Did TTS just become a part of Transcend...

• TTS (Transcription, Technology & Support) - cassidy
  • my 2-cents - ex-TTS'r
  • The difference here - sm
  • DEFINITELY - TTS is not same as TT!! - IAMT
    • I have to disagree with the above - sm
      • Did TTS just become a part of Transcend... - or is that another company, and I am mistaken?
        • No, it was Transcription Relief Services LINK - darlene
        • That was TRS, not TTS nm - informant
          • Thanks for clearing that up! I get absolutely - confused sometimes with all these T-companies.

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The Company may not be able to recruit and hire a sufficient number of new or replacement medical language specialists to sustain or grow the current level of revenue.

The Company cannot provide transcription services to customers within contracted delivery standards without an adequate supply of qualified medical language specialists. Medical language specialists are in short supply. The Company relies upon in-house recruiters to hire a sufficient number of qualified medical language specialists to meet current and projected needs. The Company attempts to attract and retain medical language specialists by offering competitive pay and benefits and the opportunity to work from home utilizing the Company’s Internet-based system. The Company is transitioning a significant portion of the business from transcribing (typing) to editing, which allows the Company to increase the productivity of existing personnel and attract a new supply of medical language specialists. Nonetheless, there can be no assurance that the Company will be able to hire and retain a sufficient number of medical language specialists to meet demand. Failure to do so could have a material adverse effect on the ability to undertake additional business or to complete projects in a timely manner, which could adversely affect operating results and financial condition.

The Company’s reliance on key third-party software could affect the ability to operate competitively.

Portions of the BeyondTXT technology were provided to us by Multimodal Technologies, Inc. under an agreement originally entered into on September 28, 2004. The original agreement was replaced by a new agreement, commencing September 1, 2006, that provides for a one-year, non-exclusive license that is renewable for up to four successive one-year periods at the Company’s option (the last such option period ending August 31,2011 and additional successive one-year periods if mutually agreed to by both parties. The inability to maintain the relationship with Multimodal Technologies, Inc. or find a suitable replacement for the technology at favorable prices or at all would adversely affect the ability to operate competitively and to meet the workload demands of the existing customer base.

Transcend’s operations depend on access to reliable voice and data networks and dictation capture systems. Any failure of more than one of these networks or systems, even for a short time, could harm the business.

The majority of the Company’s customers depend on the BeyondTXT platform, data networks and dictation capture systems being able to process voice and data files 24 hours per day, seven days per week. If voice and data networks or dictation capture systems are unavailable, the ability to transcribe documents for customers is severely limited. The Company is heavily dependent on third parties such as telecommunications providers and dictation system vendors. Although there is redundancy across these providers and systems, any failure of more than one of these networks or systems, even for a short time, could delay the ability to provide transcription services to customers. Because the timely delivery of transcription services is vital to customers, any such delay could harm the business.

The Company operates in a highly competitive market and can make no assurance that it will be able to compete successfully against current or future competitors.

The medical transcription services market is highly fragmented and competitive, with several thousand local, regional and national companies competing in the United States alone. In addition, the medical transcription industry in the United States has experienced competition from overseas competitors. While the Company attempts to compete on the basis of fast, predictable turnaround times and consistently high accuracy and document quality, there can be no assurance that the Company will be able to compete effectively, if at all, against competitors. These competitive forces could result in loss of market share, lower margins and/or increased technology investments.

The Company operates in an environment with competitive pricing pressure and can make no assurance that it will be able to compete successfully against current or future competitors on the basis of price.

Some competitors have lower cost structures than the Company does, particularly if they are small firms or operate primarily offshore. Other competitors may be willing to accept less profitable business in order to grow revenue. It is common for competitors to offer lower prices than Transcend’s. The Company attempts to position itself in the industry as a high quality provider at a mid-level price point. Accordingly, the Company may lose business on the basis of price or be forced to lower prices to win new business. There can be no assurance that the Company will be able to compete effectively, if at all, against competitors on the basis of price. Competitive pricing pressure could result in loss of market share and lower margins.

The use of offshore medical dictation subcontracting firms exposes the Company to operational and financial risks not inherent in the United States.

As of December 31, 2008, approximately 19% of the Company’s transcription volume was subcontracted to offshore providers. As the Company increases reliance on these offshore providers, there will be increasing exposure to operational and financial risks not inherent in its United States operations. These risks include political, economic and social instability, unexpected changes in the regulatory environment, currency fluctuations (although our contracts are in U.S. dollars) and the possibility that offshore providers will be acquired by a competitor and discontinue their relationship with the Company.

REVENUE

 Year Ended December 31, 2008 Compared to Year Ended December 31, 2007

Revenue increased $6.2 million, or 15%, to $48.7 million in 2008, compared to revenue of $42.5 million in 2007. The $6.2 million increase in revenue consisted of increased revenue from existing customers of $4.8 million, revenue from new customers of $3.0 million, partially offset by decreases in revenue of $1.6 million from customers who cancelled their contracts in 2008.

Direct costs increased $2.1 million, or 7%, to $30.9 million in 2008, compared to $28.8 million in 2007. Direct costs include costs attributable to compensation for transcriptionists, recruiting, management, customer service, technical support for operations, fees paid for speech recognition processing, telephone expenses and implementation of transcription services. Transcription compensation is a variable cost based on lines transcribed or edited multiplied by specified per-line pay rates that vary by individual as well as type of work. Speech recognition processing is a variable cost based on the minutes of dictation processed. All other direct costs referred to above are semi-variable production infrastructure costs that periodically change in anticipation of or in response to the overall level of production activity.

As a percentage of revenue, direct costs decreased to 63% in 2008 from 68% in 2007. The decrease in costs as a percentage of revenue is due primarily to cost savings that resulted from an increase in the use of the Company’s speech recognition-enabled BeyondTXT platform, growth of semi-variable direct costs of operations at a slower rate than the rate of revenue growth and the use of increased offshore transcription resources. Approximately 19% of the Company’s transcription work was performed offshore during 2008, compared to 14% during 2007. During 2008, approximately 30% of the Company’s volume was edited using speech recognition technology on the BeyondTXT platform, compared to 24% during 2007. Gross profit increased $4.1 million, or 31%, to $17.8 million in 2008, compared to $13.7 million in 2007. Gross profit as a percentage of revenue increased to 37% in 2008 compared to 32% in 2007. 

DCOA Promissory Note

On April 6, 2005, the Company fulfilled the prerequisites for receiving the proceeds under a Promissory Note dated March 1, 2005 payable to the Development Corporation of Abilene, Inc. (“DCOA”) in the principal amount of $1.0 million (the “Promissory Note”). Transcend received $850,000 under the Promissory Note on April 7, 2005 and was pre-funded $150,000 under the Promissory Note on March 31, 2005. The Promissory Note was initially secured by a $150,000 letter of credit from a bank and certain furniture and equipment. The letter of credit was released December 7, 2005 and the remaining collateral shall be released as the principal balance of the Promissory Note is reduced.

The Promissory Note relates to the Agreement for Financial Assistance by and between DCOA and Transcend effective as of March 1, 2005 that was approved by DCOA on March 4, 2005 and amended on June 6, 2006 (collectively, the “Agreement”). Under the terms of the Agreement, DCOA agreed to provide up to $2 million of interest-free, secured loans to Transcend (the “Loans”). In return, Transcend agreed to recruit, hire and train up to 208 medical transcription professionals, the majority of whom shall be recruited from Abilene or the area surrounding Abilene, as defined in the Agreement. DCOA offered the Loans to Transcend in two increments of $1 million each in return for Transcend recruiting, hiring and training up to 104 medical transcription professionals for each Loan. The Promissory Note is the first such Loan. During 2007, the Company was informed by the DCOA that the second $1 million loan is no longer available.

Transcend and DCOA intend for the Promissory Note to be paid by Transcend using quarterly training credits and annual job creation/retention incentive credits provided to Transcend by DCOA as defined in the Agreement. Principal reductions of the Promissory Note were effected through quarterly training credits and annual earned job creation incentive credits, not cash, as follows: (1) $25,000 per month for the first six months of the Agreement provided that 15 employees were hired by Transcend during that period; (2) a quarterly training credit equal to 50% of the total wages paid to newly hired Medical Language Specialists (“MLS”) during their probationary period (not to exceed $4,000 per MLS); and (3) an annual job creation incentive credit of between 10% and 12% of compensation for the year for each full time equivalent employee (FTE), with cumulative per FTE credits capped at 30% to 35% of the FTE’s annual compensation (depending on the FTE’s compensation band) for FTEs hired on or before March 31, 2010 including compensation paid through March 31, 2012.

Transcend had earned credits of $23,000, $77,000, and $99,000 for the years ended December 31, 2008, 2007 and 2006. These credits are reported as reductions of direct operating costs. On December 1, 2008,

Transcend entered into a new agreement with the DCOA whereby the DCOA reduced the loan principal by $101,000 in exchange for agreement by Transcend to retire the debt three years earlier than agreed and the cancellation of potential future credits earned through training and job creation. This reduction was booked to direct costs as were previous job credits earned. Transcend will pay DCOA six quarterly payments of $92,000 commencing January 1, 2009 with the final payment due April 1, 2010 to satisfy the remaining principal amount. The note will continue to carry a zero interest rate. The principal balance on the Promissory Note is $550,000 at December 31, 2008.

 RETIREMENT PLAN

The Company maintains a 401(k) retirement plan that covers all eligible employees. Employees are eligible to contribute amounts to the plan subject to certain minimum and maximum limitations. The Company matches employee contributions on a discretionary basis as determined by the Company’s Board of Directors. The Company made $156,000 and $134,000 of matching cash contributions in 2008 and 2007, respectively, and no matching contributions in 2006.

Going forward, the Company intends to continue matching 50% of the first 4% of employee’s compensation contributed to the plan, subject to the financial performance of the Company.

MAJOR CUSTOMERS

Revenue attributable to one contract with Providence Health System—Washington for four hospitals totaled $3,728,000 $3,269,000 and $3,017,000 or 7.7 %, 7.7% and 9.2% of total revenue for 2008, 2007 and 2006, respectively. In addition, the Company had revenue under separate agreements with approximately 44 customers who are owned by Health Management Associates, Inc., a single healthcare enterprise. Revenue attributable to Health Management Associates, Inc. comprised $10,267,000 or 21.1%, $9,611,000 or 22.7%, and $8,473,000 or 25.9% of the Company’s total revenue for 2008, 2007 and 2006 respectively.

On January 1, 2009, the Company purchased certain assets of DeVenture Global Partners, Inc. and acquired approximately 30 customers with this transaction.

Can any current Transcend employees please tell me how their part-time status works?  Minimum requirements/hours? 

Thanks so much.

money, money, money.  What I think is crazy is MTs putting up with it.  Life is too short to sit at the keyboard 24/7 trying to get enough work to pay the light bill.

If you have requested time off without pay in the past and if it was at all a problem?

Is part time available? And what are the line count requirements? I'll be looking for a change within the next few months and need a part-time flexible schedule.

Thanks