What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2021-08-06 compared with 2021-05-05 · 227 added, 102 removed, 229 unchanged (59% of the section changed)

8 unchanged sentences

Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual financial results or results of operations and could cause actual results to differ materially from those in the forward-looking statements.

These factors include, but are not limited to, our ability to execute our tech-focused strategy, competition from existing and future competitors in the highly competitive markets in which we operate, failure to adapt our business model to keep pace with rapid changes in the recruiting and career services business, failure to maintain and develop our reputation and brand recognition, failure to increase or maintain the number of customers who purchase recruitment packages, cyclicality or downturns in the economy or industries we serve, the impact of the coronavirus COVID-19 outbreak on our operations and financial results, geopolitical events such as the uncertainty surrounding the UK's departure from the European Union (EU), civil unrest in Hong Kong and uncertainty in respect of the regulation of data protection and data privacy, failure to attract qualified professionals to our websites or grow the number of qualified professionals who use our websites, failure to successfully identify or integrate acquisitions, U.S.

These factors include, but are not limited to, our ability to execute our tech-focused strategy, competition from existing and future competitors in the highly competitive markets in which we operate, failure to adapt our business model to keep pace with rapid changes in the recruiting and career services business, failure to maintain and develop our reputation and brand recognition, failure to increase or maintain the number of customers who purchase recruitment packages, cyclicality or downturns in the economy or industries we serve, the impact of the coronavirus COVID-19 outbreak on our operations and financial results, geopolitical events such as the uncertainty surrounding the UK's departure from the European Union (EU) and civil unrest in Hong Kong, uncertainty in respect of the regulation of data protection and data privacy, failure to attract qualified professionals to our websites or grow the number of qualified professionals who use our websites, failure to successfully identify or integrate acquisitions, U.S.

and foreign government regulation of the Internet and taxation, our ability to borrow funds under our revolving credit facility or refinance our indebtedness and restrictions on our current and future operations under such indebtedness.

8 unchanged sentences

Our reports filed with the SEC are also available by visiting http://www.sec.gov .

We are a provider of software products, online tools and services that deliver career marketplaces to candidates and employers globally.

DHI’s three brands, Dice, ClearanceJobs and eFinancialCareers, enable recruiters and hiring managers to efficiently search, match and connect with highly skilled technologists in specialized fields, particularly technology, active government security clearance, and financial services.

We are a provider of software products, online tools and services that deliver career marketplaces to candidates and employers in the United States.

DHI’s brands, Dice and ClearanceJobs, enable recruiters and hiring managers to efficiently search, match and connect with highly skilled technologists in specialized fields, particularly technology and active government security clearance.

Professionals find ideal employment opportunities, relevant job advice and personalized data that help manage their technologist lives.

In online recruitment, we specialize in employment categories in which there has been a long-term scarcity of highly skilled, highly qualified professionals relative to market demand, specifically technologists who work in a variety of industries, have active government security clearances or a financial services background.

Our websites serve as online two-sided marketplaces where employers and recruiters source and connect with prospective employees, and where technologists find relevant job opportunities, data and information to further their careers.

Our websites offer job postings, news and content, career development and recruiting services tailored to the specific needs of the professional community that each website serves.

Majority ownership and control of DHI's eFinancialCareers ("eFC") business, which provides career websites to the financial services industry and has operations in the United Kingdom, Continental Europe, Asia, the Middle East and North America, was transferred to eFC management on June 30, 2021.

Recent Developments

On June 30, 2021, the Company transferred majority ownership and control of its eFC business to eFC's management.

The Company retained a 40% common share interest.

As a result, all ongoing DHI operations, which include the Dice and ClearanceJobs brands, are in the United States subsequent to June 30, 2021.

Our Revenues and Expenses

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Our Company sells recruitment packages that can include access to our databases of resumes and job posting capabilities.

We believe the key metrics that are material to an analysis of our businesses are our total number of Dice recruitment package customers and the revenue, on average, that these customers generate.

Average monthly revenue per recruitment package customer is calculated by dividing recruitment package customer revenue by the daily average count of recruitment package customers during the month, adjusted to reflect a thirty day month.

We use the simple average of each month to derive the quarterly amount.

At March 31, 2021 and 2020, Dice had approximately 5,200 and 5,850 total recruitment package customers in the U.S., respectively, and the average monthly revenue per U.S.

recruitment package customer was $1,153 for the three months ended March 31, 2020 compared to $1,128 for the three months ended March 31, 2021.

The decline was due to the negative impacts of the COVID-19 pandemic.

We believe the key metrics that are material to an analysis of our businesses are our total number of Dice and ClearanceJobs recruitment package customers and the revenue, on average, that these customers generate.

The tables below detail this customer data.

As of June 30,

Recruitment Package Customers:

Dice 5,441 5,450

ClearanceJobs 1,784 1,652

For the three months ended June 30, For the six months ended June 30,

Average Monthly Revenue per Recruitment Package Customer 1 :

2021 2020 2021 2020

Dice $ 1,124 $ 1,131 $ 1,126 $ 1,142

ClearanceJobs 1,394 1,353 1,384 1,328

(1) Calculated by dividing recruitment package customer revenue by the daily average count of recruitment package customers during each month, adjusted to reflect a thirty day month.

The simple average of each month is used to derive the amount for the three and six month periods..

Dice had 5,441 recruitment package customers as of June 30, 2021, which was approximately flat year over year while average revenue per recruitment package customer declined for the three and six month periods.

The decline was due to the COVID-19 pandemic, which drove lower renewal rates throughout 2020 and negatively impacted revenue into 2021.

ClearanceJobs had 1,784 recruitment package customers as of June 30, 2021 compared to 1,652 as of June 30, 2020 and average revenue per recruitment package customer increased for the three and six month periods.

The increases for ClearanceJobs were due to

continued high demand for professionals with government clearance and consistent product releases and enhancements driving activity on the site.

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

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We believe backlog to be an important measure of our business as it represents our ability to generate future revenue.

A summary of our deferred revenue and backlog as of March 31, 2021, December 31, 2020, and March 31, 2020 are presented in the table below.

Summary of Deferred Revenue and Backlog:

A summary of our deferred revenue and backlog is presented in the table below.

Deferred Revenue and Backlog:

6/30/2021 12/31/2020 6/30/2020

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(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 March 31, 2021 increased $7.7 million and $3.6 million from December 31, 2020 and March 31, 2020, respectively.

Backlog at June 30, 2021 increased $10.6 million and $15.7 million from December 31, 2020 and June 30, 2020, respectively.

Compared to December 31, 2020, the increase is due to the normal seasonal increase in number of customers that renew in the first quarter and a focus on signing multi-year contracts.

Compared to March 31, 2020, the increase is driven by the focus on multi-year contracts and continued growth at ClearanceJobs.

Compared to June 30, 2020, the increase is driven by bookings growth at both Dice and ClearanceJobs and the focus on multi-year contracts.

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.

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Product Releases

Dice Marketplace Dice IntelliSearch-Based Job Alerts, Dice Private Email, Dice Remote Jobs, Dice Recruiter Profile, Dice Instant Messaging

ClearanceJobs Meetings, ClearanceJobs Video

Dice Marketplace, Dice TalentSearch Social Data Refresh

Dice IntelliSearch-Based Job Alerts, Dice Private Email, Dice Remote Jobs, Dice Recruiter Profile, Dice Instant Messaging

ClearanceJobs Meetings, ClearanceJobs Video, Team Recruiting

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

eFinancialCareers Messaging, Video and Voice Calling, eFinancialCareers Follow and eFinancialCareers Job Alerts

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.

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There have been no material changes to our critical accounting policies as compared to the critical accounting policies described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

Three Months Ended March 31, 2021 Compared to the Three Months Ended March 31, 2020

Three Months Ended March 31, Increase (Decrease) Percent

Change Foreign Exchange Impact (2)

Three Months Ended June 30, 2021 Compared to the Three Months Ended June 30, 2020

Three Months Ended June 30, Increase (Decrease) Percent

(in thousands, except percentages)

1 unchanged sentence

ClearanceJobs 8,138 7,107 1,031 15 %

eFinancialCareers

5,957 7,248 (1,291) (18) % 328

Total revenues $ 28,721 $ 27,596 $ 1,125 4 %

1 unchanged sentence

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.

For the three months ended March 31, 2021, we experienced a decrease in revenue of $4.0 million, or 11%.

Revenue at Dice decreased $3.4 million, or 15%, compared to the same period in 2020 due to the impact of the COVID-19 pandemic driving lower renewal rates year over year.

For the three months ended June 30, 2021, we experienced an increase in revenue of $1.1 million, or 4%.

Revenue at Dice increased $0.1 million, or 0%, compared to the same period in 2020.

Dice renewal rates and new business activity improved from the prior year quarter along with consistently increasing customer counts since the third quarter of 2020, which drives additional revenue in future periods.

Revenues for ClearanceJobs increased $1.0 million, or 15%, as compared to the same period in 2020, primarily driven by continued high demand for professionals with government clearance and consistent product releases and enhancements driving activity on the site.

eFinancialCareers revenue decreased $1.3 million, or 18%, as compared to the same period in 2020 due to the COVID-19 pandemic, uncertainty around Brexit, and political unrest in Hong Kong due to the imposition of the security law.

Cost of Revenues

Three Months Ended March 31, Increase Percent

Three Months Ended June 30, Increase Percent

(in thousands, except percentages)

1 unchanged sentence

Percentage of revenues 12.5 % 12.7 %

Cost of revenues increased $0.1 million, or 3%, driven by an increase of $0.4 million from higher web hosting costs.

This was partially offset by an increase in capitalized labor of $0.2 million, which decreases operating expenses, and a decrease in compensation costs $0.1 million due to lower headcount.

Together, this decreased expense $0.3 million.

Cost of revenues increased $0.1 million, or 3%, driven by an increase of $0.2 million from higher web hosting costs and a decrease in capitalized labor of $0.1 million, which increases operating expenses.

Together, these increased expense $0.3 million.

These increases were partially offset by lower headcount and utility costs.

Product Development Expenses

Three Months Ended March 31, Increase Percent

Three Months Ended June 30, Increase Percent

(in thousands, except percentages)

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Percentage of revenues 12.2 % 12.3 %

Product development was approximately flat to the same period in 2020.

A decrease in capitalized labor of $0.2 million, which increases operating expenses, was offset by a decrease in compensation costs of $0.3 million due to lower headcount.

Together, this decreased expense $0.1 million.

Product development increased $0.1 million, or 3%, driven by an increase in consulting costs of $0.3 million and a decrease in capitalized labor of $0.6 million, which increases operating expenses.

Together, these increased expense $0.9 million.

These increases were partially offset by lower headcount of $0.8 million.

Sales and Marketing Expenses

Three Months Ended March 31, Decrease Percent

Three Months Ended June 30, Increase Percent

(in thousands, except percentages)

1 unchanged sentence

Percentage of revenues 35.3 % 34.7 %

Sales and marketing expenses increased $0.6 million, or 6% from the same period in 2020.

This increase was driven by a $0.4 million increase in discretionary marketing expenses as customer activity rebounded and a $0.2 million increase in operational costs, including travel and entertainment.

General and Administrative Expenses

Three Months Ended June 30, Increase Percent

(in thousands, except percentages)

General and administrative $ 6,939 $ 6,904 $ 35 1 %

Percentage of revenues 24.2 % 25.0 %

General and administrative expenses were flat with the prior year.

Stock based compensation expense increased approximately $0.4 million compared to the prior year due to higher achievement against targets for the Company's performance-based restricted stock units, while bad debt expense, professional fees and other operational costs decreased from the prior year.

Together, these changes left general and administrative expenses flat with the prior year.

Three Months Ended June 30, Increase Percent

(in thousands, except percentages)

Depreciation $ 4,040 $ 2,573 $ 1,467 57 %

Percentage of revenues 14.1 % 9.3 %

Depreciation expense increased $1.5 million or 57% from the same period in 2020 in connection with increasing internal development costs during 2019 and 2020 that were then placed in service, primarily in late 2020, and depreciated.

Internal development costs are reflected as purchases of fixed assets in the Condensed Consolidated Statements of Cash Flows.

Operating Income (Loss)

Three Months Ended June 30, Decrease Percent

(in thousands, except percentages)

Revenue $ 28,721 $ 27,596 $ 1,125 4 %

Operating income (loss) 488 1,655 (1,167) (71) %

Percentage of revenues 1.7 % 6.0 %

Operating income for the three months ended June 30, 2021 was $0.5 million, a margin of 1.7%, compared to operating income of $1.7 million, a margin of 6.0%, for the same period in 2020, a decrease of $1.2 million.

The decrease in operating income and percentage margin was primarily driven by the increase in depreciation expense, partially offset by higher revenues.

Interest Expense and Other

Three Months Ended June 30, Decrease Percent

(in thousands, except percentages)

Interest expense and other $ 87 $ 161 $ (74) (46) %

Percentage of revenues 0.3 % 0.6 %

Interest expense and other decreased $0.1 million, from the same period in 2020 due to lower debt outstanding.

Unrealized loss on equity security

Three Months Ended June 30, Decrease Percent

(in thousands, except percentages)

Unrealized loss on equity security $ (674) $ — $ (674) — %

Percentage of revenues (2.3) % — %

The unrealized loss on equity security relates to a minority interest representing less than 1% of the common stock of a technology company that became publicly traded during the first quarter of 2021 after filing an initial public offering.

See also Note 6 of the Notes to the Condensed Consolidated Financial Statements.

Three Months Ended June 30,

(in thousands, except

Income (loss) before income taxes $ (273) $ 1,494

Income tax expense (benefit) (61) 332

Effective tax rate 22.3 % 22.2 %

Our effective tax rate for both periods differed from the U.S.

statutory rate due to state income taxes and the allocation of income (loss) between jurisdictions.

Income (loss) from discontinued operations, net of tax

Three Months Ended June 30, Decrease Percent

(in thousands, except percentages)

Income (loss) from discontinued operations, net of tax $ (29,999) $ 700 $ (30,699) (4,386) %

Percentage of revenues (104.4) % 2.5 %

During the three months ended June 30, 2021, the Company transferred majority ownership of its eFC business and has recorded it as a discontinued operation.

As a result, the Company recognized a $30.0 million loss during the three months ended June 30, 2021.

The loss was comprised of $28.1 million related to the reclassification of currency translation adjustments and $5.2 million from the removal of eFC's net assets.

The loss was partially offset by the recording of an equity investment of $3.6 million and eFC's earnings during the three months ended June 30, 2021.

Income from discontinued operations for the three months ended June 30, 2020 represents eFC's earnings during the period.

Earnings (loss) per Share

Three Months Ended June 30,

(in thousands, except

per share amounts)

Income (loss) from continuing operations $ (212) $ 1,162

Weighted-average shares outstanding—diluted 47,227 49,691

Diluted earnings (loss) per share - continuing operations $ — $ 0.02

Income (loss) from discontinued operations $ (29,999) $ 700

Weighted-average shares outstanding—diluted 47,227 49,691

Diluted earnings (loss) per share - discontinued operations $ (0.64) $ 0.01

Net income (loss) $ (30,211) $ 1,862

Weighted-average shares outstanding—diluted 47,227 49,691

Diluted earnings (loss) per share $ (0.64) $ 0.04

Diluted earnings (loss) per share from continuing operations was zero and $0.02 for the three months ended June 30, 2021 and 2020, respectively.

The decrease was driven by the increase in depreciation expense and the unrealized loss on equity security, partially offset by higher revenues.

Diluted earnings (loss) per share was $(0.64) and $0.04 for the three month periods ended June 30, 2021 and 2020, respectively.

The decrease was driven by lower diluted earnings per share from continuing operations and the loss from discontinued operations.

Six Months Ended June 30, 2021 Compared to the Six Months Ended June 30, 2020

Six Months Ended June 30, Increase (Decrease) Percent

(in thousands, except percentages)

$ 39,634 $ 42,974 $ (3,340) (8) %

ClearanceJobs 15,763 14,007 1,756 13 %

Total revenues $ 55,397 $ 56,981 $ (1,584) (3) %

(1) Includes Dice U.S.

and Career Events

We experienced a decrease in revenue of $1.6 million, or 3%.

Revenue at Dice decreased by $3.3 million, or 8%, compared to the same period in 2020 as the COVID-19 pandemic drove lower renewal rates throughout 2020, which negatively impacted revenue into 2021.

Revenue at ClearanceJobs increased by $1.8 million, or 13%, as compared to the same period in 2020, primarily driven by continued high demand for professionals with government clearance and consistent product releases and enhancements driving activity on the site.

Cost of Revenues

Six Months Ended June 30, Increase Percent

(in thousands, except percentages)

Cost of revenues $ 7,295 $ 6,983 $ 313 4 %

Percentage of revenues 13.2 % 12.3 %

Cost of revenues increased $0.3 million, or 4%, primarily driven by an increase of $0.5 million from higher costs associated with web hosting and cloud computing.

These costs were partially offset by a decrease in compensation related and other costs of $0.2 million.

Product Development Expenses

Six Months Ended June 30, Decrease Percent

(in thousands, except percentages)

Product development $ 7,112 $ 7,142 $ (30) — %

Percentage of revenues 12.8 % 12.5 %

Product Development expenses were flat with the same period in 2020.

Within product development, the Company experienced a $1.3 million decrease in headcount related costs, which were offset by a decrease in capitalized labor, which increased expense $0.9 million, and an increase in consulting costs of $0.3 million.

Sales and Marketing Expenses

Six Months Ended June 30, Decrease Percent

(in thousands, except percentages)

Sales and marketing $ 19,922 $ 21,112 $ (1,190) (6) %

Percentage of revenues 36.0 % 37.1 %

Sales and marketing expenses decreased $1.2 million, or 6% from the same period in 2020.

Sales and marketing decreased $1.2 million as the Company reduced discretionary marketing expenses to track sales activity, decreased $0.5 million in compensation costs from lower headcount, and decreased $0.8 million in other operational costs, including travel and entertainment.

The decrease was primarily driven by a reduction in discretionary marketing spend of $0.6 million, a $0.4 million decrease in operational costs, including travel, entertainment, and consulting, and a $0.1 million decrease in compensation related costs.

General and Administrative Expenses

Three Months Ended March 31, Decrease Percent

Six Months Ended June 30, Decrease Percent

(in thousands, except percentages)

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Percentage of revenues 23.6 % 24.8 %

General and administrative expenses decreased $1.1 million, or 12%, primarily due to a decrease in other operational costs of $0.6 million, including recruiting, professional fees, travel, and a sales tax refund, combined with a decrease in compensation costs of $0.5 million driven by lower headcount and the prior year Chief Financial Officer transition.

Three Months Ended March 31, Increase Percent

General and administrative costs decreased $1.0 million, or 7%, from the same period in 2020.

The decrease was primarily driven by a decrease in compensation related costs of $0.6 million, a decrease in bad debt expense of $0.3 million, and a decrease in professional fees of $0.2 million.

Six Months Ended June 30, Increase Percent

(in thousands, except percentages)

1 unchanged sentence

Percentage of revenues 13.8 % 9.4 %

Depreciation expense increased $0.8 million or 26% from the same period in 2020, in connection with increasing internal development costs during 2019 and 2020, which are reflected as purchases of fixed assets in the Condensed Consolidated Statements of Cash Flows, and depreciated after being placed in service.

Depreciation expense increased $2.3 million, or 44%, from the same period in 2020, in connection with increasing internal development costs during 2019 and 2020 that were then placed in service, primarily in late 2020, and depreciated.

Internal development costs are reflected as purchases of fixed assets in the Condensed Consolidated Statements of Cash Flows.

Impairment of Intangible Assets

Three Months Ended March 31, Decrease Percent

Six Months Ended June 30, Decrease Percent

(in thousands, except percentages)

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

During the first quarter of 2020, because of the impacts of the COVID-19 pandemic, the Company performed an interim impairment analysis of

the Dice trademarks and brand name.

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

During the first quarter of 2020, because of the impacts of the COVID-19 pandemic, the Company performed an interim impairment analysis of the Dice trademarks and brand name.

As a result of the analysis, the Company recorded an impairment charge of $7.2 million during the six months ended June 30, 2020.

See also Note 8 of the Notes to the Condensed Consolidated Financial Statements.

Operating Income (Loss)

Three Months Ended March 31, Increase Percent

Six Months Ended June 30, Increase Percent

(in thousands, except percentages)

2 unchanged sentences

Percentage of revenues 0.5 % (8.6) %

Operating income for the three months ended March 31, 2021 was $0.5 million, a positive margin of 2%, compared to operating loss of $5.3 million, a negative margin of 14%, for the same period in 2020, an increase of $5.7 million.

The increase in operating income and percentage margin was primarily driven by the impairment of intangible assets of $7.2 million in the first quarter of 2020.

Operating income for the six months ended June 30, 2021 was $0.3 million, a margin of 0.5%, compared to an operating loss of $4.9 million, a negative margin of 8.6% for the same period during 2020.

The increase was primarily due to the $7.2 million impairment of the Dice trademark and brand name that occurred during the 2020 period while the 2021 period was impacted by higher depreciation expense.

Interest Expense and Other

Three Months Ended March 31, Increase Percent

Six Months Ended June 30, Decrease Percent

(in thousands, except percentages)

1 unchanged sentence

Percentage of revenues 0.5 % 0.6 %

Interest expense and other was approximately flat to the same period in 2020.

Interest expense and other decreased $0.1 million, or 19%, compared to the same period in 2020 due to lower debt outstanding.

Impairment of Equity Investment

Three Months Ended March 31, Increase Percent

Six Months Ended June 30, Increase Percent Change

(in thousands, except percentages)

1 unchanged sentence

Percentage of revenues 0.0 % (7.0) %

During the three months ended March 31, 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.

Unrealized gain on equity security

Three Months Ended March 31, Increase Percent

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.

Six Months Ended June 30, Increase Percent

(in thousands, except percentages)

1 unchanged sentence

Percentage of revenues 6.4 % — %

During the three months ended March 31, 2021, the Company recognized a $2.5 million unrealized gain on an equity security investment.

The unrealized gain was related to a minority interest representing less than 1% of the common stock of a technology company that became publicly traded during the first quarter of 2021 after filing an initial public offering.

The unrealized gain on equity security relates to a minority interest representing less than 1% of the common stock of a technology company that became publicly traded during the first quarter of 2021 after filing an initial public offering.

See also Note 6 of the Notes to the Condensed Consolidated Financial Statements.

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands, except

2 unchanged sentences

Effective tax rate 3.3 % 12.3 %

Our effective tax rate of 5.2% for the three months ended March 31, 2021, was lower than the U.S.

Our effective tax rate for the six months ended June 30, 2021, was lower than the U.S.

statutory rate due to a $0.4 million tax benefit from the release of a valuation allowance related to our capital loss carryforward.

The tax rate of 11.9% for the three months ended March 31, 2020, differed from the statutory rate due to a tax deficiency of $0.4 million related to the vesting or settlement of share-based compensation awards;

tax expense of $0.6 million from the nondeductible impairment of an equity investment;

and a tax benefit of $0.2 million from the expiration of the statute of limitations in certain foreign jurisdictions.

The tax rate for the six months ended June 30, 2020, differed from the statutory rate due to a tax deficiency of $0.4 million related to the vesting or settlement of share-based compensation awards;

and tax expense of $0.4 million from the nondeductible impairment of an equity investment.

Income (loss) from discontinued operations, net of tax

Six Months Ended June 30, Decrease Percent

(in thousands, except percentages)

Income (loss) from discontinued operations, net of tax $ (29,340) $ 1,685 $ (31,025) (1,841) %

Percentage of revenues (53.0) % 3.0 %

During the six months ended June 30, 2021, the Company transferred majority ownership of its eFC business and has recorded it as a discontinued operation.

As a result, the Company experienced a loss from discontinued operations, net of tax, of $29.3 million during the six months ended June 30, 2021.

The loss was comprised of $28.1 million related to the reclassification of currency translation adjustments and $5.2 million from the removal of eFC's net assets.

The loss was partially offset by the recording of an equity investment of $3.6 million and eFC's earnings during the six months ended June 30, 2021.

Income from discontinued operations for the six months ended June 30, 2020 represents eFC's earnings during the period.

Earnings (loss) per Share

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands, except

per share amounts)

Income (loss) from continuing operations $ 1,800 $ (6,373)

Weighted-average shares outstanding—diluted 48,854 48,781

Diluted earnings (loss) per share - continuing operations $ 0.04 $ (0.13)

Income (loss) from discontinued operations $ (29,340) $ 1,685

Weighted-average shares outstanding—diluted 48,854 48,781

Diluted earnings (loss) per share - discontinued operations $ (0.60) $ 0.03

Net income (loss) $ (27,540) $ (4,688)

1 unchanged sentence

Diluted earnings (loss) per share $ (0.56) $ (0.10)

Diluted earnings (loss) per share was $0.05 and $(0.13) for the three month periods ended March 31, 2021 and 2020, respectively.

The increase in earnings per share was primarily driven by the unrealized gain on equity securities in 2021 and the impairment charge in 2020.

Diluted earnings (loss) per share from continuing operations was $0.04 and ($0.13) for the six months ended June 30, 2021 and 2020, respectively.

The increase was driven by the unrealized gain on equity security in the 2021 period and the impairment charge in the 2020 period, partially offset by lower revenues and higher depreciation expense.

Diluted earnings (loss) per share was $(0.56) and $(0.10) for the six months ended June 30, 2021 and 2020, respectively.

The decrease was driven by the loss from discontinued operations, partially offset by higher diluted earnings per share from continuing operations.

Liquidity and Capital Resources

8 unchanged sentences

The Company also uses this measure to calculate amounts of performance based compensation under the senior management incentive bonus program.

Adjusted EBITDA represents net income plus (to the extent deducted in calculating such net income) interest expense, income tax expense, depreciation and amortization, non-cash stock based compensation, losses resulting from certain dispositions outside the ordinary course of business including prior negative operating results of those divested businesses, certain writeoffs in connection with indebtedness, impairment charges with respect to long-lived assets, expenses incurred in connection with an equity offering or any other offering of securities by the Company, extraordinary or non-recurring non-cash expenses or losses, transaction costs in connection with the credit agreement, deferred revenues written off in connection with acquisition purchase accounting adjustments, write-off of non-cash stock based compensation expense, severance and retention costs related to dispositions and reorganizations of the Company, and losses related to legal claims and fees that are unusual in nature or infrequent, minus (to the extent included in calculating

such net income) non-cash income or gains, interest income, business interruption insurance proceeds, and any income or gain resulting from certain dispositions outside the ordinary course of business, including prior positive operating results of those divested businesses, and gains related to legal claims that are unusual in nature or infrequent.

We also consider Adjusted EBITDA, as defined above, to be an important indicator to investors because it provides information related to our ability to provide cash flows to meet future debt service, capital expenditures and working capital requirements and to fund future growth.

10 unchanged sentences

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

A reconciliation of Adjusted EBITDA for the three months ended March 31, 2021 and 2020 follows (in thousands):

Three Months Ended March 31,

A reconciliation of Adjusted EBITDA for the six months ended June 30, 2021 and 2020 follows (in thousands):

Six Months Ended June 30,

Reconciliation of Net Income (loss) to Adjusted EBITDA:

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Unrealized gain on equity security (1,839) —

Disposition costs 602 —

Gain on sale of equity investment — (200)

Severance and related costs 1,311 913

Loss (income) from discontinued operations, net of tax 29,340 (1,685)

Adjusted EBITDA $ 12,725 $ 11,670

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Change in deferred revenue (7,118) 4,041

Disposition costs 602 —

Discontinued operations results (3,593) (3,633)

Severance and related costs 1,311 913

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Adjusted EBITDA $ 12,725 $ 11,670

A reconciliation of Adjusted EBITDA Margin for the three months ended March 31, 2021 and 2020 follows (in thousands):

Three Months Ended March 31,

A reconciliation of Adjusted EBITDA Margin for the six months ended June 30, 2021 and 2020 follows (in thousands):

Six Months Ended June 30,

Revenues $ 55,397 $ 56,981

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Adjusted EBITDA Margin 23 % 20 %

We have summarized our cash flows for the three months ended March 31, 2021 and 2020 (in thousands).

Three Months Ended March 31,

We have summarized our cash flows for the six months ended June 30, 2021 and 2020 (in thousands).

Six Months Ended June 30,

Cash from operating activities $ 19,298 $ 10,020

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We have financed our operations primarily through cash provided by operating activities and borrowings under our revolving credit facility.

At March 31, 2021, we had cash of $7.3 million compared to $7.6 million at December 31, 2020.

Cash held by foreign subsidiaries totaled approximately $3.5 million and $3.1 million at March 31, 2021 and December 31, 2020, respectively.

Cash and cash equivalent balances and cash generation in the United States, along with the unused portion of our revolving credit facility, are sufficient to maintain liquidity and meet our obligations without being dependent on cash and earnings from our foreign subsidiaries.

At June 30, 2021, we had cash of $7.9 million compared to $4.5 million at December 31, 2020.

Our principal internal sources of liquidity are cash and cash equivalents, as well as the cash flow that we generate from our operations.

In addition, we had $70.0 million in borrowing capacity under our $90.0 million Credit Agreement at March 31, 2021, subject to certain availability limits including our consolidated leverage ratio, which generally limits borrowings to 2.5 times annual adjusted EBITDA levels, as defined in the Credit Agreement.

We believe that our existing U.S.

cash and cash equivalents, cash generated from operations and available borrowings under our Credit Agreement will be sufficient to satisfy our currently anticipated cash requirements through at least the next 12 months and the foreseeable future thereafter.

In addition, we had $74.0 million in borrowing capacity under our $90.0 million Credit Agreement at June 30, 2021, subject to certain availability limits including our consolidated leverage ratio, which generally limits borrowings to 2.5 times annual adjusted EBITDA levels, as defined in the Credit Agreement.

We believe that our existing cash and cash equivalents, cash generated from our continuing operations and available borrowings under our Credit Agreement will be sufficient to satisfy our currently anticipated cash requirements through at least the next 12 months and the foreseeable future thereafter.

However, it is possible that one or more lenders under the Credit Agreement may refuse or be unable to satisfy their commitment to lend to us, we may violate one or more of our covenants or financial ratios contained in our Credit Agreement or we may need to refinance our debt and be unable to do so.

In addition, our liquidity could be negatively affected by a decrease in demand for our products and services and the ability of our customers to pay for current or future services, including from the impact of the COVID-19 pandemic.

We may also make acquisitions and may need to raise additional capital through future debt financings or equity offerings to the extent necessary to fund such acquisitions, which we may not be able to do on a timely basis or on terms satisfactory to us or at all.

Operating Activities

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, impairments, unrealized gain on equity security, and the effect of changes in working capital.

Net cash flows from operating activities were $6.4 million and $2.9 million for three month periods ended March 31, 2021 and 2020, respectively.

Net cash flows from operating activities were $19.3 million and $10.0 million for six month periods ended June 30, 2021 and 2020, respectively.

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

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Investing Activities

Cash used in investing activities during the three month period ended March 31, 2021 was $3.7 million compared to $4.3 million used in the same period of 2020.

Cash used in investing activities in the three month period ended March 31, 2021 decreased from the comparable 2020 period due to lower internal development costs, primarily driven by lower headcount.

Cash used in investing activities during the six month period ended June 30, 2021 was $9.8 million compared to $8.2 million used in the same period of 2020.

Cash used in investing activities in the six month period ended June 30, 2021 increased from the comparable 2020 period due to cash retained in the eFC business and lower internal development costs, primarily driven by lower headcount and development activities dedicated to the transfer of the eFC business.

Financing Activities

Cash used in financing activities during the three month period ended March 31, 2021 was $3.0 million and was driven by share repurchases.

Cash from financing activities during the three month period ended March 31, 2020 was $24.0 million, primarily due to $27.0 million of net proceeds on long-term debt, partially offset by $3.0 million related to share repurchases.

Cash used in financing activities during the six month period ended June 30, 2021 was $9.3 million and was driven by $4.0 million of net repayments on long-term debt and $5.3 million related to share repurchases.

Cash from financing activities during the six month period ended June 30, 2020 was $20.4 million, primarily due to $27.0 million of net proceeds on long-term debt, partially offset by $6.6 million related to share repurchases.

Credit Agreement

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(a wholly-owned subsidiary of the Company) and its wholly-owned subsidiary, Dice Career Solutions, Inc.

(collectively, the "Borrowers") entered into the Second Amended and Restated Credit Agreement (the "Credit Agreement"), which matures in November 2023, and replaced the previously existing credit agreement dated November 2015.

(collectively, the "Borrowers") entered into the Second Amended and Restated Credit Agreement as further amended in June 2021 (the "Credit Agreement"), which matures in November 2023, and replaced the previously existing credit agreement dated November 2015.

The June 2021 amendment modified the credit agreement to allow for the disposition of the eFC business.

The Credit Agreement provides for a revolving loan facility of $90 million, with an expansion option up to $140 million, as permitted under the terms of the Credit Agreement.

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The Credit Agreement also provides that the payment of obligations may be accelerated upon the occurrence of customary events of default, including, but not limited to, non-payment, change of control, or insolvency.

As of March 31, 2021, the Company was in compliance with all of the financial covenants under the Credit Agreement.

As of June 30, 2021, the Company was in compliance with all of the financial covenants under the Credit Agreement.

Refer to Note 10 in the Notes to the Condensed Consolidated Financial Statements.

The obligations under the Credit Agreement are guaranteed by two of the Company's U.S.

based wholly-owned subsidiaries and secured by substantially all of the assets of the Borrowers and the guarantors and stock pledges from certain of the Company's foreign subsidiaries.

based wholly-owned subsidiaries and secured by substantially all of the assets of the Borrowers and the guarantors.

Off-Balance Sheet Arrangements

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Commitments and Contingencies

The following table presents certain minimum payments due and the estimated timing under contractual obligations with minimum firm commitments as of March 31, 2021:

The following table presents certain minimum payments due and the estimated timing under contractual obligations with minimum firm commitments as of June 30, 2021:

Payments Due By Period

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Our principal commitments consist of obligations under operating leases for office space and equipment and long-term debt.

As of March 31, 2021, we had $20.0 million outstanding under our Credit Agreement.

As of June 30, 2021, we had $16.0 million outstanding under our Credit Agreement.

Interest payments are due at varying, specified periods (to a maximum of three months) based on the type of loan (LIBOR or base rate loan) we choose.

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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 interest rate of 1.88% (the rate in effect on March 31, 2021) on our current borrowings, interest payments are expected to be approximately $0.3 million for the remainder of 2021, approximately $0.4 million for 2022, and approximately $0.3 million for 2023.

As of March 31, 2021, we had approximately $1.4 million of unrecognized tax benefits as liabilities, and it is uncertain if or when such amounts may be settled.

Assuming an interest rate of 1.88% (the rate in effect on June 30, 2021) on our current borrowings, interest payments are expected to be approximately $0.2 million for the remainder of 2021, approximately $0.3 million for 2022, and approximately $0.3 million for 2023.

As of June 30, 2021, we had approximately $1.0 million of unrecognized tax benefits as liabilities, and it is uncertain if or when such amounts may be settled.

Related to the unrecognized tax benefits considered permanent differences, we have also recorded a liability for potential penalties and interest.

Included in the balance of unrecognized tax benefits at March 31, 2021 are $1.4 million of tax benefits that, if recognized, would affect the effective tax rate.

Included in the balance of unrecognized tax benefits at June 30, 2021 are $1.0 million of tax benefits that, if recognized, would affect the effective tax rate.

The Company believes it is reasonably possible that as much as $0.3 million of its unrecognized tax benefits may be recognized in the next twelve months.

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The spread of the coronavirus disease (“COVID-19”) has caused an economic downturn on a global scale, as well as significant volatility in the financial markets.

In March 2020, the World Health Organization declared the spread of the COVID-19 virus a

In March 2020, the World Health Organization declared the spread of the COVID-19 virus a pandemic.

COVID-19 has slowed recruitment activity for our businesses this year as employers have slowed hiring, which has reduced our revenues and operating cash flows.

We expect the pandemic will continue to negatively impact our financial performance in the coming months, but, based on information currently available, we are not anticipating a significant long-term impact on our business and operations, results of operations, financial condition, cash flows, liquidity and capital and financial resources.

We expect the pandemic may continue to negatively impact our financial performance in the coming months, but, based on information currently available, we are not anticipating a significant long-term impact on our business and operations, results of operations, financial condition, cash flows, liquidity and capital and financial resources.

However, the situation is uncertain and rapidly changing.

The Company cannot at this time predict the ultimate impact that the COVID-19 pandemic will have on its financial condition and operations.

In an effort to protect the health and safety of our employees, we have taken action to adopt social distancing policies at our locations around the world, including working from home, closing of our office locations where necessary, and suspending employee travel.

In an effort to protect the health and safety of our employees, we have taken action to adopt social distancing policies at our office locations, including working from home and the temporary closure of our locations where necessary.

We may have to take further actions that we determine are in the best interests of our employees or as required by federal, state, or local authorities.

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The extent of the pandemic’s effect on our operational and financial performance will depend in large part on future developments, which cannot be predicted with confidence at this time.

Future developments include the duration, scope and severity of the pandemic, the actions taken to contain or mitigate its impact, the impact on governmental programs and budgets, the development of treatments or vaccines, and the resumption of widespread economic activity.

Future developments include the duration, scope and severity of the pandemic, the actions taken to contain or mitigate its impact, the impact on governmental programs and budgets, the further development of additional treatments or vaccines, and the resumption of widespread economic activity.

While we expect the pandemic will continue to negatively impact our financial performance in the coming months, due to the inherent uncertainty of the unprecedented and rapidly evolving situation, we may not be able to predict the likely impact of the COVID-19 pandemic on our future operations.

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Any slowdown in recruitment activity that occurs could negatively impact our revenues and results of operations.

The COVID-19 pandemic has resulted in a slowdown of recruiting activity this year, which has negatively impacted our business.

For instance, the COVID-19 pandemic resulted in a slowdown of recruiting activity in 2020, which negatively impacted our business.

Alternatively, a decrease in the unemployment rate or a labor shortage, including as a result of an increase in job turnover, generally means that employers (including our customers) are seeking to hire more individuals, which would generally lead to more job postings and database licenses and have a positive impact on our revenues and results of operations.

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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-Q

Item 2. Management’s Discussion and Analysis