PHOENIX, Feb. 5, 2001 (PRIMEZONE) -- Frontier Adjusters of America, Inc. ("the Company") (AMEX:FAJ), a nationwide franchisor and licensor of claims adjusters, reported an increase in net income for the second quarter and first half of its 2001 fiscal year.
For the three months ended December 31, 2000, net income increased $228,000 or 114.6% to $427,000 compared to $199,000 in the same period of the prior year. Revenue was $1,471,000, down $96,000 or 6.1% this quarter from $1,567,000 in the same quarter of the prior fiscal year. Earnings per share increased this quarter to $.05 per share from $.02 per share in the same period of the prior year. Gross billings of franchisees and licensees increased $55,000 to $11,228,000 in the second quarter of fiscal 2001 from $11,173,000 in the same period of the previous year.
For the six months ended December 31, 2000 net income increased $338,000 or 59.7% to $904,000 compared to $566,000 in the same period of the prior fiscal year. Revenue was $3,066,000, down $177,000 or 5.5% during the six months ended December 31, 2000 from $3,243,000 in the same period of the prior year. Earnings per share increased this period to $.10 per share from $.06 per share in the same period of the prior fiscal year. For the six months, gross billings of franchisees and licensees increased $231,000 or 1% to $23,286,000 compared to $23,055,000 in the prior year.
The largest item impacting net income during the six months ended December 31, 2000 was a $545,000 decrease in compensation and fringe benefits from $1,286,000 in the prior year to $741,000 in the current year. This decrease is the result of the absence of compensation paid to an executive officer who resigned in January 2000, a decrease in compensation paid to commission-based adjusters and the modifications made to the Company's retirement programs that reduced such expenses for the current fiscal year as compared to the prior year.
Net income was also affected by a $177,000 decrease in revenue. While the Company's revenue from continuing licensee and franchisee fees increased $89,000 or 3.4% from $2,586,000 in the six months ended December 31, 1999 to $2,675,000 in the current period, revenue from adjusting and risk management fees declined $266,000 or 40.5% from $657,000 in the six months ended December 31, 1999 to $391,000 in the current period. This decrease is due to lower volume in the Phoenix, Arizona and Las Vegas/Henderson, Nevada offices and the sale of the Tucson, Arizona office in January of 2000.
Frontier Adjusters of America, Inc. licenses and franchises independent claims adjusters throughout North America, with 685 advertised locations in 50 states, the District of Columbia and Canada. The Company also owns and operates independent insurance adjusting businesses in Arizona and Nevada.
From time to time, the Company makes forward-looking statements in its public disclosures. This press release includes statements with respect to the operations and expenditures of the Company that may constitute forward-looking statements made 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 Frontier's Annual Report on Form 10-K for the year ended June 30, 2000.
FRONTIER ADJUSTERS OF AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Six Months Ended
12/31/00 12/31/99 12/31/00 12/31/99
Gross Billings
of Licensees $11,228,000 $11,173,000 $23,286,000 $23,055,000
Revenue 1,471,297 1,566,992 3,065,962 3,243,056
Income from
Operations 672,667 289,886 1,349,075 842,792
Income before
Taxes 740,734 345,257 1,480,779 929,186
Net Income 426,891 199,068 903,887 566,400
Net Income per
Common Share:
Basic & Diluted $ .05 $ .02 $ .10 $ .06
Weighted
Average Shares
Outstanding:
Basic & Diluted 8,957,660 8,957,560 8,957,660 8,957,560