AutoCanada Reports Third Quarter 2017 Results

EDMONTON, Nov. 9, 2017 /CNW/ - AutoCanada Inc. (TSX: ACQ), one of Canada's largest multi-location automobile dealership groups, today provided a corporate update and reported its financial results for the three-month and nine-month periods ended September 30, 2017.

"We have continued our positive momentum in this quarter," said Steven J. Landry, President & Chief Executive Officer, "the Company reported an increase in revenue, gross profit, net earnings and earnings per share. New vehicle unit sales outpaced the industry while same store revenue, gross profit and unit sales exceed the same quarter last year. We achieved these positive financial and unit results while also adding a new brand and dealership, Planète Mazda, to our portfolio."

Third Quarter Highlights

• Revenue in the quarter was $834.6 million, up 10.8% compared with the third quarter of 2016. Operating expenses as a percentage of gross profit declined to 80.1% from 80.6% over the same period last year.
• Gross profit was $138.0 million, up 12.2% compared with the same quarter in 2016, with gross profit as a percentage of revenue increasing to 16.5% from 16.3%.
• New vehicle sales were 12,014, up 9.4% from 2016. Revenue from new car sales was $497.7 million in the quarter, up 12.0% from 2016. New car sales accounted for 59.6% of the Company's total revenue and 25.7% of gross profit versus 59.0% of revenue and 25.7% of gross profit in the third quarter of 2016.
• Used vehicle sales were 5,118, up 2.9% from the same quarter last year. Revenue from used car sales was $192.5 million in the quarter, up 7.2% from last year. Used car sales accounted for 23.1% of the Company's total revenue and 8.1% of gross profit, versus 23.8% of revenue and 10.5% of gross profit in 2016.
• Parts, service and collision repair generated $104.8 million of revenue in the third quarter, up 9.7% from 2016. This accounted for 12.5% of the Company's total revenue and 39.0% of its gross profit, versus 12.6% of revenue and 39.0% of gross profit in 2016.
• Finance and insurance generated $39.6 million of revenue in the third quarter, an improvement of 18.0% from 2016. This accounted for 4.8% of the Company's total revenue and 26.2% of its gross profit, up from 4.5% of revenue and 25.0% of profit in 2016.
• EBITDA attributable to AutoCanada shareholders increased by $2.0 million or 8.3% to $25.8 million from $23.8 million last year.
• Adjusted earnings per share were $0.50, compared with the adjusted earnings per share of $0.38 in the third quarter of 2016.

"This was a good quarter with topline growth across all areas of the business and an overall improvement in profitability," said Chris Burrows, Chief Financial Officer. "Sales are up in every region, and from all but two brands. Our operations are becoming more efficient, and we are seeing a steady rebalancing of our portfolio, across geographies and brands."

The following table summarizes the Company's results for the quarter ended September 30, 2017:

Outlook

The Canadian new vehicle market continues to outpace all previous years for sales. Nine months into the year, new vehicle sales have hit monthly records eight times. Total sales of 1.59 million vehicles at the end of September are 5.5% greater than 2016, the previous record year. The market has grown in every region of the country, with growth in the west being particularly strong.

This has been of added benefit to AutoCanada, whose business is more heavily weighted in the west. Sales for the Company were up 9.4% in the third quarter, out-performing the national sales increase of 6.8%.

AutoCanada's growth strategy will continue to focus on increasing the brands and range of vehicles it offers, with dealers clustered in key markets across a broader range of geographies. The recent addition of the Company's first Mazda dealership, AutoCanada's 23^rd brand, located in the Montreal region where it already has three other dealerships, is in keeping with this strategy. 

AutoCanada's success includes used car sales, parts, service & collision repair, and financing & insurance. Through acquisitions, the Company has increased its service bays to 977 from 898 one year ago and the new Mazda dealership adds 22 more. The Mercedes-Benz Rive-Sud dealership acquired earlier in 2017 added 28 new services bays.

We will also continue to focus on advancing our progress on integration, continuous improvements in efficiencies and deepening our IT and analytical capabilities across AutoCanada's network of dealerships and at the corporate office. Acquiring new dealerships and effectively integrating them is key to our long-term success. Same store results, reflecting the performance of dealerships that have been owned for at least two full years since acquisition or opening, is an important metric to assess how well we are doing at integration. Same store sales saw an uptick in the third quarter, with revenue up 2.9% and gross profit up 6.3%. Only one new store was added to our same store count in the third quarter, with only one more to follow by the end of the year.    

Dealership relocations and expansions are important steps to provide customer loyalty and long-term earnings sustainability. Our capital expenditure on relocations and expansions in 2017 continue on track. At September 30, the Company was committed to capital expenditure obligations of $8.3 million related to dealership facilities.

Dividends

Management reviews the Company's financial results on a monthly basis. The Board of Directors reviews the financial results periodically to determine whether a dividend shall be paid based on a number of factors with a goal to efficiently allocate capital to fuel AutoCanada's future growth while also rewarding and sharing the company's success with our shareholders.

On November 9, 2017, the Board declared a quarterly eligible dividend of $0.10 per common share on AutoCanada's outstanding Class A common shares, payable on December 15, 2017 to shareholders of record at the close of business on November 30, 2017.

For purposes of the enhanced dividend tax credit rules contained in the Income Tax Act (Canada) (the "ITA") and any corresponding provincial and territorial tax legislation, all dividends paid by AutoCanada or any of its subsidiaries in 2010 and thereafter are designated as "eligible dividends" (as defined in 89(1) of the ITA), unless otherwise indicated. Please consult with your own tax advisor for advice with respect to the income tax consequences to you of AutoCanada Inc. designating dividends as "eligible dividends".

SELECTED QUARTERLY 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.

(in thousands of dollars, except Gross Profit %, Earnings per share, and Operating Data)		Q3 2017	Q2 2017	Q1 2017	Q4 2016	Q3 2016	Q2 2016	Q1 2016	Q4 2015
Income Statement Data
	New vehicles	497,711	558,682	353,540	348,107	444,482	497,025	363,181	368,242
	Used vehicles	192,473	182,913	165,408	157,724	179,582	208,016	180,108	167,100
	Parts, service and collision repair	104,816	113,983	90,735	92,310	95,585	100,317	94,721	102,220
	Finance, insurance and other	39,571	39,324	29,344	31,133	33,529	36,899	28,862	34,752
Revenue		834,571	894,902	639,027	629,274	753,178	842,257	666,872	672,314
	New vehicles	36,806	38,555	25,590	25,042	31,578	34,410	27,267	27,482
	Used vehicles	11,140	13,095	11,940	10,064	12,950	13,758	10,420	10,326
	Parts, service and collision repair	53,805	56,306	47,284	52,957	47,676	52,957	47,669	51,760
	Finance, insurance and other	36,218	35,867	26,813	28,722	30,733	33,577	26,353	34,354
Gross profit		137,969	143,823	111,627	116,785	122,937	134,702	111,709	123,922
Gross Profit %		16.5%	16.1%	17.5%	18.6%	16.3%	16.0%	16.8%	18.4%
Operating expenses		110,560	112,897	98,170	97,397	99,041	107,932	96,047	101,310
Operating expenses as a % of gross profit		80.1%	78.5%	87.9%	83.4%	80.6%	80.1%	86.0%	81.8%
Net earnings (loss) attributable to AutoCanada shareholders		12,100	24,978	3,678	13,785	(32,619)	14,158	7,272	(7,361)
Adjusted net earnings attributable to AutoCanada shareholders		13,581	15,547	4,602	7,536	10,327	15,523	6,253	8,610
EBITDA attributable to AutoCanada shareholders		25,827	43,683	View Comments and Join the Discussion!   Don't Miss Any Updates! News Directly in Your Inbox Subscribe to: Benzinga Premarket Activity Get pre-market outlook, mid-day update and after-market roundup emails in your inbox. Market in 5 Minutes Everything you need to know about the market - quick & easy. Daily Analyst Rating A summary of each day’s top rating changes from sell-side analysts on the street. Fintech Focus A daily collection of all things fintech, interesting developments and market updates. Email Thank You Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com Trending Recent 1 RRTS, PCG: 20 Stocks Moving In Monday's Pre-Market Session 2 CONN, DTIL: 25 Stocks Moving in Tuesday's Pre-Market Session 3 TSLA: Elon Musk Takes Grimes For A Drive In The Cybertruck 4 CGC, SAVA: 38 Healthcare Stocks Moving In Monday's Pre... 5 SSKN, FATE: Benzinga's Top Upgrades, Downgrad... 6 THO, SNY: 7 Stocks To Watch For December... 7 RNG, RCKT: 10 Biggest Price Targ... 1 MJ, KHRNF: Uruguay Senate Approves New Bill To Regulate Access To Medical Cannabis 2 UNP: Union Pacific Shuffles Sales And Marketing Groupings 3 PCAR: Truck Maker Paccar Issues Special $2.30-Per-Share Dividend 4 This Company Is Sending Hemp Tissue Culture To Outer Space 5 OLLI, GME: 5 Stocks Moving In Tuesday's After-Hours Session 6 ULH: Universal Intermodal Drivers At LA, Long Beach Ports... 7 DNA Genetics Announces Agreement With Green Peak To... Benzinga is a fast-growing, dynamic and innovative financial media outlet that empowers investors with high-quality, unique content. Popular Channels Analyst Ratings ETFs Economics Forex Hot News Options Press Releases Start-ups Tech Tools & Features Affiliate Program PreMarket Prep Feeds News Widget Real Time Feed Sitemap Submit News Tips About Benzinga About Us Licensing & Syndication Market Data & APIs Apps (iOS and Android) Fintech Awards Blog In the News Careers Service Status Contact Us Disclaimer Privacy Policy Terms and Conditions Benzinga Partners 1 (877) 440-9464 (ZING) © Copyright Benzinga Book A Demo Learn How You Can Succeed In The Market With Benzinga Pro Fastest Market News Real-Time News Alerts Customizable News Filters Book A Demo