AutoCanada Inc. releases financial results for the reporting period ended
June 30, 2010 and declares a quarterly dividend of $0.04 per common share:

A conference call to discuss the results for the reporting period ended June 30, 2010 will be held on August 5, 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, Aug. 4 /CNW/ - AutoCanada Inc. (the "Company" or "AutoCanada") (TSX: ACQ) today announced financial results for the reporting period ended June 30, 2010:

    
    -------------------------------------------------------------------------
                    2010 Second Quarter Operating Results

    -   Revenue increased by 20.8% or $42.0 million
    -   Same store revenue increased by 19.4% or $35.1 million
    -   Gross profit increased by 10.6% or $4.0 million
    -   Same store gross profit increased by 7.5% or $2.6 million
    -   Pre-tax earnings increased by 3.5% to $5.0 million
    -   EBITDA increased 0.7% to $6.2 million
    -   Net earnings decreased by 23.2% to $3.6 million
    -   Repair orders completed for the quarter were up 6.7%
    -   The number of new vehicles retailed increased by 19.0%
    -------------------------------------------------------------------------
    

In commenting on the financial results for the reporting period ended June 30, 2010, Pat Priestner, Chief Executive Officer of AutoCanada Inc. stated that, "The Canadian automotive retail market continues to improve from 2009 levels with respect to new vehicle sales. Strong competition among OEM's has created what is truly a "buyer's market" as a result of large customer incentives and rebates being offered by manufacturers. The incentives and rebates being offered have attracted many customers into dealer showrooms the past six months and have also made buying a new vehicle in Canada more affordable to the average customer. We continue to focus on growing our market share in key markets and improving the sales experience for our customers in order to build and maintain long-term relationships. During the second quarter, we are pleased to have signed an exclusivity agreement which enables us to provide AIR MILES Reward Miles to our customers. This customer reward program provides us with a competitive edge and should have a positive impact on customer loyalty. "

Second Quarter 2010 Highlights

    
    -   Net earnings of $3.6 million or basic and diluted earnings per share
        of $0.183.

    -   Pre-tax earnings of $5.0 million or basic and diluted pre-tax
        earnings per share of $0.251.

    -   Same store revenue increased by 19.4% in the second quarter of 2010,
        compared to the same quarter in 2009.

    -   Same store gross profit increased by 7.5% in the second quarter of
        2010, compared to the same quarter in 2009.

    -   Revenue from existing and new dealerships increased 20.8% to $244.3
        million in the second quarter of 2010 from $202.3 million in the same
        quarter in 2009.

    -   Gross profit from existing and new dealerships increased 10.6% to
        $41.8 million in the second quarter of 2010 from $37.8 million in the
        same quarter in 2009.

    -   EBITDA increased 0.7% to $6.2 million in the second quarter of 2010
        from $6.1 million in the same quarter in 2009.

    -   Free cash flow generated of $0.660 per share and adjusted free cash
        flow of $0.258 in the second quarter of 2010.

    -   On April 12, 2010 the Company completed the acquisition of Future
        Hyundai, located in Mississauga, Ontario, to be continued under the
        name 401/Dixie Hyundai.
    

Declaration of a Quarterly Dividend

The Board of Directors of AutoCanada declared today a quarterly eligible dividend of $0.04 per common share on AutoCanada's outstanding Class A common shares, payable on September 15, 2010 to shareholders of record at the close of business on August 31, 2010.

"AutoCanada will continue to move forward as a re-energized company. We have renewed our focus on customer loyalty by investing in our own people and building our relationships with various stakeholders in our industry in order to better serve our customers. We are committed to delivering shareholder value by investing in our Company and by returning cash to our shareholders by way of a regular quarterly dividend." said Pat Priestner, CEO of AutoCanada.

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 %)

                               Q3           Q4           Q1           Q2
                              2008         2008         2009         2009

    Income Statement Data
      New vehicles            118,807       96,634       87,176      108,181
      Used vehicles            57,790       47,605       49,550       55,098
      Parts, service &
       collision repair        26,492       27,105       26,390       27,322
      Finance, insurance &
       other                   13,597       11,023        9,683       11,669
                           --------------------------------------------------
    Revenue                   216,686      182,367      172,799      202,270
                           --------------------------------------------------

      New vehicles              9,266        6,729        5,828        7,951
      Used vehicles             5,156        3,671        3,810        5,677
      Parts, service &
       collision repair        13,290       13,090       12,811       13,708
      Finance, insurance &
       other                   12,629       10,137        8,732       10,489
                           --------------------------------------------------
    Gross profit               40,341       33,627       31,181       37,825
                           --------------------------------------------------

    Gross profit %              18.6%        18.4%        18.0%        18.7%
    Sales, general & admin
     expenses                  30,491       28,157       27,813       30,450
    SG&A exp. as % of
     gross profit               75.5%        83.7%        89.2%        80.5%
    Floorplan interest
     expense                    1,693        1,443          970        1,104
    Other interest & bank
     charges                      458          441          375          552
    Income taxes               (1,869)      (8,579)          97           67
    Net earnings(4)           (38,318)     (67,121)       1,054        4,750
    EBITDA(1)(4)                7,975        3,868        2,230        6,135

    Operating Data
     Vehicles (new and
     used) sold                 6,462        5,124        5,149        6,067
    New retail vehicles
     sold                       3,245        2,376        2,219        3,030
    New fleet vehicles
     sold                         532          526          473          446
    Used retail vehicles
     sold                       2,685        2,222        2,385        2,591
    Number of service &
     collision repair
     orders completed          74,300       69,560       70,021       75,062
    Absorption rate(2)            99%          94%          84%          90%
    No. of dealerships             21           22           22           22
    No. of same store
     dealerships(3)                14           14           16           17
    No. of service bays
     at period end                284          284          319          319
    Same store revenue
     growth(3)                (17.1)%      (16.7)%      (19.8)%      (15.3)%
    Same store gross
     profit growth(3)          (3.3)%       (8.0)%      (12.8)%       (8.7)%

    Balance Sheet Data
    Cash and cash
     equivalents               19,194       19,592       12,522       14,842
    Accounts receivable        39,390       31,195       33,821       27,034
    Inventories               134,565      139,948      116,478       90,141
    Revolving floorplan
     facilities               135,562      137,453      114,625       73,161


                               Q3           Q4           Q1           Q2
                              2009         2009         2010         2010

    Income Statement Data
      New vehicles            117,513      102,880      115,395      146,664
      Used vehicles            56,386       48,135       48,216       56,124
      Parts, service &
       collision repair        26,941       27,730       27,011       28,555
      Finance, insurance &
       other                   12,027       10,252       10,918       12,958
                           --------------------------------------------------
    Revenue                   212,867      188,997      201,540      244,301
                           --------------------------------------------------

      New vehicles              9,003        7,157        7,809       11,017
      Used vehicles             5,744        4,309        3,977        4,720
      Parts, service &
       collision repair        13,374       13,447       13,106       14,443
      Finance, insurance &
       other                   10,717        9,218        9,825       11,666
                           --------------------------------------------------
    Gross profit               38,838       34,131       34,717       41,846
                           --------------------------------------------------

    Gross profit %              18.3%        18.1%        17.2%        17.1%
    Sales, general & admin
     expenses                  30,565       29,313       29,834       33,273
    SG&A exp. as % of
     gross profit               78.7%        85.9%        85.9%        79.5%
    Floorplan interest
     expense                    1,399        1,382        1,661        2,198
    Other interest & bank
     charges                      802          552          362          442
    Income taxes                   37          248          522        1,337
    Net earnings(4)             5,099        1,675        1,433        3,647
    EBITDA(1)(4)                6,716        3,271        3,079        6,180

    Operating Data
     Vehicles (new and
     used) sold                 6,415        5,451        5,676        7,017
    New retail vehicles
     sold                       3,236        2,559        2,787        3,613
    New fleet vehicles
     sold                         619          695          661          943
    Used retail vehicles
     sold                       2,560        2,197        2,228        2,461
    Number of service &
     collision repair
     orders completed          79,346       76,853       75,311       80,072
    Absorption rate(2)            92%          91%          85%          87%
    No. of dealerships             22           22           22           23
    No. of same store
     dealerships(3)                18           19           19           19
    No. of service bays
     at period end                321          331          331          339
    Same store revenue
     growth(3)                 (3.9)%         1.3%        16.9%        19.4%
    Same store gross
     profit growth(3)          (6.3)%       (1.1)%        11.1%         7.5%

    Balance Sheet Data
    Cash and cash
     equivalents               23,224       22,465       23,615       31,880
    Accounts receivable        38,134       35,388       40,752       46,826
    Inventories               107,431      108,324      153,847      177,524
    Revolving floorplan
     facilities               105,254      102,650      160,590      194,388
    

Company management considers same store gross profit and sales information to be an important operating metric when comparing the results of the Company to other industry participants.

The following table summarizes the sales for the three and six months ended June 30, 2010 on a same store basis by revenue source and compares these results to the same periods in 2009.

    
                     Same Store Revenue and Vehicles Sold

                       For the Three Months Ended   For the Six Months Ended
    (In thousands of   --------------------------  --------------------------
     dollars except
     % change and       June 30, June 30,     %    June 30, June 30,     %
     vehicle data)         2010     2009   Change     2010     2009   Change
                                          --------                   --------

    Revenue Source

    New vehicles        128,116   94,436    35.7%  232,844  172,252    35.2%

    Used vehicles        51,959   51,387     1.1%   97,046   98,193   (1.2)%

    Finance & insurance
     and other           11,133   10,656     4.5%   21,017   19,509     7.7%
                        -------- -------- -------- -------- -------- --------

    Subtotal            191,208  156,479           350,907  289,954

    Parts, service &
     collision repair    25,226   24,862     1.5%   49,860   49,113     1.5%
                        -------- -------- -------- -------- -------- --------

    Total               216,434  181,341    19.4%  400,767  339,067    18.2%
                        -------- -------- -------- -------- -------- --------
                        -------- -------- -------- -------- -------- --------

    New vehicles
     - retail sold        3,039    2,560    18.7%    5,528    4,618    19.7%

    New vehicles
     - fleet sold           941      464   102.8%    1,588      876    81.3%

    Used vehicles sold    2,267    2,398   (5.5)%    4,322    4,606   (6.2)%
                        -------- -------- -------- -------- -------- --------

    Total                 6,247    5,422    15.2%   11,438   10,100    13.2%
                        -------- -------- -------- -------- -------- --------
                        -------- -------- -------- -------- -------- --------

    Total vehicles
     retailed             5,306    4,958     7.0%    9,850    9,224     6.8%
                        -------- -------- -------- -------- -------- --------
                        -------- -------- -------- -------- -------- --------
    

The following table summarizes the gross profit for the three and six months ended June 30, 2010 on a same store basis by revenue source and compares these results to the same period in 2009.

    
             Same Store Gross Profit and Gross Profit Percentage

                                    For the Three Months Ended

                               Gross Profit            Gross Profit %
    (In thousands of
     dollars except
     % change and       June 30, June 30,     %    June 30, June 30,     %
     gross profit %)       2010     2009   Change     2010     2009   Change
                                          --------                   --------
    Revenue Source

    New vehicles          9,702    7,204     34.7%     7.5%     7.6%   (1.3)%

    Used vehicles         4,522    5,146   (12.1)%     8.7%    10.0%  (13.0)%

    Finance & insurance
     and other           10,351    9,788      5.8%    93.0%    91.9%     1.2%
                        -------- -------- --------

    Subtotal             24,575   22,138     10.5%

    Parts, service &
     collision repair    12,728   12,559      1.3%    50.5%    50.5%     0.0%
                        -------- -------- -------- -------- -------- --------

    Total                37,303   34,697      7.5%    17.2%    19.1%   (9.9)%
                        -------- -------- -------- -------- -------- --------
                        -------- -------- -------- -------- -------- --------


                                    For the Six Months Ended

                               Gross Profit            Gross Profit %
    (In thousands of
     dollars except
     % change and
     gross profit %)    June 30, June 30,     %    June 30, June 30,     %
     vehicle data)         2010     2009   Change     2010     2009   Change
                                          --------                   --------

    Revenue Source

    New vehicles         16,791   12,126     38.5%     7.2%     7.0%     2.9%

    Used vehicles         8,253    8,984    (8.1)%     8.5%     9.2%   (7.6)%

    Finance & insurance
     and other           19,444   17,931      8.4%    92.5%    91.9%     0.7%
                        -------- -------- --------

    Subtotal             44,488   39,041     14.0%

    Parts, service &
     collision repair    24,730   24,393      1.4%    49.6%    49.7%   (0.2)%
                        -------- -------- -------- -------- -------- --------

    Total                69,218   63,434      9.1%    17.3%    18.7%   (7.5)%
                        -------- -------- -------- -------- -------- --------
                        -------- -------- -------- -------- -------- --------
    

About AutoCanada

AutoCanada is one of Canada's largest multi-location automobile dealership groups, currently operating 23 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:

    
    -   The impact that the AIR MILES Reward Miles program may have on
        customer loyalty;
    -   Our commitment to future quarterly dividends;
    

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.

Adjusted Free Cash Flow

Adjusted free cash flow is a measure used by management to evaluate its performance. Free cash flow is considered relevant because it provides an indication of how much cash generated by operations before changes in non-cash working capital is available after deducting expenditures for non-growth capital assets. It shall be noted that although we consider this measure to be adjusted 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 adjusted free cash flow may not actually be available for growth or distribution of the Company. References to "Adjusted free cash flow" are to cash provided by (used in) operating activities (before changes in non-cash working capital balances) less non-growth capital expenditures.

Absorption Rate

Absorption rate is an operating measure commonly used in the retail automotive industry as an indicator of the performance of the parts, service and collision repair operations of a franchised automobile dealership. Absorption rate is not a measure recognized by GAAP and does not have a standardized meaning prescribed by GAAP. Therefore, absorption rate may not be comparable to similar measures presented by other issuers that operate in the retail automotive industry. References to ''absorption rate'' are to the extent to which the gross profits of a franchised automobile dealership from parts, service and collision repair cover the costs of these departments plus the fixed costs of operating the dealership, but does not include expenses pertaining to our head office. For this purpose, fixed operating costs include fixed salaries and benefits, administration costs, occupancy costs, insurance expense, utilities expense and interest expense (other than interest expense relating to floor plan financing) of the dealerships only.

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.
    Interim Consolidated Balance Sheet
    -------------------------------------------------------------------------
    (expressed in Canadian dollar thousands)
                                                      June 30,   December 31,
                                                         2010           2009
                                                   (Unaudited)

                                                            $              $
    ASSETS

    Current assets
    Cash and cash equivalents                          31,880         22,465
    Accounts receivable                                46,826         35,388
    Inventories (note 5)                              177,524        108,324
    Prepaid expenses                                    3,037          1,649
    Future income taxes                                     -            500
                                                     ---------      ---------

                                                      259,267        168,326

    Property & equipment                               18,070         17,794
    Intangible assets (note 4)                         45,059         43,700
    Goodwill (note 4)                                     221              -
    Future income taxes                                     -          1,647
    Leasehold inducements (note 8)                      2,996          2,142
    Other assets                                           56             56
                                                     ---------      ---------

                                                      325,669        233,665
                                                     ---------      ---------
                                                     ---------      ---------

    LIABILITIES

    Current liabilities
    Accounts payable and accrued liabilities           25,965         25,556
    Revolving floorplan facilities (note 6)           194,388        102,650
    Income taxes payable                                1,533              -
    Current portion of long-term debt (note 7)            263            271
    Future income taxes                                     -          2,012
                                                     ---------      ---------

                                                      222,149        130,489

    Long-term debt (note 7)                            18,942         23,074
    Future income taxes                                   191              -
                                                     ---------      ---------

                                                      241,282        153,563
                                                     ---------      ---------

    Economic dependence (note 2)

    SHAREHOLDERS' EQUITY

    Share capital                                     190,435        190,435
    Contributed surplus                                 3,918          3,918
    Deficit                                          (109,966)      (114,251)
                                                     ---------      ---------
                                                       84,387         80,102
                                                     ---------      ---------

                                                      325,669        233,665
                                                     ---------      ---------
                                                     ---------      ---------



    AutoCanada Inc.
    Interim Consolidated Statement of Operations, Comprehensive Income
     and Deficit
    -------------------------------------------------------------------------
    (expressed in Canadian dollar thousands except share and per share
     amounts)

                                Three        Three          Six          Six
                         Months ended Months ended Months ended Months ended
                              June 30,     June 30,     June 30,     June 30,
                                 2010         2009         2010         2009
                           (unaudited)  (unaudited)  (unaudited)  (unaudited)

                                    $            $            $            $
    Revenue
    Vehicles                  215,064      174,549      389,188      320,495
    Parts, service and
     collision repair          28,747       27,323       55,802       53,718
    Other                         490          398          851          856
                          ---------------------------------------------------

                              244,301      202,270      445,841      375,069
    Cost of sales (note 5)    202,454      164,445      369,277      306,063
                          ---------------------------------------------------

    Gross profit               41,847       37,825       76,564       69,006
                          ---------------------------------------------------

    Expenses
    Selling, general and
     administrative            33,273       30,450       63,107       58,263
    Interest                    2,640        1,656        4,663        3,001
    Amortization                  950          902        1,855        1,774
                          ---------------------------------------------------

                               36,863       33,008       69,625       63,038
                          ---------------------------------------------------
    Earnings before income
     taxes                      4,984        4,817        6,939        5,968

    Income taxes                1,337           67        1,859          164
                          ---------------------------------------------------

    Net earnings &
     comprehensive income
     for the period             3,647        4,750        5,080        5,804

    Deficit, beginning of
     period                  (112,818)    (125,775)    (114,251)    (124,344)

    Dividends declared           (795)           -         (795)      (2,485)
                          ---------------------------------------------------

    Deficit, end of period   (109,966)    (121,025)    (109,966)    (121,025)
                          ---------------------------------------------------
                          ---------------------------------------------------

    Earnings per share
    Basic                       0.183        0.239        0.256        0.292
                          ---------------------------------------------------
                          ---------------------------------------------------

    Diluted                     0.183        0.239        0.256        0.292
                          ---------------------------------------------------
                          ---------------------------------------------------

    Weighted average
     shares
    Basic                  19,880,930   19,880,930   19,880,930   19,880,930
                          ---------------------------------------------------
                          ---------------------------------------------------

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



    AutoCanada Inc.
    Interim Consolidated Statement of Cash Flows
    -------------------------------------------------------------------------
    (expressed in Canadian dollar thousands)

                                Three        Three          Six          Six
                         Months ended Months ended Months ended Months ended
                              June 30,     June 30,     June 30,     June 30,
                                 2010         2009         2010         2009
                           (unaudited)  (unaudited)  (unaudited)  (unaudited)

    Cash provided by
     (used in)                      $            $            $            $

    Operating activities
    Net earnings
     for the period             3,647        4,750        5,080        5,804
    Items not affecting cash
      Future income taxes       1,351           67          326          164
      Unit based compensation       -           22            -           61
      Amortization                950          902        1,855        1,774
      (Gain) loss on
        disposal of
        property &
        equipment                   -          (18)          (2)          (9)
                          ---------------------------------------------------

                                5,948        5,723        7,259        7,794
    Net change in non-cash
     working capital
     balances                   8,321       (3,112)      13,128       (8,397)
                          ---------------------------------------------------

                               14,269        2,611       20,387         (603)
                          ---------------------------------------------------

    Investing activities
    Business acquisitions
     (note 4)                  (3,550)           -       (3,550)           -
    Payments of leasehold
     inducements                 (427)           -         (854)           -
    Purchase of property &
     equipment                 (1,156)      (2,175)      (1,697)      (3,240)
    Proceeds on sale of
     property & equipment           1           11           64           55
    Restricted cash                 -        2,531            -        2,313
                          ---------------------------------------------------

                               (5,132)         367       (6,037)        (872)
                          ---------------------------------------------------

    Financing activities
    Proceeds from
     long term debt                 -            -            -          286
    Repayment of
     long term debt               (77)        (658)      (4,140)      (1,076)
    Dividends paid               (795)           -         (795)      (2,485)
                          ---------------------------------------------------

                                 (872)        (658)      (4,935)      (3,275)
                          ---------------------------------------------------

    Increase (decrease)
     in cash                    8,265        2,320        9,415       (4,750)

    Cash and cash
     equivalents,
     beginning of
     period                    23,615       12,522       22,465       19,592
                          ---------------------------------------------------
    Cash and cash
     equivalents,
     end of period             31,880       14,842       31,880       14,842
                          ---------------------------------------------------
                          ---------------------------------------------------

    Supplementary information

      Cash interest paid        2,685        1,306        4,542        2,792
      Transfer of inventory
       to property & equipment    395          189          502          366
      Transfer of property &
       equipment to inventory     333          168          410          420
    

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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