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I have also heard great things about this company, only recently have I heard bad things.  If they post on this message board they supposedly do not offshore work. The moderator would definitely have something to say about that, don't you think?

Does that make sense to you?

::

What a waste of time that would be.

The way she be postin jobs I think ther may be a futire for me with them.  I go with the seying neber gib up.  Wish me louck.  When the goin gits rugh, I git goin.  So fellow MTs, I think I reilly do hab a futire in this profezion.  Do anyone no if Missy Clay have spellkicker?

This comes straight from the SEC filing for year ending December 31, 2008, submitted March 11, 2009.  Yes, it is public information and anyone can look at it.  Keep in mind, all the narrative is from Transcend’s point of view and they are trying to keep and/or get people to buy their stock.  So you will have to read between the lines as far as if they will/can meet the needs/wishes of their MTs/Medical Language Specialists in the years to come, or if they will turn into another company too large to keep their employees happy. 

Regarding the MDI-MD acquisition: 

TRANSCEND SERVICES, INC. (NASDAQ: TRCR), the third largest provider of medical transcription services to the U.S. healthcare market, announced today that it has entered into a definitive agreement to acquire Medical Dictation Services, Inc. (MDI) for $16.2 million.

Founded in 1981, and headquartered in Gaithersburg, Maryland, MDI is a leading medical transcription company with approximately 450 employees providing service to approximately 30 customers located predominantly in the mid-Atlantic region of the United States. For the fiscal year ended March 31, 2009, MDI had unaudited revenue of approximately $13.7 million, and currently has an annualized revenue run rate of approximately $14.3 million.

Below are SMALL excerpts of the 64-page SEC filing.  I chose sections which I thought would shed some light on where Transcend currently is and where they plan to go, so not only the new MDI-MD transcriptionists  but also the current Transcend Transcriptionists could possibly stop stressing about what their future holds. 

HOPE THIS IS OF SOME HELP TO YOU. 

TRANSCEND SERVICES, INC.

Transcend Services, Inc. hereafter known as the Company

EMPLOYEES

As of December 31, 2008 the Company had 749 full-time and 423 part-time employees. These included 587 full-time and 418 part-time medical language specialists, virtually all of whom work from home. One hundred and twenty three full-time and three part-time employees work in operations to support and manage customers and medical language specialists. Thirty-nine full time employees and two part time employees work in sales, research and development, implementations, and general administrative functions. Neither the Company nor its employees are currently a party to any collective bargaining agreement. The Company has not experienced any strikes or work stoppages, and believes that relations with employees are good.

As of December, 2008, approximately 65% of the Company’s total volume was processed on the BeyondTXT platform and 35% was processed on other platforms.

Management plans to gradually increase the percentage of voice files processed through BeyondTXT speech recognition from 24% of total volume in the fourth quarter of 2007 and 35% in the fourth quarter of 2008 to approximately 40% by the end of 2009.

Speech recognition technology will allow us to produce the same volume of work with fewer medical language specialists due to the productivity improvements the Company is able to achieve, and may open the market to a new pool of professionals.

In mid-2006, a portion of work began to be processed offshore through partners in India. Volume processed offshore has gradually increased since then.

By the fourth quarter of 2008, the Company had increased the percentage of work processed in India to approximately 19% of total volume. Management plans to increase this percentage gradually over the next several years and believes that in the long-term (5-10 years), market demands could drive the mix closer to 50% domestic and 50% offshore, but in the intermediate term (2-5 years), the mix is expected to gradually grow to about 30% offshore and 70% domestic. At some point in the future, the Company may decide to establish a transcription operation offshore, but currently is relying on partnerships as the preferred solution.

The Company’s income before income taxes has improved in 2006, 2007 and 2008 due in large part to improved customer retention combined with new sales, increased use of speech recognition technology and increased use of offshore transcription partners.

The Company provides medical transcription services to the healthcare industry. The Company’s mission is to provide accurate documentation of the patient / medical provider encounter on-time at a fair price. Transcend’s customers include hospitals, hospital systems, multi-specialty clinics and physician group practices in the United States. Transcription services consist of three primary phases:

The Company provides two primary medical transcription options for customers: (1) the provision of transcription services and technology using the Company’s proprietary BeyondTXT workflow platform or (2) the provision of transcription services using the customer’s proprietary or licensed third party transcription system. If the customer does not have its own transcription technology or no longer has the desire or resources to maintain and upgrade the technology they do have in place, the BeyondTXT platform provides a turnkey solution. If the customer has invested in their own transcription technology and wishes to keep their system in place, the Company’s transcriptionists access the system and perform all transcription services using the customer’s system. Management believes that our ability to serve a customer regardless of their use or non-use of our platform is an important factor in our success. As of December, 2008, approximately 65% of the Company’s total volume was processed on the BeyondTXT platform and 35% was processed on other platforms.

INDUSTRY OVERVIEW

Medical transcription is either performed in-house by hospital or clinic personnel or outsourced to local, regional, national or offshore vendors. Hospitals and clinics may choose to outsource for many reasons: (1) the shortage of qualified medical transcriptionists; (2) the unique and burdensome management challenges of managing a 24/7 operation that must deliver critical patient care information quickly; and (3) the high cost of equipping in-house personnel with the hardware, software and support necessary for their jobs. Successful transcription companies make use of technological advances in Internet access, speech recognition, security, software and hardware that allow remotely located, highly trained personnel to function as well as (or better than) in-house employees. Management believes that the principal historical competitive factors of price, accuracy and turnaround time are expanding to include other factors such as speech recognition capability, electronic security, hardware redundancy (to protect against data loss) and data integration. In addition, management believes that the ability to recruit, train and, most importantly, manage personnel nationally and internationally will lead to further outsourcing, and that only those companies prepared to compete using resources outside the customer’s local market will prosper.

The market for medical transcription services is sizable. The total annual market potential for medical transcription is estimated to be $12 billion, of which an estimated $5 billion is outsourced. These figures include not only hospitals, but also physicians’ offices and clinics. The Company focuses primarily on the hospital market. There are approximately 4,900 community-based hospitals in the U.S. (hospitals accessible by the general public) with approximately 800,000 beds that comprise the Company’s primary target market. If the average annual market value of transcription services per hospital is $400,000 (our estimate), the Company’s primary target market is approximately $2.0 billion. The market is highly competitive and fragmented, with several thousand transcription services companies nationally. Management believes only a dozen or so competitors have revenue in excess of $15 million.

Demand for medical transcription services is growing as the demand for healthcare services increases. Macro-economic trends such as the aging of the baby boomer generation are projected to have a major impact on the demand for healthcare services in general and should lead to a corresponding increase in the demand for medical transcription services.

HISTORY OF THE COMPANY

We were incorporated in California in 1976 as TriCare, Inc. (“TriCare”) and reorganized as a Delaware corporation in 1988. TriCare completed an initial public offering of its shares in 1990. In 1995, the Company acquired Transcend Services, Inc., then a Georgia corporation, by the merger of Transcend Services, Inc. into TriCare and changed the name to Transcend Services, Inc. The historical financial statements of the former Transcend Services, Inc. became the financial statements of the Company and include the businesses of both companies as of the effective date of the merger. Between 1993 and 1995, the Company acquired five medical transcription companies.

As a result of these transactions, the Company now operates in one reportable business segment as a provider of medical transcription services to the healthcare industry.

In 2004, the Company introduced the BeyondTXT transcription workflow platform.

On January 31, 2005, the Company acquired Medical Dictation, Inc., (MDI), a Florida-based medical transcription services company. During 2005, the Company’s field operations were reorganized to form customer-centric teams that are responsible for all aspects of production, quality and customer care. Effective December 30, 2005, certain assets of the transcription business unit of PracticeXpert were purchased.

By early 2006, the Company began processing significant volume through the Company’s speech recognition solution and, throughout 2006, 2007 and 2008, have steadily increased the percentage of work which is electronically converted and then edited versus transcribed (typed) from recorded speech. In mid-2006, a portion of work began to be processed offshore through partners in India. Volume processed offshore has gradually increased since then.

On January 16, 2007, the Company purchased certain assets of OTP Technologies, Inc. (OTP), a Chicago area medical transcription company, for a purchase price of $1,110,000.

On January 1, 2009, the Company purchased certain assets of DeVenture Global Health Partners (“DeVenture”), a Canton, Ohio based medical transcription company, for a base purchase price of $4,250,000 plus potential consideration based on results for the first six months of 2009. The Company does not currently expect to pay any additional potential consideration.

BUSINESS STRATEGY

Transcend’s sole focus is providing medical transcription services to the healthcare industry. The Company’s strategy is to succeed in the marketplace by successfully executing six key strategies.

Provide Unparalleled Service to Customers

The key to the Company’s success will always lie first and foremost in providing excellent service to customers. The Company retained 98% of customers in 2007 and 2008, which is believed to be superior to most of our competitors. Management believes that customers who are consistently receiving high quality documents on time at a fair price are likely to remain our customers year after year. Satisfied customers provide sales leads and referrals that help us drive new business. Accordingly, the Company has an ongoing program to monitor and improve customer satisfaction which includes continuous monitoring of transcription production statistics relative to contracted standards, periodic customer surveys and a dedicated regional operations support organization that maintains regular (often daily) contact with customers. Management believes that regional operations managers provide a competitive advantage in sustaining customer satisfaction. As our regional operations managers typically come from a Transcriptionist background, they possess the expertise to continuously improve quality. In addition, they provide customers a central contact person in the organization who is directly responsible for resource scheduling and quality control and can quickly resolve any issues that arise. The Company practices continuous quality improvement with the goal of improving the level of service over time.

Increase Market Penetration

The transcription industry is large and highly fragmented. In addition, it is currently estimated that 60% of transcription volume is still performed in-house. As a result, management believes that the Company is well-positioned to increase market share both by winning contracts with hospitals who are now actively considering an outsourced solution and by taking business from competitors. Management believes that the level of service provided by many of the Company’s competitors can be very inconsistent. As a result, the Company is often asked to submit proposals on new accounts where Transcend will replace a competitor. In addition, the Company believes that smaller competitors are increasingly unable to keep up with advances in technology and lack the capacity to give customers assurance that they can consistently meet turnaround time requirements. As a result, the Company frequently wins new customer accounts from customers who have outgrown the capabilities of their smaller providers. The Company’s tested and proven infrastructure enables it to serve substantially more customers without a significant increase in fixed costs. While continuing to focus on day-to-day customer satisfaction, the Company intends to add new accounts to the existing customer base to efficiently utilize the capacity of the infrastructure and established customer-oriented support organization.

The Company intends to grow by focusing the sales team on potential new accounts and utilizing the operations management team to increase services to the existing customer base. The Company’s target market is focused on community hospitals with over 100 beds. Based on experience, this target market can realize the most benefit from services while still allowing the Company to provide superior customer service at a reasonable profit. The Company targets new business from hospitals where there is not a current relationship as well as affiliated hospitals of existing customers. A telemarketing partner is utilized to help identify hospitals within the Company’s target market that are interested in transcription services. New business leads are also generated from regional operating managers, who receive referrals from the administrators they work with daily. Management anticipates continuing to add sales resources to help deliver revenue growth.

Many hospitals are members of group purchasing organizations (“GPOs”), which provide value to their members by pre-screening the best vendors for a particular product or service and pre-negotiating terms and conditions with the vendors. The Company signed an agreement in 2008 with one 1,400 member GPO and will attempt to secure additional GPO contracts in the future in order to increase market penetration and accelerate growth.

The Company also expects to continue to win new business by working with technology partners. Technology providers, such as Nuance and 3M, license their proprietary transcription platforms to hospitals across the country and refer the transcription work to preferred service providers like us. Management believes Transcend’s size and superior customer service make the Company a preferred provider to these partners.

Speech recognition technology represents a sea of change in the transcription industry. The Company has invested heavily in fully integrating speech recognition technology into the BeyondTXT platform. The Company licenses the speech recognition engine, natural language processor and various editing tools from MultiModal Technologies, a leader in the industry, under a September 2006 agreement that renews annually at Transcend’s sole option through September 2010, with the last such option period ending August 31, 2011, and thereafter if mutually agreed by both parties. The Company’s speech recognition solution requires no physician training or change in physician work habits. Voice files are collected in the same manner regardless of whether the job will be transcribed (typed) or edited using speech recognition technology. Once a physician’s voice profile is built that meets predicted quality criteria, future work from that physician is edited. When a medical language specialist is presented with a draft document, they listen to the voice file and edit the document as necessary. Their edits are fed back into the voice profile, which learns over time in order to continuously improve the quality of draft reports.

The use of speech recognition technology in BeyondTXT results in a more efficient transcription process and leads to lower direct costs and higher gross margins while allowing the Company to offer competitive pricing. The Company’s medical language specialists earn less per line of text for editing, but their increased productivity generally allows their total compensation to remain unchanged or to increase. After the cost paid to MultiModal Technologies, the Company is still able to reduce the average cost per line of text. This is a key defensive strategy against pricing pressure in the industry.

Management plans to gradually increase the percentage of voice files processed through BeyondTXT speech recognition from 24% of total volume in the fourth quarter of 2007 and 35% in the fourth quarter of 2008 to approximately 40% by the end of 2009. Longer-term, the percentage of transcription volume that is edited using speech recognition technology is dependent on such factors as the mix of transcription volume that is processed on the Company’s platform versus customer platforms, the percentage of dictators for whom high quality voice profiles can be built, and the ability to hire, train, and retain editors.

Attract and Retain Professional Staff

One of the Company’s critical success factors is the recruitment and retention of the industry’s best knowledge workers, including medical language specialists, application developers and service professionals. The goal is to be the best company to work for in the industry. Management believes that there will be a shortage of qualified traditional medical language specialists in the future. There are two domestic solutions to this problem. First, workers will be attracted and retained by offering competitive pay and benefits, stable and responsive management, a predictable abundance of work, a stable and efficient platform, career development opportunities and the opportunity to work from home. Second, speech recognition technology will allow us to produce the same volume of work with fewer medical language specialists due to the productivity improvements the Company is able to achieve, and may open the market to a new pool of professionals.

Increase Utilization of Offshore Resources

The Company operates in a global economy in which medical transcription services can be performed efficiently and cost-effectively by offshore medical transcription service organizations. Customers have differing views of offshore production. Some believe it allows them to realize improved turnaround times and sometimes obtain a lower price without sacrificing quality or security of data. Others remain committed to domestic-only medical transcription. From management’s perspective, offshore production allows the Company to improve turnaround time by providing consistent staff at night and on weekends; alleviates the need to hire as many domestic medical language specialists in a tight labor market as would otherwise be needed; and reduces cost. Management plans to meet customers’ needs by providing services using a combination of domestic and offshore labor. In July 2006, the Company began subcontracting a portion of work to offshore medical transcription firms. By the fourth quarter of 2008, the Company had increased the percentage of work processed in India to approximately 19% of total volume. Management plans to increase this percentage gradually over the next several years and believes that in the long-term (5-10 years), market demands could drive the mix closer to 50% domestic and 50% offshore, but in the intermediate term (2-5 years), the mix is expected to gradually grow to about 30% offshore and 70% domestic. The growth in offshore volume is not expected to displace the domestic workforce, which the Company expects to grow over time. At some point in the future, the Company may decide to establish a transcription operation offshore, but currently is relying on partnerships as the preferred solution.

Successfully Complete and Integrate Acquisitions

The Company intends to increase market share through acquisitions and believes that the Company is the third largest of the more than several thousand medical transcription providers in the United States. Technological developments such as voice recognition technology and the need to provide customers with an off-shore solution are making it increasingly difficult for smaller medical transcription businesses to compete effectively. As a result, management believes that the Company will be able to make acquisitions on an opportunistic basis that will enable it to grow the business. When the Company acquires these businesses, it is often able to add the acquired companies’ customers to the BeyondTXT platform and to eliminate a substantial portion of their overhead. It is expected that acquisitions will be financed through a combination of cash on hand, debt, and shares of the Company’s common or preferred stock.

For customers who already have their own transcription workflow system, the Company provides outsourced transcription and/or editing services on the customer’s platform. For example, the Company has a partnership with Nuance to use their eScription platform, which is a popular hosted ASP solution that can be licensed by healthcare organizations. Customers contract directly with Nuance for the system implementation and contract with us for transcription services. eScription is speech recognition-enabled, allowing the Company to provide editing services to those clients in addition to traditional typing services. The primary advantage to this business model is simplicity—there is no proprietary workflow system to develop and maintain. There is, however, less opportunity for the Company to leverage technology to improve profitability. Some customers have legacy systems they have developed themselves. Over time, the Company expects to migrate customers with outdated legacy platforms off of their own systems and onto BeyondTXT. The Company provides services on numerous platforms: other notable examples include ChartScript (a 3M platform), Dictaphone (a Nuance platform) and Meditech.

CUSTOMERS

As of December 31, 2008, the Company delivers dictation and transcription services to approximately 154 hospitals and clinics with recurring revenue generally under long-term contracts or other arrangements. The average level of annual revenue generated by each customer was approximately $316,000 in 2008. The top 10 customers accounted for approximately 27% of 2008 transcription revenue, averaging $1.3 million of revenue each.

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 8 %, 8% and 9% of total revenue for 2008, 2007 and 2006, respectively. As of December 31, 2008, the Company had separate agreements with approximately 44 customers who are owned by Health Management Associates, Inc., a single healthcare enterprise. Revenue attributable to members of Health Management Associates, Inc. comprised $10,267,000, $9,611,000 and $8,473,000 or 21%, 23% and 26% 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.

COMPETITION

The Company experiences competition from many local, regional and national businesses. The medical trans