AutoCanada Inc. announces strong fourth quarter results and provides updated acquisition guidance:

A conference call to discuss the results for the year ended December 31, 2013 will be held on March 21, 2014 at 11:00 a.m. Eastern time (9:00 a.m. Mountain time). To participate in the conference call, please dial 1-888-231-8191 or [phone] 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.

EDMONTON, March 20, 2014 /CNW/ - AutoCanada Inc. (the "Company" or "AutoCanada") (TSX: ACQ) today announced financial results for the year ended December 31, 2013 and the three month period ended December 31, 2013.

2013 Fourth Quarter Operating Results
	Revenue increased 27.8% or $72.6 million Gross profit increased by 28.9% or $14.0 million Same store revenue increased by 8.9% Same store gross profit increased by 9.2% EBITDA was $14.8 million vs. $10.3 million in 2012, a 43.3% increase Net earnings increased by $3.0 million or 44.6% to $9.6 million from $6.6 million Basic and diluted earnings per share of $0.44 vs. $0.33 in 2012, a 33.3% increase The number of new vehicles retailed increased by 23.9% The number of used vehicles retailed increased by 18.0% Repair orders completed for the quarter were up 23.0% Same store repair orders completed for the quarter were up 1.3%

In commenting on the financial results for the three month period ended December 31, 2013, Pat Priestner, Chief Executive Officer of AutoCanada Inc. stated that, "The fourth quarter of 2013 was very strong with $14.8 million in EBITDA, an increase of over 40% compared to the same quarter of the prior year.  A combination of same store sales increases and acquisitions completed during the year is the main contributor to the strong results we achieved in the fourth quarter. We are also pleased to have completed the real estate transaction at the end of the year and look forward to the additional cash flow as a result of the purchase. With record results throughout the year, we were very pleased to complete 2013 with such a strong finish."

2013 Annual Operating Results
	Revenue increased by 27.9% or $307.1 million to $1.4 billion Gross profit increased by 29.2% or $55.6 million Same store revenue increased by 17.2% Same store gross profit increased by 17.5% EBITDA was $58.5 million vs. $37.9 million in 2012, a 54.4% increase Net earnings increased by $13.9 million or 57.5% to $38.2 million from $24.2 million Basic and diluted earnings per share of $1.83 vs. $1.22, a 50.0% increase The number of new vehicles retailed increased by 26.5% The number of used vehicles retailed increased by 9.7% Repair orders completed for the year were up 17.7% Same store repair orders completed for the year were up 5.0%

In commenting on the financial results for the year ended December 31, 2013, Mr. Priestner stated that, "2013 was a record year in terms of sales and earnings for AutoCanada due to the six dealership acquisitions completed and double digit growth in same store sales and gross profit during the year. We are very proud of the performance of our dealership teams, head office team and Manufacturer partners, all of whom performed exceptionally well in 2013." With respect to recent growth opportunities announced, Mr. Priestner further commented, "We are very pleased to have invested in two General Motors dealerships, located in the province of Saskatchewan, with the Mann family. Both stores are very well established and we are eager to begin operations in the great province of Saskatchewan, a new and exciting market with great potential. The award of a Volkswagen open point in Sherwood Park, Alberta also presents a great opportunity for AutoCanada to grow its dealership base with another excellent brand in a market so close to home."  Mr. Priestner further stated.

Acquisition Guidance Update

Over the past 15 months it has become apparent to Management that the Canadian dealer succession issue which industry analysts have been forecasting over the past number of years is beginning to materialize.  As such, the Company has experienced a significant increase in the number of interested sellers of auto dealerships in Canada and has noticed that many of these opportunities are large, more profitable premium dealerships.

In recognition of this increased activity, Management is raising its guidance to ten to twelve dealership acquisitions over the coming 24 months. Should the Company be able to acquire a larger group, this would increase the guidance.

Highlights of Fourth Quarter 2013 Results

• Same store revenue increased by 8.9% in the fourth quarter of 2013, compared to the same quarter in 2012.  Same store gross profit increased by 9.2% in the fourth quarter of 2013, compared to the same quarter in 2012.
• Revenue from existing and new dealerships increased 27.8% to $333.8 million in the fourth quarter of 2013 from $261.1 million in the same quarter in 2012.
• Gross profit from existing and new dealerships increased 28.9% to $62.3 million in the fourth quarter of 2013 from $48.4 million in the same quarter in 2012.
• EBITDA increased 43.3% to $14.8 million in the fourth quarter of 2013 from $10.3 million in the same quarter in 2012.
• Free cash flow increased to $8.4 million in the fourth quarter of 2013 or $0.39 per share as compared to $0.9 million or $0.05 per share in the fourth quarter of 2012.
• Adjusted free cash flow increased to $11.9 million in the fourth quarter of 2013 or $0.55 per share as compared to $9.0 million or $0.45 per share in 2012.
• Adjusted return on capital employed decreased to 5.4% in the fourth quarter of 2013 as compared to 6.6% in 2012.
• The Company generated adjusted earnings of $9.0 million in the fourth quarter of 2013.  Adjusted pre-tax earnings increased by $3.4 million to $12.3 million in the fourth quarter of 2013 as compared to $8.9 million in the same period in 2012.

Highlights of 2013 Annual Results

• Same store revenue and gross profit increased by 17.2% and 17.5% respectively in the year ended December 31, 2013, compared to the results of the Company for the 2012 year.
• Revenue from existing and new dealerships increased 27.9% to $1.41 billion in the year ended December 31, 2013 from the $1.10 billion that was generated by the Company in 2012.
• Gross profit from existing and new dealerships increased by 29.2% to $246.0 million in the year ended December 31, 2013 from the $190.4 million that was generated by the Company in the 2012 year.
• EBITDA increased 54.4% to $58.5 million for the year ended December 31, 2013 from the $37.9 million that was generated by the Company in the 2012 year.
• Free cash flow increased to $34.5 million in the year ended December 31, 2013 or $1.65 per share as compared to $18.9 million or $0.95 per share in 2012.
• Adjusted free cash flow increased to $44.9 million in the year ended December 31, 2013 or $2.15 per share as compared to $31.8 million or $1.60 per share in 2012.
• The Company generated adjusted earnings of $37.6 million.  Adjusted pre-tax earnings increased by $18.5 million to $51.1 million for the year ended December 31, 2013 as compared to $32.6 million in 2012.

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 determines the level of dividend based on a number of factors.

The following table summarizes the dividends declared by the Company in 2013:

(In thousands of dollars)

Total

Record date

Payment date

Declared

Paid

$

$

February 28, 2013 May 31, 2013 August 30, 2013 November 29, 2013

March 15, 2013 June 17, 2013 September 16, 2013 December 16, 2013

3,579 3,777 4,344 4,561

3,579 3,777 4,344 4,561

On February 14, 2014, the Board declared a quarterly eligible dividend of $0.22 per common share on AutoCanada's outstanding Class A common shares, payable on March 17, 2014 to shareholders of record at the close of business on February 28, 2014. The quarterly eligible dividend of $0.22 represents an annual dividend rate of $0.88 per share. The next scheduled dividend review will be in May 2014.

SELECTED ANNUAL FINANCIAL INFORMATION

The following table shows the audited results of the Company for the years ended December 31, 2011, December 31, 2012 and December 31, 2013.  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 %)	The Company (Audited) 2011	The Company (Audited) 2012	The Company (Audited) 2013
Income Statement Data
New vehicles	640,721	683,034	882,858
Used vehicles	206,030	243,351	300,881
Parts, service and collision repair	110,465	114,276	142,343
Finance, insurance and other	51,126	61,241	82,958
Revenue	1,008,342	1,101,902	1,409,040
New vehicles	47,762	57,833	75,835
Used vehicles	17,395	16,299	20,273
Parts, service and collision	57,699	59,898	73,755
Finance and insurance	46,364	56,399	76,172
Gross profit	169,220	190,429	246,035
Gross Profit %	16.8%	17.3%	17.5%
Operating expenses	136,846	149,140	188,519
Operating exp. as a % of gross profit	80.9%	78.3%	76.6%
Finance costs - floorplan	8,473	9,279	7,353
Finance costs - long term debt	1,069	960	1,007
Reversal of impairment of intangibles	(25,172)	(222)	(746)
Income from investments in associates	-	468	2,241
Income tax	12,509	8,576	13,696
Net Comprehensive income	36,784	24,236	38,166
EBITDA^1	29,070	37,861	58,469
Basic earnings (loss) per share	1.850	1.219	1.829
Diluted earnings per share	1.850	1.219	1.829
Operating Data
Vehicles (new and used) sold	27,998	29,780	35,774
Vehicles (new and used) sold including GM ^4	27,998	31,554	40,136
New vehicles sold including GM ^4	19,331	21,501	28,024
New retail vehicles sold	14,499	16,226	20,523
New fleet vehicles sold	4,832	4,096	4,876
Used retail vehicles sold	8,667	9,458	10,375
Number of service & collision repair orders completed	305,298	309,488	364,361
Absorption rate ^2	88%	86%	87%
# of dealerships at year end	24	24	28
# of dealership investments at year end	-	2	3
# of same store dealerships ^3	21	22	21
# of service bays at period end	333	333	381
Same store revenue growth ^3	17.3%	8.6%	17.2%
Same store gross profit growth ^3	13.9%	10.9%	17.5%

^1	EBITDA has been calculated as described under "NON-GAAP MEASURES".
^2	Absorption has been calculated as described under "NON-GAAP MEASURES".
^3	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.
^4	The Company has investments in General Motors dealerships that are not consolidated. This number includes 100% of vehicles sold by these dealerships in which we have less than 100% investment.

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 %)
		Q1 2012	Q2 2012	Q3 2012	Q4 2012	Q1 2013	Q2 2013	Q3 2013	Q4 2013
Income Statement Data
	New vehicles	147,383	186,560	190,065	159,026	174,278	254,261	257,222	197,097
	Used vehicles	60,453	62,822	62,816	57,260	62,656	77,113	85,975	75,137
	Parts, service and collision repair	26,953	28,915	28,488	29,920	29,515	34,456	37,104	41,268
	Finance, insurance and other	13,399	16,139	16,775	14,928	17,602	22,555	22,530	20,271
Revenue		248,188	294,436	298,144	261,134	284,051	388,385	402,831	333,773
	New vehicles	12,066	14,684	15,556	15,527	16,022	20,793	20,694	18,326
	Used vehicles	4,420	4,238	4,004	3,637	3,789	5,794	6,240	4,450
	Parts, service and collision	14,049	15,298	15,133	15,418	15,233	17,586	20,114	20,822
	Finance and insurance	12,344	14,842	15,428	13,785	16,096	20,676	20,666	18,734
Gross profit		42,879	49,062	50,121	48,367	51,140	64,849	67,714	62,332
Gross Profit %		17.3%	16.7%	16.8%	18.5%	18.0%	16.7%	16.8%	18.7%
Operating expenses		35,381	37,659	38,361	37,739	40,353	48,639	51,080	48,447
Operating exp. as a % of gross profit		82.5%	76.8%	76.5%	78.0%	78.9%	75.0%	75.4%	77.7%
Finance costs - floorplan		2,053	2,622	2,745	1,859	1,675	1,888	1,903	1,887
Finance costs - long term debt		214	239	250	257	237	244	139	387
Reversal of impairment of intangibles		-	-	-	(222)	-	-	-	(746)
Income from investments in associates		-	83	130	255	201	648	555	837
Income tax		1,441	2,216	2,379	2,540	2,309	3,976	3,920	3,491
Net earnings ^4		4,112	6,712	6,806	6,606	6,822	10,823	10,968	9,553
EBITDA ^1,4		6,792	10,195	10,575	10,299	10,557	16,532	16,626	14,754
Basic earnings (loss) per share		0.207	0.338	0.344	0.334	0.345	0.532	0.507	0.441
Diluted earnings per share		0.207	0.338	0.344	0.334	0.345	0.532	0.507	0.441
Operating Data
Vehicles (new and used) sold		6,836	8,154	8,087	6,703	7,341	10,062	10,325	8,046
Vehicles (new and used) sold including GM ^5		6,836	8,557	8,783	7,378	8,123	11,399	11,405	9,209
New vehicles sold including GM ^5		4,403	5,964	6,178	4,956	5,665	8,246	8,023	6,090
New retail vehicles sold		3,434	4,400	4,410	3,982	4,118	5,487	5,986	4,932
New fleet vehicles sold		969	1,313	1,265	549	1,036	1,923	1,365	552
Used retail vehicles sold		2,433	2,441	2,412	2,172	2,187	2,652	2,974	2,562
Number of service & collision repair orders completed		74,439	78,104	78,944	78,001	77,977	93,352	97,074	95,958
Absorption rate ^2		91%	81%	89%	89%	85%	82%	90%	90%
# of dealerships at period end		24	24	24	24	25	27	29	28
# of same store dealerships ^3		21	21	21	22	22	22	22	21
# of service bays at period end		333	333	333	333	341	341	388	381
Same store revenue growth ^3		20.2%	2.4%	8.0%	7.4%	12.9%	26.2%	19.9%	8.9%
Same store gross profit growth ^3		18.3%	7.1%	7.9%	11.9%	16.9%	25.8%	18.5%	9.2%
Balance Sheet Data
Cash and cash equivalents		53,403	51,198	54,255	34,472	41,975	35,058	37,940	35,113
Restricted cash		-	-	-	10,000	10,000	10,000	-	-
Trade and other receivables		51,364	52,042	54,148	47,944	57,144	69,136	62,105	57,771
Inventories		156,262	201,692	194,472	199,119	217,707	232,878	237,460	278,091
Revolving floorplan facilities		178,145	221,174	212,840	203,525	225,387	246,325	228,526	264,178

^1	EBITDA has been calculated as described under "NON-GAAP MEASURES".
^2	Absorption has been calculated as described under "NON-GAAP MEASURES".
^3	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.
^4	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.
^5	The Company has investments in General Motors dealerships that are not 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 year ended December 31, 2013, on a same store basis by revenue source, and compare these results to the same periods in 2012.

Same Store Gross Profit and Gross Profit Percentage
		For the Year Ended
		Gross Profit				Gross Profit %
(In thousands of dollars except % change and gross profit %)	Dec. 31, 2013	Dec. 31, 2012		% Change	Dec. 31, 2013	Dec. 31, 2012		Change
Revenue Source
New vehicles	66,396	54,801		21.2%	8.5%	8.3%		0.2%
Used vehicles	18,235	15,881		14.8%	6.9%	6.8%		0.1%
Finance and insurance	67,119	54,072		24.1%	91.5%	92.1%		(0.6%)
Subtotal	151,750	124,754		21.6%
Parts, service and collision	62,212	57,279		8.6%	52.4%	52.6%		(0.2)%
Total	213,962	182,033		17.5%	17.3%	17.2%		0.1%

The following table summarizes the results for the three month period ended December 31, 2013, on a same store basis by revenue source, and compares these results to the same period in 2012.

Same Store Gross Profit and Gross Profit Percentage
		For the Three Months Ended
		Gross Profit				Gross Profit %
(In thousands of dollars except % change and gross profit %)	Dec. 31, 2013	Dec. 31, 2012		% Change	Dec. 31, 2013	Dec. 31, 2012		Change
Revenue Source
New vehicles	14,764	14,710		0.4%	9.1%	9.7%		(0.6)%
Used vehicles	4,049	3,619		11.9%	6.6%	6.6%		- %
Finance and insurance	15,489	13,050		18.7%	91.7%	92.3%		(0.6)%
Subtotal	34,302	31,379		9.3%
Parts, service and collision	16,087	14,757		9.0%	51.4%	51.6%		(0.2)%
Total	50,389	46,136		9.2%	18.5%	18.5%		- %

About AutoCanada

AutoCanada is one of Canada's largest multi-location automobile dealership groups, currently operating 28 wholly-owned franchised dealerships and managing 5 franchised dealership investments in seven provinces and has about 1,600 employees.  AutoCanada currently sells Chrysler, Dodge, Jeep, Ram, FIAT, Chevrolet, GMC, Buick, Cadillac, Infiniti, Nissan, Hyundai, Subaru, Mitsubishi, Audi and Volkswagen branded vehicles.  In 2013, our dealerships sold approximately 36,000 vehicles and processed approximately 364,000 service and collision repair orders in our 381 service bays during that time.

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 used vehicle sales, 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.

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.

Adjusted Earnings

Adjusted earnings are calculated by adding back the after-tax effect of impairment or reversals of impairment of intangible assets and impairments of goodwill.  Adding back these non-cash charges to net earnings allows management to assess the net earnings of the Company from ongoing operations.

Adjusted Pre-Tax Earnings

Adjusted pre-tax earnings are calculated by adding back the impairment or reversals of impairment of intangible assets and impairments of goodwill.  Adding back these non-cash charges to pre-tax net earnings allows management to assess the pre-tax net earnings of the Company from ongoing operations.

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, Adjusted Earnings, Adjusted Pre-tax Earnings, 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.

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

	December 31, 2013 $	December 31, 2012 $
Revenue (Note 8)	1,409,040	1,101,902
Cost of sales (Note 9)	(1,163,005)	(911,473)
Gross profit	246,035	190,429
Operating expenses (Note 10)	(188,519)	(149,140)
Operating profit before other income	57,516	41,289
Loss on disposal of assets, net	(210)	(95)
Recovery of impairment of intangible assets (Note 21)	746	222
Income from investments in associates (Note 16)	2,241	468
Operating profit	60,293	41,884
Finance costs (Note 12)	(9,618)	(11,045)
Finance income (Note 12)	1,187	1,973
Net comprehensive income for the year before taxation	51,862	32,812
Income tax (Note 13)	13,696	8,576
Net comprehensive income for the year	38,166	24,236
Earnings per share
Basic	1.829	1.222
Diluted	1.829	1.222
Weighted average shares
Basic	20,868,726	19,840,802
Diluted	20,868,726	19,840,802

The accompanying notes are an integral part of these consolidated financial statements.

Approved on behalf of the Company:

(Signed) "Gordon R. Barefoot", Director

(Signed) "Michael Ross", Director

AutoCanada Inc.
Consolidated Statements of Financial Position
(in thousands of Canadian dollars)

	December 31,       2013 $	December 31,       2012  $
ASSETS
Current assets
Cash and cash equivalents (Note 17)	35,113	34,472
Restricted cash (Note 17)	-	10,000
Trade and other receivables (Note 18)	57,771	47,944
Inventories (Note 19)	278,091	199,119
Other current assets	1,603	1,102
	372,578	292,637
Property and equipment (Note 20)	122,915	38,513
Intangible assets (Note 21)	96,985	66,403
Goodwill (Note 21)	6,672	380
Other long-term assets (Note 23)	6,797	7,699
Investments in associates (Note 16)	13,131	4,730
	619,078	410,362
LIABILITIES
Current liabilities
Trade and other payables (Note 24)	50,428	35,590
Revolving floorplan facilities (Note 25)	264,178	203,525
Current tax payable	4,906	3,719
Current lease obligations (Note 26)	1,398	1,282
Current indebtedness (Note 25)	2,866	3,000
	323,776	247,116
Long-term indebtedness (Note 25)	83,580	23,937
Deferred tax (Note 13)	21,480	14,809
	428,836	285,862
EQUITY	190,242	124,500
	619,078	410,362

Commitments and contingencies (Note 27)

The accompanying notes are an integral part of these consolidated financial statements.

AutoCanada Inc.
Consolidated Statements of Changes in Equity
For the Years Ended
(in thousands of Canadian dollars)

	Share capital $	Treasury shares	Contributed surplus $	Total capital $	Accumulated deficit $	Equity $
Balance,  January 1, 2013	190,435	(935)	4,423	193,923	(69,423)	124,500
Net comprehensive income	-	-	-	-	38,166	38,166
Dividends declared on common shares (Note 29)	-	-	-	-	(16,197)	(16,197)
Common shares issued (Note 29)	43,811	-	-	43,811	-	43,811
Common shares repurchased (Note 29)	-	(579)	-	(579)	-	(579)
Restricted share units settled (Note 29)	-	206	(240)	(34)	-	(34)
Share-based compensation	-	-	575	575	-	575
Balance, December 31, 2013	234,246	(1,308)	4,758	237,696	(47,454)	190,242
	Share capital $	Treasury Shares	Contributed surplus $	Total capital $	Accumulated deficit $	Equity $
Balance, January 1, 2012	190,435	-	3,918	194,353	(81,358)	112,995
Net comprehensive income	-	-	-	-	24,236	24,236
Dividends declared on common shares (Note 29)	-	-	-	-	(12,301)	(12,301)
Common shares repurchased (Note 29)	-	(935)	-	(935)	-	(935)
Share-based compensation	-	-	505	505	-	505
Balance, December 31, 2012	190,435	(935)	4,423	193,923	(69,423)	124,500

The accompanying notes are an integral part of these consolidated financial statements.

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

	December 31, 2013 $	December 31, 2012 $
Cash provided by (used in)
Operating activities
Net income	38,166	24,236
Income taxes (Note 13)	13,696	8,576
Amortization of prepaid rent	452	452
Amortization of property and equipment (Note 10)	6,346	4,311
Loss on disposal of assets	210	95
Recovery of impairment of intangible assets (Note 21)	(746)	(222)
Share-based compensation - equity-settled	575	505
Share-based compensation - cash-settled	2,054	235
Income from investment in associate (Note 16)	(2,241)	(468)
Income taxes paid	(10,559)	(4,255)
Net change in non-cash working capital (Note 32)	(9,968)	(12,392)
	37,985	21,073
Investing activities
Reduction in (addition to) restricted cash (Note 17)	10,000	(10,000)
Investments in associates (Note 16)	(7,057)	(4,262)
Purchases of property and equipment (Note 20)	(67,105)	(16,069)
Disposal (purchase) of other assets	-	(58)
Proceeds on sale of property and equipment	3,304	32
Proceeds on divestiture of dealership (Note 15)	1,354	-
Prepayments of rent	-	(540)
Business acquisitions (Note 14)	(65,368)	-
Dividends received from investments in associates (Note 16)	897	-
	(123,975)	(30,897)
Financing activities
Proceeds from long-term indebtedness	241,287	79,465
Repayment of long-term indebtedness	(181,757)	(75,596)
Common shares repurchased	(513)	(912)
Dividends paid (Note 29)	(16,197)	(12,301)
Proceeds from issuance of shares (Note 29)	43,811	-
	86,631	(9,344)
Increase (decrease) in cash	641	(19,168)
Cash and cash equivalents at beginning of year	34,472	53,641
Cash and cash equivalents at end of year	35,113	34,472

SOURCE: AutoCanada Inc.

Jeff Christie, CA

Vice-President, Finance

Phone:  [phone]   Email: [email protected]