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 Q1 2009 compared to $5.3 million for the Q1 2008.
Net revenues 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 Q1 2009 compared with $61.3 million for the Q1 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. Further, 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 Q1 2009 compared to $13.1 million for the Q1 2008. The decrease was primarily due to lower audit costs and work force reductions taking effect in the Q1 2009.
Research and development costs decreased $1.7 million or 41.3% to $2.4 million for the Q1 2009 compared with $4.1 million for the Q1 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 with $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 $0.8 million.
