Rocky Mountain Dealerships Announces 1Q Results

Rocky Mountain Dealerships Inc. (hereinafter "Rocky") today reported its financial results for the quarter ended March 31, 2016.

SUMMARY OF THE QUARTER ENDED MARCH 31, 2016

• Amalgamated our two Industrial facilities in Edmonton, Alberta and amalgamated our Bow Island, Alberta agriculture location with our Taberand Medicine Hat, Alberta locations.
• Completed the construction of our new state of the art facility in Yorkton, Saskatchewan.
• Used equipment inventory declined by $10.9 million or 3.8%.
• Total revenues declined by 14.0% to $189.5 million.
• Agriculture segment product support revenues reported a tenth consecutive quarter of growth versus the comparable period in the prior year, a trend beginning at the inception of the segment.
• Gross margin increased to 14.9%, up from 14.3% in the first quarter of 2015.
• Gross profit decreased by 10.1% to $28.3 million.
• Operating SG&A(1) was reduced by $2.9 million or 11.6% to $22.4 million.
• Adjusted Diluted Earnings per Share(1) of $0.02 as compared to $0.03 in the first quarter of 2015.
• Adjusted EBITDA(1) declined by $0.5 million to $2.7 million.

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

"In 2015, we successfully implemented a number of cost containment strategies, and, as demonstrated by our results this quarter, these strategies continue to provide meaningful reductions to our fixed cost structure," stated Garrett Ganden, President & Chief Executive Officer of Rocky.  "The seasonal nature of Rocky's core business means that our first quarter typically sees lower activity levels.  That said, we are pleased with the overall outcome for this quarter, and feel that we are on the right track for 2016. We continue our theme from 2015 of setting the groundwork for future growth.  To that end, we amalgamated stores in certain strategic locations, which will allow us to leverage our strength as a consolidator across the prairies to deliver the same level of service and territory management at a lower fixed cost.  This contributed in large measure to our ability to deliver consistent profitability, despite a reduction in top line revenues.

"Western Canadian agriculture is a strong market at present.  Farmer balance sheets are strong, commodity prices are healthy, and overall grower sentiment is positive.  In these favorable market conditions, it will be incumbent on Rocky to show our customers the kind of continuing value proposition we can provide, be it in new and used equipment, product support, or our ancillary services such as precision farming.  And in that regard, we feel confident that we have the right team in place to keep Rocky as the safe, dependable equipment partner of choice inWestern Canada."

SUMMARY OF THE QUARTER ENDED MARCH 31, 2016

• Amalgamated two Industrial facilities in Edmonton, Alberta and amalgamated our Bow Island, Alberta agriculture location with our Taberand Medicine Hat, Alberta locations.
• Completed the construction of new state of the art facility in Yorkton, Saskatchewan.
• Used equipment inventory declined by $10.9 million or 3.8%.
• Total revenues declined by 14.0% to $189.5 million.
• Agriculture segment product support revenues reported a tenth consecutive quarter of growth versus the comparable period in the prior year, a trend beginning at the inception of the segment.
• Gross margin increased to 14.9%, up from 14.3% in the first quarter of 2015.
• Gross profit decreased by 10.1% to $28.3 million.
• Operating SG&A(1) was reduced by $2.9 million or 11.6% to $22.4 million.
• Adjusted Diluted Earnings per Share(1) of $0.02 as compared to $0.03 in the first quarter of 2015.
• Adjusted EBITDA(1) declined by $0.5 million to $2.7 million.

"In 2015, we successfully implemented a number of cost containment strategies, and, as demonstrated by our results this quarter, these strategies continue to provide meaningful reductions to our fixed cost structure," stated Garrett Ganden, President & Chief Executive Officer of Rocky.  "The seasonal nature of Rocky's core business means that our first quarter typically sees lower activity levels.  That said, we are pleased with the overall outcome for this quarter, and feel that we are on the right track for 2016. We continue our theme from 2015 of setting the groundwork for future growth.  To that end, we amalgamated stores in certain strategic locations, which will allow us to leverage our strength as a consolidator across the prairies to deliver the same level of service and territory management at a lower fixed cost.  This contributed in large measure to our ability to deliver consistent profitability, despite a reduction in top line revenues.

"Western Canadian agriculture is a strong market at present.  Farmer balance sheets are strong, commodity prices are healthy, and overall grower sentiment is positive.  In these favorable market conditions, it will be incumbent on Rocky to show our customers the kind of continuing value proposition we can provide, be it in new and used equipment, product support, or our ancillary services such as precision farming.  And in that regard, we feel confident that we have the right team in place to keep Rocky as the safe, dependable equipment partner of choice inWestern Canada." S