iDine Rewards Network Reaffirms 2002 Targets and Outlines 2003 Goals

Business Wire,  Dec 16, 2002  

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MIAMI--(BUSINESS WIRE)--Dec. 16, 2002

iDine Sees 25-30% Revenue Growth in 2003, Targeting 2.9 Million

Active Members and 11,500 Dining Merchants

iDine Rewards Network Inc. (AMEX:IRN), the nation's leading provider of dining rewards programs, today reaffirmed its earnings targets for 2002 and new Chief Executive Officer and President George S. Wiedemann outlined goals for the future growth of the business.

Based on the strength of the business in the first nine months of 2002, and continued strong performance in the fourth quarter, iDine's management reaffirmed its earnings target for the fiscal year ending December 31, 2002 for earnings per share in the range of $.78 to $.83 cents fully diluted, compared with EPS of $0.13 per fully diluted share for the twelve months ended December 31, 2001.

Management also outlined for the first time its growth targets for 2003 and beyond. Based on the strong and growing merchant and member bases, iDine expects to continue a 25-30% revenue growth rate during 2003. The Company expects to have 2.9 million active members by the end of 2003 and more than 11,500 participating restaurant merchants in its rewards programs.

"We are completing our eighth quarter of profitability and strong growth and are continuing to make solid progress in expanding participation in our loyalty programs," said George S. Wiedemann. "Our mission is to be recognized as the leading multi-credit and payment card-based loyalty and rewards platform in North America and by 2005 it is our expectation that we can have more than 5 million active members and 20,000 merchants across multiple business categories. The progress we have made in 2002 has further strengthened the base from which to leverage our business model."

During the first nine months of 2002, total operating revenue for iDine Rewards Network totaled approximately $57.3 million, an increase of 38.3% compared with the year earlier period. Gross dining sales for the period amounted to a record $203.6 million on gross qualified member spend of $288 million, representing an increase of 39.4% over the corresponding prior year and the Company recorded net income of $14.6 million or $0.62 per fully diluted share. On a pro-forma basis, assuming a 38% statutory tax rate, EPS for the nine months would have been $0.33 per fully diluted share.

During 2002 the Company's earnings included the tax benefit of prior years' losses carried forward. In the second quarter of 2002 the Company recorded a reversal of a tax valuation reserve and has also recognized the remaining tax benefit in the form of a lower effective tax rate for fiscal 2002. By the first quarter of 2003, the Company's earnings will no longer be subject to a reduced tax rate associated with the use of the loss carry forwards. "To understand our results on a going forward basis it is important that investors use a normalized tax rate, which when applied to the first nine month figures gives us $0.33 full diluted EPS and adjusts the $0.78 to $0.82 range for the year to $0.45 to $0.50 fully diluted EPS," said Wiedemann.

Since becoming Chief Executive Officer and President of iDine Rewards Network on September 26, 2002, George Wiedemann and the executive team have also been working to refine the long-term business strategy for the Company.

"In moving from the Board of Directors to the Chief Executive Officer position, my mission is to continue to work with our talented team to expand and grow the rewarding experience for our members and merchants," said Wiedemann. "To attain our mission of becoming recognized as the leading multi-credit card and payment card based loyalty and rewards platform in North America, we will pursue a strategy of developing meaningful rewards programs. We are assembling a suite of products within the fine dining industry as well as other industry verticals that can be delivered to our member base through our seamless operating platform. We will compete on meaningful reward value, the ability to effectively market to and influence member spending behavior, the ease of use of our programs, and compelling merchant value propositions."

Strong Progress in 2002

Contributing to iDine's strong performance in 2002 is the continued progress the Company has made in attracting members to its programs, activating new members, and continuing to attract and provide more dining venues to its members. iDine began 2002 with 7.7 million enrolled accounts and will surpass more than 12.5 million by year's end. Active members are expected to reach 2.3 million by the end of 2002 up from 1.3 million at the beginning of the year and the merchant count will exceed 9,300 by year's end, up from 7,774 merchants at the beginning of the year.

During 2002, the Company expanded its marketing efforts to merchants as well to members in conjunction with its partnership programs, which include the major airlines. Additionally, planned increases in the nation-wide restaurant sales force have been accomplished to help iDine achieve its objectives of stronger relationship management and closer contact with both participating and prospective merchants in each of the major metropolitan markets it serves.