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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 8-K
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 24, 1998
Catalina Marketing Corporation
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
1-11008 33-0499007
Commission File Number (IRS Employer
Identification No.)
11300 9th Street North 33716
St. Petersburg, Florida (Zip code)
(Address of principal executive offices)
(813) 579-5000
Registrant's Telephone Number
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Item 5. Other Events.
On April 23, 1998 Catalina Marketing Corporation (the Company)
issued a press release communicating its fiscal 1998 earnings,
included in this report as Exhibit 99.5.
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<TABLE>
<CAPTION>
Item 7. Exhibits.
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<S> <C>
99.5 Form of press release dated April 23, 1998.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
CATALINA MARKETING CORPORATION
By /s/ Philip B. Livingston
--------------------------------------
Philip B. Livingston,
Senior Vice President and
Chief Financial Officer
Dated: April 24, 1998
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EXHIBIT 99.5
[LOGO] CATALINA
MARKETING
CORPORATION
NEWS
================================================================================
FOR IMMEDIATE RELEASE CONTACT: Philip B. Livingston
Senior Vice President and
Chief Financial Officer
813-579-5006
Bruce Valentine
Treasurer
813-579-5210
CATALINA MARKETING CORPORATION REPORTS
FOURTH QUARTER AND FISCAL 1998 RESULTS
ST. PETERSBURG, Florida, April 23, 1998 - Catalina Marketing Corporation (NYSE:
POS) today announced that for the fourth quarter ended March 31, 1998, earnings
per share increased 59 percent to 43 cents per share from 27 cents reported for
the comparable period a year ago. The company's quarterly net income was $8.1
million on total revenue of $54.1 million, compared to net income of $5.4
million on revenue of $46.1 million in the March 1997 quarter. The company's
fourth quarter revenue represented a 17 percent increase over the prior year's
quarter. The earnings results for the year-ago quarter included a $2.0 million
pre-tax charge, or six cents per share after tax, incurred in shutting down the
company's electronic coupon clearing operation. The current quarter's earnings
of 43 cents represents a 30 percent increase if such charge is excluded from the
results of the March 1997 quarter.
For the fiscal year ended March 31, 1998, total revenue increased 26 percent to
$217.2 million versus $172.1 million reported for the prior year. Net income was
$32.9 million compared to $27.2 million reported for the fiscal year ended March
31, 1997. Earnings per share were $1.73, a 30 percent increase over earnings per
share of $1.33 posted for fiscal 1997. The $1.73 figure reflects an increase of
24 percent on a $1.39 earnings per share result, excluding the above-referenced
charge in the fourth quarter of fiscal 1997.
George W. Off, President and Chief Executive Officer, commented, "Fiscal 1998
was an excellent year, as we experienced continued robust growth in revenue,
cash flow and earnings. The year's performance was characterized by solid top
line growth in the core domestic business, continued advancement of our new
venture initiatives, and a significant revenue contribution from our businesses
abroad. We're proud of our accomplishments, and look forward to pursuing ongoing
growth opportunities in fiscal 1999."
Other highlights and key events included:
- - For the fourth quarter and fiscal year, revenue contributed by the
company's core domestic business increased eight and 17 percent,
respectively, versus the applicable prior year periods. Revenue per average
store in the
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company's core domestic business increased five percent and 10 percent for
the fourth quarter and fiscal 1998, respectively, versus the prior year.
- - In the fourth quarter, consolidated operating cash flow, or EBITDA,
increased 37 percent to $19.6 million from the comparable period a year
ago. Fiscal 1998 EBITDA reached $76.6 million, up 25 percent over $61.3
million posted in fiscal 1997. Income from operations increased 54 percent
to $13.1 million for the quarter, and grew 22 percent to $52.9 million for
the fiscal year.
- - From a pro forma perspective, EBITDA for the fourth quarter increased 25
percent from $15.7 million a year ago. EBITDA for fiscal 1998 topped $80
million, up 28 percent from a fiscal 1997 mark of $62.7 million. Operating
income increased 25 percent from $10.5 million in the March, 1997 quarter.
Operating income of $56.4 million for fiscal 1998 increased 24 percent from
$45.3 million for fiscal 1997. The pro forma presentation of EBITDA and
operating income in this paragraph excludes the effect of the company's
shut-down of Mexican operations, which amounted to $3.6 million in pre-tax
expenses incurred in the third quarter of fiscal 1998. The presentation
also excludes the effect of the electronic coupon clearing shut-down
expenses incurred in the fourth quarter of fiscal 1997.
- - Net income for the quarter was up 49 percent over the fourth quarter a year
ago, and for the fiscal year increased 21 percent from the fiscal 1997
level. Differences between the company's respective net income and earnings
growth rates are primarily attributable to the company's share repurchase
activity and related interest costs.
- - During the fourth quarter, the company repurchased 225,000 shares of common
stock for a total of $10.8 million, or a weighted average price of $48.07
per share. This share repurchase activity was executed under the $30
million share authorization announced in November, 1997. Since the start of
fiscal 1995 and including the shares repurchased in the fourth quarter, the
company has repurchased 2.8 million shares of common stock for a total of
$80.8 million, or a weighted average price of $28.85.
- - The company's U.S. installed store base broke the 11,000 milestone during
the quarter and reached 11,164 by quarter end, as the company added 185
stores to the Catalina Marketing Network(R) on a net basis. In addition,
the company announced during the quarter that more than 50 supermarket
chains and wholesalers --including AWG, Foodtown, Gregerson's, Jewel,
Kroger/Columbus, Laneco, Ralphs, ShopRite, Stop & Shop, and SuperValu --
have tapped the company's Loyalty Marketing Services capabilities for
various frequent shopper services. Such services include loyalty card
design and issuance functions, consumer maintenance, list appending and
cleansing, data warehousing and reporting, and customer communications.
Overseas, the company's installed base increased by 82 during the quarter
to 1,372 stores, with virtually all of the installation activity occurring
in the U.K. and France.
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- - Health Resource Publishing Company ("HRPC") added 354 stores on a net basis
during the quarter and finished with an installed base of 1,920 drugstore
and supermarket pharmacy outlets in its Network. HRPC's Network is
installed in more than 25 chains, including Dillon's, Discount Drug, Duane
Reade, Fry's, King Soopers, Kroger, Meijer, Pathmark, Rite-Aid, Save Mart,
Weis, and Winn-Dixie. During the quarter, HRPC announced the appointment of
Helene Monat as Executive Vice President of Sales and Marketing. Ms. Monat
was integral to the expansion of Catalina Marketing's core domestic
business during the nine years in which she served in various sales and
marketing positions, including as President of Catalina Marketing Services.
Ms. Monat is currently a director of Catalina Marketing Corporation.
- - SuperMarkets Online, Inc. ("SMO") made continued progress in the
establishment of its ValuPageSM Internet-delivered coupon product.
Currently, 30 manufacturing clients have committed to programs involving
115 categories, and consumers are able to benefit from an average of up to
$25.00 in aggregate value per person each week. Consumers can access
ValuPage directly at http://www.valupage.com or link to it through the
ValuPage Network's three classes of partners: retailer web sites,
manufacturer web sites, and other high traffic sites, including America
Online, Excite and Switchboard.
- - Net income for the quarter included pre-tax losses from domestic new
business ventures of $1.3 million, or four cents per share after tax. In
the comparable quarter a year ago, net income reflected pre-tax losses from
domestic new business ventures of $4.9 million, or 15 cents per share on an
after-tax basis. For the fiscal year, pre-tax losses from domestic new
business ventures were $6.3 million, or 20 cents per share after tax,
versus $13.0 million, or 39 cents per share after tax, for fiscal 1997.
Based in St. Petersburg, Florida, Catalina Marketing Corporation provides a menu
of in-store electronic marketing programs to over 150 consumer goods companies.
The company's purchase-based, individually customized communications and
promotions reach more than 143 million U.S. shoppers in over 11,000 supermarkets
via the Catalina Marketing Network(R). The company consists of four business
units: Catalina Marketing Services, which markets the company's core electronic
marketing programs in the U.S.; Catalina Marketing International, which operates
Network programs in the UK, France, and Japan; Health Resource Publishing
Company, which delivers targeted incentives and advertising through customized
newsletters to pharmacy customers based on prescription purchases; and
SuperMarkets Online, Inc., a secure coupon vehicle which distributes ValuPageSM
promotions via the World Wide Web.
###
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CATALINA MARKETING CORPORATION
Selected Financial Data
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
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Three Months Twelve Months
Periods Ended March 31 1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue $ 54,061 $ 46,054 $ 217,150 $ 172,143
Direct Operating Expenses 21,999 18,428 84,191 62,482
Selling, General and Administrative 12,486 13,372 56,364 48,379
Depreciation and Amortization 6,476 5,737 23,703 17,939
Income from Operations 13,100 8,517 52,892 43,343
Interest Income/(Expense) and Other 28 378 (963) 1,224
Minority Interest -- 182 -- 554
Provision for Income Taxes 5,001 3,631 19,058 17,880
Net Income $ 8,127 $ 5,446 $ 32,871 $ 27,241
Diluted:
-------
Earnings Per Share $ 0.43 $ 0.27 $ 1.73 $ 1.33
Weighted Average Shares Outstanding 19,107 20,539 19,026 20,491
Basic:
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Earnings Per Share $ 0.44 $ 0.28 $ 1.78 $ 1.39
Weighted Average Shares Outstanding 18,523 19,715 18,417 19,650
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Selected Other Data
<TABLE>
<CAPTION>
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March 31
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1998 1997
---- ----
<S> <C> <C>
Balance Sheet and Cash Flow (in thousands):
Cash $18,434 $13,698
Stockholders' Equity 90,042 96,938
Twelve Month EBITDA 76,595 61,282
Twelve Month EBITDA (Pro forma)* 80,090 62,712
U.S. Checkout Coupon Business:
Number of Stores at Quarter End 11,164 10,745
Net Stores Installed During Quarter / YTD 185/419 4/979
Promotions Printed During Quarter / YTD (in millions) 543/2,564 581/2,310
Weekly Shopper Reach at Quarter End (in millions) 143 144
International Checkout Coupon Business:
Number of Stores at Quarter End 1,372 941
Net Stores Installed During Quarter / YTD 82/431 104/383
Promotions Printed During Quarter / YTD (in millions) 76/412 62/230
Weekly Shopper Reach at Quarter End (in millions) 20 18
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</TABLE>
* Pro forma EBITDA for the year ended March 31, 1998 excludes $3.5 million in
expense associated with the shutdown of Mexican operations during the quarter
ended December 31, 1997. Comparably, pro forma EBITDA for the year ended
March 31, 1997 excludes the effect of $1.4 million in expense ($2.0 million
less $0.6 million in depreciation expense) incurred in shutting down the
company's electronic coupon clearing operation during the fourth quarter of
fiscal year 1997.
