Dice Holdings, Inc. (DHX)
Q3 2008 Earnings Call
October 23, 2008 8:30 am
Jennifer Bewley - IR
Michael P. Durney - CFO and SVP Finance, Treasurer
Scott W. Melland - Chairman, President and CEO
John Janedis - Wachovia Securities
Douglas Anmuth - Barclays Capital
Timothy McHugh - William Blair and Company
Imran Khan - JP Morgan Chase & Co.
Collis Boyce - Morgan Stanley
Youssef Squali - Jefferies & Company
Mark May - Needham & Company
Previous Statements by DHX
» Dice Holdings, Inc. Q4 2008 Earnings Call Transcript
» Dice Holdings, Inc. Q2 2008 Earnings Call Transcript
» Dice Holdings, Inc Q1 2008 Earnings Call Transcript
I would now like to turn the presentation over to your host for today's call, Miss Jennifer Bewley, Director of Investor Relations. Please proceed.
Thanks Lacey and good morning everyone. With me on the call today is Scott Melland, Chairman, President, and Chief Executive Officer of Dice Holdings, along with Michael Durney, Senior Vice President of Finance and Chief Financial Officer.
Please note, this morning we issued a press release describing the company's results for the third quarter of 2008. A copy of that release can be viewed on the company's website at diceholdingsinc.com. In fact, we routinely post all material information to our website and would encourage all investor's to visit the site for more information on the company.
Before we begin, I'd like to note that today's call includes certain forward-looking statements, particularly statements regarding future financial and operating results of the company and its businesses.
These statements are based on management's current expectations or beliefs and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the statements herein due to changes in economics, business, competitive, technological and/or regulatory factors.
The principle risks that could cause our business to differ materially from our current expectations are detailed in the company's SEC filings, including our annual report on Form 10K in the sections entitled 'Risk Factors', 'Forward-Looking Statements', and 'Management's Discussion and Analysis of Financial Condition and Results of Operations'.
The company is under no obligation to update any forward-looking statements except as required by federal securities law.
Today's call also includes certain non-GAAP financial measures, including adjusted EBITDA, adjusted EBITDA margin, and free cash flow. For details on these measures including why we use them and reconciliations to the most comparable GAAP measures, please refer to our earning's release and our Form 8-K which has been furnished to the SEC, both of which are available on our website.
Now I'll turn the call over to Scott.
Scott W. Melland
Thank you, Jennifer. First let me welcome all of you to the Dice Holdings third quarter 2008 conference call. I'll start today by briefly discussing our third quarter performance, including our perspective on current conditions here in the U.S. and elsewhere and how they are impacting our business.
Then I'll hand it over to Mike Durney, our CFO, to take you through our financial performance in greater detail and our guidance. After Mike, I'll make a few closing remarks and then we'll open up the call for questions.
Now let's briefly discuss the third quarter. Overall we turned in good financial performance, despite market conditions that softened considerably during the quarter. Worldwide revenues increased 3% year-over-year, driven mainly by eFinancialCareers international business, including robust growth in our newer markets, the Asia Pacific region and the Middle East. Profitability remains strong with adjusted EBITDA margins greater than 44%, and we generated more than $13 million in free cash flow for the quarter.
In the U.S., DCS Online, which is our largest biggest segment comprised of Dice.com and ClearanceJobs, grew 2% year-over-year. In the Dice business we continue to see solid demand from the larger staffing, recruiting, and consulting companies; however, the recruitment package customer account declined as we lost some small recruiters and direct hiring companies.
We continue to see little urgency from customers to sign new agreements, with some customers willing to delay purchase decisions until they have greater clarity in their own businesses, and some having literally no need for the service.
Outside the U.S., eFinancialCareers had another solid quarter with revenues up 16% year-over-year. Despite the strong year-over-year performance, customer acquisition and renewals in the U.K. continue to weaken and we now see signs of weakness in continental Europe. The rapidly shifting financial landscape is causing customers to pause to digest what has happened and has prompted some customers to reassess their spending levels.
During the quarter, billings in the eFC U.S. declined significantly. While the U.S. is not a larger part of our eFC business overall, the U.S. market which was impacted first by the credit crisis is likely to be an indicator of what we will see in the U.K. and continental Europe going forward.
Our newer regions, Asia Pacific and the Middle East, are slowing from their robust growth rates of earlier this year, but we still expect these markets to offset some of the negative impacts from other regions of the world, in fact, these other regions where we are relatively under-penetrated and will continue to focus on expansion.
During the quarter, job seeker activity increased significantly for both Dice.com and eFinancialCareers. At Dice we served roughly 1.8 to 2 million unique visitors during the quarter. New resumes posted grew 40% year-over-year and applications were up mid-teens year-over-year.