Good morning and welcome to DHI's First Quarter 2016 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Rachel Ceccarelli, Director of Corporate Communications. Please go ahead.

Thanks Andrew 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 first quarter of 2016. A copy of that release can be viewed on the company's website 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 economic, business, competitive, and technological 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 and 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 revenues, adjusted revenues excluding Slashdot Media, net income excluding Slashdot Media, net income excluding impairment of goodwill, diluted earnings or loss per share excluding impairment of goodwill, 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 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 website. And now with that, I will turn the call over to Mike.

Great, thanks Rachel. And welcome to the DHI Group Inc. first quarter earnings call. Today I will start with developments of BrightMatter Group and our next generation product launches within that group, then I will discuss product developments and improvements that are core talent acquisition brands and finish with the progress we’re making on our strategic plan. Then I will turn it over to John and he will give you details on our first quarter performance and finally we will open up to your questions. Before we get into our overall performance and strategy, I want to take a moment to address the cyber attacks against Rigzone allegedly by Oilpro and its President David Kent who founded Rigzone. The allegations in the summary of how certain Rigzone database information was illegally accessed was detailed by the U.S. Attorney for the Southern District of New York in their press release and the criminal complaint made available on their website after Kent was arrested and charged. In early 2014 we were notified by Rigzone user that they were contacted by someone affiliated with Oilpro even though they had never registered with Oilpro. We launched an internal investigation and retained a third party forensic information security expert firm to assist us. We determined that certain information housed in our database was accessed by someone who would have needed intimate familiarity with how the code was written. So we turned our findings over to the FBI and have continued to cooperate with them. We determined that email addresses were accessed from the database and used to attempt to get Rigzone users to sign up with Oilpro. We're not aware of any other use of any of the other data for any other purpose. We assisted the government throughout its investigation including in discussion with…

Great, thanks Mike. I will begin by summarizing our finial performance for the first quarter of 2016 and then we will open up the calls to questions. As previously reported, we sold the Slashdot Media business in January, so we are appropriate I will speak to the financials excluding that business. Additionally, we have changed our finical segment reporting to align with recent changes and how we operate the business. We now have three reportable segments; One, Tech & Clearance, which include Dice, Dice Europe and ClearanceJobs. Two, Health Care, which is our Healthy Careers business, and three Global Industry Group or GIG which consist of eFinancialCareers, Rigzone, Hcareers and BioSpace. On our website, you can find a recast of our quarterly segments going back to Q1 2014, which incorporates the new segments structure and also shows the segments excluding the Slashdot Media business. My comments today will reflect results excluding the impacts of both the Slashdot Media sale and the severance cost associated with the implantation of the new GIG structure. The impacts of both of these items are included in the disposition related and other cost line item in the statement of operations. With that as context, I'll turn to the quarter. This quarter we saw progress across the organization in spite of continued headwinds in energy and the negative impacts of foreign currency translation. We believe the recent strategic initiatives and investments we have made will help to drive growth over time and better position us to execute against our long term goal of being a Talent focused Global Digital Media Company. Some of the key growth drivers for the first quarter include one, higher year-over-year revenue for average per recruitment package customer at Dice, showing them measureable influence of Open Web and increased service levels. And…

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

Hi, good morning. This is Kip Paulson for Youssef. Just a couple from me on Dice and eFinancialCareers. First, on Dice, how should we think about the 7,450 client count for Dice? Are there any signs of a bottom here? And then, on pricing, you mentioned the average Dice recruitment customers spend was up, but how much of this was driven by Open Web? Was this similar to the roughly 50% of increase seen in recent quarters? And then, on eFinancialCareers, it's encouraging to see high-single-digit year-on-year growth there, but could you give us some color on the U.S. market, specifically why is it lagging behind other regions and do you think this will continue for the remainder of the year? Thanks.

He Kip, it’s John. So let me take one of those first. So on the increase in the ARPU at Dice, so that up 4% year-over-year. Yes on the continuing trend there are about half of that increase year-over-year is related to Open Web and the other half as we talked about is related to a handful of things, a combination of both customers buying other additional products and services such as Sourcing Concierge or some other products, as well as customers buying more of the core. So I think from a pricing standpoint and ARPU that the trend continues year –over-year.

Just to add to that on customer account, as we continue to develop new product and services for instance we have Sourcing Concierge Services, a bunch of those are not in the recruitment package number. So when we do pay for performance, which I referred to earlier we are doing on the test when we do Sourcing Concierge Services those customers are not in the recruitment package customer account so the mix of businesses changing slightly. It's not significant yet and the recruitment packages still generate the vast majority of our revenue but it is changing slightly and will adapt how we communicate that as that piece of the business gets bigger and bigger over time. So the focus on the literal number of pure recruitment packages will be less in the future. On eFinancialCareers, the U.S. has always been the toughest market for us for eFinancialCareers, but competitive environment in the U.S. in financial services is probably the hardest. I think what you find within the customer mix in the U.S. is a pretty significant dichotomy in customers who believe we don't provide the best, most relevant candidates to some part of a customer base which is offset by a pretty significant part of the customer base things we provide the best candidates and that dichotomy is probably greater in the U.S., not probably, it is greater in the U.S. than anywhere else in the eFinancialCareers world and frankly anywhere else in our brand portfolio. We said before we've changed the organization in the U.S. from a sales and marketing standpoint. I think the GIG structure from a marketing approach across the brands and focusing on the geography, so the value we get of putting the brands together in the U.S. from a marketing standpoint I think will be pretty significant for us. So we’re seeing signs that the U.S. is getting stronger but they are not totally clear yet to be frank about it.

All right. Great, thanks. And then, one more if I might. We noticed one thing in the model that SBC was about $1 million higher than guidance in the quarter. What was the driver here? Was it something related to the sale of Slashdot?

Say that again, Kip what was higher?

The stock-based compensation, I think it was about $1 million higher than guidance. Just wondering what was driving that and if there was anything related to the sale of Slashdot moving that up?

Yes, so it is related to Slashdot. So associated with the sale of Slashdot there was acceleration of stock associated with people who left as part of the sale and that was just over $900,000 actually.

Okay, great. Thanks guys.

The next question comes from Randy Reece of Avondale Partners. Please go ahead.

Good morning. In your restated segments, there is a piece of corporate and other revenue that moved into the Tech & Clearance segment. What did that represent?

It’s a legacy piece of non recruitment business Randy, it’s called IT media, it came with the old IT job board acquisition we did a number of years ago. It’s really an email lead gen kind of business that’s as you can see from the movement, the segment it’s small business $1 million to $2 million a year.

What would that number have been under previous reporting in the first quarter of 2016?

What would the number have been? It would have been in that same range, this business hasn’t moved much from an annual basis, so it runs $1.5 million to $2 million a year.

And I'm trying to differentiate the trends going on with Health eCareers versus BioSpace. And with BioSpace in particular, is there a significant change in customer count versus revenue spend per customer?

On BioSpace?

Yes.

No, there is really not. I mean, in BioSpace as you can see from - I mean, this is the first time we broken up BioSpace revenue. It was and continues to be a relatively small portion of what was the healthcare segment and now the overall business as well. I mean, the trends there are different. The customers that they serve are different. Given the scale of the Health eCareers business and some of the new products that are rolling out there, I think they are having, clearly from the results, more success in driving that business forward. As oppose to BioSpace which is still pretty small scale business, I think that we’ve got hopes for over time and part of putting it into GIG is to try and leverage some of the broader resources across the organization to try and help move that business forward.

Just Randy, to add to what John said, that business again it's tiny. So we probably shouldn’t spend a whole lot of time on it but it's a business that we've grown, when we bought it for about $3 million to start to get into the $5 million range on an annual revenue standpoint, it is a mix of revenue streams. So there is an advertising component to that which is not insignificant given that it is a content site in addition to being a career related site. Today, that business for us is somewhat bifurcated between some of the really large Biotech and Pharma companies who spend a fair amount with us and then one-off services. And part of the goal, as John said, moving into GIG is an approach to filling in the middle to having mid-sized companies, growing companies that historically, that wasn’t focused on in the business and we are starting to get more traction there which is one of the reasons why we have been able to grow but it’s not nearly penetrated yet in that mid-size customer base.

Yes, I was just trying to triangulate the results and outlook versus expectations because my previous expectations were higher for healthcare lumped together, and I noted that your second quarter revenue guidance for BioSpace had a large year-over-year down number.

I think you are into rounding in terms of, given the size of it. Healthcare is a business that’s growing in the 10% to 15% range which is what we’d expect to continue.

Thank you.

[Operator Instructions] The next question comes from Jeff Silber of BMO. Please go ahead.

Hi, good morning. It's Henry Chien calling in for Jeff. Just a question on the reorganization or the new segmentation. Can you talk about any new leadership or management changes that have occurred or will occur, and any change in the strategic direction of the overall Company, I guess? Any color you can provide? Thanks.

So looking at - so focus on the GIG business, from our senior leadership standpoint what we did was we put all four of those businesses under one roof. And so there is one leader, the MD of the GIG business who used to run eFinancialCareers and now is taking on the other three. And we put an organization in place where we have across the top of the leadership, ahead of sales, ahead of marketing, ahead of product, ahead of technology, and ahead of content and social engagement. So across the top of the organization. As you get deeper into the organizations, you have brand focus people in sales, marketing and technology. The rest are shared. So what we expect to get is the go-to-market strategy for all four of the brands that while they are not identical because they serve different markets in slightly different ways but at least will be on a coordinated basis and we can share across one, two, three or four of the brands our marketing approach, product approach, technology approach and sales structure approach. So there is some benefit we’ve done from a cost structure standpoint because we've refined and leveraged the organization but we've put senior people in charge of those four brands which are roughly $70 million business with 250 people. So we are pretty excited about what we can do with those brands. We've mentioned before, just to reiterate, one of the reasons why we put those four together is, eFinancialCareers is the global organization with different people in different places and serves 20 markets and there is already an existing global business. Rigzone is a global business although has strength relative to market today, strength in certain markets and has opportunity in other markets where eFinancialCareers has been strong and then when you get to HCareers and BioSpace, those are North American base businesses today, yet have we believe good opportunity outside North America. So we now have an infrastructure that we can easily role those to out into - to grow those businesses. And so I hope that answers the question. But that’s how we think about – that’s how we structured the organization and that’s how we think about the opportunity in the market.

Yes. That's helpful. And the product development under BrightMatter, are those products being used across all the different brands or is it sort of pick and choose or I'm just curious how those fit into the new segments?

So BrightMatter has a handful of things. So the first thing it has the Work Digital business which is the foundation for Open Web. So it develops the Open Web product, manages the data and the platform which then can be used by the brands, as you know Dice has Open Web integrated into a eFinancialCareers and Dice Europe have Open Web as well and then the plan is to roll it out to the others throughout the year. And frankly one of the benefits of GIG is, we can go into the GIG businesses since eFinancialCareers already have experienced with offering Open Web, we can roll it out into the other three GIG brands. That's the first thing that's in BrightMatter. Second is, our GIG talent product, and as I mentioned before, getTalent we think is incredibly important for us because it’s a products or service that we can offer through the brands and so it's another offering within the brands in talking to clients. But as importantly it opens up a whole new world for us that transcends the brands because it gets us into customer groups that we don’t serve within the vertical brands, so that’s the second. And then we’re doing a couple of other things. We have the FreshUp product which we talked about before that fits within BrightMatter and FreshUp is sold as a separate service to certain end user markets but also can be incorporated into a variety of things including getTalent. And then we have a number of other products that we’re developing that are still early in their development phase that will both support the brands together with opening up new markets for us. So it's one of the reasons why we believe so strong at BrightMatter is the future of the company because it will develop things that can be offered through individual talent acquisition brands and stand on their own.

Got it. Okay. Thank you so much.

[Operator Instructions] This concludes our question-and-answer session. I would like to turn the conference back over to Rachel Ceccarelli for any closing remarks.

Thank you for your time this morning and for your interest in DHI. Management will be available to answer any follow-up questions you may have. Please call Investor Relations at 212-448-4181 to be placed in the queue. Have a great day.

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