UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________________________________FORM 10-Q
(Mark One)
|
| | | | |
R☑
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterquarterly period ended September 30, 2017March 31, 2023
OR
|
| | | | |
£ ☐ | TRANSITION PERIOD PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE TRANSITION PERIOD FROM TO
Commission File Number: 001-33584
_________________________________________________________________________________________
DHI Group, Inc.
(Exact name of Registrant as specified in its Charter)
______________________________________________
|
| | | | | | | |
Delaware | | 20-3179218 |
(State or other jurisdiction of incorporation or organization)
| | (I.R.S. Employer Identification No.)
|
6465 South Greenwood Plaza, Suite 400 | | 80111 |
1040 Avenue of the Americas, 8th Floor Centennial, Colorado | | (Zip Code) |
New York, New York | | 10018 |
(Address of principal executive offices) | | (Zip Code) |
(212) 725-6550448-6605
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
______________________________________________ _______________________________________________ | | | | | | | | |
Securities registered pursuant to Section 12(b) of the Act: |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Stock, par value $0.01 per share | DHX | New York Stock Exchange |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes R☑ No £☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes R☑ No £☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer £☐Accelerated filerR☑Non-accelerated filer£
☐ Smaller Reporting Company£ ☑Emerging Growth Company£☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. £☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes £☐ No R☑
As of October 27, 2017,May 5, 2023, there were 50,243,86947,430,469 shares of the registrant’s common stock, par value $.01 per share, outstanding.
DHI GROUP, INC.
TABLE OF CONTENTS
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PART I. | FINANCIAL INFORMATION | | |
Item 1. | | | |
| Condensed Consolidated Balance Sheets as of September 30, 2017March 31, 2023 and December 31, 20162022 | | |
| Condensed Consolidated Statements of Operations for the three and nine monththree-month periods ended September 30, 2017March 31, 2023 and 20162022 | | |
| Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine monththree-month periods ended September 30, 2017March 31, 2023 and 20162022 | | |
| Condensed Consolidated Statements of Stockholders' Equity for the three-month periods ended March 31, 2023 and 2022 | | |
| Condensed Consolidated Statements of Cash Flows for the nine monththree-month periods ended September 30, 2017March 31, 2023 and 20162022 | | |
| Notes to Condensed Consolidated Financial Statements | | |
| | | |
Item 2. | | | |
| | | |
Item 3. | | | |
| | | |
Item 4. | | | |
| | | |
PART II. | OTHER INFORMATION | | |
Item 1. | | | |
| | | |
Item 1A. | | | |
| | | |
Item 2. | | | |
| | | |
Item 5. | | | |
| | | |
Item 6. | | | |
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SIGNATURES | | |
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | |
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | |
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | |
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | |
PART I
ITEM 1. Financial Statements
DHI GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands, except per share data) | | | | | | | | | | | |
| March 31, 2023 | | December 31, 2022 |
ASSETS | | | |
Current assets | | | |
Cash | $ | 5,368 | | | $ | 3,006 | |
Accounts receivable, net of allowance for doubtful accounts of $985 and $1,374 | 24,980 | | | 20,494 | |
Prepaid and other current assets | 3,815 | | | 4,294 | |
Total current assets | 34,163 | | | 27,794 | |
Fixed assets, net | 21,879 | | | 21,252 | |
Capitalized contract costs | 8,994 | | | 9,677 | |
Operating lease right-of-use assets | 6,088 | | | 6,581 | |
Investments | 5,968 | | | 5,646 | |
Acquired intangible assets | 23,800 | | | 23,800 | |
Goodwill | 128,100 | | | 128,100 | |
Other assets | 4,017 | | | 3,854 | |
Total assets | $ | 233,009 | | | $ | 226,704 | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | |
Current liabilities | | | |
Accounts payable and accrued expenses | $ | 12,403 | | | $ | 23,818 | |
Deferred revenue | 58,079 | | | 50,121 | |
Income taxes payable | 280 | | | 34 | |
Operating lease liabilities | — | | | 105 | |
Total current liabilities | 70,762 | | | 74,078 | |
Deferred revenue | 765 | | | 743 | |
Operating lease liabilities | 8,007 | | | 8,428 | |
Long-term debt | 46,000 | | | 30,000 | |
Deferred income taxes | 4,667 | | | 5,515 | |
Accrual for unrecognized tax benefits | 829 | | | 769 | |
Other long-term liabilities | 727 | | | 932 | |
Total liabilities | 131,757 | | | 120,465 | |
Commitments and Contingencies (Note 10) | | | |
Stockholders’ equity | | | |
Convertible preferred stock, $.01 par value, authorized 20,000 shares; no shares issued and outstanding | — | | | — | |
Common stock, $.01 par value, authorized 240,000; issued: 78,833 and 76,442 shares, respectively; outstanding: 48,117 and 47,367 shares, respectively | 790 | | | 766 | |
Additional paid-in capital | 254,495 | | | 251,632 | |
Accumulated other comprehensive loss | (331) | | | (481) | |
Accumulated earnings | 29,197 | | | 28,405 | |
Treasury stock, 30,716 and 29,075 shares, respectively | (182,899) | | | (174,083) | |
Total stockholders’ equity | 101,252 | | | 106,239 | |
Total liabilities and stockholders’ equity | $ | 233,009 | | | $ | 226,704 | |
See accompanying notes to the condensed consolidated financial statements. | | | |
|
| | | | | | | |
| September 30, 2017 | | December 31, 2016 |
ASSETS | | | |
Current assets | | | |
Cash | $ | 22,086 |
| | $ | 22,987 |
|
Accounts receivable, net of allowance for doubtful accounts of $1,769 and $3,181 | 33,146 |
| | 43,148 |
|
Income taxes receivable | 2,141 |
| | 731 |
|
Prepaid and other current assets | 4,482 |
| | 3,312 |
|
Total current assets | 61,855 |
| | 70,178 |
|
Fixed assets, net | 17,119 |
| | 16,610 |
|
Acquired intangible assets, net | 47,440 |
| | 49,120 |
|
Goodwill | 176,641 |
| | 171,745 |
|
Deferred income taxes | 365 |
| | 306 |
|
Other assets | 2,584 |
| | 2,136 |
|
Total assets | $ | 306,004 |
| | $ | 310,095 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | |
Current liabilities | | | |
Accounts payable and accrued expenses | $ | 20,572 |
| | $ | 20,220 |
|
Deferred revenue | 81,823 |
| | 84,615 |
|
Income taxes payable | 1,302 |
| | 3,467 |
|
Total current liabilities | 103,697 |
| | 108,302 |
|
Long-term debt, net | 68,402 |
| | 84,760 |
|
Deferred income taxes | 7,909 |
| | 7,901 |
|
Accrual for unrecognized tax benefits | 4,871 |
| | 2,513 |
|
Other long-term liabilities | 2,809 |
| | 2,736 |
|
Total liabilities | 187,688 |
| | 206,212 |
|
Commitments and contingencies (Note 7) |
| |
|
Stockholders’ equity | | | |
Convertible preferred stock, $.01 par value, authorized 20,000 shares; no shares issued and outstanding | — |
| | — |
|
Common stock, $.01 par value, authorized 240,000; issued 82,880 and 81,989 shares, respectively; outstanding: 50,265 and 49,591 shares, respectively | 829 |
| | 820 |
|
Additional paid-in capital | 373,203 |
| | 366,247 |
|
Accumulated other comprehensive loss | (27,623 | ) | | (32,276 | ) |
Accumulated earnings | 48,018 |
| | 44,078 |
|
Treasury stock, 32,615 and 32,398 shares, respectively | (276,111 | ) | | (274,986 | ) |
Total stockholders’ equity | 118,316 |
| | 103,883 |
|
Total liabilities and stockholders’ equity | $ | 306,004 |
| | $ | 310,095 |
|
See accompanying notes to the condensed consolidated financial statements.
DHI GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share amounts)
|
| | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| 2017 | | 2016 | | 2017 | | 2016 |
Revenues | $ | 52,424 |
| | $ | 56,073 |
| | $ | 157,014 |
| | $ | 172,032 |
|
Operating expenses: | | | | | | | |
Cost of revenues | 7,616 |
| | 7,943 |
| | 22,681 |
| | 24,557 |
|
Product development | 6,423 |
| | 6,018 |
| | 19,230 |
| | 19,323 |
|
Sales and marketing | 19,988 |
| | 19,425 |
| | 59,638 |
| | 58,573 |
|
General and administrative | 9,454 |
| | 10,101 |
| | 30,779 |
| | 32,822 |
|
Depreciation | 2,576 |
| | 2,478 |
| | 7,703 |
| | 7,639 |
|
Amortization of intangible assets | 554 |
| | 1,570 |
| | 1,686 |
| | 6,106 |
|
Impairment of goodwill | — |
| | 15,369 |
| | — |
| | 15,369 |
|
Impairment of fixed and intangible assets | 2,226 |
| | 9,252 |
| | 2,226 |
| | 9,252 |
|
Disposition related and other costs (Note 9) | 1,049 |
| | — |
| | 2,236 |
| | 3,347 |
|
Total operating expenses | 49,886 |
| | 72,156 |
| | 146,179 |
| | 176,988 |
|
Operating income (loss) | 2,538 |
| | (16,083 | ) | | 10,835 |
| | (4,956 | ) |
Interest expense | (1,173 | ) | | (901 | ) | | (2,777 | ) | | (2,593 | ) |
Other expense | (3 | ) | | (1 | ) | | (10 | ) | | (33 | ) |
Income (loss) before income taxes | 1,362 |
| | (16,985 | ) | | 8,048 |
| | (7,582 | ) |
Income tax (benefit) expense | 304 |
| | (144 | ) | | 3,828 |
| | 3,294 |
|
Net income (loss) | $ | 1,058 |
| | $ | (16,841 | ) | | $ | 4,220 |
| | $ | (10,876 | ) |
| | | | | | | |
Basic earnings (loss) per share | $ | 0.02 |
| | $ | (0.35 | ) | | $ | 0.09 |
| | $ | (0.22 | ) |
Diluted earnings (loss) per share | $ | 0.02 |
| | $ | (0.35 | ) | | $ | 0.09 |
| | $ | (0.22 | ) |
| | | | | | | |
Weighted-average basic shares outstanding | 48,021 |
| | 47,719 |
| | 47,858 |
| | 48,596 |
|
Weighted-average diluted shares outstanding | 48,502 |
| | 47,719 |
| | 48,397 |
| | 48,596 |
|
| | | | | | | | | | | |
| Three Months Ended March 31, |
| 2023 | | 2022 |
Revenues | $ | 38,620 | | | $ | 34,334 | |
| | | |
Operating expenses: | | | |
Cost of revenues | 4,912 | | | 4,099 | |
Product development | 4,694 | | | 3,942 | |
Sales and marketing | 16,060 | | | 13,941 | |
General and administrative | 8,208 | | | 7,766 | |
Depreciation | 4,173 | | | 3,958 | |
Total operating expenses | 38,047 | | | 33,706 | |
Operating income | 573 | | | 628 | |
Income from equity method investment | 171 | | | 155 | |
Interest expense and other | (798) | | | (245) | |
Income (loss) before income taxes | (54) | | | 538 | |
Income tax benefit | (514) | | | (763) | |
Net income | $ | 460 | | | $ | 1,301 | |
| | | |
Basic earnings per share | $ | 0.01 | | | $ | 0.03 | |
Diluted earnings per share | $ | 0.01 | | | $ | 0.03 | |
| | | |
Weighted-average basic shares outstanding | 43,886 | | | 44,702 | |
Weighted-average diluted shares outstanding | 45,240 | | | 47,170 | |
See accompanying notes to the condensed consolidated financial statements.
DHI GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(unaudited)
(in thousands)
|
| | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| 2017 | | 2016 | | 2017 | | 2016 |
Net income (loss) | $ | 1,058 |
| | $ | (16,841 | ) | | $ | 4,220 |
| | $ | (10,876 | ) |
| | | | | | | |
Foreign currency translation adjustment | 1,782 |
| | (2,221 | ) | | 4,653 |
| | (8,857 | ) |
Total other comprehensive income (loss) | 1,782 |
| | (2,221 | ) | | 4,653 |
| | (8,857 | ) |
Comprehensive income (loss) | $ | 2,840 |
| | $ | (19,062 | ) | | $ | 8,873 |
| | $ | (19,733 | ) |
| | | | | | | | | | | |
| Three Months Ended March 31, |
| 2023 | | 2022 |
Net income | $ | 460 | | | $ | 1,301 | |
| | | |
Other comprehensive income: | | | |
Foreign currency translation adjustment | 150 | | | 8 | |
Total other comprehensive income | 150 | | | 8 | |
Comprehensive income | $ | 610 | | | $ | 1,309 | |
See accompanying notes to the condensed consolidated financial statements.
DHI GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(unaudited)
(in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Convertible Preferred Stock | | Common Stock | | Additional Paid-in Capital | | Treasury Stock | Accumulated Earnings | | Accumulated Other Comprehensive Income (Loss) | | Total |
Shares Issued | | Amount | | Shares Issued | | Amount | | Shares | | Amount | |
Balance at December 31, 2022 | — | | | $ | — | | | 76,442 | | | $ | 766 | | | $ | 251,632 | | | 29,075 | | | $ | (174,083) | | | $ | 28,405 | | | $ | (481) | | | $ | 106,239 | |
Net income | | | | | | | | | | | | | | | 460 | | | | | 460 | |
Other comprehensive income - translation adjustments | | | | | | | | | | | | | | | | | 150 | | | 150 | |
Stock-based compensation | | | | | | | | | 2,887 | | | | | | | | | | | 2,887 | |
Restricted stock issued | | | | | 1,107 | | | 11 | | | (11) | | | | | | | | | | | — | |
Performance-Based Restricted Stock Units eligible to vest | | | | | 1,288 | | | 13 | | | (13) | | | | | | | | | | | — | |
Restricted stock forfeited or withheld to satisfy tax obligations | | | | | (4) | | | — | | | — | | | 386 | | | (2,278) | | | | | | | (2,278) | |
Performance-Based Restricted Stock Units forfeited or withheld to satisfy tax obligations | | | | | — | | | — | | | — | | | 512 | | | (3,017) | | | | | | | (3,017) | |
Purchase of treasury stock under stock repurchase plan | | | | | | | | | | | 743 | | | (3,521) | | | | | | | (3,521) | |
Cumulative-effect of new accounting principle (See Note 2) | | | | | | | | | | | | | | | 332 | | | | | 332 | |
Balance at March 31, 2023 | — | | | $ | — | | | 78,833 | | | $ | 790 | | | $ | 254,495 | | | 30,716 | | | $ | (182,899) | | | $ | 29,197 | | | $ | (331) | | | $ | 101,252 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Convertible Preferred Stock | | Common Stock | | Additional Paid-in Capital | | Treasury Stock | Accumulated Earnings | | Accumulated Other Comprehensive Income (Loss) | | Total |
Shares Issued | | Amount | | Shares Issued | | Amount | | Shares | | Amount | |
Balance at December 31, 2021 | — | | | $ | — | | | 73,584 | | | $ | 738 | | | $ | 241,854 | | | 24,828 | | | $ | (150,398) | | | $ | 24,229 | | | $ | (61) | | | $ | 116,362 | |
Net income | | | | | | | | | | | | | | | 1,301 | | | | | 1,301 | |
Other comprehensive income - translation adjustments | | | | | | | | | | | | | | | | | 8 | | | 8 | |
Stock-based compensation | | | | | | | | | 2,235 | | | | | | | | | | | 2,235 | |
Restricted stock issued | | | | | 932 | | | 9 | | | (9) | | | | | | | | | | | — | |
Performance-Based Restricted Stock Units eligible to vest | | | | | 1,773 | | | 17 | | (17) | | | | | | | | | | | — | |
Restricted stock forfeited or withheld to satisfy tax obligations | | | | | (82) | | | (1) | | | 1 | | 417 | | | (2,309) | | | | | | | (2,309) | |
Performance-Based Restricted Stock Units forfeited or withheld to satisfy tax obligations | | | | | (93) | | | (1) | | | 1 | | 356 | | (1,893) | | | | | | | (1,893) | |
Purchase of treasury stock under stock repurchase plan | | | | | | | | | | | 1,302 | | | (7,499) | | | | | | | (7,499) | |
Balance at March 31, 2022 | — | | | $ | — | | | 76,114 | | | $ | 762 | | | $ | 244,065 | | | 26,903 | | | $ | (162,099) | | | $ | 25,530 | | | $ | (53) | | | $ | 108,205 | |
See accompanying notes to the condensed consolidated financial statements.
DHI GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
|
| | | | | | | |
| Nine Months Ended September 30, |
| 2017 | | 2016 |
Cash flows from operating activities: | | | |
Net income (loss) | 4,220 |
| | (10,876 | ) |
Adjustments to reconcile net income to net cash flows from operating activities: | | | |
Depreciation | 7,703 |
| | 7,639 |
|
Amortization of intangible assets | 1,686 |
| | 6,106 |
|
Deferred income taxes | (23 | ) | | (1,977 | ) |
Amortization of deferred financing costs | 642 |
| | 243 |
|
Stock based compensation | 6,275 |
| | 8,750 |
|
Impairment of goodwill | — |
| | 15,369 |
|
Impairment of fixed and intangible assets | 2,226 |
| | 9,252 |
|
Change in accrual for unrecognized tax benefits | 2,358 |
| | 166 |
|
Loss on sale of business | — |
| | 639 |
|
Changes in operating assets and liabilities: | | | |
Accounts receivable | 10,607 |
| | 8,047 |
|
Prepaid expenses and other assets | (1,041 | ) | | (618 | ) |
Accounts payable and accrued expenses | (152 | ) | | (3,430 | ) |
Income taxes receivable/payable | (3,599 | ) | | (1,682 | ) |
Deferred revenue | (3,774 | ) | | (493 | ) |
Other, net | 51 |
| | (123 | ) |
Net cash flows from operating activities | 27,179 |
| | 37,012 |
|
Cash flows used in investing activities: | | | |
Cash received from sale of business | — |
| | 2,429 |
|
Purchases of fixed assets | (10,160 | ) | | (8,461 | ) |
Purchase of cost method investments | (500 | ) | | — |
|
Net cash flows used in investing activities | (10,660 | ) | | (6,032 | ) |
Cash flows used in financing activities: | | | |
Payments on long-term debt | (17,000 | ) | | (26,000 | ) |
Proceeds from long-term debt | — |
| | 17,000 |
|
Payments under stock repurchase plan | — |
| | (26,179 | ) |
Proceeds from stock option exercises | 403 |
| | 2,664 |
|
Purchase of treasury stock related to vested restricted stock and performance stock units | (1,125 | ) | | (2,779 | ) |
Net cash flows used in financing activities | (17,722 | ) | | (35,294 | ) |
Effect of exchange rate changes | 302 |
| | (315 | ) |
Net change in cash for the period | (901 | ) | | (4,629 | ) |
Cash, beginning of period | 22,987 |
| | 34,050 |
|
Cash, end of period | $ | 22,086 |
| | $ | 29,421 |
|
| | | |
| | | | | | | | | | | |
| Three Months Ended March 31, |
| 2023 | | 2022 |
Cash flows from (used in) operating activities: | | | |
Net income | $ | 460 | | | $ | 1,301 | |
Adjustments to reconcile net income to net cash flows from (used in) operating activities: | | | |
Depreciation | 4,173 | | | 3,958 | |
Deferred income taxes | (848) | | | (1,823) | |
Amortization of deferred financing costs | 36 | | | 37 | |
Stock-based compensation | 2,887 | | | 2,235 | |
Income from equity method investment | (171) | | | (155) | |
Change in accrual for unrecognized tax benefits | 60 | | | 93 | |
Changes in operating assets and liabilities: | | | |
Accounts receivable | (4,153) | | | (3,820) | |
Prepaid expenses and other assets | 279 | | | 386 | |
Capitalized contract costs | 683 | | | (483) | |
Accounts payable and accrued expenses | (11,382) | | | (3,941) | |
Income taxes receivable/payable | 247 | | | 954 | |
Deferred revenue | 7,981 | | | 10,640 | |
Other, net | (241) | | | (164) | |
Net cash flows from operating activities | 11 | | | 9,218 | |
Cash flows used in investing activities: | | | |
Purchases of fixed assets | (4,833) | | | (4,091) | |
Net cash flows used in investing activities | (4,833) | | | (4,091) | |
Cash flows from (used in) financing activities: | | | |
Payments on long-term debt | (3,000) | | | (4,000) | |
Proceeds from long-term debt | 19,000 | | | 14,000 | |
Payments under stock repurchase plan | (3,521) | | | (7,499) | |
Purchase of treasury stock related to vested restricted and performance stock units | (5,295) | | | (4,202) | |
Net cash flows from (used in) financing activities | 7,184 | | | (1,701) | |
Net change in cash for the period | 2,362 | | | 3,426 | |
Cash, beginning of period | 3,006 | | | 1,540 | |
Cash, end of period | $ | 5,368 | | | $ | 4,966 | |
| | | |
See accompanying notes to the condensed consolidated financial statements.
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements of DHI Group, Inc. (“DHI” or the “Company” or "we" or "us") have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission.Commission (the "SEC"). Certain information and disclosures normally included in annual audited consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) have been omitted and condensed pursuant to such rules and regulations. In the opinion of the Company’s management, all adjustments (consisting of only normal and recurring accruals) have been made to present fairly the financial position, results of operations and cash flows of the Company for the periods presented. Although the Company believes that the disclosures are adequate to make the information presented not misleading, these financial statements should be read in conjunction with the Company’s audited consolidated financial statements as of and for the year ended December 31, 20162022 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 20162022 (the “Annual Report on Form 10-K”). Operating results for the nine monththree-month period ended September 30, 2017March 31, 2023 are not necessarily indicative of the results to be achieved for the full year.
Preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the period. Management believes the most complex and sensitive judgments, because of their significance to the condensed consolidated financial statements, result primarily from the need to make estimates about the effects of matters that are inherently uncertain. Actual results could differ materially from management’s estimates reported in the condensed consolidated financial statements and footnotes thereto. There have been no significant changes in the Company’s assumptions regarding critical accounting estimates during the nine monththree-month period ended September 30, 2017, except thatMarch 31, 2023.
The Company allocates resources and assesses financial performance on a consolidated basis, as all services pertain to the Company's Tech-focused strategy. As a result, the Company has a single reportable segment, Tech-focused, which includes the Dice and ClearanceJobs brands, as well as corporate related costs. All operations are in the United States and the Company changed its reportable segments inno longer has revenues and long-lived assets, which includes fixed assets and lease right of use assets, outside of the third quarter of 2017 as described in note 11 to the Condensed Consolidated Financial Statements.United States.
2. NEW ACCOUNTING STANDARDS
In May 2014, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2014-09 (“Topic 606”), Revenue from Contracts with Customers. Topic 606 supersedes the revenue recognition requirements in Accounting Standards Codification Topic 605, Revenue Recognition, and requires entities to measure and recognize revenue and the related cash flows it expects to be entitled for the transfer of promised goods or services to customers and requires an entity to recognize the incremental costs of obtaining a contract with a customer as an asset if the entity expects to recover those costs over time. Topic 606 becomes effective for reporting periods beginning after December 15, 2017. Late in 2016, the Company initiated a project team to evaluate the impact of this standard, document the considerations for each revenue stream and begin the implementation process. The analysis identifying areas that will be impacted by the new guidance is substantially complete. As a result of the evaluation performed, the Company expects that there will be certain limited changes to the timing of revenue recognition for job posting and resume search over the contract period, primarily in the Healthcare segment, along with the deferral of certain commission expenses.
DHI will adopt Topic 606 as of January 1, 2018, and expects to use the modified retrospective transition method applied to those contracts which were not completed as of that date. Upon adoption, the Company expects to recognize the cumulative effect of adopting this guidance as an adjustment to the opening balance of retained earnings. Prior periods will not be retrospectively adjusted. The cumulative effect of adoption is not expected to be material related to revenues. The Company is still evaluating the impact of adoption related to incremental costs.
In MarchJune 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting.The Company adopted the standard during the three months ended March 31, 2017. The new standard requires all income tax effects2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of awards to be recognized in the income statement when the awards vest or are settled, rather than in additional paid-in capital. Accordingly, the new standard eliminates the requirement to reclassify excess tax benefits from operating activities to financing activities in the statement of cash flows. Additionally, the Company can now make a policy election toCredit Losses on Financial Instruments. ASU 2016-13 changes how entities will account for forfeitures as they occur. Amendments requiring recognitioncredit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance replaces the current "incurred loss" model with an "expected loss" model that requires consideration of excess tax benefitsa broader range of information to estimate expected credit losses over the lifetime of a financial asset. ASU 2016-13 is effective for interim and tax deficienciesannual reporting periods in the income statement were applied prospectively. The tax effect of awards vested resulted in income tax expense of $0.1 million and $0.9 million during the three and nine months ended September 30, 2017, respectively. The Company recast prior year cash flows to reflect the excess tax benefit as an operating activity, resulting in a reclassification of $0.4 million from “Excess tax benefit over book expense from stock based compensation” to “Income taxes receivable/payable” on the Condensed Consolidated Statements of Cash Flows. The Company will record forfeitures as they occur, rather than estimating in advance.fiscal years beginning after December 15, 2022 for Smaller Reporting Companies. On January 1, 2017,2023, under
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
the modified retrospective transition method as required by the standard, the Company recorded a cumulative-effect adjustment of $0.3 million to decreaseincrease accumulated earnings and increase additional paid-in capitalreduce the allowance for doubtful accounts. Prior period amounts were not adjusted, and will continue to remove estimated forfeitures on all outstanding equity awards after December 31, 2016.
In January 2017,be reported under the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other. The new standard eliminates Step 2 from the goodwill impairment test and now requires the Company to compare the fair value of a reporting unit with its carrying amount. The Company should recognize an impairment chargeaccounting standards in effect for the amount by which the carrying amount exceeds the fair value. The standard is effective for fiscal years beginning after December 15, 2019. In the event an impairment is indicated, the Company will consider early adopting the new impairment standard.period presented.
3. FAIR VALUE MEASUREMENTS
The FASB ASC topic on Fair Value Measurements and Disclosures defines fair value, establishes a framework for measuring fair value and requires certain disclosures for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. As a basis for considering assumptions, a three-tier fair value hierarchy is used, which prioritizes the inputs used in measuring fair value as follows:
•Level 1 – Quoted prices for identical instruments in active markets.
•Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations, in which all significant inputs are observable in active markets.
•Level 3 – Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The carrying amounts reported in the Condensed Consolidated Balance Sheetscondensed consolidated balance sheets for cash, accounts receivable, other assets, accounts payable and accrued expenses and long-term debt approximate their fair values. TheInvestments, non-current that were carried at fair value, prior to the conversion to preferred shares as described in Note 6, used a discounted cash flow technique based on the probability of one or more possible outcomes, based on Level 3 inputs, which inputs and fair value did not change during the long-term debt was estimated using present value techniques and market based interest rates and credit spreads.2022 period prior to the conversion. The estimated fair value of long-term debt is based on Level 2 inputs.
During
Certain assets and liabilities are measured at fair value on a non-recurring basis as they are subject to fair value adjustments in certain circumstances, for example, when there is evidence of impairment. Such instruments are not measured at fair value on an ongoing basis. These assets include equity investments, operating lease right-of-use assets, and goodwill and intangible assets which resulted from prior acquisitions. Items valued using such internally generated valuation techniques are classified according to the third quarterlowest level input or value driver that is significant to the valuation. Thus, an item may be classified in Level 3 even though there may be some significant inputs that are readily observable.
4. REVENUE RECOGNITION
The Company recognizes revenue when control of 2017,the promised goods or services is transferred to our customers at an amount that reflects the consideration which we expect to receive in exchange for those goods or services. Revenue is recognized net of customer discounts ratably over the service period. Customer billings delivered in advance of services being rendered are recorded as deferred revenue and recognized over the service period. The Company generates revenue from recruitment packages, advertising, classifieds, and virtual and live career fair and recruitment event booth rentals.
Disaggregation of revenue
Our brands primarily serve the technology and security cleared professions. The following table provides information about disaggregated revenue by brand and includes a reconciliation of the disaggregated revenue (in thousands):
| | | | | | | | | | | |
| Three Months Ended March 31, |
| 2023 | | 2022 |
Dice(1) | $ | 26,910 | | | $ | 24,634 | |
ClearanceJobs | 11,710 | | | 9,700 | |
Total | $ | 38,620 | | | $ | 34,334 | |
| | | |
(1) Includes Dice and Career Events | | | |
Contract Balances
The following table provides information about opening and closing balances of receivables and contract liabilities from contracts with customers as required under Topic 606 (in thousands):
| | | | | | | | | | | | | | | | | |
| | As of March 31, 2023 | | As of December 31, 2022 | |
| | | | | |
Receivables | | $ | 24,980 | | | $ | 20,494 | | |
Short-term contract liabilities (deferred revenue) | | 58,079 | | | 50,121 | | |
Long-term contract liabilities (deferred revenue) | | 765 | | | 743 | | |
We receive payments from customers based upon contractual billing schedules; accounts receivable are recorded when customers are invoiced per the contractual billings schedules. As the Company's standard payment terms are less than one year, the Company performed an in-depth review ofelected the getTalent product and the market outlook due to slow sales of the product and the high cost of development. Based on the review, the Company determined the required investments to competitively position the product were too high.practical expedient, where applicable. As a result, the product offering was canceled. As required under FASB ASC 360, Impairment or Disposal of Long-Lived Assets, an impairment loss shall be recognized only ifCompany does not consider the carrying amount of the long-lived asset is not recoverable and exceeds its fair value. The long-lived assets of getTalent were tested for recoverability. This process resulted in an impairment of capitalized website development costs of $2.2 million, which reduced the net book value of assets related to getTalent to zero.
4. INVESTMENTS
In the third quarter of 2017, pursuant to the achievement of certain performance milestones, the Company purchased additional preferred stock representing a 2.3% interest in the fully diluted shareseffects of a leading tech skills assessment company for $0.5 million, bringing its total interestsignificant financing component. Contract liabilities include customer billings delivered in advance of performance under the contract, and associated revenue is realized when services are rendered under the contract.
Receivables increase due to 10.0%. The Company has recordedcustomer billings and decrease by cash collected from customers. Contract liabilities increase due to customer billings and are decreased as performance obligations are satisfied under the investment using the cost method, which is included in the Other assets section of the Condensed Consolidated Balance Sheets.contracts.
5. ACQUIRED INTANGIBLE ASSETS, NET
Below is a summary of the major acquired intangible assets (in thousands):
8
|
| | | | | | | | | | | | | | | |
| As of September 30, 2017 |
| Total Cost | | Accumulated Amortization | | Foreign Currency Translation Adjustment | | Acquired Intangible Assets, Net |
Technology | $ | 5,228 |
| | $ | (4,597 | ) | | $ | (631 | ) | | $ | — |
|
Trademarks and brand names—Dice | 39,000 |
| | — |
| | — |
| | 39,000 |
|
Trademarks and brand names—Other | 13,394 |
| | (8,436 | ) | | (2,185 | ) | | 2,773 |
|
Customer lists | 14,500 |
| | (6,721 | ) | | (2,112 | ) | | 5,667 |
|
Candidate and content database | 8,857 |
| | (8,354 | ) | | (503 | ) | | — |
|
Acquired intangible assets, net | $ | 80,979 |
| | $ | (28,108 | ) | | $ | (5,431 | ) | | $ | 47,440 |
|
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The Company recognized the following revenues as a result of changes in the contract liability balances in the respective periods (in thousands):
| | | | | | | | | | | |
| Three Months Ended |
| March 31, 2023 | | March 31, 2022 |
Revenue recognized in the period from: | | | |
Amounts included in the contract liability at the beginning of the period | $ | 22,987 | | | $ | 20,940 | |
The following table includes estimated deferred revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| Remainder of 2023 | | 2024 | | 2025 | | 2026 | | Total |
Tech-focused | $ | 54,750 | | | $ | 3,980 | | | $ | 111 | | | $ | 3 | | | $ | 58,844 | |
Credit Losses
The Company is exposed to credit losses through the inability of its customers to make required payments on accounts receivable. The Company segments accounts receivable based on credit risk characteristics and estimates future losses for each segment based on historical trends and current market conditions, as applicable. Expected losses on accounts receivable are recorded as allowance for doubtful accounts in the condensed consolidated balance sheets and as an expense in the condensed consolidated statement of operations. The portion of accounts receivable that is reflected as deferred revenue in the condensed consolidated balance sheets is not considered at risk for credit losses. If the financial condition of DHI’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.
5. LEASES
The Company has operating leases for corporate office space and certain equipment. The leases have original terms from one year to eight years, some of which include options to renew the lease, and are included in the lease term when it is reasonably certain that the Company will exercise the option. No leases include options to purchase the leased property. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. We do not have any lease agreements with related parties.
The components of lease cost were as follows (in thousands):
| | | | | | | | | | | | | | |
| | For the Three Months Ended March 31, |
| | 2023 | | 2022 |
Operating lease cost(1) | $ | 603 | | | $ | 509 | |
Sublease income | (130) | | | (123) | |
Total lease cost | | $ | 473 | | | $ | 386 | |
| | |
(1) Includes short-term lease costs and variable lease costs, which are immaterial. |
Supplemental cash flow information related to leases was as follows (in thousands):
| | | | | | | | | | | | | | |
| | For the Three Months Ended March 31, |
| | 2023 | | 2022 |
Cash paid for amounts included in measurement of lease liabilities: | | | |
| Operating cash flows from operating leases | $ | 686 | | | $ | 674 | |
| | | | |
| | | |
| | | | |
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Supplemental balance sheet information related to leases was as follows (in thousands, except lease term and discount):
| | | | | | | | | | | | | | |
| | March 31, 2023 | | December 31, 2022 |
Operating lease right-of-use-assets | $ | 6,088 | | | $ | 6,581 | |
| | | |
Operating lease liabilities - current | 2,079 | | | 2,231 | |
Less: tenant improvement allowance | (2,079) | | | (2,126) | |
Operating lease liabilities - current (as reported) | — | | | 105 | |
Operating lease liabilities - non-current (as reported) | 8,007 | | | 8,428 | |
| Total operating lease liabilities | $ | 8,007 | | | $ | 8,533 | |
| | | | |
Weighted Average Remaining Lease Term (in years) | | | |
| Operating leases | 6.0 | | 5.8 |
| | | | |
Weighted Average Discount Rate | | | |
| Operating leases | 4.4 | % | | 4.4 | % |
The Company reviews its right-of-use ("ROU") assets for impairment if indicators of impairment exist. The impairment review process compares the fair value of the ROU asset to its carrying value. If the carrying value exceeds the fair value, an impairment loss is recorded. No impairment was recorded during the three months ended March 31, 2023 and 2022.
As of March 31, 2023, future operating lease payments were as follows (in thousands):
| | | | | | | | |
| Operating Leases |
April 1, 2023 through December 31, 2023 | $ | 1,765 | |
2024 | 2,316 | |
2025 | 2,421 | |
2026 | 1,476 | |
2027 | 578 | |
2028 and thereafter | 3,316 | |
| Total lease payments | $ | 11,872 | |
Less: imputed interest | 1,786 | |
Less: tenant improvement allowance | 2,079 | |
| Total | $ | 8,007 | |
As of March 31, 2023 the Company has no additional operating or finance leases that have not yet commenced.
6. INVESTMENTS
Investments, Non-current, at Fair Value
During the third quarter of 2021, the Company invested $3.0 million through a subordinated convertible promissory note (the "Note") of $3.0 million with a values-based career destination company that allows the next generation workforce to search for jobs at companies whose people, perks and values align with their unique professional needs. The Note earned interest at 6.00% and matured at the earlier of a Qualified Financing, as described in the Note, or settled in cash on or after August 20, 2022, at the option of the Company. Upon a Qualified Financing, the Company would convert its investment into shares of preferred stock at 80% of the per share value in the Qualified Financing. Prior to the Qualified Financing, the investment was recorded at $3.0 million and as a trading security at fair value with realized and unrealized gains and losses included in earnings.
On September 20, 2022, a Qualified Financing occurred and the Note was converted into preferred shares representing 4.9% of the outstanding equity in the underlying business, on a fully-diluted basis. The Company's preferred shares are substantially
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
| | | | | | | | | | | | | | | | | | | |
| As of December 31, 2016 |
| Total Cost | | Accumulated Amortization | | Foreign Currency Translation Adjustment | | Impairment | | Acquired Intangible Assets, Net |
Technology | $ | 10,308 |
| | $ | (9,677 | ) | | $ | (631 | ) | | $ | — |
| | $ | — |
|
Trademarks and brand names—Dice | 39,000 |
| | — |
| | — |
| | — |
| | 39,000 |
|
Trademarks and brand names—Other | 23,194 |
| | (14,379 | ) | | (2,286 | ) | | (3,168 | ) | | 3,361 |
|
Customer lists | 28,473 |
| | (13,518 | ) | | (2,112 | ) | | (6,084 | ) | | 6,759 |
|
Candidate and content database | 15,918 |
| | (15,295 | ) | | (623 | ) | | — |
| | — |
|
Acquired intangible assets, net | $ | 116,893 |
| | $ | (52,869 | ) | | $ | (5,652 | ) | | $ | (9,252 | ) | | $ | 49,120 |
|
similar to shares purchased by a third party investor in the Qualified Financing that resulted in such investor becoming the majority owner of the business, holding 50.5% of the outstanding equity in the business, on a fully-diluted basis. Therefore, the Company's shares in the business were recorded at fair value based on the price per share realized in the Qualified Financing. Subsequent to the Qualified Financing, the Company valued the investment at $0.7 million, and it is recorded as an investment in the condensed consolidated balance sheet as of March 31, 2023. The Company recognized an impairment loss during the three months ended September 30, 2022 of $2.3 million. No impairment was recognized during the three months ended March 31, 2023 and 2022. During the first quarter of 2017,2023, the majority investor purchased additional shares of the business as was contemplated in, and at the same price as, in the Qualified Financing. As a result, the Company's ownership, on a fully-diluted basis, on March 31, 2023 was reduced to 4.1%.
The Company has elected the measurement alternative in accordance with FASB ASC 321, Investments – Equity Securities. As of March 31, 2023, subsequent to the Qualified Financing, it was not practicable to estimate the fair value of its interest because there were no observable transactions for the investment. Accordingly, the investment was carried at the value realized in the Qualified Financing as of March 31, 2023, as described above.
Investments, Non-current
Rigzone is a website dedicated to delivering online content, data, and career services in the oil and gas industry in North America, Europe, the Middle East, and Asia Pacific. Oil and gas companies, as well as companies that serve the energy industry, use Rigzone to find talent for roles such as petroleum engineers, sales professionals with energy industry expertise and skilled tradesmen. On August 31, 2018, the Company retired $26.7transferred a majority ownership and control of the Rigzone business to Rigzone management, while retaining a 40% common share interest, with zero proceeds received from the transfer. During the second quarter of 2022, the Company sold its 40% interest in Rigzone to Rigzone management for $0.3 million. At the time of the sale, the recorded value of the investment was zero. Accordingly, the Company recognized a $0.3 million gain on sale, which was included in gain (loss) on investment on the condensed consolidated statements of operations.
On June 30, 2021, the Company transferred majority ownership and control of its eFC business to eFC's management, while retaining a 40% common share interest with zero proceeds received from the transfer. The Company incurred approximately $0.1 million in selling costs and recognized a $30.2 million loss on the transfer in the second quarter of 2021, which included a $28.1 million charge related to accumulated foreign currency loss that was previously a reduction to equity.
eFC is a financial services careers website, operating websites in multiple markets in four languages mainly across the United Kingdom, Continental Europe, Asia, the Middle East and North America. Professionals from across many sectors of the financial services industry, including asset management, risk management, investment banking, and information technology, use eFC to advance their careers. The Company has evaluated the 40% common share interest in the eFC business and has determined the investment meets the definition and criteria of a variable interest entity ("VIE"). The Company evaluated the VIE and determined that the Company does not have a controlling financial interest in the VIE, as the Company does not have the power to direct the activities of the VIE that most significantly impact the VIE's economic performance. The common share interest is being accounted for under the equity method of accounting as the Company has the ability to exercise significant influence over eFC. The investment was recorded at its fair value on June 30, 2021, the date of transfer, which was $3.6 million. The Company's equity in the net assets of eFC as of June 30, 2021 was $2.2 million. The difference between the Company's recorded value and its equity in net assets of eFC is amortized against the recorded value of the investment in accordance with ASC 323 Investments - Equity Method and Joint Ventures. Accordingly, the Company recorded amortization of less than $0.1 million for the three months ended March 31, 2023. There was no amortization recorded during the three months ended March 31, 2022 because it was not material. The recorded value is further adjusted based on the Company's proportionate share of eFC's net income and is recorded three months in arrears. For each of the three-month periods ended March 31, 2023 and 2022, the Company recorded $0.2 million of income related to its proportionate share of eFC's net income, net of currency translation adjustments and amortization of the basis difference.
At January 1, 2018, the Company held preferred stock representing a 10.0% interest in the fully amortized acquired intangible assets.diluted shares of a tech skills assessment company. During 2018, the skills assessment company completed an additional equity offering, lowering DHI's total interest to 7.6%. The investment was carried at its original cost of $2.0 million and was included in the other assets section of the condensed consolidated balance sheets. During the three months ended March 31, 2020, based on the investment's historical cash burn rate, uncertainty of its ability to meet revenue and cash flow projections, current liquidity position, lack of access to additional capital, and impacts from the COVID-19 pandemic, the Company determined the value to be zero. The investment is recorded at zero as of March 31, 2023 and December 31, 2022.
Based on
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
7. ACQUIRED INTANGIBLE ASSETS, NET
Considering the recognition of the Dice brand, its long history, awareness in the talent acquisition and staffing services market, and the intended use, the remaining useful life of the Dice.com trademarks and brand name was determined to be indefinite. We determine whether the carrying value of therecorded indefinite-lived acquired finite-lived intangible assets is impaired on an annual basis or more frequently if indicators of potential impairment exist. The annual impairment test for the Dice.com trademarks and brand name is performed on October 1 of each year. The impairment review process compares the fair value of the indefinite-lived acquired intangible assets to its carrying value. If the carrying value exceeds the fair value, an impairment loss is recorded.
As of March 31, 2023 and December 31, 2022, the Company had an indefinite-lived acquired intangible asset of $23.8 million related to the Dice trademarks and brand name. No impairment was recorded during the three month periods ended March 31, 2023 and 2022.
The projections utilized in the October 1, 2022 analysis included increasing revenues at rates approximating industry growth projections. The Company’s ability to achieve these revenue projections may be impacted by, among other things, general market conditions, competition in the technology recruiting market, challenges in developing and introducing new products and product enhancements to the market and the Company’s ability to attribute value delivered to customers. The October 1, 2022 analysis included operating margins during the year ending December 31, 2022 that approximate operating margins for the year ended December 31, 2021 and then increasing modestly. If future cash flows that are attributable to the Dice trademarks and brand name are not achieved, the Company could realize an impairment in a future period. The Company's operating results attributable to the Dice trademarks and brand name through March 31, 2023 and projections of future results approximate those included in the projections utilized in the October 1, 2022 analysis. In the October 1, 2022 analysis, the Company utilized a relief from royalty rate method to value the Dice trademarks and brand name using a royalty rate of 4.0% based on comparable industry licensing agreements and the profitability attributable to the Dice trademarks and brand name and a discount rate of 12.0%.
The determination of whether or not indefinite-lived acquired intangible assets have become impaired involves a significant level of judgment in the assumptions underlying the approach used to determine the value of the indefinite-lived acquired intangible assets. Fair values are determined using a profit allocation methodology which estimates the value of the trademarks and brand name by capitalizing the profits saved because the company owns the asset. We consider factors such as historical performance, anticipated market conditions, operating expense trends and capital expenditure requirements. Changes in our strategy and/or changes in market conditions could significantly impact these judgments and require adjustments to recorded amounts of intangible assets. If projections are not achieved, the Company could realize an impairment in the foreseeable future.
8. GOODWILL
Goodwill as of September 30, 2017,March 31, 2023 and assumingDecember 31, 2022, which was allocated to the Tech-focused reporting unit, was $128.1 million.
The annual impairment test for the Tech-focused reporting unit is performed on October 1 of each year. The results of the impairment test indicated that the fair value of the Tech-focused reporting unit was substantially in excess of the carrying value as of October 1, 2022.
Results for the Tech-focused reporting unit for the first quarter of 2023 and estimated future results as of March 31, 2023 approximate the projections used in the October 1, 2022 analysis. As a result, the Company believes it is not more likely than not that the fair value of the reporting unit is less than the carrying value as of March 31, 2023. Therefore, no subsequentquantitative impairment test was performed as of March 31, 2023. There were no changes to goodwill and no impairments were recorded during the three months ended March 31, 2023 and 2022.
The projections utilized in the October 1, 2022 analysis included increasing revenues at rates approximating industry growth projections. The Company’s ability to achieve these revenue projections may be impacted by, among other things, general market conditions, competition in the technology recruiting market, challenges in developing and introducing new products and product enhancements to the market and the Company’s ability to attribute value delivered to customers. The October 1, 2022 analysis included operating margins during the year ending December 31, 2022 that approximate operating margins for the year ended December 31, 2021 and then increasing modestly. If future cash flows that are attributable to the Tech-focused reporting unit are not achieved, the Company could realize an impairment in a future period.
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The discount rate applied for the Tech-focused reporting unit in the October 1, 2022 analysis was 11.0%. An increase to the discount rate applied or reductions to future projected operating results could result in future impairment of the underlying assets,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 reporting unit 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 amortization expense is as follows (in thousands):cash flows and discount rates used to determine the fair value of the reporting unit and could result in an impairment charge in the foreseeable future.
|
| | | |
October 1, 2017 through December 31, 2017 | $ | 507 |
|
2018 | 1,781 |
|
2019 | 1,476 |
|
2020 | 1,421 |
|
2021 | 1,149 |
|
2022 and thereafter | 2,106 |
|
Total | $ | 8,440 |
|
6.9. INDEBTEDNESS
Credit Agreement—TheIn June 2022, the Company, together with Dice Inc. (a wholly-owned subsidiary of the Company) and its wholly-owned subsidiary, Dice Career Solutions, Inc. (collectively, the “Borrowers”) maintains an, entered into a Third Amended and Restated Credit Agreement (the “Credit Agreement”), which matures in November 2020.June 2027 and replaces the Company's Old Credit Agreement (defined below). The Credit Agreement when entered into during November 2015, providedprovides for a revolving loan facility of $250.0$100 million which was subsequently reduced($90 million under the Old Credit Agreement), with an expansion option of $50 million, bringing the total facility to $150.0$150 million, during August 2017, as permitted under the terms of the Credit Agreement. In accordance with ASC 470, Line-of-Credit or Revolving-Debt Arrangements, unamortizedAt the closing of the Credit Agreement, the Company borrowed $30 million to repay, in full, all outstanding indebtedness, including accrued interest, under the Old Credit Agreement. Unamortized debt issuance costs from the previous credit agreement of $0.2 million and debt issuance costs of $410,000$0.5 million related to the new agreement were recorded as other assets on the condensed consolidated balance sheets and are recorded to interest expense atover the timeterm of reduction.the Credit Agreement.
Borrowings under the Credit Agreement denominated in U.S. dollars bear interest, payable at least quarterly, at the Company’s option, at a LIBOR ratethe Secured Overnight Financing Rate ("SOFR") or a base rate plus a margin. Borrowings under the Credit Agreement denominated in pounds sterling, if any, bear interest at the Sterling Overnight Index Average ("SONIA") rate plus a margin. The margin ranges from 1.75%2.00% to 2.50%2.75% on LIBORSOFR and SONIA loans and 0.75%1.00% to 1.50%1.75% on base rate loans, determined by the Company’s most recent consolidated leverage ratio, plus an additional spread of 0.10%. The Company incurs a commitment fee ranging from 0.35% to 0.50% on any unused capacity under the revolving loan facility, determined by the Company’s most recent consolidated leverage ratio. There were no borrowings in pounds sterling as of March 31, 2023 and December 31, 2022. The facility may be prepaid at any time without penalty.
The Credit Agreement contains various customary affirmative and negative covenants and also contains certain financial covenants, including a consolidated leverage ratio and a consolidated interest coverage ratio. Borrowings are allowed under the Credit Agreement to the extent the consolidated leverage ratio calculated on a pro forma basis, is equal to or less than 3.02.50 to 1.0.1.00, subject to the terms of the Credit Agreement. Negative covenants include restrictions on incurring certain liens; making certain payments, such as stock repurchases and dividend payments; making certain investments; making certain acquisitions; making certain dispositions; and incurring additional indebtedness. Restricted payments are allowed under the Credit Agreement to the extent the consolidated leverage ratio, calculated on a pro forma basis, is equal to or less than 2.02.00 to 1.0,1.00, plus an additional $5.0$7.5 million of restricted payments.payments each fiscal year, as described in the Credit Agreement. The Credit Agreement also provides that the payment of obligations may be accelerated upon the occurrence of customary events of default, including, but not limited to, non-payment, change of control, or insolvency. As of September 30, 2017,March 31, 2023, the Company was in compliance with all of the financial covenants under the Credit Agreement.
The obligations under the Credit Agreement are guaranteed by fourone of the Company’s wholly-owned subsidiaries eFinancialCareers, Inc., Targeted Job Fairs, Inc., Rigzone.com, Inc. and onTargetjobs, Inc., and secured by substantially all of the assets of the Borrowers and the guarantorsguarantors.
Previous Credit Agreement - The Borrowers previously maintained a Second Amended and stock pledges from certainRestated Credit Agreement (the "Old Credit Agreement"), which was scheduled to mature in November 2023. The Old Credit Agreement, when entered into during November 2018, provided for a revolving loan facility of $90 million, with an expansion option of $50 million, bringing the total facility to $140 million, as permitted by the terms of the Old Credit Agreement.
Borrowings under the Old Credit Agreement accrued interest, at the Company's option, at the London Inter-bank Offered Rate ("LIBOR") or a base rate plus a margin. The margin ranged from 1.75% to 2.50% on LIBOR loans and 0.75% to 1.50% on base rate loans, determined by the Company's most recent consolidated leverage ratio. The Company incurred a commitment fee ranging from 0.30% to 0.45% on any unused capacity under the revolving loan facility, determined by the Company’s foreign subsidiaries.most recent consolidated leverage ratio. The was no penalty for prepayment of the Old Credit Agreement.
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The amounts borrowed as of September 30, 2017March 31, 2023 and December 31, 20162022 are as follows (dollars in thousands): |
| | | | | | | |
| September 30, 2017 |
| December 31, 2016 |
Amounts borrowed: | | | |
Revolving credit facility | $ | 69,000 |
| | $ | 86,000 |
|
Less: deferred financing costs, net of accumulated amortization of $1,480 and $1,487 | (598 | ) | | (1,240 | ) |
Total borrowed | $ | 68,402 |
| | $ | 84,760 |
|
| | | |
Available to be borrowed under revolving facility, subject to certain limitations | $ | 81,000 |
| | $ | 164,000 |
|
| | | |
Interest rates: | | | |
LIBOR rate loans: | | | |
Interest margin | 2.00 | % | | 2.00 | % |
Actual interest rates | 3.25 | % | | 2.81 | % |
| | | | | | | | | | | |
| March 31, 2023 | | December 31, 2022 |
Long-term debt under revolving credit facility(1) | $ | 46,000 | | | $ | 30,000 | |
| | | |
Available to be borrowed under revolving facility(2) | $ | 54,000 | | | $ | 70,000 | |
| | | |
Interest rates: | | | |
SOFR rate loans: | | | |
Interest margin(3) | 2.10 | % | | 2.35 | % |
Actual interest rates(4) | 6.90 | % | | 6.67 | % |
| | | |
Commitment fee | 0.35 | % | | 0.40 | % |
| | | |
(1) In connection with the new Credit Agreement entered into during the three months ended June 30, 2022, the Company recorded deferred financing costs of $0.7 million to other assets on the condensed consolidated balance sheets. Accumulated amortization as of March 31, 2023 was $0.1 million. |
(2) The amount available to be borrowed is subject to certain limitations, such as a consolidated leverage ratio, as defined in the credit agreement. |
(3) Includes additional spread of 0.10%. | | | |
(4) Computed as the weighted average interest rate on all borrowings. | | | |
There are no scheduled principal payments until maturity of the Credit Agreement in November 2020.June 2027.
7.10. COMMITMENTS AND CONTINGENCIES
Leases
The Company leases equipment and office space under operating leases expiring at various dates through December 2026. Future minimum lease payments under non-cancellable operating leases as of September 30, 2017 are as follows (in thousands):
|
| | | |
October 1, 2017 through December 31, 2017 | $ | 1,341 |
|
2018 | 4,757 |
|
2019 | 4,245 |
|
2020 | 3,829 |
|
2021 | 3,139 |
|
2022 and thereafter | 8,727 |
|
Total minimum payments | $ | 26,038 |
|
Rent expense was $1.2 million and $3.6 million for the three and nine month periods ended September 30, 2017, respectively, and $1.1 million and $3.4 million for the three and nine month periods ended September 30, 2016, respectively, and is included in General and Administrative expense in the Condensed Consolidated Statements of Operations.
Litigation
The Company is subject to various claims from taxing authorities, lawsuits and other complaints arising in the ordinary course of business. The Company records provisions for losses when claims become probable and the amounts are reasonably estimable. Although the outcome of these legal matters, except as described below and recorded in the condensed consolidated financial statements, cannot be determined, it is the opinion of management that the final resolution of these matters will not have a material effect on the Company’s financial condition, operations or liquidity.
Tax Contingencies
During the third quarter of 2017, the Company recorded an additional accrual for unrecognized tax benefits for $2.3 million related to filing positions on its prior year US tax returns.
The Company operates in a number of tax jurisdictions and is routinely subject to examinations by various tax authorities with respect to income taxes and indirect taxes. The determination of the Company’s worldwide provisionliability for taxes requires judgment and estimation. The Company has reserved for potential examination adjustments to our provision for income taxes and accrual of indirect taxes in amounts which the Company believes are reasonable.
11. EQUITY TRANSACTIONS
Stock Repurchase Plans—The Company's Board of Directors ("Board") approved a stock repurchase program that permits the Company to repurchase its common stock. Management has discretion in determining the conditions under which shares may be purchased from time to time. The number, price, structure, and timing of the repurchases, if any, will be at our sole discretion and future repurchases will be evaluated by us depending on market conditions, liquidity needs, restrictions under the agreements governing our indebtedness, and other factors. Share repurchases may be made in the open market or in privately negotiated transactions. The repurchase authorization does not oblige us to acquire any particular amount of our common stock. The Board may suspend, modify, or terminate the repurchase program at any time without prior notice. The following table summarizes the stock repurchase plans approved by the Board:
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
8. EQUITY TRANSACTIONS
Stock Repurchase Plans—The Company’s board of directors approved a stock repurchase program that permitted the Company to repurchase its common stock through December 2016. Management had discretion in determining the conditions under which shares could have been purchased from time to time. The stock repurchase program expired as of December 31, 2016. The following table summarizes the most recent Stock Repurchase Plan approved by the Board of Directors:
| | | | | | | | | | | | | | | | | |
| February 2021 to June 2022(1) | | February 2022 to February 2023(2) | | February 2023 to February 2024(3) |
Approval Date | February 2021 | | February 2022 | | February 2023 |
Approval Date | December 2015 |
Authorized Repurchase Amount of Common Stock | $5020 million | | $15 million | | $10 million |
Effective Dates | December 2015 | | | | |
(1) During the second quarter of 2021, the Company amended its $8.0 million stock repurchase program approved in February 2021 and allowed for the purchase of an additional $12.0 million of our common stock through June 2022, bringing total authorized purchases under the plan to December 2016$20.0 million. During the first quarter of 2022, the Company completed its purchases under the plan, which consisted of approximately 4.4 million shares for $20.0 million, effectively ending the plan prior to its original expiration date. |
(2) During February 2023, the stock repurchase program approved in February 2022 expired with a total of 2.6 million shares purchased for $14.7 million. |
(3) On February 9, 2023, the Company announced that its Board approved a new stock repurchase program that permits the purchase of up to $10.0 million of the Company's common stock through February 2024. |
As of March 31, 2023 the value of shares that may yet be purchased under the current plan was $8.2 million.
Purchases of the Company's common stock pursuant to the stock repurchase plans were as follows:
| | | | | | | | | | | |
| Three Months Ended March 31, |
| 2023 | | 2022 |
Shares repurchased | 742,536 | | | 1,302,226 | |
Average purchase price per share(1) | $ | 4.76 | | | $ | 5.78 | |
Dollar value of shares repurchased (in thousands)(1) | $ | 3,536 | | | $ | 7,525 | |
(1) Average price paid per share and dollar value of shares repurchased include costs associated with the repurchases.
There were no10,084 and 20,665 unsettled share repurchases as of March 31, 2023 and 2022, respectively.
Stock Repurchases Pursuant to the 2022 Omnibus Equity Award Plan—Under the 2022 Omnibus Equity Award Plan, as further described in note 12 to the condensed consolidated financial statements, the Company repurchases its common stock repurchases duringwithheld for income tax from the nine months ended September 30, 2017vesting of employee restricted stock or Performance-Based Restricted Stock Units (“PSUs”). The Company remits the value, which is based on the closing share price on the vesting date, of the common stock withheld to the appropriate tax authority on behalf of the employee and there is nothe related shares become treasury stock.
Purchases of the Company’s common stock pursuant to the 2022 Omnibus Equity Award Plan were as follows:
| | | | | | | | | | | |
| Three Months Ended March 31, |
| 2023 | | 2022 |
Shares repurchased upon restricted stock/PSU vesting | 898,890 | | | 773,048 | |
Average purchase price per share | $ | 5.89 | | | $ | 5.44 | |
Dollar value of shares repurchased upon restricted stock/PSU vesting (in thousands) | $ | 5,295 | | | $ | 4,202 | |
No shares of the Company's common stock were purchased other than through the stock repurchase program currently in effect.plans and the 2022 Omnibus Equity Award Plan, as described above.
9. DISPOSITION RELATED AND OTHER COSTS12. STOCK-BASED COMPENSATION
In May 2017,
On July 13, 2022, the stockholders of the Company announced plansapproved the DHI Group, Inc. 2022 Omnibus Equity Award Plan, which had been previously approved by the Company's Board of Directors on May 13, 2022 (the "2022 Omnibus Equity Award Plan"). The 2022 Omnibus Equity Award Plan generally mirrors the terms of the Company's prior omnibus equity award plan, which expired in accordance with its terms on April 20, 2022 (the "2012 Omnibus Equity Award Plan"). On April 26, 2023, the stockholders of the Company approved the DHI Group, Inc. 2022 Omnibus Equity Award Plan, as Amended and Restated, which had been previously approved by the Company’s Board of Directors on March 16, 2023. The 2022 Omnibus Equity Award Plan was amended and restated to, divest aamong other things, increase the number of its online professional communitiesshares of common stock authorized for issuance as equity awards under the plan by 2.9 million shares. The Company has previously granted restricted stock and PSUs to achieve greater focuscertain employees and resource allocation toward its core tech-focused business. The planned divestitures include: BioSpace, Hcareers, Health eCareers,directors pursuant to the 2012 Omnibus Equity Award Plan and Rigzone. In connection with the planned divestitures and focus on the tech business, the Company incurred certain severance and other related costs to further these strategic objectives.
The following table displays a roll forward of the disposition related and other costs and related liability balances (in thousands):2022 Omnibus Equity Award Plan
15
|
| | | | | | | | | | | | | | |
| Accrual at June 30, 2017 | | Expense | | Cash Payments | | Accrual at September 30, 2017 |
Severance and retention | $ | 853 |
| | $ | 676 |
| | (844 | ) | | $ | 685 |
|
Professional fees | 70 |
| | 373 |
| | (179 | ) | | 264 |
|
Total disposition related and other costs | $ | 923 |
| | $ | 1,049 |
| | (1,023 | ) | | $ | 949 |
|
|
| | | | | | | | | | | | | | |
| Accrual at December 31, 2016 | | Expense | | Cash Payments | | Accrual at September 30, 2017 |
Severance and retention | $ | — |
| | $ | 1,793 |
| | (1,108 | ) | | $ | 685 |
|
Professional fees | — |
| | 443 |
| | (179 | ) | | 264 |
|
Total disposition related and other costs | $ | — |
| | $ | 2,236 |
| | (1,287 | ) | | $ | 949 |
|
In January 2016, the Company completed the sale of Slashdot Media and incurred severance costs and additional stock based compensation expense for the acceleration of stock vesting. As a result, the Company recognized a loss on the sale of assets of Slashdot Media.
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following table displaysand will continue to grant restricted stock and PSUs to certain employees and directors pursuant to the disposition related and other costs incurred during the nine month period ended September 30, 2016 (in thousands): |
| | | | | | | | | | | |
Severance—Slashdot Media | | | | | | | | | $ | 981 |
|
Accelerated stock based compensation expense—Slashdot Media | | | | | | | | | 900 |
|
Loss on sale of Slashdot Media | | | | | | | | | 639 |
|
Severance related to other brands | | | | | | | | | 827 |
|
Total disposition related and other costs | | | | | | | | | $ | 3,347 |
|
There were no disposition related and other costs incurred during the three month period ended September 30, 2016.
10. STOCK BASED COMPENSATION
Under the 20122022 Omnibus Equity Award Plan, theas Amended and Restated. The Company has granted stock options, restricted stock and Performance-Based Restrictedalso offers an Employee Stock Units (“PSUs”) to certain employees and directors. On January 1, 2017, as a result of ASU No. 2016-09 as discussed in Note 2, the Company recorded expense based upon the number of awards outstanding with no estimate for forfeitures. Previously, the Company estimated forfeitures that it expected would occur and recorded expense based upon the number of awards expected to vest.Purchase Plan.
The Company recorded total stock basedstock-based compensation expense of $1.7$2.9 million and $6.3$2.2 million during the three months ended March 31, 2023 and nine month periods ended September 30, 2017, respectively, and $2.3 million and $8.8 million of compensation expense, which included $0.9 million of accelerated compensation due to Slashdot Media as shown in Note 9, during the three and nine month periods ended September 30, 2016,2022, respectively. At September 30, 2017,March 31, 2023, there was $12.4$20.8 million of unrecognized compensation expense related to unvested awards, which is expected to be recognized over a weighted-average period of approximately 1.6 years.
Restricted Stock—Restricted stock is granted to employees of the Company and its subsidiaries, and to non-employee members of the Company’s Board. These shares are part of the compensation plan for services provided by the employees or Board members. The closing price of the Company’s stock on the date of grant is used to determine the fair value of the grants. The expense related to the restricted stock grants is recorded over the vesting period.period as described below. There was no cash flow impact resulting from the grants.
The restricted
Restricted stock vests in various increments on the anniversaries of each grant, subject to the recipient’s continued employment or service through each applicable vesting date. Vesting occurs over one year for Board members and over two to four years for employees.
A summary of the status of restricted stock awards as of September 30, 2017March 31, 2023 and 20162022 and the changes during the periods then ended is presented below:
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| Three Months Ended March 31, 2023 | | Three Months Ended March 31, 2022 |
| Shares | | Weighted- Average Fair Value at Grant Date | | Shares | | Weighted- Average Fair Value at Grant Date |
Non-vested at beginning of the period | 2,639,286 | | | $ | 3.96 | | | 3,371,832 | | | $ | 2.80 | |
Granted | 1,107,000 | | | $ | 5.86 | | | 932,500 | | | $ | 5.17 | |
Forfeited | (4,000) | | | $ | 5.14 | | | (81,714) | | | $ | 2.90 | |
Vested | (962,178) | | | $ | 3.48 | | | (1,098,127) | | | $ | 2.48 | |
Non-vested at end of period | 2,780,108 | | | $ | 4.88 | | | 3,124,491 | | | $ | 3.62 | |
Expected to vest | 2,780,108 | | | $ | 4.88 | | | 3,124,491 | | | $ | 3.62 | |
|
| | | | | | | | | | | | | |
| Three Months Ended September 30, 2017 | | Three Months Ended September 30, 2016 |
| Shares | | Weighted- Average Fair Value at Grant Date | | Shares | | Weighted- Average Fair Value at Grant Date |
Non-vested at beginning of the period | 2,417,300 |
| | $ | 6.38 |
| | 2,236,250 |
| | $ | 8.10 |
|
Granted | 38,000 |
| | $ | 2.80 |
| | 165,700 |
| | $ | 6.90 |
|
Forfeited | (183,375 | ) | | $ | 6.71 |
| | (142,875 | ) | | $ | 8.00 |
|
Vested | (35,125 | ) | | $ | 8.93 |
| | (65,250 | ) | | $ | 8.76 |
|
Non-vested at end of period | 2,236,800 |
| | $ | 6.25 |
| | 2,193,825 |
| | $ | 8.00 |
|
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
| | | | | | | | | | | | | |
| Nine Months Ended September 30, 2017 | | Nine Months Ended September 30, 2016 |
| Shares | | Weighted- Average Fair Value at Grant Date | | Shares | | Weighted- Average Fair Value at Grant Date |
Non-vested at beginning of the period | 2,226,375 |
| | $ | 7.87 |
| | 2,122,225 |
| | $ | 8.54 |
|
Granted | 1,262,500 |
| | $ | 4.72 |
| | 1,199,200 |
| | $ | 7.47 |
|
Forfeited | (438,000 | ) | | $ | 6.87 |
| | (294,375 | ) | | $ | 8.15 |
|
Vested | (814,075 | ) | | $ | 7.98 |
| | (833,225 | ) | | $ | 8.57 |
|
Non-vested at end of period | 2,236,800 |
| | $ | 6.25 |
| | 2,193,825 |
| | $ | 8.00 |
|
PSUs—
PSUs—PSUs are granted to employees of the Company and its subsidiaries. These shares are part of thegranted under compensation planagreements that are for services provided by the employees. The expense related tofair value of the PSUs is recordedmeasured at the grant date fair value of the award, which was determined based on an analysis of the probable performance outcomes. The performance period is over one year and is based on the vesting period. Theseachievement of bookings targets during the year of grant, as defined in the applicable award agreement. The earned shares will then vest over a three year period, one-third on each of the datesfirst, second, and third anniversaries of the grant date, or if later, the date the Compensation Committee certifies the Company’s achievement of stock price performance relativeresults with respect to the Russell 2000 Index, provided that the recipient remains employed through such date. Performance will be measured over three separate measurement periods: a one-year measurement period, a two-year measurement period and a three-year measurementperformance period. For performance periods one and two, vesting is not to exceed total grant divided by three. For performance period three, vesting is no less than zero and no greater than 150% of initial grant less shares vested in performance periods one and two.
There was no cash flow impact resulting from the grants. The fair value
|
| | | | | | | | | |
| | Nine Months Ended September 30, | |
| | 2017 | | 2016 | |
Weighted average fair value of PSUs granted | | $ | 5.38 |
| | $ | 7.24 |
| |
Dividend yield of DHI Group, Inc. stock | | — | % | | — | % | |
Dividend yield of Russell 2000 Index | | 1.4 | % | | 1.7 | % | |
Risk free interest rate | | 1.5 | % | | 0.9 | % | |
Volatility of DHI Group, Inc. stock | | 41.0 | % | | 33.5 | % | |
Volatility of Russell 2000 Index | | 16.7 | % | | 16.7 | % | |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTSA summary of the status of PSUs as of September 30, 2017March 31, 2023 and 20162022 and the changes during the periods then ended is presented below:
| | | Three Months Ended September 30, 2017 | | Three Months Ended September 30, 2016 | | Three Months Ended March 31, 2023 | | Three Months Ended March 31, 2022 |
| Shares | | Weighted- Average Fair Value at Grant Date | | Shares | | Weighted- Average Fair Value at Grant Date | | Shares | | Weighted- Average Fair Value at Grant Date | | Shares | | Weighted- Average Fair Value at Grant Date |
Non-vested at beginning of the period | 890,838 |
| | $ | 6.92 |
| | 670,838 |
| | $ | 8.03 |
| Non-vested at beginning of the period | 2,086,932 | | | $ | 3.48 | | | 1,593,775 | | | $ | 2.62 | |
Granted(1) | | Granted(1) | 1,357,587 | | | $ | 5.62 | | | 1,553,332 | | | $ | 3.77 | |
Forfeited | (84,167 | ) | | $ | 6.86 |
| | (72,084 | ) | | $ | 8.05 |
| Forfeited | — | | | $ | — | | | (93,341) | | | $ | 2.40 | |
Vested | — |
| | $ | — |
| | (18,750 | ) | | $ | 8.25 |
| Vested | (1,236,074) | | | $ | 3.51 | | | (928,717) | | | $ | 2.61 | |
Non-vested at end of period | 806,671 |
| | $ | 6.93 |
| | 580,004 |
| | $ | 8.02 |
| Non-vested at end of period | 2,208,445 | | | $ | 4.77 | | | 2,125,049 | | | $ | 3.48 | |
Expected to vest | | Expected to vest | 2,208,445 | | | $ | 4.77 | | | 2,125,049 | | | $ | 3.48 | |
| | | | | | | | | | | | | | | | | | | | | | | |
(1) PSUs granted in the first quarter of 2023 includes 587,587 additional PSUs related to the bookings achievement for the performance period ended December 31, 2022. PSUs granted in the first quarter of 2022 includes 853,332 additional PSUs related to the bookings achievement for the performance period ended December 31, 2021. |
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
| | | | | | | | | | | | | |
| Nine Months Ended September 30, 2017 | | Nine Months Ended September 30, 2016 |
| Shares | | Weighted- Average Fair Value at Grant Date | | Shares | | Weighted- Average Fair Value at Grant Date |
Non-vested at beginning of the period | 580,004 |
| | $ | 8.02 |
| | 415,000 |
| | $ | 9.25 |
|
Granted | 397,500 |
| | $ | 5.38 |
| | 417,500 |
| | $ | 7.24 |
|
Forfeited | (170,833 | ) | | $ | 7.04 |
| | (98,751 | ) | | $ | 8.17 |
|
Vested | — |
| | $ | — |
| | (153,745 | ) | | $ | 9.13 |
|
Non-vested at end of period | 806,671 |
| | $ | 6.93 |
| | 580,004 |
| | $ | 8.02 |
|
Directors adopted an Employee Stock Options—Purchase Plan ("ESPP"). The fair valueESPP was approved by the Company's stockholders on April 21, 2020. The ESPP provides eligible employees the opportunity to purchase shares of the Company's common stock through payroll deductions during six-month offering periods. The purchase price per share of common stock is 85% of the lower of the closing stock price on the first or last trading day of each option grantoffering period. The offering periods are January 1 to June 30 and July 1 to December 31. The maximum number of shares of common stock available for purchase under the ESPP is estimated using500,000, subject to adjustment as provided under the Black-Scholes option-pricing model usingESPP. Individual employee purchases are limited to $25,000 per calendar year, based on the weighted-average assumptions in the table below. This valuation model requires the Company to make assumptions and judgments about the variables used in the calculation, including the fair market value of the Company’s common stock, the expected life (the period of time that the options granted are expected to be outstanding), the volatility of the Company’s common stock, a risk-free interest rate and expected dividends. The expected life of options granted is derived from historical exercise behavior. The risk-free rate for periods within the expected life of the option is basedshares on the U.S. Treasury rates in effect at the time of grant. The stock options vest 25% after one year, beginning on the first anniversary date of the grant, and 6.25% each quarter following the first anniversary. There was no cash flow impact resulting from the grants.purchase date. No stock optionsshares were grantedissued during the ninethree months ended September 30, 2017March 31, 2023 and September 30, 2016.2022.
A summary of the status of options previously granted as of September 30, 2017, and 2016, and the changes during the periods then ended is presented below:
|
| | | | | | | | | | |
| Three Months Ended September 30, 2017 |
| Options | | Weighted-Average Exercise Price | | Aggregate Intrinsic Value |
Options outstanding at beginning of the period | 1,273,088 |
| | $ | 9.29 |
| | $ | — |
|
Forfeited | (136,875 | ) | | $ | 9.42 |
| | $ | — |
|
Options outstanding at end of period | 1,136,213 |
| | $ | 9.28 |
| | $ | — |
|
|
| | | | | | | | | | |
| Three Months Ended September 30, 2016 |
| Options | | Weighted-Average Exercise Price | | Aggregate Intrinsic Value |
Options outstanding at beginning of the period | 2,273,323 |
| | $ | 7.89 |
| | $ | 539,367 |
|
Exercised | (336,360 | ) | | $ | 4.86 |
| | $ | 854,271 |
|
Forfeited | (66,563 | ) | | $ | 8.12 |
| | $ | — |
|
Options outstanding at end of period | 1,870,400 |
| | $ | 8.43 |
| | $ | 1,059,282 |
|
|
| | | | | | | | | | |
| Nine Months Ended September 30, 2017 |
| Options | | Weighted-Average Exercise Price | | Aggregate Intrinsic Value |
Options outstanding at beginning of the period | 1,779,613 |
| | $ | 8.46 |
| | $ | 50,869 |
|
Exercised | (66,188 | ) | | $ | 6.08 |
| | $ | 12,821 |
|
Forfeited | (577,212 | ) | | $ | 7.14 |
| | $ | — |
|
Options outstanding at end of period | 1,136,213 |
| | $ | 9.28 |
| | $ | — |
|
Exercisable at end of period | 1,086,743 |
| | $ | 9.36 |
| | $ | — |
|
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
| | | | | | | | | | |
| Nine Months Ended September 30, 2016 |
| Options | | Weighted-Average Exercise Price | | Aggregate Intrinsic Value |
Options outstanding at beginning of the period | 2,673,512 |
| | $ | 7.46 |
| | $ | 5,485,248 |
|
Exercised | (618,110 | ) | | $ | 4.31 |
| | $ | 2,198,143 |
|
Forfeited | (185,002 | ) | | $ | 8.16 |
| | $ | — |
|
Options outstanding at end of period | 1,870,400 |
| | $ | 8.43 |
| | $ | 1,059,282 |
|
Exercisable at end of period | 1,574,804 |
| | $ | 8.47 |
| | $ | 946,591 |
|
In connection with the Company’s sale of Slashdot Media, the Company accelerated the vesting of 130,375 shares of restricted stock and 24,001 stock options to certain former employees during the nine month period ended September 30, 2016, the expense of which is recorded in Disposition Related and Other Costs in the Condensed Consolidated Statements of Operations.
The weighted-average remaining contractual term of options exercisable at September 30, 2017 is 2.4 years. The following table summarizes information about options outstanding as of September 30, 2017:
|
| | | | | | | |
| Options Outstanding | | Options Exercisable |
Exercise Price | Number Outstanding | | Weighted- Average Remaining Contractual Life | | Number Exercisable |
| | | (in years) | | |
$ 7.00 - $ 7.99 | 327,375 |
| | 3.4 | | 285,687 |
|
$ 8.00 - $ 8.99 | 199,500 |
| | 1.8 | | 191,718 |
|
$ 9.00 - $ 9.99 | 480,000 |
| | 2.6 | | 480,000 |
|
$ 10.00 - $ 14.50 | 129,338 |
| | 0.8 | | 129,338 |
|
| 1,136,213 |
| | | | 1,086,743 |
|
11. 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. 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 our 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 (each formerly in the Global Industry Group segment) and getTalent 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.
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following table shows the segment information (in thousands and recast for the change in reportable segments): |
| | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| 2017 | | 2016 | | 2017 | | 2016 |
By Segment: | | | | | | | |
Revenues: | | | | | | | |
Tech-focused | $ | 39,814 |
| | $ | 42,739 |
| | $ | 118,638 |
| | $ | 128,876 |
|
Healthcare | 6,462 |
| | 6,735 |
| | 19,741 |
| | 20,647 |
|
Corporate & Other | 6,148 |
| | 6,599 |
| | 18,635 |
| | 22,509 |
|
Total revenues | $ | 52,424 |
| | $ | 56,073 |
| | $ | 157,014 |
| | $ | 172,032 |
|
| | | | | | | |
Depreciation: | | | | | | | |
Tech-focused | $ | 1,789 |
| | $ | 1,743 |
| | $ | 5,144 |
| | $ | 5,508 |
|
Healthcare | 406 |
| | 539 |
| | 1,451 |
| | 1,630 |
|
Corporate & Other | 381 |
| | 196 |
| | 1,108 |
| | 501 |
|
Total depreciation | $ | 2,576 |
| | $ | 2,478 |
| | $ | 7,703 |
| | $ | 7,639 |
|
| | | | | | | |
Amortization: | | | | | | | |
Tech-focused | $ | 28 |
| | $ | 278 |
| | $ | 108 |
| | $ | 1,833 |
|
Healthcare | 162 |
| | 218 |
| | 487 |
| | 654 |
|
Corporate & Other | 364 |
| | 1,074 |
| | 1,091 |
| | 3,619 |
|
Total amortization | $ | 554 |
| | $ | 1,570 |
| | $ | 1,686 |
| | $ | 6,106 |
|
| | | | | | | |
Operating income (loss): | | | | | | | |
Tech-focused | $ | 9,485 |
| | $ | 14,147 |
| | $ | 30,700 |
| | $ | 40,097 |
|
Healthcare | (187 | ) | | (366 | ) | | (1,279 | ) | | (537 | ) |
Corporate & Other | (6,760 | ) | | (29,864 | ) | | (18,586 | ) | | (44,516 | ) |
Operating income (loss) | 2,538 |
| | (16,083 | ) | | 10,835 |
| | (4,956 | ) |
Interest expense | (1,173 | ) | | (901 | ) | | (2,777 | ) | | (2,593 | ) |
Other expense | (3 | ) | | (1 | ) | | (10 | ) | | (33 | ) |
Income (loss) before income taxes | $ | 1,362 |
| | $ | (16,985 | ) | | $ | 8,048 |
| | $ | (7,582 | ) |
| | | | | | | |
Capital expenditures: | | | | | | | |
Tech-focused | $ | 1,931 |
| | $ | 1,783 |
| | $ | 7,544 |
| | $ | 5,595 |
|
Healthcare | 366 |
| | 245 |
| | 996 |
| | 642 |
|
Corporate & Other | 248 |
| | 897 |
| | 1,813 |
| | 2,005 |
|
Total capital expenditures | $ | 2,545 |
| | $ | 2,925 |
| | $ | 10,353 |
| | $ | 8,242 |
|
| | | | | | | |
|
| | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| 2017 | | 2016 | | 2017 | | 2016 |
By Geography: | | | | | | | |
Revenues: | | | | | | | |
United States | $ | 38,869 |
| | $ | 41,617 |
| | $ | 117,026 |
| | $ | 126,617 |
|
United Kingdom | 4,541 |
| | 5,291 |
| | 13,886 |
| | 18,875 |
|
EMEA, APAC and Canada (1) | 9,014 |
| | 9,165 |
| | 26,102 |
| | 26,540 |
|
Non-United States | 13,555 |
| | 14,456 |
| | 39,988 |
| | 45,415 |
|
Total revenues | $ | 52,424 |
| | $ | 56,073 |
| | $ | 157,014 |
| | $ | 172,032 |
|
| | | | | | | |
(1) Europe (excluding United Kingdom), the Middle East and Africa (“EMEA”) and Asia-Pacific (“APAC”) |
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
| | | | | | | |
| September 30, 2017 | | December 31, 2016 |
Total assets (recast for the change in reportable segments): | | | |
Tech-focused | $ | 263,822 |
| | $ | 263,462 |
|
Healthcare | 13,287 |
| | 14,375 |
|
Corporate & Other | 28,895 |
| | 32,258 |
|
Total assets | $ | 306,004 |
| | $ | 310,095 |
|
The Company changed its reporting units during the third quarter of 2017 to reflect the current reporting structure. The reporting units are: Tech-focused, Healthcare, Hospitality, Energy, and BioSpace. The following table shows the carrying amount of goodwill by segment as of December 31, 2016 and September 30, 2017 and the changes in goodwill for the nine month period ended September 30, 2017 (in thousands):
|
| | | | | | | | | | | | | | | |
| Tech-focused | | Healthcare | | Corporate & Other | | Total |
Goodwill at December 31, 2016 | $ | 152,165 |
| | $ | 6,269 |
| | $ | 13,311 |
| | $ | 171,745 |
|
Foreign currency translation adjustment | $ | 4,896 |
| | $ | — |
| | $ | — |
| | $ | 4,896 |
|
Goodwill at September 30, 2017 | $ | 157,061 |
| | $ | 6,269 |
| | $ | 13,311 |
| | $ | 176,641 |
|
On June 23, 2016, the United Kingdom (“UK”) held a referendum in which British citizens approved an exit from the EU, commonly referred to as “Brexit.” Brexit could cause disruptions to and create uncertainty surrounding our business, including affecting our relationships with our existing and future customers and employees based in the UK and Europe along with adversely impacting foreign currencies, particularly the British Pound Sterling as compared to the United States dollar. 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 2017 and beyond, our revenues and results of operations will be negatively impacted. As a result of these factors, in the third 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 fair value of the Hospitality reporting unit was not substantially in excess of the carrying value as of the most recent annual impairment testing date of October 1, 2016. The percentage by which the estimated fair value exceeded carrying value for the Hospitality reporting unit was 19%. As a result of the continued competition in the Hospitality reporting unit, the Company performed an interim goodwill impairment test of the Hospitality reporting units as of December 31, 2016. The percentage by which the estimated fair value exceeded the carrying value for the Hospitality reporting unit as of December 31, 2016 was 16%. As a result of these factors, in the third quarter, the Company further evaluated the fair value of the Hospitality reporting unit and believes it is not more likely than not that the fair value is less than the carrying value. The Healthcare reporting unit was not at risk of experiencing a fair value less than carrying value. Therefore, no interim impairment testing was performed as of September 30, 2017.
The Company disclosed in the second quarter of 2017 that the fair value of the Finance reporting unit, now included in Tech-focused, was not substantially in excess of the carrying value as of the most recent annual impairment testing date of October 1, 2016. See evaluation of the Tech-focused reporting unit above.
12.13. EARNINGS PER SHARE
Basic earnings per share (“EPS”) is computed based on the weighted-average number of shares of common stock outstanding. Diluted EPS is computed based on the weighted-average number of shares of common stock outstanding plus common stock equivalents, assuming exercise of stock options, where dilutive. Stock-based awards of approximately 3.0 million and 3.3 million were outstanding during the three and nine month periods ended September 30, 2017, respectively, and approximately 2.5 million shares were outstanding during the three and nine month periods ended September 30, 2016, respectively, but were excluded from the calculation of diluted EPS for the periods then ended because the effect of the awards is anti-dilutive. In 2016, shares issuable from stock-based awards of 0.8 million for both the three and nine month periods
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
ended September 30, 2016 were excluded from the computation of shares contingently issuable upon exercise as we recognized a net loss. The following is a calculation of basic and diluted earnings per share and weighted-average shares outstanding (in thousands, except per share amounts):
| | | | | | | | | | | |
| Three Months Ended March 31, |
| 2023 | | 2022 |
Net income | $ | 460 | | | $ | 1,301 | |
| | | |
Weighted-average shares outstanding—basic | 43,886 | | | 44,702 | |
Add shares issuable from stock-based awards | 1,354 | | | 2,468 | |
Weighted-average shares outstanding—diluted | 45,240 | | | 47,170 | |
| | | |
Basic earnings per share | $ | 0.01 | | | $ | 0.03 | |
Diluted earnings per share | $ | 0.01 | | | $ | 0.03 | |
| | | |
| | | |
Shares excluded from the calculation of diluted earnings per share1 | 2,638 | | | 1,307 | |
|
(1) Represents outstanding stock-based awards that were anti-dilutive and excluded from the calculation of diluted earnings per share. |
14. INCOME TAXES
|
| | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| 2017 | | 2016 | | 2017 | | 2016 |
Net income | $ | 1,058 |
| | $ | (16,841 | ) | | $ | 4,220 |
| | $ | (10,876 | ) |
| | | | | | | |
Weighted-average shares outstanding—basic | 48,021 |
| | 47,719 |
| | 47,858 |
| | 48,596 |
|
Add shares issuable from stock-based awards | 481 |
| | — |
| | 539 |
| | — |
|
Weighted-average shares outstanding—diluted | 48,502 |
| | 47,719 |
| | 48,397 |
| | 48,596 |
|
| | | | | | | |
Basic earnings per share | $ | 0.02 |
| | $ | (0.35 | ) | | $ | 0.09 |
| | $ | (0.22 | ) |
Diluted earnings per share | $ | 0.02 |
| | $ | (0.35 | ) | | $ | 0.09 |
| | $ | (0.22 | ) |
13. SUBSEQUENT EVENTS
The CompanyCompany’s effective tax rate was paid restitution by a former employee in the amount of $3.3 million on October 24, 2017 pursuant to an Order of Restitution issued by the United States District Court952% and (142)% for the Southern Districtthree months ended March 31, 2023 and 2022, respectively. The effective tax rate differed from the U.S. statutory rate due to tax benefits of New York in$0.5 million and $0.8 million from the criminal matter captioned United Statesvesting of America v. David W. Kent. The gain will be recorded as a componentshare-based compensation awards during the three months ended March 31, 2023 and 2022, respectively.
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes included elsewhere in this report. See also our consolidated financial statements and the notes thereto and the section entitled “Note Concerning Forward-Looking Statements” in our Annual Report on Form 10-K for the year ended December 31, 2016.2022.
Information contained herein contains forward-looking statements.statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. You should not place undue reliance on those statements because they are subject to numerous uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. Forward-looking statements include, without limitation, information concerning our possible or assumed future financial condition, liquidity and results of operations.operations, including expectations (financial or otherwise), our strategy, plans, objectives, expectations (financial or otherwise) and intentions, and growth potential. These statements often include words such as “may,” “will,” “should,” “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate” or similar expressions. These statements are based on assumptions that we have made in light of our experience in the industry as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual financial results or results of operations and could cause actual results to differ materially from those in the forward-looking statements. These factors include, but are not limited to, to:our ability to execute our tech-focused strategy, the reviewstrategy; write-offs of potential dispositions of certain of our businessesgoodwill, tradename and the terms and timing of any such transactions, the results and timing of our search for a new Chief Executive Officer,intangible assets; competition from existing and future competitors in the highly competitive market in which we operate, failure to adapt our business model to keep pace with rapidcompetitors; changes in the recruiting and career services business and technologies, and the development of new products and services; failure to maintaindevelop and developmaintain our reputation and brand recognition,recognition; failure to increase or maintain the number of customers who purchase recruitment packages, cyclicality or downturns in the economy or industries we serve, the uncertainty surrounding the UK’s future departure from the European Union (“EU”), including uncertainty in respect of the regulation of data protection and data privacy,packages; failure to attract qualified professionals to our websites or grow the number of qualified professionals who use our websites,websites; inability to successfully integrate future acquisitions or identify and consummate future acquisitions; misappropriation or misuse of our intellectual property, claims against us for intellectual property infringement or the failure to successfully identifyenforce our ownership or integrate acquisitions, U.S.use of intellectual property; failure of our businesses to attract, retain and foreign government regulation ofengage users; unfavorable decisions in proceedings related to future tax assessments; taxation risks in various jurisdictions for past or future sales; significant downturn not immediately reflected in our operating results; our indebtedness and the Internet and taxation, our abilitypotential inability to borrow funds under our revolving credit facilityCredit Agreement (as defined below); our ability to incur additional debt; covenants in our Credit Agreement; the development and use of artificial intelligence; failure to timely and efficiently scale and adapt our existing technology and network infrastructure; capacity constraints, systems failures or refinancebreaches of network security; the usefulness of our indebtednesscandidate profiles; decrease in user engagement; Internet search engine methodologies and restrictionstheir impact on our currentsearch result rankings; failure to halt the operations of websites that aggregate our data, as well as data from other companies; our reliance on third-party data hosting facilities; compliance with laws and futureregulations concerning collection, storage and use of professionals’ professional and personal information; U.S. regulation of the internet; a review of strategic alternatives may occur from time to time and the possibility that such review will not result in a transaction; loss of key executives and technical personnel and our ability to attract and retain key executives, including our CEO; increases in the unemployment rate, cyclicality or downturns in the United States or worldwide economies or the industries we serve, labor shortages, or job shortages; litigation related to infringement or other claims regarding our services or content; our ability to defend ownership of our intellectual property; global climate change; compliance with changing corporate governance requirements and costs incurred in connection with being a public company; compliance with the continued listing standards of the New York Stock Exchange (the “NYSE”); volatility in our stock price; failure to maintain internal controls over financial reporting; results of operations under such indebtedness.fluctuating on a quarterly and annual basis; and disruption resulting from unsolicited offers to purchase the company. These factors and others are discussed in more detail below and in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2016,2022, under the headings “Risk Factors,” “Forward-Looking Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Information contained herein contains certain non-GAAP financial measures. These measures are not in accordance with, or an alternative for, measures in accordance with U.S. GAAP. Such measures presented herein include adjusted earnings before interest, taxes, depreciation, amortization, non-cash stock based compensation expense, and other non-recurring income or expense (“Adjusted EBITDA”). See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.”
You should keep in mind that any forward-looking statement made by us herein, or elsewhere, speaks only as of the date on which it is made. New risks and uncertainties come up from time to time, and it is impossible to predict these events or how they may affect us. We have no obligation to update any forward-looking statements after the date hereof, except as required by federal securities laws.
Our Annual Report
In addition, information contained herein contains certain non-GAAP financial measures. These measures are not in accordance with, or an alternative for, measures in accordance with generally accepted accounting principles in the United States ("U.S. GAAP"). Such measures presented herein include adjusted earnings before interest, taxes, depreciation and amortization, and
items such as non-cash stock-based compensation, gain or loss on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxyinvestments, and information statementscertain other income or expense items, as defined, (“Adjusted EBITDA") and other material information concerning us are available freeAdjusted EBITDA Margin. See “Management’s Discussion and Analysis of charge onFinancial Condition and Results of Operations—Liquidity and Capital Resources" for definitions of these measures as well as reconciliations to the Investors page of our website at www.dhigroupinc.com. Our reports filed with the SEC are also available at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549, by calling 1-800-SEC-0330, or by visiting http://www.sec.gov.comparable GAAP measure.
Overview
We are a leading provider of data, insightssoftware products, online tools and employment connections through ourservices that deliver career marketplaces to candidates and employers in the United States. DHI’s brands, Dice and ClearanceJobs, enable recruiters and hiring managers to efficiently search, match and connect with highly skilled technologists in specialized services for professional communities including the following industry groups:fields, particularly technology and active government security clearance, financial services, energy, healthcare and hospitality. Our mission is to empower professionals and organizations to compete and win through specialized insights and relevant employment connections. Employers and recruiters use our websites and services to source and hire the most qualified professionals in select and highly-skilled occupations, while professionals use our websites and services toclearance. Professionals find the bestideal employment opportunities, inrelevant job advice and the most timely news and information aboutpersonalized data that help manage their respective areas of expertise.technologist lives.
In online recruitment, we targetspecialize in employment categories in which there has been a long-term scarcity of highly skilled, highly qualified professionals relative to market demand.demand, specifically technologists who work in a variety of industries or have active government security clearances. Our websites serve as online two-sided marketplaces where employers and recruiters findsource and recruitconnect with prospective employees, and where professionalstechnologists find relevant job opportunities, data and information to further their careers.
Our websites offer job postings, news and content, career development and recruiting services tailored to the specific needs of the professional community that each website serves.
Through our predecessors, we
We have been in the recruiting and career development business for more than 25over 30 years. Based on our operating structure, we have identified twoone reportable segments.
Our reportable segments include:
Tech-focused—segment, Tech-focused, which includes the Dice and ClearanceJobs businesses and corporate related costs. The Dice Europe,and ClearanceJobs eFinancialCareers, Brightmatter, (absorbed into Tech-focused in the third quarter of 2017),businesses and excludes getTalent.
Healthcare— Health eCareers
Dice, Dice Europe, ClearanceJobs, and eFinancialCareerscorporate related costs are aggregated into the Tech-focused reportable segment primarily because the Company does not have discrete financial information for those brands.brands or costs.
We have 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), Hospitality, Rigzone, and BioSpace (each formerly in the Global Industry Group) and getTalent services, which are reported in the "Corporate & Other" category, along with corporate-related costs which are not considered in a segment.
Recent Developments
The Company announced on May 3, 2017 plans to divest a number of its online professional communities to achieve greater focus and resource allocation toward its core tech-focused business. The planned divestitures include: BioSpace, Hcareers, Health eCareers, and Rigzone. The Company has engaged a financial advisor and continues the process of evaluating opportunities to conduct value enhancing divestitures of these non-tech businesses. There can be no assurance that the process will result in a transaction for the disposition of one or more of our businesses, or if a transaction is undertaken, as to its terms or timing.
Effective July 1, 2017, in connection the Company’s focus on the tech-based business and the planned divestitures, it organized leadership responsibilities to leverage operating capabilities more effectively on technology recruiting. This entailedNone.
combining brands that have a high focus on technology recruiting into one management structure called Tech-focused. Management believes this new structure will allow the Company to leverage its organizational capabilities to drive growth in its Tech-focused brands.
Our Revenues and Expenses
We derive the majority of our revenues from customers who pay fees, either annually, quarterly or monthly, to post jobs on our websites and to access our searchable databases of resumes. Our fees vary by customer based on the number of individual users of our databases of resumes, the number and type of job postings and profile views purchased and the termterms of the packages purchased. Our Tech-focused segmentCompany sells recruitment packages that can include both access to our databases of resumes and Open Web profiles, as well as job posting capabilities. Our Healthcare segment as well as Hcareers (included in Corporate & Other) sell job postings and access to our resume databases either as part of a package or individually. We believe the key metrics that are material to an analysis of our businesses are our total number of Dice and ClearanceJobs recruitment package customers and the revenue, on average, that these customers generate. Average monthlyThe tables below detail this customer data.
| | | | | | | | | | | | | | | | | | | | | | | |
| As of March 31, | | Increase | | Percent Change |
Recruitment Package Customers: | 2023 | | 2022 | |
Dice | 6,171 | | 6,249 | | (78) | | (1)% |
ClearanceJobs | 2,078 | | 1,928 | | 150 | | 8% |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| Average Annual Revenue per Recruitment Package Customer(1) |
| Three months ended March 31, |
| 2023 | | 2022 | | Increase | | Percent Change |
Dice | $ | 15,672 | | | $ | 14,112 | | | $ | 1,560 | | | 11 | % |
ClearanceJobs | $ | 20,520 | | | $ | 18,408 | | | $ | 2,112 | | | 11 | % |
| | | | | | | |
(1) Calculated by dividing recruitment package customer revenue by the daily average count of recruitment package customers during each month, adjusted to reflect a 30-day month. The simple average of each month is used to derive the amount for each period and then annualized to reflect 12 months. |
Dice had 6,171 recruitment package customers as of March 31, 2023, which was a decrease of 78, or 1%, and average annual revenue per recruitment package customer is calculated by dividingfor Dice increased $1,560, or 11%, from the prior year quarter. The decrease in
recruitment package customers was due to macroeconomic conditions causing customer counts to decline while the average annual revenue per recruitment package customer revenueincreased driven by the daily average count ofstrong renewal and retention rates as our larger recurring customers continue to renew with Dice. ClearanceJobs had 2,078 recruitment package customers during the month, adjustedas of March 31, 2023 compared to reflect a thirty day month. We use the simple1,928 as of March 31, 2022, an increase of 8%, and average of each month to derive the quarterly amount. At September 30, 2017 and September 30, 2016, Dice had approximately 6,600 and 7,250 total recruitment package customers in the U.S., respectively, and the average monthlyannual revenue per U.S. recruitment package customer decreasedincreased $2,112, or 11%, from $1,122the prior year quarter. The increases for ClearanceJobs were due to continued high demand for professionals with government clearance and $1,121 forconsistent product releases and enhancements driving activity on the three and nine months ended September 30, 2016, respectively, to $1,108 and $1,109 for the three and nine months ended September 30, 2017, respectively. site.
Deferred revenue, is a key metricas shown on the condensed consolidated balance sheets, reflects customer billings made in advance of services being rendered. Backlog consists of deferred revenue plus customer contractual commitments not invoiced representing the value of future services to be rendered under committed contracts. We believe backlog to be an important measure of our business as it indicates a level of sales already made that will be recognized as revenue in the future. Deferred revenue reflects the impact ofrepresents our ability to sign customers to longer term contracts. We recordedgenerate future revenue. A summary of our deferred revenue of $81.8and backlog is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Comparison to Prior Year End | | Comparison Year Over Year |
| 3/31/2023 | | 12/31/2022 | | Increase (Decrease) | | Percent Change | | 3/31/2022 | | Increase (Decrease) | | Percent Change |
Deferred Revenue | $ | 58,844 | | | $ | 50,864 | | | $ | 7,980 | | | 16 | % | | $ | 56,786 | | | $ | 2,058 | | | 4 | % |
Contractual commitments not invoiced | 65,389 | | | 66,391 | | | (1,002) | | | (2) | % | | 49,262 | | | 16,127 | | | 33 | % |
Backlog(1) | $ | 124,233 | | | $ | 117,255 | | | $ | 6,978 | | | 6 | % | | $ | 106,048 | | | $ | 18,185 | | | 17 | % |
| | | | | | | | | | | | | |
(1) Backlog consists of deferred revenue plus customer contractual commitments not invoiced representing the value of future services to be rendered under committed contracts. |
Backlog at March 31, 2023 increased $7.0 million at September 30, 2017, and $84.6$18.2 million atfrom December 31, 2016.2022 and March 31, 2022, respectively. The increase in backlog compared to December 31, 2022 and March 31, 2022 is due to the strong technology recruitment market driving bookings growth at both Dice and ClearanceJobs, a focus on signing multi-year contracts, and the Company's ongoing investments in sales and marketing. The first quarter of each year is generally the largest bookings quarter of the year, also contributing to the growth from December 31, 2022.
We
To a lesser extent, we also generate revenue from advertising on our various websites or from lead generation and marketing solutions provided to our customers. Advertisements include various forms of rich media and banner advertising, text links, sponsorships, and custom content marketing solutions. Lead generation information utilizes advertising and other methods to deliver leads to a customer.customers.
The Company’s revenues for the three and nine month periods ended September 30, 2017 declined year-over-year in each of our brands except ClearanceJobs. The declines are due to many factors including competition and evolution in the digital recruitment market, as well as macroeconomic impacts. The digital recruitment market continues to be challenged by attribution, which reflects our ability to receive the proper credit for value delivered to customers based on our customers’ internal tracking systems, contributing to lower renewal rates in recruitment packages at Dice. Macroeconomic drivers include the prolonged down-turn in the energy market resulting in revenue declines in our Rigzone business. Foreign currency and uncertainty around Brexit have also contributed to lower revenues in eFinancialCareers and Dice Europe.
The Company continues to evolve and present new software products and features to the market such as Lengo, OpenWeb, Shiftattract and others.engage qualified professionals and match them with employers. Our ability to grow our revenues will largely depend on our ability to grow our customer bases in the markets in which we operate by acquiring new recruitment package customers and advertisers while retaining a high proportion of the customers we currently serve, and to expand the breadth of services our customers purchase from us. We continue to make investments in our business and infrastructure to help us achieve our long-term growth objectives, such as the innovative products noted above.in the table below.
| | | | | | | | |
Product Releases |
2023 | | 2022 |
Dice Invite To Apply, Dice Matchscore on Jobs | | Dice New Job Apply Flow, Dice TalentSearch Time Zone Search, Dice TalentSearch Auto Talent Alerts, Dice iOS App Messaging |
ClearanceJobs Expressed Interest, ClearanceJobs Enhanced Employer Profile | | ClearanceJobs Multi-Factor Authentication, ClearanceJobs Live Video, ClearanceJobs Scheduled Broadcast Messages |
Other material factors that may affect our results of operations include our ability to attract qualified professionals that become engaged with our websites and our ability to attract customers with relevant job opportunities. The more qualified professionals that use our websites, the more attractive our websites become to employers and advertisers, which in turn makes them more likely to become our customers, resulting positively on our results of operations. If we are unable to continue to attract qualified professionals to engage with our websites,two-sided marketplaces, our customers may no longer find our services attractive, which could have a negative impact on our results of operations. Additionally, we need to ensure that our websites remain relevant in order
to attract qualified professionals to our websites and to engage them in high-value tasks, such as posting resumes and/or applying tofor jobs.
The largest components of our expenses are personnel costs and marketing and sales expenditures. Personnel costs consist of salaries, benefits, and incentive compensation for our employees, including commissions for salespeople. Personnel costs are categorized in our statement of operations based on each employee’s principal function. Personnel costs incurred during the application development stage of internal use software and website development are recorded as fixed assets and amortized to depreciation expense in the statement of operations over the estimated useful life of the asset. Marketing expenditures primarily consist of online advertising, brand promotion and lead generation to employers and job seekers.
Critical Accounting PoliciesEstimates
There have been no material changes to our critical accounting policies other than ASU No. 2016-09 as described in Note 2 in the Notes to the Condensed Consolidated Financial Statements,estimates as compared to the critical accounting policies described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016.2022.
Three Months Ended September 30, 2017March 31, 2023 Compared to the Three Months Ended September 30, 2016March 31, 2022
Revenues
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, | | Increase | | Percent Change | | | |
2023 | | 2022 | | | |
| (in thousands, except percentages) | | | |
| | | | | | | | | | |
Dice(1) | $ | 26,910 | | | $ | 24,634 | | | $ | 2,276 | | | 9 | % | | | |
ClearanceJobs | 11,710 | | | 9,700 | | | 2,010 | | | 21 | % | | | |
Total revenues | $ | 38,620 | | | $ | 34,334 | | | $ | 4,286 | | | 12 | % | | | |
| | | | | | | | | | |
(1) Includes Dice and Career Events | | |
|
| | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Increase (Decrease) | | Percent Change |
2017 | | 2016 | |
| (in thousands, except percentages) |
Tech-focused | $ | 39,814 |
| | $ | 42,739 |
| | $ | (2,925 | ) | | (6.8 | )% |
Healthcare | 6,462 |
| | 6,735 |
| | (273 | ) | | (4.1 | )% |
Corporate & Other | 6,148 |
| | 6,599 |
| | (451 | ) | | (6.8 | )% |
Total revenues | $ | 52,424 |
| | $ | 56,073 |
| | $ | (3,649 | ) | | (6.5 | )% |
WeFor the three months ended March 31, 2023 we experienced a decreasean increase in revenue in the Tech-focused segment of $2.9$4.3 million, or 6.8%12%. Revenue at Dice decreased by $2.9increased $2.3 million, or 9%, compared to the same period in 2016, primarily2022 due to the decline in recruitment package customer count in the U.S. from 7,250 at September 30, 2016 to 6,600 at September 30, 2017. eFinancialCareers revenue decreased by $0.5strong renewal and retention rates. Revenues for ClearanceJobs increased $2.0 million, or 21%, as compared to the same period in 2016 due2022, primarily to lowerdriven by continued high demand for professionals with government clearance and consistent product releases and enhancements driving activity on the site.
Cost of Revenues
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, | | Increase | | Percent Change |
2023 | | 2022 | |
| (in thousands, except percentages) |
Cost of revenues | $ | 4,912 | | | $ | 4,099 | | | $ | 813 | | | 20 | % |
Percentage of revenues | 12.7 | % | | 11.9 | % | | | | |
Cost of revenues increased $0.8 million, or 20%, driven by an increase of $0.7 million from higher compensation related costs, primarily from higher headcount, partially offset by an increase in capitalized labor of $0.1 million, which decreases operating expenses. Operational costs, including the North America region. Revenue for ClearanceJobsamortization of cloud computing costs, increased by $0.2 million.
Product Development Expenses
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, | | Increase | | Percent Change |
2023 | | 2022 | |
| (in thousands, except percentages) |
Product development | $ | 4,694 | | | $ | 3,942 | | | $ | 752 | | | 19 | % |
Percentage of revenues | 12.2 | % | | 11.5 | % | | | | |
Product development expenses increased $0.8 million, foror 19%, driven by an increase of $1.1 million from higher compensation related costs, primarily from higher headcount, partially offset by an increase in capitalized labor of $0.3 million, which decreases operating expenses. Operational costs, including consulting, decreased by $0.1 million.
Sales and Marketing Expenses
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, | | Increase | | Percent Change |
2023 | | 2022 | |
| (in thousands, except percentages) |
Sales and marketing | $ | 16,060 | | | $ | 13,941 | | | $ | 2,119 | | | 15 | % |
Percentage of revenues | 41.6 | % | | 40.6 | % | | | | |
Sales and marketing expenses increased $2.1 million, or 15% from the three months ended September 30, 2017 assame period in 2022. This increase was driven by a $1.9 million increase in compensation related costs from higher headcount and quota attainment versus sales plan and a $0.3 million increase in operational costs, including Company events, consulting and travel and entertainment. The increase was partially offset by $0.1 million decrease in discretionary marketing expenses.
General and Administrative Expenses
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, | | Increase | | Percent Change |
2023 | | 2022 | |
| (in thousands, except percentages) |
General and administrative | $ | 8,208 | | | $ | 7,766 | | | $ | 442 | | | 6 | % |
Percentage of revenues | 21.3 | % | | 22.6 | % | | | | |
General and administrative expenses increased $0.4 million, or 6% from the prior year. The increase was driven by a $0.7 million increase in stock-based compensation. The increase in compensation expense is primarily due to higher achievement against targets related to the Company's PSUs. See also Note 12 of the notes to condensed consolidated financial statements. The increase was partially offset by a $0.2 million decrease in compensation related costs from lower headcount.
Depreciation
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, | | Increase | | Percent Change |
2023 | | 2022 | |
(in thousands, except percentages) |
Depreciation | $ | 4,173 | | | $ | 3,958 | | | $ | 215 | | | 5 | % |
Percentage of revenues | 10.8 | % | | 11.5 | % | | | | |
Depreciation expense increased $0.2 million, or 5%, compared to the same period in 2016, primarily due to increased volume and pricing supported by favorable market conditions and enhanced product offerings.
The Healthcare segment revenue decreased $0.3 million, or 4.1%. This decrease was primarily due to a decrease in usage of job posting products. Corporate & Other decreased $0.5 million, or 6.8% primarily due to macroeconomic conditions in Rigzone.
|
| | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Decrease | | Percent Change |
2017 | | 2016 | |
| (in thousands, except percentages) |
Cost of revenues | $ | 7,616 |
| | $ | 7,943 |
| | $ | (327 | ) | | (4.1 | )% |
Percentage of revenues | 14.5 | % | | 14.2 | % | | | | |
Cost of revenues in the Tech-focused segment decreased $275,000 primarily due to lower compensation related costs.
Product Development Expenses
|
| | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Increase | | Percent Change |
2017 | | 2016 | |
| (in thousands, except percentages) |
Product development | $ | 6,423 |
| | $ | 6,018 |
| | $ | 405 |
| | 6.7 | % |
Percentage of revenues | 12.3 | % | | 10.7 | % | | | | |
Product development expenses increased primarily due to higher compensation related costs at the Tech-focused segment of $0.9 million consistent with the Company's strategy, partially offset by reductions in compensation related costs at Hospitality and Energy, in Corporate & Other of $467,000.
Sales and Marketing Expenses |
| | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Increase | | Percent Change |
2017 | | 2016 | |
| (in thousands, except percentages) |
Sales and marketing | $ | 19,988 |
| | $ | 19,425 |
| | $ | 563 |
| | 2.9 | % |
Percentage of revenues | 38.1 | % | | 34.6 | % | | | | |
The Tech-focused segment increased by $1.1 million due to increased discretionary marketing costs of $0.9 million focused on engaging with and attracting technology professionals. This increase was partially offset by decreases in Corporate & Other in discretionary marketing and compensation related costs of $513,000 primarily in Hcareers.
General and Administrative Expenses
|
| | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Decrease | | Percent Change |
2017 | | 2016 | |
| (in thousands, except percentages) |
General and administrative | $ | 9,454 |
| | $ | 10,101 |
| | $ | (647 | ) | | (6.4 | )% |
Percentage of revenues | 18.0 | % | | 18.0 | % | | | | |
The decrease was primarily due to lower stock-based compensation expense in the Tech-focused segment, which was due to the lower value of equity awards in the current period and forfeitures of prior awards granted.
|
| | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Increase | | Percent Change |
2017 | | 2016 | |
(in thousands, except percentages) |
Depreciation | $ | 2,576 |
| | $ | 2,478 |
| | $ | 98 |
| | 4.0 | % |
Percentage of revenues | 4.9 | % | | 4.4 | % | | | | |
2022. The increase was primarily due todriven by higher levels of capital expenditures focused at the Tech-focused segment, includingcapitalized internal development costs of internally developed software.
Amortization of Intangible Assets
|
| | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Decrease | | Percent Change |
2017 | | 2016 | |
| (in thousands, except percentages) |
Amortization | $ | 554 |
| | $ | 1,570 |
| | $ | (1,016 | ) | | (64.7 | )% |
Percentage of revenues | 1.1 | % | | 2.8 | % | | | | |
Amortization expense decreased due to certain intangible assets at the Tech-focused segmentthroughout 2022 and at Corporate & Other becoming fully amortized or written off during the prior year.
Impairment of Goodwill
Goodwill of $15.4 million related to Rigzone, the Energy reporting unit, was written down to zero in the thirdfirst quarter of
2016 due to the decline in demand for energy professionals, 2023, which has significantly decreased the use of our energy industry
job posting websites and related services.
Impairment of Intangible and Fixed Assets
Unamortized development costs of $2.2 million related to the Company’s getTalent product were written offincreased depreciation in the thirdfirst quarter of 2017 as the Company terminated the product offering. Unamortized intangible assets of $9.3 million related to Rigzone, the Energy reporting unit, were written off in the third quarter of 2016 as a result of the decline in demand for energy professionals, which has significantly decreased the use of our energy industry job posting websites and related services.2023.
Disposition Related and Other Costs |
| | | | | | | | | | | | | |
| Three Months Ended September 30, | | Increase | | Percent Change |
2017 | | 2016 | |
(in thousands, except percentages) |
Disposition related and other costs | $ | 1,049 |
| | $ | — |
| | $ | 1,049 |
| | n.m. |
Percentage of revenues | 2.0 | % | | — | % | | | | |
The disposition related and other costs, as described in Note 9 to the Condensed Consolidated Financial Statements, of $1.0 million in 2017 are primarily due to severance and other related costs in connection with the current divestiture process and the Company's Tech-focused strategy.
Operating Income
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, | | Decrease | | Percent Change |
2023 | | 2022 | |
| (in thousands, except percentages) |
Revenue | $ | 38,620 | | | $ | 34,334 | | | $ | 4,286 | | | 12 | % |
Operating income (loss) | 573 | | | 628 | | | (55) | | | (9) | % |
Operating margin | 1.5 | % | | 1.8 | % | | | | |
Operating income for the three months ended September 30, 2017March 31, 2023 was $2.5$0.6 million, a positive margin of 4.8%1.5%, compared to $(16.1)operating income of $0.6 million, a positive margin of (28.7)%1.8%, for the same period in 2016, an increase2022, a decrease of $18.9$0.1 million. The increaseddecrease in operating income and percentage margin arewas driven by higher operating costs as the Company invests in its product and sales and marketing, primarily due to the impairment of goodwill and intangible assets at Rigzone, the Energy reporting unit, of $24.6 million during the prior year,through higher headcount in those areas, for future growth. The decrease was partially offset by lower revenuehigher revenues.
Interest Expense
|
| | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Increase | | Percent Change |
2017 | | 2016 | |
| (in thousands, except percentages) |
Interest expense | $ | 1,173 |
| | $ | 901 |
| | $ | 272 |
| | 30.2 | % |
Percentage of revenues | 2.2 | % | | 1.6 | % | | | | |
Income from Equity Method InvestmentInterest expense for | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, | | Increase | | Percent Change |
2023 | | 2022 | |
| (in thousands, except percentages) |
Income from equity method investment | $ | 171 | | | $ | 155 | | | $ | 16 | | | 10 | % |
Percentage of revenues | 0.4 | % | | 0.5 | % | | | | |
During the three months ended September 30, 2017 was higher primarily dueMarch 31, 2023 and 2022, the Company recorded $0.2 million of income related to unamortized debt issuance costsits proportionate share of $410,000 being written off in the current period following the borrowing capacity reductioneFC's net income. The Company records its proportionate share of the Credit Agreement from $250 million to $150 million. This increase was partially offset by the lower weighted-average debt outstanding in theeFC's net income three months ended September 30, 2017, combined with higher interest rates.in arrears.
Income Taxes
|
| | | | | | | |
| Three Months Ended September 30, |
2017 | | 2016 |
(in thousands, except percentages) |
Income (loss) before income taxes | $ | 1,362 |
| | $ | (16,985 | ) |
Income tax expense (benefit) | 304 |
| | (144 | ) |
Effective tax rate | 22.3 | % | | 0.8 | % |
The effective tax rate in the current year was lower than the 35% statutory rate primarily due to a $171,000 decrease in the valuation allowance related to the realizability of US foreign tax credits in future years. The rate in the prior year was lower than the statutory rate because of tax expense of $5.3 million related to a non-deductible impairment of goodwill.
Earnings (loss) per Share
Earnings per share was $0.02 and $(0.35) for the three month periods ended September 30, 2017 and 2016, respectively. The increase was primarily due to a decrease in operating expenses in the current period, which was due to the impairment of goodwill and intangible assets at Rigzone, the Energy reporting unit, of $24.6 million during the prior year.
Nine Months Ended September 30, 2017 Compared to the Nine Months Ended September 30, 2016
Revenues
|
| | | | | | | | | | | | | | |
| Nine Months Ended September 30, | | Increase (Decrease) | | Percent Change |
2017 | | 2016 | |
| (in thousands, except percentages) |
Tech-focused | $ | 118,638 |
| | $ | 128,876 |
| | $ | (10,238 | ) | | (7.9 | )% |
Healthcare | 19,741 |
| | 20,647 |
| | $ | (906 | ) | | (4.4 | )% |
Corporate & Other | 18,635 |
| | 22,509 |
| | (3,874 | ) | | (17.2 | )% |
Total revenues | $ | 157,014 |
| | $ | 172,032 |
| | $ | (15,018 | ) | | (8.7 | )% |
We experienced a decrease in revenue in the Tech-focused segment of $10.2 million, or 7.9%. Revenue at Dice decreased by $9.1 million compared to the same period in 2016, primarily due to the decline in recruitment package customer count in the U.S. from 7,250 at September 30, 2016 to 6,600 at September 30, 2017. Revenues for Dice Europe decreased $814,000 due to closing the Benelux region in the fourth quarter of 2016 and the negative currency impact of $316,000. eFinancialCareers revenue decreased by $2.5 million as compared to the same period in 2016 due to lower activity in the UK and North America regions and the negative impact of foreign exchange in 2017 of $1.4 million. These revenue declines were partially offset by ClearanceJobs, which increased by $2.4 million as compared to the same period of 2016, primarily due to increased volume and pricing supported by favorable market conditions and enhanced product offerings.
Corporate & Other decreased by $3.9 million, or 17.2%. Rigzone decreased $2.1 million due to macroeconomic conditions in the energy industry, Hcareers decreased by $597,000 due to increased competition in the hospitality market, and due to the sale of Slashdot Media in January 2016. The Healthcare segment decreased by $906,000, or 4.4%, due to decreased usage of job posting products.
|
| | | | | | | | | | | | | | |
| Nine Months Ended September 30, | | Decrease | | Percent Change |
2017 | | 2016 | |
| (in thousands, except percentages) |
Cost of revenues | $ | 22,681 |
| | $ | 24,557 |
| | $ | (1,876 | ) | | (7.6 | )% |
Percentage of revenues | 14.4 | % | | 14.3 | % | | | | |
Cost of revenues in Corporate & Other decreased $1.1 million, including a decrease at Slashdot Media of $252,000 as the business was sold in January 2016 and due to $860,000 from lower compensation and infrastructure related costs. Healthcare decreased $453,000 primarily due to decreased royalty payments from lower activity with healthcare associations. Tech-focused decreased $331,000 due to lower compensation related costs.
Product Development Expenses
|
| | | | | | | | | | | | | | |
| Nine Months Ended September 30, | | Decrease | | Percent Change |
2017 | | 2016 | |
| (in thousands, except percentages) |
Product development | $ | 19,230 |
| | $ | 19,323 |
| | $ | (93 | ) | | (0.5 | )% |
Percentage of revenues | 12.2 | % | | 11.2 | % | | | | |
Product Development costs at the Tech-focused segment increased $1.3 million primarily due to compensation related costs redirected to the Company's strategy while Corporate & Other decreased $1.0 million from lower compensation related costs at Corporate, Rigzone, and Hcareers of $419,000, $358,000 and $189,000, respectively, partially offset the Tech-focused increase. Slashdot decreased $395,000 as the business was sold in January 2016.
Sales and Marketing Expenses |
| | | | | | | | | | | | | | |
| Nine Months Ended September 30, | | Increase | | Percent Change |
2017 | | 2016 | |
| (in thousands, except percentages) |
Sales and marketing | $ | 59,638 |
| | $ | 58,573 |
| | $ | 1,065 |
| | 1.8 | % |
Percentage of revenues | 38.0 | % | | 34.0 | % | | | | |
Sales and marketing costs increased due to higher discretionary marketing at Tech-focused of $2.3 million, partially offset by lower compensation related costs of $493,000 and $425,000 at Rigzone and Hcareers within Corporate & Other, respectively. Slashdot decreased $137,000 as the business was sold in January 2016.
General and Administrative Expenses
|
| | | | | | | | | | | | | | |
| Nine Months Ended September 30, | | Decrease | | Percent Change |
2017 | | 2016 | |
| (in thousands, except percentages) |
General and administrative | $ | 30,779 |
| | $ | 32,822 |
| | $ | (2,043 | ) | | (6.2 | )% |
Percentage of revenues | 19.6 | % | | 19.1 | % | | | | |
General and administrative expenses decreased in the current period by $2.0 million compared to the same period in 2016 due to a decrease in stock-based compensation expense of $2.5 million, primarily resulting from the lower value of equity awards in the current period, forfeitures of prior awards granted, and acceleration of $900,000 at Slashdot Media in 2016, which is included in disposition related and other costs. In addition, the Tech-focused segment incurred lower compensation costs in the current period of $345,000.
|
| | | | | | | | | | | | | | |
| Nine Months Ended September 30, | | Increase | | Percent Change |
2017 | | 2016 | |
(in thousands, except percentages) |
Depreciation | $ | 7,703 |
| | $ | 7,639 |
| | $ | 64 |
| | 0.8 | % |
Percentage of revenues | 4.9 | % | | 4.4 | % | | | | |
Depreciation expense for the nine months ended September 30, 2017 approximates the same period of the prior year.
Amortization of Intangible Assets
|
| | | | | | | | | | | | | | |
| Nine Months Ended September 30, | | Decrease | | Percent Change |
2017 | | 2016 | |
| (in thousands, except percentages) |
Amortization | $ | 1,686 |
| | $ | 6,106 |
| | $ | (4,420 | ) | | (72.4 | )% |
Percentage of revenues | 1.1 | % | | 3.5 | % | | | | |
Amortization expense decreased by $4.4 million due to certain intangible assets at the Tech-focused segment and at Corporate & Other becoming fully amortized or written off during the prior year.
Impairment of Goodwill
Goodwill of $15.4 million related to Rigzone, the Energy reporting unit, was written down to zero in the third quarter of
2016 due to the decline in demand for energy professionals, which has significantly decreased the use of our energy industry
job posting websites and related services.
Impairment of Intangible and Fixed Assets
Unamortized development costs of $2.2 million related to the Company’s getTalent product were written off in the third quarter of 2017 as the Company terminated the product offering. Unamortized intangible assets of $9.3 million related to Rigzone, the Energy reporting unit, were written off in the third quarter of 2016 as a result of the decline in demand for energy professionals, which has significantly decreased the use of our energy industry job posting websites and related services.
Disposition Related and Other Costs |
| | | | | | | | | | | | | | |
| Nine Months Ended September 30, | | Decrease | | Percent Change |
2017 | | 2016 | |
(in thousands, except percentages) |
Disposition related and other costs | $ | 2,236 |
| | $ | 3,347 |
| | $ | (1,111 | ) | | (33.2 | )% |
Percentage of revenues | 1.4 | % | | 1.9 | % | | | | |
The disposition related and other costs, as described in Note 9 to the Condensed Consolidated Financial Statements, of $2.2 million in 2017 are primarily due to severance and related costs of $1.8 million, and professional fees and other costs of $0.5 million in connection with the current divestiture process and the tech-focused strategy.
The disposition related and other costs of $3.3 million in 2016 are primarily due to the sale of Slashdot Media, including severance of $981,000, stock based compensation acceleration of $900,000, and a loss on sale of $639,000. Also included in disposition related and other costs is other severance primarily related to the consolidation of the Global Industry Group (dissolved June 30, 2017) of $827,000.
Operating Income
Operating income for the nine months ended September 30, 2017 was $10.8 million, for a margin of 6.9%, as compared to a loss of $(5.0) million, a margin of (2.9)%, for the same period in 2016, an increase of $16.1 million. The increase was primarily due to impairment of goodwill and intangible assets at Rigzone, the Energy reporting unit, of $24.6 million in 2016 and the sale of Slashdot Media in January 2016, partially offset by lower revenue of $3.4 million and the fixed asset impairment of $2.2 million in 2017 related to the getTalent product.
Interest Expense and Other
|
| | | | | | | | | | | | | |
| Nine Months Ended September 30, | | Increase | | Percent Change |
2017 | | 2016 | |
| (in thousands, except percentages) |
Interest expense | 2,777 |
| | $ | 2,593 |
| | $ | 184 |
| | 7.1 | % |
Percentage of revenues | 1.8 | % | | 1.5 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, | | Increase | | Percent Change |
2023 | | 2022 | |
| (in thousands, except percentages) |
Interest expense and other | $ | 798 | | | $ | 245 | | | $ | 553 | | | 226 | % |
Percentage of revenues | 2.1 | % | | 0.7 | % | | | | |
Interest expense for the nine months ended September 30, 2017and other increased from the same period in 20162022, primarily due to $410,000higher debt outstanding on our revolving credit facility during the current period and higher interest rates.
Income Taxes
| | | | | | | | | | | |
| Three Months Ended March 31, |
2023 | | 2022 |
(in thousands, except percentages) |
Income (loss) before income taxes | $ | (54) | | | $ | 538 | |
Income tax benefit | (514) | | | (763) | |
Effective tax rate | 951.9 | % | | (141.8) | % |
Our effective tax rate for the three months ended March 31, 2023 and 2022 differed from the U.S. statutory rate due to tax benefits of deferred financing costs being charged to$0.5 million and $0.8 million, respectively, from the vesting of share-based compensation awards.
Earnings per Share
| | | | | | | | | | | |
| Three Months Ended March 31, |
| 2023 | | 2022 |
| (in thousands, except per share amounts) |
| | | |
| | | |
Net Income | $ | 460 | | | $ | 1,301 | |
| | | |
Weighted-average shares outstanding - basic | 43,886 | | | 44,702 | |
Weighted-average shares outstanding - diluted | 45,240 | | | 47,170 | |
| | | |
| | | |
| | | |
Diluted earnings per share | $ | 0.01 | | | $ | 0.03 | |
Diluted earnings per share was $0.01 and $0.03 for the three months ended March 31, 2023 and 2022, respectively. The decrease was driven by lower operating income and an increase in interest expense in the current period following the borrowing capacity reduction of the Credit Agreement from $250 million to $150 million. This increase was partially offset by the lower weighted-average debt outstanding in the nine months ended September 30, 2017, combined with higher interest rates.year.
Income Taxes
23
|
| | | | | | | |
| Nine Months Ended September 30, |
2017 | | 2016 |
(in thousands, except percentages) |
Income (loss) before income taxes | $ | 8,048 |
| | $ | (7,582 | ) |
Income tax expense | 3,828 |
| | 3,294 |
|
Effective tax rate | 47.6 | % | | (43.4 | )% |
The effective tax rate in the current period was higher than the 35% statutory rate primarily due to tax expense of $910,000 related to share-based compensation awards which vested or were settled in 2017, related to the adoption of ASU No. 2016-09, as discussed in Note 2 in the Notes to the Condensed Consolidated Financial Statements. The rate in the prior period was lower than the statutory rate because of tax expense of $5.3 million related to a non-deductible impairment of goodwill.
Earnings (loss) per Share
Earnings (loss) per share was $0.09 and $(0.22) for the nine month periods ended September 30, 2017 and 2016, respectively. The lower prior period earnings per share was primarily the result of the impairment of goodwill and intangible assets of $24.6 million in the prior period.
Liquidity and Capital Resources
Non-GAAP Financial Measures
We have provided certain non-GAAP financial information as additional informationmeasures for our operating results. These measures are not in accordance with, or an alternative for, measures in accordance with U.S. GAAP and may be different from similarly titled non-GAAP measures reported by other companies. We believe the presentation of non-GAAP measures, such as Adjusted EBITDA and Adjusted EBITDA Margin, provides useful information to management and investors regarding certain financial and business trends relating to our financial condition and results of operations.
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA is aand Adjusted EBITDA Margin are non-GAAP metricmeasures used by management to measure operating performance. Management uses Adjusted EBITDA and Adjusted EBITDA Margin as a performance measuremeasures for internal monitoring and planning, including preparation of annual budgets, analyzing investment decisions and evaluating profitability and performance comparisons between us and our competitors. WeThe Company also use this measureuses these measures to calculate amounts of performance based compensation under the senior management incentive bonus program. Adjusted EBITDA as defined in our Credit Agreement as “Consolidated EBITDA,” represents net income plus (to the extent deducted in calculating such net income) interest expense, income tax expense, depreciation and amortization, and items such as non-cash stock option expenses,stock-based compensation expense, losses resulting from certain dispositions outside the ordinary course of business including prior negative operating results of those divested businesses, certain writeoffswrite-offs in connection with indebtedness, impairment charges with respect to long-lived assets, expenses incurred in connection with an equity offering or any other offering of securities by the Company, extraordinary or non-recurring non-cash expenses or losses, losses from equity method investments, transaction costs in connection with the Credit Agreement up to $250,000,credit agreement, deferred revenues written off in connection with acquisition purchase accounting adjustments, writeoffwrite-off of non-cash stockstock-based compensation expense, severance and business interruption insurance proceeds,retention costs related to dispositions and reorganizations of the Company, and losses related to legal claims and fees that are unusual in nature or infrequent, minus (to the extent included in calculating such net income) non-cash income or gains, including income from equity method investments, interest income, business interruption insurance proceeds, and interest income.any income or gain resulting from certain dispositions outside the ordinary course of business, including prior positive operating results of those divested businesses, and gains related to legal claims that are unusual in nature or infrequent.
Adjusted EBITDA Margin is computed as Adjusted EBITDA divided by Revenues.
We also consider Adjusted EBITDA and Adjusted EBITDA Margin, as defined above, to be an important indicatorindicators to investors because it providesthey provide information related to our ability to provide cash flows to meet future debt service, capital expenditures, and working capital requirements, and to fund future growth, as well as to monitor compliance with financial covenants.growth. We present Adjusted EBITDA and Adjusted EBITDA Margin as a supplemental performance measuremeasures because we believe that this measure providesthese measures provide our boardBoard of directors,Directors (the "Board"), management and investors with additional information to measure our performance, provide comparisons from period to period and company to company by excluding potential differences caused by variations in capital structures (affecting interest expense) and tax positions (such as the impact on periods or companies of changes in effective tax rates or net operating losses), and to estimate our value.
We present Adjusted EBITDA because covenants in our Credit Agreement contain ratios based on this measure. Our Credit Agreement is material to us because it is one of our primary sources of liquidity. If our Adjusted EBITDA were to decline below certain levels, covenants in our Credit Agreement that are based on Adjusted EBITDA may be violated and could cause a default and acceleration of payment obligations under our Credit Agreement. See Note 6 “Indebtedness” for additional information on the covenants for our Credit Agreement.
Adjusted EBITDA is not a measurement of our financial performance under GAAP and should not be considered as an alternative to net income, operating income or any other performance measures derived in accordance with GAAP or as an alternative to cash flow from operating activities as a measure of our profitability or liquidity.
We understand that although Adjusted EBITDA isand Adjusted EBITDA Margin are frequently used by securities analysts, lenders and others in their evaluation of companies, Adjusted EBITDA hasand Adjusted EBITDA Margin have limitations as an analytical tool,tools, and you should not consider itthem in isolation, or as a substitute for analysis of our liquidity or results as reported under GAAP. Some limitations are:
•Adjusted EBITDA doesand Adjusted EBITDA Margin do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments;
•Adjusted EBITDA doesand Adjusted EBITDA Margin do not reflect changes in, or cash requirements for, our working capital needs;
•Adjusted EBITDA doesand Adjusted EBITDA Margin do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments on yourour debt;
•Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized often will have to be replaced in the future, and Adjusted EBITDA doesand Adjusted EBITDA Margin do not reflect any cash requirements for such replacements; and
•Other companies in our industry may calculate Adjusted EBITDA and Adjusted EBITDA Margin differently than we do, limiting itstheir usefulness as a comparative measure.measures.
To compensate for these limitations, management evaluates our liquidity by considering the economic effect of excluded expense items independently, as well as in connection with its analysis of cash flows from operations and through the use of
other financial measures, such as capital expenditure budget variances, investment spending levels and return on capital analysis.
Adjusted EBITDA and Adjusted EBITDA Margin are not measurements of our financial performance under GAAP and should not be considered as an alternative to revenue, operating income, net income, net income margin, cash provided by operating activities, or any other performance measures derived in accordance with GAAP as a measure of our profitability or liquidity.
A reconciliation of Adjusted EBITDA for the ninethree months ended September 30, 2017March 31, 2023 and 20162022 follows (in thousands):
| | | | | | | | | | | | | | | | |
| Three Months Ended March 31, | |
Dollars | | | |
2023 | | 2022 | | | | | |
Reconciliation of Net Income to Adjusted EBITDA: | | | | | | | | |
Net income | $ | 460 | | | $ | 1,301 | | | | | | |
Interest expense | 798 | | | 245 | | | | | | |
Income tax benefit | (514) | | | (763) | | | | | | |
Depreciation | 4,173 | | | 3,958 | | | | | | |
Non-cash stock-based compensation | 2,887 | | | 2,235 | | | | | | |
Income from equity method investment | (171) | | | (155) | | | | | | |
Severance and related costs | 421 | | | 109 | | | | | | |
Adjusted EBITDA | $ | 8,054 | | | $ | 6,930 | | | | | | |
| | | | | | | | |
Reconciliation of cash provided by operating activities to Adjusted EBITDA | | | | | | | | |
Net cash provided by operating activities | $ | 11 | | | $ | 9,218 | | | | | | |
Interest expense | 798 | | | 245 | | | | | | |
Amortization of deferred financing costs | (36) | | | (37) | | | | | | |
Income tax benefit | (514) | | | (763) | | | | | | |
Deferred income taxes | 848 | | | 1,823 | | | | | | |
Change in accrual for unrecognized tax benefits | (60) | | | (93) | | | | | | |
Change in accounts receivable | 4,153 | | | 3,820 | | | | | | |
Change in deferred revenue | (7,981) | | | (10,640) | | | | | | |
Severance and related costs | 421 | | | 109 | | | | | | |
Changes in working capital and other | 10,414 | | | 3,248 | | | | | | |
Adjusted EBITDA | $ | 8,054 | | | $ | 6,930 | | | | | | |
A reconciliation of Adjusted EBITDA Margin for the three months ended March 31, 2023 and 2022 follows (in thousands):
| | | | | | | | | | | |
| Three Months Ended March 31, |
| 2023 | | 2022 |
Revenues | $ | 38,620 | | | $ | 34,334 | |
| | | |
Net income | $ | 460 | | | $ | 1,301 | |
Net income margin(1) | 1 | % | | 4 | % |
| | | |
Adjusted EBITDA | $ | 8,054 | | | $ | 6,930 | |
Adjusted EBITDA Margin(1) | 21 | % | | 20 | % |
(1) Net income margin and Adjusted EBITDA Margin are calculated by dividing the respective measure by that period's revenues. |
|
| | | | | | | |
| For the nine months ended September 30, |
2017 | | 2016 |
Reconciliation of Net Income to Adjusted EBITDA: | | | |
Net income | $ | 4,220 |
| | $ | (10,876 | ) |
Interest expense | 2,777 |
| | 2,593 |
|
Income tax expense | 3,828 |
| | 3,294 |
|
Depreciation | 7,703 |
| | 7,639 |
|
Amortization of intangible assets | 1,686 |
| | 6,106 |
|
Impairment of goodwill | — |
| | 15,369 |
|
Non-cash stock compensation expense | 6,275 |
| | 7,850 |
|
Impairment of fixed and intangible assets | 2,226 |
| | 9,252 |
|
Severance--Slashdot Media | — |
| | 981 |
|
Accelerated stock based compensation expense--Slashdot Media | — |
| | 900 |
|
Loss on sale of business | — |
| | 639 |
|
Costs related to strategic alternatives process | 807 |
| | — |
|
Costs related to divestitures | 442 |
| | — |
|
Other | 10 |
| | 33 |
|
Adjusted EBITDA | $ | 29,974 |
| | $ | 43,780 |
|
| | | |
Reconciliation of Operating Cash Flows to Adjusted EBITDA: | | | |
Net cash provided by operating activities | $ | 27,179 |
| | $ | 37,012 |
|
Interest expense | 2,777 |
| | 2,593 |
|
Amortization of deferred financing costs | (642 | ) | | (243 | ) |
Income tax expense | 3,828 |
| | 3,294 |
|
Deferred income taxes | 23 |
| | 1,977 |
|
Severance--Slashdot Media | — |
| | 981 |
|
Change in accrual for unrecognized tax benefits | (2,358 | ) | | (166 | ) |
Change in accounts receivable | (10,607 | ) | | (8,047 | ) |
Change in deferred revenue | 3,774 |
| | 493 |
|
Costs related to strategic alternatives process | 807 |
| | — |
|
Costs related to divestitures | 442 |
| | — |
|
Changes in working capital and other | 4,751 |
| | 5,886 |
|
Adjusted EBITDA | $ | 29,974 |
| | $ | 43,780 |
|
Liquidity and Capital Resources
Cash Flows
We have summarized our cash flows for the ninethree months ended September 30, 2017March 31, 2023 and 20162022 follows (in thousands).:
| | | | | | | | | | | |
| Three Months Ended March 31, |
2023 | | 2022 |
Cash from operating activities | $ | 11 | | | $ | 9,218 | |
Cash used in investing activities | $ | (4,833) | | | $ | (4,091) | |
Cash from (used in) financing activities | $ | 7,184 | | | $ | (1,701) | |
|
| | | | | | | |
| For the nine months ended September 30, |
2017 | | 2016 |
Cash from operating activities | $ | 27,179 |
| | $ | 37,012 |
|
Cash used in investing activities | (10,660 | ) | | (6,032 | ) |
Cash used in financing activities | (17,722 | ) | | (35,294 | ) |
We have financed our operations primarily through cash provided by operating activities and borrowings under our revolving credit facility. At September 30, 2017,March 31, 2023, we had cash of $22.1$5.4 million compared to $23.0$3.0 million at December 31, 2016. Cash held by foreign subsidiaries totaled approximately $17.7 million at September 30, 2017, of which $1.4 million was held by the Canada subsidiary. The remaining cash of $16.3 million held outside the United States and Canada is indefinitely reinvested. Cash balances and cash generation in the United States, along with the unused portion of our revolving credit facility, are sufficient to maintain liquidity and meet our obligations without being dependent on cash and earnings from our foreign subsidiaries. Because the Company has asserted that the foreign earnings, excluding Canada, are indefinitely reinvested, we have not recorded a deferred tax liability related to such foreign earnings. The Company has not disclosed the unrecorded deferred tax liability as determination of the liability is not practicable.2022.
Liquidity
Our principal internal sources of liquidity are cash, as well as the cash flow that we generate from our operations. In addition, we had $81.0$54.0 million in borrowing capacity under our $150.0$100.0 million Credit Agreement, as defined below, at September 30, 2017,March 31, 2023, subject to certain availability limits including our consolidated leverage ratio, which generally limits borrowings to three2.5 times annual Adjusted EBITDA levels.levels, as defined in the Credit Agreement. We believe that our existing U.S. and Canadian cash, cash generated from our continuing operations and available borrowings under our Credit Agreement will be sufficient to satisfy our currently anticipated cash requirements through at least the next 12 months and the foreseeable future thereafter. However, it is possible that one or more lenders under the Credit Agreement may refuse or be unable to satisfy their commitment to lend to us, we may violate one or more of our covenants or financial ratios contained in our Credit Agreement or we may need to refinance our debt and be unable to do so. In addition, our liquidity could be negatively affected by a decrease in demand for our products and services and the ability of our customers to pay for current or future services. We may also make acquisitions and may need to raise additional capital through future debt financings or equity offerings to the extent necessary to fund such acquisitions, which we may not be able to do on a timely basis or on terms satisfactory to us or at all.
Operating Activities
Net cash flows from operating activities primarily consist of net income adjusted for certain non-cash items, including depreciation, amortization, changes in deferred tax assets and liabilities, stock basedstock-based compensation, income from equity method investments, gain or impairments on investments, and the effect of changes in working capital. Net cash flows from operating activities were $27.2$0.0 million and $37.0$9.2 million for the nine monththree-month periods ended September 30, 2017March 31, 2023 and 2016,2022, respectively. Cash inflow from operations is driven by earnings and is dependent on the amount and timing of payments to vendors and employees and billings to and cash collectioncollections from our customers. The cashCash provided by operating activities during the 20172023 period decreased $9.2 million compared to the same period of 2022 due to lower earnings.higher overall headcount, the timing of bonus payments, and the timing of payments to vendors and billings to and cash collections from our customers.
Investing Activities
During
Cash used in investing activities during the nine monththree-month period ended September 30, 2017, cash used by investing activitiesMarch 31, 2023 was $10.7$4.8 million compared to $6.0$4.1 million used in the same period in 2016. Cash used by investing activities in the nine month period ended September 30, 2017 was attributable to the acquisition of fixed assets, including costs of internally developed software.2022. Cash used in investing activities in the nine monththree-month period ended September 30, 2016 was primarily attributableMarch 31, 2023 increased from comparable 2022 period due to $8.5 million used to acquirehigher purchases of fixed assets, includingwhich is primarily comprised of capitalized development costs, of internally developed software, partially offset by cash received on sale of Slashdot Media of $2.4 million.as the Company continues to invest in its products.
Financing Activities
Cash used in financing activities during the nine month periodthree-month ended September 30, 2017March 31, 2023 was $17.7$7.2 million as compared to $35.3and was driven by $16.0 million in the nine month period ended September 30, 2016. The cash used during the current period was primarily due to $17.0 million used in repaymentsof net proceeds on long-term debt. During the nine months ended September 30, 2016, the cashdebt and offset by $8.8 million, net, related to share repurchases. Cash used in financing activities during the three-month period ended March 31, 2022 was due to $26.2$1.7 million of payments to repurchase the Company’s common stock, and $9.0was driven by $10.0 million of net repaymentsproceeds on long-term debt.debt and $11.7 million related to share repurchases.
Financing and Capital Requirements
Credit Agreement
In November 2015, we entered into
We have a new$100 million revolving credit facility, which matures June 2027, with $46.0 million of borrowings on the facility at March 31, 2023, leaving $54.0 million available for future borrowings, subject to the terms of the Credit Agreement, which provided for a revolving loan facility of $250.0 million, maturing in November 2020. The facility was reduced from $250.0 million to $150.0 million in the third quarter of 2017.
Agreement. Borrowings under the Credit Agreement denominated in U.S. dollars bear interest, payable at least quarterly, at the Company’s option, at the Secured Overnight Financing Rate ("SOFR") or a LIBORbase rate, or baseplus a margin. Borrowings under the credit agreement denominated in pounds sterling, if any, bear interest at the Sterling Overnight Index Average ("SONIA") rate plus a margin. The margin ranges from 1.75%2.00% to 2.50%2.75% on LIBORSOFR and SONIA loans and 0.75%1.00% to 1.50%1.75% on base rate loans, determined by the Company’sCompany's most recent consolidated leverage ratio, plus an additional spread of 0.10%. The Company incurs a commitment fee ranging from 0.35% to 0.50% on any unused capacity under the revolving loan facility, determined by the Company's most recent consolidated leverage ratio. The facility mayAssuming an interest rate of 6.90% (the rate in effect on March 31, 2023) on our current borrowings, interest payments are expected to be prepaid at any time without penalty.
$2.4 million from April 1, 2023 to December 31, 2023, $3.2 million in each of 2024, 2025 and 2026 and $1.6 million in 2027. The Credit Agreement contains various customary affirmative and negative covenants and also contains certain financial covenants, including a consolidated leverage ratio and a consolidated interest coverage ratio. Negative covenants include restrictions on incurring certain liens; making certain payments, such as stock repurchases and dividend payments; making certain investments; making certain acquisitions; and incurring additional indebtedness. Restricted payments are allowed under the Credit Agreement to the extent the consolidated leverage ratio, calculated on a pro forma basis, is equal to or less than 2.0 to 1.0, plus an additional $5.0 million of restricted payments. The Credit Agreement also provides that the payment of obligations may be accelerated upon the occurrence of customary events of default, including, but not limited to, non-payment, change of control, or insolvency. As of September 30, 2017,March 31, 2023, the Company was in compliance with all of the financial covenants under the Credit Agreement. Refer to Note 69 in the Notesnotes to the Condensed Consolidated Financial Statements.condensed consolidated financial statements and Item 3. "Quantitative and Qualitative Disclosures about Market Risk - Interest Rate Risk."
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.Contractual Obligations
Commitments and Contingencies
The following table presentsCompany has operating leases for corporate office space and certain minimum payments dueequipment. The leases have terms from one year to eight years, some of which include options to renew the lease, and are included in the lease term when it is reasonably certain that the Company will exercise the option. No leases include options to purchase the leased property. As of March 31, 2023, the value of our lease right-of-use asset was $6.1 million and the estimated timing under contractual obligations with minimum firm commitments asvalue of September 30, 2017:our lease liability was $8.0 million. See note 5 to the condensed consolidated financial statements for further information.
|
| | | | | | | | | | | | | | | | | | | |
| Payments due by period |
Total | | Less Than 1 Year | | 2-3 Years | | 4-5 Years | | More Than 5 Years |
| (in thousands) |
Credit Agreement | $ | 69,000 |
| | $ | — |
| | $ | — |
| | $ | 69,000 |
| | $ | — |
|
Operating lease obligations | 26,038 |
| | 1,341 |
| | 9,002 |
| | 6,968 |
| | 8,727 |
|
Total contractual obligations | $ | 95,038 |
| | $ | 1,341 |
| | $ | 9,002 |
| | $ | 75,968 |
| | $ | 8,727 |
|
We make commitments to purchase advertising from online vendors, which we pay for on a monthly basis. We have no significant long-term obligations to purchase a fixed or minimum amount with these vendors.
Our principal commitments consist of obligations under operating leases for office space and equipment and long-term debt. As of September 30, 2017, we had $69.0 million outstanding under our Credit Agreement. Interest payments are due quarterly or at varying, specified periods (to a maximum of three months) based on the type of loan (LIBOR or base rate loan) we choose. See Note 6 “Indebtedness” in our condensed consolidated financial statements for additional information related to our Credit Agreement.
Future interest payments on our Credit Agreement are variable due to our interest rate being based on a LIBOR rate or a base rate. Assuming an interest rate of 3.25% (the rate in effect on September 30, 2017) on our current borrowings, interest payments are expected to be $0.7 million for October through December 2017, $5.7 million in 2018-2019 and $2.6 million in 2020.Other Capital Requirements
As of September 30, 2017,March 31, 2023, we recorded approximately $4.9$0.8 million of unrecognized tax benefits as liabilities, including an increase of $2.3 million from December 31, 2016 related to filing positions on our prior year US tax returns. Weand we are uncertain if or when such amounts may be settled. Related to the unrecognized tax benefits considered permanent differences, we have also recorded a liability for potential penalties and interest. Included in the balance of unrecognized tax benefits at September 30, 2017March 31, 2023 are $4.9$0.8 million of tax benefits that if recognized, would affect the effective tax rate.rate if recognized. The Company
believes it is reasonably possible that as much as $624,000$0.2 million of its unrecognized tax benefits may be recognized in the next twelve12 months.
The Board previously approved a stock repurchase program that permits the Company to repurchase its common stock. As of March 31, 2023, the value of shares available to be purchased under the current plan was $8.2 million. Management has discretion in determining the conditions under which shares may be purchased from time to time. See note 11 of the notes to the condensed consolidated financial statements for further information.
We anticipate capital expenditures for the year ending December 31, 2023 to be approximately $20 million to $22 million. The increase over prior periods is due to the additional investments in the development of new products and features and leasehold improvements. We intend to use operating cash flows to fund capital expenditures.
Cyclicality
The labor market and certain of the industries that we serve have historically experienced short-term cyclicality. However, we believe that online career websites and marketplaces continue to provide economic and strategic value to the labor market and industries that we serve.
Any slowdown in recruitment activity that occurs willcould negatively impact our revenues and results of operations. For instance, the COVID-19 pandemic resulted in a slowdown of recruiting activity in 2020, which negatively impacted our business. Alternatively, a decrease in the unemployment rate or a labor shortage, including as a result of an increase in job turnover,
generally means that employers (including our customers) are seeking to hire more individuals, which would generally lead to more job postings and database licenses and have a positive impact on our revenues and results of operations. Based on historical trends, improvements in labor markets and the need for our services generally lag behind overall economic improvements. Additionally, there has historically been a lag from the time customers begin to increase purchases of our recruitment services and the impact to our revenues due to the recognition of revenue occurring over the length of the contract, which can be several months to over a year.
Persistent low oil prices since 2014 is an example of how economic conditions
From time to time, we see market slowdowns, which can negatively impact our revenues and results of operations. As a result, we have seen decreasedlead to lower demand for energy professionals worldwide. This decline in demandrecruiting technologists and any future declines in demand for energy professionals could further decrease the use of our energy industry job posting websites and related services. From the second half of 2011 into 2014, we saw tougher market conditions in our finance segment and a less urgent recruiting environment for technologysecurity cleared professionals. If recruitment activity slowed in the industries in which we operate during 2017 and beyond, our revenues and results of operations will be negatively impacted.
| |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk |
Item 3. Quantitative and Qualitative Disclosures about Market Risk
We have exposure to financial market risks, including changes in foreign currency exchange rates, interest rates, and other relevant market prices.
Foreign Exchange Risk
We conduct business serving multiple markets, in four languages, mainly across Europe, Asia, Australia, and North America using the eFinancialCareers name. Rigzone, Dice Europe and Hcareers also conduct business outside
Our operations are conducted within the United States. For the nine months ended September 30, 2017 and 2016, approximately 25% ofAs a result, our revenues were earned outside the United States and certain of these amountscurrent operations are collected in local currency. We arenot subject to foreign exchange risk
The Company's investment in eFC, as described in note 6 to the condensed consolidated financial statements, which is recorded under the equity method of accounting, subjects the Company to foreign exchange risk for exchange rate fluctuations between such local currencies andbecause the functional currency of eFC is the British Pound Sterling and between local currencies andSterling. Accordingly, the United States dollar and the subsequent translationCompany must translate its share of the British Pound Sterling toeFC's net income into United States dollars. We currently do not hedgeThe foreign currency risk. A decrease in foreign exchange rates during a period would result in decreased amounts reported in our Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Operations, Comprehensive Income, and of Cash Flows. For example, if foreign exchange rates between the British Pound Sterling and United States dollar decreased by 1.0%, the impact on our revenues and expenses for the nine months ended September 30, 2017 and 2016, would have been a decrease of approximately $202,000 and $195,000, respectively.
On June 23, 2016, the UK held a referendum in which British citizens approved an exit from the EU, commonly referred to as “Brexit.” As a result of the referendum, the global markets and currencies have been adversely impacted, including a decline in the value of the British Pound Sterling as comparedtranslation related to the United States dollar. Volatility in exchange rates may occur as the UK negotiates its exit from the EU. We currently doCompany's share of eFC's net income is not hedge our British Pound Sterling exposure and therefore are susceptibleexpected to currency risk. Any impact from Brexit on us will depend, in part, on the outcome of tariff, trade, regulatory and other negotiations. Although it is unknown what the result of those negotiations will be it is possible that new terms may adversely affect our operations and financial results.significant.
The financial statements of our non-United States subsidiaries are translated into United States dollars using current exchange rates, with gains or losses included in the cumulative translation adjustment account, which is a component of stockholders’ equity. As of September 30, 2017 and December 31, 2016, our translation adjustment decreased stockholders’ equity by $27.6 million and $32.3 million, respectively. The change from December 31, 2016 to September 30, 2017 is primarily attributable to the position of the United States dollar against the British Pound Sterling.
Interest Rate Risk
We have interest rate risk primarily related to borrowings under our Credit Agreement. Borrowings under ourthe Credit Agreement denominated in U.S. dollars bear interest, payable at least quarterly, at the Company’s option, at the SOFR or a base rate, plus a margin. Borrowings under the Credit Agreement denominated in pounds sterling, if any, bear interest at our option, at a LIBOR rate or basethe SONIA rate plus a margin. The margin ranges from 1.75%2.00% to 2.50%2.75% on
the LIBOR SOFR and SONIA loans and 0.75%1.00% to 1.50%1.75% on the base rate loans, as determined by our most recent consolidated leverage ratio. As of September 30, 2017,March 31, 2023, we had outstanding borrowings of $69.0$46.0 million under our Credit Agreement. If interest ratesA hypothetical increase of 1.0% on these variable rate borrowings would have increased by 1.0%,our interest expense in 2017 on our current borrowings would increasefor the three months ended March 31, 2023 by approximately $173,000.$0.1 million.
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Item 4. | Controls and Procedures |
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We have established a system
Our management, under supervision and with the participation of our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”), has conducted an evaluation (pursuant to Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) under the Exchange Act) as of the end of the fiscal period covered by this report.
These disclosure controls and procedures are designed to ensure that information required to be disclosed in our periodic reports that are filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified by the Exchange Act and in the rules and forms of the Securities and Exchange Commission (the “SEC”).SEC. These disclosure controls and procedures have been evaluated underinclude, without limitation, controls and procedures designed to ensure that this information is accumulated and communicated to management, including the direction of our Chief Executive Officer (“CEO”)principal executive and Chief Financial Officer (“CFO”)principal financial officers, or persons performing similar functions, as of September 30, 2017. appropriate, to allow timely decisions regarding required disclosure.
Based on such evaluations, our CEO and CFO have concluded that the disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified by the SEC, and that such information is accumulated and communicated to management, including the CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Controls
No change in our internal controlcontrols over financial reporting (as defined in Rules 13a-15(f) under the Exchange Act) occurred during the quarter ended September 30, 2017March 31, 2023 that has materially affected, or is reasonably likely to materially affect, our internal controlcontrols over financial reporting.
PART II
Item 1. Legal Proceedings
From time to time we may be involved in disputes or litigation relating to claims arising out of our operations. WeExcept as noted in Note 10 of the notes to condensed consolidated financial statements, we are currently not a party to any material pending legal proceedings.
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Item 1A. | Item 1A. Risk Factors |
If we fail to attract or retain key executives and personnel, there could be a material adverse effect on our business.
Our performance is substantially dependent on the performance of senior management and key technical personnel. We have employment agreements, which include non-compete provisions, with all members of senior management and certain key technical personnel. However, we cannot assure you that any of these senior managers or others will remain with us or that they will not compete with us in the event they cease to be employees, which could have a material adverse effect on our business, results of operations, financial condition and liquidity. In addition, we have not purchased key person life insurance on any members of our senior management. Our future success also depends upon our continuing ability to identify, attract, hire and retain highly qualified personnel, including skilled technical, management, product and technology, and sales and marketing personnel, all of whom are in high demand and are often subject to competing offers. There has in the past been, and there may in the future be, a shortage of qualified personnel in the career services market. We also compete for qualified personnel with other companies. A loss of a substantial number of qualified employees, or an inability to attract, retain and motivate additional highly skilled employees required for expansion of our business, could have a material adverse effect on our business.
We recently announced the departure of our Chief Executive Officer, effective upon the earlier of March 31, 2018 and the date on which his successor is appointed. The Board has an active search process underway to select the next CEO. Such leadership transitions can be inherently difficult to manage, and an inadequate transition of our CEO may cause disruption to our business, including to our relationships with customers and employees. In addition, if we are unable to attract and retain a qualified candidate to become our permanent CEO in a timely manner, our ability to meet our financial and operational goals and strategic plans may be adversely impacted, as well as our financial performance. It may also make it more difficult to retain other key employees until the transition is complete.
We have disclosed under the heading “Risk Factors” in our Annual Report on Form 10-K the risk factors which materially affect our business, financial condition or results of operations, except as otherwise described herein.operations. As of November 2, 2017May 10, 2023, there have been no material changes from the risk factors previously disclosed. You should carefully consider the risk factors set forth in the Annual Report on Form 10-K and the other information set forth elsewhere in this Quarterly Report on Form 10-
Q.10-Q. You should be aware that these risk factors and other information may not describe every risk facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.
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Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Repurchases of Equity Securities
There were no
Stock Repurchase Plans—Our Board approved a stock repurchase program that permits the Company to repurchase our common stock. Management has discretion in determining the conditions under which shares may be purchased from time to time. The number, price, structure, and timing of the repurchases, duringif any, will be at our sole discretion and future repurchases will be evaluated by us depending on market conditions, liquidity needs, restrictions under the agreements governing our indebtedness, and other factors. Share repurchases may be made in the open market or in privately negotiated transactions. The repurchase authorization does not oblige us to acquire any particular amount of our common stock. The Board may suspend, modify, or terminate the repurchase program at any time without prior notice. The following table summarizes the stock repurchase plans approved by the Board:
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| February 2021 to June 2022(1) | | February 2022 to February 2023(2) | | February 2023 to February 2024(3) |
Approval Date | February 2021 | | February 2022 | | February 2023 |
Authorized Repurchase Amount of Common Stock | $20 million | | $15 million | | $10 million |
(1) During the second quarter of 2021, the Company amended its $8.0 million stock repurchase program approved in February 2021 and allowed for the purchase of an additional $12.0 million of our common stock through June 2022, bringing total authorized purchases under the plan to $20.0 million. During the first quarter of 2022, the Company completed its purchases under the plan, which consisted of approximately 4.4 million shares for $20.0 million, effectively ending the plan prior to its original expiration date. |
(2) During February 2023, the $15.0 million stock repurchase program approved in February 2022 expired with a total of 2.6 million shares purchased for $14.7 million. |
(3) On February 9, 2023, the Company announced that its Board approved a new stock repurchase program that permits the purchase of up to $10.0 million of the Company's common stock through February 2024. |
During the quarter ended September 30, 2017 and there is noMarch 31, 2023, purchases of the Company's common stock were as follows:
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Period | (a) Total Number of Shares Purchased (1) | (b) Average Price Paid per Share (2) | (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (3) | (d) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs |
January 1 through January 31, 2023 | 500,280 | | $ | 5.74 | | 228,589 | | $ | 790,079 | |
February 1 through February 28, 2023 | 360,027 | | $ | 5.30 | | 245,607 | | $ | 9,223,948 | |
March 1 through March 31, 2023 | 268,340 | | $ | 3.86 | | 268,340 | | $ | 8,189,434 | |
Total | 1,128,647 | | | 742,536 | | |
(1) Total number of shares purchased includes 0.7 million shares purchased under our stock repurchase program currently in effect.plans described above and 0.4 million shares withheld to satisfy employee income tax obligations upon the vesting of restricted stock awards.
(2) Average price paid per share includes costs associated with the repurchases.
(3) Total number of shares purchased as part of publicly announced plans or programs includes shares purchased under our stock repurchase plans described above.
Item 5. Other Information
None.
Item 6. Exhibits
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10.1*3.1 | | Consent Memorandum, dated August 15, 2017, among JPMorgan Chase Bank, N.A, as administrative agent (the "Administrative Agent"), the Lenders party thereto, and DHI Group, Inc., Dice Inc., and Dice Career Solutions, Inc., as borrowers (the “Borrowers”), related to that certain Amended and Restated Credit Agreement, dated asCertificate of November 24, 2015 (as amended)Incorporation (incorporated by and amongreference from Exhibit 3.1 to the Borrowers, the Lenders party thereto and the Administrative Agent.Company's Current Report on Form 8-K (File No. 001-33584) filed on July 23, 2007).
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31.1*3.2 | | |
3.3 | | |
4.1 | | |
31.1* | | |
31.2* |
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32.1** |
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32.2** |
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101.INS |
| XBRL Instance Document.Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
101.SCH |
| XBRL Taxonomy Extension Schema Document. |
101.CAL |
| XBRL Taxonomy Extension Calculation Linkbase Document. |
101.DEF |
| XBRL Taxonomy Extension Definition Linkbase Document. |
101.LAB |
| XBRL Taxonomy Extension Label Linkbase Document. |
101.PRE |
| XBRL Taxonomy Extension Presentation Linkbase Document. |
104 | | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
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* | | Filed herewith. |
** | | Furnished herewith |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Date: | May 10, 2023 | | DHI Group, Inc. |
| | | Registrant |
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Date: | November 2, 2017 | | DHI Group, Inc.By: | /S/ Art Zeile |
| | | Registrant |
| | | | |
| | | By: | /S/ Michael P. Durney |
| | | | Michael P. Durney
Art Zeile President and Chief Executive Officer |
| | | | (Principal Executive Officer) |
| | | | |
| | | | /S/ Luc Grégoire |
| | | | Luc Grégoire
Chief Financial Officer
|
| | | | (Principal Financial Officer) |
EXHIBIT INDEX
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10.1* | | Consent Memorandum, dated August 15, 2017, among JPMorgan Chase Bank, N.A, as administrative agent (the "Administrative Agent"), the Lenders party thereto, and DHI Group, Inc., Dice Inc., and Dice Career Solutions, Inc., as borrowers (the “Borrowers”), related to that certain Amended and Restated Credit Agreement, dated as of November 24, 2015 (as amended) by and among the Borrowers, the Lenders party thereto and the Administrative Agent.
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31.1* | | Certifications of Michael Durney, Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2* | | Certifications of Luc Grégoire, Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1* | | Certifications of Michael Durney, Chief Executive Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2* | | Certifications of Luc Grégoire, Chief Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101.INS | | XBRL Instance Document. |
101.SCH | | XBRL Taxonomy Extension Schema Document. |
101.CAL | | XBRL Taxonomy Extension Calculation Linkbase Document. |
101.DEF | | XBRL Taxonomy Extension Definition Linkbase Document. |
101.LAB | | XBRL Taxonomy Extension Label Linkbase Document. |
101.PRE | | XBRL Taxonomy Extension Presentation Linkbase Document. |
/S/ Kevin Bostick |
| | | | Kevin Bostick Chief Financial Officer |
* | | Filed herewith. | | (Principal Financial Officer) |