What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-08-06 compared with 2021-05-05 · 252 added, 122 removed, 408 unchanged (48% of the section changed)

11 unchanged sentences

Prepaid and other current assets 4,000 4,101

Current assets of discontinued operations — 8,175

Total current assets 27,471 33,485

3 unchanged sentences

Goodwill 128,100 128,100

Deferred income taxes — 19

Operating lease right-of-use assets 9,771 10,804

Equity investments 3,640 —

Other assets 1,542 1,378

Non-current assets of discontinued operations — 14,198

Total assets $ 223,001 $ 240,987

5 unchanged sentences

Income taxes payable 997 —

Current liabilities of discontinued operations — 12,455

Total current liabilities 58,798 65,385

5 unchanged sentences

Other long-term liabilities 1,944 2,049

Non-current liabilities of discontinued operations — 5,288

Total liabilities 95,503 113,417

4 unchanged sentences

Common stock, $ .01 par value, authorized 240,000 ;

issued 73,271 and 71,233 shares, respectively;

73,235 and 71,233 shares, respectively;

51,440 and 51,220 shares, respectively

Additional paid-in capital 237,614 233,554

9 unchanged sentences

(in thousands, except per share amounts)

Three Months Ended March 31,

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

2021 2020 2021 2020

Revenues $ 28,721 $ 27,596 $ 55,397 $ 56,981

10 unchanged sentences

Impairment of equity investment — — — ( 2,002 )

Unrealized gain on equity security 2,513 —

Unrealized gain (loss) on equity security ( 674 ) — 1,839 —

Income (loss) before income taxes ( 273 ) 1,494 1,861 ( 7,266 )

Income tax expense (benefit) ( 61 ) 332 61 ( 893 )

Income (loss) from continuing operations ( 212 ) 1,162 1,800 ( 6,373 )

Income (loss) from discontinued operations, net of tax ( 29,999 ) 700 ( 29,340 ) 1,685

Net income (loss) $ ( 30,211 ) $ 1,862 $ ( 27,540 ) $ ( 4,688 )

Basic earnings (loss) per share - continuing operations $ — $ 0.02 $ 0.04 $ ( 0.13 )

Diluted earnings (loss) per share - continuing operations $ — $ 0.02 $ 0.04 $ ( 0.13 )

Basic earnings (loss) per share - discontinued operations $ ( 0.64 ) $ 0.01 $ ( 0.62 ) $ 0.03

Diluted earnings (loss) per share - discontinued operations $ ( 0.64 ) $ 0.01 $ ( 0.60 ) $ 0.03

Basic earnings (loss) per share $ ( 0.64 ) $ 0.04 $ ( 0.58 ) $ ( 0.10 )

6 unchanged sentences

(in thousands)

Three Months Ended March 31,

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

2021 2020 2021 2020

Net income (loss) $ ( 30,211 ) $ 1,862 $ ( 27,540 ) $ ( 4,688 )

Other comprehensive income (loss):

Foreign currency translation adjustment 159 ( 205 ) 456 ( 4,070 )

Cumulative translation adjustments reclassified to the Statements of Operations 28,063 — 28,063 —

Total other comprehensive income (loss) 28,222 ( 205 ) 28,519 ( 4,070 )

11 unchanged sentences

Net income 2,671 2,671

Other comprehensive income 297 297

Other comprehensive income - translation adjustments 297 297

Stock based compensation 1,758 1,758

5 unchanged sentences

Balance at March 31, 2021 — $ — 73,271 $ 735 $ 235,312 21,111 $ ( 135,037 ) $ 56,642 $ ( 28,222 ) $ 129,430

Net loss ( 30,211 ) ( 30,211 )

Other comprehensive income - translation adjustments 159 159

Cumulative translation adjustments reclassified to the Statements of Operations 28,063 28,063

Stock based compensation 2,302 2,302

Restricted stock issued 292 2 2

Restricted stock forfeited or withheld to satisfy tax obligations ( 328 ) ( 4 ) 135 ( 430 ) ( 434 )

Performance-Based Restricted Stock Units forfeited or withheld to satisfy tax obligations — — 17 ( 57 ) ( 57 )

Purchase of treasury stock under stock repurchase plan 532 ( 1,756 ) ( 1,756 )

Balance at June 30, 2021 — $ — $ 73,235 $ 733 $ 237,614 $ 21,795 $ ( 137,280 ) $ 26,431 $ — $ 127,498

DHI GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(in thousands)

Preferred Stock Common Stock Additional

12 unchanged sentences

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

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:

Net income (loss) $ 2,671 $ ( 6,550 )

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

Net loss $ ( 27,540 ) $ ( 4,688 )

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

Depreciation 8,445 6,272

5 unchanged sentences

Unrealized gain on equity security ( 1,839 ) —

Gain on sale of equity investment — ( 200 )

Change in accrual for unrecognized tax benefits 82 ( 18 )

Loss on disposition of discontinued operations 30,203 —

Changes in operating assets and liabilities:

7 unchanged sentences

Net cash flows from operating activities 19,298 10,020

Cash flows used in investing activities:

Cash flows from (used in) investing activities:

Cash transferred with discontinued operations ( 2,951 ) —

Cash received from sale of equity investment — 200

Purchases of fixed assets ( 6,822 ) ( 8,405 )

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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, 2020 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 (the “Annual Report on Form 10-K”).

Operating results for the three month period ended March 31, 2021 are not necessarily indicative of the results to be achieved for the full year.

Operating results for the six month period ended June 30, 2021 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, 2021.

There have been no significant changes in the Company’s assumptions regarding critical accounting estimates during the six month period ended June 30, 2021.

On June 30, 2021, the Company transferred majority ownership and control of its eFinancialCareers ("eFC") business to eFC's management, while retaining a 40 % common share interest.

The eFC business was significant to the Company and the transfer was considered to be a strategic shift from the financial services industry and from the geographies eFC serves that had a major effect on the Company's operations.

As a result, the eFC business has been deconsolidated from the Company's consolidated financial statements as of June 30, 2021 and is reflected as a discontinued operation in the Condensed Consolidated Balance Sheets and the Condensed Consolidated Statements of Operations for all periods presented.

The historical Condensed Consolidated Statements of Comprehensive Income (Loss), Stockholders’ Equity and Cash Flows have not been revised to reflect the effects of the transfer of control of eFC.

For further information on discontinued operations, see Note 3, “Discontinued Operations.” Unless noted otherwise, discussion in the notes to the condensed consolidated financial statements pertain to continuing operations .

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

As a result, t he Company has a single reportable segment, Tech-focused, which now includes only the Dice and ClearanceJobs brands, as well as corporate related costs.

All operations are in the United States and the Company no longer has revenues and long-lived assets, which includes fixed assets and lease right of use assets, outside of the United States.

NEW ACCOUNTING STANDARDS

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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 adopted this standard on January 1, 2021, and the adoption did not have a material effect on the Company's consolidated financial statements.

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Company adopted this standard on January 1, 2021, and the adoption did not have a material effect on the Company's consolidated financial statements.

DISCONTINUED OPERATIONS

As further described in Note 1, on June 30, 2021, the Company transferred majority ownership and control of its eFC business to eFC's management, while retaining a 40 % common share interest.

As a result, we have reflected eFC's financial results as discontinued operations in the Condensed Consolidated Balance Sheets and the Condensed Consolidated Statements of Operations for all periods presented.

The assets and liabilities classified as discontinued operations on the Condensed Consolidated Balance Sheets were as follows (in thousands):

December 31, 2020

Cash and cash equivalents $ 3,098

Accounts receivable, net 4,164

Income taxes receivable 511

Prepaid and other current assets 402

Current assets of discontinued operations 8,175

Fixed, assets, net 1,511

Capitalized contract costs 1,545

Goodwill 5,253

Deferred income taxes 19

Operating lease right-of-use assets 5,601

Other assets 269

Non-current assets of discontinued operations 14,198

Total assets of discontinued operations $ 22,373

Accounts payable and accrued expenses $ 4,118

Operating lease liabilities 1,335

Deferred revenue 6,879

Income taxes payable 123

Current liabilities of discontinued operations 12,455

Deferred income taxes 171

Deferred revenue 33

Accrual for unrecognized tax benefits 406

Operating lease liabilities 4,333

Other long-term liabilities 345

Non-current liabilities of discontinued operations 5,288

Total liabilities of discontinued operations $ 17,743

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The results of discontinued operations on the Condensed Consolidated Statements of Operations were as follows (in thousands):

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

2021 2020 2021 2020

Revenues $ 6,173 $ 6,188 $ 12,130 $ 13,436

Operating expenses ( 5,546 ) ( 5,390 ) ( 10,821 ) ( 11,318 )

Operating income 627 798 1,309 2,118

Loss on disposition of discontinued operations 1

( 30,203 ) — ( 30,203 ) —

Other income (expense) ( 1 ) — 1 5

Income (loss) before income taxes ( 29,577 ) 798 ( 28,893 ) 2,123

Income tax expense 422 98 447 438

Net income (loss) $ ( 29,999 ) $ 700 $ ( 29,340 ) $ 1,685

(1) The loss was comprised of $28.1 million related to the reclassification of currency translation adjustments and $5.2 million from the removal of eFC's net assets.

The loss was partially offset by the recording of an equity investment of $3.6 million and eFC's earnings during the three and six month periods ended June 30, 2021.

Depreciation, fixed asset purchases and other significant non-cash items related to discontinued operations were as follows (in thousands):

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

2021 2020 2021 2020

Depreciation $ 309 $ 446 $ 774 $ 932

Purchases of fixed assets $ 323 $ 23 $ 447 $ 144

Cash paid for amounts included in measurement of lease liabilities:

Operating cash flows from operating leases $ 413 $ 373 $ 804 $ 755

REVENUE RECOGNITION

4 unchanged sentences

Disaggregation of revenue

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

Our brands primarily serve the technology and security cleared professions.

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

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended March 31

Three Months Ended June 30 Six Months Ended June 30

2021 2020 2021 2020

Dice $ 20,583 $ 20,489 $ 39,634 $ 42,974

ClearanceJobs 8,138 7,107 15,763 14,007

eFinancialCareers 5,957 7,248

Total $ 28,721 $ 27,596 $ 55,397 $ 56,981

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Contract Balances

The following table provides information about opening and closing balances of receivables and contract liabilities from contracts with customers as required under Topic 606 (in thousands):

As of March 31, 2021 As of December 31, 2020

As of June 30, 2021 As of December 31, 2020

Receivables $ 13,727 $ 16,134

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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, 2021 March 31, 2020

Three Months Ended Six Months Ended

June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020

Revenue recognized in the period from:

8 unchanged sentences

• Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations, in which all significant inputs are observable in active markets.

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

• Level 3 – Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

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The estimated fair value of long-term debt is based on Level 2 inputs.

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 resulted from prior acquisitions.

These assets include equity investments and goodwill and intangible assets which resulted from prior acquisitions.

Items valued using such internally generated valuation techniques are classified according to the lowest level input or value driver that is significant to the valuation.

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Such instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances, for example, when there is evidence of impairment.

On June 30, 2021, the Company transferred majority ownership and control of its eFC business to eFC's management, while retaining a 40 % common share interest.

The Company valued its 40 % interest in eFC utilizing a combination of a discounted cash flow and a market approach.

The discounted cash flow included declining revenues for the years ending December 31, 2021 and 2022 as compared to the year ended December 31, 2020 and then increasing moderately.

The discounted cash flow also included operating margin declines for the year ending December 31, 2022 compared to the year ending December 31, 2021 and then increasing moderately.

The Company utilized a discount rate of 19.0 %.

The market approach included the analysis of data from transactions on guideline companies and applied multiples of those transactions to eFC's results.

Equity Security at Fair Value

3 unchanged sentences

Accordingly, the investment was carried at its original cost, less impairments, which resulted in a carrying value of zero as of December 31, 2020.

As a result of the IPO, the shares now have a readily determinable fair market value, which was $ 2.5 million as of March 31, 2021, and an unrealized gain has been recognized in the current quarter.

As a result of the IPO, the shares now have a readily determinable fair market value, which was $ 1.8 million as of June 30, 2021.

The investment is accounted for as an equity security, with unrealized gains and losses included in earnings.

Unrealized gain for the three months ended March 31, 2021 was $ 2.5 million.

Unrealized gain (loss) of ($ 0.7 ) million and $ 1.8 million has been recorded for the three and six month periods ended June 30, 2021, respectively.

Other Investments

6 unchanged sentences

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

As of June 30, 2021, there have been no additional shares issued that were similar to the Company's share rights and the investment is recorded at zero as of June 30, 2021.

On January 31, 2018, the Company transferred a majority ownership of the BioSpace business to BioSpace management with zero proceeds received from the transfer, while retaining a 20 % preferred share interest in the BioSpace business.

4 unchanged sentences

Oil and gas companies, as well as companies that serve the energy industry, use Rigzone to find talent for roles such as petroleum engineers, sales professionals with energy industry expertise and skilled tradesmen.

On August 31, 2018, the Company transferred a majority ownership of the Rigzone business to Rigzone management, while retaining a 40 % common share interest, with zero proceeds received from the transfer.

On August 31, 2018, the Company transferred a majority ownership and control of the Rigzone business to Rigzone management, while retaining a 40 % common share interest, with zero proceeds received from the transfer.

The Company has evaluated the 40 % common share interest in the Rigzone business and has determined the investment meets the definition and criteria of a variable interest entity ("VIE").

The Company evaluated the VIE and determined that the Company does not have a controlling financial interest in the VIE, as the Company does not have the power to direct the activities of the VIE that most

The Company evaluated the VIE and determined that the Company does not have a controlling financial interest in the VIE, as the Company does not have the power to direct the activities of the

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

significantly impact the VIE's economic performance.

VIE that most significantly impact the VIE's economic performance.

The common share interest is being accounted for under the equity method of accounting as the Company has the ability to exercise significant influence over Rigzone.

As accumulated earnings of the VIE have been approximately zero since the date of transfer, the investment is recorded at zero at March 31, 2021.

As accumulated earnings of the VIE have been approximately zero since the date of transfer, the investment is recorded at zero at June 30, 2021.

As further described in Notes 1 and 5, on June 30, 2021, the Company transferred majority ownership and control of its eFC business to eFC's management, while retaining a 40 % common share interest with zero proceeds received from the transfer.

The Company incurred approximately $ 0.1 million in selling costs and recognized a $ 30.2 million loss on the transfer in the second quarter of 2021, which included a $ 28.1 million charge related to accumulated foreign currency loss that was previously a reduction to equity.

eFC is a financial services careers website, operating websites in multiple markets in four languages mainly across the United Kingdom, Continental Europe, Asia, the Middle East and North America.

Professionals from across many sectors of the financial services industry, including asset management, risk management, investment banking, and information technology, use eFC to advance their careers.

The Company has evaluated the 40 % common share interest in the eFC business and has determined the investment meets the definition and criteria of a variable interest entity ("VIE").

The common share interest is being accounted for under the equity method of accounting as the Company has the ability to exercise significant influence over eFC.

The investment was recorded at its fair value on June 30, 2021, the date of transfer, which was $3.6 million.

The recorded value will adjust in the future based on the Company's proportionate share of eFC's net income.

The Company has operating leases for corporate office space and certain equipment.

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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.

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

When readily available, the Company uses the implicit rate in determining the present value of the lease payments.

4 unchanged sentences

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,

2021 2020 2021 2020

Operating lease cost *

3 unchanged sentences

* Includes short-term lease costs and variable lease costs, which are immaterial.

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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:

3 unchanged sentences

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

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Operating lease right-of-use-assets $ 9,771 $ 10,804

6 unchanged sentences

Operating leases 3.84 % 3.86 %

As of March 31, 2021, future operating lease payments were as follows (in thousands):

As of June 30, 2021, future operating lease payments were as follows (in thousands):

Operating Leases

April 1, 2021 through December 31, 2021 $ 3,028

July 1, 2021 through December 31, 2021 $ 1,258

2026 and thereafter 1,074

2 unchanged sentences

Total $ 10,437

As of March 31, 2021 the Company has no additional operating or finance leases that have not yet commenced.

As of June 30, 2021 the Company has no additional operating or finance leases that have not yet commenced.

ACQUIRED INTANGIBLE ASSETS, NET

3 unchanged sentences

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

As of March 31, 2021 and December 31, 2020, the Company had an indefinite-lived acquired intangible asset of $ 23.8 million related to the Dice trademarks and brand name.

During the first and third quarters of 2020, because of the impacts of the COVID-19 pandemic and its potential impact on future earnings and cash flows that are attributable to the Dice trademarks and brand name, the Company recorded impairment charges of $ 7.2 million and $ 8.0 million, respectively.

No impairment was recorded during the three month period ended March 31, 2021.

As of June 30, 2021 and December 31, 2020, the Company had an indefinite-lived acquired intangible asset of $ 23.8 million related to the Dice trademarks and brand name.

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

brand name, the Company recorded impairment charges of $ 7.2 million and $ 8.0 million, respectively.

No impairment was recorded during the six month period ended June 30, 2021.

The projections utilized in the September 30, 2020 analysis included a decline in revenues for the year ending December 31, 2021 compared to the year ended December 31, 2020, and then increasing revenues to rates approximating industry growth projections.

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

The Company's operating results attributable to the Dice trademarks and brand name through March 31, 2021 and projections of future results have met or exceeded those included in the

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

projections utilized in the September 30, 2020 analysis.

The Company's operating results attributable to the Dice trademarks and brand name through June 30, 2021 and projections of future results have met or exceeded those included in the projections utilized in the September 30, 2020 analysis.

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

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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, 2020 and March 31, 2021 and the changes in goodwill for the three month period ended March 31, 2021 (in thousands):

Goodwill at December 31, 2020 $ 133,353

Foreign currency translation adjustment 331

Goodwill at March 31, 2021 $ 133,684

The amount of goodwill as of March 31, 2021 allocated to the Tech-focused reporting unit was $ 133.7 million.

Goodwill as of June 30, 2021 and December 31, 2020, which was allocated to the Tech-focused reporting unit, was $ 128.1 million.

There were no changes to goodwill from December 31, 2020 to June 30, 2021.

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

During the three months ended September 30, 2020, 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 recorded an impairment charge of $ 23.6 million.

No impairment was recorded during the three month periods ended March 31, 2021 and 2020.

Revenue projections attributable to the Tech-focused reporting unit used in the September 30, 2020 analysis included a decline in revenues for the year ending December 31, 2021 compared to the year ended December 31, 2020 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, 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.

The September 30, 2020 analysis included a small reduction in operating margin during the year ending December 31, 2021 and then increasing modestly.

The Company's operating results attributable to the Tech-focused reporting unit through March 31, 2021 and projections of future results have met or exceeded those included in the September 30, 2020 analysis.

On June 30, 2021, the Company transferred a majority interest of its eFC business, which was part of the Tech-focused reporting unit, to management.

As a result, the Company performed an interim impairment analysis of goodwill.

The results indicated that the fair value of the Tech-focused reporting unit was substantially in excess of the carrying value as of June 30, 2021.

No impairment was recorded during the six month periods ended June 30, 2021 and 2020.

Revenue projections attributable to the Tech-focused reporting unit used in the June 30, 2021 analysis included revenue growth for the year ending December 31, 2021 compared to the year ended December 31, 2020 as the business recovers from the impacts of the COVID-19 pandemic and then continues its growth at rates approximating industry growth projections.

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

The operating margin for the year ending December 31, 2021, as included in the June 30, 2021 analysis, approximates the operating margin for the year ended December 31, 2020, and then the margin increases as revenue growth drives profitability.

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 September 30, 2020 analysis was 14.5 %.

The discount rate applied for the Tech-focused reporting unit in the June 30, 2021 analysis was 15.5 %.

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

1 unchanged sentence

In addition, a future decline in the overall market conditions, uncertainty related to COVID-19, political instability, and/or changes in the Company’s market share could negatively impact the estimated future cash flows and discount rates used to determine the fair value of the reporting unit and could result in an impairment charge in the foreseeable future.

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Credit Agreement —In November 2018, the Company, together with Dice, Inc.

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

(collectively, the “Borrowers”), entered into 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, as further amended in June 2021 (the “Credit Agreement”), which matures in November 2023, and replaced the previously existing credit agreement dated November 2015.

The June 2021 amendment modified the credit agreement to allow for the disposition of the eFC business.

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.

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Borrowings under the Credit Agreement bear interest, at the Company’s option, at a LIBOR rate or a base rate plus a margin.

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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, 2021, the Company was in compliance with all of the financial covenants under the Credit Agreement.

As of June 30, 2021, 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 March 31, 2021 and December 31, 2020 are as follows (dollars in thousands):

based wholly-owned subsidiaries and secured by substantially all of the assets of the Borrowers and the guarantors.

The amounts borrowed as of June 30, 2021 and December 31, 2020 are as follows (dollars in thousands):

2021 December 31,

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The Company records provisions for losses when claims become probable and the amounts are reasonably estimable.

Although the outcome of these legal matters, except as described below and recorded in the condensed consolidated financial statements, cannot be determined, it is the opinion of management that the final resolution of these matters will not have a material effect on the Company’s financial condition, operations or liquidity.

Tax Contingencies

The Company operates in a number of tax jurisdictions and is routinely subject to examinations by various tax authorities with respect to income taxes and indirect taxes.

The determination of the Company’s worldwide provision for taxes requires

Although the outcome of these legal matters, except as described below and recorded in the condensed consolidated

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

judgment and estimation.

financial statements, cannot be determined, it is the opinion of management that the final resolution of these matters will not have a material effect on the Company’s financial condition, operations or liquidity.

Tax Contingencies

The Company operates in a number of tax jurisdictions and is routinely subject to examinations by various tax authorities with respect to income taxes and indirect taxes.

The determination of the Company’s liability for taxes requires judgment and estimation.

The Company has reserved for potential examination adjustments to our provision for income taxes and accrual of indirect taxes in amounts which the Company believes are reasonable.

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May 2019 to May 2020 May 2020 to May 2021 (1)

Feb 2021 to Feb 2022

Feb 2021 to Jun 2022 (2)

Approval Date April 2019 May 2020 February 2021

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(1) During the first quarter of 2021, the Company completed its purchases under the plan, which consisted of 2.2 million shares for $5.0 million, effectively ending the plan prior to its original expiration date.

As of March 31, 2021 the value of shares that may yet be purchased under the current plan was $ 7.6 million.

(2) During the second quarter of 2021, the Company amended its stock repurchase program approved in February 2021 and allowed for the purchase of an additional $12.0 million of our common stock through June 2022, bringing total authorized purchases under the plan to $20.0 million.

As of June 30, 2021 the value of shares that may yet be purchased under the current plan was $ 17.8 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,

2021 2020 2021 2020

Shares repurchased [1]

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

There were 11,394 unsettled share repurchases as of March 31, 2021 and 51,500 unsettled share repurchases as of March 31, 2020.

There were 135,330 and 8,905 unsettled share repurchases as of June 30, 2021 and 2020, respectively.

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 during each of the three month periods ended March 31, 2021 and 2020, respectively.

At March 31, 2021, 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 1.5 years.

The Company recorded total stock based compensation expense of $ 1.8 million and $ 3.4 million during each of the three and six month periods ended June 30, 2021, respectively, and $ 1.5 million and $ 3.1 million during the three and six months periods ended June 30, 2020.

At June 30, 2021, there was $ 10.6 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.

Restricted Stock— Restricted stock is granted to employees of the Company and its subsidiaries, and to non-employee members of the Company’s Board.

1 unchanged sentence

The closing price of the Company’s stock on the date of grant is used to determine the fair value of the grants.

The expense related to the restricted stock grants is recorded over the vesting period as described below.

The expense related to restricted stock grants is recorded over the vesting period as described below.

There was no cash flow impact resulting from the grants.

The restricted stock vests in various increments either quarterly or on the anniversaries of each grant, subject to the recipient’s continued employment or service through each applicable vesting date.

Vesting occurs over one year for Board members and over two to four years for employees.

A summary of the status of restricted stock awards as of March 31, 2021 and 2020 and the changes during the periods then ended is presented below:

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended March 31, 2021 Three Months Ended March 31, 2020

Restricted stock vests in various increments either quarterly or on the anniversaries of each grant, subject to the recipient’s continued employment or service through each applicable vesting date.

Vesting occurs over one year for Board members and over two to four years for employees.

A summary of the status of restricted stock awards as of June 30, 2021 and 2020 and the changes during the periods then ended is presented below:

Three Months Ended June 30, 2021 Three Months Ended June 30, 2020

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

4 unchanged sentences

Non-vested at end of period 3,476,056 $ 2.55 4,153,171 $ 2.48

Six Months Ended June 30, 2021 Six Months Ended June 30, 2020

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

Non-vested at beginning of the period 3,877,853 $ 2.49 3,994,787 $ 2.46

Granted 1,759,683 $ 2.68 1,860,500 $ 2.73

Forfeited ( 532,134 ) $ 2.69 ( 280,298 ) $ 2.91

Vested ( 1,629,346 ) $ 2.49 ( 1,421,818 ) $ 2.67

Non-vested at end of period 3,476,056 $ 2.55 4,153,171 $ 2.48

PSUs —PSUs are granted to employees of the Company and its subsidiaries.

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There was no cash flow impact resulting from the grants.

A summary of the status of PSUs as of March 31, 2021 and 2020 and the changes during the periods then ended is presented below:

Three Months Ended March 31, 2021 Three Months Ended March 31, 2020

A summary of the status of PSUs as of June 30, 2021 and 2020 and the changes during the periods then ended is presented below:

Three Months Ended June 30, 2021 Three Months Ended June 30, 2020

Shares Weighted- Average Fair Value at

1 unchanged sentence

Non-vested at beginning of the period 1,897,671 $ 2.54 1,627,011 $ 2.51

Forfeited ( 40,000 ) $ 2.62 ( 24,852 ) $ 2.73

Vested ( 42,139 ) $ 2.75 ( 14,552 ) $ 3.00

Non-vested at end of period 1,815,532 $ 2.53 1,587,607 $ 2.50

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Six Months Ended June 30, 2021 Six Months Ended June 30, 2020

Shares Weighted- Average Fair Value at

Grant Date Shares Weighted- Average Fair Value at

Non-vested at beginning of the period 1,352,438 $ 2.50 1,664,650 $ 2.53

Granted 990,000 $ 2.62 911,460 $ 2.82

9 unchanged sentences

There was no cash flow impact resulting from the grants.

No stock options were granted during the three months ended March 31, 2021 and 2020.

A summary of the status of options previously granted as of March 31, 2021 and 2020, and the changes during the periods then ended, is presented below:

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended March 31, 2021

No stock options were granted during the six months ended June 30, 2021 and 2020.

A summary of the status of options previously granted as of June 30, 2021 and 2020, and the changes during the periods then ended, is presented below:

Three Months Ended June 30, 2021

Options Weighted-Average Exercise Price Aggregate Intrinsic Value

3 unchanged sentences

Exercisable at end of period 10,000 $ 8.25 $ —

Three Months Ended March 31, 2020

Three Months Ended June 30, 2020

Options Weighted-Average Exercise Price Aggregate Intrinsic Value

Options outstanding at beginning of the period 110,000 $ 7.40 $ —

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

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

Six Months Ended June 30, 2021

Options Weighted-Average Exercise Price Aggregate Intrinsic Value

Options outstanding at beginning of the period 110,000 $ 7.40 $ —

Forfeited ( 100,000 ) $ 7.32 $ —

1 unchanged sentence

Exercisable at end of period 10,000 $ 8.25 $ —

The weighted-average remaining contractual term of options exercisable at March 31, 2021 is 0.2 years.

The following table summarizes information about options outstanding as of March 31, 2021:

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 $ —

The weighted-average remaining contractual term of options exercisable at June 30, 2021 is 0.3 years.

The following table summarizes information about options outstanding as of June 30, 2021:

Exercise Price Options Outstanding and Exercisable Weighted-

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$ 8.00 - $ 8.99

SEGMENT INFORMATION

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.

The Company’s foreign operations are comprised of a portion of the eFinancialCareers services, which operate in the United Kingdom, Europe and the Asia Pacific regions.

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.

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended March 31,

United States $ 27,057 $ 29,996

United Kingdom 3,090 3,674

EMEA and APAC (1)

Non-United States 5,576 6,637

Total revenues $ 32,633 $ 36,633

March 31, December 31,

Long-lived assets 2:

United States $ 33,223 $ 33,838

United Kingdom 5,829 6,277

EMEA and APAC (1)

Non-United States 6,491 7,111

Total long-lived assets $ 39,714 $ 40,949

(1) Europe (excluding United Kingdom), the Middle East and Africa (“EMEA”) and Asia-Pacific (“APAC”).

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

EARNINGS PER SHARE

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Diluted EPS is computed based on the weighted-average number of shares of common stock outstanding plus common stock equivalents, where dilutive.

For the three month period 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 0.4 million and 1.8 million shares for the three month periods ended March 31, 2021 and 2020, respectively.

For the three month period ended June 30, 2021 and for the six month period ended June 30, 2020, 0.4 million and 1.4 million dilutive shares, respectively, 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 1.9 million and 1.7 million shares for the three and six month periods ended June 30, 2021 and approximately 2.1 million and 2.0 million shares for the three and six month periods ended June 30, 2020, 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,

2021 2020 2021 2020

Income (loss) from continuing operations $ ( 212 ) $ 1,162 $ 1,800 $ ( 6,373 )

Income (loss) from discontinued operations, net of tax $ ( 29,999 ) $ 700 $ ( 29,340 ) $ 1,685

Net income (loss) $ ( 30,211 ) $ 1,862 $ ( 27,540 ) $ ( 4,688 )

2 unchanged sentences

Weighted-average shares outstanding—diluted 47,227 49,691 48,854 48,781

Basic earnings (loss) per share - continuing operations $ — $ 0.02 $ 0.04 $ ( 0.13 )

Diluted earnings (loss) per share - continuing operations $ — $ 0.02 $ 0.04 $ ( 0.13 )

Basic earnings (loss) per share - discontinued operations $ ( 0.64 ) $ 0.01 $ ( 0.62 ) $ 0.03

Diluted earnings (loss) per share - discontinued operations $ ( 0.64 ) $ 0.01 $ ( 0.60 ) $ 0.03

Basic earnings (loss) per share $ ( 0.64 ) $ 0.04 $ ( 0.58 ) $ ( 0.10 )

Diluted earnings (loss) per share $ ( 0.64 ) $ 0.04 $ ( 0.56 ) $ ( 0.10 )

The Company’s effective tax rate was 5 % and 12 % for the three months ended March 31, 2021 and 2020, respectively.

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

statutory rate:

• A tax benefit of $ 0.5 million during the three months ended March 31, 2021, from the release of a valuation allowance related to the Company's capital loss carryforward.

• A tax deficiency of $ 0.4 million during the three months ended March 31, 2020, 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.

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

• A tax benefit of $ 0.2 million during the three months ended March 31, 2020, from the expiration of the statute of limitations in certain foreign jurisdictions.

The Company’s effective tax rate was 22 % and 3 % for the three and six months ended June 30, 2021, respectively, and 22 % and 12 % for the three and six months ended June 30, 2020, respectively.

In addition to state income taxes and the allocation of income (loss) between jurisdictions, the following items caused the effective tax rate to differ from the U.S.

statutory rate:

• A tax benefit of $ 0.4 million during the six months ended June 30, 2021, from the release of a valuation allowance related to the Company's capital loss carryforward.

• A tax deficiency of $ 0.4 million during the six months ended June 30, 2020, related to the vesting or settlement of share-based compensation awards.

• Tax expense of $ 0.4 million during the six months ended June 30, 2020, related to the nondeductible impairment of an equity investment.

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