Exhibit 99.2
FINANCIAL SUPPLEMENT
SEPTEMBER 30, 2006
We provide this supplement to assist investors in evaluating our Company’s financial and operating metrics. We suggest that the notes to this supplement are 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 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.
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Notes to Financial Supplement
Presentation
Sale of Advertising & Communications business in North America.
On August 31, 2006, we sold our TMP Worldwide Advertising & Communications business in North America. As a result of this transaction, the Company has completed the global divestiture of its recruitment advertising business and will no longer report an Advertising & Communications operating segment. Accordingly, we have reclassified our quarterly financial information to reflect the disposition as discontinued operations in all periods presented. The financial results from continuing operations, presented herein, reflect the remaining and ongoing results of our business.
(1) Non-GAAP financial measures
The information included in this financial supplement contains non-GAAP financial measures. A non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles (“GAAP”). These measures are not in accordance with or an alternative for GAAP, and may be different from non-GAAP measures reported by other companies. We believe that our presentation of non-GAAP measures provide useful information to management and investors regarding certain financial and business trends relating to our financial condition and results of operations. In addition, we use these measures for reviewing our financial results and for budgeting and planning purposes.
Operating income before depreciation and amortization (“OIBDA”) is defined as income from operations before depreciation, amortization of intangible assets and amortization of stock based compensation. We consider OIBDA to be an important indicator of our operational strength. This measure eliminates the effects of depreciation, amortization of intangible assets and amortization of stock based compensation from period to period, which we believe is useful to management and investors in evaluating our operating performance. OIBDA is a non-GAAP measure and may not be comparable to similarly titled measures reported by other companies.
(2) Selected financial ratio
Our definition and calculation are as follows:
Cash and marketable securities per share
We calculate cash and marketable securities per share as follows:
(Cash and cash equivalents + Marketable securities) / Total shares outstanding
Update to Historical Stock Options Grant Review
Due to the ongoing independent review and the potential impact of stock-based compensation expense and related tax matters in prior periods, the Company is not providing financial
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results for the 2005 periods, and is providing only selected cash flow and balance sheet data for 2006.
As previously disclosed, a committee of independent members of the Board of Directors, (the “Special Committee”) with assistance of outside legal counsel, has been conducting an internal review and analysis of all stock options previously issued by Monster Worldwide. Although the Special Committee has not yet completed its review, the Company anticipates that a conclusion of the investigation will indicate that the exercise price of a substantial number of stock option grants during the period under review differed from the fair market value of the underlying shares on the recorded measurement date. The Company is still conducting its accounting analysis and has not yet determined the impact of these differences on the Company’s historical financial statements. However, the Company expects that it will restate its previously filed financial statements for the years 1997 through 2005. The Company believes that the anticipated restatements will not have a material impact on 2006 earnings.
Accordingly, the Company’s Board of Directors concluded that the Company’s previously issued financial statements and other historical financial information and related disclosures relating to periods through December 31, 2005 contained in the Company’s filings with the Securities and Exchange Commission, including applicable reports of its independent registered public accounting firm and press releases, should not be relied upon. Additionally, a NASDAQ Listing Qualifications Panel has granted the Company’s request for continued listing of the Company’s securities on The NASDAQ Stock Market. Monster Worldwide’s continued listing is subject to certain conditions, including: (1) on or before December 13, 2006, the Company must file its Form 10-Q for the quarter ended June 30, 2006, as well as any necessary restatements; and (2) on or about November 3, 2006, the Company must submit to NASDAQ additional information regarding the Company’s independent review of its historical stock option practices and related accounting.
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Monster Worldwide, Inc.
Statements of Operations - Non GAAP
(unaudited, in thousands, except per share amounts)
| | Quarterly Data | | YTD | |
Summary P&L Information | | Q1 2006 | | Q2 2006 | | Q3 2006 | | 9M 2006 | |
| | | | | | | | | |
Monster Careers | | $ | 224,589 | | $ | 237,190 | | $ | 244,292 | | $ | 706,071 | |
Internet Advertising & Fees | | 32,447 | | 37,979 | | 41,563 | | 111,989 | |
Revenue | | 257,036 | | 275,169 | | 285,855 | | 818,060 | |
| | | | | | | | | |
Salaries and related | | 89,524 | | 95,439 | | 103,895 | | 288,858 | |
Office and general | | 36,973 | | 32,672 | | 42,025 | | 111,670 | |
Marketing and promotion | | 65,799 | | 73,212 | | 68,077 | | 207,088 | |
OIBDA(1) | | 64,740 | | 73,846 | | 71,858 | | 210,444 | |
| | | | | | | | | |
Depreciation expense | | 7,097 | | 8,586 | | 7,323 | | 23,006 | |
Amortization of stock based compensation | | 2,029 | | 3,423 | | 2,943 | | 8,395 | |
Amortization of intangibles | | 2,675 | | 2,569 | | 1,765 | | 7,009 | |
Operating expenses | | 204,097 | | 215,901 | | 226,028 | | 646,026 | |
| | | | | | | | | |
Operating income | | 52,939 | | 59,268 | | 59,827 | | 172,034 | |
Interest and other, net | | 3,130 | | 3,940 | | 5,012 | | 12,082 | |
Income from cont. operations, pre-tax | | 56,069 | | 63,208 | | 64,839 | | 184,116 | |
| | | | | | | | | |
Income taxes | | 20,411 | | 22,077 | | 22,692 | | 65,180 | |
Losses in equity interest | | (1,241 | ) | (2,284 | ) | (2,054 | ) | (5,579 | ) |
Income from continuing operations | | 34,417 | | 38,847 | | 40,093 | | 113,357 | |
| | | | | | | | | |
Income (loss) from disc. operations, net of tax | | 7,845 | | 770 | | (123,910 | ) | (115,295 | ) |
| | | | | | | | | |
Net income (loss) | | $ | 42,262 | | $ | 39,617 | | $ | (83,817 | ) | $ | (1,938 | ) |
| | | | | | | | | |
Basic earnings (loss) per share: | | | | | | | | | |
Income from continuing operations | | $ | 0.27 | | $ | 0.30 | | $ | 0.31 | | $ | 0.89 | |
Net income (loss) | | $ | 0.33 | | $ | 0.31 | | $ | (0.65 | ) | $ | (0.02 | ) |
| | | | | | | | | |
Diluted earnings (loss) per share: | | | | | | | | | |
Income from continuing operations | | $ | 0.26 | | $ | 0.29 | | $ | 0.31 | | $ | 0.86 | |
Net income (loss) | | $ | 0.32 | | $ | 0.30 | | $ | (0.64 | ) | $ | (0.01 | ) |
| | | | | | | | | |
Weighted avg. shares outstanding: | | | | | | | | | |
Basic shares | | 126,753 | | 128,551 | | 128,484 | | 127,938 | |
Diluted shares | | 130,619 | | 132,009 | | 130,827 | | 131,224 | |
(1) - See notes to financial supplement for further explanation of non-GAAP measures.
Monster Worldwide, Inc.
Selected Cash Flow and Balance Sheet Data
(unaudited, in thousands, except selected financial ratio)
| | Q1 2006 | | Q2 2006 | | Q3 2006 | | 9M 2006 | |
Selected Cash Flow Data: provided by (used for) | | | | | | | | | |
| | | | | | | | | |
Depreciation and amortization of intangible assets | | $ | 9,772 | | $ | 11,155 | | $ | 9,088 | | $ | 30,015 | |
| | | | | | | | | |
Capital expenditures | | (9,416 | ) | (16,127 | ) | (12,825 | ) | (38,368 | ) |
Change in marketable securities, net | | (96,989 | ) | (202,236 | ) | (83,313 | ) | (382,538 | ) |
Payments for acquisitions and intangible assets, net of cash acquired | | (23,655 | ) | (24,312 | ) | (631 | ) | (48,598 | ) |
Cash funded to equity investee | | — | | (4,800 | ) | (2,400 | ) | (7,200 | ) |
Net proceeds from sale of businesses | | — | | 32,950 | | 36,205 | | 69,155 | |
Investment in unconsolidated affiliate | | (19,936 | ) | — | | — | | (19,936 | ) |
| | | | | | | | | |
Proceeds from employee stock options | | 59,594 | | 31,571 | | 60 | | 91,225 | |
Repurchase of common stock | | (8,537 | ) | (5,879 | ) | — | | (14,416 | ) |
Structured stock repurchase, net | | (22,758 | ) | — | | — | | (22,758 | ) |
| | | | | | | | | |
| | Q4 2005 | | Q1 2006 | | Q2 2006 | | Q3 2006 | |
Selected Balance Sheet Data: | | | | | | | | | |
| | | | | | | | | |
Cash and cash equivalents | | $ | 196,597 | | $ | 166,035 | | $ | 47,059 | | $ | 62,788 | |
| | | | | | | | | |
Marketable securities | | 123,747 | | 221,019 | | 422,972 | | 506,285 | |
| | | | | | | | | |
Deferred revenue | | 327,429 | | 343,329 | | 349,034 | | 346,706 | |
| | | | | | | | | |
Debt | | 47,056 | | 24,882 | | 20,820 | | 20,659 | |
| | | | | | | | | |
Selected Financial Ratio(2) | | | | | | | | | |
- Cash and marketable securities per share | | $ | 2.55 | | $ | 3.02 | | $ | 3.66 | | $ | 4.43 | |
(2) - See notes to financial supplement for definitions and calculations of selected financial ratios.
Monster Worldwide, Inc.
Segment Information and Margin Analysis - Non-GAAP
(unaudited, in thousands)
| | Quarterly Data | | YTD | |
| | Q1 2006 | | Q2 2006 | | Q3 2006 | | 9M 2006 | |
| | | | | | | | | |
| | | | | | | | | |
Segment revenue: | | | | | | | | | |
Monster Careers - North America | | $ | 159,998 | | $ | 162,816 | | $ | 166,910 | | $ | 489,724 | |
Monster Careers - International | | 64,591 | | 74,374 | | 77,382 | | 216,347 | |
Monster Careers revenue | | 224,589 | | 237,190 | | 244,292 | | 706,071 | |
| | | | | | | | | |
Internet Advertising & Fees revenue | | 32,447 | | 37,979 | | 41,563 | | 111,989 | |
| | | | | | | | | |
Total Monster revenue | | $ | 257,036 | | $ | 275,169 | | $ | 285,855 | | $ | 818,060 | |
| | | | | | | | | |
Segment OIBDA(1): | | | | | | | | | |
Monster Careers - North America | | $ | 58,652 | | $ | 61,337 | | $ | 62,114 | | $ | 182,103 | |
Monster Careers - International | | 4,724 | | 7,064 | | 8,248 | | 20,036 | |
Monster Careers OIBDA(1) | | 63,376 | | 68,401 | | 70,362 | | 202,139 | |
| | | | | | | | | |
Internet Advertising & Fees OIBDA(1) | | 11,608 | | 14,235 | | 13,504 | | 39,347 | |
| | | | | | | | | |
Total Monster OIBDA(1) | | $ | 74,984 | | $ | 82,636 | | $ | 83,866 | | $ | 241,486 | |
| | | | | | | | | |
Corporate expenses before D&A(1) | | $ | (10,244 | ) | $ | (8,790 | ) | $ | (12,008 | ) | $ | (31,042 | ) |
| | | | | | | | | |
Segment operating income (loss):(1) | | | | | | | | | |
Monster Careers - North America | | $ | 54,559 | | $ | 55,597 | | $ | 57,193 | | $ | 167,349 | |
Monster Careers - International | | 765 | | 2,003 | | 4,997 | | 7,765 | |
Monster Careers operating income | | 55,324 | | 57,600 | | 62,190 | | 175,114 | |
| | | | | | | | | |
Internet Advertising & Fees operating income | | 9,486 | | 12,563 | | 11,843 | | 33,892 | |
| | | | | | | | | |
Total Monster operating income | | $ | 64,810 | | $ | 70,163 | | $ | 74,033 | | $ | 209,006 | |
| | | | | | | | | |
Corporate expenses | | $ | (11,871 | ) | $ | (10,895 | ) | $ | (14,206 | ) | $ | (36,972 | ) |
| | | | | | | | | |
| | | | | | | | | |
Margin Analysis: | | | | | | | | | |
| | | | | | | | | |
Monster Careers - North America OIBDA margin | | 36.7 | % | 37.7 | % | 37.2 | % | 37.2 | % |
Monster Careers - North America operating margin | | 34.1 | % | 34.1 | % | 34.3 | % | 34.2 | % |
Monster Careers - International OIBDA margin | | 7.3 | % | 9.5 | % | 10.7 | % | 9.3 | % |
Monster Careers - International operating margin | | 1.2 | % | 2.7 | % | 6.5 | % | 3.6 | % |
Internet Advertising & Fees OIBDA margin | | 35.8 | % | 37.5 | % | 32.5 | % | 35.1 | % |
Internet Advertising & Fees operating margin | | 29.2 | % | 33.1 | % | 28.5 | % | 30.3 | % |
Monster OIBDA margin | | 29.2 | % | 30.0 | % | 29.3 | % | 29.5 | % |
Monster operating margin | | 25.2 | % | 25.5 | % | 25.9 | % | 25.5 | % |
Consolidated OIBDA margin | | 25.2 | % | 26.8 | % | 25.1 | % | 25.7 | % |
Consolidated operating margin | | 20.6 | % | 21.5 | % | 20.9 | % | 21.0 | % |
| | | | | | | | | |
(1) - See notes to financial supplement for further explanation of non-GAAP measures.
Monster Worldwide, Inc.
Geographic Information and Employee Data - Non-GAAP
(unaudited, in thousands)
| | Quarterly Data | | YTD | |
| | Q1 2006 | | Q2 2006 | | Q3 2006 | | 9M 2006 | |
| | | | | | | | | |
Consolidated revenue by geographic region: | | | | | | | | | |
North America | | $ | 192,445 | | $ | 200,795 | | $ | 208,473 | | $ | 601,713 | |
International | | 64,591 | | 74,374 | | 77,382 | | 216,347 | |
Consolidated revenue | | $ | 257,036 | | $ | 275,169 | | $ | 285,855 | | $ | 818,060 | |
| | | | | | | | | |
Consolidated OIBDA by geographic region: | | | | | | | | | |
North America | | $ | 70,260 | | $ | 75,572 | | $ | 75,618 | | $ | 221,450 | |
International | | 4,724 | | 7,064 | | 8,248 | | 20,036 | |
Corporate | | (10,244 | ) | (8,790 | ) | (12,008 | ) | (31,042 | ) |
Consolidated OIBDA (1) | | $ | 64,740 | | $ | 73,846 | | $ | 71,858 | | $ | 210,444 | |
| | | | | | | | | |
Consolidated operating income (loss) by geographic region: | | | | | | | | | |
North America | | $ | 64,045 | | $ | 68,160 | | $ | 69,036 | | $ | 201,241 | |
International | | 765 | | 2,003 | | 4,997 | | 7,765 | |
Corporate | | (11,871 | ) | (10,895 | ) | (14,206 | ) | (36,972 | ) |
Consolidated operating income | | $ | 52,939 | | $ | 59,268 | | $ | 59,827 | | $ | 172,034 | |
| | | | | | | | | |
Employee Data: | | | | | | | | | |
| | | | | | | | | |
Global employees (ones) | | 3,785 | | 4,214 | | 4,632 | | 4,632 | |
Annualized revenue per average employee | | $ | 281.1 | | $ | 275.2 | | $ | 258.5 | | $ | 258.5 | |
| | | | | | | | | |
(1) - See notes to financial supplement for further explanation of non-GAAP measures.
Monster Worldwide, Inc.
Statements of Operations - Non GAAP
(unaudited)
| | Quarterly Data | | YTD | |
| | Q1 2006 | | Q2 2006 | | Q3 2006 | | 9M 2006 | |
| | | | | | | | | |
Summary P&L Information | | | | | | | | | |
| | | | | | | | | |
Monster Careers | | 87.4 | % | 86.2 | % | 85.5 | % | 86.3 | % |
Internet Advertising & Fees | | 12.6 | % | 13.8 | % | 14.5 | % | 13.7 | % |
Revenue | | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
| | | | | | | | | |
Salary and related | | 34.8 | % | 34.7 | % | 36.3 | % | 35.3 | % |
Office and general | | 14.4 | % | 11.9 | % | 14.7 | % | 13.7 | % |
Marketing and promotion | | 25.6 | % | 26.6 | % | 23.8 | % | 25.3 | % |
OIBDA(1) | | 25.2 | % | 26.8 | % | 25.1 | % | 25.7 | % |
| | | | | | | | | |
Depreciation expense | | 2.8 | % | 3.1 | % | 2.6 | % | 2.8 | % |
Amortization of stock based compensation | | 0.8 | % | 1.2 | % | 1.0 | % | 1.0 | % |
Amortization of intangibles | | 1.0 | % | 0.9 | % | 0.6 | % | 0.9 | % |
Operating expenses | | 79.4 | % | 78.5 | % | 79.1 | % | 79.0 | % |
| | | | | | | | | |
Operating income | | 20.6 | % | 21.5 | % | 20.9 | % | 21.0 | % |
Interest and other, net | | 1.2 | % | 1.4 | % | 1.8 | % | 1.5 | % |
Income from cont. operations, pre-tax | | 21.8 | % | 23.0 | % | 22.7 | % | 22.5 | % |
| | | | | | | | | |
Income taxes | | 7.9 | % | 8.0 | % | 7.9 | % | 8.0 | % |
Losses in equity interest | | -0.5 | % | -0.8 | % | -0.7 | % | -0.7 | % |
Income from continuing operations | | 13.4 | % | 14.1 | % | 14.0 | % | 13.9 | % |
| | | | | | | | | |
Income (loss) from disc. operations, net of tax | | 3.1 | % | 0.3 | % | -43.3 | % | -14.1 | % |
| | | | | | | | | |
Net income (loss) | | 16.4 | % | 14.4 | % | -29.3 | % | -0.2 | % |
| | | | | | | | | |
