|
Ritchie Bros. reports third quarter 2018 results
VANCOUVER, Nov. 8, 2018 /PRNewswire/ - Ritchie Bros. Auctioneers Incorporated (NYSE & TSX: RBA, the "Company" or "Ritchie Bros.") reported the following results for the three months ended September 30, 2018:
(All figures are presented in U.S. dollars)
Net income attributable to stockholders of $23.1 million increased 125% compared to $10.3 million for the same quarter in 2017. Diluted earnings per share ("EPS") attributable to stockholders increased 133% to $0.21 versus $0.09 in the third quarter of 2017, while diluted adjusted EPS attributable to stockholders1 (non-GAAP measure) which excludes a $4.9 million gain on sale of an equity accounted for investment and acquisition-related costs, increased 100% to $0.18 from $0.09 in the third quarter of 2017. Other key third quarter highlights included:
Consolidated results:
- Total revenues of $245.3 million increased 8% over the third quarter of 2017
- Total Company agency proceeds2 (non-GAAP measure) of $159.3 million increased 13% from 141.0 million in the third quarter of 2017
- Total selling, general and administrative expenses ("SG&A") of $88.3 million increased 4% from $85.3 million in the third quarter of 2017
- Cash provided by operating activities of $97.1 million for the nine-month period ended September 30, 2018
Auctions & Marketplaces ("A&M") segment:
- Gross Transaction Value ("GTV")3 of $1.0 billion up 2% over the third quarter of 2017
- Total revenues of $218.6 million increased 8% from $202.7 million in the third quarter of 2017
- A&M agency proceeds4 (non-GAAP measure) of $144.2 million increased 11% from $130.2 million in the third quarter of 2017
- A&M revenue rate5 of 21.0% and A&M agency proceeds rate6 (non-GAAP measure) of 13.9%, each improved 110 basis points ("bps") over the third quarter of 2017
"Our focus on new business and executing our multi-channel strategy in a tight supply environment resulted in strong revenue and agency proceeds growth with sequential improvement in our A&M revenue rate. The revenue growth coupled with disciplined expense management improved our operating leverage which contributed to doubling our diluted adjusted EPS to $0.18. Despite slightly lower live auction volumes due to fewer live and agricultural events versus last year, our online marketplaces channel showed a second straight quarter of solid momentum with 16% GTV growth in the quarter. We also continue to be pleased with our Services business performance delivering double digit revenue growth once again led by RBFS up 40% and Mascus up 15%," said Ravi Saligram, Chief Executive Officer.
Saligram continued "We are encouraged with the progress we are making as a combined company and our ability to grow both our top line and earnings together with strong cash flow in the quarter. Heading into the fourth quarter, our priorities remain focused on building momentum on our sales execution and fully leveraging our multi-channel offerings to deliver superior service to our existing customers and drive new customer acquisition."
1
| Diluted adjusted EPS attributable to stockholders is a non-GAAP financial measure. The Company believes that comparing diluted adjusted EPS attributable to stockholders for different financial periods provides useful information about the growth or decline of its diluted EPS 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 its normal operating results. Diluted adjusted EPS attributable to stockholders is calculated by dividing adjusted net income attributable to stockholders (non-GAAP measure), net of the effect of dilutive securities, by the weighted average number of dilutive shares outstanding. Diluted adjusted EPS attributable to stockholders is reconciled to the most directly comparable GAAP measures in the Company's consolidated financial statements under "Non-GAAP Measures".
| 2
| The Company's income statement scorecard includes the non-GAAP measure performance metric, agency proceeds. Agency proceeds is also an element of the performance criteria for certain annual short-term incentive awards the Company grants to its employees and officers. The Company calculates agency proceeds by subtracting the cost of inventory sold and ancillary and logistical service expenses from total revenues.
| 3
| 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.
| 4
| A&M agency proceeds is a non-GAAP financial measure that provides useful information about the performance of the Company's A&M contracts for different financial periods. A&M agency proceeds is calculated as A&M total revenues less cost of inventory sold and is reconciled to the most directly comparable GAAP measures in the Company's consolidated financial statements under "Non-GAAP Measures".
| 5
| The Company believes A&M segment total revenues are best understood by considering their relationship to GTV. The metric that the Company uses to measure that performance is A&M revenue rate, which is calculated as A&M total revenues divided by GTV.
| 6
| A&M agency proceeds rate is a non-GAAP financial measure that provides useful information about the performance of our operations by comparing the margins we earn on our contracts for different financial periods. A&M agency proceeds rate is calculated by dividing A&M agency proceeds (non-GAAP measure) by GTV. A&M agency proceeds rate is reconciled to the most directly comparable GAAP measures in our consolidated financial statements under "Non-GAAP Measures".
|
Financial Overview
(Unaudited)
| (in U.S. $000's, except EPS)
| Three months ended September 30,
|
| Nine months ended September 30,
|
|
|
|
|
| % Change
|
|
|
|
|
| % Change
|
| 2018
| 2017
| 2018 over
2017
|
|
| 2018
|
| 2017
| 2018 over
2017
| Service revenues
| $
| 161,374
| $
| 145,938
| 11%
|
| $
| 551,736
| $
| 442,066
| 25%
| Revenue from inventory sales
|
| 83,972
|
| 81,463
| 3%
|
|
| 262,318
|
| 237,375
| 11%
| Total revenues
|
| 245,346
|
| 227,401
| 8%
|
|
| 814,054
|
| 679,441
| 20%
| Costs of services
|
| 33,053
|
| 33,461
| (1%)
|
|
| 112,743
|
| 94,093
| 20%
| Cost of inventory sold
|
| 74,341
|
| 72,476
| 3%
|
|
| 231,834
|
| 207,603
| 12%
| Selling, general and administrative expenses
|
| 88,323
|
| 85,335
| 4%
|
|
| 287,052
|
| 230,287
| 25%
| Acquisition-related costs
|
| 2,007
|
| 3,587
| (44%)
|
|
| 5,039
|
| 35,162
| (86%)
| Operating income
|
| 31,194
|
| 16,931
| 84%
|
|
| 128,862
|
| 67,416
| 91%
| Adjusted operating income (non-
|
|
|
|
|
|
|
|
|
|
|
| GAAP measure)
|
| 32,695
|
| 16,931
| 93%
|
|
| 130,363
|
| 91,589
| 42%
| Net income attributable to stockholders
|
| 23,138
|
| 10,261
| 125%
|
|
| 85,993
|
| 38,273
| 125%
| Adjusted net income attributable to
|
|
|
|
|
|
|
|
|
|
|
| stockholders (non-GAAP measure)
|
| 19,328
|
| 10,261
| 88%
|
|
| 82,183
|
| 59,364
| 38%
| Diluted earnings per share
|
|
|
|
|
|
|
|
|
|
|
| attributable to stockholders
| $
| 0.21
| $
| 0.09
| 133%
|
| $
| 0.79
| $
| 0.35
| 125%
| Diluted adjusted EPS attributable to
|
|
|
|
|
|
|
|
|
|
|
| stockholders (non-GAAP measure)
| $
| 0.18
| $
| 0.09
| 100%
|
| $
| 0.75
| $
| 0.55
| 36%
| GTV
| $
| 1,039,427
| $
| 1,019,322
| 2%
|
| $
| 3,626,551
| $
| 3,173,050
| 14%
| Agency proceeds (non-GAAP measure)
| $
| 159,323
| $
| 141,047
| 13%
|
| $
| 535,978
| $
| 431,732
| 24%
| A&M revenue
| $
| 218,576
| $
| 202,718
| 8%
|
| $
| 725,394
| $
| 608,169
| 19%
| A&M revenue rate
|
| 21.0%
|
| 19.9%
| 110 bps
|
|
| 20.0%
|
| 19.2%
| 80 bps
| A&M agency proceeds (non-GAAP measure)
| $
| 144,235
| $
| 130,242
| 11%
|
| $
| 493,560
| $
| 400,566
| 23%
| A&M agency proceeds rate (non-GAAP measure)
|
| 13.9%
|
| 12.8%
| 110 bps
|
|
| 13.6%
|
| 12.6%
| 100 bps
|
Effective January 1, 2018, the Company adopted ASU 2014-09 Revenue from Contracts with Customers ("Topic 606"). Revenues from inventory sales and ancillary and logistical service revenues are presented gross of the related expenses rather than net. Accordingly, in addition to total revenues, the Company has added a new metric to its disclosures called agency proceeds (non-GAAP measure), which presents revenues as previously reported and is calculated as total revenues under Topic 606 less the cost of inventory sold and ancillary and logistical service expenses. Prior periods presented have been restated to conform with this new revenue standard. For further details on Topic 606, refer to the Annual Report on Form 10-K for the year ended December 31, 2017 and the Quarterly Reports on Form 10-Q for the periods ended March 31, 2018, June 30, 2018 and September 30, 2018.
Results of operations – third quarter update
For the three months ended September 30, 2018
Consolidated Performance Highlights
Total revenues increased 8% to $245.3 million driven by higher fee revenues, inventory sales performance in Europe, GTV growth and strong RBFS growth partially offset by a reduction in the year-over-year number of live on site auctions. Foreign exchange also had a negative impact on total revenues in the third quarter of 2018.
Agency proceeds (non-GAAP measure) improved 13% to $159.3 million versus $141.0 million in the third quarter of 2017 driven by growth in GTV and service revenues, which includes higher fee revenues related to the partial fee harmonization.
Costs of services decreased 1% to $33.1 million in the third quarter partially due to the lower number of live on site auctions versus the previous year.
Selling, general and administrative ("SG&A") expenses increased $3.0 million, or 4% primarily due to incremental overhead costs incurred to support the Company's GovPlanet's non-rolling stock contract with the Defense Logistics Agency and higher share unit expense. These increases were partially offset by the favorable impact of foreign exchange during the comparative period.
Operating income increased $14.3 million, or 84%, driven by higher total service revenues mainly from higher fee revenues and auction revenue growth partially offset by higher SG&A, depreciation and amortization, and cost of inventory sold. Foreign exchange had a negative impact on operating income in the third quarter of 2018. Adjusted operating income7 (non-GAAP measure) increased 93% during the third quarter of 2018 compared to the third quarter of 2017, which excluded the impact of $1.5 million of non-recurring acquisition-related severance costs.
Net income attributable to stockholders increased $12.9 million, or 125%, primarily due to the increase in operating income and a $4.9 million gain on sale of an equity accounted for investment, partially offset by higher income taxes in the third quarter of 2018 compared to an income tax recovery in the third quarter of 2017. Adjusted net income attributed to stockholders8 (non-GAAP measure) increased $9.0 million, or 88%, to $19.3 million in the third quarter of 2018 from $10.3 million in the third quarter of 2017.
Primarily for the same reasons noted above, diluted EPS attributable to stockholders increased 133% to $0.21 per share in the third quarter of 2018 from $0.09 per share in the third quarter of 2017. Diluted adjusted EPS attributed to stockholders (non-GAAP measure) increased 100% to $0.18 in the third quarter of 2018 from $0.09 in the third quarter of 2017.
__________________
| 7
| Adjusted operating income is a non-GAAP measure. We use income statement and balance sheet performance scorecards to align our operations with our strategic priorities. We concentrate on a limited number of metrics to ensure focus and to facilitate quarterly performance discussions. Our income statement scorecard includes the performance metric, adjusted operating income. We believe that comparing adjusted operating income for different financial periods provides useful information about the growth or decline of operating income for the relevant financial period. We calculate adjusted operating income by eliminating adjusting items from operating income. Adjusted operating income is reconciled to the most directly comparable GAAP measures in our consolidated financial statements under "Non-GAAP Measures" below.
| 8
| Adjusted net income attributable to stockholders is a non-GAAP financial measure. The Company believes that comparing adjusted net income attributable to stockholders for different financial periods provides useful information about the growth or decline of its 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 its normal operating results. Adjusted net income attributable to stockholders represents net income attributable to stockholders excluding the effects of adjusting items and is reconciled to the most directly comparable GAAP measures in the Company's consolidated financial statements under "Non-GAAP Measures".
|
Auctions & Marketplaces Segment Performance Highlights
GTV increased $20.1 million, or 2%, compared to the third quarter of 2017, led by a 16% increase in online auction volumes partially offset by a 0.7% decrease in live on site auctions. The decrease in live on site auctions was primarily due to significantly lower year-over-year GTV from agricultural auctions and the decrease in the number of live industrial on site auctions and sale days over the comparative period.
A&M total revenues increased 8% to $218.6 million in the third quarter compared to $202.7 million in the third quarter of 2017. The increase is primarily due to higher fee revenues and revenue from inventory sales mainly in our European operations, growth in auction volumes, and strong performance from Kruse Energy Auctioneers operations. These increases were partially offset by a reduction in the year over year number of live on site auctions. Foreign exchange also had a negative impact on total revenue in the third quarter of 2018.
A&M agency proceeds (non-GAAP measure) improved 11% to $144.2 million versus $130.2 million in the third quarter of 2017. The overall A&M agency proceeds rate (non-GAAP measure) improved 110 basis points to 13.9% from 12.8% in the third quarter of 2017.
Dividend Information
The Company declares a quarterly cash dividend of $0.18 per common share payable on December 19, 2018 to shareholders of record on November 28, 2018.
Q3 2018 Earnings Conference Call
Ritchie Bros. is hosting a conference call to discuss its financial results for the quarter ended September 30, 2018, at 8am Pacific time / 11 am Eastern time / 4 pm GMT on November 9, 2018. The replay of the webcast will be available through December 7, 2018.
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 multitude 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 offering live on site auction events with online bidding; IronPlanet, an online marketplace with featured weekly auctions and providing its exclusive IronClad Assurance® equipment condition certification program; Marketplace-E, an online auction marketplace; Mascus, a leading European online equipment listing service; and Ritchie Bros. Private Treaty, offering privately negotiated sales. The Company 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 the unprecedented choice provided by 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 growth prospects and payment of dividends. 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 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 Acquisition; and the risks and uncertainties set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2017, which is 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
(Expressed in thousands of United States dollars, except share and per share amounts)
(Unaudited)
| (in U.S. $000's, except EPS)
| Three months ended September 30,
|
| Nine months ended September 30,
|
|
|
|
|
| % Change
|
|
|
|
|
| % Change
|
| 2018
| 2017
| 2018 over
2017
|
|
| 2018
|
| 2017
| 2018 over
2017
| GTV
| $
| 1,039,427
| $
| 1,019,322
| 2%
|
| $
| 3,626,551
| $
| 3,173,050
| 14%
| Revenues:
|
|
|
|
|
|
|
|
|
|
|
| Service revenues
| $
| 161,374
| $
| 145,938
| 11%
|
| $
| 551,736
| $
| 442,066
| 25%
| Revenue from inventory sales
|
| 83,972
|
| 81,463
| 3%
|
|
| 262,318
|
| 237,375
| 11%
| Total revenues
|
| 245,346
|
| 227,401
| 8%
|
|
| 814,054
|
| 679,441
| 20%
| Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
| Costs of services
|
| 33,053
|
| 33,461
| (1%)
|
|
| 112,743
|
| 94,093
| 20%
| Cost of inventory sold
|
| 74,341
|
| 72,476
| 3%
|
|
| 231,834
|
| 207,603
| 12%
| SG&A expenses
|
| 88,323
|
| 85,335
| 4%
|
|
| 287,052
|
| 230,287
| 25%
| Acquisition-related costs
|
| 2,007
|
| 3,587
| (44%)
|
|
| 5,039
|
| 35,162
| (86%)
| Depreciation and amortization expenses
|
| 16,723
|
| 14,837
| 13%
|
|
| 49,451
|
| 37,047
| 33%
| Gain on disposition of property, plant and equipment
|
| (342)
|
| (42)
| 714%
|
|
| (958)
|
| (1,071)
| (11%)
| Impairment loss
|
| -
|
| -
| -
|
|
| -
|
| 8,911
| (100%)
| Foreign exchange loss (gain)
|
| 47
|
| 816
| (94%)
|
|
| 31
|
| (7)
| 543%
| Total operating expenses
|
| 214,152
|
| 210,470
| 2%
|
|
| 685,192
|
| 612,025
| 12%
| Operating income
|
| 31,194
|
| 16,931
| 84%
|
|
| 128,862
|
| 67,416
| 91%
| Interest expense
|
| (10,473)
|
| (10,558)
| (1%)
|
|
| (32,720)
|
| (27,311)
| 20%
| Other, net
|
| 7,182
|
| 592
| 1113%
|
|
| 8,995
|
| 6,346
| 42%
| Income before income taxes
|
| 27,903
|
| 6,965
| 301%
|
|
| 105,137
|
| 46,451
| 126%
| Income tax expense (recovery)
|
| 4,791
|
| (3,358)
| (243%)
|
|
| 19,091
|
| 7,982
| 139%
| Net income
| $
| 23,112
| $
| 10,323
| 124%
|
| $
| 86,046
| $
| 38,469
| 124%
| Net income (loss) attributable to:
|
|
|
|
|
|
|
|
|
|
|
| Stockholders
| $
| 23,138
| $
| 10,261
| 125%
|
| $
| 85,993
| $
| 38,273
| 125%
| Non-controlling interests
|
| (26)
|
| 62
| (142%)
|
|
| 53
|
| 196
| (73%)
|
| $
| 23,112
| $
| 10,323
| 124%
|
| $
| 86,046
| $
| 38,469
| 124%
| Earnings per share attributable
|
|
|
|
|
|
|
|
|
|
|
| to stockholders:
|
|
|
|
|
|
|
|
|
|
|
| Basic
| $
| 0.21
| $
| 0.10
| 110%
|
| $
| 0.80
| $
| 0.36
| 122%
| Diluted
| $
| 0.21
| $
| 0.09
| 133%
|
| $
| 0.79
| $
| 0.35
| 125%
| Weighted average number of share outstanding:
|
|
|
|
|
|
|
|
|
|
|
| Basic
|
| 108,365,427
|
| 107,120,618
| 1%
|
|
| 107,811,391
|
| 106,993,358
| 1%
| Diluted
|
| 109,887,194
|
| 108,178,303
| 2%
|
|
| 109,133,378
|
| 108,069,624
| 1%
|
Condensed Consolidated Balance Sheets
(Expressed in thousands of United States dollars, except share data)
(Unaudited)
|
| September 30,
|
| December 31,
|
| 2018
|
| 2017
| Assets
|
|
|
|
|
|
|
|
|
|
|
| Cash and cash equivalents
| $
| 228,764
|
| $
| 267,910
| Restricted cash
|
| 75,281
|
|
| 63,206
| Trade and other receivables
|
| 247,972
|
|
| 92,105
| Inventory
|
| 84,789
|
|
| 38,238
| Other current assets
|
| 40,236
|
|
| 27,610
| Income taxes receivable
|
| 8,589
|
|
| 19,418
| Total current assets
|
| 685,631
|
|
| 508,487
|
|
|
|
|
|
| Property, plant and equipment
|
| 504,738
|
|
| 526,581
| Equity-accounted investments
|
| 4,206
|
|
| 7,408
| Other non-current assets
|
| 26,549
|
|
| 24,146
| Intangible assets
|
| 251,422
|
|
| 261,094
| Goodwill
|
| 673,191
|
|
| 670,922
| Deferred tax assets
|
| 23,729
|
|
| 18,674
| Total assets
| $
| 2,169,466
|
| $
| 2,017,312
|
|
|
|
|
|
| Liabilities and Equity
|
|
|
|
|
|
|
|
|
|
|
| Auction proceeds payable
| $
| 325,985
|
| $
| 199,245
| Trade and other payables
|
| 179,659
|
|
| 164,553
| Income taxes payable
|
| 6,999
|
|
| 732
| Short-term debt
|
| 10,532
|
|
| 7,018
| Current portion of long-term debt
|
| 11,556
|
|
| 16,907
| Total current liabilities
|
| 534,731
|
|
| 388,455
|
|
|
|
|
|
| Long-term debt
|
| 740,222
|
|
| 795,985
| Other non-current liabilities
|
| 39,436
|
|
| 46,773
| Deferred tax liabilities
|
| 33,601
|
|
| 32,334
| Total liabilities
|
| 1,347,990
|
|
| 1,263,547
|
|
|
|
|
|
| Commitments
|
|
|
|
|
| Contingencies
|
|
|
|
|
| Contingently redeemable performance
|
|
|
|
|
| share units
|
| 864
|
|
| 9,014
| Stockholders' equity:
|
|
|
|
|
| Share capital:
|
|
|
|
|
| Common stock; no par value, unlimited shares
|
|
|
|
|
| authorized, issued and outstanding shares:
|
|
|
|
|
| 108,601,417 (December 31, 2017: 107,269,783)
|
| 179,348
|
|
| 138,582
| Additional paid-in capital
|
| 53,941
|
|
| 41,005
| Retained earnings
|
| 632,496
|
|
| 602,609
| Accumulated other comprehensive loss
|
| (50,273)
|
|
| (42,514)
| Stockholders' equity
|
| 815,512
|
|
| 739,682
| Non-controlling interest
|
| 5,100
|
|
| 5,069
| Total stockholders' equity
|
| 820,612
|
|
| 744,751
| Total liabilities and equity
| $
| 2,169,466
|
| $
| 2,017,312
|
Condensed Consolidated Statements of Cash Flows
(Expressed in thousands of United States dollars)
(Unaudited)
| Nine months ended September 30,
| 2018
|
|
| 2017
| Cash provided by (used in):
|
|
|
|
|
| Operating activities:
|
|
|
|
|
| Net income
| $
| 86,046
|
| $
| 38,469
| Adjustments for items not affecting cash:
|
|
|
|
|
| Depreciation and amortization expenses
|
| 49,451
|
|
| 37,047
| Impairment loss
|
| -
|
|
| 8,911
| Stock option compensation expense
|
| 6,711
|
|
| 10,996
| Equity-classified PSU expense
|
| 8,978
|
|
| 1,871
| Deferred income tax expense (recovery)
|
| (3,774)
|
|
| (9,583)
| Unrealized foreign exchange loss (gain)
|
| 501
|
|
| (1,011)
| Amortization of debt issuance costs
|
| 3,032
|
|
| 2,058
| Gain on disposition of equity investment
|
| (4,935)
|
|
| -
| Other, net
|
| (4,636)
|
|
| (2,090)
| Net changes in operating assets and liabilities
|
| (44,227)
|
|
| 11,849
| Net cash provided by operating activities
|
| 97,147
|
|
| 98,517
| Investing activities:
|
|
|
|
|
| Acquisition of IronPlanet, net of cash acquired
|
| -
|
|
| (675,851)
| Property, plant and equipment additions
|
| (13,394)
|
|
| (8,086)
| Intangible asset additions
|
| (19,410)
|
|
| (20,482)
| Proceeds on disposition of property, plant and equipment
|
| 2,524
|
|
| 3,487
| Proceeds on disposal of equity investment
|
| 6,147
|
|
| -
| Other, net
|
| (4,674)
|
|
| (667)
| Net cash used in investing activities
|
| (28,807)
|
|
| (701,599)
| Financing activities:
|
|
|
|
|
| Dividends paid to stockholders
|
| (56,116)
|
|
| (54,558)
| Dividends paid to NCI
|
| -
|
|
| (41)
| Issuances of share capital
|
| 27,072
|
|
| 7,934
| Payment of withholding taxes on issuance of shares
|
| (3,901)
|
|
| -
| Proceeds from short-term debt
|
| 6,949
|
|
| 6,850
| Repayment of short-term debt
|
| (3,372)
|
|
| (22,793)
| Proceeds from long-term debt
|
| -
|
|
| 325,000
| Repayment of long-term debt
|
| (58,825)
|
|
| (104,729)
| Debt issue costs
|
| -
|
|
| (12,624)
| Repayment of finance lease obligations
|
| (2,827)
|
|
| (1,565)
| Other, net
|
| (1,176)
|
|
| (1,431)
| Net cash provided by (used in) financing activities
|
| (92,196)
|
|
| 142,043
| Effect of changes in foreign currency rates on
|
|
|
|
|
| cash, cash equivalents, and restricted cash
|
| (3,215)
|
|
| 17,270
| Decrease
|
| (27,071)
|
|
| (443,769)
| Beginning of period
|
| 331,116
|
|
| 758,089
| Cash, cash equivalents, and restricted cash, end of period
| $
| 304,045
|
| $
| 314,320
|
A&M Segment Information
(Expressed in thousands of United States dollars)
(Unaudited)
|
|
|
|
|
|
| (in U.S. $000's)
| Three months ended September 30,
|
| Nine months ended September 30,
|
|
|
|
|
| % Change
|
|
|
|
|
| % Change
|
| 2018
| 2017
| 2018 over
2017
|
|
| 2018
|
| 2017
| 2018 over
2017
| Service revenues
| $
| 134,604
| $
| 121,255
| 11%
|
| $
| 463,076
| $
| 370,794
| 25%
| Revenue from inventory sales
|
| 83,972
|
| 81,463
| 3%
|
|
| 262,318
|
| 237,375
| 11%
| Total revenues
|
| 218,576
|
| 202,718
| 8%
|
|
| 725,394
|
| 608,169
| 19%
| Costs of services
|
| 20,059
|
| 18,381
| 9%
|
|
| 62,888
|
| 51,946
| 21%
| Cost of inventory sold
|
| 74,341
|
| 72,476
| 3%
|
|
| 231,834
|
| 207,603
| 12%
| SG&A expenses
|
| 83,542
|
| 81,736
| 2%
|
|
| 272,503
|
| 219,824
| 24%
| Impairment loss
|
| -
|
| -
| -
|
|
| -
|
| 8,911
| (100%)
| A&M profit
| $
| 40,634
| $
| 30,125
| 35%
|
| $
| 158,169
| $
| 119,885
| 32%
|
Selected Data
(Unaudited)
Live industrial auction data
|
| As at and for three months ended September 30,
|
| As at and for the nine months ended September 30,
|
|
|
| % Change
|
|
|
| % Change
|
| 2018
| 2017
| 2018 over
2017
|
| 2018
| 2017
| 2018 over
2017
| Number of consignments at industrial auctions
| 13,600
| 13,900
| (2%)
|
| 39,050
| 41,950
| (7%)
| Number of bidder registrations at industrial auctions
| 123,000
| 126,000
| (2%)
|
| 383,500
| 404,000
| (5%)
| Number of buyers at industrial auctions
| 31,400
| 31,100
| 1%
|
| 96,750
| 100,650
| (4%)
| Number of lots at industrial auctions
| 89,000
| 84,000
| 6%
|
| 273,500
| 276,000
| (1%)
| Number of permanent operational sites
| 35
| 39
| (10%)
|
| 35
| 39
| (10%)
| Number of regional operational sites
| 5
| 6
| (17%)
|
| 5
| 6
| (17%)
| Total auction sites
| 40
| 45
| (11%)
|
| 40
| 45
| (11%)
| Number of industrial auctions
| 45
| 58
| (22%)
|
| 130
| 169
| (23%)
|
Additional Topic 606 Information
The following table reconciles revenues as previously reported to total revenues under Topic 606:
|
|
| Prior to January 1, 2018
|
| New Revenue Standard
Adjustments
|
| On and after January 1,
2018
| (in U.S. $000's)
|
| Revenues as previously
reported (a)
|
| Cost of inventory sold1
(b)
|
| Ancillary and logistical
service expenses2 (c)
|
| Total revenues under the
new standard
(a)+(b)+(c)=(d)
| Quarter ended:
|
|
|
|
|
|
|
|
| December 31, 2017
| $
| 178,785
| $
| 98,895
| $
| 14,070
| $
| 291,750
| September 30, 2017
|
| 141,047
|
| 72,476
|
| 13,878
|
| 227,401
| June 30, 2017
|
| 166,186
|
| 71,726
|
| 14,701
|
| 252,613
| March 31, 2017
|
| 124,499
|
| 63,401
|
| 11,527
|
| 199,427
| Full year 2017
| $
| 610,517
| $
| 306,498
| $
| 54,176
| $
| 971,191
|
The following table reconciles cost of services as previously reported to cost of services under Topic 606:
|
|
| Prior to January 1, 2018
|
| New Revenue Standard
Adjustments
|
| On and after January 1,
2018
| (in U.S. $000's)
|
| Costs of services (a)
|
| Ancillary and logistical
service expenses2 (b)
|
| Costs of services under the new
standard (a) + (b) = (c)
| Quarter ended:
|
|
|
|
|
|
| December 31, 2017
| $
| 25,026
| $
| 14,070
| $
| 39,096
| September 30, 2017
|
| 19,583
|
| 13,878
|
| 33,461
| June 30, 2017
|
| 21,591
|
| 14,701
|
| 36,292
| March 31, 2017
|
| 12,813
|
| 11,527
|
| 24,340
| Full year 2017
| $
| 79,013
| $
| 54,176
| $
| 133,189
|
1.
| These amounts were historically disclosed under the Consolidated Financial Statement note entitled "Revenue" and are now presented on the face of the Company's consolidated income statements effective January 1, 2018. Second and third quarter 2017 amounts were restated in the fourth quarter of 2017 to conform with current presentation of certain government contracts.
| 2.
| Effective January 1, 2018, ancillary and logistical service expenses are now reported within costs of services under the Consolidated Financial Statement note entitled "Operating Expenses".
|
Non-GAAP Measures
This news release makes reference to various non-GAAP measures. These 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.
The following table presents the Company's agency proceeds (non-GAAP measure) and agency proceeds adjusted operating income rate (non-GAAP measure) results for the three and nine months ended September 30, 2018 and 2017, as well as reconciles those metrics to total revenues and operating income margin, which are the most directly comparable GAAP measures in, or calculated from, the Company's consolidated income statements:
| (in U.S. $000's)
| Three months ended September 30,
| Nine months ended September 30,
|
|
|
|
|
| % Change
|
|
|
|
| % Change
|
| 2018
| 2017
| 2018 over
2017
| 2018
| 2017
| 2018 over
2017
| Operating income
| $
| 31,194
| $
| 16,931
| 84%
| $
| 128,862
| $
| 67,416
| 91%
| Pre-tax adjusting items:
|
|
|
|
|
|
|
|
|
|
| Accelerated vesting of assumed options
|
| -
|
| -
| -
|
| -
|
| 4,752
| (100%)
| Acquisition and finance structure advisory
|
| -
|
| -
| -
|
| -
|
| 9,063
| (100%)
| Severance and retention
|
| 1,501
|
| -
| 100%
|
| 1,501
|
| 1,447
| 4%
| Impairment loss
|
| -
|
| -
| -
|
| -
|
| 8,911
| (100%)
| Adjusted operating income
|
|
|
|
|
|
|
|
|
|
| (non-GAAP measure)
|
| 32,695
|
| 16,931
| 93%
|
| 130,363
|
| 91,589
| 42%
|
|
|
|
|
|
|
|
|
|
|
| Total revenues
|
| 245,346
|
| 227,401
| 8%
|
| 814,054
|
| 679,441
| 20%
| Less: cost of inventory sold
|
| (74,341)
|
| (72,476)
| 3%
|
| (231,834)
|
| (207,603)
| 12%
| Less: ancillary and logistical service
|
|
|
|
|
|
|
|
|
|
| expenses
|
| (11,682)
|
| (13,878)
| (16%)
|
| (46,242)
|
| (40,106)
| 15%
| Agency proceeds (non-GAAP measure)
| $
| 159,323
| $
| 141,047
| 13%
| $
| 535,978
| $
| 431,732
| 24%
|
|
|
|
|
|
|
|
|
|
|
| Operating income margin
|
| 12.7%
|
| 7.4%
| 530 bps
|
| 15.8%
|
| 9.9%
| 590 bps
| Agency proceeds adjusted operating
|
|
|
|
|
|
|
|
|
|
| income rate (non-GAAP measure)
|
| 20.5%
|
| 12.0%
| 850 bps
|
| 24.3%
|
| 21.2%
| 310 bps
|
|
|
|
|
|
|
|
|
|
|
|
(1)
| Please refer to page 15 for a summary of adjusting items during the trailing 12-months ended September 30, 2018 and September 30, 2017.
|
The following table presents the Company's adjusted net income attributable to stockholders (non-GAAP measure) and diluted adjusted EPS attributable to stockholders (non-GAAP measure) results for the three and nine months ended September 30, 2018, and 2017, as well as reconciles those metrics to net income attributable to stockholders and diluted EPS attributable to stockholders, which are the most directly comparable GAAP measures in the Company's consolidated income statements:
| (in U.S. $000's, except share and
| Three months ended September 30,
| Nine months ended September 30,
| per share data)
|
|
|
|
| % Change
|
|
|
|
| % Change
|
| 2018
| 2017
| 2018 over
2017
| 2018
| 2017
| 2018 over
2017
| Net income attributable to stockholders
| $
| 23,138
| $
| 10,261
| 125%
| $
| 85,993
| $
| 38,273
| 125%
| Pre-tax adjusting items:
|
|
|
|
|
|
|
|
|
|
| Accelerated vesting of assumed options
|
| -
|
| -
| -
|
| -
|
| 4,752
| (100%)
| Acquisition and finance structure advisory
|
| -
|
| -
| -
|
| -
|
| 9,063
| (100%)
| Severance and retention
|
| 1,501
|
| -
| 100%
|
| 1,501
|
| 1,447
| 4%
| Gain on sale of equity accounted for investment
|
| (4,935)
|
| -
| 100%
|
| (4,935)
|
| -
| 100%
| Impairment loss
|
| -
|
| -
| -
|
| -
|
| 8,911
| (100%)
| Current income tax effect of adjusting items:
|
|
|
|
|
|
|
|
|
|
| Acquisition and finance structure advisory
|
| -
|
| -
| -
|
| -
|
| (2,447)
| (100%)
| Severance and retention
|
| (376)
|
| -
| 100%
|
| (376)
|
| (564)
| (33%)
| Deferred income tax effect of adjusting items:
|
|
|
|
|
|
|
|
|
|
| Impairment loss
|
| -
|
| -
| -
|
| -
|
| (2,361)
| (100%)
| Current income tax adjusting item:
|
|
|
|
|
|
|
|
|
|
| Change in uncertain tax provision
|
| -
|
| -
| -
|
| -
|
| 2,290
| (100%)
| Adjusted net income attributable to
|
|
|
|
|
|
|
|
|
|
| stockholders (non-GAAP measure)
| $
| 19,328
| $
| 10,261
| 88%
| $
| 82,183
| $
| 59,364
| 38%
| Effect of dilutive securities
| $
| -
| $
| -
| -
| $
| -
| $
| (50)
| (100%)
| Weighted average number of
|
|
|
|
|
|
|
|
|
|
| dilutive shares outstanding
|
| 109,887,194
|
| 108,178,303
| 2%
|
| 109,133,378
|
| 108,069,624
| 1%
|
|
|
|
|
|
|
|
|
|
|
| Diluted earnings per share attributable to stockholders
| $
| 0.21
| $
| 0.09
| 133%
|
| 0.79
|
| 0.35
| 126%
| Diluted adjusted EPS attributable to
|
|
|
|
|
|
|
|
|
|
| stockholders (non-GAAP measure)
| $
| 0.18
| $
| 0.09
| 100%
|
| 0.75
|
| 0.55
| 36%
|
(1)
| Please refer to page 15 for a summary of adjusting items during the trailing 12-months ended September 30, 2018 and September 30, 2017.
|
The following table presents the Company's agency proceeds (non-GAAP measure) results for the three and nine months ended September 30, 2018 and 2017, as well as reconciles that metric to total revenues, which is the most directly comparable GAAP measure in the Company's consolidated income statements:
| (in U.S. $000's)
| Three months ended September 30,
| Nine months ended September 30,
|
|
|
|
|
| % Change
|
|
|
|
| % Change
|
| 2018
| 2017
| 2018 over
2017
| 2018
| 2017
| 2018 over
2017
| Total revenues
| $
| 245,346
| $
| 227,401
| 8%
| $
| 814,054
| $
| 679,441
| 20%
| Less: cost of inventory sold
|
| (74,341)
|
| (72,476)
| 3%
|
| (231,834)
|
| (207,603)
| 12%
| Less: ancillary and logistical service
|
|
|
|
|
|
|
|
|
|
| expenses
|
| (11,682)
|
| (13,878)
| (16%)
|
| (46,242)
|
| (40,106)
| 15%
| Agency proceeds (non-GAAP measure)
| $
| 159,323
| $
| 141,047
| 13%
| $
| 535,978
| $
| 431,732
| 24%
|
The following table presents the Company's A&M agency proceeds (non-GAAP measure) and A&M agency proceeds rate (non-GAAP measure) results for the three and nine months ended September 30, 2018, and 2017, as well as reconciles those metrics to A&M total revenues and A&M revenue rate, which are the most directly comparable GAAP measures in, or calculated from, the Company's consolidated financial statements:
| (in U.S. $000's)
| Three months ended September 30,
| Nine months ended September 30,
|
|
|
|
|
| % Change
|
|
|
|
| % Change
|
| 2018
| 2017
| 2018 over
2017
| 2018
| 2017
| 2018 over
2017
| A&M total revenues
| $
| 218,576
| $
| 202,718
| 8%
| $
| 725,394
| $
| 608,169
| 19%
| Less: cost of inventory sold
|
| (74,341)
|
| (72,476)
| 3%
|
| (231,834)
|
| (207,603)
| 12%
| A&M agency proceeds (non-GAAP measure)
|
| 144,235
|
| 130,242
| 11%
|
| 493,560
|
| 400,566
| 23%
|
|
|
|
|
|
|
|
|
|
|
| GTV
| $
| 1,039,427
| $
| 1,019,322
| 2%
| $
| 3,626,551
| $
| 3,173,050
| 14%
|
|
|
|
|
|
|
|
|
|
|
| A&M revenue rate
|
| 21.0%
|
| 19.9%
| 110 bps
|
| 20.0%
|
| 19.2%
| 80 bps
| A&M agency proceeds rate (non-GAAP measure)
|
| 13.9%
|
| 12.8%
| 110 bps
|
| 13.6%
|
| 12.6%
| 100 bps
|
The adjusting items during the trailing 12-months ended September 30, 2018 were:
Recognized in the third quarter of 2018
- $1.5 million ($1.1 million after tax, or $0.01 per diluted share) of severance and retention costs in a corporate reorganization that followed the Acquisition; and
- $4.9 million ($4.9 million after tax, or $0.04 per diluted share) due to gain on sale of an equity accounted for investment.
Recognized in the second quarter of 2018
There were no adjustment items recognized in the second quarter of 2018.
Recognized in the first quarter of 2018
There were no adjustment items recognized in the first quarter of 2018.
Recognized in the fourth quarter of 2017
- $2.2 million ($1.6 million after tax, or $0.02 per diluted share) of severance and retention costs in a corporate reorganization that followed the Acquisition; and
- $10.1 million (or $0.10 per diluted share) benefit on remeasurement of deferred taxes due to the Tax Cuts and Jobs Act.
The adjusting items during the trailing 12-months ended September 30, 2017 were:
Recognized in the third quarter of 2017
There were no adjustment items recognized in the third quarter of 2017.
Recognized in the second quarter of 2017
- $4.8 million ($4.8 million after tax, or $0.04 per diluted share) of stock option compensation expense related to the accelerated vesting of certain IronPlanet stock options assumed as part of the Acquisition;
- $9.1 million ($6.6 million after tax, or $0.06 per diluted share) of acquisition and finance structure advisory costs;
- $1.4 million ($0.9 million after tax, or $0.01 per diluted share) of severance and retention costs in a corporate reorganization that followed the Acquisition; and
- $8.9 million ($6.6 million after tax, or $0.06 per diluted share) impairment loss recognized on various technology assets.
Recognized in the first quarter of 2017
- $2.3 million ($2.3 million after tax, or $0.02 per diluted share) charge related to the change in uncertain tax provisions.
Recognized in the fourth quarter of 2016
- $6.8 million ($5.0 million after tax, or $0.05 per diluted share) charge related to the early termination of pre-existing debt.
 View original content:http://www.prnewswire.com/news-releases/ritchie-bros-reports-third-quarter-2018-results-300747045.html
SOURCE Ritchie Bros. Auctioneers
Source: PR Newswire
(November 8, 2018 - 5:10 PM EST)
News by QuoteMedia
www.quotemedia.com
|
