ROCKY MOUNTAIN DEALERSHIPS INC (TSX:RME) ANNOUNCES STRONG FIRST QUARTER RESULTS, ANNOUNCES ORGANIZATIONAL CHANGES

Issued: 18,708,400 shares

CALGARY, May 10 /CNW/ - Rocky Mountain Dealerships Inc. ("Rocky" or the "Company") today reported financial results for the three months ended March 31 ("Q1"), 2011.

  • Revenue increased 31% to $157.6 million from $120.5 million in Q1 2010
  • Net earnings increased 52% from $1.8 million to $2.7 million compared with Q1 2010
  • Same-store revenue growth of $5.1 million in addition to $31.9 million of acquired growth
  • Gross profit margin increase from 16.0% of total revenue in Q1 2010 to 16.3% in 2011
  • Diluted earnings per share increased to $0.14 per share from $0.10 per share in Q1 2010
  • EBITDA increase of 45% from Q1 2010 to $7.1 million

Commenting on the first quarter, Matthew Campbell, Rocky's Executive Chairman of the Board, said, "2011 has started off strong for Rocky due to increases in new equipment sales, used equipment sales and product support sales in the quarter. New equipment deliveries increased in both construction and agriculture. While product support was strong at our construction locations, confidence in the Alberta market was somewhat offset by lingering issues with snow pack and flooding in Manitoba. Our diverse geographic footprint helped us substantially increase our earnings in the quarter in spite of inclement weather."

Mr. Campbell continued, "The late spring thaw will shift some of our typical first quarter product support business to the second quarter. With the current high commodity prices expectations for both construction and agriculture are good for the remainder of 2011."

Organizational Changes

Rocky also announced today that Brian Taschuk tendered his resignation as a director and Chief Executive Officer of Rocky for personal reasons.  M.C. (Matt) Campbell has reassumed the duties of Chief Executive Officer, and will also continue on in his current capacity as Executive Chairman of the Board of Directors.   Brian Taschuk commented, "Although my departure may seem sudden I know the depth Rocky has in their management team and I feel the infrastructure is in place for its continued success."  The Board of Directors would like to thank Brian for his contribution to the success of Rocky and wishes him all the best in his future endeavours.

In addition, Mr. Garrett Ganden, Rocky's Chief Financial Officer, has been appointed Chief Operating Officer and will report directly to Mr. CampbellMr. Ganden, who has done an outstanding job as the company's CFO for the past several years, will retain his CFO responsibilities in his new role until his successor has been announced.

Mr. Derek Stimson remains as President of Rocky and a director of the Company and continues to be the driving force in the development of the company's agriculture equipment business.

Commenting on these changes, CEO Matt Campbell stated "I feel confident that the announced changes will ultimately streamline and strengthen Rocky's management team.  Rocky's prospects for revenue and earnings growth both in the near and longer term continue to remain positive, and I have the utmost confidence in both Derek Stimson and Garrett Ganden, who will continue to assist me in the leadership of our company."

Quarterly Cash Dividend

On May 9, 2011 the Company announced that its 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 June 30, 2011, to shareholders of record at close of business on May 31, 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.

Conference Call

The Company will host a conference call to discuss Q1 results on Tuesday, May 10, 2011, at 9:00 am MT.  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 Mountain's website or by dialling 1-800-642-1687 (toll free) or 1-416-849-0833, passcode: 60862403.  The archive will remain available until Tuesday, May 24, 2011.

About Rocky

Rocky is one of Canada's largest agriculture and construction equipment dealerships with 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.

 
Appendix 1
ROCKY MOUNTAIN DEALERSHIPS INC.

Consolidated Balance Sheet
Expressed in thousands of Canadian dollars (Unaudited)
      March 31,
2011
    December 31,
2010
    January 1,
2010
      $     $     $
                   
ASSETS                  
CURRENT                  
  Cash     15,221     17,139     8,912
  Trade receivables and other     28,053     27,509     24,186
  Inventories     358,693     327,739     247,627
  Prepaid expenses     2,341     1,611     509
      404,308     373,998     281,234
NON-CURRENT                  
Property, plant and equipment     22,343     20,600     19,343
Goodwill     8,655     8,574     4,316
      30,998     29,174     23,659
      435,306     403,172     304,893
LIABILITIES                  
CURRENT                  
  Bank indebtedness     -     -     1,947
  Trade payables, accruals and other     35,475     29,480     30,825
  Floor plan payable     233,558     210,425     158,793
  Deferred revenue     2,616     337     3,154
  Current portion of long-term debt     7,505     6,574     8,545
  Current portion of obligations under finance leases     1,032     825     619
      280,186     247,641     203,883
NON-CURRENT                  
Long-term debt     13,959     13,058     12,968
Obligations under finance leases     1,969     1,387     896
Convertible debentures     28,496     28,411     -
Deferred tax liability     2,181     6,851     1,051
      46,605     49,707     14,915
      326,791     297,348     218,798
                   
SHAREHOLDERS' EQUITY                  
Common shares     76,707     76,144     70,601
Convertible debentures     539     539     -
Contributed surplus     5,134     4,837     3,213
Retained earnings     26,135     24,304     12,281
      108,515     105,824     86,095
      435,306     403,172     304,893

 
 
Appendix 2
ROCKY MOUNTAIN DEALERSHIPS INC.

Consolidated Statement of Net Earnings and Comprehensive Income
Three Month Periods Ended
Expressed in thousands of Canadian dollars (Unaudited)
      March 31,
2011
    March 31,
2010
      $     $
             
REVENUE            
      New units     84,724     61,938
      Used units     46,542     38,087
      Parts     14,693     10,738
      Service     10,614     9,129
      Other     1,006     583
      157,579     120,475
COST OF SALES     131,878     101,244
             
GROSS PROFIT     25,701     19,231
             
EXPENSES            
      Selling, general and administrative     19,687     15,062
      Interest on short-term debt     1,544     1,363
      Interest on long-term debt     867     228
      22,098     16,653
EARNINGS BEFORE INCOME TAXES     3,603     2,578
             
PROVISION FOR (RECOVERY OF) INCOME TAXES            
      Current     5,610     965
      Deferred     (4,670)     (143)
      940     822
NET EARNINGS AND COMPREHENSIVE INCOME     2,663     1,756
             
Earnings per share            
       Basic     0.14     0.10
       Diluted     0.14     0.10

 
 
Appendix 3
RECONCILIATION OF NET EARNINGS TO EBITDA
 
$ In Thousands (unaudited)  
      For the Three Months Ended March 31,
      2011     2010
      $     $
Net earnings    

2,663

    1,756
Long-term interest    

867

    228
Amortization of property, plant and equipment    

1,275

    976
Income taxes    

940

    822
Rental depreciation    

87

    69
Lease depreciation    

-

    16
EBITDA before floor plan interest     5,832     3,867
Floor plan interest     1,309     1,069
EBITDA     7,141     4,936
Overhead Absorption     64%     70%

 

 

 

SOURCE Rocky Mountain Dealerships Inc.

For further information:

Rocky Mountain Dealerships Inc.
Matt Campbell, Chief Executive Officer; or
Garrett Ganden, Chief Operating Officer & Chief Financial Officer
828 - 46th Avenue S.E.
Calgary, Alberta T2G 2A6
Telephone: (403) 243-8600, Fax (403) 243-2264


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