Catalina Posts 4Q Profit; Picks up Walgreens as a Client

Behavior-based marketing services firm Catalina Marketing reported a fourth quarter profit of $15.3 million, reversing a loss of 8.8 million one year ago.

Sales dropped off 6% to $112 million from $119.6 million, due to the sell off in March 2004 of its loyalty card business and the pull back of a large manufacturer client. The quarter ended March 31.

“The combined revenue impact of these two issues exceeded $8 million in the quarter which, in turn, negatively impacted gross profit,” the company said in a statement.

During the past year, Catalina completed the divestiture of several businesses it termed non-strategic: Research Solutions, Direct Marketing Services and Japan Billboard.

The results included a $700,00 loss from discontinued operations, versus a $32.5 million loss one year ago from discontinued operations due to goodwill impairment charges.

For the full year, revenues were $410.1 million compared to $408.6 million last year. Income for the year was $65.5 million compared to a loss of $19.3 million.

In a separate development, Catalina Marketing has inked a deal with Walgreens to install its Catalina Marketing Network, its consumer checkout communication system, at the front checkout counters in the drugstore chain’s more than 4,700 stores in the United States.

The deal is expected to deliver relevant marketing communications to Walgreen customers to motivate repeat visits, increase spending, build loyalty and generate trial.

This is the second deal for the two. In 1999, Walgreen signed with Catalina Health Resource, a division of Catalina Marketing, to distribute a patient education sheet with each prescription sold at its pharmacies.

The company, based in St. Petersburgh, FL, complies customer information from supermarket checkout scanners to and then uses that purchase behavior to target promotions.