What changed in this filing

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Item 1. Financial Statements

2020-08-06 compared with 2020-05-06 · 167 added, 112 removed, 477 unchanged (37% of the section changed)

49 unchanged sentences

(in thousands, except per share amounts)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2020 2019 2020 2019

Revenues $ 33,784 $ 37,359 $ 70,417 $ 74,479

8 unchanged sentences

Total operating expenses 31,331 33,057 73,214 66,585

Loss on sale of business (Note 4) — ( 537 ) — ( 537 )

Operating income (loss) 2,453 3,765 ( 2,797 ) 7,357

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(in thousands)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2020 2019 2020 2019

Net income (loss) $ 1,862 $ 3,061 $ ( 4,688 ) $ 4,649

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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

Restricted stock issued 393 4 4

Restricted stock forfeited or withheld to satisfy tax obligations ( 118 ) ( 2 ) 65 ( 162 ) ( 164 )

Performance-Based Restricted Stock Units forfeited or withheld to satisfy tax obligations ( 5 ) — 5 ( 13 ) ( 13 )

Purchase of treasury stock under stock repurchase plan 1,342 ( 3,433 ) ( 3,433 )

Balance at June 30, 2020 — $ — 71,079 $ 712 $ 230,638 18,144 $ ( 128,065 ) $ 79,298 $ ( 33,318 ) $ 149,265

Preferred Stock Common Stock Additional

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Balance at March 31, 2019 — $ — 69,535 $ 697 $ 222,981 14,590 $ ( 118,066 ) $ 73,023 $ ( 29,820 ) $ 148,815

Net income 3,061 3,061

Other comprehensive income ( 1,677 ) ( 1,677 )

Stock based compensation 1,620 1,620

Restricted stock issued 411 4 4

Restricted stock forfeited or withheld to satisfy tax obligations ( 114 ) ( 1 ) 165 ( 518 ) ( 519 )

Performance-Based Restricted Stock Units eligible to vest 60 — —

Performance-Based Restricted Stock Units forfeited ( 10 ) — —

Balance at June 30, 2019 — $ — 69,882 $ 700 $ 224,601 14,755 $ ( 118,584 ) $ 76,084 $ ( 31,497 ) $ 151,304

See accompanying notes to the condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from (used in) operating activities:

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Change in accrual for unrecognized tax benefits ( 18 ) 210

Gain on sale of equity investment ( 200 ) —

Loss on sale of business — 537

Changes in operating assets and liabilities:

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Net cash flows from operating activities 10,020 14,375

Cash flows used in investing activities:

Cash flows from (used) in investing activities:

Net cash received from sale of businesses — 2,683

Net cash received from sale of equity investment 200 —

Purchases of fixed assets ( 8,405 ) ( 6,286 )

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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, 2019 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 (the “Annual Report on Form 10-K”).

Operating results for the three month period ended March 31, 2020 are not necessarily indicative of the results to be achieved for the full year.

Operating results for the six month period ended June 30, 2020 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.

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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 three month period ended March 31, 2020, except as disclosed in Notes 6 and 8 relating to impairments to equity method investments and intangible assets.

There have been no significant changes in the Company’s assumptions regarding critical accounting estimates during the six month period ended June 30, 2020, except as disclosed in Notes 6 and 8 relating to impairments to equity method investments and intangible assets.

NEW ACCOUNTING STANDARDS

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This standard removes, modifies, and adds certain disclosure requirements for fair value measurements.

This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted.

This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019.

The Company adopted the new standard on January 1, 2020.

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The new standard requires entities that are customers in cloud computing arrangements to defer implementation costs if they would be capitalized by the entity in software licensing arrangements under the internal-use software guidance.

2018-15 is effective for fiscal years beginning after December 15, 2019 and interim periods within those years and early adoption is permitted.

2018-15 is effective for fiscal years beginning after December 15, 2019 and interim periods within those years.

The amendments allow either a retrospective or prospective approach to all implementation costs incurred after adoption.

The Company adopted this standard, effective January 1, 2020, under the prospective approach.

The adoption of this standard resulted in $ 0.3 million of capitalized costs, which are included in other assets on the Company's balance sheet as of March 31, 2020.

The Company adopted this standard, effective January 1, 2020, under the prospective approach, and capitalized implementation costs are included in other assets on the Company's balance sheet.

In December 2019, the FASB issued ASU No.

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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

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 Company is evaluating the expected impact of this standard on its consolidated financial statements.

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

years, and for interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted.

The Company is evaluating the expected impact of this standard on its consolidated financial statements.

REVENUE RECOGNITION

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The following table provides information about disaggregated revenue by brand and includes a reconciliation of the disaggregated revenue (in thousands):

Three Months Ended March 31, 2020

Three Months Ended June 30 Six Months Ended June 30

2020 2019 2020 2019

Dice $ 20,489 $ 23,215 $ 42,974 $ 46,361

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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 March 31, 2020 As of December 31, 2019

As of June 30, 2020 As of December 31, 2019

Receivables $ 18,119 $ 21,158

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T he Company recognized the following revenues as a result of changes in the contract liability balances in the respective periods (in thousands):

Three Months Ended

March 31, 2020 March 31, 2019

Three Months Ended Six Months Ended

June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019

Revenue recognized in the period from:

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Certain assets and liabilities are measured at fair value on a non-recurring basis.

These assets include investments (included in other assets), goodwill and intangible assets which result as acquisitions occur.

These assets include investments (included in other assets), 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.

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Accordingly, the Company recorded an impairment charge of $ 2.0 million during the first quarter of 2020.

On January 31, 2018, the Company transferred a majority ownership of the BioSpace business to BioSpace management with zero proceeds received from the transfer.

The Company retained a 20 % preferred share interest in the BioSpace business.

The fair value of the investment was estimated to be zero at the time of the transfer.

As of March 31, 2020, it was not practicable to estimate the fair value of the preferred stock investment as the shares are not traded.

The investment is recorded at cost, which is zero.

Upon a liquidation, sale or change in control of BioSpace within five years of January 31, 2018, the Company has the right to the first $ 1.0 million of proceeds or the option to convert its 20 % preferred stock interest to a 20 % common stock interest.

On January 31, 2023, the 20 % preferred share interest will convert to a 20 % common share interest.

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.

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.

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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 March 31, 2020.

As accumulated earnings of the VIE have been approximately zero since the date of transfer, the investment is recorded at zero at June 30, 2020.

On January 1, 2019, the Company adopted ASU No.

2016-02, Leases (Topic 842) , applying the modified retrospective transition.

We have operating leases for corporate office space and certain equipment.

Our 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.

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.

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We do not have any lease agreements with related parties.

Operating lease ROU assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term.

Based on the present value of the lease payments for the remaining lease term of the Company's existing leases, the Company recorded operating ROU assets of approximately $ 17.2 million and operating lease liabilities of $ 18.0 million as of January 1, 2019.

Operating lease right-of-use "ROU" assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term.

Operating ROU assets and liabilities commencing after January 1, 2019 are recognized at commencement date based on the present value of lease payments over the lease term.

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The components of lease cost were as follows (in thousands):

For the Three Months Ended March 31,

For the Three Months Ended June 30, For the Six Months Ended June 30,

2020 2019 2020 2019

Operating lease cost *

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Supplemental cash flow information related to leases was as follows (in thousands):

For the Three Months Ended March 31,

For the Six Months Ended June 30,

Cash paid for amounts included in measurement of lease liabilities:

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Supplemental balance sheet information related to leases was as follows (in thousands, except lease term and discount):

March 31, 2020 December 31, 2019

June 30, 2020 December 31, 2019

Operating lease right-of-use-assets $ 17,592 $ 19,712

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Operating leases 4.01 % 4.00 %

As of March 31, 2020, future operating lease payments were as follows (in thousands):

As of June 30, 2020, future operating lease payments were as follows (in thousands):

Operating Leases

April 1, 2020 through December 31, 2020 $ 3,149

July 1, 2020 through December 31, 2020 $ 1,950

2025 and Thereafter 4,399

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Total $ 18,203

As of March 31, 2020 the Company has no additional operating or finance leases that have not yet commenced.

As of June 30, 2020 the Company has no additional operating or finance leases that have not yet commenced.

DHI GROUP, INC.

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ACQUIRED INTANGIBLE ASSETS, NET

As of March 31, 2020 and December 31, 2019, the Company had an indefinite-lived acquired intangible asset of $ 31.8 million and $ 39.0 million, respectively, related to the Dice trademark and brand name.

As of June 30, 2020 and December 31, 2019, the Company had an indefinite-lived acquired intangible asset of $ 31.8 million and $ 39.0 million, respectively, related to the Dice trademarks and brand name.

The impairment test performed as of October 1, 2019 resulted in the fair value of the Dice trademarks and brand name exceeding the carrying value by 26 %.

During the first quarter of 2020, because of the impacts of the COVID-19 pandemic and its potential impact on future earnings and cash flows for the Dice trademarks and brand name, the Company performed an interim impairment analysis.

As a result of the analysis, the Company recorded an impairment charge of $ 7.2 million.

No impairment was recorded during the three month period ended March 31, 2019.

As a result of the analysis, the Company recorded an impairment charge of $ 7.2 million during the first quarter of 2020.

Revenue attributable to the Dice trademarks and brand name exceeded the projections used in the March 31, 2020 analysis by 1% and operating income margin for the Company exceeded the same projections by 3 percentage points.

Additionally, the Company believes those projections beyond June 30, 2020 remain the Company's best estimate.

As a result, no impairment was recorded during the three month period ended June 30, 2020 nor during the six month period ended June 30, 2019.

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.

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If the carrying value exceeds the fair value, an impairment loss is recorded.

Revenue attributable to the Dice trademarks and brand name declined 3 % during the quarter ended March 31, 2020 compared to the quarter ended March 31, 2019 and due to the COVID-19 pandemic, expectations for Dice revenue growth have been delayed.

Revenues related to the Dice trademarks and brand name are expected to decline for the year ending December 31, 2020 compared to the year ended December 31, 2019 and then increasing to rates approximating industry growth projections.

The projections utilized in the March 31, 2020 analysis included a decline in revenues attributable to the Dice trademark and brand name for the year ending December 31, 2020 compared to the year ended December 31, 2019 and then increasing to 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.

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If future cash flows attributable to the Dice trademarks and brand name are not achieved, the Company could realize an impairment in a future period.

The Company utilized a relief from royalty rate method to value the Dice trademarks and brand name using a royalty rate of 5.0 % based on comparable industry studies and a discount rate of 17.5 % compared to a royalty rate of 6.0 % and a discount rate of 14.2 % at October 1, 2019.

In the March 31, 2020 analysis, the Company utilized a relief from royalty rate method to value the Dice trademarks and brand name using a royalty rate of 5.0 % based on comparable industry studies and a discount rate of 17.5 % compared to a royalty rate of 6.0 % and a discount rate of 14.2 % at October 1, 2019.

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.

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If projections are not achieved, the Company could realize an impairment in the foreseeable future.

The following table shows the carrying amount of goodwill as of December 31, 2019 and March 31, 2020 and the changes in goodwill for the three month period ended March 31, 2020 (in thousands):

The following table shows the carrying amount of goodwill as of December 31, 2019 and June 30, 2020 and the changes in goodwill for the six month period ended June 30, 2020 (in thousands):

Goodwill at December 31, 2019 $ 156,059

Foreign currency translation adjustment ( 3,977 )

Goodwill at March 31, 2020 $ 152,305

The amount of goodwill as of March 31, 2020 allocated to the Tech-focused reporting unit was $ 152.3 million.

Goodwill at June 30, 2020 $ 152,082

The amount of goodwill as of June 30, 2020 allocated to the Tech-focused reporting unit was $ 152.1 million.

The annual impairment test for the Tech-focused reporting unit, which was performed as of October 1, 2019, resulted in the fair value of the reporting unit exceeding the carrying value by 37 %.

During the first quarter of 2020, because of the impacts of the COVID-19 pandemic and its potential impact on future earnings and cash flows for the reporting unit, the Company performed an interim impairment analysis of goodwill.

The result of the analysis indicated that the fair value of the Tech-focused reporting

During the first quarter of 2020, because of the impacts of the

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

unit was not substantially in excess of the carrying value as of March 31, 2020.

The percentage by which the estimated fair value exceeded carrying value for the Tech-focused reporting unit was less than 1%.

COVID-19 pandemic and its potential impact on future earnings and cash flows for the reporting unit, the Company performed an interim impairment analysis of goodwill.

The results of the analysis indicated that the fair value of the Tech-focused reporting unit was not substantially in excess of the carrying value as of March 31, 2020.

The percentage by which the estimated fair value exceeded carrying value for the Tech-focused reporting unit at March 31, 2020 was less than 1%.

Revenues for the Tech-focused reporting unit during the second quarter of 2020 exceeded the projections used in the March 31, 2020 analysis by 3% and operating income margin for the Company exceeded the same projections by 3 percentage points.

Additionally, the Company believes those projections beyond June 30, 2020 remain the Company's best estimate.

As a result, no impairment test was performed during the second quarter of 2020.

Revenue projections for the Tech-focused reporting unit declined compared to the projections used in the October 1, 2019 analysis due to the COVID-19 pandemic.

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Determining the fair value of a reporting unit is judgmental in nature and requires the use of estimates and key assumptions, particularly assumed discount rates and projections of future operating results.

The discount rate applied for the Tech-focused reporting unit was 16.5 %, compared to 13.2 % at October 1, 2019.

The discount rate applied for the Tech-focused reporting unit in the March 31, 2020 analysis was 16.5 %, compared to 13.2 % at October 1, 2019.

An increase to the discount rate applied or reductions to future projected operating results could result in future impairment of the Tech-focused reporting unit’s goodwill.

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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 fee of 0.30 % at March 31, 2020 and 2019 on any unused capacity under the revolving loan facility.

The Company incurs a commitment fee ranging from 0.30 % to 0.45 % on any unused capacity under the revolving loan facility, determined by the Company’s most recent consolidated leverage ratio.

The facility may be prepaid at any time without penalty.

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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 March 31, 2020, the Company was in compliance with all of the financial covenants under the Credit Agreement.

The obligations under the Credit Agreement are guaranteed by two of the Company’s U.S.

based wholly-owned subsidiaries and secured by substantially all of the assets of the Borrowers and the guarantors and stock pledges from certain of the Company’s foreign subsidiaries.

As of June 30, 2020, 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 amounts borrowed as of March 31, 2020 and December 31, 2019 are as follows (dollars in thousands):

The obligations under the Credit Agreement are guaranteed by two of the Company’s U.S.

based wholly-owned subsidiaries and secured by substantially all of the assets of the Borrowers and the guarantors and stock pledges from certain of the Company’s foreign subsidiaries.

The amounts borrowed as of June 30, 2020 and December 31, 2019 are as follows (dollars in thousands):

2020 December 31,

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Actual interest rates 2.19 % 3.56 %

Commitment Fee 0.35 % 0.30 %

There are no scheduled principal payments until maturity of the Credit Agreement in November 2023.

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The action was originally filed in a federal district court on July 26, 2017, but as a part of the settlement process, the action was re-filed in the Superior Court of Santa Clara County, California (Case No.

The recorded liability reflected a settlement which became final and was paid in the third quarter of 2019.

The settlement resolved all remaining claims subject to the lawsuit and included a compliance hearing, which was scheduled for April 3, 2020, but due to the COVID-19 pandemic, is expected to be rescheduled in the third quarter of 2020.

The recorded liability reflected a settlement, which was subject to a final judgment, and was paid in the third quarter of 2019.

The settlement resolved all remaining claims subject to the lawsuit, and final judgment approving the settlement was entered on July 24, 2020.

Tax Contingencies

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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

EQUITY TRANSACTIONS

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The following table summarizes the Stock Repurchase Plans approved by the Board:

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

May 2018 to May 2019 May 2019 to May 2020

Approval Date May 2018 April 2019

Authorized Repurchase Amount of Common Stock $7 million $7 million

As of March 31, 2020 the value of shares that may yet be purchased under the current plan was $ 3.3 million.

May 2018 to May 2019 May 2019 to May 2020 May 2020 to May 2021

Approval Date May 2018 April 2019 May 2020

Authorized Repurchase Amount of Common Stock $7 million $7 million $5 million

As of June 30, 2020 the value of shares that may yet be purchased under the current plan was $ 4.5 million.

Purchases of the Company's common stock pursuant to the Stock Repurchase Plans were as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2020 2019 2020 2019

Shares repurchased [1]

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[2] Average price paid per share includes costs associated with the repurchases.

There were 51,500 unsettled share repurchases as of March 31, 2020 and no unsettled share repurchases as of March 31, 2019.

In May 2020, the Board of Directors authorized the purchase of up to $5 million of the Company's common stock through May

Under the plan, management has discretion in determining the conditions under which shares may be purchased from time to time.

There were 8,905 unsettled share repurchases as of June 30, 2020 and no unsettled share repurchases as of June 30, 2019.

The Company's Board approved the retirement of 20 million shares of treasury stock during the three months ended March 31, 2019 and, as a result, the Company reduced additional paid in capital by $ 161.6 million and Common Stock by $ 0.2 million during the three months ended March 31, 2019.

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The planned divestitures included:

BioSpace (transferred majority ownership to BioSpace management on January 31, 2018), Hcareers (sold May 22, 2018), Health eCareers (sold December 4, 2017), and Rigzone (sold the RigLogix portion of the Rigzone business on February 22, 2018 and transferred majority ownership of the remaining Rigzone business to Rigzone management on August 31, 2018).

BioSpace (transferred majority ownership to BioSpace management on January 31, 2018 and sold the remaining interest during the second quarter of 2020), Hcareers (sold May 22, 2018), Health eCareers (sold December 4, 2017), and Rigzone (sold the RigLogix portion of the Rigzone business on February 22, 2018 and transferred majority ownership of the remaining Rigzone business to Rigzone management on August 31, 2018).

Additionally, the Company ceased the Dice Europe operations on August 31, 2018 and vacated certain offices during 2018.

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The following table displays a roll forward of the disposition related and other costs and related liability balances (in thousands):

Three Months Ended March 31, 2020 Accrual at December 31, 2019 Expense Cash Payments Accrual at March 31, 2020

Three Months Ended June 30, 2020 Accrual at March 31, 2020 Expense Cash Payments Accrual at June 30, 2020

Severance and retention $ 129 $ — $ — $ 129

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended March 31, 2019 Accrual at December 31, 2018 Expense Cash Payments Accrual at March 31, 2019

Three Months Ended June 30, 2019 Accrual at March 31, 2019 Expense Cash Payments Accrual at June 30, 2019

Severance and retention $ 727 $ 495 $ ( 405 ) $ 817

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Total disposition related and other costs $ 2,573 $ 825 $ ( 1,932 ) $ 1,466

Six Months Ended June 30, 2020 Accrual at December 31, 2019 Expense Cash Payments Accrual at June 30, 2020

Severance and retention $ 145 $ — $ ( 16 ) $ 129

Lease exit and related asset impairment costs 365 — ( 92 ) 273

Total disposition related and other costs $ 510 $ — $ ( 108 ) $ 402

Six Months Ended June 30, 2019 Accrual at December 31, 2018 Expense Cash Payments Accrual at June 30, 2019

Severance and retention $ 1,089 $ 1,258 $ ( 1,530 ) $ 817

Professional fees and other costs 1,271 442 ( 1,654 ) 59

Lease exit and related asset impairment costs 947 — ( 357 ) 590

Total disposition related and other costs $ 3,307 $ 1,700 $ ( 3,541 ) $ 1,466

STOCK 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 recorded total stock based compensation expense of $ 1.8 million and $ 1.5 million during the three month periods ended March 31, 2020 and 2019, respectively.

At March 31, 2020, there was $ 12.8 million of unrecognized compensation expense related to unvested awards, which is expected to be recognized over a weighted-average period of approximately 1.6 years.

The Company recorded total stock based compensation expense of $ 1.6 million and $ 3.4 million during the three and six month periods ended June 30, 2020, respectively, and $ 1.6 million and $ 3.1 million during the three and six month periods ended June 30, 2019, respectively.

At June 30, 2020, there was $ 11.8 million of unrecognized compensation expense related to unvested awards, which is expected to be recognized over a weighted-average period of approximately 1.5 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.

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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 March 31, 2020 and 2019 and the changes during the periods then ended is presented below:

Three Months Ended March 31, 2020 Three Months Ended March 31, 2019

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

A summary of the status of restricted stock awards as of June 30, 2020 and 2019 and the changes during the periods then ended is presented below:

Three Months Ended June 30, 2020 Three Months Ended June 30, 2019

Shares Weighted- Average Fair Value at Grant Date Shares Weighted- Average Fair Value at Grant Date

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Non-vested at end of period 4,153,171 $ 2.48 4,549,079 $ 2.31

Six Months Ended June 30, 2020 Six Months Ended June 30, 2019

Shares Weighted- Average Fair Value at Grant Date Shares Weighted- Average Fair Value at Grant Date

Non-vested at beginning of the period 3,994,787 $ 2.46 4,518,932 $ 2.32

Granted 1,860,500 $ 2.73 1,867,790 $ 2.54

Forfeited ( 280,298 ) $ 2.91 ( 227,625 ) $ 3.08

Vested ( 1,421,818 ) $ 2.67 ( 1,610,018 ) $ 2.51

Non-vested at end of period 4,153,171 $ 2.48 4,549,079 $ 2.31

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.

Under the first agreement, with a grant during the year ended December 2017, the fair value of PSUs are measured using the Monte Carlo pricing model.

The expense related to these PSUs are recorded over the vesting period.

These shares will vest on the dates the Compensation Committee certifies the Company’s achievement of stock price performance relative to the Russell 2000 Index, provided that the recipient remains employed through such date.

Performance will be measured over three separate measurement periods:

a one-year measurement period, a two-year measurement period and a three-year measurement period.

For performance periods one and two, vesting is not to exceed the total grant divided by three.

For performance period three, vesting is no less than zero and no greater than 150% of the initial grant less shares vested in performance periods one and two.

As of March 31, 2020, there were no unvested shares related to the first agreement and the first agreement was terminated.

The first agreement expired and was terminated during the first quarter of 2020.

Under the second agreement, the fair value of the PSUs are 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

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

on the achievement of bookings targets during the years ended December 31, 2020 and 2019, as defined in the agreement.

The performance period is over one year and is based on the achievement of bookings targets during the years ended December 31, 2020 and 2019, 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.

As of March 31, 2020, there were 1,627,011 unvested shares related to the second agreement.

As of June 30, 2020, there were 1,587,607 unvested shares related to the second agreement.

There was no cash flow impact resulting from the grants.

A summary of the status of PSUs as of March 31, 2020 and 2019 and the changes during the periods then ended is presented below:

Three Months Ended March 31, 2020 Three Months Ended March 31, 2019

A summary of the status of PSUs as of June 30, 2020 and 2019 and the changes during the periods then ended is presented below:

Three Months Ended June 30, 2020 Three Months Ended June 30, 2019

Shares Weighted- Average Fair Value at

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Non-vested at end of period 1,587,607 $ 2.50 1,722,500 $ 2.48

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Six Months Ended June 30, 2020 Six Months Ended June 30, 2019

Shares Weighted- Average Fair Value at

Grant Date Shares Weighted- Average Fair Value at

Non-vested at beginning of the period 1,664,650 $ 2.53 1,255,000 $ 3.45

Granted 911,460 $ 2.82 740,000 $ 2.40

Forfeited ( 665,927 ) $ 3.28 ( 272,500 ) $ 6.74

Vested ( 322,576 ) $ 1.95 — $ —

Non-vested at end of period 1,587,607 $ 2.50 1,722,500 $ 2.48

Stock Options— The fair value of each option grant is estimated using the Black-Scholes option-pricing model.

5 unchanged sentences

There was no cash flow impact resulting from the grants.

No stock options were granted during the three months ended March 31, 2020 and 2019.

A summary of the status of options previously granted as of March 31, 2020 and 2019, and the changes during the periods then ended, is presented below:

Three Months Ended March 31, 2020

No stock options were granted during the six months ended June 30, 2020 and 2019.

A summary of the status of options previously granted as of June 30, 2020 and 2019, and the changes during the periods then ended, is presented below:

Three Months Ended June 30, 2020

Options Weighted-Average Exercise Price Aggregate Intrinsic Value

3 unchanged sentences

Exercisable at end of period 110,000 $ 7.40 $ —

Three Months Ended March 31, 2019

Three Months Ended June 30, 2019

Options Weighted-Average Exercise Price Aggregate Intrinsic Value

3 unchanged sentences

Exercisable at end of period 193,000 $ 8.28 $ —

Six Months Ended June 30, 2020

Options Weighted-Average Exercise Price Aggregate Intrinsic Value

Options outstanding at beginning of the period 190,000 $ 8.28 $ —

Forfeited ( 80,000 ) $ 9.48 $ —

Options outstanding at end of period 110,000 $ 7.40 $ —

Exercisable at end of period 110,000 $ 7.40 $ —

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

T he weighted-average remaining contractual term of options exercisable at March 31, 2020 is 0.9 years.

T he following table summarizes information about options outstanding as of March 31, 2020:

Six Months Ended June 30, 2019

Options Weighted-Average Exercise Price Aggregate Intrinsic Value

Options outstanding at beginning of the period 327,000 $ 8.35 $ —

Forfeited ( 134,000 ) $ 8.45 $ —

Options outstanding at end of period 193,000 $ 8.28 $ —

Exercisable at end of period 193,000 $ 8.28 $ —

T he weighted-average remaining contractual term of options exercisable at June 30, 2020 is 0.9 years.

T he following table summarizes information about options outstanding as of June 30, 2020:

Exercise Price Options Outstanding and Exercisable Weighted-

3 unchanged sentences

SEGMENT INFORMATION

The Company modified its Tech-focused reportable segment in the first quarter of 2019 to reflect a single Tech-focused operating structure.

The change comes as a result of the non-tech businesses being fully divested during 2018 and, as a result, the Company has one reportable segment for the periods presented.

This single segment, Tech-focused, includes the Dice, ClearanceJobs, and eFinancialCareers services, as well as corporate related costs.

The Company has a single reportable segment, Tech-focused, which includes the Dice, ClearanceJobs, and eFinancialCareers services, as well as corporate related costs.

The Company allocates resources and assesses financial performance on a consolidated basis, as all services pertain to the Company's Tech-focused strategy.

1 unchanged sentence

Revenue and long-lived assets by geography, as presented in the tables below, are based on the location of each of the Company's subsidiaries.

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2020 2019 2020 2019

United States $ 28,066 $ 29,887 $ 58,062 $ 59,506

1 unchanged sentence

EMEA and APAC (1)

2,739 3,041 5,702 5,833

Non-United States 5,718 7,472 12,355 14,973

Total revenues $ 33,784 $ 37,359 $ 70,417 $ 74,479

March 31, December 31,

March 31, December 31, June 30, December 31,

2020 2019 2020 2019

Long-lived assets 2:

6 unchanged sentences

(2) Long-lived assets include fixed assets and lease right of use assets.

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

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

common stock equivalents, where dilutive.

For the three months ended March 31, 2020, 1.6 million dilutive shares were excluded from the computation of shares contingently issuable upon exercise as we recognized a net loss.

Outstanding stock-based awards that were anti-dilutive and excluded from the calculation of diluted EPS were approximately 1.8 million and 1.3 million shares for the three month periods ended March 31, 2020 and 2019, respectively.

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.

For the six month period ended June 30, 2020, 1.4 million dilutive shares were excluded from the computation of shares contingently issuable upon exercise as we recognized a net loss.

Outstanding stock-based awards that were anti-dilutive and excluded from the calculation of diluted EPS were approximately 2.1 million and 2.0 million shares for the three and six month periods ended June 30, 2020, and approximately 0.5 million and 0.6 million shares for the three and six month periods ended June 30, 2019, respectively.

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 March 31,

Three Months Ended June 30, Six Months Ended June 30,

2020 2019 2020 2019

Net income (loss) $ 1,862 $ 3,061 $ ( 4,688 ) $ 4,649

4 unchanged sentences

Diluted earnings (loss) per share $ 0.04 $ 0.06 $ ( 0.10 ) $ 0.09

The Company’s effective tax rate was 11.9 % and 54.5 % for the three months ended March 31, 2020 and 2019, respectively.

The Company’s effective tax rate was 19 % and 9 % for the three and six months ended June 30, 2020, respectively, and 14 % and 34 % for the three and six months ended June 30, 2019, respectively.

The following items caused the effective tax rate to differ from the U.S.

statutory rate:

• Tax deficiencies of $ 0.4 million and $ 0.7 million during the three months ended March 31, 2020 and 2019, respectively, related to the vesting or settlement of share-based compensation awards.

• Tax expense of $ 0.6 million during the three months ended March 31, 2020 related to the nondeductible impairment of an equity investment.

• Tax benefit of $ 0.2 million during the three months ended March 31, 2020 related to the expiration of the statute of limitations in certain foreign jurisdictions.

• Tax expense of $ 0.4 million during the three months ended March 31, 2019 related to the transition tax on the deemed repatriation of foreign earnings.

• A tax deficiency of $ 0.5 million during the six months ended June 30, 2020, related to the vesting or settlement of share-based compensation awards.

• Tax expense of $ 0.7 million during the six months ended June 30, 2020, from the nondeductible impairment of an equity investment.

• A tax benefit of $ 0.2 million during the six months ended June 30, 2020, from the expiration of the statute of limitations in certain foreign jurisdictions.

• Excess tax benefits of $ 0.3 million and deficiencies of $ 0.4 million during the three and six months ended June 30, 2019, respectively, related to the vesting or settlement of share-based compensation awards.

• Tax expense of $ 0.4 million during the six months ended June 30, 2019, related to the transition tax on the deemed repatriation of foreign earnings.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements