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AUTOCANADA ANNOUNCES FIRST QUARTER RESULTS

May 2, 2024 | AutoCanada

  • Revenue was $1,420.9 million as compared to $1,539.3 million in the prior year, a decrease of (7.7)%
  • Net (loss) income for the period was $(2.4) million as compared to $8.4 million in the prior year, a decrease of (128.2)%
  • Diluted earnings (loss) per share was $(0.10) as compared to $0.32 in the prior year
  • Adjusted EBITDA1 was $22.0 million versus $45.0 million in the prior year, a decrease of $(23.0) million

EDMONTON, ABMay 1, 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 March 31, 2024.

"During the first quarter, the trend of replenishing new light vehicle inventory, combined with consumer preference to buy affordable vehicles and minimize borrowing costs, resulted in continued normalization of total gross profit per new retail unit." said Paul Antony, AutoCanada's Executive Chair. "This combined with extremely cold weather impacting foot traffic in many of our Western Canadian stores, along with a shortage of quality, well priced used vehicles available to procure for our used division, culminated in challenging operational dynamics during the first quarter."

"Against this backdrop of difficult market conditions, AutoCanada remains focused on its strategies to outperform the broader market while protecting profitability and executing against Project Elevate initiatives. During the first quarter, we completed restructuring the US division and began implementing Canadian operating standards, which will have a positive impact in coming quarters. We also began the process to implement standard operating expense ratios by brand in Canada, which will benefit the Canadian operations later this fall and through the end of this year. These, along with our numerous Project Elevate initiatives to maximize gross profit, modernize our corporate infrastructure and optimize our cost structure, are the path to a lower cost and more profitable business in the future. I'd like to express my appreciation for the hard work and commitment of our employees and thank our OEM partners for their continued support."

First Quarter Key Highlights and Recent Developments

Three-Months Ended March 31

CONSOLIDATED FINANCIAL RESULTS

2024

2023

% Change

Revenue

1,420,928

1,539,326

(7.7) %

Same store revenue 2

1,377,993

1,528,883

(9.9) %

Gross profit

229,327

254,982

(10.1) %

Gross profit percentage 2

16.1 %

16.6 %

(0.5) ppts

Operating expenses

211,664

211,601

0.0 %

Net (loss) income

(2,361)

8,384

(128.2) %

Basic net (loss) income per share attributable to AutoCanada shareholders

(0.10)

0.33

(130.3) %

Diluted net (loss) income per share attributable to AutoCanada shareholders

(0.10)

0.32

(131.3) %

Adjusted EBITDA 1

21,966

45,028

(51.2) %

Adjusted EBITDA Margin 1

1.5 %

2.9 %

 (1.4) ppts

New retail vehicles2 sold (units)

9,287

8,771

5.9 %

Used retail vehicles2 sold (units)

13,330

15,290

(12.8) %

New vehicle gross profit per retail unit 2

4,859

5,337

(9.0) %

Used vehicle gross profit per retail unit 2

1,264

1,317

(4.0) %

Parts and service ("P&S") gross profit

83,258

83,231

0.0 %

Collision repair ("Collision") gross profit

14,304

10,645

34.4 %

Finance, insurance and other ("F&I") gross profit per retail unit average2

3,275

3,462

(5.4) %

Normalized operating expenses before depreciation 1

191,321

194,414

(1.6) %

Normalized operating expenses before depreciation as a % of gross profit 1

83.4 %

76.2 %

7.2 ppts

Floorplan financing expense

19,617

15,697

25.0 %

Consolidated revenue decreased due to lower used retail vehicle2 sales, and lower F&I revenues, partially offset by higher new vehicle sales, positive contributions from collision operations and recent acquisitions.

Consolidated gross profit decreased primarily due to lower used retail vehicle sales and lower contributions from F&I.

Normalized operating expenses before depreciation1, which excludes share-based compensation, transaction costs, and other non-recurring costs, declined due to lower employee costs. Normalized operating expenses before depreciation as a percentage of gross profit1 increased due to compressed gross profit.

Floorplan financing expenses increased as a result of higher interest rates and rising new inventory levels partially offset by lower used vehicle inventory levels.

Net loss for the period resulted from lower gross profits for the reasons stated above, an impairment charge in the current quarter for an asset held for sale, and higher floorplan financing expenses, partially offset by gains from the sale of two properties completed during the quarter.

Adjusted EBITDA1 for the period and adjusted EBITDA margin1 decreased primarily as a result of lower gross profits combined with higher floorplan financing expenses.

Canadian Operations Highlights

Three-Months Ended March 31

CANADIAN FINANCIAL RESULTS

2024

2023

% Change

Revenue

1,240,279

1,340,255

(7.5) %

Gross profit

200,778

220,373

(8.9) %

  Gross profit percentage 2

16.2 %

16.4 %

  (0.2) ppts

Operating expenses

180,056

177,396

1.5 %

Net income

6,681

12,428

(46.2) %

  Adjusted EBITDA 1

25,901

44,566

(41.9) %

Adjusted EBITDA margin 1

2.1 %

3.3 %

  (1.2) ppts

  New retail vehicles2 sold (units)

7,909

7,603

4.0 %

  Used retail vehicles2 sold (units)

11,600

13,106

(11.5) %

  Used-to-new retail units ratio 2

1.47

1.72

(14.5) %

  New vehicle gross profit per retail unit 2

5,026

5,386

(6.7) %

  Used vehicle gross profit per retail unit 2

1,484

1,431

3.7 %

P&S gross profit

69,742

71,738

(2.8) %

Collision gross profit

14,304

10,645

34.4 %

F&I gross profit per retail unit average 2

3,263

3,473

(6.0) %

Revenue and gross profit decreased as a result of lower used vehicle sales and F&I operations, partially offset by contributions from collision operations, new vehicle sales and recent acquisitions. Growth in collision gross profit was driven by strong customer demand, increased production capacity and acquisitions. Used vehicle gross profit per retail unit2 increased due to a larger inventory writedown provision recognized in the prior year. F&I gross profit per retail unit average2 decreased as a growing proportion of retail vehicle sales are being purchased without dealer financing, resulting in fewer opportunities to sell higher margin warranty and insurance products.

Adjusted EBITDA1 declined due to the reasons stated above combined with higher floorplan financing expenses.

U.S. Operations Highlights

Three-Months Ended March 31

U.S. FINANCIAL RESULTS

2024

2023

% Change

Revenue

180,649

199,071

(9.3) %

Gross profit

28,549

34,609

(17.5) %

  Gross profit percentage 2

15.8 %

17.4 %

(1.6) ppts

Operating expenses

31,608

34,205

(7.6) %

Net loss

(9,042)

(4,044)

(123.6) %

  Adjusted EBITDA 1

(3,935)

462

(951.7) %

Adjusted EBITDA margin 1

(2.2) %

0.2 %

(2.4) ppts

  New retail vehicles2 sold (units)

1,378

1,168

18.0 %

  Used retail vehicles2 sold (units)

1,730

2,184

(20.8) %

  Used-to-new retail units ratio 2

1.26

1.87

(32.6) %

  New vehicle gross profit per retail unit 2

3,904

5,023

(22.3) %

  Used vehicle gross profit per retail unit 2

(213)

634

(133.6) %

P&S gross profit

13,516

11,493

17.6 %

F&I gross profit per retail unit average 2

3,353

3,400

(1.4) %

Revenue and gross profit declined due to lower used retail vehicle2 sales and lower F&I performance, partially offset by contributions from P&S operations and new retail vehicle 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 various initiatives to improve operational effectiveness.

Adjusted EBITDA1 declined due to lower used vehicle gross profits and higher floorplan financing costs, partially offset by higher P&S gross profit.

Collision Centre Operations Highlights

Three-Months Ended March 31

Collision Centre Financial Results

2024

2023

% Change

Revenue

32,601

27,751

17.5 %

Gross profit

14,304

10,645

34.4 %

  Gross profit percentage 2

43.9 %

38.4 %

5.5 ppts

Adjusted EBITDA 1

2,685

2,580

4.1 %

  Same store revenue 2

26,851

26,199

2.5 %

  Same store gross profit 2

12,092

9,212

31.3 %

  Same store gross profit percentage 2

45.0 %

35.2 %

9.8 ppts

Collision revenue, gross profit, and gross profit percentage2 increased reflecting contributions from acquisitions and strong customer demand supported by increased Original Equipment Manufacturers ("OEM") certifications and insurance referrals.

Same store2 revenue, gross profit, and gross profit percentage2 increased for the reasons noted.

Adjusted EBITDA1 increased for the reasons noted above.

Other Recent Developments

During the quarter:

  • On February 1, 2024, the Company entered into a $75.0 million interest rate swap with a fixed one-month Canadian Dollar Offered Rate ("CDOR") of 3.77%. The swap has an initial settlement date of February 1, 2027 and may be extended by the counterparty to February 1, 2029.
  • On February 1, 2024, the Company completed the previously announced sale of two properties located in British Columbia and Alberta for cash consideration of $41.4 million plus customary closing adjustments. Refer to Section 5 Acquisitions, Divestitures, and Other Recent Developments for additional information.
  • On March 1, 2024, the newly built open point dealership, Maple Ridge GM, located in Maple Ridge, B.C., commenced operations. The dealership consists of a dealership and service facility with 14 service bays and is the Company's first GM dealership in the Metro Vancouver area.
  • On March 7, 2024, the Company announced that it had received approval from the Toronto Stock Exchange ("TSX") for the renewal of its normal course issuer bid ("NCIB"). Pursuant to the NCIB, AutoCanada may purchase up to 1,329,106 common shares during the twelve-month period commencing March 11, 2024 and ending March 10, 2025 or such earlier date as the Company may complete its purchases under the NCIB. For the period ended March 31, 2024, the Company has repurchased and cancelled 78,688 common shares for an average price of $24.67 and total cash consideration of approximately $1.9 million.
  • On March 27, 2024, in connection with its previously announced NCIB, AutoCanada received approval from the TSX to implement an automatic share purchase plan ("ASPP") with its designated broker. The ASPP will terminate on March 10, 2025, unless terminated earlier in accordance with its terms.

After the quarter:

  • For the period from April 1, 2024 to May 1, 2024, under the NCIB and ASPP, the Company has repurchased and cancelled 78,000 common shares for an average price of $24.53 and total cash consideration of approximately $1.9 million.
  • On April 22, 2024, the Company entered into the fourth amended and restated credit agreement ("New Credit Facility") with the existing lending syndicate. The New Credit Facility includes the following:
    • Extend the maturity date to April 22, 2027 to maintain a three-year term;
    • Creation of a new $25 million capital expenditure term facility, and a corresponding $25 million accordion facility, to support the anticipated leasehold spending in the coming quarters;
    • Total aggregate bank facilities increased from $1.610 billion to $1.635 billion, with no changes to the revolving, wholesale flooring, and wholesale leasing facilities;
    • Enhancements to the Company's ability to floor a higher proportion of used vehicles;
    • Transition from CDOR to Canadian Overnight Repo Rate Average ("CORRA"); and
    • Certain administrative changes.
  • On May 1, 2024, the Company completed the sale of specific land and building in Alberta for cash consideration of $10.0 million plus closing adjustments resulting in a gain of $3.4 million. The land and buildings were presented as held for sale in the Interim Financial Statements.
Conference Call

A conference call to discuss the results for the three months ended March 31, 2024 will be held on May 2, 2024 at 9:00 am Mountain (11:00 am 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-q1-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 ended March 31, 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 March 31, 2024 and the three-month period ended March 31, 2023, unless otherwise indicated. Results are reported in Canadian dollars and have been rounded to the nearest thousand dollars, unless otherwise stated.

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 ended March 31, 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 (Loss) Income
(Unaudited)
(in thousands of Canadian dollars except for share and per share amounts)

Three-month period ended

March 31, 2024

$

March 31, 2023

$

    Revenue (Note 5)

1,420,928

1,539,326

    Cost of sales (Note 6)

(1,191,601)

(1,284,344)

Gross profit

229,327

254,982

    Operating expenses (Note 7)

(211,664)

(211,601)

Operating profit before other income and expense

17,663

43,381

Lease and other income, net

2,549

3,243

Gain on disposal of assets, net (Note 11)

19,267

5

Impairment of non-financial assets (Note 11 )

(7,200)

Operating profit

32,279

46,629

Finance costs (Note 8)

(36,302)

(35,827)

Finance income (Note 8)

728

1,102

Other gains (losses), net

82

(93)

(Loss) income for the period before taxation

(3,213)

11,811

Income tax (recovery) expense (Note 9)

(852)

3,427

Net (loss) income for the period

(2,361)

8,384

Other comprehensive income (loss)

Items that may be reclassified to profit or loss

Foreign operations currency translation

2,448

2,241

Change in fair value of cash flow hedge (Note 18)

(206)

439

Income tax relating to these items

51

(111)

Other comprehensive income for the period

2,293

2,569

Comprehensive (loss) income for the period

(68)

10,953

Net (loss) income for the period attributable to:

AutoCanada shareholders

(2,407)

7,807

Non-controlling interests

46

577

(2,361)

8,384

Comprehensive (loss) income for the period attributable to:

AutoCanada shareholders

(114)

10,376

Non-controlling interests

46

577

(68)

10,953

Net (loss) income per share attributable to AutoCanada shareholders:

Basic

(0.10)

0.33

Diluted

(0.10)

0.32

Weighted average shares

Basic (Note 20)

23,583,406

23,503,176

Diluted (Note 20)

23,583,406

24,625,669

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)

March 31, 2024
(Unaudited)

$

December 31, 2023

$

ASSETS

Current assets

Cash

107,912

103,146

Trade and other receivables (Note 12)

205,074

222,076

Inventories (Note 13)

1,171,378

1,154,311

Current tax recoverable

33,783

22,187

Other current assets (Note 15)

15,216

15,718

Assets held for sale (Note 11)

53,193

22,152

1,586,556

1,539,590

  Property and equipment (Note 14)

372,677

378,269

  Right-of-use assets

401,379

405,105

  Other long-term assets (Note 15)

15,479

16,708

Deferred income tax

34,080

35,444

  Derivative financial instruments (Note 18)

1,440

3,920

Intangible assets

663,096

682,137

Goodwill

98,385

98,266

3,173,092

3,159,439

LIABILITIES

Current liabilities

Trade and other payables (Note 16)

201,450

238,427

Revolving floorplan facilities (Note 17)

1,231,546

1,174,595

Vehicle repurchase obligations

1,139

1,982

Indebtedness (Note 17)

14,294

744

Lease liabilities

28,215

28,411

Redemption liabilities

22,580

22,580

  Other liabilities (Note 18)

12,620

12,325

Liabilities held for sale (Note 11)

1,086

1,512,930

1,479,064

  Long-term indebtedness (Note 17)

551,557

562,178

  Long-term lease liabilities

467,265

469,013

  Long-term redemption liabilities

25,000

25,000

  Derivative financial instruments (Note 18)

1,593

2,219

Other long-term liabilities

1,080

1,368

Deferred income tax

51,773

55,768

2,611,198

2,594,610

EQUITY

Attributable to AutoCanada shareholders

535,150

534,847

Attributable to non-controlling interests

26,744

29,982

561,894

564,829

3,173,092

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


March 31, 2024

$

March 31, 2023

$

Cash provided by (used in):

Operating activities

Net (loss) income for the period

(2,361)

8,384

Adjustments for:

Income tax (recovery) expense (Note 9)

(852)

3,427

Finance costs (Note 8) 1

36,302

35,827

Depreciation of right-of-use assets (Note 7)

8,586

8,104

Depreciation of property and equipment (Note 7)

6,276

5,623

Gain on disposal of assets, net (Note 11)

(19,267)

(5)

Share-based compensation (Note 19)

2,205

1,861

Amortization of intangible assets (Note 7)

126

122

Unrealized fair value changes on foreign exchange forward contracts 

(Note 18)

2,373

(467)

Impairment of non-financial assets (Note 11)

7,200

Net change in non-cash working capital (Note 23)

20,220

36,616

60,808

99,492

Income taxes paid

(12,567)

(6,673)

Interest paid 1

(41,686)

(38,563)

Settlement of share-based awards, net

(41)

(902)

6,514

53,354

Investing activities

Business acquisitions, net of cash acquired (Note 10)

(17,669)

Purchases of property and equipment (Note 14)

(11,278)

(25,561)

Additions to intangible assets

(341)

(426)

Adjustments to prior year business acquisitions

(14)

Proceeds on sale of property and equipment (Note 11)

41,405

377

29,772

(43,279)

Financing activities

Proceeds from indebtedness

205,822

129,144

Repayment of indebtedness

(203,214)

(125,356)

Repayment of Executive Advance 

129

Repurchase of common shares under Normal Course Issuer Bid (Note 20)

(1,944)

Shares settled from treasury, net (Note 20)

(531)

351

Payments for purchase of UD LP minority interest (Note 24)

(22,500)

Dividends paid to non-controlling interests

(4,294)

(3,830)

Repayment of loans by non-controlling interests

2,236

3,087

Principal portion of lease payments, net

(7,794)

(7,268)

(32,219)

(3,743)

Effect of exchange rate changes on cash

699

(25)

Net increase in cash

4,766

6,307

Cash at beginning of period

103,146

108,301

Cash at end of period

107,912

114,608

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, adjusted EBITDA margin, normalized operating expenses before depreciation, and normalized operating expenses before depreciation as a percentage of gross profit 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 believes adjusted EBITDA 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 believes adjusted EBITDA margin provides improved continuity with respect to the comparison of our operating performance with retaining and growing profitability as our revenue and scale increases over a period of time.

Normalized Operating Expenses Before Depreciation

Normalized operating expenses before depreciation is an indicator of a company's operating expense before depreciation over a period of time, normalized for the following items:

  • Transaction costs related to acquisitions, dispositions, and open points;
  • Software implementation costs associated with the configuration or customization of software as a service arrangement;
  • Restructuring charges relate to non-recurring organizational changes to improve the Company's profitability and overall efficiency; and
  • Share-based compensation expense.

The Company believes normalized operating expenses before depreciation provides a comparison of our operating expense normalized for transactions that are not indicative of the Company's operating expenses over time. Note the current definition of normalized operating expenses before depreciation differs from previous definitions.

Normalized Operating Expenses Before Depreciation as a Percentage of Gross Profit

Normalized operating expenses before depreciation as a percentage of gross profit is a measure of a company's normalized operating expenses before depreciation over a period of time in relation to gross profit.

The Company believes this measure provides a comparison of our operating performance normalized for transactions that are not indicative of the Company's operating expenses over 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 period ended March 31:

Three-Months Ended March 31, 2024

Three-Months Ended March 31, 2023

Canada

U.S.

Total

Canada

U.S.

Total

Net income (loss) for the period

6,681

(9,042)

(2,361)

12,428

(4,044)

8,384

Add back:

Income tax (recovery) expense

(852)

(852)

3,427

3,427

Depreciation of right of use assets

7,841

745

8,586

7,365

739

8,104

Depreciation of property and equipment

5,698

578

6,276

5,144

479

5,623

Amortization of intangible assets

126

126

Interest on long-term indebtedness

6,265

3,046

9,311

6,923

2,490

9,413

Lease liability interest

7,695

738

8,433

7,025

798

7,823

33,454

(3,935)

29,519

42,312

462

42,774

Add back:

Impairment of non-financial assets

7,200

7,200

Restructuring charges

2,000

2,000

Loss on extinguishment of debt

1,382

1,382

Unrealized fair value changes in derivative instruments

2,001

2,001

(7)

(7)

Amortization of loss on terminated hedges

817

817

Unrealized foreign exchange (gains) losses

(144)

(144)

67

67

Software implementation costs

657

657

Gain on disposal of assets

(19,267)

(19,267)

(5)

(5)

Adjusted EBITDA

25,901

(3,935)

21,966

44,566

462

45,028

The following table illustrates collision adjusted EBITDA for the three-month periods ended March 31:

Three-Months Ended March 31, 2024

Three-Months Ended March 31, 2023

Collision Operations

Canada

U.S.

Total

Canada

U.S.

Total

Period from January 1 to March 31

Net income for the period

972

972

1,057

1,057

Add back:

Income tax recovery

(10)

(10)

Depreciation of right of use assets

532

532

200

200

Depreciation of property and equipment

408

408

339

339

Interest on long-term indebtedness

Lease liability interest

773

773

994

994

Adjusted EBITDA

2,685

2,685

2,580

2,580

Adjusted EBITDA Margin

The following table illustrates segmented adjusted EBITDA margin for the three-month period ended March 31:

Three-Months Ended March 31, 2024

Three-Months Ended March 31, 2023

Canada

U.S.

Total

Canada

U.S.

Total

Adjusted EBITDA

25,901

(3,935)

21,966

44,566

462

45,028

Revenue

1,240,279

180,649

1,420,928

1,340,255

199,071

1,539,326

Adjusted EBITDA Margin

2.1 %

(2.2) %

1.5 %

3.3 %

0.2 %

2.9 %

Normalized Operating Expenses Before Depreciation and Normalized Operating Expenses Before Depreciation as a Percentage of Gross Profit

The following table illustrates segmented normalized operating expenses before depreciation and normalized operating expenses before depreciation as a percentage of gross profit, for the three-month periods ended March 31:

Three-Months Ended March 31, 2024

Three-Months Ended March 31, 2023

Canada

U.S.

Total

Canada

U.S.

Total

Operating expenses

180,056

31,608

211,664

177,396

34,205

211,601

Deduct:

Depreciation of right of use assets

(7,841)

(745)

(8,586)

(7,365)

(739)

(8,104)

Depreciation of property and equipment

(5,698)

(578)

(6,276)

(5,144)

(479)

(5,623)

Amortization of intangible assets

(126)

(126)

(122)

(122)

Operating expenses before depreciation

166,391

30,285

196,676

164,765

32,987

197,752

Normalizing Items:

Add back:

Acquisition-related costs 

(493)

(493)

(1,477)

(1,477)

Software implementation costs

(657)

(657)

Restructuring charges

(2,000)

(2,000)

Share-based compensation expense

(2,205)

(2,205)

(1,861)

(1,861)

Normalized operating expenses before depreciation

161,036

30,285

191,321

161,427

32,987

194,414

Gross profit

200,778

28,549

229,327

220,373

34,609

254,982

Normalized operating expenses before depreciation as a percentage of gross profit

80.2 %

106.1 %

83.4 %

73.3 %

95.3 %

76.2 %

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) 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.

Accordingly, these factors could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. Therefore, any such forward-looking statements are qualified in their entirety by reference to the factors discussed throughout this press release.

Details of the Company's material forward-looking statements are included in the Company's most recent Annual Information Form for the year ended December 31, 2023 (the "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.

Further, any forward-looking statement speaks only as of the date on which such statement is made, and, except as required by applicable law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for management to predict all of such factors and to assess in advance the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement.

About AutoCanada

AutoCanada is a leading North American multi-location automobile dealership group currently operating 84 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, 13 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 $1 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.

For further information: Azim Lalani, Chief Financial Officer, Phone: 780.732.3157, Email: alalani@autocan.ca