EX-99.2 3 c91547exv99w2.htm EXHIBIT 99.2 Exhibit 99.2
Exhibit 99.2
(MONSTER WORLDWIDE LOGO)
FINANCIAL SUPPLEMENT
September 30, 2009
Monster Worldwide, Inc. (together with its consolidated subsidiaries, the “Company,” “Monster,” “we,” “our” or “us”) provides this supplement to assist investors in evaluating our 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 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.

 

 

 

(MONSTER WORLDWIDE LOGO)
Notes to Financial Supplement
Presentation
Provision for (Reversal of) Legal Settlements, net
In the second quarter of 2008, the Company recorded a $40.1 million provision for legal settlements, net, relating to estimated settlements, costs and expenses arising out of the legal actions regarding the Company’s historical stock option granting practices.
The provision for legal settlements, net in the second quarter of 2008 included approximately $25.1 million for the settlement of the securities class action regarding the Company’s historical stock option granting practices. In July 2008, the Company agreed to settle the securities class action, subject to court approval. Court approval was received in October 2008. Under the terms of the settlement, the defendants paid $47.5 million to the class, of which the Company’s cost was approximately $25.1 million, net of its insurance recovery and contribution from another defendant. Also recorded in the provision for legal settlements, net, in the second quarter of 2008 was approximately $15.0 million for estimated expenses relating to the other outstanding litigation in connection with the Company’s historical stock option grant practices.
In May 2009, the Company agreed, without admitting or denying wrongdoing, to pay a $2.5 million penalty to the United States Securities and Exchange Commission (the “SEC”) to settle claims arising out of the SEC’s inquiry into the Company’s stock option granting practices. In September 2009, the Company entered into a Memorandum of Understanding (the “Memorandum of Understanding”) that memorialized the terms pursuant to which the parties intend, subject to Court approval and certification of the proposed class, to settle the ERISA Class Action. The Memorandum of Understanding provides for a payment of $4.3 million in full settlement of the claims asserted in the ERISA Class Action, a substantial majority of which will be paid by insurance and contribution from another defendant. The parties to the ERISA Class Action expect to enter into a formal settlement agreement in the near future and to thereafter seek Court approval.
Upon the conclusion of the settlement of the ERISA Class Action, all of the actions seeking recoveries from the Company as an outgrowth of the Company’s historical stock option grant practices will have been settled. As a result, in the quarterly period ended September 30, 2009, the Company has reversed a previously recorded accrual of $6.9 million relating to these matters.
Professional Fees
For the three months ended September 30, 2009 and 2008, we recorded a net benefit of $0.5 million and a charge of $3.9 million, respectively, of professional fees relating to our historical stock option grant practices. For the nine months ended September 30, 2009 and 2008, we recorded charges of $4.8 million and $11.1 million, respectively, of professional fees relating to our historical stock option grant practices. These costs primarily relate 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 Memorandum of Understanding 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.

 

2

 

Restructuring Actions
On July 30, 2007, we announced a series of strategic restructuring actions that are intended to position us for sustainable long-term growth in the rapidly evolving global online recruitment advertising industry.
The restructuring plan included an anticipated reduction in the current workforce by approximately 800 associates, or 15% of our full-time staff. Subsequent to the announcement of this plan, the Company made a strategic decision to in-source customer service and therefore the current reduction is approximately 700 associates. 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. All of the initiatives relating to the 2007 restructuring program were completed in the second quarter of 2009 and no new charges will be incurred in the future relating to this program. Since the inception of the 2007 restructuring plan through September 30, 2009, we have incurred $49.1 of restructuring expenses.
For the three months ended September 30, 2009 and 2008, we recorded $0 and $3.6 million of restructuring costs, respectively, primarily related to severance costs in 2008. For the nine months ended September 30, 2009 and 2008, we recorded $16.1 million and $13.3 million of restructuring costs, respectively, primarily related to severance, fixed asset write-offs and office consolidations.
Severance and Facility Charges
In the third quarter of 2009, the Company incurred charges of $5.9 million for severance and $1.8 million for costs relating to exited facilities. These charges primarily relate to certain organizational changes within the Company’s product and technology group designed to enable the Company to shift or add talent and skills to support the Company’s innovation strategy. The organizational changes include plans for a new Technology Center of Excellence and Innovation to be located in Cambridge, Massachusetts. As a result of these and other targeted organizational changes, the Company incurred severance costs related to the elimination of certain positions and charges related to the exiting of certain facilities on a global basis.
Income Tax Reversal
Due to the expiration of statutes of limitations, in the third quarter of 2009 the Company reversed $31.7 of accrued tax and related interest and penalties attributable to uncertain tax positions.
Deferred revenue related to acquisitions
During the fourth quarter of 2008, we completed the acquisition of 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 and nine months ended September 30, 2009, the fair value adjustment to ChinaHR’s deferred revenue was $0.6 million and $2.3 million, respectively.
Wind-down of Internet Advertising & Fees Tickle Business
In May 2008, we announced our intentions to wind-down the operations of Tickle, a business included in the Internet Advertising & Fees segment. As a result of this action, we have reclassified our quarterly financial information to reflect the wind-down as discontinued operations in all periods presented. The financial results from continuing operations, presented herein, reflect the results of the remaining and ongoing portion of our business.

 

3

 

Security Breach
In August 2007, we announced a security breach related to unauthorized access to our resume database. We took remediation measures, including the procurement of the capability to assist any potentially affected customers. For the nine months ended September 30, 2008, we recorded $0.5 million related to the breach, which was recorded as a component of office and general in the consolidated statement of operations.
Reclassifications
Certain reclassifications of prior year amounts have been made for consistent presentation.
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 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 product and technology global reorganization; the fair value adjustment to deferred revenue in connection with the acquisition of ChinaHR; 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.
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.

 

4

 

Net cash and securities are defined as cash and cash equivalents plus short-term and long-term marketable securities, less total debt. Total available liquidity is defined as cash and cash equivalents, plus short-term and long-term marketable securities plus unused borrowings under our credit facility. The Company considers net cash and securities and total available liquidity to be important measures of liquidity and indicators of its ability to meet its ongoing obligations. The Company also uses net cash and securities and total available liquidity, among other measures, in evaluating its choices for capital deployment. Net cash and securities and total available liquidity are presented herein as non-GAAP measures and may not be comparable to similarly titled measures used by other companies.
Selected financial ratios
We have included selected financial ratios in this financial supplement in order to assist investors to further evaluate our business. Our definitions and calculations are as follows:
Annualized return on equity
Annualized return on equity measures our effectiveness and ability to generate future profitability on the earnings that we retain. In addition, the ratio is a strong indicator of how well we utilize shareholders’ investments in our business. We calculate annualized return on equity as follows:
Annualized net income / Average stockholders’ equity
Book value per share
Book value per share is a market value indicator that we utilize when analyzing our stockholders’ equity. We calculate book value per share as follows:
Stockholders’ equity / Total shares outstanding
Cash and marketable securities per share
We calculate cash and marketable securities per share as follows:
(Cash and cash equivalents + Current marketable securities + Non-current marketable securities) / Total shares outstanding

 

5

 

Monster Worldwide, Inc.
Statements of Operations
(unaudited, in thousands, except per share amounts)
                                                                                         
                                                                            Year to Date Data  
Summary P&L Information   Q3 2007     Q4 2007     Q1 2008     Q2 2008     Q3 2008     Q4 2008     Q1 2009     Q2 2009     Q3 2009     9M 2008     9M 2009  
 
Monster Careers
   $ 296,996     $ 316,877     $ 336,810     $ 320,953     $ 297,606     $ 257,931     $ 222,849     $ 190,397     $ 179,941     $ 955,369     $ 593,187  
Internet Advertising & Fees
     33,146       30,970       29,662       33,341       34,583       32,741       31,554       32,660       34,592       97,586       98,806  
 
                                                                  
Revenue
     330,142       347,847       366,472       354,294       332,189       290,672       254,403       223,057       214,533       1,052,955       691,993  
 
Salary and related
     123,965       127,666       135,115       127,346       128,904       123,211       112,037       103,564       102,752       391,365       318,353  
Office and general
     57,621       56,708       61,710       61,754       57,124       44,091       45,793       42,917       42,422       180,588       131,132  
Marketing and promotion
     71,584       76,818       111,854       68,976       57,684       52,684       73,691       44,953       45,757       238,514       164,401  
Provision for (Reversal of) legal settlements, net
     —       —       —       40,100       —       —       —       —       (6,850 )     40,100       (6,850 )
Restructuring and other special charges
     11,155       5,442       6,927       2,732       3,592       3,156       11,008       5,097       —       13,251       16,105  
Depreciation expense
     10,408       10,589       10,803       12,330       13,336       14,761       13,769       14,479       15,230       36,469       43,478  
Amortization of restricted stock and RSU Plan
     2,871       3,623       5,206       8,351       7,437       7,046       10,149       9,816       9,924       20,994       29,889  
Non-cash stock option expense
     104       105       127       182       165       178       199       104       157       474       460  
Amortization of intangibles
     1,437       1,457       1,386       1,274       1,374       2,756       2,551       2,466       2,189       4,034       7,206  
 
                                                                  
Operating expenses
     279,145       282,408       333,128       323,045       269,616       247,883       269,197       223,396       211,581       925,789       704,174  
 
                                                                                        
Operating income (loss)
     50,997       65,439       33,344       31,249       62,573       42,789       (14,794 )     (339 )     2,952       127,166       (12,181 )
Interest and other, net
     6,507       6,799       7,383       3,057       5,283       1,560       1,203       76       (48 )     15,723       1,231  
 
                                                                  
Income (loss) from cont. operations, pre-tax
     57,504       72,238       40,727       34,306       67,856       44,349       (13,591 )     (263 )     2,904       142,889       (10,950 )
 
                                                                                        
Income taxes (benefit from)
     20,474       25,310       15,143       12,153       22,734       14,880       (4,489 )     (83 )     (30,891 )     50,030       (35,463 )
Losses in equity interests, net
     (3,074 )     (838 )     (1,822 )     (3,592 )     (2,086 )     (339 )     (1,239 )     (1,190 )     (1,044 )     (7,500 )     (3,473 )
 
                                                                  
Income (loss) from continuing operations
     33,956       46,090       23,762       18,561       43,036       29,130       (10,341 )     (1,370 )     32,751       85,359       21,040  
 
                                                                                        
(Loss) income from disc. operations, net of tax(1)
     (655 )     (1,090 )     (1,171 )     12,269       (258 )     (536 )     —       —       —       10,840       —  
 
                                                                  
 
                                                                                        
Net income (loss)
   $ 33,301     $ 45,000     $ 22,591     $ 30,830     $ 42,778     $ 28,594     $ (10,341 )   $ (1,370 )   $ 32,751     $ 96,199     $ 21,040  
 
                                                                  
 
                                                                                        
Basic earnings (loss) per share:
                                                                                        
Income (loss) from continuing operations
   $ 0.26     $ 0.37     $ 0.19     $ 0.15     $ 0.36     $ 0.25     $ (0.09 )   $ (0.01 )   $ 0.27     $ 0.70     $ 0.18  
 
                                                                  
Net income (loss)
   $ 0.26     $ 0.36     $ 0.18     $ 0.26     $ 0.36     $ 0.24     $ (0.09 )   $ (0.01 )   $ 0.27     $ 0.79     $ 0.18  
 
                                                                  
 
                                                                                        
Diluted earnings (loss) per share:
                                                                                        
Income (loss) from continuing operations
   $ 0.26     $ 0.36     $ 0.19     $ 0.15     $ 0.36     $ 0.24     $ (0.09 )   $ (0.01 )   $ 0.27     $ 0.70     $ 0.17  
 
                                                                  
Net income (loss)
   $ 0.25     $ 0.36     $ 0.18     $ 0.25     $ 0.35     $ 0.24     $ (0.09 )   $ (0.01 )   $ 0.27     $ 0.79     $ 0.17  
 
                                                                  
 
                                                                                        
Weighted avg. shares outstanding:
                                                                                        
Basic shares
     129,499       125,504       122,711       120,885       120,057       118,601       118,855       119,274       119,473       121,213       119,206  
Diluted shares
     130,757       126,704       123,332       121,541       120,722       119,380       118,855       119,274       121,676       121,884       120,853  
 
                                                                                        
Global employees (ones)
     5,116       5,112       5,164       5,396       5,669       6,961       6,295       5,999       5,779       5,669       5,779  
Annualized revenue per average employee
   $ 250.2     $ 272.1     $ 285.3     $ 268.4     $ 240.2     $ 184.1     $ 153.5     $ 145.1     $ 142.1     $ 259.5     $ 153.2  
     
(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   Q3 2007     Q4 2007     Q1 2008     Q2 2008     Q3 2008     Q4 2008     Q1 2009     Q2 2009     Q3 2009  
 
Monster Careers
   $ 1,136,805     $ 1,195,422     $ 1,242,009     $ 1,271,636     $ 1,272,246     $ 1,213,300     $ 1,099,339     $ 968,783     $ 851,118  
Internet Advertising & Fees
     128,505       128,382       126,437       127,119       128,556       130,327       132,219       131,538       131,547  
 
                                                      
Revenue
     1,265,310       1,323,804       1,368,446       1,398,755       1,400,802       1,343,627       1,231,558       1,100,321       982,665  
 
                                                                        
Salary and related
     479,579       496,472       514,585       514,092       519,031       514,576       491,498       467,716       441,564  
Office and general
     217,151       224,935       227,895       237,793       237,296       224,679       208,762       189,925       175,223  
Marketing and promotion
     278,594       294,479       333,824       329,232       315,332       291,198       253,035       229,012       217,085  
Provision for (Reversal of) legal settlements, net
     —       —       —       40,100       40,100       40,100       40,100       —       (6,850 )
Restructuring and other special charges
     11,155       16,597       23,524       26,256       18,693       16,407       20,488       22,853       19,261  
Depreciation expense
     35,066       38,207       41,150       44,130       47,058       51,230       54,196       56,345       58,239  
Amortization of restricted stock and RSU Plan
     26,540       27,739       28,769       20,051       24,617       28,040       32,983       34,448       36,935  
Non-cash stock option expense
     337       442       383       518       579       652       724       646       638  
Amortization of intangibles
     5,812       5,701       5,693       5,554       5,491       6,790       7,955       9,147       9,962  
 
                                                      
Operating expenses
     1,054,234       1,104,572       1,175,823       1,217,726       1,208,197       1,173,672       1,109,741       1,010,092       952,057  
 
                                                                        
Operating income
     211,076       219,232       192,623       181,029       192,605       169,955       121,817       90,229       30,608  
Interest and other, net
     25,327       25,622       27,592       23,746       22,522       17,283       11,103       8,122       2,791  
 
                                                      
Income from continuing operations, pre-tax
     236,403       244,854       220,215       204,775       215,127       187,238       132,920       98,351       33,399  
 
                                                                        
Income taxes
     83,458       86,461       78,514       73,080       75,340       64,910       45,278       33,042       (20,583 )
Losses in equity interests, net
     (8,977 )     (8,298 )     (8,700 )     (9,326 )     (8,338 )     (7,839 )     (7,256 )     (4,854 )     (3,812 )
 
                                                      
Income from continuing operations
     143,968       150,095       133,001       122,369       131,449       114,489       80,386       60,455       50,170  
 
                                                                        
(Loss) income from disc. operations, net of tax
     (3,494 )     (3,696 )     (3,493 )     9,353       9,750       10,304       11,475       (794 )     (536 )
 
                                                      
 
                                                                        
Net income
   $ 140,474     $ 146,399     $ 129,508     $ 131,722     $ 141,199     $ 124,793     $ 91,861     $ 59,661     $ 49,634  
 
                                                      
 
                                                                        
Basic earnings per share:
                                                                        
Income from continuing operations
   $ 1.11     $ 1.17     $ 1.05     $ 0.98     $ 1.07     $ 0.95     $ 0.67     $ 0.51     $ 0.42  
 
                                                      
Net income
   $ 1.08     $ 1.14     $ 1.02     $ 1.06     $ 1.15     $ 1.04     $ 0.77     $ 0.50     $ 0.42  
 
                                                      
 
                                                                        
Diluted earnings per share:
                                                                        
Income from continuing operations
   $ 1.09     $ 1.15     $ 1.04     $ 0.97     $ 1.07     $ 0.94     $ 0.67     $ 0.51     $ 0.42  
 
                                                      
Net income
   $ 1.07     $ 1.12     $ 1.01     $ 1.05     $ 1.15     $ 1.03     $ 0.76     $ 0.50     $ 0.41  
 
                                                      
 
                                                                        
Weighted avg. shares outstanding:
                                                                        
Basic shares
     129,546       128,785       127,064       124,650       122,289       120,557       119,600       119,197       119,051  
Diluted shares
     131,888       130,755       128,479       125,584       123,075       121,167       120,125       119,558       119,796  

 

 

Monster Worldwide, Inc.
Statements of Cash Flows
(unaudited, in thousands, except per share amounts)
                                                                                         
    Trended Quarterly Data     Year to Date Data  
    Q3 2007     Q4 2007     Q1 2008     Q2 2008     Q3 2008     Q4 2008     Q1 2009     Q2 2009     Q3 2009     9M 2008     9M 2009  
Cash flows provided by (used for) operating activities:
                                                                                        
Net income (loss)
   $ 33,301     $ 45,000     $ 22,591     $ 30,830     $ 42,778     $ 28,594     $ (10,341 )   $ (1,370 )   $ 32,751     $ 96,199     $ 21,040  
 
                                                                  
Adjustments to reconcile net income (loss) to cash provided by operating activities:
                                                                                        
Loss (Income) from discontinued operations, net of tax
     655       1,090       1,171       (12,269 )     258       536       —       —       —       (10,840 )     —  
Depreciation and amortization of intangibles
     11,845       12,046       12,189       13,604       14,710       17,517       16,320       16,945       17,419       40,503       50,684  
Provision for (Reversal of) legal settlements, net
     —       —       —       40,100       —       —       —       —       (6,850 )     40,100       (6,850 )
Provision for doubtful accounts
     3,340       4,453       3,564       3,207       4,403       5,057       4,072       2,812       1,682       11,174       8,566  
Non-cash compensation
     2,975       3,728       6,495       8,533       7,602       7,223       10,348       9,920       10,081       22,630       30,349  
Deferred income taxes
     2,808       (2,762 )     (7,319 )     (12,263 )     12,440       14,572       (2,488 )     (3,933 )     12,160       (7,142 )     5,739  
Non-cash restructuring write-offs, accelerated amortization and (gain) loss on disposal of assets
     (2 )     3       1,649       436       924       924       3,690       1,051       3       3,009       4,744  
Loss in equity interests
     3,074       838       1,822       3,592       2,086       339       1,239       1,190       1,044       7,500       3,473  
Changes in assets and liabilities, net of business combinations:
                                                                                        
Accounts receivable
     13,699       (101,843 )     37,848       44,812       49,231       (19,371 )     72,347       47,892       7,284       131,891       127,523  
Prepaid and other
     (8,007 )     (12,766 )     1,025       18,073       2,522       1,548       3,246       13,615       (16,005 )     21,620       856  
Deferred revenue
     (17,515 )     89,650       (2,458 )     (51,465 )     (58,644 )     (5,732 )     (63,383 )     (61,153 )     (28,152 )     (112,567 )     (152,688 )
Accounts payable, accrued expenses and other liabilities
     26,536       27,091       (289 )     (13,308 )     8,673       (27,790 )     (21,237 )     (40,657 )     (19,574 )     (4,924 )     (81,468 )
Receipts and payments for legal settlements, net
     —       —       —       —       5,700       (35,587 )     —       —       —       5,700       —  
Net cash provided by (used for) operating activities of discontinued operations
     126       (2,344 )     (560 )     (2,569 )     (962 )     (2,758 )     (77 )     77       —       (4,091 )     —  
 
                                                                  
Total adjustments
     39,534       19,184       55,137       40,483       48,943       (43,522 )     24,077       (12,241 )     (20,908 )     144,563       (9,072 )
 
                                                                  
Net cash provided by (used for) operating activities
     72,835       64,184       77,728       71,313       91,721       (14,928 )     13,736       (13,611 )     11,843       240,762       11,968  
 
                                                                  
 
                                                                                        
Cash flows provided by (used for) investing activities:
                                                                                        
Capital expenditures
     (10,596 )     (16,240 )     (20,559 )     (29,654 )     (21,011 )     (22,403 )     (14,922 )     (11,457 )     (12,285 )     (71,224 )     (38,664 )
Purchase of marketable securities
     (327,250 )     (415,025 )     (149,249 )     (7,633 )     (25,265 )     (1,785 )     (992 )     (6,484 )     —       (182,147 )     (7,476 )
Sale and maturities of marketable securities
     446,418       478,068       414,453       21,852       66,000       36,981       1,425       1,892       —       502,305       3,317  
Payments for acquisitions and intangible assets, net of cash acquired
     (133 )     (610 )     (61,567 )     —       (64,628 )     (166,641 )     —       —       (300 )     (126,195 )     (300 )
Dividends received from unconsolidated investee
     —       —       —       1,011       —       —       —       763       —       1,011       763  
Cash funded to equity investee
     (5,900 )     —       (5,000 )     —       —       (1,402 )     (1,428 )     (1,886 )     (1,639 )     (5,000 )     (4,953 )
Net cash used for investing activities of discontinued operations
     (5 )     —       —       —       —       —       —       —       —       —       —  
 
                                                                  
Net cash provided by (used for) investing activities
     102,534       46,193       178,078       (14,424 )     (44,904 )     (155,250 )     (15,917 )     (17,172 )     (14,224 )     118,750       (47,313 )
 
                                                                  
 
                                                                                        
Cash flows (used for) provided by financing activities:
                                                                                        
Proceeds from borrowings on credit facilities short-term
     —       —       —       —       247,000       4,971       199,203       —       —       247,000       199,203  
Payments on borrowings on credit facilities short-term
     —       —       —       —       —       (197,893 )     —       (157,173 )     (99,023 )     —       (256,196 )
Repurchase of common stock
     (154,692 )     (97,761 )     (79,469 )     (6,858 )     (41,806 )     (32 )     (1,907 )     (528 )     (1,869 )     (128,133 )     (4,304 )
Proceeds on term loan and borrowings (payments) on other debt
     (58 )     (42 )     (80 )     (67 )     (9 )     (15 )     (5 )     (1 )     50,006       (156 )     50,000  
Payments on acquisition debt
     —       (1,500 )     —       —       —       —       —       —       —       —       —  
Proceeds from the exercise of employee stock options
     651       838       418       628       110       305       9       —       46       1,156       55  
Excess tax benefits from (provisions for) stock-based compensation
     1,611       (155 )     61       59       861       22       4       —       8       981       12  
 
                                                                  
Net cash (used for) provided by financing activities
     (152,488 )     (98,620 )     (79,070 )     (6,238 )     206,156       (192,642 )     197,304       (157,702 )     (50,832 )     120,848       (11,230 )
 
                                                                  
 
                                                                                        
Effects of exchange rates on cash
     3,795       772       10,256       (1,933 )     (13,303 )     (20,044 )     (6,327 )     13,681       4,438       (4,980 )     11,792  
 
                                                                                        
Net increase (decrease) in cash and cash equivalents
     26,676       12,529       186,992       48,718       239,670       (382,864 )     188,796       (174,804 )     (48,775 )     475,380       (34,783 )
Cash and cash equivalents, beginning of period
     90,539       117,215       129,744       316,736       365,454       605,124       222,260       411,056       236,252       129,744       222,260  
 
                                                                  
Cash and cash equivalents, end of period
   $ 117,215     $ 129,744     $ 316,736     $ 365,454     $ 605,124     $ 222,260     $ 411,056     $ 236,252     $ 187,477     $ 605,124     $ 187,477  
 
                                                                  
 
                                                                                        
Non — GAAP Free cash flow (1):
                                                                                        
Net cash provided by (used for) operating activities
   $ 72,835     $ 64,184     $ 77,728     $ 71,313     $ 91,721     $ (14,928 )   $ 13,736     $ (13,611 )   $ 11,843     $ 240,762     $ 11,968  
Less: Capital expenditures
     (10,596 )     (16,240 )     (20,559 )     (29,654 )     (21,011 )     (22,403 )     (14,922 )     (11,457 )     (12,285 )     (71,224 )     (38,664 )
 
                                                                  
Free cash flow
   $ 62,239     $ 47,944     $ 57,169     $ 41,659     $ 70,710     $ (37,331 )   $ (1,186 )   $ (25,068 )   $ (442 )   $ 169,538     $ (26,696 )
 
                                                                  
     
(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  
    Q3 2007     Q4 2007     Q1 2008     Q2 2008     Q3 2008     Q4 2008     Q1 2009     Q2 2009     Q3 2009  
ASSETS
                                                                        
Current assets:
                                                                        
Cash and cash equivalents
   $ 117,215     $ 129,744     $ 316,736     $ 365,454     $ 605,124     $ 222,260     $ 411,056     $ 236,252     $ 187,477  
Marketable securities, current
     511,746       448,703       79,236       68,579       33,823       1,425       992       14,533       20,482  
Net Accounts Receivable
     401,994       499,854       458,447       410,427       358,214       376,720       294,449       249,004       243,033  
Prepaid and other
     101,950       106,664       97,929       121,093       111,754       82,415       82,710       73,866       87,058  
 
                                                      
Total current assets
     1,132,905       1,184,965       952,348       965,553       1,108,915       682,820       789,207       573,655       538,050  
 
                                                      
 
                                                                        
Marketable securities, non-current
     —       —       102,716       99,330       93,728       90,347       89,196       81,272       75,953  
Property and equipment, net
     117,802       123,397       138,182       149,048       152,352       161,282       154,559       153,942       150,963  
Goodwill
     614,437       615,334       702,598       690,161       707,164       894,546       886,970       897,561       930,231  
Intangibles, net
     36,804       35,351       34,308       32,696       36,694       52,335       49,533       47,420       45,893  
Investment in unconsolidated affiliates
     51,708       50,871       49,049       44,446       42,360       1,843       1,315       517       525  
Other assets
     52,513       53,162       67,218       70,475       61,761       33,417       33,314       35,100       32,617  
Non-current assets of discontinued operations
     15,461       14,730       13,959       —       —       —       —       —       —  
 
                                                      
Total assets
   $ 2,021,630     $ 2,077,810     $ 2,060,378     $ 2,051,709     $ 2,202,974     $ 1,916,590     $ 2,004,094     $ 1,789,467     $ 1,774,232  
 
                                                      
 
                                                                        
LIABILITIES AND STOCKHOLDERS’ EQUITY
                                                                        
 
                                                                        
Current liabilities:
                                                                        
Accounts payable, accrued expenses and other
   $ 298,023     $ 304,146     $ 297,932     $ 321,077     $ 328,546     $ 254,407     $ 225,630     $ 192,266     $ 204,402  
Deferred revenue
     434,682       524,331       521,873       470,408       411,764       414,312       344,905       289,818       265,573  
Borrowings on credit facility short-term
     —       —       —       —       247,000       54,971       254,174       97,000       —  
Current portion of long-term debt
     1,684       184       158       142       26       18       27       23       5,017  
 
                                                      
Total current liabilities
     734,389       828,661       819,963       791,627       987,336       723,708       824,736       579,107       474,992  
 
                                                      
 
                                                                        
Non-current income taxes payable
     94,418       111,108       116,376       119,360       115,318       119,951       123,385       125,991       82,963  
Long-term debt
     —       —       —       —       —       —       —       —       45,000  
Other long-term liabilities
     25,574       17,264       16,254       17,449       23,699       25,658       29,838       30,971       36,394  
Non-current liabilities of discontinued operations
     4,486       4,276       4,067       —       —       —       —       —       —  
 
                                                      
Total liabilities
     858,867       961,309       956,660       928,436       1,126,353       869,317       977,959       736,069       639,349  
 
                                                      
 
                                                                        
Common stock and class B common stock
     131       133       133       134       134       133       134       134       134  
Additional paid-in capital
     1,562,646       1,468,808       1,395,991       1,397,281       1,363,655       1,367,373       1,374,049       1,382,649       1,388,609  
Accumulated other comprehensive (loss) income
     115,813       118,387       155,830       143,264       87,460       25,801       8,327       28,360       71,133  
Retained deficit
     (515,827 )     (470,827 )     (448,236 )     (417,406 )     (374,628 )     (346,034)       (356,375)       (357,745)       (324,993 )
 
                                                      
Total stockholders’ equity
     1,162,763       1,116,501       1,103,718       1,123,273       1,076,621       1,047,273       1,026,135       1,053,398       1,134,883  
 
                                                      
 
                                                                        
Total liabilities and stockholders’ equity
   $ 2,021,630     $ 2,077,810     $ 2,060,378     $ 2,051,709     $ 2,202,974     $ 1,916,590     $ 2,004,094     $ 1,789,467     $ 1,774,232  
 
                                                      
 
                                                                        
Selected Financial Ratios(1)
                                                                        
- Annualized return on equity
     11.0 %     15.8 %     8.1 %     11.1 %     15.6 %     10.8 %     -4.0 %     -0.5 %     12.0 %
- Book value per share
   $ 9.19     $ 9.02     $ 9.13     $ 9.30     $ 9.08     $ 8.83     $ 8.61     $ 8.83     $ 9.49  
- Cash and marketable securities per share
   $ 4.97     $ 4.67     $ 4.13     $ 4.42     $ 6.18     $ 2.65     $ 4.20     $ 2.78     $ 2.37  
- Net cash and securities
   $ 627,016     $ 578,032     $ 498,353     $ 533,095     $ 485,632     $ 259,033     $ 247,038     $ 235,034     $ 233,895  
     
(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)
                                                                                         
                                                                            Year to Date Data  
    Q3 2007     Q4 2007     Q1 2008     Q2 2008     Q3 2008     Q4 2008     Q1 2009     Q2 2009     Q3 2009     9M 2008     9M 2009  
Segment OIBDA(1):
                                                                                        
Careers — North America
   $ 57,589     $ 60,410     $ 47,602     $ 67,636     $ 52,516     $ 44,138     $ 12,272     $ 22,066     $ 16,902     $ 167,754     $ 51,240  
Careers — International
     12,896       29,980       16,662       40,361       39,060       23,833       10,749       8,386       8,154       96,083       27,289  
 
                                                                  
Careers OIBDA (1)
     70,485       90,390       64,264       107,997       91,576       67,971       23,021       30,452       25,056       263,837       78,529  
 
                                                                                        
Internet Advertising & Fees OIBDA(1)
     5,316       3,118       792       7,508       7,425       6,293       6,364       7,939       8,247       15,725       22,550  
 
                                                                  
 
                                                                                        
Total Monster OIBDA(1)
   $ 75,801     $ 93,508     $ 65,056     $ 115,505     $ 99,001     $ 74,264     $ 29,385     $ 38,391     $ 33,303     $ 279,562     $ 101,079  
 
                                                                  
 
                                                                                        
Corporate expenses before D&A(1)
   $ (9,917 )   $ (11,032 )   $ (12,104 )   $ (61,196 )   $ (13,192 )   $ (5,810 )   $ (13,843 )   $ (10,810 )   $ (2,851 )   $ (86,492 )   $ (27,504 )
 
                                                                  
 
                                                                                        
Proforma operating income(1):
                                                                                        
Careers — North America
   $ 59,430     $ 56,482     $ 42,955     $ 59,335     $ 43,771     $ 34,314     $ 3,100     $ 12,405     $ 9,519     $ 146,061     $ 25,024  
Careers — International
     13,589       28,699       12,945       33,316       32,467       17,711       7,413       1,983       782       78,728       10,178  
 
                                                                  
Careers Proforma operating income(1)
     73,019       85,181       55,900       92,651       76,238       52,025       10,513       14,388       10,301       224,789       35,202  
 
                                                                                        
Internet Advertising & Fees ProForma operating income (loss)(1)
     5,404       2,658       (609 )     4,994       4,977       3,745       4,003       5,096       6,506       9,362       15,605  
 
                                                                  
 
                                                                                        
Total Monster Proforma income(1)
   $ 78,423     $ 87,839     $ 55,291     $ 97,645     $ 81,215     $ 55,770     $ 14,516     $ 19,484     $ 16,807     $ 234,151     $ 50,807  
 
                                                                  
 
                                                                                        
Corporate Proforma expenses(1)
   $ (8,046 )   $ (12,177 )   $ (11,586 )   $ (19,308 )   $ (11,175 )   $ (14,294 )   $ (14,288 )   $ (11,756 )   $ (12,913 )   $ (42,069 )   $ (38,957 )
 
                                                                  
 
                                                                                        
Segment operating income (loss):(1)
                                                                                        
Careers — North America
   $ 51,455     $ 52,950     $ 39,701     $ 58,409     $ 43,120     $ 34,025     $ 828     $ 10,919     $ 6,057     $ 141,230     $ 17,804  
Careers — International
     7,344       24,753       9,643       31,916       30,230       12,938       (671 )     (2,019 )     (2,181 )     71,789       (4,871 )
 
                                                                  
Careers operating income (loss)
     58,799       77,703       49,344       90,325       73,350       46,963       157       8,900       3,876       213,019       12,933  
 
                                                                                        
Internet Advertising & Fees operating income (loss)
     3,487       1,383       (1,431 )     4,656       4,726       3,715       3,557       4,926       5,091       7,951       13,574  
 
                                                                  
 
                                                                                        
Total Monster operating income (loss)
   $ 62,286     $ 79,086     $ 47,913     $ 94,981     $ 78,076     $ 50,678     $ 3,714     $ 13,826     $ 8,967     $ 220,970     $ 26,507  
 
                                                                  
 
                                                                                        
Corporate expenses
   $ (11,289 )   $ (13,647 )   $ (14,569 )   $ (63,732 )   $ (15,503 )   $ (7,889 )   $ (18,508 )   $ (14,165 )   $ (6,015 )   $ (93,804 )   $ (38,688 )
 
                                                                  
 
                                                                                        
Margin Analysis:
                                                                                        
 
Careers — North America OIBDA margin
     32.8 %     34.8 %     25.9 %     41.2 %     33.8 %     32.7 %     10.3 %     21.7 %     17.8 %     33.4 %     16.2 %
Careers — North America Proforma operating margin
     33.9 %     32.5 %     23.4 %     36.1 %     28.2 %     25.4 %     2.6 %     12.2 %     10.0 %     29.0 %     7.9 %
Careers — North America operating margin
     29.4 %     30.5 %     21.6 %     35.6 %     27.8 %     25.2 %     0.7 %     10.7 %     6.4 %     28.1 %     5.6 %
 
                                                                                        
Careers — International OIBDA margin
     10.6 %     20.9 %     10.9 %     25.8 %     27.4 %     19.4 %     10.4 %     9.5 %     9.6 %     21.2 %     9.9 %
Careers — International Proforma operating margin
     11.2 %     20.0 %     8.4 %     21.3 %     22.8 %     14.2 %     7.1 %     2.2 %     0.9 %     17.4 %     3.6 %
Careers — International operating margin
     6.0 %     17.3 %     6.3 %     20.4 %     21.2 %     10.5 %     -0.6 %     -2.3 %     -2.6 %     15.9 %     -1.8 %
 
                                                                                        
Careers OIBDA margin
     23.7 %     28.5 %     19.1 %     33.6 %     30.8 %     26.4 %     10.3 %     16.0 %     13.9 %     27.6 %     13.2 %
Careers Proforma operating margin
     24.6 %     26.9 %     16.6 %     28.9 %     25.6 %     20.0 %     4.7 %     7.5 %     5.7 %     23.5 %     5.9 %
Careers operating margin
     19.8 %     24.5 %     14.7 %     28.1 %     24.6 %     18.2 %     0.1 %     4.7 %     2.2 %     22.3 %     2.2 %
 
                                                                                        
Internet Advertising & Fees OIBDA margin
     16.0 %     10.1 %     2.7 %     22.5 %     21.5 %     19.2 %     20.2 %     24.3 %     23.8 %     16.1 %     22.8 %
Internet Advertising & Fees Proforma operating margin
     16.3 %     8.6 %     -2.1 %     15.0 %     14.4 %     11.4 %     12.7 %     15.6 %     18.8 %     9.6 %     15.8 %
Internet Advertising & Fees operating margin
     10.5 %     4.5 %     -4.8 %     14.0 %     13.7 %     11.3 %     11.3 %     15.1 %     14.7 %     8.1 %     13.7 %
     
(1) -   See notes to financial supplement for further explanation of non-GAAP measures.

 

 

 

Monster Worldwide, Inc.
Statements of Operations
(unaudited)
                                                                                         
                                                                            Year to Date Data  
Summary P&L Information   Q3 2007     Q4 2007     Q1 2008     Q2 2008     Q3 2008     Q4 2008     Q1 2009     Q2 2009     Q3 2009     9M 2008     9M 2009  
 
Monster Careers
     90.0 %     91.1 %     91.9 %     90.6 %     89.6 %     88.7 %     87.6 %     85.4 %     83.9 %     90.7 %     85.7 %
Internet Advertising & Fees
     10.0 %     8.9 %     8.1 %     9.4 %     10.4 %     11.3 %     12.4 %     14.6 %     16.1 %     9.3 %     14.3 %
 
                                                                  
Revenue
     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %
 
                                                                                        
Salary and related
     37.5 %     36.7 %     36.9 %     35.9 %     38.8 %     42.4 %     44.0 %     46.4 %     47.9 %     37.2 %     46.0 %
Office and general
     17.5 %     16.3 %     16.8 %     17.4 %     17.2 %     15.2 %     18.0 %     19.2 %     19.8 %     17.2 %     18.9 %
Marketing and promotion
     21.7 %     22.1 %     30.5 %     19.5 %     17.4 %     18.1 %     29.0 %     20.2 %     21.3 %     22.7 %     23.8 %
Provision for (Reversal of) legal settlements, net
     0.0 %     0.0 %     0.0 %     11.3 %     0.0 %     0.0 %     0.0 %     0.0 %     -3.2 %     3.8 %     -1.0 %
Restructuring and other special charges
     3.4 %     1.6 %     1.9 %     0.8 %     1.1 %     1.1 %     4.3 %     2.3 %     0.0 %     1.3 %     2.3 %
Depreciation expense
     3.2 %     3.0 %     2.9 %     3.5 %     4.0 %     5.1 %     5.4 %     6.5 %     7.1 %     3.5 %     6.3 %
Amortization of restricted stock and RSU Plan
     0.9 %     1.0 %     1.4 %     2.4 %     2.2 %     2.4 %     4.0 %     4.4 %     4.6 %     2.0 %     4.3 %
Non-cash stock option expense
     0.0 %     0.0 %     0.0 %     0.1 %     0.0 %     0.1 %     0.1 %     0.0 %     0.1 %     0.0 %     0.1 %
Amortization of intangibles
     0.4 %     0.4 %     0.4 %     0.4 %     0.4 %     0.9 %     1.0 %     1.1 %     1.0 %     0.4 %     1.0 %
 
                                                                  
Operating expenses
     84.6 %     81.2 %     90.9 %     91.2 %     81.2 %     85.3 %     105.8 %     100.2 %     98.6 %     87.9 %     101.8 %
 
                                                                                        
Operating income (loss)
     15.4 %     18.8 %     9.1 %     8.8 %     18.8 %     14.7 %     -5.8 %     -0.2 %     1.4 %     12.1 %     -1.8 %
Interest and other, net
     2.0 %     2.0 %     2.0 %     0.9 %     1.6 %     0.5 %     0.5 %     0.0 %     0.0 %     1.5 %     0.2 %
 
                                                                  
Income (loss) from continuing operations, pre-tax
     17.4 %     20.8 %     11.1 %     9.7 %     20.4 %     15.3 %     -5.3 %     -0.1 %     1.4 %     13.6 %     -1.6 %
 
                                                                                        
Income taxes (benefit from)
     6.2 %     7.3 %     4.1 %     3.4 %     6.8 %     5.1 %     -1.8 %     0.0 %     -14.4 %     4.8 %     -5.1 %
Losses in equity interests, net
     -0.9 %     -0.2 %     -0.5 %     -1.0 %     -0.6 %     -0.1 %     -0.5 %     -0.5 %     -0.5 %     -0.7 %     -0.5 %
 
                                                                  
Income (loss) from continuing operations
     10.3 %     13.3 %     6.5 %     5.2 %     13.0 %     10.0 %     -4.1 %     -0.6 %     15.3 %     8.1 %     3.0 %
 
                                                                                        
(Loss) income from disc. operations, net of tax
     -0.2 %     -0.3 %     -0.3 %     3.5 %     -0.1 %     -0.2 %     0.0 %     0.0 %     0.0 %     1.0 %     0.0 %
 
                                                                  
 
                                                                                        
Net income (loss)
     10.1 %     12.9 %     6.2 %     8.7 %     12.9 %     9.8 %     -4.1 %     -0.6 %     15.3 %     9.1 %     3.0 %
 
                                                                  

 

 

 

Monster Worldwide, Inc.
Statements of Operations — Reconciliation of Non-GAAP Measures
(unaudited, in thousands, except per share amounts)
                                                                                         
    Trended Quarterly Data     Year to Date Data  
Summary P&L Information   Q3 2007     Q4 2007     Q1 2008     Q2 2008     Q3 2008     Q4 2008     Q1 2009     Q2 2009     Q3 2009     9M 2008     9M 2009  
 
Proforma revenue (1)
   $ 330,142     $ 347,847     $ 366,472     $ 354,294     $ 332,189     $ 292,885     $ 255,397     $ 223,782     $ 215,085     $ 1,052,955     $ 694,264  
 
Deferred revenue related to acquisitions
     —       —       —       —       —       2,213       994       725       552       —       2,271  
 
                                                                  
 
                                                                                        
Revenue
   $ 330,142     $ 347,847     $ 366,472     $ 354,294     $ 332,189     $ 290,672     $ 254,403     $ 223,057     $ 214,533     $ 1,052,955     $ 691,993  
 
                                                                  
 
                                                                                        
 
OIBDA (1)
   $ 65,884     $ 82,476     $ 52,952     $ 54,309     $ 85,809     $ 68,454     $ 15,542     $ 27,581     $ 30,452     $ 193,070     $ 73,575  
 
Depreciation expense
     10,408       10,589       10,803       12,330       13,336       14,761       13,769       14,479       15,230       36,469       43,478  
Amortization of restricted stock and RSU Plan
     2,871       3,623       5,206       8,351       7,437       7,046       10,149       9,816       9,924       20,994       29,889  
Non-cash stock option expense
     104       105       127       182       165       178       199       104       157       474       460  
Restructuring non-cash compensation expense
     —       —       1,162       —       —       —       —       —       —       1,162       —  
Restructuring non-cash write-offs
     67       1,263       924       923       924       924       3,668       1,055       —       2,771       4,723  
Amortization of intangibles
     1,437       1,457       1,386       1,274       1,374       2,756       2,551       2,466       2,189       4,034       7,206  
 
                                                                  
 
                                                                                        
Operating income (loss)
   $ 50,997     $ 65,439     $ 33,344     $ 31,249     $ 62,573     $ 42,789     $ (14,794 )   $ (339 )   $ 2,952     $ 127,166     $ (12,181 )
 
                                                                  
 
                                                                                        
Proforma operating income (1)
   $ 70,377     $ 75,662     $ 43,705     $ 78,337     $ 70,040     $ 41,476     $ 228     $ 7,728     $ 3,894     $ 192,082     $ 11,850  
 
Executive Commitments
     —       —       —       —       —       —       —       —       —       —       —  
Provision for (Reversal of) legal settlements, net
     —       —       —       40,100       —       —       —       —       (6,850 )     40,100       (6,850 )
Stock option investigation
     2,571       1,392       2,983       4,256       3,875       (6,682 )     3,020       2,245       (474 )     11,114       4,791  
Security breach
     5,654       3,389       451       —       —       —       —       —       —       451       —  
Restructuring Non- Gaap
     —       —       —       —       —       —       —       —       5,907       —       5,907  
Facilities charge Non-Gaap
     —       —       —       —       —       —       —       —       1,807       —       1,807  
Deferred revenue related to acquisitions
     —       —       —       —       —       2,213       994       725       552       —       2,271  
Restructuring non-cash compensation expense
     —       —       1,162       —       —       —       —       —       —       1,162       —  
Restructuring program non-cash write-offs
     67       1,263       924       923       924       924       3,668       1,055       —       2,771       4,723  
Restructuring expenses, less non-cash items
     11,088       4,179       4,841       1,809       2,668       2,232       7,340       4,042       —       9,318       11,382  
 
                                                                  
 
                                                                                        
Operating income (loss)
   $ 50,997     $ 65,439     $ 33,344     $ 31,249     $ 62,573     $ 42,789     $ (14,794 )   $ (339 )   $ 2,952     $ 127,166     $ (12,181 )
 
                                                                  
     
(1) -   See notes to financial supplement for further explanation of non-GAAP measures.