CALGARY, Alberta--(BUSINESS WIRE)--Rocky Mountain Dealerships Inc. ("RME") (TSX: RME), Canada's largest agriculture equipment dealer, today announced that its Board of Directors (the "Board") declared a quarterly dividend of $0.015 per common share on RME’s outstanding common shares. The common share dividend is payable on June 30, 2020, to shareholders of record at the close of business on June 23, 2020.
The reduced dividend follows an April 29, 2020 announcement that the company anticipated reducing its quarterly dividend to no more than $0.06 per share as part of its response to COVID-19, and oil and capital markets realities. The declared $0.015 per share reflects the Board’s deliberate caution in respect of emerging data and trends in both the agriculture equipment market and the broader economy being affected by global economic uncertainties. The Board believes this is a prudent move in unprecedented global economic uncertainty when the economic recovery outlook is difficult to predict and extremely complex. RME does not believe any dividend level is permanent – we continue to believe strongly in the principle of returning capital to shareholders.
The reduced dividend generates cash savings of approximately $8.3 million on an annualized basis, providing the company with additional flexibility to meet challenges and opportunities in coming months.
The Board intends to continue to review the dividend on a quarter by quarter basis. Investors should be aware that future dividends remain subject to approval by RME's Board, and that the Board may, at any time, increase, decrease or suspend payment of the dividend.
This dividend is designated by RME to be an "eligible dividend" for the purposes of the Income Tax Act (Canada) and any similar provincial or territorial legislation. An enhanced dividend tax credit applies to "eligible dividends" paid to Canadian residents. Please consult with your own tax advisor for advice with respect to the income tax consequences to you from RME designating its dividends as "eligible dividends.”
About Rocky Mountain Dealerships Inc. (TSX: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 construction and agriculture equipment and offers product support and finance to its customers.