"We've ended the year with a third consecutive strong quarter and a year marked by key wins and accomplishments", said
Consolidated
DEBT REFINANCING COMPLETED ON THE HEELS OF A THIRD CONSECUTIVE STRONG QUARTER
The Company performed well in the fourth quarter, building on the momentum from our strong second and third quarters.
- Revenue was
$809.1 million , an increase of$26.3 million or 3.4% - Total vehicles sold were 16,593, an increase of 317 units or 1.9%
- Net income (loss) for the period was
$(16.8) million (or$(0.61) per diluted share) versus$(36.0) million (or$(1.30) per diluted share). In the period, impairment charges of$(24.0) million were incurred as compared to impairment charges of$(23.8) million in 2018. The adoption of IFRS 16 resulted in additional total expenses, which negatively affected the Company's net (loss) in the quarter by$(2.5) million - Total impairment charge of
$(24.0) million is comprised of$18.2 million impairment of theU.S operating segment as management has taken a conservative view on the outlook of theU.S. platform, and a small recovery of$0.2 million related to the Canadian operating segment. There was an additional$6.0 million impairment charge to the redundant non-core asset portfolio - Adjusted EBITDA increased 236.1% to
$21.1 million , an increase of$14.8 million ; of the$14.8 million increase,$10.1 million was attributed to the impact of IFRS 16. Adjusting for the impact of IFRS 16, Adjusted EBITDA was$10.9 million , an increase of 74.3% over the prior year - Continued focus on working capital initiatives and continued improvements in operational performance allowed the Company to reduce its net indebtedness by
$44.5 million in the quarter
Canadian Operations Highlights
SAME STORE UNIT GROWTH OF 10.5% DRIVES 31% NORMALIZED ADJUSTED EBITDA GROWTH
Management continued to focus on implementing and building upon its Go Forward initiatives for Canadian Operations during the quarter. Earnings performance was driven by a combination of strong unit growth, the impact of our F&I initiative and our focus on improving used retail vehicle sales. Same store new retail unit sales growth was 1.3% as compared to the market decrease of (1.2)%, for brands represented by
- Revenue was
$698.3 million , up 6.9% - Total retail vehicles sold were 13,211, an increase of 1,024 units or 8.4%
- Same store new and used retail unit sales increased 10.5% to 12,243
- Used to new retail units ratio increased to 0.84 from 0.69, an increase of 20.6%
- Net (loss) income for the period was
$6.0 million , up 213.5% from a net loss of$(5.3) million in 2018. 2019 results included impairment charges of$5.8 million versus$0.4 million in 2018. The adoption of IFRS 16 resulted in additional total expenses, which negatively affected the Canadian Operations segment net income (loss) by$1.3 million - Adjusted EBITDA increased 93.3% to
$22.1 million , an increase of$10.7 million ; IFRS 16 resulted in an increase to Adjusted EBITDA of$9.2 million . Adjusting for the impact of IFRS 16 in 2019, Adjusted EBITDA was$12.9 million , an increase of 12.5% over the prior year - Sale and leaseback transactions executed from the beginning of 2019 to the end of Q3 2019 resulted in an increase of
$2.1 million lease costs in the quarter in comparison to prior year. Normalizing prior year results for these sale-leaseback costs, Adjusted EBITDA reflected an increase of 31% over the prior year.
CONTINUED PROGRESS - BETTER THAN BREAK-EVEN RESULTS
The
- Revenue was
$110.8 million , a decrease of (14.6)% - Retail unit sales decreased to 2,542, down 430 units or (14.5)%
- Net (loss) income for the period was
$(22.8) million versus$(30.8) million in 2018. 2019 results included impairment charges of$18.2 million versus$23.4 million in 2018. IFRS 16 adjustments resulted in additional total expenses for theU.S. segmented operations for the period, which negatively affected theU.S. Operations segment net income (loss) by$0.7 million - Adjusted EBITDA was
$(1.1) million , an increase of$4.1 million from 2018; IFRS 16 resulted in an increase to Adjusted EBITDA of$0.9 million . Adjusting for the impact of IFRS 16 in 2019, Adjusted EBITDA was$(2.0) million as compared to$(5.2) million in the prior year - Results for the quarter include the impact of
$3.7 million in write-downs primarily associated with receivables and inventory in ourU.S. segment. Adjusting for the impact of IFRS 16 in 2019, normalized Adjusted EBITDA would have been$1.8 million as compared to$(5.2) million in the prior year.
Same Store Metrics
SAME STORE USED RETAIL UNIT SALES GROWTH OF 23.6%
Total same store new and used retail unit sales for Canadian Operations increased 10.5% to 12,243, with new retail units showing an increase of 1.3% and used retail units up 23.6%. The increase of new retail units by 1.3% compares with a market decrease of (1.2)% in the Canadian new vehicle market for the brands represented by
- Revenue increased to
$647.9 million , an increase of 8.7% - Gross profit increased by
$12.1 million or 11.8% - Used to new retail units ratio increased to 0.86 from 0.70
- Finance and insurance gross profit per retail unit average increased to
$2,512 , up 15.8% or$343 per unit; Gross profit increased to$30.7 million as compared to$24.0 million in the prior year - Parts, service and collision repair gross profit increased to
$49.3 million , an increase of 4.3%
Financing and Investing Activities and Other Recent Developments
NET INDEBTEDNESS REDUCED TO
In continuation of the Company's optimization of the balance sheet and operations, the following transactions occurred in the three-month period ended
- A Canadian redundant property was sold for
$2.7 million in proceeds, which resulted in a net loss of$(0.2) million - Ceased operations of two under-performing
U.S. franchises, onNovember 11, 2019 .
Subsequent to
- Entered into an amended and restated
$950 million syndicated credit facility (the "New Credit Facility"), with a maturity date ofFebruary 11, 2023 - Closed
$125 million of 8.75% senior unsecured notes dueFebruary 11, 2025 - S&P Global Ratings ("S&P") revised the Company's outlook to stable, affirmed its 'B' issuer credit rating and assigned a 'B-' rating to the Company's
$125 million senior unsecured notes
Dividends
On
For purposes of the enhanced dividend tax credit rules contained in the Income Tax Act (
Subsequent Events
Senior Unsecured Notes
The Company issued
The New Notes were issued at a discounted issue price of
Amended and Restated Credit Facilities
On
The following table summarizes the Company's results for the quarter and year ended
Three Months Ended | Year Ended | |||||||||
Consolidated Operational Data | 2019 | 2018 | % Change | 2019 | 2018 | % Change | ||||
Revenue | 809,103 | 782,790 | 3.4% | 3,476,111 | 3,150,781 | 10.3 | % | |||
Gross profit | 139,676 | 128,204 | 8.9% | 570,495 | 507,963 | 12.3 | % | |||
Gross profit % | 17.3% | 16.4% | 0.9% | 16.4% | 16.1% | 0.3 | % | |||
Operating expenses | 125,140 | 125,039 | 0.1% | 499,768 | 474,804 | 5.3 | % | |||
Operating (loss) profit | (6,597) | (6,569) | (0.4)% | 42,474 | (38,642) | (209.9) | % | |||
Net (loss) for the period | (16,786) | (36,013) | 53.4% | (27,073) | (85,442) | (68.3) | % | |||
Basic net (loss) per share attributable to | (0.63) | (1.30) | 51.5% | (1.03) | (3.14) | (67.2) | % | |||
Adjusted EBITDA 1, 2 | 21,065 | 6,268 | 236.1% | 97,203 | 50,673 | 91.8 | % | |||
New retail vehicles sold (units) | 8,796 | 9,214 | (4.5)% | 37,687 | 36,495 | 3.3 | % | |||
New fleet vehicles sold (units) | 840 | 1,117 | (24.8)% | 5,547 | 6,956 | (20.3) | % | |||
Total new vehicles sold (units) | 9,636 | 10,331 | (6.7)% | 43,234 | 43,451 | (0.5) | % | |||
Used retail vehicles sold (units) | 6,957 | 5,945 | 17.0% | 28,107 | 23,159 | 21.4 | % | |||
Total vehicles sold | 16,593 | 16,276 | 1.9% | 71,341 | 66,610 | 7.1 | % | |||
Same store new retail vehicles sold (units) | 6,592 | 6,505 | 1.3% | 28,678 | 28,171 | 1.8 | % | |||
Same store new fleet vehicles sold (units) | 792 | 954 | (17.0)% | 5,098 | 6,134 | (16.9) | % | |||
Same store used retail vehicles sold (units) | 5,651 | 4,571 | 23.6% | 22,752 | 18,577 | 22.5 | % | |||
Same store total vehicles sold | 13,035 | 12,030 | 8.4% | 56,528 | 52,882 | 6.9 | % | |||
Same store revenue | 647,885 | 595,984 | 8.7% | 2,798,855 | 2,582,351 | 8.4 | % | |||
Same store gross profit | 114,334 | 102,268 | 11.8% | 471,726 | 430,724 | 9.5 | % | |||
Same store gross profit % | 17.6% | 17.2% | 0.4% | 16.9% | 16.7% | 0.2 | % |
See the Company's Management's Discussion and Analysis for the quarter and year ended |
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.
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||
Income Statement Data | |||||||||||||||
New vehicles | 430,102 | 555,843 | 554,686 | 398,983 | 432,756 | 509,281 | 522,150 | 338,016 | |||||||
Used vehicles | 217,063 | 262,297 | 223,258 | 188,619 | 192,988 | 206,668 | 198,597 | 157,901 | |||||||
Parts, service and collision repair | 120,564 | 116,439 | 125,822 | 116,902 | 121,304 | 113,087 | 121,476 | 95,893 | |||||||
Finance, insurance and other | 41,374 | 47,291 | 42,001 | 34,867 | 35,742 | 37,882 | 38,365 | 28,675 | |||||||
Revenue | 809,103 | 981,870 | 945,767 | 739,371 | 782,790 | 866,918 | 880,588 | 620,485 | |||||||
New vehicles | 29,570 | 36,755 | 36,645 | 27,527 | 25,861 | 29,150 | 30,648 | 23,473 | |||||||
Used vehicles | 12,676 | 11,731 | 13,936 | 11,112 | 8,637 | 12,955 | 13,173 | 8,562 | |||||||
Parts, service and collision repair | 58,763 | 59,641 | 64,518 | 55,744 | 60,380 | 57,206 | 60,868 | 45,533 | |||||||
Finance, insurance and other | 38,667 | 42,627 | 38,267 | 32,316 | 33,326 | 35,524 | 35,891 | 26,776 | |||||||
Gross Profit | 139,676 | 150,754 | 153,366 | 126,699 | 128,204 | 134,835 | 140,580 | 104,344 | |||||||
Gross profit % | 17.3% | 15.4% | 16.2% | 17.1% | 16.4% | 15.6% | 16.0% | 16.8% | |||||||
Operating expenses 5, 8 | 125,140 | 124,772 | 128,190 | 121,666 | 125,039 | 126,492 | 127,492 | 95,781 | |||||||
Operating expenses as a % of gross profit 5, 9 | 89.6% | 82.8% | 83.6% | 96.0% | 97.5% | 93.8% | 90.7% | 91.8% | |||||||
Operating (loss) profit 5, 8 | (6,597) | 16,695 | 18,905 | 13,471 | (6,569) | (5,260) | (42,719) | 15,906 | |||||||
Impairment (recovery) of non-financial assets 5 | 24,001 | — | 12,574 | — | 23,828 | 19,569 | 58,097 | — | |||||||
Net (loss) income 5, 8 | (16,786) | (4,104) | (3,512) | (2,671) | (36,013) | (15,007) | (39,426) | 5,004 | |||||||
Basic net (loss) income per share attributable to | (0.63) | (0.15) | (0.15) | (0.10) | (1.30) | (0.56) | (1.47) | 0.18 | |||||||
Diluted net (loss) income per share attributable to | (0.63) | (0.15) | (0.15) | (0.10) | (1.30) | (0.56) | (1.47) | 0.18 | |||||||
Dividends declared per share | 0.10 | 0.10 | 0.10 | 0.10 | 0.10 | 0.10 | 0.10 | 0.10 | |||||||
Adjusted EBITDA 2, 5, 6, 7, 8 | 21,065 | 32,489 | 32,100 | 11,549 | 6,268 | 16,185 | 16,814 | 11,406 | |||||||
Free cash flow 2, 5, 6, 9 | 65,825 | 53,527 | (20,719) | 155 | (4,879) | 6,105 | (14,639) | (13,834) | |||||||
Operating Data | |||||||||||||||
New retail vehicles sold 3 | 8,796 | 10,419 | 10,310 | 8,162 | 9,214 | 10,353 | 10,264 | 6,664 | |||||||
New fleet vehicles sold 3 | 840 | 1,849 | 1,794 | 1,064 | 1,117 | 2,121 | 2,242 | 1,476 | |||||||
Total new vehicles sold 3 | 9,636 | 12,268 | 12,104 | 9,226 | 10,331 | 12,474 | 12,506 | 8,140 | |||||||
Used retail vehicles sold 3 | 6,957 | 7,384 | 7,249 | 6,517 | 5,945 | 6,645 | 6,042 | 4,527 | |||||||
Total vehicles sold 3 | 16,593 | 19,652 | 19,353 | 15,743 | 16,276 | 19,119 | 18,548 | 12,667 | |||||||
# of service and collision repair orders completed 3 | 225,595 | 218,523 | 242,134 | 213,672 | 245,682 | 241,103 | 248,167 | 180,429 | |||||||
# of dealerships at year end | 63 | 64 | 65 | 66 | 68 | 68 | 68 | 54 | |||||||
# of same store dealerships 1 | 47 | 47 | 47 | 47 | 47 | 49 | 49 | 49 | |||||||
# of service bays at year end | 1,047 | 1,086 | 1,097 | 1,113 | 1,157 | 1,106 | 1,106 | 906 | |||||||
Same stores revenue growth 1 | 8.7% | 20.4% | 4.7% | (1.6)% | (3.0)% | (3.0)% | (5.1)% | 4.6% | |||||||
Same stores gross profit growth 1 | 11.8% | 13.9% | 6.8% | 1.9% | (3.0)% | (8.5)% | (4.3)% | 1.0% | |||||||
See the Company's Management's Discussion and Analysis for the quarter ended |
The following tables summarize the results for the quarter and year ended
Same Store Revenue and Vehicles Sold
Three Months Ended | Year Ended | ||||||
2019 | 2018 | % Change | 2019 | 2018 | % Change | ||
Revenue source | |||||||
New vehicles - Retail | 305,882 | 276,374 | 10.7% | 1,323,372 | 1,204,648 | 9.9% | |
New vehicles - Fleet | 31,848 | 45,814 | (30.5)% | 205,409 | 260,457 | (21.1)% | |
Total new vehicles | 337,730 | 322,188 | 4.8% | 1,528,781 | 1,465,105 | 4.3% | |
Used vehicles - Retail | 140,980 | 116,082 | 21.4% | 569,120 | 470,197 | 21.0% | |
Used vehicles - Wholesale | 37,896 | 34,694 | 9.2% | 178,255 | 154,829 | 15.1% | |
Total used vehicles | 178,876 | 150,776 | 18.6% | 747,375 | 625,026 | 19.6% | |
Parts, service and collision repair | 97,953 | 97,385 | 0.6% | 385,578 | 375,762 | 2.6% | |
Finance, insurance and other | 33,326 | 25,635 | 30.0% | 137,121 | 116,458 | 17.7% | |
Total | 647,885 | 595,984 | 8.7% | 2,798,855 | 2,582,351 | 8.4% | |
New retail vehicles sold (units) | 6,592 | 6,505 | 1.3% | 28,678 | 28,171 | 1.8% | |
New fleet vehicles sold (units) | 792 | 954 | (17.0)% | 5,098 | 6,134 | (16.9)% | |
Total new vehicles sold (units) | 7,384 | 7,459 | (1.0)% | 33,776 | 34,305 | (1.5)% | |
Used retail vehicles sold (units) | 5,651 | 4,571 | 23.6% | 22,752 | 18,577 | 22.5% | |
Total vehicles sold (units) | 13,035 | 12,030 | 8.4% | 56,528 | 52,882 | 6.9% | |
Total vehicles retailed (units) | 12,243 | 11,076 | 10.5% | 51,430 | 46,748 | 10.0% |
Same Store Gross Profit and Profit Percentage
Three Months Ended | ||||||
Gross Profit | Gross Profit % | |||||
2019 | 2018 | % Change | 2019 | 2018 | ||
Revenue source | ||||||
New vehicles - retail | 21,926 | 22,020 | (0.4)% | 7.2% | 8.0% | |
New vehicles - fleet | 961 | 990 | (2.9)% | 3.0% | 2.2% | |
Total new vehicles | 22,887 | 23,010 | (0.5)% | 6.8% | 7.1% | |
Used vehicles - retail | 11,497 | 7,413 | 55.1% | 8.2% | 6.4% | |
Used vehicles - wholesale | (124) | 560 | (122.2)% | (0.3)% | 1.6% | |
Total used vehicles | 11,373 | 7,973 | 42.6% | 6.4% | 5.3% | |
Parts, service and collision repair | 49,324 | 47,268 | 4.3% | 50.4% | 48.5% | |
Finance, insurance and other | 30,750 | 24,017 | 28.0% | 92.3% | 93.7% | |
Total | 114,334 | 102,268 | 11.8% | 17.6% | 17.2% |
MD&A and Financial Statements
Information included in this press release is a summary of results. It should be read in conjunction with
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: Adjusted EBITDA; Free Cash Flow; Average Capital Employed; Return on Capital Employed; Net Indebtedness and Lease Adjusted Leverage Ratio.
Conference Call
A conference call to discuss the results for the quarter and year ended
This conference call will also be webcast live over the internet and can be accessed by all interested parties at the following URL: https://www.autocan.ca/investors/Q42019/.
About
Additional information about
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 document.
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.
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