Rocky Mountain Dealerships Inc. Reports Third Quarter 2018 Results

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1 Rocky Mountain Dealerships Inc. Reports Third Quarter 2018 Results Acquisitions, inventory reduction and dividend increase highlight RME's achievements recorded during quar CALGARY, Alberta--(BUSINESS WIRE)--November 7, Rocky Mountain Dealerships Inc. (TSX:RME, and hereinafter "RME"), Canada's largest agriculture equipment dealer, today reported its financial results for the three and nine months ended Unless otherwise stated, all amounts are expressed in Canadian dollars. Commenting on the quarter, Garrett Ganden, President & Chief Executive Officer stated, The advantage of RME's strong and geographically diverse dealer network becomes even more evident when growing or harvest conditions are not ideal. This past harvest season, snowfalls halted September activity, most notably in Alberta, where only 40% of crops had been harvested by the end of September, compared to a five-year average of 80%. While most, if not all of this harvest shortfall was made up during October, our third quarter performance was supported by the strength of our network, which enabled us to provide exceptional support to our customers while also delivering results to our shareholders. We continue to execute on our growth strategy announced in May On the acquisition front, we added two more locations to our network in the heartland of Saskatchewan agriculture. We also added a location in Olds, Alberta, which will complement our existing operations in the surrounding area. Although we acquired $29.7 million in inventory with the addition of these new locations, we were still able to draw down RME's total inventory during the quarter, keeping our balance sheet strong for future undertakings. We remain mindful that our capital allocation strategy must reflect the long-term interests of RME and its shareholders. In the wake of recent volatility in the global equity markets, many companies, including RME, are experiencing contracting price to book multiples. With that in mind, as we look at acquisitive growth prospects that will create long-term shareholder value, we will also contemplate a number of different capital deployment strategies. Kansas Used Equipment Outlet RME also announced today that it has commenced an initiative to sell late-model used equipment to farmers based in the United States ("U.S."). To that end, RME has entered into a lease for a property in Tonganoxie, Kansas, which is located on the outskirts of Kansas City. This facility is situated in close proximity to the sizeable U.S. agricultural markets of Kansas, Iowa, Nebraska, Missouri and Oklahoma as well as manufacturing facilities from which new equipment is routinely being shipped to RME locations within Canada. By backhauling late-model used equipment to our new Kansas location, we are able minimize the associated transportation costs. Mr. Ganden remarked on this announcement saying, "This undertaking establishes a beachhead for RME in the U.S. market at a time when the equipment profile is aging due to several years of depressed new unit deliveries. We believe that our lightly-used, competitively-priced equipment is well positioned to refresh this aging profile. This additional equipment distribution channel represents a new growth avenue for RME and does so with minimal capital commitments and start-up costs. THIRD QUARTER HIGHLIGHTS Achieved a $30 million draw down in used equipment excluding inventory acquired through acquisitions; Total inventory reduced by $38 million, excluding the $30 million of inventory acquired through acquisitions. Increased RME s annual dividend to $0.49 per common share (an increase of $0.03 or 6.5%); Acquired John Bob Farm Equipment ("JBFE"), a Saskatchewan-based dealer of New Holland agriculture equipment which reported average historical revenues of $39 million (unaudited) from its locations in Outlook and Tisdale; and Acquired the New Holland Agriculture dealership in Olds, Alberta, which reported average historical revenues of $14 million (unaudited).

2 SELECTED FINANCIAL INFORMATION $ thousands Change % Change Change % Change Sales 233, ,812 (5,438) (2.3) 755, ,642 70, Cost of sales 197, ,005 (2,866) (1.4) 654, ,539 69, Gross profit 36,235 38,807 (2,572) (6.6) 101, , Gross profit as a % of sales 15.5% 16.3% (0.8%) 13.4% 14.7% (1.3%) Selling, general and administrative 24,434 24,834 (400) (1.6) 73,534 72,503 1, Loss (gain) on derivative financial instruments 511 (1,308) 1,819 (139.1) 2,766 (1,447) 4,213 (291.2) Impairment loss on vacant land (641) (100.0) Earnings before finance costs and income taxes 11,290 15,281 (3,991) (26.1) 24,998 29,406 (4,408) (15.0) Finance costs 3,659 3, ,534 9, Earnings before income taxes 7,631 12,176 (4,545) (37.3) 15,464 20,284 (4,820) (23.8) Income taxes 2,083 3,327 (1,244) (37.4) 4,214 5,643 (1,429) (25.3) Net earnings 5,548 8,849 (3,301) (37.3) 11,250 14,641 (3,391) (23.2) Net earnings as a % of sales 2.4% 3.7% (1.3%) 1.5% 2.1% (0.6%) Earnings per share Basic (0.18) (39.1) (0.19) (25.0) Diluted (0.18) (39.1) (0.19) (25.0) Dividends per share Book value / diluted share Sept Adjusted Diluted Earnings per Share (0.14) (32.6) (0.15) (19.5) Adjusted EBITDA 1 10,194 13,823 (3,629) (26.3) 23,531 27,290 (3,759) (13.8) Operating SG&A 1 22,774 22, ,430 66,055 3, Operating SG&A 1 as a % of sales 9.8% 9.3% 0.5% 9.2% 9.6% (0.4%) Operating Cash Flow before Changes in Floor Plan 1 46,465 26,171 20, (15,651) 35,647 (51,298) (143.9) GROWTH PLAN UPDATE On May 30, 2018, RME launched its growth plan that aims to grow revenues to at least $1.5 billion in RME intends to do this through a combination of revenue sources including: Category Revenue Objective ($ millions) Progress-To-Date ($ millions) Organic Growth $200 $58 Acquisitions $200 $12 Synergies $100 - Total $500 $70 As part of this plan, during fiscal 2023 RME is targeting Adjusted Earnings 2 of $33.8 million, an increase of $11.3 million relative to In addition, RME is also targeting Adjusted EBITDA of $60.0 million for 2023, a $19.8 million increase relative to 2017.

3 SUMMARY OF THE QUARTER ENDED SEPTEMBER 30, 2018 Early snowfalls across the Canadian Prairies stalled harvest activity throughout mid- to late-september, decreasing in-season demand across all categories. Despite the impact of the unusual harvest, compared to the second quarter of 2018, RME continued to draw down its inventory of new and used equipment even with the addition of $30 million in inventory from the JBFE and Olds acquisitions in the third quarter. Sales and Margins Total sales decreased 2.3% or $5.4 million to $233.4 million compared with $238.8 million for the same period in Gross profit declined by 6.6% or $2.6 million to $36.2 million from $38.8 million for the same period in Cost Structure As a percentage of sales, Operating SG&A 3 for the third quarter of 2018 increased by 0.5% to 9.8% compared with 9.3% for the same period in 2017 due to decreased sales. Finance costs for the quarter ended 2018 increased 17.8% or $0.6 million to $3.7 million compared with $3.1 million during the same period in 2017 due primarily to an increase in the average level of interest-bearing floor-plan. Earnings Adjusted EBITDA 3 for the quarter ended 2018 decreased by 26.3% or $3.6 million to $10.2 million compared with $13.8 million for the same period in Adjusted Diluted Earnings per Share 3 decreased by 32.6% or $0.14 to $0.29 for the third quarter of 2018, compared with $0.43 for the same period of Balance Sheet and Inventory For the trailing twelve months ended 2018, inventory turns were 1.79 times, down from 1.81 times for the year ended December 31, 2017, and from 1.87 times for the trailing twelve months ended As mentioned above, RME continued to make progress on reducing both used and new equipment on a sequential basis in the third quarter. Financial Statements and Management's Discussion and Analysis ("MD&A") The MD&A as well as the unaudited financial statements and notes to the financial statements for the three and nine month periods ended 2018 and 2017, are available online at and

4 NON-IFRS MEASURES We use terms which do not have standardized meanings under IFRS. As these non-ifrs financial measures do not have standardized meanings prescribed by IFRS, they are unlikely to be comparable to similar measures presented by other issuers. Our definition for each term is as follows: Adjusted Diluted Earnings per Share is calculated by eliminating from net earnings, the after-tax impact of the losses (gains) arising from RME s derivative financial instruments and DSUs, as well as the expense (recovery) associated with its SARs. These items arise primarily from changes in RME s share price as well as fluctuations in interest rates and are not reflective of RME s core operations. RME also adjusts for any non-recurring charges (recoveries) recognized in net earnings. Management deems non-recurring charges (recoveries) to be unusual or infrequent items that RME incurs outside of its common day-to-day operations. Adjusting for these items allows management to isolate and analyze diluted earnings per share from core business operations. For the periods presented, expenses pertaining to the acquisition and integration of JBFE and Olds and losses recognized on the disposition of vacant land have been identified as non-recurring. Adjusted EBITDA is derived by eliminating the following items from net earnings: finance costs associated with long-term debt; income taxes; depreciation and amortization; the impact of the losses (gains) arising from derivative financial instruments and DSUs; and the expense (recovery) associated with SARs. Adjusting net earnings for these items allows management to consistently compare periods by removing the impact of fluctuations in tax rates, long-term assets, financing costs related to RME s capital structure and RME s share price. RME also adjusts for any non-recurring charges (recoveries) recognized in Adjusted EBITDA. Management deems non-recurring charges (recoveries) to be unusual or infrequent items that RME incurs outside of its common day-to-day operations. Adjusting for these items allows management to isolate and analyze EBITDA from core business operations. For the periods presented, expenses pertaining to the acquisition and integration of JBFE and Olds and losses recognized on the disposition of vacant land have been identified as non-recurring. Operating SG&A is calculated by eliminating from SG&A, depreciation and amortization expense as well as the impact of the losses (gains) arising from RME s DSUs and the expense (recovery) associated with its SARs. These items arise primarily from changes in RME s share price and are not reflective of RME s core operations. RME also adjusts for any non-recurring charges (recoveries) recognized in SG&A. Management deems non-recurring charges (recoveries) to be unusual or infrequent items that RME incurs outside of its common day-to-day operations. For the periods presented, expenses pertaining to the acquisition and integration of JBFE and Olds have been identified as non-recurring. The assessment of Operating SG&A facilitates the evaluation of discretionary expenses from ongoing operations. We target a sub-10% Operating SG&A as a percentage of total sales on an annual basis. Operating Cash Flow before Changes in Floor Plan is calculated by eliminating the impact of the change in floor plan payable (excluding floor plan assumed pursuant to business combinations) from cash flows from operating activities. Adjusting cash flows from operating activities for changes in the balance of floor plan payable allows management to isolate and analyze operating cash flows during a period, prior to any sources or uses of cash associated with equipment financing decisions.

5 RECONCILIATION OF NON-IFRS MEASURES TO IFRS Adjusted Diluted Earnings per Share Earnings used in the calculation of diluted earnings per share 5,548 8,849 11,250 14,641 Loss (gain) on derivative financial instruments 511 (1,308) 2,766 (1,447) (Gain) loss on DSUs (63) 49 (229) 83 SAR (recovery) expense (343) 643 (1,602) 764 Acquisition and integration costs Non-deductible loss on sale of vacant land Tax effect of adjustments (27%) (92) 166 (397) 162 Earnings used in the calculation of Adjusted Diluted Earnings per Share 5,797 8,399 12,323 14,844 Weighted average diluted shares used in the calculation of diluted earnings per share (in thousands) 19,888 19,384 19,890 19,384 Adjusted Diluted Earnings per Share Adjusted EBITDA Net earnings 5,548 8,849 11,250 14,641 Finance costs associated with long-term debt ,197 1,364 Depreciation and amortization expense 1,830 1,842 5,400 5,601 Income taxes 2,083 3,327 4,214 5,643 EBITDA 9,853 14,439 22,061 27,249 Loss (gain) on derivative financial instruments 511 (1,308) 2,766 (1,447) (Gain) loss on DSUs (63) 49 (229) 83 SAR (recovery) expense (343) 643 (1,602) 764 Acquisition and integration costs Loss on sale of vacant land Adjusted EBITDA 10,194 13,823 23,531 27,290 Operating SG&A SG&A 24,434 24,834 73,534 72,503 Depreciation and amortization expense (1,830) (1,842) (5,400) (5,601) Gain (loss) on DSUs 63 (49) 229 (83) SAR recovery (expense) 343 (643) 1,602 (764) Acquisition and integration costs (236) - (535) - Operating SG&A 22,774 22,300 69,430 66,055 Operating SG&A as a % of sales 9.8% 9.3% 9.2% 9.6% Operating Cash Flow before Changes in Floor Plan Cash flow from operating activities 14,992 9,275 14,359 3,531 Net (increase) decrease in floor plan payable 4 9,706 16,896 (51,777) 32,116 Floor plan assumed pursuant to business combinations 21,767-21,767 - Operating Cash Flow before Changes in Floor Plan 46,465 26,171 (15,651) 35,647

6 Conference Call RME will host a conference call and webcast to discuss its Q earnings at 9:00 a.m. MT (11:00 a.m. ET) today. Please note that the format of the webcast incorporates a visual presentation for investors and analysts. To listen to the live webcast and watch the presentation please use the following link: Within 24 hours of the event, the webcast will be available for replay at the link above until November 6, Those interested in participating in the conference call may do so by calling (toll free) or (647) An archived recording of the conference call will be available until November 22, 2018 by dialing (toll free) or , Conference ID: This archived recording will also be available at Caution regarding forward-looking statements Certain information set forth in this news release, including, without limitation, statements that imply any future earnings, profitability, economic benefit or other financial results; statements about revenue growth through 2023 under RME's growth plan; statements that RME's beliefs regarding its expected sources for increased revenue growth under RME's growth plan; statements regarding the seasonal nature of RME's business; statements discussing or implying any economic or financial results for the remainder of 2018; statements implying future economic or financial benefits as a result of trends in Western Canada's agriculture equipment profile; statements that imply any future earnings, profitability, economic benefit, or further U.S. expansion resulting from RME's new location in Tonganoxie, Kansas; statements discussing or implying any future dividend payments or changes or changes to RME's capital deployment strategies; and statements regarding our scheduled quarterly conference call, are forward-looking information within the meaning of applicable Canadian securities laws. By its nature, forward-looking information is subject to numerous risks and uncertainties, some of which are beyond RME's control. While this forward-looking information is based on information and assumptions that RME's management believes to be reasonable, there is significant risk that the forward-looking statements will prove not to be accurate. Readers are cautioned not to place undue reliance on forward-looking statements as a number of factors could cause actual future performance and events to differ materially from that expressed in the forward-looking statements. Accordingly, this news release is subject to the disclaimer and qualified by risks and other factors discussed by RME in its MD&A for the quarter ended 2018, and as discussed in RME's Annual Information Form dated March 13, 2018 under the heading "Risk Factors." Except as required by law, RME disclaims any intention or obligation to update or revise forward-looking statements, and further reserves the right to change, at any time, at its sole discretion, its current practice of updating its guidance and outlooks. About RME RME is Canada's largest agriculture equipment dealer with branches located throughout Alberta, Saskatchewan, and Manitoba. Through its dealer network, RME sells, rents, and leases new and used agriculture equipment and offers product support and finance to its customers. Additional information on RME is available at and on SEDAR at 1 See further discussion in "Non-IFRS Measures" and "Reconciliation of Non-IFRS Measures to IFRS" sections below. 2 Represented by the line item Earnings used in the calculation of Adjusted Diluted Earnings per Share within the calculation of Adjusted Diluted Earnings per Share, a Non-IFRS measure. 3 See further discussion in Non-IFRS Measures and Reconciliation of Non-IFRS Measures to IFRS sections below. 4 Includes change in floor plan payable classified as liabilities associated with assets held for sale. CONTACT: Rocky Mountain Dealerships Inc. Tom McMillan, tmcmillan@rockymtn.com