Michael R. O'Brien has come out of retirement to help turn around the struggling marketing company.
By MARK ALBRIGHT
Published December 1, 2003
ST. PETERSBURG - One of the co-founders of Catalina Marketing Corp., Michael R. O'Brien was coaxed out of retirement last month to take over as interim chief executive of the struggling company he once headed.
Best known for its coupon printers in supermarket checkout lines, Catalina is trying to come back from a summer of turmoil. A dispute over the timing of some revenue recognition led to a switch in auditors. That meant Catalina has no audited financial statements this year and may face revising past financial reports.
Meanwhile, four of the St. Petersburg company's six top executives, including chief executive Dan Granger, have left in the past year and the company's stock has been hammered. O'Brien, 60, is narrowing the company focus and is considering putting three of its smaller business units up for sale: a Japanese billboard company, a direct mail operation and a market research unit in California. He spoke with the St. Petersburg Times about his intentions. Here are excerpts:
Q. How long do you envision holding this job?
I told the board I think I can have it wrapped up in six months. I want to oversee the restructuring that narrows our focus to the company's core strengths so the person hired as chief executive can be a star from the beginning. We need somebody equipped to take this company to the next level. I'm more of a start-up guy.
Q. Catalina is a technology, sales and marketing company that works with retail chains, promotion budgets and the makers of consumer packaged goods. What's the profile of the perfect CEO candidate for Catalina?
Ideally, it will be someone who started out as a brand manager for a Procter & Gamble, became vice president of marketing at a place like Publix Super Markets, then was a top executive at an ad agency such a Young & Rubicam. I'm sure we'll have to settle for more like two out of three, but there might be a bonus for someone who brings us all three.
Q. Tell me a little about how you got this job?
The board approached me to come back at about the same time they were accepting Dan's resignation. While there has been a lot of speculation about the audit questions being the reason for Dan's departure, I really think it was more about eight past quarters of soft growth.
Q. When do you think Catalina's new auditors will complete their review?
I want them to do it right, so I'm not putting any pressure on them. I'm hoping they will be done by the end of the first quarter next year. My gut feeling is they'll confirm us as better than 98 percent of all companies in the United States.
Q. Most of the supermarkets and drugstore chains that use Catalina's systems have been losing market share for years to discount chains like Wal-Mart. Where will Catalina's future growth come from?
We think we are just scratching the surface of our potential in Europe. In Japan, we're just getting started, but find our coupon redemptions are higher than any place else in the world. We'll be unveiling a new application for supermarket retailers this winter.
Our media systems that print advertising in newsletters printed at pharmacy counters have been hurt by the new rules regulating health claims of prescription drugs. Our system is used by the FDA, but drugstores and drugmakers are being very careful about what they say in the copy so approval takes a long time.
We see opportunities in other alternative channels such as convenience stores (where Catalina is testing discount coupon printers hooked up to the gas pumps). We're in some Super Kmarts now. We're working on a few concepts we hope will help us get an entree to in-store media services in Wal-Mart.
Q. What about three to five years from now?
We are doing a lot of the R&D on what happens when (retailers replace laser scanners with wireless chips embedded in packages that identify not only the price and stock number of an item but where it is, who bought it and how). We've got some promising ideas, but I cannot tell you more.
Q. Why sell the direct marketing unit?
That's just a tough business right now, and our group has not been that good at it.
Q. You attended the University of Kansas on a football scholarship. How did that go?
I blew my knee out playing linebacker, so I switched to center. Gale Sayers was our star running back back then. So I had his cleat prints on both the front and back of my jersey.
