Points International Ltd. Reports First Quarter 2017 Financial Results
Points (TSX:PTS) (Nasdaq:PCOM), the global leader in powering loyalty commerce, today announced results for the first quarter ended March 31, 2017.
"2017 is off to a good start in executing our diversification strategy as we look to the future. Our core business shows no signs of abatement, with strong organic growth coupled with both expansion of current and additions of new partnerships. Built off this foundation, our two growth initiatives are indicating strong financial and strategic momentum that points to accretive Adjusted EBITDA in 2018 and beyond," stated Rob MacLean, CEO. "Importantly, for each of our three business segments: Loyalty Currency Retailing, where our Buy, Gift & Transfer services represent the bulk of the activity, Points Travel and Platform Partners, we saw first quarter gross profit increase year-over-year. As we leverage our unique position in the market, we remain optimistic in both the continued success of our core business and that our newer businesses are on track to become meaningful financial and strategic contributors to our long-term growth."
First Quarter 2017 Financial Results(Unless otherwise stated, 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 Discussion & Analysis, including segmented results, are available at www.sedar.com and www.sec.gov.)
- Revenue increased to $82.9 million from $73.6 million. Principal Revenues totaled $79.5 million and other Partner Revenue was $3.4 million.
- Gross Profit grew 9% to $11.1 million, compared to $10.2 million.
- Total Adjusted Operating Expenses3 were $8.2 million, compared to $7.2 million.
- Net Income totaled $0.9 million, or $0.06 per diluted share, consistent with Net Income of $0.9 million, or $0.06 per diluted share.
- Adjusted EBITDA was $2.9 million, consistent with $3.0 million.
1 Gross profit is defined as total revenues less the direct cost of revenues. Gross profit is considered by Management to be an integral measure of financial performance and represents the amount of revenues retained by the Corporation after incurring direct costs. However, gross profit is not a recognized measure of profitability under IFRS.
2 Adjusted EBITDA (Earnings before income tax expense, depreciation and amortization, foreign exchange, share-based compensation and impairment of long-term investments) is considered by Management to be a useful supplemental measure when assessing financial performance. Management believes that Adjusted EBITDA is an important indicator of the Corporation'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.
3 Adjusted Operating Expenses consists of employment expenses excluding stock based compensation, marketing and communications, technology services, and other operating expenses. Adjusted Operating Expenses is not a measure of financial performance under IFRS and should not be considered a substitute for total expenses, which we believe to be the most directly comparable IFRS measure.
Recent Business Highlights
- Expanded partnership with Hilton, the world's fastest growing hospitality company, to launch Points Pooling, enabling Hilton Honors members the ability to combine, or pool points with up to 10 friends or family members, for free.
- Launched a new Currency Retailing collaboration with WestJet to offer Points' Buy service to the WestJet Rewards program. WestJet Rewards members will now be able to buy WestJet dollars, increasing the value, revenue and engagement opportunities for WestJet Rewards.
- Launched All Nippon Airways (ANA) Global Hotels and Car Rentals travel booking service, leveraging the full suite of Points Travel functionality to give members the ability to book using their Mileage Club miles or earn miles on hotel and car rental bookings. In collaboration with Collinson Latitude, Points will also launch ANA Global Mileage Mall and ANA Global Selection for additional opportunities to earn or redeem awards.
- Launched Currency Retailing functionality for Etihad Airways, one of the largest Middle Eastern carriers, enabling members to purchase Etihad Guest Miles.
- Launched a partnership with Copa Airlines to enable ConnectMiles program members to buy, gift or transfer their reward miles.
- Recognized by Canada's Top 100 Employers as one of Canada's Top Small and Medium Employers, and by Great Places to Work Canada as one of Canada's top 50 Best Medium Workplaces and Best Workplaces for Women. This marks the second consecutive year that Points has received these honours.
The Company is reiterating financial guidance for the year ending December 31, 2017, as follows:
- Gross profit is expected to increase up to 10% from 2016
- Adjusted EBITDA is expected to increase up to 10% from 2016
- First Quarter Gross Profit1 of $11.1 Million Increased 9% year-over-year
- First Quarter Net Income of $0.9 Million and Adjusted EBITDA2 of $2.9 Million, Consistent with Prior Year
Points, publicly traded as Points International Ltd. (TSX:PTS)(Nasdaq:PCOM), provides loyalty eCommerce and technology solutions to the world's top brands to power innovative services that drive increased loyalty program revenue and member engagement. With a growing network of over 50 global loyalty programs integrated into its unique Loyalty Commerce Platform, Points offers three core private or co-branded services: its Buy Gift and Transfer service retails loyalty points and miles directly to consumers; its Points Loyalty Wallet service offers any developer transactional access to dozens of loyalty programs and their hundreds of millions of members via a package of APIs; and its Points Travel service helps loyalty programs increase program revenue from hotel bookings, and provides more opportunities for members to earn and redeem loyalty rewards more quickly. Points is headquartered in Toronto with offices in San Francisco and London.