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Ritchie Bros. Auctioneers Reports Third Quarter Results

Wed November 21, 2001 - National Edition
Construction Equipment Guide

Ritchie Bros. Auctioneers Incorporated achieved gross auction sales of $179.3 million at an auction revenue rate of 9.4 percent during the three months ended Sept. 30, 2001. The company rescheduled three auctions into the fourth quarter as a result of the tragic events of Sept. 11. However, the remaining 20 auctions attracted more than 21,000 bidders who competed for more than 20,000 lots consigned by more than 3,100 consignors.

According to Dave Ritchie, chairman and CEO of Ritchie Bros., “Prices for most categories of equipment have remained stable as the events of Sept. 11 do not appear to have slowed down the buyers of used equipment. Our customers have adopted a ’business as usual’ approach and they continue to travel to our sales as they have always done. They come to the auctions to check out the equipment and then bid on the pieces they need for their next job. These are not discretionary purchases.”

Gross auction sales were $843 million for the nine months ended Sept. 30, 2001, generating auction revenues of $77.3 million, compared to gross auction sales of $874.8 million and auction revenues of $77.9 million for the nine months ended Sept. 30, 2000.

Net income after tax for the first nine months of 2001, excluding a one-time charge for withholding taxes recorded in the second quarter, was $10.5 million or 62 cents per diluted weighted average share, compared to $11.2 million or 67 cents per diluted share in the comparable 2000 period.

As a percentage of gross auction sales, auction revenues during the nine months ended Sept. 30, 2001 were 9.17 percent, higher than the rate of 8.9 percent experienced during the comparable 2000 period and higher than RBA’s longer-term average.

The lower than expected sales volumes during the third quarter led to a loss of 6 cents per diluted share, compared to income of 9 cents per diluted share during the third quarter of 2000.

Russell Cmolik, president and COO of Ritchie Bros. commented that, “The loss in the third quarter is attributable to the unprecedented rescheduling of three auctions into the fourth quarter. Our earnings outlook for the full year has not changed. In fact, the current economic environment is creating many opportunities for Ritchie Bros. and our recent infrastructure investments have given us the capacity and the tools to take advantage of these opportunities.”

Commenting on one of the company’s Internet initiatives, Ritchie stated, “In September, we began using our new rbauction-Bid-Live service at selected auctions, allowing customers from around the world to participate live and in real-time in our auctions over the Internet. Response from customers has been excellent and we plan to offer this service for more of our auctions in the near future.”

The company also announced that it would be implementing a small lot handling fee in 2002. The fee will recover costs involved in handling the large number of labor-intensive but low value lots sold by the company. The 10-percent fee will be added to the auction price of lots selling for 2,500 (in auction sale currency) or less. Because the vast majority of its sales relate to higher value items, the company expects that the fee will be applicable to about 3 percent of its gross auction sales.

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