Thursday, November 8, 2012

ACQ - AutoCanada Inc. reports highest quarterly earnings in Company history and announces an increase in its quarterly dividend (CAD 0.17)

Company: Autocanada Inc
Stock Name: ACQ
Amount: CAD 0.17
Announcement Date: 08/11/2012
Record Date: 28/11/2012

Dividend Detail:




A conference call to discuss the results for the reporting period ended
September 30, 2012 will be held on November 9, 2012 at 11:00 a.m.
Eastern time
(9:00 a.m. Mountain time). To participate in the
conference call, please dial 1-888-231-8191 or (647) 427-7450
approximately 10 minutes prior to the call. A live and archived audio
webcast of the conference call will also be available on the Company's
website www.autocan.ca. A conference call to discuss the results for the reporting period
ended September 30, 2012 will be held on November 9, 2012 at 11:00 a.m.
Eastern time
(9:00 a.m. Mountain time). To participate in the
conference call, please dial 1-888-231-8191 or (647) 427-7450
approximately 10 minutes prior to the call. A live and archived audio
webcast of the conference call will also be available on the Company's
website www.autocan.ca.



EDMONTON, Nov. 8, 2012 /CNW/ - AutoCanada Inc. (the "Company" or
"AutoCanada") (TSX: ACQ) today announced financial results for the
reporting period ended September 30, 2012.










2012 Third Quarter Operating Results



  • Revenue increased 11.0% or $29.5 million to $298.7 million




  • Gross profit increased by 11.6% or $5.2 million to $50.1 million




  • Same store revenue increased by 8.0%




  • Same store gross profit increased by 7.9%




  • EBITDA was $10.6 million vs. $8.2 million in Q3 of 2011, a 29.3%
    increase


  • Pre-tax net earnings increased by $2.3 million or 33.6% to $9.2 million


  • Net earnings increased by $1.6 million or 30.2% to $6.8 million


  • The number of same store new vehicles retailed increased by 10.1%


  • The number of same store used vehicles retailed decreased by 3.2%


  • Same store repair orders completed for the quarter went up by 0.5%










In commenting on the financial results for the three month period ended
September 30, 2012, Pat Priestner, Chief Executive Officer of
AutoCanada Inc. stated that, "The third quarter of 2012 was the
Company's most profitable quarter in its history, an achievement which
reflects the continued general good health of the economy, the quality
of the products we sell and the effective use of incentives by our
Manufacturer partners, and the dedicated hard work of our employees.
Our floorplan financing agreement with our new partner, the Bank of
Nova Scotia, was implemented in October, and we look forward to working
with the Bank of Nova Scotia in the coming years and to the meaningful
interest rate savings our new floorplan shall provide. We are likewise
very pleased with the performance of the two GM dealerships we recently
purchased an interest in, and look forward to a long term relationship
with GM Canada who has been a great partner to work with. With respect
to new dealership opportunities, we are also pleased to have secured a
suitable facility for the Kia open point dealership during the quarter,
in which we plan to commence operations in late 2013 or early 2014, and
we continue to aggressively seek accretive opportunities with brands
that have accepted public ownership."



With respect to the announced increase in the dividend to a rate of
$0.17 per share or an annual rate of $0.68 per share, Mr. Priestner
further stated, "The Board of Directors continues to remain committed
to a high dividend, which it shall periodically review within the
context of earnings growth, opportunities to re-invest in the business,
and sustainability. Management is confident that opportunities for
acquisition growth will arise in the mid to long term and believe that
when tangible growth opportunities are realized, the incremental
earnings growth will naturally lower our payout ratio as we re-invest
funds into growth opportunities. Until tangible and significant growth
opportunities are realized, we will continue to reward investors by way
of a high dividend."



Third Quarter 2012 Highlights




  • The Company generated net earnings of $6.8 million or earnings per share
    of $0.344 versus earnings per share of $0.263 in the third quarter of
    2011.�� Pre-tax earnings increased by $2.3 million to $9.2 million in
    the third quarter of 2012 as compared to $6.9 million in the same
    period in 2011.






  • Same store revenue increased by 8.0% in the third quarter of 2012,
    compared to the same quarter in 2011.�� Same store gross profit
    increased by 7.9% in the third quarter of 2012, compared to the same
    quarter in 2011.






  • Revenue from existing and new dealerships increased 11.0% to $298.7
    million
    in the third quarter of 2012 from $269.1 million in the same
    quarter in 2011.






  • Gross profit from existing and new dealerships increased 11.6% to $50.1
    million
    in the third quarter of 2012 from $44.9 million in the same
    quarter in 2011.






  • EBITDA increased 29.3% to $10.6 million in the third quarter of 2012
    from $8.2 million in the same quarter in 2011.






  • Free cash flow decreased significantly in the third quarter of 2012 to
    $0.004 per share as compared to $10.2 million and $0.511 per share in
    the third quarter of 2011, mainly due a land and building purchase in
    Q3 2012.






  • Adjusted free cash flow increased to $9.5 million in the third quarter
    of 2012 or $0.48 per share as compared to $7.8 million or $0.39 per
    share in 2011.






  • Return on capital employed on a trailing 12 month basis of 22.8% as
    compared to 19.1% at September 30, 2011.



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.



The following table summarizes the dividends declared by the Company in
2012:






























































(In thousands of dollars) �� �� �� �� �� �� �� �� ��

��

��

��

��

��

��

��

��

��

��

Total

Record date

��

��

��

Payment date

��

��

��

��

��

Declared

Paid

��

��

��

��

��

��

��

��

��

��

$

$

February 28, 2012

May 31, 2012

August 31, 2012

November 30, 2012

��

��

��

March 15, 2012

June 15, 2012

September 17, 2012

December 17, 2012

��

��

��

��

��

2,783

2,982

3,181

3,380

2,783

2,982

3,181

-





On November 8, 2012, the Board declared a quarterly eligible dividend of
$0.17 per common share on AutoCanada's outstanding Class A common
shares, payable on December 17, 2012 to shareholders of record at the
close of business on November 30, 2012.�� The quarterly eligible
dividend of $0.17 represents an annual dividend rate of $0.68 per
share.



Eligible dividend designation



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 Inc.
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 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.




















































































































































































































































































































































































































































































































































(In thousands of dollars except Operating

Data and gross profit %) ��

�� �� �� �� �� �� ��

��

��

��

��

��

��

��

��

Q4

2010

Q1

2011

Q2

2011

Q3

2011

Q4

2011

Q1

2012

Q2

2012

Q3

2012

��

��

��

��

��

��

��

��

��

��

Income Statement Data

��

��

��

��

��

��

��

��

��

New vehicles

113,967

128,304

196,850

172,688

142,880

147,383

186,649

190,139

��

Used vehicles

45,414

44,906

52,054

55,351

53,719

60,454

62,822

62,816

��

Parts, service & collision repair

28,351

26,539

28,374

26,980

28,673

27,029

29,004

28,593

��

Finance, insurance & other

10,151

11,125

13,588

14,115

13,046

13,659

16,512

17,133

Revenue

197,883

210,874

290,866

269,134

238,318

248,525

294,987

298,681

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

New vehicles

9,023

9,725

13,974

12,740

11,267

12,046

14,646

15,461

��

Used vehicles

3,659

3,486

4,301

5,020

4,573

4,412

4,238

3,994

��

Parts, service & collision repair

13,994

13,277

15,159

14,492

14,551

14,004

15,227

15,078

��

Finance, insurance & other

9,050

9,959

12,129

12,647

11,853

12,398

14,939

15,579

Gross profit

35,725

36,435

45,563

44,899

42,244

42,860

49,050

50,112

��

��

��

��

��

��

��

��

��

Gross profit %

18.1%

17.3%

15.7%

16.7%

17.7%

17.2%

16.6%

16.8%

Operating expenses

32,010

31,891

35,127

35,742

34,086

35,381

37,661

38,361

Operating exp. as % of gross profit

89.6%

87.5%

77.1%

79.6%

80.7%

82.6%

76.9%

76.6%

Finance costs - floorplan

1,594

1,685

2,310

2,190

1,871

1.935

2,511

2,645

Finance costs - long-term debt

332

283

323

296

234

230

256

267

Reversal of impairment of intangibles

(8,059)

-

-

-

(25,543)

-

-

-

Income taxes

2,418

690

2,029

1,646

8,144

1,441

2,216

2,379

Net earnings 4

7,575

1,994

5,950

5,230

23,608

4,113

6,711

6,807

EBITDA 1, 4

3,469

4,047

9,319

8,216

7,547

6,808

10,210

10,592

Basic earnings (loss) per share

0.381

0.100

0.299

0.263

1.187

0.207

0.338

0.344

Diluted earnings (loss) per share

0.381

0.100

0.299

0.263

1.187

0.207

0.338

0.344

��

��

��

��

��

��

��

��

��

��

Operating Data

��

��

��

��

��

��

��

��

Vehicles (new and used) sold

5,219

5,826

8,210

7,649

6,313

6,836

8,154

8,087

New retail vehicles sold

3,008

3,050

4,158

3,886

3,405

3,434

4,400

4,410

New fleet vehicles sold

306

796

1,900

1,361

775

969

1,313

1,265

Used retail vehicles sold

1,905

1,980

2,152

2,402

2,133

2,433

2,441

2,412

Number of service & collision repair

orders completed

77,037

72,360

80,851

76,176

75,911

74,439

78,104

78,944

Absorption rate 2

86%

80%

91%

90%

91%

81%

89%

89%

# of dealerships at period end

23

23

22

22

24

24

24

24

# of same store dealerships 3

21

22

21

21

21

21

21

22

# of service bays at period end

339

339

322

322

333

333

333

333

Same store revenue growth 3

2.4%

2.7%

19.3%

21.6%

24.8%

20.2%

2.4%

8.0%

Same store gross profit growth 3

2.9%

2.9%

8.2%

22.9%

20.6%

18.3%

7.1%

7.9%

��

��

��

��

��

��

��

��

��

Balance Sheet Data

��

��

��

��

��

��

��

��

Cash and cash equivalents

37,541

39,337

43,837

49,366

53,641

53,403

51,198

54,255

Accounts receivable

32,832

42,108

51,539

44,172

42,448

51,380

52,042

54,148

Inventories

118,088

134,710

149,481

159,732

136,869

155,778

201,302

193,990

Revolving floorplan facilities

124,609

152,075

172,600

175,291

150,816

178,145

221,174

212,840























��

��

1��

EBITDA has been calculated as described under "NON-GAAP MEASURES".

2��

Absorption has been calculated as described under "NON-GAAP MEASURES".

3��

Same store revenue growth & same store gross profit growth is calculated
using franchised automobile dealerships that we have owned for at least
2 full years.

4��

The results from operations have been lower in the first and fourth
quarters of each year, largely due to consumer purchasing patterns
during the holiday season, inclement weather and the reduced number of
business days during the holiday season. As a result, our financial
performance is generally not as strong during the first and fourth
quarters than during the other quarters of each fiscal year. The timing
of acquisitions may have also caused substantial fluctuations in
operating results from quarter to quarter.








The following table summarizes the results for the three and nine month
periods ended September 30, 2012 on a same store basis by revenue
source and compare these results to the same periods in 2011.























































































































































































��

Same Store Revenue and Vehicles Sold

��

For the Three Months Ended

��

For the Nine Months Ended

��

(In thousands of dollars except %

change and vehicle data)

September 30,

2012

September 30,

2011

% Change

��

September 30,

2012

September 30,

2011

% Change

��

��

��

��

��

��

��

��

Revenue Source

��

��

��

��

��

��

��

New vehicles

185,963

172,688

7.7%

��

511,856

485,476

5.4%

Used vehicles

60,402

55,351

9.1%

��

180,511

149,638

20.6%

Finance & insurance and other

16,499

14,114

16.9%

��

45,881

38,210

20.1%

Subtotal

262,864

242,153

��

��

738,248

673,324

��

Parts, service & collision repair

27,826

26,978

3.1%

��

82,413

79,560

3.6%

Total

290,690

269,131

8.0%

��

820,661

752,884

9.0%

��

��

��

��

��

��

��

��

New vehicles - retail sold

4,278

3,886

10.1%

��

11,866

10,812

9.7%

New vehicles - fleet sold

1265

1,361

(7.1)%

��

3,547

3,961

(10.5)%

Used vehicles sold

2,326

2,402

(3.2)%

��

7,063

6,445

9.6%

Total

7,869

7,649

2.9%

��

22,476

21,218

5.9%

Total vehicles retailed

6,604

6,288

5.0%

��

18,929

17,257

9.7%

��

��

��

��

��

��

��

��





The following table summarizes the results for the three and nine month
periods ended September 30, 2012 on a same store basis by revenue
source and compare these results to the same periods in 2011.




























































































































































































































































��

Same Store Gross Profit and Gross Profit Percentage

��

For the Three Months Ended

For the Nine months Ended

��

Gross Profit

��

Gross Profit %

��

Gross Profit

��

Gross Profit %

��

(In thousands of

dollars except %

change and gross

profit %)

September 30, 2012

September 30, 2011

%

Change

September 30, 2012

September 30, 2011

% Change

September 30, 2012

September 30, 2011

%

Change

September 30, 2012

September 30, 2011

%

Change

��

��

��

��

��

��

��

��

��

��

��

��

��

Revenue Source

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

New vehicles

14,953

12,727

17.5%

8.0%

7.4%

0.7%

40,720

35,794

13.8%

8.0%

7.4%

0.6%

��

��

��

��

��

��

��

��

��

��

��

��

��

Used vehicles

3,806

5,019

(24.2)%

6.3%

9.1%

(2.8)%

12,121

12,767

(5.1)%

6.7%

8.5%

(1.8)%

��

��

��

��

��

��

��

��

��

��

��

��

��

Finance &

insurance and other

15,024

12,646

18.8%

91.1%

89.6%

1.5%

41,673

34,204

21.8%

90.8%

89.5%

1.3%

��

��

��

��

��

��

��

��

��

��

��

��

��

Subtotal

33,783

30,392

��

��

��

��

94,614

82,765

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

Parts, service &

collision repair

14,645

14,507

0.9%

52.6%

53.8%

(1.1)%

43,102

41,722

3.3%

52.3%

52.4%

(0.1)%

��

��

��

��

��

��

��

��

��

��

��

��

��

Total

48,428

44,899

7.9%

16.7%

16.7%

0.0%

137,616

124,487

10.5%

16.8%

16.5%

0.3%





















































































































































































































































































��

��

��

AutoCanada Inc.

Condensed Interim Consolidated Statements of Comprehensive Income

(Unaudited)

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


��

��

��

��

��

��

Three month

period ended

Three month

period ended

Nine month

period ended

Nine month

period ended

��

September 30,

2012

$

September 30,

2011

$

September 30,

2012

$

September 30,

2011

$

Revenue (Note 6)

������������298,681��

������������269,134��

������������842,193��

������������770,874��

��

��

��

��

��

Cost of sales (Note 7)

������������(248,569)��

������������(224,235)��

������������(700,172)��

������������(643,965)��

��

��

��

��

��

Gross profit

������������50,112��

������������44,899��

������������142,021��

������������126,909��

��

��

��

��

��

Operating expenses (Note 8)

������������(38,361)��

������������(35,742)��

������������(111,402)��

������������(102,760)��

��

��

��

��

��

Operating profit before other income

������������11,751��

������������9,157��

������������30,619��

������������24,149��

(Loss) Gain on disposal of assets

������������(1)��

������������1��

������������(61)��

������������29��

Income from investment in associate (Note 11)

������������130��

������������-��

������������213��

������������-��

Operating profit

������������11,880��

������������9,158��

������������30,771��

������������24,178��

Finance costs (Note 9)

������������(3,136)��

������������(2,651)��

������������(8,410)��

������������(7,564)��

Finance income (Note 9)

������������442��

������������369��

������������1,303��

������������925��

��

��

��

��

��

Net comprehensive income for the period

��

��

��

��

��

before taxation

������������9,186��

������������6,876��

������������23,664��

������������17,539��

Income tax (Note 10)

������������2,379��

������������1,646��

������������6,036��

������������4,365��

��

��

��

��

��

Net comprehensive income for the period

������������6,807��

������������5,230��

������������17,628��

������������13,174��

��

��

��

��

��

��

��

��

��

��

Earnings per share��

��

��

��

��

Basic��

������������0.344��

������������0.263��

������������0.884��

������������0.663��

Diluted��

������������0.344��

������������0.263��

������������0.884��

������������0.663��

��

��

��

��

��

��

��

��

��

��

Weighted average shares��

��

��

��

��

Basic��

������������19,804,014��

������������19,880,930��

������������19,853,694��

������������19,880,930��

Diluted��

������������19,804,014��

������������19,880,930��

������������19,853,694��

������������19,880,930��

��

The accompanying notes are an integral part of these condensed interim
consolidated financial statements.









Approved on behalf of the Company:



(Signed) "Gordon R. Barefoot", Director��������(Signed) "Robin Salmon",
Director




































































































































































AutoCanada Inc.

Condensed Interim Consolidated Statements of Financial Position

(Unaudited)

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


��

��

��

��

September 30,

������������2012��

(Unaudited)

$

December 31,

������������2011

(Audited)

$

ASSETS

��

��

Current assets

��

��

Cash and cash equivalents

������������54,255��

������������53,641��

Trade and other receivables (Note 12)

������������54,148��

������������42,448��

Inventories (Note 13)

������������193,990��

������������137,016��

Other current assets

������������1,794��

������������1,120��

��

������������304,187��

������������234,225��

Property and equipment

������������37,125��

������������25,975��

Investment in associate (Note 11)

������������4,367��

������������-��

Intangible assets

������������66,181��

������������66,181��

Goodwill

������������380��

������������380��

Other long-term assets

������������7,810��

������������7,609��

��

������������420,050��

������������334,370��

LIABILITIES

��

��

Current liabilities

��

��

Trade and other payables (Note 15)

������������35,665��

������������32,279��

Revolving floorplan facilities (Note 11)

������������212,840��

������������150,816��

Current tax payable

������������4,600��

������������2,046��

Current lease obligations (Note 17)

������������1,783��

������������1,204��

Current indebtedness (Note 16)

������������5,973��

������������2,859��

��

������������260,861��

������������189,204��

Long-term indebtedness (Note 16)

������������26,039��

������������20,115��

Deferred tax

������������11,897��

������������12,056��

��

������������298,797��

������������221,375��

EQUITY

������������121,253��

������������112,995��

��

������������420,050��

������������334,370��

��

��

��

The accompanying notes are an integral part of these condensed interim
consolidated financial statements.

































































































































































































��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

AutoCanada Inc.

Condensed Interim Consolidated Statements of Changes in Equity

For the Periods Ended

(Unaudited)

(in thousands of Canadian dollars)

��

��

��

��

��

��

��

��

Share

capital

$

Treasury

shares

$

Contributed

surplus

$

Total

capital

$

Accumulated

deficit

$

Equity

$

Balance,�� January 1, 2012��

������������190,435��

������������-��

������������3,918��

������������194,353��

������������(81,358)��

������������112,995��

Net comprehensive income

������������-��

������������-��

������������-��

������������-��

������������17,628��

������������17,628��

Dividends declared on common shares

������������-��

������������-��

������������-��

������������-��

������������(8,935)��

������������(8,935)��

Common shares repurchased (Note 20)

������������-��

������������(910)��

������������-��

������������(910)��

������������-��

������������(910)��

Share-based compensation

������������-��

������������-��

������������475��

������������475��

������������-��

������������475��

Balance, September 30, 2012

������������190,435��

������������(910)��

������������4,393��

������������193,918��

������������(72,665)��

������������121,253��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

Share

capital

$

Treasury

shares

$

Contributed

surplus

$

Total

capital

$

Accumulated

deficit

$

Equity

$

Balance, January 1, 2011��

������������190,435��

������������-��

������������3,918��

������������194,353��

������������(111,979)��

������������82,374��

Net comprehensive income

������������-��

������������-��

������������-��

������������-��

������������13,174��

������������13,174��

Dividends declared on common shares

������������-��

������������-��

������������-��

������������-��

������������(3,777)��

������������(3,777)��

Balance, September 30, 2011

������������190,435��

������������-��

������������3,918��

������������194,353��

������������(102,582)��

������������91,771��

��

��

��

��

��

��

��

The accompanying notes are an integral part of these condensed interim
consolidated financial statements.






















































































































































































































































































































��

��

��

AutoCanada Inc.

Condensed Interim Consolidated Statements of Cash Flows

For the Periods Ended

(Unaudited)

(in thousands of Canadian dollars)

��

��

��

��

��

��

��

Three month

period ended

September 30,

2012

Three month

period ended

September 30,

2011

Nine month

period ended

September 30,

2012

Nine month

period ended

September 30,

2011

Cash flows from operating activities:

��

��

��

��

��

��

Net comprehensive income

��

��

������������6,807��

������������5,230��

������������17,628��

������������13,174��

Income taxes (Note 10)

��

��

������������2,379��

������������1,646��

������������6,036��

������������4,365��

Amortization of prepaid rent

��

��

������������113��

������������113��

������������339��

������������339��

Amortization of property and equipment (Note 8)

��

��

������������1,139��

������������1,044��

������������3,189��

������������3,141��

Gain (Loss) on disposal of assets

��

��

������������1��

������������(1)��

������������61��

������������(29)��

Share-based compensation

��

��

������������205��

������������-��

������������565��

������������-��

Income from investment in associate (Note 11)

��

��

������������(130)��

������������-��

������������(213)��

������������-��

Income taxes paid

��

��

������������(485)��

������������-��

������������(3,584)��

������������-��

Net change in non-cash working capital

��

��

������������(794)��

������������2,818��

������������(4,704)��

������������(681)��

��

��

��

������������9,235��

������������10,850��

������������19,317��

������������20,309��

Cash flows from investing activities:

��

��

��

��

��

��

Business acquisitions (Note 11)

��

��

������������-��

������������-��

������������(4,154)��

������������-��

Purchases of property and equipment (Note 14)

��

��

������������(9,161)��

������������(694)��

������������(13,150)��

������������(2,236)��

Disposal of other assets

��

��

������������-��

������������2��

������������-��

������������7��

Prepayments of rent (Note 21)

��

��

������������-��

������������(540)��

������������(540)��

������������(1,620)��

Proceeds on sale of property and equipment

��

��

������������-��

������������-��

������������28��

������������-��

Proceeds on divestiture of subsidiary

��

��

������������-��

������������-��

������������-��

������������1,464��

��

��

��

������������(9,161)��

������������(1,232)��

������������(17,816)��

������������(2,385)��

Cash flows from financing activities:

��

��

��

��

��

��

Proceeds from long-term debt (Note 16)

��

��

������������6,250��

������������-��

������������9,250��

������������-��

Repayment of long-term indebtedness

��

��

������������(98)��

������������(2,102)��

������������(292)��

������������(2,322)��

Common shares repurchased (Note 20)

��

��

������������-��

������������-��

������������(910)��

������������-��

Dividends paid

��

��

������������(3,169)��

������������(1,987)��

������������(8,935)��

������������(3,777)��

��

��

��

������������2,983��

������������(4,089)��

������������(887)��

������������(6,099)��

Increase in cash

��

��

������������3,057��

������������5,529��

������������614��

������������11,825��

Cash and cash equivalents at beginning of period

��

��

������������51,198��

������������43,837��

������������53,641��

������������37,541��

��

��

��

��

��

��

��

Cash and cash equivalents at end of period

��

��

������������54,255��

������������49,366��

������������54,255��

������������49,366��

��

��

��

��

��

��

��

The accompanying notes are an integral part of these condensed interim
consolidated financial statements.






ABOUT AUTOCANADA



AutoCanada is one of Canada's largest multi-location automobile
dealership groups, currently operating 24 wholly owned franchised
dealerships and 2 dealership investments in British Columbia, Alberta,
Manitoba, Ontario, New Brunswick and Nova Scotia. In 2011, our
dealerships sold approximately 28,000 vehicles and processed
approximately 300,000��service and collision repair orders in our 333
service bays during that time.



Our dealerships derive their revenue from the following four
inter-related business operations: new vehicle sales; used vehicle
sales; parts, service and collision repair; and finance and insurance.
While new vehicle sales are the most important source of revenue, they
generally result in lower gross profits than used vehicle sales, parts,
service and collision repair operations and finance and insurance
sales. Overall gross profit margins increase as revenues from higher
margin operations increase relative to revenues from lower margin
operations. We earn fees for arranging financing on new and used
vehicle purchases on behalf of third parties.�� Under our agreements
with our retail financing sources we are required to collect and
provide accurate financial information, which if not accurate, may
require us to be responsible for the underlying loan provided to the
consumer.



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 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",
"expect", "plan", "seek", "may", "intend", "likely", "will", "believe"
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 document.



The Company's Annual Information Form and other documents filed with
securities regulatory authorities (accessible through the SEDAR website
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.



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.�� We list and define these "NON-GAAP MEASURES"
below:



EBITDA



EBITDA is a measure commonly reported and widely used by investors as an
indicator of a company's operating performance and ability to incur and
service debt, and as a valuation metric.�� The Company believes EBITDA
assists investors in comparing a company's performance on a consistent
basis without regard to depreciation and amortization and asset
impairment charges which are non-cash in nature and can vary
significantly depending upon accounting methods or non-operating
factors such as historical cost.�� References to "EBITDA" are to
earnings before interest expense (other than interest expense on
floorplan financing and other interest), income taxes, depreciation,
amortization and asset impairment charges.



EBIT



EBIT is a measure used by management in the calculation of Return on
capital employed (defined below).�� Management's calculation of EBIT is
EBITDA (calculated above) less depreciation and amortization.



Free Cash Flow



Free cash flow is a measure used by management to evaluate its
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 growth or distribution of the Company.�� 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
expenditures (not including acquisitions of dealerships and dealership
facilities).



Adjusted Free Cash Flow



Adjusted free cash flow is a measure used by management to evaluate its
performance. Adjusted free cash flow is considered relevant because it
provides an indication of how much cash generated by operations before
changes in non-cash working capital is available after deducting
expenditures for non-growth capital assets.�� It shall be noted that
although we consider this measure to be adjusted 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 adjusted free cash
flow may not actually be available for growth or distribution of the
Company.�� References to "Adjusted free cash flow" are to cash provided
by (used in) operating activities (before changes in non-cash working
capital balances) less non-growth capital expenditures.



Adjusted Average Capital Employed



Adjusted average capital employed is a measure used by management to
determine the amount of capital invested in AutoCanada and is used in
the measure of Adjusted Return on Capital Employed (described below).��
Adjusted average capital employed is calculated as the average balance
of interest bearing debt for the period (including current portion of
long term debt, excluding revolving floorplan facilities) and the
average balance of shareholders equity for the period, adjusted for
impairments of intangible assets, net of deferred tax.�� Management does
not include future income tax, non-interest bearing debt, or revolving
floorplan facilities in the calculation of adjusted average capital
employed as it does not consider these items to be capital, but rather
debt incurred to finance the operating activities of the Company.



Absorption Rate



Absorption rate is an operating measure commonly used in the retail
automotive industry as an indicator of the performance of the parts,
service and collision repair operations of a franchised automobile
dealership. Absorption rate is not a measure recognized by GAAP and
does not have a standardized meaning prescribed by GAAP. Therefore,
absorption rate may not be comparable to similar measures presented by
other issuers that operate in the retail automotive industry.��
References to ''absorption rate'' are to the extent to which the gross
profits of a franchised automobile dealership from parts, service and
collision repair cover the costs of these departments plus the fixed
costs of operating the dealership, but does not include expenses
pertaining to our head office. For this purpose, fixed operating costs
include fixed salaries and benefits, administration costs, occupancy
costs, insurance expense, utilities expense and interest expense (other
than interest expense relating to floor plan financing) of the
dealerships only.



Average Capital Employed



Average capital employed is a measure used by management to determine
the amount of capital invested in AutoCanada and is used in the measure
of Return on Capital Employed (described below).�� Average capital
employed is calculated as the average balance of interest bearing debt
for the period (including current portion of long term debt, excluding
revolving floorplan facilities) and the average balance of shareholders
equity for the period.�� Management does not include future income tax,
non-interest bearing debt, or revolving floorplan facilities in the
calculation of average capital employed as it does not consider these
items to be capital, but rather debt incurred to finance the operating
activities of the Company.



Return on Capital Employed



Return on capital employed is a measure used by management to evaluate
the profitability of our invested capital.�� As a corporation,
management of AutoCanada may use this measure to compare potential
acquisitions and other capital investments against our internally
computed cost of capital to determine whether the investment shall
create value for our shareholders.�� Management may also use this
measure to look at past acquisitions, capital investments and the
Company as a whole in order to ensure shareholder value is being
achieved by these capital investments.�� Return on capital employed is
calculated as EBIT (defined above) divided by Average Capital Employed
(defined above).



Adjusted Return on Capital Employed



Adjusted return on capital employed is a measure used by management to
evaluate the profitability of our invested capital.�� As a corporation,
management of AutoCanada may use this measure to compare potential
acquisitions and other capital investments against our internally
computed cost of capital to determine whether the investment shall
create value for our shareholders.�� Management may also use this
measure to look at past acquisitions, capital investments and the
Company as a whole in order to ensure shareholder value is being
achieved by these capital investments.�� Adjusted return on capital
employed is calculated as EBIT (defined above) divided by Adjusted
Average Capital Employed (defined above).



Cautionary Note Regarding Non-GAAP Measures



EBITDA, EBIT, Free Cash Flow, Adjusted Free Cash Flow, Absorption Rate,
Average Capital Employed and Return on Capital Employed 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 EBITDA, EBIT, Free Cash Flow, Adjusted
Free Cash Flow, Absorption Rate, Average Capital Employed and Return on
Capital Employed may differ from the methods used by other issuers.
Therefore, the Company's EBITDA, EBIT, Free Cash Flow, Adjusted Free
Cash Flow, Absorption Rate, Average Capital Employed and Return on
Capital Employed may not be comparable to similar measures presented by
other issuers.



Additional information about AutoCanada Inc. is available at the
Company's website at www.autocan.ca and www.sedar.com.



SOURCE: AutoCanada Inc.







For further information:

Jeff Christie, CA

Vice-President, Finance

Phone:�� (780) 732-7164���� Email:��jchristie@autocan.ca









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