EDMONTON, March 18, 2016 /CNW/ - AutoCanada Inc. (the "Company" or "AutoCanada") (TSX: ACQ) today announced financial results for the year ended December 31, 2015 and the three month period ended December 31, 2015.

2015 Annual Highlights

• Revenue from existing and new dealerships increased by 31.1%, or $689.0 million, to $2,903.8 million in 2015 from $2,214.8 million in 2014.
  
  
• Gross profit from existing and new dealerships increased by 30.7%, or $114.6 million, to $487.7 million in 2015 from $373.1 million in 2014.
  
  
• Adjusted EBITDA attributable to AutoCanada shareholders increased by 5.3%, or $4.7 million, to $93.9 million in 2015 from $89.2 million in 2014.
  
  
• EBITDA attributable to AutoCanada shareholders remained flat at $89.8 million in 2015 compared to $89.4 million in 2014.
  
  
• The Company generated net earnings attributable to AutoCanada shareholders of $22.8 million (after impairment expense of $18.1 million) and basic earnings per share of $0.93 versus basic earnings per share of $2.31 in 2014. Pre-tax earnings attributable to AutoCanada shareholders decreased by 44.5%, or $31.3 million, to $39.0 million in 2015 as compared to $70.3 million in 2014.
  
  
• The Company generated adjusted net earnings attributable to AutoCanada shareholders of $40.2 million from $51.6 million in 2014. Basic adjusted net earnings per share of $1.64 versus $2.24 in 2014. 
  
  
• Same store revenue decreased by 5.9% in 2015, compared to 2014. Same store gross profit decreased by 11.7% in 2015, compared to 2014.
  
  
• Free cash flow decreased to $38.7 million in 2015 or $1.57 per share as compared to $63.7 million or $2.70 per share in 2014.
  
  
• Adjusted free cash flow decreased to $38.8 million in 2015 or $1.59 per share as compared to $62.1 million or $2.67 per share in 2014.
  
  
• Same store new vehicle retail revenue decreased by 14.2%, or $119.7 million, to $722.0 million in 2015 from $841.7 million in 2014.
  
  
• Same store used vehicle retail revenue increased by 10.4%, or $27.5 million, to $292.3 million in 2015 from $264.8 million in 2014.
  
  
• Same store parts, service and collision repair revenue increased by 2.8%, or $4.9 million, to $177.3 million in 2015 from $172.4 million in 2014.

2015 Fourth Quarter Highlights

• Revenue from existing and new dealerships increased by 2.6%, or $17.0 million, to $672.3 million in the fourth quarter of 2015 from $655.3 million in the same quarter in 2014.
  
  
• Gross profit from existing and new dealerships increased by 8.8%, or $10.0 million, to $123.9 million in the fourth quarter of 2015 from $113.9 million in the same quarter in 2014.
  
  
• Adjusted EBITDA attributable to AutoCanada shareholders increased by 7.0%, or $1.7 million, to $25.9 million in the fourth quarter of 2015 from $24.2 million in the same quarter in 2014.
  
  
• EBITDA attributable to AutoCanada shareholders decreased by 4.9%, or $1.2 million, to $23.4 million in the fourth quarter of 2015 from $24.6 million in the same quarter in 2014.
  
  
• The Company generated net loss attributable to AutoCanada shareholders of $7.4 million (after impairment expense of $18.1 million) and basic earnings per share of ($0.29) versus basic earnings per share of $0.60 in the fourth quarter of 2014. Pre-tax (loss) earnings attributable to AutoCanada shareholders decreased by 120.3%, or $23.1 million, to ($3.9) million in the fourth quarter of 2015 as compared to $19.2 million in the same period in 2014.
  
  
• The Company generated adjusted net earnings attributable to AutoCanada shareholders of $8.5 million compared to $12.6 million in the same quarter in 2014. Basic adjusted net earnings per share of $0.34 versus $0.52 in the fourth quarter of 2014. 
  
  
• Same store revenue decreased by 12.1% in the fourth quarter of 2015, compared to the same quarter in 2014. Same store gross profit decreased by 14.3% in the fourth quarter of 2015, compared to the same quarter in 2014.
  
  
• Free cash flow decreased to $9.1 million in the fourth quarter of 2015 or $0.36 per share as compared to $39.8 million or $1.63 per share in the same quarter in 2014.
  
  
• Adjusted free cash flow decreased to $8.1 million in the fourth quarter of 2015 or $0.32 per share as compared to $17.1 million or $0.70 per share in the same quarter in 2014.
  
  
• Same store new vehicle retail revenue decreased by 21.0%, or $39.2 million, to $147.4 million in the fourth quarter of 2015 from $186.6 million in the same quarter in 2014.
  
  
• Same store used vehicle retail revenue increased by 16.5%, or $10.2 million, to $71.9 million in the fourth quarter of 2015 from $61.7 million in the same quarter in 2014.
  
  
• Same store parts, service and collision repair revenue increased by 2.6%, or $1.2 million, to $47.2 million in the fourth quarter of 2015 from $46.0 million in the same quarter in 2014.

"As I consider and reflect on the past year, it is abundantly obvious that fiscal 2015 was a year of challenges as well as opportunities. Almost half of our dealerships are located in Alberta and have been significantly impacted by a decline in consumer confidence which directly impacted consumer willingness to buy a new vehicle," stated Tom Orysiuk, President & Chief Executive Officer. "We are continuing to closely monitor the macroeconomic environment in our key markets, and specifically Alberta, and present indications suggests that fiscal 2016 will be more challenging than last year. The increase in unemployment levels and erosion of consumer confidence will likely continue throughout the year. To ensure that we have the flexibility to operate our businesses and the ability to take advantage of potential opportunities, we have embarked on a number of initiatives including the reduction of capital expenditures in fiscal 2016 by $39 million dollars compared to what we reported in November 2015, as well as a cost reduction plan which is intended to result in $15 million in annualized savings."

"Throughout fiscal 2015 all except two of our dealerships were profitable though in the case of our Western Canadian dealerships some were at significantly reduced levels as compared to previous years. We recently disposed of Newmarket Nissan Infiniti at a gain, despite not being profitable in 2015. This location was marginally profitable since its acquisition," stated Chris Burrows, Chief Financial Officer. "We will proceed throughout 2016 with prudent and pragmatic management that maintains a strong and conservatively managed balance sheet, while meeting all of our capital requirements and providing the necessary capital to take advantage of buying opportunities."

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.

The following table summarizes the dividends declared by the Company in 2015:

On February 19, 2016, the Board declared a quarterly eligible dividend of $0.25 per common share on AutoCanada's outstanding Class A shares, payable on March 15, 2016 to shareholders of record at the close of business on February 29, 2016.

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 Canadian economy remains flat overall, with continued downward pressure on the Alberta economy, mitigated by growth in British Columbia and Ontario. Economic uncertainty is expected to continue to define 2016. Canadian unemployment has increased to 7.3%, with unemployment at 7.9% in Alberta and 5.9% in Saskatchewan. With increased unemployment, our customers in Alberta and Saskatchewan are experiencing greater challenges in obtaining consumer retail financing. Management believes that increased unemployment and continued crude oil price volatility has negatively impacted consumer confidence in Alberta and Saskatchewan and continues to challenge the auto retail sector.

To mitigate these impacts, Management has set a five point strategy:

First, the Company continues to seek regional diversity to acquisitions when possible. Management believes the Company remains well positioned to continue to patiently seek out and acquire quality acquisitions at reasonable multiples which will provide sustainable, long term shareholder value.

Second, the Company has directed resources to increase integration efforts for the dealerships recently acquired, as well as actively monitoring the dealerships acquired in the prior year to ensure integration has been effective. Due to the increase of acquisition activity over the past two years, integration of individual dealerships has been a main focus. Implementation of policies, procedures, and best practices are the key to successful integration and Management believes these are main drivers in delivering long term shareholder value.

Third, the Company continues to manage the balance sheet. In 2015, the Company successfully negotiated an increase to its revolving credit facility by $50 million. As part of this process, the Company had renegotiated its covenants for this facility, which, together with the Company's free cash flow from operations, provide the necessary flexibility to meet all capital requirements, and provide the base to continue to pursue attractive acquisitions at reasonable multiples. The Company also used the proceeds from the equity offering for repayment of debt which strengthened the balance sheet by improving leverage ratios.

Fourth, to expedite the roll-out of certain marketing and sales process technologies to our dealerships to maximize all sales opportunities in a more challenging economic climate.

Fifth, to review all costs within the group and reduce or eliminate where possible. We are working with our dealer partners on a cost saving initiative target of $15 million in annualized operating cost reduction across the group. This goal has been communicated to the group as well as Head Office with expected timeline for meeting set targets throughout 2016, expected to be fully realized in 2017.

In regard to future growth, Management is pleased with the quality of potential acquisitions currently in the pipeline and expects to acquire additional dealerships in 2016.

SELECTED ANNUAL FINANCIAL INFORMATION
The following table shows the results of the Company for the years ended December 31, 2015, December 31, 2014 and December 31, 2013. The results of operations for these years are not necessarily indicative of the results of operations to be expected in any given comparable period.

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.

The following tables summarizes the results for the year ended December 31, 2015 on a same store basis by revenue source and compares these results to the same period in 2014.

The following tables summarizes the results for the three month period ended December 31, 2015 on a same store basis by revenue source and compares these results to the same period in 2014.

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, 2015, 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 year ended December 31, 2015 will be held on March 18, 2016 at 11:00am Eastern time (9:00am Mountain time). To participate in the conference call, please dial 1.888.231.8191 approximately 10 minutes prior to the call. A live and archived audio webcast of the conference call will also be available at the following:

http://event.on24.com/r.htm?e=1138776&s=1&k=5670927D507BA6F8F63D120F3127D98C

About AutoCanada

AutoCanada is one of Canada's largest multi‑location automobile dealership groups, currently operating 53 dealerships, comprised of 60 franchises, (see "GROWTH, ACQUISITIONS, RELOCATIONS AND REAL ESTATE") in 8 provinces and has over 3,700 employees. AutoCanada currently sells Chrysler, Dodge, Jeep, Ram, FIAT, Chevrolet, GMC, Buick, Cadillac, Infiniti, Nissan, Hyundai, Subaru, Mitsubishi, Audi, Volkswagen, Kia, BMW and MINI branded vehicles. In 2014, our dealerships sold approximately 57,000 vehicles and processed approximately 786,000 service and collision repair orders in our 822 service bays.

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

Forward Looking Statements

Certain statements contained in 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.