Rocky Mountain Dealerships Inc. (TSX:RME) announces second quarter results
for the periods ended June 30, 2010

    
    -   Second quarter ("Q2") revenues of $146.2 million and six months ended
        ("YTD") of $266.6 million

    -   Q2 net earnings of $3.1 million and YTD of $4.9 million

    -   Q2 diluted earnings per share of $0.17 and YTD of $0.27

    -   Q2 EBITDA of $5.8 million and YTD of $9.7 million

    -   Declares quarterly cash dividend of $0.045 per share
    

Issued: 18,257,849 shares

(Stock Symbol "RME" - TSX)

CALGARY, Aug. 10 /CNW/ - Rocky Mountain Dealerships Inc. ("Rocky Mountain" or the "Company"), a leading Canadian network of full service agriculture and construction equipment dealerships, today reported financial results for the three and six month periods ended June 30, 2010.

For Q2 2010, net sales were $146.2 million compared to $155.1 million for the same period of 2009. New equipment sales were $82.1 million for the Q2 2010 compared to $90.6 million in the prior year. Used equipment sales were $37.0 million for the Q2 2010, compared to $38.8 million for the same period of 2009 and YTD 2010 $75.1 million compared with $78.0 from the prior year. Revenues generated from product support were $26.0 million in Q2 2010 compared to $24.4 million for the same period of 2009.

Gross profit for Q2 2010 was $23.0 million compared to $21.8 million for the same period of the prior year. The Company's gross profit margin was 15.7% for the three month period of 2010 versus 14.0% for the same period of the prior year.

Selling, general, and administrative expenses increased to 10.8% of sales in Q2 2010 from 8.6% in the prior year.

Net income for Q2 2010 decreased to $3.1 million from $3.8 million in Q2 of 2009. The reductions in new and used sales revenue and net income are primarily due to the negative impacts of wet, unfavourable weather conditions experienced throughout the Canadian prairie provinces in Q2. Net income for YTD 2010 increased to $4.9 million from $4.6 million in the same period of 2009.

The Company believes earnings before long-term interest, taxes, depreciation and amortization ("EBITDA") is a useful metric to monitor its operating performance. Refer to the appendices for reconciliation of net earnings to EBITDA. For the second quarter of 2010, EBITDA was $5.8 million compared to $7.2 million for the same period of 2009. EBITDA for YTD 2010 decreased to $9.7 million from $9.8 million in the same period of 2009.

Commenting on the performance of Rocky Mountain, Matt Campbell, Chairman and Chief Executive Officer said, "The unseasonably wet weather in the second quarter adversely affected the operations of many of our construction and agriculture customers, and, consequently, resulted in lower revenues in Q2 2010 from the same period in 2009. However, the strength of our management and employees continued as evidenced in the improvement in gross profit margins from the same period in the prior year; the recent improvement in grain prices coupled with very high potential yields in much of our market area gives us optimism for a favourable second half."

Cash Flow & Liquidity

The Company's net debt to EBITDA ratio was 1.12; which positions the Company positively for growth to be within the goal of 1.0x - 1.5x. Working capital at the end of the second quarter of 2010 was $85.5 million. Inventory as of June 30, 2010, was $289.8 million, up from $247.6 million as the end of fiscal 2009. Inventory increases are due to the purchase and settlement of equipment units near the end of Q2 2010 in order to minimize carrying costs and to utilize available manufacturer incentives. Subsequent to the end of Q2, the Company issued 31,500 debentures for gross proceeds of $31.5 million. This additional cash strongly positions the Company to continue its growth organically and through acquisitions.

Quarterly Cash Dividend

The Company announced 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 September 30, 2010, to shareholders of record at close of business on August 31, 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 Q2 results on Tuesday, August 10, 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 Tuesday, August 24, 2010, by dialing 1-416-849-0833 or 1-800-642-1687 (toll free) and entering the passcode: 90706789. 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 29 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 and New Holland agriculture brands, as well as offers product support and finance and insurance products to its customers. In addition, Rocky Mountain also distributes equipment from a number of other manufacturers, including but not limited to, Terex, Dynapac, Doosan, Takeuchi, Leeboy, Kawasaki, Metso, 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.

    
    ROCKY MOUNTAIN DEALERSHIPS INC.                               APPENDIX 1

    Consolidated Balance Sheets
    In thousands of dollars (Unaudited)
    -------------------------------------------------------------------------
                                                        June 30, December 31,
                                                           2010         2009
                                                              $            $
                                                     ------------------------
    ASSETS
    CURRENT
      Cash                                                5,259        8,912
      Accounts receivable and other                      23,523       24,186
      Inventory                                         289,779      247,627
      Prepaid expenses                                      666          509
                                                     ------------------------
                                                        319,227      281,234

    Property, plant and equipment                        20,389       19,343
    Goodwill                                              6,795        4,086
                                                     ------------------------
                                                        346,411      304,663
                                                     ------------------------
                                                     ------------------------

    LIABILITIES
    CURRENT
      Bank indebtedness                                  12,567        1,947
      Accounts payable and accrued liabilities           29,300       30,595
      Floor plan payable                                179,363      158,793
      Deferred revenue                                    4,139        3,154
      Current portion of long-term debt                   7,653        8,545
      Current portion of obligations under capital
       lease                                                656          619
                                                     ------------------------
                                                        233,678      203,653

    Long-term debt                                       13,629       12,968
    Obligations under capital lease                       1,677          896
    Future income taxes                                   3,224        1,051
                                                     ------------------------
                                                        252,208      218,568
                                                     ------------------------

    SHAREHOLDERS' EQUITY
    Common shares                                        74,538       70,601
    Contributed surplus                                   3,783        2,915
    Retained earnings                                    15,882       12,579
    Accumulated and other comprehensive income                -            -
                                                     ------------------------
                                                         94,203       86,095
                                                     ------------------------
                                                        346,411      304,663
                                                     ------------------------
                                                     ------------------------



    ROCKY MOUNTAIN DEALERSHIPS INC.                               APPENDIX 2

    Consolidated Statements of Earnings, Comprehensive Income and Retained
     Earnings (Deficit)
    Three and Six Month Periods Ended
    In thousands of dollars, except per share amounts (Unaudited)
    -------------------------------------------------------------------------
                                Three        Three          Six          Six
                               Months       Months       Months       Months
                                Ended        Ended        Ended        Ended
                              June 30,     June 30,     June 30,     June 30,
                                 2010         2009         2010         2009
                                    $            $            $            $
                           --------------------------------------------------
    SALES
      New units                82,065       90,624      144,003      138,108
      Used units               36,981       38,756       75,068       77,978
      Product support          25,948       24,424       45,815       43,477
      Finance and insurance       896          580        1,307          876
      Rental and leases           279          743          451        1,838
                           --------------------------------------------------
                              146,169      155,127      266,644      262,277
    COST OF SALES
     (including
     amortization of $175
     and $260 for the
     three and six months
     ended) (2009 - $366
     and $842)                123,213      133,352      224,456      224,380
                           --------------------------------------------------

    GROSS PROFIT               22,956       21,775       42,188       37,897
                           --------------------------------------------------

    EXPENSES
      Selling and
       administrative          15,856       13,303       29,887       25,824
      Interest on short-
       term debt                1,506        1,669        2,869        3,105
      Interest on long-
       term debt                  231          270          459          547
      Amortization of
       property, plant
       and equipment            1,059          707        2,035        1,360
                           --------------------------------------------------
                               18,652       15,949       35,250       30,836
                           --------------------------------------------------
    EARNINGS BEFORE
     INCOME TAXES               4,304        5,826        6,938        7,061
                           --------------------------------------------------

    PROVISION FOR (RECOVERY
     OF) INCOME TAXES
      Current                    (990)       2,048          (25)       2,554
      Future                    2,186          (51)       2,043          (50)
                           --------------------------------------------------
                                1,196        1,997        2,018        2,504
                           --------------------------------------------------
    NET EARNINGS AND
     COMPREHENSIVE INCOME       3,108        3,829        4,920        4,557

    RETAINED EARNINGS
     (DEFICIT), BEGINNING
     OF PERIOD                 13,582      (88,983)      12,579      (89,116)

    REDUCTION OF STATED
     CAPITAL                        -       89,116            -       89,116

    DIVIDENDS                    (808)        (624)      (1,617)      (1,219)
                           --------------------------------------------------

    RETAINED EARNINGS, END
     OF PERIOD                 15,882        3,338       15,882        3,338
                           --------------------------------------------------
                           --------------------------------------------------
    EARNINGS PER SHARE
      Basic                $     0.17   $     0.28   $     0.27   $     0.34
                           --------------------------------------------------
                           --------------------------------------------------
      Diluted              $     0.17   $     0.28   $     0.27   $     0.34
                           --------------------------------------------------
                           --------------------------------------------------



    RECONCILIATION OF NET EARNINGS TO EBITDA                      APPENDIX 3

    In Thousands

                 3 months ended 3 months ended 6 months ended 6 months ended
                  June 30, 2010  June 30, 2009  June 30, 2010  June 30, 2009
                     (unaudited)    (unaudited)    (unaudited)    (unaudited)
                              $              $              $              $

    Net earnings          3,108          3,829          4,920          4,577
    Long-term interest      231            270            459            547
    Depreciation          1,059            707          2,035          1,360
    Income taxes          1,196          1,997          2,018          2,504
    Rental depreciation     166            206            234            307
    Lease depreciation        9            160             26            535
                         ----------------------------------------------------
    EBITDA                5,769          7,169          9,692          9,830
                         ----------------------------------------------------
                         ----------------------------------------------------
    

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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