Catuity Provides Guidance for 2003; Announces Deployment of First Electronic Coupon Program.

Business Editors

DETROIT--(BUSINESS WIRE)--Nov. 25, 2003

Catuity, Inc. (NASDAQ: CTTY; ASX: CAT), a leading loyalty software provider to card issuers, merchants and processors, announced today that it expects 2003 revenue of approximately (U.S.) $4.75-$5 million with expenses of approximately $5.8 million, thereby resulting in a loss of approximately $1 million before fourth quarter non-cash, variable stock compensation expense or credit. This compares to 2002 revenue of $2,972,000, expenses of $5,741,000 and a net loss of $2,769,000 or $0.34 per share. 2002 expenses included $53,000 of non-cash, variable stock compensation credits. Estimated revenue for 2003 includes approximately $1.7 million of license revenue that was included in deferred revenue on the Company's balance sheet as of December 31, 2002.

Jack Lowry, Chief Financial Officer, noted, "Because our technology is new, it continues to be difficult for Catuity to predict the extent and timing of future revenue. In particular, license revenue is derived largely from channel partners and their retail customers who control the timing and extent of implementation and potential success of any loyalty programs. Accordingly, we are unable to provide medium and long term revenue forecasts."

Catuity also reported its third quarter and nine-month results for 2003. For the quarter ending September 30, 2003, Catuity reported revenue of $1.1 million and a net loss of $375,936, compared to revenue of $567,000 and a net loss of $750,705 for the comparable quarter one year ago.

For the nine months ending September 30, 2003, Catuity reported revenue of $4.3 million and a net loss of $70,640 compared to the same period last year when Catuity reported nine-month revenue of $2.4 million and a net loss of $2 million.

Michael V. Howe, President and CEO of Catuity, noted that during the third quarter, 2003, a major customer of the company commenced an electronic coupon program using Catuity-developed software. "As a result, Catuity software has been installed in more than 1000 stores, enabling millions of cardholders to use this program."

According to Howe, this rollout is believed to be the first major electronic coupon initiative in North America. "As electronic coupons become more prevalent in the marketplace, retailers can expect to experience a reduction in the cost of distributing coupons, discount offers and loyalty programs. Additionally, retailers can provide highly targeted rewards to specific customers. Accurate and timely reporting on the effectiveness of customer loyalty programs will provide significant improvements on return on investment while providing greater accountability for loyalty programs. All of these benefits should combine to provide more profitable revenue."

Catuity, Inc. is a leading provider of loyalty program management software to merchants, card issuers and processors. Clients of Catuity use the software to establish and administer a new breed of customer loyalty programs that immediately reward profitable behavior at the point of sale. The patented software can be used to attract and retain customers and to encourage more valuable purchases. The Catuity system supports many forms of customer ID including mag-stripe, smart cards and RFID tokens. Catuity's smart card loyalty applet has been loaded on millions of chip-based credit cards. Catuity's software is in use in more than 4200 U.S. stores including multi-lane mass merchandisers and local independent retailers. In addition to its innovative software, Catuity also provides marketing expertise and support services to its clients. More information on Catuity is available at its website: http://www.catuity.com

In conjunction with the provisions of the "Safe Harbor" section of the Private Securities Litigation Reform Act of 1995, this release may contain forward-looking statements pertaining to future anticipated projected plans, performance and developments, as well as other statements relating to future operations. All such forward-looking statements are necessarily only estimates of future results and there can be no assurance that actual results will not materially differ from expectations. Further information on potential factors that could affect Catuity, Inc. is included in the company's Form 10-K, which is filed with the U.S. Securities & Exchange Commission.