Dictaphone Healthcare Solutions Encouraged by Strong Performance, Solid Technology Portfolio.

Business Editors/Health & High-Tech Writers

MIAMI--(BW HealthWire)--Oct. 17, 2001

Dictaphone(R) Plans to Emerge From Chapter 11 as Independent Company

by Year's End

American Health Information Management Assoc. (AHIMA) Convention--Dictaphone Corporation ("Dictaphone"), a leader in dictation, transcription and patient information management solutions for the healthcare industry, expressed optimism over significant progress in its product portfolio, following an agreement among Lernout & Hauspie Speech Products N.V., ("L&H"), Dictaphone and their creditors that will allow Dictaphone to once again become an independent company.

The agreement, which is embodied in a plan of reorganization filed by Dictaphone in connection with it's chapter 11 case, calls for creditors to exchange debt for equity in the newly formed Dictaphone Corporation. Although there can not be assurances, Dictaphone expects to emerge from chapter 11 by close of 2001. Dictaphone, along with its parent, Lernout & Hauspie, has been operating under Chapter 11 protection since late last year.

"Dictaphone's continued growth and strong product position, particularly within our stable healthcare business, are very positive indicators of our future growth potential," said Rob Schwager, president and COO of Dictaphone. "We are experiencing very positive growth in all areas of our healthcare business, especially in new speech recognition solutions, where an exciting opportunity exists for our customers to remove substantial cost and time from the production of their patient records. And, after the transition, Dictaphone will be operating with very little debt, the lowest we've had, in fact, in more than five years, and with a very strong, comfortable capital structure." Schwager's remarks were made at the AHIMA Convention, where Dictaphone is showcasing its new speech recognition solutions among other technology.

Under L&H ownership, Dictaphone's cash flow has remained positive, while its R&D spending has doubled. In addition to significant new customer acquisitions, Dictaphone continues to derive a major portion of its revenue from stable, solid and annually recurring sources, including on-going service and support of its large and growing customer base.

Healthcare market group especially strong

Building upon its already strong hospital market share, Dictaphone's Healthcare Solutions Group (HSG) has continued to show positive sales of its flagship Enterprise Express(R) dictation, transcription and report management platform. With over 2,500 systems in place, the company continues to install more than 17 new enterprise-wide systems a month.

Speech recognition solutions gaining rapid acceptance

Dictaphone also said it is particularly encouraged by growth within its medical speech recognition solutions, which have demonstrated that there is considerable cost saving possible through reduced transcription keyboarding, and an opportunity to positively impact physician satisfaction and patient care through more rapid report completion.

Dictaphone has secured more than 45 new orders for its EXSpeech(TM) recognition platform since introduction several months ago. This recognition solution, which is integrated as part of the Enterprise Express system, offers the ability to accommodate physician practice patterns by allowing direct telephone input. Dictaphone has already documented significant productivity gain in user hospitals, and projects that customers will have the potential to fully recoup their system acquisition costs in under 24 months of use, through increased productivity gain, and reduced reliance on outside transcription services.

Radiologists continue also to embrace the PowerScribe(R)for Radiology system, with more than 45 new systems implemented so far in 2001. Recent additions to the Healthcare Solutions Group's list of more than 165 PowerScribe user hospitals and clinics, representing nearly 2,000 user "seats", include: Wyandotte Central/Henry Ford (Wyandotte, Mich.), Mills Peninsula (Burlingame, Calif.), V.A. Northport (Northport, N.Y.), Durham Regional/Duke (Durham, N.C.), Lourdes-Catholic Health (Bronxville, N.Y.), Pinnacle Health (Harrisburg, Pa.), Primary Children's-LDS (Salt Lake City), Fort. Sam Houston and Fort Gordon (Ft. Houston, Texas).

Rose Ann Webb, health information director at the Boca Raton Medical Center in Boca Raton, Fla., where a 15-member radiology staff prepares close to 300,000 reports each year, indicates that since the installation of PowerScribe in October 2000, the hospital has saved nearly $1 million dollars in transcription costs. "We've saved a tremendous amount of money. But more than that, it makes things go so much faster. You don't have to run around looking for information, it's just all right there," said Webb.

Dictaphone's Healthcare Solutions Group also makes progress in

penetrating outpatient markets

The ichart(TM) solution, Dictaphone's recently launched ASP (application service provider) suite of Internet-based dictation, transcription and related services, targeted at clinics and physician groups, is also gaining strong momentum, as indicated by the more than 2 million lines of dictation processed through Dictaphone's Internet Data Center per month. New ichart customers of note include Mt Kisco Medical Center, Pella Regional Health, Walter Reed Army Medical Center, and Insight Health Services Corp.

Pella Regional Health Center, in Pella, Iowa, is routing more than 70,000 lines of dictation a month through Dictaphone's ichart system, and using Dictaphone's transcription services for outsourced typing. Jeff Caracci, Pella's chief information officer, said: "As an ASP solution, Dictaphone's ichart moves us closer to our goal of creating an electronic patient record, while reducing Pella's capital investment and eliminating our exposure to technology obsolescence."

Looking Forward

"Today I can say the new Dictaphone will come through this process a stronger, more seasoned company," said Rob Schwager. "As one of the five oldest U.S. brands still in existence, Dictaphone is now entering what I believe will be one of our 100-plus-year-old company's most exciting periods of growth and innovation."

About Dictaphone Healthcare Solutions Group

Dictaphone Healthcare Solutions Group (HSG) currently deploys dictation, transcription and report management system solutions in some of the world's premier healthcare organizations.

Its solutions automate and integrate critical elements in the creation and management of health information, helping healthcare organizations improve productivity and the quality of patient care. Its flagship Enterprise Express(R) dictation, transcription and report management system is an integral part of the creation and flow of patient information in a substantial number of U.S. hospitals. It currently supports several hundred thousand physicians who use Dictaphone systems to generate an estimated one million reports and 100,000 hours of dictation a day. The company is also actively deploying its EXSpeech(TM) and PowerScribe(R) speech recognition solutions, designed to dramatically reduce transcription costs and speed report turnaround. Dictaphone HSG has also introduced the ichart(TM) family of Internet subscription-based solutions that integrate existing systems with new coding, natural language and data mining technologies, significantly reducing the costs of managing patient information. For sales and product information visit Dictaphone at www.dictaphone.com or call 888-350-4836.

The foregoing projections are "forward-looking" statements within the meaning of the Federal Securities Laws. Because such statements include risks and uncertainties, actual results may differ from the estimates provided. The company undertakes no duty to update such forward-looking statements. Factors that could cause actual results to differ from these forward looking statements include, but are not limited to, those disclosed previously and from time to time in the Company's public filings. In addition, readers are cautioned that forward looking statements include known and unknown risks, such as the uncertainties associated with the Company's recent Chapter 11 filings in the United States and the risk that newly introduced products may contain undetected errors or defects or otherwise not perform as anticipated.