- Revenues totaled $34.5 million, an increase of $15.3 million, or 79%,
including $8.1 million from the eFinancialCareers acquisition, which closed
in October 2006
- Net income totaled $1.6 million
- Earnings per diluted share were $0.03
- Cash flow from operations totaled $12.9 million
- Adjusted EBITDA totaled $14.7 million, an increase of 81% (See "Notes
Regarding the Use of Non-GAAP Financial Measures")
NEW YORK, Aug. 15 /PRNewswire-FirstCall/ -- Dice Holdings, Inc. (NYSE:
DHX), a leading provider of specialized career websites for professional
communities, today reported financial results for the second quarter ended
June 30, 2007.
Second Quarter Operating Results
Total revenues for the quarter ended June 30, 2007 increased 79% to
$34.5 million versus $19.2 million in the comparable quarter of 2006. The
increase was primarily driven by an increase in the number of recruitment
package customers and in the average revenue per recruitment package
customer at Dice.com. Also contributing to the increase were revenues from
the eFinancialCareers businesses acquired in October 2006. Pro forma total
revenues for the second quarter of 2006 would have been $24.6 million had
Dice Holdings owned eFinancialCareers during that period.
Operating income for the quarter ended June 30, 2007 increased $3.5
million to $7.5 million, or 21.7% of revenues. This compares to $4.0
million, or 20.8% of revenues for the comparable period in 2006. The
increase in operating income reflects higher revenues and greater operating
leverage at Dice.com. Net income for the current quarter was $1.6 million,
compared with $1.9 million for the second quarter of 2006. Earnings from
continuing operations per diluted share were $0.03 for the current quarter,
compared with $0.04 for the same period last year.
Net cash provided by operating activities for the second quarter ended
June 30, 2007 was $12.9 million, compared with $10.6 million for the second
quarter last year.
Adjusted EBITDA for the second quarter of 2007 was $14.7 million,
compared with $8.1 million for the second quarter of 2006. See "Notes
Regarding the Use of Non-GAAP Financial Measures."
Operating Segments
Dice Holdings, Inc. operates in two distinct business segments: DCS
Online and eFinancialCareers. The other businesses operated by Dice
Holdings, which include the eFinancialCareers operations within the United
States, JobsintheMoney.com, Targeted Job Fairs, and the Company's joint
venture in India, are reported in the Other category.
DCS Online, which accounted for 73% of Dice Holdings' consolidated
revenues in the second quarter of 2007, consists of Dice.com and
ClearanceJobs.com. For the second quarter of 2007, DCS Online revenues were
$25.2 million, a 36.3% increase over the second quarter of 2006, primarily
driven by an increase in recruitment package customers at Dice.com and an
overall increase in revenue at ClearanceJobs.com. Within the segment,
Dice.com represented a significant majority of total revenues for the
period.
eFinancialCareers, which accounted for 19% of Dice Holdings'
consolidated revenues in the second quarter of 2007, consists of the
eFinancialCareers operations outside the United States. For the second
quarter of 2007, eFinancialCareers' revenues were $6.5 million. Pro forma
revenues for the second quarter of 2006 would have been $4.0 million for
this segment had Dice Holdings owned eFinancialCareers during that period.
Other revenues, which accounted for the remainder of Dice Holdings'
consolidated revenues in the second quarter of 2007, consists of the
eFinancialCareers operations within the United States, JobsintheMoney.com,
Targeted Job Fairs, and the Company's joint venture in India. For the
second quarter of 2007, Other revenues were $2.8 million, compared with
$0.7 million for the comparable period in 2006. Pro forma revenues for the
second quarter of 2006 would have been $2.1 million for this segment had
Dice Holdings owned eFinancialCareers during that period.
Six-Month Operating Results
Total revenues for the six months ended June 30, 2007 increased 84% to
$65.0 million, compared to $35.3 million in the comparable period in 2006.
The increase was primarily driven by a greater number of recruitment
package customers served and an increase in the average revenue per
recruitment package customer at Dice.com, as well as revenues from the
addition of the eFinancialCareers businesses. Pro forma total revenues for
the six months ended June 30, 2006 would have been $45.2 million had Dice
Holdings owned eFinancialCareers during that period.
By segment, DCS Online revenues increased 43% to $48.6 million for the
six month period ended June 30, 2007, while eFinancialCareers contributed
revenues of $11.6 million. Other revenues also increased over the prior
period from $1.4 million in the first six months of 2006 to $4.8 million in
the comparable period of 2007. Pro forma revenues for the six months ended
June 30, 2006 would have been $7.3 million for the eFinancialCareers
segment and $4.0 million for the Other segment had Dice Holdings owned
eFinancialCareers during that period.
Operating income for the six months ended June 30, 2007 increased $5.6
million to $11.6 million, or 17.9% of revenues, from $6.0 million, or 17.0%
of revenues for the comparable period in the prior year. Net income for the
first six months of 2007 was $9.5 million, compared with $2.3 million for
the year ago period.
For the six month period ended June 30, 2007, net cash provided by
operating activities was $27.5 million compared with $20.2 million for the
same period last year.
Adjusted EBITDA for the six months ended June 30, 2007 was $26.1
million, compared with $14.9 million for the same period in 2006. See
"Notes Regarding the Use of Non-GAAP Financial Measures."
Balance Sheet
Dice Holdings' deferred revenue balance at June 30, 2007 was $44.0
million, representing a 67% increase from the balance of $26.4 million at
June 30, 2006. The increase was primarily attributable to having a greater
number of recruitment package customers and a higher percentage of those
customers under annual agreements than at June 30, 2006, and, to a lesser
extent, to the addition of the eFinancialCareers businesses. This also
represented a 4% increase from the $42.3 million balance at March 31, 2007.
Net debt, defined as total debt less cash and cash equivalents and
marketable securities, decreased $11.3 million to $171.4 million at June
30, 2007 (consisting of total debt of $180.0 million minus cash and cash
equivalents and marketable securities of $8.6 million), from a net debt
balance of $182.7 million at March 31, 2007 (consisting of total debt of
$191.0 million minus cash and cash equivalents and marketable securities of
$8.3 million).
Management Comments
Scot Melland, Chairman, President and Chief Executive Officer, stated
"We are pleased with our second quarter results, which were characterized
by strong organic growth in our key business segments. Dice.com was the
primary contributor, although eFinancialCareers, which we acquired in
October 2006, continued to exceed our expectations in terms of growth and
profitability." Melland continued, "As we enter the second half of the
year, we continue to focus on execution of our operating plan and building
our professional communities, where employers and recruiters can access
hard-to-find, experienced talent. Ultimately, as we invest against this
global opportunity, we are confident in our ability to create value for
shareholders. "
Mike Durney, Senior Vice President, Finance and Chief Financial
Officer, added "Our performance in the second quarter was characterized by
continued growth in recruitment package customers and higher average
revenue per customer at Dice.com, as well as the addition of
eFinancialCareers, which continues to demonstrate terrific momentum.
Operating margins for the period remained strong, exceeding 40% at the
adjusted EBITDA level and 21% at the operating income level, and we were
pleased with these results which highlight the leverage in our business
model, particularly during a period of significant investments in sales and
marketing. To that point, the overall efficiency of our operating structure
continues to support our ability to generate strong levels of free cash
flow while reinvesting in our customers and professional communities."
Recent Developments
Dice Holdings Completes Initial Public Offering
On July 23, 2007, the Company successfully completed its initial public
offering of 16,700,000 shares of its common stock at a price of $13 per
share. Of the shares offered, 6,700,000 were offered by the Company and
10,000,000 were offered by selling stockholders. The proceeds to the
Company were approximately $81.0 million, net of underwriting commissions
and discounts, but before expenses of the offering. The Company's common
stock is listed on the New York Stock Exchange under the symbol "DHX".
As a result of the initial public offering, the Company has reduced
borrowings outstanding. Net debt as of July 31, 2007 was $87.1 million
(consisting of total debt of $129.0 million minus cash and cash equivalents
and marketable securities of $41.9 million), compared with a net debt
balance of $171.4 million at June 30, 2007. Accordingly, the Company
expects to incur lower interest expense in future periods than it did in
the second quarter.
Business Outlook
As of August 15, 2007, the Company anticipates the following financial
performance for the remainder of 2007:
Quarter Quarter
Ended Ended
September 30, December 31,
2007 2007
Total Revenue $36 - $37mm $37 - $38mm
Estimated Contribution % By Segment
DCS Online 71% 70%
eFinancialCareers 21% 22%
Other 8% 8%
% of Revenue:
Sales & Marketing expense 38 - 40% 37 - 39%
Net Income Margin 8 - 9% 11 - 12%
Adjusted EBITDA Margin 40-41% 42-43%
Other Items:
Non-cash stock based compensation expense $1.25mm $1.25mm
Depreciation and Amortization $5.3mm $5.4mm
Interest rate on indebtedness 8.8% 8.8%
Effective income tax rate 40% 40%
New York Stock Exchange Listing Application
The Company also notes that the listing requirements of the New York
Stock Exchange require that Dice Holdings disclose that additional
information is available upon which the New York Stock Exchange relied to
list the Company, and is included in the Company's listing application.
Such information is available to the public upon request.
Conference Call Information
The Company will host a conference call to discuss second quarter 2007
financial results today at 8:30 AM 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 800-
706-7749 or for international callers by dialing 617-614-3474; the
participant passcode is 32623938. 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 44529063. The replay will
be available until August 22, 2007. The call will also be webcast live from
the Company's website at http://www.diceholdingsinc.com under the investor
relations section (http://www.investor.diceholdingsinc.com).
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. Over
more than 16 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 share
based compensation expense 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 Dice Inc. acquisition and the
eFinancialGroup 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.
Pro Forma Adjusted EBITDA
Pro Forma Adjusted EBITDA is defined as Adjusted EBITDA (as defined
above) with an addition for the Adjusted EBITDA of eFinancialCareers, as
though we owned the business for all periods presented. We believe Pro
Forma Adjusted EBITDA is an important non-GAAP measure as it provides a
basis for comparing the current period performance against prior periods.
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 Registration Statement on
Form S-1, as amended, under the headings "Risk Factors," "Forward-Looking
Statements" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations."
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 For the six months
ended ended
June 30, June 30,
2007 2006 2007 2006
Revenues $34,500 $19,239 $65,040 $35,316
Operating expenses:
Cost of revenues 2,018 1,049 3,915 2,159
Product development 981 591 1,961 1,025
Sales and marketing 14,045 8,130 27,646 15,258
General and administrative 4,472 2,255 8,496 4,313
Depreciation 723 385 1,374 720
Amortization of intangible
assets 4,774 2,826 10,002 5,852
Total operating expenses 27,013 15,236 53,394 29,327
Operating income 7,487 4,003 11,646 5,989
Interest expense (4,293) (931) (6,640) (2,262)
Interest income 81 29 158 56
Income from continuing
operations before income taxes
and minority interest 3,275 3,101 5,164 3,783
Income tax expense 1,509 1,215 439 1,477
Minority interest in net loss of
subsidiary 121 77 121 130
Income from continuing
operations 1,887 1,963 4,846 2,436
Discontinued operations:
Income (loss) from
discontinued operations 294 (46) (243) (278)
Income tax expense (benefit)
from discontinued operations 568 (17) (4,887) (105)
Income (loss) from discontinued
operations, net of tax (274) (29) 4,644 (173)
Net income 1,613 1,934 9,490 2,263
Convertible preferred stock
dividends - - (107,718) -
Income (loss) attributable to
common stockholders $1,613 $1,934 $(98,228) $2,263
Basic earnings (loss) per share:
From continuing operations $0.03 $0.04 $(1,115.75) $0.05
From discontinued operations - - 50.37 -
$0.03 $0.04 $(1,065.38) $0.05
Diluted earnings (loss) per
share:
From continuing operations $0.03 $0.04 $(1,115.75) $0.05
From discontinued operations - - 50.37 -
$0.03 $0.04 $(1,065.38) $0.05
DICE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
For the three For the six
months ended months ended
June 30, June 30,
2007 2006 2007 2006
Cash flows provided by operating
activities:
Net income $1,613 $1,934 $9,490 $2,263
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation 723 385 1,374 720
Amortization 4,774 2,826 10,002 5,852
Deferred income taxes 4,169 1,037 (3,217) 1,111
Amortization of deferred financing
costs 185 80 336 158
Share based compensation 1,208 242 1,782 479
Changes in operating assets and
liabilities:
Accounts receivable 229 (19) 1,291 (70)
Prepaid expenses and other assets (673) 315 (1,397) 222
Accounts payable and accrued
expenses (160) 1,829 (1,892) 952
Deferred revenue 1,583 2,288 9,335 8,953
Other, net (717) (303) 424 (455)
Net cash provided by operating
activities 12,934 10,614 27,528 20,185
Cash flows used for investing
activities:
Purchases of fixed assets (919) (705) (1,550) (1,498)
Purchases of marketable securities (200) - (200) (100)
Maturities and sales of marketable
securities 200 98 200 197
Amounts paid under Targeted Job
Fairs acquisition agreement - (832) - (965)
Other, net (17) - (32) -
Net cash used for investing
activities (936) (1,439) (1,582) (2,366)
Cash flows provided by (used for)
financing activities:
Proceeds from long-term debt - - 113,000 -
Payments on long-term debt (11,000) (9,000) (22,000) (18,000)
Dividends paid on convertible
preferred stock - - (107,718) -
Dividends paid on common stock - - (180) -
Payments to holders of vested
stock options in lieu of
dividends - - (4,602) -
Financing costs paid - - (2,239) -
Payments of costs related to
initial public offering (456) - (456) -
Other (175) - (175) -
Net cash provided by (used for)
financing activities (11,631) (9,000) (24,370) (18,000)
Net cash provided by (used for)
operating activities of discontinued
operations (162) 477 190 650
Net cash used in investing activities
of discontinued operations - (76) (6) (82)
Net cash provided by (used for)
discontinued operations (162) 401 184 568
Effect of exchange rate changes 105 - 125 -
Net change in cash and cash
equivalents for the period 310 576 1,885 387
Cash and cash equivalents, beginning
of period 7,370 3,174 5,795 3,363
Cash and cash equivalents, end of
period $7,680 $3,750 $7,680 $3,750
DICE HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)
ASSETS June 30, 2007 December 31, 2006
Current assets
Cash and cash equivalents $7,680 $5,795
Marketable securities 947 944
Accounts receivable, net of
allowance for doubtful
accounts of $911 and $795 14,071 15,014
Deferred income taxes - current 13,387 14,000
Prepaid and other current assets 2,340 1,289
Current assets of discontinued
operations 105 809
Total current assets 38,530 37,851
Fixed assets, net 5,587 5,356
Acquired intangible assets, net 90,625 100,186
Goodwill 161,398 156,440
Deferred financing costs, net of
accumulated amortization
of $792 and $457 4,005 1,972
Other assets 1,320 251
Non-current assets of
discontinued operations - 271
Total assets $301,465 $302,327
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses $11,445 $12,113
Deferred revenue 43,972 34,520
Current portion of long-term debt 750 -
Other current liabilities - 492
Current liabilities of
discontinued operations 207 990
Total current liabilities 56,374 48,115
Long-term debt 179,250 89,000
Deferred income taxes - non-current 25,031 29,582
Other long-term liabilities 6,733 1,295
Total liabilities 267,388 167,992
Total stockholders' equity 34,077 134,335
Total liabilities and
stockholders' equity $301,465 $302,327
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. The supplemental schedules provided include:
Historical Quarterly Statement of Operations and Adjusted EBITDA
Reconciliation
A quarterly statement of operations reflecting the results of each
quarterly period for calendar year 2006 and the first two quarters of
calendar year 2007 are provided. This information provides the reader with
the information necessary to analyze Dice Holdings, Inc. over the recent
past, as such information is unavailable since we were not a public
company.
Historical Quarterly Statement of Cash Flows and Free Cash Flow
Reconciliation
A quarterly statement of cash flows reflecting the results of each
quarterly period for calendar year 2006 and the first two quarters of
calendar year 2007 are provided. This information provides the reader with
the information necessary to analyze Dice Holdings, Inc. over the recent
past, as such information is unavailable since we were not a public
company.
Quarterly Supplemental Data and Certain Non-GAAP Reconciliations
On this schedule, the Company provides certain non-GAAP information of
each quarterly period for calendar year 2006 and the first two quarters of
calendar year 2007 that we believe is useful to understanding the business
operations of the Company. A discussion of the significant sections is
below:
Adjusted Pro Forma Revenues By Segment
Adjusted pro forma revenues by segment reflects historical revenues
adjusted for the addition of deferred revenue that was previously written
off as part of purchase accounting adjustments related to the Dice Inc. and
eFinancialCareers acquisitions. In addition, the Company has made an
addition for revenues of eFinancialCareers, as though we owned the business
for all periods presented, in order to provide a comparable revenue basis.
Add back of Deferred Revenue Written off in Acquisitions
Deferred revenue is a key metric of the Company's business as it
indicates a level of sales already made that will be recognized as revenue
in the future. Dice Inc. had recorded deferred revenue of $16.1 million on
its consolidated balance sheet, as of August 31, 2005, prior to purchase
accounting adjustments related to its acquisition by Dice Holdings, Inc. As
required by GAAP, in determining the fair value of the liabilities assumed
under purchase accounting, the acquired deferred revenue is to be recorded
at fair value to the extent it represents an assumed legal obligation. The
Company estimated its obligation related to deferred revenue as a result of
the Dice Inc. acquisition using the cost build-up approach, which
determines fair value by estimating the costs related to fulfilling the
obligation plus a normal profit margin. The estimated costs to fulfill the
Company's deferred revenue obligation in connection with the Dice Inc.
acquisition were based on the Company's expected future costs to fulfill
its obligation to its customers. As a result, the Company recorded an
adjustment to reduce the carrying value of deferred revenue by $6.0
million, to $10.1 million.
Similarly, the Company recorded deferred revenue for eFinancialGroup at
the date of the acquisition of $3.6 million, prior to purchase accounting
adjustments. The Company estimated its obligation related to deferred
revenue based on future costs to fulfill its obligation to its customers.
As a result, an adjustment was recorded to reduce the carrying value of
deferred revenue for eFinancialGroup by $2.4 million, to $1.2 million.
Pro Forma Sales and Marketing Expense
Pro forma sales and marketing expense reflects historical sales and
marketing expense adjusted for the addition of sales and marketing expenses
for eFinancialCareers, as though we owned the business for all periods
presented, in order to provide expense analysis comparable to our business
operations today.
DICE HOLDINGS, INC.
HISTORICAL QUARTERLY STATEMENTS OF OPERATIONS AND ADJUSTED EBITDA
RECONCILIATIONS
(Unaudited)
(in thousands)
Quarterly Data
Q1 2006 Q2 2006 Q3 2006 Q4 2006
Revenues $16,077 $19,239 $21,668 $26,674
Operating expenses:
Cost of revenues 1,110 1,049 1,162 1,503
Product development 434 591 511 822
Sales and marketing 7,128 8,130 8,510 10,720
General and administrative 2,058 2,255 2,399 3,755
Depreciation 335 385 454 656
Amortization of intangible
assets 3,026 2,826 2,825 4,415
Total operating expenses 14,091 15,236 15,861 21,871
Operating income 1,986 4,003 5,807 4,803
Interest expense (1,331) (931) (751) (1,775)
Interest income 27 29 25 153
Income from continuing operations
before income taxes and minority
interest 682 3,101 5,081 3,181
Income tax expense (benefit) 262 1,215 1,975 1,190
Minority interest in net loss of
subsidiary 53 77 68 98
Income from continuing operations 473 1,963 3,174 2,089
Discontinued operations:
Income (loss) from discontinued
operations (232) (46) (34) (1,150)
Income tax expense (benefit)
from discontinued operations (88) (17) (12) (424)
Income (loss) from discontinued
operations, net of tax (144) (29) (22) (726)
Net income $329 $1,934 $3,152 $1,363
Reconciliation of Net Income to
Adjusted EBITDA:
Net income $329 $1,934 $3,152 $1,363
Discontinued operations 144 29 22 726
Minority interest in net loss of
subsidiary (53) (77) (68) (98)
Interest income (27) (29) (25) (153)
Interest expense 1,331 931 751 1,775
Income tax expense (benefit) 262 1,215 1,975 1,190
Depreciation 335 385 454 656
Amortization of intangible
assets 3,026 2,826 2,825 4,415
Non-cash stock compensation
expense 237 242 245 743
Deferred revenue adjustment 1,202 650 189 926
Adjusted EBITDA $6,786 $8,106 $9,520 $11,543
Reconciliation of Operating Cash
Flows to Adjusted EBITDA:
Net cash provided by operating
activities $9,571 $10,614 $8,767 $10,232
Interest expense 1,331 931 751 1,775
Interest income (27) (29) (25) (153)
Income tax expense (benefit) 262 1,215 1,975 1,190
Deferred income taxes (74) (1,037) (1,675) (341)
Change in accounts receivable 51 19 1,321 3,357
Change in deferred revenue (6,665) (2,288) (1,623) (5,693)
Changes in working capital 1,122 (1,841) (36) (262)
Adjustments for discontinued
operations 13 (128) (124) 512
Deferred revenue adjustment 1,202 650 189 926
Adjusted EBITDA $6,786 $8,106 $9,520 $11,543
Quarterly Data Year to Date Data
Q1 2007 Q2 2007 6M 2006 6M 2007
Revenues $30,540 $34,500 $35,316 $65,040
Operating expenses:
Cost of revenues 1,897 2,018 2,159 3,915
Product development 980 981 1,025 1,961
Sales and marketing 13,601 14,045 15,258 27,646
General and administrative 4,024 4,472 4,313 8,496
Depreciation 651 723 720 1,374
Amortization of intangible
assets 5,228 4,774 5,852 10,002
Total operating
expenses 26,381 27,013 29,327 53,394
Operating income 4,159 7,487 5,989 11,646
Interest expense (2,347) (4,293) (2,262) (6,640)
Interest income 77 81 56 158
Income from continuing
operations before income
taxes and minority interest 1,889 3,275 3,783 5,164
Income tax expense (benefit) (1,070) 1,509 1,477 439
Minority interest in net loss
of subsidiary - 121 130 121
Income from continuing
operations 2,959 1,887 2,436 4,846
Discontinued operations:
Income (loss) from
discontinued operations (537) 294 (278) (243)
Income tax expense
(benefit) from
discontinued operations (5,455) 568 (105) (4,887)
Income (loss) from
discontinued operations, net
of tax 4,918 (274) (173) 4,644
Net income $7,877 $1,613 $2,263 $9,490
Reconciliation of Net Income
to Adjusted EBITDA:
Net income $7,877 $1,613 $2,263 $9,490
Discontinued operations (4,918) 274 173 (4,644)
Minority interest in net
loss of subsidiary - (121) (130) (121)
Interest income (77) (81) (56) (158)
Interest expense 2,347 4,293 2,262 6,640
Income tax expense
(benefit) (1,070) 1,509 1,477 439
Depreciation 651 723 720 1,374
Amortization of intangible
assets 5,228 4,774 5,852 10,002
Non-cash stock compensation
expense 574 1,208 479 1,782
Deferred revenue adjustment 758 518 1,852 1,276
Adjusted EBITDA $11,370 $14,710 $14,892 $26,080
Reconciliation of Operating
Cash Flows to Adjusted
EBITDA:
Net cash provided by operating
activities $14,594 $12,934 $20,185 $27,528
Interest expense 2,347 4,293 2,262 6,640
Interest income (77) (81) (56) (158)
Income tax expense
(benefit) (1,070) 1,509 1,477 439
Deferred income taxes 7,386 (4,169) (1,111) 3,217
Change in accounts
receivable (1,062) (229) 70 (1,291)
Change in deferred revenue (7,752) (1,583) (8,953) (9,335)
Changes in working capital 1,315 1,550 (719) 2,865
Adjustments for
discontinued operations (5,069) (32) (115) (5,101)
Deferred revenue adjustment 758 518 1,852 1,276
Adjusted EBITDA $11,370 $14,710 $14,892 $26,080
DICE HOLDINGS, INC.
HISTORICAL QUARTERLY STATEMENTS OF CASH FLOWS AND FREE CASH FLOWS
(Unaudited)
(in thousands)
Quarterly Data
Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007
Cash flows provided
by operating
activities:
Net income $329 $1,934 $3,152 $1,363 $7,877 $1,613
Adjustments to
reconcile net
income to net cash
provided by
operating
activities:
Depreciation 335 385 454 656 651 723
Amortization 3,026 2,826 2,825 4,415 5,228 4,774
Deferred income
taxes 74 1,037 1,675 341 (7,386) 4,169
Amortization of
deferred
financing costs 78 80 78 116 151 185
Share based
compensation 237 242 245 743 574 1,208
Changes in operating
assets and
liabilities:
Accounts
receivable (51) (19) (1,321) (3,357) 1,062 229
Prepaid expenses
and other assets (93) 315 (185) (257) (724) (673)
Accounts payable
and accrued
expenses (877) 1,829 48 (483) (1,732) (160)
Deferred revenue 6,665 2,288 1,623 5,693 7,752 1,583
Other, net (152) (303) 173 1,002 1,141 (717)
Net cash provided by
operating
activities 9,571 10,614 8,767 10,232 14,594 12,934
Cash flows used for
investing
activities:
Purchases of fixed
assets (793) (705) (583) (613) (631) (919)
Purchases of
marketable
securities (100) - - (100) - (200)
Maturities and
sales of
marketable
securities 99 98 - 399 - 200
Acquisition of
eFinancial Group
Limited - - - (104,738) - -
Proceeds from the
sale of
eFinancialNews
Limited - - - 41,560 - -
Amounts paid under
Targeted Job
Fairs acquisition
agreement (133) (832) - - - -
Other, net - - - - (15) (17)
Net cash used for
investing
activities (927) (1,439) (583) (63,492) (646) (936)
Cash flows provided
by (used for)
financing
activities:
Proceeds from
long-term debt - - - 77,000 113,000 -
Payments on long-
term debt (9,000) (9,000) (9,000) (10,000) (11,000) (11,000)
Dividends paid on
convertible
preferred stock - - - (11,180) (107,718) -
Dividends paid on
common stock - - - - (180) -
Payments to
holders of vested
stock options in
lieu of dividends - - - - (4,602) -
Financing costs
paid - - - (856) (2,239) -
Payment of costs
related to
initial public
offering - - - - - (456)
Other - - - - - (175)
Net cash provided by
(used for)
financing
activities (9,000) (9,000) (9,000) 54,964 (12,739) (11,631)
Net cash provided by
(used for)
operating
activities of
discontinued
operations 173 477 12 1,127 352 (162)
Net cash used in
investing
activities of
discontinued
operations (6) (76) (4) (69) (6) -
Net cash provided by
(used for)
discontinued
operations 167 401 8 1,058 346 (162)
Effect of exchange
rate changes - - - 91 20 105
Net change in cash
and cash
equivalents for the
period (189) 576 (808) 2,853 1,575 310
Cash and cash
equivalents,
beginning of period 3,363 3,174 3,750 2,942 5,795 7,370
Cash and cash
equivalents, end of
period $3,174 $3,750 $2,942 $5,795 $7,370 $7,680
Free cash flow:
Net cash provided by
operating
activities $9,571 $10,614 $8,767 $10,232 $14,594 $12,934
Less: Capital
expenditures (793) (705) (583) (613) (631) (919)
Free cash flow $8,778 $9,909 $8,184 $9,619 $13,963 $12,015
Year to Date Data
6M 2006 6M 2007
Cash flows provided by operating activities:
Net income $2,263 $9,490
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 720 1,374
Amortization 5,852 10,002
Deferred income taxes 1,111 (3,217)
Amortization of deferred financing costs 158 336
Share based compensation 479 1,782
Changes in operating assets and liabilities:
Accounts receivable (70) 1,291
Prepaid expenses and other assets 222 (1,397)
Accounts payable and accrued expenses 952 (1,892)
Deferred revenue 8,953 9,335
Other, net (455) 424
Net cash provided by operating activities 20,185 27,528
Cash flows used for investing activities:
Purchases of fixed assets (1,498) (1,550)
Purchases of marketable securities (100) (200)
Maturities and sales of marketable
securities 197 200
Acquisition of eFinancial Group Limited - -
Proceeds from the sale of
eFinancialNews Limited - -
Amounts paid under Targeted Job
Fairs acquisition agreement (965) -
Other, net - (32)
Net cash used for investing activities (2,366) (1,582)
Cash flows provided by (used for)
financing activities:
Proceeds from long-term debt - 113,000
Payments on long-term debt (18,000) (22,000)
Dividends paid on convertible
preferred stock - (107,718)
Dividends paid on common stock - (180)
Payments to holders of vested
stock options in lieu of dividends - (4,602)
Financing costs paid - (2,239)
Payment of costs related to
initial public offering - (456)
Other - (175)
Net cash provided by (used for)
financing activities (18,000) (24,370)
Net cash provided by (used for) operating
activities of discontinued operations 650 190
Net cash used in investing activities
of discontinued operations (82) (6)
Net cash provided by (used for)
discontinued operations 568 184
Effect of exchange rate changes - 125
Net change in cash and cash
equivalents for the period 387 1,885
Cash and cash equivalents, beginning
of period 3,363 5,795
Cash and cash equivalents, end of period $3,750 $7,680
Free cash flow:
Net cash provided by operating activities $20,185 $27,528
Less: Capital expenditures (1,498) (1,550)
Free cash flow $18,687 $25,978
DICE HOLDINGS, INC.
NON-GAAP RECONCILIATIONS AND QUARTERLY SUPPLEMENTAL DATA
(Unaudited)
(dollars in thousands except per customer data)
Quarterly Data
Q1 2006 Q2 2006 Q3 2006 Q4 2006
Reconciliation of GAAP Reported
Revenue by Segment to Adjusted Pro
Forma Revenue by Segment
DCS Online:
Reported Actual $15,441 $18,513 $20,818 $22,513
Deferred Revenue Adjustment (1) 1,202 650 189 8
Dice Online 16,643 19,163 21,007 22,521
eFinancialCareers:
Reported Actual - - - 2,924
Deferred Revenue Adjustment (1) - - - 412
eFinancialCareers Pro Forma
Adjustment 3,307 4,008 4,687 1,583
eFinancialCareers 3,307 4,008 4,687 4,919
Other:
Reported Actual 636 726 850 1,237
Deferred Revenue Adjustment (1) - - - 506
eFinancialCareers Pro Forma
Adjustment 1,234 1,358 1,347 492
Other 1,870 2,084 2,197 2,235
Total Pro Forma Adjusted Revenue $21,820 $25,255 $27,891 $29,675
Consolidated:
Reported Actual $16,077 $19,239 $21,668 $26,674
Deferred Revenue Adjustment (1) 1,202 650 189 926
eFinancialCareers Pro Forma
Adjustment 4,541 5,366 6,034 2,075
Total Pro Forma Adjusted Revenue $21,820 $25,255 $27,891 $29,675
Percentage of Pro Forma Adjusted
Revenue by Segment
DCS Online 76.3% 75.9% 75.3% 75.9%
eFinancialCareers 15.2% 15.9% 16.8% 16.6%
Other 8.6% 8.3% 7.9% 7.5%
100.0% 100.0% 100.0% 100.0%
Sales and Marketing Expense
Reported Actual $7,128 $8,130 $8,510 $10,720
eFinancialCareers Pro Forma
Adjustment 1,933 2,352 2,885 949
Total Pro Forma Sales and Marketing
Expense $9,061 $10,482 $11,395 $11,669
Actual Sales and Marketing Expense as
a Percentage of Actual Revenue 44.3% 42.3% 39.3% 40.2%
Pro Forma Sales and Marketing Expense
as a Percentage of Pro Forma
Adjusted Revenue 41.5% 41.5% 40.9% 39.3%
Reconciliation of Adjusted EBITDA
to Pro Forma Adjusted EBITDA
Adjusted EBITDA $6,786 $8,106 $9,520 $11,543
eFinancialCareers Pro Forma
Adjustment 844 401 584 (1,210)
Pro Forma Adjusted EBITDA $7,630 $8,507 $10,104 $10,333
Pro Forma Adjusted EBITDA Margin 35.0% 33.7% 36.2% 34.8%
Dice.com Recruitment Package Customers
(end of period) 6,800 7,300 7,600 7,600
Dice.com Average Monthly Revenue per
Recruitment Package Customer (2) $753 $772 $795 $813
Summary of Deferred Revenue Written
Off by Segment by Period of Impact (3)
DCS Online $1,202 $650 $189 $8
eFinancialCareers - - - 412
Other - - - 506
Total Deferred Revenue Written Off by
Period of Impact $1,202 $650 $189 $926
Quarterly Data Year to Date Data
Q1 2007 Q2 2007 6M 2006 6M 2007
Reconciliation of GAAP Reported
Revenue by Segment to Adjusted Pro
Forma Revenue by Segment
DCS Online:
Reported Actual $23,351 $25,233 $33,954 $48,584
Deferred Revenue Adjustment (1) - - 1,852 -
Dice Online 23,351 25,233 35,806 48,584
eFinancialCareers:
Reported Actual 5,145 6,497 - 11,642
Deferred Revenue Adjustment (1) 379 301 - 680
eFinancialCareers Pro Forma
Adjustment - - 7,315 -
eFinancialCareers 5,524 6,798 7,315 12,322
Other:
Reported Actual 2,044 2,770 1,362 4,814
Deferred Revenue Adjustment (1) 379 217 - 596
eFinancialCareers Pro Forma
Adjustment - - 2,592 -
Other 2,423 2,987 3,954 5,410
Total Pro Forma Adjusted Revenue $31,298 $35,018 $47,075 $66,316
Consolidated:
Reported Actual $30,540 $34,500 $35,316 $65,040
Deferred Revenue Adjustment (1) 758 518 1,852 1,276
eFinancialCareers Pro Forma
Adjustment - - 9,907 -
Total Pro Forma Adjusted Revenue $31,298 $35,018 $47,075 $66,316
Percentage of Pro Forma Adjusted
Revenue by Segment
DCS Online 74.6% 72.1% 76.1% 73.3%
eFinancialCareers 17.6% 19.4% 15.5% 18.6%
Other 7.7% 8.5% 8.4% 8.2%
100.0% 100.0% 100.0% 100.0%
Sales and Marketing Expense
Reported Actual $13,601 $14,045 $15,258 $27,646
eFinancialCareers Pro Forma
Adjustment - - 4,285 -
Total Pro Forma Sales and Marketing
Expense $13,601 $14,045 $19,543 $27,646
Actual Sales and Marketing Expense as
a Percentage of Actual Revenue 44.5% 40.7% 43.2% 42.5%
Pro Forma Sales and Marketing Expense
as a Percentage of Pro Forma
Adjusted Revenue 43.5% 40.1% 41.5% 41.7%
Reconciliation of Adjusted EBITDA
to Pro Forma Adjusted EBITDA
Adjusted EBITDA $11,370 $14,710 $14,892 $26,080
eFinancialCareers Pro Forma
Adjustment - - 1,245 -
Pro Forma Adjusted EBITDA $11,370 $14,710 $16,137 $26,080
Pro Forma Adjusted EBITDA Margin 36.3% 42.0% 34.3% 39.3%
Dice.com Recruitment Package Customers
(end of period) 8,500 8,800 n.a. n.a.
Dice.com Average Monthly Revenue per
Recruitment Package Customer (2) $826 $830 n.a. n.a.
Summary of Deferred Revenue Written
Off by Segment by Period of Impact (3)
DCS Online $- $- $1,852 $-
eFinancialCareers 379 301 - 680
Other 379 217 - 596
Total Deferred Revenue Written Off by
Period of Impact $758 $518 $1,852 $1,276
Segment Definitions:
DCS Online: Dice.com and ClearanceJobs.com
eFinancialCareers: eFinancialCareers worldwide, excluding the US
Other: Targeted Job Fairs, eFinancialCareers (US), JobsintheMoney.com,
Dice India
(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.
(3) The Q3 2007 impact of deferred revenue written off will be $147 for
eFinancialCareers and $101 for Other.
See below for reconciliation of most comparable GAAP measurement to
Adjusted EBITDA:
Guidance - Reconcilation of Net Income to Adjusted EBITDA
Quarter Ended Quarter Ended
September 30, December 31,
2007 2007
(in millions)
Net income $2.8 - $3.5 $3.9 - $4.7
Depreciation & amortization 5.2 - 5.3 5.3 - 5.4
Non-cash stock compensation 1.2 1.2
Interest expense, net 2.7 - 3.0 2.2 - 2.5
Income taxes 1.8 - 2.2 2.5 - 3.0
Deferred revenue purchase accounting
adjustments 0.2 -
Adjusted EBITDA $14.3 - $15.0 $15.5 - $16.4
Net Income Margin 8-9% 11-12%
Adjusted EBITDA Margin 40-41% 42-43%
SOURCE Dice Holdings, Inc.
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Related links:
http://www.diceholdingsinc.com
http://www.investor.diceholdingsinc.com
CONTACT:
Investor Relations, Don Tomoff or Tom Ryan,
+1-212-448-4181, IR@dice.com; or Media Relations, Rich Layne,
+1-203-682-8224, or Stephanie Sampiere, +1-203-682-8277, all of
ICR Inc.
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