8-K
Dhi Group, Inc. (DHX)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) February 5, 2020
DHI Group, Inc.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE
(State or Other Jurisdiction of Incorporation)
| 001-33584 | 20-3179218 | |
|---|---|---|
| (Commission File Number) | (IRS Employer Identification No.) | |
| 1450 BROADWAY, 29TH FLOOR, NEW YORK, NEW YORK | 10018 | |
| (Address of Principal Executive Offices) | (Zip Code) |
(212) 725-6550
(Registrant's Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
| 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 is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
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. o
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On February 5, 2020, DHI Group, Inc. (the “Company”) reported its results of operations for the fiscal quarter ended December 31, 2019. A copy of the press release issued by the Company concerning the foregoing is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
The information in this Form 8-K, including the accompanying exhibits, is being furnished under Item 2.02 and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liability of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of the general incorporation language of such filing, except as shall be expressly set forth by specific reference in such filing.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
| (a) | Financial Statements of Business Acquired. |
|---|
Not applicable.
| (b) | Pro Forma Financial Information. |
|---|
Not applicable.
| (c) | Shell Company Transactions. |
|---|
Not applicable.
| (d) | Exhibits. |
|---|
EXHIBIT NO. DESCRIPTION
99.1 Press Release, dated February 5, 2020
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| DHI GROUP, INC. | ||
|---|---|---|
| Date: | February 5, 2020 | By: /S/ Kevin Bostick |
| Name: Kevin Bostick | ||
| Title: Chief Financial Officer |
EXHIBIT INDEX
99.1 Press Release, dated February 5, 2020
Exhibit
DHI Group Reports Fourth Quarter and Full Year 2019 Financial Results
Delivers Sequential Quarterly Growth in Total Revenues and Dice Revenues
NEW YORK, New York February 5, 2020 - DHI Group, Inc. (NYSE: DHX) (“DHI” or the “Company”) today announced the following financial results for the fourth quarter and full-year ended December 31, 2019.
Fourth Quarter 2019 Financial Results
| ▪ | Total revenues^1^ were $37.7 million, up 1% on a sequential basis and down 1% year over year. |
|---|---|
| ▪ | Dice^1^ revenues were $23.3 million, up 1% on a sequential basis and down 3% year over year. |
| --- | --- |
| ▪ | eFinancialCareers revenues were $7.8 million, down 1% on a sequential basis and down 6% year over year. |
| --- | --- |
| ▪ | ClearanceJobs revenues were $6.6 million, up 5% on a sequential basis and up 16% year over year. |
| --- | --- |
| ▪ | Excluding the impact of foreign exchange, total revenues were up 1% on a sequential basis and down 1% year over year while eFinancialCareers was down 4% on a sequential basis and down 6% year over year. |
| --- | --- |
| ▪ | Net income was $3.5 million, or $0.07 per diluted share, compared to net income of $2.9 million, or $0.06 per diluted share, in the year-ago quarter. |
| --- | --- |
| ▪ | Cash flow from operations was $3.9 million compared to $6.2 million in the year-ago quarter. |
| --- | --- |
| ▪ | Adjusted EBITDA^2^ was $8.6 million, and Adjusted EBITDA margin^2^ was 23% compared to $8.3 million and 22% in the year-ago quarter. |
| --- | --- |
Full Year 2019 Financial Results
| ▪ | Total revenues^1^ were $149.4 million, flat year over year. |
|---|---|
| ▪ | Dice^1^ revenues were $92.5 million, down 2% year over year. |
| --- | --- |
| ▪ | eFinancialCareers revenues were $32.1 million, down 5% year over year. |
| --- | --- |
| ▪ | ClearanceJobs revenues were $24.7 million, up 17% year over year. |
| --- | --- |
| ▪ | Excluding the impact of foreign exchange, total revenues were up 1% year over year while eFinancialCareers was down 2% year over year. |
| --- | --- |
| ▪ | Net income was $12.6 million, or $0.24 per diluted share, compared to net income of $7.2 million, or $0.14 per diluted share in 2018. |
| --- | --- |
| ▪ | Cash flow from operations was $22.9 million compared to $14.9 million in the prior year period. |
| --- | --- |
| ▪ | Cash was $5.4 million; total debt of $10 million. |
| --- | --- |
| ▪ | Adjusted EBITDA^2^ was $34.9 million, and Adjusted EBITDA margin^2^ was 23% compared to $32.0 million and 21% in the prior year period. |
| --- | --- |
^1^ Excludes Dice Europe, which ceased operations August 31, 2018.
^2^See "Notes Regarding the Use of Non-GAAP Financial Measures" later in this press release.
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Commenting on the quarter and the year, Art Zeile, President and CEO of DHI Group, Inc., said:
"We made significant progress during the year in building a strong foundation for future revenue growth and the long-term success of the Company. We delivered more product innovation in 2019 than the Company had delivered in the prior five years combined, and we intend to accelerate that pace of innovation in 2020 as the industry leader in the growing market for matching technologists with employers. We also strengthened our go-to-market strategy, with our new Chief Revenue Officer, Arie Kanofsky, adding top-notch sales leadership to his teams during the fourth quarter, while at the same time standing up new Dice commercial sales teams in Denver and New York. We believe our investments to further strengthen our product offerings and go-to-market strategy positions the Company to generate sustained long-term revenue growth in the future."
Product Highlights
In 2019, DHI delivered more than 20 marquee product releases and dozens of minor releases. DHI expects the pace of product development to increase in 2020 as a result of its investment in, and transformation of, its engineering team to a domain-driven engineering model. Below are the product highlights delivered during the fourth quarter:
Dice
| ▪ | Delivered Dice multi-location search and completed an update of Dice application management, which was the last piece in the complete renovation of the Dice client experience. In addition, all Dice clients have now been transitioned to TalentSearch 4.0. Dice Candidate Match, which was launched earlier in 2019, and the machine learning algorithm behind it, continues to improve with over 14 million successful matches in fiscal 2019. |
|---|
eFinancialCareers
| ▪ | eFC marketplace capabilities expanded with the launch of an upgraded Candidate Profile, which added new fields for candidates to share career experience and goal information. Candidate Profile and the Messaging feature drove thousands of messages sent, connecting employers and candidates on the platform. |
|---|
ClearanceJobs
| ▪ | ClearanceJobs continues to take the lead in driving new important capabilities, and in the fourth quarter delivered new dashboards for both employers and candidates that provide insight into their profile performance, network reach, and IntelliSearch-based recommendations to improve their connections. |
|---|
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Business Outlook
DHI expects revenue will turn to positive year-over-year growth in the second half of 2020, primarily driven by product development and increased investment in sales resources. The Company expects an Adjusted EBITDA margin^2^ of 20% for 2020, given its increased investment in product and engineering capacity and the ramp up of sales resources to accelerate revenue growth. The Company is not providing guidance for net income because it cannot reasonably assess the impact of stock-based compensation and income tax expense.
Conference Call Information
Art Zeile, President and Chief Executive Officer, and Kevin Bostick, Chief Financial Officer, will host a conference call today, February 5, 2020, at 5:00 p.m. Eastern Time to discuss the Company’s financial results, recent developments and progress on its tech-focused strategy.
The call can be accessed by dialing 844-890-1790 (in the U.S.) or 412-380-7407 (outside the U.S.). Please ask to be placed into the DHI Group, Inc. call. A live webcast of the call will simultaneously be available through the Investor Relations section of the Company’s website, https://www.dhigroupinc.com, and available for replay after the call ends.
About DHI Group, Inc.
DHI Group, Inc. (NYSE: DHX) is a leading provider of data, insights and employment connections through our specialized services for technology professionals and other select online communities. Our mission is to empower technology professionals and organizations that hire them to compete and win through expert insights and relevant employment connections. Employers and recruiters use our websites and services to source, hire and connect with the most qualified and highly-skilled technology professionals, while professionals use our websites and services to find ideal employment opportunities, relevant job advice and tailored career-related data. For nearly 30 years, we have built our Company on providing employers and professionals with career connections, news, tools and information. Today, we serve multiple markets in North America, Europe, the Middle East and the Asia Pacific region. Find out more at www.dhigroupinc.com.
^1^ Excludes Dice Europe, which ceased operations August 31, 2018.
^2^See "Notes Regarding the Use of Non-GAAP Financial Measures" later in this press release.
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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, measures in accordance with 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 Revenues, Adjusted EBITDA and Adjusted EBITDA margin 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 non-GAAP measures apply to consolidated results and results by segment or other measure as shown within this document. The Company has provided required reconciliations to the most comparable GAAP measures elsewhere in the document.
Adjusted Revenues
Adjusted Revenues is a non-GAAP metric used by management to measure operating performance. Adjusted Revenues represents Revenues less the revenues of divested businesses. We consider Adjusted Revenues to be an important measure to evaluate the performance of our ongoing businesses and provide comparable results excluding our divestitures.
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP metrics 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 represents net income plus (to the extent deducted in calculating such net income) interest expense, income tax expense, depreciation and amortization, non-cash stock based compensation, losses resulting from certain dispositions outside the ordinary course of business including prior negative operating results of those divested businesses, certain writeoffs 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, transaction costs in connection with the credit agreement, deferred revenues written off in connection with acquisition purchase accounting adjustments, writeoff of non-cash stock based compensation expense, severance and retention costs related to dispositions and reorganizations of the Company, 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, interest income, business interruption insurance proceeds, and 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.
We also consider Adjusted EBITDA, as defined above, to be an important indicator to investors because it provides 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. 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
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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.
Adjusted EBITDA Margin is computed as Adjusted EBITDA divided by Adjusted Revenues.
Adjusted Revenues, 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, net income, operating income, cash provided by operating activities, or any other performance measures derived in accordance with GAAP as a measure of our profitability.
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, without limitation, information concerning our possible or assumed future results of operations. 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, our ability to execute our tech-focused strategy, competition from existing and future competitors in the highly competitive markets 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 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 most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings 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 federal securities laws.
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Investor Contact
Todd Kehrli or Jim Byers
MKR Investor Relations, Inc.
212-448-4181
Media Contact
Rachel Ceccarelli
Senior Director Communications
212-448-8288
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| DHI GROUP, INC. | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||
| (Unaudited) | |||||||||||||
| (in thousands, except per share amounts) | |||||||||||||
| For the three months ended December 31, | For the year ended December 31, | ||||||||||||
| 2019 | 2018 | 2019 | 2018 | ||||||||||
| Revenues | $ | 37,715 | $ | 37,987 | $ | 149,370 | $ | 161,570 | |||||
| Operating expenses: | |||||||||||||
| Cost of revenues | 4,246 | 4,014 | 16,237 | 18,344 | |||||||||
| Product development | 4,508 | 4,401 | 17,216 | 20,212 | |||||||||
| Sales and marketing | 14,241 | 13,093 | 55,909 | 59,721 | |||||||||
| General and administrative | 7,783 | 9,577 | 31,003 | 37,589 | |||||||||
| Depreciation | 2,542 | 2,125 | 9,743 | 9,280 | |||||||||
| Amortization of intangible assets | — | — | — | 482 | |||||||||
| Disposition related and other costs | — | 2,405 | 1,700 | 7,619 | |||||||||
| Total operating expenses | 33,320 | 35,615 | 131,808 | 153,247 | |||||||||
| Gain (loss) on sale of businesses, net | — | (66 | ) | (537 | ) | 3,369 | |||||||
| Operating income | 4,395 | 2,306 | 17,025 | 11,692 | |||||||||
| Interest expense and other | (189 | ) | (684 | ) | (701 | ) | (2,054 | ) | |||||
| Other expense | — | 6 | — | (36 | ) | ||||||||
| Income before income taxes | 4,206 | 1,628 | 16,324 | 9,602 | |||||||||
| Income tax expense (benefit) | 685 | (1,318 | ) | 3,773 | 2,428 | ||||||||
| Net income | $ | 3,521 | $ | 2,946 | $ | 12,551 | $ | 7,174 | |||||
| Basic earnings per share | $ | 0.07 | $ | 0.06 | $ | 0.26 | $ | 0.15 | |||||
| Diluted earnings per share | $ | 0.07 | $ | 0.06 | $ | 0.24 | $ | 0.14 | |||||
| Weighted average basic shares outstanding | 48,950 | 48,315 | 48,739 | 48,520 | |||||||||
| Weighted average diluted shares outstanding | 51,910 | 49,547 | 51,633 | 49,605 |
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| DHI GROUP, INC. | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||
| (Unaudited) | |||||||||||||
| (in thousands) | |||||||||||||
| For the three months ended December 31, | For the year ended December 31, | ||||||||||||
| 2019 | 2018 | 2019 | 2018 | ||||||||||
| Cash flows from (used in) operating activities: | |||||||||||||
| Net income | $ | 3,521 | $ | 2,946 | $ | 12,551 | $ | 7,174 | |||||
| Adjustments to reconcile net income to net cash flows from operating activities: | |||||||||||||
| Depreciation | 2,542 | 2,125 | 9,743 | 9,280 | |||||||||
| Amortization of intangible assets | — | — | — | 482 | |||||||||
| Deferred income taxes | 1,920 | 869 | 2,493 | 2,699 | |||||||||
| Amortization of deferred financing costs | 37 | 196 | 147 | 342 | |||||||||
| Stock based compensation | 1,569 | 1,244 | 5,704 | 6,606 | |||||||||
| Change in accrual for unrecognized tax benefits | (212 | ) | (1,561 | ) | 107 | (1,179 | ) | ||||||
| (Gain) loss on sale of businesses, net | — | 66 | 537 | (3,369 | ) | ||||||||
| Changes in operating assets and liabilities: | |||||||||||||
| Accounts receivable | (5,550 | ) | (3,825 | ) | 1,694 | 11,947 | |||||||
| Prepaid expenses and other assets | (970 | ) | 50 | (904 | ) | 1,759 | |||||||
| Capitalized contract costs | (1,149 | ) | (1,649 | ) | 453 | (3,236 | ) | ||||||
| Accounts payable and accrued expenses | 2,523 | 5,923 | (5,621 | ) | 1,743 | ||||||||
| Income taxes receivable/payable | (1,261 | ) | 49 | (338 | ) | (972 | ) | ||||||
| Deferred revenue | 191 | (244 | ) | (4,583 | ) | (18,866 | ) | ||||||
| Other, net | 774 | 39 | 940 | 508 | |||||||||
| Net cash flows from operating activities | 3,935 | 6,228 | 22,923 | 14,918 | |||||||||
| Cash flows from (used in) investing activities: | |||||||||||||
| Net cash received from sale of businesses, net | — | — | 2,683 | 17,542 | |||||||||
| Purchases of fixed assets | (3,843 | ) | (3,449 | ) | (14,188 | ) | (10,053 | ) | |||||
| Net cash flows from (used in) investing activities | (3,843 | ) | (3,449 | ) | (11,505 | ) | 7,489 | ||||||
| Cash flows from (used in) financing activities: | |||||||||||||
| Payments on long-term debt | (3,000 | ) | (1,000 | ) | (28,000 | ) | (31,000 | ) | |||||
| Proceeds from long-term debt | 5,000 | 2,000 | 20,000 | 7,000 | |||||||||
| Payments under stock repurchase plan | (757 | ) | (1,149 | ) | (2,519 | ) | (1,977 | ) | |||||
| Purchase of treasury stock related to vested restricted stock units | (538 | ) | (146 | ) | (1,904 | ) | (693 | ) | |||||
| Financing costs paid | — | (504 | ) | — | (504 | ) | |||||||
| Net cash flows from (used) in financing activities | 705 | (799 | ) | (12,423 | ) | (27,174 | ) | ||||||
| Effect of exchange rate changes | 130 | (167 | ) | (86 | ) | (829 | ) | ||||||
| Net change in cash and cash equivalents for the period | 927 | 1,813 | (1,091 | ) | (5,596 | ) | |||||||
| Cash and cash equivalents, beginning of period | 4,454 | 4,659 | 6,472 | 12,068 | |||||||||
| Cash and cash equivalents, end of period | $ | 5,381 | $ | 6,472 | $ | 5,381 | $ | 6,472 |
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| DHI GROUP, INC. | ||||||
|---|---|---|---|---|---|---|
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
| (Unaudited) | ||||||
| (in thousands) | ||||||
| ASSETS | December 31, 2019 | December 31, 2018 | ||||
| Current assets | ||||||
| Cash and cash equivalents | $ | 5,381 | $ | 6,472 | ||
| Accounts receivable, net | 21,158 | 22,850 | ||||
| Income taxes receivable | 2,353 | 2,203 | ||||
| Prepaid and other current assets | 4,180 | 7,330 | ||||
| Total current assets | 33,072 | 38,855 | ||||
| Fixed assets, net | 20,352 | 15,890 | ||||
| Acquired intangible assets | 39,000 | 39,000 | ||||
| Capitalized contract costs | 7,515 | 7,939 | ||||
| Goodwill | 156,059 | 153,974 | ||||
| Deferred income taxes | 7 | 136 | ||||
| Operating lease right of use asset | 19,712 | — | ||||
| Other assets | 2,604 | 2,591 | ||||
| Total assets | $ | 278,321 | $ | 258,385 | ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
| Current liabilities | ||||||
| Accounts payable and accrued expenses | $ | 18,908 | $ | 25,030 | ||
| Operating lease liabilities | 3,643 | — | ||||
| Deferred revenue | 50,568 | 54,723 | ||||
| Income taxes payable | 984 | 1,168 | ||||
| Total current liabilities | 74,103 | 80,921 | ||||
| Long-term debt, net | 9,435 | 17,288 | ||||
| Deferred income taxes | 12,823 | 10,444 | ||||
| Deferred revenue | 1,058 | 1,363 | ||||
| Accrual for unrecognized tax benefits | 1,787 | 1,680 | ||||
| Operating lease liabilities | 16,664 | — | ||||
| Other long-term liabilities | 1,256 | 1,334 | ||||
| Total liabilities | 117,126 | 113,030 | ||||
| Total stockholders’ equity | 161,195 | 145,355 | ||||
| Total liabilities and stockholders’ equity | $ | 278,321 | $ | 258,385 |
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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 twelve month periods ended December 31, 2019 and 2018 and balance sheets as of December 31, 2019 and 2018 are provided elsewhere in this press release.
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| DHI GROUP, INC. | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| NON-GAAP SUPPLEMENTAL DATA | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| (dollars in thousands, except per customer data) | |||||||||||||||||||
| For the three months ended December 31, | For the year ended December 31, | ||||||||||||||||||
| 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
| Reconciliation of Net Income to Adjusted EBITDA: | |||||||||||||||||||
| Net income | $ | 3,521 | $ | 2,946 | $ | 12,551 | $ | 7,174 | |||||||||||
| Interest expense | 191 | 684 | 703 | 2,054 | |||||||||||||||
| Income tax (benefit) expense | 685 | (1,318 | ) | 3,773 | 2,428 | ||||||||||||||
| Depreciation | 2,542 | 2,125 | 9,743 | 9,280 | |||||||||||||||
| Amortization of intangible assets | — | — | — | 482 | |||||||||||||||
| Non-cash stock based compensation | 1,569 | 1,244 | 5,704 | 6,606 | |||||||||||||||
| (Gain) loss on sale of businesses, net | — | 66 | 537 | (3,369 | ) | ||||||||||||||
| Disposition related and other costs | — | 2,405 | 1,700 | 7,619 | |||||||||||||||
| Legal contingencies and related fees | (14 | ) | 188 | 149 | 1,965 | ||||||||||||||
| Divested businesses | — | — | — | (2,243 | ) | ||||||||||||||
| Other | 60 | (6 | ) | (1 | ) | 36 | |||||||||||||
| Adjusted EBITDA | $ | 8,554 | $ | 8,334 | $ | 34,859 | $ | 32,032 | |||||||||||
| Reconciliation of Operating Cash Flows to Adjusted EBITDA: | |||||||||||||||||||
| Net cash provided by operating activities | $ | 3,935 | $ | 6,228 | $ | 22,923 | $ | 14,918 | |||||||||||
| Interest expense | 191 | 684 | 703 | 2,054 | |||||||||||||||
| Amortization of deferred financing costs | (37 | ) | (196 | ) | (147 | ) | (342 | ) | |||||||||||
| Income tax (benefit) expense | 685 | (1,318 | ) | 3,773 | 2,428 | ||||||||||||||
| Deferred income taxes | (1,920 | ) | (869 | ) | (2,493 | ) | (2,699 | ) | |||||||||||
| Change in accrual for unrecognized tax benefits | 212 | 1,561 | (107 | ) | 1,179 | ||||||||||||||
| Change in accounts receivable | 5,550 | 3,825 | (1,694 | ) | (11,947 | ) | |||||||||||||
| Change in deferred revenue | (191 | ) | 244 | 4,583 | 18,866 | ||||||||||||||
| Disposition related and other costs | — | 2,405 | 1,700 | 7,619 | |||||||||||||||
| Legal contingencies and related fees | (14 | ) | 188 | 149 | 1,965 | ||||||||||||||
| Divested businesses | — | — | — | (2,243 | ) | ||||||||||||||
| Changes in working capital and other | 143 | (4,418 | ) | 5,469 | 234 | ||||||||||||||
| Adjusted EBITDA | $ | 8,554 | $ | 8,334 | $ | 34,859 | $ | 32,032 | |||||||||||
| Dice Recruitment Package Customers | |||||||||||||||||||
| Beginning of period | 6,100 | 6,200 | 6,200 | 6,450 | |||||||||||||||
| End of period | 6,000 | 6,200 | 6,000 | 6,200 | |||||||||||||||
| Average for the period (1) | 6,100 | 6,200 | 6,100 | 6,200 | |||||||||||||||
| Dice Average Monthly Revenue per Recruitment Package Customer (2) | $ | 1,144 | $ | 1,129 | $ | 1,135 | $ | 1,119 | |||||||||||
| (1) Reflects the daily average of recruitment package customers during the period. | |||||||||||||||||||
| (2) Reflects the simple average of each period presented. | Summary of Deferred Revenue and Backlog: | December 31, 2019 | December 31, 2018 | ||||||||||||||||
| --- | --- | --- | --- | --- | |||||||||||||||
| Deferred Revenue | 51,626 | 56,086 | |||||||||||||||||
| Contractual commitments not invoiced | 37,093 | 25,845 | |||||||||||||||||
| Backlog^3^ | $ | 88,719 | $ | 81,931 | |||||||||||||||
| (3) Backlog consists of deferred revenue plus customer contractual commitments not invoiced representing the value of future services to be rendered under committed contracts. |
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| DHI GROUP, INC. | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| NON-GAAP SUPPLEMENTAL DATA (CONTINUED) | ||||||||||
| (Unaudited) | ||||||||||
| (in thousands) | ||||||||||
| For the three months ended December 31, 2019 | ||||||||||
| Reconciliation of Operating Income to Adjusted EBITDA: | Tech-focused | Other | Total | |||||||
| Operating income | $ | 4,395 | $ | — | $ | 4,395 | ||||
| Depreciation | 2,542 | — | 2,542 | |||||||
| Non-cash stock based compensation | 1,569 | — | 1,569 | |||||||
| Legal contingencies and related fees | (14 | ) | — | (14 | ) | |||||
| Other | 62 | — | 62 | |||||||
| Adjusted EBITDA | $ | 8,554 | $ | — | $ | 8,554 | ||||
| For the three months ended December 31, 2018 | ||||||||||
| Reconciliation of Operating Income (Loss) to Adjusted EBITDA: | Tech-focused | Other | Total | |||||||
| Operating income (loss) | $ | 2,373 | $ | (67 | ) | $ | 2,306 | |||
| Depreciation | 2,125 | — | 2,125 | |||||||
| Non-cash stock based compensation | 1,244 | — | 1,244 | |||||||
| Disposition related and other costs | 2,405 | — | 2,405 | |||||||
| Legal contingencies and related fees | 188 | — | 188 | |||||||
| Loss on sale of businesses | — | 66 | 66 | |||||||
| Other | (1 | ) | 1 | — | ||||||
| Adjusted EBITDA | $ | 8,334 | $ | — | $ | 8,334 | ||||
| For the year ended December 31, 2019 | ||||||||||
| Reconciliation of Operating Income to Adjusted EBITDA: | Tech-focused | Other | Total | |||||||
| Operating income | $ | 17,025 | $ | — | $ | 17,025 | ||||
| Depreciation | 9,743 | — | 9,743 | |||||||
| Non-cash stock based compensation | 5,704 | — | 5,704 | |||||||
| Disposition related and other costs | 1,700 | — | 1,700 | |||||||
| Legal contingencies and related fees | 149 | — | 149 | |||||||
| Loss on sale of businesses | 537 | — | 537 | |||||||
| Other | 1 | 1 | ||||||||
| Adjusted EBITDA | $ | 34,859 | $ | — | $ | 34,859 | ||||
| For the year ended December 31, 2018 | ||||||||||
| Reconciliation of Operating Income to Adjusted EBITDA: | Tech-focused | Other | Total | |||||||
| Operating income | $ | 7,280 | $ | 4,412 | $ | 11,692 | ||||
| Depreciation | 9,001 | 279 | 9,280 | |||||||
| Amortization of intangible assets | — | 482 | 482 | |||||||
| Non-cash stock based compensation | 6,434 | 172 | 6,606 | |||||||
| Disposition related and other costs | 7,352 | 267 | 7,619 | |||||||
| Legal contingencies and related fees | 1,965 | — | 1,965 | |||||||
| Divested businesses | — | (2,243 | ) | (2,243 | ) | |||||
| Gain on sale of business | — | (3,369 | ) | (3,369 | ) | |||||
| Adjusted EBITDA | $ | 32,032 | $ | — | $ | 32,032 |
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| For the three months ended December 31, 2019 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Reconciliation of Revenues to Adjusted Revenues: | Tech-focused | Other | Total | ||||||||
| Revenues | $ | 37,715 | $ | — | $ | 37,715 | |||||
| Divested businesses | — | — | — | ||||||||
| Adjusted Revenues | $ | 37,715 | $ | — | $ | 37,715 | |||||
| For the three months ended December 31, 2018 | |||||||||||
| Reconciliation of Revenues to Adjusted Revenues: | Tech-focused | Other | Total | ||||||||
| Revenues | $ | 37,987 | $ | — | $ | 37,987 | |||||
| Divested businesses | — | — | — | ||||||||
| Adjusted Revenues | $ | 37,987 | $ | — | $ | 37,987 | |||||
| For the year ended December 31, 2019 | |||||||||||
| Reconciliation of Revenues to Adjusted Revenues: | Tech-focused | Other | Total | ||||||||
| Revenues | $ | 149,370 | $ | — | $ | 149,370 | |||||
| Divested businesses | — | — | — | ||||||||
| Adjusted Revenues | $ | 149,370 | $ | — | $ | 149,370 | |||||
| For the year ended December 31, 2018 | |||||||||||
| Reconciliation of Revenues to Adjusted Revenues: | Tech-focused | Other | Total | ||||||||
| Revenues | $ | 152,258 | $ | 9,312 | $ | 161,570 | |||||
| Divested businesses | — | (9,312 | ) | (9,312 | ) | ||||||
| Adjusted Revenues | $ | 152,258 | $ | — | $ | 152,258 | Definitions: | ||||
| --- | |||||||||||
| Tech-focused: Dice, Dice Europe (ceased operations on August 31, 2018), eFinancialCareers, ClearanceJobs, Career Events (formerly known as Targeted Job Fairs) and Corporate. | |||||||||||
| Other:^1^ Hcareers, Rigzone, and BioSpace. | |||||||||||
| ^1^Majority ownership of the BioSpace business was transferred to BioSpace management on January 31, 2018, the RigLogix portion of the Rigzone business was sold on February 20, 2018, Hcareers was sold on May 22, 2018, and majority ownership of the remaining Rigzone business was transferred to Rigzone management on August 31, 2018. |
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| DHI GROUP, INC. | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| NON-GAAP SUPPLEMENTAL DATA (CONTINUED) | |||||||||
| (Unaudited) | |||||||||
| (in thousands) | |||||||||
| Revenue | |||||||||
| Q4 2019 | Q4 2018 | Change | Fx Impact3 | ||||||
| Dice | $ | 23,251 | $ | 23,952 | (3)% | ||||
| eFinancialCareers | 7,835 | 8,340 | (6)% | 15 | |||||
| ClearanceJobs | 6,629 | 5,727 | 16% | — | |||||
| Tech-focused, excluding Dice Europe | 37,715 | 38,019 | (1)% | 15 | |||||
| Dice Europe ^(1)^ | — | (32 | ) | n.m. | — | ||||
| Tech-focused | 37,715 | 37,987 | (1)% | 15 | |||||
| Total Revenues | $ | 37,715 | $ | 37,987 | (1)% | ||||
| Net Income | $ | 3,521 | $ | 2,946 | |||||
| Diluted earnings per share | $ | 0.07 | $ | 0.06 | |||||
| Adjusted Revenues | $ | 37,715 | $ | 37,987 | |||||
| Adjusted EBITDA | $ | 8,554 | $ | 8,334 | |||||
| Adjusted EBITDA Margin | 23 | % | 22 | % | |||||
| Revenue | |||||||||
| FY 2019 | FY 2018 | Change | Fx Impact3 | ||||||
| Dice | $ | 92,527 | $ | 94,438 | (2)% | ||||
| eFinancialCareers | 32,098 | 33,758 | (5)% | (1,002 | ) | ||||
| ClearanceJobs | 24,745 | 21,086 | 17% | — | |||||
| Tech-focused, excluding Dice Europe | 149,370 | 149,282 | —% | (1,002 | ) | ||||
| Dice Europe^(1)^ | — | 2,976 | n.m. | — | |||||
| Tech-focused | 149,370 | 152,258 | (2)% | (1,002 | ) | ||||
| Hcareers^(2)^ | — | 5,329 | n.m. | — | |||||
| Rigzone^(2)^ | — | 3,771 | n.m. | — | |||||
| BioSpace^(2)^ | — | 212 | n.m. | — | |||||
| Other | — | 9,312 | n.m. | — | |||||
| Total Revenues | $ | 149,370 | $ | 161,570 | (8)% | ) | |||
| Net Income | $ | 12,551 | $ | 7,174 | |||||
| Diluted earnings per share | $ | 0.24 | $ | 0.14 | |||||
| Adjusted Revenues | $ | 149,370 | $ | 152,258 | |||||
| Adjusted EBITDA | $ | 34,859 | $ | 32,032 | |||||
| Adjusted EBITDA Margin | 23 | % | 21 | % | |||||
| (1) Dice Europe ceased operations on August 31, 2018. | |||||||||
| (2) Majority ownership of the BioSpace business was transferred to BioSpace management on January 31, 2018, the RigLogix portion of the Rigzone business was sold on February 20, 2018, Hcareers was sold on May 22, 2018, and majority ownership of the remaining Rigzone business was transferred to Rigzone management on August 31, 2018. | |||||||||
| (3) Foreign exchange impact is calculated by determining the increase (decrease) in current period revenues where current period revenues are translated using prior period exchange rates. |
All values are in US Dollars.
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