ST. PETERSBURG, Fla., Aug. 25 /PRNewswire-FirstCall/ -- Catalina Marketing
Corporation (NYSE: POS) announced today that Ernst & Young LLP has resigned as
the company's independent auditors, effective August 20, 2003. The company's
audit committee has begun the process of conducting its search for and
interviewing new independent auditors to audit the company's fiscal year 2003,
including the finalization of the proper accounting treatment for the revenue
recognition accounting issues previously disclosed.
The company expects to file a report on Form 8-K with the Securities and
Exchange Commission today to report the auditors resignation and disclose
certain "reportable events" identified by Ernst & Young LLP to the company.
The company is already reviewing the accounting issues underlying the
reportable events, and it will address all such issues, as appropriate, with
its new auditors. The accounting issues that give rise to the "reportable
events" that will be described in the Form 8-K filing are as follows: (i) the
timing of the company's accounting for revenues derived from its customer
arrangements in the Catalina Health Resource division in light of the
discovery by the company's management of certain agreements with customers
that were not reflected in the written agreement and/or appropriately
considered in connection with the company's accounting for the arrangements,
and certain other elements of one significant multi-year arrangement, (ii) the
timing of the company's accounting with respect to revenue recognition in the
Catalina Health Resource division and the Catalina Manufacturer Services
division to the extent that certain customer contracts had not been executed
by both parties during the period in which the revenue was first recognized,
(iii) the timing of the company's accounting treatment of its customer
arrangements in the Catalina Manufacturer Services division and in the
Catalina Health Resource division with respect to certain exclusivity rights
granted to customers for the contractual periods of its arrangements, (iv) the
company's accounting treatment for certain non-cash transactions in the
Catalina Retail Services division, and (v) the company's disclosure of segment
information for financial reporting.
As noted, the company is continuing to evaluate the timing issues related
to revenue recognition in the Catalina Health Resource division and its base
business and is evaluating the impact of the reportable events identified by
Ernst & Young LLP. Due to the ongoing review, the company has delayed the
filing of its annual report on Form 10-K for fiscal 2003, ended March 31,
2003, and its quarterly report on Form 10-Q for the first quarter of fiscal
2004, ended June 30, 2003. Previously filed financial statements of the
company, including the associated audit opinions and review reports of the
company's independent accountants, should not be relied upon until the
company's review is complete.
Daniel D. Granger, Chairman and Chief Executive Officer commented, "While
the resignation of Ernst & Young is unfortunate, the company will continue to
dedicate the necessary resources to resolve these issues as quickly as
possible. We expect to engage a new independent auditor in the near future
and will announce the engagement as soon as the search process is complete.
In the meantime, we are maintaining the focus on our key business strategies
and the performance of our day to day business operations. It is important to
emphasize that the accounting issues do not have any impact on the health of
our businesses overall. We are the leaders in behavior-based marketing
services, and intend to maintain our leadership position."
Based in St. Petersburg, Fla., Catalina Marketing Corporation
(http://www.catalinamarketing.com) provides a wide range of behavior-based marketing
services for manufacturers and retailers. These behavior-based marketing
services are provided by interrelated operating groups that strive to
influence purchase behavior of consumers wherever and whenever they make
purchase decisions. Through these operating groups, Catalina Marketing
Corporation is able to reach consumers internationally and domestically --
in-store, using incentives, loyalty programs and advertising messages, and
at-home, through direct mail and sampling. Personally identifiable data that
may be collected from the company's targeted marketing programs, as well as
its research programs, is 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 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.
SOURCE Catalina Marketing Corporation
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Related links:
http://www.catalinamarketing.com
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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