Catalina (NYSE:POS)
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Catalina Marketing Corporation Receives Response From SEC Staff
ST. PETERSBURG, Fla., March 18 /PRNewswire-FirstCall/ -- Catalina Marketing
Corporation today announced that it has received a response from the Office of
the Chief Accountant of the Securities and Exchange Commission (SEC) in
connection with a key element of the company's historical revenue recognition
methodology. Specifically, the Staff of the Office of the Chief Accountant
stated that it does not object to the company's historical revenue recognition
methodology for certain company transactions with consumer packaged goods
manufacturers governed by operating contracts with "exclusivity" provisions. As
a result, no adjustments to the financial statements related to the timing of
revenue recognition specifically related to exclusivity in the Catalina
Manufacturer Services division will be required.
As previously disclosed, Catalina's former independent auditor, Ernst & Young
LLP (E&Y), resigned as the company's auditor on August 20, 2003. In
correspondence to the SEC dated September 9, 2003, E&Y stated that there was a
"disagreement" between the company and E&Y relating to "the company's accounting
treatment with respect to certain exclusivity rights granted to customers for
the contractual periods of its arrangements." PricewaterhouseCoopers (PwC) was
retained as the company's independent auditor in October 2003 and, following a
review of the company's revenue recognition policies relating to these
exclusivity rights, concurred that the company's accounting treatment for these
rights is appropriate. Thereafter, the company contacted the Office of Chief
Accountant to seek its review and concurrence regarding the appropriate
accounting treatment for the exclusivity rights.
"We appreciate the SEC's timely response regarding this matter," stated
Christopher W. Wolf, executive vice president and chief financial officer. "We
are pleased to report that the audits are progressing and the favorable
resolution of this particular revenue recognition issue regarding exclusivity
rights will help expedite the process. The company's Audit Committee and
management are working with PwC to complete the audits. While the time required
to complete the audits cannot be determined, we look forward to sharing those
results with our investors as soon as possible."
As previously disclosed by the Company, at the time of E&Y's resignation, there
were several "reportable events" relating to other financial accounting matters
that hadbeen identified. The company is reviewing the accounting issues
underlying these other reportable events, and is addressing all such issues, as
appropriate, with PwC. Unlike the exclusivity issue review, which has been
completed, the review of the other four reportable events previously disclosed
is ongoing and thus the company is making no announcement at this time regarding
those items. Catalina Marketing can give no assurance that these remaining
"reportable events", or any other issues that arise as part of the audit of its
fiscal year ended March 31, 2003 and the re-audits of fiscal years 2002 and
2001, will not result in a restatement of its prior year financial statements.
The fact that the exclusivity issue was resolved favorably should not be
construed as an indication that the other reportable events or other items in
the audit will likewise be resolved favorably. Due to the ongoing review of
these matters and the status of these audits, previously filed financial
statements, including the associated audit opinions and review reports of the
company, should not be relied upon until the company files it annual report for
the year ended March 31, 2003 on Form 10-K.
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 manufacturers for the issuance of certain product coupons, 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 timing of completion of the
company's audits, the nature and extent of any changes to the company's audits
and reaudits, the outcome and impact of the ongoing SEC investigation, the
outcome of the resolution of the other reportable events disclosed in the
company's Form 8-K dated August 20, 2003, and the outcome and impact of the
pending shareholder class action.
DATASOURCE: Catalina Marketing Corporation
CONTACT: Investors, Christopher W. Wolf, Executive Vice President and
Chief Financial Officer, +1-727-579-5218, or Joanne Freiberger, Vice
President, Finance, +1-727-579-5116, or Media, Susan Gear,
Executive Director, Marketing, +1-727-579-5452, all ofCatalina Marketing
Web site: http://www.catalinamarketing.com/