ST. PETERSBURG, Fla., Nov. 4 /PRNewswire-FirstCall/ -- Catalina Marketing
Corporation (NYSE: POS) today reported financial results for its second fiscal
quarter and first six months ended September 30, 2004.
For the three months ended September 30, 2004, consolidated revenues were
$103.7 million, compared with revenues of $107.7 million in the comparable
period last year. The company reported consolidated net income of $20.3
million, or $0.39 per diluted share, for the second quarter of fiscal 2005,
compared with a net loss of $11.1 million, or a loss of $0.21 per diluted
share, for the second quarter of fiscal 2004.
On a pro forma non-GAAP basis (which excludes the results of businesses
that have either been disposed of or the disposition of which is planned, as
well as the removal of the one-time deferral of revenues resulting from the
prior years' revenue recognition adjustments to Catalina Health Resource
(CHR), as described further below), consolidated revenues were $102.4 million
for the three months ended September 30, 2004, compared with $100.3 million of
revenues for the same period last year. Pro forma non-GAAP consolidated net
income was $18.9 million, or $0.36 per diluted share, for the three months
ended September 30, 2004, compared with $14.2 million of net income, or $0.27
per diluted share, for the same period last year.
For the six months ended September 30, 2004, consolidated revenues were
$200.5 million, compared with revenues of $194.3 million in the comparable
period last year. The company reported consolidated net income of $31.2
million, or $0.60 per diluted share, for the first half of fiscal 2005,
compared with a net loss of $6.8 million, or a loss of $0.13 per diluted
share, for the first half of fiscal 2004.
On a pro forma non-GAAP basis, consolidated revenues were $197.8 million
for the six months ended September 30, 2004, compared with $182.1 million of
revenues for the same period last year. Pro forma non-GAAP consolidated net
income was $32.2 million, or $0.62 per diluted share, for the six months ended
September 30, 2004, compared with $18.7 million of net income, or $0.36 per
diluted share, for the same period last year.
Dick Buell, Catalina president and chief executive officer stated, "The
results achieved in the second quarter were encouraging, and they reinforce
our belief that our strategy to focus on proprietary applications at the point
of sale is key to our long-term growth and vitality. Our plans have been
formulated and as reflected in the accomplishments achieved to date, we
believe these results demonstrate that the company has taken the necessary
steps to develop a foundation for the future."
Pro Forma Non-GAAP Adjustments
This pro forma non-GAAP financial information includes the results of the
company's ongoing business operations and, accordingly, excludes (i) the
effect of CHR revenues recognized in fiscal 2004 that had been deferred from
prior fiscal years, (ii) the financial results of the business units that have
been divested, and (iii) the financial results of the remaining business unit
targeted for divestiture by the company. In the second quarter of fiscal
2005, Catalina Marketing sold its Japan Billboard business and its Direct
Marketing Services unit and has reported their aggregated results as
'Discontinued Operations' on the income statement. The company has also
previously announced its intention to divest Catalina Marketing Research
Solutions (CMRS). Investors are urged to review the 10-Q for a detailed
discussion of the financial results and business descriptions.
Summary of Segment Results
Three Months Ended Three Months Ended
September 30, 2004 September 30, 2003
(In thousands) Revenues Income/Loss Revenues Income/Loss
Catalina Marketing Services $66,070 $18,896 $71,427 $18,870
Catalina Health Resource 19,181 2,774 15,153 (146)
International 16,891 2,073 13,633 1,083
Corp / Eliminations 230 (4,890) 114 (5,641)
Total Pro Forma Non-GAAP $102,372 $18,853 $100,327 $14,166
Discontinued Operations $-- $3,543 $-- $(27,648)
CMRS 1,345 (2,117) 3,354 92
Catalina Health Resource Adj. -- -- 3,995 2,279
Total Pro Forma Adjustment $1,345 $1,426 $7,349 $(25,277)
Consolidated GAAP $103,717 $20,279 $107,676 $(11,111)
Six Months Ended Six Months Ended
September 30, 2004 September 30, 2003
(In thousands) Revenues Income/Loss Revenues Income/Loss
Catalina Marketing Services $129,468 $35,029 $131,026 $31,706
Catalina Health Resource 37,046 3,848 28,572 (2,810)
International 31,138 2,874 22,744 (63)
Corp / Eliminations 122 (9,535) (197) (10,093)
Total Pro Forma Non-GAAP $197,774 $32,216 $182,145 $18,740
Discontinued Operations $-- $1,543 $-- $(28,131)
Cumulative Effect of
Accounting Change -- -- -- (770)
CMRS 2,727 (2,554) 7,121 367
Catalina Health Resource Adj. -- -- 5,042 2,946
Total Pro Forma Adjustment $2,727 $(1,011) $12,163 $(25,588)
Consolidated GAAP $200,501 $31,205 $194,308 $(6,848)
Review of Operations
The company provided the following review and highlights of the
performance of Catalina Marketing's continuing business segments:
* Catalina Marketing Services -- CMS revenues were $66.1 million in the
quarter ended September 30, 2004, compared with $71.4 million in the
same period last year. Net income for the second fiscal quarter was
$18.9 million, or $0.36 per diluted share, in both fiscal 2005 and
fiscal 2004. For the first six months of fiscal 2005, CMS revenues
were $129.5 million and net income was $35.0 million, compared with
revenues and net income of $131.0 million and $31.7 million,
respectively, in the first six months of fiscal 2004. Earnings were
$0.67 and $0.61 per diluted share in the six months ended September
30, 2004 and 2003, respectively.
* Catalina Health Resources -- CHR revenues were $19.2 million and net
income was $2.8 million, or $0.05 per diluted share, for the quarter
ended September 30, 2004, compared with revenues of $19.1 million and
net income of $2.1 million, or $0.04 per diluted share, for the same
period last year. On a pro forma non-GAAP basis, CHR revenues grew
26.6% to $19.2 million in the second quarter of the current fiscal
year, compared with $15.2 million in the same period last year and pro
forma non-GAAP net income was $2.8 million, or $0.05 per diluted share,
compared with a loss of $0.1 million for the comparable prior year
period. For the first six months of fiscal 2005, CHR revenues were
$37.0 million resulting in net income of $3.8 million, or $0.07 per
diluted share, compared with $33.6 million in revenues and $0.1 million
in net income for the first six months of fiscal 2004. On a pro forma
non-GAAP basis, fiscal year 2004 year-to-date revenues were $28.6
million with a net loss of $2.8 million, or a net loss of $0.05 per
diluted share.
* Catalina Marketing International -- CMI revenues increased 23.9% to
$16.9 million in the quarter ended September 30, 2004, compared with
$13.6 million in the same period last year. Net income for the quarter
ended September 30, 2004 was $2.1 million, or $0.04 per diluted share,
compared with $1.1 million, or $0.02 per diluted share, for the
comparable prior year period. For the first six months of fiscal 2005,
CMI revenues were $31.1 million resulting in net income of $2.9
million, or $0.05 per diluted share, compared with revenues of $22.7
million and a net loss of $0.1 million for the six months ended
September 30, 2003.
* Catalina Marketing Research Solutions -- CMRS second quarter revenues
were $1.3 million compared with $3.4 million in the second quarter of
fiscal 2004. During the second quarter of fiscal 2005, the company
recorded an additional impairment expense related to goodwill and other
tangible assets of $3.0 million. CMRS incurred a second quarter net
loss of $2.1 million, or $0.04 per diluted share, compared with net
income of $0.1 million in the comparable prior year period. For the
six months ended September 30, 2004, CMRS revenues were $2.7 million
compared with $7.1 million in fiscal 2004. The six-month net loss for
CMRS totaled $2.6 million, or $0.05 per diluted share, compared with
net income of $0.4 million, or $0.01 per diluted share, in the first
six months of fiscal 2004.
The company's disposition of its Direct Marketing Services unit and its
Japan Billboard business during the second quarter of fiscal 2005 resulted in
a net gain of $3.5 million from the operations and disposition of these
assets. The aggregated results of these business units are reported in
'Discontinued Operations' on the income statement.
During the second quarter of fiscal year 2005, Catalina's board of
directors authorized $100 million of funds to be available for the repurchase
of the company's common stock. This authorization replaced the $44 million
unused portion of the $100 million repurchase program authorized by the board
in July 2002. As of September 30, 2004, the company had not yet repurchased
any of its stock during the current fiscal year.
Mr. Buell said, "We are pleased with the progress made in the second
quarter. Several key steps were taken toward our objectives, and we are now
focusing on the Catalina businesses in which we hold strategic advantages that
will serve to generate long-term growth and profitability."
Catalina Marketing said it plans to file its Quarterly Report on Form 10-Q
for the quarter ended September 30, 2004, with the Securities and Exchange
Commission next week. Investors are urged to review the 10-Q for a detailed
discussion of the company's financial results and business descriptions.
Webcast Scheduled
The company also announced that it will host a webcast on Thursday,
November 4, 2004; at 10:00 a.m. EST to discuss its financial results. The
webcast may be accessed at
http://www.corporate-ir.net/ireye/ir_site.zhtml?ticker=POS&script=1010&item_id=946944
and will be available for replay from November 4, 2004, through Monday,
December 6, 2004.
Catalina Marketing Corporation
Selected Financial Data
(in thousands, except per share amounts)
GAAP
Periods Ended September 30 Three Months Six Months
2004 2003 2004 2003
Revenues $103,717 $107,676 $200,501 $194,308
Direct Operating Expenses 32,713 35,991 67,600 70,692
Selling, General and Administrative 29,331 31,298 59,086 63,374
Impairment Charge 3,298 -- 3,298 --
Depreciation and Amortization 10,698 11,174 22,337 22,533
Income from Operations 27,677 29,213 48,180 37,709
Other (Income) Expense (126) 211 267 (38)
Provision for Income Taxes 11,067 12,465 18,251 15,694
Income from Continuing Operations 16,736 16,537 29,662 22,053
Gain (Loss) from Discontinued
Operations 260 (27,648) (1,740) (28,131)
Gain (Loss) from Disposition 3,283 -- 3,283 --
Income (Loss) from Discontinued
Operations 3,543 (27,648) 1,543 (28,131)
Cumulative effect of acctg change -- -- -- (770)
Net Income (Loss) $20,279 $(11,111) $31,205 $(6,848)
Earnings Per Share, Basic:
Earnings Per Share from Continuing
Operations $0.32 $0.32 $0.57 $0.43
Income (Loss) from Discontinued
Operations $0.07 $(0.53) $0.03 $(0.54)
Cumulative Effect of Accounting
Change $ -- $-- $-- $(0.02)
Net Income (Loss) Per Common Share $0.39 $(0.21) $0.60 $(0.13)
Weighted Average Shares Outstanding 52,231 52,217 52,233 52,375
Earnings Per Share, Diluted:
Earnings Per Share from Continuing
Operations $0.32 $0.32 $0.57 $0.43
Income (Loss) from Discontinued
Operations $0.07 $(0.53) $0.03 $(0.54)
Cumulative Effect of Accounting
Change $ -- $-- $-- $(0.02)
Net Income (Loss) Per Common Share $0.39 $(0.21) $0.60 $(0.13)
Weighted Average Shares Outstanding 52,311 52,217 52,269 52,375
Catalina Marketing Corporation
Selected Financial Data
(in thousands, except per share amounts)
Pro Forma Non GAAP
Periods Ended September 30 Three Months Six Months
2004 2003 2004 2003
Revenues $102,372 $100,327 $197,774 $182,145
Direct Operating Expenses 31,727 34,270 65,515 67,201
Selling, General and Administrative 28,516 29,931 57,339 60,576
Impairment Charge 288 -- 288 --
Depreciation and Amortization 10,606 11,066 22,158 22,321
Income from Operations 31,235 25,060 52,474 32,047
Other (Income) Expense (126) 211 268 (38)
Provision for Income Taxes 12,508 10,683 19,990 13,345
Income from Continuing Operations 18,853 14,166 32,216 18,740
Gain (Loss) from Discontinued
Operations -- -- -- --
Gain (Loss) from Disposition -- -- -- --
Income (Loss) from Discontinued
Operations -- -- -- --
Net Income (Loss) $18,853 $14,166 $32,216 $18,740
Earnings Per Share, Basic:
Earnings Per Share from Continuing
Operations $0.36 $0.27 $0.62 $0.36
Income (Loss) from Discontinued
Operations $-- $-- $-- $--
Net Income (Loss) Per Common Share $0.36 $0.27 $0.62 $0.36
Weighted Average Shares Outstanding 52,231 52,217 52,233 52,375
Earnings Per Share, Diluted:
Earnings Per Share from Continuing
Operations $0.36 $0.27 $0.62 $0.36
Income (Loss) from Discontinued
Operations $-- $-- $-- $--
Net Income (Loss) Per Common Share $0.36 $0.27 $0.62 $0.36
Weighted Average Shares Outstanding 52,311 52,217 52,269 52,375
Catalina Marketing Corporation
Selected Other Data
(in thousands, except store data)
September 30 September 30
2004 2003
GAAP GAAP
Balance Sheet and Cash Flow (in thousands):
Cash $97,345 $9,165
Stockholders' Equity $200,126 $197,113
Cash Flows from Operating Activities
Qtr / YTD $40,603/$42,469 $37,162/$54,441
Catalina Marketing Services:
Number of Stores at Quarter End 17,644 17,581
Net Stores Installed During Quarter / YTD 37 / 40 12 / 83
Promotions Printed During Quarter /
YTD (in millions) 846 / 1,584 813 / 1,457
Weekly Shopper Reach at Quarter End
(in millions) 216 209
Catalina Health Resource:
Number of Stores at Quarter End 12,081 15,338
Net Stores Installed During Quarter /
YTD 72 / 152 76 / (2,489)
Catalina Marketing International:
Number of Stores at Quarter End 5,598 4,517
Net Stores Installed During Quarter /
YTD 101 / 154 1,066 / 1,514
Promotions Printed During Quarter /
YTD (in millions) 220 / 411 212 / 349
Weekly Shopper Reach at Quarter End
(in millions) 63 59
Catalina Marketing Corporation
Reconciliation of GAAP to Pro Forma Non-GAAP Net Income (1)
(in thousands, except per share amounts)
Non-GAAP
Pro Forma Non-GAAP
Three Months Ended September 30, 2004 GAAP Adjustments Pro Forma
Revenues $103,717 $(1,345) $102,372
Direct Operating Expenses 32,713 (986) 31,727
Selling, General and Administrative 29,331 (815) 28,516
Impairment Charge 3,298 (3,010) 288
Depreciation and Amortization 10,698 (92) 10,606
Income from Operations 27,677 3,558 31,235
Other (Income) Expense (126) -- (126)
Provision for Income Taxes 11,067 1,441 12,508
Income from Continuing Operations 16,736 2,117 18,853
Gain (Loss) from Discontinued Operations 260 (260) --
Gain (Loss) from Disposition 3,283 (3,283) --
Income (Loss) from Discontinued
Operations 3,543 (3,543) --
Net Income (Loss) $20,279 $(1,426) $18,853
Earnings Per Share, Basic:
Earnings Per Share from Continuing
Operations $0.32 $0.04 $0.36
Income (Loss) from Discontinued
Operations $0.07 $(0.07) $--
Net Income (Loss) Per Common Share $0.39 $(0.03) $0.36
Weighted Average Shares Outstanding 52,231 52,231
Earnings Per Share, Diluted:
Earnings Per Share from Continuing
Operations $0.32 $0.04 $0.36
Income (Loss) from Discontinued
Operations $0.07 $(0.07) $--
Net Income (Loss) Per Common Share $0.39 $(0.03) $0.36
Weighted Average Shares Outstanding 52,311 52,311
(1) The non-GAAP pro forma net income results are a supplement to the
financial data provided that is based on generally accepted
accounting principles (GAAP). These non-GAAP pro forma results
reflect adjustments primarily to exclude from operating results the
financial statement information for business units that have been
identified for divestiture or disposal and as such are not viewed by
the company as part of the ongoing business. The company believes
this presentation provides useful information to investors because it
assists investors in better understanding the company's operations for
the period. It should be emphasized, however, that these measurements
are not a substitution for GAAP-based financial statements.
Catalina Marketing Corporation
Reconciliation of GAAP to Pro Forma Non-GAAP Net Income (1)
(in thousands, except per share amounts)
Non-GAAP
Pro Forma Non-GAAP
Six Months Ended September 30, 2004 GAAP Adjustments Pro Forma
Revenues $200,501 $(2,727) $197,774
Direct Operating Expenses 67,600 (2,085) 65,515
Selling, General and Administrative 59,086 (1,747) 57,339
Impairment Charge 3,298 (3,010) 288
Depreciation and Amortization 22,337 (179) 22,158
Income from Operations 48,180 4,294 52,474
Other (Income) Expense 267 1 268
Provision for Income Taxes 18,251 1,739 19,990
Income from Continuing Operations 29,662 2,554 32,216
Gain (Loss) from Discontinued Operations (1,740) 1,740 --
Gain (Loss) from Disposition 3,283 (3,283) --
Income (Loss) from Discontinued
Operations 1,543 (1,543) --
Net Income (Loss) $31,205 $1,011 $32,216
Earnings Per Share, Basic:
Earnings Per Share from Continuing
Operations $0.57 $0.05 $0.62
Income (Loss) from Discontinued
Operations $0.03 $(0.03) $--
Net Income (Loss) Per Common Share $0.60 $0.02 $0.62
Weighted Average Shares Outstanding 52,233 52,233
Earnings Per Share, Diluted:
Earnings Per Share from Continuing
Operations $0.57 $0.05 $0.62
Income (Loss) from Discontinued
Operations $0.03 $(0.03) $--
Net Income (Loss) Per Common Share $0.60 $0.02 $0.62
Weighted Average Shares Outstanding 52,269 52,269
(1) The non-GAAP pro forma net income results are a supplement to the
financial data provided that is based on generally accepted
accounting principles (GAAP). These non-GAAP pro forma results
reflect adjustments primarily to exclude from operating results the
financial statement information for business units that have been
identified for divestiture or disposal and as such are not viewed by
the company as part of the ongoing business. The company believes
this presentation provides useful information to investors because it
assists investors in better understanding the company's operations for
the period. It should be emphasized, however, that these measurements
are not a substitution for GAAP-based financial statements.
Catalina Marketing Corporation
Reconciliation of GAAP to Pro Forma Non-GAAP Net Income (1)
(in thousands, except per share amounts)
Non-GAAP
Pro Forma Non-GAAP
Three Months Ended September 30, 2003 GAAP Adjustments Pro Forma
Revenues $107,676 $(7,349) $100,327
Direct Operating Expenses 35,991 (1,721) 34,270
Selling, General and Administrative 31,298 (1,367) 29,931
Depreciation and Amortization 11,174 (108) 11,066
Income from Operations 29,213 (4,153) 25,060
Other (Income) Expense 211 -- 211
Provision for Income Taxes 12,465 (1,782) 10,683
Income from Continuing Operations 16,537 (2,371) 14,166
Gain (Loss) from Discontinued Operations (27,648) 27,648 --
Gain (Loss) from Disposition -- -- --
Income (Loss) from Discontinued
Operations (27,648) 27,648 --
Net Income (Loss) $(11,111) $25,277 $14,166
Earnings Per Share, Basic:
Earnings Per Share from Continuing
Operations $0.32 $(0.05) $0.27
Income (Loss) from Discontinued
Operations $(0.53) $0.53 $--
Net Income (Loss) Per Common Share $(0.21) $0.48 $0.27
Weighted Average Shares Outstanding 52,217 52,217
Earnings Per Share, Diluted:
Earnings Per Share from Continuing
Operations $0.32 $(0.05) $0.27
Income (Loss) from Discontinued
Operations $(0.53) $0.53 $--
Net Income (Loss) Per Common Share $(0.21) $0.48 $0.27
Weighted Average Shares Outstanding 52,217 52,217
(1) The non-GAAP pro forma net income results are a supplement to the
financial data provided that is based on generally accepted
accounting principles (GAAP). These non-GAAP pro forma results
reflect adjustments primarily to exclude from operating results the
financial statement information for business units that have been
identified for divestiture or disposal and as such are not viewed by
the company as part of the ongoing business and the removal of the
2003 one-time deferral of revenues resulting from the prior year's
revenue recognition adjustments to Catalina Health Resource. The
company believes this presentation provides useful information to
investors because it assists investors in better understanding the
company's operations for the period. It should be emphasized,
however, that these measurements are not a substitution for GAAP-based
financial statements.
Catalina Marketing Corporation
Reconciliation of GAAP to Pro Forma Non-GAAP Net Income (1)
(in thousands, except per share amounts)
Non-GAAP
Pro Forma Non-GAAP
Six Months Ended September 30, 2003 GAAP Adjustments Pro Forma
Revenues $194,308 $(12,163) $182,145
Direct Operating Expenses 70,692 (3,491) 67,201
Selling, General and Administrative 63,374 (2,798) 60,576
Depreciation and Amortization 22,533 (212) 22,321
Income from Operations 37,709 (5,662) 32,047
Other (Income) Expense (38) -- (38)
Provision for Income Taxes 15,694 (2,349) 13,345
Income from Continuing Operations 22,053 (3,314) 18,740
Gain (Loss) from Discontinued Operations (28,131) 28,131 --
Gain (Loss) from Disposition -- -- --
Income (Loss) from Discontinued
Operations (28,131) 28,131 --
Cumulative effect of acctg change (770) 770 --
Net Income (Loss) $(6,848) $25,588 $18,740
Earnings Per Share, Basic:
Earnings Per Share from Continuing
Operations $0.43 $(0.07) $0.36
Income (Loss) from Discontinued
Operations $(0.54) $0.54 $--
Cumulative effect of acctg change $(0.02) $0.02 $--
Net Income (Loss) Per Common Share $(0.13) $0.49 $0.36
Weighted Average Shares Outstanding 52,375 52,375
Earnings Per Share, Diluted:
Earnings Per Share from Continuing
Operations $0.43 $(0.07) $0.36
Income (Loss) from Discontinued
Operations $(0.54) $0.54 $--
Cumulative effect of acctg change $(0.02) $0.02 $--
Net Income (Loss) Per Common Share $(0.13) $0.49 $0.36
Weighted Average Shares Outstanding 52,375 52,375
(1) The non-GAAP pro forma net income results are a supplement to the
financial data provided that is based on generally accepted
accounting principles (GAAP). These non-GAAP pro forma results
reflect adjustments primarily to exclude from operating results the
financial statement information for business units that have been
identified for divestiture or disposal and as such are not viewed by
the company as part of the ongoing business and the removal of the
2003 one-time deferral of revenues resulting from the prior year's
revenue recognition adjustments to Catalina Health Resource. The
company believes this presentation provides useful information to
investors because it assists investors in better understanding the
company's operations for the period. It should be emphasized,
however, that these measurements are not a substitution for GAAP-based
financial statements.
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 and pharmaceutical manufacturers and retailers,
government and regulatory statutes, rules, regulations and policies, 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 outcome and impact of an ongoing
SEC investigation into certain of the company's prior fiscal years, and the
outcome and impact of the pending shareholder class action and derivative
lawsuits.
SOURCE Catalina Marketing Corporation
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Related links:
http://www.catalinamarketing.com
CONTACT:
Investor: Christopher W. Wolf, Chief
Financial Officer, +1-727-579-5218, or Joanne Freiberger, Vice
President, Finance, +1-727-579-5116, or Media: Rachel Keener,
Corporate Communications Manager, +1-727-579-5224, all of
Catalina Marketing Corporation
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