TORONTO, May 13, 2020 (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, 2020.Unless otherwise noted, all comparisons are on a year-over-year basis and all amounts are in USD. The complete first quarter Condensed Consolidated Interim Financial Statements and Management’s Discussion & Analysis, including segmented results, are available at www.sedar.com and www.sec.gov.First Quarter 2020 Financial Summary (vs. Q1 2019)• Total revenue was $82.7 million compared to $95.9 million.• Gross profit increased to $13.8 million compared to $13.4 million.• Net income was $1.1 million or $0.08 per diluted share, compared to $1.8 million or $0.12 per diluted share.• Adjusted EBITDA¹ was $3.6 million compared to $4.6 million.Recent Operational Highlights• Loyalty Currency RetailingLaunched new suite of services with Air Canada’s Aeroplan program
• Points TravelLaunched a white label hotel booking site for Quidco, the UK’s largest cash back consumer site• Platform PartnersLaunched new exchange partnership with Aimia/HSBC’s My Rewards, which are now transferable into both Emirates and Etihad frequent flyer milesInitiated real time exchange availability between Citi Thankyou Points and Emirates Skywards milesManagement Commentary“As we navigate the COVID-19 pandemic, our top priority continues to be the health and safety of our employees and ongoing support for our partners,” said Rob MacLean, CEO of Points International. “All of our teams have been working from home since early March, and the transition to remote work has had minimal impact on our operations. Our team’s response to this unprecedented time has been exceptional and we continue our track record of quality deployments and operations while we maintain our operations at full capacity.“The pandemic continues to take a heavy toll on the travel industry, with grounded planes and hotel closures affecting our loyalty partners’ revenue streams. We are encouraged by the various travel stimulus and loan packages that have been introduced by governments around the world to assist the travel industry. Many of our key partners in the U.S. and internationally have already received funds from these programs, and we are closely monitoring any further developments in that process.“We believe loyalty programs will be a key part of our customers’ return to normal. While current health restrictions have changed consumer behavior and mobility patterns across the globe, those changes still present solid opportunities for our business. We’re continuing to see activity from what we call “future-use buyers” – people who purchase large amounts of points and miles for future travel needs, especially when they’re part of strong and creative offers. Historically these types of offers have represented approximately 65% of our LCR transactions and are highly targeted at consumers who see the long-term value in their loyalty programs.“During this restricted travel period, while we have obviously seen a very steep drop in transactions aimed at immediate travel, we have nevertheless seen some impressive results with creative offer constructs in recent weeks, as consumers continue to engage with their favorite loyalty programs and purchase miles that they will use in the future. In fact, a strong offer marketed with a large partner in the past few weeks drove the busiest day of traffic in our history. We followed that up last week with another important partner, deploying another strong campaign that delivered another record day of traffic and gross sales activity.  “With these volumes in mind, we have taken aggressive expense mitigation steps to maximize our liquidity in the wake of this new environment. In addition to cutting non-essential spend, suspending new hiring and pursuing available government assistance, we have limited all capital expenditures, deferred tax payments in certain jurisdictions, suspended share buyback activity under our current Normal Course Issuer Bid (“NCIB”) program and paused further funding of our Restricted Share Unit (“RSU”) program. Furthermore, we drew down $40 million on our credit facility in March as a precautionary move, which provided total funds available of just over $107 million at March 31. We are planning against multiple recovery scenarios, and given our strong cash position today, we believe we have sufficient liquidity to weather this global pandemic.“COVID-19 is far from the first crisis we have faced in our 20-year history. In fact, some of the most defining components of our operating model came from adaptations we made during difficult times, including how we approached and collaborated with our partners during periods of industry stress. The actions we take today to support our partners can have lasting effects far beyond the current pandemic, and in the spirit of good partnership, we are fully committed to doing all that we can to help our partners during this unprecedented time.”First Quarter 2020 Financial ResultsTotal revenue in the first quarter of 2020 was $82.7 million compared to $95.9 million in the prior year quarter. Principal revenue was $75.9 million compared to $90.0 million, and other partner revenue increased to $6.8 million compared to $5.9 million.Gross profit in the first quarter increased to $13.8 million compared to $13.4 million in the prior year quarter. The increase was primarily driven by growth in the Loyalty Currency Retailing and Points Travel segments.Adjusted operating expenses² in the first quarter of 2020 were $10.4 million compared to $9.0 million in the prior year quarter. The increase was primarily a result of higher other operating expenses and increased personnel related expenses due to additional resources hired over the last 12 months. The Company did not account for the benefit of any government wage subsidies in the quarter ended March 31, 2020.Net income was $1.1 million or $0.08 per diluted share, compared to $1.8 million or $0.12 per diluted share in the prior year quarter.Adjusted EBITDA¹ in the first quarter was $3.6 million compared to $4.6 million in the prior year quarter. Effective margin³, which is defined as adjusted EBITDA as a percentage of gross profit, was 26.1% compared to 34.7% from the prior year period. Both declines were due to lower volumes in March related to COVID-19.At March 31, 2020, total funds available, comprised of cash and cash equivalents, funds receivable from payment processors, and cash held in trust were $107.2 million compared to $86.8 million at December 31, 2019. As a precautionary measure, the Company drew down $40 million on its credit facility which is reflected in the March 31, 2020 cash balance.2022 Long-Term GoalsGiven the uncertainty surrounding the pandemic, we are suspending our previously disclosed longer-term goals of exiting 2022 with gross profit in the high-$90 million range and adjusted EBITDA in the mid-$40 million range. While they remain our clear goals, the delayed timing of achieving them is dependent not only upon the continued execution of our growth strategies but also on the broader global recovery from the COVID-19 pandemic.____________________________________¹ Adjusted 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 Company’s 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.² Adjusted operating expenses consist of employment expenses excluding equity-settled share-based compensation, marketing and communications, technology services and other operating expenses.  Adjusted operating expense is not a measure of financial performance under IFRS and should not be considered a substitute for total operating expenses, which we believe to be the most directly comparable IFRS measure. See Non-GAAP Financial Measures.³ Effective margin measures our ability to generate profitability after we have funded operating expenses and is used by Management as a key internal measure of operating efficiency. Effective margin is not a measure of financial performance under IFRS. See Non-GAAP Financial Measures.Conference CallPoints will hold a conference call today at 4:30 p.m. Eastern time to discuss its first quarter 2020 results, followed by a question-and-answer session.Date: Wednesday, May 13, 2020
Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)
Toll-free dial-in number: 1-877-407-0784
International dial-in number: 1-201-689-8560
Conference ID: 13702898Please 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.A replay of the conference call will be available after 7:30 p.m. Eastern time on the same day through May 27, 2020.Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 13702898About Points International Ltd.Points, (TSX: PTS) (NASDAQ: PCOM), provides loyalty e-commerce and technology solutions to the world’s top brands to power innovative services that drive increased loyalty program revenue and member engagement. Currently, the Company has a growing network of nearly 60 global loyalty programs integrated into its unique Loyalty Commerce Platform. Points offers three core private or co-branded services: its Loyalty Currency Retailing service sells loyalty points and miles directly to consumers; its Platform Partners service, which offers earn and redemption opportunities via third-party or loyalty channels; and its Points Travel service helps loyalty programs increase revenue from hotel and car rental bookings while offering members more opportunities to earn and redeem loyalty rewards more broadly. Points is headquartered in Toronto, with offices in San Francisco, London, Singapore, and Dubai.For more information, visit company.points.com. Caution Regarding Forward-Looking StatementsThis 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, our expected monthly expenses for the remainder of 2020, our expected cash burn rate for the remainder of 2020, our ability to be cash flow positive, statements relating to plans we have implemented in response to the COVID-19 pandemic and its expected impact on us (including with respect to efforts to mitigate degradation in transaction volumes, our liquidity and capitalization and our cost mitigation efforts, our business pipeline and ability to sign and launch new loyalty program partnerships, our ability to sell additional products and services to existing loyalty program partners, and our growth strategies. 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 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, 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 MeasuresThe Company’s 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 Company’s underlying performance. These measures are reviewed regularly by management and the Company’s Board of Directors in assessing the Company’s 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 Company’s 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.Investor Relations ContactSean Mansouri, CFA or Cody Slach
Gateway Investor Relations
1-949-574-3860
[email protected] 







 

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