Catalina Marketing Reports Financial Results for the Fourth Quarter and Fiscal Year Ended March 31, 2006

For the three months ended March 31, 2006, consolidated revenueswere $125.9 million, a 12.5% increase over revenues of $112.0 millionin the same period of fiscal 2005. Consolidated net income for thefourth quarter increased $8.7 million, or 57.2%, to $24.0 million, or$0.51 per diluted share, compared with net income of $15.3 million, or$0.29 per diluted share, in the fourth quarter of fiscal 2005. Fourthquarter results in fiscal 2005 included $0.7 million in losses fromdiscontinued operations due principally to losses from the disposal ofnon-core businesses.

The company reported consolidated income from continuingoperations for the quarter ended March 31, 2006 of $24.0 million, or$0.51 per diluted share, an increase of 50.3% over income fromcontinuing operations of $16.0 million, or $0.30 per diluted share,for the quarter ended March 31, 2005.

Twelve-Month Consolidated Results

For the fiscal year ended March 31, 2006, consolidated revenueswere $417.7 million, compared with revenues of $410.1 million infiscal 2005. Consolidated net income for the 2006 fiscal year was$71.6 million, or $1.46 per diluted share, compared with net income of$65.5 million, or $1.25 per diluted share, in fiscal 2005. Results forfiscal year 2005 included a loss from discontinued operations of $3.1million related to the operation and divestiture of non-corebusinesses.

The company reported consolidated income from continuingoperations for the twelve months ended March 31, 2006 of $71.6million, or $1.46 per diluted share, compared with $68.6 million, or$1.31 per diluted share, in fiscal 2005.

During the prior fiscal year, the company received a favorableruling related to a state sales tax assessment, and as a resultreversed into income a $4.4 million accrued liability, which had beenrecognized as expense in prior periods. The reversal of this liabilityresulted in a favorable impact, net of related income taxes, ofapproximately $0.05 per diluted share. On a non-GAAP pro formabasis(a), excluding the impact of the prior year favorable taxadjustment, fiscal 2006 earnings from continuing operations of $1.46per diluted share improved $0.20 compared with $1.26(a) per dilutedshare in fiscal 2005.

"We have consistently communicated that the fourth quarter of thisfiscal year would be an important step that reflects the fundamentalchanges we have been making to grow the top line, and create strongprofit growth. We are pleased to report that the company deliveredbased on that focus in the fourth quarter," chief executive officer,Dick Buell, commented. "This improvement is a result of superiorbusiness unit performance and appropriate share repurchases, combinedwith disciplined cost controls."

Buell continued, "Looking forward, our management team continuesto focus on investing for sustainable and long term profit growth. Weare excited about the opportunity for growth over the next three yearsas we expect continued solid performance by CMI and CHR, and a returnto consistent growth at CMS, as a result of the roll-out of colorprinters and expansion into new channels. To facilitate this, we willcontinue to make significant investments on our balance sheet andincome statement in fiscal 2007, positioning us to recognize profitgrowth again in fiscal 2008."
Three Months Three Months Three Months
Ended Ended Ended
March 31, 2006 March 31, 2005 March 31, 2006
Percent Change
(In millions) Revenues Net Revenues Net Revenues Net
Income/ Income/ Income/
(Loss) (Loss) (Loss)

Catalina Marketing
Services $ 78.1 $ 22.6 $ 74.7 $ 20.7 4.7% 9.5%
Catalina Health
Resource 27.0 5.5 19.3 1.8 39.9% 207.4%
Catalina Marketing
International 20.8 1.9 18.0 2.9 15.6% (35.1%)
Corp / Eliminations - (6.0) - (9.4) - 35.8%
-------------------------------- -----------------
From Continuing
Operations $125.9 $ 24.0 $112.0 $ 16.0 12.5% 50.3%
-------------------------------- -----------------
Discontinued
Operations $ - $ - $ - $ (0.7) - 100.0%
-------------------------------- -----------------
Consolidated $125.9 $ 24.0 $ 112.0 $ 15.3 12.5% 57.2%
================================ =================



Twelve Months Twelve Months Twelve Months
Ended Ended Ended
March 31, 2006 March 31, 2005 March 31, 2006
Percent Change

(In millions) Revenues Net Revenues Net Revenues Net
Income/ Income/ Income/
(Loss) (Loss) (Loss)

Catalina Marketing
Services $254.4 $ 67.7 $269.6 $ 73.9 (5.6%) (8.3%)
Catalina Health
Resource 89.5 16.4 76.2 9.3 17.5% 75.6%
Catalina Marketing
International 73.8 6.9 64.1 7.4 15.1% (6.7%)
Corp / Eliminations - (19.4) 0.2 (22.0) (94.7%) 11.9%
-------------------------------- -----------------
From Continuing
Operations $417.7 $ 71.6 $410.1 $ 68.6 1.9% 4.4%
-------------------------------- -----------------
Discontinued
Operations $ - $ - $ - $ (3.1) - 100.0%
-------------------------------- -----------------
Consolidated $417.7 $ 71.6 $410.1 $ 65.5 1.9% 9.4%
================================ =================

Summary of Color Printer Commercialization Metrics

The following table summarizes the status and estimates of certainmetrics associated with the color printing project. These metrics arebased on preliminary results from a multi-store pilot program, certainassumptions and estimates regarding the timing of installation,capital expenditures and expenses related to the project, and theperformance of the color printers once installed in stores. Further,these metrics are subject to the cautionary language set forth belowand the risk factors included in Item 7 of the Company's Annual Reporton form 10-K for the fiscal year ended March 31, 2005.

Metric Status / Estimate

Stores in Current Pilot Program 20

Installation Time Frame Mid 2006 through December 2007

Printers Scheduled to be Replaced Approximately 145,000

Standard Price Increase $0.02 per Standard, Color
Communication

Preliminary Redemption (10 store test) 25%+ Higher than Thermal

Speed of Color Printer Equivalent to the Current
Thermal Printers

Investment in Color Initiative Appproximately $100 million

Depreciable Life of Printers 7 Years

FY 2007 Operating Margin Impact - CMS Decline Approximately 5.0 to
7.0 ppts

FY 2007 Operating margin Impact - CMC Decline Approximately 3.0 to
4.0 ppts

Targeted Return on Capital Over 30% for Catalina Marketing
Corporation

Stock Repurchases

During the fourth quarter, the company repurchased 1,723,600shares of its common stock for a total of $39.1 million, at an averageprice of $22.71 per share. During the fiscal year just ended, thecompany purchased 4,781,200 shares of its common stock for a total of$114.3 million, at an average price of $23.91 per share. The companycurrently has authority to repurchase an additional $41.5 million ofcommon stock under the $100 million August 2005 Board of Directorsauthorization.

Webcast and Investor Conference Scheduled

The company will host a webcast on Thursday, May 4, 2006 at 10:00a.m. EDT to discuss its financial results for its fourth quarter andfiscal year 2006. The webcast may be accessed athttp://www.corporate-ir.net/ireye/ir_site.zhtml?ticker=POS&script=1000and will be available for replay from Thursday, May 4, 2006 throughThursday, June 1, 2006.

In addition, on Friday, May 19, 2006, the company will sponsor anInvestor Conference in New York. The event will feature Dick Buell,chief executive officer, Rick Frier, chief financial officer, andrepresentatives from each of the business segments. A webcast will beavailable the day of the event and may be accessed through theInvestor Relations Calendar of Events section of the company's website(http://www.catalinamarketing.com).
Catalina Marketing Corporation
Selected Operating Data
(in thousands, except per share amounts)

Periods Ended March 31 Three Months Twelve Months
2006 2005 2006 2005


Revenues $125,913 $111,969 $417,746 $410,062

Direct Operating Expenses 38,829 37,446 135,475 129,449

Selling, General and
Administrative 40,822 40,660 132,098 129,365

Depreciation and Amortization 9,306 10,086 35,986 42,446
--------- --------- --------- ---------

Income from Operations 36,956 23,777 114,187 108,802

Other Income (Expense) (60) 1,462 (511) 1,450

Provision for Income Taxes 12,884 9,262 42,060 41,656
--------- --------- --------- ---------

Income from Continuing
Operations 24,012 15,977 71,616 68,596

Gain (Loss) from Discontinued
Operations - (270) - (4,272)
Gain (Loss) from Disposition - (431) - 1,128
--------- --------- --------- ---------
Income (Loss) from Discontinued
Operations - (701) - (3,144)

--------- --------- --------- ---------
Net Income $ 24,012 $ 15,276 $ 71,616 $ 65,452
========= ========= ========= =========

-------------------------------------------------- -------------------

Earnings Per Share, Basic:

Earnings Per Share from
Continuing Operations $ 0.51 $ 0.30 $ 1.47 $ 1.31
Income (Loss) from Discontinued
Operations $ - $ (0.01) $ - $ (0.06)
--------- --------- --------- ---------
Net Income Per Common Share $ 0.51 $ 0.29 $ 1.47 $ 1.25

Weighted Average Shares
Outstanding 47,225 51,740 48,629 52,167

-------------------------------------------------- -------------------

Earnings Per Share, Diluted:

Earnings Per Share from
Continuing Operations $ 0.51 $ 0.30 $ 1.46 $ 1.31
Income (Loss) from Discontinued
Operations $ - $ (0.01) $ - $ (0.06)
--------- --------- --------- ---------
Net Income Per Common Share $ 0.51 $ 0.29 $ 1.46 $ 1.25

Weighted Average Shares
Outstanding 47,429 52,180 48,925 52,356
----------------------------------------------------------------------
Catalina Marketing Corporation
Selected Other Data
(in thousands, except store data)

March 31, March 31,
2006 2005

Selected Balance Sheet and Cash
Flow Data (in thousands):

Cash 28,117 116,191

Debt 61,856 64,623

Stockholders' Equity 143,157 196,374

Cash Flows from Operating
Activities - Quarter / YTD 39,649 / 101,674 46,230 / 117,991

Capital Expenditures - Quarter /
YTD 20,758 / 60,254 9,594 / 22,527

Net Borrowings/(Payments) on LT
Debt - Quarter / YTD 15,240 / 1,995 (160) / (2,776)

Repurchase of Common Stock -
Quarter / YTD 39,139 / 114,317 44,174 / 44,174

Dividends Paid - Quarter / YTD - / 14,451 - / 15,653

Catalina Marketing Services:

Number of Stores at Quarter End 21,048 17,609

Net Stores (Deinstalled) Installed
During Quarter / YTD 3,260 / 3,439 (103) / 5

Promotions Printed During Quarter
/ YTD (in millions) 948 / 3,117 881 / 3,279

Weekly Shopper Reach at Quarter End
(in millions) 232 218

Catalina Health Resource:

Number of Stores at Quarter End 12,780 12,423

Net Stores Installed (Deinstalled)
During Quarter / YTD 159 / 357 43 / 494

Catalina Marketing International:

Number of Stores at Quarter End 7,316 5,907

Net Stores Installed During Quarter
/ YTD 354 / 1,409 166 / 362

Promotions Printed During Quarter
/ YTD (in millions) 412 / 1,186 235 / 851

Weekly Shopper Reach at Quarter End
(in millions) 86 66

Regulation "G" Requirements

(a) The following table provides a reconciliation of thedifferences between the non-GAAP financial measure presented hereinand the most directly comparable financial measure calculated andpresented in accordance with GAAP.

March 31, March 31,
2006 2005
Diluted Earnings per Share from Continuing
Operations:

Diluted Earnings per Share from Continuing
Operations - GAAP $ 1.46 $ 1.31

Reversal of a State Sales Tax Assessment (a) - (0.05)
---------- ----------

Diluted Earnings per Share from Continuing
Operations - Pro Forma $ 1.46 $ 1.26
========== ==========


(a) The non-GAAP pro forma earnings per share from continuing
opearations 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 the non-recurring
favorable ruling related to a state sales tax assessment that
occurred in the third quarter of fiscal 2005. 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.

About Catalina Marketing Corporation

Based in St. Petersburg, Fla., Catalina Marketing Corporation(http://www.catalinamarketing.com) was founded over 20 years ago basedon the premise that targeting communications based on actual purchasebehavior would generate more effective consumer response. Today,Catalina Marketing combines unparalleled insight into consumerbehavior with dynamic consumer access. This combination of insight andaccess provides marketers with the ability to execute behavior-basedmarketing programs, ensuring that the right consumer receives theright message at exactly the right time. Catalina Marketing offers anarray of behavior-based promotional messaging, loyalty programs anddirect-to-patient information. Personally identifiable data that maybe collected from the company's targeted marketing programs, as wellas its research programs, are never sold or provided to any outsideparty without the express permission of the consumer.

Certain statements in the preceding paragraphs areforward-looking, and actual results may differ materially. Statementsnot based on historic facts involve risks and uncertainties,including, but not limited to, potential complications, hardware andsoftware issues and delays related to the schedule, installation andoperation of color printers, the effectiveness of color printers toincrease sales and redemption rates or provide a more effectiveadvertising medium, the changing market for promotional activities,especially as it relates to policies and programs of packaged goodsand pharmaceutical manufacturers and retailers, government andregulatory statutes, rules, regulations and policies, the effect ofeconomic and competitive conditions and seasonal variations, actualpromotional activities and programs with the company's customers, thepace of installation of the company's networks including as it relatesto the installation of color printers and the Company's networks inexisting and future retail channels, the acceptance by the company'smanufacturer clients and retailers of color printers and related newand additional terms and conditions, the success of new services andbusinesses and the pace of their implementation, the company's abilityto maintain favorable client and retailer relationships, and theoutcome and impact of the pending shareholder class action andderivative lawsuits.