What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2021-02-10 compared with 2020-02-06 · 269 added, 250 removed, 416 unchanged (56% of the section changed)

5 unchanged sentences

You should keep in mind that any forward-looking statement made by us 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.

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 applicable law.

8 unchanged sentences

Accordingly, all prior periods have been recast to reflect the current segment presentation.

We have been in the recruiting and career development business for more than 25 years.

We have been in the recruiting and career development business for 30 years.

Based on our operating structure, we have identified one reportable segment as follows:

2 unchanged sentences

Prior to 2019, we had other services and activities that individually were not a significant portion of consolidated revenues, operating income or total assets.

These included Hospitality (sold May 22, 2018), Rigzone (sold the RigLogix portion of the Rigzone business on February 20, 2018 and transferred majority ownership of the remaining Rigzone business to Rigzone management on August 31, 2018), and BioSpace (transferred majority ownership to BioSpace management on January 31, 2018), and getTalent services (discontinued services in the third quarter of 2017), which are reported in the "Other" category, and are not considered a segment.

The Company sold the Health eCareers business on December 4, 2017, which was previously reported in the Healthcare segment.

These included Hospitality (sold May 22, 2018), Rigzone (sold the RigLogix portion of the Rigzone business on February 20, 2018 and transferred majority ownership of the remaining Rigzone business to Rigzone management on August 31, 2018), and BioSpace (transferred majority ownership to BioSpace management on January 31, 2018 and sold the remaining minority interest to BioSpace management in 2020), which are reported in the "Other" category, and are not considered a segment.

Our Revenues and Expenses

We derive the majority of our revenues from customers who pay fees, either annually, quarterly or monthly, to post jobs on our websites and to access our searchable databases of resumes.

We derive the majority of our revenues from customers who pay fees, either annually, semiannually, quarterly or monthly, to post jobs on our websites and to access our searchable databases of resumes.

Our fees vary by customer based on the number of individual users of our databases of resumes, the number and type of job postings and profile views purchased and the terms of the packages purchased.

7 unchanged sentences

Deferred revenue, as shown on the Consolidated Balance sheets, reflects customer billings made in advance of services being rendered.

Backlog consists of deferred revenue plus customer contractual commitments not invoiced representing the value of future services to be rendered under

committed contracts.

We believe deferred revenue and backlog to be important measures of our business as they represent our ability to generate future revenue.

Deferred revenue at December 31, 2019 and 2018 was $51.6 million and $56.1 million, respectively.

Backlog at December 31, 2019 and 2018 was $88.7 million and $81.9 million, respectively.

Deferred revenue at December 31, 2019 decreased from December 31, 2018 due to the increased flexibility in the Company's billing terms to customers to bring them in line with market standards.

Backlog at December 31, 2019 increased from December 31, 2018 primarily due to the timing of closing contracts late in 2019.

Backlog consists of deferred revenue plus customer contractual commitments not invoiced representing the value of future services to be rendered under committed contracts.

We believe deferred revenue and backlog to be important measures of

our business as they represent our ability to generate future revenue.

A summary of our deferred revenue and backlog as of December 31, 2020 and 2019 are presented in the table below.

Summary of Deferred Revenue and Backlog:

December 31, 2020 December 31, 2019 Decrease Percent Change

Deferred Revenue $ 43,494 $ 51,626 $ (8,132) (16) %

Contractual commitments not invoiced 32,830 37,093 (4,263) (11) %

$ 76,324 $ 88,719 $ (12,395) (14) %

(1) Backlog consists of deferred revenue plus customer contractual commitments not invoiced representing the value of future services to be rendered under committed contracts.

Backlog at December 31, 2020 declined $12.4 million from December 31, 2019 due to the negative impacts of COVID-19, lower renewal rates in the Dice brand, and uncertainty around Brexit and political unrest in Hong Kong negatively impacting eFinancialCareers.

This decrease was partially offset by a backlog increase at ClearanceJobs.

To a lesser extent, we also generate revenue from advertising on our various websites or from lead generation and marketing solutions provided to our customers.

2 unchanged sentences

The Company’s revenues declined $12.5 million, or 8.4%, for the year ended December 31, 2020 compared to the same period of the prior year.

The decline was due to the divested businesses and the closure of the Dice Europe business on August 31, 2018, which together declined $12.3 million.

The on-going Tech-focused segment, which excludes the Dice Europe operations, increased $0.1 million , or 0.1% , compared to the year ended December 31, 2018.

This increase was led by ClearanceJobs growth of 17.4% , and was partially offset by a 4.9% decline at eFinancialCareers and a 2.0% decline at Dice.

The decline at eFinancialCareers was primarily related to foreign exchange fluctuations and the uncertainty surrounding Brexit.

This decrease was led by eFinancialCareers decline of 19.9% and an 11.2% decline at Dice and was partially offset by ClearanceJobs growth of 17.1%.

The declines at Dice and eFinancialCareers were due to the negative impacts of COVID-19, lower renewal rates in the Dice brand, and uncertainty around Brexit and political unrest in Hong Kong negatively impacting eFinancialCareers.

See further discussion in the Comparison of Years Ended December 31, 2020 and 2019.

The Company continues to evolve and present new products and features to attract and engage qualified professionals and match them with employers, such as the Dice TalentSearch powered by IntelliSearch, Dice Candidate Match TM , MyDiceHome, Dice Salary Predictor, Dice Job Search and Job Alerts, ClearanceJobs NextGen, ClearanceJobs Pulse, ClearanceJobs BrandAmp, eFinancialCareers Messaging, Recruiter Profile, Candidate Profile and Job Search platform.

The Company continues to evolve and develop new software products and features to attract and engage qualified professionals and match them with employers.

Our ability to grow our revenues will largely depend on our ability to grow our customer bases in the markets in which we operate by acquiring new customers while retaining a high proportion of the customers we currently serve, and to expand the breadth of services our customers purchase from us.

We continue to make investments in our business and infrastructure to help us achieve our long-term growth objectives, such as the innovative products noted above.

We continue to make investments in our business and infrastructure to help us achieve our long-term growth objectives.

For example, during the years ended December 31, 2020 and 2019, the Company released the innovative products noted in the table below.

Product Releases

Dice IntelliSearch-Based Job Alerts, Dice Private Email, Dice Remote Jobs, Dice Recruiter Profile, Dice Instant Messaging Dice Candidate MatchTM, Dice Job Search and Job Alerts

ClearanceJobs Client Team Dashboard, ClearanceJobs Workflow, ClearanceJobs Favorites, ClearanceJobs Self-Serve BrandAmp, ClearanceJobs Candidate Search and ClearanceJobs Broadcast Message upgrades ClearanceJobs NextGen, ClearanceJobs Pulse, ClearanceJobs BrandAmp

eFinancialCareers Messaging, Video and Voice Calling, eFinancialCareers Follow and eFinancialCareers Job Alerts eFinancialCareers Recruiter Profile, and eFinancialCareers Candidate Profile

Other material factors that may affect our results of operations include our ability to attract qualified professionals that become engaged with our websites and our ability to attract customers with relevant job opportunities.

The more qualified professionals that use our websites, the more attractive our websites become to employers and advertisers, which in turn makes them more likely to become our customers, resulting positively on our results of operations.

If we are unable to continue to attract qualified professionals to engage with our websites, our customers may no longer find our services attractive, which could have a negative impact on our results of operations.

Additionally, we need to ensure that our websites remain relevant in order to attract qualified professionals to our websites and to engage them in high-value tasks, such as posting resumes and/or applying to jobs.

The largest components of our expenses are personnel costs and marketing and sales expenditures.

17 unchanged sentences

Recruitment packages .

Recruitment package revenues are derived from the sale to recruiters and employers of a combination of job postings and access to a searchable database of candidates on the Dice, ClearanceJobs, and eFinancialCareers websites.

Recruitment package revenues are derived from the sale to recruiters and employers of a combination of job postings and/or access to a searchable database of candidates on the Dice, ClearanceJobs, and eFinancialCareers websites.

Certain of the Company’s arrangements include multiple performance obligations, which primarily consists of the ability to post jobs and access to a searchable database of candidates.

16 unchanged sentences

In testing goodwill for impairment, a qualitative assessment can be performed and if it is determined that the fair value of the reporting unit is more likely than not less than the carrying amount, the impairment review process compares the fair value of the reporting unit in which the goodwill resides to the carrying value of that reporting unit.

If the fair value of the reporting unit is less than its carrying amount, an impairment charge is recorded for the amount the carrying value exceeds the fair value.

If the fair value of the reporting unit is less than its carrying amount, an impairment charge is recorded for the amount the carrying

value exceeds the fair value.

Our annual impairment test for goodwill is performed on October 1 on the Tech-focused reporting unit.

The annual impairment tests for the Tech-focused reporting unit, which were performed as of October 1, 2019 and 2018, resulted in the fair value of the reporting unit exceeding the carrying value by 37% and 40%, respectively.

Results for the Tech-focused reporting unit for the fourth quarter of 2019 and estimated future results as of December 31, 2019 are consistent with the October 1, 2019 analysis.

As a result, the Company believes it is not more likely than not that the fair value of the reporting units is less than the carrying value as of December 31, 2019.

Therefore, no interim impairment testing was performed as of December 31, 2019.

The annual impairment test for the Tech-focused reporting unit performed as of October 1, 2019 resulted in the fair value of the reporting unit exceeding the carrying value by 37%.

During the first quarter of 2020, because of the initial impacts of the COVID-19 pandemic and its potential impact on future earnings and cash flows for the reporting unit, the Company performed an interim impairment analysis of goodwill.

The results of the analysis indicated that the fair value of the Tech-focused reporting unit was not substantially in excess of the carrying value as of March 31, 2020.

The percentage by which the estimated fair value exceeded carrying value for the Tech-focused reporting unit at March 31, 2020 was less than 1%.

During the third quarter of 2020, the impacts of the COVID-19 pandemic continued and the Company's projected earnings and cash flows for the Tech-focused reporting unit declined as compared to the projections used in the March 31, 2020 analysis.

As a result, the Company performed an interim impairment analysis as of September 30, 2020, which resulted in the Company recording an impairment charge of $23.6 million during the three month period ended September 30, 2020.

Results for the Tech-focused reporting unit for the fourth quarter of 2020 and estimated future results as of December 31, 2020 have exceeded the projections used in the September 30, 2020 analysis.

As a result, the Company believes it is not more likely than not that the fair value of the reporting unit is less than the carrying value as of December 31, 2020.

Therefore, no quantitative impairment test was performed as of December 31, 2020.

No impairment was recorded during the years ended December 31, 2019 and 2018.

The amount of goodwill as of December 31, 2020 allocated to the Tech-focused reporting unit was $133.4 million.

Determining the fair value of a reporting unit is judgmental in nature and requires the use of estimates and key assumptions, particularly assumed discount rates and projections of future operating results.

The discount rate applied for the Tech-focused reporting unit was 13.2%.

The discount rate applied for the Tech-focused reporting unit in the September 30, 2020 analysis was 14.5%, compared to 16.5% at March 31, 2020.

The decline in the discount rate is primarily due to the lower projections, as compared to the March 31, 2020 analysis.

An increase to the discount rate applied or reductions to future projected operating results could result in future impairment of the Tech-focused reporting unit’s goodwill.

It is reasonably possible that changes in judgments, assumptions and estimates the Company made in assessing the fair value of goodwill could cause the Company to consider some portion or all of the goodwill of the Tech-focused reporting unit to become impaired.

In addition, a future decline in the overall market conditions and/or changes in the Company’s market share could negatively impact the estimated future cash flows and discount rates used to determine the fair value of the reporting unit and could result in an impairment charge in the foreseeable future.

The determination of whether or not goodwill has become impaired involves a significant level of judgment in the assumptions underlying the approach used to determine the value of our reporting unit.

Fair values are determined either by using a discounted

cash flow methodology or by using a combination of a discounted cash flow methodology and a market comparable method.

In addition, a future decline in the overall market conditions, uncertainty related to COVID-19, political instability, and/or changes in the Company’s market share could negatively impact the estimated future cash flows and discount rates used to determine the fair value of the reporting unit and could result in an impairment charge in the foreseeable future.

The determination of whether or not goodwill has become impaired is judgmental in nature and requires the use of estimates and key assumptions, particularly assumed discount rates and projections of future operating results, such as forecasted revenues and earnings before interest, taxes, depreciation and amortization margins and capital expenditure requirements.

Fair values are determined by using a combination of a discounted cash flow methodology and a market comparable method.

The discounted cash flow methodology is based on projections of the amounts and timing of future revenues and cash flows, assumed discount rates and other assumptions as deemed appropriate.

7 unchanged sentences

The indefinite-lived acquired intangible assets include the Dice trademarks and brand name.

The Dice trademark, trade name and domain name is one of the most recognized names of online recruiting and career development.

The Dice trademark, trade name and domain name is one of the most recognized names of online technology recruiting and career development.

Since Dice’s inception in 1991, the brand has been recognized as a leader in recruiting and career development services for technology and engineering professionals.

Currently, the brand is synonymous with the most specialized online marketplace for industry-specific talent.

Currently, the brand is synonymous with the most specialized online marketplace for industry-specific technologists.

The brand has a significant online and offline presence in online recruiting and career development services.

Considering the recognition and the awareness of the Dice brand in the talent acquisition and staffing services market, Dice’s long operating history and the intended use of the Dice brand, the remaining useful life of the Dice trademark, trade name and domain name was determined to be indefinite.

We determine whether the carrying value of recorded indefinite-lived acquired intangible assets is impaired on an annual basis or more frequently if indicators of potential impairment exist.

The impairment review process compares the fair value of the indefinite-lived acquired intangible assets to its carrying value.

We determine whether the carrying value of recorded indefinite-lived acquired intangible asset is impaired on an annual basis or more frequently if indicators of potential impairment exist.

The impairment review process compares the fair value of the indefinite-lived acquired intangible asset to its carrying value.

If the carrying value exceeds the fair value, an impairment loss is recorded.

The impairment tests performed as of October 1, 2019 and 2018 resulted in the fair value of the Dice trademarks and brand exceeding the carrying value by 26% and 2%, respectively.

The increase in the fair value over the carrying value is driven by the industry growth expectations described below and the Company's investments in its product and its sales team, combined with a lower discount rate as a result of a decline in the risk-free rate.

Revenue attributable to the Dice trademarks and brand name have declined during the year ended December 31, 2019 due to competition in the technology recruiting market, challenges in developing and introducing new products and product enhancements to the market and the Company’s ability to attribute value delivered to customers.

Revenues related to the Dice trademarks and brand name declined 2% and 7% for the years ended December 31, 2019 and 2018, respectively, and declined 3% and 4% for the three months ended December 31, 2019 and 2018, respectively, representing a decrease in the rate of decline for each period.

Revenue projections for the year ending December 31, 2020 include a modest increase compared to the year ended December 31, 2019 and then increasing to rates approaching industry growth projections.

The Company’s ability to achieve these revenue projections may be impacted by, among other things, the factors noted above that have contributed to the decline in recent periods.

Cash flows attributable to the Dice trademarks and brand name declined during 2019 as a result of the lower revenue, as well as increased spending focused on new and enhanced products.

Operating expenses, excluding amortization expense and disposition related and other costs, are projected to increase for the year ending December 31, 2020 as compared to the year ended December 31, 2019, including a small operating margin reduction, as the company continues to invest in new and enhanced products, and then increase at levels that allow for modest operating margin improvements.

If future cash flows attributable to the Dice trademark are not achieved, the Company could realize an impairment in a future period.

The Company utilized a relief from royalty rate method to value the Dice trademarks and brand name using a royalty rate of 6.0% based on comparable industry studies and improving operating margins and a discount rate of 14.2%.

The impairment test performed as of October 1, 2019 resulted in the fair value of the Dice trademarks and brand exceeding the carrying value by 26%.

During the first quarter of 2020, because of the initial impacts of the COVID-19 pandemic and its potential impact on future earnings and cash flows that are attributable to the Dice trademarks and brand name, the Company performed an interim impairment analysis.

As a result of the analysis, the Company recorded an impairment charge of $7.2 million during the first quarter of 2020.

During the third quarter of 2020, the impacts of the COVID-19 pandemic continued and the Company's projected earnings and cash flows that are attributable to the Dice trademarks and brand name declined as compared to the projections used in the March 31, 2020 analysis.

As a result, the Company performed an interim impairment analysis as of September 30, 2020, which resulted in the Company recording an additional impairment charge of $8.0 million during the three month period ended September 30, 2020.

Revenues attributable to the Dice trademarks and brand name for the fourth quarter of 2020 and estimated future results as of December 31, 2020 have exceeded the projections used in the September 30, 2020 analysis.

As a result, the Company believes it is not more likely than not that the fair value of the Dice trademarks and brand name is less than the carrying value as of December 31, 2020.

Therefore, no quantitative impairment test was performed as of December 31, 2020.

No impairment was recorded during the years ended December 31, 2019 and 2018.

The projections utilized in the March 31 and September 30, 2020 analyses included a decline in revenues caused by the COVID-19 pandemic that are attributable to the Dice trademarks and brand name for the year ended December 31, 2020 compared to the year ended December 31, 2019.

The September 30, 2020 analysis included a further decline in revenues caused by the COVID-19 pandemic that are attributable to the Dice trademarks and brand name for the year ending December 31, 2021 compared to the year ended December 31, 2020 and then increasing to rates approximating industry growth projections, although peaking at rates slightly lower than in the March 31, 2020 analysis.

The Company’s ability to achieve these revenue projections may be impacted by, among other things, uncertainty related to COVID-19, competition in the technology recruiting market, challenges in developing and introducing new products and product enhancements to the market and the Company’s ability to attribute value delivered to customers.

Cash flows that are attributable to the Dice trademarks and brand name were projected to decline for the year ended December 31, 2020 compared to the year ended December 31, 2019 as a result of the lower revenue, but partially offset by reductions to operating expenses.

Operating expenses, excluding impairments, utilized in the March 31 and September 30, 2020 analyses were projected to decline for the year ended December 31, 2020 as compared to the year ended December 31, 2019, including a reduction in operating margin.

The March 31, 2020 analysis included modest operating margin improvements during the year ending December 31, 2021 and beyond while the September 30, 2020 analysis included a small reduction in operating margin during the year ending December 31, 2021 and then increasing modestly.

If future cash flows that are attributable to the Dice trademarks and brand name are not achieved, the Company could realize an impairment in a future period.

In the March 31, 2020 and September 30, 2020 analyses, the Company utilized a relief from royalty rate method to value the Dice trademarks and brand name using a royalty rate of 5.0% and 4.0%, respectively, based on comparable industry studies and a discount rate of 17.5% and 15.5%, respectively.

The decline in the royalty rate is due to revenue declines and impacts of the COVID-19 pandemic and the decline in the discount rate is primarily due to the lower projections, as compared to the March 31, 2020 analysis.

The determination of whether or not indefinite-lived acquired intangible assets have become impaired involves a significant level of judgment in the assumptions underlying the approach used to determine the value of the indefinite-lived acquired intangible assets.

2 unchanged sentences

We utilize the asset and liability method of accounting for income taxes.

Under this method, deferred income taxes are recognized for differences between the financial statement and tax bases of assets and liabilities at enacted statutory tax rates in effect for the

years in which the differences are expected to reverse.

Under this method, deferred income taxes are recognized for differences between the financial statement and tax bases of assets and liabilities at enacted statutory tax rates in effect for the years in which the differences are expected to reverse.

Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized.

15 unchanged sentences

For the year ended December 31,

(in thousands)

(in thousands) 2020 2019 2018 2020 vs 2019 2019 vs 2018

Revenues $ 136,878 $ 149,370 $ 161,570 $ (12,492) $ (12,200)

Operating expenses:

3 unchanged sentences

General and administrative 31,265 31,003 37,589 262 (6,586)

Depreciation 12,019 9,743 9,280 2,276 463

Amortization of intangible assets — — 482 — (482)

Impairment of fixed and intangible assets

Impairment of intangible assets 15,200 — — 15,200 —

Impairment of goodwill 23,626 — — 23,626 —

Disposition related and other costs — 1,700 7,619 (1,700) (5,919)

2 unchanged sentences

Gain (loss) on sale of businesses — (537) 3,369 537 (3,906)

Proceeds from restitution award

Total other operating income (loss)

Operating income

Operating income (loss) $ (29,605) $ 17,025 $ 11,692 $ (46,630) $ 5,333

For the year ended December 31,

2020 2019 2018

Revenues 100.0% 100.0% 100.0%

Operating expenses:

3 unchanged sentences

General and administrative 22.8 % 20.8 % 23.3 %

Depreciation 8.8 % 6.5 % 5.7 %

Amortization of intangible assets — % — % 0.3 %

Impairment of goodwill 17.3 % — % — %

Impairment of intangible assets 11.1 % — % — %

3 unchanged sentences

Gain (loss) on sale of businesses — % (4.0) % 2.1 %

Proceeds from restitution award

Total other operating income (loss)

Operating income

Operating income (loss) (21.6) % 11.4 % 7.2 %

Comparison of Years Ended December 31, 2020 and 2019

Year Ended December 31,

Increase (Decrease)

Foreign Exchange Impact (6)

Year Ended December 31, Increase (Decrease) Percent

Change Foreign Exchange Impact (2)

(in thousands, except percentages)

eFinancialCareers

$ 82,190 $ 92,527 $ (10,337) (11.2) % $ —

ClearanceJobs

Tech-focused, excluding Dice Europe

Dice Europe (2)

28,977 24,745 4,232 17.1 % —

eFinancialCareers

25,711 32,098 (6,387) (19.9) % (55)

Total revenues $ 136,878 $ 149,370 $ (12,492) (8.4) % $ (55)

(1) Includes Dice U.S., and Career Events (formerly known as Targeted Job Fairs).

(2) Dice Europe ceased operations on August 31, 2018.

(3) The Company sold Hcareers on May 22, 2018.

(4) The Company sold the RigLogix portion of the Rigzone business on February 20, 2018 and majority ownership of the remaining Rigzone business was transferred to Rigzone management on August 31, 2018.

(5) The Company transferred majority ownership of the BioSpace business to BioSpace management on January 31, 2018.

(1) Includes Dice and Career Events.

(2) Foreign exchange impact is calculated by determining the increase (decrease) in current period revenues where current period revenues are translated using prior period exchange rates.

We experienced a decrease in the Tech-focused segment revenue of $2.9 million , or 1.9% , which was driven by Dice Europe's decline of $3.0 million due to its ceasing operations on August 31, 2018.

Excluding Dice Europe and the impacts of foreign exchange, revenue for the Tech-focused segment increased 1% year over year.

Revenue at Dice U.S.

decreased by $1.9 million , or 2.0% , for the year ended December 31, 2019 compared to the same period of 2018, an improvement from the 6.9% decline experienced during the year ended December 31, 2018.

Renewal rates have improved over the prior year period while recruitment package customer count was down slightly year over year.

Revenues for ClearanceJobs increased by $3.7 million , or 17.4%, for the year ended December 31, 2019 as compared to the same period in 2018 , driven by continued high demand for professionals with government clearance and consistent product releases and enhancements driving activity on the site.

eFinancialCareers revenue decreased $1.7 million , or 4.9%, compared to 2018, mainly due to the impact on U.K.

revenue from the uncertainty around Brexit and the impacts of foreign exchange.

Revenues for Other decreased $9.3 million , which was due to the non-tech businesses which were divested during 2018.

We experienced a decrease in revenue of $12.5 million, or 8.4%.

Revenue at Dice decreased by $10.3 million, or 11.2%, compared to the same period of 2019 due to the impact of the COVID-19 pandemic driving lower renewal rates year over year.

Revenues for ClearanceJobs increased by $4.2 million, or 17.1%, as compared to the same period of 2019, driven by continued high demand for professionals with government clearance and consistent product releases and enhancements driving activity on the site.

eFinancialCareers revenue decreased $6.4 million, or 19.9%, compared to 2019, due to the COVID-19 pandemic, uncertainty around Brexit, and political unrest in Hong Kong due to the imposition of its new security law.

Cost of Revenues

Year Ended December 31,

Year Ended December 31, Increase Percent

(in thousands, except percentages)

1 unchanged sentence

Percentage of revenues 12.5 % 10.9 %

Cost of revenues decreased by $2.1 million , or 11.5% , as the Tech-focused segment decreased $0.7 million and Other decreased $1.4 million.

In the Tech-focused segment, $0.5 million reduction was due to Dice Europe ceasing operations on August 31, 2018

and $0.9 million reduction was due to a decrease in technology infrastructure costs, partially offset by an increase in compensation related costs of $0.7 million.

Other decreased $1.4 million due to the non-tech businesses being divested during 2018.

Cost of revenues increased by $0.8 million, or 5.0%, primarily driven by an increase in compensation related costs, partially offset by higher capitalization of internal development costs, which decrease operating expenses.

Together, this increased expense $0.8 million.

Product Development Expenses

Year Ended December 31,

Year Ended December 31, Decrease Percent

(in thousands, except percentages)

1 unchanged sentence

Percentage of revenues 12.0 % 11.5 %

Product development expenses decreased $3.0 million or 14.8% , as the Tech-focused segment decreased $1.7 million and Other decreased $1.3 million.

The decrease in Tech-focused was mainly due to higher utilization of the Company's employees in the design and development of product enhancements and features for the Company's sites.

This resulted in a higher capitalization rate of internal development costs, which decreased operating expenses in the current period, and are reflected as purchases of fixed assets in the Consolidated Statements of Cash Flows.

Other decreased $1.3 million due to the non-tech businesses being divested during 2018.

Product development expenses decreased $0.7 million or 4.3%, driven by higher capitalization of internal development costs, which decreases operating expenses.

This was partially offset by an increase in compensation related costs due to higher headcount.

Together, this decreased expense $0.1 million.

The higher capitalization of internal development costs resulted from the Company's continued focus on the design and development of product enhancements and features for the Company's sites.

The Company also noted a decrease in travel and other costs due to COVID-19 of $0.6 million.

Sales and Marketing Expenses

Year Ended December 31,

Year Ended December 31, Decrease Percent

(in thousands, except percentages)

1 unchanged sentence

Percentage of revenues 37.2 % 37.4 %

Sales and marketing expenses decreased $3.8 million , or 6.4% , as the Tech-focused segment decreased $0.6 million and Other decreased $3.2 million.

In the Tech-focused segment, compensation related costs increased $3.9 million, of which $2.5 million related to higher sales commissions, including a transitional impact of adopting ASC Topic 606, while consulting costs, professional fees and events, together increased $1.6 million.

These increases were offset by a $4.0 million reduction in discretionary marketing expenses realized from efficiencies in vendor selection and a $2.3 million decrease due to Dice Europe ceasing operations on August 31, 2018.

Other decreased $3.2 million due to the non-tech businesses being divested during 2018.

Sales and marketing expenses decreased $5.1 million, or 9.0% from the same period in 2019.

Sales and marketing had an increase in compensation related costs of $4.9 million.

This increase was offset by $6.9 million in reduced discretionary marketing expenses realized from efficiencies in vendor selection and volumes and $3.1 million reduction in other operational costs due to the COVID-19 pandemic, including consulting and travel costs.

General and Administrative Expenses

Year Ended December 31,

Year Ended December 31, Increase Percent

(in thousands, except percentages)

1 unchanged sentence

Percentage of revenues 22.8 % 20.8 %

General and administrative costs decreased $6.6 million or 17.5% as the Tech-focused segment decreased $5.3 million and Other decreased $1.3 million.

In the Tech-focused segment, $2.1 million was due to a decrease in consulting costs, $1.3 million due to a decrease in legal fees and contingencies, which was primarily related to the applicability of provisions of the FCRA to one of our products, as described in Note 11 to the Consolidated Financial Statements, and a $1.8 million decrease mainly due to the resolution of a sales tax contingency and a decrease from lower stock based compensation, which was primarily due to the acceleration and vesting related to the Company's former Chief Executive Officer in 2018.

Other decreased $1.3 million due to the non-tech businesses being divested during 2018.

Year Ended December 31,

General and administrative costs increased $0.3 million or 0.8%, primarily due to an increase in compensation costs of $0.8 million and non-cash stock based compensation costs of $0.6 million, partially offset by a decrease in other operational costs of $1.4 million, including recruiting, consulting, and travel costs.

Year Ended December 31, Increase Percent

(in thousands, except percentages)

Depreciation $ 12,019 $ 9,743 $ 2,276 23.4 %

Percentage of revenues 8.8 % 6.5 %

Depreciation expense increased $0.5 million or 5.0% , as the Tech-focused segment increased $0.8 million and Other decreased $0.3 million.

In the Tech-focused segment, depreciation increased primarily in connection with the higher headcount and capitalization rate of internal development costs, which are reflected as purchases of fixed assets in the Consolidated Statements of Cash Flows.

Other decreased due to the non-tech businesses being divested during 2018.

Amortization of Intangible Assets

Year Ended December 31,

Depreciation expense increased $2.3 million or 23.4% from the same period in 2019, in connection with higher headcount driving higher capitalization of internal development costs, which are reflected as purchases of fixed assets in the Consolidated Statements of Cash Flows.

Impairment of Intangible Assets

Year Ended December 31, Increase Percent

(in thousands, except percentages)

Impairment of intangible assets $ 15,200 $ — $ 15,200 — %

Percentage of revenues 11.1 % — %

Amortization expense decreased by $0.5 million to zero due to the removal of amortizable intangible assets related to the non-tech businesses divested during the year ended December 31, 2018.

The Company has an indefinite-lived acquired intangible asset related to the Dice trademarks and brand name.

During the first and third quarters of 2020, due to the impacts of the COVID-19 pandemic, the Company performed interim impairment analyses of the Dice trademarks and brand name.

As a result of the analyses, the Company recorded impairment charges totaling $15.2 million during the three month periods ended March 31, 2020 and September 30, 2020.

See also Note 9 of the Notes to the Consolidated Financial Statements.

Impairment of Goodwill

Year Ended December 31, Increase Percent

(in thousands, except percentages)

Impairment of goodwill $ 23,626 $ — $ 23,626 — %

Percentage of revenues 17.3 % — %

During the first and third quarters of 2020, due to the impacts of the COVID-19 pandemic, the Company performed interim impairment analyses of goodwill.

As a result of the analyses, the Company recorded an impairment charge of $23.6 million during the three months ended September 30, 2020.

See also Note 10 of the Notes to the Consolidated Financial Statements.

Disposition Related and Other Costs

Year Ended December 31,

Year Ended December 31, Decrease Percent

(in thousands, except percentages)

1 unchanged sentence

Percentage of revenues — % 1.1 %

The disposition related and other costs of $1.7 million for the year ended December 31, 2019, as described in Note 14 to the Consolidated Financial Statements, are primarily due to severance and related costs incurred in reorganizing the Tech-focused business.

The disposition related and other costs of $7.6 million in 2018 are primarily due to severance, lease exit, and other related costs in connection with the non tech businesses divestiture process and the reorganization to the tech-focused strategy.

Disposition related and other costs of $1.7 million for the year ended December 31, 2019, as described in Note 15 to the Consolidated Financial Statements, are primarily due to severance and related costs incurred in reorganizing the Tech-focused business.

Other Operating Income (Loss)

Year Ended December 31,

Year Ended December 31, Increase Percent

(in thousands, except percentages)

1 unchanged sentence

Percentage of revenues — % (0.4) %

Other operating income (loss) for the year ended December 31, 2019, included a loss of $0.5 million on the 2018 sale of Hcareers, which was related to a post-closing adjustment upon the finalization of the working capital terms and related contingencies.

Other operating income (loss) for the year ended December 31, 2019 included a loss of $0.5 million on the 2018 sale of Hcareers due to the finalization of the working capital terms and related contingencies.

See also Note 4 to the Consolidated Financial Statements.

Other operating income for the year ended December 31, 2018 included a gain of $4.6 million related to the sale of the RigLogix portion of the Rigzone business on February 20, 2018 and a $0.8 million gain related to post closing price adjustment to the sale of the Health eCareers business.

These gains were partially offset by losses recognized on the sale of the Hcareers business on May 22, 2018 of $0.8 million, the transfer of majority ownership of the remaining Rigzone business to Rigzone management on August 31, 2018 of $0.7 million and the transfer of majority ownership of the BioSpace business to BioSpace management on January 31, 2018 of $0.5 million.

See also Note 4 of the Notes to Consolidated Financial Statements.

Operating Income

Year Ended December 31,

Operating Income (Loss)

Year Ended December 31, Decrease Percent

(in thousands, except percentages)

Operating Income

Revenue $ 136,878 $ 149,370 $ (12,492) (8.4) %

Operating income (loss) (29,605) 17,025 $ (46,630) (273.9) %

Percentages of revenues (21.6) % 11.4 %

Operating income for the year ended December 31, 2019 was $ 17.0 million , a margin of 11.4% , as compared to $ 11.7 million , a margin of 7.2% , for the same period in 2018 .

The increased operating income and percentage margin were driven by cost savings initiatives, a reduction in disposition related and other costs in 2019, higher utilization of the Company's employees in the design and development of product enhancements and features for the Company's sites, and the closure of Dice Europe in 2018, which had a lower operating margin.

Operating loss for the year ended December 31, 2020 was $29.6 million, a negative margin of 21.6%, compared to operating income of $17.0 million, a positive margin of 11.4%, for the same period in 2019.

The decrease in operating income and percentage margin was primarily driven by the non-cash impairments of goodwill and intangible assets of $38.8 million in the 2020 period, partially offset by the disposition and related costs of $1.7 million in the 2019 period.

Interest Expense and Other

Year Ended December 31,

Year Ended December 31, Increase Percent

(in thousands, except percentages)

Interest expense

Interest expense and other $ 827 $ 701 $ 126 18.0 %

Percentage of revenues 2.1 % 0.5 %

Interest expense decreased by $1.4 million , or 65.9% , from the same period in 2018 due to lower weighted-average debt outstanding during the year ended December 31, 2019.

Interest expense and other increased by $0.1 million, or 18.0%, from the same period in 2019.

Interest expense increased $0.3 million, primarily due to the higher weighted-average debt outstanding during the year ended December 31, 2020 as the Company borrowed on its revolving credit facility in the first quarter of 2020 for liquidity protection during the COVID-19 pandemic.

The increase in interest expense was offset by a $0.2 million gain recognized in the second quarter of 2020 on the sale of the Company's 20% interest in BioSpace.

Impairment of Equity Investment

Year Ended December 31, Decrease Percent

(in thousands, except percentages)

Impairment of equity investment $ (2,002) $ — $ (2,002) — %

Percentage of revenues (1.5) % — %

During the first quarter of 2020, due to the impacts from the COVID-19 pandemic, the Company determined the value of its 7.6% interest in a leading tech skills assessment company to be zero.

Accordingly, the Company recorded an impairment charge of $2.0 million during the first quarter of 2020.

Year Ended December 31,

(in thousands, except

Income before income taxes

Income tax expense

Income (loss) before income taxes $ (32,434) $ 16,324

Income tax expense (benefit) (2,419) 3,773

Effective tax rate 7.5 % 23.1 %

4 unchanged sentences

Stock-based compensation 482 380

Nondeductible impairment 5,274 —

State taxes, net of federal effect (315) 467

Difference between foreign and U.S.

rates 32 (192)

Change in accrual for unrecognized tax benefits (437) 107

1 unchanged sentence

Executive compensation 323 147

Currency translation gains (losses)

Currency translation losses (278) (67)

transition tax on foreign earnings — 140

1 unchanged sentence

Change in valuation allowances (30) 12

Income tax expense

Other (87) (260)

Income tax expense (benefit) $ (2,419) $ 3,773

Our effective income tax rate was 7.5% and 23.1% for the years ended December 31, 2020 and 2019, respectively.

The 2020 tax rate differed from the federal statutory rate primarily because of tax deficiencies in stock-based compensation;

nondeductible impairment charges;

a decreased accrual for unrecognized tax benefits;

and tax credits for research and development.

The 2019 tax rate differed from the federal statutory rate primarily because of tax deficiencies in stock-based compensation;

state tax expense;

and tax credits for research and development.

The 2018 tax rate differed from the federal statutory rate primarily because of permanent book/tax differences in basis related to the gain or loss on sale of businesses;

tax deficiencies in stock-based compensation;

a decreased accrual for unrecognized tax benefits;

and an increase in the valuation allowance for capital loss carryforwards.

Earnings per Share

2 unchanged sentences

per share amounts)

Net income (loss) $ (30,015) $ 12,551

Weighted-average shares outstanding-diluted 48,278 51,633

Diluted earnings per share

Diluted earnings per share was $0.24 and $0.14 for the years ended December 31, 2019 and 2018, respectively, an increase of $0.10 .

The improvement in earnings per share was primarily driven by the improved net income year over year.

Diluted earnings (loss) per share (0.62) 0.24

Diluted earnings (loss) per share was $(0.62) and $0.24 for the years ended December 31, 2020 and 2019, respectively.

The decrease in diluted earnings (loss) per share was primarily driven by the non-cash impairment charges during 2020.

Comparison of Years Ended December 31, 2019 and 2018

Year Ended December 31,

Increase (Decrease)

Foreign Exchange Impact (7)

Year Ended December 31, Increase (Decrease) Percent

Change Foreign Exchange Impact (6)

(in thousands, except percentages)

Tech-focused:

$ 92,527 $ 94,438 $ (1,911) (2.0) % $ —

eFinancialCareers 32,098 33,758 (1,660) (4.9) % (1,002)

2 unchanged sentences

Dice Europe (2)

Healthcare (3)

Slashdot Media and getTalent

— 2,976 (2,976) n.m.

Tech-focused 149,370 152,258 (2,888) (1.9) % (1,002)

— 5,329 (5,329) n.m.

— 3,771 (3,771) n.m.

— 212 (212) n.m.

Other — 9,312 (9,312) n.m.

Total revenues $ 149,370 $ 161,570 $ (12,200) (7.6) % $ (1,002)

(1) Includes Dice and Career Events (formerly known as Targeted Job Fairs)

(1) Includes Dice and Career Events

(2) Dice Europe ceased operations on August 31, 2018.

(3) The Company sold Health eCareers on December 4, 2017.

(3) The Company sold Hcareers on May 22, 2018.

2 unchanged sentences

(6) Foreign exchange impact is calculated by determining the increase (decrease) in current period revenues where current period revenues are translated using prior period exchange rates.

We experienced a decrease in the Tech-focused segment revenue of $6.1 million, or 3.9%.

We experienced a decrease in the Tech-focused segment revenue of $2.9 million, or 1.9%, which was driven by Dice Europe's decline of $3.0 million due to its ceasing operations on August 31, 2018.

Excluding Dice Europe and the impacts of foreign exchange, revenue for the Tech-focused segment increased 1% year over year.

Revenue at Dice U.S.

decreased by $7.0 million, or 6.9%, for the year ended December 31, 2018 compared to the same period of 2017.

The rate of Dice U.S.

revenue decline narrowed throughout the 2018 period, as compared to the 2017 period.

The lower Dice U.S.

revenues were a result of competition in the technology recruiting market, challenges in developing and introducing new products and product enhancements to the market, and the Company's ability to attribute value delivered to customers.

Recruitment package customer count in the U.S.

decreased from 6,450 at December 31, 2017 to 6,200 at December 31, 2018 while average monthly revenue per U.S.

recruitment package customer increased from $1,110 to $1,119 for the years ended December 31, 2017 and 2018, respectively.

Dice Europe revenue decreased by $4.1 million as compared to the same period in 2017 primarily due to Dice Europe ceasing operations on August 31, 2018.

Revenues for ClearanceJobs increased by $3.7 million for the year ended December 31, 2018 as compared to the same period in 2017, primarily due to continuing strong market conditions and enhanced product offerings.

eFinancialCareers revenue increased $1.3 million compared to 2017 primarily due to a positive impact of foreign exchange of $0.9 million, coupled with strong renewals and new business activity in its Asia market.

Healthcare segment revenue, consisting of Health eCareers, decreased as a result of Health eCareers being sold on December 4, 2017.

Revenues from the Other segment decreased by $15.9 million, or 63.0%, primarily due to the transfer of the majority ownership of BioSpace to BioSpace management on January 31, 2018, the sale of the RigLogix portion of the Rigzone business on February 20, 2018, sale of Hcareers on May 22, 2018, and transfer of the majority ownership of the remaining Rigzone business to Rigzone management on August 31, 2018.

Subsequent to the divestiture dates, BioSpace and Rigzone are no longer included in the Company's consolidated financial results.

decreased by $1.9 million, or 2.0%, for the year ended December 31, 2019 compared to the same period of 2018, an improvement from the 6.9% decline experienced during the year ended December 31, 2018.

Renewal rates have improved over the prior year period while recruitment package customer count was down slightly year over year.

Revenues for ClearanceJobs increased by $3.7 million, or 17.4%, for the year ended December 31, 2019 as compared to the same period in 2018, driven by continued high demand for professionals with government clearance and consistent product releases and enhancements driving activity on the site.

eFinancialCareers revenue decreased $1.7 million, or 4.9%, compared to 2018, mainly due to the impact on U.K.

revenue from the uncertainty around Brexit and the impacts of foreign exchange.

Revenues for Other decreased $9.3 million, which was due to the non-tech businesses which were divested during 2018.

Cost of Revenues

Year Ended December 31,

Year Ended December 31, Decrease Percent

(in thousands, except percentages)

1 unchanged sentence

Percentage of revenues 10.9 % 11.4 %

Cost of revenues decreased by $11.6 million, or 38.8%, as the Healthcare segment decreased by $8.6 million as a result of the sale of Heath eCareers on December 4, 2017.

Other cost of revenues decreased $2.8 million due to the divested businesses.

The Tech-focused segment decreased $0.2 million, which was primarily due to Dice Europe ceasing operations on August 31, 2018.

Cost of revenues decreased by $2.1 million, or 11.5%, as the Tech-focused segment decreased $0.7 million and Other decreased $1.4 million.

In the Tech-focused segment, $0.5 million reduction was due to Dice Europe ceasing operations on August 31, 2018 and $0.9 million reduction was due to a decrease in technology infrastructure costs, partially offset by an increase in compensation related costs of $0.7 million.

Other decreased $1.4 million due to the non-tech businesses being divested during 2018.

Product Development Expenses

Year Ended December 31,

Year Ended December 31, Decrease Percent

(in thousands, except percentages)

1 unchanged sentence

Percentage of revenues 11.5 % 12.5 %

Product development expenses decreased $4.8 million or 19.1%, as the Healthcare segment decreased $2.3 million due to the sale of Health eCareers on December 4, 2017.

Other decreased $3.8 million, of which $2.7 million related to divested businesses and $1.1 million was due to the discontinuance of getTalent in the third quarter of 2017.

These decreases were partially offset by an increase in the Tech-focused segment of $1.3 million, primarily due to compensation related costs as the segment develops new products and features.

Product development expenses decreased $3.0 million or 14.8%, as the Tech-focused segment decreased $1.7 million and Other decreased $1.3 million.

The decrease in Tech-focused was mainly due to higher utilization of the Company's employees in the design and development of product enhancements and features for the Company's sites.

Other decreased $1.3 million due to the non-tech businesses being divested during 2018.

Sales and Marketing Expenses

Year Ended December 31,

Year Ended December 31, Decrease Percent

(in thousands, except percentages)

1 unchanged sentence

Percentage of revenues 37.4 % 37.0 %

Sales and marketing expenses decreased $20.8 million, or 25.8%, as costs decreased $9.2 million in the Healthcare segment due to the Health eCareers sale on December 4, 2017.

Other decreased $8.7 million, of which $7.5 million was related to the divested businesses in 2018 and $1.2 million was due to the discontinuance of getTalent in the third quarter of 2017.

The Tech-focused segment decreased $2.9 million primarily due to Dice Europe ceasing operations on August 31, 2018.

In the on-going Tech-focused segment, expenses were approximately flat to the prior year, with increases in compensation related costs offset by savings in discretionary marketing.

Sales and marketing expenses decreased $3.8 million, or 6.4%, as the Tech-focused segment decreased $0.6 million and Other decreased $3.2 million.

Other decreased $3.2 million due to the non-tech businesses being divested during 2018.

General and Administrative Expenses

Year Ended December 31,

Year Ended December 31, Decrease Percent

(in thousands, except percentages)

1 unchanged sentence

Percentage of revenues 20.8 % 23.3 %

General and administrative costs decreased $3.2 million or 7.8%.

The Healthcare segment decreased $2.8 million due to the sale of Health eCareers on December 4, 2017.

Other decreased $2.2 million, which was primarily related to the divested businesses in 2018.

The Tech-focused segment increased $1.9 million, primarily due to a $2.8 million increase in consulting costs, $1.0 million for the Fair Credit Reporting Act lawsuit and $0.6 million related to recruiting and employee training.

These increases were partially offset by a $1.4 million decrease in stock based compensation costs and $1.3 million was due to lower legal and other professional fees.

Year Ended December 31,

General and administrative costs decreased $6.6 million or 17.5% as the Tech-focused segment decreased $5.3 million and Other decreased $1.3 million.

In the Tech-focused segment, $2.1 million was due to a decrease in consulting costs, $1.3 million due to a decrease in legal fees and contingencies, which was primarily related to the applicability of provisions of the FCRA to one of our products, as described in Note 12 to the Consolidated Financial Statements, and a $1.8 million decrease mainly due to the resolution of a sales tax contingency and a decrease from lower stock based compensation, which was primarily due to the acceleration and vesting related to the Company's former Chief Executive Officer in 2018.

Other decreased $1.3 million due to the non-tech businesses being divested during 2018.

Year Ended December 31, Increase Percent

(in thousands, except percentages)

Depreciation $ 9,743 $ 9,280 $ 463 5.0 %

Percentage of revenues 6.5 % 5.7 %

Depreciation expense for the year ended December 31, 2018 decreased $0.5 million or 4.8%.

Depreciation in the Healthcare segment decreased $1.6 million due to the sale of Health eCareers on December 4, 2017.

Depreciation in Other decreased $0.9 million due to the divested businesses in 2018.

Depreciation in the Tech-focused segment increased $2.0 million, which was driven by the development and release of new products and features in 2018 and the latter part of 2017.

Depreciation expense increased $0.5 million or 5.0%, as the Tech-focused segment increased $0.8 million and Other decreased $0.3 million.

Other decreased due to the non-tech businesses being divested during 2018.

Amortization of Intangible Assets

Year Ended December 31,

(in thousands, except percentages)

Percentage of revenues

Amortization expense for the year ended December 31, 2018 decreased $1.7 million, or 77.5%.

The decrease is primarily due to the divestiture of businesses in the Healthcare segment and Other.

Impairment of fixed and intangible assets

Year Ended December 31,

Year Ended December 31, Decrease Percent

(in thousands, except percentages)

Impairment of fixed and intangible assets

Amortization $ — $ 482 $ (482) (100.0) %

Percentage of revenues — % 0.3 %

During 2017, $2.2 million of capitalized development costs related to getTalent were written off as the getTalent services (included in Other) were discontinued during the third quarter of 2017.

No such costs were written off during the year ended December 31, 2018.

Amortization expense decreased by $0.5 million to zero due to the removal of amortizable intangible assets related to the non-tech businesses divested during the year ended December 31, 2018.

Disposition Related and Other Costs

Year Ended December 31,

Year Ended December 31, Decrease Percent

(in thousands, except percentages)

1 unchanged sentence

Percentage of revenues 1.1 % 4.7 %

Disposition related and other costs, as described in Note 14 of the Notes to Consolidated Financial Statements, increased $2.9 million or 60.5%.

The $7.6 million of expenses in 2018 was primarily due to the divestitures of the non-tech businesses and the reorganization to the tech-focused strategy, which primarily consisted of severance and retention, lease exit, business closure, professional fees related to activist shareholders, search, financial advisory, and legal services, and other costs to further these strategic objectives.

Disposition related and other costs of $4.7 million in 2017 are primarily due to severance and other related costs in connection with the divestiture process and the reorganization to the tech-focused strategy.

Other Operating Income

Year Ended December 31,

The disposition related and other costs of $1.7 million for the year ended December 31, 2019, as described in Note 15 to the Consolidated Financial Statements, are primarily due to severance and related costs incurred in reorganizing the Tech-focused business.

The disposition related and other costs of $7.6 million in 2018 are primarily due to severance, lease exit, and other related costs

in connection with the non tech businesses divestiture process and the reorganization to the tech-focused strategy.

Other Operating Income (Loss)

Year Ended December 31, Decrease Percent

(in thousands, except percentages)

Other operating income

Other operating income (loss) $ (537) $ 3,369 $ (3,906) (115.9) %

Percentage of revenues (0.4) % 2.1 %

See also Note 4 to the Consolidated Financial Statements.

1 unchanged sentence

See also Note 4 of the Notes to Consolidated Financial Statements.

Other operating income for the year ended December 31, 2017 included $6.7 million of gain on sale from the sale of the Health eCareers business (see Note 4) and proceeds from restitution award of $3.3 million in the OilPro related legal matter.

Operating Income

Year Ended December 31,

Year Ended December 31, Increase (Decrease) Percent

(in thousands, except percentages)

Revenue $ 149,370 $ 161,570 $ (12,200) (7.6) %

Operating income $ 17,025 $ 11,692 $ 5,333 45.6 %

Percentage of revenues 11.4 % 7.2 %

Operating income for the year ended December 31, 2018 was $11.7 million, a margin of 7.2%, compared to $22.9 million for the same period in 2017, a margin of 11.0%, and a year over year decrease of $11.2 million, or 48.9%.

Contributing to the higher margin in 2017 was the $6.7 million gain on the sale of Health eCareers and the $3.3 million restitution award related to an OilPro legal matter.

These increases were partially offset by a $2.2 million asset impairment in 2017 and the increase in disposition related and other costs of $2.9 million.

Interest Expense

Year Ended December 31,

Operating income for the year ended December 31, 2019 was $17.0 million, a margin of 11.4%, as compared to $11.7 million, a

margin of 7.2%, for the same period in 2018.

Interest Expense and Other

Year Ended December 31, Decrease Percent

(in thousands, except percentages)

1 unchanged sentence

Percentage of revenues 0.5 % 1.3 %

Interest expense for the year ended December 31, 2018 decreased $1.4 million or 40.4%.from the same period in 2017 primarily due to lower weighted-average debt outstanding during the year ended December 31, 2018.

Interest expense decreased by $1.4 million, or 65.9%, from the same period in 2018 due to lower weighted-average debt outstanding during the year ended December 31, 2019.

Year Ended December 31,

6 unchanged sentences

Federal statutory rate $ 3,428 $ 2,016

Loss on sale of businesses

Gain (loss) on sale of businesses 84 (6,111)

Stock-based compensation 380 2,112

1 unchanged sentence

Difference between foreign and U.S.

rates (192) (102)

Change in accrual for unrecognized tax benefits 107 (1,179)

1 unchanged sentence

Executive compensation 147 126

Currency translation gains

Gross tax on foreign dividend

Foreign tax credits

Currency translation gains (losses) (67) 219

transition tax on foreign earnings 140 368

Federal rate change impact on deferred tax liabilities

Research and development tax credits (557) (481)

Change in valuation allowances 12 5,117

Other (260) 152

Income tax expense $ 3,773 $ 2,428

Our effective income tax rate was 23.1% and 25.3% for the years ended December 31, 2019 and 2018, respectively.

The 2018 tax rate differed from the federal statutory rate because of permanent book/tax differences in basis related to the gain or loss on sale of businesses;

The 2019 tax rate differed from the federal statutory rate primarily because of tax deficiencies in stock-based compensation;

state tax expense;

and tax credits for research and development.

The 2018 tax rate differed from the federal statutory rate primarily because of permanent book/tax differences in basis related to the gain or loss on sale of businesses;

tax deficiencies in stock-based compensation;

1 unchanged sentence

and an increase in the valuation allowance for capital loss carryforwards.

The 2017 tax rate differed from the federal statutory rate for a number of reasons, including the allocation of income between the U.S.

and foreign jurisdictions;

permanent book/tax differences in basis related to the gain or loss on sale of businesses;

tax deficiencies in stock-based compensation;

an increased accrual for unrecognized tax benefits;

the transition tax on foreign earnings;

a decrease in deferred tax liabilities because of a change in the federal statutory rate;

credits for research and development;

and a reduction in the valuation allowance for foreign tax credits.

Earnings per Share

2 unchanged sentences

per share amounts)

Net income $ 12,551 $ 7,174

Weighted-average shares outstanding-diluted 51,633 49,605

Diluted earnings per share 0.24 0.14

Diluted earnings per share was $0.14 and $0.33 for the years ended December 31, 2018 and 2017, respectively, a decrease of $0.19.

The decrease was primarily due to 2017 including a $6.6 million gain on the sale of Health eCareers and $3.3 million in restitution awards, partially offset by a $2.9 million increase in disposition related and other costs in 2018.

Diluted earnings per share was $0.24 and $0.14 for the years ended December 31, 2019 and 2018, respectively, an increase of $0.10.

The improvement in earnings per share was primarily driven by the improved net income year over year.

Liquidity and Capital Resources

27 unchanged sentences

Year Ended December 31,

Health eCareers (1)

2020 2019 2018

Revenues $ 136,878 $ 149,370 $ 161,570

Adjusted Revenues $ 136,878 $ 149,370 $ 152,258

(1) The Company sold Health eCareers on December 4, 2017.

(1) The Company sold Hcareers on May 22, 2018.

(2) The Company sold the Riglogix portion of the Rigzone business on February 20, 2018 and transferred majority ownership of remaining Rigzone business to Rigzone management on August 31, 2018.

(4) The Company transferred majority ownership to BioSpace management on January 31, 2018.

(3) The Company transferred majority ownership of BioSpace to BioSpace management on January 31, 2018 and sold its remaining minority stake in BioSpace to BioSpace management on April 30, 2020.

A reconciliation of Adjusted EBITDA for the years ended December 31, 2020, 2019 and 2018 follows (in thousands):

Year Ended December 31,

Reconciliation of Net Income to Adjusted EBITDA:

2020 2019 2018

Reconciliation of Net Income (loss) to Adjusted EBITDA:

Net income (loss) $ (30,015) $ 12,551 $ 7,174

Interest expense 1,073 703 2,054

Income tax expense

Income tax expense (benefit) (2,419) 3,773 2,428

Depreciation 12,019 9,743 9,280

Amortization of intangible assets — — 482

Non-cash stock based compensation 6,327 5,704 6,606

Impairment of fixed and intangible assets

(Gain) loss on sale of businesses, net — 537 (3,369)

Costs related to strategic alternatives process

Disposition related and other costs — 1,700 7,619

Proceeds from restitution award

Legal contingencies and related fees — 149 1,965

Impairment of intangible assets 15,200 — —

Impairment of goodwill 23,626 — —

Impairment of equity investment 2,002 — —

Gain on sale of equity investment (200) — —

Divested businesses — — (2,243)

Severance and related costs 2,285 — —

Other 26 (1) 36

Adjusted EBITDA $ 29,924 $ 34,859 $ 32,032

3 unchanged sentences

Amortization of deferred financing costs (147) (147) (342)

Income tax expense

Income tax expense (benefit) (2,419) 3,773 2,428

Deferred income taxes 2,918 (2,493) (2,699)

2 unchanged sentences

Change in deferred revenue 8,193 4,583 18,866

Costs related to strategic alternatives process

Disposition related and other costs — 1,700 7,619

Proceeds from restitution award

Legal contingencies and related fees — 149 1,965

Divested businesses — — (2,243)

Severance and related costs 2,285 — —

Changes in working capital and other (249) 5,469 234

2 unchanged sentences

Year Ended December 31,

2020 2019 2018

Adjusted Revenues $ 136,878 $ 149,370 $ 152,258

3 unchanged sentences

Year Ended December 31,

2020 2019 2018

Cash from operating activities $ 18,683 $ 22,923 $ 14,918

15 unchanged sentences

Net cash flows from operating activities primarily consist of net income adjusted for certain non-cash items, including depreciation, amortization, changes in deferred tax assets and liabilities, stock based compensation and the effect of changes in working capital.

Net cash flows from operating activities were $18.7 million and $22.9 million for the years ended December 31, 2020 and 2019, respectively, a decrease of $4.2 million.

Cash inflow from operations is driven by earnings and is dependent on the amount and timing of billings and cash collection from our customers.

Cash provided by operating activities during the year ended December 31, 2020 decreased primarily due to lower billings to customers resulting from the COVID-19 pandemic, partially offset by cost savings implemented by the Company in response to the COVID-19 pandemic.

Investing Activities

During the year ended December 31, 2020, cash used in investing activities was $15.9 million compared to $11.5 million of cash used in investing activities during the year ended December 31, 2019.

Cash used by investing activities during the year ended December 31, 2020 increased from the comparable 2019 period due to higher capitalization of internally developed software of $1.9 million and $2.5 million lower receipts from the sale of businesses and equity investments.

Financing Activities

Cash used in financing activities during the year ended December 31, 2020 was $0.5 million primarily due to $10.0 million of net borrowings on long-term debt and $10.5 million of repurchases of common stock.

Cash used during the year ended December 31, 2019 was $12.4 million primarily due to $8.0 million of net repayments on long-term debt and $4.4 million of repurchases of common stock.

Comparison of Years Ended December 31, 2019 and 2018

Operating Activities

Net cash flows from operating activities were $22.9 million and $14.9 million for the years ended December 31, 2019 and 2018, respectively, an increase of $8.0 million.

3 unchanged sentences

Investing Activities

During the year ended December 31, 2019 , cash used in investing activities was $11.5 million compared to $7.5 million of cash provided by investing activities during the year ended December 31, 2018 .

During the year ended December 31, 2019, cash used in investing activities was $11.5 million compared to $7.5 million of cash

provided by investing activities during the year ended December 31, 2018.

Cash used by investing activities during the year ended December 31, 2019 was attributable to the acquisition of fixed assets, including costs of internally developed software, of $14.2 million, partially offset by escrow cash received from the sale of the non-tech businesses of $2.7 million.

3 unchanged sentences

Cash used during the year ended December 31, 2018 was $27.2 million primarily due to $24.0 million of net repayments on long-term debt and $2.0 million of repurchase of common stock.

Comparison of Years Ended December 31, 2018 and 2017

Operating Activities

Net cash flows from operating activities were $14.9 million and $34.4 million for the years ended December 31, 2018 and 2017, respectively, a decrease of $19.5 million.

Cash inflow from operations is driven by earnings and is dependent on the amount and timing of billings and cash collection from our customers.

Cash provided by operating activities during the year ended December 31, 2018 decreased due to $11.0 million lower earnings, which includes cash flows from operating activities, excluding changes in working capital, and $8.5 million from changes in working capital.

The lower earnings are primarily due to lower adjusted revenues of $6.1 million and the increase in disposition related and other costs of $2.9 million during the year ended December 31, 2018.

In addition, the proceeds from restitution award of $3.3 million in the year ended December 31, 2017 did not recur in the same period of 2018.

The changes in working capital are primarily due to increased flexibility in the Company's billing terms to customers to bring them in line with market standards.

Investing Activities

During the year ended December 31, 2018, cash provided by investing activities was $7.5 million compared to $0.8 million of cash used during the year ended December 31, 2017, an increase of $8.3 million.

Cash from investing activities during the year ended December 31, 2018 was attributable to net cash received from the sale of businesses of $17.5 million, partially offset by the acquisition of fixed assets, including costs of internally developed software, of $10.1 million.

Cash used in investing activities during the year ended December 31, 2017 was attributable to $13.2 million used to acquire fixed assets, including costs of internally developed software, partially offset by $12.9 million of net cash proceeds from the sale of the Health eCareers.

Financing Activities

Cash used in financing activities during the year ended December 31, 2018 was $27.2 million primarily due to $24.0 million of net repayments on long-term debt and $2.0 million of repurchases of common stock.

Cash used during the year ended December 31, 2017 was $44.8 million primarily due to $44.0 million of payments on long-term debt.

Financings and Capital Requirements

6 unchanged sentences

Unamortized debt issuance costs of $0.2 million were recorded to interest expense at the time of reduction.

Borrowings under the Credit Agreement bear interest, at the Company’s option, at a LIBOR rate or a base rate plus a margin.

Borrowings under the Credit Agreement bear interest, at the Company’s option, at a London Interbank Offered Rate ("LIBOR") rate or a base rate plus a margin.

The margin ranges from 1.75% to 2.50% on LIBOR loans and 0.75% to 1.50% on base rate loans, determined by the Company’s most recent consolidated leverage ratio.

16 unchanged sentences

We anticipate capital expenditures in 2021 to be approximately $16 million to $18 million.

The increase over prior periods is due to the additional investments in in the development of new products and features.

The increase over prior periods is due to the additional investments in the development of new products and features.

We intend to use operating cash flows to fund capital expenditures.

4 unchanged sentences

Payments due by period

Less Than 1 Year

More Than 5 Years

Total Less Than 1 Year 1-3 Years 3-5 Years More Than 5 Years

(in thousands)

9 unchanged sentences

Future interest payments on our Credit Agreement are variable due to our interest rate being based on a LIBOR rate or a base rate.

Assuming an int eres t rate of 3.56% (the rate in effect on December 31, 2019 ) on our current borrowings, interest payments are expected to be $0.4 million per year in 2020-2022 and $0.3 million in 2023.

Assuming an int eres t rate of 2.19% (the rate in effect on December 31, 2020) on our current borrowings, interest payments are expected to be $0.4 million per year in 2020-2023.

As of December 31, 2020, we recorded approximately $1.3 million of unrecognized tax benefits as liabilities, and we are uncertain if or when such amounts may be settled.

5 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis