GOODWILL, TRADE NAMES, AND OTHER INTANGIBLE ASSETS

6 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL, TRADE NAMES, AND OTHER INTANGIBLE ASSETS

The Company had the following acquired intangible assets:


	June 30, 2020										December 31, 2019
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
	(amounts in thousands)
Intangible assets subject to amortization:
Databases	$	30,530	$	13,796	$	16,734	$	30,530	$	12,269	$	18,261
Customer relationships	49,246		28,115		21,131		49,758		26,596		23,162
Non-compete agreements	304		181		123		320		161		159
Trade names	4,500		3,487		1,013		4,500		1,125		3,375
Other intangible assets, net	$	84,580	$	45,579	$	39,001	$	85,108	$	40,151	$	44,957

Intangible assets not subject to amortization:
Trade names, indefinite-lived					$	5,900					$	5,900

As of June 30, 2020, estimated annual amortization expense is as follows:


Years Ending December 31:	(amounts in thousands)
2020	$	4,038
2021	6,051
2022	5,977
2023	5,875
2024	5,238
Thereafter	11,822
	$	39,001

The changes in the carrying amount of goodwill by segment are as follows:


	Nurse And Allied Staffing		Physician Staffing		Search		Total
	(amounts in thousands)
Balances as of December 31, 2019
Aggregate goodwill acquired	$	346,130	$	43,405	$	21,750	$	411,285
Sale of business	—		—		(9,889)		(9,889)
Accumulated impairment loss	(259,732)		(40,598)		—		(300,330)
Goodwill, net of impairment loss	86,398		2,807		11,861		101,066

Changes to aggregate goodwill in 2020
Impairment charges	—		—		(10,142)		(10,142)
Reclassification of API goodwill	24		—		(24)		—

Balances as of June 30, 2020
Aggregate goodwill acquired	346,130		43,405		21,750		411,285

Sale of business	—		—		(9,889)		(9,889)
Accumulated impairment loss	(259,732)		(40,598)		(10,142)		(310,472)
Reclassification of API goodwill	24		—		(24)		—
Goodwill, net of impairment loss	$	86,422	$	2,807	$	1,695	$	90,924

Goodwill, Trade Names and Other Intangible Assets Impairment

During the second quarter of 2020, due to the increased negative impact and continuing uncertainty of the COVID-19 pandemic on the business, all reporting units were quantitatively tested. For the Nurse and Allied Staffing and Physician Staffing reporting units no impairment was identified as the fair value was substantially in excess of the carrying amount of goodwill.

The Search reporting unit under-performed relative to management’s expectations in the second quarter of 2020. The lower than expected revenue was driven by: (i) the cancellation or postponement of a significant number of working searches, (ii) the decision to delay the hiring of new revenue producers, and (iii) the loss of customers, which were mostly related to the negative impacts of COVID-19. As a result, the quantitative testing of the Search reporting unit resulted in impairment charges of $10.2 million for its goodwill and $0.3 million for its customer relationships.

In order to determine the fair value of the Search reporting unit, the Company used a combination of an income and market approach. The weighting was based on the specific characteristics, risks, and uncertainties of the Search reporting unit. The discounted cash flow that served as the primary basis for the income approach was based on the Company’s discrete financial forecast of revenue, gross profit margins, operating costs, and cash flows. It also considered estimated future results, economic and market conditions including the timing and duration of COVID-19, as well as the impact of planned business and operational strategies. Assumptions used in the market approach were derived including an analysis of a range of valuation multiples of comparable public companies.

Although management believes that the Company's current estimates and assumptions utilized in its quantitative testing are reasonable and supportable, including its assumptions on the impact and timing related to COVID-19, there can be no assurance that the estimates and assumptions management used for purposes of its qualitative assessment as of June 30, 2020 will prove to be accurate predictions of future performance.

As part of evolving its go-to-market strategy, in the second quarter of 2019, the Company began eliminating certain brands across all of its segments. The Company’s rebranding efforts resulted in a $14.5 million write-off of indefinite-lived trade names related to its Nurse and Allied Staffing business segment, which is presented as impairment charges on the condensed consolidated statements of operations for the three and six months ended June 30, 2019.

Intangible Asset Amortization

In connection with its rebranding efforts, the Company made a decision at the end of 2019 to phase out a trade name by the end of 2020, which as of December 31, 2019 would have been recognized over a weighted average life of 7.5 years. In connection with this decision, the Company expected accelerated amortization related to the trade name of $2.9 million throughout 2020. In the second quarter of 2020, the Company further accelerated its rebranding plan and shortened the estimated remaining life of the trade name. Total accelerated amortization resulting from the changes in the estimated remaining life of the trade name were $1.4 million, or $0.04 per share, and $2.1 million, or $0.06 per share, for the three and six months ended June 30, 2020, respectively.