PLAINVIEW, N.Y., Aug. 2 /PRNewswire/ -- First Priority Group, Inc. (Nasdaq: FPGP) reported today that solid revenue gains, coupled with continuing cost reduction efforts, resulted in a sharply narrowed loss for the quarter ended June 30, 1999.
Overall revenues for the quarter ended June 30, 1999 were $4,082,248, an increase of $330,571, or 8.8%, compared with the same period last year. The Company's principal operating subsidiary, National Fleet Service, showed a revenue increase of $508,000, or 15%, attributable primarily to the full roll- out of a major fleet contract initially announced last September. National Fleet Service manages collision claims, recovery and other services for self- insured corporate and municipal vehicle fleets.
The Affinity Services Division of driversshield.com Corporation, a wholly owned subsidiary of FPG, which wholesales its auto club discount and services program to financial institutions and membership organizations, reported that revenues for the second quarter of 1999, more than doubled compared with year- ago figures, rising 118%. This growth reflects the success of the Company's overall marketing strategy of partnering with strong industry participants.
The revenue gains in fleet operations and affinity programs more than offset the expected sharp revenue decline experienced in FPG's direct repair program (DRP) business, which is being phased out due to recognizing that the traditional industry approaches to these programs does not adequately serve the needs of insurance companies. It is anticipated that the Company's new subsidiary, driversshield.com, will meet the needs of insurance companies for nationwide collision repair management. DRP revenue fell by 81%, or $210,000, during the quarter.
FPG's loss of $123,204, or $.01 per share, for the quarter was well below its loss of $354,700, or $.04 per share, for the year-earlier quarter.
"We're pleased by the continuing improvement in our revenues and in our overall results, which are approaching break-even in spite of our continued heavy investment in our new Internet subsidiary, driversshield.com," said Barry Siegel, Chairman and Chief Executive of FPG.
Siegel said one of the world's best known companies in the field of electronic commerce is building the driversshield.com Web site, and that the site is already online with over 50 pages of content, available for insurance companies to view with a security password. driversshield.com is expected to begin serving insurers sometime in the fourth quarter, but marketing has already begun.
"We're very excited about the prospects of our affinity programs and the tremendous marketing partners we've teamed up with, and we will have more to report in coming weeks," said B.J. Spiegel, head of affinity services for driversshield.com.
driversshield.com is continuing its efforts to raise capital through a private placement. This process has taken a little longer than originally anticipated due to many positive additions and revisions in the Company's business plan. FPG merged its growing Affinity Services Division into driversshield.com, providing the new business with an immediate and expanding revenue source. It is anticipated that the private placement should be completed shortly. This is intended to fund a rapid roll-out and expansion of driversshield.com, although FPG will remain its majority owner.
Results for the first six months of 1999 reflected both the second-quarter acceleration in the Company's revenues and the continuing benefits of cost reduction efforts implemented late in 1998. Overall revenues for the first two quarters of 1999 were $7,661,000, 1.4% below the $7,769,000 recorded in the 1998 period. National Fleet Service's revenues were up just under 5% for the first six months of 1999, while the Affinity Services Division gained 83%. DRP revenues fell sharply, again as expected. The overall loss for the six months was $331,146, or $.04 per share, down from $629,896, or $.08 per share, in the 1998 period. Operating costs declined 15.9% for the quarter and 11.9% for the half, in spite of FPG's continuing investment in systems and staff for driversshield.com, Y2K compliance and a totally new accounting system. In addition to using Web and electronic commerce technology to manage auto collision repairs more efficiently for insurers, driversshield.com will also make the repair process easier and more convenient for drivers, and will provide them with discounts, warranties and other services.
Since its founding in 1983, FPG has built a national reputation for efficient, cost-saving management of collision claims for self-insured corporate and municipal vehicle fleets. Clients include Coca-Cola, Time Warner, IBM, The Hershey Company and many other prominent corporations. Through its affinity auto club programs, the Company has established relationships with American Bankers Insurance Group, Providian Bank and other prestigious credit card and financial organizations.
First Priority Group is primarily engaged directly and through its wholly owned subsidiaries in nationwide managed auto care services for self-insured corporate fleets, insurance companies, members of affinity groups and consumers.
Certain information contained herein includes information that is forward looking. The matters referred to in forward-looking statements may be affected by the risks and uncertainties involved in the Company's business. These forward-looking statements are qualified in their entirety by the cautionary statements contained in the Company's Securities and Exchange Commission filings.
