Used Inventory Levels Decline at the Expense of Lower Gross Margins
PI Financial Corp
13 Nov 2013
Available for Immediate Download
EARNINGS UPDATE November 13, 2013 ROCKY MOUNTAIN DEALERSHIPS (T-RME) $11.48 (Intraday) RATING: BUY TARGET: $15.50 (unchanged) (unchanged) Used Inventory Levels Decline at the Expense of Lower Gross Margins VALUATION/RECOMMENDATION: The reduction in our estimates is offset by the better used inventory profile. We are maintaining our 12- month target of $15.50 and continue to rate Rocky Mountain Dealerships Inc. (T-RME) as a BUY (risk: ABOVE AVERAGE). Our $15.50 target price reflects 5.9x EV/EBITDA and 9.2x P/E multiples of our FY14 estimates. Company Statistics Risk: ABOVE AVERAGE 52-week High/Low $14.88 / $10.43 Indicated Yield: 3.5% Shares o/s ('000): 19,274 Shares o/s (fd) ('000) : 20,291 Market Cap (fd) ('000): $232,942 Market Float Value ('000): $172,584 Average Trading Volume 48,451 Cash ('000): $42,635 Debt ('000): $52,817 CEO: Matt Campbell CFO: Garrett Ganden Shareholders: Mgmt/Insider 22% Institutional 34% Financial Summary (FYE Dec. 31) $CAD FY11a FY12a FY13e FY14e Revenue ($K) 802,763 966,106 1,022,037 1,073,961 EBITDA ($K) 41,225 42,008 41,544 52,604 EBITDA (%) 5.1% 4.3% 4.1% 4.9% Net income ($K) 23,209 23,975 23,614 31,992 EPS ($) 1.12 1.28 1.23 1.66 EV/EBITDA 5.6x 5.5x 5.6x 4.4x P/E 10.3x 9.0x 9.3x 6.9x Quarterly EPS($) Q1 Q2 Q3 Q4 FY12 0.11a 0.08a 0.45a 0.62a FY13 0.15a 0.23a 0.31a 0.54e Corporate Information Rocky Mountain Dealerships is the largest Case dealer in Canada with dealerships in Alberta, Saskatchewan, and Manitoba. The Company sells both agricultural and construction related equipment and services.