VANCOUVER, April 29 /CNW/ - Ritchie Bros. Auctioneers Incorporated (NYSE:
RBA; TSX: RBA) announces that it achieved net earnings of $16.4 million, or
$0.16 per diluted weighted average share, for the first quarter of 2008,
compared to net earnings of $17.6 million, or $0.17 per diluted weighted
average share, for the first quarter of 2007. All dollar amounts are presented
in United States dollars and, except as noted otherwise, all share and per
share amounts reflect the three-for-one split of the Company's common shares
that occurred at the close of business on April 24, 2008.
Gross auction proceeds for the three months ended March 31, 2008 were
$782 million, 12% higher than gross auction proceeds for the first quarter of
2007. Auction revenues increased 19% to $81.4 million for the quarter ended
March 31, 2008 compared to the first quarter of 2007, and the Company's
auction revenue rate (auction revenues as a percentage of gross auction
proceeds) was 10.41% in 2008. Ongoing investments in the Company's growth
initiatives resulted in increased operating expenses during the first quarter
of 2008, which led to a decrease in net earnings for the first quarter of 2008
compared to net earnings in the first quarter of 2007.
Ritchie Bros. conducted 32 unreserved industrial auctions and five
unreserved agricultural auctions in nine countries throughout North America,
Europe, the Middle East, and Australia during the quarter ended March 31,
2008. The Company set three regional gross auction proceeds records during the
quarter, including the largest auction in the Company's history, held in
February 2008 at the Company's permanent auction site in Orlando, Florida with
gross auction proceeds of $190 million.
The Company had almost 60,000 bidder registrations at its unreserved
industrial auctions in the first quarter of 2008, of which approximately
16,000 were successful buyers. In the first quarter of 2007, the Company had
more than 55,000 bidder registrations, of which approximately 16,000 were
buyers.
Ritchie Bros. worked with a large number of truck, equipment and other
asset sellers in the first quarter of 2008, selling almost 49,000 lots from
over 7,000 consignments. In the first quarter of 2007, Ritchie Bros. sold
approximately 55,000 lots from over 6,000 consignments.
Although the Company's auctions varied greatly in size over the 12 months
ended March 31, 2008, the average Ritchie Bros. industrial auction attracted
over 1,400 bidders who competed for more than 1,400 lots consigned by 194
consignors, generating average gross auction proceeds per industrial auction
of $17.2 million (12 months ended March 31, 2007 - $15.3 million).
Almost $140 million worth of trucks, equipment, and real estate were sold
using the Company's rbauctionBid-Live internet bidding service during the
first quarter of 2008. This is an increase of 15% over the online gross
auction proceeds during the first quarter of 2007. More than 77,000 customers
from 170 countries have now registered and received approval to use
rbauctionBid-Live. Internet bidders represented approximately 28% of the total
registered bidders at Ritchie Bros. industrial auctions for the three month
period ended March 31, 2008, and they were the buyer or runner up bidder on
30% of the lots offered online at these auctions. The Company has now sold
almost $1.9 billion of industrial and agricultural assets over the internet.
Peter Blake, the Company's CEO, commented: "We are very pleased with the
gross auction proceeds and auction revenue growth we accomplished during the
first quarter. We continued to take steps to position our business for
sustainable long-term earnings growth by hiring more great people, expanding
our international network of auction sites and investing in process
improvement initiatives, and this resulted in higher operating expenses in the
first quarter of 2008. Our quarterly earnings have always been variable, which
is why we believe it is important to focus on our annual results."
Mr. Blake continued: "We still believe we are on track to deliver our
planned 2008 earnings growth, which will continue to reflect results of our
strategic efforts to grow our global business. We incurred higher personnel
and other costs in the first quarter as part of our longer-term objective to
grow our auction proceeds from $3 billion to $10 billion and beyond. As part
of that objective, we continue to deliver unsurpassed value to our customers
in the U.S. and other markets, particularly during these more challenging
times. Our platform is more global now than it has ever been, in large part
because of our ongoing investments in frontier markets, such as India, China
and Eastern Europe. We believe these investments allow us to provide
tremendous value for our customers and support our worldwide growth
initiative."
The Company's Board of Directors announces the appointment of
James M. Micali as a director of the Company effective April 25, 2008.
Mr. Micali is currently Chairman and President of Michelin North America, with
responsibility for Michelin's operations in North America. Mr. Micali has been
with Michelin since 1977 and brings a wealth of experience managing major
business functions, including strategic planning, sales and marketing,
customer service, mergers and acquisitions, finance, legal, information
systems, human resources and external relations. Mr. Micali is also a director
of Sonoco (NYSE: SON) and SCANA Corporation (NYSE: SCG). Mr. Micali obtained
his legal education from Boston College Law School and was admitted to the
bars of Rhode Island and Massachusetts.
Mr. Blake added: "We are thrilled to have someone of Jim's caliber join
our board - he brings a tremendous range of skills and experience that will be
invaluable as we continue to pursue our growth objectives."
Coincident with the appointment of Mr. Micali, the Company's Board of
Directors increased the total number of directors of the Company from six to
seven.
In addition, effective April 25, 2008, Robert S. Armstrong, formerly
Chief Operating Officer and Chief Financial Officer, was appointed Chief
Operating Officer of the Company and Robert A. McLeod, formerly Director,
Global Accounting, was appointed Chief Financial Officer.
The Company's Board of Directors also announces the declaration of a
quarterly cash dividend of $0.08 per common share payable on June 13, 2008 to
shareholders of record on May 23, 2008.
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.
About Ritchie Bros.
Established in 1958, Ritchie Bros. is the world's largest auctioneer of
industrial equipment, operating from over 110 locations in 27 countries around
the world. The Company sells, through unreserved public auctions, a broad
range of used and unused industrial equipment including trucks, equipment and
other assets used in the construction, transportation, mining, forestry,
petroleum, materials handling, marine, real estate and agricultural
industries. Ritchie Bros. maintains a website at
www.rbauction.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 and growth opportunities. 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 internet initiatives; conditions in
local and regional markets; our ability to attract and retain key employees,
develop additional auction sites and successfully complete our process
improvement initiatives and other systems upgrades; 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, 2007, available on the SEC, SEDAR and 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.
Three months Three months
Consolidated Statements of Operations ended March 31, ended March 31,
(USD thousands, except share and per 2008 2007
share amounts) (unaudited) (unaudited)
-------------------------------
Gross auction proceeds $ 781,969 $ 700,368
--------------- ---------------
--------------- ---------------
Auction revenues(1) $ 81,394 $ 68,549
Direct expenses(1) 10,115 7,565
--------------- ---------------
71,279 60,984
Expenses
Depreciation and amortization 5,604 4,225
General and administrative 41,591 30,729
Earnings from operations 24,084 26,030
Other income (expense)
Interest expense (370) (326)
Interest income 1,285 1,307
Gain on disposition of capital assets 93 63
Other income 243 352
--------------- ---------------
Earnings before income taxes 25,335 27,426
Income taxes 8,928 9,867
--------------- ---------------
Net earnings $ 16,407 $ 17,559
--------------- ---------------
--------------- ---------------
Net earnings per share(2) $ 0.16 $ 0.17
Net earnings per share - diluted(2) $ 0.16 $ 0.17
Weighted average shares outstanding(2) 104,555,118 104,038,170
Diluted weighted average shares
outstanding(2) 105,752,985 105,421,074
(1) Figures have been reclassified to conform with presentation adopted
in the current period.
(2) Share and per share amounts have been adjusted on a retroactive basis
to reflect the three-for-one stock split that occurred on April 24,
2008.
March 31,
Selected Balance Sheet Data 2008 December 31,
(USD thousands) (unaudited) 2007
-------------------------------
Current assets $ 403,817 $ 237,185
Current liabilities 343,672 178,978
--------------- ---------------
Working capital $ 60,145 $ 58,207
Total assets 850,569 672,887
Long-term debt 44,389 44,844
Total shareholders' equity 448,859 435,116
Three months Three months
ended March 31, ended March 31,
Selected Operating Data (unaudited) 2008 2007
-------------------------------
Auction revenues as percentage of
gross auction proceeds 10.41% 9.79%
Number of consignments at industrial
auctions 7,144 6,507
Number of bidders at industrial auctions 59,397 55,040
Number of buyers at industrial auctions 16,307 16,524
Number of permanent auction sites 29 27
Number of regional auction units 9 8
%SEDAR: 00010198E
