Business Segments

6 Months Ended

Jun. 30, 2021

Segment Reporting [Abstract]

Business Segments

Business Segments

The Company has three reportable segments: temporary and consultant staffing, permanent placement staffing, and risk consulting and internal audit services. Operating segments are defined as components of the Company for which separate financial information is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assess performance. The temporary and consultant staffing segment provides specialized staffing in the accounting and finance, administrative and office, information technology, legal, advertising, marketing and web design fields. The permanent placement staffing segment provides full-time personnel in the accounting, finance, administrative and office, and information technology fields. The risk consulting and internal audit services segment provides business and technology risk consulting and internal audit services.

The accounting policies of the segments are set forth in Note A—“Summary of Significant Accounting Policies” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. The Company evaluates performance based on income before net interest expense (income), intangible assets amortization expense, and income taxes.

The following table provides a reconciliation of service revenues and segment income by reportable segment to consolidated results for the three and six months ended June 30, 2021 and 2020 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Service revenues
Temporary and consultant staffing	$	978,281	$	753,386	$	1,867,557	$	1,845,506
Permanent placement staffing	143,640		71,030		255,344		191,519
Risk consulting and internal audit services	458,660		283,910		856,060		577,992
	$	1,580,581	$	1,108,326	$	2,978,961	$	2,615,017
Segment income
Temporary and consultant staffing	$	94,010	$	28,390	$	169,688	$	122,154
Permanent placement staffing	30,599		(248)		48,234		10,663
Risk consulting and internal audit services	79,980		30,107		137,303		56,576
Combined segment income	204,589		58,249		355,225		189,393
Amortization of intangible assets	576		330		1,152		668
Interest expense (income), net	151		(105)		105		(1,062)
Income before income taxes	$	203,862	$	58,024	$	353,968	$	189,787

Service revenues presented above are shown net of eliminations of intersegment revenues. Intersegment revenues

between temporary and consultant staffing segment and risk consulting and internal audit services segment were $143.0 million

and $246.8 million for the three and six months ended June 30, 2021, respectively, and $41.5 million and $87.8 million for the three months and six months ended June 30, 2020, respectively.

Revenue and direct costs related to the intersegment activity are reflected in the risk consulting and internal audit segment, including the costs of candidate payroll, fringe benefits and incremental recruiter compensation.