Net income for the first quarter of 2009 was $6.9 million, an increase of $11.3 million over the first quarter of 2008 when a loss of $4.4 million was reported. Earnings per share for the first quarter of 2009 were $0.18 per compared to a loss of $0.12 per share in the first quarter of 2008.

Adjusted EBITDA (operating income (loss) excluding depreciation, amortization of intangible assets, cost of Investigation and legal proceedings, net) increased 130% to $12.1 million for the first quarter of 2009 compared to $5.3 million for the first quarter of 2008.

Net revenues decreased $4.8 million or 5.7% to $78.9 million for the three months ended March 31, 2009 compared with $83.7 million for the three months ended March 31, 2008. The decrease was due primarily to lower medical transcription revenue of $4.5 million resulting from lower medical transcription volume.

Cost of revenues decreased $7.4 million or 12.1% to $53.9 million for the three months ended March 31, 2009 compared with $61.3 million for the three months ended March 31, 2008. This decrease was due to reduced medical transcription payroll cost of $3.0 million related directly to our increased use of speech recognition technology and $1.9 million related to lower medical transcription payroll cost related to the decrease in medical transcription volume. Additionally, costs decreased $1.6 million resulting from headcount reductions taken in 2008 to better align our operating expenses with our lower revenue levels.

Selling, general and administrative costs decreased $2.5 million or 19.2% to $10.6 million for the three months ended March 31, 2009 compared to $13.1 million for the three months ended March 31, 2008. The decrease was primarily due to lower audit costs and work force reductions taking effect in the first quarter of 2009.

Research and development costs decreased $1.7 million or 41.3% to $2.4 million for the three months ended March 31, 2009 compared with $4.1 million for the three months ended March 31, 2008. The decrease was due to lower compensation expense as a result of workforce reductions and an increase in capitalized software development costs.

As of March 31, 2009 the company had $51.9 million in cash compared to $39.9 million at December 31, 2008. The increase was a result of cash provided by operating activities in the amount of $14.1 million offset by cash used to purchase property and equipment of $1.4 million and capitalized software of $.8 million.

In addition to the United States generally accepted accounting principles, or GAAP, results provided throughout this document, MedQuist has provided a non-GAAP financial measurement. Management believes that the non-GAAP financial measures used to manage the business may provide users additional useful information. The table attached to this press release includes a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measure and a description of why the non-GAAP financial measures are useful to investors.

This report contains forward-looking statements that are based on current expectations, estimates, forecasts and projections about us, the industry in which we operate and other matters, as well as management's beliefs and assumptions and other statements regarding matters that are not historical facts. These statements include, in particular, statements about our plans, strategies and prospects. For example, when we use words such as "projects," "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "should," "would," "could," "will," "opportunity," "potential" or "may," variations of such words or other words that convey uncertainty of future events or outcomes, we are making forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are only predictions and, as such, are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. For a discussion of these risks, uncertainties and assumptions, any of which could cause our actual results to differ from those contained in the forward-looking statement, see the section of MedQuist's Annual Report on Form 10-K for the year ended December 31, 2008, entitled "Risk Factors" and discussions of potential risks and uncertainties in MedQuist's subsequent filings with the Securities and Exchange Commission.

                 MedQuist Inc.