-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SkaIA5+pv3Dys/aRpUb9kkdePvB2FeuECnlI584wOvcLRDfLj6Gp7WvH1BkYVf+R rqeKhxr9LHuiDYcwYHS2Hw== 0000931763-96-000566.txt : 19960819 0000931763-96-000566.hdr.sgml : 19960819 ACCESSION NUMBER: 0000931763-96-000566 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960816 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CATALINA MARKETING CORP/DE CENTRAL INDEX KEY: 0000883977 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ADVERTISING AGENCIES [7311] IRS NUMBER: 330499007 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-11008 FILM NUMBER: 96616928 BUSINESS ADDRESS: STREET 1: 11300 9TH ST NORTH CITY: ST PETERSBURG STATE: FL ZIP: 33716 BUSINESS PHONE: 8135795000 MAIL ADDRESS: STREET 1: 11300 9TH STREET NORTH CITY: ST PETERSBURG STATE: FL ZIP: 33716-2329 10-Q/A 1 AMEND. #1 TO 2ND QUARTER FORM 10-Q DATED 6/30/96 SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 AMENDMENT NO. 1 TO FORM 10-Q (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended June 30, 1996 ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period From ______ to _______ Commission File Number 1-11008 CATALINA MARKETING CORPORATION - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in its Charter) Delaware 33-0499007 - ------------------------------ ------------------------------ (State of Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification Number) 11300 9th Street North St. Petersburg, Florida 33716-2329 - ------------------------------ ------------------------------ (813) 579-5000 -------------------------------------------- (Registrant's Telephone Number, Including Area Code) Indicate by check mark whether Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes X No ------ ------ At July 22, 1996, Registrant had outstanding 19,572,046 shares of Common Stock. CATALINA MARKETING CORPORATION INDEX Page ---- Part I. Financial Information Item 1. Financial Statements Condensed Consolidated Statements of Income (Unaudited) for the three months ended June 30, 1996 and 1995 3 Condensed Consolidated Balance Sheets at June 30, 1996 (Unaudited) and March 31, 1996 4 Condensed Consolidated Statements of Cash Flow (Unaudited) for the three months ended June 30, 1996 and 1995 5 Notes to Unaudited Condensed Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 Part II. Other Information 9 Signatures 10 2 CATALINA MARKETING CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (dollars in thousands, except per share data) (unaudited)
Three Months Ended June 30, --------------------- 1996 1995 --------- -------- Revenues $38,127 $30,613 Costs and Expenses: Direct operating expenses 13,136 10,942 Selling, general and administrative 11,154 7,661 Depreciation and amortization 3,664 3,895 ---------- --------- Total costs and expenses 27,954 22,498 ---------- --------- Income From Operations 10,173 8,115 Other Income, net 232 209 ---------- --------- Income Before Income Taxes And Minority Interest 10,405 8,324 Income Taxes (4,271) (3,365) Minority Interest 160 179 ---------- --------- Net Income 6,294 $ 5,138 ========== ========= Net Income Per Common and Common Equivalent Share $ 0.31 $ 0.26 ========== ========= Weighted Average Common and Common Equivalent Shares Outstanding 20,432 19,870 ========== =========
The accompanying Notes are an integral part of these consolidated financial statements. 3 CATALINA MARKETING CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (dollars in thousands)
(Unaudited) June 30, March 31, ASSETS 1996 1996 -------------------------- Current Assets: Cash and cash equivalents $ 19,580 $ 25,778 Accounts receivable, net 22,729 26,725 Prepaid and other assets 3,660 5,352 Deferred tax asset 4,359 7,436 ------------- ----------- Total current assets 50,328 65,291 ------------- ----------- Property and Equipment: Property and equipment 119,576 110,475 Accumulated depreciation and amortization (67,887) (64,222) ------------- ----------- Total property and equipment 51,689 46,253 ------------- ----------- Purchased Intangible Assets 14,760 - Other Assets 2,174 2,643 ------------- ----------- Total Assets $118,951 $114,187 ------------- ----------- LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $ 9,292 $ 10,832 Taxes payable 1,364 620 Accrued expenses 18,818 17,049 Deferred revenue 7,548 11,960 ------------- ----------- Total current liabilities 37,022 40,461 ------------- ----------- Deferred Tax Liability 3,046 2,504 ------------- ----------- Commitments and Contingencies Stockholders' Equity: Preferred stock; $.01 par value; 5,000,000 authorized shares; - - none issud and outstanding Common stock; $0.01 par value; 30,000,000 authorized shares; 20,532,254 and 20,459,728 shares issued at June 30, 1996 and March 31, 1996, respectively 205 205 Paid-in capital 35,937 34,079 Cumulative translation adjustment 10 501 Retained earnings 63,267 56,973 Less common stock in treasury, at cost (963,800 shares at June 30, 1996 and March 31,1996) (20,536) (20,536) ------------- ----------- Total stockholders' equity 78,883 71,222 ------------- ----------- Total Liabilities and Stockholders' Equity $118,951 $114,187 ------------- ------------
The accompanying Notes are an integral part of these consolidated financial statements. 4 CATALINA MARKETING CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (dollars in thousands)
(Unaudited) Three Months Ended June 30 --------------------------- 1996 1995 --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 6,294 $ 5,138 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 3,664 3,895 Minority interest (160) (179) Other 278 (7) Changes in operating assets and liabilities 4,124 (36) ---------- ---------- Net cash provided by operating activities 14,200 8,811 ---------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (9,171) (2,529) Proceeds from sale of fixed assets 79 174 Purchase of minority interest in subsidiary (cash consideration) (11,915) - ---------- ---------- Net cash used in investing activities (21,007) (2,355) ---------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock 203 385 Proceeds from issuance of subsidiary stock 459 63 Common stock repurchases - (10,518) ---------- ---------- Net cash used in financing activities 662 (10,070) ---------- ---------- NET DECREASE IN CASH (6,145) (3,614) Effect of exchange rate changes on cash (53) 97 CASH, at end of prior period 25,778 30,729 ---------- ---------- CASH, at end of current period 19,580 $ 27,212 ========== ==========
The accompanying Notes are an integral part of these consolidated financial statements. 5 CATALINA MARKETING CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Note 1. Condensed Consolidated Financial Statements: In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the financial position of the Company as of June 30, 1996 and March 31, 1996 and the results of operations and cash flows for the three-month periods ended June 30, 1996 and 1995. The consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries. The first quarter results of the majority owned foreign subsidiaries are included as of, and for the three month periods ended March 31, 1996 and 1995, respectively. All material intercompany profits, transactions and balances have been eliminated. The Company's investment in non-majority owned companies is accounted for on the equity method. These financial statements are presented in accordance with the requirements of Form 10-Q and consequently may not include all disclosures normally required by generally accepted accounting principles or those normally made in the Company's Annual Report on Form 10-K. The accompanying condensed consolidated financial statements and related notes should be read in conjunction with the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1996. Note 2. Net Income Per Common and Common Equivalent Share: Net income per common and common equivalent share is based on the weighted average number of shares of common stock outstanding and dilutive common equivalent shares from stock options using the treasury stock method, effected for the two-for-one stock split (see Note 4). Note 3. Intangible Assets On April 10, 1996, the Company purchased from its minority shareholders the remaining 46% of Catalina Marketing U.K., Inc. not owned by it for $11.9 million cash consideration and 41,672 newly issued shares of Company common stock. The Company also chose to replace existing options in the Catalina Marketing U.K., Ltd. stock option plan by issuing approximately 17,600 shares of Company common stock to the Catalina Marketing U.K., Ltd. plan participants. The April 10, 1996 purchase has been accounted for on the purchase method. The intangible assets purchased in the transaction are being amortized on the straight line basis. $1.3 million in goodwill is being amortized over a 40 year life, with the remainder of the intangible assets related to the patent license and retailer relationships amortized over an average 20 year life. 6 If Catalina Marketing U.K., Inc. had been 100% owned by the Company during the quarter ended June 30, 1995, net income would have been $5.0 million or $0.25 per common and common equivalent share. Note 4. Subsequent Event: Two-for-one Stock Split - ----------------------- On June 10, 1996 the Company's board of directors declared a two-for-one common stock split to be effected in the form of a stock dividend. The record date for the stock dividend was June 24, 1996, and the payment date was July 15, 1996. The financial statements for the periods ended June 30, 1996 and 1995 and all other information provided herein have been restated to include the effects of the stock split. Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations: Fiscal 1997 Compared to Fiscal 1996 The Company's revenues for the first quarter of fiscal 1997 increased 25%, compared with the same period in fiscal 1996. The increase in revenues is primarily due to a greater distribution of Checkout Coupon(R) incentives. In the U.S., the Catalina Marketing Network/sm/ printed 521 million during the first quarter of fiscal 1997, up 11% compared to the comparable fiscal 1996 period (470 million promotions). The greater distribution of Checkout Coupon promotions is attributable to additional sales of category cycles and the broader reach of the Catalina Marketing Network. In the first quarter of fiscal 1997, foreign consolidated subsidiaries, Catalina Electronic Clearing Services (CECS) and Health Resource Publishing Company contributed approximately $2.8 million of revenues. CECS continues to experience slower adoption in the market place than expected, greater than anticipated working capital requirements, operational difficulties, and therefore continues to incur operating losses. In the U.S., the Catalina Marketing Network was in 10,085 Checkout Coupon stores at June 30, 1996, which reach 135 million shoppers each week as compared to 9,049 stores reaching 122 million shoppers each week at June 30, 1995. Outside the U.S., the Catalina Marketing Network was in 622 stores at June 30, 1996, which reach 14 million shoppers each week as compared to 178 stores reaching 5 million shoppers each week at June 30, 1995. The Company installed 319 U.S. Checkout Coupon stores in the first quarter of fiscal 1997 as compared to 45 stores in the comparable fiscal 1996 period. Outside the U.S., the Company installed 64 stores in the first quarter of fiscal 1997 as compared to 10 stores in the comparable fiscal 1996 period. Direct operating expenses consist of retailer fees, paper, and sales commissions and the expenses of operating and maintaining the Catalina Marketing Network (primarily expenses relating to operations personnel and service offices) and provision for doubtful accounts. Direct operating expenses increased in absolute terms to $13.1 million for the first quarter of fiscal 1997, from $10.9 million in fiscal 1996, decreasing to 34% from 36% of revenues. The percentage decrease is due primarily to economies in paper purchasing. 7 Selling, general and administrative expenses include personnel-related costs of selling and administrative staff, overhead and new product development expenses. Selling, general and administrative expenses for the first quarter of fiscal 1997 increased as a percent of revenues to 29% from 25% for fiscal 1996. In absolute terms, these expenses increased to $11.1 million compared to $7.7 million fiscal 1996. The increase relates primarily to higher costs associated with a larger sales force, and administrative expenses of new business ventures and products. Depreciation and amortization decreased to $3.7 million for the first quarter of fiscal 1997 from $3.9 million in the comparable fiscal 1996 period. The decrease is due to the increase in fully depreciated store equipment in fiscal 1997. The provision for income taxes increased to $4.3 million (41% of income before income taxes and minority interest) for the three-month period of fiscal 1997 compared to $3.4 million (40% of income before income taxes and minority interest) for the same period of fiscal 1996. The Company's effective tax rate is higher than the expected federal statutory tax rate due to state and foreign income taxes and the inability to offset losses of majority owned foreign subsidiaries against U.S. income. Liquidity and Capital Resources The Company's primary capital expenditures are store equipment and third-party store installation costs. These amounts generally range from $5,000 to $13,000 per installed store. During the first three-month periods of fiscal 1997 and 1996, the Company made capital expenditures of $9.2 million and $2.5 million, respectively. The pace of installations vary depending on the timing of contracts entered into with retailers and the scheduling of store installations by mutual agreement. In the first quarter of fiscal 1997, the Company increased expenditures for data processing equipment and had an increased pace of store installations compared to the comparable prior fiscal period. Catalina Marketing finances capital expenditures from internally generated cash flows. Management believes that expenditures for equipment and research and development will remain $20 to $30 million annually for the foreseeable future. Additionally, management has been authorized to purchase up to $10 million of Company Common Stock subject to market conditions. The Company has an unsecured revolving bank credit facility under which it may borrow up to $30 million. There have been no borrowings under this credit facility to date. 8 In accordance with coupon industry practice, the Company generally pre-bills manufacturers prior to the commencement of the purchased category cycle. The Company recognizes revenue as promotions are printed, and the amounts collected prior to printing are reflected as deferred revenue, which is classified as current liabilities. The Company believes working capital generated by operations is sufficient for its capital requirements, although the Company may choose to utilize debt and lease financing, if available on acceptable terms. Part II - Other Information Item 6. Exhibits and Reports on Form 8-K a) Exhibits None. b) Reports on Form 8-K Filing dated April 24, 1996 and Amendment 1 dated June 24, 1996, both regarding the purchase by the Company of common shares not already owned by it in Catalina Marketing U.K., Inc., which was previously 54% owned by the Company. 9 CATALINA MARKETING CORPORATION SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, Registrant's principal financial officer, thereunto duly authorized. August 15,1996 CATALINA MARKETING CORPORATION ----------------------------------------- (Registrant) /s/ Philip B. Livingston ----------------------------------------- Philip B. Livingston Senior Vice President and Chief Financial Officer (Authorized officer of Registrant and principal financial officer) 10 EX-27 2 ARTICLE 5 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS MAR-31-1996 APR-01-1996 JUN-30-1996 19,580 0 22,729 0 0 50,328 119,576 67,887 118,951 37,022 0 0 0 205 78,678 118,951 38,127 38,127 13,136 27,954 (392) 0 0 10,405 4,271 6,294 0 0 0 6,294 .31 .31
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