<PAGE>
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Contact: Larry Gerdes
Chief Executive Officer
404-364-8000
[email protected]
October 13, 2000
(BW) (TRANSCEND SERVICES, INC.)(TRCR)
TRANSCEND SERVICES, INC. COMPLETES THE SALE OF CO-SOURCING AND
CODEREMOTE OPERATIONS TO PROVIDER HEALTHNET SERVICES/ANNOUNCES DEPARTURE OF
CFO
Atlanta, Georgia, TRANSCEND SERVICES, INC. (TRCR/NASDAQ) today announced
completion of the previously announced sale of its Co-sourcing and CodeRemote
businesses to Provider HealthNet Services, Inc. (PHNS), a Dallas based leader in
information technology (IT) and business outsourcing for the healthcare
industry. The completion of this transaction is part of an ongoing effort by
Transcend to focus on its transcription business, while also allowing for the
continued growth of the potential in the Co-sourcing and remote coding
businesses as an integral part of PHNS' growth plans.
Co-sourcing is a business process service that provides on-site management of
paper-based and electronic records for hospitals and healthcare systems.
CodeRemote helps health care providers improve their coding turnaround and
accuracy for hospital billing and reimbursement services. These services combine
effectively with the core strategies of PHNS as it seeks to manage all aspects
of patient information.
The sale was completed on October 13, 2000 for $4.7 million in cash and future
consideration to be paid over a period of five years with the potential to earn
an additional $4.3 million for a total purchase price of $9.0 million. The
purchase price structure is designed in a way as to encourage future
collaboration between PHNS and Transcend on joint selling, while providing
Transcend sufficient up-front cash to retire debt and provide capital to fund
its future direction in the transcription business.
"The completion of this transaction is an important step in the reshaping of
Transcend", said Larry Gerdes, Chief Executive Officer of Transcend Services.
"It provides our company with additional capital and the focus to take advantage
of the outstanding national internet based platform (T2K) we have delivered to
the transcription industry. We hope to become a key supplier of these
<PAGE>
services to PHNS and the industry in total".
"The healthcare industry generates more data than any other industry", said
Charles M. Young, Chief Executive Officer of PHNS. "The proper management of
information such as medical records is not only a health issue, but a major
expenditure of time and financial resources for physicians, hospitals and
clinics. Co-sourcing and CodeRemote is another major step for us in our quest to
become the largest and most innovative provider of IT, medical records and other
business process outsourcing services in the healthcare industry. We are
impressed that four of the departments we are purchasing are already
electronic", he added.
Mr. Gerdes further remarked, "We want to thank the outstanding employees and
exceptional customers in these divisions for their participation in our success
as the pioneer and leader in the new Co-sourcing and CodeRemote industry. They
are to be commended on their efforts, and we wish them well in their future
success as a part of the growing PHNS organization. We are excited about the
resources and focus PHNS brings to this industry we helped recognize and
create".
Transcend also announced the departure of its Chief Financial Officer, Doug
Shamon, to pursue a new business venture. Mr. Shamon had been the Company's CFO
for three years and had played a key role in effecting the sale to PHNS. "Doug
has been a very important member of Transcend's senior management team and we
are indebted to him for his many contributions the past three years. With this
sale he felt the Company was positioned to allow him to pursue an exciting new
opportunity. We wish him well in his new business venture", noted Mr. Gerdes.
Mr. Gerdes will assume the additional role of Chief Financial Officer as the
Company determines whether to fill the position internally or externally.
Transcend Services, Inc. provides dictation and transcription solutions to
hospitals and other associated healthcare providers. The Company also provides
state of the art coding and abstracting software through its Cascade subsidiary.
Provider HealthNet Services partners with healthcare providers to assume the
responsibility for information services including medical record keeping,
coding, transcription, hospital billing and collections, technology strategy,
system implementation, systems support, computer operations, enterprise
networking and telecommunications design.
<PAGE>
This press release contains forward-looking statements that involve a number of
risks and uncertainties. Among the important factors that could cause actual
results to differ materially from those indicated by such forward-looking
statements are competitive pressures, changes in pricing policies, delays in
sales revenue recognition, lower-than-expected demand for products and services,
business conditions in the integrated healthcare delivery network market,
general economic conditions and the risk factors detailed from time to time in
Transcend's periodic reports and registration statements filed with the
Securities and Exchange Commission.
