Frontier Adjusters Reports Results for Fourth Quarter and Full-Year of Fiscal 2001


PHOENIX, Sept. 17, 2001 (PRIMEZONE) -- Frontier Adjusters of America, Inc. ("Company") (AMEX:FAJ), a nationwide franchisor and licensor of claims adjusters, reported an increase in revenue and a decrease in net income for the fourth quarter, and a decrease in revenue and an increase in net income for the 12 months of its fiscal year ended June 30, 2001. The decrease in revenue and expenses is largely attributable to the sale of the Company-owned adjusting businesses.

For the three months ended June 30, 2001, revenue increased by $30,000, or 2%, from $1,532,000 in the previous year to $1,562,000. Gross billings of franchisees and licensees increased $1,406,000, or 12%, to $13,021,000 for the three months ended June 30, 2001, compared to $11,615,000 from the same period of the prior year. Net income decreased $151,000, or 41%, from $369,000, or $.04 per share, in the prior year to $218,000, or $.02 per share.

For the 12 months ended June 30, 2001, revenue decreased $73,000, or 1%, from $6,257,000 in the previous year to $6,184,000. For the 12 months ended June 30, 2001, gross billings of franchisees and licensees increased $2,600,000, or 6%, to $48,410,000 compared to $45,810,000 in the prior year. Net income increased $335,000, or 27%, from $1,240,000, or $.14 per share, to $1,575,000, or $.18 per share, in the current year.

The decrease in revenue is largely due to a decline in revenue in the Company's adjusting businesses in Phoenix and Las Vegas and the sale of these offices in the fourth quarter of the fiscal year. Prior to the sale, the Company received 100% of the revenue generated from these offices. As a result of the sale of these locations, the Company now receives the standard commission rate as licensee and franchisee fee revenue. Although adjusting revenue decreased by $458,000 compared to the prior year, the Company experienced an increase of $385,000 over the prior year in licensee and franchisee fees and a related decrease in expenses.

Although total revenue decreased, net income increased by 27% over the prior year. This increase is largely due to the $430,000 decrease in employee compensation and benefits as a result of a severance package paid to a former employee in fiscal 2000 and the reduction in compensation paid to adjusters in the Company-owned adjusting offices from decreased volume and the sale of the offices in the fourth quarter of fiscal 2001. Other notable differences in fiscal 2001 as compared to the prior year are a $44,000 decrease in service fees paid to United Financial Adjusting Company, the Company's former majority shareholder, a decrease of $89,000 in expenses other than compensation and service fees, and an increase of $39,000 in other income.

Frontier Adjusters of America, Inc. licenses and franchises independent claims adjusters throughout North America, with more than 680 advertised locations in 50 states, the District of Columbia and Canada.

From time to time, Frontier makes forward-looking statements in its public disclosures. This press release includes statements with respect to future operations that may constitute forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Important risks and uncertainties that could cause the Company's results to differ materially from those contained in such forward-looking statements are contained in the Company's filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K.


      FRONTIER ADJUSTERS OF AMERICA, INC. AND SUBSIDIARIES
           CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                            (Unaudited)


                      Three Months Ended       Twelve Months Ended 
                     6/30/01      6/30/00      6/30/01     6/30/00 
 
 Gross Billings
  of Licensees    $13,021,000  $11,615,000   $48,410,000  $45,810,000
 Revenue            1,561,676    1,531,742     6,183,842    6,256,896
 Income from
  Operations          352,309      571,946     2,373,337    1,882,482
 Income before
  Taxes               404,752      630,846     2,599,296    2,069,455
 Net Income           217,759      369,472     1,575,240    1,240,369
 Net Income per
  Common Share:
   Basic &
    Diluted       $       .02  $       .04   $       .18  $       .14
 Weighted 
  Average
  Shares
  Outstanding:
   Basic &
    Diluted         8,957,660    8,957,660     8,957,660    8,957,586


            

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