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Dice Holdings, Inc. (DHX)

Q4 2008 Earnings Call

February 4, 2009 8:30 am ET


Jennifer Bewley – Director, Investor Relations

Scot Melland – Chairman, President, CEO

Michael Durney – Senior V.P. Finance, CFO


Imran Khan – J.P. Morgan

John Janedis – Wachovia

Timothy McHugh – William Blair & Co.

James Janesky – Stifel Nicolaus

Collis Boyce – Morgan Stanley

Craig Huber – Barclays Capital

Youssef Squali – Jefferies & Co.

John Blackbridge – Credit Suisse

[Douglas Campbell – Spare Capital]



Welcome to the fourth quarter 2008 Dice Holdings, Inc. earnings conference call. (Operator Instructions) I will now turn the presentation over to your host for today's conference, Miss Jennifer Bewley, Director of Investor Relations.

Jennifer Bewley

Good morning everyone. With me on the call today is Scot 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 fourth quarter of 2008. A copy of that release can be viewed on the company's web site at Diceholdingsinc.com. We routinely post all material information to our web site and encourage all investors 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 belief 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 economic, business, competitive, technological and/or regulatory factors. The principal risks that could cause our results to differ materially from our current expectations are detailed in the company's SEC filings including our annual report on Form 10-K in the section entitled risk factors, forward-looking statements, management discussion and analysis of financial condition and results of operation.

The company is under no obligation to update any forward-looking statement 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 earnings release and our Form 8-K that has been furnished to the SEC both of which are available on our web site.

Now I'll turn the call over to Scot.

Scot Melland

First let me welcome all of you to the Dice Holdings fourth quarter and full year 2008 conference call. I'll start today by briefly discussing our fourth quarter including our perspective on the current market conditions and how they're impacting our businesses. Then I'll hand it over to Mike Durney, our CFO to take you through our financial performance in greater detail, and our guidance where we will take a different approach this year from what we've done in the past. After Mike, I'll make a few closing remarks and then we'll open up the call for questions.

So let's begin with the fourth quarter. On our last call I described how market conditions had gone from uncertain to challenging to difficult during the past year. While in the fourth quarter those conditions deteriorated even further as recruitment activity dropped dramatically in November, December and now January. Obviously this impacted our results.

Worldwide revenues decreased 10% in the quarter driven mainly by a decline in our U.S. based businesses and a drop in the U.K. portion of new financial careers. Demand for our services declined both here in the U.S. and abroad as companies pulled back on recruiting activity given their concerns about their own businesses and the economy in general.

We moved quickly to reduce expenses during the quarter which allowed our adjusted EBITDA margins to remain high at 47%, roughly flat to last year's fourth quarter. In general, I think the fourth quarter can be characterized by four major themes; a rapid decline in the U.S. and European economies, a sharp decrease in recruiting activity, collapsing confidence amongst businesses and the spread of the global financial crisis to Asia and other fast growing markets.

Unfortunately, none of these trends bode well for 2009 results. However, this is a company that has taken prudent steps to manage through this down cycle with an eye towards smart investments that build our brands and our communities for the long term.

Let's talk a bit about our key services. The good news is that our major services continue to perform well for our customers and our job seekers. At Dice, traffic to the site grew 13% year over year in the fourth quarter including 20% growth in key markets such as New York, Silicon Valley, Chicago and Boston, and 34% growth in Seattle.

Over the same time period new resumes posted to the site increased 67% year over year. Technology professionals are coming to us in numbers greater than ever before, but it's not enough that they just visit our services. It's critical that they have a world class experience and we keep them as part of the Dice community for the long term.

So to that end, we will continue to improve our user experience throughout 2009, adding unique content and new services for job seekers like our Dice Advantage service which we launched in October. It's our first service sold directly to job seekers which provides them additional help and exposure on the Dice service. I think Dice Advantage is a good example of how we are introducing new services that boost loyalty among our job seekers and make a little bit of money at the same time.

Read the rest of this transcript for free on seekingalpha.com