eAutoclaims, Inc. Reports Third Quarter 2006 Financial Results

OLDSMAR, FL, June 15, 2006 /PRNewswire-FirstCall/ -- eAutoclaims (OTC Bulletin Board: EACC - News), a leading provider of managed collision repair services and insurance claims processing technology applications, today announced financial results for the third quarter and nine months ending April 30, 2006 for fiscal year 2006.

Total revenue for the three-months ended April 30, 2006, was nearly $4.0 million, representing over an 11% increase from the $3.6 million reported for the same period of 2005. Total revenue, excluding gain on the sale of the building of approximately $757 thousand, for the nine-months ended April 30, 2006 was $11.4 million, compared to $11.2 million for the nine-months ended April 30, 2005.

Collision repair management revenue for the three-months ended April 30, 2006, was $3.0 million, which is a 9% increase compared to $2.8 million for the three-months ended April 30, 2005. Collision management revenues decreased to $8.4 million for the nine-months ended April 30, 2006 from $8.8 million for the same period of 2005. The increase in revenue for the three months just ended is a combination of increased shop utilization of our network shops by consumers associated with our core clients, as well as increased revenue earned from repairs processed for clients acquired as a result of the ADP Co-Marketing Agreement. As previously stated in other releases, this revenue is recorded at net, which significantly reduces the amount of gross revenue reported, although the overall gross margin is increased as a result of not having to pay the shops for the work performed. During the nine and three-months ended April 30, 2006 we earned over $490,000 and $241,000, respectively, in net revenue from clients acquired as a result of the agreement with ADP.

The Company's overall gross margin has grown from 24% during the nine-months ending April 30, 2005, to a current gross margin of 31% for the nine months ending April 30, 2006. This strong margin growth is a result of the Company changing its mix of product sales to concentrate on higher margin products.

eAutoclaims recognized a net loss for the three-months ended April 30, 2006 of approximately $826,000 compared to a net loss of approximately $774,000 for the three-month period ended April 30, 2005. Excluding one-time non-cash extraordinary charges of approximately $380,000 during the quarter, the loss from continuing operations would be approximately $446,000 compared to the $774,000 net loss for the same period last year, representing a 42% improvement. Net loss for the nine-months ended April 30, 2006 totaled approximately $1.3 million compared to a net loss of approximately $1.9 million for the same period of 2005. Included in the net loss number for the nine-months ended April 30, 2006 is a gain on the sale of the Oldsmar facility of approximately $757,000. These amounts include non-cash expenses of approximately $1.1 million and $526,000, respectively including depreciation charges, for the nine and three-months ended April 30, 2006 compared to $590,000 and $190,000 for the nine and three-months ended April 30, 2005.

The Company's balance sheet as of April 30, 2006 shows approximately $1.5 million in cash, which is an increase of approximately $1.2 million from fiscal year end July 31, 2005. The Company has a working capital deficiency of approximately $2.1 million compared to a deficiency of approximately $3.6 million as of April 30, 2005. The primary source of its working capital during the nine-months ended April 30, 2006 was from cash generated by operations and the sale of its Oldsmar facility, from which the Company netted over $800,000, and the exercise of outstanding warrants by current investors from which the Company netted approximately $1.7 million.

Eric Seidel, chief executive officer of EACC, commented, "We have shown continued improvement in both our top line growth and operating margins over the course of this quarter. The positive influence of our previously announced ADP/ co-marketing contracts are showing good results, while our direct sales channels are gaining momentum in the sales pipeline. Our overall margins continue to improve as a result of an increase in our higher margin product mix gaining penetration with existing customers. We have begun to feel the positive effects associated with the previously announced signed annual agreements. The rollout of Continental Casualty Company (CNA Insurance) that began in late July 2005 was completed during the third quarter of fiscal 2006 and the transition is gaining momentum in drive-in percentage. The second previously announced long-term contract we entered into with Safe Auto Insurance continues to use our shop network and services.

Seidel stated further, "While we have focused much of our efforts over the past eighteen-months on the building of clients through the ADP Co-Marketing Agreement for our Collision Management product, we continue to market our services to the insurance industry through our direct sales channel efforts. The new client previously mentioned last quarter has entered into an annual contract. They are testing our product in a district office, utilizing our network of shops and traditional eJusterSuite product, which continues to show very positive results. As previously mentioned, should this testing continue to yield such results, the client has indicated they would likely roll the program out to other district offices over the course of the calendar year 2006. The potential sales volume and the full revenues of our direct sales channel model would make this account's contribution to profit the most material of all current clients under contract, including our clients from the ADP Co-Marketing Agreement."

"In May of 2006, ADP Claims Services Group was acquired by Solera, Inc., a privately held company, and a new firm, Audatex, was established as the operating entity for the organization. The transaction triggered two provisions of our previous Co-Marketing Agreement with ADP. Thus we had the right to terminate our exclusivity clause allowing us to Co-Market our product suite with other companies, and secondly the need for EACC to grant consent to ADP for assignment of our Co-Marketing agreement to another organization, which we declined. Both of these provisions were time sensitive per the Co-Marketing Agreement. As a result, EACC took these actions in an effort to evaluate the strategic direction of Audatex and the ROI to eAutoclaims as part of their future plans. We remain prudent with the expansion of our business via new and existing industry partners, and third party carriers. We are confident of our long-term business prospects for the remainder of 2006 and the future. We anticipate continued growth from our previously announced annual agreements as a result of our relationship with ADP, while we continue to add additional high margin revenue streams via our ASP platform. We continue to explore opportunities within collision management and other closely related industry to expand our customer base and create additional revenues, thus enhancing top and bottom line growth," concluded Seidel.

Conference Call Schedule

The conference call will take place at 4:15 p.m. Eastern, on Monday, June 19, 2006. Anyone interested in participating should call 1-800-811-0667 if calling within the United States or 1-913-981-4901 if calling internationally approximately 5 to 10 minutes prior to 4:15 p.m. There will be a playback available until June 27, 2006. To listen to the playback, please call 1-888-203-1112 if calling within the United States or 1-719-457-0820 if calling internationally. Please use the pass code 4998365 for replay.

This call is being webcast by ViaVid Broadcasting and can be accessed at eAutoclaims' website at www.eautoclaims.com . The webcast may also be accessed at ViaVid's website at www.viavid.net. The webcast can be accessed through September 30, 2006 on either site.