AUTOCANADA ANNOUNCES SECOND QUARTER RESULTS

Executive Summary

• AutoCanada reported its financial results for the second quarter ended June 30, 2025, showing a significant improvement in profitability compared to the prior year, driven by cost-saving initiatives and improved gross margins in used vehicles and collision repair.
• The company announced a leadership transition, with Executive Chairman Paul Antony stepping down and the Board initiating a search for a new CEO, while continuing to execute its transformation plan focused on deleveraging and exiting the U.S. market.
• AutoCanada raised its annualized cost savings target to $115 million (from $100 million) and provided updates on the divestiture of its U.S. operations, including definitive agreements to sell 13 dealerships for approximately $82.7 million.

Key Details

• Revenue: $1,338.2 million for continuing operations, a decrease of 3.1% from $1,381.2 million in the prior year.
• Net Income: $18.9 million from total operations (compared to a net loss of $33.1 million in the prior year); $18.9 million from continuing operations (compared to $3.9 million in the prior year).
• Earnings Per Share: Diluted net income per share from continuing operations was $0.72, compared to $0.12 in the prior year.
• Adjusted EBITDA: $68.5 million from total operations (up from $27.0 million); $64.4 million from continuing operations (up from $33.5 million).
• Leverage: Total Net Funded Debt to Bank EBITDA ratio reduced from 4.92x (March 31, 2025) to 3.42x (June 30, 2025).
• Cost Savings: $80.0 million in annualized savings realized to date; target raised to $115.0 million annually by end of 2025. Expected to deliver $48.5 million in net in-year savings by year-end, net of $29.3 million in restructuring costs.
• U.S. Divestiture:
  • Expected total net proceeds of $115.0 to $130.0 million from the sale of remaining U.S. dealerships.
  • On July 16, 2025, entered into definitive agreements to sell 13 franchised dealerships for expected aggregate proceeds of ~$82.7 million (including ~$6.4 million for real estate).
  • On July 29, 2025, sold substantially all operating assets of Crystal Lake Chrysler Dodge Jeep Ram for $9.9 million plus closing adjustments.
  • On April 30, 2025, completed divestiture of North Toronto Auction for $3.3 million.
• Operational Metrics (Continuing Operations):
  • New Retail Vehicles Sold: 8,790 units (down 5.6% YoY).
  • Used Retail Vehicles Sold: 10,452 units (down 21.8% YoY).
  • Gross Profit: $225.4 million (up 2.1% YoY).
  • Gross Profit Percentage: 16.8% (up 0.8 percentage points YoY).
  • Used Vehicle Gross Profit Per Unit: $1,774 (up 133.4% YoY, driven by better inventory management and lapping of a 2024 provision).
  • Operating Expenses (before depreciation): $157.1 million (down 9.0% YoY).
  • Floorplan Financing Expense: $9.0 million (down 48.1% YoY).
• Collision Operations:
  • Revenue: $38.4 million (up 25.7% YoY).
  • Gross Profit: $16.6 million (up 2.7% YoY).
  • Adjusted EBITDA: $3.7 million (up 21.9% YoY).
• Leadership Change: Paul Antony transitioning from Executive Chair; Board has begun search for CEO.

Notable Quotes

• "AutoCanada's second quarter results reflect the momentum we're building as our transformation takes hold. With $80.0 million in annualized savings already realized, we've raised our target to $115.0 million, exceeding the original $100.0 million ambition we committed to at the beginning of this year." — Paul Antony, Executive Chairman
• "Our team is squarely focused on completing the transformation, and we remain on track to deliver $48.5 million in net in-year savings by year-end, even after accounting for $29.3 million in restructuring costs." — Paul Antony, Executive Chairman