EX-99.2 3 a06-22602_1ex99d2.htm EX-99

Exhibit 99.2

 

FINANCIAL SUPPLEMENT

SEPTEMBER 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 business in North America.

On August 31, 2006, we sold our TMP Worldwide Advertising & Communications business in North America.  As a result of this transaction, the Company has completed the global divestiture of its recruitment advertising business and will no longer report an Advertising & Communications operating segment.  Accordingly, we have reclassified our quarterly financial information to reflect the disposition 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

Update to Historical Stock Options Grant Review

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 financial

2



 

results for the 2005 periods, and is providing only selected cash flow and balance sheet data for 2006.

As previously disclosed, a committee of independent members of the Board of Directors, (the “Special Committee”) with assistance of outside legal counsel, has been conducting an internal review and analysis of all stock options previously issued by Monster Worldwide.  Although the Special Committee has not yet completed its review, the Company anticipates that a conclusion of the investigation will indicate that the exercise price of a substantial number of stock option grants during the period under review differed from the fair market value of the underlying shares on the recorded measurement date.  The Company is still conducting its accounting analysis and has not yet determined the impact of these differences on the Company’s historical financial statements.  However, the Company expects that it will restate its previously filed financial statements for the years 1997 through 2005.  The Company believes that the anticipated restatements will not have a material impact on 2006 earnings.

Accordingly, the Company’s Board of Directors concluded that the Company’s previously issued financial statements and other historical financial information and related disclosures relating to periods through December 31, 2005 contained in the Company’s filings with the Securities and Exchange Commission, including applicable reports of its independent registered public accounting firm and press releases, should not be relied upon. Additionally, a NASDAQ Listing Qualifications Panel has granted the Company’s request for continued listing of the Company’s securities on The NASDAQ Stock Market.  Monster Worldwide’s continued listing is subject to certain conditions, including: (1) on or before December 13, 2006, the Company must file its Form 10-Q for the quarter ended June 30, 2006, as well as any necessary restatements; and (2) on or about November 3, 2006, the Company must submit to NASDAQ additional information regarding the Company’s independent review of its historical stock option practices and related accounting.

 

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

 

Q3 2006

 

9M 2006

 

 

 

 

 

 

 

 

 

 

 

Monster Careers

 

$

224,589

 

$

237,190

 

$

244,292

 

$

706,071

 

Internet Advertising & Fees

 

32,447

 

37,979

 

41,563

 

111,989

 

Revenue

 

257,036

 

275,169

 

285,855

 

818,060

 

 

 

 

 

 

 

 

 

 

 

Salaries and related

 

89,524

 

95,439

 

103,895

 

288,858

 

Office and general

 

36,973

 

32,672

 

42,025

 

111,670

 

Marketing and promotion

 

65,799

 

73,212

 

68,077

 

207,088

 

OIBDA(1)

 

64,740

 

73,846

 

71,858

 

210,444

 

 

 

 

 

 

 

 

 

 

 

Depreciation expense

 

7,097

 

8,586

 

7,323

 

23,006

 

Amortization of stock based compensation

 

2,029

 

3,423

 

2,943

 

8,395

 

Amortization of intangibles

 

2,675

 

2,569

 

1,765

 

7,009

 

Operating expenses

 

204,097

 

215,901

 

226,028

 

646,026

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

52,939

 

59,268

 

59,827

 

172,034

 

Interest and other, net

 

3,130

 

3,940

 

5,012

 

12,082

 

Income from cont. operations, pre-tax

 

56,069

 

63,208

 

64,839

 

184,116

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

20,411

 

22,077

 

22,692

 

65,180

 

Losses in equity interest

 

(1,241

)

(2,284

)

(2,054

)

(5,579

)

Income from continuing operations

 

34,417

 

38,847

 

40,093

 

113,357

 

 

 

 

 

 

 

 

 

 

 

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

 

7,845

 

770

 

(123,910

)

(115,295

)

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

42,262

 

$

39,617

 

$

(83,817

)

$

(1,938

)

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per share:

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.27

 

$

0.30

 

$

0.31

 

$

0.89

 

Net income (loss)

 

$

0.33

 

$

0.31

 

$

(0.65

)

$

(0.02

)

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per share:

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.26

 

$

0.29

 

$

0.31

 

$

0.86

 

Net income (loss)

 

$

0.32

 

$

0.30

 

$

(0.64

)

$

(0.01

)

 

 

 

 

 

 

 

 

 

 

Weighted avg. shares outstanding:

 

 

 

 

 

 

 

 

 

Basic shares

 

126,753

 

128,551

 

128,484

 

127,938

 

Diluted shares

 

130,619

 

132,009

 

130,827

 

131,224

 

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



 

Monster Worldwide, Inc.

Selected Cash Flow and Balance Sheet Data

(unaudited, in thousands, except selected financial ratio)

 

 

 

Q1 2006

 

Q2 2006

 

Q3 2006

 

9M 2006

 

Selected Cash Flow Data:  provided by (used for)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization of intangible assets

 

$

9,772

 

$

11,155

 

$

9,088

 

$

30,015

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

(9,416

)

(16,127

)

(12,825

)

(38,368

)

Change in marketable securities, net

 

(96,989

)

(202,236

)

(83,313

)

(382,538

)

Payments for acquisitions and intangible assets, net of cash acquired

 

(23,655

)

(24,312

)

(631

)

(48,598

)

Cash funded to equity investee

 

—

 

(4,800

)

(2,400

)

(7,200

)

Net proceeds from sale of businesses

 

—

 

32,950

 

36,205

 

69,155

 

Investment in unconsolidated affiliate

 

(19,936

)

—

 

—

 

(19,936

)

 

 

 

 

 

 

 

 

 

 

Proceeds from employee stock options

 

59,594

 

31,571

 

60

 

91,225

 

Repurchase of common stock

 

(8,537

)

(5,879

)

—

 

(14,416

)

Structured stock repurchase, net

 

(22,758

)

—

 

—

 

(22,758

)

 

 

 

 

 

 

 

 

 

 

 

 

Q4 2005

 

Q1 2006

 

Q2 2006

 

Q3 2006

 

Selected Balance Sheet Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

196,597

 

$

166,035

 

$

47,059

 

$

62,788

 

 

 

 

 

 

 

 

 

 

 

Marketable securities

 

123,747

 

221,019

 

422,972

 

506,285

 

 

 

 

 

 

 

 

 

 

 

Deferred revenue

 

327,429

 

343,329

 

349,034

 

346,706

 

 

 

 

 

 

 

 

 

 

 

Debt

 

47,056

 

24,882

 

20,820

 

20,659

 

 

 

 

 

 

 

 

 

 

 

Selected Financial Ratio(2)

 

 

 

 

 

 

 

 

 

 - Cash and marketable securities per share

 

$

2.55

 

$

3.02

 

$

3.66

 

$

4.43

 

(2)             - 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)

 

 

Quarterly Data

 

YTD

 

 

 

Q1 2006

 

Q2 2006

 

Q3 2006

 

9M 2006

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment revenue:

 

 

 

 

 

 

 

 

 

Monster Careers - North America

 

$

159,998

 

$

162,816

 

$

166,910

 

$

489,724

 

Monster Careers - International

 

64,591

 

74,374

 

77,382

 

216,347

 

Monster Careers revenue

 

224,589

 

237,190

 

244,292

 

706,071

 

 

 

 

 

 

 

 

 

 

 

Internet Advertising & Fees revenue

 

32,447

 

37,979

 

41,563

 

111,989

 

 

 

 

 

 

 

 

 

 

 

Total Monster revenue

 

$

257,036

 

$

275,169

 

$

285,855

 

$

818,060

 

 

 

 

 

 

 

 

 

 

 

Segment OIBDA(1):

 

 

 

 

 

 

 

 

 

Monster Careers - North America

 

$

58,652

 

$

61,337

 

$

62,114

 

$

182,103

 

Monster Careers - International

 

4,724

 

7,064

 

8,248

 

20,036

 

Monster Careers OIBDA(1)

 

63,376

 

68,401

 

70,362

 

202,139

 

 

 

 

 

 

 

 

 

 

 

Internet Advertising & Fees OIBDA(1)

 

11,608

 

14,235

 

13,504

 

39,347

 

 

 

 

 

 

 

 

 

 

 

Total Monster OIBDA(1)

 

$

74,984

 

$

82,636

 

$

83,866

 

$

241,486

 

 

 

 

 

 

 

 

 

 

 

Corporate expenses before D&A(1)

 

$

(10,244

)

$

(8,790

)

$

(12,008

)

$

(31,042

)

 

 

 

 

 

 

 

 

 

 

Segment operating income (loss):(1)

 

 

 

 

 

 

 

 

 

Monster Careers - North America

 

$

54,559

 

$

55,597

 

$

57,193

 

$

167,349

 

Monster Careers - International

 

765

 

2,003

 

4,997

 

7,765

 

Monster Careers operating income

 

55,324

 

57,600

 

62,190

 

175,114

 

 

 

 

 

 

 

 

 

 

 

Internet Advertising & Fees operating income

 

9,486

 

12,563

 

11,843

 

33,892

 

 

 

 

 

 

 

 

 

 

 

Total Monster operating income

 

$

64,810

 

$

70,163

 

$

74,033

 

$

209,006

 

 

 

 

 

 

 

 

 

 

 

Corporate expenses

 

$

(11,871

)

$

(10,895

)

$

(14,206

)

$

(36,972

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Margin Analysis:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Monster Careers - North America OIBDA margin

 

36.7

%

37.7

%

37.2

%

37.2

%

Monster Careers - North America operating margin

 

34.1

%

34.1

%

34.3

%

34.2

%

Monster Careers - International OIBDA margin

 

7.3

%

9.5

%

10.7

%

9.3

%

Monster Careers - International operating margin

 

1.2

%

2.7

%

6.5

%

3.6

%

Internet Advertising & Fees OIBDA margin

 

35.8

%

37.5

%

32.5

%

35.1

%

Internet Advertising & Fees operating margin

 

29.2

%

33.1

%

28.5

%

30.3

%

Monster OIBDA margin

 

29.2

%

30.0

%

29.3

%

29.5

%

Monster operating margin

 

25.2

%

25.5

%

25.9

%

25.5

%

Consolidated OIBDA margin

 

25.2

%

26.8

%

25.1

%

25.7

%

Consolidated operating margin

 

20.6

%

21.5

%

20.9

%

21.0

%

 

 

 

 

 

 

 

 

 

 

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



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

 

 

 

Quarterly Data

 

YTD

 

 

 

Q1 2006

 

Q2 2006

 

Q3 2006

 

9M 2006

 

 

 

 

 

 

 

 

 

 

 

Consolidated revenue by geographic region:

 

 

 

 

 

 

 

 

 

North America

 

$

192,445

 

$

200,795

 

$

208,473

 

$

601,713

 

International

 

64,591

 

74,374

 

77,382

 

216,347

 

Consolidated revenue

 

$

257,036

 

$

275,169

 

$

285,855

 

$

818,060

 

 

 

 

 

 

 

 

 

 

 

Consolidated OIBDA by geographic region:

 

 

 

 

 

 

 

 

 

North America

 

$

70,260

 

$

75,572

 

$

75,618

 

$

221,450

 

International

 

4,724

 

7,064

 

8,248

 

20,036

 

Corporate

 

(10,244

)

(8,790

)

(12,008

)

(31,042

)

Consolidated OIBDA (1)

 

$

64,740

 

$

73,846

 

$

71,858

 

$

210,444

 

 

 

 

 

 

 

 

 

 

 

Consolidated operating income (loss) by geographic region:

 

 

 

 

 

 

 

 

 

North America

 

$

64,045

 

$

68,160

 

$

69,036

 

$

201,241

 

International

 

765

 

2,003

 

4,997

 

7,765

 

Corporate

 

(11,871

)

(10,895

)

(14,206

)

(36,972

)

Consolidated operating income

 

$

52,939

 

$

59,268

 

$

59,827

 

$

172,034

 

 

 

 

 

 

 

 

 

 

 

Employee Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global employees (ones)

 

3,785

 

4,214

 

4,632

 

4,632

 

Annualized revenue per average employee

 

$

281.1

 

$

275.2

 

$

258.5

 

$

258.5

 

 

 

 

 

 

 

 

 

 

 

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



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

 

 

Quarterly Data

 

YTD

 

 

 

Q1 2006

 

Q2 2006

 

Q3 2006

 

9M 2006

 

 

 

 

 

 

 

 

 

 

 

Summary P&L Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Monster Careers

 

87.4

%

86.2

%

85.5

%

86.3

%

Internet Advertising & Fees

 

12.6

%

13.8

%

14.5

%

13.7

%

Revenue

 

100.0

%

100.0

%

100.0

%

100.0

%

 

 

 

 

 

 

 

 

 

 

Salary and related

 

34.8

%

34.7

%

36.3

%

35.3

%

Office and general

 

14.4

%

11.9

%

14.7

%

13.7

%

Marketing and promotion

 

25.6

%

26.6

%

23.8

%

25.3

%

OIBDA(1)

 

25.2

%

26.8

%

25.1

%

25.7

%

 

 

 

 

 

 

 

 

 

 

Depreciation expense

 

2.8

%

3.1

%

2.6

%

2.8

%

Amortization of stock based compensation

 

0.8

%

1.2

%

1.0

%

1.0

%

Amortization of intangibles

 

1.0

%

0.9

%

0.6

%

0.9

%

Operating expenses

 

79.4

%

78.5

%

79.1

%

79.0

%

 

 

 

 

 

 

 

 

 

 

Operating income

 

20.6

%

21.5

%

20.9

%

21.0

%

Interest and other, net

 

1.2

%

1.4

%

1.8

%

1.5

%

Income from cont. operations, pre-tax

 

21.8

%

23.0

%

22.7

%

22.5

%

 

 

 

 

 

 

 

 

 

 

Income taxes

 

7.9

%

8.0

%

7.9

%

8.0

%

Losses in equity interest

 

-0.5

%

-0.8

%

-0.7

%

-0.7

%

Income from continuing operations

 

13.4

%

14.1

%

14.0

%

13.9

%

 

 

 

 

 

 

 

 

 

 

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

 

3.1

%

0.3

%

-43.3

%

-14.1

%

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

16.4

%

14.4

%

-29.3

%

-0.2

%