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. See also "Note Concerning Forward-Looking Statements." You should keep in mind that any forward-looking statement made by us herein, or elsewhere, speaks only as of the date on which it is made. New risks and uncertainties come up from time to time, and it is impossible to predict these events or how they may affect us. We have no obligation to update any forward-looking statements after the date hereof, except as required by federal securities law. Overview
We are a provider of online software products, tools and services that provide career marketplaces to candidates and employers in
In online recruitment, we specialize in employment categories in which there has
been a long-term scarcity of highly skilled, highly qualified professionals
relative to market demand, specifically technologists who work in a variety of
industries or have active government security clearances. Our websites serve as
online two-sided marketplaces where employers and recruiters source and connect
with prospective employees, and where technologists find relevant job
opportunities, data and information to further their careers. Our websites offer
job postings, news and content, career development and recruiting services
tailored to the specific needs of the professional community that each website
serves.
Majority ownership and control of DHI's eFinancialCareers ("eFC") business,
which provides career websites to the financial services industry and has
operations in the United Kingdom , Continental Europe, Asia , the Middle East and
North America , was transferred to eFC management on June 30, 2021 . The Company
retained a 40% common share interest. As a result, all ongoing DHI operations,
which include the Dice and ClearanceJobs brands, are in the United States
subsequent to June 30, 2021 .
We have been in the recruiting and career development business for over 30
years. Based on our operating structure, we have identified one reportable
segment, Tech-focused, which includes the Dice and ClearanceJobs businesses and
corporate related costs. The Dice and ClearanceJobs businesses and corporate
related costs are aggregated into the Tech-focused reportable segment primarily
because the Company does not have discrete financial information for those
brands or costs. As a result of the eFC separation, the eFC business was
deconsolidated from the Company's consolidated financial statements as of June
30, 2021 and is reflected as a discontinued operation.
Our income and expenses
We derive the majority of our revenues from customers who pay fees, either
annually, quarterly or monthly, to post jobs on our websites and to access our
searchable databases of resumes. Our fees vary by customer based on the number
of individual users of our databases of resumes, the number and type of job
postings and profile views purchased and the terms of the packages purchased.
Our Company sells recruitment packages that can include access to our databases
of resumes and job posting capabilities. We believe the key metrics that are
material to an analysis of our businesses are our total number of Dice and
ClearanceJobs recruitment package customers and the revenue, on average, that
these customers generate. The tables below detail this customer data.
31
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Recruitment Package customers
Percent
Recruitment Package Customers: December 31, 2021 December 31, 2020 Increase (Decrease) Change
Dice 6,004 5,150 854 17%
ClearanceJobs 1,878 1,718 160 9%
Average Monthly Revenue per Recruitment Package Customer (1)
Percent
FY 2021 FY 2020 Increase (Decrease) Change
Dice $1,137 $1,132 $5 -%
ClearanceJobs $1,419 $1,346 $73 5%
(1) Calculated by dividing recruiting package customer revenue by the average daily number of recruiting package customers during each month, adjusted to reflect a thirty-day month. The simple average of each month is used to derive the amount for each period.
Dice had 6,004 recruitment package customers as ofDecember 31, 2021 , which was an increase of 854, or 17%, year over year and average revenue per recruitment package customer for Dice increased for the year endedDecember 31, 2021 . The increases were driven by strong renewal rates and new business activity. ClearanceJobs had 1,878 recruitment package customers as ofDecember 31, 2021 compared to 1,718 as ofDecember 31, 2020 , an increase of 9%, and average revenue per recruitment package customer increased. The increases for ClearanceJobs were due to continued high demand for professionals with government clearance and consistent product releases and enhancements driving activity on the site. Deferred revenue, as shown on the consolidated balance sheets, reflects customer billings made in advance of services being rendered. Backlog consists of deferred revenue plus customer contractual commitments not invoiced representing the value of future services to be rendered under committed contracts. We believe backlog to be an important measure of our business as it represents our ability to generate future revenue. A summary of our deferred revenue and backlog is as follows: Summary of Deferred Revenue and Backlog:December 31, 2021
(in thousands, except percentages) Deferred Revenue $ 46,146 $ 36,582$ 9,564 26 % Contractual commitments not invoiced 46,497 27,849 18,648 67 % Backlog1 $ 92,643 $ 64,431$ 28,212 44 %
(1) The backlog consists of deferred revenue plus unbilled customer contractual commitments representing the value of future services to be rendered under confirmed contracts.
Backlog atDecember 31, 2021 increased$28.2 million fromDecember 31, 2020 due to the strong technology recruitment market driving bookings growth for both Dice and ClearanceJobs, investments in product, sales and marketing and a focus on signing multi-year contracts. To a lesser extent, we also generate revenue from advertising on our various websites or from lead generation and marketing solutions provided to our customers. Advertisements include various forms of rich media and banner advertising, text links, sponsorships, and custom content marketing solutions. Lead generation information utilizes advertising and other methods to deliver leads to a customer. The Company continues to evolve and develop new software products and features to attract and engage qualified professionals and match them with employers. Our ability to grow our revenues will largely depend on our ability to grow our customer bases in the markets in which we operate by acquiring new customers while retaining a high proportion of the customers we currently serve, and to expand the breadth of services our customers purchase from us. We continue to make investments in our business and infrastructure to help us achieve our long-term growth objectives, such as the innovative products in the table below. 32
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Product Releases
2021 2020
Dice Marketplace , Dice TalentSearch Social Data
Job alerts based on Dice IntelliSearch, Dice
Refresh, Brand.io, TalentSearch Personalization,
Private Email, Dice Remote Jobs, Dice Recruiter
Unbiased Sourcing Mode
Profile, Dice Instant Messaging
ClearanceJobs Client Team Dashboard,
ClearanceJobs Meetings, ClearanceJobs Video, Team
ClearanceJobs Workflow, ClearanceJobs Favorites,
Recruiting, Shared Talent Pipelines, Quality of Use
ClearanceJobs Self-Service BrandAmp, ClearanceJobs
Improvements
Search for candidates and distribution of job offers
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. 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. If we are unable to continue to attract qualified professionals to engage with our websites, our customers may no longer find our services attractive, which could have a negative impact on our results of operations. Additionally, we need to ensure that our websites remain relevant in order to attract qualified professionals to our websites and to engage them in high-value tasks, such as posting resumes and applying to jobs. The largest components of our expenses are personnel costs and marketing and sales expenditures. Personnel costs consist of salaries, benefits, and incentive compensation for our employees, including commissions for salespeople. Personnel costs are categorized in our statement of operations based on each employee's principal function. Marketing expenditures primarily consist of online advertising, brand promotion and lead generation to employers and job seekers.
Critical accounting estimates
This discussion of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance withU.S. GAAP. The preparation of these financial statements requires us to make estimates, judgments and assumptions that affect the reported amount of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. We evaluate our estimates, including our critical accounting estimates, on an ongoing basis. We based our estimates of the carrying value of certain assets and liabilities on historical experience and on various other assumptions that we believe are reasonable. In many cases, we could reasonably have used different accounting policies and estimates. In some cases, changes in the accounting estimates are reasonably likely to occur from period to period. Our actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting estimates affect our more significant judgments used in the preparation of our consolidated financial statements.
We recognize goodwill when the purchase price paid for an acquisition exceeds the estimated fair value of the identified net tangible and intangible assets acquired.
We determine whether the carrying value of recorded goodwill is impaired on an annual basis or more frequently if indicators of potential impairment exist. In testing goodwill for impairment, a qualitative assessment can be performed and if it is determined that the fair value of the reporting unit is more likely than not less than the carrying amount, the impairment review process compares the fair value of the reporting unit in which the goodwill resides to the carrying value of that reporting unit. If the fair value of the reporting unit is less than its carrying amount, an impairment charge is recorded for the amount the carrying value exceeds the fair value. Our annual impairment test for goodwill is performed onOctober 1 of each year. The annual impairment test for the Tech-focused reporting unit performed as ofOctober 1, 2021 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 100%. 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 theMarch 31, 2020 analysis. As a result, the Company performed an interim impairment analysis as ofSeptember 30, 2020 , which resulted in the Company recording an impairment charge of$23.6 million during the three month period endedSeptember 30, 2020 . 33
-------------------------------------------------------------------------------- Table of Contents Results for the Tech-focused reporting unit for the fourth quarter of 2021 and estimated future results as ofDecember 31, 2021 have exceeded the projections used in theOctober 1, 2021 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 ofDecember 31, 2021 . Therefore, no quantitative impairment test was performed as ofDecember 31, 2021 . No impairment was recorded during the years endedDecember 31, 2021 and 2019. The amount of goodwill as ofDecember 31, 2021 allocated to the Tech-focused reporting unit was$128.1 million . The discount rate applied for the Tech-focused reporting unit in theOctober 1, 2021 analysis was 11.5%. An increase to the discount rate applied or reductions to future projected operating results could result in future impairment of the Tech-focused reporting unit's goodwill. It is reasonably possible that changes in judgments, assumptions and estimates the Company made in assessing the fair value of goodwill could cause the Company to consider some portion or all of the goodwill of the Tech-focused reporting unit to become impaired. In addition, a future decline in the overall market conditions, uncertainty related to COVID-19, political instability, and/or changes in the Company's market share could negatively impact the estimated future cash flows and discount rates used to determine the fair value of the reporting unit and could result in an impairment charge in the foreseeable future. The determination of whether or not goodwill has become impaired is judgmental in nature and requires the use of estimates and key assumptions, particularly assumed discount rates and projections of future operating results, such as forecasted revenues and earnings before interest, taxes, depreciation and amortization margins and capital expenditure requirements. Fair values are determined by using a combination of a discounted cash flow methodology and a market comparable method. The discounted cash flow methodology is based on projections of the amounts and timing of future revenues and cash flows, assumed discount rates and other assumptions as deemed appropriate. We consider factors such as historical performance, anticipated market conditions, operating expense trends and capital expenditure requirements. Additionally, the discounted cash flows analysis takes into consideration cash expenditures for product development, other technological updates and advancements to our websites and investments to improve our candidate databases. The market comparable method indicates the fair value of a business by comparing it to publicly traded companies in similar lines of business or to comparable transactions or assets. Considerations for factors such as size, growth, profitability, risk and return on investment are analyzed and compared to the comparable businesses and adjustments are made. A market value of invested capital of the publicly traded companies is calculated and then applied to the entity's operating results to arrive at an estimate of value. Changes in our strategy and/or market conditions could significantly impact these judgments and require adjustments to recorded amounts of goodwill.
Intangible assets acquired with an indefinite useful life
The indefinite-lived acquired intangible assets include the Dice trademarks and brand name. The Dice trademark, trade name and domain name is one of the most recognized names of online technology recruiting and career development. Since Dice's inception in 1991, the brand has been recognized as a leader in recruiting and career development services for technology and engineering professionals. Currently, the brand is synonymous with the most specialized online marketplace for industry-specific technologists. The brand has a significant online and offline presence in online recruiting and career development services. Considering the recognition and the awareness of the Dice brand in the talent acquisition and staffing services market, Dice's long operating history and the intended use of the Dice brand, the remaining useful life of the Dice trademark, trade name and domain name was determined to be indefinite. We determine whether the carrying value of recorded indefinite-lived acquired intangible asset is impaired on an annual basis or more frequently if indicators of potential impairment exist. The impairment review process is performed onOctober 1 of each year and compares the fair value of the indefinite-lived acquired intangible asset to its carrying value. If the carrying value exceeds the fair value, an impairment loss is recorded. The impairment test performed as ofOctober 1, 2021 resulted in the fair value of the Dice trademarks and brand name exceeding the carrying value by 32%. 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 theMarch 31, 2020 analysis. As a result, the Company performed an interim impairment analysis as ofSeptember 30, 2020 , which resulted in the Company recording an additional impairment charge of$8.0 million during the three month period endedSeptember 30, 2020 . 34 -------------------------------------------------------------------------------- Table of Contents Revenues attributable to the Dice trademarks and brand name for the fourth quarter of 2021 and estimated future results as ofDecember 31, 2021 have exceeded the projections used in theOctober 1, 2021 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 ofDecember 31, 2021 . Therefore, no quantitative impairment test was performed as ofDecember 31, 2021 . No impairment was recorded during the years endedDecember 31, 2021 and 2019. The projections utilized in theOctober 1, 2021 analysis included increasing revenues at rates approximating industry growth projections. The Company's ability to achieve these revenue projections may be impacted by, among other things, uncertainty related to COVID-19, competition in the technology recruiting market, challenges in developing and introducing new products and product enhancements to the market and the Company's ability to attribute value delivered to customers. TheOctober 1, 2021 analysis included operating margins during the year endingDecember 31, 2021 that approximate operating margins for the year endedDecember 31, 2020 and then increasing modestly. If future cash flows that are attributable to the Dice trademarks and brand name are not achieved, the Company could realize an impairment in a future period. The Company's operating results attributable to the Dice trademarks and brand name throughDecember 31, 2021 and projections of future results have met or exceeded those included in the projections utilized in theOctober 1, 2021 analysis. In theOctober 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%. 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. Fair values are determined using a profit allocation methodology which estimates the value of the trademark and brand name by capitalizing the profits saved because the company owns the asset. We consider factors such as historical performance, anticipated market conditions, operating expense trends and capital expenditure requirements. Changes in our strategy, uncertainty related to COVID-19, and/or changes in market conditions could significantly impact these judgments and require adjustments to recorded amounts of intangible assets. If projections are not achieved, the Company could realize an impairment in the foreseeable future.
Income taxes
We utilize the asset and liability method of accounting for income taxes. Under this method, deferred income taxes are recognized for differences between the financial statement and tax bases of assets and liabilities at enacted statutory tax rates in effect for the years in which the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. The calculation of our tax liabilities involves dealing with uncertainties in applying tax laws and regulations in numerous jurisdictions. Tax benefits from uncertain tax positions are recognized when it is more likely than not that the positions will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. 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.
Cyclicity
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.
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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.
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Results of Operations
Our historical financial information discussed in this Annual Report has been
derived from the Company's financial statements and accounting records for the
years ended December 31, 2021 , 2020 and 2019. Consolidated operating results in
dollars and as a percent of revenue follows:
For the year ended December 31,
(in thousands) 2021 2020 2019 2021 vs 2020 2020 vs 2019
Revenues $ 119,903 $ 111,167 $ 117,272 $ 8,736 $ (6,105)
Operating expenses:
Cost of revenues 15,088 14,286 13,533 802 753
Product development 16,020 14,887 14,703 1,133 184
Sales and marketing 43,701 39,693 42,702 4,008 (3,009)
General and administrative 28,583 26,625 25,827 1,958 798
Depreciation 16,344 10,259 8,428 6,085 1,831
Impairment of intangible assets - 15,200 - (15,200) 15,200
Impairment of goodwill - 22,607 - (22,607) 22,607
Impairment of right-of-use asset 1,919 - - 1,919 -
Disposition related and other costs - - 1,414 - (1,414)
Total operating expenses 121,655 143,557 106,607 (21,902) 36,950
Loss on sale of business $ - $ - $ (537) - 537
Operating income (loss) $ (1,752) $ (32,390) $ 10,128 $ 30,638 $ (42,518)
For the year ended December 31,
2021 2020 2019
Revenues 100.0% 100.0% 100.0%
Operating expenses:
Cost of revenues 12.6 % 12.9 % 11.5 %
Product development 13.4 % 13.4 % 12.5 %
Sales and marketing 36.4 % 35.7 % 36.4 %
General and administrative 23.8 % 24.0 % 22.0 %
Depreciation 13.6 %
9.2% 7.2%
Impairment of intangible assets - %
13.7% – %
Impairment of goodwill - %
20.3% – %
Impairment of right-of-use asset 1.6 %
– % – %
Disposition related and other costs - % - % 1.2 %
Total operating expenses 101.5 % 129.1 % 90.9 %
Loss on sale of business - % - % 0.5 %
Operating income (loss) (1.5) % (29.1) % 8.6 %
37
-------------------------------------------------------------------------------- Table of Contents Comparison of Years EndedDecember 31, 2021 and 2020 Revenues Year Ended December 31, Percent 2021 2020 Increase (Decrease) Change (in thousands, except percentages) Tech-focused Dice(1)$ 86,257 $ 82,190 $ 4,067 4.9 % ClearanceJobs 33,646 28,977 4,669 16.1 % Total revenues$ 119,903 $ 111,167 $
8,736 7.9%
(1) Includes dice and career events.
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 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. Revenues for ClearanceJobs increased by$4.7 million , or 16.1%, as compared to the same period of 2020, driven by continued high demand for professionals with government clearance and consistent product releases and enhancements driving activity on the site. Cost of Revenues Year Ended December 31, Percent 2021 2020 Increase Change (in thousands, except percentages) Cost of revenues$ 15,088 $ 14,286 $ 802 5.6 % Percentage of revenues 12.6 % 12.9 % 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.
Product development expenses
Year Ended December 31, Percent
2021 2020 Increase Change
(in thousands, except percentages)
Product development $ 16,020 $ 14,887 $ 1,133 7.6 %
Percentage of revenues 13.4 % 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 .
Sales and marketing expenses
Year Ended December 31, Percent
2021 2020 Increase Change
(in thousands, except percentages)
Sales and marketing $ 43,701 $ 39,693 $ 4,008 10.1 %
Percentage of revenues 36.4 % 35.7 %
Sales and marketing expenses increased $4.0 million , or 10.1%, from the same
period in 2020. 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.
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General and Administrative Expenses
Year Ended December 31, Percent
2021 2020 Increase Change
(in thousands, except percentages)
General and administrative $ 28,583 $ 26,625 $ 1,958 7.4 %
Percentage of revenues 23.8 % 24.0 %
General and administrative expenses increased
Depreciation
Year Ended December 31, Percent
2021 2020 Increase Change
(in thousands, except percentages)
Depreciation $ 16,344 $ 10,259 $ 6,085 59.3 %
Percentage of revenues 13.6 % 9.2 %
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, Percent
2021 2020 Decrease Change
(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
Year Ended December 31, Percent
2021 2020 Decrease Change
(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 the right of use
Year Ended December 31, Percent
2021 2020 Increase Change
(in thousands, except percentages)
Impairment of right-of-use asset $ 1,919 $ - $ 1,919 - %
Percentage of revenues 1.6 % - %
39
-------------------------------------------------------------------------------- Table of Contents 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$1.9 million during the third quarter of 2021. Operating Income (Loss) Year Ended December 31, Percent 2021 2020 Increase Change (in thousands, except percentages) Revenue$ 119,903 $ 111,167 $ 8,736 7.9 % Operating income (loss) (1,752) (32,390)$ 30,638 (94.6) % Percentages of revenues (1.5) % (29.1) % Operating loss for the year endedDecember 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.
Result of the equity method
Year Ended December 31, Percent
2021 2020 Increase Change
(in thousands, except percentages)
Income from equity method investment $ 190 $ - $ 190 - %
Percentage of revenues 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, Percent
2021 2020 Decrease Change
(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 .
Impairment of investment
Year Ended December 31, Percent
2021 2020 Decrease Change
(in thousands, except percentages)
Impairment of investment $ - $ 2,002 $ (2,002) (100.0) %
Percentage of revenues - % 1.8 %
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.
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Gain on investment
Year Ended December 31, Percent
2021 2020 Increase Change
(in thousands, except percentages)
Gain on investment $ 1,198 $ - $ 1,198 - %
Percentage of revenues 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. The Company
sold 100% of this investment during the third quarter of 2021. See also Note 8
of the notes to consolidated financial statements.
Income Taxes
Year Ended December 31,
2021 2020
(in thousands, except
percentages)
Loss before income taxes $ (1,031) $ (35,223)
Income tax benefit (629) (2,826)
Effective tax rate 61.0 % 8.0 %
A reconciliation between the tax benefit at the federal statutory rate and the reported tax benefit is summarized as follows:
Year Ended December 31,
2021 2020
Federal statutory rate $ (216) $ (7,397)
Gain on sale of businesses or investments (251) (42)
Stock-based compensation (84) 432
Nondeductible impairment - 5,029
State tax expense (benefit), net of federal effect 110 (514)
Change in accrual for unrecognized tax benefits (155) (216)
Executive compensation 541 323
Research and development tax credits (478) (530)
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; nondeductible impairment charges;
state tax benefits; and tax credits for research and development.
Profit (loss) from discontinued operations, net of tax
For the year ended December 31, Percent
2021 2020 Decrease Change
(in thousands, except percentages)
Income (loss) from discontinued operations,
net of tax $ (29,340) $ 2,382 $ (31,722) (1,332) %
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 accounted for it as a discontinued operation. As a result, the Company recorded a loss from discontinued operations, net of tax,
41 -------------------------------------------------------------------------------- Table of Contents 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 endedDecember 31, 2020 represents eFC's earnings during the period.
Earnings per share
Year Ended December 31,
2021 2020
(in thousands, except
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)
Weighted-average shares outstanding - diluted 46,333 48,278
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.
Comparison of completed exercises
Revenues
Year Ended December 31, Percent
2020 2019 Increase (Decrease) Change
(in thousands, except percentages)
Tech-focused:
Dice(1) $ 82,190 $ 92,527 $ (10,337) (11.2) %
ClearanceJobs 28,977 24,745 4,232 17.1 %
Total revenues $ 111,167 $ 117,272 $
(6,105) (5.2)%
(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. Revenues for ClearanceJobs increased by$4.2 million , or 17.1%, as compared to the same period of 2019, driven by continued high demand for professionals with government clearance and consistent product releases and enhancements driving activity on the site. Cost of Revenues Year Ended December 31, Percent 2020 2019 Increase Change (in thousands, except percentages) Cost of revenues$ 14,286 $ 13,533 $ 753 5.6 % Percentage of revenues 12.9 % 11.5 % 42
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Table of Contents Revenue cost increased by
Product development expenses
Year Ended December 31, Percent
2020 2019 Increase Change
(in thousands, except percentages)
Product development $ 14,887 $ 14,703 $ 184 1.3 %
Percentage of revenues 13.4 % 12.5 %
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 .
Sales and marketing expenses
Year Ended December 31, Percent
2020 2019 Decrease Change
(in thousands, except percentages)
Sales and marketing $ 39,693 $ 42,702 $ (3,009) (7.0) %
Percentage of revenues 35.7 % 36.4 %
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.
General and administrative expenses
Year Ended December 31, Percent
2020 2019 Increase Change
(in thousands, except percentages)
General and administrative $ 26,625 $ 25,827 $ 798 3.1 %
Percentage of revenues 24.0 % 22.0 %
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.
Depreciation
Year Ended December 31, Percent
2020 2019 Increase Change
(in thousands, except percentages)
Depreciation $ 10,259 $ 8,428 $ 1,831 21.7 %
Percentage of revenues 9.2 % 7.2 %
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.
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Impairment of intangible assets
Year Ended December 31, Percent
2020 2019 Increase Change
(in thousands, except percentages)
Impairment of intangible assets $ 15,200 $ - $ 15,200 - %
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, due
to the impacts of the COVID-19 pandemic, the Company performed interim
impairment analyses of the Dice trademarks and brand name. As a result of the
analyses, the Company recorded impairment charges totaling $15.2 million during
the three month periods ended March 31, 2020 and September 30, 2020 . See also
Note 10 of the notes to consolidated financial statements.
Impairment of goodwill
Year Ended December 31, Percent
2020 2019 Increase Change
(in thousands, except percentages)
Impairment of goodwill $ 22,607 $ - $ 22,607 - %
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 . See also Note 11 of
the notes to consolidated financial statements.
Disposal and other costs
Year Ended December 31, Percent
2020 2019 Decrease Change
(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, Percent
2020 2019 Decrease Change
(in thousands, except percentages)
Loss on sale of business $ - $ 537 $ (537) (100.0) %
Percentage of revenues - % 0.5 %
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.
Operating Income (Loss)
Year Ended December 31, Percent
2020 2019 Increase (Decrease) Change
(in thousands, except percentages)
Revenue $ 111,167 $ 117,272 $ (6,105) (5.2) %
Operating income (loss) $ (32,390) $ 10,128 $ (42,518) (419.8) %
Percentage of revenues (29.1) % 8.6 %
44
-------------------------------------------------------------------------------- Table of Contents Operating loss for the year endedDecember 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$1.4 million in the 2019 period. Interest Expense and Other Year Ended December 31, Percent 2020 2019 Decrease Change (in thousands, except percentages) Interest expense$ 831 $ 703 $ 128 18.2 % Percentage of revenues 0.7 % 0.6 % 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 endedDecember 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$0.2 million gain recognized in the second quarter of 2020 on the sale of the Company's 20% interest inBioSpace . Impairment of Investment Year Ended December 31, Percent 2020 2019 Increase Change (in thousands, except percentages) Impairment of investment$ 2,002 $ -$ 2,002 - % Percentage of revenues 1.8 % - % 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$2.0 million during the first quarter of 2020. Income Taxes Year Ended December 31, 2020 2019 (in thousands, except percentages) Income (loss) before income taxes$ (35,223) $ 9,425 Income tax expense (benefit) (2,826) 2,794 Effective tax rate 8.0 % 29.6 %
A reconciliation between the federal statutory tax expense (benefit) and the reported income tax expense (benefit) is summarized as follows:
Year Ended December 31,
2020 2019
Federal statutory rate $ (7,397) $ 1,979
Loss (gain) on sale of businesses or investments (42) 84
Stock-based compensation 432 281
Nondeductible impairment 5,029 -
State tax expense (benefit), net of federal effect (514)
405
Change in accrual for unrecognized tax benefits (216)
209
Executive compensation 323
147
Research and development tax credits (530) (558) Other 89 247 Income tax expense (benefit)$ (2,826) $ 2,794 45
-------------------------------------------------------------------------------- Table of Contents Our effective income tax rate was 8.0% and 29.6% for the years endedDecember 31, 2020 and 2019, respectively. The 2020 tax rate differed from the federal statutory rate primarily because of tax deficiencies in stock-based compensation; nondeductible impairment charges; state tax benefits; and tax credits for research and development. The 2019 tax rate differed from the federal statutory rate primarily because of tax deficiencies in stock-based compensation; state tax expense; and tax credits for research and development.
Earnings (loss) per share
Year Ended December 31,
2020 2019
(in thousands, except
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
Weighted-average shares outstanding-diluted 48,278 51,633
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.
Cash and capital resources
Non-GAAP Financial Measures
We have provided certain non-GAAP financial information as additional measures for our operating results. These measures are not in accordance with, or an alternative for, measures in accordance withU.S. GAAP and may be different from similarly titled non-GAAP measures reported by other companies. We believe the presentation of non-GAAP measures, such as Adjusted EBITDA and Adjusted EBITDA margin, provides useful information to management and investors regarding certain financial and business trends relating to our financial condition and results of operations.
Adjusted EBITDA and Adjusted EBITDA margin
Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP metrics used by
management to measure operating performance. Management uses Adjusted EBITDA as
a performance measure for internal monitoring and planning, including
preparation of annual budgets, analyzing investment decisions and evaluating
profitability and performance comparisons between us and our competitors. The
Company also uses this measure to calculate amounts of performance based
compensation under the senior management incentive bonus program. Adjusted
EBITDA represents net income plus (to the extent deducted in calculating such
net income) interest expense, income tax expense, depreciation and amortization,
non-cash stock based compensation, losses resulting from certain dispositions
outside the ordinary course of business, 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
46
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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. 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;
and
•Other companies in our industry may calculate Adjusted EBITDA differently than
we do, limiting its 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.
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A reconciliation of Adjusted EBITDA for the years ended December 31, 2021 , 2020
and 2019 follows (in thousands):
Year
Ended
2021 2020 2019 Reconciliation of Net Income (loss) to Adjusted EBITDA: Net income (loss)$ (29,742) $ (30,015) $ 12,551 Interest expense 748 1,031 703 Income tax expense (benefit) (629) (2,826) 2,794 Depreciation 16,344 10,259 8,428 Non-cash stock based compensation 7,681 5,764 5,145 Loss on sale of business - - 537 Income from equity method investment (190) - - Disposition related and other costs - - 1,414 Impairment of intangible assets - 15,200 - Impairment of goodwill - 22,607 - Impairment of investment - 2,002 - Impairment of right-of-use asset 1,919 - - Gain on investments (1,198) (200) - Legal contingencies and related fees - - 123 Severance and related costs 1,969 1,194 -
Loss (income) on discontinued operations, net of tax 29,340
(2,382) (5,920) Other (80) - 1 Adjusted EBITDA$ 26,162 $ 22,634 $ 25,776
Reconciliation of cash flow from operations and adjusted EBITDA: net cash flow from operating activities
$ 28,581 $ 18,683 $ 22,923 Interest expense 748 1,031 703 Amortization of deferred financing costs (147) (147) (147) Income tax expense (benefit) (629) (2,826) 2,794 Deferred income taxes 569 2,918 (2,493) Change in accrual for unrecognized tax benefits 156 446 (107) Change in accounts receivable 1,102 (859) (1,694) Change in deferred revenue (10,075) 8,193 4,583 Disposition related and other costs - - 1,414 Legal contingencies and related fees - - 123 Discontinued operations results (3,593) (7,290) (9,083) Severance and related costs 1,969 1,194 - Changes in working capital and other 7,481 1,291 6,760 Adjusted EBITDA$ 26,162
A reconciliation of adjusted EBITDA margin for the years ended
Year Ended December 31,
2021 2020 2019
Revenues $ 119,903 $ 111,167 $ 117,272
Adjusted EBITDA $ 26,162 $ 22,634 $ 25,776
Adjusted EBITDA Margin 22 % 20 % 22 %
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-------------------------------------------------------------------------------- Table of Contents Cash Flows
We have summarized our cash flows for the years ended
Year Ended December 31,
2021 2020 2019
Cash flow from operating activities
Cash flows used in investing activities (19,304) (15,904) (11,505) Cash flows used in financing activities (15,387) (542) (12,423)
We have financed our operations primarily through cash provided by operating activities and borrowings under our revolving credit facility. AtDecember 31, 2021 , we had cash of$1.5 million compared to$4.5 million atDecember 31, 2020 .
Liquidity
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$67.0 million in borrowing capacity under our$90.0 million Credit Agreement atDecember 31, 2021 , subject to certain availability limits including our consolidated leverage ratio, which generally limits borrowings to 2.5 times annual adjusted EBITDA levels, as defined in the Credit Agreement. We believe that our existing 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 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.
Comparison of completed exercises
Operational 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. Net cash flows from operating activities were$28.6 million and$18.7 million for the years endedDecember 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 endedDecember 31, 2021 increased primarily due to strong billings to and collections from customers.
Investing activities
During the year endedDecember 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 endedDecember 31, 2020 . Cash used in investing activities during the year endedDecember 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.
Fundraising activities
Cash used in financing activities during the year endedDecember 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 endedDecember 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. 49
-------------------------------------------------------------------------------- Table of Contents Comparison of Years EndedDecember 31, 2020 and 2019
Operational activities
Net cash flows from operating activities primarily consist 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$18.7 million and$22.9 million for the years endedDecember 31, 2020 and 2019, respectively, a decrease of$4.2 million . Cash inflow from operations is driven by earnings and is dependent on the amount and timing of billings and cash collection from our customers. Cash provided by operating activities during the year endedDecember 31, 2020 decreased primarily due to lower billings to customers resulting from the COVID-19 pandemic, partially offset by cost savings implemented by the Company in response to the COVID-19 pandemic.
Investing activities
During the year endedDecember 31, 2020 , cash used in investing activities was$15.9 million compared to$11.5 million of cash used in investing activities during the year endedDecember 31, 2019 . Cash used by investing activities during the year endedDecember 31, 2020 increased from the comparable 2019 period due to higher capitalization of internally developed software of$1.9 million and$2.5 million lower receipts from the sale of businesses and equity investments. Financing Activities Cash used in financing activities during the year endedDecember 31, 2020 was$0.5 million primarily due to$10.0 million of net borrowings on long-term debt and$10.5 million of repurchases of common stock. Cash used during the year endedDecember 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.
Financing and capital requirements
credit agreement
We have a$90 million revolving credit facility, which maturesNovember 2023 , with$23 million of borrowings on the facility atDecember 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 aLondon Interbank Offered Rate ("LIBOR") rate or a base rate, plus a margin. Assuming an interest rate of 1.88% (the rate in effect onDecember 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. As ofDecember 31, 2021 , 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. "Quantitative and Qualitative Disclosures about Market Risk - Interest Rate Risk."
Contractual obligations
The Company has operating leases for corporate office space and certain equipment. The leases have terms from one year to eight years, some of which include options to renew the lease, and are included in the lease term when it is reasonably certain that the Company will exercise the option. No leases include options to purchase the leased property. As ofDecember 31 , the value of our obligations under operating leases was$6.9 million . See note 7 to consolidated financial statements for further information. We make commitments to purchase advertising from online vendors, which we pay for on a monthly basis. We have no significant long-term obligations to purchase a fixed or minimum amount with these vendors.
Other capital needs
As ofDecember 31, 2021 , we recorded approximately$0.8 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 atDecember 31, 2021 are$0.8 million of tax benefits that would affect the effective tax rate if recognized. The Company believes 50 -------------------------------------------------------------------------------- Table of Contents 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. During the year endedDecember 31, 2021 , the Company repurchased 3.9 million shares for$15.3 million . As ofDecember 31, 2021 , the value of shares available to be purchased under the current plan was$5.8 million . 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. We anticipate capital expenditures in 2022 to be approximately$16 million to$19 million . The increase over prior periods is due to the additional investments in the development of new products and features. We intend to use operating cash flows to fund capital expenditures.
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.
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