Conversion Services International Outlines Blueprint For Growth

—Increased Focus on Higher Margin Business Intelligence/Data Warehousing, Strategic Consulting, Customer Experience Offerings—

EAST HANOVER, N.J. (December 5, 2007)-- Conversion Services International, Inc. (AMEX: CVN), a premier professional services firm focused on business intelligence and business process optimization solutions to Global 2000 organizations and other businesses, today outlined its strategic plans for 2008, its “Blueprint for Growth ’08.”

Scott Newman, president and CEO of Conversion Services International, said, “We anticipate 2008 to be a positive year for CSI.  With the success of our cost containment and expense reduction efforts to date, we are pursuing an aggressive blueprint for growth in 2008.  Among these plans are increased activities focused on higher margin business opportunities, increased sales team efforts, continued cost-containment efforts, and a continued search for synergistic and accretive acquisitions.

“We expect to finish 2007 on a positive trajectory from the perspective of reduced losses and the expectation of new financing. Subsequent to the restructuring of our business intelligence line of business in 2006, we have been working to rebuild this line of business during the current year.  In the third quarter 2007, our revenues in this line of business showed an increase in revenue and margin over both the second quarter 2007 and third quarter 2006, reflecting increasing activity both year-to-year and in sequential quarters. Our restructuring efforts have also shown positive results by reducing operating expenses year-to-date for the nine months ending September 2007 by approximately $1.5 million or 17.7% compared to the same period in 2006. We also successfully increased funding for the organization, allowing us to accelerate our growth plans. The company appears to be well positioned in the marketplace; we are receiving positive feedback on our proposals which should result in a growing pipeline of future work.  In 2008, we intend to intensify our ongoing efforts at delivering both value to shareholders and exceptional service to our customers.

“Experience over the past several quarters has proved our highest margin offerings are our business intelligence and data warehousing, strategic consulting, and business process reengineering lines of business.  In addition, we are putting substantial effort into our ‘Customer Experience-Based Process Improvement’ offering which was launched this fall.  At the same time, we are scaling back — and even eliminating — some of our lower margin services.  The result is a company holistically focused on business intelligence and business process optimization directly supporting the correlation between the need for trusted information and the ability to leverage that information to improve and enhance our clients’ business model.

“CSI recently reported that it has signed an agreement to receive between $4.3 and $5.0 million in a financing transaction which is expected to be completed prior to the end of 2007. A portion of these funds are expected to be used to fund some of the 2008 growth initiatives, including an increase in the sales team by 60 percent over the next year and more frequent marketing outreach and seminars and ‘webinars’ to increase CSI's visibility in the marketplace. Key points in this more aggressive sales effort are lead generation programs, as well as activities targeted toward inclusion on more approved-vendor lists with various companies. In 2007, we have increased the number of companies where CSI is an approved vendor,  CSI has recently achieved preferred status with several companies. The expansion of the sales team in 2008 should allow us to more aggressively pursue opportunities with these companies.

“As we increase the sales team headcount with a goal to increase revenues, we anticipate a need to increase the recruiting staff to support the additional efforts.  Nevertheless, we intend continually to monitor expenses as we strive to expand our customer base and grow revenues.  For example, in third quarter 2007, we saw a marked improvement in operating expenses, which fell 35% as compared to the same period in the prior year. 

“At the same time, we believe that our industry is destined to further consolidate as the economic conditions become more challenging.  In addition to pursuing continued organic growth, synergistic and accretive acquisitions will again figure prominently in our business activities in the coming year.  We are confident that acquisitions offer us opportunities to realize economies of scale that we currently cannot, and we believe that buying the right company at the right price and retaining the right people will bring us rapid rewards.”

About Conversion Services International, Inc.

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