNATIONAL LTD.
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31 2004 2003
- ------------------------------- ------------ ------------
DEFICIT - Beginning of year
As previously reported ($25,737,007) ($19,200,816)
Change in accounting policy (189,354) --
------------ ------------
As restated (25,926,361) (19,200,816)
LOSS - For the year (8,808,284) (6,536,191)
------------ ------------
DEFICIT - End of year ($34,734,645) ($25,737,007)
============ ============
POINTS INTERNATIONAL LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE PERIOD ENDED SEPTEMBER 30, 2004
12 Month Period
---------------------------
FOR THE YEARS ENDED DECEMBER 31 2004 2003
- ------------------------------- ------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss ($8,808,284) ($6,536,191)
Items not affecting cash
Amortization of property, plant and equipment 312,617 1,589,206
Amortization of deferred costs 601,319 531,914
Amortization of intangible assets 1,408,813 756,201
Employee stock option expense 362,343 --
Writedown of long term investment 161,629 --
Cancellation of warrants issued for services (1,179) --
Interest on Series Two Preferred Shares 868,000 624,478
Interest accrued on convertible debenture 884,001 853,872
------------ ------------
(4,210,741) (2,180,520)
Changes in non-cash balances related to operations 1,857,746 774,066
------------ ------------
CASH FLOWS USED IN OPERATING ACTIVITIES (2,352,995) (1,406,454)
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment, net of proceeds (1,855,177) (338,730)
Purchase of intangible assets (128,428) (130,353)
Payments for the acquisition of MilePoint, Inc. (2,300,000) --
Costs related to the acquisition of MilePoint, Inc. (728,534) --
------------ ------------
CASH FLOWS USED IN INVESTING ACTIVITIES (5,012,139) (469,083)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of Warrants -- 2,700,000
Issuance of Series Two Preferred Share -- 12,400,000
Loan payable, net of repayments 97,047 --
Deferred financing costs 13,967 (3,039,774)
Repayment of obligations under capital leases -- (407,128)
Issuance of capital stock, net of share issue costs 734,101 3,155,575
------------ ------------
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES 845,115 14,808,673
------------ ------------
INCREASE (DECREASE) IN CASH (6,520,019) 12,933,136
CASH AND CASH EQUIVALENTS - Beginning of period 20,274,836 7,341,700
------------ ------------
CASH AND CASH EQUIVALENTS - End of period $ 13,754,818 $ 20,274,836
============ ============
(POINTS INTERNATIONAL LTD LOG0)
POINTS INTERNATIONAL LTD. SIGNS AGREEMENT WITH THE MEMBERSHIP
REWARDS(R) PROGRAM FROM AMERICAN EXPRESS
TORONTO, March 10th, 2005 - POINTS INTERNATIONAL LTD. (TSX: PTS, OTCBB: PTSEF),
the owner and operator of Points.com, the world's leading reward program
management portal, announced today that it has entered an agreement with
American Express Travel Related Services Company Inc. The agreement enables the
Membership Rewards Program(R) from American Express to participate on the
Points.com portal. Additionally, the Membership Rewards Program(R) will use
Points.com technology services to offer real-time point transfers for select
partners. Public launch is expected during the second quarter of this year.
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 earn, buy,
and swap miles and points between reward programs so that they can Get More
Rewards, Faster(TM). Points.com has attracted over 40 of the world's leading
reward programs including American Express Membership Rewards(R), Delta
SkyMiles(R), eBay Anything Points, American Airlines AAdvantage(R) program, S&H
greenpoints, Cendant's Trip Rewards, Asia Miles(R), and Priority Club(R)
Rewards.
+ + +
SOURCE: Points International Ltd (TSX Exchange: PTS)
THE TSX EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE
ADEQUACY OR ACCURACY OF THIS RELEASE
FOR POINTS INTERNATIONAL:
INVESTOR RELATIONS
Steve Yuzpe
Chief Financial Officer, Points International Ltd.
Direct: +1 416 596-6382
Email: steve.yuzpe@points.com
Or
Ed Lewis
CEOcast, Inc. for Points International
Michael Wachs, 212-732-4300
elewis@ceocast.com
BUSINESS DEVELOPMENT INQUIRIES
Christopher Barnard, President, Points International Ltd.
Direct: +1 416 596-6381
Email: christopher.barnard@points.com