Points International Reports Third Quarter 2021 Results
- Revenue Increased 132% Year-Over-Year -
- Gross Profit Increased 117% Year-Over-Year, Represents Fourth Sequential Quarter of Growth -
- Continued Execution on Pipeline Further Expands Footprint by Geographies and Verticals -
TORONTO, Nov. 10, 2021 (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 third quarter ended September 30, 2021.
Unless otherwise noted, all amounts are in USD. The complete third quarter Condensed Consolidated Interim Financial Statements and Management's Discussion & Analysis are available at www.sedar.com and www.sec.gov.
"We continued to generate year-over-year revenue and profitability improvements during the third quarter, aided by sustained recovery tailwinds across the travel and hospitality industries," said Rob MacLean, CEO of Points. "Transaction levels generated from our marketing efforts, as well as our 'baseline' activity more associated with near-term travel, continued to show significant improvement over last year. Importantly, we drove our fourth sequential quarter of gross profit growth. Though delta variant concerns briefly impacted our performance late in the quarter, these impacts have since subsided and appear to have been more of a temporary headwind. While we continue to monitor recovery trends closely, we believe we are well-positioned to continue executing on our growth drivers and our robust pipeline opportunities.
"During the third quarter, we meaningfully expanded several North American and international partnerships, demonstrating continued execution on our core growth drivers. On a product level, we continued to gain traction with our new subscription and Accelerate Anything services, both of which grant program members greater non-travel optionality for how they earn their miles. Based on our successful business development activity over the last 18 months, we are emerging from the pandemic with a larger product and partner base in market, and I am extremely proud of our ability to both support our existing partners and progress on business development around the globe."
MacLean concluded: "As we emerge from last year's pandemic-related impacts, we believe we are seeing a marked change in the posture and objectives of our loyalty program partners, who recognize the strength of their business and are looking to drive significant growth in the future. Looking further ahead and evaluating our position within the loyalty industry, the new and more aggressive posture from our loyalty program partners gives us confidence in the long term growth potential of our business. While the pandemic has temporarily delayed the execution of our financial objectives in the near term, we believe the growth targets we provided before the pandemic remain achievable, and we continue to evaluate the timing of these targets as the travel recovery continues to take shape. We will work to continue executing on our strategic growth drivers and building upon the strong operational foundation we have maintained across our organization."
Third Quarter 2021 Financial Highlights
For the three months ended
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September 30,
(in millions USD) 2021 June 30, 2021 September 30, 2020
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Total Revenue $86.9 $103.0 $37.4
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Gross Profit $12.4 $12.3 $5.7
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Total Operating
Expenses $13.5 $11.6 $9.0
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Net Income/(Loss) $(1.2) $0.5 ($2.5)
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Adjusted EBITDA(1) $2.0 $3.4 $(1.1)
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-- Total revenue in the third quarter of 2021 increased 132% compared to the
prior year quarter, reflecting sustained performance improvements and
continued recovery from COVID-19-related impacts that were more
significant in the prior year quarter. On a sequential basis, total
revenue decreased compared to the second quarter of 2021, primarily due
to the relative mix of partner and product sales during the third quarter
relative to the second quarter.
-- Gross profit in the third quarter of 2021 increased 117% compared to the
prior year quarter. The year-over-year increase was largely driven by the
aforementioned performance improvements and continued recovery from
COVID-19 related impacts. Gross profit increased 1% relative to the
second quarter of 2021.
-- Operating expenses in the third quarter of 2021 increased both
sequentially and year-over-year. During the second quarter of 2021, the
Company ceased participation in the Canada Emergency Wage Subsidy program,
which previously helped offset operating expenses in both the prior year
quarter and the second quarter of 2021. The sequential and year-over-year
increase was also driven by the continued easing of certain spending
restrictions implemented at the outset of the pandemic, including the
impact of resources added throughout 2021 that are focused on growth.
-- Total funds available, which is defined as the sum of cash and cash
equivalents, cash held in trust and funds receivable from payment
processors, at the end of the third quarter increased to $93.1 million
compared to $79.1 million at the end of 2020. The increase primarily
reflects the proceeds from the bought deal financing the Company
completed in the first quarter of 2021, as well as the aforementioned
strong sales activity, partially offset by the repayment of $15.0 million
on our senior secured credit facility in the first quarter of 2021.
Recent Operational Highlights
New Partnerships
-- Announced a new multi-service and multi-year partnership with Eva Air's
Infinity MileageLands program, representing the Company's most
comprehensive partnership with an APAC carrier to date. The initial
services are expected to be launched in the fourth quarter of 2021.
Expanded Partnerships
-- In November, we expanded the reach of the Buy service with the Marriott
Bonvoy program. Points now powers Marriott's buy activity in the
redemption flow, moving the existing top up channel onto Points' loyalty
commerce platform.
-- Since July, launched three additional deployments of the new Accelerate
Anything service with Etihad Airways, Air Canada, and Copa Airlines.
There are now six loyalty program partners taking advantage of this new
capability.
-- Further expanded the number of exchange opportunities across the platform
during the third quarter and just after the quarter end:
-- Added Air Canada's Aeroplan program as an exchange option with
both the Chase Ultimate Rewards program and the Choice Privileges
program;
-- Added Air France-KLM's Flying Blue program, the World of Hyatt,
and IHG Rewards as exchange options with Bilt Rewards, a new
partnership launched during the second quarter of 2021; and
-- Enabled the Choice Privileges program as an exchange option for
Citi Thankyou Rewards program members
Corporate Amalgamation
In order to optimize the Company's corporate tax structure and minimize future income tax, the Company will be completing an amalgamation with its wholly-owned subsidiary, Points.com Inc., which will be effective January 1, 2022. As part of this amalgamation process, the name of the public company legal entity will change from Points International Ltd. to Points.com Inc.
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(1) Adjusted EBITDA (Earnings before income tax expense, depreciation and amortization, foreign exchange, finance costs, share-based compensation expense and impairment charges) 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 section of Management's Discussion and Analysis.
Conference Call
Points will hold a conference call today at 4:30 p.m. Eastern time to discuss its third quarter 2021 results, followed by a question-and-answer session.
Date: Wednesday, November 10, 2021
Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)
Toll-free dial-in number: 1-800-772-0358
International dial-in number: 1-212-231-2900
Conference ID: 21998769
Please 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.
The conference call will be broadcast live and available for replay here and via the Events section of Points International's IR site here.
A replay of the conference call will be available after 7:30 p.m. Eastern time on the same day through November 24, 2021.
Toll-free dial-in number: 1-844-512-2921