EDMONTON, May 4, 2017 /CNW/ - AutoCanada Inc. (the
"Company" or "AutoCanada") (TSX: ACQ) one of Canada's largest multi-location automobile
dealership groups, today announced financial results for the
three-month period ended March 31,
2017.
2017 First Quarter Highlights:
- New vehicles sold remained flat, with 8,508 units sold in the
first quarter of 2017 and 8,502 units in the first quarter of 2016,
compared to an overall market increase of 4.6%. While the overall
market is up 4.6%, new unit sales from the 19 brands that we
specifically retail are up 3.3% in the quarter compared to the
prior year.
- Overall Gross profit remained flat at $111,627 in the first quarter, compared to
$111,709 in the same quarter of 2016,
with gross profit as a percentage of revenue increasing from 16.8%
to 17.5%.
- The used vehicle department led the gain in gross profit as a
percentage of revenue increasing from 5.6% in the first quarter of
2016 to 7.2% in the first quarter of 2017.
- Finance, insurance and other, per vehicle retailed, has
increased 3.7% year-over-year.
- Parts, service and collision repair gross profit remained flat
at $47,284 in the first quarter,
compared to $47,669 in the same
quarter of 2016.
- Normalized operating expenses, after adjusted for non-recurring
items, was 86.4% compared to 86.0% in Q1, 2016.
The following table summarizes the Company's results for the
quarter ended March 31, 2017:
|
|
|
Three months ended
March 31
|
Consolidated
Operational Data
|
2017
|
2016
|
%
Change
|
EBITDA
|
14,136
|
18,312
|
(22.8)%
|
Adjusted
EBITDA
|
15,514
|
16,447
|
(5.7)%
|
Net
earnings
|
3,678
|
7,272
|
(49.4)%
|
Adjusted net
earnings
|
4,602
|
6,253
|
(26.4)%
|
Basic EPS
|
0.13
|
0.27
|
(51.9)%
|
Adjusted diluted
EPS
|
0.17
|
0.23
|
(26.1)%
|
New retail vehicles
sold (units)
|
6,753
|
7,078
|
(4.6)%
|
New fleet vehicles
sold (units)
|
1,755
|
1,424
|
23.2%
|
New vehicles sold
(units)
|
8,508
|
8,502
|
0.1%
|
Used retail vehicles
sold (units)
|
4,547
|
4,799
|
(5.3)%
|
Total vehicles sold
(units)
|
13,055
|
13,301
|
(1.8)%
|
Revenue
|
639,027
|
666,872
|
(4.2)%
|
Gross
Profit
|
111,627
|
111,709
|
(0.1)%
|
Gross Profit
%
|
17.5%
|
16.8%
|
4.2%
|
Operating
expenses
|
98,170
|
96,047
|
2.2%
|
Operating expenses as
% of gross profit
|
87.9%
|
86.0%
|
2.2%
|
Free cash
flow
|
621
|
4,045
|
(84.6)%
|
Adjusted free cash
flow
|
15,217
|
6,035
|
152.2%
|
|
*See the Company's
Management's Discussion and Analysis for the quarter ended March
31, 2017 for complete footnote disclosures.
|
"We have seen some positive results in specific regions and
areas of our business having realized growth in gross profit
margins and cash flow from operations," said Steven J. Landry, President & Chief
Executive Officer. "We are also excited about our recent
acquisition of Mercedes-Benz Rive-Sud in Montreal which is an example of our
acquisition strategy at work of adding new brands in metropolitan
areas that further expand our dealer network and drive growth
potential in major Canadian markets."
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 shall be paid based on
a number of factors.
On May 4, 2017, the Board declared
a quarterly eligible dividend of $0.10 per common share on AutoCanada's
outstanding Class A shares, payable on June
15, 2017 to shareholders of record at the close of business
on May 31, 2017.
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".
Outlook
The outlook regarding new retail vehicle sales in Canada is difficult to predict, as
manufacturers do not publicly disclose fleet and retail sales
separately and is largely a function of the condition of the local
economy and affordability which equates to vehicle price, loan
rates, and trade in values. In Canada, factors contributing to new vehicle
sales will vary widely by province.
Despite new light vehicle sales for the Canadian market
decreasing 1.6% in April1, we believe that there are
opportunities to grow in our dealerships, with particular focus on
new vehicle sales, gross profit margins and cost reductions. We
remain focused on delivering better financial performance
irrespective of the energy sector and market conditions in our key
markets, while also maintaining our focus on cost reductions. In
the first quarter we were able to maintain gross profit and
increase gross profit as a percentage of revenue despite lower
vehicle sales and we plan to continue our success in this area.
Of the 17 dealerships that became same store in the fourth
quarter of 2016, 11 of these are located in Alberta. As a result, we anticipate same
stores sales results will continue to be impacted in 2017 as the
Alberta economy begins to recover.
We will continue to dedicate significant resources to newly
acquired dealerships to integrate acquisitions and position them to
be successful in their respective markets.
We plan to spend approximately $30.9
million in 2017 on dealership relocations and expansions.
Construction continues on the relocation of Audi Winnipeg, which we
anticipate will be completed in Q4, 2017 and will lead to increased
customer traffic and sales. We are also constructing two new Nissan
Open Point locations in Calgary
and Ottawa.
We are committed to delivering meaningful returns to our
shareholders. Although we continue to confront headwinds in key
markets, we believe that we can generate better results by
improving employee productivity, realizing the benefits of our
scale and continuing to grow our brand and geographic footprints
with accretive acquisitions.
1 DesRosiers Automotive Consultants Inc.
SELECTED QUARTERLY 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)
|
Q1
2017
|
Q4
2016
|
Q3
2016
|
Q2
2016
|
Q1
2016
|
Q4
2015
|
Q3
2015
|
Q2
2015
|
Income Statement
Data
|
|
|
|
|
|
|
|
|
|
New
vehicles
|
353,540
|
348,107
|
444,482
|
497,025
|
363,181
|
368,242
|
471,018
|
483,435
|
|
Used
vehicles
|
165,408
|
157,724
|
179,582
|
208,016
|
180,108
|
167,100
|
179,270
|
194,956
|
|
Parts, service and
collision repair
|
90,735
|
92,310
|
95,585
|
100,317
|
94,721
|
102,220
|
93,139
|
99,304
|
|
Finance, insurance
and other
|
29,344
|
31,133
|
33,529
|
36,899
|
28,862
|
34,752
|
37,778
|
39,182
|
Revenue
|
639,027
|
629,274
|
753,178
|
842,257
|
666,872
|
672,314
|
781,205
|
816,877
|
|
New
vehicles
|
25,590
|
25,042
|
31,578
|
34,410
|
27,267
|
27,482
|
34,300
|
34,861
|
|
Used
vehicles
|
11,940
|
10,064
|
12,950
|
13,758
|
10,420
|
10,326
|
10,949
|
11,000
|
|
Parts, service and
collision repair
|
47,284
|
52,957
|
47,676
|
52,957
|
47,669
|
51,760
|
48,336
|
49,859
|
|
Finance, insurance
and other
|
26,813
|
28,722
|
30,733
|
33,577
|
26,353
|
34,354
|
35,088
|
33,955
|
Gross
profit
|
111,627
|
116,785
|
122,937
|
134,702
|
111,709
|
123,922
|
128,673
|
129,675
|
Gross Profit
%
|
17.5%
|
18.6%
|
16.3%
|
16.0%
|
16.8%
|
18.4%
|
16.5%
|
15.9%
|
Operating
expenses
|
98,170
|
97,397
|
99,041
|
107,932
|
96,047
|
101,310
|
100,824
|
100,568
|
Operating expenses as
a % of gross profit
|
87.9%
|
83.4%
|
80.6%
|
80.1%
|
86.0%
|
81.8%
|
78.4%
|
77.6%
|
Net earnings (loss)
attributable to AutoCanada shareholders
|
3,678
|
13,785
|
(32,619)
|
14,158
|
7,272
|
(7,361)
|
11,690
|
13,523
|
Adjusted net earnings
attributable to AutoCanada shareholders
|
4,602
|
7,536
|
10,327
|
15,523
|
6,253
|
8,610
|
12,535
|
13,957
|
EBITDA attributable
to AutoCanada shareholders
|
14,136
|
25,260
|
23,842
|
27,072
|
18,312
|
23,353
|
26,379
|
27,397
|
EBITDA attributable
to AutoCanada shareholders as a % of Sales
|
2.7%
|
4.5%
|
3.6%
|
3.7%
|
3.2%
|
3.5%
|
3.8%
|
3.8%
|
Free cash
flow
|
621
|
23,424
|
30,897
|
37,922
|
4,045
|
9,066
|
14,995
|
17,776
|
Adjusted free cash
flow
|
15,217
|
13,133
|
27,766
|
21,632
|
6,035
|
8,078
|
18,951
|
19,187
|
Basic earnings per
share
|
0.13
|
0.50
|
(1.19)
|
0.53
|
0.27
|
(0.29)
|
0.48
|
0.56
|
Diluted earnings per
share
|
0.13
|
0.50
|
(1.19)
|
0.53
|
0.27
|
(0.29)
|
0.47
|
0.56
|
Basic adjusted
earnings per share
|
0.17
|
0.28
|
0.38
|
0.57
|
0.23
|
0.34
|
0.51
|
0.56
|
Diluted adjusted
earnings per share
|
0.17
|
0.27
|
0.38
|
0.57
|
0.23
|
0.34
|
0.51
|
0.57
|
Dividends declared
per share
|
0.10
|
0.10
|
0.10
|
0.10
|
0.25
|
0.25
|
0.25
|
0.25
|
Operating
Data
|
|
|
|
|
|
|
|
|
Vehicles (new and
used) sold
|
13,055
|
12,912
|
15,955
|
17,425
|
13,301
|
14,150
|
17,086
|
17,739
|
New vehicles
sold
|
8,508
|
8,449
|
10,983
|
12,098
|
8,502
|
9,210
|
12,018
|
12,296
|
New retail vehicles
sold
|
6,753
|
7,590
|
8,949
|
9,374
|
7,078
|
8,016
|
9,985
|
9,929
|
New fleet vehicles
sold
|
1,755
|
859
|
2,034
|
2,724
|
1,424
|
1,194
|
2,033
|
2,367
|
Used retail vehicles
sold
|
4,547
|
4,463
|
4,972
|
5,327
|
4,799
|
4,940
|
5,068
|
5,443
|
# of service and
collision repair orders completed
|
197,069
|
217,418
|
209,912
|
227,446
|
209,194
|
230,772
|
202,692
|
215,142
|
Absorption
rate
|
82%
|
86%
|
89%
|
90%
|
83%
|
93%
|
91%
|
94%
|
# of dealerships at
period end
|
56
|
55
|
53
|
53
|
53
|
54
|
50
|
49
|
# of same stores
dealerships
|
47
|
44
|
33
|
27
|
27
|
28
|
26
|
24
|
# of service bays at
period end
|
949
|
928
|
898
|
898
|
898
|
912
|
862
|
842
|
Same stores revenue
growth
|
(7.1)%
|
(10.0)%
|
(9.2)%
|
(3.2)%
|
(3.1)%
|
(12.1)%
|
(6.9)%
|
(2.8)%
|
Same stores gross
profit growth
|
(1.2)%
|
(5.8)%
|
(11.0)%
|
(5.3)%
|
(5.5)%
|
(14.3)%
|
(14.1)%
|
(11.0)%
|
|
*See the Company's
Management's Discussion and Analysis for the quarter ended March
31, 2017 for complete footnote disclosures.
|
The following tables summarizes the results for the quarter
ended March 31, 2017 on a same store
basis by revenue source and compares these results to the same
period in 2016.
|
|
Same Store Revenue
and Vehicles Sold
|
|
|
|
Three Months Ended
March 31
|
(in thousands of
dollars)
|
2017
|
2016
|
%
Change
|
Revenue
Source
|
|
|
|
|
New vehicles ‑
Retail
|
251,515
|
277,777
|
(9.5)%
|
|
New vehicles ‑
Fleet
|
58,810
|
49,844
|
18.0%
|
Total New
vehicles
|
310,325
|
327,621
|
(5.3)%
|
|
Used vehicles ‑
Retail
|
104,673
|
121,601
|
(13.9)%
|
|
Used vehicles ‑
Wholesale
|
43,987
|
44,976
|
(2.2)%
|
Total Used
vehicles
|
148,660
|
166,577
|
(10.8)%
|
Finance, insurance
and other
|
26,270
|
26,494
|
(0.8)%
|
Subtotal
|
485,255
|
520,692
|
(6.8)%
|
Parts, service and
collision repair
|
78,096
|
86,040
|
(9.2)%
|
Total
|
563,351
|
606,732
|
(7.1)%
|
New retail vehicles
sold (units)
|
5,802
|
6,338
|
(8.5)%
|
New fleet vehicles
sold (units)
|
1,542
|
1,279
|
20.6%
|
Used retail vehicles
sold (units)
|
4,076
|
4,433
|
(8.1)%
|
Total
|
11,420
|
12,050
|
(5.2)%
|
Total vehicles
retailed (units)
|
9,878
|
10,771
|
(8.3)%
|
|
|
Same Store Gross
Profit and Profit Percentage
|
|
|
|
Three Months Ended
March 31
|
|
Gross
Profit
|
Gross Profit
%
|
(in thousands of
dollars)
|
2017
|
2016
|
%
Change
|
2017
|
2016
|
Revenue
Source
|
|
|
|
|
|
|
New vehicles ‑
Retail
|
21,184
|
22,995
|
(7.9)%
|
8.4 %
|
8.3 %
|
|
New vehicles ‑
Fleet
|
1,707
|
1,592
|
7.2 %
|
2.9 %
|
3.2 %
|
Total New
vehicles
|
22,891
|
24,587
|
(6.9)%
|
7.4 %
|
7.5 %
|
|
Used vehicles ‑
Retail
|
9,465
|
8,970
|
5.5 %
|
9.0 %
|
7.4 %
|
|
Used vehicles ‑
Wholesale
|
1,217
|
751
|
62.1 %
|
2.8 %
|
1.7 %
|
Total Used
vehicles
|
10,682
|
9,721
|
9.9 %
|
7.2 %
|
5.8 %
|
Finance, insurance
and other
|
23,890
|
24,217
|
(1.4)%
|
90.9 %
|
91.4 %
|
Subtotal
|
57,463
|
58,525
|
(1.8)%
|
11.8 %
|
11.2 %
|
Parts, service and
collision repair
|
43,447
|
43,600
|
(0.4)%
|
55.6 %
|
50.7 %
|
Total
|
100,910
|
102,125
|
(1.2)%
|
17.9 %
|
16.8 %
|
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 March 31,
2017, 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;
EBITDA; Adjusted EBITDA; Adjusted Net Earnings and Adjusted Net
Earnings per Share; EBIT; Free Cash Flow; Adjusted Free Cash Flow;
Adjusted Average Capital Employed; Absorption Rate; 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 ended
March 31, 2017 will be held on
May 5, 2017 at 8:00am MT (10:00am
ET). To participate in the conference call, please dial
1.888.231.8191 approximately 10 minutes prior to the call.
This conference call will also be webcast live over the internet
and can be accessed by all interested parties at the following URL:
http://investors.autocan.ca/Q12017
Webcast of AGM Presentation
AutoCanada will hold its Annual Meeting on Friday, May 5,
2017 at 10:00am MT (12:00pm ET) at the Hilton
Doubletree West Edmonton Hotel, Room SBCC #7, 16615-109
Avenue, Edmonton, Alberta.
The Meeting materials are available online on SEDAR
at www.sedar.com and on AutoCanada's website
at http://investors.autocan.ca.
To view a live webcast of the Annual General Meeting, please
access the following URL:
http://investors.autocan.ca/2017AGM
At the Annual General Meeting, shareholders will be asked to
elect the directors of the Company for the ensuing year and to
appoint PricewaterhouseCoopers LLP as the independent auditor of
the Company. Following the conclusion of the formal proceedings of
AutoCanada's annual shareholder meeting, Steven J. Landry,
President & CEO, will address shareholders and provide a recap
of FY2016, discuss the current state of the Company and will
discuss key initiatives for the coming year.
About AutoCanada
AutoCanada is one of Canada's
largest multi-location automobile dealership groups, currently
operating 57 franchised dealerships, comprised of 65 franchises, in
eight provinces and has over 4,250 employees. AutoCanada currently
sells Chrysler, Dodge, Jeep, Ram, FIAT, Chevrolet, GMC,
Buick, Cadillac, Infiniti, Nissan,
Hyundai, Subaru, Mitsubishi, Audi, Volkswagen, Kia, Mercedes-Benz,
BMW and MINI branded vehicles. In 2016 with $2.9 billion in revenue, our dealerships sold
approximately 60,000 vehicles and processed approximately 864,000
service and collision repair orders in our 928 service bays.
Dealerships generate 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. The Company earns fees for arranging financing
on new and used vehicle purchases on behalf of third parties. Under
agreements with retail financing sources, the Company is 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 management's discussion and
analysis 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", "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.
Additional Information
Additional information about AutoCanada is available at the
Company's website at www.autocan.ca and www.sedar.com.
SOURCE AutoCanada Inc.