Exhibit 99.2
FINANCIAL SUPPLEMENT March 31, 2013
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
Discontinued Operations
For the three months ended March 31, 2013 and 2012, the Company reported a loss from discontinued operations, net of tax, of $6.1 million and $9.6 million, respectively. Included in the results from discontinued operations are the results of our operations in Careers – China, Latin America and Turkey.
During the third quarter of 2012, as part of the Company’s review of strategic alternatives, the Company made the decision to sell its Careers-China business. The sale of the Careers-China business to Saongroup, Ltd. (“Saongroup”) was completed on February 5, 2013. The Company received a 10% minority interest in the combined China business of Saongroup (Saongroup has a Chinese operation as well). Prior to the close of the sale of Careers – China, the Company incurred charges relating to severance benefits associated with terminated employees, retention benefits for employees who will remain with the combined operations and certain lease obligation costs. At February 5, 2013, there was $23.1 million of accumulated unrealized currency translation gain related to the net assets of Careers-China. With the sale of Careers-China on February 5, 2013, the Company recorded the foreign currency translation adjustment as a reduction of the loss on disposition of discontinued operations. Additionally, the Company recorded a tax benefit of $4.0 million related to Careers—China for the three months ended March 31, 2013. Accordingly, the Company recorded a loss from discontinued operations, net of tax, of $4.6 million for the three months ended March 31, 2013. The Company does not expect to incur significant additional charges in future periods relating to Careers—China.
During the fourth quarter of 2012, the Company made the strategic decision to discontinue operations in Latin America and Turkey. All of the Latin America and Turkey business operations were discontinued on or before December 31, 2012. The Company incurred approximately $8.0 million of costs associated with the shutdown of these businesses in the fourth quarter of 2012. In the first quarter of 2013, the Company incurred an additional $2.1 million, primarily relating to severance costs associated with terminated employees of our operations in Latin America and Turkey. Additionally, the Company recorded a tax benefit of $0.5 million related to discontinued operations in Latin America and Turkey for the three months ended March 31, 2013. Accordingly, the Company recorded a loss from discontinued operations, net of tax, of $1.6 million for the three months ended March 31, 2013. The Company does not expect to incur significant additional charges in future periods relating to Latin America or Turkey.
Restructuring
On January 24, 2012, the Company committed to a plan to take a series of restructuring actions. The Company’s decision to adopt the restructuring actions resulted from the Company’s desire to provide the Company with more flexibility to invest in marketing and sales activities in order to improve its long-term growth prospects and profitability. The restructuring actions included reducing the Company’s workforce, consolidation of certain office facilities and the impairment of certain fixed assets. For the three months ended March 31, 2012, the Company incurred $24.3 million of restructuring costs.
On November 8, 2012, the Company announced actions to concentrate resources on core businesses within North America and key European and Asian markets with increased spending in marketing and sales. The restructuring actions included reducing the Company’s workforce, consolidating certain office facilities and impairing certain fixed assets. In the three months ended March 31, 2013, the Company incurred $13.2 million of restructuring costs.
Strategic Alternatives
On March 1, 2012, the Company announced that it had resolved to explore strategic alternatives to maximize value for the Company’s stockholders. During the three months ended March 31, 2013, the Company incurred $1.4 million of costs related to the review of strategic alternatives.
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Income Tax Benefit
In the first quarter of 2012, the Company recognized an income tax benefit relating to losses associated with the Company’s restructuring activities. In the first quarter of 2013, the Company recognized an income tax benefit relating to the reversal of uncertain tax positions. These items have been excluded from our non-GAAP financial statements in the three months ended March 31, 2013 and 2012.
Recovery of Restitution Award from Former Executive
In May 2009, the former Chief Operating Officer of the Company was convicted of securities fraud in connection with the Company’s historical stock option granting practices. As a result of his conviction, he was ordered to pay an amount approximating $5.6 million in a civil forfeiture to the federal government. The Company filed a petition with the United States Department of Justice (“DOJ”) seeking such sum in partial restitution for the damages the former Chief Operating Officer caused to the Company. The DOJ granted the Company’s request during the first quarter of 2012 and remitted $5.6 million to the Company in April 2012, which resulted in a net $5.4 million gain in the three months ended March 31, 2012 after deducting legal fees incurred by the Company.
Reclassifications
Certain reclassifications of prior year amounts have been made for consistent presentation.
Non-GAAP financial measures
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, 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 revenue, operating expenses, operating income from continuing operations, operating margin, net income from continuing operations, net (loss) income from discontinued operations, and diluted earnings (loss) per share all exclude certain pro-forma adjustments including: costs incurred for the 2012 restructurings; recovery of restitution award from former executive; costs incurred related to the Company’s review of strategic alternatives; income tax benefits associated with the reversal of income tax reserves on uncertain tax positions and a tax benefit related to certain losses arising from the Company’s restructuring program; and the results of the businesses in Careers – China, Latin America and Turkey as they have been classified as discontinued operations. 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.
Earnings before interest, taxes, depreciation and amortization (“EBITDA”) is defined as net income or loss before interest income or expense, income tax expense or benefit, net gain or loss in equity interests, depreciation and amortization and non-cash compensation expense. The Company considers 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. EBITDA is a non-GAAP measure and may not be comparable to similarly titled measures reported by other companies.
Operating income before depreciation and amortization (“OIBDA”) is defined as net income or loss before depreciation, amortization of intangible assets, amortization of stock-based compensation and non-cash costs incurred in connection with the Company’s restructuring program. The Company considers OIBDA to be an important indicator of its operational strength. This measure eliminates the effects of depreciation, amortization of intangible assets, amortization of stock-based compensation and non-cash restructuring costs 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.
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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 and securities are defined as cash and cash equivalents plus short-term and long-term marketable securities, less total debt. Total available liquidity is defined as cash and cash equivalents, plus short-term and long-term marketable securities, plus unused borrowings under our credit facility. The Company considers net cash and securities 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 securities and total available liquidity, among other measures, in evaluating its choices for capital deployment. Net cash and securities and total available liquidity are presented herein as non-GAAP measures and may not be comparable to similarly titled measures used by other companies.
Selected financial ratios
We have included selected financial ratios in this financial supplement in order to assist investors to further evaluate our business. Our definitions and calculations are as follows:
Annualized return on equity
Annualized return on equity measures our effectiveness and ability to generate future profitability on the earnings that we retain. In addition, the ratio is a strong indicator of how well we utilize shareholders’ investments in our business. We calculate annualized return on equity as follows:
Annualized net income / Average stockholders’ equity
Book value per share
Book value per share is a market value indicator that we utilize when analyzing our stockholders’ equity. We calculate book value per share as follows:
Stockholders’ equity / Total shares outstanding
Cash and marketable securities per share
We calculate cash and marketable securities per share as follows:
(Cash and cash equivalents + Current marketable securities + Non-current marketable securities) / Total shares outstanding
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Monster Worldwide, Inc.
Statements of Operations
(unaudited, in thousands, except per share amounts)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Trended Data | |
Summary P&L Information | | Q1 2012 | | | Q2 2012 | | | Q3 2012 | | | Q4 2012 | | | FY 2012 | | | Q1 2013 | |
Monster Careers | | $ | 214,369 | | | $ | 205,034 | | | $ | 202,017 | | | $ | 192,672 | | | $ | 814,092 | | | $ | 193,654 | |
Internet Advertising & Fees | | | 19,381 | | | | 19,543 | | | | 18,804 | | | | 18,572 | | | | 76,300 | | | | 18,332 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Revenue | | | 233,750 | | | | 224,577 | | | | 220,821 | | | | 211,244 | | | | 890,392 | | | | 211,986 | |
Salary and related | | | 104,060 | | | | 92,558 | | | | 93,097 | | | | 90,416 | | | | 380,131 | | | | 90,781 | |
Office and general | | | 36,643 | | | | 41,993 | | | | 44,575 | | | | 39,111 | | | | 162,322 | | | | 35,028 | |
Marketing and promotion | | | 49,298 | | | | 51,426 | | | | 43,099 | | | | 44,503 | | | | 188,326 | | | | 49,267 | |
Recovery of restitution award from former executive | | | (5,350 | ) | | | — | | | | — | | | | — | | | | (5,350 | ) | | | — | |
Restructuring and other special charges | | | 24,268 | | | | 1,015 | | | | 244 | | | | 14,831 | | | | 40,358 | | | | 13,167 | |
Depreciation expense | | | 12,782 | | | | 12,867 | | | | 12,991 | | | | 13,286 | | | | 51,926 | | | | 13,000 | |
Amortization of restricted stock | | | 8,201 | | | | 7,254 | | | | 5,683 | | | | 6,985 | | | | 28,123 | | | | 6,794 | |
Non-cash stock option expense | | | 51 | | | | — | | | | — | | | | — | | | | 51 | | | | — | |
Amortization of intangibles | | | 3,083 | | | | 3,085 | | | | 3,085 | | | | 3,100 | | | | 12,353 | | | | 3,104 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Operating expenses | | | 233,036 | | | | 210,198 | | | | 202,774 | | | | 212,232 | | | | 858,240 | | | | 211,141 | |
Operating income (loss) | | | 714 | | | | 14,379 | | | | 18,047 | | | | (988 | ) | | | 32,152 | | | | 845 | |
Interest and other, net | | | (1,463 | ) | | | (1,189 | ) | | | (1,532 | ) | | | (1,699 | ) | | | (5,883 | ) | | | (1,268 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
(Loss) income before income taxes and equity interests | | | (749 | ) | | | 13,190 | | | | 16,515 | | | | (2,687 | ) | | | 26,269 | | | | (423 | ) |
Provision for (benefit from) income taxes | | | (14,304 | ) | | | 3,930 | | | | (24,871 | ) | | | 2,267 | | | | (32,978 | ) | | | (11,999 | ) |
Loss in equity interests, net | | | (200 | ) | | | (255 | ) | | | (271 | ) | | | (355 | ) | | | (1,081 | ) | | | (458 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from continuing operations | | | 13,355 | | | | 9,005 | | | | 41,115 | | | | (5,309 | ) | | | 58,166 | | | | 11,118 | |
Loss from discontinued operations, net of tax | | | (9,613 | ) | | | (4,203 | ) | | | (235,354 | ) | | | (67,716 | ) | | | (316,886 | ) | | | (6,134 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss) | | $ | 3,742 | | | $ | 4,802 | | | $ | (194,239 | ) | | $ | (73,025 | ) | | $ | (258,720 | ) | | $ | 4,984 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Basic income (loss) per share: | | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from continuing operations | | | 0.11 | | | | 0.08 | | | | 0.37 | | | | (0.05 | ) | | | 0.52 | | | | 0.10 | |
Loss from discontinued operations, net of tax | | | (0.08 | ) | | | (0.04 | ) | | | (2.12 | ) | | | (0.61 | ) | | | (2.81 | ) | | | (0.06 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss) | | $ | 0.03 | | | $ | 0.04 | | | $ | (1.75 | ) | | $ | (0.66 | ) | | $ | (2.29 | ) | | $ | 0.04 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Diluted income (loss) per share: | | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from continuing operations | | | 0.11 | | | | 0.08 | | | | 0.37 | | | | (0.05 | ) | | | 0.51 | | | | 0.10 | |
Loss from discontinued operations, net of tax | | | (0.08 | ) | | | (0.04 | ) | | | (2.10 | ) | | | (0.61 | ) | | | (2.78 | ) | | | (0.06 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss) | | $ | 0.03 | | | $ | 0.04 | | | $ | (1.73 | ) | | $ | (0.66 | ) | | $ | (2.27 | ) | | $ | 0.04 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Weighted avg. shares outstanding: | | | | | | | | | | | | | | | | | | | | | | | | |
Basic shares | | | 116,199 | | | | 112,937 | | | | 111,239 | | | | 111,098 | | | | 112,866 | | | | 111,402 | |
Diluted shares | | | 117,611 | | | | 114,038 | | | | 112,212 | | | | 111,098 | | | | 113,995 | | | | 112,637 | |
Global employees —continuing operations (ones) | | | 4,366 | | | | 4,432 | | | | 4,331 | | | | 4,037 | | | | 4,037 | | | | 3,852 | |
Annualized revenue per average employee | | $ | 207.4 | | | $ | 204.2 | | | $ | 201.6 | | | $ | 202.0 | | | $ | 203.8 | | | $ | 215.0 | |
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Monster Worldwide, Inc.
Non-GAAP Statement of Operations
(unaudited, in thousands, except per share amounts)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Trended Data | |
Summary P&L Information | | Q1 2012 | | | Q2 2012 | | | Q3 2012 | | | Q4 2012 | | | FY 2012 | | | Q1 2013 | |
Monster Careers | | $ | 214,369 | | | $ | 205,034 | | | $ | 202,017 | | | $ | 192,672 | | | $ | 814,092 | | | $ | 193,654 | |
Internet Advertising & Fees | | | 19,381 | | | | 19,543 | | | | 18,804 | | | | 18,572 | | | | 76,300 | | | | 18,332 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Revenue | | | 233,750 | | | | 224,577 | | | | 220,821 | | | | 211,244 | | | | 890,392 | | | | 211,986 | |
Salary and related | | | 104,060 | | | | 92,558 | | | | 93,097 | | | | 90,416 | | | | 380,131 | | | | 90,781 | |
Office and general | | | 36,643 | | | | 40,164 | | | | 43,093 | | | | 37,763 | | | | 157,663 | | | | 33,653 | |
Marketing and promotion | | | 49,298 | | | | 51,426 | | | | 43,099 | | | | 44,503 | | | | 188,326 | | | | 49,267 | |
Depreciation expense | | | 12,782 | | | | 12,867 | | | | 12,991 | | | | 13,286 | | | | 51,926 | | | | 13,000 | |
Amortization of restricted stock | | | 8,201 | | | | 7,254 | | | | 5,683 | | | | 6,985 | | | | 28,123 | | | | 6,794 | |
Non-cash stock option expense | | | 51 | | | | — | | | | — | | | | — | | | | 51 | | | | — | |
Amortization of intangibles | | | 3,083 | | | | 3,085 | | | | 3,085 | | | | 3,100 | | | | 12,353 | | | | 3,104 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Operating expenses | | | 214,118 | | | | 207,354 | | | | 201,048 | | | | 196,053 | | | | 818,573 | | | | 196,599 | |
Operating income | | | 19,632 | | | | 17,223 | | | | 19,774 | | | | 15,190 | | | | 71,819 | | | | 15,387 | |
Interest and other, net | | | (1,463 | ) | | | (1,189 | ) | | | (1,532 | ) | | | (1,699 | ) | | | (5,883 | ) | | | (1,268 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income before income taxes and loss in equity interests | | | 18,169 | | | | 16,034 | | | | 18,242 | | | | 13,491 | | | | 65,936 | | | | 14,119 | |
Provision for income taxes | | | 6,441 | | | | 4,919 | | | | 6,297 | | | | 4,440 | | | | 22,097 | | | | 4,942 | |
Loss in equity interests, net | | | (200 | ) | | | (255 | ) | | | (271 | ) | | | (355 | ) | | | (1,081 | ) | | | (458 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income from continuing operations | | | 11,528 | | | | 10,860 | | | | 11,674 | | | | 8,696 | | | | 42,758 | | | | 8,719 | |
Diluted income per share: | | | | | | | | | | | | | | | | | | | | | | | | |
Income from continuing operations | | $ | 0.10 | | | $ | 0.10 | | | $ | 0.10 | | | $ | 0.08 | | | $ | 0.38 | | | $ | 0.08 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Weighted avg. shares outstanding: | | | | | | | | | | | | | | | | | | | | | | | | |
Basic shares | | | 116,199 | | | | 112,937 | | | | 111,239 | | | | 111,098 | | | | 112,866 | | | | 111,402 | |
Diluted shares | | | 117,611 | | | | 114,038 | | | | 112,212 | | | | 112,129 | | | | 113,995 | | | | 112,637 | |
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Monster Worldwide, Inc.
Segment Information and Margin Analysis—GAAP and Non-GAAP
(unaudited, in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Trended Data | |
| | | Q1 2012 | | | Q2 2012 | | | Q3 2012 | | | Q4 2012 | | | FY 2012 | | | Q1 2013 | |
Segment Revenue: GAAP | | | | | | | | | | | | | | | | | | | | | | | | |
Careers—North America | | $ | 119,774 | | | $ | 116,189 | | | $ | 115,455 | | | $ | 111,544 | | | $ | 462,962 | | | $ | 115,935 | |
Careers—International | | | 94,595 | | | | 88,845 | | | | 86,562 | | | | 81,128 | | | | 351,130 | | | | 77,719 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Careers Revenue—GAAP | | | 214,369 | | | | 205,034 | | | | 202,017 | | | | 192,672 | | | | 814,092 | | | | 193,654 | |
Internet Advertising & Fees Revenue—GAAP | | | 19,381 | | | | 19,543 | | | | 18,804 | | | | 18,572 | | | | 76,300 | �� | | | 18,332 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Monster Revenue—GAAP | | $ | 233,750 | | | $ | 224,577 | | | $ | 220,821 | | | $ | 211,244 | | | $ | 890,392 | | | $ | 211,986 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Segment operating income (loss): GAAP | | | | | | | | | | | | | | | | | | | | | | | | |
Careers—North America | | $ | 3,199 | | | $ | 14,911 | | | $ | 17,169 | | | $ | 7,407 | | | $ | 42,686 | | | $ | 12,423 | |
Careers—International | | | 2,881 | | | | 6,336 | | | | 7,543 | | | | (3,684 | ) | | | 13,076 | | | | (8,991 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Careers operating income GAAP | | | 6,080 | | | | 21,247 | | | | 24,712 | | | | 3,723 | | | | 55,762 | | | | 3,432 | |
Internet Advertising & Fees operating income GAAP | | | 3,268 | | | | 5,307 | | | | 4,990 | | | | 4,156 | | | | 17,721 | | | | 6,262 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Monster operating income | | $ | 9,348 | | | $ | 26,554 | | | $ | 29,702 | | | $ | 7,879 | | | $ | 73,483 | | | $ | 9,694 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Corporate expenses GAAP | | | (8,634 | ) | | | (12,175 | ) | | | (11,655 | ) | | | (8,867 | ) | | | (41,331 | ) | | | (8,849 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Monster Consolidated operating income (loss) GAAP | | $ | 714 | | | $ | 14,379 | | | $ | 18,047 | | | $ | (988 | ) | | $ | 32,152 | | | $ | 845 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Segment operating income(1): Non-GAAP | | | | | | | | | | | | | | | | | | | | | | | | |
Careers—North America | | $ | 17,369 | | | $ | 15,070 | | | $ | 17,053 | | | $ | 14,163 | | | $ | 63,655 | | | $ | 20,414 | |
Careers—International | | | 11,077 | | | | 6,852 | | | | 8,112 | | | | 3,314 | | | | 29,355 | | | | (3,900 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Careers operating income Non-GAAP | | | 28,446 | | | | 21,922 | | | | 25,165 | | | | 17,477 | | | | 93,010 | | | | 16,514 | |
Internet Advertising & Fees operating income Non-GAAP | | | 4,351 | | | | 5,381 | | | | 4,999 | | | | 5,114 | | | | 19,845 | | | | 6,347 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Monster Proforma income(1) | | $ | 32,797 | | | $ | 27,303 | | | $ | 30,164 | | | $ | 22,591 | | | $ | 112,855 | | | $ | 22,861 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Corporate expenses Non-GAAP | | | (13,165 | ) | | | (10,080 | ) | | | (10,390 | ) | | | (7,401 | ) | | | (41,036 | ) | | | (7,474 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Monster Consolidated operating income Non-GAAP | | $ | 19,632 | | | $ | 17,223 | | | $ | 19,774 | | | $ | 15,190 | | | $ | 71,819 | | | $ | 15,387 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| (1) | - See notes to financial supplement for further explanation of Non-GAAP measures. |
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Monster Worldwide, Inc.
Segment Information and Margin Analysis—GAAP and Non-GAAP
(unaudited, in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Trended Data | |
Summary P&L Information | | Q1 2012 | | | Q2 2012 | | | Q3 2012 | | | Q4 2012 | | | FY 2012 | | | Q1 2013 | |
Revenue—GAAP | | $ | 233,750 | | | $ | 224,577 | | | $ | 220,821 | | | $ | 211,244 | | | $ | 890,392 | | | $ | 211,986 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
OIBDA—GAAP (1) | | $ | 31,214 | | | $ | 37,617 | | | $ | 39,806 | | | $ | 23,509 | | | $ | 132,146 | | | $ | 24,518 | |
Depreciation expense | | | 12,782 | | | | 12,867 | | | | 12,991 | | | | 13,286 | | | | 51,926 | | | | 13,000 | |
Amortization of restricted stock | | | 8,201 | | | | 7,254 | | | | 5,683 | | | | 6,985 | | | | 28,123 | | | | 6,794 | |
Non-cash stock option expense | | | 51 | | | | — | | | | — | | | | — | | | | 51 | | | | — | |
Restructuring non-cash write-offs | | | 6,383 | | | | 32 | | | | — | | | | 1,126 | | | | 7,541 | | | | 775 | |
Amortization of intangibles | | | 3,083 | | | | 3,085 | | | | 3,085 | | | | 3,100 | | | | 12,353 | | | | 3,104 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Operating income (loss)—GAAP | | $ | 714 | | | $ | 14,379 | | | $ | 18,047 | | | $ | (988 | ) | | $ | 32,152 | | | $ | 845 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Recovery of restitution award from former executive | | | (5,350 | ) | | | — | | | | — | | | | — | | | | (5,350 | ) | | | — | |
Non-GAAP fees associated with strategic alternatives | | | — | | | | 1,829 | | | | 1,483 | | | | 1,347 | | | | 4,659 | | | | 1,375 | |
Restructuring program non-cash write-offs | | | 6,383 | | | | 32 | | | | — | | | | 1,126 | | | | 7,541 | | | | 775 | |
Restructuring expenses, less non-cash items | | | 17,885 | | | | 983 | | | | 244 | | | | 13,705 | | | | 32,817 | | | | 12,392 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Non-GAAP Adjustments | | | 18,918 | | | | 2,844 | | | | 1,727 | | | | 16,178 | | | | 39,667 | | | | 14,542 | |
Operating income Non-GAAP(1) | | $ | 19,632 | | | $ | 17,223 | | | $ | 19,774 | | | $ | 15,190 | | | $ | 71,819 | | | $ | 15,387 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| (1) | See notes to financial supplement for further explanation of Non-GAAP measures. |
8
Monster Worldwide, Inc.
Statements of Cash Flows
(unaudited, in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Trended Data | |
| | | Q1 2012 | | | Q2 2012 | | | Q3 2012 | | | Q4 2012 | | | FY 2012 | | | Q1 2013 | |
Cash flows provided by (used for) operating activities: | | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss) | | $ | 3,742 | | | $ | 4,802 | | | $ | (194,239 | ) | | $ | (73,025 | ) | | $ | (258,720 | ) | | $ | 4,984 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Adjustments to reconcile net income (loss) to cash provided by (used for) operating activities: | | | | | | | | | | | | | | | | | | | | | | | | |
Depreciation and amortization | | | 17,445 | | | | 17,518 | | | | 17,778 | | | | 17,259 | | | | 70,000 | | | | 16,104 | |
Recovery of restitution award from former executive | | | (5,350 | ) | | | 5,350 | | | | — | | | | — | | | | — | | | | — | |
Provision for doubtful accounts | | | 698 | | | | 656 | | | | 710 | | | | 2,405 | | | | 4,469 | | | | 535 | |
Non-cash compensation | | | 8,324 | | | | 7,429 | | | | 5,829 | | | | 7,382 | | | | 28,964 | | | | 6,794 | |
Deferred income taxes | | | (8,499 | ) | | | 1,499 | | | | 6,706 | | | | (9,520 | ) | | | (9,814 | ) | | | (2,172 | ) |
Non-cash restructuring write-offs and other | | | 6,383 | | | | 34 | | | | — | | | | 1,088 | | | | 7,505 | | | | 775 | |
Loss in equity interests, net | | | 200 | | | | 255 | | | | 271 | | | | 355 | | | | 1,081 | | | | 458 | |
Tax benefit from change in uncertain tax positions | | | — | | | | — | | | | (43,193 | ) | | | — | | | | (43,193 | ) | | | (12,869 | ) |
Impairment of Goodwill and intangibles | | | — | | | | — | | | | 216,221 | | | | 51,634 | | | | 267,855 | | | | — | |
Amount reclassified from accumulated other comprehensive income | | | — | | | | — | | | | — | | | | — | | | | — | | | | (23,109 | ) |
Changes in assets and liabilities, net of acquisitions: | | | | | | | | | | | | | | | | | | | | | | | | |
Accounts receivable | | | (11,608 | ) | | | 16,947 | | | | 8,002 | | | | (15,354 | ) | | | (2,013 | ) | | | 5,907 | |
Prepaid and other | | | (13,582 | ) | | | 8,486 | | | | 16,205 | | | | 2,223 | | | | 13,332 | | | | 14,690 | |
Deferred revenue | | | 23,752 | | | | (27,523 | ) | | | (24,506 | ) | | | 10,821 | | | | (17,456 | ) | | | (5,039 | ) |
Accounts payable, accrued liabilities, and other | | | (258 | ) | | | (28,584 | ) | | | (2,062 | ) | | | 22,221 | | | | (8,683 | ) | | | (15,695 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total adjustments | | | 17,505 | | | | 2,067 | | | | 201,961 | | | | 90,514 | | | | 312,047 | | | | (13,621 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net cash provided by (used for) operating activities | | | 21,247 | | | | 6,869 | | | | 7,722 | | | | 17,489 | | | | 53,327 | | | | (8,637 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Cash flows used for investing activities: | | | | | | | | | | | | | | | | | | | | | | | | |
Capital expenditures | | | (12,700 | ) | | | (20,551 | ) | | | (13,651 | ) | | | (12,670 | ) | | | (59,572 | ) | | | (9,149 | ) |
Cash funded to and dividends received from equity investee and other | | | (779 | ) | | | 728 | | | | (1,298 | ) | | | — | | | | (1,349 | ) | | | 623 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net cash used for investing activities | | | (13,479 | ) | | | (19,823 | ) | | | (14,949 | ) | | | (12,670 | ) | | | (60,921 | ) | | | (8,526 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Cash flows (used for) provided by financing activities: | | | | | | | | | | | | | | | | | | | | | | | | |
Proceeds from borrowings on credit facilities | | | 189,700 | | | | 3,655 | | | | 28,000 | | | | 3,363 | | | | 224,718 | | | | 17,500 | |
Payments on borrowings on credit facilities | | | (225,022 | ) | | | (46,494 | ) | | | (286 | ) | | | (33,907 | ) | | | (305,709 | ) | | | (11,399 | ) |
Proceed from the borrowings on term loan | | | 100,000 | | | | — | | | | — | | | | — | | | | 100,000 | | | | — | |
Payments on borrowings on term loan | | | (40,000 | ) | | | (1,250 | ) | | | (1,250 | ) | | | (1,250 | ) | | | (43,750 | ) | | | (1,250 | ) |
Tax withholdings related to net share settlements of restricted stock awards and units | | | (2,475 | ) | | | (3,564 | ) | | | (1,991 | ) | | | (452 | ) | | | (8,482 | ) | | | (1,793 | ) |
Repurchase of common stock | | | (33,335 | ) | | | (25,577 | ) | | | (6,699 | ) | | | — | | | | (65,611 | ) | | | — | |
Proceeds from the exercise of employee stock options | | | 23 | | | | — | | | | — | | | | — | | | | 23 | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net cash (used for) provided by financing activities | | | (11,109 | ) | | | (73,230 | ) | | | 17,774 | | | | (32,246 | ) | | | (98,811 | ) | | | 3,058 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Effects of exchange rates on cash | | | 5,625 | | | | (8,957 | ) | | | 7,096 | | | | 509 | | | | 4,273 | | | | (3,172 | ) |
Net increase (decrease) in cash and cash equivalents | | | 2,284 | | | | (95,141 | ) | | | 17,643 | | | | (26,918 | ) | | | (102,132 | ) | | | (17,277 | ) |
Cash and cash equivalents, beginning of period | | | 250,317 | | | | 252,601 | | | | 157,460 | | | | 175,103 | | | | 250,317 | | | | 148,185 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents, end of period | | $ | 252,601 | | | $ | 157,460 | | | $ | 175,103 | | | $ | 148,185 | | | $ | 148,185 | | | $ | 130,908 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
9
Monster Worldwide, Inc.
Consolidated Condensed Balance Sheets
(unaudited, in thousands, except selected financial ratios)
| | | | | | | | | | | | | | | | | | | | |
| | | Trended Data | |
| | | March 2012 | | | June 2012 | | | September 2012 | | | December 2012 | | | March 2013 | |
| ASSETS | | | | | | | | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 252,601 | | | $ | 157,460 | | | $ | 175,103 | | | $ | 148,185 | | | $ | 130,908 | |
Accounts receivable, net | | | 358,004 | | | | 333,640 | | | | 315,058 | | | | 335,905 | | | | 333,174 | |
Prepaid and other | | | 95,972 | | | | 85,845 | | | | 72,226 | | | | 73,861 | | | | 75,229 | |
Current assets of discontinued operations | | | — | | | | — | | | | 80,303 | | | | 21,702 | | | | — | |
| | | | | | | | | | | | | | | | | | | | |
Total current assets | | | 706,577 | | | | 576,945 | | | | 642,690 | | | | 579,653 | | | | 539,311 | |
| | | | | | | | | | | | | | | | | | | | |
Property and equipment, net | | | 159,632 | | | | 161,432 | | | | 150,541 | | | | 147,613 | | | | 137,998 | |
Goodwill | | | 1,142,194 | | | | 1,118,942 | | | | 878,688 | | | | 887,271 | | | | 880,715 | |
Intangibles, net | | | 47,603 | | | | 43,729 | | | | 35,105 | | | | 32,583 | | | | 29,385 | |
Investment in unconsolidated affiliates | | | 1,764 | | | | 335 | | | | 1,159 | | | | 562 | | | | 170 | |
Other assets | | | 43,679 | | | | 44,135 | | | | 30,412 | | | | 37,183 | | | | 38,644 | |
| | | | | | | | | | | | | | | | | | | | |
Total assets | | $ | 2,101,449 | | | $ | 1,945,518 | | | $ | 1,738,595 | | | $ | 1,684,865 | | | $ | 1,626,223 | |
| | | | | | | | | | | | | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | | | | | | | | |
Accounts payable, accrued expenses and other | | $ | 218,681 | | | $ | 189,927 | | | $ | 170,700 | | | $ | 181,914 | | | $ | 186,142 | |
Deferred revenue | | | 408,334 | | | | 372,239 | | | | 332,723 | | | | 351,546 | | | | 356,468 | |
Borrowings on credit facility short-term | | | 4,545 | | | | 8,143 | | | | 7,941 | | | | 11,389 | | | | — | |
Current portion of long-term debt | | | 5,000 | | | | 5,625 | | | | 6,250 | | | | 6,875 | | | | 7,500 | |
Current liabilities of discontinued operations | | | — | | | | — | | | | 31,881 | | | | 33,256 | | | | 3,771 | |
| | | | | | | | | | | | | | | | | | | | |
Total current liabilities | | | 636,560 | | | | 575,934 | | | | 549,495 | | | | 584,980 | | | | 553,881 | |
| | | | | | | | | | | | | | | | | | | | |
Long-term income taxes payable | | | 96,666 | | | | 96,692 | | | | 61,612 | | | | 63,465 | | | | 51,255 | |
Long-term debt, less current portion | | | 204,000 | | | | 155,625 | | | | 181,750 | | | | 145,975 | | | | 161,600 | |
Other liabilities | | | 12,542 | | | | 16,042 | | | | 10,897 | | | | 10,406 | | | | 8,352 | |
| | | | | | | | | | | | | | | | | | | | |
Total liabilities | | | 949,768 | | | | 844,293 | | | | 803,754 | | | | 804,826 | | | | 775,088 | |
| | | | | | | | | | | | | | | | | | | | |
Common stock and class B common stock | | | 139 | | | | 139 | | | | 140 | | | | 140 | | | | 141 | |
Additional paid-in capital | | | 1,374,246 | | | | 1,352,205 | | | | 1,349,781 | | | | 1,357,126 | | | | 1,360,236 | |
Accumulated other comprehensive income | | | 79,223 | | | | 46,006 | | | | 76,284 | | | | 87,162 | | | | 50,163 | |
Accumulated deficit | | | (301,927 | ) | | | (297,125 | ) | | | (491,364 | ) | | | (564,389 | ) | | | (559,405 | ) |
| | | | | | | | | | | | | | | | | | | | |
Total stockholders’ equity | | | 1,151,681 | | | | 1,101,225 | | | | 934,841 | | | | 880,039 | | | | 851,135 | |
| | | | | | | | | | | | | | | | | | | | |
Total liabilities and stockholders’ equity | | $ | 2,101,449 | | | $ | 1,945,518 | | | $ | 1,738,595 | | | $ | 1,684,865 | | | $ | 1,626,223 | |
| | | | | | | | | | | | | | | | | | | | |
Selected Financial Ratios(1) | | | | | | | | | | | | | | | | | | | | |
- Annualized return on equity | | | 1.3 | % | | | 1.7 | % | | | -76.3 | % | | | -32.2 | % | | | 2.3 | % |
- Book value per share | | $ | 10.09 | | | $ | 9.85 | | | $ | 8.42 | | | $ | 7.92 | | | $ | 7.60 | |
- Cash and marketable securities per share | | $ | 2.21 | | | $ | 1.41 | | | $ | 1.58 | | | $ | 1.33 | | | $ | 1.17 | |
- Net cash and securities | | $ | 39,056 | | | $ | (11,933 | ) | | $ | (20,838 | ) | | $ | (16,054 | ) | | $ | (38,192 | ) |
| (1) | - See notes to financial supplement for definitions and calculations of selected financial ratios. |
10
