Rocky Mountain Dealerships Inc. (TSX:RME) announces fourth quarter and full
year results for period ended December 31, 2009
- Full year 2009 revenues increased 38% to $555.8 Million - Full year 2009 Earnings from Operations increased 21% to $22.2 million - Full year 2009 EBITDA grew to $27.7 million - Declares quarterly cash dividend of $0.045 per share
(Stock Symbol "RME" - TSX)
CALGARY, March 9 /CNW/ - Rocky Mountain Dealerships Inc. ("Rocky Mountain" or the "Company"), a leading Canadian network of full service agricultural and construction equipment dealerships, today reported financial results for the three month and full year periods ended December 31, 2009.
In 2009, net sales were $147.7 million and $555.8 million for the three and twelve months ended, compared to $146.9 million and $404.1 million for the same periods of 2008. This growth in annual revenue was due to improved sales from all three of the Company's primary revenue sources. New equipment sales were $92.9 million and $300.9 million for the three and twelve month periods for 2009 compared to $90.5 million and $240.4 million in the prior periods. Used equipment sales were $32.5 million and $156.6 for the three and twelve month periods of 2009, relatively similar compared to $32.8 million and $79.9 million for the same periods of 2008. Revenue generated from product support was $21.2 million and $93.7 million in the three and twelve month periods of fiscal 2009 compared to $22.0 million and $75.7 million for the same period of 2008.
Gross profit for the three and twelve month periods of 2009 were $24.5 million and $84.7 million compared to $24.6 million and $71.6 million for the same periods of the prior year. The Company's gross profit margin was 16.6% and 15.2% for three and twelve month periods of 2009 versus 16.8% and 17.7% for the same periods of the prior year.
Selling, general, and administrative improved to 9.4% of sales for both the three months and twelve month periods of 2009 versus 10.1% and 11.2% of sales, for the same periods of the prior year. The improvement in SG&A was primarily 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, and a reduction of expenses incurred to consolidate the acquired companies.
Operating income for the three and twelve month periods of 2009 increased 5% and 21% to $7.9 million and $22.2 million from $7.5 million and $18.4 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 three and twelve month periods of 2009, EBITDA was $9.3 million and $27.7 million compared to $9.4 million and $26.2 million for the same periods of 2008.
Net earnings for the three and twelve month periods were $5.7 million and $15.2 million, or $0.35 and $1.03 per basic share, compared to a net loss of $93.5 million and $87.7 million, or ($7.34) and ($6.88) per basic share, for the same periods of 2008.
Commenting on the performance of Rocky, Matt Campbell Chairman and Chief Executive Officer of Rocky Mountain Dealerships said, "We are absolutely pleased with our performance in Q4 and fiscal year 2009. In spite of the worst financial crisis ever, we came through the year with growth, profits and increased market share. Our fiscal year sales grew 38% over fiscal year 2008, and our earnings from operations grew 21%. A very successful result in a trying year."
Mr. Campbell continued, "We completed accretive acquisitions in the Prairie market and recently announced the acquisition of Roydale New Holland, in Red Deer, that opens up a whole new channel of acquisition targets, we are truly excited about this new opportunity. All the while, we have maintained our operating efficiencies and kept expenses under control while continuing to increase the margins of our acquired stores. Our SG&A at 9.4% is the lowest in our peer group. We will continue to deliver growth and profits to further invest in the sector according to our stated objectives. All of this was achieved in the face of terrific stress in the construction and oilfield sectors, a true testament to the strength of the Rocky Mountain business model."
Cash Flow & Liquidity
The Company ended fiscal 2009 in a very solid financial position. The Company's net debt to EBITDA ratio was 0.58; which positions the Company positively for growth to be within the goal of 1.0x - 1.5x. Working capital at the end of fiscal 2009 was $77.6 million. Inventory as of December 31, 2009, was $247.6 million, up from $207.5 million as the end of fiscal 2008. This increase in inventory is a result of the Enns and Mayor acquisitions' and timing of deliveries at year-end. Management is comfortable with its inventory position and valuation.
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 March 31, 2010, to shareholders of record at close of business on March 18, 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 fourth quarter and full year results on Tuesday, March 9, 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 March 23, 2010, by dialing 1-416-849-0833 or 1-800-642-1687 (toll free) and entering the passcode: 57377758. 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 brands and New Holland, as well as offering product support and finance and insurance products to its customers. In addition, 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 Sheet As at December 31, ------------------------------------------------------------------------- 2009 2008 $ $ ----------------------- (unaudited) (unaudited) ASSETS CURRENT Cash and cash equivalents 8,912 493 Accounts receivable and other 24,186 40,614 Inventory 247,627 207,467 Prepaid expenses 509 392 ----------------------- 281,234 248,966 Property, plant and equipment 19,343 21,458 Goodwill 4,086 - ----------------------- 304,663 270,424 ----------------------- ----------------------- LIABILITIES CURRENT Bank indebtedness 1,947 5,223 Accounts payable and accrued liabilities 30,595 29,973 Floor plan payable 158,793 150,449 Deferred revenue 3,154 9,437 Due to related parties - 3,691 Current portion of long-term 8,545 5,910 Current portion of obligations under capital lease 619 300 ----------------------- 203,653 204,983 Long-term debt 12,968 17,803 Obligations under capital lease 896 343 Future income taxes 1,051 1,126 ----------------------- 218,568 224,255 ----------------------- SHAREHOLDERS' EQUITY Common shares 70,601 133,879 Contributed surplus 2,915 1,406 Retained earnings (deficit) 12,579 (89,116) ----------------------- 86,095 46,169 ----------------------- 304,663 270,424 ----------------------- ----------------------- TABLE 2 ROCKY MOUNTAIN DEALERSHIPS INC. Consolidated Statement of Net Earnings (Loss) and Comprehensive Income (Loss) Years Ended December 31, 2009 and 2008 ------------------------------------------------------------------------- 2009 2008 $ $ ----------------------- SALES (unaudited) (unaudited) New units 300,924 240,363 Used units 156,648 79,908 Product support 93,748 75,726 Finance and insurance 2,047 2,404 Rental and leases 2,388 5,711 ----------------------- 555,755 404,112 COST OF SALES (including amortization of $1,345 for the year (2008 - $4,363)) 471,067 332,539 ----------------------- GROSS PROFIT 84,688 71,573 ----------------------- EXPENSES Selling and administrative 52,224 45,272 Interest on short-term debt 6,127 4,441 Interest on long-term debt 1,024 1,389 Amortization of intangible assets - 3,032 Amortization of property, plant and equipment 3,068 2,045 ----------------------- 62,443 56,179 ----------------------- EARNINGS BEFORE OTHER ITEMS AND INCOME TAXES 22,245 15,394 ----------------------- OTHER ITEMS Goodwill impairment - (84,837) Intangible asset impairment - (17,950) ----------------------- - (102,787) ----------------------- EARNINGS(LOSS) BEFORE INCOME TAXES 22,245 (87,393) ----------------------- PROVISION FOR (RECOVERY OF) INCOME TAXES Current 7,221 6,346 Future (198) (6,045) ----------------------- 7,023 301 ----------------------- NET EARNINGS (LOSS) AND COMPREHENSIVE INCOME (LOSS) 15,222 (87,694) RETAINED EARNINGS, BEGINNING OF YEAR (89,116) 328 REDUCTION OF STATED CAPITAL 89,116 - DIVIDENDS (2,643) (1,750) ----------------------- RETAINED EARNINGS (DEFICIT), END OF YEAR 12,579 (89,116) ----------------------- ----------------------- EARNINGS (LOSS) PER SHARE Basic $1.03 $(6.88) ----------------------- ----------------------- Diluted $1.02 $(6.88) ----------------------- ----------------------- TABLE 3 RECONCILIATION OF NET EARNINGS (LOSS) TO EBITDA IN THOUSANDS 3 months 3 months 12 months 12 months ended ended ended ended December December December December 31, 31, 31, 31, 2009 2008 2009 2008 (unaudited) (unaudited) (unaudited) (unaudited) $ $ $ $ Net earnings (loss) 5,724 (93,456) 15,222 (87,694) Long-term interest 240 344 1,024 1,389 Depreciation 898 681 3,068 2,045 Amortization of intangible assets - 758 - 3,032 Goodwill impairment - 84,837 - 84,836 Impairment of intangible assets - 17,950 - 17,950 Income taxes 2,217 (2,542) 7,023 301 Rental depreciation 173 466 949 2,347 Lease depreciation 36 341 396 2,016 ---------------------------------------------- EBITDA 9,288 9,379 27,682 26,222 ---------------------------------------------- ---------------------------------------------- Overhead Absorption 67% 81% 84% 79%
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: [email protected]
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