AutoCanada reports 2018 annual and fourth quarter results

EDMONTON, March 14, 2019 /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 and twelve-months ended December 31, 2018. All figures are in Canadian dollars, unless otherwise stated.

2018 Full Year Highlights

• Consolidated revenues reached $3.2 billion
• Total vehicles sold (new and used) reached 66,073
• EBITDA attributable to AutoCanada shareholders totalled $56.3 million, and on an adjusted basis totalled $69.3 million which includes gains totaling $13.9 million from sale-leaseback transactions of dealership properties
• Diluted earnings per share totalled $(2.85), and on an adjusted basis totalled $0.04

2018 Fourth Quarter Highlights

• Consolidated revenues totalled $782.8 million
• Total vehicles sold (new and used) totalled 16,024
• EBITDA attributable to AutoCanada shareholders totalled $16.5 million, and on an adjusted basis totalled $22.6 million
• Diluted earnings per share totalled $(0.98), and on an adjusted basis totalled $(0.34)
• Acquired two new dealerships during the quarter
• Introduced the Ford brand to the portfolio
• Divested two underperforming dealerships during the quarter, and one subsequent to quarter end
• Entered into sale-leaseback transactions totalling approximately $53 million.

"A number of months ago, we set out on an ambitious course to improve our operations and become the industry leader," said Paul Antony, Executive Chairman. "We have implemented the main parts of our Go Forward Plan in Canada and we are already seeing strong signs of adoption across our dealership network. As our new initiatives take hold, we foresee very material improvements in our performance in 2019. As such, despite being faced with increased headwinds over the past number of months, we remain committed to delivering on our goals for 2019"

2018 Full Year Highlights

• Revenue was $3,150.8 million, up 1.6% compared with 2017. Same store revenue declined by 1.9%. However, operating expenses were also up by 11.4% when compared to 2017. This resulted in relatively poor performance in 2018. A large contributor to this was the acquisition of our U.S. Operations in April 2018 as operating expenses in our U.S. Operations exceeded gross profit by $10.3 million.
• Also, included in operating expenses are management transition costs of $9.8 million, a number of non-recurring expenses such as inventory adjustments, a provision of $2.0 million related to fraud at one of our dealerships in the second quarter, and allowances and writedowns of $3.2 million related to the winding down of operations. Operating expenses as a percentage of gross profit were up to 93.5% from 82.2% in 2017.
• Gross profit was $508.0 million, down 2.1% compared with 2017, with gross profit as a percentage of revenue decreasing to 16.1% from 16.7%. Same store gross profit declined 3.7% over the same period.
• New vehicle sales were 43,451, down 0.7% from 2017. Revenue from the sale of new vehicles was $1,802.2 million, down 1.4% from 2017. The sale of new vehicles accounted for 57.2% of the Company's total revenue and 21.5% of gross profit versus 58.9% of revenue and 25.3% of gross profit in 2017.
• Used vehicle sales were 22,622, up 16.7% from last year. Revenue from the sale of used vehicles was $756.2 million, up 5.6% from the prior year. The sale of used vehicles accounted for 24.0% of the Company's total revenue and 8.5% of gross profit, versus 23.1% of revenue and 8.4% of gross profit in 2017.
• Parts, service and collision repair generated $451.8 million of revenue, up 8.4% from 2017. This accounted for 14.3% of the Company's total revenue and 44.1% of its gross profit, up from 13.4% of revenue and 41.3% of gross profit in 2017.
• Finance and insurance generated $140.7 million of revenue, a decrease of 0.4% from 2017. This accounted for 4.5% of the Company's total revenue and 25.9% of its gross profit, in line with 4.6% of revenue and an increase from 25.0% of gross profit in 2017.
• EBITDA attributable to AutoCanada shareholders decreased to $56.3 million from $111.8 million in the prior year.
• Including the impairment of non-financial assets, the Company generated a net loss attributable to AutoCanada shareholders of $(78.1) million (Adjusted net earnings attributable to AutoCanada shareholders of $1.2 million), or $(2.85) per share (Adjusted net earnings per share attributable to AutoCanada shareholders of $0.04) versus net income of $57.8 million in 2017 ($42.7 million on an adjusted basis) or $2.11 per share ($1.56 on an adjusted basis).
• Included in EBITDA and net earnings are gains totaling $13.9 million from sale-leaseback transactions of dealership properties.
• Total impairment charges attributable to AutoCanada shareholders  were $95.1 million, or $2.55 basic earnings per share net of tax.

2018 Fourth Quarter Highlights

• Revenue was $782.8 million, up 6.8% compared with the fourth quarter of 2017. Same store revenue declined by 3.0%.
• Operating expenses were $125.0 million, up 19.5% from the same period last year. Operating expenses as a percentage of gross profit were up to 97.5% from 83.6% in the same period in 2017.
• Operating expenses in the U.S. Operations exceeded gross profit by $6.3 million. Included in the U.S. operating expenses is management transition costs of approximately $2.0 million. In addition, the Canadian operating expenses include approximately $3.7 million of non-recurring allowances and provisions.
• Gross profit was $128.2 million, up 2.4% compared with the same quarter in 2017, with gross profit as a percentage of revenue decreasing to 16.4% from 17.1%. Same store gross profit declined 3.0%.
• New vehicle sales were 10,331, up 5.2% from the same period in 2017. Revenue from the sale of new vehicles was $432.8 million, up 3.6% from the same period in 2017. The sale of new vehicles accounted for 55.3% of the Company's total revenue and 20.2% of gross profit versus 57.0% of revenue and 24.0% of gross profit in the fourth quarter of 2017.
• Used vehicle sales were 5,693, up 22.4% compared with the same quarter last year. Revenue from the sale of used vehicles was $193.0 million, up 10.1% from the same quarter last year. The sale of used vehicles accounted for 24.7% of the Company's total revenue and 6.7% of gross profit, versus 23.9% of revenue and 6.0% of gross profit in the fourth quarter of 2017.
• Parts, service and collision repair generated $121.3 million of revenue, up 13.2% from the same period in 2017. This accounted for 15.5% of the Company's total revenue and 47.1% of its gross profit, up from 14.6% of revenue and 45.5% of gross profit in the same quarter of 2017.
• Finance and insurance generated $35.7 million of revenue, an increase of 8.2% from the same period in 2017. This accounted for 4.6% of the Company's total revenue and 26.0% of its gross profit, in line with 4.5% of revenue and up from 24.5% of gross profit in the fourth quarter of 2017.
• EBITDA attributable to AutoCanada shareholders decreased to $16.5 million from $28.1 million compared with the same quarter last year.
• Adjusted EBITDA attributable to AutoCanada shareholders increased to $22.6 million from $21.9 million compared with the same quarter last year.
• Including the impairment of non-financial assets, the Company generated a net loss attributable to AutoCanada shareholders of $(26.9) million (Adjusted net earnings attributable to AutoCanada shareholders of $(9.3) million), or $(0.98) per share (Adjusted net earnings per share attributable to AutoCanada shareholders of $(0.34)) versus net income of $17.1 million in 2017 ($8.9 million on an adjusted basis) or $0.62 per share ($0.33 on an adjusted basis).
• Included in EBITDA and net earnings is a gain of $9.2 million from a sale-leaseback transaction in respect of four dealership properties.
• Total impairment charges were $17.8 million in the fourth quarter, or $0.48 basic earnings per share net of tax. The impairment charges in the fourth quarter were attributable to our U.S. Operations.

Fourth Quarter Business Highlights

• On October 1, 2018, the Company, through a wholly owned subsidiary, AutoCanada M LP, purchased all of the issued and outstanding shares of Ericksen M-B Ltd., which owns and operates a Mercedes-Benz dealership in Edmonton, Alberta, for total cash consideration of $23.9 million. The acquisition was funded through net proceeds of the sale and leaseback transactions with Automotive Properties Real Estate Investment Trust.
• The Company was awarded the right to a General Motors open point dealership featuring the Chevrolet, Buick and GMC brands in Maple Ridge, BC, a community located in the northeastern sector of Greater Vancouver. The Company will construct an approximately 33,400 square foot facility designed to General Motors image standards, with construction expected to be completed by mid 2020. As part of the Company's sale-leaseback transaction with Capital Automotive Real Estate Services Inc. (see below), Capital Automotive will fund the construction of the facility.
• On November 19, 2018, the Company sold substantially all of the operating and fixed assets, including the land and facilities, of North Edmonton Kia, located in Edmonton, AB for cash consideration. Net proceeds of $10.2 million resulted in a pre-tax gain on divestiture of $0.8 million.
• On December 1, 2018, the Company, through a wholly owned subsidiary, 2667465 Ontario Inc., purchased all of the issued and outstanding shares of Rose City Ford Sales Limited, which owns and operates a Ford dealership in Windsor, Ontario, for total cash consideration of $24.8 million. At the time of acquisition, Rose City Ford Sales Limited had net working capital of $6.9 million. The acquisition was funded by drawing on the Company's revolving term facility.
• On December 17, 2018, the Company sold substantially all of the operating and fixed assets of Courtesy Mitsubishi, located in Calgary, Alberta for cash consideration. Net proceeds of $2.5 million resulted in a pre-tax loss on divestiture of $0.03 million.
• The Company completed a sale-leaseback transaction for four of its dealership properties with Capital Automotive Real Estate Services Inc.  AutoCanada leased the properties from Capital Automotive under long-term triple net leases. On the transaction, the Company recognized a gain of $9.2 million on the sale of dealership properties. $2.2 million of net proceeds relate to the sale of leasehold improvements on a property it did not own which reduced an impairment charge taken at June 30, 2018. The transaction provided for proceeds of approximately $54.7 million which were used to repay the Company's credit facility. In addition, Capital Automotive has agreed to fund building improvements and construction. Management expects to incur approximately $32.6 million in Canada and $20.5 million in the U.S. ($15.0 million USD) for capital requirements in respect of the properties, including the reconstruction of three existing dealerships and the construction of the Maple Ridge Chevrolet Buick GMC Open Point.

Subsequent Events

• On March 6, 2019, the Company sold substantially all of the operating and fixed assets of Toronto Dodge, located in Toronto, Ontario for cash consideration of $5.0 million.

Management Changes

Raj Juneja has resigned from his position as Chief Financial Officer for personal reasons and will remain as an advisor to effect an orderly transition. The Company has commenced a search for a new Chief Financial Officer. "I would like to thank Raj for his dedicated service to AutoCanada. Raj has been instrumental in  helping AutoCanada with our balance sheet and our overall finance function," said Paul Antony, Executive Chairman.

William Berman has resigned from his position as President of U.S. Operations and Tamara Darvish has been appointed as the new President of U.S. Operations. Ms. Darvish was previously the Executive Vice President    of DARCARS Automotive Group, the Chief Operating Officer of Pentagon Federal Credit Union and the Chief Operating Officer of Capital Automotive Real Estate Services. "I would like to also thank Bill for his dedicated service to AutoCanada and assisting us in diagnosing and structuring our U.S. Operations," said Paul Antony, Executive Chairman. "We welcome Tamara to the AutoCanada team. Tamara's hands-on experience will help  us focus on operational efficiencies in our U.S. business."

The following table summarizes the Company's results for the quarter and year ended December 31, 2018:

	Three months ended December 31							Year ended December 31
Consolidated Operational Data	2018		2017		% Change			2018		2017		% Change
EBITDA attributable to AutoCanada shareholders^1,2	16,521		28,127		(41.3)	%		56,262		111,812		(49.7)	%
Adjusted EBITDA attributable to AutoCanada shareholders^1,2	22,638		21,880		3.5	%		69,266		95,410		(27.4)	%
Net (loss) income attributable to AutoCanada shareholders^1	(26,892)		17,089		(257.4)	%		(78,083)		57,844		(235.0)	%
Adjusted net earnings attributable to AutoCanada shareholders^1,2	(9,299)		8,935		(204.1)	%		1,175		42,665		(97.2)	%
Basic EPS	(0.98)		0.62		(258.1)	%		(2.85)		2.11		(235.1)	%
Adjusted diluted EPS^2	(0.34)		0.33		(203.0)	%		0.04		1.55		(97.3)	%
Weighted average number of shares  - Basic	27,417,434		27,389,167		0.1	%		27,399,117		27,379,193		0.1	%
Weighted average number of shares  - Diluted ^3	27,417,434		27,498,724		(0.3)	%		28,297,901		27,473,995		3.0	%
New retail vehicles sold (units)	9,214		8,444		9.1	%		36,495		36,076		1.2	%
New fleet vehicles sold (units)	1,117		1,378		(18.9)	%		6,956		7,697		(9.6)	%
New vehicles sold (units)	10,331		9,822		5.2	%		43,451		43,773		(0.7)	%
Used retail vehicles sold (units)	5,693		4,653		22.4	%		22,622		19,379		16.7	%
Total vehicles sold (units)	16,024		14,475		10.7	%		66,073		63,152		4.6	%
Revenue	782,790		733,060		6.8	%		3,150,781		3,101,560		1.6	%
Gross profit	128,204		125,210		2.4	%		507,963		518,629		(2.1)	%
Gross profit %	16.4	%	17.1	%	(4.1)	%		16.1	%	16.7	%	(3.6)	%
Operating expenses	125,040		104,626		19.5	%		474,804		426,253		11.4	%
Operating expenses as % of gross profit	97.5	%	83.6	%	16.7	%		93.5	%	82.2	%	13.7	%
Operating (loss) profit	(576)		26,505		(102.2)	%		(32,648)		118,969		(127.4)	%
Free cash flow^2	(7,658)		29,496		(126.0)	%		(28,805)		72,213		(139.9)	%
Adjusted free cash flow^2	10,553		15,996		(34.0)	%		9,657		90,786		(89.4)	%
See the Company's Management's Discussion and Analysis for the quarter and year ended December 31, 2018 for complete footnote disclosures.

Outlook

Macroeconomic factors create a degree of uncertainty for AutoCanada's business. Central banks in Canada and the United States have recently raised key interest rates, and there is a possibility of further interest rate hikes over the next year. Higher rates will adversely impact borrowing expenses on variable interest rate debt such as vehicle floorplan financing, which would increase our costs. Monthly loan payments for new and used vehicles are also typically linked to market interest rates, meaning rising interest rates will likely make vehicle ownership less affordable at the same time as other household debt becomes more expensive.  

The auto industry in North America is coming off several record-setting years and the sale of new vehicles is beginning to trend downwards.  While many analysts expect sales to remain healthy, most expect a decline in volume in 2019.  Over the last few months there has been greater concern over the strength of the economy in both Canada and the United States. If these concerns materialize, the volume of vehicle sales could decrease more than analysts expect. New car sales in the U.S. dropped more than expected in January and February and many dealers in the U.S. are reacting by shifting to used cars and cutting costs. Some of the blame for the reduction of new car sales over these two months is being placed on the severe weather in the Midwest and the heavy rains in the Southeast and California. Vehicle leasing and manufacturer incentives remain at high levels, particularly as the new model year rolls out. If those incentives are scaled back, it could impact sales volumes.

While macro-economic factors determine total vehicle demand, we expect to deliver materially better results in our Canadian operations as we continue to implement our Go Forward Plan, even if the broader industry faces varying headwinds. This will come through a combination of focusing on less cyclical parts of our business and on lines of our business that generate higher margins. As part of our Go Forward Plan, we expect to materially increase the number of used vehicles we retail.  Margins on used vehicles tend to be higher than new vehicles and retailing more vehicles will increase our returns from our finance and insurance and our parts and service lines of business.  In addition, we are implementing a number of initiatives to increase the returns from our parts, service and collision businesses.  

We are also optimizing our finance and insurance offerings for used vehicles at our dealerships. We expect to earn a material profit share on these new offerings. We have also created a new special finance division and a new wholesale division. Our new special finance division will arrange loans for customers who cannot qualify for traditional loans offered by banks and affiliates of vehicle manufacturers. We expect that our special finance division will increase both new and used vehicle sales at our dealerships and through a recently launched online site (www.rightride.ca). We expect that our new wholesale division will be accretive by taking advantage of the arbitrage opportunities with the sale of used vehicles in different geographical locations. Other aspects of the Company's Go Forward Plan are expected to lead to a decrease in operational expenses at our dealerships and at our collision centres as we better leverage our buying power to achieve meaningful cost reductions in our Canadian operations.

The key issue with our U.S. Operations in 2018 was the high cost structure. We are taking steps to reduce the operating expenses in our U.S. dealerships to be in line with industry norms with a view to bringing our U.S. operations to profitability in 2019. In addition, we are implementing a plan to create operational efficiencies and grow revenues with a view of creating a sustainable platform with the U.S. assets that we currently own that can withstand the economic climate over the next few years.

The fragmented nature of the automotive dealership sector will provide us with the opportunity to diversify our geographical presence and drive earnings growth through accretive acquisitions. While our principal focus at this time is on executing our Go Forward plan and optimizing all of our lines of business, we expect to grow our business by making accretive acquisitions as opportunities may arise.

Go Forward Plan

Following a comprehensive review of the Company's operations, the Board of Directors endorsed a Go Forward Plan that was announced concurrent with the Company's third quarter 2018 financial results. The plan involves managing costs while increasing sales and employee productivity, and is being implemented across AutoCanada's Canadian dealerships. Highlights of the plan include the following:

• Enhancing the Company's finance and insurance offerings at dealerships. The Company has appointed a new Vice President responsible for the division. The Company expects to improve its finance and insurance business through a combination of new AutoCanada white-label products for used car sales, where it will earn a profit share, and manager training at dealerships.
• Creating a new specialty finance division to make non-traditional (near-prime) financing available at all dealerships, as well as through a new online presence, rightride.ca.
• Optimizing the Company's collision centres, through a combination of renegotiated supply contracts to realize savings in operating expenses, along with greater coordination by tracking and managing their performance independent from other business lines. Long term, the Company expects to increase the number of collision centres it owns through acquisitions of stand-alone facilities in areas where the Company currently has multiple dealerships and no collision centre.
• Disposing of non-performing assets in order to eliminate carrying costs. These assets include parcels of land acquired for open points that were not obtained.
• Establishing a new wholesale division to take advantage of arbitrage opportunities with the sale of used cars across different geographic locations.
• Leveraging the Company's buying power to reduce costs at our dealerships.

In addition to these initiatives, the Company is taking other actions to increase the sale of used vehicles and drive more business to its service bays. AutoCanada's growth will also continue to be supported through disciplined, accretive acquisitions that offer brand and geographical diversity.

Dividends

Management reviews the Company's financial results on a monthly basis. The Board of Directors reviews the financial results periodically to determine whether a dividend is to be paid based on a number of factors with a goal to efficiently allocate capital to fuel AutoCanada's future growth while also rewarding and sharing the Company's success with our shareholders.

On February 22, 2019, the Board of Directors of the Company declared a quarterly eligible dividend of $0.10 per common share on the Company's outstanding Class A common shares, payable on March 15, 2019 to shareholders of record at the close of business on March 1, 2019.

For purposes of the enhanced dividend tax credit rules contained in the Income Tax Act (Canada) (the "ITA") and any corresponding provincial and territorial tax legislation, all dividends paid by AutoCanada or any of its subsidiaries in 2010 and thereafter are designated as "eligible dividends" (as defined in 89(1) of the ITA), unless otherwise indicated. Please consult with your own tax advisor for advice with respect to the income tax consequences to you of AutoCanada designating dividends as "eligible dividends".

SELECTED QUARTERLY FINANCIAL INFORMATION

The following table shows the unaudited results of the Company for each of the eight most recently completed quarters. The results of operations for these periods are not necessarily indicative of the results of operations to be expected in any given comparable period.

(in thousands of dollars, except Gross Profit %, Earnings per share, and Operating Data)	Q4 2018		Q3 2018		Q2 2018		Q1 2018		Q4 2017		Q3 2017		Q2 2017		Q1 2017
Income Statement Data
New vehicles	432,756		509,281		522,150		338,016		417,626		497,711		558,682		353,540
Used vehicles	192,988		206,668		198,597		157,901		175,251		192,473		182,913		165,408
Parts, service and collision repair	121,304		113,087		121,476		95,893		107,156		104,816		113,983		90,735
Finance, insurance and other	35,742		37,882		38,365		28,675		33,027		39,571		39,324		29,344
Revenue	782,790		866,918		880,588		620,485		733,060		834,571		894,902		639,027
New vehicles	25,861		29,150		30,648		23,473		30,033		36,806		38,555		25,590
Used vehicles	8,637		12,955		13,173		8,562		7,563		11,140		13,095		11,940
Parts, service and collision repair	60,380		57,206		60,868		45,533		56,915		53,805		56,306		47,284
Finance, insurance and other	33,326		35,524		35,891		26,776		30,699		36,218		35,867		26,813
Gross Profit	128,204		134,835		140,580		104,344		125,210		137,969		143,823		111,627
Gross profit %	16.4	%	15.6	%	16.0	%	16.8	%	17.1	%	16.5	%	16.1	%	17.5	%
Operating expenses	125,039		126,492		127,492		95,781		104,626		110,560		112,897		98,170
Operating expenses as a % of gross profit	97.5	%	93.8	%	90.7	%	91.8	%	83.6	%	80.1	%	78.5	%	87.9	%
Operating (loss) profit	(576)		(5,259)		(42,719)		15,906		26,505		30,287		46,539		15,638
Impairment (recovery) of non-financial assets	17,834		19,569		58,097		—		(816)		—		—		—
Net (loss) income attributable to AutoCanada shareholders	(26,892)		(15,563)		(40,458)		4,830		17,089		12,100		24,978		3,678
Adjusted net earnings attributable to AutoCanada shareholders^2,4,6	(9,299)		333		5,298		4,830		8,935		13,581		15,547		4,602
EBITDA attributable to AutoCanada shareholders^2	16,521		11,972		12,042		15,692		28,127		25,827		43,722		14,136
EBITDA attributable to AutoCanada shareholders as a % of sales^2	2.1	%	1.4	%	1.4	%	2.5	%	3.8	%	3.1	%	4.9	%	2.7	%
Free cash flow^2	(7,658)		6,993		(13,751)		(14,388)		29,496		31,114		10,982		621
Adjusted free cash flow^2	10,553		(965)		(3,652)		3,721		15,996		23,296		36,277		15,217
Basic earnings per share	(0.98)		(0.57)		(1.48)		0.18		0.62		0.44		0.91		0.13
Diluted earnings per share	(0.98)		(0.57)		(1.48)		0.18		0.62		0.44		0.91		0.13
Basic adjusted earnings per share^2,4,6	(0.34)		0.01		0.19		0.18		0.33		0.50		0.57		0.17
Diluted adjusted earnings per share^2,4,6	(0.34)		0.01		0.19		0.18		0.33		0.50		0.57		0.17
Dividends declared per share	0.10		0.10		0.10		0.10		0.10		0.10		0.10		0.10
Operating Data
Vehicles (new and used) sold^3	16,024		18,863		18,519		12,667		14,475		17,132		18,490		13,055
New vehicles sold^3	10,331		12,474		12,506		8,140		9,822		12,014		13,429		8,508
New retail vehicles sold^3	9,214		10,353		10,264		6,664		8,444		10,334		10,545		6,753
New fleet vehicles sold^3	1,117		2,121		2,242		1,476		1,378		1,680		2,884		1,755
Used retail vehicles sold^3	5,693		6,389		6,013		4,527		4,653		5,118		5,061		4,547
# of service and collision repair orders completed^3	245,682		241,103		248,167		180,429		224,006		220,669		228,872		197,069
Absorption rate^2	87	%	82	%	88	%	84	%	90	%	87	%	87	%	82	%
# of dealerships at year end	68		63		63		54		58		57		57		56
# of same stores dealerships^1	47		49		49		49		49		48		47		47
# of service bays at year end	1,157		1,106		1,106		906		999		977		977		949
Same stores revenue growth^1	(3.0)	%	(3.0)	%	(5.1)	%	4.6	%	11.1	%	2.9	%	0.1	%	(7.1)	%
Same stores gross profit growth^1	(3.0)	%	(8.5)	%	(4.3)	%	1.0	%	1.4	%	6.3	%	1.1	%	(1.2)	%
See the Company's Management's Discussion and Analysis for the quarter ended December 31, 2018 for complete footnote disclosures.

The following tables summarize the results for the quarter and year ended December 31, 2018 on a same store basis by revenue source and compares these results to the same period in 2017.

Same Store Revenue and Vehicles Sold
	Three months ended December 31						Year ended December 31
(in thousands of dollars)	2018		2017		% Change		2018		2017		% Change
Revenue Source
New vehicles ‑ Retail	258,289		279,051		(7.4)%		1,123,438		1,203,580		(6.7)%
New vehicles ‑ Fleet	48,810		50,350		(3.1)%		281,627		266,731		5.6%
Total New vehicles	307,099		329,401		(6.8)%		1,405,065		1,470,311		(4.4)%
Used vehicles ‑ Retail	105,170		95,038		10.7%		441,500		410,536		7.5%
Used vehicles ‑ Wholesale	34,770		41,451		(16.1)%		151,791		175,333		(13.4)%
Total Used vehicles	139,940		136,489		2.5%		593,291		585,869		1.3%
Finance, insurance and other	24,757		27,849		(11.1)%		112,415		116,315		(3.4)%
Subtotal	471,796		493,739		(4.4)%		2,110,771		2,172,495		(2.8)%
Parts, service and collision repair	90,205		85,871		5.0%		350,514		337,675		3.8%
Total	562,001		579,610		(3.0)%		2,461,285		2,510,170		(1.9)%
New retail vehicles sold (units)	6,106		6,806		(10.3)%		26,616		29,591		(10.1)%
New fleet vehicles sold (units)	1,039		1,114		(6.7)%		6,663		6,322		5.4%
Used retail vehicles sold (units)	4,020		3,682		9.2%		17,082		16,000		6.8%
Total	11,165		11,602		(3.8)%		50,361		51,913		(3.0)%
Total vehicles retailed (units)	10,126		10,488		(3.5)%		43,698		45,591		(4.2)%

Same Store Gross Profit and Profit Percentage
	Three Months Ended December 31
	Gross Profit						Gross Profit %
(in thousands of dollars)	2018		2017		% Change		2018	2017
Revenue Source
New vehicles ‑ Retail	19,326		19,634		(1.6)%		7.5%	7.0%
New vehicles ‑ Fleet	1,143		1,360		(16.0)%		2.3%	2.7%
Total New vehicles	20,469		20,994		(2.5)%		6.7%	6.4%
Used vehicles ‑ Retail	6,014		6,641		(9.4)%		5.7%	7.0%
Used vehicles ‑ Wholesale	519		1,151		(54.9)%		1.5%	2.8%
Total Used vehicles	6,533		7,792		(16.2)%		4.7%	5.7%
Finance, insurance and other	23,757		24,302		(2.2)%		96.0%	87.3%
Subtotal	50,759		53,088		(4.4)%		10.8%	10.8%
Parts, service and collision repair	44,799		45,446		(1.4)%		49.7%	52.9%
Total	95,558		98,534		(3.0)%		17.0%	17.0%

MD&A and Financial Statements

Information included in this press release is a summary of results. It should be read in conjunction with AutoCanada's consolidated financial statements and management's discussion and analysis for the quarter ended December 31, 2018, which can be found on the Company's website at www.autocan.ca or on www.sedar.com.

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. The following "Non-GAAP Measures" are defined in the annual MD&A; Operating (loss) profit; EBITDA; Adjusted EBITDA; Adjusted Net Earnings, Adjusted Net Earnings per Share and Adjusted Diluted Net Earnings Per Share; EBIT; Free Cash Flow; Adjusted Free Cash Flow; Absorption Rate; Average Capital Employed; Adjusted Average Capital Employed; Return on Capital Employed; and Adjusted Return on Capital Employed.

Conference Call

A conference call to discuss the results for the quarter and year ended December 31, 2018 will be held on March 15 at 9:00am Mountain (11:00am Eastern). To participate in the conference call, please dial 1.888.231.8191 approximately 10 minutes prior to the call.

AutoCanada's presentation that will be discussed on the conference call is available at the Company's website at www.autocan.ca.

This conference call will also be webcast live over the internet and can be accessed by all interested parties at the following URL: https://www.autocan.ca/investors/Q42018/

About AutoCanada

AutoCanada, a leading North American multi-location automobile dealership group currently operating 67 franchised dealerships, comprised of 28 brands, in eight provinces in Canada as well as a group in Illinois, USA and has over 4,200 employees. AutoCanada currently sells Chrysler, Dodge, Jeep, Ram, FIAT, Alfa Romeo, Chevrolet, GMC, Buick, Cadillac, Ford, Infiniti, Nissan, Hyundai, Subaru, Mitsubishi, Audi, Volkswagen, Kia, Mazda, Mercedes-Benz, Smart, BMW, MINI, Volvo, Toyota, Lincoln, and Honda branded vehicles. In 2018, our dealerships sold approximately 66,000 vehicles and processed approximately 915,000 service and collision repair orders in our 1,157 service bays generating revenue in excess of $3 billion.

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

Forward Looking Statements

Certain statements contained in management's discussion and analysis are forward‑looking statements and information (collectively "forward‑looking statements", including "with respect to", "among other things", "future performance", "expense reductions" and the "Go Forward Plan"), within the meaning of the applicable Canadian securities legislation. We hereby provide cautionary statements identifying important factors that could cause our actual results to differ materially from those projected in these forward‑looking statements. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of words or phrases such as "will likely result", "are expected to", "will continue", "is  anticipated", "projection", "vision", "goals", "objective", "target", "schedules", "outlook", "anticipate", "expect", "estimate", "could", "should", "plan", "seek", "may", "intend", "likely", "will", "believe", "shall" and similar expressions) are not historical facts and are forward‑looking and may involve estimates and assumptions and are subject to risks, uncertainties and other factors some of which are beyond our control and difficult to predict. Accordingly, these factors could cause actual results or outcomes to differ materially from those expressed in the forward‑looking statements. Therefore, any such forward‑looking statements are qualified in their entirety by reference to the factors discussed throughout this document.

The Company's Annual Information Form and other documents filed with securities regulatory authorities (accessible through the SEDAR website www.sedar.com describe the risks, material assumptions and other factors that could influence actual results and which are incorporated herein by reference.

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

Additional Information

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

SOURCE AutoCanada Inc.

Raj Juneja, Chief Financial Officer, Phone: [phone], Email: [email protected]

Related Links

http://www.autocan.ca/