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Weidai Ltd. to Report Fourth Quarter and Full Year 2018 Financial Results on March 27, 2019

Vlad Poptamas

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AutoCanada Inc. (“AutoCanada” or the “Company”) (TSX: ACQ), a multi-location North American automobile dealership group, today reported its financial results for the three and twelve-months ended December 31, 2018. All figures are in Canadian dollars, unless otherwise stated.

2018 Full Year Highlights

  • Consolidated revenues reached $3.2 billion
  • Total vehicles sold (new and used) reached 66,073
  • EBITDA attributable to AutoCanada shareholders totalled $56.3 million, and on an adjusted basis totalled $69.3 million which includes gains totaling $13.9 million from sale-leaseback transactions of dealership properties
  • Diluted earnings per share totalled $(2.85), and on an adjusted basis totalled $0.04

2018 Fourth Quarter Highlights

  • Consolidated revenues totalled $782.8 million
  • Total vehicles sold (new and used) totalled 16,024
  • EBITDA attributable to AutoCanada shareholders totalled $16.5 million, and on an adjusted basis totalled $22.6 million
  • Diluted earnings per share totalled $(0.98), and on an adjusted basis totalled $(0.34)
  • Acquired two new dealerships during the quarter
  • Introduced the Ford brand to the portfolio
  • Divested two underperforming dealerships during the quarter, and one subsequent to quarter end
  • Entered into sale-leaseback transactions totalling approximately $53 million.

“A number of months ago, we set out on an ambitious course to improve our operations and become the industry leader,” said Paul Antony, Executive Chairman. “We have implemented the main parts of our Go Forward Plan in Canadaand we are already seeing strong signs of adoption across our dealership network. As our new initiatives take hold, we foresee very material improvements in our performance in 2019. As such, despite being faced with increased headwinds over the past number of months, we remain committed to delivering on our goals for 2019″

2018 Full Year Highlights

  • Revenue was $3,150.8 million, up 1.6% compared with 2017. Same store revenue declined by 1.9%. However, operating expenses were also up by 11.4% when compared to 2017. This resulted in relatively poor performance in 2018. A large contributor to this was the acquisition of our U.S. Operations in April 2018 as operating expenses in our U.S. Operations exceeded gross profit by $10.3 million.
  • Also, included in operating expenses are management transition costs of $9.8 million, a number of non-recurring expenses such as inventory adjustments, a provision of $2.0 million related to fraud at one of our dealerships in the second quarter, and allowances and writedowns of $3.2 million related to the winding down of operations. Operating expenses as a percentage of gross profit were up to 93.5% from 82.2% in 2017.
  • Gross profit was $508.0 million, down 2.1% compared with 2017, with gross profit as a percentage of revenue decreasing to 16.1% from 16.7%. Same store gross profit declined 3.7% over the same period.
  • New vehicle sales were 43,451, down 0.7% from 2017. Revenue from the sale of new vehicles was $1,802.2 million, down 1.4% from 2017. The sale of new vehicles accounted for 57.2% of the Company’s total revenue and 21.5% of gross profit versus 58.9% of revenue and 25.3% of gross profit in 2017.
  • Used vehicle sales were 22,622, up 16.7% from last year. Revenue from the sale of used vehicles was $756.2 million, up 5.6% from the prior year. The sale of used vehicles accounted for 24.0% of the Company’s total revenue and 8.5% of gross profit, versus 23.1% of revenue and 8.4% of gross profit in 2017.
  • Parts, service and collision repair generated $451.8 million of revenue, up 8.4% from 2017. This accounted for 14.3% of the Company’s total revenue and 44.1% of its gross profit, up from 13.4% of revenue and 41.3% of gross profit in 2017.
  • Finance and insurance generated $140.7 million of revenue, a decrease of 0.4% from 2017. This accounted for 4.5% of the Company’s total revenue and 25.9% of its gross profit, in line with 4.6% of revenue and an increase from 25.0% of gross profit in 2017.
  • EBITDA attributable to AutoCanada shareholders decreased to $56.3 million from $111.8 million in the prior year.
  • Including the impairment of non-financial assets, the Company generated a net loss attributable to AutoCanada shareholders of $(78.1) million (Adjusted net earnings attributable to AutoCanada shareholders of $1.2 million), or $(2.85) per share (Adjusted net earnings per share attributable to AutoCanada shareholders of $0.04) versus net income of $57.8 million in 2017 ($42.7 million on an adjusted basis) or $2.11 per share ($1.56 on an adjusted basis).
  • Included in EBITDA and net earnings are gains totaling $13.9 million from sale-leaseback transactions of dealership properties.
  • Total impairment charges attributable to AutoCanada shareholders  were $95.1 million, or $2.55 basic earnings per share net of tax.

2018 Fourth Quarter Highlights

  • Revenue was $782.8 million, up 6.8% compared with the fourth quarter of 2017. Same store revenue declined by 3.0%.
  • Operating expenses were $125.0 million, up 19.5% from the same period last year. Operating expenses as a percentage of gross profit were up to 97.5% from 83.6% in the same period in 2017.
  • Operating expenses in the U.S. Operations exceeded gross profit by $6.3 million. Included in the U.S. operating expenses is management transition costs of approximately $2.0 million. In addition, the Canadian operating expenses include approximately $3.7 million of non-recurring allowances and provisions.
  • Gross profit was $128.2 million, up 2.4% compared with the same quarter in 2017, with gross profit as a percentage of revenue decreasing to 16.4% from 17.1%. Same store gross profit declined 3.0%.
  • New vehicle sales were 10,331, up 5.2% from the same period in 2017. Revenue from the sale of new vehicles was $432.8 million, up 3.6% from the same period in 2017. The sale of new vehicles accounted for 55.3% of the Company’s total revenue and 20.2% of gross profit versus 57.0% of revenue and 24.0% of gross profit in the fourth quarter of 2017.
  • Used vehicle sales were 5,693, up 22.4% compared with the same quarter last year. Revenue from the sale of used vehicles was $193.0 million, up 10.1% from the same quarter last year. The sale of used vehicles accounted for 24.7% of the Company’s total revenue and 6.7% of gross profit, versus 23.9% of revenue and 6.0% of gross profit in the fourth quarter of 2017.
  • Parts, service and collision repair generated $121.3 million of revenue, up 13.2% from the same period in 2017. This accounted for 15.5% of the Company’s total revenue and 47.1% of its gross profit, up from 14.6% of revenue and 45.5% of gross profit in the same quarter of 2017.
  • Finance and insurance generated $35.7 million of revenue, an increase of 8.2% from the same period in 2017. This accounted for 4.6% of the Company’s total revenue and 26.0% of its gross profit, in line with 4.5% of revenue and up from 24.5% of gross profit in the fourth quarter of 2017.
  • EBITDA attributable to AutoCanada shareholders decreased to $16.5 million from $28.1 million compared with the same quarter last year.
  • Adjusted EBITDA attributable to AutoCanada shareholders increased to $22.6 million from $21.9 million compared with the same quarter last year.
  • Including the impairment of non-financial assets, the Company generated a net loss attributable to AutoCanada shareholders of $(26.9) million (Adjusted net earnings attributable to AutoCanada shareholders of $(9.3) million), or $(0.98) per share (Adjusted net earnings per share attributable to AutoCanada shareholders of $(0.34)) versus net income of $17.1 million in 2017 ($8.9 million on an adjusted basis) or $0.62 per share ($0.33 on an adjusted basis).
  • Included in EBITDA and net earnings is a gain of $9.2 million from a sale-leaseback transaction in respect of four dealership properties.
  • Total impairment charges were $17.8 million in the fourth quarter, or $0.48 basic earnings per share net of tax. The impairment charges in the fourth quarter were attributable to our U.S. Operations.

Fourth Quarter Business Highlights

  • On October 1, 2018, the Company, through a wholly owned subsidiary, AutoCanada M LP, purchased all of the issued and outstanding shares of Ericksen M-B Ltd., which owns and operates a Mercedes-Benz dealership in Edmonton, Alberta, for total cash consideration of $23.9 million. The acquisition was funded through net proceeds of the sale and leaseback transactions with Automotive Properties Real Estate Investment Trust.
  • The Company was awarded the right to a General Motors open point dealership featuring the Chevrolet, Buick and GMC brands in Maple Ridge, BC, a community located in the northeastern sector of Greater Vancouver. The Company will construct an approximately 33,400 square foot facility designed to General Motors image standards, with construction expected to be completed by mid 2020. As part of the Company’s sale-leaseback transaction with Capital Automotive Real Estate Services Inc. (see below), Capital Automotive will fund the construction of the facility.
  • On November 19, 2018, the Company sold substantially all of the operating and fixed assets, including the land and facilities, of North Edmonton Kia, located in Edmonton, AB for cash consideration. Net proceeds of $10.2 millionresulted in a pre-tax gain on divestiture of $0.8 million.
  • On December 1, 2018, the Company, through a wholly owned subsidiary, 2667465 Ontario Inc., purchased all of the issued and outstanding shares of Rose City Ford Sales Limited, which owns and operates a Ford dealership in Windsor, Ontario, for total cash consideration of $24.8 million. At the time of acquisition, Rose City Ford Sales Limited had net working capital of $6.9 million. The acquisition was funded by drawing on the Company’s revolving term facility.
  • On December 17, 2018, the Company sold substantially all of the operating and fixed assets of Courtesy Mitsubishi, located in Calgary, Alberta for cash consideration. Net proceeds of $2.5 million resulted in a pre-tax loss on divestiture of $0.03 million.
  • The Company completed a sale-leaseback transaction for four of its dealership properties with Capital Automotive Real Estate Services Inc.  AutoCanada leased the properties from Capital Automotive under long-term triple net leases. On the transaction, the Company recognized a gain of $9.2 million on the sale of dealership properties. $2.2 million of net proceeds relate to the sale of leasehold improvements on a property it did not own which reduced an impairment charge taken at June 30, 2018. The transaction provided for proceeds of approximately $54.7 million which were used to repay the Company’s credit facility. In addition, Capital Automotive has agreed to fund building improvements and construction. Management expects to incur approximately $32.6 million in Canadaand $20.5 million in the U.S. ($15.0 million USD) for capital requirements in respect of the properties, including the reconstruction of three existing dealerships and the construction of the Maple Ridge Chevrolet Buick GMC Open Point.

Subsequent Events

  • On March 6, 2019, the Company sold substantially all of the operating and fixed assets of Toronto Dodge, located in Toronto, Ontario for cash consideration of $5.0 million.

Management Changes

Raj Juneja has resigned from his position as Chief Financial Officer for personal reasons and will remain as an advisor to effect an orderly transition. The Company has commenced a search for a new Chief Financial Officer. “I would like to thank Raj for his dedicated service to AutoCanada. Raj has been instrumental in  helping AutoCanada with our balance sheet and our overall finance function,” said Paul Antony, Executive Chairman.

William Berman has resigned from his position as President of U.S. Operations and Tamara Darvish has been appointed as the new President of U.S. Operations. Ms. Darvish was previously the Executive Vice President    of DARCARS Automotive Group, the Chief Operating Officer of Pentagon Federal Credit Union and the Chief Operating Officer of Capital Automotive Real Estate Services. “I would like to also thank Bill for his dedicated service to AutoCanada and assisting us in diagnosing and structuring our U.S. Operations,” said Paul Antony, Executive Chairman. “We welcome Tamara to the AutoCanada team. Tamara’s hands-on experience will help  us focus on operational efficiencies in our U.S. business.”

The following table summarizes the Company’s results for the quarter and year ended December 31, 2018:

Three months ended December 31

Year ended December 31

Consolidated Operational Data

2018

2017

% Change

2018

2017

% Change

EBITDA attributable to AutoCanada shareholders1,2

16,521

28,127

(41.3)

%

56,262

111,812

(49.7)

%

Adjusted EBITDA attributable to AutoCanada shareholders1,2

22,638

21,880

3.5

%

69,266

95,410

(27.4)

%

Net (loss) income attributable to AutoCanada shareholders1

(26,892)

17,089

(257.4)

%

(78,083)

57,844

(235.0)

%

Adjusted net earnings attributable to AutoCanada shareholders1,2

(9,299)

8,935

(204.1)

%

1,175

42,665

(97.2)

%

Basic EPS

(0.98)

0.62

(258.1)

%

(2.85)

2.11

(235.1)

%

Adjusted diluted EPS2

(0.34)

0.33

(203.0)

%

0.04

1.55

(97.3)

%

Weighted average number of shares  – Basic

27,417,434

27,389,167

0.1

%

27,399,117

27,379,193

0.1

%

Weighted average number of shares  – Diluted 3

27,417,434

27,498,724

(0.3)

%

28,297,901

27,473,995

3.0

%

New retail vehicles sold (units)

9,214

8,444

9.1

%

36,495

36,076

1.2

%

New fleet vehicles sold (units)

1,117

1,378

(18.9)

%

6,956

7,697

(9.6)

%

New vehicles sold (units)

10,331

9,822

5.2

%

43,451

43,773

(0.7)

%

Used retail vehicles sold (units)

5,693

4,653

22.4

%

22,622

19,379

16.7

%

Total vehicles sold (units)

16,024

14,475

10.7

%

66,073

63,152

4.6

%

Revenue

782,790

733,060

6.8

%

3,150,781

3,101,560

1.6

%

Gross profit

128,204

125,210

2.4

%

507,963

518,629

(2.1)

%

Gross profit %

16.4

%

17.1

%

(4.1)

%

16.1

%

16.7

%

(3.6)

%

Operating expenses

125,040

104,626

19.5

%

474,804

426,253

11.4

%

Operating expenses as % of gross profit

97.5

%

83.6

%

16.7

%

93.5

%

82.2

%

13.7

%

Operating (loss) profit

(576)

26,505

(102.2)

%

(32,648)

118,969

(127.4)

%

Free cash flow2

(7,658)

29,496

(126.0)

%

(28,805)

72,213

(139.9)

%

Adjusted free cash flow2

10,553

15,996

(34.0)

%

9,657

90,786

(89.4)

%

See the Company’s Management’s Discussion and Analysis for the quarter and year ended December 31, 2018 for complete footnote disclosures.

Outlook

Macroeconomic factors create a degree of uncertainty for AutoCanada’s business. Central banks in Canada and the United States have recently raised key interest rates, and there is a possibility of further interest rate hikes over the next year. Higher rates will adversely impact borrowing expenses on variable interest rate debt such as vehicle floorplan financing, which would increase our costs. Monthly loan payments for new and used vehicles are also typically linked to market interest rates, meaning rising interest rates will likely make vehicle ownership less affordable at the same time as other household debt becomes more expensive.

The auto industry in North America is coming off several record-setting years and the sale of new vehicles is beginning to trend downwards.  While many analysts expect sales to remain healthy, most expect a decline in volume in 2019.  Over the last few months there has been greater concern over the strength of the economy in both Canada and the United States. If these concerns materialize, the volume of vehicle sales could decrease more than analysts expect. New car sales in the U.S. dropped more than expected in January and February and many dealers in the U.S. are reacting by shifting to used cars and cutting costs. Some of the blame for the reduction of new car sales over these two months is being placed on the severe weather in the Midwest and the heavy rains in the Southeast and California. Vehicle leasing and manufacturer incentives remain at high levels, particularly as the new model year rolls out. If those incentives are scaled back, it could impact sales volumes.

While macro-economic factors determine total vehicle demand, we expect to deliver materially better results in our Canadian operations as we continue to implement our Go Forward Plan, even if the broader industry faces varying headwinds. This will come through a combination of focusing on less cyclical parts of our business and on lines of our business that generate higher margins. As part of our Go Forward Plan, we expect to materially increase the number of used vehicles we retail.  Margins on used vehicles tend to be higher than new vehicles and retailing more vehicles will increase our returns from our finance and insurance and our parts and service lines of business.  In addition, we are implementing a number of initiatives to increase the returns from our parts, service and collision businesses.

We are also optimizing our finance and insurance offerings for used vehicles at our dealerships. We expect to earn a material profit share on these new offerings. We have also created a new special finance division and a new wholesale division. Our new special finance division will arrange loans for customers who cannot qualify for traditional loans offered by banks and affiliates of vehicle manufacturers. We expect that our special finance division will increase both new and used vehicle sales at our dealerships and through a recently launched online site (www.rightride.ca). We expect that our new wholesale division will be accretive by taking advantage of the arbitrage opportunities with the sale of used vehicles in different geographical locations. Other aspects of the Company’s Go Forward Plan are expected to lead to a decrease in operational expenses at our dealerships and at our collision centres as we better leverage our buying power to achieve meaningful cost reductions in our Canadian operations.

The key issue with our U.S. Operations in 2018 was the high cost structure. We are taking steps to reduce the operating expenses in our U.S. dealerships to be in line with industry norms with a view to bringing our U.S. operations to profitability in 2019. In addition, we are implementing a plan to create operational efficiencies and grow revenues with a view of creating a sustainable platform with the U.S. assets that we currently own that can withstand the economic climate over the next few years.

The fragmented nature of the automotive dealership sector will provide us with the opportunity to diversify our geographical presence and drive earnings growth through accretive acquisitions. While our principal focus at this time is on executing our Go Forward plan and optimizing all of our lines of business, we expect to grow our business by making accretive acquisitions as opportunities may arise.

Go Forward Plan

Following a comprehensive review of the Company’s operations, the Board of Directors endorsed a Go Forward Plan that was announced concurrent with the Company’s third quarter 2018 financial results. The plan involves managing costs while increasing sales and employee productivity, and is being implemented across AutoCanada’s Canadian dealerships. Highlights of the plan include the following:

  • Enhancing the Company’s finance and insurance offerings at dealerships. The Company has appointed a new Vice President responsible for the division. The Company expects to improve its finance and insurance business through a combination of new AutoCanada white-label products for used car sales, where it will earn a profit share, and manager training at dealerships.
  • Creating a new specialty finance division to make non-traditional (near-prime) financing available at all dealerships, as well as through a new online presence, rightride.ca.
  • Optimizing the Company’s collision centres, through a combination of renegotiated supply contracts to realize savings in operating expenses, along with greater coordination by tracking and managing their performance independent from other business lines. Long term, the Company expects to increase the number of collision centres it owns through acquisitions of stand-alone facilities in areas where the Company currently has multiple dealerships and no collision centre.
  • Disposing of non-performing assets in order to eliminate carrying costs. These assets include parcels of land acquired for open points that were not obtained.
  • Establishing a new wholesale division to take advantage of arbitrage opportunities with the sale of used cars across different geographic locations.
  • Leveraging the Company’s buying power to reduce costs at our dealerships.

In addition to these initiatives, the Company is taking other actions to increase the sale of used vehicles and drive more business to its service bays. AutoCanada’s growth will also continue to be supported through disciplined, accretive acquisitions that offer brand and geographical diversity.

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 is to be paid based on a number of factors with a goal to efficiently allocate capital to fuel AutoCanada’s future growth while also rewarding and sharing the Company’s success with our shareholders.

On February 22, 2019, the Board of Directors of the Company declared a quarterly eligible dividend of $0.10 per common share on the Company’s outstanding Class A common shares, payable on March 15, 2019 to shareholders of record at the close of business on March 1, 2019.

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 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 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 
Gross Profit %, Earnings per share, 
and Operating Data)

Q4
2018

Q3
2018

Q2
2018

Q1
2018

Q4
2017

Q3
2017

Q2
2017

Q1
2017

Income Statement Data

New vehicles

432,756

509,281

522,150

338,016

417,626

497,711

558,682

353,540

Used vehicles

192,988

206,668

198,597

157,901

175,251

192,473

182,913

165,408

Parts, service and collision repair

121,304

113,087

121,476

95,893

107,156

104,816

113,983

90,735

Finance, insurance and other

35,742

37,882

38,365

28,675

33,027

39,571

39,324

29,344

Revenue

782,790

866,918

880,588

620,485

733,060

834,571

894,902

639,027

New vehicles

25,861

29,150

30,648

23,473

30,033

36,806

38,555

25,590

Used vehicles

8,637

12,955

13,173

8,562

7,563

11,140

13,095

11,940

Parts, service and collision repair

60,380

57,206

60,868

45,533

56,915

53,805

56,306

47,284

Finance, insurance and other

33,326

35,524

35,891

26,776

30,699

36,218

35,867

26,813

Gross Profit

128,204

134,835

140,580

104,344

125,210

137,969

143,823

111,627

Gross profit %

16.4

%

15.6

%

16.0

%

16.8

%

17.1

%

16.5

%

16.1

%

17.5

%

Operating expenses

125,039

126,492

127,492

95,781

104,626

110,560

112,897

98,170

Operating expenses as a % of gross profit

97.5

%

93.8

%

90.7

%

91.8

%

83.6

%

80.1

%

78.5

%

87.9

%

Operating (loss) profit

(576)

(5,259)

(42,719)

15,906

26,505

30,287

46,539

15,638

Impairment (recovery) of non-financial assets

17,834

19,569

58,097

(816)

Net (loss) income attributable to AutoCanada shareholders

(26,892)

(15,563)

(40,458)

4,830

17,089

12,100

24,978

3,678

Adjusted net earnings attributable to AutoCanada shareholders2,4,6

(9,299)

333

5,298

4,830

8,935

13,581

15,547

4,602

EBITDA attributable to AutoCanada shareholders2

16,521

11,972

12,042

15,692

28,127

25,827

43,722

14,136

EBITDA attributable to AutoCanada shareholders as a % of sales2

2.1

%

1.4

%

1.4

%

2.5

%

3.8

%

3.1

%

4.9

%

2.7

%

Free cash flow2

(7,658)

6,993

(13,751)

(14,388)

29,496

31,114

10,982

621

Adjusted free cash flow2

10,553

(965)

(3,652)

3,721

15,996

23,296

36,277

15,217

Basic earnings per share

(0.98)

(0.57)

(1.48)

0.18

0.62

0.44

0.91

0.13

Diluted earnings per share

(0.98)

(0.57)

(1.48)

0.18

0.62

0.44

0.91

0.13

Basic adjusted earnings per share2,4,6

(0.34)

0.01

0.19

0.18

0.33

0.50

0.57

0.17

Diluted adjusted earnings per share2,4,6

(0.34)

0.01

0.19

0.18

0.33

0.50

0.57

0.17

Dividends declared per share

0.10

0.10

0.10

0.10

0.10

0.10

0.10

0.10

Operating Data

Vehicles (new and used) sold3

16,024

18,863

18,519

12,667

14,475

17,132

18,490

13,055

New vehicles sold3

10,331

12,474

12,506

8,140

9,822

12,014

13,429

8,508

New retail vehicles sold3

9,214

10,353

10,264

6,664

8,444

10,334

10,545

6,753

New fleet vehicles sold3

1,117

2,121

2,242

1,476

1,378

1,680

2,884

1,755

Used retail vehicles sold3

5,693

6,389

6,013

4,527

4,653

5,118

5,061

4,547

# of service and collision repair orders completed3

245,682

241,103

248,167

180,429

224,006

220,669

228,872

197,069

Absorption rate2

87

%

82

%

88

%

84

%

90

%

87

%

87

%

82

%

# of dealerships at year end

68

63

63

54

58

57

57

56

# of same stores dealerships1

47

49

49

49

49

48

47

47

# of service bays at year end

1,157

1,106

1,106

906

999

977

977

949

Same stores revenue growth1

(3.0)

%

(3.0)

%

(5.1)

%

4.6

%

11.1

%

2.9

%

0.1

%

(7.1)

%

Same stores gross profit growth1

(3.0)

%

(8.5)

%

(4.3)

%

1.0

%

1.4

%

6.3

%

1.1

%

(1.2)

%

See the Company’s Management’s Discussion and Analysis for the quarter ended December 31, 2018 for complete footnote disclosures.

The following tables summarize the results for the quarter and year ended December 31, 2018 on a same store basis by revenue source and compares these results to the same period in 2017.

Same Store Revenue and Vehicles Sold

Three months ended December 31

Year ended December 31

(in thousands of dollars)

2018

2017

% Change

2018

2017

% Change

Revenue Source

New vehicles ‑ Retail

258,289

279,051

(7.4)%

1,123,438

1,203,580

(6.7)%

New vehicles ‑ Fleet

48,810

50,350

(3.1)%

281,627

266,731

5.6%

Total New vehicles

307,099

329,401

(6.8)%

1,405,065

1,470,311

(4.4)%

Used vehicles ‑ Retail

105,170

95,038

10.7%

441,500

410,536

7.5%

Used vehicles ‑ Wholesale

34,770

41,451

(16.1)%

151,791

175,333

(13.4)%

Total Used vehicles

139,940

136,489

2.5%

593,291

585,869

1.3%

Finance, insurance and other

24,757

27,849

(11.1)%

112,415

116,315

(3.4)%

Subtotal

471,796

493,739

(4.4)%

2,110,771

2,172,495

(2.8)%

Parts, service and collision repair

90,205

85,871

5.0%

350,514

337,675

3.8%

Total

562,001

579,610

(3.0)%

2,461,285

2,510,170

(1.9)%

New retail vehicles sold (units)

6,106

6,806

(10.3)%

26,616

29,591

(10.1)%

New fleet vehicles sold (units)

1,039

1,114

(6.7)%

6,663

6,322

5.4%

Used retail vehicles sold (units)

4,020

3,682

9.2%

17,082

16,000

6.8%

Total

11,165

11,602

(3.8)%

50,361

51,913

(3.0)%

Total vehicles retailed (units)

10,126

10,488

(3.5)%

43,698

45,591

(4.2)%

Same Store Gross Profit and Profit Percentage

Three Months Ended December 31

Gross Profit

Gross Profit %

(in thousands of dollars)

2018

2017

% Change

2018

2017

Revenue Source

New vehicles ‑ Retail

19,326

19,634

(1.6)%

7.5%

7.0%

New vehicles ‑ Fleet

1,143

1,360

(16.0)%

2.3%

2.7%

Total New vehicles

20,469

20,994

(2.5)%

6.7%

6.4%

Used vehicles ‑ Retail

6,014

6,641

(9.4)%

5.7%

7.0%

Used vehicles ‑ Wholesale

519

1,151

(54.9)%

1.5%

2.8%

Total Used vehicles

6,533

7,792

(16.2)%

4.7%

5.7%

Finance, insurance and other

23,757

24,302

(2.2)%

96.0%

87.3%

Subtotal

50,759

53,088

(4.4)%

10.8%

10.8%

Parts, service and collision repair

44,799

45,446

(1.4)%

49.7%

52.9%

Total

95,558

98,534

(3.0)%

17.0%

17.0%

MD&A and Financial Statements

Information included in this press release is a summary of results. It should be read in conjunction with AutoCanada’s consolidated financial statements and management’s discussion and analysis for the quarter ended December 31, 2018, which can be found on the Company’s website at www.autocan.ca or on www.sedar.com.

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 annual MD&A; Operating (loss) profit; EBITDA; Adjusted EBITDA; Adjusted Net Earnings, Adjusted Net Earnings per Share and Adjusted Diluted Net Earnings Per Share; EBIT; Free Cash Flow; Adjusted Free Cash Flow; Absorption Rate; Average Capital Employed; Adjusted Average Capital Employed; Return on Capital Employed; and Adjusted Return on Capital Employed.

 

SOURCE AutoCanada Inc.

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Artificial Intelligence

Ideanomics signs MoU with Beijing Foton Motor Company; Definitive Agreement to Follow

Vlad Poptamas

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Photo source: ideanomics.com
Reading Time: 2 minutes

 

Ideanomics (NASDAQ: IDEX) (“Ideanomics” or the “Company”), a global Fintech and AI catalyst for transformative industries, today announced the signing of a MoU with Beijing Foton Motor Company(“Foton”), which will serve as a pre-cursor to a definitive agreement, to allow the two parties to begin working immediately.

The agreement for China-based activities is a 2-year deal, at 5 Billion RMB (approximately $750 Million) per year, making the overall deal valued at 10 Billion RMB (approximately US $1.5 Billion). Ideanomics will provide ABS lease financing of 10 Billion RMB over two years, and fulfill with for Foton on orders of 60,000 EV buses, broken down as follows: 1) not less than 20,000 vehicles from state-owned large-scale tourism groups and referred to as “Tourist bus orders”; 2) no less than 20,000 bus orders from local governments or local bus transportation systems; 3) no less than 20,000 Tourist bus orders from major domestic tourism associations and/or their members. Furthermore, for bus orders introduced by Ideanomics, a commission will be paid for each bus unit sold, at an amount to be determined according to each respective order.

For Malaysia-based activities, including cooperation for the extended ASEAN region, the supply of bus parts and systems, including EV batteries, and a cooperation on the implementation of a charging network, for which Ideanomics shall source no less than 6,000 vehicles from the Malaysian central government and its departmental agencies including EV buses and Police passenger vehicles (cars and motorcycles). For orders within Malaysia and the ASEAN region, Ideanomics shall be entitled to commission per unit sold, at an amount to be determined according to each respective order.

For Vietnam-based activities, Ideanomics shall source no less than 20,000 vehicles, both EV Bus and passenger car for e-taxi conversion, with Foton making available its 30,000-part bus system and technology for assembly in Vietnam. The agreement allows for negotiations with the Vietnam state electrical grid, to introduce a national charging network.

The agreement also allows for projects in other geographical areas, including Europe and the Americas, on a project-by-project basis.

“We are very grateful for the efforts of Dr. Wu, Avis Zhu and the entire China-based Ideanomics team, with support from our colleagues at Treeletrik in Malaysia, for successfully delivering on this deal. Foton is arguably the premier EV bus manufacturer globally, and this agreement positions us to further consolidate our position as a global EV advisory services company, as well as enable us to expand our footprint beyond China with the leading EV bus product available today. The fact Foton promoted signing a MoU, to allow the parties to begin activities immediately while the broader definitive agreement is signed, is testament to our growing reputation as the advisory partner of choice for large-scale EV initiatives in Asia,” said Alf Poor, CEO of Ideanomics.

Beijing Foton’s commercial division is focused on building a future of efficient and environmentally friendly EV Buses and other commercial vehicles, as a vehicle manufacturer. Ideanomics is leading the way for the future of ABS financing, technology enablement with the application of blockchain and artificial intelligence technologies as part of the next-generation of financial services,” said Mr. Liang Shaowen, of Beijing Auto Foton Commercial Vehicle. “Together, Foton and Ideanomics will seize upon the opportunity of large-scale EV and Hydrogen replacement of public and private transportation infrastructure in major markets and the same time raise the standard for technologically advanced vehicles which offer dependability, reliability and improved customer satisfaction. This, coupled with compelling, economically viable, financing programs for the cities and bus operators that manage these fleets will serve a much-needed gap in the market.”

 

SOURCE Ideanomics

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Artificial Intelligence

Study on electric and smart transportation: vision is required to create an environment conducive to innovation to position local companies as leaders

Vlad Poptamas

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Photo source: ccmm.ca
Reading Time: 2 minutes

 

The Chamber of Commerce of Metropolitan Montreal and Propulsion Québec, the cluster for electric and smart transportation, today released their study entitled Positioning Quebec and Montréal as leaders in electric and smart transportation. The study is meant to fuel much-needed reflection that will enable Quebec and Montréal to stand out in this economic sector of the future.

“The electric and smart transportation niche has incredible economic and technological potential, and the city has a unique opportunity to take its place in that niche,” said Michel Leblanc, president and CEO of the Chamber of Commerce of Metropolitan Montreal. “We have everything we need to make our presence felt: a critical core of technology talent and businesses, a concentration of global leaders in artificial intelligence, and, of course, world-renowned creativity. The Chamber is proud to release this study, which is a starting point for this essential reflection process. We encourage industry decision makers and actors to read it. We all need to adopt the avenues for action it identifies to enable local businesses to develop the mobility innovations and solutions of tomorrow.”

“The future of mobility is connected, autonomous, shared, electric vehicles,” said Sarah Houde, CEO of Propulsion Québec. “This study shows that Quebec has assets to distinguish itself in these niches. We need to leverage Quebec’srecognized expertise in electrification and the pool of innovative businesses in land transportation. But our success in this changing sector requires an agile regulatory framework, adapted to both the current technological context and our ambitions. The study provides an analytical tool for the best ways to support the deployment and commercialization of transportation innovations. Propulsion Québec is determined to bring together industry stakeholders to make Quebecthe ultimate place to develop, test and implement new mobility technology.”

“The rapid rate of change in the field of transportation here and around the world requires a paradigm shift at every level to make room for innovation and ingenuity,” said Marc Blanchet, vice-president, Southwest Quebec, at SNC-Lavalin. “We support this study that speaks to all actors and offers areas of focus to accelerate innovation and provide momentum to Quebec’s electric and smart mobility industry.”

The study Positioning Quebec and Montréal as leaders in electric and smart transportation has four main chapters:

  1. A diagnosis of the regulatory framework of Quebec.
  2. A benchmark of international best practices based on an analysis of the regulatory framework and public policy from ten territories.
  3. A summary of success factors drawn from international benchmarking to identify areas of excellence and avenues for improvement for Quebec.
  4. Avenues for recommendation for Quebec and Greater Montréal, structured around three strategic areas:
    1. Strategic focus 1: Increase the offer of electric and smart mobility products and services developed in Quebec
    2. Strategic focus 2: Increase demand for electric and smart transportation
    3. Strategic focus 3: Ensure the growth of the transportation industry by optimizing and coordinating government strategies

To consult the entire study and its highlights, visit ccmm.ca/etude_transports_electriques (in French only).

 

SOURCE Chamber of Commerce of Metropolitan Montreal

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Automotive

Electric Mobility for Smarter Cities: The Future of Energy

Zoltán Tűndik

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Reading Time: 3 minutes

 

Electric Mobility Market will observe a lucrative growth from 2018 to 2026 due to rise in demand for and sales of electric vehicles in developing countries due to concerns about high air pollution levels”

Electric mobility refers to all vehicles that are powered by an electric motor or those that receive power or energy primarily from the power grid. Electric mobility includes all-electric vehicles, which include battery operated electric vehicles, plug-in hybrid electric vehicles, and hybrid electric vehicles. Electric mobility is majorly a low or zero-emission vehicle, which contributes significantly toward a greener environment through a reduction in carbon emission.

The surge in emission levels, which are harmful and injurious to the human health and environment, caused by fossil fuel powered vehicles has prompted global and state regulatory bodies to propose, design, and develop eco-friendly machinery and vehicles. This has led to the development and operation of electric mobility, which is considered the best possible alternate vehicle for the environment. A rapid rise in demand for and sales of electric vehicles in developing countries due to concerns about high air pollution levels is a key factor that is projected to drive the electric mobility market during the forecast period.

Additionally, growing support by governments around the world, by means of initiatives and subsidies, around the world is another factor that is anticipated to propel the electric mobility market during the forecast period. Furthermore, rise in adoption of electric mobility for commercial purposes, such as taxis, across the globe, especially in countries such as China, and the U.S., coupled with rising in demand for alternative fuel vehicles is another major factor that is projected to boost the electric mobility market during the forecast period. However, a lack of charging infrastructure coupled with the higher cost of electric mobility is likely to restrain the electric mobility market during the forecast period.

In terms of vehicle type, the electric mobility market can be classified into passenger electric vehicle and commercial electric vehicle. The passenger electric vehicle segment accounts for a higher share of the electric mobility market. This is majorly due to a higher rate of adoption of electric vehicles owing to emission concerns and awareness coupled with stringent government emission norms and policies.

Based on component, the electric mobility market can be bifurcated into electric motor, battery, and other three segments. The battery segment dominated the electric mobility market, primarily due to its application as a highly essential component of any kind of automobile. It serves as a primary power source for electric automotive functions.

Major players operating in the global electric mobility market include Tesla, Inc., Nissan Motor Corporation., Toyota Motor Corporation., Renault, Hyundai Motor Company, General Motors, Ford Motor Company, AB Volvo, BMW AG, BYD Company Limited., Daimler AG, Honda Motor Co., Ltd., Mitsubishi Motors Corporation, Tata Motors, and Volkswagen AG.

Get More Insight About Electric Mobility by TMR

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