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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
———————
FORM 10-Q
———————
 Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Quarterly Period Ended September 30, 2021
Or
 Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Transition Period From _________ to _________
https://cdn.kscope.io/cb76b4b3606d094596290e1f364be7f8-ccrn-20210930_g1.jpg
———————
CROSS COUNTRY HEALTHCARE, INC.
(Exact name of registrant as specified in its charter)
———————
Delaware0-3316913-4066229
(State or other jurisdiction of
Incorporation or organization)
Commission
file number
(I.R.S. Employer
Identification Number)
6551 Park of Commerce Boulevard, N.W.
Boca Raton, Florida 33487
(Address of principal executive offices)(Zip Code)
(561) 998-2232
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
———————
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common stock, par value $0.0001 per shareCCRNThe Nasdaq Stock Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  No
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act:
Large accelerated filer Accelerated filer Non-accelerated filer 
Smaller reporting company  Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition
period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No 
The registrant had outstanding 38,003,670 shares of common stock, par value $0.0001 per share, as of October 31, 2021.



INFORMATION RELATING TO FORWARD-LOOKING STATEMENTS
 
In addition to historical information, this Quarterly Report on Form 10-Q contains statements relating to our future results (including certain projections and business trends) that are “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 (the Exchange Act), and the Private Securities Litigation Reform Act of 1995, and are subject to the “safe harbor” created by those sections. Forward-looking statements consist of statements that are predictive in nature, depend upon or refer to future events. Words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “estimates”, “suggests”, “appears”, “seeks”, “will”, “could”, and variations of such words and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results and performance to be materially different from any future results or performance expressed or implied by these forward-looking statements. These factors include, but are not limited to, the following: the potential impacts of the coronavirus pandemic (COVID-19) on our business, financial condition, and results of operations, our ability to attract and retain qualified nurses, physicians and other healthcare personnel, costs and availability of short-term housing for our travel healthcare professionals, demand for the healthcare services we provide, both nationally and in the regions in which we operate, the functioning of our information systems, the effect of cyber security risks and cyber incidents on our business, the effect of existing or future government regulation and federal and state legislative and enforcement initiatives on our business, our clients’ ability to pay us for our services, our ability to successfully implement our acquisition and development strategies, including our ability to successfully integrate acquired businesses and realize synergies from such acquisitions, the effect of liabilities and other claims asserted against us, the effect of competition in the markets we serve, our ability to successfully defend the Company, its subsidiaries, and its officers and directors on the merits of any lawsuit or determine its potential liability, if any, and other factors set forth in Item 1A. “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 (2020 Form 10-K), as filed and updated in our Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission (SEC).
 
Although we believe that these statements are based upon reasonable assumptions, we cannot guarantee future results and readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s opinions only as of the date of this filing. There can be no assurance that (i) we have correctly measured or identified all of the factors affecting our business or the extent of these factors’ likely impact, (ii) the available information with respect to these factors on which such analysis is based is complete or accurate, (iii) such analysis is correct or (iv) our strategy, which is based in part on this analysis, will be successful. Except as may be required by law, the Company undertakes no obligation to update or revise forward-looking statements.
 
All references to “the Company”, “we”, “us”, “our”, or “Cross Country” in this Quarterly Report on Form 10-Q mean Cross Country Healthcare, Inc., and its consolidated subsidiaries.



CROSS COUNTRY HEALTHCARE, INC.
 
INDEX
 
FORM 10-Q
 
September 30, 2021
 PAGE
 
 
 
 
 
Item 6.

i


PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CROSS COUNTRY HEALTHCARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, amounts in thousands)
 September 30,
2021
December 31,
2020
Assets
Current assets:  
Cash and cash equivalents$842 $1,600 
Accounts receivable, net of allowances of $5,388 in 2021 and $4,021 in 2020
301,040 170,003 
Prepaid expenses3,418 5,455 
Insurance recovery receivable4,655 4,698 
Other current assets3,318 1,355 
Total current assets313,273 183,111 
Property and equipment, net of accumulated depreciation of $18,225 in 2021 and $17,013 in 2020
14,877 12,351 
Operating lease right-of-use assets8,064 10,447 
Goodwill112,990 90,924 
Trade names, indefinite-lived5,900 5,900 
Other intangible assets, net44,145 34,831 
Other non-current assets21,171 19,409 
Total assets$520,420 $356,973 
Liabilities and Stockholders' Equity
Current liabilities:  
Accounts payable and accrued expenses$73,033 $49,877 
Accrued compensation and benefits54,875 35,540 
Current portion of debt3,426 2,425 
Operating lease liabilities - current4,362 4,509 
Current portion of earnout liability7,500  
Other current liabilities1,466 1,072 
Total current liabilities144,662 93,423 
Long-term debt, less current portion98,665 53,408 
Operating lease liabilities - non-current12,280 15,234 
Non-current deferred tax liabilities9,388 6,592 
Long-term accrued claims25,521 25,412 
Long-term contingent consideration7,500  
Other long-term liabilities5,605 7,995 
Total liabilities303,621 202,064 
Commitments and contingencies
Stockholders' equity:  
Common stock4 4 
Additional paid-in capital318,415 310,388 
Accumulated other comprehensive loss(1,312)(1,280)
Accumulated deficit(100,308)(154,737)
Total Cross Country Healthcare, Inc. stockholders' equity216,799 154,375 
Noncontrolling interest in subsidiary 534 
Total stockholders' equity216,799 154,909 
Total liabilities and stockholders' equity$520,420 $356,973 

See accompanying notes to the condensed consolidated financial statements
1


CROSS COUNTRY HEALTHCARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, amounts in thousands, except per share data)

 Three Months EndedNine Months Ended
 September 30,September 30,
 2021202020212020
Revenue from services$374,905 $193,968 $1,035,973 $620,811 
Operating expenses: 
Direct operating expenses291,111 145,965 808,124 472,471 
Selling, general and administrative expenses52,847 40,804 149,518 128,939 
Bad debt expense1,441 946 2,411 2,383 
Depreciation and amortization2,680 3,247 7,132 10,472 
Acquisition and integration-related costs61  985 77 
Restructuring costs318 2,316 2,391 5,210 
Impairment charges 1,071 2,070 16,082 
Total operating expenses348,458 194,349 972,631 635,634 
Income (loss) from operations26,447 (381)63,342 (14,823)
Other expenses (income):  
Interest expense2,182 608 4,049 2,219 
Other income, net(375)(10)(616)(46)
Income (loss) before income taxes24,640 (979)59,909 (16,996)
Income tax expense (benefit)1,207 169 5,480 (32)
Consolidated net income (loss)23,433 (1,148)54,429 (16,964)
Less: Net income attributable to noncontrolling interest in subsidiary
 186  610 
Net income (loss) attributable to common shareholders$23,433 $(1,334)$54,429 $(17,574)
Net income (loss) per share attributable to common shareholders - Basic$0.63 $(0.04)$1.49 $(0.49)
Net income (loss) per share attributable to common shareholders - Diluted$0.62 $(0.04)$1.46 $(0.49)
Weighted average common shares outstanding:  
Basic36,963 36,176 36,593 36,058 
Diluted37,582 36,176 37,276 36,058 

See accompanying notes to the condensed consolidated financial statements
2


CROSS COUNTRY HEALTHCARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited, amounts in thousands)

Three Months EndedNine Months Ended
 September 30,September 30,
 2021202020212020
Consolidated net income (loss)$23,433 $(1,148)$54,429 $(16,964)
Other comprehensive (loss) income, before income tax:  
Unrealized foreign currency translation (loss) gain(2)33 (32)(54)
Taxes on other comprehensive loss:
Income tax effect related to unrealized foreign currency translation    
Other comprehensive (loss) income, net of tax(2)33 (32)(54)
Comprehensive income (loss)23,431 (1,115)54,397 (17,018)
Less: Net income attributable to noncontrolling interest in subsidiary 186  610 
Comprehensive income (loss) attributable to common shareholders$23,431 $(1,301)$54,397 $(17,628)

See accompanying notes to the condensed consolidated financial statements
3


CROSS COUNTRY HEALTHCARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Three Months Ended September 30, 2021 and 2020
(Unaudited, amounts in thousands)
 Common StockAdditional
Paid-In Capital
Accumulated Other
Comprehensive Loss, net
(Accumulated Deficit) Retained EarningsNoncontrolling Interest in SubsidiaryStockholders’ Equity
SharesDollars
Balances at June 30, 202136,962 $4 $316,644 $(1,310)$(123,741)$534 $192,131 
Vesting of restricted stock2 —  — — —  
Equity compensation— — 1,771 — — — 1,771 
Foreign currency translation adjustment, net of taxes— — — (2)— — (2)
Dissolution of noncontrolling interest— — — — — (324)(324)
Distribution to noncontrolling shareholder— — — — — (210)(210)
Net income— — — — 23,433 — 23,433 
Balances at September 30, 202136,964 $4 $318,415 $(1,312)$(100,308)$ $216,799 
 Common StockAdditional
Paid-In Capital
Accumulated Other
Comprehensive Loss, net
(Accumulated Deficit) Retained EarningsNoncontrolling Interest in SubsidiaryStockholders’ Equity
SharesDollars
Balances at June 30, 202036,175 $4 $307,985 $(1,327)$(158,015)$427 $149,074 
Vesting of restricted stock2 —  — — —  
Equity compensation— — 1,064 — — — 1,064 
Foreign currency translation adjustment, net of taxes— — — 33 — — 33 
Distribution to noncontrolling shareholder— — — — — (103)(103)
Net (loss) income— — — — (1,334)186 (1,148)
Balances at September 30, 202036,177 $4 $309,049 $(1,294)$(159,349)$510 $148,920 
























See accompanying notes to the condensed consolidated financial statements
4






CROSS COUNTRY HEALTHCARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Nine Months Ended September 30, 2021 and 2020
(Unaudited, amounts in thousands)
 Common StockAdditional
Paid-In Capital
Accumulated Other
Comprehensive Loss, net
(Accumulated Deficit) Retained EarningsNoncontrolling Interest in SubsidiaryStockholders’ Equity
SharesDollars
Balances at December 31, 202036,177 $4 $310,388 $(1,280)$(154,737)$534 $154,909 
Vesting of restricted stock479 — (2,230)— — — (2,230)
Equity compensation— — 5,257 — — — 5,257 
Foreign currency translation adjustment, net of taxes— — — (32)— — (32)
Acquisition of WSG308 — 5,000 — — — 5,000 
Dissolution of noncontrolling interest— — — — — (324)(324)
Distribution to noncontrolling shareholder— — — — — (210)(210)
Net income— — — — 54,429 — 54,429 
Balances at September 30, 202136,964 $4 $318,415 $(1,312)$(100,308)$ $216,799 
 Common StockAdditional
Paid-In Capital
Accumulated Other
Comprehensive Loss, net
(Accumulated Deficit) Retained EarningsNoncontrolling Interest in SubsidiaryStockholders’ Equity
SharesDollars
Balances at December 31, 201935,871 $4 $305,643 $(1,240)$(141,775)$868 $163,500 
Vesting of restricted stock306 — (657)— — — (657)
Equity compensation— — 4,063 — — — 4,063 
Foreign currency translation adjustment, net of taxes— — — (54)— — (54)
Distribution to noncontrolling shareholder— — — — — (968)(968)
Net (loss) income— — — — (17,574)610 (16,964)
Balances at September 30, 202036,177 $4 $309,049 $(1,294)$(159,349)$510 $148,920 

















See accompanying notes to the condensed consolidated financial statements
5


CROSS COUNTRY HEALTHCARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, amounts in thousands)
 Nine Months Ended
 September 30,
 20212020
Cash flows from operating activities  
Consolidated net income (loss)$54,429 $(16,964)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Depreciation and amortization7,132 10,472 
Provision for allowances3,836 3,355 
Deferred income tax expense (benefit)2,797 (650)
Non-cash lease expense1,866 2,932 
Impairment charges2,070 16,082 
Equity compensation5,257 4,063 
Other non-cash costs833 460 
Changes in operating assets and liabilities:
Accounts receivable(122,887)(2,597)
Prepaid expenses and other assets(259)291 
Accounts payable and accrued expenses36,675 10,388 
Operating lease liabilities(4,592)(4,394)
Other590 1,837 
Net cash (used in) provided by operating activities(12,253)25,275 
Cash flows from investing activities  
Acquisitions, net of cash acquired(24,470) 
Purchases of property and equipment(4,890)(3,659)
Net cash used in investing activities(29,360)(3,659)
Cash flows from financing activities  
Proceeds from term loan100,000  
Principal payments on term loan(250) 
Debt issuance costs(4,573)(81)
Borrowings under revolving credit facility288,467 310,965 
Repayments on revolving credit facility(337,876)(325,900)
Cash paid for shares withheld for taxes(2,230)(658)
Principal payments on note payable(2,426)(2,426)
Cash payments to noncontrolling shareholder(210)(968)
Other(33)(115)
Net cash provided by (used in) financing activities40,869 (19,183)
Effect of exchange rate changes on cash(14)(19)
Change in cash and cash equivalents(758)2,414 
Cash and cash equivalents at beginning of period1,600 1,032 
Cash and cash equivalents at end of period$842 $3,446 

See accompanying notes to the condensed consolidated financial statements
6


CROSS COUNTRY HEALTHCARE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

1.    ORGANIZATION AND BASIS OF PRESENTATION

Nature of Business

The accompanying condensed consolidated financial statements include the accounts of Cross Country Healthcare, Inc. and its direct and indirect wholly-owned subsidiaries (collectively, the Company), as well as Cross Country Talent Acquisition Group, LLC, which was a joint venture controlled by the Company but not wholly-owned. Effective December 31, 2020, the sole professional staffing services agreement held by this joint venture was terminated and, as a result, the Company dissolved Cross Country Talent Acquisition Group, LLC in the third quarter of 2021. In the opinion of management, all adjustments necessary for a fair presentation of such unaudited condensed consolidated financial statements have been included. All such adjustments consisted of all normal recurring items, including the elimination of all intercompany transactions and balances.

The accompanying condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. These operating results are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.

These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2020 included in the Company’s Annual Report on Form 10-K as filed with the SEC on February 25, 2021 (2020 Form 10-K). The December 31, 2020 condensed consolidated balance sheet included herein was derived from the December 31, 2020 audited consolidated balance sheet included in the 2020 Form 10-K.

Certain prior year amounts have been reclassified to conform to the current year presentation. See the condensed consolidated balance sheets and statements of cash flows, Note 3 - Revenue Recognition, and Note 12 - Segment Data.

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the condensed consolidated financial statements and accompanying notes. Management has assessed various accounting estimates and other matters, including those that require consideration of forecasted financial information, in context of the unknown future impacts of the current global outbreak of COVID-19 using information that is reasonably available to the Company at the time. Significant estimates and assumptions are used for, but not limited to: (1) the valuation of accounts receivable; (2) goodwill, trade names, and other intangible assets; (3) other long-lived assets; (4) share-based compensation; (5) accruals for health, workers’ compensation, and professional liability claims; (6) valuation of deferred tax assets; (7) legal contingencies; (8) income taxes; and (9) sales and other non-income tax liabilities. Accrued insurance claims and reserves include estimated settlements from known claims and actuarial estimates for claims incurred but not reported. As additional information becomes available to the Company, its future assessment of these estimates, including management's expectations at the time regarding the duration, scope and severity of the pandemic, as well as other factors, could materially and adversely impact the Company's consolidated financial statements in future reporting periods. Actual results could differ from those estimates.

COVID-19

The Company continues to closely monitor the COVID-19 pandemic, and prioritize the mental health and well-being of its employees. While operating primarily through a remote workforce, the Company's offices remain open with stringent safety guidelines and procedures in place, including allowing only vaccinated employees on-site, social distancing, and enhanced cleaning at all of its locations. Business travel, including visits to healthcare clients, continues to be somewhat limited at the request of the Company's clients who are continuing to cope with the pandemic twenty-four hours a day/seven days a week.


7


During the third quarter of 2021, the number of new COVID-19 cases and hospitalizations from the Delta variant began to decline, but the Company still continued to see higher bill rates than pre-pandemic and demand for its services remained high with tens of thousands of openings across the nation in all healthcare specialties and across all of its segments. The investments, digital transformation, and other changes and improvements the Company has made during the pandemic have allowed it to quickly respond to the record level of demand that it is continuing to see across a wide range of specialties, including operating room, emergency room, pediatrics, labor and delivery, and medical and surgical services which are not directly related to COVID needs.

Throughout the pandemic, the Company has partnered with its clients to deliver flexible solutions aimed at solving their immediate and long-term challenges. It has continued to provide data, industry insights, marketing analytics, and consulting services to assist clients in determining the appropriate rates necessary to attract the supply they need. One of the Company's core values is to act ethically and responsibly, and it has been especially important during this pandemic to be transparent and build trust with its clients to re-enforce long-lasting relationships as both demand and bill rates have increased to unprecedented levels.

Accounts Receivable, net

The timing of revenue recognition, billings, and collections results in billed and unbilled accounts receivable from customers, which are classified as accounts receivable on the condensed consolidated balance sheets and are presented net of allowances for doubtful accounts and sales allowances. Estimated revenue for the Company employees', subcontracted employees', and independent contractors’ time worked but not yet billed at September 30, 2021 and December 31, 2020 totaled $121.9 million and $48.3 million, respectively.

The Company generally does not require collateral and mitigates its credit risk by performing credit evaluations and monitoring at-risk accounts. The allowance for doubtful accounts is established for losses expected to be incurred on accounts receivable balances. Accounts receivable are written off against the allowance for doubtful accounts when the Company determines amounts are no longer collectible. Judgment is required in the estimation of the allowance and the Company evaluates the collectability of its accounts receivable and contract assets based on a combination of factors. The Company bases its allowance for doubtful account estimates on its historical write-off experience, current conditions, an analysis of the aging of outstanding receivable and customer payment patterns, and specific reserves for customers in adverse condition adjusted for current expectations for the customers or industry. Based on the information currently available, the Company also considered current expectations of future economic conditions, including the impact of COVID-19, when estimating its allowance for doubtful accounts.

The opening balance of the allowance for doubtful accounts is reconciled to the closing balance for expected credit losses as follows:
20212020
Allowance for Doubtful Accounts(amounts in thousands)
Balance at January 1$3,416 $2,406 
Bad Debt Expense504 539 
Write-Offs, net of Recoveries(699)(349)
Balance at March 313,221 2,596 
Bad Debt Expense466 898 
Write-Offs, net of Recoveries(358)(532)
Balance at June 303,329 2,962 
Bad Debt Expense1,441 946 
Write-Offs, net of Recoveries(138)(800)
Balance at September 30$4,632 $3,108 

In addition to the allowance for doubtful accounts, the Company maintains a sales allowance for billing-related adjustments which may arise in the ordinary course of business and adjustments to the reserve are recorded as contra-revenue. The balance of this allowance as of September 30, 2021 and December 31, 2020 was $0.8 million and $0.6 million, respectively.

The Company’s contract terms typically require payment between 30 to 60 days from the date of invoice and are considered past due based on the particular negotiated contract terms. The majority of the Company's customers are U.S. based healthcare

8


systems with a significant percentage in acute-care facilities. No single customer accounted for more than 10% of the Company’s revenue for the three and nine months ended September 30, 2021, or the accounts receivable balance as of September 30, 2021 and December 31, 2020.

Restructuring Costs

The Company considers restructuring activities to be programs whereby it fundamentally changes its operations, such as closing and consolidating facilities, reducing headcount, and realigning operations in response to changing market conditions. As a result, restructuring costs on the condensed consolidated statements of operations primarily include employee termination costs and lease-related exit costs.

Reconciliation of the employee termination costs and lease-related exit costs beginning and ending liability balance is presented below:
Employee Termination CostsLease-Related Exit Costs
(amounts in thousands)
Balance at January 1, 2021$499 $2,687 
Charged to restructuring costs (a)
824 46 
Payments(344)(207)
Balance at March 31, 2021979 2,526 
Charged to restructuring costs (a)
2 458 
Payments(387)(204)
Balance at June 30, 2021594 2,780 
Charged to restructuring costs (a)
(10)47 
Payments(278)(194)
Balance at September 30, 2021$306 $2,633 
________________
(a) Aside from what is presented in the table above, restructuring costs in the condensed consolidated statements of operations for the nine months ended September 30, 2021 include $1.0 million of ongoing lease costs related to the Company's strategic reduction in its real estate footprint, which are included as operating lease liabilities - current and non-current in our condensed consolidated balance sheets. Other costs were immaterial for the nine months ended September 30, 2021.

Recently Adopted Accounting Pronouncements

Effective January 1, 2021, the Company adopted ASU No. 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740, and improves consistent application of and simplifies U.S. GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The guidance requires either a prospective, retrospective, or modified retrospective approach depending on the amendment. The Company prospectively adopted this guidance with no material impact on its consolidated financial statements.

3.    REVENUE RECOGNITION
The Company's revenues from customer contracts are generated from temporary staffing services and other services. Revenue is disaggregated by segment in the following table. Sales and usage-based taxes are excluded from revenue.

9


Three Months ended September 30, 2021
Nurse
And Allied
Staffing
Physician
Staffing
Total Segments
(amounts in thousands)
Temporary Staffing Services$347,115 $18,055 $365,170 
Other Services9,024 711 9,735 
Total$356,139 $18,766 $374,905 
Three Months ended September 30, 2020
Nurse
And Allied
Staffing
Physician
Staffing
Total Segments
(amounts in thousands)
Temporary Staffing Services$169,264 $15,753 $185,017 
Other Services8,252 699 8,951 
Total$177,516 $16,452 $193,968 
Nine Months ended September 30, 2021
Nurse
And Allied
Staffing
Physician
Staffing
Total Segments
(amounts in thousands)
Temporary Staffing Services$961,608 $48,534 $1,010,142 
Other Services23,727 2,104 25,831 
Total$985,335 $50,638 $1,035,973 
Nine Months ended September 30, 2020
Nurse
And Allied
Staffing
Physician
Staffing
Total Segments
(amounts in thousands)
Temporary Staffing Services$547,543 $48,994 $596,537 
Other Services21,763 2,511 24,274 
Total$569,306 $51,505 $620,811 
________________
In the first quarter of 2021, the Company modified its reportable segments and, as a result, now discloses the following two reportable segments - Nurse and Allied Staffing and Physician Staffing. Other Services in the amount of $2.3 million and $7.7 million, respectively, included in the previously-reported Search segment have been reclassified to Nurse and Allied Staffing for the three and nine months ended September 30, 2020. See Note 12 - Segment Data.

4.    ACQUISITION

Cross Country Workforce Solutions Group

On June 8, 2021, the Company purchased and acquired substantially all of the assets and assumed certain liabilities of Workforce Solutions Group, Inc. for a purchase price of $25.0 million in cash (parties have agreed to a net working capital reduction of $1.1 million), and $5.0 million in shares (or 307,730 shares) of the Company's common stock. The transaction was treated as a purchase of assets for income tax purposes.

The sellers are also eligible to receive an earnout based on the business' performance through three years after the acquisition date that could provide up to an additional $15.0 million in cash. The current portion of the liability of $7.5 million is included

10


in current portion of earnout liability and the non-current portion of $7.5 million is included in long-term contingent consideration on the condensed consolidated balance sheets. See Note 10 - Fair Value Measurements.

The business has been branded Cross Country Workforce Solutions Group (WSG) and primarily works with local and national healthcare systems and managed care providers to coordinate in-home care services for participants. WSG also provides a range of consulting and talent management solutions to its healthcare clients, including home care staffing, recruitment process outsourcing, contingent workforce evaluation, and talent acquisition.

The following table is an estimate of the assets acquired and liabilities assumed on June 8, 2021:

(amounts in thousands)
Cash and cash equivalents$957 
Accounts receivable11,991 
Other current assets59 
Property and equipment10 
Goodwill22,066 
Other intangible assets14,200 
Total assets acquired49,283 
Accounts payable and accrued expenses3,562 
Accrued compensation and benefits1,387 
Long-term contingent consideration15,000 
Total liabilities assumed19,949 
Net assets acquired$29,334 

The Company assigned a value to other identifiable intangible assets of $14.2 million in customer relationships with a weighted average estimated useful life of 11.5 years. Substantially all of the accounts receivable acquired are expected to be collectible.

The remaining excess purchase price over the fair value of net assets acquired of $22.1 million was recorded as goodwill on the Company's condensed consolidated balance sheet. Associated acquisition-related costs incurred were $1.0 million and have been included in acquisition and integration-related costs on the Company's condensed consolidated statement of operations for the nine months ended September 30, 2021. See Note 7 - Goodwill, Trade Names, and Other Intangible Assets.

The acquisition was not significant and has been accounted for in accordance with the Business Combinations Topic of the Financial Accounting Standards Board (FASB) Accounting Standard Codification (ASC), using the acquisition method of accounting. WSG's results of operations, since the date of acquisition, are included in the Nurse and Allied Staffing business segment, and are not material. The pro-forma impact on the Company's consolidated revenue from services and net income, including the pro forma effect of events that are directly attributable to the acquisition, was not significant.

5.    COMPREHENSIVE INCOME (LOSS)
 
Total comprehensive income (loss) includes net income or loss and foreign currency translation adjustments, net of any related deferred taxes. Certain of the Company’s foreign subsidiaries use their respective local currency as their functional currency. In accordance with the Foreign Currency Matters Topic of the FASB ASC, assets and liabilities of these operations are translated at the exchange rates in effect on the balance sheet date. Income statement items are translated at the average exchange rates for the period. The cumulative impact of currency fluctuations related to the balance sheet translation is included in accumulated other comprehensive loss in the accompanying condensed consolidated balance sheets and was an unrealized loss of $1.3 million at September 30, 2021 and December 31, 2020.
 
There was no income tax impact related to components of other comprehensive income (loss) for the three and nine months ended September 30, 2021 and 2020.


11


6.    EARNINGS PER SHARE

The following table sets forth the components of the numerator and denominator for the computation of the basic and diluted earnings per share:
Three Months EndedNine Months Ended
September 30,September 30,
2021202020212020
(amounts in thousands, except per share data)
Numerator:
Net income (loss) attributable to common shareholders - Basic and Diluted$23,433 $(1,334)$54,429 $(17,574)
Denominator:
Weighted average common shares - Basic36,963 36,176 36,593 36,058 
Effect of diluted shares:
     Share-based awards (a)
619  683  
Weighted average common shares - Diluted37,582 36,176 37,276 36,058 
Net income (loss) per share attributable to common shareholders - Basic$0.63 $(0.04)$1.49 $(0.49)
Net income (loss) per share attributable to common shareholders - Diluted$0.62 $(0.04)$1.46 $(0.49)
________________
(a) Due to the net loss for the three and nine months ended September 30, 2020, 227,821 and 252,810 shares, respectively, were excluded from diluted weighted average shares due to their anti-dilutive effect.


12


7.    GOODWILL, TRADE NAMES, AND OTHER INTANGIBLE ASSETS

The Company had the following acquired intangible assets:
 September 30, 2021December 31, 2020
 Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
(amounts in thousands)
Intangible assets subject to amortization:
Databases$30,530 $17,612 $12,918 $30,530 $15,322 $15,208 
Customer relationships47,738 16,558 31,180 33,538 14,007 19,531 
Non-compete agreements304 257 47 304 212 92 
Other intangible assets, net$78,572 $34,427 $44,145 $64,372 $29,541 $34,831 
Intangible assets not subject to amortization:
Trade names, indefinite-lived  $5,900   $5,900 

As of September 30, 2021, estimated annual amortization expense is as follows:

Years Ending December 31:(amounts in thousands)
2021$1,801 
20227,175 
20237,117 
20246,479 
20255,921 
Thereafter15,652 
 $44,145 

























13


The changes in the carrying amount of goodwill by reportable segment are as follows:
 Nurse and
Allied Staffing
Physician
Staffing
Total
(amounts in thousands)
Balances as of December 31, 2020
Aggregate goodwill acquired$367,880 $43,405 $411,285 
Sale of business(9,889) (9,889)
Accumulated impairment loss(269,874)(40,598)(310,472)
Goodwill, net of impairment loss88,117 2,807 90,924 
Changes to aggregate goodwill in 2021
Aggregate goodwill acquired (a)
22,066  22,066 
Balances as of September 30, 2021
Aggregate goodwill acquired389,946 43,405 433,351 
Sale of business(9,889) (9,889)
Accumulated impairment loss(269,874)(40,598)(310,472)
Goodwill, net of impairment loss$110,183 $2,807 $112,990 
________________

(a) Represents goodwill acquired from the acquisition of WSG, calculated as the excess of the fair value of consideration exchanged as compared to the fair value of identifiable net assets acquired. See Note 4 - Acquisition. During the measurement period, which is not to exceed one year from the acquisition date, the Company may record adjustments to the assets acquired or liabilities assumed, with a corresponding offset to goodwill. Upon conclusion of the measurement period, any subsequent adjustments would be recorded to earnings.

In conjunction with the changes to its segments, the Company now discloses the following two reportable segments - Nurse and Allied Staffing and Physician Staffing. In the table above, goodwill balances and activity previously reported in the Search segment have been reclassified to Nurse and Allied Staffing.

Goodwill, Trade Names, and Other Intangible Assets Impairment

The Company tests reporting units’ goodwill and intangible assets with indefinite lives for impairment annually during the fourth quarter and more frequently if impairment indicators exist. The Company performs quarterly qualitative assessments of significant events and circumstances such as reporting units’ historical and current results, assumptions regarding future performance, strategic initiatives and overall economic factors, including COVID-19, and macro-economic developments, to determine the existence of potential indicators of impairment and assess if it is more likely than not that the fair value of reporting units or intangible assets is less than their carrying value. If indicators of impairments are identified a quantitative impairment test is performed.

As of September 30, 2021, the Company performed a qualitative assessment of each of its reporting units and determined it was not more likely than not that the fair value of its reporting units dropped below their carrying value.

During the second quarter of 2020, due to the increased negative impact and continuing uncertainty of the COVID-19 pandemic on the business, all reporting units were quantitatively tested. For the Nurse and Allied Staffing and Physician Staffing reporting units no impairment was identified as the fair value was substantially in excess of the carrying amount of goodwill. However, the previously-reported Search reporting unit under-performed in the second quarter of 2020. As a result, the Company performed quantitative testing of the Search reporting unit which resulted in impairment charges of $10.2 million for its goodwill and $0.3 million for its customer relationships.

Although management believes that the Company's current estimates and assumptions utilized in its quantitative testing are reasonable and supportable, including its assumptions on the impact and timing related to COVID-19, there can be no assurance that the estimates and assumptions management used for purposes of its qualitative assessment as of September 30, 2021 will prove to be accurate predictions of future performance.


14


For its long-lived assets and definite-lived intangible assets, the Company reviews for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. During the nine months ended September 30, 2021, the Company wrote off a discontinued software development project, resulting in an immaterial impairment charge.

Intangible Asset Amortization

In connection with its rebranding efforts, the Company made a decision at the end of 2019 to phase out a trade name by the end of 2020, which as of December 31, 2019 would have been recognized over a weighted average life of 7.5 years. In the second quarter of 2020, the Company further accelerated its rebranding plan and shortened the estimated remaining life of the trade name. Total accelerated amortization resulting from the changes in the estimated remaining life of the trade name were $0.9 million, or $0.03 per share, and $3.1 million, or $0.09 per share, for the three and nine months ended September 30, 2020, respectively.

8.    DEBT

The Company's long-term debt consists of the following:
September 30, 2021December 31, 2020
PrincipalDebt Issuance CostsPrincipalDebt Issuance Costs
(amounts in thousands)
Term Loan, interest of 6.50% at September 30, 2021
$99,750 $(4,085)$ $ 
Senior Secured Asset-Based Loan, interest of