SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

    For the Quarterly Period Ended December 31, 1999

                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

    For the transition period _____________ to ____________

    Commission File Number 1-12902
                           --------

                       FRONTIER ADJUSTERS OF AMERICA, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


          Arizona                                         86-0477573
---------------------------                 ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)


                     45 East Monterey Way, Phoenix, AZ 85012
                    ----------------------------------------
                    (Address of principal executive offices)


                                 (602) 264-1061
               ---------------------------------------------------
              (Registrant's telephone number, including area code)


--------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last report

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.  Yes [X]  No [ ]

Number of shares of Common Stock outstanding on February 7, 2000       8,957,560
                                                                       ---------
<PAGE>
PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

                       FRONTIER ADJUSTERS OF AMERICA, INC.
                                AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEET

                                              December 31, 1999    June 30, 1999
                                              -----------------    -------------
                                                 (unaudited)            (*)
                                     ASSETS

CURRENT ASSETS
 Cash                                             $ 1,541,141       $ 6,892,851
 Receivables                                        1,243,758         1,603,756
 Prepaid expenses                                     187,210           344,041
 Other                                                336,637           298,214
                                                  -----------       -----------
      TOTAL CURRENT ASSETS                          3,308,746         9,138,862
                                                  -----------       -----------

PROPERTY AND EQUIPMENT                              2,655,895         2,540,219
 Less accumulated depreciation
  and amortization                                 (1,002,453)         (931,283)
                                                  -----------       -----------
                                                    1,653,442         1,608,936
                                                  -----------       -----------
OTHER ASSETS
 Cost of subsidiary in excess of net
  tangible assets acquired                            213,817           213,817
 Less accumulated amortization                       (182,596)         (181,440)
                                                  -----------       -----------
                                                       31,221            32,377
 Receivables (Long term)                              312,000           350,000
 Investments (Long term)                              685,360           685,148
 Other                                                269,654           303,661
                                                  -----------       -----------
                                                    1,298,235         1,371,186
                                                  -----------       -----------
      TOTAL ASSETS                                $ 6,260,423       $12,118,984
                                                  ===========       ===========
                                 LIABILITIES

CURRENT LIABILITIES
 Accounts payable                                 $    30,843       $    28,005
 Accrued expenses                                     171,787           404,325
 Franchisee/licensee remittance payable                    --           552,946
 Service fees due to UFAC                              75,000            50,000
 Distribution payable                                      --         5,918,475
 Other                                                359,130           111,600
                                                  -----------       -----------
      TOTAL CURRENT LIABILITIES                       636,760         7,065,351
                                                  -----------       -----------
STOCKHOLDERS' EQUITY
 Common stock                                          90,191            90,191
 Additional paid in capital                         2,104,426         2,104,426
 Treasury stock                                      (184,368)         (184,368)
 Other                                                 24,283            20,653
 Retained earnings                                  3,589,131         3,022,731
                                                  -----------       -----------
                                                    5,623,663         5,053,633
                                                  -----------       -----------
 TOTAL LIABILITIES & STOCKHOLDERS' EQUITY         $ 6,260,423       $12,118,984
                                                  ===========       ===========

* Condensed from audited financial statements.
 The accompanying notes are an integral part of these condensed statements.

                                        2
<PAGE>
                       FRONTIER ADJUSTERS OF AMERICA, INC.
                                AND SUBSIDIARIES

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (unaudited)

<TABLE>
<CAPTION>
                                                 Six Months Ended             Three Months Ended
                                                   December 31,                  December 31,
                                            --------------------------    --------------------------
                                               1999            1998          1999            1998
                                            ----------      ----------    ----------      ----------
<S>                                         <C>             <C>           <C>             <C>
REVENUE
  Continuing licensee and franchisee fees   $2,585,686      $2,458,500    $1,273,079      $1,185,377
  Adjusting and Risk Management fees           657,370         698,982       293,913         338,736
                                            ----------      ----------    ----------      ----------
                                             3,243,056       3,157,482     1,566,992       1,524,113
                                            ----------      ----------    ----------      ----------
COST AND EXPENSES
  Compensation and employee benefits         1,286,001       1,417,784       699,624         700,018
  Office                                       217,526         202,925       127,026         107,410
  Advertising and promotion                     65,807         108,790        24,373          68,203
  Depreciation and amortization                114,951         127,487        57,429          65,012
  Provision for doubtful accounts              135,838          96,000        82,998          48,000
  Service fees paid to UFAC                    150,000              --        75,000              --
  Other                                        430,141         548,752       210,656         275,046
                                            ----------      ----------    ----------      ----------
                                             2,400,264       2,501,738     1,277,106       1,263,689
                                            ----------      ----------    ----------      ----------
INCOME FROM OPERATIONS                         842,792         655,744       289,886         260,424
                                            ----------      ----------    ----------      ----------
OTHER INCOME (EXPENSE)
  Interest income                               56,373          57,275        33,309          27,841
  Other (Net)                                   30,021           6,333        22,062           7,824
                                            ----------      ----------    ----------      ----------
TOTAL OTHER INCOME (EXPENSE)                    86,394          63,608        55,371          35,665
                                            ----------      ----------    ----------      ----------
INCOME BEFORE INCOME TAXES                     929,186         719,352       345,257         296,089

INCOME TAXES                                   362,786         283,937       146,189         116,590
                                            ----------      ----------    ----------      ----------
NET INCOME                                  $  566,400      $  435,415    $  199,068      $  179,499
                                            ==========      ==========    ==========      ==========
EARNINGS PER SHARE
  Basic                                     $      .06      $      .09    $      .02      $      .04
                                            ==========      ==========    ==========      ==========
  Diluted                                   $      .06      $      .09    $      .02      $      .04
                                            ==========      ==========    ==========      ==========
WEIGHTED AVERAGE SHARES OUTSTANDING
  Basic                                      8,957,560       4,605,358     8,957,560       4,605,358
                                            ==========      ==========    ==========      ==========
  Diluted                                    8,957,560       4,607,261     8,957,560       4,605,358
                                            ==========      ==========    ==========      ==========
</TABLE>

The accompanying notes are an integral part of these condensed statements.

                                        3
<PAGE>
                       FRONTIER ADJUSTERS OF AMERICA, INC.
                                AND SUBSIDIARIES

            CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                   (unaudited)

<TABLE>
<CAPTION>
                                                 Six Months Ended              Three Months Ended
                                                   December 31,                   December 31,
                                            --------------------------     ------------------------
                                               1999            1998           1999          1998
                                            ----------      ----------     ----------    ----------
<S>                                         <C>             <C>            <C>           <C>

NET INCOME                                   $ 566,400       $ 435,415     $ 199,068      $ 179,499
                                             ---------       ---------     ---------      ---------
OTHER COMPREHENSIVE INCOME, NET OF TAX:
  Foreign currency translation adjustments       3,630              --         3,182             --
  Unrealized gain (loss) on securities              --             160        (8,094)        28,131
                                             ---------       ---------     ---------      ---------
                                                 3,630             160        (4,912)        28,131
                                             ---------       ---------     ---------      ---------
COMPREHENSIVE INCOME                         $ 570,030       $ 435,575     $ 194,156      $ 207,630
                                             =========       =========     =========      =========
</TABLE>

The accompanying notes are an integral part of these condensed statements

                                        4
<PAGE>
                       FRONTIER ADJUSTERS OF AMERICA, INC.
                                AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (unaudited)

                   SIX MONTHS ENDED DECEMBER 31, 1999 AND 1998

                                                         1999           1998
                                                     -----------    -----------

NET INCOME                                           $   566,400    $   435,415
                                                     -----------    -----------
Adjustments to reconcile net income to net cash
  provided by (used in) operating activities:
  Depreciation and amortization:
   Operations                                            114,951        127,487
   Other                                                      --            546
   Gain on sale of investments                           (12,494)            --
   Loss on disposition of property and equipment              --          3,640
   Bad Debt Expense                                      135,838         96,000
  Change in assets and liabilities:
  (Increase) decrease in:
   Receivables                                            75,298         (9,142)
   Prepaid expenses                                      156,831         51,634
   Other                                                 (57,494)        33,725
   Increase (decrease) in:
   Accounts payable                                        2,838         (5,930)
   Accrued expenses                                     (232,538)      (220,237)
   Franchisee and licensee remittance payable           (552,946)      (545,830)
   Service fees due to UFAC                               25,000             --
   Other                                                 244,934          6,461
                                                     -----------    -----------
Total adjustments                                        (99,782)      (461,646)
                                                     -----------    -----------
NET CASH PROVIDED BY (USED) OPERATING ACTIVITIES         466,618        (26,231)
                                                     -----------    -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures                                  (117,132)      (117,191)
  Investments purchased                                       --     (1,977,829)
  Proceeds from sales of investments                      12,494      2,000,000
  Proceeds on sale of fixed assets                           337         26,761
  Proceeds from sales of license                          25,000             --
  Payments on license acquisition                        (13,660)       (13,997)
  Advances to licensees and franchisees               (1,875,385)    (2,237,113)
  Collections of advances to licensees
   and franchisees                                     2,062,267      2,233,360
                                                     -----------    -----------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES       93,921        (86,009)
                                                     -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Cash dividends                                      (5,918,475)      (172,701)
                                                     -----------    -----------
NET CASH (USED IN) FINANCING ACTIVITIES               (5,918,475)      (172,701)
EFFECT OF EXCHANGE RATE CHANGES ON CASH                    6,226             --

NET (DECREASE) IN CASH                                (5,351,710)      (284,941)
  Cash at beginning of the period                      6,892,851        929,364
                                                     -----------    -----------
  Cash at the end of the period                      $ 1,541,141    $   644,423
                                                     ===========    ===========
Supplemental disclosures of Cash Flow information
Cash paid during the period
  Income taxes                                       $   421,877    $   221,060
  Interest                                           $     1,097    $     1,003

The accompanying notes are an integral part of these condensed statements.

                                        5
<PAGE>
                       FRONTIER ADJUSTERS OF AMERICA, INC.
                                AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

(1) Basis of Presentation

    The  financial  information  included  herein is  unaudited;  however,  such
    information reflects all adjustments  (consisting solely of normal recurring
    adjustments)  which are, in the opinion of management,  necessary for a fair
    statement of results of operations for the interim periods.

    The results of operations for the three and six month periods ended December
    31, 1999 are not  necessarily  indicative  of the results to be expected for
    the full year.

(2) Reportable Segments

    Financial  information with respect to the Company's reportable segments for
    the six and three months ended December 31, 1999 and 1998 is as follows:

Six months ended             Las Vegas/Henderson   Corporate and
December 31, 1999             and Tucson Offices   Phoenix Office   Consolidated
-----------------            --------------------  --------------   ------------
Revenue                         $  247,139          $2,995,917      $3,243,056

Depreciation and Amortization       21,357              93,594         114,951
Interest Income                         --              56,373          56,373
Segment Net Income                   5,632             560,768         566,400
Expenditures for Segment Assets         --             117,132         117,132
Segment Assets                  $  124,694          $6,135,729      $6,260,423

Six months ended
December 31, 1998
-----------------
Revenue                         $  229,541          $2,927,941      $3,157,482

Depreciation and Amortization       20,789             106,698         127,487
Interest Income                         --              57,275          57,275
Segment Net Income (Loss)           (6,759)            442,174         435,415
Expenditures for Assets             18,545              98,646         117,191
Segment Assets                  $  164,733          $7,119,411      $7,284,144

Three months ended
December 31, 1999
-----------------
Revenue                         $  117,804          $1,449,188      $1,566,992

Depreciation and Amortization       10,685              46,744          57,429
Interest Income                         --              33,309          33,309
Segment Net Income                   1,956             197,112         199,068
Expenditures for Segment Assets         --              24,894          24,894

Three months ended
December 31, 1998
-----------------
Revenue                         $  109,806          $1,414,307      $1,524,113

Depreciation and Amortization       10,534              54,478          65,012
Interest Income                         --              27,841          27,841
Segment Net Income (Loss)           (5,845)            185,344         179,499
Expenditures for Assets             17,532              10,162          27,694

(3) Earnings Per Share

    The effect of 100,000  stock  options are not  included in the  earnings per
    share calculation because they are antidilutive.

                                        6
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

The  statements  contained  in this  Report  on Form  10-Q  that are not  purely
historical are forward looking  statements  within the meaning of Section 27A of
the  Securities  Act of 1933,  as amended,  and  Section  21E of the  Securities
Exchange Act of 1934, as amended,  including  statements regarding the Company's
"expectations",    "anticipation",    "hopes",   "intentions",   "beliefs",   or
"strategies" regarding the future. Forward looking statements include statements
regarding revenue,  margins,  expenses, and earnings analysis with regard to the
Company  or with  regard to the  Company's  licensees  and  franchisees  for the
remainder  of fiscal  2000 and  thereafter;  improvement  of,  and growth in the
number of, licensees and  franchisees;  future spending on marketing and product
development  strategy;  statements  regarding  the  outcome of  litigation;  and
liquidity  and  anticipated  availability  of cash for  operations  and  capital
expenditures. All forward looking statements included in this document are based
on  information  available  to the Company on the date of this  report,  and the
Company assumes no obligation to update any such forward looking statements.  It
is important to note that the Company's  actual results could differ  materially
from those in such  forward  looking  statements.  Among the factors  that could
cause  actual  results to differ  materially  are the factors  discussed in this
report and any other reports on file with the SEC,  including but not limited to
the extent and nature of natural  disasters in geographic  areas serviced by the
Company or by its licensees and franchisees;  management  decisions by insurance
companies  and  self-insureds  to increase or decrease  the degree to which they
contract for services offered by the Company, its licensees or franchisees;  the
Company's   ability  to  identify  and  attract  new  qualified   licensees  and
franchisees;  the success of the Company's  promotional and marketing  programs;
the Company's  ability to successfully  manage offices  reacquired from existing
licensees and franchisees;  and uninsured liability for acts or omissions of the
Company's employees, licensees, or franchisees.

FINANCIAL CONDITION

The Company has  historically  financed its growth and on-going  operations with
cash generated from  operations.  In the six months ended December 31, 1999, the
Company's operations generated $467,000 in cash.

During the six months  ended  December  31,  1999,  the most  significant  items
affecting cash generated by the Company's  operations are net income, a $553,000
decrease in franchisee and licensee remittance payable and the $233,000 decrease
in accrued expenses. The Company,  pursuant to agreements with its licensees and
franchisees,   acts  as  a  collection  agent  for  all  of  its  licensees  and
franchisees.   The  Company  remits  to  its  licensees  and   franchisees   the
collections,  less the  ongoing  license/franchise  fee and any  amounts due the
Company, such as loan repayments and errors and omissions insurance premium. The
day of the week that the  Company's  fiscal period ends,  therefore,  can have a
significant  effect  on  the  reported  amount  that  is due  to  licensees  and
franchisees. As December 31, 1999 fell on the day that collections were remitted
to licensees and franchisees,  the Company did not have a remittance payable. In
comparison,  the  Company's  financial  statements  as of June 30, 1999 reflects
collections for four days of $553,000.  The decrease in accrued expenses results
from the payout of employee  benefits  and bonuses  during the first  quarter of
fiscal 2000.

The Company  anticipates  that during fiscal 2000 its  operations  will generate
sufficient cash to fund its operations and equipment  acquisitions.  Through its
capital investment program,  the Company replaces obsolete or outdated equipment
and invests in new  equipment  and  furnishings  to  maintain  or  increase  the
productivity of the Company and its employees. The Company anticipates investing
$200,000 to $300,000 in fiscal 2000 for  equipment and  furnishings  pursuant to
its capital investment program.

In June 1999, a complaint was filed in United States  District Court in Nebraska
against multiple defendants including the Company. The complaint arises from the
alleged  embezzlement  by a former  licensee in connection  with claims services
provided for the benefit of the  plaintiff.  The  complaint  seeks damages of at
least  $1,800,000  from the  Company.  As the  lawsuit is still in its  earliest
phase,  the Company cannot yet assess the merits of the complaint or the effects
this litigation will have on the Company. For further discussion,  see "Item 1 -
Legal Proceedings".

                                       7
<PAGE>
The Company's ratio of current assets to current liabilities was 5.20 to 1 as of
December 31, 1999 and 1.29 to 1 as of June 30,  1999.  The increase is primarily
the result of the  decreases  in  distribution  payable and  franchisee/licensee
remittance  payable at December 31, 1999 as compared to June 30, 1999.

RESULTS OF  OPERATIONS  - SIX MONTHS  ENDED  DECEMBER  31, 1999  COMPARED TO SIX
MONTHS ENDED DECEMBER 31, 1998

REVENUE

The Company's  revenue  increased  2.7% or $86,000 to $3,243,000  during the six
months ended  December 31, 1999 from  $3,157,000 in the same period of the prior
fiscal year. This increase  represents a $41,000  decrease in adjusting and risk
management  fees and a $127,000  increase in continuing  licensee and franchisee
fees.

The decrease of $41,000 in adjusting and risk  management  fees from $699,000 in
the six months  ended  December  31, 1998 to $658,000  for the six months  ended
December  31,  1999  represents  a 5.9%  decrease.  The Company  experienced  an
increase of $29,000 in adjusting  fees in its Las  Vegas/Henderson  office,  and
decreases of $11,000 and $59,000 in  adjusting  fees from the Tucson and Phoenix
offices,  respectively.  The increase in Las Vegas/Henderson office is primarily
the result of an  increase  in storms  this  fiscal year as compared to the same
period of the prior year.  The decrease in the Phoenix  office mainly relates to
the loss of a client.

The Company's  revenue from  continuing  licensee and franchisee  fees increased
5.2% or $127,000 from  $2,459,000  in the six months ended  December 31, 1998 to
$2,586,000 in the six months ended December 31, 1999. This increase reflects the
benefit to the Company's  licensees and  franchisees  from an increase in claims
assignments from insurance companies and self-insureds.

The Company's  revenue is affected by numerous matters  including the work loads
of other companies and claims presented by their clients. Therefore, the Company
is unable to project  its future  revenue.  The Company  has  historically  seen
growth in licensee and franchisee  fees paid.  However,  during fiscal 1998, the
Company  experienced  a decrease in revenue due  primarily to the phase out of a
business  relationship with its then major client.  The Company has responded to
the loss of revenue by continuing  to develop and implement  sales and marketing
efforts to take  advantage  of its  geographic  diversity  as well as the unique
strengths of its individual licensees and franchisees. The Company's revenue did
recover in fiscal 1999, to an amount  comparable  to that of fiscal 1997,  which
was prior to the loss of the  client,  and the  Company  hopes to see  continued
growth in licensee and franchisee fees paid from other sources.

COMPENSATION AND FRINGE BENEFITS

Compensation and fringe benefits represent  approximately 53.6% of the Company's
costs and  expenses  and  represent  the largest  single item of expense.  These
expenses  decreased  9.3% or $132,000  from  $1,418,000  in the six months ended
December 31, 1998 to $1,286,000 in the current six month period. The decrease is
the result of the retirement of William J. Rocke, former CEO and former Chairman
of the Board, and Jean E. Ryberg, former President, on June 30, 1999. Certain of
the services  provided by Mr.  Rocke and Mrs.  Ryberg are now provided by United
Financial Adjusting Company ("UFAC") pursuant to a service agreement between the
Company and UFAC. Charges for these services are reflected in a monthly fee paid
to UFAC. For further discussion, see "Service Fees" below.

Compensation  and Fringe  Benefits  were also  affected  by the  resignation  of
Francis J. LaPallo on January 31, 2000. In connection with his resignation,  Mr.
LaPallo  received a severance  package with a net of tax affect on net income of
approximately  $106,000  for the six months ended  December  31,  1999.  Had the
Company not incurred this expense,  compensation and fringe benefits for the six
months  ended  December  31,  1999 would  have  experienced  a greater  decrease
compared to the same period of the prior fiscal year.

                                        8
<PAGE>
SERVICE FEES

On April 30,  1999,  the  Company  entered  into a service  agreement  with UFAC
whereby the Company pays a $25,000 monthly fee for certain services  provided by
UFAC.  Services  included  under  this  agreement  are  management,   marketing,
technology,  human resource support,  and accounting and reporting.  For the six
months ended December 31, 1999, the Company  incurred  $150,000 in service fees.
The Company did not incur any service fees related to this agreement in the same
period of the prior fiscal year.

EXPENSES OTHER THAN COMPENSATION AND FRINGE BENEFITS AND SERVICE FEES

The Company's  expenses other than  compensation and fringe benefits and service
fees  decreased  $120,000  during  the six months  ended  December  31,  1999 as
compared  to the same  period of the prior  fiscal  year.  The  principal  items
affecting  these  expenses are  decreases of $103,000 in legal fees,  $43,000 in
advertising and promotion,  $20,000 in Directors  fees,  $12,000 in depreciation
and  amortization,  which  were  partially  offset by  increases  of  $40,000 in
provision  for doubtful  accounts,  $15,000 in office  expenses,  and $13,000 in
computer consulting expenses.

Legal fees decreased  significantly due to the increased need for legal services
during  the  first  six  months  of  fiscal  1999  in  preparation  of the  UFAC
transaction  that was later  consummated  in April of 1999.  As a portion of the
monthly service fee paid to UFAC includes marketing  resources,  the Company has
decreased similar services previously paid to external sources.  Furthermore,  a
portion of this reduction is due to the  non-renewal of the Company's share of a
luxury suite at a sporting  facility.  Accordingly,  advertising and promotional
expenses have decreased this fiscal year as these services were provided by UFAC
and recorded under Service Fees for the current  period.  Provision for doubtful
accounts increased  primarily due to the aging of larger balanced loans given to
franchisees  or  licensees  as compared  to the same period of the prior  fiscal
year.

INCOME TAXES

The Company's income taxes for the six months ended December 31, 1999 were 39.0%
of its income before taxes, or approximately  the same as they were in the prior
fiscal year.  Changes made in the tax laws by various  states and by the federal
government have not had a material  effect on the Company's  current overall tax
rates;  however,  there is no assurance  that such changes will not occur in the
future.

OTHER INCOME

The Company's  other income  increased  $22,000 or 34.4% from $64,000 in the six
months ended  December 31, 1998 to $86,000 in the current six month period.  The
most significant  items affecting other income are increases in the gain on sale
of investments and miscellaneous income of $12,000 and $11,000, respectively.

NET INCOME

The  Company's net income for the six months ended  December 31, 1999  increased
$131,000 or 30.1% from  $435,000 in the six months  ended  December  31, 1998 to
$566,000 in the current period.  The most significant items affecting net income
were an $86,000  increase in revenue,  a $132,000  decrease in compensation  and
benefits,  a $150,000  increase in service fees, a $120,000 decrease in expenses
other than compensation and fringe benefits and service fees, and an increase of
$22,000 in other income.

RESULTS OF  OPERATIONS - THREE MONTHS ENDED  DECEMBER 31, 1999 COMPARED TO THREE
MONTHS ENDED DECEMBER 31, 1998

REVENUE

The Company's  revenue  increased 2.8% or $43,000 to $1,567,000 during the three
months ended  December 31, 1999 from  $1,524,000 in the same period of the prior
fiscal year. This increase  represents a $45,000  decrease in adjusting and risk
management  fees and an $88,000  increase in continuing  licensee and franchisee
fees.

The decrease of $45,000 in adjusting and risk  management  fees from $339,000 in
the three months  ended  December 31, 1998 to $294,000 in the three months ended
December  31,  1999  represents  a 13.3%  decrease.  The Company  experienced  a

                                       9
<PAGE>
decrease of $53,000 in  adjusting  fees in its Phoenix  office and  increases of
$1,000  and $7,000 in  adjusting  fees from the Las  Vegas/Henderson  and Tucson
offices,  respectively.  The decrease in fees from the Phoenix office  primarily
reflects the loss of a client.

The Company's  revenue from  continuing  licensee and franchisee  fees increased
7.4% or $88,000 from  $1,185,000 in the three months ended  December 31, 1998 to
$1,273,000 in the three months ended December 31, 1999.  This increase  reflects
the  benefit to the  Company's  licensees  and  franchisees  from an increase in
claims assignments from insurance  companies and self-insureds.

The Company's  revenue is affected by numerous factors  including the work loads
of other companies and claims presented by their clients. Therefore, the Company
is unable to project  its future  revenue.  The Company  has  historically  seen
growth in licensee and franchisee  fees paid.  However,  during fiscal 1998, the
Company  experienced a decrease in revenue due primarily to the phase out of its
business  relationship with its then major client.  The Company has responded to
this loss by continuing to develop and implement sales and marketing  efforts to
take  advantage of its geographic  diversity as well as the unique  strengths of
its individual  licensees and franchisees.  The Company's revenue did recover in
fiscal 1999 to an amount  comparable to that of fiscal 1997,  which was prior to
the loss of the  client,  and the  Company  hopes  to see  continued  growth  in
licensee and franchisee fees paid from other sources.

COMPENSATION AND FRINGE BENEFITS

Compensation and fringe benefits represent  approximately 54.8% of the Company's
costs and  expenses  and  represent  the largest  single item of expense.  These
expenses  remained  essentially  flat at  $700,000  in the  three  months  ended
December  31,  1998  compared to the current  three month  period.  Compensation
related  expenses  have  declined  significantly  this  fiscal  year  due to the
retirement of William J. Rocke,  former CEO and Chairman of the Board,  and Jean
E. Ryberg,  former President,  on June 30, 1999.  However,  the Company incurred
expenses this quarter related to the  resignation of Francis J. LaPallo,  former
Executive  Vice  President,   on  January  31,  2000.  In  connection  with  his
resignation,  Mr. LaPallo received a severance  package with a net of tax affect
on net income of approximately  $106,000 for the three months ended December 31,
1999.  Had the  Company  not  incurred  this  expense,  compensation  and fringe
benefits for the three months  ended  December 31, 1999 would have  decreased in
comparison to the same period of the prior year.

Certain of the services  provided by Mr. Rocke and Mrs.  Ryberg are now provided
by UFAC pursuant to a service  agreement  between the Company and UFAC.  Charges
for these  services  are  reflected  in a monthly fee paid to UFAC.  For further
discussion, see "Service Fees" below.

SERVICE FEES

On April 30,  1999,  the  Company  entered  into a service  agreement  with UFAC
whereby the Company pays a $25,000 monthly fee for certain services  provided by
UFAC.  Services  included  under  this  agreement  are  management,   marketing,
technology,  human resource support, and accounting and reporting. For the three
months ended  December 31, 1999, the Company  incurred  $75,000 in service fees.
The Company did not incur any service fees related to this agreement in the same
quarter of the prior fiscal year.

EXPENSES OTHER THAN COMPENSATION AND FRINGE BENEFITS AND SERVICE FEES

The Company's  expenses other than  compensation and fringe benefits and service
fees  decreased  $61,000  during the three  months  ended  December  31, 1999 as
compared to the same  quarter of the prior  fiscal  year.  The  principal  items
affecting  these  expenses are  decreases  of $91,000 in legal fees,  $44,000 in
advertising and promotion,  and $17,000 in audit and accounting fees, which were
partially  offset by increases of $35,000 in  provision  for doubtful  accounts,
$23,000 in technology consulting fees, and $20,000 in office expenses.

Legal fees and accounting related fees decreased  significantly this quarter due
to the increased need for these services  during the three months ended December
31, 1998 in preparation of the UFAC  transaction  that was later  consummated in
April of 1999.  Advertising  and  promotional  expenses  decreased  $44,000 this
quarter as a portion of the monthly service fee paid to UFAC includes  marketing
resources.  Therefore,  the  Company  has  ceased  some of the  costs  that were

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<PAGE>
previously paid to external parties. Furthermore, a portion of this reduction is
due to the  non-renewal  of the Company's  share of a luxury suite at a sporting
facility.  Provision for doubtful accounts increased  primarily due to the aging
of larger  balanced  loans given to  franchisees or licensees as compared to the
same period of the prior fiscal year.

INCOME TAXES

The  Company's  income taxes were 42.3% and 39.4% of its income before taxes for
the three months ended December 31, 1999 and 1998, respectively. A difference in
these  rates is due to an  increase  in  permanent  differences  in book and tax
income  between  the  periods.   The  Company's   income  taxes  have  not  been
significantly  affected by any  changes in the federal and state laws.  However,
tax rates can be changed at any time based upon legislation.

OTHER INCOME

The Company's other income increased  $19,000 or 52.8% from $36,000 in the three
months ended December 31, 1998 to $55,000 in the current three month period. The
most  significant  items affecting  other income include  increases of $5,000 in
interest  income,  $12,000  in the gain on sale of  investments  and  $6,000  in
miscellaneous revenue, and a decrease in dividend income of $4,000.

NET INCOME

The Company's net income for the three months ended  December 31, 1999 increased
$20,000 or 11.2% from  $179,000 in the three months  ended  December 31, 1998 to
$199,000 in the current quarter. The most significant items affecting net income
were a $43,000  increase in revenue,  a $75,000  increase in service  fees and a
$61,000  decrease in expenses other than  compensation  and fringe  benefits and
service fees.

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the risk of loss to future earnings,  fair values, or future cash
flows  due to  potential  changes  in the  price of a  financial  instrument.  A
financial  instrument's  value may  change as a result of  changes  in  interest
rates,  exchanges  rates,  commodity  prices,  equity  prices,  and other market
changes.  Market  risk  is  inherent  in all  market  risk  sensitive  financial
instruments.

During the first six months of fiscal  2000,  the Company did own an  immaterial
number of common  stock  shares  that it sold in October  1999.  Therefore,  the
Company is no longer exposed to any market risk associated with this investment.

The  Company has a book value of $668,000  invested in  municipal  bonds that it
carries as long term held to maturity investments. An increase in interest rates
would result in a decline in the market  value of the bonds.  These bonds mature
between  2005 and 2031.  As the Company has the intent and ability to hold these
bonds to maturity,  the market risk associated with these bonds is insignificant
and does not have a material effect on the financial statements.

Although  the Company  wholly owns a Canadian  subsidiary,  the cash held by the
Canadian subsidiary is not material to the Company's operations.  Therefore, any
foreign currency  fluctuations would not have a material effect on the Company's
financial statements.

                                       11
<PAGE>
                           PART II OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

In June  1999,  Safeway  Inc.  filed a  complaint  against  multiple  defendants
including  the Company in the United  States  District  Court in  Nebraska.  The
complaint  arises from the alleged  embezzlement  of over $1,800,000 by a former
franchisee of the Company.  The complaint  alleges claims against the Company in
connection  with claims  services  provided  for the  benefit of Safeway,  Inc.,
including breach of fiduciary duty,  negligent  failure to monitor or supervise,
vicarious liability,  and breach of contract.  The complaint seeks an accounting
and a recovery of compensatory damages of at least $1,800,000. As the lawsuit is
still in its  earliest  phase,  the Company  cannot yet assess the merits of the
complaint or the effects this litigation  will have on the Company.  The Company
has sought coverage under various  insurance  policies it holds and has received
denials of coverage from the carriers.  As of December 31, 1999, the Company has
not accrued any liability with respect to this lawsuit.

From time to time in the normal course of its business,  the Company is named as
a defendant in lawsuits.  With the exception of the complaint  described  above,
the  Company  does  not  believe  that it is  subject  to any such  lawsuits  or
litigation  or  threatened  lawsuits  or  litigation  that will have a  material
adverse effect on the Company or its business.

ITEM 2 - NOT APPLICABLE

ITEM 3 - NOT APPLICABLE

ITEM 4 - SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

On January 26, 2000, the Company held its 1999 Annual Shareholders' Meeting.

The Company's Board of Directors were reelected with 8,473,719 shares being cast
and 18,144 shares withholding  authority.  The Directors elected and the numbers
of votes each received are as follows:

        John M. Davies                      8,434,998
        Jeffrey R. Harcourt                 8,434,998
        Troy M. Huth                        8,434,998
        Jeffrey C. Jordan                   8,434,998
        Francis J. LaPallo                  8,454,626
        Louis T. Mastos                     8,449,826
        William J. Rocke                    8,392,326
        Jean E. Ryberg                      8,393,826
        William A. White                    8,455,276

The Company's  shareholders ratified the appointment of McGladrey & Pullen, LLP,
Certified Public  Accountants,  as the auditors of the Company for the Company's
fiscal  year  ending  June 30, 2000 with  8,419,419  affirmative  votes,  24,278
against, and 30,022 abstaining.

ITEM 5 - OTHER INFORMATION

Francis J. LaPallo,  a director and an Executive  Vice President of the Company,
resigned from his position with the Company  effective January 31, 2000. To fill
the vacancy on the board, the board of directors  appointed Kenneth A. Sexton to
the Board.

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

     (a)  27 -- Financial Data Schedule

     (b)  The Company filed a Form 8-K on December 2, 1999 to report a change in
          ownership of the Company's majority shareholder, UFAC.

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<PAGE>
                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                      FRONTIER ADJUSTERS OF AMERICA, INC.


Date: 2/11/00                         /s/ Troy M. Huth
     ----------                       ----------------------------------------
                                      Troy M. Huth, President, Chief Executive
                                      Officer and Director


Date: 2/11/00                         /s/ Jeffrey R. Harcourt
     ----------                       ----------------------------------------
                                      Jeffrey R. Harcourt, Chief Financial
                                      Officer and Director

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