NOTE 4 – REVENUE, DIRECT COSTS AND GROSS MARGIN

The Company’s revenue, direct costs and gross margin were as follows:

	For The Three Months Ended March 31, 2012						For The Three Months Ended March 31, 2011
	Temporary Contracting		Other		Total		Temporary Contracting		Other		Total
Revenue	$	150,437	$	50,153	$	200,590	$	163,061	$	55,478	$	218,539
Direct costs (1)		124,071		3,311		127,382		134,155		3,186		137,341
Gross margin	$	26,366	$	46,842	$	73,208	$	28,906	$	52,292	$	81,198

(1)

Direct costs include the direct staffing costs of salaries, payroll taxes, employee benefits, travel expenses and insurance costs for the Company’s contractors and reimbursed out-of-pocket expenses and other direct costs. Other than reimbursed out-of-pocket expenses, there are no other direct costs associated with the Other category, which includes the search, permanent recruitment and other human resource solutions’ revenue. Gross margin represents revenue less direct costs. The region where services are provided, the mix of contracting and permanent recruitment, and the functional nature of the staffing services provided can affect gross margin. The salaries, commissions, payroll taxes and employee benefits related to recruitment professionals are included in selling, general and administrative expenses.