TMPW Announces 55% Increase In Total Commissions And Fees For Third Quater Of 1998

Reports Third Quarter As Adjusted Diluted EPS of $0.26

Company's Interactive Division, Led by The Monster Boardr,
Reports Operating Profit for Second Consecutive Quarter

NEW YORK, November 3, 1998 -- TMP Worldwide Inc. (NASDAQ: TMPW), the leading provider of traditional and online career solutions as well as the world's largest yellow page advertising agency, today announced total commissions and fees of $103,737,000 for the quarter ended September 30, 1998 compared to $66,724,000 for the third quarter of 1997, an increase of 55%.

In addition, for the second consecutive quarter, TMP's Interactive Division, led by The Monster Board, posted an operating profit, making the company's Internet business profitable through the first nine months of the year. The Interactive Division reported a third quarter operating profit of $775,000. Internet revenue for the third quarter of 1998 increased 182% to $13,312,000 from $4,714,000 in the third quarter of 1997.

Recruitment advertising commissions and fees were $39,609,000 for the third quarter of 1998, compared to $30,606,000 for the third quarter of 1997, a 29% increase. Yellow page advertising commissions and fees were $29,545,000 for the third quarter of 1998, as compared to $28,625,000 for the third quarter of 1997, a 3% increase. Commissions and fees for the company's search and selection division, reported separately from TMP's recruitment advertising business for the first time, were $21,271,000 for the third quarter of 1998 as compared to $2,779,000 for the third quarter of 1997, a 665% increase.

"Solid quarterly results were posted across all of our business lines and of particular significance is the continued, impressive growth of our career focused services," said Andrew J. McKelvey, chairman and CEO of TMP Worldwide. "Leading this growth is our Interactive Division, anchored by The Monster Board, which has continued to post impressive results within a distinct online category – careers." According to McKelvey, nine month revenues for TMP's Interactive Division exceeded $31 million and the Division reported a year-to-date operating profit of approximately $150,000

"The continued success of our Interactive Division is a result of, among other things, a highly focused strategy that lead us to create a suite of traditional and online products and services designed to serve employers and employees for a lifetime," said McKelvey. "With more than 34,000 companies, including 384 of the Fortune 500, currently posting at least one paid job on our online career products and more than 5.2 million job seekers visiting our Web sites during September, our ‘intern to CEO' strategy is clearly resonating with both clients and job candidates.

Excluding merger costs of $7,090,000, the majority of which were related to employee stay bonuses incurred in connection with the company's third quarter acquisitions of TASA Holding, AG, an international executive search firm and Stackig Advertising, a leading high-tech communications agency and the Company's May acquisition of Johnson, Smith & Knisely, Inc., the 12th largest executive search firm in the United States, all of which are being accounted for as poolings of interests, the company reported an operating profit for the third quarter of 1998 of $15,902,000, as compared to $10,301,000 for the comparable period in 1997, an increase of 54%.

For the quarter ended September 30, 1998, excluding merger costs net of tax benefits, net income applicable to common and Class B common stockholders was $7,712,000 or $0.26 per diluted share, on 29,941,000 weighted average shares outstanding as compared to net income applicable to common and Class B common stockholders of $4,128,000, or $0.17 per diluted share for the third quarter of 1997 on 24,533,000 weighted average shares outstanding, an 87% increase in net income and a 53% increase in EPS.

Earnings before interest, income taxes, depreciation and amortization (EBITDA), excluding merger costs, increased 45% to $19,974,000 for the third quarter of 1998, versus $13,740,000 for the comparable period in 1997.

Nine Month Performance

TMP reported commissions and fees of $263,012,000 for the nine months ended September 30, 1998, compared to $167,343,000 for the year-earlier period, an increase of 57%. Internet revenue increased 146% to $31,724,000 for the nine months ended September 30, 1998 from $12,922,000 for the nine months ended September 30, 1997.

Excluding merger costs of $9,577,000, the majority of which were related to employee stay bonuses incurred in connection with the company's third quarter acquisitions of TASA Holding, AG and Stackig Advertising and the company's May acquisition of Johnson, Smith & Knisely, Inc., all of which are being accounted for as poolings of interests, the company reported an operating profit for the first nine months of 1998 of $34,657,000 compared to $21,302,000 for the same period in 1997, an increase of 63%.

For the nine months ended September 30, 1998, excluding merger costs net of tax benefits, net income applicable to common and Class B common stockholders was $15,519,000 or $0.55 per diluted share, on 28,223,000 weighted average shares outstanding as compared to net income applicable to common and Class B common stockholders of $7,423,000, or $0.31 per diluted share, for the nine months ended September 30, 1997 on 24,110,000 weighted average shares outstanding, a 109% increase in net income and a 77% increase in EPS.

Excluding merger costs EBITDA for the first nine months of 1998 was $48,388,000 versus $30,895,000 for the same period in 1997, an increase of 57%.

Acquisitions Continue to Build Infrastructure, Expand Capabilities

TMP is also announcing three new acquisitions today, bringing the company's total number of acquisitions closed in 1998 to 16. The company estimates that the addition of Daniel Porte, Recruitment Solutions and the Smart Group will add approximately $7.0 million in annualized commissions and fees in fiscal 1999.

Daniel Porte, a Paris-based firm specializing in search and selection services with 55 employees and offices in five French cities, was acquired by TMP late in the third quarter.

Boston-based Recruitment Solutions, acquired in October by TMP in a pooling transaction for approximately 101,000 TMP Worldwide shares, designs hiring processes to address companies' individual recruitment challenges. With capabilities to handle hiring at all levels, Recruitment Solutions offers job analysis and benchmarking, creative sourcing strategies, vendor selection and management. The company has 16 employees.

Yesterday, TMP acquired the Smart Group, a yellow page advertising agency, in a pooling transaction for approximately 310,000 TMP Worldwide shares. Located in Atlanta, the Smart Group boasts major clients in the telecommunications industry.

Search and Selection Expands Capabilities

TMP continued to expand its search and selection capabilities as well, completing the acquisition of TASA International of Zurich, Switzerland for approximately 1.7 million TMP Worldwide shares in a pooling of interests transaction during the third quarter. TMP's executive search business now operates under the name TASA Worldwide following the third quarter combination of the businesses of Johnson, Smith & Knisely and TASA International. According to Hunt-Scanlon Advisors, a Greenwich, Conn. consulting firm that tracks the executive search industry, TASA Worldwide is now one of the 10 largest wholly-owned global executive search firms in the world with revenue of more than $60 million.

The company also launched a new division, MSL(US) to address the middle level management needs of corporate America, typically handled by contingency headhunters. This new division is an expansion of TMP's worldwide selection business, which operates as MSL in Europe. MSL(US) is a retained selection solution that integrates interactive and print media advertising with traditional search methods. MSL(US) is leveraging the technological features of The Monster Board to streamline the candidate screening process, making the process more efficient for clients.

In addition, in August TMP announced plans to acquire Morgan & Banks, the largest executive selection and search firm in Australasia and one of the largest in the world. The company expects the transaction to close before the end of the year.

"With the goal of providing comprehensive career opportunities and resources from ‘first job to last,' we've rapidly developed a search and selection capability to meet the higher level staffing needs of our clients," said McKelvey. "At the same time, we're leveraging these new businesses to expand The Monster Board network and increase the site's overall value to our key audiences."

Special Note

The above statements include forward-looking statements based on current management expectations. Factors that could cause future results to differ from these expectations include 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 the leading provider of traditional and online career solutions and the world's largest yellow page advertising agency with more than 3,550 employees in 19 countries. The company is also a provider of direct marketing services. TMP Worldwide's clients in the company's traditional lines of business include more than 70 of the Fortune 100 and more than 285 of the Fortune 500 companies.

The TMP Worldwide Interactive career portal delivers the most comprehensive set of career services on the Web including The Monster Board (www.monster.com), the largest and most successful career center on the World Wide Web; Online Career CenterSM (OCC) (www.occ.com), the Internet's earliest career site; MedSearch SM, (www.medsearch.com), the primary online "help wanted" service for the health care industry; Be the Boss SM (www.betheboss.com), a leading provider of information on franchise opportunities; About Work (www.aboutwork.com), the most comprehensive provider of career advice and information, and StudentCenter (www.studentcenter.com), which includes the largest online Internship database.

TMP WORLDWIDE INC
CONDENSED CONSOLIDATED STATEMENT OF INCOME
For the Three Months Ended
(in thousands, except per share amounts) September 30, September 30,
1998 1997
------------- -------------Gross billings:
Recruitment $195,591 $151,130
Yellow pages 143,618 139,533
Search & selection 21,271 2,779
Internet 14,467 4,993
========== =========
Total $374,947 $298,435
========== =========Commissions & fees:
Recruitment $39,609 $30,606
Yellow pages 29,545 28,625
Search & selection 21,271 2,779
Internet 13,312 4,714
---------- ----------
Total revenue 103,737 66,724
---------- ----------Operating expenses:
Salary & related costs 56,083 33,096
Office & general 30,049 21,798
Merger costs 7,090 0
Amortization of intangibles 1,703 1,529
--------- ---------
Total operating expenses 94,925 56,423
--------- ----------Operating income 8,812 10,301
--------- ----------Other income (expense):
Interest expense, net (2,607) (2,386)
Other (710) (53)
--------- ----------Total other income (expense), net (3,317) (2,439)
--------- ---------Income before taxes, minority interests
& equity in earnings (losses) of
affiliates 5,495 7,862Provision for income taxes 1,858 3,690
---------- ---------
Income before minority interests
& equity in earnings (losses) of
affiliates 3,637 4,172Minority interests 0 29
Equity in earnings (losses) of affiliates (123) (15)
--------- --------
Net income applicable to common
and Class B common stockholders $3,514 $4,128
========== ========Adjusted net income:
Net income $3,514 $4,128
Merger costs 7,090 0
Tax benefit of merger costs (2,892) 0
========== ========
Adjusted net income $7,712 $4,128
========== ========Net income per basic share $0.12 $0.17
========== ========Net income per diluted share $0.12 $0.17
==========Adjusted net income per basic share $0.27
==========Adjusted net income per diluted share $0.26
==========Weighted average basic shares outstanding 29,074 23,978
========== =========Weighted average diluted shares outstanding 29,941 24,533
========== =========Adjusted EBITDA(a) $19,974 $13,740
========== =========(a) Earnings before interest, income taxes, depreciation and
amortization and adjusted to exclude the effects of merger costs
for poolings. 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 STATEMENT OF INCOME
For the Nine Months Ended
(in thousands, except per share amounts) September 30, September 30,
1998 1997
---------------------------Gross billings:
Recruitment $586,071 $389,235
Yellow pages 372,899 349,910
Search & selection 34,985 5,296
Internet 34,823 13,548
============ ============
Total $1,028,778 $757,989
============ ============
Commissions & fees:
Recruitment $120,321 $77,750
Yellow pages 75,982 71,375
Search & selection 34,985 5,296
Internet 31,724 12,922
------------ ------------
Total revenue 263,012 167,343
------------ ------------Operating expenses:
Salary & related costs 137,922 83,580
Office & general 84,105 58,083
Merger costs 9,577 0
Amortization of intangibles 6,328 4,378
------------- ------------
Total operating expenses 237,932 146,041
------------- ------------Operating income 25,080 21,302
------------- ------------
Other income (expense):
Interest expense, net (7,465) (6,434)
Other (803) (50)
------------- ------------
Total other income (expense), net (8,268) (6,484)
------------- ------------
Income before taxes, minority interests
& equity in earnings (losses) of affiliates 16,812 14,818Provision for income taxes 7,204 6,996
------------ ------------Income before minority interests
& equity in earnings (losses) of affiliates 9,608 7,822Minority interests 0 256
Equity in earnings (losses) of affiliates (297) (20)
------------ ------------
Net income 9,311 7,546Preferred dividend 0 (123)
------------ ------------Net income applicable to common
and Class B common stockholders $9,311 $7,423
============ ============Adjusted net income:
Net income $9,311 $7,423
Merger costs 9,577 0
Tax benefit of merger costs (3,369) 0
============ ============
Adjusted net income $15,519 $7,423
============ ============Net income per basic share $0.34 $0.31
============ ============Net income per diluted share $0.33 $0.31
============ ============
Adjusted net income per basic share $0.57
============Adjusted net income per diluted share $0.55
============Weighted average basic shares outstanding 27,416 23,630
============ ============Weighted average diluted shares outstanding 28,223 24,110
============ ============Adjusted EBITDA(b) $48,388 $30,895
============ ============(b) Earnings before interest, income taxes, depreciation and
amortization and adjusted to exclude the effects of merger costs
for poolings. 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.