AutoCanada Inc. Announces Record Quarterly Results with 45.4% Increase in EPS, Management Realignment and Appointment of Director

EDMONTON, Nov. 6, 2014 /CNW/ - AutoCanada Inc. (the "Company" or "AutoCanada") (TSX: ACQ) today announced financial results for the reporting period ended September 30, 2014.

2014 Third Quarter Highlights
	Revenue increased 82.0% or $330.5 million to $733.4 million Revenue excluding the impact of the GM consolidation increased 45.3% or $182.6 million Gross profit increased by 77.1% or $52.2 million to $119.9 million Gross profit excluding the impact of the GM consolidation increased 41.4% or $28.0 million Adjusted EBITDA increased by 63.5% or $10.8 million to $27.8 million EBITDA increased 72.9% to $28.7 million from $16.6 million in Q3 of 2013 Pre-tax earnings attributable to AutoCanada shareholders increased by $7.7 million or 51.7% to $22.6 million Adjusted net earnings attributable to AutoCanada shareholders increased by $5.9 million or 52.7% to $17.1 million Net earnings attributable to AutoCanada shareholders increased by $6.8 million or 61.8% to $17.8 million Adjusted net earnings per share increased by 36.5% to $0.71 from $0.52 Earnings per share increased by 45.4% to $0.74 from $0.51 Same store revenue increased by 8.9% Same store gross profit increased by 11.4% Same store new vehicle retail revenue increased by 7.8% Same store used vehicles retail revenue increased by 3.4% Same store parts, service and collision repair revenue increased by 9.9%

In commenting on the third quarter of 2014, Pat Priestner, Chairman and Chief Executive Officer of AutoCanada Inc., stated that, "Our third quarter results are reflective of the acquisitions we've completed over the past 12 months and Management's continued focus on improving same store results.  We are very pleased to have achieved an 8.9% increase in same store revenue and an 11.4% increase in same store gross profit, which, along with new dealerships, contributed to the best quarterly results we've ever achieved."

We continue to be very pleased with the quality of dealerships we acquired during the quarter, which includes a part of the Hyatt Group of Dealerships in Calgary, our largest acquisition to date; Tower Chrysler Jeep Dodge Ram, a high volume dealership located in Calgary as well; Lakewood Chevrolet, an extremely well run dealership located in our home market of Edmonton; as well as Toronto Chrysler Jeep Dodge Ram, a metro-Toronto dealership which we believe will provide positive results for the Company." 

Mr. Priestner further added, "We thank our dealer partners, our dealership staff, and our staff here at dealer support services for their hard work and continued focus on improving our new vehicle retail sales volumes and improving the customer experience."

Third Quarter 2014 Highlights

• The Company generated net earnings attributable to AutoCanada shareholders of $17.8 million or earnings per share of $0.737 versus earnings per share of $0.507 in the third quarter of 2013.  Pre-tax earnings attributable to AutoCanada shareholders increased by $7.7 million to $22.6 million in the third quarter of 2014 as compared to $14.9 million in the same period in 2013.

• Same store revenue increased by 8.9% in the third quarter of 2014, compared to the same quarter in 2013.  Same store gross profit increased by 11.4% in the third quarter of 2014, compared to the same quarter in 2013.

• Revenue from existing and new dealerships increased 82.0% to $733.4 million in the third quarter of 2014 from $402.8 million in the same quarter in 2013

• Gross profit from existing and new dealerships increased 77.1% to $119.9 million in the third quarter of 2014 from $67.7 million in the same quarter in 2013.

• EBITDA increased 72.9% to $28.7 million in the third quarter of 2014 from $16.6 million in the same quarter in 2013.

• Free cash flow decreased to $6.3 million in the third quarter of 2014 or $0.26 per share as compared $7.1 million or $0.33 per share in the third quarter of 2013.

• Adjusted free cash flow increased to $22.1 million in the third quarter of 2014 or $0.92 per share as compared to $16.8 million or $0.78 per share in 2013.

Dividends

Management reviews the Company's financial results on a monthly basis.  The Board of Directors reviews the financial results on a quarterly basis, or as requested by Management, and determine whether a dividend shall be paid based on a number of factors. 

The following table summarizes the dividends declared by the Company in 2014:

(In thousands of dollars)
				Total
Record date	Payment date				Declared		Paid
					$		$
February 28, 2014	March 17, 2014				4,760		4,760
May 30, 2014 August 29, 2014	June 16, 2014 September 15, 2014				5,022 5,882		5,022 5,882

On November 6, 2014, the Board declared a quarterly eligible dividend of $0.25 per common share on AutoCanada's outstanding Class A common shares, payable on December 15, 2014 to shareholders of record at the close of business on November 28, 2014.  The quarterly eligible dividend of $0.25 represents an annual dividend rate of $1.00 per share.

Eligible dividend designation

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 Inc. designating dividends as "eligible dividends".

Management Realignment

In response to the rapid growth of the Company, and the addition of both dealerships and Manufacturer partners, the Company announces effective 1 January 2015, the following:

1. Pat Priestner's five year employment agreement expiring 31 May 2019, has been amended to focus Mr. Priestner's time and attention on key drivers of long-term shareholder value including strategic initiatives, acquisitions, Manufacturer and Dealer relations, in the capacity of Executive Chair;
2. Tom Orysiuk shall become CEO in addition to President, with a focus on assisting the Executive Chair with strategy, Manufacturer and Dealer relations, and shall be responsible for overall operational direction and performance;
3. Steve Rose shall become Chief Operating Officer, assisting the President & CEO with a focus on operational direction and execution; and
4. Erin Oor shall become VP Corporate Development and Administration, with a focus on corporate development initiatives and oversight of certain administrative aspects of the business, and to continue with his general counsel duties pending appointment of his replacement in such regard.

Gordon Barefoot, Lead Director, stated that "Having grown to 46 dealerships and 12 Manufacturer partners from the original 14 and 3, respectively, the need to realign senior management duties became apparent if management was to continue to deliver above average dealership operational performance while simultaneously executing a growth plan. These changes recognize and formalize the evolution of the management team which began earlier this year with the appointment of Erin Oor as General Counsel and VP Administration in June, 2014, Chris Burrows as Vice-President & Chief Financial Officer in September 2014, and Jeff Christie, formerly VP Finance, as VP Operations, in September 2014, and which has culminated in the further appointments announced today, all of which best support the future growth and operations of the Company and better direct each Executive's time and attention on those matters which best drive long term shareholder value."

Pat Priestner, CEO, stated "I am very pleased with the realignment. Tom Orysiuk has worked closely with me over the past nine years and shall be an excellent CEO, being well grounded in both operations and the culture of dealerships, allowing me to focus on those areas where I can best drive long term shareholder value. Steve Rose has closely partnered with both Tom and myself during that same period and will continue to bring a broad and deep background in auto retail and business operations generally, while assuming a greater degree of operational responsibility to the Company. Both Tom and Steve have been integral to the growth and operational success of the Company, and with the appointment of Jeff Christie to Sales Operations, and the addition of Chris Burrows and Erin Oor, I believe we have the senior management team that we need to provide a sustainable operational and growth model that will drive long-term shareholder value."

Appointment of Director

Mr. Gordon Barefoot, Lead Director of the Board of Directors stated, "I welcome to the Board of Directors Mr. Barry James who, with more than 35 years as an experienced business professional with substantial board experience, will contribute significant counsel and expertise."

Barry was previously Managing Partner of the Edmonton office of PricewaterhouseCoopers LLP, a position he held for ten years. Barry received a Bachelor of Commerce (with Distinction) degree from the University of Alberta in 1980, qualified as a CA in 1983 and became a Fellow of the Chartered Accountants in 2007.  He joined PwC in 1977 and was admitted to the partnership in 1989. He was the Managing Partner of the Edmonton office from July 2001 to June 2011. 

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 Operating Data and gross profit %)		Q4 2012	Q1 2013	Q2 2013	Q3 2013	Q4 2013	Q1 2014	Q2 2014	Q3 2014*
Income Statement Data
	New vehicles	159,026	174,279	254,261	257,222	197,097	216,524	289,946	457,198
	Used vehicles	57,260	62,656	77,113	85,975	75,137	85,968	102,025	158,779
	Parts, service and collision repair	29,920	29,515	34,456	37,100	41,250	40,717	45,423	78,371
	Finance, insurance and other	14,931	17,604	22,557	22,532	20,271	21,134	26,382	39,002
Revenue		261,137	284,054	388,387	402,829	333,775	364,343	463,776	733,350
	New vehicles	15,527	16,039	20,792	20,694	18,326	17,813	23,825	35,711
	Used vehicles	3,637	3,789	5,794	6,240	4,450	5,550	6,506	9,637
	Parts, service and collision	15,418	15,232	17,586	20,115	20,822	20,593	23,373	38,942
	Finance and insurance and other	13,788	16,082	20,678	20,669	18,738	19,517	24,340	35,615
Gross profit		48,370	51,142	64,850	67,718	62,336	63,473	78,044	119,905
Gross Profit %		18.5%	18.0%	16.7%	16.8%	18.7%	17.4%	16.8%	16.4 %
Operating expenses		37,739	40,353	48,639	51,080	48,447	50,402	58,920	89,713
Operating exp. as a % of gross profit		78.0%	78.9%	75.0%	75.4%	77.7%	79.4%	75.5%	74.8%
Finance costs ‑ floorplan		1,859	1,675	1,888	1,903	1,887	1,965	2,146	3,003
Finance costs ‑ long term debt		257	237	218	163	388	764	1,844	2,646
Reversal of impairment of intangibles		(222)	-	-	-	(746)	-	-	-
Income from investments in associates		255	201	648	555	836	893	2,238	359
Income tax		2,540	2,309	3,976	3,920	3,490	2,881	4,477	5,524
Net earnings attributable AutoCanada shareholders (3)		6,606	6,822	10,822	10,969	9,552	8,296	12,830	17,765
EBITDA (1)(3)		10,299	10,557	16,532	16,626	14,754	14,453	21,702	28,673
Basic earnings per share		0.334	0.345	0.532	0.507	0.441	0.383	0.588	0.737
Diluted earnings per share		0.334	0.345	0.532	0.507	0.441	0.383	0.588	0.737
Operating Data
Vehicles (new and used) sold, excluding GM		6,703	7,341	10,062	10,325	8,046	8,766	9,887	14,966
Vehicles (new and used) sold including GM (4)		7,378	8,123	11,399	11,405	9,209	9,945	12,414	18,079
New vehicles sold including GM (4)		4,956	5,665	8,246	8,023	6,090	6,570	8,658	12,821
New retail vehicles sold		3,982	4,118	5,487	5,986	4,932	4,773	5,980	10,686
New fleet vehicles sold		549	1,036	1,923	1,365	552	1,132	1,146	2,135
Used retail vehicles sold		2,172	2,187	2,652	2,974	2,562	2,861	2,761	5,258
Number of service & collision repair orders completed		78,001	77,977	93,352	97,074	95,958	91,999	97,559	198,612
Absorption rate (1)		89%	85%	82%	90%	90%	85%	92%	93%
# of dealerships at period end		24	25	27	29	28	28	34	45
# of same store dealerships (2)		22	22	22	22	21	23	23	23
# of service bays at period end		333	341	368	413	406	406	516	734
Same store revenue growth (2)		7.4%	12.9%	26.2%	19.9%	8.9%	13.0%	4.1%	8.9%
Same store gross profit growth (3)		11.9%	16.9%	25.8%	18.5%	9.2%	8.1%	5.4%	11.4%
Balance Sheet Data
Cash and cash equivalents		34,471	41,991	35,058	37,940	35,113	41,541	91,622	64,559
Restricted cash		10,000	10,000	10,000	-	-	-	-	-
Trade and other receivables		47,944	57,144	69,136	62,105	57,771	69,422	85,266	115,074
Inventories		199,085	217,663	232,837	236,351	278,091	261,768	324,077	471,664
Revolving floorplan facilities		203,525	225,387	246,325	228,526	264,178	261,263	313,752	437,935

*     In conjunction with the business combination under common control completed on July 11, 2014, the Selected Quarterly Financial Information for Q3 2014 includes the consolidated results of the Company's GM stores.
	All financial information includes 100% of the results of the GM stores, except for Net earnings, EBITDA, and EPS amounts, which are presented net of non-controlling interests.
1	EBITDA and absorption rate have been calculated as described under "NON-GAAP MEASURES".
2	Same store revenue growth & same store gross profit growth is calculated using franchised automobile dealerships that we have owned for at least 2 full years, excluding the GM stores, as these stores have been treated as acquisitions as at July 11, 2014.
3	The results from operations have been lower in the first and fourth quarters of each year, largely due to consumer purchasing patterns during the holiday season, inclement weather and the reduced number of business days during the holiday season. As a result, our financial performance is generally not as strong during the first and fourth quarters than during the other quarters of each fiscal year. The timing of acquisitions may have also caused substantial fluctuations in operating results from quarter to quarter.
4	Until June 30, 2014, the Company had investments in General Motors dealerships that were not consolidated. In Q3 2014, these GM dealerships were consolidated. This number includes 100% of vehicles sold by these dealerships in which we have less than 100% investment.

The following table summarizes the results for the three and nine month periods ended September 30, 2014 on a same store basis by revenue source and compares these results to the same period in 2013. 

Same Store Revenue and Vehicles Sold
		For the Three Months Ended			For the Nine Months Ended
(in thousands of dollars)		September 30, 2014	September 30, 2013	% Change	September 30, 2014	September 30, 2013	% Change
Revenue Source
	New vehicles - retail	202,321	187,603	7.8 %	555,321	513,202	8.2 %
	New vehicles - fleet	37,333	38,203	(2.3)%	110,225	122,240	(9.8)%
New vehicles		239,654	225,806	6.1 %	665,546	635,442	4.7 %
	Used vehicles - retail	58,599	56,646	3.4 %	175,101	157,729	11.0 %
	Used vehicles - wholesale	30,612	20,176	51.7 %	73,769	52,930	39.4 %
Used vehicles		89,211	76,822	16.1 %	248,870	210,659	18.1 %
Finance, insurance and other		22,286	19,959	11.7 %	62,987	58,113	8.4 %
Subtotal		351,151	322,587	8.9 %	977,403	904,214	8.1 %
Parts, service and collision repair		33,631	30,601	9.9 %	99,227	90,027	10.2 %
Total		384,782	353,188	8.9 %	1,076,630	994,241	8.3 %
New retail vehicles sold		5,417	5,223	3.7 %	14,922	14,400	3.6 %
New fleet vehicles sold		1,215	1,308	(7.1)%	3,368	4,241	(20.6)%
Used retail vehicles sold		2,523	2,614	(3.5)%	7,559	7,280	3.8 %
Total		9,155	9,145	0.1 %	25,849	25,921	(0.3)%
Total vehicles retailed		7,940	7,837	1.3 %	22,481	21,680	3.7 %

The following table summarizes the results for the three and nine month periods ended September 30, 2014 on a same store basis by revenue source and compares these results to the same period in 2013.

Same Store Gross Profit and Gross Profit Percentage
			For the Three Months Ended
		Gross Profit			Gross Profit %
(in thousands of dollars)		September 30, 2014	September 30, 2013	% Change	September 30, 2014	September 30, 2013	Change
Revenue Source
	New vehicles - Retail	21,623	17,922	20.7 %	10.7 %	9.6 %	1.1 %
	New vehicles - Fleet	350	309	13.3 %	0.9 %	0.8 %	0.1 %
	New vehicles	21,973	18,231	20.5 %	9.2 %	8.1 %	1.1 %
	Used vehicles - Retail	3,916	4,221	(7.2)%	6.7 %	7.5 %	(0.8)%
	Used vehicles - Wholesale	540	1,156	(53.3)%	1.8 %	5.7 %	(3.9)%
	Used vehicles	4,456	5,377	(17.1)%	5.0 %	7.0 %	(2.0)%
	Finance, insurance and other	20,444	18,192	12.4 %	91.7 %	91.1 %	0.6 %
	Subtotal	46,873	41,800	12.1 %	13.3 %	13.0 %	0.3 %
	Parts, service and collision	18,476	16,887	9.4 %	54.9 %	55.2 %	(0.3)%
	Total	65,349	58,687	11.4 %	17.0 %	16.6 %	0.4%

			For the Nine Months Ended
	Gross Profit			Gross Profit %
(in thousands of dollars)	September 30, 2014	September 30, 2013	% Change	September 30, 2014	September 30, 2013	Change
Revenue Source
New vehicles - Retail	57,205	52,791	8.4 %	10.3 %	10.3 %	- %
New vehicles - Fleet	589	832	(29.2)%	0.5 %	0.7 %	(0.2)%
New vehicles	57,794	53,623	7.8 %	8.7 %	8.4 %	0.3 %
Used vehicles - Retail	12,636	12,291	2.8 %	7.2 %	7.8 %	(0.6)%
Used vehicles - Wholesale	2,407	2,383	1.0 %	3.3 %	4.5 %	(1.2)%
Used vehicles	15,043	14,674	2.5 %	6.0 %	7.0 %	(1.0)%
Finance, insurance and other	57,733	53,114	8.7 %	91.7 %	91.4 %	0.3 %
Subtotal	130,570	121,411	7.5 %	13.4 %	13.4 %	- %
Parts, service and collision	52,467	47,470	10.5 %	52.9 %	52.7 %	0.2%
Total	183,037	168,881	8.4 %	17.0 %	17.0 %	- %

Condensed Interim Consolidated Statements of Comprehensive Income
(Unaudited)
(in thousands of Canadian dollars except for share and per share amounts)
	Three month period ended	Three month period ended	Nine month period ended	Nine month period ended
	September 30, 2014 $	September 30, 2013 $	September 30, 2014 $	September 30, 2013 $
Revenue	733,350	402,829	1,561,471	1,075,270
Cost of sales	(613,445)	(335,111)	(1,300,050)	(891,559)
Gross profit	119,905	67,718	261,421	183,711
Operating expenses	(89,713)	(51,080)	(199,035)	(140,072)
Operating profit before other income (expense)	30,192	16,638	62,386	43,639
Gain (loss) on disposal of assets, net	(1)	(27)	36	(34)
Income from investments in associates	359	555	3,490	1,405
Operating profit	30,550	17,166	65,912	45,010
Finance costs	(6,007)	(2,593)	(13,509)	(7,094)
Finance income	808	316	1,431	903
Net income for the period before taxation	25,351	14,889	53,834	38,819
Income tax	5,524	3,920	12,882	10,205
Net and comprehensive income for the period	19,827	10,969	40,952	28,614
Net and comprehensive income attributable to:
AutoCanada shareholders	17,765	10,969	38,890	28,614
Non‑controlling interests	2,062	-	2,062	-
	19,827	10,969	40,952	28,614
Earnings per share
Basic	0.737	0.507	1.725	1.389
Diluted	0.737	0.507	1.725	1.389
Weighted average shares
Basic	24,103,670	21,638,882	22,549,631	20,606,391
Diluted	24,103,670	21,638,882	22,549,631	20,606,391

Condensed Interim Consolidated Statements of Financial Position
(Unaudited)
(in thousands of Canadian dollars)
					September 30,	December 31,
					2014	2013
					$	$
ASSETS
Current assets
Cash and cash equivalents					64,559	35,113
Trade and other receivables					115,074	57,771
Inventories					471,664	278,091
Current finance lease receivables					4,426	-
Other current assets					6,870	1,603
					662,593	372,578
Property and equipment					177,585	122,915
Investments in associates					-	13,131
Intangible assets					331,533	96,985
Goodwill					24,868	6,672
Finance lease receivables					7,394	-
Other long‑term assets					7,554	6,797
					1,211,527	619,078
LIABILITIES
Current liabilities
Trade and other payables					95,084	50,428
Revolving floorplan facilities					437,935	264,178
Current tax payable					10,460	4,906
Current lease obligations					3,238	1,398
Current indebtedness					5,045	2,866
					551,762	323,776
Long‑term lease obligations					13	-
Long‑term indebtedness					179,434	83,580
Deferred income tax					23,962	21,480
Non‑controlling interests ‑ liability					11,787	-
					766,958	428,836
EQUITY
Attributable to AutoCanada shareholders					413,083	190,242
Attributable to Non‑controlling interests					31,486	-
					444,569	190,242
					1,211,527	619,078

Condensed Interim Consolidated Statements of Changes in Equity
For the Periods Ended
(Unaudited)
(in thousands of Canadian dollars)
	Attributable to AutoCanada shareholders
	Share capital $	Contributed surplus $	Accumulated deficit $	Total $	Non‑controlling interests $	Total Equity $
Balance,  January 1, 2014	232,938	4,758	(47,454)	190,242	-	190,242
Net and comprehensive income	-	-	38,890	38,890	2,062	40,952
Dividends declared on common shares	-	-	(15,640)	(15,640)	-	(15,640)
Non‑controlling interests arising on business combinations	-	-	-	-	30,059	30,059
Dividends declared by subsidiaries to non‑controlling interests	-	-	-	-	(635)	(635)
Common shares issued	201,746	-	-	201,746	-	201,746
Treasury shares acquired	(2,751)	-	-	(2,751)	-	(2,751)
Shares settled from treasury	755	(760)	-	(5)	-	(5)
Share‑based compensation	-	601	-	601	-	601
Balance, September 30, 2014	432,688	4,599	(24,204)	413,083	31,486	444,569

	Attributable to AutoCanada shareholders
	Share capital $	Contributed surplus $	Accumulated deficit $	Total $	Non‑controlling  interests $	Total Equity $
Balance, January 1, 2013	189,500	4,423	(69,423)	124,500	-	124,500
Net and comprehensive income	-	-	28,614	28,614	-	28,614
Dividends declared on common shares	-	-	(11,647)	(11,647)	-	(11,647)
Common shares issued	43,811	-	-	43,811	-	43,811
Treasury shares acquired	(557)	-	-	(557)	-	(557)
Shares settled from treasury	202	-	-	202	-	202
Share‑based compensation	-	139	-	139	-	139
Balance, September 30, 2013	232,956	4,562	(52,456)	185,062	-	185,062

Condensed Interim Consolidated Statements of Cash Flows
(Unaudited)
(in thousands of Canadian dollars)
			Three month period ended September 30, 2014	Three month period ended September 30, 2013	Nine month period ended September 30, 2014	Nine month period ended September 30, 2013
Cash flows from operating activities:
Net and comprehensive income			19,827	10,969	40,952	28,614
Deferred income taxes			72	4,505	(9,399)	(1,587)
Amortization of prepaid rent			113	113	339	339
Amortization of property and equipment			4,139	1,599	9,200	4,278
Loss (gain) on disposal of assets			1	27	(36)	34
Share‑based compensation ‑ equity‑settled			269	135	601	139
Share‑based compensation ‑ cash‑settled			(629)	616	1,217	1,605
Income from investments in associates			(359)	(555)	(3,490)	(1,405)
Gain on embedded derivative			(241)	-	(241)	-
Net change in non‑cash working capital			(14,099)	(9,622)	(11,741)	(3,705)
			9,093	7,787	27,402	28,312
Cash flows from investing activities:
Business acquisitions, net of cash acquired			(101,820)	(38,756)	(210,356)	(65,368)
Investments in associates			-	-	(43,900)	(7,057)
Dividends received from investments in associates			-	421	1,458	421
Combination of entities under common control			4,699	-	4,699	-
Purchases of property and equipment			(4,331)	(677)	(13,368)	(7,437)
Proceeds on sale of property and equipment			6	3,239	20	3,254
Reduction in restricted cash			-	10,000	-	10,000
			(101,446)	(25,773)	(261,447)	(66,187)
Cash flows from financing activities:
Proceeds from long‑term indebtedness			-	25,094	146,942	41,593
Repayment of long‑term indebtedness			(119,472)	(146)	(202,033)	(31,900)
Common shares repurchased			(38)	-	(2,751)	(513)
Dividends paid			(5,858)	(4,291)	(15,640)	(11,647)
Dividends paid to non‑controlling interests by subsidiaries			(635)	-	(635)	-
Proceeds from issuance of common shares			191,293	211	191,293	43,811
Proceeds from senior unsecured notes			-	-	146,315	-
			65,290	20,868	263,491	41,344
Increase (decrease) in cash			(27,063)	2,882	29,446	3,469
Cash and cash equivalents at beginning of period			91,622	35,058	35,113	34,471
Cash and cash equivalents at end of period			64,559	37,940	64,559	37,940

ABOUT AUTOCANADA

AutoCanada is one of Canada's largest multi-location automobile dealership groups, currently operating 46 franchised dealerships in eight provinces and has over 3,600 employees. AutoCanada currently sells Chrysler, Dodge, Jeep, Ram, FIAT, Chevrolet, GMC, Buick, Cadillac, Infiniti, Nissan, Hyundai, Subaru, Mitsubishi, Audi, Volkswagen, Kia, BMW and MINI branded vehicles. In 2013, our dealerships sold approximately 36,000 vehicles and processed approximately 364,000 service and collision repair orders in our 406 service bays during that time.

AutoCanada est l'un des plus importants groupes de concessions automobiles à établissements multiples du Canada. Elle exploite actuellement 46 concessions franchisées dans huit provinces et emploie plus de 3 600 employé(e)s. AutoCanada vend actuellement des véhicules de marques Chrysler, Dodge, Jeep, Ram, FIAT, Chevrolet, GMC, Buick, Cadillac, Infiniti, Nissan, Hyundai, Subaru, Mitsubishi, Audi, Volkswagen, Kia, BMW et MINI. En 2013, nos concessions ont vendu environ 36 000 véhicules et traité environ 364 000 demandes d'entretien et de réparation par suite de collision à nos 406 aires de service.  D'autres renseignements sur AutoCanada Inc. sont disponibles sur le site www.sedar.com et sur le site Web de l'entreprise à l'adresse www.autocan.ca.  

Our dealerships derive their revenue from the following four inter-related business operations: new vehicle sales; used vehicle sales; parts, service and collision repair; and finance and insurance. While new vehicle sales are the most important source of revenue, they generally result in lower gross profits than parts, service and collision repair operations and finance and insurance sales. Overall gross profit margins increase as revenues from higher margin operations increase relative to revenues from lower margin operations. We earn fees for arranging financing on new and used vehicle purchases on behalf of third parties.  Under our agreements with our retail financing sources we are required to collect and provide accurate financial information, which if not accurate, may require us to be responsible for the underlying loan provided to the consumer. 

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 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", "expect", "plan", "seek", "may", "intend", "likely", "will", "believe" 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.

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

EBITDA

EBITDA is a measure commonly reported and widely used by investors as an indicator of a company's operating performance and ability to incur and service debt, and as a valuation metric.  The Company believes EBITDA assists investors in comparing a company's performance on a consistent basis without regard to depreciation and amortization and asset impairment charges which are non-cash in nature and can vary significantly depending upon accounting methods or non-operating factors such as historical cost.  References to "EBITDA" are to earnings before interest expense (other than interest expense on floorplan financing and other interest), income taxes, depreciation, amortization and asset impairment charges.

Adjusted EBITDA

Adjusted EBITDA is an indicator of a company's operating performance and ability to incur and service debt prior to recognizing the portion of share‑based compensation related to changes in the share price and its impact on the Company's cash‑settled portions of its share‑based compensation programs. The Company considers this expense to be non-cash in nature as we maintain a share purchase trust in which we purchase shares on the open market as these units are granted to reduce the cash flow risk associated with fluctuations in the share price. Share‑based compensation, a component of employee remuneration, can vary significantly with changes in the price of the Company's common shares. The Company believes adjusted EBITDA provides improved continuity with respect to the comparison of our operating results over a period of time.

Adjusted Net Earnings and Adjusted Net Earnings per Share

Adjusted net earnings and adjusted net earnings per share are measures of our profitability. Adjusted net earnings is calculated by adding back the after‑tax effect of impairment or reversals of impairment of intangible assets, impairments of goodwill, and the portion of share‑based compensation related to changes in the share price and its impact on the Company's cash‑settled portions of its share‑based compensation programs. The Company considers this expense to be non-cash in nature as we maintain a share purchase trust in which we purchase shares on the open market as these units are granted to reduce the cash flow risk associated with fluctuations in the share price. Share‑based compensation, a component of employee remuneration, can vary significantly with changes in the price of the Company's common shares. Adding back these amounts to net earnings allows management to assess the net earnings of the Company from ongoing operations. Adjusted net earnings per share is calculated by dividing adjusted net earnings by the weighted‑average number of shares outstanding.

EBIT

EBIT is a measure used by management in the calculation of Return on capital employed (defined below).  Management's calculation of EBIT is EBITDA (calculated above) less depreciation and amortization.

Free Cash Flow

Free cash flow is a measure used by management to evaluate its performance.  While the closest Canadian GAAP measure is cash provided by operating activities, free cash flow is considered relevant because it provides an indication of how much cash generated by operations is available after capital expenditures.  It shall be noted that although we consider this measure to be free cash flow, financial and non-financial covenants in our credit facilities and dealer agreements may restrict cash from being available for distributions, re-investment in the Company, potential acquisitions, or other purposes.  Investors should be cautioned that free cash flow may not actually be available for growth or distribution of the Company.  References to "Free cash flow" are to cash provided by (used in) operating activities (including the net change in non-cash working capital balances) less capital expenditures (not including acquisitions of dealerships and dealership facilities).

Adjusted Free Cash Flow

Adjusted free cash flow is a measure used by management to evaluate its performance.  Adjusted free cash flow is considered relevant because it provides an indication of how much cash generated by operations before changes in non-cash working capital is available after deducting expenditures for non-growth capital assets.  It shall be noted that although we consider this measure to be adjusted free cash flow, financial and non-financial covenants in our credit facilities and dealer agreements may restrict cash from being available for distributions, re-investment in the Company, potential acquisitions, or other purposes.  Investors should be cautioned that adjusted free cash flow may not actually be available for growth or distribution of the Company.  References to "Adjusted free cash flow" are to cash provided by (used in) operating activities (before changes in non-cash working capital balances) less non-growth capital expenditures.

Adjusted Average Capital Employed

Adjusted average capital employed is a measure used by management to determine the amount of capital invested in AutoCanada and is used in the measure of Adjusted Return on Capital Employed (described below).  Adjusted average capital employed is calculated as the average balance of interest bearing debt for the period (including current portion of long term debt, excluding revolving floorplan facilities) and the average balance of shareholders equity for the period, adjusted for impairments of intangible assets, net of deferred tax.  Management does not include future income tax, non-interest bearing debt, or revolving floorplan facilities in the calculation of adjusted average capital employed as it does not consider these items to be capital, but rather debt incurred to finance the operating activities of the Company.

Absorption Rate

Absorption rate is an operating measure commonly used in the retail automotive industry as an indicator of the performance of the parts, service and collision repair operations of a franchised automobile dealership. Absorption rate is not a measure recognized by GAAP and does not have a standardized meaning prescribed by GAAP. Therefore, absorption rate may not be comparable to similar measures presented by other issuers that operate in the retail automotive industry.  References to ''absorption rate'' are to the extent to which the gross profits of a franchised automobile dealership from parts, service and collision repair cover the costs of these departments plus the fixed costs of operating the dealership, but does not include expenses pertaining to our head office. For this purpose, fixed operating costs include fixed salaries and benefits, administration costs, occupancy costs, insurance expense, utilities expense and interest expense (other than interest expense relating to floor plan financing) of the dealerships only. 

Average Capital Employed

Average capital employed is a measure used by management to determine the amount of capital invested in AutoCanada and is used in the measure of Return on Capital Employed (described below).  Average capital employed is calculated as the average balance of interest bearing debt for the period (including current portion of long term debt, excluding revolving floorplan facilities) and the average balance of shareholders equity for the period.  Management does not include future income tax, non-interest bearing debt, or revolving floorplan facilities in the calculation of average capital employed as it does not consider these items to be capital, but rather debt incurred to finance the operating activities of the Company.

Return on Capital Employed

Return on capital employed is a measure used by management to evaluate the profitability of our invested capital.  As a corporation, management of AutoCanada may use this measure to compare potential acquisitions and other capital investments against our internally computed cost of capital to determine whether the investment shall create value for our shareholders.  Management may also use this measure to look at past acquisitions, capital investments and the Company as a whole in order to ensure shareholder value is being achieved by these capital investments.  Return on capital employed is calculated as EBIT (defined above) divided by Average Capital Employed (defined above).

Adjusted Return on Capital Employed

Adjusted return on capital employed is a measure used by management to evaluate the profitability of our invested capital.  As a corporation, management of AutoCanada may use this measure to compare potential acquisitions and other capital investments against our internally computed cost of capital to determine whether the investment shall create value for our shareholders.  Management may also use this measure to look at past acquisitions, capital investments and the Company as a whole in order to ensure shareholder value is being achieved by these capital investments.  Adjusted return on capital employed is calculated as EBIT (defined above) divided by Adjusted Average Capital Employed (defined above).

Cautionary Note Regarding Non-GAAP Measures

EBITDA, EBIT, Free Cash Flow, Adjusted Free Cash Flow, Absorption Rate, Average Capital Employed and Return on Capital Employed 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, 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 EBITDA, EBIT, Free Cash Flow, Adjusted Free Cash Flow, Absorption Rate, Average Capital Employed and Return on Capital Employed may differ from the methods used by other issuers.­ Therefore, the Company's EBITDA, EBIT, Free Cash Flow, Adjusted Free Cash Flow, Absorption Rate, Average Capital Employed and Return on Capital Employed may not be comparable to similar measures presented by other issuers. 

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

A conference call to discuss the results for the reporting period ended September 30, 2014 will be held on November 7, 2014 at 11:00am Eastern time (9:00am Mountain time).  To participate in the conference call, please dial 1.888.231.8191 or 647.427.7450 approximately 10 minutes prior to the call.  A live and archived audio webcast of the conference call will also be available on the Company's website www.autocan.ca.

SOURCE: AutoCanada Inc.

Christopher Burrows,Vice-President & Chief Financial Officer, Phone: [phone], Email: [email protected]