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DHI(DHX) - 2022 Q4 - Annual Report
DHXDHI(DHX)2023-02-09 16:00
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Financial Performance and Metrics - Net income for 2022 was 4.176million,comparedtoanetlossof4.176 million, compared to a net loss of 29.742 million in 2021 and 30.015millionin2020[439]−Basicearningspersharefromcontinuingoperationswere30.015 million in 2020[439] - Basic earnings per share from continuing operations were 0.09 in 2022, compared to a loss of 0.01in2021and0.01 in 2021 and 0.67 in 2020[439] - Diluted earnings per share from continuing operations were 0.09in2022,comparedtoalossof0.09 in 2022, compared to a loss of 0.01 in 2021 and 0.67in2020[439]−Weighted−averagesharesoutstandingforbasicEPSwere44.274millionin2022,46.333millionin2021,and48.278millionin2020[439]−2.6millionshareswereexcludedfromdilutedEPScalculationin2021and1.3millionin2020duetonetlossesfromcontinuingoperations[439]−Accumulatedothercomprehensivelossfor2022was0.67 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 61thousandin2021and61 thousand in 2021 and 28.5 million in 2020[413] - The company reclassified 28.1millionofcurrencytranslationadjustmentstotheStatementsofOperationsin2021[413]−Foreigncurrencytranslationadjustmentwasalossof28.1 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 395thousandin2021and395 thousand in 2021 and 729 thousand in 2020[413] - The company contributed 2.1million,2.1 million, 1.7 million, and 1.6milliontotheemployeesavingsplanfor2022,2021,and2020respectively[438]CustomerandMarketGrowth−Dicerecruitmentpackagecustomersincreasedfrom5,150in2020to6,311in2022,whileClearanceJobscustomersgrewfrom1,718to2,064overthesameperiod[87]−Thecompanyservesapproximately10,800diversifiedcustomers,withnosinglecustomeraccountingformorethan101.6 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 70.0millionunderitsCreditAgreement[99]−Thecompany’sCreditAgreementincludesrestrictivecovenantsandfinancialratiorequirements,withnon−compliancepotentiallyleadingtodefaultandacceleratedrepaymentobligations[102]−Thecompanyexpectsinterestpaymentsof70.0 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 1.0millionin2027,basedonaninterestrateof6.671.0 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 23,000asofDecember31,2022and2021,respectively,withavailablecapacityof23,000 as of December 31, 2022 and 2021, respectively, with available capacity of 70,000 and 67,000forthesameperiods[394]OperationalRisksandChallenges−Thecompanyfacesintensecompetitionfromgeneralistjobboards,specialistjobboards,andemergingcompetitorswithnewbusinessmodels[81]−Thecompanyfaceschallengesinmaintainingwebsiteperformance,includingpotentialdisruptions,outages,andcapacityconstraints,whichcouldnegativelyimpactuserengagementandcustomeracquisition[105]−Capacityconstraintsandsystemfailurescouldsignificantlyimpactthecompany′sabilitytomaintainservicequality,potentiallyleadingtodecreasedusageandattractivenessofitsservices[106]−ThecompanyreliesheavilyonAmazonWebServicesforhostingitswebsites,andanydisruptionsintheseservicescouldharmitsbusinessandreputation[116]−Cyber−attacksandsecuritybreachescouldresultinsignificantfinancialandreputationaldamage,despiteexistingsecuritymeasures[109][110]−Thecompany′sbusinessdependsonthecollectionanduseofpersonalandprofessionaldata,whichissubjecttoincreasingregulatoryscrutinyandpotentiallegalliabilities[117][119]−Changesinsearchenginealgorithmsorcompetitors′SEOeffortscouldnegativelyimpactuserengagementandgrowth[113][114]−Thecompanyfacesrisksfromthird−partydataaggregationandcopycatwebsites,whichcouldharmitsbrandandbusiness[115]−Regulatorychanges,suchastheCaliforniaConsumerPrivacyAct(CCPA)andCaliforniaPrivacyRightsAct(CPRA),couldincreasecompliancecostsandrestrictbusinessoperations[119][120]−Internet−wideincidentsorchangesinindustrystandardscouldresultinregulatorypenaltiesanddeterusersfromusingthecompany′sservices[118]−ThecompanyissubjecttoU.S.governmentregulationsontheInternet,includingpotentialtaxesandrestrictionsoncommunicationmethods,whichcouldadverselyaffectitsbusiness[121]−Changesinlawsorregulations,includingnetneutrality,coulddecreasedemandforthecompany′sservicesandincreasebusinesscosts[122]−Thecompanyfacesrisksfrompotentialdiscriminatoryoranti−competitivepracticesbylocalnetworkoperators,whichcouldimpedegrowthandincreaseexpenses[123]−Globalinternetregulationsorprosecutionsforunintentionalviolationscouldharmthecompany′sbusinessandfinancialcondition[124]−Thecompany′sperformancedependsonretainingkeyexecutivesandpersonnel,withpotentialadverseeffectsfromemployeeturnoverorcompetition[126]−Economicdownturns,suchasthe2001recession,couldleadtorevenuedeclines,asseenwitha2967,000 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 23.8million,representing5723.8 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 20millionand20 million and 22 million, driven by investments in new product development[263] - The company repurchased 3.3 million shares for 18.6millionin2022,with18.6 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 1.2millionin2021,resultinginarealizedgain[360]−Thecompanyreceived1.2 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 2.2million,witharecordedfairvalueof2.2 million, with a recorded fair value of 3.6 million on the same date[368] - The company recorded 1.6millionand1.6 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 6.6millionandleaseliabilityat6.6 million and lease liability at 8.5 million as of December 31, 2022[259] - Operating lease costs for 2022 were 2.1million,withtotalleasecostsof2.1 million, with total lease costs of 1.6 million after sublease income[352] - The company recorded a 1.9millionimpairmentchargeonright−of−useassetsin2021duetoCOVID−19impactsonrealestatemarkets[357]AccountsReceivableandTaxValuation−Thecompany′sreserveforuncollectibleaccountsreceivablewas1.9 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,and733, and 1,001 as of December 31, 2022, 2021, and 2020, respectively[465] - The company's deferred tax valuation allowance was 5,694,5,694, 5,139, and 5,305asofDecember31,2022,2021,and2020,respectively[465]ShareRepurchasesandEquityPlans−Thecompanyrepurchasedshareswithassociatedcostsof5,305 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,and55,780, 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]