AutoCanada Income Fund releases financial results for the reporting period ended June 30, 2008



    
    A conference call to discuss the results for the period ended June 30,
    2008 will be held on August 11, 2008 at 11 a.m. Eastern time. To
    participate in the conference call, please dial 1-800-732-0232 or
    1-416-644-3415 approximately 10 minutes prior to the call. A live and
    archived audio webcast of the conference call will also be available on
    the Fund's website www.autocan.ca.

    EDMONTON, Aug. 11 /CNW/ - AutoCanada Income Fund (the "Fund") (TSX:
ACQ.UN) today announced financial results for the three-month period ended
June 30, 2008.

             ---------------------------------------------------
                    2008 Second Quarter Operating Results

                    -  Revenue increased by 6.8%
                    -  Gross profit increased by 8.8%
                    -  Same store revenue decreased by 3.8%
                    -  Same store gross profit increased by 0.2%
                    -  EBITDA increased by 19.0%
                    -  Adjusted payout ratio of 66.4%
             ---------------------------------------------------

    Second Quarter 2008 Summary

    -   Adjusted distributable cash for the second quarter of 2008 increased
        by $1.7 million or 29.4% to $7.6 million from $5.9 million in the
        comparable period in the prior year. As a result, adjusted
        distributable cash for the six months ended June 30, 2008 increased
        by $1.1 million or 10.4% to $12.0 million from $10.8 million in the
        comparable period in the prior year.

    -   For the second quarter of 2008, the Fund generated net earnings of
        $6.8 million or basic earnings per unit of $0.335, standardized
        distributable cash of $0.619 per unit and adjusted distributable cash
        of $0.376 per unit, and declared distributions of $0.25 per unit, for
        a standardized payout ratio of 40.3% and an adjusted payout ratio of
        66.4%.

    -   Same store revenue decreased 3.8% and same store gross profit
        increased by 0.2% in the second quarter of 2008, compared to the
        results of the Fund for the same quarter in 2007.

    -   Revenue from existing and new dealerships increased by 6.8% to
        $229.3 million in the second quarter of 2008 from the $214.7 million
        in the same quarter in 2007.

    -   Gross profit from existing and new dealerships increased by 8.8% to
        $40.0 million in the second quarter of 2008 from the $36.8 million in
        the same quarter in 2007.

    -   EBITDA increased by 19.0% to $8.0 million in the second quarter of
        2008 from the $6.7 million in the same quarter in 2007.

    -   Net earnings increased to $6.8 million in the second quarter of 2008
        from a $13.4 million loss in the same quarter in 2007. The majority
        of this increase was due to the recognition of a future income tax
        expense of $0.273 million in the three-month period ended June 30,
        2008 compared to the $19.107 million future income tax expense
        incurred during the same period in the prior year as a result of new
        tax legislation that was substantively enacted on June 12, 2007.

    -   On March 27, 2008, the Fund announced that Nissan Canada Inc. had
        approved the purchase, which closed on April 1, 2008, by AutoCanada
        of the assets of Doner Infiniti Nissan, located in Newmarket,
        Ontario. The dealership is continuing to operate under the name Doner
        Infiniti Nissan, and is operating out of a 22,000 square foot
        facility with 14 service bays plus 4 other bays and a 16 new vehicle
        showroom. Doner Nissan/Infiniti has been in operation since 1977, and
        in 2007, sold 754 new vehicles and 429 used vehicles.

    -   The Fund's Grande Prairie Subaru dealership located in Grande
        Prairie, Alberta, moved to a new dealership facility in late April,
        2008. The new dealership facility expanded the dealership from
        approximately 2,500 sq. ft. to 7,300 sq. ft. with a four vehicle
        showroom and increased the number of service bays from two to five.

    -   On May 6, 2008, the Fund announced that it had not been able to
        secure Toyota's approval to permit its dealerships to be owned
        directly by the Fund. The Fund shall continue with its efforts to
        cultivate relationships with all manufacturers of brands not
        presently represented by the Fund to address issues that they may
        have with respect to the Fund, with the intent of building a
        relationship that shall benefit both the Fund and the manufacturer.
        As a result, in May of 2008, the Fund adjusted its projections with
        respect to the Fund's ability to grow the number of dealerships that
        it owns and operates for 2008 to two or three additional dealerships.

    Highlights of Events Subsequent to June 30th, 2008

    -   On July 8, 2008, the Fund announced that it completed the purchase of
        the assets of Cambridge Hyundai, located in Cambridge, Ontario, as
        well as the land and dealership premises. The dealership is
        continuing to operate under the name Cambridge Hyundai, and just
        prior to the acquisition by the Fund had relocated to a new 15,300
        square foot facility located on three acres of land. The new facility
        has eight service bays, a double drive through and a six vehicle new
        car showroom. Cambridge Hyundai has been in operation since 1996, and
        in its prior facility sold 293 new vehicles and 128 used vehicle in
        2007.
    

    In commenting on the results of the past quarter, Patrick Priestner,
AutoCanada's Founder and Chief Executive Officer commented that "During this
period of rapid and significant change that Canadian automotive retailers
faced as a result of higher fuel costs and market turbulence impacting used
vehicle operations in particular, we are very proud of how our dealerships and
employees have been able to adjust their business strategies. In addition, I
would like to note that we have experienced significant growth in our higher
margin parts, service and collision repair business this quarter with
increases in revenue and gross profit of 14.6% and 14.1% respectively. We have
seen a shift in consumer preferences to more fuel efficient vehicles and
significant declines in used vehicle prices. Fundamentally, our business is
strong and we continue to see growth in the cash flow generated from our
dealership group that allows us the ability to provide consistent
distributions to unitholders and management is focused on achieving our growth
targets as we move into our busiest quarter of the year."
    Mr. Priestner further noted that "We are particularly proud of the recent
acquisition of Cambridge Hyundai this July and the successful integration of
Doner Infiniti Nissan and look forward to working with all of our manufacturer
partners to take advantage of a robust Canadian retail market for the balance
of 2008."

    Distributions to Unitholders

    The Fund's policy is to distribute annually to Unitholders available cash
provided by operations after cash required for capital expenditures, working
capital reserves, growth capital reserves and other reserves considered
advisable by the Trustees of the Fund. The policy allows the Fund to make
stable monthly distributions to its Unitholders based on the Fund's estimate
of distributable cash for the year. The Fund pays cash distributions on or
about the 15th of each month to Unitholders of record on the last business day
of the previous month.
    The following table summarizes the distributions declared by the Fund for
the period from January 1, 2008 to June 30, 2008.

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

    January 31,   February 15,
     2008          2008          912     912     775     775   1,687   1,687
    February 28,  March 15,
     2008          2008          913     913     775     775   1,688   1,688
    March 31,     April 16,
     2008          2008          912     912     775     775   1,687   1,687
    April 30,     May 15,
     2008          2008          912     912     775     775   1,687   1,687
    May 30,       June 16,
     2008          2008          913     913     775     775   1,688   1,688
    June 30,      July 15,
     2008          2008(1)       912       -     775       -   1,687       -
                              -----------------------------------------------
                               5,474   4,562   4,650   3,875  10,124   8,437

    Note:
    (1) Distributions payable to all Unitholders in the amount of $1,687 as
        at June 30, 2008 were paid in July, 2008.


    Distributions are paid on Fund Units and Exchangeable Units. As of
June 30, 2008 the following numbers of units were outstanding:

              Fund Units                      10,949,500
              Exchangeable Units               9,307,500
                                            -------------

                                              20,257,000
                                            -------------
                                            -------------
    

    During the three-month and six-month periods ended June 30, 2007, the
Fund declared distributions of $0.25 and $0.50 respectively per Fund Unit and
Exchangeable Unit to Unitholders. The distributions in the period ended
June 30, 2008 were funded from cash flow generated from operations. The Fund
reviews its distribution policy on a periodic basis.


    SELECTED QUARTERLY FINANCIAL INFORMATION AND RESULTS FROM OPERATIONS

    The following table shows the unaudited results of the Fund 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
                                         2006      2006      2007      2007
    Income Statement Data
      New vehicles                     106,424    98,970   109,862   117,204
      Used vehicles                     53,897    46,425    53,020    62,389
      Parts, service &
       collision repair                 19,632    21,410    21,908    23,228
      Finance, insurance & other         9,908     9,274     9,590    11,890
                                      ---------------------------------------
    Revenue                            189,861   176,079   194,379   214,711
                                      ---------------------------------------

      New vehicles                       6,792     6,998     7,000     8,312
      Used vehicles                      5,563     3,614     4,914     6,082
      Parts, service &
       collision repair                  8,721     9,514    10,223    11,305
      Finance, insurance & other         9,742     8,804     9,155    11,078
                                      ---------------------------------------
    Gross profit                        30,818    28,930    31,292    36,777
                                      ---------------------------------------

    Gross profit %                       16.2%     16.4%     16.1%     17.1%
    Sales, general & admin expenses     22,481    21,682    23,634    27,522
    SG&A exp. as % of gross profit       72.9%     74.9%     75.5%     74.8%
    Floorplan interest expense           1,854     2,085     2,069     2,414
    Other interest & bank charges          117       405       316       326
    Future income taxes                      -         -         -    19,107
    Net earnings(4)                      5,220     3,623     4,483   (13,362)
    EBITDA(1)(4)                         6,366     4,906     5,424     6,743

    Operating Data
    Vehicles (new and used) sold         5,369     4,690     5,440     6,089
    New retail vehicles sold             2,741     2,199     2,295     2,866
    New fleet vehicles sold                371       525       886       535
    Used retail vehicles sold            2,257     1,966     2,259     2,688
    Number of service & collision
     repair orders completed            54,345    55,393    57,876    58,157
    Absorption rate(2)                     97%       96%       92%       94%
    No. of dealerships                      14        16        17        18
    No. of same store dealerships(3)         9         9         9         9
    No. of service bays at period end      223       245       250       256
    Same store revenue growth(3)          3.8%     10.4%     24.1%      6.6%
    Same store gross profit growth(3)    12.5%      6.3%     20.1%     13.4%

    Balance Sheet Data
    Cash and cash equivalents           20,265    20,880    24,268    21,077
    Accounts receivable                 30,562    27,742    31,200    35,980
    Inventories                        101,252   112,680   117,034   132,814
    Revolving floorplan facilities     103,297   113,357   118,974   133,731


    (In thousands of dollars except
     Operating Data and gross profit %)

                                          Q3        Q4        Q1        Q2
                                         2007      2007      2008      2008
    Income Statement Data
      New vehicles                     133,853   111,683   107,688   128,371
      Used vehicles                     59,114    50,468    55,712    61,223
      Parts, service &
       collision repair                 23,142    23,863    23,536    26,610
      Finance, insurance & other        12,905    10,697    11,180    13,121
                                      ---------------------------------------
    Revenue                            229,014   196,711   198,116   229,325
                                      ---------------------------------------

      New vehicles                       9,024     8,176     7,012     9,699
      Used vehicles                      4,943     3,746     4,393     5,180
      Parts, service &
       collision repair                 11,267    11,494    11,082    12,896
      Finance, insurance & other        12,067    10,106    10,579    12,244
                                      ---------------------------------------
    Gross profit                        37,301    33,522    33,066    40,019
                                      ---------------------------------------

    Gross profit %                       16.3%     17.0%     16.7%     17.5%
    Sales, general & admin expenses     26,905    25,654    26,317    29,916
    SG&A exp. as % of gross profit       72.1%     76.5%     79.6%     74.8%
    Floorplan interest expense           2,679     2,432     2,034     1,895
    Other interest & bank charges          312       296       256       396
    Future income taxes                    443    (2,186)      610       273
    Net earnings(4)                      6,168     6,470     3,078     6,781
    EBITDA(1)(4)                         7,600     5,310     4,621     8,022

    Operating Data
    Vehicles (new and used) sold         6,404     5,363     5,552     6,576
    New retail vehicles sold             3,344     2,630     2,462     3,471
    New fleet vehicles sold                543       557       716       470
    Used retail vehicles sold            2,517     2,176     2,374     2,635
    Number of service & collision
     repair orders completed            58,138    57,552    61,169    72,227
    Absorption rate(2)                    104%       93%       90%      100%
    No. of dealerships                      19        19        19        20
    No. of same store dealerships(3)        11        11        13        14
    No. of service bays at period end      260       260       260       279
    Same store revenue growth(3)          8.2%      5.3%    (0.6)%    (3.8)%
    Same store gross profit growth(3)     7.2%      6.5%      0.7%      0.2%

    Balance Sheet Data
    Cash and cash equivalents           20,179    18,014    15,298    18,459
    Accounts receivable                 39,940    34,274    36,411    35,374
    Inventories                        147,419   142,128   132,549   135,447
    Revolving floorplan facilities     152,390   143,655   134,023   131,505

    (1) EBITDA has been calculated as described under "Non-GAAP Measures"
        above.
    (2) Absorption has been calculated as described under "Non-GAAP
        Measures" above.
    (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 also cause substantial fluctuations in
        operating results from quarter to quarter.


    The following table summarizes the results for the three-month and
six-month periods ended June 30, 2008 on a same store basis by revenue source
and compares these results to the same periods in 2007.

             Same Store Gross Profit and Gross Profit Percentage

                                  For the Three Months Ended

    (In thousands of       Gross Profit                 Gross Profit %
     dollars except
     % change
     and gross     June 30,  June 30,      %     June 30,  June 30,      %
     profit %)       2008      2007     Change     2008      2007     Change
                                        ------                        ------
    Revenue Source

    New vehicles     8,084     7,409      9.1%      8.0%      7.1%      0.9%

    Used vehicles    4,502     5,703   (21.1)%      8.4%      9.6%    (1.2)%

    Finance &
     insurance
     and other      10,323    10,407    (0.8)%     94.2%     95.0%    (0.8)%
                   --------  --------  --------

    Subtotal        22,909    23,519    (2.6)%

    Parts, service
     & collision
     repair         11,068    10,406      6.4%     48.0%     47.4%      0.6%
                   --------  --------  --------  --------  --------  --------

    Total           33,977    33,925      0.2%     18.0%     17.3%      0.7%
                   --------  --------  --------  --------  --------  --------
                   --------  --------  --------  --------  --------  --------


                                   For the Six Months Ended

    (In thousands of       Gross Profit                 Gross Profit %
     dollars except
     % change
     and gross     June 30,  June 30,      %     June 30,  June 30,      %
     profit %)       2008      2007     Change     2008      2007     Change
                                        ------                        ------

    Revenue Source

    New vehicles    13,760    13,291      3.5%      7.3%      6.9%      0.4%

    Used vehicles    8,110     9,956   (18.5)%      8.2%      9.5%    (1.3)%

    Finance &
     insurance
     and other      19,018    18,205      4.5%     94.6%     95.1%    (0.5)%
                   --------  --------  --------

    Subtotal        40,888    41,452    (1.4)%

    Parts, service
     & collision
     repair         19,367    18,543      4.4%     47.4%     47.0%      0.4%
                   --------  --------  --------  --------  --------  --------

    Total           60,255    59,995      0.4%     17.3%     16.9%      0.4%
                   --------  --------  --------  --------  --------  --------
                   --------  --------  --------  --------  --------  --------
    

    About AutoCanada

    The Fund commenced business operations on May 11, 2006, when it completed
an initial public offering (the "IPO") of 10,209,500 trust units ("Fund
Units"), at a price of $10 per unit, for aggregate gross proceeds of
$102,095,000. Concurrent with the closing of the IPO, the Fund used the
proceeds from the IPO to acquire an indirect 50.4% interest in AutoCanada
Limited Partnership ("AutoCanada LP") and AutoCanada LP used such net proceeds
to acquire the net assets (the "Purchased Assets") of Canada One Auto Group.
On May 31, 2006, as a result of the exercise of the over allotment option
granted to underwriters, the Fund acquired a further 3.65% interest in the
Purchased Assets and thus increased its total interest in the Purchased Assets
to 54.05%.
    AutoCanada is Canada's only publicly traded entity with interests
exclusively in the operation of franchised automobile dealerships. Through its
54% interest in AutoCanada LP, it presently owns or manages 21 franchised
automobile dealerships in six provinces and has over 1,070 employees. Through
its owned and managed dealerships, it currently sells Chrysler, Dodge,
Jeep(R), Infiniti, Nissan, Hyundai, Subaru and Mitsubishi branded vehicles. In
2007, its owned and managed dealerships sold approximately 23,300 vehicles,
processed approximately 231,700 service and collision repair orders in
260 service bays, and generated revenue of approximately $835 million.

    Forward-Looking Statements

    Certain statements contained in management's discussion and analysis
include statements which contain words such as "anticipate", "expect",
"estimate", "could", "should", "expect", "plan", "seek", "may", "intend",
"likely", "will", "believe" and similar expressions, statements relating to
matters that are not historical facts, and such statements of the beliefs,
intentions and expectations of AutoCanada about development, results and
events which will or may occur in the future, constitute "forward-looking
information" within the meaning of applicable Canadian securities legislation
and are based on certain assumptions and analysis made by AutoCanada and
derived from experience and perceptions. Forward-looking information in
management's discussion and analysis includes, but is not limited to: trends
and developments in the automotive industry; business strategies and outlooks;
expansion and growth of business and operations; and anticipated acquisitions.
    All such forward-looking information is based on certain assumptions and
analyses made by AutoCanada in light of management's experience and perception
of historical trends, current conditions and expected future developments, as
well as other factors AutoCanada believes are appropriate in the
circumstances. The risks, uncertainties, and assumptions are difficult to
predict and may affect operations, and may include, without limitation:
foreign exchange fluctuations; equipment and labour shortages and inflationary
costs; general economic conditions; industry conditions; changes in applicable
environmental, taxation and other laws and regulations as well as how such
laws and regulations are interpreted and enforced; operating risks; risks
inherent in the ability to generate sufficient cash flow from operations to
meet current and future obligations; increased competition; stock market
volatility; opportunities available to or pursued by AutoCanada; the ability
to obtain financing as and when needed; and other factors, many of which are
beyond the control of AutoCanada. The foregoing factors are not exhaustive and
are further discussed in AutoCanada's final prospectus dated May 3, 2006 and
the Fund's Annual Information Form for the year ended December 31, 2007 both
of which are filed on SEDAR at www.sedar.com.
    Actual results, performance or achievements could differ materially from
those expressed in, or implied by, this forward-looking information and,
accordingly, no assurance can be given that any of the events anticipated by
the forward-looking information will transpire or occur, or if any of them do
so, what benefits will be derived therefrom. Except as required by applicable
law, AutoCanada disclaims any intention or obligation to update or revise any
forward-looking information, whether as a result of new information, future
events or otherwise. The forward-looking information contained in this
management's discussion and analysis are expressly qualified by this
cautionary statement.

    Non-GAAP Measures

    References to "EBITDA" are to earnings before interest expense (other
than interest expense on floorplan financing and other interest), income
taxes, depreciation and amortization. Management believes that, in addition to
earnings or loss, EBITDA is a useful supplemental measure of both performance
and cash available for distribution before debt service, changes in working
capital, capital expenditures and income taxes.
    References to "standardized distributable cash" and "adjusted
distributable cash" are to cash flow provided by operating activities
available for distribution to Unitholders of the Fund (the "Unitholders") in
accordance with the distribution policies of the Fund. Standardized
distributable cash and adjusted distributable cash of the Fund are measures
generally used by Canadian open-ended trusts as an indicator of financial
performance. As two of the factors that may be considered relevant by
prospective investors is the cash distributed by the Fund relative to the
price of the Units, management believes that standardized distributable cash
and adjusted distributable cash of the Fund are useful supplemental measures
that may assist prospective investors in assessing an investment in the Fund.
Standardized distributable cash is calculated as cash flows from operating
activities, including the effects of changes in non-cash working capital, less
total capital expenditures. Adjusted distributable cash is calculated as cash
flows provided by operating activities before changes in non-cash working
capital, less purchases of non-growth property and equipment.
    References to "standardized payout ratio" represent a comparison of
distributions declared to standardized distributable cash. References to
"adjusted payout ratio" represent a comparison of distributions declared to
adjusted distributable cash. Management believes that both standardized payout
ratio and adjusted payout ratio are indicators of the Fund's conservatism and
its ability to continue to make distributions to unitholders at current rates.
    EBITDA, standardized distributable cash, adjusted distributable cash,
standardized payout ratio and adjusted payout ratio are not earnings measures
recognized by GAAP and do not have standardized meanings prescribed by GAAP.
Investors are cautioned that EBITDA, standardized distributable cash, adjusted
distributable cash, standardized payout ratio and adjusted payout ratio should
not replace net earnings or loss (as determined in accordance with GAAP) as an
indicator of the Fund's performance, of its cash flows from operating,
investing and financing activities or as a measure of its liquidity and cash
flows. The Fund's methods of calculating EBITDA, adjusted distributable cash,
and adjusted payout ratio may differ from the methods used by other issuers.
Therefore, the Fund's EBITDA, adjusted distributable cash, and adjusted payout
ratio may not be comparable to similar measures presented by other issuers.
For a reconciliation of adjusted distributable cash to standardized
distributable cash, please see "Adjusted Distributable Cash" below.
    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. 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.
    Additional information about AutoCanada Income Fund is available at the
Fund's website at www.autocan.ca and www.sedar.com.



    
    AutoCanada Income Fund
    Interim Consolidated Balance Sheet
    -------------------------------------------------------------------------

    (expressed in Canadian dollar thousands)
                                                        June 30, December 31,
                                                           2008         2007
                                                     (Unaudited)

    ASSETS                                                    $            $

    Current assets
    Cash and cash equivalents                            18,459       18,014
    Restricted cash                                       2,973        4,356
    Accounts receivable                                  35,374       34,274
    Inventories (note 5)                                135,447      142,128
    Due from related parties                                  -           28
    Prepaid expenses                                      3,019        1,561
                                                    ------------ ------------

                                                        195,272      200,361

    Property and equipment                               12,093       11,445
    Intangible assets                                    82,009       79,956
    Goodwill                                             85,448       82,501
    Other assets                                             90           78
                                                    ------------ ------------

                                                        374,912      374,341
                                                    ------------ ------------
                                                    ------------ ------------
    LIABILITIES

    Current liabilities
    Accounts payable and accrued liabilities             27,411       22,488
    Revolving floorplan facility (note 6)               131,505      143,655
    Distributions payable (note 10)                       1,687        1,687
    Due to related parties                                  171            -
    Current portion of long-term debt (note 7)              288          210
    Current portion of obligation under capital lease       140          112
                                                    ------------ ------------

                                                        161,202      168,152

    Long-term debt (note 7)                              17,160       10,394
    Obligation under capital lease                          430          395
    Future income taxes (note 12)                        18,247       17,364
                                                    ------------ ------------

                                                        197,039      196,305
                                                    ------------ ------------
    Contingencies (note 8)

    UNITHOLDERS' EQUITY

    Fund units (note 9 (a) and (b))                     105,200      105,200
    Exchangeable units (note 9 (c))                      88,847       88,847
    Contributed surplus (note 9 (d))                      1,059          957
    Deficit                                             (17,233)     (16,968)
                                                    ------------ ------------

                                                        177,873      178,036
                                                    ------------ ------------

                                                        374,912      374,341
                                                    ------------ ------------
                                                    ------------ ------------



    AutoCanada Income Fund
    Interim Consolidated Statement of Operations, Comprehensive Income (Loss)
    and Deficit
    -------------------------------------------------------------------------

    (expressed in Canadian dollar thousands except unit and per unit amounts)

                                Three        Three          Six          Six
                               Months       Months       Months       Months
                                Ended        Ended        ended        ended
                              June 30,     June 30,     June 30,     June 30,
                                 2008         2007         2008         2007
                           (unaudited)  (unaudited)  (unaudited)  (unaudited)

                                    $            $            $            $

    Revenue
    Vehicles                  202,177      190,824      376,269      362,755
    Parts, service and
     collision repair          26,610       23,228       50,146       45,136
    Other                         538          659        1,026        1,199
                          ---------------------------------------------------

                              229,325      214,711      427,441      409,090
    Cost of sales (note 5)    189,306      177,934      354,356      341,021
                          ---------------------------------------------------

    Gross profit               40,019       36,777       73,085       68,069
                          ---------------------------------------------------

    Expenses
    Selling, general and
     administrative            29,916       27,522       56,233       51,156
    Interest                    2,291        2,740        4,581        5,125
    Amortization                  758          770        1,529        1,560
                          ---------------------------------------------------

                               32,965       31,032       62,343       57,841
                          ---------------------------------------------------

    Earnings before
     income taxes               7,054        5,745       10,742       10,228
    Future income
     taxes (note 12)              273       19,107          883       19,107
                          ---------------------------------------------------

    Net earnings (loss)
     & comprehensive
     income (loss)
     for the period             6,781      (13,362)       9,859       (8,879)
    Deficit, beginning
     of period                (18,952)      (1,056)     (16,968)        (478)
    Distributions
     declared (note 10)        (5,062)      (5,061)     (10,124)     (10,122)
                          ---------------------------------------------------

    Deficit, end of period    (17,233)     (19,479)     (17,233)     (19,479)
                          ---------------------------------------------------
                          ---------------------------------------------------

    Earnings per unit
    Basic                       0.335       (0.660)       0.487       (0.438)
                          ---------------------------------------------------
                          ---------------------------------------------------

    Diluted                     0.335       (0.660)       0.487       (0.438)
                          ---------------------------------------------------
                          ---------------------------------------------------

    Weighted average
     units
    Basic                  20,257,000   20,257,000   20,257,000   20,257,000
                          ---------------------------------------------------
                          ---------------------------------------------------

    Diluted                20,257,000   20,326,624   20,257,000   20,300,088
                          ---------------------------------------------------
                          ---------------------------------------------------



    AutoCanada Income Fund
    Interim Consolidated Statement of Cash Flows
    -------------------------------------------------------------------------

    (expressed in Canadian dollar thousands)

                                Three        Three          Six          Six
                               Months       Months       Months       Months
                                Ended        Ended        ended        ended
                              June 30,     June 30,     June 30,     June 30,
                                 2008         2007         2008         2007
                           (unaudited)  (unaudited)  (unaudited)  (unaudited)
                                    $            $            $            $
    Cash provided by
     (used in)

    Operating activities
    Net earnings for
     the period                 6,781      (13,362)       9,859       (8,879)
    Items not
     affecting cash
      Future income
       taxes (note 12)            273       19,107          883       19,107
      Unit-based
       compensation
       (note 9(d))                 43          135          102          320
      Amortization                758          770        1,529        1,560
      (Gain) loss on
       disposal of
       property &
       equipment                   20            5           14           10
                          ---------------------------------------------------

                                7,875        6,655       12,387       12,118
    Net change in non-cash
     working capital
     balances                   5,931       (4,287)       4,158       (1,221)
                          ---------------------------------------------------

                               13,806        2,368       16,545       10,897
                          ---------------------------------------------------

    Investing activities
    Business
     acquisitions (note 3)    (12,504)           -      (12,504)           -
    Investment in variable
     interest entity
     (note 4)                       -            -            -       (4,727)
    Purchase of property
     & equipment               (1,258)        (987)      (1,672)      (2,104)
    Purchase of
     other assets                 (12)           -          (12)           -
    Proceeds on sale of
     property & equipment           -           88           24           93
    Restricted cash             1,491          394        1,383          203
                          ---------------------------------------------------

                              (12,283)        (505)     (12,781)      (6,535)
                          ---------------------------------------------------

    Financing activities
    Proceeds from
     long-term debt             6,858          125        7,066        6,155
    Repayment of
     long-term debt              (132)         (95)        (222)        (150)
    Repayment of
     obligation under
     capital lease                (26)         (23)         (39)         (48)
    Distributions paid
     to Unitholders            (5,062)      (5,061)     (10,124)     (10,122)
                          ---------------------------------------------------

                                1,638       (5,054)      (3,319)      (4,165)
                          ---------------------------------------------------

    Increase (decrease)
     in cash                    3,161       (3,191)         445          197

    Cash and cash
     equivalents, beginning
     of period                 15,298       24,268       18,014       20,880
                          ---------------------------------------------------

    Cash and cash
     equivalents,
     end of period             18,459       21,077       18,459       21,077
                          ---------------------------------------------------
                          ---------------------------------------------------

    Supplementary
     information
      Cash interest paid        2,191        2,632        4,609        5,227
      Transfer of inventory
       to property &
       equipment                  447          253          803          918
      Transfer of property
       & equipment to
       inventory                  156          385          409        1,148
    






For further information:

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

Organization Profile

AUTOCANADA INCOME FUND

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