Net revenues for the nine month period ended September 30, 2008 were $141.1 million compared with $151.8 million in the prior-year period. The decrease in net revenues was due primarily to the impact of net lost business and lower average pricing.
Operating income for the nine month period ended September 30, 2008 was $1.0 million, or 0.7% of net revenues, compared with operating income of $6.1 million, or 4.0% of net revenues, in the prior-year period. During the first quarter of 2008, the Company recorded $1.3 million of expenses relating to a transaction that was not consummated. Excluding these transaction costs, operating income would have been $2.3 million, or 1.6% of net revenues, for the nine month period ended September 30, 2008. In addition to the impact of the transaction costs, the decrease in operating income was due primarily to lower net revenues as described above, accelerated technology investments to further develop and enhance our product and service offerings, as well as costs associated with the expansion of our global capacity. These costs were partially offset by operational cost savings from increased utilization of our global production workforce and speech recognition technologies, in addition to other cost savings initiatives.
Adjusted EBITDA for the nine month period ended September 30, 2008 was $18.7 million, or 13.3% of net revenues, compared with $24.3 million, or 16.0% of net revenues, in the prior-year period. Excluding the $1.3 million of transaction related expenses noted above, Adjusted EBITDA would have been $20.0 million, or 14.2% of net revenues, for the nine month period ended September 30, 2008. The decrease in Adjusted EBITDA was primarily due to the impact of lower net revenues, accelerated technology investments, and transaction costs described above.
Commenting on the third quarter 2008 results, Steven E. Simpson,
President and Chief Executive Officer of Spheris, stated, "The third
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