AUTOCANADA REPORTS SECOND QUARTER 2026 RESULTS AND ADVANCES STRATEGIC INITIATIVES

Dealership operational stabilization initiatives advancing under the newly completed leadership team

Second Quarter 2026 Financial Highlights

• Revenue from continuing operations was $1.42 billion as compared to $1.34 billion in the prior year
• Gross profit of $207.1 million, compared to $225.4 million in the prior year
• Gross profit percentage² of 14.6%, compared to 16.8% in the prior year
• Net income from continuing operations of $12.1 million, compared to net income of $18.9 million in the prior year
• Diluted net income per share from continuing operations of $0.46, compared to diluted net income per share of $0.72 in the prior year
• Adjusted EBITDA¹ from continuing operations of $52.1 million, compared to $64.4 million in the prior year
• Adjusted EBITDA margin¹ of 3.7%, compared to 4.8% in the prior year
• Operating expenses before depreciation² decreased (2.7)% year-over-year to $152.9 million
• Total Net Funded Debt to Bank EBITDA Ratio² of 3.62x at June 30, 2026
• Cash and available revolving credit capacity totaled approximately $400.7 million at quarter-end

Outlook Highlights

• Canadian automotive demand remained soft into the early part of the second quarter amid macroeconomic uncertainty
• The complete leadership team was finalized in July with the hiring of our CFO. We expect this to contribute to stabilization in dealership operations already seen since the transition began in February
• Collision operations continued to demonstrate resilient demand and margin characteristics
• With approximately $106 million in gross proceeds, excluding working capital, received to date, the Company is on track to realize proceeds within the previously disclosed range of $115 million to $130 million.

^1	See "NON-GAAP AND OTHER FINANCIAL MEASURES" below.
^2	This press release contains "SUPPLEMENTARY FINANCIAL MEASURES" and "FINANCIAL COVENANTS". Section 13. NON-GAAP AND OTHER FINANCIAL MEASURES and Section 6. LIQUIDITY AND CAPITAL RESOURCES of the Company's Management's Discussion & Analysis for the three and six-month periods ended June 30, 2026 ("MD&A") is hereby incorporated by reference for further information regarding the composition of these measures and financial covenants (accessible through the SEDAR website at www.sedarplus.ca).
^3	Source: WardsAuto data regarding New Light Vehicle sales.

EDMONTON, AB, Aug. 12, 2026 /CNW/ -- AutoCanada Inc. ("AutoCanada" or the "Company") (TSX: ACQ), a multi-location North American automobile dealership group, today reported its financial results for the three-month period ended June 30, 2026.

"We entered 2026 focused on stabilizing dealership performance, improving operational execution, and strengthening our balance sheet, and we made meaningful progress against those priorities during the quarter," said Samuel Cochrane, Chief Executive Officer of AutoCanada.

"While industry demand remained soft and profitability was impacted by expected pressure in used vehicle margins, we are encouraged by improving trends in used vehicle sales productivity, used vehicle profit per retail unit, operational efficiencies achieved through organizational changes implemented during the quarter, and the continued resilience of our collision platform.

We also advanced several important strategic initiatives, including progress on the divestiture of our U.S. dealership portfolio, expansion of our collision operations, and the successful amendment and extension of our syndicated credit facility. We believe these actions position the Company to reduce leverage and create a stronger operational foundation as we move through 2026."

OUTLOOK

Dealership Outlook

Canadian new light vehicle demand remained subdued during the second quarter of 2026. Industry sales³ declined approximately 2% year-over-year during the quarter, with sales decreasing 6.0% in April and 1.7% in May before returning to modest growth of 1.9% in June. For the first six months of 2026, Canadian new light vehicle sales were approximately 2.6% below the prior year.

Management expects industry demand to remain muted through the balance of 2026 as elevated vehicle pricing, financing costs, and broader economic uncertainty continue to affect consumer affordability and purchasing decisions. Full-year Canadian industry sales are currently expected to be approximately 1.9 million units, or down approximately 4% versus 2025.

Against this backdrop, the Company continued to advance its dealership operating plan during the second quarter. Management remains focused on strengthening operating discipline, improving accountability, rebuilding sales productivity and establishing more consistent execution across the dealership network. Although progress was made during the quarter, the Company continues to view 2026 as a transition year and expects that sustained execution will be required to restore dealership performance to levels more consistent with industry benchmarks.

Second-quarter results reflected early progress in certain areas, including higher used vehicle volumes, improved inventory turnover and increased finance and insurance gross profit per retail unit. Used retail vehicle sales² increased 10.0% year-over-year during the quarter, while used vehicle inventory days of supply declined to 54 days from 63 days in the prior-year period. However, used vehicle profitability remained below historical levels as the Company continued to work through aged inventory.

New retail vehicle volumes² remained under pressure, declining 8.0% year-over-year during the quarter, reflecting softer industry demand and the ongoing rebuilding of sales productivity. New vehicle gross profit per retail unit declined modestly, while new vehicle inventory days of supply increased to 79 days from 76 days.

Parts and service performance also remained below the prior year, reflecting lower service repair order volumes and higher labour and material costs. Management continues to view improving parts and service operations as a significant opportunity and is focused on increasing technician and service advisor productivity, service bay utilization, customer retention and parts and service absorption.

Management's priorities for dealership operations during the balance of 2026 include:

• Improving new and used vehicle sales productivity and conversion;
• Restoring used vehicle gross profit per unit while maintaining inventory discipline;
• Improving used vehicle sourcing, inventory turns and wholesale performance;
• Increasing fixed operations productivity, service bay utilization and customer retention;
• Strengthening finance and insurance execution and consistency;
• Maintaining operating expense discipline while preserving appropriate frontline capacity;
• Improving working capital efficiency; and
• Continuing to embed standardized operating practices, training, accountability and performance management across the dealership network.

Management believes these initiatives are establishing a clearer path toward improved profitability and more consistent execution. However, the timing and pace of recovery will depend on continued operational progress and broader industry conditions. The Company believes the operational initiatives implemented during the first half of the year have established a stronger foundation for improved financial performance, with continued progress expected as sales productivity, fixed operations, used vehicle performance and cost discipline continue to improve.

Collision Outlook

Collision operations continue to represent an important long-term growth platform for the Company, supported by insurance-related demand, attractive margin characteristics and consolidation opportunities within a highly fragmented Canadian market.

During the second quarter, Collision revenue decreased 5.3% year-over-year, primarily reflecting the normalization of paintless dent repair activity following the significant hail event that benefited the prior-year period. Gross profit increased 7.1%, and gross profit percentage² increased to 48.7% from 43.1%, reflecting contributions from acquired traditional collision businesses and a more favourable mix relative to lower-margin paintless dent repair activity.

The Company continued to advance its collision growth strategy during the quarter through the acquisitions of Contemporary Coachworks in Calgary, Alberta, Mascarin Collision Centre in Thunder Bay, Ontario, and ACX Stratford in Stratford, Ontario. These acquisitions expanded the Company's geographic presence, increased regional density, and added repair capacity and capabilities within key markets.

Management remains focused on integrating recently acquired locations and improving performance across the broader platform. Key operational priorities include:

• Expanding OEM certifications and insurance direct repair program relationships;
• Increasing referral volumes from insurers, OEMs and the Company's dealership network;
• Advancing a standardized national operating model;
• Expanding apprenticeship and technician-development programs;
• Increasing capacity utilization and operational throughput;
• Expanding higher-value services, including diagnostics, calibrations, and coatings;
• Strengthening procurement and vendor relationships; and
• Continuing the rollout of the ACX national brand and B2B strategy.

The Company intends to continue pursuing disciplined collision growth opportunities that enhance regional density, expand capabilities and support long-term margin and cash flow growth. The pace of acquisition activity will remain subject to balance sheet capacity, the availability of attractive opportunities and the Company's ability to integrate acquired businesses effectively.

U.S. Dealership Divestiture Update

The Company continues to make meaningful progress on the divestiture of its U.S. dealership portfolio. With approximately $106 million in gross proceeds, excluding working capital, received to date, the Company is on track to realize proceeds within the previously disclosed range of $115 million to $130 million. The Company has entered into a definitive agreement for the remaining 9 dealerships (2 individual storefronts). The Company expects additional proceeds from related land dispositions, previously identified as held for sale, of up to $19 million.

Proceeds from these transactions are expected to be directed toward debt reduction and to reinforce the Company's strategic focus on its core Canadian dealership and collision operations. All transactions remain subject to customary closing conditions, including OEM approvals. Upon completion, the divestiture program is expected to enhance financial flexibility, strengthen the balance sheet, and accelerate progress toward the Company's target leverage range of 2.0x to 3.0x Total Net Funded Debt to Bank EBITDA.

^1	See "NON-GAAP AND OTHER FINANCIAL MEASURES" below.
^2	This press release contains "SUPPLEMENTARY FINANCIAL MEASURES" and "FINANCIAL COVENANTS". Section 13. NON-GAAP AND OTHER FINANCIAL MEASURES and Section 6. LIQUIDITY AND CAPITAL RESOURCES of the Company's Management's Discussion & Analysis for the three and six-month periods ended June 30, 2026 ("MD&A") is hereby incorporated by reference for further information regarding the composition of these measures and financial covenants (accessible through the SEDAR website at www.sedarplus.ca).
^3	Source: WardsAuto data regarding New Light Vehicle sales.

Second Quarter Key Highlights and Recent Developments

	Three-Months Ended June 30
Continuing Operations Financial Results	2026 $	2025 $	Change %
Revenue	1,418,434	1,338,199	6.0 %
Same store revenue	1,412,383	1,338,150	5.5 %
Gross profit	207,054	225,367	(8.1) %
Gross profit percentage ^2	14.6 %	16.8 %	(2.2) ppts
Operating expenses ("Opex")	166,260	170,737	(2.6) %
Net income	12,088	18,911	(36.1) %
Basic net income per share attributable to AutoCanada shareholders	0.49	0.75	(34.7) %
Diluted net income per share attributable to AutoCanada shareholders	0.46	0.72	(36.1) %
Adjusted EBITDA ^1	52,149	64,380	(19.0) %
Adjusted EBITDA margin ^1	3.7 %	4.8 %	(1.1) ppts
New retail vehicles sold (units) ^2	8,091	8,790	(8.0) %
Used retail vehicles sold (units) ^2	11,499	10,452	10.0 %
New vehicle gross profit per retail unit ^2	4,461	4,544	(1.8) %
Used vehicle gross profit per retail unit ^2	587	1,774	(66.9) %
Parts and service ("P&S") gross profit	74,032	78,902	(6.2) %
Collision repair ("Collision") gross profit	17,730	16,561	7.1 %
Finance, insurance and other ("F&I") gross profit per retail unit average ^2	3,410	3,337	2.2 %
Operating expenses before depreciation ^2	152,931	157,094	(2.7) %
Operating expenses before depreciation as a % of gross profit ^2	73.9 %	69.7 %	4.2 ppts
Normalized opex before depreciation ^1	147,707	147,478	0.2 %
Normalized opex before depreciation as a percentage of gross profit (%) ^1	71.3 %	65.4 %	5.9 ppts
Floorplan financing expense	9,275	9,018	2.8 %

Revenue increased by 6.0% in the second quarter of 2026 compared to the second quarter of 2025, primarily due to increases in new vehicle sales, used vehicle sales and F&I. This was partially offset by decreases in parts and service and collision repair services.

Gross profit decreased by (8.1)% to $207.1 million in the second quarter of 2026 compared to the second quarter of 2025, driven by decreases in new vehicle, used vehicle, and parts and service gross profits. This decline was partially offset by increases in gross profit from collision repair services and F&I.

Operating expenses before depreciation² decreased by (2.7)% to $152.9 million in the second quarter of 2026 compared to the second quarter of 2025. Normalized operating expenses before depreciation¹ increased by 0.2% to $147.7 million, and included the normalization of $2.9 million of restructuring related charges.

Floorplan financing expenses increased by 2.8% to $9.3 million  driven by higher new and used vehicle inventory balances. Interest on long-term indebtedness increased due to an increase in mortgage financing costs and change in the allocation methodology as a result of the divestiture of the U.S. dealerships

Net income for the period decreased by (36.1)% to a net income of $12.1 million in the second quarter of 2026 compared to $18.9 million in the second quarter of 2025, as a result of lower gross profits and higher finance costs, partially offset by lower operating expenses, lower impairment of assets, higher gain on redemption of liability, higher/(lower) unrealized FX gains/(losses) and lower income tax expenses.

Adjusted EBITDA¹ decreased by (19.0)% to $52.1 million in the second quarter of 2026 compared to the second quarter of 2025, primarily driven by a decline in gross profit and higher finance costs, partially offset by lower operating expenses before depreciation². Adjusted EBITDA margin¹ decreased by (1.1) percentage points ("ppts") to 3.7% for the reasons noted above.

^1	See "NON-GAAP AND OTHER FINANCIAL MEASURES" below.
^2	This press release contains "SUPPLEMENTARY FINANCIAL MEASURES" and "FINANCIAL COVENANTS". Section 13. NON-GAAP AND OTHER FINANCIAL MEASURES and Section 6. LIQUIDITY AND CAPITAL RESOURCES of the Company's Management's Discussion & Analysis for the three and six-month periods ended June 30, 2026 ("MD&A") is hereby incorporated by reference for further information regarding the composition of these measures and financial covenants (accessible through the SEDAR website at www.sedarplus.ca).
^3	Source: WardsAuto data regarding New Light Vehicle sales.

Collision Operations Highlights

	Three-Months Ended June 30
Collision Financial Results	2026 $	2025 $	Change %
Revenue	36,376	38,420	(5.3) %
Gross profit	17,730	16,561	7.1 %
Gross profit percentage^2	48.7 %	43.1 %	5.6 ppts
Adjusted EBITDA^1	3,713	3,737	(0.6) %
Same store revenue^2	30,325	38,420	(21.1) %
Same store gross profit^2	15,302	16,561	(7.6) %
Same store gross profit percentage^2	50.5 %	43.1 %	7.4 ppts

Revenue decreased due to lower volumes from paintless dent repair ("PDR") business driven by low hailstorm activity. This was partially offset by revenue from newly acquired collision centres and expanded core collision capacity.

Gross profit increased driven by contributions from collision centre acquisitions and new construction capacity in core collision, which helped absorb the losses in PDR earnings.   

Gross profit percentage² increased as sales shifted toward higher-margin core collision work and away from lower-margin PDR business.

Trends in the same store revenue² and gross profit percentage² are consistent with overall business performance, with the reasons noted above. Same store gross profit² decreased driven by the decrease in PDR revenue.

Automatic share purchase plan

In connection with its previously announced normal course issuer bid ("NCIB") to purchase up to 1,177,539 common shares, AutoCanada has entered into an automatic share purchase plan ("ASPP") with its designated broker. The ASPP has been pre-cleared by the TSX and will terminate on December 17, 2026, unless earlier terminated in accordance with its terms.

The ASPP is intended to allow for purchases of its common shares during certain pre-determined black-out periods, subject to certain parameters as to price and number of shares. Outside of these pre-determined black-out periods, shares will be repurchased in accordance with management's discretion, subject to applicable law.

AutoCanada's NCIB commenced on December 18, 2025 and will continue until December 17, 2026, when the bid expires, or such earlier date as the Corporation completes its purchases pursuant to the notice of intention filed with the TSX. All purchases of common shares made under the ASPP will be included in determining the number of common shares purchased under the NCIB. Any common shares purchased by the Corporation pursuant to the NCIB will be cancelled.

Other Recent Developments

During the quarter:

• On April 9, 2026, the Company sold substantially all of the operating assets of Hyundai of Lincolnwood, located in Lincolnwood, Illinois, for cash consideration of $3.1 million plus closing adjustments. Hyundai of Lincolnwood was previously presented as held for sale in the Dealership Operations segment.
• On April 22, 2026, the Company amended and restated its syndicated credit agreement. The amended credit facility decreased the wholesale inventory floorplan facility to $1,000 million for total aggregate bank facilities of $1,380 million. The amendment includes the removal of the borrowing base and goodwill-based revolving credit structure, increased the Company's maximum permitted Total Net Funded Debt to Bank EBITDA Ratio to 5.00, increased the Company's maximum permitted Senior Net Funded Debt to Bank EBITDA Ratio to 3.50, includes changes to the definition of Bank EBITDA to expand allowable add-backs, other administrative changes, and the term was extended to November 22, 2028.
• On May 7, 2026, the Company announced the appointment of Mike Woodward as Chief Financial Officer, effective July 6, 2026.
• On May 13, 2026, in connection with its previously announced normal course issuer bid ("NCIB") to purchase up to 1,177,539 common shares, the Company received approval from the TSX to implement an automatic share purchase plan ("ASPP") with its designated broker. The ASPP will terminate on December 17, 2026, unless earlier terminated in accordance with its terms.
• On June 1, 2026, the Company completed the acquisition of Contemporary Coachworks, a two-location collision repair facility located in Calgary, Alberta, which is included within the Collision Operations segment.
• On June 9, 2026, the Company completed the acquisition of Mascarin Collision Centre, a single-location collision repair facility located in Thunder Bay, Ontario, which is included within the Collision Operations segment.
• On June 22, 2026, the Company sold substantially all of the operating assets of Toyota of Lincolnwood, located in Lincolnwood, Illinois, for cash consideration of $42.4 million plus closing adjustments. Toyota of Lincolnwood was previously presented as held for sale in the Dealership Operations segment.
• On June 29, 2026, the Company completed the acquisition of a collision repair business in Stratford, Ontario. The business, formerly operating as Fix Auto Stratford, now operates as ACX Stratford, which is included within the Collision Operations segment.

After the quarter:

• On July 14, 2026, the Company sold substantially all of the operating assets of Island Chevrolet Buick GMC in Duncan, British Columbia, Abbotsford Volkswagen in Abbotsford, British Columbia, and Chilliwack Volkswagen in Chilliwack, British Columbia, including a property associated with Chilliwack Volkswagen in Chilliwack, British Columbia, for cash consideration of $49.2 million plus closing adjustments.

^1	See "NON-GAAP AND OTHER FINANCIAL MEASURES" below.
^2	This press release contains "SUPPLEMENTARY FINANCIAL MEASURES" and "FINANCIAL COVENANTS". Section 13. NON-GAAP AND OTHER FINANCIAL MEASURES and Section 6. LIQUIDITY AND CAPITAL RESOURCES of the Company's Management's Discussion & Analysis for the three and six-month periods ended June 30, 2026 ("MD&A") is hereby incorporated by reference for further information regarding the composition of these measures and financial covenants (accessible through the SEDAR website at www.sedarplus.ca).
^3	Source: WardsAuto data regarding New Light Vehicle sales.

Conference Call

A conference call to discuss the results for the three months ended June 30, 2026 will be held on August 12, 2026 at 4:00 pm Mountain (6:00 pm Eastern). To participate in the conference call, please dial 1-888-510-2154 approximately 10 minutes prior to the call.

This conference call will also be webcast live over the internet and can be accessed by all interested parties at the following URL: https://investors.autocan.ca/2026-q2-conference-call/ 

MD&A and Financial Statements

Information included in this press release is a summary of results. It should be read in conjunction with AutoCanada's Consolidated Financial Statements and Management's Discussion and Analysis ("MD&A") for the three and six-month periods ended June 30, 2026, which can be found on the Company's website at investors.autocan.ca or on www.sedarplus.ca.

All comparisons presented in this press release are between the three-month period ended June 30, 2026 and the three-month period ended June 30, 2025, unless otherwise indicated. Results are reported in Canadian dollars and have been rounded to the nearest thousand dollars, unless otherwise stated.

Condensed Interim Consolidated Statements of Comprehensive Income
(Unaudited)
(in thousands of Canadian dollars except for share and per share amounts)

	Three-month period ended		Six-month period ended
	June 30, 2026 $	June 30, 2025 Revised ^(1) $	June 30, 2026 $	June 30, 2025 Revised^(1) $
Continuing operations
Revenue (Note 6)	1,418,434	1,338,199	2,607,389	2,578,299
Cost of sales (Note 7)	(1,211,380)	(1,112,832)	(2,231,253)	(2,154,896)
Gross profit	207,054	225,367	376,136	423,403
Operating expenses (Note 8)	(166,260)	(170,737)	(317,990)	(345,613)
Operating profit before other income and expenses	40,794	54,630	58,146	77,790
Lease and other income, net	1,946	1,744	2,894	3,893
Gain on disposal of assets, net	30	862	1,006	13,915
Impairment recovery (losses) on trade and other receivables	262	(184)	217	(1,306)
Impairment of non-financial assets	--	(2,380)	--	(2,380)
Operating profit	43,032	54,672	62,263	91,912
Finance costs (Note 9)	(28,434)	(24,239)	(53,584)	(53,788)
Finance income (Note 9)	436	296	720	732
Gain (loss) on redemption liabilities	1,078	(1,183)	1,853	1,141
Other losses, net	(76)	(2,338)	(43)	(1,264)
Income for the period before taxation from continuing operations	16,036	27,208	11,209	38,733
Income tax expense (Note 10)	3,948	8,297	2,420	10,115
Net income for the period from continuing operations	12,088	18,911	8,789	28,618
Net income (loss) for the period from discontinued operations (Note 15)	12,308	(32)	20,691	(12,891)
Net income for the period	24,396	18,879	29,480	15,727
Other comprehensive income (loss)
Items that may be reclassified to profit or loss
Foreign operations currency translation	2,087	(7,168)	3,748	(6,862)
Income tax relating to these items (Note 10)	--	(1,226)	--	(1,226)
Other comprehensive income (loss) for the period	2,087	(8,394)	3,748	(8,088)
Comprehensive income for the period	26,483	10,485	33,228	7,639
Net income for the period attributable to:
AutoCanada shareholders	23,542	17,357	28,421	13,533
Non-controlling interests	854	1,522	1,059	2,194
	24,396	18,879	29,480	15,727
Net income for the period attributable to AutoCanada shareholders arises from:
Continuing operations	11,234	17,389	7,730	26,424
Discontinued operations (Note 15)	12,308	(32)	20,691	(12,891)
	23,542	17,357	28,421	13,533
Comprehensive income for the period attributable to:
AutoCanada shareholders	25,629	8,963	32,169	5,445
Non-controlling interests	854	1,522	1,059	2,194
	26,483	10,485	33,228	7,639

Condensed Interim Consolidated Statements of Comprehensive Income (continued)
(Unaudited)
(in thousands of Canadian dollars except for share and per share amounts)

	Three-month period ended		Six-month period ended
	June 30, 2026 $	June 30, 2025 Revised ^(1) $	June 30, 2026 $	June 30, 2025 Revised^(1) $
Comprehensive income (loss) for the period    attributable to AutoCanada shareholders arises from:
Continuing operations	11,234	17,389	7,730	26,424
Discontinued operations (Note 15)	14,395	(8,426)	24,439	(20,979)
	25,629	8,963	32,169	5,445
Net income (loss) per share attributable to    AutoCanada shareholders:
Basic from continuing operations	0.49	0.75	0.34	1.14
Basic from discontinued operations	0.53	--	0.90	(0.56)
Basic	1.02	0.75	1.24	0.58
Diluted from continuing operations	0.46	0.72	0.32	1.09
Diluted from discontinued operations	0.51	--	0.85	(0.53)
Diluted	0.97	0.72	1.17	0.56
Weighted average shares
Basic (Note 22)	23,068,316	23,145,912	23,042,635	23,143,813
Diluted (Note 22)	24,321,652	24,208,467	24,309,356	24,177,599

1	The presentation of comprehensive income (loss) for the period attributable to AutoCanada shareholders arising from continuing operations and discontinued operations has been revised. The revision had no effect on the reported results of operations.
The accompanying notes are an integral part of these condensed interim consolidated financial statements and can be found on the Company's website at investors.autocan.ca or on www.sedarplus.ca.

Condensed Interim Consolidated Statements of Financial Position
(in thousands of Canadian dollars)

	June 30, 2026 (Unaudited) $	December 31, 2025 $
ASSETS
Current assets
Cash	142,250	87,963
Trade and other receivables (Note 12)	185,365	133,164
Inventories (Note 13)	879,633	895,928
Current tax recoverable	17,329	12,297
Other current assets (Note 17)	16,609	16,790
Derivative financial instrument (Note 20)	--	911
	1,241,186	1,147,053
Assets held for sale (Note 14)	130,368	228,259
Total current assets	1,371,554	1,375,312
Property and equipment (Note 16)	304,568	301,385
Right-of-use assets	346,497	337,936
Other long-term assets (Note 17)	14,278	15,821
Deferred income tax	17,071	16,772
Derivative financial instruments (Note 20)	42	--
Intangible assets	615,419	607,765
Goodwill	101,454	91,905
Total assets	2,770,883	2,746,896
LIABILITIES
Current liabilities
Trade and other payables (Note 18)	176,431	149,517
Revolving floorplan facilities (Note 19)	1,018,358	962,616
Current tax payable	--	3,602
Vehicle repurchase obligations	2,550	2,582
Indebtedness (Note 19)	1,688	1,688
Lease liabilities	27,889	25,872
Redemption liabilities	17,293	19,146
Equity forward liabilities (Note 20)	34,734	22,970
Derivative financial instruments (Note 20)	2,971	2,109
	1,281,914	1,190,102
Liabilities directly associated with assets held for sale (Note 14)	19,399	98,357
Total current liabilities	1,301,313	1,288,459
Long-term indebtedness (Note 19)	501,331	513,021
Long-term lease liabilities	403,724	383,469
Long-term redemption liabilities	25,000	25,000
Derivative financial instruments (Note 20)	3,757	5,147
Deferred income tax	48,564	49,824
Total liabilities	2,283,689	2,264,920
EQUITY
Attributable to AutoCanada shareholders	467,880	460,477
Attributable to non-controlling interests	19,314	21,499
Total equity	487,194	481,976
	2,770,883	2,746,896

The accompanying notes are an integral part of these condensed interim consolidated financial statements and can be found on the Company's website at investors.autocan.ca or on www.sedarplus.ca.

Condensed Interim Consolidated Statements of Cash Flows
(Unaudited)
(in thousands of Canadian dollars)

	Three-month period ended		Six-month period ended
	June 30, 2026 $	June 30, 2025 $	June 30, 2026 $	June 30, 2025 $
Cash provided by (used in): Operating activities
Net income for the period	24,396	18,879	29,480	15,727
Adjustments for:
Income tax expense (Note 10)	5,706	8,297	4,179	10,115
Finance costs (Note 9, 15)	29,040	27,827	55,919	62,753
Depreciation of right-of-use assets (Note 8)	8,139	8,181	16,310	16,419
Depreciation of property and equipment (Note 8)	5,080	5,337	10,004	10,657
Amortization of intangible assets (Note 8)	110	125	216	248
Gain on disposal of assets, net	(16,102)	(862)	(32,287)	(13,915)
Share-based compensation (Note 21)	2,394	2,340	(484)	3,983
Unrealized fair value changes on foreign exchange forward contracts (Note 20)	(16)	(796)	2,101	(2,143)
Gain on redemption liabilities	(1,078)	1,183	(1,853)	(1,141)
Impairment of non-financial assets  (Note 15 )	--	2,380	--	5,749
Net change in non-cash working capital (Note 27)	12,453	(26,374)	34,663	(202)
	70,122	46,517	118,248	108,250
Income taxes paid	(4,642)	(1,822)	(12,762)	(9,050)
Interest paid	(21,875)	(24,885)	(55,103)	(60,687)
	43,605	19,810	50,383	38,513
Investing activities
Business acquisitions, net of cash acquired (Note 11)	(17,376)	--	(26,875)	--
Purchases of property and equipment	(4,287)	(7,140)	(19,267)	(10,143)
Purchases of intangible assets	(350)	(58)	(829)	(128)
Adjustments to prior year business acquisitions	164	(47)	164	(47)
Proceeds on sale of property and equipment	1,364	1,079	7,321	1,105
Proceeds on divestiture of dealership (Note 25)	43,986	3,291	70,557	3,291
Proceeds on termination of loan agreement with subsidiary	--	--	--	30,107
Proceeds on franchise termination	--	--	--	894
	23,501	(2,875)	31,071	25,079
Financing activities
Proceeds from indebtedness	142,298	210,943	357,279	385,755
Repayment of indebtedness	(177,871)	(252,966)	(372,375)	(428,505)
Repurchase of common shares under Normal Course Issuer Bid (Note 22)	(656)	--	(656)	--
Settlement of forward share purchases (Note 20)	(11,234)	--	(11,234)	--
Shares settled from treasury, net (Note 22)	--	188	--	188
Dividends paid to non-controlling interests	--	(1,833)	(3,244)	(6,791)
Acquisition of non-controlling interests	--	--	--	(1,010)
Settlements of share-based awards, net	(120)	(229)	(337)	(229)
Principal portion of lease payments, net	(7,707)	(9,775)	(14,541)	(18,215)
	(55,290)	(53,672)	(45,108)	(68,807)

Condensed Interim Consolidated Statements of Cash Flows (continued)
(Unaudited)
(in thousands of Canadian dollars)

	Three-month period ended		Six-month period ended
	June 30, 2026 $	June 30, 2025 $	June 30, 2026 $	June 30, 2025 $
Effect of exchange rate changes on cash	(328)	1,457	(1,653)	1,882
Net increase (decrease) in cash	11,488	(35,280)	34,693	(3,333)
Cash at beginning of period per balance sheet	133,479	101,468	87,963	67,343
Adjustment on initial application of amendments to IFRS 9 on January 1, 2026 (Note 4)	--	--	(2,141)	--
Cash at beginning of period included in assets held for sale related to    discontinued operations (Note 15)	2,647	37,827	27,099	40,005
Cash at end of period	147,614	104,015	147,614	104,015
Included in cash per balance sheet	142,250	62,409	142,250	62,409
Included in the assets held for sale of the discontinued operations (Note 15)	5,364	41,606	5,364	41,606

The accompanying notes are an integral part of these condensed interim consolidated financial statements and can be found on the Company's website at investors.autocan.ca or on www.sedarplus.ca.

NON-GAAP AND OTHER FINANCIAL MEASURES

This press release contains certain financial measures that do not have any standardized meaning prescribed by 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 income (loss) or to cash provided by (used in) operating, investing, financing activities, cash, and indebtedness determined in accordance with GAAP, as indicators of our performance. We provide these additional Non-GAAP measures ("Non-GAAP Measures"), capital management measures, and supplementary financial measures to assist investors in determining the Company's ability to generate earnings and cash provided by (used in) operating activities and to provide additional information on how these cash resources are used.

Adjusted EBITDA, adjusted EBITDA margin, normalized operating expenses before depreciation, and normalized operating expenses before depreciation as a percentage of gross profit 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, cash flows from operating, investing and financing activities or as a measure of liquidity and cash flows. The Company's methods of calculating referenced Non-GAAP Measures may differ from the methods used by other issuers. Therefore, these measures may not be comparable to similar measures presented by other issuers.

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

Adjusted EBITDA

Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) is an indicator of a company's operating performance over a period of time and ability to incur and service debt. Adjusted EBITDA provides an indication of the results generated by our principal business activities prior to:

• Interest expense (other than interest expense on floorplan financing), income taxes, depreciation, and amortization;
• Charges that introduce volatility unrelated to operating performance by virtue of the impact of external factors (such as share-based compensation amounts attributed to certain equity issuances);
• Non-cash charges (such as impairment, recoveries, gains or losses on derivatives, revaluation of contingent consideration and revaluation of redemption liabilities);
• Charges outside the normal course of business (such as restructuring, gains and losses on dealership divestitures, and real estate transactions); and
• Charges that are non-recurring in nature (such as resolution of lawsuits and legal claims, and share-based compensation amounts attributable to certain equity issuances as part of the transformation plan).

The Company considers this measure meaningful as it provides improved continuity with respect to the comparison of our operating performance over a period of time.

Adjusted EBITDA Margin

Adjusted EBITDA margin is an indicator of a company's operating performance specifically in relation to our revenue performance.

The Company considers this measure meaningful as it provides improved continuity with respect to the comparison of our operating performance with retaining and growing profitability as our revenue and scale changes over a period of time.

Normalized Operating Expenses ("Opex") Before Depreciation

Normalized operating expenses before depreciation is an indicator of a company's operating expense before depreciation over a period of time, normalized for the following items:

• Transaction costs related to acquisitions, dispositions, and open points;
• Software implementation costs associated with the configuration or customization of software as a service arrangement;
• Restructuring charges relate to non-recurring organizational changes to improve the Company's profitability and overall efficiency;
• Management transition costs; and
• Share-based compensation expense.

The Company considers this measure meaningful as it provides a comparison of our operating expense normalized for transactions that are not indicative of the Company's operating expenses over time.

Normalized Operating Expenses Before Depreciation as a Percentage of Gross Profit

Normalized operating expenses before depreciation as a percentage of gross profit is a measure of a company's normalized operating expenses before depreciation over a period of time in relation to gross profit.

The Company considers this measure meaningful as it provides a comparison of our operating performance, normalized for transactions that are not indicative of the Company's operating expenses, with our growing profitability as our gross profit and scale changes over a period of time.

NON-GAAP AND OTHER FINANCIAL MEASURES RECONCILIATIONS

Adjusted EBITDA

The following tables illustrate segmented adjusted EBITDA for the Three-month period ended June 30, 2026:

	Three-Months Ended June 30, 2026				Three-Months Ended June 30, 2025
	Dealership Operations	Collision Operations	Total		Dealership Operations	Collision Operations	Total
Period from April 1 to June 30
Net income for the period	23,139	1,257	24,396		17,149	1,730	18,879
Add back (deduct):
Income tax expense	5,706	--	5,706		8,297	--	8,297
Depreciation of property and equipment	4,336	744	5,080		4,869	468	5,337
Interest on long-term indebtedness	9,166	--	9,166		9,692	--	9,692
Depreciation of right of use assets	7,405	734	8,139		7,483	698	8,181
Amortization of intangible assets	107	3	110		125	--	125
Lease liability interest	7,173	982	8,155		7,505	973	8,478
Impairment of non-financial assets	--	--	--		2,380	--	2,380
Gain on redemption liabilities	(1,078)	--	(1,078)		1,183	--	1,183
Canadian franchise dealership and corporate restructuring charges	2,908	--	2,908		5,984	--	5,984
Loss on extinguishment of debt	942	--	942		--	--	--
Unrealized fair value changes on derivative instruments	34	--	34		(3,454)	--	(3,454)
Unrealized foreign exchange gains	1,473	--	1,473		2,338	--	2,338
Software implementation costs	(151)	--	(151)		1,256	--	1,256
Cybersecurity incident costs	3	--	3		473	--	473
Acquisition related and transaction costs	(2,462)	--	(2,462)		36	--	36
Share-based compensation for transformation plan awards	1,439	--	1,439		1,281	--	1,281
Gain on disposal of assets	(16,095)	(7)	(16,102)		(1,831)	(132)	(1,963)
Adjusted EBITDA	44,045	3,713	47,758		64,766	3,737	68,503
Adjusted EBITDA from discontinued operations	4,391	--	4,391		(4,123)	--	(4,123)
Adjusted EBITDA from continuing operations	48,436	3,713	52,149		60,643	3,737	64,380

Adjusted EBITDA Margin

The following tables illustrate segmented adjusted EBITDA margin from continuing operations for the Three-month period ended June 30, 2026:

	Three-Months Ended June 30, 2026				Three-Months Ended June 30, 2025
	Dealership Operations	Collision Operations	Total		Dealership Operations	Collision Operations	Total
Adjusted EBITDA	48,436	3,713	52,149		60,643	3,737	64,380
Revenue	1,382,058	36,376	1,418,434		1,299,779	38,420	1,338,199
Adjusted EBITDA Margin	3.5 %	10.2 %	3.7 %		4.7 %	9.7 %	4.8 %

Normalized Operating Expenses Before Depreciation and Normalized Operating Expenses Before Depreciation as a Percentage of Gross Profit

The following tables illustrate segmented normalized opex before depreciation and normalized opex before depreciation as a percentage of gross profit from continuing operations for the Three-month period ended June 30, 2026:

	Three-Months Ended June 30, 2026				Three-Months Ended June 30, 2025
	Dealership Operations	Collision Operations	Total		Dealership Operations	Collision Operations	Total
Operating expenses before depreciation	138,818	14,113	152,931		144,302	12,792	157,094
Normalizing Items:
Deduct:
Acquisition-related costs	(73)	--	(73)		(36)	--	(36)
Software implementation costs	151	--	151		(1,256)	--	(1,256)
Canadian franchise dealership and corporate restructuring charges	(2,908)	--	(2,908)		(5,984)	--	(5,984)
Share-based compensation expense	(2,394)	--	(2,394)		(2,340)	--	(2,340)
Normalized Opex before depreciation	133,594	14,113	147,707		134,686	12,792	147,478
Gross profit	189,324	17,730	207,054		208,806	16,561	225,367
Normalized Opex Before Depreciation as a percentage of gross profit (%)	70.6 %	79.6 %	71.3 %		64.5 %	77.2 %	65.4 %

Forward Looking Statements

Certain statements contained in this press release are forward-looking statements and information (collectively "forward-looking statements"), within the meaning of applicable Canadian securities legislation. We hereby provide cautionary statements identifying important factors that could cause 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", "plan", "seek", "may", "intend", "likely", "will", "believe", "shall" and similar expressions) and the financial outlook with respect to the transformation plan are not all 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.

Forward-looking statements and financial outlook in this press release include: AutoCanada's future financial position, the expected aggregate proceeds from the U.S. dealership and land divestitures, the completion and the anticipated timing of completion of the U.S. dealership and land disposition transactions, engagement in selling the remaining dealerships of the U.S. Operations segment, the impact of the U.S. dealership divestitures on the Company's leverage ratio, the anticipated timing of restoring Canadian dealership performance to levels more consistent with industry benchmarks, the impact of restoring Canadian dealership performance to levels more consistent with industry benchmarks on the Company's leverage ratio, and the expected accretive growth of collision operations.

The financial outlook with respect to dealership operations is disclosed to assist current and future shareholders to evaluate the effectiveness of AutoCanada's dealership operating model enhancements and initiatives and readers are cautioned that it may not be suitable for any other purpose. Dealership operating model enhancements and initiatives, the completion, and the anticipated timing of completion, are based on the assumptions that improving sales productivity, improving used vehicle margins, fixed operations growth, improving service bay utilization rates, and operating expense cost discipline will improve dealership financial performance. Additional key assumptions or risk factors with respect to improvements in the dealership operating model include the risk of economic stability and other external factors, which may delay progress toward the Company's targeted 2.0x-3.0x Total Net Funded Debt to Bank EBITDA leverage ratio.

The financial outlook with respect to collision operations is disclosed to assist current and future shareholders to evaluate the effectiveness of AutoCanada's collision growth plan and collision operating model enhancements and initiatives and readers are cautioned that it may not be suitable for any other purposes. The expected accretive growth of collision operations and the anticipated timing is based on the assumptions that acquisition opportunities remain available, attractive and accretive, newly acquired collision centres are being integrated effectively, and financing continues to be accessible on reasonable and acceptable terms. Collision operating model enhancements and initiatives, the completion, and the anticipated timing of completion, are based on the assumptions that expanding OEM certifications and insurance direct repair program relationships, increasing referral volumes, standardizing the national operating model, expanding apprenticeship and technician-development programs, expanding higher-value services, strengthening procurement and vendor relationships, and completing the rollout of the ACX national brand and B2B strategy will improve collision financial performance. Additional key assumptions or risk factors with respect to the accretive growth of collision operations and collision operating model enhancements and initiatives is the willingness of sellers, economic and industry stability, and other external factors.

Forward-looking statements with respect to the expected aggregate proceeds from the U.S. dealership and land divestitures, the anticipated timing of completion of the U.S. disposition transactions, and the engagement in selling the remaining U.S. dealerships and lands is disclosed to assist current and future shareholders to evaluate the effectiveness of the U.S. divestiture strategy and readers are cautioned that it may not be suitable for any other purpose. The expected aggregate proceeds from the U.S. dealership divestitures, the anticipated timing of completion of the U.S. disposition transactions, and the engagement in selling the remaining dealerships of the U.S. dealerships and lands are based on the assumptions that customary closing conditions will be satisfied, and OEM approvals will be secured. Additional key assumptions or risk factors with respect to the successful execution of our U.S. divestiture strategy is the willingness of buyers, economic stability, and other external factors.

Forward-looking statements and financial outlook provide information about management's expectations and plans for the future and may not be appropriate for other purposes. Forward looking statements and financial outlook are based on various assumptions, and expectations that AutoCanada believes are reasonable in the circumstances. No assurance can be given that these assumptions and expectations will prove correct. Those assumptions and expectations are based on information currently available to AutoCanada, including information obtained from third-party consultants and other third-party sources, and the historic performance of AutoCanada's businesses. AutoCanada cautions that the assumptions used to prepare such forward-looking statements and financial outlook,  could prove to be incorrect or inaccurate.

In preparing the forward-looking statements and financial outlook, AutoCanada considered numerous economic, market and operational assumptions, including key assumptions listed under Section 3 Outlook of the MD&A.

The forward-looking statements and financial outlook are also subject to the risks and uncertainties set forth below. By their very nature, forward-looking statements and financial outlook involve numerous assumptions, risks and uncertainties, both general and specific. Should one or more of these risks and uncertainties materialize or should underlying assumptions prove incorrect, as many important factors are beyond our control, AutoCanada's actual performance and financial results may vary materially from those estimates and expectations contemplated, expressed or implied in the forward-looking statements or financial outlook. These risks and uncertainties include risks relating to failure to realize expected cost-savings, compliance with laws and regulations, reduced customer demand, operational risks, force majeure, labour relations matters, our ability to access external sources of debt and equity capital, and the risks identified in (i) the MD&A under Section 12 Risk Factors and (ii) AutoCanada's most recent Annual Information Form (the "AIF"). The preceding list of assumptions, risks and uncertainties is not exhaustive.

Accordingly, these factors could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements and financial outlook. Therefore, any such forward-looking statements and financial outlook are qualified in their entirety by reference to the factors discussed throughout this press release and in the MD&A.

Details of the Company's material forward-looking statements and financial outlook are included in the Company's most recent AIF. The AIF and other documents filed with securities regulatory authorities (accessible through the SEDAR+ website (www.sedarplus.ca) describe the risks, material assumptions, and other factors that could influence actual results and which are incorporated herein by reference.

When relying on our forward-looking statements and financial outlook to make decisions with respect to AutoCanada, investors and others should carefully consider the preceding factors, other uncertainties and potential events. Any forward-looking statements and financial outlook are provided as of the date of this press release and, except as required by law, AutoCanada does not undertake to update or revise such statements to reflect new information, subsequent or otherwise. For the reasons set forth above, investors should not place undue reliance on forward-looking statements or financial outlook.

About AutoCanada

AutoCanada's Dealership Operations segment operates 61 franchised dealerships in Canada, comprised of 23 automotive brands across 8 provinces as well as three independent used dealerships ("Used Vehicle Operations"). AutoCanada currently sells Acura, Audi, BMW, Buick, Cadillac, Chevrolet, Chrysler, Dodge, Ford, GMC, Honda, Hyundai, Infiniti, Jeep, Kia, Mazda, Mercedes-Benz, MINI, Nissan, Porsche, Ram, Subaru, and Volkswagen vehicles. In 2025, our Canadian dealerships sold approximately 71,000 new and used retail vehicles. AutoCanada's U.S. franchise dealerships, operating as Leader Automotive Group ("Leader"), operates 9 franchised dealerships comprised of 6 brands, in Illinois, USA. In 2025, our U.S. dealerships sold approximately 8,000 new and used retail vehicles. Leader is classified as discontinued operations as the Company progresses the sale of its U.S. dealership portfolio.

AutoCanada's Collision Operations segment, operating under the ACX brand, operates 37 collision centres ("Collision Centres"), supported by 26 Original Equipment Manufacturer ("OEM") certifications covering 37 vehicle brands, as of June 30, 2026. The Company's Collision Operations enables customer retention across multiple touchpoints within the automotive ownership lifecycle.

Additional Information

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

SOURCE AutoCanada Inc.

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