Segment Information | SEGMENT INFORMATION The Company changed its reportable segments during the third quarter of 2017 to reflect the current tech-focused operating structure, which was announced in the second quarter of 2017 and implemented in the third quarter of 2017. Accordingly, all prior periods have been recast to reflect the current segment presentation. The Company has two reportable segments: Tech-focused and Healthcare (Health eCareers was sold on December 4, 2017). The Tech-focused reportable segment includes the Dice, Dice Europe, ClearanceJobs, eFinancialCareers (formerly in the Global Industry Group segment), and Brightmatter (absorbed into Tech-focused in the third quarter of 2017 and formerly in Corporate & Other) services, as well as the Company's Open Web technology. The getTalent assets and liabilities along with its revenues and expenses that were previously in Brightmatter remain in Corporate & Other. The Healthcare reportable segment includes the Health eCareers service and was unchanged from prior presentation. Management has organized its reportable segments based upon its internal management reporting. The Company has other services and activities that individually are not more than 10% of consolidated revenues, operating income or total assets. These include Slashdot Media (business sold in the first quarter of 2016), Hcareers, Rigzone, BioSpace (transferred majority ownership to BioSpace management on January 31, 2018) (each formerly in the Global Industry Group segment), and getTalent (discontinued in the third quarter of 2017) services, which are recorded in the "Corporate & Other" category, along with corporate-related costs which are not considered in a segment. The Company’s foreign operations are comprised of the Dice Europe operations and a portion of the eFinancialCareers and Rigzone services, which operate in Europe, the financial centers of the gulf region of the Middle East and Asia Pacific. The Company’s foreign operations also include Hcareers, which operates in Canada, and the Company's Open Web technology, which operates in Europe. Revenue by geographic region, as shown in the table below, is based on the location of each of the Company’s subsidiaries. The following table shows the segment information (in thousands): 2017 2016 2015 By Segment: Revenues: Tech-focused $ 158,398 $ 170,599 $ 177,195 Healthcare 24,354 27,066 25,877 Corporate & Other 25,198 29,305 56,697 Total revenues $ 207,950 $ 226,970 $ 259,769 Depreciation: Tech-focused $ 6,868 $ 7,060 $ 7,044 Healthcare 1,625 2,089 1,599 Corporate & Other 1,259 700 655 Total depreciation $ 9,752 9,849 $ 9,298 Amortization: Tech-focused $ 132 $ 1,923 $ 3,996 Healthcare 596 835 1,202 Corporate & Other 1,410 4,029 8,696 Total amortization $ 2,138 $ 6,787 $ 13,894 Operating income (loss): Tech-focused $ 38,462 $ 54,066 $ 54,234 Healthcare (1,507 ) (929 ) (490 ) Corporate & Other (14,090 ) (49,746 ) (47,389 ) Operating income 22,865 3,391 6,355 Interest expense (3,445 ) (3,481 ) (3,289 ) Other expense (23 ) (29 ) (25 ) Income (loss) before income taxes $ 19,397 $ (119 ) $ 3,041 Capital expenditures: Tech-focused $ 10,481 $ 7,545 $ 6,261 Healthcare 1,160 1,113 2,350 Corporate & Other 1,914 2,756 627 Total capital expenditures $ 13,555 $ 11,414 $ 9,238 2017 2016 2015 By Geography: Revenues: United States $ 154,406 $ 167,855 $ 185,847 United Kingdom 22,247 23,969 36,841 EMEA, APAC and Canada (1) 31,297 35,146 37,081 Non-United States 53,544 59,115 73,922 Total revenues $ 207,950 $ 226,970 $ 259,769 (1) Europe (excluding United Kingdom), the Middle East and Africa (“EMEA”) and Asia-Pacific (“APAC”) December 31, December 31, December 31, Total assets: Tech-focused $ 266,390 $ 263,462 $ 277,273 Healthcare — 14,375 18,134 Corporate & Other 29,328 32,258 73,528 Total assets $ 295,718 $ 310,095 $ 368,935 The following table shows the carrying amount of goodwill by segment as of December 31, 2016 and December 31, 2017 and the changes in goodwill for the years ended (in thousands): Tech-focused Healthcare Corporate & Other Total Goodwill at January 1, 2016 $ 163,646 $ 6,269 $ 28,683 $ 198,598 Foreign currency translation adjustment (11,484 ) — — (11,484 ) Impairment — — (15,369 ) (15,369 ) Goodwill at December 31, 2016 $ 152,162 $ 6,269 $ 13,314 $ 171,745 Foreign currency translation adjustment 5,315 — — 5,315 Sale of business — (6,269 ) — (6,269 ) Goodwill at December 31, 2017 $ 157,477 $ — $ 13,314 $ 170,791 Goodwill at December 31, 2017 Goodwill $ 157,477 $ — $ 13,314 $ 170,791 Accumulated impairment losses — — — — $ 157,477 $ — $ 13,314 $ 170,791 Our annual impairment test for goodwill is performed on October 1 on the following reporting units: Reporting Unit Impairment Indicated Tech-focused No Healthcare (1) No Hospitality No (1) Health eCareers sold on December 4, 2017 The fair value of the Tech-focused and Hospitality reporting units were not substantially in excess of the carrying value as of the most recent annual impairment testing date of October 1, 2017. The percentage by which the estimated fair value exceeded carrying value for the Tech-focused and Hospitality reporting units was 1% and 19%, respectively. Revenue projections for the Tech-focused reporting unit declined due to competition in the technology recruiting market, challenges in developing and introducing new products and product enhancements to the market, the Company’s ability to attribute value delivered to customers, and continued uncertainty around Brexit. Tech-focused revenues declined 7% and 4% for the years ended December 31, 2017 and 2016, respectively. Revenue projections for the year ending December 31, 2018 include a modest improvement to the rate of decline experienced in the year ended December 31, 2017 and is expected to begin to improve late in 2018 and into 2019. The Company’s ability to achieve these revenue projections may be impacted by, among other things, the factors noted above that have contributed to the decline in recent periods. Projected future cash flows declined as a result of the lower projected revenue, as well as increased spending focused on new and enhanced products and marketing campaigns. Operating expenses, excluding amortization expense, impairment charges and disposition related and other costs in the projections are expected to remain approximately consistent for the year ended December 31, 2018 as compared to the year ended December 31, 2017 and then increase at levels that allow for modest operating margin improvements. Results for the Tech-focused and Hospitality reporting units for the fourth quarter of 2017 and estimated future results as of December 31, 2017 are consistent with the October 1, 2017 analysis. As a result, the Company believes it is not more likely than not that the fair value of the reporting units is less than the carrying value as of December 31, 2017. Therefore, no interim impairment testing was performed as of December 31, 2017. The Tech-focused reporting unit has gone through a period of revenue declines, resulting from competition in the U.S. as well as market slowness in the U.K. due to Brexit. These disruptions and uncertainties could decrease demand for finance and technology professionals in the markets we serve. This decline in demand and any future declines in demand could significantly decrease the use of our finance and technology industry job posting websites and related services, which may adversely affect the Tech-focused reporting unit's financial condition and results of operations. If recruitment activity is slow in the industries in which we operate during 2018 and beyond, our revenues and results of operations will be negatively impacted. As a result of these factors, in the fourth quarter, the Company further evaluated the fair value of the Tech-focused reporting unit and believes it is not more likely than not that the fair value is less than the carrying value. If events and circumstances change resulting in significant reductions in actual operating income or projections of future operating income, the Company will test this reporting unit for impairment prior to the annual impairment test. The amount of goodwill as of December 31, 2017 allocated to the Tech-focused and Hospitality reporting units was $157.5 million and $13.3 million, respectively. Determining the fair value of a reporting unit is judgmental in nature and requires the use of estimates and key assumptions, particularly assumed discount rates and projections of future operating results. The discount rate applied for the Tech-focused reporting unit was 12.9% An increase to the discount rate applied or reductions to future projected operating results could result in future impairment of the Tech-focused reporting unit’s goodwill. It is reasonably possible that changes in judgments, assumptions and estimates the Company made in assessing the fair value of goodwill could cause the Company to consider some portion or all of the goodwill of the Tech-focused and Hospitality reporting units to become impaired. In addition, a future decline in the overall market conditions and/or changes in the Company’s market share could negatively impact the estimated future cash flows and discount rates used to determine the fair value of the reporting units and could result in an impairment charge in the foreseeable future. The Healthcare reporting unit was not at risk of failing the goodwill impairment test as of October 1, 2017. The decline in oil prices in 2014 and 2015 and the continued volatility in 2016 decreased demand for energy professionals worldwide. This decline in demand for energy professionals significantly decreased the use of the Company’s energy industry products and services, adversely affecting the Energy reporting unit’s financial condition and results of operations. As a result of these factors, the Company evaluated the fair value of this reporting unit and recorded a goodwill impairment of $15.4 million during the quarter ended September 30, 2016 at the Corporate & Other segment, bringing goodwill for the Energy reporting unit to zero. See Note 4 for further discussion. |