Franchise Services of North America Inc.
TSX VENTURE : FSN

Franchise Services of North America Inc.

March 01, 2010 16:35 ET

Franchise Services of North America Inc. Announces First Quarter Results for the Period Ending December 31, 2009, New Canadian Franchise, and Letter of Intent for Canadian Airport Franchises

CALGARY, ALBERTA--(Marketwire - March 1, 2010) - FRANCHISE SERVICES OF NORTH AMERICA INC. (TSX VENTURE:FSN) ("FSNA" or the "Company") announced today its first quarter results for the period ended December 31, 2009. Revenue and the net loss for the three months ended December 31, 2009 were $3.8 million and $643,643 respectively, as compared to revenue of $3.4 million and net income of $8,673 for the three months ended December 31, 2008. 

The Company also announced the receipt of a Letter of Intent for the Edmonton and Calgary, Alberta airport franchises under the U-Save brand, representing the first Canadian airports to have U-Save franchisees. The sale has not been completed, therefore, the financial results are not reflected in these reported results.

The Company also announced the sale of the Banff/Lake Louise, Alberta franchise under the PractiCar brand, further expanding the system in western Canada. The sale was completed during the second fiscal calendar quarter, therefore, the financials results are not reflected in these reported results.

Bob Barton, the Company's President and Chief Operating Officer, stated, "We are very excited about receiving the Letter of Intent for the sale of the Calgary and Edmonton airport franchises, and the continued growth the Company is experiencing in expanding the system. We are also very pleased to announce the sale of the Banff/Lake Louise, Alberta franchise for the Practicar system. This is a significant tourist destination and bodes well for the expansion of the system. The results for the quarter were disappointing, but are a result of increased reserves established by our insurance carriers for potential claims. These reserves could change pending the ultimate settlement and adjustment of the claims. While this increase in reserves contributed to our first quarter loss, the Company's negative cash flow from operations decreased from $733,876 in the first quarter of 2008 to $92,465 in the first quarter of 2009. During the quarter, the Company reported the financial results of the previously announced sale of the LaGuardia airport and McCarran (Las Vegas) airport locations, which are both tentatively scheduled to open in March 2010. Franchise Sales has shown positive improvements over the last four months in this difficult economic environment."

About FSNA

FSNA is a publicly traded company listed on the TSX Venture Exchange. The Company and its subsidiaries own the following brands: U-Save Car & Truck Rental, U-Save Car Sales, Rent-A-Wreck of Canada, PractiCar, Auto Rental Resource Center ("ARRC"), Xpress Rent A Car and Peakstone Financial Services. 

U-Save, together with its subsidiary ARRC, has over 1,100 locations throughout the United States and is one of North America's largest franchise car rental companies. Having primarily serviced the local market for the past 25 years, the Company is expanding into the airport market with plans for the opening of airport locations in the top 30 markets in the United States and the major airports in Canada. U-Save currently services 30 airport markets in 12 different states and 7 countries. U-Save Car Sales is an expansion of the U-Save brand into the car sales market, and provides goods and services to car sales operators looking to affiliate with a national brand. 

Practicar Systems Inc. (a wholly owned subsidiary of FSNA) owns the rights to the Rent-A-Wreck® trademark for all of Canada. The Rent-A-Wreck® system operates a network of 57 franchises from coast-to-coast in Canada, providing a range of vehicle rental, leasing and sales options to its customers. The Rent-A-Wreck® system has been in continuous operation in Canada since 1976.

Forward-Looking Information

Certain statements made in this news release are forward looking in nature. The words "may," "could," "should," "would," "expect," "intend," "estimate," "anticipate," "believe," or "outlook" and similar expressions often identify forward-looking information. By their nature, forward-looking statements require FSNA to make assumptions and are subject to inherent risks and uncertainties. There is significant risk that predictions, forecasts, conclusions and projections will not prove to be accurate, that FSNA's assumptions may not be correct and that actual results may differ materially from such predictions, forecasts, conclusions or projections. FSNA's forward-looking statements are qualified in their entirety by these cautionary statements. In addition, the forward-looking statements are made only as of the date of this news release, and except as required by applicable law, FSNA undertakes no obligation to publicly update these forward-looking statements to reflect new information, subsequent events or otherwise.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined In the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Franchise Services of North America Inc.
    Robert M. Barton
    (601) 713-4333 x 116
    bob.barton@usave.com