EDMONTON, March 16, 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 year ended December 31, 2016 and the three-month period ended December 31, 2016.

2016 Financial Summary

• Revenue from existing and new dealerships remained flat at $2,891.6 million in 2016 from $2,903.8 million in 2015.
  
  
• Gross profit from existing and new dealerships remained flat at $486.1 million in 2016 from $487.7 million in 2015.
  
  
• The Company generated net earnings attributable to AutoCanada shareholders of $2.6 million (after impairment expense of $54.1 million) and basic earnings per share of $0.09 versus basic earnings per share of $0.93 in 2015.
  
  
• Adjusted net earnings attributable to AutoCanada shareholders decreased by 1.0% to $39.9 million in 2016 from $40.3 million in 2015 equivalent to basic adjusted net earnings per share of $1.45 versus $1.64 in 2015.
  
  
• EBITDA attributable to AutoCanada shareholders increased by 5.2% to $94.5 million in 2016 compared to $89.8 million in 2015.
  
  
• Same store revenue decreased by 5.6% in 2016 compared to 2015. Same store gross profit decreased by 5.4% in 2016 compared to 2015.
  
  
• Free cash flow increased to $96.3 million in 2016 or $3.53 per share as compared to $38.7 million or $1.57 per share in 2015.
  
  
• Adjusted free cash flow increased to $68.6 million in 2016 or $2.51 per share as compared to $38.8 million or $1.59 per share in 2015.

2016 Q4 Financial Summary:

• Revenue from existing and new dealerships decreased by 6.4%, to $629.3 million in the fourth quarter of 2016 from $672.3 million in the same quarter in 2015.
  
  
• Gross profit from existing and new dealerships decreased by 5.8% to $116.8 million in the fourth quarter of 2016 from $123.9 million in the same quarter in 2015.
  
  
• Adjusted EBITDA attributable to AutoCanada shareholders decreased by 26.9% to $19.0 million in the fourth quarter of 2016 from $26.0 million in the same quarter in 2015.
  
  
• EBITDA attributable to AutoCanada shareholders increased by 8.2% to $25.3 million in the fourth quarter of 2016 from $23.4 million in the same quarter in 2015.
  
  
• The Company generated net earnings attributable to AutoCanada shareholders of $13.8 million and basic earnings per share of $0.50 versus a $7.4 million loss (after impairment expense of $18.1 million) and basic earnings per share of ($0.29) in the fourth quarter of 2015.
  
  
• The Company generated adjusted net earnings attributable to AutoCanada shareholders of $7.5 million compared to $8.6 million in the same quarter in 2015. Basic adjusted net earnings per share of $0.28 versus $0.34 in the fourth quarter of 2015.
  
  
• Same store revenue decreased by 10.0% in the fourth quarter of 2016 compared to the same quarter in 2015. Same store gross profit decreased by 5.8% in the fourth quarter of 2016 compared to the same quarter in 2015, while gross profit percentage increased to 18.9% versus 18.0% in the same period last year.
  
  
• Free cash flow increased to $23.4 million in the fourth quarter of 2016 or $0.86 per share as compared to $9.1 million or $0.36 per share in the same quarter in 2015.
  
  
• Adjusted free cash flow increased to $13.1 million in the fourth quarter of 2016 or $0.48 per share as compared to $8.1 million or $0.32 per share in the same quarter in 2015.

"Fiscal 2016 capped off the second consecutive year where our core markets faced deteriorating business conditions. However, wherever there are challenges there are also opportunities, and I believe AutoCanada is well-positioned to execute on its strategy and create value for shareholders," said Steven Landry Chief Executive Officer. "We are responding to economic conditions in our key markets by focusing on market share, operating expenses, accretive acquisitions, and delivering consistent performance across all of our dealerships."

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 2016:

On February 21, 2017, the Board declared a quarterly eligible dividend of $0.10 per common share on AutoCanada's outstanding Class A shares, payable on March 15, 2017 to shareholders of record at the close of business on February 28, 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 predicted by independent forecasters to be down 1% - 2%. In Canada, factors contributing to new vehicle sales will vary widely by province and brands.

While new automobile sales in our core Alberta market continued to decline in 2016, AutoCanada is cautiously optimistic that renewed activity in the energy sector will slowly begin to translate favourably into improvements in year‑over‑year sales figures in the latter half of the year or early 2018. We will remain focused on delivering better financial performance irrespective of the impact of oil prices.

Of the 17 dealerships that became same store in 2016, 11 of these are located in Alberta. As a result, we anticipate same‑store sales results will continue to be impacted in 2017 by the depressed Alberta economy. 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 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.

AutoCanada plans to spend approximately $30.9 million in 2017 on dealership relocations and undertaking expansions. We are under construction on the relocation of Audi Winnipeg, which we anticipate will lead to increased customer traffic and sales. We also plan to begin construction on two new open point locations in Calgary and Ottawa, Ontario.

AutoCanada's five‑year capital spending outlook is approximately $145.3 million. This level of spending, along with the Company's current dividend commitments, are expected to be balanced with internally generated cash flow.

SELECTED ANNUAL FINANCIAL INFORMATION
The following table shows the results of the Company for the years ended December 31, 2016, December 31, 2015 and December 31, 2014. 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, 2016 on a same store basis by revenue source and compares these results to the same period in 2015.

The following tables summarizes the results for the three-month period ended December 31, 2016 on a same store basis by revenue source and compares these results to the same period in 2015.

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, 2016, 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, 2016 will be held on March 17, 2017 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=1357897&s=1&k=DF1EACF46C59718BE91B332467699E7B

About AutoCanada

AutoCanada is one of Canada's largest multi-location automobile dealership groups, currently operating 56 franchised dealerships, comprised of 64 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, BMW and MINI branded vehicles.  In 2016, our dealerships sold approximately 60,000 vehicles and processed approximately 864,000 service and collision repair orders in our 928 service bays.

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 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.