EDMONTON, AB, July 25,
2022 /CNW/ - AutoCanada Inc. ("AutoCanada" or the
"Company") (TSX: ACQ), a leading multi-location North American
automobile dealership group, is pleased to announce the following
preliminary unaudited highlights of what it expects to report in
respect of its second quarter 2022 results. The preliminary results
announced are consistent with management's expectations for the
fiscal quarter and are being disclosed at this time because the
Company's scheduled quarterly earnings release date of
August 10, 2022 (see below for further details) is after the
expiry of its substantial issuer bid. The Company's substantial
issuer bid for up to $100 million of
its common shares commenced on June 30,
2022 and is scheduled to expire on August 4, 2022 unless extended or withdrawn.
Preliminary Unaudited Second
Quarter 2022 Operating Results
For the three month period ended June 30, 2022 ("Q2 2022"),
on a preliminary unaudited basis (as discussed in further detail
below), management expects to report the following highlights:
- Q2 2022 revenue of approximately $1.7
billion, representing growth of approximately 32% over the
same period in 2021 ("Q2 2021")
- Net income of approximately $39.1
million versus $37.7 million
in the prior year, which includes $10.0
million of incremental inventory writedowns in Q2 2022
- Adjusted EBITDA1 of approximately $75.6 million, an increase of $5.1 million compared to $70.5 million in 2021
-
- Adjusted EBITDA1 on a trailing twelve month basis
was $271.9 million
- Same store total retail unit2 sales growth of
approximately 0.6% as compared to 40.5% in the prior year
- An increase in AutoCanada's same store used-to-new retail units
ratio2 to approximately 1.59 in Q2 2022 from 1.37 in Q2
2021
- Indebtedness of $374.8 million at
the end of Q2 2022 compares to $285.9
million at the end of Q4 2021
- An increase in net indebtedness1 by approximately
$45.1 million in the quarter, from
$248.8 million as at March 31, 2022, to approximately $293.8 million as at June
30, 2022
-
- The increase includes debt incurred in connection with the
acquisition of Porsche of London,
Audi Windsor, Burwell Auto Body, and
the repurchase and cancellation of $25.4
million of shares under the Company's normal course issuer
bid
- The Company completed its normal course issuer bid on
May 19, 2022, purchasing and
cancelling 1,730,321 shares for an aggregate purchase price of
$56.6 million
Second quarter results include an incremental charge of
$10.0 million for the writedown
of used vehicle inventory in our Canadian Operations to net
realizable value. Management determined that the writedown was
prudent to calibrate our cost of used vehicle inventory for the
changing macro environment. Management will continue to assess the
net realizable value of our inventory in the quarters ahead.
The Company has not yet completed its financial closing process
for Q2 2022, and the selected unaudited results provided above are
preliminary estimates. Actual results may differ materially from
these estimates due to the completion of the Company's financial
closing procedures, final adjustments, review by the Company's
auditors and other developments that may arise between now and the
time the financial results are finalized. These estimates are not a
comprehensive statement of the Company's financial results for Q2
2022 or for any other period and should not be viewed as a
substitute for full financial statements prepared in accordance
with International Financial Reporting Standards, and these
estimates are not necessarily indicative of the results to be
achieved for Q2 2022 or for any other period.
The Company is issuing preliminary results in order to enable it
to disclose such information in connection with its substantial
issuer bid, and the Company does not intend to provide preliminary
results in the future. The preliminary results provided in this
press release constitute forward-looking statements within the
meaning of applicable securities laws, are based on a number of
assumptions and are subject to a number of risks and uncertainties.
Please see the section below entitled "Forward-Looking Statements".
The preliminary results have been prepared by, and are the
responsibility of, management of the Company. The Company's
independent registered public accounting firm,
PricewaterhouseCoopers LLP, has not reviewed the preliminary
results. Neither PricewaterhouseCoopers LLP nor any other
independent accountants express an opinion or any other form of
assurance with respect to the preliminary results.
1
|
See "Non-GAAP and
Other Financial Measures" below.
|
2
|
This press release
contains "Supplementary Financial Measures". Section 15.
NON-GAAP AND OTHER FINANCIAL MEASURES of the Company's Management's
Discussion & Analysis for the three month period ended March
31, 2022 ("Q1 2022 MD&A") is hereby incorporated by reference
for further information regarding the composition of these measures
(accessible through the SEDAR website at www.sedar.com).
|
Acquisition Pipeline
We have established a significant acquisition pipeline, with
dealerships and collision centres representing in excess of
$175 million in annual revenue
currently being evaluated. We are at varying stages of the
acquisition process with these targets, ranging from signed letter
of intents to signed purchase agreements, with the potential deals
remaining subject to due diligence, OEM approvals, and other
standard closing conditions.
Q2 2022 Financial Results
Conference Call
The Company will release its financial results for the quarter
ended June 30, 2022 on Wednesday, August 10, 2022 after
the close of markets. A conference call and webcast to discuss the
results will be held on Thursday, August 11, 2022 at
9:00am Mountain (11:00am Eastern). To participate in the
conference call, please dial 1.888.664.6392 approximately 10
minutes prior to the call. For those unable to participate on the
live call, a replay will be made available until Thursday, August 18, 2022 by dialing
1.888.390.0541 (Canada and
USA), passcode 467186. The public
is invited to listen to the live conference call or the replay.
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/2022-q2-conference-call/
Non-GAAP and Other Financial
Measures
This press release contains certain financial measures that do
not have any standardized meaning prescribed by Canadian 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 earnings (loss) or to cash provided by (used in) operating,
investing, financing activities, cash and cash equivalents, and
indebtedness determined in accordance with Canadian GAAP, as
indicators of our performance. We provide these additional non-GAAP
measures, capital management measures, and supplementary financial
measures to assist investors in determining our ability to generate
earnings and cash provided by (used in) operating activities and to
provide additional information on how these cash resources are
used.
Adjusted EBITDA and net indebtedness are not earnings measures
recognized by GAAP and do not have standardized meanings prescribed
by GAAP. Investors are cautioned that these measures should not
replace net earnings or loss (as determined in accordance with
GAAP) as an indicator of the Company's performance, of its cash
flows from operating, investing and financing activities or as a
measure of its liquidity and cash flows. The Company's methods of
calculating referenced non-GAAP and other financial measures may
differ from the methods used by other issuers. Therefore, these
measures may not be comparable to similar measures presented by
other issuers. These measures are identified and described under
section "15. NON-GAAP AND OTHER FINANCIAL MEASURES" of the Q1 2022
MD&A hereby incorporated by reference (accessible through the
SEDAR website at www.sedar.com).
Non-GAAP and Other Financial
Measures Reconciliations
Adjusted EBITDA
The following table illustrates Adjusted EBITDA for the
three-month period ended June 30,
over the last two years of operations:
(dollars in
thousands)
|
2022
|
2021
|
Period from April 1
to June 30
|
|
|
Net income for the
period
|
39,097
|
37,698
|
Add back:
|
|
|
Income tax
expense
|
9,685
|
13,932
|
Depreciation of
property and equipment
|
5,077
|
4,267
|
Interest on long-term
indebtedness
|
6,610
|
5,485
|
Depreciation of right
of use assets
|
7,561
|
6,147
|
Lease liability
interest
|
6,946
|
5,333
|
|
74,976
|
72,862
|
Add back:
|
|
|
Loss on extinguishment
of debt
|
—
|
1,128
|
Unrealized fair value
changes in derivative instruments
|
(182)
|
50
|
Amortization of loss
on terminated hedges
|
817
|
817
|
Unrealized foreign
exchange losses
|
84
|
298
|
Unrealized fair value
changes on embedded derivative
|
—
|
(4,644)
|
Gain on disposal of
assets
|
(95)
|
(20)
|
Adjusted
EBITDA
|
75,600
|
70,491
|
Net Indebtedness
The following table illustrates the Company's net indebtedness
as at June 30, 2022 and December 31,
2021:
(dollars in
thousands)
|
June 30,
2022
|
December 31,
2021
|
Syndicated Credit
Facility - Revolving Credit
|
(1,292)
|
63,842
|
Senior unsecured notes
(including embedded derivative asset)
|
344,053
|
221,965
|
Non-recourse mortgage
and other debt
|
32,088
|
101
|
Total
indebtedness
|
374,849
|
285,908
|
Add back:
|
|
|
Embedded derivative
asset
|
—
|
29,306
|
Indebtedness for net
indebtedness purpose
|
374,849
|
315,214
|
Cash and cash
equivalents
|
(81,004)
|
(102,480)
|
Net
indebtedness
|
293,845
|
212,734
|
About AutoCanada
AutoCanada is a leading North American multi-location automobile
dealership group currently operating 80 franchised dealerships,
comprised of 28 brands, in eight provinces in Canada as well as a group in Illinois, USA. AutoCanada currently sells
Chrysler, Dodge, Jeep, Ram, FIAT, Alfa Romeo, Chevrolet, GMC,
Buick, Cadillac, Ford, Infiniti,
Nissan, Hyundai, Subaru, Audi, Volkswagen, Kia, Mazda,
Mercedes-Benz, BMW, MINI, Volvo, Toyota, Lincoln, Acura, Honda and Porsche branded
vehicles. Additionally, the Company's Canadian Operations segment
currently operates 2 used vehicle dealerships supporting the Used
Digital Retail Division, the RightRide division operates 9
locations, and 5 stand-alone collision centres (within our group of
19 collision centres). In 2021, our dealerships sold approximately
86,000 vehicles and processed over 800,000 service and collision
repair orders in our 1,303 service bays generating revenue in
excess of $4 billion.
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 our
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 of 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. In particular, this press release contains
forward-looking statements with respect to, among other
things, AutoCanada's preliminary operating and financial
results for Q2 2022 and the expected impact of acquisitions
completed in fiscal 2022.
The forward-looking statements included in this press release
are not guarantees of future performance and should not be unduly
relied upon. Readers are cautioned that forward-looking statements
are based on current expectations, estimates and projections that,
by their nature, involve a number of known and unknown risks and
uncertainties, which could cause actual results to differ
materially from those anticipated and described in the
forward-looking statements. These known and unknown risks and
uncertainties include, but are not limited to: potential changes in
the regulatory and legislative environment; political uncertainty
and instability in North America
and internationally; volatility in interest and tax rates;
operating risks inherent in the automotive retail industry; and
changes in general economic conditions including the capital and
credit markets.
Forward-looking statements 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. In particular, in presenting its
forward-looking statements, AutoCanada has made assumptions
respecting, among other things: the relative stability of general
North American economic conditions; and regulatory and legislative
conditions. Therefore, any such forward-looking statements are
qualified in their entirety by reference to the factors discussed
throughout this press release.
AutoCanada cautions that the foregoing list of assumptions,
risks and uncertainties is not exhaustive.
The Company's Annual Information Form and other documents filed
with securities regulatory authorities (accessible through the
SEDAR website at www.sedar.com) 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
our 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.
Additional Information
Additional information about AutoCanada is available at the
Company's website at www.autocan.ca and www.sedar.com.
SOURCE AutoCanada Inc.