CALGARY, Alta. — (BUSINESS WIRE) — Rocky Mountain Dealerships Inc. (TSX:RME), Canada's largest agriculture equipment dealer, reported its financial results for the 3 months ended March 31, 2019. Unless otherwise stated, all amounts are expressed in thousands of Canadian dollars.
Commenting on the quarter, Garrett Ganden, president and Chief Executive Officer, stated, “While we experienced challenges in some areas, our sales and operations teams delivered solid revenue growth in both parts and service this quarter, contributing to a favorable sales mix and stronger gross margins.
“Our equipment sales for the period receded from the record levels reported during the first quarter of last year, a trend consistent with the decline in delivery of new agriculture units in the Canadian marketplace year-over-year. In response to these market pressures we have moderated our presale activity, restocked certain key equipment categories and are focusing our efforts on reducing existing inventory. RME stands ready to support our customers’ needs as Canadian farmers enter the 2019 growing season.”
First Quarter 2019 Summary
Solid contributions from the parts and service business were a good news story in first quarter, wherein many of the regions within RME's sales territory experienced unseasonably cold winter conditions. As winter gives way to spring and seeding activity commences, Canadian farmers are ready to sow yet another strong crop and RME stands ready to support their equipment and product support needs.
- Gross profit as a percentage of sales improved to 14.4% compared to 12.3% for the same period in 2018;
- Product support revenues increased 9.9% or $2,164 on a same store basis year-over-year;
- RME repurchased an additional 231,000 shares bringing the total shares repurchased to 631,000 representing approximately 40% of the total amount authorized for repurchase under the NCIB and approximately 3.3% of total shares outstanding as at April 30, 2019;
- Sales decreased 19.1% or $41,973 to $177,681 compared with $219,654 for the same period in 2018 due primarily to a $46,575 decline in same store new equipment sales for the quarter as RME limits presale activity and focuses on distributing existing inventory.
Rocky Mountain Dealerships — Selected Quarterly Financial Information
|3 Months Ended March 31, 2019||3 Months Ended March 31, 2018||Change||%|
|Cost of sales||152,124||192,691||(40,567)||(21.1)|
|Net loss as a % of sales||(1.7)||(0.2)||(1.5)|
Source: Company reports
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