WESTON, Massachusetts, Feb. 10, 2015 /PRNewswire/ --
Monster Worldwide, Inc. (NYSE: MWW) today reported financial results for the fourth quarter ended December 31, 2014.
"We are successfully implementing our 'All the People, All the Jobs' strategy. Bookings in our key core North American Careers segment increased on a year over year basis reflecting strong customer acceptance of our traditional and new product solutions. In Europe, bookings were negatively impacted by currency, but on a constant currency basis were essentially flat. Revenue lagged our expectations primarily because of weakness in the Euro. Despite this weakness in revenue, we delivered Non-GAAP EPS of $0.07 and improved EBITDA," said Tim Yates, President and Chief Executive Officer.
"We are fully committed to delivering on the metrics we presented at our May 2014 Investor Conference and are making good progress on all of them. We are announcing a program designed to Reallocate maximum resources to our current Go To Market growth strategy. We believe this will Accelerate client adoption of our products and drive growth and profitability. The 'Reallocate to Accelerate' plan is anticipated to reduce annual operating expense by $38 million to $45 million and will cost $18 million to $23 million. We remain focused on improving profitability and plan to exit 2015 with a fourth quarter EBITDA margin of 18-22% and remain on target to achieving a 30-35% EBITDA margin by the second quarter of 2016."
Business Highlights
Fourth Quarter 2014 Results
Revenue of $186 million decreased 6% compared to the fourth quarter of 2013. Revenue in the fourth quarter of 2013 was $199 million. Revenue from the Company's Careers - North America operations decreased 4% year-over-year and revenue from Careers - International decreased 9% year-over-year. Internet Advertising & Fees revenue for the fourth quarter of 2014 was $16 million compared to $18 million in the fourth quarter of 2013, a decrease of 11%. Historical quarterly revenue data is available in the Company's supplemental financial information.
Total GAAP operating expenses were $516 million compared to $189 million in the fourth quarter 2013. The increase was a result of a pre-tax goodwill impairment charge of $326 million recorded in the fourth quarter of 2014. Net loss attributable to Monster for the fourth quarter of 2014 was $290 million, or ($3.31) per share, compared to net loss attributable to Monster of $20 million, or ($0.21) per share in the fourth quarter of 2013.
Non-GAAP net income attributable to Monster was $6 million or $0.07 per share, compared to $10 million, or $0.11 per share in the fourth quarter of 2013. Non-GAAP operating expenses of $172 million decreased 5% year over year. Adjusted EBITDA margin of 14% was led by Careers-North America with a 24% margin. Pro-forma items are described in the "Notes Regarding the Use of Non-GAAP Financial Measures" and are reconciled to the GAAP measure in the accompanying tables.
Net cash provided by operating activities in the quarter was $27 million and free cash flow was $18 million. Deferred revenue grew sequentially to $301 million or 7% compared to $281 million as of September 30, 2014. The Company ended the quarter with total available liquidity of approximately $121 million.
Full Year Results
Monster Worldwide reported total revenue of $770 million for the year ended December 31, 2014 compared to $808 million in 2013, a 5% decrease. Monster Careers revenue decreased 4% to $706 million, compared to $735 million in 2013. Internet Advertising & Fees reported revenue of $64 million, compared to $73 million in 2013. The Company reported a net loss attributable to Monster of $289 million or ($3.29), compared to a net loss attributable to Monster of $0.5 million, or break-even per share, in 2013.
Impairment of Goodwill
In the fourth quarter of 2014, primarily due to the reduction in Monster's market capitalization, the Company concluded that the carrying amount of goodwill exceeded its estimated fair value for both the Careers – North America and Internet Advertising & Fees operating segments. As a result, the Company recorded a pre-tax goodwill impairment charge of $263 million in Careers – North America and $63 million in Internet Advertising & Fees, for a total of $326 million, or $263 million on a net of tax basis. Tim Yates commented that: "The goodwill impairment does not in any way reflect management's lack of confidence in our strategy or our ability to substantially improve EBITDA and EBITDA margins as outlined today."
Reallocate to Accelerate
Monster today announced a series of cost savings initiatives to reduce costs globally while continuing to support our new strategy. The initiatives currently include a global workforce reduction of approximately 300 associates, or 7% of its full-time staff, consolidation of certain office facilities, and continuing discretionary-spending and office and general expense controls. The Company expects these reductions to result in annualized savings of approximately $38 million to $45 million, with the full impact of that savings beginning in the fourth quarter of 2015.
As a result of these initiatives, Monster expects to record a cumulative pre-tax charge within the range of $18 million to $23 million, all of which is expected to be cash expenditures. The majority of the associated charges are expected to be recorded in the first half of 2015.
Guidance
First quarter 2015 Non-GAAP EPS from continuing operations is expected to be in the range of $0.05 to $0.09, which excludes $5 million to $6 million of stock-based compensation, $1.2 million of non-cash debt discount amortization related to the convertible debt and restructuring charges related to our Reallocate to Accelerate program.
The Company expects to exit 2015 with a fourth quarter EBITDA margin of between 18-22%.
Historical data on Non-GAAP EPS is available in the Company's supplemental financial information.
Conference Call and Webcast
Fourth quarter 2014 results will be discussed on Monster Worldwide's quarterly conference call on February 10, 2015 at 8:30 AM ET. A live webcast of the conference call can be accessed online through the Investor Relations section of the Company's website at http://ir.monster.com. To join the conference call by telephone, please dial (888) 696-1396 or (706) 758-9636 and reference conference ID# 66404167. A presentation of financial slides will be referenced during the conference call and will be viewable through the live webcast. A PDF of the financial presentation can also be accessed directly through the Company's Investor Relations website at http://ir.monster.com.
The Company has also made available certain supplemental financial information which can be accessed directly through the Company's Investor Relations website at http://ir.monster.com.
For a replay of the conference call, please dial (855) 859-2056 or (404) 537-3406 and reference ID# 66404167. This number is valid until midnight on February 19, 2015.
About Monster Worldwide
Monster Worldwide, Inc. (NYSE: MWW) is a global leader in connecting people to jobs, wherever they are. For more than 20 years, Monster has helped people improve their lives with better jobs, and employers find the best talent. Today, the company offers services in more than 40 countries, providing some of the broadest, most sophisticated job seeking, career management, recruitment and talent management capabilities. Monster continues its pioneering work of transforming the recruiting industry with advanced technology using intelligent digital, social and mobile solutions, including our flagship website monster.com® and a vast array of products and services. For more information visit monster.com/about.
Special Note: The statements in this release that are not strictly historical, including, without limitation, statements regarding the Company's strategic direction, prospects and future results, 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 and, therefore, actual results may differ materially from what is expressed or implied herein and no assurance can be given that the Company will achieve, among other things, its outlook with respect to earnings per share for the first quarter of 2015 or EBITDA margins for the fourth quarter of 2015 and the second quarter of 2016. Factors that could cause results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, economic and other conditions in the markets in which we operate, risks associated with acquisitions or dispositions, competition, 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 into this release by reference. Many of the factors that will determine the Company's future results are beyond the ability of management to control or predict. Readers should not place undue reliance on the forward-looking statements in this release as they reflect management's views only as of the date hereof. The Company undertakes no obligation to revise or update any of the forward-looking statements contained in this release or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.
Notes Regarding the Use of Non-GAAP Financial Measures
The Company has provided certain Non-GAAP financial information as additional information for its operating results. These measures are not in accordance with, or an alternative for, generally accepted accounting principles ("GAAP") and may be different from non-GAAP measures reported by other companies. The Company believes that its presentation of non-GAAP measures provides useful information to management and investors regarding certain financial and business trends relating to its financial condition and results of operations.
Non-GAAP revenue, operating expenses, operating (loss) income, operating margin, (loss) income from continuing operations, loss from discontinued operations, net of tax, and diluted (loss) earnings per share attributable to Monster Worldwide, Inc. all exclude certain proforma adjustments including: non-cash stock based compensation expense; costs incurred in connection with the Company's restructuring programs; non-cash impairment charges; amortization of the debt discount and deferred financing costs associated with our 3.50% convertible senior notes due 2019; write-off of deferred financing costs relating to our former credit facility, amended in October 2014; severance charges primarily associated with the resignation of our former Chief Executive Officer, effective November 4, 2014; costs incurred related to the Company's review of strategic alternatives; income tax benefits associated with the reversal of income tax reserves on uncertain tax positions and a tax benefit related to certain losses arising from the Company's restructuring programs; income tax provisions for increased valuation allowances on deferred tax assets; income tax provision related to the sale of a noncontrolling interest; the results of the businesses in Careers – China, Latin America and Turkey as they have been classified as discontinued operations; gain on deconsolidation of subsidiaries, net; and charges related to exited facilities and acquisition related costs. The Company uses these Non-GAAP measures for reviewing the ongoing results of the Company's core business operations and in certain instances, for measuring performance under certain of the Company's incentive compensation plans. These Non-GAAP measures may not be comparable to similarly titled measures reported by other companies.
Earnings before interest, taxes, depreciation and amortization ("EBITDA") is defined as operating income or loss before depreciation and amortization, non-cash compensation expense, non-cash impairment charges, and non-cash costs incurred in connection with the Company's restructuring programs. Adjusted EBITDA excludes the impact of the pro-forma adjustments discussed above. The Company considers EBITDA and Adjusted EBITDA to be an important indicator of its operational strength which the Company believes is useful to management and investors in evaluating its operating performance. EBITDA and Adjusted EBITDA are non-GAAP measures and may not be comparable to similarly titled measures reported by other companies.
Free cash flow is defined as cash flow from operating activities less capital expenditures. Free cash flow is considered a liquidity measure and provides useful information about the Company's ability to generate cash after investments in property and equipment. Free cash flow reflected herein is a non-GAAP measure and may not be comparable to similarly titled measures reported by other companies. Free cash flow does not reflect the total change in the Company's cash position for the period and should not be considered a substitute for such a measure.
Net cash and securities are defined as cash and cash equivalents plus short-term and long-term marketable securities, less total debt. Total available liquidity is defined as cash and cash equivalents, plus short-term and long-term marketable securities, plus unused borrowings under our credit facility as amended and restated in October 2014. The Company considers net cash and securities and total available liquidity to be important measures of liquidity and indicators of its ability to meet its ongoing obligations. The Company also uses net cash and securities and total available liquidity, among other measures, in evaluating its choices for capital deployment. Net cash and securities and total available liquidity are presented herein as non-GAAP measures and may not be comparable to similarly titled measures used by other companies.
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