Points (TSX:PTS) (Nasdaq:PCOM), the global leader in loyalty
currency management, announced today that it has updated its
business outlook as well as provided additional details regarding
the acquisition of assets of Crew Marketing International, Inc.
Partner activity
"Points' core business remains strong, we continue to execute
against our global pipeline, and our outlook remains optimistic,"
said Rob MacLean, Chief Executive Officer of Points. "Given recent
announcements, since the start of 2014, we have announced or
launched over 40 products and added 9 new partners to our Loyalty
Commerce Platform."
"Further, we remain in discussions with several potential new
partners, and a number of those discussions are presently in
advanced stages. While we cannot give assurances on the fruition of
these discussions, based on our experience and assessment, these
potential new partners could be material contributors to our
financial performance in 2015."
"Overall, we are very pleased with our Partner developments in
2014. Nevertheless, we do anticipate market consolidation in 2015
to change the mix of products and partners that drive our
economics. The previously announced consolidation of the US
Airways Dividend Miles and American Airlines' AAdvantage programs,
in particular, will likely lead to these programs representing a
smaller portion of our future business. While discussions are
ongoing, we anticipate restructuring elements of the relationship
through 2015. We do expect, however, that Points will
maintain a robust relationship with AAdvantage, and that we will
continue to leverage our Loyalty Commerce Platform to provide
future innovation for the program."
Acquisition of Crew Marketing
In addition, and in conjunction with today's announcement
earlier today regarding Points' agreement with United Airlines
MileagePlus, Points has provided further details on its acquisition
of substantially all of the assets of Crew Marketing, a long-time
United Airlines MileagePlus technology vendor.
Pursuant to the purchase agreement for the acquisition, Points
paid $14.75 million in cash and issued 238,393 common shares in
consideration for the purchased assets. The common shares,
which represent approximately 1.6% of Points' issued and
outstanding common shares, were issued into escrow and will be
released to Crew Marketing in 18 months' time, subject to typical
indemnities to the benefit of Points. The transaction closed on
December 22, 2014.
"The acquisition of Crew Marketing represents a positive
development in Points' growth strategy," said MacLean. "We look
forward to leveraging Crew's unique technologies and commercial
applications to power additional loyalty commerce solutions for the
MileagePlus program."
Updated 2014 Guidance and Outlook
"Points has had a strong year, and we continue to anticipate
solid growth for full year 2014. However, revenue and
transactional activity during the fourth quarter has been adversely
impacted by continued softness in Europe as well as reduced
promotional activity among certain partners as they align consumer
activity with the associated industry consolidation. As a
result, we currently expect 2014 revenues and Adjusted
EBITDA1 to be at the lower end of our guidance range for the
year," added MacLean.
With the partnerships and products added throughout 2014, and
the anticipated change in mix of certain partner contributions,
management currently expects that it will continue to see growth in
revenue, gross margin2 and Adjusted EBITDA in 2015. The Company
will provide final results for the fourth quarter and full year
2014, as well as provide formal guidance for the full year 2015, in
its fourth quarter 2014 earnings release in early March.
Mr. MacLean concluded, "With today's business update, we
continue to believe that our addressable market is $2.5 - $3.5
billion, providing significant opportunity for Points to grow well
into the future. Continuing to add new partners, enhancing
relationships with existing partners, and driving further
innovation and engagement throughout the broader loyalty industry
are expected to provide solid revenue upside and be core drivers of
our future growth."
About Points
Points, publicly traded as Points International Ltd. (TSX:PTS)
(Nasdaq:PCOM), is the global leader in loyalty currency management.
Via a state-of-the-art loyalty commerce platform, Points provides
loyalty eCommerce and technology solutions to the world's top
brands to enhance their consumer offerings and streamline their
back-end operations.
Points' solutions enhance the management and monetization of
loyalty currencies ranging from frequent flyer miles and hotel
points to retailer and credit card rewards, for more than 50
partners worldwide. Points also manages Points.com, where almost 4
million consumers use the only industry sanctioned loyalty wallet
to not only track all of their loyalty programs but also trade,
exchange and redeem their miles and points. In addition to these
services, Points' unique SaaS products allow merchants and
businesses to reward their customers with points and miles from the
world's largest loyalty brands.
In 2014, Points acquired PointsHound, a hotel booking engine and
loyalty currency aggregator built specifically for frequent
travelers. PointsHound enables loyalty program members to earn
loyalty points for staying in their favorite hotels and also to
earn bonus rewards in the form of airline miles. Members of the
free-to-use site have access to over 150,000 hotels worldwide,
including boutique and non-chain properties.
Points has been widely recognized among the loyalty and
technology communities alike. The Company was named the 4th largest
Canadian software company and the 36th largest Canadian technology
company by the 2014 Branham300 list. For more information on
Points, please visit www.Points.com, follow us on Twitter
(@PointsBiz) or read the Points company blog. For more information
on PointsHound, please visit www.PointsHound.com
1 Adjusted EBITDA (Earnings before interest, taxes, depreciation
and amortization, and foreign exchange) 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 Points believes to be
the most directly comparable IFRS measure.
2 Gross margin is defined as total revenues less the direct cost
of principal revenues. Gross margin is considered by
management to be an integral measure of financial performance and
represents the amount of revenues retained by Points after
incurring direct costs. However, gross margin is not a
recognized measure of profitability under IFRS.
Caution Regarding Forward-Looking
Statements
This 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, among other
things, our guidance for 2014 with respect to revenue growth and
Adjusted EBITDA expectations and our expectations for growth in
revenue, gross margin and Adjusted EBITDA in 2015. 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, the financial outlooks
herein assume Points will be able to maintain its existing
contractual relationships and products, that such products continue
to perform in a manner consistent with Points' past experience,
that Points will be able to generate new business from our pipeline
at expected margins, our in-market and newly launched products and
services will perform in a manner consistent with the Company's
past experience and we will be able to contain costs. Our ability
to convert our pipeline of prospective partners and product
launches is subject to significant risk and there can be no
assurance that we will launch new partners or new products with
existing partners as expected or planned nor can there be any
assurance that Points will be successful in maintaining its
existing contractual relationships or maintaining existing products
with existing partners. Other important risk factors
that could cause actual results to differ materially include the
risk factors 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.
CONTACT: Addo Communications
Laura Bainbridge, Kimberly Esterkin
laurab@addocommunications.com
kimberlye@addocommunications.com
(310) 829-5400
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