UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One) | | | | | |
☑ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarter ended SeptemberJune 30, 20212022
OR | | | | | |
☐ | TRANSITION PERIOD PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE TRANSITION PERIOD FROM TO
Commission File Number: 001-33584
____________________________________________
DHI Group, Inc.
(Exact name of Registrant as specified in its Charter)
______________________________________________ | | | | | | | | |
Delaware | | 20-3179218 |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
6465 South Greenwood Plaza, Suite 400
Centennial, Colorado
(Address of principal executive offices)
80111
6465 South Greenwood Plaza, Suite 400 | | 80111 |
Centennial, Colorado | | (Zip Code) |
(Address of principal executive offices) | | |
(212) 448-6605
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
_______________________________________________ | | | | | | | | |
Securities registered pursuant to Section 12(b) of the Act: |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Stock, par value $0.01 per share | DHX | New York Stock Exchange |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ Accelerated filer ☑ Non-accelerated filer ☐ Smaller Reporting Company ☑ Emerging Growth Company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
As of November 5, 2021,July 29, 2022, there were 49,542,05948,501,668 shares of the registrant’s common stock, par value $.01 per share, outstanding.
DHI GROUP, INC.
TABLE OF CONTENTS
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PART I. | FINANCIAL INFORMATION | | |
Item 1. | | | |
| Condensed Consolidated Balance Sheets as of SeptemberJune 30, 20212022 and December 31, 20202021 | | |
| Condensed Consolidated Statements of Operations for the three and ninesix month periods ended SeptemberJune 30, 20212022 and 20202021 | | |
| Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and ninesix month periods ended SeptemberJune 30, 20212022 and 20202021 | | |
| Condensed Consolidated Statements of Stockholders' Equity for the three and ninesix month periods ended SeptemberJune 30, 20212022 and 20202021 | | |
| Condensed Consolidated Statements of Cash Flows for the ninesix month periods ended SeptemberJune 30, 20212022 and 20202021 | | |
| Notes to Condensed Consolidated Financial Statements | | |
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Item 2. | | | |
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Item 3. | | | |
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Item 4. | | | |
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PART II. | OTHER INFORMATION | | |
Item 1. | | | |
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Item 1A. | | | |
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Item 2. | | | |
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Item 5. | | | |
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Item 6. | | | |
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SIGNATURES | | |
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | |
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | |
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | |
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | |
PART I
ITEM 1. Financial Statements
DHI GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands, except per share data) | | | September 30, 2021 | | December 31, 2020 | | June 30, 2022 | | December 31, 2021 |
ASSETS | ASSETS | | | | ASSETS | | | |
Current assets | Current assets | | Current assets | |
Cash and cash equivalents | Cash and cash equivalents | $ | 3,486 | | | $ | 4,542 | | Cash and cash equivalents | $ | 3,615 | | | $ | 1,540 | |
Accounts receivable, net of allowance for doubtful accounts of $816 and $1,001 | 15,267 | | | 16,134 | | |
Accounts receivable, net of allowance for doubtful accounts of $881 and $733 | | Accounts receivable, net of allowance for doubtful accounts of $881 and $733 | 18,342 | | | 18,385 | |
Income taxes receivable | Income taxes receivable | 174 | | | 533 | | Income taxes receivable | — | | | 354 | |
Prepaid and other current assets | Prepaid and other current assets | 4,563 | | | 4,101 | | Prepaid and other current assets | 5,730 | | | 4,177 | |
Current assets of discontinued operations | — | | | 8,175 | | |
Total current assets | Total current assets | 23,490 | | | 33,485 | | Total current assets | 27,687 | | | 24,456 | |
Fixed assets, net | Fixed assets, net | 21,201 | | | 23,033 | | Fixed assets, net | 20,941 | | | 20,581 | |
Capitalized contract costs | Capitalized contract costs | 7,029 | | | 6,189 | | Capitalized contract costs | 9,279 | | | 9,131 | |
Operating lease right-of-use assets | Operating lease right-of-use assets | 7,333 | | | 10,804 | | Operating lease right-of-use assets | 5,981 | | | 6,888 | |
Investments | Investments | 3,640 | | | — | | Investments | 4,233 | | | 3,769 | |
Investments, at fair value | Investments, at fair value | 3,000 | | | — | | Investments, at fair value | 3,000 | | | 3,000 | |
Acquired intangible assets | Acquired intangible assets | 23,800 | | | 23,800 | | Acquired intangible assets | 23,800 | | | 23,800 | |
Goodwill | Goodwill | 128,100 | | | 128,100 | | Goodwill | 128,100 | | | 128,100 | |
Other assets | Other assets | 1,590 | | | 1,378 | | Other assets | 3,200 | | | 1,853 | |
Non-current assets of discontinued operations | — | | | 14,198 | | |
Total assets | Total assets | $ | 219,183 | | | $ | 240,987 | | Total assets | $ | 226,221 | | | $ | 221,578 | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | LIABILITIES AND STOCKHOLDERS’ EQUITY | | | |
Current liabilities | Current liabilities | | Current liabilities | |
Accounts payable and accrued expenses | Accounts payable and accrued expenses | $ | 16,142 | | | $ | 15,308 | | Accounts payable and accrued expenses | $ | 16,987 | | | $ | 15,859 | |
Deferred revenue | Deferred revenue | 42,486 | | | 35,547 | | Deferred revenue | 53,371 | | | 45,217 | |
Income taxes payable | | Income taxes payable | 622 | | | — | |
Operating lease liabilities | Operating lease liabilities | 2,102 | | | 2,075 | | Operating lease liabilities | 2,417 | | | 2,388 | |
Current liabilities of discontinued operations | — | | | 12,455 | | |
Total current liabilities | Total current liabilities | 60,730 | | | 65,385 | | Total current liabilities | 73,397 | | | 63,464 | |
Deferred revenue | Deferred revenue | 917 | | | 1,035 | | Deferred revenue | 773 | | | 929 | |
Operating lease liabilities | Operating lease liabilities | 7,591 | | | 9,371 | | Operating lease liabilities | 5,774 | | | 6,982 | |
Long-term debt, net | Long-term debt, net | 17,693 | | | 19,583 | | Long-term debt, net | 30,000 | | | 22,730 | |
Deferred income taxes | Deferred income taxes | 9,174 | | | 9,765 | | Deferred income taxes | 6,223 | | | 9,315 | |
Accrual for unrecognized tax benefits | Accrual for unrecognized tax benefits | 995 | | | 941 | | Accrual for unrecognized tax benefits | 979 | | | 785 | |
Other long-term liabilities | Other long-term liabilities | 1,924 | | | 2,049 | | Other long-term liabilities | 970 | | | 1,011 | |
Non-current liabilities of discontinued operations | — | | | 5,288 | | |
Total liabilities | Total liabilities | 99,024 | | | 113,417 | | Total liabilities | 118,116 | | | 105,216 | |
Commitments and Contingencies (Note 11) | Commitments and Contingencies (Note 11) | | | | Commitments and Contingencies (Note 11) | | | |
Stockholders’ equity | Stockholders’ equity | | Stockholders’ equity | |
Convertible preferred stock, $.01 par value, authorized 20,000 shares; no shares issued and outstanding | Convertible preferred stock, $.01 par value, authorized 20,000 shares; no shares issued and outstanding | — | | | — | | Convertible preferred stock, $.01 par value, authorized 20,000 shares; no shares issued and outstanding | — | | | — | |
Common stock, $.01 par value, authorized 240,000; issued: 73,576 and 71,233 shares, respectively; outstanding: 49,868 and 51,220 shares, respectively | 735 | | | 714 | | |
Common stock, $.01 par value, authorized 240,000; issued: 76,117 and 73,584 shares, respectively; outstanding: 48,525 and 48,756 shares, respectively | | Common stock, $.01 par value, authorized 240,000; issued: 76,117 and 73,584 shares, respectively; outstanding: 48,525 and 48,756 shares, respectively | 761 | | | 738 | |
Additional paid-in capital | Additional paid-in capital | 239,766 | | | 233,554 | | Additional paid-in capital | 246,645 | | | 241,854 | |
Accumulated other comprehensive loss | Accumulated other comprehensive loss | — | | | (28,519) | | Accumulated other comprehensive loss | (111) | | | (61) | |
Accumulated earnings | Accumulated earnings | 23,997 | | | 53,971 | | Accumulated earnings | 26,980 | | | 24,229 | |
Treasury stock, 23,708 and 20,013 shares, respectively | (144,339) | | | (132,150) | | |
Treasury stock, 27,592 and 24,828 shares, respectively | | Treasury stock, 27,592 and 24,828 shares, respectively | (166,170) | | | (150,398) | |
Total stockholders’ equity | Total stockholders’ equity | 120,159 | | | 127,570 | | Total stockholders’ equity | 108,105 | | | 116,362 | |
Total liabilities and stockholders’ equity | Total liabilities and stockholders’ equity | $ | 219,183 | | | $ | 240,987 | | Total liabilities and stockholders’ equity | $ | 226,221 | | | $ | 221,578 | |
See accompanying notes to the condensed consolidated financial statements. | See accompanying notes to the condensed consolidated financial statements. | | | | See accompanying notes to the condensed consolidated financial statements. | | | |
DHI GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share amounts)
| | | Three Months Ended September 30, | | Nine Months Ended September 30, | | Three Months Ended June 30, | | Six Months Ended June 30, |
| | 2021 | | 2020 | | 2021 | | 2020 | | 2022 | | 2021 | | 2022 | | 2021 |
Revenues | Revenues | $ | 30,758 | | | $ | 27,149 | | | $ | 86,155 | | | $ | 84,130 | | Revenues | $ | 37,057 | | | $ | 28,721 | | | $ | 71,391 | | | $ | 55,397 | |
| Operating expenses: | Operating expenses: | | Operating expenses: | |
Cost of revenues | Cost of revenues | 3,791 | | | 3,549 | | | 11,086 | | | 10,532 | | Cost of revenues | 4,181 | | | 3,593 | | | 8,280 | | | 7,295 | |
Product development | Product development | 4,056 | | | 3,697 | | | 11,168 | | | 10,839 | | Product development | 4,360 | | | 3,510 | | | 8,302 | | | 7,112 | |
Sales and marketing | Sales and marketing | 11,292 | | | 9,065 | | | 31,214 | | | 30,177 | | Sales and marketing | 14,274 | | | 10,151 | | | 28,215 | | | 19,922 | |
General and administrative | General and administrative | 7,556 | | | 6,319 | | | 20,649 | | | 20,438 | | General and administrative | 9,109 | | | 6,939 | | | 16,875 | | | 13,093 | |
Depreciation | Depreciation | 4,359 | | | 2,390 | | | 12,030 | | | 7,730 | | Depreciation | 4,228 | | | 4,040 | | | 8,186 | | | 7,671 | |
Impairment of intangible assets | — | | | 8,000 | | | — | | | 15,200 | | |
Impairment of goodwill | — | | | 22,607 | | | — | | | 22,607 | | |
Impairment of right-of-use asset | 1,919 | | | — | | | 1,919 | | | — | | |
Total operating expenses | Total operating expenses | 32,973 | | | 55,627 | | | 88,066 | | | 117,523 | | Total operating expenses | 36,152 | | | 28,233 | | | 69,858 | | | 55,093 | |
Operating loss | (2,215) | | | (28,478) | | | (1,911) | | | (33,393) | | |
Operating income | | Operating income | 905 | | | 488 | | | 1,533 | | | 304 | |
Income from equity method investment | | Income from equity method investment | 361 | | | — | | | 516 | | | — | |
Gain (loss) on investments | | Gain (loss) on investments | 320 | | | (674) | | | 320 | | | 1,839 | |
Interest expense and other | Interest expense and other | (150) | | | (273) | | | (432) | | | (622) | | Interest expense and other | (298) | | | (87) | | | (543) | | | (282) | |
Impairment of investment | — | | | — | | | — | | | (2,002) | | |
Gain (loss) on investments | (641) | | | — | | | 1,198 | | | — | | |
Loss before income taxes | (3,006) | | | (28,751) | | | (1,145) | | | (36,017) | | |
Income tax benefit | (572) | | | (1,758) | | | (511) | | | (2,651) | | |
Loss from continuing operations | (2,434) | | | (26,993) | | | (634) | | | (33,366) | | |
Income (loss) from discontinued operations, net of tax | — | | | (329) | | | (29,340) | | | 1,356 | | |
Net loss | $ | (2,434) | | | $ | (27,322) | | | $ | (29,974) | | | $ | (32,010) | | |
Income (loss) before income taxes | | Income (loss) before income taxes | 1,288 | | | (273) | | | 1,826 | | | 1,861 | |
Income tax expense (benefit) | | Income tax expense (benefit) | (162) | | | (61) | | | (925) | | | 61 | |
Income (loss) from continuing operations | | Income (loss) from continuing operations | 1,450 | | | (212) | | | 2,751 | | | 1,800 | |
Loss from discontinued operations, net of tax | | Loss from discontinued operations, net of tax | — | | | (29,999) | | | — | | | (29,340) | |
Net income (loss) | | Net income (loss) | $ | 1,450 | | | $ | (30,211) | | | $ | 2,751 | | | $ | (27,540) | |
| Basic loss per share - continuing operations | $ | (0.05) | | | $ | (0.56) | | | $ | (0.01) | | | $ | (0.69) | | |
Diluted loss per share - continuing operations | $ | (0.05) | | | $ | (0.56) | | | $ | (0.01) | | | $ | (0.69) | | |
Basic earnings per share - continuing operations | | Basic earnings per share - continuing operations | $ | 0.03 | | | $ | — | | | $ | 0.06 | | | $ | 0.04 | |
Diluted earnings per share - continuing operations | | Diluted earnings per share - continuing operations | $ | 0.03 | | | $ | — | | | $ | 0.06 | | | $ | 0.04 | |
| Basic earnings (loss) per share - discontinued operations | Basic earnings (loss) per share - discontinued operations | $ | — | | | $ | (0.01) | | | $ | (0.63) | | | $ | 0.03 | | Basic earnings (loss) per share - discontinued operations | $ | — | | | $ | (0.64) | | | $ | — | | | $ | (0.62) | |
Diluted earnings (loss) per share - discontinued operations | Diluted earnings (loss) per share - discontinued operations | $ | — | | | $ | (0.01) | | | $ | (0.63) | | | $ | 0.03 | | Diluted earnings (loss) per share - discontinued operations | $ | — | | | $ | (0.64) | | | $ | — | | | $ | (0.60) | |
| Basic loss per share | $ | (0.05) | | | $ | (0.57) | | | $ | (0.64) | | | $ | (0.66) | | |
Diluted loss per share | $ | (0.05) | | | $ | (0.57) | | | $ | (0.64) | | | $ | (0.66) | | |
Basic earnings (loss) per share | | Basic earnings (loss) per share | $ | 0.03 | | | $ | (0.64) | | | $ | 0.06 | | | $ | (0.58) | |
Diluted earnings (loss) per share | | Diluted earnings (loss) per share | $ | 0.03 | | | $ | (0.64) | | | $ | 0.06 | | | $ | (0.56) | |
| Weighted-average basic shares outstanding | Weighted-average basic shares outstanding | 45,807 | | | 47,955 | | | 46,740 | | | 48,503 | | Weighted-average basic shares outstanding | 44,682 | | | 47,227 | | | 44,692 | | | 47,111 | |
Weighted-average diluted shares outstanding | Weighted-average diluted shares outstanding | 45,807 | | | 47,955 | | | 46,740 | | | 48,503 | | Weighted-average diluted shares outstanding | 46,961 | | | 47,227 | | | 46,977 | | | 48,854 | |
See accompanying notes to the condensed consolidated financial statements.
DHI GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(unaudited)
(in thousands)
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| 2021 | | 2020 | | 2021 | | 2020 |
Net loss | $ | (2,434) | | | $ | (27,322) | | | $ | (29,974) | | | $ | (32,010) | |
| | | | | | | |
Other comprehensive income (loss): | | | | | | | |
Foreign currency translation adjustment | — | | | 2,719 | | | 456 | | | (1,351) | |
Cumulative translation adjustments reclassified to the Statements of Operations | — | | | — | | | 28,063 | | | — | |
Total other comprehensive income (loss) | — | | | 2,719 | | | 28,519 | | | (1,351) | |
Comprehensive loss | $ | (2,434) | | | $ | (24,603) | | | $ | (1,455) | | | $ | (33,361) | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2022 | | 2021 | | 2022 | | 2021 |
Net income (loss) | $ | 1,450 | | | $ | (30,211) | | | $ | 2,751 | | | $ | (27,540) | |
| | | | | | | |
Other comprehensive income: | | | | | | | |
Foreign currency translation adjustment | (58) | | | 159 | | | (50) | | | 456 | |
Cumulative translation adjustments reclassified to the Statement of Operations | — | | | 28,063 | | | — | | | 28,063 | |
Total other comprehensive income | (58) | | | 28,222 | | | (50) | | | 28,519 | |
Comprehensive income (loss) | $ | 1,392 | | | $ | (1,989) | | | $ | 2,701 | | | $ | 979 | |
See accompanying notes to the condensed consolidated financial statements.
DHI GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(unaudited)
(in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Convertible Preferred Stock | | Common Stock | | Additional Paid-in Capital | | Treasury Stock | Accumulated Earnings | | Accumulated Other Comprehensive Loss | | Total |
Shares Issued | | Amount | | Shares Issued | | Amount | | Shares | | Amount | |
Balance at December 31, 2020 | — | | | $ | — | | | 71,233 | | | $ | 714 | | | $ | 233,554 | | | 20,013 | | | $ | (132,150) | | | $ | 53,971 | | | $ | (28,519) | | | $ | 127,570 | |
Net income | | | | | | | | | | | | | | | 2,671 | | | | | 2,671 | |
Other comprehensive income - translation adjustments | | | | | | | | | | | | | | | | | 297 | | | 297 | |
Stock based compensation | | | | | | | | | 1,758 | | | | | | | | | | | 1,758 | |
Restricted stock issued | | | | | 1,468 | | | 15 | | | | | | | | | | | | | 15 | |
Restricted stock forfeited or withheld to satisfy tax obligations | | | | | (204) | | | (2) | | | | | 369 | | | (984) | | | | | | | (986) | |
Performance-Based Restricted Stock Units forfeited or withheld to satisfy tax obligations | | | | | (39) | | | — | | | | | 139 | | | (357) | | | | | | | (357) | |
Performance-Based Restricted Stock Units eligible to vest | | | | | 813 | | | 8 | | | | | | | | | | | | | 8 | |
Purchase of treasury stock under stock repurchase plan | | | | | | | | | | | 590 | | | (1,546) | | | | | | | (1,546) | |
Balance at March 31, 2021 | — | | | $ | — | | | 73,271 | | | $ | 735 | | | $ | 235,312 | | | 21,111 | | | $ | (135,037) | | | $ | 56,642 | | | $ | (28,222) | | | $ | 129,430 | |
Net loss | | | | | | | | | | | | | | | (30,211) | | | | | (30,211) | |
Other comprehensive income - translation adjustments | | | | | | | | | | | | | | | | | 159 | | | 159 | |
Cumulative translation adjustments reclassified to the Statements of Operations | | | | | | | | | | | | | | | | | 28,063 | | | 28,063 | |
Stock based compensation | | | | | | | | | 2,302 | | | | | | | | | | | 2,302 | |
Restricted stock issued | | | | | 292 | | | 2 | | | | | | | | | | | | | 2 | |
Restricted stock forfeited or withheld to satisfy tax obligations | | | | | (328) | | | (4) | | | | | 135 | | | (430) | | | | | | | (434) | |
Performance-Based Restricted Stock Units forfeited or withheld to satisfy tax obligations | | | | | — | | | — | | | | | 17 | | | (57) | | | | | | | (57) | |
Purchase of treasury stock under stock repurchase plan | | | | | | | | | | | 532 | | | (1,756) | | | | | | | (1,756) | |
Balance at June 30, 2021 | — | | | $ | — | | | 73,235 | | | $ | 733 | | | $ | 237,614 | | | 21,795 | | | $ | (137,280) | | | $ | 26,431 | | | $ | — | | | $ | 127,498 | |
Net loss | | | | | | | | | | | | | | | (2,434) | | | | | (2,434) | |
Stock based compensation | | | | | | | | | 2,154 | | | | | | | | | | | 2,154 | |
Restricted stock issued | | | | | 463 | | | 4 | | | (4) | | | | | | | | | | | — | |
Restricted stock forfeited or withheld to satisfy tax obligations | | | | | (116) | | | (2) | | | 2 | | | 89 | | | (303) | | | | | | | (303) | |
Performance-Based Restricted Stock Units forfeited or withheld to satisfy tax obligations | | | | | (6) | | | — | | | — | | | — | | | — | | | | | | | — | |
Purchase of treasury stock under stock repurchase plan | | | | | | | | | | | 1,824 | | | (6,756) | | | | | | | (6,756) | |
Balance at September 30, 2021 | — | | | $ | — | | | 73,576 | | | $ | 735 | | | $ | 239,766 | | | 23,708 | | | $ | (144,339) | | | $ | 23,997 | | | $ | — | | | $ | 120,159 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Convertible Preferred Stock | | Common Stock | | Additional Paid-in Capital | | Treasury Stock | Accumulated Earnings | | Accumulated Other Comprehensive Income (Loss) | | Total |
Shares Issued | | Amount | | Shares Issued | | Amount | | Shares | | Amount | |
Balance at December 31, 2021 | — | | | $ | — | | | 73,584 | | | $ | 738 | | | $ | 241,854 | | | 24,828 | | | $ | (150,398) | | | $ | 24,229 | | | $ | (61) | | | 116,362 | |
Net income | | | | | | | | | | | | | | | 1,301 | | | | | 1,301 | |
Other comprehensive income - translation adjustments | | | | | | | | | | | | | | | | | 8 | | | 8 | |
Stock-based compensation | | | | | | | | | 2,235 | | | | | | | | | | | 2,235 | |
Restricted stock issued | | | | | 932 | | | 9 | | | (9) | | | | | | | | | | | — | |
Performance-Based Restricted Stock Units eligible to vest | | | | | 1,773 | | | 17 | | | (17) | | | | | | | | | | | — | |
Restricted stock forfeited or withheld to satisfy tax obligations | | | | | (82) | | | (1) | | | 1 | | | 417 | | | (2,309) | | | | | | | (2,309) | |
Performance-Based Restricted Stock Units forfeited or withheld to satisfy tax obligations | | | | | (93) | | | (1) | | | 1 | | | 356 | | | (1,893) | | | | | | | (1,893) | |
Purchase of treasury stock under stock repurchase plan | | | | | | | | | | | 1,302 | | | (7,499) | | | | | | | (7,499) | |
Balance at March 31, 2022 | — | | | $ | — | | | 76,114 | | | $ | 762 | | | $ | 244,065 | | | 26,903 | | | $ | (162,099) | | | $ | 25,530 | | | $ | (53) | | | $ | 108,205 | |
Net income | | | | | | | | | | | | | | | 1,450 | | | | | 1,450 | |
Other comprehensive income (loss) - translation adjustments | | | | | | | | | | | | | | | | | (58) | | | (58) | |
Stock-based compensation | | | | | | | | | 2,456 | | | | | | | | | | | 2,456 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Restricted stock forfeited or withheld to satisfy tax obligations | | | | | (26) | | | (1) | | | — | | | 59 | | | (348) | | | | | | | (349) | |
Performance-Based Restricted Stock Units forfeited or withheld to satisfy tax obligations | | | | | — | | | — | | | — | | | 5 | | | (22) | | | | | | | (22) | |
Purchase of treasury stock under stock repurchase plan | | | | | | | | | | | 625 | | | (3,701) | | | | | | | (3,701) | |
Issuance of common stock upon ESPP purchase | | | | | 29 | | | — | | | 124 | | | | | | | | | | | 124 | |
Balance at June 30, 2022 | — | | | $ | — | | | 76,117 | | | $ | 761 | | | $ | 246,645 | | | 27,592 | | | $ | (166,170) | | | $ | 26,980 | | | $ | (111) | | | $ | 108,105 | |
DHI GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(unaudited)
(in thousands)
| | | Convertible Preferred Stock | | Common Stock | | Additional Paid-in Capital | | Treasury Stock | Accumulated Earnings | | Accumulated Other Comprehensive Loss | | Total | | Convertible Preferred Stock | | Common Stock | | Additional Paid-in Capital | | Treasury Stock | Accumulated Earnings | | Accumulated Other Comprehensive Income (Loss) | | Total |
Shares Issued | | Amount | | Shares Issued | | Amount | | Shares | | Amount | | Shares Issued | | Amount | | Shares Issued | | Amount | | Shares | | Amount | |
Balance at December 31, 2019 | — | | | $ | — | | | 69,509 | | | $ | 696 | | | $ | 227,227 | | | 15,591 | | | $ | (121,466) | | | $ | 83,986 | | | $ | (29,248) | | | $ | 161,195 | | |
Net loss | | | | | | | | | | | | | (6,550) | | | | | (6,550) | | |
Other comprehensive loss | | (3,865) | | | (3,865) | | |
Stock based compensation | | 1,796 | | | 1,796 | | |
Balance at December 31, 2020 | | Balance at December 31, 2020 | — | | | $ | — | | | 71,233 | | | $ | 714 | | | $ | 233,554 | | | 20,013 | | | $ | (132,150) | | | $ | 53,971 | | | $ | (28,519) | | | $ | 127,570 | |
Net income | | Net income | | | | | | | | | | | | | 2,671 | | | | | 2,671 | |
Other comprehensive income - translation adjustments | | Other comprehensive income - translation adjustments | | 297 | | | 297 | |
Stock-based compensation | | Stock-based compensation | | 1,758 | | | 1,758 | |
Restricted stock issued | Restricted stock issued | | 1,468 | | | 15 | | | 15 | | Restricted stock issued | | 1,468 | | | 15 | | | 15 | |
Performance-Based Restricted Stock Units eligible to vest | | Performance-Based Restricted Stock Units eligible to vest | | 813 | | 8 | | 8 | |
Restricted stock forfeited or withheld to satisfy tax obligations | Restricted stock forfeited or withheld to satisfy tax obligations | | (163) | | | (1) | | | 381 | | | (1,048) | | | (1,049) | | Restricted stock forfeited or withheld to satisfy tax obligations | | (204) | | | (2) | | | 369 | | | (984) | | | (986) | |
Performance-Based Restricted Stock Units forfeited or withheld to satisfy tax obligations | Performance-Based Restricted Stock Units forfeited or withheld to satisfy tax obligations | | (5) | | | — | | | 100 | | (300) | | | (300) | | Performance-Based Restricted Stock Units forfeited or withheld to satisfy tax obligations | | (39) | | | — | | | 139 | | (357) | | | (357) | |
Purchase of treasury stock under stock repurchase plan | Purchase of treasury stock under stock repurchase plan | | 660 | | | (1,643) | | | (1,643) | | Purchase of treasury stock under stock repurchase plan | | 590 | | | (1,546) | | | (1,546) | |
Balance at March 31, 2020 | — | | | $ | — | | | 70,809 | | | $ | 710 | | | $ | 229,023 | | | 16,732 | | | $ | (124,457) | | | $ | 77,436 | | | $ | (33,113) | | | $ | 149,599 | | |
Net income | | | | | | | | | | | | | $ | 1,862 | | | | | 1,862 | | |
Other comprehensive loss | | (205) | | | (205) | | |
Stock based compensation | | 1,615 | | | 1,615 | | |
Balance at March 31, 2021 | | Balance at March 31, 2021 | — | | | $ | — | | | 73,271 | | | $ | 735 | | | $ | 235,312 | | | 21,111 | | | $ | (135,037) | | | $ | 56,642 | | | $ | (28,222) | | | $ | 129,430 | |
Net loss | | Net loss | | | | | | | | | | | | | (30,211) | | | | | (30,211) | |
Other comprehensive income - translation adjustments | | Other comprehensive income - translation adjustments | | 159 | | | 159 | |
Cumulative translation adjustments reclassified to the Statements of Operations | | Cumulative translation adjustments reclassified to the Statements of Operations | | 28,063 | | | 28,063 | |
Stock-based compensation | | Stock-based compensation | | 2,302 | | | 2,302 | |
Restricted stock issued | Restricted stock issued | | 393 | | | 4 | | | 4 | | Restricted stock issued | | 292 | | | 2 | | | 2 | |
| Restricted stock forfeited or withheld to satisfy tax obligations | Restricted stock forfeited or withheld to satisfy tax obligations | | (118) | | | (2) | | | 65 | | | (162) | | | (164) | | Restricted stock forfeited or withheld to satisfy tax obligations | | (328) | | | (4) | | | 135 | | | (430) | | | (434) | |
Performance-Based Restricted Stock Units forfeited or withheld to satisfy tax obligations | Performance-Based Restricted Stock Units forfeited or withheld to satisfy tax obligations | | (5) | | | — | | | 5 | | | (13) | | | (13) | | Performance-Based Restricted Stock Units forfeited or withheld to satisfy tax obligations | | — | | | — | | | 17 | | (57) | | | (57) | |
Purchase of treasury stock under stock repurchase plan | Purchase of treasury stock under stock repurchase plan | | 1,342 | | | (3,433) | | | (3,433) | | Purchase of treasury stock under stock repurchase plan | | 532 | | | (1,756) | | | (1,756) | |
Balance at June 30, 2020 | — | | | $ | — | | | 71,079 | | | $ | 712 | | | $ | 230,638 | | | 18,144 | | | $ | (128,065) | | | $ | 79,298 | | | $ | (33,318) | | | $ | 149,265 | | |
Net loss | | | | | | | | | | | | | $ | (27,322) | | | | | (27,322) | | |
Other comprehensive income | | 2,719 | | | 2,719 | | |
Stock based compensation | | 1,525 | | | 1,525 | | |
Restricted stock issued | | 282 | | | 2 | | | 2 | | |
Restricted stock forfeited or withheld to satisfy tax obligations | | (74) | | | — | | | 95 | | | (218) | | | (218) | | |
Performance-Based Restricted Stock Units forfeited or withheld to satisfy tax obligations | | (5) | | | — | | | — | | | — | | | — | | |
Purchase of treasury stock under stock repurchase plan | | 349 | | | (854) | | | (854) | | |
Balance at September 30, 2020 | — | | | $ | — | | | 71,282 | | | $ | 714 | | | $ | 232,163 | | | 18,588 | | | $ | (129,137) | | | $ | 51,976 | | | $ | (30,599) | | | $ | 125,117 | | |
Balance at June 30, 2021 | | Balance at June 30, 2021 | — | | | $ | — | | | 73,235 | | | $ | 733 | | | $ | 237,614 | | | 21,795 | | | $ | (137,280) | | | $ | 26,431 | | | $ | — | | | $ | 127,498 | |
See accompanying notes to the condensed consolidated financial statements.
DHI GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands) | | | Nine Months Ended September 30, | | Six Months Ended June 30, |
| | 2021 | | 2020 | | 2022 | | 2021 |
Cash flows from (used in) operating activities: | Cash flows from (used in) operating activities: | | | | Cash flows from (used in) operating activities: | | | |
Net loss | $ | (29,974) | | | $ | (32,010) | | |
Adjustments to reconcile net loss to net cash flows from (used in) operating activities: | | |
Net income (loss) | | Net income (loss) | $ | 2,751 | | | $ | (27,540) | |
Adjustments to reconcile net income to net cash flows from (used in) operating activities: | | Adjustments to reconcile net income to net cash flows from (used in) operating activities: | |
Depreciation | Depreciation | 12,804 | | | 9,079 | | Depreciation | 8,186 | | | 8,445 | |
Deferred income taxes | Deferred income taxes | (710) | | | (2,220) | | Deferred income taxes | (3,092) | | | (951) | |
Amortization of deferred financing costs | Amortization of deferred financing costs | 110 | | | 110 | | Amortization of deferred financing costs | 73 | | | 74 | |
Stock based compensation | 6,214 | | | 4,936 | | |
Impairment of intangible assets | — | | | 15,200 | | |
Impairment of goodwill | — | | | 23,626 | | |
Impairment of right-of-use asset | 1,919 | | | — | | |
Impairment of investment | — | | | 2,002 | | |
Stock-based compensation | | Stock-based compensation | 4,691 | | | 4,060 | |
Income from equity method investment | | Income from equity method investment | (516) | | | — | |
Gain on investments | Gain on investments | (1,198) | | | (200) | | Gain on investments | (320) | | | (1,839) | |
Change in accrual for unrecognized tax benefits | Change in accrual for unrecognized tax benefits | 54 | | | 62 | | Change in accrual for unrecognized tax benefits | 194 | | | 82 | |
Loss on disposition of discontinued operations | Loss on disposition of discontinued operations | 30,203 | | | — | | Loss on disposition of discontinued operations | — | | | 30,203 | |
Changes in operating assets and liabilities: | Changes in operating assets and liabilities: | | Changes in operating assets and liabilities: | |
Accounts receivable | Accounts receivable | 2,016 | | | 4,297 | | Accounts receivable | 43 | | | 3,556 | |
Prepaid expenses and other assets | Prepaid expenses and other assets | (1,160) | | | (251) | | Prepaid expenses and other assets | (2,189) | | | (373) | |
Capitalized contract costs | Capitalized contract costs | (888) | | | 954 | | Capitalized contract costs | (147) | | | (554) | |
Accounts payable and accrued expenses | Accounts payable and accrued expenses | (1,383) | | | (2,895) | | Accounts payable and accrued expenses | 1,113 | | | (4,507) | |
Income taxes receivable/payable | Income taxes receivable/payable | 442 | | | (126) | | Income taxes receivable/payable | 976 | | | 1,613 | |
Deferred revenue | Deferred revenue | 7,332 | | | (9,499) | | Deferred revenue | 7,998 | | | 7,118 | |
Other, net | Other, net | (158) | | | 1,379 | | Other, net | (313) | | | (89) | |
Net cash flows from operating activities | Net cash flows from operating activities | 25,623 | | | 14,444 | | Net cash flows from operating activities | 19,448 | | | 19,298 | |
Cash flows from (used in) investing activities: | Cash flows from (used in) investing activities: | | | | Cash flows from (used in) investing activities: | | | |
Cash transferred with discontinued operations | Cash transferred with discontinued operations | (2,951) | | | — | | Cash transferred with discontinued operations | — | | | (2,951) | |
Cash paid for investment | (3,000) | | | — | | |
Cash received from sale of investments | 1,198 | | | 200 | | |
Cash received from sale of investment | | Cash received from sale of investment | 320 | | | — | |
Purchases of fixed assets | Purchases of fixed assets | (10,707) | | | (12,536) | | Purchases of fixed assets | (8,530) | | | (6,822) | |
Net cash flows used in investing activities | Net cash flows used in investing activities | (15,460) | | | (12,336) | | Net cash flows used in investing activities | (8,210) | | | (9,773) | |
Cash flows from (used in) financing activities: | Cash flows from (used in) financing activities: | | | | Cash flows from (used in) financing activities: | | | |
Payments on long-term debt | Payments on long-term debt | (9,000) | | | (9,444) | | Payments on long-term debt | (8,000) | | | (9,000) | |
Proceeds from long-term debt | Proceeds from long-term debt | 7,000 | | | 36,444 | | Proceeds from long-term debt | 15,000 | | | 5,000 | |
Financing costs paid | | Financing costs paid | (515) | | | — | |
Payments under stock repurchase plan | Payments under stock repurchase plan | (10,199) | | | (5,930) | | Payments under stock repurchase plan | (11,200) | | | (3,444) | |
Purchase of treasury stock related to vested restricted and performance stock units | Purchase of treasury stock related to vested restricted and performance stock units | (2,128) | | | (1,742) | | Purchase of treasury stock related to vested restricted and performance stock units | (4,572) | | | (1,826) | |
Net cash flows from (used in) financing activities | (14,327) | | | 19,328 | | |
Proceeds from issuance of common stock through ESPP | | Proceeds from issuance of common stock through ESPP | 124 | | | — | |
Net cash flows used in financing activities | | Net cash flows used in financing activities | (9,163) | | | (9,270) | |
Effect of exchange rate changes | Effect of exchange rate changes | 10 | | | (12) | | Effect of exchange rate changes | — | | | 10 | |
Net change in cash and cash equivalents for the period | Net change in cash and cash equivalents for the period | (4,154) | | | 21,424 | | Net change in cash and cash equivalents for the period | 2,075 | | | 265 | |
Cash and cash equivalents, beginning of period | Cash and cash equivalents, beginning of period | 7,640 | | | 5,381 | | Cash and cash equivalents, beginning of period | 1,540 | | | 7,640 | |
Cash and cash equivalents, end of period | Cash and cash equivalents, end of period | $ | 3,486 | | | $ | 26,805 | | Cash and cash equivalents, end of period | $ | 3,615 | | | $ | 7,905 | |
|
See accompanying notes to the condensed consolidated financial statements.
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements of DHI Group, Inc. (“DHI” or the “Company”) have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Certain information and disclosures normally included in annual audited consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) have been omitted and condensed pursuant to such rules and regulations. In the opinion of the Company’s management, all adjustments (consisting of only normal and recurring accruals) have been made to present fairly the financial position, results of operations and cash flows of the Company for the periods presented. Although the Company believes that the disclosures are adequate to make the information presented not misleading, these financial statements should be read in conjunction with the Company’s audited consolidated financial statements as of and for the year ended December 31, 20202021 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 20202021 (the “Annual Report on Form 10-K”). Operating results for the nine monthsix-month period ended SeptemberJune 30, 20212022 are not necessarily indicative of the results to be achieved for the full year.
Preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the period. Management believes the most complex and sensitive judgments, because of their significance to the condensed consolidated financial statements, result primarily from the need to make estimates about the effects of matters that are inherently uncertain. Actual results could differ materially from management’s estimates reported in the condensed consolidated financial statements and footnotes thereto. There have been no significant changes in the Company’s assumptions regarding critical accounting estimates during the nine monthsix-month period ended SeptemberJune 30, 2021.2022.
On June 30, 2021, the Company transferred majority ownership and control of its eFinancialCareers ("eFC") business to eFC's management, while retaining a 40% common share interest. The eFC business was significant to the Company and the transfer was considered to be a strategic shift from the financial services industry and from the geographies eFC serves that had a major effect on the Company's operations. As a result, the eFC business was deconsolidated from the Company's condensed consolidated financialbalance sheets and statements of operations as of June 30, 2021 and is reflected as a discontinued operation in the Condensed Consolidated Balance Sheets and the Condensed Consolidated Statements of Operations for all periods presented.presented on or before June 30, 2021. The historical Condensed Consolidated Statementscondensed consolidated statements of Comprehensive Income (Loss)comprehensive income (loss), Stockholders’ Equitystockholders’ equity and Cash Flowscash flows have not been revised to reflect the effects of the transfer of control of eFC. For further information on discontinued operations, see Note 4, “Discontinued Operations.” Unless noted otherwise, discussion in the notes to the condensed consolidated financial statements pertain to continuing operations.
The Company allocates resources and assesses financial performance on a consolidated basis, as all services pertain to the Company's Tech-focused strategy. As a result, the Company has a single reportable segment, Tech-focused, which now includes only the Dice and ClearanceJobs brands, as well as corporate related costs. All operations are in the United States and the Company no longer has revenues and long-lived assets, which includes fixed assets and lease right of use assets, outside of the United States.
2. NEW ACCOUNTING STANDARDS
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 changes how entities will account for credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance replaces the current "incurred loss" model with an "expected loss" model that requires consideration of a broader range of information to estimate expected credit losses over the lifetime of a financial asset. ASU 2016-13 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2022 for Smaller Reporting Companies. The Company is evaluating the expected impact of this standard on its consolidated financial statements.
In December 2019, the FASB issued ASU No. 2019-12, Simplifyingthe Accounting for Income Taxes, which eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating taxes during interim quarters and the recognition of deferred tax liabilities for outside basis differences. This guidance also simplifies aspects of accounting for franchise taxes, specifies the timing for recognizing certain income tax effects of changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Company adopted this standard on January 1, 2021, and the adoption did not have a material effect on the Company's consolidated financial statements.
3. FAIR VALUE MEASUREMENTS
The FASB ASC topic on Fair Value Measurements and Disclosures defines fair value, establishes a framework for measuring fair value and requires certain disclosures for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. As a basis for considering assumptions, a three-tier fair value hierarchy is used, which prioritizes the inputs used in measuring fair value as follows:
•Level 1 – Quoted prices for identical instruments in active markets.
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
•Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations, in which all significant inputs are observable in active markets.
•Level 3 – Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
The carrying amounts reported in the Condensed Consolidated Balance Sheetscondensed consolidated balance sheets for cash and cash equivalents, accounts receivable, other assets, accounts payable and accrued expenses and long-term debt approximate their fair values. Investments, current, are carried at fair value using values available on a public exchange based on a Level 1 input. Investments, non-current that are carried at fair value use a discounted cash flow technique based on the probability of one or more possible outcomes, based on Level 3 inputs, which inputs and fair value did not change during the three and ninesix month periodsperiod ended SeptemberJune 30, 2021.2022. The fair value of the long-term debt was estimated using present value techniques and market based interest rates and credit spreads. The estimated fair value of long-term debt is based on Level 2 inputs.
Certain assets and liabilities are measured at fair value on a non-recurring basis. These assets include equity investments, operating right-of-use assets and goodwill and intangible assets which resulted from prior acquisitions. Items valued using such internally generated valuation techniques are classified according to the lowest level input or value driver that is significant to the valuation. Thus, an item may be classified in Level 3 even though there may be some significant inputs that are readily observable. Such instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances, for example, when there is evidence of impairment.
On June 30, 2021, the Company transferred majority ownership and control of its eFC business to eFC's management, while retaining a 40% common share interest. The Company valued its 40% interest in eFC utilizing a combination of a discounted cash flow and a market approach. The discounted cash flow included declining revenues for the years ending December 31, 2021 and 2022 as compared to the year ended December 31, 2020 and then increasing moderately. The discounted cash flow also included operating margin declines for the year ending December 31, 2022 compared to the year ending December 31, 2021 and then increasing moderately. The Company utilized a discount rate of 19.0%19%. The market approach included the analysis of data from transactions on guideline companies and applied multiples of those transactions to eFC's results.
4. DISCONTINUED OPERATIONS
As further described in Note 1, on June 30, 2021, the Company transferred majority ownership and control of its eFC business to eFC's management, while retaining a 40% common share interest. As a result, we have reflected eFC's financial results as discontinued operations in the Condensed Consolidated Balance Sheetscondensed consolidated balance sheets and the Condensed Consolidated Statementscondensed consolidated statements of Operationsoperations for all periods presented.presented on or before June 30, 2021.
The results of discontinued operations on the condensed consolidated statements of operations were as follows (in thousands):
| | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2021 | | 2021 |
Revenues | $ | 6,173 | | | $ | 12,130 | |
Operating expenses | (5,546) | | | (10,821) | |
Operating income | 627 | | | 1,309 | |
Loss on disposition of discontinued operations1 | (30,203) | | | (30,203) | |
Other income (expense) | (1) | | | 1 | |
Loss before income taxes | (29,577) | | | (28,893) | |
Income tax expense | 422 | | | 447 | |
Net loss | $ | (29,999) | | | $ | (29,340) | |
| | | |
(1) The loss was comprised of $28.1 million related to the reclassification of currency translation adjustments and $5.2 million from the removal of eFC's net assets. The loss was partially offset by the recording of an equity investment of $3.6 million and eFC's earnings during the three and six month period ended June 30, 2021. |
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The assets and liabilities classified as discontinued operations on the Condensed Consolidated Balance Sheets were as follows (in thousands):
| | | | | |
| December 31, 2020 |
Cash and cash equivalents | $ | 3,098 | |
Accounts receivable, net | 4,164 | |
Income taxes receivable | 511 | |
Prepaid and other current assets | 402 | |
Current assets of discontinued operations | 8,175 | |
| |
Fixed assets, net | 1,511 | |
Capitalized contract costs | 1,545 | |
Goodwill | 5,253 | |
Deferred income taxes | 19 | |
Operating lease right-of-use assets | 5,601 | |
Other assets | 269 | |
Non-current assets of discontinued operations | 14,198 | |
Total assets of discontinued operations | $ | 22,373 | |
| |
Accounts payable and accrued expenses | $ | 4,118 | |
Operating lease liabilities | 1,335 | |
Deferred revenue | 6,879 | |
Income taxes payable | 123 | |
Current liabilities of discontinued operations | 12,455 | |
| |
Deferred income taxes | 171 | |
Deferred revenue | 33 | |
Accrual for unrecognized tax benefits | 406 | |
Operating lease liabilities | 4,333 | |
Other long-term liabilities | 345 | |
Non-current liabilities of discontinued operations | 5,288 | |
Total liabilities of discontinued operations | $ | 17,743 | |
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The results of discontinued operations on the Condensed Consolidated Statements of Operations were as follows (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| 2021 | | 2020 | | 2021 | | 2020 |
Revenues | $ | — | | | $ | 6,101 | | | $ | 12,130 | | | $ | 19,537 | |
Operating expenses | — | | | (6,201) | | | (10,821) | | | (17,519) | |
Operating income (loss) | — | | | (100) | | | 1,309 | | | 2,018 | |
Loss on disposition of discontinued operations(1) | — | | | — | | | (30,203) | | | — | |
Other income (expense) | — | | | (1) | | | 1 | | | 4 | |
Income (loss) before income taxes | — | | | (101) | | | (28,893) | | | 2,022 | |
Income tax expense | — | | | 228 | | | 447 | | | 666 | |
Net income (loss) | $ | — | | | $ | (329) | | | $ | (29,340) | | | $ | 1,356 | |
| | | | | | | |
(1) The loss was comprised of $28.1 million related to the reclassification of currency translation adjustments and $5.2 million from the removal of eFC's net assets. The loss was partially offset by the recording of an equity investment of $3.6 million and eFC's earnings during the six month period ended June 30, 2021. |
Depreciation, fixed asset purchases and other significant non-cash items related to discontinued operations were as follows (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| 2021 | | 2020 | | 2021 | | 2020 |
Depreciation | $ | — | | | $ | 417 | | | $ | 774 | | | $ | 1,349 | |
Purchases of fixed assets | $ | — | | | $ | 12 | | | $ | 447 | | | $ | 156 | |
| | | | | | | |
Cash paid for amounts included in measurement of lease liabilities: | | | | | | |
Operating cash flows from operating leases | $ | — | | | $ | 373 | | | $ | 804 | | | $ | 1,128 | |
| | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2021 | | 2021 |
Depreciation | $ | 309 | | | $ | 774 | |
Purchases of fixed assets | $ | 323 | | | $ | 447 | |
| | | |
Cash paid for amounts included in measurement of lease liabilities: | | |
Operating cash flows from operating leases | $ | 413 | | | $ | 804 | |
5. REVENUE RECOGNITION
The Company recognizes revenue when control of the promised goods or services is transferred to our customers at an amount that reflects the consideration to which we expect to receive in exchange for those goods or services. Revenue is recognized net of customer discounts ratably over the service period. Customer billings delivered in advance of services being rendered are recorded as deferred revenue and recognized over the service period. The Company generates revenue from recruitment packages, advertising, classifieds, and virtual and live career fair and recruitment event booth rentals.
Disaggregation of revenue
Our brands primarily serve the technology and security cleared professions. The following table provides information about disaggregated revenue by brand and includes a reconciliation of the disaggregated revenue (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| 2021 | | 2020 | | 2021 | | 2020 |
Dice | $ | 22,272 | | | $ | 19,823 | | | $ | 61,906 | | | $ | 62,797 | |
ClearanceJobs | 8,486 | | | 7,326 | | | 24,249 | | | 21,333 | |
Total | $ | 30,758 | | | $ | 27,149 | | | $ | 86,155 | | | $ | 84,130 | |
| | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2022 | | 2021 | | 2022 | | 2021 |
Dice(1) | $ | 26,823 | | | $ | 20,583 | | | $ | 51,457 | | | $ | 39,634 | |
ClearanceJobs | 10,234 | | | 8,138 | | | 19,934 | | | 15,763 | |
Total | $ | 37,057 | | | $ | 28,721 | | | $ | 71,391 | | | $ | 55,397 | |
| | | | | | | |
(1) Includes Dice and Career Events | | | | | | | |
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Contract Balances
The following table provides information about opening and closing balances of receivables and contract liabilities from contracts with customers as required under Topic 606 (in thousands):
| | | | | | | | | | | | | | | | | |
| | As of September 30, 2021 | | As of December 31, 2020 | |
| | | | | |
Receivables | | $ | 15,267 | | | $ | 16,134 | | |
Short-term contract liabilities (deferred revenue) | | 42,486 | | | 35,547 | | |
Long-term contract liabilities (deferred revenue) | | 917 | | | 1,035 | | |
| | | | | | | | | | | | | | | | | |
| | As of June 30, 2022 | | As of December 31, 2021 | |
| | | | | |
Receivables | | $ | 18,342 | | | $ | 18,385 | | |
Short-term contract liabilities (deferred revenue) | | 53,371 | | | 45,217 | | |
Long-term contract liabilities (deferred revenue) | | 773 | | | 929 | | |
We receive payments from customers based upon contractual billing schedules; accounts receivable are recorded when customers are invoiced per the contractual billings schedules. As the Company's standard payment terms are less than one year, the Company elected the practical expedient, where applicable. As a result, the Company does not consider the effects of a significant financing component. Contract liabilities include customer billings delivered in advance of performance under the contract, and associated revenue is realized when services are rendered under the contract.
Receivables increase due to customer billings and decrease by cash collected from customers. Contract liabilities increase due to customer billings and are decreased as performance obligations are satisfied under the contracts.
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The Company recognized the following revenues as a result of changes in the contract liability balances in the respective periods (in thousands):
| | | Three Months Ended | | Nine Months Ended | | Three Months Ended | | Six Months Ended |
| | September 30, 2021 | | September 30, 2020 | | September 30, 2021 | | September 30, 2020 | | June 30, 2022 | | June 30, 2021 | | June 30, 2022 | | June 30, 2021 |
Revenue recognized in the period from: | Revenue recognized in the period from: | | | | | | | | Revenue recognized in the period from: | | | | | | | |
Amounts included in the contract liability at the beginning of the period | Amounts included in the contract liability at the beginning of the period | $ | 20,666 | | | $ | 19,821 | | | 32,572 | | | $ | 38,676 | | Amounts included in the contract liability at the beginning of the period | $ | 25,928 | | | $ | 20,065 | | | $ | 33,289 | | | $ | 26,499 | |
The following table includes estimated deferred revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| Remainder of 2021 | | 2022 | | 2023 | | 2024 | | Total |
Tech-focused | $ | 22,603 | | | $ | 20,325 | | | $ | 427 | | | $ | 48 | | | $ | 43,403 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| Remainder of 2022 | | 2023 | | 2024 | | 2025 | | Total |
Tech-focused | $ | 42,793 | | | $ | 11,015 | | | $ | 319 | | | $ | 17 | | | $ | 54,144 | |
6. LEASES
The Company has operating leases for corporate office space and certain equipment. The leases have original terms from one year to eight years, some of which include options to renew the lease, and are included in the lease term when it is reasonably certain that the Company will exercise the option. No leases include options to purchase the leased property. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. We do not have any lease agreements with related parties.
Operating lease right-of-use "ROU" assets and liabilities are recognized at the commencement date of the lease based on the present valueThe components of lease payments over thecost were as follows (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | For the Three Months Ended June 30, | | For the Six Months Ended June 30, |
| | 2022 | | 2021 | | 2022 | | 2021 |
Operating lease cost(1) | $ | 535 | | | $ | 558 | | | $ | 1,081 | | | $ | 1,122 | |
Sublease income | (127) | | | (180) | | | (250) | | | (360) | |
Total lease cost | | $ | 408 | | | $ | 378 | | | $ | 831 | | | $ | 762 | |
| | | | | | |
(1) Includes short-term lease costs and variable lease costs, which are immaterial. | | | | |
Supplemental cash flow information related to leases was as follows (in thousands):
| | | | | | | | | | | | | | |
| | For the Six Months Ended June 30, |
| | 2022 | | 2021 |
Cash paid for amounts included in measurement of lease liabilities: | | | |
| Operating cash flows from operating leases | $ | 703 | | | $ | 1,221 | |
| | | | |
| | | |
| | | | |
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Supplemental balance sheet information related to leases was as follows (in thousands, except lease term. When readily available, the Company uses the implicit rate in determining the present value of the lease payments. When leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on information available at the commencement of the lease, including the lease term. Because the implicit rate in each lease is not available, the Company used its incremental borrowing rate to determine the present value of lease payments. Leases with an initial term of 12 months or less are not recorded on the balance sheet. All operating lease expense is recognized on a straight-line basis over the lease term.and discount):
| | | | | | | | | | | | | | |
| | June 30, 2022 | | December 31, 2021 |
Operating lease right-of-use-assets | $ | 5,981 | | | $ | 6,888 | |
| | | |
Operating lease liabilities - current | 2,417 | | | 2,388 | |
Operating lease liabilities - non-current | 5,774 | | | 6,982 | |
| Total operating lease liabilities | $ | 8,191 | | | $ | 9,370 | |
| | | | |
Weighted Average Remaining Lease Term (in years) | | | |
| Operating leases | 3.2 | | 3.6 |
| | | | |
Weighted Average Discount Rate | | | |
| Operating leases | 3.79 | % | | 3.80 | % |
The Company reviews its ROUright-of-use ("ROU") assets for impairment if indicators of impairment exist. The impairment review process compares the fair value of the ROU asset to its carrying value. If the carrying value exceeds the fair value, an impairment loss is recorded. During the three months ended September 30, 2021, due to the continuing impacts of COVID-19 on the real estate
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
markets and its impact on the future cash flows attributable to its ROU assets, the Company recorded an impairment charge of $1.9 million. No impairment was recorded during the ninethree and six month periodperiods ended SeptemberJune 30, 2020.2022 and 2021.
The components of lease cost were as follows (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | For the Three Months Ended September 30, | | For the Nine Months Ended September 30, |
| | 2021 | | 2020 | | 2021 | | 2020 |
Operating lease cost(1) | $ | 507 | | | $ | 557 | | | $ | 1,629 | | | $ | 1,991 | |
Sublease income | (183) | | | (178) | | | (543) | | | (838) | |
Total lease cost | | $ | 324 | | | $ | 379 | | | $ | 1,086 | | | $ | 1,153 | |
| | | | | | |
(1) Includes short-term lease costs and variable lease costs, which are immaterial. |
Supplemental cash flow information related to leases was as follows (in thousands):
| | | | | | | | | | | | | | |
| | For the Nine Months Ended September 30, |
| | 2021 | | 2020 |
Cash paid for amounts included in measurement of lease liabilities: | | | |
| Operating cash flows from operating leases | $ | 1,831 | | | $ | 2,192 | |
| | | | |
Right-of-use assets obtained in exchange for lease obligations: | | | |
| Operating leases | $ | — | | | $ | 292 | |
Supplemental balance sheet information related to leases was as follows (in thousands, except lease term and discount):
| | | | | | | | | | | | | | |
| | September 30, 2021 | | December 31, 2020 |
Operating lease right-of-use-assets(1) | $ | 7,333 | | | $ | 10,804 | |
| | | |
Operating lease liabilities - current | 2,102 | | | 2,075 | |
Operating lease liabilities - non-current | 7,591 | | | 9,371 | |
| Total operating lease liabilities | $ | 9,693 | | | $ | 11,446 | |
| | | | |
Weighted Average Remaining Lease Term (in years) | | | |
| Operating leases | 3.8 | | 4.7 |
| | | | |
Weighted Average Discount Rate | | | |
| Operating leases | 3.84 | % | | 3.86 | % |
(1) During the three months ended September 30, 2021, the Company recorded an impairment of $1.9 million. |
As of SeptemberJune 30, 2021,2022, future operating lease payments were as follows (in thousands): | | | | | | | | |
| Operating Leases |
October 1, 2021 through December 31, 2021 | $ | 492 | |
2022 | 2,625 | |
2023 | 2,451 | |
2024 | 1,965 | |
2025 | 1,946 | |
2026 and thereafter | 1,074 | |
| Total lease payments | $ | 10,553 | |
Less imputed interest | 860 | |
| Total | $ | 9,693 | |
13 | | | | | | | | |
| Operating Leases |
July 1, 2022 through December 31, 2022 | $ | 1,354 | |
2023 | 2,451 | |
2024 | 1,965 | |
2025 | 1,946 | |
2026 | 992 | |
2027 and thereafter | 83 | |
| Total lease payments | $ | 8,791 | |
Less imputed interest | 600 | |
| Total | $ | 8,191 | |
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As of SeptemberJune 30, 20212022 the Company has no additional operating or finance leases that have not yet commenced.
7. INVESTMENTS
Investments, Current, at Fair Value
Through its predecessor companies, the Company owned a minority interest representing less than 1% of the common stock of a technology company that completed an initial public offering ("IPO") and became publicly traded during the first quarter of 2021. Prior to the IPO, the Company had elected the measurement alternative in accordance with FASB ASC 321, Investments – Equity Securities. As of December 31, 2020, it was not practicable to estimate the fair value of its interest because there were no observable transactions for the investment. Accordingly, the investment was carried at its original cost, less impairments, which resulted in a carrying value of zero as of December 31, 2020. The investment was accounted for as an equity security, with realized and unrealized gains and losses included in earnings. During the threefirst quarter of 2021, the Company recognized a $2.5 million unrealized gain on the investment. During the second and third quarters of 2021, the Company recognized unrealized losses of $0.7 million and $0.6 million, respectively, related to the investment. The investment was sold during the third quarter of 2021, and the Company recognized a realized gain of $1.2 million for the nine months ended September 30, 2021, the investment was sold for $1.2 million.2021. Accordingly, the recorded value as of September 30,December 31, 2021 was zero. An unrealized loss of $0.6 million and a realized gain of $1.2 million has been recorded for the three and nine month periods ended September 30, 2021, respectively.
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Investments, Non-current, at Fair Value
During the three months ended September 30,third quarter of 2021, the Company invested $3.0 million through a subordinated convertible promissory note (the "Note") of $3.0 million with a values-based career destination company that allows the next generation workforce to search for jobs at companies whose people, perks and values align with their unique professional needs. The Note earns interest at 6.00% and matures at the earlier of a Qualified Financing, as described in the Note, or settled in cash on or after August 20, 2022, at the option of the Company. Upon a Qualified Financing, the Company will convert its investment into shares of preferred stock at 80% of the per share value in the Qualified Financing. The investment is recorded as a trading security at fair value with realized and unrealized gains and losses included in earnings. The Note is recorded at $3.0 million as of SeptemberJune 30, 2022 and December 31, 2021 and there was no gain or loss included in earnings during the three monthsand six month periods ended SeptemberJune 30, 2021.2022.
Investments, Non-current
Rigzone is a website dedicated to delivering online content, data, and career services in the oil and gas industry in North America, Europe, the Middle East, and Asia Pacific. Oil and gas companies, as well as companies that serve the energy industry, use Rigzone to find talent for roles such as petroleum engineers, sales professionals with energy industry expertise and skilled tradesmen. On August 31, 2018, the Company transferred a majority ownership and control of the Rigzone business to Rigzone management, while retaining a 40% common share interest, with zero proceeds received from the transfer. TheDuring the second quarter of 2022, the Company has evaluated thesold its 40% common share interest in Rigzone to Rigzone management for $0.3 million. At the Rigzone business and has determinedtime of the sale, the recorded value of the investment meets the definition and criteria of a variable interest entity ("VIE"). The Company evaluated the VIE and determined thatwas zero. Accordingly, the Company does not haverecognized a controlling financial interest$0.3 million gain on sale, which was included in gain (loss) on investment on the VIE, as the Company does not have the power to direct the activitiescondensed consolidated statements of the VIE that most significantly impact the VIE's economic performance. The common share interest is being accounted for under the equity method of accounting as the Company has the ability to exercise significant influence over Rigzone. As accumulated earnings of the VIE have been approximately zero since the date of transfer, the investment is recorded at zero at September 30, 2021.operations.
As further described in Notes 1 and 4, on June 30, 2021, the Company transferred majority ownership and control of its eFC business to eFC's management, while retaining a 40% common share interest with zero proceeds received from the transfer. The Company incurred approximately $0.1 million in selling costs and recognized a $30.2 million loss on the transfer in the second quarter of 2021, which included a $28.1 million charge related to accumulated foreign currency loss that was previously a reduction to equity.
eFC is a financial services careers website, operating websites in multiple markets in four languages mainly across the United Kingdom, Continental Europe, Asia, the Middle East and North America. Professionals from across many sectors of the financial services industry, including asset management, risk management, investment banking, and information technology, use eFC to advance their careers. The Company has evaluated the 40% common share interest in the eFC business and has determined the investment meets the definition and criteria of a variable interest entity ("VIE"). The Company evaluated the VIE and determined that the Company does not have a controlling financial interest in the VIE, as the Company does not have the power to direct the activities of the VIE that most significantly impact the VIE's economic performance. The common share interest is being accounted for under the equity method of accounting as the Company has the ability to exercise significant
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
influence over eFC. The investment was recorded at its fair value on June 30, 2021, the date of transfer, which was $3.6 million. The Company's equity in net assets of eFC as of June 30, 2021 was $2.2 million. The difference between the Company's recorded value and its equity in net assets of eFC is amortized against the recorded value of the investment in accordance with ASC 323 Investments - Equity Method and Joint Ventures. The amortization was not material for the three and six months ended June 30, 2022. The recorded value is further adjusted based on the Company's proportionate share of eFC's net income and is recorded three months in arrears. For the three and six month periods ended June 30, 2022, the Company recorded $0.4 million and $0.5 million, respectively, of income related to its proportionate share of eFC's net income, net of currency translation adjustments and amortization of the basis difference.
At January 1, 2018, the Company held preferred stock representing a 10.0% interest in the fully diluted shares of a tech skills assessment company. During 2018, the skills assessment company completed an additional equity offering, lowering DHI's total interest to 7.6%. The Company did not adjust the recorded value of the investment because the shares issued under the new share offering were not similar to the Company's share rights. As of December 31, 2019 it was not practicable to estimate the fair value of the preferred stock as the shares are not traded. The investment was carried at its original cost of $2.0 million and was included in the other assets section of the Condensed Consolidated Balance Sheets.condensed consolidated balance sheets. During the three months ended March 31, 2020, based on the investment's historical cash burn rate, uncertainty of its ability to meet revenue and cash flow projections, current liquidity position, lack of access to additional capital, and impacts from the COVID-19 pandemic, the Company determined the value to be zero. Accordingly, the Company recorded an impairment charge of $2.0 million during the first quarter of 2020. As of September 30, 2021, there have been no additional shares issued that were similar to the Company's share rights and theThe investment is recorded at zero as of SeptemberJune 30, 2022 and December 31, 2021.
On January 31, 2018, the Company transferred a majority ownership of the BioSpace business to BioSpace management with zero proceeds received from the transfer, while retaining a 20% preferred share interest in the BioSpace business. During the second quarter of 2020, the Company sold its 20% interest in BioSpace to BioSpace management for $0.2 million. At the time of sale, the recorded value of the investment was zero. Accordingly, the Company recognized a $0.2 million gain on sale, which was included in interest expense and other on the Condensed Consolidated Statements of Operations.
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
8. ACQUIRED INTANGIBLE ASSETS, NET
Considering the recognition of the Dice brand, its long history, awareness in the talent acquisition and staffing services market, and the intended use, the remaining useful life of the Dice.com trademarks and brand name was determined to be indefinite. We determine whether the carrying value of recorded indefinite-lived acquired intangible assets is impaired on an annual basis or more frequently if indicators of potential impairment exist. The impairment review process compares the fair value of the indefinite-lived acquired intangible assets to its carrying value. If the carrying value exceeds the fair value, an impairment loss is recorded.
As of SeptemberJune 30, 20212022 and December 31, 2020,2021, the Company had an indefinite-lived acquired intangible asset of $23.8 million related to the Dice trademarks and brand name. During the first and third quarters of 2020, because of the impacts of the COVID-19 pandemic and its potential impact on future earnings and cash flows that are attributable to the Dice trademarks and brand name, the Company recorded impairment charges of $7.2 million and $8.0 million, respectively. No impairment was recorded during the ninethree and six month periodperiods ended SeptemberJune 30, 2022 and 2021.
The projections utilized in the September 30, 2020October 1, 2021 analysis included a decline in revenues for the year ending December 31, 2021 compared to the year ended December 31, 2020, and then increasing revenues toat rates approximating industry growth projections. The Company’s ability to achieve these revenue projections may be impacted by, among other things, uncertainty related to COVID-19, competition in the technology recruiting market, challenges in developing and introducing new products and product enhancements to the market and the Company’s ability to attribute value delivered to customers. The September 30, 2020October 1, 2021 analysis included a small reduction in operating marginmargins during the year ending December 31, 2021 that approximate operating margins for the year ended December 31, 2020 and then increasing modestly. If future cash flows that are attributable to the Dice trademarks and brand name are not achieved, the Company could realize an impairment in a future period. The Company's operating results attributable to the Dice trademarks and brand name through SeptemberJune 30, 20212022 and projections of future results have met or exceeded those included in the projections utilized in the September 30, 2020October 1, 2021 analysis. In the September 30, 2020October 1, 2021 analysis, the Company utilized a relief from royalty rate method to value the Dice trademarks and brand name using a royalty rate of 4.0% based on comparable industry studies and a discount rate of 15.5%12.5%.
The determination of whether or not indefinite-lived acquired intangible assets have become impaired involves a significant level of judgment in the assumptions underlying the approach used to determine the value of the indefinite-lived acquired intangible assets. Fair values are determined using a profit allocation methodology which estimates the value of the trademarks and brand name by capitalizing the profits saved because the company owns the asset. We consider factors such as historical performance, anticipated market conditions, operating expense trends and capital expenditure requirements. Changes in our strategy, uncertainty related to COVID-19, and/or changes in market conditions could significantly impact these judgments and
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
require adjustments to recorded amounts of intangible assets. If projections are not achieved, the Company could realize an impairment in the foreseeable future.
9. GOODWILL
Goodwill for the Tech-focused reporting unit as of SeptemberJune 30, 20212022 and December 31, 2020, which was allocated to the Tech-focused reporting unit,2021 was $128.1 million. There were no changes to goodwill from December 31, 20202021 to SeptemberJune 30, 2021.2022.
The annual impairment test for the Tech-focused reporting unit is performed on October 1 of each year. During the three months ended September 30, 2020, becauseThe results of the impacts of the COVID-19 pandemic and its potential impact on future earnings and cash flows for the reporting unit, the Company recorded an impairment charge of $23.6 million. On June 30, 2021, the Company transferred a majority interest of its eFC business, which was part of the Tech-focused reporting unit, to management. As a result, the Company performed an interim impairment analysis of goodwill. The resultstest indicated that the fair value of the Tech-focused reporting unit was substantially in excess of the carrying value as of October 1, 2021.
Results for the Tech-focused reporting unit for the fourth quarter of 2021 and the first six months of 2022 and estimated future results as of June 30, 2021.2022 have exceeded the projections used in the October 1, 2021 impairment test. As a result, the Company believes it is not more likely than not that the fair value of the reporting unit is less than the carrying value as of June 30, 2022. Therefore, no quantitative impairment test was performed as of June 30, 2022. No impairment was recorded during the ninethree and six month periodperiods ended SeptemberJune 30, 2022 and 2021.
RevenueThe projections attributable to the Tech-focused reporting unit usedutilized in the June 30,October 1, 2021 analysisimpairment test included revenue growth for the year ending December 31, 2021 compared to the year ended December 31, 2020 as the business recovers from the impacts of the COVID-19 pandemic and then continues its growthincreasing revenues at rates approximating industry growth projections. The Company’s ability to achieve these revenue projections may be impacted by, among other things, any future impacts of theuncertainty related to COVID-19, pandemic, competition in the technology recruiting market, challenges in developing and introducing new products and product enhancements to the market and the Company’s ability to attribute value delivered to customers. The October 1, 2021 impairment test included operating margin formargins during the year ending December 31, 2021 as included in the June 30, 2021 analysis, approximates thethat approximate operating marginmargins for the year ended December 31, 2020 and then increasing modestly. If future cash flows that are attributable to the margin increases as revenue growth drives profitability.
Determining the fair value of aTech-focused reporting unit is judgmentalare not achieved, the Company could realize an impairment in nature and requires the use of estimates and key assumptions, particularly assumed discount rates and projections ofa future operating results.period. The discount rate applied for the Tech-focused reporting unit in the June 30,October 1, 2021 analysisimpairment test was 15.5%11.5%. An increase to the discount
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
rate applied or reductions to future projected operating results could result in a future impairment of the Tech-focused reporting unit’s goodwill. It is reasonably possible that changes in judgments, assumptions and estimates the Company made in assessing the fair value of goodwill could cause the Company to consider some portion or all of the goodwill of the Tech-focused reporting unit to become impaired. In addition, a future decline in the overall market conditions, uncertainty related to COVID-19, political instability, and/or changes in the Company’s market share could negatively impact the estimated future cash flows and discount rates used to determine the fair value of the reporting unit and could result in an impairment charge in the foreseeable future.
The determination of whether or not goodwill has become impaired is judgmental in nature and requires the use of estimates and key assumptions, particularly assumed discount rates and projections of future operating results, such as forecasted revenues and earnings before interest, taxes, depreciation and amortization margins and capital expenditure requirements. Fair values are determined either by using a discounted cash flow methodology or by using a combination of a discounted cash flow methodology and a market comparable method. The discounted cash flow methodology is based on projections of the amounts and timing of future revenues and cash flows, assumed discount rates and other assumptions as deemed appropriate. Factors such as historical performance, anticipated market conditions, operating expense trends and capital expenditure requirements are considered. Additionally, the discounted cash flows analysis takes into consideration cash expenditures for product development, other technological updates and advancements to the websites and investments to improve the candidate databases. The market comparable method indicates the fair value of a business by comparing it to publicly traded companies in similar lines of business or to comparable transactions or assets. Considerations for factors such as size, growth, profitability, risk and return on investment are analyzed and compared to the comparable businesses and adjustments are made. A market value of invested capital of the publicly traded companies is calculated and then applied to the entity’s operating results to arrive at an estimate of value. Changes in our strategy and/or market conditions could significantly impact these judgments and require adjustments to recorded amounts of goodwill.
10. INDEBTEDNESS
Credit Agreement—In November 2018,June 2022, the Company, together with Dice Inc. (a wholly-owned subsidiary of the Company) and its wholly-owned subsidiary, Dice Career Solutions, Inc. (collectively, the “Borrowers”), entered into a SecondThird Amended and Restated Credit Agreement as further amended in June 2021 (the “Credit Agreement”), which matures in November 2023,June 2027 and replacedreplaces the previously existing credit agreement dated November 2015. The June 2021 amendment modified the credit agreement to allow for the disposition of the eFC business, removed the option to borrow in Euros and Sterling, and incorporated certain form updates.Company's prior Old Credit Agreement (defined below). The Credit Agreement provides for a revolving loan facility of $90$100 million ($90 million under the Old Credit Agreement), with an expansion option upof $50 million, bringing the total facility to $140$150 million, as permitted under the terms of the Credit Agreement. At the closing of the Credit Agreement, the Company borrowed $30 million to repay, in full, all outstanding indebtedness, including accrued interest, under the Old Credit Agreement. Unamortized debt issuance costs from the previous credit agreement of $0.2 million and debt issuance costs of $0.5 million related to the new agreement were recorded as other assets on the condensed consolidated balance sheets as of June 30, 2022 and will be recorded to interest expense over the term of the Credit Agreement.
Borrowings under the Credit Agreement denominated in U.S. dollars bear interest, payable at least quarterly, at the Company’s option, at a LIBORSecured Overnight Financing Rate ("SOFR") rate or a base rate plus a margin. Borrowings under the credit agreement denominated in pounds sterling, if any, bear interest at the Sterling Overnight Index Average ("SONIA") rate plus a margin. The margin ranges from 1.75%2.00% to 2.50%2.75% on LIBORSOFR and SONIA loans and 0.75%1.00% to 1.50%1.75% on base rate loans, determined by the Company’s most recent consolidated leverage ratio. The Company incurs a commitment fee ranging from 0.30%0.35% to 0.45%0.50% on any unused capacity under the revolving loan facility, determined by the Company’s most recent consolidated leverage ratio. There were no borrowings in pounds sterling as of June 30, 2022 and December 31, 2021. The facility may be prepaid at any time without penalty.
The Credit Agreement contains various customary affirmative and negative covenants and also contains certain financial covenants, including a consolidated leverage ratio and a consolidated interest coverage ratio. Borrowings are allowed under the Credit Agreement to the extent the consolidated leverage ratio calculated on a pro forma basis, is equal to or less than 2.50 to 1.00.1.00, subject to the terms of the Credit Agreement. Negative covenants include restrictions on incurring certain liens; making certain payments, such as stock repurchases and dividend payments; making certain investments; making certain acquisitions; making certain dispositions; and incurring additional indebtedness. Restricted payments are allowed under the Credit Agreement to the extent the consolidated leverage
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
ratio, calculated on a pro forma basis, is equal to or less than 2.00 to 1.00, plus an additional $5.0$7.5 million of restricted payments.payments each fiscal year, as described in the Credit Agreement. The Credit Agreement also provides that the payment of obligations may be accelerated upon the occurrence of customary events of default, including, but not limited to, non-payment, change of control, or insolvency. As of SeptemberJune 30, 2021,2022, the Company was in compliance with all of the financial covenants under the Credit Agreement.
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The obligations under the Credit Agreement are guaranteed by twoone of the Company’s U.S. based wholly-owned subsidiaries and secured by substantially all of the assets of the Borrowers and the guarantors.
Previous Credit Agreement - The Borrowers previously maintained a Second Amended and Restated Credit Agreement (the "Old Credit Agreement"), which was scheduled to mature in November 2023. The Old Credit Agreement, when entered into during November 2018, provided for a revolving loan facility of $90 million, with an expansion option of $50 million, bringing the total facility to $140 million, as permitted by the terms of the Old Credit Agreement.
Borrowings under the Old Credit Agreement accrued interest, at the Company's option, at a LIBOR rate or a base rate plus a margin. The margin ranged from 1.75% to 2.50% on LIBOR loans and 0.75% to 1.50% on base rate loans, determined by the Company's most recent consolidated leverage ratio. The Company incurred a commitment fee ranging from 0.35% to 0.50% on any unused capacity under the revolving loan facility, determined by the Company’s most recent consolidated leverage ratio. The was no penalty for prepayment of the Old Credit Agreement.
The amounts borrowed as of SeptemberJune 30, 20212022 and December 31, 20202021 are as follows (dollars in thousands):
| | | | | | | | | | | |
| September 30, 2021 | | December 31, 2020 |
Amounts borrowed: | | | |
Revolving credit facility | $ | 18,000 | | | $ | 20,000 | |
Less: deferred financing costs, net of accumulated amortization of $430 and $319 | (307) | | | (417) | |
Long-term debt, net | $ | 17,693 | | | $ | 19,583 | |
| | | |
Available to be borrowed under revolving facility, subject to certain limitations | $ | 72,000 | | | $ | 70,000 | |
| | | |
Interest rates: | | | |
LIBOR rate loans: | | | |
Interest margin | 1.75 | % | | 2.00 | % |
Actual interest rates | 1.88 | % | | 2.19 | % |
| | | |
Commitment fee | 0.30 | % | | 0.35 | % |
| | | | | | | | | | | |
| June 30, 2022 | | December 31, 2021 |
Amounts borrowed: | | | |
Revolving credit facility | $ | 30,000 | | | $ | 23,000 | |
Less: deferred financing costs, net of accumulated amortization of $467 as of December 31, 20211 | — | | | (270) | |
Long-term debt, net | $ | 30,000 | | | $ | 22,730 | |
| | | |
Available to be borrowed under revolving facility, subject to certain limitations | $ | 70,000 | | | $ | 67,000 | |
| | | |
Interest rates: | | | |
SOFR/LIBOR rate loans: | | | |
Interest margin | 2.00 | % | | 1.75 | % |
Actual interest rates | 3.30 | % | | 1.88 | % |
| | | |
Commitment fee | 0.35 | % | | 0.30 | % |
| | | |
(1) In connection with the new Credit Agreement entered into during the three months ended June 30, 2022, the Company recorded deferred financing costs of $0.7 million to other assets on the condensed consolidated balance sheets. Accumulated amortization as of June 30, 2022 was approximately zero. |
There are no scheduled principal payments until maturity of the Credit Agreement in November 2023.June 2027.
11. COMMITMENTS AND CONTINGENCIES
Litigation
The Company is subject to various claims from taxing authorities, lawsuits and other complaints arising in the ordinary course of business. The Company records provisions for losses when claims become probable and the amounts are reasonably estimable. Although the outcome of these legal matters, except as described below and recorded in the condensed consolidated financial statements, cannot be determined, it is the opinion of management that the final resolution of these matters will not have a material effect on the Company’s financial condition, operations or liquidity.
Tax Contingencies
The Company operates in a number of tax jurisdictions and is routinely subject to examinations by various tax authorities with respect to income taxes and indirect taxes. The determination of the Company’s liability for taxes requires judgment and estimation. The Company has reserved for potential examination adjustments to our provision for income taxes and accrual of indirect taxes in amounts which the Company believes are reasonable.
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
12. EQUITY TRANSACTIONS
Stock Repurchase Plans—The Company's Board of Directors ("Board") approved a stock repurchase program that permits the Company to repurchase its common stock. Management has discretion in determining the conditions under which shares may be purchased from time to time. The following table summarizes the Stock Repurchase Plans approved by the Board:
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| | | | | | | | | | | | | | | | | |
| May 2019 to May 2020 | | May 2020 to May 2021(1) | | Feb 2021 to Jun 2022(2) | | Feb 2022 to Feb 2023(3) |
Approval Date | April 2019 | | May 2020 | | February 2021 | | February 2022 |
Authorized Repurchase Amount of Common Stock | $7 million | | $5 million | | $20 million | | $15 million |
| | | | | |
(1) During the first quarter of 2021, the Company completed its purchases under the plan, which consisted of 2.2 million shares for $5.0 million, effectively ending the plan prior to its original expiration date. |
(2) During the second quarter of 2021, the Company amended its $8$8.0 million stock repurchase program approved in February 2021 and allowed for the purchase of an additional $12.0 million of our common stock through June 2022, bringing total authorized purchases under the plan to $20.0 million. During the first quarter of 2022, the Company completed its purchases under the plan, which consisted of approximately 4.4 million shares for $20.0 million, effectively ending the plan prior to its original expiration date. |
(3) On February 15, 2022, the Company announced that its Board of Directors approved a new stock repurchase program that permits the purchase of up to $15.0 million of the Company's common stock through February 2023. |
As of SeptemberJune 30, 20212022 the value of shares that may yet be purchased under the current plan was $11.0$9.4 million.
Purchases of the Company's common stock pursuant to the Stock Repurchase Plans were as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| 2021 | | 2020 | | 2021 | | 2020 |
Shares repurchased(1) | 1,823,585 | | | 349,273 | | | 2,945,932 | | | 2,351,940 | |
Average purchase price per share(2) | $ | 3.72 | | | $ | 2.45 | | | $ | 3.43 | | | $ | 2.52 | |
Dollar value of shares repurchased (in thousands) | $ | 6,792 | | | $ | 854 | | | $ | 10,095 | | | $ | 5,930 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2022 | | 2021 | | 2022 | | 2021 |
Shares repurchased(1) | 625,069 | | | 532,448 | | | 1,927,295 | | | 1,122,347 | |
Average purchase price per share(2) | $ | 5.94 | | | $ | 3.30 | | | $ | 5.83 | | | $ | 2.94 | |
Dollar value of shares repurchased (in thousands) | $ | 3,714 | | | $ | 1,756 | | | $ | 11,239 | | | $ | 3,303 | |
(1) No shares of our common stock were purchased other than through a publicly announced plan or program.
(2) Average price paid per share includes costs associated with the repurchases.
There were 29,27424,758 and 7,811135,330 unsettled share repurchases as of SeptemberJune 30, 2022 and 2021, respectively.
Stock Repurchases Pursuant to the 2012 Omnibus Equity Award Plan—Under the 2012 Omnibus Equity Award Plan, as further described in note 13 to the condensed consolidated financial statements, the Company repurchases its common stock withheld for income tax from the vesting of employee restricted stock or Performance-Based Restricted Stock Units (“PSUs”). The Company remits the value, which is based on the closing share price on the vesting date, of the common stock withheld to the appropriate tax authority on behalf of the employee and 2020, respectively.the related shares become treasury stock.
Purchases of the Company’s common stock pursuant to the 2012 Omnibus Equity Award Plan were as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2022 | | 2021 | | 2022 | | 2021 |
Shares repurchased upon restricted stock/PSU vesting | 64,381 | | | 151,225 | | | 837,429 | | | 660,124 | |
Average purchase price per share | $ | 5.75 | | | $ | 3.21 | | | $ | 5.46 | | | $ | 2.77 | |
Dollar value of shares repurchased upon restricted stock/PSU vesting (in thousands) | $ | 370 | | | $ | 485 | | | $ | 4,572 | | | $ | 1,826 | |
13. STOCK BASEDSTOCK-BASED COMPENSATION
Under the 2012 Omnibus Equity Award Plan, the Company has granted stock options, restricted stock and Performance-Based Restricted Stock Units (“PSUs”) to certain employees and directors. The Company also offers an Employee Stock Purchase Plan. Stock-based compensation disclosures within this footnote include expense and shares related to the eFC business through June 30, 2021.
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The Company recorded total stock basedstock-based compensation expense of $2.2$2.5 million and $6.2 million during each of the three and nine month periods ended September 30, 2021, respectively, and $1.5 million and $4.9$4.7 million during the three and nine monthssix month periods ended SeptemberJune 30, 2020. At September2022, respectively, and $1.8 million and $3.4 million during the three and six month periods ended June 30, 2021, respectively. At June 30, 2022, there was $10.5$16.8 million of unrecognized compensation expense related to unvested awards, which is expected to be recognized over a weighted-average period of approximately 1.31.4 years.
Restricted Stock—Restricted stock is granted to employees of the Company and its subsidiaries, and to non-employee members of the Company’s Board. These shares are part of the compensation plan for services provided by the employees or Board members. The closing price of the Company’s stock on the date of grant is used to determine the fair value of the grants. The expense related to restricted stock grants is recorded over the vesting period as described below. There was no cash flow impact resulting from the grants.
Restricted stock vests in various increments either quarterly or on the anniversaries of each grant, subject to the recipient’s continued employment or service through each applicable vesting date. Vesting occurs over one year for Board members and over two to four years for employees.
A summary of the status of restricted stock awards as of SeptemberJune 30, 20212022 and 20202021 and the changes during the periods then ended is presented below:
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| | | | Three Months Ended September 30, 2021 | | Three Months Ended September 30, 2020 | | Three Months Ended June 30, 2022 | | Three Months Ended June 30, 2021 |
| | Shares | | Weighted- Average Fair Value at Grant Date | | Shares | | Weighted- Average Fair Value at Grant Date | | Shares | | Weighted- Average Fair Value at Grant Date | | Shares | | Weighted- Average Fair Value at Grant Date |
Non-vested at beginning of the period | Non-vested at beginning of the period | 3,476,056 | | | $ | 2.55 | | | 4,153,171 | | | $ | 2.48 | | Non-vested at beginning of the period | 3,124,491 | | | $ | 3.62 | | | 4,107,217 | | | $ | 2.49 | |
Granted | Granted | 463,000 | | | $ | 3.93 | | | 282,500 | | | $ | 2.34 | | Granted | — | | | $ | — | | | 291,460 | | | $ | 2.99 | |
Forfeited | Forfeited | (115,757) | | | $ | 2.82 | | | (74,586) | | | $ | 2.63 | | Forfeited | (27,002) | | | $ | 4.01 | | | (327,959) | | | $ | 2.65 | |
Vested | Vested | (231,721) | | | $ | 2.33 | | | (204,816) | | | $ | 2.42 | | Vested | (411,416) | | | $ | 2.64 | | | (594,662) | | | $ | 2.35 | |
Non-vested at end of period | Non-vested at end of period | 3,591,578 | | | $ | 2.74 | | | 4,156,269 | | | $ | 2.47 | | Non-vested at end of period | 2,686,073 | | | $ | 3.77 | | | 3,476,056 | | | $ | 2.55 | |
| | | | Nine Months Ended September 30, 2021 | | Nine Months Ended September 30, 2020 | | Six Months Ended June 30, 2022 | | Six Months Ended June 30, 2021 |
| | Shares | | Weighted- Average Fair Value at Grant Date | | Shares | | Weighted- Average Fair Value at Grant Date | | Shares | | Weighted- Average Fair Value at Grant Date | | Shares | | Weighted- Average Fair Value at Grant Date |
Non-vested at beginning of the period | Non-vested at beginning of the period | 3,877,853 | | | $ | 2.49 | | | 3,994,787 | | | $ | 2.46 | | Non-vested at beginning of the period | 3,371,832 | | | $ | 2.80 | | | 3,877,853 | | | $ | 2.49 | |
Granted | Granted | 2,222,683 | | | $ | 2.94 | | | 2,143,000 | | | $ | 2.68 | | Granted | 932,500 | | | $ | 5.17 | | | 1,759,683 | | | $ | 2.68 | |
Forfeited | Forfeited | (647,891) | | | $ | 2.72 | | | (354,884) | | | $ | 2.85 | | Forfeited | (108,716) | | | $ | 3.18 | | | (532,134) | | | $ | 2.69 | |
Vested | Vested | (1,861,067) | | | $ | 2.47 | | | (1,626,634) | | | $ | 2.64 | | Vested | (1,509,543) | | | $ | 2.52 | | | (1,629,346) | | | $ | 2.49 | |
Non-vested at end of period | Non-vested at end of period | 3,591,578 | | | $ | 2.74 | | | 4,156,269 | | | $ | 2.47 | | Non-vested at end of period | 2,686,073 | | | $ | 3.77 | | | 3,476,056 | | | $ | 2.55 | |
PSUs—PSUs are granted to employees of the Company and its subsidiaries. These shares are granted under two compensation agreements that are for services provided by the employees. The first agreement expired and was terminated during the first quarter of 2020 and had no unvested shares as of March 31, 2020. Under the second agreement, the fair value of the PSUs areis measured at the grant date fair value of the award, which was determined based on an analysis of the probable performance outcomes. The performance period is over one year and is based on the achievement of bookings targets during the year of grant, as defined in the agreement. The earned shares will then vest over a three year period, one-third on each of the first, second, and third anniversaries of the grant date, or if later, the date the Compensation Committee certifies the performance results with respect to the performance period. For the performance period ending December 31, 2020, as a result of the COVID-19 pandemic and its impact on the overall economy, the bookings targets were modified during the third quarter of 2020. Accordingly, the Company remeasured the awards.
There was no cash flow impact resulting from the grants.
A summary of the status of PSUs as of September 30, 2021 and 2020 and the changes during the periods then ended is presented below:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, 2021 | | Three Months Ended September 30, 2020 |
| Shares | | Weighted- Average Fair Value at Grant Date | | Shares | | Weighted- Average Fair Value at Grant Date |
Non-vested at beginning of the period | 1,815,532 | | | $ | 2.53 | | | 1,587,607 | | | $ | 2.50 | |
| | | | | | | |
Forfeited | (16,290) | | | $ | 2.63 | | | (14,851) | | | $ | 2.55 | |
| | | | | | | |
Non-vested at end of period | 1,799,242 | | | $ | 2.53 | | | 1,572,756 | | | $ | 2.41 | |
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, 2021 | | Nine Months Ended September 30, 2020 |
| Shares | | Weighted- Average Fair Value at Grant Date | | Shares | | Weighted- Average Fair Value at Grant Date |
Non-vested at beginning of the period | 1,352,438 | | | $ | 2.50 | | | 1,664,650 | | | $ | 2.53 | |
Granted | 990,000 | | | $ | 2.62 | | | 911,460 | | | $ | 2.65 | |
Forfeited | (161,946) | | | $ | 2.63 | | | (680,778) | | | $ | 3.27 | |
Vested | (381,250) | | | $ | 2.60 | | | (322,576) | | | $ | 1.92 | |
Non-vested at end of period | 1,799,242 | | | $ | 2.53 | | | 1,572,756 | | | $ | 2.41 | |
A summary of the status of PSUs as of June 30, 2022 and 2021 and the changes during the periods then ended is presented below:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, 2022 | | Three Months Ended June 30, 2021 |
| Shares | | Weighted- Average Fair Value at Grant Date | | Shares | | Weighted- Average Fair Value at Grant Date |
Non-vested at beginning of the period | 2,125,049 | | | $ | 3.48 | | | 1,897,671 | | | $ | 2.54 | |
| | | | | | | |
Forfeited | — | | | $ | — | | | (40,000) | | | $ | 2.62 | |
Vested | (14,553) | | | $ | 3.00 | | | (42,139) | | | $ | 2.75 | |
Non-vested at end of period | 2,110,496 | | | $ | 3.48 | | | 1,815,532 | | | $ | 2.53 | |
|
| | | | | | | | | | | | | | | | | | | | | | | |
| Six Months Ended June 30, 2022 | | Six Months Ended June 30, 2021 |
| Shares | | Weighted- Average Fair Value at Grant Date | | Shares | | Weighted- Average Fair Value at Grant Date |
Non-vested at beginning of the period | 1,593,775 | | | $ | 2.62 | | | 1,352,438 | | | $ | 2.50 | |
Granted(1) | 1,553,332 | | | $ | 3.77 | | | 990,000 | | | $ | 2.62 | |
Forfeited(2) | (93,341) | | | $ | 2.40 | | | (145,656) | | | $ | 2.63 | |
Vested | (943,270) | | | $ | 2.61 | | | (381,250) | | | $ | 2.60 | |
Non-vested at end of period | 2,110,496 | | | $ | 3.48 | | | 1,815,532 | | | $ | 2.53 | |
(1) PSUs granted includes 853,332 additional PSUs granted in the first quarter of 2022 related to the bookings achievement for the performance period ended December 31, 2021. |
(2)PSUs forfeited includes 48,633 PSUs forfeited in the first quarter 2022 related to the bookings achievement for the performance period ended December 31, 2020. |
Stock Options—The fair value of each option grant is estimated using the Black-Scholes option-pricing model. This valuation model requires the Company to make assumptions and judgments about the variables used in the calculation, including the fair value of the Company’s common stock, the expected life (the period of time that the options granted are expected to be outstanding), the volatility of the Company’s common stock, a risk-free interest rate and expected dividends. The expected life of options granted is derived from historical exercise behavior. The risk-free rate for periods within the expected life of the option is based on the U.S. Treasury rates in effect at the time of grant. The stock options vest 25% after one year, beginning on the first anniversary date of the grant, and 6.25% each quarter following the first anniversary. There was no cash flow impact resulting from the grants. No stock options were granted during the nine monthssix month periods ended SeptemberJune 30, 20212022 and 2020.2021.
There were no options outstanding as of December 31, 2021. A summary of the status of options previously grantedoutstanding as of Septemberand for the periods ended June 30, 2021 and 2020, and the changes during the periods then ended, isare presented below: | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, 2021 |
| Options | | Weighted-Average Exercise Price | | Aggregate Intrinsic Value |
Options outstanding at beginning of the period | 10,000 | | | $ | 8.25 | | | $ | — | |
Forfeited | (10,000) | | | $ | 8.25 | | | $ | — | |
Options outstanding at end of period | — | | | $ | — | | | $ | — | |
Exercisable at end of period | — | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, 2020 |
| Options | | Weighted-Average Exercise Price | | Aggregate Intrinsic Value |
Options outstanding at beginning of the period | 110,000 | | | $ | 7.40 | | | $ | — | |
| | | | | |
Options outstanding at end of period | 110,000 | | | $ | 7.40 | | | $ | — | |
Exercisable at end of period | 110,000 | | | $ | 7.40 | | | $ | — | |
| | | Nine Months Ended September 30, 2021 | | Three Months Ended June 30, 2021 |
| | Options | | Weighted-Average Exercise Price | | Aggregate Intrinsic Value | | Options | | Weighted-Average Exercise Price | | Aggregate Intrinsic Value |
Options outstanding at beginning of the period | Options outstanding at beginning of the period | 110,000 | | | $ | 7.40 | | | $ | — | | Options outstanding at beginning of the period | 25,000 | | | $ | 7.50 | | | $ | — | |
Forfeited | Forfeited | (110,000) | | | $ | 7.40 | | | $ | — | | Forfeited | (15,000) | | | $ | 7.00 | | | $ | — | |
Options outstanding at end of period | Options outstanding at end of period | — | | | $ | — | | | $ | — | | Options outstanding at end of period | 10,000 | | | $ | 8.25 | | | $ | — | |
Exercisable at end of period | Exercisable at end of period | — | | | $ | — | | | $ | — | | Exercisable at end of period | 10,000 | | | $ | 8.25 | | | $ | — | |
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| | | Nine Months Ended September 30, 2020 | | Six Months Ended June 30, 2021 |
| | Options | | Weighted-Average Exercise Price | | Aggregate Intrinsic Value | | Options | | Weighted-Average Exercise Price | | Aggregate Intrinsic Value |
Options outstanding at beginning of the period | Options outstanding at beginning of the period | 190,000 | | | $ | 8.28 | | | $ | — | | Options outstanding at beginning of the period | 110,000 | | | $ | 7.40 | | | $ | — | |
Forfeited | Forfeited | (80,000) | | | $ | 9.48 | | | $ | — | | Forfeited | (100,000) | | | $ | 7.32 | | | $ | — | |
Options outstanding at end of period | Options outstanding at end of period | 110,000 | | | $ | 7.40 | | | $ | — | | Options outstanding at end of period | 10,000 | | | $ | 8.25 | | | $ | — | |
Exercisable at end of period | Exercisable at end of period | 110,000 | | | $ | 7.40 | | | $ | — | | Exercisable at end of period | 10,000 | | | $ | 8.25 | | | $ | — | |
Employee Stock Purchase Plan—On March 11, 2020 the Company's Board of Directors adopted an Employee Stock Purchase Plan ("ESPP"). The ESPP was approved by the Company's stockholders on April 21, 2020. The ESPP provides eligible employees the opportunity to purchase shares of the Company's common stock through payroll deductions during six-month offering periods. The purchase price per share of common stock is 85% of the lower of the closing stock price on the first or last trading day of each offering period. The offering periods are January 1 to June 30 and July 1 to December 31. The maximum number of shares of common stock available for purchase under the ESPP is 500,000, subject to adjustment as provided under the ESPP. Individual employee purchases are limited to $25,000 per calendar year, based on the fair market value of the shares on the purchase date. The first offering period commenced January 1, 2022. During the six months ended June 30, 2022, 29,253 shares were issued under the plan. No shares were issued during the six months ended June 30, 2021.
14. EARNINGS PER SHARE
Basic earnings (loss) per share (“EPS”) is computed based on the weighted-average number of shares of common stock outstanding. Diluted EPS is computed based on the weighted-average number of shares of common stock outstanding plus common stock equivalents, where dilutive. As shown in the table below, certain dilutive shares were excluded from the computation of shares contingently issuable upon exercise as we recognized a loss from continuing operations. Outstanding stock-based awards that were anti-dilutive and excluded from the calculation of diluted EPS were approximately 0.3 million and 0.7 million shares for the three and nine month periods ended September 30, 2021, respectively, and approximately 2.3 million shares for the three and nine month periods ended September 30, 2020. The following is a calculation of basic and diluted earnings per share and weighted-average shares outstanding (in thousands, except per share amounts):
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| 2021 | | 2020 | | 2021 | | 2020 |
Loss from continuing operations | $ | (2,434) | | | $ | (26,993) | | | $ | (634) | | | $ | (33,366) | |
Income (loss) from discontinued operations, net of tax | $ | — | | | $ | (329) | | | $ | (29,340) | | | $ | 1,356 | |
Net loss | $ | (2,434) | | | $ | (27,322) | | | $ | (29,974) | | | $ | (32,010) | |
| | | | | | | |
Weighted-average shares outstanding—basic | 45,807 | | | 47,955 | | | 46,740 | | | 48,503 | |
Add shares issuable from stock-based awards | — | | | — | | | — | | | — | |
Weighted-average shares outstanding—diluted | 45,807 | | | 47,955 | | | 46,740 | | | 48,503 | |
| | | | | | | |
Basic loss per share - continuing operations | $ | (0.05) | | | $ | (0.56) | | | $ | (0.01) | | | $ | (0.69) | |
Diluted loss per share - continuing operations | $ | (0.05) | | | $ | (0.56) | | | $ | (0.01) | | | $ | (0.69) | |
| | | | | | | |
Basic earnings (loss) per share - discontinued operations | $ | — | | | $ | (0.01) | | | $ | (0.63) | | | $ | 0.03 | |
Diluted earnings (loss) per share - discontinued operations | $ | — | | | $ | (0.01) | | | $ | (0.63) | | | $ | 0.03 | |
| | | | | | | |
Basic loss per share | $ | (0.05) | | | $ | (0.57) | | | $ | (0.64) | | | $ | (0.66) | |
Diluted loss per share | $ | (0.05) | | | $ | (0.57) | | | $ | (0.64) | | | $ | (0.66) | |
| | | | | | | |
Shares issuable from stock-based awards(1) | 2,561 | | | 1,383 | | | 2,004 | | | 1,342 | |
|
(1) Represents shares excluded from the computation of shares contingently issuable upon exercise as we recognized a net loss from continuing operations. |
15. INCOME TAXES
The Company’s effective tax rate was 19% and 45% for the three and nine months ended September 30, 2021, respectively, and 6% and 7% for the three and nine months ended September 30, 2020, respectively. The following items caused the effective tax rate to differ from the U.S. statutory rate: | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2022 | | 2021 | | 2022 | | 2021 |
Income from continuing operations | $ | 1,450 | | | $ | (212) | | | $ | 2,751 | | | $ | 1,800 | |
Loss from discontinued operations, net of tax | $ | — | | | $ | (29,999) | | | $ | — | | | $ | (29,340) | |
Net income (loss) | $ | 1,450 | | | $ | (30,211) | | | $ | 2,751 | | | $ | (27,540) | |
| | | | | | | |
Weighted-average shares outstanding—basic | 44,682 | | | 47,227 | | | 44,692 | | | 47,111 | |
Add shares issuable from stock-based awards1 | 2,279 | | | — | | | 2,285 | | | 1,743 | |
Weighted-average shares outstanding—diluted | 46,961 | | | 47,227 | | | 46,977 | | | 48,854 | |
| | | | | | | |
Basic earnings per share - continuing operations | $ | 0.03 | | | $ | — | | | $ | 0.06 | | | $ | 0.04 | |
Diluted earnings per share - continuing operations | $ | 0.03 | | | $ | — | | | $ | 0.06 | | | $ | 0.04 | |
| | | | | | | |
Basic earnings (loss) per share - discontinued operations | $ | — | | | $ | (0.64) | | | $ | — | | | $ | (0.62) | |
Diluted earnings (loss) per share - discontinued operations | $ | — | | | $ | (0.64) | | | $ | — | | | $ | (0.60) | |
| | | | | | | |
Basic earnings (loss) per share | $ | 0.03 | | | $ | (0.64) | | | $ | 0.06 | | | $ | (0.58) | |
Diluted earnings (loss) per share | $ | 0.03 | | | $ | (0.64) | | | $ | 0.06 | | | $ | (0.56) | |
| | | | | | | |
| | | | | | | |
Shares excluded from the calculation of diluted earnings per share2 | — | | | 408 | | | 936 | | | 436 | |
| | | | |
(1) For the three months ended June 30, 2021, 1.9 million shares were excluded from the computation of shares contingently issuable upon exercise as we recognized a net loss from continuing operations. |
(2) Represents outstanding stock-based awards that were anti-dilutive and excluded from the calculation of diluted earnings per share. |
DHI GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
15. INCOME TAXES
The Company’s effective tax rate was (13)% and (51)% for the three and six months ended June 30, 2022, respectively, and 22% and 3% for the three and six months ended June 30, 2021, respectively. In addition to state income taxes, the following items caused the effective tax rate to differ from the U.S. statutory rate:
•Tax expensebenefits of $0.2 million and $1.0 million during the three and six months ended June 30, 2022, from the vesting of share-based compensation awards.
•A tax benefit of $0.1 million during the three and six months ended SeptemberJune 30, 2021, and a2022, from research tax benefitcredits.
•Tax benefits of $0.3$0.1 million during the ninethree and six months ended SeptemberJune 30, 2022, and $0.4 million during the six months ended June 30, 2021, related tofrom the release of a valuation allowance on the Company's capital loss carryforward.
•Tax expense of $5.5 million during the three and nine months ended September 30, 2020, related to nondeductible impairment charges.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes included elsewhere in this report. See also our consolidated financial statements and the notes thereto and the section entitled “Note Concerning Forward-Looking Statements” in our Annual Report on Form 10-K for the year ended December 31, 2020.2021.
Information contained herein contains 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 potential impact of the coronavirus COVID-19 outbreak on our operations and financial results, geopolitical events, uncertainty in respect ofto 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 below and in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2020,2021, under the headings “Risk Factors,” “Forward-Looking Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Information contained herein contains certain non-GAAP financial measures. These measures are not in accordance with, or an alternative for, measures in accordance with U.S. GAAP. Such measures presented herein include adjusted earnings before interest, taxes, depreciation, amortization, non-cash stock basedstock-based compensation expense, impairment, gain or loss on sale of businesses, and certain other income or expense items, as defined, (“Adjusted EBITDA") and Adjusted EBITDA Margin. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources" for definitions of these measures as well as reconciliations to the comparable GAAP measure.
You should keep in mind that any forward-looking statement made by us herein, or elsewhere, speaks only as of the date on which it is made. New risks and uncertainties come up from time to time, and it is impossible to predict these events or how they may affect us. We have no obligation to update any forward-looking statements after the date hereof, except as required by federal securities laws.
Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy and information statements and other material information concerning us are available free of charge on the Investors page of our website at www.dhigroupinc.com. Our reports filed with the SEC are also available by visiting http://www.sec.gov.
Overview
We are a provider of software products, online tools and services that deliver career marketplaces to candidates and employers in the United States. DHI’s brands, Dice and ClearanceJobs, enable recruiters and hiring managers to efficiently search, match and connect with highly skilled technologists in specialized fields, particularly technology and active government security
clearance. Professionals find ideal employment opportunities, relevant job advice and personalized data that help manage their technologist lives.
In online recruitment, we specialize in employment categories in which there has been a long-term scarcity of highly skilled, highly qualified professionals relative to market demand, specifically technologists who work in a variety of industries or have active government security clearances. Our websites serve as online two-sided marketplaces where employers and recruiters source and connect with prospective employees, and where technologists find relevant job opportunities, data and information to further their careers. Our websites offer job postings, news and content, career development and recruiting services tailored to the specific needs of the professional community that each website serves.
Majority ownership and control of DHI's eFinancialCareers ("eFC") business, which provides career websites to the financial services industry and has operations in the United Kingdom, Continental Europe, Asia, the Middle East and North America, was transferred to eFC management on June 30, 2021. The Company retained a 40% common share interest. As a result, all ongoing DHI operations, which include the Dice and ClearanceJobs brands, are in the United States subsequent to June 30, 2021.
We have been in the recruiting and career development business for over 30 years. Based on our operating structure, we have identified one reportable segment, Tech-focused, which includes the Dice and ClearanceJobs businesses and corporate related costs. The Dice and ClearanceJobs businesses and corporate related costs are aggregated into the Tech-focused reportable segment primarily because the Company does not have discrete financial information for those brands or costs. As a result of the eFC separation, the eFC business was deconsolidated from the Company's condensed consolidated balance sheets and statements of operations as of June 30, 2021 and is reflected as a discontinued operation for all periods presented on or before June 30, 2021.
Recent Developments
None.
Our Revenues and Expenses
We derive the majority of our revenues from customers who pay fees, either annually, quarterly or monthly, to post jobs on our websites and to access our searchable databases of resumes. Our fees vary by customer based on the number of individual users of our databases of resumes, the number and type of job postings and profile views purchased and the terms of the packages purchased. Our Company sells recruitment packages that can include access to our databases of resumes and job posting capabilities. We believe the key metrics that are material to an analysis of our businesses are our total number of Dice and ClearanceJobs recruitment package customers and the revenue, on average, that these customers generate. The tables below detail this customer data.
| | | As of September 30, | | Increase (Decrease) | | Percent Change | | As of June 30, | | Increase (Decrease) | | Percent Change |
Recruitment Package Customers: | Recruitment Package Customers: | 2021 | | 2020 | | Recruitment Package Customers: | 2022 | | 2021 | |
Dice | Dice | 5,770 | | 5,300 | | 470 | | 9% | Dice | 6,386 | | 5,441 | | 945 | | 17% |
ClearanceJobs | ClearanceJobs | 1,816 | | 1,682 | | 134 | | 8% | ClearanceJobs | 1,976 | | 1,784 | | 192 | | 11% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Average Monthly Revenue per Recruitment Package Customer(1) |
| Three months ended September 30, | | Nine months ended September 30, |
| 2021 | | 2020 | | Increase (Decrease) | | Percent Change | | 2021 | | 2020 | | Increase (Decrease) | | Percent Change |
Dice | $1,138 | | $1,122 | | $16 | | 1% | | $1,130 | | $1,135 | | $(5) | | —% |
ClearanceJobs | $1,421 | | $1,358 | | $63 | | 5% | | $1,396 | | $1,338 | | $58 | | 4% |
(1) Calculated by dividing recruitment package customer revenue by the daily average count of recruitment package customers during each month, adjusted to reflect a thirty day month. The simple average of each month is used to derive the amount for each period. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Average Annual Revenue per Recruitment Package Customer(1) |
| Three months ended June 30, | | Six months ended June 30, |
| 2022 | | 2021 | | Increase (Decrease) | | Percent Change | | 2022 | | 2021 | | Increase (Decrease) | | Percent Change |
Dice | $ | 14,304 | | | $ | 13,488 | | | $ | 816 | | | 6 | % | | $14,208 | | $13,512 | | $696 | | 5% |
ClearanceJobs | $ | 18,708 | | | $ | 16,728 | | | $ | 1,980 | | | 12 | % | | $18,564 | | $16,608 | | $1,956 | | 12% |
| | | | | | | | | | | | | | | |
(1) Calculated by dividing recruitment package customer revenue by the daily average count of recruitment package customers during each month, adjusted to reflect a 30-day month. The simple average of each month is used to derive the amount for each period and then annualized to reflect 12 months. |
Dice had 5,7706,386 recruitment package customers as of SeptemberJune 30, 2021,2022, which was an increase of 470,945, or 9%17%, year over year and average annual revenue per recruitment package customer for Dice increased for the three month period while it decreased for the nine month period.$816, or 6%, year over year. The increases were driven by strong renewal rates and new business activity while the decrease in revenue per recruitment package customer for the nine month period was due to the low levels of customer activity in 2020 that impacted revenues into 2021.activity. ClearanceJobs had 1,8161,976 recruitment package customers as of SeptemberJune 30, 20212022 compared to 1,6821,784 as of SeptemberJune 30, 2020,2021, an increase of 8%11%, and average annual revenue per recruitment package customer increased for both the three and nine month periods.$1,980, or 12%, year over year. The increases for ClearanceJobs were due to continued high demand for professionals with government clearance and consistent product releases and enhancements driving activity on the site.
Deferred revenue, as shown on the Condensed Consolidated Balancecondensed consolidated balance sheets, reflects customer billings made in advance of services being rendered. Backlog consists of deferred revenue plus customer contractual commitments not invoiced
representing the value of future services to be rendered under committed contracts. We believe backlog to be an important measure of our business as it represents our ability to generate future revenue. A summary of our deferred revenue and backlog is as follows:
| | | Comparison to Prior Year End | | Comparison Year Over Year | | Comparison to Prior Year End | | Comparison Year Over Year |
| | 9/30/2021 | | 12/31/2020 | | Increase (Decrease) | | Percent Change | | 9/30/2020 | | Increase (Decrease) | | Percent Change | | 6/30/2022 | | 12/31/2021 | | Increase (Decrease) | | Percent Change | | 6/30/2021 | | Increase (Decrease) | | Percent Change |
Deferred Revenue | Deferred Revenue | $ | 43,403 | | | $ | 36,582 | | | $ | 6,821 | | | 19 | % | | $ | 35,592 | | | $ | 7,811 | | | 22 | % | Deferred Revenue | $ | 54,144 | | | $ | 46,146 | | | $ | 7,998 | | | 17 | % | | $ | 43,188 | | | $ | 10,956 | | | 25 | % |
Contractual commitments not invoiced | Contractual commitments not invoiced | 36,546 | | | 27,849 | | | 8,697 | | | 31 | % | | 18,261 | | | 18,285 | | | 100 | % | Contractual commitments not invoiced | 49,981 | | | 46,497 | | | 3,484 | | | 7 | % | | 31,890 | | | 18,091 | | | 57 | % |
Backlog(1) | Backlog(1) | $ | 79,949 | | | $ | 64,431 | | | $ | 15,518 | | | 24 | % | | $ | 53,853 | | | $ | 26,096 | | | 48 | % | Backlog(1) | $ | 104,125 | | | $ | 92,643 | | | $ | 11,482 | | | 12 | % | | $ | 75,078 | | | $ | 29,047 | | | 39 | % |
| (1) Backlog consists of deferred revenue plus customer contractual commitments not invoiced representing the value of future services to be rendered under committed contracts. | (1) Backlog consists of deferred revenue plus customer contractual commitments not invoiced representing the value of future services to be rendered under committed contracts. | (1) Backlog consists of deferred revenue plus customer contractual commitments not invoiced representing the value of future services to be rendered under committed contracts. |
Backlog at SeptemberJune 30, 20212022 increased $15.5$11.5 million and $26.1$29.0 million from December 31, 20202021 and SeptemberJune 30, 2020,2021, respectively. The increase in backlog compared to December 31, 20202021 and SeptemberJune 30, 20202021 is due to the strong technology recruitment market driving bookings growth at both Dice and ClearanceJobs, and a focus on signing multi-year contracts.contracts, and the Company's ongoing investments in sales and marketing. The first quarter of each year is generally the largest bookings quarter of the year, also contributing to the growth from December 31, 2021.
To a lesser extent, we also generate revenue from advertising on our various websites or from lead generation and marketing solutions provided to our customers. Advertisements include various forms of rich media and banner advertising, text links, sponsorships, and custom content marketing solutions. Lead generation information utilizes advertising and other methods to deliver leads to customers.
The Company continues to evolve and present new software products and features to attract and engage qualified professionals and match them with employers.
| | | | | | | | |
Product Releases |
2021 | | 2020 |
Dice Marketplace, Dice TalentSearch Social Data Refresh, Brand.io, TalentSearch Personalization | | Dice IntelliSearch-Based Job Alerts, Dice Private Email, Dice Remote Jobs, Dice Recruiter Profile, Dice Instant Messaging |
ClearanceJobs Meetings, ClearanceJobs Video, Team Recruiting, Shared Talent Pipelines | | ClearanceJobs Client Team Dashboard, ClearanceJobs Workflow, ClearanceJobs Favorites, ClearanceJobs Self-Serve BrandAmp, ClearanceJobs Candidate Search and ClearanceJobs Broadcast Message upgrades |
Our ability to grow our revenues will largely depend on our ability to grow our customer bases in the markets in which we operate by acquiring new customers while retaining a high proportion of the customers we currently serve, and to expand the breadth of services our customers purchase from us. We continue to make investments in our business and infrastructure to help us achieve our long-term growth objectives, such as the innovative products noted above.in the table below.
| | | | | | | | |
Product Releases |
2022 | | 2021 |
New Job Apply Flow, Dice TalentSearch Time Zone Search | | Dice Marketplace, Dice TalentSearch Social Data Refresh, Brand.io, TalentSearch Personalization, Unbiased Sourcing Mode |
Multi-Factor Authentication, ClearanceJobs Live Video | | ClearanceJobs Meetings, ClearanceJobs Video, Team Recruiting, Shared Talent Pipelines, Quality of Use Improvements |
Other material factors that may affect our results of operations include our ability to attract qualified professionals that become engaged with our websites and our ability to attract customers with relevant job opportunities. The more qualified professionals that use our websites, the more attractive our websites become to employers and advertisers, which in turn makes them more likely to become our customers, resulting positively on our results of operations. If we are unable to continue to attract qualified professionals to engage with our two-sided marketplaces, our customers may no longer find our services attractive, which could have a negative impact on our results of operations. Additionally, we need to ensure that our websites remain relevant in order to attract qualified professionals to our websites and to engage them in high-value tasks, such as posting resumes and/or applying for jobs.
The largest components of our expenses are personnel costs and marketing and sales expenditures. Personnel costs consist of salaries, benefits, and incentive compensation for our employees, including commissions for salespeople. Personnel costs are categorized in our statement of operations based on each employee’s principal function. Personnel costs incurred during the application development stage of internal use software and website development are recorded as fixed assets and amortized to
depreciation expense in the statement of operations over the estimated useful life of the asset. Marketing expenditures primarily consist of online advertising, brand promotion and lead generation to employers and job seekers.
Critical Accounting PoliciesEstimates
There have been no material changes to our critical accounting policiesestimates as compared to the critical accounting policies described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020.2021.
Three Months Ended SeptemberJune 30, 20212022 Compared to the Three Months Ended SeptemberJune 30, 20202021
Revenues
| | | Three Months Ended September 30, | | Increase (Decrease) | | Percent Change | | | | Three Months Ended June 30, | | Increase (Decrease) | | Percent Change | | |
2021 | | 2020 | | | | 2022 | | 2021 | | Increase (Decrease) | |
| | (in thousands, except percentages) | | | | (in thousands, except percentages) | | |
| Dice(1) | Dice(1) | $ | 22,272 | | | $ | 19,823 | | | $ | 2,449 | | | 12 | % | | | Dice(1) | $ | 26,823 | | | $ | 20,583 | | | $ | 6,240 | | | 30 | % | | |
ClearanceJobs | ClearanceJobs | 8,486 | | | 7,326 | | | 1,160 | | | 16 | % | | | ClearanceJobs | 10,234 | | | 8,138 | | | 2,096 | | | 26 | % | | |
Total revenues | Total revenues | $ | 30,758 | | | $ | 27,149 | | | $ | 3,609 | | | 13 | % | | | Total revenues | $ | 37,057 | | | $ | 28,721 | | | $ | 8,336 | | | 29 | % | | |
| (1) Includes Dice and Career Events | (1) Includes Dice and Career Events | | (1) Includes Dice and Career Events | |
For the three months ended SeptemberJune 30, 2021,2022 we experienced an increase in revenue of $3.6$8.3 million, or 13%29%. Revenue at Dice increased $2.4$6.2 million, or 12%30%, compared to the same period in 2020. Dice2021 due to improvements in renewal rates and new business activity improved from the prior year quarter along with consistently increasing customer counts, during 2021, which drives additional revenue in future periods. Revenues for ClearanceJobs increased $1.2$2.1 million, or 16%26%, as compared to the same period in 2020,2021, primarily driven by continued high demand for professionals with government clearance and consistent product releases and enhancements driving activity on the site.
Cost of Revenues
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Increase | | Percent Change |
2021 | | 2020 | |
| (in thousands, except percentages) |
Cost of revenues | $ | 3,791 | | | $ | 3,549 | | | $ | 242 | | | 7 | % |
Percentage of revenues | 12.3 | % | | 13.1 | % | | | | |
Cost of revenues increased $0.2 million, or 7%, driven by an increase of $0.2 million from higher cloud computing amortization and a decrease in capitalized labor of $0.1 million, which increases operating expenses. Together, these increased expense $0.2 million.
Product Development Expenses
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Increase | | Percent Change |
2021 | | 2020 | |
| (in thousands, except percentages) |
Product development | $ | 4,056 | | | $ | 3,697 | | | $ | 359 | | | 10 | % |
Percentage of revenues | 13.2 | % | | 13.6 | % | | | | |
Product development increased $0.4 million, or 10%, driven by a decrease in capitalized labor of $0.4 million, which increases operating expenses.
Cost of Revenues
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Increase | | Percent Change |
2022 | | 2021 | |
| (in thousands, except percentages) |
Cost of revenues | $ | 4,181 | | | $ | 3,593 | | | $ | 588 | | | 16 | % |
Percentage of revenues | 11.3 | % | | 12.5 | % | | | | |
Cost of revenues increased $0.6 million, or 16%, driven by an increase of $0.5 million from higher compensation related costs, primarily from higher headcount. Operational costs, including the amortization of cloud computing costs, increased by $0.1 million.
Product Development Expenses
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Increase | | Percent Change |
2022 | | 2021 | |
| (in thousands, except percentages) |
Product development | $ | 4,360 | | | $ | 3,510 | | | $ | 850 | | | 24 | % |
Percentage of revenues | 11.8 | % | | 12.2 | % | | | | |
Product development expenses increased $0.9 million, or 24%, driven by an increase of $1.9 million from higher compensation related costs partially offset by an increase in capitalized labor of $1.1 million, which decreases operating expenses.
Sales and Marketing Expenses | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Increase | | Percent Change |
2021 | | 2020 | |
| (in thousands, except percentages) |
Sales and marketing | $ | 11,292 | | | $ | 9,065 | | | $ | 2,227 | | | 25 | % |
Percentage of revenues | 36.7 | % | | 33.4 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Increase | | Percent Change |
2022 | | 2021 | |
| (in thousands, except percentages) |
Sales and marketing | $ | 14,274 | | | $ | 10,151 | | | $ | 4,123 | | | 41 | % |
Percentage of revenues | 38.5 | % | | 35.3 | % | | | | |
Sales and marketing expenses increased $2.2$4.1 million, or 25%41% from the same period in 2020.2021. This increase was driven by a $1.3$2.5 million increase in compensation related costs from higher headcount and quota attainment versus sales plan, $0.7$1.3 million increase in discretionary marketing expenses aswith strong customer recruitment activity, rebounded, and a $0.2$0.3 million increase in operational costs, including travel and entertainment and company events.events as COVID-19 restrictions have eased.
General and Administrative Expenses
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Increase | | Percent Change |
2021 | | 2020 | |
| (in thousands, except percentages) |
General and administrative | $ | 7,556 | | | $ | 6,319 | | | $ | 1,237 | | | 20 | % |
Percentage of revenues | 24.6 | % | | 23.3 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Increase | | Percent Change |
2022 | | 2021 | |
| (in thousands, except percentages) |
General and administrative | $ | 9,109 | | | $ | 6,939 | | | $ | 2,170 | | | 31 | % |
Percentage of revenues | 24.6 | % | | 24.2 | % | | | | |
General and administrative expenses increased $1.2$2.2 million, or 20%31% from the prior year. The increase was driven by stock baseda $1.5 million increase in compensation expense, which increased approximately $0.8includes a $0.6 million increase in stock-based compensation. The increase in compensation expense is primarily due to higher achievement against targets for the Company's PSUs. Compensation relatedbonus and PSU plans. Operational costs, increased $0.5 million, which was driven by higher bonus costs as the Company has exceeded bonus targets and a change in the Company's vacation policy that was implemented during the current quarter. These increases were partially offset by a decrease inincluding professional fees, bad debt, travel, and other operational costs from the prior year.training increased $0.7 million.
Depreciation | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Increase | | Percent Change |
2021 | | 2020 | |
(in thousands, except percentages) |
Depreciation | $ | 4,359 | | | $ | 2,390 | | | $ | 1,969 | | | 82 | % |
Percentage of revenues | 14.2 | % | | 8.8 | % | | | | |
Depreciation expense increased $2.0 million or 82% from the same period in 2020 in connection with increasing internal development costs during 2019 and 2020 that were then placed in service, primarily in late 2020, and depreciated. Internal development costs are reflected as purchases of fixed assets in the Condensed Consolidated Statements of Cash Flows.
Impairment of Intangible Assets
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Decrease | | Percent Change |
2021 | | 2020 | |
| (in thousands, except percentages) |
Impairment of intangible assets | $ | — | | | $ | 8,000 | | | $ | (8,000) | | | (100) | % |
Percentage of revenues | — | % | | 29.5 | % | | | | |
The Company has an indefinite-lived acquired intangible asset related to the Dice trademarks and brand name. During the third quarter of 2020, because of the impacts of the COVID-19 pandemic, the Company performed an interim impairment analysis of the Dice trademarks and brand name. As a result of the analysis, the Company recorded an impairment charge of $8.0 million in the third quarter of 2020. See also Note 8 of the Notes to the Condensed Consolidated Financial Statements.
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Increase | | Percent Change |
2022 | | 2021 | |
(in thousands, except percentages) |
Depreciation | $ | 4,228 | | | $ | 4,040 | | | $ | 188 | | | 5 | % |
Percentage of revenues | 11.4 | % | | 14.1 | % | | | | |
Impairment of Goodwill
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Decrease | | Percent Change |
2021 | | 2020 | |
| (in thousands, except percentages) |
Impairment of goodwill | $ | — | | | $ | 22,607 | | | $ | (22,607) | | | (100) | % |
Percentage of revenues | — | % | | 83.3 | % | | | | |
Depreciation expense increased $0.2 million or 5% from the same period in 2021 in connection with increasing capitalized development costs throughout 2021 and projects being placed into service driving higher depreciation in 2022.
DuringOperating Income
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Increase | | Percent Change |
2022 | | 2021 | |
| (in thousands, except percentages) |
Revenue | $ | 37,057 | | | $ | 28,721 | | | $ | 8,336 | | | 29 | % |
Operating income | 905 | | | 488 | | | 417 | | | 85 | % |
Operating margin | 2.4 | % | | 1.7 | % | | | | |
Operating income for the third quarterthree months ended June 30, 2022 was $0.9 million, a margin of 2020, because2.4%, compared to operating income of $0.5 million, a margin of 1.7%, for the impactssame period in 2021, an improvement of COVID-19 pandemic,$0.4 million. The increase in operating income and improved percentage margin was driven by higher revenues, partially offset by higher operating costs as the Company performed an interim impairment analysis of goodwill. As a result of the analysis, the Company recorded an impairment charge of $22.6 millioninvests in the third quarter of 2020. See also Note 9 of the Notes of the Condensed Consolidated Financial Statements.its product and sales and marketing for future growth.
Impairment of Right-of-Use AssetIncome from Equity Method Investment
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Increase | | Percent Change |
2021 | | 2020 | |
| (in thousands, except percentages) |
Impairment of right-of-use asset | $ | 1,919 | | | $ | — | | | $ | 1,919 | | | — | % |
Percentage of revenues | 6.2 | % | | — | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Increase | | Percent Change |
2022 | | 2021 | |
| (in thousands, except percentages) |
Income from equity method investment | $ | 361 | | | $ | — | | | $ | 361 | | | n/a |
Percentage of revenues | 1.0 | % | | — | % | | | | |
During the three months ended SeptemberJune 30, 2021, due to the continuing impacts of COVID-19 on the real estate markets and its impact on the future cash flows attributable to its ROU assets, the Company performed an impairment analysis of a sublease within its ROU assets. As a result,2022, the Company recorded an impairment charge$0.4 million of $1.9 million during the quarter.income related to its proportionate share of eFC's net income.
Operating LossGain (Loss) on Investment
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Increase | | Percent Change |
2021 | | 2020 | |
| (in thousands, except percentages) |
Revenue | $ | 30,758 | | | $ | 27,149 | | | $ | 3,609 | | | 13 | % |
Operating loss | (2,215) | | | (28,478) | | | 26,263 | | | (92) | % |
Percentage of revenues | (7.2) | % | | (104.9) | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Increase | | Percent Change |
2022 | | 2021 | |
| (in thousands, except percentages) |
Gain (loss) on investment | $ | 320 | | | $ | (674) | | | $ | 994 | | | (147) | % |
Percentage of revenues | 0.9 | % | | (2.3) | % | | | | |
Operating loss forDuring the three months ended SeptemberJune 30, 2022, the Company recognized a $0.3 million gain from the sale of its 40% common share interest in Rigzone. During the three months ended June 30, 2021, was $2.2the Company recognized a $0.7 million a negative margin of 7.2%, compared to operating loss of $28.5 million, a negative margin of 104.9%, for the same period in 2020, an improvement of $26.3 million. The decrease in operating loss and improved percentage margin was primarily driven by the non-cash impairments of goodwill and intangible assets of $30.6 million in the third quarter of 2020, partially offset by increased investments in sales and marketing, higher depreciation, and the ROU asset impairment of $1.9 million in the third quarter of 2021.
Interest Expense and Other | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Decrease | | Percent Change |
2021 | | 2020 | |
| (in thousands, except percentages) |
Interest expense and other | $ | 150 | | | $ | 273 | | | $ | (123) | | | (45) | % |
Percentage of revenues | 0.5 | % | | 1.0 | % | | | | |
Interest expense and other decreased $0.1 million, from the same period in 2020 due to lower debt outstanding.
Loss on Investments
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Decrease | | Percent Change |
2021 | | 2020 | |
| (in thousands, except percentages) |
Loss on investments | $ | (641) | | | $ | — | | | $ | (641) | | | — | % |
Percentage of revenues | (2.1) | % | | — | % | | | | |
The loss on investments relatesrelated to a minority interest representing less than 1% of the common stock of a technology company that became publicly traded during the first quarter of 2021 after filing anfor its initial public offering. The Company sold 100% of this investment during the third quarter of 2021. See also Note 7 of the Notes to the Condensed Consolidated Financial Statements.condensed consolidated financial statements.
Interest Expense and Other
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Increase | | Percent Change |
2022 | | 2021 | |
| (in thousands, except percentages) |
Interest expense and other | $ | 298 | | | $ | 87 | | | $ | 211 | | | 243 | % |
Percentage of revenues | 0.8 | % | | 0.3 | % | | | | |
Interest expense and other increased from the same period in 2021, primarily due to higher debt outstanding on the revolving credit facility during the current period.
Income Taxes
| | | | | | | | | | | |
| Three Months Ended September 30, |
2021 | | 2020 |
(in thousands, except percentages) |
Loss before income taxes | $ | (3,006) | | | $ | (28,751) | |
Income tax benefit | (572) | | | (1,758) | |
Effective tax rate | 19.0 | % | | 6.1 | % |
| | | | | | | | | | | |
| Three Months Ended June 30, |
2022 | | 2021 |
(in thousands, except percentages) |
Income (loss) before income taxes | $ | 1,288 | | | $ | (273) | |
Income tax benefit | (162) | | | (61) | |
Effective tax rate | (12.6) | % | | 22.3 | % |
Our effective tax rate for the three months ended SeptemberJune 30, 2021,2022, differed from the U.S. statutory rate due to tax expensebenefits of $0.2 million from the vesting of share-based compensation awards, $0.1 million related tofrom research tax credits, and $0.1 million from the release of a valuation allowance on our capital loss carryforward. The tax rate for the three months ended SeptemberJune 30, 2020,2021, differed from the statutory rate due to tax expense of $5.5 million from nondeductible impairment charges.state income taxes.
Loss
Income (loss) from discontinued operations, net of tax
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Increase | | Percent Change |
2021 | | 2020 | |
| (in thousands, except percentages) |
Loss from discontinued operations, net of tax | $ | — | | | $ | (329) | | | $ | 329 | | | (100) | % |
Percentage of revenues | — | % | | (1.2) | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Increase | | Percent Change |
2022 | | 2021 | |
| (in thousands, except percentages) |
Income (loss) from discontinued operations, net of tax | $ | — | | | $ | (29,999) | | | $ | 29,999 | | | (100) | % |
Percentage of revenues | — | % | | (104.4) | % | | | | |
The Company transferred majority ownership of its eFC business on June 30, 2021 to eFC management and has recorded it as a discontinued operation. Loss from discontinued operations for the three months ended September 30, 2020 represents eFC's earnings during the period.
Earnings (loss) per Share
| | | | | | | | | | | |
| Three Months Ended September 30, |
| 2021 | | 2020 |
| (in thousands, except per share amounts) |
Loss from continuing operations | $ | (2,434) | | | $ | (26,993) | |
Loss from discontinued operations, net of tax | — | | | (329) | |
Net Loss | $ | (2,434) | | | $ | (27,322) | |
| | | |
Weighted-average shares outstanding - diluted | $ | 45,807 | | | $ | 47,955 | |
| | | |
Diluted loss per share - continuing operations | $ | (0.05) | | | $ | (0.56) | |
Diluted loss per share - discontinued operations | $ | — | | | $ | (0.01) | |
Diluted loss per share | $ | (0.05) | | | $ | (0.57) | |
Diluted loss per share from continuing operations and diluted loss per share were $0.05 and $0.56 for the three months ended September 30, 2021 and 2020, respectively. The decrease was driven by the impairment of the ROU asset. The increase in loss per share was primarily driven by the the impairments of goodwill and intangible assets of $30.6 million in the third quarter of 2020, partially offset by increased investments in sales and marketing, depreciation, and the ROU asset impairment of $1.9 million in the third quarter of 2021.
Nine Months Ended September 30, 2021 Compared to the Nine Months Ended September 30, 2020
Revenues | | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, | | Increase (Decrease) | | Percent Change |
2021 | | 2020 | |
| (in thousands, except percentages) |
Tech-focused | | | | | | | |
Dice (1) | $ | 61,906 | | | $ | 62,797 | | | $ | (891) | | | (1) | % |
ClearanceJobs | 24,249 | | | 21,333 | | | 2,916 | | | 14 | % |
Total revenues | $ | 86,155 | | | $ | 84,130 | | | $ | 2,025 | | | 2 | % |
| | | | | | | |
(1) Includes Dice U.S. and Career Events |
We experienced an increase in revenue of $2.0 million, or 2%. Revenue at Dice decreased by $0.9 million, or 1%, compared to the same period in 2020 as the COVID-19 pandemic drove lower renewal rates throughout 2020, which negatively impacted revenue into 2021. Revenue at ClearanceJobs increased by $2.9 million, or 14%, as compared to the same period in 2020, primarily driven by continued high demand for professionals with government clearance and consistent product releases and enhancements driving activity on the site.
Cost of Revenues | | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, | | Increase | | Percent Change |
2021 | | 2020 | |
| (in thousands, except percentages) |
Cost of revenues | $ | 11,086 | | | $ | 10,532 | | | $ | 555 | | | 5 | % |
Percentage of revenues | 12.9 | % | | 12.5 | % | | | | |
Cost of revenues increased $0.6 million, or 5%, primarily driven by an increase of $0.5 million from higher costs associated with web hosting and cloud computing amortization.
Product Development Expenses | | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, | | Increase | | Percent Change |
2021 | | 2020 | |
| (in thousands, except percentages) |
Product development | $ | 11,168 | | | $ | 10,839 | | | $ | 329 | | | 3 | % |
Percentage of revenues | 13.0 | % | | 12.9 | % | | | | |
Product Development increased $0.3 million, or 3% from the same period in 2020. Within product development, the Company experienced a $0.9 million decrease in headcount related costs, which were offset by a decrease in capitalized labor, which increased expense $0.9 million, and an increase in consulting costs of $0.3 million.
Sales and Marketing Expenses | | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, | | Increase | | Percent Change |
2021 | | 2020 | |
| (in thousands, except percentages) |
Sales and marketing | $ | 31,214 | | | $ | 30,177 | | | $ | 1,037 | | | 3 | % |
Percentage of revenues | 36.2 | % | | 35.9 | % | | | | |
Sales and marketing expenses increased $1.0 million, or 3% from the same period in 2020. The increase was primarily driven by a $1.2 million increase in compensation related costs due to increased headcount and higher quota attainment versus sales plan, which was offset by a $0.3 million decrease in operational costs, including travel, entertainment, and consulting.
General and Administrative Expenses
| | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, | | Increase | | Percent Change |
2021 | | 2020 | |
| (in thousands, except percentages) |
General and administrative | $ | 20,649 | | | $ | 20,438 | | | $ | 211 | | | 1 | % |
Percentage of revenues | 24.0 | % | | 24.3 | % | | | | |
General and administrative costs increased $0.2 million, or 1%, from the same period in 2020. The increase was primarily driven by stock based compensation, which increased approximately $1.1 million compared to the prior year due to higher achievement against targets for the Company's PSUs. Compensation related costs increased $0.3 million, which was driven by higher bonus costs as the Company has exceeded bonus targets and a change in the Company's vacation policy that was implemented during the current quarter. These increases were partially offset by a decrease in operational costs, including bad debt expense, legal fees, and professional fees totaling $1.2 million.
Depreciation | | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, | | Increase | | Percent Change |
2021 | | 2020 | |
(in thousands, except percentages) |
Depreciation | $ | 12,030 | | | $ | 7,730 | | | $ | 4,300 | | | 56 | % |
Percentage of revenues | 14.0 | % | | 9.2 | % | | | | |
Depreciation expense increased $4.3 million, or 56%, from the same period in 2020 in connection with increasing internal development costs during 2019 and 2020 that were then placed in service, primarily in late 2020, and depreciated. Internal development costs are reflected as purchases of fixed assets in the Condensed Consolidated Statements of Cash Flows.
Impairment of Intangible Assets | | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, | | Decrease | | Percent Change |
2021 | | 2020 | |
| (in thousands, except percentages) |
Impairment of intangible assets | $ | — | | | $ | 15,200 | | | $ | (15,200) | | | (100) | % |
Percentage of revenues | — | % | | 18.1 | % | | | | |
The Company has an indefinite-lived acquired intangible asset related to the Dice trademarks and brand name. During the first and third quarters of 2020, because of the impacts of the COVID-19 pandemic, the Company performed an interim impairment analysis of the Dice trademarks and brand name. As a result of the analysis, the Company recorded an impairment charge of $15.2 million during the nine months ended September 30, 2020. See also Note 8 of the Notes to the Condensed Consolidated Financial Statements.
Impairment of Goodwill
| | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, | | Decrease | | Percent Change |
2021 | | 2020 | |
| (in thousands, except percentages) |
Impairment of goodwill | $ | — | | | $ | 22,607 | | | $ | (22,607) | | | (100) | % |
Percentage of revenues | — | % | | 26.9 | % | | | | |
During the third quarter of 2020, because of the impacts of COVID-19 pandemic, the Company performed an interim impairment analysis of goodwill. As a result of the analysis, the Company recorded an impairment charge of $22.6 million in the third quarter of 2020. See also Note 9 of the Notes of the Condensed Consolidated Financial Statements.
Impairment of Right-of-Use Asset
| | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, | | Increase | | Percent Change |
2021 | | 2020 | |
| (in thousands, except percentages) |
Impairment of right-of-use asset | $ | 1,919 | | | $ | — | | | $ | 1,919 | | | — | % |
Percentage of revenues | 2.2 | % | | — | % | | | | |
During the third quarter of 2021, due to the continuing impacts of COVID-19 on the real estate markets and its impact on the future cash flows attributable to its ROU assets, the Company performed an impairment analysis of a sublease within its ROU assets. As a result, the Company recorded an impairment charge of $1.9 million during the quarter.
Operating Loss
| | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, | | Increase | | Percent Change |
2021 | | 2021 | |
(in thousands, except percentages) |
Revenue | $ | 86,155 | | | $ | 84,130 | | | $ | 2,025 | | | 2 | % |
Operating loss | (1,911) | | | (33,393) | | | 31,482 | | | (94) | % |
Percentage of revenues | (2.2) | % | | (39.7) | % | | | | |
Operating loss for the nine months ended September 30, 2021 was $1.9 million, a negative margin of 2.2%, compared to an operating loss of $33.4 million, a negative margin of 39.7% for the same period during 2020. The decrease in operating loss and improved percentage margin was primarily driven by non-cash impairments of goodwill and intangible assets of $37.8 million during the 2020 period, partially offset by increased investments in sales and marketing, higher depreciation, and the ROU asset impairment of $1.9 million in the third quarter of 2021.
Interest Expense and Other | | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, | | Decrease | | Percent Change |
2021 | | 2020 | |
| (in thousands, except percentages) |
Interest expense and other | $ | 432 | | | $ | 622 | | | $ | (190) | | | (31) | % |
Percentage of revenues | 0.5 | % | | 0.7 | % | | | | |
Interest expense and other decreased $0.2 million, or 31%, compared to the same period in 2020 due to lower debt outstanding.
Impairment of Equity Investment | | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, | | Increase | | Percent Change |
2021 | | 2020 | |
| (in thousands, except percentages) |
Impairment of equity investment | $ | — | | | $ | (2,002) | | | $ | 2,002 | | | (100) | % |
Percentage of revenues | 0.0 | % | | (2.4) | % | | | | |
During the first quarter of 2020, due to the impacts from the COVID-19 pandemic, the Company determined the value of its 7.6% interest in a leading tech skills assessment company to be zero. Accordingly, the Company recorded an impairment charge of $2.0 million during the first quarter of 2020.
Gain on Investments
| | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, | | Increase | | Percent Change |
2021 | | 2020 | |
| (in thousands, except percentages) |
Gain on investments | $ | 1,198 | | | $ | — | | | $ | 1,198 | | | — | % |
Percentage of revenues | 1.4 | % | | — | % | | | | |
The gain on equity investments relates to a minority interest representing less than 1% of the common stock of a technology company that became publicly traded during the first quarter of 2021 after filing an initial public offering. The Company sold 100% of this investment during the third quarter of 2021. See also Note 7 of the Notes to the Condensed Consolidated Financial Statements.
Income Taxes | | | | | | | | | | | |
| Nine Months Ended September 30, |
2021 | | 2020 |
(in thousands, except percentages) |
Loss before income taxes | $ | (1,145) | | | $ | (36,017) | |
Income tax benefit | (511) | | | (2,651) | |
Effective tax rate | 44.6 | % | | 7.4 | % |
Our effective tax rate for the nine months ended September 30, 2021, differed from the U.S. statutory rate due to a tax benefit of $0.3 million related to a valuation allowance on our capital loss carryforward. The tax rate for the nine months ended September 30, 2020, differed from the statutory rate due to tax expense of $5.5 million from nondeductible impairment charges.
Income (loss) from discontinued operations, net of tax
| | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, | | Decrease | | Percent Change |
2021 | | 2020 | |
| (in thousands, except percentages) |
Income (loss) from discontinued operations, net of tax | $ | (29,340) | | | $ | 1,356 | | | $ | (30,696) | | | (2,264) | % |
Percentage of revenues | (34.1) | % | | 1.6 | % | | | | |
During the nine months ended September 30, 2021, the Company transferred majority ownership of its eFC business to eFC management and has recorded it as a discontinued operation. As a result, the Company experiencedrecognized a $30.0 million loss from discontinued operations, net of tax, of $29.3 million during the ninethree months ended SeptemberJune 30, 2021. The loss was comprised of $28.1 million related to the reclassification of currency translation adjustments and $5.2 million from the removal of eFC's net assets. The loss was partially offset by the recording of an equity investment of $3.6 million and eFC's earnings during the ninethree months ended SeptemberJune 30, 2021. Income from discontinued operations for the nine months ended September 30, 2020 represents eFC's earnings during the period.
Earnings (loss) per Share
| | | | | | | | | | | |
| Nine Months Ended September 30, |
| 2021 | | 2020 |
| (in thousands, except per share amounts) |
Loss from continuing operations | $ | (634) | | | $ | (33,366) | |
Income (loss) from discontinued operations, net of tax | $ | (29,340) | | | $ | 1,356 | |
Net loss | $ | (29,974) | | | $ | (32,010) | |
| | | |
Weighted-average shares outstanding - diluted | 46,740 | | | 48,503 | |
| | | |
Diluted loss per share - continuing operations | $ | (0.01) | | | $ | (0.69) | |
Diluted earnings (loss) per share - discontinued operations | $ | (0.63) | | | $ | 0.03 | |
Diluted loss per share | $ | (0.64) | | | $ | (0.66) | |
| | | | | | | | | | | |
| Three Months Ended June 30, |
| 2022 | | 2021 |
| (in thousands, except per share amounts) |
Income (loss) from continuing operations | $ | 1,450 | | | $ | (212) | |
Loss from discontinued operations, net of tax | — | | | (29,999) | |
Net income (loss) | $ | 1,450 | | | $ | (30,211) | |
| | | |
Weighted-average shares outstanding - basic | 44,682 | | | 47,227 | |
Weighted-average shares outstanding - diluted | 46,961 | | | 47,227 | |
| | | |
Diluted earnings per share - continuing operations | $ | 0.03 | | | $ | — | |
Diluted earnings (loss) per share - discontinued operations | $ | — | | | $ | (0.64) | |
Diluted earnings (loss) per share | $ | 0.03 | | | $ | (0.64) | |
Diluted lossearnings per share from continuing operations was $(0.01)were $0.03 and $(0.69)$0.00 for the ninethree months ended SeptemberJune 30, 20212022 and 2020,2021, respectively. The decreasedincrease is driven by an increase in operating income and the gain on sale of investment in the current period. Diluted earnings (loss) per share were $0.03 and $(0.64) for the three months ended June 30, 2022 and 2021, respectively. The prior year loss per share was driven by the impairment chargesloss from discontinued operations, which did not occur in the 2020second quarter of 2022.
Six Months Ended June 30, 2022 Compared to the Six Months Ended June 30, 2021
Revenues | | | | | | | | | | | | | | | | | | | | | | | |
| Six Months Ended June 30, | | Increase (Decrease) | | Percent Change |
2022 | | 2021 | |
| (in thousands, except percentages) |
Tech-focused | | | | | | | |
Dice (1) | $ | 51,457 | | | $ | 39,634 | | | $ | 11,823 | | | 30 | % |
ClearanceJobs | 19,934 | | | 15,763 | | | 4,171 | | | 26 | % |
Total revenues | $ | 71,391 | | | $ | 55,397 | | | $ | 15,994 | | | 29 | % |
| | | | | | | |
(1) Includes Dice U.S. and Career Events |
We experienced an increase in revenue of $16.0 million, or 29%. Revenue at Dice increased by $11.8 million, or 30%, compared to the same period in 2021 due to improvements in renewal rates and new business activity, and increasing customer counts, which drives additional revenue in future periods. Revenue at ClearanceJobs increased by $4.2 million, or 26%, as compared to the same period in 2021, primarily driven by continued high demand for professionals with government clearance and consistent product releases and enhancements driving activity on the site.
Cost of Revenues | | | | | | | | | | | | | | | | | | | | | | | |
| Six Months Ended June 30, | | Increase | | Percent Change |
2022 | | 2021 | |
| (in thousands, except percentages) |
Cost of revenues | $ | 8,280 | | | $ | 7,295 | | | $ | 984 | | | 13 | % |
Percentage of revenues | 11.6 | % | | 13.2 | % | | | | |
Cost of revenues increased $1.0 million, or 13%, driven by an increase of $0.8 million from higher compensation related costs, primarily from higher headcount. Operational costs, including the amortization of cloud computing costs, increased by $0.2 million.
Product Development Expenses | | | | | | | | | | | | | | | | | | | | | | | |
| Six Months Ended June 30, | | Increase | | Percent Change |
2022 | | 2021 | |
| (in thousands, except percentages) |
Product development | $ | 8,302 | | | $ | 7,112 | | | $ | 1,190 | | | 17 | % |
Percentage of revenues | 11.6 | % | | 12.8 | % | | | | |
Product Development increased $1.2 million, or 17%, driven by an increase of $2.8 million from higher compensation related costs, partially offset by an increase in capitalized labor of $1.7 million, which decreases operating expenses.
Sales and Marketing Expenses | | | | | | | | | | | | | | | | | | | | | | | |
| Six Months Ended June 30, | | Increase | | Percent Change |
2022 | | 2021 | |
| (in thousands, except percentages) |
Sales and marketing | $ | 28,215 | | | $ | 19,922 | | | $ | 8,293 | | | 42 | % |
Percentage of revenues | 39.5 | % | | 36.0 | % | | | | |
Sales and marketing expenses increased $8.3 million, or 42% from the same period in 2021. The increase was driven by a $4.8 million increase in compensation related costs from higher headcount and quota attainment versus sales plan, $2.8 million increase in discretionary marketing expenses with strong customer recruitment activity, and a $0.7 million increase in operational costs, including travel and entertainment and company events as COVID-19 restrictions have eased.
General and Administrative Expenses
| | | | | | | | | | | | | | | | | | | | | | | |
| Six Months Ended June 30, | | Increase | | Percent Change |
2022 | | 2021 | |
| (in thousands, except percentages) |
General and administrative | $ | 16,875 | | | $ | 13,093 | | | $ | 3,782 | | | 29 | % |
Percentage of revenues | 23.6 | % | | 23.6 | % | | | | |
General and administrative costs increased $3.8 million, or 29%, from the same period in 2021. The increase was driven by a $2.6 million increase in compensation expense, which includes a $1.3 million increase in stock-based compensation. The increase in compensation expense is primarily due to higher achievement against targets for the Company's bonus and PSU plans. Operational costs, including legal, collection expenses, travel, and training increased $1.2 million.
Depreciation | | | | | | | | | | | | | | | | | | | | | | | |
| Six Months Ended June 30, | | Increase | | Percent Change |
2022 | | 2021 | |
(in thousands, except percentages) |
Depreciation | $ | 8,186 | | | $ | 7,671 | | | $ | 515 | | | 7 | % |
Percentage of revenues | 11.5 | % | | 13.8 | % | | | | |
Depreciation expense increased $0.5 million, or 7%, from the same period in 2021 in connection with increasing capitalized development costs throughout 2021 and projects being placed into service driving higher depreciation in 2022.
Operating Income
| | | | | | | | | | | | | | | | | | | | | | | |
| Six Months Ended June 30, | | Increase | | Percent Change |
2022 | | 2021 | |
(in thousands, except percentages) |
Revenue | $ | 71,391 | | | $ | 55,397 | | | $ | 15,994 | | | 29 | % |
Operating income | 1,533 | | | 304 | | | 1,229 | | | 404 | % |
Operating margin | 2.1 | % | | 0.5 | % | | | | |
Operating income for the six months ended June 30, 2022 was $1.5 million, a margin of 2.1%, compared to operating income of $0.3 million, a margin of 0.5%, for the same period in 2021, an improvement of $1.2 million. The increase in operating income and improved percentage margin was driven by higher revenues, partially offset by higher operating costs as the Company invests in its product and sales and marketing for future growth.
Income from equity method investment | | | | | | | | | | | | | | | | | | | | | | | |
| Six Months Ended June 30, | | Increase | | Percent Change |
2022 | | 2021 | |
| (in thousands, except percentages) |
Income from equity method investment | $ | 516 | | | $ | — | | | $ | 516 | | | — | % |
Percentage of revenues | 0.7 | % | | 0.0 | % | | | | |
During the six months ended June 30, 2022, the Company recorded $0.5 million of income related to its proportionate share of eFC's net income.
Interest Expense and Other | | | | | | | | | | | | | | | | | | | | | | | |
| Six Months Ended June 30, | | Increase | | Percent Change |
2022 | | 2021 | |
| (in thousands, except percentages) |
Interest expense and other | $ | 543 | | | $ | 282 | | | $ | 261 | | | 93 | % |
Percentage of revenues | 0.8 | % | | 0.5 | % | | | | |
Interest expense and other increased $0.3 million, or 93%, compared to the same period in 2021, primarily due to higher debt outstanding on the revolving credit facility during the current period.
Gain (loss) on investment
| | | | | | | | | | | | | | | | | | | | | | | |
| Six Months Ended June 30, | | Decrease | | Percent Change |
2022 | | 2021 | |
| (in thousands, except percentages) |
Gain on investments | $ | 320 | | | $ | 1,839 | | | $ | (1,519) | | | (83) | % |
Percentage of revenues | 0.4 | % | | 3.3 | % | | | | |
During the six months ended June 30, 2022, the Company recognized a $0.3 million gain from the sale of its 40% common share interest in investment inRigzone. During the six months ended June 30, 2021, period,the Company recognized a $1.8 million gain related to a minority interest representing less than 1% of the common stock of a technology company that became publicly traded during the first quarter of 2021 after filing an initial public offering. See also Note 7 of the Notes to the condensed consolidated financial statements.
Income Taxes
| | | | | | | | | | | |
| Six Months Ended June 30, |
2022 | | 2021 |
(in thousands, except percentages) |
Income before income taxes | $ | 1,826 | | | $ | 1,861 | |
Income tax expense (benefit) | (925) | | | 61 | |
Effective tax rate | (50.7) | % | | 3.3 | % |
Our effective tax rate for the six months ended June 30, 2022, differed from the U.S. statutory rate due to tax benefits of $1.0 million from the vesting of share-based compensation awards, $0.1 million from research tax credits, and $0.1 million from the release of a valuation allowance on our capital loss carryforward. The tax rate for the six months ended June 30, 2021, differed from the statutory rate due to a $0.4 million tax benefit from the release of a valuation allowance on our capital loss carryforward.
Income (loss) from discontinued operations, net of tax
| | | | | | | | | | | | | | | | | | | | | | | |
| Six Months Ended June 30, | | Increase | | Percent Change |
2022 | | 2021 | |
| (in thousands, except percentages) |
Income (loss) from discontinued operations, net of tax | $ | — | | | $ | (29,340) | | | $ | 29,340 | | | (100) | % |
Percentage of revenues | — | % | | (53.0) | % | | | | |
The Company transferred majority ownership of its eFC business on June 30, 2021 to eFC management and recorded it as a discontinued operation. As a result, the Company experienced a loss from discontinued operations, net of tax, of $29.3 million during the six months ended June 30, 2021. The loss was comprised of $28.1 million related to the reclassification of currency translation adjustments and $5.2 million from the removal of eFC's net assets. The loss was partially offset by the ROU asset impairmentrecording of an equity investment of $3.6 million and higher depreciation expenseeFC's earnings during the six months ended June 30, 2021.
Earnings (loss) per Share
| | | | | | | | | | | |
| Six Months Ended June 30, |
| 2022 | | 2021 |
| (in thousands, except per share amounts) |
Income from continuing operations | $ | 2,751 | | | $ | 1,800 | |
Income (loss) from discontinued operations, net of tax | $ | — | | | $ | (29,340) | |
Net income (loss) | $ | 2,751 | | | $ | (27,540) | |
| | | |
Weighted-average shares outstanding - basic | 44,692 | | | 47,111 | |
Weighted-average shares outstanding - diluted | 46,977 | | | 48,854 | |
| | | |
Diluted earnings per share - continuing operations | $ | 0.06 | | | $ | 0.04 | |
Diluted earnings (loss) per share - discontinued operations | $ | — | | | $ | (0.60) | |
Diluted earnings (loss) per share | $ | 0.06 | | | $ | (0.56) | |
Diluted earnings per share from continuing operations were $0.06 and $0.04 for the six months ended June 30, 2022 and 2021, respectively. The increase is driven by an increase in operating income and an income tax benefit in the 2021current period. Diluted lossearnings (loss) per share was $(0.64)were $0.06 and $(0.66)$(0.56) for the ninesix months ended SeptemberJune 30, 2022 and 2021, and 2020, respectively. Current year to date loss per share is primarily driven by the loss on discontinued operations. The prior year loss per share is primarilywas driven by the impairment charges.loss from discontinued operations.
Liquidity and Capital Resources
Non-GAAP Financial Measures
We have provided certain non-GAAP financial measures as additional information for our operating results. These measures are not in accordance with, or an alternative for, measures in accordance with U.S. GAAP and may be different from similarly titled non-GAAP measures reported by other companies. We believe the presentation of non-GAAP measures, such as Adjusted EBITDA and Adjusted EBITDA margin,Margin, provides useful information to management and investors regarding certain financial and business trends relating to our financial condition and results of operations.
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP metricsmeasures used by management to measure operating performance. Management uses Adjusted EBITDA and Adjusted EBITDA Margin as a performance measuremeasures for internal monitoring and planning, including
preparation of annual budgets, analyzing investment decisions and evaluating profitability and performance comparisons between us and our competitors. The Company also uses this measurethese measures 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 basedstock-based compensation, losses resulting from certain dispositions outside the ordinary course of business including prior negative operating results of those divested businesses, certain writeoffswrite-offs in connection with indebtedness, impairment charges with respect to long-lived assets, expenses incurred in connection with an equity offering or any other offering of securities by the Company, extraordinary or non-recurring non-cash expenses or losses, losses from equity method investments, transaction costs in connection with the credit agreement, deferred revenues written off in connection with acquisition purchase accounting adjustments, write-off of non-cash stock basedstock-based compensation expense, severance and retention costs related to dispositions and reorganizations of the Company, and losses related to legal claims and fees that are unusual in nature or infrequent, minus (to the extent included in calculating such net income) non-cash income or gains, including income from equity method investments, interest income, business interruption insurance proceeds, and any income or gain resulting from certain dispositions outside the ordinary course of business, including prior positive operating results of those divested businesses, and gains related to legal claims that are unusual in nature or infrequent.
Adjusted EBITDA Margin is computed as Adjusted EBITDA divided by Revenues.
We also consider Adjusted EBITDA and Adjusted EBITDA Margin, as defined, above, to be an important indicatorindicators to investors because it providesthey provide information related to our ability to provide cash flows to meet future debt service, capital expenditures, and working
capital requirements, and to fund future growth. We present Adjusted EBITDA and Adjusted EBITDA Margin as a supplemental performance measuremeasures because we believe that this measure providesthese measures provide our Board, management and investors with additional information to measure our performance, provide comparisons from period to period and company to company by excluding potential differences caused by variations in capital structures (affecting interest expense) and tax positions (such as the impact on periods or companies of changes in effective tax rates or net operating losses), and to estimate our value.
We understand that although Adjusted EBITDA isand Adjusted EBITDA Margin are frequently used by securities analysts, lenders and others in their evaluation of companies, Adjusted EBITDA hasand Adjusted EBITDA Margin have limitations as an analytical tool,tools, and you should not consider itthem in isolation, or as a substitute for analysis of our liquidity or results as reported under GAAP. Some limitations are:
•Adjusted EBITDA doesand Adjusted EBITDA Margin do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments;
•Adjusted EBITDA doesand Adjusted EBITDA Margin do not reflect changes in, or cash requirements for, our working capital needs;
•Adjusted EBITDA doesand Adjusted EBITDA Margin do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments on our debt;
•Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized often will have to be replaced in the future, and Adjusted EBITDA doesand Adjusted EBITDA Margin do not reflect any cash requirements for such replacements; and
•Other companies in our industry may calculate Adjusted EBITDA and Adjusted EBITDA Margin differently than we do, limiting itstheir usefulness as a comparative measure.measures.
To compensate for these limitations, management evaluates our liquidity by considering the economic effect of excluded expense items independently, as well as in connection with its analysis of cash flows from operations and through the use of other financial measures, such as capital expenditure budget variances, investment spending levels and return on capital analysis.
Adjusted EBITDA Margin is computed as Adjusted EBITDA divided by 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, net income margin, operating income, cash provided by operating activities, or any other performance measures derived in accordance with GAAP as a measure of our profitability or liquidity.
A reconciliation of Adjusted EBITDA for the nine months ended September 30, 2021 and 2020 follows (in thousands):
| | | | | | | | | | | | |
| Nine Months Ended September 30, |
2021 | | 2020 | |
Reconciliation of Net Income (loss) to Adjusted EBITDA: | | | | |
Net loss | $ | (29,974) | | | $ | (32,010) | | |
Interest expense | 517 | | | 822 | | |
Income tax benefit | (511) | | | (2,651) | | |
Depreciation | 12,030 | | | 7,730 | | |
Non-cash stock based compensation | 5,592 | | | 4,521 | | |
Impairment of intangible assets | — | | | 15,200 | | |
Impairment of goodwill | — | | | 22,607 | | |
Impairment of investment | — | | | 2,002 | | |
Impairment of right-of-use asset | 1,919 | | | — | | |
Gain on investment | (1,198) | | | (200) | | |
Severance and related costs | 1,456 | | | 954 | | |
Loss (income) from discontinued operations, net of tax | 29,340 | | | (1,356) | | |
Other | (86) | | | — | | |
Adjusted EBITDA | $ | 19,085 | | | $ | 17,619 | | |
| | | | |
Reconciliation of Operating Cash Flows to Adjusted EBITDA: | | | | |
Net cash provided by operating activities | $ | 25,623 | | | $ | 14,444 | | |
Interest expense | 517 | | | 822 | | |
Amortization of deferred financing costs | (110) | | | (110) | | |
Income tax benefit | (511) | | | (2,651) | | |
Deferred income taxes | 710 | | | 2,220 | | |
Change in accrual for unrecognized tax benefits | (54) | | | (62) | | |
Change in accounts receivable | (2,016) | | | (4,297) | | |
Change in deferred revenue | (7,332) | | | 9,499 | | |
Discontinued operations results | (3,593) | | | (5,267) | | |
Severance and related costs | 1,456 | | | 954 | | |
Changes in working capital and other | 4,395 | | | 2,067 | | |
Adjusted EBITDA | $ | 19,085 | | | $ | 17,619 | | |
A reconciliation of Adjusted EBITDA Margin for the nine months ended September 30, 2021 and 2020 follows (in thousands):
| | | | | | | | | | | |
| Nine Months Ended September 30, |
| 2021 | | 2020 |
Revenues | $ | 86,155 | | | $ | 84,130 | |
Adjusted EBITDA | $ | 19,085 | | | $ | 17,619 | |
Adjusted EBITDA Margin | 22 | % | | 21 | % |
A reconciliation of Adjusted EBITDA for the six months ended June 30, 2022 and 2021 follows (in thousands):
| | | | | | | | | | | | | | | | | | |
| Six Months Ended June 30, | |
Dollars | | | |
2022 | | 2021 | | | | | |
Reconciliation of Net Income (loss) to Adjusted EBITDA: | | | | | | | | |
Net income (loss) | $ | 2,751 | | | $ | (27,540) | | | | | | |
Interest expense | 543 | | | 373 | | | | | | |
Income tax expense (benefit) | (925) | | | 61 | | | | | | |
Depreciation | 8,186 | | | 7,671 | | | | | | |
Non-cash stock-based compensation | 4,691 | | | 3,438 | | | | | | |
Income from equity method investment | (516) | | | — | | | | | | |
Gain on investment | (320) | | | (1,839) | | | | | | |
Severance and related costs | 323 | | | 1,311 | | | | | | |
Loss from discontinued operations, net of tax | — | | | 29,340 | | | | | | |
Other | — | | | (90) | | | | | | |
Adjusted EBITDA | $ | 14,733 | | | $ | 12,725 | | | | | | |
| | | | | | | | |
Reconciliation of cash provided by operating activities to Adjusted EBITDA | | | | | | | | |
Net cash provided by operating activities | $ | 19,448 | | | $ | 19,298 | | | | | | |
Interest expense | 543 | | | 373 | | | | | | |
Amortization of deferred financing costs | (73) | | | (74) | | | | | | |
Income tax expense (benefit) | (925) | | | 61 | | | | | | |
Deferred income taxes | 3,092 | | | 951 | | | | | | |
Change in accrual for unrecognized tax benefits | (194) | | | (82) | | | | | | |
Change in accounts receivable | (43) | | | (3,556) | | | | | | |
Change in deferred revenue | (7,998) | | | (7,118) | | | | | | |
Discontinued operations results | — | | | (3,593) | | | | | | |
Severance and related costs | 323 | | | 1,311 | | | | | | |
Changes in working capital and other | 560 | | | 5,154 | | | | | | |
Adjusted EBITDA | $ | 14,733 | | | $ | 12,725 | | | | | | |
Net Income (Loss) Margin and Adjusted EBITDA Margin for the six months ended June 30, 2022 and 2021 follows (in thousands):
| | | | | | | | | | | |
| Six Months Ended June 30, |
| 2022 | | 2021 |
Revenues | $ | 71,391 | | | $ | 55,397 | |
| | | |
Net income (loss) | $ | 2,751 | | | $ | (27,540) | |
Net income (loss) margin(1) | 4 | % | | (50) | % |
| | | |
Adjusted EBITDA | $ | 14,733 | | | $ | 12,725 | |
Adjusted EBITDA Margin(1) | 21 | % | | 23 | % |
(1) Net income (loss) margin and Adjusted EBITDA Margin are calculated by dividing the respective measure by that period's revenues. |
Cash Flows
We have summarized our cash flows for the ninesix months ended SeptemberJune 30, 20212022 and 20202021 (in thousands).
| | | Nine Months Ended September 30, | | Six Months Ended June 30, |
2021 | | 2020 | 2022 | | 2021 |
Cash from operating activities | Cash from operating activities | $ | 25,623 | | | $ | 14,444 | | Cash from operating activities | $ | 19,448 | | | $ | 19,298 | |
Cash used in investing activities | Cash used in investing activities | $ | (15,460) | | | $ | (12,336) | | Cash used in investing activities | $ | (8,210) | | | $ | (9,773) | |
Cash from (used in) financing activities | $ | (14,327) | | | $ | 19,328 | | |
Cash used in financing activities | | Cash used in financing activities | $ | (9,163) | | | $ | (9,270) | |
We have financed our operations primarily through cash provided by operating activities and borrowings under our revolving credit facility. At SeptemberJune 30, 2021,2022, we had cash of $3.5$3.6 million compared to $4.5$1.5 million at December 31, 2020.2021.
Liquidity
Our principal internal sources of liquidity are cash and cash equivalents, as well as the cash flow that we generate from our operations. In addition, we had $72.0$70.0 million in borrowing capacity under our $90.0$100.0 million Credit Agreement at SeptemberJune 30, 2021,2022, subject to certain availability limits including our consolidated leverage ratio, which generally limits borrowings to 2.5 times annual adjustedAdjusted EBITDA levels, as defined in the Credit Agreement. We believe that our existing cash and cash equivalents, cash generated from our continuing operations and available borrowings under our Credit Agreement will be sufficient to satisfy our currently anticipated cash requirements through at least the next 12 months and the foreseeable future thereafter. However, it is possible that one or more lenders under the Credit Agreement may refuse or be unable to satisfy their commitment to lend to us, we may violate one or more of our covenants or financial ratios contained in our Credit Agreement or we may need to refinance our debt and be unable to do so. In addition, our liquidity could be negatively affected by a decrease in demand for our products and services and the ability of our customers to pay for current or future services, including from the potential ongoing impact of the COVID-19 pandemic.services. We may also make acquisitions and may need to raise additional capital through future debt financings or equity offerings to the extent necessary to fund such acquisitions, which we may not be able to do on a timely basis or on terms satisfactory to us or at all.
Operating Activities
Net cash flows from operating activities primarily consist of net income adjusted for certain non-cash items, including depreciation, amortization, changes in deferred tax assets and liabilities, stock basedstock-based compensation, impairments,income from equity method investments, gain on investments, loss from sale of business, loss on disposition of discontinued operations, and the effect of changes in working capital. Net cash flows from operating activities were $25.6$19.4 million and $14.4$19.3 million for nine monththe six-month periods ended SeptemberJune 30, 20212022 and 2020,2021, respectively. Cash inflow from operations is driven by earnings and is dependent on the amount and timing of payments to vendors and employees and billings to and cash collections from our customers. Cash provided by operating activities during the 20212022 period increased $11.2$0.1 million compared to the same period of 2020 primarily due to strong billings to and collections from customers.2021.
Investing Activities
Cash used in investing activities during the nine monthsix-month period ended SeptemberJune 30, 20212022 was $15.5$8.2 million compared to $12.3$9.8 million used in the same period of 2020.2021. Cash used in investing activities in the nine monthsix-month period ended SeptemberJune 30, 2021 increased2022 decreased from the comparable 20202021 period due to $3.0 million of cash retained in thetransferred to eFC business and cash paid for investment, partially offset by lower internal development costs, primarily driven by lower headcount and development activities dedicatedrelated to the transfer of ownership in the eFC business, andprior year period. This decrease was partially offset by higher proceeds from sale of investments.internal development costs in the current period, primarily driven by higher product development headcount.
Financing Activities
Cash used in financing activities during the nine monthsix-month period ended SeptemberJune 30, 20212022 was $14.3$9.2 million and was driven by $2.0 million of net repayments on long-term debt and $12.3 million related to share repurchases. Cash from financing activities during the nine month period ended September 30, 2020 was $19.3 million, primarily due to $27.0$7.0 million of net proceeds on long-term debt, partiallyand offset by $7.7$15.8 million related to share repurchases. Cash used in financing activities during the six-month period ended June 30, 2021 was $9.3 million and was driven by $5.3 million of share repurchases and $4.0 million of net payments on long-term debt.
Credit Agreement
In November 2018, the Company, together with Dice, Inc. (a wholly-owned subsidiary of the Company) and its wholly-owned subsidiary, Dice Career Solutions, Inc. (collectively, the "Borrowers") entered into the Second Amended and Restated Credit Agreement as further amended in June 2021 (the "Credit Agreement"), which matures in November 2023, and replaced the previously existing credit agreement dated November 2015. The June 2021 amendment modified the credit agreement to allow
for the disposition of the eFC business, removed the option to borrow in EurosFinancing and Sterling, and incorporated certain form updates. The Capital Requirements
Credit Agreement provides
We have a $100 million revolving credit facility, which matures June 2027, with $30.0 million of borrowings on the facility at June 30, 2022, leaving $70.0 million available for a revolving loan facility of $90 million, with an expansion option upfuture borrowings, subject to $140 million, as permitted under the terms of the Credit Agreement.
Borrowings under the Credit Agreement denominated in U.S. dollars bear interest, payable at least quarterly, at the Company’s option, at a LIBORSecured Overnight Financing Rate ("SOFR") rate or a base rate, plus a margin. The margin ranges from 1.75% to 2.50% on LIBOR loans and 0.75% to 1.50% on base rate loans, determined by the Company’s most recent consolidated leverage ratio. The Company incurs a commitment fee ranging from 0.30% to 0.45% on any unused capacityBorrowings under the revolving loan facility, determined bycredit agreement denominated in pounds sterling, if any, bear interest at the Company’s most recent consolidated leverage ratio. The facility maySterling Overnight Index Average ("SONIA") rate plus a margin. Assuming an interest rate of 3.30% (the rate in effect on June 30, 2022) on our current borrowings, interest payments are expected to be prepaid at any time without penalty.
$0.5 million from July 1, 2022 to December 31, 2022, $1.0 million in each of 2023, 2024, 2025, and 2026 and $0.5 million in 2027. The Credit Agreement contains various customary affirmative and negative covenants and also contains certain financial covenants, including a consolidated leverage ratio and a consolidated interest coverage ratio. Borrowings are allowed under the Credit Agreement to the extent the consolidated leverage ratio, calculated on a pro forma basis, is equal to or less than 2.50 to 1.00. Negative covenants include restrictions on incurring certain liens; making certain payments, such as stock repurchases and dividend payments; making certain investments; making certain acquisitions; and incurring additional indebtedness. Restricted payments are allowed under the Credit Agreement to the extent the consolidated leverage ratio, calculated on a pro forma basis, is equal to or less than 2.00 to 1.00, plus an additional $5.0 million of restricted payments. The Credit Agreement also provides that the payment of obligations may be accelerated upon the occurrence of customary events of default, including, but not limited to, non-payment, change of control, or insolvency. As of SeptemberJune 30, 2021,2022, the Company was in compliance with all of the financial covenants under the Credit Agreement. Refer to Note 10 in the Notesnotes to the Condensed Consolidated Financial Statements.condensed consolidated financial statements and Item 3. "Quantitative and Qualitative Disclosures about Market Risk - Interest Rate Risk."
Contractual Obligations
The Company has operating leases for corporate office space and certain equipment. The leases have terms from one year to eight years, some of which include options to renew the lease, and are included in the lease term when it is reasonably certain that the Company will exercise the option. No leases include options to purchase the leased property. As of June 30, 2022, the value of our obligations under operating leases was $6.0 million. See note 6 to the Credit Agreement are guaranteed by one of the Company's U.S. based wholly-owned subsidiaries and secured by substantially all of the assets of the Borrowers and the guarantors.condensed consolidated financial statements for further information.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
Commitments and Contingencies
The following table presents certain minimum payments due and the estimated timing under contractual obligations with minimum firm commitments as of September 30, 2021:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Payments Due By Period |
Total | | Less Than 1 Year | | 1-3 Years | | 3-5 Years | | More Than 5 Years |
| (in thousands) |
Credit Agreement | $ | 18,000 | | | $ | — | | | $ | 18,000 | | | $ | — | | | $ | — | |
Operating lease obligations | 10,553 | | | 492 | | | 5,076 | | | 3,911 | | | 1,074 | |
Total contractual obligations | $ | 28,553 | | | $ | 492 | | | $ | 23,076 | | | $ | 3,911 | | | $ | 1,074 | |
We make commitments to purchase advertising from online vendors, which we pay for on a monthly basis. We have no significant long-term obligations to purchase a fixed or minimum amount with these vendors.
Our principal commitments consist of obligations under operating leases for office space and equipment and long-term debt. As of September 30, 2021, we had $18.0 million outstanding under our Credit Agreement. Interest payments are due at varying, specified periods (to a maximum of three months) based on the type of loan (LIBOR or base rate loan) we choose. See Note 10 “Indebtedness” in our Condensed Consolidated Financial Statements for additional information related to our Credit Agreement.
Future interest payments on our Credit Agreement are variable due to our interest rate being based on a LIBOR rate or a base rate. Assuming an interest rate of 1.88% (the rate in effect on September 30, 2021) on our current borrowings, interest payments are expected to be approximately $0.1 million for the remainder of 2021, approximately $0.3 million for 2022, and approximately $0.3 million for 2023.
37Other Capital Requirements
As of SeptemberJune 30, 2021,2022, we hadrecorded approximately $1.0 million of unrecognized tax benefits as liabilities, and it iswe are uncertain if or when such amounts may be settled. Related to the unrecognized tax benefits considered permanent differences, we have also recorded a liability for potential penalties and interest. Included in the balance of unrecognized tax benefits at SeptemberJune 30, 20212022 are $1.0 million of tax benefits that if recognized, would affect the effective tax rate.rate if recognized. The Company believes it is reasonably possible that as much as $0.3$0.2 million of its unrecognized tax benefits may be recognized in the next twelve12 months.
The Company's Board of Directors previously approved a stock repurchase program that permits the Company to repurchase its common stock. During the six months ended June 30 2022, the Company repurchased $11.2 million of shares of its common stock pursuant to the stock repurchase program. As of June 30, 2022, the value of shares available to be purchased under the current plan was $9.4 million. Management has discretion in determining the conditions under which shares may be purchased from time to time. See note 12 of the notes to the condensed consolidated financial statements for further information.
We anticipate capital expenditures in 2022 to be approximately $20 million. The increase over prior periods is due to the additional investments in the development of new products and features. We intend to use operating cash flows to fund capital expenditures.
Impact of COVID-19 on our Business
The spread of the coronavirus disease (“COVID-19”) caused an economic downturn on a global scale, as well as significant volatility in the financial markets. In March 2020, the World Health Organization declared the spread of the COVID-19 virus a pandemic. COVID-19 slowed recruitment activity for our businesses during 2020 as employers slowed hiring, which reduced our revenues and operating cash flows during 2020 and into the beginning of 2021. We expect theThe pandemic may continue to negatively impact our financial performance in the coming months, but, based on information currently available, we are not anticipating a significant long-term impact on our business and operations, results of operations, financial condition, cash flows, liquidity and capital and financial resources. However, the situation is uncertain and rapidly changing. The Company cannot at this time predict the ultimate impact that the COVID-19 pandemic will have on its financial condition and operations. In an effort to protect the health and safety of our employees, we have taken action to adopt certain policies at our office locations, including working
from home and the temporary closure of our locations when necessary. We may have to take further actions that we determine are in the best interests of our employees or as required by health organizations, federal, state, or local authorities.
The impact of the COVID-19 pandemic continues to unfold. The extent of the pandemic’s effect on our operational and financial performance will depend in large part on future developments, which cannot be predicted with confidence at this time. Future developments include the duration, scope and severity of the pandemic, the actions taken to contain or mitigate its impact, the impact on governmental programs and budgets, the further development of additional treatments or vaccines, and the resumption of widespread economic activity. While we expect the pandemic will continue to negativelymay impact our financial performance in the coming months, due to the inherent uncertainty of the unprecedented and rapidly evolving situation, we may not be able to predict the likely impact of the COVID-19 pandemic on our future operations.
Cyclicality
The labor market and certain of the industries that we serve have historically experienced short-term cyclicality. However, we believe that online career websites continue to provide economic and strategic value to the labor market and industries that we serve.
Any slowdown in recruitment activity that occurs could negatively impact our revenues and results of operations. For instance, the COVID-19 pandemic resulted in a slowdown of recruiting activity in 2020, which negatively impacted our business. Alternatively, a decrease in the unemployment rate or a labor shortage, including as a result of an increase in job turnover, generally means that employers (including our customers) are seeking to hire more individuals, which would generally lead to more job postings and database licenses and have a positive impact on our revenues and results of operations. Based on historical trends, improvements in labor markets and the need for our services generally lag behind overall economic improvements. Additionally, there has historically been a lag from the time customers begin to increase purchases of our recruitment services and the impact to our revenues due to the recognition of revenue occurring over the length of the contract, which can be several months to over a year.
From time to time, we see market slowdowns, which can lead to lower demand for recruiting technologists and financial and security cleared professionals. In 2020 and early in 2021, the COVID-19 pandemic led to a reduction in recruitment activity. If recruitment activity slows in the industries in which we operate, during the remainder of 2021 and beyond, our revenues and results of operations may be negatively impacted.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
We have exposure to financial market risks, including changes in foreign currency exchange rates, interest rates, and other relevant market prices.
Foreign Exchange Risk
Prior to June 30, 2021, we conducted business inserving multiple markets, in four languages, mainly across Europe, Asia, Australia, and North America. On June 30, 2021,America using the Company transferred majority ownership of its eFC business to eFC's management and retained a 40% common share interest. As a result, subsequenteFinancialCareers ("eFC") name. Subsequent to June 30, 2021, the Company'sour operations are conducted within the United States. Accordingly, the Company'sAs a result, our current operations are not subject to foreign exchange risk is limited to the value of its investments in entities with foreign operations, which are recorded as investments on the Condensed Consolidated Balance sheets at $3.6 million as of September 30, 2021. The exchange rate risk is primarily related to exchange rate fluctuations between the British Pound Sterling and the United States dollar and the translation of these. We currently do not hedge currency risk.
PriorThe Company's investment in eFC, as described in note 7 to June 30, 2021, the condensed consolidated financial statements, which is recorded under the equity method of our non-United States subsidiaries were translatedaccounting, subjects the Company to foreign exchange risk because the functional currency of eFC is the British Pound Sterling. Accordingly, the Company must translate its share of eFC's net income into United States dollars using then-current exchange rates, with gains or losses included in the cumulative translation adjustment account, whichdollars. The Company's share of eFC's net income is a component of stockholders’ equity. As of September 30, 2021 our cumulative translation adjustment was zero.
Certain of our investments have significant operations in the United Kingdom and maynot expected to be negatively impacted by the effects of Brexit. The global markets and currencies have been adversely impacted by Brexit, including fluctuations in the value of the British Pound Sterling as compared to the United States dollar, which may experience declines in the future. Volatility in exchange rates may occur as the UK negotiates its exit from the EU. In the longer term, any impact from Brexit on the Company, including its impact on the Company's equity investments, will depend, in part, on the outcome of tariff, trade, regulatory and other negotiations. Although it is unknown what the result of those negotiations will be, it is possible that new terms may adversely affect our operations and financial results. In addition, trade talks or pacts between the United States and other nations could adversely affect our operations and financial results.significant.
Interest Rate Risk
We have interest rate risk primarily related to borrowings under our Credit Agreement. Borrowings under our Credit Agreement bear interest, at our option, at a LIBORSOFR rate, RFR rate or base rate plus a margin. The margin ranges from 1.75%2.00% to 2.50%2.75% on the LIBORSOFR and RFR loans and 0.75%1.00% to 1.50%1.75% on the base rate loans, as determined by our most recent consolidated leverage ratio. As of SeptemberJune 30, 2021,2022, we had outstanding borrowings of $18.0$30.0 million under our Credit Agreement. If interest rates increased 1.0%, interest expense in 20212022 on our current borrowings would increase by approximately $0.1$0.2 million.
LIBOR is the subject of recent national, international and other regulatory guidance and reform. These reforms and other pressure may cause LIBOR to disappear entirely or to perform differently than in the past. It is expected that certain banks will stop reporting information used to set LIBOR at the end of 2021 when their reporting obligations cease. This would effectively end the usefulness of LIBOR and may end its publication. The consequences of these developments cannot be entirely predicted but, as noted above, could impact the interest rates of LIBOR loans. If LIBOR is no longer widely available, the Company will pursue alternative interest rate calculations under the Credit Agreement. The Company is evaluating the expected impact of this change on its consolidated financial statements.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We have established a system of controls and procedures designed to ensure that information required to be disclosed in our periodic reports filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified by the Exchange Act and in the rules and forms of the SEC. These disclosure controls and procedures have been evaluated under the direction of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) as of SeptemberJune 30, 2021.2022. Based on such evaluations, our CEO and CFO have concluded that the disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified by the SEC, and that such information is accumulated and communicated to management, including the CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Controls
No change in our internal control over financial reporting (as defined in Rules 13a-15(f) under the Exchange Act) occurred during the quarter ended SeptemberJune 30, 20212022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II
Item 1. Legal Proceedings
From time to time we may be involved in disputes or litigation relating to claims arising out of our operations. Except as noted in Part 1, Item 1 of this form 10-Q, we are currently not a party to any material pending legal proceedings.
Item 1A. Risk Factors
We have disclosed under the heading “Risk Factors” in our Annual Report on Form 10-K the risk factors which materially affect our business, financial condition or results of operations. As of November 10, 2021,August 3, 2022, there have been no material changes from the risk factors previously disclosed. You should carefully consider the risk factors set forth in the Annual Report on Form 10-K and the other information set forth elsewhere in this Quarterly Report on Form 10-Q. You should be aware that these risk factors and other information may not describe every risk facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Repurchases of Equity Securities
Stock Repurchase Plans—Our Board approved a stock repurchase program that permits the Company to repurchase our common stock. Management has discretion in determining the conditions under which shares may be purchased from time to time. The following table summarizes the stock repurchase plans approved by the Board:
| | | | | | | | | | | | | | | | | |
| May 2019 to May 2020 | | May 2020 to May 2021(1) | | Feb 2021 to Jun 2022(2) | | Feb 2022 to Feb 2023(3) |
Approval Date | April 2019 | | May 2020 | | February 2021 | | February 2022 |
Authorized Repurchase Amount of Common Stock | $7 million | | $5 million | | $20 million | | $15 million |
(1) During the first quarter of 2021, the Company completed its purchases under the plan, which consisted of 2.2 million shares for $5.0 million, effectively ending the plan prior to its original expiration date. |
(2) During the second quarter of 2021, the Company amended its $8 million stock repurchase program approved in February 2021 and allowed for the purchase of an additional $12.0 million of our common stock through June 2022, bringing total authorized purchases under the plan to $20.0 million. During the first quarter of 2022, the Company completed its purchases under the plan, which consisted of approximately 4.4 million shares for $20 million, effectively ending the plan prior to its original expiration date. |
(3) On February 15, 2022, the Company announced that its Board of Directors approved a new stock repurchase program that permits the purchase of up to $15 million of the Company's common stock through February 2023. |
During the quarter ended SeptemberJune 30, 2021,2022, purchases of the Company's common stock pursuant to the Stock Repurchase Plan were as follows:
| | | | | | | | | | | | | | |
Period | (a) Total Number of Shares Purchased (1) | (b) Average Price Paid per Share (2) | (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | (d) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs |
July 1 through July 31, 2021 | 1,087,080 | | $ | 3.46 | | 1,087,080 | | $ | 14,044,460 | |
August 1 through August 31, 2021 | 393,387 | | $ | 3.89 | | 393,387 | | $ | 12,514,950 | |
September 1 through September 30, 2021 | 343,118 | | $ | 4.38 | | 343,118 | | $ | 11,012,757 | |
Total | 1,823,585 | | $ | 3.72 | | 1,823,585 | | |
| | | | | | | | | | | | | | |
Period | (a) Total Number of Shares Purchased (1) | (b) Average Price Paid per Share (2) | (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (3) | (d) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs |
April 1 through April 30, 2022 | 261,220 | | $ | 5.77 | | 196,839 | | $ | 12,004,937 | |
May 1 through May 31, 2022 | 200,662 | | $ | 6.27 | | 200,662 | | $ | 10,746,717 | |
June 1 through June 30, 2022 | 227,568 | | $ | 5.79 | | 227,568 | | $ | 9,428,219 | |
Total | 689,450 | | | 625,069 | | |
(1) NoTotal number of shares purchased includes shares purchased under our stock repurchase plan described above and shares purchased pursuant to the 2012 Omnibus Equity Award Plan related to shares withheld to satisfy employee income tax obligations upon the vesting of our commonrestricted stock were purchased other than through a publicly announced plan or program.awards.
(2) Average price paid per share includes costs associated with the repurchases.
(3) Total number of shares purchased as part of publicly announced plans or programs includes shares purchased under our stock repurchase plan described above.
Item 5. Other Information
None.
Item 6. Exhibits | | | | | | | | |
10.1* | | Amendment No. 1 dated as of June 22, 2021 to the SecondThird Amended and Restated Credit Agreement dated as of November 14, 2018,June 10, 2022, among DHI Group, Inc., Dice Inc. and Dice Career Solutions, Inc., as Borrowers, the various lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, Bank of America, N.A. and BMO Harris Bank N.A., as co-syndication agents and TD Bank, N.A. and Citizens Bank, N.A., as documentation agent.co-documentation agents. |
31.1* | | |
31.2* | | |
32.1** | | |
32.2** | | |
101.INS | | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
101.SCH | | XBRL Taxonomy Extension Schema Document. |
101.CAL | | XBRL Taxonomy Extension Calculation Linkbase Document. |
101.DEF | | XBRL Taxonomy Extension Definition Linkbase Document. |
101.LAB | | XBRL Taxonomy Extension Label Linkbase Document. |
101.PRE | | XBRL Taxonomy Extension Presentation Linkbase Document. |
104 | | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
_______________ | | | | | | | | |
* | | Filed herewith. |
** | | Furnished herewith |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| | | | | | | | | | | | | | |
Date: | November 10, 2021August 3, 2022 | | DHI Group, Inc. |
| | | Registrant |
| | | | |
| | | By: | /S/ Art Zeile |
| | | | Art Zeile President and Chief Executive Officer |
| | | | (Principal Executive Officer) |
| | | | |
| | | | /S/ Kevin Bostick |
| | | | Kevin Bostick Chief Financial Officer |
| | | | (Principal Financial Officer) |