eAutoclaims Becomes Profitable in February

March 17, 2003

Florida-based eAutoclaims, Inc., which provides online claims management solutions for the auto industry through both an application services provider (ASP) and outsourcing services, achieved profitability during February of 2003, the first month of its third fiscal quarter.

According to president and CEO Eric Seidel, “As a result of cost cutting measures and discontinuing unprofitable business relationships, eAutoclaims earned net profits of approximately $69,000 during February and earnings of approximately $110,000 on a cash basis or before interest, taxes, depreciation and amortization or EBITDA.” Seidel added that based on the current customer base and the rate at which customers have ramped up their use of eAutoclaims’ services, he anticipates the company will be able to sustain its profitable performance throughout the third quarter, but stated there were no guarantees of future performance.

Seidel commented, “We have covered more ground with less people because of better utilization of our technology and discontinuing unprofitable partnerships and customer relationships. While the latter added to a small dip in our period over period revenues, we plan to focus our marketing efforts on our newer and more profitable services to customers, so future business has a greater impact on the bottom line of earning verses the top line of sales revenues. However, there are no guarantees of future performances.”

EACC recently filed its 10Q with the SEC for the second quarter ending in January 2003. The trend from fiscal first quarter ending October 2002 to fiscal second quarter ending January 2003 showed an improvement on net operating results by 39 percent, with a net loss of $537,658 verses $876,852, and an improvement on EBITDA of 47 percent and cash losses of $341,486 verses $639,288.

Total revenues for the second quarter of fiscal 2003 were $7,834,573 versus $8,481,094 in the period ended Jan. 31, 2002, a decrease of 7.6 percent. The decrease in revenue Net loss for the second quarter was $537,658 compared with $508,468 in the prior comparable period. Net loss per share was $0.03 for the period versus $0.04 per share in the quarter ended Jan. 31, 2002. The weighted-average shares outstanding basic and diluted for the quarter was 19,562,796 compared to 13,280,782 in the prior comparable period.

For the six months ended Jan. 31, 2003 total revenues were $15,999,399 compared to total revenues of $16,172,015 for the six months ended Jan. 31, 2002, a decrease of 1.1 percent. Net loss for the six-month period was $1,414,510 versus a net loss of $1,846,796 for the six months ended Jan. 31, 2002. Net loss per share was $0.08 versus $0.18 per share for the prior comparable period. The number of weighted-average shares outstanding for the quarter was 19,172,565 compared to 12,769,285 in the prior period.

Seidel added that, “Since we announced our restructuring in the fall of 2002 we have cut $130,000 in monthly costs or $1.56M annually on a permanent basis. These past months have seen the company reshape itself, both in terms of management structure and product focus. While we have turned the corner based on these most recent results, our management team remains committed to diligently managing costs going forward and remaining focused on growing its sales of higher margin product mix.”

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