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First Priority Group, Inc. Reports 1998 Revenue Gain

14 April 1999

First Priority Group, Inc. Reports 1998 Revenue Gain

    PLAINVIEW, N.Y., April 14 -- FIRST PRIORITY GROUP, INC.
experienced a gain in revenues in 1998, as its
substantial and continuing investments in preparing for growth began to bear
fruit.
    In reporting results for the year ended December 31, 1998, FPG said
revenues increased from $13,559,000 in 1997 to $14,558,000, a gain of more
than 7%. The Company is a leading provider of sophisticated collision
claims-handling and other services for corporations that self-insure their
auto fleets, for insurance companies and for individual members of affinity
groups.
    FPG Chairman and Chief Executive Officer Barry Siegel said that gross
profit rose approximately 6% during 1998, but that operating expenses
increased at a faster rate, as the Company invested in talented staff, new
electronic and computer systems, and Year 2000 compliance consulting to
prepare for expected growth in 1999. As a result, FPG recorded a loss of
$2,004,000, or $.24 per share, for 1998. In 1997, with fewer shares
outstanding, the Company reported a loss of $1,731,000, or $.27 per share.
    Siegel said that aggressive cost-reduction programs, including salary cuts
for executives, were put in place late in the fourth quarter and early in the
first quarter of 1999. First quarter results, while not yet final, should show
dramatic progress as a result of this cost cutting and accelerating revenue
growth.
    Meanwhile, he said, the Company has undergone an important strategic shift
in direction.
    "During 1998, we took a hard look at the merits of extending our very
successful collision claims-handling operation into actual ownership of large,
highly efficient collision repair centers, to which we could provide
business," Siegel said. "Further study, along with the current experience of
the rapidly consolidating collision repair industry, convinced us that it
would be a mistake. The business is too capital-intensive and wouldn't make
the best use of the real strengths we have developed in claims-handling.
    "So we shifted our focus to concentrate on finding ways to streamline and
improve the claims process, not only for the insurer and fleet operator but
most importantly, for the driver whose car is out of commission. We expect to
have some exciting news to report shortly."
    FIRST PRIORITY GROUP, INC. is primarily engaged directly and through its
wholly owned subsidiaries in nationwide managed auto care services for
self-insured corporate fleets, insurance companies, members of affinity groups
and consumers.
    Certain information contained herein includes information that is forward-
looking. The matters referred to in forward-looking statements may be affected
by the risks and uncertainties involved in the Company's business. These
forward-looking statements are qualified in their entirety by the cautionary
statements contained in the Company's Securities and Exchange Commission
filings.