November 13, 2006
DCAP Reports Third Quarter and Year To Date 2006 Results
DCAP REPORTS THIRD QUARTER AND YEAR TO DATE 2006 RESULTS
Hewlett, New York—November 13, 2006—DCAP Group, Inc. (NASDAQ: DCAP), the largest chain of independent storefront insurance brokerages in the Northeast, today reported financial results for the third quarter and nine months of 2006. Third quarter net income increased 41% over the prior year amount. Diluted earnings per share grew 33% to $0.04 from $0.03 in the third quarter of 2005. Nine month results show a decline in net income of 16%, and nine month diluted earnings per share declined to $.17 from $.20. Since September 30, 2005 our book value has grown by 7%, to $2.07 from $1.94.
Key Events during 2006 to Date
• Commenced Internet marketing and quoting efforts; retained consultant to guide, measure and manage the effort
• Began the transition from our long-time proprietary management and comparative rating systems to industry standard products
• Acquired the surplus notes of Commercial Mutual Insurance Company
• Restructured loan facility with M & T Bank reducing costs and providing source of funds for expansion
"Retail shopping habits have changed, and that includes the purchase of insurance. Shoppers are using the Internet when convenient for them, thus making the brick and mortar only approach very much old school. Retailers need to be more accessible to their customers, and the Internet makes that achievable. Using the Internet for exploring and getting educated before making a purchase has become the norm. Internet quoting is a major growth space for the independent broker, and we are seeking to capitalize on that," said Barry Goldstein, DCAP Chairman and CEO.
"Most people end their purchase from the direct writers only after speaking with someone at a remote call center. At DCAP, we too are also using the Internet to locate prospects and give them quotes, but our approach is different," Mr. Goldstein continued. "We offer a choice to all our clients and prospects, not so with the direct writers who only sell a house brand. We are not beholden to any one company. We prepare a set of quotes that gives the customer a choice, and while we are extremely sensitive to price, we explain the other factors involved in buying a policy. In addition to offering a choice of carriers, we provide the client with the ability to visit one of our many offices and sit down with a professional who works for the client and not the carrier."
"Beginning in the fourth quarter, we commenced our long planned Internet efforts. On-line quotes go direct to our offices in real time, allowing for a quick response and personal and professional contact with the client. To give the best set of quotes, we need to ask additional questions, and that can be done, in person, on the phone or over the Internet; it's the client's choice. In the end, we present a set of custom tailored, professionally prepared quotes, all meeting the individual needs of the customer," Mr. Goldstein stated.
"Our business is done in association with producer-based companies, who pay commissions to their producers. The streetwise licensed professionals in the DCAP family of companies protect their carriers. As producers, we are on the front line of underwriting, and perhaps the most important tool for the carrier. There have been numerous times when seemingly smart companies went into the non-standard market unprepared to handle the differing needs of the non-standard client, and often these carriers left licking their wounds. The underwriting results from the direct writers' recent incursion into non-standard market are yet to be seen, and trying to navigate these inner-city waters with a lizard instead of an experienced producer will likely end as it has so many times before," Mr. Goldstein stated.
About DCAP Group
DCAP Group, Inc. owns and operates the largest chain of independent storefront insurance brokerages 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, New Jersey, and Pennsylvania. Other products include automobile club service for roadside emergencies and income tax preparation services. As of November 13, 2006, 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 on 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.