AUTOCANADA ANNOUNCES AMENDMENT TO SENIOR CREDIT FACILITY, IMPROVING FINANCIAL FLEXIBILITY DURING STRATEGIC RESTRUCTURING

EDMONTON, AB, Sept. 30, 2024 /CNW/ - AutoCanada Inc. ("AutoCanada" or the "Company") (TSX: ACQ) a leader in Canadian automotive retail, today announced an amendment to its senior credit facility that offers additional covenant headroom from September 30, 2024 to September 30, 2025 ("Covenant Relief Period"). This amendment provides the Company with enhanced financial flexibility to support its strategic restructuring plan over the next 12 months, focusing on cost reduction, portfolio optimization, and deleveraging.

In the second quarter of 2024, AutoCanada engaged Bain & Company ("Bain") to assist in the execution of key strategic initiatives. In collaboration with Bain, the Company will implement a series of operational improvements over the next year to streamline costs and enhance profitability. Additionally, the Company is conducting a strategic review of its non-core and underperforming assets. This review has already led to the sale of two non-core Stellantis dealerships in Alberta, the closure of seven unprofitable RightRide locations, and the repositioning of select remaining RightRide stores to an inventory-light model focused on providing credit solutions to customers with challenged credit.

The strategic review, together with the operational improvements led in partnership with Bain, are anticipated to enhance overall profitability, deleverage the balance sheet, and refine the Company's focus on its core operations.

The additional covenant headroom created by the covenant amendment allows the Company time to execute these critical initiatives without near-term financial constraints. The Company is committed to maintaining its liquidity and financial stability throughout this period.

Paul Antony, Executive Chairman, stated, "We appreciate the support of our lenders as we take proactive steps to position AutoCanada for long-term success. This amendment is an important milestone as we focus on driving operational efficiency, reducing expenses, and deleveraging to create value for our shareholders."

Financial Highlights

The Company received staged covenant relief of its Total Net Funded Debt to Bank EBITDA Ratio and Fixed Charge Coverage Ratio during the Covenant Relief Period as follows:

	Q3 2024	Q4 2024	Q1 2025	Q2 2025	Q3 2025	Q4 2025
Total Net Funded Debt to Bank EBITDA Ratio (From < 4.00x threshold to)	< 7.00x	< 7.50x	< 7.50x	< 5.50x	< 4.50x	< 4.00x
Fixed Charge Coverage Ratio (From > 1.20x threshold to)	> 1.00x	> 1.00x	> 1.00x	> 1.20x	> 1.20x	> 1.20x

The amendment also includes administrative changes to be in effect during the Covenant Relief Period.

About AutoCanada

AutoCanada is a leading North American multi-location automobile dealership group currently operating 83 franchised dealerships, comprised of 28 brands, in eight provinces in Canada as well as a group in Illinois, USA. AutoCanada currently sells Acura, Alfa Romeo, Audi, BMW, Buick, Cadillac, Chevrolet, Chrysler, Dodge, FIAT, Ford, GMC, Honda, Hyundai, Infiniti, Jeep, Kia, Lincoln, Mazda, Mercedes-Benz, MINI, Nissan, Porsche, Ram, Subaru, Toyota, Volkswagen, and Volvo branded vehicles. In addition, AutoCanada's Canadian Operations segment currently operates 11 stand-alone collision centres within our group of 27 collision centres. In 2023, the Company generated revenue in excess of $6 billion and our dealerships sold over 100,000 retail vehicles.

Additional Information

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

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 identified 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", "plan", "seek", "may", "intend", "likely", "will", "believe" and similar expressions) are not historical facts and are forward looking. In particular, this press release contains forward-looking statements with respect to, among other things, our strategic restructuring plan, portfolio optimization, cost reduction initiatives, deleveraging and operational improvements, and their impact on profitability and the Company's financial covenants.

AutoCanada cautions that the foregoing forward-looking statements are subject to assumptions, risks and uncertainties and our ability to mitigate and address those risks and uncertainties. The Company's Annual Information Form and other documents filed with securities regulatory authorities (accessible through the SEDAR website at www.sedarplus.ca) describe the risks, material assumptions and other factors that could influence actual results and which are incorporated herein by reference. The forward-looking statements contained in this press release speak only as of the date hereof and AutoCanada assumes no obligation to publicly update or revise them to reflect new events or circumstances, except as may be required pursuant to applicable securities laws.

SOURCE AutoCanada Inc.

For further information contact: Samuel Cochrane, Chief Financial Officer, Phone: [phone], Email: [email protected]