Claimsnet.com Reports Fiscal Year 2003 Results; Including the First
Annual Gross Profit in Company History; Conference Call Scheduled
Monday, March 29, 2004 DALLAS, March 26 /PRNewswire-FirstCall/ --
Claimsnet.com inc. (BULLETIN BOARD: CLAI) , a leading provider of
Internet-based business-to- business solutions for the healthcare
industry, today reported its results for fiscal 2003, which ended
December 31, 2003. For the year ended December 31, 2003, the
Company reported revenues of $652,000, a 41% decrease from the
$1,104,000 reported for fiscal 2002. Expenses decreased
significantly from the prior fiscal year. Cost of revenues were
$616,000 compared to $1,733,000, a 64% decrease. Research and
development expenses were $30,000, down 88% from the $252,000
reported in fiscal 2002. Selling, general and administrative
expenses of $1,412,000 were reported for 2003, representing a 39%
reduction from the $2,300,000 in fiscal 2002. The Company reported
a gross profit of $36,000 for the fiscal year of 2003, compared
with a gross loss in fiscal year 2002 of $(629,000). The loss from
operations for fiscal 2003 was $(1,406,000), a 60% decrease from
the loss of $(3,525,000), reported in fiscal 2002. The Company
recognized a $916,000 gain on negotiated settlement of liabilities
in fiscal year 2003. The net loss for fiscal year 2003 was
$(535,000), or $(.03) per share, compared to $(2,927,000), or
$(.24) per share, in the prior year, which included a $618,000 gain
on the sale of business assets. Subsequent to the issuance of the
Company's financial results for the quarters ended March 31, June
30, and September 30, 2003, the Company, after consultation with
its auditors, determined that certain implementation fees
previously reported as revenue during the quarters did not meet the
technical requirements to be treated as a separate unit of
accounting, as defined in the Emerging Issues Task Force Issue No.
00-21, Revenue Arrangements with Multiple Deliverables, and as
further clarified by Staff Accounting Bulleting No. 104, Revenue
Recognition, as issued by the SEC on December 17, 2003. As a
result, the implementation fees must be recognized as revenue
ratably over the expected period of the business arrangement.
Accordingly, the consolidated financial statements for the quarters
have been restated to defer implementation fees and recognize those
fees over the expected life of the customer arrangement. The
Company expenses costs related to implementation services as they
are incurred. Therefore, the quarterly net income (loss) changed by
the same amount as the net revenue deferral. The revenue
restatement also caused a restatement of deferred revenues on each
of the balance sheets. The restatement did not cause any change to
thereported balances of cash and accounts receivable. The
accompanying table sets forth the Company's restated selected
quarterly financial data (unaudited) along with comparative data
for the quarter ended December 31, 2003 (unaudited). "Our financial
results for fiscal 2003 and the fourth quarter of fiscal year 2003
reflect focus on expense control during a transitional year for the
Company," commented Don Crosbie, chief executive officer of
Claimsnet. "The majority of the financial progress reflected in our
improved operating results related to these expenses reductions but
in the third and fourth quarters our sales efforts resulted in more
than twenty new client contracts which are reflected on our balance
sheet as an increase in deferred revenue to be recognized in future
periods. The increase in contract signings and deferred revenue
along with the first gross profits in the history of the Company
gives confidence that our efforts to build the revenue, customer
base and partnerships is beginning to pay off." For the three
months ended December 31, 2003, the Company reported revenues of
$165,000, a 1% decrease from the revenues of $166,000 reported for
the fourth quarter of fiscal year 2002. Deferred revenues increased
343% to a balanceof $208,000 at December 31, 2003 from $47,000 at
December 31, 2002. Expenses for the quarter decreased significantly
from the year earlier period. Cost of revenues decreased 52% to
$127,000 in 2003 from $264,000 last year. Research and development
expenses were $6,000, a decrease of 73% compared to $22,000 in the
fourth quarter of the prior year. A $344,000 charge for impairment
of in-process software development was also recognized in the
fourth quarter of 2002. Selling, general and administrative
expenses of $287,000 this year represented a 52% decrease from the
$594,000 reported for the fourth quarter of 2002. The Company
reported its second consecutive quarterly gross profit in the
fourth quarter of 2003 totaling $38,000, compared with a gross loss
of $(98,000) in the fourth quarter of 2002. The fourth quarter loss
from operations was $(255,000), a decrease of 76% from the loss of
$(1,058,000) reported in the fourth quarter last year. The net loss
for the quarter was $(255,000), or $(.01) per share, as compared
with a net loss of $(1,063,000), or $(.08) per share, in the same
quarter last year, a reduction of 76%. Claimsnet.com inc. is a
leading provider of Internet-based claim processing solutions for
the healthcare payer industry, including distinctive, advanced ASP
technology. Headquartered in Dallas, Claimsnet offers systems that
are distinguished by ease of use, customer care, security and
measurable cost advantages. More information on Claimsnet can be
found at the Company's web site at http://www.claimsnet.com/ .
Claimsnet will host a conference call on Monday, March 29, 2004 at
11:00 Central Time. The telephone number for the conference call is
(800) 406-9170 for U.S. participants and (213) 596-1387 for callers
outside the U.S. The participant code is 2063880. During the call,
Mr. Crosbie will discuss the Company's 2003 financial results and
will also be available to answer questions. Investors may e-mail
questions in advance of the call to . Safe Harbor Statement Under
the Private Securities Litigation Act 1995 -- With the exception of
historical information, the matters discussed in this press release
are forward looking statements that involve a number of risks and
uncertainties. The actual future results of the company could
differ significantly from those statements. Factors that could
cause or contribute to such differences include, but are not
limited to, maintaining access to external sources of capital,
regulatory actions, success of marketing strategies, actions of the
Company's competitors, dependence on suppliers and distribution
channels, and continued use of the Internet. Further information on
the Company's risk factors is contained in the Company's quarterly,
annual, and other periodic reports as filed with the Securities and
Exchange Commission. [Tables to Follow] CLAIMSNET.COM INC. AND
SUBSIDIARIES SUMMARY OPERATIONS STATEMENT INFORMATION (In thousands
except per share data) Year Ended December 31, 2003 2002 REVENUES $
652 $ 1,104 COST OF REVENUES $ 616 $ 1,733 GROSS PROFIT (LOSS) $ 36
$ (629) RESEARCH AND DEVELOPMENT $ 30 $ 252 IMPAIRMENT OF
IN-PROCESS SOFTWARE DEVELOPMENT $ --- $ 344 SELLING, GENERAL AND
ADMINISTRATIVE $ 1,412 $ 2,300 LOSS FROM OPERATIONS $(1,406)
$(3,525) GAIN (LOSS) ON SALE OF BUSINESS ASSETS $ (27) $ 618 GAIN
ON NEGOTIATED SETTLEMENTS OF LIABILITIES $ 916 $ --- NET LOSS $
(535) $(2,927) NET LOSS PER COMMON SHARE - BASIC AND DILUTED $
(0.03) $ (0.24) WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC
AND DILUTED 19,101 12,241 CLAIMSNET.COM INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA (In thousands except per share
data) (Unaudited) Quarter Quarter Quarter Quarter Ended Ended Ended
Ended March 31, June 30, Sept. 30, Dec. 31, 2003 2003 2003 2003 As
Restated As Restated As Restated SELECTED BALANCE SHEET DATA:
DEFERRED REVENUES * $ 56 $ 64 $ 149 $ 208 ACCUMULATED DEFICIT *
(42,783) (42,392) (42,704) (42,959) CONDENSED STATEMENT OF
OPERATIONS DATA: REVENUES * $ 162 $ 168 $ 157 $ 165 COST OF
REVENUES 200 174 115 127 GROSS PROFIT (LOSS) * (38) (6) 42 38 TOTAL
OPERATING EXPENSES 321 510 318 293 LOSS FROM OPERATIONS * (359)
(516) (276) (255) GAIN ON SETTLEMENT OF LIABILITIES 4 912 --- ---
OTHER INCOME (EXPENSE), NET (4) (5) (36) --- NET INCOME (LOSS) * $
(359) $ 391 $ (312) $ (255) NET INCOME (LOSS) PER COMMON SHARE -
BASIC AND DILUTED * $ (0.02) $ 0.02 $ (0.02) $ (0.01) *Denotes an
item that has been restated for the interim quarters. DATASOURCE:
Claimsnet.com inc. CONTACT: Don Crosbie of Claimsnet.com inc.,
+1-972-458-1701, Ext. 112, or Web site: http://www.claimsnet.com/
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