Nov. 9, 2010 (Canada NewsWire Group) --
Issued: 18,427,250 shares
CALGARY, Nov. 9 /CNW/ - Rocky Mountain Dealerships Inc. ("Rocky Mountain" or the "Company") today reported financial results for the three and nine month periods ended September 30, 2010.
- Third quarter ("Q3") revenues of $170.5 million (2009 - $145.8 million) and nine months ended ("YTD") of $437.1 million (2009 - $408.1 million)
- Q3 net earnings of $3.8 million (2009 - $4.9 million) and YTD of $8.7 million (2009 - $9.5 million)
- Q3 diluted earnings per share of $0.20 (2009 - $0.34) and YTD of $0.48 (2009 - $0.69)
- Q3 EBITDA of $7.7 million (2009 - $8.6 million) and YTD of $17.4 million (2009 - $18.4 million)
- Declares quarterly cash dividend of $0.045 per share
- Announces upcoming transition of current Chief Executive Officer ("CEO"), Matt Campbell to Executive Chairman of the Board of Directors of the Company and Brian Taschuk, Chief Operating Officer ("COO") as successor CEO, effective January 1, 2011
New equipment sales were $68.3 million for Q3 2010 compared to $69.4 million in the prior year. Used equipment sales were $68.7 million for Q3 2010, compared to $46.1 million for the same period of 2009. Revenues generated from product support were $32.3 million in Q3 2010 compared to $29.1 million for the same period of 2009.
Gross profit for the third quarter of 2010 was $26.0 million compared to $22.3 million for the same period of the prior year. The Company's gross profit margin was consistent at 15.3% in Q3 2010 compared with 2009.
Selling, general, and administrative expenses increased to $17.0 million in Q3 2010 from $12.5 million in the prior year. This increase arose from the addition of 9 new locations since Q3 of 2009 as well as the foreign exchange gain of approximately $1.0 million recognized in Q3 of 2009.
The increased selling, general and administrative expenses reduced net income over the quarter to $3.8 million. As well, the unfavourable weather conditions experienced throughout the Canadian prairie provinces in the second quarter, and beginning of Q3 2010, reduced product support revenues in July and early August affecting the gross profit achieved.
CEO Transition
Mr. Campbell is transitioning from his role as CEO to Executive Chairman of the Board of Directors of the Company. Mr. Taschuk, who is currently COO of the Company, will transition into the CEO role. The transitions are expected to be completed and become effective on January 1, 2011.
Commenting on his transition Mr. Campbell stated, "This is an exciting time for the Company as we continue to grow. As Executive Chairman, I will take a less active role in the day-to-day operations, but it will allow me to continue to provide value for our shareholders. Mr. Taschuk has extensive experience with the Company, and the agriculture and construction industries, and we anticipate his transition from COO to CEO to be relatively seamless. We continue to have positive outlooks for the Company as we progress and move through this transition."
Cash Flow & Liquidity
During the quarter, the Company secured $31.5 million in cash through the issuance of convertible debentures. Working capital at the end of the third quarter of 2010 was $117.9 million. Inventory as of September 30, 2010, was $273.8 million, up from $247.6 million as the end of fiscal 2009.
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 December 31, 2010, to shareholders of record at close of business on November 30, 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 Q3 results on Tuesday, November 9, 2010, 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 conference call will be available approximately two hours after the call concludes and will be available until Tuesday, November 23, 2010, by dialing 1-416-849-0833 or 1-800-642-1687 (toll free) and entering the passcode: 21298955. A live webcast of the conference call will be accessible on Rocky Mountain's website at www.rockymtn.com.
About Rocky Mountain
Rocky Mountain is one of Canada's largest agriculture and construction equipment dealerships with 34 branches throughout Alberta, Saskatchewan and Manitoba. Rocky Mountain sells, rents, and leases new and used construction and agriculture equipment and offers product support, and finance to its customers.
Additional information on Rocky Mountain is available on our website at www.rockymtn.com and on SEDAR at www.sedar.com.
| Appendix 1 | ||
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ROCKY MOUNTAIN DEALERSHIPS INC. Consolidated Balance Sheets In thousands of dollars (Unaudited) |
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September 30, 2010 |
December 31, 2009 |
|
| $ | $ | |
| ASSETS | ||
| CURRENT | ||
| Cash | 21,576 | 8,912 |
| Accounts receivable and other | 26,501 | 24,186 |
| Inventory | 273,781 | 247,627 |
| Prepaid expenses | 1,568 | 509 |
| 323,426 | 281,234 | |
| Property, plant and equipment | 20,280 | 19,343 |
| Goodwill | 7,391 | 4,086 |
| 351,097 | 304,663 | |
| LIABILITIES | ||
| CURRENT | ||
| Bank indebtedness | - | 1,947 |
| Accounts payable and accrued liabilities | 30,790 | 30,595 |
| Floor plan payable | 166,079 | 158,793 |
| Deferred revenue | 1,070 | 3,154 |
| Current portion of long-term debt | 6,839 | 8,545 |
| Current portion of obligations under capital lease | 794 | 619 |
| 205,572 | 203,653 | |
| Long-term debt | 12,650 | 12,968 |
| Obligations under capital lease | 1,308 | 896 |
| Convertible debentures | 28,329 | - |
| Future income taxes | 3,640 | 1,051 |
| 251,499 | 218,568 | |
| SHAREHOLDERS' EQUITY | ||
| Common shares | 75,159 | 70,601 |
| Convertible debentures - equity component | 1,343 | - |
| Contributed surplus | 4,221 | 2,915 |
| Retained earnings | 18,875 | 12,579 |
| Accumulated and other comprehensive income | - | - |
| 99,598 | 86,095 | |
| 351,097 | 304,663 | |
| Appendix 2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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ROCKY MOUNTAIN DEALERSHIPS INC. Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings (Deficit) Three and Nine Month Periods Ended In thousands of dollars, except per share amounts (Unaudited) |
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Three Months Ended September 30, 2010 |
Three Months Ended September 30, 2009 |
Nine Months Ended September 30, 2010 |
Nine Months Ended September 30, 2009 |
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| $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SALES | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| New units | 68,298 | 69,353 | 212,301 | 207,461 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Used units | 68,694 | 46,144 | 143,762 | 124,122 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Product support | 32,348 | 29,068 | 78,163 | 72,545 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Finance and insurance | 690 | 527 | 1,997 | 1,403 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rental and leases | 448 | 713 | 899 | 2,551 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 170,478 | 145,805 | 437,122 | 408,082 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| COST OF SALES (including amortization of $329 and $589 for the three and nine months ended) (2009 - $294 and $1,136) | 144,434 | 123,537 | 368,889 | 347,917 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| GROSS PROFIT | 26,044 | 22,268 | 68,233 | 60,165 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| EXPENSES | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Selling and administrative | 16,962 | 12,497 | 46,849 | 38,321 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest on short-term debt | 1,725 | 1,481 | 4,594 | 4,586 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest on long-term debt | 662 | 237 | 1,121 | 784 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amortization of property, plant and equipment | 1,139 | 810 | 3,174 | 2,170 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 20,488 | 15,025 | 55,738 | 45,861 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| EARNINGS BEFORE INCOME TAXES | 5,556 | 7,243 | 12,495 | 14,304 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PROVISION FOR (RECOVERY OF) INCOME TAXES | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current | 1,408 | 2,484 | 1,384 | 5,038 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Future | 334 | (182) | 2,377 | (232) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1,742 | 2,302 | 3,761 | 4,806 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NET EARNINGS AND COMPREHENSIVE INCOME | 3,814 | 4,941 | 8,734 | 9,498 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RETAINED EARNINGS (DEFICIT), BEGINNING OF PERIOD | 15,882 | 3,339 | 12,579 | (89,116) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| REDUCTION OF STATED CAPITAL | - | - | - | 89,116 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DIVIDENDS | (821) | (624) | (2,438) | (1,842) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RETAINED EARNINGS, END OF PERIOD | 18,875 | 7,656 | 18,875 | 7,656 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings per share | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basic | $0.21 | $0.34 | $0.48 | $0.69 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Diluted | $0.20 | $0.34 | $0.48 | $0.69 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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