Catalina (NYSE:POS)
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Catalina Marketing Corporation (NYSE:POS) today
reported financial results for its third quarter and first nine months
ended December 31, 2005.
For the three months ended December 31, 2005, consolidated
revenues were $97.2 million, compared with revenues of $100.3 million
in the same period of fiscal 2005. Consolidated net income for the
third quarter was $14.2 million, or $0.29 per diluted share, compared
with net income of $19.0 million, or $0.36 per diluted share, in the
third quarter of fiscal 2005. Third quarter results in fiscal 2005
included $1.4 million in losses from discontinued operations due
principally to losses from the disposal of non-core businesses.
The company reported consolidated income from continuing
operations for the quarter ended December 31, 2005 of $14.2 million,
or $0.29 per diluted share, compared with $20.4 million, or
$0.39 per diluted share, for the quarter ended December 31, 2004.
During the 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 the third quarter of
fiscal 2005.
Nine-Month Consolidated Results
For the nine-month period ended December 31, 2005, consolidated
revenues were $291.8 million, compared with revenues of $298.1 million
in the comparable period of fiscal 2005. Consolidated net income for
the first nine months of fiscal 2006 was $47.6 million, or
$0.96 per diluted share, compared with net income of $50.2 million,
or $0.96 per diluted share, in fiscal 2005. Results in the first
nine months of fiscal 2005 included a loss from discontinued
operations of $2.4 million related to the operation and divestiture
of non-core businesses plus the positive impact on income from the
reversal of $4.4 million of sales tax reserves.
The company reported consolidated income from continuing
operations for the nine months ended December 31, 2005 of
$47.6 million, or $0.96 per diluted share, compared with
$52.6 million, or $1.01 per diluted share, for the nine months ended
December 31, 2004.
"Third quarter revenues were affected by market conditions as
Catalina Marketing Services experienced specific challenges due to
reduced spending by certain manufacturer clients at the end of their
calendar year," chief executive officer, Dick Buell, commented. "The
third quarter decrease in CMS' revenues was partially offset by
another quarter of solid revenue growth in both Catalina Marketing
International and Catalina Health Resource. Based on our recent strong
manufacturer contract renewals, coupled with new, exceptional retailer
network renewals, we expect CMS to experience improvement in the
fourth quarter of this fiscal year."
Buell continued, "As we begin preparing for fiscal year 2007,
capital and resource investments will increase to strengthen the
foundation for Catalina's important long-term business growth. The
organization is focused on the additional investments which will
affect our income statement and balance sheet as we roll out our
recently announced full color and full graphics printing capabilities.
While the overall expected return on this project is financially
attractive, we believe that the timing of these strategic investments
will precede the related anticipated revenue growth and will impact
operating income next fiscal year. We remain both committed to and
focused on our long-term revenue and profit growth objectives through
the introduction of new products and services, entry into new channels
as evidenced by the ongoing installation of Walgreens and Kmart
stores, and expansion into new geographies."
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*T
Summary of Segment Results
Three Months Ended Three Months Ended
December 31, 2005 December 31, 2004
(In millions) Revenues Income/(Loss) Revenues Income/(Loss)
Catalina Marketing
Services $58.0 $14.3 $65.5 $18.2
Catalina Health Resource 21.1 3.1 19.8 3.7
Catalina Marketing
International 18.1 1.9 15.0 1.6
Corp / Eliminations 0.0 (5.1) 0.0 (3.1)
-------- ------------- -------- -------------
From Continuing
Operations $97.2 $14.2 $100.3 $20.4
-------- ------------- -------- -------------
Discontinued Operations $ - $ - $ - $(1.4)
-------- ------------- -------- -------------
Consolidated $97.2 $14.2 $100.3 $19.0
======== ============= ======== =============
Nine Months Ended Nine Months Ended
December 31, 2005 December 31, 2004
(In millions) Revenues Income/(Loss) Revenues Income/(Loss)
Catalina Marketing
Services $176.3 $45.1 $195.0 $53.2
Catalina Health Resource 62.5 10.9 56.9 7.5
Catalina Marketing
International 53.0 5.0 46.1 4.5
Corp / Eliminations 0.0 (13.4) 0.1 (12.6)
-------- ------------- -------- -------------
From Continuing
Operations $291.8 $47.6 $298.1 $52.6
-------- ------------- -------- -------------
Discontinued Operations $ - $ - $ - $(2.4)
-------- ------------- -------- -------------
Consolidated $291.8 $47.6 $298.1 $50.2
======== ============= ======== =============
Three Months Ended
December 31, 2005
(In millions) Percent Change
Revenues Income/(Loss)
Catalina Marketing Services (11.5%) (21.7%)
Catalina Health Resource 6.5% (15.7%)
Catalina Marketing International 21.0% 17.6%
Corp / Eliminations (100.0%) (63.4%)
-------- -------------
From Continuing Operations (3.1%) (30.4%)
-------- -------------
Discontinued Operations - 100.0%
-------- -------------
Consolidated (3.1%) (25.2%)
======== =============
Nine Months Ended
December 31, 2005
(In millions) Percent Change
Revenues Income/(Loss)
Catalina Marketing Services (9.6%) (15.3%)
Catalina Health Resource 10.0% 44.2%
Catalina Marketing International 15.0% 11.7%
Corp / Eliminations (93.6%) (5.9%)
-------- -------------
From Continuing Operations (2.1%) (9.5%)
-------- -------------
Discontinued Operations - 100.0%
-------- -------------
Consolidated (2.1%) (5.1%)
======== =============
*T
Stock Repurchases
During the third quarter, the company repurchased 192,400 shares
of its common stock for a total of $5.1 million, at an average price
of $26.33 per share. Since the beginning of the fiscal year, the
company has purchased 3,057,600 shares of its common stock for a total
of $75.2 million, at an average price of $24.59 per share. The company
currently has authority to repurchase an additional $80.6 million of
common stock under the August 2005 Board of Directors authorization.
Webcast and Investor Conferences Scheduled
The company will host a webcast on Thursday, January 26, 2006 at
10:00 a.m. EST to discuss its financial results for its fiscal year
2006 third 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, January 26, 2006
through Monday, February 27, 2006.
Dick Buell, chief executive officer, will present at the Bear
Stearns Investment Conference in Palm Beach, Florida on Monday,
February 27, 2006. Mr. Buell will also present at Baird's 2006
Business Solutions Conference in Boston on Wednesday, March 1, 2006.
The presentations will be webcast and will be accessible through the
Investor Relations Calendar of Events section of the company's web
site (http://www.catalinamarketing.com).
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*T
Catalina Marketing Corporation
Selected Operating Data
(in thousands, except per share amounts)
Periods Ended December 31 Three Months Nine Months
2005 2004 2005 2004
Revenues $97,223 $100,319 $291,833 $298,093
Direct Operating Expenses 33,643 26,200 96,646 92,003
Selling, General and
Administrative 31,853 31,365 91,276 88,705
Depreciation and Amortization 8,453 10,202 26,680 32,360
-------- --------- --------- ---------
Income from Operations 23,274 32,552 77,231 85,025
Other Income (Expense) (383) 255 (451) (12)
Provision for Income Taxes 8,698 12,404 29,176 32,394
-------- --------- --------- ---------
Income from Continuing
Operations 14,193 20,403 47,604 52,619
Gain (Loss) from Discontinued
Operations - 292 - (4,002)
Gain (Loss) from Disposition - (1,724) - 1,559
-------- --------- --------- ---------
Income (Loss) from Discontinued
Operations - (1,432) - (2,443)
-------- --------- --------- ---------
Net Income $14,193 $18,971 $47,604 $50,176
======== ========= ========= =========
Earnings Per Share, Basic:
Earnings Per Share from
Continuing Operations $0.30 $0.39 $0.97 $1.01
Income (Loss) from Discontinued
Operations $ - $(0.03) $ - $(0.05)
-------- --------- --------- ---------
Net Income Per Common Share $0.30 $0.36 $0.97 $0.96
Weighted Average Shares
Outstanding 48,021 52,300 49,088 52,266
Earnings Per Share, Diluted:
Earnings Per Share from
Continuing Operations $0.29 $0.39 $0.96 $1.01
Income (Loss) from Discontinued
Operations $ - $(0.03) $ - $(0.05)
-------- --------- --------- ---------
Net Income Per Common Share $0.29 $0.36 $0.96 $0.96
Weighted Average Shares
Outstanding 48,428 52,720 49,419 52,334
*T
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Catalina Marketing Corporation
Selected Other Data
(in thousands, except store data)
December 31, December 31,
2005 2004
Selected Balance Sheet and Cash
Flow Data (in thousands):
Cash $32,556 $119,437
Debt 48,001 62,197
Stockholders' Equity 156,551 222,114
Cash Flows from Operating Activities
Quarter / YTD 30,263 / 62,025 29,291 / 71,761
Capital Expenditures Quarter / YTD 14,902 / 39,496 6,758 / 12,933
Catalina Marketing Services:
Number of Stores at Quarter End 17,788 17,712
Net Stores (Deinstalled) Installed
During Quarter / YTD 1,095 / 179 68 / 108
Promotions Printed During Quarter /
YTD (in millions) 712 / 2,169 813 / 2,403
Weekly Shopper Reach at Quarter End
(in millions) 226 221
Catalina Health Resource:
Number of Stores at Quarter End 12,621 12,380
Net Stores Installed (Deinstalled)
During Quarter / YTD 217 / 198 299 / 451
Catalina Marketing International:
Number of Stores at Quarter End 6,962 5,741
Net Stores Installed During Quarter
/ YTD 263 / 1,055 41 / 196
Promotions Printed During Quarter /
YTD (in millions) 286 / 774 204 / 616
Weekly Shopper Reach at Quarter End
(in millions) 84 62
*T
About Catalina Marketing Corporation
Based in St. Petersburg, Fla., Catalina Marketing Corporation
(http://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.
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 including as it relates to the
company's installation of color printers and related new technologies,
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.