From the Wires
Franchise Services of North America Inc. Announces Financial Results for the Fiscal Year Ended September 30, 2012
By: Marketwired .
Jan. 28, 2013 06:45 PM
CALGARY, ALBERTA -- (Marketwire) -- 01/28/13 --
FRANCHISE SERVICES OF NORTH AMERICA INC. (TSX VENTURE:FSN) ("FSNA" or the "Company") announced today its financial results for the fiscal year ended September 30, 2012. Revenue and the net loss for the year ended September 30, 2012 were US$10,606,197 and US$2,089,966 respectively, as compared to revenue of US$11,004,652 and a net loss of US$306,152 for the year ended September 30, 2011. Net loss includes non-recurring expenses related to the proposed acquisition of the Advantage® Rent-A-Car brand ("Advantage") of US$2,050,490 for the year ended September 30, 2012 and US$214,768 for the year ended September 30, 2011.
FSNA's previously announced acquisition of the Advantage brand will proceed by way of merger (the "Merger") between a wholly-owned subsidiary of FSNA and Adreca Holdings Corp. ("Adreca"), a subsidiary of Macquarie Capital. The Merger is expected to close in the first calendar quarter of 2013. FSNA also began operating Advantage pursuant to a Management Services Agreement ("MSA") on behalf of Adreca on December 12, 2012. The Merger and the MSA are more fully described in the appendix to the Company's press release dated August 28, 2012 and the Company's press release of December 12, 2012.
Tom McDonnell, the Company's Chairman and Chief Executive Officer, stated, "During our fiscal fourth quarter, we completed a substantial amount of the work and negotiations related to the Advantage transaction, resulting in Adreca acquiring the assets of Advantage on December 12, 2012. We also began operating Advantage pursuant to the MSA on behalf of Adreca."
"During fiscal year 2012, FSNA incurred over US$2,000,000 of transaction fees directly related to the acquisition of Advantage by Adreca. We are now focused on completing the Merger with Adreca as quickly as possible and look forward to integrating the Advantage operations. In the interim, FSNA will earn fees under the MSA with Adreca."
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 30 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 31 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® and the PractiCar® trademarks 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.
Completion of the Merger is subject to a number of conditions, including TSX Venture Exchange acceptance and approval by the Company's shareholders. The Merger cannot close until all required approvals are obtained. There can be no assurance that the transaction will be completed as proposed, or at all.
Investors are cautioned that, except as disclosed in the circular of FSNA to be prepared in connection with the Merger, any information released or received with respect to the Merger may not be accurate or complete and should not be relied upon. Trading in the securities of FSNA should be considered highly speculative.
The TSX Venture Exchange has in no way passed upon the merits of the transaction and has neither approved nor disapproved the contents of this press release.
Certain statements made in this news release are forward looking in nature, including statements made with respect to the Merger. 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. The forward-looking statements contained in this news release are based on certain key expectations and assumptions made by FSNA, including the satisfaction of conditions to the completion of the Merger. Although FSNA believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because FSNA can give no assurance that they will prove to be correct. There can be no assurance that the Merger will be completed as proposed or at all. 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.
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