Monster Worldwide (MWW)
Q4 2012 Earnings Call
February 07, 2013 8:30 am ET
Executives
Lori C. Chaitman - Vice President of Investor Relations
Salvatore Iannuzzi - Chairman, Chief Executive Officer and President
James M. Langrock - Chief Financial Officer and Executive Vice President
Timothy T. Yates - Executive Vice President and Director
Analysts
Jeffrey M. Silber - BMO Capital Markets U.S.
Douglas M. Arthur - Evercore Partners Inc., Research Division
Tobey Sommer - SunTrust Robinson Humphrey, Inc., Research Division
Randle G. Reece - Avondale Partners, LLC, Research Division
John Janedis - UBS Investment Bank, Research Division
William G. Bird - Lazard Capital Markets LLC, Research Division
Presentation
Operator
Good morning. My name is Angel, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q4 and Full Year Results 2012 Earnings Call. [Operator Instructions] I would now like to turn the call over to our host, Ms. Lori Chaitman, Head of Investor Relations. Ma'am, you may begin your conference.
Lori C. Chaitman
Thank you. Good morning, and thank you for joining us on Monster Worldwide Fourth Quarter 2012 Conference Call. We will have formal remarks from Sal Iannuzzi, Chairman, President and Chief Executive Officer; and James Langrock, Executive Vice President and Chief Financial Officer. In addition to Sal and James, members of our executive management team are available to answer your questions during the Q&A part of the call. They are Tim Yates, Ted Gilvar, Michael Miller and Mark Stoever.
Before we begin, I'd like to remind you that except for historical information, the statements made during this conference call constitute forward-looking statements under applicable securities laws. Such forward-looking statements involve certain risks and uncertainties, including statements regarding the company's strategic direction, prospects and future results. Certain factors, including factors outside of our control, may cause actual results to differ materially from those contained in the forward-looking statements, including economic and other conditions in the markets in which we operate, risks associated with acquisitions or dispositions, competition and the other risks discussed in our Form 10-K and our other filings made with the Securities and Exchange Commission.
With that, I'd like to turn the call over to Sal for his comments. Sal?
Salvatore Iannuzzi
Thank you, Lori. Good morning, and thank you for joining Monster's Fourth Quarter 2012 Conference Call. I'd like to take a moment, first of all, to apologize for missing last quarter's call. Today, I'm going to discuss the current economic environment and provide a high-level review of the financial results for the quarter. Then I will update you on the status of the corporate restructuring program last quarter. And I will conclude with an update of our review of strategic alternatives and our near-term priorities.
In his comments, James will provide a more thorough financial review of the quarter and our outlook for Q1.
Overall, we felt our clients are reacting to the current economic environment, much as they have for the past year. They are continuing to be very conservative in adding new staff and making new investments. They are carefully controlling their expense budgets.
In Europe, we do not believe that the economic situation is getting worse. It appears to be stable, unfortunately, at a low level. In the U.S., we do not see signs of recovery, but they are -- we do see signs of recovery, I apologize, but they are very tentative. We are hopeful that a reduction in the uncertainty around the debt ceiling and budget negotiations may produce a lower risk environment as the year progresses. We believe this would result in increased booking momentum.
During the quarter, EPS was $0.08, slightly above the midpoint of our range of $0.05 to $0.10. Consolidated bookings were 13% lower on a year-over-year basis. Within this, Europe was down 30% while North America, excluding the Government business, was down 3%.
On a sequential basis, bookings were up approximately $50 million, reflecting the seasonally strong fourth quarter. Revenue was down 10% on a year-over-year basis and 4% on a sequential basis. EBITDA was $39 million and EBITDA margin was 18%.
As you recall, last quarter, we announced a number of actions, which are designed to substantially increase operating income while increasing resources available to our core North American and European markets. During the fourth quarter, we implemented all these actions. At a high level, the program is comprised of exiting our investment markets in China, Latin America and Turkey; reducing headcount on nonsales and other offering expenses; providing funding for additional marketing in our core North American and European markets. These programs, combined, will reduce annualized operating expense by approximately $130 million and increase operating income by approximately $80 million to $90 million in a flat revenue scenario.
Moreover, when economies around world recover and bookings and revenue begin to increase, these actions will have a positive leverage impact on operating income. James will provide more details in his comments, but we are well on track to achieving these objectives.
On the strategic alternatives front, the process continues, but it is going very slowly and we are not able to anticipate when or whether our board will have a concrete transaction to consider. At this stage, because of all the work done so far in the process, we are spending little additional management or financial resource in pursuit of that alternative. We are, of course, ready to respond quickly if an opportunity arises.
As demonstrated by the corporate restructuring and in parallel with the strategic review process, we are moving ahead rapidly with actions designed to improve our competitive position and profitability in our core markets.
Read the rest of this transcript for free on seekingalpha.com
Copyright 2013 Seeking Alpha
