AUTOCANADA REPORTS SECOND QUARTER 2026 RESULTS AND ADVANCES STRATEGIC INITIATIVES

About this update from Autocanada Inc.

Dealership operational stabilization initiatives advancing under the newly completed leadership team Second Quarter 2026 Financial Highlights Outlook Highlights 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: 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: 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. Second Quarter Key Highlights and Recent Developments 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. Collision Operations Highlights 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: After the quarter: 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) Condensed Interim Consolidated Statements of Comprehensive Income (continued) (Unaudited) (in thousands of Canadian dollars except for share and per share amounts) Condensed Interim Consolidated Statements of Financial Position (in thousands of Canadian dollars) Condensed Interim Consolidated Statements of Cash Flows (Unaudited) (in thousands of Canadian dollars) Condensed Interim Consolidated Statements of Cash Flows (continued) (Unaudited) (in thousands of Canadian dollars) 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: 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: 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: Adjusted EBITDA Margin The following tables illustrate segmented adjusted EBITDA margin from continuing operations for the Three-month period ended June 30, 2026: 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: 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 . View original content to download multimedia: http://www.newswire.ca/en/releases/archive/August2026/12/c0936.html

View stock analysis, news, and events for Autocanada Inc.