Interstate National Dealer Services Announces Q2 Fiscal 2001 Results

    MITCHEL FIELD, N.Y.--Sept. 14, 2001--Interstate National Dealer Services, Inc. today announced its third quarter results for the period ended July 31, 2001.
    Revenues for the three months ended July 31, 2001 were $16,821,849, compared to $16,825,617 for the same period a year earlier. Income from continuing operations for the three months ended July 31, 2001 was $639,861, or $0.15 per share on 4,225,785 diluted weighted average shares outstanding, compared to income from continuing operations of $837,548, or $0.18 per share on 4,610,770 diluted weighted average shares outstanding for the comparable period a year earlier.
    Revenues for the nine months ended July 31, 2001 were $44,439,460 compared to $45,405,405 for the nine months ended July 31, 2000. Income from continuing operations for the nine months ended July 31, 2001 was $1,829,735 or $0.42 per share on 4,316,548 diluted weighted average shares outstanding, compared to income from continuing operations of $2,232,018, or $0.47 per share on 4,785,301 diluted weighted average shares outstanding for the nine months ended July 31, 2000.
    Mr. Chester J. Luby, Chairman and CEO, stated, "We are encouraged that in a very difficult economic environment we were able to maintain revenues at last year's level. Selling, general and administrative expenses are being closely monitored and as a percent of revenues were lower than the second quarter at 43.3% compared to 45.8%. We continue to focus on improving operating margins and overall profitability."
    "The Company's balance sheet continues to strengthen with cash and investments at a record level of $69.8 million compared to $66.8 million in the second quarter and $62.8 million at the end of fiscal 2000. Book value as of July 31, 2001 was $5.39," noted Mr. Luby.
    Interstate is a leading nationwide provider of service contracts and extended warranties, primarily for new and used cars and recreational vehicles, as well as watercraft, manufactured housing, motorcycles and other power sport vehicles. For additional information please visit our websites: http://www.inds.com and http://www.warrantydirect.com.

      INTERSTATE NATIONAL DEALER SERVICES, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF OPERATIONS
                               UNAUDITED


                         For the Three Months     For the Nine Months
                            Ended July 31,           Ended July 31,
                          2001         2000         2001         2000

REVENUES           $16,821,849  $16,825,617  $44,439,460  $45,405,405
Net Income            $639,861     $532,486   $1,829,735   $1,428,772

NET INCOME PER SHARE -- BASIC:
Continuing operations     $.16         $.19         $.44         $.48
Discontinued operations    $(-)       $(.07)         $(-)       $(.17)

Total                     $.16         $.12         $.44         $.31

Weighted average
 shares outstanding  4,055,877    4,458,829    4,140,494    4,604,280

NET INCOME PER SHARE -- DILUTED:
Continuing operations     $.15         $.18         $.42         $.47
Discontinued operations    $(-)       $(.07)         $(-)       $(.17)

Total                     $.15         $.11         $.42         $.30

Weighted average
 shares outstanding  4,225,785    4,610,770    4,316,548    4,785,301

CONSOLIDATED BALANCE SHEETS

                                      July 31,           October 31, 
                                        2001                2000
                                      Unaudited

Cash and investments                 $69,823,510        $62,825,533
Total Assets                          86,582,382         79,784,928
Total stockholders' equity            21,395,262         20,800,567