DHI(US:DHX)2023-02-09 16:00Financial Performance and Metrics - Net income for 2022 was $4.176 million, compared to a net loss of $29.742 million in 2021 and $30.015 million in 2020[439] - Basic earnings per share from continuing operations were $0.09 in 2022, compared to a loss of $0.01 in 2021 and $0.67 in 2020[439] - Diluted earnings per share from continuing operations were $0.09 in 2022, compared to a loss of $0.01 in 2021 and $0.67 in 2020[439] - Weighted-average shares outstanding for basic EPS were 44.274 million in 2022, 46.333 million in 2021, and 48.278 million in 2020[439] - 2.6 million shares were excluded from diluted EPS calculation in 2021 and 1.3 million in 2020 due to net losses from continuing operations[439] - Accumulated other comprehensive loss for 2022 was $481 thousand, compared to $61 thousand in 2021 and $28.5 million in 2020[413] - The company reclassified $28.1 million of currency translation adjustments to the Statements of Operations in 2021[413] - Foreign currency translation adjustment was a loss of $420 thousand in 2022, compared to a gain of $395 thousand in 2021 and $729 thousand in 2020[413] - The company contributed $2.1 million, $1.7 million, and $1.6 million to the employee savings plan for 2022, 2021, and 2020 respectively[438] Customer and Market Growth - Dice recruitment package customers increased from 5,150 in 2020 to 6,311 in 2022, while ClearanceJobs customers grew from 1,718 to 2,064 over the same period[87] - The company serves approximately 10,800 diversified customers, with no single customer accounting for more than 10% of 2022 revenues[56] - ClearanceJobs revenue more than doubled over the past five years, driven by its unique franchise in the cleared professionals market[46] - ClearanceJobs had approximately 67,000 job postings and an average of 630,000 monthly users in 2022[34] - The U.S. unemployment rate for computer-related occupations was 1.8% in December 2022, compared to the national average of 3.5%[36] Product Development and Innovation - Dice launched new products in 2022, including a New Job Page, TalentSearch Auto Talent Alerts, and iOS Messaging[47] - ClearanceJobs introduced Company Pages, Scheduled Broadcast Messages, and Live Video in 2022[47] - The company is investing in engineering talent to increase the pace of innovation and improve product delivery quality and speed[48] - Marketing efforts are focused on driving traffic to Dice, increasing qualified leads, and growing visible profiles with lower costs[48] - The company is incorporating AI into its offerings, which presents risks such as flawed algorithms, biased datasets, and potential reputational harm if AI systems cause harm or controversy[104] Financial Liabilities and Debt - The company had $30.0 million in outstanding indebtedness as of December 31, 2022, with an additional borrowing capacity of $70.0 million under its Credit Agreement[99] - The company’s Credit Agreement includes restrictive covenants and financial ratio requirements, with non-compliance potentially leading to default and accelerated repayment obligations[102] - The company expects interest payments of $2.0 million per year from 2023 to 2026 and $1.0 million in 2027, based on an interest rate of 6.67%[258] - The actual interest rates on LIBOR rate loans were 6.67% and 1.88% as of December 31, 2022 and 2021, respectively, with interest margins of 2.35% and 1.75% for the same periods[394] - The company's revolving credit facility had borrowings of $30,000 and $23,000 as of December 31, 2022 and 2021, respectively, with available capacity of $70,000 and $67,000 for the same periods[394] Operational Risks and Challenges - The company faces intense competition from generalist job boards, specialist job boards, and emerging competitors with new business models[81] - The company faces challenges in maintaining website performance, including potential disruptions, outages, and capacity constraints, which could negatively impact user engagement and customer acquisition[105] - Capacity constraints and system failures could significantly impact the company's ability to maintain service quality, potentially leading to decreased usage and attractiveness of its services[106] - The company relies heavily on Amazon Web Services for hosting its websites, and any disruptions in these services could harm its business and reputation[116] - Cyber-attacks and security breaches could result in significant financial and reputational damage, despite existing security measures[109][110] - The company's business depends on the collection and use of personal and professional data, which is subject to increasing regulatory scrutiny and potential legal liabilities[117][119] - Changes in search engine algorithms or competitors' SEO efforts could negatively impact user engagement and growth[113][114] - The company faces risks from third-party data aggregation and copycat websites, which could harm its brand and business[115] - Regulatory changes, such as the California Consumer Privacy Act (CCPA) and California Privacy Rights Act (CPRA), could increase compliance costs and restrict business operations[119][120] - Internet-wide incidents or changes in industry standards could result in regulatory penalties and deter users from using the company's services[118] - The company is subject to U.S. government regulations on the Internet, including potential taxes and restrictions on communication methods, which could adversely affect its business[121] - Changes in laws or regulations, including net neutrality, could decrease demand for the company's services and increase business costs[122] - The company faces risks from potential discriminatory or anti-competitive practices by local network operators, which could impede growth and increase expenses[123] - Global internet regulations or prosecutions for unintentional violations could harm the company's business and financial condition[124] - The company's performance depends on retaining key executives and personnel, with potential adverse effects from employee turnover or competition[126] - Economic downturns, such as the 2001 recession, could lead to revenue declines, as seen with a 29% drop in 2009 compared to 2008[127][128] - The COVID-19 pandemic caused a 37.8 million impairment charge in 2020 due to reduced recruitment activity and economic instability[129] - The company's stock price volatility and potential delisting from the NYSE could negatively impact liquidity and market value[141][142] - Failure to maintain effective internal control over financial reporting could harm the company's business and stock price[143] - The company faces risks from intellectual property infringement claims, which could result in costly litigation or business modifications[132] - Climate change, natural disasters, and public health issues could disrupt operations and negatively impact financial performance[135] Goodwill and Intangible Assets - Goodwill and intangible assets as of December 31, 2022, were $128.1 million and $23.8 million, representing 57% and 10% of total assets, respectively[80] - Impairment charges totaling $37.8 million were recorded in 2020 due to COVID-19 impacts on future earnings and cash flows[80] - The remaining useful life of the Dice.com trademarks and brand name was determined to be indefinite, with an annual impairment test performed on October 1 of each year[373] Capital Expenditures and Investments - Capital expenditures for 2023 are anticipated to be between $20 million and $22 million, driven by investments in new product development[263] - The company repurchased 3.3 million shares for $18.6 million in 2022, with $2.1 million remaining under the current repurchase plan[262] - The company sold a minority interest in a technology company for $1.2 million in 2021, resulting in a realized gain[360] - The company received $2.1 million from a legal settlement with a former employee in Q4 2022[365] - The company's equity in net assets of eFC as of June 30, 2021 was $2.2 million, with a recorded fair value of $3.6 million on the same date[368] - The company recorded $1.6 million and $0.2 million of income related to its proportionate share of eFC's net income for the years ended December 31, 2022 and 2021, respectively[368] Leases and Real Estate - The company's lease right-of-use asset was valued at $6.6 million and lease liability at $8.5 million as of December 31, 2022[259] - Operating lease costs for 2022 were $2.1 million, with total lease costs of $1.6 million after sublease income[352] - The company recorded a $1.9 million impairment charge on right-of-use assets in 2021 due to COVID-19 impacts on real estate markets[357] Accounts Receivable and Tax Valuation - The company's reserve for uncollectible accounts receivable was $1,374, $733, and $1,001 as of December 31, 2022, 2021, and 2020, respectively[465] - The company's deferred tax valuation allowance was $5,694, $5,139, and $5,305 as of December 31, 2022, 2021, and 2020, respectively[465] Share Repurchases and Equity Plans - The company repurchased shares with associated costs of $65,990, $55,780, and $71,217 as of December 31, 2022, 2021, and 2020, respectively[405] - The company had 2,086,933, 1,593,775, and 1,352,438 non-vested PSUs as of December 31, 2022, 2021, and 2020, respectively[422] - No dividends were declared during the years ended December 31, 2022, 2021, or 2020 due to limitations in the Credit Agreement[412] - The company approved the 2022 Omnibus Equity Award Plan on July 13, 2022, replacing the expired 2012 Omnibus Equity Award Plan[414]