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Monster Worldwide (NYSE:MWW)

Q1 2014 Earnings Call

May 01, 2014 8:30 am ET

Executives

Andy Rohr

Salvatore Iannuzzi - Chairman, Chief Executive Officer and President

James M. Langrock - Chief Financial Officer and Executive Vice President

Mark Stoever - Executive Vice President of Corporate Development and Internet Advertising

Analysts

William G. Bird - FBR Capital Markets & Co., Research Division

Randle G. Reece - Avondale Partners, LLC, Research Division

Douglas M. Arthur - Evercore Partners Inc., Research Division

Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division

Craig A. Huber - Huber Research Partners, LLC

Sou Chien - BMO Capital Markets Canada

Operator

Good morning. My name is Shelley, and I will be your conference operator today. At this time, I would like to welcome everyone to the First Quarter 2014 Financial Results Conference Call. [Operator Instructions] Andy Rohr, you may begin your conference.

Andy Rohr

Good morning, and thank you for joining us on Monster Worldwide's first quarter 2014 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, Mark Stoever, Executive Vice President of Corporate Development, and other members of our executive management team are available to answer your questions during the Q&A part of the call.

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 other risks discussed in our Form 10-K and our filings made with the Securities and Exchange Commission.

With that, I'd like to turn the call over to Sal for his comments.

Salvatore Iannuzzi

Thank you. Good morning, and welcome to Monster's first quarter 2014 conference call. This morning, I'm going to summarize our view of the current business environment, report on our financial results for the first quarter and comment on the -- our near-term priorities. In his comments, James will provide additional financial details and our EPS outlook for the second quarter of 2014.

I'm pleased that we have again delivered sequential revenue growth in North America and in Europe. Our client value proposition is strong, and we are encouraged by the increasing client demand we have seen for our products and the continued stabilization of revenue.

In North America, we delivered continued improvements in the quarter despite the microeconomic economy not growing. And in Europe, where the number of people working remains well below pre-recession levels, we continue to see positive trends in our businesses, particularly in the U.K., Germany and now in France and Italy.

We have made very significant progress on our new strategy, including the acquisition of social recruiting technology players TalentBin and Gozaik.

Gozaik will enhance Monster's ability to successfully connect people and job opportunities by adding increased distribution of job ads across social channels. And TalentBin provides additional employer resources for finding the best active and passive candidate across social websites.

The integration of both of these acquisitions is going very well, and they are in beta period right now and are planned for commercial launch occurring in July of this year. These acquisitions complete one key component of our new strategy designed to offer clients an unparalleled value proposition for sourcing talent, advertising jobs and a technology solution platform to manage it all. We plan to share our complete strategy with all of you at our Strategy Briefing Day we have scheduled for May 14.

Summarizing the quarter's financial results, EPS was $0.08, at the midpoint of our guidance; EBITDA was $27 million; revenue was $198 million; cash flow from operations was $19 million. I'm encouraged that, for the first time since the global economic slowdown, revenue for our -- for both our Careers-North America and Careers-International business grew sequentially.

Revenue in North America was up again with more segments showing solid sequential growth, including our staffing, e-commerce, recruitment media and newspaper channels. Moreover, all of these channels demonstrated slight but encouraging year-on-year growth.

In Europe, a strong execution and slight improvements of all our key markets continue to stabilize and produce results, which were flat to slightly up.

Our continued venture with Alma Media is already demonstrating promising results and, more importantly, turning a loss into a gain for the Eastern and Central European region. Europe's overall revenue was up sequentially.

Our businesses in India and Southeast Asia also demonstrate slight sequential improvements in the continued sluggish Asian economy.

Mobile is a key Monster focus around the world. And this region, particularly, promises significant growth opportunity as the penetration of smartphones is rapidly increasing.

Lastly, as we mentioned on our last quarter's conference call, our joint venture in South Korea with H&Q Korea was completed and is progressing very well. Our Internet Advertising & Fees business experienced its normal seasonal declines along with slightly lower consumer ad placements as we optimized the seeker experience on Monster for maximum quality applies. We remain highly confident in the opportunity for significant growth in our IAF business as we transition to our new strategy.

Across all regions and ahead of our new strategy, we continue to make progress in executing our key business priorities and delivering outstanding results for our clients. Key highlights in the quarter include we achieved traffic leadership in North America for 2 consecutive years. Of course, overall traffic is only important insofar as it converts to quality applies. So our focus is on conversion of this traffic. We are pleased to be seeing steady gains from tracking the volume of applicants delivered by Monster versus other sources. It shows we are not only delivering high volume, but high-quality applicants for our clients.

Our global membership is now over 210 million, and we continue to add a new member every 2 seconds. Mobile access increased further in the quarter, with 31% of our total traffic occurring via mobile devices. We are processing more than 1.5 million job applications from our Apply with Monster strategy, a 20% increase over last quarter. As we've said previously, this strategy opens up easy access for seekers to become Monster members and apply to our clients' job advertisements from a large and growing network of social, business and corporate career sites across the web.

Engagement on our market-leading résumé search platform is up significantly. Overall users on the platform is up 27% over last year, and the time each user spends on the site is up by 43%. This is more customers using our search platform and doing more when they are there.

Before turning the call over to James, you will note in our reported results that we successfully repurchased 5 million shares on the open market in the first quarter. This brings the total number of shares repurchased under this authorization to 26 million or 25% of the outstanding shares of Monster and returning approximately $146 million to the shareholders at an average price of $5.71 per share.

We continue to believe repurchasing shares is an attractive investment, and we'll do so aggressively, as appropriate, over the coming months.

Now I'd like to turn the call over to James for his comments.

James M. Langrock

Thank you, Sal, and good morning. Slide 1 summarizes the first quarter 2014 pro forma income statement. EPS was $0.08, the midpoint of our guidance. EBITDA was $27 million, fueled by Careers-North America. Revenue was $198 million, flat sequentially and down 7% year-over-year. We were pleased to see that our Global Careers business increased sequentially, driven by our strong execution.

As expected, operating expense of $184 million increased 2% sequentially due to normal seasonality and decreased 3% compared to the prior year.

Currency had a minimal impact on operating income during the quarter. Interest and Other was a negative $1.3 million. Equity loss was $100,000. Korea's minority interest was $1.2 million.

Slide 2 summarizes the quarters pro forma adjustments. During the quarter, we recorded $8.2 million of stock-based compensation expense. $6.4 million of facility charges primarily related to consolidation of facilities associated with our move to a new corporate headquarters in Western Massachusetts.

From a cash flow perspective, this move is neutral for 2014 and favorable in 2015 and beyond. And an $11.8 million gain related to the Alma Media transaction, offset by a $5.5 million tax expense associated with this transaction. Please note that our 15% interest in this new joint venture is valued at $25 million.

Slide 3 shows operating expense trends. Salary-related was $94 million, an increase of 3% on a sequential and year-over-year basis. The sequential increase represents the normal seasonal increase in Q1, primarily related to FICA. The year-over-year increase relates to targeted increases in quota bearing headcount. We ended the quarter with headcount of slightly over 4,000, up 2% sequentially and up 6% year-over-year.

Marketing expense was $41 million, an increase of 7% on a sequential basis and a decrease of 16% on a year-over-year basis. We continue to drive quality applies for our customers, while holding a line on our marketing spend. Office and general expense was $49 million, a decrease of 3% sequentially and a 2% reduction on a year-over-year basis. As we have said previously, we will continue to make strategic investments in certain countries as we see improvements in the economic environment.

Slide 4 reviews non-GAAP segment performance. Revenue in our North American Careers business was $112 million, up 1% sequentially and down 4% year-over-year. EBITDA was $24 million, and EBITDA margins were 21%.

Revenue from our e-commerce business was up year-over-year for the fifth consecutive quarter, an extremely encouraging sign. We're encouraged by our booking performance in Q1, and while Q2 historically tends to be the lowest revenue quarter, we are confident we will show year-over-year revenue growth in North America for first time since Q3 2011.

Revenue in the International Careers segment was up 1% sequentially and down 9% year-over-year. As Sal mentioned, this is the first time since Q4 2010 that both Careers-North America and Careers-International were both up sequentially, a very positive sign for future growth prospects.

Revenue from Europe was up 2% sequentially and down 9% year-over-year. While we continue to operate in a challenging environment in Europe, stabilization we saw in Q2 and Q4 of 2013 continued to Q1 in some of our key countries, including Germany, U.K., France, Sweden and Italy.

APAC revenue was down 1% on a sequential basis and down 11% year-over-year, primarily driven by tough macroeconomic environment in India. Korea continues to hold its own in a macroeconomic environment that has shown slight improvement. Careers-International EBITDA margins were 3%. Revenue from our IAF segment was down 12% sequentially and down 13% year-over-year. EBITDA was $5 million.

Slide 5 is key balance sheet and cash flow items. Pro forma EBITDA was $27 million in the first quarter. Net cash provided by operating activities was $19 million. As we mentioned last quarter, we expect to continue to generate between $15 million and $25 million of operating cash flow on a quarterly basis.

Capital expenditures were $11 million, higher than our normal run rate, primarily due to our new facility in Weston. Going forward, CapEx is expected to be in the range of $7 million to $9 million per quarter.

Deferred revenue was $342 million, flat on a sequential basis and down 4% year-over-year. Total liquidity was $200 million. We returned $40 million to the shareholders through share repurchases, totaling 5 million shares in the quarter. Since the inception of the program in Q2 of 2013, we have repurchased 26 million shares, or 25% of our float, returning $146 million to our shareholders at an average price of $5.71.

We continue to believe that repurchasing shares at the current levels is an attractive investment for us, and we will continue to do so aggressively, as appropriate, over the coming months.

Finally, we spent a total of $27 million in the quarter on our acquisitions of TalentBin and Gozaik, critical pieces of our overall strategy. The previously announced Alma Media transaction closed in January, and we now have an initial equity ownership in this profitable business of 15%, with the opportunity to increase ownership to 20% in the future. As I mentioned earlier, we have valued our share of the JV at $25 million. We have recorded our share of profits in the JV and our Q1 results. We will no longer consolidate the results of our contributed Eastern European businesses, which, on a full year basis, represent approximately $2.5 million of revenue and $3.5 million of expenses. In the short term, the financial impact on the quarterly results of the company will be minimal.

Slide 6 is our outlook for Q2. Second quarter 2014 non-GAAP EPS is expected to be in the range of $0.07 to $0.11, which excludes approximately $9 million of stock-based compensation.

Now I'd like to turn the call back to Sal for his concluding remarks.

Salvatore Iannuzzi

Thanks, James. We're excited about the period ahead, where we will officially launch our new strategy. As I mentioned earlier, several of our initiatives will hit the North American market in beta form this quarter. As a matter of fact, they're going on right now.

Europe will follow each North American release by roughly 90 days, and we expect full implementation in North America by the fourth quarter of this year.

We're really looking forward to our strategy briefing on the 14th and sharing the fullness of our plan with you. Our primary goal is to grow revenue, gain market share, and we have designed this strategy to drive significant scale to our business through new products, new technologies, and new business models. We have made substantial progress towards that end, while, at the same time, generating solid positive cash flow. We remain optimistic that the macro environment will continue to move in the right direction. I hope to see many of you on May 14 at our office in Weston, where my goal is to have you leave sharing the excitement and enthusiasm that I and our employees and our Board of Directors have for Monster's ability to create significant value to our customers and shareholders alike.

I'd like to thank our shareholders, global clients, and entire employee base for their continued support.

Operator, can you please open up the call for questions?

Question-and-Answer Session

Operator

[Operator Instructions] Your first question comes from William Bird from FBR.

William G. Bird - FBR Capital Markets & Co., Research Division

Sal, I was wondering if you could just talk about the slope of improvement you're seeing in International right now. Is International also likely to see sequential growth in Q2?

Salvatore Iannuzzi

We -- James, to the second part of your question first, the answer is yes, we do. We're seeing an improvement in virtually every major country that we operate in. In fact, even the second-tier countries are showing some sign of improvement. I think that we're -- whether it happens next quarter or Q4, its hard to -- not too sure, but I think in certain countries, we're probably going to see not only sequential growth, but also year-on-year growth. Here in North America, I think that the situation is such that even notwithstanding that Q1 was a very slow economic period, and there's quite a bit of discussion on that subject in the journal this morning, we showed good sequential growth and, I think, we're poised -- again, it's always hard to predict exactly when, but we're poised through, I believe, hopefully as close as next quarter for not only sequential, but also year-on-year growth in the next quarter. And, as I said, if that doesn't happen, certainly by Q4.

William G. Bird - FBR Capital Markets & Co., Research Division

And Sal, help us to think about buybacks and buyback capacity. Will buybacks match cash flow, or are you willing to borrow more to buy back more stock?

Salvatore Iannuzzi

We have significant capability now to buy additional stock. I think James can give you a more accurate number with regard under the -- how much more room we have under the current authorization. But with the stock at these prices, we certainly continue to believe the stock is excessively undervalued, and we see opportunity to continue to buy the stock. In Q1, we purchased 5 million shares at an average price for the quarter of about $7.75. Overall, we purchased 25% of the stock, as I said earlier, for approximately $5.71. The point is even at $7.75, we continue to believe that the stock is significantly undervalued and there's -- and it's good value for our shareholders for us to continue to buy and to buy aggressively.

James M. Langrock

So -- Bill, this is James. We have, under the current plan authorization, $54 million under the current plan. And we could always look at, when that plan runs out, we could look at getting new authorization if we believe, at that time, it will create shareholder value. So we'll look at it. But right now, we have $54 million under the current plan remaining.

Operator

And your next question comes from the line of Randle Reece from Avondale Partners.

Randle G. Reece - Avondale Partners, LLC, Research Division

I'm fascinated with the growth in your résumé database. And I was wondering if you could tell us more about your strategy to grow it and to refresh it.

Salvatore Iannuzzi

Randy, the best answer I can give you to that, we'll see you in a couple of weeks, and we'll bring you through it. But suffice it to say that if you're impressed with the growth in our résumé database to date, I think after the 14th, you'll see that the increase will be quite dramatic.

Randle G. Reece - Avondale Partners, LLC, Research Division

I was wondering if there are more places where Monster needs to have relationships or participate. In just in the recruitment media world, it seems like aggregators, in particular, are capturing a lot of spend, as well as tightly niche sites.

Salvatore Iannuzzi

I think that -- again, I don't mean to be glib about this, but I think that, on the 14th, you'll see what our response is to -- really, with our incentive to be the preeminent site, not only here in the United States, but in other parts of the world in terms of having the most traffic, the most important, the most high-quality candidates, both passive as well as active. And I think, on the 14th, we'll demonstrate how we are going to do that and, in fact, how we've already started to do it. And the full implementation of the strategy will be put in place before the end of the year, certainly, here in North America and very soon thereafter in Europe.

Operator

And your next question comes from the line of Doug Arthur from Evercore.

Douglas M. Arthur - Evercore Partners Inc., Research Division

A couple of questions. Yes, I mean, you talked about seasonality, James, on the expense side. It seems that profitability, even adding back stock comp in the North American operations, really took a hit, particularly sequentially in the quarter, despite revenues ticking up a little bit. So can you sort of explain that in terms of marketing or salary or hiring? And then I've got a follow-up on the non-GAAP adjustments.

James M. Langrock

Okay. So really, on a sequential basis, the decline in the EBITDA margins in the North Americas is really -- it's all around expenses, and its -- the majority of it is around salary, the FICA. And there is a little uptick in marketing, but it was really around the seasonality in the expenses and a little bit of an uptick in FICA, which we did highlight in the last quarter the seasonality. So that's what's really driving it, offset by the uptick in revenue.

Douglas M. Arthur - Evercore Partners Inc., Research Division

So the FICA goes away in this -- in Q2, obviously, because that's generally a first quarter event?

James M. Langrock

Yes, it's a little -- it starts to go away, then obviously, Q3 and Q4, it's less and less. But yes, it starts to dissipate in Q2. Absolutely, Doug.

Douglas M. Arthur - Evercore Partners Inc., Research Division

Okay. And then, on the non-GAAP segment adjustments, the -- it's for a total of $14.5 million, of which stock comp is $8.1 million of that. The building move is the second component. Is most of that in corporate expense? But it doesn't look like the entire building charge is in corporate expense, so the rest of it, I assume, is in North America non-GAAP adjustments?

James M. Langrock

Yes, the remaining piece is in North America, yes.

Douglas M. Arthur - Evercore Partners Inc., Research Division

But that's a fairly small -- most of the $5.4 million non-GAAP adjustment in North America is stock comp, but there's a small component of the building?

James M. Langrock

Correct, yes. Actually, both the majority of that $6.4 million was the building, and there was some transactional cost with the acquisitions, Randy, which would be in North America.

Operator

Your next question comes from the line of Mark Marcon from Robert W. Baird.

Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division

So with regards to the -- what you're going to preview on the 14th, that's actually going to roll out in the U.S. when, exactly?

Salvatore Iannuzzi

Mark, this is Sal. Right now, some -- certain pieces of our strategy are in beta. Beta -- the beta period will end by the end of June. A number of products will be introduced for -- across North America, across our sales forces, in -- by July 1. And then there'll be continuous rollout of introductions between then, with all the entire new strategy being available for sale October 1 of this year, and the full implementation by January 1. In other words, in October, we will be selling. It'll be fully utilizable, if I can use that word, by our customers starting January 1 in the U.S. In Europe, those products, which will be introduced and available for sale in July. In the major countries in Europe, they will be available 3 months later. And what we introduce in Q4 in the United States will be available in Europe 3 months after that. So in some -- in North America and in Europe, at least some major countries in Europe, we will be fully engaged with all parts of the new strategy by roughly the first quarter -- by the end of the first quarter, beginning of the second quarter of next year.

Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division

Okay. And so just to understand the rollout vis-à-vis the key fourth quarter contract signing period, how much time and under what circumstances can some of the enterprises test this out prior to committing to a typical annual contract?

Salvatore Iannuzzi

For some of our products, again, the ones that we are introducing across the board for all of our customer base, making them available to all of our customer base in July, July 1, we're in beta on well over 200 customers right now. And that will continue over the next 1.5 months or so. And then, as I said, we will go full-scale. There'll be another -- several other launches, some bigger, some smaller, between then and October. And then we will -- all products will become available.

Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division

Okay. Is the July one the key highlight, or is the thing that you're the most excited about coming later?

Salvatore Iannuzzi

I'll be most excited when it's all out there and everybody's buying all of it. So it's -- again, it's hard to -- certain products are going to have, obviously, more appeal for certain customers, so it's difficult to answer that question. But I think the -- and not to be too mysterious, but I think the breadth and scope of what we're doing, the ability to reach out to people and provide quality candidates is going to be very, very broad, much broader than, I think, any enterprise has the capability to deliver today. And I think our customers are certainly, from some discussions we've had on a very selective basis to date, I think there's quite a bit of excitement out there in terms of what Monster will be able to deliver.

Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division

Great. And then can you talk a little bit about just the financial profile going forward over the next few quarters? I mean, so the FICA is basically the predominant driver in terms of the diminishing with regards to adjusted EBITDA sequentially, right?

Salvatore Iannuzzi

Correct.

Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division

Yes. So when those -- when we hit the limits and those run off, we should get an automatic bump. And you also indicated that we should see sequential growth, right, in terms of both North America and International?

James M. Langrock

Yes, from a revenue perspective.

Salvatore Iannuzzi

Yes.

Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division

Great. So that should flow down to the operating line or to the EBITDA line, no?

James M. Langrock

Yes.

Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division

Great. And how should we think about IAF profitability?

James M. Langrock

So IAF...

Salvatore Iannuzzi

That's a great question. Why don't we turn it over to Mr. Stoever, who runs IAF, and I'd love to hear the answer to that one.

Mark Stoever

Hello, Mark. Yes -- see you on the 14th, Mark. The profitability -- as you know, this business has always had a good margin, and it continues to be that way. So we actually are encouraged by the continued improvement there.

Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division

Didn't it drop a lot? Margin?

Mark Stoever

A little bit. Slightly because of the revenue dip that we saw in Q1, as Sal said it, we had seasonal declines along with as we continued to focus our efforts on the monster.com site to drive as many apply starts, we're focused there and feel very, very good about where those numbers are going. So I think Sal said our belief is that advertising has big opportunity, particularly as you learn more about the strategy and how we're branching out in other areas and things, that we believe we can see some good growth there, but not at the expense of the user experience or at the expense of what drives the core value of Monster.com. So that's our focus, and we feel pretty good about where we're at and moving forward with it.

Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division

So while we're talking...

Salvatore Iannuzzi

Mark, I think the -- what I'd like to add to that is we've taken some real estate away from Mark and the IAF business and utilized it to increase traffic and apply starts, most importantly, on Monster. So its -- think of it as, in a sense, we are spending more to get high-quality traffic and more applies and all that. In the future though -- this is a tactical move. In the future, I think when -- again, and not to be too mysterious, the breadth of Monster, the amount of real estate that Monster will own on the Internet will be dramatically increased. That increase will present significant opportunity for IAF to expand its ability to advertise for customers in a much more to scale than anything we can hope to. Really, what happened in Q1 was intentional. It was -- I view it as trimming around the edges. I think the opportunity that's to come is, let's just say, much, much more significant.

Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division

Okay, I just wanted to get a sense for, I mean, should we just model IAF kind of sequentially flat from -- I mean, I just don't know the expectations.

Salvatore Iannuzzi

Yes, I think for right now that, that's absolutely fair.

Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division

Okay, so the growth will really be concentrated in Careers, both North America and International, with North America really showing margin improvement shorter -- sooner, rather than later?

Salvatore Iannuzzi

On a sequential basis, yes, absolutely.

Operator

[Operator Instructions] Your next question comes from the line of Craig Huber from Huber Research Partners.

Craig A. Huber - Huber Research Partners, LLC

First of all, I have -- maybe I missed this, but your Europe operation, your Asian operation, can you give us the sequential revenue growth in each of those, and I'll say year-over-year? Please do, and I have a follow-up.

James M. Langrock

So in Europe, the sequential growth was 2%. And in Asia, which the 2 main countries are Korea and India, was down 1% sequentially.

Craig A. Huber - Huber Research Partners, LLC

What about year-over-year, please?

James M. Langrock

Year-over-year, Europe was down 9% and Asia was down 11%.

Craig A. Huber - Huber Research Partners, LLC

Okay. Then how should we think about the marketing and promotion line for the rest of the year here? I mean, it's $41.4 million you reported in the quarter. You think it will be somewhat flattish to that the rest of the year, or is this a high point for the year?

James M. Langrock

No, I think it's -- the marketing policy, as we said earlier, and investments in salespeople, as well, is that we obviously look at that very closely. There could be a quarter where it's down a couple of million or up a couple of million as we see opportunities. So the $41 million, I wouldn't call this the high point. It's probably a decent run rate to use, but we manage that closely, and we see opportunities in various countries. As things are improving, you may need to make some investments to take advantage of those opportunities. But the $41 million is probably a good number from a run rate. I do want to caution, there could be quarters where we decide we see opportunity that we could invest more or there might be quarters where we don't see it and we can reduce the spend. So marketing, they look at, very closely, from a business standpoint, what's going on at a country level.

Salvatore Iannuzzi

No, I think on -- just to follow James' point, I think we had several questions now on expense. And obviously, it's an area that you're concerned about and we watch very carefully. But given the new strategy, given the movement in the macroeconomic picture, there may be opportunities out there, for example, to add sales people. There may be opportunities out there where we think, in the quarters to come, it may be advantageous to spend a few more dollars in some targeted marketing. Those opportunities, I hope, present themselves because it means that the future that we see more optimism, both because of what we're developing and what we're going to release, as well as the macroeconomic picture. So I just want to make sure that everyone understands that, based on what we see in front of us today, the numbers we've given are an accurate depiction of where we claim to be. But much like -- in a sense, much like the stock buyback, if this opportunity presents itself to buy or, in this case, to spend because we think the opportunity is right, we're going to do that. And we'll explain it when we do it, but I want to make sure that, that's is very clear.

Craig A. Huber - Huber Research Partners, LLC

Okay. Then also, on the share buyback side, the original $200 million authorization, I assume in that there is no expectation to be selling Korea. You've got roughly $90 million, I believe, after tax. Should we think of that you actually have -- thinking of maybe potentially buying back the $200 million plus you have another $90 million sitting around from the Korean asset sale?

James M. Langrock

So we -- like I said earlier on it is that we still have $54 million left on the current authorization. And then, when we exhaust that, at that point in time, if we still believe that buying back shares is an attractive investment, and from a shareholder value standpoint, we would obviously increase it and do so at such time. But we still have $54 million under the current authorization. And until that point, we would not have a problem increasing that if we think that's the best use of cash at that time.

Salvatore Iannuzzi

With everything we see in front of us right now, we have a predispositions to, when we exhaust the current authorization and it is the -- again, at this point in time, the expectation is that the board would authorize an expansion of the buyback. We see the value of the company, and it's roughly -- you mentioned Korea. The Korean transaction, the -- it's a small issue in the overall scheme of things. The valuation increase. These -- with regards to Alma Media transaction, there's plenty of indicators that the company is still very significantly undervalued. And if the opportunity is right, it will be very much in our shareholders' benefit, to the benefit that we will continue to do what we're doing in terms of the buyback.

Craig A. Huber - Huber Research Partners, LLC

And my last question, if I could, please. You've obviously pruned some of the countries here out of your portfolio in recent years and stuff. Do you think -- are you pretty much set now in the regions around the world where you want to be at, or do you think there's more to go here kind of on the cost front?

Salvatore Iannuzzi

I'm sorry, can you repeat your question?

Craig A. Huber - Huber Research Partners, LLC

I mean, you've gotten out of several countries in the last couple of years. I'm just wondering if you're done with that.

Salvatore Iannuzzi

I think that, that's a very difficult question to answer. There's certainly, I can tell you, there's nothing on the agenda right now. But as things evolve, there may be reasons why we may decide to either merge with a partner in certain areas or that -- to withdraw. I think we talked about a little bit that mobile is increasingly important. We see a lot of opportunity with mobile in being a method to enter new markets in new countries in a very cost-efficient way. And this will -- and it also helps -- and maybe the thing to do, so to answer your question, there will certainly -- there's always the possibility we may exit a certain market, but I will tell you that there is a greater possibility right now that we will enter new markets.

Operator

And your last question comes from the line of Jeff Silber.

Sou Chien - BMO Capital Markets Canada

This is Henry Chien calling on behalf of Jeff. I just wanted to dig in a little bit into your comments previously about the growth in traffic and conversion. Are there any quantitative metrics that you could share and help us rate that growth? And just as a follow-up to that, any thoughts on whether that's growth in the overall market versus taking share?

Mark Stoever

Yes, Henry, its Mark Stoever. Yes, I think the best metric to focus on as we talk about the improvements to the site would be what Sal said, which is, at the highest level, we continue to see overall traffic to the site, the visits and the usage up. But then more importantly, we focus on the conversion of that traffic to what we have referred to as applies to our customers' advertisement. And we have been focused on this for several periods, as you know. We comment on it in our prepared remarks each quarter. So I would say we've had significant improvement, 40%, 50% just this year, in overall apply starts to those jobs. So it's very focused and not all that complex. Just get good quality traffic and converted to apply starts, and clients are happy.

Salvatore Iannuzzi

I think what we're seeing -- Q1, the economic data this morning, again, use North America, which is probably the clearest example. Economic activity in Q1 was by no means robust, okay? I think the term used was that the economy, in essence, almost came to a halt in Q1. I think that the growth we are seeing, while, without question, the improved -- and it's been very sluggish, the recovery, and many have stated that the recovery that's occurred in the last 5 years since the Great Recession is the slowest recovery in history in the U.S. economy. Q1 was being termed, right now, as a blip. We share that sentiment due to a number of factors. But I think that we are -- for us to be seeing sequential growth during this period, a lot of it has to do with the robustness of the products we currently have, how well they're delivering value to the customers. We're seeing -- we're really encouraged because we're seeing growth -- a substantial growth, actually. They're small numbers, but it's always been a very positive indicator, the small -- e-commerce and the newspaper business, which tend to be small -- very small businesses in the country, have grown at double-digit numbers. Certainly, e-commerce has grown at double-digit numbers in Q1 while the economy really slowed down. We believe that traditionally, that's been a precursor of things to come. So we think the economy will -- starting to pick up speed again. And -- but more importantly is that the products we're offering, the performance of the products is such that customers want to buy them, all right? And we're encouraged by both of those. And we're seeing some of that activity now with big customers, the major staffing firms, are talking to us on a scale that they haven't in quite some time. We're seeing it with some big commercial users. And as I said, there's a fairly healthy level of activity with the small business. So we're optimistic as that's what's happening in a very slow economy that, if we get to win flow back, both with the economy, as well as with the strength of the product offering, we should benefit and benefit significantly from that going forward.

Operator

There are no further questions at this time. I turn the call back to Mr. Iannuzzi.

Salvatore Iannuzzi

Okay. Thank you very much for listening. We look forward to seeing, hopefully, all of you, or certainly most of you, on the 14th. And thank you again.

Operator

This concludes today's conference call. You may now disconnect.

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