Headhunter.net Posts $788,000 in Positive EBITDA - Brief Article - Statistical Data Included

Information Superhighways Newsletter, Sept, 2001

HeadHunter.net reported positive earnings before interest, taxes, depreciation, and amortization (EBITDA) of $788,000 for the second quarter ended June 30, 2001. This was the first quarter of positive EBITDA for the company. Revenues for the second quarter of 2001 were $16.5 million, up from $9.8 million in the second quarter of 2000.

Headhunter.net grew its resume database to 2.3 million resumes, up from 1.3 million resumes at the end of the first quarter 2001, through its agreement with Yahoo! Careers and various other consumer marketing programs. Job searches jumped to more than 100 million in the second quarter, a 66 percent sequential increase from the first quarter of 2001.

Revenue for the second quarter of 2001 rose 69.5 percent to $16.5 million compared with revenue of $9.8 million in the second quarter of 2000. Second quarter 2001 revenues declined 2.7 percent sequentially from $17.0 million in the first quarter of 2001. The decline in sequential revenues was primarily related to soft demand from the corporate market, particularly in the IT and telecom sectors, offset somewhat by higher revenue from the small business and healthcare segments.

In response to the changing job markets, Headhunter.net further diversified its customer base beyond the traditional IT market and focused its efforts on categories with greater hiring demand such as healthcare and sales. As a result, the top job categories on the Web site at the end of the second quarter were: IT, healthcare, accounting, administrative, customer service, and engineering. None of the top categories represented more than 15 percent of total job postings.

Headhunter.net improved its spending efficiency on sales and marketing expenses by consolidating on-line advertising with several leading portals. Sales and marketing expenses declined to 79 percent of revenues in the second quarter, down from 114 percent in the same quarter of 2000, while traffic and job searches reached record levels.

EBITDA for the second quarter was $788,000 ($0.04 per share) compared with an EBITDA loss of $2.1 million ($0.10 per share) for the first quarter of 2001 and an EBITDA loss of $3.6 million ($0.33 per share) for the second quarter of last year. Non-cash expenses for the latest quarter included $4.4 million in depreciation and amortization expense, up from $535,000 in the second quarter of 2000. The increase in depreciation and amortization expense was primarily due to goodwill acquired through the purchase of CareerMosaic.com and MiracleWorkers.com in 2000. The company reported a net loss of $3.8 million ($0.19 per share) for the second quarter of 2001 compared with a net loss of $4.2 million ($0.38 per share) for the second quarter 2000.

Headhunter.net's cash position rose to $14.0 million in cash and cash equivalents at June 30,2001, up from $7.5 million at the end of the first quarter. During the second quarter, the company secured a fully-funded $5 million term loan and a $2.5 million revolving line of credit, which has not been drawn. The remaining $1.5 million in cash growth was generated through operations. This provides cash and availability of $16.5 million at June 30,2001.