CONFORMED

                                    FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


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

For the Quarterly Period Ended September 30, 1997

                                       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 October 23, 1997       4,605,358
                                                                       ---------
<PAGE>
PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements

                       FRONTIER ADJUSTERS OF AMERICA, INC.
                                AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
                                                                September 30, 1997    June 30, 1997
                                                                ------------------    -------------
                                                                   (unaudited)             (*)
                                            ASSETS
                                            ------
<S>                                                                <C>                 <C>        
CURRENT ASSETS
   Cash and cash equivalents                                       $   650,999         $ 1,012,233
   Investments                                                       1,285,125           1,288,976
   Receivables                                                       1,813,745           1,613,099
   Prepaid expenses                                                    302,271             268,192
   Other                                                               446,660             433,260
                                                                   -----------         -----------
        TOTAL CURRENT ASSETS                                         4,498,800           4,615,760
                                                                   -----------         -----------
                                                                                   
PROPERTY AND EQUIPMENT                                               2,470,027           2,453,819
   Less accumulated depreciation and amortization                     (754,024)           (717,593)
                                                                   -----------         -----------
                                                                     1,716,003           1,736,226
                                                                   -----------         -----------
                                                                                   
OTHER ASSETS                                                                       
   Cost of subsidiary in excess of net tangible assets acquired        213,817             213,817
   Less accumulated amortization                                      (177,396)           (176,818)
                                                                   -----------         -----------
                                                                        36,421              36,999
   Receivables (Long term)                                             389,000             431,000
   Investments (Long term)                                             730,479             714,872
   Other                                                               352,408             377,282
                                                                   -----------         -----------
                                                                     1,508,308           1,560,153
                                                                   -----------         -----------
        TOTAL ASSETS                                               $ 7,723,111         $ 7,912,139
                                                                   ===========         ===========
                                                                                   
                                          LIABILITIES                                     
                                          -----------                                     
                                                                                   
CURRENT LIABILITIES                                                                
   Accounts payable                                                $    10,602         $    33,793
   Accrued expenses                                                    341,139             190,510
   Franchisee/licensee remittance payable                              479,586             396,991
   Current Portion Long Term Liability                                  27,005              26,521
   Other                                                               179,003             666,669
                                                                   -----------         -----------
        TOTAL CURRENT LIABILITIES                                    1,037,335           1,314,484
                                                                   -----------         -----------
                                                                                   
LONG TERM LIABILITY                                                     26,527              33,462
                                                                   -----------         -----------
                                                                                   
STOCKHOLDERS' EQUITY                                                               
   Common stock                                                         47,820              47,820
   Additional paid in capital                                        2,148,470           2,148,470
   Treasury stock                                                     (529,584)           (529,584)
   Other                                                                92,336              83,221
   Retained earnings                                                 4,900,207           4,814,266
                                                                   -----------         -----------
                                                                     6,659,249           6,564,193
                                                                   -----------         -----------
   TOTAL LIABILITIES & STOCKHOLDERS' EQUITY                        $ 7,723,111         $ 7,912,139
                                                                   ===========         ===========
</TABLE>
*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)

                 Three Months Ended September 30, 1997 and 1996

                                                         1997            1996
                                                      ----------      ----------
REVENUES
   Continuing licensee and franchisee fees            $1,220,102      $1,388,298
   Adjusting and risk management fees                    263,606         275,231
                                                      ----------      ----------
                                                       1,483,708       1,663,529
                                                      ----------      ----------

COST AND EXPENSES
   Compensation and fringe benefits                      645,048         651,156
   Office                                                 94,149         100,364
   Advertising and promotion                              60,001          81,197
   Depreciation and amortization                          61,357          55,955
   Provision for doubtful accounts                        48,000          45,000
   Other                                                 187,069         209,406
                                                      ----------      ----------
                                                       1,095,624       1,143,078
                                                      ----------      ----------
   INCOME FROM OPERATIONS                                388,084         520,451
                                                      ----------      ----------

OTHER INCOME (EXPENSE)
   Interest income                                        36,466          36,191
   Other (Net)                                             1,679           7,353
                                                      ----------      ----------
   TOTAL OTHER INCOME (EXPENSE)                           38,145          43,544
                                                      ----------      ----------
   INCOME BEFORE INCOME TAXES                            426,229         563,995

INCOME TAXES                                             167,587         221,732
                                                      ----------      ----------
   NET INCOME                                         $  258,642      $  342,263
                                                      ==========      ==========

Weighted Average Shares outstanding                    4,605,358       4,614,684
                                                      ==========      ==========

NET INCOME PER COMMON SHARE                           $      .06      $      .07
                                                      ==========      ==========

The accompanying notes are an integral part of these condensed statements.
                                        3
<PAGE>
                       FRONTIER ADJUSTERS OF AMERICA, INC.
                                AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (unaudited)

                 Three Months Ended September 30, 1997 and 1996

<TABLE>
<CAPTION>
                                                               1997            1996
                                                           -----------     -----------
<S>                                                        <C>             <C>        
NET INCOME                                                 $   258,642     $   342,263
                                                           -----------     -----------
Adjustments to reconcile net income to net cash
provided by operating activities:
   Depreciation and amortization                                61,903          55,955
   (Gain) on disposition of property & equipment                  (120)           (905)
   Allowance for doubtful accounts                              49,038          45,930
Change in assets and liabilities:
(Increase) decrease in:
   Receivables                                                (122,262)         60,444
   Prepaid expenses                                            (34,079)         20,727
   Other                                                       (26,537)        (23,834)
Increase (decrease) in:
   Accounts payable                                            (23,191)         68,451
   Accrued expenses                                            150,629         110,734
   Franchisee and licensee remittance payable                   82,595         241,783
   Other                                                      (487,666)         59,713
                                                           -----------     -----------
Total adjustments                                             (349,690)        638,998
                                                           -----------     -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES                      (91,048)        981,261
                                                           -----------     -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Proceeds from sale of equipment                                 200            --
   License Acquisition                                            --           (25,000)
   Capital expenditures                                        (16,308)        (78,195)
   Investment purchased                                       (989,627)       (974,115)
   Proceeds from sales of investments                        1,000,000       1,000,000
   Payments on License acquisition                              (6,451)         (6,001)
   Advances to licensees and franchisees                    (1,029,663)     (1,021,884)
   Collections of advances to licensees and franchisees        944,241         917,536
                                                           -----------     -----------
   NET CASH (USED IN) INVESTING ACTIVITIES                     (97,608)       (187,659)
                                                           -----------     -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Cash dividends                                             (172,701)       (173,248)
   Common stock repurchased                                       --           (44,365)
                                                           -----------     -----------
   NET CASH PROVIDED BY(USED IN)FINANCING ACTIVITIES          (172,701)       (217,613)
EFFECT OF EXCHANGE RATE CHANGES ON CASH                            123            --
                                                           -----------     -----------

NET INCREASE (DECREASE) IN CASH                               (361,234)        575,989
   Cash at beginning of the period                           1,012,233         534,540
                                                           -----------     -----------
   Cash at the end of the period                           $   650,999     $ 1,110,529
                                                           ===========     ===========

Supplemental disclosures of Cash Flow information
Cash paid during the period
   Income taxes                                            $    86,910     $    72,130
   Interest                                                $     1,048     $     1,498
</TABLE>

The accompanying notes are an integral part of these condensed statements.
                                        4
<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 month period ended  September  30,
    1997 are not  necessarily  indicative  of the results to be expected for the
    full year.

    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",   "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 1998 and thereafter; improvement of,
    and growth in the number of, licensees and  franchisees;  future spending on
    marketing and product  development  strategy;  and liquidity and anticipated
    availability of cash for operations,  acquisitions, or payment of dividends.
    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  statement.
    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, 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
    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 quarter ended  September 30,
    1997,  net cash used in the Company's  operations  exceeded cash provided by
    operations by $91,000.

    Compared to the last fiscal year, the most  significant  item affecting cash
    used  by  the  Company's  operations  is  the  $488,000  decrease  in  other
    liabilities.  This  decrease  results  from a  $525,000  payment  during the
    current  quarter  pursuant to an  agreement  the Company had entered in June
    1997 to settle litigation.

    The Company's  Board of Directors on October 10, 1997 approved the Company's
    quarterly  cash  dividend of 3.75 cents per share to be paid on December 10,
    1997 to shareholders of record on November 20, 1997.

    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 1998 for equipment and
    furnishings pursuant to its capital investment program.
                                        5
<PAGE>
    Management  believes  that the Company  will be able to fund all of its cash
    requirements  (i.e.  current  operations,  capital asset acquisition and the
    payment  of  dividends)  from its  current  available  cash as well as funds
    generated by its operations.

    The Company's  ratio of current assets to current  liabilities was 4.34 to 1
    as of September 30, 1997 and 3.51 to 1 as of June 30, 1997.

    Results of Operations - Quarter Ended September 30, 1997 Compared to 1996
    -------------------------------------------------------------------------

    Revenues
    --------

    The  Company's  revenues  decreased  10.8% or $180,000 to  $1,484,000 in the
    current quarter from $1,664,000 in the same period of the prior fiscal year.
    The decrease is a combined $12,000 decrease in adjusting and risk management
    fees and a $168,000 decrease in continuing licensee and franchisee fees.

    The decrease of $12,000 in adjusting and risk  management fees from $275,000
    in the quarter  ended  September  30, 1996 to $263,000 in the quarter  ended
    September 30, 1997 represents a 4.4% decrease. A substantial portion of this
    decrease is related to a major storm that occurred in mid August 1996 in the
    Phoenix,  Arizona  metropolitan  area where the  Company's  main offices are
    located.  Claims resulting from this storm provided the Company with $80,000
    in adjusting  services  revenues in quarter ended  September  30, 1996.  The
    Company did,  however,  experience  a $5,000  increase in fees in its Tucson
    office  as  compared  to the  same  period  in  the  previous  fiscal  year.
    Furthermore, the Company's Las Vegas/Henderson office, which was acquired in
    the last quarter of the prior fiscal year from a former  licensee,  provided
    $87,000 in adjusting fees this quarter.

    The  Company's  revenues  from  continuing   licensee  and  franchisee  fees
    decreased 12% or $168,000 from $1,388,000 in the quarter ended September 30,
    1996 to $1,220,000 in the quarter  ended  September 30, 1997.  This decrease
    reflects the loss of revenues attributed to a client which contributed 18.8%
    to the continuing licensee and franchisee fees in fiscal 1997. In June 1997,
    this client elected to place its adjusting service needs with other vendors.
    This will be reflected in the Company's 1998 fiscal year.

    The Company's revenues are 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  revenues.  The  Company  has
    historically  seen growth in licensee  and  franchisee  fees paid.  However,
    during the  current  fiscal year the Company has seen a decrease in revenues
    due primarily to the phase out of its business  relationship  with its major
    client.  The  Company  has  responded  to this loss of revenue by  investing
    substantial  resources to establish a new promotional and marketing program,
    and  anticipates  that  over time the lost  business  will be  replaced.  In
    addition, the Company believes that it will continue to realize growth as it
    adds  additional  qualified  licensees  and  franchisees.  Furthermore,  the
    Company  expects to  continue  to reflect  revenues  from its Tucson and Las
    Vegas operations.

    Compensation and Fringe Benefits
    --------------------------------

    Compensation  and  fringe  benefits  represent   approximately  59%  of  the
    Company's  costs and  expenses  and  represent  the  largest  single item of
    expense.  These  expenses  decreased 1% or $6,000 from $651,000 in the three
    months ended September 30, 1996 to $645,000 in the current quarter.

    Expenses Other Than Compensation and Fringe Benefits
    ----------------------------------------------------

    The Company's expenses other than compensation and fringe benefits decreased
    $41,000 during the three months ended  September 30, 1997 as compared to the
    same quarter of the prior fiscal year. The principal  items  affecting these
    expenses are a $28,000  decrease in legal expenses and a $21,000 decrease in
    advertising and promotional expenses.
                                        6
<PAGE>
    The  balance of the  Company's  costs and  expenses  have not  significantly
    changed from the same period of the prior year.

    Income Taxes
    ------------

    The  Company's  income  taxes  were  39%  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 affect on the Company's current overall tax rates,  however, this
    could change at any time.

    Due to the decrease in the Company's net income,  income taxes  decreased by
    $54,000.

    Other Income
    ------------

    The  Company's  other  income  decreased  $6,000 or 14% from  $44,000 in the
    quarter ended September 30, 1996 to $38,000 in the current quarter. The most
    significant  items  affecting  other income include a $3,000 decrease in the
    sales of computer software to the Company's  licensees and franchisees and a
    $1,000 increase in expenses related to rental property.

    Net Income
    ----------

    The Company's net income for the quarter ended September 30, 1997, decreased
    $83,000 or 24% from  $342,000 in the  quarter  ended  September  30, 1996 to
    $259,000 in the current quarter.  The most  significant  items affecting net
    income were the  $180,000  decrease  in  revenues,  the $41,000  decrease in
    expenses  other  than  compensation  and  fringe  benefits  and the  $54,000
    decrease in income taxes.

    Results of Operations - Quarter Ended September 30, 1996 Compared to 1995
    -------------------------------------------------------------------------

    Revenues
    --------

    The  Company's  revenues  increased  18% or  $255,000 to  $1,664,000  in the
    quarter ended  September 30, 1996 from  $1,409,000 in the same period of the
    1995 fiscal year. This increase  resulted from a combined  $113,000 increase
    in adjusting and risk management fees and a $141,000  increase in continuing
    licensee and franchisee fees.

    The increase of $113,000 in adjusting and risk management fees from $162,000
    in the quarter  ended  September  30, 1995 to $275,000 in the quarter  ended
    September 30, 1996 represents a 70% increase.  A substantial portion of this
    increase is related to a major storm that occurred in mid August 1996 in the
    Phoenix,  Arizona  metropolitan  area where the  Company's  main offices are
    located.  Claims resulting from this storm provided the Company with $80,000
    in adjusting  services  revenues in the quarter ended September 30, 1996 and
    provided  additional revenues in the following quarter as not all the claims
    received  had been  concluded  and  billed  prior  to  September  30,  1996.
    Additionally,  the  Company  had a $22,000  increase  in fees in its  Tucson
    office as this office was acquired  from a licensee in the first  quarter of
    the prior fiscal year. The balance of the increase represents an increase in
    the demand for the services provided by Company owned offices.

    The  Company's  revenues  from  continuing   licensee  and  franchisee  fees
    increased 11% or $141,000 from $1,247,000 in the quarter ended September 30,
    1995 to $1,388,000 in the quarter  ended  September 30, 1996.  This increase
    reflects  the  fact  that  the  Company's  licensees  and  franchisees  were
    benefiting   from  an  increase  in  claims  as  insurance   companies   and
    self-insureds  used their  services  due to an increase in volume of claims.
    Also,  to a  greater  degree,  this  increase  reflects  the  effect  of new
    licensees and franchisees and rate increases.

    Compensation and Fringe Benefits
    --------------------------------

    Compensation  and  fringe  benefits  represented  approximately  57%  of the
    Company's  costs and expenses  and  represented  the largest  single item of
    expense. These expenses increased 39% or $183,000 from $468,000 in the
                                        7
<PAGE>
    three  months  ended  September  30, 1995 to  $651,000 in the quarter  ended
    September  30,  1996.  This  increase  was the result of the  addition of an
    Executive  Vice  President  to the  Company's  management  team,  additional
    employees hired including temporary employees to handle increased work loads
    in the Corporate  office,  increased  bonus related to the Company's  rising
    income and cost of living and merit increases given to employees.

    Expenses Other Than Compensation and Fringe Benefits
    ----------------------------------------------------

    The Company's expenses other than compensation and fringe benefits decreased
    $11,000 during the three months ended  September 30, 1996 as compared to the
    same quarter of the prior fiscal year. The principal  items  affecting these
    expenses are a $37,000  decrease in legal expenses and a $12,000 increase in
    depreciation expense due to capital expenditures in the prior fiscal year.

    The balance of the Company's costs and expenses did not significantly change
    from the same period of the prior year.

    Income Taxes
    ------------

    The  Company's  income  taxes  were  39%  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 affect on the Company's current overall tax rates,  however, this
    could change at any time.

    Other Income
    ------------

    The  Company's  other  income  increased  $9,000 or 25% from  $35,000 in the
    quarter ended  September 30, 1995 to $44,000 in the quarter ended  September
    30, 1996. The most significant items affecting other income include a $4,000
    increase in the sales of computer  software to the  Company's  licensees and
    franchisees and a $5,000 increase in interest income.

    Net Income
    ----------

    The Company's net income for the quarter ended September 30, 1996, increased
    $56,000 or 20% from  $286,000 in the  quarter  ended  September  30, 1995 to
    $342,000 in the quarter ended September 30, 1996. The most significant items
    affecting  net income were the $255,000  increase in revenues,  the $183,000
    increase in  compensation  and fringe  benefits and the $11,000  decrease in
    other expenses.

    PART II - OTHER INFORMATION

    Item 1 - Legal Proceedings
    --------------------------

    From time to time in the normal course of its business, the Company is named
    as a defendant in lawsuits.  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 3 - Submission of Matters to a Vote of Security Holders
    ------------------------------------------------------------

    On October 10, 1997, the Company held its annual shareholders meeting.

    The Company's Board of Directors were reelected with 4,192,874  shares being
    cast and 188,427 shares abstaining. The Directors elected and the numbers of
    votes each received are as follows:
                                        8
<PAGE>
    Patric R. Greer                                                    4,011,099
    George M. Hill                                                     3,984,197
    Francis J. LaPallo                                                 4,011,099
    Louis T. Mastos                                                    4,001,933
    James S. Rocke                                                     4,010,766
    William J. Rocke                                                   4,004,516
    Jean E. Ryberg                                                     3,996,724
    Merlin J. Schumann                                                 4,011,099
    William W. Strawther, Jr.                                          4,001,933
    Scott R. Younker                                                   4,011,099

    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,  1998,  with  4,167,113  affirmative
    votes, 15,170 against and 10,591 abstaining.

    Response to items one through five not listed above are omitted  since these
    items are either inapplicable or the response thereto would be negative.

                                   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:    October 30, 1997      /s/ Jean E. Ryberg
         -----------------------   ---------------------------------------------
                                   Jean E. Ryberg, President and Director



    Date:    October 30, 1997      /s/ Patric R. Greer
         -----------------------   ---------------------------------------------
                                   Patric R. Greer, Chief Financial Officer, 
                                   Controller, Director
                                        9