Points International ( Nasdaq - PCOM ) -- Loyalty Program Leader Expands its Pipeline

Points International (PCOM $9.25) reported excellent on target Q4 results.  Sales were at the low end of the range at $32.9 million (+22%).  Earnings were a little above our target at $.10 a share (+100%).  The company added six new partners during the year, bringing the total to 25.  Existing partners added more loyalty programs, as well.  Margins improved in Q4 because several programs achieved key thresholds, triggering bonus payments.  Points International's new Internet offering elicited growing interest but didn't generate material sales.  That effort holds substantial potential but probably will take a few years to produce big numbers.  A large number of prospective customers are in the pipeline.  Results in 2012 will depend on when those deals take effect.  For now we are maintaining our estimates at sales of $160 million (+30%) and earnings of $.50 a share (+85%).  Growth could sustained at above average rates well into the decade.

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