Telespectrum Worldwide Inc. Announces Results For Second Quarter Ended June 30, 2001, Revises Outlook For 2001, Amends Credit Agreement

King of Prussia, PA- August 20, 2001 - Telespectrum Worldwide Inc. (OTC: TLSP), today announced a consolidated second quarter net loss of $24.7 million or ($0.78) per share, compared to a net loss of $4.0 million, or ($.12) per share in the same period a year ago. The second quarter 2001 net loss includes a $20.3 million charge primarily comprised of a restructuring fee related to TeleSpectrum's amending and restating its credit agreement in April 2001. Consolidated revenue for the second quarter of 2001 was $57.5 million versus $79.3 million in revenue for the second quarter of 2000.

Earnings before interest, taxes, depreciation, amortization and charges for nonrecurring items (EBITDA) were $4.7 million for the second quarter of 2001 compared to $6.3 million in the same period a year ago.

J. Peter Pierce, Chairman and CEO commented, "We are pleased that EBITDA as a percentage of revenue continues to improve sequentially. The improvement in EBITDA as a percentage of revenue from the first quarter of 2001 highlights the progress I believe we are making in our cost reduction programs."

Pierce continued, "However, the current economic climate, our business fundamentals and factors specific to the teleservices industry continue to present challenges for TeleSpectrum, as evidenced by the revenue decline in the second quarter."

Outlook for Remainder of 2001

Given current economic conditions and their impact on the telemarketing industry, the Company estimates that revenues for the full year will fall between $225 million and $235 million, down from previously stated guidance. Additionally, the Company's financial condition has negatively impacted its ability to gain the level of new business previously expected earlier in the year. As a result of lower revenue expectations, EBITDA is estimated to be in the $16.5 million to $18.0 million range for the same time period.

Modification of Credit Agreement

Effective on July 31, 2001, TeleSpectrum and its bank group amended the Company's credit agreement to provide the Company with the option to defer additional interest payments through the end of 2001 and lower the financial covenant thresholds for revenue and EBITDA, taking into account the lowered expectations for the year.

In connection with this amendment, the Company is also required to implement an additional cost reduction program by the end of the third quarter of 2001, which is expected to provide $5 million in annual savings. The Company previously announced cost reduction initiatives expected to provide $20 million of annualized savings. Management estimates that $8.6 million in cost savings have been realized thus far in 2001. Through June 30, 2001, the Company has recognized restructuring charges of $4 million with respect to these initiatives.

Management believes that the credit agreement will need to be refinanced prior to its maturity date on July 1, 2002. Although the terms of any refinancing are not presently determinable, the refinancing could result in substantial dilution to the Company's current equity holders.

Conference Call

The Company will host a conference call regarding this release on Monday, August 20, 2001 at 11:00am Eastern time. The dial in number for the call is (212) 346-7495. The reservation number is 19497725. If you are unable to participate in the live call, a replay will be available until Wednesday, August 22, 2001 at 1:00pm Eastern time. The domestic replay number is (800) 633-8284 and the international number is (858) 812-6440. The reservation number is 19497725.