DCAP Furnishes Year-End Update
December 21 2007 - 11:00AM
Business Wire
DCAP Group, Inc. (NASDAQ:DCAP) provided a year-end update of its
business. �This has been a difficult year for DCAP and its
shareholders and franchisees,� said Barry Goldstein, Chairman and
CEO of DCAP. �I want to take this opportunity to thank all that
have tried so hard this year, particularly our staff and the
franchisees,� Mr. Goldstein continued. Mr. Goldstein then provided
the following short summary of the current status of each of DCAP�s
business units: DCAP Agencies-Our store count totals 71 owned and
franchised locations as of today. Almost without exception,
revenues by location has declined from 2006. Direct writers such as
GEICO have continued to build their market share, taking from both
independent agent carriers as well as captive underwriters. In the
past, our carrier partners stood behind DCAP, and for good reason,
as we delivered exceptional results, both in terms of size and
profitability. For some, this is no longer the case and we are
forced to consider alternate relationships. During the fourth
quarter, we developed a television advertising campaign �Good
Decision�, geared towards attracting attention to our stores. All
costs associated with the production and display of the ads will be
expensed in the fourth quarter. This will result in an unfavorable
comparison of the 2007 fourth quarter to that of 2006. Premium
Finance-We recently signed a letter of intent to sell our loan
portfolio to another finance company. Pursuant to the letter of
intent, which is subject to the execution of a definitive
agreement, we would continue to originate loans from our
company-owned stores and franchise locations as well as from the
non-affiliated agencies with which we currently deal, but instead
of retaining the loans and earning interest and fee income, and
incurring all the operating expenses associated, we would receive a
fee based upon the amount of business generated during the term of
the agreement. Commercial Mutual Insurance Company-We are pleased
to report that the process of converting CMIC to a stock property
and casualty insurance company is proceeding. We hope that the
process will conclude in the spring of 2008; however, there are
still a number of regulatory, legal and corporate steps remaining
to be dealt with. In the event the conversion occurs, we may be
able to convert the CMIC surplus notes that we hold into a
controlling equity interest in CMIC. In such event, it is
anticipated that additional capital would be contributed by DCAP to
CMIC, which would allow it to continue its organic growth, as well
as to reduce its dependence on quota share reinsurance. 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 and Pennsylvania. Other products include automobile
club service for roadside emergencies and income tax preparation
services. As of December 21, 2007, 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 under 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.
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