AutoCanada : Q4 2024 Financial Statements
ACQ.TO
2024
ANNUAL FINANCIAL RESULTS
AUTOCAN.CA
Consolidated Financial Statements
For the year˜¼-˜-DecemberČ1ļċĉċč
Independent auditor's report
To the Shareholders of AutoCanada Inc.
Our opinion
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of AutoCanada Inc. and its subsidiaries (together, the Company) as at
December 31, 2024 and 2023, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS Accounting Standards).
What we have audited
The Company's consolidated financial statements comprise:
Basis for opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the consolidated financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada. We have fulfilled our other ethical responsibilities in accordance with these requirements.
PricewaterhouseCoopers LLP
Stantec Tower, 10220 103rd Avenue North West, Suite 2200, Edmonton, Alberta, Canada T5J 0K4 T.: +1 780 441 6700, F.: +1 780 441 6776, Fax to mail: [email protected]
"PwC" refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2024. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter
Impairment and recoveries of intangible assets
Refer to note 3 - Material accounting policy information, note 5 - Critical accounting estimates, note 18 - Discontinued operation and note 20 - Intangible assets and goodwill to the consolidated financial statements.
The Company had intangible assets of $630,467 thousand as at December 31, 2024, of which the entirety relates to the Canadian Operations segment. The Company reclassified $36,762 of intangible assets held for sale as at December 31, 2024 associated with the U.S. Operations segment. Management performs an impairment test at least annually, or more frequently if events or changes in circumstances indicate that they may be impaired. For the purposes of assessing impairment, assets are grouped as cash generating units (CGUs), the lowest level for which there are separately identifiable cash flows. An impairment is recorded when the recoverable amounts of assets are less than their carrying amounts. The recoverable amount of each CGU is based on the higher of fair value less costs to dispose (FVLCD) or value in use (VIU). Impairment losses, other than those relating to goodwill, are evaluated for potential reversals of impairment when events or changes in circumstances warrant such consideration. Under the FVLCD approach, fair value is calculated based on an applicable multiple applied to projected earnings before interest, taxes, depreciation and amortization (EBITDA). In arriving at the FVLCD, management considers projected operating margins, growth rates and EBITDA multiples as
How our audit addressed the key audit matter
Our approach to addressing the matter included the following procedures, among others:
Key audit matter
significant assumptions. Under the VIU approach, the discounted cash flow (DCF) method is used, which involves projecting cash flows and converting them into a present value equivalent through discounting. Significant assumptions used in the VIU approach include projected EBITDA, growth rates and discount rates. Based on the impairment assessment, the net recoveries of impairment for the year ended December 31, 2024 were $7,612 thousand allocated to indefinite life intangibles within the Canadian Operations segment. Management recorded impairment of $15,833 thousand on indefinite life intangibles within the discontinued U.S. Operations segment.
We considered this a key audit matter due to (i) the significance of the intangible asset balances and (ii) the significant judgment made by management in determining the recoverable amounts of the CGUs, including the use of significant assumptions. This has resulted in a high degree of subjectivity and audit effort in performing audit procedures to test the significant assumptions. Professionals with specialized skill and knowledge in the field of valuation assisted us in performing our procedures.
How our audit addressed the key audit matter
Other information
Management is responsible for the other information. The other information comprises the Management's Discussion and Analysis.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of management and those charged with governance for the consolidated financial statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS Accounting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company's financial reporting process.
Auditor's responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditor's report is Richard Probert.
/s/PricewaterhouseCoopers LLP
Chartered Professional Accountants
Edmonton, Alberta
March 19, 2025
AutoCanada Inc.
Consolidated Statements of Comprehensive (Loss) Income
For the Years Ended
(in thousands of Canadian dollars except for share and per share amounts)
December 31,
December 31,
2023
2024
Revised (1)
$
$
Continuing operations
Revenue (Note 6)
5,351,672
5,607,194
Cost of sales (Note 7)
(4,469,395)
(4,629,532)
Gross profit
882,277
977,662
Operating expenses (Note 8)
(735,312)
(777,159)
Operating profit before other income
146,965
200,503
Lease and other income (Note 10)
7,850
12,775
Gain on disposal of assets, net (Note 10)
29,781
442
Net impairment losses on trade and other receivables
(8,737)
(2,230)
(Impairment) recoveries of non-financial assets (Note 20, 24)
(4,542)
3,538
Operating profit
171,317
215,028
Finance costs (Note 11)
(129,678)
(123,020)
Finance income (Note 11)
2,674
3,346
(Loss) gain on redemption liabilities (Note 14)
(486)
3,639
Other gains (losses), net
846
(321)
Income for the year before tax from continuing operations
44,673
98,672
Income tax expense (Note 12)
8,035
30,699
Net income for the year from continuing operations
36,638
67,973
Net loss for the year from discontinued operation (Note 18)
(103,386)
(14,192)
Net (loss) income for the year
(66,748)
53,781
Other comprehensive income (loss)
Items that may be reclassified to profit or loss
Foreign operations currency translation (Note 18)
8,032
6,489
Change in fair value of cash flow hedge (Note 25)
(206)
1,800
Income tax relating to these items
51
(458)
Other comprehensive income for the year, net of tax
7,877
7,831
Comprehensive (loss) income for the year
(58,871)
61,612
Net (loss) income for the year attributable to:
AutoCanada shareholders
(68,233)
50,490
Non-controlling interests
1,485
3,291
(66,748)
53,781
Net (loss) income for the year attributable to AutoCanada shareholders
arises from:
Continuing operations
35,153
64,682
Discontinued operation
(103,386)
(14,192)
(68,233)
50,490
Comprehensive (loss) income for the year attributable to:
AutoCanada shareholders
(60,356)
58,321
Non-controlling interests
1,485
3,291
(58,871)
61,612
Comprehensive (loss) income for the year attributable to AutoCanada
shareholders arises from:
Continuing operations
34,998
66,024
Discontinued operation
(95,354)
(7,703)
(60,356)
58,321
Page 1 • AutoCanada
AutoCanada Inc.
Consolidated Statements of Comprehensive (Loss) Income (continued)
For the Years Ended
(in thousands of Canadian dollars except for share and per share amounts)
December 31,
December 31,
2023
2024
Revised (1)
$
$
Net (loss) income per share attributable to AutoCanada shareholders:
Basic from continuing operations
1.51
2.75
Basic from discontinued operation
(4.44)
(0.61)
Basic
(2.93)
2.14
Diluted from continuing operations
1.46
2.65
Diluted from discontinued operation
(4.29)
(0.59)
Diluted
(2.83)
2.06
Weighted average shares
Basic (Note 30)
23,316,008
23,561,236
Diluted (Note 30)
24,137,069
24,450,681
The accompanying notes are an integral part of these consolidated financial statements.
Approved on behalf of the Company
(signed) Paul W. Antony
(signed) Barry L. James
Paul W. Antony, Director
Barry L. James, Director
Page 2 • AutoCanada
AutoCanada Inc.
Consolidated Statements of Financial Position (in thousands of Canadian dollars)
December 31,
December 31,
2024
2023
$
$
ASSETS
Current assets
Cash
67,343
103,146
Trade and other receivables (Note 15)
173,568
222,076
Inventories (Note 16)
947,278
1,154,311
Current tax recoverable
10,205
22,187
Other current assets (Note 21)
11,993
15,718
Derivative financial instruments (Note 25)1
376
-
1,210,763
1,517,438
Assets held for sale (Note 17, 18)
332,693
22,152
Total current assets
1,543,456
1,539,590
Property and equipment (Note 19)
312,014
378,269
Right-of-use assets (Note 24)
389,958
405,105
Other long-term assets (Note 21)
16,501
16,708
Deferred income tax (Note 12)
18,840
35,444
Derivative financial instruments (Note 25)
-
3,920
Intangible assets (Note 20)
630,467
682,137
Goodwill (Note 20)
94,592
98,266
Total assets
3,005,828
3,159,439
LIABILITIES
Current liabilities
Trade and other payables (Note 22)
177,473
238,427
Revolving floorplan facilities (Note 23)
1,010,579
1,174,595
Current tax payable
3,766
-
Vehicle repurchase obligations (Note 26)
3,705
1,982
Indebtedness (Note 23)
24,108
744
Lease liabilities (Note 24)
35,780
28,411
Redemption liabilities (Note 14)
23,066
22,580
Other liabilities (Note 27)
11,063
12,325
Derivative financial instruments (Note 25)
1,741
-
1,291,281
1,479,064
Liabilities directly associated with assets held for sale (Note 18)
201,966
-
Total current liabilities
1,493,247
1,479,064
Long-term indebtedness (Note 23)
517,543
562,178
Long-term lease liabilities (Note 24)
421,392
469,013
Long-term redemption liabilities (Note 14)
25,000
25,000
Derivative financial instruments (Note 25)
8,705
2,219
Other long-term liabilities (Note 27)
-
1,368
Deferred income tax (Note 12)
44,613
55,768
Total liabilities
2,510,500
2,594,610
EQUITY
Attributable to AutoCanada shareholders
468,027
534,847
Attributable to non-controlling interests
27,301
29,982
Total equity
495,328
564,829
3,005,828
3,159,439
Commitments and contingencies (Note 28)
The accompanying notes are an integral part of these consolidated financial statements.
Page 3 • AutoCanada
Disclaimer
AutoCanada Inc. published this content on March 19, 2025, and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on March 19, 2025 at 21:30:05.356.