Rocky Mountain Dealerships Inc. announces record third quarter results

Achieves strong results in all key operating metrics; EBITDA* increase of 58.3%

CALGARY, Nov. 10, 2011 /CNW/ - Rocky Mountain Dealerships Inc. (TSX:RME) today reported financial results for the three and nine months ended September 30, 2011.

Third Quarter Highlights:

  • Increased revenues by 25.5% to $213.9 million as compared to the same period in 2010.
  • Increased gross profit as a percentage of sales to 16.5% from 15.3% in 2010.
  • Generated Normalized Diluted Earnings per Share* of $0.35.
  • EBITDA* increased by 58.3% to $12.0 million.
  • Cash flow from Net Earnings* of $12.0 million, up from $5.9 million in 2010.
        * Non-IFRS measurements are defined and discussed further in the Management's Discussion and Analysis for the three and nine month periods ended September 30, 2011, which can be found at www.sedar.com.

"Favorable commodity prices and harvesting conditions in Western Canada coupled with growth from our acquisitions helped drive stronger sales, which, in turn, improved our earnings over the prior year," said Rocky CEO Matt Campbell.  "Our people worked hard to provide the equipment, parts and service that our customers needed in this period.  Our company-wide commitment to being a reliable partner for our customers is the largest factor in this success."

"Although we have seen some positive signs from our Manitoba stores, the Manitoba region is still recovering from the flooding and wet weather that has impacted much of the province over the past two years."

"Construction market deliveries on a rolling 12 month basis have continued to improve.  Manufacturer delivery delays did result in somewhat slowed growth for the third quarter, but at current production and demand levels, our short and mid-term outlooks for the construction market continue to be positive."

"Our focus during the quarter continued to be driving company efficiency and consistency throughout our large network.  Stronger sales performance from our legacy stores combined with our deliberate pause in acquisitions, added strength to our balance sheet, including the net addition of $9.2 million of cash in the quarter."

Quarterly Cash Dividend

On November 9, 2011, Rocky's Board of Directors declared a dividend of $0.045 per common share on the Company's outstanding common shares.  The common share dividend is payable on December 30, 2011 to shareholders of record at close of business on November 30, 2011.

This dividend is designated by Rocky to be an eligible dividend for the purposes of the Income Tax Act (Canada) and any similar provincial or territorial legislation.  An enhanced dividend tax credit applies to eligible dividends paid to Canadian residents.  Shareholders should consult their tax or financial advisor for further information regarding their specific tax concerns.

Conference Call

The Company will host a conference call to discuss its third quarter results on Thursday, November 10, 2011, at 9:00 a.m. Mountain Time.  Investors interested in participating in the live call can dial 1-888-231-8191 (toll free) or 1-647-427-7450.  An archived recording of the call will be available approximately two hours after its completion on Rocky's website or by calling 1-855-859-2056 (toll free) or 1-416-849-0833, passcode: 15956681.  The archive will remain available until Thursday, November 24, 2011.

Caution regarding forward-looking statements

This news release may contain "forward-looking" statements within the meaning of applicable securities legislation which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Rocky or industry results, to be materially different from any future results, events, expectations, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements typically contain words or phrases such as "may", "outlook", "objective", "intend", "estimate", "anticipate", "should", "could", "would", "will", "expect", "believe", "plan" and other similar terminology suggesting future outcomes or events. Forward-looking statements involve numerous assumptions and should not be read as guarantees of future performance or results. Such statements will not necessarily be accurate indications of whether or not such future performance or results will be achieved. Readers should not unduly rely on forward-looking statements as a number of factors, many of which are beyond the control of Rocky, could cause actual performance or results to differ materially from the performance or results discussed in the forward-looking statements, including, but not limited to; general economic conditions; business cyclicality, construction outlook in both the short and medium term; relationships with manufacturers; access to products, reliance on key personnel and competition with existing business. Although the forward-looking statements contained in this news release are based upon what management of Rocky believes are reasonable assumptions, Rocky cannot assure investors that actual performance or results will be consistent with these forward-looking statements. These statements reflect current expectations regarding future events and operating performance and are based on information currently available to Rocky's management. There can be no assurance that the plans, intentions or expectations upon which these forward-looking statements are based will occur. All forward-looking statements in this news release are qualified in their entirety by the aforementioned cautionary statements and those set forth in Rocky's management's discussion and analysis  for the three and nine months ended September 30, 2011 and Rocky's annual information form dated March 28, 2011 available on SEDAR at www.sedar.com. These forward-looking statements and outlook are made as of the date of this news release and, except as required by applicable law, Rocky assumes no obligation to update or revise them to reflect new events or circumstances.

About Rocky

Rocky is one of Canada's largest agriculture and construction equipment dealerships with 37 branches throughout Alberta, Saskatchewan and Manitoba. Rocky sells, rents, and leases new and used construction and agriculture equipment and offers product support, and finance to its customers.

Additional information on Rocky is available at www.rockymtn.com and on SEDAR at www.sedar.com.

Consolidated Balance Sheet Summary
Expressed in thousands of Canadian dollars except shares outstanding(Unaudited)

      September 30,
2011
    December 31,
2010
    September 30,
2010
                   
Current assets     387,549     373,998     323,426
Property, plant and equipment     22,205     20,600     20,280
Goodwill     9,961     8,482     7,601
Total assets     419,715     403,080     351,307
                   
Current liabilities     249,551     247,641     205,802
Long-term debt     13,063     13,058     12,650
Obligations under finance leases     1,770     1,387     1,308
Convertible debenture     28,670     28,411     28,329
Deferred income taxes     5,792     6,707     3,996
Derivative financial instruments     972     -     -
Total liabilities     299,818     297,204     252,085
Shareholders' equity     119,897     105,876     99,222
Total liabilities and equity     419,715     403,080     351,307
Shares outstanding     18,768,399     18,427,250     18,332,849


Selected Financial Information
Expressed in thousands of Canadian dollars except per share amounts and percentages (Unaudited)


        For the three months ended September 30,
         2011
$
       2010
$
       Change
$
       Change
%
Sales                                
 New equipment       90,523       68,298       22,225       32.5
 Used equipment       78,468       68,694       9,774       14.2
 Parts       30,003       21,164       8,839       41.8
 Service       13,807       11,184       2,623       23.5
 Other       1,073       1,138       (65)       (5.7)
Total sales       213,874       170,478       43,396       25.5
Cost of sales       178,546       144,434       34,112       23.6
Gross profit       35,328       26,044       9,284       35.6
Gross profit percentage       16.5%       15.3%       -       1.2
Expenses                                
 Selling, general and administrative       22,944       18,210       4,734       26.0
 Interest on short-term debt       2,099       1,725       374       21.7
 Interest on long-term debt       870       662       208       31.4
Earnings from operations       9,415       5,447       3,968       72.8
Income taxes       2,294       1,745       549       31.5
Net earnings       7,121       3,702       3,419       92.4
Net earnings per share                                
 Basic       0.38       0.20       0.18       90.0
 Diluted       0.34       0.20       0.14       70.0
Dividends per share       0.045       0.045       -       -
EBITDA(*)       11,996       7,578       4,418       58.3
Operating SG&A (*) as % of sales       9.9%       9.9%       -       -

(*) Non-IFRS measurements are defined and discussed further in the Management's Discussion and Analysis for the three and nine month periods ended September 30, 2011, which can be found at www.sedar.com. 

 

SOURCE Rocky Mountain Dealerships Inc.

For further information:

Rocky Mountain Dealerships Inc.
Matt Campbell, Chief Executive Officer; or
Garrett Ganden, Chief Operating Officer
#301, 3345 - 8th Street S.E.
Calgary, Alberta T2G 3A4
Telephone: (403) 265-7364, Fax (403) 214-5644


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