Transcend Announces Termination of Efforts to Sell Cascade Subsidiary

Business Wire, March 13, 2001

Business/High-Tech Editors

ATLANTA--(BUSINESS WIRE)--March 13, 2001

TRANSCEND SERVICES, INC. (NASDAQ: TRCR) announced today that it has terminated all efforts to sell its coding software subsidiary, Cascade Health Information Software ("Cascade"), due to market conditions.

Transcend had previously announced its intent to sell Cascade as a part of an overall restructuring effort to focus the Company on its transcription business.

Larry Gerdes, President and CEO, commented on the decision: "The improvements that have been made in Cascade's operations were not being adequately recognized by potential buyers. We are encouraged by Cascade's prospects. We expect Cascade to contribute both revenue growth and profitable operations to Transcend's operating results in 2001."

Bill Henderson, Cascade's President, further commented: "I want to thank Cascade's employees and customers for their ongoing support during this challenging process. I have been impressed by our employees' efforts at effecting operational improvements and by the confidence shown by our many new customers."

Cascade will continue to operate as a wholly-owned subsidiary of Transcend, but it will no longer be reported as discontinued operations by Transcend. Cascade's results of operations will be reported as a part of Transcend's on-going operations in its first quarter ended March 31, 2001 and prior years' results will be restated accordingly.

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 contract start dates, lower-than-expected demand for Transcend's solutions, 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.