EX-99.2 3 c76473exv99w2.htm EXHIBIT 99.2 Filed by Bowne Pure Compliance
Exhibit 99.2
(MONSTER WORLDWIDE LOGO)
FINANCIAL SUPPLEMENT
September 30, 2008
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 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.

 

 


 

(MOSNTER WORLDWIDE LOGO)
Notes to Financial Supplement
Presentation
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.
Stock Option Investigation
On June 12, 2006, we announced that a committee of independent directors of the Board of Directors (the “Special Committee”) assisted by independent legal counsel and outside accounting experts were conducting an independent investigation to review our historical stock option grant practices. On December 13, 2006, we restated our historical financial statements to record additional non-cash stock based compensation charges and the related income tax effects based on the findings of the Special Committee. We recorded these non-cash compensation charges as a component of “Corporate expenses” and did not allocate these non-cash costs to our reportable segments. No such amounts were recorded beyond the 2005 periods, as we accelerated the vesting of all unvested outstanding stock options as of December 31, 2005 to mitigate compensation expense we would have had to record upon the effectiveness of SFAS 123R . The restatement did not affect our statements of operations or segment results for periods subsequent to December 31, 2005.
Provision for Legal Settlements, net
On July 30, 2008, Monster entered into a Memorandum of Understanding (“MOU”) with the class representative and the individual defendants in the shareholder securities class action that memorializes the terms pursuant to which the parties intend, subject to Court approval, to settle the securities class action. As full settlement of the claims asserted in the securities class action, the MOU provides for a payment to the class of $47.5 million the cost of which to the Company will be approximately $25.1 million net of its insurance recovery and a payment by 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 Monster’s historical stock option grant practices. On October 2, 2008, the Supreme Court of the State of New York, New York County, granted final approval of the settlement agreement.

 

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Professional Fees
For the three and nine months ended September 30, 2008, we recorded $3.9 million and $11.1 million, respectively, of professional fees as a direct result of ongoing matters relating to our historical stock option grant practices. In addition, approximately $2.6 million and $17.7 million of professional fees related to our historical stock option grant practices were included in three and nine months ended September 30, 2007, respectively. 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.
We expect to continue to incur significant professional fees related to ongoing matters relating to our historical stock option grant practices. While we cannot quantify or estimate the timing of these costs throughout 2008, we expect to continue to incur significant professional fees related to legal fees paid on behalf of former employees and former members of senior management in connection with ongoing matters relating to our historical stock option grant practices.
Executive Severance
Included in our operating results for the year ended December 31, 2007, is approximately $15.8 million of severance charges related to executive officers who departed the Company in the second quarter of 2007. Of the $15.8 million, approximately $12.8 million is non-cash and relates to the acceleration of equity awards. The severance is recorded as component of “salaries and related” and the acceleration of equity awards is recorded as a component of “amortization of restricted stock and RSU’s” in our Financial Supplement.
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, through 2008. Subsequent to the announcement of this plan, the Company made a strategic decision to in-source customer service and therefore the current reduction will be 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 is 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.
For the three and nine months ended September 30, 2008, we recorded $3.6 million and $13.3 million of restructuring costs, primarily related to severance. We recorded $11.2 million of restructuring costs for the three and nine months ended September 30, 2007.
Security Breach
In August 2007, we announced a security breach related to unauthorized access to our resume database. We have taken measures to remediate the breach and assist any affected customers. For the nine months ended September 30, 2008 and 2007, we recorded $0.5 million and $5.7 million, respectively, related to the breach.

 

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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 operating expenses, operating income, operating margin, income from continuing operations and diluted earnings per share all exclude certain pro forma adjustments including: ongoing costs associated with the stock option investigations, related litigation and potential fines or settlements; severance costs for former executive officers incurred in the second quarter of 2007; costs related to the measures taken by the Company in response to a security breach in August 2007; and the strategic restructuring actions initiated in the third quarter of 2007. The Company uses these non-GAAP measures for reviewing the ongoing results of the Company’s core business operations and in certain instances, for measuring performance under certain of the Company’s incentive compensation plans. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies.
Operating income before depreciation and amortization (“OIBDA”) is defined as income from operations before depreciation, amortization of intangible assets, amortization of stock based compensation and non-cash costs incurred in connection with the Company’s restructuring program. The Company considers OIBDA to be an important indicator of its operational strength. This measure eliminates the effects of depreciation, amortization of intangible assets, amortization of stock based compensation and non-cash restructuring costs from period to period, which the Company believes is useful to management and investors in evaluating its operating performance. OIBDA is a non-GAAP measure and may not be comparable to similarly titled measures reported by other companies.
Free cash flow is defined as cash flow from operating activities less capital expenditures. Free cash flow is considered a liquidity measure and provides useful information about the Company’s ability to generate cash after investments in property and equipment. Free cash flow reflected herein is a non-GAAP measure and may not be comparable to similarly titled measures reported by other companies. Free cash flow does not reflect the total change in the Company’s cash position for the period and should not be considered a substitute for such a measure.
Net cash and securities is defined as cash and cash equivalents plus short-term and long-term marketable securities, less total debt. The Company considers net cash and securities to be an important measure of liquidity and an indicator of its ability to meet its ongoing obligations. The Company also uses net cash and securities, among other measures, in evaluating its choices for capital deployment. Net cash and securities presented herein is a non-GAAP measure and may not be comparable to similarly titled measures used by other companies.

 

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Selected financial ratios
We have included selected financial ratios in this financial supplement in order to assist investors to further evaluate our business. Our definitions and calculations are as follows:
Annualized return on equity
Annualized return on equity measures our effectiveness and ability to generate future profitability on the earnings that we retain. In addition, the ratio is a strong indicator of how well we utilize shareholders’ investments in our business. We calculate annualized return on equity as follows:
Annualized net income / Average stockholders’ equity
Book value per share
Book value per share is a market value indicator that we utilize when analyzing our stockholders’ equity. We calculate book value per share as follows:
Stockholders’ equity / Total shares outstanding
Cash and marketable securities per share
We calculate cash and marketable securities per share as follows:
(Cash and cash equivalents + Current marketable securities + Non-current marketable securities) / Total shares outstanding
Net cash and securities
We calculate cash and marketable securities per share as follows:
(Cash and cash equivalents + available-for-sale securities, current, + available-for-sale
securities, non-current — borrowings on credit facility short-term — current portion of long-term
debt — long-term debt, less current portion)

 

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Monster Worldwide, Inc.
Statements of Operations
(unaudited, in thousands, except per share amounts)
                                                                                         
    Trended Quarterly Data     Year to Date Data  
Summary P&L Information   Q3 2006     Q4 2006     Q1 2007     Q2 2007     Q3 2007     Q4 2007     Q1 2008     Q2 2008     Q3 2008     9M 2007     9M 2008  
 
                                                                                       
Monster Careers
  $ 244,292     $ 258,260     $ 290,223     $ 291,326     $ 296,996     $ 316,877     $ 336,810     $ 320,953     $ 297,606     $ 878,545     $ 955,369  
Internet Advertising & Fees
    31,944       31,093       31,607       32,659       33,146       30,970       29,662       33,341       34,583       97,412       97,586  
 
                                                                 
Revenue
    276,236       289,353       321,830       323,985       330,142       347,847       366,472       354,294       332,189       975,957       1,052,955  
 
                                                                                       
Salary and related
    102,642       110,773       117,002       127,839       123,965       127,666       135,115       127,346       128,904       368,806       391,365  
Office and general
    41,189       48,924       58,750       51,856       57,621       56,708       61,710       61,754       57,124       168,227       180,588  
Marketing and promotion
    62,436       60,933       72,509       73,568       71,584       76,818       111,854       68,976       57,684       217,661       238,514  
Provision for legal settlements, net
                                              40,100                   40,100  
Restructuring and other special charges
                            11,155       5,442       6,927       2,732       3,592       11,155       13,251  
Depreciation expense
    6,937       7,448       7,860       9,350       10,408       10,589       10,803       12,330       13,120       27,618       36,253  
Amortization of restricted stock and RSU Plan
    2,943       2,424       4,176       17,069       2,871       3,623       5,206       8,351       7,437       24,116       20,994  
Non-cash stock option expense
                186       47       104       105       127       182       165       337       474  
Amortization of intangibles
    1,463       1,568       1,394       1,413       1,437       1,457       1,386       1,274       1,590       4,244       4,250  
 
                                                                 
Operating expenses
    217,610       232,070       261,877       281,142       279,145       282,408       333,128       323,045       269,616       822,164       925,789  
 
                                                                                       
Operating income
    58,626       57,283       59,953       42,843       50,997       65,439       33,344       31,249       62,573       153,793       127,166  
Interest and other, net(1)
    5,123       6,504       5,413       6,903       6,507       6,799       7,383       3,057       5,283       18,823       15,723  
 
                                                                 
Income from cont. operations, pre-tax
    63,749       63,787       65,366       49,746       57,504       72,238       40,727       34,306       67,856       172,616       142,889  
 
                                                                                       
Income taxes
    22,262       22,307       23,090       17,587       20,474       25,310       15,143       12,153       22,734       61,151       50,030  
Losses in equity interests, net
    (2,054 )     (1,517 )     (1,420 )     (2,966 )     (3,074 )     (838 )     (1,822 )     (3,592 )     (2,086 )     (7,460 )     (7,500 )
 
                                                                 
Income from continuing operations
    39,433       39,963       40,856       29,193       33,956       46,090       23,762       18,561       43,036       104,005       85,359  
 
                                                                                       
Income (loss) from disc.
operations, net of tax(2)(3)
    (123,250 )     (888 )     (1,374 )     (577 )     (655 )     (1,090 )     (1,171 )     12,269       (258 )     (2,606 )     10,840  
 
                                                                 
 
                                                                                       
Net income (loss)
  $ (83,817 )   $ 39,075     $ 39,482     $ 28,616     $ 33,301     $ 45,000     $ 22,591     $ 30,830     $ 42,778     $ 101,399     $ 96,199  
 
                                                                 
 
                                                                                       
Basic earnings (loss) per share:
                                                                                       
Income from continuing operations
  $ 0.31     $ 0.31     $ 0.32     $ 0.22     $ 0.26     $ 0.37     $ 0.19     $ 0.15     $ 0.36     $ 0.80     $ 0.70  
 
                                                                 
Net income (loss)
  $ (0.65 )   $ 0.30     $ 0.30     $ 0.22     $ 0.26     $ 0.36     $ 0.18     $ 0.26     $ 0.36     $ 0.78     $ 0.79  
 
                                                                 
 
                                                                                       
Diluted earnings (loss) per share:
                                                                                       
Income from continuing operations
  $ 0.30     $ 0.30     $ 0.31     $ 0.22     $ 0.26     $ 0.36     $ 0.19     $ 0.15     $ 0.36     $ 0.79     $ 0.70  
 
                                                                 
Net income (loss)
  $ (0.64 )   $ 0.30     $ 0.30     $ 0.21     $ 0.25     $ 0.36     $ 0.18     $ 0.25     $ 0.35     $ 0.77     $ 0.79  
 
                                                                 
 
                                                                                       
Weighted avg. shares outstanding:
                                                                                       
Basic shares
    128,484       128,489       129,653       130,542       129,499       125,504       122,711       120,885       120,057       129,893       121,213  
Diluted shares
    130,827       131,209       132,464       133,121       130,757       126,704       123,332       121,541       120,722       132,044       121,884  
 
                                                                                       
Global employees (ones)
    4,591       4,813       5,285       5,442       5,116       5,112       5,164       5,396       5,669       5,116       5,669  
Annualized revenue per average employee
  $ 252.2     $ 246.2     $ 255.0     $ 241.6     $ 250.2     $ 272.1     $ 285.3     $ 268.4     $ 240.2     $ 246.4     $ 259.5  
     
(1)-   Interest and other, net includes a $1.3 million gain in the fourth quarter of 2006 related to early repayment of a note associated with a disposed company.
 
(2)-   Loss from discontinued operations, net of tax in the third quarter of 2006 includes the write-off of $133.0 million of goodwill related to our former TMP Worldwide Advertising & Communications business in North America.
 
(3)-   Loss 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 2006     Q4 2006     Q1 2007     Q2 2007     Q3 2007     Q4 2007     Q1 2008     Q2 2008     Q3 2008  
 
                                                                       
Monster Careers
  $ 899,053     $ 964,331     $ 1,029,965     $ 1,084,101     $ 1,136,805     $ 1,195,422     $ 1,242,009     $ 1,271,636     $ 1,272,246  
Internet Advertising & Fees
    108,427       115,855       122,785       127,303       128,505       128,382       126,437       127,119       128,556  
 
                                                     
Revenue
    1,007,480       1,080,186       1,152,750       1,211,404       1,265,310       1,323,804       1,368,446       1,398,755       1,400,802  
 
                                                                       
Salary and related
    369,824       396,194       424,621       458,256       479,579       496,472       514,585       514,092       519,031  
Office and general
    140,597       158,728       181,079       200,719       217,151       224,935       227,895       237,793       237,296  
Marketing and promotion
    240,093       251,611       262,872       269,446       278,594       294,479       333,824       329,232       315,332  
Provision for legal settlements, net
                                              40,100       40,100  
Restructuring and other special charges
                            11,155       16,597       23,524       26,256       18,693  
Depreciation expense
    27,284       28,757       30,449       31,595       35,066       38,207       41,150       44,130       46,842  
Amortization of restricted stock and RSU Plan
    8,940       10,671       12,913       26,612       26,540       27,739       28,769       20,051       24,617  
Non-cash stock option expense
    148       148       239       233       337       442       383       518       579  
Amortization of intangibles
    8,632       7,671       6,692       5,838       5,812       5,701       5,693       5,554       5,707  
 
                                                     
Operating expenses
    795,518       853,780       918,865       992,699       1,054,234       1,104,572       1,175,823       1,217,726       1,208,197  
 
                                                                       
Operating income
    211,962       226,406       233,885       218,705       211,076       219,232       192,623       181,029       192,605  
Interest and other, net
    16,582       19,042       21,095       23,943       25,327       25,622       27,592       23,746       22,522  
 
                                                     
Income from cont. operations, pre-tax
    228,544       245,448       254,980       242,648       236,403       244,854       220,215       204,775       215,127  
 
                                                                       
Income taxes
    80,383       86,517       89,289       85,246       83,458       86,461       78,514       73,080       75,340  
Losses in equity interests, net
    (7,759 )     (7,096 )     (7,275 )     (7,957 )     (8,977 )     (8,298 )     (8,700 )     (9,326 )     (8,338 )
 
                                                     
Income from continuing operations
    140,402       151,835       158,416       149,445       143,968       150,095       133,001       122,369       131,449  
 
                                                                       
Income (loss) from disc. operations, net of tax
    (106,191 )     (114,698 )     (124,059 )     (126,089 )     (3,494 )     (3,696 )     (3,493 )     9,353       9,750  
 
                                                     
 
                                                                       
Net income
  $ 34,211     $ 37,137     $ 34,357     $ 23,356     $ 140,474     $ 146,399     $ 129,508     $ 131,722     $ 141,199  
 
                                                     
 
                                                                       
Basic earnings per share:
                                                                       
Income from continuing operations
  $ 1.11     $ 1.19     $ 1.23     $ 1.16     $ 1.11     $ 1.17     $ 1.05     $ 0.98     $ 1.07  
 
                                                     
Net income
  $ 0.27     $ 0.29     $ 0.27     $ 0.18     $ 1.08     $ 1.14     $ 1.02     $ 1.06     $ 1.15  
 
                                                     
 
                                                                       
Diluted earnings per share:
                                                                       
Income from continuing operations
  $ 1.08     $ 1.16     $ 1.20     $ 1.13     $ 1.09     $ 1.15     $ 1.04     $ 0.97     $ 1.07  
 
                                                     
Net income
  $ 0.26     $ 0.28     $ 0.26     $ 0.18     $ 1.07     $ 1.12     $ 1.01     $ 1.05     $ 1.15  
 
                                                     
 
                                                                       
Weighted avg. shares outstanding:
                                                                       
Basic shares
    127,034       128,077       128,794       129,292       129,546       128,785       127,064       124,650       122,289  
Diluted shares
    130,218       131,247       131,627       131,905       131,888       130,755       128,479       125,584       123,075  

 

 


 

Monster Worldwide, Inc.
Statements of Cash Flows
(unaudited, in thousands, except per share amounts)
                                                                                         
    Trended Quarterly Data     Year to Date Data  
    Q3 2006     Q4 2006     Q1 2007     Q2 2007     Q3 2007     Q4 2007     Q1 2008     Q2 2008     Q3 2008     9M 2007     9M 2008  
Cash flows provided by operating activities:
                                                                                       
Net income (loss)
  $ (83,817 )   $ 39,075     $ 39,482     $ 28,616     $ 33,301     $ 45,000     $ 22,591     $ 30,830     $ 42,778     $ 101,399     $ 96,199  
 
                                                                 
Adjustments to reconcile net income to cash provided by operating activities:
                                                                                       
(Income) loss from discontinued operations, net of tax
    123,250       888       1,374       577       655       1,090       1,171       (12,269 )     258       2,606       (10,840 )
Depreciation and amortization of intangibles
    8,400       9,016       9,254       10,763       11,845       12,046       12,189       13,604       14,710       31,862       40,503  
Provision for legal settlements, net
                                              40,100                   40,100  
Receipts and payments for legal settlements, net
                                                    5,700             5,700  
Provision for doubtful accounts
    1,841       2,550       2,483       2,630       3,340       4,453       3,564       3,207       4,403       8,453       11,174  
Non-cash compensation
    2,943       2,424       4,362       17,116       2,975       3,728       6,495       8,533       7,602       24,453       22,630  
Deferred income taxes
    (815 )     2,267       2,100       (7,605 )     2,808       (2,762 )     (7,319 )     (12,263 )     12,440       (2,697 )     (7,142 )
Loss (gain) on disposal of assets
                      (572 )     (2 )     3       725       1,360       924       (574 )     3,009  
Loss in equity interests and other, net
    2,056       1,521       1,420       2,966       3,074       838       1,822       3,592       2,086       7,460       7,500  
Changes in assets and liabilities, net of business combinations:
                                                                                       
Accounts receivable
    (24,072 )     (122,790 )     25,170       (4,804 )     13,699       (101,843 )     37,848       44,812       49,231       34,065       131,891  
Prepaid and other
    (14,542 )     2,465       (2 )     (4,202 )     (8,007 )     (12,766 )     1,949       17,149       2,522       (12,211 )     21,620  
Deferred revenue
    (2,328 )     97,440       5,691       2,360       (17,515 )     89,650       (2,458 )     (51,465 )     (58,644 )     (9,464 )     (112,567 )
Accounts payable, accrued expenses and other liabilities
    48,418       11,322       (8,950 )     7,163       26,536       27,091       340       (13,937 )     8,673       24,749       (4,924 )
Net cash provided by (used for) operating activities of discontinued operations
    17,516       (1,619 )     (3,385 )     (1,847 )     126       (2,344 )     (560 )     (2,569 )     (962 )     (5,106 )     (4,091 )
 
                                                                 
Total adjustments
    162,667       5,484       39,517       24,545       39,534       19,184       55,766       39,854       48,943       103,596       144,563  
 
                                                                 
Net cash provided by operating activities
    78,850       44,559       78,999       53,161       72,835       64,184       78,357       70,684       91,721       204,995       240,762  
 
                                                                 
 
                                                                                       
Cash flows provided by (used for) investing activities:
                                                                                       
Capital expenditures
    (12,492 )     (16,882 )     (21,449 )     (15,515 )     (10,596 )     (16,240 )     (20,559 )     (29,654 )     (21,011 )     (47,560 )     (71,224 )
Purchase of marketable securities
    (404,703 )     (373,959 )     (365,031 )     (317,555 )     (327,250 )     (415,025 )     (149,249 )     (7,633 )     (25,265 )     (1,009,836 )     (182,147 )
Sale and maturities of marketable securities
    321,390       342,351       311,662       277,903       446,418       478,068       414,453       21,852       66,000       1,035,983       502,305  
Payments for acquisitions and intangible assets, net of cash acquired
    (631 )     (688 )     (1,664 )     (142 )     (133 )     (610 )     (61,567 )           (64,628 )     (1,939 )     (126,195 )
Dividends received from unconsolidated investee
                                              1,011                   1,011  
Net proceeds from sale of business
    36,205                                                              
Cash funded to equity investee
    (2,400 )     (2,800 )     (2,500 )     (1,600 )     (5,900 )           (5,000 )                 (10,000 )     (5,000 )
Net cash used for investing activities of discontinued operations
    (788 )     (356 )     (163 )     (87 )     (5 )                             (255 )      
 
                                                                 
Net cash provided by (used for) investing activities
    (63,419 )     (52,334 )     (79,145 )     (56,996 )     102,534       46,193       178,078       (14,424 )     (44,904 )     (33,607 )     118,750  
 
                                                                 
 
                                                                                       
Cash flows provided by (used for) financing activities:
                                                                                       
Proceeds from borrowings on credit facility short-term
                                                    247,000             247,000  
Repurchase of common stock
          (318 )     (3,326 )     (6,716 )     (154,692 )     (97,761 )     (79,469 )     (6,858 )     (41,806 )     (164,734 )     (128,133 )
Net borrowings (payments) under capital lease obligations and other debt
    (130 )     322                   (58 )     (42 )     (80 )     (67 )     (9 )     (58 )     (156 )
Payments on acquisition debt
          440       (16,310 )     (5,552 )           (1,500 )                       (21,862 )      
Proceeds from the exercise of employee stock options
    60       1,038       43,395       10,006       651       838       418       628       110       54,052       1,156  
Excess tax benefits from (provisions for) stock-based compensation
    16       632       6,486       5,857       1,611       (155 )     (568 )     688       861       13,954       981  
 
                                                                 
Net cash provided by (used for) financing activities
    (54 )     2,114       30,245       3,595       (152,488 )     (98,620 )     (79,699 )     (5,609 )     206,156       (118,648 )     120,848  
 
                                                                 
 
                                                                                       
Effects of exchange rates on cash
    352       1,553       963       1,037       3,795       772       10,256       (1,933 )     (13,303 )     5,795       (4,980 )
 
                                                                                       
Net increase (decrease) in cash and cash equivalents
    15,729       (4,108 )     31,062       797       26,676       12,529       186,992       48,718       239,670       58,535       475,380  
Cash and cash equivalents, beginning of period
    47,059       62,788       58,680       89,742       90,539       117,215       129,744       316,736       365,454       58,680       129,744  
 
                                                                 
Cash and cash equivalents, end of period
  $ 62,788     $ 58,680     $ 89,742     $ 90,539     $ 117,215     $ 129,744     $ 316,736     $ 365,454     $ 605,124     $ 117,215     $ 605,124  
 
                                                                 
 
                                                                                       
Non — GAAP Free cash flow (1):
                                                                                       
Net cash provided by operating activities
  $ 78,850     $ 44,559     $ 78,999     $ 53,161     $ 72,835     $ 64,184     $ 78,357     $ 70,684     $ 91,721     $ 204,995     $ 240,762  
Less: Capital expenditures
    (12,492 )     (16,882 )     (21,449 )     (15,515 )     (10,596 )     (16,240 )     (20,559 )     (29,654 )     (21,011 )     (47,560 )     (71,224 )
 
                                                                 
Free cash flow
  $ 66,358     $ 27,677     $ 57,550     $ 37,646     $ 62,239     $ 47,944     $ 57,798     $ 41,030     $ 70,710     $ 157,435     $ 169,538  
 
                                                                 
     
(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 2006     Q4 2006     Q1 2007     Q2 2007     Q3 2007     Q4 2007     Q1 2008     Q2 2008     Q3 2008  
ASSETS
                                                                       
Current assets:
                                                                       
Cash and cash equivalents
  $ 62,788     $ 58,680     $ 89,742     $ 90,539     $ 117,215     $ 129,744       316,736     $ 365,454     $ 605,124  
Available-for-sale securities, current
    506,285       537,893       591,262       630,914       511,746       448,703       79,236       68,579       33,823  
Accounts receivable, net
    324,507       444,747       417,329       419,033       401,994       499,854       458,447       410,427       358,214  
Prepaid and other
    77,937       82,488       89,650       100,233       101,950       106,664       97,929       121,093       111,754  
 
                                                     
Total current assets
    971,517       1,123,808       1,187,983       1,240,719       1,132,905       1,184,965       952,348       965,553       1,108,915  
 
                                                     
 
                                                                       
Available-for-sale securities, non-current
                                        102,716       99,330       93,728  
Property and equipment, net
    88,949       97,286       110,875       117,613       117,802       123,397       138,182       149,048       152,352  
Goodwill
    570,272       589,041       590,553       595,850       614,437       615,334       702,598       690,161       707,164  
Intangibles, net
    40,390       39,320       38,191       37,012       36,804       35,351       34,308       32,696       36,694  
Investment in unconsolidated affiliates
    61,142       59,625       57,748       54,782       51,708       50,871       49,049       44,446       42,360  
Other assets
    49,156       43,232       55,540       48,360       52,513       53,162       67,218       70,475       61,761  
Non-current assets of discontinued operations
    17,878       17,491       16,925       16,233       15,461       14,730       13,959              
 
                                                     
Total assets
  $ 1,799,304     $ 1,969,803     $ 2,057,815     $ 2,110,569     $ 2,021,630     $ 2,077,810     $ 2,060,378     $ 2,051,709     $ 2,202,974  
 
                                                     
 
                                                                       
LIABILITIES AND STOCKHOLDERS’ EQUITY
                                                                       
 
                                                                       
Current liabilities:
                                                                       
Accounts payable, accrued expenses and other
  $ 350,250     $ 358,850     $ 279,032     $ 278,553     $ 298,023     $ 304,146       297,932     $ 321,077     $ 328,546  
Deferred revenue
    346,706       444,145       449,836       452,196       434,682       524,331       521,873       470,408       411,764  
Borrowings on credit facility short-term
                                                    247,000  
Current portion of long-term debt
    18,507       23,249       7,074       1,660       1,684       184       158       142       26  
 
                                                     
Total current liabilities
    715,463       826,244       735,942       732,409       734,389       828,661       819,963       791,627       987,336  
 
                                                     
 
                                                                       
Non-current income taxes payable
                84,480       89,910       94,418       111,108       116,376       119,360       115,318  
Other liabilities
    29,129       28,344       34,590       25,473       25,313       17,033       16,077       17,323       23,682  
Long-term debt, less current portion
    2,152       415       395       312       261       231       177       126       17  
Non-current liabilities of discontinued operations
    5,325       5,115       4,906       4,696       4,486       4,276       4,067              
 
                                                     
Total liabilities
    752,069       860,118       860,313       852,800       858,867       961,309       956,660       928,436       1,126,353  
 
                                                     
 
                                                                       
Common stock and class B common stock
    131       131       131       131       131       133       133       134       134  
Additional paid-in capital
    1,632,246       1,636,023       1,687,407       1,713,670       1,562,646       1,468,808       1,395,991       1,397,281       1,363,655  
Accumulated other comprehensive income
    68,034       87,632       87,708       93,096       115,813       118,387       155,830       143,264       87,460  
Retained deficit
    (653,176 )     (614,101 )     (577,744 )     (549,128 )     (515,827 )     (470,827 )     (448,236 )     (417,406 )     (374,628 )
 
                                                     
Total stockholders’ equity
    1,047,235       1,109,685       1,197,502       1,257,769       1,162,763       1,116,501       1,103,718       1,123,273       1,076,621  
 
                                                     
 
                                                                       
Total liabilities and stockholders’ equity
  $ 1,799,304     $ 1,969,803     $ 2,057,815     $ 2,110,569     $ 2,021,630     $ 2,077,810     $ 2,060,378     $ 2,051,709     $ 2,202,974  
 
                                                     
 
                                                                       
Selected Financial Ratios(1)
                                                                       
- Annualized return on equity
    -30.9 %     14.5 %     13.7 %     9.3 %     11.0 %     15.8 %     8.1 %     11.1 %     15.6 %
- Book value per share
  $ 8.15     $ 8.63     $ 9.19     $ 9.60     $ 9.19     $ 9.02     $ 9.13     $ 9.30     $ 8.92  
- Cash and marketable securities per share
  $ 4.43     $ 4.64     $ 5.23     $ 5.51     $ 4.97     $ 4.67     $ 4.13     $ 4.42     $ 6.07  
- Net cash and securities
  $ 548,414     $ 572,909     $ 673,535     $ 719,481     $ 627,016     $ 578,032     $ 498,353     $ 533,095     $ 485,632  
     
(1) -  
See notes to financial supplement for definitions and calculations of selected financial ratios.

 

 


 

Monster Worldwide, Inc.
Segment Information and Margin Analysis — Non-GAAP
(unaudited, in thousands)
                                                                                         
    Trended Quarterly Data     Year to Date Data  
    Q3 2006     Q4 2006     Q1 2007     Q2 2007     Q3 2007     Q4 2007     Q1 2008     Q2 2008     Q3 2008     9M 2007     9M 2008  
Segment OIBDA(1):
                                                                                       
Monster Careers — North America
  $ 62,114     $ 64,984     $ 71,150     $ 60,845     $ 57,589     $ 60,410     $ 47,602     $ 67,636     $ 52,516     $ 189,584     $ 167,754  
Monster Careers — International
    8,248       13,001       12,594       17,362       12,896       29,980       16,662       40,361       39,060       42,852       96,083  
 
                                                                 
Monster Careers OIBDA (1)
    70,362       77,985       83,744       78,207       70,485       90,390       64,264       107,997       91,576       232,436       263,837  
 
                                                                                       
Internet Advertising & Fees OIBDA(1)
    11,615       11,553       7,470       7,438       5,316       3,118       792       7,508       7,425       20,224       15,725  
 
                                                                 
 
                                                                                       
Total Monster OIBDA(1)
  $ 81,977     $ 89,538     $ 91,214     $ 85,645     $ 75,801     $ 93,508     $ 65,056     $ 115,505     $ 99,001     $ 252,660     $ 279,562  
 
                                                                 
 
                                                                                       
Corporate expenses before D&A(1)
  $ (12,008 )   $ (20,815 )   $ (17,645 )   $ (14,923 )   $ (9,917 )   $ (11,032 )   $ (12,104 )   $ (61,196 )   $ (13,192 )   $ (42,485 )   $ (86,492 )
 
                                                                 
 
                                                                                       
Proforma operating income(1):
                                                                                       
Monster Careers — North America
  $ 57,193     $ 59,853     $ 65,878     $ 55,029     $ 59,430     $ 56,482     $ 42,955     $ 59,335     $ 43,771     $ 180,337     $ 146,061  
Monster Careers — International
    4,997       9,658       7,961       12,055       13,589       28,699       12,945       33,316       32,467       33,605       78,728  
 
                                                                 
Monster Careers Proforma operating income(1)
    62,190       69,511       73,839       67,084       73,019       85,181       55,900       92,651       76,238       213,942       224,789  
 
                                                                                       
Internet Advertising & Fees ProForma operating income (loss)(1)
    10,642       10,623       6,062       5,679       5,404       2,658       (609 )     4,994       4,977       17,145       9,362  
 
                                                                 
 
                                                                                       
Total Monster Proforma income(1)
  $ 72,832     $ 80,134     $ 79,901     $ 72,763     $ 78,423     $ 87,839     $ 55,291     $ 97,645     $ 81,215     $ 231,087     $ 234,151  
 
                                                                 
 
                                                                                       
Corporate Proforma expenses(1)
  $ (10,118 )   $ (9,285 )   $ (10,121 )   $ (8,778 )   $ (8,046 )   $ (12,177 )   $ (11,586 )   $ (19,308 )   $ (11,175 )   $ (26,945 )   $ (42,069 )
 
                                                                 
 
                                                                                       
Segment operating income:(1)
                                                                                       
Monster Careers — North America
  $ 57,193     $ 59,853     $ 65,878     $ 54,579     $ 51,455     $ 52,950     $ 39,701     $ 58,409     $ 43,120     $ 171,912     $ 141,230  
Monster Careers — International
    4,997       9,658       7,961       12,055       7,344       24,753       9,643       31,916       30,231       27,360       71,790  
 
                                                                 
Monster Careers operating income
    62,190       69,511       73,839       66,634       58,799       77,703       49,344       90,325       73,351       199,272       213,020  
 
                                                                                       
Internet Advertising & Fees operating income (loss)
    10,642       10,623       6,062       5,679       3,487       1,383       (1,431 )     4,656       4,726       15,228       7,951  
 
                                                                 
 
                                                                                       
Total Monster operating income
  $ 72,832     $ 80,134     $ 79,901     $ 72,313     $ 62,286     $ 79,086     $ 47,913     $ 94,981     $ 78,077     $ 214,500     $ 220,971  
 
                                                                 
 
                                                                                       
Corporate expenses
  $ (14,206 )   $ (22,851 )   $ (19,948 )   $ (29,470 )   $ (11,289 )   $ (13,647 )   $ (14,569 )   $ (63,732 )   $ (15,504 )   $ (60,707 )   $ (93,805 )
 
                                                                 
 
                                                                                       
Margin Analysis:
                                                                                       
 
                                                                                       
Monster Careers — North America OIBDA margin
    37.2 %     38.6 %     38.7 %     34.9 %     32.8 %     34.8 %     25.9 %     41.2 %     33.8 %     35.5 %     33.4 %
Monster Careers — North America Proforma operating margin
    34.3 %     35.6 %     35.8 %     31.5 %     33.9 %     32.5 %     23.4 %     36.1 %     28.2 %     33.8 %     29.0 %
Monster Careers — North America operating margin
    34.3 %     35.6 %     35.8 %     31.3 %     29.4 %     30.5 %     21.6 %     35.6 %     27.8 %     32.2 %     28.1 %
 
                                                                                       
Monster Careers — International OIBDA margin
    10.7 %     14.5 %     11.9 %     14.9 %     10.6 %     20.9 %     10.9 %     25.8 %     27.4 %     12.4 %     21.2 %
Monster Careers — International Proforma operating margin
    6.5 %     10.7 %     7.5 %     10.3 %     11.2 %     20.0 %     8.4 %     21.3 %     22.8 %     9.7 %     17.4 %
Monster Careers — International operating margin
    6.5 %     10.7 %     7.5 %     10.3 %     6.0 %     17.3 %     6.3 %     20.4 %     21.2 %     7.9 %     15.9 %
 
                                                                                       
Monster Careers OIBDA margin
    28.8 %     30.2 %     28.9 %     26.8 %     23.7 %     28.5 %     19.1 %     33.6 %     30.8 %     26.5 %     27.6 %
Monster Careers Proforma operating margin
    25.5 %     26.9 %     25.4 %     23.0 %     24.6 %     26.9 %     16.6 %     28.9 %     25.6 %     24.4 %     23.5 %
Monster Careers operating margin
    25.5 %     26.9 %     25.4 %     22.9 %     19.8 %     24.5 %     14.7 %     28.1 %     24.6 %     22.7 %     22.3 %
 
                                                                                       
Internet Advertising & Fees OIBDA margin
    36.4 %     37.2 %     23.6 %     22.8 %     16.0 %     10.1 %     2.7 %     22.5 %     21.5 %     20.8 %     16.1 %
Internet Advertising & Fees Proforma operating margin
    33.3 %     34.2 %     19.2 %     17.4 %     16.3 %     8.6 %     -2.1 %     15.0 %     14.4 %     17.6 %     9.6 %
Internet Advertising & Fees operating margin
    33.3 %     34.2 %     19.2 %     17.4 %     10.5 %     4.5 %     -4.8 %     14.0 %     13.7 %     15.6 %     8.1 %
     
(1) -  
See notes to financial supplement for further explanation of non-GAAP measures.

 

 


 

Monster Worldwide, Inc.
Statements of Operations
(unaudited)
                                                                                         
    Trended Quarterly Data     Year to Date Data  
Summary P&L Information   Q3 2006     Q4 2006     Q1 2007     Q2 2007     Q3 2007     Q4 2007     Q1 2008     Q2 2008     Q3 2008     9M 2007     9M 2008  
 
Monster Careers
    88.4 %     89.3 %     90.2 %     89.9 %     90.0 %     91.1 %     91.9 %     90.6 %     89.6 %     90.0 %     90.7 %
Internet Advertising & Fees
    11.6 %     10.7 %     9.8 %     10.1 %     10.0 %     8.9 %     8.1 %     9.4 %     10.4 %     10.0 %     9.3 %
 
                                                                 
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
    37.2 %     38.3 %     36.4 %     39.5 %     37.5 %     36.7 %     36.9 %     35.9 %     38.8 %     37.8 %     37.2 %
Office and general
    14.9 %     16.9 %     18.3 %     16.0 %     17.5 %     16.3 %     16.8 %     17.4 %     17.2 %     17.2 %     17.2 %
Marketing and promotion
    22.6 %     21.1 %     22.5 %     22.7 %     21.7 %     22.1 %     30.5 %     19.5 %     17.4 %     22.3 %     22.7 %
Provision for legal settlements, net
    0.0 %     0.0 %     0.0 %     0.0 %     0.0 %     0.0 %     0.0 %     11.3 %     0.0 %     0.0 %     3.8 %
Restructuring and other special charges
    0.0 %     0.0 %     0.0 %     0.0 %     3.4 %     1.6 %     1.9 %     0.8 %     1.1 %     1.1 %     1.3 %
Depreciation expense
    2.5 %     2.6 %     2.4 %     2.9 %     3.2 %     3.0 %     2.9 %     3.5 %     4.0 %     2.8 %     3.5 %
Amortization of restricted stock and RSU Plan
    1.1 %     0.8 %     1.3 %     5.3 %     0.9 %     1.0 %     1.4 %     2.4 %     2.2 %     2.5 %     2.0 %
Non-cash stock option expense
    0.0 %     0.0 %     0.1 %     0.0 %     0.0 %     0.0 %     0.0 %     0.1 %     0.0 %     0.0 %     0.0 %
Amortization of intangibles
    0.5 %     0.5 %     0.4 %     0.4 %     0.4 %     0.4 %     0.4 %     0.4 %     0.4 %     0.4 %     0.4 %
 
                                                                 
Operating expenses
    78.8 %     80.2 %     81.4 %     86.8 %     84.6 %     81.2 %     90.9 %     91.2 %     81.2 %     84.2 %     87.9 %
 
                                                                                       
Operating income
    21.2 %     19.8 %     18.6 %     13.2 %     15.4 %     18.8 %     9.1 %     8.8 %     18.8 %     15.8 %     12.1 %
Interest and other, net
    1.9 %     2.2 %     1.7 %     2.1 %     2.0 %     2.0 %     2.0 %     0.9 %     1.6 %     1.9 %     1.5 %
 
                                                                 
Income from cont. operations, pre-tax
    23.1 %     22.0 %     20.3 %     15.4 %     17.4 %     20.8 %     11.1 %     9.7 %     20.4 %     17.7 %     13.6 %
 
                                                                                       
Income taxes
    8.1 %     7.7 %     7.2 %     5.4 %     6.2 %     7.3 %     4.1 %     3.4 %     6.8 %     6.3 %     4.8 %
Losses in equity interests, net
    -0.7 %     -0.5 %     -0.4 %     -0.9 %     -0.9 %     -0.2 %     -0.5 %     -1.0 %     -0.6 %     -0.8 %     -0.7 %
 
                                                                 
Income from continuing operations
    14.3 %     13.8 %     12.7 %     9.0 %     10.3 %     13.3 %     6.5 %     5.2 %     13.0 %     10.7 %     8.1 %
 
                                                                                       
Income (loss) from disc. operations, net of tax
    -44.6 %     -0.3 %     -0.4 %     -0.2 %     -0.2 %     -0.3 %     -0.3 %     3.5 %     -0.1 %     -0.3 %     1.0 %
 
                                                                 
 
Net income (loss)
    -30.3 %     13.5 %     12.3 %     8.8 %     10.1 %     12.9 %     6.2 %     8.7 %     12.9 %     10.4 %     9.1 %
 
                                                                 

 

 


 

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 2006     Q4 2006     Q1 2007     Q2 2007     Q3 2007     Q4 2007     Q1 2008     Q2 2008     Q3 2008     9M 2007     9M 2008  
 
                                                                                       
OIBDA (1)
  $ 69,969     $ 68,723     $ 73,569     $ 70,722     $ 65,884     $ 82,476     $ 52,952     $ 54,309     $ 85,809     $ 210,175     $ 193,070  
 
                                                                                       
Depreciation expense
    6,937       7,448       7,860       9,350       10,408       10,589       10,803       12,330       13,120       27,618       36,253  
Amortization of restricted stock and RSU Plan
    2,943       2,424       4,176       17,069       2,871       3,623       5,206       8,351       7,437       24,116       20,994  
Non-cash stock option expense
                186       47       104       105       127       182       165       337       474  
Restructuring non-cash compensation expense
                                        1,162                         1,162  
Restructuring non-cash write-offs
                            67       1,263       924       923       924       67       2,771  
Amortization of intangibles
    1,463       1,568       1,394       1,413       1,437       1,457       1,386       1,274       1,590       4,244       4,250  
 
                                                                 
 
                                                                                       
Operating income
  $ 58,626     $ 57,283     $ 59,953     $ 42,843     $ 50,997     $ 65,439     $ 33,344     $ 31,249     $ 62,573     $ 153,793     $ 127,166  
 
                                                                 
 
                                                                                       
Proforma operating income (1)
  $ 62,714     $ 70,849     $ 69,780     $ 63,985     $ 70,377     $ 75,662     $ 43,705     $ 78,337     $ 70,040     $ 204,142     $ 192,082  
 
                                                                                       
Executive Commitments
                      15,811                                     15,811        
Provision for legal settlements, net
                                              40,100                   40,100  
Stock option investigation
    4,088       13,566       9,827       5,331       2,571       1,392       2,983       4,256       3,875       17,729       11,114  
Security breach
                            5,654       3,389       451                   5,654       451  
Restructuring non-cash compensation expense
                                        1,162                         1,162  
Restructuring program non-cash write-offs
                            67       1,263       924       923       924       67       2,771  
Restructuring expenses, less non-cash items
                            11,088       4,179       4,841       1,809       2,668       11,088       9,318  
 
                                                                 
 
                                                                                       
Operating income
  $ 58,626     $ 57,283     $ 59,953     $ 42,843     $ 50,997     $ 65,439     $ 33,344     $ 31,249     $ 62,573     $ 153,793     $ 127,166  
 
                                                                 
     
(1) -  
See notes to financial supplement for further explanation of non-GAAP measures.