- Revenue was
$1,206.8 million as compared to$1,017.1 million in the prior year, an increase of 19% and the highest third quarter revenue reported in the Company's history - Net income for the period was
$38.8 million versus$36.0 million in 2020 - Adjusted EBITDA was
$68.3 million versus$61.1 million in the prior year, an increase of 12%; normalizing for non-recurring government assistance of$6.3 million in the prior year, results were ahead of prior year by 25% - Net indebtedness of
$29.8 million at the end of Q3 2021 compares to$21.6 million at the end of Q2 2021; net debt leverage on a pre-IFRS 16 basis was 0.2x
"Our team's focus on operational excellence once again delivered record-setting results in Q3 2021, highlighting the strength and resiliency of our business model," said
"This strong performance reflects the sustainability of our business model and demonstrates that we're successfully managing through the current market environment of global supply chain challenges impacting OEM production. We believe these OEM production capacity issues will normalize over the coming quarters and expect the market to return to pre-pandemic levels in late 2022 or early 2023. In the meantime, we will continue to build on our positive momentum and focus on strategic growth initiatives to drive industry-leading performance regardless of changing market conditions.
"We remain well positioned to execute on our acquisition strategy in the coming quarters with a robust pipeline of dealerships and collision centres representing over
Third Quarter Key Highlights and Recent Developments
The Company reported another record-setting performance as revenue for the third quarter of 2021 reached
Net income for the period was
Adjusted EBITDA for the period was
Normalizing for the typically non-recurring
Total gross profit increased by 22.7% to
Q3 2021 was another strong quarter for
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 retail margin growth across all our business operations in the third quarter.
Normalizing for CEWS income in the prior year, operating expenses as a percentage of gross profit improves by 1.0 ppts to 72.6% in the current year as compared to a normalized 73.6% in the prior year, and is well below the five-year third quarter historical average of 81.5%. 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 increased 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 THIRD QUARTER
Owing to execution against its complete business model strategy,
For the three-month period ended
- Revenue was
$1,206.8 million , an increase of$189.7 million or 18.6% and the highest third quarter revenue reported in the Company's history - Total vehicles sold were 23,444, an increase of 3,276 units or 16.2%
- Used retail vehicles sold increased by 4,995 or 56.5%
- Net income for the period was
$38.8 million (or$1.37 per basic share) versus$36.0 million (or$1.29 per basic share) in 2020 - Adjusted EBITDA increased by 11.8% to
$68.3 million , an increase of$7.2 million - Adjusting for CEWS income of
$6.3 million in Q3 2020, Adjusted EBITDA was$68.3 million , ahead of normalized prior year Adjusted EBITDA by$13.5 million or 24.6% - Pre-IFRS 16 Adjusted EBITDA was
$57.4 million , as compared to normalized$43.9 million in the prior year, an improvement of 30.7% - Ending net indebtedness of
$29.8 million reflected an increase of$8.2 million from Q2 2021.
Canadian Operations Highlights
USED RETAIL UNIT SALES GROWTH OF 44%
Used vehicle and F&I segments were key drivers of improved earnings in Q3 2021. Total gross profit percentage increased to 18.4% as compared to 17.7% in the prior year. Used vehicle gross profit increased by 32.2% to
Current period results include the acquisitions of
For the three-month period ended
- Revenue was
$1,018.4 million , an increase of 11.7%; the highest third quarter Canadian revenue reported in the Company's history - Total retail vehicles sold were 19,264, an increase of 2,000 units or 11.6%
- Used retail unit sales increased by 3,499 or 43.8%
- Average TTM Canadian used retail unit sales per dealership per month, excluding Used Digital Retail Division dealerships, reached 59, as compared to 45 in the prior year
- Used to new retail units ratio increased to 1.48 from 0.86
- Trailing twelve month ratio improved to 1.30 at Q3 2021 as compared to 0.93 at Q3 2020
- Finance and insurance gross profit per retail unit average increased to
$3,005 , up 15.9% or$412 per unit - Net income for the period was
$33.8 million , down$(0.5) million from a net income of$34.3 million in 2020 - Income tax expense increased by
$3.6 million to$8.4 million primarily due to adjustments in respect of prior years and other permanent items - Adjusted EBITDA increased 8% to
$60.8 million , an increase of$4.5 million - Adjusting for CEWS income in the prior year, Adjusted EBITDA increases to
$60.8 million , ahead of normalized prior year Adjusted EBITDA by$10.8 million or 21.5% - Adjusted EBITDA margin was 6.0% as compared to normalized 5.5% in the prior year, an increase of 0.5 ppts
- Pre-IFRS 16 Adjusted EBITDA was
$51.1 million , as compared to normalized$40.1 million in the prior year, an improvement of 27.4%
USED RETAIL UNIT SALES GROWTH OF 178%
The
Current period results include the acquisition of
- Revenue was
$188.3 million , an increase of 79.3% - Retail unit sales increased to 3,822 units, up 1,500 units or 64.6%
- Used retail unit sales increased by 1,496 or 177.7%
- Net income for the period increased by
$3.3 million to$4.9 million from$1.7 million in 2020 - Adjusted EBITDA was
$7.4 million , an increase of$2.7 million from 2020, an improvement of 57.7% - Adjusting for COVID-19 related typically non-recurring items, normalized Adjusted EBITDA on a TTM basis was
$15.0 million as compared to$1.6 million in 2020
Same Store Metrics - Canadian Operations
SAME STORE F&I GROSS PROFIT PER RETAIL UNIT AVERAGE OF
We outperformed the
Same stores metrics include only Canadian dealerships which have been owned for at least two full years since acquisition.
- Revenue increased to
$983.9 million , an increase of 15.0% - Gross profit increased by
$28.2 million or 18.6% - Used to new retail units ratio increased to 1.29 from 0.86
- Used retail unit sales increased by 25.4%, an increase of 2,032 units
- F&I gross profit per retail unit average increased to
$3,139 , up 26.1% or$650 per unit; gross profit increased to$55.9 million as compared to$43.0 million in the prior year, an increase of$12.9 million or 30.0% - Parts, service and collision repair gross profit increased to
$54.4 million , an increase of 5.2% - Parts, service and collision repair gross profit percentage increased to 55.7% as compared to 52.4% in the prior year, an increase of 3.4 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
In the quarter, net indebtedness increased by
The following acquisitions occurred:
- On
August 9, 2021 , the Company acquired 100% of the shares inMark Wilson's Better Used Cars, an independent used vehicle dealership inGuelph, Ontario as part of the development of the Used Digital Retail Division. - On
September 9, 2021 , the Company acquired 100% of the shares in Autolux MB Collision, a luxury-brand focused collision centre located inMontreal, Quebec . - On
October 1, 2021 , the Company acquired 100% of the shares inAirdrie Autobody Ltd. , a collision centre located inAirdrie, Alberta . - On
November 4, 2021 , the Company acquired substantially all of the assets ofCrystal Lake Chrysler Jeep Dodge Ram Inc. , a Stellantis dealership located inCrystal Lake, Illinois .
Third Quarter Financial Information
The following table summarizes the Company's performance for the quarter:
Three Months Ended | |||
Consolidated Operational Data | 2021 | 2020 | % Change |
Revenue | 1,206,754 | 1,017,100 | 18.6% |
Gross profit | 220,192 | 179,412 | 22.7% |
Gross profit % | 18.2% | 17.6% | 0.6% |
Operating expenses | 159,880 | 125,785 | 27.1% |
Operating profit | 62,841 | 56,884 | 10.5% |
Net income for the period | 38,769 | 35,962 | 7.8% |
Basic net income per share attributable to | 1.37 | 1.29 | 6.2% |
Diluted net income per share attributable to | 1.27 | 1.23 | 3.3% |
Adjusted EBITDA 1 | 68,265 | 61,054 | 11.8% |
New retail vehicles sold (units) | 9,255 | 10,750 | (13.9)% |
New fleet vehicles sold (units) | 358 | 582 | (38.5)% |
Total new vehicles sold (units) | 9,613 | 11,332 | (15.2)% |
Used retail vehicles sold (units) | 13,831 | 8,836 | 56.5% |
Total vehicles sold | 23,444 | 20,168 | 16.2% |
Same store new retail vehicles sold (units) | 7,771 | 9,270 | (16.2)% |
Same store new fleet vehicles sold (units) | 358 | 582 | (38.5)% |
Same store used retail vehicles sold (units) | 10,026 | 7,994 | 25.4% |
Same store total vehicles sold | 18,155 | 17,846 | 1.7% |
Same store revenue | 983,897 | 855,591 | 15.0% |
Same store gross profit | 179,870 | 151,636 | 18.6% |
Same store gross profit % | 18.3% | 17.7% | 0.6% |
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 | 422,605 | 66,587 | 489,192 | 483,117 | 61,298 | 544,415 | |
Used vehicles | 430,712 | 98,115 | 528,827 | 282,396 | 26,797 | 309,193 | |
Parts, service and collision repair | 103,357 | 13,367 | 116,724 | 98,539 | 13,200 | 111,739 | |
Finance, insurance and other | 61,770 | 10,241 | 72,011 | 47,998 | 3,755 | 51,753 | |
Total revenue | 1,018,444 | 188,310 | 1,206,754 | 912,050 | 105,050 | 1,017,100 | |
New vehicles | 37,345 | 6,810 | 44,155 | 38,639 | 3,591 | 42,230 | |
Used vehicles | 34,971 | 8,291 | 43,262 | 26,444 | 3,375 | 29,819 | |
Parts, service and collision repair | 57,449 | 7,777 | 65,226 | 51,553 | 7,503 | 59,056 | |
Finance, insurance and other | 57,895 | 9,654 | 67,549 | 44,769 | 3,538 | 48,307 | |
Total gross profit | 187,660 | 32,532 | 220,192 | 161,405 | 18,007 | 179,412 | |
Employee costs | 85,969 | 16,428 | 102,397 | 73,760 | 7,340 | 81,100 | |
Government assistance | (317) | — | (317) | (6,252) | — | (6,252) | |
Administrative costs | 38,608 | 8,502 | 47,110 | 34,971 | 5,282 | 40,253 | |
Facility lease and storage costs | 105 | — | 105 | 377 | — | 377 | |
Depreciation of property and equipment | 3,811 | 310 | 4,121 | 3,815 | 296 | 4,111 | |
Depreciation of right-of-use assets 2 | 5,767 | 697 | 6,464 | 5,710 | 486 | 6,196 | |
Total operating expenses | 133,943 | 25,937 | 159,880 | 112,381 | 13,404 | 125,785 | |
Operating profit (loss) before other income | 53,717 | 6,595 | 60,312 | 49,024 | 4,603 | 53,627 | |
Operating data | |||||||
New retail vehicles sold 1 | 7,771 | 1,484 | 9,255 | 9,270 | 1,480 | 10,750 | |
New fleet vehicles sold 1 | 358 | — | 358 | 582 | — | 582 | |
Total new vehicles sold 1 | 8,129 | 1,484 | 9,613 | 9,852 | 1,480 | 11,332 | |
Used retail vehicles sold 1 | 11,493 | 2,338 | 13,831 | 7,994 | 842 | 8,836 | |
Total vehicles sold 1 | 19,622 | 3,822 | 23,444 | 17,846 | 2,322 | 20,168 | |
# of service and collision repair orders completed 1, 2 | 169,510 | 30,360 | 199,870 | 167,834 | 27,170 | 195,004 | |
# of dealerships at period end | 51 | 17 | 68 | 49 | 13 | 62 | |
# of service bays at period end | 912 | 196 | 1,108 | 865 | 174 | 1,039 |
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://www.autocan.ca/investors/q32021-presentation/
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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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