Calendar year 2020 will certainly be a year none of us will forget! Our theme this year, “Growth through Uncertainty” certainly applies to what we faced for our 2021 fiscal year. Rocky Mountain Supply was able to demonstrate its resilience through these uncertain times and pull off what could be considered the best in the company’s history.
Grow, we did, in many ways. About the only area we did not grow in was dollar sales. Sales finished the year at $83,276,776, slightly below last year’s $84,031,462. The primary reason for the slight dip in dollar sales was the result of a significant drop in fuel prices and fertilizer prices. Two major commodity areas that RMSI sells throughout the year. If these commodity prices would have stayed somewhat consistent with what we have seen in recent years, we likely would have touched $100 million in sales. Local net savings ended at $3,240,003, which is $2,243,294 better than the previous year. An extremely strong year, especially with the challenges presented by COVID-19. When our local net savings is added to our earnings from Montana Energy Alliance, RMSI’s propane joint venture, as well as regional cooperative patronage dividends, total pre-tax net savings ended at $7,458,722. Again, by all accounts, a very exceptional year!
We thank you, our members, and customers, along with the commitment and hard work of our employees for all you did help accomplish this result. This continues to build upon the financial strength of your cooperative that will continue to allow us to invest, grow and be relevant long into the future!
Part of what allowed us to achieve the success we did this past year is we did not have any, what we would call, “internal disruption”. What this means is that this is one of the very few years in recent memory that we did not have a remodel project impact the operations of one of our locations. It was a year in which RMSI was essentially fully functional. This year provides an example of what this cooperative is capable of when it is fully functioning.
As mentioned earlier in this message, our dollar sales were down slightly from the previous year. However, we set sales records in many product areas including fuel gallons, fertilizer tons, in-store dollar sales and seed sales. This is attributable to the effort of the sales and operations staff in each of our operating divisions. Over the last 5 years RMSI has invested not only in its facilities, but also its people. Today, we have 7 employees essentially fully investing their time in the country working with our members and customers to help them be more successful at what they do. Offering RMSI products and services in this process. Prior to the 5-year time frame mentioned previously, RMSI essentially did not have any employees committed to being in the country full-time. Now that these employees have had a couple years under their belts working with all of you establishing relationships, this investment along with their time and effort is paying great dividends!
The decision was also made for RMSI to participate in the Paycheck Protection Program (PPP) offered by the U.S. Federal Government early in the onset of the pandemic. At the time, we were very uncertain about how the pandemic would impact our business. It was determined that if we were negatively impacted, this program will help to ensure we keep employees on board to serve our members and customers in as normal of fashion as possible.
As it relates to fixed asset reinvestment, RMSI did and will continue to replace and upgrade rolling stock such as fuel delivery trucks, transport trucks and trailers, fertilizer tenders and application equipment and facility upgrades and repairs. This is table stakes just to remain in the business. We did complete one business acquisition through the 2021 fiscal year that has paid dividends from day one of its acquisition. This was the fuel business owned by the Danhof’s in Amsterdam, MT. This acquisition included a refined fuel bulk route with delivery trucks, refined fuel bulk plant location in Amsterdam as well as a card activated retail fueling site in Amsterdam. Shortly after acquisition, we rebranded all the rolling stock and locations to Rocky Mountain Supply and the retail “Cenex” fuel brand which included upgrades the fuel dispensers and canopy at the retail fueling site. This has been a great acquisition and certainly contributed to the growth in our refined fuels business.
We will also continue to make great efforts to return as much cash as we are able to the country in the form of both cash patronage as well as equity retirements. As a result of our strong performance in fiscal year 2021, we plan to send approximately $1,600,000 to our members from cash patronage and equity retirements! One other change we are implementing this year that will benefit our agricultural producer members is the use of non-qualified equity as the form of equity being distributed as part of the patronage dividend distribution. What this form of equity distribution does for you, our member, is make the equity portion of the distribution non-taxable in the year it is received. The member will only pay tax on the portion received in cash. Please look for more information on this in a future Rocky Talk newsletter as well as our website.
As mentioned at the beginning of this message, when we began fiscal year 2021, we, along with everyone else, was hit with the brunt of the COVID-19 pandemic. This created a tremendous amount of uncertainty in our business and society in general. This cooperative persevered through this uncertainty, trying to create an atmosphere that was as “normal” as possible and had another terrific year. All this would not have been possible without the effort and commitment of our employees. There were some unique challenges experienced this year that made it a bit more difficult to get the job done, but everyone worked through it all doing a great job serving our members and customers!!!
Lastly, thank you to all of you, our members, and customers, without your enduring commitment, this cooperative would not experience the success it has! Your resilience through this past year must be admired! Thank you for your business and trust that you put in Rocky Mountain Supply every day!
CEO Rocky Mountain Supply
Board President Rocky Mountain Supply
View the RMS annual report (PDF, 5.23 MB)