Exhibit 99.1
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Monster Worldwide Reports Fourth Quarter and Full Year 2007 Results
Total Revenue Increases 19% to $354 Million with Careers International Revenue Growth of 59%
Diluted Earnings Per Share from Continuing Operations at $0.36, Including $0.05 Per Share of Pro Forma Adjustments
Restructuring Efficiencies Drive Operating Margin Expansion to 18%, Compared with 15% and 13% in the Third and Second Quarters, Respectively
Cash Generated from Operating Activities of $64 Million
Stock Buyback Authorization Increased by Additional $100 Million
New York, January 31, 2008—Monster Worldwide, Inc. (NASDAQ: MNST) today reported financial results for the fourth quarter and year ended December 31, 2007.
Total revenue grew 19% to $354 million in the fourth quarter of 2007 from $299 million in the comparable quarter of 2006.
Monster Careers revenue increased 23% to $317 million, compared with $258 million in last year’s fourth quarter, led by International revenue growth of 59% to $143 million. North American Careers revenue increased 3% to $174 million in the fourth quarter of 2007. Internet Advertising & Fees revenue was $37 million compared with $40 million in last year’s comparable quarter. Consolidated operating income was aided by a $3 million benefit from foreign exchange rates.
Monster Worldwide’s deferred revenue balance at December 31, 2007 grew 18% to $524 million over last year’s fourth quarter balance of $444 million.
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Income from continuing operations was $45 million, or $0.36 per diluted share, in the fourth 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 December 31, 2007 is a $0.05 per diluted share impact from costs associated with the restructuring plan, the ongoing stock option investigation and 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. Excluding these costs, income from continuing operations in the fourth quarter of 2007 was $52 million, or $0.41 per diluted share, compared to $49 million, or $0.37 per diluted share in the prior year.
At December 31, 2007, the Company’s net cash position was $578 million compared with $573 million at December 31, 2006. Cash generated from operating activities was $64 million compared to $45 million in the fourth quarter of 2006. Capital expenditures totaled $16 million in the fourth quarter of 2007. During the quarter, the Company repurchased 2.8 million shares of its common stock for an aggregate cost of $97 million. For the year ended December 31, 2007, the Company repurchased 7.3 million shares of common stock for a total cost of $252 million.
The Company also announced that its Board of Directors increased the Company’s current stock repurchase authorization by an additional $100 million, bringing the total authorization to $450 million. Giving effect to the increased authorization and repurchases to date, the Company currently has $253 million remaining under the program.
Sal Iannuzzi, Chairman and Chief Executive Officer of Monster Worldwide, said “We are pleased with our strong fourth quarter operating and financial performance in the face of more challenging domestic conditions in the employment market. During the quarter, we continued the aggressive strategic investment program which we initiated early in the third quarter of 2007. This program was designed to re-energize the Monster brand and foster product innovation and enhanced technology. Monster’s strong 19% global revenue growth, combined with the savings generated from the restructuring plan that has
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funded investments, has allowed us to significantly expand our operating margin since implementing the program.”
Mr. Iannuzzi added, “We are encouraged by the early progress we have made in transforming Monster into a company focused on life improvement. We have taken significant steps to enhance our customers’ interaction with Monster by providing better and more timely solutions to meet their changing needs. Despite the current weaker economic environment, we are optimistic about our longer-term growth prospects and believe our strategic investments will position Monster to benefit as market conditions improve over time, further strengthening Monster’s industry leadership position. Our goal is to build a solid foundation to foster long-term sustainable value for our customers, shareholders and global associates.”
Full Year Results
Monster Worldwide reported total revenue of $1,351 million for the year ended December 31, 2007 compared to $1,117 million in 2006, a 21% increase, or 18% before the benefit of foreign exchange rates. Monster Careers revenue grew 24% to $1,195 million compared with $964 million in 2006. Internet Advertising & Fees reported revenue of $156 million, an increase of 2% over the prior year. The Company reported income from continuing operations of $147 million, or $1.13 per diluted share, compared to $154 million or $1.17 per diluted share in the prior year.
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/Q407.pdf or through the Company’s Investor Relations website at http://ir.monsterworldwide.com.
Conference Call Information
Fourth quarter 2007 results will be discussed on Monster Worldwide’s quarterly conference call taking place on January 31, 2008 at 5:00 PM EST. To join the
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conference call, please dial (888) 551-5973 at 4:50 PM EDT and reference conference ID# 31117131. 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# 31117131. This number is valid until midnight on February 7, 2008.
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. 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 a security breach in August 2007; 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
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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.
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.
Special Note: Except for historical information contained herein, the statements made in this release, 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 December 31, | | Year Ended December 31, | |
| | 2007 | | 2006 | | 2007 | | 2006 | |
| | | | | | | | | |
Revenue | | $ | 353,988 | | $ | 298,616 | | $ | 1,351,309 | | $ | 1,116,676 | |
| | | | | | | | | |
Salaries and related | | 132,828 | | 114,596 | | 529,578 | | 411,849 | |
Office and general | | 70,890 | | 59,772 | | 277,262 | | 201,457 | |
Marketing and promotion | | 80,697 | | 66,418 | | 313,159 | | 273,506 | |
Restructuring and other special charges | | 5,442 | | — | | 16,597 | | — | |
Total operating expenses | | 289,857 | | 240,786 | | 1,136,596 | | 886,812 | |
| | | | | | | | | |
Operating income | | 64,131 | | 57,830 | | 214,713 | | 229,864 | |
| | | | | | | | | |
Interest and other, net | | 6,840 | | 6,398 | | 25,344 | | 18,480 | |
| | | | | | | | | |
Income from continuing operations before income taxes and equity interests | | 70,971 | | 64,228 | | 240,057 | | 248,344 | |
| | | | | | | | | |
Income taxes | | 24,843 | | 22,481 | | 84,599 | | 87,661 | |
Losses in equity interests, net | | (838 | ) | (1,517 | ) | (8,298 | ) | (7,096 | ) |
| | | | | | | | | |
Income from continuing operations | | 45,290 | | 40,230 | | 147,160 | | 153,587 | |
| | | | | | | | | |
Loss from discontinued operations, net of tax | | (290 | ) | (1,155 | ) | (761 | ) | (116,450 | ) |
| | | | | | | | | |
Net income | | $ | 45,000 | | $ | 39,075 | | $ | 146,399 | | $ | 37,137 | |
| | | | | | | | | |
Basic earnings per share: | | | | | | | | | |
| | | | | | | | | |
Earnings per share from continuing operations | | $ | 0.36 | | $ | 0.31 | | $ | 1.14 | | $ | 1.20 | |
Loss from discontinued operations, net of tax | | — | | (0.01 | ) | (0.01 | ) | (0.91 | ) |
Basic earnings per share* | | $ | 0.36 | | $ | 0.30 | | $ | 1.14 | | $ | 0.29 | |
| | | | | | | | | |
Diluted earnings per share: | | | | | | | | | |
| | | | | | | | | |
Earnings per share from continuing operations | | $ | 0.36 | | $ | 0.31 | | $ | 1.13 | | $ | 1.17 | |
Loss from discontinued operations, net of tax | | — | | (0.01 | ) | (0.01 | ) | (0.89 | ) |
Diluted earnings per share* | | $ | 0.36 | | $ | 0.30 | | $ | 1.12 | | $ | 0.28 | |
| | | | | | | | | |
*Basic and diluted earnings (loss) per share may not add in certain periods due to rounding. | | | | | |
| | | | | | | | | |
Weighted average shares outstanding: | | | | | | | | | |
| | | | | | | | | |
Basic | | 125,504 | | 128,489 | | 128,785 | | 128,077 | |
| | | | | | | | | |
Diluted | | 126,704 | | 131,209 | | 130,755 | | 131,247 | |
| | | | | | | | | |
Operating income before depreciation and amortization: | | | | | | | | | |
| | | | | | | | | |
Operating income | | $ | 64,131 | | $ | 57,830 | | $ | 214,713 | | $ | 229,864 | |
Depreciation and amortization of intangibles | | 12,828 | | 9,765 | | 46,977 | | 39,780 | |
Amortization of stock based compensation | | 3,728 | | 2,424 | | 28,181 | | 10,819 | |
| | | | | | | | | |
Operating income before depreciation and amortization | | $ | 80,687 | | $ | 70,019 | | $ | 289,871 | | $ | 280,463 | |
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MONSTER WORLDWIDE, INC. |
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS |
(in thousands) |
| | Three Months Ended December 31, | | Year Ended December 31, | |
| | 2007 | | 2006 | | 2007 | | 2006 | |
Cash flows provided by operating activities: | | | | | | | | | |
Net income | | $ | 45,000 | | $ | 39,075 | | $ | 146,399 | | $ | 37,137 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | |
Loss from discontinued operations, net of tax | | 290 | | 1,155 | | 761 | | 116,450 | |
Depreciation and amortization of intangibles | | 12,828 | | 9,765 | | 46,977 | | 39,780 | |
Provision for doubtful accounts | | 4,453 | | 2,550 | | 12,906 | | 9,055 | |
Non-cash compensation | | 3,728 | | 2,424 | | 28,181 | | 10,819 | |
Common stock issued for matching contribution to 401(k) plan | | — | | — | | — | | 1,854 | |
Deferred income taxes | | (2,762 | ) | 2,267 | | (5,459 | ) | 10,781 | |
Loss (gain) on disposal of assets | | 3 | | — | | (571 | ) | — | |
Loss in equity interests and other | | 838 | | 1,521 | | 8,298 | | 7,096 | |
Changes in assets and liabilities, net of business combinations: | | | | | | | | | |
Accounts receivable | | (101,843 | ) | (122,790 | ) | (67,778 | ) | (171,312 | ) |
Prepaid and other | | (12,766 | ) | 2,465 | | (24,977 | ) | (21,817 | ) |
Deferred revenue | | 89,650 | | 97,440 | | 80,186 | | 116,556 | |
Accounts payable, accrued liabilities and other | | 27,091 | | 11,322 | | 51,840 | | 92,595 | |
Net cash provided by (used for) operating activities of discontinued operations | | (2,326 | ) | (2,635 | ) | (7,584 | ) | 19,201 | |
Total adjustments | | 19,184 | | 5,484 | | 122,780 | | 231,058 | |
Net cash provided by operating activities | | 64,184 | | 44,559 | | 269,179 | | 268,195 | |
| | | | | | | | | |
Cash flows used for investing activities: | | | | | | | | | |
Capital expenditures | | (16,240 | ) | (17,238 | ) | (64,055 | ) | (55,606 | ) |
Purchase of marketable securities | | (415,025 | ) | (373,959 | ) | (1,424,861 | ) | (1,722,425 | ) |
Sales and maturities of marketable securities | | 478,068 | | 342,351 | | 1,514,051 | | 1,308,279 | |
Payments for acquisitions and intangible assets, net of cash acquired | | (610 | ) | (688 | ) | (2,549 | ) | (19,601 | ) |
Investment in unconsolidated affiliate | | — | | — | | — | | (19,936 | ) |
Net proceeds from sale of business | | — | | — | | | | 69,155 | |
Cash funded to equity investee | | — | | (2,800 | ) | (10,000 | ) | (10,000 | ) |
Net cash used for investing activities of discontinued operations | | — | | — | | — | | (2,924 | ) |
Net cash provided by (used for) investing activities | | 46,193 | | (52,334 | ) | 12,586 | | (453,058 | ) |
| | | | | | | | | |
Cash flows provided by financing activities: | | | | | | | | | |
Payments on capital lease obligations | | (42 | ) | 322 | | (100 | ) | (171 | ) |
Payments on acquisition debt | | (1,500 | ) | 440 | | (23,362 | ) | (29,245 | ) |
Proceeds from exercise of employee stock options | | 838 | | 1,038 | | 54,890 | | 92,263 | |
Excess tax benefits from equity compensation plans | | (155 | ) | 632 | | 13,799 | | 17,972 | |
Repurchase of common stock | | (97,761 | ) | (318 | ) | (262,495 | ) | (14,734 | ) |
Structured stock repurchase, net | | — | | — | | — | | (22,758 | ) |
Net cash (used in) provided by financing activities | | (98,620 | ) | 2,114 | | (217,268 | ) | 43,327 | |
| | | | | | | | | |
Effects of exchange rates on cash | | 772 | | 1,553 | | 6,567 | | 3,619 | |
| | | | | | | | | |
Net increase (decrease) in cash and cash equivalents | | 12,529 | | (4,108 | ) | 71,064 | | (137,917 | ) |
Cash and cash equivalents, beginning of period | | 117,215 | | 62,788 | | 58,680 | | 196,597 | |
Cash and cash equivalents, end of period | | $ | 129,744 | | $ | 58,680 | | $ | 129,744 | | $ | 58,680 | |
| | | | | | | | | |
Free cash flow: | | | | | | | | | |
| | | | | | | | | |
Net cash provided by operating activities | | $ | 64,184 | | $ | 44,559 | | $ | 269,179 | | $ | 268,195 | |
Less: Capital expenditures | | (16,240 | ) | (17,238 | ) | (64,055 | ) | (55,606 | ) |
Free cash flow | | $ | 47,944 | | $ | 27,321 | | $ | 205,124 | | $ | 212,589 | |
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MONSTER WORLDWIDE, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
Assets: | | December 31, 2007 | | December 31, 2006 | |
| | | | | |
Cash and cash equivalents | | $ | 129,744 | | $ | 58,680 | |
Available-for-sale securities | | 448,703 | | 537,893 | |
Accounts receivable, net | | 499,854 | | 444,747 | |
Property and equipment, net | | 126,962 | | 102,402 | |
Goodwill and intangibles, net | | 661,850 | | 640,736 | |
Other assets | | 210,697 | | 185,345 | |
Total assets | | $ | 2,077,810 | | $ | 1,969,803 | |
| | | | | |
Liabilities and Stockholders’ equity: | | | | | |
| | | | | |
Accounts payable, accrued expenses and other | | $ | 304,145 | | $ | 358,850 | |
Deferred revenue | | 524,331 | | 444,145 | |
Long-term income taxes payable | | 111,108 | | — | |
Other liabilities | | 21,310 | | 33,459 | |
Debt | | 415 | | 23,664 | |
Total liabilities | | 961,309 | | 860,118 | |
| | | | | |
Stockholders’ equity | | 1,116,501 | | 1,109,685 | |
| | | | | |
Total liabilities and stockholders’ equity | | $ | 2,077,810 | | $ | 1,969,803 | |
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MONSTER WORLDWIDE, INC.
UNAUDITED OPERATING SEGMENT INFORMATION
(in thousands)
| | MONSTER | | | | | |
Three Months Ended December 31, 2007 | | Careers - North America | | Careers -International | | Internet Advertising & Fees | | Subtotal | | Corporate Expenses | | Total | |
| | | | | | | | | | | | | |
Revenue | | $ | 173,577 | | $ | 143,300 | | $ | 37,111 | | $ | 353,988 | | | | $ | 353,988 | |
Operating income | | 52,950 | | 24,753 | | 75 | | 77,778 | | $ | (13,647 | ) | 64,131 | |
OIBDA | | 59,147 | | 29,980 | | 2,592 | | 91,719 | | (11,032 | ) | 80,687 | |
| | | | | | | | | | | | | |
Operating margin | | 30.5 | % | 17.3 | % | 0.2 | % | 22.0 | % | | | 18.1 | % |
OIBDA margin | | 34.1 | % | 20.9 | % | 7.0 | % | 25.9 | % | | | 22.8 | % |
| | | | | | | | | | | | | | | | | | | |
| | MONSTER | | | | | |
Three Months Ended December 31, 2006 | | Careers - North America | | Careers -International | | Internet Advertising & Fees | | Subtotal | | Corporate Expenses | | Total | |
| | | | | | | | | | | | | |
Revenue | | $ | 168,327 | | $ | 89,933 | | $ | 40,356 | | $ | 298,616 | | | | $ | 298,616 | |
Operating income | | 59,853 | | 9,658 | | 11,170 | | 80,681 | | $ | (22,851 | ) | 57,830 | |
OIBDA | | 64,984 | | 13,001 | | 12,849 | | 90,834 | | (20,815 | ) | 70,019 | |
| | | | | | | | | | | | | |
Operating margin | | 35.6 | % | 10.7 | % | 27.7 | % | 27.0 | % | | | 19.4 | % |
OIBDA margin | | 38.6 | % | 14.5 | % | 31.8 | % | 30.4 | % | | | 23.4 | % |
| | | | | | | | | | | | | | | | | | | |
| | MONSTER | | | | | |
Year Ended December 31, 2007 | | Careers - North America | | Careers -International | | Internet Advertising & Fees | | Subtotal | | Corporate Expenses | | Total | |
| | | | | | | | | | | | | |
Revenue | | $ | 707,384 | | $ | 488,038 | | $ | 155,887 | | $ | 1,351,309 | | | | $ | 1,351,309 | |
Operating income | | 224,862 | | 52,113 | | 12,092 | | 289,067 | | $ | (74,354 | ) | 214,713 | |
OIBDA | | 248,664 | | 72,832 | | 21,892 | | 343,388 | | (53,517 | ) | 289,871 | |
| | | | | | | | | | | | | |
Operating margin | | 31.8 | % | 10.7 | % | 7.8 | % | 21.4 | % | | | 15.9 | % |
OIBDA margin | | 35.2 | % | 14.9 | % | 14.0 | % | 25.4 | % | | | 21.5 | % |
| | | | | | | | | | | | | | | | | | | |
| | MONSTER | | | | | |
Year Ended December 31, 2006 | | Careers - North America | | Careers -International | | Internet Advertising & Fees | | Subtotal | | Corporate Expenses | | Total | |
| | | | | | | | | | | | | |
Revenue | | $ | 658,051 | | $ | 306,280 | | $ | 152,345 | | $ | 1,116,676 | | | | $ | 1,116,676 | |
Operating income | | 227,202 | | 17,423 | | 45,062 | | 289,687 | | $ | (59,823 | ) | 229,864 | |
OIBDA | | 247,087 | | 33,037 | | 52,196 | | 332,320 | | (51,857 | ) | 280,463 | |
| | | | | | | | | | | | | |
Operating margin | | 34.5 | % | 5.7 | % | 29.6 | % | 25.9 | % | | | 20.6 | % |
OIBDA margin | | 37.5 | % | 10.8 | % | 34.3 | % | 29.8 | % | | | 25.1 | % |
| | | | | | | | | | | | | | | | | | | |
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MONSTER WORLDWIDE, INC.
UNAUDITED NON-GAAP STATEMENTS OF OPERATIONS AND RECONCILIATIONS
(in thousands, except per share amounts)
| For the Three Months Ended December 31, 2007 | | For the Three Months Ended December 31, 2006 | |
| As Reported | | Proforma Adjustments | | Non-GAAP | | As Reported | | Proforma Adjustments | | Non-GAAP | |
| | | | | | | | | | | | |
Revenue | $ | 353,988 | | — | | $ | 353,988 | | $ | 298,616 | | — | | $ | 298,616 | |
| | | | | | | | | | | | |
Salaries and related | 132,828 | | — | | 132,828 | | 114,596 | | (5,000 | )(a) | 109,596 | |
Office and general | 70,890 | | (4,781 | )(a) | 66,109 | | 59,772 | | (8,566 | )(a) | 51,206 | |
Marketing and promotion | 80,697 | | — | | 80,697 | | 66,418 | | — | | 66,418 | |
Restructuring and other special charges | 5,442 | | (5,442 | )(b) | — | | — | | — | | — | |
Total operating expenses | 289,857 | | (10,223 | ) | 279,634 | | 240,786 | | (13,566 | ) | 227,220 | |
Operating income | 64,131 | | 10,223 | | 74,354 | | 57,830 | | 13,566 | | 71,396 | |
Operating margin | 18.1 | % | | | 21.0 | % | 19.4 | % | | | 23.9 | % |
| | | | | | | | | | | | |
Interest and other, net | 6,840 | | — | | 6,840 | | 6,398 | | — | | 6,398 | |
| | | | | | | | | | | | |
Income from continuing operations before income taxes and equity interests | 70,971 | | 10,223 | | 81,194 | | 64,228 | | 13,566 | | 77,794 | |
| | | | | | | | | | | | |
Income taxes | 24,843 | | 3,579 | (c) | 28,422 | | 22,481 | | 4,748 | (c) | 27,229 | |
Losses in equity interests, net | (838 | ) | — | | (838 | ) | (1,517 | ) | | | (1,517 | ) |
Income from continuing operations | $ | 45,290 | | $ | 6,644 | | $ | 51,934 | | $ | 40,230 | | $ | 8,818 | | $ | 49,048 | |
| | | | | | | | | | | | |
Diluted Earnings per share from continuing operations* | $ | 0.36 | | $ | 0.05 | | $ | 0.41 | | $ | 0.31 | | $ | 0.07 | | $ | 0.37 | |
| | | | | | | | | | | | |
Weighted average shares outstanding: | | | | | | | | | | | | |
Diluted | 126,704 | | 126,704 | | 126,704 | | 131,209 | | 131,209 | | 131,209 | |
| | Year Ended December 31, 2007 | | Year Ended December 31, 2006 | |
| | As Reported | | Proforma Adjustments | | Non-GAAP | | As Reported | | Proforma Adjustments | | Non-GAAP | |
| | | | | | | | | | | | | |
Revenue | | $ | 1,351,309 | | — | | $ | 1,351,309 | | $ | 1,116,676 | | — | | $ | 1,116,676 | |
| | | | | | | | | | | | | |
Salaries and related | | 529,578 | | (15,777 | )(a) | 513,801 | | 411,849 | | (5,000 | )(a) | 406,849 | |
Office and general | | 277,262 | | (28,198 | )(a) | 249,064 | | 201,457 | | (13,279 | )(a) | 188,178 | |
Marketing and promotion | | 313,159 | | — | | 313,159 | | 273,506 | | — | | 273,506 | |
Restructuring and other special charges | | 16,597 | | (16,597 | )(b) | — | | — | | — | | — | |
Total operating expenses | | 1,136,596 | | (60,572 | ) | 1,076,024 | | 886,812 | | (18,279 | ) | 868,533 | |
Operating income | | 214,713 | | 60,572 | | 275,285 | | 229,864 | | 18,279 | | 248,143 | |
Operating margin | | 15.9 | % | | | 20.4 | % | 20.6 | % | | | 22.2 | % |
| | | | | | | | | | | | | |
Interest and other, net | | 25,344 | | — | | 25,344 | | 18,480 | | — | | 18,480 | |
| | | | | | | | | | | | | |
Income from continuing operations before income taxes and equity interests | | 240,057 | | 60,572 | | 300,629 | | 248,344 | | 18,279 | | 266,623 | |
| | | | | | | | | | | | | |
Income taxes | | 84,599 | | 21,346 | (c) | 105,945 | | 87,661 | | 6,452 | (c) | 94,113 | |
Losses in equity interests, net | | (8,298 | ) | — | | (8,298 | ) | (7,096 | ) | — | | (7,096 | ) |
Income from continuing operations | | $ | 147,160 | | $ | 39,226 | | $ | 186,386 | | $ | 153,587 | | $ | 11,827 | | $ | 165,414 | |
| | | | | | | | | | | | | |
Diluted Earnings per share from continuing operations* | | $ | 1.13 | | $ | 0.30 | | $ | 1.43 | | $ | 1.17 | | $ | 0.09 | | $ | 1.26 | |
| | | | | | | | | | | | | |
Weighted average shares outstanding: | | | | | | | | | | | | | |
Diluted | | 130,755 | | 130,755 | | 130,755 | | 131,247 | | 131,247 | | 131,247 | |
Note Regarding ProForma Adjustments:
The financial information included herein contains certain non-GAAP financial measures. This information is not intended to be used in place of the financial information prepared and presented in accordance with GAAP, nor is it intended to be considered in isolation. We believe that the above presentation of non-GAAP measures provide useful information to management and investors regarding certain core operating and business trends relating to our results of operations, exclusive of certain restructuring related and other special charges.
ProForma adjustments consist of the following:
(a) Costs associated with the ongoing investigation into the Company’s historical stock option granting practices, severance charges associated with the termination of certain executives in the second quarter of 2007 and costs associated with the remediation of a security breach related to the Company’s resume database in August 2007.
(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.
*Diluted earnings per share may not add in certain periods due to rounding.
10
MONSTER WORLDWIDE, INC.
UNAUDITED NON-GAAP OPERATING SEGMENT INFORMATION
(in thousands)
| | MONSTER | | | | | |
Three Months Ended December 31, 2007 | | Careers - North America | | Careers - International | | Internet Advertising & Fees | | Subtotal | | Corporate Expenses | | Total | |
| | | | | | | | | | | | | |
Revenue | | $ | 173,577 | | $ | 143,300 | | $ | 37,111 | | $ | 353,988 | | | | $ | 353,988 | |
Operating income - GAAP | | $ | 52,950 | | $ | 24,753 | | $ | 75 | | $ | 77,778 | | $ | (13,647 | ) | $ | 64,131 | |
Proforma Adjustments | | 3,532 | | 3,946 | | 1,275 | | 8,753 | | 1,470 | | 10,223 | |
Operating income - Non GAAP | | $ | 56,482 | | $ | 28,699 | | $ | 1,350 | | $ | 86,531 | | $ | (12,177 | ) | $ | 74,354 | |
| | | | | | | | | | | | | |
Operating margin - GAAP | | 30.5 | % | 17.3 | % | 0.2 | % | 22.0 | % | | | 18.1 | % |
Operating margin - Non GAAP | | 32.5 | % | 20.0 | % | 3.6 | % | 24.4 | % | | | 21.0 | % |
| | MONSTER | | | | | |
Three Months Ended December 31, 2006 | | Careers - North America | | Careers - International | | Internet Advertising & Fees | | Subtotal | | Corporate Expenses | | Total | |
| | | | | | | | | | | | | |
Revenue | | $ | 168,327 | | $ | 89,933 | | $ | 40,356 | | $ | 298,616 | | | | $ | 298,616 | |
Operating income - GAAP | | $ | 59,853 | | $ | 9,658 | | $ | 11,170 | | $ | 80,681 | | $ | (22,851 | ) | $ | 57,830 | |
Proforma Adjustments | | — | | — | | — | | — | | 13,566 | | 13,566 | |
Operating income - Non GAAP | | $ | 59,853 | | $ | 9,658 | | $ | 11,170 | | $ | 80,681 | | $ | (9,285 | ) | $ | 71,396 | |
| | | | | | | | | | | | | |
Operating margin - GAAP | | 35.6 | % | 10.7 | % | 27.7 | % | 27.0 | % | | | 19.4 | % |
Operating margin - Non GAAP | | 35.6 | % | 10.7 | % | 27.7 | % | 27.0 | % | | | 23.9 | % |
| | MONSTER | | | | | |
Year Ended December 31, 2007 | | Careers - North America | | Careers - International | | Internet Advertising & Fees | | Subtotal | | Corporate Expenses | | Total | |
| | | | | | | | | | | | | |
Revenue | | $ | 707,384 | | $ | 488,038 | | $ | 155,887 | | $ | 1,351,309 | | | | $ | 1,351,309 | |
Operating income - GAAP | | $ | 224,862 | | $ | 52,113 | | $ | 12,092 | | $ | 289,067 | | $ | (74,354 | ) | $ | 214,713 | |
Proforma Adjustments | | 11,957 | | 10,191 | | 3,192 | | 25,340 | | 35,232 | | 60,572 | |
Operating income - Non GAAP | | $ | 236,819 | | $ | 62,304 | | $ | 15,284 | | $ | 314,407 | | $ | (39,122 | ) | $ | 275,285 | |
| | | | | | | | | | | | | |
Operating margin - GAAP | | 31.8 | % | 10.7 | % | 7.8 | % | 21.4 | % | | | 15.9 | % |
Operating margin - Non GAAP | | 33.5 | % | 12.8 | % | 9.8 | % | 23.3 | % | | | 20.4 | % |
| | MONSTER | | | | | |
Year Ended December 31, 2006 | | Careers - North America | | Careers - International | | Internet Advertising & Fees | | Subtotal | | Corporate Expenses | | Total | |
| | | | | | | | | | | | | |
Revenue | | $ | 658,051 | | $ | 306,280 | | $ | 152,345 | | $ | 1,116,676 | | | | $ | 1,116,676 | |
Operating income - GAAP | | $ | 227,202 | | $ | 17,423 | | $ | 45,062 | | $ | 289,687 | | $ | (59,823 | ) | $ | 229,864 | |
Proforma Adjustments | | — | | — | | — | | — | | 18,279 | | 18,279 | |
Operating income - Non GAAP | | $ | 227,202 | | $ | 17,423 | | $ | 45,062 | | $ | 289,687 | | $ | (41,544 | ) | $ | 248,143 | |
| | | | | | | | | | | | | |
Operating margin - GAAP | | 34.5 | % | 5.7 | % | 29.6 | % | 25.9 | % | | | 20.6 | % |
Operating margin - Non GAAP | | 34.5 | % | 5.7 | % | 29.6 | % | 25.9 | % | | | 22.2 | % |
11