- Revenue was
$1,623.9 million as compared to$1,206.8 million in the prior year, an increase of 34.6% - Net income for the period was
$32.9 million versus net income of$38.8 million in the prior year - Adjusted EBITDA1 was
$76.4 million versus$68.3 million in the prior year, an increase of 11.9% - Adjusted EBITDA margin1 was 4.7% versus the adjusted EBITDA margin1 of 5.7% in the prior year, a decrease of (1.0) percentage points
- Diluted earnings per share was
$1.16 , a decrease of$(0.11) from$1.27 in the prior year - Indebtedness of
$460.3 million at the end of Q3 2022 compares to$375.0 million at the end of Q2 2022 - Net indebtedness1 of
$350.8 million at the end of Q3 2022 compares to$294.1 million at the end of Q2 2022
"Results achieved in the third quarter of 2022 demonstrate the ongoing strength of our business model, where our team once again delivered a record quarter with exceptional performance across our operations," said
"This strength has allowed us to focus on advancing our acquisition strategy as evidenced with the recent acquisitions of Kelleher Ford Dealership and Collision Centre, Velocity
"As we look ahead,
The Company also announced today the planned retirement of
"On behalf of all of us at
"I would like to thank the outstanding team at
Third Quarter Key Highlights and Recent Developments
The Company set a third quarter record as revenue reached
Net income for the period was
Adjusted EBITDA1 for the period was
Gross profit increased by
Our
Operating expenses before depreciation as a percentage of gross profit2 increased by 3.3 ppts to 71.1%. The increase is largely due to increased M&A activity and related costs, inclusive of the expansion of an acquisition and integration team, and increased head count to facilitate organizational growth.
Floorplan financing costs increased by
We continue to actively manage our vehicle inventory as the chip shortage remains an issue and continues to impact the supply of new vehicle inventory. While we have seen positive indicators and noted gradual improvements in both the availability of inventory and product allocations, we are not anticipating a return to "normalcy" in inventory levels until late 2023 to 2024. Compensating for constrained new vehicle supply, we have managed our used vehicle inventory position to meet current market demands. As a result of the incremental used vehicle writedown taken in Q2 2022, we were able to more effectively sell through our used vehicle inventory position by (15.7)%, as compared to Q2 2022. No incremental used vehicle writedown to net realizable value was recognized in Q3 2022.
Net indebtedness1 increased by
Had all of the acquisitions, completed as of Q3 2022, occurred at
We have established an acquisition pipeline, with dealerships and collision centres representing in excess of
Our performance, both in
Consolidated AutoCanada Highlights
ANOTHER RECORD SETTING THIRD QUARTER
For the three-month period ended
- Revenue was
$1,623.9 million , an increase of$417.2 million or 34.6% - Total vehicles2 sold were 27,000, an increase of 3,556 units or 15.2%
- Used retail vehicles2 sold increased by 3,550 or 25.7%
- Net income for the period was
$32.9 million (or$1.16 per diluted share) versus$38.8 million (or$1.27 per diluted share) - Adjusted EBITDA1 increased by 11.9% to
$76.4 million , an increase of$8.1 million - Adjusted EBITDA1 on a TTM basis was
$280.0 million as compared to 226.5 million in the prior year - Net indebtedness1 of
$350.8 million reflected an increase of$56.8 million from Q2 2022 - Net indebtedness leverage ratio1 of 1.5x at the end of Q3 2022, as compared to 1.3x in Q2 2022
Refer to Section 5 Acquisitions, Divestitures, Relocations and Real Estate of the MD&A for acquisitions included in Q3 2022 results.
Canadian Operations Highlights
TOTAL GROSS PROFIT INCREASED BY 24%
Our F&I and PS&CR segments were key drivers of the record performance in Q3 2022. F&I gross profit increased by
Unless stated otherwise, all results for acquired businesses are included in all Canadian references in the press release.
For the three-month period ended
- Revenue was
$1,388.0 million , an increase of 36.3% - Used retail unit2 sales increased by 3,030 or 26.4%
- Average TTM Canadian used retail unit sales per dealership per month, excluding Used Digital Retail Division dealerships2, improved to 61, as compared to 59 in the prior year
- Used to new retail units ratio2 increased to 1.84 from 1.48
- According to
DesRosiers Automotive Consultants ("DesRosiers"), our performance places us well ahead of our peers as historical Canadian market used to new retail unit ratio was 0.68 in 2021 - TTM used to new retail ratio2 improved to 1.63 at Q3 2022 as compared to 1.30 at Q3 2021
- F&I gross profit per retail unit average2 increased to
$3,431 , up 14.1% or$425 per unit - Net income for the period was
$30.3 million , down (10.5)% from a net income of$33.8 million in 2021 - Adjusted EBITDA1 increased by 11.1% to
$67.6 million , an increase of$6.7 million - Adjusted EBITDA margin1 was 4.9% as compared to adjusted EBITDA margin1 of 6.0% in the prior year, a decrease of (1.1) ppts driven primarily by compressed used vehicle gross profit percentage, increased operating expenses before depreciation as a percentage of gross profit, and increased floorplan financing costs
USED RETAIL VEHICLES SOLD INCREASED BY 22%
- Revenue was
$235.9 million , an increase of 25.3%, from$188.3 million - Used retail vehicles2 sold increased by 520 units or 22.2%
- F&I gross profit per retail unit average2 increased to
$4,009 per unit, up 35.0% or$1,038 per unit - Net income for the period decreased by
$(2.3) million to$2.6 million from$4.9 million - Net income on a TTM basis was
$22.2 million as compared to$8.9 million in the prior year - Adjusted EBITDA1 was
$8.8 million as compared to$7.4 million , an increase of$1.4 million - Adjusted EBITDA1 on a TTM basis was
$38.5 million as compared to$21.7 million in the prior year
Same Store Metrics - Canadian Operations
F&I GROSS PROFIT PER RETAIL UNIT AVERAGE INCREASED TO
The continued optimization of the Company's complete business model is highlighted by the year-over-year 8.7% improvement in gross profit, which collectively totaled
Refer to Section 19 Same Store Results Data of the MD&A for the definition of same store and further information.
- Revenue increased to
$1,147.9 million , an increase of 17.6% - Gross profit increased by
$15.7 million or 8.7% - Used to new retail units ratio2 increased to 1.75 from 1.29
- Used retail unit sales2 increased by 12.0%, an increase of 1,202 units
- F&I gross profit per retail unit average2 increased to
$3,796 , up 20.9% or$657 per unit; F&I gross profit increased to$66.9 million as compared to$55.9 million in the prior year, an increase of 19.8% - PS&CR gross profit increased to
$60.6 million , an increase of 11.3% - PS&CR gross profit percentage2 decreased to 55.1% as compared to 55.7% in the prior year
Financing and Investing Activities and Other Recent Developments
ACQUISITION PIPELINE SUPPORTED BY HEALTHY BALANCE SHEET AND LIQUIDITY STRUCTURE
Net indebtedness1 of
Acquisitions
The Company completed
- On
August 2, 2022 , the Company acquired 100% of the shares of Kelleher Ford Dealership and Collision Centre ("Kelleher Ford"), a new and used vehicle Ford dealership and collision centre inBrandon, Manitoba . - On
August 12, 2022 , the Company acquired 100% of the shares ofVelocity Auto Body Inc. ("Velocity Autobody"), a luxury-brand focused collision centre inMarkham, Ontario . - On
September 22, 2022 , the Company acquired 100% of the shares ofAuto Gallery ofWinnipeg Inc. ("Auto Gallery ofWinnipeg "), an independent used vehicle dealership inWinnipeg, Manitoba . - On
September 28, 2022 , the Company acquired 100% of the shares of Northern Auto Auctions ofCanada Inc. ("North Toronto Auction"), an entity that operates the North Toronto Auction, a fee-based used vehicle auction business, serving dealers and consumers, located inInnisfil, Ontario . - On
October 27, 2022 , the Company acquired 100% of the shares ofKavia Auto Body Inc. ("Kavia Auto Body"), a collision centre located inSaskatoon, Saskatchewan . - On
November 4, 2022 , the Company acquired 100% of the shares ofExcellence Auto Collision Limited ("Excellence Auto Collision"), two collision centres located inScarborough, Ontario andToronto, Ontario .
Share Purchases
- On
August 15, 2022 , the Company completed a SIB, by way of a modified Dutch auction, to purchase, for cancellation, the common shares of the Company (the "Shares", or, the "Offer"). The Company purchased and cancelled 1,159,707 Shares at a purchase price of$28.00 per share under the Offer, representing an aggregate purchase price$32.5 million , which represents 4.37% of the total issued and outstanding Shares of the Company before giving effect to the Offer. - On
November 9, 2022 , the Company announced a SIB offer to purchase, for cancellation, up to$50 million in value of its outstanding common shares at a price range of$25 to$28 per share. The offer is set to expire onDecember 16, 2022 .
Third Quarter Financial Information
The following table summarizes the Company's performance for the quarter:
Three Months Ended | |||
Consolidated Operational Data | 2022 | 2021 | % Change |
Revenue | 1,623,949 | 1,206,754 | 34.6 % |
Gross profit | 273,634 | 220,192 | 24.3 % |
Gross profit % | 16.8 % | 18.2 % | (1.4) % |
Operating expenses | 207,266 | 159,880 | 29.6 % |
Operating profit | 69,303 | 62,841 | 10.3 % |
Net income for the period | 32,870 | 38,769 | (15.2) % |
Basic net income per share attributable to | 1.22 | 1.37 | (10.9) % |
Diluted net income per share attributable to | 1.16 | 1.27 | (8.7) % |
Adjusted EBITDA1 | 76,374 | 68,265 | 11.9 % |
Basic weighted average number of shares outstanding | 25,876,198 | 27,483,596 | (5.8) % |
Diluted weighted average number of shares outstanding | 27,177,819 | 29,599,494 | (8.2) % |
Common shares outstanding as at quarter-end date | 25,402,988 | 27,493,016 | (7.6) % |
New retail vehicles2 sold (units) | 9,186 | 9,255 | (0.7) % |
New fleet vehicles2 sold (units) | 433 | 358 | 20.9 % |
Total new vehicles2 sold (units) | 9,619 | 9,613 | 0.1 % |
Used retail vehicles2 sold (units) | 17,381 | 13,831 | 25.7 % |
Total vehicles2 sold | 27,000 | 23,444 | 15.2 % |
Same store new retail vehicles2 sold (units) | 6,400 | 7,771 | (17.6) % |
Same store new fleet vehicles2 sold (units) | 386 | 358 | 7.8 % |
Same store used retail vehicles2 sold (units) | 11,228 | 10,026 | 12.0 % |
Same store total vehicles2 sold | 18,014 | 18,155 | (0.8) % |
Same store2 revenue | 1,147,921 | 976,454 | 17.6 % |
Same store2 gross profit | 197,003 | 181,291 | 8.7 % |
Same store2 gross profit % | 17.2 % | 18.6 % | (1.4) % |
1 | See "NON-GAAP AND OTHER FINANCIAL MEASURES" below. |
2 | This press release contains "SUPPLEMENTARY FINANCIAL MEASURES". Section 15. NON-GAAP AND OTHER FINANCIAL MEASURES of the Company's Management's Discussion & Analysis for the three month period 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.
MD&A | Q3 2022 | Q2 2022 | Q1 2022 | Q4 2021 | Q3 2021 REVISED | Q2 2021 REVISED | Q1 2021 REVISED | Q4 | |
Income Statement Data | 4 | ||||||||
New vehicles 4 | 6 | 557,492 | 583,870 | 511,195 | 467,085 | 498,142 | 547,593 | 451,061 | 466,468 |
Used vehicles 4 | 6 | 807,236 | 840,998 | 595,514 | 524,043 | 518,791 | 539,785 | 354,922 | 257,301 |
Parts, service and collision repair 4 | 6 | 161,805 | 160,307 | 152,009 | 136,800 | 116,953 | 122,459 | 108,427 | 105,362 |
Finance, insurance and other 4 | 6 | 97,416 | 100,851 | 83,720 | 67,854 | 72,868 | 71,218 | 55,414 | 46,990 |
Revenue | 1,623,949 | 1,686,026 | 1,342,438 | 1,195,782 | 1,206,754 | 1,281,055 | 969,824 | 876,121 | |
New vehicles 4 | 6 | 58,760 | 58,950 | 53,384 | 50,632 | 46,525 | 44,619 | 34,639 | 31,199 |
Used vehicles 4 | 6 | 32,627 | 34,125 | 36,772 | 38,118 | 39,669 | 40,269 | 23,206 | 19,787 |
Parts, service and collision repair 4 | 6 | 88,707 | 90,713 | 78,431 | 75,917 | 64,748 | 68,115 | 57,874 | 58,109 |
Finance, insurance and other 4 | 6 | 93,540 | 95,490 | 78,752 | 63,847 | 69,250 | 64,838 | 51,917 | 43,642 |
Gross Profit | 273,634 | 279,278 | 247,339 | 228,514 | 220,192 | 217,841 | 167,636 | 152,737 | |
Gross profit % | 16.8 % | 16.6 % | 18.4 % | 19.1 % | 18.2 % | 17.0 % | 17.3 % | 17.4 % | |
Operating expenses | 207,266 | 212,709 | 193,646 | 170,008 | 159,880 | 154,773 | 127,948 | 119,442 | |
Operating expenses as a % of gross profit | 75.7 % | 76.2 % | 78.3 % | 74.4 % | 72.6 % | 71.0 % | 76.3 % | 78.2 % | |
Operating profit | 69,303 | 69,954 | 56,690 | 99,410 | 62,841 | 66,153 | 41,664 | 46,664 | |
Recovery of non-financial assets | — | — | — | (39,846) | — | — | — | (11,248) | |
Net income | 32,870 | 39,058 | 4,322 | 69,398 | 38,769 | 37,698 | 21,334 | 24,320 | |
Basic net income per share attributable to | 1.22 | 1.40 | 0.11 | 2.54 | 1.37 | 1.33 | 0.77 | 0.87 | |
Diluted net income per share attributable to | 1.16 | 1.33 | 0.10 | 2.38 | 1.27 | 1.23 | 0.71 | 0.81 | |
Dividends declared per share | — | — | — | — | — | — | — | — | |
Adjusted EBITDA 1 | 2 | 76,374 | 75,561 | 62,196 | 65,873 | 68,265 | 70,491 | 47,234 | 40,472 |
Free cash flow 1 | 2 | 35,319 | 63,318 | 5,852 | 7,603 | 12,372 | 67,803 | 19,391 | 19,240 |
Operating Data | 4 | ||||||||
New retail vehicles2 sold | 3 | 9,186 | 9,878 | 9,052 | 8,204 | 9,255 | 10,107 | 8,233 | 8,623 |
New fleet vehicles2 sold | 3 | 433 | 497 | 290 | 199 | 358 | 575 | 740 | 964 |
Total new vehicles2 sold | 3 | 9,619 | 10,375 | 9,342 | 8,403 | 9,613 | 10,682 | 8,973 | 9,587 |
Used retail vehicles2 sold | 3 | 17,381 | 17,740 | 14,072 | 11,893 | 13,831 | 13,271 | 9,734 | 7,389 |
Total vehicles2 sold | 3 | 27,000 | 28,115 | 23,414 | 20,296 | 23,444 | 23,953 | 18,707 | 16,976 |
# of service and collision repair orders2 completed | 3 | 241,907 | 261,671 | 221,632 | 232,373 | 199,870 | 214,149 | 182,869 | 203,086 |
# of dealerships at period end | 5 | 85 | 82 | 80 | 80 | 68 | 67 | 67 | 67 |
# of same store dealerships | 1 | 49 | 49 | 49 | 49 | 49 | 49 | 49 | 47 |
# of service bays at period end | 1,331 | 1,322 | 1,293 | 1,303 | 1,108 | 1,098 | 1,098 | 1,098 | |
Same stores2 revenue growth | 1 | 17.6 % | 14.2 % | 17.2 % | 14.1 % | 15.0 % | 54.2 % | 27.8 % | 6.3 % |
Same stores2 gross profit growth | 1 | 8.7 % | 10.3 % | 23.2 % | 29.4 % | 18.6 % | 102.5 % | 35.0 % | 7.7 % |
1 | See "NON-GAAP AND OTHER FINANCIAL MEASURES" below. |
2 | This press release contains "SUPPLEMENTARY FINANCIAL MEASURES". Section 15. NON-GAAP AND OTHER FINANCIAL MEASURES of the Company's Management's Discussion & Analysis for the three month period ended |
3 | See the Company's MD&A for the quarter ended |
4 | In Q4 2021, it was determined there were Revenues and Cost of sales accounts incorrectly classified between revenue streams in the first three quarters of 2021 within the |
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 AND OTHER FINANCIAL 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, 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, adjusted EBITDA margin, normalized adjusted EBITDA, income statement impacts and adjusted EBITDA on a pre-IFRS 16 basis, pro forma adjusted EBITDA, pro forma net income, pro forma normalized adjusted EBITDA, free cash flow, net indebtedness, and net indebtedness leverage ratio 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 referenced non-GAAP measures may differ from the methods used by other issuers. Therefore, these measures may not be comparable to similar measures presented by other issuers.
It should be noted that certain of the financial measures described below include pro forma items estimating the impact of the acquisitions if they had occurred on the first day of the relevant period, or as of a specified date. Readers should understand that these estimates were determined by management in good faith and are not indicative of what the historical results of the businesses acquired in the acquisitions actually were for the relevant period, or what those results would have been if the acquisitions had occurred on the dates indicated, or what they will be for any future period. As a result, the pro forma financial measures may not be indicative of the Company's financial position that would have prevailed, or operating results that would have been obtained, if the transactions had taken place on the dates indicated or of the financial position or operating results which may be obtained in the future. These pro forma financial measures are not a forecast or projection of future results. The actual financial position and results of operations of the Company for any period following the closing of the acquisitions will vary from the amounts set forth following pro forma financial measures, and such variation may be material.
We list and define these "NON-GAAP MEASURES" below:
Adjusted EBITDA
Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) is an indicator of a company's operating performance over a period of time and ability to incur and service debt. Adjusted EBITDA provides an indication of the results generated by our principal business activities prior to:
- Interest expense (other than interest expense on floorplan financing), income taxes, depreciation, and amortization;
- Charges that introduce volatility unrelated to operating performance by virtue of the impact of external factors (such as share-based compensation amounts attributed to certain equity issuances as a part of the Used Digital Retail Division);
- Non-cash charges (such as impairment, recoveries, gains or losses on free-standing derivatives, revaluation of contingent consideration and revaluation of redemption liabilities);
- Charges outside the normal course of business (such as restructuring, gains and losses on dealership divestitures and real estate transactions); and
- Charges that are non-recurring in nature (such as provisions for wholesale fraud and settlement income).
The Company believes adjusted EBITDA provides improved continuity with respect to the comparison of our operating performance over a period of time.
Normalized Adjusted EBITDA
With the onset of COVID-19 during the second quarter of 2020, the impact of COVID-19 related government restrictions resulted in charges that are one-time in nature, and related government programs resulted in subsidies that are non-recurring in the future.
Normalized adjusted EBITDA is an indicator of a company's operating performance over a period of time and ability to incur and service debt, normalized for charges that are non-recurring in nature related to the pandemic such as:
Canada Emergency Wage Subsidy ("CEWS") income expected to recur until the Company is no longer eligible for the subsidy;Canada Emergency Rent Subsidy ("CERS") expected to recur until the Company is no longer eligible for the subsidy; and- One-time forgiveness of Small Business Association PPP loans.
The Company believes normalized adjusted EBITDA provides improved continuity with respect to the comparison of our operating performance normalized for impacts related to the COVID-19 pandemic. Refer to the COVID-19 impacts section of Note 4 of the Interim Consolidated Financial Statements for the nine-months ended
Pro Forma Adjusted EBITDA and Pro Forma Normalized Adjusted EBITDA
The Company believes pro forma adjusted EBITDA and pro forma normalized adjusted EBITDA provides improved understanding of the progress of our acquisition strategy as if the acquisitions had occurred at the beginning of the period. Pro forma adjusted EBITDA and pro forma normalized adjusted EBITDA includes management's estimate of the net income generated by our acquisitions prior to interest expense (other than interest expense on floorplan financing), income taxes, depreciation, and amortization, assuming acquisitions in the year had occurred on the first day of the 12 month period ended
Refer to the Company's Management Discussion & Analysis for the year ended
Pro Forma Net Income
The Company believes pro forma net income provides improved understanding of the progress of our acquisition strategy as if the acquisitions had occurred at the beginning of the period. Pro forma net income includes management's estimate of the net income generated by our acquisitions, assuming acquisitions in the year had occurred on the first day of the 12 month period ended
Adjusted EBITDA Margin
Adjusted EBITDA margin is an indicator of a company's operating performance specifically in relation to our revenue performance.
The Company believes adjusted EBITDA margin provides improved continuity with respect to the comparison of our operating performance with retaining and growing profitability as our revenue and scale increases over a period of time.
Income Statement Impacts and Adjusted EBITDA on a Pre-IFRS 16 basis
The Company adopted IFRS 16 on
The Company believes adjusted EBITDA on a pre-IFRS 16 basis provides improved continuity for purposes of comparing to our historical operating performance prior to fiscal year 2019. Our Credit Facility financial covenants are calculated and presented on a pre-IFRS 16 basis. In addition, the net indebtedness leverage ratio is calculated on a pre-IFRS 16 basis.
Adjusted EBITDA on a pre-IFRS 16 basis is calculated as adjusted EBITDA less the rental expense, fair market value rent adjustment, and step lease rent adjustment eliminated from the adoption of IFRS 16 lease liabilities accounting standards.
Free Cash Flow
Free cash flow is a measure used by Management to evaluate the Company's 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 such purposes. 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 expenditure (not including acquisitions of dealerships and dealership facilities).
Net Indebtedness Leverage Ratio
Net indebtedness leverage ratio is a measure used by management to evaluate the liquidity of the Company.
The Company believes presenting the net indebtedness leverage ratio on a pre-IFRS 16 basis provides improved continuity for purposes of comparing to our historical operating performance prior to fiscal year 2019 and remains relevant while our Credit Facility financial covenants continues to be calculated and presented on a pre-IFRS 16 basis. Net indebtedness leverage ratio is calculated as net indebtedness compared to Adjusted EBITDA pre-IFRS 16 on a TTM basis.
We list and define "CAPITAL MANAGEMENT MEASURES" below:
Net Indebtedness
Net indebtedness is used by management to evaluate the liquidity of the Company.
Net indebtedness is calculated as indebtedness, net of unamortized deferred financing costs, adding back embedded derivative asset, and less cash and cash equivalents.
NON-GAAP AND OTHER FINANCIAL MEASURES RECONCILIATIONS
Adjusted EBITDA and Normalized Adjusted EBITDA
The following table illustrates adjusted EBITDA and normalized adjusted EBITDA, for the three-month period ended
2022 | 2021 | |
Period from | ||
Net income for the period | 32,870 | 38,769 |
Add back: | ||
Income tax expense | 13,608 | 8,406 |
Depreciation of property and equipment | 5,371 | 4,121 |
Interest on long-term indebtedness | 7,436 | 5,591 |
Depreciation of right of use assets | 7,463 | 6,464 |
Lease liability interest | 7,227 | 5,487 |
73,975 | 68,838 | |
Add back: | ||
Unrealized fair value changes in derivative instruments | 1,152 | (2,151) |
Amortization of loss on terminated hedges | 817 | 817 |
Unrealized foreign exchange gains | (121) | (265) |
Loss on termination of lease, net | — | 919 |
Unrealized fair value changes on embedded derivative | — | 116 |
Loss (gain) on disposal of assets | 551 | (9) |
Adjusted EBITDA | 76,374 | 68,265 |
Normalized Adjusted EBITDA | 76,374 | 68,265 |
Segmented Adjusted EBITDA and Segmented Normalized Adjusted EBITDA
The following table illustrates the segmented adjusted EBITDA and normalized adjusted EBITDA, for the three-month period ended
Three Months Ended | Three Months Ended | ||||||
Total | Total | ||||||
Period from | |||||||
Net income for the period | 30,288 | 2,582 | 32,870 | 33,839 | 4,930 | 38,769 | |
Add back: | |||||||
Income tax expense | 10,941 | 2,667 | 13,608 | 8,406 | — | 8,406 | |
Depreciation of property and equipment | 4,958 | 413 | 5,371 | 3,811 | 310 | 4,121 | |
Interest on long-term indebtedness | 5,887 | 1,549 | 7,436 | 4,979 | 612 | 5,591 | |
Depreciation of right of use assets | 6,758 | 705 | 7,463 | 5,767 | 697 | 6,464 | |
Lease liability interest | 6,344 | 883 | 7,227 | 4,618 | 869 | 5,487 | |
65,176 | 8,799 | 73,975 | 61,420 | 7,418 | 68,838 | ||
Add back: | |||||||
Unrealized fair value changes in derivative instruments | 1,152 | — | 1,152 | (2,151) | — | (2,151) | |
Amortization of loss on terminated hedges | 817 | — | 817 | 817 | — | 817 | |
Unrealized foreign exchange gains | (121) | — | (121) | (265) | — | (265) | |
Loss on termination of lease, net | — | — | — | 919 | — | 919 | |
Unrealized fair value changes on embedded derivative | — | — | — | 116 | — | 116 | |
Loss (gain) on disposal of assets | 551 | — | 551 | (9) | — | (9) | |
Adjusted EBITDA | 67,575 | 8,799 | 76,374 | 60,847 | 7,418 | 68,265 | |
Normalized Adjusted EBITDA | 67,575 | 8,799 | 76,374 | 60,847 | 7,418 | 68,265 |
Pro Forma Adjusted EBITDA and Pro Forma Normalized Adjusted EBITDA Reconciliation
The following table illustrates pro forma adjusted EBITDA and pro forma normalized adjusted EBITDA for the trailing twelve month period ended
2022 | 2021 | |
Period from | ||
Net income for the period | 145,648 | 122,121 |
Add back: | ||
Income tax expense | 47,293 | 37,588 |
Depreciation of property and equipment | 20,018 | 17,265 |
Interest on long-term indebtedness | 27,365 | 19,703 |
Depreciation of right of use assets | 29,920 | 24,992 |
Lease liability interest | 28,065 | 21,798 |
298,309 | 243,467 | |
Add back: | ||
Recoveries of non-financial assets, net | (39,846) | (11,248) |
Share-based compensation (Used Digital Retail Division) | — | 435 |
Loss (gain) on redemption liabilities | 14,116 | (2,108) |
Loss on extinguishment of debt | 9,860 | 1,128 |
Unrealized fair value changes in derivative instruments | (9,678) | (5,861) |
Amortization of loss on terminated hedges | 3,268 | 3,268 |
Unrealized foreign exchange (gains) losses | (280) | 532 |
Loss on extinguishment of embedded derivative | 29,306 | — |
(Gain) loss on termination of lease, net | (492) | 919 |
Unrealized fair value changes on embedded derivative | (24,778) | (4,528) |
Loss on disposal of assets | 219 | 458 |
Adjusted EBITDA | 280,004 | 226,462 |
Normalizing items: | ||
Add back: | ||
Inventory write-down | — | 1,841 |
One-time employee recognition payments | — | 309 |
Operational incentive payments | — | 851 |
Less: | ||
— | (7,177) | |
— | (536) | |
Forgiveness of PPP loans | — | (6,728) |
Normalized Adjusted EBITDA | 280,004 | 215,022 |
Pro forma items had the acquisitions occurred on | ||
Net income for the period | 1,103 | 3,585 |
Add back: | ||
Income tax expense | 378 | 1,227 |
Depreciation of property and equipment | 820 | 1,011 |
Interest on long-term indebtedness | 4,907 | 4,604 |
Depreciation of right of use assets | 1,029 | 1,945 |
Lease liability interest | 1,670 | 3,050 |
Pro Forma Adjusted EBITDA | 289,911 | 241,884 |
Pro Forma Normalized Adjusted EBITDA | 289,911 | 230,444 |
Pro Forma Net Income | 146,751 | 125,706 |
Quarter-to-Date Adjusted EBITDA Margin
The following table illustrates adjusted EBITDA margin for the three-month periods ended
2022 | 2021 | |
Period from | ||
Adjusted EBITDA | 76,374 | 68,265 |
Revenue | 1,623,949 | 1,206,754 |
Adjusted EBITDA Margin | 4.7 % | 5.7 % |
Free Cash Flow
The following table illustrates free cash flow for the last eight consecutive quarters.
Q3 2022 | Q2 2022 | Q1 2022 | Q4 2021 | Q3 2021 | Q2 2021 | Q1 2021 | Q4 2020 | |
Cash provided by operating activities | 37,662 | 64,935 | 7,279 | 10,153 | 13,721 | 68,604 | 20,506 | 20,447 |
Deduct: | ||||||||
Purchase of non-growth property and equipment | (2,343) | (1,617) | (1,427) | (2,550) | (1,349) | (801) | (1,115) | (1,207) |
Free cash flow | 35,319 | 63,318 | 5,852 | 7,603 | 12,372 | 67,803 | 19,391 | 19,240 |
Free cash flow - TTM | 112,092 | 89,145 | 93,630 | 107,169 | 118,806 | 159,878 | 144,632 | 131,396 |
Net Indebtedness and Net Indebtedness Leverage Ratio Reconciliation
The following table illustrates the Company's net indebtedness and net indebtedness leverage ratio as at
$ | $ | |
Syndicated Credit Facility - revolving credit | 83,615 | 63,842 |
Senior unsecured notes (including embedded derivative asset) | 344,277 | 221,965 |
Non-recourse mortgages and other debt | 32,426 | 101 |
Total indebtedness | 460,318 | 285,908 |
Add back: | ||
Embedded derivative asset | — | 29,306 |
Total indebtedness for net indebtedness purpose | 460,318 | 315,214 |
Cash and cash equivalents | (109,478) | (102,480) |
Net indebtedness | 350,840 | 212,734 |
Adjusted EBITDA - pre-IFRS 16 - trailing twelve months | 227,852 | 206,584 |
Net indebtedness leverage ratio | 1.5x | 1.0x |
Conference Call
A conference call to discuss the results for the three months 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://investors.autocan.ca/event/2022-q3-conference-call/
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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 press release.
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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