Good morning and welcome to DHIs Second Quarter 2015 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Jennifer Milan, Director of Investor Relations. Please go ahead, ma’am.

Thanks and good morning everyone. With me on the call today is Mike Durney, President and Chief Executive Officer of DHI Group, Inc.; along with John Roberts, our Chief Financial Officer. This morning we issued a press release describing the company's results for the second quarter. A copy of that release can be viewed on the company's Web site at dhigroupinc.com. Before I hand the call over to Mike, I'd like to note that today's call includes certain forward-looking statements, particularly statements regarding future financial and operating results of the company and its businesses. These statements are based on management's current expectations or beliefs and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the statements herein due to changes in the economic, business, competitive, technological and/or regulatory factors. The principal risks that could cause our results to differ materially from our current expectations are detailed in the company's SEC filings, including our annual report on Form 10-K, in the sections entitled Risk Factors, Forward-looking Statements and Management's Discussion and Analysis of Financial Condition and Results of Operations. The company is under no obligation to update any forward-looking statements except as required by the federal securities laws. Today's call also includes certain non-GAAP financial measures, including adjusted EBITDA, adjusted EBITDA excluding Slashdot Media, adjusted revenue, adjusted revenues excluding Slashdot Media, net income excluding Slashdot Media, adjusted EBITDA margin, free cash flow and net cash to net debt. For details on these measures, including why we use them and reconciliations to the most comparable GAAP measures, please refer to our earnings release and our Form 8-K that has been furnished to the SEC, both of which are available on our Web site. Now I'll turn the call over to Mike.

Great, thanks Jenny and welcome to the DHI second quarter earnings call. Before we get started I just want to reiterate a statement I made at investor day. The company's board of directors and management work together focusing on enhancing shareholder value. We look forward to detailing you this morning how we are progressing on our key initiatives. At the end of the remarks, detailing the company's operating performance initiatives, we will open the call to take questions about these topics. So last month we hosted an investor day in New York where we had a chance to update investors on what we are working on and where we want to take the business strategically. We outlined the three main areas where we believe we can play and win in our sectors. Talent acquisition, sourcing management and career management. We also articulated what our strategic goals are around cementing our place in terms of pursuing deeper relationships with customers by providing more services and increasing the efficiency and effectiveness of our products and services. We also spoke about our view that the sourcing of talent will continue to evolve and become a bigger part of the overall talent acquisition and recruitment landscape. At investor day we gave you an update on our progress to date and highlighted our current initiatives. We continue to work diligently against all of our strategic goals. Today I want to discuss some of our accomplishments in Q2 in order to provide an update on our continued progress towards these goals that aim to deliver increased value to the customers and professionals who use our services. The team has made good strides against a number of these current initiatives although we clearly recognize there is more to be done. In the area of improving the efficiency…

Great. Thanks, Mike. I will review the details of our Q2 financial performance and then we will open the call up to questions. As mentioned in our press release, we have initiated a process to sell the Slashdot Media business given that it is non-core to our strategic operations going forward. Where appropriate, I will speak to our financials excluding Slashdot Media. We believe it is important to present our financial results and expected financial performance excluding Slashdot Media operations in order to portray a more accurate picture of the ongoing operations of DHI. Overall, we are pleased with the continued progress we made on our operations during the second quarter despite ongoing headwinds from currency effects and the continued negative impacts of lower oil prices on our energy business. Recruitment activity in the second quarter was fairly consistent across our brands with the exception of energy where the recruitment market is gotten worse compared to what we saw in Q1 and at the beginning of Q2. For the second quarter I want to highlight a few areas important to our results. First, year-over-year growth in revenues of 1% in constant currency including growth in most of our operating segments. Two, higher year-over-year revenue per recruitment package customer at Dice, reflecting the positive impact of Open Web and increased service levels by customers. Three, significant year-over-year revenue growth in our healthcare and hospitality segments which were largely acquired in 2013. And fourth, solid free cash flow. While we continue to invest in innovation for future revenue growth, we also continue to reduce net debt and return cash to shareholders with the repurchase of approximately 1.4 million shares of our common stock during the quarter. Second quarter revenues excluding Slashdot Media increased 2% year-over-year on a constant currency basis. This reflects…

[Operator Instructions] Our first question comes from Youssef Squali of Cantor Fitzgerald. Please go ahead.

Youssef Squali at Cantor. Just two questions, I guess. Starting with just the slight improvement that you have shown in everything except energy, I was wondering if you can parse out maybe the improvement from product in relation that you have been working on over the last, say, 12 to 18 months, versus maybe any changes to the competitive landscape that may have -- or just overall macro improvement that you may have kind of noticed throughout the quarter. And the other is around Slashdot Media. Can you just remind us how much did you guys actually pay for that asset in 2012? Will you be selling the entire asset or are you keeping any pieces of it back and then actually I have a follow up if you don’t mind.

Hi, Youssef, it's John. Let me take the second one first on Slashdot. So we paid $20 million for it back in 2012 and our plan is to sell the entire business. So that’s made up of Slashdot and SourceForge but the plans that we are working on and working on with the bank that we have retained, is to sell the full business.

So, Youssef, on the first question, I guess it would be hard to separate the two pieces that you outlined but I guess I would say a couple of things. One, the overall environment has gotten progressively, marginally better over the last couple of years. Certainly in the professional categories that we operate in, it's been pretty good for a while. But as we have said for years, we need the overall environment to be better from an employment standpoint, and I am talking about globally not just in U.S., but to be better in order to release budget dollars and not have people be concerned about where they spend. Which gives us the opportunity to compete with the [journalist] [ph] who have the lion's share of the overall online recruitment dollars. So the overall market continues to get slightly incrementally better. But I think more importantly is, if you look at the nature of our business and what we have been doing over the last couple of years, I think to improve the product and add new services has been key to us maintaining our share. Because overall, if you look at the pricing environment from a [journalist] [ph] over a long period of time, it certainly has declined. Has been relatively stable recently but has declined over time. So things like improving the efficiency of the service, adding alerts and helping customers with search and refining search, and we demonstrated some of those things in investor day, in terms of how we are further improving and refining the search capability is key and customers like it and they appreciate the efficiency we provide. The clearest example is Open Web. So Open Web is a new product that we launched 18 months ago on Dice and now so far have it on both Dice, Dice Europe. And eFinancialCareers has been instrumental not only in generating several million dollars of new revenue streams from the sale of Open Web, but we believe strongly opens doors for us in terms of having conversations about innovation with customers and prospects that are looking for innovation. So, again to summarize, I would say it's hard to bifurcate the two but I think having new products and services is key for us to have those conversations and to open doors.

Okay. And then Open Web, since you mentioned it, what was the total count at quarter's end? I think it was about 39% -- was up 39% from year-end 2014. So I don’t know if you have actually quantified the total number.

Yes. So just to clarify that, Youssef. The 39% was the Dice annual number compared to the end of 2014. The total Open Web count is just over 1000 at the end of Q2, primarily within Dice, but there is also customers there within ITJB/Dice Europe now, as well as EFC. Just over 1000 in total.

Our next question comes from Jeff Silber of BMO. Please go ahead.

It's Henry Chien calling in for Jeff. I just wanted to ask a little bit about the Slashdot Media sale. Is there currently a buyer that you are talking to? Just wanted to, just understand what the timeline of the process is at this point. Thanks.

Sure, Henry. So we have engaged, as disclosed in the release, we have disclosed KeyBanc to help us in the sale process. And we have gotten into that in earnest in Q2 over the last couple of months. And we are talking to a number of different folks but we are not at the point in the process where we can report exactly who or when we expect the sale to happen. But we are in the process.

Got it. And will you be providing a restated, not restated but historical financials excluding the Slashdot business anytime soon for us.

We did actually, you may not have seen it yet, but in the back of our press release there is, essentially if you go all the way into the back there are reconciliations in there of adjusted revenue and then adjusted revenue excluding Slashdot Media and also for net income and adjusted EBITDA. Both for the three months and the six months 2015 compared to 2014.

Okay. All right. Perfect. Great. And just one last one. Looking at your recruitment package customers, that ticked down a little bit. I know you mentioned the billings were up in the quarter, just trying to understand, so are most of the new sales coming from existing customers and is that sort of the roadmap for growth going forward for the next few quarters.

Yes. So this is Mike. So I think there is a couple of things in there. So as John mentioned, the average revenue per recruitment package customer was up 5% year-over-year. So that is the bulk of the growth as recruitment package customers is 90% of the revenue stream at Dice. But the other thing that’s impacted that is we have other products that we have been selling. So they are relatively small in the aggregate for the Dice business but under the sourcing concierge product suite there is a number of products we have been selling which provide different services and get us deeper into customer relationships and that certainly had an impact in providing more service and being more important to the sourcing plans of customers is a key strategic initiative for us. And so you see the impact of that within the billings group.

Our next question comes from Randy Reece with Avondale. Please go ahead.

I would like to just kind of walk through the decision making process from the time that you bought the Slashdot Media properties to the time that you decided you needed to sell them. And what changed throughout that sequence?

Yes. So I think a couple of things. One, originally when we bought Slashdot Media we bought it for three reasons. We believed that using the Slashdot or interacting with the Slashdot audience and given how passionate and engaged they were, would help from an overall engagement standpoint for Dice, principally in the U.S. Second, we thought that the significant international traffic at both Slashdot and SourceForge, Slashdot at the time I think about 40% of the traffic was outside North America and SourceForge was about 80% at the time, could help us launch Dice internationally and get into the tech recruiting business internationally. And the third was, at the time we liked the media business focused on tech and we thought we could improve the business in that regard. So if you look at what's happened, take the last one first, the tech advertising environment, especially the type of products and services that are advertised on Slashdot and SourceForge, certainly hasn’t grown and they have seen some contraction. So we were clearly wrong about that. Slashdot, the user engagement is pretty strong within Slashdot but it's a different type of engagement than what would be beneficial to Dice. We thought we could leverage it and it turned out we couldn’t. And so we didn't succeed there. And third, the international traffic, we decided over time that we were better off getting into online recruitment through an existing player and we had the opportunity to subsequently purchase IT Job Board and with new management in the Dice business together with the management of the IT Job Board business, we were able to leverage the two of them and grow our business internationally in the tech vertical without the help of Slashdot and SourceForge. And so we have decided that for that business it would be better off owned by somebody else and the value that we thought it would provide to us just hasn’t materialized.

The behavior of traffic acquisition costs within the Dice business. It seemed coincident with the acquisition of these properties that you were able to manage traffic acquisition cost down. Did they have an effect? Was the traffic of sufficient quality? And how is that model going to change going forward?

So it did have a positive impact on traffic acquisition costs initially. And I think we have gotten some of that benefit going forward. But it hasn’t increased over time, so it was kind of an initial benefit as we added job listings to site and cross-pollinated the two sites. But there has been no increase in it from the early days. I think from an acquisition standpoint, improving the product on Dice has had a much more significant impact than any relationship which Slashdot had over time. And having a new management team who is focused on product and marketing and branding and building a presence in Silicon Valley with our team, has had a far bigger impact than anything Slashdot could have done.

Our next question comes from Kim Opiatowski of APB. Please go ahead.

You noted that on a constant currency basis, you had a 5% increase in the financial segment. Can you expand upon what the source is of growth there? And second question if you don’t mind, with regards to Open Web, can you provide us with any more details on metrics since it's a relatively newer product as far as the rate of adoption within the customer base and the future potential is in this product as well.

Sure, Kim. This is John. So within the finance segment, we operate there in a number of different geographies. So if you look at the individual geographies in there and I talked about a few of them, but if you take the U.K. as an example. The U.K. on a constant currency basis was up 5% on its own. That market for us is about 43% of the total EFC market. So that certainly is one of the largest contributors in terms of the overall 5% constant currency number that I mentioned and you just referred to. And the second largest contributor from a percentage basis is Asia Pacific. So Asia Pacific in total, up 8% on a constant currency basis. That market is about 26% of the overall EFC business for us. So those are two large contributors on a constant currency basis.

Okay. Thank you.

So on Open Web -- I am sorry I don’t remember the specifics of your question -- but Open Web, as John mentioned, we have about 1000 customers at the end of June across the three brands. Dice being by far the biggest. Dice is the one where Open Web is integrated into the Dice service. So if you subscribe to both Dice's Talent Match, which is what the core product is called, and Open Web, when you do a search you get an integrated set of results. So the adoption of that product within Dice has been very strong and today we have, if you take the annual customers of about 7200 and the annual customers for Open Web, which is about 800, we have greater than 10% adoption rate for our existing customer base. Which is pretty significant we believe for what is a product that’s been commercially available for about 18 months and really is a new way to source candidates. So it takes a fair amount of training and integration and hand holding with customers to get them to focus on something that is a little bit more work but potentially more rewarding because it takes them outside their comfort zone as it relates to what they are used to doing from an online recruiting standpoint. So we are really happy with the adoption rate. We continue to refine how we serve those customers. How we provide value to them. How we get them to use the service more broadly within their organizations. One of the things we are actively working on is increasing adoption within organizations that are customers. So there is a fair amount of trialing today where we may have a customer that has 20 users of the Dice service but may only have one or two or three Open Web users as they trial it and get used to it. And so we think there is a fair amount of opportunity even within the 800 or so annual customers we have using Dice's version of Open Web. We think there is opportunity to expand those relationships. So we are really happy with the adoption to date but we know there is more work to do and we are pretty excited about it.

[Operator Instructions] Our next question comes from Ned Davis of William Smith and Co.

Most of my questions have been answered. Thank you. But just on the Slashdot, your cost is around 20 -- and if I read it right, you have got about $4 million in net assets on the balance sheet now. My question really is, if we make an assumption about the cash sale price based on EBITDA, what kind of tax basis we do have and therefore if we could then translate as to what your net cash proceeds from sale would be? Can you give us any insight on that?

Yes. So we have a net tax basis of about $7 million, Ned.

Okay. And you can't give us any guidelines on the range of what you think valuation might be based on the preliminary discussions?

No. No, it's not something that we can talk about at this point given where we are with the sale process.

This concludes our question-and-answer session. I would like to turn the conference back over to management for any closing remarks.

Great. Well, thanks everybody for joining us today. As always, if you have additional questions you can feel free to call us or email us and we would be happy to follow up with you. Thanks for attending.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.