“We are grateful for the support of our employees and customers as we move into this new chapter for Rocky Mountain Equipment,” said Garrett Ganden, Rocky Mountain’s president and CEO. “We are excited to have partnered with Westcap as our financial and strategic partner of choice given their broad network and reputation throughout the prairies.”

Grant J. Kook, Westcap president and CEO, said agriculture “continues to be an important sector for our funds under management as the industry remains critical to the global economy, Canadian farmers are tapping new markets for their products, and there is an increased positive farm sentiment from rebounding crop prices and a strong 2020 harvest.”

Source: PE Hub

Rocky Mountain saw a 10.2 percent increase in used equipment sales, which reflects its continued focus on reducing its used inventory.

Used equipment decreased by 23.6 percent during the first nine months of 2020, and new equipment inventory decreased by 47.9 percent. Total equipment inventory fell by 29.5 percent.

Source: Rocky Mountain

A numbered company controlled by chairman Matthew Campbell and CEO Garrett Ganden has agreed to pay $7 each for the shares they do not currently own, said the Calgary-based firm.

The arrangement values the dealer group, which has 36 locations in Alberta, Saskatchewan and Manitoba, at $135 million (or $188 million including debt and lease obligations and excluding floor plan payables).

Directors and officers who own or control about 13.6 percent of the shares have agreed to support the arrangement, the company said. The deal requires two-thirds support at a special meeting to be held in December.

The transaction has been endorsed by a special committee of independent directors formed to assess the fair market value of the shares and evaluate the proposal.

Source: The Canadian Press

CALGARY, Alberta–(BUSINESS WIRE)– Rocky Mountain Dealerships Inc. (TSX: RME, and hereinafter “RME”), Canada’s largest agriculture equipment dealer, today reported its financial results for the three months ended September 30, 2020. Unless otherwise stated, all amounts are expressed in Canadian dollars.

“The agriculture industry is an annual cycle of plant, grow and harvest. We now have that full cycle under our belt since we implemented aggressive cost and inventory reduction initiatives in the last half of 2019,” stated Mr. Garrett Ganden, President and Chief Executive Officer. “RME’s solid third quarter performance is the result of the consistent execution of our strategy to reduce equipment inventory and realign our cost structure through a period of unprecedented and challenging industry conditions. Third quarter Adjusted Diluted Earnings per Share of $0.25 are up relative to $0.00 in Q3 2019, and quarterly Adjusted EBITDA, at $10.5 million, is up almost $6.0 million from the Q3 number last year. Our equipment inventory is down $154.5 million from year-end 2019 and Operating SG&A has decreased $1.5 million for the quarter and $7.7 million for the nine-months. While demand has not rebounded from 2019 levels the way we originally anticipated, we believe that the RME’s cost structure and inventory levels are more appropriate for the current market.”

Mr. Ganden added, “Due to the ongoing economic uncertainty caused by the COVID-19 pandemic and unresolved international trade relations, we believe it gives RME a strategic advantage to continue to focus on and fortify our balance sheet position. Canadian industry data indicates the delivery of new units of large horsepower equipment and self-propelled combines remain at historic lows. However, crop reports are encouraging, showing the harvest is essentially complete and ahead of historical averages across our territory while crop prices are now 5%-19% higher than in January 2019.”

SUMMARY OF THE QUARTER ENDED SEPTEMBER 30, 2020

• $134.8 million decrease in equipment inventory year-over-year as a result of continued focus in this area. In 2020 year-to-date, equipment inventory has been reduced by $154.5 million.
• $16.9 million (9.2%) increase in sales in the quarter to $201.0 million compared with the third quarter of 2019, due to higher sales in all categories.
• Gross profit as a percent of sales increased to 15.3% from 14.8% in the same period in 2019 due primarily to stronger used equipment and parts and service margins.
• $1.5 million (7.4%) decrease in Operating SG&A in the quarter to $18.1 million compared with the third quarter of 2019, reflecting the benefit of cost reduction efforts implemented during the second half of 2019 and continued diligence throughout 2020.
• $1.0 million (25.2%) decrease in borrowing costs for the quarter compared with the third quarter of 2019, due to lower average levels of interest-bearing floor plan payable.

RESULTS FOR THE QUARTER ENDED SEPTEMBER 30, 2020

Over the past five quarters, RME has focused its efforts on a methodical and orderly reduction of equipment inventory. This is highlighted in the year-over-year equipment inventory reduction of $134,827 and a decrease in short-term borrowing costs of $957.

INVENTORY

• On a year-over-year basis, our equipment inventory reduction efforts have resulted in a $134,827 decline in total equipment inventories, with new and used equipment inventories decreasing by $78,667 and $56,160, respectively.
• From December 31, 2019 to September 30, 2020, equipment inventory levels declined by $154,478.

TRADE DISPUTES, COVID-19 AND CONTINUED MARKET UNCERTAINTY

Unresolved trade disputes between Canada and several of its agriculture commodity trading partners continue to add uncertainty to farmer sentiment and consequently, demand for agriculture equipment. As a result, while Q3 2020 equipment sales have increased year-over-year, they remain depressed relative to historical norms.

The COVID-19 pandemic has been pervasive in its effect on global markets. While our business is not immune to the impacts of this pandemic, agriculture equipment distribution remains an essential service where we operate. As a result, all of our branches have remained open for business throughout the pandemic. RME continues to implement recommended safety precautions to support and protect our customers, stakeholders and communities. The volatility and unknown duration of this pandemic has created a great deal of uncertainty and the future is very difficult to predict but RME will continue to work safely and diligently to be the dependable partner our customers and shareholders deserve.

The cumulative impact of these headwinds is reflected in the September 2020 Ag Tractor and Combine Report for Canada, from the Association of Equipment Manufacturers, which reported year-to-date sales declines in major product categories including 4WD tractors (down 11%) and self-propelled combines (down 9%). While the third quarter did see improvements in these equipment sales categories, the future remains uncertain.

CROP OUTLOOK

Favorable September weather across the Prairie Provinces enabled an early harvest leading to improved crop yields. In its Outlook for Principal Field Crops dated October 22, 2020, Agriculture and Agri-Foods Canada is forecasting a 3% increase in overall production in 2020 relative to 2019 with yield improving 3%.

Provinces reported significant harvest completion in late October, well past recent averages with Alberta 99% complete (5-year average of 77%)² ,Saskatchewan 100% complete (5-year average of 88%)³ and Manitoba 98% complete (4-year average of 90%)⁴.

FINANCIAL STATEMENTS AND MANAGEMENT’S DISCUSSION AND ANALYSIS (“MD&A”)

The MD&A as well as the unaudited condensed consolidated interim financial statements and notes thereto for the quarter ended September 30, 2020 and 2019, are available online at  and .

President and CEO Garrett Ganden said Rocky Mountain “performed well in the second quarter, especially in light of the many global issues adversely affecting our sector. Results were better than the same quarter last year and we have started to reclaim the lost ground from our first quarter.”

He went on to say that cost reduction efforts “are clearly producing results as is our inventory reduction focus. Equipment inventories are down $114.8 million from Q2 2019 and $78.5 million from the beginning of the year.”

Source: Business Wire

Sales decreased 24.7 percent, or $44 million, compared to the same quarter last year, due primarily to declines in new equipment sales driven by the company’s intentional limiting of these sales to reduce trade-ins, undelivered equipment sales from the OEM, and farmer hesitation.

Gross profit dollars mirrored the sales decline, coming in 24.5 percent lower compared to the same period in 2019.

“Operationally, the first quarter was Canada’s fourth under China’s canola embargo while rail protests also disrupted grain shipments and farmers’ cash-flows,” said President and CEO Garrett Ganden. “Our equipment sales are down, as would be expected with those headwinds, but we are pleased to note our product support activities held steady and even increased a little despite a later start to seeding this year relative to 2019.”

COVID-19 also impacted first quarter operations.

The Pattison store was part of the Maple Farm Equipment chain before Pattison (Maple Farm’s majority owner since 2014 and sole owner since late 2016) merged it with two other chains during 2017 to form the new operation.

The merger of the Maple Farm, JayDee AgTech and Nykolaishen Farm Equipment chains formed a 19-store network under the Pattison banner, with nine in eastern Saskatchewan, two in western Manitoba and eight in western Saskatchewan.

Elliff Motors in Harlingen, Texas, will build an $800,000 facility to sell and service Kubota tractors and construction equipment.

“We’re opening a full-line Kubota dealership, everything from residential to commercial to ag,” said Collin Stewart, a member of the family at Elliff and a manager at the dealership’s current location.

Rocky Mountain Dealerships Inc. has appointed Gerald (“Jerry”) Schiefelbein as its chief financial officer beginning Jan. 6.

Schiefelbein will serve as key member of RME’s executive leadership team.

President and CEO Garrett Ganden said the company has been “patient and purposeful about selecting the right candidate for this role” and is “confident that we have the right person” in Schiefelbein.

Sources: Farm Equipment, Rocky Mountain

AgriVision Equipment CEO Jeremy Ostrander shared the announcement at a Sioux Center city council meeting, asking to purchase 15 acres of city-owned land on which to build the dealership. It will serve customers in the agricultural, residential and construction markets.

Agrivision’s previous acquisition was in June of 2018, when they acquired Van Wall Equipment’s Onawa, Iowa location.

Calgary-based Cervus Equipment, a 36-store Deere dealer, reported that its consolidated revenue for the quarter ended Sept. 30 declined by 19 percent year-over-year. Total equipment revenue for the period was down by 26 percent. For the first nine months of the year, Cervus’ total revenues were down 16 percent compared to the same period last year.

In the agriculture segment, equipment revenue declined 28 percent in the quarter and 24 percent year-to-date.

“In this environment, producers are choosing to postpone new equipment purchases as they hold late model equipment purchased in recent years,” the company said.

Cervus reduced its ag equipment inventory by 18 percent compared to the second quarter of 2019.

Rocky Mountain Dealerships Inc. reported its financial results for the third quarter ended September 30.

Sales decreased by 21.1 percent compared to the same period in 2018, due primarily to declines in new and used same-store equipment sales. These declines reflect weaker 2019 demand and a considerable delay in harvest progress across the Canadian Prairies. Gross profit dollars decreased by 23.7 percent.

Total equipment inventory increased by 8.3 percent in the third quarter. That follows a total equipment inventory decrease of 10 percent in the second quarter of this year, which was the second largest equipment inventory decrease in the company’s history.

Sources: Business Wire, Companies, Ag Equipment Intelligence