What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2023-02-10 compared with 2022-02-11 · 224 added, 205 removed, 418 unchanged (51% of the section changed)

1 unchanged sentence

The following discussion should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in this Annual Report.

Certain statements we make under this Item 7 constitute “Forward-Looking Statements” under the Private Securities Litigation Reform Act of 1995.

Certain statements we make under this Item 7 constitute “Forward-Looking Statements” under the Private Securities Litigation Reform Act of 1995, the Securities Act and the Exchange Act.

See also “Note Concerning Forward-Looking Statements.”

1 unchanged sentence

New risks and uncertainties come up from time to time, and it is impossible to predict these events or how they may affect us.

We have no obligation to update any forward-looking statements after the date hereof, except as required by federal securities law.

We have no obligation to update any forward-looking statements after the date hereof, except as required by applicable federal securities law.

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

7 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.

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.

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

1 unchanged sentence

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.

Recent Developments

Our Revenues and Expenses

10 unchanged sentences

ClearanceJobs 2,064 1,878 186 10%

Average Monthly Revenue per Recruitment Package Customer (1)

Average Annual Revenue per Recruitment Package Customer (1)

FY 2022 FY 2021 Increase (Decrease) Percent

2 unchanged sentences

(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.

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

Dice had 6,311 recruitment package customers as of December 31, 2022, which was an increase of 307, or 5%, year over year and average revenue per recruitment package customer for Dice increased 7% for the year ended December 31, 2022.

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

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

ClearanceJobs had 2,064 recruitment package customers as of December 31, 2022 compared to 1,878 as of December 31, 2022, an increase of 10%, and average revenue per recruitment package customer increased 12%.

5 unchanged sentences

Summary of Deferred Revenue and Backlog:

December 31, 2021 December 31, 2020 Decrease Percent Change

December 31, 2022 December 31, 2021 Increase Percent Change

(in thousands, except percentages)

11 unchanged sentences

Product Releases

Dice Employer Multi-Factor Authentication, Revamped technologist onboarding, New Job Page, 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

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

ClearanceJobs Company Page, ClearanceJobs Multi-Factor Authentication, ClearanceJobs Live Video, ClearanceJobs Scheduled Broadcast Messages

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

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

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.

Other material factors that may affect our results of operations include, but are not limited to, 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, positively impacting our results of operations.

20 unchanged sentences

The annual impairment test for the Tech-focused reporting unit performed as of October 1, 2022 resulted in the fair value of the reporting unit being substantially in excess of the carrying value with fair value exceeding the carrying value by 154%.

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

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

Results for the Tech-focused reporting unit for the fourth quarter of 2021 and estimated future results as of December 31, 2021 have exceeded the projections used in the October 1, 2021 analysis.

Results for the Tech-focused reporting unit for the fourth quarter of 2022 and estimated future results as of December 31, 2022 approximate the projections used in the October 1, 2022 analysis.

As a result, the Company believes it is not more likely than not that the fair value of the reporting unit is less than the carrying value as of December 31, 2022.

Therefore, no quantitative impairment test was performed as of December 31, 2022.

No impairment was recorded during the years ended December 31, 2022 and 2021.

18 unchanged sentences

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

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

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

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

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

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

The impairment review process is performed on October 1 of each year and compares the fair value of the indefinite-lived acquired intangible asset to its carrying value.

1 unchanged sentence

The impairment test performed as of October 1, 2022 resulted in the fair value of the Dice trademarks and brand name exceeding the carrying value by 137%.

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

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

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

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

Revenues attributable to the Dice trademarks and brand name for the fourth quarter of 2021 and estimated future results as of December 31, 2021 have exceeded the projections used in the October 1, 2021 analysis.

The Company's operating results attributable to the Dice trademarks and brand name for the fourth quarter of 2022 and estimated future results as of December 31, 2022 approximate the projections used in the October 1, 2022 analysis.

As a result, the Company believes it is not more likely than not that the fair value of the Dice trademarks and brand name is less than the carrying value as of December 31, 2022.

1 unchanged sentence

No impairment was recorded during the years ended December 31, 2022 and 2021.

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

quarter of 2020.

The projections utilized in the October 1, 2022 analysis included increasing revenues at rates approximating industry growth projections.

2 unchanged sentences

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

The Company's operating results attributable to the Dice trademarks and brand name through December 31, 2021 and projections of future results have met or exceeded those included in the projections utilized in the October 1, 2021 analysis.

In the October 1, 2021 analysis, the Company utilized a relief from royalty rate method to value the Dice trademarks and brand name using a royalty rate of 4.0% based on comparable industry studies and a discount rate of 12.5%.

In the October 1, 2022 analysis, the Company utilized a relief from royalty rate method to value the Dice trademarks and brand name using a royalty rate of 4.0%, which is based on comparable industry licensing agreements and the profitability attributable to the Dice trademarks and brand name, and a discount rate of 12.0%.

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

9 unchanged sentences

Because of the complexity of some of these uncertainties, the ultimate resolution could result in a payment that is materially different from our current estimate of the accrual for unrecognized tax benefits.

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.

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

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

Based on historical trends, improvements in labor markets and the need for our services generally lag behind overall economic improvements.

Additionally, there has historically been a lag from the time customers begin to increase purchases of our recruitment services and the impact to our revenues due to the recognition of revenue occurring over the length of the contract, which can be several months to over a year.

From time to time, we see market slowdowns, which can lead to lower demand for recruiting technology and security cleared professionals.

If recruitment activity slows in the industries in which we operate during 2022 and beyond, our revenues and results of operations could be negatively impacted.

Results of Operations

13 unchanged sentences

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

Disposition related and other costs — — 1,414 — (1,414)

Total operating expenses 146,181 121,655 143,557 24,526 (21,902)

Loss on sale of business $ — $ — $ (537) — 537

Other operating income:

Proceeds from settlement 2,061 — — 2,061 —

Operating income (loss) $ 5,560 $ (1,752) $ (32,390) $ 7,312 $ 30,638

11 unchanged sentences

Impairment of right-of-use asset — % 1.6 % — %

Disposition related and other costs — % — % 1.2 %

Total operating expenses 97.7 % 101.5 % 129.1 %

Loss on sale of business — % — % 0.5 %

Other operating income:

Proceeds from settlement 1.4 % — % — %

Operating income (loss) 3.7 % (1.5) % (29.1) %

8 unchanged sentences

We experienced an increase in revenue of $29.8 million, or 24.8%.

Revenue at Dice increased by $4.1 million, or 4.9%, compared to the same period of 2020 due to improvements in renewal rates and new business activity along with consistently increasing customer counts during 2021, which drives additional revenue in future periods.

Revenue at Dice increased by $20.7 million, or 24.0%, compared to the same period of 2021 due to improvements in renewal rates and new business activity along with increasing customer counts, which drives additional revenue.

Revenues for ClearanceJobs increased by $9.1 million, or 27.0%, as compared to the same period of 2021, driven by continued high demand for professionals with government clearance and consistent product releases and enhancements driving activity on the site.

4 unchanged sentences

Percentage of revenues 11.8 % 12.6 %

Cost of revenues increased by $0.8 million, or 5.6%, driven by an increase of $0.4 million associated with web hosting and cloud computing, consistent with the Company's investment in its products and tools to enhance sales processes.

The Company also experienced $0.4 million increase in headcount related costs.

Cost of revenues increased by $2.5 million, or 16.7%, driven by an increase of $1.8 million from higher compensation related costs, primarily from higher headcount.

Operational costs, including the amortization of cloud computing and consulting costs, increased by $0.7 million.

Product Development Expenses

3 unchanged sentences

Percentage of revenues 11.8 % 13.4 %

Product development expenses increased $1.1 million, or 7.6%, Within product development, the Company experienced a decrease in capitalized labor of $0.7 million, which increased expense, along with an increase in consulting costs of $0.3 million.

Product development expenses increased $1.7 million, or 10.3%, driven by an increase of $5.0 million from higher compensation related costs, primarily due to higher headcount, partially offset by an increase in capitalized labor of $3.8 million, which decreases operating expenses.

Additionally, operational costs, including consulting, education and training costs, increased by $0.5 million.

Sales and Marketing Expenses

4 unchanged sentences

Sales and marketing expenses increased $15.7 million, or 35.8%, from the same period in 2021.

The increase was primarily driven by $2.4 million increase in compensation related costs due to increased headcount and higher quota attainment versus sales plan, and a $1.5 million increase in discretionary marketing expenses as customer recruitment activity rebounded.

The increase was primarily driven by $9.4 million increase in compensation related costs due to increased headcount and higher quota attainment versus sales plan, and a $5.1 million increase in discretionary marketing expenses supporting the growth in the sales team, and a $1.1 million increase in operational costs, including company events, credit card fees, and hotel and travel.

General and Administrative Expenses

3 unchanged sentences

Percentage of revenues 22.7 % 23.8 %

General and administrative costs increased $2.0 million or 7.4%, primarily due to an increase in compensation related costs of $2.9 million with business performance driving achievement for the bonus and stock-based compensation plans.

This was partially offset by lower bad debt expense of $0.7 million.

General and administrative costs increased $5.5 million or 19.1%, primarily due to an increase in compensation related costs of $3.7 million, which includes a $1.8 million increase in stock-based compensation.

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

Operational costs, including bad debt expense and consulting increased by $1.8 million.

Year Ended December 31, Increase Percent

2 unchanged sentences

Percentage of revenues 11.7 % 13.6 %

Depreciation expense increased $6.1 million or 59.3% 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 consolidated statements of cash flows.

Impairment of Intangible Assets

Year Ended December 31, Decrease Percent

(in thousands, except percentages)

Impairment of intangible assets $ — $ 15,200 $ (15,200) (100.0) %

Percentage of revenues — % 13.7 %

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 10 of the notes to consolidated financial statements.

Impairment of Goodwill

Depreciation expense increased $1.1 million or 7.0% from the same period in 2021, in connection with increasing internal development costs driving higher depreciation.

Impairment of right-of-use asset

Year Ended December 31, Decrease Percent

(in thousands, except percentages)

Impairment of goodwill $ — $ 22,607 $ (22,607) (100.0) %

Percentage of revenues — % 20.3 %

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 11 of the notes to consolidated financial statements.

Impairment of right-of-use asset $ — $ 1,919 $ (1,919) (100.0) %

Percentage of revenues — % 1.6 %

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 right-of-use ("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 third quarter of 2021, which did not reoccur in 2022.

Proceeds from settlement

Year Ended December 31, Increase Percent

(in thousands, except percentages)

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

Proceeds from settlement $ 2,061 $ — $ 2,061 — %

Percentage of revenues 1.4 % — %

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 third quarter of 2021.

During the fourth quarter of 2022 the Company received proceeds from a legal settlement of $2.1 million.

Operating Income (Loss)

4 unchanged sentences

Percentages of revenues 3.7 % (1.5) %

Operating loss for the year ended December 31, 2021 was $1.8 million, a negative margin of 1.5%, compared to operating loss of $32.4 million, a negative margin of 29.1%, for the same period in 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.

Operating income for the year ended December 31, 2022 was $5.6 million, a margin of 3.7%, compared to operating loss of $1.8 million, a negative margin of 1.5%, for the same period in 2021.

The increase in operating income and improved percentage margin was driven by higher revenues and proceeds from settlement, 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

3 unchanged sentences

Percentage of revenues 1.1 % 0.2 %

During the fourth quarter of 2021, the Company recorded $0.2 million of income related to its proportionate share of eFinancialCareer's ("eFC") net income.

Interest Expense and Other

Year Ended December 31, Decrease Percent

(in thousands, except percentages)

Interest expense and other $ 667 $ 831 $ (164) (19.7) %

Percentage of revenues 0.6 % 0.7 %

Interest expense and other decreased by $0.2 million, or 19.7%, from the same period in 2020.

The decrease in interest expense was primarily due to lower weighted average debt outstanding during the year.

The 2020 period included a $0.2 million gain recognized in the second quarter of 2020 on the sale of the Company's 20% interest in BioSpace.

During the years ended December 31, 2022 and 2021, the Company recorded $1.6 million and $0.2 million, respectively, 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.

The increase of $1.4 million is primarily due to the 2022 period reflecting a full year of activity.

Impairment of investment

3 unchanged sentences

Percentage of revenues (1.5) % — %

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

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

During the third quarter of 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 consolidated financial statements.

Gain on investment

Year Ended December 31, Increase Percent

Year Ended December 31, Decrease Percent

(in thousands, except percentages)

1 unchanged sentence

Percentage of revenues 0.2 % 1.0 %

The gain on investment 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.

During the second quarter of 2022, the Company recognized a $0.3 million gain from the sale of its 40% common share interest in Rigzone.

The gain on investment of $1.2 million for the year ended December 31, 2021 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 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 consolidated financial statements.

Interest Expense and Other

Year Ended December 31, Increase Percent

(in thousands, except percentages)

Interest expense and other $ 1,580 $ 667 $ 913 136.9 %

Percentage of revenues 1.1 % 0.6 %

Interest expense and other increased by $0.9 million, or 136.9%, from the same period in 2021 due to higher debt outstanding under the Credit Agreement during the current period and higher interest rates.

Year Ended December 31,

(in thousands, except

Loss before income taxes $ (1,031) $ (35,223)

Income (loss) before income taxes $ 3,597 $ (1,031)

Income tax benefit (579) (629)

Effective tax rate (16.1) % 61.0 %

A reconciliation between the income tax benefit at the federal statutory rate and the reported income tax benefit is summarized as follows:

A reconciliation between the income tax expense (benefit) at the federal statutory rate and the reported income tax benefit is summarized as follows:

Year Ended December 31,

2 unchanged sentences

Stock-based compensation (1,130) (84)

Nondeductible impairment — 5,029

State tax expense (benefit), net of federal effect 110 (514)

State tax expense, net of federal effect 139 110

Change in accrual for unrecognized tax benefits (16) (155)

1 unchanged sentence

Research and development tax credits (763) (478)

Income from equity method investment (335) —

Change in valuation allowance 555 —

Other (50) (96)

1 unchanged sentence

Our effective income tax rate was (16.1)% and 61.0% for the years ended December 31, 2022 and 2021, respectively.

The 2022 tax rate differed from the federal statutory rate primarily because of a tax benefit related to the vesting of stock-based compensation;

tax credits for research and development;

and an increase in the valuation allowance associated with an investment.

The 2021 tax rate differed from the federal statutory rate primarily because of the utilization of a capital loss carryforward to offset a gain on an investment;

1 unchanged sentence

and tax credits for research and development.

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

nondeductible impairment charges;

state tax benefits;

and tax credits for research and development.

Income (loss) from discontinued operations, net of tax

For the year ended December 31, Decrease Percent

For the year ended December 31, Increase Percent

(in thousands, except percentages)

Income (loss) from discontinued operations, net of tax $ (29,340) $ 2,382 $ (31,722) (1,332) %

Loss from discontinued operations, net of tax $ — $ (29,340) $ 29,340 (100) %

Percentage of revenues — % (24.5) %

1 unchanged sentence

As a result, the Company experienced a loss from discontinued operations, net of tax, of $29.3 million.

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 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 method investment of $3.6 million and eFC's earnings during the period.

Income from discontinued operations for the year ended December 31, 2020 represents eFC's earnings during the period.

Earnings per Share

2 unchanged sentences

per share amounts)

Loss from continuing operations $ (402) $ (32,397)

Income (loss) from discontinued operations, net of tax (29,340) 2,382

Net Loss $ (29,742) $ (30,015)

Income (loss) from continuing operations $ 4,176 $ (402)

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

Net income (loss) $ 4,176 $ (29,742)

Weighted-average shares outstanding - basic 44,274 46,333

Weighted-average shares outstanding - diluted 46,533 46,333

Diluted loss per share - continuing operations $ (0.01) $ (0.67)

Diluted earnings (loss) per share - continuing operations $ 0.09 $ (0.01)

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

Diluted loss per share $ (0.64) $ (0.62)

Diluted loss per share from continuing operations was $0.01 and $0.67 for the years ended December 31, 2021 and 2020, respectively.

The decrease in diluted loss per share was primarily driven by the non-cash impairment charges during 2020 and the gain on 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 $0.62 for the years ended December 31, 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 (loss) per share $ 0.09 $ (0.64)

Diluted earnings (loss) per share from continuing operations was $0.09 and $(0.01) for the years ended December 31, 2022 and 2021, respectively.

The improvement in the 2022 period was primarily driven by higher revenues, partially offset by higher operating costs as the Company invests in its product and sales and marketing for future growth.

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

Diluted earnings (loss) per share was $0.09 and $(0.64) for the years ended December 31, 2022 and 2021, respectively.

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

Comparison of Years Ended December 31, 2021 and 2020

1 unchanged sentence

(in thousands, except percentages)

Tech-focused:

$ 86,257 $ 82,190 $ 4,067 4.9 %

2 unchanged sentences

(1) Includes Dice and Career Events

We experienced a decrease in revenue of $6.1 million, or 5.2%.

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

We experienced an increase in revenue of $8.7 million, or 7.9%.

Revenue at Dice increased by $4.1 million, or 4.9%, compared to the same period in 2020 due to improvements in renewal rates and new business activity along with consistently increasing customer counts during 2021, which drives additional revenue in future periods.

Revenues for ClearanceJobs increased by $4.7 million, or 16.1%, as compared to the same period of 2020, driven by continued high demand for professionals with government clearance and consistent product releases and enhancements driving activity on the site.

4 unchanged sentences

Percentage of revenues 12.6 % 12.9 %

Cost of revenues increased by $0.8 million, or 5.6%, primarily driven by an increase in compensation related costs of $1.8 million, partially offset by higher capitalization of internal development costs of $1.0 million, which decreased operating expense.

Together, this increased expense $0.8 million.

The Company also experienced a $0.4 million increase in headcount related costs.

Product Development Expenses

3 unchanged sentences

Percentage of revenues 13.4 % 13.4 %

Product development expenses increased $0.2 million or 1.3%, driven by increases in compensation related costs from higher wages.

This was partially offset by higher capitalization of internal development costs, which decrease operating expense.

Together, this increased expense $0.8 million.

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

These increases were offset by a decrease in travel, software subscriptions, and other costs due to COVID-19 of $0.6 million.

Product development expenses increased $1.1 million or 7.6%.

Within product development, the Company experienced a decrease in capitalized labor of $0.7 million, which increased expense, along with an increase in consulting costs of $0.3 million.

Sales and Marketing Expenses

Year Ended December 31, Decrease Percent

Year Ended December 31, Increase Percent

(in thousands, except percentages)

1 unchanged sentence

Percentage of revenues 36.4 % 35.7 %

Sales and marketing expenses decreased $3.0 million, or 7.0%, from the same period in 2019.

Sales and marketing had an increase in compensation related costs of $4.7 million.

This increase was offset by $5.6 million in reduced discretionary marketing expenses realized from efficiencies in vendor selection and volumes and $2.1 million reduction in other operational costs due to the COVID-19 pandemic, including consulting and traveling costs.

Sales and marketing expenses increased $4.0 million, or 10.1%, from the same period in 2020.

General and Administrative Expenses

3 unchanged sentences

Percentage of revenues 23.8 % 24.0 %

General and administrative costs increased $0.8 million or 3.1%, primarily due to an increase in compensation costs of $1.0 million and non-cash stock based compensation costs of $0.6 million, partially offset by a decrease in other operational costs of $0.8 million, including recruiting, consulting, and travel costs.

This was partially offset by lower bad debt expense of $0.7 million.

Year Ended December 31, Increase Percent

2 unchanged sentences

Percentage of revenues 13.6 % 9.2 %

Depreciation expense increased $1.8 million or 21.7%, from the same period in 2019, in connection with higher headcount driving higher capitalization of internal development costs, which are reflected as purchases of fixed assets in the consolidated statements of cash flows.

Depreciation expense increased $6.1 million or 59.3%, 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 consolidated statements of cash flows.

Impairment of intangible assets

Year Ended December 31, Increase Percent

Year Ended December 31, Decrease Percent

(in thousands, except percentages)

2 unchanged sentences

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

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

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

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 9 of the notes to consolidated financial statements.

Impairment of goodwill

Year Ended December 31, Increase Percent

Year Ended December 31, Decrease Percent

(in thousands, except percentages)

1 unchanged sentence

Percentage of revenues — % 20.3 %

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

As a result of the analyses, the Company recorded an impairment charge of $22.6 million during the three months ended September 30, 2020.

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 10 of the notes to consolidated financial statements.

Disposition Related and Other Costs

Year Ended December 31, Decrease Percent

(in thousands, except percentages)

Disposition related and other costs $ — $ 1,414 $ (1,414) (100.0) %

Percentage of revenues — % 1.2 %

The disposition related and other costs of $1.4 million for the year ended December 31, 2019, as described in note 16 to consolidated financial statements, are primarily due to severance and related costs incurred in reorganizing the Tech-focused business.

Loss on sale of business

Year Ended December 31, Decrease Percent

Impairment of right-of-use asset

Year Ended December 31, Increase Percent

(in thousands, except percentages)

Loss on sale of business $ — $ 537 $ (537) (100.0) %

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

Percentage of revenues 1.6 % — %

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

See also note 6 to consolidated financial statements.

As a result, the Company recorded an impairment charge of $1.9 million during the third quarter of 2021.

Operating Income (Loss)

4 unchanged sentences

Percentage of revenues (1.5) % (29.1) %

Operating loss for the year ended December 31, 2020 was $32.4 million, a negative margin of 29.1%, as compared to operating income of $10.1 million, a positive margin of 8.6%, for the same period in 2019.

The decrease in operating income and percentage margin was primarily driven by the non-cash impairments of goodwill and intangible assets of $37.8 million in the 2020 period, partially offset by the decrease in disposition and related costs of $1.4 million in the 2019 period.

Interest Expense and Other

Operating loss for the year ended December 31, 2021 was $1.8 million, a negative margin of 1.5%, compared to operating loss of $32.4 million, a negative margin of 29.1%, for the same period in 2020.

Income from equity method investment

Year Ended December 31, Decrease Percent

(in thousands, except percentages)

Interest expense $ 831 $ 703 $ 128 18.2 %

Income from equity method investment $ 190 $ — $ 190 — %

Percentage of revenues 0.2 % — %

Interest expense increased by $0.1 million, or 18.2%, from the same period in 2019.

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

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

During the fourth quarter of 2021, the Company recorded $0.2 million of income related to its proportionate share of eFC's net income.

Impairment of Investment

5 unchanged sentences

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

Gain on investment

Year Ended December 31, Increase Percent

(in thousands, except percentages)

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

Percentage of revenues 1.0 % — %

The gain on investment of $1.2 million 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 consolidated financial statements.

Interest Expense and Other

Year Ended December 31, Decrease Percent

(in thousands, except percentages)

Interest expense $ 667 $ 831 $ (164) (19.7) %

Percentage of revenues 0.6 % 0.7 %

Interest expense and other decreased by $0.2 million, or 19.7%, from the same period in 2020.

The decrease in interest expense was primarily due to lower weighted average debt outstanding during the year.

The 2020 period included a $0.2 million gain recognized in the second quarter of 2020 on the sale of the Company's 20% interest in BioSpace.

Year Ended December 31,

(in thousands, except

Income (loss) before income taxes $ (35,223) $ 9,425

Income tax expense (benefit) (2,826) 2,794

Loss before income taxes $ (1,031) $ (35,223)

Income tax benefit (629) (2,826)

Effective tax rate 61.0 % 8.0 %

A reconciliation between tax expense (benefit) at the federal statutory rate and the reported income tax expense (benefit) is summarized as follows:

A reconciliation between tax benefit at the federal statutory rate and the reported income tax benefit is summarized as follows:

Year Ended December 31,

Federal statutory rate $ (216) $ (7,397)

Loss (gain) on sale of businesses or investments (42) 84

Gain on sale of businesses or investments (251) (42)

Stock-based compensation (84) 432

4 unchanged sentences

Research and development tax credits (478) (530)

Income tax expense (benefit) $ (2,826) $ 2,794

Other (96) 89

Income tax benefit $ (629) $ (2,826)

Our effective income tax rate was 61.0% and 8.0% for the years ended December 31, 2021 and 2020, respectively.

The 2021 tax rate differed from the federal statutory rate primarily because of the utilization of a capital loss carryforward to offset a gain on an investment;

deduction limitations on executive compensation;

and tax credits for research and development.

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

2 unchanged sentences

and tax credits for research and development.

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

state tax expense;

and tax credits for research and development.

Earnings (Loss) per Share

Income (loss) from discontinued operations, net of tax

Year Ended December 31, Decrease Percent

(in thousands, except percentages)

Income (loss) from discontinued operations, net of tax $ (29,340) $ 2,382 $ (31,722) (1,331.7) %

Percentage of revenues (24.5) % 2.1 %

During the second quarter of 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.

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 method investment of $3.6 million and eFC's earnings during the period.

Income from discontinued operations for the year ended December 31, 2020 represents eFC's earnings during the period.

Loss per share

Year Ended December 31,

1 unchanged sentence

per share amounts)

Income (loss) from continuing operations $ (32,397) $ 6,631

Income from discontinued operations, net of tax 2,382 5,920

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

Loss from continuing operations $ (402) $ (32,397)

Income (loss) from discontinued operations, net of tax (29,340) 2,382

Net loss (29,742) (30,015)

Weighted-average shares outstanding-diluted 46,333 48,278

Diluted earnings (loss) per share - continuing operations (0.67) 0.13

Diluted earnings per share - discontinued operations 0.05 0.11

Diluted earnings (loss) per share (0.62) 0.24

Diluted earnings (loss) per share from continuing operations was $(0.67) and $0.13 for the years ended December 31, 2020 and 2019, respectively and diluted earnings (loss) per share was $(0.62) and $0.24 for the years ended December 31, 2020 and 2019, respectively.

The loss per share for the 2020 period was primarily driven by the non-cash impairment charges.

Liquidity and Capital Resources

Diluted loss per share - continuing operations (0.01) (0.67)

Diluted earnings (loss) per share - discontinued operations (0.63) 0.05

Diluted loss per share (0.64) (0.62)

Diluted loss per share from continuing operations was $0.01 and $0.67 for the years ended December 31, 2021 and 2020, respectively.

The decrease in diluted loss per share was primarily driven by the non-cash impairment charges during 2020 and

the gain on 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 $0.62 for the years ended December 31, 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.

Non-GAAP Financial Measures

5 unchanged sentences

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.

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 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, 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, losses from equity method investments, transaction costs in connection with the credit agreement, deferred revenues written off in connection with acquisition purchase accounting adjustments, 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, 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.

Adjusted EBITDA represents net income plus (to the extent deducted in calculating such net income) interest expense, income tax expense, depreciation and amortization, and items such as 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 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 above, 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 is frequently used by securities analysts, lenders and others in their evaluation of companies, Adjusted EBITDA and Adjusted EBITDA Margin have limitations as analytical tool, 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 a comparative measure.

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.

Prior to 2019, Adjusted EBITDA was divided by Adjusted Revenues, which represented Revenues less revenues of divested businesses.

For the years ended December 31, 2021, 2020, and 2019, revenues of divested businesses was zero.

Accordingly, Adjusted Revenues is no longer used in the computation.

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.

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, operating income, net income, net income margin, 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 years ended December 31, 2022, 2021 and 2020 follows (in thousands):

4 unchanged sentences

Interest expense 1,580 748 1,031

Income tax expense (benefit) (629) (2,826) 2,794

Income tax benefit (579) (629) (2,826)

Depreciation 17,487 16,344 10,259

Non-cash stock based compensation 9,519 7,681 5,764

Loss on sale of business — — 537

Income from equity method investment (1,597) (190) —

Disposition related and other costs — — 1,414

Impairment of intangible assets — — 15,200

2 unchanged sentences

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

Proceeds from settlement (2,061) — —

Gain on investments (320) (1,198) (200)

Legal contingencies and related fees — — 123

Severance and related costs 445 1,969 1,194

6 unchanged sentences

Amortization of deferred financing costs (146) (147) (147)

Income tax expense (benefit) (629) (2,826) 2,794

Income tax benefit (579) (629) (2,826)

Deferred income taxes 3,800 569 2,918

2 unchanged sentences

Change in deferred revenue (4,718) (10,075) 8,193

Disposition related and other costs — — 1,414

Legal contingencies and related fees — — 123

Discontinued operations results — (3,593) (7,290)

6 unchanged sentences

Revenues $ 149,680 $ 119,903 $ 111,167

Net income (loss) $ 4,176 $ (29,742) $ (30,015)

Net income (loss) margin (1)

3 % (25) % (27) %

Adjusted EBITDA $ 30,950 $ 26,162 $ 22,634

Adjusted EBITDA Margin (1)

21 % 22 % 20 %

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

Liquidity and Capital Resources

We have summarized our cash flows for the years ended December 31, 2022, 2021 and 2020 as follows (in thousands):

5 unchanged sentences

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

At December 31, 2021, we had cash of $1.5 million compared to $4.5 million at December 31, 2020.

At December 31, 2022, we had cash and borrowings of $3.0 million and $30.0 million, respectively, compared to $1.5 million and $23.0 million, respectively, at December 31, 2021.

Our principal internal sources of liquidity are cash on hand, 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 December 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 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 revolving credit facility may refuse or be unable to satisfy their commitment to lend to us 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.

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.

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.

1 unchanged sentence

Operating Activities

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

Cash flows from operating activities is driven by earnings and is dependent on the amount and timing of billings and cash collections from our customers.

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

Net cash flows from operating activities were $36.0 million and $28.6 million for the years ended December 31, 2022 and 2021, respectively, an increase of $7.4 million.

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

Cash provided by operating activities during the year ended December 31, 2021 increased primarily due to strong billings to and collections from customers.

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 year ended December 31, 2022 increased primarily due to strong billings to and collections from customers and the timing of certain vendor and tax payments.

Investing Activities

During the year ended December 31, 2022, cash used in investing activities was $17.7 million compared to $19.3 million of cash used in investing activities during the year ended December 31, 2021.

Cash used in investing activities during the year ended December 31, 2021 increased from the comparable 2020 period due to cash transferred to 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, partially offset by higher proceeds from sale of investments.

Cash used in investing activities during the year ended December 31, 2022 is primarily comprised of $18.0 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 year ended December 31, 2021 is comprised of $3.2 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 of the notes to consolidated financial statements, and $14.3 million of fixed assets 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 year ended December 31, 2021 was $15.4 million primarily due to $3.0 million of net borrowings on long-term debt and $18.4 million of repurchases of common stock.

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

Cash used in financing activities during the year ended December 31, 2022 was $16.9 million primarily due to cash uses of $23.4 million, net, related to share repurchases and $0.5 million from financing costs paid, partially offset by $7.0 million of net proceeds on long-term debt.

Cash used during the year ended December 31, 2021 was $15.4 million and was driven by $18.4 million of share repurchases, partially offset by $3.0 million of net borrowings on long-term debt.

Comparison of Years Ended December 31, 2021 and 2020

2 unchanged sentences

working capital.

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

Net cash flows from operating activities were $28.6 million and $18.7 million for the years ended December 31, 2021 and 2020, respectively, an increase of $9.9 million.

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

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

Cash provided by operating activities during the year ended December 31, 2021 increased primarily due to strong billings to and collections from customers.

Investing Activities

During the year ended December 31, 2021, cash used in investing activities was $19.3 million compared to $15.9 million of cash used in investing activities during the year ended December 31, 2020.

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

Cash used by investing activities during the year ended December 31, 2021 increased from the comparable 2020 period due to cash transferred to 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, partially offset by higher proceeds from sale of investments.

Financing Activities

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

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

Financings and Capital Requirements

Credit Agreement

We have a $90 million revolving credit facility, which matures November 2023, with $23 million of borrowings on the facility at December 31, 2021, leaving $67 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 1.88% (the rate in effect on December 31, 2021) on our current borrowings, interest payments are expected to be $0.4 million per year in 2022-2023.

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.

We have a $100 million revolving credit facility, which matures June 2027, with $30.0 million of outstanding borrowings on the facility at December 31, 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 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.

The margin ranges from 2.00% to 2.75% on SOFR and SONIA loans and 1.00% to 1.75% on base rate loans, determined by the Company’s most recent consolidated leverage ratio, plus an additional spread of 0.10%.

The Company incurs a commitment fee ranging from 0.35% to 0.50% on any unused capacity under the revolving loan facility, determined by the

Company’s most recent consolidated leverage ratio.

Assuming an interest rate of 6.67% (the rate in effect on December 31, 2022) on our current borrowings, interest payments are expected to be $2.0 million per year in years 2023 through 2026 and $1.0 million in 2027.

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

As of December 31, 2022, the Company was in compliance with all of the financial covenants under the Credit Agreement.

Refer to Note 12 in the notes to consolidated financial statements and Item 7A.

Refer to Note 11 of the notes to consolidated financial statements and Item 7A.

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

3 unchanged sentences

No leases include options to purchase the leased property.

As of December 31, the value of our obligations under operating leases was $6.9 million.

See note 7 to consolidated financial statements for further information.

As of December 31, 2022 the value of our lease right-of-use asset was $6.6 million and the value of our lease liability was $8.5 million.

Our recorded lease right-of-use asset and lease liability were each reduced $2.1 million as of December 31, 2022, which represents a tenant improvement allowance that is expected to be consumed in 2023.

See also Note 6 of the notes to consolidated financial statements for further information.

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

4 unchanged sentences

Included in the balance of unrecognized tax benefits at December 31, 2022 are $0.8 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 twelve months.

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 twelve months.

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

2 unchanged sentences

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

See note 14 of notes to consolidated financial statements for further information.

Subsequent to December 31, 2022, the Company's Board of directors announced a new stock repurchase program that permits the repurchase of up to $10 million of the Company's common stock through February 2024.

See also Note 13 of the notes to consolidated financial statements for further information.

We anticipate capital expenditures in 2023 to be approximately $20 million to $22 million.

1 unchanged sentence

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

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

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.

For instance, the COVID-19 pandemic resulted in a slowdown of recruiting activity in 2020 and early in 2021, which negatively impacted our business.

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

Based on historical trends, improvements in labor markets and the need for our services generally lag behind overall economic improvements.

From time to time, we see market slowdowns, which can lead to lower demand for recruiting technologists and financial and security cleared professionals.

In 2020 and early in 2021, the COVID-19 pandemic led to a reduction in recruitment activity.

If recruitment activity slows in the industries in which we operate, our revenues and results of operations could be negatively impacted.

Recent Accounting Pronouncements

For a discussion of new accounting pronouncements affecting the Company, refer to note 2 of notes to consolidated financial statements included in Item 8 of this Annual Report.

For a discussion of new accounting pronouncements affecting the Company, refer to Note 2 of the notes to consolidated financial statements included in Item 8 of this Annual Report.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis