What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-11-02 compared with 2022-08-03 · 165 added, 145 removed, 294 unchanged (51% of the section changed)

4 unchanged sentences

You should not place undue reliance on those statements because they are subject to numerous uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control.

Forward-looking statements include, without limitation, information concerning our possible or assumed future results of operations.

Forward-looking statements include, without limitation,

information concerning our possible or assumed future results of operations.

These statements often include words such as “may,” “will,” “should,” “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate” or similar expressions.

22 unchanged sentences

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.

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

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.

7 unchanged sentences

The tables below detail this customer data.

As of June 30, Increase (Decrease) Percent

As of September 30, Increase Percent

Recruitment Package Customers:

2 unchanged sentences

Average Annual Revenue per Recruitment Package Customer (1)

Three months ended June 30, Six months ended June 30,

2022 2021 Increase (Decrease) Percent

Change 2022 2021 Increase (Decrease) Percent

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

2022 2021 Increase Percent

Change 2022 2021 Increase Percent

Dice $ 14,868 $ 13,656 $ 1,212 9 % $14,436 $13,560 $876 6%

2 unchanged sentences

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

Dice had 6,386 recruitment package customers as of June 30, 2022, which was an increase of 945, or 17%, year over year and average annual revenue per recruitment package customer for Dice increased $816, or 6%, year over year.

Dice had 6,409 recruitment package customers as of September 30, 2022, which was an increase of 639, or 11%, and average annual revenue per recruitment package customer for Dice increased $1,212, or 9%, from the prior year quarter.

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

ClearanceJobs had 1,976 recruitment package customers as of June 30, 2022 compared to 1,784 as of June 30, 2021, an increase of 11%, and average annual revenue per recruitment package customer increased $1,980, or 12%, year over year.

ClearanceJobs had 2,030 recruitment package customers as of September 30, 2022 compared to 1,816 as of September 30, 2021, an increase of 12%, and average annual revenue per recruitment package customer increased $2,256, or 13%, from the prior year quarter.

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.

4 unchanged sentences

Comparison to Prior Year End Comparison Year Over Year

6/30/2022 12/31/2021 Increase (Decrease) Percent Change 6/30/2021 Increase (Decrease) Percent Change

9/30/2022 12/31/2021 Increase Percent Change 9/30/2021 Increase Percent Change

Deferred Revenue $ 52,252 $ 46,146 $ 6,106 13 % $ 43,403 $ 8,849 20 %

2 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 June 30, 2022 increased $11.5 million and $29.0 million from December 31, 2021 and June 30, 2021, respectively.

The increase in backlog compared to December 31, 2021 and June 30, 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.

Backlog at September 30, 2022 increased $10.2 million and $22.9 million from December 31, 2021 and September 30, 2021, respectively.

The increase in backlog compared to December 31, 2021 and September 30, 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.

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.

5 unchanged sentences

Product Releases

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

Multi-Factor Authentication, ClearanceJobs Live Video ClearanceJobs Meetings, ClearanceJobs Video, Team Recruiting, Shared Talent Pipelines, Quality of Use Improvements

Dice New Job Apply Flow, Dice TalentSearch Time Zone Search, Dice TalentSearch Auto Talent Alerts, Dice iOS App Messaging Dice Marketplace, Dice TalentSearch Social Data Refresh, Brand.io, TalentSearch Personalization, Unbiased Sourcing Mode

ClearanceJobs Multi-Factor Authentication, ClearanceJobs Live Video, ClearanceJobs Scheduled Broadcast Messages 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.

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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 June 30, 2022 Compared to the Three Months Ended June 30, 2021

Three Months Ended June 30, Increase (Decrease) Percent

Three Months Ended September 30, 2022 Compared to the Three Months Ended September 30, 2021

Three Months Ended September 30, Increase Percent

(in thousands, except percentages)

3 unchanged sentences

(1) Includes Dice and Career Events

For the three months ended June 30, 2022 we experienced an increase in revenue of $8.3 million, or 29%.

For the three months ended September 30, 2022 we experienced an increase in revenue of $7.8 million, or 25%.

Revenue at Dice increased $5.1 million, or 23%, 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.

1 unchanged sentence

Cost of Revenues

Three Months Ended June 30, Increase Percent

Three Months Ended September 30, Increase Percent

(in thousands, except percentages)

4 unchanged sentences

Product Development Expenses

Three Months Ended June 30, Increase Percent

Three Months Ended September 30, Increase Percent

(in thousands, except percentages)

1 unchanged sentence

Percentage of revenues 12.1 % 13.2 %

Product development expenses increased $0.9 million, or 24%, driven by an increase of $1.9 million from higher compensation related costs partially offset by an increase in capitalized labor of $1.1 million, which decreases operating expenses.

Product development expenses increased $0.6 million, or 15%, driven by an increase of $1.7 million from higher compensation related costs, primarily from higher headcount, partially offset by an increase in capitalized labor of $1.3 million, which decreases operating expenses.

Operational costs, including consulting and education/training costs, increased by $0.2 million.

Sales and Marketing Expenses

Three Months Ended June 30, Increase Percent

Three Months Ended September 30, Increase Percent

(in thousands, except percentages)

2 unchanged sentences

Sales and marketing expenses increased $3.7 million, or 33% from the same period in 2021.

This increase was driven by a $2.5 million increase in compensation related costs from higher headcount and quota attainment versus sales plan, $1.3 million increase in discretionary marketing expenses with strong customer recruitment activity, and a $0.3 million increase in operational costs, including travel and entertainment and company events as COVID-19 restrictions have eased.

This increase was driven by a $2.2 million increase in compensation related costs from higher headcount and quota attainment versus sales plan, $1.3 million increase in discretionary marketing expenses supporting the growth in the sales team, and a $0.2 million increase in operational costs, including travel and entertainment and company events.

General and Administrative Expenses

Three Months Ended June 30, Increase Percent

Three Months Ended September 30, Increase Percent

(in thousands, except percentages)

4 unchanged sentences

The increase in compensation expense is primarily due to higher achievement against targets for the Company's bonus and PSU plans.

Operational costs, including professional fees, bad debt, travel, and training increased $0.7 million.

Three Months Ended June 30, Increase Percent

Operational costs increased $0.4 million primarily due to a higher provision for bad debt in the third quarter of 2022 to align with the Company's growth, combined with a provision reduction in the third quarter of 2021 as collection risks related to the COVID-19 pandemic declined.

Three Months Ended September 30, Increase Percent

(in thousands, except percentages)

1 unchanged sentence

Percentage of revenues 11.4 % 14.2 %

Depreciation expense increased $0.2 million or 5% 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.

Depreciation expense was flat from the same period in 2021.

While the Company continues to increase its capitalized development costs, increases to depreciation expense may lag due to the timing of placing the related assets into service.

Impairment of Right-of-Use Asset

Three Months Ended September 30, Decrease Percent

(in thousands, except percentages)

Impairment of Right-of-Use Asset $ — $ 1,919 $ (1,919) (100) %

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 Income

Three Months Ended June 30, Increase Percent

Three Months Ended September 30, Increase Percent

(in thousands, except percentages)

Revenue $ 38,527 $ 30,758 $ 7,769 25 %

Operating income 905 488 417 85 %

Operating income (loss) 1,218 (2,215) 3,433 (155) %

Operating margin 3.2 % (7.2) %

Operating income for the three months ended June 30, 2022 was $0.9 million, a margin of 2.4%, compared to operating income of $0.5 million, a margin of 1.7%, for the same period in 2021, an improvement of $0.4 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.

Operating income for the three months ended September 30, 2022 was $1.2 million, a positive margin of 3.2%, compared to operating loss of $2.2 million, a negative margin of 7.2%, for the same period in 2021, an improvement of $3.4 million.

The increase in operating income and improved percentage margin was driven by higher revenues in the current period and the ROU asset impairment in the prior year period, 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 June 30, Increase Percent

Three Months Ended September 30, Increase Percent

(in thousands, except percentages)

1 unchanged sentence

Percentage of revenues 1.5 % — %

During the three months ended June 30, 2022, the Company recorded $0.4 million of income related to its proportionate share of eFC's net income.

Gain (Loss) on Investment

Three Months Ended June 30, Increase Percent

During the three months ended September 30, 2022, the Company recorded $0.6 million of income related to its proportionate share of eFC's net income.

The Company records its proportionate share of eFC's net income three months in arrears.

Accordingly, there was no income from the Company's proportionate share of eFC's net income for the three months ended September 30, 2021 as the investment was acquired June 30, 2021.

Loss on Investment

Three Months Ended September 30, Increase Percent

(in thousands, except percentages)

Gain (loss) on investment $ 320 $ (674) $ 994 (147) %

Loss on investment $ — $ (641) $ 641 (100) %

Percentage of revenues — % (2.1) %

During the three months ended June 30, 2022, the Company recognized a $0.3 million gain from the sale of its 40% common share interest in Rigzone.

During the three months ended June 30, 2021, the Company recognized a $0.7 million loss on 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 for its initial public offering.

During the three months ended September 30, 2021, the Company recognized a $0.6 million loss 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 for its 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.

Impairment of Investment

Three Months Ended September 30, Decrease Percent

(in thousands, except percentages)

Impairment of investment $ (2,300) $ — $ (2,300) n/a

Percentage of revenues (6.0) % — %

During the three months ended September 30, 2022, the Company recognized a $2.3 million loss related to an impairment of a subordinated convertible promissory note as further described in Note 7 of the Notes to the condensed consolidated financial statements.

Interest Expense and Other

Three Months Ended June 30, Increase Percent

Three Months Ended September 30, Increase Percent

(in thousands, except percentages)

1 unchanged sentence

Percentage of revenues 1.2 % 0.5 %

Interest expense and other increased from the same period in 2021, primarily due to higher debt outstanding on the revolving credit facility during the current period.

Three Months Ended June 30,

Interest expense and other increased from the same period in 2021, primarily due to higher debt outstanding on the revolving credit facility during the current period and higher interest rates.

Three Months Ended September 30,

(in thousands, except

Income (loss) before income taxes $ 1,288 $ (273)

Loss before income taxes $ (938) $ (3,006)

Income tax benefit (12) (572)

Effective tax rate 1.3 % 19.0 %

Our effective tax rate for the three months ended June 30, 2022, differed from the U.S.

statutory rate due to tax benefits of $0.2 million from the vesting of share-based compensation awards, $0.1 million from research tax credits, and $0.1 million from the release of a valuation allowance on our capital loss carryforward.

The tax rate for the three months ended June 30, 2021, differed from the statutory rate due to state income taxes.

Income (loss) from discontinued operations, net of tax

Three Months Ended June 30, Increase Percent

(in thousands, except percentages)

Income (loss) from discontinued operations, net of tax $ — $ (29,999) $ 29,999 (100) %

Percentage of revenues — % (104.4) %

The Company transferred majority ownership of its eFC business on June 30, 2021 to eFC management and 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.

Our effective tax rate for the three months ended September 30, 2022, differed from the U.S.

statutory rate due to tax benefits of $0.1 million each from the vesting of share-based compensation awards and research tax credits and due to tax expense of $0.5 million from a valuation allowance related to the impairment of an investment.

The tax rate for the three months ended September 30, 2021, differed from the statutory rate due to tax expense of $0.1 million from a valuation allowance on our capital loss carryforward.

Earnings (Loss) per Share

Three Months Ended June 30,

Three Months Ended September 30,

(in thousands, except

per share amounts)

Income (loss) from continuing operations $ 1,450 $ (212)

Loss from discontinued operations, net of tax — (29,999)

Net income (loss) $ 1,450 $ (30,211)

Net loss $ (926) $ (2,434)

Weighted-average shares outstanding - basic 44,190 45,807

Weighted-average shares outstanding - diluted 44,190 45,807

Diluted earnings per share - continuing operations $ 0.03 $ —

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

Diluted earnings (loss) per share $ 0.03 $ (0.64)

Diluted earnings per share from continuing operations were $0.03 and $0.00 for the three months ended June 30, 2022 and 2021, respectively.

The increase is driven by an increase in operating income and the gain on sale of investment in the current period.

Diluted earnings (loss) per share were $0.03 and $(0.64) for the three months ended June 30, 2022 and 2021, respectively.

The prior year loss per share was driven by the loss from discontinued operations, which did not occur in the second quarter of 2022.

Six Months Ended June 30, 2022 Compared to the Six Months Ended June 30, 2021

Six Months Ended June 30, Increase (Decrease) Percent

Diluted loss per share $ (0.02) $ (0.05)

Diluted loss per share was $0.02 and $0.05 for the three months ended September 30, 2022 and 2021, respectively.

The loss for the three months ended September 30, 2022 was driven by the impairment of investment while the loss for the three months ended September 30, 2021 was driven by an ROU asset impairment.

Nine Months Ended September 30, 2022 Compared to the Nine Months Ended September 30, 2021

Nine Months Ended September 30, Increase Percent

(in thousands, except percentages)

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Cost of Revenues

Six Months Ended June 30, Increase Percent

Nine Months Ended September 30, Increase Percent

(in thousands, except percentages)

2 unchanged sentences

Cost of revenues increased $1.8 million, or 16%, driven by an increase of $1.5 million from higher compensation related costs, primarily from higher headcount.

Operational costs, including the amortization of cloud computing costs, increased by $0.2 million.

Operational costs, including consulting costs, increased by $0.2 million.

Product Development Expenses

Six Months Ended June 30, Increase Percent

Nine Months Ended September 30, Increase Percent

(in thousands, except percentages)

1 unchanged sentence

Percentage of revenues 11.8 % 13.0 %

Product Development increased $1.2 million, or 17%, driven by an increase of $2.8 million from higher compensation related costs, partially offset by an increase in capitalized labor of $1.7 million, which decreases operating expenses.

Product development increased $1.8 million, or 16%, driven by an increase of $4.5 million from higher compensation related costs, primarily due to higher headcount, partially offset by an increase in capitalized labor of $3.0 million, which decreases operating expenses.

Additionally, operational costs, including consulting and education/training costs, increased by $0.3 million.

Sales and Marketing Expenses

Six Months Ended June 30, Increase Percent

Nine Months Ended September 30, Increase Percent

(in thousands, except percentages)

2 unchanged sentences

Sales and marketing expenses increased $12.0 million, or 38% from the same period in 2021.

The increase was driven by a $4.8 million increase in compensation related costs from higher headcount and quota attainment versus sales plan, $2.8 million increase in discretionary marketing expenses with strong customer recruitment activity, and a $0.7 million increase in operational costs, including travel and entertainment and company events as COVID-19 restrictions have eased.

The increase was driven by a $7.0 million increase in compensation related costs from higher headcount and quota attainment versus sales plan, $4.0 million increase in discretionary marketing expenses supporting the growth in the sales team, and a $0.9 million increase in operational costs, including travel and entertainment, credit card fees and company events.

General and Administrative Expenses

Six Months Ended June 30, Increase Percent

Nine Months Ended September 30, Increase Percent

(in thousands, except percentages)

4 unchanged sentences

The increase in compensation expense is primarily due to higher achievement against targets for the Company's bonus and PSU plans.

Operational costs, including legal, collection expenses, travel, and training increased $1.2 million.

Six Months Ended June 30, Increase Percent

Operational costs, including bad debt expenses, sales tax, collection expenses, travel, and training increased $1.6 million.

Nine Months Ended September 30, Increase Percent

(in thousands, except percentages)

2 unchanged sentences

Depreciation expense increased $0.6 million, or 5%, 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.

Impairment of Right-of-Use Asset

Nine Months Ended September 30, Decrease Percent

(in thousands, except percentages)

Impairment of Right-of-Use Asset $ — $ 1,919 $ (1,919) (100) %

Percentage of revenues — % 2.2 %

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 Income

Six Months Ended June 30, Increase Percent

Nine Months Ended September 30, Increase Percent

(in thousands, except percentages)

Revenue $ 109,918 $ 86,155 $ 23,763 28 %

Operating income 1,533 304 1,229 404 %

Operating income (loss) 2,751 (1,911) 4,662 (244) %

Operating margin 2.5 % (2.2) %

Operating income for the six months ended June 30, 2022 was $1.5 million, a margin of 2.1%, compared to operating income of $0.3 million, a margin of 0.5%, for the same period in 2021, an improvement of $1.2 million.

Operating income for the nine months ended September 30, 2022 was $2.8 million, a positive margin of 2.5%, compared to operating loss of $1.9 million, a negative margin of 2.2%, for the same period in 2021, an improvement of $4.7 million.

Income from Equity Method Investment

Six Months Ended June 30, Increase Percent Change

(in thousands, except percentages)

Income from equity method investment $ 516 $ — $ 516 — %

Percentage of revenues 0.7 % 0.0 %

During the six months ended June 30, 2022, the Company recorded $0.5 million of income related to its proportionate share of eFC's net income.

Interest Expense and Other

Six Months Ended June 30, Increase Percent

Nine Months Ended September 30, Increase Percent Change

(in thousands, except percentages)

Interest expense and other $ 543 $ 282 $ 261 93 %

Income from equity method investment $ 1,107 $ — $ 1,107 n/a

Percentage of revenues 1.0 % 0.0 %

Interest expense and other increased $0.3 million, or 93%, compared to the same period in 2021, primarily due to higher debt outstanding on the revolving credit facility during the current period.

Gain (loss) on investment

Six Months Ended June 30, Decrease Percent

During the nine months ended September 30, 2022, the Company recorded $1.1 million of income related to its proportionate share of eFC's net income.

The Company records its proportionate share of eFC's net income three months in arrears.

Accordingly, there was no income from the Company's proportionate share of eFC's net income for the nine months ended September 30, 2021 as the investment was acquired June 30, 2021.

Gain on investment

Nine Months Ended September 30, Decrease Percent

(in thousands, except percentages)

1 unchanged sentence

Percentage of revenues 0.3 % 1.4 %

During the six months ended June 30, 2022, the Company recognized a $0.3 million gain from the sale of its 40% common share interest in Rigzone.

During the six months ended June 30, 2021, the Company recognized a $1.8 million gain 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.

During the nine months ended September 30, 2022, the Company recognized a $0.3 million gain from the sale of its 40% common share interest in Rigzone.

During the nine months ended September 30, 2021, the Company recognized a $1.2 million gain 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.

Six Months Ended June 30,

Impairment of Investment

Three Months Ended September 30, Decrease Percent

(in thousands, except percentages)

Impairment of investment $ (2,300) $ — $ (2,300) n/a

Percentage of revenues (2.1) % — %

During the nine months ended September 30, 2022, the Company recognized a $2.3 million loss related to an impairment of a subordinated convertible promissory note as further described in note 7 of the Notes to the condensed consolidated financial statements.

Interest Expense and Other

Nine Months Ended September 30, Increase Percent

(in thousands, except percentages)

Interest expense and other $ 990 $ 432 $ 558 129 %

Percentage of revenues 0.9 % 0.5 %

Interest expense and other increased $0.6 million, or 129%, compared to the same period in 2021, due to higher debt outstanding on the revolving credit facility during the current period and higher interest rates.

Nine Months Ended September 30,

(in thousands, except

Income before income taxes $ 1,826 $ 1,861

Income tax expense (benefit) (925) 61

Income (loss) before income taxes $ 888 $ (1,145)

Income tax benefit (937) (511)

Effective tax rate (105.5) % 44.6 %

Our effective tax rate for the six months ended June 30, 2022, differed from the U.S.

statutory rate due to tax benefits of $1.0 million from the vesting of share-based compensation awards, $0.1 million from research tax credits, and $0.1 million from the release of a valuation allowance on our capital loss carryforward.

The tax rate for the six months ended June 30, 2021, differed from the statutory rate due to a $0.4 million tax benefit from the release of a valuation allowance on our capital loss carryforward.

Our effective tax rate for the nine months ended September 30, 2022, differed from the U.S.

statutory rate due to a tax benefit of $1.1 million from the vesting of share-based compensation awards.

The tax rate for the nine months ended September 30, 2021, differed from the statutory rate due to a tax benefit of $0.3 million related to a valuation allowance on our capital loss carryforward.

Income (loss) from discontinued operations, net of tax

Six Months Ended June 30, Increase Percent

Nine Months Ended September 30, Increase Percent

(in thousands, except percentages)

1 unchanged sentence

Percentage of revenues — % (34.1) %

The Company transferred majority ownership of its eFC business on June 30, 2021 to eFC management and 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.

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

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.

Earnings (Loss) per Share

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands, except

per share amounts)

Income from continuing operations $ 2,751 $ 1,800

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

Income (loss) from continuing operations $ 1,825 $ (634)

Loss from discontinued operations, net of tax $ — $ (29,340)

Net income (loss) $ 1,825 $ (29,974)

1 unchanged sentence

Weighted-average shares outstanding - diluted 46,711 46,740

Diluted earnings per share - continuing operations $ 0.06 $ 0.04

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

Diluted earnings (loss) per share - continuing operations $ 0.04 $ (0.01)

Diluted loss per share - discontinued operations $ — $ (0.63)

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

Diluted earnings per share from continuing operations were $0.06 and $0.04 for the six months ended June 30, 2022 and 2021, respectively.

The increase is driven by an increase in operating income and an income tax benefit in the current period.

Diluted earnings (loss) per share were $0.06 and $(0.56) for the six months ended June 30, 2022 and 2021, respectively.

Diluted earnings (loss) per share from continuing operations was $0.04 and $(0.01) for the nine months ended September 30, 2022 and 2021, respectively.

The improvement was primarily driven by higher revenues in the 2022 period.

The prior year loss was driven by an ROU asset impairment and higher depreciation expense partially offset by gain in investment.

Diluted earnings (loss) per share were $0.04 and $(0.64) for the nine months ended September 30, 2022 and 2021, respectively.

The prior year loss per share was driven by the loss from discontinued operations.

11 unchanged sentences

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.

8 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, 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 six months ended June 30, 2022 and 2021 follows (in thousands):

Six Months Ended June 30,

A reconciliation of Adjusted EBITDA for the nine months ended September 30, 2022 and 2021 follows (in thousands):

Nine Months Ended September 30,

Reconciliation of Net Income (loss) to Adjusted EBITDA:

1 unchanged sentence

Interest expense 990 517

Income tax expense (benefit) (925) 61

Income tax benefit (937) (511)

Depreciation 12,594 12,030

1 unchanged sentence

Income from equity method investment (1,107) —

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

Gain on investment (320) (1,198)

Impairment of investments 2,300 —

Severance and related costs 319 1,456

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Amortization of deferred financing costs (110) (110)

Income tax expense (benefit) (925) 61

Income tax benefit (937) (511)

Deferred income taxes 3,682 710

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Adjusted EBITDA $ 22,852 $ 19,085

Net Income (Loss) Margin and Adjusted EBITDA Margin for the six months ended June 30, 2022 and 2021 follows (in thousands):

Six Months Ended June 30,

Net Income (Loss) Margin and Adjusted EBITDA Margin for the nine months ended September 30, 2022 and 2021 follows (in thousands):

Nine Months Ended September 30,

Revenues $ 109,918 $ 86,155

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(1) Net income (loss) 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 six months ended June 30, 2022 and 2021 (in thousands).

Six Months Ended June 30,

We have summarized our cash flows for the nine months ended September 30, 2022 and 2021 (in thousands).

Nine Months Ended September 30,

Cash from operating activities $ 28,686 $ 25,623

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

At June 30, 2022, we had cash of $3.6 million compared to $1.5 million at December 31, 2021.

At September 30, 2022, we had cash of $3.8 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 $70.0 million in borrowing capacity under our $100.0 million Credit Agreement at June 30, 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.

In addition, we had $70.0 million in borrowing capacity under our $100.0 million Credit Agreement at September 30, 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.

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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, income from equity method investments, gain on investments, loss on disposition of discontinued operations, and the effect of changes in working capital.

Net cash flows from operating activities were $19.4 million and $19.3 million for the six-month periods ended June 30, 2022 and 2021, respectively.

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, income from equity method investments, gain or impairments on investments, loss on disposition of discontinued operations, and the effect of changes in working capital.

Net cash flows from operating activities were $28.7 million and $25.6 million for the nine-month periods ended September 30, 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.

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Investing Activities

Cash used in investing activities during the six-month period ended June 30, 2022 was $8.2 million compared to $9.8 million used in the same period of 2021.

Cash used in investing activities in the six-month period ended June 30, 2022 decreased from the comparable 2021 period due to $3.0 million of cash transferred to eFC related to the transfer of ownership in the prior year period.

This decrease was partially offset by higher internal development costs in the current period, primarily driven by higher product development headcount.

Cash used in investing activities during the nine-month period ended September 30, 2022 was $13.1 million compared to $15.5 million used in the same period of 2021.

Cash used in investing activities in the nine-month period ended September 30, 2022 is primarily comprised of $13.4 million of purchases of fixed assets, which is primarily comprised of capitalized development costs as the Company continues to invest in its products.

Cash used in investing activities during the nine-month period ended September 30, 2021 is comprised of $3.0 million of cash transferred to eFC related to the transfer of ownership in the prior year period, $3.0 million of cash paid for an investment as described in Note 7 to the condensed consolidated financial statements, and $10.7 million of fixed asset purchases, which is primarily comprised of capitalized development costs, partially offset by cash proceeds of $1.2 million from the sale of an investment.

Financing Activities

Cash used in financing activities during the six-month period ended June 30, 2022 was $9.2 million and was driven by $7.0 million of net proceeds on long-term debt, and offset by $15.8 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 $5.3 million of share repurchases and $4.0 million of net payments on long-term debt.

Cash used in financing activities during the nine months ended September 30, 2022 was $13.3 million and was driven by $7.0 million of net proceeds on long-term debt, and offset by $19.8 million, net, related to share repurchases and $0.5 million from financing costs paid.

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

Financing and Capital Requirements

Credit Agreement

We have a $100 million revolving credit facility, which matures June 2027, with $ 30.0 million of borrowings on the facility at June 30, 2022, leaving $ 70.0 million available for future borrowings, subject to the terms of the Credit Agreement.

We have a $100 million revolving credit facility, which matures June 2027, with $ 30.0 million of borrowings on the facility at September 30, 2022, leaving $ 70.0 million available for future borrowings, subject to the terms of the Credit Agreement.

Borrowings under the Credit Agreement denominated in U.S.

dollars bear interest, payable at least quarterly, at the Company’s option, at a Secured Overnight Financing Rate ("SOFR") rate or a base rate, plus a margin.

dollars bear interest, payable at least quarterly, at the Company’s option, at the Secured Overnight Financing Rate ("SOFR") or a base rate, plus a margin.

Borrowings under the credit agreement denominated in pounds sterling, if any, bear interest at the Sterling Overnight Index Average ("SONIA") rate plus a margin.

Assuming an int eres t rate of 3.30 % (the rate in effect on June 30, 2022) on our current borrowings, interest payments are expected to be $0.5 million from July 1, 2022 to December 31, 2022, $1.0 million in each of 2023, 2024, 2025, and 2026 and $0.5 million in 2027.

Assuming an int eres t rate of 5.40 % (the rate in effect on September 30, 2022) on our current borrowings, interest payments are expected to be $0.4 million from October 1, 2022 to December 31, 2022, $1.6 million in each of 2023, 2024, 2025, and 2026 and $0.8 million in 2027.

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.

As of June 30, 2022, the Company was in compliance with all of the financial covenants under the Credit Agreement.

As of September 30, 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.

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No leases include options to purchase the leased property.

As of June 30, 2022, the value of our obligations under operating leases was $6.0 million.

As of September 30, 2022, the value of our lease right-of-use asset was $5.5 million and the value of our lease liability was $7.6 million.

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

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Other Capital Requirements

As of June 30, 2022, we recorded approximately $1.0 million of unrecognized tax benefits as liabilities, and we are uncertain if or when such amounts may be settled.

As of September 30, 2022, we recorded approximately $1.0 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 June 30, 2022 are $1.0 million of tax benefits that would affect the effective tax rate if recognized.

Included in the balance of unrecognized tax benefits at September 30, 2022 are $1.0 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.

During the six months ended June 30 2022, the Company repurchased $11.2 million of shares of its common stock pursuant to the stock repurchase program.

As of June 30, 2022, the value of shares available to be purchased under the current plan was $ 9.4 million.

During the nine months ended September 30 2022, the Company repurchased $15.0 million of shares of its common stock pursuant to the stock repurchase program.

As of September 30, 2022, the value of shares available to be

purchased under the current plan was $ 5.7 million.

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

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

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.

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.

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 certain policies at our office locations, including working

from home and the temporary closure of our locations when necessary.

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 in the first half of 2021.

Recruitment activity for our businesses improved during the second half of 2021 and has continued to improve in 2022.

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 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 certain policies at our office locations, including working from home and the temporary closure of our locations when necessary.

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

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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 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.

While the pandemic may impact our financial performance in the future, due to the inherent uncertainty of the 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.

However, we believe that online career websites continue to provide economic and strategic value to the labor market and industries that we serve.

However, we believe that online career websites and marketplaces continue to provide economic and strategic value to the labor market and industries that we serve.

Any slowdown in recruitment activity that occurs could negatively impact 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