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 continued 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 in 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 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 coverage, and permanent physician search services based in Salt Lake City, Utah. We provide short and long-term locum tenens 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.

Third Quarter 2009 Update

Demand for our services remained relatively flat compared to last quarter and was down significantly compared to the comparable quarter in 2008 as labor markets remain weak. However, gross margins improved in the third quarter compared to last quarter and to the third quarter of 2008 as a result of our continued efforts to maintain pricing. Demand for our services in the Life Sciences and IT and Engineering segments continued to be affected by the lack of capital

available to clients for projects and programs. The uncertainty surrounding health care reform has begun to affect demand for our locum tenens coverage. Demand for our Nurse Travel and Allied Healthcare lines of business continued to be impacted by hospitals cash constraints and lower patient demand.

Nevertheless, the number of billable consultants on assignment improved for the first time since the third quarter of 2008. We anticipate this placement trend will allow revenues to grow sequentially on a same number of billable day basis in the seasonally impacted fourth quarter.

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. 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            Nine Months Ended
                                                     September 30,                September 30,
                                                  2009           2008           2009          2008
                                                      (Unaudited)                  (Unaudited)
Revenues                                            100.0 %        100.0 %        100.0 %       100.0 %
Cost of services                                     66.6           67.4           67.4          67.9
Gross profit                                         33.4           32.6           32.6          32.1
Selling, general and administrative expenses         29.0           24.2           28.9          25.0
Operating income                                      4.4            8.4            3.7           7.1
Interest expense                                     (1.8 )         (1.1 )         (1.6 )        (1.5 )
Interest income                                       0.0            0.1            0.0           0.1
Income before income taxes                            2.6            7.4            2.1           5.7
Provision for income taxes                            1.1            3.1            0.9           2.4
Net income                                            1.5 %          4.3 %          1.2 %         3.3 %

CHANGES IN RESULTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008

Revenues





                                      Three Months Ended September 30,               Change
                                           2009                2008              $              %
Revenues by segment (in thousands):                   (Unaudited)
 Life Sciences                        $        22,590       $    33,948     $  (11,358 )        (33.5 %)
 Healthcare                                    21,019            47,999        (26,980 )        (56.2 %)
 Physician                                     22,594            23,612         (1,018 )         (4.3 %)
 IT and Engineering                            31,850            56,388        (24,538 )        (43.5 %)
Total Revenues                        $        98,053       $   161,947     $  (63,894 )        (39.5 %)

Total revenues decreased $63.9 million, or 39.5 percent, as a result of weakened demand in all of our four segments.

Life Sciences segment revenues decreased $11.4 million, or 33.5 percent. The decrease in revenues was primarily attributable to a 30.3 percent decrease in the average number of contract professionals on assignment, as well as a $0.9 million, or 52.1 percent decrease in direct hire and conversion fee revenues. Based on our research and client feedback, we believe 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, softness in the clinical trials arena which is closely tied to the struggling pharmaceutical industry and decreased demand for recent graduates and lower level scientific skill disciplines.

The decrease in Healthcare segment revenues, which is comprised of 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 $22.7 million, or 67.9 percent, to $10.7 million. The decrease in revenues was primarily attributable to a 64.5 percent decrease in the average number of nurses on assignment, as well as a 5.7 percent decrease in the average bill rate. Allied Healthcare revenues decreased $4.3 million, or 29.3 percent, due to a 25.2 percent decrease in the average number of contract professionals on assignment, partially offset by an 8.6 percent increase in the average bill rate. Based on our research and client feedback, we believe 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 patient admissions, endowment balances, reduced charitable contributions and the inability to access the credit markets.

Physician segment revenues were down $1.0 million, or 4.3 percent. This decrease was primarily attributable to 16.1 percent decrease in the average number of physicians on assignment, partially offset by an increase of 10.4 percent in the average bill rate, as well as $0.4 million increase in direct hire and conversion fee revenues. We believe the year-over-year decrease in revenues reflects the uncertainty surrounding health care reform and the decline in patient admissions which has slowed down our clients' hiring decisions.

The IT and Engineering segment revenues decreased $24.5 million, or 43.5 percent. The decrease in revenues was primarily due to a 37.0 percent decrease in the average number of contract professionals on assignment, as well as a 10.0 percent decrease in the average bill rate. In addition, reimbursable revenue for billable expenses decreased $0.9 million and direct hire and conversion fee revenues decreased $0.7 million. Based on information from our clients, the year-over-year decrease in revenues is a direct result of the current economic environment and the lack of capital available to clients for projects and programs.

Gross profit and gross margin

                                         Three Months Ended September 30,
                                    2009                                  2008
                       Gross Profit       Gross Margin       Gross Profit       Gross Margin
 (in thousands):                                    (Unaudited)
 Life Sciences        $        7,599               33.6 %   $       11,609               34.2 %
 Healthcare                    6,279               29.9 %           12,265               25.6 %
 Physician                     7,536               33.4 %            7,455               31.6 %
 IT and Engineering           11,359               35.7 %           21,480               38.1 %
Consolidated          $       32,773               33.4 %   $       52,809               32.6 %

The year-over-year gross profit decrease was primarily due to the decrease in revenues of all of our four segments, partially offset by an 81 basis point expansion in consolidated gross margin. The increase in gross margin was primarily attributable to increases in margins in the Healthcare and Physician segments and a reduction in the percent of revenue related to the Nurse Travel line of business which has the lowest gross margin.

Life Sciences segment gross profit decreased $4.0 million, or 34.5 percent. The decrease in gross profit was primarily due to a 33.5 percent decrease in the segment revenues as well as a 56 basis point decrease in gross margin. The decrease in gross margin was predominantly due to a $0.9 million decrease in direct hire and conversion fee revenues. The decrease in gross margin was partially offset by a decrease in workers' compensation expense as a result of both lower claim frequency and favorable settlements.

Healthcare segment gross profit decreased $6.0 million, or 48.8 percent. The decrease in gross profit was due to a 56.2 percent decrease in the segment revenues, partially offset by a 432 basis point expansion in gross margin. The expansion in gross margin was primarily due to a 169 basis point decrease in travel related expenses and a 190 basis point reduction in other employee related expenses, partially offset by a 13.8 percent decrease in the bill/pay spread and a $61,000 reduction in permanent placement related revenues. This segment includes gross profit from the Nurse Travel and Allied Healthcare lines of business. Allied Healthcare gross profit decreased 23.2 percentage points and gross margin expanded 274 basis points while Nurse Travel gross profit decreased 64.3 percent and gross margin increased 256 basis points.

Physician segment gross profit increased $81,000, or 1.1 percent. The increase in gross profit was primarily attributable to a 1.8 percent increase in gross margin, partially offset by a 4.3 percent decrease in revenues. Gross margin for the segment increased 179 basis points primarily due to a 29.5 percent increase in the bill/pay spread and a $0.4 million increase in direct hire and conversion fee revenues, partially offset by an increase in medical malpractice expense.

IT and Engineering segment gross profit decreased $10.1 million, or 47.1 percent, primarily due to a 43.5 percent decrease in revenues and a 242 basis point contraction in gross margin. The contraction in gross margin was predominantly due to a 14.2 percent decrease in the bill/pay spread, as well as a $0.7 million decrease in direct hire and conversion fee revenues. The decrease in gross margin was partially offset by a $1.6 million decrease in other employee expenses.

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 September 30, 2009, SG&A expenses decreased $10.7 million, or 27.4 percent, to $28.5 million from $39.2 million for the same period in 2008. The decrease in SG&A expenses was primarily due to a $7.1 million decrease in compensation and benefits as a result of decreased headcount as compared with the prior year. The decrease in SG&A expenses was also due to a $0.9 million decrease in amortization expense primarily related to a reduction of the amortization amount due to fully amortized intangible assets beginning in late 2008. For the three months ended September 30, 2009, SG&A included a $0.3 million gain on proceeds from two insurance recoveries. Total SG&A expenses as a percentage of revenues increased to 29.0 percent for the three months ended September 30, 2009 from 24.2 percent in the same period in 2008, primarily due to revenue decreasing faster than SG&A expenses in the three months ended September 30, 2009.

Interest expense and interest income

Interest expense was $1.8 million and $1.9 million for the three months ended September 30, 2009 and 2008, respectively. Interest expense decreased compared to the same period in 2008 due to lower average debt balances, partially offset by higher interest rates resulting from the debt amendment completed in the first quarter of 2009. Interest expense included a $0.4 million gain for the three months ended September 30, 2008 for the mark-to-market adjustment on our interest rate swap, which expired on June 30, 2009 in accordance with the terms of the agreement. The swap expired as of June 30, 2009, thus there was no related liability as of September 30, 2009. The related liability was $1.3 million as of December 31, 2008, which was included in the condensed consolidated balance sheets in other current liabilities.

Interest income was $34,000 and $0.2 million for the three months ended September 30, 2009 and 2008, respectively. Interest income in the current period decreased compared to the same period in 2008 due to lower account balances invested in interest-bearing accounts and lower average interest rates.

Provision for income taxes

The provision for income taxes was $1.1 million for the three months ended September 30, 2009 compared with $5.0 million for the same period in the prior year. The estimated annualized effective tax rate, which excludes the effects of any discrete items, was 43.5 percent for the three months ended September 30, 2009 compared with 42.2 percent for the same quarter in the prior year.

CHANGES IN RESULTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008

Revenues



                                          Nine Months Ended September 30,                  Change
                                            2009                   2008                $              %
Revenues by segment (in thousands):                  (Unaudited)
 Life Sciences                        $         70,715       $         98,653     $  (27,938 )      (28.3%)
 Healthcare                                     75,782                138,368        (62,586 )      (45.2%)
 Physician                                      67,658                 66,005          1,653           2.5%
 IT and Engineering                            102,534                167,416        (64,882 )      (38.8%)
Total Revenues                        $        316,689       $        470,442     $ (153,753 )      (32.7%)

Revenues decreased $153.8 million, or 32.7 percent, as a result of weakened demand in the Healthcare, IT and Engineering and Life Sciences segments.

Life Sciences segment revenues decreased $27.9 million, or 28.3 percent. The decrease in revenues was primarily attributable to a 25.5 percent decrease in the average number of contract professionals on assignment, as well as a $2.7 million, or 55.4 percent decrease in direct hire and conversion fees. Based on our research and client feedback, we believe 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, decreased venture capital funding along with a decline in new investments in the life sciences sector, softness in the clinical trials arena which is closely tied to the struggling pharmaceutical industry and decreased demand for recent graduates and lower level scientific skill disciplines.

The decrease in Healthcare segment revenues, which is comprised of 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 $49.8 million, or 52.0 percent, to $46.1 million. The decrease in revenues was primarily attributable to a 46.6 percent decrease in the average number of nurses on assignment, as well as a 2.5 percent decrease in the average bill rate. Allied Healthcare revenues decreased $12.8 million, or 30.0 percent, to $29.7 million due to a 26.1 percent decrease in the average number of contract professionals on assignment and $0.7 million, or 40.1 percent, decrease in reimbursable revenue for billable expenses, partially offset by a 5.0 percent increase in the average bill rate. Based on our research and client feedback, we believe 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 patient admissions, endowment balances, reduced charitable contributions and the inability to access the credit markets.

Physician segment revenues increased $1.7 million, or 2.5 percent, as a result of continued demand for physician staffing services and an increase of 7.8 percent in the average bill rate. This increase was partially offset by a 10.5 percent decrease in the average number of physicians on assignment and $0.6 million decrease in reimbursable revenue for billable expenses. Based on industry research as well as information we have received from our clients, we believe the year-over-year increase in revenues reflects the continuing shortage of physicians, particularly in specialized disciplines which has allowed us to increase our bill rate.

The IT and Engineering segment revenues decreased $64.9 million, or 38.8 percent. The decrease in revenues was primarily due to a 34.5 percent decrease in the average number of contract professionals on assignment, as well as an 8.1 percent decrease in the average bill rate. In addition, reimbursable revenue for billable expenses decreased $3.0 million. Based on information from our clients, the year-over-year decrease in revenues is mainly a direct result of the current economic environment and the lack of capital available to clients for projects and programs.

Gross profit and gross margin

                                         Nine Months Ended September 30,
                                    2009                                  2008
                       Gross Profit       Gross Margin       Gross Profit      Gross Margin
                                                   (Unaudited)
(in thousands):
 Life Sciences        $       22,945               32.4 %   $       32,926             33.4%
 Healthcare                   21,202               28.0 %           35,121             25.4%
 Physician                    21,662               32.0 %           19,967             30.3%
 IT and Engineering           37,345               36.4 %           62,887             37.6%
Consolidated          $      103,154               32.6 %   $      150,901             32.1%

The year-over-year gross profit decrease was primarily due to the decrease in revenues in the Healthcare, IT and Engineering and Life Sciences segments, partially offset by a 49 basis point expansion in consolidated gross margin. The increase in gross margin was primarily attributable to increases in margins in the Healthcare and Physician segments and a reduction in the percentage of revenue attributable to our Nurse Travel line of business which has the lowest gross margin.

Life Sciences segment gross profit decreased $10.0 million, or 30.3 percent. The decrease in gross profit was primarily due to a 28.3 percent decrease in the segment revenues, as well as a 93 basis point contraction in gross margin predominantly due to a $2.7 million decrease in direct hire and conversion fee revenues. The contraction in gross margin was partially offset by a $0.4 million decrease in workers' compensation expense as a result of both lower claim frequency and favorable settlements.

Healthcare segment gross profit decreased $13.9 million, or 39.6 percent. The decrease in gross profit was due to a 45.2 percent decrease in the segment revenues, partially offset by a 259 basis point expansion in gross margin. The expansion in gross margin was primarily due to a 108 basis point decrease in travel related expenses and a 67 basis point decrease in workers' compensation expense as a result of efforts in closely managing historical claims, partially offset by a 5.7 percent decrease in bill/pay spread. This segment includes gross profit from the Nurse Travel and Allied Healthcare lines of business. Allied Healthcare gross profit decreased 25.8 percentage points and gross margin expanded 194 basis points while Nurse Travel gross profit decreased 48.2 percent and gross margin increased 177 basis points.

Physician segment gross profit increased $1.7 million, or 8.5 percent. The increase in gross profit was primarily attributable to a 2.5 percent increase in revenues, as well as a 177 basis point expansion in gross margin. The expansion in gross margin was primarily due to a 20.1 percent increase in the bill/pay spread, partially offset by an increase of $1.1 million in 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 $25.5 million, or 40.6 percent, primarily due to a 38.8 percent decrease in revenues and a contraction in gross margin of 114 basis points. The contraction in gross margin was primarily due to a 10.7 percent decrease in the bill/pay spread, as well as a $0.7 million decrease in direct hire and conversion fee revenues.

Selling, general and administrative expenses

For the nine months ended September 30, 2009, SG&A expenses decreased $26.1 million, or 22.2 percent, to $91.6 million from $117.7 million for the same period in 2008. The decrease in SG&A expenses was primarily due to a $17.9 million decrease in compensation and benefits as a result of decreased headcount as compared with the prior year. The decrease in SG&A expenses was also due to a $2.5 million decrease in amortization expense primarily related to a reduction of the amortization amount due to fully amortized intangible assets beginning in late 2008, as well as a $1.6 million decrease in travel related expense and a $1.2 million decrease in marketing expense. For the nine months ended September . . .