AUTOCANADA ANNOUNCES FIRST QUARTER RESULTS

• Revenue from continuing operations was $1,240.1 million as compared to $1,212.0 million in the prior year, an increase of $28.1 million
• Net loss for the period from total operations was $(3.2) million as compared to a net loss of $(2.3) million in the prior year
  • Net income from continuing operations was $9.7 million as compared to $8.0 million in the prior year
  • Net loss from discontinued operations was $(12.9) million as compared to $(10.3) million in the prior year
• Diluted net income per share from continuing operations was $0.37 as compared to $0.34 in the prior year
• Adjusted EBITDA from total operations¹ was $38.5 million as compared to $22.0 million in the prior year
  • Adjusted EBITDA from continuing operations¹ was $43.0 million as compared to $26.8 million in the prior year
  • Adjusted EBITDA from discontinued operations¹ was $(4.5) million as compared to $(4.9) million in the prior year

EDMONTON, AB, May 14, 2025 /CNW/ - AutoCanada Inc. ("AutoCanada" or the "Company") (TSX: ACQ), a multi-location North American automobile dealership group, today reported its financial results for the three-month period ended March 31, 2025.

Paul Antony, Executive Chairman, stated, "We entered 2025 with a clear mandate: simplify the business, reduce operating costs, and strengthen our financial foundation. March and April brought solid new light vehicle demand in Canada, offering an encouraging start to the year. However, it remains to be seen whether this momentum will persist given the growing uncertainty surrounding U.S. tariffs, inflationary pressures, and broader risks to the Canadian economy. In response to this uncertain outlook, we accelerated our cost transformation efforts under the ACX Operating Method, delivering an additional $48.1 million in annualized savings in the first quarter and bringing total annualized run-rate savings to $57.1 million since the plan's launch in September 2024.

While recent performance has been encouraging, we are not counting on a linear recovery. We remain cautious in our near-term outlook and highly focused on what we can control, which is preserving cash, reducing leverage, and executing our transformation to realize $100 million in annual run rate cost savings by the end of 2025. I want to thank our team for their relentless focus and hard work as we deliver on our ambitious transformation priorities, and our OEM partners for their continued support and collaboration during this critical period."

First Quarter Key Highlights and Recent Developments

Revenue increased by 2.3% in the first quarter of 2025 compared to the first quarter of 2024. Increases in revenue from new vehicle sales and collision are partially offset by decreases in used vehicle sales, parts and service, and F&I.

Gross profit increased by 0.2% in the first quarter of 2025 compared to the first quarter of 2024. Increases in both used vehicle gross profit which is driven by improvements in used wholesale vehicles² and collision. These increases are partially offset by decreases in new vehicle sales, parts and service, and F&I. A contributing factor to the decrease in gross profit for new, parts and service, and F&I is the decrease in total retail² units sold.

Operating expenses before depreciation² were flat in the first quarter of 2025 compared to the first quarter of 2024. Normalized operating expenses before depreciation¹ decreased by $(12.9) million, and included the normalizing of $15.8 million of restructuring charges from Q1 2025 related to the ongoing initiative targeting $100 million in annual run-rate cost savings.

Floorplan financing expenses decreased as a result of lower new and used inventory levels, which has been a focus in conjunction with the execution of the ACX Operating Method, and interest rate declines.

Net income for the period increased as a result of items noted above as well as increases in gains on redemption liabilities and decreases in impairment charges compared to the first quarter of 2024, this was partially offset by decreases in gains on asset dispositions in the first quarter of 2025.

Adjusted EBITDA¹ and adjusted EBITDA margin¹ for the period increased primarily as a result of lower operating expenses before depreciation and floorplan financing expenses as discussed above.

Collision Operations Highlights

Revenue and gross profit increased as a result of strong customer demand, additional Original Equipment Manufacturer ("OEM") certifications, increased insurance referrals and increased hail repairs.

Gross profit percentage² increased due to focused efforts on growing higher margin services including diagnostics, calibration and coatings.

Same store revenue, gross profit and gross profit percentage² increased for the reasons noted above.

Adjusted EBITDA¹ increased as a result of revenue growth, gross profit, and gross profit percentage² improvements described above.

Other Recent Developments

During the quarter:

• On February 14, 2025, the Company terminated its Volvo franchise at Bloomington/Normal Auto Mall, located in Illinois, for cash consideration of $0.9 million. The Volvo franchise was presented as assets held for sale in the U.S. Operations segment, which was presented as a discontinued operation, as at December 31, 2024. This decision is part of our active program to discontinue U.S. Operations.
• On March 4, 2025, the Company closed all remaining locations within RightRide. This decision is part of a larger strategic shift to refocus on core dealership and collision operations and reduce leverage.
• On March 7, 2025, the Company terminated an agreement with a Subsidiary within the Canadian Operations segment, which impacted the contractual rights that provided control over the subsidiary, such that it is no longer controlled by the Company upon termination of the agreement. The termination agreement requires the counterparty to pay the Company $14.5 million for repayment of loans in addition to $15.6 million for accrued interest, accrued royalty fees, and a termination fee. This decision is part of a larger strategic shift to optimize operations and reduce leverage.
• On March 28, 2025, the Company obtained consent to increase the Company's maximum permitted Total Net Funded Debt to Bank EBITDA Ratio from 5.50:1.00 to 6.00:1.00 for the period from April 1, 2025 to June 30, 2025.

After the quarter:

• On April 30, 2025, the Company completed the divestiture of North Toronto Auction, a used vehicle auction business operating in Innisfil, Ontario for $3.5 million in proceeds.

Conference Call

A conference call to discuss the results for the three months ended March 31, 2025 will be held on May 14, 2025 at 4:00 pm Mountain (6:00 pm Eastern). To participate in the conference call, please dial 1-888-510-2154 approximately 10 minutes prior to the call.

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/2025-q1-conference-call/

MD&A and Financial Statements

Information included in this press release is a summary of results. It should be read in conjunction with AutoCanada's Interim Consolidated Financial Statements ("Interim Financial Statements") and Management's Discussion and Analysis ("MD&A") for the three-month period ended March 31, 2025, which can be found on the Company's website at www.autocan.ca or on www.sedarplus.ca.

All comparisons presented in this press release are between the three-month period ended March 31, 2025 and the three-month period ended March 31, 2024, unless otherwise indicated. Results are reported in Canadian dollars and have been rounded to the nearest thousand dollars, unless otherwise stated.

Condensed Interim Consolidated Statements of Comprehensive Loss

(Unaudited)
(in thousands of Canadian dollars except for share and per share amounts)

The accompanying notes are an integral part of these condensed interim consolidated financial statements and can be found on the Company's website at www.autocan.ca or on www.sedarplus.ca.

 Condensed Interim Consolidated Statements of Financial Position

(Unaudited)
(in thousands of Canadian dollars)

The accompanying notes are an integral part of these condensed interim consolidated financial statements and can be found on the Company's website at www.autocan.ca or on www.sedarplus.ca.

Condensed Interim Consolidated Statements of Cash Flows

(Unaudited)
(in thousands of Canadian dollars)

The accompanying notes are an integral part of these condensed interim consolidated financial statements and can be found on the Company's website at www.autocan.ca or on www.sedarplus.ca.

NON-GAAP AND OTHER FINANCIAL MEASURES

This press release contains certain financial measures that do not have any standardized meaning prescribed by 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 income (loss) or to cash provided by (used in) operating, investing, financing activities, cash, and indebtedness determined in accordance with GAAP, as indicators of our performance. We provide these additional non-GAAP measures ("Non-GAAP Measures"), capital management measures, and supplementary financial measures to assist investors in determining the Company's 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 operating expenses before depreciation, and normalized operating expenses before depreciation as a percentage of gross profit 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, cash flows from operating, investing and financing activities or as a measure of 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.

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 part of the Used Digital Division);
• Non-cash charges (such as impairment, recoveries, gains or losses on 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 resolution of lawsuits and legal claims).

The Company considers this measure meaningful as it provides improved continuity with respect to the comparison of our operating performance over a period of time.

Adjusted EBITDA Margin

Adjusted EBITDA margin is an indicator of a company's operating performance specifically in relation to our revenue performance.

The Company considers this measure meaningful as it provides improved continuity with respect to the comparison of our operating performance with retaining and growing profitability as our revenue and scale changes over a period of time.

Normalized Operating Expenses ("Opex") Before Depreciation

Normalized operating expenses before depreciation is an indicator of a company's operating expense before depreciation over a period of time, normalized for the following items:

• Transaction costs related to acquisitions, dispositions, and open points;
• Software implementation costs associated with the configuration or customization of software as a service arrangement;
• Restructuring charges relate to non-recurring organizational changes to improve the Company's profitability and overall efficiency;
• Management transition costs; and
• Share-based compensation expense.

The Company considers this measure meaningful as it provides a comparison of our operating expense normalized for transactions that are not indicative of the Company's operating expenses over time.

Normalized Operating Expenses Before Depreciation as a Percentage of Gross Profit

Normalized operating expenses before depreciation as a percentage of gross profit is a measure of a company's normalized operating expenses before depreciation over a period of time in relation to gross profit.

The Company considers this measure meaningful as it provides a comparison of our operating performance, normalized for transactions that are not indicative of the Company's operating expenses, with our growing profitability as our gross profit and scale changes over a period of time.

NON-GAAP AND OTHER FINANCIAL MEASURES RECONCILIATIONS

Adjusted EBITDA and Segmented Adjusted EBITDA

The following table illustrates segmented adjusted EBITDA for the three-month periods ended March 31:

The following table illustrates segmented collision adjusted EBITDA from continuing operations for the three-months ended March 31. There is no discontinued operation in Collision Operations.

Adjusted EBITDA Margin

The following table illustrates segmented adjusted EBITDA margin from continuing operations for the three-month periods ended March 31:

Normalized Operating Expenses Before Depreciation and Normalized Operating Expenses Before Depreciation as a Percentage of Gross Profit

The following table illustrates segmented normalized opex before depreciation and normalized opex before depreciation as a percentage of gross profit from continuing operations, for the three-month periods ended March 31:

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 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) and the financial outlook with respect to the transformation plan are not all 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.

Forward-looking statements and financial outlook in this press release include: AutoCanada's future financial position and expected run-rate operational expense savings from the transformation plan.

Forward-looking statements and financial outlook provide information about management's expectations and plans for the future and may not be appropriate for other purposes. Forward looking statements and financial outlook are based on various assumptions, and expectations that AutoCanada believes are reasonable in the circumstances. No assurance can be given that these assumptions and expectations will prove correct. Those assumptions and expectations are based on information currently available to AutoCanada, including information obtained from third-party consultants and other third-party sources, and the historic performance of AutoCanada's businesses. AutoCanada cautions that the assumptions used to prepare such forward-looking statements and financial outlook, including AutoCanada's expected run-rate operational expense savings through the transformation plan, could prove to be incorrect or inaccurate.

In preparing the forward-looking statements and financial outlook, AutoCanada considered numerous economic, market and operational assumptions, including key assumptions listed under Section 3 Market and Financial Outlook of the MD&A.

The forward-looking statements and financial outlook are also subject to the risks and uncertainties set forth below. By their very nature, forward-looking statements and financial outlook involve numerous assumptions, risks and uncertainties, both general and specific. Should one or more of these risks and uncertainties materialize or should underlying assumptions prove incorrect, as many important factors are beyond our control, AutoCanada's actual performance and financial results may vary materially from those estimates and expectations contemplated, expressed or implied in the forward-looking statements or financial outlook. These risks and uncertainties include risks relating to failure to realize expected cost-savings, cost overruns in one-time restructuring expenses, compliance with laws and regulations, reduced customer demand, operational risks, force majeure, labour relations matters, our ability to access external sources of debt and equity capital, and the risks identified in (i) the MD&A under Section 12 Risk Factors and (ii) AutoCanada's most recent Annual Information Form (the "AIF"). The preceding list of assumptions, risks and uncertainties is not exhaustive.

Accordingly, these factors could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements and financial outlook. Therefore, any such forward-looking statements and financial outlook are qualified in their entirety by reference to the factors discussed throughout this press release and in the MD&A.

Details of the Company's material forward-looking statements and financial outlook are included in the Company's most recent AIF. The AIF and other documents filed with securities regulatory authorities (accessible through the SEDAR+ website (www.sedarplus.ca) describe the risks, material assumptions, and other factors that could influence actual results and which are incorporated herein by reference.

When relying on our forward-looking statements and financial outlook to make decisions with respect to AutoCanada, investors and others should carefully consider the preceding factors, other uncertainties and potential events. Any forward-looking statements and financial outlook are provided as of the date of this press release and, except as required by law, AutoCanada does not undertake to update or revise such statements to reflect new information, subsequent or otherwise. For the reasons set forth above, investors should not place undue reliance on forward-looking statements or financial outlook.

About AutoCanada

AutoCanada's Canadian Operations segment, as of March 31, 2025, operates 64 franchised dealerships in Canada, comprised of 25 brands, in 8 provinces. AutoCanada currently sells Acura, Alfa Romeo, Audi, BMW, Buick, Cadillac, Chevrolet, Chrysler, Dodge, FIAT, Ford, GMC, Honda, Hyundai, Infiniti, Jeep, Kia, Mazda, Mercedes-Benz, MINI, Nissan, Porsche, Ram, Subaru, and Volkswagen branded vehicles. In addition, AutoCanada's Canadian Operations segment currently operates 3 Used Digital Division dealerships ("Used Vehicle Operations") and 12 stand-alone collision centres within our group of 29 collision centres ("Collision Centres"). In 2024, our Canadian dealerships sold approximately 85,000 new and used retail vehicles. In addition, our Collision Centres offer an opportunity for the Company to retain customers at every touchpoint within the automotive ecosystem.

AutoCanada's U.S. Operations segment, operating as Leader Automotive Group ("Leader"), operates 17 franchised dealerships comprised of 15 brands, in Illinois, USA. Leader currently sells Audi, Chevrolet, Chrysler, Dodge, Honda, Hyundai, Jeep, Kia, Lincoln, Mercedes-Benz, Porsche, Ram, Subaru, Toyota, and Volkswagen branded vehicles. In 2024, our U.S. dealerships sold approximately 12,900 new and used retail vehicles.

Additional Information

Additional information about AutoCanada is available at the Company's website at www.autocan.ca and on the SEDAR+ website at www.sedarplus.ca.

SOURCE AutoCanada Inc.