- Revenues grew 30% to $39.6 million
- Operating income increased 128% to $10.4 million
- Income from continuing operations totaled $3.8 million, or $0.06 per
diluted share, including the impact of a $2.3 million non-cash, pre-tax
charge related to interest rate swap agreements
- Net income totaled $4.3 million
- Cash flow from operations grew 66% to $23.6 million
- Adjusted EBITDA increased 43% to $16.8 million (See "Notes Regarding the
Use of Non-GAAP Financial Measures")
NEW YORK, April 29 /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, 2008.
First Quarter Operating Results
Total revenues for the quarter ended March 31, 2008 increased 30% to
$39.6 million versus $30.4 million in the comparable quarter of 2007. The
increase was driven by strong performance at eFinancialCareers, as well as
an increase in the number of recruitment package customers and growth in
the average revenue per recruitment package customer at Dice.com.
Operating income for the quarter ended March 31, 2008 grew $5.8 million
or 128% from the comparable quarter of 2007 to $10.4 million as a result of
higher revenues, greater operating leverage at eFinancialCareers and
Dice.com, and lower amortization expense of intangible assets.
Income from continuing operations for the quarter ended March 31, 2008
totaled $3.8 million including the impact of a $2.3 million non-cash,
pre-tax charge related to the determination that the Company's two interest
rate swap agreements did not initially qualify for hedge accounting. See
"Recent Developments" for additional detail. Net income for the quarter
ended March 31, 2008 totaled $4.3 million. Earnings per diluted share from
continuing operations were $0.06 for the quarter ended March 31, 2008.
Net cash provided by operating activities for the quarter was $23.6
million compared with $14.2 million in the first quarter of 2007, an
increase of 66%.
Adjusted EBITDA for the quarter ended March 31, 2008 was $16.8 million,
compared with $11.8 million for the first quarter of 2007, an increase of
43%. See "Notes Regarding the Use of Non-GAAP Financial Measures."
Operating Segment Results
For the quarter ended March, 31 2008, DCS Online revenues were $27.1
million or 68% of Dice Holdings' consolidated revenues, representing a 16%
increase over the comparable 2007 quarter. Growth was driven by a greater
number of recruitment package customers and an increase in average revenue
per recruitment package customer at Dice.com. A strong increase in revenue
at ClearanceJobs also contributed. Within the segment, Dice.com represented
a significant majority of total revenues for the period.
eFinancialCareers, which accounted for 25% of Dice Holdings'
consolidated revenues in the first quarter of 2008, consists of the
eFinancialCareers operations outside of North America. For the quarter
ended March 31, 2008, eFinancialCareers revenues grew 90% to $9.8 million
(or 77% after adding back the impact of deferred revenue written off in
connection with the October 2006 acquisition of eFinancialCareers to the
first quarter 2007 results). The growth was primarily driven by an increase
in the number of clients eFinancialCareers serves, as well as an increase
in yield per client. In addition, revenue growth was geographically
widespread with each of eFinancialCareers' regions contributing.
The other businesses operated by Dice Holdings, which include the
eFinancialCareers operations in North America, JobsintheMoney.com, and
Targeted Job Fairs, are reported in the Other category. Other revenues grew
43% to $2.7 million (or 19% after adding back the impact of deferred
revenue written off in connection with the October 2006 acquisition of
eFinancialCareers to the first quarter 2007 results).
Balance Sheet
Deferred revenue at March 31, 2008 was $52.3 million compared to $42.1
million at March 31, 2007. The 24% increase was primarily attributable to
serving a greater number of recruitment package customers at Dice together
with a higher number of those customers under annual contract than at March
31, 2007. This also represented a 13% increase from the $46.2 million
balance at December 31, 2007.
Net debt, defined as total debt less cash and cash equivalents, was
$43.9 million at March 31, 2008, consisting of total debt of $122.0 million
minus cash and cash equivalents of $78.1 million. This compares to a net
debt balance of $66.7 million at December 31, 2007, consisting of total
debt of $124.4 million minus cash and cash equivalents and marketable
securities of $57.7 million.
Recent Developments
During the first quarter, the Company determined its two interest rate
swap agreements covering $80 million notional amount of borrowings did not
initially qualify for hedge accounting based on the Company's hedging
policy and the timing of its effectiveness tests. On March 18, 2008, the
Company amended its hedging policy and performed new effectiveness tests,
which resulted in the interest rate swap agreements qualifying for hedge
accounting treatment as of that date. A one-time non-cash charge of
approximately $2.3 million was recorded reflecting the change in fair value
of the two swap agreements from inception to March 18, 2008. Subsequently,
the change in fair value was recorded to stockholders' equity.
Management Comments
Scot Melland, Chairman, President and Chief Executive Officer, stated
"Our solid financial performance continued in the first quarter, led by
eFinancialCareers which exceeded our expectations for both growth and
profitability. Despite a more difficult environment as the quarter
progressed, our combined U.S. businesses achieved 16% organic revenue
growth as customers continued to use our services to recruit hard-to-find,
highly skilled professionals." Mr. Melland continued, "It's an important
time to reach job seekers in order to build the size, quality and loyalty
of our professional communities. To that end, we will continue to invest,
pursuing long-term global growth opportunities for our company."
Mike Durney, Senior Vice President, Finance and Chief Financial
Officer, added, "Our first quarter operating results continue to be
characterized by the two fundamental elements of our business model -- high
levels of profitability and strong cash flow. Measured at the Adjusted
EBITDA level, our operating margins were over 42% for the first quarter and
we generated $23.6 million in cash flow from operations." Mr. Durney noted,
"At Dice, we were able to continue to increase the number of annual
recruitment package customers from year end. While we are impacted by the
slowdown in the U.S., the strength of our overall model allows us to
consistently reinvest in our businesses while generating significant
amounts of cash."
Business Outlook
As of April 29, 2008, the Company anticipates the following financial
performance for the quarter ending June 30, 2008 and full year 2008:
Quarter ending Fiscal Year
June 30, 2008 2008
Total Revenue $40.0 - 40.5 mm $158 - 163 mm
Estimated Contribution by Segment
DCS Online $27.1 - 27.3 mm $106 - 108 mm
eFinancialCareers $10.1 - 10.3 mm $41 - 43 mm
Other $2.8 - 2.9 mm $11 - 12 mm
Sales & Marketing expense $16.3 - 16.8 mm $60 - 62 mm
Adjusted EBITDA $16.0 - 16.5 mm $66 - 70 mm
Depreciation and amortization $5.1 - 5.2 mm $21 - 22 mm
Non-cash stock compensation expense $1.4 - 1.5 mm $5 - 6 mm
Interest expense, net $2.0 - 2.1 mm $9 - 10 mm
Other expense - $2.3 mm
Income taxes $2.8 - 3.0 mm $11 - 13 mm
Income from continuing operations $4.0 - 4.7 mm $17 - 22 mm
Adjusted EBITDA Margin 40 - 41% 42 - 43%
Fully diluted share count 65 - 66 mm 66 - 68 mm
Conference Call Information
The Company will host a conference call to discuss first quarter
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
866-825-1709 or for international callers by dialing 617-213-8060; the
participant passcode is 31403244. 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 30205766. The replay will
be available until May 6, 2008. The call will also be webcast live from the
Company's website at http://www.diceholdingsinc.com under the Investor Relations
section.
About Dice Holdings, Inc.
Dice Holdings, Inc. is a leading provider of specialized career
websites for professional communities, including technology and
engineering, capital markets and 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 17 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 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, non-cash impairment of intangible assets and
add back of deferred revenue written off ("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 charges or expenses, and to add back the deferred
revenues written off in connection with the eFinancialCareers 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, 2007, under the headings "Risk
Factors," "Forward-Looking Statements" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" all of which are
available on the Investor Relations page of our website at
http://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,
2008 2007
Revenues $39,569 $30,389
Operating expenses:
Cost of revenues 2,417 1,826
Product development 1,172 980
Sales and marketing 14,906 13,214
General and administrative 5,549 3,949
Depreciation 863 619
Amortization of intangible assets 4,242 5,228
Total operating expenses 29,149 25,816
Operating income 10,420 4,573
Interest expense (2,684) (2,347)
Interest income 482 74
Other expense (2,266) -
Income from continuing operations before
income taxes 5,952 2,300
Income tax expense (benefit) 2,186 (907)
Income from continuing operations 3,766 3,207
Discontinued operations:
Income (loss) from discontinued operations 519 (949)
Income tax benefit from discontinued operations - (5,619)
Income from discontinued operations, net of tax 519 4,670
Net income 4,285 7,877
Convertible preferred stock dividends - (107,718)
Income (loss) attributable to common stockholders $4,285 $(99,841)
Basic and diluted earnings (loss) per share:
From continuing operations $0.06 $(1,133.52)
From discontinued operations 0.01 50.65
$0.07 $(1,082.87)
Weighted average diluted shares outstanding 65,346 92
DICE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
For the three months ended
March 31,
2008 2007
Cash flows provided by operating activities:
Net income $4,285 $7,877
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 863 619
Amortization 4,242 5,228
Deferred income taxes 493 (7,386)
Gain on sale of joint venture (611) -
Amortization of deferred financing costs 208 151
Share based compensation 1,296 574
Loss on interest rate hedges 2,266 -
Changes in operating assets and liabilities:
Accounts receivable 1,040 1,072
Prepaid expenses and other assets (55) (840)
Accounts payable and accrued expenses 2,015 (1,882)
Income taxes payable 1,505 205
Deferred revenue 6,030 7,706
Other, net (6) 922
Net cash provided by operating activities 23,571 14,246
Cash flows used for investing activities:
Purchases of fixed assets (756) (631)
Maturities and sales of marketable securities 100 -
Other, net - (15)
Net cash used for investing activities (656) (646)
Cash flows used for financing activities:
Proceeds from long-term debt - 113,000
Payments on long-term debt (2,400) (11,000)
Dividends paid on convertible preferred stock - (107,718)
Dividends paid on common stock - (180)
Payments to holders of vested stock options - (4,602)
Financing costs paid - (2,239)
Payment of costs related to initial
public offering (354) -
Proceeds from stock option exercises 3 -
Net cash used for financing activities (2,751) (12,739)
Net cash used for operating activities of
discontinued operations (409) 718
Net cash used for investing activities of
discontinued operations - (6)
Net cash used for discontinued operations (409) 712
Effect of exchange rate changes 793 20
Net change in cash and cash equivalents
for the period 20,548 1,593
Cash and cash equivalents, beginning of period 57,525 5,684
Cash and cash equivalents, end of period $78,073 $7,277
DICE HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)
ASSETS March 31, December 31,
2008 2007
Current assets
Cash and cash equivalents $78,073 $57,525
Marketable securities 50 150
Accounts receivable, net of allowance for
doubtful accounts of $1,727 and $1,631 18,076 19,112
Deferred income taxes - current 11,737 13,750
Prepaid and other current assets 2,532 2,582
Current assets of discontinued operations - 195
Total current assets 110,468 93,314
Fixed assets, net 5,760 5,768
Acquired intangible assets, net 74,334 78,572
Goodwill 159,808 159,773
Deferred financing costs, net of accumulated
amortization of $1,460 and $1,252 3,333 3,541
Other assets 449 484
Non-current assets of discontinued operations - 135
Total assets $354,152 $341,587
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses $13,732 $11,971
Deferred revenue 52,269 46,230
Current portion of long-term debt 750 2,850
Income taxes payable 5,066 3,697
Current liabilities of discontinued operations - 1,404
Total current liabilities 71,817 66,152
Long-term debt 121,250 121,550
Deferred income taxes - non- current 25,043 26,256
Interest rate hedge liability 2,156 -
Other long-term liabilities 6,995 7,002
Total liabilities 227,261 220,960
Total stockholders' equity 126,891 120,627
Total liabilities and stockholders' equity $354,152 $341,587
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. Historical results for each quarter of 2006 and 2007 can be found
at our website http://www.diceholdingsinc.com under the Investor Relations
section. Supplemental schedules provided include:
Quarterly Adjusted EBITDA Reconciliation
A reconciliation of Adjusted EBITDA for the quarter ended March 31,
2007 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, 2007 and 2008 that we believe is useful to
understanding the business operations of the Company, namely, Adjusted
Revenues By Segment, which reflects historical revenues adjusted for the
addition of deferred revenue that was previously written off as part of
purchase accounting adjustments related to the eFinancialCareers
acquisition.
DICE HOLDINGS, INC.
QUARTERLY ADJUSTED EBITDA RECONCILIATIONS
(Unaudited)
(in thousands)
For the three months
ended March 31,
2008 2007
Reconciliation of Net Income to Adjusted EBITDA:
Net income $4,285 $7,877
Discontinued operations (519) (4,670)
Interest income (482) (74)
Interest expense 2,684 2,347
Income tax expense (benefit) 2,186 (907)
Depreciation 863 619
Amortization of intangible assets 4,242 5,228
Non-cash stock compensation expense 1,296 574
Other expense 2,266 -
Deferred revenue adjustment - 758
Adjusted EBITDA $16,821 $11,752
Reconciliation of Operating Cash
Flows to Adjusted EBITDA:
Net cash provided by operating activities $23,571 $14,246
Interest expense 2,684 2,347
Interest income (482) (74)
Income tax expense (benefit) 2,186 (907)
Deferred income taxes (493) 7,386
Change in accounts receivable (1,040) (1,072)
Change in deferred revenue (6,030) (7,706)
Changes in working capital (3,459) 1,596
Adjustments for discontinued operations (116) (4,822)
Deferred revenue adjustment - 758
Adjusted EBITDA $16,821 $11,752
DICE HOLDINGS, INC.
NON-GAAP RECONCILIATIONS AND QUARTERLY SUPPLEMENTAL DATA
(Unaudited)
(dollars in thousands except per customer data)
Q1 2008 Q1 2007
Reconciliation of GAAP Reported Revenue by
Segment to Adjusted Revenue by Segment
DCS Online:
Reported Actual $27,075 $23,350
DCS Online 27,075 23,350
eFinancialCareers:
Reported Actual 9,781 5,145
Deferred Revenue Adjustment (1) - 379
eFinancialCareers 9,781 5,524
Other:
Reported Actual 2,713 1,894
Deferred Revenue Adjustment (1) - 379
Other 2,713 2,273
Consolidated:
Reported Actual $39,569 $30,389
Deferred Revenue Adjustment (1) - 758
Total Adjusted Revenue $39,569 $31,147
Percentage of Adjusted Revenue by Segment
DCS Online 68.4% 75.0%
eFinancialCareers 24.7% 17.7%
Other 6.9% 7.3%
100.0% 100.0%
Sales and Marketing Expense $14,906 $13,214
Sales and Marketing Expense as a Percentage of:
Actual Revenue 37.7% 43.5%
Adjusted Revenue 37.7% 42.4%
Adjusted EBITDA $16,821 $11,752
Adjusted EBITDA Margin 42.5% 37.7%
Dice.com Recruitment Package Customers
Beginning of period 8,700 7,600
End of period 9,150 8,500
Dice.com Average Monthly Revenue per
Recruitment Package Customer (2) $859 $826
Deferred Revenue $52,269 $42,114
Segment Definitions:
DCS Online: Dice.com and ClearanceJobs.com
eFinancialCareers: eFinancialCareers worldwide, excluding North America
Other: eFinancialCareers (North America), Targeted Job Fairs,
JobsintheMoney.com
(1) Deferred revenue adjustments are related to deferred revenue written
off in application of purchase accounting. See discussion at
"Supplemental Information and Non-GAAP Reconciliations."
(2) Reflects simple average of three months in each quarterly period.
SOURCE Dice Holdings, Inc.
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Related links:
http://www.diceholdingsinc.com
CONTACT:
Jennifer Bewley, Director, Investor
Relations, Dice Holdings, Inc., +1-212-448-4181, IR@dice.com; or
Media Relations, Rich Layne, +1-646-277-1219 or Stephanie
Sampiere, +1-646-277-1222, both of ICR Inc. for Dice Holdings,
Inc.
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