- Revenue was $1,195.8 million as
compared to $876.1 million in the
prior year, an increase of 36.5% and the highest fourth quarter
revenue reported in the Company's history
- Net income for the period was $69.4
million versus $24.3 million
in the prior year and includes recovery of non-financial assets of
$39.8 million in Q4 2021 and
$11.2 million in Q4 2020
- Net income margin1 was 5.8% versus 2.8% in the prior
year, an increase of 3.0 percentage points
- Adjusted EBITDA2 was $65.9
million versus $40.5 million
in the prior year, an increase of 62.8%
- Adjusted EBITDA margin2 was 5.5% versus 4.6% in the
prior year, an increase of 0.9 percentage points
- Diluted earnings per share was $2.38, an increase of $1.57 from $0.81 in
the prior year.
- Indebtedness of $285.9 million at
the end of Q4 2021 compares to $197.2
million at the end of Q4 2020
- Net indebtedness2 of $212.7
million at the end of Q4 2021 compares to $89.5 million at the end of Q4 2020
EDMONTON, AB, March 2, 2022 /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 month period ended
December 31, 2021.
"Our operations delivered yet another record fourth quarter,
reflecting the fundamental strength and resiliency of our business
model," said Paul Antony, Executive
Chairman of AutoCanada. "Continued strong used vehicle sales
and F&I business, proactive inventory management as well as
outstanding performance in our U.S. operations were key drivers of
our results."
"We also significantly advanced our acquisition strategy in the
fourth quarter with the recent Autopoint transaction, providing
strong brand and geographic diversification, and adding
considerable size, scale and scope to AutoCanada's existing
platform in a growing market."
"Looking ahead in 2022, we will continue to build on our
positive momentum and focus on strategic growth initiatives to
drive industry-leading performance and enhance shareholder returns,
regardless of changing market conditions. We remain well positioned
to continue to execute on our acquisition strategy in the coming
quarters with several dealerships representing over $100 million in annual revenue currently being
evaluated."
In addition, AutoCanada announced today that Michael Rawluk, President of Canadian Operations
and Director, is departing the Company for personal reasons.
"I would like to thank Michael in his role as President of
Canadian Operations, for his dedicated service and substantial
contributions to AutoCanada since 2018. He has been
instrumental in stabilizing our Canadian dealership platform,
strengthening the team of talented professionals running the
business day-to-day and successfully positioning us to enter our
next stage of growth. We wish him well in his future endeavors,"
said Paul Antony, Executive
Chairman. "While the team we've put in place over the last few
years is exceptional and we do not anticipate any impact on the
Company's strong momentum heading into 2022, we have been actively
in dialogue with a number of candidates for the role. We expect to
make an announcement in the coming weeks, given the advanced stage
of these discussions."
"The AutoCanada team has worked tirelessly over the last three
and a half years and I am very proud of all that we have
accomplished," said Michael
Rawluk. "AutoCanada's future is bright and I am very
confident in the team as they embark on the next chapter of the
Company's growth story."
2021 Fourth Quarter Key Highlights and Recent
Developments
All comparisons presented below are between the three-month
period ended December 31, 2021 and the three-month period
ended December 31, 2020, unless
otherwise indicated.
Executive Overview
The momentum generated by the Company's previous three quarters
carried over into the record-setting fourth quarter of 2021 as
revenue reached $1,195.8 million as
compared to $876.1 million in the
prior year, an increase of 36.5%. Record Q4 2021 results were
driven by the strong performance of our used vehicle and finance
and insurance ("F&I") business operations, and the material
improvements from our U.S. Operations.
Net income for the period was $69.4
million, as compared to $24.3
million in Q4 2020. Diluted earnings per share was
$2.38, an increase of $1.57 from $0.81 in
the prior year.
Adjusted EBITDA2 for the period was $65.9 million as compared to $40.5 million reported in Q4 2020, an improvement
of 62.8%. Adjusted EBITDA margin2 was 5.5% as compared
to 4.6% in the prior year, an increase of 0.9 percentage
points ("ppts").
Gross profit increased by $75.8
million to $228.5 million, an
increase of 49.6%, as compared to prior year. This increase was
largely driven by the increases of $18.3
million from used vehicles and $20.2
million from F&I. In addition, used retail
vehicles1 sales increased by 4,504 units, up 61.0%, to
11,893, which contributed to the consolidated used to new retail
units ratio1 moving to 1.45 from 0.86. F&I gross
profit per retail unit average1 increased to
$3,177, up 16.6% or $451 per unit. Gross profit
percentage1 of 19.1% was a result of strong performance
across all areas of the business and compares to 17.4% in the
prior year.
Contributing to our fourth quarter, our U.S. Operations
continued to demonstrate strong growth and performance. Actions
taken by management previously, including the strategic build-up of
used vehicle inventory, the creation of a dedicated used vehicle
team, top-grading dealership management, expanding teams across all
levels of the business, and the execution of operational best
practices, contributed to $39.2
million of gross profit and gross profit margin of 19.9%.
The increase in gross profit of $22.6
million, an increase of 136% as compared to prior year, was
driven by improvements across all aspects of the business.
Proactive inventory management for both new and used vehicles
continued to be a key driver to the Company's success in delivering
both strong revenue and retail margin growth across all our
business operations in the fourth quarter. We continue to manage
our new vehicle inventory as the chip shortage remains an issue,
particularly impacting new vehicle inventory supply. While we are
gradually seeing improvements in both available new vehicle
inventory and allocations, we are not expecting a return to
"normalcy" in inventory levels until late 2022 or early 2023.
Compensating for reduced new vehicle inventory supply, we doubled
our used vehicle inventory position to $441.7 million as at December 31, 2021 as compared to $218.8 million in the prior year. Our strong
inventory position is expected to meet market demand and maximize
profitability as we enter the prime selling months at the tail end
of Q1 2022.
Net indebtedness2 increased by $182.9 million from September 30, 2021 and increased by $123.2 million from December 31, 2020 to $212.7 million at the end of Q4 2021. The
increase from Q3 2021 includes debt incurred in connection with the
acquisitions of Airdrie Autobody Ltd., a collision centre in
Canada, Crystal Lake Chrysler
Dodge Jeep Ram Inc., a Stellantis dealership in the U.S., the 11
dealerships from the Autopoint Group, and the purchase of
dealership real estate under development in Maple Ridge, BC, which represented a total
cash outflow of approximately $181
million during the quarter. The Crystal Lake and Autopoint Group acquisitions
added brands that we did not have in the respective operations
groups, including Stellantis in our U.S. Operations and Honda,
Acura, and Kia in our Canadian Operations. Free cash
flow2 on a trailing twelve month ("TTM") basis was
$107.2 million at Q4 2021 as compared
to $131.4 million in Q4 2020; the
decline in free cash flow2 between years was driven
primarily by reduced government assistance in 2021, increased cash
taxes, stock based compensation related cash payments, and changes
in working capital. Additionally, our net indebtedness leverage
ratio2 of 1.0x remained well below our target range at
the end of Q4 2021, as compared to 1.3x in Q4 2020.
Had all of the acquisitions completed in fiscal 2021 occurred at
January 1, 2021, consolidated pro
forma net income would have been $174.8
million compared to consolidated net income $167.2 million for the year ended December 31, 2021. Pro forma normalized adjusted
EBITDA2 was $266.4 million
as compared to normalized adjusted EBITDA2 of
$240.4 million for the year
ended December 31, 2021.
The Company remains well-positioned to continue to execute on
its acquisition strategy in the coming quarters. We continue to
develop a transaction pipeline with a number of dealerships
currently being evaluated. We currently have approximately
$100 million in annual revenue under
signed letters of intent ("LOI's") and purchase agreements.
Our performance, both in Canada
and U.S. Operations, continues our trend of sustainable improvement
and demonstrates the efficacy of our complete business model and
strategic initiatives. We remain aware that uncertainty continues
to exist in the macroeconomic environment given the ongoing
challenges associated with the global pandemic. Uncertainties may
include potential economic recessions or downturns, continued
disruptions to the global automotive manufacturing supply chain,
and other general economic conditions resulting in reduced demand
for vehicle sales and service. We will continue to remain proactive
and vigilant in assessing how COVID-19 may impact our organization
and remain committed to optimizing and building stability and
resiliency into our business model to ensure we are able to drive
industry-leading performance regardless of changing market
condition.
1 This press release contains
"SUPPLEMENTARY FINANCIAL MEASURES". See Section 15. NON-GAAP AND
OTHER FINANCIAL MEASURES of the Company's Management's Discussion
& Analysis (MD&A) for the year ended December 31, 2021 for
further information regarding the composition of these
measures.
|
2 See
"NON-GAAP AND OTHER FINANCIAL MEASURES" below.
|
Consolidated AutoCanada Highlights
RECORD SETTING FOURTH QUARTER
As a result of the execution of our complete business model,
AutoCanada delivered a record setting fourth quarter.
For the three-month period ended December
31, 2021:
- Revenue was $1,195.8 million, an
increase of $319.7 million or
36.5%
- Total vehicles1 sold were 20,296, an increase of
3,320 units or 19.6%
-
- Used retail vehicles1 sold increased by 4,504 or
61.0%
- Net income for the period was $69.4
million (or $2.38 per diluted
share) versus $24.3 million (or
$0.81 per diluted share)
-
- Recovery of non-financial assets of $39.8 million was recognized in Q4 2021 and
$11.2 million was recognized in Q4
2020
- Loss on redemption liabilities of $(14.1) million was recognized in Q4 2021 and a
gain of $2.1 million was recognized
in Q4 2020
- Unrealized fair value gain on embedded derivative of
$24.8 million was recognized in Q4
2021
- Adjusted EBITDA2 increased by 62.8% to $65.9 million, an increase of $25.4 million
- Net indebtedness2 of $212.7
million reflected an increase of $182.9 million from the end of Q3 2021 and an
increase of $123.2 million from the
end of the prior year
Canadian Operations Highlights
USED RETAIL UNIT1 SALES
INCREASED BY 3,002 UNITS OR 44.6%
We outperformed the Canadian market, as same store new retail
unit1 sales decreased by (11.6)% as compared to the
market decrease of (11.9)%, for same store brands represented by
AutoCanada as reported by DesRosiers Automotive Consultants
("DesRosiers"), an outperformance of 0.3 ppts.
Our used vehicle and F&I segments were key drivers of the
record earnings in Q4 2021. Used vehicle gross profit
percentage1 increased to 7.8% as compared to 7.4% in the
prior year. F&I gross profit per retail unit
average1 increased to $3,130, up 11.1% or $313 per unit.
Current period results include the acquisitions of PG Klassic
Autobody collision centre in Q2 2021, Mark
Wilson's Better Used Cars and Autolux MB Collision in Q3
2021, Airdrie Autobody Ltd. collision centre on October 1, 2021 and the Autopoint Group on
December 1, 2021. Unless stated
otherwise, all results for acquired businesses are included in all
Canadian references in the MD&A.
For the three-month period ended December
31, 2021:
- Revenue was $998.8 million, an
increase of 28.3%
- Used retail vehicles1 sold increased by 3,002 or
44.6%
-
- Average TTM Canadian used retail unit sales per dealership per
month1, excluding Used Digital Retail Division
dealerships, improved to 52, as compared to 47 in the prior
year
- Used to new retail units ratio1 increased to 1.45
from 0.93
-
- TTM used to new retail ratio1 improved to 1.43 at Q4
2021 as compared to 0.95 at Q4 2020
- F&I gross profit per retail unit average1
increased to $3,130, up 11.1% or
$313 per unit
- Net income for the period was $62.3
million, up 145.5% from a net income of $25.4 million in 2020
- Adjusted EBITDA2 increased 40.6% to $55.1 million, an increase of $15.9 million
-
- Adjusted EBITDA margin2 was 5.5% as compared to 5.0%
in the prior year, an increase of 0.5 ppts
1 This press release contains
"SUPPLEMENTARY FINANCIAL MEASURES". See Section 15. NON-GAAP AND
OTHER FINANCIAL MEASURES of the Company's Management's Discussion
& Analysis (MD&A) for the year ended December 31, 2021 for
further information regarding the composition of these
measures.
|
2 See
"NON-GAAP AND OTHER FINANCIAL MEASURES" below.
|
U.S. Operations Highlights
REVENUE INCREASED BY 102% TO
$197.0 MILLION
As a result of the U.S. management team transition in late Q1
2021, U.S. Operations have demonstrated continued and sustainable
improvements due to a fundamental shift in the operating and sales
culture of the dealerships. Management's actions have led to
improved metrics on multiple fronts and set a fourth quarter record
with a total gross profit percentage of 19.9%. Improvements in U.S.
Operations also included a 76.2% increase in retail
unit1 sales and an increase in F&I gross profit per
retail unit average1 to $3,387 per unit, up 60.5% or $1,277 per unit.
Current period results include the acquisition of Crystal Lake
Chrysler Dodge Jeep Ram Inc. on November 4,
2021.
- Revenue was $197.0 million, an
increase of 102%
- Used retail vehicles1 sold increased by 1,502 units
or 226%
- Net income (loss) for the period increased by $8.2 million to $7.1
million, from $(1.0) million
in 2020
- Adjusted EBITDA2 was $10.7
million, an increase of $9.5
million from 2020
Same Store Metrics - Canadian Operations
F&I GROSS PROFIT PER RETAIL UNIT AVERAGE
INCREASED TO $3,312, UP 18.2% OR
$509 PER UNIT
We outperformed the Canada
market by 0.3 ppts as same store new retail units1
decreased by (11.6)% as compared to the market decrease of (11.9)%,
for same store brands represented by AutoCanada as reported by
DesRosiers. Same store used retail units1 increased by
1,523, an increase of 22.6% as compared to prior year. The
continued optimization of the Company's complete business model is
highlighted by the year-over-year 29.4% improvement in gross profit
across each individual business segment which collectively totaled
$172.7 million.
The Company believes that it takes two years for an acquired
dealership to achieve normal operating results. All same store
metrics include only Canadian dealerships which have been owned for
at least two full years since acquisition to support meaningful
analysis. RightRide locations are included in the same stores
metrics as they are an extension of the Project 50 initiative to
support Canadian dealerships in reaching credit challenged
customers.
- Revenue increased to $852.9
million, an increase of 14.1%
- Gross profit increased by $39.2
million or 29.4%
- Used to new retail units ratio1 increased to 1.29
from 0.93
-
- Used retail unit1 sales increased by 22.6%, an
increase of 1,523 units
- Average annual same store used retail unit1 sales
per dealership per month reached 63, as compared to 46 in the prior
year
- For the thirteenth consecutive quarter of year-over-year
growth, F&I gross profit per retail unit average1
increased to $3,312, up 18.2% or
$509 per unit; gross profit increased
to $48.4 million as compared to
$39.1 million in the prior year, an
increase of 24.0%
- Parts, service and collision repair ("PS&CR") gross profit
increased to $60.2 million, an
increase of 21.1%.
-
- PS&CR repair gross profit percentage increased to 56.0% as
compared to 55.0% in the prior year
1 This press release contains
"SUPPLEMENTARY FINANCIAL MEASURES". See Section 15. NON-GAAP AND
OTHER FINANCIAL MEASURES of the Company's Management's Discussion
& Analysis (MD&A) for the year ended December 31, 2021 for
further information regarding the composition of these
measures.
|
2 See
"NON-GAAP AND OTHER FINANCIAL MEASURES" below.
|
Financing and Investing Activities and Other Recent
Developments
COMPLETED ACQUISITION OF THE AUTOPOINT GROUP,
ISSUED $350 MILLION SENIOR UNSECURED
NOTES
Net indebtedness2 of $212.7
million resulted in a net indebtedness leverage
ratio2 of 1.0x. Acquisition expenditures in the
quarter were approximately $181 million. Financing and
investing activities included the following:
- On October 1, 2021, the Company
acquired 100% of the shares in Airdrie Autobody Ltd., a collision
centre located in Airdrie,
Alberta.
- On November 4, 2021, the Company
acquired certain franchise rights, inventories and assets to be
used in the operations of Crystal Lake Chrysler Dodge Jeep Ram
Inc., a Stellantis dealership located in Crystal Lake, Illinois and the related
dealership real estate.
- On December 1, 2021 the Company
acquired substantially all of the assets of eleven dealerships from
the Autopoint Group located in Ontario.
- On December 17, 2021, the Company
acquired the dealership real estate under development in
Maple Ridge, British
Columbia.
- On December 20, 2021, the Company
received approval from the TSX to commence a Normal Course Issuer
Bid. As at March 2, 2022, the Company
repurchased and cancelled 542,401 shares under the Normal Course
Issuer Bid for $20 million.
- On January 12, 2022, S&P
Global Ratings ("S&P") issued a research update and raised both
the issuer credit rating and the Company's senior unsecured notes
to 'B+'.
- On February 7, 2022, amended and
extended our existing credit facility for total aggregate bank
facilities of $1.3 billion, with a
maturity date of April 14, 2025, and
included the addition of The Toronto-Dominion Bank to its existing
syndicate of lenders which includes The Bank of Nova Scotia, Canadian Imperial Bank of
Commerce, Royal Bank of Canada,
Bank of Montreal, HSBC Bank
Canada, and ATB Financial.
- On February 7, 2022, issued
$350 million of Senior Unsecured
Notes at 5.75%, due February 7, 2029,
with the proceeds used to fund the redemption of the outstanding
$250 million 8.75% Senior Unsecured
Notes due February 11, 2025, to
reduce the outstanding balance under its syndicated credit facility
and for general corporate purposes including acquisitions.
Fourth Quarter Financial Information
The following table summarizes the Company's results for the
quarter and year ended December 31,
2021:
|
Three Months Ended
December 31
|
|
Year Ended
December 31
|
Consolidated
Operational Data
|
2021
|
2020
|
%
Change
|
|
2021
|
2020
|
%
Change
|
Revenue
|
1,195,782
|
876,121
|
36.5%
|
|
4,653,415
|
3,329,494
|
39.8%
|
Gross
profit
|
228,514
|
152,737
|
49.6%
|
|
834,183
|
547,326
|
52.4%
|
Gross profit
%
|
19.1%
|
17.4%
|
1.7 ppts
|
|
17.9%
|
16.4%
|
1.5 ppts
|
Operating
expenses
|
170,008
|
119,442
|
42.3%
|
|
612,609
|
461,663
|
32.7%
|
Operating
profit
|
99,410
|
46,664
|
113.0%
|
|
270,068
|
70,212
|
284.6%
|
Net income (loss) for
the period
|
69,398
|
24,320
|
185.4%
|
|
167,199
|
(6,623)
|
2624.5%
|
Basic net income
(loss) per share attributable to AutoCanada shareholders
|
2.54
|
0.87
|
192.0%
|
|
5.98
|
(0.27)
|
2314.8%
|
Diluted net income
(loss) per share attributable to AutoCanada shareholders
|
2.38
|
0.81
|
193.8%
|
|
5.60
|
(0.27)
|
2174.1%
|
Adjusted
EBITDA 2
|
65,873
|
40,472
|
62.8%
|
|
251,863
|
112,093
|
124.7%
|
|
|
|
|
|
|
|
|
New
retail vehicles1 sold (units)
|
8,204
|
8,623
|
(4.9)%
|
|
35,799
|
33,188
|
7.9%
|
New
fleet vehicles1 sold (units)
|
199
|
964
|
(79.4)%
|
|
1,872
|
2,923
|
(36.0)%
|
Total
new vehicles1 sold (units)
|
8,403
|
9,587
|
(12.4)%
|
|
37,671
|
36,111
|
4.3%
|
Used
retail vehicles1 sold (units)
|
11,893
|
7,389
|
61.0%
|
|
48,729
|
29,862
|
63.2%
|
Total
vehicles1 sold
|
20,296
|
16,976
|
19.6%
|
|
86,400
|
65,973
|
31.0%
|
Same
store new retail vehicles1 sold (units)
|
6,380
|
7,215
|
(11.6)%
|
|
28,762
|
28,277
|
1.7%
|
Same
store new fleet vehicles1 sold (units)
|
192
|
963
|
(80.1)%
|
|
1,864
|
2,919
|
(36.1)%
|
Same
store used retail vehicles1 sold (units)
|
8,248
|
6,725
|
22.6%
|
|
37,035
|
26,935
|
37.5%
|
Same
store total vehicles1 sold
|
14,820
|
14,903
|
(0.6)%
|
|
67,661
|
58,131
|
16.4%
|
Same
store1 revenue
|
852,913
|
747,707
|
14.1%
|
|
3,598,793
|
2,876,957
|
25.1%
|
Same
store1 gross profit
|
172,663
|
133,429
|
29.4%
|
|
675,771
|
486,961
|
38.8%
|
Same
store1 gross profit %
|
20.2%
|
17.8%
|
2.4%
|
|
18.8%
|
16.9%
|
1.9%
|
1 This
press release contains "SUPPLEMENTARY FINANCIAL MEASURES". See
Section 15. NON-GAAP AND OTHER FINANCIAL MEASURES of the Company's
Management's Discussion & Analysis (MD&A) for the year
ended December 31, 2021 for further information regarding the
composition of these measures.
|
2 See
"NON-GAAP AND OTHER FINANCIAL MEASURES" below.
|
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.
|
MD&A
Footnote
Reference3
|
Q4
2021
|
Q3
2021
REVISED
|
Q2
2021
REVISED
|
Q1
2021
REVISED
|
Q4
2020
|
Q3
2020
|
Q2
2020
|
Q1
2020
|
Income Statement
Data
|
4
|
|
|
|
|
|
|
|
|
New
vehicles4
|
7
|
467,085
|
498,142
|
547,593
|
451,061
|
466,468
|
544,415
|
381,427
|
341,582
|
Used
vehicles4
|
7
|
524,043
|
518,791
|
539,785
|
354,922
|
257,301
|
309,193
|
215,032
|
229,355
|
Parts, service and
collision repair4
|
7
|
136,800
|
116,953
|
122,459
|
108,427
|
105,362
|
111,739
|
90,417
|
102,453
|
Finance, insurance and
other4
|
7
|
67,854
|
72,868
|
71,218
|
55,414
|
46,990
|
51,753
|
40,571
|
35,436
|
Revenue
|
|
1,195,782
|
1,206,754
|
1,281,055
|
969,824
|
876,121
|
1,017,100
|
727,447
|
708,826
|
New
vehicles4
|
7
|
50,632
|
46,525
|
44,619
|
34,639
|
31,199
|
42,230
|
10,634
|
24,267
|
Used
vehicles4
|
7
|
38,118
|
39,669
|
40,269
|
23,206
|
19,787
|
29,819
|
4,224
|
10,173
|
Parts, service and
collision repair4
|
7
|
75,917
|
64,748
|
68,115
|
57,874
|
58,109
|
59,056
|
45,836
|
49,969
|
Finance, insurance and
other4
|
7
|
63,847
|
69,250
|
64,838
|
51,917
|
43,642
|
48,307
|
37,185
|
32,889
|
Gross
Profit
|
|
228,514
|
220,192
|
217,841
|
167,636
|
152,737
|
179,412
|
97,879
|
117,298
|
Gross profit
%
|
|
19.1%
|
18.2%
|
17.0%
|
17.3%
|
17.4%
|
17.6%
|
13.5%
|
16.5%
|
Operating
expenses
|
|
170,008
|
159,880
|
154,773
|
127,948
|
119,442
|
125,785
|
99,736
|
116,700
|
Operating expenses as
a % of gross profit
|
|
74.4%
|
72.6%
|
71.0%
|
76.3%
|
78.2%
|
70.1%
|
101.9%
|
99.5%
|
Operating profit
(loss)
|
|
99,410
|
62,841
|
66,153
|
41,664
|
46,664
|
56,884
|
(4,388)
|
(28,948)
|
(Recoveries)
impairment of non-financial assets
|
|
(39,846)
|
—
|
—
|
—
|
(11,248)
|
—
|
3,910
|
31,545
|
Net income
(loss)
|
|
69,398
|
38,769
|
37,698
|
21,334
|
24,320
|
35,962
|
(20,052)
|
(46,853)
|
Basic net income
(loss) per share attributable to AutoCanada shareholders
|
|
2.54
|
1.37
|
1.33
|
0.77
|
0.87
|
1.29
|
(0.72)
|
(1.70)
|
Diluted net income
(loss) per share attributable to AutoCanada shareholders
|
|
2.38
|
1.27
|
1.23
|
0.71
|
0.81
|
1.23
|
(0.72)
|
(1.70)
|
Dividends declared per
share
|
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
0.10
|
Adjusted
EBITDA 2
|
2
|
65,873
|
68,265
|
70,491
|
47,234
|
40,472
|
61,054
|
4,828
|
5,739
|
Free
cash flow 2
|
2
|
7,603
|
12,372
|
67,803
|
19,391
|
19,240
|
53,444
|
52,557
|
6,155
|
Operating
Data
|
4
|
|
|
|
|
|
|
|
|
New
retail vehicles1 sold
|
3
|
8,204
|
9,255
|
10,107
|
8,233
|
8,623
|
10,750
|
7,526
|
6,289
|
New
fleet vehicles1 sold
|
3
|
199
|
358
|
575
|
740
|
964
|
582
|
340
|
1,037
|
Total
new vehicles1 sold
|
3
|
8,403
|
9,613
|
10,682
|
8,973
|
9,587
|
11,332
|
7,866
|
7,326
|
Used
retail vehicles1 sold
|
3
|
11,893
|
13,831
|
13,271
|
9,734
|
7,389
|
8,836
|
7,228
|
6,409
|
Total
vehicles sold1
|
3
|
20,296
|
23,444
|
23,953
|
18,707
|
16,976
|
20,168
|
15,094
|
13,735
|
# of service and
collision repair orders completed
|
3,
5
|
232,373
|
199,870
|
214,149
|
182,869
|
203,086
|
195,004
|
172,956
|
185,452
|
# of dealerships at
period end
|
6
|
80
|
68
|
67
|
67
|
67
|
62
|
63
|
63
|
# of
same store dealerships
|
1
|
49
|
49
|
49
|
49
|
47
|
47
|
48
|
48
|
# of service bays at
period end
|
|
1,303
|
1,108
|
1,098
|
1,098
|
1,098
|
1,039
|
1,044
|
1,044
|
Same
stores1 revenue growth
|
1
|
14.1%
|
15.0%
|
54.2%
|
27.8%
|
6.3%
|
(1.1)%
|
(22.4)%
|
0.8%
|
Same
stores1 gross profit
growth
|
1
|
29.4%
|
18.6%
|
102.5%
|
35.0%
|
7.7%
|
17.1%
|
(33.9)%
|
(2.1)%
|
1 This
press release contains "SUPPLEMENTARY FINANCIAL MEASURES". See
Section 15 of the Company's MD&A for the year ended
December 31, 2021 for further information regarding the composition
of these measures.
|
2 See
"NON-GAAP AND OTHER FINANCIAL MEASURES" below.
|
3 See the
Company's MD&A for the quarter and year ended December 31, 2021
for complete footnote disclosures.
|
4 In Q4
2021, it was determined there were Revenues and Cost of sales
accounts incorrectly classified between revenue streams in the
first three quarters of 2021 within the U.S. Operations segment. As
a result, the classification of these accounts has been corrected
and we have revised the Q1, Q2, and Q3 2021 amounts. This
reclassification had no impact on total gross
profit.
|
The following tables summarize the results for the quarter and
year ended December 31, 2021 on a
same store basis by revenue source and compares these results to
the same period in 2020.
Same Store Revenue and Vehicles
Sold1
|
Three Months Ended
December 31
|
|
Year Ended
December 31
|
|
2021
|
2020
|
%
Change
|
|
2021
|
2020
|
%
Change
|
Revenue
source
|
|
|
|
|
|
|
|
New vehicles -
retail
|
359,400
|
367,151
|
(2.1)%
|
|
1,533,513
|
1,406,109
|
9.1%
|
New vehicles -
fleet
|
11,958
|
40,203
|
(70.3)%
|
|
91,826
|
122,806
|
(25.2)%
|
Total new
vehicles
|
371,358
|
407,354
|
(8.8)%
|
|
1,625,339
|
1,528,915
|
6.3%
|
Used vehicles -
retail
|
267,151
|
176,013
|
51.8%
|
|
1,110,137
|
678,742
|
63.6%
|
Used vehicles -
wholesale
|
54,796
|
31,683
|
73.0%
|
|
241,861
|
149,608
|
61.7%
|
Total used
vehicles
|
321,947
|
207,696
|
55.0%
|
|
1,351,998
|
828,350
|
63.2%
|
Parts, service and
collision repair
|
107,491
|
90,496
|
18.8%
|
|
399,918
|
360,197
|
11.0%
|
Finance, insurance and
other
|
52,117
|
42,161
|
23.6%
|
|
221,538
|
159,495
|
38.9%
|
Total
|
852,913
|
747,707
|
14.1%
|
|
3,598,793
|
2,876,957
|
25.1%
|
New retail vehicles
sold (units)
|
6,380
|
7,215
|
(11.6)%
|
|
28,762
|
28,277
|
1.7%
|
New fleet vehicles
sold (units)
|
192
|
963
|
(80.1)%
|
|
1,864
|
2,919
|
(36.1)%
|
Total new vehicles
sold (units)
|
6,572
|
8,178
|
(19.6)%
|
|
30,626
|
31,196
|
(1.8)%
|
Used retail vehicles
sold (units)
|
8,248
|
6,725
|
22.6%
|
|
37,035
|
26,935
|
37.5%
|
Total vehicles sold
(units)
|
14,820
|
14,903
|
(0.6)%
|
|
67,661
|
58,131
|
16.4%
|
Total vehicles
retailed (units)
|
14,628
|
13,940
|
4.9%
|
|
65,797
|
55,212
|
19.2%
|
Same Store Gross Profit and Profit
Percentage1
|
Three Months Ended
December 31
|
|
Gross
Profit
|
|
Gross Profit
%
|
|
2021
|
2020
|
%
Change
|
|
2021
|
2020
|
Revenue
source
|
|
|
|
|
|
|
New vehicles -
retail
|
35,684
|
28,426
|
25.5%
|
|
9.9%
|
7.7%
|
New vehicles -
fleet
|
247
|
406
|
(39.2)%
|
|
2.1%
|
1.0%
|
Total new
vehicles
|
35,931
|
28,832
|
24.6%
|
|
9.7%
|
7.1%
|
Used vehicles -
retail
|
26,079
|
14,370
|
81.5%
|
|
9.8%
|
8.2%
|
Used vehicles -
wholesale
|
1,972
|
1,393
|
41.6%
|
|
3.6%
|
4.4%
|
Total used
vehicles
|
28,051
|
15,763
|
78.0%
|
|
8.7%
|
7.6%
|
Parts, service and
collision repair
|
60,240
|
49,762
|
21.1%
|
|
56.0%
|
55.0%
|
Finance, insurance and
other
|
48,441
|
39,072
|
24.0%
|
|
92.9%
|
92.7%
|
Total
|
172,663
|
133,429
|
29.4%
|
|
20.2%
|
17.8%
|
|
Year Ended
December 31
|
|
Gross
Profit
|
|
Gross Profit
%
|
|
2021
|
2020
|
%
Change
|
|
2021
|
2020
|
Revenue
source
|
|
|
|
|
|
|
New vehicles -
retail
|
140,962
|
103,062
|
36.8%
|
|
9.2%
|
7.3%
|
New vehicles -
fleet
|
(510)
|
1,015
|
(150.2)%
|
|
(0.6)%
|
0.8%
|
Total new
vehicles
|
140,452
|
104,077
|
35.0%
|
|
8.6%
|
6.8%
|
Used vehicles -
retail
|
94,767
|
43,581
|
117.5%
|
|
8.5%
|
6.4%
|
Used vehicles -
wholesale
|
14,021
|
6,772
|
107.0%
|
|
5.8%
|
4.5%
|
Total used
vehicles
|
108,788
|
50,353
|
116.1%
|
|
8.0%
|
6.1%
|
Parts, service and
collision repair
|
221,888
|
185,015
|
19.9%
|
|
55.5%
|
51.4%
|
Finance, insurance and
other
|
204,643
|
147,516
|
38.7%
|
|
92.4%
|
92.5%
|
Total
|
675,771
|
486,961
|
38.8%
|
|
18.8%
|
16.9%
|
1 This
press release contains "SUPPLEMENTARY FINANCIAL MEASURES". See
Section 15. NON-GAAP AND OTHER FINANCIAL MEASURES of the Company's
Management's Discussion & Analysis for the year ended December
31, 2021 for further information regarding the composition of these
measures.
2 See "NON-GAAP AND OTHER FINANCIAL MEASURES"
below.
|
MD&A and Financial Statements
Information included in this press release is a summary of
results. It should be read in conjunction with AutoCanada's
Consolidated Financial Statements and Management's Discussion and
Analysis for the year ended December 31, 2021, which can be
found on the Company's website at www.autocan.ca or on
www.sedar.com.
NON-GAAP AND OTHER FINANCIAL 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, financing activities, cash and cash equivalents, and
indebtedness determined in accordance with Canadian GAAP, as
indicators of our performance. We provide these additional non-GAAP
measures, capital management measures, and supplementary financial
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.
Adjusted EBITDA, adjusted EBITDA margin, normalized adjusted
EBITDA, income statement impacts and adjusted EBITDA on a pre-IFRS
16 basis, adjusted EBITDA margin on a pre-IFRS 16 basis, pro forma
adjusted EBITDA, pro forma normalized adjusted EBITDA, free cash
flow, net indebtedness, and net indebtedness leverage ratio 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 referenced non-GAAP
measures may differ from the methods used by other issuers.
Therefore, these measures may not be comparable to similar measures
presented by other issuers.
It should be noted that certain of the financial measures
described below include pro forma items estimating the impact of
the acquisitions if they had occurred on the first day of the
relevant period, or as of a specified date. Readers should
understand that these estimates were determined by management in
good faith and are not indicative of what the historical results of
the businesses acquired in the acquisitions actually were for the
relevant period, or what those results would have been if the
acquisitions had occurred on the dates indicated, or what they will
be for any future period. As a result, the pro forma financial
measures may not be indicative of the Company's financial position
that would have prevailed, or operating results that would have
been obtained, if the transactions had taken place on the dates
indicated or of the financial position or operating results which
may be obtained in the future. These pro forma financial measures
are not a forecast or projection of future results. The actual
financial position and results of operations of the Company for any
period following the closing of the acquisitions will vary from the
amounts set forth following pro forma financial measures, and such
variation may be material.
We list and define these "NON-GAAP MEASURES" below:
Adjusted EBITDA
Adjusted EBITDA (earnings before interest, taxes, depreciation,
and amortization) is an indicator of a company's operating
performance over a period of time and ability to incur and service
debt. Adjusted EBITDA provides an indication of the results
generated by our principal business activities prior to:
- Interest expense (other than interest expense on floorplan
financing), income taxes, depreciation, and amortization;
- Charges that introduce volatility unrelated to operating
performance by virtue of the impact of external factors (such as
share-based compensation amounts attributed to certain equity
issuances as a part of the Used Digital Retail Division);
- Non-cash charges (such as impairment, recoveries, gains or
losses on free-standing derivatives, revaluation of contingent
consideration and revaluation of redemption liabilities);
- Charges outside the normal course of business (such as
restructuring, gains and losses on dealership divestitures and real
estate transactions); and
- Charges that are non-recurring in nature (such as provisions
for wholesale fraud and settlement income).
The Company believes adjusted EBITDA provides improved
continuity with respect to the comparison of our operating
performance over a period of time.
Normalized Adjusted EBITDA
With the onset of COVID-19 during the second quarter of 2020,
the impact of COVID-19 related government restrictions resulted in
charges that are one-time in nature, and related government
programs resulted in subsidies that are non-recurring in the
future. In addition, at the onset of the pandemic and related
government lockdowns, the Company used the opportunity to complete
a comprehensive review of all aspects of the business, in essence
re-engineering the business model where applicable. As a result of
the impacts of COVID-19 and the accompanying initial review, the
Company recognized income, subsidies, write-downs, provisions, and
non-recurring charges for impacts related to the pandemic.
Normalized adjusted EBITDA is an indicator of a company's
operating performance over a period of time and ability to incur
and service debt, normalized for charges that are non-recurring in
nature related to the pandemic such as:
- Canada Emergency Wage Subsidy
("CEWS") income, expected to recur until the Company is no longer
eligible for the subsidy;
- Canada Emergency Rent Subsidy
("CERS"), expected to recur until the Company is no longer eligible
for the subsidy;
- One-time forgiveness of Small Business Association Paycheck
Protection Program ("PPP") loans;
- One-time inventory write-downs for decreased demand for new and
used vehicle inventory;
- One-time severance charges related to the reduction in the
Company's workforce;
- One-time retention and recognition payments for key dealership
employees;
- One-time write-off of prepaid advertising leads provisions for
decreased new and used vehicles demand;
- One-time write-off of aged accounts receivable and onerous
provisions; and
- True-up of accruals and other liabilities as a result of the
COVID-19 related comprehensive review.
The Company believes normalized adjusted EBITDA provides
improved continuity with respect to the comparison of our operating
performance normalized for impacts related to the COVID-19
pandemic.
Pro Forma Adjusted EBITDA and Pro Forma Normalized Adjusted
EBITDA
The Company believes pro forma adjusted EBITDA and pro forma
normalized adjusted EBITDA provides improved understanding of the
progress of our acquisition strategy as if the acquisitions had
occurred at the beginning of the period. Pro forma adjusted EBITDA
and pro forma normalized adjusted EBITDA includes management's
estimate of the net income generated by our acquisitions prior to
interest expense (other than interest expense on floorplan
financing), income taxes, depreciation, and amortization, assuming
acquisitions in the year had occurred on the first day of the 12
month period ended December 31, prior
to any synergies, pursuant to the terms of the credit facilities.
Pro forma adjustments estimated by management were derived from
dealership financial statements. The Company's blended rate of
Canadian corporate tax of 25.4% was applied to pro forma
adjustments where applicable.
Adjusted EBITDA Margin and Adjusted EBITDA Margin on a
Pre-IFRS 16 Basis
Adjusted EBITDA margin is an indicator of a company's operating
performance specifically in relation to our revenue performance.
The Company believes adjusted EBITDA margin and adjusted EBITDA
margin on a pre-IFRS 16 basis provides improved continuity with
respect to the comparison of our operating performance with
retaining and growing profitability as our revenue and scale
increases over a period of time.
Income Statement Impacts and Adjusted EBITDA on a Pre-IFRS 16
Basis
The Company adopted IFRS 16 on January 1,
2019. On adoption of IFRS 16, the Company recognized lease
liabilities in relation to leases, which had previously been
classified as 'operating leases' under the principles of IAS 17
Leases. These liabilities were measured at the present value of the
remaining lease payments, discounted using the lessee's incremental
borrowing rate. There are also corresponding income statement
impacts to net income and other comprehensive income as identified
in Section 21. IFRS 16 Impacts for the Period of the Company's
Management's Discussion & Analysis for the year ended
December 31, 2021.
The Company believes adjusted EBITDA on a pre-IFRS 16 basis
provides improved continuity for purposes of comparing to our
historical operating performance prior to fiscal year 2019. Our
Credit Facility financial covenants are calculated and presented on
a pre-IFRS 16 basis. In addition, the net indebtedness leverage
ratio is calculated on a pre-IFRS 16 basis.
Adjusted EBITDA on a pre-IFRS 16 basis is calculated as adjusted
EBITDA less the rental expense, fair market value rent adjustment
and step lease rent adjustment eliminated from the adoption of IFRS
16 lease liabilities accounting standards
Free Cash Flow
Free cash flow is a measure used by Management to evaluate the
Company's 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
such purposes. 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 expenditure (not
including acquisitions of dealerships and dealership
facilities).
Net Indebtedness Leverage Ratio
Net indebtedness leverage ratio is a measure used by management
to evaluate the liquidity of the Company.
The Company believes presenting the net indebtedness leverage
ratio on a pre-IFRS 16 basis provides improved continuity for
purposes of comparing to our historical operating performance prior
to fiscal year 2019 and remains relevant while our Credit Facility
financial covenants continues to be calculated and presented on a
pre-IFRS 16 basis. Net indebtedness leverage ratio is calculated as
net indebtedness compared to Adjusted EBITDA pre-IFRS 16 on a TTM
basis.
We list and define "CAPITAL MANAGEMENT MEASURES" below:
Net Indebtedness
Net indebtedness is used by management to evaluate the
liquidity of the Company.
Net indebtedness is calculated as indebtedness, net of
unamortized deferred financing costs, adding back embedded
derivative asset, and less cash and cash equivalents.
NON-GAAP AND OTHER FINANCIAL MEASURES RECONCILIATIONS
Adjusted EBITDA, Normalized Adjusted EBITDA, Pro Forma
Adjusted EBITDA, and Pro Forma Normalized Adjusted EBITDA
Reconciliation
The following table illustrates adjusted EBITDA and normalized
adjusted EBITDA for the three-month periods ended December 31, over the last two years of
operations:
|
2021
|
2020
|
Period from October
1 to December 31
|
|
|
Net income for the
period
|
69,398
|
24,320
|
Add back:
|
|
|
Income tax
expense
|
24,463
|
8,030
|
Depreciation of
property and equipment
|
4,830
|
4,823
|
Interest on long-term
indebtedness
|
6,161
|
3,964
|
Depreciation of right
of use assets
|
7,465
|
6,037
|
Lease liability
interest
|
6,520
|
5,256
|
|
118,837
|
52,430
|
Add back:
|
|
|
Recoveries of
non-financial assets, net
|
(39,846)
|
(11,248)
|
Share-based
compensation (Used Digital Retail Division)
|
—
|
435
|
Loss (gain) on
redemption liabilities
|
14,116
|
(2,108)
|
Unrealized fair value
changes in derivative instruments
|
(2,853)
|
(841)
|
Amortization of loss
on terminated hedges
|
817
|
817
|
Unrealized foreign
exchange losses
|
25
|
442
|
Unrealized fair value
changes on embedded derivative
|
(24,778)
|
—
|
Gain on termination of
lease
|
(492)
|
—
|
Loss on disposal of
assets, net
|
47
|
545
|
Adjusted
EBITDA
|
65,873
|
40,472
|
Normalizing
items:
|
|
|
Add back:
|
|
|
Inventory
write-down
|
—
|
1,841
|
One-time employee
recognition payments
|
—
|
309
|
Operational incentive
payments
|
—
|
851
|
Less:
|
|
|
Canada Emergency Wage
Subsidy
|
—
|
(2,789)
|
Canada Emergency Rent
Subsidy
|
—
|
(200)
|
Normalized Adjusted
EBITDA
|
65,873
|
40,484
|
The following table illustrates adjusted EBITDA, normalized
adjusted EBITDA, pro forma adjusted EBITDA, and pro forma
normalized adjusted EBITDA for the year ended December 31 for the last two years of
operations:
|
2021
|
2020
|
Period from January
1 to December 31
|
|
|
Net income (loss) for
the period
|
167,199
|
(6,623)
|
Add back:
|
|
|
Income tax
expense
|
54,021
|
5,418
|
Depreciation of
property and equipment
|
17,272
|
17,372
|
Interest on long-term
indebtedness
|
21,900
|
16,200
|
Depreciation of right
of use assets
|
26,420
|
24,759
|
Lease liability
interest
|
23,062
|
22,189
|
|
309,874
|
79,315
|
Add back:
|
|
|
(Recoveries)
impairment of non-financial assets, net
|
(39,846)
|
24,207
|
Share-based
compensation (Used Digital Retail Division)
|
—
|
435
|
Loss (gain) on
redemption liabilities
|
14,116
|
(762)
|
Loss on extinguishment
of debt
|
1,128
|
4,002
|
Unrealized fair value
changes in derivative instruments
|
(7,873)
|
2,809
|
Amortization of loss
on terminated hedges
|
3,268
|
2,308
|
Unrealized foreign
exchange losses
|
115
|
1,153
|
Unrealized fair value
changes on embedded derivative
|
(29,306)
|
—
|
Loss on termination of
lease, net
|
427
|
—
|
Gain on disposal of
assets, net
|
(40)
|
(1,374)
|
Adjusted
EBITDA
|
251,863
|
112,093
|
Normalizing
items:
|
|
|
Add back:
|
|
|
Inventory
write-down
|
—
|
22,725
|
Severance
charges
|
—
|
8,170
|
Write-off of prepaid
advertising leads
|
—
|
2,131
|
One-time retention and
recognition payments for key dealership employees
|
—
|
1,742
|
One-time write-off of
accounts receivable and onerous provisions
|
—
|
5,633
|
Other charges
including true-up of accruals and other liabilities
|
—
|
4,686
|
One-time employee
recognition payments
|
—
|
309
|
Operational incentive
payments
|
—
|
851
|
Less:
|
|
|
Canada Emergency Wage
Subsidy
|
(4,388)
|
(35,264)
|
Canada Emergency Rent
Subsidy
|
(336)
|
(200)
|
Forgiveness of PPP
loans
|
(6,728)
|
—
|
Normalized Adjusted
EBITDA
|
240,411
|
122,876
|
Pro forma items had
the acquisitions occurred on January 1,
20211:
|
|
|
Net income (loss) for
the period
|
7,634
|
—
|
Add back:
|
|
|
Income tax expense
(recovery)
|
2,464
|
—
|
Depreciation of
property and equipment
|
1,765
|
—
|
Interest on long-term
indebtedness
|
5,698
|
—
|
Depreciation of right
of use assets
|
3,224
|
—
|
Lease liability
interest
|
5,235
|
—
|
Pro Forma Adjusted
EBITDA
|
277,883
|
112,093
|
Pro Forma Normalized
Adjusted EBITDA
|
266,431
|
122,876
|
See the Company's Management's Discussion and Analysis for
the year ended December 31, 2021 for
complete footnote disclosures.
Segmented Adjusted EBITDA and Segmented Normalized
Adjusted EBITDA Reconciliation
The following table illustrates segmented adjusted EBITDA and
normalized adjusted EBITDA for the three-month period ended
December 31, over the last two years
of operations:
|
Three Months Ended
December 31, 2021
|
|
Three Months Ended
December 31, 2020
|
|
Canada
|
U.S.
|
Total
|
|
Canada
|
U.S.
|
Total
|
Period from October
1 to December 31
|
|
|
|
|
|
|
|
Net income (loss) for
the period
|
62,253
|
7,145
|
69,398
|
|
25,355
|
(1,035)
|
24,320
|
Add back:
|
|
|
|
|
|
|
|
Income tax expense
(recovery)
|
24,144
|
319
|
24,463
|
|
8,155
|
(125)
|
8,030
|
Depreciation of
property and equipment
|
4,467
|
363
|
4,830
|
|
4,494
|
329
|
4,823
|
Interest on long-term
indebtedness
|
4,818
|
1,343
|
6,161
|
|
3,739
|
225
|
3,964
|
Depreciation of right
of use assets
|
6,796
|
669
|
7,465
|
|
5,387
|
650
|
6,037
|
Lease liability
interest
|
5,630
|
890
|
6,520
|
|
4,303
|
953
|
5,256
|
|
108,108
|
10,729
|
118,837
|
|
51,433
|
997
|
52,430
|
Add back:
|
|
|
|
|
|
|
|
(Recoveries) of
non-financial assets, net
|
(39,846)
|
—
|
(39,846)
|
|
(11,248)
|
—
|
(11,248)
|
Share-based
compensation (Used Digital Retail Division)
|
—
|
—
|
—
|
|
435
|
—
|
435
|
Loss (gain) on
redemption liabilities
|
14,116
|
—
|
14,116
|
|
(2,108)
|
—
|
(2,108)
|
Unrealized fair value
changes in derivative instruments
|
(2,853)
|
—
|
(2,853)
|
|
(841)
|
—
|
(841)
|
Amortization of loss
on terminated hedges
|
817
|
—
|
817
|
|
764
|
53
|
817
|
Unrealized foreign
exchange losses
|
25
|
—
|
25
|
|
442
|
—
|
442
|
Unrealized fair value
changes on embedded derivative
|
(24,778)
|
—
|
(24,778)
|
|
—
|
—
|
—
|
Gain on termination of
lease
|
(492)
|
—
|
(492)
|
|
—
|
—
|
—
|
Loss on disposal of
assets, net
|
47
|
—
|
47
|
|
352
|
193
|
545
|
Adjusted
EBITDA
|
55,144
|
10,729
|
65,873
|
|
39,229
|
1,243
|
40,472
|
Normalizing
Items:
|
|
|
|
|
|
|
|
Add back:
|
|
|
|
|
|
|
|
Inventory
write-down
|
—
|
—
|
—
|
|
1,841
|
—
|
1,841
|
One-time employee
recognition payments
|
—
|
—
|
—
|
|
309
|
—
|
309
|
Operational incentive
payments
|
—
|
—
|
—
|
|
851
|
—
|
851
|
Less:
|
|
|
|
|
|
|
|
Canada Emergency Wage
Subsidy
|
—
|
—
|
—
|
|
(2,789)
|
—
|
(2,789)
|
Canada Emergency Rent
Subsidy
|
—
|
—
|
—
|
|
(200)
|
—
|
(200)
|
Normalized Adjusted
EBITDA
|
55,144
|
10,729
|
65,873
|
|
39,241
|
1,243
|
40,484
|
The following table illustrates segmented adjusted EBITDA and
normalized adjusted EBITDA for the year ended December 31 for the last two years of
operations:
|
Year Ended
December 31, 2021
|
|
Year Ended
December 31, 2020
|
|
Canada
|
U.S.
|
Total
|
|
Canada
|
U.S.
|
Total
|
Period from January
1 to December 31
|
|
|
|
|
|
|
|
Net income (loss) for
the period
|
150,104
|
17,095
|
167,199
|
|
13,343
|
(19,966)
|
(6,623)
|
Add back:
|
|
|
|
|
|
|
|
Income tax expense
(recovery)
|
53,702
|
319
|
54,021
|
|
5,543
|
(125)
|
5,418
|
Depreciation of
property and equipment
|
15,995
|
1,277
|
17,272
|
|
16,151
|
1,221
|
17,372
|
Interest on long-term
indebtedness
|
15,631
|
6,269
|
21,900
|
|
13,350
|
2,850
|
16,200
|
Depreciation of right
of use assets
|
23,759
|
2,661
|
26,420
|
|
22,405
|
2,354
|
24,759
|
Lease liability
interest
|
19,503
|
3,559
|
23,062
|
|
18,481
|
3,708
|
22,189
|
|
278,694
|
31,180
|
309,874
|
|
89,273
|
(9,958)
|
79,315
|
Add back:
|
|
|
|
|
|
|
|
(Recoveries)
impairment of non-financial assets, net
|
(39,846)
|
—
|
(39,846)
|
|
15,312
|
8,895
|
24,207
|
Share-based
compensation (Used Digital Retail Division)
|
—
|
—
|
—
|
|
435
|
—
|
435
|
Loss (gain) on
redemption liabilities
|
14,116
|
—
|
14,116
|
|
(762)
|
—
|
(762)
|
Loss on extinguishment
of debt
|
1,128
|
—
|
1,128
|
|
4,002
|
—
|
4,002
|
Unrealized fair value
changes in derivative instruments
|
(7,873)
|
—
|
(7,873)
|
|
2,809
|
—
|
2,809
|
Amortization of loss
on terminated hedges
|
3,268
|
—
|
3,268
|
|
1,993
|
315
|
2,308
|
Unrealized foreign
exchange losses
|
115
|
—
|
115
|
|
1,153
|
—
|
1,153
|
Unrealized fair value
changes on embedded derivative
|
(29,306)
|
—
|
(29,306)
|
|
—
|
—
|
—
|
Loss on termination of
lease, net
|
427
|
—
|
427
|
|
—
|
—
|
—
|
(Gain) loss on
disposal of assets, net
|
(40)
|
—
|
(40)
|
|
(1,567)
|
193
|
(1,374)
|
Adjusted
EBITDA
|
220,683
|
31,180
|
251,863
|
|
112,648
|
(555)
|
112,093
|
Normalizing
Items:
|
|
|
|
|
|
|
|
Add back:
|
|
|
|
|
|
|
|
Inventory
write-down
|
—
|
—
|
—
|
|
19,735
|
2,990
|
22,725
|
Severance
charges
|
—
|
—
|
—
|
|
8,170
|
—
|
8,170
|
Write-off of prepaid
advertising leads
|
—
|
—
|
—
|
|
2,131
|
—
|
2,131
|
One-time retention and
recognition payments for key dealership employees
|
—
|
—
|
—
|
|
1,742
|
—
|
1,742
|
One-time write-off of
accounts receivable and onerous provisions
|
—
|
—
|
—
|
|
5,633
|
—
|
5,633
|
Other charges
including true-up of accruals and other liabilities
|
—
|
—
|
—
|
|
3,240
|
1,446
|
4,686
|
One-time employee
recognition payments
|
—
|
—
|
—
|
|
309
|
—
|
309
|
Operational incentive
payments
|
—
|
—
|
—
|
|
851
|
—
|
851
|
Less:
|
|
|
|
|
|
|
|
Canada Emergency Wage
Subsidy
|
(4,388)
|
—
|
(4,388)
|
|
(35,264)
|
—
|
(35,264)
|
Canada Emergency Rent
Subsidy
|
(336)
|
—
|
(336)
|
|
(200)
|
—
|
(200)
|
Forgiveness of PPP
loans
|
—
|
(6,728)
|
(6,728)
|
|
—
|
—
|
—
|
Normalized Adjusted
EBITDA
|
215,959
|
24,452
|
240,411
|
|
118,995
|
3,881
|
122,876
|
Quarter-to-Date Adjusted EBITDA Margin
The following table illustrates adjusted EBITDA margin for the
three-month periods ended December
31, over the last two years of operations:
|
2021
|
2020
|
Period from October
1 to December 31
|
|
|
Adjusted
EBITDA
|
65,873
|
40,472
|
Revenue
|
1,195,782
|
876,121
|
Adjusted EBITDA
Margin
|
5.5%
|
4.6%
|
Quarter-to-Date Adjusted EBITDA Margin on a Pre-IFRS 16
Basis
The following table illustrates adjusted EBITDA margin on a
pre-IFRS 16 basis for the three-month periods ended December 31, over the last two years of
operations:
|
2021
|
2020
|
Period from October
1 to December 31
|
|
|
Adjusted EBITDA on a
pre-IFRS 16 basis
|
53,464
|
30,559
|
Revenue
|
1,195,782
|
876,121
|
Adjusted EBITDA
Margin on a Pre-IFRS 16 basis
|
4.5%
|
3.5%
|
Quarter-to-Date Adjusted EBITDA on a Pre-IFRS 16 Basis
Reconciliation
The following table illustrates segmented adjusted EBITDA on a
pre-IFRS 16 basis, for the three-month periods ended December 31, over the last two years of
operations:
|
Three Months Ended
December 31, 2021
|
|
Three Months Ended
December 31, 2020
|
|
Canada
|
U.S.
|
Total
|
|
Canada
|
U.S.
|
Total
|
Adjusted
EBITDA
|
55,144
|
10,729
|
65,873
|
|
39,229
|
1,243
|
40,472
|
Rental expense
1
|
(11,040)
|
(2,149)
|
(13,189)
|
|
(8,522)
|
(2,210)
|
(10,732)
|
FMV rent
adjustment 1
|
—
|
1,044
|
1,044
|
|
—
|
1,103
|
1,103
|
Step lease
adjustment 1
|
(252)
|
(12)
|
(264)
|
|
(225)
|
(59)
|
(284)
|
Adjusted EBITDA on
a pre-IFRS 16 basis
|
43,852
|
9,612
|
53,464
|
|
30,482
|
77
|
30,559
|
See the Company's
Management's Discussion and Analysis for the quarter and year ended
December 31, 2021 for complete footnote disclosures.
|
Year-to-Date Adjusted EBITDA on a Pre-IFRS 16 Basis
Reconciliation
The following table illustrates segmented adjusted EBITDA on a
pre-IFRS 16 basis, for the year ended December 31 for the last two years of
operations:
|
Year Ended
December 31, 2021
|
|
Year Ended
December 31, 2020
|
|
Canada
|
U.S.
|
Total
|
|
Canada
|
U.S.
|
Total
|
Adjusted
EBITDA
|
220,683
|
31,180
|
251,863
|
|
112,648
|
(555)
|
112,093
|
Rental expense
1
|
(40,230)
|
(8,597)
|
(48,827)
|
|
(36,067)
|
(8,263)
|
(44,330)
|
FMV rent
adjustment 1
|
—
|
4,181
|
4,181
|
|
—
|
4,433
|
4,433
|
Step lease
adjustment 1
|
(722)
|
89
|
(633)
|
|
(1,013)
|
(244)
|
(1,257)
|
Adjusted EBITDA on
a pre-IFRS 16 basis
|
179,731
|
26,853
|
206,584
|
|
75,568
|
(4,629)
|
70,939
|
See the Company's
Management's Discussion and Analysis for the quarter and year ended
December 31, 2021 for complete footnote disclosures.
|
Free Cash Flow
The following table illustrates free cash flow for the last
eight consecutive quarters:
|
Q4
2021
|
Q3
2021
|
Q2
2021
|
Q1
2021
|
Q4
2020
|
Q3
2020
|
Q2
2020
|
Q1
2020
|
Cash provided by
operating activities
|
10,153
|
13,721
|
68,604
|
20,506
|
20,447
|
54,366
|
54,114
|
7,350
|
Deduct:
|
|
|
|
|
|
|
|
|
Purchase of non-growth
property and equipment
|
(2,550)
|
(1,349)
|
(801)
|
(1,115)
|
(1,207)
|
(922)
|
(1,557)
|
(1,195)
|
Free cash
flow
|
7,603
|
12,372
|
67,803
|
19,391
|
19,240
|
53,444
|
52,557
|
6,155
|
Free cash flow -
TTM
|
107,169
|
118,806
|
159,878
|
144,632
|
131,396
|
177,981
|
179,325
|
104,987
|
Net Indebtedness and Net Indebtedness Leverage Ratio
Reconciliation
The following table illustrates the Company's net indebtedness
and net indebtedness leverage ratio as at December 31, 2021 and December 31, 2020:
|
December 31,
2021
$
|
December 31,
2020
$
|
Syndicated Credit
Facility - revolving credit
|
63,842
|
68,827
|
Senior unsecured notes
(including embedded derivative asset)
|
221,965
|
120,716
|
Mortgage and other
debt
|
101
|
7,688
|
Indebtedness as
reported
|
285,908
|
197,231
|
Add back:
|
|
|
Embedded derivative
asset
|
29,306
|
—
|
Indebtedness for net
indebtedness purpose
|
315,214
|
197,231
|
Cash and cash
equivalents
|
(102,480)
|
(107,704)
|
Net
indebtedness
|
212,734
|
89,527
|
Adjusted EBITDA -
pre-IFRS 16 - trailing twelve months
|
206,584
|
70,939
|
Net indebtedness
leverage ratio
|
1.0x
|
1.3x
|
Conference Call
A conference call to discuss the results for the three months
ended December 31, 2021 will be held on March 3, 2022 at
9:00am Mountain (11:00am Eastern). To participate in the
conference call, please dial 1.888.664.6392 approximately 10
minutes prior to the call.
This conference call will also be webcast live over the internet
and can be accessed by all interested parties at the following URL:
https://investors.autocan.ca/event/2021-q4-conference-call/
About AutoCanada
AutoCanada is a leading North American multi-location automobile
dealership group currently operating 78 franchised dealerships,
comprised of 28 brands, in eight provinces in Canada as well as a group in Illinois, USA. AutoCanada currently sells
Chrysler, Dodge, Jeep, Ram, FIAT, Alfa Romeo, Chevrolet, GMC,
Buick, Cadillac, Ford, Infiniti,
Nissan, Hyundai, Subaru, Audi, Volkswagen, Kia, Mazda,
Mercedes-Benz, BMW, MINI, Volvo, Toyota, Lincoln, Honda, Acura and Porsche branded
vehicles. In 2021, our dealerships sold approximately 86,000
vehicles and processed over 800,000 service and collision repair
orders in our 1,303 service bays generating revenue in excess of
$4 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 this press release 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 press release.
The Company's Annual Information Form and other documents filed
with securities regulatory authorities (accessible through the
SEDAR website at 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.