AutoCanada reports 2018 annual and fourth quarter results
AutoCanada Inc. ("AutoCanada" or the "Company") (TSX:ACQ.TO), a multi-location North American automobile dealership group, today reported its financial results for the three and twelve-months ended December 31, 2018. All figures are in Canadian dollars, unless otherwise stated.
2018 Full Year Highlights
-- Consolidated revenues reached $3.2 billion -- Total vehicles sold (new and used) reached 66,073 -- EBITDA attributable to AutoCanada shareholders totalled $56.3 million, and on an adjusted basis totalled $69.3 million which includes gains totaling $13.9 million from sale-leaseback transactions of dealership properties -- Diluted earnings per share totalled $(2.85), and on an adjusted basis totalled $0.04
2018 Fourth Quarter Highlights
-- Consolidated revenues totalled $782.8 million -- Total vehicles sold (new and used) totalled 16,024 -- EBITDA attributable to AutoCanada shareholders totalled $16.5 million, and on an adjusted basis totalled $22.6 million -- Diluted earnings per share totalled $(0.98), and on an adjusted basis totalled $(0.34) -- Acquired two new dealerships during the quarter -- Introduced the Ford brand to the portfolio -- Divested two underperforming dealerships during the quarter, and one subsequent to quarter end -- Entered into sale-leaseback transactions totalling approximately $53 million.
"A number of months ago, we set out on an ambitious course to improve our operations and become the industry leader," said Paul Antony, Executive Chairman. "We have implemented the main parts of our Go Forward Plan in Canada and we are already seeing strong signs of adoption across our dealership network. As our new initiatives take hold, we foresee very material improvements in our performance in 2019. As such, despite being faced with increased headwinds over the past number of months, we remain committed to delivering on our goals for 2019"
2018 Full Year Highlights
-- Revenue was $3,150.8 million, up 1.6% compared with 2017. Same store revenue declined by 1.9%. However, operating expenses were also up by 11.4% when compared to 2017. This resulted in relatively poor performance in 2018. A large contributor to this was the acquisition of our U.S. Operations in April 2018 as operating expenses in our U.S. Operations exceeded gross profit by $10.3 million. -- Also, included in operating expenses are management transition costs of $9.8 million, a number of non-recurring expenses such as inventory adjustments, a provision of $2.0 million related to fraud at one of our dealerships in the second quarter, and allowances and writedowns of $3.2 million related to the winding down of operations. Operating expenses as a percentage of gross profit were up to 93.5% from 82.2% in 2017. -- Gross profit was $508.0 million, down 2.1% compared with 2017, with gross profit as a percentage of revenue decreasing to 16.1% from 16.7%. Same store gross profit declined 3.7% over the same period. -- New vehicle sales were 43,451, down 0.7% from 2017. Revenue from the sale of new vehicles was $1,802.2 million, down 1.4% from 2017. The sale of new vehicles accounted for 57.2% of the Company's total revenue and 21.5% of gross profit versus 58.9% of revenue and 25.3% of gross profit in 2017. -- Used vehicle sales were 22,622, up 16.7% from last year. Revenue from the sale of used vehicles was $756.2 million, up 5.6% from the prior year. The sale of used vehicles accounted for 24.0% of the Company's total revenue and 8.5% of gross profit, versus 23.1% of revenue and 8.4% of gross profit in 2017. -- Parts, service and collision repair generated $451.8 million of revenue, up 8.4% from 2017. This accounted for 14.3% of the Company's total revenue and 44.1% of its gross profit, up from 13.4% of revenue and 41.3% of gross profit in 2017. -- Finance and insurance generated $140.7 million of revenue, a decrease of 0.4% from 2017. This accounted for 4.5% of the Company's total revenue and 25.9% of its gross profit, in line with 4.6% of revenue and an increase from 25.0% of gross profit in 2017. -- EBITDA attributable to AutoCanada shareholders decreased to $56.3 million from $111.8 million in the prior year. -- Including the impairment of non-financial assets, the Company generated a net loss attributable to AutoCanada shareholders of $(78.1) million (Adjusted net earnings attributable to AutoCanada shareholders of $1.2 million), or $(2.85) per share (Adjusted net earnings per share attributable to AutoCanada shareholders of $0.04) versus net income of $57.8 million in 2017 ($42.7 million on an adjusted basis) or $2.11 per share ($1.56 on an adjusted basis). -- Included in EBITDA and net earnings are gains totaling $13.9 million from sale-leaseback transactions of dealership properties. -- Total impairment charges attributable to AutoCanada shareholders were $95.1 million, or $2.55 basic earnings per share net of tax.
2018 Fourth Quarter Highlights
-- Revenue was $782.8 million, up 6.8% compared with the fourth quarter of 2017. Same store revenue declined by 3.0%. -- Operating expenses were $125.0 million, up 19.5% from the same period last year. Operating expenses as a percentage of gross profit were up to 97.5% from 83.6% in the same period in 2017. -- Operating expenses in the U.S. Operations exceeded gross profit by $6.3 million. Included in the U.S. operating expenses is management transition costs of approximately $2.0 million. In addition, the Canadian operating expenses include approximately $3.7 million of non-recurring allowances and provisions. -- Gross profit was $128.2 million, up 2.4% compared with the same quarter in 2017, with gross profit as a percentage of revenue decreasing to 16.4% from 17.1%. Same store gross profit declined 3.0%. -- New vehicle sales were 10,331, up 5.2% from the same period in 2017. Revenue from the sale of new vehicles was $432.8 million, up 3.6% from the same period in 2017. The sale of new vehicles accounted for 55.3% of the Company's total revenue and 20.2% of gross profit versus 57.0% of revenue and 24.0% of gross profit in the fourth quarter of 2017. -- Used vehicle sales were 5,693, up 22.4% compared with the same quarter last year. Revenue from the sale of used vehicles was $193.0 million, up 10.1% from the same quarter last year. The sale of used vehicles accounted for 24.7% of the Company's total revenue and 6.7% of gross profit, versus 23.9% of revenue and 6.0% of gross profit in the fourth quarter of 2017. -- Parts, service and collision repair generated $121.3 million of revenue, up 13.2% from the same period in 2017. This accounted for 15.5% of the Company's total revenue and 47.1% of its gross profit, up from 14.6% of revenue and 45.5% of gross profit in the same quarter of 2017. -- Finance and insurance generated $35.7 million of revenue, an increase of 8.2% from the same period in 2017. This accounted for 4.6% of the Company's total revenue and 26.0% of its gross profit, in line with 4.5% of revenue and up from 24.5% of gross profit in the fourth quarter of 2017. -- EBITDA attributable to AutoCanada shareholders decreased to $16.5 million from $28.1 million compared with the same quarter last year. -- Adjusted EBITDA attributable to AutoCanada shareholders increased to $22.6 million from $21.9 million compared with the same quarter last year. -- Including the impairment of non-financial assets, the Company generated a net loss attributable to AutoCanada shareholders of $(26.9) million (Adjusted net earnings attributable to AutoCanada shareholders of $(9.3) million), or $(0.98) per share (Adjusted net earnings per share attributable to AutoCanada shareholders of $(0.34)) versus net income of $17.1 million in 2017 ($8.9 million on an adjusted basis) or $0.62 per share ($0.33 on an adjusted basis). -- Included in EBITDA and net earnings is a gain of $9.2 million from a sale-leaseback transaction in respect of four dealership properties. -- Total impairment charges were $17.8 million in the fourth quarter, or $0.48 basic earnings per share net of tax. The impairment charges in the fourth quarter were attributable to our U.S. Operations.
Fourth Quarter Business Highlights
-- On October 1, 2018, the Company, through a wholly owned subsidiary, AutoCanada M LP, purchased all of the issued and outstanding shares of Ericksen M-B Ltd., which owns and operates a Mercedes-Benz dealership in Edmonton, Alberta, for total cash consideration of $23.9 million. The acquisition was funded through net proceeds of the sale and leaseback transactions with Automotive Properties Real Estate Investment Trust. -- The Company was awarded the right to a General Motors open point dealership featuring the Chevrolet, Buick and GMC brands in Maple Ridge, BC, a community located in the northeastern sector of Greater Vancouver. The Company will construct an approximately 33,400 square foot facility designed to General Motors image standards, with construction expected to be completed by mid 2020. As part of the Company's sale-leaseback transaction with Capital Automotive Real Estate Services Inc. (see below), Capital Automotive will fund the construction of the facility. -- On November 19, 2018, the Company sold substantially all of the operating and fixed assets, including the land and facilities, of North Edmonton Kia, located in Edmonton, AB for cash consideration. Net proceeds of $10.2 million resulted in a pre-tax gain on divestiture of $0.8 million. -- On December 1, 2018, the Company, through a wholly owned subsidiary, 2667465 Ontario Inc., purchased all of the issued and outstanding shares of Rose City Ford Sales Limited, which owns and operates a Ford dealership in Windsor, Ontario, for total cash consideration of $24.8 million. At the time of acquisition, Rose City Ford Sales Limited had net working capital of $6.9 million. The acquisition was funded by drawing on the Company's revolving term facility. -- On December 17, 2018, the Company sold substantially all of the operating and fixed assets of Courtesy Mitsubishi, located in Calgary, Alberta for cash consideration. Net proceeds of $2.5 million resulted in a pre-tax loss on divestiture of $0.03 million. -- The Company completed a sale-leaseback transaction for four of its dealership properties with Capital Automotive Real Estate Services Inc. AutoCanada leased the properties from Capital Automotive under long-term triple net leases. On the transaction, the Company recognized a gain of $9.2 million on the sale of dealership properties. $2.2 million of net proceeds relate to the sale of leasehold improvements on a property it did not own which reduced an impairment charge taken at June 30, 2018. The transaction provided for proceeds of approximately $54.7 million which were used to repay the Company's credit facility. In addition, Capital Automotive has agreed to fund building improvements and construction. Management expects to incur approximately $32.6 million in Canada and $20.5 million in the U.S. ($15.0 million USD) for capital requirements in respect of the properties, including the reconstruction of three existing dealerships and the construction of the Maple Ridge Chevrolet Buick GMC Open Point.
-- On March 6, 2019, the Company sold substantially all of the operating and fixed assets of Toronto Dodge, located in Toronto, Ontario for cash consideration of $5.0 million.
Raj Juneja has resigned from his position as Chief Financial Officer for personal reasons and will remain as an advisor to effect an orderly transition. The Company has commenced a search for a new Chief Financial Officer. "I would like to thank Raj for his dedicated service to AutoCanada. Raj has been instrumental in helping AutoCanada with our balance sheet and our overall finance function," said Paul Antony, Executive Chairman.
William Berman has resigned from his position as President of U.S. Operations and Tamara Darvish has been appointed as the new President of U.S. Operations. Ms. Darvish was previously the Executive Vice President of DARCARS Automotive Group, the Chief Operating Officer of Pentagon Federal Credit Union and the Chief Operating Officer of Capital Automotive Real Estate Services. "I would like to also thank Bill for his dedicated service to AutoCanada and assisting us in diagnosing and structuring our U.S. Operations," said Paul Antony, Executive Chairman. "We welcome Tamara to the AutoCanada team. Tamara's hands-on experience will help us focus on operational efficiencies in our U.S. business."
The following table summarizes the Company's results for the quarter and year ended December 31, 2018:
Three months ended December 31 Year ended December 31 Consolidated Operational Data 2018 2017 % Change 2018 2017 % Change --- --- EBITDA attributable to AutoCanada shareholders1,2 16,521 28,127 (41.3) 56,262 111,812 (49.7) % % Adjusted EBITDA attributable to AutoCanada shareholders1,2 22,638 21,880 3.5 69,266 95,410 (27.4) % % Net (loss) income attributable to AutoCanada shareholders(1) (26,892) 17,089 (257.4) (78,083) 57,844 (235.0) % % Adjusted net earnings attributable to AutoCanada shareholders1,2 (9,299) 8,935 (204.1) 1,175 42,665 (97.2) % % Basic EPS (0.98) 0.62 (258.1) (2.85) 2.11 (235.1) % % Adjusted diluted EPS(2) (0.34) 0.33 (203.0) 0.04 1.55 (97.3) % % Weighted average number of shares - Basic 27,417,434 27,389,167 0.1 27,399,117 27,379,193 0.1 % % Weighted average number of shares - Diluted (3) 27,417,434 27,498,724 (0.3) 28,297,901 27,473,995 3.0 % % --- --- New retail vehicles sold (units) 9,214 8,444 9.1 36,495 36,076 1.2 % % New fleet vehicles sold (units) 1,117 1,378 (18.9) 6,956 7,697 (9.6) % % New vehicles sold (units) 10,331 9,822 5.2 43,451 43,773 (0.7) % % Used retail vehicles sold (units) 5,693 4,653 22.4 22,622 19,379 16.7 % % Total vehicles sold (units) 16,024 14,475 10.7 66,073 63,152 4.6 % % Revenue 782,790 733,060 6.8 3,150,781 3,101,560 1.6 % % Gross profit 128,204 125,210 2.4 507,963 518,629 (2.1) % % Gross profit % 16.4 % 17.1 % (4.1) 16.1 % 16.7 % (3.6) % % Operating expenses 125,040 104,626 19.5 474,804 426,253 11.4 % % Operating expenses as % of gross profit 97.5 % 83.6 % 16.7 93.5 % 82.2 % 13.7 % % Operating (loss) profit (576) 26,505 (102.2) (32,648) 118,969 (127.4) % % Free cash flow(2) (7,658) 29,496 (126.0) (28,805) 72,213 (139.9) % % Adjusted free cash flow(2) 10,553 15,996 (34.0) 9,657 90,786 (89.4) % % --- --- See the Company's Management's Discussion and Analysis for the quarter and year ended December 31, 2018 for complete footnote disclosures.
Macroeconomic factors create a degree of uncertainty for AutoCanada's business. Central banks in Canada and the United States have recently raised key interest rates, and there is a possibility of further interest rate hikes over the next year. Higher rates will adversely impact borrowing expenses on variable interest rate debt such as vehicle floorplan financing, which would increase our costs. Monthly loan payments for new and used vehicles are also typically linked to market interest rates, meaning rising interest rates will likely make vehicle ownership less affordable at the same time as other household debt becomes more expensive.
The auto industry in North America is coming off several record-setting years and the sale of new vehicles is beginning to trend downwards. While many analysts expect sales to remain healthy, most expect a decline in volume in 2019. Over the last few months there has been greater concern over the strength of the economy in both Canada and the United States. If these concerns materialize, the volume of vehicle sales could decrease more than analysts expect. New car sales in the U.S. dropped more than expected in January and February and many dealers in the U.S. are reacting by shifting to used cars and cutting costs. Some of the blame for the reduction of new car sales over these two months is being placed on the severe weather in the Midwest and the heavy rains in the Southeast and California. Vehicle leasing and manufacturer incentives remain at high levels, particularly as the new model year rolls out. If those incentives are scaled back, it could impact sales volumes.
While macro-economic factors determine total vehicle demand, we expect to deliver materially better results in our Canadian operations as we continue to implement our Go Forward Plan, even if the broader industry faces varying headwinds. This will come through a combination of focusing on less cyclical parts of our business and on lines of our business that generate higher margins. As part of our Go Forward Plan, we expect to materially increase the number of used vehicles we retail. Margins on used vehicles tend to be higher than new vehicles and retailing more vehicles will increase our returns from our finance and insurance and our parts and service lines of business. In addition, we are implementing a number of initiatives to increase the returns from our parts, service and collision businesses.
We are also optimizing our finance and insurance offerings for used vehicles at our dealerships. We expect to earn a material profit share on these new offerings. We have also created a new special finance division and a new wholesale division. Our new special finance division will arrange loans for customers who cannot qualify for traditional loans offered by banks and affiliates of vehicle manufacturers. We expect that our special finance division will increase both new and used vehicle sales at our dealerships and through a recently launched online site (www.rightride.ca). We expect that our new wholesale division will be accretive by taking advantage of the arbitrage opportunities with the sale of used vehicles in different geographical locations. Other aspects of the Company's Go Forward Plan are expected to lead to a decrease in operational expenses at our dealerships and at our collision centres as we better leverage our buying power to achieve meaningful cost reductions in our Canadian operations.
The key issue with our U.S. Operations in 2018 was the high cost structure. We are taking steps to reduce the operating expenses in our U.S. dealerships to be in line with industry norms with a view to bringing our U.S. operations to profitability in 2019. In addition, we are implementing a plan to create operational efficiencies and grow revenues with a view of creating a sustainable platform with the U.S. assets that we currently own that can withstand the economic climate over the next few years.
The fragmented nature of the automotive dealership sector will provide us with the opportunity to diversify our geographical presence and drive earnings growth through accretive acquisitions. While our principal focus at this time is on executing our Go Forward plan and optimizing all of our lines of business, we expect to grow our business by making accretive acquisitions as opportunities may arise.
Go Forward Plan
Following a comprehensive review of the Company's operations, the Board of Directors endorsed a Go Forward Plan that was announced concurrent with the Company's third quarter 2018 financial results. The plan involves managing costs while increasing sales and employee productivity, and is being implemented across AutoCanada's Canadian dealerships. Highlights of the plan include the following:
-- Enhancing the Company's finance and insurance offerings at dealerships. The Company has appointed a new Vice President responsible for the division. The Company expects to improve its finance and insurance business through a combination of new AutoCanada white-label products for used car sales, where it will earn a profit share, and manager training at dealerships. -- Creating a new specialty finance division to make non-traditional (near-prime) financing available at all dealerships, as well as through a new online presence, rightride.ca. -- Optimizing the Company's collision centres, through a combination of renegotiated supply contracts to realize savings in operating expenses, along with greater coordination by tracking and managing their performance independent from other business lines. Long term, the Company expects to increase the number of collision centres it owns through acquisitions of stand-alone facilities in areas where the Company currently has multiple dealerships and no collision centre. -- Disposing of non-performing assets in order to eliminate carrying costs. These assets include parcels of land acquired for open points that were not obtained. -- Establishing a new wholesale division to take advantage of arbitrage opportunities with the sale of used cars across different geographic locations. -- Leveraging the Company's buying power to reduce costs at our dealerships.
In addition to these initiatives, the Company is taking other actions to increase the sale of used vehicles and drive more business to its service bays. AutoCanada's growth will also continue to be supported through disciplined, accretive acquisitions that offer brand and geographical diversity.
Management reviews the Company's financial results on a monthly basis. The Board of Directors reviews the financial results periodically to determine whether a dividend is to be paid based on a number of factors with a goal to efficiently allocate capital to fuel AutoCanada's future growth while also rewarding and sharing the Company's success with our shareholders.
On February 22, 2019, the Board of Directors of the Company declared a quarterly eligible dividend of $0.10 per common share on the Company's outstanding Class A common shares, payable on March 15, 2019 to shareholders of record at the close of business on March 1, 2019.
For purposes of the enhanced dividend tax credit rules contained in the Income Tax Act (Canada) (the "ITA") and any corresponding provincial and territorial tax legislation, all dividends paid by AutoCanada or any of its subsidiaries in 2010 and thereafter are designated as "eligible dividends" (as defined in 89(1) of the ITA), unless otherwise indicated. Please consult with your own tax advisor for advice with respect to the income tax consequences to you of AutoCanada designating dividends as "eligible dividends".
SELECTED QUARTERLY FINANCIAL INFORMATION
The following table shows the unaudited results of the Company for each of the eight most recently completed quarters. The results of operations for these periods are not necessarily indicative of the results of operations to be expected in any given comparable period.
(in thousands of dollars, except Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Gross Profit %, Earnings per share, 2018 2018 2018 2018 2017 2017 2017 2017 and Operating Data) --- Income Statement Data New vehicles 432,756 509,281 522,150 338,016 417,626 497,711 558,682 353,540 Used vehicles 192,988 206,668 198,597 157,901 175,251 192,473 182,913 165,408 Parts, service and collision repair 121,304 113,087 121,476 95,893 107,156 104,816 113,983 90,735 Finance, insurance and other 35,742 37,882 38,365 28,675 33,027 39,571 39,324 29,344 --- Revenue 782,790 866,918 880,588 620,485 733,060 834,571 894,902 639,027 --- New vehicles 25,861 29,150 30,648 23,473 30,033 36,806 38,555 25,590 Used vehicles 8,637 12,955 13,173 8,562 7,563 11,140 13,095 11,940 Parts, service and collision repair 60,380 57,206 60,868 45,533 56,915 53,805 56,306 47,284 Finance, insurance and other 33,326 35,524 35,891 26,776 30,699 36,218 35,867 26,813 --- Gross Profit 128,204 134,835 140,580 104,344 125,210 137,969 143,823 111,627 --- Gross profit % 16.4 15.6 16.0 16.8 17.1 16.5 16.1 17.5 % % % % % % % % Operating expenses 125,039 126,492 127,492 95,781 104,626 110,560 112,897 98,170 Operating expenses as a % of gross profit 97.5 93.8 90.7 91.8 83.6 80.1 78.5 87.9 % % % % % % % % Operating (loss) profit (576) (5,259) (42,719) 15,906 26,505 30,287 46,539 15,638 Impairment (recovery) of non-financial assets 17,834 19,569 58,097 (816) Net (loss) income attributable to AutoCanada shareholders (26,892) (15,563) (40,458) 4,830 17,089 12,100 24,978 3,678 Adjusted net earnings attributable to AutoCanada shareholders2,4,6 (9,299) 333 5,298 4,830 8,935 13,581 15,547 4,602 EBITDA attributable to AutoCanada shareholders(2) 16,521 11,972 12,042 15,692 28,127 25,827 43,722 14,136 EBITDA attributable to AutoCanada shareholders as a % of sales(2) 2.1 1.4 1.4 2.5 3.8 3.1 4.9 2.7 % % % % % % % % Free cash flow(2) (7,658) 6,993 (13,751) (14,388) 29,496 31,114 10,982 621 Adjusted free cash flow(2) 10,553 (965) (3,652) 3,721 15,996 23,296 36,277 15,217 Basic earnings per share (0.98) (0.57) (1.48) 0.18 0.62 0.44 0.91 0.13 Diluted earnings per share (0.98) (0.57) (1.48) 0.18 0.62 0.44 0.91 0.13 Basic adjusted earnings per share2,4,6 (0.34) 0.01 0.19 0.18 0.33 0.50 0.57 0.17 Diluted adjusted earnings per share2,4,6 (0.34) 0.01 0.19 0.18 0.33 0.50 0.57 0.17 Dividends declared per share 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 Operating Data Vehicles (new and used) sold(3) 16,024 18,863 18,519 12,667 14,475 17,132 18,490 13,055 New vehicles sold(3) 10,331 12,474 12,506 8,140 9,822 12,014 13,429 8,508 New retail vehicles sold(3) 9,214 10,353 10,264 6,664 8,444 10,334 10,545 6,753 New fleet vehicles sold(3) 1,117 2,121 2,242 1,476 1,378 1,680 2,884 1,755 Used retail vehicles sold(3) 5,693 6,389 6,013 4,527 4,653 5,118 5,061 4,547 # of service and collision repair orders completed(3) 245,682 241,103 248,167 180,429 224,006 220,669 228,872 197,069 Absorption rate(2) 87 82 88 84 90 87 87 82 % % % % % % % % # of dealerships at year end 68 63 63 54 58 57 57 56 # of same stores dealerships(1) 47 49 49 49 49 48 47 47 # of service bays at year end 1,157 1,106 1,106 906 999 977 977 949 Same stores revenue growth(1) (3.0) (3.0) (5.1) 4.6 11.1 2.9 0.1 (7.1) % % % % % % % % Same stores gross profit growth(1) (3.0) (8.5) (4.3) 1.0 1.4 6.3 1.1 (1.2) % % % % % % % % --- See the Company's Management's Discussion and Analysis for the quarter ended December 31, 2018 for complete footnote disclosures.
The following tables summarize the results for the quarter and year ended December 31, 2018 on a same store basis by revenue source and compares these results to the same period in 2017.
Same Store Revenue and Vehicles Sold Three months ended December 31 Year ended December 31 (in thousands of dollars) 2018 2017 % Change 2018 2017 % Change --- Revenue Source New vehicles ? Retail 258,289 279,051 (7.4)% 1,123,438 1,203,580 (6.7)% New vehicles ? Fleet 48,810 50,350 (3.1)% 281,627 266,731 5.6% --- Total New vehicles 307,099 329,401 (6.8)% 1,405,065 1,470,311 (4.4)% Used vehicles ? Retail 105,170 95,038 10.7% 441,500 410,536 7.5% Used vehicles ? Wholesale 34,770 41,451 (16.1)% 151,791 175,333 (13.4)% --- Total Used vehicles 139,940 136,489 2.5% 593,291 585,869 1.3% Finance, insurance and other 24,757 27,849 (11.1)% 112,415 116,315 (3.4)% --- Subtotal 471,796 493,739 (4.4)% 2,110,771 2,172,495 (2.8)% --- Parts, service and collision repair 90,205 85,871 5.0% 350,514 337,675 3.8% --- Total 562,001 579,610 (3.0)% 2,461,285 2,510,170 (1.9)% --- New retail vehicles sold (units) 6,106 6,806 (10.3)% 26,616 29,591 (10.1)% New fleet vehicles sold (units) 1,039 1,114 (6.7)% 6,663 6,322 5.4% Used retail vehicles sold (units) 4,020 3,682 9.2% 17,082 16,000 6.8% --- Total 11,165 11,602 (3.8)% 50,361 51,913 (3.0)% --- Total vehicles retailed (units) 10,126 10,488 (3.5)% 43,698 45,591 (4.2)% ---
Same Store Gross Profit and Profit Percentage --- Three Months Ended December 31 Gross Profit Gross Profit % (in thousands of dollars) 2018 2017 % Change 2018 2017 --- Revenue Source New vehicles ? Retail 19,326 19,634 (1.6)% 7.5% 7.0% New vehicles ? Fleet 1,143 1,360 (16.0)% 2.3% 2.7% --- Total New vehicles 20,469 20,994 (2.5)% 6.7% 6.4% Used vehicles ? Retail 6,014 6,641 (9.4)% 5.7% 7.0% Used vehicles ? Wholesale 519 1,151 (54.9)% 1.5% 2.8% --- Total Used vehicles 6,533 7,792 (16.2)% 4.7% 5.7% Finance, insurance and other 23,757 24,302 (2.2)% 96.0% 87.3% --- Subtotal 50,759 53,088 (4.4)% 10.8% 10.8% --- Parts, service and collision repair 44,799 45,446 (1.4)% 49.7% 52.9% --- Total 95,558 98,534 (3.0)% 17.0% 17.0% ---
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 quarter ended December 31, 2018, which can be found on the Company's website at www.autocan.ca or on www.sedar.com.
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, and financing activities determined in accordance with Canadian GAAP, as indicators of our performance. We provide these 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. The following "Non-GAAP Measures" are defined in the annual MD&A; Operating (loss) profit; EBITDA; Adjusted EBITDA; Adjusted Net Earnings, Adjusted Net Earnings per Share and Adjusted Diluted Net Earnings Per Share; EBIT; Free Cash Flow; Adjusted Free Cash Flow; Absorption Rate; Average Capital Employed; Adjusted Average Capital Employed; Return on Capital Employed; and Adjusted Return on Capital Employed.
A conference call to discuss the results for the quarter and year ended December 31, 2018 will be held on March 15 at 9:00am Mountain (11:00am Eastern). To participate in the conference call, please dial 1.888.231.8191 approximately 10 minutes prior to the call.
AutoCanada's presentation that will be discussed on the conference call is available at the Company's website at www.autocan.ca.
This conference call will also be webcast live over the internet and can be accessed by all interested parties at the following URL: https://www.autocan.ca/investors/Q42018/
AutoCanada, a leading North American multi-location automobile dealership group currently operating 67 franchised dealerships, comprised of 28 brands, in eight provinces in Canada as well as a group in Illinois, USA and has over 4,200 employees. AutoCanada currently sells Chrysler, Dodge, Jeep, Ram, FIAT, Alfa Romeo, Chevrolet, GMC, Buick, Cadillac, Ford, Infiniti, Nissan, Hyundai, Subaru, Mitsubishi, Audi, Volkswagen, Kia, Mazda, Mercedes-Benz, Smart, BMW, MINI, Volvo, Toyota, Lincoln, and Honda branded vehicles. In 2018, our dealerships sold approximately 66,000 vehicles and processed approximately 915,000 service and collision repair orders in our 1,157 service bays generating revenue in excess of $3 billion.
Additional information about AutoCanada Inc. is available at www.sedar.com and the Company's website at www.autocan.ca.
Forward Looking Statements
Certain statements contained in management's discussion and analysis are forward?looking statements and information (collectively "forward?looking statements", including "with respect to", "among other things", "future performance", "expense reductions" and the "Go Forward Plan"), 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 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 document.
The Company's Annual Information Form and other documents filed with securities regulatory authorities (accessible through the SEDAR website 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 about AutoCanada is available at the Company's website at www.autocan.ca and www.sedar.com.
SOURCE AutoCanada Inc.
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SOURCE: AutoCanada Inc.
Raj Juneja, Chief Financial Officer, Phone: 780.509.2808, Email: email@example.com