WESTON,
Mass. /PRNewswire/ --
Monster Worldwide, Inc. (NYSE: MWW) today reported financial
results for the first quarter ended March 31,
2015.
"Our
first quarter profitability, cash flow and leverage metrics all
exceeded our expectations," said Tim
Yates, President and Chief Executive Officer. "The bookings
momentum we saw in our core North American Careers segment
continued from previous quarters with 6% year-over-year growth.
While we are pleased with the recent bookings trends, and expect
them to continue, revenue growth and sales execution continues to
be a primary focus. We welcome the addition of Paul
Forte, a veteran sales leader, as our new head of North
American sales. Bookings in our International segment increased 2%
on a constant currency basis. We are confident that our new
strategic products combined with our traditional core products
provide a superior competitive solution for our customers. Our
EBITDA margins expanded to 14.7% and we are confident we will
continue to improve margins going forward, and we remain on track
to achieve our 18-22% target exiting this year's fourth
quarter."
During
the quarter, we had a number of important business highlights
including:
These
initiatives are beginning to have a positive impact on our traffic
metrics, particularly on North American organic traffic.
Tim
Yates also commented: "Our actions in the first quarter
demonstrate our commitment to our previously articulated capital
allocation policies. Net debt decreased and leverage ratios
improved, partially as a result of the sale of the majority of our
interest in our break-even joint venture in Australia.
We will continue to review other non-core assets."
First Quarter
2015 Results
Revenue of $184
million decreased 7% compared to last year's first
quarter and 3% on a constant currency basis. Revenue in the first
quarter of 2014 was $198
million. Revenue from the Company's
Careers -- North
Americaoperations decreased 4% year-over-year and revenue
from Careers -- International
decreased 13% year-over-year and 1% on a constant currency basis.
Internet Advertising & Fees revenue and operating results are
now being reported within the Careers -- North
America segment. Historical quarterly revenue data is
available in the Company's supplemental financial information.
Total
GAAP operating expenses decreased to $193
million compared to $199
million in the first quarter of 2014. Net income
attributable to Monster for the first quarter of 2015
was $8
million, or $0.09 per
share, compared to net income attributable to Monster
of $2
million, or $0.02 per
share in the first quarter of 2014.
Non-GAAP net income attributable to the Company
was $7
million, or $0.08 per
share, compared to $7
million, or$0.08 per
share in the first quarter of 2014. Non-GAAP operating expenses
of $168
million decreased 8% year over year. Adjusted EBITDA
margin of 15% was led by Careers -- North
America with a 27% margin. Pro-forma items are
described in the "Notes Regarding the Use of Non-GAAP Financial
Measures" and are reconciled to the GAAP measure in the
accompanying tables.
Net
cash provided by operating activities in the quarter
was $27
million and free cash flow was $19
million. Deferred revenue grew sequentially
to $304
million or 1% compared to $301
million as of December 31,
2014. The Company ended the quarter with total available
liquidity of approximately $170
million.
Reallocate to
Accelerate
On February 10,
2015, the Company committed to implement a series of cost
savings initiatives to reduce costs globally while continuing to
support the Company's new strategy. The initiatives include a
global workforce reduction of approximately 300 associates, lease
exit costs, impairment of certain assets, and office and general
expense controls. Through March 31,
2015, approximately 200 associates in North
America and Europe have
been impacted, and the Company has incurred $20
million of charges relating to this program. These
charges have been excluded from the Company's non-GAAP financial
statements for the three months ended March 31,
2015. The Company anticipates additional charges of
approximately $3 million
to $5 million in the second and third quarters of 2015
in connection with this program.
Segment
Change
The
Company has combined certain functions to better align resources
and drive growth. As a result, the Internet Advertising & Fees
segment has been combined with the Careers -- North
America segment. More specifically, Military.com will
be managed by the Government Solutions business and Fastweb and
Monster.com's consumer advertising business will now be included in
the Company's core North American results.
Guidance
Second
quarter 2015 Non-GAAP EPS from continuing operations is expected to
be in the range of $0.07 to
$0.11, which excludes $4 million
to $5 million of stock-based
compensation, $1.2
million of non-cash debt discount amortization related
to the convertible debt and restructuring charges related to the
Reallocate to Accelerate program.
The
Company expects to exit 2015 with a fourth quarter EBITDA margin of
between 18-22%.
Historical data on Non-GAAP EPS is available in the Company's
supplemental financial information.
Conference Call
and Webcast
First
quarter 2015 results will be discussed on Monster Worldwide's
quarterly conference call on May 7,
2015 at8:30 AM
ET. A live webcast of the conference call can be accessed
online through the Investor Relations section of the Company's
website at http://ir.monster.com. To
join the conference call by telephone, please dial (888) 317-6003
or (412) 317-6061 and reference conference ID# 0430146. A
presentation of financial slides will be referenced during the
conference call and will be viewable through the live webcast. A
PDF of the financial presentation can also be accessed directly
through the Company's Investor Relations website athttp://ir.monster.com.
The
Company has also made available certain supplemental financial
information which can be accessed directly through the Company's
Investor Relations website at http://ir.monster.com.
For a
replay of the conference call, please dial (877) 344-7529 or (412)
317-0088 and reference ID# 10064152. This number is valid until
midnight on May 15,
2015.
About Monster Worldwide
Monster
Worldwide, Inc. (NYSE: MWW) is a global leader in connecting people
to jobs, wherever they are. For more than 20 years, Monster has
helped people improve their lives with better jobs, and employers
find the best talent. Today, the company offers services in more
than 40 countries, providing some of the broadest, most
sophisticated job seeking, career management, recruitment and
talent management capabilities. Monster continues its pioneering
work of transforming the recruiting industry with advanced
technology using intelligent digital, social and mobile solutions,
including our flagship website monster.com® and a vast array of
products and services. For more information visit http://monster.com/about.
Special Note: The statements in
this release that are not strictly historical, including, without
limitation, statements regarding the Company's strategic direction,
prospects and future results, constitute forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Such
forward-looking statements involve certain risks and uncertainties
and, therefore, actual results may differ materially from what is
expressed or implied herein and no assurance can be given that the
Company will achieve, among other things, its outlook with respect
to earnings per share for the second quarter 2015 and EBITDA margin
for the fourth quarter 2015. Factors that could cause results to
differ materially from those expressed or implied by such
forward-looking statements include, but are not limited to,
economic and other conditions in the markets in which we operate,
risks associated with acquisitions or dispositions, competition,
and the other risks discussed in our Form 10-K and our other
filings made with the Securities and Exchange Commission, which
discussions are incorporated into this release by reference. Many
of the factors that will determine the Company's future results are
beyond the ability of management to control or predict. Readers
should not place undue reliance on the forward-looking statements
in this release as they reflect management's views only as of the
date hereof. The Company undertakes no obligation to revise or
update any of the forward-looking statements contained in this
release or to make any other forward-looking statements, whether as
a result of new information, future events or otherwise.
Notes Regarding the Use of Non-GAAP Financial
Measures
The
Company has provided certain Non-GAAP financial information as
additional information for its operating results. These measures
are not in accordance with, or an alternative for, 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, net income, and diluted earnings per share attributable to
Monster Worldwide, Inc. all exclude certain proforma adjustments
including: non-cash stock based compensation expense; costs
incurred in connection with the Company's restructuring programs;
non-cash impairment charges; amortization of the debt discount and
deferred financing costs associated with our 3.50% convertible
senior notes due 2019; write-off of deferred financing costs
relating to our former credit facility, amended
in October
2014; income tax benefits associated with the reversal of
income tax reserves on uncertain tax positions and a tax benefit
related to certain losses arising from the Company's restructuring
programs; income tax provisions for increased valuation allowances
on deferred tax assets; gain on deconsolidation of subsidiaries and
tax provisions thereon; gain on partial sale of an equity method
investment and tax provisions thereon; and charges related to
exited facilities and acquisition related costs.
In the
first quarter of the calendar year 2015, the Company began to
utilize a fixed long-term projected non-GAAP tax rate for reporting
operating results and for planning, forecasting, and analyzing
future periods. This change provides better consistency across the
interim reporting periods by eliminating the effects of
non-recurring and period-specific items. When projecting this
long-term rate, the Company evaluated a five-year financial
projection comprising the current and the next four years that
exclude the income tax effects of the non-GAAP pre-tax adjustments
described above, eliminates the effects of non-recurring and period
specific items which can vary in size and frequency, and is
reflective of the anticipated future geographic mix of income among
tax jurisdictions. The projected rate also assumes no new
acquisitions or disposals in the five-year period, eliminates the
effect of tax valuation allowances, and takes into account other
factors including the Company's current tax structure, its existing
tax positions in various jurisdictions and key legislation in major
jurisdictions where the Company operates. The non-GAAP tax rate is
35%. The Company intends to re-evaluate this long-term rate on an
annual basis or if any significant events that may materially
affect this long-term rate occur. This long-term rate could be
subject to change for a variety of reasons, which may include (but
are not limited to) for example, significant changes in the
geographic earnings mix including future acquisition or disposition
activity, having less income than anticipated, or fundamental tax
law changes in major jurisdictions where the Company operates.
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.
Earnings before interest, taxes, depreciation and amortization
("EBITDA") is defined as operating income or loss before
depreciation and amortization, non-cash compensation expense,
non-cash impairment charges, and non-cash costs incurred in
connection with the Company's restructuring programs. Adjusted
EBITDA excludes the impact of the pro-forma adjustments discussed
above. The Company considers EBITDA and Adjusted EBITDA to be an
important indicator of its operational strength which the Company
believes is useful to management and investors in evaluating its
operating performance. EBITDA and Adjusted EBITDA are non-GAAP
measures 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 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.
MONSTER WORLDWIDE,
INC.
UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands,
except per share amounts)
Three Months Ended
March 31,
2015
2014
Revenue
$ 183,693
$ 198,149
Salaries and
related
93,746
101,999
Office and
general
46,042
55,207
Marketing and
promotion
33,161
41,413
Restructuring and other
special charges
20,222
-
Total operating
expenses
193,171
198,619
Operating
loss
(9,478)
(470)
Gain on partial sale of
equity method investment
8,849
-
Gain on deconsolidation of
subsidiaries, net
-
11,828
Interest and other,
net
(3,107)
(1,323)
(Loss) income before income
taxes and loss in equity interests
(3,736)
10,035
(Benefit from) provision for
income taxes
(13,145)
6,663
Loss in equity interests,
net
(220)
(133)
Net
income
9,189
3,239
Net income attributable to
noncontrolling interest
(1,019)
(1,174)
Net income
attributable to Monster Worldwide, Inc.
$ 8,170
$ 2,065
Basic earnings per
share attributable to Monster Worldwide, Inc.
$ 0.09
$ 0.02
Diluted earnings per
share attributable to Monster Worldwide, Inc.
$ 0.09
$ 0.02
Weighted average
shares outstanding:
Basic
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