Monster Worldwide Reports First Quarter 2008 Results

05/05/2008 - 16:50

Monster Worldwide, Inc. (NASDAQ:MNST) today reported financial results

for the first quarter ended March 31, 2008.
Total revenue grew 13% to $370 million in the first quarter of 2008 from

$329 million in the comparable quarter of 2007. Excluding the impact of

foreign exchange rates, consolidated revenue grew 8%.
Monster Careers revenue increased 16% to $337 million, compared with

$290 million in last year´s first quarter, led

by International revenue growth of 44% to $153 million. North American

Careers revenue was $184 million in the first quarter of 2008, flat with

the prior year. Internet Advertising & Fees revenue was $34 million

compared with $39 million in last year´s first

quarter.
Monster Worldwide´s deferred revenue balance

at March 31, 2008 grew 16% to $522 million over last year´s

first quarter balance of $450 million.
Income from continuing operations was $23 million, or $0.18 per diluted

share, in the first quarter of 2008, compared to $40 million, or $0.30

per diluted share in the comparable 2007 period. Consolidated operating

income was aided by a $3 million benefit from foreign exchange rates as

compared to approximately $0.5 million from the first quarter of 2007.

Included in income from continuing operations for the three months ended

March 31, 2008 is $0.05 per diluted share from costs associated with the

restructuring plan and the ongoing stock option investigation. These

proforma 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

first quarter of 2008 was $29 million, or $0.24 per diluted share

compared to $46 million, or $0.35 per diluted share, in the prior year.
Sal Iannuzzi, Chairman, President and Chief Executive Officer of Monster

Worldwide, said, "We are taking decisive

action to redirect and integrate our sales resources to take advantage

of the tremendous untapped opportunities to add customers in the large

medium and small company segments. This new "go

to market" approach will enable us to better

align our sales teams against the opportunity that offers the highest

return on our investment. This sales force redirection will allow for

more productive and deeper customer relationships while broadening our

sales coverage and market penetration. We believe this action will help

fuel us through the current economic downturn and position us well for

an economic rebound. We are convinced that the current market

environment presents a building opportunity that will yield solid

benefits to our shareholders."
Operating expenses for the first quarter of 2008 include approximately

$31 million of incremental marketing costs, reflecting the Company´s

strategic decision to reposition the Monster brand in the global

marketplace through an aggressive, integrated marketing program. These

expenses have been partially offset by savings and efficiencies realized

from the Company´s ongoing restructuring

program.
Mr. Iannuzzi added, "During the first

quarter, we made solid and steady progress in redefining many critical

areas of our global business as the new leadership team continues the

transformation which began last year. Monster is certainly not alone in

facing the challenges of the slowdown in the US employment market due to

weaker economic conditions. However, we firmly believe that the

initiatives we have taken to integrate and align our sales resources

re-energize our brand, launch new products and restructure our

operations, together with our geographic diversification, helped our

financial performance during this period of weakness in the market."
At March 31, 2008, the Company had $499 million of cash, cash

equivalents and securities held for sale compared with $578 million at

December 31, 2007. Cash generated from operating activities was $78

million in the first quarter of 2008, essentially flat with the prior

year period. Capital expenditures totaled $21 million in the first

quarter of 2008. During the quarter, the Company repurchased 3.0 million

shares of its common stock for an aggregate cost of $79 million. The

Company currently has $174 million remaining under the current stock

repurchase program. Since the third quarter of 2007, the Company has

repurchased 10.3 million shares for an aggregate cost of approximately

$330 million.
At March 31, 2008, the Company held auction rate securities with a fair

value of approximately $103 million, the vast majority of which are

guaranteed by the U.S. Department of Education and all of which have

received the highest investment grade rating from rating agencies. The

Company has recorded a temporary impairment on these securities of $1.7

million as a component of other comprehensive income. As of March 31

2008, the Company has reclassified these auction rate securities as a

long-term asset on its balance sheet.
Mr. Iannuzzi concluded, "Our new course of

action has proved timely given the current economic conditions. We are

committed to investing prudently to grow the business now and in the

future. Our strong, liquid balance sheet provides financial flexibility

and support to successfully execute our growth strategies. Given our

rebuilding efforts, the need to invest, and the economic slowdown, we

are encouraged by our performance. Despite the unfavorable market

conditions we have faced, we are optimistic that our early progress in

creating a solid platform for future growth will benefit our customers

shareholders and global associates over the long term."
Supplemental Financial Information
The Company has made available certain supplemental financial

information, in a separate document that can be accessed directly at http://corporate.monster.com/Q108.pdf or through the Company´s Investor Relations

website at http://ir.monster.com.
Conference Call Information
First quarter 2008 results will be discussed on Monster Worldwide´s

quarterly conference call taking place on May 1, 2008 at 5:00 PM EDT. To

join the conference call, please dial (888) 551-5973 at 4:50 PM EDT and

reference conference ID# 42793606. 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 EDT. Individuals can also access

Monster Worldwide´s quarterly conference call

online through the Investor Relations section of the Company´s

website at http://corporate.monster.com.

For a replay of the call, please dial (800) 642-1687 or outside

the United States dial (706) 645-9291 and reference ID #42793606. This

number is valid until midnight on May 8, 2008.
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 inspire people to improve 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.
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 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, 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.
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.
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.

= = = = = = = = = = =

- - - - - -

MONSTER WORLDWIDE, INC.
- - - - - -

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
- - - - - -

(in thousands, except per share amounts)
- - - - - -

- - - - - -

Three Months Ended March 31

- - - - - -

2008

2007

- - - - - -

Revenue

$
370,366

$
329,028

- - - - - -

Salaries and related

141,688

122,347

- - - - - -

Office and general

75,725

70,417

- - - - - -

Marketing and promotion

114,633

78,069

- - - - - -

Restructuring and other special charges

6,927

- - - - - -

Total operating expenses

338,973

270,833

- - - - - -

Operating income

31,393

58,195

- - - - - -

Interest and other, net

7,400

5,304

- - - - - -

Income from continuing operations before income taxes and equity

interests

38,793

63,499

- - - - - -

Income taxes

14,380

22,352

- - - - - -

Losses in equity interests, net

(1,822
)

(1,420
)
- - - - - -

- - - - - -

Income from continuing operations

22,591

39,727

- - - - - -

Loss from discontinued operations, net of tax

(245
)
- - - - - -

- - - - - -

Net income

$
22,591

$
39,482

- - - - - -

Basic earnings per share:

- - - - - -

Income from continuing operations

$
0.18

$
0.31

- - - - - -

Loss from discontinued operations, net of tax

- - - - - -

Basic earnings per share*

$
0.18

$
0.30

- - - - - -

Diluted earnings per share:

- - - - - -

Income from continuing operations

$
0.18

$
0.30

- - - - - -

Loss from discontinued operations, net of tax

- - - - - -

Diluted earnings per share

$
0.18

$
0.30

- - - - - -

*Basic earnings per share may not add in certain periods due to

rounding.

- - - - - -

Weighted average shares outstanding:

- - - - - -

Basic

122,711

129,653

- - - - - -

Diluted

123,332

132,464

- - - - - -

Operating income before depreciation and amortization:

- - - - - -

Operating income

$
31,393

$
58,195

- - - - - -

Depreciation and amortization of intangibles

12,961

9,981

- - - - - -

Amortization of stock based compensation

5,333

4,362

- - - - - -

Restructuring non-cash expenses

2,086

- - - - - -

Operating income before depreciation and amortization

$
51,773

$
72,538

- - - - - -

= = = = = = = = = = =

- - - - - -

MONSTER WORLDWIDE, INC.
- - - - - -

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
- - - - - -

(in thousands)
- - - - - -

- - - - - -

Three Months Ended March 31

- - - - - -

2008

2007

- - - - - -

Cash flows provided by operating activities:

- - - - - -

Net income

$
22,591

$
39,482

- - - - - -

Adjustments to reconcile net income to net cash provided by

operating activities:

- - - - - -

Loss from discontinued operations, net of tax

245

- - - - - -

Depreciation and amortization of intangibles

12,961

9,981

- - - - - -

Provision for doubtful accounts

3,564

2,483

- - - - - -

Non-cash compensation

6,495

4,362

- - - - - -

Deferred income taxes

(7,319
)

2,100

- - - - - -

Loss on disposal of assets

725

- - - - - -

Loss in equity interests and other

1,822

1,420

- - - - - -

Changes in assets and liabilities, net of business combinations:

- - - - - -

Accounts receivable

37,848

25,170

- - - - - -

Prepaid and other

1,949

(2
)
- - - - - -

Deferred revenue

(2,458
)

5,691

- - - - - -

Accounts payable, accrued liabilities and other

340

(8,950
)
- - - - - -

Net cash used for operating activities of discontinued operations

(161
)

(2,983
)
- - - - - -

Total adjustments

55,766

39,517

- - - - - -

Net cash provided by operating activities

78,357

78,999

- - - - - -

Cash flows provided by (used for) investing activities:

- - - - - -

Capital expenditures

(20,559
)

(21,612
)
- - - - - -

Purchase of marketable securities

(149,249
)

(365,031
)
- - - - - -

Sales and maturities of marketable securities

414,453

311,662

- - - - - -

Payments for acquisitions and intangible assets, net of cash acquired

(61,567
)

(1,664
)
- - - - - -

Cash funded to equity investee

(5,000
)

(2,500
)
- - - - - -

Net cash provided by (used for) investing activities

178,078

(79,145
)
- - - - - -

- - - - - -

Cash flows (used for) provided by financing activities:

- - - - - -

Payments on debt obligations

(80
)

- - - - - -

Payments on acquisition debt

(16,310
)
- - - - - -

Proceeds from exercise of employee stock options

418

43,395

- - - - - -

Excess tax benefits from (provisions for) equity compensation plans

(568
)

6,486

- - - - - -

Repurchase of common stock

(79,469
)

(3,326
)
- - - - - -

Net cash (used for) provided by financing activities

(79,699
)

30,245

- - - - - -

Effects of exchange rates on cash

10,256

963

- - - - - -

Net increase in cash and cash equivalents

186,992

31,062

- - - - - -

Cash and cash equivalents, beginning of period

129,744

58,680

- - - - - -

Cash and cash equivalents, end of period

$
316,736

$
89,742

- - - - - -

Free cash flow:

- - - - - -

Net cash provided by operating activities

$
78,357

$
78,999

- - - - - -

Less: Capital expenditures

(20,559
)

(21,612
)
- - - - - -

Free cash flow

$
57,798

$
57,387

- - - - - -

= = = = = = = = = = =

- - - - - -

MONSTER WORLDWIDE, INC.
- - - - - -

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
- - - - - -

(in thousands)
- - - - - -

- - - - - -

Assets:

March 31, 2008

December 31, 2007
- - - - - -

- - - - - -

Cash and cash equivalents

$
316,736

$
129,744
- - - - - -

Available-for-sale securities, current

79,236

448,703
- - - - - -

Accounts receivable, net

458,447

499,854
- - - - - -

Available-for-sale securities, non - current

102,716

-
- - - - - -

Property and equipment, net

141,279

126,962
- - - - - -

Goodwill and intangibles, net

747,768

661,850
- - - - - -

Other assets

214,196

210,697
- - - - - -

Total assets

$
2,060,378

$
2,077,810
- - - - - -

- - - - - -

Liabilities and Stockholders´ equity:

- - - - - -

Accounts payable, accrued expenses and other

$
297,932

$
304,145
- - - - - -

Deferred revenue

521,873

524,331
- - - - - -

Long-term income taxes payable

116,376

111,108
- - - - - -

Other liabilities

20,144

21,310
- - - - - -

Debt

335

415
- - - - - -

Total liabilities

956,660

961,309
- - - - - -

- - - - - -

Stockholders´ equity

1,103,718

1,116,501
- - - - - -

- - - - - -

Total liabilities and stockholders´ equity

$
2,060,378

$
2,077,810
- - - - - -

= = = = = = = = = = =

- - - - - -

MONSTER WORLDWIDE, INC.
- - - - - -

UNAUDITED OPERATING SEGMENT INFORMATION
- - - - - -

(in thousands)
- - - - - -

- - - - - -

MONSTER

- - - - - -

Three Months Ended March 31, 2008

Careers - North America

Careers - International

Internet Advertising & Fees

Subtotal

Corporate Expenses

Total
- - - - - -

- - - - - -

Revenue

$
183,538

$
153,272

$
33,556

$
370,366

- - - - - -

Operating income (loss)

39,435

9,406

(2,879
)

45,962

$
(14,569
)

31,393

- - - - - -

OIBDA

47,335

16,426

116

63,877

(12,104
)

51,773

- - - - - -

Operating margin

21.5
%

6.1
%

-8.6
%

12.4
%

8.5
%
- - - - - -

OIBDA margin

25.8
%

10.7
%

0.3
%

17.2
%

14.0
%
- - - - - -

- - - - - -

MONSTER

- - - - - -

Three Months Ended March 31, 2007

Careers - North America

Careers - International

Internet Advertising & Fees

Subtotal

Corporate Expenses

Total
- - - - - -

- - - - - -

Revenue

$
184,017

$
106,206

$
38,805

$
329,028

- - - - - -

Operating income

65,878

7,961

4,304

78,143

$
(19,948
)

58,195

- - - - - -

OIBDA

71,150

12,594

6,439

90,183

(17,645
)

72,538

- - - - - -

Operating margin

35.8
%

7.5
%

11.1
%

23.7
%

17.7
%
- - - - - -

OIBDA margin

38.7
%

11.9
%

16.6
%

27.4
%

22.0
%
- - - - - -

= = = = = = = = = = =

- - - - - -

MONSTER WORLDWIDE, INC.
- - - - - -

UNAUDITED NON-GAAP STATEMENTS OF OPERATIONS AND RECONCILIATIONS
- - - - - -

(in thousands, except per share amounts)
- - - - - -

- - - - - -

For the Three Months Ended March

31, 2008

For the Three Months Ended March

31, 2007

- - - - - -

As Reported

Proforma Adjustments

Non-GAAP

As Reported

Proforma Adjustments

Non-GAAP
- - - - - -

- - - - - -

Revenue
$
370,366

$
370,366

$
329,028

- - - - - -

Salaries and related

141,688

141,781

122,347

- - - - - -

Office and general

75,725

(3,527
)
a

72,198

70,417

(9,827
)
a

60,590

- - - - - -

Marketing and promotion

114,633

78,069

- - - - - -

Restructuring and other special charges

6,927

(6,927
)
b

- - - - - -

Total operating expenses

338,973

(10,361
)

328,612

270,833

(9,827
)

261,006

- - - - - -

Operating income

31,393

10,361

41,754

58,195

9,827

68,022

- - - - - -

Operating margin

8.5
%

11.3
%

17.7
%

20.7
%
- - - - - -

- - - - - -

Interest and other, net

7,400

5,304

- - - - - -

Income from continuing operations before income taxes and equity

interests

38,793

10,361

49,154

63,499

9,827

73,326

- - - - - -

Income taxes

14,380

3,841

18,221

22,352

3,459

25,811

- - - - - -

Losses in equity interests, net

(1,822
)

(1,420
)

(1,420
)
- - - - - -

Income from continuing operations
$
22,591

$
6,520

$
29,111

$
39,727

$
6,368

$
46,095

- - - - - -

Diluted Earnings per share from continuing operations *
$
0.18

$
0.05

$
0.24

$
0.30

$
0.05

$
0.35

- - - - - -

Weighted average shares outstanding:

- - - - - -

Diluted

123,332

132,464

- - - - - -

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, 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.

- - - - - -

= = = = = = = = = = =

- - - - - -

MONSTER WORLDWIDE, INC.
- - - - - -

UNAUDITED NON-GAAP OPERATING SEGMENT INFORMATION
- - - - - -

(in thousands)
- - - - - -

- - - - - -

MONSTER

- - - - - -

Three Months Ended March 31, 2008

Careers - North America

Careers - International

Internet Advertising & Fees

Subtotal

Corporate Expenses

Total
- - - - - -

- - - - - -

Revenue

$
183,538

$
153,272

$
33,556

$
370,366

- - - - - -

Operating income (loss) - GAAP

$
39,435

$
9,406

$
(2,879
)

$
45,962

$
(14,569
)

$
31,393

- - - - - -

Proforma Adjustments

3,254

3,302

822

7,378

2,983

10,361

- - - - - -

Operating income (loss) - Non GAAP

$
42,689

$
12,708

$
(2,057
)

$
53,340

$
(11,586
)

$
41,754

- - - - - -

Operating margin - GAAP

21.5
%

6.1
%

-8.6
%

12.4
%

8.5
%
- - - - - -

Operating margin - Non GAAP

23.3
%

8.3
%

-6.1
%

14.4
%

11.3
%
- - - - - -

- - - - - -

MONSTER

- - - - - -

Three Months Ended March 31, 2007

Careers - North America

Careers - International

Internet Advertising & Fees

Subtotal

Corporate Expenses

Total
- - - - - -

- - - - - -

Revenue

$
184,017

$
106,206

$
38,805

$
329,028

- - - - - -

Operating income - GAAP

$
65,878

$
7,961

$
4,304

$
78,143

$
(19,948
)

$
58,195

- - - - - -

Proforma Adjustments

9,827

- - - - - -

Operating income - Non GAAP

$
65,878

$
7,961

$
4,304

$
78,143

$
(10,121
)

$
68,022

- - - - - -

Operating margin - GAAP

35.8
%

7.5
%

11.1
%

23.7
%

17.7
%
- - - - - -

Operating margin - Non GAAP

35.8
%

7.5
%

11.1
%

23.7
%

20.7
%
- - - - - -