HOTJ ($10-$11) EPS -1.3 Reports a Pro-forma 4 cent profit vs. consensus of 8 point loss...Guides Q3 Higher.
Wednesday July 25, 5:42 pm Eastern Time
Press Release
HotJobs Achieves Pro Forma Profitability of $.04 Per Share
Pro Forma Profitability One Quarter Ahead of Expectation
-- Revenue in 2Q01 up 41% vs. 2Q00, ahead of expectations
NEW YORK--(BUSINESS WIRE)--July 25, 2001-- -- Beats First Call consensus estimate by $.12 on pro forma
earnings of $.04 per share
Cash, cash equivalents and marketable securities at $83 million, above 1Q01
HotJobs.com, Ltd. (Nasdaq:HOTJ - news), a leading recruiting solutions company, today announced financial results for the second quarter ended June 30, 2001.
HotJobs reported total revenue of approximately $31.4 million for the second quarter of 2001, an approximate 40.7% increase over approximately $22.4 million for the same period in 2000 and a sequential decrease of approximately 6.5% versus $33.6 million for the quarter ended March 31, 2001. Excluding revenues from Resumix, which HotJobs acquired on May 11, 2000, second quarter 2001 revenues increased approximately 39% over the same period in 2000.
For the first six months of 2001, revenue was approximately $65.1 million, an approximate 80% increase compared to approximately $36.2 million for the first six months of 2000. Excluding revenues of Resumix, revenues for the first six months of 2001 increased approximately 68% over revenues for the first six months of 2000.
Excluding merger, non-cash compensation and amortization of goodwill charges, pro forma earnings per share for the quarter was $.04, beating the First Call consensus estimate (which also excludes these charges) by $.12. This compares with a per share operating loss of ($.16) in the quarter ended March 31, 2001, and a per share operating loss of ($.23) in the quarter ended June 30, 2000, which excludes charges for non-cash compensation and amortization of goodwill in both periods and the restructuring charge in the quarter ended March 31, 2001. Including these charges, HotJobs reported a net loss attributable to common stockholders of approximately ($3.7) million, or ($.10) per basic and diluted share for the quarter ended June 30, 2001, versus a net loss attributable to common stockholders of approximately ($13.6) million, or ($.37) per basic and diluted share for the quarter ended March 31, 2001 and a net loss attributable to common stockholders of approximately ($10.5) million, or ($.31) per basic and diluted share for the quarter ended June 30, 2000.
The second quarter of 2001 financial results include an approximate $4.0 million non-cash goodwill amortization charge associated with the May 2000 acquisition of Resumix; and an approximate $300,000 non-cash compensation charge related to options granted below their then fair market value prior to HotJobs' initial public offering and an approximate $800,000 of merger expenses relating to the announced merger with TMP Worldwide. The per share impact of these charges for the quarter is ($.11), ($.01), and ($.02) respectively. (Please refer to Table 1 for a reconciliation of net loss per share excluding the restructuring charge, merger expenses and the non-cash compensation and goodwill amortization charges to reported net loss per share attributable to common stockholders.)
Financial results for the second quarter of 2001 included approximately $900,000 of net interest income. Cash, cash equivalents and marketable securities were approximately $83.0 million or $2.20 per share at June 30, 2001, above the approximately $82.8 million at March 31, 2001.
HotJobs' loss per share (excluding non-cash compensation, merger expenses, restructuring charge and goodwill amortization charges) was ($.12) for the six months ended June 30, 2001, compared to ($.60) for the six months ended June 30, 2000. The basic and diluted net loss per share attributable to common stockholders was ($.46) and ($.69) for the six months ended June 30, 2001 and 2000, respectively.
``The second quarter was marked by significant change for HotJobs,'' said Dimitri Boylan, President and CEO. ``We have crossed the chasm, achieving pro forma profitability a full quarter ahead of expectations and eliminating our cash burn rate entirely. We have continued to increase the operating capability of HotJobs and roll-out new products while remaining focused on controlling costs.''
Lowell Robinson, Chief Financial Officer, commented, ``Our operating expenses (excluding the non-cash compensation, merger expenses and amortization of goodwill charges) as a percent of revenue decreased from 98% in the first quarter of 2001 to 81% in the second quarter of 2001. We expect some continued reduction in our total operating expenses over the next quarter as a result of the ongoing impact from our first quarter restructuring initiatives, as well as other ongoing cost-effectiveness measures.''
Key Metrics
Over 5.0 million job seekers were registered in the database at June 30, 2001, up from 3.9 million at the end of first quarter 2001 and over 800,000 at the end of 1999.
Membership decreased to over 8,900 members at the end of June from over 10,600 members at the end of March but increased significantly from more than 3,200 members at the end of 1999.
HotJobs Desktop subscribers of over 14,400, a decline from over 16,000 at the end of March 2001, but an increase from over 5,000 at the end of 1999.
The ratio of HotJobs Desktops per member increased to 1.59 on average for the second quarter, up from 1.57 on average for the first quarter of 2001.
Average monthly revenue per member declined to $825 for the second quarter of 2001 versus $870 in the first quarter of 2001 due primarily to the loss of small customers.
HotJobs employed 549 associates at the end of the second quarter of 2001 versus 665 at the end of 2000, and 581 at the end of first quarter 2001. There were 183 e-recruitment sales associates at the end of second quarter versus 188 at the end of first quarter due to normal attrition.
Accounts receivable days sales outstanding decreased to 72 days from 79 days at the end of first quarter 2001.
Recent Milestones
Branding
HotJobs continued to expand the ``Onward Upward'' campaign with the launch of new outdoor advertising and new print advertising.
HotJobs has selected NBC as their prime time up-front network for the Fall 2001 season.
Over 10,000 job seekers attended HotJobs career expos in Boston, San Jose, San Francisco and Long Beach during the second quarter of 2001. HotJobs plans to hold two career expos in the third and fourth quarters of 2001 and twelve for the full year 2001. These primarily represent opportunities for branding and face-to-face customer contact in local markets.
HotJobs' flagship career newsletter, Work Sheet, grew to over 500,000 subscribers in the second quarter of 2001, up from over 300,000 subscribers in the first quarter of 2001. Given the success of Work Sheet, HotJobs launched nine additional newsletters covering Accounting/Finance, College, Diversity, Healthcare, Human Resources, Internet, Job Tips, Sales and Technology.
The new newsletters launched in late May and early June, collectively gain more than 95,000 subscribers in the second quarter of 2001.
Corporate Development
On June 29, 2001, HotJobs announced that it entered into a merger agreement with TMP Worldwide Inc. (TMPW), the world's leading supplier of human capital solutions, including the Internet career portal Monster.com®. TMP announced that it intends to maintain HotJobs.com as a stand-alone site and brand. Under the terms of the acquisition, each share of HotJobs common stock outstanding will be exchanged for 0.2195 shares of TMP common stock. The transaction is subject to the approval of HotJobs' shareholders, regulatory approval and other customary closing conditions.
Business Outlook
The following statements are based on current expectations as of today. These statements are forward-looking and actual results may differ materially. These statements do not include the potential impact of any mergers, acquisitions or other business combinations that may be completed after June 30, 2001.
HotJobs expects total revenue for the third quarter of 2001 to improve by approximately 4% to 6%, compared to total revenue for the third quarter of 2000, and to decrease by approximately 3% to 4% from second quarter of 2001 revenue of $31.4 million. The projected decrease in sequential total revenue results primarily from slightly lower expectations for e-Recruitment revenue, as well as a decline in revenues in the software business and lower revenues in the Career Expo business due to holding fewer career expos.
HotJobs expects its gross margin for the third quarter of 2001 to remain at approximately 82% plus or minus a point.
HotJobs expects that pro forma earnings per share (excluding charges related to non-cash compensation, merger and amortization of goodwill) for the third quarter of 2001 will be approximately $.04, above previous guidance of $.01 and consistent with the second quarter of 2001.
HotJobs expects gains on investments and interest and other income for the third quarter of 2001 to be approximately $900,000, depending on interest rates, cash balances and volatility.
Capital spending for the third quarter of 2001 is expected to be approximately $3.5 million, consistent with the second quarter of 2001. Depreciation is expected to be approximately $2.8 million in the third quarter of 2001.
Charges related to non-cash compensation and amortization of goodwill are expected to be approximately $4.3 million in the third quarter of 2001 but may increase if the transaction with TMP closes in the third quarter of 2001.
In the third quarter, management assumes HotJobs' weighted average shares outstanding will increase by approximately 400,000 (primarily related to stock option exercises).
HotJobs currently expects the transaction with TMP to close before the end of the fourth quarter and therefore is not discussing any expectations with respect to the fourth quarter. As previously stated, the transaction is subject to a number of customary closing conditions.
Second Quarter 2001 Results Conference Call July 26, 2001
A live webcast of HotJobs' second quarter 2001 conference call can be heard at 9:00 am EDT on Thursday, July 26, 2001 at hotjobs.com. |
