Rocky Mountain Dealerships Inc. (TSX:RME) announces fourth quarter and full
year results for period ended December 31, 2009

    
    -   Full year 2009 revenues increased 38% to $555.8 Million

    -   Full year 2009 Earnings from Operations increased 21% to
        $22.2 million

    -   Full year 2009 EBITDA grew to $27.7 million

    -   Declares quarterly cash dividend of $0.045 per share
    

(Stock Symbol "RME" - TSX)

CALGARY, March 9 /CNW/ - Rocky Mountain Dealerships Inc. ("Rocky Mountain" or the "Company"), a leading Canadian network of full service agricultural and construction equipment dealerships, today reported financial results for the three month and full year periods ended December 31, 2009.

In 2009, net sales were $147.7 million and $555.8 million for the three and twelve months ended, compared to $146.9 million and $404.1 million for the same periods of 2008. This growth in annual revenue was due to improved sales from all three of the Company's primary revenue sources. New equipment sales were $92.9 million and $300.9 million for the three and twelve month periods for 2009 compared to $90.5 million and $240.4 million in the prior periods. Used equipment sales were $32.5 million and $156.6 for the three and twelve month periods of 2009, relatively similar compared to $32.8 million and $79.9 million for the same periods of 2008. Revenue generated from product support was $21.2 million and $93.7 million in the three and twelve month periods of fiscal 2009 compared to $22.0 million and $75.7 million for the same period of 2008.

Gross profit for the three and twelve month periods of 2009 were $24.5 million and $84.7 million compared to $24.6 million and $71.6 million for the same periods of the prior year. The Company's gross profit margin was 16.6% and 15.2% for three and twelve month periods of 2009 versus 16.8% and 17.7% for the same periods of the prior year.

Selling, general, and administrative improved to 9.4% of sales for both the three months and twelve month periods of 2009 versus 10.1% and 11.2% of sales, for the same periods of the prior year. The improvement in SG&A was primarily due to the Company's ability to achieve the benefits of economies of scale following acquisitions completed in 2008 and 2009, allowing expenses to be allocated over a larger group of dealerships, and a reduction of expenses incurred to consolidate the acquired companies.

Operating income for the three and twelve month periods of 2009 increased 5% and 21% to $7.9 million and $22.2 million from $7.5 million and $18.4 million in the prior year period. This is due to strong organic growth on the agricultural side of the business, acquired revenue growth and improved operating efficiencies.

The Company believes earnings before long-term interest, taxes depreciation and amortization ("EBITDA") is a useful metric to monitor its operating performance. Refer to Table 3 below for reconciliation of net earnings to EBITDA. For the three and twelve month periods of 2009, EBITDA was $9.3 million and $27.7 million compared to $9.4 million and $26.2 million for the same periods of 2008.

Net earnings for the three and twelve month periods were $5.7 million and $15.2 million, or $0.35 and $1.03 per basic share, compared to a net loss of $93.5 million and $87.7 million, or ($7.34) and ($6.88) per basic share, for the same periods of 2008.

Commenting on the performance of Rocky, Matt Campbell Chairman and Chief Executive Officer of Rocky Mountain Dealerships said, "We are absolutely pleased with our performance in Q4 and fiscal year 2009. In spite of the worst financial crisis ever, we came through the year with growth, profits and increased market share. Our fiscal year sales grew 38% over fiscal year 2008, and our earnings from operations grew 21%. A very successful result in a trying year."

Mr. Campbell continued, "We completed accretive acquisitions in the Prairie market and recently announced the acquisition of Roydale New Holland, in Red Deer, that opens up a whole new channel of acquisition targets, we are truly excited about this new opportunity. All the while, we have maintained our operating efficiencies and kept expenses under control while continuing to increase the margins of our acquired stores. Our SG&A at 9.4% is the lowest in our peer group. We will continue to deliver growth and profits to further invest in the sector according to our stated objectives. All of this was achieved in the face of terrific stress in the construction and oilfield sectors, a true testament to the strength of the Rocky Mountain business model."

Cash Flow & Liquidity

The Company ended fiscal 2009 in a very solid financial position. The Company's net debt to EBITDA ratio was 0.58; which positions the Company positively for growth to be within the goal of 1.0x - 1.5x. Working capital at the end of fiscal 2009 was $77.6 million. Inventory as of December 31, 2009, was $247.6 million, up from $207.5 million as the end of fiscal 2008. This increase in inventory is a result of the Enns and Mayor acquisitions' and timing of deliveries at year-end. Management is comfortable with its inventory position and valuation.

Quarterly Cash Dividend

The Company announces that the Board of Directors of Rocky Mountain declared a dividend of $0.045 per common share on the Company's outstanding common shares. The common share dividend is payable on March 31, 2010, to shareholders of record at close of business on March 18, 2010.

This dividend is designated by Rocky Mountain to be an eligible dividend for purpose 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.

Conference Call

The Company will host a conference call to discuss their fourth quarter and full year results on Tuesday, March 9, 2010, at 9:00 am MT. Investors interested in participating in the live call can dial 1-888-231-8191. A telephone replay will be available approximately two hours after the call concludes and will be available until March 23, 2010, by dialing 1-416-849-0833 or 1-800-642-1687 (toll free) and entering the passcode: 57377758. A live webcast of the conference call will be accessible on Rocky Mountain's website at www.rockymtn.com.

About Rocky Mountain

Rocky Mountain represents one of Canada's largest agriculture and construction equipment dealerships with a total of 25 dealership branches throughout Alberta, Saskatchewan and Manitoba. Rocky Mountain sells, rents and leases new and used construction and agriculture equipment, including the Case Construction, Case IH Agriculture brands and New Holland, as well as offering product support and finance and insurance products to its customers. In addition, also distributes equipment from a number of other manufacturers, including but not limited to, Terex, Dynapac, Takeuchi, Leeboy, Bourgault, Claas and Kuhn-Knight.

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

    
                                                                     TABLE 1
    ROCKY MOUNTAIN DEALERSHIPS INC.


    Consolidated Balance Sheet
    As at December 31,

    -------------------------------------------------------------------------
                                                         2009        2008
                                                           $           $
                                                      -----------------------
                                                      (unaudited) (unaudited)
    ASSETS
    CURRENT
      Cash and cash equivalents                            8,912         493
      Accounts receivable and other                       24,186      40,614
      Inventory                                          247,627     207,467
      Prepaid expenses                                       509         392
                                                      -----------------------
                                                         281,234     248,966

    Property, plant and equipment                         19,343      21,458
    Goodwill                                               4,086           -
                                                      -----------------------
                                                         304,663     270,424
                                                      -----------------------
                                                      -----------------------
    LIABILITIES
    CURRENT
      Bank indebtedness                                    1,947       5,223
      Accounts payable and accrued liabilities            30,595      29,973
      Floor plan payable                                 158,793     150,449
      Deferred revenue                                     3,154       9,437
      Due to related parties                                   -       3,691
      Current portion of long-term                         8,545       5,910
      Current portion of obligations under capital lease     619         300
                                                      -----------------------
                                                         203,653     204,983

    Long-term debt                                        12,968      17,803
    Obligations under capital lease                          896         343
    Future income taxes                                    1,051       1,126
                                                      -----------------------
                                                         218,568     224,255
                                                      -----------------------

    SHAREHOLDERS' EQUITY
    Common shares                                         70,601     133,879
    Contributed surplus                                    2,915       1,406
    Retained earnings (deficit)                           12,579     (89,116)
                                                      -----------------------
                                                          86,095      46,169
                                                      -----------------------
                                                         304,663     270,424
                                                      -----------------------
                                                      -----------------------



                                                                     TABLE 2
    ROCKY MOUNTAIN DEALERSHIPS INC.

    Consolidated Statement of Net Earnings (Loss)
    and Comprehensive Income (Loss)
    Years Ended December 31, 2009 and 2008
    -------------------------------------------------------------------------
                                                         2009        2008
                                                           $           $
                                                      -----------------------
    SALES                                             (unaudited) (unaudited)
      New units                                          300,924     240,363
      Used units                                         156,648      79,908
      Product support                                     93,748      75,726
      Finance and insurance                                2,047       2,404
      Rental and leases                                    2,388       5,711
                                                      -----------------------
                                                         555,755     404,112
    COST OF SALES (including amortization of $1,345
     for the year (2008 - $4,363))                       471,067     332,539
                                                      -----------------------

    GROSS PROFIT                                          84,688      71,573
                                                      -----------------------

    EXPENSES
      Selling and administrative                          52,224      45,272
      Interest on short-term debt                          6,127       4,441
      Interest on long-term debt                           1,024       1,389
      Amortization of intangible assets                        -       3,032
      Amortization of property, plant and equipment        3,068       2,045
                                                      -----------------------
                                                          62,443      56,179
                                                      -----------------------
    EARNINGS BEFORE OTHER ITEMS AND INCOME TAXES          22,245      15,394
                                                      -----------------------
    OTHER ITEMS
      Goodwill impairment                                      -     (84,837)
      Intangible asset impairment                              -     (17,950)
                                                      -----------------------
                                                               -    (102,787)
                                                      -----------------------
    EARNINGS(LOSS) BEFORE INCOME TAXES                    22,245     (87,393)
                                                      -----------------------

    PROVISION FOR (RECOVERY OF) INCOME TAXES
      Current                                              7,221       6,346
      Future                                                (198)     (6,045)
                                                      -----------------------
                                                           7,023         301
                                                      -----------------------
    NET EARNINGS (LOSS) AND COMPREHENSIVE INCOME (LOSS)   15,222     (87,694)

    RETAINED EARNINGS, BEGINNING OF YEAR                 (89,116)        328

    REDUCTION OF STATED CAPITAL                           89,116           -

    DIVIDENDS                                             (2,643)     (1,750)
                                                      -----------------------

    RETAINED EARNINGS (DEFICIT), END OF YEAR              12,579     (89,116)
                                                      -----------------------
                                                      -----------------------
    EARNINGS (LOSS) PER SHARE
      Basic                                                $1.03      $(6.88)
                                                      -----------------------
                                                      -----------------------
      Diluted                                              $1.02      $(6.88)
                                                      -----------------------
                                                      -----------------------


                                                                     TABLE 3
    RECONCILIATION OF NET EARNINGS (LOSS) TO EBITDA
    IN THOUSANDS

                               3 months    3 months   12 months   12 months
                                 ended       ended       ended       ended
                               December    December    December    December
                                  31,         31,         31,         31,
                                 2009        2008        2009        2008
                              (unaudited) (unaudited) (unaudited) (unaudited)
                                   $           $           $           $

    Net earnings (loss)            5,724     (93,456)     15,222     (87,694)

      Long-term interest             240         344       1,024       1,389

      Depreciation                   898         681       3,068       2,045

      Amortization of intangible
       assets                          -         758           -       3,032

    Goodwill impairment                -      84,837           -      84,836
    Impairment of intangible assets    -      17,950           -      17,950
    Income taxes                   2,217      (2,542)      7,023         301
    Rental depreciation              173         466         949       2,347
    Lease depreciation                36         341         396       2,016
                               ----------------------------------------------
    EBITDA                         9,288       9,379      27,682      26,222
                               ----------------------------------------------
                               ----------------------------------------------
    Overhead Absorption              67%         81%         84%         79%
    

SOURCE Rocky Mountain Dealerships Inc.

For further information: For further information: Rocky Mountain Dealerships Inc., M.C. (Matt) Campbell, Chairman and Chief Executive Officer; Brian Taschuk, Chief Operating Officer; or Garrett Ganden, Chief Financial Officer, 828 - 46th Avenue S.E., Calgary, Alberta, T2G 2A6, Telephone: (403) 243-8600, Fax (403) 243-2264; Investor Relations, Renmark Financial Communications Inc., John Boidman, Vice President, Telephone: (514) 939-3989, Email: jboidman@renmarkfinancial.com


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