Catalina Marketing Announces Strong Financial Results for the Quarter and Nine-Month Fiscal Year Ended December 31, 2006.

ST. PETERSBURG, Fla. -- Catalina Marketing Corporation (NYSE:POS):

* Quarterly revenues grew 26.6% to $123.1 million; 9 month revenues up 16.8% to $340.9 million

* EPS includes current year adoption of FAS123R; excluding this item, EPS grew $.06 to $0.35, an increase of 19.6% for the quarter and up $0.13 to $1.09, an increase of 13% for the 9 months

Catalina Marketing Corporation (NYSE:POS) today reported financial results for the quarter and nine months ended December 31, 2006. As previously disclosed, the company has made the transition to its new year-end and will report results to the Securities and Exchange Commission and the company's shareholders for the nine-month period ended December 31, 2006.

For the three months ended December 31, 2006, consolidated revenues were $123.1 million, a 26.6% increase over revenues of $97.2 million in the same period of the prior year. Consolidated net income, which reflected increased spending associated with the color printer initiative in the current year quarter, was $13.6 million, or $0.29 per diluted share, compared with net income of $14.2 million, or $0.29 per diluted share, in the same quarter of the prior year. Excluding the impact of stock-based compensation expense for comparison purposes, net income for the quarter ended December 31, 2006 increased 14.6% to $16.3 million, and earnings of $0.35 per diluted share represented growth of 19.6%. As previously reported, the company adopted SFAS No. 123R, Share-Based Payment, effective April 1, 2006, resulting in incremental expense recorded in the current year that was not reflected in prior years. Results for the three months ended December 31, 2006 included stock-based compensation expense of $2.7 million under the fair value method, net of related income taxes.

For the nine-month period ended December 31, 2006, consolidated revenues were $340.9 million, an increase of 16.8% over revenues of $291.8 million in the comparable nine-month period of the prior year. Consolidated net income, which reflected significant increased spending associated with the color printer and channel expansion initiatives in the current year period, was $42.8 million, or $0.92 per diluted share, compared with net income of $47.6 million, or $0.96 per diluted share, in the prior year period. Excluding the impact of stock-based compensation for comparison purposes, net income for the nine months ended December 31, 2006 increased 6.7% to $50.8 million, and earnings of $1.09 per diluted represented growth of 13%. Results for the nine months ended December 31, 2006 included stock-based compensation expense of $8.0 million, net of related income taxes.

Catalina Marketing CEO Dick Buell said, "The results of the quarter and the last nine months reflect outstanding growth and progress, delivering strong double digit revenue growth in all three businesses. We made excellent progress on our key strategic initiatives: channel expansion, with the addition of Walgreens and K-Mart; the transformation to color prints, with over 100,000 color printers now installed across our domestic grocery network; new geographies and new customers in our international business; and the momentum and energy around CHR's remarkable growth. Strong operating profits were achieved in CMI and CHR, more than offsetting the continued investment in CMS."

Mr. Buell continued, "We are excited by the remarkable progress of our color printer initiative and while the impact of this investment continues to be reflected in our operating margins, the results compare favorably with our prior twelve-month operating margin guidance that estimated a 3 to 4 percentage point decline on a consolidated basis and a 5 to 7 percentage point decline at CMS, excluding the impact of stock-based compensation expense. The outstanding consolidated performance reported this quarter and for the nine months to date demonstrates the power of Catalina to balance opportunities and challenges across our businesses to deliver strong financial results. While we continue to recognize that performance may vary from quarter to quarter, we remain focused and excited about the long term growth prospects this company can achieve."

Segment Results:

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Share Repurchase Authorization:

During the quarter ended December 31, 2006, the company repurchased 249,193 shares of its common stock for a total of $7.0 million, at an average price of $28.13 per share. During the nine-month fiscal year just ended, the company purchased 536,944 shares of its common stock for a total of $15.0 million, at an average price of $27.94 per share. As of December 31, 2006, the company had authority to repurchase an additional $126.5 million of common stock under authorization of the Board of Directors.

Update on Previously Announced Exploration of Possible Sale

On December 8, 2006, Catalina announced that it had engaged Goldman Sachs & Co., as financial advisor, following receipt of an unsolicited expression of interest from a third-party private equity firm with respect to the acquisition of the company. The company's board of directors formed a special committee which authorized Goldman Sachs to solicit expressions of interest from other third parties and advise it with respect to the board's consideration of any expressions of interest and the advisability of pursuing a sale of the company. As a result of this process, the company did receive offers at premiums to current trading values of the Company's shares. However, the special committee decided not to proceed with any of the interested parties because it was not in the best interest of the company's stockholders based on a variety of factors including the strength of the company's operating performance as well as the long-term prospects and opportunities for the company and its operating units. The committee informed the other members of the board of directors of its decision.

As noted in our December 8, 2006 press release, as a matter of policy, the company does not comment on or provide the market information as to the status of any informal expressions of interest or formal proposals or offers presented to the company from time to time, or the course of discussions with any prospective counterparties, nor will it comment upon any rumors with regard to either of the foregoing.

Webcast and Investor Conference Scheduled:

The company will host a webcast on Wednesday, February 14, 2007, at 10:00 a.m. EST to discuss its financial results for its quarter ended December 31, 2006. The webcast may be accessed at http://phx.corporate-ir.net/phoenix.zhtml?c=72727&p=irol-calendar and will be available for replay from Wednesday, February 14, 2007 through Monday, March 19, 2007.

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About Catalina Marketing Corporation

Based in St. Petersburg, FL, Catalina Marketing Corporation (www.catalinamarketing.com) was founded over 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 provided to any outside party without the express permission of the consumer.

Cautionary Statement

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, potential complications, hardware and software issues and delays related to the schedule, installation and operation of color printers, the effectiveness of color printers to increase sales and redemption rates or provide a more effective advertising medium, 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 including as it relates to the installation of color printers in existing and future retail channels, the acceptance by the company's manufacturer clients and retailers of color printers and related new and additional terms and conditions, the success of new services and businesses and the pace of their implementation, the company's ability to maintain favorable client and retailer relationships, and the outcome and impact of the pending shareholder class action and derivative lawsuits.