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Monster Worldwide (MWW) Posts Loss in Q3, Revenues Fall

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Monster Worldwide Inc.  reported third-quarter 2016 adjusted loss (including stock-based compensation but excluding one-time items) of 6 cents per share as against earnings of 9 cents a share in the year-ago quarter.

Revenues of $144.8 million declined 13% year over year.

Quarter Details 

Revenues from Careers – North America were $99.7 million while that from Careers – International were $45 million.

The company reported operating expenses of $338 million, an increase of over 116% year over year.

The company reported adjusted EBITDA from continuing operations of $5.4 million compared with $28.1 million reported in the year-ago quarter. Cash EBITDA (i.e., operating income excluding depreciation, amortization, non-cash impairment and stock-based compensation) was $0.42 million, down from $25.3 million reported in the prior year quarter.

Earlier this month CEO Tim Yates had commented "Q3 continued to be a challenging business environment." He further clarified "While we are gaining traction in North America as a result of our new product initiatives and pay per click business, the continued pressure on our core traditional product offerings combined with the weakness in bookings in prior quarters has resulted in a decline in third quarter 2016 revenue in North America of 16% on a year over year basis."

Acquisition & MediaNews Update

The company has been going through a tough time ever since it announced its takeover by Dutch firm, Randstad for approximately $3.40 per share in Aug 2016. This is because its biggest shareholder, MediaNews (11.5% stake in Monster) continues to vehemently oppose the deal saying it has “no confidence” in the existing board and CEO owing to their repeated failures to take correct “strategic and operational decisions to maximize value for shareholders.”

Last Friday, MediaNews in an open letter to Monster shareholders announced its plans to increase its stake in the company by buying up to 8,925,815 shares of Monster for $3.70 per share. That is higher than the price offered by Randstad.

Yates replied by saying "This is yet another attempt by MNG to derail Monster's transaction with Randstad in order to take control of the Company without paying a control premium to all Monster stockholders." He also stated "MNG's indication of a partial tender offer to acquire a limited number of Monster shares is a common activist tactic that would risk the ability of all stockholders to realize immediate and certain cash value. Based upon the price of Monster's shares before the announcement of the Randstad transaction, the blended value of MNG's offer would be far less than Randstad's all-cash offer of $3.40 per share. Monster's Board and management team strongly urge Monster stockholders to tender their shares into the Randstad transaction, which is the best and only actionable offer and provides stockholders with substantial and certain cash value of $3.40 per share."

Monster plans to close the transaction with Randstad in the current quarter and refrained from giving any further guidance.

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