TMP Worldwide Announces Third Quarter 2002 Results

Q3 Highlights

  • Adjusted Diluted EPS of $0.14
  • Adjusted Quarterly Operating Expenses Declined 10%
  • GAAP Diluted EPS of $0.12
  • Third Quarter Cash Flow from Operations of $29.9 Million
  • Net Cash Position $181.8 Million
  • Repurchased 927,000 Shares

NEW YORK--(BUSINESS WIRE)--Nov. 6, 2002--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 adjusted diluted earnings per share of $0.14 for the third quarter ended September 30, 2002, compared with $0.40 for the third quarter of 2001. On a GAAP (Generally Accepted Accounting Principles) basis, TMP reported net income of $0.12 per diluted share, compared to net income of $0.23 per diluted share in the third quarter of 2001.

Total commissions and fees declined by 21% to $284.0 million for the third quarter of 2002 from $361.2 million in the third quarter of 2001, primarily as a result of the global slowdown in employment. Total Interactive commissions and fees were $128.3 million for the third quarter, down 26% from the $174.3 million reported for the prior year period.

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

---------------------------------------------------------------------- Operating Highlights 3Q'02 3Q'01 (4) % Change ---------------------------------------------------------------------- Total Commissions & Fees $284,024 $361,173 -21% Interactive Commission & Fees $128,252 $174,319 -26% Adjusted Operating Expenses (1) $263,165 $293,933 -10% Adjusted Operating Income (1) $20,859 $67,240 -69% Adjusted Operating Margin (1) 7.3% 18.6% -61% Adjusted EBITDA (1) $36,066 $80,989 -55% Adjusted Net Income (2) $15,434 $45,441 -66% Adjusted Diluted EPS (3) $0.14 $0.40 -65% Diluted Weighted Avg. Shares 112,076 113,665 -1% ----------------------------------------------------------------------

The adjusted operating expenses, operating income, 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 period and the tax benefits thereon.

"Despite the continuation of adverse business conditions in some of our key markets, we're pleased to report adjusted EPS of $0.14," said Andrew J. McKelvey, Chairman and CEO of TMP Worldwide. "While Monster North America and our Directional Marketing division performed well, our staffing and search businesses were adversely affected by the prolonged slow down in economic activity and sluggish European markets. Moving forward, we will continue to right-size our business, and believe that the planned spin-off of our eResourcing and Executive Search units into a separate company will allow both organizations to more clearly focus and capitalize on their core competencies and markets. These plans also will create more opportunities for Monster to attract new clients and establish stronger partnerships with existing clients in the extremely important staffing industry."

"Additionally, our newly appointed Chief Operating Officer Bill Pastore brings a wealth of operations and organizational experience as well as a proven track record. Bill's expertise will enable us to continue our efforts at bringing increased efficiencies and lower operational costs throughout our global organization," added Mr. McKelvey. Third Quarter Business Review

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. During the quarter, the Company further streamlined its operating divisions and integrated the operations of Monstermoving into Directional Marketing, thereby strengthening the relationship between the business and its client base. (Dollar amounts in thousands).

---------------------------------------------------------------------- Segment Data For The Three Months Ended September 30, 2002 ---------------------------------------------------------------------- Monster Advertising Directional & Communications Marketing ---------------------------------------------------------------------- Total Commissions & Fees $ 103,169 $ 42,166 $ 34,137 % Interactive Commissions & Fees 100.0% 18.0% 15.2% Adjusted Operating Income (Loss)(1) $ 14,144 $ 1,894 $ 10,843 Adjusted Operating Margin(1) 13.7% 4.5% 31.8% ---------------------------------------------------------------------- Segment Data For The Three Months Ended September 30, 2002 ---------------------------------------------------------------------- eResourcing Executive Total Search ---------------------------------------------------------------------- Total Commissions & Fees $ 88,590 $ 15,962 $ 284,024 % Interactive Commissions & Fees 13.7% 1.0% 45.2% Adjusted Operating Income (Loss)(1) $ (6,043) $ 21 $ 20,859 Adjusted Operating Margin(1) -6.8% 0.1% 7.3% ---------------------------------------------------------------------- ---------------------------------------------------------------------- Segment Data For The Three Months Ended September 30, 2001 ---------------------------------------------------------------------- Monster Advertising Directional & Communications Marketing ---------------------------------------------------------------------- Total Commissions & Fees $ 144,800 $ 50,813 $ 34,746 % Interactive Commissions & Fees 100.0% 4.9% 17.0% Adjusted Operating Income (Loss)(1) $ 52,057 $ 3,340 $ 3,810 Adjusted Operating Margin(1) 36.0% 6.6% 11.0% ---------------------------------------------------------------------- Segment Data For The Three Months Ended September 30, 2001 ---------------------------------------------------------------------- eResourcing Executive Total Search ---------------------------------------------------------------------- Total Commissions & Fees 107,853 $ 22,961 $ 361,173 % Interactive Commissions & Fees 19.6% 0.0% 48.3% Adjusted Operating Income (Loss)(1) $ 7,694 $ 339 $ 67,240 Adjusted Operating Margin(1) 7.1% 1.5% 18.6% ---------------------------------------------------------------------- ---------------------------------------------------------------------- Comparative Segment Data For The Three Months Ended September 30, 2002 compared with 2001 --------------------------------------------------------------------- Monster Advertising Directional & Communications Marketing --------------------------------------------------------------------- Total Commissions & Fees $(41,631) $ (8,647) $ (609) Adj. Operating Income (Loss)(1) $(37,913) $ (1,446) $ 7,033 % Change: - Commissions & Fees -28.8% -17.0% -1.8% - Adj. Operating Income (Loss) -72.8% -43.3% 184.6% --------------------------------------------------------------------- Comparative Segment Data For The Three Months Ended September 30, 2002 compared with 2001 ---------------------------------------------------------------------- eResourcing Executive Total Search ---------------------------------------------------------------------- Total Commissions & Fees $ (19,263) $ (6,999) $ (77,149) Adj. Operating Income (Loss)(1) $ (13,737) $ (318) $ (46,381) % Change: ---------------------------------------------------------------------- - Commissions & Fees -17.9% -30.5% -21.4% - Adj. Operating Income (Loss) -178.5% -93.8% -69.0% ----------------------------------------------------------------------

Moving.com Acquisition

During the quarter, TMP Worldwide's Directional Marketing division acquired Moving.com, one of the largest online marketplaces for relocation services and information. Moving.com is expected to enhance the division's Monstermoving.com product offerings and bolster its presence and position in the online relocation sector. This strategic acquisition brings a new dimension to Monstermoving.com by capturing new traffic and leveraging an intuitive URL. Through the combined resources, consumers will have access to a premier network of relocation related services currently viewed by a total monthly audience of approximately 2.5 million visitors. Balance Sheet Remains Strong

In the third quarter of 2002, cash provided by operations was $29.9 million and capital expenditures totaled $14.6 million. In addition, TMP used cash of $9.8 million in the third quarter of 2002 to repurchase 927,000 shares of its own common stock in the open market, at an average price of $10.62 per share, in connection with its five million share buyback program announced in September 2002. Net cash as of September 30, 2002 was $181.8 million, relatively flat when compared with $183.0 million as of June 30, 2002. Days Sales Outstanding ("DSO") was 65 at September 30, 2002, as compared to 66 days at June 30, 2002. Nine Month Results

Nine month comparative results for TMP Worldwide are as follows (dollar amounts in thousands, except per share amounts):

---------------------------------------------------------------------- Operating Highlights 9M 02 9M 01 (4) % Change ---------------------------------------------------------------------- Total Commissions & Fees $865,800 $1,121,974 -23% Interactive Commissions & fees $390,030 $507,586 -23% Adjusted Operating Expenses (1) $797,770 $960,073 -17% Adjusted Operating Income (1) $68,030 $161,901 -58% Adjusted Operating Margin (1) 7.9% 14.4% -46% Adjusted EBITDA (1) $112,391 $200,158 -44% Adjusted Net Income (2) $46,819 $111,092 -58% Adjusted Diluted EPS (3) $0.41 $0.98 -58% Diluted Weighted Avg. Shares 113,103 113,215 0% ----------------------------------------------------------------------

Update on eResourcing and Executive Search Spin-off

As previously announced, TMP Worldwide plans to spin off its eResourcing and Executive Search business units, in the form of a tax-free dividend to its shareholders. These business units will be combined in a new, publicly traded company. Led by industry veteran Jon Chait as Chief Executive Officer, the new company will have a separate board of directors and will enter the marketplace as one of the world's leading staffing firms.

Separate unaudited condensed consolidated statements of operating income for the three and nine months ending September 30, 2002 for the businesses that will comprise both the new company ("NewCo.") and the remaining companies ("OldCo."), including allocation of corporate overhead for both, based on TMP's current structure, are included in this press release as supplementary financial information. TMP expects to file a preliminary Registration Statement for the spin-off with the Securities and Exchange Commission in December 2002.

The spin-off is subject to a number of customary conditions, such as receipt of an opinion that the spin-off will be tax-free for federal income tax purposes and the effectiveness of the registration statement relating to the shares of the new company. The company expects the transaction to be completed in the first quarter of 2003. Outlook

Michael Sileck, Chief Financial Officer of TMP Worldwide, commented, "Indicative of the progress we have made right-sizing the business from a cost standpoint, adjusted operating expenses for the quarter were down 10% as compared to a year ago. We will continue to focus on managing our business prudently and believe the proposed spin-off will provide the two companies with both the capital structure and management focus required for long-term growth and success."

OldCo. expected results are anticipated to be generally consistent with the company's view of Q4 that was provided on the last quarterly conference call with the exception of Monster Europe revenues, which are anticipated to be flat sequentially. Monster sales for North America are anticipated to grow sequentially in Q4 in part because of a higher available renewal base.

NewCo. results reflect the continued sluggishness in the labor markets generally and the staffing business specifically. The tables below present guidance for the 2002 fourth quarter for OldCo. and NewCo., by operating division, after allocation of corporate overhead, which will vary post spin-off (dollars in millions, except per share amounts):

---------------------------------------------------------------------- OldCo. Q4' 02(a) Operating marigns ---------------------------------------------------------------------- Monster $ 101.0 11% Advertising & Communications 41.1 1% Directional Marketing 29.4 2% -------------------------------------------------------------------- Total Commissions & Fees $ 171.5 7% Adjusted Operating Income(1) $ 12.4 Adjusted EBITDA(1) $ 21.7 Adjusted Diluted EPS(b)(2) $ 0.08 ---------------------------------------------------------------------- ---------------------------------------------------------------------- NewCo. Q4' 02(a) Operating marigns ---------------------------------------------------------------------- eResourcing $ 85.8 -12% Executive Search 15.6 -15% ---------------------------------------------------------------------- Total Commissions & Fees $ 101.4 -12% Adjusted Operating Loss(1) $ (12.5) Adjusted EBITDA(1) $ (7.6) Adjusted Diluted EPS(b)(2) $ (0.08) ----------------------------------------------------------------------

(a) Expectations

(b) EPS amounts are based on current TMP diluted shares outstanding

and are not an indication of the shares to be issued in connection

with the spin-off. Adjusted diluted EPS for TMP (OldCo. & NewCo.) is

anticipated to be zero.

As a consequence of the proposed spin-off, previously released 2003 outlook scenarios are no longer relevant, and therefore not applicable. The Company intends to provide a further update at its annual Analyst Day conference on December 3, 2002. About TMP Worldwide

Founded in 1967, TMP Worldwide Inc., with approximately 9,000 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 43.4 million unique visits during the month of September 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, Germany, Ireland, Spain, Luxembourg, India, Italy, Sweden, Norway, Denmark, Switzerland, Finland and Scotland. Monster is the official online career management services sponsor of the 2002 Olympic Games and the 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 nine months ending September 30, 2002 and 2001 and condensed consolidated balance sheets for September 30, 2002, June 30, 2002 and December 31, 2001 for TMP Worldwide Inc. and subsidiaries follow. For an investment kit, please contact David Rosa at (212) 351-7067 or visit www.tmp.com.

Third quarter 2002 results will be discussed on TMP Worldwide's quarterly conference call taking place on November 7, 2002. To join the conference call, please dial in on 1-800-633-8620 at 8:20 AM EST. For those outside the United States, please call in on 1-212-346-6395. The call will begin promptly at 8:30 AM E.S.T. 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.

Endnotes 1 Operating expenses, operating income, 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 September 30, 2002 and 2001, merger and integration costs (benefits) were $(0.9) million and $20.2 million, respectively. Business reorganization and other special charges was $2.6 million for the three months ended September 30, 2002. Goodwill amortization for the September 2001 quarter was $6.8 million. For the nine months ended September 30, 2002 and 2001, merger and integration costs were $10.7 million and $61.9 million, respectively. Business reorganization and other special charges was $117.0 million for the nine months ended September 30, 2002. Goodwill amortization was $17.6 million for the nine months ended September 30, 2001. 2 Net income and diluted earnings per share 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 nine months ended September 30, 2002. The after-tax merger and integration costs (benefits) were $(0.7) million and $14.0 million for the three months ended September 30, 2002 and 2001, respectively. The after-tax business reorganization and other special charges was $2.1 million for the three months ended September 30, 2002. The after-tax merger and integration costs for the nine months ended September 30, 2002 and 2001 were $7.9 million and $44.8 million, respectively. The after-tax business reorganization and other special charges was $94.4 million for the nine months ended September 30, 2002. The after-tax amount of goodwill amortization for the three and nine months ended September 30, 2001 was $5.9 million and $15.1million, respectively. 3 Net income applicable to common and Class B shareholders after excluding the cumulative effect of change in accounting principle, merger and integration costs and business reorganization and other special charges, and, for 2001, goodwill amortization, net of the tax benefits thereon. 4 Prior period results are adjusted to exclude the effects of merger and integration costs and goodwill amortization.

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 Nine Months Ended September 30, (in thousands, except per share amounts) (unaudited) 2002 2001 ----------- ----------- Gross billings: Interactive $416,258 $563,243 Advertising & Communications 442,652 589,852 Directional Marketing 504,295 440,640 eResourcing 249,989 324,049 Executive Search 51,638 86,963 ---------------------------------------------- ----------- ----------- Total gross billings $1,664,832 $2,004,747 ============================================== =========== =========== Commissions & fees: Interactive $390,030 $507,586 Advertising & Communications 105,721 140,836 Directional Marketing 78,708 75,239 eResourcing 239,780 311,351 Executive Search 51,561 86,962 ---------------------------------------------- ----------- ----------- Total commissions & fees: 865,800 1,121,974 ---------------------------------------------------------- ----------- Operating expenses: Salaries & related 480,039 574,123 Office & general 210,208 231,521 Marketing & promotion 105,082 152,437 Merger & integration 10,748 61,934 Business reorganization and other special charges 117,017 - Amortization of intangibles 2,441 19,578 ---------------------------------------------------------- ----------- Total operating expenses 925,535 1,039,593 ---------------------------------------------------------- ----------- Operating income (loss) (59,735) 82,381 ---------------------------------------------------------- ----------- Other income (expense) : Interest income, net 107 10,720 Other, net (207) 312 ---------------------------------------------- ----------- ----------- Total other income (expense), net (100) 11,032 ---------------------------------------------------------- ----------- Income (loss) before income taxes and minority interests (59,835) 93,413 Provision (benefit) for income taxes (2,862) 43,355 ---------------------------------------------------------- ----------- Income (loss) before minority interests (56,973) 50,058 Minority interests (1,550) (1,094) ---------------------------------------------- ----------- ----------- Income (loss) before cumulative effect of change in accounting principle (55,423) 51,152 Cumulative effect of change in accounting principle, net of tax (428,374) - ---------------------------------------------------------- ----------- Net income (loss) applicable to common and Class B common stockholders $(483,797) $51,152 ========================================================== =========== Adjusted net income (loss): Net income (loss) $(483,797) $51,152 Goodwill amortization, net of tax - 15,143 ---------------------------------------------------------- ----------- Net income (loss) adjusted for goodwill amortization (483,797) 66,295 Merger & integration 10,748 61,934 Business reorganization and other special charges 117,017 - Cumulative effect of change in accounting principle, net of tax 428,374 - Tax benefit on merger and integration costs (2,857) (17,137) Tax benefit on business reorganization and other special charges (22,666) - ---------------------------------------------------------- ----------- Adjusted net income $46,819 $111,092 -----------------------------------------------=========== =========== Basic earnings (loss) per share: Income (loss) before cumulative effect of change in accounting principle $(0.50) $0.47 Cumulative effect of change in accounting principle, net of tax (3.85) - ---------------------------------------------------------- ----------- Net income (loss) applicable to common and Class B common stockholders $(4.35) $0.47 ========================================================== =========== Diluted earnings (loss) per share: Income (loss) before cumulative effect of change in accounting principle $(0.50) $0.45 Cumulative effect of change in accounting principle, net of tax (3.85) - ---------------------------------------------------------- ----------- Net income (loss) applicable to common and Class B common stockholders $(4.35) $0.45 ========================================================== =========== Adjusted Diluted earnings per share: Net income (loss) $(4.35) $0.45 Goodwill amortization, net of tax - 0.13 ---------------------------------------------------------- ----------- Diluted income (loss) per share adjusted for goodwill amortization (4.35) 0.59 Merger & integration 0.09 0.57 Business reorganization and other special charges 1.05 - Cumulative effect of change in accounting principle, net of tax 3.85 - Tax benefit on merger and integration costs (0.03) (0.16) Tax benefit on business reorganization and other special charges (0.20) - ---------------------------------------------------------- ----------- Adjusted dilued earnings per share $0.41 $0.98 ---------------------------------------------------------- ----------- Weighted average shares outstanding: Basic 111,367 108,975 ============================================== =========== =========== Diluted 113,103 113,215 ============================================== =========== =========== Adjusted E B I T D A (b) $112,391 $200,158 ========================================================== =========== (b) Earnings before interest, income taxes, depreciation and amortization, are 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 September 30, (in thousands, except per share amounts) (unaudited) 2002 2001 --------- --------- Gross billings: Interactive $138,057 $190,855 Advertising & Communications 145,692 172,552 Directional Marketing 195,726 165,293 eResourcing 80,945 90,136 Executive Search 15,884 22,956 ------------------------------------------------------------ --------- Total gross billings $576,304 $641,792 ============================================================ ========= Commissions & fees: Interactive $128,252 $174,319 Advertising & Communications 34,584 48,317 Directional Marketing 28,965 28,832 eResourcing 76,415 86,749 Executive Search 15,808 22,956 ------------------------------------------------------------ --------- Total commissions & fees: 284,024 361,173 ------------------------------------------------------------ --------- Operating expenses: Salaries & related 154,556 179,798 Office & general 67,513 71,722 Marketing & promotion 40,346 41,743 Merger & integration (902) 20,208 Business reorganization and other special charges 2,597 - Amortization of intangibles 750 7,473 ------------------------------------------------------------ --------- Total operating expenses 264,860 320,944 ------------------------------------------------------------ --------- Operating income 19,164 40,229 ------------------------------------------------------------ --------- Other income: Interest income, net 26 1,345 Other, net 447 912 -------------------------------------------------- --------- --------- Total other income, net 473 2,257 ------------------------------------------------------------ --------- Income before income taxes and minority interests 19,637 42,486 Provision for income taxes 6,131 17,389 ------------------------------------------------------------ --------- Income before minority interests 13,506 25,097 Minority interests (497) (534) ------------------------------------------------------------ --------- Net income applicable to common and Class B common stockholders $14,003 $25,631 ============================================================ ========= Adjusted net income: Net income $14,003 $25,631 Goodwill amortization, net of tax - 5,858 ------------------------------------------------------------ --------- Net income adjusted for goodwill amortization 14,003 31,489 Merger & integration (902) 20,208 Business reorganization and other special charges 2,597 - Tax (benefit) expense on merger and integration costs 239 (6,256) Tax benefit on business reorganization and other special charges (503) - ------------------------------------------------------------ --------- Adjusted net income $15,434 $45,441 ================================================== ========= ========= Basic earnings per share: Net income applicable to common and Class B common stockholders $0.13 $0.23 ============================================================ ========= Diluted earnings per share: Net income applicable to common and Class B common stockholders $0.12 $0.23 ============================================================ ========= Adjusted Diluted earnings per share: Net income $0.12 $0.23 Goodwill amortization, net of tax - 0.05 ------------------------------------------------------------ --------- Diluted income per share adjusted for goodwill amortization 0.12 0.28 Merger & integration - 0.18 Business reorganization and other special charges 0.02 - Tax benefit on merger and integration costs - (0.06) ------------------------------------------------------------ --------- Adjusted diluted earnings per share $0.14 $0.40 ------------------------------------------------------------ --------- Weighted average shares outstanding: Basic 111,519 109,862 ================================================== ========= ========= Diluted 112,076 113,665 ================================================== ========= ========= Adjusted E B I T D A (b) $36,066 $80,989 ============================================================ ========= (b) Earnings before interest, income taxes, depreciation and amortization, are 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 BALANCE SHEETS (in thousands) (unaudited) Sept. 30, June 30, Dec. 31, 2002 2002 2001 ----------- ------------ ----------- Assets: Cash and cash equivalents $199,901 $ 213,340 $ 340,581 Accounts receivable, net 510,425 496,385 507,373 Property and equipment, net 168,302 166,833 192,695 Intangibles, net 564,900 554,031 939,847 Other assets 196,039 227,490 225,866 --------------------------- ---------- ---------- ----------- Total Assets $1,639,567 $1,658,079 $ 2,206,362 =========================== ========== ========== =========== Liabilities and Stockholders' Equity: Accounts payable and accrued expenses $ 565,315 $ 566,739 $ 647,229 Accrued integration and restructuring 29,284 35,922 44,121 Accrued business reorganization costs 53,805 67,271 - Deferred commissions and fees 130,562 139,081 139,100 Other liabilities 20,626 19,512 70,686 Debt 18,079 30,378 75,964 --------------------------- ---------- ---------- ----------- Total Liabilities 817,671 858,903 977,100 Stockholders' Equity 821,896 799,176 1,229,262 --------------------------- ---------- ---------- ----------- Total Liabilities and Stockholders' Equity $1,639,567 $ 1,658,079 $ 2,206,362 =========================== ========== ========== =========== OldCo.(a) CONDENSED CONSOLIDATED STATEMENT OF OPERATING INCOME For the Nine Months Ended September 30, (in thousands, except per share amounts) (unaudited) 2002 2001 ---- ---- Commissions & fees: Monster(b) $ 316,579 $ 420,232 Advertising & Communications 128,722 160,226 Directional Marketing 92,675 91,388 ------------------------------ ---------- ---------- Total commissions & fees: 537,976 671,846 Operating expenses: Salaries & related, office & general and marketing & promotion 451,297 537,383 Merger & integration 4,692 32,951 Business reorganization and other special charges 63,884 - Amortization of intangibles 1,862 8,844 ------------------------------- ---------- ---------- Total operating expenses 521,735 579,178 ------------------------------- ---------- ---------- Operating income $ 16,241 $ 92,668 =============================== ========== ========== Adjusted operating income: Operating income $ 16,241 $ 92,668 Merger & integration 4,692 32,951 Business reorganization and other special charges 63,884 - Goodwill amortization - 7,107 ------------------------------- ---------- ---------- Adjusted operating income $ 84,817 $ 132,726 =============================== ========== ========== Adjusted EBITDA (c) $ 114,440 $ 158,375 =============================== ========== ========== (a) 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. (b) For the nine months ended September 30, 2002 and 2001, Monster commissions and fees include $15.9 million and $17.2 million for Monster services sold by eResourcing, a division which will be spun-off as part of NewCo. (c) Earnings before interest, income taxes, depreciation and amortization, are 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.(a) CONDENSED CONSOLIDATED STATEMENT OF OPERATING INCOME For the Three Months Ended September 30, (in thousands, except per share amounts) (unaudited) 2002 2001 ---- ---- Commissions & fees: Monster(b) $ 103,169 $ 144,800 Advertising & Communications 42,166 51,123 Directional Marketing 34,137 34,436 --------------------------- ---------- ---------- Total commissions & fees: 179,472 230,359 --------------------------- ---------- ---------- Operating expenses: Salaries & related, office & general and marketing & promotion 152,026 170,564 Merger & integration - 9,361 Business reorganization and other special charges 2,190 - Amortization of intangibles 564 3,369 --------------------------- ---------- ---------- Total operating expenses 154,780 183,294 --------------------------- ---------- ---------- Operating income $ 24,692 $ 47,065 =========================== ========== ========== Adjusted operating income: Operating income $ 24,692 $ 47,065 Merger & integration - 9,361 Business reorganization and other special charges 2,190 - Goodwill amortization - 2,782 --------------------------- ---------- ---------- Adjusted operating income $ 26,882 $ 59,208 =========================== ========== ========== Adjusted EBITDA (c) $ 36,932 $ 68,916 =========================== ========== ========== (a) 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. (b) For the three months ended September 30, 2002 and 2001, Monster commissions and fees include $5.9 million and $7.1 million for Monster services sold by eResourcing, a division which will be spun-off as part of NewCo. (c) 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.(a) CONDENSED CONSOLIDATED STATEMENT OF OPERATING INCOME For the Nine Months Ended September 30, (in thousands, except per share amounts) (unaudited) 2002 2001 --------- --------- Commissions & fees: eResourcing $275,727 $363,142 Executive Search 52,097 86,986 --------------------------- ---------- ---------- Total commissions & fees: 327,824 450,128 --------------------------- ---------- ---------- Operating expenses: Salaries & related, office & general and marketing & promotion 344,032 420,698 Merger & integration 6,056 28,983 Business reorganization and other special charges 53,133 - Amortization of intangibles 579 10,734 --------------------------- ---------- ---------- Total operating expenses 403,800 460,415 --------------------------- ---------- ---------- Operating loss $(75,976) $(10,287) ============================ =========== ========== Adjusted operating income (loss): Operating loss $(75,976) $(10,287) Merger & integration 6,056 28,983 Business reorganization and other special charges 53,133 - Goodwill amortization - 10,478 --------------------------- ---------- ---------- Adjusted operating income (loss) $(16,787) $29,174 =========================== ========== ========== Adjusted EBITDA (b) $(2,049) $41,783 =========================== ========== ========== (a) 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. (b) Earnings before interest, income taxes, depreciation and amortization, are 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.(a) CONDENSED CONSOLIDATED STATEMENT OF OPERATING INCOME For the Three Months Ended September 30, (in thousands, except per share amounts) (unaudited) 2002 2001 -------- --------- Commissions & fees: eResourcing $88,590 $107,853 Executive Search 15,962 22,961 --------------------------- ---------- ---------- Total commissions & fees: 104,552 130,814 --------------------------- ---------- ---------- Operating expenses: Salaries & related, office & general and marketing & promotion 110,389 122,699 Merger & integration (902) 10,847 Business reorganization and other special charges 407 - Amortization of intangibles 186 4,104 --------------------------- ---------- ---------- Total operating expenses 110,080 137,650 --------------------------- ---------- ---------- Operating loss $(5,528) $(6,836) =========================== =========== =========== Adjusted operating income (loss): Operating loss $(5,528) $(6,836) Merger & integration (902) 10,847 Business reorganization and other special charges 407 - Goodwill amortization - 4,022 --------------------------- ---------- ---------- Adjusted operating income (loss) $(6,023) $8,033 =========================== =========== ========== Adjusted EBITDA (b) $(866) $12,073 =========================== =========== ========== (a) 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. (b) Earnings before interest, income taxes, depreciation and amortization, are 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.

CONTACT:

TMP Worldwide David Rosa, 212/351-7067 david.rosa@tmp.com or Weber Shandwick Christian Harper, 212/445-8135 charper@webershandwick.com