DHI(US:DHX)2025-05-12 21:09PART I. FINANCIAL INFORMATION Unaudited Financial Statements The company's Q1 2025 financials show a $9.4 million net loss and a 10% revenue decline due to goodwill impairment and restructuring charges Condensed Consolidated Balance Sheets Total assets decreased to $212.1 million due to a goodwill reduction, while liabilities rose slightly and cash declined Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash | $2,655 | $3,702 | | Goodwill | $120,700 | $128,100 | | Total Assets | $212,069 | $221,371 | | Liabilities & Equity | | | | Deferred Revenue (Current) | $50,124 | $44,934 | | Long-term debt | $33,000 | $32,000 | | Total Liabilities | $108,171 | $107,046 | | Total Stockholders' Equity | $103,898 | $114,325 | Condensed Consolidated Statements of Operations Q1 2025 revenue fell 10% to $32.3 million, resulting in a $9.4 million net loss due to impairment and restructuring charges Q1 2025 vs Q1 2024 Statement of Operations (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $32,301 | $36,025 | | Total operating expenses | $41,182 | $34,056 | | Impairment of goodwill | $7,400 | $0 | | Restructuring | $2,270 | $0 | | Operating income (loss) | $(8,881) | $1,969 | | Net loss | $(9,351) | $(1,512) | | Diluted loss per share | $(0.21) | $(0.03) | Condensed Consolidated Statements of Cash Flows Operating cash flow remained stable at $2.2 million, while investing and financing activities led to a $1.0 million net decrease in cash Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash from operating activities | $2,248 | $2,087 | | Net cash used in investing activities | $(2,160) | $(4,442) | | Net cash from (used in) financing activities | $(1,135) | $1,389 | | Net change in cash | $(1,047) | $(966) | Notes to Condensed Consolidated Financial Statements Notes detail a segment change, a $7.4M goodwill impairment, a $2.3M restructuring charge, and divergent brand revenue performance - In January 2025, the company restructured to separate its two brands, ClearanceJobs and Dice, into distinct divisions, resulting in an 8% workforce reduction and a $2.3 million charge for severance costs38 - Following the restructuring, the company performed a goodwill impairment test and recorded a $7.4 million impairment charge for the Dice reporting unit57 - The company changed its reportable segments from a single 'Tech-focused' segment to two segments: ClearanceJobs and Dice, to align with the new operating structure103104 Disaggregated Revenue by Brand (in thousands) | Brand | Q1 2025 Revenue | Q1 2024 Revenue | % Change | | :--- | :--- | :--- | :--- | | ClearanceJobs | $13,377 | $13,005 | +3% | | Dice | $18,924 | $23,020 | -18% | | Total | $32,301 | $36,025 | -10% | Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses a 10% revenue decline driven by the Dice segment, an $8.9 million operating loss, and sufficient liquidity Revenue and Key Metrics Key metrics show a 14% drop in Dice customers and a 12% rise in average revenue per customer for ClearanceJobs Recruitment Package Customers | Brand | As of March 31, 2025 | As of March 31, 2024 | % Change | | :--- | :--- | :--- | :--- | | ClearanceJobs | 1,891 | 2,032 | (7)% | | Dice | 4,490 | 5,250 | (14)% | Average Annual Revenue per Recruitment Package Customer | Brand | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | ClearanceJobs | $25,806 | $23,050 | 12% | | Dice | $16,384 | $15,997 | 2% | Backlog (in thousands) | Metric | March 31, 2025 | March 31, 2024 | % Change | | :--- | :--- | :--- | :--- | | Backlog | $107,760 | $110,736 | (3)% | Results of Operations Q1 revenue fell 10% to $32.3 million, leading to an $8.9 million operating loss due to impairment and restructuring costs - Dice revenue decreased by $4.1 million (18%) due to macroeconomic conditions driving lower renewal rates and new business activity136 - ClearanceJobs revenue increased by $0.4 million (3%) driven by high demand for professionals with government clearance136 - Product development expenses decreased by $1.0 million (20%), primarily due to $2.2 million in lower compensation costs in the Dice segment from reduced headcount138 - Sales and marketing expenses decreased by $1.6 million (12%), largely due to lower compensation costs and reduced discretionary marketing spend in the Dice segment139 Non-GAAP Financial Measures Adjusted EBITDA decreased to $7.0 million with a margin of 22%, down from 24% in the prior-year period Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | $(9,351) | $(1,512) | | Interest expense | 660 | 946 | | Income tax expense (benefit) | (126) | 2,269 | | Depreciation | 3,984 | 4,456 | | Non-cash stock-based compensation | 1,063 | 2,144 | | Impairment of goodwill | 7,400 | — | | Restructuring | 2,270 | — | | Other adjustments | 1,081 | 266 | | Adjusted EBITDA | $6,981 | $8,569 | Adjusted EBITDA Margin | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $32,301 | $36,025 | | Adjusted EBITDA | $6,981 | $8,569 | | Adjusted EBITDA Margin | 22% | 24% | Liquidity and Capital Resources The company maintains sufficient liquidity with $2.7 million in cash and $51.0 million available under its credit facility - At March 31, 2025, the company had cash of $2.7 million and $51.0 million in borrowing capacity under its $100.0 million Credit Agreement158159 - Anticipated capital expenditures for fiscal year 2025 are approximately $9 million to $10 million169 - As of March 31, 2025, $4.3 million remained available for purchase under the current stock repurchase plan168 Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is interest rate exposure on its $33.0 million of variable-rate debt - The company has interest rate risk from its Credit Agreement. A hypothetical 1.0% increase on the $33.0 million of variable rate borrowings outstanding as of March 31, 2025, would increase annual interest expense by approximately $0.3 million176 - Operations are conducted within the United States, so current operations are not subject to foreign exchange risk174 Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes - The CEO and CFO concluded that the company's disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed is recorded, processed, and reported in a timely manner180 - No material changes to internal controls over financial reporting occurred during the quarter ended March 31, 2025181 PART II. OTHER INFORMATION Legal Proceedings The company is not a party to any material pending legal proceedings outside the ordinary course of business - Except as noted in Note 11 of the financial statements, the company is not currently a party to any material pending legal proceedings183 Risk Factors No material changes have occurred from the risk factors disclosed in the 2024 Annual Report on Form 10-K - As of May 12, 2025, there have been no material changes from the risk factors previously disclosed in the Annual Report on Form 10-K184 Unregistered Sales of Equity Securities and Use of Proceeds The company repurchased 886,012 shares in Q1 2025 and approved a new $5.0 million stock repurchase program - In January 2025, the Board approved a new stock repurchase program authorizing the purchase of up to $5.0 million of common stock through February 2026186 Stock Repurchases for Q1 2025 | Period | Total Shares Purchased | Average Price Paid per Share | Shares Purchased as Part of Program | Approx. Dollar Value Remaining in Program | | :--- | :--- | :--- | :--- | :--- | | Jan 2025 | 482,526 | $2.53 | — | — | | Feb 2025 | 242,655 | $2.56 | 150,935 | $4,624,010 | | Mar 2025 | 160,831 | $1.84 | 160,831 | $4,327,495 | | Total | 886,012 | | 311,766 | | Other Information No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the first quarter of 2025 - During the three-month period ended March 31, 2025, no director or officer adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement"192 Exhibits This section lists all exhibits filed with the Form 10-Q, including certifications and corporate governance documents