PHOENIX, Nov. 13, 2000 (PRIMEZONE) -- Frontier Adjusters of America, Inc. ("the Company") (AMEX:FAJ), a nationwide franchisor and licensor of claims adjusters, reported that although revenue decreased, net income increased for the first quarter of fiscal 2001.
For the three months ended Sept. 30, 2000, revenue was $1,595,000, down $81,000, or 4.8%, from $1,676,000 in the same period of the prior year. Net income increased $110,000, or 30.0%, to $477,000, or $.05 per share, this quarter compared to $367,000, or $.04 per share, in the same quarter of the prior fiscal year. Gross billings of franchisees and licensees increased to $12,058,000 in the first quarter of 2001 from $11,882,000 in the same period of the previous year.
The largest item impacting net income this quarter is a $208,000 decrease in compensation and fringe benefits from $586,000 in the three months ended Sept. 30, 1999 to $378,000 in the current quarter. A portion of this decrease relates to the absence of compensation paid to an executive officer who resigned in January 2000. This decrease is also due to the adjusters employed by the Company who are compensated by a commission-based program rather than a fixed salary. As the adjusting fees in the Company-owned adjusting offices decrease, the wages paid to these adjusters also decrease. Furthermore, during the prior fiscal year, the Company modified its retirement program and implemented a performance-based compensation program, resulting in a net decrease in expenses in these plans of $60,000 for the current quarter as compared to the same quarter of the prior year.
Net income was also affected by an $81,000 decrease in revenue. While the Company's revenue from continuing licensee and franchisee fees increased $77,000, or 5.9% from $1,313,000 in the three months ended Sept. 30, 1999 to $1,390,000 in the current quarter, revenue from adjusting and risk management fees declined $158,000, or 43.5%, from $363,000 in the three months ended Sept. 30, 1999 to $205,000 in the current quarter. 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 690 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 future 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 SUBISIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
9/30/00 9/30/99
Gross Billings of Licensees $ 12,058,000 $ 11,882,000
Revenue 1,594,665 1,676,064
Income from Operations 676,408 552,906
Income before Taxes 740,045 583,929
Net Income 476,996 367,332
Net Income per Common Share:
Basic and Diluted $ .05 $ .04
Weighted Average Shares Outstanding:
Basic and Diluted 8,957,660 8,957,560
CONTACT: Frontier Adjusters of America, Inc.
Laurel A. Park, Controller
(602) 264-1061