ST. PETERSBURG, Fla., Oct. 18 /PRNewswire-FirstCall/ -- Catalina Marketing
Corporation (NYSE: POS) today reported second quarter results for the period
ended September 30, 2002. Revenue for the quarter grew 9 percent to
$113.2 million, compared to $104.0 million in the second quarter of the prior
fiscal year. Quarterly net income was $10.5 million, or 19 cents per diluted
share, after the effect of a non-cash charge, discussed below. Excluding the
effect of the non-cash charge, net income would have been $13.0 million, or
approximately 23 cents per diluted share. Net income for the comparable prior
year period was $12.4 million, or 22 cents per diluted share.
During the quarter, the company recorded a non-cash charge to recognize
impairment in the carrying value of certain cost-based investments, in the
aggregate amount of $2.5 million, or approximately 5 cents per diluted share.
For the six-month period ended September 30, 2002, total revenue grew 12
percent to $222.2 million, versus $198.4 million for the comparable prior year
period. Net income for the first six months was $21.1 million, or 38 cents
per diluted share, after the effect of the second quarter charge referenced
above. Excluding the effect of the non-cash charge, net income would have
been $23.6 million, or approximately 42 cents per diluted share. Net income
for the comparable prior year period was $21.8 million, or 38 cents per
diluted share.
Daniel D. Granger, President and Chief Executive Officer, commented, "Our
results for the quarter were in line with the guidance provided in our
October 1, 2002 press release. As we described in the earlier release,
revenue and earnings were impacted by current market conditions affecting
Health Resource. We have experienced a decrease in the amount of promotional
spending by our pharmaceutical clients, and retail pharmacies have become more
selective in their program participation. While these near term reductions to
expectations are disappointing, we remain confident in the long term prospects
of Health Resource."
Granger continued, "Our other business units performed well in the
quarter. The core domestic business had a solid quarter with revenue growth
of 14 percent over the second quarter of last year. Both our European
operations and our Research operations posted quarterly revenue increases in
excess of 20 percent over the prior year period. Overall, I am pleased with
our continued growth and strong results despite an uncertain economic
environment."
Commenting on the upcoming third and fourth quarters, Granger stated, "As
we have previously discussed, the reduction in promotional spending by our
pharmaceutical clients is expected to continue at least through the remainder
of the fiscal year. Based upon our financial results in the first two
quarters, client commitments and recent selling activity, we estimate that for
the quarter ending December 31, 2002, consolidated revenue will increase
between 8 and 12 percent compared to the third quarter of the prior fiscal
year. As a result of our expected revenue growth, we estimate that
consolidated third quarter earnings will be between 30 and 32 cents per share.
For the quarter ending March 31, 2003, we expect consolidated revenue to
increase between 10 and 15 percent over the prior year comparable period with
earnings per share in the range of 41 to 43 cents per share. Based on these
projections, we expect to grow annual consolidated revenue for the current
fiscal year between 10 and 13 percent with earnings per share projected to be
between $1.13 and $1.17 on an annual basis in fiscal 2003, before the effect
of the one-time charge."
Operating and corporate highlights for the quarter included the following:
* Core Domestic Business -- Revenue in the second quarter increased
approximately 14 percent over the comparable prior year period. The
company's U.S. installed store base totaled 16,726 stores at the end of
the quarter, compared to 16,066 at the end of the prior year second
quarter. There was a net increase of 246 stores in the company's
installed store base this quarter.
* Health Resource -- Revenue for the quarter was approximately 7 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 17,624
pharmacy outlets, compared to 14,602 pharmacy outlets at September 30,
2001. The company completed installations in 151 stores on a net basis
during the quarter. Health Resource net loss reduced earnings by
approximately 2 cents per company common diluted share 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 second quarter of approximately
20 percent. The company completed installations in 176 stores on a net
basis during the quarter, for a total installed store base at the end of
the period of 3,291. For the quarter, the European Operations added to
earnings by approximately 1 cent per company common diluted share.
* Japanese Joint Venture -- During the quarter, the company's Japanese
joint venture experienced a quarterly revenue decline of 13 percent, or
an 11 percent decline in local currency, compared to the second quarter
of the prior year. The company completed the installation of 3 stores
on a net basis during the quarter, for a total installed store base at
the end of the period of 507 stores. The company's portion of the net
loss in its Japanese joint venture approximated 2 cents per company
common diluted share this quarter.
* Catalina Marketing Research -- Revenue in the company's research
operations increased 22 percent compared to the second 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.
* Catalina Interactive Marketing Services -- ValuPage(R)
(http://www.valupage.com) is now accepted in 15,200 supermarkets within the
Catalina Marketing Network(R). Revenue in the quarter decreased
approximately 80 percent compared to the same period last year. CIMS'
net loss for the quarter approximated 1 cent per company common diluted
share.
* Stock Repurchases -- During the quarter, the company repurchased 55,800
shares of its common stock for a total of $1.4 million, at an average
price of $25.82 per share. Subsequent to the end of the second quarter,
the company repurchased 245,300 shares of its common stock for a total
of $4.7 million, at an average price of $19.02 per share. Since the
beginning of the fiscal year, the company purchased 1,169,000 shares of
its common stock for a total of $33.9 million, at an average price of
$29.03 per share. The company currently has authorization to repurchase
an additional $95.3 million of common stock under the July 2002 Board of
Directors' authorization.
* Conference Call -- The company will host a conference call today,
October 18, 2002 at 11:30 AM EDT to discuss second 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
EDT on Friday, October 18 until midnight EDT on Friday, October 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 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 Six Months
Periods Ended September 30 2002 2001 2002 2001
Revenue $113,163 $103,978 $222,234 $198,402
Direct Operating Expenses 51,404 46,929 103,384 88,119
Selling, General and
Administrative 30,944 26,477 59,472 53,179
Depreciation and
Amortization 10,188 10,189 21,179 20,895
Income from
Operations 20,627 20,383 38,199 36,209
Interest
Income/(Expense) and
Other (2,231) (787) (2,612) (1,870)
Minority Interest 9 7 20 16
Provision for Income Taxes 7,946 7,154 14,489 12,536
Net Income $10,459 $12,449 $21,118 $21,819
Diluted:
Earnings Per Share $0.19 $0.22 $0.38 $0.38
Weighted Average
Shares Outstanding 55,543 57,369 56,309 57,597
Basic:
Earnings Per Share $0.19 $0.22 $0.38 $0.39
Weighted Average
Shares Outstanding 54,876 56,312 55,490 56,400
Selected Other Data
September 30
2002 2001
Balance Sheet and Cash Flow (in thousands):
Cash $5,193 $8,867
Stockholders' Equity 250,978 222,720
Twelve Month EBITDA 144,329 131,014
U.S. Checkout Coupon Business:
Number of Stores at Quarter End 16,726 16,066
Net Stores Installed
During Quarter / YTD 246 / 238 431 / 591
Promotions Printed
During Quarter / YTD
(in millions) 794 / 1,530 766 / 1,417
Weekly Shopper Reach at Quarter
End (in millions) 202 194
International Checkout Coupon Business:
Number of Stores at Quarter End 3,798 3,139
Net Stores Installed
During Quarter / YTD 179 / 417 372 / 522
Promotions Printed
During Quarter / YTD
(in millions) 95 / 208 77 / 176
Weekly Shopper Reach at Quarter End
(in millions) 40 33
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:
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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