The following dialogue needs to be learn at the side of our consolidated
monetary statements and the associated notes included elsewhere on this Annual
Report. Certain statements we make underneath this Item 7 represent “Forward-Looking
Statements” underneath the Private Securities Litigation Reform Act of 1995. See additionally
“Note Concerning Forward-Looking Statements.”
You ought to remember that any forward-looking assertion made by us herein, or
elsewhere, speaks solely as of the date on which it’s made. New dangers and
uncertainties come up every now and then, and it’s inconceivable to foretell these
occasions or how they might have an effect on us. We haven’t any obligation to replace any
forward-looking statements after the date hereof, besides as required by federal
securities legislation.
Overview
We are a supplier of software program merchandise, on-line instruments and providers that ship
profession marketplaces to candidates and employers within the United States. DHI’s
manufacturers, Dice and ClearanceJobs, allow recruiters and hiring managers to
effectively search, match and join with extremely expert technologists in
specialised fields, notably know-how and energetic authorities safety
clearance. Professionals discover supreme employment alternatives, related job
recommendation and personalised information that assist handle their technologists’ lives.
In on-line recruitment, we focus on employment classes through which there has
been a long-term shortage of extremely expert, extremely certified professionals
relative to market demand, particularly technologists who work in a range of
industries or have energetic authorities safety clearances. Our web sites function
on-line two-sided marketplaces the place employers and recruiters supply and join
with potential staff, and the place technologists discover related job
alternatives, information and data to additional their careers. Our web sites supply
job postings, information and content material, profession improvement and recruiting providers
tailor-made to the precise wants of the skilled neighborhood that every web site
serves.
Majority possession and management of DHI’s eFinancialCareers (“eFC”) enterprise,
which gives profession web sites to the monetary providers {industry} and has
operations within the United Kingdom, Continental Europe, Asia, the Middle East and
North America, was transferred to eFC administration on June 30, 2021. The Company
retained a 40% widespread share curiosity. As a consequence, all ongoing DHI operations,
which embrace the Dice and ClearanceJobs manufacturers, are within the United States
subsequent to June 30, 2021.
We have been within the recruiting and profession improvement enterprise for over 30
years. Based on our working construction, we’ve got recognized one reportable
phase, Tech-focused, which incorporates the Dice and ClearanceJobs companies and
company associated prices. The Dice and ClearanceJobs companies and company
associated prices are aggregated into the Tech-focused reportable phase primarily
as a result of the Company doesn’t have discrete monetary data for these
manufacturers or prices. As a consequence of the eFC separation, the eFC enterprise was
deconsolidated from the Company’s consolidated monetary statements as of June
30, 2021 and is mirrored as a discontinued operation.
Our Revenues and Expenses
We derive the bulk of our revenues from prospects who pay charges, both
yearly, quarterly or month-to-month, to submit jobs on our web sites and to entry our
searchable databases of resumes. Our charges differ by buyer based mostly on the quantity
of particular person customers of our databases of resumes, the quantity and sort of job
postings and profile views bought and the phrases of the packages bought.
Our Company sells recruitment packages that may embrace entry to our databases
of resumes and job posting capabilities. We consider the important thing metrics which might be
materials to an evaluation of our companies are our complete quantity of Dice and
ClearanceJobs recruitment package deal prospects and the income, on common, that
these prospects generate. The tables beneath element this buyer information.
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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 recruitment package deal buyer income by the day by day common rely of recruitment package deal prospects throughout every month,
adjusted to replicate a thirty day month. The easy common of every month is used to derive the quantity for every interval.
Dice had 6,004 recruitment package deal prospects as of December 31, 2021, which was
a rise of 854, or 17%, 12 months over 12 months and common income per recruitment
package deal buyer for Dice elevated for the 12 months ended December 31, 2021. The
will increase have been pushed by robust renewal charges and new enterprise exercise.
ClearanceJobs had 1,878 recruitment package deal prospects as of December 31, 2021
in comparison with 1,718 as of December 31, 2020, a rise of 9%, and common
income per recruitment package deal buyer elevated. The will increase for
ClearanceJobs have been as a result of continued excessive demand for professionals with
authorities clearance and constant product releases and enhancements driving
exercise on the location.
Deferred income, as proven on the consolidated stability sheets, displays buyer
billings made prematurely of providers being rendered. Backlog consists of
deferred income plus buyer contractual commitments not invoiced representing
the worth of future providers to be rendered underneath dedicated contracts. We
consider backlog to be an vital measure of our enterprise because it represents our
means to generate future income. A abstract of our deferred income and
backlog is as follows:
Summary of Deferred Revenue and
Backlog: December 31, 2021
December 31, 2020 Decrease Percent Change
(in 1000’s, besides 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) Backlog consists of deferred income plus buyer contractual commitments not invoiced representing the worth of future
providers to be rendered underneath dedicated contracts.
Backlog at December 31, 2021 elevated $28.2 million from December 31, 2020 due
to the robust know-how recruitment market driving bookings progress for each
Dice and ClearanceJobs, investments in product, gross sales and advertising and a spotlight
on signing multi-year contracts.
To a lesser extent, we additionally generate income from promoting on our varied
web sites or from lead era and advertising options offered to our
prospects. Advertisements embrace varied varieties of wealthy media and banner
promoting, textual content hyperlinks, sponsorships, and customized content material advertising options.
Lead era data makes use of promoting and different strategies to ship
results in a buyer.
The Company continues to evolve and develop new software program merchandise and options
to draw and have interaction certified professionals and match them with employers. Our
means to develop our revenues will largely rely on our means to develop our
buyer bases within the markets through which we function by buying new prospects
whereas retaining a excessive proportion of the shoppers we at the moment serve, and to
broaden the breadth of providers our prospects buy from us. We proceed to
make investments in our enterprise and infrastructure to assist us obtain our
long-term progress aims, such because the revolutionary merchandise within the desk beneath.
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Product Releases
2021 2020
Dice Marketplace, Dice TalentSearch Social Data
Dice IntelliSearch-Based Job Alerts, 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-Serve BrandAmp, ClearanceJobs
Improvements
Candidate Search and ClearanceJobs Broadcast
Message upgrades
Other materials components which will have an effect on our outcomes of operations embrace our
means to draw certified professionals that change into engaged with our web sites
and our means to draw prospects with related job alternatives. The extra
certified professionals that use our web sites, the extra engaging our web sites
change into to employers and advertisers, which in flip makes them extra prone to
change into our prospects, positively impacting our outcomes of operations. If we’re
unable to proceed to draw certified professionals to have interaction with our
web sites, our prospects could not discover our providers engaging, which might
have a adverse influence on our outcomes of operations. Additionally, we have to
make sure that our web sites stay related so as to appeal to certified
professionals to our web sites and to have interaction them in high-value duties, akin to
posting resumes and making use of to jobs.
The largest elements of our bills are personnel prices and advertising and
gross sales expenditures. Personnel prices consist of salaries, advantages, and incentive
compensation for our staff, together with commissions for salespeople. Personnel
prices are categorized in our assertion of operations based mostly on every worker’s
principal operate. Marketing expenditures primarily consist of on-line
promoting, model promotion and lead era to employers and job seekers.
Critical Accounting Estimates
This dialogue of our monetary situation and outcomes of operations is predicated
upon our consolidated monetary statements, which have been ready in
accordance with U.S. GAAP. The preparation of these monetary statements
requires us to make estimates, judgments and assumptions that have an effect on the
reported quantity of property, liabilities, revenues and bills and associated
disclosure of contingent property and liabilities. We consider our estimates,
together with our crucial accounting estimates, on an ongoing foundation. We based mostly our
estimates of the carrying worth of sure property and liabilities on historic
expertise and on varied different assumptions that we consider are cheap. In
many circumstances, we might fairly have used completely different accounting insurance policies and
estimates. In some circumstances, adjustments within the accounting estimates are fairly
prone to happen from interval to interval. Our precise outcomes could differ from these
estimates underneath completely different assumptions or circumstances. We consider the next
crucial accounting estimates have an effect on our extra vital judgments used within the
preparation of our consolidated monetary statements.
Goodwill
We report goodwill when the acquisition value paid for an acquisition exceeds the
estimated honest worth of the web recognized tangible and intangible property
acquired.
We decide whether or not the carrying worth of recorded goodwill is impaired on an
annual foundation or extra ceaselessly if indicators of potential impairment exist. In
testing goodwill for impairment, a qualitative evaluation may be carried out and
whether it is decided that the honest worth of the reporting unit is extra doubtless
than not lower than the carrying quantity, the impairment evaluate course of compares
the honest worth of the reporting unit through which the goodwill resides to the
carrying worth of that reporting unit. If the honest worth of the reporting unit
is lower than its carrying quantity, an impairment cost is recorded for the
quantity the carrying worth exceeds the honest worth. Our annual impairment take a look at for
goodwill is carried out on October 1 of every year.
The annual impairment take a look at for the Tech-focused reporting unit carried out as of
October 1, 2021 resulted within the honest worth of the reporting unit being
considerably in extra of the carrying worth with honest worth exceeding the
carrying worth by 100%. During the third quarter of 2020, the impacts of the
COVID-19 pandemic continued and the Company’s projected earnings and money flows
for the Tech-focused reporting unit declined as in comparison with the projections used
within the March 31, 2020 evaluation. As a consequence, the Company carried out an interim
impairment evaluation as of September 30, 2020, which resulted within the Company
recording an impairment cost of $23.6 million throughout the three month interval
ended September 30, 2020.
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Results for the Tech-focused reporting unit for the fourth quarter of 2021 and
estimated future outcomes as of December 31, 2021 have exceeded the projections
used within the October 1, 2021 evaluation. As a consequence, the Company believes it’s
no more doubtless than not that the honest worth of the reporting unit is lower than
the carrying worth as of December 31, 2021. Therefore, no quantitative
impairment take a look at was carried out as of December 31, 2021. No impairment was
recorded throughout the years ended December 31, 2021 and 2019.
The quantity of goodwill as of December 31, 2021 allotted to the Tech-focused
reporting unit was $128.1 million. The low cost price utilized for the
Tech-focused reporting unit within the October 1, 2021 evaluation was 11.5%. An
improve to the low cost price utilized or reductions to future projected
working outcomes might end in future impairment of the Tech-focused
reporting unit’s goodwill. It within reason potential that adjustments in judgments,
assumptions and estimates the Company made in assessing the honest worth of
goodwill might trigger the Company to think about some portion or all of the goodwill
of the Tech-focused reporting unit to change into impaired. In addition, a future
decline within the general market circumstances, uncertainty associated to COVID-19,
political instability, and/or adjustments within the Company’s market share might
negatively influence the estimated future money flows and low cost charges used to
decide the honest worth of the reporting unit and might end in an impairment
cost within the foreseeable future.
The willpower of whether or not or not goodwill has change into impaired is judgmental
in nature and requires the use of estimates and key assumptions, notably
assumed low cost charges and projections of future working outcomes, akin to
forecasted revenues and earnings earlier than curiosity, taxes, depreciation and
amortization margins and capital expenditure necessities. Fair values are
decided through the use of a mixture of a reduced money movement methodology and a
market comparable methodology. The discounted money movement methodology is predicated on
projections of the quantities and timing of future revenues and money flows, assumed
low cost charges and different assumptions as deemed applicable. We think about components
akin to historic efficiency, anticipated market circumstances, working expense
developments and capital expenditure necessities. Additionally, the discounted money
flows evaluation takes into consideration money expenditures for product
improvement, different technological updates and developments to our web sites and
investments to enhance our candidate databases. The market comparable methodology
signifies the honest worth of a enterprise by evaluating it to publicly traded
corporations in related strains of enterprise or to comparable transactions or property.
Considerations for components akin to measurement, progress, profitability, danger and return
on funding are analyzed and in comparison with the comparable companies and
changes are made. A market worth of invested capital of the publicly traded
corporations is calculated and then utilized to the entity’s working outcomes to
arrive at an estimate of worth. Changes in our technique and/or market circumstances
might considerably influence these judgments and require changes to recorded
quantities of goodwill.
Indefinite-Lived Acquired Intangible Assets
The indefinite-lived acquired intangible property embrace the Dice emblems and
model identify. The Dice trademark, commerce identify and area identify is one of probably the most
acknowledged names of on-line know-how recruiting and profession improvement. Since
Dice’s inception in 1991, the model has been acknowledged as a frontrunner in
recruiting and profession improvement providers for know-how and engineering
professionals. Currently, the model is synonymous with probably the most specialised
on-line market for industry-specific technologists. The model has a
vital on-line and offline presence in on-line recruiting and profession
improvement providers. Considering the popularity and the attention of the Dice
model within the expertise acquisition and staffing providers market, Dice’s lengthy
working historical past and the meant use of the Dice model, the remaining helpful
life of the Dice trademark, commerce identify and area identify was decided to be
indefinite.
We decide whether or not the carrying worth of recorded indefinite-lived acquired
intangible asset is impaired on an annual foundation or extra ceaselessly if indicators
of potential impairment exist. The impairment evaluate course of is carried out on
October 1 of every year and compares the honest worth of the indefinite-lived
acquired intangible asset to its carrying worth. If the carrying worth exceeds
the honest worth, an impairment loss is recorded. The impairment take a look at carried out as
of October 1, 2021 resulted within the honest worth of the Dice emblems and model
identify exceeding the carrying worth by 32%. During the primary quarter of 2020,
as a result of of the preliminary impacts of the COVID-19 pandemic and its potential influence
on future earnings and money flows which might be attributable to the Dice emblems
and model identify, the Company carried out an interim impairment evaluation. As a
consequence of the evaluation, the Company recorded an impairment cost of $7.2
million throughout 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 money flows which might be attributable to the Dice emblems and model identify
declined as in comparison with the projections used within the March 31, 2020 evaluation. As
a consequence, the Company carried out an interim impairment evaluation as of September
30, 2020, which resulted within the Company recording an extra impairment
cost of $8.0 million throughout the three month interval ended September 30, 2020.
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Revenues attributable to the Dice emblems and model identify for the fourth
quarter of 2021 and estimated future outcomes as of December 31, 2021 have
exceeded the projections used within the October 1, 2021 evaluation. As a consequence, the
Company believes it’s not extra doubtless than not that the honest worth of the Dice
emblems and model identify is lower than the carrying worth as of December 31,
2021. Therefore, no quantitative impairment take a look at was carried out as of December
31, 2021. No impairment was recorded throughout the years ended December 31, 2021
and 2019.
The projections utilized within the October 1, 2021 evaluation included rising
revenues at charges approximating {industry} progress projections. The Company’s
means to attain these income projections could also be impacted by, amongst different
issues, uncertainty associated to COVID-19, competitors within the know-how
recruiting market, challenges in creating and introducing new merchandise and
product enhancements to the market and the Company’s means to attribute worth
delivered to prospects. The October 1, 2021 evaluation included working margins
throughout the 12 months ending December 31, 2021 that approximate working margins for
the 12 months ended December 31, 2020 and then rising modestly. If future money
flows which might be attributable to the Dice emblems and model identify will not be
achieved, the Company might notice an impairment in a future interval. The
Company’s working outcomes attributable to the Dice emblems and model identify
by means of December 31, 2021 and projections of future outcomes have met or exceeded
these included within the projections utilized within the October 1, 2021 evaluation. In
the October 1, 2021 evaluation, the Company utilized a aid from royalty price
methodology to worth the Dice emblems and model identify utilizing a royalty price of 4.0%
based mostly on comparable {industry} research and a reduction price of 12.5%.
The willpower of whether or not or not indefinite-lived acquired intangible property
have change into impaired entails a major stage of judgment within the assumptions
underlying the method used to find out the worth of the indefinite-lived
acquired intangible property. Fair values are decided utilizing a revenue allocation
methodology which estimates the worth of the trademark and model identify by
capitalizing the income saved as a result of the corporate owns the asset. We think about
components akin to historic efficiency, anticipated market circumstances, working
expense developments and capital expenditure necessities. Changes in our technique,
uncertainty associated to COVID-19, and/or adjustments in market circumstances might
considerably influence these judgments and require changes to recorded quantities
of intangible property. If projections will not be achieved, the Company might notice
an impairment within the foreseeable future.
Income Taxes
We make the most of the asset and legal responsibility methodology of accounting for earnings taxes. Under
this methodology, deferred earnings taxes are acknowledged for variations between the
monetary assertion and tax bases of property and liabilities at enacted statutory
tax charges in impact for the years through which the variations are anticipated to
reverse. Valuation allowances are established when vital to cut back deferred
tax property to the quantities anticipated to be realized.
The calculation of our tax liabilities entails coping with uncertainties in
making use of tax legal guidelines and rules in quite a few jurisdictions. Tax advantages from
unsure tax positions are acknowledged when it’s extra doubtless than not that the
positions might be sustained upon examination, together with resolutions of any
associated appeals or litigation processes, based mostly on the technical deserves. Because
of the complexity of some of these uncertainties, the final word decision might
end in a fee that’s materially completely different from our present estimate of
the accrual for unrecognized tax advantages.
Cyclicality
The labor market and sure of the industries that we serve have traditionally
skilled short-term cyclicality. However, we consider that on-line profession
web sites proceed to supply financial and strategic worth to the labor market
and industries that we serve.
Any slowdown in recruitment exercise that happens might negatively influence our
revenues and outcomes of operations. Alternatively, a lower within the
unemployment price or a labor scarcity, together with consequently of a rise in
job turnover, usually signifies that employers (together with our prospects) are
looking for to rent extra people, which might usually result in extra job
postings and will increase in demand for entry to our candidate profiles, which
have a optimistic influence on our revenues and outcomes of operations. Based on
historic developments, enhancements in labor markets and the necessity for our providers
usually lag behind general financial enhancements. Additionally, there has
traditionally been a lag from the time prospects start to extend purchases of
our recruitment providers and the influence to our revenues as a result of recognition
of income occurring over the size of the contract, which may be a number of
months to over a 12 months.
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From time to time, we see market slowdowns, which may result in decrease demand for
recruiting know-how and safety cleared professionals. If recruitment
exercise slows within the industries through which we function throughout 2022 and past, our
revenues and outcomes of operations could possibly be negatively impacted.
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Results of Operations
Our historic monetary data mentioned on this Annual Report has been
derived from the Company’s monetary statements and accounting information for the
years ended December 31, 2021, 2020 and 2019. Consolidated working leads to
{dollars} and as a % of income follows:
For the 12 months ended December 31,
(in 1000’s) 2021 2020 2019 2021 vs 2020 2020 vs 2019
Revenues $ 119,903 $ 111,167 $ 117,272 $ 8,736 $ (6,105)
Operating bills:
Cost of revenues 15,088 14,286 13,533 802 753
Product improvement 16,020 14,887 14,703 1,133 184
Sales and advertising 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 property – 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 associated and different prices – – 1,414 – (1,414)
Total working bills 121,655 143,557 106,607 (21,902) 36,950
Loss on sale of enterprise $ – $ – $ (537) – 537
Operating earnings (loss) $ (1,752) $ (32,390) $ 10,128 $ 30,638 $ (42,518)
For the 12 months ended December 31,
2021 2020 2019
Revenues 100.0% 100.0% 100.0%
Operating bills:
Cost of revenues 12.6 % 12.9 % 11.5 %
Product improvement 13.4 % 13.4 % 12.5 %
Sales and advertising 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 property – %
13.7 % – %
Impairment of goodwill – %
20.3 % – %
Impairment of right-of-use asset 1.6 %
– % – %
Disposition associated and different prices – % – % 1.2 %
Total working bills 101.5 % 129.1 % 90.9 %
Loss on sale of enterprise – % – % 0.5 %
Operating earnings (loss) (1.5) % (29.1) % 8.6 %
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Comparison of Years Ended December 31, 2021 and 2020
Revenues
Year Ended December 31, Percent
2021 2020 Increase (Decrease) Change
(in 1000’s, besides 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 skilled a rise in income of $8.7 million, or 7.9%. Revenue at Dice
elevated by $4.1 million, or 4.9%, in comparison with the identical interval of 2020 as a result of
enhancements in renewal charges and new enterprise exercise together with constantly
rising buyer counts throughout 2021, which drives further income in
future intervals. Revenues for ClearanceJobs elevated by $4.7 million, or 16.1%,
as in comparison with the identical interval of 2020, pushed by continued excessive demand for
professionals with authorities clearance and constant product releases and
enhancements driving exercise on the location.
Cost of Revenues
Year Ended December 31, Percent
2021 2020 Increase Change
(in 1000’s, besides percentages)
Cost of revenues $ 15,088 $ 14,286 $ 802 5.6 %
Percentage of revenues 12.6 % 12.9 %
Cost of revenues elevated by $0.8 million, or 5.6%, pushed by a rise of
$0.4 million related to webhosting and cloud computing, according to
the Company’s funding in its merchandise and instruments to boost gross sales processes.
The Company additionally skilled $0.4 million improve in headcount associated prices.
Product Development Expenses
Year Ended December 31, Percent
2021 2020 Increase Change
(in 1000’s, besides percentages)
Product improvement $ 16,020 $ 14,887 $ 1,133 7.6 %
Percentage of revenues 13.4 % 13.4 %
Product improvement bills elevated $1.1 million, or 7.6%, Within product
improvement, the Company skilled a lower in capitalized labor of $0.7
million, which elevated expense, together with a rise in consulting prices of
$0.3 million.
Sales and Marketing Expenses
Year Ended December 31, Percent
2021 2020 Increase Change
(in 1000’s, besides percentages)
Sales and advertising $ 43,701 $ 39,693 $ 4,008 10.1 %
Percentage of revenues 36.4 % 35.7 %
Sales and advertising bills elevated $4.0 million, or 10.1%, from the identical
interval in 2020. The improve was primarily pushed by $2.4 million improve in
compensation associated prices as a result of elevated headcount and increased quota
attainment versus gross sales plan, and a $1.5 million improve in discretionary
advertising bills as buyer recruitment exercise rebounded.
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General and Administrative Expenses
Year Ended December 31, Percent
2021 2020 Increase Change
(in 1000’s, besides percentages)
General and administrative $ 28,583 $ 26,625 $ 1,958 7.4 %
Percentage of revenues 23.8 % 24.0 %
General and administrative prices elevated $2.0 million or 7.4%, primarily due
to a rise in compensation associated prices of $2.9 million with enterprise
efficiency driving achievement for the bonus and stock-based compensation
plans. This was partially offset by decrease dangerous debt expense of $0.7 million.
Depreciation
Year Ended December 31, Percent
2021 2020 Increase Change
(in 1000’s, besides percentages)
Depreciation $ 16,344 $ 10,259 $ 6,085 59.3 %
Percentage of revenues 13.6 % 9.2 %
Depreciation expense elevated $6.1 million or 59.3% from the identical interval in
2020, in reference to rising inner improvement prices throughout 2019 and
2020 that have been then positioned in service, primarily in late 2020, and depreciated.
Internal improvement prices are mirrored as purchases of mounted property within the
consolidated statements of money flows.
Impairment of Intangible Assets
Year Ended December 31, Percent
2021 2020 Decrease Change
(in 1000’s, besides percentages)
Impairment of intangible property $ – $ 15,200 $ (15,200) (100.0) %
Percentage of revenues – % 13.7 %
The Company has an indefinite-lived acquired intangible asset associated to the
Dice emblems and model identify. During the primary and third quarters of 2020,
as a result of of the impacts of the COVID-19 pandemic, the Company carried out an
interim impairment evaluation of the Dice emblems and model identify. As a consequence
of the evaluation, the Company recorded an impairment cost of $15.2 million
throughout the 9 months ended September 30, 2020. See additionally Note 10 of the notes
to consolidated monetary statements.
Impairment of Goodwill
Year Ended December 31, Percent
2021 2020 Decrease Change
(in 1000’s, besides percentages)
Impairment of goodwill $ – $ 22,607 $ (22,607) (100.0) %
Percentage of revenues – % 20.3 %
During the third quarter of 2020, as a result of of the impacts of COVID-19 pandemic,
the Company carried out an interim impairment evaluation of goodwill. As a consequence of
the evaluation, the Company recorded an impairment cost of $22.6 million within the
third quarter of 2020. See additionally Note 11 of the notes to consolidated monetary
statements.
Impairment of right-of-use asset
Year Ended December 31, Percent
2021 2020 Increase Change
(in 1000’s, besides percentages)
Impairment of right-of-use asset $ 1,919 $ – $ 1,919 – %
Percentage of revenues 1.6 % – %
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During the third quarter of 2021, as a result of persevering with impacts of COVID-19 on
the true property markets and its influence on the long run money flows attributable to
its ROU property, the Company carried out an impairment evaluation of a sublease
inside its ROU property. As a consequence, the Company recorded an impairment cost of
$1.9 million throughout the third quarter of 2021.
Operating Income (Loss)
Year Ended December 31, Percent
2021 2020 Increase Change
(in 1000’s, besides percentages)
Revenue $ 119,903 $ 111,167 $ 8,736 7.9 %
Operating earnings (loss) (1,752) (32,390) $ 30,638 (94.6) %
Percentages of revenues (1.5) % (29.1) %
Operating loss for the 12 months ended December 31, 2021 was $1.8 million, a adverse
margin of 1.5%, in comparison with working loss of $32.4 million, a adverse margin
of 29.1%, for a similar interval in 2020. The lower in working loss and
improved share margin was primarily pushed by non-cash impairments of
goodwill and intangible property of $37.8 million throughout the 2020 interval,
partially offset by elevated investments in gross sales and advertising, increased
depreciation, and the ROU asset impairment of $1.9 million within the third quarter
of 2021.
Income from fairness methodology funding
Year Ended December 31, Percent
2021 2020 Increase Change
(in 1000’s, besides percentages)
Income from fairness methodology funding $ 190 $ – $ 190 – %
Percentage of revenues 0.2 % – %
During the fourth quarter of 2021, the Company recorded $0.2 million of earnings
associated to its proportionate share of eFinancialCareer’s (“eFC”) internet earnings.
Interest Expense and Other
Year Ended December 31, Percent
2021 2020 Decrease Change
(in 1000’s, besides percentages)
Interest expense and different $ 667 $ 831 $ (164) (19.7) %
Percentage of revenues 0.6 % 0.7 %
Interest expense and different decreased by $0.2 million, or 19.7%, from the identical
interval in 2020. The lower in curiosity expense was primarily as a result of decrease
weighted common debt excellent throughout the 12 months. The 2020 interval included a
$0.2 million acquire acknowledged within the second quarter of 2020 on the sale of the
Company’s 20% curiosity in BioSpace.
Impairment of funding
Year Ended December 31, Percent
2021 2020 Decrease Change
(in 1000’s, besides percentages)
Impairment of funding $ – $ 2,002 $ (2,002) (100.0) %
Percentage of revenues – % 1.8 %
During the primary quarter of 2020, as a result of impacts from the COVID-19 pandemic,
the Company decided the worth of its 7.6% curiosity in a number one tech abilities
evaluation firm to be zero. Accordingly, the Company recorded an impairment
cost of $2.0 million throughout the first quarter of 2020.
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Gain on funding
Year Ended December 31, Percent
2021 2020 Increase Change
(in 1000’s, besides percentages)
Gain on funding $ 1,198 $ – $ 1,198 – %
Percentage of revenues 1.0 % – %
The acquire on funding pertains to a minority curiosity representing lower than 1%
of the widespread inventory of a know-how firm that turned publicly traded throughout
the primary quarter of 2021 after submitting an preliminary public providing. The Company
bought 100% of this funding throughout the third quarter of 2021. See additionally Note 8
of the notes to consolidated monetary statements.
Income Taxes
Year Ended December 31,
2021 2020
(in 1000’s, besides
percentages)
Loss earlier than earnings taxes $ (1,031) $ (35,223)
Income tax profit (629) (2,826)
Effective tax price 61.0 % 8.0 %
A reconciliation between the earnings tax profit on the federal statutory price
and the reported earnings tax profit is summarized as follows:
Year Ended December 31,
2021 2020
Federal statutory price $ (216) $ (7,397)
Gain on sale of companies or investments (251) (42)
Stock-based compensation (84) 432
Nondeductible impairment – 5,029
State tax expense (profit), internet of federal impact 110 (514)
Change in accrual for unrecognized tax advantages (155) (216)
Executive compensation 541 323
Research and improvement tax credit (478) (530)
Other (96) 89
Income tax profit $ (629) $ (2,826)
Our efficient earnings tax price was 61.0% and 8.0% for the years ended December
31, 2021 and 2020, respectively. The 2021 tax price differed from the federal
statutory price primarily as a result of of the utilization of a capital loss
carryforward to offset a acquire on an funding; deduction limitations on
government compensation; and tax credit for analysis and improvement. The 2020
tax price differed from the federal statutory price primarily as a result of of tax
deficiencies in stock-based compensation; nondeductible impairment costs;
state tax advantages; and tax credit for analysis and improvement.
Income (loss) from discontinued operations, internet of tax
For the 12 months ended December 31, Percent
2021 2020 Decrease Change
(in 1000’s, besides percentages)
Income (loss) from discontinued operations,
internet 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 possession of
its eFC enterprise to eFC administration and has recorded it as a discontinued
operation. As a consequence, the Company skilled a loss from discontinued
operations, internet of tax, of $29.3 million. The loss was comprised of $28.1
million associated to the reclassification of forex translation changes
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and $5.2 million from the removing of eFC’s internet property. The loss was partially
offset by the recording of an fairness methodology funding of $3.6 million and eFC’s
earnings throughout the interval. Income from discontinued operations for the 12 months
ended December 31, 2020 represents eFC’s earnings throughout the interval.
Earnings per Share
Year Ended December 31,
2021 2020
(in 1000’s, besides
per share quantities)
Loss from persevering with operations $ (402) $ (32,397)
Income (loss) from discontinued operations, internet of tax (29,340) 2,382
Net Loss $ (29,742) $ (30,015)
Weighted-average shares excellent – diluted 46,333 48,278
Diluted loss per share – persevering with 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 persevering with operations was $0.01 and $0.67 for the
years ended December 31, 2021 and 2020, respectively. The lower in diluted
loss per share was primarily pushed by the non-cash impairment costs throughout
2020 and the acquire on funding within the 2021 interval, partially offset by the ROU
asset impairment and increased depreciation expense within the 2021 interval. Diluted
loss per share was $0.64 and $0.62 for the years ended December 31, 2021 and
2020, respectively. Current 12 months so far loss per share is primarily pushed by
the loss on discontinued operations. The prior 12 months loss per share is primarily
pushed by the impairment costs.
Comparison of Years Ended December 31, 2020 and 2019
Revenues
Year Ended December 31, Percent
2020 2019 Increase (Decrease) Change
(in 1000’s, besides 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 skilled a lower in income of $6.1 million, or 5.2%. Revenue at Dice
decreased by $10.3 million, or 11.2%, in comparison with the identical interval in 2019 as a result of
the influence of the COVID-19 pandemic driving decrease renewal charges 12 months over 12 months.
Revenues for ClearanceJobs elevated by $4.2 million, or 17.1%, as in comparison with
the identical interval of 2019, pushed by continued excessive demand for professionals with
authorities clearance and constant product releases and enhancements driving
exercise on the location.
Cost of Revenues
Year Ended December 31, Percent
2020 2019 Increase Change
(in 1000’s, besides percentages)
Cost of revenues $ 14,286 $ 13,533 $ 753 5.6 %
Percentage of revenues 12.9 % 11.5 %
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Cost of revenues elevated by $0.8 million, or 5.6%, primarily pushed by an
improve in compensation associated prices of $1.8 million, partially offset by
increased capitalization of inner improvement prices of $1.0 million, which
decreased working expense. Together, this elevated expense $0.8 million.
Product Development Expenses
Year Ended December 31, Percent
2020 2019 Increase Change
(in 1000’s, besides percentages)
Product improvement $ 14,887 $ 14,703 $ 184 1.3 %
Percentage of revenues 13.4 % 12.5 %
Product improvement bills elevated $0.2 million or 1.3%, pushed by will increase
in compensation associated prices from increased wages. This was partially offset by
increased capitalization of inner improvement prices, which lower working
expense. Together, this elevated expense $0.8 million. The increased
capitalization of inner improvement prices resulted from the Company’s
continued deal with the design and improvement of product enhancements and
options for the Company’s websites. These will increase have been offset by a lower in
journey, software program subscriptions, and different prices as a result of COVID-19 of $0.6 million.
Sales and Marketing Expenses
Year Ended December 31, Percent
2020 2019 Decrease Change
(in 1000’s, besides percentages)
Sales and advertising $ 39,693 $ 42,702 $ (3,009) (7.0) %
Percentage of revenues 35.7 % 36.4 %
Sales and advertising bills decreased $3.0 million, or 7.0%, from the identical
interval in 2019. Sales and advertising had a rise in compensation associated
prices of $4.7 million. This improve was offset by $5.6 million in decreased
discretionary advertising bills realized from efficiencies in vendor choice
and volumes and $2.1 million discount in different operational prices as a result of
COVID-19 pandemic, together with consulting and touring prices.
General and Administrative Expenses
Year Ended December 31, Percent
2020 2019 Increase Change
(in 1000’s, besides percentages)
General and administrative $ 26,625 $ 25,827 $ 798 3.1 %
Percentage of revenues 24.0 % 22.0 %
General and administrative prices elevated $0.8 million or 3.1%, primarily due
to a rise in compensation prices of $1.0 million and non-cash inventory based mostly
compensation prices of $0.6 million, partially offset by a lower in different
operational prices of $0.8 million, together with recruiting, consulting, and journey
prices.
Depreciation
Year Ended December 31, Percent
2020 2019 Increase Change
(in 1000’s, besides percentages)
Depreciation $ 10,259 $ 8,428 $ 1,831 21.7 %
Percentage of revenues 9.2 % 7.2 %
Depreciation expense elevated $1.8 million or 21.7%, from the identical interval in
2019, in reference to increased headcount driving increased capitalization of
inner improvement prices, that are mirrored as purchases of mounted property in
the consolidated statements of money flows.
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Impairment of intangible property
Year Ended December 31, Percent
2020 2019 Increase Change
(in 1000’s, besides percentages)
Impairment of intangible property $ 15,200 $ – $ 15,200 – %
Percentage of revenues 13.7 % – %
The Company has an indefinite-lived acquired intangible asset associated to the
Dice emblems and model identify. During the primary and third quarters of 2020, due
to the impacts of the COVID-19 pandemic, the Company carried out interim
impairment analyses of the Dice emblems and model identify. As a consequence of the
analyses, the Company recorded impairment costs totaling $15.2 million throughout
the three month intervals ended March 31, 2020 and September 30, 2020. See additionally
Note 10 of the notes to consolidated monetary statements.
Impairment of goodwill
Year Ended December 31, Percent
2020 2019 Increase Change
(in 1000’s, besides percentages)
Impairment of goodwill $ 22,607 $ – $ 22,607 – %
Percentage of revenues 20.3 % – %
During the primary and third quarters of 2020, as a result of impacts of the COVID-19
pandemic, the Company carried out interim impairment analyses of goodwill. As a
consequence of the analyses, the Company recorded an impairment cost of $22.6
million throughout the three months ended September 30, 2020. See additionally Note 11 of
the notes to consolidated monetary statements.
Disposition Related and Other Costs
Year Ended December 31, Percent
2020 2019 Decrease Change
(in 1000’s, besides percentages)
Disposition associated and different prices $ – $ 1,414 $ (1,414) (100.0) %
Percentage of revenues – % 1.2 %
The disposition associated and different prices of $1.4 million for the 12 months ended
December 31, 2019, as described in observe 16 to consolidated monetary statements,
are primarily as a result of severance and associated prices incurred in reorganizing the
Tech-focused enterprise.
Loss on sale of enterprise
Year Ended December 31, Percent
2020 2019 Decrease Change
(in 1000’s, besides percentages)
Loss on sale of enterprise $ – $ 537 $ (537) (100.0) %
Percentage of revenues – % 0.5 %
Loss on sale of enterprise for the 12 months ended December 31, 2019 included a loss of
$0.5 million on the 2018 sale of Hcareers as a result of finalization of the working
capital phrases and associated contingencies. See additionally observe 6 to consolidated
monetary statements.
Operating Income (Loss)
Year Ended December 31, Percent
2020 2019 Increase (Decrease) Change
(in 1000’s, besides percentages)
Revenue $ 111,167 $ 117,272 $ (6,105) (5.2) %
Operating earnings (loss) $ (32,390) $ 10,128 $ (42,518) (419.8) %
Percentage of revenues (29.1) % 8.6 %
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Operating loss for the 12 months ended December 31, 2020 was $32.4 million, a
adverse margin of 29.1%, as in comparison with working earnings of $10.1 million, a
optimistic margin of 8.6%, for a similar interval in 2019. The lower in working
earnings and share margin was primarily pushed by the non-cash impairments of
goodwill and intangible property of $37.8 million within the 2020 interval, partially
offset by the lower in disposition and associated prices of $1.4 million within the
2019 interval.
Interest Expense and Other
Year Ended December 31, Percent
2020 2019 Decrease Change
(in 1000’s, besides percentages)
Interest expense $ 831 $ 703 $ 128 18.2 %
Percentage of revenues 0.7 % 0.6 %
Interest expense elevated by $0.1 million, or 18.2%, from the identical interval in
2019. Interest expense elevated $0.3 million, primarily as a result of increased
weighted-average debt excellent throughout the 12 months ended December 31, 2020 because the
Company borrowed on its revolving credit score facility within the first quarter of 2020
for liquidity safety throughout the COVID-19 pandemic. The improve in curiosity
expense was partially offset by a $0.2 million acquire acknowledged within the second
quarter of 2020 on the sale of the Company’s 20% curiosity in BioSpace.
Impairment of Investment
Year Ended December 31, Percent
2020 2019 Increase Change
(in 1000’s, besides percentages)
Impairment of funding $ 2,002 $ – $ 2,002 – %
Percentage of revenues 1.8 % – %
During the primary quarter of 2020, as a result of impacts from the COVID-19 pandemic,
the Company decided the worth of its 7.6% curiosity in a number one tech abilities
evaluation firm to be zero. Accordingly, the Company recorded an impairment
cost of $2.0 million throughout the first quarter of 2020.
Income Taxes
Year Ended December 31,
2020 2019
(in 1000’s, besides
percentages)
Income (loss) earlier than earnings taxes $ (35,223) $ 9,425
Income tax expense (profit) (2,826) 2,794
Effective tax price 8.0 % 29.6 %
A reconciliation between tax expense (profit) on the federal statutory price and
the reported earnings tax expense (profit) is summarized as follows:
Year Ended December 31,
2020 2019
Federal statutory price $ (7,397) $ 1,979
Loss (acquire) on sale of companies or investments (42) 84
Stock-based compensation 432 281
Nondeductible impairment 5,029 –
State tax expense (profit), internet of federal impact (514)
405
Change in accrual for unrecognized tax advantages (216)
209
Executive compensation 323
147
Research and improvement tax credit (530) (558)
Other 89 247
Income tax expense (profit) $ (2,826) $ 2,794
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Our efficient earnings tax price was 8.0% and 29.6% for the years ended December
31, 2020 and 2019, respectively. The 2020 tax price differed from the federal
statutory price primarily as a result of of tax deficiencies in stock-based
compensation; nondeductible impairment costs; state tax advantages; and tax
credit for analysis and improvement. The 2019 tax price differed from the
federal statutory price primarily as a result of of tax deficiencies in stock-based
compensation; state tax expense; and tax credit for analysis and improvement.
Earnings (Loss) per Share
Year Ended December 31,
2020 2019
(in 1000’s, besides
per share quantities)
Income (loss) from persevering with operations $ (32,397) $ 6,631
Income from discontinued operations, internet of tax 2,382 5,920
Net earnings (loss) (30,015) 12,551
Weighted-average shares outstanding-diluted 48,278 51,633
Diluted earnings (loss) per share – persevering with 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 persevering with 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 interval was
primarily pushed by the non-cash impairment costs.
Liquidity and Capital Resources
Non-GAAP Financial Measures
We have offered sure non-GAAP monetary data as further measures
for our working outcomes. These measures will not be in accordance with, or an
various for, measures in accordance with U.S. GAAP and could also be completely different from
equally titled non-GAAP measures reported by different corporations. We consider the
presentation of non-GAAP measures, akin to Adjusted EBITDA and Adjusted EBITDA
margin, gives helpful data to administration and buyers concerning
sure monetary and enterprise developments referring to our monetary situation and
outcomes of operations.
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP metrics utilized by
administration to measure working efficiency. Management makes use of Adjusted EBITDA as
a efficiency measure for inner monitoring and planning, together with
preparation of annual budgets, analyzing funding selections and evaluating
profitability and efficiency comparisons between us and our rivals. The
Company additionally makes use of this measure to calculate quantities of efficiency based mostly
compensation underneath the senior administration incentive bonus program. Adjusted
EBITDA represents internet earnings plus (to the extent deducted in calculating such
internet earnings) curiosity expense, earnings tax expense, depreciation and amortization,
non-cash inventory based mostly compensation, losses ensuing from sure tendencies
exterior the extraordinary course of enterprise, sure writeoffs in reference to
indebtedness, impairment costs with respect to long-lived property, bills
incurred in reference to an fairness providing or every other providing of
securities by the Company, extraordinary or non-recurring non-cash bills or
losses, losses from fairness methodology investments, transaction prices in connection
with the credit score settlement, deferred revenues written off in reference to
acquisition buy accounting changes, severance and retention prices
associated to tendencies and reorganizations of the Company, and losses associated
to authorized claims and charges which might be uncommon in nature or rare, minus (to the
extent included in calculating such internet earnings) non-cash earnings or good points,
together with earnings from fairness methodology investments, curiosity earnings, enterprise
interruption insurance coverage proceeds, and any earnings or acquire ensuing from sure
tendencies exterior the extraordinary course of enterprise, and good points associated to authorized
claims which might be uncommon in nature or rare.
We additionally think about Adjusted EBITDA, as outlined above, to be an vital indicator
to buyers as a result of it gives data associated to our means to supply
money flows to fulfill future debt service, capital expenditures and working capital
necessities and to fund future progress. We current Adjusted EBITDA as a
supplemental efficiency measure as a result of we consider that this
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measure gives our Board, administration and buyers with further data
to measure our efficiency, present comparisons from interval to interval and
firm to firm by excluding potential variations attributable to variations in
capital buildings (affecting curiosity expense) and tax positions (such because the
influence on intervals or corporations of adjustments in efficient tax charges or internet
working losses), and to estimate our worth.
We perceive that though Adjusted EBITDA is ceaselessly utilized by securities
analysts, lenders and others of their analysis of corporations, Adjusted EBITDA
has limitations as an analytical instrument, and you shouldn’t think about it in
isolation, or as an alternative choice to evaluation of our liquidity or outcomes as
reported underneath GAAP. Some limitations are:
•Adjusted EBITDA doesn’t replicate our money expenditures, or future necessities
for capital expenditures or contractual commitments;
•Adjusted EBITDA doesn’t replicate adjustments in, or money necessities for, our
working capital wants;
•Adjusted EBITDA doesn’t replicate the numerous curiosity expense, or the money
necessities essential to service curiosity or principal funds on our debt;
•Although depreciation and amortization are non-cash costs, the property being
depreciated and amortized usually must get replaced sooner or later, and
Adjusted EBITDA doesn’t replicate any money necessities for such replacements;
and
•Other corporations in our {industry} could calculate Adjusted EBITDA in another way than
we do, limiting its usefulness as a comparative measure.
To compensate for these limitations, administration evaluates our liquidity by
contemplating the financial impact of excluded expense gadgets independently, as properly
as in reference to its evaluation of money flows from operations and by means of the
use of different monetary measures, akin to capital expenditure price range variances,
funding spending ranges and return on capital evaluation.
Adjusted EBITDA Margin is computed as Adjusted EBITDA divided by Revenues. Prior
to 2019, Adjusted EBITDA was divided by Adjusted Revenues, which represented
Revenues much less revenues of divested companies. For the years ended December 31,
2021, 2020, and 2019, revenues of divested companies was zero. Accordingly,
Adjusted Revenues is not used within the computation. Adjusted EBITDA and
Adjusted EBITDA Margin will not be measurements of our monetary efficiency underneath
GAAP and shouldn’t be thought-about as an alternative choice to income, internet earnings,
working earnings, money offered by working actions, or every other
efficiency 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 1000’s):
Year
Ended December 31,
2021 2020 2019
Reconciliation of Net Income (loss) to Adjusted EBITDA:
Net earnings (loss) $ (29,742) $ (30,015) $ 12,551
Interest expense 748 1,031 703
Income tax expense (profit) (629) (2,826) 2,794
Depreciation 16,344 10,259 8,428
Non-cash inventory based mostly compensation 7,681 5,764 5,145
Loss on sale of enterprise – – 537
Income from fairness methodology funding (190) – –
Disposition associated and different prices – – 1,414
Impairment of intangible property – 15,200 –
Impairment of goodwill – 22,607 –
Impairment of funding – 2,002 –
Impairment of right-of-use asset 1,919 – –
Gain on investments (1,198) (200) –
Legal contingencies and associated charges – – 123
Severance and associated prices 1,969 1,194 –
Loss (earnings) on discontinued operations, internet of tax 29,340
(2,382) (5,920)
Other (80) – 1
Adjusted EBITDA $ 26,162 $ 22,634 $ 25,776
Reconciliation of Operating Cash Flows to Adjusted
EBITDA:
Net money offered by working actions
$ 28,581 $ 18,683 $ 22,923
Interest expense 748 1,031 703
Amortization of deferred financing prices (147) (147) (147)
Income tax expense (profit) (629) (2,826) 2,794
Deferred earnings taxes 569 2,918 (2,493)
Change in accrual for unrecognized tax advantages 156 446 (107)
Change in accounts receivable 1,102 (859) (1,694)
Change in deferred income (10,075) 8,193 4,583
Disposition associated and different prices – – 1,414
Legal contingencies and associated charges – – 123
Discontinued operations outcomes (3,593) (7,290) (9,083)
Severance and associated prices 1,969 1,194 –
Changes in working capital and different 7,481 1,291 6,760
Adjusted EBITDA $ 26,162
$ 22,634 $ 25,776
A reconciliation of Adjusted EBITDA Margin for the years ended December 31,
2021, 2020 and 2019 follows (in 1000’s, besides percentages):
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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Cash Flows
We have summarized our money flows for the years ended December 31, 2021, 2020
and 2019 as follows (in 1000’s):
Year Ended December 31,
2021 2020 2019
Cash from working actions $ 28,581 $ 18,683 $ 22,923
Cash utilized in investing actions (19,304) (15,904) (11,505)
Cash utilized in financing actions (15,387) (542) (12,423)
We have financed our operations primarily by means of money offered by working
actions and borrowings underneath our revolving credit score facility. At December 31,
2021, we had money of $1.5 million in comparison with $4.5 million at December 31, 2020.
Liquidity
Our principal inner sources of liquidity are money readily available, in addition to the
money movement that we generate from our operations. In addition, we had $67.0
million in borrowing capability underneath our $90.0 million Credit Agreement at
December 31, 2021, topic to sure availability limits together with our
consolidated leverage ratio, which usually limits borrowings to 2.5 occasions
annual adjusted EBITDA ranges, as outlined within the Credit Agreement. We consider
that our present money and money equivalents, money generated from operations and
accessible borrowings underneath our Credit Agreement might be enough to fulfill
our at the moment anticipated money necessities by means of no less than the subsequent 12 months
and the foreseeable future thereafter. However, it’s potential that a number of
lenders underneath the revolving credit score facility could refuse or be unable to fulfill
their dedication to lend to us or we could must refinance our debt and be
unable to take action. In addition, our liquidity could possibly be negatively affected by a
lower in demand for our merchandise and providers. We might also make acquisitions
and might have to lift further capital by means of future debt financings or
fairness choices to the extent essential to fund such acquisitions, which we could
not have the ability to do on a well timed foundation or on phrases passable to us or in any respect.
Comparison of Years Ended December 31, 2021 and 2020
Operating Activities
Net money flows from working actions primarily consists of internet earnings
adjusted for sure non-cash gadgets, together with depreciation, adjustments in deferred
tax property and liabilities, inventory based mostly compensation, impairments, and the
impact of adjustments in working capital. Net money flows from working actions
have been $28.6 million and $18.7 million for the years ended December 31, 2021 and
2020, respectively, a rise of $9.9 million. Cash influx from operations is
pushed by earnings and depends on the quantity and timing of billings and
money assortment from our prospects. Cash offered by working actions throughout
the 12 months ended December 31, 2021 elevated primarily as a result of robust billings to
and collections from prospects.
Investing Activities
During the 12 months ended December 31, 2021, money utilized in investing actions was
$19.3 million in comparison with $15.9 million of money utilized in investing actions
throughout the 12 months ended December 31, 2020. Cash utilized in investing actions
throughout the 12 months ended December 31, 2021 elevated from the comparable 2020
interval as a result of money transferred to the eFC enterprise and money paid for funding,
partially offset by decrease inner improvement prices, primarily pushed by decrease
headcount and improvement actions devoted to the switch of the eFC
enterprise, partially offset by increased proceeds from sale of investments.
Financing Activities
Cash utilized in financing actions throughout the 12 months ended December 31, 2021 was
$15.4 million primarily as a result of $3.0 million of internet borrowings on long-term debt
and $18.4 million of repurchases of widespread inventory. Cash used throughout the 12 months
ended December 31, 2020 was $0.5 million primarily as a result of $10.0 million of internet
borrowings on long-term debt and $10.5 million of repurchases of widespread inventory.
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Comparison of Years Ended December 31, 2020 and 2019
Operating Activities
Net money flows from working actions primarily consist of internet earnings
adjusted for sure non-cash gadgets, together with depreciation, adjustments in deferred
tax property and liabilities, inventory based mostly compensation, impairments, and the
impact of adjustments in
working capital. Net money flows from working actions have been $18.7 million and
$22.9 million for the years ended December 31, 2020 and 2019, respectively, a
lower of $4.2 million. Cash influx from operations is pushed by earnings and
depends on the quantity and timing of billings and money assortment from our
prospects. Cash offered by working actions throughout the 12 months ended December
31, 2020 decreased primarily as a result of decrease billings to prospects ensuing from
the COVID-19 pandemic, partially offset by value financial savings applied by the
Company in response to the COVID-19 pandemic.
Investing Activities
During the 12 months ended December 31, 2020, money utilized in investing actions was
$15.9 million in comparison with $11.5 million of money utilized in investing actions
throughout the 12 months ended December 31, 2019. Cash utilized by investing actions
throughout the 12 months ended December 31, 2020 elevated from the comparable 2019
interval as a result of increased capitalization of internally developed software program of $1.9
million and $2.5 million decrease receipts from the sale of companies and fairness
investments.
Financing Activities
Cash utilized in financing actions throughout the 12 months ended December 31, 2020 was
$0.5 million primarily as a result of $10.0 million of internet borrowings on long-term debt
and $10.5 million of repurchases of widespread inventory. Cash used throughout the 12 months
ended December 31, 2019 was $12.4 million primarily as a result of $8.0 million of internet
repayments on long-term debt and $4.4 million of repurchases of widespread inventory.
Financings and Capital Requirements
Credit Agreement
We have a $90 million revolving credit score facility, which matures November 2023,
with $23 million of borrowings on the power at December 31, 2021, leaving $67
million accessible for future borrowings. Borrowings underneath the Credit Agreement
bear curiosity, payable no less than quarterly, on the Company’s possibility, at a London
Interbank Offered Rate (“LIBOR”) price or a base price, plus a margin. Assuming an
rate of interest of 1.88% (the speed in impact on December 31, 2021) on our present
borrowings, curiosity funds are anticipated to be $0.4 million per 12 months in
2022-2023. The Credit Agreement incorporates varied customary affirmative and
adverse covenants and additionally incorporates sure monetary covenants, together with a
consolidated leverage ratio and a consolidated curiosity protection ratio. As of
December 31, 2021, the Company was in compliance with all of the monetary
covenants underneath the Credit Agreement. Refer to Note 12 within the notes to
consolidated monetary statements and Item 7A. “Quantitative and Qualitative
Disclosures about Market Risk – Interest Rate Risk.”
Contractual Obligations
The Company has working leases for company workplace house and sure
gear. The leases have phrases from one 12 months to eight years, some of which
embrace choices to resume the lease, and are included within the lease time period when it
within reason sure that the Company will train the choice. No leases
embrace choices to buy the leased property. As of December 31, the worth of
our obligations underneath working leases was $6.9 million. See observe 7 to
consolidated monetary statements for additional data.
We make commitments to buy promoting from on-line distributors, which we pay
for on a month-to-month foundation. We haven’t any vital long-term obligations to buy
a hard and fast or minimal quantity with these distributors.
Other Capital Requirements
As of December 31, 2021, we recorded roughly $0.8 million of unrecognized
tax advantages as liabilities, and we’re unsure if or when such quantities could also be
settled. Related to the unrecognized tax advantages thought-about everlasting
variations, we’ve got additionally recorded a legal responsibility for potential penalties and
curiosity. Included within the stability of unrecognized tax advantages at December 31,
2021 are $0.8 million of tax advantages that may have an effect on the efficient tax price
if acknowledged. The Company believes
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it’s fairly potential that as a lot as $0.2 million of its unrecognized tax
advantages could also be acknowledged within the subsequent twelve months.
The Company’s Board of Directors authorized a inventory repurchase program that
permits the Company to repurchase its widespread inventory. During the 12 months ended
December 31, 2021, the Company repurchased 3.9 million shares for $15.3 million.
As of December 31, 2021, the worth of shares accessible to be bought underneath the
present plan was $5.8 million. Management has discretion in figuring out the
circumstances underneath which shares could also be bought every now and then. See observe 14 of
notes to consolidated monetary statements for additional data.
We anticipate capital expenditures in 2022 to be roughly $16 million to
$19 million. The improve over prior intervals is as a result of further
investments within the improvement of new merchandise and options. We intend to make use of
working money flows to fund capital expenditures.
Recent Accounting Pronouncements
For a dialogue of new accounting pronouncements affecting the Company, refer
to notice 2 of notes to consolidated monetary statements included in Item 8 of
this Annual Report.
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