Canada Dividend Investor: RME - Rocky Mountain Dealerships Inc. Announces Third Quarter Results (CAD 0.0675)

Company: Rocky Mountain Dealerships Inc.
Stock Name: RME
Amount: CAD 0.0675
Announcement Date: 05/11/2012
Record Date: 28/11/2012

Dividend Detail:

CALGARY, Nov. 5, 2012 /CNW/ - Rocky Mountain Dealerships Inc. (TSX: RME, OTCQX: RCKXF, hereinafter "Rocky") today reported financial results for the three
and nine months ended September 30, 2012.

HIGHLIGHTS FOR THE QUARTER ENDED SEPTEMBER 30, 2012:

Increased revenues by 20.8% to $247.5 million (15.2% on a same store
basis).

Gross profit increased by 19.2% to $39.7 million (16.0% of sales).

Normalized Diluted Earnings per Share⁽¹⁾of $0.45, up from $0.35 in 2011.

Generated Cash Flow from Net Earnings⁽¹⁾ of $10.3 million.

EBITDA⁽¹⁾ increased by 12.6% to $13.5 million.

Paid dividends of $0.0675 per share

Completed the acquisition of Camrose Farm Equipment Ltd.

HIGHLIGHTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012:

Increased revenues by 18.3% to $665.3 million (15.7% on a same store
basis).

Gross profit increased by 15.2% to $101.6 million (15.3% of sales).

Normalized Diluted Earnings per Share⁽¹⁾of $0.83, up from $0.81 in 2011.

Generated Cash Flow from Net Earnings⁽¹⁾ of $17.4 million.

(1) See further discussion in "Non-IFRS Measures" and "Reconciliation of
Non-IFRS Measures to IFRS" sections below.

Matt Campbell, CEO of Rocky, noted, "An excellent growing season
translated into strong earnings for the period. The elimination of the
dilution associated with the convertible debentures, coupled with these
favourable results, generated record diluted earnings per share for our
shareholders this quarter.

"As previously discussed, Rocky has made a significant investment over
the last year in preparing our organization for the future.�� We have
initiated new training programs, new procedural and technological
improvements and rationalized our stores under a single, strong brand.��
The largest part of these costs has now been incurred, and we look
forward to realizing their returns through improved operating
efficiency, better brand recognition and, ultimately, an enhanced
relationship with our customers.

"During the quarter, we acquired 100% of the outstanding common shares
of Camrose Farm Equipment Ltd, a Case IH and New Holland Agriculture
dealer with stores in Camrose and Killam, Alberta.�� Subsequent to the
quarter end, we purchased the Case IH Agriculture dealership assets of
Houlder Automotive Ltd., with stores in Grimshaw and Falher, Alberta.��
With these acquisitions, Rocky continues to expand its reach across the
Alberta agriculture market.

"Overall, the continued strong economic conditions in both agriculture
and construction have played a part in Rocky's success and growth,
while at the same time our ability to be a partner of choice for
equipment purchasers allowed us to expand our same store revenues. The
impact of previously acquired dealerships and trade areas, along with
our strong OEM relationships, position us well to pursue our revenue
and earnings growth initiatives."

Quarterly Cash Dividend

On November 5, 2012, Rocky's Board of Directors declared a quarterly
dividend of $0.0675 per common share on the Company's outstanding
common shares.�� The common share dividend is payable on December 31,
2012, to shareholders of record at close of business on November 30,
2012.

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

Rocky will host a conference call to discuss its Q3 results on Tuesday,
November 6, 2012, at 9:00 a.m. 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
calling 1-855-859-2056 (toll free) or 1-416-849-0833, passcode:
37830714.�� The archive will remain available until Tuesday, November
20, 2012.

Caution regarding forward-looking statements

Certain information set forth in this news release, including, without
limitation, information relating to any expected returns on recent
investments in the organization, its processes and people, Rocky's
ability to expand through acquisition, and Rocky's future earnings and
growth potential, is considered forward-looking information within the
meaning of applicable Canadian securities laws.�� By its nature,
forward-looking information is subject to numerous risks and
uncertainties, some of which are beyond Rocky's control.�� There is
significant risk that the forward-looking statements will prove not to
be accurate.�� Readers are cautioned not to place undue reliance on
forward-looking statements as a number of factors could cause actual
future performance and events to differ materially from that expressed
in the forward-looking statements.�� Accordingly, this news release is
subject to the disclaimer and qualified by risks and other factors
discussed by Rocky in its management's discussion and analysis ("MD&A")
for the period ended September 30, 2012, and as discussed in Rocky's
Annual Information Form dated March 19, 2012 under the heading "Risk
Factors."�� Except as required by law, Rocky disclaims any intention or
obligation to update or revise forward-looking statements, and further
reserves the right to change, at any time, at its sole discretion, its
current practice of updating its guidance and outlooks.

About Rocky

Rocky is one of Canada's largest agriculture and construction equipment
dealership networks with branches located throughout Alberta,
Saskatchewan and Manitoba. Through its network of Rocky Mountain
Equipment locations, 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.

Consolidated Balance Sheet Summary

Expressed in thousands of Canadian Dollars (Unaudited)

��			��	��
��			September 30, 2012	December 31, 2011
Assets			��	��
��	��	Current assets	508,524	434,479
��	��	Property and equipment	19,701	21,369
��	��	Goodwill	12,720	9,961
Total assets			540,945	465,809
��			��	��
Liabilities and equity			��	��
��	��	Current liabilities	362,327	286,175
��	��	Long-term debt	39,588	11,701
��	��	Obligations under finance leases	1,102	1,589
��	��	Convertible debentures	-	28,761
��	��	Deferred tax liability	3,464	8,283
��	��	Derivative financial instruments	1,691	1,139
��			408,172	337,648
��	��	Shareholders' equity	132,773	128,161
Total liabilities and equity			540,945	465,809

SELECTED FINANCIAL INFORMATION

For the three and nine months ended September 30,

��

$ thousands, except per share amounts

��

For the three months ended September 30,

For the nine months ended September 30,

��

2012

2011

2012

2011

Sales

��

New equipment

��

109,636

44.3%

90,523

44.2%

353,223

53.1%

291,221

51.8%

��

Used equipment

96,653

39.0%

78,468

38.3%

217,767

32.7%

187,491

33.4%

��

Parts

31,377

12.7%

26,757

13.1%

68,284

10.3%

59,376

10.6%

��

Service

8,465

3.4%

8,034

3.9%

22,526

3.4%

20,569

3.7%

��

Other

1,403

0.6%

1,073

0.5%

3,526

0.5%

3,517

�� 0.5%

��

247,534

100.0%

204,855

100.0%

665,326

100.0%

562,174

100.0%

Cost of sales

207,836

84.0%

171,556

83.7%

563,682

84.7%

473,951

84.3%

Gross profit

39,698

16.0%

33,299

16.3%

101,644

15.3%

88,223

15.7%

��

Selling, general and administrative

25,181

10.2%

20,915

10.2%

71,651

10.8%

60,037

10.7%

Loss on repurchase of convertible debentures

0.0%

0.0%

4,232

0.6%

0.0%

Interest on short-term debt

2,448

1.0%

2,099

1.0%

6,449

1.0%

6,284

1.1%

Interest on long-term debt

599

0.2%

870

0.5%

2,271

0.3%

2,670

0.5%

Earnings from operations

11,470

4.6%

9,415

4.6%

17,041

2.6%

19,232

3.4%

Provisions for income taxes

3,019

1.2%

2,294

1.1%

4,836

0.8%

4,984

0.9%

Net earnings

8,451

3.4%

7,121

3.5%

12,205

1.8%

14,248

2.5%

Earnings per share

��

Basic

0.45

��

0.38

��

0.65

��

0.76

��

Diluted

0.45

��

0.34

��

0.65

��

0.70

��

Dividends per share

0.0675

��

0.045

��

0.18

��

0.135

��

Non-IFRS Measures⁽¹⁾

��

EBITDA

13,504

5.5%

11,996

5.9%

23,451

3.5%

26,638

4.7%

Operating SG&A

23,900

9.7%

19,224

9.4%

67,720

10.2%

53,068

9.4%

Cash Flow from Net Earnings

10,318

4.2%

11,993

5.9%

17,403

2.6%

19,625

3.5%

Normalized Diluted Earnings per Share

0.45

��

0.35

��

0.83

��

0.81

��

(1) See further discussion in "Non-IFRS Measures" and "Reconciliation of
Non-IFRS Measures to IFRS" sections below.

NON-IFRS MEASURES

We use terms which do not have standardized meanings under IFRS.�� As
these non-IFRS financial measures do not have standardized meanings
prescribed by IFRS, they are unlikely to be comparable to similar
measures presented by other issuers. Our definition for each term is as
follows:

"EBITDA" is a commonly used metric in the dealership industry.�� EBITDA is
calculated by adding long-term interest, income taxes and depreciation
to net earnings.�� Adding back non-operating expenses allows management
to consistently compare periods by removing changes in tax rates,
long-term assets and financing costs.

"Cash Flow from Net Earnings" is calculated by adding back non-cash items such as depreciation of
property and equipment, non-cash finance charges on the Debentures and
long-term debt, deferred income taxes, share-based payment expense,
losses (gains) on the disposal of property and equipment, losses
(gains) on derivative financial instruments and the loss on the
repurchase of the Debentures to net earnings.�� Adding back these
non-cash items allows management to isolate and analyze the operating
cash flows generated through earnings, prior to any consideration of
changes in working capital balances and the impact of acquisitions.

"Operating SG&A" is calculated by adding back depreciation of property and equipment
and any non-recurring charges incurred during the period to SG&A.
Management deems non-recurring charges to be unusual and/or infrequent
charges that the Company incurs outside of its common day-to-day
operations.�� For the three and nine months ended September 30, 2012 and
2011, the ineffective portion of hedged financial instruments and
acquisition transaction costs are considered by management to be
non-recurring charges in SG&A. Adding back these items allows
management to assess the discretionary expenses from ongoing
operations.�� We target a sub-10% Operating SG&A as a percentage of
total sales on an annual basis.

"Normalized Diluted Earnings per Share" is calculated by adding back the after-tax impact of non-recurring
charges to net earnings when calculating diluted earnings per share.��
In addition to the non-recurring charges in SG&A, the loss on the
repurchase of the Debentures is considered to be a non-recurring
charge.�� Adding back these non-recurring charges to net earnings allows
management to assess the fully diluted earnings per share from ongoing
operations.

RECONCILIATION OF NON-IFRS MEASURES TO IFRS

Reconciliation of Quarterly Net Earnings to EBITDA ��
$ thousands	��	��	��	��	��	��	��	��	��
��	Q3 2012	Q2 2012	Q1 2012	Q4 2011	Q3 2011	Q2 2011	Q1 2011	Q4 2010	Q3 2010
Net earnings	8,451	1,595	2,159	8,961	7,121	4,464	2,663	6,345	3,702
Interest on long-term debt	599	802	870	917	870	933	867	943	662
Depreciation	1,435	1,271	1,433	1,604	1,711	1,663	1,362	1,517	1,468
Income taxes	3,019	937	880	3,105	2,294	1,750	940	2,564	1,745
EBITDA	13,504	4,605	5,342	14,587	11,996	8,810	5,832	11,369	7,577

Reconciliation of Year to Date Net Earnings to EBITDA

��	��	��
$ thousands	For the nine months ended September 30,
��	2012	2011
Net earnings	12,205	14,248
Interest on long-term debt	2,271	2,670
Depreciation	4,139	4,736
Income taxes	4,836	4,984
EBITDA	23,451	26,638

Reconciliation of Cash Flow from Net Earnings

��	��	��	��	��
$ thousands	For the three months ended September 30,		For the nine months ended September 30,
��	2012	2011	2012	2011
Net earnings	8,451	7,121	12,205	14,248
Depreciation expense	1,435	1,711	4,139	4,736
Accretion expense	-	88	123	259
Deferred tax expense (recovery)	66	2,280	(4,605)	(896)
Share-based payment expense	437	264	1,193	775
Non-cash impact - credit promissory note	4	6	16	(26)
Loss (gain) on disposal of property and equipment	(37)	-	(118)	6
Loss (gain) on derivative financial instruments	(38)	523	�� 218	523
Loss on repurchase of convertible debentures	-	-	4,232	-
Cash Flow from Net Earnings	10,318	11,993	17,403	19,625

Reconciliation of Operating SG&A to selling, general and administrative
expenses

��		��	��	��	��	��
$ thousands			For the three months ended September 30,		For the nine months ended September 30,
��			2012	2011	2012	2011
Operating SG&A			23,900	19,224	67,720	53,068
Depreciation			1,289	1,165	3,683	3,699
Non-recurring charges			��	��	��	��
��	��	Ineffective portion of derivative financial instruments	(38)	523	218	523
��	��	Syndication charges	-	-	-	1,083
��	��	Severance charges	-	-	-	1,634
��	��	Acquisition transaction charges	30	3	30	30
SG&A			25,181	20,915	71,651	60,037

Reconciliation of Normalized Diluted Earnings per Share

��	��	��	��	��
$ thousands, except per share amounts	For the three months ended September 30,		For the nine months ended September 30,
��	2012	2011	2012	2011
Earnings used in the calculation of diluted earnings ��per share	8,451	7,617	12,205	15,719
After tax impact of non-recurring charges in ��SG&A and loss on repurchase of Debentures⁽¹⁾	(6)	390	3,382	2,407
Earnings used in the calculation of Normalized ��Diluted Earnings per Share	8,445	8,007	15,587	18,126
Weighted average diluted shares used in the ��calculation of diluted earnings per share	18,895	22,556	18,888	22,458
Normalized Diluted Earnings per Share	0.45	0.35	0.83	0.81
^{(1) - After applying statutory rate of 25% (2011 - 26.5%)}	��	��	��	��

��

SOURCE: Rocky Mountain Dealerships Inc.

For further information:

Rocky Mountain Dealerships Inc.
Matt Campbell, Chief Executive Officer; or
Garrett Ganden, Chief Operating Officer
#301, 3345 - 8^th Street S.E.
Calgary, Alberta T2G 3A4
Telephone: (403) 265-7364, Fax (403) 214-5644

Canada Dividend Investor

Monday, November 5, 2012

RME - Rocky Mountain Dealerships Inc. Announces Third Quarter Results (CAD 0.0675)

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