AutoCanada Income Fund releases financial results for the reporting period ended June 30, 2007



    A conference call to discuss second quarter results will be held on
    Tuesday, August 14, 2007 at 1:00 p.m. MDT, 3:00 p.m. EDT. To participate
    in the conference call, please dial 1-800-731-6941 or 416-644-3419
    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. 13 /CNW/ - AutoCanada Income Fund (the "Fund")
(TSX: ACQ.UN) today announced financial results for the three-month period
ended June 30, 2007. For information purposes, the Fund has also provided a
compilation of results for the year ended December 31, 2006, combining
financial results for the period from May 11, 2006 to December 31, 2006 with
selected unaudited results of operations of Canada One Auto Group ("CAG"), the
Fund's predecessor for the period from January 1, 2006 to May 10, 2006.
    In commenting on the results of the past quarter Patrick Priestner,
AutoCanada's founder and Chief Executive Officer commented that "We are
especially pleased with the increases in gross profit, both overall and on a
same-store basis, by each of our new vehicle, parts, service and collision,
and F & I businesses, all of which evidences the appropriateness of our
business model."
    Mr. Priestner further noted that "We remain convinced of the suitability
of our approach to growth, which is to secure the right brands in the right
markets, and to work very diligently at our manufacturer relationships, the
latter of which is very much at the heart of our success."

    
           ---------------------------------------------------------
                 Second Quarter 2007 Operating Highlights

                    -   Revenue increased by 16.3%
                    -   Gross profit increased by 25.7%
                    -   Same store revenue increased by 6.6%
                    -   Same store gross profit increased by 13.4%
                    -   EBITDA increased by 21.6%
           ---------------------------------------------------------

    Second Quarter 2007 Summary

    -   For the second quarter of 2007, the Fund generated distributable cash
        of $0.079 per unit, including changes in non-cash operating working
        capital amounts and $0.291 before changes in non-cash operating
        working capital balances, and declared distributions of $0.250 per
        unit, for a payout ratio of 315% including changes in non-cash
        working capital amounts and 86% before changes in non-cash working
        capital balances.

    -   Revenue from all dealerships increased by 16.3% to $214.7 million in
        the second quarter of 2007 from $184.7 million in the same quarter in
        2006.

    -   Gross profit from all dealerships increased by 25.7% to $36.8 million
        in the second quarter of 2007 from $29.3 million in the same quarter
        in 2006.

    -   Same store revenue and gross profit increased by 6.6% and 13.4%
        respectively in the second quarter of 2007, compared to the same
        quarter in 2006.

    -   EBITDA increased by 21.6% to $6.7 million in the second quarter of
        2007 from $5.5 million in the same quarter in 2006.

    -   The amendments to Canada's Income Tax Act related to publicly traded
        income trusts announced in October 2006 took effect on June 22, 2007.
        The consequence of changes to Canadian income tax legislation is that
        public income trusts will no longer be able to deduct distributions
        from taxable income (which transfers the tax burden to unitholders).
        Starting in 2011, public income trusts must pay income taxes of
        31.5%. Distributions will be taxed similar to dividends. As a result,
        as required by Canadian accounting policies, the Fund has recorded
        future income taxes of approximately $19.1 million related to the
        legislative amendments that will take effect in 2011 for the second
        quarter of 2007.

    -   Net loss of $13.4 million was incurred in the second quarter of 2007
        compared to a $4.8 million in net earnings in the same quarter in
        2006. The majority of this loss arose as a result of the Fund being
        required to recognize future income taxes as discussed above. Net
        earnings prior to the recognition of future income taxes during the
        second quarter of 2007 were $5.7 million compared to $4.8 million in
        net earnings in the same quarter of 2006.

    -   On April 30, 2007, AutoCanada Income Fund announced the intention to
        appoint Dennis DesRosiers to the Board of Trustees of the Fund
        effective May 9, 2007, thereby increasing the number of Trustees from
        three to four. Mr. DesRosiers is widely regarded as one of the
        foremost experts in the North American automotive industry. Since
        founding his consulting practice, DesRosiers Automotive Consultants,
        in 1985, Mr. DesRosiers has worked with the executives of the leading
        manufacturers and automotive supply chain companies as well as
        financial institutions and policy makers in government.

    -   AutoCanada also announced the appointment of Michael Ross to the
        Board of Directors of AutoCanada, effective April 4, 2007, replacing
        Mr. Jim Peters. Mr. Ross previously served as the Vice President of
        Cap Gemini Ernst & Young Canada Inc., as a partner of Ernst & Young,
        and presently serves as a board member for Norseman Group Ltd., and
        as a committee member for the Weatherhaven Corporation.

    -   On May 3, 2007, AutoCanada Income Fund announced that it had entered
        into a letter of intent with Mitsubishi Motor Sales of Canada Inc.
        whereby Mitsubishi awarded to the Fund an open point in Grande
        Prairie, Alberta. The dealership is operating out of temporary
        facilities until relocating to new facilities anticipated late 2007.

    -   The Northland Hyundai dealership in Prince George, British Columbia,
        relocated the first week of April, 2007 to a new dealership facility.
        The new dealership facility expanded the dealership from
        5,500 sq. ft. to 17,800 sq. ft. and increased the number of service
        bays from four to nine. The new dealership facility also includes a
        drive-thru, customer lounge and children's play centre amenities.

    -   The Victoria Hyundai dealership in Victoria, British Columbia
        substantially completed its renovations on April 27, 2007 to expand
        the dealership from approximately 6,000 sq. ft. to 18,296 sq. ft.,
        increase the number of service bays from eight to fourteen, and
        increase show room space for new and used vehicles from six to nine.
        The renovated facility also includes a customer lounge, used vehicle
        offices, and a second floor lunchroom and office.

    Highlights of Events Subsequent to June 30, 2007

    -   On July 13, 2007, the Fund announced that it intends to enter into a
        credit agreement with CAG to finance the opening of a Nissan
        Dealership Open Point by CAG and enter into a management agreement to
        provide it with management services. The Nissan Dealership Open Point
        will be located in Prince George, British Columbia on new premises to
        be built on land which has been secured and will carry on business
        under the name Northland Nissan to be owned and operated by a
        subsidiary of CAG which owns 46% of the Fund on a fully diluted
        basis. In connection with this arrangement, the Fund shall seek Board
        approval to grant consents to CAG and its subsidiary under the terms
        of the non-competition agreements entered into at the time of the
        Fund's IPO. It is anticipated that such approval shall be
        forthcoming.
        The Fund is in the process of finalizing the structure and related
        agreements with CAG to assess whether Northland Nissan will be a
        variable interest entity requiring the Fund to consolidate its
        results subsequent to July 13, 2007.
    

    Distributable Cash and Cash Distributions

    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 of the Fund for the
period of May 11, 2006 to June 30, 2007:

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

    May 31,        June 15,
     2006           2006          618     618     525    525   1,143   1,143
    June 30,       July 17,
     2006           2006          912     912     775    775   1,687   1,687
    July 31,       August 15,
     2006           2006          912     912     775    775   1,687   1,687
    August 31,     September 15,
     2006           2006          912     912     775    775   1,687   1,687
    September 30,  October 16,
     2006           2006          912     912     775    775   1,687   1,687
    October 31,    November 15,
     2006           2006          912     912     775    775   1,687   1,687
    November 30,   December 15,
     2006           2006          912     912     775    775   1,687   1,687
    December 31,   January 15,
     2006           2007          912     912     775    775   1,687   1,687
    January 31,    February 15,
     2007           2007          912     912     775    775   1,687   1,687
    February 28,   March 15,
     2007           2007          912     912     775    775   1,687   1,687
    March 31,      April 16,
     2007           2007          912     912     775    775   1,687   1,687
    April 30,      May 15,
     2007           2007          912     912     775    775   1,687   1,687
    May 31,        June 15,
     2007           2007          912     912     775    775   1,687   1,687
    June 29,       July 16,
     2007           2007          912             775          1,687
                              -----------------------------------------------

                               12,474  11,562  10,600  9,825  23,074  21,387
                              -----------------------------------------------
                              -----------------------------------------------

    Distributions are paid on Fund Units and Exchangeable Units. As of
June 30, 2007 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 $0.250 and $0.500 respectively per Fund Unit
and Exchangeable Unit to Unitholders. The distributions in the period ended
June 30, 2007 were funded from cash flow generated from operations. The Fund's
IPO prospectus contemplated an initial distribution of $0.0564 per unit for
the month of May, 2006 and thereafter monthly distributions of $0.0833 per
unit or $1 per year in aggregate. The Fund reviews its distribution policy on
a periodic basis.
    Distributable cash of the Fund is a measure generally used by Canadian
open-ended trusts as an indicator of financial performance. As one 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 distributable cash of the Fund is a useful supplemental measure
that may assist prospective investors in assessing an investment in the Fund.
Distributable Cash is calculated as cash flows from operating activities,
adjusted for changes in non-cash operating working capital balances for the
period, plus proceeds on sale of property and equipment, less purchases of
non-growth property and equipment.

    SELECTED FINANCIAL INFORMATION AND RESULTS FROM OPERATIONS

    The following table shows the unaudited results of: CAG for the
three-month period ended March 31, 2006, combined results of CAG and the Fund
for the three-month period ended June 30, 2006, results of the Fund for the
51-day period ended June 30, 2006, the three-month period ended September 30,
2006, the three-month period ended December 31, 2006, the audited results of
the Fund from May 11, 2006 to December 31, 2006, the unaudited results for the
three-month period ended March 31, 2007, and the three-month period ended
June 30, 2007. 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
      Operating Data and gross profit %)            &
                                         CAG       CAG    The Fund  The Fund
                                          Q1        Q2        Q2        Q3
                                         2006      2006      2006      2006
    Income Statement Data
    Revenue                            143,091   184,680   105,992   189,861
      New vehicles                      70,299   102,431    59,044   106,424
      Used vehicles                     47,772    53,546    30,487    53,897
      Parts, service & collision
       repair                           18,081    18,738    10,734    19,632
      Finance, insurance & other         6,939     9,965     5,727     9,908
    Gross profit                        24,100    29,265    17,775    30,818
      New vehicles                       5,392     6,782     4,190     6,792
      Used vehicle                       4,158     4,766     3,294     5,563
      Parts, service & collision
       repair                            7,930     8,712     5,014     8,721
      Finance, insurance & other         6,620     9,005     5,277     9,742
      Gross profit %                     16.8%     15.8%     16.8%     16.2%
    Sales, general & admin expenses     18,492    21,469    12,245    22,481
    Floorplan interest expense           1,683     2,153     1,256     1,854
    Other interest & bank charges          304        93        24       117
    Future income taxes                      -         -         -         -
    Net earnings(1)(5)                   3,097     4,761     3,631     5,220
    EBITDA(2)(5)                         4,160     5,547     4,249     6,366

    Operating Data
     Vehicles (new and used) sold        4,223     5,068     3,023     5,369
    New retail vehicles sold             1,736     2,465     1,515     2,741
    New fleet vehicles sold                440       372       211       371
    Used retail vehicles sold            2,047     2,231     1,297     2,257
    Number of service & collision
     repair orders completed            48,122    57,372    32,565    54,345
    Absorption rate(3)                     n/a       95%       n/a       97%
    No. of dealerships                      14        14        14        14
    No. of service bays at period end      223       223       223       223
    Same store revenue growth(4)           n/a        5%       n/a      3.8%
    Same store gross profit growth(4)      n/a       21%       n/a     12.5%

    Balance Sheet Data
    Cash and cash equivalents           10,926    20,271    20,271    20,265
    Accounts receivable                 28,417    25,875    25,875    30,562
    Inventories                        124,607   145,888   145,888   101,252
    Revolving floorplan facility       122,454   146,283   146,283   103,297


    (In thousands of dollars except
     Operating Data and gross profit %)
                                      The Fund  The Fund  The Fund  The Fund
                                          Q4                  Q1        Q2
                                         2006      2006      2007      2007
    Income Statement Data
    Revenue                            176,079   471,932   194,379   214,711
      New vehicles                      98,970   264,438   109,862   117,204
      Used vehicles                     46,425   130,809    53,020    62,389
      Parts, service & collision
       repair                           21,410    51,776    21,908    23,228
      Finance, insurance & other         9,274    24,909     9,590    11,890
    Gross profit                        28,930    77,523    31,292    36,777
      New vehicles                       6,998    17,980     7,000     8,312
      Used vehicle                       3,614    12,471     4,914     6,082
      Parts, service & collision
       repair                            9,514    23,249    10,223    11,305
      Finance, insurance & other         8,804    23,823     9,155    11,078
      Gross profit %                     16.4%     16.4%     16.1%     17.1%
    Sales, general & admin expenses     21,682    56,408    23,634    27,522
    Floorplan interest expense           2,085     5,195     2,069     2,414
    Other interest & bank charges          405       546       316       326
    Future income taxes                      -         -         -    19,107
    Net earnings(1)(5)                   3,623    12,474     4,483   (13,362)
    EBITDA(2)(5)                         4,906    15,521     5,424     6,743

    Operating Data
     Vehicles (new and used) sold        4,690    13,082     5,440     6,089
    New retail vehicles sold             2,199     6,455     2,295     2,866
    New fleet vehicles sold                525     1,107       886       535
    Used retail vehicles sold            1,966     5,520     2,259     2,688
    Number of service & collision
     repair orders completed            55,393   142,303    57,876    58,157
    Absorption rate(3)                     96%       94%       92%       94%
    No. of dealerships                      16        16        17        18
    No. of service bays at period end      245       245       250       256
    Same store revenue growth(4)         10.4%       n/a     24.1%      6.6%
    Same store gross profit growth(4)     6.3%       n/a     20.1%     13.4%

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

    (1) Net earnings for CAG from January 1, 2006 to May 10, 2006  are net
        earnings as defined by GAAP plus income taxes, stock-based
        compensation and shareholder bonuses (including the performance
        component related to dealership management's compensation) to be
        consistent with the results of the Fund from May 11, 2006 to
        December 31, 2006.
    (2) EBITDA has been calculated as described under "Non-GAAP Measures"
        above. EBITDA for CAG is defined under "Non-GAAP Measures" with the
        exception that to facilitate comparison to the Fund we have added
        stock-based compensation and shareholder bonuses (including the
        performance component related to dealership management's
        compensation) expensed by CAG.
    (3) Absorption has been calculated as described under "Non-GAAP Measures"
        above.
    (4) 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.
    (5) 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, 2007 on a same store basis by revenue source
for the nine dealerships that were owned and operated for all of 2006 and 2005
and compares these results to the results of these stores for the same period
in 2006.

    
             Same Store Gross Profit and Gross Profit Percentage

                                         For the Three Months Ended
                                         --------------------------
                                    Gross Profit           Gross Profit %

                             June 30, June 30,   %    June 30, June 30,   %
                                2007     2006 Change     2007     2006 Change
    (In thousands of
     dollars except % change
     and gross profit %)

    Revenue Source

    New vehicles               5,164    4,483   15.2%     7.2%    6.4%   0.7%

    Used vehicles              3,446    2,859   20.5%     8.9%    8.1%   0.8%

    Parts, service &
     collision repair          7,639    6,231   22.6%    49.2%   47.0%   2.2%

    Finance & insurance
     and other                 6,779    6,728    0.8%    94.9%   95.4% (0.5)%
                              ------   ------   -----    -----   ----- ------

    Total                     23,028   20,301   13.4%    17.2%   16.2%   1.0%
                              ------   ------   -----    -----   ----- ------
                              ------   ------   -----    -----   ----- ------


                                         For the Six Months Ended
                                         --------------------------
                                    Gross Profit           Gross Profit %

                             June 30, June 30,   %    June 30, June 30,
                                2007     2006 Change     2007     2006 Change
    (In thousands of
     dollars except % change
     and gross profit %)

    Revenue Source

    New vehicles               9,883    7,993   23.6%     6.8%    6.6%   0.2%

    Used vehicles              6,030    5,216   15.6%     8.5%    8.1%   0.4%

    Parts, service &
     collision repair         14,474   12,148   19.1%    47.6%   45.8%   1.8%

    Finance & insurance
     and other                13,115   11,516   13.9%    95.7%   95.7%   0.0%
                              ------   ------   -----    -----   ----- ------

    Total                     43,502   36,873   18.0%    16.8%   16.5%   0.3%
                              ------   ------   -----    -----   ----- ------
                              ------   ------   -----    -----   ----- ------
    

    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 operates or manages 18 franchised automobile
dealerships in six provinces and has over 940 employees. It currently sells
various new vehicle brands, including Chrysler, Dodge, Jeep(R), Hyundai,
Mitsubishi, Subaru, and, through a managed dealership, Nissan. In 2006, its
franchised automobile dealerships sold approximately 19,350 vehicles and
processed approximately 215,000 service and collision repair orders in 245
service bays, generating revenue of approximately $694 million.

    Forward Looking Statements

    Certain statements in management's discussion and analysis may constitute
"forward looking" statements that involve known and unknown risks,
uncertainties and other factors that may cause our actual results, performance
or achievements or industry results to be materially different from any future
results, performance or achievements expressed or implied by such forward
looking statements. These statements relate to future events or future
performance and reflect the expectations of management regarding growth,
results of operations, performance and business prospects and opportunities.
Such forward looking statements reflect current beliefs of management or of
the third parties to which they are attributed and are based on information
currently available to the Fund. In some cases, the statements use such words
as "may", "will", "intend", "should", "expect", "believe", "plan",
"anticipate", "estimate", "predict", "potential", "continue" or the negative
of these terms or other similar terminology. These statements reflect current
expectations regarding future events and operating performance and speak only
as of the date of management's discussion and analysis, or in the case of
third party statements as of the date on which they were made. Forward looking
statements involve significant risks and uncertainties, should not be read as
guarantees of future performance or results, and will not necessarily be
accurate indications of whether or not such results will be achieved. A number
of factors could cause actual results to differ materially from the results
discussed in the forward looking statements, including, but not limited to,
the factors discussed under ''Risk Factors'' in the Fund's prospectus which
can be found at www.sedar.com. Although the forward looking statements are
based upon what management believes are reasonable assumptions, the Fund
cannot assure you that actual results will be consistent with these forward
looking statements. These forward looking statements are made as of the date
of management's discussion and analysis and, except as required by applicable
law, the Fund assumes no obligation to update or revise them to reflect new
events or circumstances.

    Non-GAAP Measures

    References to "EBITDA" are to earnings before interest expense (other
than interest expense on floorplan financing), income taxes, depreciation and
amortization and references to "distributable cash" are to cash available for
distribution to Unitholders' in accordance with the distribution policies of
the Fund. 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. Distributable cash of the Fund is a measure
generally used by Canadian open-ended trusts as an indicator of financial
performance. As one 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 distributable cash of the Fund is
a useful supplemental measure that may assist prospective investors in
assessing an investment in the Fund. The Fund calculates Distributable Cash as
cash flows from operating activities, adjusted for changes in non-cash
operating working capital balances for the period, plus proceeds on sale of
property and equipment, less purchases of non-growth property and equipment.
    EBITDA and distributable cash are not earnings measures recognized by
GAAP and do not have standardized meanings prescribed by GAAP. Investors are
cautioned that EBITDA and distributable cash 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 and distributable cash may differ from the methods used
by other issuers. Therefore, the Fund's EBITDA and distributable cash may not
be comparable to similar measures presented by other issuers.
    References to "absorption rate" are to the ratio of gross profits of a
franchised automobile dealership from parts, service and collision repair to
the fixed operating costs of the dealership. 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 and
do not include expenses pertaining to head office.  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, our Annual Information Form dated March 22,
2007, and www.sedar.com.


    
    AutoCanada Income Fund
    Interim Consolidated Balance Sheet
    -------------------------------------------------------------------------
    (expressed in Canadian dollar thousands)

                                                        June 30, December 31,
                                                           2007         2006
                                                     (Unaudited)
    ASSETS                                                    $            $

    Current assets
    Cash and cash equivalents                            21,077       20,880
    Restricted cash                                       3,273        3,476
    Accounts receivable                                  35,980       27,742
    Inventories (note 5)                                132,814      112,680
    Due from vendors                                          -        2,640
    Prepaid expenses                                      1,865        1,419
                                                       ---------    ---------
                                                        195,009      168,837

    Property and equipment                               12,134       11,839
    Intangible assets                                    79,956       79,034
    Goodwill                                             82,501       78,744
    Other assets                                             78           78
                                                       ---------    ---------
                                                        369,678      338,532
                                                       ---------    ---------
                                                       ---------    ---------

    LIABILITIES

    Current liabilities
    Accounts payable and accrued liabilities             26,776       23,521
    Revolving floorplan facility (note 6)               133,731      113,357
    Distributions payable (note 10)                       1,687        1,687
    Due to related parties                                1,070            -
    Current portion of long-term debt (note 7)              198           96
    Current portion of obligation under capital lease        78           72
                                                       ---------    ---------

                                                        163,540      138,733

    Long-term debt (note 7)                              11,438        5,535
    Obligation under capital lease                          250          240
    Future income taxes                                  19,107            -
                                                       ---------    ---------

                                                        194,335      144,508
                                                       ---------    ---------

    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))                         775          455
    Accumulated other comprehensive income                    -            -
    Accumulated deficit                                 (19,479)        (478)
                                                       ---------    ---------

                                                        175,343      194,024
                                                       ---------    ---------

                                                        369,678      338,532
                                                       ---------    ---------
                                                       ---------    ---------



    AutoCanada Income Fund
    Interim Consolidated Statement of Operations, Comprehensive Income
    and Accumulated Earnings (Deficit)
    -------------------------------------------------------------------------
    (expressed in Canadian dollar thousands
     except unit and per unit amounts)

                                           Three   Period from           Six
                                    Months Ended  May 11, 2006  Months ended
                                         June 30,   to June 30,      June 30,
                                            2007          2006          2007
                                      (unaudited)   (unaudited)   (unaudited)

                                               $             $             $

    Revenue
    Vehicles                             190,824        94,897       362,755
    Parts, service and
     collision repair                     23,228        10,734        45,136
    Other                                    659           361         1,199
                                      ---------------------------------------

                                         214,711       105,992       409,090
    Cost of sales                        177,934        88,217       341,021
                                      ---------------------------------------

    Gross profit                          36,777        17,775        68,069
                                      ---------------------------------------

    Expenses
    Selling, general and
     administrative                       27,522        12,246        51,156
    Interest                               2,740         1,280         5,125
    Amortization                             770           618         1,560
                                      ---------------------------------------

                                          31,032        14,144        57,841
                                      ---------------------------------------

    Net earnings before income taxes       5,745         3,631        10,228

    Future income taxes (note 12)         19,107             -        19,107
                                      ---------------------------------------

    Net earnings (loss) &
     comprehensive income for the
     period (note 2(b))                  (13,362)        3,631        (8,879)

    Accumulated deficit,
     beginning of period                  (1,056)            -          (478)
    Distributions declared (note 10)      (5,061)       (2,830)      (10,122)
                                      ---------------------------------------

    Accumulated earnings (deficit),
     end of period                       (19,479)          801       (19,479)
                                      ---------------------------------------
                                      ---------------------------------------

    Earnings (loss) per unit
    Basic                                 (0.660)        0.179        (0.438)
                                      ---------------------------------------
                                      ---------------------------------------

    Diluted                               (0.657)        0.179        (0.437)
                                      ---------------------------------------
                                      ---------------------------------------

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

    Diluted                           20,326,624    20,308,314    20,300,088
                                      ---------------------------------------
                                      ---------------------------------------



    AutoCanada Income Fund
    Interim Consolidated Statement of Cash Flows
    -------------------------------------------------------------------------
    (expressed in Canadian dollar thousands)

                                           Three   Period from           Six
                                    Months Ended  May 11, 2006  Months ended
                                         June 30,   to June 30,      June 30,
                                            2007          2006          2007
                                      (unaudited)   (unaudited)   (unaudited)

                                               $             $             $
    Cash provided by (used in)

    Operating activities
    Net earnings (loss) for the
     period                              (13,362)        3,631        (8,879)
    Items not affecting cash
      Future income taxes (note 12)       19,107             -        19,107
      Unit-based compensation (note 9(d))    135           104           320
      Amortization                           770           618         1,560
      Gain (loss) on disposal of
       property and equipment                  5            (5)           10
                                      ---------------------------------------

                                           6,655         4,348        12,118
    Net change in non-cash operating
     working capital balances             (4,287)       12,606        (1,221)
                                      ---------------------------------------

                                           2,368        16,954        10,897
                                      ---------------------------------------

    Investing activities
    Business acquisitions (note 3)             -       (88,647)            -
    Investment in variable interest
     entity (note 4)                           -             -        (4,727)
    Purchase of property and equipment      (987)         (123)       (2,104)
    Proceeds on sale of property and
     equipment                                88            12            93
    Restricted cash                          394          (344)          203
                                      ---------------------------------------

                                            (505)      (89,102)       (6,535)
                                      ---------------------------------------

    Financing activities
    Net proceeds from issuance of
     units (note 3)                            -        93,572             -
    Proceeds from long-term debt             125             -         6,155
    Repayment of long-term debt              (95)            -          (150)
    Repayment of obligation under
     capital lease                           (23)          (10)          (48)
    Distributions paid to Unitholders     (5,061)       (1,143)      (10,122)
                                      ---------------------------------------

                                          (5,054)       92,419        (4,165)
                                      ---------------------------------------

    Increase (decrease) in cash           (3,191)       20,271           197

    Cash and cash equivalents,
     beginning of period                  24,268             -        20,880
                                      ---------------------------------------

    Cash and cash equivalents,
     end of period                        21,077        20,271        21,077
                                      ---------------------------------------
                                      ---------------------------------------

    Supplementary information
      Cash interest paid                   2,632         1,141         5,227
      Transfer of inventory to
       property and equipment                253           310           918
      Transfer of property and
       equipment to inventory                385           233         1,148
    





For further information:

For further information: ontact: 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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