What changed in this filing

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Item 1. Financial Statements

2020-11-04 compared with 2020-08-06 · 134 added, 104 removed, 540 unchanged (31% of the section changed)

3 unchanged sentences

(in thousands, except per share data)

September 30,

2020 December 31, 2019

44 unchanged sentences

(in thousands, except per share amounts)

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

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 2020 2019

7 unchanged sentences

Impairment of intangible assets 8,000 — 15,200 —

Impairment of goodwill 23,626 — 23,626 —

Disposition related and other costs (Note 13) — — — 1,700

15 unchanged sentences

(in thousands)

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

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 2020 2019

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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

DHI GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(in thousands)

Preferred Stock Common Stock Additional

15 unchanged sentences

Net income 3,061 3,061

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

Other comprehensive loss ( 1,677 ) ( 1,677 )

Stock based compensation 1,620 1,620

4 unchanged sentences

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

Net income 4,381 4,381

Other comprehensive loss ( 1,863 ) ( 1,863 )

Stock based compensation 1,057 1,057

Restricted stock issued 234 2 2

Restricted stock forfeited or withheld to satisfy tax obligations ( 214 ) ( 2 ) 85 ( 316 ) ( 318 )

Performance-Based Restricted Stock Units eligible to vest ( 548 ) ( 6 ) ( 6 )

Performance-Based Restricted Stock Units forfeited ( 100 ) ( 1 ) ( 1 )

Purchase of treasury stock under stock repurchase plan 367 $ ( 1,271 ) ( 1,271 )

Balance at September 30, 2019 — $ — 69,254 $ 693 $ 225,658 15,207 $ ( 120,171 ) $ 80,465 $ ( 33,360 ) 153,285

See accompanying notes to the condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from (used in) operating activities:

6 unchanged sentences

Impairment of intangible assets 15,200 —

Impairment of goodwill 23,626 —

Impairment of equity investment 2,002 —

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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 six month period ended June 30, 2020 are not necessarily indicative of the results to be achieved for the full year.

Operating results for the nine month period ended September 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 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.

There have been no significant changes in the Company’s assumptions regarding critical accounting estimates during the nine month period ended September 30, 2020, except as disclosed in Notes 6, 8 and 9 relating to impairments to equity method investments, intangible assets, and goodwill, respectively.

NEW ACCOUNTING STANDARDS

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Disaggregation of revenue

Our brands serve various economic professions, such as technology and financial.

Our brands serve various economic professions, such as technology, security cleared, and financial.

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

Three Months Ended June 30 Six Months Ended June 30

Three Months Ended September 30 Nine Months Ended September 30

2020 2019 2020 2019

1 unchanged sentence

ClearanceJobs 7,326 6,320 21,333 18,116

eFinancial Careers 6,188 8,130 13,436 16,322

eFinancialCareers 6,101 7,941 19,537 24,263

Total $ 33,250 $ 37,176 $ 103,667 $ 111,655

1 unchanged sentence

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 June 30, 2020 As of December 31, 2019

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

Receivables $ 16,698 $ 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 Six Months Ended

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

Three Months Ended Nine Months Ended

September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019

Revenue recognized in the period from:

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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 June 30, 2020.

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

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

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

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

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2020 2019 2020 2019

5 unchanged sentences

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

For the Six Months Ended June 30,

For the Nine Months Ended September 30,

Cash paid for amounts included in measurement of lease liabilities:

3 unchanged sentences

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

June 30, 2020 December 31, 2019

September 30, 2020 December 31, 2019

Operating lease right-of-use-assets $ 17,003 $ 19,712

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Operating leases 4.02 % 4.00 %

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

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

Operating Leases

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

October 1, 2020 through December 31, 2020 $ 989

2025 and Thereafter 4,455

2 unchanged sentences

Total $ 17,629

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

As of September 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 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 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.

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.

As of September 30, 2020 and December 31, 2019, the Company had an indefinite-lived acquired intangible asset of $ 23.8 million and $ 39.0 million, respectively, related to the Dice trademarks and brand name.

During the first quarter of 2020, because of the initial 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 performed an interim impairment analysis.

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

During the third quarter of 2020, the impacts of the COVID-19 pandemic continued and the Company's projected earnings and cash flows that are attributable to the Dice trademarks and brand name declined as compared to the projections used in the March 31, 2020 analysis.

As a result, the Company performed an interim impairment analysis as of September 30, 2020, which resulted in the Company recording an additional impairment charge of $ 8.0 million during the three month period ended September 30, 2020.

No impairment was recorded during the three and nine month periods ended September 30, 2019.

The projections utilized in the March 31 and September 30, 2020 analyses included a decline in revenues caused by the COVID-19 pandemic that are attributable to the Dice trademarks and brand name for the year ending December 31, 2020 compared to the year ended December 31, 2019.

The September 30, 2020 analysis included a further decline in revenues caused by the COVID-19 pandemic that are attributable to the Dice trademarks and brand name for the year ending December 31, 2021 compared to the year ended December 31, 2020 and then increasing to rates approximating industry growth projections, although peaking at rates slightly lower than in the March 31, 2020 analysis.

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.

Cash flows attributable to the Dice trademarks and brand name are projected to decline for the year ending December 31, 2020 compared to the year ended December 31, 2019 as a result of the lower revenue, but partially offset by reductions to operating expenses.

Operating expenses are projected to decline for the year ending December 31, 2020 as compared to the year ended December 31, 2019, including a small operating margin reduction, and then increase at levels that allow for modest operating margin improvements.

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.

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.

Cash flows that are attributable to the Dice trademarks and brand name are projected to decline for the year ending December 31, 2020 compared to the year ended December 31, 2019 as a result of the lower revenue, but partially offset by reductions to operating expenses.

Operating expenses, excluding impairments, utilized in the March 31 and September 30, 2020 analyses are projected to decline for the year ending December 31, 2020 as compared to the year ended December 31, 2019, including a reduction in operating margin.

The March 31, 2020 analysis included modest operating margin improvements during the year ending December 31, 2021 and beyond while the September 30, 2020 analysis included a small reduction in operating margin during the year ending December 31, 2021 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.

In the March 31, 2020 and September 30, 2020 analyses, the Company utilized a relief from royalty rate method to value the Dice trademarks and brand name using a royalty rate of 5.0 % and 4.0 %, respectively, based on comparable industry studies and a discount rate of 17.5 % and 15.5 %, respectively.

The decline in the royalty rate is due to revenue declines and impacts of the COVID-19 pandemic and the decline in the discount rate is primarily due to the lower projections, as compared to the March 31, 2020 analysis.

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.

3 unchanged sentences

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 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 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

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Goodwill at December 31, 2019 $ 156,059

Foreign currency translation adjustment ( 1,301 )

Impairment ( 23,626 )

Goodwill at September 30, 2020 $ 131,132

The amount of goodwill as of September 30, 2020 allocated to the Tech-focused reporting unit was $ 131.1 million.

The annual impairment test for the Tech-focused reporting unit is performed on October 1 of each year.

During the first quarter of 2020, because of the initial 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 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.

Revenue is projected to decline for the year ending December 31, 2020 compared to the year ended December 31, 2019 and then increase at rates approaching industry projections.

During the third quarter of 2020, the impacts of the COVID-19 pandemic continued and the Company's projected earnings and cash flows for the Tech-focused reporting unit declined as compared to the projections used in the March 31, 2020 analysis.

As a result, the Company performed an interim impairment analysis as of September 30, 2020, which resulted in the Company recording an impairment charge of $ 23.6 millions during the three month period ended September 30, 2020.

No impairment was recorded during the three and nine month periods ended September 30, 2019.

Revenue projections for the Tech-focused reporting unit declined compared to the projections used in the March 31, 2020 analysis due to the continued impacts of the COVID-19 pandemic.

The September 30, 2020 analysis included a further decline in revenues attributable to the Tech-focused reporting unit for the year ending December 31, 2021 compared to the year ended December 31, 2020 and then increasing to rates approximating industry growth projections, although peaking at rates slightly lower than in the March 31, 2020 analysis.

The Company’s ability to achieve these revenue projections may be impacted by, among other things, the length and impacts of the 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.

Future cash flows are projected to decline for the year ending December 31, 2020 compared to the year ended December 31, 2019 as a result of the lower revenue, but the decline will be partially offset by reductions to operating expenses.

Operating expenses are projected to decline for the year ending December 31, 2020 as compared to the year ended December 31, 2019, resulting in a small operating margin reduction, and then increase at levels that allow for modest operating margin improvements.

Future cash flows attributable to the Tech-focused reporting unit are projected to decline for the year ending December 31, 2020 compared to the year ended December 31, 2019 as a result of the lower revenue, but partially offset by reductions to operating expenses.

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 in the March 31, 2020 analysis was 16.5 %, compared to 13.2 % at October 1, 2019.

The discount rate applied for the Tech-focused reporting unit in the September 30, 2020 analysis was 14.5 %, compared to 16.5 % at March 31, 2020.

The decline in the discount rate is primarily due to the lower projections, as compared to the March 31, 2020 analysis.

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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(a wholly-owned subsidiary of the Company) and its wholly-owned subsidiary, Dice Career Solutions, Inc.

(collectively, the “Borrowers”), entered into a Second Amended and Restated Credit Agreement (the “Credit Agreement”), which matures in November 2023, and replaced the previously existing credit agreement dated November 2015.

(collectively, the “Borrowers”), entered into a Second Amended and Restated Credit Agreement (the “Credit Agreement”), which matures in November 2023, and replaced the previously

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

existing credit agreement dated November 2015.

The Credit Agreement provides for a revolving loan facility of $ 90 million, with an expansion option up to $ 140 million, as permitted under the terms of the Credit Agreement.

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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 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

As of September 30, 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.

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

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

September 30,

2020 December 31,

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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.

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

During the first quarter of 2018, the Company recorded a $ 1.0 million liability related to a class action lawsuit regarding the applicability of provisions of the Fair Credit Reporting Act (the "FCRA") to one of our products.

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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

5 unchanged sentences

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.

As of September 30, 2020 the value of shares that may yet be purchased under the current plan was $ 3.6 million.

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

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

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 2020 2019

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

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

There were 7,811 unsettled share repurchases as of September 30, 2020 and no unsettled share repurchases as of September 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 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).

BioSpace (transferred majority ownership to BioSpace management on January 31, 2018 and sold the remaining interest during the second quarter of

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 June 30, 2020 Accrual at March 31, 2020 Expense Cash Payments Accrual at June 30, 2020

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

Severance and retention $ 129 $ — $ — $ 129

1 unchanged sentence

Total disposition related and other costs $ 402 $ — $ ( 13 ) $ 389

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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

Severance and retention $ 817 $ — $ ( 292 ) $ 525

2 unchanged sentences

Total disposition related and other costs $ 1,466 $ — $ ( 504 ) $ 962

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

Nine Months Ended September 30, 2020 Accrual at December 31, 2019 Expense Cash Payments Accrual at September 30, 2020

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

1 unchanged sentence

Total disposition related and other costs $ 510 $ — $ ( 121 ) $ 389

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

Nine Months Ended September 30, 2019 Accrual at December 31, 2018 Expense Cash Payments Accrual at September 30, 2019

Severance and retention $ 1,089 $ 1,258 $ ( 1,822 ) $ 525

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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 $ 1.6 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.

The Company recorded total stock based compensation expense of $ 1.5 million and $ 4.9 million during the three and nine month periods ended September 30, 2020, respectively, and $ 1.1 million and $ 4.1 million during the three and nine month periods ended September 30, 2019, respectively.

At September 30, 2020, there was $ 10.8 million of unrecognized compensation expense related to unvested awards, which is expected to be recognized over a weighted-average period of approximately 1.4 years.

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

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

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

Three Months Ended September 30, 2020 Three Months Ended September 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 4,156,269 $ 2.47 4,353,178 $ 2.39

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

Nine Months Ended September 30, 2020 Nine Months Ended September 30, 2019

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

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

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.

As of September 30, 2020, there were 1,572,756 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 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

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Three Months Ended September 30, 2020 Three Months Ended September 30, 2019

Shares Weighted- Average Fair Value at

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

Granted — $ — 60,000 $ 3.00

Forfeited ( 14,851 ) $ 2.55 ( 100,000 ) $ 2.35

Vested ( 14,552 ) $ 3.00 — $ —

Non-vested at end of period 1,572,756 $ 2.41 1,622,500 $ 2.49

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Nine Months Ended September 30, 2020 Nine Months Ended September 30, 2019

Shares Weighted- Average Fair Value at

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There was no cash flow impact resulting from the grants.

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

No stock options were granted during the nine months ended September 30, 2020 and 2019.

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

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 $ —

Forfeited — $ — $ —

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

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

Three Months Ended June 30, 2019

Three Months Ended September 30, 2019

Options Weighted-Average Exercise Price Aggregate Intrinsic Value

Options outstanding at beginning of the period 193,000 $ 8.28 $ —

Forfeited ( 40,000 ) $ 7.73 $ —

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

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

Six Months Ended June 30, 2020

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Nine Months Ended September 30, 2020

Options Weighted-Average Exercise Price Aggregate Intrinsic Value

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

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Six Months Ended June 30, 2019

Nine Months Ended September 30, 2019

Options Weighted-Average Exercise Price Aggregate Intrinsic Value

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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:

T he weighted-average remaining contractual term of options exercisable at September 30, 2020 is 0.4 years.

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

Exercise Price Options Outstanding and Exercisable Weighted-

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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 June 30, Six Months Ended June 30,

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 2020 2019

5 unchanged sentences

Total revenues $ 33,250 $ 37,176 $ 103,667 $ 111,655

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

March 31, December 31, September 30, December 31,

2020 2019 2020 2019

7 unchanged sentences

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

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

EARNINGS PER SHARE

1 unchanged sentence

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.

For the three and nine month period ended September 30, 2020, 1.4 million and 1.3 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 2.3 million and 2.3 million shares for the three and nine month periods ended September 30, 2020, and approximately 0.4 million and 0.6 million shares for the three and nine month periods ended September 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 June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 2020 2019

5 unchanged sentences

Diluted earnings (loss) per share $ ( 0.57 ) $ 0.08 $ ( 0.66 ) $ 0.18

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 Company’s effective tax rate was 5 % and 6 % for the three and nine months ended September 30, 2020, respectively, and 14 % and 25 % for the three and nine months ended September 30, 2019, respectively.

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

statutory rate:

• 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.

• Tax expense of $ 4.2 million and $ 4.8 million during the three and nine months ended September 30, 2020, respectively, from nondeductible impairment charges.

• Tax deficiencies of $ 0.5 million and $ 0.4 million during the nine months ended September 30, 2020 and 2019, respectively, related to the vesting or settlement of share-based compensation awards.

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

• A tax benefit of $ 0.2 million during the three months ended September 30, 2019, related to the transition tax on the deemed repatriation of foreign earnings.

• A tax benefit of $ 0.2 million during the three months ended September 30, 2019, related to the divestiture of businesses.

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