Interstate National Dealer Services, Inc. Announces Second Quarter Fiscal 2002 Results

    MITCHEL FIELD, N.Y.--May 31, 2002--Interstate National Dealer Services, Inc. today announced its second quarter results for the period ended April 30, 2002.
    Revenues for the three months ended April 30, 2002 of $14,705,519 were primarily the same as revenues of $14,739,473 for the same period a year earlier. Net income for the three months ended April 30, 2002 was $120,088, or $0.03 per share on 4,065,742 diluted weighted average shares outstanding, compared to net income of $870,359, or $.20 per share on 4,317,446 diluted weighted average shares outstanding, for the comparable period a year earlier.
    Revenues for the six months ended April 30, 2002 increased approximately 4% to $28,666,218, compared to $27,617,611 for the same period a year earlier. Net income for the six months ended April 30, 2002 was $465,471, or $0.11 per share on 4,076,473 diluted weighted average shares outstanding, compared to net income of $1,189,874, or $.27 per share on 4,362,631 diluted weighted average shares outstanding, for the comparable period a year earlier.
    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.

    This press release contains forward-looking statements, which are subject to risks and uncertainties. Such statements are based on assumptions and expectations which may not be realized and are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events and actual results, financial and otherwise, may differ from the results discussed in the forward-looking statements. A number of these risks and other factors that might cause differences, some of which could be material, along with additional discussion of forward-looking statements, are set forth in the Company's Report on Form 8-K filed with the Securities and Exchange Commission on December 23, 1996.

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



                      For the Three Months      For the Six Months 
                    ------------------------  ------------------------
                          Ended April 30,          Ended April 30,
                          ---------------          ---------------

                        2002         2001         2002         2001
                        ----         ----         ----         ----

REVENUES            $14,705,519  $14,739,473  $28,666,218  $27,617,611

NET INCOME              120,088      870,359      465,471    1,189,874

NET INCOME PER SHARE:

 Basic              $       .03  $       .21  $       .12  $       .28
 Weighted average 
  shares outstanding  3,963,078    4,171,283    3,965,300    4,183,503

 Diluted            $       .03  $       .20  $       .11  $       .27
 Weighted average 
  shares outstanding  4,065,742    4,317,446    4,076,473    4,362,631


                      CONSOLIDATED BALANCE SHEETS


                               April 30, 2002        October 31, 2001
                               --------------        ----------------
                                  Unaudited
                                  ---------

Cash and investments             $71,812,232            $68,917,084

Total assets                      89,545,571             86,613,542

Total stockholders' equity        19,512,998             19,343,074