There was a 23% increase in the number of visitors to rbauction.com for the nine months ended September 30, 2011, compared to the same period in 2010. Over 3.0 million visitors made 8.0 million visits to the website during the nine months ended September 30, 2011 compared to 2.4 million visitors and 7.2 million visits, respectively, in the same period in 2010.
New Services and Fee Structure
On July 1, 2011, as previously announced, the Company launched a range of value-added services for its customers in the USA and Canada, with many of these services also available at other auctions around the world. These value-added services include the Detailed Equipment Information program, Insurance Services and Powertrain Service Warranty. In addition, Ritchie Bros. Financial Services (RBFS) began providing financing options for customers who purchase equipment at Ritchie Bros. auctions. The Company expects to complete the roll out of these services to its remaining auction locations around the world in the future. The Company's value-added services are designed to extend the appeal of its auctions, thereby enhancing the Company's ability to retain existing customers and attract new customers. In addition, Ritchie Bros.' revised administrative fee structure took effect on July 1, 2011.
"We are pleased with the successful launch of our new services and early reviews from our customers are very encouraging," said Peter Blake, the Company's Chief Executive Officer. "Our third quarter earnings came in well below last year's earnings, however our outlook for our full year results remains unchanged and we believe we are on track to achieve our targets for the year. During the third quarter, market conditions became more challenging due to economic uncertainty and the sudden erosion of confidence, particularly in the US market. This exacerbated the already tight supply of equipment, which reflects reduced manufacturer production over the last couple of years, inhibiting the velocity of transactions in the used equipment market. It is also important to remember that our auctions are not fixed in a quarter and this was evident in this quarter as a number of auctions that occurred in quarter three 2010 will take place in quarter four 2011. In the third quarter, 30% of our gross auction proceeds was at risk, which is more in line with historical levels compared to the second quarter, though we still intend to use it as an effective tool to compete for the limited supply of late model equipment."
Mr. Blake continued: "These market conditions had an effect on our business in the third quarter; however, the pricing environment for late model equipment remains firm and our fourth quarter auctions are building strongly ahead of the equivalent period in 2010. Our gross auction proceeds for October 2011 were approximately $280 million compared to $180 million achieved during the same month in 2010."
Definitions of non-GAAP measures
The Company defines adjusted net earnings as financial statement net earnings excluding the after-tax effects of excess property sales and significant foreign exchange gains or losses resulting from financing activities that are not expected to recur, and has provided a reconciliation below. Adjusted net earnings is a non-GAAP financial measure that does not have a standardized meaning, and is therefore unlikely to be comparable to similar measures presented by other companies. The Company believes that comparing adjusted net earnings for different financial periods provides more useful information about the growth or decline of its net earnings for the relevant financial period and identifies the impact of items which the Company does not consider to be part of its normal operating results.