-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GttOa/sANM7hypco92HtkAttwRewGx2/uZQjX2TaJJR2vP0U9HcujxFCZvBSXuD4 OQk5D2//mS/bM9gqgu5oOA== 0000950147-01-501361.txt : 20010808 0000950147-01-501361.hdr.sgml : 20010808 ACCESSION NUMBER: 0000950147-01-501361 CONFORMED SUBMISSION TYPE: SC 13E3/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20010807 GROUP MEMBERS: MERRYMEETING, INC. GROUP MEMBERS: MM MERGER CORPORATION SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: FRONTIER ADJUSTERS OF AMERICA INC CENTRAL INDEX KEY: 0000735349 STANDARD INDUSTRIAL CLASSIFICATION: PATENT OWNERS & LESSORS [6794] IRS NUMBER: 860477573 STATE OF INCORPORATION: AZ FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13E3/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-54917 FILM NUMBER: 1699297 BUSINESS ADDRESS: STREET 1: 45 E MONTEREY WAY STREET 2: STE 202 CITY: PHOENIX STATE: AZ ZIP: 85011 BUSINESS PHONE: 6022641061 MAIL ADDRESS: STREET 1: P O BOX 7610 CITY: PHOENIX STATE: AZ ZIP: 85011 FORMER COMPANY: FORMER CONFORMED NAME: FRONTIER FINANCIAL CORP /AZ DATE OF NAME CHANGE: 19861114 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: FRONTIER ADJUSTERS OF AMERICA INC CENTRAL INDEX KEY: 0000735349 STANDARD INDUSTRIAL CLASSIFICATION: PATENT OWNERS & LESSORS [6794] IRS NUMBER: 860477573 STATE OF INCORPORATION: AZ FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13E3/A BUSINESS ADDRESS: STREET 1: 45 E MONTEREY WAY STREET 2: STE 202 CITY: PHOENIX STATE: AZ ZIP: 85011 BUSINESS PHONE: 6022641061 MAIL ADDRESS: STREET 1: P O BOX 7610 CITY: PHOENIX STATE: AZ ZIP: 85011 FORMER COMPANY: FORMER CONFORMED NAME: FRONTIER FINANCIAL CORP /AZ DATE OF NAME CHANGE: 19861114 SC 13E3/A 1 e-7263.txt AMENDMENT NO. 2 TO SC 13E3/A FOR FAJA DATE FILED ______________, 2001 - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Schedule 13E-3 (Rule 13e-100) Transaction Statement Under Section 13(e) of the Securities Exchange Act of 1934 and Rule 13e-3 Thereunder (AMENDMENT NO. 2) Frontier Adjusters of America, Inc. (Name of the Issuer) Frontier Adjusters of America, Inc., Merrymeeting, Inc., MM Merger Corporation and John M. Davies (Name of Person(s) Filing Statement) Common Stock, par value $.01 per share (Title of Class of Securities) 359050-10-1 (CUSIP Number of Class of Securities) John M. Davies, Chairman of the Board Frontier Adjusters of America, Inc. 45 East Monterey Way Phoenix, Arizona 85012 (602) 264-1061 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of the Person(s) Filing Statement) Copies to: Sara R. Ziskin Gallagher & Kennedy, P.A. 2575 East Camelback Road Phoenix, Arizona 85016 (602) 530-8000 This statement is filed in connection with (check the appropriate box): (a) [X] The filing of solicitation materials or an information statement subject to Regulation 14A (ss.ss. 240.14a-1 through 240.14b-1), Regulation 14C (ss.ss. 240.14c-1 through 240.14c-101) or Rule 13e-3(c) (ss. 240.13e-3(c)) under the Securities Exchange Act of 1934, as amended (the "Act"). (b) [ ] The filing of a registration statement under the Securities Act of 1933. (c) [ ] A tender offer. (d) [ ] None of the above. Check the following box if the soliciting materials or information statement referred to in checking box (a) are preliminary copies: [X] Check the following box if the filing is a final amendment reporting the results of the transaction: [ ] CALCULATION OF FILING FEE TRANSACTION VALUATION* AMOUNT OF FILING FEE ---------------------- -------------------- $14,153,103 $2,830.62 *For purposes of calculating the filing fee only. Assumes the payment of $1.58 per share in exchange for a total of 8,957,660 shares of Common Stock. The amount of the filing fee, calculated in accordance with Regulation 240.0-11(b) of the Securities Exchange Act of 1934, as amended, equals 1/50 of one percent of the value of the proposed cash payment to be made in connection with the transaction, as described in this Statement. [X] Check the box if any part of the fee is offset as provided by Regulation 240.0-11(a)(2) of the Securities Exchange Act of 1934, as amended, and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number or the Form or Schedule and the date of its filing. Amount Previously Paid: $2830.62 Form or Registration No.: PREM14A Filing Party: Frontier Adjusters of America, Inc. Date Filed: May 22, 2001
INTRODUCTION This Rule 13e-3 Transaction Statement on Schedule 13E-3 ("Statement") is being filed by Frontier Adjusters of America, Inc., an Arizona corporation ("Frontier"), Merrymeeting, Inc., a Delaware corporation ("MMI"), MM Merger Corporation, a Delaware corporation, ("Acquisition Company") and John M. Davies, Chairman of the Board of Frontier and 50% shareholder of MMI, in connection with a Plan and Agreement of Merger dated April 27, 2001 (the "Agreement"), a copy of which is attached as APPENDIX A to the proxy statement ("Proxy Statement") filed with the Securities and Exchange Commission on May 22, 2001, pursuant to Regulation 14A under the Act. Pursuant to the Agreement, Frontier will be the surviving entity in a merger with Acquisition Company, a wholly-owned subsidiary of MMI. MMI is a newly-formed corporation that is owned by John M. Davies, Frontier's Chairman of the Board, and IVM Intersurer BV, a Netherlands holding company that specializes in investing in insurance-related businesses. Under the terms of the Agreement, Acquisition Company, a wholly owned subsidiary of MMI, would merge with and into Frontier, with Frontier being the surviving entity. Each outstanding share of Frontier's common stock (the "Common Stock"), other than the shares held by MMI, would be exchanged for the right to receive $1.58 in cash, without interest, for each share of Common Stock. As a result, Frontier would cease to be a public company. The responses and cross-references presented below provide the locations in the Proxy Statement (including the appendices thereto) of the information required to be included in response to the items of this Statement. The information in the Proxy Statement is hereby expressly incorporated herein by reference, and the responses to each item in this Statement are qualified in their entirety by the information contained in the Proxy Statement. Capitalized terms contained in this Statement and not defined in this Statement shall have the meanings ascribed to them in the Proxy Statement. A copy of the Proxy Statement is attached hereto as EXHIBIT (A). ITEM 1. SUMMARY TERM SHEET. The information set forth in the "Summary Term Sheet" in the Proxy Statement is incorporated herein by reference. ITEM 2. SUBJECT COMPANY INFORMATION. (a) NAME AND ADDRESS. The name of the company is Frontier Adjusters of America, Inc. Its principal executive offices are located at 45 East Monterey Way, Phoenix, Arizona 85012, and its telephone number is (602) 264-1061. (b) SECURITIES. The securities subject to the transaction contemplated by this Statement are Common Stock. As of July 31, 2001 there were approximately 8,957,660 shares of Common Stock outstanding. (c) TRADING MARKET AND PRICE. The information set forth under the caption "Market Price and Dividend Information" in the Proxy Statement is incorporated herein by reference. (d) DIVIDENDS. The information set forth under the caption "Market Price and Dividend Information" in the Proxy Statement is incorporated herein by reference. (e) PRIOR PUBLIC OFFERINGS. No underwritten public offering of Common Stock has been made by the persons filing this Statement during the past three years. (f) PRIOR STOCK PURCHASES. During the past two years, Frontier, MMI, MM Merger, John M. Davies and their affiliates have made the following purchases of shares of Common Stock. DATE PURCHASER SHARES ---- --------- ------ June 12, 1999 Frontier 971,464 shares in a tender offer May 2, 2001 MMI 5,258,513 shares in a private purchase 2 ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON. (a) NAME AND ADDRESS. The name, business address and business telephone number of each filing person on this Statement are:
Frontier Adjusters of America, Inc. Merrymeeting, Inc. 45 East Monterey Way c/o Ulmer & Berne LLP Phoenix, Arizona 85012 1300 East 9th Street, Suite 900 (602) 264-1061 Cleveland, Ohio 44114-1583 (216) 621-8400 MM Merger Corporation John M. Davies c/o Ulmer & Berne LLP c/o Frontier Adjusters of America, Inc. 1300 East 9th Street, Suite 900 45 East Monterey Way Cleveland, Ohio 44114-1583 Phoenix, Arizona 85012 (216) 621-8400 (602) 264-1061
The address and phone number of each executive officer and director of Frontier, of MMI and of Acquisition Company, is the same as indicated above for Frontier, for MMI and for Acquisition Company, respectively. The directors of Frontier, MMI and Acquisition Company are as follows: Frontier: Eric J. Carlstrom Director John M. Davies Chairman of the Board, CEO and President Jeffrey R. Harcourt Director, Secretary, Chief Financial Officer and Treasurer Kenneth A. Sexton Director MMI: John M. Davies Chairman of the Board, CEO and President Patrick Enthoven Director Jeffrey R. Harcourt Secretary, Chief Financial Officer and Treasurer Acquisition Company: John M. Davies Chairman of the Board, CEO and President Jeffrey R. Harcourt Director, Secretary, Chief Financial Officer and Treasurer MMI is owned and controlled by John M. Davies and IVM Intersurer BV, a Netherlands holding company that specializes in investing in insurance-related businesses. Acquisition Company is wholly-owned and controlled by MMI. Frontier is both a filing person and the subject company of this Statement. (b) BUSINESS AND BACKGROUND OF ENTITIES. MMI: MMI is a newly formed Delaware corporation formed for the purpose of purchasing and holding a majority interest in Frontier from United Financial Adjusting Company. MMI has not been convicted in a criminal proceeding during the past five years (excluding traffic violations or similar misdemeanors). MMI has not been a party to any judicial or administrative proceeding during the past five years (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining MMI from future violations of, or prohibiting activities subject to, federal or state securities laws. 3 Acquisition Company: Acquisition Company is a newly formed Delaware corporation formed for the sole purpose of effecting the merger of Frontier with Acquisition Company, whereby Frontier would be the surviving entity, pursuant to the terms and conditions of the Agreement. Acquisition Company has not been convicted in a criminal proceeding during the past five years (excluding traffic violations or similar misdemeanors). Acquisition Company has not been a party to any judicial or administrative proceeding during the past five years (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining Acquisition Company from future violations of, or prohibiting activities subject to, federal or state securities laws. (c) BUSINESS AND BACKGROUND OF NATURAL PERSONS. With regard to the employment and background information of John M. Davies, Jeffrey R. Harcourt and Kenneth A. Sexton, three of the directors of Frontier, the information set forth under "Item 10 - Directors and Executive Officers of the Registrant" of Frontier's Annual Report on Form 10-K for the year ended June 30, 2000 is incorporated herein by reference. With regard to the employment and background information of Eric J. Carlstrom see below. With regard to the employment and background information of the directors of MMI and Acquisition Company, the information set forth under the caption "The Proposed Merger--Interests of Certain Persons in the Merger" and "Management of MMI--Current Directors and Executive Officers" in the Proxy Statement is incorporated herein by reference. The addresses of Frontier, MMI and Acquisition Company are provided above under subsection (a) of this Item 3. None of the executive officers, directors or control persons of Frontier, MMI or Acquisition Company were (i) convicted in a criminal proceeding during the last five years (excluding traffic violations or similar misdemeanors) or (ii) a party to any judicial or administrative proceeding during the past five years (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws. All executive officers and directors of Frontier, MMI and Acquisition Company are citizens of the United States, except for Patrick Enthoven who is a citizen of South Africa. ERIC J. CARLSTROM, 42, has served as Senior Vice President of AON Risk Services, Inc. since 1997. Prior thereto, Mr. Carlstrom served as Senior Vice President at Alexander & Alexander, an insurance brokerage firm, from 1994 to 1997. Mr. Carlstrom holds a B.A. degree from Hofstra University. ITEM 4. TERMS OF THE TRANSACTION. (a) MATERIAL TERMS. (1) BRIEF DESCRIPTION OF THE TRANSACTION. The information set forth under the captions "The Proposed Merger--Background of the Merger," "The Proposed Merger -- Recommendation of the Special Committee and Board of Directors; Reasons for the Merger" and "The Proposed Merger -- Exchange of Securities" in the Proxy Statement is incorporated herein by reference. (2) CONSIDERATION OFFERED TO SECURITY HOLDERS. The information set forth under the captions "Summary Term Sheet -- What will I Receive in the Merger?" and "The Proposed Merger -- Background of the Merger" in the Proxy Statement is incorporated herein by reference. (3) REASONS FOR ENGAGING IN THE TRANSACTION. The information set forth under the caption "The Proposed Merger -- Recommendation of the Special Committee and Board of Directors; Reasons for the Merger" in the Proxy Statement is incorporated herein by reference. 4 (4) VOTE REQUIRED FOR APPROVAL OF THE TRANSACTIONS. The information set forth under the captions "Voting Securities and Voting Rights" and "Required Vote, Effect of Shareholder Approval, and Related Matters" in the Proxy Statement is incorporated herein by reference. (5) MATERIAL DIFFERENCES IN THE RIGHTS OF SECURITY HOLDERS AS A RESULT OF THE TRANSACTION. The information set forth under the captions "The Proposed Merger -- Certain Effects of the Merger" and "The Proposed Merger -- Exchange of Securities" in the Proxy Statement is incorporated herein by reference. (6) ACCOUNTING TREATMENT OF THE TRANSACTIONS. Not applicable. (7) FEDERAL INCOME TAX CONSEQUENCES. The information set forth under the captions "Summary Term Sheet -- What Are the Federal Income Tax Consequences of the Merger?" and "The Proposed Merger -- Federal Income Tax Consequences" in the Proxy Statement is incorporated herein by reference. (b) DIFFERENT TERMS. No holder of the Common Stock will be treated in the Merger differently from any other holder of Common Stock. (c) APPRAISAL RIGHTS. The information set forth under the captions "Summary Term Sheet -- Do I Have Dissenters' Rights?" and "The Proposed Merger - Rights of Dissenting Shareholders" in the Proxy Statement is incorporated herein by reference. (d) PROVISIONS FOR UNAFFILIATED SECURITIES HOLDERS. None. (e) ELIGIBILITY FOR LISTING OR TRADING. Not applicable. ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS. (a) TRANSACTIONS. See Item 2(f). (b) SIGNIFICANT CORPORATE EVENTS. See Item 2(f). The information set forth under the caption "The Proposed Merger-- Background of the Merger" in the Proxy Statement is incorporated herein by reference. (c) NEGOTIATIONS OR CONTRACTS. The information set forth under the caption "The Proposed Merger -- Background of the Merger" in the Proxy Statement is incorporated herein by reference. (d) AGREEMENTS INVOLVING THE SUBJECT COMPANY'S SECURITIES. See Item 2(f). The information set forth under the caption "The Proposed Merger -- Background of the Merger" in the Proxy Statement is incorporated herein by reference. In addition, from time to time in the ordinary course of its business, Frontier has issued stock options to its directors, officers and employees. ITEM 6. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS. (a) USE OF SECURITIES ACQUIRED. The information set forth under the captions "Summary Term Sheet -- What is the Proposed Merger?" and "The Proposed Merger -- Certain Effects of the Merger" in the Proxy Statement is incorporated herein by reference. (b) PLANS. (1) EXTRAORDINARY TRANSACTIONS. The information set forth under the captions "Summary Term Sheet-- What is the Proposed Merger?" and "The Proposed Merger-- Background of the Merger" in the Proxy Statement is incorporated herein by reference. (2) PURCHASE, SALE OR TRANSFER OF A MATERIAL AMOUNT OF ASSETS OF THE SUBJECT COMPANY OR ANY OR ITS SUBSIDIARIES. Not applicable. (3) MATERIAL CHANGES IN THE PRESENT DIVIDEND RATE OR POLICY, OR INDEBTEDNESS OR CAPITALIZATION OF THE SUBJECT COMPANY. Not applicable. 5 (4) MATERIAL CHANGES IN THE PRESENT BOARD OF DIRECTORS OR MANAGEMENT OF THE SUBJECT COMPANY. The information set for the under the captions "The Proposed Merger - Recommendation of the Special Committee and Board of Directors; Reasons for the Merger" and "Management of MMI - Current Directors and Executive Officers" in the Proxy Statement is incorporated herein by reference. (5) OTHER MATERIAL CHANGES IN THE SUBJECT COMPANY'S CORPORATE STRUCTURE OR BUSINESS. Not applicable. (6) ANY CLASS OF EQUITY SECURITIES OF THE SUBJECT COMPANY TO BE DELISTED FROM A NATIONAL SECURITIES EXCHANGE. The information set forth under the caption "The Proposed Merger -- Certain Effects of the Merger" in the Proxy Statement is incorporated herein by reference. (7) ANY CLASS OF EQUITY SECURITIES OF THE SUBJECT COMPANY BECOMING ELIGIBLE FOR TERMINATION OF REGISTRATION UNDER SECTION 12(G)(4) OF THE ACT. The information set forth under the caption "The Proposed Merger -- Certain Effects of the Merger" in the Proxy Statement is incorporated herein by reference. (8) SUSPENSION OF THE SUBJECT COMPANY'S OBLIGATION TO FILE REPORTS UNDER SECTION 15(d) OF THE ACT. The information set forth under the caption "The Proposed Merger -- Certain Effects of the Merger" in the Proxy Statement is incorporated herein by reference. ITEM 7. PURPOSES, ALTERNATIVES, REASONS AND EFFECTS. (a) PURPOSES. The information set forth under the caption "The Proposed Merger -- Recommendation of the Special Committee and Board of Directors; Reasons for the Merger" in the Proxy Statement is incorporated herein by reference. (b) ALTERNATIVES. The information set forth under the caption "The Proposed Merger -- Background of the Merger" in the Proxy Statement is incorporated herein by reference. (c) REASONS. The information set forth under the captions "The Proposed Merger -- Background of the Merger" and "The Proposed Merger-- Recommendations of the Special Committee and Board of Directors; Reasons for the Merger" in the Proxy Statement is incorporated herein by reference. (d) EFFECTS. The information set forth under the captions "Summary Term Sheet -- What Will I Receive in the Merger?," "Summary Term Sheet -- What Effects May Result from the Merger?," "The Proposed Merger -- Background of the Merger," "The Proposed Merger -- Certain Effects of the Merger," "The Proposed Merger -- Conflicts of Interest," "The Proposed Merger -- Federal Income Tax Consequences," "The Proposed Merger -- Conduct of the Business of Frontier if the Merger is Not Consummated," and "The Proposed Merger -- Conduct of Frontier's Business After the Merger" in the Proxy Statement is incorporated herein by reference. ITEM 8. FAIRNESS OF THE TRANSACTION. (a) FAIRNESS. The information set forth under the captions "The Proposed Merger -- Background of the Merger," "The Proposed Merger -- Recommendation of the Special Committee and Board of Directors; Reasons for the Merger" and "The Proposed Merger -- Opinion of ComStock" in the Proxy Statement is incorporated herein by reference. (b) FACTORS CONSIDERED IN DETERMINING FAIRNESS. The information set forth under the captions, "Summary Term Sheet -- What Are the Reasons for the Merger?," "Summary Term Sheet -- Has the Board of Directors Recommended that I Vote for the Merger Agreement?," "The Proposed Merger -- Background of the Merger," "The Proposed Merger -- Recommendation of the Special Committee and Board of Directors; Reasons for the Merger" and "The Proposed Merger -- Opinion of ComStock" in the Proxy Statement is incorporated herein by reference. 6 (c) APPROVAL OF SECURITY HOLDERS. The information set forth under the captions "Summary Term Sheet --What Shareholder Vote is Required to Approve the Merger Agreement?," "The Proposed Merger -- Recommendation of the Special Committee and Board of Directors; Reasons for the Merger" and "Required Vote, Effect of Shareholder Approval, and Related Matters" in the Proxy Statement is incorporated herein by reference. (d) UNAFFILIATED REPRESENTATIVE. A Special Committee consisting of the three directors who do not own stock in Frontier, MMI or Acquisition Company and will not own stock in MMI after the Merger, selected ComStock Valuation Advisors, Inc. ("ComStock") to prepare a report concerning the fairness of the Merger. The information set forth under the captions "The Proposed Merger -- Background of the Merger" and "The Proposed Merger -- Opinion of ComStock" in the Proxy Statement is incorporated herein by reference. (e) APPROVAL OF DIRECTORS. The Merger was approved by the unanimous vote of the Board of Directors of Frontier, including the three directors who are not employees of Frontier. (f) OTHER OFFERS. Not applicable. ITEM 9. REPORTS, OPINIONS, APPRAISALS AND NEGOTIATIONS. (a) REPORT, OPINION OR APPRAISAL. The information set forth under the captions "Summary Term Sheet -- Did the Board and the Special Committee Retain a Financial Advisor?," "The Proposed Merger -- Background of the Merger," "The Proposed Merger -- Recommendation of the Special Committee and Board of Directors; Reasons for the Merger" and "The Proposed Merger -- Opinion of ComStock" in the Proxy Statement is incorporated herein by reference. (b) PREPARER AND SUMMARY OF THE REPORT, OPINION OR APPRAISAL. (1) IDENTITY OF THE OUTSIDE PARTY AND/OR UNAFFILIATED REPRESENTATIVE. The information set forth under the captions "Summary Term Sheet -- Did the Board and the Special Committee Retain a Financial Advisor?" and "The Proposed Merger -- Background of the Merger" in the Proxy Statement is incorporated herein by reference. (2) QUALIFICATIONS OF THE OUTSIDE PARTY AND/OR UNAFFILIATED REPRESENTATIVE. The information set forth under the captions "Summary Term Sheet -- Did the Board and the Special Committee Retain a Financial Advisor?" and "The Proposed Merger -- Background of the Merger" in the Proxy Statement is incorporated herein by reference. (3) METHOD OF SELECTION OF THE OUTSIDE PARTY AND/OR UNAFFILIATED REPRESENTATIVE. The information set forth under the captions "Summary Term Sheet -- Did the Board and the Special Committee Retain a Financial Advisor?" and "The Proposed Merger -- Background of the Merger" in the Proxy Statement is incorporated herein by reference. (4) MATERIAL RELATIONSHIP. The information set forth under the captions "The Proposed Merger -- Background of the Merger," "The Proposed Merger -- Opinion of ComStock," "The Proposed Merger -- Expenses of the Merger" and "The Proposed Merger - Interests of Certain Persons in the Merger" in the Proxy Statement is incorporated herein by reference. (5) DETERMINATION OF THE AMOUNT OF CONSIDERATION TO BE PAID. The information set forth under the caption "The Proposed Merger - Background of the Merger" in the Proxy Statement is incorporated herein by reference. (6) SUMMARY OF THE NEGOTIATION, REPORT, OPINION OR APPRAISAL. The information set forth under the caption "The Proposed Merger -- Background of the Merger" and "The Proposed Merger -- Opinion of ComStock" in the Proxy Statement is incorporated herein by reference. 7 (c) AVAILABILITY OF DOCUMENTS. The fairness opinion of ComStock will be made available for inspection and copying at the principal executive offices of Frontier during its regular business hours by any interested equity security holder of Frontier or a representative who has been so designated in writing. ITEM 10. SOURCE AND AMOUNTS OF FUNDS OR OTHER CONSIDERATION. (a) SOURCE OF FUNDS. The information set forth under the captions "Summary Term Sheet-- How Will Acquisition Company Finance the Merger?" and "The Proposed Merger-- Source of Funds" in the Proxy Statement is incorporated herein by reference. (b) CONDITIONS. The information set forth under the captions "Summary Term Sheet -- How Will Acquisition Company Finance the Merger?" and "The Proposed Merger -- Source of Funds" in the Proxy Statement is incorporated herein by reference. There are no alternative financing arrangements or plans in the event the primary financing plan falls through. (c) EXPENSES. The information set forth under the caption "The Proposed Merger -- Expenses of the Merger" in the Proxy Statement is incorporated herein by reference. (d) BORROWED FUNDS. The information set forth under the captions "Summary Term Sheet-- How Will Acquisition Company Finance the Merger?" and "The Proposed Merger-- Source of Funds" in the Proxy Statement is incorporated herein by reference. ITEM 11. INTEREST IN SECURITIES OF THE SUBJECT COMPANY. (a) SECURITIES OWNERSHIP. The information set forth under the caption "Beneficial Ownership of Common Stock Prior to and After the Merger" in the Proxy Statement is incorporated herein by reference. (b) SECURITIES TRANSACTIONS. During the 60-day period prior to the date of the filing of this Statement, there have been no transactions effected by Frontier, MMI, Acquisition Company, or any of their respective directors, executive officers or control persons, or John M. Davies regarding the Common Stock, other than as disclosed in Item 2(f) above. ITEM 12. THE SOLICITATION OR RECOMMENDATION. (a) INTENT TO TENDER OR VOTE IN A GOING-PRIVATE TRANSACTION. The information set forth under the caption "The Proposed Merger-- Recommendation of the Special Committee and Board of Directors; Reasons for the Merger" in the Proxy Statement is incorporated herein by reference. (b) RECOMMENDATIONS OF OTHERS. The information set forth under the captions "The Proposed Merger -- Background of the Merger" and "The Proposed Merger -- Recommendation of the Special Committee and Board of Directors; Reasons for the Merger" in the Proxy Statement is incorporated herein by reference. ITEM 13. FINANCIAL STATEMENTS. (a) FINANCIAL INFORMATION. The information and financial statements incorporated by reference under the caption "Additional Information" in the Proxy Statement are incorporated herein by reference. 8 (b) PRO FORMA INFORMATION. Because no shares of Frontier's Common Stock will remain outstanding after the Merger, pro forma financial information is not material to the holders of the Common Stock. The information set forth under the caption "The Proposed Merger -- Pro Forma Financial Information" in the Proxy Statement is incorporated herein by reference. ITEM 14. PERSONS/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED. (a) SOLICITATIONS OR RECOMMENDATIONS. The information set forth under the caption "Solicitation" in the Proxy Statement is incorporated herein by reference. (b) EMPLOYEES AND CORPORATE ASSETS. The information set forth under the caption "Solicitation" in the Proxy Statement is incorporated herein by reference. ITEM 15. ADDITIONAL INFORMATION. (b) OTHER MATERIAL INFORMATION. Not applicable. ITEM 16. EXHIBITS. (a) Amendment No. 1 to the Proxy Statement. Attached hereto. * (b) Credit Agreement, dated as of April 30, 2001, by and between MMI and Fifth Third Bank (Northeastern Ohio) and Fifth Third Bank. * (c) (1) Draft Fairness Opinion of ComStock, dated April 23, 2001. * (2) Fairness Opinion of ComStock, dated April 24, 2001. * (3) Revised Opinion of ComStock, dated April 24, 2001. * (4) Exhibits to Revised Opinion of ComStock, dated April 24, 2001. (d) Plan and Agreement of Merger, dated as of April 27, 2001, by and among Company, MMI and Acquisition Company (attached as APPENDIX A to the Proxy Statement filed as Exhibit (a) hereto). * (e) Not applicable. (f) Not applicable. * Filed Previously. 9 SIGNATURES After due inquiry and to the best of the undersigned's knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct. Dated: August __, 2001 FRONTIER ADJUSTERS OF AMERICA, INC. By: /s/ John M. Davies ------------------------------------- President and Chief Executive Officer Dated: August __, 2001 MERRYMEETING, INC. By: /s/ John M. Davies ------------------------------------- President and Chief Executive Officer Dated: August __, 2001 MM MERGER CORPORATION By: /s/ John M. Davies ------------------------------------- President and Chief Executive Officer 10 EX-16.C.4 3 ex16c4.txt EXHIBITS REVISED OPINION OF COMSTOCK 4-24-01 Exhibit 16.C.4 FRONTIER ADJUSTERS OF AMERICA, INC. COMPARATIVE FINANCIAL STATEMENTS BALANCE SHEET
Month End Year End Year End Year End Year End Year End ASSETS Dec-00 Jun-00 Jun-99 Jun-98 Jun-97 Jun-96 ------------ ------------ ------------ ------------ ------------ ------------ Cash & Equivalents $ 3,420,000 $ 2,130,000 $ 6,890,000 $ 2,220,000 $ 2,300,000 $ 1,780,000 Net Receivables 1,040,000 1,370,000 1,740,000 1,800,000 1,640,000 1,570,000 Prepaid Expenses -- 210,000 340,000 320,000 270,000 290,000 Other Current Assets 510,000 240,000 170,000 220,000 410,000 140,000 ------------ ------------ ------------ ------------ ------------ ------------ Total Current Assets $ 4,970,000 $ 3,950,000 $ 9,140,000 $ 4,560,000 $ 4,620,000 $ 3,780,000 Gross Property & Equipment $ 2,660,000 $ 2,660,000 $ 2,540,000 $ 2,540,000 $ 2,450,000 $ 2,440,000 Accumulated Depreciation 1,100,000 1,040,000 930,000 820,000 720,000 890,000 ------------ ------------ ------------ ------------ ------------ ------------ Net Property & Equipment $ 1,560,000 $ 1,620,000 $ 1,610,000 $ 1,720,000 $ 1,730,000 $ 1,550,000 Other Investments -- 830,000 1,030,000 1,130,000 1,150,000 1,080,000 Intangibles -- 200,000 260,000 190,000 280,000 340,000 Other Assets 1,060,000 120,000 80,000 200,000 130,000 130,000 ------------ ------------ ------------ ------------ ------------ ------------ Total Assets $ 7,590,000 $ 6,720,000 $ 12,120,000 $ 7,800,000 $ 7,910,000 $ 6,880,000 ============ ============ ============ ============ ============ ============ LIABILITIES Long Term Debt, Current Portion -- -- -- $ 30,000 $ 30,000 $ 30,000 Accounts Payable 20,000 140,000 580,000 610,000 430,000 150,000 Accrued & Other Expenses 370,000 280,000 6,490,000 710,000 850,000 410,000 ------------ ------------ ------------ ------------ ------------ ------------ Total Current Liabilities $ 390,000 $ 420,000 $ 7,070,000 $ 1,350,000 $ 1,310,000 $ 590,000 Long Term Debt -- -- -- -- $ 30,000 $ 60,000 Total Liabilities $ 390,000 $ 420,000 $ 7,070,000 $ 1,350,000 $ 1,340,000 $ 650,000 ============ ============ ============ ============ ============ ============ EQUITY Common Stock $ 90,000 $ 90,000 $ 90,000 $ 50,000 $ 50,000 $ 50,000 Capital Surplus 2,100,000 2,100,000 2,100,000 2,150,000 2,150,000 2,150,000 Retained Earnings 5,190,000 4,290,000 3,040,000 4,780,000 4,900,000 4,520,000 Less Deductions from Equity (180,000) (180,000) (180,000) (530,000) (530,000) (490,000) ------------ ------------ ------------ ------------ ------------ ------------ Common Equity $ 7,200,000 $ 6,300,000 $ 5,050,000 $ 6,450,000 $ 6,570,000 $ 6,230,000 ------------ ------------ ------------ ------------ ------------ ------------ Total Equity $ 7,200,000 $ 6,300,000 $ 5,050,000 $ 6,450,000 $ 6,570,000 $ 6,230,000 ------------ ------------ ------------ ------------ ------------ ------------ Total Liabilities & Equity $ 7,590,000 $ 6,720,000 $ 12,120,000 $ 7,800,000 $ 7,910,000 $ 6,880,000 ============ ============ ============ ============ ============ ============ Common Shares Outstanding 8,960,000 8,960,000 8,960,000 4,610,000 4,610,000 4,620,000
ComStock Valuation Advisors, Inc. Exhibit A-1 FRONTIER ADJUSTERS OF AMERICA, INC. COMPARATIVE FINANCIAL STATEMENTS INCOME STATEMENT
12 Months Year End Year End Year End Year End Year End Dec-00 Jun-00 Jun-99 Jun-98 Jun-97 Jun-96 ----------- ----------- ----------- ----------- ----------- ----------- Sales $ 6,080,000 $ 6,260,000 $ 6,340,000 $ 5,820,000 $ 6,160,000 $ 5,640,000 Cost of Sales 3,490,000 4,160,000 4,740,000 4,670,000 4,450,000 3,740,000 ----------- ----------- ----------- ----------- ----------- ----------- Gross Profit $ 2,590,000 $ 2,100,000 $ 1,600,000 $ 1,150,000 $ 1,710,000 $ 1,900,000 Depreciation & Amortization 200,000 220,000 270,000 250,000 240,000 190,000 ----------- ----------- ----------- ----------- ----------- ----------- EBIT $ 2,390,000 $ 1,880,000 $ 1,330,000 $ 900,000 $ 1,470,000 $ 1,710,000 Interest Expense -- -- -- 30,000 10,000 10,000 Other Income/(Expense) 230,000 190,000 230,000 160,000 180,000 150,000 Special Items -- -- (580,000) (60,000) (50,000) -- ----------- ----------- ----------- ----------- ----------- ----------- Pretax Income $ 2,620,000 $ 2,070,000 $ 980,000 $ 1,030,000 $ 1,610,000 $ 1,870,000 Income taxes (1,040,000) (830,000) (440,000) (420,000) (620,000) (720,000) ----------- ----------- ----------- ----------- ----------- ----------- Net Income $ 1,580,000 $ 1,240,000 $ 540,000 $ 610,000 $ 990,000 $ 1,150,000 =========== =========== =========== =========== =========== =========== Primary Earnings Per Share $ 0.18 $ 0.14 $ 0.06 $ 0.13 $ 0.21 $ 0.25 EPS from Operations $ 0.27 $ 0.21 $ 0.15 $ 0.20 $ 0.32 $ 0.37
ComStock Valuation Advisors, Inc. Exhibit A-2 FRONTIER ADJUSTERS OF AMERICA, INC. COMPARATIVE FINANCIAL STATEMENTS ADJUSTED OPERATING PERFORMANCE BEFORE DEBT SERVICE
12 Months Year End Year End Year End Year End Year End Dec-00 Jun-00 Jun-99 Jun-98 Jun-97 Jun-96 ----------- ----------- ----------- ----------- ----------- ----------- Pretax Income, as reported $ 2,620,000 $ 2,070,000 $ 980,000 $ 1,030,000 $ 1,610,000 $ 1,870,000 Pretax Adjustments Interest Expense -- -- -- $ (30,000) $ (10,000) $ (10,000) ----------- ----------- ----------- ----------- ----------- ----------- Total Pretax Adjustments -- -- -- $ (30,000) $ (10,000) $ (10,000) Adjusted EBIT $ 2,620,000 $ 2,070,000 $ 980,000 $ 1,000,000 $ 1,600,000 $ 1,860,000 =========== =========== =========== =========== =========== =========== Adjusted EBIT Margin 43.1% 33.1% 15.5% 17.2% 26.0% 33.0% =========== =========== =========== =========== =========== =========== 3 Year Weighted Average $ 2,163,333 5 Year Weighted Average $ 1,861,333 WEIGHTING ASSIGNED TO EACH YEAR Three-year weighting 3 2 1 Five-year weighting 5 4 3 2 1 Adjusted EBIT $ 2,620,000 $ 2,070,000 $ 980,000 $ 1,000,000 $ 1,600,000 $ 1,860,000 Depreciation & Amortization 200,000 220,000 270,000 250,000 240,000 190,000 ----------- ----------- ----------- ----------- ----------- ----------- Adjusted EBITDA $ 2,820,000 $ 2,290,000 $ 1,250,000 $ 1,250,000 $ 1,840,000 $ 2,050,000 =========== =========== =========== =========== =========== =========== 3 Year Weighted Average $ 2,381,667 5 Year Weighted Average $ 2,090,000
ComStock Valuation Advisors, Inc. Exhibit A-3 FRONTIER ADJUSTERS OF AMERICA, INC. COMPARATIVE FINANCIAL STATEMENTS COMMON SIZE BALANCE SHEET
Month End Year End Year End Year End Year End Year End ASSETS Dec-00 Jun-00 Jun-99 Jun-98 Jun-97 Jun-96 ------ ------ ------ ------ ------ ------ Cash & Equivalents 45.1% 31.7% 56.8% 28.5% 29.1% 25.9% Net Receivables 13.7% 20.4% 14.4% 23.1% 20.7% 22.8% Other Current Assets 6.7% 6.7% 4.2% 6.9% 8.6% 6.3% ------ ------ ------ ------ ------ ------ Total Current Assets 65.5% 58.8% 75.4% 58.5% 58.4% 54.9% Net Property & Equipment 20.6% 24.1% 13.3% 22.1% 21.9% 22.5% Other Assets 14.0% 17.1% 11.3% 19.5% 19.7% 22.5% ------ ------ ------ ------ ------ ------ Total Assets 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% ====== ====== ====== ====== ====== ====== LIABILITIES & EQUITIES Notes Payable & Current Portion 0.0% 0.0% 0.0% 0.4% 0.4% 0.4% Accounts Payable 0.3% 2.1% 4.8% 7.8% 5.4% 2.2% Accrued & Other Expenses 4.9% 4.2% 53.5% 9.1% 10.7% 6.0% ------ ------ ------ ------ ------ ------ Total Current Liabilities 5.1% 6.3% 58.3% 17.3% 16.6% 8.6% Long Term Debt 0.0% 0.0% 0.0% 0.0% 0.4% 0.9% Total Liabilities 5.1% 6.3% 58.3% 17.3% 16.9% 9.4% ------ ------ ------ ------ ------ ------ Total Equity 94.9% 93.8% 41.7% 82.7% 83.1% 90.6% ------ ------ ------ ------ ------ ------ Total Liabilities & Equity 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% ====== ====== ====== ====== ====== ====== COMMON SIZE INCOME STATEMENT 12 Months Year End Year End Year End Year End Year End Dec-00 Jun-00 Jun-99 Jun-98 Jun-97 Jun-96 ------ ------ ------ ------ ------ ------ Sales 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Cost of Sales 57.4% 66.5% 74.8% 80.2% 72.2% 66.3% ------ ------ ------ ------ ------ ------ Gross Profit 42.6% 33.5% 25.2% 19.8% 27.8% 33.7% Depreciation & Amortization 3.3% 3.5% 4.3% 4.3% 3.9% 3.4% ------ ------ ------ ------ ------ ------ EBIT 39.3% 30.0% 21.0% 15.5% 23.9% 30.3% Interest Expense 0.0% 0.0% 0.0% 0.5% 0.2% 0.2% Other Income/(Expense) 3.8% 3.0% 3.6% 2.7% 2.9% 2.7% Special Items 0.0% 0.0% (9.1%) (1.0%) (0.8%) 0.0% ------ ------ ------ ------ ------ ------ Pretax Income 43.1% 33.1% 15.5% 17.7% 26.1% 33.2% Income taxes (17.1%) (13.3%) (6.9%) (7.2%) (10.1%) (12.8%) ------ ------ ------ ------ ------ ------ Net Income 26.0% 19.8% 8.5% 10.5% 16.1% 20.4% ====== ====== ====== ====== ====== ======
ComStock Valuation Advisors, Inc. Exhibit A-4 FRONTIER ADJUSTERS OF AMERICA, INC. COMPARATIVE FINANCIAL STATEMENTS BALANCE SHEET TREND ANALYSIS
Month End Year End Year End Year End Year End Year End ASSETS Dec-00 Jun-00 Jun-99 Jun-98 Jun-97 Jun-96 ------ ------ ------ ------ ------ ------ Cash & Equivalents 60.6% (69.1%) 210.4% (3.5%) 29.2% NA Net Receivables (24.1%) (21.3%) (3.3%) 9.8% 4.5% NA Other Current Assets 13.3% (11.8%) (5.6%) (20.6%) 58.1% NA ------ ------ ------ ------ ------ ------ Total Current Assets 25.8% (56.8%) 100.4% (1.3%) 22.2% NA Net Property & Equipment (3.7%) 0.6% (6.4%) (0.6%) 11.6% NA Other Assets (7.8%) (16.1%) (9.9%) (2.6%) 0.6% NA ------ ------ ------ ------ ------ ------ Total Assets 12.9% (44.6%) 55.4% (1.4%) 15.0% NA ====== ====== ====== ====== ====== ====== LIABILITIES & EQUITIES Notes Payable & Current Portion NA NA (100.0%) 0.0% 0.0% NA Accounts Payable (85.7%) (75.9%) (4.9%) 41.9% 186.7% NA Accrued & Other Expenses 32.1% (95.7%) 814.1% (16.5%) 107.3% NA ------ ------ ------ ------ ------ ------ Total Current Liabilities (7.1%) (94.1%) 423.7% 3.1% 122.0% NA Long Term Debt NA NA NA (100.0%) (50.0%) NA Total Liabilities (7.1%) (94.1%) 423.7% 0.7% 106.2% NA ------ ------ ------ ------ ------ ------ Total Equity 14.3% 24.8% (21.7%) (1.8%) 5.5% NA ------ ------ ------ ------ ------ ------ Total Liabilities & Equity 12.9% (44.6%) 55.4% (1.4%) 15.0% NA ====== ====== ====== ====== ====== ====== INCOME STATEMENT TREND ANALYSIS 12 Months Year End Year End Year End Year End Year End Dec-00 Jun-00 Jun-99 Jun-98 Jun-97 Jun-96 ------ ------ ------ ------ ------ ------ Sales (2.9%) (1.3%) 8.9% (5.5%) 9.2% NA Cost of Sales (16.1%) (12.2%) 1.5% 4.9% 19.0% NA ------ ------ ------ ------ ------ ------ Gross Profit 23.3% 31.3% 39.1% (32.7%) (10.0%) NA Depreciation & Amortization (9.1%) (18.5%) 8.0% 4.2% 26.3% NA ------ ------ ------ ------ ------ ------ EBIT 27.1% 41.4% 47.8% (38.8%) (14.0%) NA Interest Expense NA NA (100.0%) 200.0% 0.0% NA Other Income/(Expense) 21.1% (17.4%) 43.8% (11.1%) 20.0% NA Special Items NA (100.0%) 866.7% 20.0% NA NA ------ ------ ------ ------ ------ ------ Pretax Income 26.6% 111.2% (4.9%) (36.0%) (13.9%) NA Income taxes 25.3% 88.6% 4.8% (32.3%) (13.9%) NA ------ ------ ------ ------ ------ ------ Net Income 27.4% 129.6% (11.5%) (38.4%) (13.9%) NA ====== ====== ====== ====== ====== ======
ComStock Valuation Advisors, Inc. Exhibit A-5 FRONTIER ADJUSTERS OF AMERICA, INC. COMPARATIVE FINANCIAL STATEMENTS RATIO ANALYSIS
12 Months Year End Year End Year End Year End Dec-00 Jun-00 Jun-99 Jun-98 Jun-97 3-yr. Avg. ------ ------ ------ ------ ------ ---------- LIQUIDITY Current Ratio 12.7 9.4 1.3 3.4 3.5 Quick Ratio 11.4 8.3 1.2 3.0 3.0 Working Capital Per Share 0.51 0.39 0.23 0.70 0.72 Cash Flow Per Share 0.20 0.16 0.09 0.19 0.27 ACTIVITY Receivables Turnover 5.0 4.0 3.6 3.4 3.8 4.2 Total Asset Turnover 0.8 0.7 0.6 0.7 0.8 Accounts Payable Turnover 191.3 31.8 8.1 7.5 9.5 77.0 Average Collection Period (Days) 71 89 101 106 94 PERFORMANCE Sales/Net Property & Equipment 3.9 3.9 3.9 3.4 3.6 Sales/Stockholder Equity 0.8 1.0 1.3 0.9 0.9 Sales/Working Capital 1.3 1.8 3.1 1.8 1.9 Sales/Total Assets 0.8 0.9 0.5 0.7 0.8 PROFITABILITY Operating Margin Before Depr (%) 42.6 33.5 25.2 19.8 27.8 Operating Margin After Depr (%) 39.3 30.0 21.0 15.5 23.9 Pretax Profit Margin (%) 43.1 33.1 15.5 17.7 26.1 Net Profit Margin (%) 26.0 19.8 8.5 10.5 16.1 Return on Assets (%) 20.8 18.5 4.5 7.8 12.5 Return on Equity (%) 21.9 19.7 10.7 9.5 15.1 Return on Investment (%) 21.9 19.7 10.7 9.4 14.9 ADJUSTED PROFITABILITY Operating Margin Before Depr (%) 46.4 36.6 19.7 21.5 29.9 Operating Margin After Depr (%) 43.1 33.1 15.5 17.2 26.0 Pretax Profit Margin (%) 43.1 33.1 15.5 17.7 26.1 Net Profit Margin (%) 25.5 19.5 9.1 10.5 15.4 Return on Assets (%) 20.4 18.2 4.8 7.8 12.0 Return on Equity (%) 21.5 19.4 11.5 9.4 14.5 Return on Investment (%) 21.5 19.4 11.5 9.4 14.3 LEVERAGE Interest Coverage Before Tax NA NA NA 35.3 162.0 Interest Coverage After Tax NA NA NA 21.3 100.0 Long-Term Debt/Common Equity (%) -- -- -- -- 0.5 Long-Term Debt/Total Equity (%) -- -- -- -- 0.5 Total Debt/Invested Capital (%) -- -- -- 0.5 0.9 Total Debt/Total Assets (%) -- -- -- 0.4 0.8 Total Assets/Common Equity 1.1 1.1 2.4 1.2 1.2
ComStock Valuation Advisors, Inc. Exhibit A-6 FRONTIER ADJUSTERS OF AMERICA, INC. ANALYSIS OF WORKING CAPITAL
Month End Year End Year End Year End Year End Year End Dec-00 Jun-00 Jun-99 Jun-98 Jun-97 Jun-96 ----------- ----------- ----------- ----------- ----------- ----------- NON-CASH CURRENT ASSETS Net Receivables $ 1,040,000 $ 1,370,000 $ 1,740,000 $ 1,800,000 $ 1,640,000 $ 1,570,000 Prepaid Expenses 0 210,000 340,000 320,000 270,000 290,000 Other Current Assets 510,000 240,000 170,000 220,000 410,000 140,000 ----------- ----------- ----------- ----------- ----------- ----------- Total Non-cash Current Assets $ 1,550,000 $ 1,820,000 $ 2,250,000 $ 2,340,000 $ 2,320,000 $ 2,000,000 NON-DEBT CURRENT LIABILITIES Accounts Payable $ 20,000 $ 140,000 $ 580,000 $ 610,000 $ 430,000 $ 150,000 Accrued & Other Expenses 370,000 280,000 6,490,000 710,000 850,000 410,000 ----------- ----------- ----------- ----------- ----------- ----------- Total Non-Debt Current Liabilities $ 390,000 $ 420,000 $ 7,070,000 $ 1,320,000 $ 1,280,000 $ 560,000 ADJUSTED WORKING CAPITAL $ 1,160,000 $ 1,400,000 $(4,820,000) $ 1,020,000 $ 1,040,000 $ 1,440,000 CHANGE IN WORKING CAPITAL $ 240,000 $(6,220,000) $ 5,840,000 $ 20,000 $ 400,000 N/A Average historical change $ 56,000 Median historical change $ 240,000 Average change from forecast $ (28,000) ----------- Average of data points $ 89,000 Selected change in working capital $ (28,000)
ComStock Valuation Advisors, Inc. Exhibit A-1 FRONTIER ADJUSTERS OF AMERICA, INC. CAPITALIZED CASH FLOW METHOD AS OF 4/23/01 AFTER-TAX CASH FLOW CALCULATION: Adjusted EBIT $ 1,861,333 Income Taxes at 40.9% (761,844) ------------ Adjusted After-Tax Earnings $ 1,099,490 Average Change in Working Capital (28,000) ------------ Adjusted Cash Flow $ 1,071,490 CALCULATION OF VALUE: Adjusted Cash Flow $ 1,071,490 Cash flow multiple 10.9 ------------ Value of invested capital, minority basis $ 11,679,241 Debt outstanding -- ------------ Equity value, minority basis $ 11,679,241 Premium for Control of 35% 4,087,734 ------------ Equity value, freely-traded basis $ 15,766,975 Discount for risks associated with the thinly-traded market of 10% (1,576,698) ------------ Equity value, privately-held basis $ 14,190,277 ============ ROUNDED VALUE $ 14,190,000 ============ ComStock Valuation Advisors, Inc. Exhibit B-1 FRONTIER ADJUSTERS OF AMERICA, INC. CAPITALIZED CASH FLOW METHOD AS OF APRIL 23, 2001 WEIGHTED AVERAGE ADJUSTED PRETAX EARNINGS
12 Months Year End Year End Year End Year End Dec-00 Jun-00 Jun-99 Jun-98 Jun-97 ----------- ----------- ----------- ----------- ----------- Pretax Income, as reported $ 2,620,000 $ 2,070,000 $ 980,000 $ 1,030,000 $ 1,610,000 Pretax Adjustments Interest Expense -- -- -- $ (30,000) $ (10,000) ----------- ----------- ----------- ----------- ----------- Total Pretax Adjustments -- -- -- $ (30,000) $ (10,000) Adjusted EBIT $ 2,620,000 $ 2,070,000 $ 980,000 $ 1,000,000 $ 1,600,000 =========== =========== =========== =========== =========== Adjusted EBIT Margin 43.1% 33.1% 15.5% 17.2% 26.0% =========== =========== =========== =========== =========== Adjusted EBIT $ 2,620,000 $ 2,070,000 $ 980,000 $ 1,000,000 $ 1,600,000 Weight Factors 5 4 3 2 1 ----------- ----------- ----------- ----------- ----------- Weighted Adjusted Pretax Earnings $13,100,000 $ 8,280,000 $ 2,940,000 $ 2,000,000 $ 1,600,000 Sum of Weight Factors 15 Weighted Average Adjusted EBIT $ 1,861,333
ComStock Valuation Advisors, Inc. Exhibit B-2 FRONTIER ADJUSTERS OF AMERICA, INC. COST OF CAPITAL ANALYSIS AS OF APRIL 23, 2001 ASSUMPTIONS DETAILS FOR FRONTIER ADJUSTERS OF AMERICA, INC. Tax Rate 40.93% Percent Debt 10.00% Cost of Debt 8.00% Percent Equity 90.00% RISK FREE RATE 20 Year Treasuries (semi-annual rate) 5.78% 20 Year Treasuries (annualized rate) 5.86% LARGE CAP EQUITY RISK PREMIUM SBBI 2001 Rate 7.80% SMALL CAP EQUITY RISK PREMIUM SBBI 2001 Rate 2.60% BETA ESTIMATE Levered Percent Tax Unlev. Company Beta Debt/MC Rate Beta ------- ---- ------- ---- ---- ARTHUR J.GALLAGHER & CO. 0.43 (0.0%) 35.0% 0.43 CHOICEPOINT, INC. 0.79 7.8% 43.3% 0.76 CRAWFORD & CO. 0.03 11.3% 38.4% N/A HALLMARK FINANCIAL SERVICES, INC. (0.21) 66.1% 38.9% N/A HILB ROGAL & HAMILTON CO. 0.07 18.4% 41.1% N/A INSPIRE INSURANCE SOLUTIONS, INC. 2.75 0.0% 18.1% 2.75 INSURANCE MGMT SOLUTIONS GROUP 2.08 4.6% 44.2% 2.02 KAYE GROUP, INC. 0.54 3.0% 30.1% 0.52 MEADOWBROOK INSURANCE GROUP, INC. (0.02) 64.5% 44.2% N/A PROGRESSIVE CORP. 1.15 13.0% 28.4% 1.04 ST. PAUL COS., INC. 0.78 17.4% 23.4% 0.67 STIRLING COOKE BROWN HOLDINGS, LTD. 0.92 0.0% 28.7% 0.92 ----- ----- First quartile 2.2% 0.64 Median 9.6% 0.84 Average 17.2% 1.14 Third quartile 17.7% 1.29 Ibbotson Median Adj. Beta for SIC 6411 0.34 Ibbotson Median Sum Beta for SIC 6411 0.66 Ibbotson SIC Composite Adj. Beta for SIC 6411 0.63 Ibbotson SIC Composite Sum Beta for SIC 6411 0.72 ----- Selected Unleveraged Beta 0.80 ===== Releveraged Beta based on Hamada Releveraging Formula 0.85 =====
ComStock Valuation Advisors, Inc. Exhibit B-1 FRONTIER ADJUSTERS OF AMERICA, INC. COST OF CAPITAL ANALYSIS AS OF APRIL 23, 2001 CAPITALIZATION RATES RELEVERAGED COST OF EQUITY CAPITAL Risk Free Rate 5.86% Market Risk Premium 7.80% Leveraged Beta 0.85 ------ Equity Risk Premium (Leveraged) 6.65% Small Company Premium 2.60% ------ Releveraged Cost of Equity Capital 15.11% ====== WEIGHTED AVERAGE COST OF CAPITAL (WACC) Weight Cost ------ ---- Leveraged Cost of Equity Capital 90.0% 15.1% 13.60% After Tax Cost of Debt 10.0% 4.7% 0.47% ------ Weighted Average Cost of Capital (WACC) 14.07% ====== CASH FLOW MULTIPLE WACC 14.07% Long-term cash flow growth rate 4.50% ------ Cash flow multiple = (1 + g)/(WACC - g) 10.9 ====== GROWTH RATE ANALYSIS Growth rate in residual year of cash flow forecast 4.0% CAGR for 20-year forecast period 5.0% ------ Average of data points 4.5% Selected long-term cash flow growth rate 4.5% ComStock Valuation Advisors, Inc. Exhibit B-2 FRONTIER ADJUSTERS OF AMERICA, INC. DISCOUNTED VALUE AS OF APRIL 23, 2001 ESTIMATED VALUE AS OF APRIL 23, 2001 Value of invested capital, minority basis $12,830,118 Debt outstanding 0 ----------- Equity value, minority basis $12,830,118 Premium for control of 35% 4,490,541 ----------- Equity value, freely-traded basis $17,320,660 Discount for risks associated with the thinly-traded market of 10% (1,732,066) ----------- Equity value, privately-held basis $15,588,594 =========== Rounded Value $15,590,000 =========== ComStock Valuation Advisors, Inc. Exhibit C-1 FRONTIER ADJUSTERS OF AMERICA, INC. DISCOUNTED VALUE AS OF APRIL 23, 2001 PRESENT VALUE CALCULATIONS
Projected Projected Projected Projected Projected Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 ----------- ----------- ----------- ----------- ----------- Operating Cash Flow $ 1,296,493 $ 1,137,550 $ 1,486,164 $ 1,480,152 $ 1,523,225 % to be reflected in valuation 67% 100% 100% 100% 100% ----------- ----------- ----------- ----------- ----------- Operating cash flow $$ reflected in valuation $ 864,329 $ 1,137,550 $ 1,486,164 $ 1,480,152 $ 1,523,225 Discount Periods 0.33 1.33 2.33 3.33 4.33 Discount Rate 14.07% 14.07% 14.07% 14.07% 14.07% Discount Factor 0.95706 0.83898 0.73546 0.64472 0.56518 ----------- ----------- ----------- ----------- ----------- Discounted Free Cash Flows $ 827,214 $ 954,381 $ 1,093,014 $ 954,284 $ 860,896 Present value of interim cash flows $ 4,689,790 Residual Value Calculation: Residual Cash Flow $ 1,523,225 Long-term growth rate of cash flows 4.0% Future Value of Residual Cash Flows $15,724,667 Discount Factor (based on five years) 0.51768 ----------- Present Value of Residual Cash Flows $ 8,140,328 Present Value of Interim Cash Flows $ 4,689,790 Present Value of Residual Cash Flows 8,140,328 ----------- Value of invested capital, minority basis $12,830,118 ===========
ComStock Valuation Advisors, Inc. Exhibit C-2 FRONTIER ADJUSTERS OF AMERICA, INC. DISCOUNTED VALUE AS OF APRIL 23, 2001 PROJECTED CASH FLOW
Projected Projected Projected Projected Projected Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 ----------- ----------- ----------- ----------- ----------- CASH FLOWS FROM OPERATIONS Adjusted Net Income $ 1,588,600 $ 1,606,000 $ 1,647,000 $ 1,689,000 $ 1,733,000 Non-cash Items: Depreciation 162,000 170,000 179,000 188,000 197,000 ----------- ----------- ----------- ----------- ----------- SUBTOTAL CASH FLOW FROM OPERATIONS $ 1,583,267 $ 1,610,616 $ 1,660,591 $ 1,711,586 $ 1,764,558 Changes in Working Capital: Receivables (138,000) (339,000) (45,000) (47,000) (48,000) A/P and Accrued Liabilities 13,226 35,934 49,573 3,567 3,667 ----------- ----------- ----------- ----------- ----------- SUBTOTAL CHANGES IN WORKING CAPITAL ($ 124,774) ($ 303,066) $ 4,573 ($ 43,433) ($ 44,333) Cash Flows From Investment Activities: Property and Equipment Additions, Net (162,000) (170,000) (179,000) (188,000) (197,000) ----------- ----------- ----------- ----------- ----------- CASH FLOW AVAILABLE FOR DEBT & DISTRIBUTIONS $ 1,296,493 $ 1,137,550 $ 1,486,164 $ 1,480,152 $ 1,523,225
ComStock Valuation Advisors, Inc. Exhibit C-3 FRONTIER ADJUSTERS OF AMERICA, INC. DISCOUNTED VALUE AS OF APRIL 23, 2001 PROJECTED INCOME STATEMENT
Adjusted Projected Projected Projected Projected Projected Jun-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 ----------- ----------- ----------- ----------- ----------- ----------- Total Revenues $ 6,080,000 $ 5,890,000 $ 6,067,000 $ 6,249,000 $ 6,436,000 $ 6,629,000 Annual Increase in Revenues 3.0% 3.0% 3.0% 3.0% Operating Expenses 3,490,000 3,322,600 3,458,000 3,562,000 3,669,000 3,779,000 ----------- ----------- ----------- ----------- ----------- ----------- EBITDA $ 2,590,000 $ 2,567,400 $ 2,609,000 $ 2,687,000 $ 2,767,000 $ 2,850,000 EBITDA Margin 42.6% 43.6% 43.0% 43.0% 43.0% 43.0% Depreciation 200,000 162,000 170,000 179,000 188,000 197,000 ----------- ----------- ----------- ----------- ----------- ----------- EBIT $ 2,390,000 $ 2,405,400 $ 2,439,000 $ 2,508,000 $ 2,579,000 $ 2,653,000 EBIT Margin 39.3% 40.8% 40.2% 40.1% 40.1% 40.0% Other Income/(Expense) 230,000 283,200 280,000 280,000 280,000 280,000 ----------- ----------- ----------- ----------- ----------- ----------- Pretax Income $ 2,620,000 $ 2,688,600 $ 2,719,000 $ 2,788,000 $ 2,859,000 $ 2,933,000 Corporate income taxes (1,072,000) (1,100,000) (1,113,000) (1,141,000) (1,170,000) (1,200,000) ----------- ----------- ----------- ----------- ----------- ----------- Net Income $ 1,548,000 $ 1,588,600 $ 1,606,000 $ 1,647,000 $ 1,689,000 $ 1,733,000 =========== =========== =========== =========== =========== =========== Effective tax rate 40.9% 40.9% 40.9% 40.9% 40.9% 40.9% =========== =========== =========== =========== =========== ===========
ComStock Valuation Advisors, Inc. Exhibit C-4 FRONTIER ADJUSTERS OF AMERICA, INC. DISCOUNTED CASH FLOW METHOD PROJECTED BALANCE SHEET
Actual Projected Projected Projected Projected Projected ASSETS Jun-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 ------------ ------------ ------------ ------------ ------------ ------------ Cash & Equivalents (before distributions) $ 3,420,000 $ 4,883,826 $ 6,197,760 $ 7,860,333 $ 9,517,900 $ 11,218,567 Net Receivables 1,040,000 1,178,000 1,517,000 1,562,000 1,609,000 1,657,000 Receivables Turnover 5.8 5.0 4.0 4.0 4.0 4.0 Other Current Assets 510,000 510,000 510,000 510,000 510,000 510,000 ------------ ------------ ------------ ------------ ------------ ------------ Total Current Assets $ 4,970,000 $ 6,571,826 $ 8,224,760 $ 9,932,333 $ 11,636,900 $ 13,385,567 Net Plant, Property & Equipment 1,560,000 1,560,000 1,560,000 1,560,000 1,560,000 1,560,000 Other Assets 1,060,000 1,060,000 1,060,000 1,060,000 1,060,000 1,060,000 ------------ ------------ ------------ ------------ ------------ ------------ Total Assets $ 7,590,000 $ 9,191,826 $ 10,844,760 $ 12,552,333 $ 14,256,900 $ 16,005,567 ============ ============ ============ ============ ============ ============ LIABILITIES Current Portion of Outstanding Debt $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Accounts Payable 20,000 33,226 69,160 118,733 122,300 125,967 Accounts Payable Turnover 174.5 100.0 50.0 30.0 30.0 30.0 Accrued & Other Expenses 370,000 370,000 381,000 392,000 404,000 416,000 ------------ ------------ ------------ ------------ ------------ ------------ Total Current Liabilities $ 390,000 $ 403,226 $ 450,160 $ 510,733 $ 526,300 $ 541,967 Long Term Debt $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 ------------ ------------ ------------ ------------ ------------ ------------ Total Liabilities $ 390,000 $ 403,226 $ 450,160 $ 510,733 $ 526,300 $ 541,967 EQUITY Common Stock & Capital Surplus $ 2,190,000 $ 2,190,000 $ 2,190,000 $ 2,190,000 $ 2,190,000 $ 2,190,000 Retained Earnings 5,190,000 6,778,600 8,384,600 10,031,600 11,720,600 13,453,600 Deductions from Equity (180,000) (180,000) (180,000) (180,000) (180,000) (180,000) ------------ ------------ ------------ ------------ ------------ ------------ Total Equity $ 7,200,000 $ 8,788,600 $ 10,394,600 $ 12,041,600 $ 13,730,600 $ 15,463,600 ------------ ------------ ------------ ------------ ------------ ------------ Total Liabilities & Equity $ 7,590,000 $ 9,191,826 $ 10,844,760 $ 12,552,333 $ 14,256,900 $ 16,005,567 ============ ============ ============ ============ ============ ============
ComStock Valuation Advisors, Inc. Exhibit C-5 FRONTIER ADJUSTERS OF AMERICA, INC. GUIDELINE COMPANIES METHOD USING LEVERAGED RATIOS SUMMARY OF VALUE AS OF APRIL 23, 2001
Frontier Market Value Method Data Multiple Estimate - ------ ----------- ----------- ----------- MARKET EQUITY TO BOOK EQUITY $ 7,200,000 135.0% $ 9,720,000 MARKET EQUITY TO SALES $ 6,080,000 125.0% $ 7,600,000 MARKET EQUITY TO ADJUSTED EARNINGS Current $ 1,547,634 10.2 $15,723,961 Three Year Weighted Average $ 1,277,881 9.8 $12,574,349 Five Year Weighted Average $ 1,102,246 11.4 $12,609,697 MARKET EQUITY TO ADJUSTED CASH FLOW Current $ 1,747,634 7.4 $12,862,586 Three Year Weighted Average $ 1,496,214 7.7 $11,490,926 Five Year Weighted Average $ 1,330,913 8.3 $11,073,195 MEDIAN $12,032,638 ----------- Equity value, minority basis $12,032,638 Premium for Control of 35% 4,211,423 ----------- Equity value, freely-traded basis $16,244,061 Discount for risks associated with the thinly-traded market of 10% (1,624,406) ----------- Equity value, privately-held basis $14,619,655 =========== ROUNDED VALUE $14,620,000 ===========
ComStock Valuation Advisors, Inc. Exhibit D-1 FRONTIER ADJUSTERS OF AMERICA, INC. Guideline Companies Method Using Leveraged Ratios Market Equity to Book Equity
Market Recent Return on Equity Book Equity Book Guideline Company (MM's) (MM's) ME/BE Equity - ----------------- ------ ------ ----- ------ ARTHUR J.GALLAGHER & CO $2,021.1 $ 301.0 671.5% 27.5% CHOICEPOINT, INC $2,142.1 $ 357.8 598.7% 16.8% CRAWFORD & CO $ 477.4 $ 217.8 219.2% 16.3% HALLMARK FINANCIAL SERVICES, INC $ 6.4 $ 12.2 52.6% 10.1% HILB ROGAL & HAMILTON CO $ 481.5 $ 88.2 545.8% 30.7% INSPIRE INSURANCE SOLUTIONS, INC $ 14.5 $ 75.5 19.3% (5.4%) INSURANCE MGMT SOLUTIONS GROUP $ 6.4 $ 32.9 19.4% (1.4%) KAYE GROUP, INC $ 110.5 $ 54.0 204.6% 18.3% MEADOWBROOK INSURANCE GROUP, INC $ 28.5 $ 102.7 27.8% 0.6% PROGRESSIVE CORP $7,039.7 $2,795.0 251.9% 1.8% ST. PAUL COS., INC $9,352.2 $7,047.0 132.7% 15.5% STIRLING COOKE BROWN HOLDINGS, LTD $ 9.6 $ 78.6 12.2% (11.0%) - ------------------------------------------------------------------------------------------- 1st Quartile 25.7% 0.1% Median 168.6% 12.8% Average 229.6% 10.0% 3rd Quartile 325.3% 17.2% Frontier -------- Selected Ratio 168.6% 21.5% Risk Adjustment Factor 80.0% ------ Risk Adjusted Selected Ratio 135.0% ======
ComStock Valuation Advisors, Inc. Exhibit D-2 FRONTIER ADJUSTERS OF AMERICA, INC. Guideline Companies Method Using Leveraged Ratios Market Equity to Sales
Market Recent Net Equity Sales ME/ Profit Guideline Company (MM's) (MM's) Sales Margin - ----------------- ------ ------ ----- ------ ARTHUR J.GALLAGHER & CO $2,021.1 $ 712.6 283.6% 11.6% CHOICEPOINT, INC $2,142.1 $ 558.7 383.4% 10.8% CRAWFORD & CO $ 477.4 $ 712.2 67.0% 5.0% HALLMARK FINANCIAL SERVICES, INC $ 6.4 $ 23.5 27.2% 5.2% HILB ROGAL & HAMILTON CO $ 481.5 $ 262.1 183.7% 10.3% INSPIRE INSURANCE SOLUTIONS, INC $ 14.5 $ 126.6 11.5% (3.2%) INSURANCE MGMT SOLUTIONS GROUP $ 6.4 $ 66.0 9.7% (0.7%) KAYE GROUP, INC $ 110.5 $ 75.3 146.8% 13.1% MEADOWBROOK INSURANCE GROUP, INC $ 28.5 $ 210.0 13.6% 0.3% PROGRESSIVE CORP $7,039.7 $6,610.4 106.5% 0.8% ST. PAUL COS., INC $9,352.2 $8,330.0 112.3% 13.1% STIRLING COOKE BROWN HOLDINGS, LTD $ 9.6 $ 51.1 18.8% (17.0%) - --------------------------------------------------------------------------------------------- 1st Quartile 17.5% 0.1% Median 86.8% 5.1% Average 113.7% 4.1% 3rd Quartile 156.0% 11.0% Frontier -------- Selected Ratio 156.0% 25.5% Risk Adjustment Factor 80.0% ----- Risk Adjusted Selected Ratio 125.0% =====
ComStock Valuation Advisors, Inc. Exhibit D-3 FRONTIER ADJUSTERS OF AMERICA, INC. Guideline Companies Method Using Leveraged Ratios Market Equity to Recent Adjusted Earnings Recent Market Adjusted ME/ Equity Earnings Current Guideline Company (MM's) (MM's) Adj. Earn. - ----------------- ------ ------ ---------- ARTHUR J.GALLAGHER & CO $2,021.1 $ 82.7 24.4 CHOICEPOINT, INC $2,142.1 $ 52.9 N/A CRAWFORD & CO $ 477.4 $ 35.6 13.4 HALLMARK FINANCIAL SERVICES, INC $ 6.4 $ 0.6 10.3 HILB ROGAL & HAMILTON CO $ 481.5 $ 22.1 21.8 INSPIRE INSURANCE SOLUTIONS, INC $ 14.5 $ (4.1) N/A INSURANCE MGMT SOLUTIONS GROUP $ 6.4 $ (0.5) N/A KAYE GROUP, INC $ 110.5 $ 9.2 12.0 MEADOWBROOK INSURANCE GROUP, INC $ 28.5 $ (2.5) N/A PROGRESSIVE CORP $7,039.7 $ 1.9 N/A ST. PAUL COS., INC $9,352.2 $1,031.0 9.1 STIRLING COOKE BROWN HOLDINGS, LTD $ 9.6 $ (8.7) N/A - -------------------------------------------------------------------------------- 1st Quartile 10.7 Median 12.7 Average 15.2 3rd Quartile 19.7 Selected Ratio 12.7 Risk Adjustment Factor 80.0% ----- Risk Adjusted Selected Ratio 10.2 ===== ComStock Valuation Advisors, Inc. Exhibit D-4 FRONTIER ADJUSTERS OF AMERICA, INC. Guideline Companies Method Using Leveraged Ratios Market Equity to Historical Adjusted Earnings
3 Year 5 Year Wgt. Avg. ME/ Wgt. Avg. ME/ Market Adjusted 3 Year Adjusted 5 Year Equity Earnings Wgt. Avg. Earnings Wgt. Avg. Guideline Company (MM's) (MM's) Adj. Earn. (MM's) Adj. Earn. - ----------------- ------ ------ ---------- ------ ---------- ARTHUR J.GALLAGHER & CO $2,021.1 $ 73.5 27.5 $ 66.8 30.2 CHOICEPOINT, INC $2,142.1 $ 44.8 N/A $ 39.2 N/A CRAWFORD & CO $ 477.4 $ 38.7 12.3 $ 41.5 11.5 HALLMARK FINANCIAL SERVICES, INC $ 6.4 $ 0.5 11.7 $ 0.4 14.3 HILB ROGAL & HAMILTON CO $ 481.5 $ 20.4 23.6 $ 18.3 26.3 INSPIRE INSURANCE SOLUTIONS, INC $ 14.5 $ (0.2) N/A $ 1.5 9.5 INSURANCE MGMT SOLUTIONS GROUP $ 6.4 $ 1.5 4.2 N/A N/A KAYE GROUP, INC $ 110.5 $ 8.3 13.3 $ 7.3 15.1 MEADOWBROOK INSURANCE GROUP, INC $ 28.5 $ (2.7) N/A $ 0.7 N/A PROGRESSIVE CORP $7,039.7 $ 174.4 N/A $ 243.9 28.9 ST. PAUL COS., INC $9,352.2 $ 862.9 10.8 $ 792.0 11.8 STIRLING COOKE BROWN HOLDINGS, LTD $ 9.6 $ (0.5) N/A $ 3.6 2.7 - ------------------------------------------------------------------------------------------------------- 1st Quartile 11.3 11.5 Median 12.3 14.3 Average 14.8 16.7 3rd Quartile 18.4 26.3 Selected Ratio 12.3 14.3 Risk Adjustment Factor 80.0% 80.0% ----- ---- Risk Adjusted Selected Ratio 9.8 11.4 ===== ====
ComStock Valuation Advisors, Inc. Exhibit D-5 FRONTIER ADJUSTERS OF AMERICA, INC. Guideline Companies Method Using Leveraged Ratios Market Equity to Recent Adjusted Cash Flow Recent Market Adjusted ME/ Equity CF Current Guideline Company (MM's) (MM's) Adj. CF - ----------------- ------ ------ ------- ARTHUR J.GALLAGHER & CO $2,021.1 $ 99.7 20.3 CHOICEPOINT, INC $2,142.1 $ 101.7 21.1 CRAWFORD & CO $ 477.4 $ 50.3 9.5 HALLMARK FINANCIAL SERVICES, INC $ 6.4 $ 1.0 6.7 HILB ROGAL & HAMILTON CO $ 481.5 $ 35.1 13.7 INSPIRE INSURANCE SOLUTIONS, INC $ 14.5 $ 4.3 3.4 INSURANCE MGMT SOLUTIONS GROUP $ 6.4 $ 4.9 1.3 KAYE GROUP, INC $ 110.5 $ 12.4 8.9 MEADOWBROOK INSURANCE GROUP, INC $ 28.5 $ 2.3 12.2 PROGRESSIVE CORP $7,039.7 $ 82.1 N/A ST. PAUL COS., INC $9,352.2 $1,140.0 8.2 STIRLING COOKE BROWN HOLDINGS, LTD $ 9.6 $ (6.2) N/A - -------------------------------------------------------------------------------- 1st Quartile 7.1 Median 9.2 Average 10.5 3rd Quartile 13.3 Selected Ratio 9.2 Risk Adjustment Factor 80.0% ---- Risk Adjusted Selected Ratio 7.4 ==== ComStock Valuation Advisors, Inc. Exhibit D-6 FRONTIER ADJUSTERS OF AMERICA, INC. Guideline Companies Method Using Leveraged Ratios Market Equity to Historical Adjusted Cash Flow
3 Year 5 Year Wgt. Avg. ME/ Wgt. Avg. ME/ Market Adjusted 3 Year Adjusted 5 Year Equity CF Wgt. Avg. CF Wgt. Avg. Guideline Company (MM's) (MM's) Unlev. CF (MM's) Unlev. CF - ----------------- ------ ------ --------- ------ --------- ARTHUR J.GALLAGHER & CO $2,021.1 $ 89.1 22.7 $ 81.1 24.9 CHOICEPOINT, INC $2,142.1 $ 87.0 24.6 $ 76.8 27.9 CRAWFORD & CO $ 477.4 $ 54.2 8.8 $ 57.0 8.4 HALLMARK FINANCIAL SERVICES, INC $ 6.4 $ 0.9 7.3 $ 0.8 8.1 HILB ROGAL & HAMILTON CO $ 481.5 $ 33.9 14.2 $ 31.3 15.4 INSPIRE INSURANCE SOLUTIONS, INC $ 14.5 $ 8.1 1.8 $ 8.6 1.7 INSURANCE MGMT SOLUTIONS GROUP $ 6.4 $ 6.8 0.9 N/A N/A KAYE GROUP, INC $ 110.5 $ 11.3 9.8 $ 10.2 10.9 MEADOWBROOK INSURANCE GROUP, INC $ 28.5 $ 1.8 15.7 $ 4.8 6.0 PROGRESSIVE CORP $7,039.7 $ 247.8 28.4 $ 307.5 22.9 ST. PAUL COS., INC $9,352.2 $ 982.9 9.5 $ 903.1 10.4 STIRLING COOKE BROWN HOLDINGS, LTD $ 9.6 $ 2.0 4.8 $ 6.0 1.6 - ---------------------------------------------------------------------------------------------------- 1st Quartile 6.6 7.0 Median 9.6 10.4 Average 12.4 12.6 3rd Quartile 17.4 19.1 Selected Ratio 9.6 10.4 Risk Adjustment Factor 80.0% 80.0% ------ ----- Risk Adjusted Selected Ratio 7.7 8.3 ====== =====
ComStock Valuation Advisors, Inc. Exhibit D-7 FRONTIER ADJUSTERS OF AMERICA, INC. Mergers & Acquisitions Method Summary of Value as of April 23, 2001
Revenue Lev. Income Cash Flow Method Method Method Average ------ ------ ------ ------- Frontier Adjusters of America, Inc. Financial Data $ 6,080,000 $ 1,547,634 $ 1,747,634 Multiple selected from market data 0.9 19.1 9.3 Risk adjustment factor 20% (0.2) (3.8) (1.9) ----------- ----------- ----------- Multiple applied to Frontier Adjusters of America, Inc. 0.7 15.3 7.5 ----------- ----------- ----------- Equity value, privately-held control basis $ 4,169,143 $23,628,000 $13,038,480 ROUNDED VALUE $ 4,170,000 $23,630,000 $13,040,000 $13,610,000 =========== =========== =========== ===========
ComStock Valuation Advisors, Inc. Exhibit E-1 FRONTIER ADJUSTERS OF AMERICA, INC. Mergers & Acquisitions Method Market Data
Leveraged Cash Book Equity Revenue Income Flow Value Price Acquired Company Date ($000's) ($000's) ($000's) ($000's) ($000's) - ---------------- ---- -------- -------- -------- -------- -------- Premier Express Claims, Inc. 6/28/2000 $4,133 $(159) $(320) $79 $1,330 Prime Capital Services, Inc. 4/5/1999 19,418 295 802 285 8,800 American Phoenix Corporation 3/3/1999 72,900 146 5,900 (16,000) 94,600 MedCap Medical Cost Management, Inc. 2/15/1999 4,667 524 1,303 1,600 10,000 Subro-Audit, Inc. 1/25/1999 7,067 504 1,199 2,500 32,900 M&N Risk Management, Inc. 12/31/1998 7,000 583 801 (473) 6,000 Arrow Claims Management, Inc. 12/1/1998 16,267 513 273 47 13,500 Kizorek, Inc. 9/1/1998 14,500 1,200 1,400 3,600 9,000 Coverdell & Company, Inc. 4/2/1998 14,000 (194) (243) 1,900 16,600 First quartile multiples Median multiples Average multiples Third quartile multiples =================================================================================== EQUITY VALUATION MULTIPLES -------------------------------------------- Acquired Company Revenue Lev. Inc. Cash Flow Book Value - ---------------- ------- --------- --------- ---------- Premier Express Claims, Inc. 0.3 N/A N/A 16.8 Prime Capital Services, Inc. 0.5 29.9 11.0 N/A American Phoenix Corporation 1.3 N/A 16.0 N/A MedCap Medical Cost Management, Inc. 2.1 19.1 7.7 6.3 Subro-Audit, Inc. 4.7 N/A 27.4 13.2 M&N Risk Management, Inc. 0.9 10.3 7.5 N/A Arrow Claims Management, Inc. 0.8 26.3 N/A N/A Kizorek, Inc. 0.6 7.5 6.4 2.5 Coverdell & Company, Inc. 1.2 N/A N/A 8.7 -------------------------------------------- First quartile multiples 0.6 10.3 7.5 6.3 Median multiples 0.9 19.1 9.3 8.7 Average multiples 1.4 18.6 12.7 9.5 Third quartile multiples 1.3 26.3 14.8 13.2 ===================================================================================
ComStock Valuation Advisors, Inc. Exhibit E-2 FRONTIER ADJUSTERS OF AMERICA, INC. Comparative Ratio Analysis Liquidity Ratios Current Quick Receivable Guideline Company Ratio Ratio Turnover - ----------------- ----- ----- -------- ARTHUR J.GALLAGHER & CO 1.06 0.89 2.06 CHOICEPOINT, INC 1.64 1.43 4.70 CRAWFORD & CO 1.70 1.59 3.01 HALLMARK FINANCIAL SERVICES, INC 3.91 3.91 0.77 HILB ROGAL & HAMILTON CO 0.87 0.83 3.19 INSPIRE INSURANCE SOLUTIONS, INC 2.07 1.59 4.52 INSURANCE MGMT SOLUTIONS GROUP 2.00 1.76 9.78 KAYE GROUP, INC 1.28 1.24 2.05 MEADOWBROOK INSURANCE GROUP, INC N/A N/A 0.96 PROGRESSIVE CORP 3.14 3.14 3.09 ST. PAUL COS., INC 7.23 7.21 1.00 STIRLING COOKE BROWN HOLDINGS, LTD 1.10 1.10 0.06 Frontier Adjusters of America, Inc. 9.40 8.33 4.03 COMPARABLE MEDIAN 1.70 1.59 2.54 ----- ----- ----- RANKING BY RATIO 1 1 4 NUMBER OF OBSERVATIONS 12 12 13 ----- ----- ----- ComStock Valuation Advisors, Inc. Exhibit F-1 FRONTIER ADJUSTERS OF AMERICA, INC. Comparative Ratio Analysis Activity Ratios
Asset Sales to Sales to Sales to Sales to Guideline Company Turnover Net PP&E Equity W.C. T. Assets - ----------------- -------- -------- ------ ---- --------- ARTHUR J.GALLAGHER & CO 0.79 17.50 2.37 19.76 0.76 CHOICEPOINT, INC 0.88 8.27 1.56 8.17 0.80 CRAWFORD & CO 1.48 16.64 3.27 6.54 1.55 HALLMARK FINANCIAL SERVICES, INC 0.33 N/A 1.93 0.66 0.31 HILB ROGAL & HAMILTON CO 0.78 15.89 2.97 (13.43) 0.74 INSPIRE INSURANCE SOLUTIONS, INC 1.06 16.10 1.68 5.38 1.29 INSURANCE MGMT SOLUTIONS GROUP 1.66 7.91 2.00 10.07 1.64 KAYE GROUP, INC 0.51 17.40 1.39 4.48 0.50 MEADOWBROOK INSURANCE GROUP, INC 0.36 N/a 2.05 0.82 0.33 PROGRESSIVE CORP 0.65 13.32 2.37 4.04 0.63 ST. PAUL COS., INC 0.21 16.17 1.18 0.92 0.20 STIRLING COOKE BROWN HOLDINGS, LTD 0.05 N/A 0.65 0.56 0.05 Frontier Adjusters of America, Inc. 0.66 3.86 0.99 1.77 0.93 COMPARABLE MEDIAN 0.72 16.10 1.97 4.26 0.69 ----- ----- ----- ----- ----- RANKING BY RATIO 7 10 12 8 4 NUMBER OF OBSERVATIONS 13 10 13 13 13 ----- ----- ----- ----- -----
ComStock Valuation Advisors, Inc. Exhibit F-2 FRONTIER ADJUSTERS OF AMERICA, INC. Comparative Ratio Analysis Profitability Ratios Operating 5 Year Net 5 Year Profit Average Profit Average Guideline Company Margin O.P.M. Margin N.P.M. - ----------------- ------ ------ ------ ------ ARTHUR J.GALLAGHER & CO 19.77 18.39 16.11 11.73 CHOICEPOINT, INC 29.75 21.63 11.56 8.54 CRAWFORD & CO 12.00 12.91 (3.13) 4.02 HALLMARK FINANCIAL SERVICES, INC 4.93 8.05 (1.53) 0.77 HILB ROGAL & HAMILTON CO 25.89 22.52 6.40 7.56 INSPIRE INSURANCE SOLUTIONS, INC (26.31) 6.14 (72.15) (14.72) INSURANCE MGMT SOLUTIONS GROUP 4.17 14.74 (3.44) 3.98 KAYE GROUP, INC 22.97 19.24 12.40 9.53 MEADOWBROOK INSURANCE GROUP, INC 2.17 8.16 1.15 4.38 PROGRESSIVE CORP 6.93 12.13 3.36 6.91 ST. PAUL COS., INC 17.63 15.18 11.32 8.95 STIRLING COOKE BROWN HOLDINGS, LTD (11.75) 15.78 (17.09) 7.01 Frontier Adjusters of America, Inc. 33.55 26.58 19.81 13.72 COMPARABLE MEDIAN 9.47 14.96 2.26 6.96 ------ ----- ------ ---- RANKING BY RATIO 1 1 1 1 NUMBER OF OBSERVATIONS 13 13 13 13 ------ ----- ------ ---- ComStock Valuation Advisors, Inc. Exhibit F-3 FRONTIER ADJUSTERS OF AMERICA, INC Comparative Ratio Analysis Performance Ratios
Return 5 Year Return 5 Year Return 5 Year on Average on Average on Average Guideline Company Assets R.O.A. Equity R.O.E. Investment R.O.I. - ----------------- ------ ------ ------ ------ ---------- ------ ARTHUR J.GALLAGHER & CO 8.82 8.02 27.49 29.99 27.49 29.93 CHOICEPOINT, INC 5.03 6.96 9.85 17.20 6.53 10.30 CRAWFORD & CO 5.53 8.55 11.64 15.99 9.43 14.84 HALLMARK FINANCIAL SERVICES, INC 0.81 0.51 5.11 2.59 2.52 2.17 HILB ROGAL & HAMILTON CO 6.26 6.73 25.08 26.14 11.56 13.60 INSPIRE INSURANCE SOLUTIONS, INC (25.88) (7.86) (33.56) (24.85) (33.56) (24.86) INSURANCE MGMT SOLUTIONS GROUP (1.24) 8.49 (1.51) 514.61 (1.51) 15.84 KAYE GROUP, INC 6.04 4.10 17.01 15.00 16.55 12.99 MEADOWBROOK INSURANCE GROUP, INC (0.39) 1.36 (2.39) 2.94 (1.59) 3.22 PROGRESSIVE CORP 0.02 3.75 0.07 13.18 0.05 9.74 ST. PAUL COS., INC 2.47 2.18 14.71 11.65 11.41 9.32 STIRLING COOKE BROWN HOLDINGS, LTD (1.30) 1.59 (18.49) 8.04 (18.49) 5.76 Frontier Adjusters of America, Inc. 18.45 10.81 19.68 13.73 19.68 13.68 COMPARABLE MEDIAN 1.64 3.93 7.48 14.09 4.53 10.02 ------ ----- ------ ------ ------ ------ RANKING BY RATIO 1 1 3 7 2 4 NUMBER OF OBSERVATIONS 13 13 13 13 13 13 - -------------------------------------------------------------------------------------------------------
ComStock Valuation Advisors, Inc. Exhibit F-4 FRONTIER ADJUSTERS OF AMERICA, INC. COMPARATIVE RATIO ANALYSIS GROWTH RATES-INCOME STATEMENT
Latest Year 5 Year Latest Year 5 Year Latest Year 5 Year Sales Compound Op. Profit Compound Net Income Compound Guideline Company Growth Sales Gr. Growth O.P. Gr. Growth N.I. Gr. - ----------------- ------ --------- ------ -------- ------ -------- ARTHUR J.GALLAGHER & CO. 17.6 11.6 18.9 14.5 22.1 14.8 CHOICEPOINT, INC. 29.9 11.2 33.8 21.0 (10.5) 18.8 CRAWFORD & CO. 1.5 3.2 (16.0) (0.8) (35.4) (6.8) HALLMARK FINANCIAL SERVICES, INC. 22.5 11.3 5.4 6.3 (20.8) (13.1) HILB ROGAL & HAMILTON CO. 15.4 12.1 15.6 18.9 13.6 13.3 INSPIRE INSURANCE SOLUTIONS, INC. (9.9) N/A (139.2) N/A 28.7 N/A INSURANCE MGMT SOLUTIONS GROUP (7.5) N/A (103.2) N/A (115.6) N/A KAYE GROUP, INC. 9.5 6.3 22.2 11.3 22.4 12.1 MEADOWBROOK INSURANCE GROUP, INC. 20.0 18.5 (97.6) N/A (68.7) N/A PROGRESSIVE CORP. 8.0 17.1 (91.3) (36.3) (99.4) (62.3) ST. PAUL COS., INC. 10.1 9.0 33.5 17.4 33.1 14.8 STIRLING COOKE BROWN HOLDINGS, LTD. (24.7) 21.8 (230.1) N/A 126.8 N/A Frontier Adjusters of America, Inc. (2.9) 1.5 27.1 6.9 27.4 6.6 COMPARABLE MEDIAN 9.8 11.4 (5.3) 12.9 1.5 12.7 ------ ------ ------ ------ ------ ------ RANKING BY RATIO 10 11 3 6 4 6 NUMBER OF OBSERVATIONS 13 11 13 9 13 9 ------ ------ ------ ------ ------ ------
ComStock Valuation Advisors, Inc. Exhibit F-5 FRONTIER ADJUSTERS OF AMERICA, INC. COMPARATIVE RATIO ANALYSIS GROWTH RATES-BALANCE SHEET
Latest Year 5 Year Latest Year 5 Year Asset Compound Equity Compound Guideline Company Growth Asset Gr. Growth Equity Gr. - ----------------- ------ --------- ------ ---------- ARTHUR J.GALLAGHER & CO. 6.1 13.6 24.1 20.6 CHOICEPOINT, INC. 31.5 28.4 76.3 27.9 CRAWFORD & CO. (3.3) 4.5 (13.0) (0.3) HALLMARK FINANCIAL SERVICES, INC. 26.4 5.0 4.0 3.3 HILB ROGAL & HAMILTON CO. 11.1 16.7 23.9 9.3 INSPIRE INSURANCE SOLUTIONS, INC. (25.9) N/A (27.7) N/A INSURANCE MGMT SOLUTIONS GROUP 1.6 N/A 0.1 N/A KAYE GROUP, INC. 1.9 (2.7) 14.3 18.7 MEADOWBROOK INSURANCE GROUP, INC. 14.4 21.2 2.2 2.2 PROGRESSIVE CORP. 8.1 14.4 1.5 13.6 ST. PAUL COS., INC. 7.2 16.2 8.9 13.6 STIRLING COOKE BROWN HOLDINGS, LTD. 10.7 61.1 (7.3) 62.0 Frontier Adjusters of America, Inc. 12.9 2.0 14.3 2.9 COMPARABLE MEDIAN 7.6 15.3 3.1 13.6 ------ ------ ------ ------ RANKING BY RATIO 4 10 5 9 NUMBER OF OBSERVATIONS 13 11 13 11 ------ ------ ------ ------
ComStock Valuation Advisors, Inc. Exhibit F-6 FRONTIER ADJUSTERS OF AMERICA, INC. STOCK PRICE HISTORY
Average Weekly Volume --------------------- Date Close Volume % - 1 Yr. % - 5 Yr. % of O/S ---- ----- ------ --------- --------- -------- 23-Apr-01 $1.2000 800 6.1% 3.1% 0.0089% 20-Apr-01 $1.2000 0 0.0% 0.0% 0.0000% 19-Apr-01 $1.2000 2,500 19.2% 9.7% 0.0279% 18-Apr-01 $1.2500 3,500 26.9% 13.5% 0.0391% 17-Apr-01 $1.1000 3,600 27.6% 13.9% 0.0402% 16-Apr-01 $1.1000 100 0.8% 0.4% 0.0011% 13-Apr-01 $1.1000 2,900 22.3% 11.2% 0.0324% 12-Apr-01 $1.1000 2,900 22.3% 11.2% 0.0324% 11-Apr-01 $1.2500 100 0.8% 0.4% 0.0011% 10-Apr-01 $1.1500 10,000 76.8% 38.7% 0.1116% 9-Apr-01 $1.2500 300 2.3% 1.2% 0.0033% 5-Apr-01 $1.3000 2,600 20.0% 10.1% 0.0290% 4-Apr-01 $1.1000 1,700 13.1% 6.6% 0.0190% 3-Apr-01 $1.1500 2,000 15.4% 7.7% 0.0223% 2-Apr-01 $1.2500 500 3.8% 1.9% 0.0056% 30-Mar-01 $1.3900 100 0.8% 0.4% 0.0011% 27-Mar-01 $1.3000 3,100 23.8% 12.0% 0.0346% 20 DAY STATISTICS ----------------- 26-Mar-01 $1.4500 1,100 8.4% 4.3% 0.0123% Avg. $1.2170 23-Mar-01 $1.3000 1,000 7.7% 3.9% 0.0112% High $1.4500 21-Mar-01 $1.2000 500 3.8% 1.9% 0.0056% Low $1.1000 - ---------------------------------------------------------------------------------------------- 20-Mar-01 $1.3000 200 1.5% 0.8% 0.0022% 19-Mar-01 $1.3000 2,300 17.7% 8.9% 0.0257% 16-Mar-01 $1.4000 1,100 8.4% 4.3% 0.0123% 15-Mar-01 $1.4500 8,100 62.2% 31.3% 0.0904% 14-Mar-01 $1.4000 2,500 19.2% 9.7% 0.0279% 9-Mar-01 $1.3500 3,000 23.0% 11.6% 0.0335% 7-Mar-01 $1.4000 1,200 9.2% 4.6% 0.0134% 6-Mar-01 $1.4000 1,900 14.6% 7.3% 0.0212% 5-Mar-01 $1.3500 1,400 10.8% 5.4% 0.0156% 27-Feb-01 $1.2700 300 2.3% 1.2% 0.0033% 26-Feb-01 $1.2000 7,700 59.1% 29.8% 0.0860% 23-Feb-01 $1.4500 7,000 53.8% 27.1% 0.0781% 21-Feb-01 $1.5500 2,000 15.4% 7.7% 0.0223% 20-Feb-01 $1.6500 2,100 16.1% 8.1% 0.0234% 16-Feb-01 $1.5500 4,000 30.7% 15.5% 0.0447% 15-Feb-01 $1.5500 100 0.8% 0.4% 0.0011% 14-Feb-01 $1.5500 600 4.6% 2.3% 0.0067% 12-Feb-01 $1.5600 6,300 48.4% 24.4% 0.0703% 9-Feb-01 $1.5500 1,200 9.2% 4.6% 0.0134% 7-Feb-01 $1.5500 400 3.1% 1.5% 0.0045% 6-Feb-01 $1.4500 1,000 7.7% 3.9% 0.0112% 5-Feb-01 $1.6500 2,000 15.4% 7.7% 0.0223% 2-Feb-01 $1.7400 1,600 12.3% 6.2% 0.0179% 1-Feb-01 $1.6000 1,000 7.7% 3.9% 0.0112% 31-Jan-01 $1.3500 300 2.3% 1.2% 0.0033% 30-Jan-01 $1.3500 200 1.5% 0.8% 0.0022% 26-Jan-01 $1.3125 500 3.8% 1.9% 0.0056% 24-Jan-01 $1.4375 2,300 17.7% 8.9% 0.0257% 23-Jan-01 $1.5625 1,200 9.2% 4.6% 0.0134% 22-Jan-01 $1.6875 1,500 11.5% 5.8% 0.0167% 18-Jan-01 $1.6250 700 5.4% 2.7% 0.0078% 12-Jan-01 $1.3750 1,300 10.0% 5.0% 0.0145% 11-Jan-01 $1.1875 2,300 17.7% 8.9% 0.0257% 9-Jan-01 $1.1250 1,000 7.7% 3.9% 0.0112% 5-Jan-01 $1.1250 6,500 49.9% 25.1% 0.0726% 3-Jan-01 $1.1875 200 1.5% 0.8% 0.0022% 2-Jan-01 $1.0625 1,800 13.8% 7.0% 0.0201% 29-Dec-00 $1.2500 3,700 28.4% 14.3% 0.0413% 28-Dec-00 $1.1250 4,900 37.6% 19.0% 0.0547% 27-Dec-00 $1.1250 5,600 43.0% 21.7% 0.0625%
ComStock Valuation Advisors, Inc. Exhibit G-1 FRONTIER ADJUSTERS OF AMERICA, INC. STOCK PRICE HISTORY Average Weekly Volume --------------------- Date Close Volume % - 1 Yr. % - 5 Yr. % of O/S ---- ----- ------ --------- --------- -------- 26-Dec-00 $1.1250 700 5.4% 2.7% 0.0078% 22-Dec-00 $1.1250 2,100 16.1% 8.1% 0.0234% 20-Dec-00 $1.2500 2,800 21.5% 10.8% 0.0313% 19-Dec-00 $1.2500 1,000 7.7% 3.9% 0.0112% 18-Dec-00 $1.3750 1,800 13.8% 7.0% 0.0201% 15-Dec-00 $1.3750 3,000 23.0% 11.6% 0.0335% 13-Dec-00 $1.1875 900 6.9% 3.5% 0.0100% 12-Dec-00 $1.0625 4,000 30.7% 15.5% 0.0447% 11-Dec-00 $1.2500 200 1.5% 0.8% 0.0022% 8-Dec-00 $1.2500 3,000 23.0% 11.6% 0.0335% 7-Dec-00 $1.3750 2,500 19.2% 9.7% 0.0279% 4-Dec-00 $1.6250 1,000 7.7% 3.9% 0.0112% 1-Dec-00 $1.8750 300 2.3% 1.2% 0.0033% 30-Nov-00 $1.6250 4,100 31.5% 15.9% 0.0458% 29-Nov-00 $1.8125 400 3.1% 1.5% 0.0045% 28-Nov-00 $1.8750 14,700 112.9% 56.9% 0.1641% 27-Nov-00 $1.5000 9,000 69.1% 34.8% 0.1005% 22-Nov-00 $1.2500 3,900 30.0% 15.1% 0.0435% 21-Nov-00 $1.1250 8,200 63.0% 31.7% 0.0915% 20-Nov-00 $1.1250 4,600 35.3% 17.8% 0.0514% 17-Nov-00 $1.6250 1,100 8.4% 4.3% 0.0123% 16-Nov-00 $1.6250 600 4.6% 2.3% 0.0067% 13-Nov-00 $1.7500 200 1.5% 0.8% 0.0022% 10-Nov-00 $1.6250 1,700 13.1% 6.6% 0.0190% 7-Nov-00 $1.8750 1,100 8.4% 4.3% 0.0123% 6-Nov-00 $1.7500 7,700 59.1% 29.8% 0.0860% 3-Nov-00 $1.5625 100 0.8% 0.4% 0.0011% 2-Nov-00 $1.5000 1,300 10.0% 5.0% 0.0145% 30-Oct-00 $1.5000 2,100 16.1% 8.1% 0.0234% 27-Oct-00 $1.5000 9,600 73.7% 37.1% 0.1072% 26-Oct-00 $1.7500 4,300 33.0% 16.6% 0.0480% 25-Oct-00 $1.7500 2,000 15.4% 7.7% 0.0223% 24-Oct-00 $1.9375 3,000 23.0% 11.6% 0.0335% 23-Oct-00 $2.0000 2,400 18.4% 9.3% 0.0268% 19-Oct-00 $2.1875 400 3.1% 1.5% 0.0045% 18-Oct-00 $2.1250 4,900 37.6% 19.0% 0.0547% 16-Oct-00 $2.0000 7,300 56.1% 28.2% 0.0815% 13-Oct-00 $2.7500 1,500 11.5% 5.8% 0.0167% 11-Oct-00 $2.7500 2,000 15.4% 7.7% 0.0223% 10-Oct-00 $2.7500 500 3.8% 1.9% 0.0056% 6-Oct-00 $2.8750 100 0.8% 0.4% 0.0011% 5-Oct-00 $3.0000 1,000 7.7% 3.9% 0.0112% 4-Oct-00 $2.8750 1,000 7.7% 3.9% 0.0112% 3-Oct-00 $2.7500 1,200 9.2% 4.6% 0.0134% 29-Sep-00 $2.5000 300 2.3% 1.2% 0.0033% 27-Sep-00 $2.6250 2,200 16.9% 8.5% 0.0246% 25-Sep-00 $2.8750 2,700 20.7% 10.4% 0.0301% 22-Sep-00 $2.8750 3,000 23.0% 11.6% 0.0335% 21-Sep-00 $2.9375 100 0.8% 0.4% 0.0011% 20-Sep-00 $3.0000 6,300 48.4% 24.4% 0.0703% 19-Sep-00 $3.2500 1,000 7.7% 3.9% 0.0112% 18-Sep-00 $3.1250 1,000 7.7% 3.9% 0.0112% 14-Sep-00 $3.2500 2,600 20.0% 10.1% 0.0290% 13-Sep-00 $3.1250 2,000 15.4% 7.7% 0.0223% 12-Sep-00 $3.3750 5,300 40.7% 20.5% 0.0592% 11-Sep-00 $3.5000 6,500 49.9% 25.1% 0.0726% 8-Sep-00 $3.3750 1,200 9.2% 4.6% 0.0134% ComStock Valuation Advisors, Inc. Exhibit G-2 FRONTIER ADJUSTERS OF AMERICA, INC. STOCK PRICE HISTORY Average Weekly Volume --------------------- Date Close Volume % - 1 Yr. % - 5 Yr. % of O/S ---- ----- ------ --------- --------- -------- 6-Sep-00 $3.5000 1,500 11.5% 5.8% 0.0167% 5-Sep-00 $3.7500 600 4.6% 2.3% 0.0067% 1-Sep-00 $3.7500 1,000 7.7% 3.9% 0.0112% 31-Aug-00 $3.7500 400 3.1% 1.5% 0.0045% 30-Aug-00 $3.5625 1,000 7.7% 3.9% 0.0112% 28-Aug-00 $3.8125 200 1.5% 0.8% 0.0022% 25-Aug-00 $3.6875 1,300 10.0% 5.0% 0.0145% 24-Aug-00 $3.6875 1,500 11.5% 5.8% 0.0167% 23-Aug-00 $3.8125 800 6.1% 3.1% 0.0089% 22-Aug-00 $3.5625 500 3.8% 1.9% 0.0056% 21-Aug-00 $3.6875 4,500 34.6% 17.4% 0.0502% 18-Aug-00 $4.0000 600 4.6% 2.3% 0.0067% 17-Aug-00 $4.0000 500 3.8% 1.9% 0.0056% 16-Aug-00 $4.0000 2,000 15.4% 7.7% 0.0223% 15-Aug-00 $3.9375 2,200 16.9% 8.5% 0.0246% 14-Aug-00 $3.8750 600 4.6% 2.3% 0.0067% 11-Aug-00 $3.7500 1,400 10.8% 5.4% 0.0156% 10-Aug-00 $3.7500 800 6.1% 3.1% 0.0089% 9-Aug-00 $3.6250 3,100 23.8% 12.0% 0.0346% 8-Aug-00 $3.6250 2,800 21.5% 10.8% 0.0313% 7-Aug-00 $3.6875 1,000 7.7% 3.9% 0.0112% 4-Aug-00 $3.5625 1,600 12.3% 6.2% 0.0179% 3-Aug-00 $3.5000 600 4.6% 2.3% 0.0067% 2-Aug-00 $3.5000 800 6.1% 3.1% 0.0089% 1-Aug-00 $3.5000 1,100 8.4% 4.3% 0.0123% 31-Jul-00 $3.5000 1,800 13.8% 7.0% 0.0201% 28-Jul-00 $3.5000 2,600 20.0% 10.1% 0.0290% 27-Jul-00 $3.3750 5,200 39.9% 20.1% 0.0580% 26-Jul-00 $3.3750 1,100 8.4% 4.3% 0.0123% 25-Jul-00 $3.5000 3,900 30.0% 15.1% 0.0435% 24-Jul-00 $3.5000 1,000 7.7% 3.9% 0.0112% 21-Jul-00 $3.5625 100 0.8% 0.4% 0.0011% 20-Jul-00 $3.5000 5,600 43.0% 21.7% 0.0625% 19-Jul-00 $3.5000 500 3.8% 1.9% 0.0056% 18-Jul-00 $3.5000 600 4.6% 2.3% 0.0067% 17-Jul-00 $3.3750 2,600 20.0% 10.1% 0.0290% 14-Jul-00 $3.2500 4,800 36.9% 18.6% 0.0536% 13-Jul-00 $3.5000 6,400 49.2% 24.8% 0.0714% 12-Jul-00 $4.0000 700 5.4% 2.7% 0.0078% 11-Jul-00 $4.0000 1,300 10.0% 5.0% 0.0145% 10-Jul-00 $3.8750 2,500 19.2% 9.7% 0.0279% 7-Jul-00 $3.8750 5,600 43.0% 21.7% 0.0625% 6-Jul-00 $4.0000 4,400 33.8% 17.0% 0.0491% 5-Jul-00 $3.8750 2,300 17.7% 8.9% 0.0257% 3-Jul-00 $3.8750 1,200 9.2% 4.6% 0.0134% 30-Jun-00 $3.6875 6,000 46.1% 23.2% 0.0670% 29-Jun-00 $3.9375 2,500 19.2% 9.7% 0.0279% 28-Jun-00 $4.0000 1,900 14.6% 7.3% 0.0212% 27-Jun-00 $4.0000 1,600 12.3% 6.2% 0.0179% 26-Jun-00 $3.9375 900 6.9% 3.5% 0.0100% 23-Jun-00 $3.7500 6,100 46.8% 23.6% 0.0681% 22-Jun-00 $3.8125 2,900 22.3% 11.2% 0.0324% 21-Jun-00 $4.0000 2,700 20.7% 10.4% 0.0301% 20-Jun-00 $4.0000 8,700 66.8% 33.7% 0.0971% 19-Jun-00 $4.0000 2,600 20.0% 10.1% 0.0290% 16-Jun-00 $4.0000 2,300 17.7% 8.9% 0.0257% 15-Jun-00 $4.0000 4,900 37.6% 19.0% 0.0547% ComStock Valuation Advisors, Inc. Exhibit G-3 FRONTIER ADJUSTERS OF AMERICA, INC. STOCK PRICE HISTORY Average Weekly Volume --------------------- Date Close Volume % - 1 Yr. % - 5 Yr. % of O/S ---- ----- ------ --------- --------- -------- 14-Jun-00 $4.0000 900 6.9% 3.5% 0.0100% 13-Jun-00 $4.0000 7,000 53.8% 27.1% 0.0781% 12-Jun-00 $3.9375 2,900 22.3% 11.2% 0.0324% 9-Jun-00 $3.9375 6,100 46.8% 23.6% 0.0681% 8-Jun-00 $3.8750 200 1.5% 0.8% 0.0022% 7-Jun-00 $3.8750 1,000 7.7% 3.9% 0.0112% 6-Jun-00 $3.8750 2,900 22.3% 11.2% 0.0324% 5-Jun-00 $3.9375 1,000 7.7% 3.9% 0.0112% 2-Jun-00 $3.9375 2,100 16.1% 8.1% 0.0234% 31-May-00 $3.9375 6,200 47.6% 24.0% 0.0692% 30-May-00 $3.8750 8,600 66.0% 33.3% 0.0960% 26-May-00 $3.7500 1,000 7.7% 3.9% 0.0112% 25-May-00 $3.8125 2,900 22.3% 11.2% 0.0324% 24-May-00 $3.7500 2,400 18.4% 9.3% 0.0268% 22-May-00 $3.8125 2,800 21.5% 10.8% 0.0313% 19-May-00 $3.7500 400 3.1% 1.5% 0.0045% 18-May-00 $3.7500 1,100 8.4% 4.3% 0.0123% 17-May-00 $3.7500 500 3.8% 1.9% 0.0056% 16-May-00 $3.6875 1,500 11.5% 5.8% 0.0167% 15-May-00 $3.8750 2,800 21.5% 10.8% 0.0313% 12-May-00 $3.8750 600 4.6% 2.3% 0.0067% 11-May-00 $3.8750 7,000 53.8% 27.1% 0.0781% 10-May-00 $3.8750 5,500 42.2% 21.3% 0.0614% 9-May-00 $3.6250 4,100 31.5% 15.9% 0.0458% 8-May-00 $3.8125 5,600 43.0% 21.7% 0.0625% 5-May-00 $3.9375 5,000 38.4% 19.3% 0.0558% 4-May-00 $3.8750 1,800 13.8% 7.0% 0.0201% 3-May-00 $3.8750 8,200 63.0% 31.7% 0.0915% 2-May-00 $3.5000 1,800 13.8% 7.0% 0.0201% 1-May-00 $3.3750 3,600 27.6% 13.9% 0.0402% 28-Apr-00 $3.2500 3,100 23.8% 12.0% 0.0346% 27-Apr-00 $3.2500 2,600 20.0% 10.1% 0.0290% 26-Apr-00 $3.3750 6,300 48.4% 24.4% 0.0703% 25-Apr-00 $3.5000 3,900 30.0% 15.1% 0.0435% 24-Apr-00 $3.5000 1,500 11.5% 5.8% 0.0167% ------- High trading price (June & August 2000) $4.0000
Daily Weekly Daily Weekly % of Statistics Statistics Statistics Statistics Normal ---------- ---------- ---------- ---------- ------ Average for five year period 5,171 25,853 0.0577% 0.2886% N/A Median for five year period 2,700 13,500 0.0301% 0.1507% N/A Average for one year period 2,604 13,021 0.0291% 0.1454% 6.3029% Median for one year period 1,950 9,750 0.0218% 0.1088% 5.1368% Total shares outstanding 8,958,000 4/18/01
ComStock Valuation Advisors, Inc. Exhibit G-4 -----END PRIVACY-ENHANCED MESSAGE-----