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01 Nov 2016

DHI Group, Inc. Announces Third Quarter 2016 Results, Completion of Comprehensive Strategic Review and Intention to Explore Strategic Alternatives

NEW YORK, Nov. 1, 2016 /PRNewswire/ --

  • Company completes extensive business strategy review resulting in renewed focus on tech talent acquisition that will reinvigorate its core tech franchise, broaden its market opportunity, and accelerate next-generation product development, overall enhancing the Company's growth opportunities and shareholder value 
  • Company to engage, with support of board of directors, an investment bank to explore strategic alternatives that optimize an ownership structure to achieve Company's growth agenda and enhance shareholder value     
  • Q3 2016 total revenues $56.1 million, Adjusted EBITDA $14.9 million, and net loss $16.8 million
  • Diluted loss per share of $0.35, including $0.45 loss per share resulting from an estimated non-cash impairment charge of $24.6 million to write-off Rigzone goodwill and intangibles
  • New Chief Financial Officer, Luc Grégoire, joins the Company

DHI Group, Inc. (NYSE: DHX) ("DHI" or the "Company"), a leading provider of data, insights and employment connections through our specialized services for professional communities in technology and security clearance, financial services, energy, healthcare and hospitality, today reported financial results for the quarter ended September 30, 2016.

"While our industry is still in the throes of a highly disruptive evolution that has impacted our recent performance, the value proposition of talent sourcing solutions for professionals continues to be high, and we are confident about the Company's long-term prospects," said Michael Durney, President and Chief Executive Officer of DHI Group, Inc. "Importantly, we initiated a strategic plan focused on significant opportunities in the tech vertical that we believe will position the Company as a leader in next-generation talent solutions. Also, in light of developments within our industry and our growth agenda, we have decided to explore strategic alternatives to ensure we have an ownership structure that best optimizes shareholder value and the execution of our strategic plan."

Q3 2016 Product and Business Highlights

  • Next-generation talent acquisition services continue to gain traction with more than 1,300 Dice customers subscribing to Open Web, up 33% year-over-year
  • New Dice Careers app downloads up, and new users up 113% year-over-year
  • eFinancialCareers revenue increased 4% year-over-year on a constant currency basis, demonstrating resiliency in the face of Brexit-related uncertainty in the U.K. and Europe, and challenging U.S. market conditions
  • Company released next version of getTalent with new feature sets, including launch of industry's first mobile candidate pipelining solution

Q3 2016 Financial Highlights

The following summarizes consolidated financial results for the quarters ended September 30, 2016 and 2015 ($ in millions, except per share data) including the impact with and without Slashdot Media, which the Company sold in the first quarter of 2016:



Q3 2016


Q3 2015


YoY % Change


Revenues


$

56.1



$

65.1



(14)%



    Revenues, excluding Slashdot Media (1)


$

56.1



$

61.6



(9)%



Net income (loss) (2) (3)


$

(16.8)



$

6.5



  n.m.



Net income, excluding impairment charge


$

4.9



$

6.5



(25)%



Diluted earnings (loss) per share (3)


$

(0.35)



$

0.12



  n.m.



Diluted earnings per share, excluding impairment charge


$

0.10



$

0.12



(17)%











Adjusted EBITDA (4)


$

14.9



$

19.1



(22)%



Adjusted EBITDA margin (5)


26.6%



29.3%





 

(1) Sale of Slashdot Media completed in Q1 2016.

(2) No material difference between Net income and Net income, excluding Slashdot Media.

(3) Q3 2016 includes an estimated non-cash impairment charge of $24.6 million, or $0.45 per diluted share, to write-off Rigzone goodwill and intangible assets. 
(4) No material difference between Adjusted EBITDA and Adjusted EBITDA, excluding Slashdot Media.

(5) Adjusted EBITDA margin is computed as Adjusted EBITDA divided by Revenues.

 

The following summarizes segment Revenues, Adjusted EBITDA and Adjusted EBITDA Margin results for the quarters ended September 30, 2016 and 2015 ($ in millions):

 



Revenues


Adjusted EBITDA



Q3
2016


Q3

2015


YoY % Change


YoY %
Change,
Fx Neutral


Q3
2016


Q3 2016
Margin


Q3
2015


Q3 2015
Margin

Tech & Clearance


$

34.0



$

35.7



(5)%


(4)%


$

15.6



46%


$

17.4



49%

Global Industry Group


15.4



18.9



(19)%


(14)%


3.5



23%


4.3



23%

Healthcare


6.7



6.9



(3)%


(3)%


0.5



7%


1.0



14%

Talent Acquisition Brands


56.1



61.5



(9)%


(7)%


19.7



35%


22.6



37%

Corporate






—%


—%


(3.0)



n.m.


(3.1)



n.m.

Talent Acquisition Brands less
Corporate


56.1



61.5



(9)%


(7)%


16.6



30%


19.6



32%

Brightmatter Group




0.1



       n.m.


        n.m.


(1.7)



n.m.


(0.8)



n.m.

Slashdot Media




3.5



(100)%


(100)%


0.0



n.m.


0.3



9%

Total


$

56.1



$

65.1



(14)%


(12)%


$

14.9



27%


$

19.1



29%

 



GIG Revenues by Brand



Q3 2016


Q3 2015


YoY % Change


YoY % Change,
Fx Neutral

eFinancialCareers


$

8.8



$

9.3



(6)%


4%

Rigzone


2.1



4.7



(55)%


(54)%

Hcareers


3.6



3.9



(7)%


(7)%

BioSpace


0.8



0.9



(12)%


(12)%

Global Industry Group


$

15.4



$

18.9



(19)%


(14)%

 

($ in millions)


September 30, 2016


December
31, 2015


September
30, 2015


YTD 2016 Change


YTD 2015 Change


Deferred revenue (1)


$

82.4



$

83.3



$

81.9



$

(0.9)



$

(3.1)



 

Long-Term Debt, net


$

90.7



$

99.4



$

100.6



$

(8.7)



$

(8.6)



Plus: Deferred financing costs


1.3



1.6



1.0



(0.3)



(0.3)



Total principal outstanding


$

92.0



$

101.0



$

101.6



$

(9.0)



$

(8.9)



Less: Cash


29.4



34.1



33.9



(4.7)



7.1



Net debt


$

62.6



$

67.0



$

67.7



$

(4.4)



$

(16.0)



 

(1) The YTD decrease in deferred revenue primarily reflects a decrease in the Global Industry Group segment of $1.3 million, partially offset by an increase in the Tech & Clearance segment.

Strategic Developments

Earlier this year, the Company engaged in a comprehensive business strategy review that culminated in a renewed focus on providing more value within the tech vertical, which is designed to reinvigorate its technology talent acquisition franchise and fast-track development of next-generation talent acquisition solutions. This strategy, which includes launching new products and services targeting the tech talent recruitment and sourcing market, enhances exposure to the favorable fundamentals of the tech employment vertical to drive improved growth opportunities and shareholder value.

In light of announced and pending transactions in the human capital management industry, the board of directors has also expressed support for the Company to engage an investment bank to explore strategic alternatives to ensure the Company's ownership structure optimizes the Company's ability to achieve its growth agenda and maximize shareholder value. There can be no assurance that the exploration of strategic alternatives will result in a transaction.

"Tech is a large and growing global employment vertical that offers our business significant long term growth opportunities, as today most companies need tech talent to succeed," said Mr. Durney. "We are excited about our strategy to place a stronger focus on tech talent solutions and believe it will serve our shareholders' best interests regardless of prospects for a new ownership structure."

Executive Management Update

The Company announced the appointment of its new Chief Financial Officer, Luc Grégoire, who joined the Company today. Mr. Grégoire comes to the Company from Avepoint, Inc., where he was Chief Financial Officer, and prior to that held senior finance roles with Take-Two Interactive and McGraw Hill, among others, and brings significant experience managing the financial organization for developing and growing SaaS businesses.

Stock Repurchase Program

During the third quarter of 2016, the Company purchased approximately 0.4 million shares of its common stock at an average cost of $6.70 per share for a total cost of approximately $2.7 million.  At September 30, 2016, approximately $22.3 million remained authorized for repurchase under a $50 million plan that expires in December 2016.

Business Outlook

Current Q4 2016 and Full-Year 2016 Business Outlook

($ in millions, except diluted earnings per share)

Q4 2016

FY 2016




Revenues

$54.0 - $55.0

$225.3 - $226.3




Talent acquisition brands Adjusted EBITDA (1)

$18.5 - $19.0

$79.1 - $79.6

Corporate expenses

$3.1 - $3.3

$13.7 - $13.9

Talent acquisition brands Adjusted EBITDA less corporate expenses (1)

$15.4 - $15.8

$65.4 - $65.8




Brightmatter Group Adjusted EBITDA

($2.0) - ($1.9)

($7.2) - ($7.1)

Total Adjusted EBITDA

$13.4 - $13.8

$58.2 - $58.6




Depreciation and amortization

$2.9 - $3.0

$16.6 - $16.7

Non-cash stock compensation expense

$2.4 - $2.5

$10.2 - $10.3

Interest expense, net

$0.7 - $0.8

$3.3 - $3.4

Income tax rate (2)

36% - 37%

150% - 160%




Net income

$4.6 - $4.8

($2.2) - ($2.0)

Net income, excluding impairment charge

$4.6 - $4.8

$19.5 - $19.8




Diluted earnings per share

$0.09 - $0.10

($0.05) - ($0.04)

Diluted earnings per share, excluding impairment charge

$0.09 - $0.10

$0.40 - $0.41

Diluted share count

49 million

49 million




Estimated yearly change in revenue by segment (in US dollars):

Tech & Clearance

(9%) - (8%)

(4.0%) - (3.5%)

Global Industry Group:



eFinancialCareers

(13%) - (11%)

(4%) - (3%)

Rigzone

(57%) - (55%)

(56.0%) - (55.5%)

Hcareers

(7%) - (2%)

(6%) - (5%)

BioSpace

(14%) - (13%)

(14.5%) - (14.0%)

Healthcare

(1%) - 1%

4% - 5%

 

(1) Talent acquisition brands includes the Company's Tech & Clearance, Global Industry Group, and Healthcare segments

(2) Full-year income tax rate is a consequence of the $24.6 million impairment charge with its $2.8 million related tax benefit. Excluding the impairment charge, the full-year income tax rate is estimated at 36%.

Estimated financial performance for 2016 reflects:

  • Expectation for negative impact to Revenues from currency fluctuations of roughly $1.3 - $1.8 million in Q4 2016 and $3.5 - $4.0 million for FY 2016 relative to the same periods in the prior year, which primarily is reflected in the Global Industry Group segment
  • Ongoing impact of depressed conditions in the Energy hiring market and strategic business investments primarily in Brightmatter Group
  • For the full year, excludes Slashdot Media and disposition related and other costs related to the Company's sale of Slashdot Media and to the organizational changes described in the Q1 2016 Earnings Release

Conference Call Information

The Company will host a conference call to discuss third quarter results today at 8:30 a.m. Eastern Time.  Hosting the call will be Michael Durney, President and Chief Executive Officer, and Constance Melrose, Vice President of Corporate Development and Financial Planning & Analysis.

The conference call can be accessed live over the phone by dialing 1-866-777-2509 or for international callers by dialing 1-412-317-5413.  Please ask to be joined to the DHI Group, Inc. call.  A replay will be available one hour after the call and can be accessed by dialing 1-877-344-7529 or 1-412-317-0088 for international callers; the replay passcode is 10094699. The replay will be available until November 8, 2016.

The call will also be webcast live from the Company's website at www.dhigroupinc.com under the Investor Relations section.

Investor Contact

Brendan Metrano
VP, Investor Relations
DHI Group, Inc.
212-448-4181
ir@dhigroupinc.com

Media Contact

Rachel Ceccarelli
Director, Corporate Communications
DHI Group, Inc.
212-448-8288
media@dhigroupinc.com

About DHI Group, Inc.

DHI Group, Inc. (NYSE: DHX) is a leading provider of data, insights and employment connections through our specialized services for professional communities including technology and security clearance, financial services, energy, healthcare and hospitality. Our mission is to empower professionals and organizations to compete and win through expert 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 to find the best employment opportunities in and the most timely news and information about their respective areas of expertise. For over 25 years, we have built our company on providing employers and recruiters with efficient access to high-quality, unique professional communities, and offering the professionals in those communities access to highly-relevant career opportunities, news, tools and information. Today, we serve multiple markets located throughout North America, Europe, the Middle East and the Asia Pacific region.

Notes Regarding the Use of Non-GAAP Financial Measures

The Company has provided certain non-GAAP financial information as additional information for its operating results.  These measures are not in accordance with, or an alternative for, generally accepted accounting principles in the United States ("GAAP") and may be different from similarly titled non-GAAP measures reported by other companies.  The Company believes that its presentation of non-GAAP measures, such as adjusted earnings before interest, taxes, depreciation, amortization, non-cash stock based compensation expense, and other non-recurring income or expense ("Adjusted EBITDA"), Adjusted EBITDA excluding Slashdot Media and disposition related and other costs, Revenues excluding Slashdot Media, Net Income excluding Slashdot Media and disposition related and other costs, Net Income excluding impairment charge, Free Cash Flow, Diluted Earnings per Share excluding Slashdot Media and disposition related and other costs, Diluted Earnings per Share excluding impairment charge, and Net Debt, provides useful information to management and investors regarding certain financial and business trends relating to its financial condition and results of operations. In addition, the Company's management uses these measures for reviewing the financial results of the Company and for budgeting and planning purposes.  The Company has provided required reconciliations to the most comparable GAAP measures in the section entitled "Supplemental Information and Non-GAAP Reconciliations."

Adjusted EBITDA
Adjusted EBITDA is a non-GAAP metric used by management to measure operating performance.  Management uses Adjusted EBITDA as a performance measure for internal monitoring and planning, including preparation of annual budgets, analyzing investment decisions and evaluating profitability and performance comparisons between us and our competitors.  The Company also uses this measure to calculate amounts of performance based compensation under the senior management incentive bonus program.  Adjusted EBITDA, as defined in our Credit Agreement, represents net income plus (to the extent deducted in calculating such net income) interest expense, income tax expense, depreciation and amortization, non-cash stock option expenses, losses resulting from certain dispositions outside the ordinary course of business, certain writeoffs in connection with indebtedness, impairment charges with respect to long-lived assets, expenses incurred in connection with an equity offering, extraordinary or non-recurring non-cash expenses or losses, transaction costs in connection with the Credit Agreement up to $250,000, deferred revenues written off in connection with acquisition purchase accounting adjustments, writeoff of non-cash stock compensation expense, and business interruption insurance proceeds, minus (to the extent included in calculating such net income) non-cash income or gains, interest income, and any income or gain resulting from certain dispositions outside the ordinary course of business.

We present Adjusted EBITDA as a supplemental performance measure because we believe that this measure provides our board of directors, 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 also 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.

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 as a measure of our profitability.

Adjusted EBITDA Excluding Slashdot Media and disposition related and other costs
Adjusted EBITDA excluding Slashdot Media and disposition related and other costs is a non-GAAP metric used by management to measure operating performance. Management uses Adjusted EBITDA excluding Slashdot Media and disposition related and other costs as a measure of our financial performance given our sale of Slashdot Media and disposition related and other costs. Adjusted EBITDA excluding Slashdot Media and disposition related and other costs, represents Adjusted EBITDA defined above, less Slashdot Media EBITDA and disposition related and other costs.

Revenues Excluding Slashdot Media
Revenues excluding Slashdot Media is a non-GAAP metric used by management to measure operating performance.  Revenues excluding Slashdot Media represents Revenues as defined above less Slashdot Media revenue.  We consider Revenues excluding Slashdot Media to be an important measure to evaluate our financial performance given our sale of Slashdot Media.

Net Income Excluding Slashdot Media and disposition related and other costs
Net Income excluding Slashdot Media is a non-GAAP metric used by management to measure operating performance. Net Income excluding Slashdot Media and disposition related and other costs is defined as Net Income less Slashdot Media Net Income (Loss) and disposition related and other costs. We consider Net Income excluding Slashdot Media and disposition related and other costs to be an important measure of our financial performance given our sale of Slashdot Media and disposition related and other costs.

Net Income Excluding Impairment Charge
Net Income excluding impairment charge is a non-GAAP metric used by management to measure operating performance. Net Income excluding impairment charge is defined as Net Income less impairment charge, net of income taxes. We consider Net Income excluding impairment charge to be an important measure of our financial performance, as it better reflects the ongoing operations of the Company.

Diluted Earnings per Share Excluding Slashdot Media and disposition related and other costs
Diluted earnings per share excluding Slashdot Media and disposition related and other costs is a non-GAAP metric used by management to measure operating performance. Diluted earnings per share excluding Slashdot Media and disposition related and other costs is defined as diluted earnings per share less impact per share of Slashdot Media and disposition related and other costs. We consider diluted earnings per share excluding Slashdot Media and disposition related and other costs to be an important measure of our financial performance.

Diluted Earnings per Share Excluding Impairment Charge
Diluted earnings per share excluding impairment charge is a non-GAAP metric used by management to measure operating performance. Diluted earnings per share excluding impairment charge is defined as diluted earnings (loss) per share less impact per share of impairment charge. We consider diluted earnings per share excluding impairment charge to be an important measure of our financial performance, as it better reflects the ongoing operations of the Company.

Free Cash Flow
We define free cash flow as net cash provided by operating activities minus capital expenditures. We believe free cash flow is an important non-GAAP measure as it provides useful cash flow information regarding our ability to service, incur or pay down indebtedness or repurchase our common stock.  We use free cash flow as a measure to reflect cash available to service our debt as well as to fund our expenditures.  A limitation of using free cash flow versus the GAAP measure of net cash provided by operating activities is that free cash flow does not represent the total increase or decrease in the cash balance from operations for the period since it includes cash used for capital expenditures during the period and is adjusted for acquisition related payments within operating cash flows.

Net Debt
Net Debt is defined as total principal outstanding less cash. We consider Net Debt to be an important measure of liquidity and indicator of our ability to meet ongoing obligations.  We also use Net Debt, among other measures, in evaluating our choices for capital deployment.  Net Debt presented herein is a non-GAAP measure and may not be comparable to similarly titled measures used by other companies.

Forward-Looking Statements
This press release and oral statements made from time to time by our representatives contain forward-looking statements. 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 information without limitation concerning our possible or assumed future results of operations, including descriptions of our business strategy. 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, 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 rapid changes in the recruiting and career services business, failure to maintain and develop our reputation and brand 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 United Kingdom's future departure from the European Union, including uncertainty in respect of the regulation of data protection and data privacy, failure to attract qualified professionals to our websites or grow the number of qualified professionals who use our websites, failure to successfully identify or integrate acquisitions, U.S. and foreign government regulation of the Internet and taxation, our ability to borrow funds under our revolving credit facility or refinance our indebtedness and restrictions on our current and future operations under such indebtedness.  These factors and others are discussed in more detail in the Company's filings with the Securities and Exchange Commission, all of which are available on the Investors page of our website at www.dhigroupinc.com, including the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2015, under the headings "Risk Factors," "Forward-Looking Statements" and "Management's Discussion and Analysis of Financial Condition and Results of Operations."

You should keep in mind that any forward-looking statement made by the Company or its representatives 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 applicable law.

DHI GROUP, INC.

 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

     (in thousands except per share amounts)
















For the three months
ended September 30,


For the nine months
ended September 30,





2016


2015


2016


2015












Revenues

$

56,073



$

65,138



$

172,032



$

194,710













Operating expenses:








Cost of revenues

7,943



9,765



24,557



29,255


Product development

6,018



7,938



19,323



22,082


Sales and marketing

19,425



19,779



58,573



60,984


General and administrative

10,101



10,958



32,822



34,059


Depreciation

2,478



2,364



7,639



6,821


Amortization of intangible assets

1,570



3,376



6,106



10,875


Impairment of goodwill

15,369





15,369




Impairment of intangible assets

9,252





9,252




Disposition related and other costs





3,347






Total operating expenses

72,156



54,180



176,988



164,076


Operating income (loss)

(16,083)



10,958



(4,956)



30,634


Interest expense

(901)



(831)



(2,593)



(2,472)


Other income (expense)

(1)



7



(33)



(2)


Income (loss) before income taxes

(16,985)



10,134



(7,582)



28,160


Income tax (benefit) expense

(144)



3,623



3,294



10,879


Net income (loss)

$

(16,841)



$

6,511



$

(10,876)



$

17,281













Basic earnings (loss) per share

$

(0.35)



$

0.13



$

(0.22)



$

0.33


Diluted earnings (loss) per share

$

(0.35)



$

0.12



$

(0.22)



$

0.33













Weighted average basic shares outstanding

47,719



51,228



48,596



51,792


Weighted average diluted shares outstanding

47,719



52,230



48,596



53,056
























 

DHI GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)














For the three months ended September 30,


For the nine months ended September 30,




2016


2015


2016


2015

Cash flows from operating activities:









Net income (loss)

$

(16,841)



$

6,511



$

(10,876)



$

17,281


Adjustments to reconcile net income to net cash flows from operating activities:








Depreciation

2,478



2,364



7,639



6,821


Amortization of intangible assets

1,570



3,376



6,106



10,875


Deferred income taxes

(2,206)



1,455



(1,977)



(373)


Amortization of deferred financing costs

81



104



243



313


Stock based compensation

2,327



2,410



8,750



7,490


Impairment of goodwill

15,369





15,369




Impairment of intangible assets

9,252





9,252




Change in accrual for unrecognized tax benefits

51



8



166



172


 

Loss on sale of business





639




Changes in operating assets and liabilities:








Accounts receivable

3,190



(1,392)



8,047



3,437


Prepaid expenses and other assets

(449)



474



(618)



1,601


Accounts payable and accrued expenses

1,445



1,481



(3,430)



(2,332)


Income taxes receivable/payable

(441)



(280)



(2,082)



6,050


Deferred revenue

(3,745)



(4,165)



(493)



(2,132)


Other, net

(46)



34



(123)



166


Net cash flows from operating activities

12,035



12,380



36,612



49,369


Cash flows from investing activities:









Cash received from sale of business





2,429





Purchases of fixed assets

(2,955)



(1,782)



(8,461)



(6,710)


Net cash flows from investing activities

(2,955)



(1,782)



(6,032)



(6,710)


Cash flows from financing activities:








Payments on long-term debt

(15,000)



(7,625)



(26,000)



(28,875)


Proceeds from long-term debt

8,000



5,000



17,000



20,000


Payments under stock repurchase plan

(3,547)



(8,182)



(26,179)



(29,561)


Payment of acquisition related contingencies







(3,829)


Proceeds from stock option exercises

1,636



758



2,664



5,897


Purchase of treasury stock related to vested restricted stock and performance
stock units

(259)



(119)



(2,779)



(1,665)


Excess tax benefit over book expense from stock based compensation

52



693



400



2,114


Net cash flows from financing activities

(9,118)



(9,475)



(34,894)



(35,919)


Effect of exchange rate changes

(2)



127



(315)



394


Net change in cash for the period

(40)



1,250



(4,629)



7,134


Cash, beginning of period

29,461



32,661



34,050



26,777


Cash, end of period

$

29,421



$

33,911



$

29,421



$

33,911


 

DHI GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands)







ASSETS

September 30, 2016


December 31, 2015

Current assets





Cash

$

29,421



$

34,050



Accounts receivable, net

37,863



46,380



Income taxes receivable

1,654



916



Prepaid and other current assets

3,810



3,072



Assets held for sale



4,265




Total current assets

72,748



88,683


Fixed assets, net

15,663



15,255


Acquired intangible assets, net

49,812



65,292


Goodwill

174,640



198,598


Deferred income taxes

276



322


Other assets

646



785




Total assets

$

313,785



$

368,935


LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities





Accounts payable and accrued expenses

$

19,979



$

23,883



Deferred revenue

82,384



83,316



Income taxes payable

2,762



4,006



Liabilities held for sale



2,334




Total current liabilities

105,125



113,539


Long-term debt, net

90,679



99,436


Deferred income taxes

9,096



10,849


Accrual for unrecognized tax benefits

3,602



3,436


Other long-term liabilities

2,947



3,062




Total liabilities

211,449



230,322


Total stockholders' equity

102,336



138,613




Total liabilities and stockholders' equity

$

313,785



$

368,935








 

Supplemental Information and Non-GAAP Reconciliations

On the pages that follow, the Company has provided certain supplemental information that we believe will assist the reader in assessing our business operations and performance, including certain non-GAAP financial information and required reconciliations to the most comparable GAAP measure.  A statement of operations and statement of cash flows for the three and nine month periods ended September 30, 2016 and 2015 and a balance sheet as of September 30, 2016 and December 31, 2015 are provided elsewhere in this press release.

 

DHI GROUP, INC.

NON-GAAP SUPPLEMENTAL DATA

(Unaudited)

(dollars in thousands except per customer data)





















For the three months
ended September 30,


For the nine months
ended September 30,



2016


2015


2016


2015

Reconciliation of Net Income (Loss) to Adjusted EBITDA:








Net income (loss)

$

(16,841)



$

6,511



$

(10,876)



$

17,281



Interest expense

901



831



2,593



2,472



Income tax (benefit) expense

(144)



3,623



3,294



10,879



Depreciation

2,478



2,364



7,639



6,821



Amortization of intangible assets

1,570



3,376



6,106



10,875



Impairment of goodwill

15,369





15,369





Impairment of intangible assets

9,252





9,252





Non-cash stock compensation expense

2,327



2,410



7,850



7,490



Severance—Slashdot Media





981





Accelerated stock based compensation expense—Slashdot Media





900





Loss on sale of business





639





Other

1



(7)



33



2


Adjusted EBITDA

$

14,913



$

19,108



$

43,780



$

55,820










Reconciliation of Operating Cash Flows to Adjusted EBITDA:








Net cash provided by operating activities

$

12,035



$

12,380



$

36,612



$

49,369



Interest expense

901



831



2,593



2,472



Amortization of deferred financing costs

(81)



(104)



(243)



(313)



Income tax (benefit) expense

(144)



3,623



3,294



10,879



Deferred income taxes

2,206



(1,455)



1,977



373



Severance—Slashdot Media





981





Change in accrual for unrecognized tax benefits

(51)



(8)



(166)



(172)



Change in accounts receivable

(3,190)



1,392



(8,047)



(3,437)



Change in deferred revenue

3,745



4,165



493



2,132



Changes in working capital and other

(508)



(1,716)



6,286



(5,483)


Adjusted EBITDA

$

14,913



$

19,108



$

43,780



$

55,820




















Calculation of Free Cash Flow:








Net cash provided by operating activities

$

12,035



$

12,380



$

36,612



$

49,369


Purchases of fixed assets

(2,955)



(1,782)



(8,461)



(6,710)


Free Cash Flow

$

9,080



$

10,598



$

28,151



$

42,659




















Dice Recruitment Package Customers








Beginning of period

7,300



7,750



7,600



7,800


End of period

7,250



7,700



7,250



7,700











Average for the period (1)

7,200



7,700



7,350



7,750











Dice Average Monthly Revenue per
   Recruitment Package Customer (2)

$

1,122



$

1,101



$

1,121



$

1,087





























(1) Reflects the daily average of recruitment package customers during the period.





(2) Reflects the simple average of each period presented.

































DHI GROUP, INC.


NON-GAAP SUPPLEMENTAL DATA (CONTINUED)


(Unaudited)








For the three months
ended September 30,


For the nine months
ended September 30,



2016


2015


2016


2015

Revenues

$

56,073



$

65,138



$

172,032



$

194,710


Less Slashdot Media



3,506



747



11,173


Revenues, excluding Slashdot Media

$

56,073



$

61,632



$

171,285



$

183,537











Net Income (loss)

$

(16,841)



$

6,511



$

(10,876)



$

17,281


Exclude Slashdot Media net income (loss)



118



(1,755)



431


Add back severance related to re-alignment, net of tax





521




Net Income (loss), excluding Slashdot Media and disposition related and other
costs

$

(16,841)



$

6,393



$

(8,600)



$

16,850











Diluted Earnings (Loss) per Share, excluding Slashdot Media and disposition related and other costs (3)

$

(0.35)



$

0.12



$

(0.18)



$

0.32











Adjusted EBITDA

$

14,913



$

19,108



$

43,780



$

55,820


Exclude Slashdot Media



292



(208)



1,144


Add back severance related to re-alignment





827




Adjusted EBITDA, excluding Slashdot Media and disposition related and other costs

$

14,913



$

18,816



$

44,815



$

54,676











Adjusted EBITDA Margin, excluding Slashdot Media and disposition related and
other costs (4)

26.6

%


30.5

%


26.2

%


29.8

%









Net Income (loss)

$

(16,841)



$

6,511



$

(10,876)



$

17,281


Less impact of impairment charge, net of income taxes

21,790





21,790




Net income, excluding impairment charge

$

4,949



$

6,511



$

10,914



$

17,281











Diluted Earnings (Loss) Per Share

$

(0.35)



$

0.12



$

(0.22)



$

0.33


Less impact per share of impairment charge

0.45





0.44




Diluted Earnings per Share, excluding impairment charge

$

0.10



$

0.12



$

0.22



$

0.33










Segment Definitions:








Tech & Clearance: Dice, Dice Europe and ClearanceJobs

Global Industry Group: eFinancialCareers, Rigzone, Hcareers and BioSpace





Healthcare: Health eCareers

Corporate & Other: Corporate related costs, Slashdot Media and Brightmatter










(3) Diluted Earnings (Loss) per Share, excluding Slashdot Media and disposition related and other costs, is computed as Net Income (Loss), excluding Slashdot Media and disposition related and other costs, divided by weighted average diluted shares outstanding.

(4) Adjusted EBITDA margin, excluding Slashdot Media and disposition related and other costs, is computed as Adjusted EBITDA, excluding Slashdot Media and disposition related and other costs, divided by Revenues, excluding Slashdot Media.






 

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SOURCE DHI Group, Inc.