Ritchie Bros. Auctioneers Incorporated announced net earnings of $17.6 million, or $0.50 per diluted weighted average share, for the quarter ended March 31, 2007, a 33 percent increase over the comparable period in 2006.
Gross auction sales for the quarter, which ended March 31, 2007, were $700 million, a record first quarter performance for the company and a 23 percent increase over the prior year’s first quarter gross auction sales. Auction revenues were $69.4 million for the first quarter of 2007, an increase of 24 percent compared to the equivalent quarter in the prior year.
The company’s auction revenue rate (auction revenues as a percentage of gross auction sales) was 9.90 percent for the first quarter of 2007 compared to 9.79 percent for the first quarter of the previous year.
Ritchie Bros. conducted 32 unreserved industrial auctions during the quarter ended March 31, 2007, at locations throughout North America. Europe, the Middle East, Australia and Mexico. Four of those auctions set regional gross auction sales records, including the largest auction in the company’s history in February at its permanent auction site in Orlando, Fla., which achieved gross auction sales of more than $172 million.
The company also held 15 unreserved agricultural auctions, which generated gross auction sales of $11.9 million, compared to 24 agricultural auctions with gross auction sales of $30.4 million in the first quarter of 2006.
The company sold in excess of 55,000 lots from more than 6,500 industrial consignments and had more than 55,000 bidder registrations at its industrial auctions during the quarter ended March 31, 2007. Internet bidding remained an important enhancement to the company’s live auctions, as the company sold approximately $120 million worth of trucks and equipment in the first quarter of 2007 to on-line buyers using the company’s rbauctionBid-Live system.
Although the company’s auctions have varied in size over the last 12 months, the average Ritchie Bros. industrial auction in the 12 month period ended March 31, 2007, attracted more than 1,300 bidder registrations (12 months ended March 31, 2006 — 1,300) and featured approximately 1,400 lots (12 months ended March 31, 2006 — 1,300) consigned by 283 consignors (12 months ended March 31, 2006 — 185), generating average gross auction sales of approximately $15.3 million per auction (12 months ended March 31, 2006 — $13.5 million).
The company’s agricultural auctions for the 12 months ended March 31, 2007, averaged approximately $1.0 million in size, compared to approximately $0.9 million for the 12 months ended March 31, 2006.
Subsequent to March 31, 2007, the company opened new permanent auction sites in Denver, Colo., to replace an existing permanent auction site in Denver, and in Columbus, Ohio. The company now has 35 auction facilities around the world. The company also completed the acquisition of approximately 160 acres of land near Kansas City, Mo., on which it intends to construct a new permanent auction site to replace the company’s existing regional auction unit on leased land in that city.
Peter Blake, the company’s CEO, commented: “We experienced strong growth in all of our markets in the first quarter of this year, indicating to us that the momentum of our unreserved auction model continues to be strong. We remain focused on growing our earnings at a sustainable pace by expanding simultaneously on three fronts: (1) expansion of our infrastructure, including our administrative, yard and support teams, our network of auction sites and our business systems and processes; (2) expansion of our sales team; and (3) expansion of the quantity and range of assets we sell. Our progress in executing our strategy, particularly with respect to our infrastructure, gives me confidence that we are on the right track and are well positioned to achieve our earnings growth goals.”
The company’s board of directors announced the declaration of a quarterly cash dividend of $0.21 per common share payable on June 15, 2007, to shareholders of record on May 25, 2007.
As part of its ongoing succession plans, the company also announced that it intends to re-establish the role of chief operating officer in early 2008 and to appoint Robert S. Armstrong, the company’s chief financial officer and corporate secretary, to this position. The company expects to commence shortly a search for a new chief financial officer to succeed Armstrong.
Gross auction sales represent the aggregate selling prices of all items sold at auction and are not presented in the company’s consolidated financial statements; the most comparable financial statement measure is auction revenues, consisting primarily of commissions earned on consigned equipment and net profit on the sale of equipment purchased by Ritchie Bros. and sold in the same manner as consigned equipment.
For more information, visit www.rbauction.com.
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