HotJobs Achieves Pro Forma Profitability of $.04 Per Share; Pro Forma Profitability One Quarter Ahead of Expectation

Business Wire, July 25, 2001

Business Editors

NEW YORK--(BUSINESS WIRE)--July 25, 2001

-- Revenue in 2Q01 up 41% vs. 2Q00, ahead of expectations

-- 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), 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.