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Press release from CNW Group

AutoCanada Inc. announces record fourth quarter and record annual financial results for the period ended December 31, 2011:

Thursday, March 22, 2012

AutoCanada Inc. announces record fourth quarter and record annual financial results for the period ended December 31, 2011:22:32 EDT Thursday, March 22, 2012A conference call to discuss the results for the year ended December 31, 2011 will be held on March 23, 2012 at 11:00 a.m. Eastern time (9:00 a.m. Mountain time). To participate in the conference call, please dial 1-888-231-8191 or (647) 427-7450 approximately 10 minutes prior to the call. A live and archived audio webcast of the conference call will also be available on the Company's website www.autocan.ca.EDMONTON, March 22, 2012 /CNW/ - AutoCanada Inc. (the "Company" or "AutoCanada") (TSX: ACQ) today announced financial results for the year ended December 31, 2011 and the three month period ended December 31, 2011.                         2011 Annual Operating ResultsRevenue increased by 16.0% or $139.4 million to over $1 billionGross profit increased by 12.7% or $19.1 millionSame store revenue increased by 17.3%Same store gross profit increased by 13.9%EBITDA was $29.1 million vs. $16.7 million in 2010, a 74% increaseThe number of new vehicles retailed increased by 13.6%The number of used vehicles retailed decreased by 1.0%Repair orders completed for the year were down 1.4%Same store repair orders completed for the year were up 1.0%In commenting on the financial results for the year ended December 31, 2011, Pat Priestner, Chief Executive Officer of AutoCanada Inc. stated that, "The Company reached a significant milestone this year with sales exceeding the billion dollar threshold for the first time in our history.  We achieved record results in 2011 with significant improvements to sales, gross profit and net earnings.  Our management team is very pleased with the performance of our dealerships in 2011 and would like to express our gratitude for the hard work and dedication of the members of our dealership teams, our head office team, our Manufacturer partners, and finance providers, all of whom contributed greatly to this achievement.  In addition, Management is pleased to be currently pursuing a number of opportunities, which if successful, could provide additional sources of long term shareholder value."                         2011 Fourth Quarter Operating ResultsRevenue increased 20.4% or $40.4 millionGross profit increased by 18.2% or $6.5 millionSame store revenue increased by 24.8%Same store gross profit increased by 20.6%EBITDA was $7.5 million vs. $3.5 million in Q4 of 2010, a 117.6% increaseThe number of new vehicles retailed increased by 13.2%The number of used vehicles retailed increased by 12.0%Repair orders completed for the quarter were down 1.5%Same store repair orders completed for the quarter were up 4.2%In commenting on the financial results for the three month period ended December 31, 2011, Pat Priestner, Chief Executive Officer of AutoCanada Inc. stated that, "The fourth quarter of 2011 was a very strong quarter for the Company with increases in revenue and gross profit in all four business streams.  We are pleased to have more than doubled our EBITDA for the quarter and to have increased our dividend for the fourth consecutive quarter, as announced on February 15, 2012."Fourth Quarter 2011 HighlightsFor the fourth quarter of 2011, the Company generated net earnings before other items (reversal of impairment of intangible assets and its related tax effect) of $4.5 million or basic and diluted earnings per share of $0.23.  Pre-tax earnings before other items (reversal of impairment of intangible assets) increased by $4.3 million to $6.2 million in the fourth quarter of 2011 as compared to $1.9 million in the same period in 2010.Same store revenue increased by 24.8% in the fourth quarter of 2011, compared to the same quarter in 2010.  Same store gross profit increased by 20.6% in the fourth quarter of 2011, compared to the same quarter in 2010.Revenue from existing and new dealerships increased 20.4% to $238.3 million in the fourth quarter of 2011 from $197.9 million in the same quarter in 2010.Gross profit from existing and new dealerships increased 18.2% to $42.2 million in the fourth quarter of 2011 from $35.7 million in the same quarter in 2010.EBITDA increased 117.6% to $7.5 million in the fourth quarter of 2011 from $3.5 million in the same quarter in 2010.Free cash flow increased to $9.0 million in the fourth quarter of 2011 or $0.45 per share as compared to $5.7 million or $0.29 per share in the fourth quarter of 2010.Adjusted free cash flow increased to $7.4 million in the fourth quarter of 2011 or $0.37 per share as compared to $2.7 million or $0.14 per share in 2010.Adjusted return on capital employed increased to 5.3% in the fourth quarter of 2011 as compared to 2.0% in 2010.2011 HighlightsFor the year ended December 31, 2011, the Company generated net earnings before other items (reversal of impairment of intangible assets and its related tax effect) of $17.6 million, or basic and fully diluted earnings per share of $0.89.  Pre-tax earnings before other items (reversal of impairment of intangible assets) increased by $12.3 million to $23.8 million for the year ended December 31, 2011 as compared to $11.5 million in 2010.Same store revenue and gross profit increased by 17.3% and 13.9% respectively in the year ended December 31, 2011, compared to the results of the Company for the 2010 year.Revenue from existing and new dealerships increased 16.0% to $1.01 billion in the year ended December 31, 2011 from the $869.5 million that was generated by the Company in 2010.Gross profit from existing and new dealerships increased by 12.7% to $169.1 million in the year ended December 31, 2011 from the $150.0 million that was generated by the Company in the 2010 year.EBITDA increased 74.0% to $29.1 million for the year ended December 31, 2011 from the $16.7 million that was generated by the Company in the 2010 year.Free cash flow decreased to $27.1 million in the year ended December 31, 2011 or $1.36 per share as compared to $29.9 million or $1.51 per share in 2010.Adjusted free cash flow increased to $27.7 million in the year ended December 31, 2011 or $1.39 per share as compared to $14.0 million or $0.70 per share in 2010.On November 4, 2011, the Company purchased substantially all of the net operating and fixed assets of Valley Autohouse (1984) Ltd. operating two dealerships as Valley Autohouse ("Abbotsford and Chilliwack Volkswagen").  The Abbotsford facility is an approximately 9,300 sq. ft. leased facility which includes eight service bays and a six car showroom. The dealership has been in operation since 1986 and in 2010 retailed approximately 210 new and 190 used vehicles.  The Chilliwack facility is an approximately 4,500 sq. ft. leased facility which includes 3 service bays and a single car showroom.  The dealership has been in operation since 2002 and in 2010 retailed approximately 30 new and 40 used vehicles.Dividends Management reviews the Company's financial results on a monthly basis.  The Board of Directors reviews the financial results on a quarterly basis, or as requested by Management, and determine whether a dividend shall be paid based on a number of factors.The following table summarizes the dividends declared by the Company in 2011:(In thousands of dollars)               TotalRecord datePayment date     DeclaredPaid       $$February 28, 2011March 15, 2011     795795May 31, 2011June 15, 2011     995995August 31, 2011September 15, 2011     1,9881,988November 30, 2011December 15, 2011     2,3862,386On February 15, 2012, the Board declared a quarterly eligible dividend of $0.14 per common share on AutoCanada's outstanding Class A common shares, payable on March 15, 2012 to shareholders of record at the close of business on February 29, 2012.  The quarterly eligible dividend of $0.14 represents an annual dividend rate of $0.56 per share or a 17% increase in the dividend from the prior quarter.  The next scheduled dividend review will be in May of 2012.SELECTED ANNUAL FINANCIAL INFORMATIONThe following table shows the audited results of the Company for the years ended December 31, 2009, December 31, 2010 and December 31, 2011.  The results of operations for these periods are not necessarily indicative of the results of operations to be expected in any given comparable period.  The column below marked "CGAAP" represents financial information which has not been restated for the Company's adoption of IFRS and readers are cautioned that this column may not provide appropriate comparative information.(In thousands of dollars except Operating Data and gross profit %)The CompanyCGAAP(Audited)The CompanyIFRS(Audited)The CompanyIFRS(Audited) 200920102011Income Statement DataRevenue775,836869,5071,008,858  New vehicles412,203514,676640,721  Used vehicles212,234202,552206,030   Parts, service &  collision repair108,164108,558110,262  Finance, insurance & other43,23543,72151,845Gross profit141,976150,020169,124  New vehicles29,30838,16447,705  Used vehicles19,91316,88517,381  Parts, service & collision repair53,33855,88857,480   Finance, insurance & other39,41739,08346,558Gross profit %18.3%17.3%16.8%Operating expenses121,813130,237136,846Operating expenses as % of gross profit85.8%86.8%80.9%Finance costs - floorplan4,8557,5368,057Finance costs - long term debt1.6471,0761,136(Reversal of) Impairment of intangible assets-(8,059)(25,543)Income taxes4494,95612,509Net earnings12,57814,59636,784EBITDA 1 18,35216,74029,131Cash dividends per share0.0620.1200.310Basic earnings (loss) per share0.6330.7341.850Diluted earnings (loss) per share0.6330.7341.850    Operating DataVehicles (new and used) sold23,08324,23927,998New retail vehicles sold11,11712,76714,499New fleet vehicles sold2,2332,7174,832Used retail vehicles sold9,7338,7558,667Number of service & collision repair orders completed301,282309,705305,298Absorption rate 289%86%88%# of dealerships222324# of same store dealerships 3192121# of service bays at period end331339333Same store revenue growth 3(10.5)%10.5%17.3%Same store gross profit growth 3(7.8)%4.1%13.9%   1 EBITDA has been calculated as described under "NON-GAAP MEASURES".2 Absorption has been calculated as described under "NON-GAAP MEASURES"3Same store revenue growth & same store gross profit growth is calculated using franchised automobile dealerships that we have owned for at least 2 full years.  SELECTED QUARTERLY FINANCIAL INFORMATIONThe following table shows the unaudited results of the Company for each of the eight most recently completed quarters.  The results of operations for these periods are not necessarily indicative of the results of operations to be expected in any given comparable period.(In thousands of dollars except OperatingData and gross profit %)                  Q12010 Q22010 Q32010 Q42010 Q12011 Q22011 Q32011 Q42011Income Statement Data                  New vehicles 114,520 144,655 141,533 113,967 128,303 196,850 172,688 142,880  Used vehicles 49,034 57,181 50,922 45,414 44,906 52,054 55,351 53,719  Parts, service & collision repair 26,168 27,501 26,540 28,351 26,462 28,256 26,871 28,673  Finance, insurance & other 10,067 12,442 11,060 10,151 11,113 13,577 14,109 13,046Revenue 199,789 241,779 230,055 197,883 210,784 290,737 269,019 238,318                   New vehicles 8,128 11,030 9,983 9,023 9,724 13,974 12,740 11,267  Used vehicles 4,099 4,906 4,221 3,659 3,486 4,302 5,020 4,573  Parts, service & collision repair 13,252 14,612 14,031 13,994 13,277 15,159 14,493 14,551  Finance, insurance & other 9,082 11,107 9,843 9,050 9,947 12,117 12,641 11,853Gross profit 34,561 41,655 38,078 35,725 36,434 45,552 44,894 42,244                 Gross profit % 17.3% 17.2% 16.6% 18.1% 17.3% 15.7% 16.7% 17.7%Operating expenses 30,740 34,280 33,207 32,010 31,891 35,127 35,742 34,086Operating exp. as % of gross profit 88.9% 82.3% 87.2% 89.6% 87.5% 77.1% 79.6% 80.7%Finance costs - floorplan 1,670 2,230 2,042 1,594 1,685 2,311 2,190 1,871Finance costs - long-term debt 236 230 278 332 283 323 296 234Reversal of impairment of intangibles - - - (8,059) - - - (25,543)Income taxes 516 1,330 692 2,418 690 2,029 1,646 8,144Net earnings 4 1,414 3,624 1,983 7,575 1,995 5,951 5,230 23,608EBITDA 1, 4Basic earnings (loss) per shareDiluted earnings (loss) per share 3,0960.0710.071 6,1640.1820.182 4,0110.1000.100 3,4690.3810.381 4,0470.1000.100 9,3210.2990.299 8,2160.2630.263 7,5471.1871.187Operating DataVehicles (new and used) sold 5,676 6,994 6,350 5,219 5,826 8,210 7,649 6,313New retail vehicles sold 2,787 3,614 3,358 3,008 3,050 4,158 3,907 3,405New fleet vehicles sold 661 919 831 306 796 1,900 1,340 775Used retail vehicles sold 2,228 2,461 2,161 1,905 1,980 2,152 2,402 2,133Number of service & collision repair orders completed 75,311 80,072 77,285 77,037 72,360 80,851 76,176 75,911Absorption rate 2 85% 87% 85% 86% 80% 91% 90% 91%# of dealerships at period end 22 23 23 23 23 22 22 24# of same store dealerships 3 19 19 19 21 22 21 21 21# of service bays at period end 331 339 339 339 339 322 322 333Same store revenue growth 3 16.9% 19.4% 6.7% 2.4% 2.7% 19.3% 21.6% 24.8%Same store gross profit growth 3 11.1% 7.5% (4.0)% 2.9% 2.9% 8.2% 22.9% 20.6%                 Balance Sheet Data                Cash and cash equivalents 23,615 31,880 34,329 37,541 39,337 43,837 49,366 53,641Accounts receivable 40,701 46,787 37,149 32,832 42,260 51,539 44,172 42,448Inventories 153,847 177,294 137,507 118,088 134,865 149,481 159,732 136,869Revolving floorplan facilities 160,590 194,388 145,652 124,609 152,075 172,600 175,291 150,8161 EBITDA has been calculated as described under "NON-GAAP MEASURES".2 Absorption has been calculated as described under "NON-GAAP MEASURES".3 Same store revenue growth & same store gross profit growth is calculated using franchised automobile dealerships that we have owned for at least 2 full years.4 The results from operations have been lower in the first and fourth quarters of each year, largely due to consumer purchasing patterns during the holiday season, inclement weather and the reduced number of business days during the holiday season. As a result, our financial performance is generally not as strong during the first and fourth quarters than during the other quarters of each fiscal year. The timing of acquisitions may have also caused substantial fluctuations in operating results from quarter to quarter.  The following table summarizes the results for the year ended December 31, 2011, on a same store basis by revenue source, and compares these results to the same periods in 2010. Same Store Gross Profit and Gross Profit Percentage For the Year Ended Gross Profit   Gross Profit %(In thousands of dollars except % change and gross profit %)    Dec. 31,2011Dec. 31,2010% Change Dec. 31,2011Dec. 31,2010Change            Revenue SourceNew vehicles    45,77236,38925.8% 7.6%7.6%   0.0%Used vehicles    16,89716,7720.7% 8.5%8.6%    (0.1)%Finance, insurance and other    44,94137,40720.1% 90.6%89.9%      0.6%Subtotal    107,61090,56819.4%    Parts, service and collision repair    54,60951,8865.2% 52.2%51.4%       0.7%Total    162,219142,45413.9% 16.9%17.4%(0.5)%        The following table summarizes the results for the three-month period ended December 31, 2011 on a same store basis by revenue source and compares these results to the same period in 2010. Same Store Gross Profit and Gross Profit Percentage For the Three-Month Period Ended Gross Profit Gross Profit %(In thousands of dollars except % change and gross profit %)Dec. 31,2011Dec. 31,2010% Change Dec. 31,2011Dec. 31,2010ChangeRevenue Source       New vehicles10,8358,55426.7% 7.9%8.2%(0.3)%Used vehicles4,3983,62021.5% 8.4%8.3%        0.1%Finance, insurance and other11,5078,55834.5% 91.5%89.9%        1.6%Subtotal26,74020,73229.0%    Parts, service and collision repair13,923  12,9817.3% 50.7%49.2%        1.5%Total40,66333,71320.6% 17.8%18.4%(0.6)%        About AutoCanadaAutoCanada is one of Canada's largest multi-location automobile dealership groups, currently operating 24 franchised dealerships in British Columbia, Alberta, Manitoba, Ontario, New Brunswick and Nova Scotia. In 2011, our dealerships sold approximately 28,000 vehicles and processed approximately 300,000 service and collision repair orders in our 333 service bays during that time.Our dealerships derive their revenue from the following four inter-related business operations: new vehicle sales; used vehicle sales; parts, service and collision repair; and finance and insurance. While new vehicle sales are the most important source of revenue, they generally result in lower gross profits than used vehicle sales, parts, service and collision repair operations and finance and insurance sales. Overall gross profit margins increase as revenues from higher margin operations increase relative to revenues from lower margin operations. We earn fees for arranging financing on new and used vehicle purchases on behalf of third parties.  Under our agreements with our retail financing sources we are required to collect and provide accurate financial information, which if not accurate, may require us to be responsible for the underlying loan provided to the consumer.Forward Looking Statements Certain statements contained in this press release are forward-looking statements and information (collectively "forward-looking statements"), within the meaning of the applicable Canadian securities legislation.  We hereby provide cautionary statements identifying important factors that could cause our actual results to differ materially from those 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", "expect", "plan", "seek", "may", "intend", "likely", "will", "believe" and similar expressions are not 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.  Accordingly, these factors could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements.  Therefore, any such forward-looking statements are qualified in their entirety by reference to the factors discussed throughout this document.The Company's Annual Information Form and other documents filed with securities regulatory authorities (accessible through the SEDAR website www.sedar.com describe the risks, material assumptions and other factors that could influence actual results and which are incorporated herein by reference.Further, any forward-looking statement speaks only as of the date on which such statement is made, and, except as required by applicable law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events.  New factors emerge from time to time, and it is not possible for management to predict all of such factors and to assess in advance the impact of each such factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement.NON-GAAP MEASURESThis press release contains certain financial measures that do not have any standardized meaning prescribed by Canadian 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 earnings (loss) or to cash provided by (used in) operating, investing, and financing activities determined in accordance with Canadian GAAP, as indicators of our performance.  We provide these measures to assist investors in determining our ability to generate earnings and cash provided by (used in) operating activities and to provide additional information on how these cash resources are used.  We list and define these "NON-GAAP MEASURES" below:EBITDAEBITDA is a measure commonly reported and widely used by investors as an indicator of a company's operating performance and ability to incur and service debt, and as a valuation metric.  The Company believes EBITDA assists investors in comparing a company's performance on a consistent basis without regard to depreciation and amortization and asset impairment charges which are non-cash in nature and can vary significantly depending upon accounting methods or non-operating factors such as historical cost.  References to "EBITDA" are to earnings before interest expense (other than interest expense on floorplan financing and other interest), income taxes, depreciation, amortization and asset impairment charges.EBITEBIT is a measure used by management in the calculation of Return on capital employed (defined below).  Management's calculation of EBIT is EBITDA (calculated above) less depreciation and amortization.Free Cash FlowFree cash flow is a measure used by management to evaluate its performance.  While the closest Canadian GAAP measure is cash provided by operating activities, free cash flow is considered relevant because it provides an indication of how much cash generated by operations is available after capital expenditures.  It shall be noted that although we consider this measure to be free cash flow, financial and non-financial covenants in our credit facilities and dealer agreements may restrict cash from being available for distributions, re-investment in the Company, potential acquisitions, or other purposes.  Investors should be cautioned that free cash flow may not actually be available for growth or distribution of the Company.  References to "Free cash flow" are to cash provided by (used in) operating activities (including the net change in non-cash working capital balances) less capital expenditures (not including acquisitions of dealerships and dealership facilities).Adjusted Free Cash FlowAdjusted free cash flow is a measure used by management to evaluate its performance.  Adjusted free cash flow is considered relevant because it provides an indication of how much cash generated by operations before changes in non-cash working capital is available after deducting expenditures for non-growth capital assets.  It shall be noted that although we consider this measure to be adjusted free cash flow, financial and non-financial covenants in our credit facilities and dealer agreements may restrict cash from being available for distributions, re-investment in the Company, potential acquisitions, or other purposes.  Investors should be cautioned that adjusted free cash flow may not actually be available for growth or distribution of the Company.  References to "Adjusted free cash flow" are to cash provided by (used in) operating activities (before changes in non-cash working capital balances) less non-growth capital expenditures.Adjusted Average Capital EmployedAdjusted average capital employed is a measure used by management to determine the amount of capital invested in AutoCanada and is used in the measure of Adjusted Return on Capital Employed (described below).  Adjusted average capital employed is calculated as the average balance of interest bearing debt for the period (including current portion of long term debt, excluding revolving floorplan facilities) and the average balance of shareholders equity for the period, adjusted for impairments of intangible assets, net of deferred tax.  Management does not include future income tax, non-interest bearing debt, or revolving floorplan facilities in the calculation of adjusted average capital employed as it does not consider these items to be capital, but rather debt incurred to finance the operating activities of the Company.Absorption RateAbsorption rate is an operating measure commonly used in the retail automotive industry as an indicator of the performance of the parts, service and collision repair operations of a franchised automobile dealership. Absorption rate is not a measure recognized by GAAP and does not have a standardized meaning prescribed by GAAP. Therefore, absorption rate may not be comparable to similar measures presented by other issuers that operate in the retail automotive industry.  References to ''absorption rate'' are to the extent to which the gross profits of a franchised automobile dealership from parts, service and collision repair cover the costs of these departments plus the fixed costs of operating the dealership, but does not include expenses pertaining to our head office. For this purpose, fixed operating costs include fixed salaries and benefits, administration costs, occupancy costs, insurance expense, utilities expense and interest expense (other than interest expense relating to floor plan financing) of the dealerships only.Average Capital EmployedAverage capital employed is a measure used by management to determine the amount of capital invested in AutoCanada and is used in the measure of Return on Capital Employed (described below).  Average capital employed is calculated as the average balance of interest bearing debt for the period (including current portion of long term debt, excluding revolving floorplan facilities) and the average balance of shareholders equity for the period.  Management does not include future income tax, non-interest bearing debt, or revolving floorplan facilities in the calculation of average capital employed as it does not consider these items to be capital, but rather debt incurred to finance the operating activities of the Company.Return on Capital EmployedReturn on capital employed is a measure used by management to evaluate the profitability of our invested capital.  As a corporation, management of AutoCanada may use this measure to compare potential acquisitions and other capital investments against our internally computed cost of capital to determine whether the investment shall create value for our shareholders.  Management may also use this measure to look at past acquisitions, capital investments and the Company as a whole in order to ensure shareholder value is being achieved by these capital investments.  Return on capital employed is calculated as EBIT (defined above) divided by Average Capital Employed (defined above).Adjusted Return on Capital EmployedAdjusted return on capital employed is a measure used by management to evaluate the profitability of our invested capital.  As a corporation, management of AutoCanada may use this measure to compare potential acquisitions and other capital investments against our internally computed cost of capital to determine whether the investment shall create value for our shareholders.  Management may also use this measure to look at past acquisitions, capital investments and the Company as a whole in order to ensure shareholder value is being achieved by these capital investments.  Adjusted return on capital employed is calculated as EBIT (defined above) divided by Adjusted Average Capital Employed (defined above).Cautionary Note Regarding Non-GAAP MeasuresEBITDA, EBIT, Free Cash Flow, Adjusted Free Cash Flow, Absorption Rate, Average Capital Employed and Return on Capital Employed 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, of its cash flows from operating, investing and financing activities or as a measure of its liquidity and cash flows. The Company's methods of calculating EBITDA, EBIT, Free Cash Flow, Adjusted Free Cash Flow, Absorption Rate, Average Capital Employed and Return on Capital Employed may differ from the methods used by other issuers. Therefore, the Company's EBITDA, EBIT, Free Cash Flow, Adjusted Free Cash Flow, Absorption Rate, Average Capital Employed and Return on Capital Employed may not be comparable to similar measures presented by other issuers.Additional information about AutoCanada Inc. is available at the Company's website at www.autocan.ca and www.sedar.com.AutoCanada Inc.Consolidated Statements of Comprehensive IncomeFor the Years Ended (in thousands of Canadian dollars except for share and per share amounts) December 31,2011$December 31,2010$Revenue      1,008,858       869,507 Cost of sales      (839,734)       (719,487) Gross profit      169,124       150,020 Operating expenses       (136,846)       (130,237) Operating profit before other income      32,278       19,783    Gain (loss) on disposal of assets      (41)       6 Reversal of impairment of assets      25,543       8,059 Operating profit      57,780       27,848    Finance costs      (9,848)       (9,217) Finance income      1,361       921 Net comprehensive income for the year before taxation      49,293       19,552    Income tax      12,509       4,956 Net comprehensive income for the period       36,784       14,596 Earnings per share   Basic       1.850       0.734 Diluted       1.850       0.734    Weighted average shares   Basic       19,880,930       19,880,930 Diluted       19,880,930       19,880,930 The accompanying notes are an integral part of these consolidated financial statements.Approved on behalf of the Company:(Signed) "Gordon R. Barefoot", Director (Signed) "Robin Salmon", DirectorAutoCanada Inc. Consolidated Statements of Financial Position(in thousands of Canadian dollars) December 31,                 2011  $December 31,                  2010 $January 1,2010$ASSETS   Current assets   Cash and cash equivalents      53,641       37,541       21,528 Trade and other receivables      42,448       32,832       35,323 Inventories      136,869       118,088       108,324 Other current assets      1,120       1,148       1,646        234,078       189,609       166,821 Property and equipment      25,975       25,590       17,600 Intangible assets      66,181       40,018       30,600 Goodwill      380       309       - Other long-term assets      7,609       5,909       2,198 Deferred tax      -       -       3,492        334,223       261,435       220,711 LIABILITIES   Current liabilities   Trade and other payables      32,132       26,622       24,831 Revolving floorplan facilities      150,816       124,609       102,370 Current tax payable      2,046       -       - Current lease obligations      1,204       907       175 Current indebtedness      2,859       277       96        189,057       152,415       127,472 Long-term lease obligations      -       120       289 Long-term indebtedness      20,115       24,974       22,785 Deferred tax      12,056       1,552       -        221,228       179,061       150,546 EQUITY   Share capital      190,435       190,435       190,435 Contributed surplus      3,918       3,918       3,918 Accumulated deficit      (81,358)       (111,979)       (124,188)        112,995       82,374       70,165        334,223       261,435       220,711 The accompanying notes are an integral part of these consolidated financial statements.AutoCanada Inc. Consolidated Statements of Changes in EquityFor the Years Ended (in thousands of Canadian dollars) Share capital$Contributed surplus$Total capital$Accumulated deficit$Equity$Balance,  January 1, 2011        190,435       3,918       194,353       (111,979)       82,374 Net comprehensive income      -       -       -       36,784       36,784 Dividends declared on common shares      -       -       -       (6,163)       (6,163) Balance, December 31, 2011      190,435       3,918       194,353       (81,358)       112,995  Share capital$Contributed surplus$Total capital$Accumulated deficit$Equity$Balance, January 1, 2010        190,435       3,918       194,353       (124,188)       70,165 Net comprehensive income      -       -       -       14,596       14,596 Dividends declared on common shares      -       -       -       (2,387)       (2,387) Balance, December 31, 2010      190,435       3,918       194,353       (111,979)       82,374 The accompanying notes are an integral part of these consolidated financial statements.AutoCanada Inc. Consolidated Statements of Cash FlowsFor the Years Ended (in thousands of Canadian dollars) December 31,2011$December 31,2010$Cash provided by (used in)  Operating activities  Net comprehensive income      36,784       14,596 Income taxes      12,509       4,956 Shared-based payments      302       57 Amortization of property and equipment      4,245       4,171 Amortization of prepaid rent      452       452 Loss (gain) on disposal of property and equipment      40       (6) Gain on reversal of impairment of assets      (25,543)       (8,059) Net change in non-cash working capital      1,238       18,177        30,027       34,344   Investing activities  Business acquisitions      (1,753)       (3,550) Purchases of property and equipment      (2,954)       (10,487) Proceeds on sale of property and equipment      79       64 Prepayments of rent      (2,160)       (4,163) Proceeds on divestiture of dealership      1,464       -        (5,324)       (18,136)    Financing activities  Repayment of long term indebtedness      (2,440)       (4,318) Proceeds from long term indebtedness      -       6,510 Dividends paid      (6,163)       (2,387)        (8,603)       (195)      Increase in cash      16,100       16,013    Cash and cash equivalents at beginning of year      37,541       21,528 Cash and cash equivalents at end of year      53,641       37,541 The accompanying notes are an integral part of these consolidated financial statements.     For further information: Jeff Christie, CA Vice-President, Finance Phone:  (780) 732-7164   Email: jchristie@autocan.ca