POS Catalina Marketing Corp

Catalina Marketing Corporation (NYSE: POS) today reported financial results for its second quarter and first six months ended September 30, 2005. For the three months ended September 30, 2005, consolidated revenues were $102.8 million, compared with revenues of $102.4 million in the comparable period of fiscal year 2005. Consolidated net income for the second quarter was $19.7 million, or $0.40 per diluted share, compared with net income of $20.3 million, or $0.39 per diluted share, in the second quarter of fiscal year 2005. Second quarter results in fiscal year 2005 included $1.4 million of income from discontinued operations related to the operation and divesture of non-core businesses. The company reported consolidated income from continuing operations for the quarter ended September 30, 2005 of $19.7 million, or $0.40 per diluted share, compared with $18.9 million, or $0.36 per diluted share, for the quarter ended September 30, 2004. For the six-month period ended September 30, 2005, consolidated revenues were $194.6 million, compared with revenues of $197.8 million in the comparable period of fiscal year 2005. Consolidated net income for the first six months of fiscal year 2006 was $33.4 million, or $0.67 per diluted share, compared with net income of $31.2 million, or $0.60 per diluted share, in fiscal year 2005. First half results in fiscal year 2005 included a loss from discontinued operations of $1.0 million related to the operation and divestiture of non-core businesses. The company reported consolidated income from continuing operations for the six months ended September 30, 2005 of $33.4 million, or $0.67 per diluted share, compared with $32.2 million, or $0.62 per diluted share, for the six months ended September 30, 2004. "Second quarter earnings improved year-over-year, while revenues were comparable with the prior year as double digit growth in Catalina Health Resource and International were offset by a revenue decline at Catalina Marketing Services," chief executive officer, Dick Buell commented. "We remain focused on our long-term growth objectives as we continue to make steady progress with the introduction of new products and services and entry into new channels. The results of our efforts should begin to appear in CMS results during the fourth quarter of this fiscal year." Summary of Segment Results -0- *T ---------------------------------------------------------------------- Three Months Ended Three Months Ended September 30, 2005 September 30, 2004 (In millions) Revenues Income/(Loss) Revenues Income/(Loss) Catalina Marketing Services $ 60.6 $ 16.0 $ 66.1 $ 18.9 Catalina Health Resource 22.9 5.0 19.2 2.8 Catalina Marketing International 19.3 2.4 16.9 2.1 Corp / Eliminations 0.0 (3.7) 0.2 (4.9) --------------------------------------------- From Continuing Operations $ 102.8 $ 19.7 $ 102.4 $ 18.9 --------------------------------------------- Discontinued Operations $ - $ - $ - $ 1.4 --------------------------------------------- Consolidated $ 102.8 $ 19.7 $ 102.4 $ 20.3 ============================================= Three Months Ended September 30, 2005 Percent Change Revenues Income/(Loss) Catalina Marketing Services (8.3%) (15.1%) Catalina Health Resource 19.3% 78.8% Catalina Marketing International 14.0% 15.1% Corp / Eliminations (99.1%) (25.5%) ---------------------- From Continuing Operations 0.4% 4.7% ---------------------- Discontinued Operations - (100.0%) ---------------------- Consolidated 0.4% (2.6%) ====================== Six Months Ended Six Months Ended September 30, 2005 September 30, 2004 (In millions) Revenues Income/(Loss) Revenues Income/(Loss) Catalina Marketing Services $ 118.3 $ 30.8 $ 129.5 $ 35.0 Catalina Health Resource 41.4 7.8 37.1 3.8 Catalina Marketing International 34.9 3.1 31.1 2.9 Corp / Eliminations 0.0 (8.3) 0.1 (9.5) ------------------------------------------ From Continuing Operations $ 194.6 $ 33.4 $ 197.8 $ 32.2 ------------------------------------------ Discontinued Operations $ - $ - $ - $ (1.0) ------------------------------------------ Consolidated $ 194.6 $ 33.4 $ 197.8 $ 31.2 ========================================== Six Months Ended September 30, 2005 Percent Change Revenues Income/(Loss) Catalina Marketing Services (8.6%) (12.0%) Catalina Health Resource 11.8% 101.9% Catalina Marketing International 12.0% 8.4% Corp / Eliminations (92.4%) (12.8%) ---------------------- From Continuing Operations (1.6%) 3.7% ---------------------- Discontinued Operations - 100.0% ---------------------- Consolidated (1.6%) 7.1% ====================== ---------------------------------------------------------------------- *T Stock Repurchases During the second quarter, the company repurchased 1,171,900 shares of its common stock for a total of $28.3 million, at an average price of $24.13 per share. Since the beginning of the fiscal year, the company has purchased 2,865,200 shares of its common stock for a total of $70.1 million, at an average price of $24.47 per share. The company currently has authorization to repurchase an additional $85.7 million of common stock under the August 2005 Board of Directors authorization. Webcast & Investor Conference Scheduled The company will host a webcast on Thursday, October 27, 2005 at 8:00 a.m. EDT to discuss its financial results for its fiscal year 2006 second quarter. The webcast may be accessed at http://www.corporate-ir.net/ireye/ir_site.zhtml?ticker=POS&script=1000 and will be available for replay from Thursday, October 27, 2005 through Thursday, November 24, 2005. Rick Frier, chief financial officer, will also present at the First Analysis Investment Conference at the New York Palace Hotel in New York City on November 17, 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 -0- *T Catalina Marketing Corporation Selected Operating Data (in thousands, except per share amounts) ---------------------------------------------------------------------- Periods Ended September 30 Three Months Six Months 2005 2004 2005 2004 Revenues $102,756 $102,372 $194,610 $197,774 Direct Operating Expenses 32,318 32,015 63,002 65,803 Selling, General and Administrative 29,622 28,517 59,423 57,340 Depreciation and Amortization 8,722 10,604 18,227 22,158 -------- -------- -------- -------- Income from Operations 32,094 31,236 53,958 52,473 Other Income (Expense) (242) 125 (69) (267) Provision for Income Taxes 12,104 12,508 20,478 19,990 -------- -------- -------- -------- Income from Continuing Operations 19,748 18,853 33,411 32,216 Income (Loss) from Discontinued Operations - 1,426 - (1,011) --------- --------- --------- --------- Net Income $ 19,748 $ 20,279 $ 33,411 $ 31,205 ======== ======== ======== ======== ---------------------------------------------------------------------- Earnings Per Share, Basic: Earnings Per Share from Continuing Operations $ 0.41 $ 0.36 $ 0.67 $ 0.62 Income (Loss) from Discontinued Operations $ - $ 0.03 $ - $ (0.02) -------- -------- -------- -------- Net Income Per Common Share $ 0.41 $ 0.39 $ 0.67 $ 0.60 Weighted Average Shares Outstanding 48,709 52,231 49,625 52,233 ---------------------------------------------------------------------- Earnings Per Share, Diluted: Earnings Per Share from Continuing Operations $ 0.40 $ 0.36 $ 0.67 $ 0.62 Income (Loss) from Discontinued Operations $ - $ 0.03 $ - $ (0.02) -------- -------- -------- -------- Net Income Per Common Share $ 0.40 $ 0.39 $ 0.67 $ 0.60 Weighted Average Shares Outstanding 48,996 52,311 49,927 52,269 ------------------------------- --------- --------- --------- -------- Catalina Marketing Corporation Selected Other Data (in thousands, except store data) ---------------------------------------------------------------------- September 30 September 30 2005 2004 Selected Balance Sheet and Cash Flow Data (in thousands): Cash $ 22,731 $ 97,345 Debt 34,779 65,504 Stockholders' Equity 146,442 200,126 Cash Flows from Operating Activities Quarter / YTD 17,575 / 31,762 40,604 / 42,470 Capital Expenditures Quarter / YTD 16,110 / 24,594 4,034 / 6,175 Catalina Marketing Services: Number of Stores at Quarter End 16,693 17,644 Net Stores (Deinstalled) Installed During Quarter / YTD (888) / (916) 37 / 40 Promotions Printed During Quarter / YTD (in millions) 744 / 1,457 846 / 1,584 Weekly Shopper Reach at Quarter End (in millions) 211 216 Catalina Health Resource: Number of Stores at Quarter End 12,404 12,081 Net Stores Installed (Deinstalled) During Quarter / YTD (47) / (19) 72 / 152 Catalina Marketing International: Number of Stores at Quarter End 6,699 5,700 Net Stores Installed During Quarter / YTD 696 / 792 102 / 155 Promotions Printed During Quarter / YTD (in millions) 279 / 488 220 / 412 Weekly Shopper Reach at Quarter End (in millions) 72 63 ---------------------------------------------------------------------- *T Based in St. Petersburg, FL, Catalina Marketing Corporation (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 provided 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 consumer packaged goods and pharmaceutical manufacturers and retailers and competition to provide marketing services to these customers, mergers and consolidations in the consumer packaged goods and retailer industries, federal, state and international government and regulatory statutes, rules, regulations and policies including privacy and labeling, the effect of economic conditions and seasonal variations, actual promotional activities and programs with the company's customers, the pace, cost and challenges associated with the installation of the company's store network and changes in the status of contractual relations with retailers, the success of new services and businesses and the pace of their implementation including the entry into new retail channels, the company's ability to maintain favorable relationships with its clients and retailers, 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.