Good morning and welcome to the DHI Group, Inc. Fourth Quarter and Full Year 2017 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions. [Operator Instructions]. Please note this event is being recorded. I'd now like to turn the conference over to Rachel Ceccarelli, Director of Corporate Communications. Please go ahead, ma'am.

Thank you, Keith, and good morning everyone. With me on the call today is Mike Durney, President and CEO of DHI Group Inc.; and Luc Grégoire, Chief Financial Officer. This morning, we issued a press release describing the company's results for the fourth quarter and full-year of 2017. A copy of that release can be reviewed on the company's website at dhigroupinc.com. Please note that the press release can be reviewed -- please note a presentation which will be posted after this call also available for those following the webcast. 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 certain changes in circumstances. Actual results may vary materially from those expressed or implied in the statements here due to changes in economics, business, competitive, technological, and/or regulatory factors, and the planned divestitures of our non-core businesses, and the possibility that any such divestiture does not occur. 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 to be filed with the SEC next few days and Quarterly Report on Form 10-Q in the sections entitled Risk Factors, Forward-looking Statements, and Management's Discussion, Analysis of Financial Conditions and Results of Operations. The company is under no obligation to update any forward-looking statements except where it is required by the federal securities laws. Today's call can also include certain non-GAAP financial measures, including adjusted EBITDA, and adjusted EBITDA margin. For details on these measures, including why we use them, and reconciliations to the most comparable GAAP measures, please refer to our earnings release has been furnished to the SEC on Form which is also available on our website. And now with that, I'll turn the call over to Mike.

Great, thanks, Rachel, and welcome everyone and thanks for joining us this morning. We were incredibly busy in 2017 and the changes we put in place through the year with refocusing our efforts around our tech-first strategy creating a functionally aligned org structure and having our senior leadership team fully staffed, began to show signs of progress in the fourth quarter with a number of accomplishments. We're gaining momentum and although it's fair to say change won't happen overnight, we're seeing a movement in the right direction today. In the fourth quarter, we took another step towards our tech-first strategy with the sale of Health eCareers. In December, we sold that business for $15 million and recognized a pre-tax gain of $6.7 million. I'll talk about where we are with the other brands later on. Significantly, we finally had the functional team in place for a full three months and the early signs of operating results from the organization working towards common goals and initiatives are very encouraging. Much like the markets, we serve; DHI has seen a tremendous amount of change in the past years, particularly in 2017. In May, we realigned our organization to streamline management and decision making and to focus on tech initiatives. There were certainly challenges as team members became accustomed to a functional structure, we relocated people, and we brought on a new Head of Sales, but we made great progress. The new tech first and functional org structure has brought teams together, help us focus on initiatives that will move the business forward, and created an overall stronger sense of collaboration. We have a clear roadmap build to pursue projects that matter most and we've organized these priorities into three buckets: quality, relevance, and efficiency which everyone in the company supports through projects…

Okay, thanks, Luc, and thanks again to everybody for listening. I know, I said earlier that we have the team in place and I think given the performance of the business at the end of last year, with having the senior team in place, and credit to the employees who have worked on the businesses that we have been divesting to continue those business going and the employees in the tech-focused business, many of them have new roles in the organization. I think the fruits of that in the fourth quarter and the beginning of 2018 have been pretty significant and I think the team is excited about where we're headed. And so with that, we'll turn it over to questions.

Thank you. At this time, we will now begin the question-and-answer session. [Operator Instructions]. And the first question comes from Kara Anderson with B. Riley FBR.

Just a little housekeeping, did you say what revenue -- the revenue decline looks like excluding health care and FX? Luc Grégoire: The revenue decline excluding yes I did. It was one point coming off of --

Sorry that was one point for the FX and what was the health care impact? Luc Grégoire: Give me a second.

Okay. Luc Grégoire: So it's 4% on a comparable basis when you exclude Health eCareers. And there's 1% helping it, so that's 5% decline.

Got it. Thank you. And then, can you elaborate on the decision to sell the data services piece of Rigzone by retaining the careers services piece? And why that makes sense with your tech-first strategy?

Sure. So I think the data services business, we've always liked that business but it really is the farthest of field from what we do. We acquired it, when we acquired Rigzone. In the first place there was a fair amount of interest in that business because it's so discrete; and it fits nicely into potential acquirers' portfolio. So in the end, we thought it was easier to sell them separately. On the careers business, we had a number of indications but they really didn't value what we think is the potential of that business, as the market starts to turn and we actually have started to see a turn in that business certainly more so in North America than outside North America. So while from a tech-first standpoint, it doesn't fit nicely, it is the closest to the tech-first strategy of the businesses we decided to divest because there's a fair amount of technology roles embedded in the Rigzone business, in energy, generally. So that's why we decided to keep it, it's just we see a turn coming and we want to ride the turn.

So just for clarification, is the intention to keep it indefinitely or you think that you will look to sell it down the road may be as things turn a little bit?

I think the intention is to keep it indefinitely as indefinitely is used broadly which means you never know in the future, but the intention is to keep it now.

Got it. And then recognizing that downloads are growing for the Dice App, can you speak to the utilization of that app and whether you find that an important metric?

Yes. The utilization has grown; it has grown slower than the download growth. But we really haven't pushed from a marketing standpoint the usage as we developed more and more tools and we gather more and more data. So I think going forward, you'll hear more specifically around the metrics not only of downloads but also usage of the service.

And then I guess last one from me is on the recruitment package customers, what are the reasons you're hearing that people are leaving or cancelling their package and whether or not those are just moving to a different pricing model, could you comment on that?

Sure. So we hear a variety of reasons. The most common when we actually survey customers leaving us is no need but we certainly know that no need is a broader sense. I think the most common reason is that many of our customers or most of our customers have needs that are broader than tech and many of the ones that choose not to renew with us decide to consolidate their spending with others who are broader. So we tend to have higher renewal rates. I'm sure this is no surprise but have higher renewal rates on customers who deep focuses tech as opposed to those who have broader needs. But I think over time, as we develop more tools that are tech specific, the value to them -- to customers will be somewhat unique as compared to what journalists can provide.

Thank you. And the next question comes from Jafar Azmayesh from 1776 Holdings LLP.

Good morning. A few questions from me. The first one what was the getTalent spend in 2017 and what are the China savings?

So the getTalent spend in the first half of 2017 from an operating standpoint was probably about $2 million plus CapEx which was probably a million or so using round numbers. So that's through August when we decided to get out of that business. And China is -- the net loss on China was several hundred thousand dollars a year. So what we've done is we moved the caring -- taken care of those customers to Hong Kong. So there is a number of customers that we now can serve because we don't operate in China, we don't have a license to operator in China but there are number of those customers that we have saved and continue to serve out of Hong Kong because they have services that they can provide outside Mainland, China. So it was a couple of hundred thousand dollars of annual loss.

Got it. The BioSpace losses now if I'm understanding this correctly shifts off of our books and what were those losses last year?

It's around a $1 million; we have the details on the website. So, yes, that that business is now transferred to the management team of BioSpace and so we don't have that anymore as of January 31st.

Okay. And you're forecasting flat EBITDA margins flat next year. You also mentioned you're changing accounting policies for reasons hopefully that will be detailed in the 10-K where you're capitalizing items like commissions. So in essence you're forecasting down EBITDA margins on a apples-to-apples basis; is that correct?

That's correct. And we're not changing our policies just to be clear. There is a new accounting principle that comes into effect for all companies January 1st that specifies or prescribes more how to recognize revenue, it doesn't change our revenues very much. It will impact a bit on the commissions initially as we adopt because you're deferring -- you’re deferring commissions over the contract life or over the customer life if it’s a new customer but you’re also catching up, you’re taking previous expenses and capitalizing those at the start of the year. So there’s going to be in and out that we’re still evaluating. So we’ve kept that out of what we’ve talked about this morning, certainly not our choice.

Got it. And then with regards to the debt paydown, so now we're at about $29 million net debt against $49 million of EBITDA. Can you shed light on what the liquidity prices is that you guys are seeing that we're not seeing and what if any conversations you’ve been having around retiring for instance a third of the equity could have been retired this year well within your credit agreement and it shows in the paydown debt. Can you help us understand what the liquidity danger or crisis is that we're not seeing in our --

Yes. I don’t think we’re managing a -- we’re seeing a crisis. I think we’re being prudent in applying the result, we want to make sure we have all that we need to support the strategy and the improvement of the business and in the meantime we can reduce our loan which is a revolver loan, so that liquidity remains for us. So we're basically keeping our reserves for pushing our strategy. But to be clear, there is no liquidity crisis, we're profitable business, have a strong balance sheet, just being prudent managers.

Okay. You have $159 capacity, which I understand take all of it down but there is still plenty of room on it to do whatever it is you need to do to support this strategy unless there is a major acquisition which you stated numerous times is not on the payroll? So that argument is difficult to wrap head around in any regards. In your clearance business, can you talk about it sounds like a strong franchise, can you talk about what you've done in terms of pricing there, have you taken significant pricing gains year-over-year or quarter-over-quarter in any sense?

Yes. We certainly have -- we have pushed pricing up and the business continues to grow at a tremendous rate and we think about continuing to grow maybe not at the same rate it has. But there is a balance that we manage, all the time we spend a fair amount of time on this, as the government slows to a crawl, the approval process there are fewer and fewer new candidates that are entered into the pool because there is just a limitation, we’ve talked about this all the time that it’s an interesting business and that both supply and demand is driven by the same entity which is the U.S. Government. So we are pretty cautious about pushing pricing too high given the fact that the government is restricting how many new candidates we get and to extend the people pay more and more for the service and don’t see newer candidates at the same rate they did before because the government is restricting who they give security clearance to, we have to find that balance. And some would say, it’s a good problem to have I think we believe it’s a pretty good problem to have, but it is -- there is a supply demand imbalance in security clearance and we have to manage it. So the simple answer is yes, we have pushed our pricing but we are very sensitive to pushing pricing too high when because the government restrictions on clearance is we can’t provide more candidates.

Thank you. And as there are no more questions at the present time, I would like to turn the call over Rachel Ceccarelli for any closing comments.

Hi, thank you, Keith. We appreciate your interest in DHI Group and if you have any follow-up questions, you can call Investor Relations at (212) 448-4181 or email ir@dhigroupinc.com. Thanks everyone.

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