Driversshield.com Corp. announced that the three long-term exclusive contracts with auto insurance companies that it has secured within the past 90 days should yield anticipated annualized revenue well in excess of $50 million when fully implemented.
The Company currently has a pipeline of additional insurance company prospects for its CRM (Customer Relationship Management) business that it expects to secure before year-end and anticipates it will secure other new contracts in 2002, which would further enhance the overall outlook for the Company.
The projection does not include any revenue from the Company’s fleet business, which, as previously announced on Oct. 30, 2001, the Company agreed to sell for $6.3 million to PHH Arval, a Cendant Corporation subsidiary that provides leasing and fleet management services to other companies. Because the sale is not expected to close until the end of February 2002, the Company will receive fleet unit revenue and profits until that time. PHH will also make an equity investment of $1 million in convertible preferred shares, convertible into common stock shares of the Company at $2 per share. This brings a total of $7.3 million in new liquidity to the Company. The two companies also plan to enter a strategic alliance taking advantage of each other’s strengths, including their large, nationwide networks of high-quality repair shops. When the sale and investment transaction is complete, the Company will have approximately $8.5 million, or $.75 per share, in cash after taxes. This transaction will allow the Company to deploy capital into expansion and promotion of CRM and ADS, which have significant potential for rapid growth with very attractive margins.
The Company’s Internet-based CRM business, which provides collision repair claims management services to auto insurance companies, was launched earlier this year and has in recent weeks signed exclusive multi-year agreements with The St. Paul Companies, a Fortune 500 company and a very large national insurer, with Employers Insurance of Wausau (part of the Liberty Mutual Group) and Farmers Alliance Mutual Insurance. Revenues from these contracts are expected to ramp-up significantly early in 2002, as these companies phase in the CRM program.
The Company’s other current business, ADS (Automotive Discounts and Services) provides industry-leading auto club programs to members of affinity groups, primarily through financial institutions and insurance companies such as Assurant Group (part of the Fortis Group), Aon, Protective Life and others.
ADS is also expected to make substantial gains in 2002, adding to its already strong track record.
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