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
$
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
$
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
-
$
329,028
- - - - - -
- - - - - -
Salaries and related
141,688
93
a
141,781
122,347
-
122,347
- - - - - -
Office and general
75,725
(3,527
)
a
72,198
70,417
(9,827
)
a
60,590
- - - - - -
Marketing and promotion
114,633
-
114,633
78,069
-
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
-
7,400
5,304
-
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
c
18,221
22,352
3,459
c
25,811
- - - - - -
Losses in equity interests, net
(1,822
)
-
(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
123,332
123,332
132,464
132,464
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
$
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
$
329,028
- - - - - -
Operating income - GAAP
$
65,878
$
7,961
$
4,304
$
78,143
$
(19,948
)
$
58,195
- - - - - -
Proforma Adjustments
-
-
-
-
9,827
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
%
- - - - - -
