TMP Worldwide Reports Record First Quarter Results
NEW YORK, May 6, 1998 -- TMP Worldwide Inc. (NASDAQ: TMPW), a leader in Internet recruiting, one of the world's largest recruitment advertising agencies and the world's largest yellow page advertising agency, today announced commissions and fees of $72,997,000 for the quarter ended March 31, 1998 compared to $45,983,000 for the first quarter of 1997, an increase of 59%.
The company also announced the acquisition of two European recruitment advertising agencies, bringing the total number of completed acquisitions made by the company this year to four.
Internet revenue for the quarter ended March 31, 1998, was $7,702,000 as compared to $3,769,000 for the same quarter in 1997, an increase of 104%. Commissions and fees from recruitment advertising and other recruitment related services were $43,726,000 for the quarter ended March 31, 1998, as compared with $22,500,000 for the same quarter in 1997, an increase of 94%. Yellow page advertising commissions and fees for the quarter ended March 31, 1998 were $21,569,000, as compared to $19,714,000 for the same quarter in 1997, an increase of 9.0%.
The company reported an operating profit for the quarter ended March 31, 1998 of $6,765,000, an increase of 35% when compared to an operating profit of $4,995,000 for the comparable period in 1997. For the quarter ended March 31, 1998, net income applicable to common and Class B common stockholders was $2,360,000, or $0.09 per diluted share, on 27,128,000 weighted average diluted shares outstanding, as compared to net income of $1,387,000, or $0.06 per diluted share in the prior year on 23,789,000 weighted average diluted shares outstanding, a 50% increase in earnings per share.
Earnings before interest, income taxes, depreciation and amortization (EBITDA) were $11,406,000 for the quarter ended March 31, 1998 as compared to $7,702,000 in the comparable period in 1997, a 48% increase.
Internet Strategy On Target
"We had another strong quarter highlighted by the significant performance of our Interactive Division," said Andrew J. McKelvey, chairman and CEO of TMP Worldwide. "The Internet has evolved into an essential component of the hiring process and we have been able to capitalize on this evolution by developing products that meet the needs of both job seekers and clients.
"The quarter by quarter growth of our Internet revenues and traffic, attributable to the measurable results delivered by The Monster Board and Online Career Center, indicates our strategy is on target," McKelvey added.
According to McKelvey, Internet revenue for the first quarter of 1998 increased 35% over the fourth quarter of 1997, which was up 20% from the third quarter of 1997. In addition, traffic to The Monster Board (www.monster.com) and OCC (www.occ.com) surpassed 3.7 million unique visits a month, according to March Nielsen I/PRO reports.
Media Metrix, THE PC METER Company's March rankings reported that The Monster Board was the number one online career Web site receiving 26% more unique visitors than its next leading competitor.
Part of The Monster Board and OCC's success can be attributed to TMP Worldwide's alliance strategy, which has proven effective in driving job seekers to its Web Sites. In early April, Lycos, Inc. became the most recent addition to this already impressive list of more than 40 strategic alliances, which includes AOL, Excite, USA Today.com and Yahoo! Classifieds.
European Acquisitions Add German Office
TMP Worldwide enters the German market for the first time with the acquisition of Wiesbaden-based Fossler & Partners, one of the largest recruitment advertising agencies in Germany. In addition, the Company's acquisition of Quadrant, a recruitment advertising agency in the Netherlands is its six in this country. Combined, these two acquisitions represent approximately $2.0 million in annual commissions and fees for the Company.
In addition, the Company's acquisition of Johnson Smith & Knisely, Inc., the 12th largest executive search firm in the United States with 1997 revenues of $20 million closed today in a stock for stock transaction. The acquisition, first announced in early April, represents the Company's entrance into the $6.5 billion worldwide executive search marketplace. TMP Worldwide also recently acquired The Corporate Group, a Boston-based human resources consulting firm that typically works with Fortune 500 corporations human resource departments to develop their overall internal systems and workflow strategies.
According to McKelvey, many clients were looking to TMP Worldwide to provide a wider range of strategic staffing services including executive search and the Company felt it was critical that they develop an in-house capability to meet their demands. TMP Worldwide's Interactive Division has already started exploring ways to move executive search and selection online and is working on Internet applications for both these industries. By leveraging The Monster Board and OCC, McKelvey believes TMP Worldwide will ultimately transform the executive search industry.
The above statements include forward-looking statements based on current management expectations. Factors that could cause future results to differ from these expectations include the following: 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 is a leader in Internet recruiting, one of the world's largest recruitment advertising agencies and the world's largest yellow page advertising agency with more than 3,300 employees in 11 countries. The Company is also a provider of direct marketing services. TMP Worldwide's clients include more than 70 of the Fortune 100 and more than 285 of the Fortune 500 companies. The company's Internet offerings include The Monster Board, the largest and most successful career center on the World Wide Web; Online Career Center, the Internet's earliest career site; MedSearch, (www.medsearch.com), the primary online "help wanted" service for the health care industry; and Be the Boss (www.betheboss.com), a leading provider of information on franchise opportunities.
A consolidated statement of operations for the first quarter of 1998 for TMP Worldwide Inc. and subsidiaries follows. For an investment information kit on TMP Worldwide, please contact James J. Treacy at (212) 527-8604 or visit the company's Web site at www.tmpw.com.
TMP WORLDWIDE INC CONDENSED CONSOLIDATED STATEMENT OF INCOME For the Three Months Ended (in thousands, except per share amounts)
March 31, 1998
March 31, 1997
Commissions & fees:
Salary & related costs
Office & general
Amortization of intangibles
Total operating expenses
Operating income (loss)
Other income (expense):
Interest expense, net
Total other income (expense), net
Income before taxes, minority interests & equity in earnings (losses) of affiliates
Provision for income taxes
Income before minority interests & equity in earnings (losses) of affiliates
Equity in earnings (losses) of affiliates
Net income applicable to common and Class B common stockholders
Net income per basic share
Net income per diluted share
Weighted average basic shares outstanding
Weighted average diluted shares outstanding
E B I T D A*
* Earnings before interest, income taxes, depreciation and amortization. EBITDA is presented to provide additional information about the Company's ability to meet its future debt service, capital expenditure 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.