VANCOUVER, May 3 /PRNewswire-FirstCall/ - Ritchie Bros. Auctioneers Incorporated (NYSE: RBA) (TSX: RBA), the world's largest auctioneer of industrial equipment, announces net earnings for the three months ended March 31, 2011 of $16.6 million, or $0.16 per diluted share, and adjusted net earnings of $13.6 million, or $0.13 per diluted share. This compares to net earnings and adjusted net earnings of $12.7 million, or $0.12 per diluted share, for the three months ended March 31, 2010, representing a year-over-year increase of 7% in adjusted net earnings. Adjusted net earnings is a non-GAAP financial measure and is defined below. The Company's auction revenues for the three months ended March 31, 2011 were $88.5 million, compared to $83.5 million for the same period in 2010. The Company conducted 37 industrial auctions in 11 countries throughout North America, Europe, the Middle East, Central America and Australia during the first quarter of 2011. All dollar amounts in this release are presented in U.S. dollars.
Quarterly dividend
The Company also announces the declaration of a quarterly cash dividend
of $0.105 per common share payable on June 10, 2011 to shareholders of
record on May 20, 2011.
Gross auction proceeds and auction revenues
For the three months ended March 31, 2011, gross auction proceeds were
$851 million, 10% higher than in the same period in 2010. Excluding
gross auction proceeds of $47 million from the sale of the megayacht
Apoise in the first quarter of 2010, the increase would have been 17%.
Gross auction proceeds is a non-GAAP financial measure and is described
below. The Company's auction revenue rate (auction revenues as a
percentage of gross auction proceeds) was 10.39% during the first three
months of 2011, compared to 10.76% in the first three months of 2010.
Online bidding statistics
Ritchie Bros. sold over $223 million of equipment, trucks and other
assets to online bidders during the first quarter of 2011, representing
a 19% increase compared to the same period in 2010 (2010 -$187
million). Internet bidders comprised approximately 46% of the total
bidder registrations at Ritchie Bros. industrial auctions in the first
quarter of 2011. Since launching its real-time online bidding service
in 2002, the Company has now sold almost $4.4 billion worth of trucks,
equipment, and other assets to online bidders confirming Ritchie Bros.'
position as the world's largest seller of used equipment and trucks to
online buyers.
Website statistics
Ritchie Bros. has just celebrated the first anniversary of its new
multi-language rbauction.com website. The Company experienced a 29% increase in visits to its
website from non-English speakers and they made up 20% of the visits
during the three months ended March 31, 2011.
There was a 29% increase in the number of unique visitors to rbauction.com for the three months ended March 31, 2011 compared to the same period in 2010. Roughly 1.0 million unique visitors made 10.7 million equipment searches during the quarter ended March 31, 2011 compared to 0.8 million unique visitors and 7.9 million searches, respectively, in the same period in 2010.
Strategic initiatives
The Company has made meaningful progress on the implementation of its
strategic initiatives announced previously, which are designed to
deliver better value to its customers and extend the appeal of the
Company's auctions, enhancing its ability to attract new customers. In
particular, Ritchie Bros. is on track to introduce more detailed
equipment information starting July 1, 2011, and expects to introduce
ancillary services such as customer finance, insurance and warranty
programs around the same time. Ritchie Bros.' revised administrative
fee structure will take effect on July 1, 2011 and the Company
continues to anticipate a positive impact on its net earnings as a
result of these initiatives.
Summary comments
Peter Blake, the Company's CEO remarked: "We are pleased to have
achieved the largest first quarter gross auction proceeds and auction
revenues in our history. Our strong performance reflected increasing
optimism among equipment owners and early signs of momentum returning
to the equipment industry. During the first quarter of 2011, we
continued to see tight supply of late model used equipment and strong
competition in the marketplace, and we were successful achieving strong
prices across most categories of equipment. Our auction revenue rate
returned to a more sustainable level during the quarter because the
performance of our at risk business was lower than the above trend
performance in 2010. The proportion of our business that was at risk
during the quarter increased in response to customer demand as we
helped them achieve their sale objectives."
Mr. Blake continued: "We remain optimistic about our prospects for the balance of 2011 as the used equipment market around the world continues to return to a more balanced state. Construction activity in a number of our markets around the world remains uncertain, and sustained improvement will be important for maintaining strength in the used equipment market over the longer term. However, our strategic initiatives are progressing well and we are looking forward to the implementation of a number of exciting new services on July 1, including our detailed equipment information and customer finance programs."
Transition to International Financial Reporting Standards (IFRS)
From January 1, 2011, the Company is required to report their financial
results in accordance with IFRS as issued by the IASB. The qualitative
impact of the transition on net earnings for the comparative three
month period ended March 31, 2010 is a $0.1 million reduction. This is
due to a change in the recognition of expense for stock options that
vest over more than one year. Other changes in accounting and
financial reporting on transition are detailed in the notes to the
condensed consolidated financial statements for the three months ended
March 31, 2011, available on SEDAR.
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.
Gross auction proceeds represent the total proceeds from all items sold at Ritchie Bros. auctions. The Company's definition of gross auction proceeds may differ from those used by other participants in its industry. Gross auction proceeds is an important measure the Company uses in comparing and assessing its operating performance. It is not a measure of the Company's financial performance, liquidity or revenue and is not presented in its consolidated financial statements. The Company believes that auction revenues, which is the most directly comparable measure in its Consolidated Income Statements, and certain other line items, are best understood by considering their relationship to gross auction proceeds. Auction revenues represent the revenues earned by Ritchie Bros. in the course of conducting its auctions, and consist primarily of commissions earned on consigned equipment and net profit on the sale of equipment purchased by the Company and sold in the same manner as consigned equipment.
About Ritchie Bros.
Established in 1958, Ritchie Bros. Auctioneers (NYSE and TSX: RBA) is
the world's largest industrial auctioneer, selling more equipment to
on-site and online bidders than any other company in the world. Ritchie
Bros. offers services that enable the world's builders to easily and
confidently exchange equipment. The Company conducts hundreds of
unreserved public auctions each year, selling a broad range of used and
unused industrial assets, including equipment, trucks and other assets
utilized in the construction, transportation, agricultural, material
handling, mining, forestry, petroleum and marine industries. Ritchie
Bros. has over 110 locations in more than 25 countries, including 43
auction sites worldwide. The Company maintains a website at www.rbauction.com and sponsors an equipment wiki at www.RitchieWiki.com.
Forward-looking Statements
The discussion in this press release relating to future events or
operating periods contains forward-looking statements (as defined in
Section 21E of the Securities Exchange Act of 1934, as amended) that
involve risks and uncertainties, including, in particular, statements
regarding anticipated results for future periods; changes in equipment
owner behaviour; supply and competition in the used equipment market;
growth of the Company's market share; the impact of new initiatives,
services and features on the Company and its customers, and the
Company's long-term growth strategy and success. These risks and
uncertainties include: the numerous factors that influence the supply
of and demand for used equipment; fluctuations in the market values of
used equipment; seasonal and periodic variations in operating results;
actions of competitors; the success of the Company's online bidding
initiatives; economic and other conditions in local, regional and
global markets; ongoing access to capital; the Company's ability to
create compelling business solutions that enable the world's builders
to easily and confidently exchange equipment and successfully execute
its strategic initiatives; customer responses to new services and fees,
and other risks and uncertainties as detailed from time to time in the
Company's SEC and Canadian securities filings, including the Company's
Management's Discussion and Analysis of Financial Condition and Results
of Operations for the year ended December 31, 2010 and for the three
months ended March 31, 2011, available on the SEC, SEDAR and the
Company's websites. Actual results may differ materially from those
forward-looking statements. The Company does not undertake any
obligation to update the information contained herein, which speaks
only as of this date.
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