What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-05-04 compared with 2021-11-10 · 145 added, 316 removed, 177 unchanged (72% 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, 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 potential impact of COVID-19 on our operations and financial results, geopolitical events, 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.

9 unchanged sentences

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

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

5 unchanged sentences

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

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

Based on our operating structure, we have identified one reportable segment, Tech-focused, which includes the Dice and ClearanceJobs businesses and corporate related costs.

The Dice and ClearanceJobs businesses and corporate related costs are aggregated into the Tech-focused reportable segment primarily because the Company does not have discrete financial information for those brands or costs.

As a result of the eFC separation, the eFC business was deconsolidated from the Company's consolidated financial statements as of June 30, 2021 and is reflected as a discontinued operation for all periods presented on or before June 30, 2021.

Recent Developments

5 unchanged sentences

The tables below detail this customer data.

As of September 30, Increase (Decrease) Percent

As of March 31, Increase (Decrease) Percent

Recruitment Package Customers:

1 unchanged sentence

ClearanceJobs 1,928 1,753 175 10%

Average Monthly Revenue per Recruitment Package Customer (1)

Three months ended September 30, Nine months ended September 30,

Average Annual Revenue per Recruitment Package Customer (1)

Three months ended March 31,

2022 2021 Increase (Decrease) Percent

Change 2021 2020 Increase (Decrease) Percent

Dice $ 14,112 $ 13,536 $ 576 4 %

ClearanceJobs $ 18,408 $ 16,476 $ 1,932 12 %

(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 each period.

Dice had 5,770 recruitment package customers as of September 30, 2021, which was an increase of 470, or 9%, year over year and average revenue per recruitment package customer for Dice increased for the three month period while it decreased for the nine month period.

The increases were driven by strong renewal rates and new business activity while the decrease in revenue per recruitment package customer for the nine month period was due to the low levels of customer activity in 2020 that impacted revenues into 2021.

ClearanceJobs had 1,816 recruitment package customers as of September 30, 2021 compared to 1,682 as of September 30, 2020, an increase of 8%, and average revenue per recruitment package customer increased for both the three and nine month periods.

(1) Calculated by dividing recruitment package customer revenue by the daily average count of recruitment package customers during each month, adjusted to reflect a 30-day month.

The simple average of each month is used to derive the amount for each period and then annualized to reflect 12 months.

Dice had 6,249 recruitment package customers as of March 31, 2022, which was an increase of 1,049, or 20%, year over year and annualized revenue per recruitment package customer for Dice increased $576, or 4%, year over year.

The increases were driven by strong renewal rates and new business activity.

ClearanceJobs had 1,928 recruitment package customers as of March 31, 2022 compared to 1,753 as of March 31, 2021, an increase of 10%, and annualized revenue per recruitment package customer increased $1,932, or 12%, year over year.

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.

Backlog consists of deferred revenue plus customer contractual commitments not invoiced

representing the value of future services to be rendered under committed contracts.

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

6 unchanged sentences

(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 September 30, 2021 increased $15.5 million and $26.1 million from December 31, 2020 and September 30, 2020, respectively.

The increase in backlog compared to December 31, 2020 and September 30, 2020 is due to the strong technology recruitment market driving bookings growth at both Dice and ClearanceJobs and a focus on signing multi-year contracts.

Backlog at March 31, 2022 increased $13.4 million and $35.3 million from December 31, 2021 and March 31, 2021, respectively.

The increase in backlog compared to December 31, 2021 and March 31, 2021 is due to the strong technology recruitment market driving bookings growth at both Dice and ClearanceJobs, a focus on signing multi-year contracts, and the Company's ongoing investments in sales and marketing.

The first quarter of each year is generally the largest bookings quarter of the year, also contributing to the growth from December 31, 2021.

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

Product Releases

Dice Marketplace, Dice TalentSearch Social Data Refresh, Brand.io, TalentSearch Personalization

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

ClearanceJobs Meetings, ClearanceJobs Video, Team Recruiting, Shared Talent Pipelines

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

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, such as the innovative products in the table below.

Product Releases

Dice TalentSearch Time Zone Search Dice Marketplace, Dice TalentSearch Social Data Refresh, Brand.io, TalentSearch Personalization, Unbiased Sourcing Mode

ClearanceJobs Live Video ClearanceJobs Meetings, ClearanceJobs Video, Team Recruiting, Shared Talent Pipelines, Quality of Use Improvements

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 two-sided marketplaces, our customers may no longer find our services attractive, which could have a negative impact on our results of operations.

If we are unable to continue to attract qualified

professionals to engage with our two-sided marketplaces, 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 for jobs.

2 unchanged sentences

Personnel costs are categorized in our statement of operations based on each employee’s principal function.

Personnel costs incurred during the application development stage of internal use software and website development are recorded as fixed assets and amortized to

depreciation expense in the statement of operations over the estimated useful life of the asset.

Personnel costs incurred during the application development stage of internal use software and website development are recorded as fixed assets and amortized to depreciation expense in the statement of operations over the estimated useful life of the asset.

Marketing expenditures primarily consist of online advertising, brand promotion and lead generation to employers and job seekers.

Critical Accounting Policies

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

Three Months Ended September 30, Increase (Decrease) Percent

Critical Accounting Estimates

There have been no material changes to our critical accounting estimates as compared to the critical accounting policies described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

Three Months Ended March 31, 2022 Compared to the Three Months Ended March 31, 2021

Three Months Ended March 31, Increase (Decrease) Percent

(in thousands, except percentages)

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(1) Includes Dice and Career Events

For the three months ended September 30, 2021, we experienced an increase in revenue of $3.6 million, or 13%.

Revenue at Dice increased $2.4 million, or 12%, 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 during 2021, which drives additional revenue in future periods.

For the three months ended March 31, 2022 we experienced an increase in revenue of $7.7 million, or 29%.

Revenue at Dice increased $5.6 million, or 29%, compared to the same period in 2021 due to improvements in renewal rates and new business activity along with consistently increasing customer counts, which drives additional revenue in future periods.

Revenues for ClearanceJobs increased $2.1 million, or 27%, as compared to the same period in 2021, 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

Three Months Ended September 30, Increase Percent

Three Months Ended March 31, Increase Percent

(in thousands, except percentages)

1 unchanged sentence

Percentage of revenues 11.9 % 13.9 %

Cost of revenues increased $0.2 million, or 7%, driven by an increase of $0.2 million from higher cloud computing amortization and a decrease in capitalized labor of $0.1 million, which increases operating expenses.

Cost of revenues increased $0.4 million, or 11%, driven by an increase of $0.2 million from higher compensation related costs from higher headcount and a decrease in capitalized labor of $0.2 million, which increases operating expenses.

Together, these increased expense $0.4 million.

Product Development Expenses

Three Months Ended September 30, Increase Percent

Three Months Ended March 31, Increase Percent

(in thousands, except percentages)

1 unchanged sentence

Percentage of revenues 11.5 % 13.5 %

Product development increased $0.4 million, or 10%, driven by a decrease in capitalized labor of $0.4 million, which increases operating expenses.

Product development increased $0.3 million, or 9%, driven by an increase of $1.0 million from higher compensation related costs partially offset by an increase in capitalized labor of $0.6 million, which decreases operating expenses.

Sales and Marketing Expenses

Three Months Ended September 30, Increase Percent

Three Months Ended March 31, Increase Percent

(in thousands, except percentages)

2 unchanged sentences

Sales and marketing expenses increased $4.2 million, or 43% from the same period in 2021.

This increase was driven by a $1.3 million increase in compensation related costs from higher headcount and quota attainment versus sales plan, $0.7 million increase in discretionary marketing expenses as customer recruitment activity rebounded, and a $0.2 million increase in operational costs, including company events.

This increase was driven by a $2.4 million increase in compensation related costs from higher headcount and quota attainment versus sales plan, $1.4 million increase in discretionary marketing expenses with strong customer recruitment activity, and a $0.4 million increase in operational costs, including travel and entertainment and company events as COVID-19 restrictions ease.

General and Administrative Expenses

Three Months Ended September 30, Increase Percent

Three Months Ended March 31, Increase Percent

(in thousands, except percentages)

2 unchanged sentences

General and administrative expenses increased $1.6 million, or 26% from the prior year.

The increase was driven by stock based compensation expense, which increased approximately $0.8 million, primarily due to higher achievement against targets for the Company's PSUs.

Compensation related costs increased $0.5 million, which was driven by higher bonus costs as the Company has exceeded bonus targets and a change in the Company's vacation policy that was implemented during the current quarter.

These increases were partially offset by a decrease in professional fees and other operational costs from the prior year.

Three Months Ended September 30, Increase Percent

The increase was driven by stock-based compensation expense, which increased $0.6 million, primarily due to higher achievement against targets for the Company's PSUs.

Compensation related costs increased $0.5 million and operational costs, including recruiting and training, increased $0.4 million.

Together these increased expense $1.5 million.

Three Months Ended March 31, Increase Percent

(in thousands, except percentages)

1 unchanged sentence

Percentage of revenues 11.5 % 13.6 %

Depreciation expense increased $2.0 million or 82% 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 September 30, Decrease Percent

(in thousands, except percentages)

Impairment of intangible assets $ — $ 8,000 $ (8,000) (100) %

Percentage of revenues — % 29.5 %

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

During the third 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 $8.0 million in the third quarter of 2020.

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

Impairment of Goodwill

Three Months Ended September 30, Decrease Percent

(in thousands, except percentages)

Impairment of goodwill $ — $ 22,607 $ (22,607) (100) %

Percentage of revenues — % 83.3 %

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

As a result of the analysis, the Company recorded an impairment charge of $22.6 million in the third quarter of 2020.

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

Impairment of Right-of-Use Asset

Three Months Ended September 30, Increase Percent

(in thousands, except percentages)

Impairment of right-of-use asset $ 1,919 $ — $ 1,919 — %

Percentage of revenues 6.2 % — %

During the three months ended September 30, 2021, due to the continuing impacts of COVID-19 on the real estate markets and its impact on the future cash flows attributable to its ROU assets, the Company performed an impairment analysis of a sublease within its ROU assets.

As a result, the Company recorded an impairment charge of $1.9 million during the quarter.

Operating Loss

Three Months Ended September 30, Increase Percent

Depreciation expense increased $0.3 million or 9% from the same period in 2021 in connection with increasing capitalized development costs throughout 2021 and projects being placed into service driving higher depreciation in 2022.

Operating Income (Loss)

Three Months Ended March 31, Increase Percent

(in thousands, except percentages)

Revenue $ 34,334 $ 26,676 $ 7,658 29 %

Operating loss (2,215) (28,478) 26,263 (92) %

Percentage of revenues (7.2) % (104.9) %

Operating loss for the three months ended September 30, 2021 was $2.2 million, a negative margin of 7.2%, compared to operating loss of $28.5 million, a negative margin of 104.9%, for the same period in 2020, an improvement of $26.3 million.

The decrease in operating loss and improved percentage margin was primarily driven by the non-cash impairments of goodwill and intangible assets of $30.6 million in the third quarter of 2020, partially offset by increased investments in sales and marketing, higher depreciation, and the ROU asset impairment of $1.9 million in the third quarter of 2021.

Interest Expense and Other

Three Months Ended September 30, Decrease Percent

(in thousands, except percentages)

Interest expense and other $ 150 $ 273 $ (123) (45) %

Percentage of revenues 0.5 % 1.0 %

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

Loss on Investments

Three Months Ended September 30, Decrease Percent

(in thousands, except percentages)

Loss on investments $ (641) $ — $ (641) — %

Percentage of revenues (2.1) % — %

The loss on investments 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.

The Company sold 100% of this investment during the third quarter of 2021.

See also Note 7 of the Notes to the Condensed Consolidated Financial Statements.

Three Months Ended September 30,

(in thousands, except

Loss before income taxes $ (3,006) $ (28,751)

Income tax benefit (572) (1,758)

Effective tax rate 19.0 % 6.1 %

Our effective tax rate for the three months ended September 30, 2021, differed from the U.S.

statutory rate due to tax expense of $0.1 million related to a valuation allowance on our capital loss carryforward.

The tax rate for the three months ended September 30, 2020, differed from the statutory rate due to tax expense of $5.5 million from nondeductible impairment charges.

Loss from discontinued operations, net of tax

Three Months Ended September 30, Increase Percent

(in thousands, except percentages)

Loss from discontinued operations, net of tax $ — $ (329) $ 329 (100) %

Percentage of revenues — % (1.2) %

The Company transferred majority ownership of its eFC business on June 30, 2021 to eFC management and has recorded it as a discontinued operation.

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

Earnings (loss) per Share

Three Months Ended September 30,

(in thousands, except

per share amounts)

Loss from continuing operations $ (2,434) $ (26,993)

Loss from discontinued operations, net of tax — (329)

Net Loss $ (2,434) $ (27,322)

Weighted-average shares outstanding - diluted $ 45,807 $ 47,955

Diluted loss per share - continuing operations $ (0.05) $ (0.56)

Diluted loss per share - discontinued operations $ — $ (0.01)

Diluted loss per share $ (0.05) $ (0.57)

Diluted loss per share from continuing operations and diluted loss per share were $0.05 and $0.56 for the three months ended September 30, 2021 and 2020, respectively.

The decrease was driven by the impairment of the ROU asset.

The increase in loss per share was primarily driven by the the impairments of goodwill and intangible assets of $30.6 million in the third quarter of 2020, partially offset by increased investments in sales and marketing, depreciation, and the ROU asset impairment of $1.9 million in the third quarter of 2021.

Nine Months Ended September 30, 2021 Compared to the Nine Months Ended September 30, 2020

Nine Months Ended September 30, Increase (Decrease) Percent

(in thousands, except percentages)

$ 61,906 $ 62,797 $ (891) (1) %

ClearanceJobs 24,249 21,333 2,916 14 %

Total revenues $ 86,155 $ 84,130 $ 2,025 2 %

(1) Includes Dice U.S.

and Career Events

We experienced an increase in revenue of $2.0 million, or 2%.

Revenue at Dice decreased by $0.9 million, or 1%, 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 $2.9 million, or 14%, 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

Nine Months Ended September 30, Increase Percent

(in thousands, except percentages)

Cost of revenues $ 11,086 $ 10,532 $ 555 5 %

Percentage of revenues 12.9 % 12.5 %

Cost of revenues increased $0.6 million, or 5%, primarily driven by an increase of $0.5 million from higher costs associated with web hosting and cloud computing amortization.

Product Development Expenses

Nine Months Ended September 30, Increase Percent

(in thousands, except percentages)

Product development $ 11,168 $ 10,839 $ 329 3 %

Percentage of revenues 13.0 % 12.9 %

Product Development increased $0.3 million, or 3% from the same period in 2020.

Within product development, the Company experienced a $0.9 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

Nine Months Ended September 30, Increase Percent

(in thousands, except percentages)

Sales and marketing $ 31,214 $ 30,177 $ 1,037 3 %

Percentage of revenues 36.2 % 35.9 %

Sales and marketing expenses increased $1.0 million, or 3% from the same period in 2020.

The increase was primarily driven by a $1.2 million increase in compensation related costs due to increased headcount and higher quota attainment versus sales plan, which was offset by a $0.3 million decrease in operational costs, including travel, entertainment, and consulting.

General and Administrative Expenses

Nine Months Ended September 30, Increase Percent

(in thousands, except percentages)

General and administrative $ 20,649 $ 20,438 $ 211 1 %

Percentage of revenues 24.0 % 24.3 %

General and administrative costs increased $0.2 million, or 1%, from the same period in 2020.

The increase was primarily driven by stock based compensation, which increased approximately $1.1 million compared to the prior year due to higher achievement against targets for the Company's PSUs.

Compensation related costs increased $0.3 million, which was driven by higher bonus costs as the Company has exceeded bonus targets and a change in the Company's vacation policy that was implemented during the current quarter.

These increases were partially offset by a decrease in operational costs, including bad debt expense, legal fees, and professional fees totaling $1.2 million.

Nine Months Ended September 30, Increase Percent

(in thousands, except percentages)

Depreciation $ 12,030 $ 7,730 $ 4,300 56 %

Percentage of revenues 14.0 % 9.2 %

Depreciation expense increased $4.3 million, or 56%, 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

Nine Months Ended September 30, Decrease Percent

(in thousands, except percentages)

Impairment of intangible assets $ — $ 15,200 $ (15,200) (100) %

Percentage of revenues — % 18.1 %

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, 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 $15.2 million during the nine months ended September 30, 2020.

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

Impairment of Goodwill

Nine Months Ended September 30, Decrease Percent

(in thousands, except percentages)

Impairment of goodwill $ — $ 22,607 $ (22,607) (100) %

Percentage of revenues — % 26.9 %

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

As a result of the analysis, the Company recorded an impairment charge of $22.6 million in the third quarter of 2020.

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

Impairment of Right-of-Use Asset

Nine Months Ended September 30, Increase Percent

(in thousands, except percentages)

Impairment of right-of-use asset $ 1,919 $ — $ 1,919 — %

Operating income (loss) 628 (184) 812 (441) %

Percentage of revenues 1.8 % (0.7) %

During the third quarter of 2021, due to the continuing impacts of COVID-19 on the real estate markets and its impact on the future cash flows attributable to its ROU assets, the Company performed an impairment analysis of a sublease within its ROU assets.

As a result, the Company recorded an impairment charge of $1.9 million during the quarter.

Operating Loss

Nine Months Ended September 30, Increase Percent

Operating income for the three months ended March, 31, 2022 was $0.6 million, a positive margin of 1.8%, compared to operating loss of $0.2 million, a negative margin of 0.7%, for the same period in 2021, an improvement of $0.8 million.

The increase in operating income and improved percentage margin was driven by higher revenues, partially offset by higher operating costs as the Company invests in its product and sales and marketing for future growth.

Income from Equity Method Investment

Three Months Ended March 31, Increase Percent

(in thousands, except percentages)

Revenue $ 86,155 $ 84,130 $ 2,025 2 %

Operating loss (1,911) (33,393) 31,482 (94) %

Income from equity method investment $ 155 $ — $ 155 n/a

Percentage of revenues 0.5 % — %

Operating loss for the nine months ended September 30, 2021 was $1.9 million, a negative margin of 2.2%, compared to an operating loss of $33.4 million, a negative margin of 39.7% for the same period during 2020.

The decrease in operating loss and improved percentage margin was primarily driven by non-cash impairments of goodwill and intangible assets of $37.8 million during the 2020 period, partially offset by increased investments in sales and marketing, higher depreciation, and the ROU asset impairment of $1.9 million in the third quarter of 2021.

During the three months ended March 31, 2022, the Company recorded $0.2 million of income related to its proportionate share of eFC's net income.

Interest Expense and Other

Nine Months Ended September 30, Decrease Percent

Three Months Ended March 31, Increase Percent

(in thousands, except percentages)

1 unchanged sentence

Percentage of revenues 0.7 % 0.7 %

Interest expense and other decreased $0.2 million, or 31%, compared to the same period in 2020 due to lower debt outstanding.

Impairment of Equity Investment

Nine Months Ended September 30, Increase Percent Change

(in thousands, except percentages)

Impairment of equity investment $ — $ (2,002) $ 2,002 (100) %

Percentage of revenues 0.0 % (2.4) %

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.

Gain on Investments

Nine Months Ended September 30, Increase Percent

Interest expense and other was approximately flat to the same period in 2021.

Gain on Investment

Three Months Ended March 31, Decrease Percent

(in thousands, except percentages)

Gain on investments $ 1,198 $ — $ 1,198 — %

Gain on investment $ — $ 2,513 $ (2,513) (100) %

Percentage of revenues — % 9.4 %

The gain on equity investments 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.

The Company sold 100% of this investment during the third quarter of 2021.

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.

See also Note 7 of the Notes to the condensed consolidated financial statements.

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands, except

Loss before income taxes $ (1,145) $ (36,017)

Income tax benefit (511) (2,651)

Income before income taxes $ 538 $ 2,134

Income tax expense (benefit) (763) 122

Effective tax rate (141.8) % 5.7 %

Our effective tax rate for the nine months ended September 30, 2021, differed from the U.S.

statutory rate due to a tax benefit of $0.3 million related to a valuation allowance on our capital loss carryforward.

The tax rate for the nine months ended September 30, 2020, differed from the statutory rate due to tax expense of $5.5 million from nondeductible impairment charges.

Income (loss) from discontinued operations, net of tax

Nine Months Ended September 30, Decrease Percent

Our effective tax rate for the three months ended March 31, 2022, differed from the U.S.

statutory rate due to a $0.8 million tax benefit from the vesting or settlement of share-based compensation awards.

The tax rate for the three months ended March 31, 2021, differed from the statutory rate because of a $0.5 million tax benefit from the release of a valuation allowance on our capital loss carryforward.

Income from discontinued operations, net of tax

Three Months Ended March 31, Decrease Percent

(in thousands, except percentages)

Income (loss) from discontinued operations, net of tax $ (29,340) $ 1,356 $ (30,696) (2,264) %

Income from discontinued operations, net of tax $ — $ 659 $ (659) (100) %

Percentage of revenues — % 2.5 %

During the nine months ended September 30, 2021, the Company transferred majority ownership of its eFC business to eFC management 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 nine months ended September 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 nine months ended September 30, 2021.

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

Earnings (loss) per Share

Nine Months Ended September 30,

The Company transferred majority ownership of its eFC business on June 30, 2021 to eFC management and has recorded it as a discontinued operation.

Income from discontinued operations for the three months ended March 31, 2021 represents eFC's earnings during the period.

Earnings per Share

Three Months Ended March 31,

(in thousands, except

per share amounts)

Loss from continuing operations $ (634) $ (33,366)

Income (loss) from discontinued operations, net of tax $ (29,340) $ 1,356

Net loss $ (29,974) $ (32,010)

Income from continuing operations $ 1,301 $ 2,012

Income from discontinued operations, net of tax — 659

Net income $ 1,301 $ 2,671

Weighted-average shares outstanding - diluted $ 47,170 $ 48,606

Diluted loss per share - continuing operations $ (0.01) $ (0.69)

Diluted earnings (loss) per share - discontinued operations $ (0.63) $ 0.03

Diluted loss per share $ (0.64) $ (0.66)

Diluted loss per share from continuing operations was $(0.01) and $(0.69) for the nine months ended September 30, 2021 and 2020, respectively.

The decreased loss per share was driven by the impairment charges in the 2020 period and the gain in investment in the 2021 period, partially offset by the ROU asset impairment and higher depreciation expense in the 2021 period.

Diluted loss per share was $(0.64) and $(0.66) for the nine months ended September 30, 2021 and 2020, respectively.

Current year to date loss per share is primarily driven by the loss on discontinued operations.

The prior year loss per share is primarily driven by the impairment charges.

Diluted earnings per share - continuing operations $ 0.03 $ 0.04

Diluted earnings per share - discontinued operations $ — $ 0.01

Diluted earnings per share $ 0.03 $ 0.05

Diluted earnings per share from continuing operations were $0.03 and $0.04 and diluted earnings per share were $0.03 and $0.05 for the three months ended March 31, 2022 and 2021, respectively.

The decreases were driven by the unrealized gain on equity securities in 2021.

Liquidity and Capital Resources

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Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP metrics used by management to measure operating performance.

Management uses Adjusted EBITDA as a performance measure for internal monitoring and planning, including

preparation of annual budgets, analyzing investment decisions and evaluating profitability and performance comparisons between us and our competitors.

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.

We present Adjusted EBITDA as a supplemental performance measure because we believe that this measure provides our Board, management and investors with additional information to measure our performance, provide comparisons from period to period and company to company by excluding potential differences caused by variations in capital structures (affecting interest expense) and tax positions (such as the impact on periods or companies of changes in effective tax rates or net operating losses), and to estimate our value.

We understand that although Adjusted EBITDA is frequently used by securities analysts, lenders and others in their evaluation of companies, Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our liquidity or results as reported under GAAP.

Management uses Adjusted EBITDA and Adjusted EBITDA Margin as performance measures for internal monitoring and planning, including preparation of annual budgets, analyzing investment decisions and evaluating profitability and performance comparisons between us and our competitors.

The Company also uses these measures 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 write-offs 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, losses from equity method investments, 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, including income from equity method investments, 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.

Adjusted EBITDA Margin is computed as Adjusted EBITDA divided by Revenues.

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

We present Adjusted EBITDA and Adjusted EBITDA Margin as supplemental performance measures because we believe that these measures provide our Board, management and investors with additional information to measure our performance, provide comparisons from period to period by excluding potential differences caused by variations in capital structures (affecting interest expense) and tax positions (such as the impact on periods or companies of changes in effective tax rates or net operating losses), and to estimate our value.

We understand that although Adjusted EBITDA and Adjusted EBITDA Margin are frequently used by securities analysts, lenders and others in their evaluation of companies, Adjusted EBITDA and Adjusted EBITDA Margin have limitations as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of our liquidity or results as reported under GAAP.

Some limitations are:

• Adjusted EBITDA does not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments;

• Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

• Adjusted EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments on our debt;

• Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized often will have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements;

• Other companies in our industry may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.

• Adjusted EBITDA and Adjusted EBITDA Margin do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments;

• Adjusted EBITDA and Adjusted EBITDA Margin do not reflect changes in, or cash requirements for, our working capital needs;

• Adjusted EBITDA and Adjusted EBITDA Margin do not reflect interest expense, or the cash requirements necessary to service interest or principal payments on our debt;

• Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized often will have to be replaced in the future, and Adjusted EBITDA and Adjusted EBITDA Margin do not reflect any cash requirements for such replacements;

• Other companies in our industry may calculate Adjusted EBITDA and Adjusted EBITDA Margin differently than we do, limiting their usefulness as comparative measures.

To compensate for these limitations, management evaluates our liquidity by considering the economic effect of excluded expense items independently, as well as in connection with its analysis of cash flows from operations and through the use of other financial measures, such as capital expenditure budget variances, investment spending levels and return on capital analysis.

Adjusted EBITDA Margin is computed as Adjusted EBITDA divided by Revenues.

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 nine months ended September 30, 2021 and 2020 follows (in thousands):

Nine Months Ended September 30,

Reconciliation of Net Income (loss) to Adjusted EBITDA:

Net loss $ (29,974) $ (32,010)

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, net income margin, 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, 2022 and 2021 follows (in thousands):

Three Months Ended March 31,

Reconciliation of Net Income to Adjusted EBITDA:

Net income $ 1,301 $ 2,671

Interest expense 245 188

Income tax benefit (511) (2,651)

Income tax expense (benefit) (763) 122

Depreciation 3,958 3,631

Non-cash stock-based compensation 2,235 1,604

Impairment of intangible assets — 15,200

Impairment of goodwill — 22,607

Impairment of investment — 2,002

Impairment of right-of-use asset 1,919 —

Income from equity method investment (155) —

Gain on investment — (2,513)

Severance and related costs 109 562

Loss (income) from discontinued operations, net of tax 29,340 (1,356)

Income from discontinued operations, net of tax — (659)

Adjusted EBITDA $ 6,930 $ 5,611

Reconciliation of Operating Cash Flows to Adjusted EBITDA:

Reconciliation of cash provided by operating activities to Adjusted EBITDA

Net cash provided by operating activities $ 9,218 $ 6,424

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Amortization of deferred financing costs (37) (37)

Income tax benefit (511) (2,651)

Income tax expense (benefit) (763) 122

Deferred income taxes 1,823 304

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Adjusted EBITDA $ 6,930 $ 5,611

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

Nine Months Ended September 30,

Net Income Margin and Adjusted EBITDA Margin for the three months ended March 31, 2022 and 2021 follows (in thousands):

Three Months Ended March 31,

Revenues $ 34,334 $ 26,676

Net Income $ 1,301 $ 2,671

Net Income Margin (1)

Adjusted EBITDA $ 6,930 $ 5,611

Adjusted EBITDA Margin (1)

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

Nine Months Ended September 30,

(1) Net income margin and Adjusted EBITDA margin are calculated by dividing the respective measure by that period's revenues.

We have summarized our cash flows for the three months ended March 31, 2022 and 2021 (in thousands).

Three Months Ended March 31,

Cash from operating activities $ 9,218 $ 6,424

Cash used in investing activities $ (4,091) $ (3,703)

Cash from (used in) financing activities $ (14,327) $ 19,328

Cash used in financing activities $ (1,701) $ (3,012)

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

At September 30, 2021, we had cash of $3.5 million compared to $4.5 million at December 31, 2020.

At March 31, 2022, we had cash of $5.0 million compared to $1.5 million at December 31, 2021.

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 $72.0 million in borrowing capacity under our $90.0 million Credit Agreement at September 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.

In addition, we had $57.0 million in borrowing capacity under our $90.0 million Credit Agreement at March 31, 2022, 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 potential ongoing impact of the COVID-19 pandemic.

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.

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.

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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, gain on investments, loss from sale of business, loss on disposition of discontinued operations, and the effect of changes in working capital.

Net cash flows from operating activities were $25.6 million and $14.4 million for nine month periods ended September 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 collections from our customers.

Net cash flows from operating activities were $9.2 million and $6.4 million for the three-month periods ended March 31, 2022 and 2021, respectively.

Cash inflow from operations is driven by earnings and is dependent on the amount and timing of payments to vendors and employees and billings to and cash collections from our customers.

Cash provided by operating activities during the 2022 period increased $2.8 million compared to the same period of 2021 primarily due to strong billings to and collections from customers.

Investing Activities

Cash used in investing activities during the nine month period ended September 30, 2021 was $15.5 million compared to $12.3 million used in the same period of 2020.

Cash used in investing activities in the nine month period ended September 30, 2021 increased from the comparable 2020 period due to cash retained in the eFC business and cash paid for investment, partially offset by lower internal development costs, primarily driven by lower headcount and development activities dedicated to the transfer of the eFC business, and higher proceeds from sale of investments.

Cash used in investing activities during the three-month period ended March 31, 2022 was $4.1 million compared to $3.7 million used in the same period of 2021.

Cash used in investing activities in the three-month period ended March 31, 2022 increased from the comparable 2021 period due to higher internal development costs, primarily driven by higher product development headcount.

Financing Activities

Cash used in financing activities during the nine month period ended September 30, 2021 was $14.3 million and was driven by $2.0 million of net repayments on long-term debt and $12.3 million related to share repurchases.

Cash from financing activities during the nine month period ended September 30, 2020 was $19.3 million, primarily due to $27.0 million of net proceeds on long-term debt, partially offset by $7.7 million related to share repurchases.

Cash used in financing activities during the three-month period ended March 31, 2022 was $1.7 million and was driven by $10.0 million of net proceeds on long-term debt and $11.7 million related to share repurchases.

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

Financing and Capital Requirements

Credit Agreement

In November 2018, the Company, together with Dice, Inc.

(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 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, removed the option to borrow in Euros and Sterling, and incorporated certain form updates.

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.

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

The Company incurs a commitment fee ranging from 0.30% to 0.45% on any unused capacity under the revolving loan facility, determined by the Company’s most recent consolidated leverage ratio.

The facility may be prepaid at any time without penalty.

We have a $90 million revolving credit facility, which matures November 2023, with $ 33.0 million of borrowings on the facility at March 31, 2022, leaving $ 57.0 million available for future borrowings.

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

Assuming an int eres t rate of 2.25 % (the rate in effect on March 31, 2022) on our current borrowings, interest payments are expected to be $0.6 and $0.8 million in 2022 and 2023, respectively.

The Credit Agreement contains various customary affirmative and negative covenants and also contains certain financial covenants, including a consolidated leverage ratio and a consolidated interest coverage ratio.

Borrowings are allowed under the Credit Agreement to the extent the consolidated leverage ratio, calculated on a pro forma basis, is equal to or less than 2.50 to 1.00.

Negative covenants include restrictions on incurring certain liens;

making certain payments, such as stock repurchases and dividend payments;

making certain investments;

making certain acquisitions;

and incurring additional indebtedness.

Restricted payments are allowed under the Credit Agreement to the extent the consolidated leverage ratio, calculated on a pro forma basis, is equal to or less than 2.00 to 1.00, plus an additional $5.0 million of restricted payments.

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 September 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 one of the Company's U.S.

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

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Commitments and Contingencies

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

Payments Due By Period

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

(in thousands)

Credit Agreement $ 18,000 $ — $ 18,000 $ — $ —

Operating lease obligations 10,553 492 5,076 3,911 1,074

Total contractual obligations $ 28,553 $ 492 $ 23,076 $ 3,911 $ 1,074

As of March 31, 2022, 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 and Item 3.

"Quantitative and Qualitative Disclosures about Market Risk - Interest Rate Risk."

Contractual Obligations

The Company has operating leases for corporate office space and certain equipment.

The leases have terms from one year to eight years, some of which include options to renew the lease, and are included in the lease term when it is reasonably certain that the Company will exercise the option.

No leases include options to purchase the leased property.

As of March 31, 2022, the value of our obligations under operating leases was $6.4 million.

See note 6 to the condensed consolidated financial statements for further information.

We make commitments to purchase advertising from online vendors, which we pay for on a monthly basis.

We have no significant long-term obligations to purchase a fixed or minimum amount with these vendors.

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

As of September 30, 2021, we had $18.0 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.

See Note 10 “Indebtedness” in our Condensed Consolidated Financial Statements for additional information related to our Credit Agreement.

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 September 30, 2021) on our current borrowings, interest payments are expected to be approximately $0.1 million for the remainder of 2021, approximately $0.3 million for 2022, and approximately $0.3 million for 2023.

As of September 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.

Other Capital Requirements

As of March 31, 2022, we recorded approximately $0.9 million of unrecognized tax benefits as liabilities, and we are 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 September 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.

Included in the balance of unrecognized tax benefits at March 31, 2022 are $0.9 million of tax benefits that would affect the effective tax rate if recognized.

The Company believes it is reasonably possible that as much as $0.2 million of its unrecognized tax benefits may be recognized in the next 12 months.

The Company's Board of Directors previously approved a stock repurchase program that permits the Company to repurchase its common stock.

As of March 31, 2022, the value of shares available to be purchased under the current plan was $ 13.1 million.

Management has discretion in determining the conditions under which shares may be purchased from time to time.

See note 12 of the notes to the condensed consolidated financial statements for further information.

We anticipate capital expenditures in 2022 to be approximately $20 million.

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.

Impact of COVID-19 on our Business

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COVID-19 slowed recruitment activity for our businesses during 2020 as employers slowed hiring, which reduced our revenues and operating cash flows during 2020 and into the beginning of 2021.

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.

The pandemic may 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.

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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.

While the pandemic may 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.

The labor market and certain of the industries that we serve have historically experienced short-term cyclicality.

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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