- Revenue was
$1,281.1 million as compared to$727.4 million in the prior year, an increase of 76.1% and the highest second quarter revenue reported in the Company's history - Net income (loss) for the period was
$37.7 million versus$(20.1) million in 2020 - Adjusted EBITDA was
$70.5 million versus$4.8 million in the prior year, an increase of 1,360%; pre-IFRS 16 Adjusted EBITDA was$59.6 million versus$(5.4) million , an increase of 1,210%; on a trailing twelve month basis, pre-IFRS 16 Adjusted EBITDA was$176.4 million - Fully diluted earnings per share was
$1.23 , an increase of$1.95 from$(0.72) in the prior year - Net indebtedness of
$21.6 million at the end of Q2 2021 compares to$72.6 million at the end of Q1 2021; trailing twelve month free cash flow of$159.9 million compares to$179.3 million in the prior year and net debt leverage on a pre-IFRS 16 basis improves to 0.1x from 0.7x at the end of Q1 2021
"We delivered another record-setting performance in Q2 2021, continuing the trend of sustainable improvement and execution of our complete business model and strategic initiatives," said
"For our
"With a robust acquisition pipeline of dealerships and collision centers representing over
"We are well positioned to continue to deliver sustainable improvements and build on our positive momentum in a way that carries us through this year and beyond."
Second Quarter Key Highlights and Recent Developments
All comparisons presented below are between the three-month period ended
The Company reported record-setting performance as revenue for the second quarter of 2021 reached
Net income (loss) for the period was
Adjusted EBITDA was
Captured within second quarter Adjusted EBITDA of
Excluding these typically non-recurring items, normalized Adjusted EBITDA was
Total gross profit increased by 123% to
In the
Similar to Q1 2021, proactive inventory management for both new and used vehicles continued to be a key driver to the Company's success in delivering both strong revenue and margin growth across all our business operations in the second quarter. Consolidated used vehicle gross profit margin increased by 6.0 percentage points ("ppts") to 8.0% as compared to the prior year. Normalizing for the COVID-19 related used inventory write-down recognized in Q2 2020, used vehicle gross profit margin increased to 8.0% as compared to 4.4% in Q2 2020.
Operating expenses as a percentage of gross profit decreased by (31.0) ppts to 71.0%, as compared to prior year. Normalized operating expenses as a percentage of gross profit improved to 72.4% as compared to 87.2% in the prior year, and is well below the five-year second quarter historical average of 87.0%. The Company's ability to control and rationalize costs underscores the effectiveness of the actions taken during 2020 to streamline the Company's cost structure while optimizing operating leverage.
Net indebtedness improved by
The Company remains well-positioned to execute on its acquisition strategy in the coming quarters. We have established a substantial transaction pipeline with a number of dealerships currently being evaluated. We currently have
Our performance, both in
Consolidated AutoCanada Highlights
RECORD SETTING SECOND QUARTER
As a result of the continued execution of our complete business model, along with the improvement in market outlook and demand during Q2 2021,
For the three-month period ended
- Revenue was
$1,281.1 million , an increase of$553.6 million or 76.1% and the highest second quarter revenue reported in the Company's history - Total vehicles sold were 23,953, an increase of 8,859 units or 58.7%
- Used retail vehicles sold increased by 6,043 or 83.6%
- Net income (loss) for the period was
$37.7 million (or$1.33 per basic share) versus$(20.1) million (or$(0.72) per basic share) in 2020 - Adjusted EBITDA increased by 1,360% to
$70.5 million , an increase of$65.7 million - Adjusting for COVID-19 related typically non-recurring items of
$3.0 million in Q2 2021 and$(17.0) million in Q2 2020, normalized Adjusted EBITDA was$67.5 million , ahead of prior year by$45.7 million ; normalized pre-IFRS 16 Adjusted EBITDA was$56.6 million , as compared to$11.7 million - Ending net indebtedness of
$21.6 million reflected a decrease of$(51.0) million from Q1 2021, driven primarily by the strength of our operating performance. Free cash flow on a TTM basis was$159.9 million at Q2 2021 as compared to$179.3 million in Q2 2020.
Canadian Operations Highlights
RETAIL UNIT SALES GROWTH OF 47.4%
Our used vehicle and F&I segments were key drivers of improved earnings in Q2 2021. Normalizing for COVID-19 related inventory write-downs taken in Q2 2020, total gross profit percentage increased to 17.3% as compared to 15.8% in the prior year and used vehicle gross profit percentage increased to 7.7% as compared to 3.8% in the prior year. For the eleventh consecutive quarter of year-over-year growth, same store F&I gross profit per retail unit average increased to
Current period results include the acquisitions of
For the three-month period ended
- Revenue was
$1,089.5 million , an increase of 66.0%; the highest second quarter Canadian revenue reported in the Company's history and the first time Canadian revenue has exceeded$1 billion in a single quarter. - Total retail vehicles sold were 19,237, an increase of 6,184 units or 47.4%
- Used retail unit sales increased by 4,939 or 75.6%
- Average trailing twelve month Canadian used retail unit sales per dealership per month, excluding
Haldimand Motors , reached 57, as compared to 42 in the prior year - Used to new retail units ratio increased to 1.48 from 1.00
- Trailing twelve month ratio improved to 1.13 at Q2 2021 as compared to 0.88 at Q2 2020
- Finance and insurance gross profit per retail unit average increased to
$2,858 , up 8.0% or$212 per unit - Net income for the period was
$33.0 million , up$46.7 million from a net loss of$(13.7) million in 2020 - Adjusted EBITDA increased 637% to
$61.5 million , an increase of$53.2 million - Adjusting for COVID-19 related, typically non-recurring items, normalized Adjusted EBITDA decreases to
$59.9 million , ahead of prior year by$38.9 million ; normalized pre-IFRS 16 Adjusted EBITDA was$49.9 million , as compared to$11.8 million - Normalized Canadian Adjusted EBITDA margin was 5.5% as compared to 3.2% in the prior year, an increase of 2.3 ppts
RETAIL UNIT SALES GROWTH OF 143%
The
Current period results include the acquisition of
- Revenue was
$191.6 million , an increase of 170% - Retail unit sales increased to 4,141 units, up 2,440 units or 143%
- Net income (loss) for the period increased by
$11.1 million to$4.7 million from$(6.4) million in 2020 - Adjusted EBITDA was
$9.0 million , an increase of$12.5 million from 2020 - Adjusting for COVID-19 related typically non-recurring items, normalized Adjusted EBITDA increases to
$7.7 million , an increase of$6.7 million from prior year normalized Adjusted EBITDA of$0.9 million ; normalized pre-IFRS 16 Adjusted EBITDA was$6.7 million , as compared to$(0.1) million
Same Store Metrics - Canadian Operations
SAME STORE USED RETAIL UNIT SALES GROWTH OF 61.7%
Same store new and used retail unit sales increased by 40.5% to 18,362 units; new retail units increased by 19.1% and used retail units increased by 61.7%. The continued optimization of the Company's complete business model is highlighted by the year-over-year improvement in gross profit across every business segment which collectively totaled
Same stores metrics include only Canadian dealerships which have been owned for at least two full years since acquisition.
- Revenue increased to
$971.2 million , an increase of 54.2% - Gross profit increased by
$89.8 million or 103% - Used to new retail units ratio increased to 1.37 from 1.01
- New and used retail unit sales increased by 40.5% to 18,362 units
- Used retail unit sales increased by 61.7%, an increase of 4,046 units
- Finance and insurance gross profit per retail unit average increased to
$2,942 , up 11.6% or$305 per unit; gross profit increased to$54.0 million as compared to$34.5 million in the prior year, an increase of$19.6 million or 56.8% - Parts, service and collision repair gross profit increased to
$56.8 million , an increase of 43.1% - Parts, service and collision repair gross profit percentage increased to 55.5% as compared to 49.4% in the prior year, an increase of 6.1 ppts, driven by various initiatives to improve margin retention
Financing and Investing Activities and Other Recent Developments
ACQUISITION PIPELINE SUPPORTED BY HEALTHY BALANCE SHEET AND LIQUIDITY STRUCTURE
Our focus has been and continues to be on preserving cash and managing liquidity. In the quarter, net indebtedness decreased by
The following occurred:
- Amended and extended our existing credit facility on
April 14, 2021 for total aggregate bank facilities of$1.3 billion , with a maturity date ofApril 14, 2024 , maintaining a three-year tenor to our facility. S&P Global Ratings ("S&P") issued a research update onApril 14, 2021 whereby it revised the Company's outlook to stable, raised the issuer credit rating to 'B', and raised the rating of the Company's senior unsecured notes to 'B'.- Issued an additional
$125 million add-on onApril 15, 2021 to our existing 8.75% senior unsecured notes, dueFebruary 11, 2025 . The add-on offering was completed at a premium to par, resulting in a yield of 5.595%. - On
August 9, 2021 , the Company completed the acquisition ofMark Wilson's Better Used Cars, an independent used vehicle dealership inGuelph, Ontario as part of the development of the Used Digital Retail Division.
Second Quarter Financial Information
The following table summarizes the Company's performance for the quarter:
Three Months Ended | |||
Consolidated Operational Data | 2021 | 2020 | % Change |
Revenue | 1,281,055 | 727,447 | 76.1% |
Gross profit | 217,841 | 97,879 | 122.6% |
Gross profit % | 17.0% | 13.5% | 3.5% |
Operating expenses | 154,773 | 99,736 | 55.2% |
Operating profit (loss) | 66,153 | (4,388) | 1607.6% |
Net income (loss) for the period | 37,698 | (20,052) | 288.0% |
Basic net income (loss) per share attributable to | 1.33 | (0.72) | 284.7% |
Diluted net income (loss) per share attributable to | 1.23 | (0.72) | 270.8% |
Adjusted EBITDA 1 | 70,491 | 4,828 | 1360.0% |
New retail vehicles sold (units) | 10,107 | 7,526 | 34.3% |
New fleet vehicles sold (units) | 575 | 340 | 69.1% |
Total new vehicles sold (units) | 10,682 | 7,866 | 35.8% |
Used retail vehicles sold (units) | 13,271 | 7,228 | 83.6% |
Total vehicles sold | 23,953 | 15,094 | 58.7% |
Same store new retail vehicles sold (units) | 7,763 | 6,518 | 19.1% |
Same store new fleet vehicles sold (units) | 575 | 337 | 70.6% |
Same store used retail vehicles sold (units) | 10,599 | 6,553 | 61.7% |
Same store total vehicles sold | 18,937 | 13,408 | 41.2% |
Same store revenue | 971,184 | 629,637 | 54.2% |
Same store gross profit | 177,439 | 87,613 | 102.5% |
Same store gross profit % | 18.3% | 13.9% | 4.4% |
See the Company's Management's Discussion and Analysis for the quarter ended |
The following table shows the segmented operating results for the Company for the three month periods ended
Three Months Ended | Three Months Ended | ||||||
$ |
| Total $ | $ |
| Total $ | ||
New vehicles | 443,648 | 90,504 | 534,152 | 337,999 | 43,428 | 381,427 | |
Used vehicles | 477,222 | 76,667 | 553,889 | 200,088 | 14,944 | 215,032 | |
Parts, service and collision repair | 107,571 | 14,651 | 122,222 | 80,493 | 9,924 | 90,417 | |
Finance, insurance and other | 61,018 | 9,774 | 70,792 | 37,801 | 2,770 | 40,571 | |
Total revenue | 1,089,459 | 191,596 | 1,281,055 | 656,381 | 71,066 | 727,447 | |
New vehicles | 35,931 | 4,890 | 40,821 | 12,485 | (1,851) | 10,634 | |
Used vehicles | 36,523 | 7,887 | 44,410 | 2,839 | 1,385 | 4,224 | |
Parts, service and collision repair | 60,510 | 8,104 | 68,614 | 40,008 | 5,828 | 45,836 | |
Finance, insurance and other | 54,981 | 9,015 | 63,996 | 34,534 | 2,651 | 37,185 | |
Total gross profit | 187,945 | 29,896 | 217,841 | 89,866 | 8,013 | 97,879 | |
Employee costs | 85,590 | 13,575 | 99,165 | 66,167 | 6,129 | 72,296 | |
Government assistance | (1,623) | (1,330) | (2,953) | (26,223) | — | (26,223) | |
Administrative costs | 39,460 | 8,306 | 47,766 | 37,237 | 5,409 | 42,646 | |
Facility lease and storage costs | 381 | — | 381 | 648 | — | 648 | |
Depreciation of property and equipment | 3,972 | 295 | 4,267 | 3,744 | 307 | 4,051 | |
Depreciation of right-of-use assets | 5,519 | 628 | 6,147 | 5,682 | 636 | 6,318 | |
Total operating expenses | 133,299 | 21,474 | 154,773 | 87,255 | 12,481 | 99,736 | |
Operating profit (loss) before other income | 54,646 | 8,422 | 63,068 | 2,611 | (4,468) | (1,857) | |
Operating data | |||||||
New retail vehicles sold 1 | 7,763 | 2,344 | 10,107 | 6,518 | 1,008 | 7,526 | |
New fleet vehicles sold 1 | 575 | — | 575 | 337 | 3 | 340 | |
Total new vehicles sold 1 | 8,338 | 2,344 | 10,682 | 6,855 | 1,011 | 7,866 | |
Used retail vehicles sold 1 | 11,474 | 1,797 | 13,271 | 6,535 | 693 | 7,228 | |
Total vehicles sold 1 | 19,812 | 4,141 | 23,953 | 13,390 | 1,704 | 15,094 | |
# of service and collision repair orders completed 1, 2 | 185,917 | 28,232 | 214,149 | 152,818 | 20,138 | 172,956 | |
# of dealerships at period end | 50 | 17 | 67 | 50 | 13 | 63 | |
# of service bays at period end | 902 | 196 | 1,098 | 867 | 177 | 1,044 |
See the Company's Management's Discussion and Analysis for the quarter ended |
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 quarterly MD&A: adjusted EBITDA; normalized adjusted EBITDA; free cash flow; net indebtedness, net indebtedness leverage ratio and lease adjusted leverage ratio.
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/investors/q22021-presentation/
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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 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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