- 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 /PRNewswire-FirstCall/ - 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% |
| # 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% |
| # 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% |
| # 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.