Catalina Marketing Reports Financial Results for Second Quarter of
Fiscal 2005 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. DATASOURCE: Catalina
Marketing Corporation 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 Web site: http://www.catalinamarketing.com/
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