Q2 2023 DHI Group Inc Earnings Call
Good afternoon, and welcome to the D. H I group incorporated second quarter 20, twenty-three financial results conference call.
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I would now like to turn the conference over to Todd currently of M. K R. Investor Relations. Please go ahead.
Thank you operator, good afternoon, and welcome to D. O J groups 2023 second quarter earnings Conference call listening on today's call. Her D. H I C O R daily and CFO , Kevin Busted.
Before I turn the colored art I'd like to cover a few quick items. This afternoon D. H I issued a press release announcing that's 2023 second quarter financial results.
Releases available on the company's website at D. H I group Dotcom. This call is being broadcast live over the Internet for all interested parties on the webcast will be archived on the Investor Relations page of the company's web site.
I want to remind everyone that during today's call management will make forward looking statements that involve risks and uncertainties. Please note that except for the historical information statements on today's called May constitute forward looking statements within the meaning of the federal Securities laws. These forward looking statements reflect the Jive management's current views can <unk>.
Turning future events in financial performance.
Subject to risks and uncertainties and actual results may differ materially from outcomes contained in any forward looking statements factors.
Factors that could cause these forward looking statements differ from actual results include the risks and uncertainties disgusted the company's periodic reports on Form 10-K, and 10-Q and other filings with the Securities and Exchange Commission.
D H I undertake no obligation to update or revise any forward looking statements.
Lastly, during today's call management will be referring to specific financial measures, including adjusted EBITDA adjusted EBITDA margin and adjusted diluted earnings per share that are not prepared in accordance with U S gap.
Information about these.
These non-GAAP measures to them directly comparable GAAP measures are available.
Release, a copy of which are fine.
On our website.
I'm not sure.
And now trying to call over to our daily C O D H I V.
Thank you Todd good afternoon, everyone and welcome to our 2023 second quarter earnings Conference call. We appreciate your time today as we discuss our financial performance and future outlook.
First let's discuss the state of the market.
According to <unk> the tech sectors unemployment rate was 2.3% in June demonstrating continued demand for technology professionals.
This coincided with a decline in actual tech job postings with second quarter numbers significantly lower than in the previous year.
The ongoing uncertainty in the economy continues to suppress most hiring plans.
Despite the challenging current environment the longer term view suggests companies will continue to invest in technology initiatives.
Are too subscription offerings dice, and clearancejobs provide staffing and recruiting firms large enterprises and government agencies with the tools necessary to find attract and hire the best technologist for their job openings from our 7.4 million candidate profiles.
Now, let me dig into our performance during the second quarter.
In the second quarter or total revenue grew by 4% a slower pace compared to the 12 per cent growth we achieved in the first quarter.
Nice revenue for the quarter decreased 2% year over year, while CJ revenue increased 20%.
The decrease in dice revenue was the result of lower new business bookings over the past three quarters and significantly lower transactional revenue, which we believe is a reflection of the uncertain economic environment, we have faced during that time.
Excluding transactional revenue recurring dice revenue increased in the second quarter.
Dice new business teams continue to see smaller pipeline volume.
More intense Neil scrutiny in sales cycle.
We remain laser focused on those firms that have significant tech hiring needs right now because they're technology roadmaps are less likely to be impacted by the economy.
The four industry used to have elevated technology job postings today are aerospace.
Business consulting.
Financial services and health care.
In the second quarter, we brought on new dice clients like Federal Emergency management agency or FEMA Rutgers.
Rutgers University.
Global accounting network.
Additionally, Dyson landed one of the oldest and largest automotive manufacturers in the United States and the automotive giant is now part of our new account special handling program.
Our average dice annual contract value increased 9% year over year and was down 1% sequentially.
This is a challenging economic environment today, but we expect companies across all industries to increase their investment in technology initiatives over the long run.
Clearancejobs bookings for the quarter were negatively affected by the debt ceiling negotiations and it's implied threat of the government delaying payment to military contractors.
Nevertheless, during the quarter CJ added several new clients, including Korn Ferry trio Federal and rocket Communications <unk>.
We continue to expect the larger fiscal 2023 defense budget to have a positive impact on the volume of government projects and the corresponding demand for cleared tech professionals to fulfill them.
Moving onto account management.
Revenue renewal rates in the second quarter slipped from the high nineties, we reported last year.
For the quarter or days and CJ revenue renewal rates were 84% and 90 per cent respectively.
Retention rates for the quarter for dice and C J were 101% and 110% respectively Lamb.
Last year, many of our clients ran out a profile of using their subscriptions and had to pop up during the second quarter, which created a tough comparable for these metrics.
We are seeing our customers return to a profile consumption pattern consistent with the lower number of tech job postings.
The attrition we have seen continues to be concentrated on clients with less than $10000 in annual spend these are generally smaller firms.
Moving onto EBITDA during the second quarter, we delivered a 23% adjusted EBITDA margin and announced and organizational restructuring intended to streamline our team structure and improve our operating margins.
The net result was a reduction of our workforce by approximately 10%.
This restructuring primarily targeted mid level management, including sales and engineering positions, which tend to have higher compensation.
The restructuring is expected to generate annual cost savings of approximately $8 million to $10 million and those savings will be evident in our third quarter results.
We continue to focus on strengthening our industry, leading product offerings to better penetrate our large market opportunities.
For dice during the quarter, we introduced a new feature called apply distribution.
This feature allows us to Algorithmically change the order in which job postings are displayed to candidates to promote those postings that have a lower number of applications.
We believe this new feature will benefit both the clients and candidates alike.
Required jobs, we introduced the ability to add comments throughout the platform, allowing for more engagement between recruiters and candidates. This is our first true C. J community feature.
We're also excited to announce that are C. J native mobile app will be available in the third quarter after a year and a half of development.
The timing is ideal to launch this app as professionals in the security space are now more receptive to managing their careers on mobile devices than at any time in the past.
During the second quarter. We also continue to focus on expanding our tech professional community through our brand advertising campaigns. These.
These campaigns helped drive roughly 45000, new dice candidate registrations each month during the quarter.
As a result, we have 6.1 million dice members and they need 1.7 million visits each month to our platform.
Adding tech professionals to our marketplaces attracts more employers, which in turn makes our platforms more valuable to tech professionals, creating a virtuous circle.
During the second quarter, we also announced the arrival of our new Chief Marketing Officer, Amy Hydro stock Amy.
Amy brings a wealth of experience as a hands on forward thinking marketer and <unk> software companies and two sided marketplaces.
She previously served as the CMO at Passado, all tricks and career builder earlier in her career.
We look forward to Amy's leadership, and taking our product positioning go to market strategy and brand development to the next level of sophistication.
In summary, we acknowledge the challenges posed by the uncertain economic landscape, but remain confident in our ability to adapt and grow.
With our strong market position ongoing product enhancements ineffective expense management, we are well positioned to navigate the current economy and continue our path to higher growth is the macro economic environment improves.
On that note, let me turn the call over to Kevin who will take you through our financials and our guidance and then we'll take any questions you may have Kevin.
Thank you are in good afternoon, everyone.
Let me take you through our financial results for the quarter.
We reported total revenue of $38.5 million, which was flat on a sequential basis and 4% year over year.
Total bookings for the quarter with $32.3 million down 9% year over year.
Geiser Avenue was $26.3 million, which was down two per cent, both sequentially and year over year.
Dice bookings were $21.8 million down 15% year over year.
We ended the quarter with 6007 dice for treatment package customers, which is down 3% from last quarter and down six per cent euro per year or average annual revenue per dice recruitment package customers was down 1% sequentially and uhm, 9% year over year to 15.
<unk> $534.
<unk> 90 per cent of dice revenue is recurring and comes from annual or multiyear contracts.
For the quarter or dice revenue renewal rate was 84% in our retention rate was 101%.
Clearancejobs or Avenue was $12.3 million, 5% sequentially and 20% year over year bookings for C J $10.5 million up 8% you're over a year.
We ended the second quarter with 2069 C. J recruitment package customers, which is flat on a sequential basis and 5% year over year.
Average annual revenue per C. Gay recruitment package customer was up two per cent over last quarter and up 11% year over year $20842.
Proximately, 90% of C. J revenue is recurring and comes from annual contracts.
For the quarter R. C. J revenue renewal rate was 90% and see James retention rate was strong at 110%.
Outstanding retention rate demonstrates the continued value C. J delivers in the recruitment of cleared professionals.
Turning the operating expenses second quarter operating expenses were $38.6 million compared to $36.2 million in the year ago quarter.
This quarter includes $2.1 million in restructuring charges.
The restructuring include it a reduction of our workforce by approximately 10% and is expected to generate annual cost savings of approximately $8 million to $10 million.
Excluding the restructuring charges operating expenses were approximately flat year over year.
We estimate that total restructuring charges will be approximately $2.4 million with $2 million related to employee severance and benefits and $400000 in non-cash charges related to the acceleration of share based awards.
<unk> $600000 of the 2 million in February and benefits was paid in the second quarter with the remaining $1.4 million to be paid through the remainder of 2023, we anticipate the full effect of the restructuring will be visible when we announce our third quarter results.
For the quarter, we had an income tax benefit of $677000 on a lost before taxes of $804000 our tax rate for the quarter differed from our normal expected rate of 25 per cent due primarily to a tax benefit from research tax rate tax credits of approximately.
$400000.
We recorded a net loss of $127000 or zero cents per diluted share.
For the prior year quarter, we reported net income of $1.5 million or three cents per diluted share <unk>.
Justin diluted earnings per share for the quarter was two cents compared to one cent for the prior year quarter.
<unk> shares outstanding for the quarter or 43.5 million compared to $47 million in the prior year quarter.
Adjusted EBITDA for the second quarter increased 12% to $8.7 million a margin of 23 per cent.
<unk> $7.8 million and a margin of 21% in the second quarter a year ago.
Operating cash flow for the second order was $8.1 million, which was $2.2 million lower than the prior year period.
From a liquidity perspective at the end of the quarter, we had $2.7 million in cash and total that are $43 million outstanding under our 100 million dollar revolver <unk>.
Total debt outstanding decreased $3 million from the 46 million at the end of the first quarter.
We continue to target approximately one times leverage for the business.
Deferred revenue at the end of the quarter was $53.4 million down 1% from the second quarter of last year or.
Total committed contract backlog at the end of the quarter was $118 million, which was up 13% from the end of the second quarter last year.
Short term backlog was $93.2 million at the end of the second quarter, an increase of $7 million or 8% year over year.
Longterm backlog that is revenue to be recognized and 13 or more months was $24.6 million at the end of the quarter, an increase of $6.7 million or 37% from the prior year.
During the quarter under our share buyback program, we purchased approximately 920000 shares for $3.4 million, an average price of $3.69 per share.
As a reminder.
Current 10 million dollar program began in the first quarter and runs through February 2024.
Of the $10 million authorized 4.8 million remained available under the program at the end of the quarter.
As aren't mentioned in the current economic uncertainty continues to impact our new business games as such we now expect a whole year 2023 total revenue to grow in the range of 3% to 4% with third quarter revenue expect it to be flat ear over a year give.
Given the current environment, we will continue to manage our expenses closely as we focus on EBITDA and cash flow for the balance of the year.
For the third quarter, we expect adjusted EBITDA margins of approximately 24% with margins expected to expand to 25% as we exit the year.
To wrap up while the current hiring environment is impacting our growth we expect companies across all industries to continue their investment in technology initiatives, which will drive increased demand for our products and services as the economy improves in the meantime, we're focused on improving our industry leading offerings.
And our go to market execution, while doing so in a more efficient and profitable manner and with that let me turn the call back to art.
Thank you Kevin I'd like to thank all of our employees again for their hard work. This past quarter is a pleasure to be part of such a great team with that we're happy to take your questions.
We will now begin the question and answer session.
To ask a question you May press Star then one on your telephone keypad.
If you're using a speaker phone please pick up your handset before pressing the keys to withdraw your question. Please press Star then too at this time, we will pause momentarily to assemble our roster.
Our first question comes from Zack comments would be Riley. Please go ahead.
Hi can you hear me.
We sure can.
Yes.
Thanks for taking my question and I was wondering if you could provide additional disclosure about the bookings in the ring you all assumptions for the third quarter going forward.
We don't provide the specific bookings or renewal assumptions, we do provide revenue guidance, which is that roughly flat year over year revenue growth.
Yeah, Yeah, Okay. Thank you.
And.
Can you might also discuss it a little bit about the feedback that you'll be sharing from customers regarding the tech hiring needs and how <unk>.
Going forward the sentiment is going to change thank you.
Absolutely so I'll take that one and the answer is if you looked at the comp T job postings statistics for the first half of.
2023, and compare them to the exact same period last year, you would see that the number of tech postings is down 49%, it's actually larger in terms of that dip for the second quarter, it's 52%.
Do believe that a lot of companies are scrutinizing their hiring plans in general, but especially for technology professionals, because they are relatively expensive.
If you looked at our salary report in January of this year, you know that the average tech professional salary compensation is about $111000. So I think that people are being cautious.
I do believe that the comps become easier over the course of the rest of this year in terms of that swing of tech job postings, but our job really is to make sure that we're focused on those industries that are still hiring aggressively and as I mentioned in my portion of.
The discussion we believe those continue to be aerospace business consulting.
Banking and also the health care industry, and we have seen hiring patterns continue aggressively in those industries. It's just that it's not all of the 16 industries that we'd normally track and I'd say that our overall pipeline volume is down compared to last year. So again.
How I would describe the overall environment I do believe that as we get closer to the end of the year companies start to solidify their plans for their budgets and therefore, they start to hire again. According to those plans. So we have to wait and see how people view 2002.
24, but it seems to be getting better from the the economic statistics that are rolling in each day.
Sorry for my long winded answer.
Got it got it. Thank you. Thanks for the answer and my last question will be you mentioned, a little bit about the structure changes to your sales team and I was wondering if you could <unk>.
Talk a little bit about how that is going to change the girls in the company or the model moving forward and that's it. Thank you.
I think <unk> I appreciate that question and as part of a restructure we did.
Terminate eliminate certain sales positions they were for the most part all in dice commercial accounts, new business teams and that's because we were seeing a softening of significant softening of demand in that teams specifically, we have three different new business teams. Those are the current jobs new business team.
<unk> commercial accounts, new business team and the dice staffing recruiting consulting business team I think there might have been a couple of terminations that word to those other teams, but it was almost entirely focused on the commercial accounts team again because of the softness and pipelines softness in demand.
And that we're seeing in the environment currently.
Got it thank you.
Thank you.
Excuse me. The next question is from Gary pressed a piano with Barrington Research. Please go ahead.
Hi, I'm, Kevin how are Ya.
Fantastic, how 'bout yourself, Gary just trying to get through earning Susan.
Brian anyway interesting statistics that postings were down 49 per cent I believe you are 52% two to four tech jobs.
Alright, and it looks like.
Awesome.
I'm sorry.
It was at a real peak last year, there was a real I'd say aggressive pushed the higher technology professionals coming out of Covid I mean, it's kind of hard to even think about it being over a year back but coming we were just literally coming out of all the.
Covid effects of the economy and a big push in second order, where even in the month of May which was the peak we almost got to 700000 tech job postings and that compares to the roughly bumping around in 200 to 250000 tech job postings this year each month.
So I guess the question I would have is all the metrics that you gave I mean I'm looking at them.
<unk> was down 15% in bookings postings were down 52%.
You know does that in for that despite what's going on here you are still gaining market share.
Yeah, you know when a market that for the time being as drastically declining and then the other question I would have is dramatically declining I'm sorry. The other question I have how much of this is really the accounts that are $10000 or less you did mention that the dice recurring revenue was up and I'm more of the program.
Revenue was the one that hit you so I don't know.
Out there to unpack, but.
Could you maybe comment on that.
Oh those are the right questions I'll tell you that the way I look at it is that we have gained.
Some market share during this period of time like you said comparing our bookings statistic. The number of tech postings that declined year over year, I'd say, the bigger kind of drivers for our business model had been R. <unk>.
<unk> account management teams ability to renew customers. So it's a lot easier and you'll see those it's show up on the statistics to renew a customer when they've already experienced dice or clitoris jobs or revenue renewal rates are fair.
Fairly I'd say very reasonable and our retention rates are very reasonable really the part of the business. That's being repressed depressed is the new business activity in specific to commercial accounts I think it's a lot more difficult to sell a CFO and the C. A F. O's are getting involved with these.
Discussions this year when the item hasn't been budgeted in 2023 and you have to show that there is a <unk>.
Your value proposition without them, having experienced it yet so that's really the phenomenon that we're seeing today, we're seeing account management successfully renewing customers that have enjoyed dice service for years, it's a lot tougher to convince a new customer that's not <unk>.
<unk> that you you should be on the platform and it solves an immediate urgent need I'd also say one of the things that is very apparent from this quarter's bookings is that we lost about half of our traditional transactional revenue that we would.
And a quarter I view transactional revenue and that is you know those that those dollars associated with pilots and sourcing services are career events to be problem solving revenues for revenue and transactional revenue that is associated with urgency and there's just <unk>.
Less urgency in terms of hiring right now so again, we also saw a dip in.
Actual revenue that.
Affected our performance and results that were released okay.
And then in terms of.
The expense recapture.
How how does that how is that gonna run Kevin I mean, if you do 8 million. It should we look at it or 2 million next quarter 2 million Q4, and then.
2 million in the first two quarters of this year is that is that a good way to think about it.
Yeah, it it really nice.
It is because the vast majority of that restructuring was related to reducing head count and so that's exactly it.
Eight to 10 million a year would be two two and a half million a quarter. So that's exactly right.
Okay, and then lastly premiere it's always hard when companies go through these kinds of things believe me I've been through a lot of them myself.
As far as the sales force outside of the new business teams or new business team.
Are you still allowing the sales people to go out travel meet with the clients.
Anything change there, except maybe staying at less expensive hotels for instance, things or things of that nature.
No we are absolutely, allowing ourselves team to visit customers visit prospect and we encourage it and they're really you know has been a shift in mentality I'd say with a lot of customers and prospects, where they would say hey. This has worked in the last coupla years, just doing this virtually so don't you don't have to me.
The extra effort, but we strongly encourage our sales team to make that extra effort. We believe that these in person meetings allow for a much richer discussion and better relationships ultimately.
Okay. Thank you.
Thank you Gary really appreciate it.
The next question is from Kevin Nancy with Lake Street Capital. Please go ahead.
Hey, guys. Thanks for taking my questions, maybe going back to the first one I've never renewal rates and I know you can't you. They don't give guidance around that but was there a cadence you saw in the <unk> you know on the 85 and 90 per cent of those get better as the quarter progressed or are they kinda maintained those those rates throughout the quarter.
They they were pretty much consistent with each month throughout the quarter Uhm, we have talked about it last quarter that we started to see a little bit of a dip towards the end of the quarter. So kind of that March to April tomato June it was it was pretty consistent across.
The <unk> the <unk> the months.
Okay. Thanks, and then I guess secondarily on clearance jobs in the opening remarks, you guys can talk to about potential.
Potential benefits from the increased defense spending and a like have you started to see that or is that still monitor quarters away or is that something you've seen in the past where the spending goes up and then the green shoots follower helped me understand that a little more.
So yeah, that's a great question and let me break it down by saying the Big picture is that clearance jobs has traditionally not been correlated with GBP growth has just been correlated with the status of the defense budget. So if the defense budget traditionally grew at about 3% to 4% we knew that <unk>.
<unk> still had strong growth prospects built into that next sales year.
In this particular case, we had a situation where the defense budget was actually signed by President bite in December So it took a little while for it to actually get signed when it did Congress overrode the President's request for a budget and basically doubled it saying that.
No we'd like you to spend 10% more this next year now that all sounds great. We came into 2023, feeling pretty good the procurement process had to kind of start.
Start up at that point and Nevertheless, what we saw was even though projects were now being black two contractors. They were they were being put out forbid the contractors were very cautious about their hiring plans in advance of getting these projects find.
With the government and the reason being is that they all believed that if the debt negotiations stalled out the government would take the action of slow pain. The contractors because that's one way that they could have preserved their their funds.
And we believe that that's you know turning right now are we seeing stark evidence of it no I still think it's a little bit.
Slow compared to where it should be but we do believe that ultimately contracts are going to win awards, they're gonna need clear professionals to fulfill the work and that's the basis of our value proposition. So again it really comes down to the question of when are these contracts awarded if we see a spurt.
And the award of the contracts that really means that clearancejobs becomes an invaluable tool to bring the people on and then paradoxically dark they're gonna want you know people immediately.
It's almost a binary function.
Contractors when they win a new award they generally want tens to hundreds of individuals as quickly as they can because they're under the clock now to essentially deliver on whatever service or product that they they want as part of the procurement cycle.
Understood. Thanks, a lot guys.
Thank you excellent question, Kevin I really appreciate it.
The next question is from Kevin Lou with Cailloux on company. Please go ahead.
Hey, good afternoon, guys Uhm actually I wanted to follow up on that topic.
Topic, Alright, you also mentioned that the that feeling negotiations did have an impact in the quarter was that related more to what you were just speaking about now in terms of the contract with US you know not moving aggressively with hiring uhm or does it did you guys see any sort of impact to kind of get renewals on on C J or other new business opportunities.
Yeah, I would say that C. J did have a.
A pipeline that grew over the quarter, but people were not willing to sign the contract and they were waiting for the debt negotiations to be done and or for the projects that they were bidding on to be awarded and so we do believe that the pipeline itself is very healthy.
And now it's a matter of getting these projects one so that we can effectively go to the winning bidder and say we've got a solution for how to step up that particular project in and move forward with the program.
Understood whether any.
Do you need to know that we're in fact, it or does this all relate to kind of new business procedure.
No I'd say that the renewal rate really held up very well and I would say retention rate, which is the contract value post the renewal activity actually was.
110%, we consider that to be very very strong in terms of performance. So I would say existing customers stayed with us and they took larger contracts as they have done traditionally over the past several quarters. So renewal activity is really associated with ongoing.
X and new business is associated with new awarded projects and that's where we were seeing a little bit of a deficit.
Makes sense and then switching over to the diet side, you know obviously, it's <unk>.
Challenging environment out there I was wondering if the toughness is more pronounced with kind of your I T staffing base versus your commercial account or if you're saying you know <unk> more pronounced weakness in either of those groups.
Oh, that's a great question I would say it is definitely affecting the commercial accounts new business team much more so than staff and recruiting consulting new business team and in fact, we didn't perform to our intended levels for the staffing recruiting new business team, but I.
Describe it as one of the better performing your business teams when I talk about it internally and I think it logically makes sense that if you're a commercial accounts customer.
And you want to take less risk in terms of your hiring plans you can go to a staff and recruiting agency and that person would show up in one to two weeks and you can.
Either retained that person through the staffing recruiting agency or decide to dismiss them. If you get into any kind of trouble. So it's a way of Derisking your hiring in general and an uncertain time and so again, we've seen relatively stronger performance for the staffing and recruiting new business team.
Even in second quarter.
Understood and then it just in terms of the new corporate branded offering that you guys have denounced of it you know.
Here was wondering how the pipeline that's built up for that and kind of customers appetite to move forward with opportunities is this your progressive.
So I'd say that the customers appetite still remains strong and nevertheless, because of the caution that's in the environment and the hiring cycle. What we've done is we've started to bundle. These brand new products in with the basic subscription and we're not seeing the I would say the subscription pre.
Nice that we wanted for branding itself and company profiles, but we think that that's the right thing to do at this point to make sure that people see the value of it and then as the economic cycle and expansion happens in the future we could essentially adjust those prices upward.
Where they should be.
Great and then just lastly, it for me it looked like <unk>.
<unk> the appointment was pretty evenly split between by that.
Pay down this Claire can you just talk about kind of how do you plan to allocate between those two as we move through the remainder of the year.
Sure Uhm will are buyback program is great based and it's also based on average daily trading volume. So it's really dictated by the market and how the stock perform so we will continue to evaluate the volatility of our stock. We're also very aware that the the cost.
<unk> has gone up two and a half three fold versus 18 months ago and so we look at that I would say on a very frequent basis as far as what the best use of capital is in this environment.
I'm paying back <unk> or buying back shares in and we don't have any specific plan other than we do evaluate it frequently and we will we will allocate to what we think is the highest R O y.
Like I said, thanks for taking the question.
Thank you Kevin.
The next question is a follow up from Gary <unk> Barrington Research. Please go ahead.
Yeah, Hey, you know.
I just kind of looked at your guidance for revenues and you know what you're saying your margins are gonna be in back of the envelope. It doesn't really look like you know at least I'd have to lower my EBITDA numbers.
A year I guess the question I have an <unk> again. These are my numbers, but just in terms of how you're going to run the company on a go forward basis. I mean, you know it always seems you had the ability to flex the margins with with your expenditures I mean are you taken another tech out here that when things turn around.
That possibly you could do more with less and maybe look at the expense structure little more stringently to try and drive more margin expansion.
Yes, absolutely I think that's a perfect interpretation, we believe that the restructuring that we did in the month of May actually makes us more efficient as a technology organization and technology was really <unk>.
75, three quarters of the restructuring that we did in terms of the people count and so we have actually experienced a better teen dynamic we've experienced a more efficient release process and so we do believe that that is very very possible to move forward with that.
Extent structure as we grow the company again.
Okay. Thank you.
Thank you <unk>.
This concludes our question and answer session I would like to turn the conference back over to art Zaley for any closing remarks.
Yes, Thank you and thanks to everyone for joining us today as always if you have any questions about our company or would like to speak with management. Please reach out to Todd currently and he will help arrange a meeting thanks for your interest in D. H I group and have yourself a great day.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
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