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Letter to the Editor

eAutoclaims.com Loss Figures Improve in Q3; Hires Asgard to Provide Network Security and Intrusion Monitoring

eAutoclaims, Inc., which provides online claims management solutions for the auto insurance industry through both an applications services provider (ASP) and outsourcing services, announced financial results for its third fiscal quarter ended April 30, 2002.

Total revenues for the third quarter were $8,049,466 versus $6,679,358 in the period ended April 30, 2001, an increase of 21 percent. Net loss for the period ended April 30, 2002 was $875,907 compared with $4,474,438 in the prior comparable period, an 80 percent decrease. The losses for both periods reflect several non-cash items. Non-cash expenses created approximately $196,000 and $3,910,000 of losses in these periods, respectively. Net loss per share was $0.06 for the period versus $0.40 per share in the quarter ended April 30, 2001. The weighted-average shares outstanding basic and diluted for the quarter was 15,520,183 compared to 11,236,149 in the prior comparable period.

For the nine-month period ended April 30, 2002, total revenues were $24,221,481 versus $13,833,481 in the comparable nine-months ended April 30, 2001, an increase of 75 percent. Net loss for the most recent nine-month period was $2,722,703, compared with a loss of $6,100,830 in the prior year-ago period, a 55 percent decrease. The losses for both periods reflect several non-cash items. Non-cash expenses created approximately $1,100,000 and $4,300,000 of losses in these periods, respectively. Net loss per share for the period decreased to $0.24 from $0.87 per share in the nine-months ended April 30, 2001. The weighted average shares outstanding for the nine-months ended April 30, 2002 was 13,666,098 compared with 11,189,990 in the prior comparable period.

Eric Seidel, president and chief executive officer, commented, "We are pleased to report solid top-line growth, quarter over quarter. As expected, our collision repair management revenues continue to drive our growth, up 31 percent compared with last year's third quarter, and up 96 percent for the nine-month period versus last year. Also noteworthy is the growth in our fee and other revenue, with increases of 110 percent and 143 percent for the three and nine-month periods, respectively. Moving forward, this revenue stream, which includes 'click fees' that we earn from our service partners and clients, will allow us to improve our operating margins."

Seidel said that the company's recently released ASP solution, eJusterSuite(TM), has been well received. "Our eJusterSuite(TM) has been widely accepted by our clients and is already providing eAutoclaims with added 'click fee' revenue."

Seidel added, "It is important to note that, while we were impacted by the difficulties experienced by one of our largest customers during the quarter, increased utilization by our current and new clients enabled EACC to partially offset that reduced revenue and post a strong quarter.

"We are poised for a strong finish to fiscal 2002," Seidel concluded, "and remain on-track to achieve profitability from operations during the fourth quarter."

In other news, Asgard Group, a Florida- based network security company, has been hired by eAutoclaims.com to provide network security and access monitoring. The announcement was made by Christopher Day, co-founder of Asgard.

Asgard protects computer networks against intrusion from hackers and other unauthorized outside parties across the Internet using a process called AsgardAssure Intrusion Management that includes complete system analysis, hardening with firewalls and virus protection, and 24x7 network access monitoring to instantly identify unauthorized network access and block attacks.

Asgard's service for eAutoclaims.com includes the preparation of a complete assessment of the current security system in place, hardening of the network with the use of proprietary security hardware and software, and 24x7 monitoring and tracking of all network traffic in and out of the eAutoclaims.com network.

"As a large, Web-based business, it is vital that eAutoclaims.com maintain the highest level of security possible to best service their customers," said Day. "Our comprehensive security plan for eAutoclaims.com will ensure that they are protected against even the most advanced hacker attacks and viruses."

eAutoclaims.com maintains a national network of more than 3,500 auto repair shops and 5,000 auto glass vendors for use by the insurance industry. Agents use the company's web-based claim management system.

"Adding to our existing network security is always a priority at eAutoclaims. It's important to ensure that we are available around-the-clock to service our customers. Asgard's network security services satisfy that need for additional protection," said Dave Mattingly, vice-president of Information Technology for eAutoclaims.com. "The possible damage caused by viruses such as 'Nimda' and hacker attacks are something we are always protecting against, so we have hired Asgard as an important proactive measure to fortify our network security defenses."

©2002 Collision Repair Industry INSIGHT
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