TSX-V Trading Symbol: FSN
CALGARY, Aug. 28 /CNW/ - Franchise Services of North America Inc. ("FSNA"
or the "Company") announced today its third quarter results for the period
ended June 30, 2009. Revenue and the net loss for the three months ended June
30, 2009 were $3.7 million and $(110,384), respectively, as compared to
revenue of $3.7 million and a net loss of $(15,576) for the third quarter
ended June 30, 2008.
The Company also announced the sale of the Wallaceburg, Ontario franchise
under the Rent-A-Wreck brand. The sale of this new franchise was completed
during the Company's fourth quarter and the financial impact of this new
location is not reflected in the results for the period ending June 30, 2009.
Bob Barton, the Company's Chief Operating Officer, stated, "The third
quarter was a challenging operating period for us. We continue to obtain new
prospects and are negotiating with qualified candidates for the purchase of
franchises; however, the credit markets have restricted these candidates from
obtaining fleet financing and thus the ability to execute Franchise
During the quarter, the Company also experienced an unusually high level
of claims for vehicles insured under the Company's insurance programs.
Additionally, our reserves for outstanding claims under the Company's
insurance programs increased by $91,000 in the quarter, as compared to a
reduction in the reserves of $232,000 for the comparative period ending June
30, 2008. A number of factors, including weather-related/seasonality factors,
can affect claims experience. The results of any one period, positive or
negative, are not necessarily representative of the experience the Company may
have in subsequent periods.
We are also quite pleased to announce the sale of the Wallaceburg
franchise. This represents the fifth franchise sold this year by our Canadian
division which is showing strong growth in the marketplace."
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, 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 leisure markets in the United
States and the major airports in Canada. U-Save currently services 31 airport
markets in 16 different states. 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(R) trademark for all of Canada. The Rent-A-Wreck(R)
system operates a network of 56 franchises from coast-to-coast in Canada,
providing a range of vehicle rental, leasing and sales options to its
customers. The Rent-A-Wreck(R) system has been in continuous operation in
Canada since 1976.
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.
For further information:
For further information: on FSNA or any of its operating subsidiaries
please contact: Robert M. Barton, President, Chief Operating Officer, (601)
713-4333 x 116, email@example.com