Edmonton-based dealer group AutoCanada Inc., posted strong financial results for the quarter ending on June 30, 2014. These included a 19.8 per cent increase in revenue to $465 million, a 20.4 per cent increase in gross profit to $78.0 million and a 16.9 per cent increase in pre-tax earnings from $14.8 million to $17.3 million.
Speaking in response to the posted second quarter results, Pat Priestner, Chairman and CEO of AutoCanada Inc., noted that the second quarter was “productive” and that with the company having completed seven dealership acquisitions, as well as two additional acquisitions in early July, “we are pleased with the quality of dealerships we have acquired, which includes the Hyatt Group of Dealerships in Calgary, our largest acquisition to date.” Additionally, through AutoCanada’s acquisition of BMW Canbec and MINI Mont Royal, in Montreal, Que., the company has also acquired two new brands (BMW and MINI) as well as branching out into a new market (Quebec). Priestner also noted that the “expansion of our Saskatoon platform with the addition of Dodge City,” provides Auto Canada with “one of the highest volume Chrysler Dodge Jeep Ram stores in the Prairies.”
Priestner further added, “our experience over the past 18 months has made it clear to us that dealership succession has become a key issue in the Canadian automotive retail market, and, as a result, the company increased its acquisition guidance in June of 2014. As the deal pipeline remains strong, management maintains this guidance and is confident that, in addition to acquisitions completed to date, it shall add an additional 8 to 10 dealerships by May 31, 2015.” Priestner said that in order to fund the higher rate of growth, the company “successfully completed a $150 million bond offering in May, followed in early July by a $200 million equity offering.” He said this will provide AutoCanada “with the necessary liquidity to enable it to execute upon this increased guidance, which we believe will create substantial shareholder value in the future.”
Second Quarter 2014 Highlights include:
- Company generated net earnings of $12.8 million (earnings per share of $0.588 versus earnings per share of $0.532 in the second quarter of 2013). Pre-tax earnings increased by $2.5 million to $17.3 million in the second quarter of 2014 as compared to $14.8 million in the same period in 2013;
- Same store revenue increased by 4.1% in the second quarter of 2014, compared to the same quarter in 2013. Same store gross profit increased by 5.4% in the second quarter of 2014, compared to the same quarter in 2013;
- Revenue from existing and new dealerships increased 19.8% to $465.3 million in the second quarter of 2014 from $388.4 million in the same quarter in 2013;
- Gross profit from existing and new dealerships increased 20.4% to $78.0 million in the second quarter of 2014 from $64.9 million in the same quarter in 2013;
- EBITDA increased 31.5% to $21.7 million in the second quarter of 2014 from $16.5 million in the same quarter in 2013;
- Free cash flow decreased to $9.9 million in the second quarter of 2014 or $0.45 per share as compared $13.5 million or $0.66 per share in the first quarter of 2013;
- Adjusted free cash flow increased to $15.5 million in the second quarter of 2014 or $0.71 per share as compared to $13.4 million or $0.66 per share in 2013.
