POS Catalina Marketing Corp

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.