Adjusted EBITDA of
- Revenue was
$969.8 million as compared to$708.8 million in the prior year, an increase of 36.8% and the highest first quarter revenue reported in the Company's history - Net income (loss) for the period was
$21.3 million versus$(46.9) million in 2020, which included impairment of non-financial assets of$(31.5) million that was driven by the impact of COVID-19 at the time - Adjusted EBITDA was
$47.2 million versus$5.7 million in the prior year, an increase of 723%; Adjusted EBITDA Pre-IFRS 16 was$36.1 million versus$(4.4) million , an increase of 913%; on a trailing twelve month basis, pre-IFRS 16 Adjusted EBITDA was$111.5 million - Basic earnings per share was
$0.77 , an increase of$2.47 from$(1.70) in the prior year - Outperformed the Canadian new retail vehicle market for the ninth consecutive quarter with same store new retail unit sales increasing 29.8% compared to the Canadian market increase of 15.2% as reported by
DesRosiers Automotive Consultants - Canadian used to new retail unit ratio increased to 1.29 from 1.08 last year and the trailing twelve month ratio improved to 1.01 at Q1 2021 as compared to 0.81 at Q1 2020
- Net indebtedness of $72.6 million at the end of Q1 2021 compares to
$89.5 million at the end of Q4 2020, trailing twelve month free cash flow of$144.6 million compares to$105.0 million in the prior year and net debt leverage on a pre-IFRS 16 basis improves to 0.7x from 1.3x at the end of the prior year
"We delivered another record-setting performance and a ninth consecutive quarter of market-outpacing growth, as the continued execution of our complete business model positions us to sustain top-tier operating performance and support our next leg of growth," said
"The success of our recent financing and strength of our operating platform enables us to remain on offense and take advantage of acquisition opportunities while maintaining our strong balance sheet and financial flexibility. We continue to advance and actively assess strategic acquisition opportunities and have developed a robust pipeline with the goal of diversifying by geography and brands, in addition to expanding our network of used dealerships and collision centres."
"As we begin to gain perspective on the events over the past year and our response to the COVID-19 pandemic and related market impacts, it is increasingly clear that
"While we're incredibly proud of the quarter, we continue to keep our heads down executing as we transition into the summer months, in particular given the breadth of opportunity before us. We also recognize the impact of COVID-19 remains fluid and continue to manage the business accordingly."
2021 First 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 first quarter of 2021 reached
Adjusted EBITDA was
Used retail unit sales increased by 51.9% over the prior year, contributing to the consolidated used to new retail unit ratio improving to 1.18 from 1.02, and to 1.01 on a trailing twelve month ("TTM") basis, while gross profit margin on used vehicles also increased to 6.6% as compared to 4.4% in Q1 2020. For the first time since the inception of Project 50, the average trailing twelve month ("TTM") Canadian used retail unit sales per dealership per month, excluding
Finance and insurance ("F&I") gross profit per retail unit increased by 10.8% or
Proactive inventory management for both new and used vehicles was a key driver to the Company's success in delivering both strong revenue and margin growth across all our business operations in this first quarter. Consolidated gross profit margin increased by 0.8 ppts to 17.3% as compared to the prior year.
Normalized operating expenses as a percent of gross profit was 81.4% (normalized for CEWS income of
Net indebtedness improved by
Subsequent to the quarter-ended
On
Coupled with the strength of our operating performance and resiliency of our business model, the refinancing actions have further solidified our balance sheet and added financial flexibility which will allow us to move forward on acquisitions in a strategic manner.
Looking ahead, while we are confident that the measures we have taken over the past year in response to COVID-19 have strengthened and streamlined the Company's business model, we remain aware that uncertainty continues to exist in the macroeconomic environment given the ongoing challenges associated with the global pandemic. Uncertainties may include potential economic recessions or downturns, continued disruptions to the global automotive manufacturing supply chain and other general economic conditions resulting in reduced demand for vehicle sales and service. We will continue to remain proactive and vigilant in assessing how COVID-19 may impact our organization and remain committed to optimizing and building stability and resiliency into our business model to ensure we are able to drive industry-leading performance regardless of changing market conditions.
Consolidated AutoCanada Highlights
RECORD SETTING FIRST QUARTER
As a result of the continued execution of our complete business model, along with the improvement in market outlook and demand during Q1 2021,
For the three-month period ended
- Revenue was
$969.8 million , an increase of$261.0 million or 36.8% - Total vehicles sold were 18,707, an increase of 4,972 units or 36.2%
- Used retail vehicles sold increased by 3,325 or 51.9%
- Net income (loss) for the period was
$21.3 million (or$0.77 per basic share) versus$(46.9) million (or$(1.70) per basic share) in 2020, which included impairment of non-financial assets of$(31.5) million that was driven by the impact of COVID-19 at the time - Adjusted EBITDA increased by 723% to
$47.2 million , an increase of$41.5 million - COVID-19 related normalizing items in the quarter: CEWS of
$2.9 million , rent subsidy of$0.2 million and forgiveness of$5.4 million of PPP loans received in Q2 2020 forU.S. dealerships. Adjusting for these typically non-recurring income items, normalized Adjusted EBITDA was$38.7 million , ahead of prior year by$33.0 million ; normalized pre-IFRS 16 Adjusted EBITDA was$27.6 million , as compared to$(4.4) million - Ending net indebtedness of
$72.6 million reflected a decrease of$(16.9) million from Q4 2020
Canadian Operations Highlights
OUTPERFORMED CANADIAN NEW RETAIL MARKET FOR NINTH CONSECUTIVE QUARTER
For the ninth consecutive quarter, we outperformed the Canadian market, as same store new retail unit sales increased by 29.8% as compared to the market increase of 15.2%, for brands represented by
Our used vehicle and F&I segments were key drivers of improved earnings in Q1 2021. Same store used vehicle gross profit percentage increased to 6.8% as compared to 5.5% in the prior year and same store F&I gross profit percentage increased to 93.3% as compared to 92.4% in the prior year.
Current period results include the acquisitions of
For the three-month period ended
- Revenue was
$863.8 million , an increase of 37.9% - Total retail vehicles sold were 15,685, an increase of 4,730 units or 43.2%
- Used retail unit sales increased by 3,156 or 55.6%
- For the first time since the inception of Project 50, the average trailing twelve month Canadian used retail unit sales per dealership per month, excluding
Haldimand Motors , reached 50, as compared to 41 in the prior year - Used to new retail units ratio increased to 1.29 from 1.08
- Trailing twelve month ratio improved to 1.01 at Q1 2021 as compared to 0.81 at Q1 2020
- Finance and insurance gross profit per retail unit average increased to
$2,989 , up 11.5% or$309 per unit - Net income for the period was
$21.0 million , up$53.7 million from a net loss of$(32.6) million in 2020, which included impairment of non-financial assets of$(22.7) million - Adjusted EBITDA increased 394.9% to
$43.2 million , an increase of$34.5 million - Adjusting for COVID-19 related CEWS of
$2.9 million , rent subsidy of$0.2 million , normalized Adjusted EBITDA decreases to$40.1 million , ahead of prior year by$31.4 million ; normalized pre-IFRS 16 Adjusted EBITDA was$30.1 million , as compared to$(0.5) million
RETAIL UNIT SALES GROWTH OF 30.9%
Despite facing market headwinds, including inventory shortages and stringent pandemic related restrictions in the
- Revenue was
$106.0 million , an increase of 29.0% - Retail unit sales increased to 2,282 units, up 539 units or 30.9%
- Net income (loss) for the period increased by
$14.5 million to$0.3 million from$(14.2) million in 2020, which included impairment of non-financial assets of$(8.9) million - Adjusted EBITDA was
$4.0 million , an increase of$7.0 million from 2020 - Adjusting for the forgiveness of
$5 .4 million of PPP loans received in Q2 2020, normalized Adjusted EBITDA decreases to$(1.4) million , an increase of$1.6 million from prior year Adjusted EBITDA of$(3.0) million
Same Store Metrics - Canadian Operations
SAME STORE USED RETAIL UNIT SALES GROWTH OF 43.7%
Same store new and used retail unit sales increased by 37.0% to 15,010 units; new retail units increased by 29.8% and used retail units increased by 43.7%. The increase of new retail units by 29.8% outperformed the market increase of 15.2% in the Canadian new vehicle market for the brands represented by
Same store metrics include only Canadian dealerships which have been owned for at least two full years since acquisition.
- Revenue increased to
$790.8 million , an increase of 27.8% - Gross profit increased by
$37.8 million or 35.0% - Used to new retail units ratio increased to 1.19 from 1.08
- New and used retail unit sales increased by 37.0% to 15,010 units
- Used retail unit sales increased by 43.7%, an increase of 2,481 units
- Finance and insurance gross profit per retail unit average increased to
$3,085 , up 15.5% or$413 per unit; gross profit increased to$46.3 million as compared to$29.3 million in the prior year, an increase of$17.0 million or 58.2% - Parts, service and collision repair gross profit increased to
$50.4 million , an increase of 15.0% - Parts, service and collision repair gross profit percentage increased to 54.6% as compared to 48.4% in the prior year, an increase of 6.2 ppts, driven by a combination of a change in product mix and various initiatives to improve margin retention
Financing and Investing Activities and Other Recent Developments
S&P UPGRADES SUPPORT SUCCESSFUL ADD-ON DEBENTURE OFFERING OF
CREDIT FACILITY AMENDED AND EXTENDED
Our focus has been and continues to be on preserving cash and managing liquidity. In the quarter, net indebtedness decreased by
Subsequent to quarter-end, the Company completed the following transactions on
- Amended and extended our existing credit facility for total aggregate bank facilities of
$1.3 billion , with a maturity date ofApril 14, 2024 , maintaining a three-year tenor to our facility - Issued an additional
$125 million add-on to our existing 8.75% senior unsecured notes, dueFebruary 11, 2025 - S&P issued a research update whereby it revised the Company's outlook to stable, raised the issuer credit rating to 'B' from 'B-', and raised the rating of the Company's senior unsecured notes to 'B' from 'CCC+'
First Quarter Financial Information
The following table summarizes the Company's performance for the quarter:
Three Months Ended | ||||
Consolidated Operational Data | 2021 | 2020 | % Change | |
Revenue | 969,824 | 708,826 | 36.8% | |
Gross profit | 167,636 | 117,298 | 42.9% | |
Gross profit % | 17.3% | 16.5% | 0.8% | |
Operating expenses | 127,948 | 116,700 | 9.6% | |
Operating profit (loss) | 41,664 | (28,948) | 243.9% | |
Net income (loss) for the period | 21,334 | (46,853) | 145.5% | |
Basic net income (loss) per share attributable to | 0.77 | (1.70) | 145.3% | |
Diluted net income (loss) per share attributable to | 0.71 | (1.70) | 142.0% | |
Adjusted EBITDA 1 | 47,234 | 5,739 | 723.0% | |
New retail vehicles sold (units) | 8,233 | 6,289 | 30.9% | |
New fleet vehicles sold (units) | 740 | 1,037 | (28.6)% | |
Total new vehicles sold (units) | 8,973 | 7,326 | 22.5% | |
Used retail vehicles sold (units) | 9,734 | 6,409 | 51.9% | |
Total vehicles sold | 18,707 | 13,735 | 36.2% | |
Same store new retail vehicles sold (units) | 6,848 | 5,274 | 29.8% | |
Same store new fleet vehicles sold (units) | 739 | 1,037 | (28.7)% | |
Same store used retail vehicles sold (units) | 8,162 | 5,681 | 43.7% | |
Same store total vehicles sold | 15,749 | 11,992 | 31.3% | |
Same store revenue | 790,798 | 618,859 | 27.8% | |
Same store gross profit | 145,799 | 108,019 | 35.0% | |
Same store gross profit % | 18.4% | 17.5% | 0.9% |
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 | 387,728 | 54,720 | 442,448 | 300,446 | 41,136 | 341,582 | |||||||
Used vehicles | 330,263 | 33,809 | 364,072 | 204,063 | 25,292 | 229,355 | |||||||
Parts, service and collision repair | 95,612 | 12,611 | 108,223 | 90,359 | 12,094 | 102,453 | |||||||
Finance, insurance and other | 50,185 | 4,896 | 55,081 | 31,746 | 3,690 | 35,436 | |||||||
Total revenue | 863,788 | 106,036 | 969,824 | 626,614 | 82,212 | 708,826 | |||||||
New vehicles | 31,224 | 2,364 | 33,588 | 24,121 | 146 | 24,267 | |||||||
Used vehicles | 22,193 | 1,983 | 24,176 | 9,123 | 1,050 | 10,173 | |||||||
Parts, service and collision repair | 51,861 | 6,466 | 58,327 | 43,526 | 6,443 | 49,969 | |||||||
Finance, insurance and other | 46,879 | 4,666 | 51,545 | 29,352 | 3,537 | 32,889 | |||||||
Total gross profit | 152,157 | 15,479 | 167,636 | 106,122 | 11,176 | 117,298 | |||||||
Employee costs | 74,155 | 9,332 | 83,487 | 58,732 | 7,760 | 66,492 | |||||||
Government assistance | (3,101) | (5,398) | (8,499) | — | — | — | |||||||
Administrative costs | 35,512 | 6,916 | 42,428 | 32,966 | 6,410 | 39,376 | |||||||
Facility lease and storage costs | 134 | — | 134 | 237 | — | 237 | |||||||
Depreciation of property and equipment | 3,745 | 309 | 4,054 | 4,098 | 289 | 4,387 | |||||||
Depreciation of right-of-use assets | 5,677 | 667 | 6,344 | 5,626 | 582 | 6,208 | |||||||
Total operating expenses | 116,122 | 11,826 | 127,948 | 101,659 | 15,041 | 116,700 | |||||||
Operating profit (loss) before other income | 36,035 | 3,653 | 39,688 | 4,463 | (3,865) | 598 | |||||||
Operating data | |||||||||||||
New retail vehicles sold 1 | 6,848 | 1,385 | 8,233 | 5,274 | 1,015 | 6,289 | |||||||
New fleet vehicles sold 1 | 739 | 1 | 740 | 1,037 | — | 1,037 | |||||||
Total new vehicles sold 1 | 7,587 | 1,386 | 8,973 | 6,311 | 1,015 | 7,326 | |||||||
Used retail vehicles sold 1 | 8,837 | 897 | 9,734 | 5,681 | 728 | 6,409 | |||||||
Total vehicles sold 1 | 16,424 | 2,283 | 18,707 | 11,992 | 1,743 | 13,735 | |||||||
# of service and collision repair orders completed 2 | 157,338 | 25,531 | 182,869 | 157,463 | 27,989 | 185,452 | |||||||
# 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; 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/q12021-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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