Exhibit 99.2
FINANCIAL SUPPLEMENT
March 31, 2016
Monster Worldwide, Inc. (together with its consolidated subsidiaries, the “Company,” “Monster,” “we,” “our” or “us”) provides this supplement to assist investors in evaluating the Company’s financial and operating metrics. We suggest that the notes to this supplement be read in conjunction with the financial tables. The financial information included in this supplement contains certain Non-GAAP financial measures. These measures should be considered in addition to results prepared in accordance with generally accepted accounting principles (“GAAP”), but are not a substitute for, or superior to, GAAP results. The Non-GAAP measures included in this supplement have been reconciled to the most comparable GAAP measure. The Company intends to update the financial supplement on a quarterly basis.
Notes to Financial Supplement
Presentation
Stock-based compensation
Non-cash, stock-based compensation expense has been excluded from our Non-GAAP financial statements for all periods presented.
Reallocate to Accelerate
On February 10, 2015, the Company committed to take a series of cost savings initiatives to reduce costs globally while continuing to support the Company’s strategy. The initiatives included a global workforce reduction of approximately 300 associates, lease exit costs, impairment of certain assets, and office and general expense controls, resulting in annualized cost savings of $40 million. The Company incurred $20.1 million of charges relating to this program during the three months ended March 31, 2015, inclusive of $4.2 million of non-cash charges. These charges have been excluded from our Non-GAAP financial statements for the three months ended March 31, 2015. No charges related to these initiatives were recognized in the first quarter of 2016, and the Company does not expect to incur additional charges in future periods related to this program.
Separation Charges and Advisory Fees
During the three months ended March 31, 2016, the Company incurred $0.4 million of separation charges relating to targeted global headcount reductions, primarily due to the reorganization of the sales force in North America. In addition, the Company incurred $1.6 million of management advisory fees during the quarter. These charges have been excluded from our Non-GAAP financial statements for the three months ended March 31, 2016.
3.50% convertible senior notes due 2019
On October 22, 2014, the Company consummated an offering of $143.8 million aggregate principal amount of its 3.50% convertible senior notes due 2019 (the “Notes). The Company received net proceeds of $139.0 million from the sale of the Notes, after deducting fees and expenses of $4.7 million. The Notes are unsecured, senior obligations of Monster, that bear interest at a rate of 3.50% per annum, payable in arrears on April 15 and October 15 of each year to holders of record at the close of business on the preceding April 1 and October 1, respectively. The Notes will mature on October 15, 2019, unless converted or repurchased in accordance with their terms prior to such date.
In connection with the offering of the Notes, Monster entered into capped call transactions with an affiliate of one of the initial purchasers. The Company used $16.5 million of the net proceeds to pay for the cost of the capped call transactions, $82.5 million to repay in full a term loan outstanding as of the date of issuance, and $40.0 million to repay a portion of the loans outstanding under the Company’s revolving credit facility.
In accordance with ASC 470-20, Debt with Conversion and Other Options, the Notes were separated into debt and equity components and assigned a fair value. The value assigned to the debt component was the estimated fair value, as of the issuance date, of similar debt without the conversion feature. The difference between the cash proceeds and this estimated fair value represents the value which was assigned to the equity component and was recorded as a debt discount. The debt discount is being amortized using the effective interest method from the date of issuance through the October 15, 2019 maturity date.
The initial debt component of the Notes was valued at $122.8 million, based on the contractual cash flows discounted at an appropriate market rate for non-convertible debt at the date of issuance. The carrying value of the permanent equity component reported in additional paid-in-capital was initially valued at $20.2 million, which is net of $0.7 million of fees and expenses allocated to the equity component.
On March 22, 2016, the Company entered into a privately negotiated agreement to repurchase $10 million in aggregate principal amount of the Notes for $9.5 million, plus accrued interest. The Board of Directors of the Company has authorized the Company to employ funds allocated to its stock repurchase program approved in October 2015 for the repurchase of the Notes. The transaction closed on March 28, 2016, and it was determined that the repurchase should be accounted for as a debt extinguishment in accordance with ASC 470 - Debt. Following the derecognition of the associated debt discount and deferred financing fees, a loss on extinguishment of $0.04M was recorded during the first quarter of 2016. In connection with the repurchase, the Company unwound a portion of the capped call transactions entered into in connection with the issuance of the Notes. As a result of the unwind, the Company received $0.4 million on March 31, 2016, which was recognized as an increase to additional paid-in-capital during the first quarter of 2016.
As of March 31, 2016, $133.8 million in aggregate principal amount of the Notes was outstanding.
The Company recognized $1.0 million of amortization of the debt discount during the three months ended March 31, 2016 and 2015. The Company recognized $0.2 million of amortization of deferred financing fees relating to the Notes during the three months ended March 31, 2016 and 2015. These charges have been excluded from our Non-GAAP financial statements for the respective periods.
Discontinued operations
In December 2013, the Company sold a 49.99% interest in JobKorea Ltd. (“JobKorea”), the Company’s then-wholly owned subsidiary in South Korea, to H&Q Korea. On October 12, 2015, the Company sold its remaining 50.01% ownership position in JobKorea to H&Q Korea for KRW 101 billion, or approximately $85.0 million. The transaction is consistent with Monster’s continued strategy of unlocking value and sharpening its focus on the Company’s core online recruitment platform.
Operating results for JobKorea, which had previously been reported in the Careers-International segment and included in the Company’s consolidated statement of operations, have been reclassified as discontinued operations for all periods presented. Additionally, the Company recorded allocated corporate tax associated with the sale of JobKorea to discontinued operations for all periods presented. Accordingly, the Company recorded income from discontinued operations, net of tax, of $0 and $1.8 million in the three months ended March 31, 2016 and 2015, respectively. These charges have been excluded from our Non-GAAP financial statements for the respective periods.
Gain on partial sale of equity method investment
In 2008, the Company acquired a 50% equity interest in a company located in Australia, CareerOne Pty Limited (“CareerOne”). On March 31, 2015, the Company sold the majority of its 50% equity interest in CareerOne in an arms-length transaction, leaving the Company with a 10% interest. Total cash received from the transaction was $9.1 million, and the sale resulted in the recognition of a pre-tax gain of $8.8 million in the first quarter of 2015. This gain has been excluded from our Non-GAAP financial statements for the three months ended March 31, 2015. As a result of the sale, the Company no longer has the ability to exercise significant influence over CareerOne. Therefore, effective March 31, 2015, the remaining 10% interest retained by the Company is being accounted for under the cost method.
Income tax
Effective the first quarter of 2015, the Company has begun to utilize a fixed long-term projected Non-GAAP tax rate for reporting operating results and for planning, forecasting, and analyzing future periods. This change provides better consistency across the interim reporting periods by eliminating the effects of non-recurring and period-specific items. The Non-GAAP tax rate is 35%. See the detailed discussion in the “Notes Regarding the Use of Non-GAAP Financial Measures” section below.
Reclassifications
Certain reclassifications of prior year amounts have been made for consistent presentation.
Notes Regarding the Use of Non-GAAP Financial Measures
Non-GAAP revenue, operating expenses, operating income, operating margin, income from continuing operations, income from discontinued operations, net of tax, net income, net income attributable to Monster Worldwide, Inc., and diluted earnings per share attributable to Monster Worldwide, Inc. all exclude certain pro-forma items including: non-cash stock based compensation expense; costs incurred in connection with the Company’s restructuring programs; separation charges associated with the resignation of the Company’s former Chief Executive Officer; certain other separation charges; non-cash impairment charges; impairment of capitalized software costs; certain management advisory fees; amortization of the debt discount and deferred financing costs associated with our 3.50% convertible senior notes due 2019; the results of our former South Korean subsidiary as it has been classified as discontinued operations; net gain recognized on the sale of our former South Korean subsidiary; and gain on partial sale of an equity method investment.
In the first quarter of the calendar year 2015, the Company began to utilize a fixed long-term projected Non-GAAP tax rate for reporting operating results and for planning, forecasting, and analyzing future periods. This change provides better consistency across the interim reporting periods by eliminating the effects of non-recurring and period-specific items. When projecting this long-term rate, the Company evaluated a five-year financial projection comprising the current and the next four years that exclude the income tax effects of the Non-GAAP pre-tax items described above, eliminates the effects of non-recurring and period specific items which can vary in size and frequency, and is reflective of the anticipated future geographic mix of income among tax jurisdictions. The projected rate also assumes no new acquisitions or disposals in the five-year period, eliminates the effect of tax valuation allowances, and takes into account other factors including the Company’s current tax structure, its existing tax positions in various jurisdictions and key legislation in major jurisdictions where the Company operates. The Non-GAAP tax rate is 35%. The Company intends to re-evaluate this long-term rate on an annual basis or if any significant events that may materially affect this long-term rate occur. This long-term rate could be subject to change for a variety of reasons, which may include (but are not limited to) for example, significant changes in the geographic earnings mix including future acquisition or disposition activity, having less income than anticipated, or fundamental tax law changes in major jurisdictions where the Company operates.
Non-GAAP diluted shares includes the impact, based on the average share price for the period, of the Company’s outstanding capped call transactions, which are anti-dilutive in GAAP earnings per share, but are expected to mitigate the dilutive effect of the Company’s 3.50% convertible senior notes due 2019.
The Company uses these Non-GAAP measures for reviewing the ongoing results of the Company’s core business operations and in certain instances, for measuring performance under certain of the Company’s incentive compensation plans. These Non-GAAP measures may not be comparable to similarly titled measures reported by other companies.
Cash EBITDA is defined as income (loss) from continuing operations or net income (loss), as applicable, before income (loss) in equity interests, net, provision for (benefit from) income taxes, interest and other, net, gain on partial sale of equity method investment, depreciation, amortization, non-cash compensation expense and certain non-cash impairment charges. The Company considers Cash EBITDA to be an important indicator of its operational strength which the Company believes is useful to management and investors in evaluating its operating performance. Cash EBITDA is a Non-GAAP measure and may not be comparable to similarly titled measures reported by other companies.
Adjusted EBITDA is defined as income (loss) from continuing operations or net income (loss), as applicable, before income (loss) in equity interests, net, provision for (benefit from) income taxes, interest and other, net, gain on partial sale of equity method investment, depreciation, amortization, non-cash compensation expense, non-cash impairment charges, costs incurred with the Company’s restructuring programs, and the impact of the pro-forma items discussed above. The Company considers Adjusted EBITDA to be an important indicator of its operational strength which the Company believes is useful to management and investors in evaluating its operating performance. Adjusted EBITDA is a Non-GAAP measure and may not be comparable to similarly titled measures reported by other companies.
Free cash flow is defined as cash flows from operating activities less capital expenditures. Free cash flow is considered a liquidity measure and provides useful information about the Company’s ability to generate cash after investments in property and equipment. Free cash flow reflected herein is a Non-GAAP measure and may not be comparable to similarly titled measures reported by other companies. Free cash flow does not reflect the total change in the Company’s cash position for the period and should not be considered a substitute for such a measure.
Net cash is defined as cash and cash equivalents less total debt. Total available liquidity is defined as cash and cash equivalents, plus unused borrowings under our credit facility. The Company considers net cash and total available liquidity to be important measures of liquidity and indicators of its ability to meet its ongoing obligations. The Company also uses net cash and total available liquidity, among other measures, in evaluating its choices for capital deployment. Net cash and total available liquidity are presented herein as Non-GAAP measures and may not be comparable to similarly titled measures used by other companies.
Monster Worldwide, Inc.
Statements of Operations
(unaudited, in thousands, except per share amounts)
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Trended Data |
| Summary P&L Information | Q1 2015 | | Q2 2015 | | Q3 2015 | | Q4 2015 | | FY 2015 | | Q1 2016 |
| Careers - North America | $ | 122,392 |
| | $ | 119,844 |
| | $ | 119,449 |
| | $ | 112,121 |
| | $ | 473,806 |
| | $ | 109,194 |
|
| Careers - International | 50,490 |
| | 47,886 |
| | 47,633 |
| | 47,088 |
| | 193,097 |
| | 48,593 |
|
| Revenue | 172,882 |
| | 167,730 |
| | 167,082 |
|
| 159,209 |
| | 666,903 |
| | 157,787 |
|
| Salary and related | 84,945 |
| | 81,750 |
| | 76,419 |
| | 71,088 |
| | 314,202 |
| | 77,070 |
|
| Office and general | 33,304 |
| | 31,889 |
| | 32,552 |
| | 37,848 |
| | 135,593 |
| | 31,756 |
|
| Marketing and promotion | 30,631 |
| | 30,416 |
| | 30,044 |
| | 28,086 |
| | 119,177 |
| | 29,482 |
|
| Restructuring and other special charges | 20,092 |
| | 5,915 |
| | 2,780 |
| | 3,992 |
| | 32,779 |
| | — |
|
| Depreciation expense | 10,826 |
| | 10,442 |
| | 10,416 |
| | 10,034 |
| | 41,718 |
| | 9,352 |
|
| Stock-based compensation | 4,405 |
| | 3,613 |
| | 3,368 |
| | 287 |
| | 11,673 |
| | 1,079 |
|
| Amortization of intangibles | 664 |
| | 667 |
| | 670 |
| | 671 |
| | 2,672 |
| | 673 |
|
| Operating expenses | 184,867 |
| | 164,692 |
| | 156,249 |
| | 152,006 |
| | 657,814 |
| | 149,412 |
|
| | | | | | | | | | | | |
| Operating (loss) income | (11,985 | ) | | 3,038 |
| | 10,833 |
| | 7,203 |
| | 9,089 |
| | 8,375 |
|
| Gain on partial sale of equity method investment | 8,849 |
| | — |
| | — |
| | — |
| | 8,849 |
| | — |
|
| Interest and other, net | (3,206 | ) | | (3,409 | ) | | (3,674 | ) | | (3,423 | ) | | (13,712 | ) | | (3,477 | ) |
| (Loss) income before income taxes and (loss) income in equity interests, net | (6,342 | ) | | (371 | ) | | 7,159 |
| | 3,780 |
| | 4,226 |
| | 4,898 |
|
| (Benefit from) provision for income taxes | (13,945 | ) | | 1,819 |
| | (2,361 | ) | | 6,018 |
| | (8,469 | ) | | 3,307 |
|
| (Loss) income in equity interests, net | (220 | ) | | 292 |
| | 249 |
| | 144 |
| | 465 |
| | 250 |
|
| Income (loss) from continuing operations | 7,383 |
| | (1,898 | ) | | 9,769 |
| | (2,094 | ) | | 13,160 |
| | 1,841 |
|
| Income from discontinued operations, net of tax | 1,806 |
| | 2,036 |
| | 2,163 |
| | 58,508 |
| | 64,513 |
| | — |
|
| Net income | 9,189 |
| | 138 |
| | 11,932 |
| | 56,414 |
| | 77,673 |
| | 1,841 |
|
| Net income attributable to noncontrolling interest | (1,019 | ) | | (1,181 | ) | | (1,512 | ) | | (349 | ) | | (4,061 | ) | | — |
|
| Net income (loss) attributable to Monster Worldwide, Inc. | $ | 8,170 |
| | $ | (1,043 | ) | | $ | 10,420 |
| | $ | 56,065 |
| | $ | 73,612 |
| | $ | 1,841 |
|
| | | | | | | | | | | | |
| Basic earnings (loss) per share attributable to Monster Worldwide, Inc.: | | | | | | | | | | | |
| Income (loss) from continuing operations | $ | 0.08 |
| | $ | (0.02 | ) | | $ | 0.11 |
| | $ | (0.02 | ) | | $ | 0.15 |
| | $ | 0.02 |
|
| Income from discontinued operations, net of tax | 0.01 |
| | 0.01 |
| | 0.01 |
| | 0.64 |
| | 0.67 |
| | — |
|
| Basic earnings (loss) per share attributable to Monster Worldwide, Inc.: | $ | 0.09 |
| | $ | (0.01 | ) | | $ | 0.12 |
| | $ | 0.62 |
| | $ | 0.82 |
| | $ | 0.02 |
|
| | | | | | | | | | | | |
| Diluted earnings (loss) per share attributable to Monster Worldwide, Inc.: | | | | | | | | | | | |
| Income (loss) from continuing operations | $ | 0.08 |
| | $ | (0.02 | ) | | $ | 0.10 |
| | $ | (0.02 | ) | | $ | 0.14 |
| | $ | 0.02 |
|
| Income from discontinued operations, net of tax | 0.01 |
| | 0.01 |
| | 0.01 |
| | 0.64 |
| | 0.64 |
| | — |
|
| Diluted earnings (loss) per share attributable to Monster Worldwide, Inc.: | $ | 0.09 |
| | $ | (0.01 | ) | | $ | 0.11 |
| | $ | 0.62 |
| | $ | 0.78 |
| | $ | 0.02 |
|
| | | | | | | | | | | | |
| Weighted avg. shares outstanding: | | | | | | | | | | | |
| Basic shares | 89,137 |
| | 90,067 |
| | 90,340 |
| | 90,205 |
| | 89,942 |
| | 88,922 |
|
| Diluted shares | 91,474 |
| | 90,067 |
| | 96,839 |
| | 90,205 |
| | 94,867 |
| | 89,786 |
|
| | | | | | | | | | | | |
| Global employees - continuing operations (ones) | 3,649 |
| | 3,654 |
| | 3,667 |
| | 3,679 |
| | 3,679 |
| | 3,661 |
|
| Average annualized revenue per employee | $ | 184.2 |
| | $ | 183.7 |
| | $ | 182.6 |
| | $ | 173.4 |
| | $ | 181.0 |
| | $ | 172.0 |
|
*Earnings (loss) per share may not add in certain periods due to rounding.
Monster Worldwide, Inc.
Non-GAAP Statements of Operations
(Unaudited, in thousands, except for per share amounts)
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Trended Data |
| Summary P&L Information | Q1 2015 | | Q2 2015 | | Q3 2015 | | Q4 2015 | | FY 2015 | | Q1 2016 |
| Careers - North America | $ | 122,392 |
| | $ | 119,844 |
| | $ | 119,449 |
| | $ | 112,121 |
| | $ | 473,806 |
| | $ | 109,194 |
|
| Careers - International | 50,490 |
| | 47,886 |
| | 47,633 |
| | 47,088 |
| | 193,097 |
| | 48,593 |
|
| Revenue | 172,882 |
| | 167,730 |
| | 167,082 |
| | 159,209 |
| | 666,903 |
| | 157,787 |
|
| Salary and related | 84,945 |
| | 79,751 |
| | 76,419 |
| | 71,088 |
| | 312,203 |
| | 76,653 |
|
| Office and general | 33,304 |
| | 31,889 |
| | 32,552 |
| | 31,147 |
| | 128,892 |
| | 30,198 |
|
| Marketing and promotion | 30,631 |
| | 30,416 |
| | 30,044 |
| | 28,086 |
| | 119,177 |
| | 29,482 |
|
| Depreciation expense | 10,826 |
| | 10,442 |
| | 10,416 |
| | 10,032 |
| | 41,716 |
| | 9,352 |
|
| Amortization of intangibles | 664 |
| | 667 |
| | 670 |
| | 671 |
| | 2,672 |
| | 673 |
|
| Operating expenses | 160,370 |
| | 153,165 |
| | 150,101 |
| | 141,024 |
| | 604,660 |
| | 146,358 |
|
| Operating income | 12,512 |
| | 14,565 |
| | 16,981 |
| | 18,185 |
| | 62,243 |
| | 11,429 |
|
| Interest and other, net | (1,922 | ) | | (2,156 | ) | | (2,422 | ) | | (2,173 | ) | | (8,673 | ) | | (2,232 | ) |
| Income before income taxes and (loss) income in equity interests, net | 10,590 |
| | 12,409 |
| | 14,559 |
| | 16,012 |
| | 53,570 |
| | 9,197 |
|
| Provision for income taxes | 3,707 |
| | 4,344 |
| | 5,111 |
| | 5,588 |
| | 18,750 |
| | 3,219 |
|
| (Loss) income in equity interests, net | (220 | ) | | 292 |
| | 249 |
| | 144 |
| | 465 |
| | 250 |
|
| Net income - continuing operations | $ | 6,663 |
| | $ | 8,357 |
| | $ | 9,697 |
| | $ | 10,568 |
| | $ | 35,285 |
| | $ | 6,228 |
|
| Diluted earnings per share attributable to Monster Worldwide, Inc.: | $ | 0.07 |
| | $ | 0.09 |
| | $ | 0.11 |
| | $ | 0.12 |
| | $ | 0.39 |
| | $ | 0.07 |
|
| Weighted avg. shares outstanding: | | | | | | | | | | | |
| Diluted shares | 90,722 |
| | 90,874 |
| | 90,967 |
| | 90,979 |
| | 90,890 |
| | 89,786 |
|
See notes to financial supplement for further explanation of Non-GAAP measures.
Monster Worldwide, Inc.
Segment Information and Margin Analysis - GAAP and Non-GAAP
(unaudited, in thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Trended Data |
| | Q1 2015 | | Q2 2015 | | Q3 2015 | | Q4 2015 | | FY 2015 | | Q1 2016 |
| Segment revenue: | | | | | | | | | | | |
| Careers - North America | $ | 122,392 |
| | $ | 119,844 |
| | $ | 119,449 |
| | $ | 112,121 |
| | $ | 473,806 |
| | $ | 109,194 |
|
| Careers - International | 50,490 |
| | 47,886 |
| | 47,633 |
| | 47,088 |
| | 193,097 |
| | 48,593 |
|
| Total revenue | $ | 172,882 |
| | $ | 167,730 |
| | $ | 167,082 |
| | $ | 159,209 |
| | $ | 666,903 |
| | $ | 157,787 |
|
| Segment operating income (loss) GAAP: | | | | | | | | | | | |
| Careers - North America | $ | 13,338 |
| | $ | 25,247 |
| | $ | 25,739 |
| | $ | 18,030 |
| | $ | 82,354 |
| | $ | 19,266 |
|
| Careers - International | (15,425 | ) | | (10,458 | ) | | (8,581 | ) | | (4,956 | ) | | (39,420 | ) | | (4,320 | ) |
| Total operating (loss) income GAAP | $ | (2,087 | ) | | $ | 14,789 |
| | $ | 17,158 |
| | $ | 13,074 |
| | $ | 42,934 |
| | $ | 14,946 |
|
| Corporate expenses GAAP | (9,898 | ) | | (11,751 | ) | | (6,325 | ) | | (5,871 | ) | | (33,845 | ) | | (6,571 | ) |
| Total operating (loss) income GAAP | $ | (11,985 | ) | | $ | 3,038 |
| | $ | 10,833 |
| | $ | 7,203 |
| | $ | 9,089 |
| | $ | 8,375 |
|
| Segment operating income (loss)(1) Non-GAAP: | | | | | | | | | | | |
| Careers - North America | $ | 25,846 |
| | $ | 27,071 |
| | $ | 27,825 |
| | $ | 24,081 |
| | $ | 104,823 |
| | $ | 19,858 |
|
| Careers - International | (5,817 | ) | | (5,564 | ) | | (5,574 | ) | | (1,548 | ) | | (18,503 | ) | | (4,095 | ) |
| Total operating income Non-GAAP | $ | 20,029 |
| | $ | 21,507 |
| | $ | 22,251 |
| | $ | 22,533 |
| | $ | 86,320 |
| | $ | 15,763 |
|
| Corporate expenses Non-GAAP | (7,517 | ) | | (6,942 | ) | | (5,270 | ) | | (4,348 | ) | | (24,077 | ) | | (4,334 | ) |
| Total operating income Non-GAAP | $ | 12,512 |
| | $ | 14,565 |
| | $ | 16,981 |
| | $ | 18,185 |
| | $ | 62,243 |
| | $ | 11,429 |
|
(1) - See notes to financial supplement for further explanation of Non-GAAP measures.
Monster Worldwide, Inc.
Reconciliation of Income (Loss) to Continuing Operations to Cash EBITDA and Adjusted EBITDA
(unaudited, in thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Trended Data |
| Summary P&L Information | Q1 2015 | | Q2 2015 | | Q3 2015 | | Q4 2015 | | FY 2015 | | Q1 2016 |
| Revenue | $ | 172,882 |
| | $ | 167,730 |
| | $ | 167,082 |
| | $ | 159,209 |
| | $ | 666,903 |
| | $ | 157,787 |
|
| Income (loss) from continuing operations | $ | 7,383 |
| | $ | (1,898 | ) | | $ | 9,769 |
| | $ | (2,094 | ) | | $ | 13,160 |
| | $ | 1,841 |
|
| Loss (income) in equity interests, net | 220 |
| | (292 | ) | | (249 | ) | | (144 | ) | | (465 | ) | | (250 | ) |
| Provision for (benefit from) income taxes | (13,945 | ) | | 1,819 |
| | (2,361 | ) | | 6,018 |
| | (8,469 | ) | | 3,307 |
|
| Interest and other, net | 3,206 |
| | 3,409 |
| | 3,674 |
| | 3,423 |
| | 13,712 |
| | 3,477 |
|
| Gain on partial sale of equity method investment | (8,849 | ) | | — |
| | — |
| | — |
| | (8,849 | ) | | — |
|
| Depreciation expense | 10,826 |
| | 10,442 |
| | 10,416 |
| | 10,034 |
| | 41,718 |
| | 9,352 |
|
| Stock-based compensation | 4,405 |
| | 3,613 |
| | 3,368 |
| | 287 |
| | 11,673 |
| | 1,079 |
|
| Restructuring non-cash charges | 4,226 |
| | — |
| | — |
| | 690 |
| | 4,916 |
| | — |
|
| Amortization of intangibles | 664 |
| | 667 |
| | 670 |
| | 671 |
| | 2,672 |
| | 673 |
|
| Cash EBITDA (1) | $ | 8,136 |
| | $ | 17,760 |
| | $ | 25,287 |
| | $ | 18,885 |
| | $ | 70,068 |
| | $ | 19,479 |
|
| Separation charges | — |
| | 2,000 |
| | — |
| | — |
| | 2,000 |
| | 417 |
|
| Impairment of capitalized software costs | — |
| | — |
| | — |
| | 6,703 |
| | 6,703 |
| | — |
|
| Advisory fees | — |
| | — |
| | — |
| | — |
| | — |
| | 1,558 |
|
| Restructuring expenses, less non-cash items | 15,866 |
| | 5,915 |
| | 2,780 |
| | 3,302 |
| | 27,863 |
| | — |
|
| Total non-GAAP Adjustments | 15,866 |
| | 7,915 |
| | 2,780 |
| | 10,005 |
| | 36,566 |
| | 1,975 |
|
| Adjusted EBITDA (1) | $ | 24,002 |
| | $ | 25,675 |
| | $ | 28,067 |
| | $ | 28,890 |
| | $ | 106,634 |
| | $ | 21,454 |
|
(1) - See notes to financial supplement for further explanation of Non-GAAP measures.
Monster Worldwide, Inc.
Statements of Cash Flows
(unaudited, in thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Trended Data |
| | Q1 2015 | | Q2 2015 | | Q3 2015 | | Q4 2015 | | FY 2015 | | Q1 2016 |
| Cash flows provided by (used for) operating activities: | | | | | | | | | | | |
| Net income | $ | 9,189 |
| | $ | 138 |
| | $ | 11,932 |
| | $ | 56,414 |
| | $ | 77,673 |
| | $ | 1,841 |
|
| Adjustments to reconcile net income to cash provided by (used for) operating activities: | | | | | | | | | | | |
| Depreciation and amortization | 11,807 |
| | 11,430 |
| | 11,388 |
| | 10,797 |
| | 45,422 |
| | 10,025 |
|
| Provision for doubtful accounts | 323 |
| | 438 |
| | 478 |
| | 586 |
| | 1,825 |
| | 504 |
|
| Stock-based compensation | 4,465 |
| | 3,626 |
| | 3,380 |
| | 311 |
| | 11,782 |
| | 1,079 |
|
| Deferred income taxes | 3,933 |
| | 772 |
| | (3,218 | ) | | 4,908 |
| | 6,395 |
| | 1,636 |
|
| Non-cash restructuring charges | 4,226 |
| | — |
| | — |
| | 690 |
| | 4,916 |
| | — |
|
| Loss (income) in equity interests, net | 220 |
| | (292 | ) | | (249 | ) | | (144 | ) | | (465 | ) | | (250 | ) |
| Amount reclassified from accumulated other comprehensive income | — |
| | — |
| | — |
| | 3,589 |
| | 3,589 |
| | — |
|
| Gain on partial sale of equity method investment | (8,849 | ) | | — |
| | — |
| | — |
| | (8,849 | ) | | — |
|
| Impairment of capitalized software costs | — |
| | — |
| | — |
| | 6,703 |
| | 6,703 |
| | — |
|
| Gain from sale of remaining interest in subsidiary | — |
| | — |
| | — |
| | (76,100 | ) | | (76,100 | ) | | — |
|
| Changes in assets and liabilities, net of acquisitions: | | | | | | | | | | | |
| Accounts receivable | (255 | ) | | 21,233 |
| | 19,260 |
| | (31,041 | ) | | 9,197 |
| | 16,204 |
|
| Prepaid and other | (4,298 | ) | | 8,419 |
| | 5,658 |
| | 19,578 |
| | 29,357 |
| | 312 |
|
| Deferred revenue | 9,946 |
| | (24,127 | ) | | (24,936 | ) | | 29,701 |
| | (9,416 | ) | | (9,452 | ) |
| Accounts payable, accrued liabilities, and other | (3,948 | ) | | (5,589 | ) | | (11,410 | ) | | (7,319 | ) | | (28,266 | ) | | (30,541 | ) |
| Total adjustments | 17,570 |
| | 15,910 |
| | 351 |
| | (37,741 | ) | | (3,910 | ) | | (10,483 | ) |
| Net cash provided by (used for) operating activities | 26,759 |
| | 16,048 |
| | 12,283 |
| | 18,673 |
| | 73,763 |
| | (8,642 | ) |
| Cash flows (used for) provided by investing activities: | | | | | | | | | | | |
| Capital expenditures | (7,945 | ) | | (6,790 | ) | | (6,869 | ) | | (7,296 | ) | | (28,900 | ) | | (10,054 | ) |
| Investment in kununu US, LLC | — |
| | — |
| | — |
| | — |
| | — |
| | (3,000 | ) |
| Dividends received from equity investee and other | 976 |
| | 672 |
| | — |
| | (3,119 | ) | | (1,471 | ) | | — |
|
| Capitalized patent defense costs | (2,263 | ) | | (42 | ) | | — |
| | — |
| | (2,305 | ) | | — |
|
| Cash received from partial sale of equity investment | 9,128 |
| | — |
| | — |
| | — |
| | 9,128 |
| | — |
|
| Net proceeds from sale of remaining interest in subsidiary | — |
| | — |
| | — |
| | 71,425 |
| | 71,425 |
| | — |
|
| Net cash (used for) provided by investing activities | (104 | ) | | (6,160 | ) | | (6,869 | ) | | 61,010 |
| | 47,877 |
| | (13,054 | ) |
Monster Worldwide, Inc.
Statements of Cash Flows, continued
(unaudited, in thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Trended Data |
| | Q1 2015 | | Q2 2015 | | Q3 2015 | | Q4 2015 | | FY 2015 | | Q1 2016 |
| Cash flows provided by (used for) financing activities: | | | | | | | | | | | |
| Proceeds from borrowings on credit facilities | 31,600 |
| | 500 |
| | — |
| | — |
| | 32,100 |
| | — |
|
| Payments on borrowings on credit facilities | (31,600 | ) | | (500 | ) | | — |
| | — |
| | (32,100 | ) | | — |
|
| Payments on borrowings on term loan | (2,250 | ) | | (2,250 | ) | | (9,250 | ) | | (2,568 | ) | | (16,318 | ) | | (2,569 | ) |
| Payments on convertibles notes | — |
| | — |
| | — |
| | — |
| | — |
| | (9,475 | ) |
| Proceeds from partial unwind of capped call, financing fees, and other | (997 | ) | | (113 | ) | | — |
| | — |
| | (1,110 | ) | | 122 |
|
| Tax withholdings related to net share settlements of restricted stock awards and units | (5,494 | ) | | (1,306 | ) | | (1,239 | ) | | (645 | ) | | (8,684 | ) | | (317 | ) |
| Repurchase of common stock | — |
| | — |
| | — |
| | (8,016 | ) | | (8,016 | ) | | (3,039 | ) |
| Distribution paid to noncontrolling interest | — |
| | (10,018 | ) | | — |
| | — |
| | (10,018 | ) | | — |
|
| Net cash (used for) provided by financing activities | (8,741 | ) | | (13,687 | ) | | (10,489 | ) | | (11,229 | ) | | (44,146 | ) | | (15,278 | ) |
| Effects of exchange rates on cash | (1,981 | ) | | 1,250 |
| | (2,683 | ) | | (462 | ) | | (3,876 | ) | | 775 |
|
| Net increase (decrease) in cash and cash equivalents | $ | 15,933 |
| | $ | (2,549 | ) | | $ | (7,758 | ) | | $ | 67,992 |
| | $ | 73,618 |
| | $ | (36,199 | ) |
| Cash and cash equivalents from continuing operations, beginning of period | $ | 72,030 |
| | $ | 84,537 |
| | $ | 99,415 |
| | $ | 88,389 |
| | $ | 72,030 |
| | $ | 167,915 |
|
| Cash and cash equivalents from discontinued operations, beginning of period | 22,267 |
| | 25,693 |
| | 8,266 |
| | 11,534 |
| | 22,267 |
| | — |
|
| Cash and cash equivalents, beginning of period | $ | 94,297 |
| | $ | 110,230 |
| | $ | 107,681 |
| | $ | 99,923 |
| | $ | 94,297 |
| | $ | 167,915 |
|
| Cash and cash equivalents from continuing operations, end of period | $ | 84,537 |
| | $ | 99,415 |
| | $ | 88,389 |
| | $ | 167,915 |
| | $ | 167,915 |
| | $ | 131,716 |
|
| Cash and cash equivalents from discontinued operations, end of period | 25,693 |
| | 8,266 |
| | 11,534 |
| | — |
| | — |
| | — |
|
| Cash and cash equivalents, end of period | $ | 110,230 |
| | $ | 107,681 |
| | $ | 99,923 |
| | $ | 167,915 |
| | $ | 167,915 |
| | $ | 131,716 |
|
| Free cash flow (1): | | | | | | | | | | | |
| Net cash provided by operating activities | $ | 26,759 |
| | $ | 16,048 |
| | $ | 12,283 |
| | $ | 18,673 |
| | $ | 73,763 |
| | $ | (8,642 | ) |
| Less: Capital expenditures | (7,945 | ) | | (6,790 | ) | | (6,869 | ) | | (7,296 | ) | | (28,900 | ) | | (10,054 | ) |
| Free cash flow | $ | 18,814 |
| | $ | 9,258 |
| | $ | 5,414 |
| | $ | 11,377 |
| | $ | 44,863 |
| | $ | (18,696 | ) |
(1) - See notes to financial supplement for further explanation of Non-GAAP measures.
Monster Worldwide, Inc.
Consolidated Condensed Balance Sheets
(unaudited, in thousands)
|
| | | | | | | | | | | | | | | | | | | |
| | Trended Data |
| | March 2015 | | June 2015 | | September 2015 | | December 2015 | | March 2016 |
| ASSETS | | | | | | | | | |
| Current assets: | | | | | | | | | |
| Cash and cash equivalents | $ | 84,537 |
| | $ | 99,415 |
| | $ | 88,389 |
| | $ | 167,915 |
| | $ | 131,716 |
|
| Accounts receivable, net | 272,270 |
| | 252,802 |
| | 231,192 |
| | 260,518 |
| | 244,110 |
|
| Prepaid and other | 63,491 |
| | 65,666 |
| | 59,858 |
| | 52,599 |
| | 54,941 |
|
| Current assets of discontinued operations | 32,256 |
| | 12,993 |
| | 56,772 |
| | — |
| | — |
|
| Total current assets | 452,554 |
| | 430,876 |
| | 436,211 |
| | 481,032 |
| | 430,767 |
|
| Property and equipment, net | 114,788 |
| | 112,162 |
| | 107,288 |
| | 110,143 |
| | 109,464 |
|
| Goodwill | 498,282 |
| | 498,823 |
| | 497,345 |
| | 496,499 |
| | 497,137 |
|
| Intangibles, net | 29,518 |
| | 29,084 |
| | 28,505 |
| | 27,874 |
| | 27,249 |
|
| Investment in unconsolidated affiliates | 18,832 |
| | 19,082 |
| | 18,955 |
| | 21,566 |
| | 25,039 |
|
| Other assets | 40,552 |
| | 33,570 |
| | 38,455 |
| | 17,818 |
| | 18,090 |
|
| Non-current assets of discontinued operations | 42,562 |
| | 42,803 |
| | — |
| | — |
| | — |
|
| Total assets | $ | 1,197,088 |
| | $ | 1,166,400 |
| | $ | 1,126,759 |
| | $ | 1,154,932 |
| | $ | 1,107,746 |
|
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | | |
| Current liabilities: | | | | | | | | | |
| Accounts payable, accrued expenses and other | $ | 152,631 |
| | $ | 151,076 |
| | $ | 140,136 |
| | $ | 137,069 |
| | $ | 108,576 |
|
| Deferred revenue | 300,015 |
| | 277,912 |
| | 251,065 |
| | 279,815 |
| | 270,925 |
|
| Current portion of long-term debt, net | 9,100 |
| | 9,658 |
| | 9,249 |
| | 9,773 |
| | 10,287 |
|
| Current liabilities of discontinued operations | 11,710 |
| | 10,034 |
| | 10,100 |
| | — |
| | — |
|
| Total current liabilities | 473,456 |
| | 448,680 |
| | 410,550 |
| | 426,657 |
| | 389,788 |
|
| Long-term income taxes payable | 37,550 |
| | 37,652 |
| | 35,561 |
| | 36,348 |
| | 37,025 |
|
| Long-term debt, net, less current portion | 194,703 |
| | 193,400 |
| | 186,066 |
| | 184,499 |
| | 174,156 |
|
| Other liabilities | 18,125 |
| | 17,581 |
| | 17,041 |
| | 26,022 |
| | 25,304 |
|
| Total liabilities | 723,834 |
| | 697,313 |
| | 649,218 |
| | 673,526 |
| | 626,273 |
|
| Common stock and class B common stock | 146 |
| | 146 |
| | 147 |
| | 147 |
| | 147 |
|
| Additional paid-in capital | 2,022,062 |
| | 2,024,842 |
| | 2,026,288 |
| | 2,026,268 |
| | 2,026,179 |
|
| Accumulated other comprehensive (loss) income | (110 | ) | | 3,152 |
| | 1,440 |
| | 1,926 |
| | 3,280 |
|
| Accumulated deficit | (845,990 | ) | | (847,033 | ) | | (836,613 | ) | | (780,548 | ) | | (778,707 | ) |
| Treasury stock, at cost | (758,371 | ) | | (758,371 | ) | | (758,371 | ) | | (766,387 | ) | | (769,426 | ) |
| Noncontrolling interest | 55,517 |
| | 46,351 |
| | 44,650 |
| | — |
| | — |
|
| Total stockholders' equity | 473,254 |
| | 469,087 |
| | 477,541 |
| | 481,406 |
| | 481,473 |
|
| Total liabilities and stockholders' equity | $ | 1,197,088 |
| | $ | 1,166,400 |
| | $ | 1,126,759 |
| | $ | 1,154,932 |
| | $ | 1,107,746 |
|
| Memo(1) | | | | | | | | | |
| - Net cash | $ | (93,573 | ) | | $ | (95,377 | ) | | $ | (95,392 | ) | | $ | (26,357 | ) | | $ | (52,729 | ) |
(1) - See notes to financial supplement for further explanation of Non-GAAP measures.
