- Revenue was $1,627.9 million as
compared to $1,657.4 million in the
prior year, a decrease of $(29.6)
million
- Net income for the period was $7.1
million as compared to $22.8
million in the prior year, a decrease of $(15.7) million
- Diluted earnings per share was $0.25 as compared to $0.81 in the prior year
- Adjusted EBITDA1 was $53.2
million as compared to $66.7
million in the prior year, a decrease of $(13.5) million
EDMONTON, AB, Nov. 13,
2024 /CNW/ - AutoCanada Inc. ("AutoCanada" or the
"Company") (TSX: ACQ), a multi-location North American automobile
dealership group, today reported its financial results for the
three-month period ended September 30, 2024.
Paul Antony, Executive Chairman,
stated, "In the third quarter of 2024, our Canadian operations
continued to experience softening market conditions, with
affordability pressures influencing consumer behavior and weighing
on both gross profit per unit and demand for finance and insurance
products. Meanwhile, our U.S. operations continued to face
challenges."
"In response to these market dynamics, we have advanced our
strategic realignment. This quarter, we completed the sale of two
Canadian Stellantis dealerships, streamlined our RightRide
operations by closing seven underperforming locations, and
refocused remaining stores on tailored credit solutions for
credit-challenged customers. In September, we also heightened
restrictions on discretionary spending, paused acquisitions, and
suspended share buybacks to prioritize core operations and
efficient capital allocation."
"These actions support our goals to enhance profitability,
reduce leverage, and build a foundation for sustainable growth.
Following the third quarter, we launched our transformation plan
alongside Bain & Company with four pilot dealerships in
Western Canada. While it is early
in the transformation process, we expect to achieve $100 million in annualized run-rate operational
expense savings by the end of 2025."
Paul Antony concluded, "I want to
extend my sincere gratitude to our dedicated employees and OEM
partners for their resilience and continued support. Together, we
are building a stronger foundation for AutoCanada's future."
Third Quarter Key Highlights and Recent Developments
|
Three-Months Ended
September 30
|
|
CONSOLIDATED
FINANCIAL RESULTS
|
2024
|
2023
|
%
Change
|
|
Revenue
|
1,627,862
|
1,657,421
|
(1.8) %
|
|
Same store
revenue 2
|
1,553,875
|
1,606,346
|
(3.3) %
|
|
Gross
profit
|
264,992
|
290,225
|
(8.7) %
|
|
Gross profit
percentage 2
|
16.3 %
|
17.5 %
|
(1.2) ppts
|
|
Operating
expenses
|
216,148
|
223,830
|
(3.4) %
|
|
Net income
|
7,053
|
22,799
|
(69.1) %
|
|
Basic net income per
share attributable to AutoCanada shareholders
|
0.26
|
0.84
|
(69.0) %
|
|
Diluted net income per
share attributable to AutoCanada shareholders
|
0.25
|
0.81
|
(69.1) %
|
|
Adjusted EBITDA
1
|
53,239
|
66,719
|
(20.2) %
|
|
Adjusted EBITDA
Margin 1
|
3.3 %
|
4.0 %
|
(0.7) ppts
|
|
New retail
vehicles2 sold (units)
|
11,208
|
10,555
|
6.2 %
|
|
Used retail
vehicles2 sold (units)
|
15,591
|
16,878
|
(7.6) %
|
|
New vehicle
gross profit per retail unit 2
|
4,189
|
5,648
|
(25.8) %
|
|
Used vehicle
gross profit per retail unit 2
|
1,351
|
1,919
|
(29.6) %
|
|
Parts and service
("P&S") gross profit
|
92,503
|
90,061
|
2.7 %
|
|
Collision repair
("Collision") gross profit
|
17,527
|
14,074
|
24.5 %
|
|
Finance, insurance and
other ("F&I") gross profit per retail unit
average2
|
3,206
|
3,424
|
(6.4) %
|
|
Operating
expenses before depreciation 2
|
200,581
|
208,349
|
(3.7) %
|
|
Operating
expenses before depreciation as a % of gross profit
2
|
75.7 %
|
71.8 %
|
3.9 ppts
|
|
Floorplan
financing expense
|
18,583
|
17,573
|
5.7 %
|
Consolidated revenue decreased due to weaker performance across
used vehicle and F&I operations.
Consolidated gross profit decreased due to declining new vehicle
gross profit per retail unit2 seen industry wide,
continued negative pressure from structural issues in our U.S.
Operations, and declining used vehicle sales, all resulting in
lower contributions from F&I operations, partially offset by
positive contributions from P&S and collision operations, and
recent acquisitions.
Operating expenses before depreciation2 declined due
to lower variable employee costs as a result of weaker gross
profit and greater restrictions on hiring and discretionary
spend.
Floorplan financing expenses increased as a result of increased
new inventory levels partially offset by lower used vehicle
inventory levels and decreasing interest rates.
Net income for the period decreased as a result of lower gross
profits and higher floorplan financing expenses as discussed
above.
Adjusted EBITDA1 for the period and adjusted EBITDA
margin1 decreased primarily as a result of lower gross
profits and higher floorplan financing expenses as discussed
above.
Canadian Operations Highlights
|
Three-Months Ended
September 30
|
|
CANADIAN FINANCIAL
RESULTS
|
2024
|
2023
|
%
Change
|
|
Revenue
|
1,439,643
|
1,440,572
|
(0.1) %
|
|
Gross
profit
|
240,737
|
252,698
|
(4.7) %
|
|
Gross profit
percentage 2
|
16.7 %
|
17.5 %
|
(0.8) ppts
|
|
Operating
expenses
|
184,937
|
188,683
|
(2.0) %
|
|
Net income
|
20,422
|
25,910
|
(21.2) %
|
|
Adjusted EBITDA
1
|
61,195
|
64,856
|
(5.6) %
|
|
Adjusted EBITDA margin
1
|
4.3 %
|
4.5 %
|
(0.2) ppts
|
|
New retail
vehicles2 sold (units)
|
9,599
|
9,185
|
4.5 %
|
|
Used retail
vehicles2 sold (units)
|
13,838
|
14,642
|
(5.5) %
|
|
Used-to-new
retail units ratio 2
|
1.44
|
1.59
|
(9.4) %
|
|
New vehicle
gross profit per retail unit 2
|
4,607
|
5,761
|
(20.0) %
|
|
Used vehicle
gross profit per retail unit 2
|
1,670
|
1,986
|
(15.9) %
|
|
P&S gross
profit
|
77,164
|
75,428
|
2.3 %
|
|
Collision gross
profit
|
17,527
|
14,074
|
24.5 %
|
|
F&I gross
profit per retail unit average 2
|
3,282
|
3,353
|
(2.1) %
|
|
Floorplan
financing expenses
|
16,082
|
15,398
|
4.4 %
|
Revenue and gross profit decreased due to weaker performance
across new vehicle, used vehicle, and F&I operations, partially
offset by positive contributions from P&S and collision
operations, and recent acquisitions.
New vehicle gross profit per retail unit2 decreased
as new vehicle market normalizes and inventory supply
increased.
Used vehicle gross profit per retail unit2 decreased
as a result of current used vehicle market dynamics resulting in
the prioritization of lower priced vehicles and lower used retail
vehicles2 sold.
F&I gross profit per retail unit average2
decreased slightly as the continued high interest rate environment
has shifted payment mix towards more cash, Original Equipment
Manufacturers ("OEM") finance, and lease transactions and away from
more profitable bank finance deals. This negative pressure has been
partially offset with higher product penetrations on all deal
types.
Growth in collision gross profit was largely driven by strong
customer demand from increased insurance referrals and additional
OEM certifications.
Adjusted EBITDA1 declined due to the reasons stated
above combined with higher floorplan financing expenses.
U.S. Operations Highlights
|
Three-Months Ended
September 30
|
|
U.S. FINANCIAL
RESULTS
|
2024
|
2023
|
%
Change
|
|
Revenue
|
188,219
|
216,849
|
(13.2) %
|
|
Gross
profit
|
24,255
|
37,527
|
(35.4) %
|
|
Gross profit
percentage 2
|
12.9 %
|
17.3 %
|
(4.4) ppts
|
|
Operating
expenses
|
31,211
|
35,147
|
(11.2) %
|
|
Net loss
|
(13,369)
|
(3,111)
|
(329.7) %
|
|
Adjusted EBITDA
1
|
(7,956)
|
1,863
|
(527.1) %
|
|
Adjusted EBITDA margin
1
|
(4.2) %
|
0.9 %
|
(5.1) ppts
|
|
New retail
vehicles2 sold (units)
|
1,609
|
1,370
|
17.4 %
|
|
Used retail
vehicles2 sold (units)
|
1,753
|
2,236
|
(21.6) %
|
|
Used-to-new
retail units ratio 2
|
1.09
|
1.63
|
(33.1) %
|
|
New vehicle
gross profit per retail unit 2
|
1,697
|
4,893
|
(65.3) %
|
|
Used vehicle
gross profit per retail unit 2
|
(1,168)
|
1,481
|
(178.9) %
|
|
P&S gross
profit
|
15,339
|
14,633
|
4.8 %
|
|
F&I gross profit
per retail unit average 2
|
2,682
|
3,892
|
(31.1) %
|
|
Floorplan financing
costs
|
2,501
|
2,175
|
15.0 %
|
Revenue declined largely due to lower used retail
vehicle2 sales. Gross profit declined due to weaker new
vehicles, used vehicles and F&I performance, including an
increase in the used vehicle inventory writedown recognized into
cost of sales. Used vehicle performance was negatively impacted by
market dynamics that made sourcing optimal used vehicle inventory
more challenging. P&S gross profit increased due to the
successful implementation of a pricing initiative, including the
creation of a parts pricing matrix and updating of warranty labour
rates and pricing.
Net income decreased due to lower gross profits as noted above
and higher financing costs.
Adjusted EBITDA1 declined due to lower gross profits
and higher floorplan financing costs as noted above.
Collision Operations Highlights
|
Three-Months Ended
September 30
|
|
Collision Financial
Results
|
2024
|
2023
|
%
Change
|
|
Revenue
|
31,487
|
29,014
|
8.5 %
|
|
Gross
profit
|
17,527
|
14,074
|
24.5 %
|
|
Gross
profit percentage 2
|
55.7 %
|
48.5 %
|
7.2 ppts
|
|
Adjusted EBITDA
1
|
4,865
|
3,454
|
40.9 %
|
|
Same store
revenue 2
|
29,920
|
28,621
|
4.5 %
|
|
Same store
gross profit 2
|
16,844
|
13,882
|
21.3 %
|
|
Same store
gross profit percentage 2
|
56.3 %
|
48.5 %
|
7.8 ppts
|
Collision revenue and gross profit increased reflecting
contributions from increased insurance referrals and strong
customer demand supported by additional OEM certifications.
Collision gross profit percentage2 increased due to
continued negotiation of parts discount agreements with our
vendors, improved parts procurement practices to obtain the best
discounts on OEM parts, and implementation of the collision
playbook and training process to increase capacity and productivity
during the quarter.
Same store2 revenue, gross profit, and gross profit
percentage2 increased for the reasons noted above.
Adjusted EBITDA1 increased due to higher gross
profits as noted above.
Other Recent Developments
During the quarter:
- For the period from July 1 to August 14,
2024, the Company repurchased and cancelled 117,700 shares
for an average price of $18.86 under
its Normal Course Issuer Bid ("NCIB") and automatic share purchase
plan ("ASPP") for consideration of $2.2
million. On August 15, 2024,
the ASPP was terminated early in accordance with its terms.
- On July 30, 2024, S&P Global
Ratings ("S&P") issued a research update where the Company's
Credit Rating was reaffirmed at 'B+' and outlook was revised from
'Stable' to' Negative'.
- AutoCanada identified a cybersecurity incident on August 11, 2024 that impacted its internal
information technology ("IT") systems. This incident has been
contained and remediation and investigation efforts are
ongoing.
- On September 10, 2024, the
Company completed the strategic divestiture of two Stellantis
stores located in Ponoka, Alberta
and Airdrie, Alberta.
- On September 24, 2024, the
Company announced the restructuring of its RightRide operations,
including the closure of several underperforming RightRide
locations.
- On September 27, 2024, the
Company announced an amendment to its senior credit facility that
offers additional covenant headroom for the period from
September 30, 2024 to September 30, 2025.
Conference Call
A conference call to discuss the results for the three months
ended September 30, 2024 will be held on November 13,
2024 at 4:00 pm Mountain
(6:00 pm Eastern). To participate in
the conference call, please dial 1-888-664-6392 approximately 10
minutes prior to the call.
This conference call will also be webcast live over the internet
and can be accessed by all interested parties at the following
URL: https://investors.autocan.ca/event/2024-q3-conference-call/
MD&A and Financial Statements
Information included in this press release is a summary of
results. It should be read in conjunction with AutoCanada's Interim
Consolidated Financial Statements ("Interim Financial Statements")
and Management's Discussion and Analysis ("MD&A") for the
three-month period and nine-month period ended September 30, 2024, which can be found on the
Company's website at www.autocan.ca or on www.sedarplus.ca.
All comparisons presented in this press release are between the
three-month period ended September 30, 2024 and the
three-month period ended September 30,
2023, unless otherwise indicated. Results are reported in
Canadian dollars and have been rounded to the nearest thousand
dollars, unless otherwise stated.
|
1
|
See "NON-GAAP AND OTHER
FINANCIAL MEASURES" below.
|
|
2
|
This press release
contains "SUPPLEMENTARY FINANCIAL MEASURES". Section 13. NON-GAAP
AND OTHER FINANCIAL MEASURES of the Company's Management's
Discussion & Analysis for the three-month period and nine-month
period ended September 30, 2024 ("MD&A") is hereby incorporated
by reference for further information regarding the composition of
these measures (accessible through the SEDAR website at
www.sedarplus.ca).
|
Condensed Interim Consolidated Statements of Comprehensive
Income (Loss)
(Unaudited)
(in thousands of Canadian dollars
except for share and per share amounts)
|
Three-month period
ended
|
Nine-month period
ended
|
|
September 30,
2024
$
|
September 30,
2023
$
|
September 30,
2024
$
|
September 30,
2023
$
|
|
Revenue (Note
6)
|
1,627,862
|
1,657,421
|
4,649,769
|
4,953,009
|
|
Cost of sales
(Note 7)
|
(1,362,870)
|
(1,367,196)
|
(3,905,774)
|
(4,089,064)
|
|
Gross
profit
|
264,992
|
290,225
|
743,995
|
863,945
|
|
Operating
expenses (Note 8)
|
(216,148)
|
(223,830)
|
(649,687)
|
(664,447)
|
|
Operating profit
before other income and expense
|
48,844
|
66,395
|
94,308
|
199,498
|
|
Lease and other
income, net
|
3,301
|
2,182
|
7,236
|
7,770
|
|
(Loss) gain on
disposal of assets, net (Note 12, 27)
|
(197)
|
(39)
|
22,429
|
67
|
|
Impairment of
non-financial assets (Note 17)
|
(597)
|
—
|
(19,106)
|
—
|
|
Operating profit
|
51,351
|
68,538
|
104,867
|
207,335
|
|
Finance costs (Note
9)
|
(42,768)
|
(38,112)
|
(116,110)
|
(106,699)
|
|
Finance income (Note
9)
|
1,497
|
202
|
2,283
|
2,112
|
|
Gain on redemption
liabilities
|
1,269
|
—
|
627
|
—
|
|
Other gains (losses),
net
|
69
|
(156)
|
417
|
(288)
|
|
Income (loss) for
the period before taxation
|
11,418
|
30,472
|
(7,916)
|
102,460
|
|
Income tax expense
(Note 10)
|
4,365
|
7,673
|
20,466
|
26,049
|
|
Net income (loss)
for the period
|
7,053
|
22,799
|
(28,382)
|
76,411
|
|
|
|
|
|
|
Other comprehensive
(loss) income
|
|
|
|
|
|
Items that may be
reclassified to profit or loss
|
|
|
|
|
|
Foreign operations
currency translation
|
(552)
|
3,933
|
2,407
|
7,213
|
|
Change in fair value of
cash flow hedge (Note 21)
|
—
|
396
|
(206)
|
1,486
|
|
Income tax relating to
these items
|
—
|
(101)
|
51
|
(379)
|
|
Other comprehensive
(loss) income for the period
|
(552)
|
4,228
|
2,252
|
8,320
|
|
Comprehensive income
(loss) for the period
|
6,501
|
27,027
|
(26,130)
|
84,731
|
|
|
|
|
|
|
Net income (loss)
for the period attributable to:
|
|
|
|
|
|
AutoCanada
shareholders
|
5,992
|
19,897
|
(30,697)
|
70,266
|
|
Non-controlling
interests
|
1,061
|
2,902
|
2,315
|
6,145
|
|
7,053
|
22,799
|
(28,382)
|
76,411
|
|
Comprehensive income
(loss) for the period attributable to:
|
|
|
|
|
|
AutoCanada
shareholders
|
5,440
|
24,125
|
(28,445)
|
78,586
|
|
Non-controlling
interests
|
1,061
|
2,902
|
2,315
|
6,145
|
|
6,501
|
27,027
|
(26,130)
|
84,731
|
|
Net income
(loss) per share attributable to AutoCanada
shareholders:
|
|
|
|
|
|
Basic
|
0.26
|
0.84
|
(1.31)
|
2.98
|
|
Diluted
|
0.25
|
0.81
|
(1.31)
|
2.87
|
|
|
|
|
|
|
Weighted average
shares
|
|
|
|
|
|
Basic (Note
23)
|
23,167,774
|
23,593,493
|
23,374,538
|
23,548,608
|
|
Diluted (Note
23)
|
23,835,049
|
24,498,108
|
23,374,538
|
24,443,285
|
The accompanying notes are an integral part of these
condensed interim consolidated financial statements and can be
found on the Company's website at www.autocan.ca or
on www.sedarplus.ca.
Condensed Interim Consolidated Statements of Financial
Position
(Unaudited)
(in thousands of Canadian
dollars)
|
September 30,
2024
(Unaudited)
$
|
December 31,
2023
$
|
|
ASSETS
|
|
|
|
Current
assets
|
|
|
|
Cash
|
132,800
|
103,146
|
|
Trade and other
receivables (Note 13)
|
253,981
|
222,076
|
|
Inventories (Note
14)
|
1,075,578
|
1,154,311
|
|
Current tax
recoverable
|
12,536
|
22,187
|
|
Other current assets
(Note 18)
|
14,817
|
15,718
|
|
Assets held for sale
(Note 12)
|
31,736
|
22,152
|
|
1,521,448
|
1,539,590
|
|
Property and
equipment (Note 15)
|
357,005
|
378,269
|
|
Right-of-use
assets
|
428,312
|
405,105
|
|
Other
long-term assets (Note 18)
|
17,025
|
16,708
|
|
Deferred income
tax
|
18,618
|
35,444
|
|
Derivative
financial instruments (Note 21)
|
—
|
3,920
|
|
Intangible
assets
|
664,827
|
682,137
|
|
Goodwill
|
98,687
|
98,266
|
|
3,105,922
|
3,159,439
|
|
LIABILITIES
|
|
|
|
Current
liabilities
|
|
|
|
Trade and other
payables (Note 19)
|
214,908
|
238,427
|
|
Revolving floorplan
facilities (Note 20)
|
1,155,679
|
1,174,595
|
|
Vehicle repurchase
obligations
|
1,793
|
1,982
|
|
Indebtedness (Note
20)
|
24,344
|
744
|
|
Lease
liabilities
|
42,000
|
28,411
|
|
Redemption
liabilities
|
21,953
|
22,580
|
|
Other
liabilities (Note 21)
|
12,351
|
12,325
|
|
1,473,028
|
1,479,064
|
|
Long-term
indebtedness (Note 20)
|
544,448
|
562,178
|
|
Long-term
lease liabilities
|
481,464
|
469,013
|
|
Long-term
redemption liabilities
|
25,000
|
25,000
|
|
Derivative
financial instruments (Note 21)
|
5,691
|
2,219
|
|
Other long-term
liabilities
|
430
|
1,368
|
|
Deferred income
tax
|
51,749
|
55,768
|
|
2,581,810
|
2,594,610
|
|
EQUITY
|
|
|
|
Attributable to
AutoCanada shareholders
|
497,839
|
534,847
|
|
Attributable to
non-controlling interests
|
26,273
|
29,982
|
|
524,112
|
564,829
|
|
3,105,922
|
3,159,439
|
The accompanying notes are an integral part of these
condensed interim consolidated financial statements and can be
found on the Company's website at www.autocan.ca or
on www.sedarplus.ca.
Condensed Interim Consolidated Statements of Cash
Flows
(Unaudited)
(in thousands of Canadian
dollars)
|
Three-month period
ended
|
Nine-month period
ended
|
|
September 30,
2024
$
|
September 30,
2023
$
|
September 30,
2024
$
|
September 30,
2023
$
|
|
Cash provided by
(used in):
Operating
activities
|
|
|
|
|
|
Net income (loss) for
the period
|
7,053
|
22,799
|
(28,382)
|
76,411
|
|
Adjustments
for:
|
|
|
|
|
|
Income tax expense
(Note 10)
|
4,365
|
7,673
|
20,466
|
26,049
|
|
Finance costs (Note 9)
1
|
42,768
|
38,112
|
116,110
|
106,699
|
|
Depreciation of
right-of-use assets (Note 8)
|
9,013
|
8,298
|
26,375
|
24,757
|
|
Depreciation of
property and equipment (Note 8)
|
6,428
|
6,782
|
19,074
|
18,571
|
|
Amortization of
intangible assets (Note 8)
|
126
|
401
|
377
|
401
|
|
Loss (gain) on
disposal of assets, net (Note 12, 27)
|
197
|
39
|
(22,429)
|
(67)
|
|
Share-based
compensation (Note 22)
|
1,873
|
1,740
|
6,274
|
4,677
|
|
Unrealized fair value
changes on foreign exchange forward contracts (Note 21)
|
(112)
|
932
|
2,079
|
381
|
|
Gain on redemption
liabilities
|
(1,269)
|
—
|
(627)
|
—
|
|
Impairment of
non-financial assets (Note 17)
|
597
|
—
|
19,106
|
—
|
|
Net change in non-cash
working capital (Note 26)
|
(44,809)
|
(5,321)
|
954
|
36,372
|
|
26,230
|
81,455
|
159,377
|
294,251
|
|
Income taxes recovered
(paid)
|
19,043
|
(9,527)
|
2,494
|
(46,875)
|
|
Interest paid
1
|
(42,140)
|
(41,289)
|
(114,095)
|
(107,367)
|
|
Settlement of
share-based awards, net
|
(167)
|
389
|
(1,247)
|
(622)
|
|
2,966
|
31,028
|
46,529
|
139,387
|
|
Investing
activities
|
|
|
|
|
|
Business acquisitions,
net of cash acquired (Note 11)
|
—
|
(41)
|
(20,197)
|
(47,027)
|
|
Purchases of
property and equipment (Note 15)
|
(5,710)
|
(16,161)
|
(25,731)
|
(64,939)
|
|
Additions to
intangible assets
|
(70)
|
(241)
|
(742)
|
(1,227)
|
|
Adjustments to prior
year business acquisitions
|
(1)
|
—
|
(506)
|
254
|
|
Proceeds on sale of
property and equipment (Note 12)
|
2,295
|
328
|
53,923
|
844
|
|
Proceeds on
divestiture of dealership (Note 12, 27)
|
33,211
|
—
|
33,211
|
—
|
|
29,725
|
(16,115)
|
39,958
|
(112,095)
|
|
Financing
activities
|
|
|
|
|
|
Proceeds from
indebtedness
|
142,058
|
160,486
|
495,071
|
472,528
|
|
Repayment of
indebtedness
|
(133,823)
|
(140,054)
|
(490,228)
|
(488,969)
|
|
Repayment of Executive
Advance
|
—
|
1,374
|
—
|
1,624
|
|
Repurchase of common
shares under Normal Course Issuer Bid (Note 23)
|
(2,220)
|
—
|
(9,942)
|
—
|
|
Shares settled from
treasury, net (Note 23)
|
185
|
1
|
4
|
353
|
|
Payments for purchase
of UD LP minority interest (Note 28)
|
—
|
—
|
(22,500)
|
—
|
|
Dividends paid to
non-controlling interests
|
—
|
—
|
(4,294)
|
(3,830)
|
|
Repayment of loans by
non-controlling interests
|
725
|
—
|
2,961
|
3,087
|
|
Acquisition of
non-controlling interests
|
(5,499)
|
—
|
(5,499)
|
—
|
|
Principal portion of
lease payments, net
|
(7,499)
|
(7,256)
|
(23,253)
|
(21,423)
|
|
(6,073)
|
14,551
|
(57,680)
|
(36,630)
|
|
Effect of exchange
rate changes on cash
|
(16)
|
986
|
847
|
(115)
|
|
Net increase
(decrease) in cash
|
26,602
|
30,450
|
29,654
|
(9,453)
|
|
Cash at beginning
of period
|
106,198
|
68,398
|
103,146
|
108,301
|
|
Cash at end of
period
|
132,800
|
98,848
|
132,800
|
98,848
|
The accompanying notes are an integral part of these
condensed interim consolidated financial statements and can be
found on the Company's website at www.autocan.ca or
on www.sedarplus.ca.
NON-GAAP AND OTHER FINANCIAL MEASURES
This press release contains certain financial measures that do
not have any standardized meaning prescribed by GAAP. Therefore,
these financial measures may not be comparable to similar measures
presented by other issuers. Investors are cautioned these measures
should not be construed as an alternative to net income (loss) or
to cash provided by (used in) operating, investing, financing
activities, cash, and indebtedness determined in accordance with
GAAP, as indicators of our performance. We provide these additional
non-GAAP measures ("Non-GAAP Measures"), capital management
measures, and supplementary financial measures to assist investors
in determining the Company's ability to generate earnings and cash
provided by (used in) operating activities and to provide
additional information on how these cash resources are used.
Adjusted EBITDA and adjusted EBITDA margin are not earnings
measures recognized by GAAP and do not have standardized meanings
prescribed by GAAP. Investors are cautioned that these Non-GAAP
Measures should not replace net earnings or loss (as determined in
accordance with GAAP) as an indicator of the Company's performance,
cash flows from operating, investing and financing activities or as
a measure of liquidity and cash flows. The Company's methods of
calculating referenced Non-GAAP Measures may differ from the
methods used by other issuers. Therefore, these measures may not be
comparable to similar measures presented by other issuers.
We list and define these "NON-GAAP MEASURES" below:
Adjusted EBITDA
Adjusted EBITDA (earnings before interest, taxes, depreciation,
and amortization) is an indicator of a company's operating
performance over a period of time and ability to incur and service
debt. Adjusted EBITDA provides an indication of the results
generated by our principal business activities prior to:
- Interest expense (other than interest expense on floorplan
financing), income taxes, depreciation, and amortization;
- Charges that introduce volatility unrelated to operating
performance by virtue of the impact of external factors (such as
share-based compensation amounts attributed to certain equity
issuances as part of the Used Digital Division);
- Non-cash charges (such as impairment, recoveries, gains or
losses on derivatives, revaluation of contingent consideration and
revaluation of redemption liabilities);
- Charges outside the normal course of business (such as
restructuring, gains and losses on dealership divestitures, and
real estate transactions); and
- Charges that are non-recurring in nature (such as provisions
for settlement income).
The Company considers this measure meaningful as it provides
improved continuity with respect to the comparison of our operating
performance over a period of time.
Adjusted EBITDA Margin
Adjusted EBITDA margin is an indicator of a company's operating
performance specifically in relation to our revenue
performance.
The Company considers this measure meaningful as it provides
improved continuity with respect to the comparison of our operating
performance with retaining and growing profitability as our revenue
and scale changes over a period of time.
NON-GAAP AND OTHER FINANCIAL MEASURES RECONCILIATIONS
Adjusted EBITDA and Segmented Adjusted EBITDA
The following table illustrates segmented adjusted EBITDA for
the three-month periods ended September
30:
|
Three-Months
Ended
September 30, 2024
|
|
Three-Months
Ended
September 30, 2023
|
|
Canada
|
U.S.
|
Total
|
|
Canada
|
U.S.
|
Total
|
|
Net income (loss) for
the period
|
20,422
|
(13,369)
|
7,053
|
|
25,910
|
(3,111)
|
22,799
|
|
Add back
(deduct):
|
|
|
|
|
|
|
|
|
Income tax expense
(recovery)
|
4,347
|
18
|
4,365
|
|
7,777
|
(104)
|
7,673
|
|
Depreciation of right
of use assets
|
8,400
|
613
|
9,013
|
|
7,565
|
733
|
8,298
|
|
Depreciation of
property and equipment
|
5,864
|
564
|
6,428
|
|
6,140
|
642
|
6,782
|
|
Amortization of
intangible assets
|
126
|
—
|
126
|
|
401
|
—
|
401
|
|
Interest on long-term
indebtedness
|
6,396
|
3,574
|
9,970
|
|
7,525
|
2,859
|
10,384
|
|
Lease liability
interest
|
8,274
|
629
|
8,903
|
|
7,546
|
844
|
8,390
|
|
Impairment of
non-financial assets
|
582
|
15
|
597
|
|
—
|
—
|
—
|
|
Gain on redemption
liabilities
|
(1,269)
|
—
|
(1,269)
|
|
—
|
—
|
—
|
|
Canadian franchise
dealership restructuring charges
|
(1,628)
|
—
|
(1,628)
|
|
—
|
—
|
—
|
|
Unrealized fair value
changes in derivative instruments
|
5,268
|
—
|
5,268
|
|
1,173
|
—
|
1,173
|
|
Amortization of loss
on terminated hedges
|
—
|
—
|
—
|
|
817
|
—
|
817
|
|
Unrealized foreign
exchange losses (gains)
|
378
|
—
|
378
|
|
(37)
|
—
|
(37)
|
|
Software
implementation costs
|
1,013
|
—
|
1,013
|
|
—
|
—
|
—
|
|
Cybersecurity incident
costs
|
314
|
—
|
314
|
|
—
|
—
|
—
|
|
RightRide
restructuring charges
|
2,511
|
—
|
2,511
|
|
—
|
—
|
—
|
|
Loss on disposal of
assets
|
197
|
—
|
197
|
|
39
|
—
|
39
|
|
Adjusted
EBITDA
|
61,195
|
(7,956)
|
53,239
|
|
64,856
|
1,863
|
66,719
|
The following table illustrates collision adjusted EBITDA for
the three-month periods ended September
30:
|
Three-Months
Ended
September 30, 2024
|
|
Three-Months
Ended
September 30, 2023
|
|
Collision
Operations
|
Canada
|
U.S.
|
Total
|
|
Canada
|
U.S.
|
Total
|
|
Period from July 1
to September 30
|
|
|
|
|
|
|
|
|
Net income for the
period
|
2,955
|
—
|
2,955
|
|
1,790
|
—
|
1,790
|
|
Add back:
|
|
|
|
|
|
|
|
|
Income tax
expense
|
—
|
—
|
—
|
|
9
|
—
|
9
|
|
Depreciation of right
of use assets
|
585
|
—
|
585
|
|
588
|
—
|
588
|
|
Depreciation of
property and equipment
|
485
|
—
|
485
|
|
430
|
—
|
430
|
|
Lease liability
interest
|
840
|
—
|
840
|
|
661
|
—
|
661
|
|
Gain on disposal of
assets
|
—
|
—
|
—
|
|
(24)
|
—
|
(24)
|
|
Adjusted
EBITDA
|
4,865
|
—
|
4,865
|
|
3,454
|
—
|
3,454
|
Adjusted EBITDA Margin
The following table illustrates segmented adjusted EBITDA margin
for the three-month periods ended September
30:
|
Three-Months
Ended
September 30, 2024
|
|
Three-Months
Ended
September 30, 2023
|
|
Canada
|
U.S.
|
Total
|
|
Canada
|
U.S.
|
Total
|
|
Adjusted
EBITDA
|
61,195
|
(7,956)
|
53,239
|
|
64,856
|
1,863
|
66,719
|
|
Revenue
|
1,439,643
|
188,219
|
1,627,862
|
|
1,440,572
|
216,849
|
1,657,421
|
|
Adjusted EBITDA
Margin
|
4.3 %
|
(4.2) %
|
3.3 %
|
|
4.5 %
|
0.9 %
|
4.0 %
|
Forward Looking Statements
Certain statements contained in this press release are
forward-looking statements and information (collectively
"forward-looking statements"), within the meaning of the applicable
Canadian securities legislation. We hereby provide cautionary
statements identifying important factors that could cause actual
results to differ materially from those projected in these
forward-looking statements. Any statements that express, or involve
discussions as to, expectations, beliefs, plans, objectives,
assumptions, or future events or performance (often, but not
always, through the use of words or phrases such as "will likely
result", "are expected to", "will continue", "is anticipated",
"projection", "vision", "goals", "objective", "target",
"schedules", "outlook", "anticipate", "expect", "estimate",
"could", "should", "plan", "seek", "may", "intend", "likely",
"will", "believe", "shall" and similar expressions) and the
financial outlook with respect to the transformation plan are not
historical facts and are forward-looking and may involve estimates
and assumptions and are subject to risks, uncertainties and other
factors some of which are beyond our control and difficult to
predict.
Forward-looking statements and financial outlook in this press
release include: AutoCanada's future financial position and
expected run-rate operational expense savings from the
transformation plan.
Forward-looking statements and financial outlook provide
information about management's expectations and plans for the
future and may not be appropriate for other purposes. Forward
looking statements and financial outlook are based on various
assumptions, and expectations that AutoCanada believes are
reasonable in the circumstances. No assurance can be given that
these assumptions and expectations will prove correct. Those
assumptions and expectations are based on information currently
available to AutoCanada, including information obtained from
third-party consultants and other third-party sources, and the
historic performance of AutoCanada's businesses. AutoCanada
cautions that the assumptions used to prepare such forward-looking
statements and financial outlook, including AutoCanada's expected
run-rate operational expense savings through the transformation
plan, could prove to be incorrect or inaccurate.
This financial outlook is disclosed to assist current and future
shareholders to evaluate the effectiveness of AutoCanada's
transformation plan and readers are cautioned that it may not be
suitable for any other purpose.
The expected run-rate operational expense savings are based on
the assumptions that staffing optimization, improved store
efficiencies and productivity gains, and consolidation of
operations will decrease labour and overhead costs. Additional key
assumptions or risk factors with respect to achieving the
operational expense savings include successful execution, no
overruns in one-time restructuring costs incurred in connection
with the transformation plan, economic stability, and other
external factors. In addition to the significant assumptions
referred to in this paragraph, refer to "Forwarding-Looking
Statements" within Section 1 Reader Advisories and Forward-Looking
Statements and Section 12 Risk Factors of the MD&A for a
detailed review of significant business risks affecting
AutoCanada.
In preparing the forward-looking statements and financial
outlook, AutoCanada considered numerous economic, market and
operational assumptions, including key assumptions listed under
Section 3 Market and Financial Outlook of the MD&A.
The forward-looking statements and financial outlook are also
subject to the risks and uncertainties set forth below. By their
very nature, forward-looking statements involve numerous
assumptions, risks and uncertainties, both general and specific.
Should one or more of these risks and uncertainties materialize or
should underlying assumptions prove incorrect, as many important
factors are beyond our control, AutoCanada's actual performance and
financial results may vary materially from those estimates and
expectations contemplated, expressed or implied in the
forward-looking statements. These risks and uncertainties include
risks relating to failure to realize expected cost-savings, cost
overruns in one-time restructuring expenses, compliance with laws
and regulations, reduced customer demand, operational risks, force
majeure, labour relations matters, our ability to access external
sources of debt and equity capital, and the risks identified in (i)
the MD&A under Section 12 Risk Factors and (ii)
AutoCanada's most recent Annual Information Form for the year-ended
December 31, 2023 (the "AIF"). The
preceding list of assumptions, risks and uncertainties is not
exhaustive.
Accordingly, these factors could cause actual results or
outcomes to differ materially from those expressed in the
forward-looking statements and financial outlook. Therefore, any
such forward-looking statements and financial outlook are qualified
in their entirety by reference to the factors discussed throughout
this press release and in the MD&A.
Details of the Company's material forward-looking statements are
included in the Company's most recent AIF. The AIF and other
documents filed with securities regulatory authorities (accessible
through the SEDAR website (www.sedarplus.ca) describe the risks,
material assumptions, and other factors that could influence actual
results and which are incorporated herein by reference.
When relying on our forward-looking statements and financial
outlook to make decisions with respect to AutoCanada, investors and
others should carefully consider the preceding factors, other
uncertainties and potential events. Any forward-looking statements
and financial outlook are provided as of the date of this press
release and, except as required by law, AutoCanada does not
undertake to update or revise such statements to reflect new
information, subsequent or otherwise. For the reasons set forth
above, investors should not place undue reliance on forward-looking
statements or financial outlook.
About AutoCanada
AutoCanada is a leading North American multi-location automobile
dealership group currently operating 83 franchised dealerships,
comprised of 28 brands, in eight provinces in Canada as well as a group in Illinois, USA. AutoCanada currently sells
Acura, Alfa Romeo, Audi, BMW, Buick, Cadillac, Chevrolet, Chrysler, Dodge,
FIAT, Ford, GMC, Honda, Hyundai, Infiniti, Jeep, Kia, Lincoln, Mazda, Mercedes-Benz, MINI, Nissan,
Porsche, Ram, Subaru, Toyota, Volkswagen, and Volvo branded
vehicles. In addition, AutoCanada's Canadian Operations segment
currently operates 3 used vehicle dealerships and 1 used vehicle
auction business supporting the Used Digital Division, 5 RightRide
division locations, and 11 stand-alone collision centres within our
group of 27 collision centres. In 2023, the Company generated
revenue in excess of $6 billion and
our dealerships sold over 100,000 retail vehicles.
Additional Information
Additional information about AutoCanada is available at the
Company's website at www.autocan.ca and www.sedarplus.ca.
SOURCE AutoCanada Inc.