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.
|
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/dhi-group-inc-announces-third-quarter-2016-results-completion-of-comprehensive-strategic-review-and-intention-to-explore-strategic-alternatives-300354737.html
SOURCE DHI Group, Inc.