Strong Second Quarter Revenue Gain for driversshield.com Corp.; Modest Profit Excluding Non-Cash Charge

PLAINVIEW, N.Y., Aug. 14 driversshield.com. Corp. reported today that revenues continued
their strong growth in the second quarter and that the Company was modestly
profitable excluding a non-cash special charge of $246,000. Revenues for the
quarter ended June 30, 2001, rose from $3,411,000 in the second quarter of
last year to $4,043,000, a gain of 19% on continuing growth in
driversshield.com's fleet service operations. For the first half of 2001,
revenues were $8,469,000, up 27% from $6,652,000 in the year-earlier period.
Absent certain non-cash charges, the Company would have had net income of
$19,000 for the second quarter and $113,000 for the half. These special
charges stemmed from the 1999 re-pricing of stock options granted by the
Company, and, a non-cash charge involving the granting of a small number of
common shares. Barry Siegel, Chairman and Chief Executive Officer, noted that
the Company had continued to operate in the black, absent the special non-cash
charges, despite ongoing heavy investments in developing and marketing its
new, Internet-based CRM (customer relationship management) business for auto
insurance companies.
"We have put enormous effort and a lot of money into creating and
launching our CRM operation, including some $200,000 in extra sales and
marketing in this year's first two quarters alone," Siegel said. "We would
have reported a net profit of about $300,000 had we not had to take the
special, non-cash charges for the first half and had we chosen not to make
these expenditures for CRM marketing. "However we still believe that our
investment strategy in our CRM value proposition is the right thing for us to
be doing and we are totally committed to becoming the market leader in this
space.
"The solid growth and profitability of our fleet services and our ADS
businesses have enabled us to launch our CRM business without taking on debt
or depleting our cash reserves," Siegel said. "In fact, we continue to have
no debt and our cash and liquid investments has increased just under 30%, to
$2.3 million, compared with $1.8 million at the end of the first quarter."
Siegel said the CRM product, which streamlines the handling of collision
repairs, is an outgrowth of the auto collision management services the Company
has been providing to corporate and municipal fleets for 18 years. Clients of
the fleet business include some of America's largest and most prestigious
corporations. The automotive discounts and services programs created by the
driversshield.com ADS unit are marketed principally through financial
institutions and membership organizations, but are also a component of the new
CRM business, benefiting insured drivers whose autos are repaired using the
CRM solution.
Since its founding in 1983, driversshield.com has built a national
reputation for efficient, cost-saving management of collision claims for
self-insured corporate and municipal vehicle fleets through its subsidiary,
driversshield.com FS (Fleet Services). Clients include AT&T, CVS, Time Warner,
Lucent Technologies, Hershey Foods and other major national and international
companies. Through its affinity auto club programs, the Company has
established relationships with Assurant Group (part of the Fortis group), Aon,
Protective Life and other leading credit card, financial organizations and Web
sites. The Company decided early in 1999 to expand its long established auto
claims experience and proprietary systems by building a unique e-commerce
solution for insurance companies, the driversshield.com CRM business.
This announcement contains "forward-looking statements." Words
"anticipate," "believe," "estimate," "expect" and other similar expressions as
they relate to the Company and its management are intended to identify such
forward looking statements. Although the Company and its management believe
that the statements contained in this announcement are reasonable, it can give
no assurances that such statements will prove correct. Factors that could
affect the occurrence of events or results discussed herein are included with
those mentioned in the Company's filings with the Securities and Exchange
Commission.

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