The healthcare staffing industry provides temporary staffing and permanent placement of professionals in healthcare and healthcare-related positions. Temporary staffing refers to the placement of healthcare professionals on a contracted, fixed-term basis. The four components of the temporary healthcare staffing industry are locum tenens, allied health, travel nurse and local temporary, or per diem, nurse.

SIA estimates that the United States temporary healthcare staffing industry generated $10.0 billion in revenue in 2005 and is expected to grow at an annual rate of 5% for the year ended December 31, 2006 and 6% for the year ended December 31, 2007. It is believed that several fundamental growth drivers will continue to influence the healthcare staffing market over the long-term. These growth drivers include an aging population, continued scarcity of healthcare professionals, increased utilization of flexible staffing models by hospitals and physician practices and increased focus on job flexibility by healthcare professionals.

Locum tenens accounted for 51.2% of the Company’s 2005 revenues. The Company provides its services in this business segment through two brands — CompHealth and Weatherby Locums. In the last three years, the Company has placed physicians on more than 30,000 assignments in all 50 states. Locum tenens assignments may last from several days to a year or more in duration. The Company’s locum tenens assignments most commonly last from 20 to 25 days.

The Company provides locum tenens coverage for physicians practicing in 35 specialties and subspecialties. The Company’s more significant specialties and subspecialties include: anesthesiology, emergency medicine, family practice, internal medicine, obstetrics/gynecology, oncology, psychiatry, radiology and surgery.

The Company is a leading nationwide provider of allied health and travel nurse staffing services. Other healthcare staffing, or allied health staffing and travel nurse staffing, accounted for 42.6% of the Company’s 2005 revenues. The Company provides its services in this business segment through four brands – CompHealth (allied health), Destination Healthcare (allied health), Foundation Medical Staffing (travel dialysis nurse and allied health) and RN Network (travel nurse). Over the past three years, the Company has placed other healthcare professionals in approximately 16,000 assignments in all 50 states. Assignments typically last 13 weeks.

The Company provides other healthcare staffing services for more than 50 specialties and subspecialties including: advanced practice nurses, or nurse practitioners and nurse anesthetists, critical care nurses, dialysis nurses, laboratory technologists, licensed practical and vocational nurses, medical/surgical nurses, neonatal intensive care nurses, physician assistants, radiation therapists, radiologic technologists, rehabilitation therapists (physical therapists, occupational therapists and speech and language pathologists) and respiratory therapists.

Gross profit increased 1.4%, or $1.6 million, from $112.0 million for the year ended December 31, 2004 to $113.6 million for the year ended December 31, 2005.

Depreciation and amortization expense increased 6.5%, or $0.3 million, from $4.3 million in the year ended December 31, 2004 to $4.6 million in the year ended December 31, 2005.

Special bonus expense was $2.5 million in the year ended December 31, 2004 and $5.4 million in the year ended December 31, 2005.