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
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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 | ||||||||