Monster Worldwide reports third quarter 2003 results

2003 Third Quarter Highlights Diluted EPS from Continuing Operations of $0.11 on Total Revenue of $173.7 Million

Monster Division’s Operating Margin Expands to 20.7% as Revenue Increases Sequentially and Year Over Year to $106.5 Million

Monster Division’s Deferred Revenue Reaches $121.5 Million
Operating Cash Flow from Continuing Operations of $16.4 Million

Net Cash Position at $111.8 Million Monster Worldwide, Inc.

(NASDAQ: MNST - News), the parent company of the leading global online careers property, Monster, and the world’s largest Yellow Pages and Recruitment Advertising agency network, today reported income from continuing operations of $12.9 million and diluted earnings per share from continuing operations of $0.11 for the quarter ended September 30, 2003. Financial results for prior periods have been reclassified to reflect the previously announced termination of the Monster division’s joint venture in Australia and New Zealand as discontinued operations.

Monster Worldwide’s total revenue for the third quarter of 2003 was $173.7 million, with the Monster division contributing $106.5 million, an increase over the $102.6 million generated in both the previous quarter and prior year period. At September 30, 2003, the Monster division’s deferred revenue increased to $121.5 million, compared with $103.9 million for the prior year period and $116.3 million for the second quarter of 2003. For the third quarter of 2002, total revenue was $178.9 million, earnings per share from continuing operations was $0.16, and non-GAAP income from continuing operations was $0.18 per diluted share.

Detailed quarter versus quarter comparative results for Monster Worldwide by business segment and a reconciliation of all non-GAAP financial information to GAAP financial information in this release are presented in the Financial Tables and the Supplemental Data sections below. Continued execution of Monster Worldwide’s focused business strategy delivered solid 2003 third quarter financial results, said Andrew J. McKelvey, Chairman and Chief Executive Officer of Monster Worldwide. Our Monster division continues to post improving results, highlighted by year-over-year and sequential increases in revenue and deferred revenue. Our initiatives in new vertical markets contributed to the increased revenue during the quarter. Revenue also benefited from the inclusion of $1.7 million from QuickHire, a recent acquisition in the government solutions market. We have maintained our focus on tight cost controls which, combined with increased revenue, allowed us to expand our operating margin and increase earnings per share sequentially. Additionally, we generated $16.4 million in operating cash flow from continuing operations and ended the quarter with $111.8 million in net cash. Mr. McKelvey concluded, We are encouraged by the slight improvement in the employment market during the quarter and we are firmly committed to strengthening our leadership position in online recruiting. Nine Month Results Monster Worldwide reported total revenue of $508.9 million for the nine months ended September 30, 2003, compared to $536.1 million in the comparable prior year period.

On a GAAP basis, which includes business reorganization costs and costs associated with the spin-off of the Company’s eResourcing and Executive Search businesses, the loss from continuing operations totaled $5.2 million or $0.05 per share, and income from continuing operations on a non-GAAP basis was $33.3 million or $0.29 per share. The net loss per share on a GAAP basis, which includes discontinued operations, was $0.84 for the nine months ended September 30, 2003. On March 31, 2003, Monster Worldwide completed the spin-off of its eResourcing and Executive Search business units as a new publicly traded company known as Hudson Highland Group, Inc. (NASDAQ: HHGP - News). In addition the Company’s Monster division terminated its joint venture arrangement in Australia and New Zealand in August 2003. As a result, the Financial Tables below present the financial results of Hudson Highland Group, Inc. and the disposition of the terminated joint venture as discontinued operations for all periods presented. Monster Worldwide’s 2003 financial results reflect the continuing operations of the Company’s Monster, Advertising & Communications, and Directional Marketing business segments. Prior periods are presented on a comparative basis. Non-GAAP operating income, operating margin, income from continuing operations, diluted earnings per share from continuing operations and adjusted EBITDA reflect adjustments made to exclude business reorganization, spin-off and other special charges, merger and integration costs, and the tax benefits thereon. Non-GAAP income from continuing operations and diluted earnings per share from continuing operations for the nine months ended September 30, 2002 also exclude the after-tax cumulative effect of an accounting change of $428.4 million, which resulted from the implementation of Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets. The Company defines net cash as cash and cash equivalents, less total debt.

Balance Sheet Highlights Monster Worldwide ended the third quarter of 2003 with a strong and liquid balance sheet. Cash as of September 30, 2003 was $118.1 million, compared to $118.8 million as of June 30, 2003. Net cash as of September 30, 2003, rose to $111.8 million, from $99.9 million in the prior quarter. In the third quarter of 2003, operating cash provided by continuing operations was $16.4 million and capital expenditures were $6.4 million. Day’s sales outstanding remained flat with the second quarter of 2003 at 71 days, compared to 64 days at September 2002.