AUTOCANADA ANNOUNCES THIRD QUARTER RESULTS

Executive Summary

• AutoCanada reported Q3 2025 revenue of C$1,201.5 M, down 14.9% year‑over‑year, and posted a net loss from continuing operations of $(2.9) M versus a profit of $27.2 M in Q3 2024.
• Adjusted EBITDA fell 7.9% to C$58.1 M; however, the adjusted EBITDA margin improved slightly to 4.8%.
• The company continued its cost‑transformation program, achieving a 10.7% reduction in operating expenses before depreciation and a 44.3% drop in floorplan financing expense.

Key Details

• Revenue: C$1,201.5 M (−14.9% YoY)
• Same‑store revenue: C$1,200.2 M (−12.4%)
• Gross profit: C$187.4 M (−22.2%); gross margin fell to 15.6% from 17.1%.
• Operating expenses before depreciation: C$148.8 M (−10.7%); normalized OPEX before depreciation declined 23.4% to C$126.3 M.
• Net loss – continuing operations: $(2.9) M (−110.7%) vs. $27.2 M profit in Q3 2024.
• Diluted EPS – continuing: $(0.14) vs. $1.09 YoY.
• Adjusted EBITDA (total): C$58.1 M (−7.9%); margin 4.8% (+0.3 ppts).
• Collision segment revenue: C$37.5 M (+19.2% YoY) with gross profit of C$17.3 M (‑1.1%).
• Vehicle sales: New units sold 7,898 (‑17.7%); Used units sold 10,048 (‑24.3%).
• Floorplan financing expense: C$8.9 M (‑44.3%) due to lower inventory and interest rates.
• Debt metrics: Total net funded debt/EBITDA ratio improved marginally to 3.40× from 3.42×.

Recent Developments (material to operations)

• Divestitures: Definitive agreements to sell 13 U.S. franchised dealerships for ~C$82.7 M (incl. C$6.4 M real‑estate) – closing expected within six months.
• Asset sales: Completed cash sales of several Illinois dealership assets: Crystal Lake ($11.9 M), Palatine group ($12.0 M), North City Honda ($19.8 M).
• Acquisition: Completed acquisition of Doug’s Place Strathcona collision/re‑finish facility (Edmonton) on Oct 6 2025.
• Leadership changes: Interim CEO appointed (Samuel Cochrane); Executive Chair and several senior officers transitioning out; CFO promoted to interim CEO on Oct 28 2025.
• Credit outlook: S&P revised rating outlook from Negative to Stable on Sep 22 2025.

Outlook & Guidance

• Management reaffirmed focus on completing the cost‑transformation plan targeting $115 M of annual run‑rate savings by year‑end 2025.
• Anticipates continued improvement in operating expense efficiency and incremental revenue growth from expanded collision operations and the new ACX framework.

Notable Quotes

“This quarter reflects a period of transition as we work to complete the most significant cost transformation in AutoCanada's history… our cost reduction initiatives remain firmly on track…” – Samuel Cochrane, Interim CEO & CFO.