AUTOCANADA ANNOUNCES FOURTH QUARTER RESULTS
Revenue from continuing operations was $1,261.9 million as compared to $1,277.8 million in the prior year, a decrease of $(15.9) million
Net loss for the period from total operations was $(38.4) million as compared to a net loss of $(22.6) million in the prior year
Net income (loss) from continuing operations was $7.1 million as compared to a net loss of $(16.0) million in the prior year
Net loss from discontinued operations was $(45.5) million as compared to a loss of $(6.6) million in the prior year
Diluted net income (loss) per share from continuing operations was $0.33 as compared to $(0.54) in the prior year
Adjusted EBITDA1 on a total operations basis1 was $47.1 million as compared to $46.4 million in the prior year
Adjusted EBITDA from continuing operations1 was $54.1 million as compared to $47.9 million in the prior year
Adjusted EBITDA from discontinued operations1 was a loss of $(7.0) million as compared to a loss of $(1.5) million in the prior year
EDMONTON, AB, March 19, 2025 /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, 2024.
Paul Antony, Executive Chairman, stated, "In Q4 2024, lower interest rates and OEM incentives drove strong new light vehicle demand in Canada, particularly in October and November, contributing to a 12.8% year-over-year increase in Adjusted EBITDA from our Canadian operations. A major milestone was the completion of our Strategic Review, which resulted in the sale of three non-core Stellantis dealerships for $59.5 million, the closure of all RightRide locations, eliminating an $11 million annual Adjusted EBITDA loss, and the decision to divest our U.S. business, which recorded a $24.2 million Adjusted EBITDA loss in 2024 and is now classified as a Discontinued Operation while we seek buyers. With this review behind us, we are now fully focused on executing our Operational Transformation Plan.
Launched in Q3 2024, this plan targets $100 million in annual run-rate cost savings by the end of 2025, as compared to trailing-twelve-months Q2 2024 operating expenses excluding depreciation and amortization. It began with heightened restrictions on discretionary spending and hiring in September and expanded in Q4 with the introduction of the ACX Operating Method at four pilot dealerships. The plan is progressing as expected, with savings driven by four key areas: $63 million from standardizing dealership operations, $23 million from enhanced cost controls, $9 million from improved inventory management, and $5 million from centralizing administrative functions. As of December 31st, we have already realized $9 million in permanent annual run-rate savings."
Paul Antony concluded, "So far in 2025, the Canadian new light vehicle market has cooled, and while industry forecasts project flat sales this year, we are navigating a complex environment. The North American and Canadian automotive markets remain highly vulnerable to U.S. tariffs, posing serious risks to market stability and demand. Despite these challenges, our transformation plan remains on track, and we are committed to operational excellence, cost discipline, deleveraging, and long-term value creation. I want to thank our team for their dedication and our investors and OEM partners for their ongoing support."
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 year ended December 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).
Fourth Quarter Key Highlights and Recent Developments
Three-Months Ended December 31
Continuing Operations Financial Results
2024
2023
% Change
Revenue
1,261,921
1,277,752
(1.2) %
Same store revenue
1,208,119
1,216,227
(0.7) %
Gross profit
216,930
225,134
(3.6) %
Gross profit percentage 2
17.2 %
17.6 %
(0.4) ppts
Operating expenses
180,894
217,474
(16.8) %
Net income (loss)
7,105
(16,020)
144.4 %
Basic net income (loss) per share attributable to AutoCanada shareholders
0.34
(0.56)
160.7 %
Diluted net income (loss) per share attributable to AutoCanada shareholders
0.33
(0.54)
161.1 %
Adjusted EBITDA
54,095
47,945
12.8 %
Adjusted EBITDA margin 1
4.3 %
3.8 %
0.5 ppts
New retail vehicles sold (units) 2
8,544
8,161
4.7 %
Used retail vehicles sold (units) 2
10,813
11,805
(8.4) %
New vehicle gross profit per retail unit 2
4,627
5,401
(14.3) %
Used vehicle gross profit per retail unit 2
1,842
1,948
(5.4) %
Parts and service ("P&S") gross profit
76,843
76,063
1.0 %
Collision repair ("Collision") gross profit
17,242
17,312
(0.4) %
Finance, insurance and other ("F&I") gross profit per retail unit average 2
3,295
3,234
1.9 %
Operating expenses before depreciation 2
166,148
203,616
(18.4) %
Operating expenses before depreciation as a % of gross profit 2
76.6 %
90.4 %
(13.9) ppts
Floorplan financing expense
13,110
17,023
(23.0) %
Consolidated revenue decreased due to weaker used vehicle performance. Consolidated gross profit decreased due to declining new vehicle gross profit per retail unit2 as seen industry wide, as the new vehicle market normalizes, and declining used vehicle sales as a result of current used vehicle market dynamics resulting in the prioritization of lower priced vehicles and lower number of used retail vehicles2 sold, partially offset by positive contributions from P&S, and recent acquisitions.
Operating expenses before depreciation2 declined due to one-time $36.8 million share-based compensation expenses related to the consolidation of ownership of the Used Digital Division in the prior year, and lower variable employee costs as a result of weaker gross profit, greater restrictions on hiring and discretionary spend, and the ongoing initiative targeting $100 million in annual run-rate cost savings by the end of 2025, partially offset by $9.9 million of restructuring charges related to the noted ongoing cost savings initiative.
Floorplan financing expenses decreased as a result of lower new and used inventory levels, and interest rates.
Net income for the period improved as a result of reduced operating expenses before depreciation2 and floorplan financing expenses as discussed above, and an increase in the add back of unrealized fair value changes in derivative instruments as a result of an increase in the CAD to USD foreign exchange rate, partially offset by a $7.6 million writedown of wholesale losses related to Capital Chrysler from 2018.
Adjusted EBITDA1 for the period and adjusted EBITDA margin1 increased primarily as a result of lower operating expenses before depreciation and floorplan financing expenses as discussed above
Collision Operations Highlights
Three-Months Ended December 31
Collision Financial Results
2024
2023
% Change
Revenue
36,262
32,415
11.9 %
Gross profit
17,242
17,312
(0.4) %
Gross profit percentage 2
47.5 %
53.4 %
(5.9) ppts
Adjusted EBITDA 1
5,949
3,808
56.2 %
Same store revenue 2
35,006
32,136
8.9 %
Same store gross profit 2
16,525
17,237
(4.1) %
Same store gross profit percentage 2
47.2 %
53.6 %
(6.4) ppts
Revenue increased as a result of strong customer demand, additional OEM certifications, increased insurance referrals and increased hail repairs. Gross profit and gross profit percentage2 decreased due to higher labour costs and a rise in lower margin paintless dent repair work.
Same store revenue increased, and gross profit and gross profit percentage2 decreased for the reasons noted above.
Adjusted EBITDA1 increased largely due to lower operating expenses as a result of improvements in controlling cost of insurance referral and bad debt collections.
Other Recent Developments
During the quarter:
On November 18, 2024, the Company sold substantially all of the operating assets of Okanagan Chrysler Chrysler, located in Kelowna, British Columbia, for cash consideration of $26.2 million plus closing adjustments resulting in a gain of $7.5 million. This disposition aligns with the Company's commitment to improve profitability and reduce leverage.
On December 27, 2024, the Company amended its senior credit facility to include add-backs of up to CAD $35 million for specific one-time expenses, including $20 million USD provisioned for Federal Trade Commission settlement expenses, in the definition of EBITDA, for purposes of determining compliance with the Company's financial covenants under the senior credit facility for the rolling four quarter period from December 31, 2024 to September 30, 2025.
After the quarter:
On February 14, 2025, the Company terminated its Volvo franchise at Bloomington/Normal Auto Mall, located in Illinois, for cash consideration of $0.9 million. The Volvo franchise was presented as assets held for sale in the U.S. Operations segment, which was presented as a discontinued operation, as at December 31, 2024. This decision is part of our active program to discontinue U.S. Operations
On March 4, 2025, the Company closed all remaining locations within RightRide. This decision is part of a larger strategic shift to refocus on core business and reduce leverage.
On March 7, 2025, the Company terminated an agreement with a subsidiary within the Canadian Operations segment, which impacts the contractual rights over the subsidiary. The termination agreement requires the counterparty to pay the Company $14.5 million for repayment of loans in addition to $15.6 million for accrued interest, accrued royalty fees, and a termination fee. This decision is part of a larger strategic shift to optimize operations and reduce leverage.
Conference Call
A conference call to discuss the results for the three months ended December 31, 2024 will be held on March 19, 2025 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/2024-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 for the year ended December 31, 2024, which can be found on the Company's website at www.autocan.ca or on SEDAR+ at www.sedarplus.ca.
All comparisons presented in this press release are between the three-month period ended December 31, 2024 and the three-month period ended December 31, 2023, unless otherwise indicated. Results are reported in Canadian dollars and have been rounded to the nearest thousand dollars, unless otherwise stated.
Consolidated Statements of Comprehensive (Loss) IncomeFor the Years Ended(in thousands of Canadian dollars except for share and per share amounts)
December 31, 2024
$
December 31, 2023
Revised (1)
$
Continuing operations
Revenue (Note 6)
5,351,672
5,607,194
Cost of sales (Note 7)
(4,469,395)
(4,629,532)
Gross profit
882,277
977,662
Operating expenses (Note 8)
(735,312)
(777,159)
Operating profit before other income
146,965
200,503
Lease and other income (Note 10)
7,850
12,775
Gain on disposal of assets, net (Note 10)
29,781
442
Net impairment losses on trade and other receivables
(8,737)
(2,230)
(Impairment) recoveries of non-financial assets (Note 20, 24)
(4,542)
3,538
Operating profit
171,317
215,028
Finance costs (Note 11)
(129,678)
(123,020)
Finance income (Note 11)
2,674
3,346
(Loss) gain on redemption liabilities (Note 14)
(486)
3,639
Other gains (losses), net
846
(321)
Income for the year before tax from continuing operations
44,673
98,672
Income tax expense (Note 12)
8,035
30,584
Net income for the year from continuing operations
36,638
67,973
Net loss for the year from discontinued operation (Note 18)
(103,386)
(14,192)
Net (loss) income for the year
(66,748)
53,781
Other comprehensive income (loss)
Items that may be reclassified to profit or loss
Foreign operations currency translation (Note 18)
8,032
6,489
Change in fair value of cash flow hedge (Note 25)
(206)
1,800
Income tax relating to these items
51
(458)
Other comprehensive income for the year, net of tax
7,877
7,831
Comprehensive (loss) income for the year
