##### Table of Contents

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SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





---




FORM 10-Q





xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE


SECURITIES
EXCHANGE ACT OF 1934





For the quarterly period ended September 30, 2002





OR





 ̈ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE


SECURITIES EXCHANGE ACT OF 1934





Commission file number 0-25107





Dice Inc.


(Exact name of Registrant as specified in its charter)





Delaware

13-3899472(State or other jurisdiction of

(I.R.S. Employer Identification No.)incorporation or organization)3 Park Avenue,

10016New York, New York

(including Zip Code)(Address of principal executive offices)





(212) 725-6550


(Registrants telephone number, including area code)





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x    No  ̈





As of October 22, 2002, the
registrant had outstanding 11,167,064 shares of common stock, $.01 par value.





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##### Table of Contents

DICE INC.





TABLE OF CONTENTS





Page No.PART I.

FINANCIAL INFORMATIONItem 1.

Condensed Consolidated Financial Statements:Condensed Consolidated Balance Sheets as of September 30, 2002 and December 31, 2001

3Condensed Consolidated Statements of Operations for the three and nine month periods ended September 30, 2002 and 2001

4Condensed Consolidated Statements of Cash Flows for the nine month periods ended September 30, 2002 and 2001

5Notes to Condensed Consolidated Financial Statements

6Item 2.

Managements Discussion and Analysis of Financial Condition and Results of Operations

12Item 3.

Quantitative and Qualitative Disclosures About Market Risk

19Item 4.

Controls and Procedures

19PART II.

OTHER INFORMATIONItem 1.

Legal Proceedings

20Item 2.

Changes in Securities and Use of Proceeds

20Item 3.

Defaults Upon Senior Securities

20Item 4.

Submission of Matters to a Vote of Security Holders

20Item 5.

Other Information

20Item 6.

Exhibits and Reports on Form 8-K

20Signatures

22Certifications

22




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##### Table of Contents

PART IFINANCIAL INFORMATION





Item 1.    Condensed Consolidated Financial Statements





DICE INC.





CONDENSED CONSOLIDATED BALANCE SHEETS


(in thousands, except per share data)





September 30, 2002


December 31, 2001(unaudited)ASSETS:Current assets:Cash and cash equivalents

$
6,034


$
20,225Marketable securities


3,002



4,608Accounts receivable, net of allowances of $667 and $1,253, respectively


1,702



2,708Prepaid expenses and other current assets


2,857



3,872Total current assets


13,595



31,413Fixed assets, net


8,997



9,993Intangible assets, net


3,280



5,222Goodwill


16,605



23,023Restricted cash


1,057



1,057Other assets, net


1,350



2,295Total assets

$
44,884


$
73,003LIABILITIES AND STOCKHOLDERS DEFICIT:Current liabilities:Accounts payable and accrued expenses

$
4,874


$
6,457Accrued interest


908



2,178Deferred revenue


5,053



5,506Amounts due under acquisition agreements






4,000Notes and leases payablecurrent portion


858



1,237Total current liabilities


11,693



19,378Long term debt


69,434



71,200Leases payable


509



793Other liabilities


845



815Commitments and contingencies (Note 9)Stockholders deficit:Common stock, par value $.01; 75,000 authorized; 11,106 and 10,659 issued, respectively


111



107Additional paid in capital


126,587



126,204Accumulated comprehensive other income (loss)


15



(4
)Treasury stock at cost, 5 and 9 shares, respectively


(200
)


(213
)Accumulated deficit


(164,110
)


(145,277
)Total stockholders deficit


(37,597
)


(19,183
)Total liabilities and stockholders deficit

$
44,884


$
73,003





The accompanying notes are an integral part of these condensed consolidated
financial statements.







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##### Table of Contents

DICE INC.





CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


(unaudited, in thousands except per share data)





Three months ended September
30,


Nine months ended September
30,2002


2001


2002


2001Revenues

$
7,823


$
13,019


$
25,330


$
45,641Cost of revenues


871



1,157



2,646



3,855Gross profit


6,952



11,862



22,684



41,786Operating expenses:Product development


461



1,128



1,587



3,797Sales and marketing


4,346



5,938



14,343



23,656General and administrative


2,082



2,769



6,335



8,121Depreciation


1,197



1,000



3,719



2,736Amortization


615



4,223



1,942



12,241Restructuring and one-time charges, net


1,025







1,025



270Total operating expenses


9,726



15,058



28,951



50,821Loss from operations


(2,774
)


(3,196
)


(6,267
)


(9,035
)Gain on repurchase of convertible notes, net


488



5,609



488



5,609Write-off of convertible notes repurchase options


(2,821
)






(2,821
)


Interest expense


(1,364
)


(1,533
)


(4,154
)


(4,675
)Interest and other income


61



278



338



1,204Net income (loss) before cumulative effect of change in accounting principle


(6,410
)


1,158



(12,416
)


(6,897
)Cumulative effect of change in accounting principle










(6,418
)


Net income (loss)

$
(6,410
)

$
1,158


$
(18,834
)

$
(6,897
)Net income (loss) per share before cumulative effect of change in accounting principle per share

$
(0.58
)

$
0.11


$
(1.14
)

$
(0.66
)Cumulative effect of change in accounting principle per share










(0.59
)


Basic and diluted net income (loss) per share

$
(0.58
)

$
0.11


$
(1.73
)

$
(0.66
)Weighted average shares of common stock outstanding


11,035



10,593



10,913



10,497








The accompanying notes are an
integral part of these condensed consolidated financial statements.




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##### Table of Contents

DICE INC.





CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


(unaudited, in thousands)





Nine Months Ended September
30,2002


2001Cash flows used in operating activities:Net loss

$
(18,834
)

$
(6,897
)Adjustments to reconcile net loss to net cash used in operating activities:Impairment of goodwill (change in accounting principle)


6,418



Depreciation


3,719



2,736Amortization of intangible assets


1,942



12,241Amortization of deferred financing costs


362



411Amortization of barter advertising costs


540



540Provision for doubtful accounts


352



1,512Non-cash reversal of accrued restructuring charges






(827
)Write-off of convertible notes repurchase options and related costs


2,821



Loss on write-down of fixed assets






530Gain on repurchase of convertible notes, net


(488
)


(5,609
)Charge related to issuance of restricted stock and stock options


145



108Changes in operating assets and liabilities:Accounts receivable


654



2,808Prepaid expenses and other assets


1,034



(1,483
)Accounts payable and accrued expenses


(1,644
)


(3,963
)Accrued interest


(1,270
)


(1,503
)Deferred revenue


(453
)


413Accrued restructuring charge


(42
)


(7,611
)Other, net


107



(89
)Net cash used in operating activities


(4,637
)


(6,683
)Cash flows provided by (used in) investing activities:Sale of investment securities


4,003



6,180Purchase of investment securities


(2,356
)


Purchase of fixed assets


(2,483
)


(4,889
)Restricted cash






(500
)Net cash provided by (used in) investing activities


(836
)


791Cash flows used in financing activities:Proceeds from issuance of common stock, net


242



459Payments of obligations under acquisition agreements


(4,000
)


(5,310
)Payments for convertible note repurchase options and related costs


(2,821
)


Payments of principal on capital leases and notes payable


(903
)


(1,522
)Payments for repurchase of convertible notes


(1,236
)


(2,982
)Reimbursements for capital leases payments






179Net cash used in financing activities


(8,718
)


(9,176
)Net change in cash and cash equivalents for the period


(14,191
)


(15,068
)Cash and cash equivalents, beginning of period


20,225



40,157Cash and cash equivalents, end of period

$
6,034


$
25,089Summary of non-cash transactions:Acquisition of computer equipment and software through capital leases, net of trade in

$
240


$
1,395





The accompanying notes are an integral part of these condensed consolidated
financial statements.




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##### Table of Contents

DICE INC.





NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(unaudited)





1.    The Company and Basis of Presentation





Dice Inc. (Dice or the Company), a Delaware corporation, provides online technology recruiting and career development services. Dice provides services to hire, train and retain technology professionals through
dice.com, an online job board for technology professionals, and through MeasureUp, a provider of test preparation products for technology-related professional certifications.





Through December 26, 2000, Dice also owned and operated an online advertising and subscription-supported content business (the Content Business). The Content
Business of Dice provided information to information technology professionals. On December 26, 2000, Dice completed the sale of certain assets of the Content Business to Jupitermedia Corporation (formerly known as INT Media Group, Inc. and
internet.com Corporation) (Jupitermedia). These assets primarily consisted of websites, certain computer equipment, furniture and fixtures and leasehold improvements related to the operations of those websites. In addition, on December
26, 2000, Dice announced that it was exiting the remaining content businesses that were not sold to Jupitermedia, which primarily included its subscription-based online reference library, ITKnowledge.com.





Dice has sustained net losses and negative cash flows from operations since its inception. Dices ability to meet its obligations in
the ordinary course of business is dependent upon its ability to establish profitable operations or raise additional financing through public or private equity financings, or other sources of financings to fund operations. Management believes that
the Companys current cash position and future cash flows from operations will be sufficient to fund the Companys operations for at least the next twelve months. However, there can be no assurances that the Company will achieve its
planned results. If anticipated results are not achieved, management has the ability to delay or reduce certain of its expenditures so as to not require additional financing, if such financing is not available on terms acceptable to the Company.
However, a majority of the Companys costs are fixed in nature and, therefore, if demand for the Companys services is lower than anticipated in the near term, that decrease in demand will lower the availability of funds to the Company to
fund its operations.





The accompanying unaudited condensed consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the
information required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of management, all adjustments, consisting only of normal recurring accruals, considered necessary for a
fair presentation have been included. The results for the interim periods presented are not necessarily indicative of the results that may be expected for any future period. The following information should be read in conjunction with the financial
statements and notes thereto included in Dices Annual Report on Form 10-K for the year ended December 31, 2001.





Certain amounts from the prior period have been reclassified to conform to the current period presentation.





2.    Use of Estimates





The preparation of financial statements in
conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and
liabilities at the date of the condensed consolidated financial statements, and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Dices significant estimates include the
useful lives and valuations of fixed assets, goodwill and certain intangible assets, the accounts receivable allowance for doubtful accounts and the income tax valuation allowance.




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##### Table of Contents



DICE INC.





NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)


(unaudited)







3.    Recent Accounting Pronouncements





In April 2002, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No.145,
Rescission of FASB Statements No. 4, 44, and 62, Amendment of FASB Statement No. 13, and Technical Corrections (FAS 145). In most instances, FAS 145 will require gains and losses on extinguishments of debt to be classified as
income or loss from continuing operations rather than as extraordinary items as previously required under FASB Statement No. 4, Reporting Gains and Losses from Extinguishment of Debt. This provision of FAS 145 is effective for fiscal
years beginning after May 15, 2002, with early application encouraged. Upon adoption, any gain or loss on extinguishment of debt previously classified as an extraordinary item in prior periods presented that does not meet the criteria of Accounting
Principles Board Opinion No. 30 for such classification should be reclassified to conform to the provisions of FAS 145. The Company adopted FAS 145 in the quarter ended September 30, 2002, and, therefore, reclassified a net gain of $5.6 million
recognized on the early extinguishment of debt in the quarter ended September 30, 2001. Additionally, the Company recorded a gain of $0.5 million in accordance with FAS 145 in the quarter ended September 30, 2002.





4.    Deferred Purchase Obligations





Under terms of the acquisition agreement for D&L Online, Inc., which owned and operated the dice.com website and was acquired in February 1999, the Company had earnout obligations to the
sellers of D&L Online, Inc. based on the attainment of certain financial targets. Based on results achieved in fiscal years 1999, 2000 and 2001, $4.0 million was paid in each of April 2000, April 2001 and April 2002, totaling $10.0 million in
cash and $2.0 million in common stock, including $4.0 million paid in cash in April 2002.





Under the terms of the
acquisition agreement for MeasureUp, Inc., which was acquired in February 2000, the Company has certain earnout obligations to the sellers of MeasureUp, Inc. Based on results achieved by MeasureUp in 2000, the Company paid $1.2 million in cash to
the sellers of MeasureUp in April 2001. The financial targets were not achieved in 2001, and, therefore, the Company did not have any earnout obligations related to 2001. The Company may have remaining earnout obligations based on the achievement of
certain financial targets during 2002 of up to an aggregate of $3.0 million that would be payable in 2003 in cash and/or common stock, at the Companys option.





5.    Intangible Assets and Goodwill





In June 2001, the FASB issued Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets (FAS 142), effective for fiscal years beginning after December 15, 2001. Under the new
rules, goodwill and intangible assets deemed to have indefinite lives are no longer amortized, but are subject to annual impairment tests in accordance with FAS 142. Other intangible assets continue to be amortized over their useful lives.





The Company applied the FAS 142 rules in accounting for goodwill and other intangible assets in the first quarter
of 2002. During the second quarter of 2002 the Company completed the first annual impairment tests. As of January 1, 2002, the fair value of two of the Companys reporting units, MeasureUp and CCPrep, did not exceed the carrying value of these
reporting units and an impairment charge of $6.4 million was recorded as a cumulative effect of change in accounting principle.




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##### Table of Contents



DICE INC.





NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)


(unaudited)







The following adjusts reported net income (loss) and earnings (loss)
per share to exclude goodwill amortization:





Three Months Ended September 30, 2001

Nine Months Ended September 30, 2001(unaudited, in thousands, except per share data)Reported net income (loss)

$
1,158

$
(6,897
)Add: goodwill amortization


3,319


9,527Adjusted net income

$
4,477

$
2,630Reported basic and diluted net income (loss) per share

$
0.11

$
(0.66
)Add: goodwill amortization


0.31


0.91Adjusted basic and diluted net income per share

$
0.42

$
0.25





Intangible assets, related to the D&L Online acquisition in
February 1999 under which dice.com was acquired, consists of the following:





Customer List


Trade Name





Total(unaudited, in thousands)As of September 30, 2002:Intangible assets

$
8,100


$
4,200






$
12,300Less: accumulated amortization


(5,940
)


(3,080
)






(9,020
)Intangible assets, net

$
2,160


$
1,120






$
3,280Customer List


Trade Name


Non-Compete Covenant


Total(unaudited, in thousands)As of December, 31, 2001:Intangible assets

$
8,100


$
4,200


$
3,500


$
15,800Less: accumulated amortization


(4,725
)


(2,450
)


(3,403
)


(10,578
)Intangible assets, net

$
3,375


$
1,750


$
97


$
5,222





The Company expects amortization expense to be $2.6 million, $2.5
million and $0.2 million for the years ended December 31, 2002, 2003 and 2004, respectively. Also, during the period ended March 31, 2002 the non-compete covenant became fully amortized and was written off.





6.    Long Term Debt and Convertible Notes Repurchase Options





On April 3, 2002, Dice announced that it negotiated the right to repurchase $53.02 million face amount of its 7% convertible subordinated notes due January 2005 (the
Convertible Notes) from three of its largest noteholders, upon certain change of control events, at prices ranging from 70% to 110% of face value, plus accrued interest through the date of repurchase. The actual repurchase price would
depend upon the amount received by the Company or its stockholders as a result of a change of control event, increasing to the maximum as proceeds to stockholders increased. In addition, the Company repurchased $1.76 million aggregate principal
amount of the Convertible Notes from one of the noteholders for $1.24 million cash, plus accrued interest. In




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##### Table of Contents



DICE INC.





NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)


(unaudited)




consideration for entering into these agreements, the Company paid $1.86 million in the aggregate to three noteholders and incurred $960,000 in transaction costs for professional fees related to
these agreements. The Company recorded this payment and the related transaction costs as a deferred asset and accounted for it as a derivative security until the repurchase options expired on October 3, 2002 without being exercised. The Company
wrote off the deferred asset balance of $2.82 million during the quarter ended September 30, 2002.





The
recognition of the gain of $0.5 million, net of the write-off of deferred financing costs, on the repurchase of debt was deferred until the option period expired, as the purchase price of the debt was subject to change had the options been exercised
in a change of control event, and was recognized during the quarter ended September 30, 2002.





7.    Fair Value of
Financial Instruments





The fair value of the Companys Convertible Notes is estimated based on a quoted
market price of the Convertible Notes as of September 30, 2002. The carrying amount is $69.4 million, and the fair value was approximately $30.6 million as of September 30, 2002.





8.    Stock Option Grants





On December
7, 2001, the Compensation Committee approved, subject to stockholder approval, a one-time grant to Mr. Scot Melland, President and Chief Executive Officer of the Company, of additional stock options to purchase 350,000 shares of the Companys
common stock at $0.97 per share, the closing price of the Companys common stock on the day immediately preceding the date of grant (the December Grant). The options vest over a period of four years, with twenty-five percent (25%)
vesting upon the first anniversary of the grant and six and one-quarter percent (61/4%) vesting quarterly
thereafter, and are exercisable until the tenth anniversary of the date of grant. The December Grant was not made under the 1998 Plan, which limits the number of options that can be granted under it in any fiscal year to any employee to options for
600,000 shares of common stock. As a part of Mr. Mellands employment agreement with the Company, Mr. Melland was granted in April 2001 under the 1998 Plan options to purchase 600,000 shares of common stock, as well as additional options to
purchase 97,391 shares of common stock outside of the 1998 Plan, in each case at an exercise price of $2.43 per share, the closing price of the Companys common stock on the day immediately preceding the date of grant. The December Grant was
made subject to obtaining stockholder approval of the grant and was submitted to a stockholder vote at the June 2002 Annual Meeting of Stockholders, at which time the stockholders approved the grant.





As a result of this transaction the Company incurred a non-cash stock compensation charge of $445,000 that will be recognized over the
four year vesting term of the options through December 2005 and is retroactive to the grant date of December 7, 2001. The charge was calculated as the difference between the exercise price at the time of the grant of $0.97 and the closing price of
Dice common stock at the time the grant was approved of $2.24, multiplied by the number of options granted. Non-cash charges of $63,000 and $28,000 were recognized in the quarters ended June 30, and September 30, 2002, respectively.




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##### Table of Contents



DICE INC.





NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)


(unaudited)







9.    Commitments and Contingencies





Litigation





On July 5, 2001, Mr. Scott Wainner commenced an arbitration proceeding against the Company before the American Arbitration Association. Mr. Wainner asserted various claims under an Asset Purchase Agreement, dated July 13, 1999
between the Company and Mr. Wainner relating to the purchase by the Company of certain websites. Mr. Wainner claimed that he was entitled to certain additional payments under the Asset Purchase Agreement and also alleged that the Company had
breached other obligations to him. In his demand for arbitration, Mr. Wainner sought damages in the amount of $2.0 million, plus interest and other amounts.





On August 7, 2002, the arbitrator awarded Mr. Wainner $1.0 million of the total $2.0 million sought by Mr. Wainner in the arbitration, plus certain costs (the Award). Following the issuance
of the Award, Mr. Wainner began a court proceeding against the Company in which he sought to confirm the Award and obtain a judgment against the Company. At a hearing on October 16, 2002, the court indicated that it would be granting Mr.
Wainners request and entering such a judgment. To date, the Company is not aware that the judgment has been so entered and no payment has been made.





Pursuant to the terms of an Asset Purchase Agreement entered into in December 2000 between EarthWeb Inc. (now known as Dice Inc.) and internet.com Corporation (now known as Jupitermedia Corporation),
the Company transferred the websites in question to Jupitermedia. The Company believes it has certain rights to indemnification from Jupitermedia under the Asset Purchase Agreement between them, and on September 9, 2002, filed a third-party
complaint against Jupitermedia seeking indemnification of the Company by Jupitermedia and asking the court to direct Jupitermedia to pay all damages relating to the Award. Due to the inherent uncertainties of litigation, the Company cannot predict
the outcome of this litigation with any certainty.





During the quarter ended September 30, 2002, the Company
recorded a $1.03 million charge for the Award, as the probability of recovery from Jupitermedia is not determinable and thus the entire amount of the Award was recorded as an expense.





On November 5, 2001, a class action lawsuit was filed in the United States District Court for the Southern District of New York against the Company, certain of its present
and former directors and former officers, and the underwriters of the Companys initial public offering and secondary offering (J.P. Morgan Securities, Inc., Bear Stearns & Co., Inc., Volpe Brown Whelan & Co., LLC and Wit Capital
Corporation). The complaint alleges, among other things, that the underwriters of the Companys initial public offering and secondary offering violated the securities laws by failing to disclose certain alleged compensation arrangements (such
as undisclosed commissions or stock stabilization practices) in the registration statements for the offerings. The Company and certain of its present and former directors and former officers are named in the complaints pursuant to Section 11 of the
Securities Act of 1933. Similar actions have been filed against more than 300 other issuers and their underwriters relating to offerings since 1998. The Company intends to defend the case vigorously. Due to the inherent uncertainties of litigation,
the Company cannot predict the outcome of this litigation with any certainty. An adverse outcome in this litigation could have a material adverse effect on the Companys business.





The Company is party to other claims and litigations that arise in the normal course of business. The Company believes that the ultimate outcome of those other claims and
litigation will not have a material effect on the Companys financial position or results of operations.




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##### Table of Contents



DICE INC.





NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)


(unaudited)







Lease Obligations and Marketing Agreements





The Company has long term obligations for operating leases (principally for its leased facilities in Urbandale, Iowa) in the
aggregate of $11.8 million through 2011, of which $0.4 million is payable during the remainder of 2002, and obligations under capital leases aggregating $1.4 million through 2005, including interest, of which $0.2 million is payable during the
remainder of 2002. In September 2002, the Company entered into an amended lease agreement with the landlord of its Urbandale, Iowa facility under which the Company will relinquish all rights to 25,000 sq. ft. of space as of January 1, 2003 in
exchange for paying an aggregate of $198,000 during the period January 1, 2003 through December 31, 2007, which amounts are reflected in the lease obligations above.





In addition, the Company has commitments under various marketing arrangements to pay an aggregate of $6.4 million through 2004, of which approximately $1.4 million is
payable during the remainder of 2002.





10.    Comprehensive Loss





Comprehensive loss represents net loss plus the results of certain stockholders deficit changes not reflected in the Statements of
Operations. The components of comprehensive loss, net of tax, are as follows:





Three Months Ended September 30,


Nine Months Ended September
30,2002


2001


2002


2001(unaudited, in thousands)Net loss

$
(6,410
)

$
1,158


$
(18,834
)

$
(6,897
)Unrealized appreciation (depreciation) of available-for-sale securities


1



(17
)


19



(16
)Comprehensive loss

$
(6,409
)

$
1,141


$
(18,815
)

$
(6,913
)




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##### Table of Contents

Item 2.    Managements Discussion and Analysis of Financial Condition and Results of Operations





The following discussion of the financial condition and results of operations of Dice should be read in conjunction with the Managements Discussion and Analysis of Financial Condition and Results
of Operations and the Consolidated Financial Statements and the Notes thereto included in the Companys Annual Report on Form 10-K for the year ended December 31, 2001. This quarterly report on Form 10-Q contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934 (the Exchange Act), as amended. These forward-looking statements involve risks and uncertainties and
actual results could differ materially from those discussed in the forward-looking statements. All forward-looking statements included in this document are made as of the date hereof, based on information available to Dice as of the date thereof,
and Dice assumes no obligation to update any forward-looking statement or risk factors, except as required by law. For a discussion of risks related to our financial condition and business model, see Item 1 Risk Factors included in the
Companys Annual Report on Form 10-K for the year ended December 31, 2001.





We (Dice or the
Company) are an industry leader in online technology recruiting and career development, providing direct employers, staffing companies and recruiting firms with access to a broad and unique talent pool of technology professionals. We
offer online recruiting and career development services to both technology professionals and the companies that depend on them through dice.com, a leading online technology job board, and through MeasureUp, a leading online provider of
technology certification test preparation products.





We support organizations across industries by helping them
hire, train and retain the technology talent needed to compete in todays technology-intensive economy. Employers and recruiters of technology professionals pay for access to our online recruiting services to help them find the right technology
employee or contractor. These services include recruitment advertising through job postings on dice.com and access to our database of technology job seekers.





Technology job seekers use Dice to help manage their careers by posting their resumes on dice.com, searching dice.coms database of permanent, contract
and consulting technology job postings, and using our technology career resources, including MeasureUps technology certification test preparation products.





The job postings available in our database, from both technology and non-technology companies, include a wide variety of technology positions from programmers, software engineers and systems
administrators to chief information and technology officers, as well as job postings for engineering and technical professionals.





Through December 26, 2000, we owned and operated an online advertising and subscription-supported content business (the Content Business). The Content Business provided a comprehensive set of information to information
technology professionals serving each of the major vertical markets in the information technology industry, including enterprise management, networking and telecommunications, software and Internet development, and hardware and systems.





On December 26, 2000, we completed the sale of certain assets of our Content Business, which primarily consisted
of websites, certain computer equipment, and furniture, fixtures and leasehold improvements related to the operations of those websites, to Jupitermedia Corporation (formerly known as INT Media Group, Inc. and internet.com Corporation)
(Jupitermedia) and announced that we were exiting our remaining content businesses which primarily included our subscription-based online reference library, ITKnowledge.com.





Results of Operations





Revenue.    Our paid listing revenue is derived from the sale of technology job listings to recruiters and employers on the dice.com website. We train our customers on the use of the website and
provide ongoing support to help them maximize their use via a telesales force and customer service team. The price for this




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service is generally based on the number of jobs a customer posts, the number of locations to which dice.com provides access, and the number of users at each location.





We also generate revenue through MeasureUp, which provides online certification test preparation and related products and also
offers instructor-led training classes. Technology professionals preparing for certification exams use these products at training centers or individually online and attend our training classes. MeasureUp provides online practice exams to help
prepare technology professionals for the actual certification exams.





Revenue for the three months ended September
30, 2002 decreased $5.2 million to $7.8 million from $13.0 million for the three months ended September 30, 2001. Paid listing revenues decreased by $4.6 million to $7.0 million from $11.6 million due to a decline in the number of customers that was
driven by an overall decrease in the demand for job postings. Certification test preparation and instructor-led training class revenues decreased by $0.5 million to $0.9 million from $1.4 million due to an overall decrease in demand for these
products and services. For the three months ended September 30, 2002 and 2001 no single customer accounted for more than 4% and 2% of revenue, respectively. The Company had no barter revenue for the three months ended September 30, 2002 and
2001.





Revenue for the nine months ended September 30, 2002 decreased $20.3 million to $25.3 million from $45.6
million for the nine months ended September 30, 2001. Paid listing revenues decreased by $18.7 million to $22.5 million from $41.2 million due to a decline in the number of customers that was driven by an overall decrease in the demand for job
postings. Certification test preparation and instructor-led training class revenues decreased by $1.6 million to $2.9 million from $4.5 million due to an overall decrease in demand for these products and services. For the nine months ended September
30, 2002 and 2001 no single customer accounted for more than 4% and 1% of revenue, respectively. The Company had no barter revenue for the nine months ended September 30, 2002 and 2001.





Cost of Revenues.    Cost of revenues consist primarily of employee salaries and related expenses for customer support personnel, system support
and internet access costs related to the dice.com and MeasureUp websites and to direct costs associated with training classes. Cost of revenues for the three months ended September 30, 2002 decreased $0.3 million to $0.9 million from $1.2
million for the three months ended September 30, 2001, and for the nine months ended September 30, 2002 decreased $1.2 million to $2.6 million from $3.8 million for the nine months ended September 30, 2001. These decreases were primarily caused by a
reduction in the number of dice.com customer support personnel and by the lower costs resulting from the decrease in the number of instructor-led training classes.





Product Development.    Product development expenses consist primarily of employee salaries and related expenses, consulting fees and computer
systems-related expenses required to maintain existing service offerings. Product development expenses for the three months ended September 30, 2002 decreased $0.6 million to $0.5 million from $1.1 million for the three months ended September 30,
2001, and for the nine months ended September 30, 2002 decreased $2.2 million to $1.6 million from $3.8 million for the nine months ended September 30, 2001. These decreases were primarily caused by a reduction in personnel related expenses
(including outside consultants) and by lower content development costs at MeasureUp.





Sales and
Marketing.    Sales and marketing expenses consist primarily of advertising programs, agency fees, employee salaries, commissions and related expenses of Dices sales force and marketing personnel. Sales and marketing
expenses for the three months ended September 30, 2002 decreased $1.6 million to $4.3 million from $5.9 million for the three months ended September 30, 2001, and for the nine months ended September 30, 2002 decreased $9.3 million to $14.3 million
from $23.6 million for the nine months ended September 30, 2001. These decreases were primarily due to a reduction in the volume of advertising across all advertising mediums including the elimination of cable television and radio advertising in
early 2001, the elimination of the use of an advertising agency, a reduction in sales force personnel, the elimination of recruitment fees during 2002, and




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lower sales compensation due to lower sales volume. These reductions were partially offset by costs associated with being the exclusive job listing provider for the CNET and ZDNet websites under
an agreement signed in March 2001 and launched in April 2001. Barter expense, related to advertising impressions received as partial consideration for the sale of the Content Business, was $0.2 million in each of the three month periods ended
September 30, 2002 and 2001, and $0.5 million in each of the nine month periods ended September 30, 2002 and 2001.





General and Administrative.    General and administrative expenses consist primarily of employee salaries and related expenses for executive, administrative and accounting personnel, facilities costs,
insurance costs, professional fees and provision for uncollectible accounts. General and administrative expenses for the three months ended September 30, 2002 decreased $0.7 million to $2.1 million from $2.8 million for the three months ended
September 30, 2001, and for the nine months ended September 30, 2002 decreased $1.8 million to $6.3 million from $8.1 million for the nine months ended September 30, 2001. These decreases were primarily due to a decrease in bad debt expense as a
result of the implementation of improved collection and credit policies during 2001 and to the settlement of certain accrued liabilities at levels lower than were estimated. These decreases were partially offset by an increase in legal and other
professional fees and by an increase in directors and officers liability insurance premiums. In each of the three month periods ended September 30, 2002 and 2001, Dice recorded approximately $0.2 million in costs associated with reducing the amount
of lease obligations.





Depreciation.    Depreciation expense was $1.2 million and $1.0
million for the three months ended September 30, 2002 and 2001, respectively, and was $3.7 million and $2.7 million for the nine months ended September 30, 2002 and 2001, respectively. These increases were due to an increase in capitalized website
development costs and to additional hardware and software purchased during 2001 and 2002. In addition, in the quarter ended June 30, 2002, the Company wrote off capitalized costs related to website development because these assets will have no
future value.





Amortization.    Amortization of intangible assets for the three months
ended September 30, 2002 decreased $3.6 million to $0.6 million from $4.2 million for the three months ended September 30, 2001, and for the nine months ended September 30, 2002 decreased $10.3 million to $1.9 million from $12.2 million for the nine
months ended September 30, 2001. This decrease was primarily due to implementation of Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets (FAS 142). Under the new rules, goodwill and
intangible assets deemed to have indefinite lives are no longer amortized, but are subject to annual impairment tests in accordance with FAS 142. Other intangible assets continue to be amortized over their useful lives.





Restructuring and One-time Charges, net.    During the third quarter of 2002, Dice recorded a $1.03 million
charge for an arbitrators award of $1.0 million plus certain costs (the Award) announced in August 2002 relating to the purchase of certain websites by EarthWeb Inc. (now known as Dice Inc.) in 1999 from Mr. Scott Wainner. Dice has
not made any payment on the Award, and is seeking to recover that amount from Jupitermedia under the terms of the Asset Purchase Agreement of December 26, 2000 pursuant to which Jupitermedia acquired these websites from the Company. The probability
of recovery is not determinable, and thus the entire amount of the Award was recorded as an expense in the quarter ended September 30, 2002.





In January 2001, Jack D. Hidary, a Co-founder and President and CEO, resigned these positions, effective January 26, 2001, and became Chairman of the Board of Directors of the Company. Murray Hidary,
Co-founder and Executive Vice President of the Company, also resigned his position, effective January 26, 2001, and continued to serve as a Director of the Company. On September 12, 2002, Messrs. Hidary resigned from the Board of Directors,
effective September 13, 2002. In connection with the 2001 resignations, the Company recorded a charge of $1.0 million in the first quarter of 2001, which primarily consisted of salary continuation and related payments, and medical and other
benefits. These charges were partially offset by reductions of approximately $0.7 million in the accrued restructuring charges recorded in December 2000, which primarily resulted from the cash collections of accounts receivable in excess of, and the
settlement of obligations at lower than, projected levels.




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Gains on Repurchase of Convertible Notes.    In April
2002 and August 2001, Dice repurchased $1.76 million and $8.8 million of its 7% Convertible Subordinated Notes due in January 2005 (Convertible Notes) for aggregate purchase prices of $1.24 million and $2.98 million in cash,
respectively, plus accrued interest. As a result of these repurchases, the Company recorded gains of $0.5 million and $5.6 million (net of zero income tax and write-offs of related deferred financing costs) in the quarters ended September 30, 2002
and 2001, respectively. Annual interest expense has been reduced by $0.7 million as a result of these transactions.





Write-off of Convertible Notes Repurchase Options.    On April 3, 2002 Dice announced that it negotiated the right to repurchase $53.02 million face amount of its Convertible Notes from three of its largest
noteholders, upon certain change of control events, at prices ranging from 70% to 110% of face value, plus accrued interest through the date of repurchase. The actual repurchase price would depend upon the amount received by the Company or its
stockholders as a result of a change of control event, increasing to the maximum as proceeds to stockholders increased. In consideration for entering into these agreements, the Company paid $1.86 million in the aggregate to three noteholders and
incurred $960,000 in transaction costs for professional fees related to these agreements. The Company recorded this payment and related transaction costs as a deferred asset and accounted for it as a derivative security. The Company wrote off the
deferred asset balance of $2.82 million as of September 30, 2002, as the options were not exercised prior to their expiration on October 3, 2002.





Interest Expense.    Interest expense consists primarily of interest on the $69.4 million principal amount of its Convertible Notes. Interest expense was $1.4 million and
$1.5 million for the three months ended September 30, 2002 and 2001, respectively, and was $4.2 million and $4.7 million for the nine months ended September 30, 2002 and 2001, respectively. The decreases in each period were primarily due to the
repurchase of $8.8 million and $1.8 million in principal amount of Convertible Notes in August 2001 and in April 2002, respectively.





Interest and Other Income.    Interest and other income consists primarily of interest earned on cash and cash equivalents and marketable securities. Interest and other income for the three months
ended September 30, 2002 decreased $0.2 million to $0.1 million from $0.3 million for the three months ended September 30, 2001, and for the nine months ended September 30, 2002 decreased $0.9 million to $0.3 million from $1.2 million for the nine
months ended September 30, 2001. These decreases are primarily attributable to lower levels of cash and cash equivalents and marketable securities and to lower interest rates during the three and nine months ended September 30, 2002 compared to the
three and nine months ended September 30, 2001.





Cumulative Effect of Change in Accounting
Principle.    During the second quarter of 2002 the Company completed the first annual impairment test as required by FAS 142. As of January 1, 2002, the fair value of two of the Companys reporting units, MeasureUp and
CCPrep, did not exceed the carrying value of these reporting units and an impairment charge of $6.4 million was recorded as a cumulative effect of change in accounting principle.





Income Taxes.    No provision for federal and state income taxes has been recorded as Dice has incurred net losses through September 30, 2002.
Given Dices limited operating history, losses incurred to date and the difficulty in accurately forecasting Dices future results, management does not believe that the realization of the related deferred income tax assets meets the
criteria required by generally accepted accounting principles and, accordingly, a full valuation allowance has been recorded.





Liquidity and Capital Resources





Dice historically has satisfied its cash requirements
primarily through offerings of common stock and convertible notes and through lease financings. We believe that the Companys current cash position and future cash flows from operations will be sufficient to fund the Companys operations
for at least the next twelve months. However, there can be no assurances that the Company will achieve its planned results. If anticipated results are not achieved, management has the ability to delay or reduce certain of its expenditures so as to
not require additional financing, if such financing is not available on terms acceptable to the Company. However, a




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majority of the Companys costs are fixed in nature and, therefore, if demand for the Companys services is lower than anticipated in the near term, that decrease in demand will lower
the availability of funds to the Company to fund its operations.





Dice will continue to evaluate possible
acquisitions of, or investments in, business products and technologies that are complementary to those of the Company, which may require the use of cash, or Dice may sell additional equity or debt securities or obtain credit facilities. The sale of
additional securities could result in dilution to Dices stockholders.





As of September 30, 2002 the Company
has outstanding $69.4 million of 7% Convertible Subordinated Notes due in January 2005. During 2001, the Company repurchased $8.8 million face value of the notes for $2.98 million in cash, plus accrued interest. In April 2002, the Company
repurchased $1.76 million face value of the notes for $1.24 million in cash, plus accrued interest. The Company may consider further repurchases of the Convertible Notes prior to their maturity on terms that the Company deems favorable. Any further
repurchases may require the use of cash or the Company may issue additional debt or equity securities. The issuance of additional securities could result in dilution to the existing stockholders. The notes carry a coupon of 7% interest annually,
currently totaling $4.9 million in annual interest payments, made semi-annually each January and July. Payments totaling $2.5 million and $2.4 million were made in January 2002 and July 2002, respectively.





Dices common stock is quoted on the NASDAQ National Market. There are a number of continuing requirements that must be satisfied in
order for a companys stock to remain eligible for quotation on the NASDAQ National Market. These requirements include maintaining a minimum bid price of $3.00 and a market value of publicly held shares of $15.0 million. On October 8, 2002,
Dice received a NASDAQ Staff Determination, indicating that the Company fails to comply with the $3.00 minimum bid price and the $15.0 million market value of publicly held shares requirements for continued listing set forth in Marketplace Rules
4450(b)(4) and 4450(b)(3), respectively, and that its common stock is, therefore, subject to delisting from the NASDAQ National Market. On October 15, 2002, the Company requested a hearing before a NASDAQ Listing Qualifications Panel to review the
Staff Determination. The hearing before the NASDAQ Listing Qualifications Panel is currently scheduled for November 21, 2002. Although management is exploring ways to regain compliance with the continued listing requirements, the Company cannot give
assurances that it will regain compliance, nor can it give assurances that the appeal will be successful. Throughout the review process, Dices common stock will continue to be listed on the NASDAQ National Market. If the Company fails to
satisfy the continued listing requirements of either the NASDAQ National Market or the NASDAQ SmallCap Market, the Company anticipates that its common stock would be eligible to trade on the OTC Bulletin Board or in the pink sheets maintained by the
National Quotation Bureau, Inc.





The delisting of the Companys common stock from NASDAQ could have a
material adverse effect on the market price of, and the liquidity of the trading market for, Dices common stock. Delisting could also reduce the ability of holders of Dices common stock to purchase or sell shares as quickly and as
efficiently as they have done historically. This lack of liquidity would make it more difficult for the Company to raise capital in the future, use shares of common stock to make acquisitions, or extinguish all or part of its debt . Each of these
events could have a material adverse effect on Dices business, financial condition and operating results.





Substantially all of Dices cash, cash equivalents and marketable securities have been invested in a diversified portfolio of debt instruments of United States government agencies and high quality money market instruments. The
Company had cash and cash equivalents and investments in marketable securities totaling $9.0 million at September 30, 2002.





Net cash used in operating activities was $4.6 million for the nine months ended September 30, 2002. Cash used in operating activities was primarily attributable to interest payments of $4.9 million on the Convertible Notes and
payments of accrued liabilities, partially offset by cash generated by operations.




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Net cash used in investing activities for the nine months ended September 30,
2002 of $0.8 million was attributable to purchases of fixed assets of $2.5 million and investment securities of $2.4 million, partially offset by $4.0 million of proceeds from the sale of marketable securities.





Net cash used in financing activities for the nine months ended September 30, 2002 of $8.7 million was primarily attributable to the final
payments of $4.0 million for obligations under the D&L Online acquisition agreements, payments of $2.8 million related to the Convertible Notes repurchase options, including related costs, payments of $1.2 million for the repurchase of
Convertible Notes and principal payments of $0.9 million on notes payable and capital leases.





Based on results
achieved by MeasureUp in 2000, the Company paid $1.2 million in cash to the sellers of MeasureUp in April 2001. The financial targets were not achieved in 2001, and, therefore, the Company did not have any earnout obligations for 2001. The Company
has remaining earnout obligations based on the achievement of certain financial targets during 2002 of up to an aggregate of $3.0 million that would be payable in 2003 in cash and/or common stock, at the Companys option. The Company currently
does not expect to achieve the minimum financial targets and, therefore, expects to have no further obligation to the sellers of MeasureUp.





On July 5, 2001, Mr. Scott Wainner commenced an arbitration proceeding against the Company before the American Arbitration Association. Mr. Wainner asserted various claims under an Asset Purchase
Agreement, dated July 13, 1999 between the Company and Mr. Wainner relating to the purchase by the Company of certain websites. Mr. Wainner claimed that he was entitled to certain additional payments under the Asset Purchase Agreement and also
alleged that the Company had breached other obligations to him.





On August 7, 2002, the arbitrator awarded Mr.
Wainner $1.0 million, plus certain costs (the Award). Following the issuance of the Award, Mr. Wainner began a court proceeding against the Company in which he sought to confirm the Award and obtain a judgment against the Company. At a
hearing on October 16, 2002, the court indicated that it would be granting Mr. Wainners request and entering such a judgment. To date, the Company is not aware that the judgment has been so entered and no payment has been made.





The Company has long term obligations for operating leases (principally for its leased facilities in Urbandale, Iowa) which
aggregate $11.8 million through 2011, of which $0.4 million is payable during the remainder of 2002, and obligations under capital leases aggregating $1.4 million through 2005, including interest, of which $0.2 million is payable during the
remainder of 2002. In September 2002, the Company entered into an amended lease agreement with the landlord of its Urbandale, Iowa facility under which the Company will relinquish all rights to 25,000 sq. ft. of space as of January 1, 2003 in
exchange for paying an aggregate of $198,000 during the period January 1, 2003 through December 31, 2007, which amounts are reflected in the lease obligations above. The company expects to realize annual savings of approximately $250,000 as a result
of the amended lease agreement, commencing January 1, 2003.





In addition, the Company has commitments under
various marketing arrangements to pay an aggregate of $6.4 million through 2004, of which approximately $1.4 million is payable during the remainder of 2002.





Critical Accounting Policies





We have identified the policies below as critical to
our business operations and the understanding of our results of operations. The impact and any associated risks related to these policies on our business operations is discussed in Managements Discussion and Analysis of Financial Condition and
Results of Operations where such policies affect our reported and expected financial results. For a detailed discussion of the application of these and other accounting policies, see Notes to the Consolidated Financial Statements in the Annual
Report on Form 10-K for the year ended December 31, 2001. Note that our preparation of this quarterly report on Form 10-Q requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of
contingent assets and liabilities at the date of our financial statements, and reported amounts of revenue and expenses during the reporting period. There can be no assurance that actual results will not differ from those estimates.




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Long-lived Assets





The carrying amount of assets is reviewed on a regular basis for the existence of facts or circumstances, both internal and external, that suggest impairment. Dice
determines if the carrying amount of an asset is impaired based on anticipated undiscounted cash flows before interest and income taxes. In the event of impairment, a loss is recognized based on the amount by which the carrying amount exceeds the
fair value of the asset. Fair value is determined primarily using the anticipated cash flows before interest and income taxes, discounted at a rate commensurate with the risk involved.





Intangible assets, excluding goodwill, resulting from acquisitions of websites and other assets are being amortized using the straight-line method over five years which
approximates the expected period of benefit.





Bad Debt





Dice maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required
payments. If the financial condition of Dices customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.





Goodwill





Goodwill is not
subject to amortization and is tested for impairment annually, or more frequently if events or changes in circumstances indicate that the asset may be impaired. The impairment test consists of a comparison of the fair value of goodwill with its
carrying amount. If the carrying amount of goodwill exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess. After an impairment loss is recognized, the adjusted carrying amount of goodwill is its new
accounting basis. Fair value is determined primarily using the anticipated cash flows before interest and income taxes, discounted at a rate commensurate with the risk involved.





Use of Estimates





The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Dices
significant estimates include the useful lives and valuations of fixed assets, goodwill and certain intangible assets, the accounts receivable allowance for doubtful accounts and the income tax valuation allowance.





Recent Accounting Pronouncements





In April 2002, the FASB issued Statement of Financial Accounting Standards No.145, Rescission of FASB Statements No. 4, 44, and 62, Amendment of FASB Statement No. 13, and Technical Corrections (FAS 145). In
most instances, FAS 145 will require gains and losses on extinguishments of debt to be classified as income or loss from continuing operations rather than as extraordinary items as previously required under FASB Statement No. 4, Reporting
Gains and Losses from Extinguishment of Debt. This provision of FAS 145 is effective for fiscal years beginning after May 15, 2002, with early application encouraged. Upon adoption, any gain or loss on extinguishment of debt previously
classified as an extraordinary item in prior periods presented that does not meet the criteria of Accounting Principles Board Opinion No. 30 for such classification should be reclassified to conform to the provisions of FAS 145. The Company adopted
FAS 145 in the quarter ended September 30, 2002, and, therefore, reclassified a net gain of $5.6 million recognized on the early extinguishment of debt in the quarter ended September 30, 2001.




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Item 3.Quantitative and Qualitative Disclosures About Market Risk





Interest Rate Risk





The Companys exposure to market rate risk for changes in
interest rates relates primarily to the Companys investment portfolio and outstanding debt. The Company does not use derivative financial instruments in its investment portfolio. The Company mainly invests its excess cash in debt instruments
of government agencies and high quality corporate money market instruments. If market rates increase, the Company runs the risk that the related income from those holdings will be less than those that could be obtained from newer issues of similar
securities, and that the fair market value of these securities could decline in value.





At September 30, 2002 the
Companys outstanding debt approximated $69.4 million, all of which is fixed rate obligations. If market rates decline, the Company runs the risk that the related required payments on the fixed rate debt will exceed those that would be paid
based on the current market rate.





Equity Price Risk





The Company has minimal investments in various equity securities. These investments, as of September 30, 2002, were considered available-for-sale, with the unrealized
gains deferred as a component of stockholders equity. The Company seeks preservation of capital and selectively considers investments in equity securities as part of its investment strategy.





Item 4.Controls and Procedures





Within 90
days prior to the date of filing this report, an evaluation was performed under the supervision and with the participation of the Companys management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of
the design and operation of the Companys disclosure controls and procedures (as defined in Rule 13a-14(c) of the Exchange Act). Based on and as of the time of such evaluation, the Companys management, including the Chief Executive
Officer and Chief Financial Officer, concluded that the Companys disclosure controls and procedures were effective in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) required to be
included in the Companys reports filed or submitted by it under the Exchange Act. There have been no significant changes in the Companys internal controls or in other factors that could significantly affect internal controls subsequent
to the time of such evaluation.




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PART IIOTHER INFORMATION





Item 1.    Legal Proceedings





On November 5, 2001, a class action
lawsuit was filed in the United States District Court for the Southern District of New York against the Company, certain of its present and former directors and former officers, and the underwriters of the Companys initial public offering and
secondary offering (J.P. Morgan Securities, Inc., Bear Stearns & Co., Inc., Volpe Brown Whelan & Co., LLC and Wit Capital Corporation). The complaint alleges, among other things, that the underwriters of the Companys initial public
offering and secondary offering violated the securities laws by failing to disclose certain alleged compensation arrangements (such as undisclosed commissions or stock stabilization practices) in the registration statements for the offerings. The
Company and certain of its present and former directors and former officers are named in the complaints pursuant to Section 11 of the Securities Act of 1933. Similar actions have been filed against more than 300 other issuers and their underwriters
relating to offerings since 1998. The Company intends to defend the case vigorously. Due to the inherent uncertainties of litigation, the Company cannot predict the outcome of this litigation with any certainty. An adverse outcome in this litigation
could have a material adverse effect on the Companys business.





The Company is party to other claims and
litigations that arise in the normal course of business. The Company believes that the ultimate outcome of those other claims and litigation will not have a material effect on the Companys financial position or results of operations.





Item 2.    Changes in Securities and Use of Proceeds





Not
Applicable





Item 3.    Defaults Upon Senior Securities





Not Applicable





Item 4.    Submission of Matters to a Vote of Security Holders





Not
Applicable





Item 5.    Other Information





Not Applicable





Item 6.    Exhibits and Reports on Form 8-K





(a)    Exhibits





Exhibit No.

Description10.1

Separation Agreement dated as of September 30, 2002 between Registrant and Peter Steiner.99.1

CEO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 200299.2

CFO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002





(b)    Reports on Form 8-K





The Company filed a report on Form 8-K on July 24, 2002 relating to the Companys announcement of its financial results
and certain other information for the period ended June 30, 2002.




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The Company filed a report on Form 8-K on August 13, 2002 relating to the
Companys announcement of an arbitrators award in a previously disclosed arbitration proceeding involving the purchase of certain websites by EarthWeb Inc. (now known as Dice Inc.) in 1999 from Mr. Scott Wainner.





The Company filed a report on Form 8-K on September 13, 2002 relating to the Companys announcement of the resignations of two
directors, Mr. Jack Hidary and Mr. Murray Hidary, from the Companys Board of Directors, pursuant to letters dated September 12, 2002.





The Company filed a report on Form 8-K on October 8, 2002 relating to the Companys announcement that it had received a NASDAQ Staff Determination that it is not in compliance with the minimum bid
price requirement for continued listing on the NASDAQ National Market, and providing information relating to the Companys financial performance for the period ended September 30, 2002.




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SIGNATURES





Pursuant to the requirements of section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, state of New York, on October 24, 2002.





DICE INC.By:

/s/    MICHAEL P.
DURNEYMichael P. Durney Senior Vice
President, Finance and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)





CERTIFICATIONS





I, Scot W. Melland certify that:





1.    I have reviewed this quarterly report on Form 10-Q of Dice Inc.;





2.    Based on my knowledge, this quarterly report does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;





3.    Based on my knowledge, the financial statements, and other financial information included in
this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;





4.    The registrants other certifying officers and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:





a)    designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which the periodic reports are being prepared;





b)    evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the Evaluation Date); and





c)    presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;





5.    The registrants other certifying officers and I have disclosed, based on our most recent evaluation, to the registrants auditors and the audit committee of the registrants board of
directors (or persons performing the equivalent function):





a)    all
significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability to record, process, summarize and report financial data and have identified for the registrants auditors any
material weaknesses in internal controls; and





b)    any fraud, whether or not
material, that involves management or other employees who have a significant role in the registrants internal controls; and




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6.    The registrants other certifying
officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies and material weaknesses.





October 24,
2002





/s/    SCOT W. MELLANDScot W. Melland Chairman,
President & CEO (Principal Executive Officer)





I, Michael P. Durney certify that:





1.    I have reviewed this quarterly report on Form 10-Q of Dice Inc.;





2.    Based on my knowledge, this quarterly report does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;





3.    Based on my knowledge, the financial statements, and other financial information included in
this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;





4.    The registrants other certifying officers and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:





a)    designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which the periodic reports are being prepared;





b)    evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the Evaluation Date); and





c)    presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;





5.    The registrants other certifying officers and I have disclosed, based on our most recent evaluation, to the registrants auditors and the audit committee of the registrants board of
directors (or persons performing the equivalent function):





a)    all
significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability to record, process, summarize and report financial data and have identified for the registrants auditors any
material weaknesses in internal controls; and





b)    any fraud, whether or not
material, that involves management or other employees who have a significant role in the registrants internal controls; and





6.    The registrants other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.





October 24, 2002





/s/    MICHAEL P. DURNEYMichael P. Durney Senior Vice
President, Finance, CFO & Treasurer (Principal Financial Officer)




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