| Exhibit 99.1 – News Release |
Ritchie Bros. reports second quarter 2021 results
VANCOUVER, August 5, 2021– Ritchie Bros. Auctioneers Incorporated (NYSE & TSX: RBA, the “Company”, “Ritchie Bros.”, “we”, “us”, or “our”) reported the following results for the three months ended June 30, 2021.
(All figures are presented in U.S. dollars)
Net income attributable to stockholders increased 15% to $60.7 million, compared to $53.0 million in Q2 2020. Diluted earnings per share (“EPS”) attributable to stockholders increased 12% to $0.55 per share in Q2 2021 compared to $0.49 per share in Q2 2020. Diluted adjusted EPS attributable to stockholders* increased 2% to $0.55 per share in Q2 2021 compared to $0.54 per share in Q2 2020.
“We grew our total service revenue by 8% in the quarter despite an unfavorable, albeit temporary, used equipment supply environment.” said Ann Fandozzi, CEO of Ritchie Bros.
Fandozzi concluded “ We continue to focus on our long-term strategy of providing insights, services, and transaction solutions to our customers. We are testing and learning more how to service our customers digitally, with Business Inventory Management System “IMS” activations increasing 34% sequentially compared to last quarter.”
For the second quarter of 2021 as compared to the second quarter of 2020:
Consolidated results:
| ● | Total revenue in Q2 2021 increased 2% to $396.4 million |
| o | Service revenue in Q2 2021 increased 8% to $252.7 million |
| o | Inventory sales revenue in Q2 2021 decreased 7% to $143.6 million |
| ● | Total selling, general and administrative expenses (“SG&A”) in Q2 2021 increased 11% to $111.8 million |
| ● | Operating income in Q2 2021 increased 1% to $89.5 million |
| ● | Net income in Q2 2021 increased 14% to $60.8 million |
| ● | Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization* (“EBITDA”) (non-GAAP measure) in Q2 2021 increased 5% to $112.3 million |
| ● | Cash provided by operating activities was $211.4 million for the first half of 2021 |
Auctions & Marketplaces segment results:
| ● | GTV1 in Q2 2021 increased 2% to $1.5 billion and decreased 3% when excluding the impact of foreign exchange |
| o | A&M total revenue in Q2 2021 remained flat at $355.1 million |
| o | Service revenue in Q2 2021 increased 6% to $211.5 million |
| o | Inventory sales revenue in Q2 2021 decreased 7% to $143.6 million |
Other Services segment results:
| ● | Other Services total revenue in Q2 2021 increased 20% to $41.3 million |
| o | RBFS revenue in Q2 2021 increased 39% to $11.8 million |
| o | Rouse revenue of $6.2 million was recognized in Q2 2021, which was its second full quarter since its acquisition on December 8, 2020 |
| ● | Total number of organizations activated on our IMS increased by 34% |
Other Company development:
| ● | Increased quarterly cash dividend by 14% to $0.25 per share |
1 Gross Transaction Value (“GTV”) represents total proceeds from all items sold at the Company’s 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 9-10 for explanations of why the Company uses these non-GAAP measures and the reconciliation to the most comparable GAAP financial measures.
Ritchie Bros. | 1 |
Financial Overview
(Unaudited)
(in U.S. $000's, except EPS and percentages) | | Three months ended June 30, | | Six months ended June 30, | ||||||||||||||||
| | | | | | | | | % Change | | | | | | | | | % Change | ||
|
| 2021 |
| 2020 |
| | 2021 over 2020 | | 2021 |
| 2020 |
| | 2021 over 2020 | ||||||
Service revenue: |
| |
|
| |
|
| |
| | | |
|
| |
|
| |
| |
Commissions | | $ | 129,334 | | $ | 125,465 |
| | 3 | % | | $ | 233,309 | | $ | 218,950 |
| | 7 | % |
Fees | |
| 123,414 | |
| 108,674 |
| | 14 | % | |
| 225,469 | |
| 198,312 |
| | 14 | % |
Total service revenue | |
| 252,748 | |
| 234,139 |
| | 8 | % | |
| 458,778 | |
| 417,262 |
| | 10 | % |
Inventory sales revenue | |
| 143,613 | |
| 154,911 |
| | (7) | % | |
| 269,138 | |
| 245,043 |
| | 10 | % |
Total revenue | |
| 396,361 | |
| 389,050 |
| | 2 | % | |
| 727,916 | |
| 662,305 |
| | 10 | % |
Costs of services | |
| 39,042 | |
| 39,448 |
| | (1) | % | |
| 75,069 | |
| 78,803 |
| | (5) | % |
Cost of inventory sold | |
| 131,023 | |
| 143,134 |
| | (8) | % | |
| 241,770 | |
| 224,719 |
| | 8 | % |
Selling, general and administrative expenses | |
| 111,819 | |
| 100,632 |
| | 11 | % | |
| 227,897 | |
| 199,017 |
| | 15 | % |
Operating expenses | |
| 306,844 | |
| 300,250 |
| | 2 | % | |
| 593,897 | |
| 539,423 |
| | 10 | % |
Operating income | |
| 89,517 | |
| 88,800 |
| | 1 | % | |
| 134,019 | |
| 122,882 |
| | 9 | % |
Operating income as a % of total revenue | |
| 22.6 | % |
| 22.8 | % | | (20) | bps | |
| 18.4 | % |
| 18.6 | % | | (20) | bps |
Net income attributable to stockholders | |
| 60,749 | |
| 53,043 |
| | 15 | % | |
| 88,937 | |
| 75,851 |
| | 17 | % |
Adjusted net income attributable to stockholders* | | | 60,749 | | | 59,271 | | | 2 | % | | | 88,937 | | | 82,079 | | | 8 | % |
Diluted EPS attributable to stockholders | | $ | 0.55 | | $ | 0.49 |
| | 12 | % | | $ | 0.80 | | $ | 0.69 |
| | 16 | % |
Diluted adjusted EPS attributable to stockholders* | | $ | 0.55 | | $ | 0.54 | | | 2 | % | | $ | 0.80 | | $ | 0.75 | | | 7 | % |
Effective tax rate | |
| 25.7 | % |
| 34.2 | % | | (850) | bps | |
| 24.9 | % |
| 30.5 | % | | (560) | bps |
Total GTV | |
| 1,527,642 | |
| 1,493,982 |
| | 2 | % | |
| 2,802,182 | |
| 2,641,006 |
| | 6 | % |
Service GTV | | | 1,384,029 | | | 1,339,071 | | | 3 | % | | | 2,533,044 | | | 2,395,963 | | | 6 | % |
Service revenue as a % of total GTV - Rate | |
| 16.5 | % |
| 15.7 | % | | 80 | bps | |
| 16.4 | % |
| 15.8 | % | | 60 | bps |
Inventory GTV | | | 143,613 | | | 154,911 | | | (7) | % | | | 269,138 | | | 245,043 | | | 10 | % |
Service revenue as a % of total revenue | |
| 63.8 | % |
| 60.2 | % | | 360 | bps | |
| 63.0 | % |
| 63.0 | % | | — | bps |
Inventory sales revenue as a % of total revenue | |
| 36.2 | % |
| 39.8 | % | | (360) | bps | |
| 37.0 | % |
| 37.0 | % | | — | bps |
Cost of inventory sold as a % of operating expenses | |
| 42.7 | % |
| 47.7 | % | | (500) | bps | |
| 40.7 | % |
| 41.7 | % | | (100) | bps |
Service GTV as a % of total GTV - Mix | | | 90.6 | % | | 89.6 | % | | 100 | bps | | | 90.4 | % | | 90.7 | % | | (30) | bps |
Inventory sales revenue as a % of total GTV - Mix | |
| 9.4 | % |
| 10.4 | % | | (100) | bps | |
| 9.6 | % |
| 9.3 | % | | 30 | bps |
Ritchie Bros. | 2 |
Segment Overview
(in U.S $000's) | | Three months ended June 30, 2021 |
| Six months ended June 30, 2021 | ||||||||||||
|
| A&M |
| Other |
| Consolidated |
| A&M |
| Other |
| Consolidated | ||||
Service revenue | | $ | 211,475 |
| 41,273 | | $ | 252,748 | | $ | 382,230 |
| 76,548 | | $ | 458,778 |
Inventory sales revenue | |
| 143,613 |
| — | |
| 143,613 | |
| 269,138 |
| — | |
| 269,138 |
Total revenue | |
| 355,088 |
| 41,273 | |
| 396,361 | |
| 651,368 |
| 76,548 | |
| 727,916 |
Ancillary and logistical service expenses | |
| — | | 14,819 | |
| 14,819 | |
| — | | 27,088 | |
| 27,088 |
Other costs of services | |
| 21,985 | | 2,238 | |
| 24,223 | |
| 43,575 | | 4,406 | |
| 47,981 |
Cost of inventory sold | |
| 131,023 | | — | |
| 131,023 | |
| 241,770 | | — | |
| 241,770 |
SG&A expenses | |
| 101,417 | | 10,402 | |
| 111,819 | |
| 205,762 | | 22,135 | |
| 227,897 |
Segment profit | | $ | 100,663 | | 13,814 | | $ | 114,477 | | $ | 160,261 | | 22,919 | | $ | 183,180 |
Total GTV | |
| 1,527,642 |
| N/A | |
| N/A | |
| 2,802,182 |
| N/A | |
| N/A |
A&M service revenue as a % of total GTV- Rate | |
| 13.8 | % | N/A | |
| N/A | |
| 13.6 | % | N/A | |
| N/A |
(in U.S $000's) | | Three months ended June 30, 2020 |
| Six months ended June 30, 2020 | ||||||||||||||
|
| A&M |
| Other |
| Consolidated |
| A&M |
| Other |
| Consolidated | ||||||
Service revenue | | $ | 199,648 | | $ | 34,491 | | $ | 234,139 |
| $ | 354,391 | | $ | 62,871 | | $ | 417,262 |
Inventory sales revenue |
| | 154,911 | | | — |
| | 154,911 | | | 245,043 | | | — | | | 245,043 |
Total revenue |
| | 354,559 |
| | 34,491 |
| | 389,050 | | | 599,434 | | | 62,871 | | | 662,305 |
Ancillary and logistical service expenses |
| | — | | | 16,060 |
| | 16,060 | | | — | | | 28,818 | | | 28,818 |
Other costs of services |
| | 22,190 | | | 1,198 |
| | 23,388 | | | 47,285 | | | 2,700 | | | 49,985 |
Cost of inventory sold |
| | 143,134 | |
| — |
| | 143,134 | |
| 224,719 | |
| — | |
| 224,719 |
SG&A expenses |
| | 94,559 | |
| 6,073 |
| | 100,632 | |
| 186,144 | |
| 12,873 | |
| 199,017 |
Segment profit | | $ | 94,676 | | $ | 11,160 | | $ | 105,836 | |
| 141,286 | |
| 18,480 | |
| 159,766 |
Total GTV | |
| 1,493,982 | |
| N/A | |
| N/A | |
| 2,641,006 | |
| N/A | |
| N/A |
A&M service revenue as a % of total GTV- Rate | |
| 13.4 | % |
| N/A | |
| N/A | | | 13.4 | % | | N/A | |
| N/A |
Q2 2021 Consolidated Performance Overview
In response to the COVID-19 pandemic, in March 2020, we 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 auction theaters. Our core online auction channels (IronPlanet.com, GovPlanet.com, Marketplace-E) continued to operate as usual.
Total GTV increased 2% to $1.5 billion and decreased 3% when excluding the impact of foreign exchange in Q2 2021. GTV volumes grew primarily in International and Canada, offset by lower volume in the US. All regions continued to experience very strong mix adjusted auction price performance due to high demand for used equipment, in part aided by our digital marketing efforts. However, despite higher mix adjusted pricing, we experienced headwinds due to negative mix impacts driven in part by older aged equipment in the transportation and construction sectors. This combined with auction calendar shifts of $52 million from the impact of the COVID-19 pandemic that were shifted from Q1 into Q2 2020 that did not repeat in Q2 2021 led to lower GTV. Total GTV increased in International driven by an improved economic climate, the benefit from the use of new satellite yards in France, Germany and Australia coupled with a favourable foreign exchange impact, partially offset by the auction shift of Caorso, Italy. Total GTV also increased in Canada which benefited from a favourable foreign exchange impact, higher performance at our Toronto auction, an increased volume from RBFS providing escrow services for private brokered transactions, offset by lower overall volumes in Edmonton and Grand Prairie as well as the shift of our Montreal auction. Total GTV volumes decreased in the US due to the shift of our Los Angeles auction, lower activity due to supply constraints mainly in our Fort Worth auction and Denver regional combined events and the non-repeat of a large supply contract. In addition, lower volumes in our US strategic accounts in the finance, original equipment manufacturer (“OEM”) and transportation sectors also contributed to lower GTV, partially offset by positive online performance.
Total revenue increased 2% to $396.4 million in Q2 2021, with total service revenue increasing by 8%, offset by a decrease in inventory sales revenue by 7%.
Service revenue increased 8% with fees revenue increasing 14% and commissions revenue increasing 3%. Fee revenue was up 14% mainly due to fee revenue from the acquisition of Rouse, and the continued growth in RBFS fee revenue. Fees revenue also increased due to the revised global buyer fee structure implemented on May 1, 2021 and the re-instatement of fees at the Canadian on-the-farm auctions which were waived in Q2 as part of our COVID-19 pandemic response. These increases were partially offset by lower ancillary revenue mainly due to lower fees earned on refurbishment, transportation and redeployment of assets in the US. Commissions revenue was up 3%, in line with the higher service GTV of 3%.
Inventory sales revenue decreased 7% representing a lower mix of volumes of inventory contracts, partially offset by higher pricing, primarily in the US and Canada. These decreases were partially offset by strong year-over-year performance in our International region primarily driven by increased sales in Australia, and in the Middle East benefiting from overall improved economic conditions
Ritchie Bros. | 3 |
from the recovery of the COVID-19 pandemic. In addition, we saw increased volumes sold through our GovPlanet business as a result of the new non-rolling and rolling stock contracts effective June 1, 2021 and higher volumes due to the government shutdowns in prior year in response to the COVID-19 pandemic.
Costs of services decreased 1% to $39.0 million. This decrease was primarily driven by lower activity in line with lower GTV in the US, lower ancillary and logistical service expenses, in line with the decrease in ancillary fees earned on refurbishment, transportation and redeployment of assets in the US. These decreases were partially offset by higher costs incurred to support the increased activity in our GovPlanet business, incremental costs to introduce the new satellite yards in Europe and the second full quarter of costs of services incurred from Rouse since acquisition.
Cost of inventory decreased 8% to $131.0 million, primarily in line with lower inventory sales revenue. Cost of inventory sold decreased at a higher rate than the decrease of inventory sales revenue, indicating a slight increase in the revenue rates primarily in our GovPlanet business and US region, partially offset by the International region.
Selling, general and administrative (“SG&A”) expenses increased 11% to $111.8 million primarily due to an unfavourable impact of foreign exchange fluctuation, higher wages, salaries and benefit expenses driven by higher headcount to support our growth initiatives and a second full quarter of costs incurred from Rouse since acquisition. We also incurred higher travel, advertising and promotion expenses to promote our global digital marketing efforts, and increased travel activity due to the lifting of border and quarantine restrictions. These increases were partially offset by lower short-term and long-term incentive costs including the non-repeat of a prior year one-time incentive accrual to employees during the COVID-19 pandemic.
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 Australian dollar, Canadian dollar, and the Euro exchange rates relative to the U.S. dollar.
Net income attributable to stockholders increased 15% to $60.7 million primarily related to the decrease in effective tax rate following a $6.2 million income tax expense recognized in Q2 2020 relating to an unfavourable adjustment to reflect final regulations published regarding hybrid financing arrangements, and slightly higher operating income. Adjusted net income attributed to stockholders* increased 2% to $60.7 million in Q2 2021 compared to $59.3 million in Q2 2020.
Primarily for the same reasons noted above, diluted EPS attributable to stockholders increased 12% to $0.55 per share for Q2 2021 from $0.49 per share in Q2 2020. Diluted adjusted EPS attributable to stockholders* increased 2% to $0.55 per share in Q2 2021.
Dividend Information
Quarterly dividend
On August 4, 2021, the Company declared a quarterly cash dividend of $0.25 per common share payable on September 15, 2021 to shareholders of record on August 25, 2021.
Q2 2021 Earnings Conference Call
Ritchie Bros. is hosting a conference call to discuss its financial results for the quarter ended June 30, 2021 at 8am Pacific time / 11 am Eastern time / 4pm GMT on August 6, 2021. The replay of the webcast will be available through September 6, 2021.
Conference call and webcast details are available at the following link:
https://investor.ritchiebros.com
Ritchie Bros. | 4 |
About Ritchie Bros.
Established in 1958, Ritchie Bros. (NYSE and TSX: RBA) is a world leader in asset management technologies and disposition of commercial assets. We offer 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; Rouse, a leader in market intelligence on sales and rental equipment data; and Ritchie Bros. Private Treaty, offering privately negotiated sales. Our suite of multichannel sales solutions also includes RB Asset Solutions, a complete end-to-end asset management and disposition system. We also offer 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, and growth and value 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 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 acquired companies, and to receive the anticipated benefits of such acquisitions; and the risks and uncertainties set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 and the Company’s Form 10-Q for the quarter ended June 30, 2021, 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.
Ritchie Bros. | 5 |
GTV and Selected Condensed Consolidated Financial Information
GTV and Condensed Consolidated Income Statements – Second 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 June 30, | | Six months ended June 30, | ||||||||||||||
|
| | |
|
| |
| % Change | | | |
|
| |
| % Change | ||
| | | 2021 | | | 2020 | | 2021 over 2020 | | | 2021 | | | 2020 | | 2020 over 2019 | ||
GTV | | $ | 1,527,642 | | $ | 1,493,982 |
| 2 | % | | $ | 2,802,182 | | $ | 2,641,006 |
| 6 | % |
Revenues: | |
|
| |
|
|
|
| | | | | | |
| | | |
Service revenues | | $ | 252,748 | | $ | 234,139 |
| 8 | % | | $ | 458,778 | | $ | 417,262 | | 10 | % |
Inventory sales revenue | |
| 143,613 | |
| 154,911 |
| (7) | % | | | 269,138 | |
| 245,043 | | 10 | % |
Total revenues | |
| 396,361 | |
| 389,050 |
| 2 | % | | | 727,916 | |
| 662,305 | | 10 | % |
Operating expenses: | |
|
| |
|
|
|
| | | | | | | | |
| |
Costs of services | |
| 39,042 | |
| 39,448 |
| (1) | % | | | 75,069 | | | 78,803 | | (5) | % |
Cost of inventory sold | |
| 131,023 | |
| 143,134 |
| (8) | % | | | 241,770 | | | 224,719 | | 8 | % |
Selling, general and administration expenses | |
| 111,819 | |
| 100,632 |
| 11 | % | | | 227,897 | | | 199,017 | | 15 | % |
Acquisition-related costs | |
| 3,049 | |
| — |
| 100 | % | | | 5,971 | | | — | | 100 | % |
Depreciation and amortization expenses | |
| 21,935 | |
| 17,857 |
| 23 | % | | | 43,005 | | | 37,150 | | 16 | % |
Gain on disposition of property, plant and equipment | |
| (175) | |
| (1,213) |
| (86) | % | | | (243) | | | (1,260) | | (81) | % |
Foreign exchange (gain) loss | |
| 151 | |
| 392 |
| (61) | % | | | 428 | | | 994 | | (57) | % |
Total operating expenses | |
| 306,844 | |
| 300,250 |
| 2 | % | | | 593,897 | | | 539,423 | | 10 | % |
Operating income | |
| 89,517 | |
| 88,800 |
| 1 | % | | | 134,019 | | | 122,882 | | 9 | % |
Interest expense | |
| (8,867) | |
| (8,882) |
| (0) | % | | | (17,813) | |
| (18,064) | | (1) | % |
Other income, net | |
| 1,196 | |
| 857 |
| 40 | % | | | 2,198 | |
| 4,434 | | (50) | % |
Income before income taxes | |
| 81,846 | |
| 80,775 |
| 1 | % | | | 118,404 | |
| 109,252 |
| 8 | % |
Income tax expense | |
| 21,065 | |
| 27,656 |
| (24) | % | | | 29,484 | | | 33,304 | | (11) | % |
Net income | | $ | 60,781 | | $ | 53,119 |
| 14 | % | | $ | 88,920 | | $ | 75,948 |
| 17 | % |
Net income attributable to: | |
|
| |
|
|
|
| | | | | |
| |
|
| |
Stockholders | | $ | 60,749 | | $ | 53,043 |
| 15 | % | | $ | 88,937 | | $ | 75,851 |
| 17 | % |
Non-controlling interests | |
| 32 | |
| 76 |
| (58) | % | | | (17) | |
| 97 |
| (118) | % |
| | $ | 60,781 | | $ | 53,119 |
| 14 | % | | $ | 88,920 | | $ | 75,948 |
| 17 | % |
Earnings per share attributable to stockholders: | |
|
| |
|
|
|
| | | | | |
| |
|
| |
Basic | | $ | 0.55 | | $ | 0.49 |
| 12 | % | | $ | 0.81 | | $ | 0.70 |
| 16 | % |
Diluted | | $ | 0.55 | | $ | 0.49 |
| 12 | % | | $ | 0.80 | | $ | 0.69 |
| 16 | % |
Weighted average number of share outstanding: | |
|
| |
|
|
|
| | | | | |
|
|
|
| |
Basic | |
| 110,311,615 | |
| 108,387,490 |
| 2 | % | | | 110,144,229 | |
| 108,818,903 |
| 1 | % |
Diluted | |
| 111,334,184 | |
| 109,323,343 |
| 2 | % | | | 111,302,711 | |
| 109,903,808 |
| 1 | % |
Ritchie Bros. | 6 |
Condensed Consolidated Balance Sheets
(Expressed in thousands of United States dollars, except share data)
(Unaudited)
|
| June 30, 2021 |
| December 31, 2020 | ||
| | | | | | |
Assets |
| |
|
| |
|
Cash and cash equivalents | | $ | 301,757 | | $ | 278,766 |
Restricted cash | |
| 140,966 | |
| 28,129 |
Trade and other receivables | |
| 271,980 | |
| 135,001 |
Less: allowance for credit losses | |
| (5,348) | |
| (5,467) |
Inventory | |
| 85,930 | |
| 86,278 |
Other current assets | |
| 27,776 | |
| 27,274 |
Income taxes receivable | |
| 10,524 | |
| 6,797 |
Total current assets | |
| 833,585 | |
| 556,778 |
| | | | | | |
Property, plant and equipment | |
| 482,732 | |
| 492,127 |
Other non-current assets | |
| 146,890 | |
| 147,608 |
Intangible assets | |
| 292,444 | |
| 300,948 |
Goodwill | |
| 838,798 | |
| 840,610 |
Deferred tax assets | |
| 12,534 | |
| 13,458 |
Total assets | | $ | 2,606,983 | | $ | 2,351,529 |
| | | | | | |
Liabilities and Equity | |
| | |
|
|
Auction proceeds payable | | $ | 445,090 | | $ | 214,254 |
Trade and other payables | |
| 221,738 | |
| 243,786 |
Income taxes payable | |
| 4,240 | |
| 17,032 |
Short-term debt | |
| 35,213 | |
| 29,145 |
Current portion of long-term debt | |
| 10,657 | |
| 10,360 |
Total current liabilities | |
| 716,938 | |
| 514,577 |
| | | | | | |
Long-term debt | |
| 625,832 | |
| 626,288 |
Other non-current liabilities | |
| 156,636 | |
| 153,000 |
Deferred tax liabilities | |
| 46,150 | |
| 45,265 |
Total liabilities | |
| 1,545,556 | |
| 1,339,130 |
| | | | | | |
Commitments and Contingencies | |
|
| |
|
|
Stockholders' equity: | |
|
| |
|
|
Share capital: | |
|
| |
|
|
Common stock; no par value, unlimited shares | |
| | |
|
|
authorized, issued and outstanding shares: | |
| | |
|
|
110,366,808 (December 31, 2020: 109,876,428) | |
| 215,666 | |
| 200,451 |
Additional paid-in capital | |
| 51,800 | |
| 49,171 |
Retained earnings | |
| 832,037 | |
| 791,918 |
Accumulated other comprehensive loss | |
| (43,173) | |
| (34,295) |
Stockholders' equity | |
| 1,056,330 | |
| 1,007,245 |
Non-controlling interest | |
| 5,097 | |
| 5,154 |
Total stockholders' equity | |
| 1,061,427 | |
| 1,012,399 |
Total liabilities and equity | | $ | 2,606,983 | | $ | 2,351,529 |
Ritchie Bros. | 7 |
Condensed Consolidated Statements of Cash Flows
(Expressed in thousands of United States dollars)
(Unaudited)
Six months ended June 30, |
| 2021 |
| 2020 | ||
Cash provided by (used in): |
| |
|
| |
|
Operating activities: |
| |
|
| |
|
Net income | | $ | 88,920 | | $ | 75,948 |
Adjustments for items not affecting cash: | |
| | |
|
|
Depreciation and amortization expenses | |
| 43,005 | |
| 37,150 |
Stock-based compensation expense | |
| 16,183 | |
| 7,747 |
Deferred income tax expense | |
| 1,719 | |
| 6,657 |
Unrealized foreign exchange loss | |
| (65) | |
| 1,129 |
Gain on disposition of property, plant and equipment | |
| (243) | |
| (1,260) |
Amortization of debt issuance costs | |
| 1,443 | |
| 1,577 |
Amortization of right-of-use assets | |
| 6,280 | |
| 6,318 |
Gain on contingent consideration from equity investment | |
| — | |
| (1,700) |
Other, net | |
| 1,568 | |
| 1,934 |
Net changes in operating assets and liabilities | |
| 52,577 | |
| 62,824 |
Net cash provided by operating activities | |
| 211,387 | | | 198,324 |
Investing activities: | |
|
| |
|
|
Acquisition of Rouse, net of cash acquired | | | 728 | | | — |
Property, plant and equipment additions | |
| (4,616) | |
| (6,140) |
Proceeds on disposition of property, plant and equipment | |
| 342 | |
| 16,106 |
Intangible asset additions | |
| (17,361) | |
| (13,244) |
Issuance of loans receivable | | | (2,622) | | | (2,985) |
Repayment of loans receivable | | | 226 | | | 203 |
Distribution from equity investment | |
| — | |
| 4,212 |
Proceeds on contingent consideration from equity investment | |
| — | |
| 1,700 |
Net cash used in investing activities | |
| (23,303) | |
| (148) |
Financing activities: | |
|
| |
|
|
Share repurchase | |
| — | |
| (53,170) |
Dividends paid to stockholders | |
| (48,537) | |
| (43,586) |
Dividends paid to non-controlling interests | | | (26) | | | — |
Proceeds from exercise of options and share option plans | |
| 10,699 | |
| 19,425 |
Payment of withholding taxes on issuance of shares | |
| (9,155) | |
| (3,321) |
Net increase (decrease) in short-term debt | | | 6,842 | | | 15,858 |
Repayment of long-term debt | |
| (5,328) | |
| (8,633) |
Repayment of finance lease obligations | |
| (5,355) | |
| (4,384) |
Net cash used in financing activities | |
| (50,860) | |
| (77,811) |
Effect of changes in foreign currency rates on cash, cash equivalents, and restricted cash | |
| (1,396) | |
| (2,608) |
Increase | |
| 135,828 | |
| 117,757 |
Beginning of period | |
| 306,895 | |
| 420,256 |
Cash, cash equivalents, and restricted cash, end of period | | $ | 442,723 | | $ | 538,013 |
Ritchie Bros. | 8 |
Selected Data
(Unaudited)
Total auction metrics
| | Three months ended June 30, | | Six months ended June 30, | ||||||||||
|
| |
| |
| % Change | | | | | | % Change | ||
|
| 2021 |
| 2020 |
| 2021 over 2020 | | 2021 |
| 2020 |
| 2021 over 2020 | ||
Number of auction sales days |
| 240 |
| 226 |
| 6 | % | | 333 |
| 313 | | 6 | % |
Bids per lot sold * |
| 27 |
| 25 |
| 9 | % | | 28 |
| 23 | | 19 | % |
Total lots sold * |
| 148,206 |
| 148,957 |
| (1) | % | | 263,035 |
| 249,754 | | 5 | % |
* Management reviews industrial equipment auction metrics excluding GovPlanet; as a result GovPlanet business metrics are excluded from these metrics
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. Non-GAAP financial measures referred to in this report are labeled as “non-GAAP measure” or designated as such with an asterisk (*).
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 June 30, | | Six months ended June 30, | | ||||||||||||||
| | | | |
| | | % Change | | | | |
| | | % Change | | ||
|
| 2021 |
| 2020 | | 2021 over 2020 | | 2021 |
| 2020 | | 2021 over 2020 | | ||||||
Net income attributable to stockholders | | $ | 60,749 | | $ | 53,043 | | 15 | % | | $ | 88,937 | | $ | 75,851 | | 17 | % | |
Current income tax adjusting item: | |
| | |
| | |
|
| |
|
| |
|
| |
|
| |
Change in uncertain tax provision | |
| — | |
| 766 | | (100) | % | |
| — | |
| 766 | | (100) | % | |
Deferred tax adjusting item: | |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
Change in uncertain tax provision | |
| — | |
| 5,462 | | (100) | % | |
| — | |
| 5,462 | | (100) | % | |
Adjusted net income attributable to stockholders* | | $ | 60,749 | | $ | 59,271 | | 2 | % | | $ | 88,937 | | $ | 82,079 | | 8 | % | |
Weighted average number of dilutive shares outstanding | |
| 111,334,184 | |
| 109,323,343 |
| 2 | % | |
| 111,302,711 | |
| 109,903,808 |
| 1 | % | |
| | | | | | | | | | | | 0 | | | | | | | |
Diluted earnings per share attributable to stockholders | | $ | 0.55 | | $ | 0.49 | | 12 | % | | $ | 0.80 | | $ | 0.69 | | 16 | % | |
Diluted adjusted EPS attributable to Stockholders* | | $ | 0.55 | | $ | 0.54 | | 2 | % | | $ | 0.80 | | $ | 0.75 | | 7 | % | |
(1) Please refer to page 10 for a summary of adjusting items for the three and six months ended June 30, 2021 and June 30, 2020.
(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.
Ritchie Bros. | 9 |
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 June 30, | | | Six months ended June 30, | | | ||||||||||||
| | | | |
| | | % Change | | | | |
| | | % Change | | ||
|
| 2021 |
| 2020 | | 2021 over 2020 | | 2021 |
| 2020 | | 2021 over 2020 | | ||||||
Net income | | $ | 60,781 | | $ | 53,119 | | 14 | % | | $ | 88,920 | | $ | 75,948 | | 17 | % | |
Add: depreciation and amortization expenses | |
| 21,935 | |
| 17,857 |
| 23 | % | |
| 43,005 | |
| 37,150 |
| 16 | % | |
Add: interest expense | |
| 8,867 | |
| 8,882 |
| (0) | % | |
| 17,813 | |
| 18,064 |
| (1) | % | |
Less: interest income | |
| (332) | |
| (393) |
| (16) | % | |
| (634) | |
| (1,063) |
| (40) | % | |
Add: income tax expense | |
| 21,065 | |
| 27,656 |
| (24) | % | |
| 29,484 | |
| 33,304 |
| (11) | % | |
Adjusted EBITDA* | | $ | 112,316 | | $ | 107,121 | | 5 | % | | $ | 178,588 | | $ | 163,403 | | 9 | % | |
| (1) | Please refer to page 10 for a summary of adjusting items for the three and six months ended June 30, 2021 and June 30, 2020. |
| (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. |
Adjusting items during the trailing 12-months ended June 30, 2021 were:
Recognized in the second quarter of 2021
| ● | There were no adjustment items recognized in the second quarter of 2021. |
Recognized in the first quarter of 2021
| ● | There were no adjustment items recognized in the first quarter of 2021. |
Recognized in the fourth quarter of 2020
| ● | $5.2 million ($3.9 million after tax, or $0.04 per diluted share) of acquisition-related costs related to the acquisition of Rouse. |
| ● | $1.5 million ($0.01 per diluted share) of current income tax expense recognized related to an unfavourable adjustment to reflect final regulations published in Q2 2020 regarding hybrid financing arrangements. |
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. |
Adjusting items during the trailing 12-months ended June 30, 2020 were:
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. |
Recognized in the third quarter of 2019
| ● | There were no adjustment items recognized in the third quarter of 2019. |
For further information, please contact:
Sameer Rathod | Vice President, Investor Relations and Market Intelligence
Phone: 1.510.381.7584 | Email: srathod@ritchiebros.com
Ritchie Bros. | 10 |