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DHI Group Reports First Quarter 2021 Financial Results

CENTENNIAL, Colo., May 5, 2021 /PRNewswire/ -- DHI Group, Inc. (NYSE:DHX) ("DHI" or the "Company") today announced the following financial results for the first quarter ended March 31, 2021.

First Quarter 2021 Financial Results

  • Total revenues were $32.6 million, down 2% sequentially and down 11% year over year.
  • Dice revenues were $19.1 million, down 2% sequentially and down 15% year over year.
  • ClearanceJobs revenues were $7.6 million, equal to the fourth quarter of 2020 and up 11% year over year.
  • eFinancialCareers revenues were $6.0 million, down 4% sequentially and down 18% year over year (down 22% excluding impact of foreign exchange).
  • Net income was $2.7 million, which was positively impacted by $1.7 million comprised of an unrealized gain on an equity security and discrete tax items, partially offset by disposition and other charges, net of tax, compared to a net loss of $6.6 million in the year ago quarter, which was negatively impacted by $8.3 million in impairment and other charges, net of tax, and discrete tax items.
  • Earnings per diluted share was $0.05, compared to a loss of $0.13 in the year ago quarter. Adjusted earnings per diluted share1 for the quarter was $0.02 vs. $0.03 last year.
  • Cash flow from operations was $6.4 million, compared to $2.9 million in the year-ago quarter.
  • Adjusted EBITDA1 was $7.3 million, an Adjusted EBITDA margin1 of 22%, compared to $7.5 million and 21% in the year-ago quarter.
  • Cash was $7.3 million and net debt1 was $12.7 million at quarter end.

1 See "Notes Regarding the Use of Non-GAAP Financial Measures" later in this press release.

Commenting on the quarter, Art Zeile, President and CEO of DHI Group, Inc., said:

"I am pleased to report another strong bookings quarter with our three new business teams handily exceeding their average monthly booking levels from a year ago. This includes our Dice Commercial Accounts team, which represents our largest opportunity for revenue growth. Additionally, our Dice revenue renewal rate continued to strengthen in the first quarter and came in at 82 percent, up from 75 percent in the prior quarter. With enterprises focusing on tech-enabling their business models, Dice is poised to benefit from the increase in hiring. Our confidence in the economic expansion underway and our sales teams' strong performance over the past two quarters, led us to hire more sales reps in the first quarter. We also initiated a new client branding campaign in trial across multiple channels with the tagline 'Where Tech Connects'. Now that we've created the industry-leading online marketplace for matching companies with the highest quality tech professionals, we believe we can capitalize on the millions of new technologist jobs expected over the next five years."

Product Highlights

Below are the key product highlights delivered during the first quarter:

Dice

  • Dice Marketplace launched during the first quarter and is a comprehensive and flexible platform through which recruiters and candidates can rapidly and confidently search, match and communicate in real-time. The three major components of the marketplace are recruiter profiles, an enhanced candidate profile that focuses deeply on exposing tech skills, and in-platform instant messaging to make career connections. To date, over 60,000 messages have been sent between recruiters and candidates. Roughly one-third of the messages have been initiated by candidates, showing great engagement by both sides of the Dice community.

ClearanceJobs

  • CJ Meetings solves one of the most challenging aspects of the recruiter workflow: aligning schedules. This past quarter, CJ released CJ Meeting Integration, which allows recruiters and candidates to synchronize their Google or Outlook calendars to efficiently schedule telephone calls, video calls, or in-platform chats. Recruiters need only spend a few minutes setting their desired calendar parameters and send a scheduling link to candidates. No other competitor has this capability.

  • CJ Video is the ability to deliver video messaging for both recruiters and candidates. The new video capability can also be used in profile status updates, group broadcasts and company profiles. Videos are hosted and streamed in-platform from CJ.

Business Outlook

"We expect the strong bookings performance we've had over the past two quarters to manifest itself in year over year total revenue growth beginning in the second half of 2021," commented Kevin Bostick, CFO of DHI Group, Inc. "We will continue to operate the business to Adjusted EBITDA margins1 in the 20% range as we invest in our long-term revenue growth plan."                   

1 See "Notes Regarding the Use of Non-GAAP Financial Measures" later in this press release.                             

Conference Call Information

Art Zeile, President and Chief Executive Officer, and Kevin Bostick, Chief Financial Officer, will host a conference call today, May 5, 2021, at 5:00 p.m. Eastern Time to discuss the Company's financial results and recent developments.

The call can be accessed by dialing 844-890-1790 (in the U.S.) or +1-412-380-7407 (outside the U.S.). Please ask to be placed into the DHI Group, Inc. call. A live webcast of the call will simultaneously be available through the Investor Relations section of the Company's website, https://www.dhigroupinc.com, and available for replay after the call ends. 

About DHI Group, Inc.

DHI Group, Inc (NYSE: DHX) is a provider of software products, online tools and services to deliver career marketplaces to candidates and employers globally. DHI's three brands—Dice, ClearanceJobs and eFinancialCareers— enable recruiters and hiring managers to efficiently search, match and connect with highly skilled technologists in specialized fields, particularly technology, those with active government security clearances and in financial services. Professionals find ideal employment opportunities, relevant job advice and personalized data to best manage their whole technologist life. For 30 years, we have leveraged the latest technology to foster career connections in multiple markets including North America, Europe, the Middle East and the Asia Pacific region. Find out more at www.dhigroupinc.com.

Investor Contact
Todd Kehrli or Jim Byers
MKR Investor Relations, Inc.
212-448-4181
ir@dhigroupinc.com

Media Contact
Rachel Ceccarelli
VP of Engagement
212-448-8288
media@dhigroupinc.com

Notes Regarding the Use of Non-GAAP Financial Measures

The Company has provided certain non-GAAP financial information as additional information for its operating results. These measures are not in accordance with, or an alternative for, measures in accordance with generally accepted accounting principles in the United States ("GAAP") and may be different from similarly titled non-GAAP measures reported by other companies. The Company believes that its presentation of non-GAAP measures, such as Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Diluted Earnings Per Share, and Net Debt provides useful information to management and investors regarding certain financial and business trends relating to its financial condition and results of operations. In addition, the Company's management uses these measures for reviewing the financial results of the Company and for budgeting and planning purposes. The non-GAAP measures apply to consolidated results or other measures as shown within this document. The Company has provided required reconciliations to the most comparable GAAP measures elsewhere in the document.

Adjusted Diluted Earnings Per Share

Adjusted Diluted Earnings Per Share is a non-GAAP metric and performance measure that is useful to investors and management in understanding our ongoing operations and in the analysis of operating trends. Adjusted Diluted Earnings Per Share is computed as diluted earnings per share plus or minus the impacts of certain non-cash and other items, including non-cash impairments, costs related to reorganizing the Company, including severance and related costs, gains or losses on the sale of businesses, disposition costs, unrealized gains on equity securities, and discrete tax items.

Adjusted Diluted Earnings Per Share is not a measurement of our financial performance under GAAP and should not be considered as an alternative to diluted earnings per share, net income, or any other performance measures derived in accordance with GAAP as a measure of our profitability.

Adjusted EBITDA and Adjusted EBITDA Margin

Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP metrics used by management to measure operating performance. Management uses Adjusted EBITDA as a performance measure for internal monitoring and planning, including preparation of annual budgets, analyzing investment decisions and evaluating profitability and performance comparisons between us and our competitors. The Company also uses this measure to calculate amounts of performance based compensation under the senior management incentive bonus program. Adjusted EBITDA represents net income plus (to the extent deducted in calculating such net income) interest expense, income tax expense, depreciation and amortization, non-cash stock based compensation, losses resulting from certain dispositions outside the ordinary course of business including prior negative operating results of those divested businesses, certain writeoffs in connection with indebtedness, impairment charges with respect to long-lived assets, expenses incurred in connection with an equity offering or any other offering of securities by the Company, extraordinary or non-recurring non-cash expenses or losses, transaction costs in connection with the credit agreement, deferred revenues written off in connection with acquisition purchase accounting adjustments, writeoff of non-cash stock based compensation expense, severance and retention costs related to dispositions and reorganizations of the Company, losses related to legal claims and fees that are unusual in nature or infrequent, minus (to the extent included in calculating such net income) non-cash income or gains, interest income, business interruption insurance proceeds, and any income or gain resulting from certain dispositions outside the ordinary course of business, including prior positive operating results of those divested businesses, and gains related to legal claims that are unusual in nature or infrequent.

We also consider Adjusted EBITDA, as defined above, to be an important indicator to investors because it provides information related to our ability to provide cash flows to meet future debt service, capital expenditures and working capital requirements and to fund future growth. We present Adjusted EBITDA as a supplemental performance measure because we believe that this measure provides our board of directors, management and investors with additional information to measure our performance, provide comparisons from period to period and company to company by excluding potential differences caused by variations in capital structures (affecting interest expense) and tax positions (such as the impact on periods or companies of changes in effective tax rates or net operating losses), and to estimate our value.  

Adjusted EBITDA Margin is computed as Adjusted EBITDA divided by Revenues.

Adjusted EBITDA and Adjusted EBITDA Margin are not measurements of our financial performance under GAAP and should not be considered as an alternative to revenue, net income, operating income, cash provided by operating activities, or any other performance measures derived in accordance with GAAP as a measure of our profitability.

Net Debt

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

Forward-Looking Statements

This press release and oral statements made from time to time by our representatives contain forward-looking statements. You should not place undue reliance on those statements because they are subject to numerous uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. Forward-looking statements include, 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 impact of the coronavirus COVID-19 outbreak on our operations and financial results, the uncertainty in respect of the regulation of data protection and data privacy, failure to attract qualified professionals to our websites or grow the number of qualified professionals who use our websites, failure to successfully identify or integrate acquisitions, U.S. and foreign government regulation of the Internet and taxation, our ability to borrow funds under our revolving credit facility or refinance our indebtedness and restrictions on our current and future operations under such indebtedness. These factors and others are discussed in more detail in the Company's filings with the Securities and Exchange Commission, all of which are available on the Investors page of our website at www.dhigroupinc.com, including the Company's most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings under the headings "Risk Factors," "Forward-Looking Statements" and "Management's Discussion and Analysis of Financial Condition and Results of Operations." You should keep in mind that any forward-looking statement made by the Company or its representatives herein, or elsewhere, speaks only as of the date on which it is made. New risks and uncertainties come up from time to time, and it is impossible to predict these events or how they may affect us. We have no obligation to update any forward-looking statements after the date hereof, except as required by federal securities laws.

DHI GROUP, INC.

 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

     (in thousands, except per share amounts)












Three Months Ended
March 31,





2021


2020








Revenues

$

32,633



$

36,633









Operating expenses:




Cost of revenues

4,310



4,176


Product development

4,184



4,165


Sales and marketing

12,045



14,538


General and administrative

7,500



8,551


Depreciation

4,096



3,253


Impairment of intangible assets



7,200




Total operating expenses

32,135



41,883


Operating income (loss)

498



(5,250)


Interest expense and other

(193)



(183)


Impairment of equity investment



(2,002)


Unrealized gain on equity security

2,513




Income (loss) before income taxes

2,818



(7,435)


Income tax expense (benefit)

147



(885)


Net income (loss)

$

2,671



$

(6,550)









Basic earnings (loss) per share

$

0.06



$

(0.13)


Diluted earnings (loss) per share

$

0.05



$

(0.13)









Weighted average basic shares outstanding

46,993



49,134


Weighted average diluted shares outstanding

48,606



49,134


 

DHI GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)










Three Months Ended
March 31,




2021


2020

Cash flows from (used in) operating activities:




    Net income (loss)

$

2,671



$

(6,550)


Adjustments to reconcile net income to net cash flows from (used in) operating activities:




    Depreciation

4,096



3,253


    Deferred income taxes

(304)



(1,262)


    Amortization of deferred financing costs

37



37


    Stock based compensation

1,758



1,796


    Impairment of intangible assets



7,200


    Impairment of equity investment



2,002


    Unrealized gain on equity security

(2,513)




    Change in accrual for unrecognized tax benefits

59



(81)


Changes in operating assets and liabilities:




    Accounts receivable

(3,345)



(2,111)


    Prepaid expenses and other assets

629



42


    Capitalized contract costs

(794)



859


    Accounts payable and accrued expenses

(6,270)



(6,768)


    Income taxes receivable/payable

1,127



154


    Deferred revenue

9,351



4,382


    Other, net

(78)



(20)


Net cash flows from operating activities

6,424



2,933


Cash flows used in investing activities:




    Purchases of fixed assets

(3,703)



(4,288)


Net cash flows used in investing activities

(3,703)



(4,288)


Cash flows from (used in) financing activities:




    Payments on long-term debt

(5,000)



(2,000)


    Proceeds from long-term debt

5,000



29,000


    Payments under stock repurchase plan

(1,669)



(1,643)


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

(1,343)



(1,348)


Net cash flows from (used in) financing activities

(3,012)



24,009


Effect of exchange rate changes

(30)



(212)


Net change in cash and cash equivalents for the period

(321)



22,442


Cash and cash equivalents, beginning of period

7,640



5,381


Cash and cash equivalents, end of period

$

7,319



$

27,823


 

DHI GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands)







ASSETS

March 31, 2021


December 31, 2020

Current assets





Cash and cash equivalents

$

7,319



$

7,640



Accounts receivable, net

23,645



20,298



Income taxes receivable

595



1,044



Equity security

2,513





Prepaid and other current assets

3,768



4,503




Total current assets

37,840



33,485


Fixed assets, net

24,114



24,544


Acquired intangible assets

23,800



23,800


Capitalized contract costs

8,519



7,734


Goodwill

133,684



133,353


Deferred income taxes



19


Operating lease right-of-use assets

15,600



16,405


Other assets

1,750



1,647




Total assets

$

245,307



$

240,987














LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities





Accounts payable and accrued expenses

$

13,007



$

19,426



Operating lease liabilities

3,411



3,410



Deferred revenue

51,762



42,426



Income taxes payable

799



123




Total current liabilities

68,979



65,385


Long-term debt, net

19,619



19,583


Deferred income taxes

9,613



9,936


Deferred revenue

1,038



1,068


Accrual for unrecognized tax benefits

1,414



1,347


Operating lease liabilities

12,889



13,704


Other long-term liabilities

2,325



2,394




Total liabilities

115,877



113,417




Total stockholders' equity

129,430



127,570




Total liabilities and stockholders' equity

$

245,307



$

240,987








Supplemental Information and Non-GAAP Reconciliations

On the pages that follow, the Company has provided certain supplemental information that we believe will assist the reader in assessing our business operations and performance, including certain non-GAAP financial information and required reconciliations to the most comparable GAAP measure. A statement of operations and statement of cash flows for the three month period ended March 31, 2021 and 2020 and balance sheets as of March 31, 2021 and December 31, 2020 are provided elsewhere in this press release.   

DHI GROUP, INC.

NON-GAAP SUPPLEMENTAL DATA

(Unaudited)

(in thousands)




Revenue



Q1 2021


Q1 2020


Change


$ Fx Impact1

   Dice


$

19,051



$

22,485



(15)%


$


   ClearanceJobs


7,625



6,900



11%



   eFinancialCareers


5,957



7,248



(18)%


328


Total Revenues


$

32,633



$

36,633



(11)%


$

328











Net Income (loss)2


$

2,671



$

(6,550)






Diluted earnings (loss) per share


$

0.05



$

(0.13)






Adjusted diluted earnings per share


$

0.02



$

0.03






Adjusted EBITDA


$

7,269



$

7,517






Adjusted EBITDA Margin



22%




21%
















(1) Foreign exchange impact is calculated by determining the increase (decrease) in current period revenues where current period revenues are translated using prior period exchange rates.

(2) For the three months ended March 31, 2021, the Company recorded an unrealized gain on an equity security and disposition, severance and related costs, all net of tax, and discrete tax items that positively impacted net income $1.7 million. For the three months ended March 31, 2020, the Company recorded impairment and other charges, net of tax, and discrete tax items that negatively impacted net income $8.3 million.

 

DHI GROUP, INC.

NON-GAAP SUPPLEMENTAL DATA (CONTINUED)

(Unaudited)

(dollars in thousands, except earnings per share data)









Reconciliation of Diluted Earnings (Loss) per Share to Adjusted Diluted Earnings per Share:

Three Months Ended March 31,

2021


2020

Diluted earnings (loss) per share1

$

0.05



$

(0.13)


Impairment of intangible assets and equity investment, net of tax



0.15


Disposition, severance, and related costs, net of tax

0.01



0.01


Unrealized gain on equity security

(0.04)




Discrete tax items

(0.01)




Other2

0.01




Adjusted diluted earnings per share3

$

0.02



$

0.03







(1) For the three month periods ended March 31, 2021 and 2020, diluted earnings per share utilized weighted average shares of 48.6 million and 49.1 million, respectively.

(2) Adjusts, as applicable, for the share impact of common stock equivalents, where dilutive.

(3) For the three month periods ended March 31, 2021 and 2020, adjusted diluted earnings per share utilized weighted average shares of 48.6 million and 50.7 million, respectively.

 

Reconciliation of Debt to Net Debt:


March 31, 2021


December 31, 2020

Long term debt, net



$

19,619



$

19,583


Add: Deferred financing costs, net



381



417


Principal debt outstanding



20,000



20,000


Less: Cash and cash equivalents



7,319



7,640


Net Debt



$

12,681



$

12,360








 

Summary of Deferred Revenue and Backlog:


March 31, 2021


December 31, 2020

Deferred Revenue



$

52,800



$

43,494


Contractual commitments not invoiced



31,243



32,830


Backlog4



$

84,043



$

76,324









(4) Backlog consists of deferred revenue plus customer contractual commitments not invoiced representing the value of future services to be rendered under committed contracts.

 

DHI GROUP, INC.

NON-GAAP SUPPLEMENTAL DATA (CONTINUED)

(Unaudited)

(dollars in thousands, except per customer data)













For the three months ended March 31,



2021


2020

Reconciliation of Net Income (loss) to Adjusted EBITDA:




Net income (loss)

$

2,671



$

(6,550)



Interest expense

191



179



Income tax expense (benefit)

147



(885)



Depreciation

4,096



3,253



Non-cash stock based compensation

1,758



1,796



Impairment of intangible assets



7,200



Impairment of equity investment



2,002



Unrealized gain on equity security

(2,513)





Disposition costs

602





Severance and related costs

315



518



Other

2



4


Adjusted EBITDA

$

7,269



$

7,517






Reconciliation of Operating Cash Flows to Adjusted EBITDA:




Net cash provided by operating activities

$

6,424



$

2,933



Interest expense

191



179



Amortization of deferred financing costs

(37)



(37)



Income tax expense (benefit)

147



(885)



Deferred income taxes

304



1,262



Change in accrual for unrecognized tax benefits

(59)



81



Change in accounts receivable

3,345



2,111



Change in deferred revenue

(9,351)



(4,382)



Disposition costs

602





Severance and related costs

315



518



Changes in working capital and other

5,388



5,737


Adjusted EBITDA

$

7,269



$

7,517







Dice Recruitment Package Customers




Beginning of period

5,150



6,000


End of period

5,200



5,850







Average for the period (1)

5,050



5,900







Dice Average Monthly Revenue per Recruitment Package Customer (2)

$

1,128



$

1,153








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

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

 

Cision View original content:http://www.prnewswire.com/news-releases/dhi-group-reports-first-quarter-2021-financial-results-301284767.html

SOURCE DHI Group, Inc.

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