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Rewards Network Inc Reports Positive Earnings, Looking to Grow Credits Program (NASDAQ:DINE)

|Includes:Rewards Network Inc. (DINE)
Chicago Based Rewards Network Inc. Symbol : DINE reported their first quarter results this morning at 10AM. To explain a thumbnail of the company’s business model, DINE operates a rewards program offering marketing services to member restaurants which offers incentives to customers including airline miles, college savings rewards and points programs. The company’s second service offering is a Marketing Credits program which provides restaurants with access to capital through its purchase of a portion of future member transactions. 
Earnings per share were reported at $.17 up $.18 from a year ago to date. In the company’s press release the positive performance was said to have been a result of a 60.7% revenue growth from the Marketing Services Program and a reduction in provision for losses as a result of the strong performance of the dining credits portfolio. 
 
  1. Total revenue for the first quarter was $26.4 million a 2.3% increase
  2. Gross profit for the first quarter was $18.6 million a 14.3% increase
  3. Restaurants in the rewards network in the first quarter were 10,288, an increase of 3.6% increase. 
  4. The mix of the two programs is 5,551 in the marketing Services, and 4,737 in the Credits Program
  5. As of March 31st the company had 14.6 million cash on hand and is debt free.
CEO Mr. Ronald Blake stated on the call, that the hospitality market is still very cautious in its spending in the recent year. The industry as a whole is growing, but still very slowly. Some new features that were highlighted in the upcoming year were the implementation of the My Dine Online Program which shows sales force results and allows the company to respond quickly with the industry. Rewards Network has also re -implemented their double rewards program on Monday Tuesday and Wednesday which is already showing some positive results.
 
Mr. Blake stated that the company reached profitability two years ago and is hoping to continue increasing revenue in the upcoming year. The company intends to grow its dining credits portfolio this year but was unable to give a concrete level of cash that it will reinvest in the program. 
 
 
 
Stocks: DINE