TSX-V Trading Symbol: FSN
CALGARY, Aug. 28 /PRNewswire-FirstCall/ - 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 Agreements.
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.
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that term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
SOURCE Franchise Services of North America Inc.