Catalina Marketing Reports Financial Results For the Fourth Quarter
of Fiscal Year 2005 ST. PETERSBURG, Fla., May 18
/PRNewswire-FirstCall/ -- Catalina Marketing Corporation (NYSE:POS)
today reported financial results for its fourth quarter and fiscal
year ended March 31, 2005. For the three months ended March 31,
2005, consolidated revenues were $112.0 million, compared with
revenues of $119.6 million in the comparable period last year.
Consolidated net income for the fourth quarter was $15.3 million,
or $0.29 per diluted share, compared with a net loss of $8.8
million, or $0.17 per diluted share, in the fourth quarter of
fiscal year 2004. Fourth quarter results in fiscal year 2005
included $0.7 million in losses from discontinued operations due
principally to losses from the disposal of non-core businesses,
compared with $32.5 million of losses from discontinued operations,
due principally from goodwill impairment charges, recognized in the
fourth quarter of fiscal year 2004. The company reported
consolidated income from continuing operations for the quarter
ended March 31, 2005 of $16.0 million, or $0.30 per diluted share,
compared with $23.7 million, or $0.44 per diluted share, for the
quarter ended March 31, 2004. "The results in the fourth quarter
were consistent with our expectations," said Dick Buell, chief
executive officer of Catalina Marketing. "The company incurred
costs in the fourth quarter of fiscal 2005 that were not
experienced in fiscal 2004 including costs related to growth
initiatives, incentive compensation and compliance with
Sarbanes-Oxley. As discussed on our last earnings call, the
company's investment in growth initiatives reflects a commitment to
drive future earnings growth." Revenue in the fourth quarter of
fiscal year 2005 was negatively influenced by the sale of the
loyalty card business, which occurred in March 2004, and the pull
back of a large manufacturer client. The combined revenue impact of
these two issues exceeded $8 million in the quarter which, in turn,
negatively impacted gross profit. Full Year Consolidated Results
For the twelve months ended March 31, 2005, consolidated revenues
were $410.1 million, compared with revenues of $408.6 million last
year. Consolidated net income for the fiscal year was $65.5
million, or $1.25 per diluted share, compared with a net loss of
$19.3 million, or $0.37 per diluted share, in fiscal year 2004.
Results in fiscal year 2005 included $3.1 million in losses from
discontinued operations due principally to losses from the
operations of non-core businesses, compared with $78.9 million of
losses from discontinued operations, due principally from goodwill
impairment charges, recognized in fiscal year 2004. The company
reported consolidated income from continuing operations for the
year ended March 31, 2005 of $68.6 million, or $1.31 per diluted
share, compared with $60.4 million, or $1.15 per diluted share, for
the year ended March 31, 2004. "We are pleased with our financial,
strategic and organizational results for fiscal 2005. In addition
to the financial outcome, our focus for 2005 was to establish a
solid foundation for the future," stated Dick Buell, Catalina's
chief executive officer. "We repurchased a record $44 million of
Catalina stock during the fourth quarter. In the second quarter,
for the first time in the history of the company, we declared an
annual dividend to shareholders. The company renewed the focus on
its core businesses, achieved its goal of divesting the four
non-strategic businesses, and strengthened the management team with
the hiring and promotion of key individuals. Catalina Marketing's
financial, strategic and organizational achievements in fiscal 2005
have created a solid foundation for future innovation and growth."
During the third fiscal quarter ended December 31, 2004, the
company received a favorable ruling related to a state sales tax
assessment, and as a result, reversed into income a $4.4 million
accrued liability, which had been recognized as expense in prior
periods. The reversal of this liability resulted in a favorable
impact, net of related income taxes, of approximately $0.05 per
diluted share, in both the third quarter and the full fiscal year
2005. Pro Forma Non-GAAP Adjustments The pro forma non-GAAP basis
results presented in this news release and attached tables exclude
the effect of Catalina Health Resource revenues recognized in
fiscal year 2004 that had been deferred from prior fiscal years due
to revenue recognition adjustments. Fourth quarter fiscal 2005
consolidated revenues of $112.0 million reflect a decrease of 4.6%
compared with non-GAAP pro forma revenues of $117.4 million for the
same period last year. For the three months ended March 31, 2005,
consolidated income from continuing operations was $16.0 million,
or $0.30 per diluted share, compared with pro forma non-GAAP income
from continuing operations of $22.4 million, or $0.43 per diluted
share, for the same period last year. Consolidated revenues of
$410.1 million for the twelve months ended March 31, 2005 reflect
an increase of 3.3% compared with pro forma non-GAAP revenues of
$397.1 million for the same period last year. Consolidated income
from continuing operations was $68.6 million, or $1.31 per diluted
share, for the twelve months ended March 31, 2005, compared with
pro forma non-GAAP income from continuing operations of $53.5
million, or $1.02 per diluted share, for the same period last year.
Summary of Segment Results Three Months Ended Three Months Ended
March 31, 2005 March 31, 2004 (In thousands) Revenues Income/
Revenues Income/ (Loss) (Loss) Catalina Marketing Services $74,641
$20,660 $82,101 $22,820 Catalina Health Resource (1) 19,324 1,801
20,392 1,677 International 17,974 2,911 15,360 1,177 Corp /
Eliminations 30 (9,395) (430) (3,263) Total Pro Forma (1) $111,969
$15,977 $117,423 $22,411 Catalina Health Resource Adj.(1) -- --
2,137 1,327 From Continuing Operations - GAAP $111,969 $15,977
$119,560 $23,738 Discontinued Operations $-- $(701) $-- $(32,514)
Consolidated GAAP $111,969 $15,276 $119,560 $(8,776) Twelve Months
Ended Twelve Months Ended March 31, 2005 March 31, 2004 (In
thousands) Revenues Income/ Revenues Income/ (Loss) (Loss) Catalina
Marketing Services $269,612 $73,879 $282,128 $72,724 Catalina
Health Resource (1) 76,167 9,356 66,207 396 International 64,116
7,395 49,580 462 Corp / Eliminations 167 (22,034) (841) (20,062)
Total Pro Forma (1) $410,062 $68,596 $397,074 $53,520 Catalina
Health Resource Adj.(1) -- -- 11,558 6,877 From Continuing
Operations - GAAP $410,062 $68,596 $408,632 $60,397 Discontinued
Operations $-- $(3,144) $-- $(78,900) Cumulative Effect of Acctg
Change $-- $-- $-- $(770) Consolidated GAAP $410,062 $65,452
$408,632 $(19,273) (1) The non-GAAP pro forma revenue and net
income results are a supplement to the financial data that is based
on generally accepted accounting principles (GAAP). The non-GAAP
pro forma results reflect adjustments to exclude non-recurring
revenue resulting from the one-time deferral of CHR revenues in
prior periods (and the related tax effect) resulting from revenue
recognition adjustments in such prior years. The company believes
this presentation provides useful information to investors because
it assists investors in better understanding the company's
operations for comparability with recurring results for the future.
It should be emphasized, however, that these measurements are not a
substitution for GAAP-based financial statements. Discontinued
Operations During the fiscal year ended March 31, 2005, the company
completed the divestiture of its remaining non-strategic business
units. Research Solutions was divested during the third quarter and
Direct Marketing Services and Japan Billboard were both sold in the
second quarter of fiscal year 2005. The aggregated results of these
dispositions are reported in the income statement as "Discontinued
Operations." Stock Repurchases During the fourth quarter, the
company repurchased 1,652,100 shares of its common stock for a
total of $44.2 million, at an average price of $26.74 per share.
The company currently has authorization to repurchase an additional
$55.8 million of common stock under the September 2004 Board of
Directors' authorization. Catalina Marketing expects to file its
Annual Report on Form 10-K for the fiscal year ended March 31,
2005, with the Securities and Exchange Commission on or before June
14, 2005. Investors are urged to review the Form 10-K for a
detailed discussion of the company's financial results and business
descriptions. Webcast and Investor Conferences Scheduled The
company will host a webcast on Wednesday, May 18, 2005, at 10:00
a.m. EDT 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
=1056457 , and will be available for replay from Wednesday, May 18,
2005 through Thursday, June 16, 2005. The Catalina 2005 investor
conference will be held in Tampa, Florida on May 25 and May 26,
2005 and will address key accomplishments for fiscal year 2005 as
well as the company's future growth initiatives. The audio portion
of the investor conference, and the graphics presented, will be
webcast live over the Internet. The webcast will be accessible at
http://www.wsw.com/webcast/catalina . Dick Buell, chief executive
officer, will also present at Deutsche Bank's Media/Telecom
Conference at The Pierre Hotel in New York City on June 6, 2005.
The presentation will be webcast and will be accessible through the
Investor Relations Calendar of Events section of the company's web
site at http://www.catalinamarketing.com/ . Catalina Marketing
Corporation Selected Financial Data (in thousands, except per share
amounts) Periods Ended March 31 Three Months Twelve Months 2005
2004 2005 2004 Revenues $111,969 $119,560 $410,062 $408,632 Direct
Operating Expenses 37,446 40,676 129,449 140,401 Selling, General
and Administrative 40,660 32,377 129,365 124,856 Depreciation and
Amortization 10,086 11,739 42,446 45,243 Income from Operations
23,777 34,768 108,802 98,132 Other Income (Expense) 1,462 (8) 1,450
(536) Provision for Income Taxes 9,262 11,022 41,656 37,199 Income
from Continuing Operations 15,977 23,738 68,596 60,397 Gain (Loss)
from Discontinued Operations (270) (32,514) (4,272) (78,900) Gain
(Loss) from Disposition (431) -- 1,128 -- Income (Loss) from
Discontinued Operations (701) (32,514) (3,144) (78,900) Cumulative
Effect of Change in Accounting -- -- -- (770) Net Income (Loss)
$15,276 $(8,776) $65,452 $(19,273) Earnings Per Share, Basic:
Earnings Per Share from Continuing Operations $0.30 $0.44 $1.31
$1.15 Income (Loss) from Discontinued Operations $(0.01) $(0.61)
$(0.06) $(1.50) Cumulative Effect of Change in Accounting $-- $--
$-- $(0.02) Net Income (Loss) Per Common Share $0.29 $(0.17) $1.25
$(0.37) Weighted Average Shares Outstanding 51,740 52,229 52,167
52,304 Earnings Per Share, Diluted: Earnings Per Share from
Continuing Operations $0.30 $0.44 $1.31 $1.15 Income (Loss) from
Discontinued Operations $(0.01) $(0.61) $(0.06) $(1.50) Cumulative
Effect of Change in Accounting $-- $-- $-- $(0.02) Net Income
(Loss) Per Common Share $0.29 $(0.17) $1.25 $(0.37) Weighted
Average Shares Outstanding 52,180 52,264 52,356 52,324 Catalina
Marketing Corporation Selected Other Data (in thousands, except
store data) March 31 March 31 2005 2004 Balance Sheet and Cash Flow
(in thousands): Cash $116,191 $72,704 Debt $64,623 $66,924
Stockholders' Equity $196,374 $184,662 Cash Flows from Operating
Activities Quarter / YTD $46,230 / $117,991 $51,838 / $138,133
Capital Expenditures Quarter / YTD $9,594 / $22,527 $4,827 /
$26,427 Catalina Marketing Services: Number of Stores at Quarter
End 17,609 17,604 Net Stores (Deinstalled) Installed During Quarter
/ YTD (103) / 5 22 / 106 Promotions Printed During Quarter / YTD
(in millions) 881 / 3,279 878 / 3,118 Weekly Shopper Reach at
Quarter End (in millions) 218 209 Catalina Health Resource: Number
of Stores at Quarter End 12,423 11,929 Net Stores Installed
(Deinstalled) During Quarter / YTD 43 / 494 (3,884) / (5,898)
Catalina Marketing International: Number of Stores at Quarter End
5,907 5,545 Net Stores Installed During Quarter / YTD 166 / 362 287
/ 1028 Promotions Printed During Quarter / YTD (in millions) 248 /
851 230 / 757 Weekly Shopper Reach at Quarter End (in millions) 66
65 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. DATASOURCE: Catalina
Marketing Corporation CONTACT: Investors, Rick Frier, Executive
Vice President, Finance, +1-727-579-5147, or Joanne Freiberger,
Vice President, Finance, +1-727-579-5116; or Media, Michelle Bauer,
Executive Director, Marketing Communications, +1-727-579-5129, all
of Catalina Marketing Corporation Web site:
http://www.catalinamarketing.com/
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