ST. PETERSBURG, Fla., Jan. 17 /PRNewswire-FirstCall/ -- Catalina Marketing
Corporation (NYSE: POS) today reported third quarter results for the period
ended December 31, 2001. Revenue in the quarter grew 6 percent to
$114.7 million, compared to $108.7 million in the third quarter of the prior
year. Quarterly net income was $17.4 million, or 31 cents per diluted share,
versus $16.8 million, or 29 cents per diluted share for the comparable prior
year period.
As described below, the company implemented Statement of Financial
Accounting Standard No. 142 (SFAS 142) as of the beginning of the current
fiscal year, relating to the accounting for goodwill. As a result of adopting
the new standard, the company's net income and diluted earnings per share were
increased during the third quarter by approximately $1.4 million and 2 cents,
respectively. Under the new standard, pro forma net income for the third
quarter of the prior year would have been $17.8 million, or 30 cents per
diluted share.
For the nine months ended December 31, 2001, revenue totaled
$313.1 million, compared to $304.5 million for the first nine months of the
prior year. Net income for the first nine months of the current year totaled
$39.2 million, or 69 cents per diluted share, compared to $43.6 million, or
75 cents per diluted share, for the comparable period last year. Under SFAS
142, pro forma net income for the prior year nine-month period would have been
$46.1 million, or 79 cents per diluted share.
Daniel D. Granger, President and Chief Executive Officer, commented, "Our
financial performance was in line with expectations. In this challenging
business environment, our management team remained focused and delivered solid
results."
Granger added, "Our performance for the quarter was highlighted by Health
Resource, which produced another quarter of outstanding results. For the
quarter, revenue increased by more than 100 percent over the third quarter of
the prior fiscal year, and it recorded its fourth consecutive quarter of
profitability. Health Resource added over 3,000 stores to its network this
quarter, giving it a total of more than 17,600 pharmacy outlets at quarter
end. These are truly exceptional achievements."
Commenting on the upcoming fourth quarter, Granger stated, "As we have
outlined in previous announcements, one of the challenges we are managing is
the softness in client spending in our core domestic business. This has had
an adverse effect on consolidated revenue and earnings for the first three
quarters of the current fiscal year. With the arrival of the new calendar
year, we are beginning to benefit from the previously anticipated increase in
spending commitments from our manufacturer clients. Based upon client
contract commitment levels and analysis of recent selling activity, we expect
fourth quarter consolidated revenue growth to approximate 20 to 25 percent
over the comparable prior year period. Reflecting this expected revenue
growth, fourth quarter earnings per diluted share are projected to be in the
range of 38 to 42 cents. Both the revenue and earnings estimates are
consistent with our previous guidance."
Commenting on the upcoming fiscal year, Granger stated, "As I stated
above, we are starting to see indications that our clients in the core
domestic business have begun to make increased spending commitments. In
addition, Health Resource will continue to build upon the strong foundation of
profitability in this fiscal year. Based upon our projected financial
performance for fiscal 2002, and the expected strength of both the core
domestic business and Health Resource, our preliminary estimate for fiscal
year 2003 is that both revenue and earnings will grow between 20 and 25
percent on an annual basis. These revenue and earnings growth rates are
consistent with our historical growth rates."
Operating and corporate highlights for the quarter included the following:
Catalina Marketing Services Worldwide
* Core Domestic Business -- Revenue in the core domestic business was
approximately equal to revenue in the third quarter of the prior year. The
company completed the installation of 437 stores on a net basis during the
quarter. For the first nine months of the fiscal year, 1,028 net stores have
been added to the installed store base. On December 31, 2001, the company's
U.S. installed store base totaled 16,503 stores, compared to 15,171 installed
stores at the same time last year.
* European Operations -- The European business, which consists of in-store
operations in France, Italy and the United Kingdom, experienced a decrease in
revenue from the prior year period of approximately 23 percent. The revenue
decrease resulted primarily from the previously announced reduction in the
installed store base in the United Kingdom. During the quarter, the European
operations installed 166 stores on a net basis. The installed store base at
the end of the period totaled 2,854 stores compared to 2,105 stores on
December 31, 2000. The European operations' results were slightly accretive
to consolidated earnings this quarter.
* Japanese Joint Venture -- During the quarter, the company's Japanese
joint venture's network was installed in 33 stores for a total installed store
base of 484 stores at the end of the quarter. The company's portion of the
net loss in its Japan joint venture approximated 1 cent per company common
diluted share this quarter.
Health Services Marketing
* Health Resource -- Health Resource experienced strong revenue growth
during the quarter, with a year-over-year increase of approximately 101
percent. Health Resource added 3,020 stores on a net basis in the period,
including 2,600 Eckerd locations. Health Resource delivered targeted
advertising messages in a total of 17,622 pharmacy outlets as of December 31,
2001. The company's portion of the net income of Health Resource approximated
2 cents per company common diluted share this quarter.
Catalina Marketing Solutions
* Catalina Interactive Marketing Services -- CIMS, formerly known as
SuperMarkets Online, experienced a decrease in revenue of approximately
76 percent from the comparable prior year period. At the end of the quarter,
ValuPage(R) (http://www.valupage.com) was accepted in 14,084 supermarkets within the
Catalina Marketing Network(R). CIMS' net loss for the quarter approximated
1 cent per company common diluted share.
Catalina Marketing Research
* Research Operations -- Revenue in the company's research operations was
approximately equal to revenue in the comparable prior year period. The
company's research operations are conducted by Alliance Research, which
leverages the value of Catalina data in attitudinal research applications.
Earnings for the research operations were equal to approximately 1 cent per
company common diluted share.
Corporate
* Stock Repurchase -- During the quarter, the company repurchased 589,800
shares of its common stock for a total of $16.5 million, at an average price
of $27.95 per share. The share repurchase activity was executed under the
$75 million Board of Directors' authorization announced in July 2001. The
company currently has Board authorization to repurchase an additional
$43.6 million of common stock under the July 2001 authorization. Since the
beginning of the fiscal year, the company has purchased 1,621,100 shares of
its common stock for a total of $46.5 million, at an average price of $28.70
per share.
* Amortization of Goodwill -- Effective April 1, 2001, the company adopted
Statement of Financial Accounting Standard No. 142, Goodwill and Other
Intangible Assets. Under the new standard, goodwill is capitalized as an
asset on the balance sheet without any annual amortization expense. The asset
will be tested for impairment, no less frequently than annually, and if
impairment has occurred, an appropriate amount will be expensed on the income
statement.
* Conference Call -- The company will host a conference call Thursday,
January 17, 2002 at 5:00 PM Eastern Standard Time to discuss the company's
results. The dial-in number is (800) 863-4938. The conference leader is
Joseph Port. Rebroadcast of the call will be available from 9 PM on
January 17 until midnight on Friday, January 25. 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 provided 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 manufacturers for the issuance of certain product
coupons, 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
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 2001 2000 2001 2000
Revenue $114,730 $108,740 $313,132 $304,521
Direct Operating Expenses 49,334 44,392 137,453 125,424
Selling, General and
Administrative 27,384 25,406 80,563 76,801
Depreciation and
Amortization 10,601 11,240 31,496 31,695
Income from Operations 27,411 27,702 63,620 70,601
Interest Income/(Expense) and
Other (51) (1,284) (1,921) (1,988)
Minority Interest 4 446 20 1,097
Provision for Income Taxes 9,985 10,039 22,521 26,080
Net Income * $17,379 $16,825 $39,198 $43,630
Diluted:
Earnings Per Share * $0.31 $0.29 $0.69 $0.75
Weighted Average Shares
Outstanding 56,370 58,377 57,187 58,042
Basic:
Earnings Per Share * $0.31 $0.30 $0.70 $0.78
Weighted Average Shares
Outstanding 55,437 55,955 56,078 55,711
Selected Other Data
December 31
2001 2000
Balance Sheet and Cash Flow (in thousands):
Cash $4,562 $14,500
Stockholders' Equity 225,315 205,856
Twelve Month EBITDA 130,084 135,927
U.S. Checkout Coupon Business:
Number of Stores at Quarter End 16,503 15,171
Net Stores Installed During
Quarter / YTD 437 / 1,028 399 / 1,655
Promotions Printed During
Quarter / YTD (in millions) 853 / 2,270 944 / 2,485
Weekly Shopper Reach at
Quarter End (in millions) 209 194
International Checkout Coupon
Business:
Number of Stores at Quarter End 3,338 2,547
Net Stores Installed During
Quarter / YTD 199 / 721 -121 / -40
Promotions Printed During
Quarter / YTD (in millions) 100 / 277 119 / 413
Weekly Shopper Reach at
Quarter End (in millions) 37 31
* Under SFAS 142, for the three months ended December 31, 2000, pro forma
net income would have been $17.8 million, diluted earnings per share
would have been 30 cents and basic earnings per share would have been 32
cents. For the nine months ended December 31, 2000, under SFAS 142, pro
forma net income would have been $46.1 million, diluted earnings per
share would have been 79 cents and basic earnings per share would have
been 83 cents.
SOURCE Catalina Marketing Corporation
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Related links:
http://www.catmktg.com
Company News On-Call:
http://www.prnewswire.com/gh/cnoc/comp/113439.html
CONTACT:
Joseph P. Port, Chief Financial Officer,
+1-727-579-5006, or Christopher W. Wolf, Vice President Finance,
+1-727-579-5218, both of Catalina Marketing Corporation
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