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Press Release: DHI Group Reports Fourth Quarter -2-

· 02/04/2021 16:15
DHI GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except per share amounts) For the three months ended For the year ended December 31, December 31, 2020 2019 2020 2019 Revenues $33,211 $37,715 $136,878 $149,370 Operating expenses: Cost of revenues 4,463 4,246 17,047 16,237 Product development 4,502 4,508 16,470 17,216 Sales and marketing 12,306 14,241 50,856 55,909 General and administrative 7,230 7,783 31,265 31,003 Depreciation 2,940 2,542 12,019 9,743 Impairment of intangible assets -- -- 15,200 -- Impairment of goodwill -- -- 23,626 -- Disposition related and other costs -- -- -- 1,700 Total operating expenses 31,441 33,320 166,483 131,808 Loss on sale of business -- -- -- (537) Operating income (loss) 1,770 4,395 (29,605) 17,025 Interest expense and other (209) (189) (827) (701) Impairment of equity investment -- -- (2,002) -- Income (loss) before income taxes 1,561 4,206 (32,434) 16,324 Income tax expense (benefit) (434) 685 (2,419) 3,773 Net income (loss) $1,995 $3,521 $(30,015) $12,551 Basic earnings (loss) per share $0.04 $0.07 $(0.62) $0.26 Diluted earnings (loss) per share $0.04 $0.07 $(0.62) $0.24 Weighted average basic shares outstanding 47,608 48,950 48,278 48,739 Weighted average diluted shares outstanding 48,981 51,910 48,278 51,633 DHI GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) For the three months For the year ended ended December 31, December 31, 2020 2019 2020 2019 Cash flows from (used in) operating activities: Net income (loss) $ 1,995 $ 3,521 $(30,015) $ 12,551 Adjustments to reconcile net income to net cash flows from (used in) operating activities: Depreciation 2,940 2,542 12,019 9,743 Deferred income taxes (698) 1,920 (2,918) 2,493 Amortization of deferred financing costs 37 37 147 147 Stock based compensation 1,391 1,569 6,327 5,704 Impairment of intangible assets -- -- 15,200 -- Impairment of goodwill -- -- 23,626 -- Impairment of equity investment -- -- 2,002 -- Change in accrual for unrecognized tax benefits (508) (212) (446) 107 Gain on sale of equity investment -- -- (200) -- Loss on sale of business -- -- -- 537 Changes in operating

Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP metrics used by management to measure operating performance. Management uses Adjusted EBITDA as a performance measure for internal monitoring and planning, including preparation of annual budgets, analyzing investment decisions and evaluating profitability and performance comparisons between us and our competitors. The Company also uses this measure to calculate amounts of performance based compensation under the senior management incentive bonus program. Adjusted EBITDA represents net income plus (to the extent deducted in calculating such net income) interest expense, income tax expense, depreciation and amortization, non-cash stock based compensation, losses resulting from certain dispositions outside the ordinary course of business including prior negative operating results of those divested businesses, certain writeoffs in connection with indebtedness, impairment charges with respect to long-lived assets, expenses incurred in connection with an equity offering or any other offering of securities by the Company, extraordinary or non-recurring non-cash expenses or losses, transaction costs in connection with the credit agreement, deferred revenues written off in connection with acquisition purchase accounting adjustments, writeoff of non-cash stock based compensation expense, severance and retention costs related to dispositions and reorganizations of the Company, losses related to legal claims and fees that are unusual in nature or infrequent, minus (to the extent included in calculating such net income) non-cash income or gains, interest income, business interruption insurance proceeds, and any income or gain resulting from certain dispositions outside the ordinary course of business, including prior positive operating results of those divested businesses, and gains related to legal claims that are unusual in nature or infrequent.

We also consider Adjusted EBITDA, as defined above, to be an important indicator to investors because it provides information related to our ability to provide cash flows to meet future debt service, capital expenditures and working capital requirements and to fund future growth. We present Adjusted EBITDA as a supplemental performance measure because we believe that this measure provides our board of directors, management and investors with additional information to measure our performance, provide comparisons from period to period and company to company by excluding potential differences caused by variations in capital structures (affecting interest expense) and tax positions (such as the impact on periods or companies of changes in effective tax rates or net operating losses), and to estimate our value.

Adjusted EBITDA Margin is computed as Adjusted EBITDA divided by Revenues.

Adjusted EBITDA and Adjusted EBITDA Margin are not measurements of our financial performance under GAAP and should not be considered as an alternative to revenue, net income, operating income, cash provided by operating activities, or any other performance measures derived in accordance with GAAP as a measure of our profitability.

Net Debt

Net Debt is defined as total principal outstanding on our debt less cash and cash equivalents. We consider Net Debt to be an important measure of liquidity and indicator of our ability to meet ongoing obligations. We also use Net Debt, among other measures, in evaluating our choices for capital deployment. Net Debt presented herein is a non-GAAP measure and may not be comparable to similarly titled measures used by other companies.

Forward-Looking Statements

This press release 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 business environment, all of which are difficult to predict and many of which are beyond our control. Forward-looking statements include, without limitation, information concerning our possible or assumed future results of operations. These statements often include words such as "may, " "will," "should," "believe," "expect," "anticipate," "intend," "plan," "estimate" or similar expressions. These statements are based on assumptions that we have made in light of our experience in the industry as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual financial results or results of operations and could cause actual results to differ materially from those in the forward-looking statements. These factors include, but are not limited to, our ability to execute our tech-focused strategy, competition from existing and future competitors in the highly competitive markets in which we operate, failure to adapt our business model to keep pace with rapid changes in the recruiting and career services business, failure to maintain and develop our reputation and brand recognition, failure to increase or maintain the number of customers who purchase recruitment packages, cyclicality or downturns in the economy or industries we serve, the impact of the coronavirus COVID-19 outbreak on our operations and financial results, the uncertainty in respect of the regulation of data protection and data privacy, failure to attract qualified professionals to our websites or grow the number of qualified professionals who use our websites, failure to successfully identify or integrate acquisitions, U.S. and foreign government regulation of the Internet and taxation, our ability to borrow funds under our revolving credit facility or refinance our indebtedness and restrictions on our current and future operations under such indebtedness. These factors and others are discussed in more detail in the Company's filings with the Securities and Exchange Commission, all of which are available on the Investors page of our website at www.dhigroupinc.com, including the Company's most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings under the headings "Risk Factors," "Forward-Looking Statements" and "Management's Discussion and Analysis of Financial Condition and Results of Operations." You should keep in mind that any forward-looking statement made by the Company or its representatives herein, or elsewhere, speaks only as of the date on which it is made. New risks and uncertainties come up from time to time, and it is impossible to predict these events or how they may affect us. We have no obligation to update any forward-looking statements after the date hereof, except as required by federal securities laws.

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February 04, 2021 16:15 ET (21:15 GMT)