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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report: March 5, 1999
TMP WORLDWIDE INC.
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(Exact name of Registrant as specified in its charter)
Delaware 0-21571 13-3906555
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(State of (Commission File No.) (I.R.S. Employer
Incorporation) Identification No.)
1633 Broadway, New York, New York 10019
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 212-977-4200
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Item 5. OTHER EVENTS.
Set forth below is a copy of a press release issued by TMP Worldwide,
Inc., a Delaware corporation, on March 2, 1999.
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FOR IMMEDIATE RELEASE CONTACT: Lavine Surtani
(212) 445-8262
[email protected]
Jim Treacy
(212) 527-8604
[email protected]
TMP WORLDWIDE EARNINGS RELEASE
FOR THE THREE MONTHS ENDED DECEMBER 31, 1998(1)
Total Commissions and Fees Up 9.5% to $102.1 million
- --Interactive Division Commissions and Fees Up 195.7% to $16.8 million
Adjusted Earnings before Interest, Taxes,
Depreciation and Amortization (EBITDA)(2) Up 70.9% to $17.1 million
Adjusted Net Income(3) $4.3 million compared to a
prior year net income of $1.9
million
Fully Diluted Adjusted EPS(4) $0.14 compared to prior year
at $0.06
Fully Diluted Weighted Average Shares Outstanding 30.8 million
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1998(1)
Total Commissions and Fees Up 27.3% to $406.8 million
- --Interactive Division Commissions and Fees Up 160.8% to $48.5 million
Adjusted Earnings before Interest, Taxes, Up 49.0% to $66.8 million
Depreciation and Amortization (EBITDA)(2)
Adjusted Net Income(3) $20 million compared to a
prior year net income of
$10.7 million
Fully Diluted Adjusted EPS(4) $0.65 compared to prior year
at $0.38
Fully Diluted Weighted Average Shares Outstanding 30.7 million
- ----------
(1) Current and prior periods' results have been retroactively restated to
reflect the effects of acquisitions accounted for as poolings of interests and
which were completed prior to December 31, 1998.
(2) EBITDA is adjusted to exclude the effects of pooling costs incurred of $11.9
million and $21.5 million for the quarter and the year ended December 31, 1998,
respectively.
(3) Net income is adjusted to exclude the effects of pooling costs incurred and
the tax benefits thereon of $9.6 million and $15.8 million for the quarter and
the year ended December 31, 1998, respectively.
(4) Available to common and Class B common shareholders after excluding pooling
costs and the tax benefits thereon.
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TMP WORLDWIDE REPORTS STRONG GAINS IN EARNINGS PER SHARE
FULLY DILUTED ADJUSTED EPS(A) UP 133% TO $0.14 IN THE FOURTH QUARTER OF 1998;
UP 71% TO $0.65 FOR FISCAL 1998
COMPANY'S INTERACTIVE DIVISION, LED BY MONSTER.COM, REPORTS FULL YEAR REVENUE OF
$48.5 MILLION, UP 161% FROM THE PREVIOUS YEAR;
POSTS OPERATING PROFIT OF $1.2 MILLION IN FISCAL 1998
NEW YORK, March 3, 1999 -- TMP Worldwide Inc. (NASDAQ: TMPW; ASX: TMP), the
leading provider of global recruitment solutions including the dominant Internet
career portal, monster.com, and the world's largest Yellow Pages advertising
agency, today announced total commissions and fees of $102.1 million for the
quarter ended December 31, 1998 compared to $93.2 million for the same period a
year ago, an increase of 9.5%. Revenue growth in TMP's Interactive Division and
cost efficiencies resulting from consolidation of acquired companies contributed
to a 70.9% gain in EBITDA to $17.1 million, as adjusted to exclude the effects
of pooling costs associated with the mergers completed during the quarter from
EBITDA of $10.0 million a year ago.
Recruitment advertising commissions and fees remained virtually flat. Yellow
page advertising commissions and fees were $21.9 million for the fourth quarter
of 1998, as compared to $25.0 million for the fourth quarter of 1997, a 12.2%
decrease which reflects shifts in the timing for closings of yellow pages
directories and lower publisher incentives. Commissions and fees for the
company's search and selection division were $23.1 million for the fourth
quarter versus $22.0 million in 1997, a 5.0% increase. Internet revenue for the
fourth quarter of 1998 increased 195.7 % to $16.8 million from $5.7 million in
the fourth quarter of 1997.
For the fourth quarter of 1998, its third consecutive quarter of profitability,
TMP's Interactive Division, led by monster.com, posted an operating profit of
$1.0 million.
Andrew J. McKelvey, chairman and CEO of TMP Worldwide stated: "Of particular
significance is the continued growth, organically and through acquisitions, of
our career focused services, which supports our strategy of creating a suite of
traditional and online products and services designed to serve employers and
employees for a lifetime."
An important component of this strategy is the company's Interactive Division,
anchored by monster.com, which was launched in mid-January 1999 as a result of
the merger of the number-one and number-four rated online recruitment sites, the
Monster Board(R) and Online Career Center, respectively, both owned by TMP.
Monster.com is going global with local language services already existing in the
United States, the United Kingdom, Canada (in French and English), Australia,
the Netherlands (in Dutch and English) and Belgium (in French and Flemish), and
will be coming soon to Germany, France and Singapore. McKelvey added, "Our
Interactive Division has continued to post impressive results within a distinct
online category - Careers. We plan to maintain this momentum by continuing to
aggressively market our Internet services."
"Monster.com is committed to leading the online career market by offering
innovative technology and superior services that give consumers and businesses
more control over the recruiting process," said Jeff Taylor, CEO of TMP
Interactive. "Our recent, highly successful Super Bowl ad campaign has put us
far ahead of our growth projections. According to independent research conducted
by Media Metrix, 3.0% of the entire U.S. Internet population visited Monster.com
in January, nearly double that of our nearest competitor."
Mr. Taylor continued, "February tracking of our numbers show continuing gains in
traffic. We plan to continue our marketing efforts and drive traffic to our
site, in order to ensure that Monster.com remains the undisputed leader in the
rapidly expanding online careers category."
Excluding fourth quarter merger costs of $11.9 million - the majority of which
were related to employee stay bonuses incurred in connection with the company's
acquisitions of TASA Holding, AG, an international executive search firm,
Johnson, Smith & Knisely, a domestic executive search firm and Stackig
Advertising, a leading high-tech communications agency, which are being
accounted for as poolings of interests - the company reported a 92.0%
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increase in operating income for the fourth quarter of 1998 to $10.7 million
from $5.6 million for the comparable period in 1997.
Adjusted net income(A) increased 126.0%, to $4.3 million in the fourth
quarter of 1998 from $1.9 million in the fourth quarter of 1997. Fully
diluted adjusted earnings per share(A) increased 133.0%, to $0.14 in the
fourth quarter of 1998 from $0.06 in the fourth quarter of 1997.
Jim Treacy, COO of TMP Worldwide commented, "Investors who study TMP's Executive
and Internet Recruiting businesses will clearly see we have developed a leading
corporate recruiting franchise. By integrating capabilities across business
lines in order to leverage synergies and take advantage of operating
efficiencies, we have been able to achieve leadership positions in each of our
core industry segments."
TWELVE MONTH PERFORMANCE
TMP reported commissions and fees of $406.8 million for the twelve months ended
December 31, 1998, compared to $319.5 million for the year-earlier period, an
increase of 27.3%. Adjusted EBITDA for fiscal 1998 was $66.8 million versus
$44.9 million for the same period a year ago, an increase of 49.0%.
Recruitment advertising commissions and fees were $167.2 million for fiscal year
ended 1998, a rise of 31.5% compared to $127.2 million in 1997. Yellow page
advertising commissions and fees were $99.4 million for 1998 versus $98.0
million for fiscal year ended 1997, a 1.4% increase. Commissions and fees for
the company's search and selection division for fiscal year ended 1998 grew to
$91.6 million as compared to $75.7 million, a 21.0% increase over the comparable
period a year ago.
Twelve month revenue for TMP's Interactive division was $48.5 million, an
increase of 161.0% from $18.6 million for the twelve months ended December 31,
1997. For the year, the Interactive division reported an operating profit of
$1.2 million
Excluding merger costs of $21.5 million, the majority of which were related to
employee stay bonuses incurred in connection with poolings of interests
transactions entered into in 1998, the company reported an increase in operating
income for twelve months of 54.1% to $46.0 million from $29.8 million a year
ago.
Adjusted net income(A) increased 87.0%, to $20.0 million for the fiscal year
ended 1998 from $10.7 million for fiscal year ended 1997. Fully diluted
adjusted earnings per share(A) increased 71.0%, to $0.65 for the fiscal year
ended 1998 from $0.38 for fiscal year ended 1997.
"As we look toward 1999, our primary focus is to continue to grow our business
organically and through accretive acquisitions," continued Andy McKelvey.
TMP CONTINUES TO EXPAND
TMP continued to expand its global expertise with the acquisition of three
agencies. Bonde & Schmah and PMM Management Consultants, search and selection
agencies headquartered in Germany, were completed in December 1998, and Sources,
SA, a recruitment advertising agency, located in France, was completed in
January 1999. These acquisitions represent approximately $10 million in
annualized commissions and fees for TMP.
In January 1999, the company also completed the acquisition of Morgan & Banks
Limited of Australia, the largest executive search and selection firm in
Australasia and one of the largest in the world. Morgan & Banks was acquired in
a pooling of interests transaction for approximately 5,450,000 TMP Worldwide
shares, including the effect of Morgan & Banks options outstanding. The
acquisition, the largest in TMP's history, is expected to be immediately
accretive. On a proforma basis, the combined companies would have reported
revenue of $660.3 million for the twelve months ended December 31, 1998.
Andy McKelvey added: "We have aggressively grown our Search & Selection business
through a series of strategic acquisitions. With the acquisition of Morgan &
Banks, we have expanded our infrastructure and have reinforced our position as
the number one global online recruitment leader."
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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: 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, has more than 4,750 employees in 19 countries.
The company's clients include more than 70 of the FORTUNE 100 and more than 400
of the FORTUNE 500 companies.
Monster.com (WWW.MONSTER.COM), the flagship product of the Interactive Division
of TMP Worldwide, is the leading, global online network for careers, connecting
the most progressive companies with the most qualified career-minded
individuals. Monster.com is committed to leading the market by offering
innovative technology and superior services that give consumers and businesses
more control over the recruiting process. The Monster.com network consists of
websites in the United States, Canada, the United Kingdom, the Netherlands,
Australia and Belgium and will be coming soon to France, Germany and Singapore.
More information about Monster.com is available at WWW.MONSTER.COM or by calling
1-800-MONSTER.
A condensed consolidated statement of income for the fourth quarter and twelve
months ended December 31, 1998 for TMP Worldwide Inc. and subsidiaries follows.
For an investment kit, please contact James J. Treacy at (212) 527-8604 or visit
WWW.TMPW.COM.
# # #
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(A) Adusted to exclude the effects of pooling costs incurred and the tax
benefits thereon of $9.6 million and $15.8 million for the quarter and the year
ended December 31, 1998, respectively.
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TMP WORLDWIDE INC
CONDENSED CONSOLIDATED STATEMENT OF INCOME*
For the Year Ended
(in thousands, except per share amounts)
December 31, December 31,
1998 1997
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GROSS BILLINGS:
Recruitment $ 794,234 $ 604,420
Yellow pages 485,205 469,342
Search & selection 92,604 76,533
Internet 54,269 19,640
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Total $ 1,426,312 $ 1,169,935
============================================= =========== ===========
COMMISSIONS & FEES:
Recruitment $ 167,234 $ 127,211
Yellow pages 99,384 98,007
Search & selection 91,635 75,716
Internet 48,516 18,601
- --------------------------------------------- ----------- -----------
Total Revenue 406,769 319,535
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OPERATING EXPENSES:
Salary & related costs 223,773 179,370
Office & general 126,835 102,547
Merger costs 21,526 --
CEO bonus 1,250 1,500
Amortization of intangibles 8,922 6,284
- --------------------------------------------- ----------- -----------
TOTAL OPERATING EXPENSES 382,306 289,701
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OPERATING INCOME 24,463 29,834
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OTHER INCOME (EXPENSE):
Interest expense, net (10,415) (8,687)
Other (926) (202)
- --------------------------------------------- ----------- -----------
Total other income (expense), net (11,341) (8,889)
- --------------------------------------------- ----------- -----------
INCOME BEFORE TAXES, MINORITY INTERESTS
& EQUITY IN EARNINGS (LOSSES) OF AFFILIATES 13,122 20,945
Provision for income taxes 8,476 9,969
- --------------------------------------------- ----------- -----------
Income before minority interests
& equity in earnings (losses) of affiliates 4,646 10,976
Minority interests -- 143
Equity in earnings (losses) of affiliates (396) (33)
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For the Year Ended
Page 2
- --------------------------------------------- ----------- -----------
Net income 4,250 10,800
Preferred dividend -- (123)
- --------------------------------------------- ----------- -----------
Net income applicable to common
and Class B common stockholders $ 4,250 $ 10,677
============================================= =========== ===========
Adjusted net income:
Net income $ 4,250 $ 10,677
Merger costs 21,526 --
Tax benefit of merger costs (5,745) --
- --------------------------------------------- ----------- -----------
Adjusted net income $ 20,031 $ 10,677
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NET INCOME PER COMMON AND
=============================================
CLASS B COMMON SHARE
=================================
BASIC $ 0.14 $ 0.38
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DILUTED $ 0.14 $ 0.38
================================= =========== ===========
ADJUSTED NET INCOME PER COMMON AND
=============================================
CLASS B COMMON SHARE
=================================
BASIC $ 0.67
================================= ===========
DILUTED $ 0.65
================================= ===========
WEIGHTED AVERAGE SHARES OUTSTANDING
=============================================
BASIC 29,834 27,884
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DILUTED 30,673 28,376
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ADJUSTED E B I T D A** $ 66,840 $ 44,871
============================================= =========== ===========
* Current and prior period's results have been retroactively restated to reflect
the effects of acquisitions accounted for as poolings of interests and which
were completed prior to December 31, 1998.
** 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.
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TMP WORLDWIDE INC
CONDENSED CONSOLIDATED STATEMENT OF INCOME*
For the Three Months Ended
(in thousands, except per share amounts)
December 31, December 31,
1998 1997
----------- -----------
GROSS BILLINGS:
Recruitment $ 189,074 $ 185,462
Yellow pages 103,888 111,270
Search & selection 23,525 22,855
Internet 19,446 6,092
- --------------------------------------------- ----------- -----------
Total $ 335,933 $ 325,679
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COMMISSIONS & FEES:
Recruitment $ 40,238 40,536
Yellow pages 21,912 24,970
Search & selection 23,143 22,038
Internet 16,792 5,679
- --------------------------------------------- ----------- -----------
Total Revenue 102,085 93,223
- --------------------------------------------- ----------- -----------
OPERATING EXPENSES:
Salary & related costs 54,096 52,936
Office & general 34,639 32,513
Merger costs 11,949 --
CEO bonus 125 375
Amortization of intangibles 2,508 1,816
- --------------------------------------------- ----------- -----------
TOTAL OPERATING EXPENSES 103,317 87,640
- --------------------------------------------- ----------- -----------
OPERATING INCOME (LOSS) (1,232) 5,583
- --------------------------------------------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest expense, net (3,059) (2,309)
Other (105) (125)
- --------------------------------------------- ----------- -----------
Total other income (expense), net (3,164) (2,434)
- --------------------------------------------- ----------- -----------
INCOME (LOSS) BEFORE TAXES, MINORITY INTERESTS
& EQUITY IN EARNINGS (LOSSES) OF AFFILIATES (4,396) 3,149
Provision for income taxes 811 1,313
- --------------------------------------------- ----------- -----------
Income (loss) before minority interests
& equity in earnings (losses) of affiliates (5,207) 1,836
Minority interests -- (113)
Equity in earnings (losses) of affiliates (99) (13)
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For the Three Months Ended
Page 2
- --------------------------------------------- ----------- -----------
Net income (loss) applicable to common
and Class B common stockholders ($5,306) $1,936
=========== ===========
Adjusted net income:
Net income (loss) ($5,306) $ 1,936
Merger costs 11,949 --
Tax benefit of merger costs (2,376) --
- --------------------------------------------- ----------- -----------
Adjusted net income $ 4,267 $ 1,936
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NET INCOME (LOSS) PER COMMON AND
=============================================
CLASS B COMMON SHARE
=================================
BASIC ($ 0.18) $ 0.07
================================= =========== ===========
DILUTED ($ 0.18) $ 0.06
================================= =========== ===========
ADJUSTED NET INCOME PER COMMON AND
=============================================
CLASS B COMMON SHARE
=================================
BASIC $ 0.14
================================= ===========
DILUTED $ 0.14
================================= ===========
WEIGHTED AVERAGE SHARES OUTSTANDING
=============================================
BASIC 29,862 29,702
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DILUTED 29,862 30,212
================================= =========== ===========
DILUTED FOR ADJUSTED EARNINGS PER SHARE 30,807
================================= ===========
ADJUSTED EBITDA ** $ 17,148 $ 10,032
============================================= =========== ===========
* Current and prior period's results have been retroactively restated to reflect
the effects of acquisitions accounted for as poolings of interests and which
were completed prior to December 31, 1998.
** 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.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TMP WORLDWIDE INC.
By: /s/ THOMAS G. COLLISON
-----------------------------
Thomas G. Collison
Vice Chairman
Dated: March 5, 1999
