Futura Loyalty Group Announces Q2 2012 Financial Results

The Futura Loyalty Group Inc. (TSX VENTURE:FUT) ("Futura" or the "Company") has
released its financial results for the three and six-month periods ending June
30, 2012.


Financial Overview 

Total revenue from operations for the three-month periods ended June 30, 2012
and 2011 was $683,137 and $563,833 respectively. Excluding revenue from
breakage, revenues for the same periods were $502,227 and $506,594 respectively,
representing a quarter-over-quarter decrease of 0.9%. Total revenue from
operations, for the six-month periods ended June 30, 2012 and 2011 was
$1,189,788 and $967,151 respectively. Excluding breakage, revenues for the same
periods were $953,545 and $821,901 respectively, representing an increase of
16%.


Gross margins, excluding breakage revenue and breakage expense, for the
three-month periods ended June 30, 2012 and 2011 were $225,523 and $220,098
respectively, representing 44.9% of sales and 43.4% respectively. Gross margins,
excluding breakage revenue and breakage expense, for the six-month periods ended
June 30, 2012 and 2011 were $423,450 and $353,704 respectively, representing
44.4% and 43.0% of sales respectively.


Operating expenses for the three-month periods ended June 30, 2012 and 2011 were
$535,406 and $546,561 respectively. Operating expenses for the six-month periods
ended June 30, 2012 and 2011 were $1,542,819 and $983,001 respectively. The
primary increase in operating expenses related to restructuring costs of
$351,714 incurred during the first six months of 2012, offset by a decrease in
payroll expenses of 11%.


The loss before financial activities for the three-month period ended June 30,
2012 was $162,116, compared to $269,224 for the same period of 2011. Excluding
breakage revenue and expense, the loss before financial activities was $309,883
and $326,463 respectively for the three-month periods ended June 30, 2012 and
2011. Loss before financial activities for the six-month period ended June 30,
2012 was $931,801 compared to $484,047 for 2011. Excluding breakage, the loss
before financial activities was $1,119,369 and $629,297 respectively for the
six-month periods ended June 30, 2012 and 2011.


The net loss for the three-month period ended June 30, 2012 was $458,142 in
comparison to a net loss of $421,226 for the same period of 2011. The net loss
for the six-month period ended June 30, 2012 was $1,482,049 compared to a net
loss of $685,957 for the first six months of 2011. The primary reasons for the
variance in the year 2012 compared to 2011 relates to the items discussed above
and the financial activities expenses totaling $550,248 in 2012 compared to
$201,910 in 2011.


Operational Overview 

The Company launched numerous retailers in the automotive services segment in
the quarter. The Company ended in second quarter of 2012 with 710 live merchant
locations compared to 596 as at June 30, 2011 and 644 as at year end 2011. The
Company also announced that it had signed its first merchants in the U.S. to
market the company's branded rewards currency offerings.


The Company announced a strategic agreement with Protractor Software, a leading
POS software company in the auto service industry, to integrate the Futura
loyalty rewards marketing and technology platform to enable Protractor's
thousands of existing users to effortlessly activate Futura's loyalty offering
at their in-store point of sale stations providing customers with easy access to
some of the best known frequent flyer programs in North America. 


The Company also announced that it entered into a sales agreement with its first
business-to-business customer, DT Tire Distribution Ltd., a wholesale
distributor of tires to issue Miles to their customers through the Futura
loyalty rewards marketing and technology platform. As a result of this sales
agreement, DT Tire can provide additional marketing and sales loyalty incentives
to owners of auto service centres and auto dealers by issuing Miles. 


"We made great progress on a number of fronts this quarter with the signing of
new merchants, integrating with the Protractor POS system to make it quick and
simple for merchants to process loyalty transactions and signing our first B2B
deals which opens up a whole new revenue opportunity for the Company" said David
Campbell, President and CEO of Futura.




Financial Summary                                                           
                                                                            
----------------------------------------------------------------------------
                         3 months      3 months      6 months      6 months 
                      ending June   ending June   ending June   ending June 
                         30, 2012      30, 2011      30, 2012      30, 2011 
----------------------------------------------------------------------------
Revenue             $     683,137 $     563,833 $   1,189,788 $     967,151 
----------------------------------------------------------------------------
Gross Margin              373,290       277,337       611,018       498,954 
----------------------------------------------------------------------------
Expenses                  535,406       546,561     1,542,819       983,001 
----------------------------------------------------------------------------
Loss Before                                                                 
 Financial                                                                  
 Activities              (162,116)     (269,224)     (931,801)     (484,047)
----------------------------------------------------------------------------
Net Loss            $    (458,142)$    (421,226)$  (1,482,049)$    (685,957)
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
Numbers Excluding Breakage                                                  
----------------------------------------------------------------------------
Revenue             $     502,227 $     506,594 $     953,545 $     821,901 
----------------------------------------------------------------------------
Gross Margin              225,523       220,098       423,450       353,704 
----------------------------------------------------------------------------
Expenses                  535,406       546,561     1,542,819       983,001 
----------------------------------------------------------------------------
Loss Before                                                                 
 Financial                                                                  
 Activities              (309,883)     (326,463)   (1,119,369)     (629,297)
----------------------------------------------------------------------------



The Company has defined the term "Loss Before Financial Activities" in its
consolidated financial statements as this is an effective measure of the
operating business, independent of how the business is financed. The Company has
also chosen to break out its results herein by showing the numbers independent
of breakage revenue and expense, as breakage can randomly and significantly vary
from quarter to quarter, thereby making it difficult for readers of the
consolidated financial statements to get a clear picture of the business,
independent of breakage. Breakage revenue is recorded when a Futura Rewards
member has not experienced an eligible transaction for a period of 24
consecutive months.


To see the Company's full financial statements, please go to www.tflg.ca or
www.sedar.com.


About Futura Loyalty Group

The Futura Loyalty Group Inc. is an industry-leading provider of integrated and
stand-alone loyalty solutions for Canadian and American businesses. The company
offers a comprehensive suite of loyalty products and services including access
to two existing branded loyalty currencies in Canada and three in the United
States. Futura also develops custom loyalty marketing and administration
programs for companies wishing to develop proprietary loyalty solutions.
Futura's loyalty services include member account set up, management and reward
redemption platform, a web-based program transaction reporting interface for
merchants, a robust offer management system, retail POS Integration for card
swipe issuance, customer loyalty analytics and a proprietary web based reward
issuance solution. For more information regarding The Futura Loyalty Group,
visit www.futuraloyaltygroup.com or www.tflg.ca.


Forward-Looking Information

This news release includes certain forward-looking information that is based
upon current expectations, which involve risks and uncertainties associated with
our business and the environment in which the business operates. Any statements
contained herein that are not statements of historical facts may be deemed to be
forward-looking information, including those identified by the expressions
"anticipate", "believe", "plan", "estimate", "expect", "intend", "will", "may",
"should", "could", and similar expressions to the extent they relate to the
Company or its management. The forward looking information is not historical
facts, but reflects the Company's current expectations regarding future results
or events. Forward-looking information is subject to a number of risks,
uncertainties and assumptions that may cause the actual results of the Company
to differ materially from those discussed in the forward-looking information,
and even if such actual results are realized or substantially realized, there
can be no assurance that they will have the expected consequences to, or effects
on the Company. Factors that could cause actual results or events to differ
materially from current expectations include, among other things, changes in
general economic and market conditions; changes to regulations affecting the
Company's activities; level of merchant participation in the Company's programs;
uncertainties relating to the availability and costs of financing needed in the
future; and other factors, including without limitation, those listed under
"Economic Dependence" and "Risks and Uncertainties" in MD&A for the three and
twelve month periods ended December 31, 2011.