Points reports 2003 first quarter results
Highlights include 43% quarterly revenue growth, 76% EBITDA improvement, growing cash
Toronto, May 26, 2003 – Points International Ltd. (TSXV: PTS), operator of the only independent points exchange – at www.points.com – reported financial results for the three-month period ended March 31, 2003.
Financial highlights:
· Revenue of $1.3 million for the first quarter of 2003, a 43% increase over revenue of $911,940 earned during the fourth quarter of 2002, and a 336% increase over revenue of $299,351 reported for first quarter of 2002. Points notes average quarter-over-quarter revenue growth of 45% over the past four quarters.
· A significant majority of revenues are based on recurring transactions. Revenue streams associated with existing partnerships continue to deliver organic growth, and management expects further progress with additional relationships.
· General & administrative expenses were $1.51 million for Q1 2003, down 15% from $1.77 million for Q4 2002, and similar to the $1.47 million reported for Q1 2002.
· Earnings before interest, taxes, depreciation and amortization (EBITDA) were negative $202,529 for Q1 2003, a 76% improvement over the Q4 2002 result of negative $860,493, and an 83% improvement over the Q1 2002 result of negative $1,168,047. Management expects continued improvement in EBITDA as revenues grow and costs are managed prudently.
· Cash at March 31, 2003 was $10.47 million, compared with $7.34 million at December 31, 2002. Management expects to continue to generate growing amounts of cash through Points' operations in 2003, and notes that the April 2003 investment of $15.1 million by USA Interactive (see below) also increases the Corporation’s cash.
· A 35% improvement in the net loss result for Q1 2003 ($1.02 million) from Q4 2002 ($1.58 million), and a 47% improvement from Q1 2002 ($1.93 million). Non-cash expenses accounted for $811,411 of the $1.02 million quarterly net loss (including $646,411 in amortization of assets and $165,000 in accrued interest on the debenture held by CIBC Capital Partners).
“The Points team is off to a great start in 2003,” said Points CEO Rob MacLean. “We’re reporting a healthy pace of revenue growth with expenses managed prudently. Our team is delivering key business developments at a strong pace, and we are pleased with growth prospects through 2003 and beyond.
“We look forward to ramping up pointsxchange® and enhancing relationships with existing and new partners,” MacLean noted. “The support of our new strategic investor, USA Interactive, is a tribute to our vision for this innovative business.”
Strategic investment of USA Interactive (Nasdaq: USAI):
During the first quarter of 2003, Points announced significant progress on a number of strategic initiatives, including an agreement with USA Interactive. This transaction closed on April 11, 2003 raising $15.1 million through a key strategic equity investment. USA Interactive now has a 19.9% equity stake in Points, and the right to acquire up to 55% of the equity at any time over the next three years.
The additional equity stake would result in a further investment in Points of up to approximately $74.9 million to $93.6 million, depending on the year of exercise.
eBay Inc. (Nasdaq: EBAY) joins pointsxchange, contracts additional portfolio of Points Solutions:
Points delivered strong business development results during the first quarter, including a keystone agreement with eBay Inc., announced February 21, 2003, which has resulted in eBay Anything Points becoming the latest pointsxchange participant. Now, members of select loyalty programs can exchange other points and miles for eBay Anything Points – and use them to buy anything on eBay. eBay Anything Points can also be exchanged at www.points.com for points and miles of a number of other leading pointsxchange participants.
The agreement with eBay also includes a number of additional Points Solutions, including pointscorporate and pointsintegrate. For further information, please refer to Points’ news release of May 20, 2003.
Points launches new web site design
Points’ simple and powerful new site design makes it even easier – and faster – for consumers to turn their points and miles into the rewards they want. The site has a new look and feel, and new exchange options such as eBay Anything Points, Priority Club® Rewards and JCPenney.
Other business developments during the quarter:
· an agreement with Deutsche Lufthansa AG, Points’ first relationship with a major European player. (Lufthansa’s Miles & More frequent flyer program is Europe’s largest, with over 7.2 million members);
· a number of new pointsxchange partners, including InterContinental Hotels, Spiegel, JCPenney, Eddie Bauer and American Eagle Outfitters. Management continues to focus on adding partners to enhance the exchange options available to consumers.
· the launch of an additional suite of solutions for a major international hospitality partner, InterContinental Hotels.
Key business development metrics:
pointsxchange has attracted over 35 participants, representing over 125 million member accounts.
Points has now launched 23 custom solutions, with an additional 5 solutions under contract. Management continues to pursue relationships with additional loyalty players and looks forward to adding more contracts in the near future.
Points has now powered the online exchange, transfer and sale of close to 1.5 billion points and miles. Management looks forward to growth resulting from an enhanced marketing program and exchange mix, particularly with the addition of eBay Anything Points. |
