Points Intl (PCOM) Reports Preliminary Q2 Results

Points International Ltd. (TSX: PTS) (Nasdaq: PCOM) (Points or the Company), the global leader in powering loyalty commerce, is providing a preliminary update on its second quarter 2020 results.

Q2 2020 Financial Highlights

• Gross profit is expected to range between $6.5 million and $7.1 million.
• Adjusted EBITDA1 is expected to range between $(0.2) million and $0.3 million.
• At June 30, 2020, total funds available2 stood at approximately $107 million, including a $35 million drawdown on the Company’s revolving credit facility.

Q2 2020 Operational Highlights

• Loyalty Currency Retailing (LCR): Launched a new partnership with Qatar Airways’ Privilege Club in June—deploying Buy, Gift and Transfer services into market with additional LCR services expected later this year.
• Platform Partners: Expanded exchange opportunities across the platform, including the addition of Virgin Australia’s Velocity program to the Choice Privileges exchange program, and connecting Citi Bank’s ThankYou points with the Emirates Skywards program.

Management Commentary

“Given the ongoing global impact from COVID-19, we felt it was important to provide an early look into our improving business metrics for the second quarter,” said Rob MacLean, CEO of Points. “Although we have paused hiring and material capital expenditures since mid-March, we have maintained our team and everyone continues to work remotely, seamlessly and at full capacity. This has proven to be an important asset, as many of our loyalty program partners have become increasingly engaged in marketing and merchandising our revenue generating services over the last couple of months. Since the lockdown started, we have been fully occupied with new deployments for a number of existing partners like Air Canada, while also launching new partners around the world such as Quidco in the UK and Qatar in the Middle East.

“Our performance in the second quarter was much stronger than we originally anticipated at the beginning of the pandemic, as trends have steadily improved since the low points in late March and early April. In June, we generated gross profit that was almost 70% of our 2019 monthly average, up from just under 50% in May and 20% in April. Cash grew through the May/June period and, at this point, we are optimistic these positive trends will continue through the second half of 2020. Given our improved performance and strong balance sheet, we elected to repay $5 million on our revolving credit facility in June, bringing our balance down to $35 million as of June 30, 2020.

“Although we are still operating in uncertain times, we are pleased to see trends moving in the right direction, as we experienced sequential improvement across most financial metrics throughout the second quarter. Importantly, we remain very active in building our new business pipeline. Furthermore, deployments during the second quarter tell us that our partners and prospects will continue to seek out revenue opportunities through loyalty marketing and targeted campaigns as they actively manage the balance between navigating near-term headwinds and positioning themselves to accelerate growth as the environment improves.

“Looking ahead, we are well-capitalized to see through this unprecedented time, and we will continue to operate our business with diligent cost management. I want to thank our employees, shareholders and partners for their continued dedication and support throughout this difficult period.”

Points will report its full second quarter 2020 results and provide additional updates on August 12, 2020.

1 Adjusted EBITDA (Earnings before income tax expense, depreciation and amortization, foreign exchange and share-based compensation) 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 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.

2 Total funds available is defined as cash and cash equivalents, cash held in trust, and funds receivable from payment processors.

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