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- Revenues declined 25% to $29.6 million; Operating expenses reduced by
25% or $7.3 million
- Net income of $3.9 million or $0.06 per diluted share
- Cash flow from operations of $6.8 million
- Adjusted EBITDA totaled $14.0 million or 47% of Revenues (See "Notes
Regarding the Use of Non-GAAP Financial Measures")
- Total debt outstanding reduced by $20.3 million in the first quarter of
2009; an additional $10.0 million prepaid in April 2009
NEW YORK, April 23 /PRNewswire-FirstCall/ -- Dice Holdings, Inc. (NYSE:
DHX), a leading provider of specialized career websites for professional
communities, today reported financial results for the quarter ended March 31,
2009.
First Quarter Operating Results
Revenues for the quarter ended March 31, 2009 totaled $29.6 million, a
decline of 25% from $39.6 million in the comparable quarter of 2008, as a
result of a significant decline in recruitment activity which impacted both
Dice.com and eFinancialCareers. Currency translation from pound sterling to
U.S. dollars negatively impacted revenues by $2.2 million from the same
quarter in 2008.
Operating income for the quarter ended March 31, 2009 decreased 26% to
$7.7 million versus $10.4 million in the comparable quarter of 2008. The
decline in operating income was a function of lower revenues offset by a $7.3
million reduction in operating expenses including a $5.5 million decrease in
sales and marketing expense.
Net income for the quarter ended March 31, 2009 totaled $3.9 million.
Diluted earnings per share were $0.06 for the quarter ended March 31, 2009,
unchanged from $0.06 diluted earnings per share from continuing operations in
the quarter ended March 31, 2008.
Net cash provided by operating activities for the quarter ended March 31,
2009 was $6.8 million, compared to $23.2 million in the comparable quarter of
2008.
Adjusted EBITDA for the quarter ended March 31, 2009 was $14.0 million,
compared with $16.8 million for the first quarter of 2008, a decrease of 17%.
See "Notes Regarding the Use of Non-GAAP Financial Measures."
Operating Segment Results
For the quarter ended March 31, 2009, DCS Online revenues were $22.0
million or 74% of Dice Holdings' consolidated revenues, representing a 19%
decrease from the comparable 2008 quarter. The decrease was primarily a
result of a decline in the average number of recruitment package customers
served, slightly offset by a 32% year-over-year increase in revenues at
ClearanceJobs.
The eFinancialCareers segment, which consists of eFinancialCareers
operations outside of North America, accounted for 20% of Dice Holdings'
consolidated revenues in the first quarter of 2009. For the quarter ended
March 31, 2009, eFinancialCareers revenues declined 40% or $3.9 million to
$5.9 million. A decline of $2.2 million was the result of an unfavorable
currency translation from pound sterling to U.S. dollars. Measured in pound
sterling, the eFinancialCareers international business declined 17%; our U.K.
business decreased 28%.
The remaining businesses operated by Dice Holdings, which include the
eFinancialCareers operations in North America, JobsintheMoney and Targeted Job
Fairs, are reported in the Other category. Other revenue decreased 39% to
$1.7 million for the quarter ended March 31, 2009. The decline was driven by
significant decreases in revenue at each of the businesses.
Balance Sheet
Deferred revenue at March 31, 2009 was $38.1 million compared to $40.8
million at December 31, 2008 and $52.3 million at March 31, 2008. The
decreases, compared to each period, are primarily attributable to serving
fewer annual recruitment package customers at Dice.
Net debt, defined as total debt less cash and cash equivalents and
marketable securities, was $14.9 million at March 31, 2009, consisting of
total debt of $61.2 million minus cash and cash equivalents and marketable
securities of $46.3 million. This compares to a net debt balance of $19.9
million at December 31, 2008, consisting of total debt of $81.5 million minus
cash and cash equivalents and marketable securities of $61.6 million. The
decrease in total debt was primarily a result of the Company prepaying $20.0
million of the term loan portion of its Amended and Restated Credit Facility
which matures in March 2012.
Recent Developments
In addition to making its quarterly amortization payment, in April 2009
the Company prepaid an additional $10.0 million of the term loan portion of
its Amended and Restated Credit Facility reducing the amount outstanding to
$50.9 million. During April 2009, the Company terminated $10.0 million of its
$60.0 million interest rate swap agreement, while the Company's $20.0 million
interest rate swap agreement remains unchanged.
Management Comments
Scot Melland, Chairman, President and Chief Executive Officer, stated,
"The recruitment advertising market continues to suffer substantial declines
which has greatly impacted our revenue performance. Nevertheless, we
controlled expenses to achieve solid profitability. As an example, we
moderated job seeker marketing as the recruitment needs of our customers
declined. Despite this reduction in spending, traffic at Dice.com increased
16% in the first quarter, contributing to very high service levels for our
customers." Mr. Melland added, "We continue to focus on the strategies which
will allow us to develop a stronger market position: growing our communities,
investing in customer relationships and enhancing our products."
Michael Durney, Senior Vice President, Finance and Chief Financial
Officer, said, "Strong profitability and consistent cash generation are
distinctive attributes of Dice Holdings. Our first quarter financial
performance demonstrates that even under difficult market conditions these
financial goals are achievable. Thus far, we have chosen to utilize our cash
for debt prepayments, reducing debt by more than $30 million since the
beginning of the year." Mr. Durney noted, "There is no let-up to the
challenges of this year. However, our financial flexibility and financial
discipline enables us to continue the pursuit of our strategic initiatives."
Business Outlook
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 April 23, 2009 for both the second quarter ending June 30, 2009 and
full year 2009. The Company's actual performance will vary based on a number
of factors including those that our outlined in our Annual Report on Form 10-K
for the year ended December 31, 2008, in the sections entitled "Risk Factors,"
"Forward-Looking Statements" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and our quarterly reports on
Form 10-Q.
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* − ($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 December 31, 2009 estimate, the gain from
interest rate hedges only includes the results to date or through
quarter ended March 31, 2009.
Conference Call Information
The Company will host a conference call to discuss first quarter 2009
results today at 8:30 a.m. Eastern Time. Hosting the call will be Scot W.
Melland, Chairman, President and Chief Executive Officer, and Michael P.
Durney, Senior Vice President, Finance and Chief Financial Officer.
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
available until April 30, 2009.
The call will also be webcast live from the Company's website at
www.diceholdingsinc.com under the Investor Relations section.
Investor Contact:
Jennifer Bewley
Director, Investor Relations
Dice Holdings, Inc.
212.448.4181
IR@dice.com
Media Contacts:
Makovsky + Company
David Rosen
212-508-9690
drosen@makovsky.com
Kona Luseni
212-508-9684
kluseni@makovsky.com
About Dice Holdings, Inc.
Dice Holdings, Inc. (NYSE: DHX) is a leading provider of specialized
career websites for professional communities, including technology and
engineering, financial services, accounting and finance, and security
clearance. Our mission is to help our customers source and hire the most
qualified professionals in select and highly skilled occupations, and to help
those professionals find the best job opportunities in their respective fields
and further their careers. For more than 18 years, we have built our company
by providing our customers with quick and easy access to high-quality, unique
professional communities and offering those communities access to highly
relevant career opportunities and information. Today, we serve multiple
markets primarily in North America, Europe, the Middle East, Asia and
Australia.
Notes Regarding the Use of Non-GAAP Financial Measures
Dice Holdings, Inc. (the "Company") has provided certain non-GAAP
financial information as additional information for its operating results.
These measures are not in accordance with, or an alternative for, generally
accepted accounting principles in the United States ("GAAP") and may be
different from non-GAAP measures reported by other companies. The Company
believes that its presentation of non-GAAP measures, such as adjusted earnings
before interest, taxes, depreciation, amortization, non-cash stock based
compensation expense, and other non-recurring income or expense ("Adjusted
EBITDA"), free cash flow and net debt, provides useful information to
management and investors regarding certain financial and business trends
relating to its financial condition and results of operations. In addition,
the Company's management uses these measures for reviewing the financial
results of the Company and for budgeting and planning purposes.
Adjusted EBITDA
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
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.
Forward-Looking Statements
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 Securities and Exchange Commission, including our
Annual Report on Form 10-K for the fiscal year ended December 31, 2008, under
the headings "Risk Factors," "Forward-Looking Statements" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
our quarterly reports on Form 10-Q, all of which are available on the Investor
Relations page of our website at www.diceholdingsinc.com.
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 March 31, 2009 is provided elsewhere in this press
release. Supplemental schedules provided include:
Quarterly Adjusted EBITDA Reconciliation
A reconciliation of Adjusted EBITDA for the quarter ended March 31, 2009
and 2008 is provided. This information provides the reader with the
information we believe is necessary to analyze the Company.
Quarterly Supplemental Data and Certain Non-GAAP Reconciliations
On this schedule, the Company provides certain non-GAAP information for
the quarter ended March 31, 2009 and 2008 that we believe is useful to
understanding the business operations of the Company.
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 North America
Other: eFinancialCareers (North America), Targeted Job Fairs,
JobsintheMoney
(1) Reflects simple average of three months in each quarterly period.
SOURCE Dice Holdings, Inc.
CONTACT:
Investors,
Jennifer Bewley,
Director, Investor Relations of
Dice Holdings, Inc.,
+1-212-448-4181,
IR@dice.com; or
Media,
Makovsky + Company,
David Rosen,
+1-212-508-9690,
drosen@makovsky.com; or
Kona Luseni,
+1-212-508-9684,
kluseni@makovsky.com/
/Web Site: http://www.diceholdingsinc.com /
(DHX)
