DCAP Reports Second Quarter and Year to Date 2006 Results
HEWLETT, N.Y.--Aug. 14, 2006--DCAP Group, Inc. , the largest chain of independent storefront insurance agencies in the Northeast, today reported financial results for the second quarter and six months of 2006. During the second quarter net income increased 25% over prior year amounts. Earnings per diluted share were $0.09 as compared to $0.08 in the second quarter of 2005. Our six month results show a decline in net income from 2005 of 21%, and six month earnings per diluted share declined to $.13 from $.17.Operating Highlights
2Q 2006 2Q 2005
--------------------- ---------------------
Commissions and Fees $1,860,052 $1,850,102
--------------------- ---------------------
Premium Finance Revenue 1,172,188 1,335,160
--------------------- ---------------------
Total Revenues 3,032,240 3,185,262
--------------------- ---------------------
Pretax Income 468,139 395,627
--------------------- ---------------------
Net Income 280,814 237,395
--------------------- ---------------------
Basic EPS 0.10 0.09
--------------------- ---------------------
Diluted EPS 0.09 0.08
--------------------- ---------------------
Basic Shares 2,896,024 2,726,899
--------------------- ---------------------
Diluted Shares 3,248,668 3,250,625
--------------------- ---------------------
Six months Six months
2006 2005
-------------------- ---------------------
Commissions and Fees $3,753,230 $3,638,169
-------------------- ---------------------
Premium Finance Revenue 2,146,701 2,755,166
-------------------- ---------------------
Total Revenues 5,899,931 6,393,335
-------------------- ---------------------
Pretax Income 679,323 893,324
-------------------- ---------------------
Net Income 407,594 536,014
-------------------- ---------------------
Basic EPS 0.14 0.20
-------------------- ---------------------
Diluted EPS 0.13 0.17
-------------------- ---------------------
Basic Shares 2,881,466 2,720,994
-------------------- ---------------------
Diluted Shares 3,243,846 3,272,325
-------------------- ---------------------
Key Events during 2006 to Date
-- Acquired the surplus notes of Commercial Mutual Insurance Company
-- Acquired Accurate Agency with four locations in Rochester, New York
-- Restructured loan facility with M & T Bank
-- Retained outside professionals to guide branding and marketing efforts
Commentary
"Our core business revolves around the placement of personal lines insurance by our franchises as well as our company-owned stores," said Barry Goldstein, DCAP CEO. "The cyclical nature of that marketplace is well documented. We find ourselves today in a different position than experienced in prior soft markets. Direct to consumer sales of insurance have increased, fueled by huge advertising budgets and this has reduced the agency system's share of the marketplace. The well capitalized captive-agent based companies have increased their ad spending as well, and have reduced their underwriting requirements, thus widening their prospective customer base and increasing the competition, particularly in the non-standard segment."
"While these are difficult times for us, we continue to seek change and innovation. We are making ourselves more accessible to our customers, by expanding from the traditional brick and mortar 9 to 5 approach. Our revamped internet presence will allow us to garner leads through Search Engine Marketing. We expect to soon introduce expanded hours of service, allowing us to quote those reaching us via a phone or click-through after-hours. This will also allow us to participate in a meaningful way in the purchased-leads arena. Both of these segments require real-time responses and we are making provisions to do just that," said Barry Lefkowitz, DCAP Vice President.
Further, to help and guide us in branding, marketing and advertising efforts, we retained the services of Scott Cooper Associates, a full service branding and marketing communications firm. Scott Cooper Associates has helped build and promote brands such as NEC America, Sprint and Chase Merchant Services.
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, New Jersey, and Pennsylvania. Other products include automobile club service for roadside emergencies and income tax preparation services. As of August 14, 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.