Points International Ltd., owner of the loyalty reward management program platform, www.Points.com, recently released results for the second quarter ended June 30, 2012 showing significant financial improvement over the same period a year earlier.
The company’s performance reflects growth of the loyalty marketing industry as a whole.
“Through the recession we've seen existing loyalty programs grow in both participation and earnings as well as the launch of many new programs,” said Erin Raese, COO and editor-in-chief, Loyalty Management at Loyalty 360. “The travel companies, the pioneers of loyalty, still rely heavily on their loyalty programs to differentiate in a cluttered marketplace. In the last few years we've seen significant growth in related programs, in the last year, both Sears and CVS surged past 65MM program members. This commitment by organizations and consumers to loyalty equates to enormous opportunity for organizations like Points.com who are bringing more value to these already consumer-lucrative programs.”
“We are pleased with our second quarter, which saw improved performance across all key financial metrics. Revenues, gross margin dollars, EBITDA, and net income are all up sequentially and year over year,” said Points CEO Rob MacLean upon release of the earnings. “Points delivered record revenues and gross margins, and at the same time, saw increased profitability as demonstrated by our improvement in EBITDA and EPS, which increased 53 percent and 200 percent year-over-year, respectively. Contributing to our financial performance is the addition of new partners and products to our platform over the past twelve months as well as the continued growth of our deployed products.”
MacLean added: “Looking to the back half of the year, we anticipate continued acceleration in our financial performance led by strong organic growth in our core loyalty currency services business. In addition to driving strong organic growth, we are working diligently to execute against our robust pipeline of new business. Both the value and visibility of our new business pipeline has increased in the past 90 days with several relationships in advanced stages of development. As a result, we expect meaningful new business launches in the back-half of the year. We look forward to being able to share our successes over the coming quarters and remain confident that we will continue to deliver solid progress for our shareholders.”
Net income for the second quarter of 2012 was $1.3 million, or $0.09 per share. This compares to net income of $0.5 million, or $0.03 per share in the second quarter 2011, and net income of $0.6 million, or $0.04 per share, in the first quarter 2012.
Total revenue was $36.3 million for the second quarter of 2012. Revenue was up 11 percent year-over-year from $32.7 million in the second quarter of 2011 and up 30 percent sequentially from $28 million in the first quarter of 2012. Gross margin for the second quarter 2012 totaled $7.1 million, or 19.6 percent of total revenue. This represents a 15 percent increase from $6.2 million, or 19 percent of total revenue, in the second quarter 2011 and an 11 percent increase from $6.4 million, or 22.8 percent of total revenue, in the first quarter 2012. The sequential change in gross margin percentage is a reflection of the rotation of sales from seasonal products and higher agency activity to a more typical mix with principal revenue comprising 94 percent of total revenue.
EBITDA for the second quarter 2012 was $2.1 million, up 53% year-over-year from $1.4 million in the second quarter 2011 and up 88% from $1.1 million in the first quarter 2012. This year-over-year and sequential increase is attributed to strong gross margins combined with minimal increases in operating costs.
As of June 30, 2012, total funds available, comprised of cash and cash equivalents together with security deposits, restricted cash and amounts with payment processors, was $44.0 million, down from $45.6 million at March 31, 2012. The company remains debt free and is pleased with its overall financial position.