Points International Ltd. reports 2002 year end result
08:00 EDT Monday, April 14, 2003
For Immediate Release: April 14, 2003
Source: Points International Ltd. (TSX Venture Exchange: PTS)
Points International Ltd. reports 2002 year end results;
Highlights include 135% annual revenue growth, increasing cash
Toronto, April 14, 2003 - Points International Ltd (TSXV: PTS), operator of the leading loyalty currency exchange located at www.points.com, today announced 2002 year-end results.
Highlights include:
* 135% increase in revenue for 2002 over 2001, achieved while limiting growth in general and administrative expense to 12.5%,
* growth in cash to $7.34 million at December 31, 2002, and
* the launch of a suite of Points Solutions to complement our unique pointsxchange(tm), the only loyalty program currency exchange.
In addition, Points made significant progress on a number of strategic and business development initiatives during 2002, culminating in recent news, including an:
* agreement with key strategic investor USA Interactive, raising $15.1 million on April 11, 2003;
* agreement to develop a number of custom technology solutions for eBay Inc.;
* April launch of our first relationship with a major European player, Deutsche Lufthansa AG, and
* April launch of a suite of Points Solutions for a major international hospitality partner, Six Continents Hotels.
"The Points team made great progress during 2002. We expect to deliver continued growth during 2003 as we strengthen pointsxchange and look forward to developing relationships with existing and new partners," said CEO Rob MacLean. "We also look forward to pursuing an accelerated pace of business development with the support of our new strategic investor, USA Interactive."
Financial highlights:
* Revenue of $2.37 million for 2002, a 135% increase over 2001 revenue of $1 million.
* A significant majority of revenues continue to be based on recurring transactions. Revenue streams associated with existing business relationships continue to deliver organic revenue growth, and management expects further progress with additional relationships.
* Points reported cash at year-end 2002 of $7.34 million, compared with $4.42 million at September 30, 2002, and $2.89 million at December 31, 2001.
* General and administration expenses were $6.94 million for 2002, up 12.5% from $6.17 million for 2001.
* Earnings before interest, taxes, depreciation and amortization (EBITDA) were negative $4.57 million for the year, an 11% improvement over the 2001 result of negative $5.16 million. Management expects to improve EBITDA further as revenues continue to grow and costs are managed prudently.
* Points reported a 30% improvement in its net loss performance for 2002, and notes that non-cash expenses accounted for $3.07 million of the 2002 net loss, including $2.41 million in amortization of assets and deferred financing costs and $660,000 in accrued interest on the 11% $6 million senior debenture issued by Points and held by CIBC Capital Partners.
Further highlights include:
* The development of an expanded suite of Points Solutions enhancing our original pointsxchange solution. Points Solutions now include pointspurchase, pointsgift, pointstransfer, pointscorporate, pointsintegrate, pointsdonate and other custom solutions. Points looks forward to further opportunities to offer cost savings and revenue enhancement to its many current and potential partners across the international loyalty industry.
* The 2002 launch of pointscorporate solutions for US Airways and America West and the April 2003 launch of this solution for Alaska Airlines.
* Expansion of pointsxchange in recent months and weeks to include partners Cathay Pacific, Six Continents Hotels, Spiegel and the JCPenney Gift Card. Management continues to be focused on adding partners to enhance the exchange options available to consumers.
* Points' expansion into international markets gained key momentum with the launch of a pointspurchase solution for Lufthansa. Lufthansa's Miles & More program is the largest frequent flyer program in Europe, with over 7.2 million members.
Key business development metrics:
* pointsxchange has attracted over 30 participants, representing over 120 million loyalty program accounts.
* Points has launched 22 custom solutions, with an additional six under contract. Management continues to pursue relationships with additional loyalty players and looks forward to adding more contracts for Points Solutions in the near future.
* Points has now powered the online sale, transfer and exchange of well over a billion points and miles. Points noted average quarter-over-quarter growth rates during 2002 of more than 50% for both the number of points and miles transacted through custom solutions and through pointsxchange.
* The number of pointsplus accounts grew at an average quarter-over-quarter rate of 156% during 2002, and the company looks forward to further membership growth resulting from an enhanced marketing program and a growing exchange mix.
"We're looking forward to accelerating our vision for Points," concluded MacLean. "We're expanding and diversifying our partner base, and enhancing our pointsxchange foundation. With a number of key developments in recent weeks, including agreements with some of the leading industry players, we expect 2003 to be an exciting year for Points."
More about Points International Ltd and Points Solutions
Points offers innovative solutions to enhance the loyalty experience. Through a portfolio of Points Solutions, Points is forging rewarding partnerships with the world's leading loyalty players to deliver compelling value propositions.
The cornerstone of Points' unique loyalty program asset management system is pointsxchange(tm) - the world's first loyalty program currency exchange that allows consumers to exchange points from one participating loyalty program to another and thereby achieve awards faster than ever before.
A growing portfolio of custom solutions also includes the innovative pointspurchase(tm) solution, which powers the online sale of miles and points to members of leading loyalty programs including those of American Airlines, Six Continents Hotels, Lufthansa, Air Canada, America West Airlines, Alaska Airlines, Cathay Pacific Airways and US Airways.
Points Solutions, built on leading edge technology developed and managed in-house, are internationally marketed to travel providers and loyalty programs through a distribution alliance with Sabre, the leading provider of technology, distribution and marketing services for the travel industry.
Points is currently developing a number of custom technology solutions for eBay Inc.
Based in Toronto, Points' shares trade on the TSX Venture Exchange under the stock symbol PTS.
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For more information, please contact:
Moira Wright
Points International Ltd.
416-596-3257
moira.wright@points.com
THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE
ATTACHMENT:
POINTS INTERNATIONAL LTD
EXCERPTS FROM CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002
POINTS INTERNATIONAL LTD.
(formerly "Exclamation International Incorporated")
CONSOLIDATED BALANCE SHEETS
AS AT DECEMBER 31 2002 2001
A S S E T S
CURRENT
Cash and short term investments $7,341,700 $2,894,380
Accounts receivable 267,632 103,180
Prepaids and sundry assets 657,367 570,899
8,266,699 3,568,459
LONG-TERM INVESTMENTS 151,629 171,129
CAPITAL ASSETS 1,764,199 3,231,535
INTANGIBLE ASSETS 1,956,539 120,312
FUTURE INCOME TAXES RECOVERABLE 590,000 590,000
DEFERRED FINANCE CHARGES 410,954 739,717
$13,140,020 $8,421,152
POINTS INTERNATIONAL LTD.
(formerly "Exclamation International Incorporated")
CONSOLIDATED BALANCE SHEETS
AS AT DECEMBER 31 2002 2001
L I A B I L I T I E S
CURRENT
Accounts payable and accrued liabilities $1,017,956 $486,605
Deposits 8,946,631 2,096,865
Current portion of obligation
under capital leases 407,128 736,749
10,371,715 3,320,219
OBLIGATION UNDER CAPITAL LEASES - 305,174
CONVERTIBLE DEBENTURE 7,182,500 6,522,500
NON-CONTROLLING INTEREST - 134,524
17,554,215 10,282,417
S H A R E H O L D E R S' E Q U I T Y
CAPITAL STOCK 14,361,033 9,532,173
WARRANTS 425,588 -
DEFICIT (19,200,816) (11,393,438)
(4,414,195) (1,861,265)
$13,140,020 $8,421,152
POINTS INTERNATIONAL LTD.
(formerly "Exclamation International Incorporated")
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
FOR THE YEARS ENDED DECEMBER 31 2002 2001
REVENUES
Points operations $2,308,846 $686,194
Interest 59,446 207,744
Appreciation on dilution of investment - 89,035
Consulting and other - 22,998
2,368,292 1,005,971
GENERAL AND ADMINISTRATION 6,941,069 6,168,483
LOSS - Before interest, amortization and
other deductions (4,572,777) 5,162,512)
Interest on convertible debenture 60,000 22,500
Interest and bank charges 50,071 58,785
Amortization of capital assets, intangible assets
and deferred financing costs 2,408,800 1,836,814
3,118,871 2,518,099
LOSS - Before non-controlling interest and
discontinued operation (7,691,648) (7,680,611)
NON-CONTROLLING INTEREST - 314,978
LOSS - From continuing operations (7,691,648) (7,365,633)
DISCONTINUED OPERATIONS
Loss from discontinued operations (115,730) (2,163,602)
Loss on disposal of discontinued operations - (1,012,043)
Share of loss of disposed significantly
influenced investments (Note 4) - (658,214)
NET LOSS (7,807,378) (11,199,492)
DEFICIT - Beginning of year (11,393,438) (193,946)
DEFICIT - End of year $(19,200,816) $(11,393,438)
LOSS PER SHARE - From continuing operations $(0.15) $(0.24)
NET LOSS PER SHARE $(0.15) $(0.36)
POINTS INTERNATIONAL LTD.
(formerly "Exclamation International Incorporated")
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31 2002 2001
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss from continuing operations $(7,691,648) $(7,365,632)
Items not affecting cash
Amortization of capital assets 1,512,887 1,540,242
Amortization of deferred financing costs 328,763 246,572
Amortization of intangible assets 567,150 50,000
Non-controlling interest - (314,978)
Appreciation on dilution of investment - (89,035)
Shares issued in exchange for services 366,379 200,000
Warrants issued in exchange for services 2,775 -
Interest accrued on convertible debenture 660,000 522,500
(4,253,694) (5,210,331)
Changes in non-cash balances related
to operations 7,130,198 2,288,111
CASH FLOWS PROVIDED BY (USED IN)
OPERATING ACTIVITIES 2,876,504 (2,922,220)
CASH FLOWS FROM INVESTING ACTIVITIES
Repayment of loans receivable from
significantly influenced companies 19,500 26,666
Purchase of capital assets (45,551) (1,325,489)
Purchase of intangible assets (144,774) (70,312)
Fees paid on acquisition (139,750) -
CASH FLOWS USED IN INVESTING ACTIVITIES (310,575) (1,369,135)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of convertible debenture - 6,000,000
Deferred financing costs - (986,289)
Repayment of obligations under capital leases (634,795) (1,700,390)
Issuance of capital stock, net of
share issue costs 2,631,916 965,950
Issuance of capital stock of Points.com Inc. - 345,413
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES 1,997,121 4,624,684
INCREASE IN CASH FROM CONTINUING ACTIVITIES 4,563,050 333,329
CASH FLOWS USED IN DISCONTINUED OPERATIONS (115,730) (1,945,634)
INCREASE (DECREASE) IN CASH FROM ALL ACTIVITIES 4,447,320 (1,612,305)
CASH AND SHORT TERM INVESTMENTS -
Beginning of year 2,894,380 4,506,685
CASH AND SHORT TERM INVESTMENTS -
End of year 7,341,700 2,894,380 |
