The Company's condensed consolidated financial statements present a consolidation of all its operations. This discussion supplements the detailed information presented in the condensed consolidated financial statements and notes thereto which should be read in conjunction with the consolidated financial statements and related notes contained in the Company's Annual Report on Form 10-K, filed for the year ended December 31, 2008, and is intended to assist the reader in understanding the financial results and condition of the Company.

Overview

We are a diversified leader in healthcare staffing services. We offer a comprehensive suite of staffing and outsourcing services to the healthcare market, which together include being a leading provider of nurse and allied staffing services in the United States; a national provider of multi-specialty locum tenens (temporary physician staffing) services; a provider of clinical trials services to global pharmaceutical and biotechnology customers; and a provider of other human capital management services focused on healthcare, including education and retained search.

We have a diversified revenue mix across business sectors and healthcare customers. For the quarter ended September 30, 2009, our nurse and allied staffing business segment represented approximately 49% of our revenue and is comprised of travel and per diem nurse staffing and travel allied health staffing. Travel nurse staffing represented approximately 37% of our total revenue and 75% of our nurse and allied staffing business segment revenue. Other nurse and allied staffing services include the placement of per diem nurses and allied healthcare professionals, such as radiology technicians, rehabilitation therapists and respiratory therapists. Our physician staffing business segment represented approximately 31% of revenue in the third quarter of 2009 and consists of temporary physician staffing services (locum tenens). Our clinical trials services business segment represented approximately 13% of our revenue and consists of service offerings that include traditional staffing, as well as clinical trials management, drug safety monitoring and regulatory services to pharmaceutical and biotechnology customers. Our other human capital management services business segment represented approximately 7% of our revenue and consists of education and training and retained search services.

For the quarter ended September 30, 2009, our revenue was $129.6 million, and net income was $1.0 million, or $0.03 per diluted share. Cash flow provided by operating activities for the first nine months of 2009, was $69.9 million and was primarily used to repay debt. During the nine months ended September 30, 2009, we also used cash on hand to pay our earnout obligations of $7.5 million related to our recent acquisitions. We ended the quarter with total debt of $69.5 million and $12.0 million of cash, resulting in a ratio of debt, net of cash, to total capitalization of 18.4% as of September 30, 2009.

In general, we evaluate the Company's financial condition and operating results by revenue, contribution income (see Segment Information), and net income. We also use measurement of our cash flow generation and operating and leverage ratios to help us assess our financial condition. In addition, we monitor several key volume and profitability indicators such as number of open orders, contract bookings, number of FTEs and bill rate per hour of service provided.

In varying degrees, each of our businesses' results in the quarter were impacted by the challenging business environment we have experienced, with the impact of the recession being most severe on our travel nursing business and least severe on our physician staffing business. At the same time, we have also experienced improvements in certain business metrics which we believe are indicators of future revenue growth, particularly in our nurse and allied staffing business segment as noted below.

Nurse and Allied Staffing

Our results in the third quarter of 2009 were impacted by a very challenging environment for this business in the first half of the year. During that time, the environment for our nurse and allied staffing services reflected both hospital admission trends that have been largely flat since the first quarter of 2003 and a deteriorating national labor market resulting in higher levels of unemployment that translated into more uninsured people and fewer people with commercial health insurance coverage. Our hospital clients had been increasingly reluctant to commit to contract nurses, most often citing low patient census and financial pressures as factors for their hesitation. In addition, the dramatic deterioration in the economy and national labor markets since the third quarter of 2008 likely encouraged

full and part-time nurses to work more hours directly for hospitals, thus greatly reducing the hospital industry's reliance on the type of outsourced labor we provide.

Since mid-September our travel staffing volume has increased 7%. In addition, in the third quarter of 2009, relative travel nurse bookings, defined as net weeks booked as a percentage of the average number of FTE's on assignment, averaged 112% during the third quarter, as compared to 73% in the second quarter of 2009. It takes several months for sequential volume growth to materialize after booking trends begin to improve due to the typical three-month contract length and the normal one-month delay from the time a contract is booked to the assignment start date. This improvement in staffing volume has resulted from a significant increase in demand since the spring with our current open orders for travel nurses, while still at relatively low levels, at more than six times the levels seen prior to the summer. Our analysis of the increase in demand indicates that it is spread across numerous nursing specialties and suggests the increase is not just related to the H1N1 virus or normal seasonality. While we do not expect our staffing volume to parallel the rapid increase in demand, it does change the constraints on our growth from one of demand to one of supply.

Physician Staffing

We believe the recession, the stock market decline and the weakened housing market have delayed the retirement plans of many older physicians. This dynamic, in conjunction with fewer elective surgeries, has resulted in a decrease in demand for temporary physicians, particularly in such specialties as anesthesiology and surgery. We also believe that hospitals and medical groups have experienced financial pressures on their operations which have resulted in less utilization of temporary physicians.

Clinical Trials Services

The environment for clinical trials services has been weak during the year stemming from a slow-down in clinical trials caused largely by economic factors and financial market conditions, along with uncertainty concerning research and development activities following mergers and acquisitions in the pharmaceutical and biotechnology sectors. We are seeing gradual improvement in the core contract staffing component of our business while continuing to experience weakness in our other service offerings due to project-specific factors in our CRO activities and in drug safety monitoring activities. Despite the recent weaknesses, demographic factors and advances in biotechnology should drive long-term growth for this business segment.

Results of Operations

The following table summarizes, for the periods indicated, selected condensed
consolidated statements of income data expressed as a percentage of revenue:

                                            Three Months Ended          Nine Months Ended
                                               September 30,              September 30,
                                            2009           2008         2009          2008
Revenue from services                        100.0 %       100.0 %       100.0 %      100.0 %
Direct operating expenses                     72.7          73.4          73.3         73.8
Selling, general and administrative
expenses                                      22.3          18.8          21.2         18.6
Bad debt expense                              (0.2 )         0.1          (0.0 )        0.1
Depreciation and amortization                  2.3           1.4           2.1          1.4
Income from operations                         2.9           6.3           3.4          6.1
Foreign exchange loss (gain)                   0.0          (0.0 )         0.0         (0.0 )
Interest expense, net                          1.3           0.4           1.0          0.3
Other income                                  (0.2 )         0.0          (0.0 )        0.0
Income before income taxes                     1.8           5.9           2.4          5.8
Income tax expense                             1.1           2.4           1.0          2.3
Net income                                     0.7 %         3.5 %         1.4 %        3.5 %

Acquisitions

MDA Holdings, Inc.

On September 9, 2008, we consummated the acquisition of substantially all of the assets of privately-held MDA Holdings, Inc. and its subsidiaries and all of the outstanding stock of a subsidiary of MDA Holdings, Inc. (collectively, MDA). We paid $115.9 million in cash at closing, which included $3.6 million as an estimated net working capital adjustment which was subject to final adjustments. Of the cash paid at closing, approximately $8.7 million was being held in escrow to cover any post-closing liabilities (Indemnification Escrow) and $0.3 million was being held in escrow to cover any net working capital adjustments (Net Working Capital Escrow). During the fourth quarter of 2008, approximately $1.6 million of the Indemnification Escrow was released to us and recorded to goodwill as a reduction in purchase price. Also during the fourth quarter of 2008, we finalized the net working capital adjustment and calculated an additional payment to the sellers of approximately $0.1 million which was paid and included in goodwill as additional purchase price. In connection with this net working capital adjustment, the entire Net Working Capital Escrow of $0.3 million was also released to the sellers. Additionally, a post-closing adjustment to the purchase price of approximately $0.3 million was paid to the sellers in the fourth quarter of 2008 and is included in goodwill as additional purchase price.

The transaction also includes an earnout provision based on 2008 and 2009 performance criteria. This contingent consideration is not related to the sellers' continued employment. Any earnout payments are allocated to goodwill as additional purchase price, in accordance with the Business Combinations Topic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC). In the second quarter of 2009, we paid $6.7 million, related to the 2008 performance.

Our senior secured revolving credit was amended and restated as of September 9, 2008 (Credit Agreement) to keep in place an existing $75.0 million revolving loan facility and provide for a 5 year $125.0 million term loan facility with Wachovia Capital Markets, LLC and certain of its affiliates, Banc of America Securities LLC and certain other lenders. The proceeds from the term loan were used to fund the acquisition, pay financing related fees, and pay certain acquisition expenses. The remainder of the proceeds was used to reduce our borrowings under our revolving loan facility.

Headquartered in Norcross, Georgia, MDA provides multi-specialty locum tenens (temporary physician staffing) and allied staffing services to the healthcare industry in all 50 states. MDA is a leading provider of locum tenens staffing solutions. MDA has an in-house NCQA-certified Credentials Verification Organization which verifies critical credentials prior to physician assignments. It also offers its physicians occurrence-based malpractice coverage, as compared to less desirable claims-made policies offered by its main competitors. The acquisition of MDA solidifies our position as a leading national provider of healthcare staffing solutions. We expect to benefit from a more diversified revenue stream as physicians are viewed as revenue generators by its hospital clients, as compared to nurses, who represent a cost center. We are also able to offer a more comprehensive suite of services for our healthcare clients and recognize there may be some potential synergies with our physician search business.

The acquisition has been accounted for in accordance with Business Combinations Topic of the FASB ASC, using the purchase method. The results of MDA's operations have been included in the consolidated statements of income since September 1, 2008, the agreed-upon accounting date of the acquisition. MDA's allied staffing services have been included in our nurse and allied staffing business segment. MDA's physician staffing services have been reported as a new business segment, physician staffing, in accordance with the Segment Reporting Topic of the FASB ASC.

Based on an independent third-party appraisal, we assigned the following values to intangible assets: $46.0 million to trademarks with an indefinite life and not subject to amortization, $21.0 million for customer relations with a useful life of 12 years, $1.1 million to database with a useful life of 9 years, and $1.0 million to noncompete agreements with a weighted average useful life of 4 years. The excess of purchase price over the fair value of net tangible and intangible assets acquired approximated $26.4 million and was recorded as goodwill, which is expected to be deductible for tax purposes. Additional acquisition costs of approximately $0.7 million and $0.6 million are included as goodwill on the consolidated balance sheets at September 30, 2009 and December 31, 2008, respectively.

Assent Consulting

On July 18, 2007, we completed an acquisition of the shares of privately-held Assent Consulting (Assent) for $19.6 million in cash paid at closing, including $1.0 million which was held in escrow to cover any post-closing liabilities. The purchase price was subject to a working capital adjustment that was settled with a payment of $0.5 million to us in the fourth quarter of 2007. This transaction also includes an earnout provision up to a maximum of $4.9 million based on 2007 and 2008 performance criteria. This contingent consideration was not related to the sellers' employment. In the second quarter of 2008, we paid $4.6 million related to 2007 performance satisfying all earnout amounts potentially due to the seller in accordance with the asset purchase agreement. Of this payment, $2.0 million was being held in escrow, subject to forfeiture to us, to the extent a 2008 performance milestone was not achieved. However, based on 2008 performance, the full amount was released to the seller in the first quarter of 2009. The entire payment was allocated to goodwill as additional purchase price, in accordance the Business Combinations Topic of the FASB ASC. In addition, in the first quarter of 2009, the escrow for post-closing liabilities of $1.0 million was released to the sellers.

AKOS Limited

On June 6, 2007, we acquired all of the shares of privately-held AKOS Limited (AKOS), based in the United Kingdom, for a total purchase price of up to £7.2 million, consisting of an up-front payment of £4.0 million and potential earnout payments up to £3.2 million in 2007 and 2008, plus a working capital adjustment. The share purchase agreement also specified an estimated additional payment of £0.5 million, paid at closing, consisting of cash purchased. An additional amount of £0.2 million was paid in the third quarter of 2007, based on changes in net working capital, as defined by the share purchase agreement, and has been allocated to goodwill as additional purchase price.

The consideration for this acquisition was approximately $8.9 million in cash paid at closing, which included $1.0 million for the additional payment and $0.8 million held in escrow to cover any post-closing liabilities. The post-closing working capital adjustment paid by us equated to approximately $0.3 million.

The potential earnout payments were based on 2007 and 2008 performance, as defined by the share purchase agreement and were not related to the sellers' employment. In the first quarter of 2008, we paid £1.1 million (approximately $2.1 million) related to 2007 performance. In the second quarter of 2009, we paid the sellers £0.5 million (approximately $0.7 million) related to 2008 performance. The payments have been allocated to goodwill as additional purchase price, in accordance with the Business Combinations Topic of the FASB ASC. During the fourth quarter of 2008, all of the funds held in escrow were released to the sellers.

Goodwill and Other Identifiable Intangible Assets

Goodwill and other intangible assets represented 92% of our stockholders' equity as of September 30, 2009. Goodwill and other identifiable intangible assets (including trademarks) from the acquisition of the assets of our predecessor, Cross Country Staffing, a partnership, as well as from subsequent acquisitions were $130.7 million and $94.1 million, respectively, net of accumulated amortization, at September 30, 2009. In accordance with the Intangibles-Goodwill and Other Topic of the FASB ASC, goodwill and certain other identifiable intangible assets are not subject to amortization; instead, we review impairment annually. Other identifiable intangible assets, which are subject to amortization, are being amortized using the straight-line method over their estimated useful lives ranging from 1 to 15 years.

Segment Information

Our nurse and allied staffing business segment provides travel nurse and allied staffing services and per diem nurse services primarily to acute care hospitals. Nurse and allied staffing services are also marketed to public and private healthcare facilities and for-profit and not-for-profit facilities throughout the U.S.

In the third quarter of 2008, we added the physician staffing business segment as a result of our acquisition of MDA. MDA provides multi-specialty locum tenens and allied staffing services to the healthcare industry in all 50 states. MDA's locum tenens business comprises our physician staffing business segment while MDA's allied staffing services have been aggregated with our nurse and allied staffing business segment.

Our clinical trials services business segment provides clinical trials, drug safety and regulatory professionals and services on a contract staffing and outsourced basis to companies in the pharmaceutical, biotechnology and medical

device industries, as well as to contract research organizations (CRO) and acute care hospitals conducting clinical research trials in the United States, Canada and Europe.

Our other human capital management services business segment includes the combined results of our education and training and retained search businesses.

Information on operating segments and a reconciliation to income from operations for the periods indicated are as follows:

                                        Three Months Ended           Nine Months Ended
                                           September 30,               September 30,
                                        2009          2008          2009          2008
 (Amounts in thousands)
 Revenue from external customers:
 Nurse and allied staffing            $  64,053     $ 128,910     $ 247,664     $ 402,241
 Physician staffing                      39,595        10,831       118,600        10,831
 Clinical trials services                16,426        25,414        56,816        75,181
 Other human capital management
 services                                 9,561        12,979        31,018        40,083
                                      $ 129,635     $ 178,134     $ 454,098     $ 528,336

 Contribution income (a):
 Nurse and allied staffing            $   6,236     $  14,332     $  23,466     $  41,132
 Physician staffing                       3,961           928        11,334           928
 Clinical trials services                 1,652         3,755         6,111        11,937
 Other human capital management
 services                                   682         1,589         1,940         6,092
                                         12,531        20,604        42,851        60,089

 Unallocated corporate overhead           5,732         6,844        17,741        20,284
 Depreciation                             2,034         1,789         6,645         5,352
 Amortization                             1,005           713         3,046         2,029
 Income from operations               $   3,760     $  11,258     $  15,419     $  32,424


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(a)

We define contribution income as income from operations before depreciation, amortization and other corporate expenses not specifically identified to a reporting segment. Contribution income is a measure used by management to access operations and is provided in accordance with the Segment Reporting Topic of the FASB ASC.

Three Months Ended September 30, 2009 compared to Three Months Ended September 30, 2008

Revenue from services

Revenue from services decreased $48.5 million, or 27.2%, to $129.6 million for the three months ended September 30, 2009, as compared to $178.1 million for the three months ended September 30, 2008. The decrease was primarily due to a decrease in revenue from our nurse and allied staffing business segment, as well as decreases in our clinical trials services and other human capital management services business segments, which were partially offset by the added revenue of MDA. Excluding the results of the MDA acquisition, consolidated revenue from services decreased $78.2 million or 46.9%, reflecting a challenging operating environment for all of our business segments.

Nurse and allied staffing

Revenue from our nurse and allied staffing business segment decreased $64.9 million, or 50.3%, to $64.1 million in the three months ended September 30, 2009, from $128.9 million in the three months ended September 30, 2008, primarily due to lower volume. The decline in staffing volume reflects a weakening national labor market on the demand for our services, as well as the impact of the liquidity crisis on our hospital customers' cost of capital.

The average number of nurse and allied staffing FTEs on contract during the three months ended September 30, 2009, decreased 48.5% from the three months ended September 30, 2008. Average nurse and allied staffing revenue per FTE decreased approximately 3.5% in the three months ended September 30, 2009 compared to the three months ended September 30, 2008, primarily due to a higher mix of per diem staffing operations, which tend to have

lower average bill rates than travel staffing, and a shift in mix toward lower skilled professionals within our per diem staffing operations. The average bill rate in our travel staffing operations was essentially flat.

Physician staffing

Revenue from our physician staffing business was $39.6 million for the three months ended September 30, 2009, compared to $10.8 million in the three months ended September 30, 2008. The Company established the physician staffing business segment in September 2008 with its acquisition of MDA.

Clinical trials services

Revenue from clinical trials services decreased $9.0 million, or 35.4%, to $16.4 million in the three months ended September 30, 2009, from $25.4 million in the three months ended September 30, 2008. This decline was primarily due to a decrease in contract staffing volume, several clinical research projects that ended in the third quarter of 2009, and a decrease in revenue from a specific drug safety contract.

Other human capital management services

Revenue from other human capital management services for the three months ended September 30, 2009, decreased $3.4 million, or 26.3%, to $9.6 million from $13.0 million in the three months ended September 30, 2008, reflecting a decrease in revenue related to the number of retained searches we performed and lower average seminar attendance.

Direct operating expenses

Direct operating expenses are comprised primarily of field employee and independent contractor compensation expenses, housing expenses, travel expenses and field insurance expenses. Direct operating expenses decreased $36.4 million, or 27.9%, to $94.3 million for the three months ended September 30, 2009, as compared to $130.7 million for three months ended September 30, 2008.

As a percentage of total revenue, direct operating expenses represented 72.7% of revenue for the three months ended September 30, 2009, and 73.4% for the three months ended September 30, 2008. The decrease is primarily due to a widening of our bill-pay spread in our travel staffing operations and lower housing costs as a percentage of revenue; partially offset by increased insurance expenses for our field staff as a percentage of revenue.

Selling, general and administrative expenses

Selling, general and administrative expenses decreased $4.6 million, or 13.8%, to $28.9 million for the three months ended September 30, 2009, as compared to $33.5 million for the three months ended September 30, 2008. The decrease in selling, general and administrative expenses was primarily due to our efforts to reduce overhead expenses, partially offset by the additional expenses from the MDA acquisition and severance costs of $0.3 million.

Included in selling, general and administrative expenses is unallocated corporate overhead of $5.7 million for three months ended September 30, 2009, compared to $6.8 million for the three months ended September 30, 2008. As a percentage of consolidated revenue, unallocated corporate overhead was 4.4% for the three month period ended September 30, 2009 and 3.8% for the three month period ended September 30, 2008.

As a percentage of total revenue, selling, general and administrative expenses were 22.3% and 18.8%, for the three months ended September 30, 2009 and 2008, respectively. This increase is primarily due to negative operating leverage.

Bad debt expense

Bad debt expense was $(0.3) million and $0.2 million for the three month periods ended September 30, 2009 and 2008, respectively, reflecting improved collections in both periods.

Contribution income

Contribution income from our nurse and allied staffing segment for the three months ended September 30, 2009, decreased $8.1 million or 56.5%, to $6.2 million from $14.3 million in three months ended September 30, 2008. As a percentage of nurse and allied staffing revenue, segment contribution income was 9.7% for the three months ended September 30, 2009, and 11.1% for the three months ended September 30, 2008. This decrease is primarily due to

negative operating leverage and higher insurance expenses for our field staff; partially offset by a widening of our bill-pay spread and lower housing expenses as a percentage of revenue.

Contribution income from physician staffing for the three months ended September 30, 2009, was $4.0 million and $0.9 million in the three months ended September 30, 2008. The physician staffing business segment was established in September 2008 as noted previously. As a percentage of physician staffing revenue, contribution income was 10.0% in the three months ended September 30, 2009 compared to 8.6% in the three months ended September 30, 2008.

Contribution income from clinical trials services for the three months ended September 30, 2009, decreased $2.1 million, or 56.0%, to $1.7 million, from . . .