ST. PETERSBURG, Fla., March 18 /PRNewswire-FirstCall/ -- Catalina
Marketing Corporation (NYSE: POS) today announced that it has received a
response from the Office of the Chief Accountant of the Securities and
Exchange Commission (SEC) in connection with a key element of the company's
historical revenue recognition methodology. Specifically, the Staff of the
Office of the Chief Accountant stated that it does not object to the company's
historical revenue recognition methodology for certain company transactions
with consumer packaged goods manufacturers governed by operating contracts
with "exclusivity" provisions. As a result, no adjustments to the financial
statements related to the timing of revenue recognition specifically related
to exclusivity in the Catalina Manufacturer Services division will be
required.
As previously disclosed, Catalina's former independent auditor, Ernst &
Young LLP (E&Y), resigned as the company's auditor on August 20, 2003. In
correspondence to the SEC dated September 9, 2003, E&Y stated that there was a
"disagreement" between the company and E&Y relating to "the company's
accounting treatment with respect to certain exclusivity rights granted to
customers for the contractual periods of its arrangements."
PricewaterhouseCoopers (PwC) was retained as the company's independent auditor
in October 2003 and, following a review of the company's revenue recognition
policies relating to these exclusivity rights, concurred that the company's
accounting treatment for these rights is appropriate. Thereafter, the company
contacted the Office of Chief Accountant to seek its review and concurrence
regarding the appropriate accounting treatment for the exclusivity rights.
"We appreciate the SEC's timely response regarding this matter," stated
Christopher W. Wolf, executive vice president and chief financial officer.
"We are pleased to report that the audits are progressing and the favorable
resolution of this particular revenue recognition issue regarding exclusivity
rights will help expedite the process. The company's Audit Committee and
management are working with PwC to complete the audits. While the time
required to complete the audits cannot be determined, we look forward to
sharing those results with our investors as soon as possible."
As previously disclosed by the Company, at the time of E&Y's resignation,
there were several "reportable events" relating to other financial accounting
matters that had been identified. The company is reviewing the accounting
issues underlying these other reportable events, and is addressing all such
issues, as appropriate, with PwC. Unlike the exclusivity issue review, which
has been completed, the review of the other four reportable events previously
disclosed is ongoing and thus the company is making no announcement at this
time regarding those items. Catalina Marketing can give no assurance that
these remaining "reportable events", or any other issues that arise as part of
the audit of its fiscal year ended March 31, 2003 and the re-audits of fiscal
years 2002 and 2001, will not result in a restatement of its prior year
financial statements. The fact that the exclusivity issue was resolved
favorably should not be construed as an indication that the other reportable
events or other items in the audit will likewise be resolved favorably. Due
to the ongoing review of these matters and the status of these audits,
previously filed financial statements, including the associated audit opinions
and review reports of the company, should not be relied upon until the company
files it annual report for the year ended March 31, 2003 on Form 10-K.
Based in St. Petersburg, FL., Catalina Marketing Corporation
(http://www.catalinamarketing.com) was founded 20 years ago based on the premise that
targeting communications based on actual purchase behavior would generate more
effective consumer response. Today, Catalina Marketing combines unparalleled
insight into consumer behavior with dynamic consumer access. This combination
of insight and access provides marketers with the ability to execute behavior-
based marketing programs, ensuring that the right consumer receives the right
message at exactly the right time. Catalina Marketing offers an array of
behavior-based promotional messaging, loyalty programs and direct to patient
information. Personally identifiable data that may be collected from the
company's targeted marketing programs, as well as its research programs, are
never 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 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,
the company's ability to maintain favorable client relationships, the timing
of completion of the company's audits, the nature and extent of any changes to
the company's audits and reaudits, the outcome and impact of the ongoing SEC
investigation, the outcome of the resolution of the other reportable events
disclosed in the company's Form 8-K dated August 20, 2003, and the outcome and
impact of the pending shareholder class action.
SOURCE Catalina Marketing Corporation
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Related links:
http://www.catalinamarketing.com
CONTACT:
Investors, Christopher W. Wolf, Executive
Vice President and Chief Financial Officer, +1-727-579-5218, or
Joanne Freiberger, Vice President, Finance, +1-727-579-5116, or
Media, Susan Gear, Executive Director, Marketing,
+1-727-579-5452, all of Catalina Marketing
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