dhx-20230331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


FORM 10-Q

(Mark One)


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023

______________________________________________


☐			TRANSITION PERIOD PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

Commission File Number: 001-33584

____________________________________________

DHI Group, Inc.

(Exact name of Registrant as specified in its Charter)

______________________________________________


Delaware						20-3179218
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)
6465 South Greenwood Plaza, Suite 400						80111
Centennial, Colorado						(Zip Code)
(Address of principal executive offices)

(212) 448-6605

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

_______________________________________________


Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	DHX	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☑ Non-accelerated filer ☐ Smaller Reporting Company ☑ Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of May 5, 2023, there were 47,430,469 shares of the registrant’s common stock, par value $.01 per share, outstanding.

Table of Contents

DHI GROUP, INC.

TABLE OF CONTENTS


		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Unaudited Financial Statements	2
	Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022
	Condensed Consolidated Statements of Operations for the three-month periods ended March 31, 2023 and 2022
	Condensed Consolidated Statements of Comprehensive Income for the three-month periods ended March 31, 2023 and 2022
	Condensed Consolidated Statements of Stockholders' Equity for the three-month periods ended March 31, 2023 and 2022
	Condensed Consolidated Statements of Cash Flows for the three-month periods ended March 31, 2023 and 2022
	Notes to Condensed Consolidated Financial Statements

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	18

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28

Item 4.	Controls and Procedures	28

PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	30

Item 1A.	Risk Factors	30

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30

Item 5.	Other Information	32

Item 6.	Exhibits	33

SIGNATURES
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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PART I

ITEM 1. Financial Statements

DHI GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(in thousands, except per share data)


	March 31, 2023		December 31, 2022
ASSETS
Current assets
Cash	$	5,368	$	3,006
Accounts receivable, net of allowance for doubtful accounts of $985 and $1,374	24,980		20,494
Prepaid and other current assets	3,815		4,294
Total current assets	34,163		27,794
Fixed assets, net	21,879		21,252
Capitalized contract costs	8,994		9,677
Operating lease right-of-use assets	6,088		6,581
Investments	5,968		5,646
Acquired intangible assets	23,800		23,800
Goodwill	128,100		128,100
Other assets	4,017		3,854
Total assets	$	233,009	$	226,704
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses	$	12,403	$	23,818
Deferred revenue	58,079		50,121
Income taxes payable	280		34
Operating lease liabilities	—		105
Total current liabilities	70,762		74,078
Deferred revenue	765		743
Operating lease liabilities	8,007		8,428
Long-term debt	46,000		30,000
Deferred income taxes	4,667		5,515
Accrual for unrecognized tax benefits	829		769
Other long-term liabilities	727		932
Total liabilities	131,757		120,465
Commitments and Contingencies (Note 10)
Stockholders’ equity
Convertible preferred stock, $.01 par value, authorized 20,000 shares; no shares issued and outstanding	—		—
Common stock, $.01 par value, authorized 240,000; issued: 78,833 and 76,442 shares, respectively; outstanding: 48,117 and 47,367 shares, respectively	790		766
Additional paid-in capital	254,495		251,632
Accumulated other comprehensive loss	(331)		(481)
Accumulated earnings	29,197		28,405
Treasury stock, 30,716 and 29,075 shares, respectively	(182,899)		(174,083)
Total stockholders’ equity	101,252		106,239
Total liabilities and stockholders’ equity	$	233,009	$	226,704
See accompanying notes to the condensed consolidated financial statements.

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DHI GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(in thousands, except per share amounts)


	Three Months Ended March 31,
	2023		2022
Revenues	$	38,620	$	34,334

Operating expenses:
Cost of revenues	4,912		4,099
Product development	4,694		3,942
Sales and marketing	16,060		13,941
General and administrative	8,208		7,766
Depreciation	4,173		3,958
Total operating expenses	38,047		33,706
Operating income	573		628
Income from equity method investment	171		155
Interest expense and other	(798)		(245)
Income (loss) before income taxes	(54)		538
Income tax benefit	(514)		(763)
Net income	$	460	$	1,301

Basic earnings per share	$	0.01	$	0.03
Diluted earnings per share	$	0.01	$	0.03

Weighted-average basic shares outstanding	43,886		44,702
Weighted-average diluted shares outstanding	45,240		47,170

See accompanying notes to the condensed consolidated financial statements.

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DHI GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)

(in thousands)


	Three Months Ended March 31,
	2023		2022
Net income	$	460	$	1,301

Other comprehensive income:
Foreign currency translation adjustment	150		8
Total other comprehensive income	150		8
Comprehensive income	$	610	$	1,309

See accompanying notes to the condensed consolidated financial statements.

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DHI GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(unaudited)

(in thousands)


	Convertible Preferred Stock			Common Stock			Additional Paid-in Capital		Treasury Stock			Accumulated Earnings		Accumulated Other Comprehensive Income (Loss)		Total
	Shares Issued	Amount		Shares Issued	Amount				Shares	Amount
Balance at December 31, 2022	—	$	—	76,442	$	766	$	251,632	29,075	$	(174,083)	$	28,405	$	(481)	$	106,239
Net income												460				460
Other comprehensive income - translation adjustments														150		150
Stock-based compensation							2,887									2,887
Restricted stock issued				1,107	11		(11)									—
Performance-Based Restricted Stock Units eligible to vest				1,288	13		(13)									—
Restricted stock forfeited or withheld to satisfy tax obligations				(4)	—		—		386	(2,278)						(2,278)
Performance-Based Restricted Stock Units forfeited or withheld to satisfy tax obligations				—	—		—		512	(3,017)						(3,017)
Purchase of treasury stock under stock repurchase plan									743	(3,521)						(3,521)
Cumulative-effect of new accounting principle (See Note 2)												332				332
Balance at March 31, 2023	—	$	—	78,833	$	790	$	254,495	30,716	$	(182,899)	$	29,197	$	(331)	$	101,252


	Convertible Preferred Stock			Common Stock			Additional Paid-in Capital		Treasury Stock			Accumulated Earnings		Accumulated Other Comprehensive Income (Loss)		Total
	Shares Issued	Amount		Shares Issued	Amount				Shares	Amount
Balance at December 31, 2021	—	$	—	73,584	$	738	$	241,854	24,828	$	(150,398)	$	24,229	$	(61)	$	116,362
Net income												1,301				1,301
Other comprehensive income - translation adjustments														8		8
Stock-based compensation							2,235									2,235
Restricted stock issued				932	9		(9)									—
Performance-Based Restricted Stock Units eligible to vest				1,773	17		(17)									—
Restricted stock forfeited or withheld to satisfy tax obligations				(82)	(1)		1		417	(2,309)						(2,309)
Performance-Based Restricted Stock Units forfeited or withheld to satisfy tax obligations				(93)	(1)		1		356	(1,893)						(1,893)
Purchase of treasury stock under stock repurchase plan									1,302	(7,499)						(7,499)
Balance at March 31, 2022	—	$	—	76,114	$	762	$	244,065	26,903	$	(162,099)	$	25,530	$	(53)	$	108,205

See accompanying notes to the condensed consolidated financial statements.

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DHI GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)


	Three Months Ended March 31,
	2023		2022
Cash flows from (used in) operating activities:
Net income	$	460	$	1,301
Adjustments to reconcile net income to net cash flows from (used in) operating activities:
Depreciation	4,173		3,958
Deferred income taxes	(848)		(1,823)
Amortization of deferred financing costs	36		37
Stock-based compensation	2,887		2,235
Income from equity method investment	(171)		(155)
Change in accrual for unrecognized tax benefits	60		93
Changes in operating assets and liabilities:
Accounts receivable	(4,153)		(3,820)
Prepaid expenses and other assets	279		386
Capitalized contract costs	683		(483)
Accounts payable and accrued expenses	(11,382)		(3,941)
Income taxes receivable/payable	247		954
Deferred revenue	7,981		10,640
Other, net	(241)		(164)
Net cash flows from operating activities	11		9,218
Cash flows used in investing activities:
Purchases of fixed assets	(4,833)		(4,091)
Net cash flows used in investing activities	(4,833)		(4,091)
Cash flows from (used in) financing activities:
Payments on long-term debt	(3,000)		(4,000)
Proceeds from long-term debt	19,000		14,000
Payments under stock repurchase plan	(3,521)		(7,499)
Purchase of treasury stock related to vested restricted and performance stock units	(5,295)		(4,202)
Net cash flows from (used in) financing activities	7,184		(1,701)
Net change in cash for the period	2,362		3,426
Cash, beginning of period	3,006		1,540
Cash, end of period	$	5,368	$	4,966

See accompanying notes to the condensed consolidated financial statements.

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DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements of DHI Group, Inc. (“DHI” or the “Company” or "we" or "us") have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Certain information and disclosures normally included in annual audited consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) have been omitted and condensed pursuant to such rules and regulations. In the opinion of the Company’s management, all adjustments (consisting of only normal and recurring accruals) have been made to present fairly the financial position, results of operations and cash flows of the Company for the periods presented. 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, 2022 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (the “Annual Report on Form 10-K”). Operating results for the three-month period ended March 31, 2023 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. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the period. Management believes the most complex and sensitive judgments, because of their significance to the condensed consolidated financial statements, result primarily from the need to make estimates about the effects of matters that are inherently uncertain. 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, 2023.

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, the 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.

2. NEW ACCOUNTING STANDARDS

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 changes how entities will account for credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance replaces the current "incurred loss" model with an "expected loss" model that requires consideration of a broader range of information to estimate expected credit losses over the lifetime of a financial asset. ASU 2016-13 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2022 for Smaller Reporting Companies. On January 1, 2023, under the modified retrospective method as required by the standard, the Company recorded a cumulative-effect adjustment of $0.3 million to increase accumulated earnings and reduce the allowance for doubtful accounts. Prior period amounts were not adjusted, and will continue to be reported under the accounting standards in effect for the period presented.

3. FAIR VALUE MEASUREMENTS

The FASB ASC topic on Fair Value Measurements and Disclosures defines fair value, establishes a framework for measuring fair value and requires certain disclosures for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. 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.

•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.

•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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DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The carrying amounts reported in the condensed consolidated balance sheets for cash, accounts receivable, other assets, accounts payable and accrued expenses and long-term debt approximate their fair values. Investments, non-current that were carried at fair value, prior to the conversion to preferred shares as described in Note 6, used 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 2022 period prior to the conversion. The estimated fair value of long-term debt is based on Level 2 inputs.

Certain assets and liabilities are measured at fair value on a non-recurring basis as they are subject to fair value adjustments in certain circumstances, for example, when there is evide

SEC Form 10-Q filed by DHI Group Inc.