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 September 30, 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 November 12, 1999      8,957,560
                                                                       ---------
<PAGE>
PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

                       FRONTIER ADJUSTERS OF AMERICA, INC.
                                AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEET

                                              September 30, 1999   June 30, 1999
                                                 (unaudited)            (*)
                                              ------------------   ------------
                                     ASSETS
CURRENT ASSETS
  Cash and cash equivalents                     $  1,722,550       $  6,892,851
  Investments                                         12,866                 --
  Receivables                                      1,443,383          1,603,756
  Prepaid expenses                                   278,651            344,041
  Other                                              230,682            298,214
                                                ------------       ------------
     TOTAL CURRENT ASSETS                          3,688,132          9,138,862
                                                ------------       ------------

PROPERTY AND EQUIPMENT                             2,632,457          2,540,219
  Less accumulated depreciation and
    amortization                                    (966,320)          (931,283)
                                                ------------       ------------
                                                   1,666,137          1,608,936
                                                ------------       ------------
OTHER ASSETS
  Cost of subsidiary in excess of net
    tangible assets acquired                         213,817            213,817
  Less accumulated amortization                     (182,018)          (181,440)
                                                ------------       ------------
                                                      31,799             32,377
  Receivables (Long term)                            320,000            350,000
  Investments (Long term)                            685,254            685,148
  Other                                              280,068            303,661
                                                ------------       ------------
                                                $  1,317,121          1,371,186
                                                ------------       ------------
     TOTAL ASSETS                               $  6,671,390       $ 12,118,984
                                                ============       ============
                                  LIABILITIES
CURRENT LIABILITIES
  Accounts payable                              $     31,105       $     28,005
  Accrued expenses                                   152,417            404,325
  Franchisee/licensee remittance payable             706,132            552,946
  Accrued income taxes                               150,427                 --
  Service fees due to UFAC                            75,000             50,000
  Distribution payable                                    --          5,918,475
  Other                                              126,802            111,600
                                                ------------       ------------
     TOTAL CURRENT LIABILITIES                     1,241,883          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                                               29,195             20,653
  Retained earnings                                3,390,063          3,022,731
                                                ------------       ------------
                                                   5,429,507          5,053,633
                                                ------------       ------------
  TOTAL LIABILITIES & STOCKHOLDERS' EQUITY      $  6,671,390       $ 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)

                 THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998


                                                       1999             1998
                                                   -----------      -----------
REVENUE
  Continuing licensee and franchisee fees          $ 1,312,607      $ 1,273,123
  Adjusting and risk management fees                   363,457          360,246
                                                   -----------      -----------
                                                     1,676,064        1,633,369
                                                   -----------      -----------
COST AND EXPENSES
  Compensation and fringe benefits                     586,377          717,766
  Office                                                90,500           95,515
  Advertising and promotion                             41,434           40,587
  Depreciation and amortization                         57,522           62,475
  Provision for doubtful accounts                       52,840           48,000
  Service fees paid to UFAC                             75,000               --
  Other                                                219,485          273,706
                                                   -----------      -----------
                                                     1,123,158        1,238,049
                                                   -----------      -----------
  INCOME FROM OPERATIONS                               552,906          395,320
                                                   -----------      -----------

OTHER INCOME (EXPENSE)
  Interest income                                       23,064           29,434
  Other (net)                                            7,959           (1,491)
                                                   -----------      -----------
                                                        31,023           27,943
                                                   -----------      -----------
  INCOME BEFORE INCOME TAXES                           583,929          423,263

INCOME TAXES                                           216,597          167,347
                                                   -----------      -----------
     NET INCOME                                    $   367,332      $   255,916
                                                   ===========      ===========

EARNINGS PER SHARE
  Basic                                            $       .04      $       .06
                                                   ===========      ===========
  Diluted                                          $       .04      $       .06
                                                   ===========      ===========
WEIGHTED AVERAGE SHARES OUTSTANDING
  Basic                                              8,957,560        4,605,358
                                                   ===========      ===========
  Diluted                                            8,957,560        4,609,163
                                                   ===========      ===========

   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)

                 THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998



                                                        1999            1998
                                                     ---------        ---------
NET INCOME                                           $ 367,332        $ 255,916
                                                     ---------        ---------
OTHER COMPREHENSIVE INCOME (NET OF TAX)
  Foreign currency translation adjustments                 448               --
  Unrealized gain (loss) on securities                   8,094          (27,897)
                                                     ---------        ---------
                                                         8,542          (27,897)
                                                     ---------        ---------
  COMPREHENSIVE INCOME                               $ 375,874        $ 228,019
                                                     =========        =========


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

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

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)

                 THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998


                                                        1999            1998
                                                    -----------     -----------
NET INCOME                                          $   367,332     $   255,916
                                                    -----------     -----------
Adjustments to reconcile net income to net
 cash provided by operating activities:
   Depreciation and amortization                         57,522          63,021
   Loss on disposition of property & equipment               --           4,979
   Allowance for doubtful accounts                       52,840          48,000
Change in assets and liabilities:
(Increase) decrease in:
   Receivables                                           83,032         (26,000)
   Prepaid expenses                                      65,390          16,666
   Other                                                 57,772         137,271
Increase (decrease) in:
   Accounts payable                                       3,100          21,048
   Service fees due to UFAC                              25,000              --
   Accrued expenses                                    (101,481)       (339,965)
   Franchisee and licensee remittance payable           153,186          27,259
   Other                                                 10,166         (13,299)
                                                    -----------     -----------
   Total adjustments                                    406,527         (61,020)
                                                    -----------     -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES               773,859         194,896
                                                    -----------     -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Proceeds from sale of equipment                           --          21,510
   Capital expenditures                                 (92,238)        (89,497)
   Investment purchased                                      --        (988,096)
   Proceeds from sales of investments                        --       1,000,000
   Proceeds from sales of license                        25,000              --
   Payments on License acquisition                      (13,660)         (6,935)
   Advances to licensees and franchisees             (1,020,525)     (1,092,284)
   Collections of advances to licensees
    and franchisees                                   1,075,026       1,137,159
                                                    -----------     -----------
   NET CASH (USED IN) INVESTING ACTIVITIES              (26,397)        (18,143)
                                                    -----------     -----------
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                     712              --
                                                    -----------     -----------

NET INCREASE (DECREASE) IN CASH                      (5,170,301)          4,052
   Cash at beginning of the period                    6,892,851         929,364
                                                    -----------     -----------
   Cash at the end of the period                    $ 1,722,550     $   933,416
                                                    ===========     ===========

Supplemental disclosures of Cash Flow information
Cash paid during the period
   Income taxes                                     $     5,777     $     3,215
   Interest                                         $       774     $       565

   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 month period ended  September  30,
    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
    follows:
<TABLE>
<CAPTION>
                                   Las Vegas/Henderson    Corporate and
                                    and Tucson Offices   Phoenix Office  Consolidated
                                    ------------------   --------------  ------------
<S>                                     <C>               <C>            <C>
    September 30, 1999

    Revenue                             $ 129,335         $1,546,729     $1,676,064

    Depreciation and Amortization          10,672             46,850         57,522
    Interest Income                            --             23,064         23,064
    Segment Net Income                      3,676            363,656        367,332
    Expenditures for Segment Assets            --             92,238         92,238
    Segment Assets                      $ 144,208         $6,527,182     $6,671,390


    September 30, 1998

    Revenue                             $ 119,735         $1,513,634     $1,633,369

    Depreciation and Amortization          10,255             52,220         62,475
    Interest Income                            --             29,434         29,434
    Segment Net Income (Loss)                (914)           256,830        255,916
    Expenditures for Assets                 1,013             88,484         89,497
    Segment Assets                      $ 156,686         $7,369,198     $7,525,884
</TABLE>

(3) Earnings Per Share

    The effect of 129,629  stock  options are not  included in the  earnings per
    share calculation because they are antidilutive.


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 Year 2000
    readiness; 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 quarter ended  September 30,
    1999, the Company's operations generated $774,000 in cash.

    During the three months ended September 30, 1999, the most significant items
    affecting  cash generated by the Company's  operations  are net income,  the
    $153,000  increase in  franchisee  and licensee  remittance  payable and the
    $101,000  decrease in accrued expenses.  The increase in remittance  payable
    reflects  the  timing  difference  of payout  dates to the period  end.  The
    decrease in accrued  expenses  results from the payout of employee  benefits
    and bonuses during the three months ended September 30, 1999.

    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.

                                        6
<PAGE>
    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".

    The Company's  ratio of current assets to current  liabilities was 2.97 to 1
    as of September 30, 1999 and 1.29 to 1 as of June 30, 1999.

    RESULTS OF OPERATIONS - QUARTER ENDED SEPTEMBER 30, 1999 COMPARED TO 1998

    REVENUE

    The Company's revenue increased 2.6% or $43,000 to $1,676,000 in the current
    quarter from  $1,633,000  in the same period of the prior  fiscal year.  The
    increase represents a $40,000 increase in continuing licensee and franchisee
    fees and a $3,000 increase in adjusting and risk management fees.

    The increase of $3,000 in adjusting and risk  management  fees from $360,000
    in the quarter  ended  September  30, 1998 to $363,000 in the quarter  ended
    September  30, 1999  represents a 1% increase.  The Company  experienced  an
    increase of $28,000 in adjusting fees in its Las Vegas office, and decreases
    of $6,000 and $19,000 in adjusting fees from the Phoenix and Tucson offices,
    respectively.  The increase in the Las Vegas office is primarily  the result
    of an increase in storms this  quarter as compared to the same period of the
    prior year.

    The Company's revenue from continuing licensee and franchisee fees increased
    3% or $40,000 from  $1,273,000  in the quarter  ended  September 30, 1998 to
    $1,313,000 in the quarter ended September 30, 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. The Company,
    therefore,  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 licencee and
    franchisee fees paid from other sources.

    COMPENSATION AND FRINGE BENEFITS

    Compensation  and  fringe  benefits  represent   approximately  52%  of  the
    Company's  cost and expenses and are the  Company's  largest  single item of
    expense.  These  expenses  decreased  18.4% or $132,000 from $718,000 in the
    three months ended  September  30, 1998 to $586,000 in the current  quarter.
    This decrease is the result of the  retirements 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.  See discussion
    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  September  30, 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.

                                        7
<PAGE>
    EXPENSES OTHER THAN COMPENSATION AND FRINGE BENEFITS AND SERVICE FEES

    The Company's expenses other than compensation  decreased $59,000 during the
    three months ended September 30, 1999 as compared to the same quarter of the
    prior  fiscal  year.  The  principal  items  affecting  these  expenses  are
    decreases in the  following  expenses:  Directors  fees of $13,500;  general
    insurance of $17,000; legal fees of $12,000; and computer consulting fees of
    $11,000.   The  balance  of  the  Company's  costs  and  expenses  have  not
    significantly changed from the same period of the prior fiscal year.

    INCOME TAXES

    The  Company's  income taxes were 37.1% and 39.5% of its income before taxes
    for the three months  ending  September 30, 1999 and 1998,  respectively.  A
    difference in these rates is due to a decrease 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  $3,000 or 10.7% from $28,000 in the
    quarter ended September 30, 1998 to $31,000 in the current quarter. The most
    significant  items  affecting  other  income  include a $6,000  decrease  in
    interest income, a $5,000 increase in other income, and a $5,000 loss on the
    sale of fixed assets for the quarter ended September 30, 1998.

    NET INCOME

    The Company's net income for the quarter ended  September 30, 1999 increased
    $111,000 or 43.4% from $256,000 in the quarter  ended  September 30, 1998 to
    $367,000 in the current quarter.  The most  significant  items affecting net
    income  were  a  $43,000  increase  in  revenue,   a  $132,000  decrease  in
    compensation and fringe benefits,  a $75,000 increase in service fees, and a
    $59,000 decrease in expenses other than compensation and fringe benefits and
    service fees.

    RESULTS OF OPERATIONS - QUARTER ENDED SEPTEMBER 30, 1998 COMPARED TO 1997

    REVENUE

    The Company's revenue increased 10% or $149,000 to $1,633,000 in the quarter
    ended  September 30, 1998,  from  $1,484,000 in the same period of the prior
    fiscal year.  The increase is a combined  $96,000  increase in adjusting and
    risk  management  fees and a $53,000  increase in  continuing  licensee  and
    franchisee fees.

    The increase of $96,000 in adjusting and risk  management fees from $264,000
    in the quarter  ended  September  30, 1997 to $360,000 in the quarter  ended
    September 30, 1998  represents a 36% increase.  The Company  experienced  an
    increase of $120,000 in adjusting fees in its Phoenix office,  and decreases
    of $17,000 and $7,000 in  adjusting  fees from the Las  Vegas/Henderson  and
    Tucson offices,  respectively.  The increase in fees from the Phoenix office
    primarily reflects fees generated from a new client.

    The Company's revenue from continuing licensee and franchisee fees increased
    4% or $53,000 from  $1,220,000  in the quarter  ended  September 30, 1997 to
    $1,273,000 in the quarter ended September 30, 1998.  This increase  reflects
    the benefit to the Company's licensees and franchisees due to an increase in
    the use of their services by insurance companies and self-insureds resulting
    from a larger  volume of claims and from a greater  demand for the Company's
    services.

    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

                                        8
<PAGE>
    historically  seen growth in licensee  and  franchisee  fees paid.  However,
    during the prior fiscal year 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.  For the quarter ended  September 30, 1998,  the
    Company   successfully    completed   negotiations   for   national/regional
    relationships  with  three new  clients  and with one  existing  client  for
    additional services. 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  revenue  from its
    Phoenix, Tucson, and Las Vegas/Henderson operations.

    COMPENSATION AND FRINGE BENEFITS

    Compensation  and  fringe  benefits  represent   approximately  58%  of  the
    Company's  costs and  expenses  and  represent  the  largest  single item of
    expense.  These expenses increased 11% or $73,000 from $645,000 in the three
    months ended  September 30, 1997 to $718,000 in the quarter ended  September
    30,  1998.  This  increase  is the  result of the  addition  of a  Marketing
    Director in the second quarter of the last fiscal year, additional employees
    hired including  temporary  employees to handle  increased work loads in the
    Corporate and Phoenix  office,  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 increased
    $70,000 during the three months ended  September 30, 1998 as compared to the
    same quarter of the prior fiscal year. The principal  items  affecting these
    expenses  are a $40,000  increase in audit and  accounting  fees,  a $15,000
    increase in computer  consulting fees, a $14,000 increase in directors fees,
    a $12,000 increase in insurance costs, and a $19,000 decrease in advertising
    and promotional expenses.

    The increase in audit and accounting fees reflects the Company's decision to
    outsource  certain  accounting  functions  that  were  previously  performed
    in-house.  The Company believes that this will enable it to more efficiently
    monitor  compliance of the  constantly  changing  state and federal laws and
    regulations.  Furthermore,  the  Company  incurred  increased  auditing  and
    accounting  and  consulting  fees in the current  quarter.  The  increase in
    computer   consulting  fees  relates  to  the  Company's  planning  for  and
    utilization  of  improved  technology  to  provide  better  services  to its
    franchisees/licensees  and clients.  The increase in insurance costs results
    from an increase in the cost of insurance as well as increased coverage. The
    increase in directors fees reflects the greater number of directors meetings
    in the first quarter of this fiscal year due to  consideration  by the Board
    of the  UFAC  transaction.  The  decrease  in  advertising  and  promotional
    expenses  reflects the purchase of promotional items in the first quarter of
    the prior  fiscal year.  The Company  anticipates  similar  purchases in the
    second  quarter of the current  fiscal  year.  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  39.5% 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  decreased  $10,000 or 26% from $38,000 in the
    quarter ended  September 30, 1997 to $28,000 in the quarter ended  September
    30, 1998. The most significant items affecting other income include a $7,000
    decrease  in  interest  income,  and a loss on the sale of fixed  assets  of
    $5,000.

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<PAGE>
    NET INCOME

    The Company's net income for the quarter ended September 30, 1998, decreased
    $3,000 or 1% from  $259,000  in the  quarter  ended  September  30,  1997 to
    $256,000 in the quarter ended September 30, 1998. The most significant items
    affecting net income were a $149,000 increase in revenue, a $73,000 increase
    in compensation  and fringe  benefits,  a $70,000 increase in expenses other
    than compensation and fringe benefits.

    YEAR 2000 COMPLIANCE

    The "Year 2000" issue creates risk for the Company from unforeseen  problems
    in its own  computer  systems and from third  parties  with whom the Company
    deals. Many currently  installed  computer systems and software products are
    coded to accept two digit  entries in the date code  field.  These date code
    fields will need to accept four digit  entries to  distinguish  21st century
    dates from 20th century dates. Left uncorrected, time sensitive software may
    recognize  a date  using  "00" as the year 1900  rather  than the year 2000,
    resulting in a computer shutdown or incorrect calculations.  Failures of the
    Company's  and/or  third  parties'  computer  systems  could have a material
    adverse effect on the Company's ability to conduct its business.

    To date,  the Company  has  examined  both its  information  technology  and
    non-information  technology systems.  The Company determined that certain of
    the software used by the Company is not Year 2000 compliant. The Company has
    identified and purchased  upgraded software that is Year 2000 compliant.  In
    addition,  the Company is currently  updating all custom software so that it
    is Year 2000  compliant.  A full-time  programmer is  dedicating  all of her
    efforts to this project.  The Company  expects to complete these upgrades by
    November  30,  1999.  The  Company  has  had  its  computer  servers  tested
    internally  and by an external  party.  The external party has found all but
    one operating system are compliant. Arrangements are currently being made to
    upgrade the noncompliant  server. The Company hopes to finish its testing of
    internal systems by November 30, 1999.

    All of the Company's  personal computers that need to be Year 2000 compliant
    have been upgraded.  The Company has determined  that its telephone,  alarm,
    heating, and air conditioning systems will not be affected by the Year 2000.
    The  Company  has  completed  an analysis  of the  Company's  operations  to
    identify  the  remaining  Year 2000 issues  embodied in its  operations  and
    facilities  and is  developing a plan to resolve  such  issues.  The Company
    expects to complete the formal plan of resolution by November 30, 1999.

    Certain  software  products  sold by the Company to certain of its licensees
    and  franchisees  in prior  years  are not Year  2000  compliant.  A partial
    upgrade  to  accommodate  current  policy  dates on or after  Year  2000 has
    already been developed and  distributed to franchisees  free of charge.  The
    Company's  computer staff is developing an upgrade of the software that will
    be Year 2000 compliant.  The Company expects to complete  development of the
    Year 2000  compliant  version of its  software by  November  30,  1999.  The
    Company will  distribute  this version to  purchasers  of the  non-compliant
    version,  free of charge.  The Company does not anticipate  that the cost of
    this upgrade will be material to the Company's operations.

    Members  of the  Company's  computer  staff  are  undertaking  the  task  of
    contacting  the  Company's  customers and vendors to determine the status of
    such customers' and vendors' software for Year 2000 compliance.  None of the
    responses  received  thus far have  indicated  any  major  problems.  As the
    Company  identifies  these issues,  it will determine the steps necessary to
    minimize  disruptions  due  to  failures  in  Year  2000  compliance  by its
    customers
    and/or vendors.

    To date,  the  Company  has paid  approximately  $240,000  in the  analysis,
    development,  and  implementation of a plan to address its Year 2000 issues,
    and does not  expect  costs to  exceed  $325,000  in  total.  The  Company's
    estimate reflects  assumptions  regarding the extent of the Year 2000 issues
    embodied in the Company's  operations and facilities,  the  availability and
    cost of  personnel  trained  in this  area,  the  compliance  plans of third
    parties,  and similar  uncertainties.  However,  due to the  complexity  and
    pervasiveness  of the Year 2000 issue,  and in particular,  the  uncertainty

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<PAGE>
    regarding  the  compliance  programs of third  parties,  no assurance can be
    given that these estimates will be achieved, and actual results could differ
    materially from those  anticipated.  If the Company is unable to address the
    Year 2000 issues successfully,  or in a timely fashion, the Company may need
    to  devote  more  resources  to the  process  and  additional  costs  may be
    incurred. This could have a material adverse effect on the Company's results
    of operations.  The Company has purchased  insurance that may offset certain
    losses to the Company for claims  based upon  non-compliance  with Year 2000
    issues.

    In its  reasonably  likely  worst  case  Year  2000  scenario,  the  Company
    anticipates  that  the  software  which  it  uses,  despite  the  completion
    upgrades,  will still fail to be Year 2000  compliant.  In  addition,  it is
    possible  that the software  sold by the Company to certain of its licensees
    and  franchisees  will not become Year 2000 compliant  despite the Company's
    efforts to upgrade  this  software.  Finally,  the Company  anticipates  the
    possibility  that its customers' and vendors'  systems will not be Year 2000
    compliant. In the event that any of these scenarios materialize, the Company
    expects  that it  would  experience  problems  processing  transactions  and
    remitting  checks to licensees and  franchisees.  Licensees and  franchisees
    would experience a slow-down in their processing of paperwork.

    In the event that the steps being  implemented  by the Company fail to avoid
    problems associated with the Year 2000, the Company is currently  developing
    its  contingency  plans.  Such plans may include the  immediate  purchase of
    replacement  hardware  or software at the  beginning  of the Year 2000,  the
    switching of vendors who supply  goods or services to the Company,  or other
    alternatives.  In addition,  the Company installed a back-up power generator
    in August 1999 to prepare for the  unlikely  event of a power grid  failure.
    The Company  anticipates  that its  contingency  plans will be  completed no
    later than November 30, 1999.

    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 three  months ended  September  30,  1999,  the Company  owned an
    immaterial  number of common shares.  However,  in October 1999, the Company
    sold these  shares and 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.

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<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  September  30,  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.


                                   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: November 12, 1999                     /s/ Troy Huth
      -----------------                     -----------------------------------
                                            Troy Huth, President and Chairman
                                            of the Board, Director



Date: November 12, 1999                     /s/ Jeffrey R. Harcourt
      -----------------                     -----------------------------------
                                            Jeffrey R. Harcourt, Chief Financial
                                            Officer, Director

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