-----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, EjJi76r6WH/KJXsNyraiVMYyEuBSscb5dLCaNYRmA8pHD+ZmAQA4r2Uz4Qh/Mpe2 lQbiJ4iSobzRINfPZYZ/pA== 0000950144-98-001515.txt : 19980218 0000950144-98-001515.hdr.sgml : 19980218 ACCESSION NUMBER: 0000950144-98-001515 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980213 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 SEC ACT: SEC FILE NUMBER: 001-11008 FILM NUMBER: 98538811 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 1 CATALINA MARKETING CORPORATION FORM 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON D.C. 20549 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 DECEMBER 31, 1997 ( ) 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 February 9, 1998, Registrant had outstanding 18,481,675 shares of Common Stock. 2 CATALINA MARKETING CORPORATION INDEX
Page ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Statements of Income for the three month and nine month periods ended December 31, 1997 and 1996 3 Condensed Consolidated Balance Sheets at December 31, 1997 and March 31, 1997 4 Condensed Consolidated Statements of Cash Flows for the nine month periods ended December 31, 1997 and 1996 5 Notes to Condensed Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 PART II. OTHER INFORMATION 12 Item 6. Exhibits and Reports on Form 8-K 12 SIGNATURES 13
2 3 CATALINA MARKETING CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (dollars in thousands, except per share data) (unaudited)
Three Months Ended Nine Months Ended December 31, December 31, ------------------------- ------------------------- 1997 1996 1997 1996 --------- --------- --------- --------- Revenues $ 63,703 $ 46,344 $ 163,089 $ 126,089 Costs and Expenses: Direct operating expenses 23,752 16,055 62,192 44,054 Selling, general and administrative 18,561 12,195 43,878 35,007 Depreciation and amortization 5,613 4,448 17,227 12,202 --------- --------- --------- --------- Total costs and expenses 47,926 32,698 123,297 91,263 --------- --------- --------- --------- Income From Operations 15,777 13,646 39,792 34,826 Interest Income (Expense) and Other (208) 273 (991) 846 --------- --------- --------- --------- Income Before Income Taxes and Minority Interest 15,569 13,919 38,801 35,672 Income Taxes (4,706) (5,607) (14,057) (14,249) Minority Interest in losses of subsidiaries -- -- -- 372 --------- --------- --------- --------- Net Income $ 10,863 $ 8,312 $ 24,744 $ 21,795 ========= ========= ========= ========= Diluted: Net Income Per Common Share $ 0.57 $ 0.40 $ 1.30 $ 1.06 ========= ========= ========= ========= Weighted Average Common Shares Outstanding 19,118 20,635 18,970 20,615 ========= ========= ========= ========= Basic: Net Income Per Common Share $ 0.59 $ 0.42 $ 1.35 $ 1.11 ========= ========= ========= ========= Weighted Average Common Shares Outstanding 18,445 19,703 18,381 19,627 ========= ========= ========= =========
The accompanying Notes are an integral part of these consolidated financial statements. 3 4 CATALINA MARKETING CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (dollars in thousands) (unaudited)
December 31, March 31, ASSETS 1997 1997 --------- --------- Current Assets: Cash and cash equivalents $ 16,357 $ 13,698 Accounts receivable, net 29,379 28,367 Deferred tax asset 11,761 7,467 Prepaid expenses and other current assets 12,895 12,217 --------- --------- Total current assets 70,392 61,749 --------- --------- Property and Equipment: Property and equipment 150,691 142,163 Accumulated depreciation and amortization (85,191) (72,585) --------- --------- Property and equipment, net 65,500 69,578 --------- --------- Purchased intangible assets, net 18,604 18,805 Other assets 4,223 4,564 --------- --------- Total Assets $ 158,719 $ 154,696 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $ 9,494 $ 12,674 Accrued expenses 30,595 23,361 Deferred revenue 19,737 11,611 Short term borrowings 5,092 5,820 --------- --------- Total current liabilities 64,918 53,466 --------- --------- Deferred tax liability 4,744 3,423 Long term debt 616 869 --------- --------- Commitments and Contingencies Stockholders' Equity: Preferred stock; $.01 par value; 5,000,000 authorized shares; none issued and outstanding -- -- Common stock; $0.01 par value; 50,000,000 authorized shares, and 21,027,397 and 20,778,557 shares issued at December 31, 1997 and March 31, 1997, respectively 210 208 Paid-in capital 49,595 41,770 Cumulative translation adjustment (319) 749 Retained earnings 108,958 84,214 Less common stock in treasury, at cost (2,575,885 and 1,172,408 shares at December 31, 1997 and March 31, 1997, respectively) (70,003) (30,003) --------- --------- Total stockholders' equity 88,441 96,938 --------- --------- Total Liabilities and Stockholders' Equity $ 158,719 $ 154,696 ========= =========
The accompanying Notes are an integral part of these consolidated financial statements. 4 5 CATALINA MARKETING CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (dollars in thousands) (unaudited)
Nine Months Ended December 31, ---------------------------------- 1997 1996 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 24,744 $ 21,795 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 17,372 12,473 Minority interest -- (372) Other 119 2,138 Changes in operating assets and liabilities 9,606 4,034 -------- -------- Net cash provided by operating activities 51,841 40,068 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures, net (14,144) (26,431) Purchase of investments, net of cash acquired (2,087) (18,028) -------- -------- Net cash used in investing activities (16,231) (44,459) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from debt obligations 31,486 -- Principal payments on debt obligations (32,231) -- Proceeds from issuance of common and subsidiary stock 5,535 3,694 Tax benefit from exercise of non-qualified options and disqualifying dispositions 2,131 276 Payment for repurchase of company common stock (40,000) (3,647) -------- -------- Net cash (used in) provided by financing activities (33,079) 323 -------- -------- NET INCREASE (DECREASE) IN CASH 2,531 (4,068) Effect of exchange rate changes on cash 128 (63) CASH, at end of prior period 13,698 25,778 -------- -------- CASH, at end of current period $ 16,357 $ 21,647 ======== ========
The accompanying Notes are an integral part of these consolidated financial statements. 5 6 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 December 31, 1997 and March 31, 1997, and the results of operations for the three month and nine month periods ended December 31, 1997 and 1996 and cash flows for the nine month periods ended December 31, 1997 and 1996. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries. The third quarter balances and results of the majority owned foreign subsidiaries are included as of and for the three and nine month periods ended September 30, 1997 and 1996. All material intercompany profits, transactions and balances have been eliminated. The Company's investment in a non-majority owned company is accounted for on the equity method. These financial statements, including the condensed consolidated balance sheet as of March 31, 1997, which has been derived from audited 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, 1997. Note 2. Net Income Per Common Share: In the quarter ended December 31, 1997, the Company adopted Statement of Financial Accounting Standards No. 128, "Earnings per Share" (SFAS No. 128). Accordingly, diluted and basic earnings per share (EPS) are shown on the face of the accompanying condensed consolidated statements of income. The following is a reconciliation of the denominator of basic EPS to the denominator of diluted EPS:
THREE MONTHS NINE MONTHS ENDED DECEMBER 31, ENDED DECEMBER 31, ------------------------------------------ 1997 1996 1997 1996 ------ ------ ------ ------ (in thousands) Basic weighted average common shares outstanding 18,445 19,703 18,381 19,627 Dilutive effect of options outstanding 673 932 589 988 ------ ------ ------ ------ Diluted weighted average common shares outstanding 19,118 20,635 18,970 20,615 ====== ====== ====== ======
6 7 Options to purchase 220,500 shares of common stock at prices ranging from $53.50 to $43.50 per share were outstanding during the nine months ended December 31, 1997 but were not included in the computation of diluted EPS because the options' exercise prices were greater than the average market price of common shares. Note 3: Stockholder Protection Agreement: On May 8, 1997, the Company announced that it had adopted a Stockholder Protection Plan. To implement this plan, the Company declared a dividend of one Preferred Share Purchase Right on each outstanding share of the Company's common stock. The dividend distribution was payable to stockholders of record on May 12, 1997. The rights will be exercisable for fractions of a share of the Company's Series X Junior Participating Preferred Stock only if a person or group acquires 15 percent or more of the Company's common stock or announces or commences a tender offer for 15 percent or more of the common stock, except for certain instances defined in the Stockholder Protection Plan. Note 4: Effect of SFAS No. 130 and No. 131: In June 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income" (SFAS No. 130) and No. 131, "Disclosures about Segments of an Enterprise and Related Information" (SFAS No. 131). SFAS No. 130 requires that an enterprise classify items of other comprehensive income by their nature on the face of its financial statements and display the accumulated balance of other comprehensive income separately from retained earnings and additional paid-in capital in the equity section of the balance sheet. SFAS No. 130 is effective for financial statements relating to fiscal years beginning after December 15, 1997. SFAS No. 131 requires that a public business enterprise report financial and descriptive information about its reportable operating segments. SFAS No. 131 is effective for financial statements relating to fiscal years beginning after December 15, 1997. The effects of SFAS No. 130 and SFAS No. 131 on the Company have not been considered at this time. Note 5: Credit Agreement: On September 30, 1997, the Company terminated its existing $40 million credit facility and entered into a new $150 million credit agreement (the Credit Agreement) with a syndicate of commercial banks led by NationsBank, National Association with Fleet National Bank as co-agent. The Credit Agreement makes available (i) a $100 million revolving credit facility expiring September 30, 2000, (ii) a $10 million swing line facility expiring September 30, 2000, and (iii) a $50 million 364 day line of credit facility expiring September 29, 1998 under which, the Company, at its option, may convert outstanding borrowings upon expiration into a term loan with a maturity of September 30, 2000. The Company may alternatively request, and the lenders have the option to provide, a renewal of the line of credit on a revolving basis 7 8 for additional periods of up to 364 days each. At no time may the aggregate principal balance exceed $150 million under the Credit Agreement. As of December 31, 1997, there were no borrowings outstanding thereunder. The Credit Agreement provides that borrowings accrue interest on a variable basis at (i) the London Interbank Offering Rate (LIBOR) (adjusted for any reserve requirements in force) plus an applicable margin ranging from 50 to 162.5 basis points, or (ii) the base rate, defined in the Credit Agreement as the greater of (a) the prime rate or (b) 50 basis points plus the federal funds rate as defined in the Credit Agreement. In addition, the Credit Agreement provides for unused facilities fees to accrue at a range of 12.5 to 37.5 basis points per annum multiplied by the unused portions of the revolving credit and line of credit facilities. The Credit Agreement is secured by the common stock or equivalent of several Company subsidiaries, is guaranteed by several Company subsidiaries, and contains certain financial covenants and other terms and conditions. ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS: FISCAL 1998 COMPARED TO FISCAL 1997 The Company's revenues for the third quarter and first nine months of fiscal 1998 increased 37.5 percent and 29.3 percent, respectively, compared with the same periods in fiscal 1997. The increase in revenues is primarily due to a greater distribution of Checkout Coupon(R) incentives worldwide, growth in new programs such as Checkout Direct(R) and, to a lesser extent, revenues added by the acquisition by the Company on October 10, 1996 of a 51 percent interest in a Japanese based outdoor media business. The Company believes that a portion of incremental revenue for the third quarter of fiscal 1998 compared with the third quarter of fiscal 1997 was attributable to a shift in the promotion plans of some clients whose spending the Company had originally anticipated would occur in the fourth quarter of fiscal 1998.In the U.S., the Catalina Marketing Network printed 764 million and 2,021 million promotions during the third quarter and first nine months of fiscal 1998, respectively, up 20.5 percent and 16.9 percent compared to the same fiscal 1997 periods (634 million and 1,729 million promotions). The greater distribution of promotions is attributable to the broader reach of the Catalina Marketing Network as well as additional sales of category cycles and the sale of new products and programs. Catalina Marketing Services, constituting the Company's base business in the U.S., contributed approximately $55.0 million and $138.4 million of revenues in the third quarter and first nine months of fiscal 1998, respectively, up 30.0 percent and 20.0 percent over revenues of $42.3 million and $115.3 million in the comparable fiscal 1997 periods. In the U.S., the Catalina Marketing Network was in 10,979 stores at December 31, 1997, which reach 145 million shoppers each week as compared to 10,741 stores reaching 141 million shoppers each week at December 31, 1996 and 10,745 stores reaching 144 million shoppers each week at March 31, 1997. The Health Resources Network was in 1,566 pharmacies at December 31, 1997 as compared to 977 pharmacies at December 31, 1996 and 1,195 pharmacies at March 31, 1997. Outside the U.S., the Catalina Marketing Network was in 1,290 stores at December 31, 1997, which reach 19 million shoppers each week as 8 9 compared to 837 stores reaching 18 million shoppers each week at December 31, 1996 and 941 stores reaching 18 million shoppers each week at March 31, 1997. In the first nine months of fiscal 1998, the Company installed its Catalina Marketing Network in 234 stores (net of deinstallations) in the U.S. as compared to 975 stores in the comparable fiscal 1997 period. Deinstallation activity can and does occur primarily due to the consolidation and business combination of supermarket chains as well as store closures made by retailers in the ordinary course of business. The Company also installed its Health Resources Network in 371 pharmacies in the first nine months of fiscal 1998 as compared to 740 pharmacies in the comparable fiscal 1997 period. Outside the U.S., the Company installed 349 stores in the first nine months of fiscal 1998 as compared to 279 stores in the comparable fiscal 1997 period. During the first six months of fiscal 1998, the Company ceased operations in 300 stores in and around Mexico City. Direct operating expenses consist of retailer fees, paper, sales commissions and the expenses of operating and maintaining the Catalina Marketing Network (primarily expenses relating to operations personnel and service offices), provision for doubtful accounts and the direct expenses associated with operating the outdoor media business in a majority-owned subsidiary in Japan (purchased in October 1996). Direct operating expenses increased in absolute terms to $23.8 million and $62.2 million for the third quarter and first nine months of fiscal 1998, respectively, from $16.1 million and $44.1 million in the comparable periods of fiscal 1997. Direct operating expenses in the first nine months of fiscal 1998 as a percentage of revenues increased to 38.1 percent from 34.9 percent in the comparable period of fiscal 1997. This increase in fiscal 1998 is principally attributable to the addition of the direct costs associated with running the outdoor media business in Japan. 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 third quarter and first nine months of fiscal 1998 were $18.6 million and $43.9 million, respectively, compared to $12.2 million and $35.0 million for the same periods of fiscal 1997, increases of 52.2 percent and 25.3 percent. The increases relate primarily to higher costs associated with a larger sales force, and administrative expenses of new business ventures and products. As a percentage of revenues, selling, general and administrative expenses increased 2.8 percent in the third quarter of fiscal 1998, to 29.1 percent from 26.3 percent for the comparable period of fiscal 1997. This increase is principally due to a $3.5 million one time expense incurred in the third quarter of fiscal 1998 associated with the shutdown of Mexican operations. As a percentage of revenues for the first nine months of fiscal 1998, selling, general and administrative expenses decreased 0.9 percent to 26.9 percent from 27.8 percent for the comparable period of fiscal 1997. This decrease is principally due to the outdoor media business in Japan, which typically has a higher percentage of direct costs (as indicated above) and a smaller percentage of selling, general and administrative expenses than the Company's other businesses, as well as the fiscal 1997 period including the electronic clearing business which ceased operations on March 31, 1997, and was partially offset by the $3.5 million one time expense incurred related to the shutdown of the Mexican operations in the third quarter of fiscal 1998. Depreciation and amortization increased to $5.6 million and $17.2 million for the third quarter and first nine months of fiscal 1998 from $4.4 million and $12.2 million for the comparable 9 10 periods of fiscal 1997. Depreciation increased due to the increase in fiscal 1997 capital expenditures associated with new business ventures and data processing equipment. Interest income (expense) and other decreased to $.2 million and $1.0 million expense for the third quarter and first nine months of fiscal 1998 from $.3 million and $.9 million income for the comparable periods of fiscal 1997. The decrease is primarily due to the Company incurring interest expense on borrowings from its credit facility during the third quarter and first nine months of fiscal 1998. The provision for income taxes decreased to $4.7 million and $14.1 million (30.2 percent and 36.2 percent of income before income taxes and minority interest) for the third quarter and first nine months of fiscal 1998, respectively, compared to $5.6 million and $14.2 million (40.2 percent and 39.9 percent of income before income taxes and minority interest) for the same periods of fiscal 1997. The decrease in the provision for income taxes for fiscal 1998 is due to the $3.1 million tax benefit arising due to the shutdown of the Mexican operations. Excluding the effect of the Mexican operations shutdown, 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 utilize currently losses of other majority owned foreign subsidiaries for tax purposes. LIQUIDITY AND CAPITAL RESOURCES The Company's primary capital expenditures are store equipment and third-party store installation costs, as well as data processing equipment for the Company's central data processing facilities. Total store equipment and third-party store installation costs range from $5,000 to $13,000 per store. During the first nine months of fiscal 1998 and 1997, the Company made capital expenditures of $14.1 million and $26.5 million, respectively. The pace of installations varies depending on the timing of contracts entered into with retailers and the scheduling of store installations by mutual agreement. During the first nine months of fiscal 1998, the Company had a slower pace of U.S. store installations and spent $4.4 million less in data processing equipment and furniture and fixtures compared to the comparable fiscal 1997 period. Management believes that expenditures for capital equipment will remain between $20 million and $35 million annually for the foreseeable future. During the first quarter of fiscal 1998, the Company purchased 1,403,477 shares of its common stock for $40 million, initiating and completing a $40 million share repurchase program approved by the Company's board as of March 31, 1997. Management has since been authorized to purchase up to $30 million of Company common stock subject to market conditions. During the fourth quarter of fiscal 1998 management has purchased to date 55,000 shares of its common stock for $2.7 million. The Company may consider additional share repurchases from time to time. 10 11 During the first nine months of fiscal 1998, the Company borrowed approximately $27 million against its $40 million credit facility, $22 million of which was in connection with the completion of the $40 million common stock repurchase program referenced above, and $5 million of which was used to fund operations. On September 30, 1997 the Company terminated its existing $40 million credit facility and entered into a new credit agreement (the Credit Agreement) with a syndicate of banks under which it may borrow up to $150 million, at variable rates calculated with reference to the London Interbank Offering Rate (LIBOR) or the higher of the bank prime rate or the Federal Funds rate plus 50 basis points for certain advances. The Credit Agreement expires on September 30, 2000. The Company repaid $27 million during the first nine months of fiscal 1998, leaving no outstanding balance on this facility at December 31, 1998. The Company believes working capital generated by operations along with existing credit facilities are sufficient for its overall capital requirements. 11 12 PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. a. Exhibits 15 Acknowledgment Letter 27 Financial Data Schedule (for SEC use only) 99 Review Report of Independent Certified Public Accountants b. Reports on Form 8-K Report dated October 15, 1997 regarding the Company's press release communicating its fiscal 1998 second quarter earnings Report dated November 11, 1997 regarding the Company's press release announcing $30 million share repurchase authorization Report dated November 20, 1997 regarding the Company's press release regarding the French high court's ruling against its majority-owned affiliate, Catalina Marketing of France 12 13 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. February 12, 1998 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) 13 EX-15 2 ACKNOWLEDGMENT LETTER 1 EXHIBIT 15 [ARTHUR ANDERSEN LETTERHEAD] January 12, 1998 Catalina Marketing Corporation 11300 9th Street North St. Petersburg, Florida 33716 Catalina Marketing Corporation: We are aware that Catalina Marketing Corporation has incorporated, by reference in its Registration Statement File Nos. 33-46793, 33-77100, 33-82456, 333-07525 and 333-13335, its Form 10-Q for the three-month and nine-month periods ended December 31, 1997, which includes our report dated January 12, 1998, covering the unaudited interim financial information contained therein. Pursuant to Regulation C of the Securities Act of 1933 (the Act), that report is not considered a part of the registration statement prepared or certified by our firm or a report prepared or certified by our firm within the meaning of Sections 7 and 11 of the Act. Very truly yours, ARTHUR ANDERSEN LLP By /s/ WILLIAM J. MEURER --------------------- William J. Meurer NNK EX-27 3 FINANCIAL DATA SCHEDULE (FOR SEC USE ONLY)
5 1,000 9-MOS MAR-31-1997 APR-01-1997 DEC-31-1997 16,357 0 29,379 0 0 70,392 150,691 85,191 158,719 64,918 616 0 0 210 88,231 158,719 163,089 163,089 62,192 123,297 991 0 0 38,801 14,057 24,744 0 0 0 24,744 1.35 1.30
EX-99 4 REVIEW REPORT OF INDEP. CERTIFIED PUBLIC ACCTS. 1 EXHIBIT 99 [ARTHUR ANDERSEN LLP LETTERHEAD] REVIEW REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS To Catalina Marketing Corporation: We have reviewed the accompanying condensed consolidated balance sheet of Catalina Marketing Corporation (a Delaware corporation) as of December 31, 1997, and the related condensed consolidated statements of income for the three-month and nine-month periods ended December 31, 1997 and 1996, and the condensed consolidated statements of cash flows for the nine-month periods ended December 31, 1997 and 1996. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the financial statements referred to above, for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet of Catalina Marketing Corporation as of March 31, 1997, and the related consolidated statements of income, stockholders' equity and cash flows for the year then ended (not presented separately herein), and, in our report dated April 18, 1997, we expressed an unqualified opinion on those financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of March 31, 1997, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. /s/ ARTHUR ANDERSEN LLP Tampa, Florida, January 12, 1998 -----END PRIVACY-ENHANCED MESSAGE-----