Spheris Reports Fourth Quarter and Year-End 20...(TDA is a non-GAAP financial measure. Ple...),Health

Financial Highlights - Year Ended December 31, 2007

Net revenues for the year ended December 31, 2007 were $200.4 million compared with $207.1 million in 2006. The decline in net revenues during 2007 as compared with 2006 was primarily caused by delayed implementations during the first half of 2007 of signed new business, industry pricing pressures affecting both our existing and new customer relationships and less signed new business driven, in part, by the timing of the Company's new technology development initiatives. Operating income was $7.4 million, or 3.7 % of net revenues, during 2007 compared with $4.1 million, or 2.0% of net revenues, during 2006. The improvement in operating income margin during 2007 was primarily due to operational cost savings from increased utilization of the Company's global production capabilities, lower MLS-related direct costs and other operating expense reductions, as well as decreased depreciation expense. These savings were partially offset by the impact of unfavorable foreign currency exchange rates associated with production costs of the Company's Indian operations.

EBITDA was $31.6 million, or 15.8% of net revenues, in the year ended December 31, 2007 compared with $30.7 million, or 14.8% of net revenues, in 2006. The increase in 2007 EBITDA as compared with 2006 was primarily due to the impacts of operating cost savings and decreased depreciation expense described above.

Commenting on the fourth quarter and year-end 2007 results, Steven E. Simpson, president and chief executive officer of Spheris, stated, "I'm pleased to announce that we not only finished the year with a strong annual EBITDA performance, but also with great confidence that the sound technology investments we've
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