Ritchie Bros. Auctioneers Incorporated announced net earnings and adjusted net earnings for the three months ended March 31, 2012, of $18.0 million, or $0.17 per diluted share. This compares to adjusted net earnings of $13.6 million, or $0.13 per diluted share, for the three months ended March 31, 2011, representing a 32 percent increase in adjusted net earnings. Adjusted net earnings is a non-GAAP financial measure and is defined below. The company’s auction revenues for the first quarter of 2012 grew 14 percent to $101.3 million compared to $88.5 million for the same period in 2011. The company conducted 38 unreserved industrial auctions in nine countries throughout North America, Europe, the Middle East, Central America and Australia during the first quarter of 2012.
Gross Auction Proceeds and Auction Revenues
For the three months ended March 31, 2012, gross auction proceeds were $865 million, 2 percent higher than the same period in 2011. Gross auction proceeds is a non-GAAP financial measure and is defined below. The company’s auction revenue rate (auction revenues as a percentage of gross auction proceeds) was 11.71 percent during the three months ended March 31, 2012, compared to 10.39 percent in the same period in 2011. The company’s revised fee structure, which came into effect on July 1, 2011, contributed $10.8 million to auction revenues for the first quarter of 2012. The company’s at risk business, comprised of guarantee and purchase contracts, represented 29 percent of gross auction proceeds in the first quarter of 2012 (2011: 32 percent).
Summary Comments
“We are pleased to have achieved record first quarter gross auction proceeds and auction revenues during the first quarter; our performance was in line with our plans,” said Peter Blake, Ritchie Bros. CEO. “During the quarter we saw strong equipment pricing at our auctions and competition remained intense for good quality, low hour used equipment. This was reflected in our at risk business, which remained above historic levels. We saw improving optimism among our customers and ongoing original equipment manufacturer backlogs have created pent up demand for new and near new equipment, driving strength in the used equipment market. We remain confident that our performance for 2012 is on track with our plans.
“Our strategic initiatives are also progressing well as we continue our efforts to develop innovative solutions to enable the world’s builders to exchange equipment easily and confidently. In the first quarter we completed a key strategic initiative, our organizational realignment, and we are already seeing the positive results of this.”
Quarterly Dividend
The company also announced the declaration of a quarterly cash dividend of $0.1125 per common share payable on June 8, 2012, to shareholders of record on May 18, 2012.
Online Bidding Statistics
Ritchie Bros. sold more than $275 million of equipment, trucks and other assets to online bidders during the first quarter of 2012, representing a 23 percent increase compared to the same period in 2011 (first quarter of 2011: approximately $223 million). Internet bidders continued to comprise over 50 percent of the total bidder registrations at Ritchie Bros. industrial auctions during the first quarter of 2012. Since launching its real-time online bidding service in 2002, the company has now sold over $5.5 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
The Ritchie Bros. website (www.rbauction.com) attracted roughly 1.3 million unique visitors in the first quarter of 2012, a 30 percent increase compared to the same period last year. Unique non-English speaking visitors increased 30 percent in the first quarter of 2012 compared to the first quarter of 2011.
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.
For more information, visit www.rbauction.com.
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