medical billing transcription supplier information

MedQuist Inc. ("Company") announced today that it has acquired 100% of the outstanding shares of capital stock of Signal Transcription Network, Inc. ("Signal"). The Company will issue approximately 619 thousand shares of common stock and $1.5 million in cash in connection with the acquisition. The transaction is expected to be accounted for under the pooling-of-interests method.

David A. Cohen, Chairman and CEO of MedQuist said, "We are extremely excited about this acquisition, which is our second largest to date. Signal's business, with 1998 projected revenues of approximately $10 million based on first half 1998 run rate, will be immediately accretive to the Company's operating earnings (excluding one-time charges related to the transaction). Signal's customers include such prestigious institutions as Johns Hopkins Health System in Baltimore and University of Texas M.D. Anderson Cancer Center in Houston."

The Company also announced today that it has named John A. Donohoe, Jr. President of MedQuist. Mr. Donohoe has served as an employee of MedQuist and its predecessor companies for 27 years, most recently as Chief Operating Officer. Mr. Cohen said, "I am very pleased to promote John Donohoe to the position of President. John has worked in the medical transcription business with me for 27 years, and there is no one better qualified than John to help me lead the Company forward into the next century. John will retain his current operating responsibilities, and I will maintain my current active role in the business."

MedQuist is a leading national provider of electronic medical transcription and healthcare information management solutions.

Other than historical information set forth herein, this press release contains forward-looking statements which involve risks and uncertainties. The Company's actual results may differ materially from those anticipated or implied in any such forward-looking statements as a result of various risks, including, without limitation, inability to meet 1998 projected revenues; failure of acquisition to be accretive to Company's earnings; inability to integrate technology platforms into the Company's base business; inability to manage and maintain growth; inability to penetrate new markets; inability to make and successfully integrate acquisitions; decreased demand for existing products; and lack of a market for new products.