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8-K - FORM 8-K - MONSTER WORLDWIDE, INC.c99885e8vk.htm
EX-99.1 - EXHIBIT 99.1 - MONSTER WORLDWIDE, INC.c99885exv99w1.htm
EX-99.3 - EXHIBIT 99.3 - MONSTER WORLDWIDE, INC.c99885exv99w3.htm
Exhibit 99.2
(MONSTER WORLDWIDE LOGO)
FINANCIAL SUPPLEMENT
March 31, 2010
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.

 

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(MONSTER WORLDWIDE LOGO)
Notes to Financial Supplement
Presentation
Severance Charges
For the three months ended March 31, 2010, the Company incurred $6.4 million of severance costs relating to targeted global headcount reductions. These global headcount reductions were introduced to reduce operating expenses and provide funding for investments to further position the Company for sustainable long-term growth in the global online recruitment and advertising industry.
Agreement to Acquire HotJobs Business From Yahoo! Inc.
On February 3, 2010, the Company entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Yahoo! Inc. (“Yahoo!”), pursuant to which the Company has agreed to acquire from Yahoo! certain assets exclusive to Yahoo! HotJobs (the “HotJobs Assets”) for a purchase price of $225 million in cash payable at the closing of the transaction. The closing is subject to customary conditions to closing, including the receipt of requisite antitrust approvals. Either party may terminate the Asset Purchase Agreement, subject to certain exceptions, (i) in the event of an uncured breach of the Asset Purchase Agreement by the other party, (ii) if the closing has not occurred by August 25, 2010 (the “Termination Date”), provided that the Termination Date may be extended by up to nine additional months in Yahoo!’s sole discretion in connection with any antitrust related regulatory action or proceeding, (iii) if a legal restraint would prevent the consummation of the closing or (iv) if either party is compelled by a government authority to sell, hold separate or otherwise dispose of all or any portion of the HotJobs Assets or limit the operation of the HotJobs business.
In connection with the transaction, the Company and Yahoo! entered into certain other ancillary agreements to be effective as of the closing of the acquisition, including (i) a license agreement, pursuant to which Yahoo! will grant to the Company a license of certain patents and trade secrets for use by the Company, and the Company will agree to grant back to Yahoo! a license of the technology, trade secrets and patents assigned to the Company under the Asset Purchase Agreement, (ii) a transition services agreement to ensure the Company’s ability to operate the HotJobs business for a period of six months following the closing (as such time period may be extended at the Company’s discretion by up to three additional months) and (iii) a commercial traffic agreement, pursuant to which Yahoo! has agreed to place hyperlinks on Yahoo!’s homepages in the United States and Canada and certain other Yahoo! properties designed to direct user traffic to Monster.com and Monster.ca.
On April 7, 2010, the Company received a request for additional information from the U.S. Federal Trade Commission (“FTC”) with respect to the proposed acquisition of the HotJobs Assets. The request for information from the FTC is part of the regulatory process under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Act”). The Company intends to respond expeditiously to this request and continue to work cooperatively with the FTC in connection with their review. Completion of the transaction remains subject to the expiration or termination of the waiting period under the HSR Act and other customary closing conditions. The Company continues to expect the transaction to close during the third quarter of 2010.
In the three months ended March 31, 2010, the Company incurred $4.4 million of acquisition related costs relating to the agreement to acquire the HotJobs Assets. These costs primarily relate to legal fees, professional fees and other costs associated with the acquisition. We expect to continue to incur significant fees in 2010 relating to the acquisition of the HotJobs Assets.

 

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Restructuring Actions
On July 30, 2007, we announced a strategic restructuring plan intended to position the Company for sustainable long-term growth in the rapidly evolving global online recruitment and advertising industry.
The restructuring plan was originally designed to reduce the Company’s workforce by approximately 800 associates. Subsequent to the announcement of this plan, the Company made a strategic decision to in-source customer service and identified 100 associates who will be staying with the Company. Through June 30, 2009, when all the initiatives relating to the 2007 restructuring plan were complete, the Company had notified or terminated approximately 700 associates and approximately 140 associates had voluntarily left the Company. The plan also included fixed asset write-offs, accelerated depreciation for assets to be phased out, costs relating to the consolidation of certain office facilities, contract termination costs, relocation costs and professional fees. The restructuring plan arose out of a review commencing in the second quarter of 2007 by our current executive management team of our cost structure and organizational structure. The restructuring was intended to realign the structure to permit investment in key areas that will improve the customer experience and foster revenue growth and long-term operating margin expansion. Since the inception of the 2007 restructuring program through the completion of the program in the second quarter of 2009, the Company has incurred $49.1 million of restructuring expenses. The Company will not incur any new charges relating to this program.
For the three months ended March 31, 2009, we recorded $11.0 of restructuring costs, primarily related to severance, fixed asset write-offs and office consolidations.
Auction Rate Securities
In the three months ended March 31, 2010, the Company received at par value $2.5 million from an issuer’s redemption of auction rate securities, resulting in a $0.2 million benefit which was recorded in interest and other, net in the consolidated statement of operations for the three months ended March 31, 2010.
Deferred revenue related to acquisitions
During the fourth quarter of 2008, we completed the acquisition of ChinaHR.com Holdings Ltd. (“ChinaHR”). In accordance with existing purchase accounting rules, we are required to write down a portion of ChinaHR’s deferred revenue to its fair value. Consequently, in post acquisition periods, we do not recognize the full amount of this deferred revenue. When measuring the performance of our business, however, we add back the revenue resulting from this fair value adjustment as we believe that the inclusion of this revenue provides useful information to our management, as well as to investors. For the three months ended March 31, 2009, the fair value adjustment to ChinaHR’s deferred revenue was $1.0 million.
Professional Fees
For the three months ended March 31, 2009, we recorded approximately $3.0 million of professional fees relating to our historical stock option granting practices. These costs primarily related to legal fees and are a component of “office and general” in our consolidated statement of operations. In addition, we have incurred costs related to litigation, an informal investigation by the SEC and an investigation by the United States Attorney for the Southern District of New York.
As a consequence of the Company’s entry into the settlement agreement with respect to the ERISA class action and settlement of the Company’s claims against a former member of senior management, we do not expect to continue to incur significant professional fees or legal fees paid on behalf of former employees and former members of senior management related to or in connection with matters relating to our historical stock option grant practices.
Reclassifications
Certain reclassifications of prior year amounts have been made for consistent presentation.

 

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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, operating margin, income from continuing operations and diluted earnings per share all exclude certain pro forma adjustments including: net costs associated with the Company’s historical stock option grant practices, 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; the strategic restructuring actions initiated in the third quarter of 2007; severance and facility charges primarily related to the product and technology global reorganization; the fair value adjustment to deferred revenue in connection with the acquisition of ChinaHR; realized and unrealized gains and losses on marketable securities; transaction costs related to the proposed acquisition of Yahoo! HotJobs; and a net non-cash benefit relating to the reversal of an income tax liability for uncertain tax positions. 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.
Bookings represent the dollar value of contractual orders received in a quarter.
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.

 

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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 Quarterly Data
                                                                         
Summary P&L Information   Q1 2008     Q2 2008     Q3 2008     Q4 2008     Q1 2009     Q2 2009     Q3 2009     Q4 2009     Q1 2010  
 
                                                                       
Monster Careers
  $ 336,810     $ 320,953     $ 297,606     $ 257,931     $ 222,849     $ 190,397     $ 179,941     $ 179,409     $ 182,582  
Internet Advertising & Fees
    29,662       33,341       34,583       32,741       31,554       32,660       34,592       33,740       32,723  
 
                                                     
Revenue
    366,472       354,294       332,189       290,672       254,403       223,057       214,533       213,149       215,305  
 
                                                                       
Salary and related
    135,115       127,346       128,904       123,211       112,037       103,564       102,752       105,475       118,183  
Office and general
    61,710       61,754       57,124       44,091       45,793       42,917       42,422       31,623       45,544  
Marketing and promotion
    111,854       68,976       57,684       52,684       73,691       44,953       45,757       45,260       59,581  
Provision for (reversal of) legal settlements, net
          40,100                               (6,850 )            
Restructuring and other special charges
    6,927       2,732       3,592       3,156       11,008       5,097                    
Depreciation expense
    10,803       12,330       13,336       14,761       13,769       14,479       15,230       15,639       14,521  
Amortization of restricted stock and RSU Plan
    5,206       8,351       7,437       7,046       10,149       9,816       9,924       9,417       10,124  
Non-cash stock option expense
    127       182       165       178       199       104       157       155       143  
Amortization of intangibles
    1,386       1,274       1,374       2,756       2,551       2,466       2,189       2,210       2,083  
 
                                                     
Operating expenses
    333,128       323,045       269,616       247,883       269,197       223,396       211,581       209,779       250,179  
 
                                                                       
Operating income (loss)
    33,344       31,249       62,573       42,789       (14,794 )     (339 )     2,952       3,370       (34,874 )
Interest and other, net
    7,383       3,057       5,283       1,560       1,203       76       (48 )     (7,059 )     (653 )
 
                                                     
Income (loss) from cont. operations, pre-tax
    40,727       34,306       67,856       44,349       (13,591 )     (263 )     2,904       (3,689 )     (35,527 )
 
                                                                       
Provison for (benefit from) Income taxes
    15,143       12,153       22,734       14,880       (4,489 )     (83 )     (30,891 )     (2,420 )     (12,179 )
Losses in equity interests, net
    (1,822 )     (3,592 )     (2,086 )     (339 )     (1,239 )     (1,190 )     (1,044 )     (844 )     (831 )
 
                                                     
Income (loss) from continuing operations
    23,762       18,561       43,036       29,130       (10,341 )     (1,370 )     32,751       (2,113 )     (24,179 )
 
                                                                       
(Loss) income from disc. operations, net of tax (1)
    (1,171 )     12,269       (258 )     (536 )                              
 
                                                     
 
                                                                       
Net income (loss)
  $ 22,591     $ 30,830     $ 42,778     $ 28,594     $ (10,341 )   $ (1,370 )   $ 32,751     $ (2,113 )   $ (24,179 )
 
                                                     
 
                                                                       
Basic earnings (loss) per share:
                                                                       
Income (loss) from continuing operations
  $ 0.19     $ 0.15     $ 0.36     $ 0.25     $ (0.09 )   $ (0.01 )   $ 0.27     $ (0.02 )   $ (0.20 )
 
                                                     
Net income (loss)
  $ 0.18     $ 0.26     $ 0.36     $ 0.24     $ (0.09 )   $ (0.01 )   $ 0.27     $ (0.02 )   $ (0.20 )
 
                                                     
 
                                                                       
Diluted earnings (loss) per share:
                                                                       
Income (loss) from continuing operations
  $ 0.19     $ 0.15     $ 0.36     $ 0.24     $ (0.09 )   $ (0.01 )   $ 0.27     $ (0.02 )   $ (0.20 )
 
                                                     
Net income (loss)
  $ 0.18     $ 0.25     $ 0.35     $ 0.24     $ (0.09 )   $ (0.01 )   $ 0.27     $ (0.02 )   $ (0.20 )
 
                                                     
 
                                                                       
Weighted avg. shares outstanding:
                                                                       
Basic shares
    122,711       120,885       120,057       118,601       118,855       119,274       119,473       119,575       120,032  
Diluted shares
    123,332       121,541       120,722       119,380       118,855       119,274       121,676       119,575       120,032  
 
                                                                       
Global employees (ones)
    5,164       5,396       5,669       6,961       6,295       5,999       5,779       5,687       5,518  
Annualized revenue per average employee
  $ 285.3     $ 268.4     $ 240.2     $ 184.1     $ 153.5     $ 145.1     $ 145.7     $ 148.7     $ 153.7  
 
                                                                       
Bookings
  $ 345,768     $ 306,259     $ 279,989     $ 289,650     $ 186,899     $ 175,468     $ 185,920     $ 258,620     $ 219,054  
     
(1)   - Gain from discontinued operations, net of tax in the second quarter of 2008 includes tax benefits of $29.4 million and long-lived asset write-offs of $13.1 million related to the wind-down of the Tickle business included in our Internet Advertising & Fees business segment.

 

 


 

Monster Worldwide, Inc.
Trailing Twelve Months Statistics — Statements of Operations
(unaudited, in thousands, except per share amounts)
                                                                         
Summary P&L Information   Q1 2008     Q2 2008     Q3 2008     Q4 2008     Q1 2009     Q2 2009     Q3 2009     Q4 2009     Q1 2010  
 
                                                                       
Monster Careers
  $ 1,242,009     $ 1,271,636     $ 1,272,246     $ 1,213,300     $ 1,099,339     $ 968,783     $ 851,118     $ 772,596     $ 732,329  
Internet Advertising & Fees
    126,437       127,119       128,556       130,327       132,219       131,538       131,547       132,546       133,715  
 
                                                     
Revenue
    1,368,446       1,398,755       1,400,802       1,343,627       1,231,558       1,100,321       982,665       905,142       866,044  
 
                                                                       
Salary and related
    514,585       514,092       519,031       514,576       491,498       467,716       441,564       423,828       429,974  
Office and general
    227,895       237,793       237,296       224,679       208,762       189,925       175,223       162,755       162,506  
Marketing and promotion
    333,824       329,232       315,332       291,198       253,035       229,012       217,085       209,661       195,551  
Provision for (reversal of) legal settlements, net
          40,100       40,100       40,100       40,100             (6,850 )     (6,850 )     (6,850 )
Restructuring and other special charges
    23,524       26,256       18,693       16,407       20,488       22,853       19,261       16,105       5,097  
Depreciation expense
    41,150       44,130       47,058       51,230       54,196       56,345       58,239       59,117       59,869  
Amortization of restricted stock and RSU Plan
    28,769       20,051       24,617       28,040       32,983       34,448       36,935       39,306       39,281  
Non-cash stock option expense
    383       518       579       652       724       646       638       615       559  
Amortization of intangibles
    5,693       5,554       5,491       6,790       7,955       9,147       9,962       9,416       8,948  
 
                                                     
Operating expenses
    1,175,823       1,217,726       1,208,197       1,173,672       1,109,741       1,010,092       952,057       913,953       894,935  
 
                                                                       
Operating income (loss)
    192,623       181,029       192,605       169,955       121,817       90,229       30,608       (8,811 )     (28,891 )
Interest and other, net
    27,592       23,746       22,522       17,283       11,103       8,122       2,791       (5,828 )     (7,684 )
 
                                                     
Income (loss) from continuing operations, pre-tax
    220,215       204,775       215,127       187,238       132,920       98,351       33,399       (14,639 )     (36,575 )
 
                                                                       
Provison for (benefit from) Income taxes
    78,514       73,080       75,340       64,910       45,278       33,042       (20,583 )     (37,883 )     (45,573 )
Losses in equity interests, net
    (8,700 )     (9,326 )     (8,338 )     (7,839 )     (7,256 )     (4,854 )     (3,812 )     (4,317 )     (3,909 )
 
                                                     
Income from continuing operations
    133,001       122,369       131,449       114,489       80,386       60,455       50,170       18,927       5,089  
 
                                                                       
Income (loss) from disc. operations, net of tax
    (3,493 )     9,353       9,750       10,304       11,475       (794 )     (536 )            
 
                                                     
 
                                                                       
Net income
  $ 129,508     $ 131,722     $ 141,199     $ 124,793     $ 91,861     $ 59,661     $ 49,634     $ 18,927     $ 5,089  
 
                                                     
 
                                                                       
Basic earnings per share:
                                                                       
Income from continuing operations
  $ 1.05     $ 0.98     $ 1.07     $ 0.95     $ 0.67     $ 0.51     $ 0.42     $ 0.16     $ 0.04  
 
                                                     
Net income
  $ 1.02     $ 1.06     $ 1.15     $ 1.04     $ 0.77     $ 0.50     $ 0.42     $ 0.16     $ 0.04  
 
                                                     
 
                                                                       
Diluted earnings per share:
                                                                       
Income from continuing operations
  $ 1.04     $ 0.97     $ 1.07     $ 0.94     $ 0.67     $ 0.51     $ 0.42     $ 0.16     $ 0.04  
 
                                                     
Net income
  $ 1.01     $ 1.05     $ 1.15     $ 1.03     $ 0.76     $ 0.50     $ 0.41     $ 0.16     $ 0.04  
 
                                                     
 
                                                                       
Weighted avg. shares outstanding:
                                                                       
Basic shares
    127,064       124,650       122,289       120,557       119,600       119,197       119,051       119,294       119,588  
Diluted shares
    128,479       125,584       123,075       121,167       120,125       119,558       119,796       119,845       120,139  

 

 


 

Monster Worldwide, Inc.
Statements of Cash Flows
(unaudited, in thousands, except per share amounts)
Trended Quarterly Data
                                                                         
    Q1 2008     Q2 2008     Q3 2008     Q4 2008     Q1 2009     Q2 2009     Q3 2009     Q4 2009     Q1 2010  
Cash flows provided by (used for) operating activities:
                                                                       
Net income (loss)
  $ 22,591     $ 30,830     $ 42,778     $ 28,594     $ (10,341 )   $ (1,370 )   $ 32,751     $ (2,113 )   $ (24,179 )
 
                                                     
Adjustments to reconcile net income (loss) to cash provided by (used for) operating activities:
                                                                       
Loss (income) from discontinued operations, net of tax
    1,171       (12,269 )     258       536                                
Depreciation and amortization
    12,189       13,604       14,710       17,517       16,320       16,945       17,419       17,849       16,604  
Provision for (reversal of) legal settlements, net
          40,100                               (6,850 )            
Receipts and (payments) for legal settlements, net
                5,700       (35,587 )                              
Provision for doubtful accounts
    3,564       3,207       4,403       5,057       4,072       2,812       1,682       1,588       1,149  
Non-cash compensation
    6,495       8,533       7,602       7,223       10,348       9,920       10,081       9,572       10,267  
Deferred income taxes
    (7,319 )     (12,263 )     12,440       14,572       (2,488 )     (3,933 )     12,160       (4,550 )     (14,713 )
Non-cash restructuring write-offs, accelerated amortization, and other
    1,649       436       924       924       3,690       1,051       3       4,216        
Loss in equity interests
    1,822       3,592       2,086       339       1,239       1,190       1,044       844       831  
Changes in assets and liabilities, net of acquisitions:
                                                                       
Accounts receivable
    37,848       44,812       49,231       (19,371 )     72,347       47,892       7,284       (47,061 )     17,631  
Prepaid and other
    1,025       18,073       2,522       1,548       3,246       13,615       (16,005 )     (3,525 )     1,389  
Deferred revenue
    (2,458 )     (51,465 )     (58,644 )     (5,732 )     (63,383 )     (61,153 )     (28,152 )     41,054       4,668  
Accounts payable, accrued expenses and other liabilities
    (289 )     (13,308 )     8,673       (27,790 )     (21,237 )     (40,657 )     (19,574 )     14,883       22,569  
Net cash (used for) provided by operating activities of discontinued operations
    (560 )     (2,569 )     (962 )     (2,758 )     (77 )     77                    
 
                                                     
Total adjustments
    55,137       40,483       48,943       (43,522 )     24,077       (12,241 )     (20,908 )     34,870       60,395  
 
                                                     
Net cash provided by (used for) operating activities
    77,728       71,313       91,721       (14,928 )     13,736       (13,611 )     11,843       32,757       36,216  
 
                                                     
 
                                                                       
Cash flows provided by (used for) investing activities:
                                                                       
Capital expenditures
    (20,559 )     (29,654 )     (21,011 )     (22,403 )     (14,922 )     (11,457 )     (12,285 )     (10,013 )     (8,536 )
Purchase of marketable securities
    (149,249 )     (7,633 )     (25,265 )     (1,785 )     (992 )     (6,484 )           (1,109 )      
Sale and maturities of marketable securities
    414,453       21,852       66,000       36,981       1,425       1,892             67,660       3,414  
Payments for acquisitions and intangible assets, net of cash acquired
    (61,567 )           (64,628 )     (166,641 )                 (300 )            
Dividends received from unconsolidated investee
          1,011                         763                   220  
Cash funded to equity investee
    (5,000 )                 (1,402 )     (1,428 )     (1,886 )     (1,639 )     (1,346 )     (1,345 )
Net cash used for investing activities of discontinued operations
                                                     
 
                                                     
Net cash provided by (used for) investing activities
    178,078       (14,424 )     (44,904 )     (155,250 )     (15,917 )     (17,172 )     (14,224 )     55,192       (6,247 )
 
                                                     
 
                                                                       
Cash flows (used for) provided by financing activities:
                                                                       
Proceeds from borrowings on credit facilities short-term
                247,000       4,971       199,203                          
Payments on borrowings on credit facilities short-term
                      (197,893 )           (157,173 )     (99,023 )            
Repurchase of common stock
    (79,469 )     (6,858 )     (41,806 )     (32 )     (1,907 )     (528 )     (1,869 )     (267 )     (6,359 )
Net borrowings (payments) under capital lease obligations and other debt
    (80 )     (67 )     (9 )     (15 )     (5 )     (1 )     50,006              
Cash received from the exercise of employee stock options
    418       628       110       305       9             46       12       27  
Excess tax benefits from (provisions for) stock-based compensation
    61       59       861       22       4             8       67        
 
                                                     
Net cash (used for) provided by financing activities
    (79,070 )     (6,238 )     206,156       (192,642 )     197,304       (157,702 )     (50,832 )     (188 )     (6,332 )
 
                                                     
 
                                                                       
Effects of exchange rates on cash
    10,256       (1,933 )     (13,303 )     (20,044 )     (6,327 )     13,681       4,438       209       (7,932 )
 
                                                                       
Net increase (decrease) in cash and cash equivalents
    186,992       48,718       239,670       (382,864 )     188,796       (174,804 )     (48,775 )     87,970       15,705  
Cash and cash equivalents, beginning of period
    129,744       316,736       365,454       605,124       222,260       411,056       236,252       187,477       275,447  
 
                                                     
Cash and cash equivalents, end of period
  $ 316,736     $ 365,454     $ 605,124     $ 222,260     $ 411,056     $ 236,252     $ 187,477     $ 275,447     $ 291,152  
 
                                                     
 
                                                                       
Non — GAAP Free cash flow (1):
                                                                       
Net cash provided by (used for) operating activities
  $ 77,728     $ 71,313     $ 91,721     $ (14,928 )   $ 13,736     $ (13,611 )   $ 11,843     $ 32,757     $ 36,216  
Less: Capital expenditures
    (20,559 )     (29,654 )     (21,011 )     (22,403 )     (14,922 )     (11,457 )     (12,285 )     (10,013 )     (8,536 )
 
                                                     
Free cash flow
  $ 57,169     $ 41,659     $ 70,710     $ (37,331 )   $ (1,186 )   $ (25,068 )   $ (442 )   $ 22,744     $ 27,680  
 
                                                     
     
(1)   - See notes to financial supplement for further explanation of non-GAAP measures.

 

 


 

Monster Worldwide, Inc.
Consolidated Condensed Balance Sheets
(unaudited, in thousands, except selected financial ratios)
Trended Quarterly Data
                                                                         
    Q1 2008     Q2 2008     Q3 2008     Q4 2008     Q1 2009     Q2 2009     Q3 2009     Q4 2009     Q1 2010  
ASSETS                                                                        
 
                                                                       
Current assets:
                                                                       
Cash and cash equivalents
  $ 316,736     $ 365,454     $ 605,124     $ 222,260     $ 411,056     $ 236,252     $ 187,477     $ 275,447     $ 291,152  
Marketable securities, current
    79,236       68,579       33,823       1,425       992       14,533       20,482       9,259       8,150  
Accounts Receivable, net
    458,447       410,427       358,214       376,720       294,449       249,004       243,033       287,698       263,589  
Prepaid and other
    97,929       121,093       111,754       82,416       82,710       73,866       87,058       73,089       70,229  
 
                                                     
Total current assets
    952,348       965,553       1,108,915       682,821       789,207       573,655       538,050       645,493       633,120  
 
                                                     
 
                                                                       
Marketable securities, non-current
    102,716       99,330       93,728       90,347       89,196       81,272       75,953       15,410       13,110  
Property and equipment, net
    138,182       149,048       152,352       161,282       154,559       153,942       150,963       143,727       136,487  
Goodwill
    702,598       690,161       707,164       894,546       886,970       897,561       930,231       925,758       917,187  
Intangibles, net
    34,308       32,696       36,694       52,335       49,533       47,420       45,893       43,863       41,173  
Investment in unconsolidated affiliates
    49,049       44,446       42,360       1,843       1,315       517       525       546       330  
Other assets
    67,218       70,475       61,761       33,416       33,314       35,100       32,617       52,393       50,884  
Non-current assets of discontinued operations
    13,959                                                  
 
                                                     
Total assets
  $ 2,060,378     $ 2,051,709     $ 2,202,974     $ 1,916,590     $ 2,004,094     $ 1,789,467     $ 1,774,232     $ 1,827,190     $ 1,792,291  
 
                                                     
 
                                                                       
LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                        
 
                                                                       
Current liabilities:
                                                                       
Accounts payable, accrued expenses and other
  $ 297,932     $ 321,077     $ 328,546     $ 254,407     $ 225,630     $ 192,266     $ 204,402     $ 196,248     $ 217,671  
Deferred revenue
    521,873       470,408       411,764       414,312       344,905       289,818       265,573       305,898       304,993  
Borrowings on credit facility short-term
                247,000       54,971       254,174       97,000                    
Current portion of long-term debt
    158       142       26       18       27       23       5,017       5,010       5,003  
 
                                                     
Total current liabilities
    819,963       791,627       987,336       723,708       824,736       579,107       474,992       507,156       527,667  
 
                                                     
 
                                                                       
Non-current income taxes payable
    116,376       119,360       115,318       119,951       123,385       125,991       82,963       87,343       89,101  
Long-term debt
                                        45,000       45,000       45,000  
Other liabilities
    16,254       17,449       23,699       25,658       29,838       30,971       36,394       54,527       38,288  
Non-current liabilities of discontinued operations
    4,067                                                  
 
                                                     
Total liabilities
    956,660       928,436       1,126,353       869,317       977,959       736,069       639,349       694,026       700,056  
 
                                                     
 
                                                                       
Common stock and class B common stock
    133       134       134       133       134       134       134       134       135  
Additional paid-in capital
    1,395,991       1,397,281       1,363,655       1,367,373       1,374,049       1,382,649       1,388,609       1,395,969       1,394,915  
Accumulated other comprehensive income
    155,830       143,264       87,460       25,801       8,327       28,360       71,133       64,167       48,470  
Accumulated deficit
    (448,236 )     (417,406 )     (374,628 )     (346,034 )     (356,375 )     (357,745 )     (324,993 )     (327,106 )     (351,285 )
 
                                                     
Total stockholders’ equity
    1,103,718       1,123,273       1,076,621       1,047,273       1,026,135       1,053,398       1,134,883       1,133,164       1,092,235  
 
                                                     
 
                                                                       
Total liabilities and stockholders’ equity
  $ 2,060,378     $ 2,051,709     $ 2,202,974     $ 1,916,590     $ 2,004,094     $ 1,789,467     $ 1,774,232     $ 1,827,190     $ 1,792,291  
 
                                                     
 
                                                                       
Selected Financial Ratios(1)
                                                                       
— Annualized return on equity
    8.1 %     11.1 %     15.6 %     10.8 %     -4.0 %     -0.5 %     12.0 %     -0.7 %     -8.7 %
— Book value per share
  $ 9.13     $ 9.30     $ 9.08     $ 8.83     $ 8.61     $ 8.83     $ 9.49     $ 9.48     $ 9.05  
— Cash and marketable securities per share
  $ 4.13     $ 4.42     $ 6.18     $ 2.65     $ 4.20     $ 2.78     $ 2.37     $ 2.51     $ 2.59  
— Net cash and securities
  $ 498,353     $ 533,095     $ 485,632     $ 259,033     $ 247,038     $ 235,034     $ 233,895     $ 250,106     $ 262,409  
     
(1)   - See notes to financial supplement for definitions and calculations of selected financial ratios.

 

 


 

Monster Worldwide, Inc.
Segment Information and Margin Analysis — Non-GAAP
(unaudited, in thousands)
Trended Quarterly Data
                                                                         
    Q1 2008     Q2 2008     Q3 2008     Q4 2008     Q1 2009     Q2 2009     Q3 2009     Q4 2009     Q1 2010  
 
                                                                       
Segment OIBDA (1):
                                                                       
Careers — North America
  $ 47,602     $ 67,636     $ 52,516     $ 44,138     $ 12,272     $ 22,066     $ 16,902     $ 12,988     $ 5,671  
Careers — International
    16,662       40,361       39,060       23,833       10,749       8,386       8,154       9,024       (3,089 )
 
                                                     
Careers OIBDA (1)
    64,264       107,997       91,576       67,971       23,021       30,452       25,056       22,012       2,582  
 
                                                                       
Internet Advertising & Fees OIBDA (1)
    792       7,508       7,425       6,293       6,364       7,939       8,247       7,573       4,764  
 
                                                     
 
                                                                       
Total Monster OIBDA (1)
  $ 65,056     $ 115,505     $ 99,001     $ 74,264     $ 29,385     $ 38,391     $ 33,303     $ 29,585     $ 7,346  
 
                                                     
 
                                                                       
Corporate expenses before D&A (1)
  $ (12,104 )   $ (61,196 )   $ (13,192 )   $ (5,810 )   $ (13,843 )   $ (10,810 )   $ (2,851 )   $ 1,206     $ (15,349 )
 
                                                     
 
                                                                       
Proforma operating income (loss) (1):
                                                                       
Careers — North America
  $ 42,955     $ 59,335     $ 43,771     $ 34,314     $ 3,100     $ 12,405     $ 9,519     $ 4,226     $ (491 )
Careers — International
    12,945       33,316       32,467       17,711       7,413       1,983       782       297       (11,269 )
 
                                                     
Careers Proforma operating income (loss) (1)
    55,900       92,651       76,238       52,025       10,513       14,388       10,301       4,523       (11,760 )
 
                                                                       
Internet Advertising & Fees ProForma operating income (loss) (1)
    (609 )     4,994       4,977       3,745       4,003       5,096       6,506       4,993       2,145  
 
                                                     
 
                                                                       
Total Monster Proforma income (loss) (1)
  $ 55,291     $ 97,645     $ 81,215     $ 55,770     $ 14,516     $ 19,484     $ 16,807     $ 9,516     $ (9,615 )
 
                                                     
 
                                                                       
Corporate Proforma expenses (1)
  $ (11,586 )   $ (19,308 )   $ (11,175 )   $ (14,294 )   $ (14,288 )   $ (11,756 )   $ (12,913 )   $ (9,567 )   $ (14,528 )
 
                                                     
 
                                                                       
Segment operating income (loss): (1)
                                                                       
Careers — North America
  $ 39,701     $ 58,409     $ 43,120     $ 34,025     $ 828     $ 10,919     $ 6,057     $ 1,866     $ (3,772 )
Careers — International
    9,643       31,916       30,230       12,938       (671 )     (2,019 )     (2,181 )     (1,412 )     (13,412 )
 
                                                     
Careers operating income (loss)
    49,344       90,325       73,350       46,963       157       8,900       3,876       454       (17,184 )
 
                                                                       
Internet Advertising & Fees operating income (loss)
    (1,431 )     4,656       4,726       3,715       3,557       4,926       5,091       4,540       1,236  
 
                                                     
 
                                                                       
Total Monster operating income (loss)
  $ 47,913     $ 94,981     $ 78,076     $ 50,678     $ 3,714     $ 13,826     $ 8,967     $ 4,994     $ (15,948 )
 
                                                     
 
                                                                       
Corporate expenses
  $ (14,569 )   $ (63,732 )   $ (15,503 )   $ (7,889 )   $ (18,508 )   $ (14,165 )   $ (6,015 )   $ (1,624 )   $ (18,926 )
 
                                                     
 
                                                                       
Margin Analysis:
                                                                       
 
                                                                       
Careers — North America OIBDA margin
    25.9 %     41.2 %     33.8 %     32.7 %     10.3 %     21.7 %     17.8 %     14.3 %     5.8 %
Careers — North America Proforma operating margin
    23.4 %     36.1 %     28.2 %     25.4 %     2.6 %     12.2 %     10.0 %     4.6 %     -0.5 %
Careers — North America operating margin
    21.6 %     35.6 %     27.8 %     25.2 %     0.7 %     10.7 %     6.4 %     2.1 %     -3.9 %
 
                                                                       
Careers — International OIBDA margin
    10.9 %     25.8 %     27.4 %     19.4 %     10.4 %     9.5 %     9.6 %     10.2 %     -3.6 %
Careers — International Proforma operating margin
    8.4 %     21.3 %     22.8 %     14.2 %     7.1 %     2.2 %     0.9 %     0.3 %     -13.2 %
Careers — International operating margin
    6.3 %     20.4 %     21.2 %     10.5 %     -0.6 %     -2.3 %     -2.6 %     -1.6 %     -15.7 %
 
                                                                       
Careers OIBDA margin
    19.1 %     33.6 %     30.8 %     26.4 %     10.3 %     16.0 %     13.9 %     12.3 %     1.4 %
Careers Proforma operating margin
    16.6 %     28.9 %     25.6 %     20.0 %     4.7 %     7.5 %     5.7 %     2.5 %     -6.4 %
Careers operating margin
    14.7 %     28.1 %     24.6 %     18.2 %     0.1 %     4.7 %     2.2 %     0.3 %     -9.4 %
 
                                                                       
Internet Advertising & Fees OIBDA margin
    2.7 %     22.5 %     21.5 %     19.2 %     20.2 %     24.3 %     23.8 %     22.4 %     14.6 %
Internet Advertising & Fees Proforma operating margin
    -2.1 %     15.0 %     14.4 %     11.4 %     12.7 %     15.6 %     18.8 %     14.8 %     6.6 %
Internet Advertising & Fees operating margin
    -4.8 %     14.0 %     13.7 %     11.3 %     11.3 %     15.1 %     14.7 %     13.5 %     3.8 %
     
(1)   - See notes to financial supplement for further explanation of non-GAAP measures.

 

 


 

Monster Worldwide, Inc.
Statements of Operations
(unaudited)
Trended Quarterly Data
                                                                         
Summary P&L Information   Q1 2008     Q2 2008     Q3 2008     Q4 2008     Q1 2009     Q2 2009     Q3 2009     Q4 2009     Q1 2010  
 
                                                                       
Monster Careers
    91.9 %     90.6 %     89.6 %     88.7 %     87.6 %     85.4 %     83.9 %     84.2 %     84.8 %
Internet Advertising & Fees
    8.1 %     9.4 %     10.4 %     11.3 %     12.4 %     14.6 %     16.1 %     15.8 %     15.2 %
 
                                                     
Revenue
    100.0 %     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %
 
                                                                       
Salary and related
    36.9 %     35.9 %     38.8 %     42.4 %     44.0 %     46.4 %     47.9 %     49.5 %     54.9 %
Office and general
    16.8 %     17.4 %     17.2 %     15.2 %     18.0 %     19.2 %     19.8 %     14.8 %     21.2 %
Marketing and promotion
    30.5 %     19.5 %     17.4 %     18.1 %     29.0 %     20.2 %     21.3 %     21.2 %     27.7 %
Provision for (reversal of) legal settlements, net
    0.0 %     11.3 %     0.0 %     0.0 %     0.0 %     0.0 %     -3.2 %     0.0 %     0.0 %
Restructuring and other special charges
    1.9 %     0.8 %     1.1 %     1.1 %     4.3 %     2.3 %     0.0 %     0.0 %     0.0 %
Depreciation expense
    2.9 %     3.5 %     4.0 %     5.1 %     5.4 %     6.5 %     7.1 %     7.3 %     6.7 %
Amortization of restricted stock and RSU Plan
    1.4 %     2.4 %     2.2 %     2.4 %     4.0 %     4.4 %     4.6 %     4.4 %     4.7 %
Non-cash stock option expense
    0.0 %     0.1 %     0.0 %     0.1 %     0.1 %     0.0 %     0.1 %     0.1 %     0.1 %
Amortization of intangibles
    0.4 %     0.4 %     0.4 %     0.9 %     1.0 %     1.1 %     1.0 %     1.0 %     1.0 %
 
                                                     
Operating expenses
    90.9 %     91.2 %     81.2 %     85.3 %     105.8 %     100.2 %     98.6 %     98.4 %     116.2 %
 
                                                                       
Operating income (loss)
    9.1 %     8.8 %     18.8 %     14.7 %     -5.8 %     -0.2 %     1.4 %     1.6 %     -16.2 %
Interest and other, net
    2.0 %     0.9 %     1.6 %     0.5 %     0.5 %     0.0 %     0.0 %     -3.3 %     -0.3 %
 
                                                     
Income (loss) from continuing operations, pre-tax
    11.1 %     9.7 %     20.4 %     15.3 %     -5.3 %     -0.1 %     1.4 %     -1.7 %     -16.5 %
 
                                                                       
Income taxes (benefit from)
    4.1 %     3.4 %     6.8 %     5.1 %     -1.8 %     0.0 %     -14.4 %     -1.1 %     -5.7 %
Losses in equity interests, net
    -0.5 %     -1.0 %     -0.6 %     -0.1 %     -0.5 %     -0.5 %     -0.5 %     -0.4 %     -0.4 %
 
                                                     
Income from continuing operations
    6.5 %     5.2 %     13.0 %     10.0 %     -4.1 %     -0.6 %     15.3 %     -1.0 %     -11.2 %
 
                                                                       
(Loss) income from disc. operations, net of tax
    -0.3 %     3.5 %     -0.1 %     -0.2 %     0.0 %     0.0 %     0.0 %     0.0 %     0.0 %
 
                                                     
 
                                                                       
Net income (loss)
    6.2 %     8.7 %     12.9 %     9.8 %     -4.1 %     -0.6 %     15.3 %     -1.0 %     -11.2 %
 
                                                     

 

 


 

Monster Worldwide, Inc.
Statements of Operations — Reconciliation of Non-GAAP Measures
(unaudited, in thousands, except per share amounts)
Trended Quarterly Data
                                                                         
Summary P&L Information   Q1 2008     Q2 2008     Q3 2008     Q4 2008     Q1 2009     Q2 2009     Q3 2009     Q4 2009     Q1 2010  
 
                                                                       
Proforma revenue (1)
  $ 366,472     $ 354,294     $ 332,189     $ 292,885     $ 255,397     $ 223,782     $ 215,085     $ 213,149     $ 215,305  
 
                                                                       
Deferred revenue related to acquisitions
                      2,213       994       725       552              
 
                                                     
 
                                                                       
Revenue
  $ 366,472     $ 354,294     $ 332,189     $ 290,672     $ 254,403     $ 223,057     $ 214,533     $ 213,149     $ 215,305  
 
                                                     
 
                                                                       
OIBDA (1)
  $ 52,952     $ 54,309     $ 85,809     $ 68,454     $ 15,542     $ 27,581     $ 30,452     $ 30,791     $ (8,003 )
 
                                                                       
Depreciation expense
    10,803       12,330       13,336       14,761       13,769       14,479       15,230       15,639       14,521  
Amortization of restricted stock and RSU Plan
    5,206       8,351       7,437       7,046       10,149       9,816       9,924       9,417       10,124  
Non-cash stock option expense
    127       182       165       178       199       104       157       155       143  
Restructuring non-cash compensation expense
    1,162                                                  
Restructuring non-cash write-offs
    924       923       924       924       3,668       1,055                    
Amortization of intangibles
    1,386       1,274       1,374       2,756       2,551       2,466       2,189       2,210       2,083  
 
                                                     
 
                                                                       
Operating income (loss)
  $ 33,344     $ 31,249     $ 62,573     $ 42,789     $ (14,794 )   $ (339 )   $ 2,952     $ 3,370     $ (34,874 )
 
                                                     
 
                                                                       
Proforma operating income (loss) (1)
  $ 43,705     $ 78,337     $ 70,040     $ 41,476     $ 228     $ 7,728     $ 3,894     $ (51 )   $ (24,143 )
 
                                                                       
Provision for (reversal of) legal settlements, net
          40,100                               (6,850 )            
Stock option investigation
    2,983       4,256       3,875       (6,682 )     3,020       2,245       (474 )     (8,037 )      
Security breach
    451                                                  
Non-Gaap severance
                                        5,907       2,866       6,360  
Non-Gaap facilities
                                        1,807       1,750        
Non-Gaap acquisition related fees
                                                    4,371  
Deferred revenue related to acquisitions
                      2,213       994       725       552              
Restructuring non-cash compensation expense
    1,162                                                  
Restructuring program non-cash write-offs
    924       923       924       924       3,668       1,055                    
Restructuring expenses, less non-cash items
    4,841       1,809       2,668       2,232       7,340       4,042                    
 
                                                     
 
                                                                       
Operating income (loss)
  $ 33,344     $ 31,249     $ 62,573     $ 42,789     $ (14,794 )   $ (339 )   $ 2,952     $ 3,370     $ (34,874 )
 
                                                     
     
(1)   - See notes to financial supplement for further explanation of non-GAAP measures.