AutoCanada’s “transformation plan” is transforming it into a Canadian-only company.

Executive chairman Paul Antony this week said the Edmonton-based dealership group plans to sell its U.S. stores, saying its 10 locations in Illinois have been classified as a “discontinued operation” and AutoCanada is actively seeking a buyer.

Chief financial officer Sam Cochrane said the company expects the dealerships to be sold “within the year.”

The announcement, which came during the company’s fourth-quarter 2024 earnings call, didn’t come as a complete surprise. Antony noted the American dealerships operated at a loss of $24.2 million in adjusted EBITDA last year and has previously questioned whether AutoCanada has “the competency or the patience” to succeed in the U.S. market.

“I don’t really think we have a view on what normalized results are in the U.S.,” he said in this week’s earnings call. “We’ve tried time and time again to rebuild that business, and it just seems like we probably don’t have the right talent in there.

“Under somebody else’s leadership, that might change. We think there are a lot of people who have a better capability to run that business. … We’ve made a decision to move on from the U.S. market.”

Antony said the company has “a banker in place” to begin the sale process and expects the stores, which represent 17 franchises, to be in demand by U.S. buyers.

“These are all highly desirable brands in the United States,” he said. “Mercedes-Benz, Porsche, Toyota, Honda, Subaru, Hyundai, Kia, General Motors, Chrysler — they’re all great brands. So we think the desirability for these assets will be strong.”

AutoCanada’s downsizing also includes closing its remaining RightRide stores. The company shut down seven of the 13 used-car/subprime finance locations in September in an attempt to “optimize operations,” but decided to shutter the entire division in order to reduce leverage as AutoCanada continues to dig out from 2024’s poor financial performance.

The RightRide operations lost $11 million in adjusted EBITDA last year, the company said.

Antony said AutoCanada’s focus is now exclusively on its “core Canadian dealerships and collision operations,” which include 64 franchised dealerships and 12 stand-alone collision centers.

The belt-tightening is part of a company-wide “transformation plan” as AutoCanada works to return to profitability and pay down its $375 million revolving credit facility. Cochrane said the company’s outstanding balance as of Dec. 31 was $157 million.

Antony said AutoCanada projects its “operational transformation” to provide $100 million in run rate cost savings in 2025. That includes “heightened restrictions on discretionary spending and hiring,” which were put into place in September.

“We think there’s a $100 million opportunity to take out of the business,” he said. “What we’ve told everybody is what we feel comfortable and confident we’re going to get. And I think that there might be more beyond that.”

Overall, the company reported revenues from its continuing operations of $1.26 billion in Q4, down 1.2% from the previous year, with net income of $7.1 million, up from a $16.0 million net loss.

Its discontinued operations, including the U.S. dealerships, posted a net loss of $45.5 million after a loss of $6.6 million the previous year. Cochrane said that included a $27.4 million adjustment from a settlement with the Federal Trade Commission over allegations of fraud by the Illinois stores, announced in December.