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DCAP Group, Inc. (NASDAQ:DCAP) provided a year-end update of its
business. “This has been a difficult year for
DCAP and its shareholders and franchisees,”
said Barry Goldstein, Chairman and CEO of DCAP. “I
want to take this opportunity to thank all that have tried so hard this
year, particularly our staff and the franchisees,”
Mr. Goldstein continued. Mr. Goldstein then provided the following short
summary of the current status of each of DCAP’s
business units:
DCAP Agencies-Our store count totals 71 owned and franchised
locations as of today. Almost without exception, revenues by location
has declined from 2006. Direct writers such as GEICO have continued to
build their market share, taking from both independent agent carriers as
well as captive underwriters. In the past, our carrier partners stood
behind DCAP, and for good reason, as we delivered exceptional results,
both in terms of size and profitability. For some, this is no longer the
case and we are forced to consider alternate relationships.
During the fourth quarter, we developed a television advertising
campaign “Good
Decision”, geared towards attracting
attention to our stores. All costs associated with the production and
display of the ads will be expensed in the fourth quarter. This will
result in an unfavorable comparison of the 2007 fourth quarter to that
of 2006.
Premium Finance-We recently signed a letter of intent to sell our
loan portfolio to another finance company. Pursuant to the letter of
intent, which is subject to the execution of a definitive agreement, we
would continue to originate loans from our company-owned stores and
franchise locations as well as from the non-affiliated agencies with
which we currently deal, but instead of retaining the loans and earning
interest and fee income, and incurring all the operating expenses
associated, we would receive a fee based upon the amount of business
generated during the term of the agreement.
Commercial Mutual Insurance Company-We are pleased to report that
the process of converting CMIC to a stock property and casualty
insurance company is proceeding. We hope that the process will conclude
in the spring of 2008; however, there are still a number of regulatory,
legal and corporate steps remaining to be dealt with. In the event the
conversion occurs, we may be able to convert the CMIC surplus notes that
we hold into a controlling equity interest in CMIC. In such event, it is
anticipated that additional capital would be contributed by DCAP to
CMIC, which would allow it to continue its organic growth, as well as to
reduce its dependence on quota share reinsurance.
About DCAP Group
DCAP Group, Inc. owns and operates the largest chain of independent
storefront insurance agencies in the Northeast. Through DCAP Insurance,
Barry Scott Insurance, Atlantic Insurance Agency and Accurate Agency,
DCAP Group provides automobile insurance (and to a lesser extent,
motorcycle and homeowners), enhanced by complimentary premium financing
capabilities, to retail customers in New York and Pennsylvania. Other
products include automobile club service for roadside emergencies and
income tax preparation services. As of December 21, 2007, DCAP had 71
owned or franchised storefront locations.
Forward Looking Statements
Statements in this press release may contain “forward-looking
statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. All statements, other than
statements of historical facts, may be forward-looking statements. These
statements are based on management’s current
expectations and are subject to uncertainty and changes in
circumstances. These statements involve risks and uncertainties that
could cause actual results to differ materially from those included in
forward-looking statements due to a variety of factors. More information
about these factors can be found in DCAP’s
latest Annual Report filed with Securities and Exchange Commission under
Form 10-KSB. The company undertakes no obligation to publicly update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise.