Catalina Marketing Announces Financial Results for the Quarter Ended March 31, 2007

  
    
  
  
    
      Catalina Marketing Corporation (NYSE:POS):
    
    
      
        EPS of $0.37 per diluted share for the quarter ended March 31, 2007 
        included the effect of FAS123R, which was not reflected in Q1 of the 
        prior year; excluding this charge, EPS was $0.44 per diluted share, a 
        decrease of $0.07 compared with Q1 last year
      
      
        One time costs related to the pending sale of the company totaled $1.4 
        million, or approximately $0.02 per diluted share
      
      
        Revenues were $123.8 million for the quarter ended March 31, 2007, a 
        reduction of $2.1 million compared to an outstanding quarter in all 
        business units last year
      
      
        Over 90% of the total 140,000 color printers are currently installed 
        in domestic grocery stores
      
    
    
      Catalina Marketing Corporation (NYSE:POS) today reported financial 
      results for the first quarter ended March 31, 2007.
    
    
      For the quarter ended March 31, 2007, consolidated revenues were $123.8 
      million compared with revenues of $125.9 million in the same period of 
      the prior calendar year. Consolidated net income, which reflected 
      increased spending associated with the color printer initiative, 
      stock-based compensation expenses and one-time costs related to the 
      pending sale of the company, was $17.5 million, or $0.37 per 
      diluted share, compared with net income of $24.0 million, or $0.51 per 
      diluted share, in the same quarter of the prior year. Excluding 
      stock-based compensation expense of $3.2 million, net of related income 
      taxes, net income for the quarter ended March 31, 2007 was $20.7 
      million, or $0.44 per diluted share. As previously reported, the company 
      adopted SFAS No. 123R, Share-Based Payment, effective April 1, 
      2006, resulting in incremental expense recorded in the current year 
      quarter that was not reflected in prior year quarter.
    
    
      Catalina Marketing CEO Dick Buell said, “The 
      results of the quarter are strong in spite of a challenging comparison 
      to an outstanding quarter last year across all of our businesses. The 
      impressive cost controls that were realized in the quarter reflect the 
      ongoing initiatives that we adopted in response to these known 
      challenges. We continue to make significant investments in our color 
      printer initiative and we are pleased with the progress being made with 
      over 90% of color printers now installed in our targeted domestic 
      grocery stores.”
    
    
      
        
          
            Segment Results:
          
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
          Three Months Ended March 31,
        
      
      
        
        
        
          2007

          
            (GAAP)
          
        
        
        
        
          FAS 123R

          
            Expense
          
        
        
        
        
          2007

          
            (Pro forma) (1)
          
        
        
        
        
          2006 
        
        
        
        
          %

          
            Change 
          
        
      
      
        
        
        
          (in thousands)
        
      
      
        
          Revenues
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Catalina Marketing Services
        
        
          $ 77,633 
        
        
        
        
          $ - 
        
        
        
        
          $ 77,633 
        
        
        
        
          $ 78,115 
        
        
        
        
          -0.6%
        
      
      
        
          Catalina Health Resource
        
        
          26,742 
        
        
        
        
          - 
        
        
        
        
          26,742 
        
        
        
        
          27,026 
        
        
        
        
          -1.1%
        
      
      
        
          Catalina Marketing International
        
        
          19,426 
        
        
        
        
          - 
        
        
        
        
          19,426 
        
        
        
        
          20,772 
        
        
        
        
          -6.5%
        
      
      
        
          Corporate and eliminations
        
        
          - 
        
        
        
        
          - 
        
        
        
        
          - 
        
        
        
        
          - 
        
        
        
        
          NM 
        
      
      
        
          Total Revenues
        
        
          $123,801 
        
        
        
        
          $ - 
        
        
        
        
          $ 123,801 
        
        
        
        
          $125,913 
        
        
        
        
          -1.7%
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Income (Loss) from Operations
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Catalina Marketing Services
        
        
          $ 29,602 
        
        
        
        
          $ 879 
        
        
        
        
          $ 30,481 
        
        
        
        
          $ 38,022 
        
        
        
        
          -19.8%
        
      
      
        
          Catalina Health Resource
        
        
          10,315 
        
        
        
        
          349 
        
        
        
        
          10,664 
        
        
        
        
          9,300 
        
        
        
        
          14.7%
        
      
      
        
          Catalina Marketing International
        
        
          3,296 
        
        
        
        
          793 
        
        
        
        
          4,089 
        
        
        
        
          3,670 
        
        
        
        
          11.4%
        
      
      
        
          Corporate
        
        
          (13,756)
        
        
        
        
          2,118 
        
        
        
        
          (11,638)
        
        
        
        
          (14,036)
        
        
        
        
          17.1%
        
      
      
        
          Total Income from Operations
        
        
          $ 29,457 
        
        
        
        
          $ 4,139 
        
        
        
        
          $ 33,596 
        
        
        
        
          $ 36,956 
        
        
        
        
          -9.1%
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          NM = Not Meaningful
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          
             (1) The non-GAAP pro forma results 
            are a supplement to the financial data based on generally accepted 
            accounting principles (GAAP). These non-GAAP pro forma amounts 
            exclude the expense for stock-based compensation recognized under 
            the provisions of SFAS No. 123R, Share-Based Payment. The 
            company believes this presentation provides useful information to 
            investors because it assists investors in better understanding the 
            company's operations for the current quarter compared to the prior 
            comparable quarter as there was no comparable expense under then 
            existing accounting requirements for the quarter ended March 31, 
            2006. It should be emphasized, however, that these measurements 
            are not a substitution for GAAP-based financial statements.
          
        
      
    
    
      Webcast and Investor Conference Scheduled:
    
    
      The company will host a webcast on Tuesday, April 24, 2007, at 10:00 
      a.m. EDT to discuss its financial results for its quarter ended March 
      31, 2007. The webcast may be accessed at http://phx.corporate-ir.net/phoenix.zhtml?c=72727&p=irol-calendar 
      and will be available for replay from Tuesday, April 24, 2007 
      through Thursday, May 24, 2007.
    
    
      
        
          
            Catalina Marketing Corporation
          
        
      
      
        
          Selected Operating Data
        
      
      
        
          (In thousands, except per share data)
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
          Three Months Ended
        
      
      
        
        
        
        
        
          March 31,
        
      
      
        
        
        
        
        
          2007

          
            (GAAP)
          
        
        
        
        
          FAS 123R

          
            Expense
          
        
        
        
        
          2007

          
            (Pro forma) (1)
          
        
        
        
        
          2006 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Revenues
        
        
        
        
          $ 123,801 
        
        
        
        
          $ - 
        
        
        
        
          $ 123,801 
        
        
        
        
          $ 125,913 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Direct operating expenses
        
        
        
        
          42,696 
        
        
        
        
          (639)
        
        
        
        
          42,057 
        
        
        
        
          38,829 
        
      
      
        
          Selling, general and administrative
        
        
        
        
          40,091 
        
        
        
        
          (3,500)
        
        
        
        
          36,591 
        
        
        
        
          40,822 
        
      
      
        
          Depreciation and amortization
        
        
        
        
          11,557 
        
        
        
        
          - 
        
        
        
        
          11,557 
        
        
        
        
          9,306 
        
      
      
        
          Total costs and expenses
        
        
        
        
          94,344 
        
        
        
        
          (4,139)
        
        
        
        
          90,205 
        
        
        
        
          88,957 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Income from operations
        
        
        
        
          29,457 
        
        
        
        
          4,139 
        
        
        
        
          33,596 
        
        
        
        
          36,956 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Other income (expense)
        
        
        
        
          (490)
        
        
        
        
          - 
        
        
        
        
          (490)
        
        
        
        
          (60)
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Provision for income taxes
        
        
        
        
          11,471 
        
        
        
        
          910 
        
        
        
        
          12,381 
        
        
        
        
          12,884 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net Income
        
        
        
        
          $ 17,496 
        
        
        
        
          $ 3,229 
        
        
        
        
          $ 20,725 
        
        
        
        
          $ 24,012 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Earnings per share – basic
        
        
        
        
          $ 0.38 
        
        
        
        
          $ 0.07 
        
        
        
        
          $ 0.45 
        
        
        
        
          $ 0.51 
        
      
      
        
          Earnings per share – diluted
        
        
        
        
          $ 0.37 
        
        
        
        
          $ 0.07 
        
        
        
        
          $ 0.44 
        
        
        
        
          $ 0.51 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Weighted average shares outstanding - basic
        
        
        
        
          46,089 
        
        
        
        
          46,089 
        
        
        
        
          46,089 
        
        
        
        
          47,225 
        
      
      
        
          Weighted average shares outstanding - diluted
        
        
        
        
          46,756 
        
        
        
        
          46,756 
        
        
        
        
          46,756 
        
        
        
        
          47,429 
        
      
    
    
      
        
        
        
        
        
        
        
           
        
      
      
        
          
            Catalina Marketing Corporation
          
        
      
      
        
          
            Selected Other Data
          
        
      
      
        
          (in thousands, except store data)
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
        
        
          March 31,

          
            2007
          
        
        
        
        
          March 31,

          
            2006
          
        
      
      
        
          Selected Balance Sheet and Cash Flow Data:
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Cash
        
        
          $ 59,208 
        
        
        
        
          $ 28,117 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Debt
        
        
          131,073 
        
        
        
        
          61,856 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Cash Flows from Operating Activities
        
        
          7,951 
        
        
        
        
          39,649 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Capital Expenditures
        
        
          22,471 
        
        
        
        
          20,758 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Net Borrowings on LT Debt
        
        
          3,000 
        
        
        
        
          15,240 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Repurchase of Common Stock
        
        
          - 
        
        
        
        
          39,139 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Catalina Marketing Services:
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Number of Stores
        
        
          22,362 
        
        
        
        
          21,048 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Net Stores Installed - QTD
        
        
          290 
        
        
        
        
          3,260 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Promotions Printed (in millions) - QTD
        
        
          801 
        
        
        
        
          948 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Weekly Shopper Reach at Quarter End (in millions)
        
        
          248 
        
        
        
        
          232 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Catalina Health Resource:
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Number of Stores
        
        
          13,307 
        
        
        
        
          12,780 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Net Stores Installed - QTD
        
        
          101 
        
        
        
        
          159 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          % of Revenue Producing Patient Communications
        
        
          30%
        
        
        
        
          31%
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Catalina Marketing International:
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Number of Stores
        
        
          7,956 
        
        
        
        
          7,316 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          
            Net Stores Installed - QTD
          
        
        
          
            15 
          
        
        
        
        
          354 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Promotions Printed (in millions) - QTD
        
        
          304 
        
        
        
        
          412 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Weekly Shopper Reach at Quarter End (in millions)
        
        
          82 
        
        
        
        
          86 
        
      
    
    
      About Catalina Marketing Corporation
    
    
      Based in St. Petersburg, FL, Catalina Marketing Corporation (www.catalinamarketing.com) 
      was founded over 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.
    
    
      Cautionary Statement
    
    
      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, potential complications, hardware and software issues and 
      delays related to the schedule, installation and operation of color 
      printers, the effectiveness of color printers to increase sales and 
      redemption rates or provide a more effective advertising medium, 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 including as it relates to the installation of color printers in 
      existing and future retail channels, the acceptance by the company's 
      manufacturer clients and retailers of color printers and related new and 
      additional terms and conditions, the success of new services and 
      businesses and the pace of their implementation, the company's ability 
      to maintain favorable client and retailer relationships, and the outcome 
      and impact of the pending shareholder class action and derivative 
      lawsuits.