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|Dice Holdings, Inc. Reports First Quarter 2009 Results|
First Quarter Operating Results
Revenues for the quarter ended
Operating income for the quarter ended
Net income for the quarter ended
Net cash provided by operating activities for the quarter ended
Adjusted EBITDA for the quarter ended
Operating Segment Results
For the quarter ended
The eFinancialCareers segment, which consists of eFinancialCareers
The remaining businesses operated by
Deferred revenue at
Net debt, defined as total debt less cash and cash equivalents and
marketable securities, was
In addition to making its quarterly amortization payment, in
In light of the current recruitment advertising and overall economic
environments, the Company continues to believe there is a broader than normal
range of potential outcomes for financial performance during 2009. Rather
than provide a wide range to encompass potential outcomes, the Company is
providing a current view of estimated financial performance based on what it
sees as of
Quarter ending Year ending June 30, 2009 December 31, 2009 Total Revenue $27 mm $106 mm ------------- Estimated Contribution by Segment --------------------------------- DCS Online 75% 74% eFinancialCareers 19% 20% Other 6% 6% Sales & Marketing expense $9 mm $36 mm Adjusted EBITDA $11.5 mm $45 mm Depreciation and amortization $4.7 mm $16.5 mm Non-cash stock compensation expense $1.5 mm $5.0 mm Interest expense, net $1.6 mm $6.6 mm (Gain) loss from interest rate hedges* âˆ’ ($0.4) mm Income taxes $1.4 mm $6.5 mm Net income $2.3 mm $10.8 mm Adjusted EBITDA Margin 43% 42% Fully diluted share count 65 mm 65 mm * For the purposes of the
The Company will host a conference call to discuss first quarter 2009
results today at
The conference call can be accessed live over the phone by dialing
866-277-1181 or for international callers by dialing 617-597-5358; the
participant passcode is 85022218. A replay will be available two hours after
the call and can be accessed by dialing 888-286-8010 or 617-801-6888 for
international callers; the replay passcode is 73945968. The replay will be
The call will also be webcast live from the Company's website at www.diceholdingsinc.com under the Investor Relations section.
Notes Regarding the Use of Non-GAAP Financial Measures
Adjusted EBITDA is a metric used by management to measure operating performance. Management uses Adjusted EBITDA as a performance measure for internal monitoring and planning, including preparation of annual budgets, analyzing investment decisions and evaluating profitability and performance comparisons between us and our competitors. The Company also uses this measure to calculate amounts of performance based compensation under the senior management incentive bonus program. Adjusted EBITDA, as defined in our Amended and Restated Credit Facility, represents net income (loss) before interest expense, interest income, income tax expense, depreciation and amortization, non-cash stock compensation expense, extraordinary or non-recurring non-cash income or expense, and to add back the deferred revenues written off in connection with acquisition purchase accounting adjustments.
We consider Adjusted EBITDA, as defined above, to be an important indicator to investors because it provides information related to our ability to provide cash flows to meet future debt service, capital expenditures and working capital requirements and to fund future growth as well as to monitor compliance with financial covenants. We present Adjusted EBITDA as a supplemental performance measure because we believe that this measure provides our board of directors, management and investors with additional information to measure our performance, provide comparisons from period to period and company to company by excluding potential differences caused by variations in capital structures (affecting interest expense) and tax positions (such as the impact on periods or companies of changes in effective tax rates or net operating losses), and to estimate our value.
We present this discussion of Adjusted EBITDA because covenants in our Amended and Restated Credit Facility contain ratios based on this measure. Our Amended and Restated Credit Facility is material to us because it is one of our primary sources of liquidity. If our Adjusted EBITDA were to decline below certain levels, covenants in our Amended and Restated Credit Facility that are based on Adjusted EBITDA may be violated and could cause, among other things, an inability to incur further indebtedness and in certain circumstances a default or mandatory prepayment under our Amended and Restated Credit Facility.
Adjusted EBITDA is not a measurement of our financial performance under GAAP and should not be considered as an alternative to net income, operating income or any other performance measures derived in accordance with GAAP or as an alternative to cash flow from operating activities as a measure of our profitability or liquidity.
Free Cash Flow
We define free cash flow as net cash provided by operating activities from continuing operations minus capital expenditures. We believe free cash flow is an important non-GAAP measure as it provides useful cash flow information regarding our ability to service, incur or pay down indebtedness or repurchase our common stock. We use free cash flow as a measure to reflect cash available to service our debt as well as to fund our expenditures. A limitation of using free cash flow versus the GAAP measure of net cash provided by operating activities is that free cash flow does not represent the total increase or decrease in the cash balance from operations for the period since it excludes cash used for capital expenditures during the period.
Net Debt is defined as total debt less cash and cash equivalents and marketable securities. We consider net debt to be an important measure of liquidity and an indicator of our ability to meet ongoing obligations. We also use net debt, among other measures, in evaluating our choices for capital deployment. Net Debt presented herein is a non-GAAP measure and may not be comparable to similarly titled measures used by other companies.
This press release contains forward-looking statements. You should not
place undue reliance on those statements because they are subject to numerous
uncertainties and factors relating to our operations and business environment,
all of which are difficult to predict and many of which are beyond our
control. Forward-looking statements include information concerning our
possible or assumed future results of operations, including descriptions of
our business strategy. These statements often include words such as "may,"
"will," "should," "believe," "expect," "anticipate," "intend," "plan,"
"estimate" or similar expressions. These statements are based on assumptions
that we have made in light of our experience in the industry as well as our
perceptions of historical trends, current conditions, expected future
developments and other factors we believe are appropriate under the
circumstances. Although we believe that these forward-looking statements are
based on reasonable assumptions, you should be aware that many factors could
affect our actual financial results or results of operations and could cause
actual results to differ materially from those in the forward-looking
statements. These factors include, but are not limited to, competition from
existing and future competitors, failure to maintain and develop our
reputation and brand recognition, failure to increase or maintain the number
of customers who purchase recruitment packages, cyclicality or downturns in
the economy or industries we serve, and the failure to attract qualified
professionals or grow the number of qualified professionals who use our
websites. These factors and others are discussed in more detail in the
Company's filings with the
You should keep in mind that any forward-looking statement made by us herein, or elsewhere, speaks only as of the date on which we make it. New risks and uncertainties come up from time to time, and it is impossible for us to predict these events or how they may affect us. We have no obligation to update any forward-looking statements after the date hereof, except as required by federal securities laws.
DICE HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands except per share amounts) For the three months ended March 31, 2009 2008 Revenues $29,569 $39,569 Operating expenses: Cost of revenues 1,830 2,417 Product development 795 1,172 Sales and marketing 9,436 14,906 General and administrative 4,996 5,549 Depreciation 921 863 Amortization of intangible assets 3,891 4,242 Total operating expenses 21,869 29,149 Operating income 7,700 10,420 Interest expense (1,923) (2,684) Interest income 83 482 Gain (loss) from interest rate hedges 388 (2,266) Income from continuing operations before income taxes 6,248 5,952 Income tax expense 2,390 2,186 Income from continuing operations 3,858 3,766 Discontinued operations: Income from discontinued operations - 519 Income from discontinued operations, net of tax - 519 Net income $3,858 $4,285 Basic and diluted earnings per share: From continuing operations $0.06 $0.06 From discontinued operations - 0.01 $0.06 $0.07 Weighted average diluted shares outstanding 65,660 65,346 DICE HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) For the three months ended March 31, 2009 2008 Cash flows provided by operating activities: Net income $3,858 $4,285 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 921 863 Amortization 3,891 4,242 Deferred income taxes (1,625) 493 Gain on sale of joint venture - (611) Amortization of deferred financing costs 208 208 Share based compensation 1,475 1,296 (Gain) loss from interest rate hedges (388) 2,266 Changes in operating assets and liabilities: Accounts receivable 2,416 1,040 Prepaid expenses and other assets (80) (55) Accounts payable and accrued expenses (1,794) 2,015 Income taxes payable 296 1,505 Deferred revenue (2,460) 6,030 Other, net 97 (415) Net cash provided by operating activities 6,815 23,162 Cash flows provided by (used for) investing activities: Purchases of fixed assets (846) (756) Maturities and sales of marketable securities 2,500 100 Net cash provided by (used for) investing activities 1,654 (656) Cash flows used for financing activities: Payments on long-term debt (20,300) (2,400) Payment of costs related to initial public offering - (354) Proceeds from stock option exercises - 3 Net cash used for financing activities (20,300) (2,751) Effect of exchange rate changes (947) 793 Net change in cash and cash equivalents for the period (12,778) 20,548 Cash and cash equivalents, beginning of period 55,144 57,525 Cash and cash equivalents, end of period $42,366 $78,073 DICE HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands) ASSETS March 31, December 31, 2009 2008 Current assets Cash and cash equivalents $42,366 $55,144 Marketable securities 3,959 6,497 Accounts receivable, net 10,086 12,653 Deferred income taxes - current 1,088 1,346 Prepaid and other current assets 1,840 2,219 Total current assets 59,339 77,859 Fixed assets, net 5,898 5,938 Acquired intangible assets, net 55,041 59,119 Goodwill 136,196 137,416 Deferred financing costs, net 2,500 2,708 Other assets 211 129 Total assets $259,185 $283,169 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable and accrued expenses $8,448 $10,306 Deferred revenue 38,143 40,758 Current portion of long-term debt 1,000 1,000 Interest rate hedge liability - current 1,394 - Income taxes payable 2,097 2,195 Total current liabilities 51,082 54,259 Long-term debt 60,200 80,500 Deferred income taxes - non-current 14,067 15,998 Interest rate hedge liability- non-current 787 2,568 Other long-term liabilities 6,410 6,338 Total liabilities 132,546 159,663 Total stockholders' equity 126,639 123,506 Total liabilities and stockholders' equity $259,185 $283,169 Supplemental Information and Non-GAAP Reconciliations
On the pages that follow, the Company has provided certain supplemental
information that we believe will assist the reader in assessing our business
operations and performance, including certain non-GAAP financial information
and required reconciliations to the most comparable GAAP measure. A quarterly
balance sheet, statement of operations and statement of cash flows for the
fiscal quarter ended
Quarterly Adjusted EBITDA Reconciliation
A reconciliation of Adjusted EBITDA for the quarter ended
Quarterly Supplemental Data and Certain Non-GAAP Reconciliations
On this schedule, the Company provides certain non-GAAP information for
the quarter ended
DICE HOLDINGS, INC. QUARTERLY ADJUSTED EBITDA RECONCILIATIONS (Unaudited) (in thousands) For the three months ended March 31, 2009 2008 Reconciliation of Net Income to Adjusted EBITDA: Net income $3,858 $4,285 Discontinued operations - (519) Interest income (83) (482) Interest expense 1,923 2,684 Income tax expense 2,390 2,186 Depreciation 921 863 Amortization of intangible assets 3,891 4,242 Non-cash stock compensation expense 1,475 1,296 (Gain) loss from interest rate hedges (388) 2,266 Adjusted EBITDA $13,987 $16,821 Reconciliation of Operating Cash Flows to Adjusted EBITDA: Net cash provided by operating activities $6,815 $23,162 Interest expense 1,923 2,684 Interest income (83) (482) Income tax expense 2,390 2,186 Deferred income taxes 1,625 (493) Change in accounts receivable (2,416) (1,040) Change in deferred revenue 2,460 (6,030) Changes in working capital 1,481 (3,050) Deferred financing costs (208) (208) Adjustments for cash flows from discontinued operations - (519) Gain on discontinued operations - 611 Adjusted EBITDA $13,987 $16,821 DICE HOLDINGS, INC. NON-GAAP AND QUARTERLY SUPPLEMENTAL DATA (Unaudited) (dollars in thousands except per customer data) For the three months ended March 31, 2009 2008 Revenue by Segment DCS Online 21,995 $27,075 eFinancialCareers 5,922 9,781 Other 1,652 2,713 $29,569 $39,569 Percentage of Revenue by Segment DCS Online 74.4% 68.4% eFinancialCareers 20.0% 24.7% Other 5.6% 6.9% 100.0% 100.0% Sales and Marketing Expense $9,436 $14,906 Sales and Marketing Expense as a Percentage of Revenue 31.9% 37.7% Adjusted EBITDA $13,987 $16,821 Adjusted EBITDA Margin 47.3% 42.5% Dice.com Recruitment Package Customers Beginning of period 7,600 8,700 End of period 6,850 9,150 Dice.com Average Monthly Revenue per Recruitment Package Customer (1) $854 $859 Net cash provided by operating activities $6,815 $23,162 Purchases of fixed assets (846) (756) Free Cash Flow $5,969 $22,406 Deferred Revenue (end of period) $38,143 $52,269 Segment Definitions: DCS Online: Dice.com and ClearanceJobs eFinancialCareers: eFinancialCareers worldwide, excluding