Organization Profile: driversshield.com (Nasdaq: DRVR)
19 January 2001
Organization Profile: driversshield.com (Nasdaq: DRVR)
driversshield.com Corporation: Profitable and Poised for Growth
PLAINVIEW, N.Y., Jan. 19 At a time when many high-tech
companies are gushing red ink, driversshield.com is making a
profit and is positioned for dramatic growth.
(Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/20010119/NYF001-a )
Plainview, New York-based driversshield.com provides auto insurers with a
proven, Internet-based system for managing collision repairs that not only
reduces costs but helps retain customers by completing repairs faster and
making the claims process more satisfactory.
Giving Insurers a Competitive Edge
Collision repairs cost drivers in North America some $30 billion a year,
the bulk of that sum paid for by insurance. In the saturated,
price-competitive auto insurance marketplace, insurers can gain market share
primarily by taking customers from others, which is expensive. Aside from
investment gains, they can increase profits only by adding customers, raising
premiums (which may cost market share) or by reducing costs. The
driversshield.com CRM (Customer Relationship Management) solution enables
insurers to compete more effectively by reducing claims costs, while helping
them keep the customers they have, a much less costly process than winning new
ones. All this contributes to the insurer's bottom line.
The driversshield.com CRM solution is designed to be easy for insurance
company agents or representatives to use but lets them handle all direct
customer contact. Nor does it require changes in the insurer's legacy systems
or procedures. The system combines driversshield.com's proprietary claims
management technology and state-of-the-art, interactive Web site with the
carefully established nationwide network of 2,400 quality repair shops and
cost-saving procedures developed over 17 years of managing collision repairs
for corporate and municipal auto fleets. No other Web-based system in the
marketplace delivers comparable benefits.
A major Midwest auto insurance company has successfully completed a pilot
test of the system and is preparing for a system-wide rollout this spring.
One of the nation's largest property and casualty insurers is beginning a
pilot program. Several other insurers have indicated interest in getting
started on the program as well.
Operating in the Black
Unlike many other technology companies, driversshield.com is profitable,
even though its insurance business has not yet begun to generate significant
revenue.
"For 2000, we expect our earnings will come in over $.02 per share," said
Barry Siegel, Chairman and Chief Executive Officer of the driversshield.com.
"That's a modest amount, but it's a huge turnaround from our losses of
$.24 per share two years ago and $.12 per share a year ago." The company has
10.5 million shares outstanding. "We also have no debt and, as of the end of
the fourth quarter, $l.7 million in the bank."
Siegel said the company was profitable in each of the year's first three
quarters and that earnings were anticipated to be in positive territory for
the fourth quarter as well.
Fleet Service and Affinity Subsidiaries Contribute
driversshield.com's profits, and most of the expense of the development
and ramp-up of its innovative solution for insurers, have been funded by
profits from the company's two other businesses -- its fleet business and its
affinity group business. Both have also contributed critical technology,
skills and experience to the insurance company business.
driversshield.com (formerly First Priority Group) has successfully managed
hundreds of thousands of collision claims, along with subrogation and salvage,
for many of America's largest and most prestigious corporations for the past
17 years. Current customers of driversshield.com FS (Fleet Service) include
AT&T, Hershey Foods, Coca-Cola, IBM, Cablevision and many other icons. The
company's repair network and cost-saving claims-handling procedures developed
from this profitable subsidiary.
The affinity business, driversshield.com ADS (Auto Discounts and
Services), wholesales the nation's finest auto club program to leading
financial institutions and membership organizations, which in turn market it
to their customers or members or use it as a customer/member retention tool.
In addition to discounts and services, the program provides a lifetime
warranty on collision repairs. A one-year free membership in the program,
including the lifetime warranty, is automatically included for customers of
insurance companies that use the driversshield.com system. Enrollment in the
program has grown rapidly over the past year, and already approaches 1 million
drivers as several large financial institutions and credit card issuers
prepare to launch major marketing initiatives in coming months.
An Attractive Business Model
driversshield.com developed its Web-based solution over the past three
years, testing various business models in the field. It found that insurers
were reluctant to allow a third party to manage the overall claims process or
have direct customer contact. But they welcomed an essentially invisible
(to the customer) system that could help them manage and accelerate the actual
repair, reduce costs and increase customer satisfaction. The lifetime
warranty and benefits of the discounts and services program enhance the
customer's perception of being well served by the insurer, thereby
dramatically improving customer loyalty.
The driversshield.com Web site enables the insurance company's
representative to make instant arrangements for repairs and a rental car, if
needed, when a customer calls to report an accident. Through a quick visit to
the Web site, both representative and customer can subsequently check the
progress of the repair, even accessing photos, 24 hours a day, seven days a
week.
driversshield.com has recently established an exclusive partnership with
Scene Genesis, Inc. that allows repair shops that are part of the network to
create and permanently store files comprising estimates, records and digital
images of each repair.
BARRY SIEGEL
Chairman, Chief Executive Officer and Founder of driversshield.com
Mr. Siegel founded driversshield.com, formerly known as First Priority
Group, in 1984 with the vision of making the Company the best fleet service
organization in the U.S. He observed that relatively few new ideas and
advances had occurred in a marketplace that appeared to have significant
growth potential. Initially, the Company had extremely limited resources,
operated without computers, and offered only mechanical repairs for the Avis
and Hertz organizations' warranty programs. Over time, Mr. Siegel expanded
his team and created one of the largest contracted auto repair vendor networks
in the U.S., providing many types of vehicle services in virtually every city
throughout America, while at the same time developing systems and methods that
changed the way these services are delivered.
In 1986, the Company went public and raised $1.2 million. With what would
ordinarily be considered a very small sum of seed capital, the business
developed into a company that had sales of approximately $14 million in 2000,
is profitable and has no debt. The proprietary software, systems and
procedures the Company developed over the years for managing claims and
repairs became -- and remain -- the backbone of its outstanding ability to
serve its customers. In 1995 the Company was named one of America's finest
service companies by Inc. Magazine and MCI in a national competition. In a
study conducted by Ernst & Young, it was determined that the Company's
services far exceeded Ernst & Young's "Gold" standard of performance --
further evidence of outstanding achievement.
Today driversshield.com is known for providing the highest level of
service available in the managed auto care industry including mechanical,
collision, subrogation, and salvage, and has a client list that reads like a
Who's Who of corporate America. Such clients as IBM, Time Warner, Hershey
Foods, Lucent Technologies and many more of the nation's finest organizations
have all made long-term commitments naming the Company as their sole source
for specialized claims and managed auto care services.
Mr. Siegel gained his auto industry expertise as an executive in the
franchised auto repair center business and is the former Director of Franchise
Sales for Gibraltar Transmissions. His responsibilities there encompassed
everything from locating sites to finding and evaluating franchise prospects,
assessing their ability to manage and, for those who passed muster, selling
them a franchise. During his first few years in the franchised auto repair
industry, he was a national trouble shooter and sales specialist, with the
primary objective of helping franchisees increase their profits and customer
satisfaction while improving their internal operations. As franchise
director, he opened a new franchise every few weeks and handled all resales.
This grassroots and nationwide experience later proved invaluable in building
driversshield.com.
In late 1997 and early 1998, Mr. Siegel personally garnered and handled a
series of private placements for the Company, raising almost $6 million in
private funding. By avoiding finder's fees he maximized the amount available
to the Company.
As driversshield.com moves forward, Mr. Siegel will continue to deal with
the public marketplace and focus on furthering the Company's vision and plans,
as well as raising any additional necessary capital. He will also seek
acquisitions and mergers of synergistic businesses, and will handle hiring of
additional key executive personnel.