Ritchie Bros. Auctioneers Incorporated announced net earnings of $19.9 million, or $0.19 per diluted share, and adjusted net earnings of $19.2 million, or $0.18 per diluted share, for the first quarter of 2009. This compares to adjusted net earnings of $15.3 million, or $0.14 per diluted share, for the first quarter of 2008. Adjusted net earnings is a non-GAAP financial measure and is defined below. Financial statement net earnings for the first quarter of 2008 were $16.4 million, or $0.16 per diluted share.
The company conducted 32 industrial auctions in nine countries throughout North America, Europe, the Middle East and Australia during the first quarter of 2009, and set three regional gross auction proceeds records. The company also opened two replacement auction facilities in the first quarter of 2009 as it continued its global auction site expansion program.
Gross auction proceeds for the three months ended March 31, 2009, were $798 million, 2 percent higher than the first quarter of 2008 and the highest first quarter gross auction proceeds in company history. Auction revenues were $83.7 million for the quarter ended March 31, 2009, a 3 percent increase compared to the first quarter of 2008. Gross auction proceeds and auction revenues in local currency, being mainly the Canadian dollar, Euro and Australian dollar, increased 8 percent and 10 percent, respectively, compared to the first quarter of 2008. The company’s auction revenue rate (auction revenues as a percentage of gross auction proceeds) was 10.48 percent in the first quarter of 2009, compared to 10.41 percent in the first quarter of 2008. Adjusted net earnings for the quarter ended March 31, 2009, increased 26 percent over the comparable period in 2008 as a result of higher gross auction proceeds and a stronger auction revenue rate, combined with lower operating costs.
The company had almost 74,000 bidder registrations at its unreserved industrial auctions in the first quarter of 2009, of which approximately 21,000 were successful buyers. In the first quarter of 2008, the company had approximately 60,000 bidder registrations, of which more than 16,000 were buyers.
Ritchie Bros. worked with a large number of truck, equipment and other asset sellers in the first quarter of 2009, selling almost 61,000 lots on behalf of close to 7,000 consignors. In the first quarter of 2008, Ritchie Bros. sold close to 49,000 lots for more than 7,000 consignors.
The company’s auctions varied in size over the 12 months ended March 31, 2009, but the average Ritchie Bros. industrial auction attracted more than 1,500 bidders who competed for almost 1,400 lots consigned by 187 consignors. The average gross auction proceeds per industrial auction for the 12 months ended March 31, 2009, was approximately $17.8 million (12 months ended March 31, 2008 — $17.2 million).
Ritchie Bros. sold more than $166 million of trucks, equipment, and other assets to online bidders during the first quarter of 2009, representing a 19 percent increase compared to the first quarter of 2008. More than 105,000 customers from over 180 countries have now registered and received approval to bid online at Ritchie Bros. auctions. Internet bidders represented approximately 30 percent of the total registered bidders at Ritchie Bros. industrial auctions for the three months ended March 31, 2009, and they were the buyer or runner up bidder on 33 percent of the lots offered online at these auctions.
Since launching its real-time online bidding service in 2002, the company has now sold more than $2.6 billion worth of trucks, equipment, and other assets to online bidders.
“Our record performance in the first quarter of 2009 confirms two things: Ritchie Bros. is well positioned to weather the global economic downturn, and the value of our unreserved auctions for equipment buyers and sellers is now more compelling than ever,” said Peter Blake, Ritchie Bros. CEO. “We’ve seen record bidder turnout at our auctions around the world this year as more people turn to our auctions to meet their equipment needs. We’ve also helped thousands of companies reach a global buying audience and achieve almost instant liquidity and solid returns by selling their surplus assets at our unreserved auctions.
“We achieved an above-trend performance on our at-risk business and started seeing improved operating leverage in the first quarter, though it is too soon to comment on our annual operating leverage. And while we are proud of our success in the first quarter of 2009, we recognize that these are unprecedented times for many of our customers who are facing real challenges and lots of uncertainty in the marketplace. As a result, it continues to be demanding to forecast the impact of the current economic crisis on our customers’ equipment buying and selling decisions. We remain focused on executing our long-term strategy around people, places and processes, and so far, 2009 has been a busy year for us. Our sales force has increased by 6 percent, we opened two new permanent auction sites, we purchased land for new auction sites in Italy and Spain, and we launched new customer service initiatives, including uShip and an enhanced online bidding service. We continue to believe that our gross auction proceeds will grow in 2009 and our company is in an excellent position to achieve the goals we set out at the beginning of the year.”
The company’s board of directors also announced the declaration of a quarterly cash dividend of $0.09 per common share payable on June 12, 2009, to shareholders of record on May 22, 2009.
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 as defined above 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 statements of operations, 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, please visit www.rbauction.com.