Exhibit 99.1





Larry Gerdes, CEO, larry.gerdes@trcr.com

Lance Cornell, CFO, lance.cornell@trcr.com


January 24, 2006




Atlanta, Georgia. TRANSCEND SERVICES, INC. (TRCR/Nasdaq Market) today announced its results for the quarter and year ended December 31, 2006.

Three Months Ended December 31, 2006

Revenue for the fourth quarter of 2006 was $8,954,000, an increase of $1,650,000, or 23%, over fourth quarter 2005 revenue of $7,304,000. Earnings per share was $0.10 in the fourth quarter of 2006 compared to a loss of $0.06 in the fourth quarter of 2005.

The $1,650,000 increase in revenue consisted of transcription revenue from new customers of $1,298,000, approximately $802,000 of which was generated by four customers that were implemented in stages during the late third and fourth quarters of 2006, a $364,000 increase in revenue from customers existing as of the beginning of 2006 and a decrease in other revenue of $12,000.

Gross profit increased to 27% of revenue in the fourth quarter of 2006 from 19% in the fourth quarter of 2005. The improvement is attributable to (1) rollout of the Company’s speech recognition-enabled BeyondTXT platform, (2) growth of relatively fixed indirect cost of operations expenses at a slower rate than the rate of revenue growth and (3) use of offshore transcription resources.

Sue McGrogan, Senior Vice President of Operations, stated, “We are extremely pleased with our fourth quarter results. Our two primary gross profit improvement initiatives—the speech recognition rollout and utilization of offshore partners—showed strong results during the fourth quarter. Roughly 20% of the Company’s total volume is now edited using speech recognition technology in our BeyondTXT platform. The rate of increase accelerated late in the fourth quarter as we overcame implementation barriers and enabled significant numbers of new dictators for editing. Offshore transcription volume, which was almost non-existent until the third quarter of 2006, now represents approximately 7% of total Company volume. We expect both editing and offshore volume to increase steadily during 2007.”

Other operating expenses, consisting of selling, research and development, general and administrative, depreciation and amortization expenses, decreased by $95,000 to $1,537,000, or 17% of revenue, in the fourth quarter of 2006 compared to $1,632,000, or 22% of revenue, in the fourth quarter of 2005. The decrease is primarily attributable to the Company’s cost saving initiatives implemented in the fourth quarter of 2005, reduced depreciation expense and ongoing control of expenses as the Company grows.


The following information was filed by Transcend Services Inc (TRCR) on Wednesday, January 24, 2007 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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