8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15 (d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) May 18, 2005

Commission File Number: 1-11008

CATALINA MARKETING CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Delaware	33-0499007
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)
200 Carillon Parkway, St. Petersburg, Florida	33716-2325
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s Telephone Number, Including Area Code: (727) 579-5000

N/A

(Former name or former address, if changed since last report):

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition

The following disclosure is being furnished pursuant to Item 2.02 of Form 8-K - Results of Operations and Financial Condition. On May 18, 2005, Catalina Marketing Corporation (the “Company”) issued a press release announcing its financial results for its fourth quarter and fiscal year ended March 31, 2005. The press release is attached hereto as Exhibit 99.1 and is being furnished, and not filed or incorporated by reference into any other statement or report of the Company, pursuant to such Item 2.02.

Item 8.01. Other Events

The Compensation Committee of the Board of Directors of the Company has approved amounts to be paid to the Company’s chief executive officer and certain other members of its executive management group pursuant to the Fiscal Year 2005 Annual Incentive Plan (the “2005 Plan”). The 2005 Plan provided for incentive cash bonus eligibility, and a maximum cash bonus amount, equal to stated percentages of the base salaries of each participating member in the 2005 Plan. The bonus of each participant under the 2005 Plan was based upon the Company and/or its operating segments attaining specified financial performance levels for fiscal year 2005 as determined by the Compensation Committee. The amounts to be paid to those officers identified as “Named Executive Officers” currently employed by the Company and certain other members of the executive management group is as follows (in thousands):

	Title	$
L. Dick Buell	Chief Executive Officer	871
Susan Klug	Chief Development Officer	483
Thomas Buehlmann	Executive Vice President	412
Jay D. Parsons	Executive Vice President	376
Edward Kuehnle	Executive Vice President	54

Item 9.01. Financial Statements and Exhibits

(c) Exhibits 99.1 – Press Release dated May 18, 2005

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly authorized and caused the undersigned to sign this report on the registrant’s behalf.

May 18, 2005	CATALINA MARKETING CORPORATION
	(Registrant)
	/s/ Robert D. Woltil
	Robert. D. Woltil
	Interim Chief Financial Officer
	(Authorized officer of Registrant and principal financial and accounting officer)

Exhibit Index

Exhibit Number	Description
99.1	Press Release dated May 18, 2005

EX-99.1

Exhibit 99.1

             NEWS

INVESTOR CONTACTS:

Rick Frier

Executive Vice President, Finance

(727) 579-5147

Joanne Freiberger

Vice President, Finance

(727) 579-5116

MEDIA CONTACT:

Michelle Bauer

Executive Director, Marketing Communications

(727) 579-5129

Catalina Marketing Reports Financial Results

For the Fourth Quarter of Fiscal Year 2005

ST. PETERSBURG, FL, May 18, 2005 — Catalina Marketing Corporation (NYSE: POS) today reported financial results for its fourth quarter and fiscal year ended March 31, 2005.

For the three months ended March 31, 2005, consolidated revenues were $112.0 million, compared with revenues of $119.6 million in the comparable period last year. Consolidated net income for the fourth quarter was $15.3 million, or $0.29 per diluted share, compared with a net loss of $8.8 million, or $0.17 per diluted share, in the fourth quarter of fiscal year 2004. Fourth quarter results in fiscal year 2005 included $0.7 million in losses from discontinued operations due principally to losses from the disposal of non-core businesses, compared with $32.5 million of losses from discontinued operations, due principally from goodwill impairment charges, recognized in the fourth quarter of fiscal year 2004.

The company reported consolidated income from continuing operations for the quarter ended March 31, 2005 of $16.0 million, or $0.30 per diluted share, compared with $23.7 million, or $0.44 per diluted share, for the quarter ended March 31, 2004.

“The results in the fourth quarter were consistent with our expectations,” said Dick Buell, chief executive officer of Catalina Marketing. “The company incurred costs in the fourth quarter of fiscal 2005 that were not experienced in fiscal 2004 including costs related to growth initiatives, incentive compensation and compliance with Sarbanes-Oxley. As discussed on our last earnings call, the company’s investment in growth initiatives reflects a commitment to drive future earnings growth.”

Revenue in the fourth quarter of fiscal year 2005 was negatively influenced by the sale of the loyalty card business, which occurred in March 2004, and the pull back of a large manufacturer client. The combined revenue impact of these two issues exceeded $8 million in the quarter which, in turn, negatively impacted gross profit.

Full Year Consolidated Results

For the twelve months ended March 31, 2005, consolidated revenues were $410.1 million, compared with revenues of $408.6 million last year. Consolidated net income for the fiscal year was $65.5 million, or $1.25 per diluted share, compared with a net loss of $19.3 million, or $0.37 per diluted share, in fiscal year 2004. Results in fiscal year 2005 included $3.1 million in losses from discontinued operations due principally to losses from the operations of non-core businesses, compared with $78.9 million of losses from discontinued operations, due principally from goodwill impairment charges, recognized in fiscal year 2004.

The company reported consolidated income from continuing operations for the year ended March 31, 2005 of $68.6 million, or $1.31 per diluted share, compared with $60.4 million, or $1.15 per diluted share, for the year ended March 31, 2004.

“We are pleased with our financial, strategic and organizational results for fiscal 2005. In addition to the financial outcome, our focus for 2005 was to establish a solid foundation for the future,” stated Dick Buell, Catalina’s chief executive officer. “We repurchased a record $44 million of Catalina stock during the fourth quarter. In the second quarter, for the first time in the history of the company, we declared an annual dividend to shareholders. The company renewed the focus on its core businesses, achieved its goal of divesting the four non-strategic businesses, and strengthened the management team with the hiring and promotion of key individuals. Catalina Marketing’s financial, strategic and organizational achievements in fiscal 2005 have created a solid foundation for future innovation and growth.”

During the third fiscal 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 both the third quarter and the full fiscal year 2005.

Pro Forma Non-GAAP Adjustments

The pro forma non-GAAP basis results presented in this news release and attached tables exclude the effect of Catalina Health Resource revenues recognized in fiscal year 2004 that had been deferred from prior fiscal years due to revenue recognition adjustments.

Fourth quarter fiscal 2005 consolidated revenues of $112.0 million reflect a decrease of 4.6% compared with non-GAAP pro forma revenues of $117.4 million for the same period last year. For the three months ended March 31, 2005, consolidated income from continuing operations was $16.0 million, or $0.30 per diluted share, compared with pro forma non-GAAP income from continuing operations of $22.4 million, or $0.43 per diluted share, for the same period last year.

Consolidated revenues of $410.1 million for the twelve months ended March 31, 2005 reflect an increase of 3.3% compared with pro forma non-GAAP revenues of $397.1 million for the same period last year. Consolidated income from continuing operations was $68.6 million, or $1.31 per diluted share, for the twelve months ended March 31, 2005, compared with pro forma non-GAAP income from continuing operations of $53.5 million, or $1.02 per diluted share, for the same period last year.

Summary of Segment Results

	Three Months Ended March 31, 2005					Three Months Ended March 31, 2004
(In thousands)	Revenues		Income/(Loss)			Revenues			Income/(Loss)
Catalina Marketing Services	$	74,641	$	20,660		$	82,101		$	22,820
Catalina Health Resource (1)		19,324		1,801			20,392			1,677
International		17,974		2,911			15,360			1,177
Corp / Eliminations		30		(9,395	)		(430	)		(3,263	)
Total Pro Forma (1)	$	111,969	$	15,977		$	117,423		$	22,411
Catalina Health Resource Adj.(1)		—		—			2,137			1,327
From Continuing Operations - GAAP	$	111,969	$	15,977		$	119,560		$	23,738
Discontinued Operations	$	—	$	(701	)	$	—		$	(32,514	)
Consolidated GAAP	$	111,969	$	15,276		$	119,560		$	(8,776	)
	Tweleve Months Ended March 31, 2005					Tweleve Months Ended March 31, 2004
(In thousands)	Revenues		Income/(Loss)			Revenues			Income/(Loss)
Catalina Marketing Services	$	269,612	$	73,879		$	282,128		$	72,724
Catalina Health Resource (1)		76,167		9,356			66,207			396
International		64,116		7,395			49,580			462
Corp / Eliminations		167		(22,034	)		(841	)		(20,062	)
Total Pro Forma (1)	$	410,062	$	68,596		$	397,074		$	53,520
Catalina Health Resource Adj.(1)		—		—			11,558			6,877
From Continuing Operations - GAAP	$	410,062	$	68,596		$	408,632		$	60,397
Discontinued Operations	$	—	$	(3,144	)	$	—		$	(78,900	)
Cumulative Effect of Acctg Change	$	—	$	—		$	—		$	(770	)
Consolidated GAAP	$	410,062	$	65,452		$	408,632		$	(19,273	)

(1) The non-GAAP pro forma revenue and net income results are a supplement to the financial data that is based on generally accepted accounting principles (GAAP). The non-GAAP pro forma results reflect adjustments to exclude non-recurring revenue resulting from the one-time deferral of CHR revenues in prior periods (and the related tax effect) resulting from revenue recognition adjustments in such prior years. The company believes this presentation provides useful information to investors because it assists investors in better understanding the company’s operations for comparability with recurring results for the future. It should be emphasized, however, that these measurements are not a substitution for GAAP-based financial statements.

Discontinued Operations

During the fiscal year ended March 31, 2005, the company completed the divestiture of its remaining non-strategic business units. Research Solutions was divested during the third quarter and Direct Marketing Services and Japan Billboard were both sold in the second quarter of fiscal year 2005. The aggregated results of these dispositions are reported in the income statement as “Discontinued Operations.”

Stock Repurchases

During the fourth quarter, the company repurchased 1,652,100 shares of its common stock for a total of $44.2 million, at an average price of $26.74 per share. The company currently has authorization to repurchase an additional $55.8 million of common stock under the September 2004 Board of Directors’ authorization.

Catalina Marketing expects to file its Annual Report on Form 10-K for the fiscal year ended March 31, 2005, with the Securities and Exchange Commission on or before June 14, 2005. Investors are urged to review the Form 10-K for a detailed discussion of the company’s financial results and business descriptions.

Webcast and Investor Conferences Scheduled

The company will host a webcast on Wednesday, May 18, 2005, at 10:00 a.m. EDT to discuss its financial results. The webcast may be accessed at http://www.corporate-ir.net/ireye/ir_site.zhtml?ticker=POS&script=1010&item_id=1056457, and will be available for replay from Wednesday, May 18, 2005 through Thursday, June 16, 2005.

The Catalina 2005 investor conference will be held in Tampa, Florida on May 25 and May 26, 2005 and will address key accomplishments for fiscal year 2005 as well as the company’s future growth initiatives. The audio portion of the investor conference, and the graphics presented, will be webcast live over the Internet. The webcast will be accessible at http://www.wsw.com/webcast/catalina.

Dick Buell, chief executive officer, will also present at Deutsche Bank’s Media/Telecom Conference at The Pierre Hotel in New York City on June 6, 2005. The presentation will be webcast and will be accessible through the Investor Relations Calendar of Events section of the company’s Web site at http://www.catalinamarketing.com.

Catalina Marketing Corporation

Selected Financial Data

(in thousands, except per share amounts)

	Three Months						Twelve Months
Periods Ended March 31	2005			2004			2005			2004
Revenues	$	111,969		$	119,560		$	410,062		$	408,632
Direct Operating Expenses		37,446			40,676			129,449			140,401
Selling, General and Administrative		40,660			32,377			129,365			124,856
Depreciation and Amortization		10,086			11,739			42,446			45,243
Income from Operations		23,777			34,768			108,802			98,132
Other Income (Expense)		1,462			(8	)		1,450			(536	)
Provision for Income Taxes		9,262			11,022			41,656			37,199
Income from Continuing Operations		15,977			23,738			68,596			60,397
Gain (Loss) from Discontinued Operations		(270	)		(32,514	)		(4,272	)		(78,900	)
Gain (Loss) from Disposition		(431	)		—			1,128			—
Income (Loss) from Discontinued Operations		(701	)		(32,514	)		(3,144	)		(78,900	)
Cumulative Effect of Change in Accounting		—			—			—			(770	)
Net Income (Loss)	$	15,276		$	(8,776	)	$	65,452		$	(19,273	)
Earnings Per Share, Basic:
Earnings Per Share from Continuing Operations	$	0.30		$	0.44		$	1.31		$	1.15
Income (Loss) from Discontinued Operations	$	(0.01	)	$	(0.61	)	$	(0.06	)	$	(1.50	)
Cumulative Effect of Change in Accounting	$	—		$	—		$	—		$	(0.02	)
Net Income (Loss) Per Common Share	$	0.29		$	(0.17	)	$	1.25		$	(0.37	)
Weighted Average Shares Outstanding		51,740			52,229			52,167			52,304
Earnings Per Share, Diluted:
Earnings Per Share from Continuing Operations	$	0.30		$	0.44		$	1.31		$	1.15
Income (Loss) from Discontinued Operations	$	(0.01	)	$	(0.61	)	$	(0.06	)	$	(1.50	)
Cumulative Effect of Change in Accounting	$	—		$	—		$	—		$	(0.02	)
Net Income (Loss) Per Common Share	$	0.29		$	(0.17	)	$	1.25		$	(0.37	)
Weighted Average Shares Outstanding		52,180			52,264			52,356			52,324

Catalina Marketing Corporation

Selected Other Data

(in thousands, except store data)

	March 31 2005		March 31 2004
Balance Sheet and Cash Flow (in thousands):
Cash	$	116,191	$	72,704
Debt	$	64,623	$	66,924
Stockholders’ Equity	$	196,374	$	184,662
Cash Flows from Operating Activities Qtr / YTD		$46,230 / $117,991		$51,838 / $138,133
Capital Expenditures Quarter / YTD		$9,594 / $22,527		$4,827 / $26,427
Catalina Marketing Services:
Number of Stores at Quarter End		17,609		17,604
Net Stores (Deinstalled) Installed During Quarter / YTD		(103) / 5		22 / 106
Promotions Printed During Quarter / YTD (in millions)		881 / 3,279		878 / 3,118
Weekly Shopper Reach at Quarter End (in millions)		218		209
Catalina Health Resource:
Number of Stores at Quarter End		12,423		11,929
Net Stores Installed (Deinstalled) During Quarter / YTD		43 / 494		(3,884) / (5,898)
Catalina Marketing International:
Number of Stores at Quarter End		5,907		5,545
Net Stores Installed During Quarter / YTD		166 / 362		287 / 1,028
Promotions Printed During Quarter / YTD (in millions)		248 / 851		230 / 757
Weekly Shopper Reach at Quarter End (in millions)		66		65

Based in St. Petersburg, FL, Catalina Marketing Corporation (www.catalinamarketing.com) was founded 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 given 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 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, the success of new services and businesses and the pace of their implementation, the company’s ability to maintain favorable client relationships, 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.

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