ST. PETERSBURG, Fla., Jan. 16 /PRNewswire-FirstCall/ --
Catalina Marketing Corporation (NYSE: POS) today reported third quarter
results for the period ended December 31, 2002. Revenue for the quarter grew
4 percent to $119.1 million, compared to $114.7 million in the third quarter
of the prior fiscal year. Quarterly net income was $16.9 million, or 31 cents
per diluted share. Net income for the comparable prior year period was
$17.4 million, or 31 cents per diluted share.
For the nine-month period ended December 31, 2002, total revenue grew
9 percent to $341.3 million, versus $313.1 million for the comparable prior
year period. Net income for the first nine months was $38.0 million, or
69 cents per diluted share, after the effect of the second quarter non-cash
charge to recognize impairment in the carrying value of certain cost-based
investments, in the aggregate amount of $2.5 million. Excluding the effect of
the non-cash charge, net income would have been $40.5 million, or
approximately 73 cents per diluted share. Net income for the comparable prior
year period was $39.2 million, or 69 cents per diluted share.
Daniel D. Granger, President and Chief Executive Officer, commented, "Our
earnings per share were consistent with our guidance given at the end of the
second quarter. Revenue was below our target, primarily due to reduced
spending by manufacturer clients in our core domestic business. However, our
management team implemented expense reduction measures to compensate for the
reduced revenue."
"Health Resource, our targeted newsletter solution for pharmacies,
continues to make progress in the face of a challenging environment in which
our pharmaceutical clients and retail pharmacies remain cautious in their
program participation. Revenue was in line with previous guidance, resulting
in a nominal loss this quarter. In a positive sign for HRP, the U.S. Food and
Drug Administration (FDA) began utilizing the Health Resource Newsletter to
deliver public service announcements in retail pharmacies, further
demonstrating the value of the one to one communication provided by the Health
Resource Network."
Granger continued, "Our international business units performed well in the
quarter. Our European operations posted a quarterly revenue increase in excess
of 40 percent over the prior year period. In Japan we signed a chainwide
contract with Ito Yokado, a premier Japanese supermarket retailer, to install
our in-store network."
Commenting on the upcoming fourth quarter, Granger stated, "We expect the
reduced spending by our manufacturer clients to continue through the fourth
quarter, which will impact our core domestic business results. As such, we
are updating our revenue and earnings outlook for the fourth quarter. Based
upon our financial results for the first three quarters, client commitments
and recent selling activity, we estimate that for the quarter ending March 31,
2003, consolidated revenue will increase between four and seven percent over
the prior year comparable period. We expect fourth quarter earnings in the
range of 41 to 43 cents per share, consistent with our previous guidance.
Based on these projections, we expect to grow annual consolidated revenue for
the current fiscal year between seven and nine percent with fiscal year
earnings per share projected to be between $1.09 and $1.11, net of the effect
of the second quarter one time charge. Excluding the effect of the second
quarter one-time charge, we expect fiscal year earnings per share to be
between $1.14 and $1.16."
Operating and corporate highlights for the quarter included the following:
* Core Domestic Business -- Revenue in the third quarter increased
approximately 6 percent over the comparable prior year period. The
company completed the installation of 607 stores on a net basis during
the quarter, including 442 Sav-On and Osco drug stores. For the first
nine months of the fiscal year, 845 net stores have been added to the
installed store base. On December 31, 2002, the company's U.S.
installed store base totaled 17,333 stores, compared to 16,503 installed
stores at the same time last year.
* Health Resource -- Revenue for the quarter was approximately 14 percent
lower than the comparable prior year period. At the end of the quarter,
the Health Resource(R) Network was installed in a total of 17,686
pharmacy outlets, compared to 17,622 pharmacy outlets at December 31,
2001. The company completed installations in 62 stores on a net basis
during the quarter. Health Resource net loss was nominally dilutive to
earnings this quarter.
* European Operations -- The European business, which consists of in-store
operations in France, Italy and the United Kingdom, experienced an
increase in revenue from the prior year third quarter of approximately
44 percent. The company completed installations in 260 stores on a net
basis during the quarter, for a total installed store base at the end
of the period of 3,551. For the quarter, the European Operations were
slightly accretive to consolidated earnings.
* Japanese Joint Venture -- During the quarter, the company's Japanese
joint venture experienced a quarterly revenue increase of one percent
compared to the third quarter of the prior year. The company completed
the installation of 11 stores on a net basis during the quarter, for a
total installed store base at the end of the period of 518 stores. The
company's portion of the net loss in its Japanese joint venture
approximated 1 cent per company common diluted share this quarter.
* Catalina Marketing Research -- Revenue in the company's research
operations increased 8 percent compared to the third quarter of the
prior year. The company's research operations are conducted by Alliance
Research, which leverages the value of Catalina data in attitudinal
research applications. Catalina Marketing Research contributed
approximately 1 cent per company common diluted share this quarter.
* Stock Repurchases -- During the quarter, the company repurchased
1,392,100 shares of its common stock for a total of $27.6 million, at an
average price of $19.83 per share. Since the beginning of the fiscal
year, the company has purchased 2,315,800 shares of its common stock for
a total of $56.9 million, at an average price of $24.56 per share. The
company currently has authorization to repurchase an additional
$72.4 million of common stock under the July 2002 Board of Directors'
authorization.
* Conference Call -- The company will host a conference call today,
January 16, 2003 at 5:00 PM EST to discuss third quarter results. The
dial-in number is (800) 863-4938 and the International Dial number is
(706) 645-0372. Rebroadcast of the call will be available from 9:00 PM
EST on Thursday, January 16 until midnight EST on Friday, January 24.
The replay number is (800) 403-4440.
Based in St. Petersburg, Fla., Catalina Marketing Corporation
(http://www.catalinamarketing.com) provides a wide range of strategic, targeted
marketing solutions for consumer goods companies and retailers. The targeted
marketing services of the company are provided by interrelated operating
groups that strive to influence the purchasing behavior of consumers wherever
and whenever they make purchase decisions. Through these operating groups,
Catalina Marketing is able to reach consumers internationally and domestically
-- in-store, using incentives, loyalty programs, sampling and advertising
messages; at home, through direct mailings; and online. Personally
identifiable data that may be collected from the company's targeted marketing
programs, as well as its research programs, will not be sold or given to any
outside party without the express permission of the consumer.
Certain statements in the preceding paragraphs are forward-looking, and
actual results may differ materially. Statements not based on historic facts
involve risks and uncertainties, including, but not limited to, the changing
market for promotional activities, especially as it relates to policies and
programs of packaged goods and pharmaceutical manufacturers for the issuance
of certain product coupons and other promotions, the effect of economic and
competitive conditions and seasonal variations, actual promotional activities
and programs with the company's customers, the pace of installation of the
company's store network, the policies and programs of the company's retail
partners, the success of new services and businesses and the pace of their
implementation, and the company's ability to maintain favorable client
relationships
- Financial Tables Follow -
Catalina Marketing Corporation
Selected Financial Data
(in thousands, except per share amounts)
Three Months Nine Months
Periods Ended December 31
2002 2001 2002 2001
Revenue $119,110 $114,730 $341,344 $313,132
Direct Operating
Expenses 50,376 49,334 153,760 137,453
Selling, General and
Administrative 30,088 27,384 89,560 80,563
Depreciation and
Amortization 11,155 10,601 32,334 31,496
Income from
Operations 27,491 27,411 65,690 63,620
Interest Expense and
Other 285 51 2,897 1,921
Minority Interest 8 4 28 20
Provision for Income
Taxes 10,338 9,985 24,827 22,521
Net Income $16,876 $17,379 $37,994 $39,198
Diluted:
Earnings Per Share $0.31 $0.31 $0.69 $0.69
Weighted Average
Shares Outstanding 54,285 56,370 55,387 57,187
Basic:
Earnings Per Share $0.31 $0.31 $0.69 $0.70
Weighted Average
Shares Outstanding 54,212 55,437 54,830 56,078
Selected Other Data
December 31
2002 2001
Balance Sheet and Cash
Flow (in thousands):
Cash $6,757 $4,562
Stockholders' Equity 240,330 225,315
Twelve Month EBITDA 144,963 130,084
U.S. Core Domestic
Business:
Number of Stores at
Quarter End 17,333 16,503
Net Stores Installed
During Quarter / YTD 607 / 845 437 / 1,028
Promotions Printed
During Quarter / YTD
(in millions) 883 / 2,413 853 / 2,270
Weekly Shopper Reach
at Quarter End (in
millions) 212 209
International Business:
Number of Stores at
Quarter End 4,069 3,338
Net Stores Installed
During Quarter / YTD 271 / 688 199 / 721
Promotions Printed
During Quarter / YTD
(in millions) 156 / 364 100 / 277
Weekly Shopper Reach
at Quarter End (in
millions) 47 37
SOURCE Catalina Marketing Corporation
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Related links:
http://www.catalinamarketing.com
Company News On-Call:
http://www.prnewswire.com/gh/cnoc/comp/113439.html
CONTACT:
Christopher W. Wolf, Chief Financial Officer,
+1-727-579-5218, or Joanne Freiberger, Vice President, Finance,
+1-727-579-5116, both of Catalina Marketing Corporation
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