The information in this discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are based upon current expectations that involve risks and uncertainties. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. For example, the words "believes," "anticipates," "plans," "expects," "intends," and similar expressions are intended to identify forward-looking statements. Forward looking statements include statements regarding our anticipated financial and operating performance for future periods. Our actual results could differ materially from those discussed herein. Factors that could cause or contribute to such differences include, but are not limited to, the following: (1) the negative impact of the current credit crisis and global economic slowdown; (2) actual demand for our services, (3) our ability to attract, train and retain qualified staffing consultants, (4) our ability to remain competitive in obtaining and retaining temporary staffing clients, (5) the availability of qualified contract nurses and other qualified contract professionals, (6) our ability to manage our growth efficiently and effectively, (7) continued performance of our information systems, and (8) other risks detailed from time to time in our reports filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K, under the section "Risk Factors" for the year ended December 31, 2008, as filed with the SEC on March 16, 2009. Other factors also may contribute to the differences between our forward-looking statements and our actual results. . In addition, as a result of these and other factors, our past financial performance should not be relied on as an indication of future performance. All forward-looking statements in this document are based on information available to us as of the date we file this Quarterly Report on Form 10-Q, and we assume no obligation to update any forward-looking statement or the reasons why our actual results may differ.

OVERVIEW

On Assignment, Inc. is a diversified professional staffing firm providing flexible and permanent staffing solutions in specialty skills market including Laboratory/Scientific, Healthcare/Nursing, Physicians, Medical Financial, Information Technology and Engineering. We provide clients in these markets with short-term or long-term assignments of contract professionals, contract-to-permanent placement and direct placement of these professionals. Our business currently consists of four operating segments: Life Sciences, Healthcare, Physician, and IT and Engineering.

The Life Sciences segment includes our domestic and international life science staffing lines of business. We provide locally-based, contract life science professionals to clients in the biotechnology, pharmaceutical, food and beverage, medical device, personal care, chemical, nutraceutical, materials science, consumer products, environmental petrochemical and contract manufacturing industries. Our contract professionals include chemists, clinical research associates, clinical lab assistants, engineers, biologists, biochemists, microbiologists, molecular biologists, food scientists, regulatory affairs specialists, lab assistants and other skilled scientific professionals.

The Healthcare segment includes our Nurse Travel and Allied Healthcare lines of business. We offer our healthcare clients contract professionals, both locally-based and traveling, from more than ten healthcare and allied healthcare occupations. Our contract professionals include nurses, specialty nurses, health information management professionals, dialysis technicians, surgical technicians, imaging technicians, x-ray technicians, medical technologists, phlebotomists, coders, billers, claims processors and collections staff.

Our Physician segment consists of VISTA Staffing Solutions, Inc. (VISTA) which is a leading provider of physician staffing, known as locum tenens, and permanent physician search services based in Salt Lake City, Utah. We provide short and long-term locum tenens and coverage and full-service physician search and consulting in the United States with capabilities in Australia and New Zealand. VISTA works with physicians from nearly all medical specialties, placing them in hospitals, community-based practices, and federal, state and local facilities.

Our IT and Engineering segment consists of Oxford Global Resources, Inc. (Oxford) which delivers high-end consultants with expertise in specialized information technology; software and hardware engineering; and mechanical, electrical, validation and telecommunications engineering fields. We combine international reach with local depth, serving clients through a network of Oxford International recruiting centers in the United States and Europe, and Oxford & Associates branch offices in major metropolitan markets across the United States. Oxford is based in Beverly, Massachusetts.

First Quarter 2009 Update

During the first quarter, each of the markets we serve, except for the physician staffing market, were severely impacted by economic and credit market conditions. Demand for our Nurse Travel and Allied Healthcare lines of business were impacted by hospital's cash constraints and lower patient demand. Demand for our Life Sciences and IT and Engineering segment decreased as companies eliminated, reduced or deferred their capital expenditures. However, our Physician segment demonstrated solid performance as demand for their services increased and key indicators grew year-over-year. Furthermore, during the first quarter, we were able to expand our consolidated gross margins and hourly bill/pay spread and reduce operating expenses compared to the prior year.

Looking forward, we expect the operating environment to continue to be challenging. However, we are starting to see signs that demand is stabilizing for our Life Sciences and IT and Engineering segments and demand continues for the Physician segment. Our focus will remain on maintaining or expanding our operating and gross margins, generating cash and growing our revenues faster than our competitors.

Seasonality

Demand for our staffing services historically has been lower during the first and fourth quarters due to fewer business days resulting from client shutdowns and a decline in the number of contract professionals willing to work during the holidays. Demand for our staffing services usually increases in the second and third quarters of the year. In addition, our cost of services typically increases in the first quarter primarily due to the reset of payroll taxes.

RESULTS OF OPERATIONS

The following table summarizes selected statements of operations data expressed
as a percentage of revenues:

                                                 Three Months Ended
                                                      March 31,
                                                  2009          2008
                                                     (Unaudited)
Revenues                                            100.0 %      100.0 %
Cost of services                                     68.3         68.9
Gross profit                                         31.7         31.1
Selling, general and administrative expenses         28.4         26.0
Operating income                                      3.3          5.1
Interest expense                                     (0.9 )       (2.5 )
Interest income                                         -          0.1
Income before income taxes                            2.4          2.7
Provision for income taxes                            1.0          1.1
Net income                                            1.4 %        1.6 %

CHANGES IN RESULTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2009 AND 2008

Revenues


                                              Three Months Ended March 31,                 Change
                                                2009                 2008              $              %
Revenues by segment (in thousands):
 Life Sciences                             $       25,376       $       32,583     $  (7,207 )       (22.1 %)
 Healthcare                                        31,511               44,525       (13,014 )       (29.2 %)
 Physician                                         21,744               20,579         1,165           5.7 %
 IT and Engineering                                38,171               54,726       (16,555 )       (30.3 %)
Total Revenues                             $      116,802       $      152,413     $ (35,611 )       (23.4 %)

Revenues decreased $35.6 million, or 23.4 percent, as a result of weakened demand in our IT and Engineering, Healthcare and Life Science segments.

Life Sciences segment revenues decreased $7.2 million, or 22.1 percent. The decrease in revenues was primarily attributable to a 20.3 percent decrease in the average number of contract professionals on assignment, a $1.0 million, or 54.8 percent decrease in direct hire and conversion fee revenues and the deteriorating foreign exchange rate for the British Pound and the Euro combined with the continued effect of the recession in the United Kingdom and the United States. These decreases were partially offset by a 1.9 percent increase in the average bill rate. The year-over-year decrease in revenues is a direct result of our clients' decisions to focus more on cost containment than on completing projects, developing new products or enhancing existing product lines during this challenging economic period.

The decrease in Healthcare segment revenues, which include our Nurse Travel and Allied Healthcare lines of business, consisted of a decrease in both the Nurse Travel and Allied Healthcare lines of business revenues. Nurse Travel revenues decreased $9.9 million, or 31.8 percent, to 21.3 million. The decrease in revenues was primarily attributable to a 21.7 percent decrease in the average number of nurses on assignment and $0.3 million, or 85.3 percent decrease in reimbursable revenue for billable expenses. In addition, the Nurse Travel revenues in our first quarter of 2008 included $2.4 million related to supporting a long-standing customer that experienced a labor disruption. Allied Healthcare revenues decreased $3.1 million, or 23.2 percent, due to a 17.5 percent decrease in the average number of contract professionals on assignment, partially offset by a 2.0 percent increase in the average bill rate. The year-over-year decrease in revenues is attributable to less demand from hospitals and other healthcare facilities as a result of their reduced usage of contract professionals in response to declining endowment balances, charitable contributions and patient admissions.

Physician segment revenues increased $1.2 million, or 5.7 percent, as demand for physician staffing services remained strong and an increase of 8.7 percent in the average bill rate. This increase was partially offset by $0.3 million, or a 19.0 percent, decrease in reimbursable revenue for billable expenses. The year-over-year increase in revenues reflects the continuing shortage of physicians, particularly in specialized disciplines.

The IT and Engineering segment revenues decreased $16.6 million, or 30.3 percent. The decrease in revenue was primarily due to a 29.0 percent decrease in the average number of contract professionals on assignment, as well as a 4.4 percent decrease in the average bill rate. In addition, reimbursable revenue for billable expenses decreased $0.8 million, or 39.4 percent. The year-over-year decrease in revenues is partly a result of decreased demand from pharmaceutical companies, and firms in service-related industries, who are deferring capital projects due to the downturn in the economy.

Gross profit and gross margin

                                                                 Three Months Ended March 31,
                                                             2009                            2008
                                                                      Gross                           Gross
                                                   Gross Profit       Margin       Gross Profit       Margin
Gross Profit by segment (in thousands):                                   (Unaudited)
 Life Sciences                                    $        8,102         31.9 %   $       10,715         32.9 %
 Healthcare                                                8,307         26.4 %           10,764         24.2 %
 Physician                                                 6,542         30.1 %            5,810         28.2 %
 IT and Engineering                                       14,033         36.8 %           20,139         36.8 %
Total Gross Profit                                $       36,984         31.7 %   $       47,428         31.1 %

The year-over-year gross profit decrease was primarily due to the decrease in revenues in the IT and Engineering, Life Sciences and Healthcare segments, partially offset by a 55 basis points expansion in consolidated gross margin. The increase in gross margin was primarily attributable to increases in margins in the Healthcare and Physician segments.

Life Sciences segment gross profit decreased $2.6 million, or 24.4 percent. The decrease in gross profit was primarily due to a 22.1 percent decrease in the segment revenues as well as a 96 basis points decrease in gross margin. The decrease in gross margin was predominantly due to a $1.0 million decrease in direct hire and conversion fee revenues. The decrease in gross margin was partially offset by a 3.3 percent increase in the bill/pay spread as a result of our continued focus on pricing policies.

Healthcare segment gross profit decreased $2.5 million, or 22.8 percent. The decrease in gross profit was due to a 29.2 percent decrease in the segment revenues, partially offset by a 2.2 percent increase in gross margin. Gross margin for the segment increased 219 basis points due in part to a 2.7 percent increase in the bill/pay spread, $0.5 million or a 105.3 percent decrease in workers' compensation expenses as a result of efforts in closely managing historical claims, partially offset by an increase in other contract employee expenses. This segment includes gross profit from the Nurse Travel and Allied Healthcare lines of business. Allied Healthcare gross profit decreased 18.6 percent and gross margin increased 185 basis points while Nurse Travel gross profit decreased 25.4 percent and gross margin increased 202 basis points. Gross margins in the first quarter of a year tend to be lower than the fourth quarter of the preceding year due to the reset of certain payroll taxes.

Physician segment gross profit increased $0.7 million, or 12.6 percent. The increase in gross profit was primarily attributable to a 5.7 percent increase in revenues as well as an increase in gross margin. Gross margin for the segment increased 185 basis points primarily due to a 20.1 percent increase in the bill/pay spread, partially offset by increased medical malpractice expense, which included a $0.6 million non-cash expense related to the Company's adjustment of the discount rate applied to our medical malpractice liability because of the decrease in interest rates.

IT and Engineering segment gross profit decreased $6.1 million, or 30.3 percent, primarily due to a 30.3 percent decrease in revenues. Gross margin for the segment were flat as compared to the margins for the quarter ended March 31, 2008.

Selling, general and administrative expenses

Selling, general and administrative (SG&A) expenses include field operating expenses, such as costs associated with our network of staffing consultants and branch offices for each of our four segments, including staffing consultant compensation, rent and other office expenses, as well as marketing and recruiting expenses for our contract professionals. SG&A expenses also include our corporate and branch office support expenses, such as the salaries of corporate operations and support personnel, recruiting and training expenses for field staff, marketing staff expenses, expenses related to being a publicly-traded company and other general and administrative expenses.

For the three months ended March 31, 2009, SG&A expenses decreased $6.6 million, or 16.5 percent, to $33.1 million from $39.7 million for the same period in 2008. The decrease in SG&A was primarily due to a $4.0 million decrease in compensation and benefits as a result of decreased headcount as compared with the prior year. The decrease in SG&A expense was also due to a $0.8 million decrease in amortization expense primarily related to a reduction of the amortization amount for intangible assets beginning in late 2008. Total SG&A as a percentage of revenues increased to 28.4 percent for the three months ended March 31, 2009 from 26.0 percent in the same period in 2008, primarily due to revenue decreasing faster than SG&A in the three months ended March 31, 2009.

Interest expense and interest income

Interest expense was $1.1 million and $3.9 million for the three months ended March 31, 2009 and 2008, respectively. The decrease in interest expense was primarily due to lower average debt balances in 2009 due to a $10.0 million principal payment on our term loan in December 2008, and lower interest rates during the first quarter of 2009 compared with the same period in 2008. Interest expense included a $0.7 million gain and $1.2 million loss, for the three months ended March 31, 2009 and 2008, respectively, for the mark-to-market adjustment on our interest rate swap. The related liability of $0.7 million and $1.3 million as of March 31, 2009 and December 31, 2008, respectively, is included in the Consolidated Balance Sheets in other current liabilities.

Interest income was $56,000 and $0.3 million for the quarters ended March 31, 2009 and 2008, respectively. Interest income in the current period was also lower due to lower average interest rates in 2009.

Provision for income taxes

The provision for income taxes was $1.2 million for the three months ended March 31, 2009 compared with $1.7 million for the same period in the prior year. The annual effective tax rate was 41.6 percent for the three months ended March 31, 2009 and 41.7 percent for the same period in 2008.

LIQUIDITY AND CAPITAL RESOURCES

Our working capital at March 31, 2009 was $80.2 million, including $46.5 million in cash and cash equivalents. Our operating cash flows have been our primary source of liquidity and historically have been sufficient to fund our working capital and capital expenditure needs. Our working capital requirements consist primarily of the financing of accounts receivable, payroll expenses and the periodic payments of principal and interest on our term loan.

Net cash provided by operating activities was $18.2 million for the three months ended March 31, 2009 compared with $6.8 million in the same period in 2008. Net cash provided by operating activities in the three months ended March 31, 2009 was higher compared with the same period in 2008, primarily due to a decrease in accounts receivable and accrued payroll and contract professional pay in the three months ended March 31, 2009 due to lower revenue levels and improved days sales outstanding.

Net cash used in investing activities decreased to $1.7 million in the three months ended March 31, 2009 from $2.8 million in the same period in 2008, primarily due to lower capital expenditures. Capital expenditures related to information technology projects, leasehold improvements and various property and equipment purchases for the three months ended March 31, 2009 totaled $1.6 million, compared with $2.5 million in the comparable 2008 period. We estimate capital expenditures to be approximately $4.0 million for 2009.

Net cash used in financing activities was $15.8 million for the year ended March 31, 2009, compared with net cash provided by financing activities of $0.6 million for the same period in 2008. In March 2009, we paid down our term loan facility $15.0 million and in April we paid down an additional $10.0 million.

Under the terms of our credit facility, we are required to maintain certain financial covenants, including a minimum total leverage ratio, a minimum interest coverage ratio and a limitation on capital expenditures. The facility also restricts our ability to pay dividends of more than $2.0 million per year. On March 27, 2009, we entered into an amendment to our credit facility that modified certain financial covenants. The maximum total leverage ratio (total debt to adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, as defined by the credit agreement for the preceding 12 months) was increased to 3.25:1.00 for calendar year 2009, 3.00:1.00 for January 1, 2010 through September 30, 2010, 2.75:1.00 for October 1, 2010 through December 31, 2011, and 2.50:1.00 for January 1, 2012 and thereafter, and the minimum interest coverage ratio (EBITDA to interest expense, as defined by the credit agreement for the preceding 12 months) was increased to 4.00:1.00 until maturity. The amendment also modified the definition of the LIBOR rate to include a 3.0 percent floor and increased the spread on revolving and term loans by 150 basis points to 3.75 percent. As a condition to the effectiveness of the amendment, we paid down the principal balance on the term loan $15.0 million. The principal payments made to date on the term loan were sufficient to cover required payments under the credit facility, as well as all minimum quarterly payments until maturity on January 31, 2013. On April 30, 2009, we paid an additional $10.0 million against the principal balance of the term loan. Based on our current operating plan, we believe we will maintain compliance with the covenants contained in our credit facility for the next 12 months.

As of March 31, 2009, we have accrued $5.3 million and $4.8 million for the payment of the earn-outs related to the 2008 operating performance of VISTA and Oxford, respectively. The VISTA earn-out was paid in April 2009 and the Oxford earn-out is scheduled to be paid during the second quarter of 2009. We have notified the selling shareholders of VISTA of certain claims for indemnification, totaling $1.4 million, which was recorded as a decrease to goodwill and an increase in other current assets as of December 31, 2008. We anticipate that the final amount of the indemnification payments will be settled by the agreement of all applicable parties to the terms and provisions related to such payment.

We continue to make progress on enhancements to our front-office and back-office information systems. These enhancements include the consolidation of back-office systems across all corporate functions, as well as enhancements to and broader application of our front-office software across all lines of business. The timing of the full integration of information systems used by VISTA and Oxford will remain a consideration of management.

During 2008, certain stock-based awards issued under our approved stock option plan vested. Under the provisions of this plan, a portion of the vested shares were withheld by us in order to satisfy minimum payroll tax obligations of the employee. The vested shares withheld have been recorded as treasury stock, a reduction to stockholder's equity, at the fair market value on the date that the tax obligation was determined, which was also the vesting date of the awards. As of March 31, 2009, there were 192,816 shares withheld related to stock-based awards and included in treasury stock at a fair market value of $1.6 million.

We believe that our working capital as of March 31, 2009, our credit facility and positive operating cash flows expected from future activities will be sufficient to fund future requirements of our debt obligations, accounts payable and related payroll expenses as well as capital expenditure initiatives for the next twelve months.

Recent Accounting Pronouncements

See Note 2, Recent Accounting Pronouncements, of the Notes to the Condensed Consolidated Financial Statements for a discussion of new accounting pronouncements.

Critical Accounting Policies

There have been no significant changes to our critical accounting policies and estimates during the three months ended March 31, 2009 compared with those disclosed in Note 1 of the Notes to the Condensed Consolidated Financial Statements in Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2008, as filed with the SEC on March 16, 2009.

Commitments

We have not entered into any significant commitments or contractual obligations that have not been previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2008, as filed with the SEC on March 16, 2009.