Segment Information

3 Months Ended

Mar. 31, 2020

The Company’s operating segments are identified in the same manner as they are reported internally and used by the Company’s chief operating decision maker for the purpose of evaluating performance and allocating resources. Effective March 8, 2020, the Company modified its reportable segments. The Company previously utilized three reportable segments, which it identified as follows: (1) nurse and allied solutions, (2) locum tenens solutions, and (3) other workforce solutions. In light of the Company’s recent acquisitions and organizational changes to better align its organizational structure with its strategy and operations, the Company’s management reorganized its reportable segments to better reflect how the business is evaluated by the chief operating decision maker. Beginning in the first quarter of 2020, the Company will disclose the following three reportable segments: (1) nurse and allied solutions, (2) physician and leadership solutions, and (3) technology and workforce solutions. The nurse and allied solutions segment includes the Company’s travel nurse staffing, rapid response nurse staffing and labor disruption, allied staffing, local staffing, and revenue cycle solutions businesses. The physician and leadership solutions segment includes the Company’s locum tenens staffing, healthcare interim leadership staffing, executive search, and physician permanent placement businesses. The technology and workforce solutions segment includes the Company’s remote video interpreting, vendor management systems, workforce optimization, recruitment process outsourcing, education, credentialing, and flex pool management businesses.

The Company’s chief operating decision maker relies on internal management reporting processes that provide revenue and operating income by reportable segment for making financial decisions and allocating resources. Segment operating income represents income before income taxes plus depreciation, amortization of intangible assets, share-based compensation, interest expense, net, and other, and unallocated corporate overhead. The Company’s management does not evaluate, manage or measure performance of segments using asset information; accordingly, asset information by segment is not prepared or disclosed.

The following table, which includes reclassified prior period data to conform to the new segment reporting structure, provides a reconciliation of revenue and operating income by reportable segment to consolidated results and was derived from each segment’s internal financial information as used for corporate management purposes:



	Three Months Ended March 31,
	2020		2019
Revenue
Nurse and allied solutions	$	424,346	$	373,472
Physician and leadership solutions	137,842		137,077
Technology and workforce solutions	40,273		21,892
	$	602,461	$	532,441
Segment operating income
Nurse and allied solutions	$	59,608	$	53,556
Physician and leadership solutions	14,569		15,872
Technology and workforce solutions	15,295		10,383
	89,472		79,811
Unallocated corporate overhead	28,568		17,863
Depreciation and amortization	20,089		11,710
Depreciation (included in cost of revenue)	145		—
Share-based compensation	4,927		5,186
Interest expense, net, and other	11,054		5,673
Income before income taxes	$	24,689	$	39,379

The following tables present the Company’s revenue disaggregated by service type:



	Three Months Ended March 31, 2020
	Nurse and Allied Solutions		Physician and Leadership Solutions		Technology and Workforce Solutions		Total
Temporary staffing	$	392,671	$	119,596	$	—	$	512,267
Permanent placement	—		18,246		—		18,246
Outsourced workforce	31,675		—		17,680		49,355
SaaS-based technologies	—		—		22,593		22,593
Total revenue	$	424,346	$	137,842	$	40,273	$	602,461



	Three Months Ended March 31, 2019
	Nurse and Allied Solutions		Physician and Leadership Solutions		Technology and Workforce Solutions		Total
Temporary staffing	$	337,029	$	118,840	$	—	$	455,869
Permanent placement	—		18,237		—		18,237
Outsourced workforce	36,443		—		3,695		40,138
SaaS-based technologies	—		—		18,197		18,197
Total revenue	$	373,472	$	137,077	$	21,892	$	532,441

In connection with the reorganization of its reportable segments effective March 8, 2020, the Company reassigned the goodwill balances to the reporting units, the composition of which changed under the reorganized reportable segments, using the relative fair value reallocation approach. The Company performed a goodwill impairment test at the reporting unit level both immediately before and after the reorganization. The Company determined the fair values of its reporting units using a combination of the income approach (using discounted future cash flows) and the market valuation approach. Based on the results of this testing, the Company determined that the fair values of its reporting units were each greater than their respective carrying values both before and after the reorganization. Therefore, there was no impairment loss recognized during the three months ended March 31, 2020.

The following table summarizes the activity related to the carrying value of goodwill by reportable segment:



	Nurse and Allied Solutions			Physician and Leadership Solutions		Technology and Workforce Solutions			Total
Balance, January 1, 2020	$	344,316		$	163,348	$	87,887		$	595,551
Goodwill adjustment for b4health acquisition	—			—		(66		)	(66		)
Goodwill from Stratus Video acquisition	—			—		255,974			255,974
Reallocation due to change in segments	(14,600		)	297		14,303			—
Balance, March 31, 2020	$	329,716		$	163,645	$	358,098		$	851,459
Accumulated impairment loss as of December 31, 2019 and March 31, 2020	$	154,444		$	60,495	$	—		$	214,939