• 2019 sales up 300% over comparable period last year:
  • $1,926,405, compared to $481,521 in 2018
• U.S. 2019 revenue jumped 347% to $1,860,563 from $416,331 in same period last year
  • (Higher share of existing customer sales, more product available, intellectual property secured)
• Company now owns sole U.S. rights for a minimum of 10 years to the Worksport name for light truck tonneau covers; also secured three U.S. patents in 2019 and applied for others internationally
• Non-competing private label sales increased 619% to $1,912,401 from $265,969 in same period last year
• Online sales increased to $174,793 in 2019 from $151,285, a 16% increase, year over year, now accounting for 8% of revenue, when compared with 32% for the year ended Dec. 31, 2018.
• Net loss decreased 76% to $414,607, compared with $1,763,038 in the same period last year, due to decreases in operating expenses and non-recurring items, including gain on debt settlement – and paving the way for future earnings. Gross profit increased to $292,840 in the year ended Dec. 31, 2019, when compared with $96,614 in the same period last year, an increase of $196,226 or 203%.

Toronto, Ontario, May 15, 2020 (GLOBE NEWSWIRE) -- Steven Rossi, CEO Franchise Holdings International Inc. (OTC:FNHI), and its Worksport subsidiary ("the Company"), announced that for the year ended December 31, 2019, revenue from the entire line of Worksport tonneau covers for the light truck market jumped a record 300% to $1,926,405, as compared to $481,521 for the same period last year. In addition, U.S. 2019 revenue increased a record 347% to $1,860,563 from $416,331 in same period last year, due to higher share of existing customer sales, more Worksport product available, and exclusive 10-year rights to Worksport name and logo granted by U.S. Patent Office (USPO).

"To say the least, we are very pleased by achieving these record revenues for the 12-month period. A 300% increase is really impressive," said Rossi. "It clearly demonstrates that we have successfully executed on and greatly exceeded our highly ambitious strategic plan to accomplish record growth and profitability for the company. With issues like the gain on debt settlement behind us, we are zeroing in on profitability, with lien operations. With anticipated forthcoming funding, we believe the results would be even stronger, with faster development of the exciting new high tech tonneau cover products in the pipeline and increased inventory and distribution. It's just the beginning, as we build towards becoming a cornerstone middle-market U.S brand."

Rossi cited Worksport's surge in private label sales as a major growth engine for the company. "Private label sales of non-competing customized product proved to be a runaway success, accounting for the upward trajectory and the majority of our sales. Meanwhile, we are focused on ramping up the Worksport brand, after finally securing complete U.S. patent office protection of our name and logo, after a long and hard effort," Rossi said. "The ratio of Worksport branded product to private label tonneau covers is expected to even out in the future, with both driving the company's growth in the U.S., our primary market."

Sales from online Worksport retailers increased to $174,793 in 2019 from $151,285, a 16% increase, year over year, and now accounting for 8% of revenue, when compared with 32% for the year ended Dec. 31, 2018. These revenues occurred before the coming of the global COVID-19 Pandemic. "Worksport's foresight in developing an online sales channel positions the Company to thrive in the ‘social distancing' environment," Rossi added.

In addition to the flood of private label sales, Rossi cited a number of important factors that resulted in Worksport's dramatic record growth. "First of all, securing Worksport's intellectual property has significantly transformed the Company. Winning three USPO patents in one year and being granted final exclusive rights to our trademark has enabled the 347% leap in U.S. revenues as we can freely operate and develop our U.S market. Secondly, we now operate through three sales channels: online, largely through Amazon.com, Worksport-branded product sold via distributors, and non-competitive private label products that are exclusive to several important national retailers and distributors.

"Our hearts go out to COVID-19 victims all around the globe. We urge everyone to stay safe," Rossi said. "Although the virus is having devastating global effects, Worksport's factories in China, after a very brief pause, are again back in operation as of the week of March 16, 2020, subsequent to the year end. Rossi said that the Company's supply chain is fully intact and working on new and future products for the booming light truck market.

The Company's net loss dropped 76% to $414,607, compared with $1,763,038 in the same period last year, due to decreases in operating expenses from $1,307,741 for 2018 to $831,973 for 2019, a decrease of $475,768 or 36%. Also factored into the net loss were non-recurring items, including gain on debt settlement as well as a 38% decrease in professional services including accounting, legal, consulting, listing and filing fees, which decreased to $531,694 for the year ended December 31, 2019 from $864,160 in the comparable period last year. Gross profit increased to $292,840 in the year ended Dec. 31, 2019, when compared with $96,614 in the same period last year, an increase of $196,226 or 203%.

Keeping pace with Worksport's year of large-scale growth in revenues, cost of sales increased by 339% from $384,908 for the year ended December 31, 2018 to $1,687,857 for the year ended December 31, 2019. Worksport's cost of sales, as a percentage of sales, was approximately 88% and 80% for the years ended December 31, 2019 and 2018, respectively. The decrease in percentage of sales resulted in a gross margin decrease from 20% for the year ended December 31, 2018 to 12% for the year ended December 31, 2019. This decrease in gross margin is related to the fluctuation in foreign exchange rates used to translate Canadian dollar sales into U.S. dollars for purposes of financial reporting as well as the increased cost for cost of goods sold and cost associated with warehousing inventory, to fulfil just in time sales, in the U.S. market.

"Everything is coming together rapidly for Worksport, and it's happening much faster than anyone expected," Rossi concluded. "We have the products, secure intellectual property and the incredible global team to make a great leap forward in the U.S., our principal market, and also in Canada, our home. In the year ahead, we hope to achieve profitability and greater penetration of the U.S. market, while focussing on improving our revenues sustainably with a keen focus on profitability and building the Worksport brand. The Pandemic will affect us, as it will be a tough year for everyone, but we are confident that as we continue to open up again, Worksport will be there providing much-needed, technologically advanced products for its branded, online and private label markets."

Worksport Ltd., a fully owned subsidiary of Franchise Holdings International. Inc. is an innovative manufacturer of high quality, functional, and aggressively priced tonneau/truck bed covers for light trucks like the F150, Sierra, Silverado, Canyon, RAM, and Ford F-Series. For more information please visit www.worksport.com

Listed on the OTCQB Market under the trading symbol "FNHI" and currently in the process of a dual listing on a Canadian Stock Exchange, Franchise Holdings International's strategy is to acquire business in the fastest growing business segments and to create shareholder value in the process. Once a business of interest is acquired, our mission is to further develop and accelerate the growth for all of our acquired subsidiaries. Currently the Corporation has one fully owned subsidiary, Worksport Ltd.