Dhi Group, Inc. · NYSE:DHX
Dhi — Sidoti 2020 Virtual Microcap Conference
25 slides from Dhi's conference presentation, Nov 19, 2020
Slide 1: Sidoti 2020 Virtual Microcap Conference
Sidoti 2020 Virtual Microcap Conference November 19, 2020 NYSE: DHX
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation and oral statements made from time to time by our representatives contain forward-looking statements. You should not place undue reliance on those statements because they are subject to numerous uncertainties and factors relating to our operations and bus
Slide 3: Our vision is to create indispensable career marketplaces
Our vision is to create indispensable career marketplaces to match the highest quality candidates with the right client career opportunities.
Slide 4: Company Overview
Company Overview • Founded: 1990 • Year-end: 12/31/19 • Listed: NYSE: DHX (2007) • Diluted Shares Outstanding: ~52M • Headquarters: Denver, CO • FY 2019 Financial Results • Employees: ~ 550 • Revenues: $149M • Clients: ~11,000 • Net Income: $13M • Candidate Focus: Technology Professionals • Diluted
Slide 5: Third Quarter 2020 Financial Highlights
Third Quarter 2020 Financial Highlights • Revenues: $33.3 million. Total revenues1 were down 11% YOY • Dice revenues: $19.8 million, down 13% YOY • ClearanceJobs revenues: $7.3 million, up 16% YOY • eFinancialCareers revenues: $6.1 million, down 23% YOY • Net Loss: $27.3 million, which was negativel
Slide 6: Three Tech-Focused Brands
Three Tech-Focused Brands Leading database of security cleared Focused on technologists, managing Global financial services careers platform professionals. Transformed from job over 9 million US profiles ~30% of job postings are in technology board to career marketplace. Geographic Focus United Stat
Slide 7: Business Model Elements
Business Model Elements • Clients pay for job advertising and profile/resume views • Greater than 90% Subscription Based Revenue • 70% of Annual Contracts Paid Upfront • 66% Revenue Renewal Rate* • Candidates do not pay for access to platforms 7 * Dice Renewal rates & Percentage of Annual Contracts
Slide 8: Loyal Customers
Loyal Customers Tech Candidate Marketplace ~ 5,300 Subscription Clients ~ 20% of Fortune 1000 8
Slide 9: Loyal Customers
Loyal Customers Cleared Professionals Marketplace ~ 1,700 Subscription Clients ~ 80% of top 50 US Defense Contractors 9
Slide 10: Loyal Customers
Loyal Customers Global Finance Marketplace ~ 850 Subscription Clients 75% of Global 50 Banks 10
Slide 11: The Market for Online Recruiting is Large and Growing
The Market for Online Recruiting is Large and Growing… And Technology Occupations Are The Sweet Spot Industry at a Glance Online Recruitment Sites in 2019 Key Statistics Revenue Annual Growth 19-24 Snapshot $9.5bn Profit 7.0% Businesses $1.1bn 1,460 IT Talent Generates ~15% of Online Recruiting Reve
Slide 12: Great Lockdown will accelerate digitization
Great Lockdown will accelerate digitization Companies globally must rely on tech talent to advance innovation * 12 *Global Jobs; not limited to United States Source: Microsoft Data Science whitepaper “Methodology: Digitization Capacity of the World Economy”
Slide 13: DHX: In the Midst of Transformation
DHX: In the Midst of Transformation From Job Board to Marketplace OUR MARKETPLACE APPROACH Indispensable modern marketplaces are/have: • Two-sided (buyers and sellers) • Robust search and match capabilities • Balanced, with both sides sharing info • Instant feedback mechanisms • Self-sustaining, use
Slide 14: Product Innovation
Product Innovation IntelliSearch Remote Jobs Client Team Workflow Follow, Job Alerts Job Alerts Dashboard Voice, Video Q320 Q220 Q320 Q220 Q320 Q120 Recruiter Candidate Recruiter + Private Email Favorites Messaging Profile Dashboard Client Profile Q220 Q220 Q120 Q419 Q419 Q419 14
Slide 15: Key Differentiator: Skills Mapping
Key Differentiator: Skills Mapping • Tech recruiting is all about the unique skills required by a position and the candidate profile • DHX has spent 8+ years creating a data model that captures the relationship between 100,000+ tech skills • Machine Learning allows DHX to constantly improve its skil
Slide 16: IntelliSearch
IntelliSearch • Paste entire job description, instead of title, to return results • Algorithmic search powered by predictive analysis, artificial intelligence + machine learning • Relevance results prioritize fit (skills and adjacent skills) over quantity and candidates likely- to-switch 16
Slide 17: 2020 Go-to-Market Transformation
2020 Go-to-Market Transformation • Dice and eFC Adopt ClearanceJobs Marketplace Features • New Sales Leadership • Expansion of Commercial Accounts Team • Activation of Additional Marketing Channels • ClearanceJobs Engages Government Accounts 17
Slide 18: DHI Brand Revenues
DHI Brand Revenues eFinancialCareers Revenue Decline in Q4 2019 + Q1 2020 driven by political protests in Hong Kong and COVID-19 All Brands Revenues Decline in Q2 and Q3 2020 due to impact of COVID-19 18
Slide 19: Profitability
Profitability Business Outlook Expected Adjusted EBITDA Margin1 in 20% range for Q4 2020. 1 Notes regarding the use of Non-GAAP financial measures and GAAP to Non-GAAP Reconciliation at end of document 19
Slide 20: Liquidity Snapshot
Liquidity Snapshot $25 million revolver 1Q20 draw as precaution for COVID-19 Operating Cash Flow & Capex ($ in millions) Debt & Cash ($ in millions) Operating cash flows of $22.9M in FY 2019 and $14.4M YTD 2020. Net debt1 of $10.2M as of September 30, 2020 1 Notes regarding the use of Non-GAAP finan
Slide 21: DHX Investment Thesis
DHX Investment Thesis • Tech Market for Online Recruitment Tools is Growing • Tech Market Focus Plays to our Innovation in Collecting + Mapping Skills • Leadership Team Drives Functional Strength + Focus • Demonstrated Success of Product Innovation with ClearanceJobs • Set for Operating Leverage Exp
Slide 22: NYSE: DHX
~ re Futures NNW AO. NYSE: DHX
Slide 23: Notes Regarding the Use of Non-GAAP Financial Measures
Notes Regarding the Use of Non-GAAP Financial Measures Notes Regarding the Use of Non-GAAP Financial Measures The Company has provided certain non-GAAP financial information as additional information for its operating results. These measures are not in accordance with, or an alternative for, measure
Slide 24: DHI Group, Inc. Non-GAAP Supplemental Data
DHI Group, Inc. Non-GAAP Supplemental Data (Unaudited) (USD, in thousands) Quarter 1 Quarter 2 Quarter 3 Quarter 4 Full Year Quarter 1 Quarter 2 Quarter 3 2019 2019 2019 2019 2019 2020 2020 2020 Reconciliation of Net Income to Adjusted EBITDA Net Income (loss) $ 1.6 $ 3.1 $ 4.4 $ 3.5 $ 12.6 $ (6.6)
Slide 25: DHI Group, Inc. Non-GAAP Supplemental Data
DHI Group, Inc. Non-GAAP Supplemental Data (Unaudited) Reconciliation of Diluted Earnings per Share to Adjusted Diluted Earnings Three Months Ended September 30, Nine Months Ended September 30, per Share: 2020 2019 2020 2019 Diluted earnings (loss) per share1 $ (0.57) $ 0.08 $ (0.66) $ 0.18 Impairme