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First Priority Group Reports Expense Savings Helped Reduce First Quarter Loss

13 May 1999

First Priority Group Reports Expense Savings Helped Reduce First Quarter Loss

    PLAINVIEW, N.Y., May 12 -- First Priority Group, Inc.
reported today that cost reduction measures enabled it to
increase its gross profit and reduce its overall operating loss for
1999's first quarter, in spite of an unexpected decline in revenues.
    Revenues for the quarter ending March 31, 1999, were $3,578,606, down
$438,895, or 10.9%, compared to 1998 first quarter revenues of $4,017,501.
However, gross profit margin increased by 1.8% from 16.4% to 18.2% and the
Company used $77,359 less operating cash.  The revenue dip reflected a
nationwide decline in motor vehicle accident rates, adversely affecting the
Company's principal business, collision claims management for self-insured
fleet operators, in spite of adding new fleet customers.  The overall decline
in accident rates has been attributed to improved highway safety conditions,
safer vehicles, increased driver safety awareness, expanded defensive driving
education programs, and moderate weather conditions.
    FPG's loss of $207,942 for the quarter was well below its $275,196 loss in
the first quarter of 1998, and significantly below the quarterly losses
experienced throughout the rest of 1998.
    Barry Siegel, Chairman and Chief Executive Officer of FPG, said the
Company has been effective in reducing its expenses despite continued heavy
technology and human resources investments necessary to become Y2K compliant,
build advanced accounting and administrative systems, and prepare for the
launch of its new Internet-related business.
    "We are pleased with our progress," Siegel said.  "The senior executives
and I have made every effort to move the Company forward as fast as possible,
while preserving our much-needed cash.  We are close to completing our Y2K
compliance, and our upgrades to our Great Plains accounting software should be
completed in a few weeks, which will contribute to further cost savings.  The
Company remains debt-free and our future prospects are brighter than ever," he
said.
    "We anticipate a successful private placement for our new Internet
subsidiary, which has retained Fahnestock & Co. Inc.  We have already
determined that several of the senior members of FPG's staff, who have been
devoting almost all of their time to the development of our new Internet
subsidiary, will become full-time employees of the new entity once it is fully
funded," Siegel said.  "The funding that we anticipate will relieve FPG of the
burden of providing cash to develop this new business."
    Siegel added that FPG has recently been informed that at least one of its
large-scale affinity marketing programs has been receiving an overwhelmingly
good response from one of the Company's direct marketing partners.  "As the
initial responses are being tabulated, the results indicate that the program
is being positioned and accepted very well," he said.  "Should the trend
continue, it has the potential to add significant profitability to FPG's
bottom line in the near term, as this will be marketed to millions of
households in the coming months."
    First Priority Group 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.