Ticker symbol: TRCR

Where traded: Nasdaq

File photo (ENLARGE)

Transcend Services employees read data from a monitor.

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Chief executive: Larry G. Gerdes, 59

Headquarters: Atlanta

Business summary: Transcend Services provides medical transcription services to the healthcare industry, such as physician dictation of a medical case. Its market includes hospitals, hospital systems and specialty clinics.

When you go to the doctor or to the hospital, the physician dictates or writes a record of that visit. That report is then transcribed for future use by the doctor or by other doctors. Gerdes talked about the company's success.

Q: What is there about your business or your business strategy that resulted in a Top 10 performance?

A: Mostly fundamentals. But two major initiates we took three years ago had an impact on our margins. We implemented speech recognition technology and last year started seeing the results of that technology. Twenty-five percent of our volume goes through the speech recognition engine and that has increased our margins and efficiency.

We also began, a year and a half ago, sending work overseas – to India – for overnight and weekend shifts, and that has had an impact on our gross margins.

Q: One source of strength for many companies hurt by the domestic economy has been the continued growth of foreign economies. How much of your success was due to foreign sales or investments?

A: We have transcribers in India who handle about 15 percent of the business. But our customers are in the continental United States.

The transcription industry in this country has inadequate staffing or capacity. We have a quickly aging population and as a result we can't handle all the required work. Out of necessity as well as for efficiency [we outsourced to India].

Q: Even if the economy does not sink into a technical recession, analysts see slow growth and weakness ahead for an extended period. What is your forecast, or guidance, for the economy and especially the sectors that most affect your business?

A: We don't give guidance as such but we tell our investors we would expect to grow the company by 20 to 25 percent on the revenue line. We can grow the bottom line at a faster rate than that because of improving margins. We will also contemplate growing the bottom line faster through acquisitions.

Q: What's on the horizon for your company that you can talk about, such as an acquisition, stock offering or buyback, new products, expansion.

A: We are right in the middle of the medical crisis. The electronic record is coming fast now — an electronic record that is available to the patient and the doctor. We [handle] 30 to 40 percent of that record automatically. One of the big cornerstones in the industry is the more efficient use of information, which reduces the redundancy of tests and other inefficiencies in health care that are related to turnaround time in hospitals. The patient is discharged from the hospital and that discharge summary may become the admission summary next time around, or maybe to a nursing home where the information is relevant.

Q: Will the computer eventually take over the job of the transcriber?

A: A big share will be done by computer, but we still have language and speech that will always be a requirement of the medical specialty to edit. The computer can help the transcriber do more. And this is a good career opportunity. These people work from home. They are in total control of their work. We have 1,000 domestic transcribers and 600 in India.

–Tom Walker