Points International Reports First Quarter 2011 Financial Results

- Revenue of $28.5 million increased 21% year-over-year -

-     Gross Margin of $5.1 million increased 21% over prior year period -

- EBITDA of $313,000 increased 37% year-over-year -

- Reiterated full year 2011 guidance -

- Strong new partner launches and global business opportunities; Robust 2011 partner pipeline -

TORONTO, May 3 /CNW/ - Points International Ltd. (TSX: PTS) (NASDAQ: PCOM), owner of the loyalty reward management program platform www.Points.com, today announced results for the first quarter ended March 31, 2011. All financial results are in U.S. Dollars and both 2011 actual and 2010 comparatives have been presented in accordance with International Financial Reporting Standards ("IFRS").

"The first quarter marked a solid start to 2011 as evidenced by our strong revenue growth, expanded partner network and enhanced capital structure," said CEO Rob MacLean.  "Revenues increased on both a year-over-year and sequential basis reaching $28.5 million in the first quarter.  Revenue growth was fueled by the strength of our existing partnerships, as well as the addition of several new transactional partners to our private label and Points.com branded platforms."

Mr. MacLean continued, "Since the beginning of the year, we added 4 new transactional partners and deployed 12 new products and services across Points' loyalty program management platform.  Increasingly evident in our partner platform is our success in expanding into new geographic territories and market verticals. During the quarter, we were pleased to welcome two new international partners to Points' partner network including Saudi Arabian Airlines, building upon our presence in the Middle East, and LANPASS, extending our presence in South America.  In addition, during the quarter we built upon our US retail presence through an extended relationship with Best Buy and a newly formed partnership with PayPal."

Mr. MacLean continued, "Complementing our strong financial and operational performance, our share consolidation and subsequent NASDAQ listing was completed in the first quarter of 2011.  Achieving a NASDAQ listing was a key strategic priority for Points and consistent with our objective to improve the visibility of our financial and operational achievements within the financial community."

First Quarter 2011 Financial Results

Total revenue was $28.5 million for the first quarter of 2011. Revenue was up 21.2% over the $23.5 million reported in the first quarter of 2010, and up 5.4% over the $27.0 million reported in the fourth quarter of 2010. Principal revenue totaled $26.7 million, an increase of 22.3% over the $21.8 million in the same period last year, and up 6.2% over the $25.1 million in the fourth quarter of 2010. Other partner revenue was $1.8 million, up from $1.7 million reported in the same period of last year and down from $1.9 million in the fourth quarter of 2010.

Gross margin for the first quarter of 2011 was $5.1 million, or 17.9% of revenue, compared to gross margin of $4.2 million, or 17.9% of revenue in the first quarter of 2010.  Gross margin for the fourth quarter of 2010 was $5.9 million, or 22.0% of revenue.

Points reported a net loss for the first quarter of 2011 of $189,000, or ($0.01) per share.  This compares to net income in the first quarter of 2010 of $443,000, or $0.03 per share, and to net income in the fourth quarter of 2010 of $341,000, or $0.02 per share, which included non-cash, non-recurring charges of $675,000 related to the impairment of long-lived assets.

During the first quarter of 2011, Points reported positive EBITDA of $313,000 compared to positive EBITDA of $229,000 in the same period of 2010 and $1.6 million in the fourth quarter of 2010.

As of March 31, 2011, total funds available, comprised of cash and cash equivalents together with security deposits, restricted cash and amounts with payment processors, was $41.3 million, up from $37.0 million at the end of the fourth quarter of 2010. The Company remains debt-free and is pleased with its overall financial position and its proven ability to generate positive free cash flow on an ongoing basis.

First Quarter 2011 Business Metrics

  Q1/11 Q4/10 Q1/11 vs.
Q4/10
Q1/10 Q1/11 vs.
Q1/10
TOTAL ALL CHANNELS          
   Points/Miles Transacted (in 000s) 3,066,878 3,175,884 -3% 2,770,973 11%
   No. of Points/Miles Transactions 342,012 318,067 8% 285,191 20%
LOYALTY CURRENCY SERVICES          
   Points/Miles Transacted (in 000s) 2,764,000 2,808,153 -2% 2,485,539 11%
   No. of Points/Miles Transactions 321,326 295,120 9% 266,992 20%
POINTS.COM CHANNELS          
   Points/Miles Transacted (in 000s) 302,878 367,731 -18% 285,434 6%
   No. of Points/Miles Transactions 20,686 22,947 -10% 18,199 14%
   Cumulative Registered Users 2,655,605 2,573,719 3% 2,467,663 8%

Business Outlook

The Company is reiterating its financial guidance for the year ended December 31, 2011, as follows:

  • The Company continues to expect revenue to be in the range of $120 million to $130 million, representing a 25% to 36% increase over 2010 revenue
  • The Company continues to expect EBITDA to be in the range of $5 million to $8 million
  • The Company continues to expect net income to be in the range of $3 million to $6 million, or $0.20 to $0.40 per share

Investor Conference Call

Points' quarterly conference call with investors will be held today at 5:00 pm. Eastern Time. To participate in the conference call, investors from the U.S. and Canada should dial (888) 846-5003 ten minutes prior to the scheduled start time. International callers should dial (480) 629-9856. In addition, the call will be broadcast live over the Internet hosted at the Investor Relations section of the Company's website at www.pointsinternational.com and will be archived online upon completion of the conference call. A telephonic replay of the conference call will also be available until 11:59 p.m. Eastern Time on Tuesday, May 10, 2011 by dialing (877) 870-5176 in the U.S. and Canada and (858) 384-5517 internationally and entering the passcode: 4435851.

About Points International Ltd

Points International Ltd. is the owner and operator of Points.com, the world's leading reward program management platform. The site was named one of the 30 Best Travel Sites in 2008 and 28 Best Travel Sites in 2009 by Kiplinger's. At Points.com consumers can Earn, Buy, Gift, Share, Trade, Exchange and Redeem miles and points from more than 25 of the world's leading reward programs. Participating programs include American Airlines AAdvantage® program, Aeroplan®, AsiaMilesTM, US Airways Dividend Miles® and InterContinental Hotels Group's Priority Club® Rewards.   Redemption partners include Amazon.com®, PayPal and Starbucks.  For more information, visit www.pointsinternational.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 our guidance for 2011 with respect to revenue, net income and EBITDA. These statements are not historical facts but instead represent only Points' expectations, estimates and projections regarding future events.

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 may not prove to be correct. In particular, the financial outlooks herein assume we will be able to generate new business from our pipeline at expected margins, our in-market and newly launched products and services will perform in a manner consistent with the Company's past experience, and we will be able to contain costs and realize operational efficiencies from our upgraded technology platform. Other important risk factors that could cause actual results to differ materially include the risk factors discussed in Points' annual information form, Form-40-F, annual and interim management's discussion and analysis, 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.

Transition to IFRS

The preparation of these condensed consolidated interim financial statements resulted in changes to the accounting policies as compared with the most recent annual financial statements prepared under Canadian GAAP. The accounting policies set out below have been applied consistently to all periods presented in these condensed consolidated interim financial statements for the three months ended March 31, 2011 and the comparative information presented in these interim financial statements for both the three months ended March 31, 2010 and the year ended December 31, 2010.

Points International Ltd.
Condensed Consolidated Interim Balance Sheets

Expressed in thousands of United States dollars
(Unaudited)
  March 31,
2011
December 31,
2010
January 1,
2010
                    
ASSETS              
Current assets              
  Cash and cash equivalents   $   30,810 $   28,463 $   26,414
  Restricted cash     1,791   1,776   802
  Funds receivable from payment processors     6,205   4,624   5,855
  Security deposits     2,452   2,123      2,463
  Accounts receivable     2,538   2,054   1,907
  Prepaid expenses and other assets     1,680   1,179   898
Total current assets     45,476   40,219   38,339
Non-current assets              
  Property and equipment     1,668   1,611   607
  Intangible assets     5,018   4,844   2,014
  Goodwill     2,580   2,580   2,580
  Deferred tax assets     845   984   945
  Other assets     607   613   1,033
Total non-current assets     10,718   10,632   7,179
Total assets   $   56,194 $   50,851 $   45,518
               
LIABILITIES              
Current liabilities              
  Accounts payable and accrued liabilities   $ 3,675 $ 3,679  $  2,820
  Provisions     67   102   267
  Current portion of other liabilities     612   629   609
  Payable to loyalty program partners     36,796   31,337   30,215
Total current liabilities     41,150   35,747   33,911
               
Non-current liabilities              
  Other liabilities     828   951   301
Total non-current liabilities     828   951   301
               
Total liabilities     41,978   36,698   34,212
               
SHAREHOLDERS' EQUITY              
  Share capital     56,748   56,683   56,662
  Contributed surplus     9,407     9,255   8,677
  Accumulated other comprehensive income     332     297   -
  Accumulated deficit     (52,271)   (52,082)   (54,033)
Total shareholders' equity     14,216   14,153   11,306
Total liabilities and shareholders' equity   $   56,194 $   50,851 $   45,518

Points International Ltd.
Condensed Consolidated Interim Statements of Comprehensive (Loss) Income

Expressed in thousands of United States dollars, except per share amounts
(Unaudited)
  March 31, 2011 March 31, 2010
           
REVENUE          
  Principal   $ 26,697 $ 21,837
  Other partner revenue     1,771   1,664
  Interest     5   1
Total Revenue     28,473   23,502
           
EXPENSES          
  Direct cost of principal revenue     23,385   19,287
  Employment costs     3,244   2,681
  Marketing & communications     279   262
  Technology services     146   211
  Depreciation and amortization     445   135
  Foreign exchange gain     (68)   (22)
  Operating expenses     1,106   832
Total Expenses     28,537   23,386
           
OPERATING (LOSS) INCOME     (64)   116
  Interest and other charges     -   15
(LOSS) EARNINGS BEFORE INCOME TAX     (64)   101
  Deferred income tax expense (recovery)     125   (342)
NET (LOSS) INCOME     (189)   443
           
OTHER COMPREHENSIVE (LOSS) INCOME          
  Gain on foreign exchange derivatives designated as cash flow hedges, net of income tax expense of $60 (2010 - $102)     153   228
  Reclassification to net income of gain on foreign exchange derivatives designated as cash flow hedges, net of income tax expense of $46 (2010 - $8)     (118)   (18)
Other comprehensive income for the period, net of income tax     35   210
TOTAL COMPREHENSIVE (LOSS) INCOME   $ (154) $ 653
           
(LOSS) EARNINGS PER SHARE          
           
Basic (loss) earnings per share   $ (0.01) $ 0.03
           
Diluted (loss) earnings per share   $ (0.01) $ 0.03

Points International Ltd.
Condensed Consolidated Interim Statements of Changes in Shareholders' Equity 

Attributable to equity holders of the Company
Expressed in thousands of United States dollars
(Unaudited)
Share
Capital
Contributed
Surplus
Total
Capital
Unrealized
gains on
cash flow
hedges
Accumulated
other
comprehensive income
Accumulated
deficit
Total
shareholders'
equity
Balance at December 31, 2010 $  56,683 $ 9,255 $ 65,938 $ 297 $ 297 $ (52,082) $ 14,153
                             
Net loss   -   -   -   -   -   (189)   (189)
                             
Other comprehensive income   -   -   -   35   35   -   35
Total comprehensive income   -   -   -   35   35   (189)   (154)
Effect of stock option compensation plan   -   169   169   -   -   -   169
                             
Share issuances   65   (17)   48   -   -   -   48
                             
Balance at March 31, 2011 $ 56,748 $ 9,407 $ 66,155 $ 332 $ 332 $ (52,271) $ 14,216
                             
                             
Balance at January 1, 2010 $  56,662 $ 8,677 $ 65,339 $ - $ - $ (54,033) $ 11,306
                             
Net income   -   -   -   -   -   443   443
                             
Other comprehensive income   -   -   -   210   210   -   210
Total comprehensive income   -   -   -   210   210   443   653
Effect of stock option compensation plan   -   162   162   -   -   -   162
                             
Share issuances   -   -   -   -   -   -   -
                             
Balance at March 31, 2010 $ 56,662 $ 8,839 $ 65,501 $ 210 $ 210 $ (53,590) $ 12,121

Points International Ltd.
Condensed Consolidated Interim Statements of Cash Flows

Expressed in thousands of United States dollars
(Unaudited)
  March 31, 2011 March 31, 2010
Cash flows from operating activities          
Net (loss) income for the period   $ (189) $ 443
Adjustments for:          
  Depreciation of property and equipment     103   65
  Amortization of intangible assets     342   70
  Unrealized foreign exchange (gain) loss     (346)   253
  Equity-settled share-based payment transactions     169   162
  Deferred income tax expense (recovery)     125   (342)
  Unrealized gain on derivative contracts designated as cash flow hedges     48   -
  Changes in non-cash balances related to operations     2,393   3,028
Net cash provided by operating activities     2,645   3,679
           
Cash flows from investing activities          
  Acquisition of property and equipment     (160)   (45)
  Additions to intangible assets     (516)   (517)
  Changes in restricted cash     -   (1,421)
Net cash used in investing activities     (676)   (1,983)
Cash flows from financing activities          
  Proceeds from exercise of share options     48   -
Net cash provided by financing activities     48   -
           
Net increase in cash and cash equivalents     2,017   1,696
  Cash and cash equivalents at beginning of the period     28,463   26,414
  Effect of exchange rate fluctuations on cash held     330   (253)
Cash and cash equivalents at end of the period   $ 30,810 $ 27,857
  Interest Received     5   1
  Interest Paid     -   -

Points International Ltd.
Schedule of Non-GAAP Reconciliations

Gross Margin Information

    For the three months ended
Expressed in thousands of United States dollars
(Unaudited)
  March 31,
2011
December 31,
2010
March 31,
2010
Total revenue   $ 28,473 $ 27,004 $ 23,502
Direct cost of principal revenue     23,385   21,063   19,287
Gross Margin   $ 5,085 $  5,941 $ 4,215
Gross Margin %     18%   22%   18%

Reconciliation of Operating (Loss) Income to EBITDA

    For the three months ended
Expressed in thousands of United States dollars
(Unaudited)
  March 31,
2011
December 31,
2010
March 31,
2010
Operating (loss) income   $ (64) $ 1,185 $ 116
Depreciation and amortization     445   450   135
Foreign exchange (gain) loss     (68)   7   (22)
EBITDA   $ 313 $ 1,642 $ 229


 

 

 

 

 

SOURCE Points International Ltd.

For further information:

Addo Communications
Andrew Greenebaum / Laura Foster
andrewg@addocommunications.comlauraf@addocommunications.com
(310) 829-5400

Profil de l'entreprise

Points International Ltd.

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