PRESS RELEASE

DALLAS, November 6, 2002 – SOURCECORP^TM (Nasdaq: SRCP), one of the nation’s leading providers of business process outsourcing solutions, today reported 2002 third quarter diluted earnings per share of $.44 with revenue of $107.5 million, in line with the financial guidance provided by the Company in August.

Ed H. Bowman, Jr., President and CEO of SOURCECORP said, “The Company’s overall business and financial results continued to improve sequentially during the third quarter. Revenue increased by approximately 1.6 percent, compared with the Company’s revenue for the second quarter of 2002. The Company’s revenue mix for the quarter reflected continued increases from its Legal Claims Administration business compared to the most recent three quarters, in addition to increases from its Legal Consulting Services segment. The Company produced strong cash flow results and reduced its outstanding debt balance during the quarter.”

During the third quarter, the Company closed sales anticipated to produce total revenue of approximately $47.4 million, including amounts expected to be recognized in future years. These new sales included six large sales, each for more than $1 million in total expected revenue, five of which were with new customers. Mr. Bowman added, “These third quarter new business results represented a significant increase over our second quarter results, as expected. Year-to-date, we have added approximately $118 million in new business sales, which give us additional revenue visibility into 2003 and beyond.”

The Company produced cash flow from operations of $19.6 million for the third quarter of 2002, a sequential increase of 54 percent from the second quarter of 2002. Days sales outstanding during the third quarter declined sequentially by 3 business days to 49 business days, within the Company’s expected range for the quarter. As of September 30, the Company’s debt to total capital ratio was 25 percent and the outstanding balance on the Company’s credit facility was $100.5 million.

The following statements are based on current expectations and do not include the potential impact of any future acquisitions. These statements are forward-looking, and actual results may differ materially. Please refer to the cautionary language included in this press release when considering this information.

This guidance is based upon a number of key business factors, which include the timing and volume of customer projects, particularly with Legal Claims; continued ramp-up of transaction volumes with the Company’s newer large business process outsourcing contracts; continuing volumes at expected levels with existing business process outsourcing engagements; and continued funding for existing state and local government outsourcing engagements. The range of earnings per share guidance reflects an expected increase in the effective tax rate from 38% to 40% beginning in 2003, based upon preliminary analysis to be completed during the first quarter of 2003.

SOURCECORP, Incorporated is a leading provider of value-added business process outsourcing solutions to clients nationwide. SOURCECORP targets information intensive, technology oriented, application driven industry segments, such as healthcare, legal, financial services and government, leveraging its expertise and experience in business processes for these and other similar business profiles. Headquartered in Dallas, the Company employs approximately 9,000 people and operates in over 40 states, Washington D.C., Puerto Rico, and Mexico.

SOURCECORP is a component of both the S&P SmallCap 600 Index and the Russell 2000 Index. In June 2001, the Company was cited among the Top 100 Hot Growth Companies by BusinessWeek magazine. SOURCECORP has previously been recognized twice by Forbes magazine as one of the 200 Best Small Companies, based on return equity, sales growth, and EPS growth, and by FORTUNE magazine as one of America’s 100 Fastest Growing Public Companies. For more information about SOURCECORP’s solutions, including case-study examples, visit the SOURCECORP website at www.srcp.com.

The statements in this press release, which are not historical fact, are forward-looking statements that involve risks and uncertainties, which could cause actual results to differ materially from such forward-looking statements. These forward-looking statements include, but are not limited to, any financial estimates and projections included in this press release and the Company disclaims any intention or obligation to update or revise such estimates or forecasts, except as required by law. The aforementioned risks and uncertainties include, but are not limited to, the risks of integrating our operating companies, of managing our rapid growth, of the timing and magnitude of technological advances, of the occurrences of future events that could diminish our existing customers’ needs for our services, of a change in the degree to which companies continue to outsource business processes, as well as the risks detailed in SOURCECORP’s filings with the Securities and Exchange Commission, including without limitation, those detailed under the heading “Risk Factors” in the company’s most recent annual report on Form 10-K. SOURCECORP disclaims any intention or obligation to revise any forward-looking statements, including financial estimates, whether as a result of new information, future events, or otherwise, except as required by law.

	Three Months Ended
	September 30, 2002		June 30, 2002
	(Unaudited)
	Actual		Actual
Total Revenue	$	107,465	$	105,787
Cost of Services		64,683		63,332
Depreciation		3,578		3,644

Gross Profit		39,204		38,811
SG&A		25,154		24,754
Amortization		89		89

Operating Income		13,961		13,968
Other (income) expense		1,602		1,863

Income before income taxes		12,359		12,105
Provision for income taxes		4,696		4,600

Net Income	$	7,663	$	7,505


Weighted Avg. Shares
Basic		17,358		17,304
Diluted		17,369		17,887

Earnings Per Share
Basic	$	0.44	$	0.43

Diluted	$	0.44	$	0.42

	Three Months Ended September 30,
	2002		2001
	(Unaudited)
	Actual		Pro-Forma (1),(2)
Total Revenue	$	107,465	$	105,150
Cost of Services		64,683		60,628
Depreciation		3,578		3,010

Gross Profit		39,204		41,512
SG&A		25,154		23,110
Amortization		89		—	(2)

Operating Income		13,961		18,402
Other (income) expense		1,602		2,260

Income before income taxes		12,359		16,142
Provision for income taxes		4,696		5,892	(2)

Net Income	$	7,663	$	10,250


Weighted Avg. Shares
Basic		17,358		16,969
Diluted		17,369		17,779

Earnings Per Share
Basic	$	0.44	$	0.60	(2)

Diluted	$	0.44	$	0.58	(2)

Operating results for 2001 include the following pro-forma adjustments in order to improve year-over-year comparability. Refer to SOURCECORP’s Form 8-K filed with the Securities and Exchange Commission on May 9, 2002 for further explanation and disclosure of pro-forma adjustments.

Effective January 1, 2002, the Company adopted SFAS No. 142, “Goodwill and Other Intangible Assets”. SFAS No. 142 discontinues amortization expense of goodwill and other intangible assets with indefinite useful lives on a prospective basis. For the three months ended September 30, 2001, goodwill amortization of $2,445 and the related tax benefit of $687 have been excluded for comparative purposes.

	Nine Months Ended
	September 30, 2002		September 30, 2001
	(Unaudited)
	Actual		Pro-Forma (1),(2)
Total Revenue	$	316,536	$	319,253
Cost of Services		190,216		183,445
Depreciation		10,672		9,646

Gross Profit		115,648		126,162
SG&A		76,182		68,123
Amortization		267		—	(2)

Operating Income		39,199		58,039
Other (income) expense		5,052		7,127

Income before income taxes		34,147		50,912
Provision for income taxes		12,976		18,583	(2)

Net Income	$	21,171	$	32,329


Weighted Avg. Shares
Basic		17,319		16,569
Diluted		17,688		17,352

Earnings Per Share
Basic	$	1.22	$	1.95	(2)

Diluted	$	1.20	$	1.86	(2)

Effective January 1, 2002, the Company adopted SFAS No. 142, “Goodwill and Other Intangible Assets”. SFAS No. 142 discontinues amortization expense of goodwill and other intangible assets with indefinite useful lives on a prospective basis. For the nine months ended September 30, 2001, goodwill amortization of $6,735 and the related tax benefit of $1,795 have been excluded for comparative purposes.

ASSETS	September 30, 2002			December 31, 2001
	(Unaudited)
CURRENT ASSETS
Cash	$	5,976		$	7,182
Accounts receivable (net)		87,486			88,547
Deferred tax asset		9,834			9,805
Other current		7,000			8,999

Total current assets		110,296			114,533

Property, plant & equipment (net)		40,862			41,942
Goodwill and other intangibles (net)		319,205			298,519
Other noncurrent		9,255			8,077

Total Assets	$	479,618		$	463,071


LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	67,471		$	51,087
Current maturities of long-term obligations		208			324
Income taxes payable, current and deferred		107			4,588

Total current liabilities		67,786			55,999

Long-term debt		100,310			116,055
Deferred taxes and other long-term liabilities		15,112			19,844

Total Liabilities		183,208			191,898

STOCKHOLDERS’ EQUITY
Common stock		176			174
Additional paid-in-capital		207,538			204,086
Treasury stock		(982	)		(982	)
Other Comprehensive Income		(630	)		(1,242	)
Retained earnings		90,308			69,137

Total stockholders’ equity		296,410			271,173

Total liabilities and stockholders’ equity	$	479,618		$	463,071

	Nine Months Ended September 30,
	2002			2001
	(Unaudited)
Net Income (loss)	$	21,171		$	(22,473	)

Adjustments to reconcile net income (loss) to cash provided by operating activities

Special Charges		—			62,584
Depreciation and amortization		10,939			18,709
Deferred tax provision (benefit)		6,512			(5,059	)
Loss on sale of property, plant, and equipment		242			—
Changes in working capital		4,171			(15,517	)


Net cash provided by operating activities		43,035			38,244

Net cash used for investing activities		(28,053	)		(54,263	)

Net cash (used for) provided by financing activities		(16,188	)		12,269


Net decrease in cash and cash equivalents		(1,206	)		(3,750	)

Cash and cash equivalents, beginning of period		7,182			9,504


Cash and cash equivalents, end of period	$	5,976		$	5,754

	Q3 2002		Q2 2002		Change
Revenue	$	107.5	$	105.8	1.6	%
Operating Income	$	14.0	$	14.0	0	%
Net Income	$	7.7	$	7.5	2.7	%
Diluted EPS	$	.44	$	.42	4.8	%