EDMONTON, Feb. 19, 2016 /CNW/ - AutoCanada Inc. ("AutoCanada" or the "Company") (TSX:ACQ) announced today that the Board of Directors has declared a quarterly eligible dividend of $0.25 per common share on AutoCanada's outstanding Class A common shares, payable on March 15, 2016 to shareholders of record at the close of business on February 29, 2016. The quarterly eligible dividend of $0.25 represents an annual dividend rate of $1.00 per common share.
Mr. Tom Orysiuk, President & Chief Executive Officer stated that "We continue to closely monitor the economic environment in our key markets and the automotive environment in the Canadian economy generally, and Alberta in particular, suggests that fiscal 2016 will be more challenging than the previous year from a retail perspective. The increase in unemployment levels and erosion of consumer confidence will likely continue throughout the year. One positive outcome of this challenging environment is the likelihood that good acquisition opportunities will come available which bring long-term shareholder value. To ensure that we have the ability to take advantage of these potential opportunities, we have embarked on a number of initiatives including the reduction of capital expenditures for fiscal 2016 by $34 million dollars compared to what we reported in November 2015, as well as a cost reduction plan which is intended to result in $15 million in annualized savings. Throughout fiscal 2015 all except two of our dealerships were profitable though in the case of our Western Canadian dealerships some were at significantly reduced levels as compared to previous years. Our plan for 2016 is prudent management of the business in a manner that maintains a strong and conservatively managed balance sheet, while meeting all of our capital requirements and providing the necessary capital to take advantage of buying opportunities."
Eligible dividend designation
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 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 Inc. designating dividends as "eligible dividends".
AutoCanada is one of Canada's largest multi-location automobile dealership groups, currently operating 54 franchised dealerships, comprised of 62 franchises, in eight provinces and has over 3,400 employees. AutoCanada currently sells Chrysler, Dodge, Jeep, Ram, FIAT, Chevrolet, GMC, Buick, Cadillac, Infiniti, Nissan, Hyundai, Subaru, Mitsubishi, Audi, Volkswagen, Kia, BMW and MINI branded vehicles. In 2014, our dealerships sold approximately 57,000 vehicles and processed approximately 786,000 service and collision repair orders in our 822 service bays.
This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. All statements other than statements of historical fact contained in this press release may be forward-looking statements and forward-looking information. In particular, forward-looking information and statements in this press release include, but are not limited to, the continued availability of acquisition opportunities in the automotive retail market and the stated cost reduction plan achieving $15 million in annualized savings. These forward-looking statements and information are based on certain key expectations and assumptions made by AutoCanada, including the assumption that the market for automotive dealerships remains active and that the cost savings measures implemented will achieve the savings anticipated by management. Although AutoCanada believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information as AutoCanada cannot give any assurance that they will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risk that acquisitions will not be completed as proposed or at all and general economic, market and business conditions. Readers are cautioned that the foregoing list of risks and uncertainties is not exhaustive. Additional information on these and other risk factors that could affect AutoCanada's operations, financial results and the completion of the proposed acquisition are included in AutoCanada's annual information form and the other disclosure documents filed by AutoCanada with securities regulatory authorities which may be accessed through the SEDAR website at www.sedar.com. The forward-looking statements and information contained in this press release are made as of the date hereof and AutoCanada does not undertake any obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Additional information about AutoCanada Inc. is available at www.sedar.com and the Company's website at www.autocan.ca.
SOURCE AutoCanada Inc.
For further information: Christopher Burrows, Vice-President & Chief Financial Officer, Phone: 780.509.2808, Email: firstname.lastname@example.org