Rocky Mountain Dealerships Inc. (TSX:RME) Announces Record Third Quarter
Sales for the Period ended September 30, 2009

- Third quarter revenue increased 56% year over year to $145.8 million

- Third quarter net earnings increased 98% year over year to $4.9 million

- Declares quarterly cash dividend of $0.045 per share

(Stock Symbol "RME" - TSX)

CALGARY , Nov. 10 /CNW/ - Rocky Mountain Dealerships Inc. (" Rocky Mountain " or the "Company") (TSX: RME), a leading Canadian network of full service agricultural and construction equipment dealerships, today reported financial results for the period ended September 30, 2009 . In addition to announcing consecutive record quarters the Company closed two acquisitions effective as of November 1, 2009 , Enns Agri in Winkler, Manitoba and Mayor Equipment in Neepawa, Manitoba.

For the fiscal 2009 third quarter, net sales increased 56% to $145.8 million , compared to net sales of $93.2 million for the third quarter of fiscal 2008. This growth in revenue was due to improved sales from all three of the Company's primary revenue sources. New equipment sales were $69.4 million in the third quarter of fiscal 2009 compared to $46.5 million in the prior year period. Used equipment sales were $46.1 million in the third quarter of 2009, an increase of 119% compared to $21.1 million in the third quarter of fiscal 2008. Revenue generated from product support increased to $29.1 million in the third quarter of fiscal 2009 compared to $23.2 million in the third quarter of fiscal 2008.

Gross profit for the fiscal 2009 third quarter increased 22% to $22.3 million , compared to $18.2 million in the third quarter of the prior year. The Company's gross profit margin was 15.3% in the fiscal 2009 third quarter, 16.0% when normalized for the construction equipment inventory write-down of $1.0 million taken in the quarter due to an exchange rate variance. Gross profit margin has increased from 14.0% in the previous quarter reflecting the improved margins of the acquisitions as we integrate them into the Company's business system and share best practices.

Selling, general and administrative expenses improved to 8.6% of sales in the fiscal 2009 third quarter, 9.3% when normalized for the foreign exchange gain recognized in the quarter of approximately $1.0 million , versus 10.3% of sales, in the third quarter of the prior year. This 100 basis point improvement was 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. In addition, synergies obtained through systems integration and cost cutting measures positively impacted the Company's results.

Operating income in the third quarter 2009 increased to $7.2 million from $4.6 million , an increase of 56.5%, as a result of the increased sales and reduction in operating expenses over the period. For the third quarter of fiscal 2009, EBITDA was $8.6 million compared to $6.7 million in the third quarter of fiscal 2008 notwithstanding the reduction in both the rental and leasing depreciation, of approximately $0.9 million in the quarter, as a result of management's commitment to reducing the size of the rental and lease fleet. The impact from depreciation was offset by the increase in net earnings of approximately $2.4 million over the quarter.

Net income for the third quarter of fiscal 2009 was $4.9 million , or $0.34 per share, compared to net income of $2.5 million , or $0.19 per basic share, for the third quarter of fiscal 2008, which is an increase of approximately 79%.

Cash Flow & Liquidity

The Company ended the third quarter fiscal 2009 in a very solid financial position. The Company's net debt to EBITDA ratio was 0.45, which is below the Company's goal of 1.0x - 1.5x. The bought deal financing the Company completed in the third quarter has decreased the net debt to EBITDA ratio and has positioned the Company well to continue with its expansion strategies. Working capital at the end of the third quarter fiscal 2009 was $74.6 million . Inventory as of September 30, 2009 , was $210.0 million compared to $207.5 million at the end of fiscal 2008. The current inventory reflects increases in new agricultural equipment and parts inventory as a result of increased demand in that segment of the market. New and used construction inventory was down from the end of fiscal 2008.

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 December 31, 2009 , to shareholders of record at close of business on November 30, 2009 .

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 its third quarter results on Tuesday, November 10, 2009 , at 9:00 am MT . Investors interested in participating in the live call can dial 1-877-974-0452. An archived recording of the conference call will be available approximately one hour after the completion of the call on Rocky Mountain's website or by dialing 1-416-640-1917 or 1-877-289-8525, passcode: 4179486 followed by the pound sign. The archive will remain available until Tuesday, November 24, 2009 .

About Rocky Mountain

Rocky Mountain represents one of Canada's largest agriculture and construction equipment dealerships with a total of 24 dealership branches throughout Alberta, Saskatchewan and Manitoba. Rocky Mountain sells, rents and leases new and used construction and agriculture equipment, including the Case Construction and Case IH Agriculture brands, as well as offering product support and finance and insurance products to its customers.

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

    
    Income Statements (Unaudited)
    -------------------------------------------------------------------------
                                 Three       Three        Nine        Nine
                                 Months      Months      Months      Months
                                 Ended       Ended       Ended       Ended
                               September   September   September   September
                                30, 2009    30, 2008    30, 2009    30, 2008
                                   $           $           $           $
                               ----------------------------------------------
    SALES
      New units                   69,353      46,535     207,461     149,851
      Used units                  46,144      21,110     124,122      47,150
      Product support             29,068      23,213      72,545      53,713
      Finance and insurance          527         786       1,403       1,972
      Rental and leases              713       1,598       2,551       4,521
                               ----------------------------------------------
                                 145,805      93,242     408,082     257,207
    COST OF SALES (including
     amortization of $294 and
     $1,136 for the three and
     nine months ended)
     (2008 - $1,239 and $3,555)  123,537      75,053     347,917     210,243
                               ----------------------------------------------

    GROSS PROFIT                  22,268      18,189      60,165      46,964
                               ----------------------------------------------

    EXPENSES
      Selling and
       administrative             12,497      11,650      38,321      30,493
      Interest on short-term
       debt                        1,481       1,034       4,586       3,182
      Interest on long-term debt     237         339         784       1,045
      Amortization of intangible
       assets                          -         758           -       2,274
      Amortization of property,
       plant and equipment           810         579       2,170       1,365
                               ----------------------------------------------
                                  15,025      14,360      45,861      38,359
                               ----------------------------------------------
    EARNINGS BEFORE
     INCOME TAXES                  7,243       3,829      14,304       8,605
                               ----------------------------------------------

    PROVISION FOR (RECOVERY
     OF) INCOME TAXES
      Current                      2,484       1,634       5,038       3,799
      Future                        (182)       (296)       (232)       (956)
                               ----------------------------------------------
                                   2,302       1,338       4,806       2,843
                               ----------------------------------------------
    NET EARNINGS AND
     COMPREHENSIVE INCOME          4,941       2,491       9,498       5,762

    (DEFICIT) RETAINED EARNINGS,
     BEGINNING OF PERIOD           3,339       3,033     (89,116)        328

    REDUCTION OF STATED CAPITAL        -           -      89,116           -

    DIVIDENDS                       (624)       (592)     (1,842)     (1,158)
                               ----------------------------------------------

    RETAINED EARNINGS, END OF
     PERIOD                        7,656       4,932       7,656       4,932
                               ----------------------------------------------
                               ----------------------------------------------
    Earnings per share
      Basic                        $0.34       $0.19       $0.69       $0.46
                               ----------------------------------------------
                               ----------------------------------------------
      Diluted                      $0.34       $0.19       $0.69       $0.45
                               ----------------------------------------------
                               ----------------------------------------------



    Balance Sheets (Unaudited)
    -------------------------------------------------------------------------
                                                  September 30,  December 31,
                                                      2009          2008
                                                        $             $
                                                  ---------------------------

    ASSETS
    CURRENT
      Cash                                              14,952           493
      Accounts receivable and other                     23,369        40,614
      Inventory                                        209,955       207,467
      Prepaid expenses                                     559           392
                                                  ---------------------------
                                                       248,835       248,966

    Property, plant and equipment                       18,260        21,458
    Intangible assets                                        -             -
    Goodwill and other                                   3,902             -
                                                  ---------------------------
                                                       270,997       270,424
                                                  ---------------------------
                                                  ---------------------------
    LIABILITIES
    CURRENT
      Bank indebtedness                                  3,667         5,223
      Accounts payable and accrued liabilities          25,347        29,973
      Floor plan payable                               133,927       150,449
      Deferred revenue                                   2,369         9,437
      Due to related parties                               226         3,691
      Current portion of long-term debt                  8,198         5,910
      Current portion of obligations under
       capital lease                                       496           300
                                                  ---------------------------
                                                       174,230       204,983

    Long-term debt                                      14,424        17,803
    Obligations under capital lease                        720           343
    Future income taxes                                  1,017         1,126
                                                  ---------------------------
                                                       190,391       224,255
                                                  ---------------------------
    CONTINGENCY AND GUARANTEE

    COMMITMENTS

    SHAREHOLDERS' EQUITY
    Common shares                                       70,410       133,879
    Contributed surplus                                  2,540         1,406
    Retained earnings (deficit)                          7,656       (89,116)
                                                  ---------------------------
                                                        80,606        46,169
                                                  ---------------------------
                                                       270,997       270,424
                                                  ---------------------------
                                                  ---------------------------



    RECONCILIATION OF NET EARNINGS TO EBITDA

                               3 Months    3 Months    9 Months    9 Months
                                 ended       ended       ended       ended
                                Sept 30,    Sept 30,    Sept 30,    Sept 30,
                                 2009        2008        2009        2008
                              (unaudited) (unaudited) (unaudited) (unaudited)
                              -----------------------------------------------
    EBITDA                         $           $           $           $

    Net Earnings                   4,941       2,491       9,498       5,762
    Long-term interest               237         339         784       1,045
    Depreciation                     810         579       2,170       1,365
    Amortization of
     intangibles                       -         758           -       2,274
    Income taxes                   2,302       1,338       4,806       2,843
    Rental depreciation              241         816         776       1,881
    Lease depreciation                53         423         360       1,674
                              -----------------------------------------------

    EBITDA                         8,584       6,744      18,394      16,844
                              -----------------------------------------------
                              -----------------------------------------------

    Overhead Absorption             114%         87%         92%         78%
    

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: [phone], Fax [phone]; Investor Relations, Renmark Financial Communications Inc., John Boidman, Vice President, Telephone: [phone], Email: [email protected]