Rocky Mountain Dealerships Inc. (TSX: RME) announces strong second quarter results and announces appointment of new CFO

Issued: 18,773,399 shares

CALGARY, Aug. 9, 2011 /CNW/ - Rocky Mountain Dealerships Inc. ("Rocky", the "Company", "we", "us", or "our") today reported financial results for the three and six months ended June 30, 2011.

Second Quarter Highlights:
(for the three months ended June 30, 2011)

• Diluted earnings increased to $0.23 per share, from $0.17 per share in Q2 2010.  Normalized for non-recurring expenditures as discussed below, second quarter 2011 diluted earnings were $0.33 per share.
• Second quarter sales increased by 49% to $217.9 million. The $71.8 million year-over-year sales increase includes same-store growth of $38.9 million and acquired growth of $32.9 million.
• Normalized second quarter net earnings increased by 110% to $6.5 million, from $3.1 million last year. Normalized quarterly EBITDA⁽¹⁾ increased by 89% year-over-year to $13.0 million from $6.9 million in Q2 2010.

Commenting on the second quarter, CEO Matt Campbell remarked, "Rocky produced strong financial results in the second quarter of 2011. Significant revenue gains from all streams drove improvements in net earnings, earnings per share and EBITDA.

"These gains were achieved despite a challenging quarter for our Manitoba operations, which suffered from a late spring, wet ground conditions and flooding. Growing demand in Alberta more than offset the weakness in Manitoba, with strong equipment deliveries on both the agriculture and construction fronts. The strong market in construction was, however, tempered by delivery lags from most manufacturers. Parts and services revenues also increased significantly in the second quarter as customers completed product support work that had been deferred in Q1 due to the late spring.

"With the April 1 acquisition of JB behind us, we devoted our management efforts to assessing and enhancing the effectiveness of our organizational structure. Although this remains a work in progress, we have begun to adjust our structure with the consolidation of our two Grande Prairie branches. We now serve the region through one full-service branch."

Mr. Campbell continued, "As previously announced, we entered into a credit agreement with a syndicated group of lenders during Q2 2011, which increased our aggregate available credit by $78 million. This has provided us with additional financial flexibility to pursue our long-term growth initiatives. After-tax non-recurring charges of approximately $0.8 million were incurred during the quarter related to closing the agreement.

"Rocky also finalized severance arrangements pursuant to the departure of a member of senior management from the Company, which resulted in $1.2 million in after-tax non-recurring charges.

(1) This financial measure is identified and defined under the section "Non-IFRS Measures" in the MDA.

"Having not only generated sales growth during the quarter, but also improved our bottom-line results despite the non-recurring charges, we are pleased with our results. We are currently enjoying good success integrating our newly acquired locations into our existing business."

Appointment of Chief Financial Officer

Rocky also announced today that David Ascott was appointed as Rocky's Chief Financial Officer effective August 8, 2011, succeeding Garrett Ganden who will now focus his efforts entirely on his role as Chief Operating Officer. Mr. Ascott joins the Company having most recently served as Chief Financial Officer of a Toronto Stock Exchange Listed company based out of Eastern Canada.

Commenting on the appointment, Mr. Campbell said "We are very pleased to welcome David to Rocky. With his background and experience, David is a valuable addition to the Rocky team and will be instrumental to our continued growth and success as a company."

Quarterly Cash Dividend

On August 8, 2011, Rocky's 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 September 30, 2011, to shareholders of record at close of business on August 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 Q2 results on Tuesday, August 9, 2011, at 9:00 am Mountain Time.  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's website or by dialing 1-855-859-2056 (toll free) or 1-416-849-0833, passcode: 86470175. The archive will remain available until Tuesday, August 23, 2011.

About Rocky

Rocky is one of Canada's largest agriculture and construction equipment dealerships with 37 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.

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