View this article online: https://www.claimsjournal.com/news/southeast/2004/03/18/40241.htm
Florida-based eAutoclaims Inc., which provides online claims management for the auto insurance industry through both application services provider (ASP) and outsourcing solutions, recently announced a new co-marketing agreement with ADP Claims Service Group. The company issued guidance as a result of
its new strategic alliance agreement and other internal marketing programs that the company intends to roll out over the next 18 months.
The company expects to adopt a different revenue recognition policy on all new business generated from their co-marketing agreement with ADP Claims Services Group. The company will recognize only net revenue, after the cost of the repair, on all of the sales from this new co-marketing agreement. The difference in the revenue recognition policy is caused by the change in the
structure of the transaction under the agreement. This is mainly a result of ADP, not EACC, being obligated to pay the repair shop.
Therefore, while revenue per repair will be reduced, the margin percentage per repair will increase substantially. The company will continue to recognize gross repair revenue on all other sales, as the company has done historically.
According to Eric Seidel, president and CEO, “Starting in February, we have been investing heavily to increase our infrastructure and to scale-up our current staffing levels for the anticipated growth in business.”
Seidel continued, “In the short-term, this will have a negative impact on our quarterly numbers. However, while there is no guarantee, we expect to show impressive growth in both revenue and net income in fiscal 2005.” The company’s new fiscal year begins in August.
Under the adjusted financial model, inclusive of the ADP co-marketing business, the company expects to report revenues of $40 million and net profit of $2 million for the fiscal year ending July 31, 2005.
The company has also announced the expected expansion of their heavy equipment business in the coming year.
Seidel added, “We are excited about the expected growth in our heavy equipment business over the next 18 months. This is also considered in our numbers for next year. The new heavy equipment business is already beginning to grow.”