Claimsnet.com Posts First Annual Gross Profit in Company History

Dallas-based Claimsnet.com inc., a provider of Internet-based business-to-business solutions for the healthcare industry, reported its results for fiscal 2003, which ended Dec. 31, 2003.

For the year ended Dec. 31, 2003, the company reported revenues of $652,000, a 41% decrease from the $1,104,000 reported for fiscal 2002.

Expenses decreased significantly from the prior fiscal year. Cost of
revenues were $616,000 compared to $1,733,000, a 64% decrease. Research and development expenses were $30,000, down 88% from the $252,000 reported in fiscal 2002. Selling, general and administrative expenses of $1,412,000 were reported for 2003, representing a 39% reduction from the $2,300,000 in fiscal
2002.

The company reported a gross profit of $36,000 for the fiscal year of
2003, compared with a gross loss in fiscal year 2002 of $(629,000). The loss from operations for fiscal 2003 was $(1,406,000), a 60% decrease from the loss of $(3,525,000), reported in fiscal 2002.

The company recognized a $916,000 gain on negotiated settlement of liabilities in fiscal year 2003. The net loss for fiscal year 2003 was $(535,000), or $(.03) per share, compared to
$(2,927,000), or $(.24) per share, in the prior year, which included a
$618,000 gain on the sale of business assets.

“Our financial results for fiscal 2003 and the fourth quarter of fiscal
year 2003 reflect focus on expense control during a transitional year for the company,” commented Don Crosbie, CEO of Claimsnet. “The majority of the financial progress reflected in our improved operating results related to these expenses reductions but in the third and fourth quarters our sales efforts resulted in more than twenty new client contracts which are reflected on our balance sheet as an increase in deferred revenue to be recognized in future periods. The increase in contract signings and deferred revenue along with the first gross profits in the history of the company gives confidence that our efforts to build the revenue, customer base and partnerships is beginning to pay off.”