DHI Group, Inc. (DHX) Q1 2016 Earnings Report, Transcript and Summary

Good morning and welcome to DHI's First Quarter 2016 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Rachel Ceccarelli, Director of Corporate Communications. Please go ahead.

Thanks Andrew and good morning everyone. With me on the call today is Mike Durney, President and Chief Executive Officer of DHI Group Inc., along with John Roberts, our Chief Financial Officer. This morning, we issued a press release describing the company's results for the first quarter of 2016. A copy of that release can be viewed on the company's website at dhigroupinc.com. Before I hand the call over to Mike, 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 economic, business, competitive, and technological 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 sections entitled Risk Factors, Forward-looking Statements, and Management's Discussion and Analysis of Financial Condition and Results and Operations. The company is under no obligation to update any forward-looking statements except as required by the federal securities laws. Today's call also includes certain non-GAAP financial measures, including adjusted EBITDA, adjusted EBITDA excluding Slashdot Media, adjusted revenues, adjusted revenues excluding Slashdot Media, net income excluding Slashdot Media, net income excluding impairment of goodwill, diluted earnings or loss per share excluding impairment of goodwill, adjusted EBITDA margin, free cash flow, and net cash to net debt. For details on these measures, including why we use them and reconciliations to 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 website. And now with that, I will turn the call over to Mike.

Great, thanks Rachel. And welcome to the DHI Group Inc. first quarter earnings call. Today I will start with developments of BrightMatter Group and our next generation product launches within that group, then I will discuss product developments and improvements that are core talent acquisition brands and finish with the progress we’re making on our strategic plan. Then I will turn it over to John and he will give you details on our first quarter performance and finally we will open up to your questions. Before we get into our overall performance and strategy, I want to take a moment to address the cyber attacks against Rigzone allegedly by Oilpro and its President David Kent who founded Rigzone. The allegations in the summary of how certain Rigzone database information was illegally accessed was detailed by the U.S. Attorney for the Southern District of New York in their press release and the criminal complaint made available on their website after Kent was arrested and charged. In early 2014 we were notified by Rigzone user that they were contacted by someone affiliated with Oilpro even though they had never registered with Oilpro. We launched an internal investigation and retained a third party forensic information security expert firm to assist us. We determined that certain information housed in our database was accessed by someone who would have needed intimate familiarity with how the code was written. So we turned our findings over to the FBI and have continued to cooperate with them. We determined that email addresses were accessed from the database and used to attempt to get Rigzone users to sign up with Oilpro. We're not aware of any other use of any of the other data for any other purpose. We assisted the government throughout its investigation including in discussion with Kent about the potential sale by Kent of Oilpro to us. The government's criminal investigation of Kent is ongoing. We’re reviewing all remedies and options available to us against David Kent and Oilpro including seeking restitution and damages from them. As this is an ongoing investigation, there isn’t much more we can say about it at this point. So with that moving on to our performance and achievements in Q1, we continue to place significant focus on innovating to drive our business and what we as a team can see how innovation is improving our financial competitive position, we aren't yet satisfied with the financial results. Some businesses are performing more strongly than others reflecting a combination of overall market conditions in competition and the degree of our competitive advantage in specific markets. We clearly have strong headwinds in one of our core markets energy and it’s not getting better yet. Last quarter we announced a consolidation of four of our talent acquisition brands; eFinancialCareers, Rigzone, HCareers, and BioSpace, into one operating umbrella called the Global Industry Group or GIG. We’ve taken further steps to tighten up the cost structure and we think that the energy business will benefit from the consolidated approach in GIG. At the same time, we are demonstrating good growth and innovation in a number of our businesses like security clearance and healthcare. These distinctions are important to see and the changes we’ve made in our organizations structure and products strategy principally but not only through GIG and BrightMatter are going to help our businesses compete better and execute more effectively. Across the board, the pace of change and competitive investment continues in the town acquisition business, to meet and beat the challenges. We believe that innovation needs to take place on more than one front and are well coordinated approach. That means we are innovating and investing on three fronts each of which reinforces the others. First, in our core of businesses as they are today to maintain our competitive advantage. Second, in the GIG structure to gain operating efficiency today and strategic operating leverage in the future to a single platform solutions, and third in BrightMatter to create next generation talent acquisition and talent sourcing products and services. Today I will be talking about innovation on each of these fronts. You will hear more about our initiatives, early successes and works in progress. First I will start with BrightMatter, the group where our new offering including sourcing management issues live, grow and launch. BrightMatter focuses on developing and bringing new products and services to market. The next generation recruitment products developed there are applicable both across all DHI verticals today and to open the gate to enter new markets too. We have previously discussed getTalent, the SaaS talent sourcing and talent relationship management platform designed to help hiring organizations easily pipeline and engage candidate leads or in the pre-apply phase. At the end of the first quarter, we launched the 2.0 version of the platform and have a handful of customers paying for and utilizing the product. It's early but the sourcing tool is resonating with customers and view it as a solution to the major pinpoint of finding targeted and qualified candidates quickly in order to fill up the positions. Illustrating how BrightMatter works in tandem with our talent acquisition brands, the first sale of this new version of getTalent was to our recruitment agency in the Asia Pacific region by International Careers and Healthy Careers closed the second getTalent contract with one of its customers. The benefit of having a worldwide sales force will be significant as we begin to roll out the product in the second quarter. The relationship with BrightMatter and our brand is mutually beneficial. Sales teams at our core brands are able to offer new industry changing product with clients and in turn getTalent gains trusted and familiar clients to test and provide valuable feedback. As we launch and improve products like getTalent and BrightMatter, we dedicate sales and product teams to continue to progress while working to develop separate merging product offerings. We're providing more value to HR decision makers in creating new ways to compete in the marketplace. We compete in the areas of talent management and hiring management. Many of the initiatives rolled out at BrightMatter in the area of pre-hiring through the hiring phase. And equally important offer is arming professionals with career management tools so they too can compete in the marketplace. As an example of providing further value through data and insights to professionals within our specialist communities, Dice launched its new mobile app, which we now called Dice Careers in the first quarter. Essentially a set of tools to manage towards the ideal career, the app engages tech professionals by offering job, skills and salary data leveraging Dice's big data analytics and specialized data for tech careers. The market value feature provides professionals with a predictive analysis of their future salary based on career goals and skills improvements. As an example of product management Silicon Valley may have a salary mismatch based on his or her skills set and experience level. The app shows an estimated salary based on skills, experience and geography along with a list of recommended skills to boost market value and eventually land a dream job. As tech professionals can update their position, skills, location and experience directly in the app, customers then enjoy a larger and more current collection of user profiles. Plus the inside candidates learn from our tech specific and specialized data to be more informed, engage candidate for employers. Only we can provide most relevant skills given our vertical focus. Engagement is compared to our previous app has improved with the average user session duration with the mobile application, up 30% so far. Today Boolean searches the de facto standard for searching resumes. At Dice we implemented a new candidate search algorithm, which has so far yielded a 15% increase in views of search results. We believe though that there are more efficient ways for recruiters to find professionals to fill their roles. In this area of improving efficiency from employer's ClearanceJobs rolled out a new search engine called TeleSearch. The engine identifies candidate matches based on machine learning rather on keywords. And addresses the challenge recruiters face in certain markets relying on long, often complicated Boolean search strings to discover professionals with difficult set of skills or very unique ones. Now instead of a series of conjunctions, recruiters drop their full job descriptions into a search engine, which then immediately yields top matching candidates. So think about the efficiency and ease of use especially for very specific and high-level job specialties. Initial customer feedback has been positive in terms of time savings, quality resumes and ease of use. And the new search engine contributes to higher renewal rates for ClearanceJobs in the first quarter. We are also improving, testing and updating current suite of products we offer at the talent acquisition brand level. Dice and Open Web shows increasing engagement with multiple users. A year ago about 20% of the 750 or so Open Web customers had multiple users. Today, about 30% of the over 1000 customers have multiple users. So we're seeing the higher volumes of recruiters are continuing to engage in social sourcing and pipelining, and we're getting deeper penetration into customers with Open Web. We're continuing to test new offerings to employers pay for performance arrangements. These programs impact key metrics like job count numbers. This is most apparent now with ClearanceJobs will pay for performance has been running for more than a year and customer engagement in the program has bolstered job count numbers and revenue. The Dice across the click test was launched with more than 20 customers in Q1 and an average of 36% year-over-year increase in spend compared to traditional subscription package. Healthy Careers new pay for performance product represents about 2% of its revenue with only a handful of customers so far. Revenue potential from pay for performance is increasing, but constrained at Healthy Careers and cases where customers are focused on hard-to-fill specialties. But we're seeing evidence of customers increasing monthly budget caps. And customers are seeing the value of being able to set specific parameters while paying a premium for the applies that match their criteria. As previously mentioned, GIG was designed to help certain brands, realize their global opportunities, as well as leverage expertise across marketing, sales, content, customer support, product and technology. Well, just in the early stages we've seen more cross-brand collaboration. John will discuss in a while the financial impact of this. The eFinancialCareers service is finding new ways to leverage data to provide deeper market insights to customers. eFinancialCareers's new client reporting tool provides data and metrics to clients in the U.S. so far. Customer's response has been positive and the tool will soon be introduced into other markets. While the brands within GIG are part of a broader strategic group, the value of each of the talent acquisition brand lies in its connection to its specialized community. Marketing campaigns to reach target audiences have improved recognition and introduced our brands to new professionals and customers. In February, eFinancialCareers's launched its ideal employer campaign where financial services professionals identify in rank firms based on the series of criteria giving a more rounded picture of the culture of the employer. The campaigns drove record page views and unique content of the service and also strengthened eFinancialCareers's thought leadership boys within the finical services community. Last year we rebranded our European tech side to Dice Europe to extend the Dice brand globally. In an effort to broaden brand awareness and site engagement, we launched the hottest in tech campaign in the U.K. and Benelux regions in the first quarter. It's been well received among its target audience of tech professionals and drove a significant uptick in social engagement. New sales opportunities have been directly linked to the campaign some of which closed in the first quarter and some of which are pending. We’ve done a lot to increase efficiencies across our brands and combine common brands with the objective to improve coloration, but our course still lies and it is deeply rooted in the professional communities we serve. That won't change even though market conditions in hiring environments will fluctuate. As the recurring industry evolves, DHR will be in the forefront offering innovative services and products that help hiring managers and recruiters, find the best heavy scale talent most efficiently and most effectively. Our strategic direction is evolved too but our mission remains constant. We’re connecting professionals with the right opportunities and employers with the right talent. The new initiatives of BrightMatter with products like getTalent position us to become a partner to employer sourcing and hiring skill talent helping them to recruit more efficiently and effectively and putting the ideal candidates at their fingertips. As we build out our roadmap to navigate toward our digital recruiting marketing platform, we are confident in the strength of our brands value proposition and dedicated team members across the world. Really to take stock of where we are, I’m incredibly happy with our focus on moving the Company forward with new ways to serve the market. There is a strength in our historical brands. Many of them are performing well, some couldn't should be better and off course one energy operating the terrible market environment. Our attention is squarely focused on constant improvement across all of our brands. And in closing, I want to once again thank our team members across the world for all the work they have done in past quarter and year around. And so with that, I'm going to turn it over to John.

Great, thanks Mike. I will begin by summarizing our finial performance for the first quarter of 2016 and then we will open up the calls to questions. As previously reported, we sold the Slashdot Media business in January, so we are appropriate I will speak to the financials excluding that business. Additionally, we have changed our finical segment reporting to align with recent changes and how we operate the business. We now have three reportable segments; One, Tech & Clearance, which include Dice, Dice Europe and ClearanceJobs. Two, Health Care, which is our Healthy Careers business, and three Global Industry Group or GIG which consist of eFinancialCareers, Rigzone, Hcareers and BioSpace. On our website, you can find a recast of our quarterly segments going back to Q1 2014, which incorporates the new segments structure and also shows the segments excluding the Slashdot Media business. My comments today will reflect results excluding the impacts of both the Slashdot Media sale and the severance cost associated with the implantation of the new GIG structure. The impacts of both of these items are included in the disposition related and other cost line item in the statement of operations. With that as context, I'll turn to the quarter. This quarter we saw progress across the organization in spite of continued headwinds in energy and the negative impacts of foreign currency translation. We believe the recent strategic initiatives and investments we have made will help to drive growth over time and better position us to execute against our long term goal of being a Talent focused Global Digital Media Company. Some of the key growth drivers for the first quarter include one, higher year-over-year revenue for average per recruitment package customer at Dice, showing them measureable influence of Open Web and increased service levels. And two, double digit revenue and billings growth for both our ClearanceJobs and Healthy Careers brands highlighting the strong value proposition of these businesses. In the first quarter revenues were up 3% year-over-year on a constant currency basis excluding Slashdot Media and Energy. For the Tech & Clearance segment revenues were up 1% excluding currency impacts. Within that segment Dice U.S. revenues, which constitute approximately 84% of total segment revenues were down 1%. As of March 31, Dice Recruitment Package Customer account was 7450 which is down slightly from last quarter. Of Dice's Recruitment Package Customers, 92% were under an annual contract at quarter end. The renewal rate on annual contracts was 67% with more than 2100 customers up for renewal in Q1. In the first quarter, Recruitment Package Customers on average spent $1118 per month up 4% with customers increasing their levels of service to Dice products and services like Open Web which constitutes roughly half of the year-over-year increase. ClearanceJobs are continuing success in Q1 with revenue growth of 20%. Primary drivers for the business includes favorable market conditions, increased interest and usage of its pay per performance product and a growing number of active job postings. Today there are approximately 15,000 postings on ClearanceJobs up from just over 10,000 from this time last year. Dice Europe revenues were down 11% on a reported basis and 7% on a constant currency basis due to anticipated contract changes with the large client and weakness in legacy non recruitment products. Q1 billings for the Tech & Clearance segment were up 1% year-over-year with a decline in Dice Europe billings offset by billings growth of 26% at ClearanceJobs. Turning to our healthcare segment, revenues were $7 million, up 14%. The revenue increase for the quarter reflects growing customer usage of Healthy Careers products and services with revenues principally driven by core products such as jobs postings and resume access, as well as new products such as Spotlight and pay per performance products. Billings were up 15% as well reflecting stronger sales. Now I’ll review the financial results of the global industry group or GIG. Overall GIG revenues were down 17% but excluding energy and currency impacts, revenues were up 4%. The same pattern holds for billings with GIG, billings down 16% and without energy and currency billings were up 5%. Revenue at our eFinancialCareers brand increased 4% to $8.9 million and on a constant currency basis revenues increased 8% with most of the growth driven by performance in the U.K. and Asia-Pac. Today market sentiment is mixed across all of the major financial centers with conditions in North America more uncertain. Despite financial market volatility however, overall business trends remain positive. On a constant currency basis, U.K. revenues increased 6% in Sterling, Asia Pacific revenues were up 11% in Singapore Dollars, Continental Europe and the Middle East revenues increased 9% and in the U.S. revenues were up 5%. On a reported basis, eFinancialCareers billings were up 1% and 5% on a constant currency basis. Turning to energy, Q1 revenues were $2.9 million, down 54% and in Q1 billing a decrease 56% as a result of ongoing uncertainty within the energy market with customers pausing or curving recruitment. As we look ahead to the rest of 2016, we do not see immediate improvement in the energy business, although we continue to remain dedicated to our leadership position within the energy market. Hcareers or hospitality brand reported $3.8 million in revenues this quarter, a 5% decline. The decline was partially attributable to more customer contracts completing in Q1 of last year and therefore the full value of those contracts being recognized into revenues at that time. In Q1 of this year, contracts with several new key customers and a pickup in transactional business drove billings up 6% for the quarter. Differed revenue for the quarter excluding Slashdot Media totaled $88.8 million down 1% year-over-year but up 7% from Q4 2015. The primary driver for this year-over-year decrease was energy which was down 54%, largely offset by the Tech & Clearance segment which increased by 6% and the healthcare segment which increased by 44%. Expenses excluding disposition related and other costs were down approximately $2.2 million. This largely relates to decreases for one, to sale of Slashdot since 2015 had a full quarter's worth of expenses. Two, lower expenses at our energy business, and three lower amortization expense partially offset by increases and investments within the BrightMatter Group and Healthcare. Adjusted EBITDA excluding Slashdot Media and severance related to the GIG realignment was $14 million or a margin of 24%. While this was within our expectations for the quarter, EBITDA is down approximately $3 million from Q1 2015. There are few main items contributing to the decline in EBITDA. One, the decline in energy revenue and EBITDA reflected in GIG EBITDA declining by $1.2 million excluding severance. Two, additional investment in the BrightMatter Group of approximately $1 million. And three, approximately $400,000 in expenses for professional fees related to the agreement to add a member to our Board of Directors. This quarter, the effective tax rate was 36.7% compared to a rate of 38.8% in Q1 last year. The rate was lower this year primarily as a result of the mix in U.S. and non-U.S. income. On a reported basis, the company posted net income of $1.1 million in the quarter or $0.02 per share excluding Slashdot and severance diluted EPS was $0.07 in the quarter. In the first quarter, we generated free cash flow of $10.1 million, lower than last year primarily due to the timing of tax payments. I’d now like to take a few minutes to discuss guidance for the rest of 2016. For reference, please turn to the table provided in the business outlook section of our press release. Before I discuss the numbers, I want to point out how we will be providing outlook consisting with our new segment structure. We are providing estimated revenue growth rates based on three segments; Tech & Clearance, Healthcare and GIG. We will also be breaking down GIG into the brand level to highlight revenue contributions. So in Q2 we expect revenues of $57.5 million to $59 million and talent acquisition brand, adjusted EBITDA plus corporate expenses of $16.5 million to $17.5 million or 29% to 30% of revenues. We also expect to invest $2.5 million to $3 million of that EBITDA as a continued investment in the BrightMatter Group in Q2. For 2016, we now anticipate revenues in the range of $240 million to $246 million and Talent acquisition brand adjusted EBITDA of $74 million to $78 million or approximately 31% to 32% of revenues. Our outlook reflects continuing declines in our energy business, slower uptake of new products in the healthcare business, strategic investments to drive innovation, i.e. the BrightMatter Group, and the negative currency impacts to revenue of approximately $600,000 in Q2 and $2.1 million for the full year. In closing, our first quarter consisted of some solid wins such as strong performance in Healthcare, eFinancialCareers and ClearanceJobs and the formation of the global industry group to improve efficiencies, drive future growth, and foster collaboration. Looking ahead to the rest of the year, I believe we remain well positioned to deliver upon what we set out to accomplish at the beginning of this year. In 2016, we will continue to work to drive additional improvement in our core talent acquisition brands while investing a next generation recruitment products and services to further evolve our business and drive growth longer term. With that, we are ready to open the call up for questions.

[Operator Instructions] The first question comes from Youssef Squali of Cantor Fitzgerald. Please go ahead.

Hi, good morning. This is Kip Paulson for Youssef. Just a couple from me on Dice and eFinancialCareers. First, on Dice, how should we think about the 7,450 client count for Dice? Are there any signs of a bottom here? And then, on pricing, you mentioned the average Dice recruitment customers spend was up, but how much of this was driven by Open Web? Was this similar to the roughly 50% of increase seen in recent quarters? And then, on eFinancialCareers, it's encouraging to see high-single-digit year-on-year growth there, but could you give us some color on the U.S. market, specifically why is it lagging behind other regions and do you think this will continue for the remainder of the year? Thanks.

He Kip, it’s John. So let me take one of those first. So on the increase in the ARPU at Dice, so that up 4% year-over-year. Yes on the continuing trend there are about half of that increase year-over-year is related to Open Web and the other half as we talked about is related to a handful of things, a combination of both customers buying other additional products and services such as Sourcing Concierge or some other products, as well as customers buying more of the core. So I think from a pricing standpoint and ARPU that the trend continues year –over-year.

Just to add to that on customer account, as we continue to develop new product and services for instance we have Sourcing Concierge Services, a bunch of those are not in the recruitment package number. So when we do pay for performance, which I referred to earlier we are doing on the test when we do Sourcing Concierge Services those customers are not in the recruitment package customer account so the mix of businesses changing slightly. It's not significant yet and the recruitment packages still generate the vast majority of our revenue but it is changing slightly and will adapt how we communicate that as that piece of the business gets bigger and bigger over time. So the focus on the literal number of pure recruitment packages will be less in the future. On eFinancialCareers, the U.S. has always been the toughest market for us for eFinancialCareers, but competitive environment in the U.S. in financial services is probably the hardest. I think what you find within the customer mix in the U.S. is a pretty significant dichotomy in customers who believe we don't provide the best, most relevant candidates to some part of a customer base which is offset by a pretty significant part of the customer base things we provide the best candidates and that dichotomy is probably greater in the U.S., not probably, it is greater in the U.S. than anywhere else in the eFinancialCareers world and frankly anywhere else in our brand portfolio. We said before we've changed the organization in the U.S. from a sales and marketing standpoint. I think the GIG structure from a marketing approach across the brands and focusing on the geography, so the value we get of putting the brands together in the U.S. from a marketing standpoint I think will be pretty significant for us. So we’re seeing signs that the U.S. is getting stronger but they are not totally clear yet to be frank about it.

All right. Great, thanks. And then, one more if I might. We noticed one thing in the model that SBC was about $1 million higher than guidance in the quarter. What was the driver here? Was it something related to the sale of Slashdot?

Say that again, Kip what was higher?

The stock-based compensation, I think it was about $1 million higher than guidance. Just wondering what was driving that and if there was anything related to the sale of Slashdot moving that up?

Yes, so it is related to Slashdot. So associated with the sale of Slashdot there was acceleration of stock associated with people who left as part of the sale and that was just over $900,000 actually.

Okay, great. Thanks guys.

The next question comes from Randy Reece of Avondale Partners. Please go ahead.

Good morning. In your restated segments, there is a piece of corporate and other revenue that moved into the Tech & Clearance segment. What did that represent?

It’s a legacy piece of non recruitment business Randy, it’s called IT media, it came with the old IT job board acquisition we did a number of years ago. It’s really an email lead gen kind of business that’s as you can see from the movement, the segment it’s small business $1 million to $2 million a year.

What would that number have been under previous reporting in the first quarter of 2016?

What would the number have been? It would have been in that same range, this business hasn’t moved much from an annual basis, so it runs $1.5 million to $2 million a year.

And I'm trying to differentiate the trends going on with Health eCareers versus BioSpace. And with BioSpace in particular, is there a significant change in customer count versus revenue spend per customer?

On BioSpace?

Yes.

No, there is really not. I mean, in BioSpace as you can see from - I mean, this is the first time we broken up BioSpace revenue. It was and continues to be a relatively small portion of what was the healthcare segment and now the overall business as well. I mean, the trends there are different. The customers that they serve are different. Given the scale of the Health eCareers business and some of the new products that are rolling out there, I think they are having, clearly from the results, more success in driving that business forward. As oppose to BioSpace which is still pretty small scale business, I think that we’ve got hopes for over time and part of putting it into GIG is to try and leverage some of the broader resources across the organization to try and help move that business forward.

Just Randy, to add to what John said, that business again it's tiny. So we probably shouldn’t spend a whole lot of time on it but it's a business that we've grown, when we bought it for about $3 million to start to get into the $5 million range on an annual revenue standpoint, it is a mix of revenue streams. So there is an advertising component to that which is not insignificant given that it is a content site in addition to being a career related site. Today, that business for us is somewhat bifurcated between some of the really large Biotech and Pharma companies who spend a fair amount with us and then one-off services. And part of the goal, as John said, moving into GIG is an approach to filling in the middle to having mid-sized companies, growing companies that historically, that wasn’t focused on in the business and we are starting to get more traction there which is one of the reasons why we have been able to grow but it’s not nearly penetrated yet in that mid-size customer base.

Yes, I was just trying to triangulate the results and outlook versus expectations because my previous expectations were higher for healthcare lumped together, and I noted that your second quarter revenue guidance for BioSpace had a large year-over-year down number.

I think you are into rounding in terms of, given the size of it. Healthcare is a business that’s growing in the 10% to 15% range which is what we’d expect to continue.

Thank you.

[Operator Instructions] The next question comes from Jeff Silber of BMO. Please go ahead.

Hi, good morning. It's Henry Chien calling in for Jeff. Just a question on the reorganization or the new segmentation. Can you talk about any new leadership or management changes that have occurred or will occur, and any change in the strategic direction of the overall Company, I guess? Any color you can provide? Thanks.

So looking at - so focus on the GIG business, from our senior leadership standpoint what we did was we put all four of those businesses under one roof. And so there is one leader, the MD of the GIG business who used to run eFinancialCareers and now is taking on the other three. And we put an organization in place where we have across the top of the leadership, ahead of sales, ahead of marketing, ahead of product, ahead of technology, and ahead of content and social engagement. So across the top of the organization. As you get deeper into the organizations, you have brand focus people in sales, marketing and technology. The rest are shared. So what we expect to get is the go-to-market strategy for all four of the brands that while they are not identical because they serve different markets in slightly different ways but at least will be on a coordinated basis and we can share across one, two, three or four of the brands our marketing approach, product approach, technology approach and sales structure approach. So there is some benefit we’ve done from a cost structure standpoint because we've refined and leveraged the organization but we've put senior people in charge of those four brands which are roughly $70 million business with 250 people. So we are pretty excited about what we can do with those brands. We've mentioned before, just to reiterate, one of the reasons why we put those four together is, eFinancialCareers is the global organization with different people in different places and serves 20 markets and there is already an existing global business. Rigzone is a global business although has strength relative to market today, strength in certain markets and has opportunity in other markets where eFinancialCareers has been strong and then when you get to HCareers and BioSpace, those are North American base businesses today, yet have we believe good opportunity outside North America. So we now have an infrastructure that we can easily role those to out into - to grow those businesses. And so I hope that answers the question. But that’s how we think about – that’s how we structured the organization and that’s how we think about the opportunity in the market.

Yes. That's helpful. And the product development under BrightMatter, are those products being used across all the different brands or is it sort of pick and choose or I'm just curious how those fit into the new segments?

So BrightMatter has a handful of things. So the first thing it has the Work Digital business which is the foundation for Open Web. So it develops the Open Web product, manages the data and the platform which then can be used by the brands, as you know Dice has Open Web integrated into a eFinancialCareers and Dice Europe have Open Web as well and then the plan is to roll it out to the others throughout the year. And frankly one of the benefits of GIG is, we can go into the GIG businesses since eFinancialCareers already have experienced with offering Open Web, we can roll it out into the other three GIG brands. That's the first thing that's in BrightMatter. Second is, our GIG talent product, and as I mentioned before, getTalent we think is incredibly important for us because it’s a products or service that we can offer through the brands and so it's another offering within the brands in talking to clients. But as importantly it opens up a whole new world for us that transcends the brands because it gets us into customer groups that we don’t serve within the vertical brands, so that’s the second. And then we’re doing a couple of other things. We have the FreshUp product which we talked about before that fits within BrightMatter and FreshUp is sold as a separate service to certain end user markets but also can be incorporated into a variety of things including getTalent. And then we have a number of other products that we’re developing that are still early in their development phase that will both support the brands together with opening up new markets for us. So it's one of the reasons why we believe so strong at BrightMatter is the future of the company because it will develop things that can be offered through individual talent acquisition brands and stand on their own.

Got it. Okay. Thank you so much.

[Operator Instructions] This concludes our question-and-answer session. I would like to turn the conference back over to Rachel Ceccarelli for any closing remarks.

Thank you for your time this morning and for your interest in DHI. Management will be available to answer any follow-up questions you may have. Please call Investor Relations at 212-448-4181 to be placed in the queue. Have a great day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.