eAutoclaims Unveils Q3 Report

Florida-based eAutoclaims, a provider of managed collision repair
services and insurance claims processing technology applications,
announced financial results for the third quarter ending April 30, 2005 and nine months for fiscal year 2005.

Total revenue for the nine months ended April 30, 2005 was approximately $11.2 million, which is a 51 percent decrease from approximately $22.8 million of total revenue for the nine months ended April 30, 2004. Total revenue for the three months ended April 30, 2005 was approximately $3.6 million. This represents a 46 percent decrease from approximately $6.6 million of total revenue for three months ended April 30, 2004.

The change in the nine and three-month total revenue is the net effect of changes in collision repair revenue, glass repair revenue, fees, and other revenue, which is primarily the result of the loss of revenues from the company’s two largest clients over the previous year.

During the nine months ended April 30, 2005, the company derived 56% and 6% of its revenue from its two largest clients.
In October 2003, the company’s largest client announced that they were selling one half of their U.S. auto physical damage business to another insurance carrier.

As a result, eAutoclaims has experienced approximately a $2.3 million decrease from revenue from the three-month period ended April 30, 2004 to the same period in 2005, and approximately $7.6 million decrease in revenue from the nine-month period ended April 30, 2004 to the same period in 2005. The company also experienced a decrease in revenue from its second largest customer because of a change in their state’s legislation regarding a special type of insurance policy requiring a direct repair network.

eAutoclaims experienced approximately a $475,000 decrease in revenue from the three-month period ended April 30, 2004 to the
same period in 2005, and approximately $2.4 million decrease in revenue from the nine-month period ended April 30, 2004 to the same period in 2005.

Fees and other revenue decreased from $1.8 million to $1.6 million, or 15% for the nine months ended April 30, 2005 compared to the nine months ended April 30, 2004. The nine-month decrease is mainly a result of a reduction in file handling fees from the reduced collision repair management revenue, and was partially offset by an increase in the click fee revenue. Fees and other revenue for the three months ended April 30, 2005 of approximately $473,000 decreased $137,000 compared to the fee revenue of approximately $610,000 for the three months ended April 30, 2004.

Claims processing charges for the nine and three months ended April 30, 2005 was $8.6 million and $2.7 million, respectively. This was 77% and 76% of total revenue for the nine and three months ended April 30, 2005, compared to 82% for both the nine and three months ended April 30, 2004.

Claims processing charges include the costs of collision and glass repairs paid to repair shops within our repair shop network, as well as the cost of the estimating software sold to the company’s network of shops. The reduction in claims processing charges, as a percentage of total revenue is a result of the change in the percentage of revenue generated from higher margin products as well as the increased emphasis in click fees.

As revenues from customers generated by the ADP Co-Marketing Agreement grow, the margins will reportedly continue to increase. EACC believes that this positive trend will enable the company to return to profitability.