What changed in this filing

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Item 1. Financial Statements

2022-08-03 compared with 2022-05-04 · 188 added, 116 removed, 461 unchanged (40% of the section changed)

52 unchanged sentences

(in thousands, except per share amounts)

Three Months Ended March 31,

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

2022 2021 2022 2021

Revenues $ 37,057 $ 28,721 $ 71,391 $ 55,397

6 unchanged sentences

Total operating expenses 36,152 28,233 69,858 55,093

Operating income (loss) 628 ( 184 )

Operating income 905 488 1,533 304

Income from equity method investment 361 — 516 —

Gain (loss) on investments 320 ( 674 ) 320 1,839

Interest expense and other ( 298 ) ( 87 ) ( 543 ) ( 282 )

Gain on investment — 2,513

Income before income taxes 538 2,134

Income (loss) before income taxes 1,288 ( 273 ) 1,826 1,861

Income tax expense (benefit) ( 162 ) ( 61 ) ( 925 ) 61

Income from continuing operations 1,301 2,012

Income from discontinued operations, net of tax — 659

Net income $ 1,301 $ 2,671

Income (loss) from continuing operations 1,450 ( 212 ) 2,751 1,800

Loss from discontinued operations, net of tax — ( 29,999 ) — ( 29,340 )

Net income (loss) $ 1,450 $ ( 30,211 ) $ 2,751 $ ( 27,540 )

Basic earnings per share - continuing operations $ 0.03 $ — $ 0.06 $ 0.04

Diluted earnings per share - continuing operations $ 0.03 $ — $ 0.06 $ 0.04

Basic earnings per share - discontinued operations $ — $ 0.01

Diluted earnings per share - discontinued operations $ — $ 0.01

Basic earnings per share $ 0.03 $ 0.06

Diluted earnings per share $ 0.03 $ 0.05

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

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

Basic earnings (loss) per share $ 0.03 $ ( 0.64 ) $ 0.06 $ ( 0.58 )

Diluted earnings (loss) per share $ 0.03 $ ( 0.64 ) $ 0.06 $ ( 0.56 )

Weighted-average basic shares outstanding 44,682 47,227 44,692 47,111

4 unchanged sentences

(in thousands)

Three Months Ended March 31,

Net income $ 1,301 $ 2,671

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

2022 2021 2022 2021

Net income (loss) $ 1,450 $ ( 30,211 ) $ 2,751 $ ( 27,540 )

Other comprehensive income:

Foreign currency translation adjustment ( 58 ) 159 ( 50 ) 456

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

Total other comprehensive income ( 58 ) 28,222 ( 50 ) 28,519

Comprehensive income $ 1,309 $ 2,968

Comprehensive income (loss) $ 1,392 $ ( 1,989 ) $ 2,701 $ 979

See accompanying notes to the condensed consolidated financial statements.

17 unchanged sentences

Balance at March 31, 2022 — $ — 76,114 $ 762 $ 244,065 26,903 $ ( 162,099 ) $ 25,530 $ ( 53 ) $ 108,205

Net income 1,450 1,450

Other comprehensive income (loss) - translation adjustments ( 58 ) ( 58 )

Stock-based compensation 2,456 2,456

Restricted stock forfeited or withheld to satisfy tax obligations ( 26 ) ( 1 ) — 59 ( 348 ) ( 349 )

Performance-Based Restricted Stock Units forfeited or withheld to satisfy tax obligations — — — 5 ( 22 ) ( 22 )

Purchase of treasury stock under stock repurchase plan 625 ( 3,701 ) ( 3,701 )

Issuance of common stock upon ESPP purchase 29 — 124 124

Balance at June 30, 2022 — $ — 76,117 $ 761 $ 246,645 27,592 $ ( 166,170 ) $ 26,980 $ ( 111 ) $ 108,105

Preferred Stock Common Stock Additional

13 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

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 $ 1,301 $ 2,671

Net income (loss) $ 2,751 $ ( 27,540 )

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

4 unchanged sentences

Income from equity method investment ( 516 ) —

Gain on investment — ( 2,513 )

Gain on investments ( 320 ) ( 1,839 )

Change in accrual for unrecognized tax benefits 194 82

Loss on disposition of discontinued operations — 30,203

Changes in operating assets and liabilities:

8 unchanged sentences

Cash flows from (used in) investing activities:

Cash transferred with discontinued operations — ( 2,951 )

Cash received from sale of investment 320 —

Purchases of fixed assets ( 8,530 ) ( 6,822 )

3 unchanged sentences

Proceeds from long-term debt 15,000 5,000

Financing costs paid ( 515 ) —

Payments under stock repurchase plan ( 11,200 ) ( 3,444 )

Purchase of treasury stock related to vested restricted and performance stock units ( 4,572 ) ( 1,826 )

Proceeds from issuance of common stock through ESPP 124 —

Net cash flows used in financing activities ( 9,163 ) ( 9,270 )

13 unchanged sentences

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, 2021 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “Annual Report on Form 10-K”).

Operating results for the three-month period ended March 31, 2022 are not necessarily indicative of the results to be achieved for the full year.

Operating results for the six-month period ended June 30, 2022 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, 2022.

There have been no significant changes in the Company’s assumptions regarding critical accounting estimates during the six-month period ended June 30, 2022.

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

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

As a result, the eFC business was deconsolidated from the Company's 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.

As a result, the eFC business was deconsolidated from the Company's condensed consolidated balance sheets and statements of operations as of June 30, 2021 and is reflected as a discontinued operation for all periods presented on or before June 30, 2021.

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.

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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.

As a result, t he Company has a single reportable segment, Tech-focused, which includes 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.

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As a basis for considering assumptions, a three-tier fair value hierarchy is used, which prioritizes the inputs used in measuring fair value as follows:

• Level 1 – Quoted prices for identical instruments in active markets.

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

• Level 1 – Quoted prices for identical instruments in active markets.

• 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.

1 unchanged sentence

The carrying amounts reported in the condensed consolidated balance sheets for cash and cash equivalents, accounts receivable, other assets, accounts payable and accrued expenses and long-term debt approximate their fair values.

Investments, non-current that are carried at fair value use a discounted cash flow technique based on the probability of one or more possible outcomes, based on Level 3 inputs, which inputs and fair value did not change during the three-month period ended March 31, 2022.

The fair value of the long-term debt was estimated using present value techniques and market based interest rates and credit spreads.

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The results of discontinued operations on the condensed consolidated statements of operations were as follows (in thousands):

Three Months Ended March 31,

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

Revenues $ 6,173 $ 12,130

1 unchanged sentence

Operating income 627 1,309

Other income 2

Income before income taxes 684

Loss on disposition of discontinued operations 1

( 30,203 ) ( 30,203 )

Other income (expense) ( 1 ) 1

Loss before income taxes ( 29,577 ) ( 28,893 )

Income tax expense 422 447

Net income $ 659

Net loss $ ( 29,999 ) $ ( 29,340 )

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

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

DHI GROUP, INC.

1 unchanged sentence

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

Three Months Ended March 31,

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

Depreciation $ 309 $ 774

10 unchanged sentences

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,

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

2022 2021 2022 2021

$ 26,823 $ 20,583 $ 51,457 $ 39,634

ClearanceJobs 10,234 8,138 19,934 15,763

3 unchanged sentences

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, 2022 As of December 31, 2021

As of June 30, 2022 As of December 31, 2021

Receivables $ 18,342 $ 18,385

11 unchanged sentences

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, 2022 March 31, 2021

Three Months Ended Six Months Ended

June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021

Revenue recognized in the period from:

9 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,

2022 2021 2022 2021

Operating lease cost (1)

$ 535 $ 558 $ 1,081 $ 1,122

Sublease income ( 127 ) ( 180 ) ( 250 ) ( 360 )

2 unchanged sentences

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:

Operating cash flows from operating leases $ 703 $ 1,221

Right-of-use assets obtained in exchange for lease obligations:

Operating leases $ — $ —

DHI GROUP, INC.

1 unchanged sentence

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

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Operating lease right-of-use-assets $ 5,981 $ 6,888

9 unchanged sentences

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

No impairment was recorded during the three-month periods ended March 31, 2022 and 2021.

As of March 31, 2022, future operating lease payments were as follows (in thousands):

No impairment was recorded during the three and six month periods ended June 30, 2022 and 2021.

As of June 30, 2022, future operating lease payments were as follows (in thousands):

Operating Leases

April 1, 2022 through December 31, 2022 $ 2,029

July 1, 2022 through December 31, 2022 $ 1,354

2027 and thereafter 83

2 unchanged sentences

Total $ 8,191

As of March 31, 2022 the Company has no additional operating or finance leases that have not yet commenced.

As of June 30, 2022 the Company has no additional operating or finance leases that have not yet commenced.

Investments, Current, at Fair Value

15 unchanged sentences

The investment is recorded as a trading security at fair value with realized and unrealized gains and losses included in earnings.

The Note is recorded at $ 3.0 million as of March 31, 2022 and December 31, 2021 and there was no gain or loss included in earnings during the three months ended March 31, 2022.

The Note is recorded at $ 3.0 million as of June 30, 2022 and December 31, 2021 and there was no gain or loss included in earnings during the three and six month periods ended June 30, 2022.

Investments, Non-current

2 unchanged sentences

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 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, 2022.

During the second quarter of 2022, the Company sold its 40 % interest in Rigzone to Rigzone management for $ 0.3 million.

At the time of the sale, the recorded value of the investment was zero.

Accordingly, the Company recognized a $ 0.3 million gain on sale, which was included in gain (loss) on investment on the condensed consolidated statements of operations.

As further described in Notes 1 and 4, on June 30, 2021, the Company transferred majority ownership and control of its eFC business to eFC's management, while retaining a 40 % common share interest with zero proceeds received from the transfer.

8 unchanged sentences

The difference between the Company's recorded value and its equity in net assets of eFC is amortized against the recorded value of the investment in accordance with ASC 323 Investments - Equity Method and Joint Ventures.

The amortization was not material for the three months ended March 31, 2022.

The amortization was not material for the three and six months ended June 30, 2022.

The recorded value is further adjusted based on the Company's proportionate share of eFC's net income and is recorded three months in arrears.

During the first quarter of 2022, the Company recorded $ 0.2 million of income related to its proportionate share of eFC's net income, net of currency translation adjustments and amortization of the basis difference.

For the three and six month periods ended June 30, 2022, the Company recorded $ 0.4 million and $ 0.5 million, respectively, of income related to its proportionate share of eFC's net income, net of currency translation adjustments and amortization of the basis difference.

At January 1, 2018, the Company held preferred stock representing a 10.0 % interest in the fully diluted shares of a tech skills assessment company.

3 unchanged sentences

The investment was carried at its original cost of $ 2.0 million and was included in the other assets section of the condensed consolidated balance sheets.

During the three months ended March 31, 2020, based on the investment's historical cash burn rate, uncertainty of its ability to meet revenue and cash flow projections, current liquidity position, lack of access to additional capital, and impacts from the COVID-19 pandemic, the

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

The investment is recorded at zero as of June 30, 2022 and December 31, 2021.

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Company determined the value to be zero.

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

As of March 31, 2022, 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 March 31, 2022.

ACQUIRED INTANGIBLE ASSETS, NET

3 unchanged sentences

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

As of March 31, 2022 and December 31, 2021, the Company had an indefinite-lived acquired intangible asset of $ 23.8 million related to the Dice trademarks and brand name.

No impairment was recorded during the three-month periods ended March 31, 2022 and 2021.

As of June 30, 2022 and December 31, 2021, the Company had an indefinite-lived acquired intangible asset of $ 23.8 million related to the Dice trademarks and brand name.

No impairment was recorded during the three and six month periods ended June 30, 2022 and 2021.

The projections utilized in the October 1, 2021 analysis included increasing revenues at rates approximating industry growth projections.

2 unchanged sentences

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, 2022 and projections of future results have met or exceeded those included in the projections utilized in the October 1, 2021 analysis.

The Company's operating results attributable to the Dice trademarks and brand name through June 30, 2022 and projections of future results have met or exceeded those included in the projections utilized in the October 1, 2021 analysis.

In the October 1, 2021 analysis, the Company utilized a relief from royalty rate method to value the Dice trademarks and brand name using a royalty rate of 4.0 % based on comparable industry studies and a discount rate of 12.5 %.

4 unchanged sentences

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

Goodwill for the Tech-focused reporting unit as of March 31, 2022 and December 31, 2021 was $ 128.1 million.

There were no changes to goodwill from December 31, 2021 to March 31, 2022.

Goodwill for the Tech-focused reporting unit as of June 30, 2022 and December 31, 2021 was $ 128.1 million.

There were no changes to goodwill from December 31, 2021 to June 30, 2022.

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

The results of the impairment tests indicated that the fair value of the Tech-focused reporting unit was substantially in excess of the carrying value as of October 1, 2021.

Results for the Tech-focused reporting unit for the fourth quarter of 2021 and the first quarter of 2022 and estimated future results as of March 31, 2022 have exceeded the projections used in the October 1, 2021 analysis.

As a result, the Company believes it is not more likely than not that the fair value of the reporting unit is less than the carrying value as of March 31, 2022.

Therefore, no quantitative impairment test was performed as of March 31, 2022.

No impairment was recorded during the three-month periods ended March 31, 2022 and 2021.

The projections utilized in the October 1, 2021 analysis included increasing revenues at rates approximating industry growth projections.

The results of the impairment test indicated that the fair value of the Tech-focused reporting unit was substantially in excess of the carrying value as of October 1, 2021.

Results for the Tech-focused reporting unit for the fourth quarter of 2021 and the first six months of 2022 and estimated future results as of June 30, 2022 have exceeded the projections used in the October 1, 2021 impairment test.

As a result, the Company believes it is not more likely than not that the fair value of the reporting unit is less than the carrying value as of June 30, 2022.

Therefore, no quantitative impairment test was performed as of June 30, 2022.

No impairment was recorded during the three and six month periods ended June 30, 2022 and 2021.

The projections utilized in the October 1, 2021 impairment test included increasing revenues at rates approximating industry growth projections.

The Company’s ability to achieve these revenue projections may be impacted by, among other things, uncertainty related to COVID-19, competition in the technology recruiting market, challenges in developing and introducing new products and product enhancements to the market and the Company’s ability to attribute value delivered to customers.

The October 1,

The October 1, 2021 impairment test included operating margins during the year ending December 31, 2021 that approximate operating margins for the year ended December 31, 2020 and then increasing modestly.

If future cash flows that are attributable to the Tech-focused reporting unit are not achieved, the Company could realize an impairment in a future period.

The discount rate applied for the Tech-focused reporting unit in the October 1, 2021 impairment test was 11.5 %.

An increase to the discount

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2021 analysis included operating margins during the year ending December 31, 2021 that approximate operating margins for the year ended December 31, 2020 and then increasing modestly.

If future cash flows that are attributable to the Tech-focused reporting unit are not achieved, the Company could realize an impairment in a future period.

The discount rate applied for the Tech-focused reporting unit in the October 1, 2021 analysis was 11.5 %.

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.

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

It is reasonably possible that changes in judgments, assumptions and estimates the Company made in assessing the fair value of goodwill could cause the Company to consider some portion or all of the goodwill of the Tech-focused reporting unit to become impaired.

9 unchanged sentences

Changes in our strategy and/or market conditions could significantly impact these judgments and require adjustments to recorded amounts of goodwill.

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

Credit Agreement —In June 2022, the Company, together with Dice Inc.

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

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

The June 2021 amendment modified the credit agreement to allow for the disposition of the eFC business, removed the option to borrow in Euros and Sterling, and incorporated certain form updates.

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.

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

The margin ranges from 1.75 % to 2.50 % on LIBOR loans and 0.75 % to 1.50 % on base rate loans, determined by the Company’s most recent consolidated leverage ratio.

(collectively, the “Borrowers”), entered into a Third Amended and Restated Credit Agreement (the “Credit Agreement”), which matures in June 2027 and replaces the Company's prior Old Credit Agreement (defined below).

The Credit Agreement provides for a revolving loan facility of $ 100 million ($ 90 million under the Old Credit Agreement), with an expansion option of $ 50 million, bringing the total facility to $ 150 million, as permitted under the terms of the Credit Agreement.

At the closing of the Credit Agreement, the Company borrowed $ 30 million to repay, in full, all outstanding indebtedness, including accrued interest, under the Old Credit Agreement.

Unamortized debt issuance costs from the previous credit agreement of $ 0.2 million and debt issuance costs of $ 0.5 million related to the new agreement were recorded as other assets on the condensed consolidated balance sheets as of June 30, 2022 and will be recorded to interest expense over the term of the Credit Agreement.

Borrowings under the Credit Agreement denominated in U.S.

dollars bear interest, payable at least quarterly, at the Company’s option, at a Secured Overnight Financing Rate ("SOFR") rate or a base rate plus a margin.

Borrowings under the credit agreement denominated in pounds sterling, if any, bear interest at the Sterling Overnight Index Average ("SONIA") rate plus a margin.

The margin ranges from 2.00 % to 2.75 % on SOFR and SONIA loans and 1.00 % to 1.75 % on base rate loans, determined by the Company’s most recent consolidated leverage ratio.

The Company incurs a commitment fee ranging from 0.35 % to 0.50 % on any unused capacity under the revolving loan facility, determined by the Company’s most recent consolidated leverage ratio.

There were no borrowings in pounds sterling as of June 30, 2022 and December 31, 2021.

The facility may be prepaid at any time without penalty.

The Credit Agreement contains various customary affirmative and negative covenants and also contains certain financial covenants, including a consolidated leverage ratio and a consolidated interest coverage ratio.

Borrowings are allowed under the Credit Agreement to the extent the consolidated leverage ratio, calculated on a pro forma basis, is equal to or less than 2.50 to 1.00 .

Borrowings are allowed under the Credit Agreement to the extent the consolidated leverage ratio is equal to or less than 2.50 to 1.00 , subject to the terms of the Credit Agreement.

Negative covenants include restrictions on incurring certain liens;

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and incurring additional indebtedness.

Restricted payments are allowed under the Credit Agreement to the extent the consolidated leverage ratio, calculated on a pro forma basis, is equal to or less than 2.00 to 1.00 , plus an additional $ 5.0 million of restricted payments.

The Credit Agreement also provides that the payment of obligations may be accelerated upon the occurrence of customary events of default, including, but not limited to, non-payment, change of control, or insolvency.

As of March 31, 2022, 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.

As of June 30, 2022, the Company was in compliance with all of the financial covenants under the Credit Agreement.

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The amounts borrowed as of March 31, 2022 and December 31, 2021 are as follows (dollars in thousands):

The obligations under the Credit Agreement are guaranteed by one of the Company’s wholly-owned subsidiaries and secured by substantially all of the assets of the Borrowers and the guarantors.

Previous Credit Agreement - The Borrowers previously maintained a Second Amended and Restated Credit Agreement (the "Old Credit Agreement"), which was scheduled to mature in November 2023.

The Old Credit Agreement, when entered into during November 2018, provided for a revolving loan facility of $ 90 million, with an expansion option of $ 50 million, bringing the total facility to $ 140 million, as permitted by the terms of the Old Credit Agreement.

Borrowings under the Old Credit Agreement accrued interest, at the Company's option, at a LIBOR rate or a base rate plus a margin.

The margin ranged from 1.75 % to 2.50 % on LIBOR loans and 0.75 % to 1.50 % on base rate loans, determined by the Company's most recent consolidated leverage ratio.

The Company incurred a commitment fee ranging from 0.35 % to 0.50 % on any unused capacity under the revolving loan facility, determined by the Company’s most recent consolidated leverage ratio.

The was no penalty for prepayment of the Old Credit Agreement.

The amounts borrowed as of June 30, 2022 and December 31, 2021 are as follows (dollars in thousands):

2022 December 31,

1 unchanged sentence

Revolving credit facility $ 30,000 $ 23,000

deferred financing costs, net of accumulated amortization of $ 503 and $ 467

( 233 ) ( 270 )

deferred financing costs, net of accumulated amortization of $ 467 as of December 31, 2021 1

Long-term debt, net $ 30,000 $ 22,730

1 unchanged sentence

Interest rates:

LIBOR rate loans:

SOFR/LIBOR rate loans:

Interest margin 2.00 % 1.75 %

1 unchanged sentence

Commitment fee 0.35 % 0.30 %

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

(1) In connection with the new Credit Agreement entered into during the three months ended June 30, 2022, the Company recorded deferred financing costs of $0.7 million to other assets on the condensed consolidated balance sheets.

Accumulated amortization as of June 30, 2022 was approximately zero.

There are no scheduled principal payments until maturity of the Credit Agreement in June 2027.

COMMITMENTS AND 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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(3) On February 15, 2022, the Company announced that its Board of Directors approved a new stock repurchase program that permits the purchase of up to $ 15.0 million of the Company's common stock through February 2023.

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of March 31, 2022 the value of shares that may yet be purchased under the current plan was $ 13.1 million.

As of June 30, 2022 the value of shares that may yet be purchased under the current plan was $ 9.4 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,

2022 2021 2022 2021

Shares repurchased (1)

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(2) Average price paid per share includes costs associated with the repurchases.

There were 20,665 and 11,394 unsettled share repurchases as of March 31, 2022 and 2021, respectively.

There were 24,758 and 135,330 unsettled share repurchases as of June 30, 2022 and 2021, respectively.

Stock Repurchases Pursuant to the 2012 Omnibus Equity Award Plan —Under the 2012 Omnibus Equity Award Plan, as further described in note 13 to the condensed consolidated financial statements, the Company repurchases its common stock withheld for income tax from the vesting of employee restricted stock or Performance-Based Restricted Stock Units (“PSUs”).

1 unchanged sentence

Purchases of the Company’s common stock pursuant to the 2012 Omnibus Equity Award Plan were as follows:

Three Months Ended March 31,

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

2022 2021 2022 2021

Shares repurchased upon restricted stock/PSU vesting 64,381 151,225 837,429 660,124

5 unchanged sentences

Stock-based compensation disclosures within this footnote include expense and shares related to the eFC business through June 30, 2021.

The Company recorded total stock-based compensation expense of $ 2.2 million and $ 1.8 million during each of the three-month periods ended March 31, 2022 and 2021, respectively.

At March 31, 2022, there was $ 18.1 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.

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company recorded total stock-based compensation expense of $ 2.5 million and $ 4.7 million during the three and six month periods ended June 30, 2022, respectively, and $ 1.8 million and $ 3.4 million during the three and six month periods ended June 30, 2021, respectively.

At June 30, 2022, there was $ 16.8 million of unrecognized compensation expense related to unvested awards, which is expected to be recognized over a weighted-average period of approximately 1.4 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.

5 unchanged sentences

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 March 31, 2022 and 2021 and the changes during the periods then ended is presented below:

Three Months Ended March 31, 2022 Three Months Ended March 31, 2021

A summary of the status of restricted stock awards as of June 30, 2022 and 2021 and the changes during the periods then ended is presented below:

Three Months Ended June 30, 2022 Three Months Ended June 30, 2021

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

4 unchanged sentences

Non-vested at end of period 2,686,073 $ 3.77 3,476,056 $ 2.55

Six Months Ended June 30, 2022 Six Months Ended June 30, 2021

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

Non-vested at beginning of the period 3,371,832 $ 2.80 3,877,853 $ 2.49

Granted 932,500 $ 5.17 1,759,683 $ 2.68

Forfeited ( 108,716 ) $ 3.18 ( 532,134 ) $ 2.69

Vested ( 1,509,543 ) $ 2.52 ( 1,629,346 ) $ 2.49

Non-vested at end of period 2,686,073 $ 3.77 3,476,056 $ 2.55

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

These shares are granted under two compensation agreements that are for services provided by the employees.

These shares are granted under compensation agreements that are for services provided by the employees.

The fair value of the PSUs is measured at the grant date fair value of the award, which was determined based on an analysis of the probable performance outcomes.

2 unchanged sentences

There was no cash flow impact resulting from the grants.

A summary of the status of PSUs as of March 31, 2022 and 2021 and the changes during the periods then ended is presented below:

Three Months Ended March 31, 2022 Three Months Ended March 31, 2021

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

A summary of the status of PSUs as of June 30, 2022 and 2021 and the changes during the periods then ended is presented below:

Three Months Ended June 30, 2022 Three Months Ended June 30, 2021

Shares Weighted- Average Fair Value at

1 unchanged sentence

Non-vested at beginning of the period 2,125,049 $ 3.48 1,897,671 $ 2.54

Forfeited — $ — ( 40,000 ) $ 2.62

Vested ( 14,553 ) $ 3.00 ( 42,139 ) $ 2.75

Non-vested at end of period 2,110,496 $ 3.48 1,815,532 $ 2.53

Six Months Ended June 30, 2022 Six Months Ended June 30, 2021

Shares Weighted- Average Fair Value at

Grant Date Shares Weighted- Average Fair Value at

Non-vested at beginning of the period 1,593,775 $ 2.62 1,352,438 $ 2.50

1,553,332 $ 3.77 990,000 $ 2.62

3 unchanged sentences

Non-vested at end of period 2,110,496 $ 3.48 1,815,532 $ 2.53

(1) PSUs granted for the three-month period ended March 31, 2022 includes 853,332 additional PSUs granted related to the bookings achievement for the performance period ended December 31, 2021.

PSUs forfeited for the three-month period ended March 31, 2021 includes 48,633 PSUs forfeited related to the bookings achievement for the performance period ended December 31, 2020.

(1) PSUs granted includes 853,332 additional PSUs granted in the first quarter of 2022 related to the bookings achievement for the performance period ended December 31, 2021.

(2)PSUs forfeited includes 48,633 PSUs forfeited in the first quarter 2022 related to the bookings achievement for the performance period ended December 31, 2020.

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

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, 2022 and 2021.

No stock options were granted during the six month periods ended June 30, 2022 and 2021.

There were no options outstanding as of December 31, 2021.

A summary of options outstanding as of and for the periods ended June 30, 2021 are presented below:

Three Months Ended June 30, 2021

Options Weighted-Average Exercise Price Aggregate Intrinsic Value

Options outstanding at beginning of the period 25,000 $ 7.50 $ —

Forfeited ( 15,000 ) $ 7.00 $ —

Options outstanding at end of period 10,000 $ 8.25 $ —

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

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

There were no options exercisable as of or during the period ended March 31, 2022.

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

Three Months Ended March 31, 2021

Six Months Ended June 30, 2021

Options Weighted-Average Exercise Price Aggregate Intrinsic Value

10 unchanged sentences

Individual employee purchases are limited to $ 25,000 per calendar year, based on the fair market value of the shares on the purchase date.

The first offering period commenced January 1, 2022.

During the six months ended June 30, 2022, 29,253 shares were issued under the plan.

No shares were issued during the six months ended June 30, 2021.

EARNINGS PER SHARE

2 unchanged sentences

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,

2022 2021 2022 2021

Income from continuing operations $ 1,450 $ ( 212 ) $ 2,751 $ 1,800

Income from discontinued operations, net of tax $ — $ 659

Net income $ 1,301 $ 2,671

Loss from discontinued operations, net of tax $ — $ ( 29,999 ) $ — $ ( 29,340 )

Net income (loss) $ 1,450 $ ( 30,211 ) $ 2,751 $ ( 27,540 )

Weighted-average shares outstanding—basic 44,682 47,227 44,692 47,111

Add shares issuable from stock-based awards 1

2,279 — 2,285 1,743

Weighted-average shares outstanding—diluted 46,961 47,227 46,977 48,854

1 unchanged sentence

Diluted earnings per share - continuing operations $ 0.03 $ — $ 0.06 $ 0.04

Basic earnings per share - discontinued operations $ — $ 0.01

Diluted earnings per share - discontinued operations $ — $ 0.01

Basic earnings per share $ 0.03 $ 0.06

Diluted earnings per share $ 0.03 $ 0.05

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

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

Basic earnings (loss) per share $ 0.03 $ ( 0.64 ) $ 0.06 $ ( 0.58 )

Diluted earnings (loss) per share $ 0.03 $ ( 0.64 ) $ 0.06 $ ( 0.56 )

Shares excluded from the calculation of diluted earnings per share 2

— 408 936 436

(1) For the three months ended June 30, 2021, 1.9 million shares were excluded from the computation of shares contingently issuable upon exercise as we recognized a net loss from continuing operations.

(2) Represents outstanding stock-based awards that were anti-dilutive and excluded from the calculation of diluted earnings per share.

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company’s effective tax rate was ( 142 )% and 6 % for the three months ended March 31, 2022 and 2021, respectively.

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

The Company’s effective tax rate was ( 13 )% and ( 51 )% for the three and six months ended June 30, 2022, respectively, and 22 % and 3 % for the three and six months ended June 30, 2021, respectively.

In addition to state income taxes, the following items caused the effective tax rate to differ from the U.S.

statutory rate:

• A tax benefit of $ 0.8 million during the three months ended March 31, 2022, from the vesting or settlement of share-based compensation awards.

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

• Tax benefits of $ 0.2 million and $ 1.0 million during the three and six months ended June 30, 2022, from the vesting of share-based compensation awards.

• A tax benefit of $ 0.1 million during the three and six months ended June 30, 2022, from research tax credits.

• Tax benefits of $ 0.1 million during the three and six months ended June 30, 2022, and $ 0.4 million during the six months ended June 30, 2021, from the release of a valuation allowance on the Company's capital loss carryforward.

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