Points International (PCOM) 4Q 2015 Earnings Call Transcript

Points International (PCOM) CEO Rob McLean wants his company to be the go to firm for customer loyalty points

“We are committed to evolving point’s loyalty, commerce platform to facilitate growth and innovation for our loyalty partners. The point loyalty commerce platforms offers transaction level access to multiple loyalty currencies and powers innovative products and services that drive increased revenue and member engagement in loyalty programs. We will continue to leverage our platform to deliver a broad range of products and solutions that generate more revenue, broaden redemption opportunities and deepen member engagement as they transact with their valuable points and miles.”

Continuing to expand into Asia

“In the growing Asia loyalty market, we’ve announced new partnerships with Hainan Airlines, the largest privately owned air transport company and the People’s Republic of China and Shangri-La Hotels, China’s premier hotel brand, which is expected to launch in 2016.”

Points International (PCOM) CFO Michael D’Amico said they were able to demonstrate cost discipline despite growing their revenue and number of employees

“Moving to some of our key operating expenses for the quarter, we remain very disciplined in our management of the ongoing cost structure.  Total ongoing operating expenses which consist of employment expenses, marketing, technology and other operating expenses were approximately $7.8 million in the fourth quarter of 2015 compared to $7.7 million in the prior year period.”

The company claims to be an efficient allocator of capital

“In April, we were listed by Thomson Reuters as one of the 10 companies that most excel at putting capital at work based on our consistent ability to not only grow revenues but also generate increasing free operating cash and successfully reinvested with healthy returns.  Subsequently in December, we also listed as one of the best performers with respect to EPI or the economic performance index which is a measure of return on capital divided by cost of capital and is indicative of company’s capacity create wealth for the shareholders.”

Points International (PCOM) CEO Rob McLean reiterated that their business model is all about long term partnerships

“We have a very long term view with our partnerships. We had very good relationships really across the board, really on the couple of changes from the partner mix in one of the last ten years. And so, when we put out those announcements was recently about great relationships with Southwest and Air France KLM. I think you’ve heard in our prepared remarks that we’ve got 75% of our current revenues lock into long terms deals. It’s really just an indication of the times of relationships we have with our partners and really an opportunity for us kind of reinforce that with investors that we have a pretty sticky business and we’re going to be continuing to grow against that.”