VANCOUVER, BC, Nov. 5, 2020 /PRNewswire/ - Ritchie Bros.
Auctioneers Incorporated (NYSE: RBA) (TSX: RBA) (the
"Company", "Ritchie Bros.", "we",
"us", or "our") reported the following results for the three months
ended September 30, 2020:
(All figures are presented in U.S. dollars)
Net income attributable to stockholders increased 80% to
$45.4 million, compared to
$25.3 million in Q3 2019. Diluted
earnings per share ("EPS") attributable to stockholders increased
78% to $0.41 per share in Q3 2020 as
compared to Q3 2019. Diluted adjusted EPS attributable to
stockholders* which excludes $4.3
million of severance costs ($3.2
million net of tax), increased 91% to $0.44 per share at Q3 2020 as compared to Q3
2019.
"We saw a strong contribution to GTV growth across all
geographic regions and channels and are pleased by the growth
demonstrated in the third quarter. Ritchie
Bros.' omnichannel platform continues to drive best in class
customer experiences and solid price performance. While 100% of
transactions have moved online, we continue to leverage all the
tools in our digital and technology tool box as well as our
physical sites for care, custody and control," said Ann Fandozzi, Chief Executive Officer of
Ritchie Bros.
Fandozzi continued, "Our priorities have not changed, we
continue to focus on the health and safety of our employees and
customers and preserving our strong financial position to benefit
our shareholders, customers and employees as the pandemic continues
to unfold."
Consolidated results:
- Total revenue in Q3 2020 increased 14% to $331.5 million as compared to Q3 2019
-
- Service revenue in Q3 2020 increased 25% to $222.7 million as compared to Q3 2019
- Inventory sales revenue in Q3 2020 decreased 2% to $108.9 million as compared to Q3 2019
- Total selling, general and administrative expenses ("SG&A")
in Q3 2020 increased 18% to $110.2
million as compared to Q3 2019
- Operating income in Q3 2020 increased 68% to $67.4 million as compared to Q3 2019
- Net income in Q3 2020 increased 80% to $45.5 million as compared to Q3 2019
- Adjusted Earnings Before Interest, Taxes, Depreciation and
Amortization* ("EBITDA") (non-GAAP measure) in Q3 2020 increased
55% to $91.9 million as compared to
Q3 2019
- Cash provided by operating activities was $265.6 million for the first nine months of
2020
- Cash on hand at Q3 2020 was $590.3
million, of which $470.3
million was unrestricted
Auctions & Marketplaces segment results:
- GTV1 in Q3 2020 increased 22% to $1.3 billion as compared to Q3 2019
- A&M total revenue in Q3 2020 increased 14% to $297.8 million as compared to Q3 2019
-
- Service revenue in Q3 2020 increased 26% to $188.9 million as compared to Q3 2019
- Inventory sales revenue in Q3 2020 decreased 2% to $108.9 million as compared to Q3 2019
Other Services segment results:
- Other Services total revenue in Q3 2020 increased 18% to
$33.7 million as compared to Q3
2019
- RBFS revenue in Q3 2020 increased 19% to $7.3 million as compared to Q3 2019
_____________________________________________
|
1 Gross
Transaction Value ("GTV") represents total proceeds from all items
sold at the Company's live on site auctions and online
marketplaces. GTV is not a measure of financial performance,
liquidity, or revenue, and is not presented in the Company's
consolidated financial statements.
|
|
The Company presents
both GAAP and non-GAAP measures to provide investors with
additional information. Providing these non-GAAP measures along
with GAAP measures allows for increased comparability of our
ongoing performance from period to period. Non-GAAP financial
measures referred to in this news release are labeled as "non-GAAP
measure" or designated as such with an asterisk (*). Please see
page 9-11 for explanations of why the Company uses these non-GAAP
measures and the reconciliation to the most comparable GAAP
financial measures.
|
Other Company developments:
- In Q3 2020, our Board of Directors authorized a share
repurchase program for the repurchase of up to $100 million of our common shares over the next
12 months, which was approved by the Toronto Stock Exchange
- On August 10, 2020, the Company
announced the appointment of Kevin
Geisner as Chief Strategy Officer
- On August 14, 2020, the Company
amended and extended its credit facilities totaling US$630.0 million with a syndicate of lenders
- On October 28, 2020, the Company
entered into a definitive agreement to acquire Rouse Services, a
privately held company that provides data intelligence and
performance benchmarking for approximately $275 million. Completion of the acquisition is
subject to customary closing conditions, including, among other
conditions, the expiration or termination of the applicable waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
Financial Overview
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in U.S. $000's,
except EPS and percentages)
|
|
Three months ended
September 30,
|
|
Nine months ended
September 30,
|
|
|
|
|
|
|
|
|
% Change
|
|
|
|
|
|
|
|
% Change
|
|
|
2020
|
|
2019
|
|
2020 over
2019
|
|
2020
|
|
2019
|
|
2020 over
2019
|
Service
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commissions
|
|
$
|
112,762
|
|
$
|
90,928
|
|
24
|
%
|
|
$
|
331,711
|
|
$
|
317,674
|
|
4
|
%
|
Fees
|
|
|
109,917
|
|
|
87,649
|
|
25
|
%
|
|
|
308,230
|
|
|
267,881
|
|
15
|
%
|
Total service
revenue
|
|
|
222,679
|
|
|
178,577
|
|
25
|
%
|
|
|
639,941
|
|
|
585,555
|
|
9
|
%
|
Inventory sales
revenue
|
|
|
108,863
|
|
|
111,219
|
|
(2)
|
%
|
|
|
353,906
|
|
|
400,892
|
|
(12)
|
%
|
Total
revenue
|
|
|
331,542
|
|
|
289,796
|
|
14
|
%
|
|
|
993,847
|
|
|
986,447
|
|
1
|
%
|
Service revenue as a %
of total revenue
|
|
|
67.2
|
%
|
|
61.6
|
%
|
560
|
bps
|
|
|
64.4
|
%
|
|
59.4
|
%
|
500
|
bps
|
Inventory sales revenue
as a % of total revenue
|
|
|
32.8
|
%
|
|
38.4
|
%
|
(560)
|
bps
|
|
|
35.6
|
%
|
|
40.6
|
%
|
(500)
|
bps
|
Costs of
services
|
|
|
39,223
|
|
|
36,382
|
|
8
|
%
|
|
|
118,026
|
|
|
122,719
|
|
(4)
|
%
|
Cost of inventory
sold
|
|
|
96,253
|
|
|
102,410
|
|
(6)
|
%
|
|
|
320,972
|
|
|
372,703
|
|
(14)
|
%
|
Selling, general and
administrative expenses
|
|
|
110,186
|
|
|
93,691
|
|
18
|
%
|
|
|
309,203
|
|
|
286,589
|
|
8
|
%
|
Operating
expenses
|
|
|
264,158
|
|
|
249,636
|
|
6
|
%
|
|
|
803,581
|
|
|
834,729
|
|
(4)
|
%
|
Cost of inventory sold
as a % of operating expenses
|
|
|
36.4
|
%
|
|
41.0
|
%
|
(460)
|
bps
|
|
|
39.9
|
%
|
|
44.6
|
%
|
(470)
|
bps
|
Operating
income
|
|
|
67,384
|
|
|
40,160
|
|
68
|
%
|
|
|
190,266
|
|
|
151,718
|
|
25
|
%
|
Operating income
margin
|
|
|
20.3
|
%
|
|
13.9
|
%
|
640
|
bps
|
|
|
19.1
|
%
|
|
15.4
|
%
|
370
|
bps
|
Net income
attributable to stockholders
|
|
|
45,387
|
|
|
25,266
|
|
80
|
%
|
|
|
121,239
|
|
|
97,466
|
|
24
|
%
|
Diluted EPS
attributable to stockholders
|
|
$
|
0.41
|
|
$
|
0.23
|
|
78
|
%
|
|
$
|
1.10
|
|
$
|
0.89
|
|
24
|
%
|
Diluted adjusted EPS
attributable to stockholders*
|
|
|
0.44
|
|
|
0.23
|
|
91
|
%
|
|
|
1.19
|
|
|
0.89
|
|
34
|
%
|
Effective tax
rate
|
|
|
25.3
|
%
|
|
21.1
|
%
|
420
|
bps
|
|
|
28.6
|
%
|
|
22.8
|
%
|
580
|
bps
|
Total GTV
|
|
|
1,321,379
|
|
|
1,084,241
|
|
22
|
%
|
|
|
3,962,386
|
|
|
3,756,679
|
|
5
|
%
|
Service
GTV
|
|
|
1,212,516
|
|
|
973,022
|
|
25
|
%
|
|
|
3,608,480
|
|
|
3,355,787
|
|
8
|
%
|
Service GTV as a % of
total GTV - Mix
|
|
|
91.8
|
%
|
|
89.7
|
%
|
210
|
bps
|
|
|
91.1
|
%
|
|
89.3
|
%
|
180
|
bps
|
Service revenue as a
% of total GTV- Rate
|
|
|
16.9
|
%
|
|
16.5
|
%
|
40
|
bps
|
|
|
16.2
|
%
|
|
15.6
|
%
|
60
|
bps
|
Inventory
GTV
|
|
|
108,863
|
|
|
111,219
|
|
(2)
|
%
|
|
|
353,906
|
|
|
400,892
|
|
(12)
|
%
|
Inventory sales
revenue as a % of total GTV- Mix
|
|
|
8.2
|
%
|
|
10.3
|
%
|
(210)
|
bps
|
|
|
8.9
|
%
|
|
10.7
|
%
|
(180)
|
bps
|
Segment Overview
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in U.S
$000's)
|
|
Three months ended
September 30, 2020
|
|
Nine months ended
September 30, 2020
|
|
|
A&M
|
|
Other
|
|
Consolidated
|
|
A&M
|
|
Other
|
|
Consolidated
|
Service
revenue
|
|
$
|
188,949
|
|
33,730
|
|
$
|
222,679
|
|
$
|
543,340
|
|
96,601
|
|
$
|
639,941
|
Inventory sales
revenue
|
|
|
108,863
|
|
—
|
|
|
108,863
|
|
|
353,906
|
|
—
|
|
|
353,906
|
Total
revenue
|
|
|
297,812
|
|
33,730
|
|
|
331,542
|
|
|
897,246
|
|
96,601
|
|
|
993,847
|
Ancillary and
logistical service expenses
|
|
|
—
|
|
16,550
|
|
|
16,550
|
|
|
—
|
|
45,368
|
|
|
45,368
|
Other costs of
services
|
|
|
21,733
|
|
940
|
|
|
22,673
|
|
|
69,018
|
|
3,640
|
|
|
72,658
|
Cost of inventory
sold
|
|
|
96,253
|
|
—
|
|
|
96,253
|
|
|
320,972
|
|
—
|
|
|
320,972
|
SG&A
expenses
|
|
|
103,933
|
|
6,253
|
|
|
110,186
|
|
|
290,077
|
|
19,126
|
|
|
309,203
|
Segment
profit
|
|
$
|
75,893
|
|
9,987
|
|
$
|
85,880
|
|
$
|
217,179
|
|
28,467
|
|
$
|
245,646
|
Total GTV
|
|
|
1,321,379
|
|
N/A
|
|
|
N/A
|
|
|
3,962,386
|
|
N/A
|
|
|
N/A
|
A&M service
revenue as a % of total GTV- Rate
|
|
|
14.3
|
%
|
N/A
|
|
|
N/A
|
|
|
13.7
|
%
|
N/A
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in U.S
$000's)
|
|
Three months ended
September 30, 2019
|
|
Nine months ended
September 30, 2019
|
|
|
A&M
|
|
Other
|
|
Consolidated
|
|
A&M
|
|
Other
|
|
Consolidated
|
Service
revenue
|
|
$
|
150,093
|
|
$
|
28,484
|
|
$
|
178,577
|
|
$
|
494,580
|
|
$
|
90,975
|
|
$
|
585,555
|
Inventory sales
revenue
|
|
|
111,219
|
|
|
—
|
|
|
111,219
|
|
|
400,892
|
|
|
—
|
|
|
400,892
|
Total
revenue
|
|
|
261,312
|
|
|
28,484
|
|
|
289,796
|
|
|
895,472
|
|
|
90,975
|
|
|
986,447
|
Ancillary and
logistical service expenses
|
|
|
—
|
|
|
13,285
|
|
|
13,285
|
|
|
—
|
|
|
43,516
|
|
|
43,516
|
Other costs of
services
|
|
|
21,431
|
|
|
1,666
|
|
|
23,097
|
|
|
74,799
|
|
|
4,404
|
|
|
79,203
|
Cost of inventory
sold
|
|
|
102,410
|
|
|
—
|
|
|
102,410
|
|
|
372,703
|
|
|
—
|
|
|
372,703
|
SG&A
expenses
|
|
|
88,138
|
|
|
5,553
|
|
|
93,691
|
|
|
268,786
|
|
|
17,803
|
|
|
286,589
|
Segment
profit
|
|
$
|
49,333
|
|
$
|
7,980
|
|
$
|
57,313
|
|
|
179,184
|
|
|
25,252
|
|
|
204,436
|
Total GTV
|
|
|
1,084,241
|
|
|
N/A
|
|
|
N/A
|
|
|
3,756,679
|
|
|
N/A
|
|
|
N/A
|
A&M service
revenue as a % of total GTV- Rate
|
|
|
13.8
|
%
|
|
N/A
|
|
|
N/A
|
|
|
13.2
|
%
|
|
N/A
|
|
|
N/A
|
Q3 2020 Consolidated Performance Overview
In response to COVID-19 pandemic, beginning in March 2020, the Company transitioned all our
traditional live on site auctions to online bidding utilizing our
existing online bidding technology and simultaneously ceased all
public attendance at our live action theaters. Our core online
auction channels (IronPlanet.com, GovPlanet.com, Marketplace-E)
continued to operate as usual.
GTV increased 22% to $1.3
billion in Q3 2020 with total GTV increasing across all our
regions. The increase was primarily in the US due to strong
execution of the strategic accounts and regional sales teams
driving year-over-year positive growth at both our live and online
auctions. The International sales team also delivered higher GTV
results as earlier lockdown measures lifted and border restrictions
eased in Europe, as well as a
higher level of private treaty deals in Australia. Total GTV increased in Canada mainly due to positive year-over-year
live auction performance, and auction calendar shifts.
Total revenue increased 14% to $331.5 million in Q3 2020.
Service revenue increased 25% with commissions
revenue increasing 24% and fees revenue increasing 25%. Fees
revenue was up 25% driven by higher fees from total GTV which was
up 22%. We also had positive performance in Ancillary as we earned
more fees from refurbishing and transporting sellers' equipment
driven by greater GTV activity in the US. Fees also grew due to
RBFS as well as higher buyer fees on more favorable mix.
Commissions revenue increased 24%, primarily in line with the
increase in Service GTV.
Inventory sales revenue decreased 2% representing lower
inventory sales volume. The lower sales volume was offset by strong
year-over-year improvement in the inventory sales margin rate
performance in the US and Canada. The decrease in the
inventory volume was attributable to lower government surplus
contracts in the US due to COVID-19 related government shutdowns
and the shift of the Canadian Grand Prairie auction to Q4 2020.
Partially offsetting these decreases was positive volume growth in
International as border restrictions eased in Europe during Q3 2020 together with large
private treaty deals in Australia.
Costs of services increased 8% to $39.2 million primarily driven by the 25%
increase in Service GTV, offset by significant cost reductions in
employee compensation, and travel, advertising and promotion as a
result of our response to the COVID-19 pandemic. Our response
included transitioning our live on site auctions to online bidding,
utilizing TAL solutions for selected International and on-the-farm
agricultural events, and implementing travel restrictions. We also
incurred higher ancillary and logistical service expenses, in line
with the increase in ancillary fees earned from refurbishing and
transporting sellers' equipment driven by higher GTV volume in the
US.
Cost of inventory decreased 6% to $96.3 million, primarily in line with lower
activity in inventory sales revenue. Cost of inventory sold
decreased at a higher rate than the decrease of inventory sales
revenue, indicating an increase in the revenue margin. The margin
improved due to rate improvement in US and Canada.
Selling, general and administrative ("SG&A") expenses
increased 18% to $110.2 million
primarily due to $8.8 million higher
short-term and long-term incentive expenses driven by strong
performance, higher headcount to support our growth initiatives,
and a one-time $4.3 million severance
costs related to the realignment of leadership to support the new
global operations organization, in line with strategic growth
priorities led by the new CEO. These increases were partially
offset by lower SG&A expenses related to lower travel,
advertising, and promotion costs as we implemented travel
restrictions.
Foreign exchange had a favourable impact on total revenue and an
unfavourable impact on expenses. These impacts were primarily due
to the fluctuations in the Euro and Australian dollar exchange
rates relative to the U.S. dollar.
Net income attributable to stockholders increased 80% to
$45.4 million, primarily related to
the higher operating income, lower interest expense, and partially
offset by the increase in the effective tax rate.
Primarily for the same reasons noted above, diluted EPS
attributable to stockholders increased 78% to $0.41 per share for Q3 2020 from $0.23 per share in Q3 2019. Diluted adjusted
EPS attributable to stockholders* increased 91% to $0.44 per share in Q3 2020, after excluding
$4.3 million of severance costs
($3.2 million net of tax).
Dividend Information
Quarterly dividend
On November
4, 2020, the Company declared a quarterly cash dividend of
$0.22 per common share payable on
December 16, 2020 to shareholders of
record on November 25, 2020.
Q3 2020 Earnings Conference Call
Ritchie Bros. is hosting a conference call to
discuss its financial results for the quarter ended September 30, 2020 at 8am
Pacific time / 11 am Eastern
time / 3pm GMT on November 6, 2020. The replay of the webcast will
be available through December 6,
2020.
Conference call and webcast details are available at the
following link:
https://investor.ritchiebros.com
About Ritchie
Bros.
Established in 1958, Ritchie Bros. (NYSE and TSX: RBA) is a global
asset management and disposition company, offering customers
end-to-end solutions for buying and selling used heavy equipment,
trucks and other assets. Operating in a number of sectors,
including construction, transportation, agriculture, energy, oil
and gas, mining, and forestry, the company's selling channels
include: Ritchie Bros. Auctioneers,
the world's largest industrial auctioneer offers live auction
events with online bidding; IronPlanet, an online marketplace with
featured weekly auctions and providing the exclusive IronClad
Assurance® equipment condition certification; Marketplace-E, a
controlled marketplace offering multiple price and timing options;
Mascus, a leading European online equipment listing service;
and Ritchie Bros. Private Treaty,
offering privately negotiated sales. The company's suite of
multichannel sales solutions also includes RB Asset Solutions, a
complete end-to-end asset management and disposition system.
Ritchie Bros. also offers
sector-specific solutions including GovPlanet, TruckPlanet, and
Kruse Energy Auctioneers, plus equipment financing and leasing
through Ritchie Bros. Financial
Services. For more information about Ritchie Bros., visit RitchieBros.com.
Forward-looking Statements
This news release contains
forward-looking statements and forward-looking information within
the meaning of applicable U.S. and Canadian securities legislation
(collectively, "forward-looking statements"), including, in
particular, statements regarding future financial and operational
results, including future auctions and estimated GTV thereof,
growth prospects and payment of dividends, and the ability of the
Company to satisfy the Rouse acquisition agreement conditions and
consummate the transaction. Forward-looking statements are
statements that are not historical facts and are generally,
although not always, identified by words such as "expect", "plan",
"anticipate", "project", "target", "potential", "schedule",
"forecast", "budget", "estimate", "intend", or "believe" and
similar expressions or their negative connotations, or statements
that events or conditions "will", "would", "may", "could",
"should", or "might" occur. All such forward-looking statements are
based on the opinions and estimates of management as of the date
such statements are made. Forward-looking statements necessarily
involve assumptions, risks and uncertainties, certain of which are
beyond the Company's control, including the duration and impact of
the COVID-19 pandemic on the Company's operations, the operations
of customers, and general economic conditions; the numerous factors
that influence the supply of and demand for used equipment;
economic and other conditions in local, regional and global
sectors; the Company's ability to successfully integrate
IronPlanet, and to receive the anticipated benefits of the
IronPlanet acquisition; and the risks and uncertainties set forth
in the Company's Annual Report on Form 10-K for the year ended
December 31, 2019 and the Company's
Form 10-Q for the quarter ended September
30, 2020, which are available on the SEC, SEDAR, and Company
websites. The foregoing list is not exhaustive of the factors that
may affect the Company's forward-looking statements. There can be
no assurance that forward-looking statements will prove to be
accurate, and actual results may differ materially from those
expressed in, or implied by, these forward-looking statements.
Forward looking statements are made as of the date of this news
release and the Company does not undertake any obligation to update
the information contained herein unless required by applicable
securities legislation. For the reasons set forth above, you should
not place undue reliance on forward looking statements.
GTV and Selected Condensed Consolidated Financial
Information
GTV and Condensed Consolidated Income Statements – Third
Quarter
(Expressed in thousands of United States dollars, except share, per share
amounts and percentages)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in U.S. $000's,
except EPS)
|
|
Three months ended
September 30,
|
|
Nine months ended
September 30,
|
|
|
|
|
|
|
|
|
%
Change
|
|
|
|
|
|
|
|
%
Change
|
|
|
|
2020
|
|
|
2019
|
|
2020 over
2019
|
|
|
2020
|
|
|
2019
|
|
2020 over
2019
|
GTV
|
|
$
|
1,321,379
|
|
$
|
1,084,241
|
|
22
|
%
|
|
$
|
3,962,386
|
|
$
|
3,756,679
|
|
5
|
%
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service
revenues
|
|
$
|
222,679
|
|
$
|
178,577
|
|
25
|
%
|
|
$
|
639,941
|
|
$
|
585,555
|
|
9
|
%
|
Inventory sales
revenue
|
|
|
108,863
|
|
|
111,219
|
|
(2)
|
%
|
|
|
353,906
|
|
|
400,892
|
|
(12)
|
%
|
Total
revenues
|
|
|
331,542
|
|
|
289,796
|
|
14
|
%
|
|
|
993,847
|
|
|
986,447
|
|
1
|
%
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs of
services
|
|
|
39,223
|
|
|
36,382
|
|
8
|
%
|
|
|
118,026
|
|
|
122,719
|
|
(4)
|
%
|
Cost of inventory
sold
|
|
|
96,253
|
|
|
102,410
|
|
(6)
|
%
|
|
|
320,972
|
|
|
372,703
|
|
(14)
|
%
|
Selling, general and
administration expenses
|
|
|
110,186
|
|
|
93,691
|
|
18
|
%
|
|
|
309,203
|
|
|
286,589
|
|
8
|
%
|
Acquisition-related
costs
|
|
|
—
|
|
|
45
|
|
(100)
|
%
|
|
|
—
|
|
|
752
|
|
(100)
|
%
|
Depreciation and
amortization expenses
|
|
|
18,436
|
|
|
17,692
|
|
4
|
%
|
|
|
55,586
|
|
|
51,919
|
|
7
|
%
|
Gain on disposition of
property, plant and equipment
|
|
|
(276)
|
|
|
(821)
|
|
(66)
|
%
|
|
|
(1,536)
|
|
|
(1,071)
|
|
43
|
%
|
Foreign exchange
loss
|
|
|
336
|
|
|
237
|
|
42
|
%
|
|
|
1,330
|
|
|
1,118
|
|
19
|
%
|
Total operating
expenses
|
|
|
264,158
|
|
|
249,636
|
|
6
|
%
|
|
|
803,581
|
|
|
834,729
|
|
(4)
|
%
|
Operating
income
|
|
|
67,384
|
|
|
40,160
|
|
68
|
%
|
|
|
190,266
|
|
|
151,718
|
|
25
|
%
|
Interest
expense
|
|
|
(8,737)
|
|
|
(10,090)
|
|
(13)
|
%
|
|
|
(26,801)
|
|
|
(31,023)
|
|
(14)
|
%
|
Other income,
net
|
|
|
2,280
|
|
|
1,962
|
|
16
|
%
|
|
|
6,714
|
|
|
5,680
|
|
18
|
%
|
Income before income
taxes
|
|
|
60,927
|
|
|
32,032
|
|
90
|
%
|
|
|
170,179
|
|
|
126,375
|
|
35
|
%
|
Income tax
expense
|
|
|
15,437
|
|
|
6,760
|
|
128
|
%
|
|
|
48,741
|
|
|
28,800
|
|
69
|
%
|
Net income
|
|
$
|
45,490
|
|
$
|
25,272
|
|
80
|
%
|
|
$
|
121,438
|
|
$
|
97,575
|
|
24
|
%
|
Net income
attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders
|
|
$
|
45,387
|
|
$
|
25,266
|
|
80
|
%
|
|
|
121,239
|
|
$
|
97,466
|
|
24
|
%
|
Non-controlling
interests
|
|
|
103
|
|
|
6
|
|
1,617
|
%
|
|
|
199
|
|
|
109
|
|
83
|
%
|
|
|
$
|
45,490
|
|
$
|
25,272
|
|
80
|
%
|
|
|
121,438
|
|
$
|
97,575
|
|
24
|
%
|
Earnings per share
attributable to stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.42
|
|
$
|
0.23
|
|
83
|
%
|
|
|
1.11
|
|
$
|
0.90
|
|
23
|
%
|
Diluted
|
|
$
|
0.41
|
|
$
|
0.23
|
|
78
|
%
|
|
|
1.10
|
|
$
|
0.89
|
|
24
|
%
|
Weighted average
number of share outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
109,018,469
|
|
|
108,003,390
|
|
1
|
%
|
|
|
108,887,026
|
|
|
108,453,525
|
|
0
|
%
|
Diluted
|
|
|
110,369,718
|
|
|
109,381,173
|
|
1
|
%
|
|
|
110,060,712
|
|
|
109,634,195
|
|
0
|
%
|
Condensed Consolidated Balance Sheets
(Expressed in
thousands of United States
dollars, except share data)
(Unaudited)
|
|
|
|
|
|
|
|
|
September 30, 2020
|
|
December 31, 2019
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
470,285
|
|
$
|
359,671
|
Restricted
cash
|
|
|
120,014
|
|
|
60,585
|
Trade and other
receivables
|
|
|
333,110
|
|
|
142,627
|
Less: allowance for
credit losses
|
|
|
(4,635)
|
|
|
(5,225)
|
Inventory
|
|
|
62,101
|
|
|
64,956
|
Other current
assets
|
|
|
26,279
|
|
|
50,160
|
Income taxes
receivable
|
|
|
5,619
|
|
|
6,810
|
Total current
assets
|
|
|
1,012,773
|
|
|
679,584
|
|
|
|
|
|
|
|
Property, plant and
equipment
|
|
|
481,047
|
|
|
484,482
|
Other non-current
assets
|
|
|
134,973
|
|
|
145,679
|
Intangible
assets
|
|
|
220,791
|
|
|
233,380
|
Goodwill
|
|
|
672,746
|
|
|
672,310
|
Deferred tax
assets
|
|
|
15,659
|
|
|
13,995
|
Total
assets
|
|
$
|
2,537,989
|
|
$
|
2,229,430
|
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
Auction proceeds
payable
|
|
$
|
496,936
|
|
$
|
276,188
|
Trade and other
payables
|
|
|
215,110
|
|
|
194,279
|
Income taxes
payable
|
|
|
11,241
|
|
|
7,809
|
Short-term
debt
|
|
|
20,285
|
|
|
4,705
|
Current portion of
long-term debt
|
|
|
9,926
|
|
|
18,277
|
Total current
liabilities
|
|
|
753,498
|
|
|
501,258
|
|
|
|
|
|
|
|
Long-term
debt
|
|
|
622,635
|
|
|
627,204
|
Other non-current
liabilities
|
|
|
144,677
|
|
|
151,238
|
Deferred tax
liabilities
|
|
|
52,312
|
|
|
42,743
|
Total
liabilities
|
|
|
1,573,122
|
|
|
1,322,443
|
|
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
Share
capital:
|
|
|
|
|
|
|
Common stock; no par
value, unlimited shares
|
|
|
|
|
|
|
authorized, issued and
outstanding shares:
|
|
|
|
|
|
|
108,630,537 (December
31, 2019: 109,337,781)
|
|
|
195,727
|
|
|
194,771
|
Additional paid-in
capital
|
|
|
48,253
|
|
|
52,110
|
Retained
earnings
|
|
|
767,188
|
|
|
714,051
|
Accumulated other
comprehensive loss
|
|
|
(51,684)
|
|
|
(59,099)
|
Stockholders'
equity
|
|
|
959,484
|
|
|
901,833
|
Non-controlling
interest
|
|
|
5,383
|
|
|
5,154
|
Total stockholders'
equity
|
|
|
964,867
|
|
|
906,987
|
Total liabilities and
equity
|
|
$
|
2,537,989
|
|
$
|
2,229,430
|
Condensed Consolidated Statements of Cash
Flows
(Expressed in thousands of United States dollars)
(Unaudited)
|
|
|
|
|
|
|
Nine months ended
September 30,
|
|
2020
|
|
2019
|
Cash provided by
(used in):
|
|
|
|
|
|
|
Operating
activities:
|
|
|
|
|
|
|
Net income
|
|
$
|
121,438
|
|
$
|
97,575
|
Adjustments for items
not affecting cash:
|
|
|
|
|
|
|
Depreciation and
amortization expenses
|
|
|
55,586
|
|
|
51,919
|
Stock option
compensation expense
|
|
|
4,401
|
|
|
4,852
|
Equity-classified
share unit expense
|
|
|
9,155
|
|
|
8,754
|
Deferred income tax
expense
|
|
|
8,250
|
|
|
(4,760)
|
Unrealized foreign
exchange (gain) loss
|
|
|
2,049
|
|
|
(129)
|
Gain on disposition of
property, plant and equipment
|
|
|
(1,536)
|
|
|
(1,071)
|
Amortization of debt
issuance costs
|
|
|
2,375
|
|
|
2,701
|
Amortization of
right-of-use assets
|
|
|
9,194
|
|
|
—
|
Gain on contingent
consideration from equity investment
|
|
|
(1,700)
|
|
|
—
|
Other, net
|
|
|
2,427
|
|
|
9,892
|
Net changes in
operating assets and liabilities
|
|
|
53,912
|
|
|
139,372
|
Net cash provided by
operating activities
|
|
|
265,551
|
|
|
309,105
|
Investing
activities:
|
|
|
|
|
|
|
Property, plant and
equipment additions
|
|
|
(9,865)
|
|
|
(6,915)
|
Intangible asset
additions
|
|
|
(19,886)
|
|
|
(18,377)
|
Proceeds on disposition
of property, plant and equipment
|
|
|
16,277
|
|
|
5,610
|
Distribution from
equity investment
|
|
|
4,212
|
|
|
—
|
Proceeds on contingent
consideration from equity investment
|
|
|
1,700
|
|
|
—
|
Other, net
|
|
|
(2,630)
|
|
|
(1,000)
|
Net cash used in
investing activities
|
|
|
(10,192)
|
|
|
(20,682)
|
Financing
activities:
|
|
|
|
|
|
|
Share
repurchase
|
|
|
(53,170)
|
|
|
(42,012)
|
Dividends paid to
stockholders
|
|
|
(67,639)
|
|
|
(60,791)
|
Issuances of share
capital
|
|
|
40,194
|
|
|
12,440
|
Payment of withholding
taxes on issuance of shares
|
|
|
(3,870)
|
|
|
(5,260)
|
Proceeds from
short-term debt
|
|
|
35,799
|
|
|
10,519
|
Repayment of short-term
debt
|
|
|
(22,357)
|
|
|
(24,979)
|
Repayment of long-term
debt
|
|
|
(11,134)
|
|
|
(29,022)
|
Debt issue
costs
|
|
|
(2,038)
|
|
|
—
|
Repayment of finance
lease obligations
|
|
|
(6,927)
|
|
|
(4,848)
|
Net cash used in
financing activities
|
|
|
(91,142)
|
|
|
(143,953)
|
Effect of changes in
foreign currency rates on cash, cash equivalents, and restricted
cash
|
|
|
5,826
|
|
|
1,350
|
Increase
|
|
|
170,043
|
|
|
145,820
|
Beginning of
period
|
|
|
420,256
|
|
|
305,567
|
Cash, cash
equivalents, and restricted cash, end of period
|
|
$
|
590,299
|
|
$
|
451,387
|
Selected Data
(Unaudited)
Industrial live on site auction metrics
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30,
|
|
Nine months ended
September 30,
|
|
|
|
|
|
|
% Change
|
|
|
|
|
|
%
Change
|
|
|
2020
|
|
2019
|
|
2020 over
2019
|
|
2020
|
|
2019
|
|
2020 over
2019
|
Number of
auctions
|
|
42
|
|
46
|
|
(9)
|
%
|
|
123
|
|
140
|
|
(12)
|
%
|
Bidder
registrations
|
|
231,500
|
|
165,500
|
|
40
|
%
|
|
677,100
|
|
508,750
|
|
33
|
%
|
Consignors
|
|
15,100
|
|
14,000
|
|
8
|
%
|
|
40,450
|
|
43,000
|
|
(6)
|
%
|
Buyers
|
|
40,000
|
|
34,800
|
|
15
|
%
|
|
114,250
|
|
109,050
|
|
5
|
%
|
Lots
|
|
115,350
|
|
98,400
|
|
17
|
%
|
|
312,450
|
|
305,150
|
|
2
|
%
|
Non-GAAP Measures
This news release references to
non-GAAP measures. Non-GAAP measures do not have a standardized
meaning and are, therefore, unlikely to be comparable to similar
measures presented by other companies. The presentation of this
financial information, which is not prepared under any
comprehensive set of accounting rules or principles, is not
intended to be considered in isolation of, or as a substitute for,
the financial information prepared and presented in accordance with
generally accepted accounting principles.
Adjusted Net Income Attributable to Stockholders* and Diluted
Adjusted EPS Attributable to Stockholders* Reconciliation
The Company believes that adjusted net income attributable to
stockholders* provides useful information about the growth or
decline of the net income attributable to stockholders for the
relevant financial period and eliminates the financial impact of
adjusting items the Company does not consider to be part of the
normal operating results. Diluted Adjusted EPS attributable to
stockholders* eliminates the financial impact of adjusting items
which are after-tax effects of significant non-recurring items that
the Company does not consider to be part of the normal operating
results, such as acquisition-related costs, management
reorganization costs, and certain other items, which the Company
refers to as 'adjusting items'.
The following table reconciles adjusted net income attributable
to stockholders* and diluted adjusted EPS attributable to
stockholders* to net income attributable to stockholders and
diluted EPS attributable to stockholders, which are the most
directly comparable GAAP measures in the consolidated income
statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in U.S. $000's,
except share and per share data, and percentages)
|
|
Three months ended
September 30,
|
|
Nine months ended
September 30,
|
|
|
|
|
|
|
|
|
|
%
Change
|
|
|
|
|
|
|
|
%
Change
|
|
|
|
2020
|
|
2019
|
|
2020 over
2019
|
|
2020
|
|
2019
|
|
2020 over
2019
|
|
Net income
attributable to stockholders
|
|
$
|
45,387
|
|
$
|
25,266
|
|
80
|
%
|
|
$
|
121,239
|
|
$
|
97,466
|
|
24
|
%
|
|
Pre-tax adjusting
items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
|
|
|
4,283
|
|
|
—
|
|
100
|
%
|
|
|
4,283
|
|
|
—
|
|
100
|
%
|
|
Current income tax
effect of adjusting items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
|
|
|
(1,065)
|
|
|
—
|
|
(100)
|
%
|
|
|
(1,065)
|
|
|
—
|
|
(100)
|
%
|
|
Current income tax
adjusting item:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in uncertain tax
provision
|
|
|
—
|
|
|
—
|
|
—
|
%
|
|
|
766
|
|
|
—
|
|
100
|
%
|
|
Deferred tax
adjusting item:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in uncertain tax
provision
|
|
|
—
|
|
|
—
|
|
—
|
%
|
|
|
5,462
|
|
|
—
|
|
100
|
%
|
|
Adjusted net income
attributable to stockholders*
|
|
$
|
48,605
|
|
$
|
25,266
|
|
92
|
%
|
|
$
|
130,685
|
|
$
|
97,466
|
|
34
|
%
|
|
Weighted average
number of dilutive shares outstanding
|
|
|
110,369,718
|
|
|
109,381,173
|
|
1
|
%
|
|
|
110,060,712
|
|
|
109,634,195
|
|
0
|
%
|
|
Diluted earnings per
share attributable to stockholders
|
|
$
|
0.41
|
|
$
|
0.23
|
|
78
|
%
|
|
$
|
1.10
|
|
$
|
0.89
|
|
24
|
%
|
|
Diluted adjusted EPS
attributable to Stockholders*
|
|
$
|
0.44
|
|
$
|
0.23
|
|
91
|
%
|
|
$
|
1.19
|
|
$
|
0.89
|
|
34
|
%
|
|
|
|
(1)
|
Please refer to page
11 for a summary of adjusting items for the three and nine months
ended September 30, 2020 and September 30, 2019.
|
(2)
|
Adjusted net income
attributable to stockholders* represents net income attributable to
stockholders excluding the effects of adjusting items.
|
(3)
|
Diluted adjusted EPS
attributable to stockholders* is calculated by dividing adjusted
net income attributable to stockholders*, net of the effect of
dilutive securities, by the weighted average number of dilutive
shares outstanding.
|
Adjusted EBITDA*
The Company believes that adjusted
EBITDA* provides useful information about the growth or decline of
our net income when compared between different financial
periods.
The following table reconciles adjusted EBITDA* to net income,
which is the most directly comparable GAAP measures in, or
calculated from, our consolidated income statements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in U.S. $000's,
except percentages)
|
|
Three months ended
September 30,
|
|
|
Nine months ended
September 30,
|
|
|
|
|
|
|
|
|
|
|
%
Change
|
|
|
|
|
|
|
|
%
Change
|
|
|
|
2020
|
|
2019
|
|
2020 over
2019
|
|
2020
|
|
2019
|
|
2020 over
2019
|
|
Net income
|
|
$
|
45,490
|
|
$
|
25,272
|
|
80
|
%
|
|
$
|
121,438
|
|
$
|
97,575
|
|
24
|
%
|
|
Add: depreciation and
amortization expenses
|
|
|
18,436
|
|
|
17,692
|
|
4
|
%
|
|
|
55,586
|
|
|
51,919
|
|
7
|
%
|
|
Add: interest
expense
|
|
|
8,737
|
|
|
10,090
|
|
(13)
|
%
|
|
|
26,801
|
|
|
31,023
|
|
(14)
|
%
|
|
Less: interest
income
|
|
|
(510)
|
|
|
(517)
|
|
(1)
|
%
|
|
|
(1,775)
|
|
|
(2,435)
|
|
(27)
|
%
|
|
Add: income tax
expense
|
|
|
15,437
|
|
|
6,760
|
|
128
|
%
|
|
|
48,741
|
|
|
28,800
|
|
69
|
%
|
|
Pre-tax adjusting
items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
|
|
|
4,283
|
|
|
—
|
|
100
|
%
|
|
|
4,283
|
|
|
—
|
|
100
|
%
|
|
Adjusted
EBITDA*
|
|
$
|
91,873
|
|
$
|
59,297
|
|
55
|
%
|
|
$
|
255,074
|
|
$
|
206,882
|
|
23
|
%
|
|
|
|
(1)
|
Please refer to page
11 for a summary of adjusting items during the three and nine
months ended September 30, 2020 and September 30, 2019.
|
(2)
|
Adjusted EBITDA* is
calculated by adding back depreciation and amortization expenses,
interest expense, and income tax expense, and subtracting interest
income from net income excluding the pre-tax effects of adjusting
items.
|
Adjusted Net Debt* and Adjusted Net Debt/Adjusted EBITDA*
Reconciliation
The Company believes that comparing adjusted net debt/adjusted
EBITDA* on a trailing 12-month basis for different financial
periods provides useful information about the performance of the
Company's operations as an indicator of the amount of time it would
take the Company to settle both the short and long-term debt. The
Company does not consider this to be a measure of liquidity, which
is the ability to settle only short-term obligations, but rather a
measure of how well the Company funds liquidity.
The following table reconciles adjusted net debt* to debt,
adjusted EBITDA* to net income, and adjusted net debt*/adjusted
EBITDA* to debt/ net income, respectively, which are the most
directly comparable GAAP measures in, or calculated from, our
consolidated financial statements.
|
|
|
|
|
|
|
|
|
|
(in U.S. $millions,
except percentages)
|
|
As at and for the 12 months ended September 30,
|
|
|
|
|
|
|
|
|
%
Change
|
|
|
|
2020
|
|
|
2019
|
|
2020 over
2019
|
Short-term
debt
|
|
$
|
20.3
|
|
$
|
5.8
|
|
250
|
%
|
Long-term
debt
|
|
|
632.6
|
|
|
689.3
|
|
(8)
|
%
|
Debt
|
|
|
652.9
|
|
|
695.1
|
|
(6)
|
%
|
Less: Cash and
cash equivalents
|
|
|
(470.3)
|
|
|
(309.6)
|
|
52
|
%
|
Adjusted net
debt*
|
|
|
182.6
|
|
|
385.5
|
|
(53)
|
%
|
Net income
|
|
$
|
173.0
|
|
$
|
133.0
|
|
30
|
%
|
Add: depreciation and
amortization expenses
|
|
|
74.2
|
|
|
69.1
|
|
7
|
%
|
Add: interest
expense
|
|
|
37.1
|
|
|
42.8
|
|
(13)
|
%
|
Less: interest
income
|
|
|
(3.1)
|
|
|
(3.3)
|
|
(6)
|
%
|
Add: income tax
expense
|
|
|
61.6
|
|
|
40.7
|
|
51
|
%
|
Pre-tax adjusting
items:
|
|
|
|
|
|
|
|
|
|
Share-based payment
expense recovery
|
|
|
(4.1)
|
|
|
—
|
|
(100)
|
%
|
Severance
|
|
|
4.3
|
|
|
—
|
|
100
|
%
|
Adjusted
EBITDA*
|
|
$
|
343.0
|
|
$
|
282.3
|
|
22
|
%
|
Debt/net
income
|
|
|
3.8
|
x
|
|
5.2
|
x
|
(27)
|
%
|
Adjusted net
debt*/adjusted EBITDA*
|
|
|
0.5
|
x
|
|
1.4
|
x
|
(64)
|
%
|
|
|
(1)
|
Please refer to page
11 for a summary of adjusting items for the trailing 12-months
ended September 30, 2020 and September 30, 2019.
|
(2)
|
Adjusted EBITDA* is
calculated by adding back depreciation and amortization expenses,
interest expense, and income tax expense, and subtracting interest
income from net income excluding the pre-tax effects of adjusting
items.
|
(3)
|
Adjusted net debt* is
calculated by subtracting cash and cash equivalents from short and
long-term debt.
|
(4)
|
Adjusted net
debt*/adjusted EBITDA* is calculated by dividing adjusted net debt*
by adjusted EBITDA*.
|
Operating Free Cash Flow* ("OFCF") Reconciliation
The
Company believes OFCF*, when compared on a trailing 12-month basis
to different financial periods provides an effective measure of the
cash generated by the business and provides useful information
regarding cash flows remaining for discretionary return to
stockholders, mergers and acquisitions, or debt reduction. The
balance sheet scorecard includes OFCF* as a performance metric.
OFCF* is also an element of the performance criteria for certain
annual short-term and long-term incentive awards.
The following table reconciles OFCF* to cash provided by
operating activities, which is the most directly comparable GAAP
measure in, or calculated from, the consolidated statements of cash
flows:
|
|
|
|
|
|
|
|
|
|
(in U.S. $millions,
except percentages)
|
|
12 months ended
September 30,
|
|
|
|
|
|
|
|
|
%
Change
|
|
|
|
2020
|
|
|
2019
|
|
2020 over
2019
|
Cash provided by
operating activities
|
|
$
|
289.2
|
|
$
|
356.2
|
|
(19)
|
%
|
Property, plant and
equipment additions
|
|
|
16.5
|
|
|
10.4
|
|
59
|
%
|
Intangible asset
additions
|
|
|
28.9
|
|
|
25.1
|
|
15
|
%
|
Proceeds on
disposition of property plant and equipment
|
|
|
(16.6)
|
|
|
(13.7)
|
|
21
|
%
|
Net capital
spending
|
|
$
|
28.8
|
|
$
|
21.8
|
|
32
|
%
|
OFCF*
|
|
$
|
260.4
|
|
$
|
334.4
|
|
(22)
|
%
|
|
|
(1)
|
OFCF* is calculated
by subtracting net capital spending from cash provided by operating
activities.
|
Adjusting items during the trailing 12-months ended
September 30, 2020 were:
Recognized in the third quarter of 2020
- $4.3 million ($3.2 million after tax, or $0.03 per diluted share) of severance costs
related to the realignment of leadership to support the new global
operations organization, in line with strategic growth priorities
led by the new CEO.
Recognized in the second quarter of 2020
- $6.2 million ($0.06 per diluted share) in current and deferred
income tax expense related to an unfavourable adjustment to reflect
final regulations published regarding hybrid financing
arrangements.
Recognized in the first quarter of 2020
- There were no adjustment items recognized in the first quarter
of 2020.
Recognized in the fourth quarter of 2019
- $4.1 million ($3.4 million after tax, or $0.03 per diluted share) in share-based payment
expense recovery related to the departure of our former CEO.
Adjusting items during the trailing 12-months ended
September 30, 2019 were:
Recognized in the third quarter of 2019
- There were no adjustment items recognized in the third quarter
of 2019.
Recognized in the second quarter of 2019
- There were no adjustment items recognized in the second quarter
of 2019.
Recognized in the first quarter of 2019
- There were no adjustment items recognized in the first quarter
of 2019.
Recognized in the fourth quarter of 2018
- There were no adjustment items recognized in the fourth quarter
of 2018.
View original
content:http://www.prnewswire.com/news-releases/ritchie-bros-reports-third-quarter-2020-results-301167409.html
SOURCE Ritchie Bros.
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