Rocky Mountain Dealerships Inc. (TSX:RME) announces strong first quarter
results for the period ended March 31, 2010

    
    (Stock Symbol "RME" - TSX)                    Issued: 17,963,540 shares

    - Q1 Revenues increased 12.4% to $120.5 million

    - Q1 Net Earnings increased 148.8% to $1.8 million

    - Diluted EPS increased from $0.05 to $0.10

    - EBITDA increased by 48.5% to $3.9 million

    - Declares quarterly cash dividend of $0.045 per share
    

CALGARY, May 11 /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 months ended March 31, 2010.

In the first three months of 2010, net sales were $120.5 million compared to $107.2 million for the same period of 2009. New equipment sales were $61.9 million for the three month period of 2010 compared to $47.5 million in the prior year. Used equipment sales were $38.1 million for the three month period of 2010, similar compared to the $39.2 million for the same period of 2009. Revenue generated from product support was $19.9 million in the first quarter of fiscal 2010 compared to $19.1 million for the same period of 2009.

Gross profit for the first quarter of 2010 was $19.2 million compared to $16.1 million for the same period of the prior year. The Company's gross profit margin was 16.0% for the three month period of 2010 versus 15.1% for the same period of the prior year.

Selling, general, and administrative expenses remained consistent at 11.7% of sales for both the first quarter of 2010 and for the same period of the prior year.

Net income for the first quarter of 2010 increased 148.8% to $1.8 million from $0.7 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 first quarter of 2010, EBITDA was $3.9 million compared to $2.6 million for the same period of 2009.

Commenting on the performance of Rocky, Matt Campbell, Chairman and Chief Executive Officer said, "We are pleased with our first quarter results which show continued execution of our stated objectives. The improvements in results, EPS, net income, EBITDA, and margins demonstrates that the management team at Rocky Mountain can deliver all the while maintaining best in peer group SG&A."

Mr. Campbell continued, "we will continue to pursue highly accretive acquisitions and, at the same time, devote even more energy and resources to improve our operating metrics."

Cash Flow & Liquidity

The Company ended the first quarter of 2010 in a very solid financial position. The Company's net debt to EBITDA ratio was 0.87; which positions the Company positively for growth to be within the goal of 1.0x - 1.5x. Working capital at the end of the first quarter of 2010 was $78.4 million. Inventory as of March 31, 2010, was $278.4 million, up from $247.6 million as the end of fiscal 2009. Inventory increases are due to increased large fleet whole goods sales experienced in the quarter and the acquisition completed during the quarter.

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 June 30, 2010, to shareholders of record at close of business on May 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 Q1 results on Tuesday, May 11, 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, May 25, 2010, by dialing 1-416-849-0833 or 1-800-642-1687 (toll free) and entering the passcode: 72259109. 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 and New Holland agriculture brands, as well as offering 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, 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 Sheets
    In thousands of dollars (Unaudited)
    -------------------------------------------------------------------------
                                                      March 31,  December 31,
                                                        2010         2009
                                                          $            $
                                                      -----------------------

    ASSETS
    CURRENT
      Cash                                               8,243         8,912
      Accounts receivable and other                     29,109        24,186
      Inventory                                        278,365       247,627
      Prepaid expenses                                     671           509
                                                      -----------------------
                                                       316,388       281,234

    Property, plant and equipment                       20,025        19,343
    Goodwill                                             5,386         4,086
                                                      -----------------------
                                                       341,799       304,663
                                                      -----------------------
                                                      -----------------------
    LIABILITIES
    CURRENT
      Bank indebtedness                                 10,889         1,947
      Accounts payable and accrued liabilities          30,740        30,595
      Floor plan payable                               186,570       158,793
      Deferred revenue                                   1,210         3,154
      Current portion of long-term debt                  7,815         8,545
      Current portion of obligations under
       capital lease                                       747           619
                                                      -----------------------
                                                       237,971       203,653

    Long-term debt                                      12,599        12,968
    Obligations under capital lease                      1,293           896
    Future income taxes                                  1,037         1,051
                                                      -----------------------
                                                       252,900       218,568
                                                      -----------------------


    SHAREHOLDERS' EQUITY
    Common shares                                       71,978        70,601
    Contributed surplus                                  3,339         2,915
    Retained earnings                                   13,582        12,579
    Accumulated other comprehensive income                   -             -
                                                      -----------------------
                                                        88,899        86,095
                                                      -----------------------
                                                       341,799       304,663
                                                      -----------------------
                                                      -----------------------



                                                                     TABLE 2
    ROCKY MOUNTAIN DEALERSHIPS INC.

    Consolidated Statement of Net Earnings, Comprehensive Income
    and Retained Earnings (Deficit)
    Three Month Period Ended
    In thousands of dollars (Unaudited)
    -------------------------------------------------------------------------
                                                      March 31,     March 31,
                                                        2010          2009
                                                          $             $
                                                      -----------------------

    SALES
      New units                                         61,938        47,484
      Used units                                        38,087        39,222
      Product support                                   19,867        19,053
      Finance and insurance                                411           296
      Rental and leases                                    172         1,095
                                                      -----------------------
                                                       120,475       107,150
    COST OF SALES (including amortization of $85
     (2009 - $476))                                    101,244        91,028
                                                      -----------------------

    GROSS PROFIT                                        19,231        16,122
                                                      -----------------------

    EXPENSES
      Selling, general and administrative               14,031        12,521
      Interest on short-term debt                        1,363         1,436
      Interest on long-term debt                           228           277
      Amortization of property, plant and equipment        976           653
                                                      -----------------------
                                                        16,598        14,887
                                                      -----------------------
    EARNINGS BEFORE INCOME TAXES                         2,633         1,235
                                                      -----------------------

    PROVISION FOR (RECOVERY OF) INCOME TAXES
      Current                                              965           506
      Future                                              (143)            1
                                                      -----------------------
                                                           822           507
                                                      -----------------------
    NET EARNINGS AND COMPREHENSIVE INCOME                1,811           728

    RETAINED EARNINGS (DEFICIT), BEGINNING OF PERIOD    12,579       (89,116)

    DIVIDENDS                                             (808)         (595)
                                                      -----------------------

    RETAINED EARNINGS (DEFICIT), END OF PERIOD          13,582       (88,983)
                                                      -----------------------
                                                      -----------------------

    Earnings per share
      Basic                                               0.10          0.06
                                                      -----------------------
                                                      -----------------------
      Diluted                                             0.10          0.05
                                                      -----------------------
                                                      -----------------------



                                                                     TABLE 3
    RECONCILIATION OF NET EARNINGS TO EBITDA
    (IN THOUSANDS)
                                                     3 months      3 months
                                                       ended         ended
                                                      March 31,     March 31,
                                                        2010          2009
                                                    (unaudited)   (unaudited)
                                                          $             $

    Net earnings                                         1,811           728
    Long-term interest                                     228           277
    Depreciation                                           976           653
    Income taxes                                           822           507
    Rental depreciation                                     69           147
    Lease depreciation                                      16           329
                                                      -----------------------
    EBITDA                                               3,922         2,641
                                                      -----------------------
                                                      -----------------------
    Overhead Absorption                                    70%           74%
    

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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