TMP Worldwide Announces Fourth Quarter and 2002 Results

NEW YORK, Feb 12, 2003 (BUSINESS WIRE) -- TMP Worldwide Inc. (Nasdaq: TMPW): TMP Worldwide Inc. (Nasdaq: TMPW), the world's leading supplier of human capital solutions, including the pre-eminent Internet career portal Monster(R), today announced an adjusted diluted loss per share (1) of $0.05 for the fourth quarter ended December 31, 2002. On a GAAP basis, TMP reported a fourth quarter 2002 loss of $0.46 per diluted share. Total commissions and fees were $248.8 million for the fourth quarter of 2002, including total Interactive commissions and fees of $126.8 million.

At December 31, 2002, TMP's deferred Interactive revenue was $124.6 million, up 15.5% from the third quarter of 2002. This growth primarily reflects seasonal renewals at Monster and marks the first sequential increase in deferred revenue since the first quarter of 2001.

TMP Worldwide's previously announced plan to spin off its eResourcing and Executive Search units as a new, publicly traded company in the form of a tax-free dividend to shareholders is expected to be completed by March 31, 2003, or no later than April 30, subject to the satisfaction of certain customary conditions. The results for the fourth quarter are presented to include the Monster, Advertising & Communications, and Directional Marketing business units ("OldCo."), and the eResourcing and Executive Search units ("NewCo."), separately.

For the 2002 fourth quarter, Monster, Advertising & Communications and Directional Marketing (OldCo.) recorded an adjusted operating profit of $12.5(2) million representing an operating profit margin of 7.6% to total commissions and fees and adjusted diluted earnings per share of $0.08. The company was able to achieve its fourth quarter earnings target for OldCo. due to a solid performance by Monster and its ability to further reduce operating expenses. For the quarter, total commissions and fees for OldCo. were $164.8 million.

As a result of lower than anticipated commissions and fees, which totaled $84.0 million, eResourcing and Executive Search (NewCo.) recorded an adjusted diluted loss per share of $0.13 in the 2002 fourth quarter. eResourcing results were negatively impacted by a slowdown in the staffing industry in North America and Europe.

For the corresponding 2001 fourth quarter, TMP reported adjusted diluted earnings per share of $0.29 and, on a GAAP basis, diluted earnings per share of $0.21, after adjusting the 2001 amount for goodwill amortization, total commissions and fees amounted to $326.1 million and total Interactive commissions and fees were $146.7 million. Detailed quarter versus quarter comparative results for TMP Worldwide by business segment are presented in the supplemental data tables attached to this release.

During the fourth quarter of 2002, TMP Worldwide announced that it would take a charge of approximately $100 million to reorganize its business in connection with the announced spin-off of its eResourcing and Executive Search businesses. The company has further refined the amount of the charge to approximately $115 million, of which $40 million will be non-cash. Of this charge, $61.3 million was recorded in the fourth quarter of 2002 and is included on the business reorganization and other special charges line on the accompanying financial tables. The remainder of the charge will be recorded through the effective date of the spin-off. The charge consists primarily of workforce reduction, office consolidation costs and related asset write-offs, professional fees, and other special charges.

"We operated in a difficult market during the year, as the continued overall slowdown in the global economy and job markets have reduced volume, particularly in our staffing business," said Andrew J. McKelvey, Chairman and Chief Executive Officer of TMP. "We have remained focused on reducing operating expenses throughout the entire organization and we were able to offset the negative impact of lower revenues at OldCo. with lower expenses, thus achieving our forecasted adjusted diluted earnings per share of $0.08 for these units."

Mr. McKelvey added, "While the fourth quarter reflected a challenging environment for the entire recruitment sector, recent significant contract wins at TMP along with the strong increase in deferred Interactive revenue at Monster are encouraging. Our Advertising & Communications unit recently renewed a multimillion dollar contract with the Air Force Reserve and our Monster Government Solutions offering recently won a contract to overhaul and maintain the U.S. Office of Personnel Management's USAJOBS website (4). This win represents a significant milestone for the company and establishes Monster in an area that is actively hiring. We also launched, on a national basis, our Monster Skilled & Hourly service during Super Bowl XXXVII - an effort that once again generated record traffic to the Monster site."

The adjusted operating expenses, operating income (loss), operating margin, EBITDA, net income and diluted EPS amounts reflect adjustments made to exclude business reorganization and other special charges, merger and integration costs, the elimination of goodwill amortization in the prior year periods and the tax benefits thereon.

2002 Results

For the twelve months ended December 31, 2002, TMP Worldwide reported total commissions and fees of $1.1 billion compared with $1.4 billion for the 2001 period. Adjusted diluted earnings per share for 2002 was $0.36, compared with $1.27 for the 2001 period, after adjusting for goodwill amortization. Diluted earnings per share on a GAAP basis was a loss of $4.80 in 2002, compared to income of $0.79 in 2001, after adjusting for goodwill amortization.

Detailed year versus year comparative results for TMP Worldwide are presented in the tables attached to this release.

Q4 2002 Cash Position Is Strong

In the fourth quarter of 2002, cash provided by operations, which includes the cash costs of TMP's reorganization efforts, was $12.4 million and capital expenditures were $9.8 million. Net cash as of December 31, 2002, was $183.8 million, an increase over the $181.8 million at the end of the previous quarter.

Reflecting ongoing efforts to improve working capital utilization, Days Sales Outstanding ("DSO") was 66 at the end of 2002, compared to 65 days at September 30, 2002 and 67 days at December 31, 2001.

Outlook

TMP Worldwide expects the difficult and challenging market conditions that it experienced in 2002 to continue into 2003. The fragile economy and the unpredictability of world events make it imprudent to discuss specific guidance. Any prior guidance is therefore not applicable. Operating and financial priorities in 2003 will focus on realizing operating efficiencies across the entire organization. Revenue generation initiatives in new and promising vertical markets are being actively implemented and pursued.

Longer-term, the company is optimistic about the earnings potential of the Monster franchise and believes the corporate initiatives implemented will position OldCo. and its portfolio of businesses well, as the market and economy eventually turn.

About TMP Worldwide

Founded in 1967, TMP Worldwide Inc., with approximately 8,500 employees in 33 countries, is the online recruitment leader, the world's largest Recruitment Advertising agency network, and one of the world's largest Executive Search & Executive Selection agencies. TMP Worldwide, headquartered in New York, is also the world's largest Yellow Pages advertising agency and a provider of direct marketing services. The Company's clients include more than 90 of the Fortune 100 and more than 490 of the Fortune 500 companies. TMP Worldwide is a member of the S&P 500 Index. More information about TMP Worldwide is available at www.tmp.com.

Monster, headquartered in Maynard, Mass., is the leading global careers website, recording over 38.7 million unique visits during the month of December 2002 according to independent research conducted by I/PRO. Monster connects the most progressive companies with the most qualified career-minded individuals, offering innovative technology and superior services that give them more control over the recruiting process. The Monster global network consists of local content and language sites in the United States, United Kingdom, Australia, Canada, the Netherlands, Belgium, New Zealand, Singapore, Hong Kong, France, Scotland, Germany, Ireland, Spain, Luxembourg, India, Italy, Sweden, Norway, Denmark, Switzerland, and Finland. Monster is the official online career management services sponsor of the 2002 Olympic Winter Games and 2002 and 2004 U.S. Olympic Teams. More information about Monster is available at www.monster.com or by calling 1-800-MONSTER.

Condensed consolidated statements of operations for the three and twelve months ending December 31, 2002 and 2001, and condensed consolidated balance sheets as of December 31, 2002 September 30, 2002 and December 31, 2001 for TMP Worldwide Inc. and subsidiaries, as well as income statements for OldCo. and NewCo. for the three and twelve months ending December 31, 2002 and 2001 follow. For an investor kit, please contact Robert Jones at (212) 351-7032 or visit www.tmp.com.

Fourth quarter 2002 results will be discussed on TMP Worldwide's quarterly conference call taking place on February 13, 2002. To join the conference call, please dial in on 1-888-937-3422 at 8:20 AM EST. For those outside the United States, please call in on 1-415-537-1981. The call will begin promptly at 8:30 AM EST. Individuals can also access TMP Worldwide's quarterly conference call online through Yahoo! Finance at www.yahoo.com and the investor information section of the Company's website at www.tmp.com. Interactive Metrics for TMP Worldwide and Monster are available at www.monster.com or www.tmp.com.

Financial Tables Follow

Supplemental Data

Quarter versus quarter comparative results for TMP Worldwide, are as follows (dollar amounts in thousands, except per share amounts):

Operating Highlights Q4'02 Q4'01 % Change ---------------------------------------------------------------------- Total Commissions & Fees $248,822 $326,083 -24% Interactive Commission & Fees $126,815 $146,673 -14% Adjusted Operating Expenses (3) $260,298 $278,300 -6% Adjusted Operating Income (Loss) (3) $(11,476) $47,783 -124% Adjusted Operating Margin (3) -4.6% 14.7% -131% Adjusted EBITDA (3) $1,864 $62,307 -97% Adjusted Net Income (Loss) (1) $(6,058) $32,663 -119% Adjusted Diluted EPS (1) $(0.05) $0.29 -117% Diluted Weighted Avg. Shares 111,246 113,861 -2% ---------------------------------------------------------------------- The following tables include quarter versus quarter comparative results for TMP Worldwide's commissions and fees, percentage of Interactive commissions and fees, adjusted operating income (loss) and adjusted operating margin by operating division. (Dollar amounts in thousands). Segment Data For The Three Months Ended December 31, 2002 Monster Advertising & Directional Communications Marketing ---------------------------------------------------------------------- Total Commissions & Fees $100,005 $38,130 $26,646 % Interactive Commissions & Fees 100.0% 23.4% 19.9% Adjusted Operating Income (Loss)(3) $13,872 $(2,642) $1,319 Adjusted Operating Margin(3) 13.9% -6.9% 5.0% eResourcing Executive Total Search ---------------------------------------------------------------------- Total Commissions & Fees $69,270 $14,771 $248,822 % Interactive Commissions & Fees 17.7% 2.5% 51.0% Adjusted Operating Income (Loss)(3) $(21,704) $(2,321) $(11,476) Adjusted Operating Margin(3) -31.3% -15.7% -4.6% ---------------------------------------------------------------------- Segment Data For The Three Months Ended December 31, 2001 Monster Advertising & Directional Communications Marketing ---------------------------------------------------------------------- Total Commissions & Fees $115,544 $56,573 $32,557 % Interactive Commissions & Fees 100.0% 21.5% 19.7% Adjusted Operating Income (Loss)(3) $29,505 $10,896 $7,598 Adjusted Operating Margin(3) 25.5% 19.3% 23.3% eResourcing Executive Total Search ---------------------------------------------------------------------- Total Commissions & Fees $98,935 $22,474 $326,083 % Interactive Commissions & Fees 12.7% 0.0% 45.0% Adjusted Operating Income (Loss)(3) $540 $(756) $47,783 Adjusted Operating Margin(3) 0.5% -3.4% 14.7% ---------------------------------------------------------------------- Comparative Segment Data For The Three Months Ended December 31, 2002 compared with 2001 Monster Advertising & Directional Communications Marketing ---------------------------------------------------------------------- Total Commissions & Fees $(15,539) $(18,443) $(5,911) Adj. Operating Income (Loss)(3) $(15,633) $(13,538) $(6,279) % Change: -- Commissions & Fees -13.4% -32.6% -18.2% -- Adj. Operating Income (Loss) -53.0% -124.2% -82.6% eResourcing Executive Total Search ---------------------------------------------------------------------- Total Commissions & Fees $(29,665) $(7,703) $(77,261) Adj. Operating Income (Loss)(3) $(22,244) $(1,565) $(59,259) % Change: -- Commissions & Fees -30.0% -34.3% -23.7% -- Adj. Operating Income (Loss) -4119.3% 207.0% -124.0% ---------------------------------------------------------------------- Twelve month comparative results for TMP Worldwide are as follows (dollar amounts in thousands, except per share amounts): Operating Highlights 12M 02 12M 01 (4)% Change ---------------------------------------------------------------------- Total Commissions & Fees $1,114,622 $1,448,057 -23% Interactive Commissions & fees $516,845 $654,259 -21% Adjusted Operating Expenses (3) $1,058,068 $1,238,373 -15% Adjusted Operating Income (3) $56,554 $209,684 -73% Adjusted Operating Margin (3) 5.1% 14.5% -65% Adjusted EBITDA (3) $114,255 $262,465 -56% Adjusted Net Income (1) $40,771 $143,755 -72% Adjusted Diluted EPS (1) $0.36 $1.27 -72% Diluted Weighted Avg. Shares 112,782 113,426 -1% ---------------------------------------------------------------------- Endnotes 1. Adjusted net income (loss), adjusted diluted earnings per share and adjusted loss per share amounts have been adjusted to exclude the after-tax effects of the cumulative effect of the change in accounting principle, merger and integration costs and business reorganization and other special charges. 2001 amounts also exclude the amortization of goodwill. The after-tax cumulative effect of the change in accounting principle was $428.4 million for the twelve months ended December 31, 2002. The after-tax merger and integration costs (benefits) were $(1.7) million and $9.5 million for the three months ended December 31, 2002 and 2001, respectively. The after-tax business reorganization and other special charges was $46.8 million for the three months ended December 31, 2002. The after-tax merger and integration costs for the twelve months ended December 31, 2002 and 2001 were $6.1 million and $54.3 million, respectively. The after-tax business reorganization and other special charges was $141.2 million for the twelve months ended December 31, 2002. The after-tax amount of goodwill amortization for the three and twelve months ended December 31, 2001 was $5.3 million and $20.5 million, respectively. 2. OldCo. adjusted operating income for the three months ended December 31, 2002, has been adjusted to exclude $40.9 million of business reorganization and other special charges and a $1.5 million merger and integration benefit. 3. Operating expenses, operating income (loss), operating margin and EBITDA have been adjusted to exclude the effects of merger and integration costs, business reorganization and other special charges, and for 2001, goodwill amortization. For the three months ended December 31, 2002 and 2001, merger and integration costs (benefits) were $(2.2) million and $10.5 million, respectively. Business reorganization and other special charges was $61.3 million for the three months ended December 31, 2002. Goodwill amortization for the December 2001 quarter was $6.2 million. For the twelve months ended December 31, 2002 and 2001, merger and integration costs were $8.6 million and $72.5 million, respectively. Business reorganization and other special charges was $178.4 million for the twelve months ended December 31, 2002. Goodwill amortization was $23.8 million for the twelve months ended December 31, 2001. 4. As previously disclosed, TMP has been awarded a contract worth up to $62 million over ten years to overhaul the U.S. Office of Personnel Management's USAJOBS Web site, which presents an average of more than 17,000 federal job vacancy announcements per day. A losing bidder on the OPM contract subsequently filed a protest of the award with the U.S. General Accounting Office. Such protests are common in federal procurement, and TMP has intervened in the protest to defend its award. On the basis of the information provided to TMP to date, the protest grounds appear to be untimely or not supported by fact or law and should be dismissed, though there can be no assurance. TMP plans to vigorously defend the protest. Contract performance is continuing notwithstanding the ongoing protest process.

Special Note: Except for historical information contained herein, the statements made in this release 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, including statements regarding the Company's strategic direction, prospects and future results. Certain factors, including factors outside of our control, may cause actual results to differ materially from those contained in the forward-looking statements, including economic and other conditions in the markets in which we operate, risks associated with acquisitions, competition, seasonality 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 in this release by reference.

TMP WORLDWIDE INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS For the Year Ended December 31, (in thousands, except per share amounts) (unaudited) 2002 2001 ----------- ----------- Gross billings: Interactive $561,456 $717,917 Advertising & Communications 560,790 736,274 Directional Marketing 629,355 572,771 eResourcing 316,594 413,323 Executive Search 66,079 109,435 ---------------------------------------------- ----------- ----------- Total gross billings $2,134,274 $2,549,720 ============================================== =========== =========== Commissions & fees: Interactive $516,845 $654,259 Advertising & Communications 134,941 185,259 Directional Marketing 100,055 101,385 eResourcing 296,816 397,721 Executive Search 65,965 109,433 ---------------------------------------------- ----------- ----------- Total commissions & fees: 1,114,622 1,448,057 ---------------------------------------------- ----------- ----------- Operating expenses: Salaries & related 639,385 735,525 Office & general 276,401 304,082 Marketing & promotion 139,123 196,104 Merger & integration 8,551 72,480 Business reorganization and other special charges 178,358 - Amortization of intangibles 3,159 26,434 ---------------------------------------------- ----------- ----------- Total operating expenses 1,244,977 1,334,625 ---------------------------------------------- ----------- ----------- Operating income (loss) (130,355) 113,432 Other income: Interest income, net 336 11,167 Other, net - 395 ---------------------------------------------- ----------- ----------- Total other income, net 336 11,562 ---------------------------------------------- ----------- ----------- Income (loss) before income taxes and minority interests (130,019) 124,994 Provision (benefit) for income taxes (21,281) 57,566 ---------------------------------------------- ----------- ----------- Income (loss) before minority interests (108,738) 67,428 Minority interests (2,216) (1,592) ---------------------------------------------- ----------- ----------- Income (loss) before accounting change (106,522) 69,020 Cumulative effect of accounting change, net of tax (428,374) - ---------------------------------------------- ----------- ----------- Net income (loss) applicable to common and Class B common stockholders $(534,896) $69,020 ============================================== =========== =========== Adjusted net income (loss): Net income (loss) $(534,896) $69,020 Goodwill amortization, net of tax - 20,470 ---------------------------------------------- ----------- ----------- Net income (loss) adjusted for goodwill amortization (534,896) 89,490 Merger & integration 8,551 72,480 Business reorganization and other special charges 178,358 - Cumulative effect of accounting change, net of tax 428,374 - Tax benefit on merger and integration costs (2,419) (18,215) Tax benefit on business reorganization and other special charges (37,197) - ---------------------------------------------------------- ----------- Adjusted net income $40,771 $143,755 ---------------------------------------------- =========== =========== Basic earnings (loss) per share: Income (loss) before accounting change $(0.96) $0.63 Cumulative effect of accounting change, net of tax $(3.84) - ---------------------------------------------- ----------- ----------- Net income (loss) applicable to common and Class B common stockholders $(4.80) $0.63 ============================================== =========== =========== Diluted earnings (loss) per share: Income (loss) before accounting change $(0.96) $0.61 Cumulative effect of accounting change, net of tax (3.84) - ---------------------------------------------- ----------- ----------- Net income (loss) applicable to common and Class B common stockholders $(4.80) $0.61 ============================================== =========== =========== Adjusted diluted earnings per share: Net income (loss) $(4.80) $0.61 Goodwill amortization, net of tax - 0.18 ---------------------------------------------- ----------- ----------- Diluted income (loss) per share adjusted for goodwill amortization (4.80) 0.79 Merger & integration 0.08 0.64 Business reorganization and other special charges 1.60 - Cumulative effect of accounting change, net of tax 3.84 - Tax benefit on merger and integration costs (0.02) (0.16) Tax benefit on business reorganization and other special charges (0.33) - ---------------------------------------------------------- ----------- Adjusted diluted earnings per share $0.36 $1.27 ---------------------------------------------- ----------- ----------- Weighted average shares outstanding: Basic 111,339 109,445 ============================================== =========== =========== Diluted * 112,782 113,426 ============================================== =========== =========== Adjusted E B I T D A ** $114,255 $262,465 ============================================== =========== =========== * Due to the net loss in 2002, diluted weighted average shares outstanding of 112,782 are used only used in the calculation of Adjusted Diluted Earnings Per Share ** Earnings before interest, income taxes, depreciation and amortization, and adjusted to exclude the effects of merger and integration costs and business reorganization and other special charges. 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 Ended December 31, (in thousands, except per share amounts) (unaudited) 2002 2001 --------- --------- Gross billings: Interactive $145,198 $154,674 Advertising & Communications 118,138 146,422 Directional Marketing 125,060 132,131 eResourcing 66,605 89,274 Executive Search 14,441 22,472 -------------------------------------------------- --------- --------- Total gross billings $469,442 $544,973 ================================================== ========= ========= Commissions & fees: Interactive $126,815 $146,673 Advertising & Communications 29,220 44,424 Directional Marketing 21,347 26,145 eResourcing 57,036 86,370 Executive Search 14,404 22,471 -------------------------------------------------- --------- --------- Total commissions & fees: 248,822 326,083 -------------------------------------------------- --------- --------- Operating expenses: Salaries & related 159,346 161,402 Office & general 66,193 72,561 Marketing & promotion 34,041 43,667 Merger & integration (2,197) 10,546 Business reorganization and other special charges 61,341 - Amortization of intangibles 718 6,856 -------------------------------------------------- --------- --------- Total operating expenses 319,442 295,032 -------------------------------------------------- --------- --------- Operating income (loss) (70,620) 31,051 Other income: Interest income, net 229 447 Other, net 207 83 -------------------------------------------------- --------- --------- Total other income, net 436 530 -------------------------------------------------- --------- --------- Income (loss) before income taxes and minority interests (70,184) 31,581 Provision (benefit) for income taxes (18,418) 14,211 -------------------------------------------------- --------- --------- Income (loss) before minority interests (51,766) 17,370 Minority interests (666) (498) -------------------------------------------------- --------- --------- Net income (loss) applicable to common and Class B common stockholders $(51,100) $17,868 ================================================== ========= ========= Adjusted net income (loss): Net income (loss) $(51,100) $17,868 Goodwill amortization, net of tax - 5,327 -------------------------------------------------- --------- --------- Net income (loss) adjusted for goodwill amortization (51,100) 23,195 Merger & integration (2,197) 10,546 Business reorganization and other special charges 61,341 - Tax (benefit) expense on merger and integration costs 450 (1,078) Tax benefit on business reorganization and other special charges (14,552) - ------------------------------------------------------------ --------- Adjusted net income (loss) $(6,058) $32,663 -------------------------------------------------- ========= ========= Basic earnings per share: Net income (loss) applicable to common and Class B common stockholders $(0.46) $0.16 ================================================== ========= ========= Diluted earnings per share: Net income (loss) applicable to common and Class B common stockholders $(0.46) $0.16 ================================================== ========= ========= Adjusted iluted earnings per share: Net income (loss) $(0.46) $0.16 Goodwill amortization, net of tax - 0.05 -------------------------------------------------- --------- --------- Diluted earnings (loss) per share adjusted for goodwill amortization (0.46) 0.21 Merger & integration (0.02) 0.09 Business reorganization and other special charges 0.55 - Tax benefit on merger and integration costs 0.00 (0.01) Tax benefit on business reorganization and other special charges (0.13) ------------------------------------------------------------ --------- Adjusted diluted earnings (loss) per share $(0.05) $0.29 -------------------------------------------------- --------- --------- Weighted average shares outstanding: Basic 111,246 110,606 ================================================== ========= ========= Diluted 111,246 113,861 ================================================== ========= ========= Adjusted E B I T D A ** $1,864 $62,307 ================================================== ========= ========= ** Earnings before interest, income taxes, depreciation and amortization, and adjusted to exclude the effects of merger and integration costs and business reorganization and other special charges. 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. OldCo.* CONDENSED CONSOLIDATED STATEMENT OF OPERATING INCOME For the Year Ended December 31, (in thousands, except per share amounts) (unaudited) 2002 2001 ---------- --------- Commissions & fees: Monster** $416,584 $535,776 Advertising & Communications 166,852 216,488 Directional Marketing 119,321 124,256 ------------------------------------------------ ---------- --------- Total commissions & fees: 702,757 876,520 ------------------------------------------------ ---------- --------- Operating expenses: Salaries & related, office & general and marketing & promotion 602,993 693,469 Merger & integration 3,178 29,303 Business reorganization and other special charges 104,815 - Amortization of intangibles 2,404 12,110 ------------------------------------------------ ---------- --------- Total operating expenses 713,390 734,882 ------------------------------------------------ ---------- --------- Operating income (loss) (10,633) 141,638 Other income: Interest income, net 658 13,068 Other, net 224 738 ------------------------------------------------ ---------- --------- Total other income, net 882 13,806 ------------------------------------------------ ---------- --------- Income (loss) before income taxes and minority interests (9,751) 155,444 Provision for income taxes*** 9,220 50,138 ------------------------------------------------ ---------- --------- Income (loss) before minority interests (18,971) 105,306 Minority interests (2,210) (1,594) ------------------------------------------------ ---------- --------- Income (loss) before accounting change (16,761) 106,900 Cumulative effect of accounting change, net of tax (135,374) - ----------------------------------------------------------- --------- Net income (loss) applicable to common and Class B common stockholders $(152,135) $106,900 ================================================ ========== ========= Adjusted net income (loss): Net income (loss) $(152,135) $106,900 Goodwill amortization, net of tax - 8,103 ------------------------------------------------ ---------- --------- Net income (loss) adjusted for goodwill amortization (152,135) 115,003 Merger & integration 3,178 29,303 Business reorganization and other special charges 104,815 - Cumulative effect of accounting change, net of tax 135,374 - Tax benefit on merger and integration costs*** (899) (7,078) Tax benefit on business reorganization and other special charges*** (21,738) - ----------------------------------------------------------- --------- Adjusted net income $68,595 $137,228 ------------------------------------------------ ========== ========= Adjusted diluted earnings per share: $0.61 $1.21 ================================================ ========== ========= Diluted weighted average shares outstanding 112,782 113,426 ================================================ ========== ========= Adjusted E B I T D A **** $134,214 $214,555 ================================================ ========== ========= * Represents the continuing operations of the business segments that will remain with TMP after the proposed spin-off and includes the allocation of overhead based on current TMP structure. Overhead costs are likely to vary after the spin-off. ** For the twelve months ended December 31, 2002 and 2001, Monster commissions and fees include $20.4 million and $24.4 million for Monster services sold by eResourcing, a division which will be spun-off as part of NewCo. *** The provisions and benefits for income tax have been calculated using TMP Worldwide Inc.'s effective tax rates and reflect certain tax strategies available to the TMP group, which are not necessarily reflective of tax strategies that OldCo would have followed or will follow as a stand-alone company. **** Earnings before interest, income taxes, depreciation and amortization, and adjusted to exclude the effects of merger and integration costs and business reorganization and other special charges. EBITDA is presented to provide additional information about the Company's ability to meet its future debt service, capital expenditures and working capital requirements, 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. OldCo.* CONDENSED CONSOLIDATED STATEMENT OF OPERATING INCOME For the Three Months Ended December 31, (in thousands, except per share amounts) (unaudited) 2002 2001 --------- --------- Commissions & fees: Monster** $100,005 $115,544 Advertising & Communications 38,130 56,573 Directional Marketing 26,646 32,557 ------------------------------------------------- --------- --------- Total commissions & fees: 164,781 204,674 ------------------------------------------------- --------- --------- Operating expenses: Salaries & related, office & general and marketing & promotion 151,690 156,087 Merger & integration (1,514) (3,649) Business reorganization and other special charges 40,931 - Amortization of intangibles 542 3,266 ------------------------------------------------- --------- --------- Total operating expenses 191,649 155,704 ------------------------------------------------- --------- --------- Operating income (loss) (26,868) 48,970 Other income: Interest income, net 278 887 Other, net 423 203 ------------------------------------------------- --------- --------- Total other income, net 701 1,090 ------------------------------------------------- --------- --------- Income (loss) before income taxes and minority interests (26,167) 50,060 Provision (benefit) for income taxes*** (4,231) 19,401 ------------------------------------------------- --------- --------- Income (loss) before minority interests (21,936) 30,659 Minority interests (660) (496) ------------------------------------------------- --------- --------- Net income (loss) applicable to common and Class B common stockholders $(21,276) $31,155 ================================================= ========= ========= Adjusted net income (loss): Net income (loss) $(21,276) $31,155 Goodwill amortization, net of tax - 2,225 ------------------------------------------------- --------- --------- Net income (loss) adjusted for goodwill amortization (21,276) 33,380 Merger & integration (1,514) (3,649) Business reorganization and other special charges 40,931 - Tax benefit on merger and integration costs 310 881 Tax benefit on business reorganization and other special charges (9,721) - ----------------------------------------------------------- --------- Adjusted net income $8,730 $30,612 ------------------------------------------------- ========= ========= Adjusted diluted earnings per share: $0.08 $0.27 ================================================= ========= ========= Diluted weighted average shares outstanding 112,025 113,861 ================================================= ========= ========= Adjusted E B I T D A **** $21,039 $57,415 ================================================= ========= ========= * Represents the continuing operations of the business segments that will remain with TMP after the proposed spin-off and includes the allocation of overhead based on current TMP structure. Overhead costs are likely to vary after the spin-off. ** For the three months ended December 31, 2002 and 2001, Monster commissions and fees include $4.0 million and $7.1 million for Monster services sold by eResourcing, a division which will be spun-off as part of NewCo. *** The provisions and benefits for income tax have been calculated using TMP Worldwide Inc.'s effective tax rates and reflect certain tax strategies available to the TMP group, which are not necessarily reflective of tax strategies that OldCo would have followed or will follow as a stand-alone company. **** Earnings before interest, income taxes, depreciation and amortization, and adjusted to exclude the effects of merger and integration costs and business reorganization and other special charges. EBITDA is presented to provide additional information about the Company's ability to meet its future debt service, capital expenditures and working capital requirements, 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. NewCo.* CONDENSED CONSOLIDATED STATEMENT OF OPERATING INCOME For the Year Ended December 31, (in thousands, except per share amounts) (unaudited) 2002 2001 ---------- --------- Commissions & fees: eResourcing $344,997 $462,077 Executive Search 66,868 109,460 ------------------------------------------------- ---------- --------- Total commissions & fees: 411,865 571,537 ------------------------------------------------- ---------- --------- Operating expenses: Salaries & related, office & general and marketing & promotion 451,916 542,242 Merger & integration 5,373 43,177 Business reorganization and other special charges 73,543 - Amortization of intangibles 755 14,324 ------------------------------------------------- ---------- --------- Total operating expenses 531,587 599,743 ------------------------------------------------- ---------- --------- Operating loss (119,722) (28,206) Other expense: Interest expense, net (322) (1,901) Other, net (224) (343) ------------------------------------------------- ---------- --------- Total other expense, net (546) (2,244) ------------------------------------------------- ---------- --------- Income (loss) before income taxes and minority interests (120,268) (30,450) Provision (benefit) for income taxes** (30,501) 7,428 ------------------------------------------------- ---------- --------- Loss before minority interests (89,767) (37,878) Minority interests (6) 2 ------------------------------------------------- ---------- --------- Loss before accounting change (89,761) (37,880) Cumulative effect of accounting change (293,000) - ------------------------------------------------- ---------- --------- Net loss applicable to common and Class B common stockholders $(382,761) $(37,880) ================================================= ========== ========= Adjusted net income (loss): Net loss $(382,761) $(37,880) Goodwill amortization, net of tax - 11,996 ------------------------------------------------- ---------- --------- Net loss adjusted for goodwill amortization (382,761) (25,884) Merger & integration 5,373 43,177 Business reorganization and other special charges 73,543 - Cumulative effect of accounting change 293,000 - Tax benefit on merger and integration costs** (1,520) (10,429) Tax benefit on business reorganization and other special charges** (15,459) - ------------------------------------------------------------ --------- Adjusted net income (loss) $(27,824) $6,864 ------------------------------------------------- ========== ========= Adjusted diluted earnings (loss) per share: $(0.25) $0.06 ================================================= ========== ========= Diluted weighted average shares outstanding 111,339 113,426 ================================================= ========== ========= Adjusted E B I T D A *** $(19,959) $47,910 ================================================= ========== ========= * Represents the operating results of the business segments that are proposed to be spun-off, which are eResourcing and Executive Search, and includes the allocation of overhead based on current TMP structure. Overhead costs are likely to vary after the spin-off. ** The provisions and benefits for income tax have been calculated using TMP Worldwide Inc.'s effective tax rates and reflect certain tax strategies available to the TMP group, which are not necessarily reflective of tax strategies that NewCo would have followed or will follow as a stand-alone company. *** Earnings before interest, income taxes, depreciation and amortization, and adjusted to exclude the effects of merger and integration costs and business reorganization and other special charges. EBITDA is presented to provide additional information about the Company's ability to meet its future debt service, capital expenditures and working capital requirements, 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. NewCo.* CONDENSED CONSOLIDATED STATEMENT OF OPERATING INCOME For the Three Months Ended December 31, (in thousands, except per share amounts) (unaudited) 2002 2001 --------- --------- Commissions & fees: eResourcing $69,270 $98,935 Executive Search 14,771 22,474 -------------------------------------------------- --------- --------- Total commissions & fees: 84,041 121,409 -------------------------------------------------- --------- --------- Operating expenses: Salaries & related, office & general and marketing & promotion 107,890 121,543 Merger & integration (683) 14,195 Business reorganization and other special charges 20,410 - Amortization of intangibles 176 3,590 -------------------------------------------------- --------- --------- Total operating expenses 127,793 139,328 -------------------------------------------------- --------- --------- Operating loss (43,752) (17,919) Other expense: Interest expense, net (49) (440) Other, net (216) (120) -------------------------------------------------- --------- --------- Total other expense, net (265) (560) -------------------------------------------------- --------- --------- Loss before income taxes and minority interests (44,017) (18,479) Provision (benefit) for income taxes** (14,187) (5,190) -------------------------------------------------- --------- --------- Loss before minority interests (29,830) (13,289) Minority interests (6) (2) -------------------------------------------------- --------- --------- Net loss applicable to common and Class B common stockholders $(29,824) $(13,287) ================================================== ========= ========= Adjusted net loss: Net loss $(29,824) $(13,287) Goodwill amortization, net of tax - 3,009 -------------------------------------------------- --------- --------- Net loss adjusted for goodwill amortization (29,824) (10,278) Merger & integration (683) 14,195 Business reorganization and other special charges 20,410 - Tax benefit on merger and integration costs** 140 (3,429) Tax benefit on business reorganization and other special charges** (4,831) - ------------------------------------------------------------ --------- Adjusted net income (loss) $(14,788) $488 -------------------------------------------------- ========= ========= Adjusted diluted earnings (loss) per share: $(0.13) $0.00 ================================================== ========= ========= Diluted weighted average shares outstanding 111,246 113,861 ============================================================ ========= Adjusted E B I T D A *** $(19,175) $4,892 ================================================== ========= ========= * Represents the operating results of the business segments that are proposed to be spun-off, which are eResourcing and Executive Search, and includes the allocation of overhead based on current TMP structure. Overhead costs are likely to vary after the spin-off. ** The provisions and benefits for income tax have been calculated using TMP Worldwide Inc.'s effective tax rates and reflect certain tax strategies available to the TMP group, which are not necessarily reflective of tax strategies that NewCo would have followed or will follow as a stand-alone company. *** Earnings before interest, income taxes, depreciation and amortization, and adjusted to exclude the effects of merger and integration costs and business reorganization and other special charges. EBITDA is presented to provide additional information about the Company's ability to meet its future debt service, capital expenditures and working capital requirements, 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 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 BALANCE SHEETS (in thousands) (unaudited) Dec. 31, Sept 30, Dec. 31, 2002 2002 2001 ----------- ----------- ----------- Assets: Cash and cash equivalents $191,556 $199,901 $340,581 Accounts receivable, net 469,430 510,425 507,373 Property and equipment, net 157,788 168,302 192,695 Intangibles, net 588,641 564,900 939,847 Other assets 223,380 196,039 225,866 ---------------------------------- ----------- ----------- ----------- Total Assets $1,630,795 $1,639,567 $2,206,362 ================================== =========== =========== =========== Liabilities and Stockholders' Equity: Accounts payable and accrued expenses $535,124 $565,315 $647,229 Accrued integration and restructuring 21,290 29,284 44,121 Accrued business reorganization costs 86,181 53,805 - Deferred commissions and fees 153,046 130,562 139,100 Other liabilities 13,922 20,626 70,686 Debt 7,793 18,079 75,964 ---------------------------------- ----------- ----------- ----------- Total Liabilities 817,356 817,671 977,100 Stockholders' Equity 813,439 821,896 1,229,262 ---------------------------------- ----------- ----------- ----------- Total Liabilities and Stockholders' Equity $1,630,795 $1,639,567 $2,206,362 ================================== =========== =========== ===========

CONTACT:

TMP, New York Investors: Robert Jones, 212/351-7032 robert.jones@tmp.com Media: David Rosa, 212/351-7067 david.rosa@tmp.com

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