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Edmonton, T5V 0C3, AB
Canada
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EDMONTON, AB, March 26, 2026 /CNW/ - AutoCanada Inc. ("AutoCanada" or the "Company") (TSX: ACQ), a multi-location North American automobile dealership group, announced today that it has completed the sale of Kia of Lincolnwood, in Lincolnwood, Illinois. This dealership is part of the U.S. dealerships reclassified as discontinued operations at year-end 2024.
In the 12-months ended December 31, 2025, Kia of Lincolnwood generated sales of approximately $53.0 million (2024 - $58.0 million) and incurred a net loss of $1.6 million (2024 – net loss of $2.0 million).
AutoCanada received approximately $13.4 million in cash on the sale, comprised of $7.1 million for goodwill and fixed assets, excluding inventory and net working capital, and $6.3 million for real estate. Net proceeds will be directed towards reducing the outstanding balance of the Company's revolving credit facility.
The disposition of Kia of Lincolnwood represents continued progress in the Company's previously announced plan to exit its U.S. Operations segment and strengthen its balance sheet. Since the reclassification of the U.S. segment as discontinued operations at the end of 2024, the Company has generated total gross proceeds net of working capital of approximately $62.4 million from U.S. asset sales and continues to expect total gross proceeds at the high end of its previously communicated range of $115 million to $130 million. The U.S. dealerships had a net loss from discontinued operations of $103.4 million in 2024.
In connection with this process, AutoCanada has received consent from its lending syndicate to amend the Total Funded Debt to Bank EBITDA1 covenant under its credit facility. The maximum permitted ratio has been increased from 4.0x to 4.5x through June 30, 2026, providing the Company with additional financial flexibility as it continues to execute on the divestiture of its remaining U.S. dealerships. This amendment reflects the ongoing support of the Company's lending syndicate as the Company advances its strategic initiatives.
All dollar amounts in this press release are in Canadian dollars.
Forward Looking Statements
Certain statements contained in this press release are forward-looking statements and information (collectively "forward-looking statements"), within the meaning of 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 all 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, the expected aggregate proceeds from the U.S. dealership divestitures, the completion and the anticipated timing of completion of the U.S. dealership disposition transactions, engagement in selling the remaining dealerships of the U.S. Operations segment, and the impact of the U.S. dealership divestitures on the Company's leverage ratio.
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 could prove to be incorrect or inaccurate.
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 and financial outlook 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 or financial outlook. These risks and uncertainties include risks relating to failure to realize expected cost-savings, 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 (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 and financial outlook 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's Canadian segment, which is classified as continuing operations, consists of 64 franchised dealerships across Canada, representing 23 automotive brands in eight provinces. AutoCanada currently sells Acura, Audi, BMW, Buick, Cadillac, Chevrolet, Chrysler, Dodge, Ford, GMC, Honda, Hyundai, Infiniti, Jeep, Kia, Mazda, Mercedes-Benz, MINI, Nissan, Porsche, Ram, Subaru, and Volkswagen vehicles. In 2025, its Canadian dealerships sold approximately 71,000 new and used retail vehicles.
AutoCanada's Canadian segment also operates 33 collision centres ("Collision Centres"), supported by 26 Original Equipment Manufacturer ("OEM") certifications spanning 37 vehicle brands.
AutoCanada's U.S. segment is classified as discontinued operations as the Company progresses the sale of its U.S. dealership portfolio. This portfolio consists of 11 franchised dealerships representing eight brands in Illinois, USA, and in 2025 sold approximately 8,000 new and used retail vehicles.
Additional Information
Additional information about AutoCanada is available at the Company's website and on the SEDAR+ website at www.sedarplus.ca.
_________________________________ | |
1 This press release contains "FINANCIAL COVENANTS". Section 6. LIQUIDITY AND CAPITAL RESOURCES of the Company's Management's Discussion & Analysis for the three-month period and year ended December 31, 2025 ("MD&A") is hereby incorporated by reference for further information regarding the composition of these financial covenants (accessible through the SEDAR website at investors.autocan.ca or on www.sedarplus.ca). |
SOURCE AutoCanada Inc.
- Revenue from continuing operations was $1,116.6 million as compared to $1,265.8 million in the prior year, a decrease of $149.2 million
- Net loss for the period from total operations was $(14.6) million as compared to $(38.4) million in the prior year
- Net (loss) income from continuing operations was $(2.3) million as compared to $9.8 million in the prior year
- Net loss from discontinued operations was $(12.2) million as compared to net loss of $(48.2) million in the prior year
- Diluted net (loss) income per share from continuing operations of $(0.06) as compared to $0.45 in the prior year
- Adjusted EBITDA1 from total operations was $26.3 million as compared to $47.1 million in the prior year
- Adjusted EBITDA from continuing operations was $32.7 million as compared to $54.4 million in the prior year
- Adjusted EBITDA from discontinued operations was $(6.4) million as compared to $(7.3) million in the prior year
- Total Net Funded Debt to Bank EBITDA Ratio2 Increased from 3.40x as at September 30, 2025 to 3.44x as at December 31, 2025
EDMONTON, AB, March 18, 2026 /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 December 31, 2025.
Samuel Cochrane, CEO, stated, "Fourth quarter performance was shaped by a more challenging market backdrop. Demand was affected by prior-period pull-forward activity, including the sunset of Canadian EV tax credits that benefited the fourth quarter of 2024 and tariff-related policy changes that drove stronger demand in the first half of 2025. At the same time, affordability pressures persisted and industry gross profit per unit declined as vehicle availability improved and pricing normalized. Industry wide performance was impacted in the fourth quarter by these dynamics, which have also created tough comparisons as we entered 2026.
Against that backdrop, AutoCanada navigated a period of significant internal change as we progressed through a leadership transition while simultaneously completing our cost transformation. Over the course of 2025, we achieved approximately $115 million in annualized run-rate cost savings.
The pace and scope of the transformation created temporary operational disruption at the store level in the second half of 2025, impacting sales productivity and performance relative to the broader market. We have identified the issues, put new operating leadership in place, and are focused on closing the gap to market through 2026.
Looking ahead, our priorities for 2026 are clear: stabilizing and improving our automotive retail operations, continuing to expand our collision platform, strengthening the support our head office provides to dealerships and collision centres, recruiting and retaining a high-performing team, and maintaining a lean and efficient cost structure.
I want to thank our employees across the organization for their commitment and resilience through this period of change, and our OEM partners for their continued collaboration and support. Together, we are building a stronger and more focused AutoCanada, and we are confident in the path ahead."
1 | See "NON-GAAP AND OTHER FINANCIAL MEASURES" below. |
2 | This press release contains "SUPPLEMENTARY FINANCIAL MEASURES" and "FINANCIAL COVENANTS". Section 13. NON-GAAP AND OTHER FINANCIAL MEASURES and Section 6. LIQUIDITY AND CAPITAL RESOURCES of the Company's Management's Discussion & Analysis for the three-month period and year ended December 31, 2025 ("MD&A") is hereby incorporated by reference for further information regarding the composition of these measures and financial covenants (accessible through the SEDAR website at investors.autocan.ca or on www.sedarplus.ca). |
Fourth Quarter Key Highlights and Recent Developments
Three-Months Ended December 31 | |||
Continuing Operations Financial Results | 2025 | 2024 | % Change |
Revenue | 1,116,564 | 1,265,837 | (11.8) % |
Same store revenue | 1,114,883 | 1,230,442 | (9.4) % |
Gross profit | 173,970 | 216,118 | (19.5) % |
Gross profit percentage 2 | 15.6 % | 17.1 % | (1.5) ppts |
Operating expenses ("Opex") | 150,212 | 178,675 | (15.9) % |
Net (loss) income | (2,331) | 9,847 | (123.7) % |
Basic net (loss) income per share attributable to AutoCanada shareholders | (0.06) | 0.46 | (113.0) % |
Diluted net (loss) income per share attributable to AutoCanada shareholders | (0.06) | 0.45 | (113.3) % |
Adjusted EBITDA1 | 32,703 | 54,379 | (39.9) % |
Adjusted EBITDA margin 1 | 2.9 % | 4.3 % | (1.4) ppts |
New retail vehicles sold (units) 2 | 7,028 | 8,544 | (17.7) % |
Used retail vehicles sold (units) 2 | 8,741 | 10,585 | (17.4) % |
New vehicle gross profit per retail unit 2 | 3,748 | 4,627 | (19.0) % |
Used vehicle gross profit per retail unit 2 | 442 | 1,836 | (75.9) % |
Parts and service ("P&S") gross profit | 69,626 | 76,843 | (9.4) % |
Collision repair ("Collision") gross profit | 18,136 | 17,242 | 5.2 % |
Finance, insurance and other ("F&I") gross profit per retail unit average 2 | 3,451 | 3,305 | 4.4 % |
Operating expenses before depreciation 2 | 137,245 | 164,078 | (16.4) % |
Operating expenses before depreciation as a % of gross profit 2 | 78.9 % | 75.9 % | 3.0 ppts |
Normalized opex before depreciation 1 | 131,490 | 151,559 | (13.2) % |
Normalized opex before depreciation as a percentage of gross profit (%) 1 | 75.6 % | 70.1 % | 5.5 ppts |
Floorplan financing expense | 8,331 | 13,055 | (36.2) % |
3 Comparative period revised to reflect current period presentation for reclassification of discontinued operations. |
Revenue decreased by (11.8)% in the fourth quarter of 2025 compared to the fourth quarter of 2024, primarily due to decreases in new vehicle sales, used vehicle sales, parts and service, and F&I.
Gross profit decreased by (19.5)% to $174.0 million in the fourth quarter of 2025 compared to the fourth quarter of 2024, driven by decreases in new vehicle, used vehicle, parts and service, and F&I gross profits. This decline is partially offset by an increase in gross profit from collision repair services.
Operating expenses before depreciation2 decreased by (16.4)% to $137.2 million in the fourth quarter of 2025 compared to the fourth quarter of 2024. Normalized operating expenses before depreciation1 decreased by (13.2)% to $131.5 million, and included the normalization of $4.9 million of restructuring charges related to the initiatives targeting $115.0 million in annual run-rate cost savings.
Floorplan financing expenses decreased (36.2)% to $8.3 million due to reduced new and used vehicle inventory levels and lower interest rates.
Net income for the period decreased by (123.7)% to a net loss of $(2.3) million in the fourth quarter of 2025 compared to $9.8 million in the fourth quarter of 2024, as a result of items noted above, as well as higher interest rate swap costs, unrealized FX losses, and income taxes, partially offset by an increase in fair value change in interest swaps and gain on settlement of redemption liability.
Adjusted EBITDA1 decreased by (39.9)% to $32.7 million in the fourth quarter of 2025 compared to the fourth quarter of 2024, while adjusted EBITDA margin1 decreased by (1.4) percentage points ("ppts") to 2.9%. The decrease in margin was driven by decreases in gross profit, partially offset by lower operating expenses before depreciation2 and lower floorplan financing expenses as noted above.
Collision Operations Highlights
Three-Months Ended December 31 | |||
Collision Financial Results | 2025 | 2024 | % Change |
Revenue | 35,366 | 36,262 | (2.5) % |
Gross profit | 18,136 | 17,242 | 5.2 % |
Gross profit percentage2 | 51.3 % | 47.5 % | 3.8 ppts |
Adjusted EBITDA1 | 5,477 | 5,949 | (7.9) % |
Same store revenue2 | 33,686 | 36,262 | (7.1) % |
Same store gross profit2 | 17,576 | 17,241 | 1.9 % |
Same store gross profit percentage2 | 52.2 % | 47.5 % | 4.7 ppts |
Revenue decreased as a result of normalization of paintless dent repair following a severe hail event in 2024 and this was partially offset by increased revenue from traditional collision business.
Gross profit and gross profit percentage2 increased driven by strong customer demand for traditional collision repair services, and additional Original Equipment Manufacturer ("OEM") certifications.
Trends in the same store revenue2, gross profit and gross profit percentage2 are consistent with overall business performance, with the reasons noted above.
Adjusted EBITDA1 decreased as a result of increased operating expenses which relate to investments in operational support functions.
Other Recent Developments
During the quarter:
- On October 3, 2025, the Company completed the acquisition of Doug's Place Strathcona, a collision and refinish repair facility located in Edmonton, Alberta, which is included within the Canadian Operations segment.
- On October 28, 2025, the Company announced the appointment of AutoCanada's Chief Financial Officer to the role of Interim Chief Executive Officer. Concurrently, the Executive Chair transitioned out of his role as AutoCanada's Executive Chair and as a director of the Company. In addition, the Company's Chief Strategy Officer & General Counsel transitioned out of his respective role at the end of 2025.
- On November 13, 2025, the Company announced that AutoCanada's Chief Operating Officer and President, North American Operations will be transitioning out of their respective roles. Mikel Pestrak was promoted to Interim President, Dealership Operations. Art Crawford was promoted to President, Collision Operations. Cynthia Hill was promoted to Executive Vice President, General Counsel and Corporate Secretary.
- On December 15, 2025, the Company announced the appointment of Fade Bouras as Chief Operating Officer, effective January 5, 2026, and John North to its Board of Directors, effective immediately.
- On December 15, 2025, the Company announced that the Toronto Stock Exchange ("TSX") has accepted the Company's notice of intention to commence a normal course issuer bid ("NCIB") for its common shares. Under the NCIB, the Company may purchase for cancellation up to 1,177,539 common shares, representing approximately 10% of the public float of 11,775,396 of the Company's issued and outstanding common shares on December 15, 2025. The NCIB will commence on December 18, 2025 and will terminate on the earlier of December 17, 2026, the date the Company acquires the maximum number of common shares under the NCIB, or such earlier date as the Company may determine.
After the quarter:
- On January 20, 2026, the Company completed the acquisition of Modern Autobody, a single-location collision and refinish repair facility located in Edmonton, Alberta, which is included within the Canadian Operations segment.
- On January 27, 2026, the Company sold substantially all of the operating assets of Toyota of Lincoln Park, located in Chicago, Illinois, for cash consideration of $11.2 million plus closing adjustments. Toyota of Lincoln Park was previously presented as held for sale in the U.S. Operations segment.
- On February 18, 2026, the Company announced that its Board of Directors has appointed Samuel Cochrane as Chief Executive Officer, effective immediately. Mr. Cochrane will also serve as Interim Chief Financial Officer while the Company initiates a search for a permanent Chief Financial Officer.
Conference Call
A conference call to discuss the results for the three months ended December 31, 2025 will be held on March 18, 2026 at 4:00 pm Mountain (6:00 pm Eastern). To participate in the conference call, please dial 1-888-510-2154 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/2025-q4-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 Consolidated Financial Statements and Management's Discussion and Analysis ("MD&A") for the three-month period and year ended December 31, 2025, which can be found on the Company's website at investors.autocan.ca or on www.sedarplus.ca.
All comparisons presented in this press release are between the three-month period ended December 31, 2025 and the three-month period ended December 31, 2024, 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" and "FINANCIAL COVENANTS". Section 13. NON-GAAP AND OTHER FINANCIAL MEASURES and Section 6. LIQUIDITY AND CAPITAL RESOURCES of the Company's Management's Discussion & Analysis for the three-month period and year ended December 31, 2025 ("MD&A") is hereby incorporated by reference for further information regarding the composition of these measures and financial covenants (accessible through the SEDAR website at investors.autocan.ca or on www.sedarplus.ca). |
Consolidated Statements of Comprehensive Income (Loss)
For the Years Ended
(in thousands of Canadian dollars except for share and per share amounts)
December 31, $ | December 31, Revised (1) $ | |||
Continuing operations | ||||
Revenue (Note 6) | 4,896,320 | 5,271,549 | ||
Cost of sales (Note 7) | (4,111,536) | (4,396,109) | ||
Gross profit | 784,784 | 875,440 | ||
Operating expenses (Note 8) | (657,632) | (720,408) | ||
Operating profit before other income and expense | 127,152 | 155,032 | ||
Lease and other income, net (Note 10) | 6,540 | 7,783 | ||
Gain on disposal of assets, net (Note 10) | 15,547 | 31,881 | ||
Net impairment losses on trade and other receivables | (2,107) | (8,737) | ||
Impairment of non-financial assets (Note 20, 24) | (11,314) | (3,412) | ||
Operating profit | 135,818 | 182,547 | ||
Finance costs (Note 11) | (101,734) | (128,636) | ||
Finance income (Note 11) | 1,192 | 2,674 | ||
Gain (loss) on redemption liabilities (Note 14) | 3,920 | (486) | ||
Other (losses) gains, net | (3,689) | 846 | ||
Income for the year before tax from continuing operations | 35,507 | 56,945 | ||
Income tax expense (Note 12) | 12,121 | 8,035 | ||
Net income for the year from continuing operations | 23,386 | 48,910 | ||
Net loss for the year from discontinued operations (Note 18) | (5,447) | (115,658) | ||
Net income (loss) for the year | 17,939 | (66,748) | ||
Other comprehensive income (loss) | ||||
Items that may be reclassified to profit or loss | ||||
Foreign operations currency translation (Note 18) | (6,131) | 8,032 | ||
Reclassification of cumulative foreign operations currency translation on discontinued operations | (4,908) | -- | ||
Change in fair value of cash flow hedge (Note 25) | -- | (206) | ||
Income tax relating to these items (Note 12) | (604) | 51 | ||
Other comprehensive (loss) income for the year, net of tax | (11,643) | 7,877 | ||
Comprehensive income (loss) for the year | 6,296 | (58,871) | ||
Net income (loss) for the year attributable to: | ||||
AutoCanada shareholders | 16,034 | (68,233) | ||
Non-controlling interests | 1,905 | 1,485 | ||
17,939 | (66,748) | |||
Net income (loss) for the year attributable to AutoCanada shareholders arises from: | ||||
Continuing operations | 21,481 | 47,425 | ||
Discontinued operations | (5,447) | (115,658) | ||
16,034 | (68,233) | |||
Comprehensive income (loss) for the year attributable to: | ||||
AutoCanada shareholders | 4,391 | (60,356) | ||
Non-controlling interests | 1,905 | 1,485 | ||
6,296 | (58,871) | |||
Comprehensive income (loss) for the year attributable to AutoCanada shareholders arises from: | ||||
Continuing operations | 16,552 | 47,270 | ||
Discontinued operations | (12,161) | (107,626) | ||
4,391 | (60,356) |
Consolidated Statements of Comprehensive (Loss) Income (continued)
For the Years Ended
(in thousands of Canadian dollars except for share and per share amounts)
December 31, $ | December 31, Revised (1) $ | |
Net income (loss) per share attributable to AutoCanada shareholders: | ||
Basic from continuing operations | 0.93 | 2.03 |
Basic from discontinued operations | (0.24) | (4.96) |
Basic | 0.69 | (2.93) |
Diluted from continuing operations | 0.89 | 1.96 |
Diluted from discontinued operations | (0.23) | (4.79) |
Diluted | 0.66 | (2.83) |
Weighted average shares | ||
Basic (Note 30) | 23,103,884 | 23,316,008 |
Diluted (Note 30) | 24,220,047 | 24,137,069 |
1 Comparative period revised to reflect current period presentation. See Note 18 - "Discontinued Operations" for additional information |
The accompanying notes are an integral part of these condensed interim consolidated financial statements and can be found on the Company's website at investors.autocan.ca or on www.sedarplus.ca. |
Consolidated Statements of Financial Position
(in thousands of Canadian dollars)
December 31, 2025 $ | December 31, 2024 $ | |
ASSETS | ||
Current assets | ||
Cash | 87,963 | 67,343 |
Trade and other receivables (Note 15) | 133,164 | 173,568 |
Inventories (Note 16) | 895,928 | 947,278 |
Current tax recoverable | 12,297 | 10,205 |
Other current assets (Note 21) | 16,790 | 11,993 |
Derivative financial instruments (Note 25) | 911 | 376 |
1,147,053 | 1,210,763 | |
Assets held for sale (Note 17, 18) | 228,259 | 332,693 |
Total current assets | 1,375,312 | 1,543,456 |
Property and equipment (Note 19) | 301,385 | 312,014 |
Right-of-use assets (Note 24) | 337,936 | 389,958 |
Other long-term assets (Note 21) | 15,821 | 16,501 |
Deferred income tax (Note 12) | 16,772 | 18,840 |
Intangible assets (Note 20) | 607,765 | 630,467 |
Goodwill (Note 20) | 91,905 | 94,592 |
Total assets | 2,746,896 | 3,005,828 |
LIABILITIES | ||
Current liabilities | ||
Trade and other payables (Note 22) | 149,517 | 177,473 |
Revolving floorplan facilities (Note 23) | 962,616 | 1,010,579 |
Current tax payable | 3,602 | 3,766 |
Vehicle repurchase obligations (Note 26) | 2,582 | 3,705 |
Indebtedness (Note 23) | 1,688 | 24,108 |
Lease liabilities (Note 24) | 25,872 | 35,780 |
Redemption liabilities (Note 14) | 19,146 | 23,066 |
Equity forward liabilities (Note 27) | 22,970 | 11,063 |
Derivative financial instruments (Note 25) | 2,109 | 1,741 |
1,190,102 | 1,291,281 | |
Liabilities directly associated with assets held for sale (Note 18) | 98,357 | 201,966 |
Total current liabilities | 1,288,459 | 1,493,247 |
Long-term indebtedness (Note 23) | 513,021 | 517,543 |
Long-term lease liabilities (Note 24) | 383,469 | 421,392 |
Long-term redemption liabilities (Note 14) | 25,000 | 25,000 |
Derivative financial instruments (Note 25) | 5,147 | 8,705 |
Deferred income tax (Note 12) | 49,824 | 44,613 |
Total liabilities | 2,264,920 | 2,510,500 |
EQUITY | ||
Attributable to AutoCanada shareholders | 460,477 | 468,027 |
Attributable to non-controlling interests | 21,499 | 27,301 |
Total equity | 481,976 | 495,328 |
2,746,896 | 3,005,828 |
The accompanying notes are an integral part of these condensed interim consolidated financial statements and can be found on the Company's website at investors.autocan.ca or on www.sedarplus.ca. |
Consolidated Statements of Cash Flows
For the Years Ended
(in thousands of Canadian dollars)
December 31, $ | December 31, $ | |
Cash provided by (used in): Operating activities | ||
Net income (loss) for the year | 17,939 | (66,748) |
Adjustments for: | ||
Income tax expense (Note 12, 18) | 12,742 | 21,733 |
Finance costs (Note 11, 18) | 118,339 | 155,598 |
Depreciation of right-of-use assets (Note 24) | 32,618 | 35,919 |
Depreciation of property and equipment (Note 19) | 20,100 | 25,843 |
Amortization of intangible assets (Note 20) | 733 | 503 |
Gain on disposal of assets, net (Note 10, 18) | (22,839) | (29,781) |
Share-based compensation (Note 29) | 8,613 | 8,033 |
Unrealized fair value changes on foreign exchange forward contracts (Note 25) | (2,652) | 3,853 |
Revaluation of redemption liabilities (Note 14) | (3,920) | 486 |
Net impairment of non-financial assets (Note 18, 20) | 3,808 | 21,058 |
Net change in non-cash working capital (Note 36) | (34,068) | 1,325 |
151,413 | 177,822 | |
Income taxes paid | (8,322) | (537) |
Interest paid | (117,462) | (144,412) |
Settlement of share-based awards, net | (2,587) | (1,247) |
23,042 | 31,626 | |
Investing activities | ||
Business acquisitions, net of cash acquired (Note 13) | (2,174) | (20,197) |
Purchases of property and equipment | (26,229) | (33,282) |
Additions to intangible assets (Note 20) | (648) | (790) |
Settlement of prior year business acquisitions | (46) | (491) |
Proceeds on sale of property and equipment | 10,433 | 63,123 |
Proceeds on divestiture of dealership (Note 34) | 44,148 | 59,497 |
Proceeds on termination of loan agreement with subsidiary (Note 34) | 30,107 | -- |
Proceeds on franchise termination (Note 34) | 894 | -- |
56,485 | 67,860 | |
Financing activities | ||
Proceeds from indebtedness (Note 23) | 760,680 | 635,046 |
Repayment of indebtedness (Note 23) | (789,539) | (657,730) |
Repurchase of common shares under Normal Course Issuer Bid (Note 30) | -- | (9,942) |
Payments for purchase of Used Digital Division minority interest | -- | (22,500) |
Treasury shares acquired (Note 30) | (5,178) | (1,625) |
Shares settled from treasury (Note 30) | 2,522 | 1,629 |
Acquisition of non-controlling interests | (8,490) | (5,486) |
Repayment of loan by non-controlling interests | 4,477 | 2,961 |
Dividends paid to non-controlling interests | (3,694) | (4,294) |
Principal portion of lease payments | (31,374) | (31,984) |
(70,596) | (93,925) | |
Effect of exchange rate changes on cash | (1,217) | (1,359) |
Net increase in cash | 7,714 | 4,202 |
Cash at beginning of year per balance sheet | 67,343 | 103,146 |
Cash at the beginning of year included in discontinued operations (Note 18) | 40,005 | -- |
Cash at end of year | 115,062 | 107,348 |
Included in cash per balance sheet | 87,963 | 67,343 |
Included in the assets of the discontinued operations (Note 18) | 27,099 | 40,005 |
The accompanying notes are an integral part of these condensed interim consolidated financial statements and can be found on the Company's website at investors.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 resolution of lawsuits and legal claims, and share-based compensation amounts attributable to certain equity issuances as part of the transformation plan).
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.
Normalized Operating Expenses ("Opex") 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;
- Management transition costs; and
- Share-based compensation expense.
The Company considers this measure meaningful as it provides a comparison of our operating expense normalized for transactions that are not indicative of the Company's operating expenses over time.
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 considers this measure meaningful as it provides a comparison of our operating performance, normalized for transactions that are not indicative of the Company's operating expenses, with our growing profitability as our gross profit 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 December 31:
Three-Months Ended December | Three-Months Ended December Revised 1 | ||||||
Canada | U.S. | Total | Canada | U.S. | Total | ||
Period from October 1 to December 31 | |||||||
Net (loss) income for the period | (2,227) | (12,328) | (14,555) | 7,105 | (45,471) | (38,366) | |
Add back (deduct): | |||||||
Income tax expense | 3,209 | 621 | 3,830 | 1,173 | 94 | 1,267 | |
Depreciation of property and equipment | 4,571 | 4 | 4,575 | 6,084 | 685 | 6,769 | |
Interest on long-term indebtedness | 7,746 | 831 | 8,577 | 7,509 | 3,141 | 10,650 | |
Depreciation of right of use assets | 8,113 | -- | 8,113 | 8,536 | 1,008 | 9,544 | |
Amortization of intangible assets | 279 | -- | 279 | 126 | -- | 126 | |
Lease liability interest | 7,486 | 1,672 | 9,158 | 8,127 | 960 | 9,087 | |
Impairment (recovery) of non-financial assets | 4,919 | 1,486 | 6,405 | (3,240) | 5,192 | 1,952 | |
(Gain) loss on redemption liabilities | (2,950) | -- | (2,950) | 1,113 | -- | 1,113 | |
Canadian franchise dealership and corporate restructuring charges | 4,899 | -- | 4,899 | 9,913 | -- | 9,913 | |
FTC settlement | -- | -- | -- | -- | 27,396 | 27,396 | |
Unrealized fair value changes on derivative instruments | (4,343) | -- | (4,343) | 5,491 | -- | 5,491 | |
Unrealized foreign exchange losses (gains) | 2,092 | -- | 2,092 | (175) | -- | (175) | |
Software implementation costs | 330 | -- | 330 | 531 | -- | 531 | |
Cybersecurity incident costs | 468 | -- | 468 | 567 | -- | 567 | |
RightRide restructuring charges | -- | -- | -- | 995 | -- | 995 | |
Write-down associated with wholesale transactions | -- | -- | -- | 7,592 | -- | 7,592 | |
Acquisition related costs | 137 | 1,199 | 1,336 | -- | -- | -- | |
Share-based compensation for transformation plan awards | (153) | -- | (153) | -- | -- | -- | |
Realized foreign exchange gain on divested dealerships | -- | 38 | 38 | -- | -- | -- | |
Gain on disposal of assets | (1,725) | (25) | (1,750) | (7,352) | -- | (7,352) | |
Adjusted EBITDA | 32,851 | (6,502) | 26,349 | 54,095 | (6,995) | 47,100 | |
Adjusted EBITDA from discontinued operations | 87 | 6,267 | 6,354 | 284 | 6,995 | 7,279 | |
Adjusted EBITDA from continuing operations | 32,938 | (235) | 32,703 | 54,379 | -- | 54,379 | |
1 Comparative period revised to reflect current period presentation for reclassification of discontinued operations. |
The following table illustrates segmented collision adjusted EBITDA from continuing operations for the three-months ended December 31. There is no discontinued operation in Collision Operations.
Three-Months Ended December | Three-Months Ended December | ||||||
Collision Operations | Canada | U.S. | Total | Canada | U.S. | Total | |
Period from October 1 to December 31 | |||||||
Net income (loss) for the period | 913 | (236) | 677 | 4,374 | -- | 4,374 | |
Add back (deduct): | |||||||
Income tax expense | 2,686 | -- | 2,686 | (448) | -- | (448) | |
Depreciation of right of use assets | 635 | -- | 635 | 679 | -- | 679 | |
Depreciation of property and equipment | 598 | 4 | 602 | 493 | -- | 493 | |
Amortization of intangible assets | 11 | -- | 11 | -- | -- | -- | |
Lease liability interest | 860 | -- | 860 | 851 | -- | 851 | |
Loss on disposal of assets | 6 | -- | 6 | -- | -- | -- | |
Adjusted EBITDA | 5,709 | (232) | 5,477 | 5,949 | -- | 5,949 | |
Adjusted EBITDA Margin
The following table illustrates segmented adjusted EBITDA margin from continuing operations for the three-month periods ended December 31:
Three-Months Ended December 31, | Three-Months Ended December 31, 2024 Revised 1 | ||||||
Canada | U.S. | Total | Canada | U.S. | Total | ||
Adjusted EBITDA | 32,938 | (235) | 32,703 | 54,379 | -- | 54,379 | |
Revenue | 1,116,291 | 273 | 1,116,564 | 1,265,837 | -- | 1,265,837 | |
Adjusted EBITDA Margin | 3.0 % | (86.1) % | 2.9 % | 4.3 % | -- % | 4.3 % | |
1 Comparative period revised to reflect current period presentation for reclassification of discontinued operations. |
Normalized Operating Expenses Before Depreciation and Normalized Operating Expenses Before Depreciation as a Percentage of Gross Profit
The following tables illustrate segmented normalized opex before depreciation and normalized opex before depreciation as a percentage of gross profit from continuing operations for the three-month periods ended December 31:
Three-Months Ended December | Three-Months Ended December Revised 1 | ||||||
Canada | U.S. | Total | Canada | U.S. | Total | ||
Operating expenses before depreciation | 136,912 | 333 | 137,245 | 164,078 | -- | 164,078 | |
Normalizing Items: | |||||||
Deduct: | |||||||
Acquisition-related costs | (137) | -- | (137) | (316) | -- | (316) | |
Software implementation costs | (330) | -- | (330) | (531) | -- | (531) | |
Canadian franchise dealership and corporate | (4,899) | -- | (4,899) | (9,913) | -- | (9,913) | |
Share-based compensation expense | (389) | -- | (389) | (1,759) | -- | (1,759) | |
Normalized Opex before depreciation | 131,157 | 333 | 131,490 | 151,559 | -- | 151,559 | |
Gross profit | 173,877 | 93 | 173,970 | 216,118 | -- | 216,118 | |
Normalized Opex Before Depreciation as a | 75.4 % | 358.1 % | 75.6 % | 70.1 % | -- % | 70.1 % | |
1 Comparative period revised to reflect current period presentation for reclassification of discontinued operations. |
Forward Looking Statements
Certain statements contained in this press release are forward-looking statements and information (collectively "forward-looking statements"), within the meaning of 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 all 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, expected run-rate operational expense savings from the implementation of the ACX Operating Method, the expected aggregate proceeds from the U.S. dealership divestitures, the completion and the anticipated timing of completion of the U.S. dealership disposition transactions, engagement in selling the remaining dealerships of the U.S. Operations segment, the impact of the U.S. dealership divestitures on the Company's leverage ratio, the anticipated timing of restoring Canadian dealership performance to levels more consistent with industry benchmarks, the impact of restoring Canadian dealership performance to levels more consistent with industry benchmarks on the Company's leverage ratio, and the expected accretive growth of collision operations.
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.
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 and financial outlook 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 or financial outlook. These risks and uncertainties include risks relating to failure to realize expected cost-savings, 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 (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 and financial outlook 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's Canadian Operations segment operates 64 franchised dealerships in Canada, comprised of 23 automotive brands across 8 provinces as well as three independent used dealerships ("Used Vehicle Operations"). AutoCanada currently sells Acura, Audi, BMW, Buick, Cadillac, Chevrolet, Chrysler, Dodge, Ford, GMC, Honda, Hyundai, Infiniti, Jeep, Kia, Mazda, Mercedes-Benz, MINI, Nissan, Porsche, Ram, Subaru, and Volkswagen vehicles. In 2025, our Canadian dealerships sold approximately 71,000 new and used retail vehicles.
In addition, AutoCanada's Canadian Operations segment operates 33 collision centres ("Collision Centres"), supported by 26 Original Equipment Manufacturer ("OEM") certifications covering 37 vehicle brands. The Company's collision platform enables customer retention across multiple touchpoints within the automotive ownership lifecycle.
AutoCanada's U.S. Operations segment, operating as Leader Automotive Group ("Leader"), operates 12 franchised dealerships comprised of 9 brands, in Illinois, USA. Leader currently sells Audi, Hyundai, Kia, Lincoln, Mercedes-Benz, Porsche, Subaru, Toyota, and Volkswagen branded vehicles. In 2025, our U.S. dealerships sold approximately 8,000 new and used retail vehicles.
Additional Information
Additional information about AutoCanada is available at the Company's website at www.autocan.ca and on the SEDAR+ website at www.sedarplus.ca.
SOURCE AutoCanada Inc.
