CONFORMED

                                    FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


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

For the Quarterly Period Ended March 31, 1999

                                       OR

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

For the transition period _______________________ to ___________________________

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

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


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


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


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


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


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                                                            Yes   X     No
                                                                 ---      ---

Number of shares of Common Stock outstanding on May 14, 1999           4,605,358
                                                ------------           ---------
<PAGE>
PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS
-----------------------------

                       FRONTIER ADJUSTERS OF AMERICA, INC.
                                AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS


                                                March 31, 1999    June 30, 1998
                                                --------------    -------------
                                                  (unaudited)         (*)
                                     ASSETS
CURRENT ASSETS
   Cash and cash equivalents                      $ 1,636,723     $   929,364
   Investments                                      1,305,717       1,289,519
   Receivables                                      1,466,679       1,582,020
   Prepaid expenses                                   257,200         317,454
   Other                                              328,567         439,638
                                                  -----------     -----------
        TOTAL CURRENT ASSETS                        4,994,886       4,557,995
                                                  -----------     -----------

PROPERTY AND EQUIPMENT                              2,615,763       2,543,631
   Less accumulated depreciation and
     amortization                                    (915,339)       (819,302)
                                                  -----------     -----------
                                                    1,700,424       1,724,329
                                                  -----------     -----------
OTHER ASSETS
   Cost of subsidiary in excess of net
     tangible assets acquired                         213,817         213,817
   Less accumulated amortization                     (180,862)       (179,129)
                                                  -----------     -----------
                                                       32,955          34,688
   Receivables (Long term)                            400,000         431,000
   Investments (Long term)                            695,042         694,724
   Other                                              437,340         357,964
                                                  -----------     -----------
                                                    1,565,337       1,518,376
                                                  -----------     -----------
        TOTAL ASSETS                              $ 8,260,647     $ 7,800,700
                                                  ===========     ===========
                                   LIABILITIES

CURRENT LIABILITIES
   Accounts payable                               $    72,506     $    62,118
   Accrued expenses                                   406,444         513,365
   Franchisee/licensee remittance payable             638,287         545,830
   Current portion long term liability                     --          28,509
   Other                                              216,833         193,684
                                                  -----------     -----------
        TOTAL CURRENT LIABILITIES                   1,334,070       1,343,506
                                                  -----------     -----------

LONG TERM LIABILITY                                        --           4,953
                                                  -----------     -----------
STOCKHOLDERS' EQUITY
   Common stock                                        47,820          47,820
   Additional paid in capital                       2,148,470       2,148,470
   Treasury stock                                    (529,584)       (529,584)
   Other                                               53,006          49,600
   Retained earnings                                5,206,865       4,735,935
                                                  -----------     -----------
                                                    6,926,577       6,452,241
                                                  -----------     -----------
   TOTAL LIABILITIES & STOCKHOLDERS' EQUITY       $ 8,260,647     $ 7,800,700
                                                  ===========     ===========

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

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

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (unaudited)
<TABLE>
<CAPTION>
                                          Nine Months Ended           Three Months Ended
                                               March 31,                   March 31,
                                          -----------------           ------------------
                                            1999         1998         1999          1998
                                            ----         ----         ----          ----
<S>                                      <C>          <C>            <C>          <C>
REVENUE
   Continuing licensee and
    franchisee fees                      $3,670,645   $3,436,123     $1,212,145   $1,094,217
   Adjusting fees                         1,059,009      899,259        360,027      346,215
                                         ----------   ----------     ----------   ----------
                                          4,729,654    4,335,382      1,572,172    1,440,432
                                         ----------   ----------     ----------   ----------

COST AND EXPENSES
   Compensation and employee benefits     2,108,759    2,036,412        690,975      712,261
   Office                                   316,169      299,019        120,134      116,600
   Advertising and promotion                207,497      240,281         98,707      115,698
   Depreciation and amortization            198,064      192,083         70,577       66,986
   Provision for doubtful accounts          152,845      144,000         56,845       48,000
   Other                                    778,003      481,800        222,361      147,030
                                         ----------   ----------     ----------   ----------
                                          3,761,337    3,393,595      1,259,599    1,206,575
                                         ----------   ----------     ----------   ----------
INCOME FROM OPERATIONS                      968,317      941,787        312,573      233,857
                                         ----------   ----------     ----------   ----------
OTHER INCOME
   Interest income                           86,848      101,405         29,573       31,555
   Other (Net)                               12,138       44,596          5,805        9,488
                                         ----------   ----------     ----------   ----------
   TOTAL OTHER INCOME                        98,986      146,001         35,378       41,043
                                         ----------   ----------     ----------   ----------
   INCOME BEFORE INCOME TAXES             1,067,303    1,087,788        347,951      274,900


INCOME TAXES                                423,672      427,938        139,735      108,083
                                         ----------   ----------     ----------   ----------
   NET INCOME                            $  643,631   $  659,850     $  208,216   $  166,817
                                         ==========   ==========     ==========   ==========

EARNINGS PER SHARE
   Basic                                 $      .14   $      .14     $      .05   $      .04
                                         ==========   ==========     ==========   ==========
   Diluted                               $      .14   $      .14     $      .05   $      .04
                                         ==========   ==========     ==========   ==========
WEIGHTED AVERAGE SHARES OUTSTANDING
   Basic                                  4,605,358    4,605,358      4,605,358    4,605,358
                                         ==========   ==========     ==========   ==========
   Diluted                                4,606,776    4,615,112      4,605,784    4,611,934
                                         ==========   ==========     ==========   ==========
</TABLE>
The accompanying notes are an integral part of these condensed statements.

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

            CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                   (unaudited)

<TABLE>
<CAPTION>
                                                 Nine Months Ended         Three Months Ended
                                                     March 31,                  March 31,
                                              -----------------------     ----------------------
                                                1999          1998          1999         1998
                                              ---------     ---------     ---------    ---------
<S>                                           <C>          <C>            <C>         <C>
                                              $ 643,631     $ 659,850     $ 208,216    $ 166,817
NET INCOME
OTHER COMPREHENSIVE INCOME, NET OF TAX:
   Foreign currency translation adjustment           --            75            --           --
   Unrealized gain (loss) on securities           3,406       (12,414)        3,222       20,251
                                              ---------     ---------     ---------    ---------
                                                  3,406       (12,339)        3,222       20,251
                                              ---------     ---------     ---------    ---------
COMPREHENSIVE INCOME                          $ 647,037     $ 647,511     $ 211,438    $ 187,068
                                              =========     =========     =========    =========
</TABLE>

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)

                    NINE MONTHS ENDED MARCH 31, 1999 AND 1998
<TABLE>
<CAPTION>
                                                                1999              1998
                                                             -----------       -----------
<S>                                                          <C>               <C>
NET INCOME                                                   $   643,631       $   659,850
                                                             -----------       -----------
Adjustments to reconcile net income to net cash
provided by operating activities:
   Depreciation and amortization:
        Operations                                               198,064           192,083
        Other                                                        546             1,639
   (Gain) on sale of investments                                      --            (4,042)
   (Gain) loss on disposition of property and equipment            3,640            (6,708)
   Allowance for doubtful accounts                               152,845           144,000
Change in assets and liabilities:
(Increase) decrease in:
   Receivables                                                   (80,127)          131,763
   Prepaid expenses                                               60,254            51,248
   Other                                                          70,532           (59,949)
Increase (decrease) in:
   Accounts payable                                               10,388            39,896
   Accrued expenses                                             (106,921)          221,790
   Franchisee and licensee remittance payable                     92,457            39,045
   Other                                                          20,907          (486,027)
                                                             -----------       -----------
Total adjustments                                                422,585           264,738
                                                             -----------       -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES                      1,066,216           924,588
                                                             -----------       -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Capital expenditures                                         (132,749)         (151,434)
   Investments purchased                                      (2,970,329)       (1,992,855)
   Proceeds on sale of fixed assets                               26,761            16,200
   Proceeds from sales of investments                          3,000,000         2,040,000
   License acquisition                                          (150,000)           (5,000)
   Payments on license acquisition                               (33,462)          (19,710)
   Advances to licensees and franchisees                      (3,180,151)       (3,092,505)
   Collections of advances to licensees and franchisees        3,253,774         2,868,177
                                                             -----------       -----------
   NET CASH (USED IN) INVESTING ACTIVITIES                      (186,156)         (337,127)
                                                             -----------       -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Cash dividends                                               (172,701)         (518,104)
                                                             -----------       -----------
   NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES          (172,701)         (518,104)
                                                             -----------       -----------
   EFFECT OF EXCHANGE RATE CHANGES ON CASH                            --               124
                                                             -----------       -----------

NET INCREASE (DECREASE) IN CASH                                  707,359            69,481
   Cash at beginning of the period                               929,364         1,012,233
                                                             -----------       -----------
   Cash at the end of the period                             $ 1,636,723       $ 1,081,714
                                                             ===========       ===========
Supplemental disclosures of Cash Flow information
Cash paid during the period
   Income taxes                                              $   313,215       $   506,413
   Interest                                                  $     1,538       $     2,833
</TABLE>

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 dilutive  effect on weighted  average shares  outstanding is due to stock
   options in the amounts of 43,435 and 165,153 for the nine months  ended March
   31, 1999 and 1998  respectively,  and 21,718 and 86,870 for the three  months
   ended March 31, 1999 and 1998, respectively.

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

(2)Financial   Accounting   Standards   Board   Statement  No.  130,   REPORTING
   COMPREHENSIVE INCOME

   Effective  September  30,  1998,  the Company  adopted  Financial  Accounting
   Standards Board (FASB)  Statement No. 130,  REPORTING  COMPREHENSIVE  INCOME.
   Statement  No.  130  established   standards  for  reporting  and  displaying
   comprehensive  income  and  its  components  in the  full  set  of  financial
   statements.  Accordingly, the Company's comprehensive income was $647,037 and
   $647,511 for the nine months ended March 31, 1999 and 1998, respectively, and
   $211,438  and  $187,068  for the three  months ended March 31, 1999 and 1998,
   respectively.

   ITEM 2 -  MANAGEMENT'S  DISCUSSION  AND ANALYSIS OF FINANCIAL  CONDITION  AND
   RESULTS OF OPERATIONS

   The  statements  contained  in this  Report on Form 10-Q that are not  purely
   historical are forward looking  statements  within the meaning of Section 27A
   of the Securities Act of 1933, as amended,  and Section 21E of the Securities
   Exchange  Act  of  1934,  as  amended,  including  statements  regarding  the
   Company's  "expectations",   "anticipation",   "intentions",   "beliefs",  or
   "strategies"   regarding  the  future.  Forward  looking  statements  include
   statements regarding revenue,  margins,  expenses, and earnings analysis with
   regard  to the  Company  or  with  regard  to  the  Company's  licensees  and
   franchisees for the remainder of fiscal 1999 and thereafter;  improvement of,
   and growth in the number of,  licensees and  franchisees;  future spending on
   marketing  and product  development  strategy;  the  transaction  with United
   Financial Company described below,  statements regarding Year 2000 readiness;
   and  liquidity  and   anticipated   availability   of  cash  for  operations,
   acquisitions,  or  payment  of  dividends.  All  forward  looking  statements
   included in this document are based on  information  available to the Company
   on the date of this report,  and the Company  assumes no obligation to update
   any  such  forward  looking  statement.  It is  important  to note  that  the
   Company's  actual results could differ  materially from those in such forward
   looking  statements.  Among the factors  that could cause  actual  results to
   differ  materially  are the  factors  discussed  in this report 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.

   On  April  29,  1999  at the  annual  shareholders'  meeting,  the  Company's
   shareholders  approved the sale of 5,258,531  newly issued shares of Series A
   Convertible  Voting  Preferred stock to United  Financial  Adjusting  Company
   ("UFAC"),   a  wholly  owned   subsidiary  of  The  Progressive   Corporation
   ("Progressive")  for a price of $1.30 per share.  As a result of this sale of
   stock,  UFAC's  purchase  will  represent  a minimum of 52% of the  Company's
   voting  securities.  Following  the  purchase  the Company will make a tender
   offer to purchase up to

                                        6
<PAGE>
   1,000,000 shares of common stock for a price of $2.90 per share. Shareholders
   not  tendering  their  shares will receive a cash  distribution  of $1.60 per
   share.  The tender offer  materials were sent to shareholders in May of 1999.
   UFAC will not  participate  in the tender  offer and will not be  eligible to
   receive the cash distribution.

   Subsequent  to the  approval  of the  transaction  by the  shareholders,  the
   Company appointed to its Board a majority of Directors  nominated by UFAC and
   appointed  Jeff Jordan of  Progressive  as an Executive Vice President of the
   Company.

   In  connection  with the sale of shares to UFAC,  the Company  entered into a
   service  agreement  with UFAC  whereby the Company  will pay UFAC $25,000 per
   month in  exchange  for certain  advisory  and  support  services  related to
   franchise operations,  strategic planning,  sales and marketing,  technology,
   human  resources  support,  and accounting and  reporting.  In addition,  the
   Company entered into agreements with William Rocke and Jean Ryberg  providing
   for their  retirement  from the Company on June 30,  1999.  Pursuant to these
   agreements,  the Company will pay a retirement  package to Mr. Rocke and Mrs.
   Ryberg valued approximately at $298,000 and $192,000, respectively.

   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, 1999, the
   Company's operations generated $1,066,216 in cash.

   Compared to the last fiscal year, the most  significant  items affecting cash
   provided  by the  Company's  operations  are  the  increases  of  $92,000  in
   franchisee and licensee payable and $80,000 in receivables, and a decrease of
   $107,000 in accrued  expenses.  The decrease in accrued expenses results from
   the payout of  employee  benefits  and  bonuses in the first  quarter of this
   fiscal year.

   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  $200,000  to  $300,000  in  fiscal  1999 for
   equipment and furnishings pursuant to its capital investment program.

   Without giving effect to the tender offer and cash  distribution  referred to
   above,  management  believes that the Company will be able to fund all of its
   cash requirements (i.e.  current  operations and capital asset  acquisitions)
   from currently  available cash funds  generated from  operations.  Management
   expects to finance the tender offer and cash  distribution  with the proceeds
   from the sale of stock to UFAC and from cash on hand.

   The Company's ratio of current assets to current liabilities was 3.74 to 1 as
   of March 31, 1999 and 3.39 to 1 as of June 30, 1998.

   RESULTS OF  OPERATIONS  - NINE MONTHS  ENDED MARCH 31, 1999  COMPARED TO NINE
   MONTHS ENDED MARCH 31, 1998

   Revenue

   The Company's  revenue increased 9% or $395,000 to $4,730,000 during the nine
   months ended March 31, 1999 from  $4,335,000  in the same period of the prior
   fiscal  year.  This  increase  represents  a combined  $160,000  increase  in
   adjusting  and risk  management  fees and a $235,000  increase in  continuing
   licensee and franchisee fees.

   The increase of $160,000 in adjusting and risk  management fees from $899,000
   in the nine months  ended March 31,  1998 to  $1,059,000  for the nine months
   ended March 31, 1999 represents an 18% increase.  The Company  experienced an
   increase of $212,000 in adjusting fees in its Phoenix  office,  and decreases
   of $35,000 and $19,000 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 client acquired in November of 1997.

                                       7
<PAGE>
   The Company's revenue from continuing  licensee and franchisee fees increased
   6.8% or $235,000  from  $3,436,000 in the nine months ended March 31, 1998 to
   $3,671,000 in the nine months ended March 31, 1999. The 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 the prior fiscal year,  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 this 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.  Through these efforts and the addition of UFAC's
   marketing resources, the Company anticipates that over time the lost business
   will be replaced and hopes to see continued growth in licensee and franchisee
   fees paid from other sources.

   Compensation and Fringe Benefits

   Compensation and fringe benefits represent approximately 56% of the Company's
   costs and  expenses  and are the  Company's  largest  single item of expense.
   These expenses  increased 3.6% or $73,000 from  $2,036,000 in the nine months
   ended March 31, 1998 to  $2,109,000  in the current nine month  period.  This
   increase is the result of additional  permanent and temporary employees hired
   to handle increased work loads in the Corporate and Phoenix office as well as
   cost of living and merit increases given to employees.  Furthermore,  certain
   adjusters in the Phoenix office are compensated by commission  based on their
   adjusting services. As the adjusting fees in the Phoenix office increase, the
   wages paid to these adjusters also increase.

   Expenses Other Than Compensation and Fringe Benefits

   The Company's  expenses other than compensation and fringe benefits increased
   $295,000  during the nine months ended March 31, 1999 as compared to the same
   period of the prior fiscal year. The principal items affecting these expenses
   are a  $122,000  increase  in legal  fees,  a $94,000  increase  in audit and
   accounting fees, a $28,000 increase in insurance costs, a $17,000 increase in
   office expenses, and a $33,000 decrease in advertising and promotion.

   The increase in legal fees  reflect the  Company's  increased  need for legal
   services in connection with the transaction  with UFAC. The increase in audit
   and  accounting  fees reflect the  Company's  decision to  outsource  certain
   income tax and financial reporting  functions that were previously  performed
   in-house.  The  Company  believes  this will  enable  it to more  efficiently
   monitor  compliance  of the  constantly  changing  state and federal laws and
   regulations. Furthermore, the Company has incurred additional accounting fees
   in connection with the transaction  with UFAC. The increased  insurance costs
   reflect an increase in the cost of  insurance  as well as expanded  coverage.
   The balance of the Company's  costs have not changed  significantly  from the
   same period of the prior year.

   Income Taxes

   The  Company's  income  taxes for the nine  months  ended March 31, 1999 were
   39.7% of its income before taxes, or  approximately  the same as they were in
   the same period of 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, this could change at any
   time.

   Other Income

   The Company's other income decreased $47,000 or 32% from $146,000 in the nine
   months ended March 31, 1998 to $99,000 in the current nine month period.  The
   most  significant  items  affecting  other  income are  decreases in dividend
   income of $22,000 and interest  income of $15,000 and a loss of $4,000 on the
   disposal of fixed  assets  compared to a gain on the disposal of fixed assets
   of $7,000 in the same period of the prior year.

                                       8
<PAGE>
   Net Income

   The Company's  net income for the nine months ended March 31, 1999  decreased
   $16,000 or 2.4% from $660,000  in the nine  months  ended  March 31,  1998 to
   $644,000 in the current  period.  The most  significant  items  affecting net
   income  were  a  $395,000   increase  in  revenue,   a  $73,000  increase  in
   compensation  and  benefits,  a  $295,000  increase  in  expenses  other than
   compensation and benefits, and a $47,000 decrease in other income.

   Comprehensive Income

   Effective  September  30,  1998,  the Company  adopted  Financial  Accounting
   Standards Board (FASB)  Statement No. 130,  REPORTING  COMPREHENSIVE  INCOME.
   Statement  No.  130  establishes   standards  for  reporting  and  displaying
   comprehensive  income  and  its  components  in the  full  set  of  financial
   statements.  Accordingly,  the  Company's  comprehensive  income for the nine
   months ended March 31, 1999 and 1998 was $647,037 and $647,511, respectively.

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

   Revenue

   The Company's  revenue  increased 9.2% or $132,000 to $1,572,000 in the three
   months ended March 31, 1999 from  $1,440,000  in the same period of the prior
   fiscal  year.  This  increase  represents  a  combined  $14,000  increase  in
   adjusting  and risk  management  fees and a $118,000  increase in  continuing
   licensee and franchisee fees.

   The increase of $14,000 in adjusting  and other fees of Company owned offices
   from  $346,000  in the three  months  ended March 31, 1998 to $360,000 in the
   three  months  ended  March  31,  1999  represents  a 4%  increase.  The  Las
   Vegas/Henderson  office  experienced an increase of $14,000 while the Phoenix
   and Tucson offices remained unchanged from the same period of the prior year.

   The Company's revenue from continuing  licensee and franchisee fees increased
   10.8% or $118,000 from $1,094,000 in the three months ended March 31, 1998 to
   $1,212,000 in the three months ended March 31, 1999.  This increase  reflects
   the benefit to the Company's  licensees and  franchisees  from an increase in
   claims assignments from insurance companies and self insureds.

   The  Company's  revenue is affected by numerous  matters  including  the work
   loads of other companies and claims presented by their clients.  The Company,
   therefore,  is  unable  to  project  its  future  revenue.  The  Company  has
   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 a business relationship with its then major
   client.  The Company has  responded to this 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.  Through these efforts and the addition to UFAC's
   marketing resources, the Company anticipates that over time the lost business
   will be replaced and hopes to see continued growth in licensee and franchisee
   fees paid from other sources.

   Compensation and Fringe Benefits

   Compensation and fringe benefits represent approximately 55% of the Company's
   costs and expenses and are the Company's  single largest expense item.  These
   expenses  decreased  3% or $21,000  from  $712,000 in the three  months ended
   March 31, 1998 to $691,000 in the three  months  ended March 31,  1999.  This
   decrease resulted primarily from the departure without replacement of certain
   salaried personnel.

   Expenses Other Than Compensation and Fringe Benefits

   The Company's  expenses other than compensation and fringe benefits increased
   $74,000  during the three months ended March 31, 1999 as compared to the same
   quarter  of the prior  fiscal  year.  The  principal  items  affecting  these
   expenses are increases of $36,000 in legal fees,  $25,000 in  accounting  and
   audit fees, and $20,000 in

                                        9
<PAGE>
   miscellaneous expenses and a decrease of $17,000 in advertising and promotion
   expenses.

   The increase in legal fees  reflects the Company's  increased  need for legal
   services in connection with the transaction  with UFAC. The increase in audit
   and  accounting  fees  reflects the Company's  decision to outsource  certain
   income tax and financial reporting  functions that were previously  performed
   in-house.  The  Company  believes  this will  enable  it to more  efficiently
   monitor  compliance  of  constantly  changing  state  and  federal  laws  and
   regulation.  Furthermore, the Company has incurred additional accounting fees
   in connection with the transaction  with UFAC. The increase in  miscellaneous
   expenses  resulted  from  the  printing  of  proxy  materials  mailed  to the
   shareholders  in March  1999.  Similar  expenses  were  incurred in the first
   quarter of fiscal 1998.

   Income Taxes

   The  Company's  income taxes for the three months ended March 31, 1999,  were
   40.2% of its income before taxes, or  approximately  the same as they were in
   the same period of the prior  fiscal  year.  Changes  made in the tax laws by
   various states and by federal  government  did not have a material  effect on
   the Company's overall tax rates; however, this could change at any time.

   Other Income

   The  Company's  other  income  decreased  $6,000 or 14.6% from $41,000 in the
   three  months ended March 31, 1998 to $35,000 in the three months ended March
   31, 1999.  The most  significant  items  affecting  other income was a $2,000
   decrease in interest  income and a gain from the sale of fixed  assets in the
   same period of the prior year.

   Net Income

   The Company's net income for the three months ended March 31, 1999  increased
   24.5% or $41,000  from  $167,000 in the three  months ended March 31, 1998 to
   $208,000 in the current  quarter.  The most  significant  items affecting net
   income  were the  $132,000  increase  in  revenue,  the  $21,000  decrease in
   compensation and fringe benefits,  and the $74,000 increase in expenses other
   than compensation and fringe benefits.

   Comprehensive Income

   Effective  September  30,  1998,  the Company  adopted  Financial  Accounting
   Standards Boards (FASB) Statement No. 130,  REPORTING  COMPREHENSIVE  INCOME.
   Statement  No.  130  establishes   standards  for  reporting  and  displaying
   comprehensive  income  and  its  components  in the  full  set  of  financial
   statements.  Accordingly,  the Company's  comprehensive  income for the three
   months ended March 31, 1999 and 1998 was $211,438 and $187,068, respectively.

   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 has 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
   September  30,  1999.  The  Company  has also  tested  its  computer  servers
   internally.  An external party has tested these systems and 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 September 30, 1999.

   All of the Company's  personal  computers that need to be Year 2000 compliant
   have been  updated.  The  Company's  phone system has also been updated to be
   Year 2000 compliant.  The Company has determined that its 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

                                       10
<PAGE>
   resolution by September 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 the 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 final Year
   2000  compliant  version of its software by September  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 have sent Year 2000 readiness surveys
   to the  Company's  customers  and  vendors  to  determine  the status of such
   customers' and vendors'  computer systems for Year 2000  compliance.  None of
   the responses  received thus far have  indicated any major  problems.  As the
   Company identifies potential problems,  it will determine the steps necessary
   to  minimize  disruptions  due to  failures  in Year 2000  compliance  by its
   customers and/or vendors.

   The  Company   expects  that  the  cost  of  analysis  and   development  and
   implementation  of plans to address  its Year 2000  issues  will not exceed a
   total of $250,000.  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  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  reasonable  likely  worst  case  Year  2000  scenario,  the  Company
   anticipates  that the  software  which it uses,  despite  the  completion  of
   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  plans to purchase a back-up  power
   generator  in July 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 September 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,  exchange rates,  commodity  prices,  equity prices,  and other market
   changes.  Market  risk is inherent  in all market  risk  sensitive  financial
   instruments.

   The Company invests in $1,000,000 U.S. treasury bills. At March 31, 1999, the
   Company was  invested in a 64- day  Treasury  bill that  matured on April 22,
   1999. Due to the short time to maturity,  the interest income risk and market
   value risk are  insignificant  and have no material  effect on the  financial
   statements.

   The  Company  invests in  various  mutual  funds that it holds as  short-term
   available  for sale  investments.  Strategies  of the funds  include  growth,
   income, and capital  appreciation,  and the funds invest primarily in foreign
   and domestic equity securities.  The market risk associated with these mutual
   funds is the potential  loss in fair value  resulting  from a decrease in the
   market price of the stocks.  Based on the value of the Company's  investments
   at March 31,  1999,  a 10%  decrease  in the fair value of these  investments
   would not materially affect the value of these investments.

   The Company has a book value of $668,000  invested in municipal bonds that it
   carries as long term held to

                                       11
<PAGE>
   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 has only the
   effect of disclosure in the financial statements.

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

   PART II: OTHER INFORMATION

   ITEM 1 - LEGAL PROCEEDINGS

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

   ITEM 2 - Not Applicable

   ITEM 3 - Not Applicable

   ITEM 4 - SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

   On April 29, 1999, the Company held its 1998 annual shareholders' meeting.

   The  shareholders   approved  the  sale  of  5,258,531  shares  of  Series  A
   Convertible  Voting  Preferred  stock  to UFAC  with  3,763,414  votes  cast,
   3,594,590  approving the transaction,  162,254 against the  transaction,  and
   6,570 votes abstaining.

   The Company's  Board of Directors were reelected with 4,427,884  shares being
   cast and 138,008  abstaining.  The Directors elected and the numbers of votes
   each received as follows:

                      George Hill                    4,216,028
                      Francis J. LaPallo             4,221,044
                      Louis T. Mastos                4,250,048
                      William J. Rocke               4,245,889
                      James S. Rocke                 4,212,206
                      Jean E. Ryberg                 4,244,351
                      Merlin J. Schumann             4,252,823
                      William W. Strawther, Jr.      4,218,131
                      R. Scott Younker               4,218,356

   The Company's  shareholders  ratified the  appointment of McGladrey & Pullen,
   LLP,  Certified  Public  Accountants,  as the auditors of the Company for the
   Company's fiscal year ending June 30, 1999, with 4,342,818 affirmative votes,
   24,750 against, and 314 abstaining.

   ITEM 5 - Not Applicable

   ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

   (b) The Company filed a Form 8-K on May 4, 1999 to report a change in control
   of the Company as a result of the sale of shares to UFAC and the  appointment
   of eight persons nominated by UFAC to the Company's Board of Directors.

                                       12
<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: 5/14/99                        /s/ William J. Rocke
-----------------------              ---------------------------------------
                                     William J. Rocke, Chief Executive
                                     Officer/Chairman of the Board, Director
                                     and Acting Chief Accounting Officer


Date: 5/14/99                        /s/ Jean E. Ryberg
-----------------------              ---------------------------------------
                                     Jean E. Ryberg, President, Director

                                       13