<PAGE>
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: February 1, 1999
TMP WORLDWIDE INC.
------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 0-21571 13-3906555
------------------- ------------------- --------------------
(State of (Commission File No.) (I.R.S. Employer
Incorporation) Identification No.)
1633 Broadway, New York, New York 10019
----------------------------------------- ------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 212-977-4200
------------
<PAGE>
Item 5. OTHER EVENTS.
TMP Worldwide Inc. hereby announces its financial results for the month of, and
the ten months ended October 31, 1998.
The financial results included herein have been retroactively restated to
include the results for the ten months ended October 1998 and 1997 of the
entities acquired by the Company under the pooling-of-interests method of
accounting. Now included are the results of Johnson, Smith & Knisely, Inc,
("JSK"), TASA Holding A.G. ("TASA"), Stackig, Inc. and Recruitment Solutions,
Inc.
With the additions of JSK in May 1998, and TASA in September 1998, TMP entered
the executive search business and now operates this business under the name TASA
Worldwide. According to Hunt-Scanlon Advisors, a Greenwich, Conn. consulting
firm that tracks the executive search industry, TASA Worldwide, with estimated
annual revenue of approximately $60 million, is now one of the 10 largest
wholly-owned global executive search firms in the world.
Stackig, Inc. joined TMP in September 1998 and Recruitment Solutions joined TMP
October 1998. Both are in the recruitment advertising business. Stackig, Inc. is
a full service advertising agency specializing in recruitment advertising and
marketing communications and public relations services. Recruitment Solutions'
primary service is the design and management of the recruitment advertisement
response process, including resume assessment and tracking.
The Company's total commissions and fees were $34.8 million for the month of
October 1998 compared to $30.1 million for the month of October 1997, an
increase of 15.6%.
In addition, TMP's Interactive Division, led by The Monster Board-TM-, reported
$5.2 million in Internet revenue for the month of October of 1998 an increase of
489% or $4.3 million, from $886 thousand for the month of October 1997.
Commissions and fees for recruitment advertising and yellow page advertising for
the month of October 1998, at $ 14.1 million and $8.3 million, respectively,
were down slightly when compared to $14.2 million and $8.4, respectively for the
month of October 1997. Commissions and fees for the Company's search and
selection division were $7.2 million for the month of October 1998 as compared
to $6.6 million for the month of October 1997, an 8.5% increase.
Excluding merger costs of $2.1 million, which were comprised of amortization of
the employee stay bonus for JSK, and legal, accounting and other
<PAGE>
costs incurred in connection with the Company's acquisitions of Stackig, Inc.,
The Smart Group, a yellow page advertising agency and Recruitment Solutions, all
of which are being accounted for as poolings of interests, the Company reported
an operating profit for the month of October 1998 of $3.8 million compared with
$1.9 million for the month of October 1997, an increase of 104.2%.
For the month ended October 1998, excluding merger and integration costs net of
tax benefits, net income applicable to common and Class B common stockholders
was $3.1 million or $0.10 per diluted share, on 30.4 million weighted average
shares outstanding as compared to net income applicable to common and Class B
common stockholders of $1.1 million, or $0.04 per diluted share for the month of
October 1997 on 29.9 million weighted average shares outstanding, a 193.5%
increase in adjusted net income and a 188.7% increase in the related per share
amounts.
Earnings before interest, income taxes, depreciation and amortization (EBITDA),
excluding merger costs, increased 75.3% to $5.8 million for the month of
October 1998, versus $3.3 million for the comparable period in 1997.
TEN MONTH PERFORMANCE
TMP reported commissions and fees of $332.8 million for the ten months ended
October 31, 1998 compared to $251.1 million for the ten months ended October 31,
1997, an increase of $81.7 million or 32.5%. Internet revenue increased 167.5%
to $36.9 million for the ten months ended October 31, 1998 from $13.8 million
for the ten months ended October 30, 1997.
Excluding merger costs of $11.6 million, the majority of which were related to
employee stay bonuses incurred in connection with the Company's acquisitions of
TASA, Stackig Inc. and JSK, all of which are being accounted for as poolings of
interests, the Company reported an operating profit for the first ten months of
1998 of $38.7 million compared to $24.7 million for the same period in 1997, an
increase of 57.0%.
For the ten months ended October 31, 1998, excluding merger costs, net of tax
benefits, net income applicable to common and Class B common stockholders was
$18.4 million, or $0.61 per diluted share, on 30.4 million weighted average
shares outstanding as compared to net income applicable to common and Class B
common stockholders of $9.0 million, or $0.33 per diluted share, for the ten
months ended October 31, 1997 on 27.8 million weighted average shares
outstanding, a 103.5% increase in net income and a 86.1% increase in earnings
per share.
For the first ten months of 1998, EBITDA, excluding merger costs, was $55.3
million versus $36.6 million for the same period in 1997, an increase of 51.2%.
<PAGE>
TMP WORLDWIDE INC
CONDENSED CONSOLIDATED STATEMENT OF INCOME
The Month Ended
October 31,
-------------------------
1998 1997
---------- ----------
(in thousands, except per
share amounts)
(unaudited)
GROSS BILLINGS:
Recruitment $ 69,780 $ 66,231
Yellow pages 43,436 42,837
Search & selection 7,196 6,634
Internet 5,627 1,049
- -------------------------------------------- ---------- ----------
Total $ 126,039 $ 116,751
============================================ ========== ==========
COMMISSIONS & FEES:
Recruitment $ 14,071 14,184
Yellow pages 8,327 8,401
Search & selection 7,196 6,634
Internet 5,215 886
- -------------------------------------------- ---------- ----------
Total Revenue 34,809 30,105
- -------------------------------------------- ---------- ----------
OPERATING EXPENSES:
Salary & related costs 18,807 17,769
Office & general 11,440 9,813
Merger costs 2,072 0
CEO bonus 125 125
Amortization of intangibles 584 511
- -------------------------------------------- ---------- ----------
TOTAL OPERATING EXPENSES 33,028 28,218
- -------------------------------------------- ---------- ----------
OPERATING INCOME 1,781 1,887
- -------------------------------------------- ---------- ----------
OTHER INCOME (EXPENSE):
Interest expense, net (879) (943)
Other 344 (67)
- -------------------------------------------- ---------- ----------
Total other income (expense), net (535) (1,010)
- -------------------------------------------- ---------- ----------
INCOME BEFORE TAXES, MINORITY INTERESTS
& EQUITY IN EARNINGS (LOSSES) OF AFFILIATES 1,246 877
Provision for income taxes (838) (154)
- -------------------------------------------- ---------- ----------
Income before minority interests
& equity in earnings (losses) of affiliates 2,084 1,031
Minority interests 0 (37)
Equity in earnings (losses) of affiliates (207) 0
- -------------------------------------------- ---------- ----------
Net income applicable to common
and Class B common stockholders $ 1,877 $ 1,068
============================================ ========== ==========
Adjusted net income:
Net income $ 1,877 $ 1,068
Merger costs 2,072 0
Tax benefit of merger costs (814) 0
- -------------------------------------------- ---------- ----------
Adjusted net income $ 3,135 $ 1,068
============================================ ========== ==========
NET INCOME PER COMMON AND
============================================
CLASS B COMMON SHARE
====================================
BASIC $0.06 $0.04
==================================== ========== ==========
DILUTED $0.06 $0.04
==================================== ========== ==========
ADJUSTED NET INCOME PER COMMON AND
============================================ ========== ==========
CLASS B COMMON SHARE
==================================== ========== ==========
BASIC $0.11
==================================== ==========
DILUTED $0.10
==================================== ==========
WEIGHTED AVERAGE SHARES OUTSTANDING
============================================
BASIC 29,472 29,408
==================================== ========== ==========
DILUTED 30,395 29,891
==================================== ========== ==========
Adjusted E B I T D A* $ 5,831 $ 3,326
============================================ ========== ==========
* 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.
<PAGE>
TMP WORLDWIDE INC
CONDENSED CONSOLIDATED STATEMENT OF INCOME
The Ten Months Ended
October 31,
-------------------------
1998 1997
---------- ----------
(in thousands, except per
share amounts)
(unaudited)
GROSS BILLINGS:
Recruitment $ 674,940 $ 485,189
Yellow pages 416,335 392,747
Search & selection 71,085 56,016
Internet 40,450 14,597
- -------------------------------------------- ---------- ----------
Total $1,202,810 $ 948,549
============================================ ========== ==========
COMMISSIONS & FEES:
Recruitment $ 140,479 $ 101,486
Yellow pages 84,309 79,776
Search & selection 71,085 56,016
Internet 36,939 13,808
- -------------------------------------------- ---------- ----------
Total Commissions & fees 332,812 251,086
- -------------------------------------------- ---------- ----------
OPERATING EXPENSES:
Salary & related costs 183,091 140,608
Office & general 102,756 79,590
Merger costs 11,649 0
CEO bonus 1,250 1,250
Amortization of intangibles 6,987 4,968
- -------------------------------------------- ---------- ----------
TOTAL OPERATING EXPENSES 305,733 226,416
- -------------------------------------------- ---------- ----------
OPERATING INCOME 27,079 24,670
- -------------------------------------------- ---------- ----------
OTHER INCOME (EXPENSE):
Interest expense, net (8,386) (7,396)
Other (497) (125)
- -------------------------------------------- ---------- ----------
Total other income (expense), net (8,883) (7,521)
- -------------------------------------------- ---------- ----------
INCOME BEFORE TAXES, MINORITY INTERESTS
& EQUITY IN EARNINGS (LOSSES) OF AFFILIATES 18,196 17,149
Provision for income taxes 6,751 7,743
- -------------------------------------------- ---------- ----------
Income before minority interests
& equity in earnings (losses) of affiliates 11,445 9,406
Minority interests 0 219
Equity in earnings (losses) of affiliates (504) (20)
- -------------------------------------------- ---------- ----------
Net income 10,941 9,167
Preferred dividend 0 (123)
- -------------------------------------------- ---------- ----------
Net income applicable to common
and Class B common stockholders $ 10,941 $ 9,044
============================================ ========== ==========
ADJUSTED NET INCOME:
Net income $ 10,941 $ 9,044
Merger costs 11,649 0
Tax benefit of merger costs (4,183) 0
- -------------------------------------------- ---------- ----------
Adjusted net income $ 18,407 $ 9,044
============================================ ========== ==========
NET INCOME PER COMMON AND
CLASS B COMMON SHARE
====================================
BASIC $0.37 $0.33
==================================== ========== ==========
DILUTED $0.36 $0.33
==================================== ========== ==========
ADJUSTED NET INCOME PER COMMON AND
CLASS B COMMON SHARE
====================================
BASIC $0.62
==================================== ==========
DILUTED $0.61
==================================== ==========
WEIGHTED AVERAGE SHARES OUTSTANDING
BASIC 29,544 27,265
==================================== ========== ==========
DILUTED 30,359 27,758
==================================== ========== ==========
ADJUSTED E B I T D A* $ 55,340 $ 36,603
============================================ ========== ==========
* 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.
<PAGE>
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: February 1, 1999
