| Symbol | Last | Change |
|---|---|---|
| MWW | 5.31 | -0.06 |
 |
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Record Billings Reported By Tmp Worldwide’s Interactive Division, Led By Monster.Com $41.4 Million Up 178% From The Third Quarter Of The Previous Year And 42% From The Second Quarter Of 1999
THREE MONTHS ENDED SEPTEMBER 30, 1999
Total Commissions & Fees
Up 17.0% to $196.5 million
Internet Commissions & Fees
Up 168.3% to $36.6 million
Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA)1
Up 47.9% to $41.1 million
Adjusted Net Income2
Up 56.1% to $16.2 million, compared to $10.4 million in the prior year3
Diluted Adjusted EPS
Up 53.8% to $0.40 compared to prior year at $0.26 and 14.3% above First Call consensus of $0.35
Diluted Weighted Average Shares Outstanding
40.8 million vs. 39.2 million for the prior year
See Endnotes
NEW YORK, November 2, 1999 -- TMP Worldwide Inc. (NASDAQ: TMPW; ASX: TMP), the leading provider of global recruitment solutions, including the dominant Internet career portal, Monster.com, and the world's largest Yellow Pages advertising agency, today announced total commissions and fees of $196.5 million for the third quarter ended September 30, 1999 compared to $167.9 million for the same period a year ago, an increase of 17.0%.
Internet commissions and fees were $36.6 million for the quarter ended September 30, 1999, up 168.3% from $13.7 million for the quarter ended September 30, 1998 and up 42.1% from $25.8 million from the second quarter of 1999. TMP's Internet operations reported an operating profit of $4.9 million for the third quarter of 1999.
Adjusted net income increased 56.1%, to $16.2 million in the third quarter of 1999 from $10.4 million in the third quarter of 1998. Diluted adjusted earnings per share increased 53.8% to $0.40 for the third quarter of 1999 from an adjusted $0.26 for the third quarter of 1998, and were $0.05 or 14.3% greater than First Call analysts' expectations.
Growth in commissions and fees, along with higher margins in Internet, Temporary Contracting, Yellow Pages and Search & Selection, contributed to a 55.5% increase in adjusted operating profit to $32.7 million and a 47.9% increase in adjusted EBITDA to $41.1 million. Adjusted operating profit as a percent of total commissions and fees was 16.7% in the third quarter of 1999, compared to 12.5% a year ago. Adjusted EBITDA as a percent of total commissions and fees was 20.9% in the third quarter of 1999, compared to 16.6% in the third quarter of 1998.
Recruitment Advertising commissions and fees increased 1.7% to $43.0 million for the third quarter of 1999 versus $42.3 million for the third quarter of 1998, resulting primarily from substantial reductions in client discounts. Yellow Page Advertising commissions and fees were $28.5 million for the third quarter of 1999 compared to $32.1 million for the prior year period, reflecting higher client discounts and reduced commissions paid by publishers. Commissions and fees for Search & Selection were $72.8 million for the third quarter of 1999 versus $66.0 million in 1998, an increase of $6.8 million or 10.4%. This increase is due primarily to substantial growth in mid-market Selection, partially offset by a decline in Executive Search due to consultant turnover, as anticipated, at LAI and TASA, which resulted from the merger and integration of these companies. Temporary Contracting commissions and fees were $15.4 million, an increase of 11.6% over $13.8 million for the third quarter of 1998, reflecting internal growth in Temporary Contracting operations in Australia and New Zealand, which resulted from continued strong demand for temporary workers in those countries.
Total commissions and fees as a percent of related billings for the quarter were 40.4% as compared to 36.3% for the third quarter of 1998. The improved percentage primarily reflects the increases in sales volume for Internet, Search & Selection and Temporary Contracting, where a greater portion of the amount billed is retained by the company.
TMP's adjusted operating profit for the third quarter of 1999 was $32.7 million, an increase of $11.7 million or 55.5% from $21.0 million for the third quarter of 1998. Such amounts are adjusted to exclude the merger and integration costs incurred in connection with poolings of interest transactions; please see endnotes.
Merger and integration costs were $34.8 million and $7.1 million for the third quarter of 1999 and 1998 respectively. Such costs include transaction costs for the mergers completed in the respective third quarters and the amortization of employee stay bonuses. In addition, for 1999, these costs also include separation pay, the accelerated vesting of employee stock grants in accordance with pre-existing contractual change in control provisions at LAI, and office and management integration costs, which include the elimination of redundant management, closing of excess leasehold facilities, and the write-off of fixed assets which will not be used in the future. The increased third quarter 1999 costs are chiefly related to the merger with LAI and were factored into the purchase price for that company.
Andrew J. McKelvey, chairman and CEO of TMP Worldwide, stated, "This quarter's results prove once again that TMP is committed to remaining the global career solution for its clients and the job seeker; the "Intern-to-CEO" strategy continues to show success. Our global network of recruitment professionals has established a ubiquitous presence on-line and off -line within the U.S. market and we will continue to grow our presence in Europe and in the Asia – Pacific region. In the present day and beyond the millenium, we know that it is in our clients' best interests to have maximum Internet exposure for their employment opportunities and it is equally important for individuals to be able to manage their careers on-line. TMP, through Monster.com and our Search & Selection and recruitment advertising businesses, is ensuring that we are there to represent both parties during every step of the recruitment process."
"With our Interactive Operations posting record – breaking growth quarter after quarter, we have demonstrated that TMP's presence on the Web is here to stay," said Jim Treacy, COO of TMP Worldwide. "The business strategy that we are executing allows for maximum growth while maintaining operational efficiency. Through Monster.com, which is clearly the first name people think of when they think "jobs on-line," TMP has been able to streamline operations, spreading capabilities across business lines and achieving cost-saving synergies throughout our enterprise," continued Mr. Treacy.
TMP's Interactive Operations, anchored by Monster.com, have been successful in building the dominant position in the on-line recruitment category worldwide. Monster.com remains first in Web traffic among all Internet job sites, surpassing its closest competitor by more than 250%. Monster.com continues to be the number one destination for career seekers on the Web. According to independent research released by Media Metrix for the month of September, each visitor spent an average of 26.1 minutes on Monster.com and 4.1% of the 63.0 million U.S. Internet users visited the site.
As competition in the on-line job search marketplace increases, Monster.com continues to lead by providing to the largest community of targeted users the best in career management and employee recruitment services. "The latest findings from Media Metrix reinforce Monster.com's position as the premier Internet careers site," said Jeff Taylor, CEO of Monster.com. "We remain dedicated to excellence as Monster.com continues to expand its leadership as the destination site that job seekers visit in order to connect with innovative companies of all types and sizes."
When TMP launched Monster.com's national advertising campaign during the Super Bowl this year, traffic to the site increased by 450% during the 24-hour period after the game compared to the 24-hour period two weeks prior to the game, and continued to increase thereafter. Monster.com is on the road again to Super Bowl 2000, where it will air two 30-second commercials, one each in the first and fourth quarters of the game. The spots are part of the company's aggressive on- and off-line marketing campaign for 2000, targeted at $100 million.
"We're blazing a trail where dot com companies have never gone before by advocating for job seekers' career success." said Jeff Taylor, CEO of Monster.com. "Our second Super Bowl spots are just the start. We're building on a monstrous branding year."
"In today's competitive Internet market, the only way to take market share from your competitors is to continue to be the first to reach the customer. We at TMP recognize this and have made a commitment to marketing ourselves through all the channels available to us," said Mr. McKelvey. "As we expand our global "Intern-to-CEO" strategy, it is imperative that we continue to develop our recruitment capabilities at all levels and through all channels. We have achieved our role as the leader in Web-based recruiting through Monster.com by providing excellent service and technical expertise on and off the World Wide Web. Our recruitment advertising client roster is second to none and will remain strong; through our expanding search business we have developed valuable new client contacts and the success of our Internet services has demonstrated our ability to use all of these channels to find for our clients the right candidates at all levels, from "Intern-to-CEO." As we continue to expand organically and through acquisitions, we demonstrate that our global recruitment network is by far the best choice for both the employer and the job seeker," continued Mr. McKelvey.
Nine-Month Performance
The financial information below includes the retroactively restated effects of the results of operations for companies acquired using the pooling of interests method of accounting. Included in this retroactively restated information are the results of LAI, which merged with the company on August 26, 1999 and incurred a loss of $16.8 million or $0.43 per diluted TMP share for the six months ended June 30, 1999.
NINE MONTHS ENDED SEPTEMBER 30, 1999
Total Commissions & Fees
Up 12.4% to $539.5 million
Internet Commissions & Fees
Up 153.8% to $83.0 million
Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA)1
Down 3.9% to $74.2 million
Adjusted Net Income2
Down 17.7% to $23.6 million vs. $28.6 million in the prior year3
Diluted Adjusted EPS
Down 20.5% to $0.58 vs. prior year at $0.73
Diluted Weighted Average Shares Outstanding
40.5 million vs. 39.0 million for the prior year
See Endnotes
TMP reported total commissions and fees of $539.5 million for the nine months ended September 30, 1999, compared to $479.9 million for the year-earlier period, an increase of 12.4%. Internet commissions and fees increased 153.8% to $83.0 million for the nine months ended September 30, 1999, from $32.7 million for the nine months ended September 30, 1998.
Recruitment Advertising commissions and fees were $134.9 million for the nine months ended September 30, 1999, compared to $133.9 million in 1998. Yellow Page Advertising commissions and fees were $79.5 million for the first nine months of 1999, versus $82.5 million for the same period in 1998. Commissions and fees for the company's Search & Selection division for the first nine months of 1999 remained virtually flat at $197.3 million compared to $197.8 million for the comparable period a year ago.
Excluding poolings of interests related merger and integration costs of $46.3 million in 1999 and $9.6 million in 1998 and restructuring charges at LAI of $2.8 million incurred in 1999, the company reported adjusted operating income of $49.5 million for the first nine months of 1999 compared to $56.6 million for the nine months ended September 30, 1998. The decrease in adjusted operating profit is due primarily to losses at LAI for the six months ended June 30, 1999, which preceded its merger with TMP.
Adjusted EBITDA for the nine months ended September 30, 1999 was $74.2 million versus $77.2 million for the same period a year ago, a decrease of 3.9%, due primarily to losses at LAI for the six months ended June 30, 1999, which preceded its merger with TMP.
Adjusted net income was $23.6 million for the nine months ended September 30, 1999 compared to $28.6 million a year ago. Diluted adjusted earnings per share was $0.58 for the nine months ended September 30, 1999 as compared with $0.73 for the same period in 1998. The decrease in adjusted net income and diluted adjusted earnings per share are due primarily to losses at LAI for the six months ended June 30, 1999, which preceded its merger with TMP.
"We were aware of LAI's past difficulties and their financial situation when we acquired the company. However, the synergies with TMP's Global Executive Search practice were great. We knew that by joining TMP's and LAI's operations we would greatly strengthen our global executive search infrastructure, further solidifying our position as one of the world's leading executive search firms," said Mr. McKelvey. "With 19 offices around the U.S., LAI has given us a strong domestic presence that complements our already strong presence overseas. With so many foreign-based open positions controlled by U.S. companies, a large presence in the U.S. adds substantial new business opportunities to our overseas offices," continued Mr. McKelvey.
###
Special Note
The above statements include forward-looking statements based on current management expectations. Factors that could cause future results to differ from these expectations include: risks associated with acquisitions, competition and seasonality. Additional factors are described in the company's reports filed with the Securities and Exchange Commission.
Founded in 1967, TMP Worldwide, now with more than 6,600 employees in 25 countries, is the on-line recruitment leader, the world's largest recruitment advertising agency network, and one of the world's largest search and selection agencies. TMP Worldwide, headquartered in New York, is also the world's largest yellow page advertising agency and a provider of direct marketing services. The company's clients include more than 80 of the Fortune 100 and more than 400 of the Fortune 500 companies.
Monster.com www.monster.com)%3C/a%3E,%20the%20flagship%20product%20of%20the%20Interactive%0D%0ADivision%20of%20TMP%0D%0AWorldwide,%20is%20the%20leading,%20global%20on-line%20network%20for%20careers,%20connecting%0D%0Athe%20most%0D%0Aprogressive%20companies%20with%20the%20most%20qualified%20career-m%20" com>www.monster.com or by calling 1-800-MONSTER.
A condensed consolidated statement of operations for the third quarter and the nine months ended September 30, 1999 for TMP Worldwide Inc. and subsidiaries follows. For an investment kit, please contact James J. Treacy at (212) 527-8604 or visit www.tmpw.com
Endnotes
1EBITDA is adjusted to exclude the effects of restructuring charges at LAI for the nine months ended September 30, 1999 and pooling of interests related merger & integration costs, which in the aggregate were $32.8 million and $45.2 million for the three months and nine months ended September 30, 1999, respectively, and $5.8 million and $7.5 million for the three months and nine months ended September 30, 1998, respectively. For the three months and nine months ended September 30, 1999 and for the three months and nine months ended September 30, 1998, such excluded costs have been reduced by $2.0 million, $3.9 million, $1.3 million and $2.1 million, respectively, for amortization of employee stay bonuses because such amounts are already considered in the calculation of EBITDA before the adjustment.
2Net income is adjusted to exclude the after-tax effects of restructuring charges at LAI for the nine months ended September 30, 1999 and pooling of interests related merger & integration costs which are $21.6 million and $31.4 million for the three months and nine months ended September 30, 1999, respectively, and $4.2 million and $6.2 million for the three months and nine months ended September 30, 1998, respectively.
3The Consolidated Financial Statements for the three and nine months ended September 30, 1998 have been retroactively restated to reflect the pooling of interests transactions completed during the period October 1, 1998 through September 30, 1999.
TMP Worldwide
Inc
Condensed Consolidated Statements of Operations
For the Nine Months Ending
(in thousands, except per share amounts)
(unaudited)
Gross Billings:
Recruitment advertising
Yellow page advertising
Search & selection
Internet
Temporary contracting
--------------------------------
Total gross billings
================================
Sept 30, 1999
$615,488
413,692
199,764
93,734
44,866
-------------------
$1,367,544
===================
Sept 30, 1998
$646,141
406,349
198,661
36,077
33,027
--------------------
$1,320,255
====================
Commissions & fees:
Recruitment advertising
Yellow page advertising
Search & selection
Internet
Temporary contracting
--------------------------------
Total cost & fees
================================
$134,928
79,522
197,278
82,952
44,866
--------------------
539,546
====================
$133,858
82,534
197,796
32,688
33,027
--------------------
479,903
====================
Operating expenses
Salary & related costs
Office & general expenses
Merger & integration costs
Restructuring charges
Amortization of intangibles
CEO Special bonus
----------------------------------
Total operating expenses
----------------------------------
Operating income
----------------------------------
318,471
163,012
46,262
2,789
8,564
-
----------------------
539,098
----------------------
448
----------------------
281,884
132,888
9,577
-
7,394
1,125
----------------------
432,868
----------------------
47,035
----------------------
Other income(expense):
Interest expense, net
Other,net
----------------------------
Total other income(expense), net
----------------------------
(6,308)
(785)
-----------------------
(7,093)
-----------------------
(7,110)
(932)
-----------------------
(8,042)
-----------------------
Income(loss) before provision for income taxes,
minority interests & equity in losses of affiliates
Provision for income taxes
-------------------------
(6,645)
751
------------------------
38,993
16,313
------------------------
Income(loss) before minority interests
& equity in losses of affilitates
Minority interests
Equity in losses of affiliates
--------------------------------------
(7,396)
107
(300)
------------------------
22,680
(18)
(297)
------------------------
Net income(loss) applicable to common
and Class b common stockholders
=========================================
($7,803)
========================
$22,401 ========================
Adjusted net income:
Net income(loss)
Merger & integration costs and restructuring charges
Tax benefit of M&I costs and restructuring charges
-------------------------------------------------
Adjusted net income
=================================================
($7,803)
49,051
(17,696)
------------------------
$28,609
========================
$22,401
9,577
(3,369)
------------------------
$28,609
========================
TMP WORLDWIDE INC
Condensed
Consolidated Statements of Operations
For the Nine Months Ending
(in thousands, except per share amounts)
(unaudited)
Sept 30, 1999
Sept 30, 1998
Net income(loss) per common and
======================================
Class B common share
=====================
Basic
==========
Diluted
==========
($0.20)
==============
($0.20)
==============
$0.59
==============
$0.57
==============
Adjusted net income per common and
======================================
Class B common share
=====================
Basic
==========
Diluted
==========
$0.61
==============
$0.58
==============
$0.75
==============
$0.73
==============
Weighted average shares outstanding
======================================
Basic
==========
Diluted
==========
38,852
==============
40,488
==============
37,938
==============
39,043
==============
Adjusted EBITDA*
=======================================
$74,204
===============
$77,179
===============
* Earnings before interest, income taxes, depreciation and amortization and adjusted to exclude the effects of merger & integration costs for poolings of interests. EBITDA is presented to provide additional information about the Company's ability to meet its future debt service, capital expenditures and working capital requirements and is one of the measures which determines the Company's ability to borrow under its credit facility. EBITDA should not be considered in isolation or as a substitute for operating income, cash flows from operating activities and other income or cash flow statement data prepared in accordance with generally accepted accounting principles or as a measure of the Company's profitability or liquidity.
TMP Worldwide
Inc
Condensed Consolidated Statements of Operations
For the Three Months Ending
(in thousands, except per share amounts)
(unaudited)
Gross Billings:
Recruitment advertising
Yellow page advertising
Search & selection
Internet
Temporary contracting
--------------------------------
Total gross billings
================================
Sept 30, 1999
$198,647
156,580
74,017
41,439
15,423
-------------------
$486,106
===================
Sept 30, 1998
$210,695
156,737
66,302
14,923
13,820
--------------------
$462,477
====================
Commissions & fees:
Recruitment advertising
Yellow page advertising
Search & selection
Internet
Temporary contracting
--------------------------------
Total cost & fees
================================
$43,024
28,540
72,835
36,639
15,423
--------------------
196,461
====================
$42,306
32,124
65,972
13,654
13,820
--------------------
167,876
====================
Operating expenses
Salary & related costs
Office & general expenses
Merger & integration costs
Restructuring charges
Amortization of intangibles
CEO Special bonus
----------------------------------
Total operating expenses
----------------------------------
Operating income
----------------------------------
109,649
51,164
34,808
2,921
-
----------------------
198,542
----------------------
(2,081)
----------------------
99,527
44,915
7,090
2,013
375
----------------------
153,920
----------------------
13,956
----------------------
Other income(expense):
Interest expense, net
Other,net
----------------------------
Total other income(expense), net
----------------------------
(2,041)
(745)
-----------------------
(2,786)
-----------------------
(2,416)
(580)
-----------------------
(2,996)
-----------------------
Income(loss) before provision for income taxes,
minority interests & equity in losses of affiliates
Provision for income taxes
-------------------------
(4,867)
432
------------------------
10,960
4,694
------------------------
Income(loss) before minority interests
& equity in losses of affilitates
Minority interests
Equity in losses of affiliates
--------------------------------------
(5,299)
-
(100)
------------------------
6,266
(17)
(123)
------------------------
Net income(loss) applicable to common
and Class b common stockholders
=========================================
($5,399)
========================
$6,160 ========================
Adjusted net income:
Net income(loss)
Merger & integration costs and restructuring charges
Tax benefit of M&I costs and restructuring charges
-------------------------------------------------
Adjusted net income
=================================================
($5,399)
34,808
(13,235)
------------------------
$16,174
========================
$6,160
7,090
(2,892)
------------------------
$10,358
========================
TMP WORLDWIDE INC
Condensed
Consolidated Statements of Operations
For the Three Months Ending
(in thousands, except per share amounts)
(unaudited)
Sept 30, 1999
Sept 30, 1998
Net income(loss) per common and
======================================
Class B common share
=====================
Basic
==========
Diluted
==========
($0.14)
==============
($0.14)
==============
$0.16
==============
$0.16
==============
Adjusted net income per common and
======================================
Class B common share
=====================
Basic
==========
Diluted
==========
$0.41
==============
$0.40
==============
$0.27
==============
$0.26
==============
Weighted average shares outstanding
======================================
Basic
==========
Diluted
==========
39,233
==============
40,787
==============
38,053
==============
39,211
==============
Adjusted EBITDA*
=======================================
$41,092
===============
$27,787
===============
* Earnings before interest, income taxes, depreciation and amortization and adjusted to exclude the effects of merger & integration costs for poolings of interests. EBITDA is presented to provide additional information about the Company's ability to meet its future debt service, capital expenditures and working capital requirements and is one of the measures which determines the Company's ability to borrow under its credit facility. EBITDA should not be considered in isolation or as a substitute for operating income, cash flows from operating activities and other income or cash flow statement data prepared in accordance with generally accepted accounting principles or as a measure of the Company's profitability or liquidity.
