CALGARY, Alta. — Rocky Mountain Dealerships Inc. reported its financial results for the quarter ended Sept. 30, 2016.
SUMMARY OF THE QUARTER ENDED SEPTEMBER 30, 2016
- Total revenues contracted by $33.3 million or 13.0% to $222.6 million
- Gross profit decreased by $3.2 million or 7.9% to $36.9 million (16.6% of sales, up from 15.6%)
- Inventory decreased by $49.2 million or 9.9% to $445.6 million, the lowest reported level since 2012
- Operating SG&A(1) declined by $3.7 million or 14.6% to $21.4 million (9.6% of sales, down from 9.8%)
- Adjusted Diluted Earnings per Share increased by $0.2 or 5.7% to $0.37
- Adjusted EBITDA increased by $0.5 million or 4.3% to $12.2 million
"We continue to reap the benefits of the decisions made and strategies implemented over the past two years. Our ongoing focus on responsible inventory reduction has produced our lowest inventory levels since 2012. The resulting cash generation enabled us to continue to deleverage our balance sheet during the quarter, including a reduction of $41.7 million on our floor plan payables. In response to economic conditions, we reduced the fixed cost structure throughout our business, including the previously-announced changes to our industrial equipment distribution model. We believe our current cost model is both sustainable long-term, as well as scalable to meet future demand. Combined with improvements made to our balance sheet, we feel well positioned to continue providing value to shareholders."Favorable crop conditions and positive grower sentiment, combined with our lower fixed-cost model, again allowed us to deliver improved year-over-year earnings, despite reduced equipment demand this quarter," remarked Garrett Ganden, president and chief executive officer of Rocky. "While it is not uncommon for a portion of harvest to take place in the fourth quarter, late-season rains and some early snowfalls have resulted in a higher-than-average amount of harvesting activity to carry over into the fourth quarter this year. Despite these harvesting delays, early indications are that 2016 should produce a bumper crop, second only to the record-setting crops of 2013.
"The Western Canadian agriculture market continues its track record of strength and stability. While commodity prices have fluctuated of late, crop receipts continue to be healthy and farmer balance sheets remain strong. We continue our efforts to position ourselves as a unique and compelling value proposition to customers and shareholders in our industry. We continue to make progress in this regard, as we seek to make Rocky the equipment dealer of choice throughout Western Canada."
Quarterly Cash Dividend
On Nov. 7, 2016, Rocky's Board of Directors (the "Board") approved a quarterly dividend of $0.115 per common share on its outstanding common shares. The common share dividend is payable on Dec. 30, 2016, to shareholders of record at the close of business on Nov. 30, 2016.
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. Please consult with your own tax advisor for advice with respect to the income tax consequences to you from Rocky designating its dividends as "eligible dividends." Investors are cautioned that quarterly dividends remain subject to approval by Rocky's Board, and that the Board may, at any time, increase, decrease or suspend payment of the dividend.