Exhibit 99.1
Monster Worldwide Reports Third Quarter and Nine Months 2007 Results
Total Revenue Increases 18% to $337 Million with Careers International Revenue Growth of 57%
Diluted Earnings Per Share from Continuing Operations at $0.25, Including $0.10 Per Share of Pro Forma Adjustments
GAAP Operating Margin Expands to 15% from 13% in the Second Quarter; Non-GAAP Operating Margin Improves to 21% Compared to 19% in the Second Quarter
Cash Generated from Operating Activities of $73 Million
Stock Buyback Authorization Increased by $100 Million to $350 Million
New York, October 24, 2007— Monster Worldwide, Inc. (NASDAQ:MNST) today reported financial results for the third quarter and nine months ended September 30, 2007.
Third Quarter Results
Total revenue grew 18% to $337 million in the third quarter of 2007 from $286 million in the comparable quarter of 2006. Foreign exchange rate benefits contributed approximately 3% to the year over year revenue growth.
Monster Careers revenue increased 22% to $297 million, compared with $244 million in last year’s third quarter, led by International revenue growth of 57% to $122 million. Included in International revenue is a $7 million benefit from the effect of foreign exchange rates. North American Careers revenue increased 5% to $175 million in the third quarter of 2007, while Internet Advertising & Fees revenue was $40 million compared with $42 million in last year’s comparable quarter.
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Monster Worldwide’s deferred revenue balance at September 30, 2007 grew 25% to $435 million over last year’s third quarter balance of $347 million.
Income from continuing operations was $33 million, or $0.25 per diluted share, in the third quarter of 2007, compared to $40 million or $0.31 per diluted share in the 2006 period. Included in income from continuing operations for the three months ended September 30, 2007 is a $0.07 per diluted share impact from costs associated with the ongoing stock option investigation and the Company’s restructuring plan. Pro forma adjustments also include $0.03 per diluted share of costs associated with measures taken by the Company in response to the security breach of the Company’s resume database in August. These pro forma adjustments are described in the “Notes Regarding the Use of Non-GAAP Financial Measures” and are reconciled to the nearest GAAP measure in the accompanying tables.
At September 30, 2007, the Company’s net cash position was $627 million compared with $719 million at June 30, 2007. During the quarter, the Company utilized the remaining $55 million under its November 2005 buyback program and spent $100 million of the September 2007 authorization, repurchasing a total of 4.5 million shares on the open market. Cash generated from operating activities was $73 million compared to $79 million in the third quarter of 2006. Capital expenditures totaled $11 million in the third quarter of 2007.
The Company also announced that its Board of Directors has increased the Company’s current stock repurchase authorization to $350 million from $250 million. Giving effect to the increased authorization and repurchases to date, the Company currently has $250 million remaining under the program.
Sal Iannuzzi, Chairman and Chief Executive Officer of Monster Worldwide, said, “We believe our third quarter results demonstrated the strength of the Monster brand in a difficult domestic market environment. Our ongoing strategy to expand our franchise on a global basis contributed to the significant revenue growth and strong margin expansion we experienced in our International segment. Our ability to provide quality job
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candidates to our employer customers on a global basis provides a competitive advantage in the marketplace and enhances Monster’s position as the global online recruitment leader.”
Mr. Iannuzzi added, “Our team is in the process of ramping up investments in product development and innovation, enhanced technology and more aggressive marketing which we believe will improve the customer experience and deliver solid revenue growth and operating margin expansion over time. We are in the early stages of the recently announced restructuring plan and are pleased to report we are on pace with the cost elimination and efficiency initiatives we have outlined. During the third quarter the consolidated non-GAAP operating margin expanded to 21% from 19% in the second quarter. We believe our strong balance sheet will support the Company’s growth opportunities as we work toward building long term sustainable value for our customers, shareholders and dedicated associates across the globe.”
Nine Months Results
Monster Worldwide reported total revenue of $997 million for the nine months ended September 30, 2007 compared to $818 million in the comparable period last year, a 22% increase, or 19% before the benefit of foreign exchange rates. Monster Careers revenue grew 24% to $879 million compared with $706 million in the 2006 period. Internet Advertising & Fees reported revenue of $119 million, an increase of 6% over the prior year period. The Company reported income from continuing operations of $102 million, or $0.77 per diluted share, compared to $113 million or $0.86 per diluted share in the prior year period.
Business Outlook
The Company’s business outlook reflects the anticipated savings and investments of the restructuring plan noted above, as well as other initiatives to improve long-term revenue growth and profitability. Specific assumptions are as follows:
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$ ’s in millions, except EPS figures | | Full Year 2007 | |
Total Revenue | | $1,345-$1,365 | |
Non-GAAP Operating Expenses | | $1,070-$1,090 | |
Effective Income Tax Rate | | 35.5% | |
Losses in Equity Interest | | $(11)-$(9) | |
Non-GAAP operating expenses exclude ongoing costs associated with the stock option investigations, related litigation and potential fines or settlements; previously disclosed severance costs of $15.8 million for former executive officers; costs related to measures taken by the Company in response to the security breach; and restructuring and other special charges. See below for Notes Regarding the Use of Non-GAAP Financial Measures.
Supplemental Financial Information
The Company has made available certain supplemental financial information, in a separate document that can be accessed directly at http://www.monsterworldwide.com/Q307.pdf or through the Company’s Investor Relations website at http://ir.monsterworldwide.com.
Conference Call Information
Third quarter 2007 results will be discussed on Monster Worldwide’s quarterly conference call taking place on October 24, 2007 at 5:00 PM EST. To join the conference call, please dial (888) 551-5973 at 4:50 PM EDT and reference conference ID# 19394110. For those outside the United States, please dial (706) 643-3467 and reference the same conference ID#. The call will begin promptly at 5:00 PM EST. Individuals can also access Monster Worldwide’s quarterly conference call online through the Investor Relations section of the Company’s website at www.monsterworldwide.com. For a replay of the call, please dial (800) 642-1687 or outside the United States dial (706) 645-9291 and reference ID #19394110. This number is valid until midnight on November 1, 2007.
Contacts
Investors: Robert Jones, (212) 351-7032, bob.jones@monsterworldwide.com
Media: Kathryn Burns, (212) 351-7063, kathryn.burns@monsterworldwide.com
About Monster Worldwide
Monster Worldwide, Inc. (NASDAQ: MNST), parent company of Monster®, the premier global online employment solution for more than a decade, strives to bring people together to advance their lives. With a local presence in key markets in North America, Europe, and Asia, Monster works for everyone by connecting employers with quality job seekers at all levels and by providing personalized career advice to consumers globally.
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Through online media sites and services, Monster delivers vast, highly targeted audiences to advertisers. Monster Worldwide is a member of the S&P 500 Index and the NASDAQ 100. To learn more about Monster’s industry-leading products and services, visit www.monster.com. More information about Monster Worldwide is available at www.monsterworldwide.com.
Notes Regarding the Use of Non-GAAP Financial Measures
Monster Worldwide, Inc. (the “Company”) has provided certain non-GAAP financial information as additional information for its operating results. These measures are not in accordance with, or an alternative for, generally accepted accounting principles (“GAAP”) and may be different from non-GAAP measures reported by other companies. The Company believes that its presentation of non-GAAP measures provides useful information to management and investors regarding certain financial and business trends relating to its financial condition and results of operations.
Non-GAAP operating expenses, operating income, operating margin, income from continuing operations and diluted earnings per share all exclude certain pro forma adjustments including: ongoing costs associated with the stock option investigations, related litigation and potential fines or settlements; severance costs for former executive officers incurred in the second quarter of 2007; costs related to the measures taken by the Company in response to the security breach; and the strategic restructuring actions initiated in the third quarter of 2007. 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.
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. The Company considers OIBDA to be an important indicator of its operational strength. This measure eliminates the effects of depreciation, amortization of intangible assets and amortization of stock based compensation from period to period, which the Company believes is useful to management and investors in evaluating its operating performance. OIBDA 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 flow 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.
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Net cash is defined as cash and cash equivalents plus marketable securities, less total debt. The Company considers net cash to be an important measure of liquidity and an indicator of its ability to meet its ongoing obligations. The Company also uses net cash, among other measures, in evaluating its choices for capital deployment. Net cash presented herein is a non-GAAP measure and may not be comparable to similarly titled measures used by other companies.
The operating expenses included in the Company’s outlook ranges are non-GAAP financial measures within the meaning of Regulation G as promulgated by the Securities and Exchange Commission because, among other things, they do not include legal costs and expenses that the Company will incur as a result of its historical stock option granting practices. Because the Company cannot reasonably estimate or predict these costs and expenses, the Company cannot calculate the most directly comparable GAAP measure of operating expenses that would include such legal costs and expenses. Therefore, the Company cannot reconcile the non-GAAP measure to the most directly comparable GAAP measure. While the amount of the legal costs and expenses associated with the Company’s historical stock option granting practices is likely to be material, the Company believes that such costs and expenses are of limited significance to an evaluation of the Company’s business fundamentals, since such costs and expenses bear little relation to the Company’s core business or operating prospects. Additionally, non-GAAP operating expenses exclude severance costs for former executive officers, costs associated with the measures taken by the Company in response to the security breach and anticipated restructuring charges. While the aggregate restructuring charge can be estimated, the Company cannot determine the precise amount of the charge to be taken each period. As a result, the Company is unable to reconcile the projected non-GAAP operating expenses to a projection calculated in accordance with GAAP.
Special Note: Except for historical information contained herein, the statements made in this release, including the business outlook, constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve certain risks and uncertainties, including statements regarding the Company’s strategic direction, prospects and future results. Certain factors, including factors outside of our control, may cause actual results to differ materially from those contained in the forward-looking statements, including economic and other conditions in the markets in which we operate, risks associated with acquisitions or dispositions, competition, ongoing costs associated with the stock option investigations and lawsuits, costs associated with the restructuring and security breach, and the other risks discussed in our Form 10-K and our other filings made with the Securities and Exchange Commission, which discussions are incorporated in this release by reference.
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MONSTER WORLDWIDE, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
| | Three Months Ended September 30, | | Nine Months Ended September 30, | |
| | 2007 | | 2006 | | 2007 | | 2006 | |
| | | | | | | | | |
Revenue | | $ | 337,144 | | $ | 285,855 | | $ | 997,321 | | $ | 818,060 | |
| | | | | | | | | |
Salaries and related | | 128,250 | | 106,838 | | 396,750 | | 297,253 | |
Office and general | | 71,379 | | 51,113 | | 206,372 | | 141,685 | |
Marketing and promotion | | 76,348 | | 68,077 | | 232,462 | | 207,088 | |
Restructuring and other special charges | | 11,155 | | — | | 11,155 | | — | |
Total operating expenses | | 287,132 | | 226,028 | | 846,739 | | 646,026 | |
| | | | | | | | | |
Operating income | | 50,012 | | 59,827 | | 150,582 | | 172,034 | |
| | | | | | | | | |
Interest and other, net | | 6,288 | | 5,012 | | 18,504 | | 12,082 | |
| | | | | | | | | |
Income from continuing operations before income taxes and equity interests | | 56,300 | | 64,839 | | 169,086 | | 184,116 | |
| | | | | | | | | |
Income taxes | | 19,998 | | 22,692 | | 59,756 | | 65,180 | |
Losses in equity interests, net | | (3,074 | ) | (2,054 | ) | (7,460 | ) | (5,579 | ) |
| | | | | | | | | |
Income from continuing operations | | 33,228 | | 40,093 | | 101,870 | | 113,357 | |
| | | | | | | | | |
Income (loss) from discontinued operations, net of tax | | 73 | | (123,910 | ) | (471 | ) | (115,295 | ) |
| | | | | | | | | |
Net income (loss) | | $ | 33,301 | | $ | (83,817 | ) | $ | 101,399 | | $ | (1,938 | ) |
| | | | | | | | | |
Basic earnings per share: | | | | | | | | | |
| | | | | | | | | |
Earnings per share from continuing operations | | $ | 0.26 | | $ | 0.31 | | $ | 0.78 | | $ | 0.89 | |
Income (loss) per share from discontinued operations, net of tax | | — | | (0.96 | ) | — | | (0.90 | ) |
Basic earnings (loss) per share* | | $ | 0.26 | | $ | (0.65 | ) | $ | 0.78 | | $ | (0.02 | ) |
| | | | | | | | | |
Diluted earnings per share: | | | | | | | | | |
| | | | | | | | | |
Earnings per share from continuing operations | | $ | 0.25 | | $ | 0.31 | | $ | 0.77 | | $ | 0.86 | |
Income (loss) per share from discontinued operations, net of tax | | — | | (0.95 | ) | — | | (0.88 | ) |
Diluted earnings (loss) per share* | | $ | 0.25 | | $ | (0.64 | ) | $ | 0.77 | | $ | (0.01 | ) |
*Basic and diluted earning (loss) per share may not add in certain periods due to rounding. |
Weighted average shares outstanding: | | | | | | | | | |
| | | | | | | | | |
Basic | | 129,499 | | 128,484 | | 129,893 | | 127,938 | |
| | | | | | | | | |
Diluted | | 130,757 | | 130,827 | | 132,044 | | 131,224 | |
| | | | | | | | | |
Operating income before depreciation and amortization: | | | | | | | | | |
| | | | | | | | | |
Operating income | | $ | 50,012 | | $ | 59,827 | | $ | 150,582 | | $ | 172,034 | |
Depreciation and amortization of intangibles | | 12,625 | | 9,088 | | 34,149 | | 30,015 | |
Amortization of stock based compensation | | 2,975 | | 2,943 | | 24,453 | | 8,395 | |
| | | | | | | | | |
Operating income before depreciation and amortization | | $ | 65,612 | | $ | 71,858 | | $ | 209,184 | | $ | 210,444 | |
MONSTER WORLDWIDE, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
| | Three Months Ended
September 30, | | Nine Months Ended September
30, | |
| | 2007 | | 2006 | | 2007 | | 2006 | |
Cash flows provided by operating activities: | | | | | | | | | |
Net income (loss) | | $ | 33,301 | | $ | (83,817 | ) | $ | 101,399 | | $ | (1,938 | ) |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | |
(Income) loss from discontinued operations, net of tax | | (73 | ) | 123,910 | | 471 | | 115,295 | |
Depreciation and amortization of intangibles | | 12,625 | | 9,088 | | 34,149 | | 30,015 | |
Provision for doubtful accounts | | 3,340 | | 1,841 | | 8,453 | | 6,505 | |
Non-cash compensation | | 2,974 | | 2,943 | | 24,452 | | 8,395 | |
Common stock issued for matching contribution to 401(k) plan | | — | | — | | — | | 1,854 | |
Deferred income taxes | | 2,808 | | (815 | ) | (2,697 | ) | 8,514 | |
Gain on disposal of assets | | (2 | ) | — | | (574 | ) | — | |
Loss in equity interests and other, net | | 3,074 | | 2,056 | | 7,460 | | 5,575 | |
Changes in assets and liabilities, net of business combinations: | | | | | | | | | |
Accounts receivable | | 13,699 | | (24,072 | ) | 34,065 | | (48,522 | ) |
Prepaid and other | | (8,007 | ) | (14,542 | ) | (12,211 | ) | (24,282 | ) |
Deferred revenue | | (17,515 | ) | (2,328 | ) | (9,464 | ) | 19,116 | |
Accounts payable, accrued liabilities and other | | 26,537 | | 48,418 | | 24,750 | | 81,273 | |
Net cash provided by (used for) operating activities of discontinued operations | | 74 | | 16,168 | | (5,258 | ) | 21,836 | |
Total adjustments | | 39,534 | | 162,667 | | 103,596 | | 225,574 | |
Net cash provided by operating activities | | 72,835 | | 78,850 | | 204,995 | | 223,636 | |
| | | | | | | | | |
Cash flows used for investing activities: | | | | | | | | | |
Capital expenditures | | (10,601 | ) | (12,825 | ) | (47,815 | ) | (38,368 | ) |
Purchase of marketable securities | | (327,250 | ) | (404,703 | ) | (1,009,836 | ) | (1,348,466 | ) |
Sales and maturities of marketable securities | | 446,418 | | 321,390 | | 1,035,983 | | 965,928 | |
Payments for acquisitions and intangible assets, net of cash acquired | | (133 | ) | (631 | ) | (1,939 | ) | (18,913 | ) |
Investment in unconsolidated affiliate | | — | | — | | — | | (19,936 | ) |
Net proceeds from sale of business | | — | | 36,205 | | | | 69,155 | |
Cash funded to equity investee | | (5,900 | ) | (2,400 | ) | (10,000 | ) | (7,200 | ) |
Net cash used for investing activities of discontinued operations | | — | | (455 | ) | — | | (2,924 | ) |
Net cash provided by (used for) investing activities | | 102,534 | | (63,419 | ) | (33,607 | ) | (400,724 | ) |
| | | | | | | | | |
Cash flows provided by financing activities: | | | | | | | | | |
Payments on capital lease obligations | | (58 | ) | (130 | ) | (58 | ) | (493 | ) |
Payments on acquisition debt | | — | | — | | (21,862 | ) | (29,685 | ) |
Proceeds from exercise of employee stock options | | 651 | | 60 | | 54,052 | | 91,225 | |
Excess tax benefits from equity compensation plans | | 1,611 | | 16 | | 13,954 | | 17,340 | |
Repurchase of common stock | | (154,692 | ) | — | | (164,734 | ) | (14,416 | ) |
Structured stock repurchase | | — | | — | | — | | (22,758 | ) |
Net cash (used in) provided by financing activities | | (152,488 | ) | (54 | ) | (118,648 | ) | 41,213 | |
| | | | | | | | | |
Effects of exchange rates on cash | | 3,795 | | 352 | | 5,795 | | 2,066 | |
| | | | | | | | | |
Net increase (decrease) in cash and cash equivalents | | 26,676 | | 15,729 | | 58,535 | | (133,809 | ) |
Cash and cash equivalents, beginning of period | | 90,539 | | 47,059 | | 58,680 | | 196,597 | |
Cash and cash equivalents, end of period | | 117,215 | | 62,788 | | 117,215 | | 62,788 | |
| | | | | | | | | |
Free cash flow: | | | | | | | | | |
| | | | | | | | | |
Net cash provided by operating activities | | $ | 72,835 | | $ | 78,850 | | $ | 204,995 | | $ | 223,636 | |
Less: Capital expenditures | | (10,601 | ) | (12,825 | ) | (47,815 | ) | (38,368 | ) |
Free cash flow | | $ | 62,234 | | $ | 66,025 | | $ | 157,180 | | $ | 185,268 | |
MONSTER WORLDWIDE, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
Assets: | | September 30, 2007 | | December 31, 2006 | |
| | | | | |
Cash and cash equivalents | | $ | 117,215 | | $ | 58,680 | |
Available-for-sale securities | | 511,746 | | 537,893 | |
Accounts receivable, net | | 401,994 | | 444,747 | |
Property and equipment, net | | 121,795 | | 102,402 | |
Goodwill and intangibles, net | | 662,709 | | 640,736 | |
Other assets | | 206,171 | | 185,345 | |
Total assets | | $ | 2,021,630 | | $ | 1,969,803 | |
| | | | | |
Liabilities and Stockholders’ equity: | | | | | |
| | | | | |
Accounts payable, accrued expenses and other | | $ | 298,023 | | $ | 358,850 | |
Deferred revenue | | 434,682 | | 444,145 | |
Long-term income taxes payable | | 94,418 | | — | |
Other liabilities | | 29,799 | | 33,459 | |
Debt | | 1,945 | | 23,664 | |
Total liabilities | | 858,867 | | 860,118 | |
| | | | | |
Stockholders’ equity | | 1,162,763 | | 1,109,685 | |
| | | | | |
Total liabilities and stockholders’ equity | | $ | 2,021,630 | | $ | 1,969,803 | |
MONSTER WORLDWIDE, INC.
UNAUDITED OPERATING SEGMENT INFORMATION
(in thousands)
| | MONSTER | | | | | |
Three Months Ended September 30, 2007 | | Careers -
North America | | Careers -
International | | Internet
Advertising &
Fees | | Subtotal | | Corporate
Expenses | | Total | |
| | | | | | | | | | | | | |
Revenue | | $ | 175,309 | | $ | 121,687 | | $ | 40,148 | | $ | 337,144 | | | | $ | 337,144 | |
Operating income | | 51,455 | | 7,344 | | 2,502 | | 61,301 | | $ | (11,289 | ) | 50,012 | |
OIBDA | | 57,522 | | 12,896 | | 5,111 | | 75,529 | | (9,917 | ) | 65,612 | |
| | | | | | | | | | | | | |
Operating margin | | 29.4 | % | 6.0 | % | 6.2 | % | 18.2 | % | | | 14.8 | % |
OIBDA margin | | 32.8 | % | 10.6 | % | 12.7 | % | 22.4 | % | | | 19.5 | % |
| | | | | | | | | | | | | | | | | | | |
| | MONSTER | | | | | |
Three Months Ended September 30, 2006 | | Careers -
North America | | Careers -International | | Internet Advertising & Fees | | Subtotal | | Corporate Expenses | | Total | |
| | | | | | | | | | | | | |
Revenue | | $ | 166,910 | | $ | 77,382 | | $ | 41,563 | | $ | 285,855 | | | | $ | 285,855 | |
Operating income | | 57,193 | | 4,997 | | 11,843 | | 74,033 | | $ | (14,206 | ) | 59,827 | |
OIBDA | | 62,114 | | 8,248 | | 13,504 | | 83,866 | | (12,008 | ) | 71,858 | |
| | | | | | | | | | | | | |
Operating margin | | 34.3 | % | 6.5 | % | 28.5 | % | 25.9 | % | | | 20.9 | % |
OIBDA margin | | 37.2 | % | 10.7 | % | 32.5 | % | 29.3 | % | | | 25.1 | % |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | MONSTER | | | | | |
Nine Months Ended September 30, 2007 | | Careers -
North America | | Careers -
International | | Internet
Advertising &
Fees | | Subtotal | | Corporate
Expenses | | Total | |
| | | | | | | | | | | | | |
Revenue | | $ | 533,807 | | $ | 344,738 | | $ | 118,776 | | $ | 997,321 | | | | $ | 997,321 | |
Operating income | | 171,912 | | 27,360 | | 12,017 | | 211,289 | | $ | (60,707 | ) | 150,582 | |
OIBDA | | 189,517 | | 42,852 | | 19,300 | | 251,669 | | (42,485 | ) | 209,184 | |
| | | | | | | | | | | | | |
Operating margin | | 32.2 | % | 7.9 | % | 10.1 | % | 21.2 | % | | | 15.1 | % |
OIBDA margin | | 35.5 | % | 12.4 | % | 16.2 | % | 25.2 | % | | | 21.0 | % |
| | | | | | | | | | | | | | | | | | | |
| | MONSTER | | | | | |
Nine Months Ended September 30, 2006 | | Careers -
North America | | Careers -
International | | Internet
Advertising & Fees | | Subtotal | | Corporate
Expenses | | Total | |
| | | | | �� | | | | | | | | |
Revenue | | $ | 489,724 | | $ | 216,347 | | $ | 111,989 | | $ | 818,060 | | | | $ | 818,060 | |
Operating income | | 167,349 | | 7,765 | | 33,892 | | 209,006 | | $ | (36,972 | ) | 172,034 | |
OIBDA | | 182,103 | | 20,036 | | 39,347 | | 241,486 | | (31,042 | ) | 210,444 | |
| | | | | | | | | | | | | |
Operating margin | | 34.2 | % | 3.6 | % | 30.3 | % | 25.5 | % | | | 21.0 | % |
OIBDA margin | | 37.2 | % | 9.3 | % | 35.1 | % | 29.5 | % | | | 25.7 | % |
| | | | | | | | | | | | | | | | | | | |
MONSTER WORLDWIDE, INC.
UNAUDITED NON-GAAP STATEMENTS OF OPERATIONS AND RECONCILIATIONS
(in thousands, except per share amounts)
| | For the Three Months Ended September 30, 2007 | | For the Three Months Ended September 30, 2006 | |
| | As Reported | | ProForma
Adjustments | | Non-GAAP | | As Reported | | ProForma
Adjustments | | Non-GAAP | |
| | | | | | | | | | | | | |
Revenue | | $ | 337,144 | | — | | $ | 337,144 | | $ | 285,855 | | — | | $ | 285,855 | |
| | | | | | | | | | | | | |
Salaries and related | | 128,250 | | 365 | a | 128,615 | | 106,838 | | — | | 106,838 | |
Office and general | | 71,379 | | (8,590 | ) a | 62,789 | | 51,113 | | (4,088 | ) a | 47,025 | |
Marketing and promotion | | 76,348 | | — | | 76,348 | | 68,077 | | — | | 68,077 | |
Restructuring and other special charges | | 11,155 | | (11,155 | ) b | — | | — | | — | | — | |
Total operating expenses | | 287,132 | | (19,380 | ) | 267,752 | | 226,028 | | (4,088 | ) | 221,940 | |
Operating income | | 50,012 | | 19,380 | | 69,392 | | 59,827 | | 4,088 | | 63,915 | |
Operating margin | | 14.8 | % | | | 20.6 | % | 20.9 | % | | | 22.4 | % |
| | | | | | | | | | | | | |
Interest and other, net | | 6,288 | | — | | 6,288 | | 5,012 | | — | | 5,012 | |
| | | | | | | | | | | | | |
Income from continuing operations before income taxes and equity interests | | 56,300 | | 19,380 | | 75,680 | | 64,839 | | 4,088 | | 68,927 | |
| | | | | | | | | | | | | |
Income taxes | | 19,998 | | 6,884 | c | 26,882 | | 22,692 | | 1,431 | c | 24,123 | |
Losses in equity interests, net | | (3,074 | ) | — | | (3,074 | ) | (2,054 | ) | | | (2,054 | ) |
Income from continuing operations | | $ | 33,228 | | $ | 12,496 | | $ | 45,724 | | $ | 40,093 | | $ | 2,657 | | $ | 42,750 | |
| | | | | | | | | | | | | |
Diluted Earnings per share from continuing operations | | $ | 0.25 | | $ | 0.10 | | $ | 0.35 | | $ | 0.31 | | $ | 0.02 | | $ | 0.33 | |
| | | | | | | | | | | | | |
Weighted average shares outstanding: | | | | | | | | | | | | | |
Diluted | | 130,757 | | 130,757 | | 130,757 | | 130,827 | | 130,827 | | 130,827 | |
| | For the Nine Months Ended September 30, 2007 | | For the Nine Months Ended September 30, 2006 | |
| | As Reported | | ProForma Adjustments | | Non-GAAP | | As Reported | | ProForma Adjustments | | Non-GAAP | |
| | | | | | | | | | | | | |
Revenue | | $ | 997,321 | | — | | $ | 997,321 | | $ | 818,060 | | — | | $ | 818,060 | |
| | | | | | | | | | | | | |
Salaries and related | | 396,750 | | (15,777 | ) a | 380,973 | | 297,253 | | — | | 297,253 | |
Office and general | | 206,372 | | (23,417 | ) a | 182,955 | | 141,685 | | (4,713 | ) a | 136,972 | |
Marketing and promotion | | 232,462 | | — | | 232,462 | | 207,088 | | — | | 207,088 | |
Restructuring and other special charges | | 11,155 | | (11,155 | ) b | — | | — | | — | | — | |
Total operating expenses | | 846,739 | | (50,349 | ) | 796,390 | | 646,026 | | (4,713 | ) | 641,313 | |
Operating income | | 150,582 | | 50,349 | | 200,931 | | 172,034 | | 4,713 | | 176,747 | |
Operating margin | | 15.1 | % | | | 20.1 | % | 21.0 | % | | | 21.6 | % |
| | | | | | | | | | | | | |
Interest and other, net | | 18,504 | | — | | 18,504 | | 12,082 | | — | | 12,082 | |
| | | | | | | | | | | | | |
Income from continuing operations before income taxes and equity interests | | 169,086 | | 50,349 | | 219,435 | | 184,116 | | 4,713 | | 188,829 | |
| | | | | | | | | | | | | |
Income taxes | | 59,756 | | 17,794 | c | 77,550 | | 65,180 | | 1,668 | c | 66,848 | |
Losses in equity interests, net | | (7,460 | ) | — | | (7,460 | ) | (5,579 | ) | — | | (5,579 | ) |
Income from continuing operations | | $ | 101,870 | | $ | 32,555 | | $ | 134,425 | | $ | 113,357 | | $ | 3,045 | | $ | 116,402 | |
| | | | | | | | | | | | | |
Diluted Earnings per share from continuing operations | | $ | 0.77 | | $ | 0.25 | | $ | 1.02 | | $ | 0.86 | | $ | 0.02 | | $ | 0.89 | |
| | | | | | | | | | | | | |
Weighted average shares outstanding: | | | | | | | | | | | | | |
Diluted | | 132,044 | | 132,044 | | 132,044 | | 131,224 | | 131,224 | | 131,224 | |
Note Regarding ProForma Adjustments:
ProForma adjustments consist of the following:
a Costs associated with the ongoing investigation into the Company’s historical stock option granting practices ($2,571 and $17,729 for the three and nine month periods ended September 30, 2007), severance charges associated with the termination of certain executives in the second quarter of 2007 ($15,811) and costs associated with the remediation of a security breach related to the Company's resume database in August 2007 ($5,654).
b Restructuring related charges pertain to the strategic restructuring actions that the Company announced on July 30, 2007. These charges include costs related to the reduction in the Company’s workforce, fixed asset write-offs, costs relating to the consolidation of certain office facilities, contract termination costs, relocation costs and professional fees.
c Income tax adjustment is calculated using the effective tax rate of the period multiplied by the ProForma adjustment to income from continuing operations before income taxes and equity interest.
MONSTER WORLDWIDE, INC.
UNAUDITED NON-GAAP OPERATING SEGMENT INFORMATION
(in thousands)
| | MONSTER | | | | | |
Three Months Ended September 30, 2007 | | Careers -
North America | | Careers -
International | | Internet
Advertising &
Fees | | Subtotal | | Corporate
Expenses | | Total | |
| | | | | | | | | | | | | |
Revenue | | $ | 175,309 | | $ | 121,687 | | $ | 40,148 | | $ | 337,144 | | | | $ | 337,144 | |
Operating income - GAAP | | $ | 51,455 | | $ | 7,344 | | $ | 2,502 | | $ | 61,301 | | $ | (11,289 | ) | $ | 50,012 | |
Proforma Adjustments | | 7,975 | | 6,245 | | 1,917 | | 16,137 | | 3,243 | | 19,380 | |
Operating income - Non GAAP | | $ | 59,430 | | $ | 13,589 | | $ | 4,419 | | $ | 77,438 | | $ | (8,046 | ) | $ | 69,392 | |
| | | | | | | | | | | | | |
Operating margin - GAAP | | 29.4 | % | 6.0 | % | 6.2 | % | 18.2 | % | | | 14.8 | % |
Operating margin - Non GAAP | | 33.9 | % | 11.2 | % | 11.0 | % | 23.0 | % | | | 20.6 | % |
| | MONSTER | | | | | |
Three Months Ended September 30, 2006 | | Careers -
North America | | Careers -
International | | Internet
Advertising &
Fees | | Subtotal | | Corporate
Expenses | | Total | |
| | | | | | | | | | | | | |
Revenue | | $ | 166,910 | | $ | 77,382 | | $ | 41,563 | | $ | 285,855 | | | | $ | 285,855 | |
Operating income - GAAP | | $ | 57,193 | | $ | 4,997 | | $ | 11,843 | | $ | 74,033 | | $ | (14,206 | ) | $ | 59,827 | |
Proforma Adjustments | | — | | — | | — | | — | | 4,088 | | 4,088 | |
Operating income - Non GAAP | | $ | 57,193 | | $ | 4,997 | | $ | 11,843 | | $ | 74,033 | | $ | (10,118 | ) | $ | 63,915 | |
| | | | | | | | | | | | | |
Operating margin - GAAP | | 34.3 | % | 6.5 | % | 28.5 | % | 25.9 | % | | | 20.9 | % |
Operating margin - Non GAAP | | 34.3 | % | 6.5 | % | 28.5 | % | 25.9 | % | | | 22.4 | % |
| | MONSTER | | | | | |
Nine Months Ended September 30, 2007 | | Careers -
North America | | Careers -
International | | Internet
Advertising &
Fees | | Subtotal | | Corporate
Expenses | | Total | |
| | | | | | | | | | | | | |
Revenue | | $ | 533,807 | | $ | 344,738 | | $ | 118,776 | | $ | 997,321 | | | | $ | 997,321 | |
Operating income - GAAP | | $ | 171,912 | | $ | 27,360 | | $ | 12,017 | | $ | 211,289 | | $ | (60,707 | ) | $ | 150,582 | |
Proforma Adjustments | | 8,425 | | 6,245 | | 1,917 | | 16,587 | | 33,762 | | 50,349 | |
Operating income - Non GAAP | | $ | 180,337 | | $ | 33,605 | | $ | 13,934 | | $ | 227,876 | | $ | (26,945 | ) | $ | 200,931 | |
| | | | | | | | | | | | | |
Operating margin - GAAP | | 32.2 | % | 7.9 | % | 10.1 | % | 21.2 | % | | | 15.1 | % |
Operating margin - Non GAAP | | 33.8 | % | 9.7 | % | 11.7 | % | 22.8 | % | | | 20.1 | % |
| | MONSTER | | | | | |
Nine Months Ended September 30, 2006 | | Careers -
North America | | Careers -
International | | Internet
Advertising &
Fees | | Subtotal | | Corporate
Expenses | | Total | |
| | | | | | | | | | | | | |
Revenue | | $ | 489,724 | | $ | 216,347 | | $ | 111,989 | | $ | 818,060 | | | | $ | 818,060 | |
Operating income - GAAP | | $ | 167,349 | | $ | 7,765 | | $ | 33,892 | | $ | 209,006 | | $ | (36,972 | ) | $ | 172,034 | |
Proforma Adjustments | | — | | — | | — | | — | | 4,713 | | 4,713 | |
Operating income - Non GAAP | | $ | 167,349 | | $ | 7,765 | | $ | 33,892 | | $ | 209,006 | | $ | (32,259 | ) | $ | 176,747 | |
| | | | | | | | | | | | | |
Operating margin - GAAP | | 34.2 | % | 3.6 | % | 30.3 | % | 25.5 | % | | | 21.0 | % |
Operating margin - Non GAAP | | 34.2 | % | 3.6 | % | 30.3 | % | 25.5 | % | | | 21.6 | % |
