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 March 31, 2001

                                       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
 incorporation or organization)                              Identification No.)


                     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 May 14, 2001     8,957,660
<PAGE>
PART I -- FINANCIAL INFORMATION

ITEM 1 -- FINANCIAL STATEMENTS

                       FRONTIER ADJUSTERS OF AMERICA, INC.
                                AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                                  March 31, 2001   June 30, 2000
                                                  --------------   -------------
                                                    (unaudited)         (*)
               ASSETS

CURRENT ASSETS
   Cash and cash equivalents                        $ 4,158,204     $ 2,132,297
   Receivables                                          999,423       1,344,935
   Prepaid expenses                                     137,552         211,108
   Other                                                335,637         264,737
                                                    -----------     -----------
        TOTAL CURRENT ASSETS                          5,630,816       3,953,077
                                                    -----------     -----------

PROPERTY AND EQUIPMENT                                2,643,038       2,656,715
   Less accumulated depreciation
        and amortization                             (1,107,409)     (1,034,326)
                                                    -----------     -----------
                                                      1,535,629       1,622,389
                                                    -----------     -----------

OTHER ASSETS
   Receivables (long-term)                              110,000         200,000
   Investments (long-term)                              622,802         628,661
   Other                                                231,571         315,966
                                                    -----------     -----------
                                                        964,373       1,144,627
                                                    -----------     -----------
        TOTAL ASSETS                                $ 8,130,818     $ 6,720,093
                                                    ===========     ===========

               LIABILITIES

CURRENT LIABILITIES
   Accounts payable                                 $     7,348     $    25,835
   Accrued expenses                                     127,764         138,275
   Franchisee/licensee remittance payable               162,991         116,287
   Service fees due to UFAC                              30,580          15,000
   Accrued Income Taxes                                      --          33,989
   Other                                                144,096          90,367
                                                    -----------     -----------
        TOTAL CURRENT LIABILITIES                       472,779         419,753
                                                    -----------     -----------

STOCKHOLDERS' EQUITY
   Common stock                                          90,191          90,191
   Additional paid in capital                         2,104,413       2,104,413
   Treasury stock                                      (184,068)       (184,068)
   Other                                                 26,922          26,704
   Retained earnings                                  5,620,581       4,263,100
                                                    -----------     -----------
                                                      7,658,039       6,300,340
                                                    -----------     -----------
   TOTAL LIABILITIES & STOCKHOLDERS' EQUITY         $ 8,130,818     $ 6,720,093
                                                    ===========     ===========

----------
*    Condensed from audited financial statements.

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

                                        1
<PAGE>
                       FRONTIER ADJUSTERS OF AMERICA, INC.
                                AND SUBSIDIARIES

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (unaudited)

<TABLE>
<CAPTION>
                                            Nine Months Ended           Three Months Ended
                                                March 31,                    March 31,
                                        -------------------------   --------------------------
                                            2001          2000          2001           2000
                                        -----------   -----------   -----------    -----------
<S>                                     <C>           <C>           <C>            <C>
REVENUE
   Continuing licensee and
    franchisee fees                     $ 4,065,552   $ 3,842,175   $ 1,390,438    $ 1,256,489
   Adjusting fees                           556,614       882,979       165,766        225,609
                                        -----------   -----------   -----------    -----------
                                          4,622,166     4,725,154     1,556,204      1,482,098
                                        -----------   -----------   -----------    -----------

COST AND EXPENSES
   Compensation and employee benefits     1,125,711     1,682,283       384,610        396,282
   Office                                   228,208       306,702        78,013         89,176
   Advertising and promotion                 94,715       117,312        49,154         51,505
   Depreciation and amortization            162,016       166,168        68,474         51,217
   Bad debt expense                          89,327       227,203        54,612         91,365
   Services performed by UFAC               271,352       270,000        97,082        120,000
   Other                                    629,809       644,950       152,306        214,809
                                        -----------   -----------   -----------    -----------
                                          2,601,138     3,414,618       884,251      1,014,354
                                        -----------   -----------   -----------    -----------
INCOME FROM OPERATIONS                    2,021,028     1,310,536       671,953        467,744
                                        -----------   -----------   -----------    -----------

OTHER INCOME
   Interest income                          168,287        94,346        56,249         37,973
   Other (Net)                                5,229        33,727       (14,437)         3,706
                                        -----------   -----------   -----------    -----------
   TOTAL OTHER INCOME                       173,516      128, 073        41,812         41,679
                                        -----------   -----------   -----------    -----------
   INCOME BEFORE INCOME TAXES             2,194,544     1,438,609       713,765        509,423

INCOME TAXES                                837,063       567,712       260,171        204,926
                                        -----------   -----------   -----------    -----------
   NET INCOME                           $ 1,357,481   $   870,897   $   453,594    $   304,497
                                        ===========   ===========   ===========    ===========

EARNINGS PER SHARE
   Basic                                $       .15   $       .10   $       .05    $       .03
                                        ===========   ===========   ===========    ===========
   Diluted                              $       .15   $       .10   $       .05    $       .03
                                        ===========   ===========   ===========    ===========

WEIGHTED AVERAGE SHARES OUTSTANDING
   Basic                                  8,957,660     8,957,561     8,957,660      8,957,564
                                        ===========   ===========   ===========    ===========
   Diluted                                8,957,660     8,957,561     8,957,660      8,957,564
                                        ===========   ===========   ===========    ===========
</TABLE>

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

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

            CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                   (unaudited)

<TABLE>
<CAPTION>
                                                Nine Months Ended         Three Months Ended
                                                     March 31,                 March 31,
                                             -----------------------   -----------------------
                                                2001         2000         2001         2000
                                             ----------   ----------   ----------   ----------
<S>                                          <C>          <C>          <C>          <C>
NET INCOME                                   $1,357,481   $  870,897   $  453,594   $  304,497

OTHER COMPREHENSIVE INCOME,  NET OF TAX:

   Foreign currency translation adjustment          101        4,123           43          350
                                             ----------   ----------   ----------   ----------
COMPREHENSIVE INCOME                         $1,357,582   $  875,020   $  453,637   $  304,847
                                             ==========   ==========   ==========   ==========
</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 CASH FLOWS
                                   (unaudited)

                    NINE MONTHS ENDED MARCH 31, 2001 AND 2000

<TABLE>
<CAPTION>
                                                                  2001             2000
                                                              -----------      -----------
<S>                                                           <C>              <C>
NET INCOME                                                    $ 1,357,481      $   870,897
                                                              -----------      -----------
Adjustments to reconcile net income to net cash
provided by operating activities:
   Depreciation and amortization:                                 162,016          166,168
   Loss on disposition of property and equipment                   26,472            5,340
   (Gain) on sale of investments                                       --          (13,494)
   (Gain) on sale of license                                      (10,959)            (267)
   Bad debt expense                                                89,327          227,203
Change in assets and liabilities:
(Increase) decrease in:
   Receivables                                                    122,566           91,411
   Prepaid expenses                                                73,556          172,448
   Other                                                          (70,809)             962
Increase (decrease) in:
   Accounts payable                                               (18,487)             782
   Accrued expenses                                               (10,511)        (224,551)
   Franchisee and licensee remittance payable                      46,704         (421,386)
   Service fees due to UFAC                                        15,580           70,000
   Other                                                           (5,484)          22,509
                                                              -----------      -----------
Total adjustments                                                 419,971           97,125
                                                              -----------      -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES                       1,777,452          968,022
                                                              -----------      -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Capital expenditures                                           (11,163)        (140,943)
   Investments purchased                                           (6,355)              --
   Proceeds on sale of fixed assets                                    --            1,209
   Proceeds from sales of investments                               6,177           63,494
   Proceeds from sale of intangible assets                         42,312          267,629
   Payments on license acquisition                                     --          (13,615)
   Advances to licensees and franchisees                       (1,655,336)      (2,837,412)
   Collections of advances to licensees and franchisees         1,872,602        2,869,832
                                                              -----------      -----------
   NET CASH PROVIDED BY INVESTING ACTIVITIES                      248,237          210,194
                                                              -----------      -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Cash dividends                                                      --       (5,918,475)
   Proceeds from sales of stock                                        --              287
                                                              -----------      -----------
   NET CASH  (USED IN) FINANCING ACTIVITIES                            --       (5,918,188)
   EFFECT OF EXCHANGE RATE CHANGES ON CASH                            218            6,812
                                                              -----------      -----------

NET INCREASE (DECREASE) IN CASH                                 2,025,907       (4,733,160)
   Cash at beginning of the period                              2,132,297        6,892,851
                                                              -----------      -----------
   Cash at the end of the period                              $ 4,158,204      $ 2,159,691
                                                              ===========      ===========

Supplemental disclosures of cash flow information
Cash paid during the period
   Income taxes                                               $   949,005      $   569,903
   Interest                                                   $        --      $     1,127
</TABLE>

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

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

                     NOTES TO CONDENSED 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 nine month periods ended March
     31, 2001 are not necessarily indicative of the results to be expected for
     the full year.

(2)  SUBSEQUENT EVENTS

     In April of 2001,  the Company  announced  that its  majority  shareholder,
     United  Financial  Adjusting  Company  ("UFAC"),  had  sold its  shares  to
     Merrymeeting,  Inc.  ("MMI") for $1.58 per share.  In conjunction  with the
     sale of the UFAC shares to MMI, the management  agreement  between Frontier
     and UFAC was  terminated.  It was also announced that  Frontier's  Board of
     Directors had accepted a proposal by MMI to take Frontier private through a
     cash-out  merger at $1.58 per share.  Consummation  of this  transaction is
     subject to shareholder approval.

(3)  LOSS ON SALE OF FIXED ASSETS

     In April of 2001, the Company entered into agreements to sell its Phoenix
     and Las Vegas offices to independent franchisees effective April 30, 2001,
     and May 31, 2001, respectively. A loss has been accrued for the fixed
     assets being transferred in accordance with these agreements in the amounts
     of $18,000 for the Phoenix Office and $ 7,225 for the Las Vegas office. For
     more information on the sale of these offices, see "Part II, Item 5 - Other
     information".

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  2001 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,  acquisitions, or
payments 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 and any other  reports on file with the SEC,  including
but not  limited to the extent of nature and  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.

In March of 2000,  the  Company  announced  plans  pursuant to which the Company
would exchange 11.2 million shares of its common stock for all of the issued and
outstanding  shares of  United  Financial  Adjusting  Company  ("UFAC")  and its
subsidiaries.  At that time,  Netrex  Holdings,  LLC ("Netrex") owned all of the
outstanding  shares  of  stock  in  UFAC  which  held  approximately  59% of the
Company's outstanding common stock. The Company announced on October 24, 2000 it
had agreed with UFAC to terminate the Merger Agreement  entered into between the
Company, UFAC, and Netrex, dated May 2, 2000.

                                       5
<PAGE>
In April of 2001, the Company announced that its majority shareholder, UFAC, had
sold its shares to  Merrymeeting,  Inc.  ("MMI")  for $1.58 per share.  MMI is a
privately held Delaware corporation owned jointly by John M. Davies,  Frontier's
Chairman of the Board,  and IVM  Intersurer  BV, a Netherlands  holding  company
which specializes in investing in insurance-related  business.  The Company also
announced that Frontier's  Board had accepted a proposal by MMI to take Frontier
private  through a  cash-out  merger at $1.58 per  share.  Consummation  of this
transaction  is subject to  shareholder  approval.  The Company will provide its
shareholders  with a proxy  statement  containing a detailed  description of the
proposed transaction prior to the Company's next shareholders' meeting.

FINANCIAL CONDITION

The Company has  historically  financed its growth and on-going  operations with
cash  generated  from  operations.  In the nine months ended March 31, 2001, the
Company's  operations  generated  $1,777,452 in cash. The most significant items
affecting  cash  generated  by  the  Company's  operations  are  net  income  of
$1,357,481,  decreases in  receivables  of $123,000  and in prepaid  expenses of
$74,000, and increases in franchisee/licensee  remittance payable of $47,000 and
in other assets of $71,000.  The increase in other assets is primarily due to an
increase in deferred income taxes.

For the nine months ended March 31, 2001,  the  Company's  investing  activities
generated  $248,000 in cash. The most significant items affecting cash generated
from investing activities are $1,873,000 given as advances or loans to licensees
and  franchisees  and  $1,655,000 in  collections  on advances or loans given to
licensees and franchisees.

For the nine months  ended March 31,  2001,  the Company did not generate or use
any cash in financing activities.

The Company  anticipates  that during fiscal 2001 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
between  $25,000  and  $50,000  in fiscal  2001 for  equipment  and  furnishings
pursuant to its capital investment program.

In June of 1999, a complaint  was filed in the 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 the
provision of claims  services.  The complaint seeks  compensatory  damages of at
least $1,800,000.  The Company has denied allegations of liability  contained in
the complaint.  The Company does not believe that the outcome of this litigation
will have a material adverse effect on the Company's  financial  condition.  For
further discussion, see "Part II, Item 1-Legal Proceedings".

The Company's  ratio of current assets to current  liabilities was 11.91 to 1 as
of March 31, 2001 and 9.42 to 1 as of June 30, 2000.

RESULTS OF  OPERATIONS  -- NINE MONTHS  ENDED  MARCH 31,  2001  COMPARED TO NINE
MONTHS ENDED MARCH 31, 2000

REVENUE

The Company's  revenue  decreased 2.2% or $103,000 to $4,622,000 during the nine
months  ended  March 31,  2001 from  $4,725,000  in the same period of the prior
fiscal year. This decrease  represents a $326,000 decrease in adjusting and risk
management  fees  and  an  increase  of  $223,000  in  continuing  licensee  and
franchisee fees.

The decrease of $326,000 in adjusting  and risk  management  fees to $557,000 in
the nine months ended March 31, 2001  compared to $883,000 in the same period of
the prior  fiscal year  represents  a 36.9%  decrease.  The Company  experienced
decreases of $196,000 in adjusting fees in its Phoenix,  Arizona office, $72,000
in  adjusting  fees in its  Tucson,  Arizona  office  (due  to the  sale of this
location),  and $56,000 in  adjusting  fees in its Las  Vegas/Henderson,  Nevada
office. The remainder of the decrease,  $2,000, is due to the discontinuation of
risk management services provided by the Company's home office.

The decrease in the Phoenix  adjusting office is primarily due to a reduction in
marketing  efforts  that  resulted in a decrease  in claims  assigned by clients
during the nine months  ended March 31, 2001 as compared to the prior year.  The
decrease in the Las  Vegas/Henderson  adjusting office is predominately a result
of a decrease in storms  during the nine months ended March 31, 2001 as compared
to the same  period of the prior  year.  The  decrease  in the Tucson  adjusting
office  is the  result  of the  Company's  sale of the  Tucson  office  to a new
franchisee  on  January  1,  2000.  In April  2001,  the  Company  entered  into
agreements to sell the Phoenix and Las  Vegas/Henderson  offices to  independent
franchisees.  Finally,  the Company ceased  providing risk  management  services
within the home office during the prior fiscal year

                                       6
<PAGE>
as it was not economical to continue to provide such  services.  The decision to
provide  risk  management  services  for  clients  continues  to remain with the
individual franchisees and licensees.

The Company's  revenue from  continuing  licensee and franchisee  fees increased
$223,000  or 5.8% from  $3,842,000  in the nine  months  ended March 31, 2000 to
$4,065,000 in the nine months ended March 31, 2001.  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 the licensee and  franchisee  fees paid.  To further  enhance  revenue
growth,  the Company  continues  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.

COMPENSATION AND FRINGE BENEFITS

Compensation  and  employee  benefits  represents  approximately  43.3%  of  the
Company's  costs and expenses  and also  represents  the largest  single item of
expense.  These expenses decreased $556,000 or 33.1% from $1,682,000 in the nine
months ended March 31, 2000 to $1,126,000  in the current nine month  period.  A
portion  of this  decrease  relates  to the  resignation  of an  Executive  Vice
President on January 31, 2000.  During the nine months ended March 31, 2000, the
Company  was  still  paying   compensation  and  benefits  associated  with  his
employment  in  addition to a severance  package.  During the nine month  period
ended March 31, 2001,  certain  services  provided by the former  Executive Vice
President  were  provided by UFAC  pursuant to a service  agreement  between the
Company and UFAC.  Charges for these  services are  reflected in a fixed monthly
fee paid to UFAC  under  the  service  agreement.  The  agreement  with UFAC was
cancelled  effective  April 30,  2001.  The Company  expects  these  expenses to
increase as a result of the cancellation of the agreement with UFAC. For further
discussion, see "Service Fees".

The decrease  further  reflects the fact that most of the adjusters  employed by
the Company-owned adjusting offices are compensated by commission based on their
adjusting services.  As the adjusting fees in these offices decrease,  the wages
paid to these  adjusters also  decrease.  During the nine months ended March 31,
2001, wages paid to adjusters  decreased $103,000 as compared to the same period
of the prior year. The Company expects these expense to decrease  further due to
the sale of the Phoenix and Las Vegas/Henderson offices. Furthermore, during the
prior  fiscal  year,  the  Company  replaced  its  profit  sharing  plan  with a
gainsharing  and a 401K plan,  decreasing  expenses  related  to these  plans by
$35,000 for the nine months  ended March 31, 2001 as compared to the same period
of the prior year.  Finally,  the Company has reduced the amount of compensation
paid to employees due to the departure and  non-replacement  of certain salaried
personnel.

SERVICE FEES

From April 30, 1999 to April 30, 2001, the Company had a service  agreement with
UFAC  whereby  the  Company  paid a $25,000  monthly  fee for  certain  services
provided  by UFAC.  Services  included  under this  agreement  were  management,
marketing,  technology,  human  resource  support and  accounting  and reporting
support.  For each of the nine months ended March 31, 2001 and 2000, the Company
incurred $225,000 in service fees under this agreement.

The  Company  also  paid UFAC for  services  performed  beyond  the scope of the
service  agreement.  For the nine  months  ended  March 31,  2001,  the  Company
incurred an additional $34,000 in computer consulting fees, $11,000 in telephone
support  for the  Company's  after-hour  hotline  and  $1,000  in  miscellaneous
services,  for an aggregate of $46,000 in services  provided by UFAC outside the
scope of the service agreement and for an aggregate of $271,000 paid to UFAC for
all services.

As a result of the sale of UFAC's shares to MMI, the service agreement with UFAC
was cancelled  effective  April 30, 2001.  The Company  expects that the related
expenses will increase as it replaces the services previously supplied by UFAC.

EXPENSES OTHER THAN COMPENSATION AND FRINGE BENEFITS AND UFAC SERVICE FEES

The Company's  expenses  other than  compensation  and fringe  benefits and UFAC
service fees decreased  $258,000 or 17.6% during the nine months ended March 31,
2001 as compared to the same period of the prior fiscal year. The principal

                                       7
<PAGE>
items  affecting  these  expenses are decreases of $138,000 in bad debt expense,
$78,000 in office expenses, $23,000 in advertising and promotion, and $20,000 in
computer  consulting and increases of $47,000 in legal fees and $16,000 in audit
and accounting services.

The Company has  traditionally  advanced funds to  franchisees  and licensees to
assist them in the initial  start-up and growth of their  business.  The Company
reserves for such loans based upon historical  experience and current changes in
circumstances.  Particularly, loans are reserved for when the Company determines
that the loan is uncollectible or when collectability of the entire loan balance
is  questionable.  During the nine months ended March 31, 2001,  the Company had
lower  incidents of loans turning into  uncollectible  or  questionable  debt as
compared to the same period of the prior fiscal  year,  thereby  decreasing  bad
debt expense by $138,000.

Office expenses decreased  primarily due to the Company's  purchases of supplies
being greater during the nine months ended March 31, 2000 in preparation of Year
2000. The Company wanted to ensure an ample  inventory of supplies as of January
1, 2000 in the event of any shortages. Furthermore, the Company no longer incurs
office expenses associated with the Tucson,  Arizona adjusting office.  Computer
consulting  fees also decreased as the need for such services was greater during
the nine months ended March 31, 2000 in preparation of Year 2000.

The decrease in advertising  and promotional  expenses  reflects the purchase of
promotional items during the nine months ended March 31, 2000 that were not made
during the same period of the current fiscal year.  Furthermore,  this reduction
is also due to the  non-renewal  of the  Company's  share in a luxury suite at a
sporting facility during fiscal 2000.

Legal fees and audit and accounting  services were higher during the nine months
ended  March 31,  2001 as  compared  to the same period of the prior year as the
Company's  need for such services  increased in preparation of the once proposed
and now terminated transaction with UFAC.

INCOME TAXES

The  Company's  income taxes for the nine months ended March 31, 2001 were 38.1%
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  $46,000 or 35.9% from $128,000 in the nine
months ended March 31, 2000 to $174,000 in the nine months ended March 31, 2001.
This increase is primarily due to the $74,000  increase in interest  income,  as
the  Company  has earned  more  interest  on its  available  cash this period as
compared  to the  same  period  of the  prior  fiscal  year.  This was due to an
increase in available  cash and the  investment  of a higher  percentage  of the
Company's  available  cash.  This  increase  was  partially  offset by a loss of
$25,000 from the sale of fixed assets resulting from the sale of the Phoenix and
Las Vegas offices (see "Part II, Item 5-Other  Information")  and from a $13,000
decrease in the gain on sale of investments.

NET INCOME

The  Company's  net income for the nine months  ended  March 31, 2001  increased
$486,000  or 55.8% from  $871,000  in the nine  months  ended  March 31, 2000 to
$1,357,000  in the current  period.  The most  significant  items  affecting net
income were a $103,000 decrease in revenue,  a $556,000 decrease in compensation
and fringe benefits, a $258,000 decrease in expenses other than compensation and
fringe benefits and UFAC service fees, and a $46,000 increase in other income.

RESULTS OF OPERATIONS -- THREE MONTHS ENDED MARCH 31, 2001 COMPARED TO THE THREE
MONTHS ENDED MARCH 31, 2000

REVENUE

The Company's  revenue  increased 5.0% or $74,000 to $1,556,000 during the three
months  ended  March 31,  2001 from  $1,482,000  in the same period of the prior
fiscal year.  The decrease  represents a $60,000  decrease in adjusting and risk
management  fees and a $134,000  increase in continuing  licensee and franchisee
fees.

                                       8
<PAGE>
The decrease of $60,000 in adjusting and risk management fees to $166,000 in the
three months ended March 31, 2001 compared to $226,000 in the same period of the
prior fiscal year represents a 26.5% decrease. The Company experienced decreases
of $49,000 in adjusting  fees in its Phoenix,  Arizona  office and of $16,000 in
adjusting fees in its Las Vegas/Henderson,  Nevada office. The Tucson office was
sold in January of 2000,  and its  revenue was minimal and the result of run-off
business.

The decrease in the Phoenix  adjusting office is primarily due to a reduction in
marketing  efforts  that  resulted in a decrease  in claims  assigned by clients
during the three months ended March 31, 2001 as compared to the prior year.  The
decrease in the Las  Vegas/Henderson  adjusting office is predominately a result
of a decrease in storms during the three months ended March 31, 2001 as compared
to the same quarter of the prior year. In April 2001,  the Company  entered into
agreements  to  sell  the  Phoenix  and  the  Las  Vegas/Henderson   offices  to
independent franchisees.

The Company's  revenue from  continuing  licensee and franchisee  fees increased
$134,000 or 10.7% from  $1,256,000  in the three  months ended March 31, 2000 to
$1,390,000 in the current  quarter.  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 the licensee and  franchisee  fees paid.  To further  enhance  revenue
growth,  the Company  continues  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.

COMPENSATION AND FRINGE BENEFITS

Compensation  and  employee  benefits  represents  approximately  43.6%  of  the
Company's  costs and expenses  and also  represents  the largest  single item of
expense.  These  expenses  decreased  $11,000 or 2.8% from $396,000 in the three
months  ended March 31, 2000 to $385,000 in the current  quarter.  The  decrease
reflects  the fact  that most of the  adjusters  employed  by the  Company-owned
adjusting  offices  are  compensated  by  commission  based on  their  adjusting
services.  As the adjusting  fees in these offices  decrease,  the wages paid to
these  adjusters  also  decrease.  During the three months ended March 31, 2001,
wages paid to adjusters  decreased by $21,000 as compared to the same quarter of
the previous year. In addition,  the Company  reduced the amount of compensation
paid to employees due to the departure and  non-replacement  of certain salaried
personnel.  However,  the Company experienced a $17,000 increase in casual labor
expenses due to the increased use of temporary personnel.

SERVICE FEES

From April 30, 1999 to April 30, 2001, the Company had a service  agreement with
UFAC  whereby  the  Company  paid a $25,000  monthly  fee for  certain  services
provided  by UFAC.  Services  included  under this  agreement  were  management,
marketing,  technology,  human  resource  support and  accounting  and reporting
support. For each of the three months ended March 31, 2001 and 2000, the Company
incurred $75,000 in service fees under this agreement.

The  Company  also  paid UFAC for  services  performed  beyond  the scope of the
service  agreement.  For the three  months  ended  March 31,  2001,  the Company
incurred an additional $22,000 for computer  consulting fees,  telephone support
for the Company's  after-hour hotline and other miscellaneous  services,  for an
aggregate of $97,000 paid to UFAC for all services.

As a result of the sale of UFAC's shares to MMI, the Service agreement with UFAC
was cancelled  effective  April 30, 2001.  The company  expects that the related
expenses will increase as it replaces the services previously supplied by UFAC.

EXPENSES OTHER THAN COMPENSATION AND FRINGE BENEFITS AND UFAC SERVICE FEES

The Company's  expenses  other than  compensation  and fringe  benefits and UFAC
service fees decreased  $96,000 or 19.3% during the three months ended March 31,
2001 as compared  to the same period of the prior  fiscal  year.  The  principal
items  affecting  these  expenses are  decreases of $36,000 in bad debt expense,
$27,000 in audit and accounting fees, and $20,000 in legal fees.

                                       9
<PAGE>
The Company has  traditionally  advanced funds to  franchisees  and licensees to
assist them in the initial  start-up and growth of their  business.  The Company
reserves for such loans based upon historical  experience and current changes in
circumstances.  Particularly, loans are reserved for when the Company determines
that the loan is uncollectible or when collectability of the entire loan balance
is  questionable.  During the three months ended March 31, 2001, the Company had
fewer  incidents of loans turning into  uncollectible  or  questionable  debt as
compared to the same quarter of the prior fiscal year,  thereby  decreasing  bad
debt expense by $36,000.

Legal fees and audit and accounting  services  decreased during the three months
ended  March 31,  2001 as  compared  to the same period of the prior year as the
Company's  need for such services  increased in preparation of the once proposed
and now terminated transaction with UFAC.

INCOME TAXES

The  Company's  income taxes were 36.5% and 40.2% of its income before taxes for
the three  months ended March 31, 2001 and 2000,  respectively.  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  $100 or less than 1% from $41,700 in the
three months ended March 31, 2000 to $41,800 in the three months ended March 31,
2001. The increase was primarily due to changes in interest income and gain/loss
on the sale of fixed assets. Interest income increased $18,000; however, loss on
the sale of fixed assets increased $15,000. The majority of the loss on the sale
of fixed  assets was due to the sale of the assets of the  Phoenix and Las Vegas
offices (see "Part II, Item 5-Other Information").

NET INCOME

The  Company's  net income for the three months  ended March 31, 2001  increased
$149,000  or 48.8% from  $305,000  in the three  months  ended March 31, 2000 to
$454,000 in the current period.  The most significant items affecting net income
were an increase in revenue of $74,000,  a decrease of $96,000 in expenses other
than  compensation  and fringe  benefits  and UFAC  service  fees, a decrease of
$36,000 in bad debt expense, and a decrease of $22,000 in UFAC 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, exchange rates, commodity prices, equity prices and other market changes.
Market risk is inherent in all market risk sensitive financial instruments.

During  the nine  months  ended  March 31,  2001,  the  Company  did not own any
marketable securities and is therefore not exposed to any market risk associated
with such investments.

The  Company has a book value of $620,000  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.

                                       10
<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.  The Company has
denied the allegations of liability contained in the complaint.  The Company has
sought  coverage  under  various  insurance  policies it holds and has  received
denials of coverage from the  carriers.  The Company is continuing to attempt to
obtain  coverage  and defense from these  carriers.  The Company is in the final
stages of  negotiating  a  settlement  whereby the Company  will be removed as a
defendant in this suit, and the Company  believes that this  litigation  will be
resolved  without a material  adverse  effect on the financial  condition of the
Company.  Therefore,  as of March 31,  2001,  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 exception to 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 -- NOT APPLICABLE

ITEM 5 -- OTHER INFORMATION

In April of 2001,  the Company  entered into  agreements to sell its Phoenix and
Las Vegas offices.  The Phoenix office sale is effective April 30, 2001, and the
Las Vegas  office  sale is  effective  May 31,  2001.  The sale will result in a
deferred  gain of $120,000 and  $100,000 for the Phoenix and Las Vegas  offices,
respectively.  The  Company is  collecting  the  proceeds  from  these  sales by
deducting a specified  percentage of the franchisees'  weekly  remittances to be
applied  against  the  sales  price  until  paid in  full.  The  deferred  gains
associated  with these sales will be netted  against the  receivable for balance
sheet  presentation  and  recorded  as gains on the sale of assets when they are
received. In addition, a loss has been recorded for the sale of the fixed assets
of these offices in the amounts of $18,000 for the Phoenix office and $7,225 for
the Las Vegas office.

In April, 2001, the Company announced that UFAC, its majority  shareholder,  had
sold its shares in Frontier to  Merrymeeting,  Inc. ("MMI") for $1.58 per share.
As a result of the sale of the shares by UFAC to MMI, the  management  agreement
between Frontier and UFAC was terminated  effective April 30, 2001. In addition,
the Company announced that Frontier's Board of Directors had approved a proposal
by MMI to take Frontier  private  through a cash-out  merger at a price of $1.58
per share.  Consummation  of this  transaction  is subject  to  approval  by the
Company's shareholders.

ITEM 6 -- NOT APPLICABLE

                                       11
<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: 05/14/01                   /s/ John M. Davies
     --------------              -----------------------------------------------
                                 John M. Davies, President, Chief Executive
                                 Officer, Chairman of the Board and Director


Date: 05/14/01                   /s/ Jeffrey R. Harcourt
     --------------              -----------------------------------------------
                                 Jeffrey R. Harcourt, Chief Financial Officer,
                                 Treasurer and Director

                                       12