Exhibit 99.1
For more information, please contact:
Don Crosbie
(972) 458-1701 Ext. 112 dcrosbie@claimsnet.com
FOR IMMEDIATE RELEASE:
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, 2004 - Claimsnet.com inc. (OTCBB: CLAI.OB), 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 the reported
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 balance of
$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 www.claimsnet.com.
- more -
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 dcrosbie@claimsnet.com.
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 Ended Quarter Ended Quarter Ended Quarter Ended
March 31, June 30, September 30, December 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.
###