EDMONTON, AB, July 25, 2022 /CNW/ - AutoCanada Inc. ("AutoCanada" or the "Company") (TSX: ACQ), a leading multi-location North American automobile dealership group, is pleased to announce the following preliminary unaudited highlights of what it expects to report in respect of its second quarter 2022 results. The preliminary results announced are consistent with management's expectations for the fiscal quarter and are being disclosed at this time because the Company's scheduled quarterly earnings release date of August 10, 2022 (see below for further details) is after the expiry of its substantial issuer bid. The Company's substantial issuer bid for up to $100 million of its common shares commenced on June 30, 2022 and is scheduled to expire on August 4, 2022 unless extended or withdrawn.

For the three month period ended June 30, 2022 ("Q2 2022"), on a preliminary unaudited basis (as discussed in further detail below), management expects to report the following highlights:

• Q2 2022 revenue of approximately $1.7 billion, representing growth of approximately 32% over the same period in 2021 ("Q2 2021")
• Net income of approximately $39.1 million versus $37.7 million in the prior year, which includes $10.0 million of incremental inventory writedowns in Q2 2022
• Adjusted EBITDA¹ of approximately $75.6 million, an increase of $5.1 million compared to $70.5 million in 2021
• Adjusted EBITDA¹ on a trailing twelve month basis was $271.9 million
• Same store total retail unit² sales growth of approximately 0.6% as compared to 40.5% in the prior year
• An increase in AutoCanada's same store used-to-new retail units ratio² to approximately 1.59 in Q2 2022 from 1.37 in Q2 2021
• Indebtedness of $374.8 million at the end of Q2 2022 compares to $285.9 million at the end of Q4 2021
• An increase in net indebtedness¹ by approximately $45.1 million in the quarter, from $248.8 million as at March 31, 2022, to approximately $293.8 million as at June 30, 2022
• The increase includes debt incurred in connection with the acquisition of Porsche of London, Audi Windsor, Burwell Auto Body, and the repurchase and cancellation of $25.4 million of shares under the Company's normal course issuer bid
• The Company completed its normal course issuer bid on May 19, 2022, purchasing and cancelling 1,730,321 shares for an aggregate purchase price of $56.6 million

Second quarter results include an incremental charge of $10.0 million for the writedown of used vehicle inventory in our Canadian Operations to net realizable value. Management determined that the writedown was prudent to calibrate our cost of used vehicle inventory for the changing macro environment. Management will continue to assess the net realizable value of our inventory in the quarters ahead.

The Company has not yet completed its financial closing process for Q2 2022, and the selected unaudited results provided above are preliminary estimates. Actual results may differ materially from these estimates due to the completion of the Company's financial closing procedures, final adjustments, review by the Company's auditors and other developments that may arise between now and the time the financial results are finalized. These estimates are not a comprehensive statement of the Company's financial results for Q2 2022 or for any other period and should not be viewed as a substitute for full financial statements prepared in accordance with International Financial Reporting Standards, and these estimates are not necessarily indicative of the results to be achieved for Q2 2022 or for any other period.

The Company is issuing preliminary results in order to enable it to disclose such information in connection with its substantial issuer bid, and the Company does not intend to provide preliminary results in the future. The preliminary results provided in this press release constitute forward-looking statements within the meaning of applicable securities laws, are based on a number of assumptions and are subject to a number of risks and uncertainties. Please see the section below entitled "Forward-Looking Statements". The preliminary results have been prepared by, and are the responsibility of, management of the Company. The Company's independent registered public accounting firm, PricewaterhouseCoopers LLP, has not reviewed the preliminary results. Neither PricewaterhouseCoopers LLP nor any other independent accountants express an opinion or any other form of assurance with respect to the preliminary results.

We have established a significant acquisition pipeline, with dealerships and collision centres representing in excess of $175 million in annual revenue currently being evaluated. We are at varying stages of the acquisition process with these targets, ranging from signed letter of intents to signed purchase agreements, with the potential deals remaining subject to due diligence, OEM approvals, and other standard closing conditions.

The Company will release its financial results for the quarter ended June 30, 2022 on Wednesday, August 10, 2022 after the close of markets. A conference call and webcast to discuss the results will be held on Thursday, August 11, 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. For those unable to participate on the live call, a replay will be made available until Thursday, August 18, 2022 by dialing 1.888.390.0541 (Canada and USA), passcode 467186. The public is invited to listen to the live conference call or the replay.

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/2022-q2-conference-call/ 

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 and net indebtedness are not earnings measures recognized by GAAP and do not have standardized meanings prescribed by GAAP. Investors are cautioned that these 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 and other financial measures may differ from the methods used by other issuers. Therefore, these measures may not be comparable to similar measures presented by other issuers. These measures are identified and described under section "15. NON-GAAP AND OTHER FINANCIAL MEASURES" of the Q1 2022 MD&A hereby incorporated by reference (accessible through the SEDAR website at www.sedar.com).

The following table illustrates Adjusted EBITDA for the three-month period ended June 30, over the last two years of operations:

The following table illustrates the Company's net indebtedness as at June 30, 2022 and December 31, 2021:

AutoCanada is a leading North American multi-location automobile dealership group currently operating 80 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, Acura, Honda and Porsche branded vehicles. Additionally, the Company's Canadian Operations segment currently operates 2 used vehicle dealerships supporting the Used Digital Retail Division, the RightRide division operates 9 locations, and 5 stand-alone collision centres (within our group of 19 collision centres). 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.

Certain statements contained in this press release 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 of 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. In particular, this press release contains forward-looking statements with respect to, among other things,  AutoCanada's preliminary operating and financial results for Q2 2022 and the expected impact of acquisitions completed in fiscal 2022.

The forward-looking statements included in this press release are not guarantees of future performance and should not be unduly relied upon. Readers are cautioned that forward-looking statements are based on current expectations, estimates and projections that, by their nature, involve a number of known and unknown risks and uncertainties, which could cause actual results to differ materially from those anticipated and described in the forward-looking statements. These known and unknown risks and uncertainties include, but are not limited to: potential changes in the regulatory and legislative environment; political uncertainty and instability in North America and internationally; volatility in interest and tax rates; operating risks inherent in the automotive retail industry; and changes in general economic conditions including the capital and credit markets.

Forward-looking statements 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. In particular, in presenting its forward-looking statements, AutoCanada has made assumptions respecting, among other things: the relative stability of general North American economic conditions; and regulatory and legislative conditions. Therefore, any such forward-looking statements are qualified in their entirety by reference to the factors discussed throughout this press release.

AutoCanada cautions that the foregoing list of assumptions, risks and uncertainties is not exhaustive.

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

SOURCE AutoCanada Inc.