Goodwill, Trade Names, and Other Intangible Assets

12 Months Ended

Dec. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill, Trade Names, and Other Intangible Assets

The Company had the following acquired intangible assets:


	December 31, 2021						December 31, 2020
	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	$	18,375	$	12,155	$	30,530	$	15,322	$	15,208
Customer relationships	47,738		17,581		30,157		33,538		14,007		19,531
Non-compete agreements	304		272		32		304		212		92

Other intangible assets, net	$	78,572	$	36,228	$	42,344	$	64,372	$	29,541	$	34,831
Intangible assets not subject to amortization:
Trade names, indefinite-lived					$	5,900					$	5,900

As of December 31, 2021, estimated annual amortization expense is as follows:


Years Ending December 31:	(amounts in thousands)
2022	$	7,175
2023	7,117
2024	6,479
2025	5,921
2026	4,751
Thereafter	10,901
	$	42,344

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


	Nurse And Allied Staffing		Physician Staffing		Total
	(amounts in thousands)
Balances as of December 31, 2020
Aggregate goodwill acquired	$	367,880	$	43,405	$	411,285
Sale of business	(9,889)		—		(9,889)
Accumulated impairment loss	(269,874)		(40,598)		(310,472)
Goodwill, net of impairment loss	88,117		2,807		90,924

Changes to aggregate goodwill in 2021
Aggregate goodwill acquired (a)	28,566		—		28,566


Balances as of December 31, 2021
Aggregate goodwill acquired	396,446		43,405		439,851
Sale of business	(9,889)		—		(9,889)
Accumulated impairment loss	(269,874)		(40,598)		(310,472)
Goodwill, net of impairment loss	$	116,683	$	2,807	$	119,490

________________

(a) Represents goodwill acquired from the acquisitions of WSG and Selected, calculated as the excess of the fair value of consideration exchanged as compared to the fair value of identifiable net assets acquired. See Note 4 - Acquisitions. During the measurement period, which is not to exceed one year from the acquisition date, the Company may record adjustments to the assets acquired or liabilities assumed, with a corresponding offset to goodwill. Upon conclusion of the measurement period, any subsequent adjustments would be recorded to earnings.

In conjunction with the changes to its segments, the Company now discloses the following two reportable segments - Nurse and Allied Staffing and Physician Staffing. In the table above, goodwill balances and activity previously reported in the Search segment have been reclassified to Nurse and Allied Staffing.

Goodwill, Trade Names, and Other Intangible Assets Impairment

The Company tests reporting units’ goodwill and intangible assets with indefinite lives for impairment annually during the fourth quarter and more frequently if impairment indicators exist. The Company performs quarterly qualitative assessments of significant events and circumstances such as reporting units’ historical and current results, assumptions regarding future performance, strategic initiatives and overall economic factors, including COVID, and macro-economic developments, to determine the existence of potential indicators of impairment and assess if it is more likely than not that the fair value of reporting units or intangible assets is less than their carrying value. If indicators of impairments are identified a quantitative impairment test is performed.

The Company performed its annual quantitative impairment test of goodwill and its indefinite-lived trade name as of October 1, 2021 and determined that the estimated fair value of its reporting units and its indefinite-lived trade name exceeded their respective carrying values.

During the second quarter of 2020, due to the increased negative impact and continuing uncertainty of the COVID 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.

However, the previously-reported 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. As a result, the Company performed quantitative testing of the Search reporting unit which 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. The Company also considered estimated future results, economic and market conditions including the timing and duration of COVID, as well as the impact of planned business and operational strategies which impacted management's estimates of future cash flows, the discount rate, and the estimated long-term growth rate used in the discounted cash flow model. Assumptions used in the market approach were derived including an analysis of a range of valuation multiples of comparable public companies.

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 within impairment charges in the consolidated statements of operations for the year ended December 31, 2019.

The Company performed its annual quantitative impairment test of goodwill and its indefinite-lived trade name as of October 1, 2019, and determined that the estimated fair value of its reporting units and its indefinite-lived trade name exceeded their respective carrying values.

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, there can be no assurance that the estimates and assumptions management used for purposes of its qualitative assessment as of December 31, 2021 will prove to be accurate predictions of future performance.

For its long-lived assets and definite-lived intangible assets, the Company reviews for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. During the year ended December 31, 2021, the Company wrote off a discontinued software development project, resulting in an immaterial impairment charge.

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 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 was $3.1 million, or $0.09 per share, for the year ended December 31, 2020.

In addition, during the year ended December 31, 2019, the amortization of certain finite-lived trade names was accelerated, which resulted in additional amortization expense related to the Company's Nurse and Allied Staffing and Physician Staffing segments of $2.1 million and $0.8 million, respectively, which impacted the net income (loss) per share attributable to common stockholders of $0.08. If the Company had not accelerated the amortization, it would have been recognized over a weighted average life of 7.8 years.