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Last updated on April 16, 2014 at 17:34 EDT

AutoCanada Inc. announces record fourth quarter and record annual financial results for the period ended December 31, 2012:

March 26, 2013

A conference call to discuss the results for the year ended December 31,
2012 will be held on March 27, 2013 at 11:00 a.m. Eastern time (9:00
a.m. Mountain time). To participate in the conference call, please dial
1-888-231-8191 or (647) 427-7450 approximately 10 minutes prior to the
call. A live and archived audio webcast of the conference call will
also be available on the Company’s website www.autocan.ca.

EDMONTON, March 26, 2013 /PRNewswire/ – AutoCanada Inc. (the “Company” or
“AutoCanada”) (TSX: ACQ) today announced financial results for the year
ended December 31, 2012 and the three month period ended December 31,
2012.

2012 Fourth Quarter Operating Results

        --  Revenue increased 9.8% or $23.4 million
        --  Gross profit increased by 14.4% or $6.1 million
        --  Same store revenue increased by 7.4%
        --  Same store gross profit increased by 11.9%
        --  EBITDA was $10.3 million vs. $7.6 million in Q4 of 2011, a
            35.5% increase
        --  The number of new vehicles retailed increased by 16.9%
        --  The number of used vehicles retailed increased by 1.8%
        --  Repair orders completed for the quarter were up 2.8%
        --  Same store repair orders completed for the quarter were down
            0.7%

In commenting on the financial results for the three month period ended
December 31, 2012, Pat Priestner, Chief Executive Officer of AutoCanada
Inc. stated that, “The fourth quarter of 2012 was exceptionally strong
with over $10 million in EBITDA.  Normally, we experience lower results
in the first and fourth quarters of the fiscal year, but strong sales
momentum from the third quarter of 2012 seemed to continue well into
the fourth quarter.  We are of course very pleased with these results.”

2012 Annual Operating Results

        --  Revenue increased by 9.4% or $94.6 million to $1.1 billion
        --  Gross profit increased by 12.5% or $21.2 million
        --  Same store revenue increased by 8.6%
        --  Same store gross profit increased by 10.9%
        --  EBITDA was $37.9 million vs. $29.1 million in 2011, a 30.2%
            increase
        --  The number of new vehicles retailed increased by 17.0%
        --  The number of used vehicles retailed increased by 10.7%
        --  Repair orders completed for the year were up 1.4%
        --  Same store repair orders completed for the year were up 4.4%

In commenting on the financial results for the year ended December 31,
2012, Mr. Priestner stated that, “The 2012 fiscal year was an excellent
year to be an auto dealer in Canada.  With our Company’s double-digit
growth in the number of new and used vehicles retailed, we achieved
record sales and normalized earnings for the Company in 2012.  We are
particularly proud of the performance of our dealership teams, head
office team and Manufacturer partners, all of whom performed
exceptionally well in 2012.”  With respect to recent growth
opportunities announced, Mr. Priestner further commented, “We are very
pleased to have added two new significant brands during the year.  The
announcement of GM Canada’s approval of our investment in three General
Motors dealerships over the past year has increased our ability to grow
and contribute to shareholder value.  The award of a Kia open point in
our home market in Edmonton also presents a great opportunity for
AutoCanada to grow its dealership base with another excellent brand. 
With the recent increase in potential acquisition activity, the Company
is in a very good position to capitalize on this development over the
next year and beyond.”  Mr. Priestner further stated.

Fourth Quarter 2012 Highlights

        --  For the fourth quarter of 2012, the Company generated
            normalized earnings of $6.4 million or basic and diluted
            earnings per share of $0.32.  Normalized pre-tax earnings
            increased by $2.8 million to $8.9 million in the fourth quarter
            of 2012 as compared to $6.2 million in the same period in 2011.

        --  Same store revenue increased by 7.4% in the fourth quarter of
            2012, compared to the same quarter in 2011.  Same store gross
            profit increased by 11.9% in the fourth quarter of 2012,
            compared to the same quarter in 2011.

        --  Revenue from existing and new dealerships increased 9.8% to
            $262.1 million in the fourth quarter of 2012 from $238.7
            million in the same quarter in 2011.

        --  Gross profit from existing and new dealerships increased 14.4%
            to $48.4 million in the fourth quarter of 2012 from $42.3
            million in the same quarter in 2011.

        --  EBITDA increased 35.5% to $10.3 million in the fourth quarter
            of 2012 from $7.6 million in the same quarter in 2011.

        --  Free cash flow decreased to $0.9 million in the fourth quarter
            of 2012 or $0.05 per share as compared to $9.0 million or $0.45
            per share in the fourth quarter of 2011.

        --  Adjusted free cash flow increased to $9.0 million in the fourth
            quarter of 2012 or $0.45 per share as compared to $7.4 million
            or $0.37 per share in 2011.

        --  Adjusted return on capital employed increased to 6.6% in the
            fourth quarter of 2012 as compared to 5.3% in 2011.

2012 Highlights

        --  For the year ended December 31, 2012, the Company generated
            normalized earnings of $24.1 million, or basic and fully
            diluted earnings per share of $1.21.  Normalized pre-tax
            earnings increased by $8.8 million to $32.6 million for the
            year ended December 31, 2012 as compared to $23.8 million in
            2011.

        --  Same store revenue and gross profit increased by 8.6% and 10.9%
            respectively in the year ended December 31, 2012, compared to
            the results of the Company for the 2011 year.

        --  Revenue from existing and new dealerships increased 9.4% to
            $1.10 billion in the year ended December 31, 2012 from the
            $1.01 billion that was generated by the Company in 2011.

        --  Gross profit from existing and new dealerships increased by
            12.5% to $190.4 million in the year ended December 31, 2012
            from the $169.2 million that was generated by the Company in
            the 2011 year.

        --  EBITDA increased 30.2% to $37.9 million for the year ended
            December 31, 2012 from the $29.1 million that was generated by
            the Company in the 2011 year.

        --  Free cash flow decreased to $18.9 million in the year ended
            December 31, 2012 or $0.96 per share as compared to $27.1
            million or $1.36 per share in 2011.

        --  Adjusted free cash flow increased to $31.8 million in the year
            ended December 31, 2012 or $1.60 per share as compared to $27.7
            million or $1.39 per share in 2011.

Dividends

Management reviews the Company’s financial results on a monthly basis. 
The Board of Directors reviews the financial results on a quarterly
basis, or as requested by Management, and determines the level of
dividend based on a number of factors.

The following table summarizes the dividends declared by the Company in
2012:


    (In thousands of dollars)                                      

                                                           Total

      Record date       Payment date                 Declared  Paid

                                                            $     $

      February 28, 2012 March 15, 2012                  2,783 2,783
      May 31, 2012      June 15, 2012                   2,982 2,982
      August 31, 2012   September 17, 2012              3,181 3,181
      November 30, 2012 December 17, 2012               3,380 3,380

On February 15, 2013, the Board declared a quarterly eligible dividend
of $0.18 per common share on AutoCanada’s outstanding common shares,
payable on March 15, 2013 to shareholders of record at the close of
business on February 28, 2013.  The quarterly eligible dividend of
$0.18 represents an annual dividend rate of $0.72 per share or a 5.9%
increase in the dividend from the prior quarter.  The next scheduled
dividend review will be in May 2013.

Real Estate

On March 26, 2013, the Real Estate Committee, comprised of independent
members of the Board of Directors, completed its evaluation of the
purchase of dealership real estate owned by subsidiaries of Canada One
Auto Group.  Upon determining that the purchase would be accretive to
shareholders and would provide significant positive cash flow to the
Company, the Company has entered into a letter of intent to purchase 11
of these properties currently being leased by the Company. The closing
date is scheduled for 90 days, with the Company having the option to
extend a further 90 days.  The Company has sufficient short term
liquidity available to fund the non-mortgage financed portion of the
transaction.

As previously disclosed; Pat Priestner, CEO, and Tom Orysiuk, President,
are shareholders and directors of Canada One Auto Group and as such are
not members of the Real Estate Committee.

The purchase price of the 11 properties will be $58,140,000, not
including transaction costs and taxes.  Once completed, the Company
will achieve annual lease savings of $4,988,000, not including the
impact of future increases in lease costs contained in the current
lease agreements.  The Committee estimates annual adjusted free cash
flow accretion of $0.10 to $0.12 per share and earnings per share
accretion of $0.02 to $0.04 per share as a result of the transaction;
based on the Company’s current cost of capital and assuming no changes
in market rates or assumptions.  The purchase of the real estate will
have no impact on general repairs and maintenance expense, insurance or
property taxes associated with the buildings as the tenant is currently
responsible for these expenses under the current lease agreements.

SELECTED ANNUAL FINANCIAL INFORMATION

The following table shows the audited results of the Company for the
years ended December 31, 2010, December 31, 2011 and December 31,
2012.  The results of operations for these periods are not necessarily
indicative of the results of operations to be expected in any given
comparable period.


    (In thousands of dollars except   The Company The Company The Company
    Operating
    Data and gross profit %)

                                        (Audited)   (Audited)   (Audited)

                                             2010        2011        2012

    Income Statement Data
    Revenue                               869,507   1,009,326   1,103,913

       New vehicles                       514,676     640,722     683,375

       Used vehicles                      202,552     206,030     243,351

       Parts, service &  collision
       repair                             108,558     110,678     114,600

       Finance, insurance & other          43,721      51,896      62,587

    Gross profit                          150,020     169,161     190,365

       New vehicles                        38,164      47,705      57,575

       Used vehicles                       16,885      17,381      16,312

       Parts, service & collision
       repair                              55,888      57,480      59,643

       Finance, insurance & other          39,083      46,595      56,835

    Gross profit %                          17.3%       16.8%       17.2%

    Operating expenses                    130,237     136,846     149,140

    Operating expenses as % of gross
    profit                                  86.8%       80.9%       78.3%

    Finance costs - floorplan               7,536       8,057       8,832

    Finance costs - long term debt          1,076       1,136         984

    (Reversal of) Impairment of
    intangible assets                     (8,059)    (25,543)       (222)

    Income taxes                            4,956      12,509       8,576

    Net earnings                           14,596      36,784      24,236

    EBITDA 1                               16,740      29,137      37,885

    Cash dividends per share                0.120       0.310       0.620

    Basic earnings (loss) per share         0.734       1.850       1.222

    Diluted earnings (loss) per share       0.734       1.850       1.222

    Operating Data
    Vehicles (new and used) sold           24,239      27,998      29,780

    New retail vehicles sold               12,767      14,499      16,226

    New fleet vehicles sold                 2,717       4,832       4,096

    Used retail vehicles sold               8,755       8,667       9,458

    Number of service & collision
    repair orders completed               309,705     305,298     309,488

    Absorption rate 2                         86%         88%         86%

    # of dealerships                           23          24          24

    # of same store dealerships 3              21          21          22

    # of service bays at period end           339         333         333

    Same store revenue growth 3             10.5%       17.3%        8.6%

    Same store gross profit growth 3         4.1%       13.9%       10.9%

    1  EBITDA has been calculated as described under "NON-GAAP MEASURES".

    2  Absorption has been calculated as described under "NON-GAAP
       MEASURES".

    3  Same store revenue growth & same store gross profit growth is
       calculated using franchised automobile dealerships that we have
       owned for at least 2 full years.

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.


    (In
    thousands
    of dollars
    except
    Operating
    Data and
    gross
    profit %)                                                                   

                   Q1      Q2      Q3       Q4      Q1      Q2      Q3      Q4
                  2011    2011    2011     2011    2012    2012    2012    2012

    Income
    Statement
    Data                                                                        

      New
      vehicles  128,303 196,850 172,688  142,881 147,383 186,649 190,139 159,204

      Used
      vehicles   44,906  52,054  55,351   53,719  60,453  62,822  62,816  57,260

      Parts,
      service &
      collision
      repair     26,462  28,256  26,980   28,980  26,913  28,847  28,593  30,247

      Finance,
      insurance
      & other    11,113  13,577  14,115   13,091  13,648  16,451  17,133  15,355

    Revenue     210,784 290,737 269,134  238,671 248,397 294,769 298,681 262,066

      New
      vehicles    9,724  13,974  12,740   11,267  12,046  14,647  15,461  15,421

      Used
      vehicles    3,486   4,301   5,020    4,574   4,412   4,237   3,994   3,668

      Parts,
      service &
      collision
      repair     13,278  15,159  14,492   14,551  14,004  15,228  15,078  15,333

      Finance,
      insurance
      & other     9,947  12,118  12,647   11,883  12,387  14,878  15,579  13,992

    Gross
    profit       36,435  45,552  44,899   42,275  42,849  48,990  50,112  48,414

    Gross
    profit %      17.3%   15.7%   16.7%    17.7%   17.3%   16.6%   16.8%   18.5%

    Operating
    expenses     31,891  35,127  35,742   34,086  35,381  37,661  38,361  37,737

    Operating
    exp. as %
    of gross
    profit        87.5%   77.1%   79.6%    80.7%   82.6%   76.8%   76.6%   78.1%

    Finance
    costs -
    floorplan     1,685   2,311   2,190    1,871   1,935   2,511   2,645   1,741

    Finance
    costs -
    long-term
    debt            283     323     296      234     230     256     267     231

    Reversal of
    impairment
    of
    intangibles       -       -       - (25,543)       -       -       -   (222)

    Income
    taxes           690   2,029   1,646    8,144   1,441   2,216   2,379   2,540

    Net
    earnings 4    1,995   5,951   5,230   23,608   4,113   6,711   6,807   6,605

    EBITDA 1, 4   4,047   9,321   8,216    7,553   6,809  10,208  10,592  10,276

    Basic
    earnings
    (loss) per
    share         0.100   0.299   0.263    1.187   0.207   0.338   0.344   0.334

    Diluted
    earnings
    (loss) per
    share         0.100   0.299   0.263    1.187   0.207   0.338   0.344   0.334

    Operating
    Data
    Vehicles
    (new and
    used) sold    5,826   8,210   7,649    6,313   6,836   8,154   8,087   6,703

    New retail
    vehicles
    sold          3,050   4,158   3,886    3,405   3,434   4,400   4,410   3,982

    New fleet
    vehicles
    sold            796   1,900   1,361      775     969   1,313   1,265     549

    Used retail
    vehicles
    sold          1,980   2,152   2,402    2,133   2,433   2,441   2,412   2,172

    Number of
    service &
    collision
    repair
    orders
    completed    72,360  80,851  76,176   75,911  74,439  78,104  78,944  78,001

    Absorption
    rate 2          80%     91%     90%      91%     81%     89%     89%     85%

    # of
    dealerships
    at period
    end              23      22      22       24      24      24      24      24

    # of same
    store
    dealerships
    3                22      21      21       21      21      21      22      22

    # of
    service
    bays at
    period end      339     322     322      333     333     333     333     333

    Same store
    revenue
    growth 3       2.7%   19.3%   21.6%    24.8%   20.2%    2.4%    8.0%    7.4%

    Same store
    gross
    profit
    growth 3       2.9%    8.2%   22.9%    20.6%   18.3%    7.1%    7.9%   11.9%

    Balance
    Sheet Data                                                                  

    Cash and
    cash
    equivalents  39,337  43,837  49,366   53,641  53,403  51,198  54,255  34,472

    Restricted
    cash              -       -       -        -       -       -       -  10,000

    Accounts
    receivable   42,260  51,539  44,172   42,448  51,380  52,042  54,148  47,944

    Inventories 134,865 149,481 159,732  136,869 155,778 201,302 193,990 199,226

    Revolving
    floorplan
    facilities  152,075 172,600 175,291  150,816 178,145 221,174 212,840 203,525

    1  EBITDA has been calculated as described under "NON-GAAP MEASURES".

    2  Absorption has been calculated as described under "NON-GAAP
       MEASURES".

    3  Same store revenue growth & same store gross profit growth is
       calculated using franchised automobile dealerships that we have
       owned for at least 2 full years.

    4  The results from operations have been lower in the first and fourth
       quarters of each year, largely due to consumer purchasing patterns
       during the holiday season, inclement weather and the reduced number
       of business days during the holiday season. As a result, our
       financial performance is generally not as strong during the first
       and fourth quarters than during the other quarters of each fiscal
       year. The timing of acquisitions may have also caused substantial
       fluctuations in operating results from quarter to quarter.

The following table summarizes the results for the year ended December
31, 2012, on a same store basis by revenue source, and compares these
results to the same periods in 2011.


                   Same Store Gross Profit and Gross Profit Percentage

                                              For the Year Ended

                            Gross Profit                 Gross Profit %

    (In
    thousands
    of dollars
    except %
    change and
    gross           Dec. 31, Dec. 31,   %      Dec. 31, Dec. 31,
    profit %)         2012     2011   Change     2012     2011      Change

    Revenue
    Source
    New
    vehicles          55,573   46,858  18.6%       8.3%     7.6%       0.9%

    Used
    vehicles          15,715   17,271 (9.0)%       6.7%     8.5%     (1.9)%

    Finance,
    insurance
    and other         54,933   45,938  19.6%      90.6%    89.8%       1.0%

    Subtotal         126,221  110,067  14.7%                               

    Parts,
    service and
    collision
    repair            58,009   56,077   3.4%      52.0%    51.9%       0.7%

    Total            184,230  166,144  10.9%      17.2%    16.8%       0.3%

The following table summarizes the results for the three-month period
ended December 31, 2012 on a same store basis by revenue source and
compares these results to the same period in 2011.


                  Same Store Gross Profit and Gross Profit Percentage

                                    For the Three-Month Period Ended

                         Gross Profit                   Gross Profit %

    (In
    thousands
    of dollars
    except %
    change and
    gross       Dec. 31, Dec. 31,    %      Dec. 31, Dec. 31,
    profit %)     2012     2011   Change      2012     2011       Change

    Revenue
    Source                                                                

    New
    vehicles      14,853   11,064   34.3%       9.6%     7.9%         1.8%

    Used
    vehicles       3,594    4,504 (20.2)%       6.5%     8.5%       (2.0)%

    Finance,
    insurance
    and other     13,260   11,734   13.0%      91.3%    90.8%         0.4%

    Subtotal      31,707   27,302   16.1%                                 

    Parts,
    service and
    collision
    repair        14,907   14,355    3.8%      51.1%    50.5%         0.6%

    Total         46,614   41,657   11.9%      18.4%    17.7%         0.7%

About AutoCanada

AutoCanada is one of Canada’s largest multi-location automobile
dealership groups, currently operating 28 franchised dealerships in six
provinces and has over 1,200 employees.  AutoCanada currently sells
Chrysler, Dodge, Jeep, Ram, FIAT, Chevrolet, GMC, Buick, Infiniti,
Nissan, Hyundai, Subaru, Mitsubishi, and Volkswagen branded vehicles. 
In 2012, our dealerships sold approximately 30,000 vehicles and
processed approximately 309,000 service and collision repair orders in
our 333 service bays during that time.

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 third 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 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 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”,
“expect”, “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.

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.  We list and define these “NON-GAAP MEASURES”
below:

EBITDA

EBITDA is a measure commonly reported and widely used by investors as an
indicator of a company’s operating performance and ability to incur and
service debt, and as a valuation metric.  The Company believes EBITDA
assists investors in comparing a company’s performance on a consistent
basis without regard to depreciation and amortization and asset
impairment charges which are non-cash in nature and can vary
significantly depending upon accounting methods or non-operating
factors such as historical cost.  References to “EBITDA” are to
earnings before interest expense (other than interest expense on
floorplan financing and other interest), income taxes, depreciation,
amortization and asset impairment charges.

EBIT

EBIT is a measure used by management in the calculation of Return on
capital employed (defined below).  Management’s calculation of EBIT is
EBITDA (calculated above) less depreciation and amortization.

Normalized Earnings

Normalized earnings are calculated by adding back the after-tax effect
of impairment or reversals of impairment of intangible assets and
impairments of goodwill.  Adding back these non-cash charges to net
earnings allows management to assess the net earnings of the Company
from ongoing operations.

Normalized Pre-Tax Earnings

Normalized pre-tax earnings are calculated by adding back the impairment
or reversals of impairment of intangible assets and impairments of
goodwill.  Adding back these non-cash charges to pre-tax net earnings
allows management to assess the pre-tax net earnings of the Company
from ongoing operations.

Free Cash Flow

Free cash flow is a measure used by management to evaluate its
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 growth or distribution of the Company.  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
expenditures (not including acquisitions of dealerships and dealership
facilities).

Adjusted Free Cash Flow

Adjusted free cash flow is a measure used by management to evaluate its
performance.  Adjusted free cash flow is considered relevant because it
provides an indication of how much cash generated by operations before
changes in non-cash working capital is available after deducting
expenditures for non-growth capital assets.  It shall be noted that
although we consider this measure to be adjusted 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 adjusted free cash
flow may not actually be available for growth or distribution of the
Company.  References to “Adjusted free cash flow” are to cash provided
by (used in) operating activities (before changes in non-cash working
capital balances) less non-growth capital expenditures.

Adjusted Average Capital Employed

Adjusted average capital employed is a measure used by management to
determine the amount of capital invested in AutoCanada and is used in
the measure of Adjusted Return on Capital Employed (described below). 
Adjusted average capital employed is calculated as the average balance
of interest bearing debt for the period (including current portion of
long term debt, excluding revolving floorplan facilities) and the
average balance of shareholders equity for the period, adjusted for
impairments of intangible assets, net of deferred tax.  Management does
not include future income tax, non-interest bearing debt, or revolving
floorplan facilities in the calculation of adjusted average capital
employed as it does not consider these items to be capital, but rather
debt incurred to finance the operating activities of the Company.

Absorption Rate

Absorption rate is an operating measure commonly used in the retail
automotive industry as an indicator of the performance of the parts,
service and collision repair operations of a franchised automobile
dealership. Absorption rate is not a measure recognized by GAAP and
does not have a standardized meaning prescribed by GAAP. Therefore,
absorption rate may not be comparable to similar measures presented by
other issuers that operate in the retail automotive industry. 
References to ”absorption rate” are to the extent to which the gross
profits of a franchised automobile dealership from parts, service and
collision repair cover the costs of these departments plus the fixed
costs of operating the dealership, but does not include expenses
pertaining to our head office. For this purpose, fixed operating costs
include fixed salaries and benefits, administration costs, occupancy
costs, insurance expense, utilities expense and interest expense (other
than interest expense relating to floor plan financing) of the
dealerships only.

Average Capital Employed

Average capital employed is a measure used by management to determine
the amount of capital invested in AutoCanada and is used in the measure
of Return on Capital Employed (described below). Average capital
employed is calculated as the average balance of interest bearing debt
for the period (including current portion of long term debt, excluding
revolving floorplan facilities) and the average balance of shareholders
equity for the period.  Management does not include future income tax,
non-interest bearing debt, or revolving floorplan facilities in the
calculation of average capital employed as it does not consider these
items to be capital, but rather debt incurred to finance the operating
activities of the Company.

Return on Capital Employed

Return on capital employed is a measure used by management to evaluate
the profitability of our invested capital.  As a corporation,
management of AutoCanada may use this measure to compare potential
acquisitions and other capital investments against our internally
computed cost of capital to determine whether the investment shall
create value for our shareholders.  Management may also use this
measure to look at past acquisitions, capital investments and the
Company as a whole in order to ensure shareholder value is being
achieved by these capital investments.  Return on capital employed is
calculated as EBIT (defined above) divided by Average Capital Employed
(defined above).

Adjusted Return on Capital Employed

Adjusted return on capital employed is a measure used by management to
evaluate the profitability of our invested capital.  As a corporation,
management of AutoCanada may use this measure to compare potential
acquisitions and other capital investments against our internally
computed cost of capital to determine whether the investment shall
create value for our shareholders.  Management may also use this
measure to look at past acquisitions, capital investments and the
Company as a whole in order to ensure shareholder value is being
achieved by these capital investments.  Adjusted return on capital
employed is calculated as EBIT (defined above) divided by Adjusted
Average Capital Employed (defined above).

Cautionary Note Regarding Non-GAAP Measures

EBITDA, EBIT, Free Cash Flow, Adjusted Free Cash Flow, Absorption Rate,
Average Capital Employed and Return on Capital Employed 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 EBITDA, EBIT, Free Cash Flow, Adjusted
Free Cash Flow, Absorption Rate, Average Capital Employed and Return on
Capital Employed may differ from the methods used by other issuers.
Therefore, the Company’s EBITDA, EBIT, Free Cash Flow, Adjusted Free
Cash Flow, Absorption Rate, Average Capital Employed and Return on
Capital Employed may not be comparable to similar measures presented by
other issuers.

Additional information about AutoCanada Inc. is available at the
Company’s website at www.autocan.ca and www.sedar.com.

AutoCanada Inc.
Consolidated Statements of Comprehensive Income
For the Years Ended
(in thousands of Canadian dollars except for share and per share
amounts)


                                              December 31,     December 31,
                                                      2012             2011
                                                         $                $

    Revenue (Note 9)                             1,103,913        1,009,326

    Cost of sales(Note 10)                       (913,548)        (840,165)

    Gross profit                                   190,365          169,161

    Operating expenses(Note 11)                  (149,140)        (136,846)

    Operating profit before other income            41,225           32,315

    Loss on disposal of assets                        (95)             (41)

    Reversal of impairment of assets                   222          25,543
    (Note 20)

    Income from investment in associate                468                -
    (Note 15)

    Operating profit                                41,820           57,817

    Finance costs (Note 13)                       (10,583)          (9,848)

    Finance income (Note 13)                         1,575            1,324

    Net comprehensive income for the year           32,812           49,293
    before taxation

    Income tax (Note 14)                             8,576           12,509

    Net comprehensive income for the year           24,236           36,784

    Earnings per share                                                     

    Basic                                            1.222            1.850

    Diluted                                          1.222            1.850

    Weighted average shares                                                

    Basic                                       19,840,802       19,880,930

    Diluted                                     19,840,802       19,880,930

The accompanying notes are an integral part of these consolidated
financial statements.

Approved on behalf of the Company:


    (Signed) "Gordon R.                      (Signed) "Robin Salmon",
    Barefoot", Director                      Director

AutoCanada Inc.
Consolidated Statements of Financial Position
(in thousands of Canadian dollars)


                                              December 31,  December 31,
                                                      2012          2011
                                                         $             $

    ASSETS                                                              

    Current assets                                                      

    Cash and cash equivalents (Note 16)             34,472        53,641

    Restricted cash (Note 16)                       10,000             -

    Trade and other receivables (Note 17)           47,944        42,448

    Inventories (Note 18)                          199,226       137,016

    Other current assets                             1,102         1,120

                                                   292,744       234,225

    Property and equipment (Note 19)                38,513        25,975

    Intangible assets (Note 20)                     66,403        66,181

    Goodwill                                           380           380

    Other long-term assets (Note 22)                 7,699         7,609

    Investment in associate (Note 15)                4,730             -

                                                   410,469       334,370

    LIABILITIES                                                         

    Current liabilities                                                 

    Trade and other payables (Note 23)              35,697        32,279

    Revolving floorplan facilities (Note 24)       203,525       150,816

    Current tax payable (Note 14)                    3,719         2,046

    Current lease obligations (Note 25)              1,282         1,204

    Current indebtedness (Note 24)                   3,000         2,859

                                                   247,223       189,204

    Long-term indebtedness (Note 24)                23,937        20,115

    Deferred tax (Note 14)                          14,809        12,056

                                                   285,969       221,375

    EQUITY                                         124,500       112,995

                                                   410,469       334,370

The accompanying notes are an integral part of these consolidated
financial statements.

AutoCanada Inc.
Consolidated Statements of Changes in Equity
For the Years Ended
(in thousands of Canadian dollars)


                          Share Treasury Contributed         Total  Accumulated
                        capital   shares     surplus       capital      deficit        Equity
                              $                    $             $            $             $

    Balance,
    January 1,
    2012                190,435       -        3,918       194,353     (81,358)       112,995

    Net
    comprehensive
    income                   -        -           -             -        24,236        24,236

    Dividends
    declared on
    common shares
    (Note 28)                -        -           -             -      (12,301)      (12,301)

    Common shares
    repurchased
    (Note 28)                -     (935)          -          (935)           -          (935)

    Share-based
    compensation             -        -          505           505           -            505

    Balance,
    December 31,
    2012                190,435    (935)       4,423       193,923     (69,423)       124,500

                          Share          Contributed         Total  Accumulated
                        capital Treasury     surplus       capital      deficit        Equity
                              $   Shares           $             $            $             $

    Balance,
    January 1,
    2011                190,435       -        3,918       194,353    (111,979)        82,374

    Net
    comprehensive
    income                   -        -           -             -        36,784        36,784

    Dividends
    declared on
    common shares
    (Note 28)                -        -           -             -       (6,163)       (6,163)

    Balance,
    December 31,
    2011                190,435       -        3,918       194,353     (81,358)       112,995

The accompanying notes are an integral part of these consolidated
financial statements.

AutoCanada Inc.
Consolidated Statements of Cash Flows
For the Years Ended
(in thousands of Canadian dollars)


                                                December 31,   December 31,
                                                        2012           2011
                                                           $              $

    Cash provided by (used in)                                             

    Operating activities                                                   

    Net comprehensive income                          24,436         36,784

    Income taxes (Note 14)                             8,576         12,509

    Amortization of prepaid rent                         452            452

    Amortization of property and equipment
    (Note 11)                                          4,311          4,251

    Loss on disposal of assets                            95             41

    Reversal of impairment of assets (Note
    20)                                                (222)       (25,543)

    Share-based payments                                 739            302

    Income from investment in associate (Note
    15)                                                (468)             - 

    Income taxes paid                                (4,255)             - 

    Net change in non-cash working capital
    (Note 31)                                       (12,932)          1,231

                                                      21,072         30,027

    Investing activities                                                   

    Addition to restricted cash (Note 16)           (10,000)             - 

    Business acquisitions                                 -         (1,753)

    Investment in associate (Note 15)                (4,262)             - 

    Purchases of property and equipment             (16,069)        (2,954)

    Disposal (purchase) of other assets                 (58)             11

    Proceeds on sale of property and
    equipment                                             32             68

    Proceeds on divestiture of dealership
    (Note 22)                                             -           1,464

    Prepayments of rent                                (540)        (2,160)

                                                    (30,897)        (5,324)

    Financing activities                                                   

    Proceeds from long-term debt (Note 24)             6,218             - 

    Repayment of long term indebtedness              (2,349)        (2,440)

    Common shares repurchased (Note 28)                (912)             - 

    Dividends paid (Note 28)                        (12,301)        (6,163)

                                                     (9,344)        (8,603)

    Increase (decrease) in cash                     (19,169)         16,100

    Cash and cash equivalents at beginning of
    year                                              53,641         37,541

    Cash and cash equivalents at end of year          34,472         53,641

The accompanying notes are an integral part of these consolidated
financial statements.

 

 

SOURCE AutoCanada Inc.


Source: PR Newswire