AutoCanada Inc. releases financial results for the reporting period ended
December 31, 2009

A conference call to discuss the results for the year and three month period ended December 31, 2009 will be held on March 23, 2010 at 10:00 a.m. Eastern time. To participate in the conference call, please dial 1-888-231-8191 or (647) 427-7450 approximately 10 minutes prior to the call. A live and archived audio webcast of the conference call will also be available on the Company's website www.autocan.ca.

EDMONTON, March 22 /CNW/ - AutoCanada Inc. (the "Company" or "AutoCanada") (TSX: ACQ) today announced financial results for the year ended December 31, 2009 and the three month period ended December 31, 2009.

    
    -------------------------------------------------------------------------
                    2009 Fourth Quarter Operating Results

    -   Revenue increased 3.6% or $6.6 million
    -   Gross profit increased by 1.5% or $0.5 million
    -   Same store revenue increased by 1.3%
    -   Same store gross profit decreased by 1.1%
    -   EBITDA was $3.3 million vs. $3.9 million in Q4 of 2008, a 15.4%
        decrease Ø The number of new and used vehicles retailed increased by
        3.4% Ø Repair orders completed for the quarter were up 10.5%
    -------------------------------------------------------------------------
    

In commenting on the financial results for the three month period ended December 31, 2009, Pat Priestner, Chairman and CEO of AutoCanada Inc. stated that, "We are pleased to see improvements in our sales volumes in the fourth quarter of 2009 when compared to the fourth quarter of 2008. We also experienced an increase in our gross profit which is a great accomplishment for our Company, given the tough market conditions. Although our EBITDA for the quarter was down 15.4%, the Company experienced some one-time expenses relating to dealership relocations and our conversion to a corporate structure that, had they not been incurred, would have allowed us to exceed our EBITDA for the fourth quarter of 2008."

    
    -------------------------------------------------------------------------
                        2009 Annual Operating Results

    -   Revenue decreased by 6.0% or $49.6 million
    -   Gross profit decreased by 3.5% or $5.1 million
    -   Same store revenue decreased by 10.5%.
    -   Same store gross profit decreased by 7.8%
    -   EBITDA was $18.4 million vs. $24.5 million in 2008, a 24.7% decrease
    -   The number of new and used vehicles retailed decreased by 2.9%
    -   Repair orders completed for the year were up 8.7%
    -------------------------------------------------------------------------
    

In commenting on the financial results for the year ended December 31, 2009, Pat Priestner, Chairman and CEO of AutoCanada Inc. stated that, "Undoubtedly 2009 was one of the most challenging years in retail automotive history in recent memory. Many of these challenges were a direct result of the credit crisis that impacted all sectors of the world economy in 2009. The year was marked by both Chrysler and General Motors filing for bankruptcy in the United States in the spring and then re-emerging from bankruptcy in the summer. One of our long term business partners, Chrysler Financial Canada, exited the automotive business, a decision which left us without a floor plan financing provider at all of our dealerships, and the loss of a significant source of financing for our customers when purchasing new and used vehicles. Through the efforts of management, and much hard work by our new floor plan lender, we successfully replaced Chrysler Financial Canada with a long term partner, General Motors Acceptance Corporation of Canada. In addition, management replaced its Chrysler Financial Canada term financing with term financing from HSBC. Finally, at year end, we successfully converted from an income trust to a corporation, and acquired the two managed Nissan dealerships that were previously included in our financial results as they were considered to be variable interest entities. By any measure, it was a year of uncertainty and challenge. Despite the turmoil that resulted from the all of the above, management is proud of the fact that its team remained intact, and that notwithstanding the challenges, we generated EBITDA of $18.4 million in 2009.

It is management's view that the tight credit markets will continue to impact our business into 2010. In late 2008, the automotive leasing business was significantly reduced as the ability for captive finance companies to securitize asset backed loans was eliminated. The absence of leasing will impact how we do business in the future as consumer lease returns provided significant sales opportunities to dealerships as well as a significant source of nearly new vehicles that could be offered for sale on our used vehicle lots. The credit crisis has also restricted our ability to obtain financing through third parties to facilitate our customers' purchase of vehicles as well as restricted the amount that each customer can finance when purchasing a vehicle. From a financial perspective, this has resulted in a significant drop in our finance and insurance income in 2009 and will most likely continue through-out 2010 until credit conditions return to normal.

Although Chrysler's progress remains not certain, we are pleased that in our major markets there has been continued strong demand for the core product offerings from Chrysler Jeep Dodge namely, Dodge Ram and Dodge Caravan, both of which were redesigned in 2009 and are competitive."

    
    Fourth Quarter 2009 Highlights

    -   For the fourth quarter of 2009, the Company generated net earnings of
        $1.7 million or basic earnings per share of $0.084 and free cash flow
        of $0.084 per share.

    -   Same store revenue increased by 1.3% in the fourth quarter of 2009,
        compared to the same quarter in 2008. Same store gross profit
        decreased by 1.1% in the fourth quarter of 2009, compared to the same
        quarter in 2008.

    -   Revenue from existing and new dealerships increased 3.6% to $189.0
        million in the fourth quarter of 2009 from $182.4 million in the same
        quarter in 2008.

    -   Gross profit from existing and new dealerships increased 1.5% to
        $34.1 million in the fourth quarter of 2009 from $33.6 million in the
        same quarter in 2008.

    -   EBITDA decreased 15.4% to $3.3 million in the fourth quarter of 2009
        from $3.9 million in the same quarter in 2008.

    -   On December 7, 2009 the Company completed the transfer of ownership
        of Grande Prairie Nissan and Northland Nissan (the "Managed
        Dealerships") from CAG (a related party with a 46.8% interest in
        AutoCanada) to full ownership by AutoCanada.

    -   On December 17, 2009, unitholders of AutoCanada Income Fund (the
        "Fund") approved the conversion of the Fund into a corporation,
        AutoCanada Inc., pursuant to a plan of arrangement ("the Conversion")
        involving, among others, the Fund, AutoCanada and securityholders of
        the Fund. The conversion was completed on December 31, 2009.

    2009 Highlights

    -   For the year ended December 31, 2009, the Company generated net
        earnings of $12.6 million, or basic earnings per share of $0.633 and
        free cash flow of $0.353 per share.

    -   Same store revenue and gross profit decreased by 10.5% and 7.8%
        respectively in the year ended December 31, 2009, compared to the
        results of the Company to the 2008 year.

    -   Revenue from existing and new dealerships decreased 6.0% to $776.9
        million in the year ended December 31, 2009 from the $826.5 million
        that was generated by the Company in 2008.

    -   Gross profit from existing and new dealerships decreased by 3.5% to
        $142.0 million in the year ended December 31, 2009 from the $147.1
        million that was generated by the Company in the 2008 year.

    -   EBITDA decreased 24.7% to $18.4 million for the year ended December
        31, 2009 from the $24.5 million that was generated by the Company in
        the 2008 year.

    -   As a result of market conditions, the Company did not complete any
        acquisitions during the year ended December 31, 2009.
    

Distributions / Dividends

Management reviews the Company's financial results on a monthly basis. The Board of Directors reviews the financial results on a quarterly basis, or as requested by Management, and determine whether a dividend shall be paid based on a number of factors.

On February 13, 2009, in view of the continued market unpredictability, general economic deterioration both within the auto industry and generally, rising unemployment, and tight credit markets, the Board of Trustees of the Fund had concluded that it was prudent to reduce monthly distribution from $0.0833 per unit ($1.00 per unit annually) to $0.0417 per unit ($0.50 per unit annually), commencing February 2009, in order to provide additional financial flexibility.

On March 14, 2009, in response to the continued deteriorating retail credit markets and continued economic decline, the Board of Trustees of the Fund determined it would be prudent to temporarily suspend distributions until such time as market conditions stabilize.

The following table summarizes the distributions declared by the Company for the period from January 1, 2009 to December 31, 2009.

    
    (In thousands of dollars)
                                                Exchangeable
                                 Fund Units        Units           Total
                               --------------- --------------- --------------
    Record date  Payment date  Declared  Paid  Declared  Paid  Declared  Paid
                                    $       $       $       $       $       $

    January 30,   February 16,
          2009           2009     881     881     775     775   1,656   1,656
    February 27,  March 16,
          2009        2009        441     441     388     388     829     829
    N/A(1)        N/A(1)            -       -       -       -       -       -
                               ----------------------------------------------
                                1,322   1,322   1,163   1,163   2,485   2,485

    (1) No further distributions since those disclosed above have been
        declared as at the date of this MD&A. No record date or payment date
        is applicable.
    

Distributions were paid on Fund Units and Exchangeable Units. Prior to the conversion to a corporation on December 31, 2009 the following numbers of units were outstanding:

    
    Fund Units                                                    10,573,430
    Exchangeable Units                                             9,307,500
                                                                 ------------

                                                                  19,880,930
                                                                 ------------
                                                                 ------------
    

During the year ended December 31, 2009, the Company declared distributions of $0.125 per Fund Unit and Exchangeable Unit to Unitholders. AutoCanada converted to a corporation on December 31, 2009 and as a result, the total number of Class A common shares outstanding at December 31, 2009 was 19,880,930. There are no other classes or types of shares outstanding at December 31, 2009.

SELECTED ANNUAL FINANCIAL INFORMATION

The following table shows the audited results of the Company for the years ended December 31, 2007, December 31, 2008 and December 31, 2009. 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       The Fund     The Fund  The Company
     Operating Data and gross profit %)
                                          (Audited)    (Audited)    (Audited)

                                              2007         2008         2009

    Income Statement Data
    Revenue                                834,815      826,494      776,933
      New vehicles                         472,602      451,501      415,750
      Used vehicles                        224,991      222,329      209,169
      Parts, service & collision repair     92,140      103,743      108,383
      Finance, insurance & other            45,082       48,921       43,631
    Gross profit                           138,892      147,052      141,976
      New vehicles                          32,512       32,706       29,940
      Used vehicles                         19,685       18,400       19,540
      Parts, service & collision repair     44,289       50,358       53,340
    Finance, insurance & other              42,406       45,588       39,156
      Gross profit %                         16.6%        17.8%        18.3%
    Sales, general & admin expenses        103,715      114,881      118,141
    Floorplan interest expense               9,594        7,065        4,855
    Other interest & bank charges            1,250        1,551        2,281
    Future income taxes                      9,385       (9,970)         449
    Net earnings                            11,738      (95,175)      12,578
    EBITDA(1)                               25,077       24,486       18,352
    Basic earnings (loss) per share          0.579       (4.711)       0.633
    Diluted earnings (loss) per share        0.578       (4.711)       0.633

    Operating Data
    Vehicles (new and used) sold            23,296       23,714       23,083
    New retail vehicles sold                11,135       11,554       11,117
    New fleet vehicles sold                  2,521        2,244        2,233
    Used retail vehicles sold                9,640        9,916        9,733
    Number of service & collision
     repair orders completed               231,723      277,256      301,282
    Absorption rate(2)                         98%          96%          89%
    No. of dealerships                          19           22           22
    No. of same store dealerships(3)            11           14           19
    No. of service bays at period end          260          284          331
    Same store revenue growth(3)             11.3%       (9.9)%      (10.5)%
    Same store gross profit growth(3)        12.1%       (2.6)%       (7.8)%

    (1) EBITDA has been calculated as described under "NON-GAAP MEASURES".
    (2) Absorption has been calculated as described under "NON-GAAP
        MEASURES".
    (3) Same store revenue growth & same store gross profit growth is
        calculated using franchised automobile dealerships that we have owned
        for at least 2 full years.
    

SELECTED QUARTERLY FINANCIAL INFORMATION

The following table shows the unaudited results of the AutoCanada 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
     Operating Data and gross profit %)

                                           Q1        Q2        Q3        Q4
                                          2008      2008      2008      2008

    Income Statement Data
      New vehicles                     107,688   128,371   118,807    96,634
      Used vehicles                     55,712    61,223    57,790    47,605
      Parts, service & collision
       repair                           23,536    26,610    26,492    27,105
      Finance, insurance & other        11,180    13,121    13,597    11,023
                                      ---------------------------------------
    Revenue                            198,116   229,325   216,686   182,367
                                      ---------------------------------------

      New vehicles                       7,012     9,699     9,266     6,729
      Used vehicles                      4,393     5,180     5,156     3,671
      Parts, service & collision
       repair                           11,082    12,896    13,290    13,090
      Finance, insurance & other        10,579    12,244    12,629    10,137
                                      ---------------------------------------
    Gross profit                        33,066    40,019    40,341    33,627
                                      ---------------------------------------

    Gross profit %                       16.7%     17.5%     18.6%     18.4%
    Sales, general & admin expenses     26,317    29,916    30,491    28,157
    SG&A exp. as % of gross profit       79.6%     74.8%     75.5%     83.7%
    Floorplan interest expense           2,034     1,895     1,693     1,443
    Other interest & bank charges          256       396       458       441
    Future income taxes                    330       148    (1,869)   (8,579)
    Net earnings(4)                      3,358     6,906   (38,318)  (67,121)
    EBITDA(1)(4)                         4,621     8,022     7,975     3,868

    Operating Data
    Vehicles (new and used) sold         5,552     6,576     6,462     5,124
    New retail vehicles sold             2,462     3,471     3,245     2,376
    New fleet vehicles sold                716       470       532       526
    Used retail vehicles sold            2,374     2,635     2,685     2,222
    Number of service & collision
     repair orders completed            61,169    72,227    74,300    69,560
    Absorption rate(2)                     90%      100%       99%       94%
    No. of dealerships                      19        20        21        22
    No. of same store dealerships(3)        13        14        14        14
    No. of service bays at period end      260       279       284       288
    Same store revenue growth(3)        (0.6)%    (3.8)%   (17.1)%   (16.7)%
    Same store gross profit growth(3)     0.7%      0.2%    (3.3)%    (8.0)%

    Balance Sheet Data

    Cash and cash equivalents           15,298    18,459    19,194    19,592
    Accounts receivable                 36,411    35,374    39,390    31,195
    Inventories                        132,549   135,447   134,565   139,948
    Revolving floorplan facilities     134,023   131,505   135,562   137,453


                                           Q1        Q2        Q3        Q4
                                          2009      2009      2009      2009

    Income Statement Data
      New vehicles                      87,176   108,181   117,513   102,880
      Used vehicles                     49,550    55,098    56,386    48,135
      Parts, service & collision
       repair                           26,390    27,322    26,941    27,730
      Finance, insurance & other         9,683    11,669    12,027    10,252
                                      ---------------------------------------
    Revenue                            172,799   202,270   212,867   188,997
                                      ---------------------------------------

      New vehicles                       5,828     7,951     9,003     7,157
      Used vehicles                      3,810     5,677     5,744     4,309
      Parts, service & collision
       repair                           12,811    13,708    13,374    13,447
      Finance, insurance & other         8,732    10,489    10,717     9,218
                                      ---------------------------------------
    Gross profit                        31,181    37,825    38,838    34,131
                                      ---------------------------------------

    Gross profit %                       18.0%     18.7%     18.3%     18.1%
    Sales, general & admin expenses     27,813    30,450    30,565    29,313
    SG&A exp. as % of gross profit       89.2%     80.5%     78.7%     85.9%
    Floorplan interest expense             970     1,104     1,399     1,382
    Other interest & bank charges          375       552       802       552
    Future income taxes                     97        67        37       449
    Net earnings(4)                      1,054     4,750     5,099     1,675
    EBITDA(1)(4)                         2,230     6,135     6,716     3,271

    Operating Data
    Vehicles (new and used) sold         5,149     6,067     6,415     5,451
    New retail vehicles sold             2,219     3,030     3,236     2,559
    New fleet vehicles sold                473       446       619       695
    Used retail vehicles sold            2,385     2,591     2,560     2,197
    Number of service & collision
     repair orders completed            70,021    75,062    79,346    76,853
    Absorption rate(2)                     84%       90%       92%       91%
    No. of dealerships                      22        22        22        22
    No. of same store dealerships(3)        16        17        18        19
    No. of service bays at period end      323       323       321       331
    Same store revenue growth(3)       (19.8)%   (15.3)%    (3.9)%      1.3%
    Same store gross profit growth(3)  (12.8)%    (8.7)%    (6.3)%    (1.1)%

    Balance Sheet Data
    Cash and cash equivalents           12,522    14,842    23,224    22,465
    Accounts receivable                 33,821    27,034    38,134    35,388
    Inventories                        116,478    90,141   107,431   108,324
    Revolving floorplan facilities     114,625    73,161   105,254   102,650

    (1) EBITDA has been calculated as described under "NON-GAAP MEASURES".
    (2) Absorption has been calculated as described under "NON-GAAP
        MEASURES".
    (3) Same store revenue growth & same store gross profit growth is
        calculated using franchised automobile dealerships that we have owned
        for at least 2 full years.
    (4) The results from operations have been lower in the first and fourth
        quarters of each year, largely due to consumer purchasing patterns
        during the holiday season, inclement weather and the reduced number
        of business days during the holiday season. As a result, our
        financial performance is generally not as strong during the first and
        fourth quarters than during the other quarters of each fiscal year.
        The timing of acquisitions may have also caused substantial
        fluctuations in operating results from quarter to quarter.
    

The following table summarizes the results for the year ended December 31, 2009 on a same store basis by revenue source and compares these results to the same period in 2008.

    
             Same Store Gross Profit and Gross Profit Percentage
    -------------------------------------------------------------------------

                                        For the Year Ended
                       ------------------------------------------------------
                                Gross Profit            Gross Profit %
                       ------------------------- ----------------------------
    (In thousands of
     dollars except
     % change and       Dec. 31, Dec. 31,     %    Dec. 31, Dec. 31,     %
     gross profit %)       2009     2008   Change     2009     2008   Change
                        -------- -------- -------- -------- -------- --------

    Revenue Source

    New vehicles         26,478   30,924   (14.4)%     7.2%     7.3%   (0.1)%

    Used vehicles        18,434   17,996      2.4%     9.4%     8.4%    11.9%

    Finance, insurance
     and other           36,240   44,346   (18.3)%    92.0%    94.0%   (2.1)%
                        -------- -------- --------

    Subtotal             81,152   93,266   (13.0)%

    Parts, service and
     collision repair    48,863   47,796      2.2%    49.6%    48.6%     2.1%
                        -------- -------- -------- -------- -------- --------

    Total               130,015  141,062    (7.8)%    18.6%    18.0%     3.3%
                        -------- -------- -------- -------- -------- --------
                        -------- -------- -------- -------- -------- --------
    

The following table summarizes the results for the three-month period ended December 31, 2009 on a same store basis by revenue source and compares these results to the same period in 2008.

    
             Same Store Gross Profit and Gross Profit Percentage
    -------------------------------------------------------------------------

                                   For the Three-Month Period Ended
                       ------------------------------------------------------
                                Gross Profit            Gross Profit %
                       ------------------------- ----------------------------
    (In thousands of
     dollars except
     % change and       Dec. 31, Dec. 31,     %    Dec. 31, Dec. 31,     %
     gross profit %)       2009     2008   Change     2009     2008   Change
                        -------- -------- -------- -------- -------- --------

    Revenue Source

    New vehicles          6,407    6,248      2.5%     7.0%     7.1%   (1.4)%

    Used vehicles         4,099    3,582     14.4%     9.1%     7.9%    15.2%

    Finance, insurance
     and other            8,438    9,654   (12.6)%    92.5%    93.4%   (1.0)%
                        -------- -------- -------- -------- -------- --------

    Subtotal             18,944   19,484    (2.8)%

    Parts, service and
     collision repair    12,234   12,031      1.7%    48.9%    48.3%     1.2%
                        -------- -------- -------- -------- -------- --------

    Total                31,178   31,515    (1.1)%    18.3%    18.7%   (2.1)%
                        -------- -------- -------- -------- -------- --------
                        -------- -------- -------- -------- -------- --------
    

About AutoCanada

AutoCanada is one of Canada's largest multi-location automobile dealership groups, currently operating 22 franchised dealerships in British Columbia, Alberta, Manitoba, Ontario, New Brunswick and Nova Scotia. In 2009, the 22 franchised automobile dealerships owned by the Company, sold approximately 23,000 vehicles and processed approximately 300,000 service and collision repair orders in our 331 service bays. We have grown, and intend to continue to grow, our business through the acquisition of franchised automobile dealerships in key markets, the organic growth of our existing dealerships, the opening of new franchised automobile dealerships, or "Open Points", and the management of franchised automobile dealerships.

Our dealerships derive their revenue from the following four inter-related business operations: new vehicle sales; used vehicle sales; parts, service and collision repair; and finance and insurance. While new vehicle sales are the most important source of revenue, they generally result in lower gross profits than used vehicle sales, parts, service and collision repair operations and finance and insurance sales. Overall gross profit margins increase as revenues from higher margin operations increase relative to revenues from lower margin operations. We earn fees for arranging financing on new and used vehicle purchases on behalf of third parties and therefore we do not have an in-house lease program and as a result we do not have exposure to residual value risk of returned lease vehicles.

Forward Looking Statements

Certain statements contained in this press release are forward-looking statements and information (collectively "forward-looking statements"), within the meaning of the applicable Canadian securities legislation. We hereby provide cautionary statements identifying important factors that could cause our actual results to differ materially from those projected in these forward-looking statements. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of words or phrases such as "will likely result", "are expected to", "will continue", "is anticipated", "projection", "vision", "goals", "objective", "target", "schedules", "outlook", "anticipate", "expect", "estimate", "could", "should", "expect", "plan", "seek", "may", "intend", "likely", "will", "believe" and similar expressions are not historical facts and are forward-looking and may involve estimates and assumptions and are subject to risks, uncertainties and other factors some of which are beyond our control and difficult to predict. Accordingly, these factors could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. Therefore, any such forward-looking statements are qualified in their entirety by reference to the factors discussed throughout this document.

In particular, material forward-looking statements in this press release include:

    
    -   our plans for future growth and effects of future growth on financial
        performance;
    -   the impact of general credit conditions on the Company;
    -   the impact of the absence of automotive leasing on our business;
    -   management's anticipation of increased sales opportunities from newly
        redesigned vehicles; and
    -   our assumption on the amount of time it make take for an acquisition
        or open point to achieve normal operating results;
    

The foregoing factors are further discussed in the Company's Annual Information Form dated March 22, 2010 which is filed on SEDAR at www.sedar.com.

Further, any forward-looking statement speaks only as of the date on which such statement is made, and, except as required by applicable law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for management to predict all of such factors and to assess in advance the impact of each such factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement.

NON-GAAP MEASURES

Our 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. We list and define these "NON-GAAP MEASURES" below:

EBITDA

EBITDA is a measure commonly reported and widely used by investors as an indicator of a company's operating performance and ability to incur and service debt, and as a valuation metric. The Company believes EBITDA assists investors in comparing a company's performance on a consistent basis without regard to depreciation and amortization and asset impairment charges which are non-cash in nature and can vary significantly depending upon accounting methods or non-operating factors such as historical cost. References to "EBITDA" are to earnings before interest expense (other than interest expense on floorplan financing and other interest), income taxes, depreciation, amortization and asset impairment charges.

Free Cash Flow

Free cash flow is a measure used by management to evaluate its performance. While the closest Canadian GAAP measure is cash provided by operating activities, free cash flow is considered relevant because it provides an indication of how much cash generated by operations is available after capital expenditures. It shall be noted that although we consider this measure to be free cash flow, financial and non-financial covenants in our credit facilities and dealer agreements may restrict cash from being available for distributions, re-investment in the Company, potential acquisitions, or other purposes. Investors should be cautioned that free cash flow may not actually be available for growth or distribution of the Company. References to "Free cash flow" are to cash provided by (used in) operating activities (including the net change in non-cash working capital balances) less capital expenditure.

Cautionary Note Regarding Non-GAAP Measures

EBITDA and Free Cash Flow are not earnings measures recognized by GAAP and do not have standardized meanings prescribed by GAAP. Investors are cautioned that these non-GAAP measures should not replace net earnings or loss (as determined in accordance with GAAP) as an indicator of the Company's performance, of its cash flows from operating, investing and financing activities or as a measure of its liquidity and cash flows. The Company's methods of calculating EBITDA and Free Cash Flow may differ from the methods used by other issuers. Therefore, the Company's EBITDA and Free Cash Flow may not be comparable to similar measures presented by other issuers.

Additional information about AutoCanada Inc. is available at the Company's website at www.autocan.ca and www.sedar.com.

    
    AutoCanada Inc.
    Consolidated Balance Sheet
    As at December 31, 2009
    -------------------------------------------------------------------------
    (expressed in Canadian dollar thousands)
                                                         2009           2008
                                                            $              $

    ASSETS

    Current assets
    Cash and cash equivalents                          22,465         19,592
    Restricted cash                                         -          3,238
    Accounts receivable                                35,388         31,195
    Inventories (note 8)                              108,324        139,948
    Prepaid expenses                                    1,649          1,565
    Future income taxes (note 20)                         500              -
                                                     ---------      ---------

                                                      168,326        195,538

    Property & equipment (note 9)                      17,794         17,227
    Intangible assets (note 10)                        43,700         43,700
    Future income taxes (note 20)                       1,647            585
    Leasehold inducements (note 19)                     2,142              -
    Other assets                                           56             54
                                                     ---------      ---------

                                                      233,665        257,104
                                                     ---------      ---------
                                                     ---------      ---------

    LIABILITIES

    Current liabilities
    Accounts payable and accrued liabilities           25,556         21,990
    Revolving floorplan facilities (note 12)          102,650        137,453
    Distributions payable (note 18)                         -          1,656
    Current portion of long-term debt (note 13)           271            570
    Future income taxes (note 20)                       2,012              -
                                                     ---------      ---------

                                                      130,489        161,669

    Long-term debt (note 13)                           23,074         25,522
                                                     ---------      ---------

                                                      153,563        187,191
                                                     ---------      ---------

    Economic dependence (note 3)
    Contingencies (note 15)

    SHAREHOLDERS' EQUITY

    Shareholders' capital (note 16(a))                190,435              -
    Fund Units (note 16(b))                                 -        101,588
    Exchangeable Units (note 16(c))                         -         88,847
    Contributed surplus (note 17)                       3,918          3,822
    Deficit                                          (114,251)      (124,344)
                                                     ---------      ---------

                                                       80,102         69,913
                                                     ---------      ---------

                                                      233,665        257,104
                                                     ---------      ---------
                                                     ---------      ---------


    Approved on behalf of the Company:
    (Signed) "Gordon R. Barefoot" Director  (Signed) "Robin Salmon" Director



    AutoCanada Inc.
    Consolidated Statement of Operations, Comprehensive Income (Loss) and
    Deficit
    For the years ended December 31, 2009 and December 31, 2008
    -------------------------------------------------------------------------
    (expressed in Canadian dollar thousands
     except share and per share amounts)

                                                   Year ended     Year ended
                                                  December 31,   December 31,
                                                         2009           2008

                                                            $              $

    Revenue
    Vehicles                                          666,850        720,541
    Parts, service and collision repair               108,448        103,743
    Other                                               1,635          2,210
                                                  ---------------------------
                                                      776,933        826,494
    Cost of sales (note 8)                            634,957        679,442
                                                  ---------------------------
    Gross profit                                      141,976        147,052
                                                  ---------------------------

    Expenses
    Selling, general and administrative               118,141        114,881
    Interest (note 21)                                  7,136          8,615
    Amortization                                        3,672          3,319
    Asset impairments (notes 10 & 11)                       -        125,382
                                                  ---------------------------
                                                      128,949        252,197
                                                  ---------------------------

    Earnings (loss) before income taxes                13,027       (105,145)

    Future income taxes expense
     (recovery) (note 20)                                 449         (9,970)
                                                  ---------------------------

    Net earnings (loss) & comprehensive
     income (loss) for the year                        12,578        (95,175)

    Deficit, beginning of year                       (124,344)        (8,989)
    Distributions declared (note 18)                   (2,485)       (20,180)
                                                  ---------------------------

    Deficit, end of year                             (114,251)      (124,344)
                                                  ---------------------------
                                                  ---------------------------
    Earnings (loss) per share/unit
    Basic                                               0.633         (4.711)
                                                  ---------------------------
                                                  ---------------------------

    Diluted                                             0.633         (4.711)
                                                  ---------------------------
                                                  ---------------------------
    Weighted average shares/units
    Basic                                          19,880,930     20,201,744
                                                  ---------------------------
                                                  ---------------------------

    Diluted                                        19,880,930     20,201,744
                                                  ---------------------------
                                                  ---------------------------



    AutoCanada Inc.
    Consolidated Statement of Cash Flows
    For the years ended December 31, 2009 and December 31, 2008
    -------------------------------------------------------------------------
    (expressed in Canadian dollar thousands)

                                                   Year ended     Year ended
                                                  December 31,   December 31,
                                                         2009           2008

    Cash provided by (used in)                              $              $

    Operating activities
    Net earnings (loss) for the period                 12,578        (95,175)
    Items not affecting cash
      Future income taxes expense (recovery)
       (note 20)                                          449         (9,970)
      Unit-based compensation (note 17)                    96            169
      Amortization                                      3,672          3,319
      Loss (gain) on disposal of property
       & equipment                                        308             (1)
      Asset impairments (notes 10 & 11)                     -        125,382
                                                  ---------------------------

                                                       17,103         23,724
    Net change in non-cash working capital
     balances                                          (5,767)        10,590
                                                  ---------------------------
                                                       11,336         34,314
                                                  ---------------------------
    Investing activities
    Business acquisitions (note 7)                          -        (23,705)
    Purchase of property & equipment                   (4,312)        (3,938)
    Disposal (purchase) of other assets                     -             24
    Payment of leasehold inducements (note 19)         (2,142)             -
    Proceeds on sale of property & equipment               88            117
    Restricted cash                                     3,238          1,118
                                                  ---------------------------
                                                       (3,128)       (26,384)
                                                  ---------------------------

    Financing activities
    Proceeds from long-term debt                       20,286         15,496
    Repayment of long-term debt                       (23,136)          (750)
    Repurchase of Fund Units                                -           (918)
    Distributions paid to Unitholders                  (2,485)       (20,180)
                                                  ---------------------------
                                                       (5,335)        (6,352)
                                                  ---------------------------

    Increase in cash                                    2,873          1,578

    Cash and cash equivalents, beginning
     of period                                         19,592         18,014
                                                  ---------------------------

    Cash and cash equivalents, end of period           22,465         19,592
                                                  ---------------------------
                                                  ---------------------------
    Supplementary information
      Cash interest paid                                7,047          8,775
      Transfer of inventory to property & equipment     1,362          1,416
      Transfer of property & equipment to inventory     1,140            851

    The accompanying notes are an integral part of these consolidated
    financial statements.
    

SOURCE AutoCanada Inc.

For further information: For further information: Tom Orysiuk, CA, Executive Vice-President and Chief Financial Officer, Phone: (780) 732-3139, Email: torysiuk@autocan.ca


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