Monster Worldwide Inc. (MWW) filed Quarterly Report for the period ended 2009-09-30.
Monster Worldwide Inc is the online recruitment leader and the parent company of Monster the leading global careers website. Headquartered in New York Monster Worldwide is also the world's largest Recruitment Advertising agency network the world's largest Yellow Pages advertising agency and a provider of direct marketing services. Monster Worldwide Inc. has a market cap of $2.01 billion; its shares were traded at around $15.98 with a P/E ratio of 22.8 and P/S ratio of 1.5. Monster Worldwide Inc. had an annual average earning growth of 6.1% over the past 10 years.
Highlight of Business Operations:
During the second quarter of 2008, we decided to wind-down the operations of Tickle, an online property within the Internet Advertising & Fees segment, and have classified the historical results of Tickle as a component of discontinued operations. Our decision was based upon Tickle’s product offerings, which no longer fit our long-term strategic growth plans, and Tickle’s lack of profitability. Tickle’s discontinued operations for the first nine months of 2008 included the write-down of $13.2 million of long-lived assets, an income tax benefit of $29.5 million and a net loss of $5.5 million from its operations. The income tax benefit included $25.6 million of current tax benefits for current period operating losses and tax losses incurred upon Tickle’s discontinuance and $3.9 million of deferred tax benefits for the reversal of deferred tax liabilities on long-term assets.
Our consolidated operating expenses declined $58 million, or 21.5%, in the third quarter of 2009 compared to the same period of 2008. This reduction in operating expenses primarily relates to our continued focus on cost reductions and operating efficiencies to partially offset the effects of lower revenue as well as the 2009 results including a $6.9 million reversal of a previously recorded provision for legal settlements. The strengthening U.S. dollar favorably impacted our consolidated operating expenses by approximately $6.9 million in the third quarter of 2009, compared to the third quarter of 2008.
Salary and related expenses decreased $23.7 million, or 17.3%, in the third quarter of 2009 compared to the same period of 2008. This reduction in salaries and related expenses resulted primarily from lower variable compensation due to reduced sales volume, targeted global headcount reductions, a benefit in 2009 resulting from a change in actuarial assumptions related to a statutory pension plan as well as the benefit of certain cost reduction initiatives implemented in the first quarter of 2009 that resulted in modifications to employee incentive compensation programs. These reductions in salary and related expenses were partially offset by increased severance costs associated with our targeted global headcount reductions and an increase in stock-based compensation resulting from our broader equity and incentive programs. The strengthening U.S. dollar favorably impacted consolidated salary and related expenses by approximately $3.9 million in the third quarter of 2009, compared to the third quarter of 2008.
Office and general expenses decreased $12.0 million, or 16.7%, in the third quarter of 2009 compared to the same period of 2008. This reduction in office and general expenses resulted primarily from a reduction in consulting fees and lower travel and entertainment expenses. These reductions were partially offset by increased costs associated with exiting certain facilities in the third quarter of 2009 and additional depreciation expense primarily associated with increased capitalized costs related to our newly designed website and our continued commitment to funding investments in our product, new technology and other assets in order to sustain long-term growth. The strengthening U.S. dollar favorably impacted consolidated office and general expenses by approximately $1.9 million in the third quarter of 2009, compared to the third quarter of 2008. Included in office and general expenses in each of the three months ended September 30, 2009 and 2008, respectively, are a net benefit of $0.5 million and a charge of $3.9 million of professional fees and expenses related to the ongoing investigation of our historical stock option grant practices.
Salary and related expenses decreased by $6.2 million, or 11.6%, in the third quarter of 2009 compared to the same period of 2008. This reduction in salaries and related expenses resulted primarily from $4.9 million of decreased variable compensation expense due to declining sales, $3.2 million in lower incentive compensation as a result of a modified incentive compensation structure in 2009 and decreased expenses related to temporary employees of $1.3 million. These reductions were partially offset by an increase in severance expense of $2.8 million resulting from targeted headcount reductions in the third quarter of 2009 primarily associated with the Company’s plans for a new Technology Center of Excellence and Innovation in Cambridge, Massachusetts which will allow the Company to shift and add talent and skills to support the Company’s innovation strategy.
Office and general expenses decreased $6.9 million, or 22.5%, in the third quarter of 2009 compared to the same period of 2008. This reduction in office and general expenses resulted primarily from $5.0 million in decreased consulting fees, which resulted from our continued effort to reduce operating expenses and $1.3 million in lower travel related expenses. These decreases in expenses were partially offset by $1.3 million of additional depreciation expense primarily associated with increased capitalized costs related to our newly designed website and our continued commitment to funding investment in our product, new technology and other assets in order to sustain long-term growth.
MWW is in the portfolios of Bill Miller of Legg Mason Value Trust, Arnold Schneider of Schneider Capital Management, PRIMECAP Management.
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