EX-99.2 3 a06-16734_1ex99d2.htm EX-99

Exhibit 99.2

FINANCIAL SUPPLEMENT

JUNE 30, 2006

We provide this supplement to assist investors in evaluating our Company’s financial and operating metrics.  We suggest that the notes to this supplement are 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.

1



 

Notes to Financial Supplement

Presentation

Sale of Advertising & Communications businesses in the United Kingdom, Ireland and Spain.

On May 10, 2006, we sold our TMP Worldwide Advertising & Communications businesses in the United Kingdom and Ireland.  In a separate transaction, we sold our recruitment advertising agency in Spain.  We no longer have any Advertising & Communications’ operations outside of North America.  Accordingly, we have reclassified our quarterly financial information to reflect the dispositions as discontinued operations in all periods presented.  The financial results from continuing operations, presented herein, reflect the remaining and ongoing results of our business.

(1) Non-GAAP financial measures

The information included in this financial supplement contains non-GAAP financial measures.  A non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles (“GAAP”).  These measures are not in accordance with or an alternative for GAAP, and may be different from non-GAAP measures reported by other companies.  We believe that our presentation of non-GAAP measures provide useful information to management and investors regarding certain financial and business trends relating to our financial condition and results of operations.  In addition, we use these measures for reviewing our financial results and for budgeting and planning purposes.

Operating income before depreciation and amortization (“OIBDA”) is defined as income from operations before depreciation, amortization of intangible assets and amortization of stock based compensation. We consider OIBDA to be an important indicator of our operational strength. This measure eliminates the effects of depreciation, amortization of intangible assets and amortization of stock based compensation from period to period, which we believe is useful to management and investors in evaluating our operating performance.  OIBDA is a non-GAAP measure and may not be comparable to similarly titled measures reported by other companies.

(2) Selected financial ratio

Our definition and calculation are as follows:

Cash and marketable securities per share

We calculate cash and marketable securities per share as follows:

(Cash and cash equivalents + Marketable securities) / Total shares outstanding

Important Disclosure Related to Historical Stock Option Grant Review

As previously disclosed on June 12, 2006, a committee of independent members of the Board of Directors, with assistance of outside legal counsel, has been conducting an internal review and analysis of all stock options previously issued by Monster Worldwide.  In further press

2



 

releases dated June 12, 2006 and June 14, 2006, the Company announced that the U.S. Attorney’s Office and the SEC, respectively, were conducting informal investigations of the Company’s past stock option grants. In a Form 8-K filed on July 12, 2006, the Company discussed three pending shareholder derivative suits filed against the Company.

On July 11, 2006, Monster Worldwide stated that while the review is in its early stages, the Company believes it may need to restate its financial statements for the year ended December 31, 2005 and prior years to record non-cash charges for compensation expense relating to various stock option grants.  The Company has not determined which historical financial statements may be restated, the magnitude of the restatement, or the tax impact that may result from the matter.  However, the Company believes a potential restatement would not have a material impact on 2006 earnings.  On July 26, 2006, the Company filed a Form 8-K stating that investors should exercise caution in relying on the historical financial statements.  Due to the ongoing independent review and the potential impact of stock based compensation expense and related tax matters in prior periods, the Company is not providing full comparative financial results for the three and six months ended June 30, 2005, and is providing only selected cash flow and balance sheet data for 2006.  In addition, it is likely that the Company will not be in a position to file its Quarterly Report on Form 10-Q for the quarter ended June 30, 2006 on a timely basis pending the completion of the independent review.

3



 

Monster Worldwide, Inc.
Statements of Operations – Non GAAP
(unaudited, in thousands, except per share amounts)

 

 

Quarterly Data

 

YTD

 

Summary P&L Information

 

 

 

Q1 2006

 

Q2 2006

 

6M 2006

 

 

 

 

 

 

 

 

 

Monster

 

$

257,036

 

$

275,169

 

$

532,205

 

Advertising & Communications

 

19,917

 

20,631

 

40,548

 

Revenue

 

276,953

 

295,800

 

572,753

 

 

 

 

 

 

 

 

 

Salaries and related

 

102,010

 

108,387

 

210,397

 

Office and general

 

40,610

 

36,083

 

76,693

 

Marketing and promotion

 

65,971

 

73,404

 

139,375

 

OIBDA (1)

 

68,362

 

77,926

 

146,288

 

 

 

 

 

 

 

 

 

Depreciation expense

 

7,644

 

9,289

 

16,933

 

Amortization of stock based compensation

 

2,068

 

3,538

 

5,606

 

Amortization of intangibles

 

2,702

 

2,597

 

5,299

 

Operating expenses

 

221,005

 

233,298

 

454,303

 

 

 

 

 

 

 

 

 

Operating income

 

55,948

 

62,502

 

118,450

 

Interest and other, net

 

3,380

 

4,144

 

7,524

 

Income from cont. operations, pre-tax

 

59,328

 

66,646

 

125,974

 

 

 

 

 

 

 

 

 

Income taxes

 

21,682

 

23,418

 

45,100

 

Losses in equity interest

 

(1,241

)

(2,284

)

(3,525

)

Income from continuing operations

 

36,405

 

40,944

 

77,349

 

 

 

 

 

 

 

 

 

Income (loss) from disc. operations, net of tax

 

5,857

 

(1,327

)

4,530

 

 

 

 

 

 

 

 

 

Net income

 

$

42,262

 

$

39,617

 

$

81,879

 

 

 

 

 

 

 

 

 

Basic earnings per share:

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.29

 

$

0.32

 

$

0.61

 

Net income

 

$

0.33

 

$

0.31

 

$

0.64

 

 

 

 

 

 

 

 

 

Diluted earnings per share:

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.28

 

$

0.31

 

$

0.59

 

Net income

 

$

0.32

 

$

0.30

 

$

0.62

 

 

 

 

 

 

 

 

 

Weighted avg. shares outstanding:

 

 

 

 

 

 

 

Basic shares

 

126,753

 

128,551

 

127,662

 

Diluted shares

 

130,619

 

132,009

 

131,390

 

(1) - See notes to financial supplement for further explanation of non-GAAP measures.

4



 

Monster Worldwide, Inc.
Selected Cash Flow and Balance Sheet Data
(unaudited, in thousands, except selected financial ratio)

 

 

Q1 2006

 

Q2 2006

 

6M 2006

 

Selected Cash Flow Data:provided by (used for)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization of intangible assets

 

$

10,346

 

$

11,886

 

$

22,232

 

 

 

 

 

 

 

 

 

Capital expenditures

 

(10,148

)

(16,127

)

(26,275

)

Change in marketable securities, net

 

(96,989

)

(202,236

)

(299,225

)

Payments for acquisitions and intangible assets, net of cash acquired

 

(23,655

)

(24,312

)

(47,967

)

Cash funded to equity investee

 

—

 

(4,800

)

(4,800

)

Net proceeds from sale of businesses

 

—

 

32,950

 

32,950

 

Investment in unconsolidated affiliate

 

(19,936

)

—

 

(19,936

)

 

 

 

 

 

 

 

 

Proceeds from employee stock options

 

59,594

 

31,571

 

91,165

 

Repurchase of common stock

 

(8,537

)

(5,879

)

(14,416

)

Structured stock repurchase, net

 

(22,758

)

—

 

(22,758

)

 

 

 

 

Q4 2005

 

Q1 2006

 

Q2 2006

 

Selected Balance Sheet Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

196,597

 

$

166,035

 

$

47,059

 

 

 

 

 

 

 

 

 

Marketable securities

 

123,747

 

221,019

 

422,972

 

 

 

 

 

 

 

 

 

Deferred revenue

 

328,902

 

345,040

 

350,671

 

 

 

 

 

 

 

 

 

Debt

 

47,056

 

24,882

 

20,820

 

 

 

 

 

 

 

 

 

Selected Financial Ratio(2)

 

 

 

 

 

 

 

 — Cash and marketable securities per share

 

$

2.55

 

$

3.02

 

$

3.66

 

(2) - See notes to financial supplement for definitions and calculations of selected financial ratios.

5



 

Monster Worldwide, Inc.
Segment Information and Margin Analysis – Non-GAAP
(unaudited, in thousands)

 

 

Quarterly Data

 

YTD

 

 

 

Q1 2006

 

Q2 2006

 

6M 2006

 

Segment revenue:

 

 

 

 

 

 

 

Monster Careers – North America

 

$

159,998

 

$

162,816

 

$

322,814

 

Monster Careers – International

 

64,591

 

74,374

 

138,965

 

Monster Careers revenue

 

$

224,589

 

$

237,190

 

$

461,779

 

 

 

 

 

 

 

 

 

Internet Advertising & Fees revenue

 

32,447

 

37,979

 

70,426

 

 

 

 

 

 

 

 

 

Total Monster revenue

 

$

257,036

 

$

275,169

 

$

532,205

 

 

 

 

 

 

 

 

 

Advertising & Communications

 

$

19,917

 

$

20,631

 

$

40,548

 

 

 

 

 

 

 

 

 

Segment OIBDA(1):

 

 

 

 

 

 

 

Monster Careers – North America

 

$

59,058

 

$

61,534

 

$

120,592

 

Monster Careers – International

 

4,944

 

7,121

 

12,065

 

Monster Careers OIBDA (1)

 

$

64,002

 

$

68,655

 

$

132,657

 

 

 

 

 

 

 

 

 

Internet Advertising & Fees OIBDA(1)

 

11,685

 

14,263

 

25,948

 

 

 

 

 

 

 

 

 

Total Monster OIBDA(1)

 

$

75,687

 

$

82,918

 

$

158,605

 

 

 

 

 

 

 

 

 

Advertising & Communications OIBDA (1)

 

$

2,729

 

$

3,765

 

$

6,494

 

 

 

 

 

 

 

 

 

Corporate expenses before D&A(1)

 

$

(10,054

)

$

(8,757

)

$

(18,811

)

 

 

 

 

 

 

 

 

Segment operating income (loss):

 

 

 

 

 

 

 

Monster Careers – North America

 

$

55,200

 

$

56,039

 

$

111,239

 

Monster Careers – International

 

1,110

 

2,191

 

3,301

 

Monster Careers operating income

 

$

56,310

 

$

58,230

 

$

114,540

 

 

 

 

 

 

 

 

 

Internet Advertising & Fees operating income

 

9,608

 

12,637

 

22,245

 

 

 

 

 

 

 

 

 

Total Monster operating income

 

$

65,918

 

$

70,867

 

$

136,785

 

 

 

 

 

 

 

 

 

Advertising & Communications

 

$

1,698

 

$

2,486

 

$

4,184

 

 

 

 

 

 

 

 

 

Corporate expenses

 

$

(11,668

)

$

(10,851

)

$

(22,519

)

 

 

 

 

 

 

 

 

Margin Analysis:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Monster Careers – North America OIBDA margin

 

36.9

%

37.8

%

37.4

%

Monster Careers – North America operating margin

 

34.5

%

34.4

%

34.5

%

Monster Careers – International OIBDA margin

 

7.7

%

9.6

%

8.7

%

Monster Careers – International operating margin

 

1.7

%

2.9

%

2.4

%

Internet Advertising & Fees OIBDA margin

 

36.0

%

37.6

%

36.8

%

Internet Advertising & Fees operating margin

 

29.6

%

33.3

%

31.6

%

Monster OIBDA margin

 

29.4

%

30.1

%

29.8

%

Monster operating margin

 

25.6

%

25.8

%

25.7

%

Consolidated OIBDA margin

 

24.7

%

26.3

%

25.5

%

Consolidated operating margin

 

20.2

%

21.1

%

20.7

%

(1) - See notes to financial supplement for further explanation of non-GAAP measures.

6



 

Monster Worldwide, Inc.
Geographic Information and Employee Data – Non-GAAP
(unaudited, in thousands)

 

 

Quarterly Data

 

YTD

 

 

 

Q1 2006

 

Q2 2006

 

6M 2006

 

 

 

 

 

 

 

 

 

Consolidated revenue by geographic region:

 

 

 

 

 

 

 

North America

 

$

212,362

 

$

221,426

 

$

433,788

 

International

 

64,591

 

74,374

 

138,965

 

Consolidated revenue

 

$

276,953

 

$

295,800

 

$

572,753

 

 

 

 

 

 

 

 

 

Consolidated OIBDA by geographic region:

 

 

 

 

 

 

 

North America

 

$

73,472

 

$

79,562

 

$

153,034

 

International

 

4,944

 

7,121

 

12,065

 

Corporate

 

(10,054

)

(8,757

)

(18,811

)

Consolidated OIBDA (1)

 

$

68,362

 

$

77,926

 

$

146,288

 

 

 

 

 

 

 

 

 

Consolidated operating income (loss) by geographic region:

 

 

 

 

 

 

 

North America

 

$

66,506

 

$

71,162

 

$

137,668

 

International

 

1,110

 

2,191

 

3,301

 

Corporate

 

(11,668

)

(10,851

)

(22,519

)

Consolidated operating income

 

$

55,948

 

$

62,502

 

$

118,450

 

 

 

 

 

 

 

 

 

Employee Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global employees (ones)

 

4,357

 

4,792

 

4,792

 

Annualized revenue per average employee

 

$

261.2

 

$

258.7

 

$

258.7

 

(1) - See notes to financial supplement for further explanation of non-GAAP measures.

7



 

Monster Worldwide, Inc.
Statements of Operations – Non GAAP
(unaudited)

 

 

 

 

 

 

 

 

Quarterly Data

 

YTD

 

Summary P&L Information

 

Q1 2006

 

Q2 2006

 

6M 2006

 

Monster

 

92.8

%

93.0

%

92.9

%

Advertising & Communications

 

7.2

%

7.0

%

7.1

%

Revenue

 

100.0

%

100.0

%

100.0

%

 

 

 

 

 

 

 

 

Salary and related

 

36.8

%

36.6

%

36.7

%

Office and general

 

14.7

%

12.2

%

13.4

%

Marketing and promotion

 

23.8

%

24.8

%

24.3

%

OIBDA (1)

 

24.7

%

26.3

%

25.5

%

 

 

 

 

 

 

 

 

Depreciation expense

 

2.8

%

3.1

%

3.0

%

Amortization of stock based compensation

 

0.7

%

1.2

%

1.0

%

Amortization of intangibles

 

1.0

%

0.9

%

0.9

%

Operating expenses

 

79.8

%

78.9

%

79.3

%

 

 

 

 

 

 

 

 

Operating income

 

20.2

%

21.1

%

20.7

%

Interest and other, net

 

1.2

%

1.4

%

1.3

%

Income from cont. operations, pre-tax

 

21.4

%

22.5

%

22.0

%

 

 

 

 

 

 

 

 

Income taxes

 

7.8

%

7.9

%

7.9

%

Losses in equity interest

 

-0.4

%

-0.8

%

-0.6

%

Income from continuing operations

 

13.1

%

13.8

%

13.5

%

 

 

 

 

 

 

 

 

Income (loss) from disc. operations, net of tax

 

2.1

%

-0.4

%

0.8

%

 

 

 

 

 

 

 

 

Net income

 

15.3

%

13.4

%

14.3

%

 

 

8