DHI GROUP INC
For the period ended Dec 31, 2024. Filed Feb 12, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 12, 2025
DHX$4.35+1.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-08.
0001393883-24-000040
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-12.
0001393883-25-000041
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 117 previous paragraphs and 119 current paragraphs.
70 unchanged; 35 reworded; 14 added; 12 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 25 previous and 24 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
On January 13, 2025, we announced a strategic reorganization, restructuring our operations into two distinct divisions. This reorganization aims to provide dedicated leadership for each brand — ClearanceJobs and Dice — to foster a unified vision and strategy tailored to their respective market dynamics. In connection with the reorganization, we are realigning our reporting structure and will reevaluate our operating segments.
Current report
Chief Financial Officer Transition and Appointment and Chief Legal Officer Appointment
Current report
Restructure
Current report
During January 2025, the Company announced an organizational restructuring intended to streamline its operations, drive business objectives, and reduce operating costs. This includes a reduction of the Company’s current workforce by approximately 8% primarily by consolidating team structure and mid-level management within product development. As a result of the restructuring, the positions of Chief Revenue Officer and Chief Marketing Officer were eliminated.
Current report
Stock Repurchase Plan
Current report
On January 21, 2025, the Company announced that its Board of Directors approved a new stock repurchase program that permits the purchase of up to $5.0 million of the Company's common stock through February 2026. The number, price, structure, and timing of the repurchases, if any, will be at our sole discretion and future repurchases will be evaluated by us depending on market conditions, liquidity needs, restrictions under the agreements governing our indebtedness, and other factors. Share repurchases may be made in the open market or in privately negotiated transactions. The repurchase authorization does not oblige us to acquire any particular amount of our common stock. The Board of Directors may suspend, modify, or terminate the repurchase program at any time without prior notice.
Current report
Section 382 Rights Plan
Current report
On January 28, 2025, the Company adopted a shareholder rights plan designed to protect stockholder value by preserving the availability of the Company’s net capital loss carryforwards (“Carryforwards”) and other tax attributes under the Internal Revenue Code of 1986, as amended (the “Code”) (such plan, the “Section 382 Rights Plan”). The Section 382 Rights Plan aims to preserve the Company's Carryforwards by creating a disincentive for any stockholder to accumulate beneficial ownership of 4.99% or more of the Company’s outstanding common stock, or to further accumulate the Company’s common stock if the stockholder's beneficial ownership already exceeds 4.99%, in each case without the approval of the Company’s Board of Directors. Any stockholder who beneficially owned 4.99% or more of the outstanding shares of the Company's common stock as of market close on January 28, 2025, when the Company first publicly announced adoption of the Section 382 Rights Plan, will not trigger the Section 382 Rights Agreement ("Rights Agreement") so long as that stockholder does not acquire beneficial ownership of any additional shares of common stock at a time when they still beneficially own 4.99% or more of such common stock, subject to certain exceptions as set forth in the Rights Agreement. Any such stockholder will not be permitted under the Section 382 Rights Plan to acquire any additional shares without approval of the Board of Directors. The Board of Directors also has the authority to exempt certain stockholders and acquisitions from triggering the Section 382 Rights Plan. In connection with its adoption of the Section 382 Rights Plan, the Board of Directors declared a dividend of one "right" under the Section 382 Rights Plan for each outstanding share of the Company’s common stock. The dividend will be made to stockholders of record as of the close of business on February 7, 2025. Any shares of the Company’s common stock issued after the record date will be issued together with a right. The rights will initially trade with the Company’s common stock and will generally become exercisable only if a person (or any persons acting as a group) acquires 4.99% or more of the Company’s outstanding common stock. If the rights become exercisable, all holders of rights (other than any triggering person) will be entitled to acquire additional shares of common stock at a 50% discount. The rights will expire on January 28, 2028, provided that if the Company’s stockholders do not ratify the Section 382 Rights Plan at the Company's 2025 Annual Meeting of Stockholders, the rights will expire at 5:00 p.m. eastern time on the day following the certification of the voting results of such meeting. The rights may also expire on an earlier date upon the occurrence of certain events, including a determination by the Board of Directors that the Section 382 Rights Plan is no longer necessary or desirable for the preservation of the Company's Carryforwards or that no Carryforwards ma…
Excerpt shortened here; the source contains the full paragraph.
Current report
Deferred revenue at December 31, 2024 was $45.5 million, a decrease of $4.5 million, or 9%, from December 31, 2023. The decrease in deferred revenue was due to macroeconomic conditions continuing to slow hiring of technologists. Backlog at December 31, 2024 was $111.3 million, an increase of $3.2 million, or 3%, from December 31, 2023. The increase is primarily due to the Company's continued focus on signing multi-year contracts.
Current report
Indefinite-Lived Acquired Intangible Asset
Current report
Sales and marketing expenses decreased $10.0 million, or 17.5%, from the same period in 2023. The decrease was driven by a $7.0 million decrease in compensation related costs, including lower commissions and headcount, $2.0 million in operational costs, including credit card fees, consulting fees, and sales performance incentives, and $1.1 million in discretionary marketing expenses.
Current report
Depreciation expense increased $1.1 million or 6.2% from the same period in 2023. The increase was driven by the high fixed asset purchases during 2023, which had a full year of depreciation in 2024.
Current report
During February 2024, the stock repurchase program approved in February 2023 expired with a total of 1.4 million shares purchased for $5.2 million.
Current report
On January 21, 2025 the Company announced that its Board of Directors approved a new stock repurchase program that permits the purchase of up to $5.0 million of the Company's common stock through February 2025.
Removed paragraphs (12)
Previous report
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. 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. During the third quarter of 2023, the Company sold a portion of its ownership in eFC reducing its total interest in eFC from 40% to 10%.
Previous report
Director Appointment
Previous report
On July 26, 2023, Joseph Massaquoi, Jr. was appointed as a member of the Board of Directors of the Company and a member of the Audit Committee.
Previous report
Chief Financial Officer Transition
Previous report
On October 25, 2023, the Board of Directors of the Company appointed Raime Leeby Muhle as the Company’s Chief Financial Officer, effective December 4, 2023. Ms. Leeby Muhle will have overall responsibility for the Company’s financial organization, including financial planning, accounting, financial reporting, investor relations, treasury, internal audit and tax matters.
Previous report
Backlog at December 31, 2023 decreased $9.2 million from December 31, 2022. The decrease is primarily due to macroeconomic conditions causing lower demand for the Company's services.
Previous report
Indefinite-Lived Acquired Intangible Assets
Previous report
Sales and marketing expenses decreased $1.9 million, or 3.3%, from the same period in 2022. The decrease was primarily driven by a $3.0 million decrease in discretionary marketing expenses, which was partially offset by an increase of $0.8 million in operational costs, primarily discretionary marketing expenses.
Previous report
Depreciation expense decreased $0.6 million or 3.3% from the same period in 2022. The decrease was driven by the timing of assets being placed into service.
Previous report
Proceeds from settlement
Previous report
During the fourth quarter of 2022 the Company received proceeds from a legal settlement of $2.1 million.
Previous report
The Company's Board of Directors approved a stock repurchase program that permits the Company to repurchase its common stock. During the year ended December 31, 2023, the Company repurchased 1.7 million shares for $6.9 million. As of December 31, 2023, the value of shares available to be purchased under the current plan was $4.8 million. Management has discretion in determining the conditions under which shares may be purchased from time to time.
Reworded paragraphs (35)
Previous wording
We are a provider of software products, online tools and services that deliver career marketplaces to candidates and employers in the United States. DHI’s brands, Dice and ClearanceJobs, enable recruiters and hiring managers to efficiently search, match and connect with highly skilled technologists in specialized fields, particularly technology and active government security clearance. Professionals find ideal employment opportunities, relevant job advice and personalized data that help manage their technologists' lives.
Current wording
We are a provider of software products, online tools and services that deliver career marketplaces to candidates and employers in the United States. DHI’s brands, ClearanceJobs and Dice, enable recruiters and hiring managers to efficiently search, match and connect with highly skilled technologists in specialized fields, particularly technology and active government security clearance. Professionals find ideal employment opportunities, relevant job advice and personalized data that help manage their technologists' lives.
Previous wording
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.
Current wording
We have been in the recruiting and career development business for almost 35 years. Based on our operating structure, we have identified one reportable segment, Tech-focused, which includes the ClearanceJobs and Dice businesses and corporate related costs. The ClearanceJobs and Dice 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.
Previous wording
On August 7, 2023, Kevin Bostick resigned from his position as the Chief Financial Officer of the Company, effective September 1, 2023. Mr. Bostick served the Company through December 31, 2023 in order to help support a transition. Accordingly, on August 28, 2023 the Board of Directors of the Company appointed Art Zeile, the Company’s current President and Chief Executive Officer, to also serve as Interim Chief Financial Officer while the Company searched for a permanent Chief Financial Officer.
Current wording
Raime Leeby Muhle resigned from her position as Chief Financial Officer of the Company, effective November 14, 2024. Ms. Leeby Muhle served the Company through December 31, 2024 in order to help support a transition. On November 14, 2024 the Board of Directors of the Company appointed Greg Schippers, the Company’s Vice President of Finance and Controller, to also serve as Interim Chief Financial Officer. On January 28, 2025, the Board of Directors removed the interim title and appointed Mr. Schippers Chief Financial Officer. Also on January 28, 2025, Mr. E. Jack Connolly was appointed the Company's Chief Legal Officer. Mr. Connolly previously served as the Company's General Counsel.
Previous wording
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.
Current wording
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 ClearanceJobs and Dice recruitment package customers and the revenue, on average, that these customers generate. The tables below detail this customer data.
Previous wording
Dice had 5,492 recruitment package customers as of December 31, 2023, which was a decrease of 819, or 13%, year over year while average revenue per recruitment package customer for Dice increased 7% for the year ended December 31, 2023. The decrease in recruitment package customers was due to macroeconomic conditions causing customer counts to decline while the average annual revenue per recruitment package customer increased driven by strong retention rates as our larger recurring customers continue to renew with Dice. ClearanceJobs had 2,055 recruitment package customers as of December 31, 2023 compared to 2,064 as of December 31, 2022, a less than 1% decrease, and average revenue per recruitment package customer increased 11%. The increase in average annual revenue per recruitment package customer for ClearanceJobs was due to continued high demand for professionals with government clearance and consistent product releases and enhancements driving activity on the site.
Current wording
ClearanceJobs had 1,949 recruitment package customers as of December 31, 2024 compared to 2,055 as of December 31, 2023, a 5% decrease, and average revenue per recruitment package customer increased 15%. The decrease in recruitment package customers was due to lower renewals for ClearanceJobs' smaller customers as uncertainty continued around the timing of federal defense contracting. The increase in average annual revenue per recruitment package customer for ClearanceJobs was due to continued high demand for professionals with government clearance and consistent product releases and enhancements driving activity on the site, along with lower renewals for its smaller customers. Dice had 4,711 recruitment package customers as of December 31, 2024, which was a decrease of 781, or 14%, year over year while average revenue per recruitment package customer for Dice increased 4% for the year ended December 31, 2024. The decrease in recruitment package customers was due to macroeconomic conditions causing customer counts to decline while the average annual revenue per recruitment package customer increased driven by strong retention rates as our larger recurring customers continue to renew with Dice.
Previous wording
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.
Current wording
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 statements 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.
Previous wording
We record goodwill when the purchase price paid for an acquisition exceeds the estimated fair value of the net identified tangible and intangible assets acquired.
Current wording
We record goodwill when the purchase price paid for an acquisition exceeds the estimated fair value of the net identified tangible and intangible asset acquired.
Previous wording
The amount of goodwill as of December 31, 2023 allocated to the Tech-focused reporting unit was $128.1 million. The discount rate applied for the Tech-focused reporting unit in the October 1, 2023 analysis was 12.1%. 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, 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.
Current wording
The amount of goodwill as of December 31, 2024 allocated to the Tech-focused reporting unit was $128.1 million. The discount rate applied for the Tech-focused reporting unit in the October 1, 2024 analysis was 15.6%. 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, 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.
Previous wording
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 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.
Current wording
The indefinite-lived acquired intangible asset includes 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 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.
Previous wording
We determine whether the carrying value of our recorded indefinite-lived acquired intangible asset is impaired on an annual basis or more frequently if indicators of potential impairment exist. The impairment review process is performed on October 1 of each year and compares the fair value of the indefinite-lived acquired intangible asset to its carrying value. If the carrying value exceeds the fair value, an impairment loss is recorded. The impairment test performed as of October 1, 2023 resulted in the fair value of the Dice trademarks and brand name exceeding the carrying value by 51%. The Company's operating results attributable to the Dice trademarks and brand name for the fourth quarter of 2023 and estimated future results as of December 31, 2023 approximate the projections used in the October 1, 2023 analysis. As a result, the Company believes it is not more likely than not that the fair value of the Dice trademarks and brand name is less than the carrying value as of December 31, 2023. Therefore, no quantitative impairment test was performed as of December 31, 2023. No impairment was recorded during the years ended December 31, 2022 and 2021.
Current wording
We determine whether the carrying value of our recorded indefinite-lived acquired intangible asset is impaired on an annual basis or more frequently if indicators of potential impairment exist. The impairment review process is performed on October 1 of each year and compares the fair value of the indefinite-lived acquired intangible asset to its carrying value. If the carrying value exceeds the fair value, an impairment loss is recorded. The impairment test performed as of October 1, 2024 resulted in the fair value of the Dice trademarks and brand name exceeding the carrying value by 4%. The Company's operating results attributable to the Dice trademarks and brand name for the fourth quarter of 2024 and estimated future results as of December 31, 2024 approximate the projections used in the October 1, 2024 analysis. As a result, the Company believes it is not more likely than not that the fair value of the Dice trademarks and brand name is less than the carrying value as of December 31, 2024. Therefore, no quantitative impairment test was performed as of December 31, 2024. No impairment was recorded during the years ended December 31, 2024, 2023 and 2022.
Previous wording
The Company’s ability to achieve the projections used in the October 1, 2023 analysis may be impacted by, among other things, 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. 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. In the October 1, 2023 analysis, the Company utilized a relief from royalty rate method to value the Dice trademarks and brand name using a royalty rate of 4.0%, which is based on comparable industry licensing agreements and the profitability attributable to the Dice trademarks and brand name, and a discount rate of 13.1%.
Current wording
The Company’s ability to achieve the projections used in the October 1, 2024 analysis may be impacted by, among other things, 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. 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. In the October 1, 2024 analysis, the Company utilized a relief from royalty rate method to value the Dice trademarks and brand name using a royalty rate of 4.0%, which is based on comparable industry licensing agreements and the profitability attributable to the Dice trademarks and brand name, and a discount rate of 16.6%.
Previous wording
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, revenues, operating expense trends and capital expenditure requirements. Changes in our strategy 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.
Current wording
The determination of whether or not indefinite-lived acquired intangible asset has 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 asset. 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, revenues, operating expense trends and capital expenditure requirements. Changes in our strategy and/or changes in market conditions could significantly impact these judgments and require adjustments to recorded amounts of the intangible asset. If projections are not achieved, the Company could realize an impairment in the foreseeable future.
Previous wording
We experienced an increase in revenue of $2.2 million, or 1.5%. Revenue at Dice decreased by $4.4 million, or 4.1%, compared to the same period of 2022 as bookings performance in 2022 delivered revenue for Dice early in 2023 but macroeconomic conditions throughout 2023 drove lower new business activity and lower activity with Dice's non-annual products. Revenues for ClearanceJobs increased by $6.6 million, or 15.4%, as compared to the same period of 2022, driven by continued high demand for professionals with government clearance and consistent product releases and enhancements driving activity on the site.
Current wording
We experienced a decrease in revenue of $10.0 million, or 6.6%. Revenues for ClearanceJobs increased by $3.8 million, or 7.5%, as compared to the same period of 2023, driven by continued high demand for professionals with government clearance and consistent product releases and enhancements driving activity on the site. Revenue at Dice decreased by $13.7 million, or 13.5%, compared to the same period of 2023 due to macroeconomic conditions continuing to drive lower renewal rates, lower new business activity and lower activity with Dice's non-annual products.
Previous wording
Cost of revenues increased by $2.2 million, or 12.4%, driven by an increase of $1.2 million from higher compensation related costs and $1.0 million in operational costs, primarily related to the amortization of cloud computing costs.
Current wording
Cost of revenues increased by $0.4 million, or 2.2%, driven by lower capitalized labor of $0.7 million, which increases operating expenses, and an increase of $0.5 million in operational costs, primarily related to professional fees and amortization of cloud computing costs. The increases were partially offset by a $0.8 million decrease in compensation related costs due to lower headcount.
Previous wording
Product development expenses increased $0.1 million, or 0.6%, driven by a decrease of $1.2 million in compensation related costs, primarily related to lower headcount and bonus expense, which was offset by lower capitalized labor of $1.3 million as compared to the prior year period, which increases operating expenses.
Current wording
Product development expenses increased $1.1 million, or 6.2%, driven by lower capitalized labor of $2.4 million, which increases operating expenses. This increase was partially offset by a $1.3 million decrease in compensation related costs, primarily related to lower headcount.
Previous wording
General and administrative costs decreased $2.8 million or 8.2%, from prior year. The decrease was driven by a $1.9 million decrease in compensation related costs, primarily due to lower bonus expense in 2023, and a decrease of $1.0 million in other operating costs including recruiting, software, and insurance costs.
Current wording
General and administrative costs decreased $1.3 million or 4.0%, from prior year. The decrease was driven by a $1.9 million decrease in compensation related costs, primarily related to stock-based compensation and lower headcount, and $0.4 million in software subscriptions. The decrease was partially offset by a $1.0 million increase in operational costs, primarily professional fees.
Previous wording
During 2023, the Company recorded restructuring charges of $2.4 million as part of an organizational restructuring intended to streamline its operations, drive business objectives, reduce operating expenses and improve operating margins. The restructuring included a reduction of the Company’s then-current workforce by approximately 10%.
Current wording
During 2024 and 2023, the Company recorded restructuring charges of $1.1 million and $2.4 million, respectively, as part of organizational restructurings intended to streamline its operations, drive business objectives, reduce operating expenses and improve operating margins. The restructurings included a reduction of the Company’s then-current workforce by approximately 7% and 10% for years ended December 31, 2024 and 2023, respectively.
Previous wording
Operating income for the year ended December 31, 2023 was $6.3 million, a margin of 4.1%, compared to operating income of $5.6 million, a margin of 3.7%, for the same period in 2022. The increase in operating income and improved percentage margin was driven by higher revenues and a decrease in operational costs, as discussed above.
Current wording
Operating income for the year ended December 31, 2024 was $6.3 million, a margin of 4.5%, compared to operating income of $6.3 million, a margin of 4.1%, for the same period in 2023. The increase in operating income and higher percentage margin was driven by lower operating expenses, primarily sales and marketing, partially offset by lower revenue in the current year period, as discussed above.
Previous wording
During the years ended December 31, 2023 and 2022, the Company recorded $0.5 million and $1.6 million, respectively, of income related to its proportionate share of eFC's net income. The Company records its proportionate share of eFC's net income three months in arrears. See note 7 of the notes to consolidated financial statements for additional information.
Current wording
During the years ended December 31, 2024 and 2023, the Company recorded $0.2 million and $0.5 million, respectively, of income related to its proportionate share of eFinancialCareers's ("eFC") net income. The Company records its proportionate share of eFC's net income three months in arrears. See note 7 of the notes to consolidated financial statements for additional information.
Previous wording
During the year ended December 31, 2023, the Company recognized a $0.6 million gain from a partial sale of its 40% common share interest in eFC. During the year ended December 31, 2022, the Company recognized a $0.3 million gain from the sale of its 40% common share interest in Rigzone. See note 7 of the notes to consolidated financial statements for additional information.
Current wording
During the year ended December 31, 2023, the Company recognized a $0.6 million gain from a partial sale of its 40% common share interest in eFC. See note 7 of the notes to consolidated financial statements for additional information.
Previous wording
During the years ended December 31, 2023 and 2022, the Company recognized a $0.3 million and $2.3 million, respectively, loss related to the impairment of an investment. See note 7 of the notes to consolidated financial statements for additional information.
Current wording
During the years ended December 31, 2024 and 2023, the Company recognized losses of $0.4 million and $0.3 million, respectively, related to the impairment of an investment. See note 7 of the notes to consolidated financial statements for additional information.
Previous wording
Interest expense and other increased by $1.9 million, or 120.4%, from the same period in 2022 due to higher debt outstanding on our revolving credit facility during 2023 and higher interest rates.
Current wording
Interest expense and other decreased by $0.3 million, or 8.1%, from the same period in 2023, primarily due to lower debt outstanding on our revolving credit facility during the current period.
Previous wording
A reconciliation between the income tax expense at the federal statutory rate and the reported income tax expense (benefit) is summarized as follows:
Current wording
A reconciliation between the income tax expense at the federal statutory rate and the reported income tax expense is summarized as follows:
Previous wording
Our effective income tax rate was 3.6% and (16.1)% for the years ended December 31, 2023 and 2022, respectively. The 2023 tax rate differed from the federal statutory rate primarily because of permanent book/tax differences in basis related to the sale of investments, the expiration of a capital loss carryforward, a tax benefit related to the vesting of stock-based compensation, deduction limitations on executive compensation, tax credits for research and development, and an increase in the valuation allowance for capital loss carryforwards. The 2022 tax rate differed from the federal statutory rate primarily because of a tax benefit related to the vesting of stock-based compensation, tax credits for research and development, and an increase in the valuation allowance associated with an investment.
Current wording
Our effective income tax rate was 91.4% and 3.6% for the years ended December 31, 2024 and 2023, respectively. The 2024 tax rate differed from the federal statutory rate primarily due to the tax impact of stock-based compensation awards, state taxes, deduction limitations on executive compensation, and tax credits for research and development. The 2023 tax rate differed from the federal statutory rate primarily because of permanent book/tax differences in basis related to the sale of investments, the expiration of a capital loss carryforward, the tax impact of stock-based compensation awards, deduction limitations on executive compensation, tax credits for research and development, and an increase in the valuation allowance for capital loss carryforwards.
Previous wording
Diluted earnings per share was $0.08 and $0.09 for the years ended December 31, 2023 and 2022, respectively. The lower 2023 earnings per share was driven by slightly lower net income, partially offset by lower diluted shares outstanding.
Current wording
Diluted earnings per share was $0.01 and $0.08 for the years ended December 31, 2024 and 2023, respectively. The lower 2024 earnings per share was driven by higher tax expense, primarily the tax impacts of stock-based compensation.
Previous wording
We have financed our operations primarily through cash provided by operating activities and borrowings under our revolving credit facility. At December 31, 2023, we had cash and borrowings of $4.2 million and $38.0 million, respectively, compared to $3.0 million and $30.0 million, respectively, at December 31, 2022.
Current wording
We have financed our operations primarily through cash provided by operating activities and borrowings under our revolving credit facility. At December 31, 2024, we had cash and borrowings of $3.7 million and $32.0 million, respectively, compared to $4.2 million and $38.0 million, respectively, at December 31, 2023.
Previous wording
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 $62.0 million in borrowing capacity under our $100.0 million Credit Agreement at December 31, 2023, subject to certain availability limits including our consolidated leverage ratio, which generally limits borrowings to 2.5 times annual Adjusted EBITDA levels, as defined in the Credit Agreement. We believe that our existing cash and cash equivalents, cash generated from our continuing operations and available borrowings under our Credit Agreement will be sufficient to satisfy our currently anticipated cash requirements through at least the next 12 months and the foreseeable future thereafter. However, it is possible that one or more lenders under the Credit Agreement may refuse or be unable to satisfy their commitment to lend to us, we may violate one or more of our covenants or financial ratios contained in our Credit Agreement or we may need to refinance our debt and be unable to do so. In addition, our liquidity could be negatively affected by a decrease in demand for our products and services and the ability of our customers to pay for current or future services. 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.
Current wording
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 $56.0 million in borrowing capacity under our $100.0 million Credit Agreement at December 31, 2024, subject to certain availability limits including our consolidated leverage ratio, which generally limits borrowings to 2.5 times annual Adjusted EBITDA levels, as defined in the Credit Agreement. We believe that our existing cash and cash equivalents, cash generated from our continuing operations and available borrowings under our Credit Agreement will be sufficient to satisfy our currently anticipated cash requirements through at least the next 12 months and the foreseeable future thereafter. However, it is possible that one or more lenders under the Credit Agreement may refuse or be unable to satisfy their commitment to lend to us, we may violate one or more of our covenants or financial ratios contained in our Credit Agreement or we may need to refinance our debt and be unable to do so. In addition, our liquidity could be negatively affected by a decrease in demand for our products and services and the ability of our customers to pay for current or future services. 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.
Previous wording
Cash flows from operating activities is driven by earnings and is dependent on the amount and timing of billings and cash collections from our customers. Cash flows from operating activities primarily consists of net income adjusted for certain non-cash items, including depreciation, changes in deferred tax assets and liabilities, stock based compensation, impairments, and the effect of changes in working capital. Net cash flows from operating activities were $21.3 million and $36.0 million for the years ended December 31, 2023 and 2022, respectively, a decrease of $14.7 million. Cash inflow from operations is driven by earnings and is dependent on the amount and timing of payments to vendors and employees and billings to and cash collections from our customers. Cash provided by operating activities during the year ended December 31, 2023 decreased as compared to the prior year due to the amount and timing of bonus payments, of payments to vendors, and of billings to and cash collections from our customers.
Current wording
Cash flow from operating activities is driven by earnings and is dependent on the amount and timing of billings and cash collections from our customers. Cash flow 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 $21.0 million and $21.3 million for the years ended December 31, 2024 and 2023, respectively, a decrease of $0.3 million. Cash inflow from operations is driven by earnings and is dependent on the amount and timing of payments to vendors and employees and billings to and cash collections from our customers. Cash provided by operating activities during the year ended December 31, 2024 approximated the prior year as decreases in billings and cash collections from customers were offset by reductions to wages and payments to vendors.
Previous wording
During the year ended December 31, 2023, cash used in investing activities was $15.3 million compared to $17.7 million of cash used in investing activities during the year ended December 31, 2022. Cash used in investing activities during the year ended December 31, 2023 is comprised of $20.3 million of purchases of fixed assets, partially offset by $5.0 million of cash received from sale of investment. Cash used in investing activities during the year ended December 31, 2022 is primarily comprised of $18.0 million of purchases of fixed assets, which is primarily comprised of capitalized development costs as the Company continues to invest in its products.
Current wording
During the year ended December 31, 2024, cash used in investing activities was $13.9 million compared to $15.3 million of cash used in investing activities during the year ended December 31, 2023. Cash used in investing activities during the year ended December 31, 2024 is comprised of $13.9 million of purchases of fixed assets. Cash used in investing activities during the year ended December 31, 2023 is comprised of $20.3 million of purchases of fixed assets, partially offset by $5.0 million of cash received from sale of investment. Included in fixed asset purchases for the years ended December 31, 2024 and 2023 was $13.9 million and $20.3 million, respectively, of capitalized development costs, which includes capitalized software costs and website development costs.
Previous wording
Cash used in financing activities during the year ended December 31, 2023 was $4.8 million primarily due to cash uses of $12.8 million, net, related to share repurchases, partially offset by $8.0 million of net proceeds on long-term debt. Cash used during the year ended December 31, 2022 was $16.9 million primarily due to cash uses of $23.4 million, net, related to share repurchases and $0.5 million from financing costs paid, partially offset by $7.0 million of net proceeds on long-term debt.
Current wording
Cash used in financing activities during the year ended December 31, 2024 was $7.6 million primarily due to cash uses of $1.6 million, net, related to share repurchases and $6.0 million of net payments on long-term debt. Cash used during the year ended December 31, 2023 was $4.8 million primarily due to cash uses of $12.8 million, net, related to share repurchases, partially offset by $8.0 million of net proceeds on long-term debt.
Previous wording
We have a $100 million revolving credit facility, which matures June 2027, with $38.0 million of outstanding borrowings on the facility at December 31, 2023, leaving $62.0 million available for future borrowings, subject to the terms of the Credit Agreement. Borrowings under the Credit Agreement denominated in U.S. dollars bear interest, payable at least quarterly, at the Company’s option, at the Secured Overnight Financing Rate ("SOFR") or a base rate, plus a margin. Borrowings under the credit agreement denominated in pounds sterling, if any, bear interest at the Sterling Overnight Index Average ("SONIA") rate plus a margin. The margin ranges from 2.00% to 2.75% on SOFR and SONIA loans and 1.00% to 1.75% on base rate loans, determined by the Company’s most recent consolidated leverage ratio, plus an additional spread of 0.10%. The Company incurs a commitment fee ranging from 0.35% to 0.50% on any unused capacity under the revolving loan facility, determined by the Company’s most recent consolidated leverage ratio. Assuming an interest rate of 7.71% (the rate in effect on December 31, 2023) on our current borrowings, interest payments are expected to be $2.9 million per year in years 2024 through 2026 and $1.5 million in 2027. The Credit Agreement contains various affirmative and negative covenants and also contains certain financial covenants, including a consolidated leverage ratio and a consolidated interest coverage ratio. As of December 31, 2023, the Company was in compliance with all of the financial covenants under the Credit Agreement. Refer to Note 11 of the notes to consolidated financial statements and Item 7A. "Quantitative and Qualitative Disclosures about Market Risk - Interest Rate Risk."
Current wording
We have a $100 million revolving credit facility, which matures June 2027, with $32.0 million of outstanding borrowings on the facility at December 31, 2024, leaving $56.0 million available for future borrowings, 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. Borrowings under the Credit Agreement denominated in U.S. dollars bear interest, payable at least quarterly, at the Company’s option, at the Secured Overnight Financing Rate ("SOFR") or a base rate, plus a margin. Borrowings under the credit agreement denominated in pounds sterling, if any, bear interest at the Sterling Overnight Index Average ("SONIA") rate plus a margin. The margin ranges from 2.00% to 2.75% on SOFR and SONIA loans and 1.00% to 1.75% on base rate loans, determined by the Company’s most recent consolidated leverage ratio, plus an additional spread of 0.10%. The Company incurs a commitment fee ranging from 0.35% to 0.50% on any unused capacity under the revolving loan facility, determined by the Company’s most recent consolidated leverage ratio. Assuming an interest rate of 6.46% (the rate in effect on December 31, 2024) on our current borrowings, interest payments are expected to be $2.1 million per year in years 2025 through 2026 and $1.0 million in 2027. The Credit Agreement contains various affirmative and negative covenants and also contains certain financial covenants, including a consolidated leverage ratio and a consolidated interest coverage ratio. As of December 31, 2024, the Company was in compliance with all of the financial covenants under the Credit Agreement. Refer to Note 11 of the notes to consolidated financial statements and Item 7A. "Quantitative and Qualitative Disclosures about Market Risk - Interest Rate Risk."
Previous wording
The Company has operating leases for corporate office space and certain equipment. The leases have terms from one year to ten years, some of which include options to renew the lease, and are included in the lease term when it is reasonably certain that the Company will exercise the option. No leases include options to purchase the leased property. As of December 31, 2023 the value of our lease right-of-use asset was $4.8 million and the value of our lease liability was $8.5 million. See also Note 6 of the notes to consolidated financial statements for further information.
Current wording
The Company has operating leases for corporate office space and certain equipment. The leases have terms from one year to ten years, some of which include options to renew the lease, and are included in the lease term when it is reasonably certain that the Company will exercise the option. No leases include options to purchase the leased property. As of December 31, 2024 the value of our lease right-of-use asset was $6.5 million and the value of our lease liability was $10.6 million. See also Note 6 of the notes to consolidated financial statements for further information.
Previous wording
As of December 31, 2023, we recorded approximately $1.0 million of unrecognized tax benefits as liabilities, and we are uncertain if or when such amounts may be settled. Related to the unrecognized tax benefits considered permanent differences, we have also recorded a liability for potential penalties and interest. Included in the balance of unrecognized tax benefits at December 31, 2023 are $1.0 million of tax benefits that would affect the effective tax rate if recognized. The Company believes it is reasonably possible that as much as $0.2 million of its unrecognized tax benefits may be recognized in the next twelve months.
Current wording
As of December 31, 2024, we recorded approximately $1.1 million of unrecognized tax benefits as liabilities, and we are uncertain if or when such amounts may be settled. Related to the unrecognized tax benefits considered permanent differences, we have also recorded a liability for potential penalties and interest. Included in the balance of unrecognized tax benefits at December 31, 2024 are $1.1 million of tax benefits that would affect the effective tax rate if recognized. The Company believes it is reasonably possible that as much as $0.2 million of its unrecognized tax benefits may be recognized in the next twelve months.
Previous wording
We anticipate capital expenditures in 2024 to be approximately $15 million to $17 million. We intend to use operating cash flows to fund capital expenditures.
Current wording
We anticipate capital expenditures in 2025 to be approximately $9 million to $11 million. We intend to use operating cash flows to fund capital expenditures.
Previous wording
Any slowdown in recruitment activity that occurs could negatively impact our revenues and results of operations. 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 database licenses and have a positive impact on our revenues and results of operations. Based on historical trends, improvements in labor markets and the need for our services generally lag behind overall economic improvements. 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.
Current wording
Any slowdown in recruitment activity that occurs could negatively impact our revenues and results of operations. 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 database licenses and have a positive impact on our revenues and results of operations. Based on historical trends, improvements in labor markets and the need for our services generally lag behind overall economic improvements. 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, typically from one to twelve months.