BOCA RATON, Fla.–(BUSINESS WIRE)–Cross Country Healthcare, Inc. (the “Company”) (Nasdaq: CCRN) today announced financial results for its second quarter ended June 30, 2020.

SELECTED FINANCIAL INFORMATION:
					Variance				Variance
					Q2 2020 vs				Q2 2020 vs
Dollars are in thousands, except per share amounts	Q2 2020				Q2 2019				Q1 2020
Revenue	$	216,779			7			%	3			%
Gross profit margin*	23.4			%	(200		)	bps	(20		)	bps
Net loss attributable to common shareholders	$	(14,151	)		73			%	(577		)	%
Diluted EPS	$	(0.39	)		$	1.05			$	(0.33	)
Adjusted EBITDA*	$	11,612			84			%	152			%
Adjusted EPS*	$	0.16			$	0.15			$	0.17
Cash flows provided by operations	$	16,569			34			%	(3		)	%

* Refer to accompanying tables and discussion of Non-GAAP financial measures below.

“Our second quarter results reflect Cross Country’s position as a leader in the market, as well as strong execution in filling an unprecedented level of demand from clients responding to COVID-19,” said Kevin C. Clark, Co-Founder and Chief Executive Officer. He continued, “We are continuing to adapt to rapid changes in demand across our industry, and we are committed to achieving our long-term goal for growth and improved profitability.”

Second quarter consolidated revenue was $216.8 million, an increase of 7% year-over-year and 3% sequentially. Consolidated gross profit margin was 23.4%, down 200 basis points year-over-year and down 20 basis points sequentially. Net loss attributable to common shareholders was $14.2 million compared to $51.7 million in the prior year and $2.1 million in the prior quarter. Diluted EPS was a loss of $0.39 per share compared to losses of $1.44 per share in the prior year and $0.06 per share in the prior quarter. Adjusted EBITDA was $11.6 million or 5.4% of revenue, as compared with $6.3 million or 3.1% of revenue in the prior year, and $4.6 million or 2.2% of revenue in the prior quarter. Adjusted EPS was $0.16 compared to $0.01 in the prior year and a loss of $0.01 in the prior quarter.

The three and six months ended June 30, 2020 included non-cash impairment charges of $15.0 million, which was comprised of $10.5 million related to goodwill and customer relationships for the Search business and $4.5 million related to right-of-use assets and related property and equipment in connection with leases that were vacated during the quarter.

For the six months ended June 30, 2020, consolidated revenue was $426.8 million, an increase of 7% year-over-year. Consolidated gross profit margin was 23.5%, down 160 basis points year-over-year. Net loss attributable to common shareholders was $16.2 million, or $0.45 per diluted share, compared to a loss of $53.4 million, or $1.49 per diluted share, in the prior year. Adjusted EBITDA was $16.2 million or 3.8% of revenue, as compared with $9.9 million or 2.5% of revenue in the prior year. Adjusted EPS was $0.15 compared to $0.03 in the prior year.

Quarterly Business Segment Highlights

Nurse and Allied Staffing

Revenue from Nurse and Allied Staffing was $198.1 million, an increase of 10% year-over-year and 5% sequentially. Contribution income was $20.6 million, an increase compared to $16.1 million in the prior year and $14.2 million in the prior quarter. Average field FTEs were 5,801 as compared with 7,016 in the prior year and 7,145 in the prior quarter. Revenue per FTE per day was $375 compared to $283 in the prior year and $290 in the prior quarter.

Physician Staffing

Revenue from Physician Staffing was $16.9 million, a decrease of 6% year-over-year and 7% sequentially. Contribution income was $1.2 million, an increase compared to $0.5 in the prior year and $0.6 million in the prior quarter. Total days filled were 9,195 as compared with 10,754 in the prior year and 10,199 in the prior quarter. Revenue per day filled was $1,835 as compared with $1,676 in the prior year and $1,783 in the prior quarter.

Search

Revenue from Search was $1.8 million, a decrease of 54% year-over-year and 50% sequentially. Contribution loss was $1.1 million, compared to losses of $0.2 million in the prior year and $0.3 million in the prior quarter.

Cash Flow and Balance Sheet Highlights

Cash flow generated from operations for the quarter was $16.6 million compared to $12.4 million generated in the prior year and $17.2 million generated in the prior quarter, driven by strong cash collections. For the six months ended June 30, 2020, cash flow from operations was $33.7 million, compared to $25.1 in the prior year.

On June 30, 2020, the Company amended its ABL Loan Agreement (ABL), which increased the current aggregate committed size of the ABL from $120.0 million to $130.0 million. As of June 30, 2020, the Company had $6.2 million in cash and cash equivalents, $49.1 million of borrowings drawn under its ABL, and $19.6 million of letters of credit outstanding. Availability under the ABL is subject to a borrowing base, which was $130.0 million as of June 30, 2020.

Outlook for Third Quarter 2020

The guidance below applies to management’s expectations for the third quarter of 2020.

	Q3 2020 Range		Year-over-Year		Sequential
			Change		Change
Revenue	$170 million – $180 million		(19)% – (14)%		(22)% – (17)%
Gross Profit Margin	23.8% – 24.3%		(60) bps – (10) bps		40 bps – 90 bps
Adjusted EBITDA	$4.0 million – $6.0 million		(45)% – (17)%		(66)% – (48)%
Adjusted EPS	$(0.06) – $(0.02)		$(0.11) – $(0.07)		$(0.22) – $(0.18)

The Company continues to assess the impacts from COVID-19 on its operations, which were significant in the second quarter, and are expected to continue into the third quarter. As a result of the volatility and uncertainty from the pandemic, the Company has decided to widen the guidance ranges for the third quarter. Though the Company does not provide full year guidance, management expects to see sequential improvement in Revenue and Adjusted EBITDA for the fourth quarter, given the most recent trend in demand.

The above estimates are based on current management expectations and, as such, are forward-looking and actual results may differ materially. The above ranges do not include the potential impact of any future divestitures, mergers, acquisitions or other business combinations, changes in debt structure, or future share repurchases. The guidance also reflects the impacts from certain cost actions the Company has identified, and actual results may differ depending on timing and further actions it may take. See accompanying Non-GAAP financial measures and tables below.

INVITATION TO CONFERENCE CALL

The Company will hold its quarterly conference call on Wednesday, August 5, 2020, at 5:00 P.M. Eastern Time to discuss its second quarter 2020 financial results. This call will be webcast live and can be accessed at the Company’s website at www.crosscountryhealthcare.com or by dialing 888-566-1099 from anywhere in the U.S. or by dialing 773-799-3716 from non-U.S. locations – Passcode: Cross Country. A replay of the webcast will be available from August 5th through August 20th at the Company’s website and a replay of the conference call will be available by telephone by calling 866-486-4654 from anywhere in the U.S. or 203-369-1642 from non-U.S. locations – Passcode: 2020.

ABOUT CROSS COUNTRY HEALTHCARE

Cross Country Healthcare, Inc. (CCH) is a leader in providing total talent management including strategic workforce solutions, contingent staffing, permanent placement and other consultative services for healthcare clients. Leveraging nearly 35 years of expertise and insight, CCH solves complex labor-related challenges for clients while providing high-quality outcomes and exceptional patient care. As a multi-year Best of Staffing® Award winner, CCH is committed to excellence in delivery of its services and was the first public company to earn The Joint Commission Gold Seal of Approval® for Health Care Staffing Services Certification with Distinction.

Copies of this and other news releases as well as additional information about Cross Country Healthcare can be obtained online at www.crosscountryhealthcare.com. Shareholders and prospective investors can also register to automatically receive the Company’s press releases, SEC filings and other notices by e-mail.

NON-GAAP FINANCIAL MEASURES

This press release and accompanying financial statement tables reference non-GAAP financial measures. Such non-GAAP financial measures are provided as additional information and should not be considered substitutes for, or superior to, financial measures calculated in accordance with U.S. GAAP. Such non-GAAP financial measures are provided for consistency and comparability to prior year results; furthermore, management believes they are useful to investors when evaluating the Company’s performance as they exclude certain items that management believes are not indicative of the Company’s future operating performance. Pro forma measures, if applicable, are adjusted to include the results of our acquisitions, and exclude the results of divestments, as if the transactions occurred in the beginning of the periods mentioned.]Such non-GAAP financial measures may differ materially from the non-GAAP financial measures used by other companies. The financial statement tables that accompany this press release include a reconciliation of each non-GAAP financial measure to the most directly comparable U.S. GAAP financial measure and a more detailed discussion of each financial measure; as such, the financial statement tables should be read in conjunction with the presentation of these non-GAAP financial measures.

FORWARD LOOKING STATEMENT

In addition to historical information, this press release 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 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”, and “could”, and variations of such words and similar expressions are intended to identify forward-looking statements. Forward-looking 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 COVID-19 pandemic 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, 2019, and our other Securities and Exchange Commission filings. You should consult any further disclosures the Company makes on related subjects in its filings with the Securities and Exchange Commission.

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 press release. 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. The Company undertakes no obligation to update or revise forward-looking statements. All references to “we”, “us”, “our”, or “Cross Country” in this press release mean Cross Country Healthcare, Inc. and its subsidiaries.

Cross Country Healthcare, Inc.
Consolidated Statements of Operations
(Unaudited, amounts in thousands, except per share data)
	Three Months Ended												Six Months Ended
	June 30,				June 30,				March 31,				June 30,				June 30,
	2020				2019				2020				2020				2019
Revenue from services	$	216,779			$	202,757			$	210,064			$	426,843			$	397,928
Operating expenses:
Direct operating expenses	166,045				151,169				160,461				326,506				298,086
Selling, general and administrative expenses	42,254				45,944				45,881				88,135				91,980
Bad debt expense	898				645				539				1,437				915
Depreciation and amortization	3,929				3,557				3,296				7,225				6,541
Acquisition and integration-related costs	—				299				77				77				811
Restructuring costs	2,330				137				564				2,894				1,277
Legal settlement charges	—				1,600				—				—				1,600
Impairment charges	15,011				14,502				—				15,011				14,502
Total operating expenses	230,467				217,853				210,818				441,285				415,712
Loss from operations	(13,688		)		(15,096		)		(754		)		(14,442		)		(17,784		)
Other expenses (income):
Interest expense	744				1,438				867				1,611				2,860
Loss on early extinguishment of debt	—				54				—				—				414
Other income, net	(5		)		(76		)		(31		)		(36		)		(158		)
Loss before income taxes	(14,427		)		(16,512		)		(1,590		)		(16,017		)		(20,900		)
Income tax (benefit) expense	(379		)		34,758				178				(201		)		31,746
Consolidated net loss	(14,048		)		(51,270		)		(1,768		)		(15,816		)		(52,646		)
Less: Net income attributable to noncontrolling interest in subsidiary	103				404				321				424				795
Net loss attributable to common shareholders	$	(14,151	)		$	(51,674	)		$	(2,089	)		$	(16,240	)		$	(53,441	)
Net loss per share attributable to common shareholders – Basic and Diluted	$	(0.39	)		$	(1.44	)		$	(0.06	)		$	(0.45	)		$	(1.49	)
Weighted average common shares outstanding:
Basic and Diluted	36,123				35,824				35,873				35,998				35,763

Cross Country Healthcare, Inc.
Reconciliation of Non-GAAP Financial Measures
(Unaudited, amounts in thousands, except per share data)
	Three Months Ended												Six Months Ended
	June 30,				June 30,				March 31,				June 30,				June 30,
	2020				2019				2020				2020				2019
Adjusted EBITDA: (a)
Net loss attributable to common shareholders	$	(14,151	)		$	(51,674	)		$	(2,089	)		$	(16,240	)		$	(53,441	)
Interest expense	744				1,438				867				1,611				2,860
Income tax (benefit) expense	(379		)		34,758				178				(201		)		31,746
Depreciation and amortization	3,929				3,557				3,296				7,225				6,541
Acquisition and integration-related costs (b)	—				299				77				77				811
Restructuring costs (c)	2,330				137				564				2,894				1,277
Legal settlements and fees (d)	1,561				1,600				—				1,561				1,600
Impairment charges (e)	15,011				14,502				—				15,011				14,502
Loss on early extinguishment of debt (f)	—				54				—				—				414
Other income, net	(5		)		(76		)		(31		)		(36		)		(158		)
Equity compensation	2,072				1,004				927				2,999				1,535
Applicant tracking system costs (g)	397				315				502				899				1,449
Net income attributable to noncontrolling interest in subsidiary	103				404				321				424				795
Adjusted EBITDA (a)	$	11,612			$	6,318			$	4,612			$	16,224			$	9,931
Adjusted EPS: (h)
Numerator:
Net loss attributable to common shareholders	$	(14,151	)		$	(51,674	)		$	(2,089	)		$	(16,240	)		$	(53,441	)
Non-GAAP adjustments – pretax:
Acquisition and integration-related costs (b)	—				299				77				77				811
Restructuring costs (c)	2,330				137				564				2,894				1,277
Legal settlements and fees (d)	1,561				1,600				—				1,561				1,600
Impairment charges (excluding rebranding impacts) (e)	15,011				—				—				15,011				—
Rebranding impairments and accelerated amortization (e)	1,406				15,106				731				2,137				15,106
Loss on early extinguishment of debt (f)	—				54				—				—				414
Applicant tracking system costs (g)	397				315				502				899				1,449
Nonrecurring income tax adjustments	313				35,675				—				313				35,675
Tax impact of non-GAAP adjustments	(958		)		(1,151		)		(12		)		(970		)		(1,985		)
Adjusted net income (loss) attributable to common shareholders – non-GAAP	$	5,909			$	361			$	(227	)		$	5,682			$	906
Denominator:
Weighted average common shares – basic, GAAP	36,123				35,824				35,873				35,998				35,763
Dilutive impact of share-based payments (i)	76				117				455				265				107
Adjusted weighted average common shares – diluted, non-GAAP	36,199				35,941				36,328				36,263				35,870
Reconciliation:
Diluted EPS, GAAP	$	(0.39	)		$	(1.44	)		$	(0.06	)		$	(0.45	)		$	(1.49	)
Non-GAAP adjustments – pretax:
Acquisition and integration-related costs (b)	—				0.01				—				—				0.03
Restructuring costs (c)	0.06				—				0.02				0.08				0.03
Legal settlements and fees (d)	0.04				0.05				—				0.04				0.05
Impairment charges (excluding rebranding impacts) (e)	0.42				—				—				0.42				—
Rebranding impairments and accelerated amortization (e)	0.04				0.42				0.02				0.06				0.42
Loss on early extinguishment of debt (f)	—				—				—				—				0.01
Applicant tracking system costs (g)	0.01				0.01				0.01				0.02				0.04
Nonrecurring income tax adjustments	0.01				0.99				—				0.01				0.99
Tax impact of non-GAAP adjustments	(0.03		)		(0.03		)		—				(0.03		)		(0.05		)
Adjusted EPS, non-GAAP (h)	$	0.16			$	0.01			$	(0.01	)		$	0.15			$	0.03

Cross Country Healthcare, Inc.
Consolidated Balance Sheets
(Unaudited, amounts in thousands)
	June 30,				December 31,
	2020				2019
Assets
Current assets:
Cash and cash equivalents	$	6,234			$	1,032
Accounts receivable, net	156,104				169,528
Prepaid expenses	5,275				6,097
Insurance recovery receivable	4,954				5,011
Other current assets	1,985				1,689
Total current assets	174,552				183,357
Property and equipment, net	11,960				11,832
Operating lease right-of-use assets	11,553				16,964
Goodwill	90,924				101,066
Trade names, indefinite-lived	5,900				5,900
Other intangible assets, net	39,001				44,957
Other non-current assets	18,311				18,298
Total assets	$	352,201			$	382,374
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	54,183			$	45,726
Accrued employee compensation and benefits	36,274				31,307
Operating lease liabilities – current	4,883				4,878
Other current liabilities	3,441				3,554
Total current liabilities	98,781				85,465
Revolving credit facility	49,101				70,974
Operating lease liabilities – non-current	16,757				19,070
Non-current deferred tax liabilities	6,860				7,523
Long-term accrued claims	25,042				26,938
Contingent consideration	—				4,867
Other long-term liabilities	6,586				4,037
Total liabilities	203,127				218,874
Commitments and contingencies
Stockholders’ equity:
Common stock	4				4
Additional paid-in capital	307,985				305,643
Accumulated other comprehensive loss	(1,327		)		(1,240		)
Accumulated deficit	(158,015		)		(141,775		)
Total Cross Country Healthcare, Inc. stockholders’ equity	148,647				162,632
Noncontrolling interest in subsidiary	427				868
Total stockholders’ equity	149,074				163,500
Total liabilities and stockholders’ equity	$	352,201			$	382,374

Cross Country Healthcare, Inc.
Segment Data (j)
(Unaudited, amounts in thousands)
	Three Months Ended																		Year-over-Year			Sequential
	June 30,			% of			June 30,			% of			March 31,			% of			% change			% change
	2020			Total			2019			Total			2020			Total			Fav (Unfav)			Fav (Unfav)
Revenue from services:
Nurse and Allied Staffing	$	198,098		91	%		$	180,787		89	%		$	188,233		89	%		10	%		5	%
Physician Staffing	16,872			8	%		18,028			9	%		18,181			9	%		(6	)%		(7	)%
Search	1,809			1	%		3,942			2	%		3,650			2	%		(54	)%		(50	)%
	$	216,779		100	%		$	202,757		100	%		$	210,064		100	%		7	%		3	%
Contribution income (loss): (k)
Nurse and Allied Staffing	$	20,638					$	16,111					$	14,157					28	%		46	%
Physician Staffing	1,219						508						631						140	%		93	%
Search	(1,051		)				(181		)				(335		)				(481	)%		(214	)%
	20,806						16,438						14,453						27	%		44	%
Corporate overhead (l)	13,224						11,439						11,270						(16	)%		(17	)%
Depreciation and amortization	3,929						3,557						3,296						(10	)%		(19	)%
Acquisition and integration-related costs (b)	—						299						77						100	%		100	%
Restructuring costs (c)	2,330						137						564						NM			(313	)%
Legal settlement charges (d)	—						1,600						—						100	%		—	%
Impairment charges (e)	15,011						14,502						—						(4	)%		(100	)%
Loss from operations	$	(13,688	)				$	(15,096	)				$	(754	)				9	%		NM
	Six Months Ended																		Year-over-Year
	June 30,			% of			June 30,			% of									% change
	2020			Total			2019			Total									Fav (Unfav)
Revenue from services:
Nurse and Allied Staffing	$	386,331		91	%		$	356,424		89	%								8	%
Physician Staffing	35,053			8	%		34,187			9	%								3	%
Search	5,459			1	%		7,317			2	%								(25	)%
	$	426,843		100	%		$	397,928		100	%								7	%
Contribution income (loss): (k)
Nurse and Allied Staffing	$	34,795					$	30,407											14	%
Physician Staffing	1,850						913												103	%
Search	(1,386		)				(604		)										(129	)%
	35,259						30,716												15	%
Corporate overhead (l)	24,494						23,769												(3	)%
Depreciation and amortization	7,225						6,541												(10	)%
Acquisition and integration-related costs (b)	77						811												91	%
Restructuring costs (c)	2,894						1,277												(127	)%
Legal settlement charges (d)	—						1,600												100	%
Impairment charges (e)	15,011						14,502												(4	)%
Loss from operations	$	(14,442	)				$	(17,784	)										19	%
NM-Not meaningful.

Cross Country Healthcare, Inc.
Summary Condensed Consolidated Statements of Cash Flows
(Unaudited, amounts in thousands)
	Three Months Ended												Six Months Ended
	June 30,				June 30,				March 31,				June 30,				June 30,
	2020				2019				2020				2020				2019
Net cash provided by operating activities	$	16,569			$	12,355			$	17,162			$	33,731			$	25,142
Cash used in investing activities	(1,528		)		(429		)		(962		)		(2,490		)		(1,674		)
Net cash used in financing activities	(21,402		)		(5,383		)		(4,599		)		(26,001		)		(14,678		)
Effect of exchange rate changes on cash	(4		)		1				(34		)		(38		)		21
Change in cash and cash equivalents	(6,365		)		6,544				11,567				5,202				8,811
Cash and cash equivalents at beginning of period	12,599				18,286				1,032				1,032				16,019
Cash and cash equivalents at end of period	$	6,234			$	24,830			$	12,599			$	6,234			$	24,830

Cross Country Healthcare, Inc.
Other Financial Data
(Unaudited)
	Three Months Ended												Six Months Ended
	June 30,				June 30,				March 31,				June 30,				June 30,
	2020				2019				2020				2020				2019
Consolidated gross profit margin (m)	23.4		%		25.4		%		23.6		%		23.5		%		25.1		%
Nurse and Allied Staffing statistical data:
FTEs (n)	5,801				7,016				7,145				6,473				7,016
Average Nurse and Allied Staffing revenue per FTE per day (o)	$	375			$	283			$	290			$	328			$	281
Physician Staffing statistical data:
Days filled (p)	9,195				10,754				10,199				19,394				21,034
Revenue per day filled (q)	$	1,835			$	1,676			$	1,783			$	1,807			$	1,625

(a)	Adjusted EBITDA, a non-GAAP (Generally Accepted Accounting Principles) financial measure, is defined as net (loss) income attributable to common shareholders before interest expense, income tax expense (benefit), depreciation and amortization, acquisition and integration-related costs, restructuring costs, legal settlements and fees, impairment charges, gain or loss on derivative, loss on early extinguishment of debt, gain or loss on sale of business, other expense (income), net, equity compensation, applicant tracking system costs, and includes net income attributable to noncontrolling interest in subsidiary. Adjusted EBITDA should not be considered a measure of financial performance under GAAP. Management presents Adjusted EBITDA because it believes that Adjusted EBITDA is a useful supplement to net income attributable to common shareholders as an indicator of operating performance. Management uses Adjusted EBITDA for planning purposes and as one performance measure in its incentive programs for certain members of its management team. Adjusted EBITDA, as defined, closely matches the operating measure typically used in the Company’s credit facilities in calculating various ratios. Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by the Company’s consolidated revenue.
(b)	Acquisition and integration-related costs include costs for prior acquisitions, costs incurred for potential transactions, and accretion and valuation adjustments related to the contingent consideration liability for the Mediscan acquisition.
(c)	Restructuring costs are primarily comprised of employee termination costs, lease-related exit costs, and reorganization costs as part of planned cost savings initiatives.
(d)	Legal settlements and fees include legal settlement charges as presented on the consolidated statements of operations as well as legal fees pertaining to non-operational legal matters which are included in selling, general and administrative expenses. For the three months ended June 30, 2019, we incurred legal settlement charges pertaining to the resolution of a medical malpractice lawsuit in excess of carrier limits as well as a California wage and hour class action settlement. For the six months ended June 30, 2020, we incurred $1.6 million in legal fees related to an ongoing legal matter outside the normal course of operations, the majority of which were incurred during the second quarter.
(e)	The three and six months ended June 30, 2020 included non-cash impairment charges of $15.0 million, which was comprised of $10.5 million related to goodwill and other intangible assets for the Search business and $4.5 million related to right-of-use assets and related property and equipment in connection with leases that were vacated during the quarter. Impairment charges in 2019 related to trade name impairment of $14.5 million related to Nurse and Allied Staffing resulting from the Company’s rebranding initiative. Rebranding impairments and accelerated amortization related to finite-lived trade names in connection with the rebranding initiatives.
(f)	Loss on early extinguishment of debt relates to the write-off of debt issuance costs as a result of an optional reduction in borrowing capacity in the revolving credit facility exercised in the first quarter of 2019, and optional prepayments on the Company’s term loan of $7.5 million and $5.0 million made in the first and second quarters of 2019, respectively.
(g)	Applicant tracking system costs are related to the Company’s project to replace its legacy system supporting its travel nurse staffing business. These costs are reported in selling, general and administrative expenses on the consolidated statement of operations and included in corporate overhead in segment data.
(h)	Adjusted EPS, a non-GAAP financial measure, is defined as net (loss) income attributable to common shareholders per diluted share before the diluted EPS impact of acquisition and integration-related costs, restructuring costs, legal settlements and fees, impairment charges, rebranding impairments and accelerated amortization, gain or loss on derivative, loss on early extinguishment of debt, gain or loss on sale of business, applicant tracking system costs, and nonrecurring income tax adjustments. Adjusted EPS should not be considered a measure of financial performance under GAAP. Management presents Adjusted EPS because it believes that Adjusted EPS is a useful supplement to its reported EPS as an indicator of operating performance. Management believes it provides a more useful comparison of the Company’s underlying business performance from period to period and is more representative of the future earnings capacity of the Company.
(i)	Due to the net loss for the three months ended June 30, 2020, June 30, 2019, and March 31, 2020, and for the six months ended June 30, 2020 and 2019, 76, 117, 455, 265, and 107 shares (in thousands) were excluded from diluted weighted average shares.
(j)	Segment data provided is in accordance with the Segment Reporting Topic of the FASB ASC.
(k)	Contribution income is defined as income or loss from operations before depreciation and amortization, acquisition and integration-related costs, restructuring costs, legal settlement charges, impairment charges, and corporate overhead. Contribution income is a financial measure used by management when assessing segment performance.
(l)	Corporate overhead includes unallocated executive leadership and other centralized corporate functional support costs such as finance, IT, legal, human resources, and marketing, as well as public company expenses and corporate-wide projects (initiatives).
(m)	Gross profit is defined as revenue from services less direct operating expenses. The Company’s gross profit excludes allocated depreciation and amortization expense. Gross profit margin is calculated by dividing gross profit by revenue from services.
(n)	FTEs represent the average number of Nurse and Allied Staffing contract personnel on a full-time equivalent basis.
(o)	Average revenue per FTE per day is calculated by dividing the Nurse and Allied Staffing revenue per FTE by the number of days worked in the respective periods. Nurse and Allied Staffing revenue also includes revenue from the permanent placement of nurses.
(p)	Days filled is calculated by dividing the total hours invoiced during the period, including an estimate for the impact of accrued revenue, by 8 hours.
(q)	Revenue per day filled is calculated by dividing revenue as reported by days filled for the period presented.