Warrantech Corporation, a marketer and administrator of service contracts and aftermarket warranties, has reported profits for the eleventh consecutive quarter. Net income reached $1,021,852 or $0.07 per diluted share for the company’s third quarter for fiscal 2003, which ended Dec. 31, 2002, up 108 percent above net income of $491,204 or $0.03 per diluted share in the same period a year ago.

For the nine-month period, net income was $2,619,779 or $0.17 per diluted share, up 124 percent compared to net income of $1,170,674 or $0.08 per diluted share for the same period a year ago. The increase in earnings for the third quarter and the nine-months of fiscal 2003 which ended Dec. 31, 2002 was due to an increase in gross revenues in the company’s various business segments, in addition to maintaining a streamlined and efficient operating infrastructure.

“Warrantech continues to log profits quarter after quarter. Today, we report our eleventh consecutive quarter of positive earnings, ” said Joel San Antonio, Warrantech chairman and chief executive officer. “During the third quarter, Warrantech signed agreements with several companies. The largest was an agreement to administer an exchange program for VTech Communications Inc., one of the world’s leading consumer-focused technology companies, based in Hong Kong. While building our business and signing contracts is key to our growth, another highlight of the third quarter was our move into the company’s new state-of-the-art world headquarters in Bedford, Texas. Today, all of Warrantech’s operations are located under one roof. The cost savings and operating efficiencies gained by moving into one location gives Warrantech an important competitive advantage. Warrantech’s future looks bright, and we have the people, the programs and the means to deliver the profits our dealers and shareholders have come to expect,” San Antonio said.

Gross Revenues

All major business segments reported increases in gross revenues during the third quarter and nine months of fiscal 2003 compared to the same periods last year. Gross Revenues for the third quarter ended Dec. 31, 2002, were $37,386,939, an increase of 27 percent, compared to $29,516,536 for the same period last year. For the nine-month period ended Dec. 31, 2002, gross revenues were $109,745,414 at Dec. 31, 2002, up 31 percent compared to $84,054,968 in the corresponding nine-month period the previous year.

The Automotive segment reported gross revenues of $25,080,875 during the third quarter ended Dec. 31, 2002 from $18,341,622 in the prior year. For the nine months ended Dec. 31, 2002, the Automotive segment had gross revenues of $77,659,112 compared to $53,467,013 in the same period the prior year. The International segment had gross revenues of $1,592,983 for the third quarter 2003 compared to $971,436 in the same period the prior year; an increase of 64%. For the nine months ended Dec. 31, 2002, International had gross revenues of $4,106,799 compared to $3,489,858 in the corresponding period a year ago. Consumer Products reported gross revenues of $10,785,133, during the third quarter 2003 compared to $10,327,044 in the corresponding 2002 period. For the nine-month period ended Dec. 31, 2002, Consumer Products reported gross revenues of $28,217,706 compared to $27,501,761 in the corresponding period in the previous year.

Income from Operations

Income from operations for the third quarter 2003 was $1,099,011, up 163 percent compared to $418,177 in the previous year. For the nine months ended Dec. 31, 2002, income from operations was $2,921,826, up 146 percent compared to $1,186,251 in the prior year period. The increase in income from operations for the third quarter and the nine-month period fiscal 2003 was primarily the result of increased gross revenues in the company’s business segments and a reduction in annual depreciation and amortization expense.

About Warrantech

Warrantech Corporation administers and markets service contracts and after-market warranties on automobiles, automotive components, recreational vehicles, appliances, consumer electronics, homes, computer and computer peripherals for retailers, distributors and manufacturers. The company continues to expand its domestic and global penetration, and now provides its services in the United States, Canada, Puerto Rico and Latin America. For additional information on Warrantech, access www.warrantech.com.