AUTOCANADA ANNOUNCES FOURTH QUARTER RESULTS

• Revenue was $1,483.8 million as compared to $1,388.2 million in the prior year, an increase of 6.9%
• Net (loss) income for the period was $(22.6) million versus $14.8 million in the prior year, a decrease of (252.8)%
• Diluted earnings per share was $(0.81), a decrease of $(1.33) from $0.52 in the prior year
• Consolidated ownership of the Used Digital Division, recognizing $36.7 million of share-based compensation expense and $1.8 million of related transaction costs in operating expenses, resulting in a $1.50 reduction to diluted earnings per share
• Adjusted EBITDA¹ was $46.4 million versus $51.0 million in the prior year, a decrease of $(4.6) million

EDMONTON, AB, March 7, 2024 /CNW/ - AutoCanada Inc. ("AutoCanada" or the "Company") (TSX: ACQ), a multi-location North American automobile dealership group, today reported its financial results for the three month period ended December 31, 2023.

"During the fourth quarter, AutoCanada experienced solid growth in new vehicle sales and a robust contribution from parts, service, and collision repair. These gains were tempered by a decrease in used vehicle sales, primarily in the U.S. market, as well as higher interest rates impacting floorplan, finance costs, and consumer preferences for affordable vehicles and minimal financing," said Paul Antony, AutoCanada's Executive Chair.

"Significant progress has been made on Project Elevate initiatives since its launch at the end of August, with key management changes announced in November 2023 allowing us to begin executing against this five-year strategic plan in earnest. To date this has included completing a U.S. restructuring, initiating best practice playbooks across several functions, implementing training programs, beginning corporate infrastructure modernization projects, and creating operating expense targets by brand, which are expected to be implemented in Canada this summer. This foundational work is critical to our core Project Elevate objectives which are to maximize gross profit, optimize our cost structure, and modernize our corporate infrastructure. I am very proud of the hard work and dedication of our team, who are doing an excellent job navigating challenging market conditions. I would like to thank our OEM partners for their continued support."

Fourth Quarter Key Highlights and Recent Developments

	Three-Months Ended December 31
CONSOLIDATED FINANCIAL RESULTS	2023	2022	% Change
Revenue	1,483,794	1,388,206	6.9 %
Gross profit	257,842	242,622	6.3 %
Gross profit percentage^2	17.4 %	17.5 %	(0.1) ppts
Operating expenses	250,816	197,397	27.1 %
Net (loss) income	(22,630)	14,810	(252.8) %
Basic net (loss) income per share attributable to AutoCanada shareholders	(0.84)	0.55	(252.7) %
Diluted net (loss) income per share attributable to AutoCanada shareholders	(0.81)	0.52	(255.8) %
Adjusted EBITDA^1	46,437	51,043	(9.0) %
Adjusted EBITDA Margin^1	3.1 %	3.7 %	(0.6) ppts
New retail vehicles^2 sold (units)	9,580	8,100	18.3 %
Used retail vehicles^2 sold (units)	13,777	14,418	(4.4) %
Used-to-new retail units ratio^2	1.44	1.78	(19.1) %
New vehicle gross profit per retail unit^2	5,439	5,833	(6.8) %
Used vehicle gross profit per retail unit^2	1,548	897	72.6 %
Finance, insurance and other ("F&I") gross profit per retail unit average^2	3,299	3,596	(8.3) %
New vehicle gross profit percentage^2	8.7 %	9.5 %	(0.8) ppts
Used vehicle gross profit percentage^2	3.4 %	2.8 %	0.6 ppts
Parts, service and collision repair ("PS&CR") gross profit percentage^2	53.4 %	56.8 %	(3.4) ppts
F&I gross profit percentage^2	93.5 %	95.0 %	(1.5) ppts
LIQUIDITY^2
Cash	103,146	108,301	(4.8) %
Revolving floorplan facilities	1,174,595	992,254	18.4 %
Indebtedness	562,922	555,128	1.4 %

Consolidated revenue increased due to higher new vehicle sales, contributions from PS&CR and recent acquisitions offset by lower used vehicle sales in U.S. Operations. Growth in new vehicle revenue was driven primarily from higher new vehicle sales volumes and reflecting the continued recovery in new vehicle inventories. PS&CR revenue growth reflected continued strong demand, with aftermarket operations continuing to benefit from increased average age of vehicle that resulted from constrained new light vehicle supply during the pandemic.

Consolidated gross profit increased as a result of contributions from new vehicle sales, PS&CR operations and recent acquisitions.

Operating expenses increased primarily as a result of share-based compensation expenses related to the consolidation of ownership of Used Digital Division. Normalized operating expenses before depreciation¹, which excludes stock based compensation, transaction costs, and other non-recurring costs, increased as a result of recent acquisitions.

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

The net loss for the period resulted from higher gross profits and operating expenses for the reasons stated above, including share-based compensation expense related to the ownership consolidation of the Used Digital Division, combined with higher floorplan financing expenses.

Adjusted EBITDA¹ for the period and adjusted EBITDA margin¹ decreased primarily as result of higher operating expenses combined with increased flooring expenses.

Canadian Operations Highlights

	Three-Months Ended December 31
CANADIAN FINANCIAL RESULTS	2023	2022	% Change
REVENUE
New vehicles	524,650	445,288	17.8 %
Used vehicles	505,065	511,154	(1.2) %
Parts, service and collision repair	178,080	146,245	21.8 %
Finance, insurance and other	69,957	70,025	(0.1) %
Total revenue	1,277,752	1,172,712	9.0 %
GROSS PROFIT
New vehicles	45,007	40,781	10.4 %
Used vehicles	22,176	19,665	12.8 %
Parts, service and collision repair	93,375	82,008	13.9 %
Finance, insurance and other	64,576	65,863	(2.0) %
Total gross profit	225,134	208,317	8.1 %
Gross profit percentage^2	17.6 %	17.8 %	(0.2) ppts
Operating expenses	218,699	166,513	31.3 %
Net (loss) income	(16,020)	15,043	(206.5) %
Adjusted EBITDA^1	47,945	46,027	4.2 %
New retail vehicles^2 sold (units)	8,161	7,112	14.7 %
Used retail vehicles^2 sold (units)	11,805	11,689	1.0 %
New vehicle gross profit per retail unit^2	5,401	5,598	(3.5) %
Used vehicle gross profit per retail unit^2	1,948	1,190	63.7 %
F&I gross profit per retail unit average^2	3,234	3,503	(7.7) %
New vehicle gross profit percentage^2	8.6 %	9.2 %	(0.6) ppts
Used vehicle gross profit percentage^2	4.4 %	3.8 %	0.6   ppts
PS&CR gross profit percentage^2	52.4 %	56.1 %	(3.7) ppts
F&I gross profit percentage^2	92.3 %	94.1 %	(1.8) ppts

Revenue increased as a result of contributions from new vehicle sales, higher PS&CR operating performance, and recent acquisitions, offset by declines in used vehicle revenues. Growth in new vehicle revenue was driven by higher new retail vehicle sales volumes and higher average selling prices. PS&CR gross profit increased as a result of strong customer demand for maintaining existing vehicles and recent acquisitions. F&I gross profit per retail unit average² decreased reflecting a growing proportion of retail vehicle sales being purchased without dealer financing, resulting in fewer opportunities to sell higher margin warranty and insurance products.

Adjusted EBITDA¹ was up due to contributions from stronger new vehicle sales and PS&CR operations, and recent acquisitions, partially offset by higher operating expenses and floorplan financing expenses.

U.S. Operations Highlights

	Three-Months Ended December 31
U.S. FINANCIAL RESULTS	2023	2022	% Change
REVENUE
New vehicles	81,268	62,720	29.6 %
Used vehicles	87,925	115,243	(23.7) %
Parts, service and collision repair	24,368	22,299	9.3 %
Finance, insurance and other	12,481	15,232	(18.1) %
Total revenue	206,042	215,494	(4.4) %
GROSS PROFIT
New vehicles	7,721	7,437	3.8 %
Used vehicles	(2,172)	(1,890)	(14.9) %
Parts, service and collision repair	14,679	13,653	7.5 %
Finance, insurance and other	12,480	15,105	(17.4) %
Total gross profit	32,708	34,305	(4.7) %
Gross profit percentage^2	15.9 %	15.9 %	—  ppts
Operating expenses	32,117	30,884	4.0 %
Net loss	(6,610)	(233)	(2736.9) %
Adjusted EBITDA^1	(1,508)	5,016	(130.1) %
New retail vehicles^2 sold (units)	1,419	988	43.6 %
Used retail vehicles^2 sold (units)	1,972	2,729	(27.7) %
New vehicle gross profit per retail unit^2	5,657	7,527	(24.8) %
Used vehicle gross profit per retail unit^2	(845)	(359)	(135.4) %
F&I gross profit per retail unit average^2	3,680	4,064	(9.4) %
New vehicle gross profit percentage^2	9.5 %	11.9 %	(2.4) ppts
Used vehicle gross profit percentage^2	(2.5) %	(1.6) %	(0.9) ppts
PS&CR gross profit percentage^2	60.2 %	61.2 %	(1.0) ppts
F&I gross profit percentage^2	100.0 %	99.2 %	0.8 ppts

Revenue and gross profit declined due to lower used vehicle sales and lower F&I performance offset by contributions from PS&CR operations and new vehicle sales. Used vehicle revenue declines reflect lower sales volumes which also impacted F&I through lower warranty and insurance sales. Used vehicle performance was negatively impacted by historical inventory procurement and management processes as well as market dynamics that made sourcing optimal used vehicle inventory more challenging. New vehicle sales volumes increased significantly offset by lower average selling prices as new inventory levels continued to normalize.

Adjusted EBITDA¹ declined due to lower used vehicle and F&I gross profit coupled with higher operating expenses and floorplan financing costs.

Other Recent Developments

During the quarter:

• On November 16, 2023, the Company announced that it had been awarded the rights to open a Porsche Classic & Service Centre (the "Centre") in Windsor, Ontario. The Centre will be the first Porsche Classic centre in Canada and will be a Genuine Porsche service and parts centre. It is expected to be completed in the fourth quarter of 2025.
• On November 17, 2023, the Company entered into a $25.0 million forward interest rate swap with a deferred start date of December 1, 2023 and fixed one-month Canadian Dollar Offered Rate ("CDOR") of 4.10%. The swap has an initial settlement date of December 1, 2026 and may be extended by the counterparty to December 1, 2028.
• On December 27, 2023, iA Financial Group ("iA") invested $25 million for a 10% common equity interest in AutoCanada's business unit that will sell finance, insurance and warranty products to buyers of private owner-sold vehicles on Kijiji's online marketplace ("Online C2C F&I Business"). The Company also purchased the 19.1% interest in its Used Digital Division from the Executive Chair of the Company and Other Sellers (collectively the "Minority Interest Holders") for $23.9 million in cash, funded from the proceeds of the iA investment and $7.5 million in share units issuable to the Executive Chair and issuance of performance share units ("PSUs") to the Other Sellers. The share units and PSUs will be settled through the delivery of AutoCanada shares acquired in the market. The Minority Interest Holders have agreed to use their after-tax cash proceeds to purchase AutoCanada shares in the market.

After the quarter:

• On February 1, 2024, the Company entered into a $75.0 million interest rate swap with a fixed one-month CDOR of 3.77%. The swap has an initial settlement date of February 1, 2027 and may be extended by the counterparty to February 1, 2029.
• On February 1, 2024, the Company completed the previously announced sale of two properties located in British Columbia and Alberta to CanadaOne Auto Group for cash consideration of $41.4 million plus customary closing adjustments. The land and buildings were presented on AutoCanada's balance sheet as assets held for sale as at December 31, 2023.
• On March 1, 2024, the newly built open point dealership, Maple Ridge GM, located in Maple Ridge, B.C., commenced operations. The dealership consists of a dealership and service facility with 14 service bays and is the Company's first GM dealership in the Metro Vancouver area.

Renewal of Normal Course Issuer Bid

AutoCanada announced today that it has received approval from the Toronto Stock Exchange ("TSX") for the renewal of its normal course issuer bid ("NCIB"). Pursuant to the NCIB, AutoCanada may purchase up to 1,329,106 common shares during the twelve-month period commencing March 11, 2024 and ending March 10, 2025 or such earlier date as the Company may complete its purchases under the NCIB.

The renewal of the NCIB follows on the conclusion of AutoCanada's previous NCIB that expired on December 27, 2023. From December 28, 2022 to December 27, 2023, no common shares were purchased under AutoCanada's previous NCIB.

The number of common shares authorized for purchase under the NCIB represents 10% of AutoCanada's public float as of March 4, 2024 (calculated in accordance with TSX rules). As at March 6, 2024, there were 23,611,175 common shares issued and outstanding. Purchases will be made through the facilities of the TSX and/or alternative Canadian trading systems at prevailing market prices in accordance with the rules and policies of the TSX and applicable securities laws. Daily repurchases will be limited to a maximum of 12,118 common shares, representing 25% of the average daily trading volume for the six months ended February 29, 2024, except where purchases are made in accordance with the "block purchase exception" of the TSX rules. All common shares purchased under the NCIB will be cancelled.

Although the Company has a present intention to acquire its common shares pursuant to the NCIB, the Company will not be obligated to make any purchases and purchases may be suspended by the Company at any time. The Company reserves the right to terminate the NCIB earlier if it feels it is appropriate to do so.

Conference Call

A conference call to discuss the results for the three months ended December 31, 2023 will be held on March 7, 2024 at 9:00 am Mountain (11:00 am Eastern). To participate in the conference call, please dial 1-888-664-6392 approximately 10 minutes prior to the call.

This conference call will also be webcast live over the internet and can be accessed by all interested parties at the following URL: https://investors.autocan.ca/event/2023-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, 2023, which can be found on the Company's website at www.autocan.ca or on www.sedarplus.ca.

All comparisons presented in this press release are between the three-month period ended December 31, 2023 and the three-month period ended December 31, 2022, 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". Section 14. NON-GAAP AND OTHER FINANCIAL MEASURES of the Company's Management's Discussion & Analysis for the three-month period and year ended December 31, 2023 ("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).

Consolidated Statements of Comprehensive Income
For the Years Ended
(in thousands of Canadian dollars except for share and per share amounts)

	December 31, 2023 $	December 31, 2022 $
Revenue (Note 6)	6,436,803	6,040,619
Cost of sales (Note 7)	(5,315,016)	(4,997,746)
Gross profit	1,121,787	1,042,873
Operating expenses (Note 8)	(915,263)	(811,018)
Operating profit before other income	206,524	231,855
Lease and other income (Note 10)	13,156	14,301
Gain (loss) on disposal of assets, net (Note 10)	422	(296)
Recoveries of non-financial assets (Note 19)	3,538	8,691
Operating profit	223,640	254,551
Finance costs (Note 11)	(145,939)	(131,478)
Finance income (Note 11)	3,346	4,144
Gain (loss) on redemption liabilities (Note 14)	3,639	(4,829)
Other (losses) gains, net	(321)	1,496
Income for the year before taxation	84,365	123,884
Income tax expense (Note 12)	30,584	32,824
Net income for the year	53,781	91,060
Other comprehensive income (loss)
Items that may be reclassified to profit or loss
Foreign operations currency translation	6,489	6,505
Change in fair value of cash flow hedge (Note 24)	1,800	6,650
Income tax relating to these items	(458)	(1,688)
Other comprehensive income for the year, net of tax	7,831	11,467
Comprehensive income for the year	61,612	102,527
Net income for the year attributable to:
AutoCanada shareholders	50,490	85,436
Non-controlling interests	3,291	5,624
	53,781	91,060
Comprehensive income for the year attributable to:
AutoCanada shareholders	58,321	96,903
Non-controlling interests	3,291	5,624
	61,612	102,527
Net income per share attributable to AutoCanada shareholders:
Basic	2.14	3.28
Diluted	2.06	3.03
Weighted average shares
Basic (Note 29)	23,561,236	26,050,206
Diluted (Note 29)	24,450,681	28,233,882

The accompanying notes are an integral part of these consolidated financial statements and can be found on the Company's website at www.autocan.ca or on www.sedarplus.ca.

Consolidated Statements of Financial Position
(in thousands of Canadian dollars)

	December 31, 2023 $	December 31, 2022 $
ASSETS
Current assets
Cash	103,146	108,301
Trade and other receivables (Note 15)	222,076	217,790
Inventories (Note 16)	1,154,311	979,540
Current tax recoverable	22,187	—
Other current assets (Note 20)	15,718	10,142
Assets held for sale (Note 17)	22,152	—
	1,539,590	1,315,773
Property and equipment (Note 18)	378,269	345,592
Right-of-use assets (Note 23)	405,105	396,369
Other long-term assets (Note 20)	16,708	17,298
Deferred income tax  (Note 12)	35,444	40,984
Derivative financial instruments (Note 24)	3,920	4,970
Intangible assets (Note 19)	682,137	659,261
Goodwill (Note 19)	98,266	78,084
	3,159,439	2,858,331
LIABILITIES
Current liabilities
Trade and other payables (Note 21)	238,427	229,696
Revolving floorplan facilities (Note 22)	1,174,595	992,254
Current tax payable	—	13,952
Vehicle repurchase obligations (Note 25)	1,982	2,277
Indebtedness (Note 22)	744	777
Lease liabilities (Note 23)	28,411	27,766
Redemption liabilities (Note 14)	22,580	26,219
Other liabilities (Note 26)	12,325	4,338
	1,479,064	1,297,279
Long-term indebtedness (Note 22)	562,178	554,351
Long-term lease liabilities (Note 23)	469,013	457,111
Long-term redemption liabilities (Note 14)	25,000	1,050
Derivative financial instruments (Note 24)	2,219	1,939
Other long-term liabilities (Note 26)	1,368	8,894
Deferred income tax  (Note 12)	55,768	50,910
	2,594,610	2,371,534
EQUITY
Attributable to AutoCanada shareholders	534,847	457,899
Attributable to non-controlling interests	29,982	28,898
	564,829	486,797
	3,159,439	2,858,331

The accompanying notes are an integral part of these consolidated financial statements and can be found on the Company's website at www.autocan.ca or on www.sedarplus.ca.

Consolidated Statements of Cash Flows
For the Years Ended
(in thousands of Canadian dollars)

	December 31, 2023 $	December 31, 2022 $
Cash provided by (used in): Operating activities
Net income for the year	53,781	91,060
Adjustments for:
Income tax expense (Note 12)	30,584	32,824
Finance costs (Note 11) ^1	145,939	131,478
Depreciation of right-of-use assets (Note 23)	33,443	30,781
Depreciation of property and equipment (Note 18)	25,030	20,852
Amortization of intangible assets (Note 19)	529	374
(Gain) loss on disposal of assets and lease terminations, net (Note 10)	(422)	296
Share-based compensation (Note 28)	6,485	5,410
Share-based compensation - Used Digital Division (Note 14, 28)	36,725	391
Unrealized fair value changes on foreign exchange forward contracts (Note 24)	(2,267)	(18)
Revaluation of redemption liabilities (Note 14)	(3,639)	4,829
Recoveries of non-financial assets (Note 19)	(3,538)	(8,691)
Net change in non-cash working capital (Note 34) ^1	(3,552)	(28,089)
	319,098	281,497
Income taxes paid	(58,371)	(33,114)
Interest paid ^1	(140,292)	(97,144)
Settlement of share-based awards, net	(901)	(3,641)
	119,534	147,598
Investing activities
Business acquisitions, net of cash acquired (Note 13)	(47,027)	(174,882)
Purchases of property and equipment (Note 18)	(77,416)	(52,667)
Additions to intangible assets (Note 19)	(2,102)	—
Settlement of prior year business acquisitions	817	(598)
Proceeds on sale of property and equipment	299	123
	(125,429)	(228,024)
Financing activities
Proceeds from indebtedness	674,560	1,010,006
Repayment of indebtedness	(669,334)	(770,064)
Repayment of executive advance (Note 33)	1,624	376
Repurchase of common shares under Normal Course Issuer Bid (Note 29)	—	(56,605)
Shares settled from treasury (Note 29)	353	1,768
Proceeds from exercise of stock options, net	279	8,573
Settlement of Substantial Issuer Bids (Note 29)	—	(82,542)
Dividends paid to non-controlling interests	(3,595)	(3,247)
Proceeds from sale of equity interest in 15154871 Canada Inc. (Note 14)	25,000	—
Settlement of redemption liabilities	(1,444)	—
Repayment of loan by non-controlling interests	3,083	2,162
Principal portion of lease payments (Note 23)	(28,828)	(27,214)
	1,698	83,213
Effect of exchange rate changes on cash	(958)	3,034
Net (decrease) increase in cash	(5,155)	5,821
Cash at beginning of year	108,301	102,480
Cash at end of year	103,146	108,301

^1	Certain prior year figures have been reclassified to conform to the current year presentation (Note 36)
The accompanying notes are an integral part of these consolidated financial statements and can be found on the Company's website at www.autocan.ca or on www.sedarplus.ca.

NON-GAAP AND OTHER FINANCIAL MEASURES

This press release contains certain financial measures that do not have any standardized meaning prescribed by GAAP. Therefore, these financial measures may not be comparable to similar measures presented by other issuers. Investors are cautioned these measures should not be construed as an alternative to net income (loss) or to cash provided by (used in) operating, investing, financing activities, cash, and indebtedness determined in accordance with GAAP, as indicators of our performance. We provide these additional non-GAAP measures ("Non-GAAP Measures"), capital management measures, and supplementary financial measures to assist investors in determining the Company's ability to generate earnings and cash provided by (used in) operating activities and to provide additional information on how these cash resources are used.

Adjusted EBITDA, adjusted EBITDA margin, and normalized operating expenses before depreciation are not earnings measures recognized by GAAP and do not have standardized meanings prescribed by GAAP. Investors are cautioned that these Non-GAAP Measures should not replace net earnings or loss (as determined in accordance with GAAP) as an indicator of the Company's performance, cash flows from operating, investing and financing activities or as a measure of liquidity and cash flows. The Company's methods of calculating referenced Non-GAAP Measures may differ from the methods used by other issuers. Therefore, these measures may not be comparable to similar measures presented by other issuers.

We list and define these "NON-GAAP MEASURES" below:

Adjusted EBITDA

Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) is an indicator of a company's operating performance over a period of time and ability to incur and service debt. Adjusted EBITDA provides an indication of the results generated by our principal business activities prior to:

• Interest expense (other than interest expense on floorplan financing), income taxes, depreciation, and amortization;
• Charges that introduce volatility unrelated to operating performance by virtue of the impact of external factors (such as share-based compensation amounts attributed to certain equity issuances as part of the Used Digital Division);
• Non-cash charges (such as impairment, recoveries, gains or losses on derivatives, revaluation of contingent consideration and revaluation of redemption liabilities);
• Charges outside the normal course of business (such as restructuring, gains and losses on dealership divestitures and real estate transactions); and
• Charges that are non-recurring in nature (such as provisions for settlement income).

The Company believes adjusted EBITDA provides improved continuity with respect to the comparison of our operating performance over a period of time.

Adjusted EBITDA Margin

Adjusted EBITDA margin is an indicator of a company's operating performance specifically in relation to our revenue performance.

The Company believes adjusted EBITDA margin provides improved continuity with respect to the comparison of our operating performance with retaining and growing profitability as our revenue and scale increases over a period of time.

Normalized Operating Expenses Before Depreciation

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

• Transaction costs related to acquisitions, dispositions, and open points;
• Software implementation costs associated with the configuration or customization of software as a service arrangement; and
• Share-based compensation expense.

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

NON-GAAP AND OTHER FINANCIAL MEASURES RECONCILIATIONS

Adjusted EBITDA and Segmented Adjusted EBITDA

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

	Three-Months Ended December 31, 2023				Three-Months Ended December 31, 2022
	Canada	U.S.	Total		Canada	U.S.	Total
Net (loss) income for the period	(16,020)	(6,610)	(22,630)		15,043	(233)	14,810
Add back:
Income tax expense (recovery)	4,546	(11)	4,535		9,908	86	9,994
Depreciation of right of use assets	7,943	743	8,686		7,658	668	8,326
Depreciation of property and equipment	5,787	672	6,459		5,168	496	5,664
Amortization of intangible assets ^1	128	—	128		374	—	374
Interest on long-term indebtedness	7,020	2,838	9,858		5,100	3,021	8,121
Lease liability interest	7,630	840	8,470		7,305	978	8,283
	17,034	(1,528)	15,506		50,556	5,016	55,572
Add back:
Recoveries of non-financial assets	(3,538)	—	(3,538)		(8,691)	—	(8,691)
Share-based compensation - Used Digital Division	36,725	—	36,725		391	—	391
(Gain) loss on redemption liabilities	(3,639)	—	(3,639)		4,829	—	4,829
Unrealized fair value changes in derivative instruments	(1,437)	—	(1,437)		(2,496)	—	(2,496)
Amortization of loss on terminated hedges	616	—	616		817	—	817
Unrealized foreign exchange losses	108	—	108		497	—	497
Used Digital Division transaction costs	1,774	—	1,774		—	—	—
Software implementation costs	677	—	677		—	—	—
(Gain) loss on disposal of assets	(375)	20	(355)		124	—	124
Adjusted EBITDA	47,945	(1,508)	46,437		46,027	5,016	51,043

1	The Company has revised the comparative figure to back out $374 of amortization of intangible assets.

Adjusted EBITDA Margin

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

	2023	2022
Adjusted EBITDA ^1	46,437	51,043
Revenue	1,483,794	1,388,206
Adjusted EBITDA Margin	3.1 %	3.7 %

1	The Company has revised the comparative figure to back out $374 of amortization of intangible assets.

Normalized Operating Expenses Before Depreciation

The following table illustrates segmented normalized operating expenses before depreciation for the three-month periods ended December 31:

	Three-Months Ended December 31, 2023				Three-Months Ended December 31, 2022
	Canada	U.S.	Total		Canada	U.S.	Total
Operating expenses	218,699	32,117	250,816		166,513	30,884	197,397
Deduct:
Depreciation of right of use assets	(7,943)	(743)	(8,686)		(7,658)	(668)	(8,326)
Depreciation of property and equipment	(5,787)	(672)	(6,459)		(5,168)	(496)	(5,664)
Amortization of intangible assets	(128)	—	(128)		(374)	—	(374)
Operating expenses before depreciation	204,841	30,702	235,543		153,313	29,720	183,033
Normalizing Items:
Add back:
Acquisition-related costs (including Used Digital Division transaction costs)	(2,415)	—	(2,415)		(2,239)	—	(2,239)
Software implementation costs	(677)	—	(677)		—	—	—
Share-based compensation expense	(38,533)	—	(38,533)		(2,084)	—	(2,084)
Normalized operating expenses before depreciation	163,216	30,702	193,918		148,990	29,720	178,710

Forward Looking Statements

Certain statements contained in this press release are forward-looking statements and information (collectively "forward-looking statements"), within the meaning of the applicable Canadian securities legislation. We hereby provide cautionary statements identifying important factors that could cause actual results to differ materially from those projected in these forward-looking statements. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions, or future events or performance (often, but not always, through the use of words or phrases such as "will likely result", "are expected to", "will continue", "is anticipated", "projection", "vision", "goals", "objective", "target", "schedules", "outlook", "anticipate", "expect", "estimate", "could", "should", "plan", "seek", "may", "intend", "likely", "will", "believe", "shall" and similar expressions) are not historical facts and are forward-looking and may involve estimates and assumptions and are subject to risks, uncertainties and other factors some of which are beyond our control and difficult to predict.

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

Details of the Company's material forward-looking statements are included in the Company's most recent Annual Information Form for the year ended December 31, 2023 (the "AIF"). The AIF and other documents filed with securities regulatory authorities (accessible through the SEDAR website www.sedarplus.ca) describe the risks, material assumptions, and other factors that could influence actual results and which are incorporated herein by reference.

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

About AutoCanada

AutoCanada is a leading North American multi-location automobile dealership group currently operating 84 franchised dealerships, comprised of 28 brands, in eight provinces in Canada as well as a group in Illinois, USA. AutoCanada currently sells Acura, Alfa Romeo, Audi, BMW, Buick, Cadillac, Chevrolet, Chrysler, Dodge, FIAT, Ford, GMC, Honda, Hyundai, Infiniti, Jeep, Kia, Lincoln, Mazda, Mercedes-Benz, MINI, Nissan, Porsche, Ram, Subaru, Toyota, Volkswagen, and Volvo branded vehicles. In addition, AutoCanada's Canadian Operations segment currently operates 3 used vehicle dealerships and 1 used vehicle auction business supporting the Used Digital Retail Division, 13 RightRide division locations, and 11 stand-alone collision centres within our group of 27 collision centres. In 2023, the Company generated revenue in excess of $6 billion and our dealerships sold over 100,000 retail vehicles.

Additional Information

Additional information about AutoCanada is available at the Company's website at www.autocan.ca and www.sedarplus.ca.

SOURCE AutoCanada Inc.

Azim Lalani, Chief Financial Officer, Phone: [phone], Email: [email protected]