Franchise Services of North America (FSNA) announced Jan. 28 its financial results for its fiscal year, which ended Sept. 30, 2012.
Revenue and the net loss for the 2012 fiscal year were $10,606,197 and $2,089,966 respectively, as compared to revenue of $11,004,652 and a net loss of $306,152 for the year that ended Sept. 30, 2011. Net loss includes non-recurring expenses related to the proposed acquisition of the Advantage Rent-A-Car brand of $2,050,490 for the 2012 fiscal year and $214,768 for 2011 fiscal year.
FSNA’s previously announced acquisition of the Advantage brand will proceed by way of merger between a wholly-owned subsidiary of FSNA and Adreca Holdings Corp., 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 Dec. 12, 2012.
Tom McDonnell, FSNA’s chairman and CEO, 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 Dec. 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."
Completion of the merger is subject to a number of conditions, including TSX Venture Exchange acceptance and approval by the company’s shareholders. FSNA cautions that 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.
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.
About the Company
U-Save, together with its subsidiary ARRC, has more than 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 vehicle rental, leasing and sales options to its customers. The Rent-A-Wreck system has been in continuous operation in Canada since 1976.
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