Ritchie Bros. reports fourth quarter and 2020 annual results

February 18, 2021 5:05 PM EST

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VANCOUVER, BC, Feb. 18, 2021 /PRNewswire/ - Ritchie Bros. Auctioneers Incorporated (NYSE: RBA) (TSX: RBA), (the "Company", "Ritchie Bros.", "we", "us", or "our") reported the following results for the fourth quarter and full year ended December 31, 2020.

(All figures are presented in U.S. dollars)

Fourth quarter highlights Net income attributable to stockholders decreased 5% to $48.9 million, compared to $51.6 million in Q4 2019. Adjusted net income attributable to stockholders*(non-GAAP measures), which excludes $5.2 million of acquisition-related costs ($3.9 million net of tax) related to the acquisition of Rouse Services LLC ("Rouse"), and $1.5 million current income tax expense related to an unfavourable adjustment to reflect final regulations published regarding hybrid financing arrangements, increased 13% to $54.3 million as compared to $48.2 million in Q4 2019. Diluted earnings per share ("EPS") attributable to stockholders decreased 6% to $0.44 per share in Q4 2020 compared to $0.47 per share in Q4 2019. Diluted adjusted EPS attributable to stockholders*(non-GAAP measures) which excludes adjusting items, increased 11% to $0.49 per share at Q4 2020 compared to $0.44 per share in Q4 2019.

Consolidated results:

  • Total revenue in Q4 2020 increased 15% to $383.4 million as compared to Q4 2019
    • Service revenue in Q4 2020 increased 6% to $231.7 million as compared to Q4 2019
    • Inventory sales revenue in Q4 2020 increased 33% to $151.8 million as compared to Q4 2019
  • Total selling, general and administrative expenses ("SG&A") in Q4 2020 increased 13% to $108.3 million as compared to Q4 2019
  • Operating income in Q4 2020 increased 2% to $72.9 million as compared to Q4 2019
  • Adjusted operating income*(non-GAAP measures) in Q4 2020 increased 16% to $78.1 million as compared to Q4 2019
  • Net income in Q4 2020 decreased 5% to $48.9 million as compared to Q4 2019
  • Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization* ("EBITDA") (non-GAAP measure) in Q4 2020 increased 12% to $98.5 million as compared to Q4 2019
  • Cash provided by operating activities was $257.9 million for 2020

Auctions & Marketplaces segment results:

  • GTV1 in Q4 2020 increased 5% to $1.4 billion as compared to Q4 2019
  • A&M total revenue in Q4 2020 increased 17% to $348.5 million as compared to Q4 2019
    • Service revenue in Q4 2020 increased 7% to $196.7 million as compared to Q4 2019
    • Inventory sales revenue in Q4 2020 increased 33% to $151.8 million as compared to Q4 2019

Other Services segment results:

  • Other Services total revenue in Q4 2020 increased 2% to $35.0 million as compared to Q4 2019
  • RBFS revenue in Q4 2020 increased 10% to $9.1 million as compared to Q4 2019

Other Company development

  • On December 8, 2020, the Company acquired Rouse, a privately held company that provides data intelligence and performance benchmarking solutions for a fair value of approximately $275 million  

_____________________

1 Gross Transaction Value ("GTV") represents total proceeds from all items sold at the Company's live on site auctions and online marketplaces. GTV is not a measure of financial performance, liquidity, or revenue, and is not presented in the Company's consolidated financial statements.

The Company presents both GAAP and non-GAAP measures to provide investors with additional information. Providing these non-GAAP measures along with GAAP measures allows for increased comparability of our ongoing performance from period to period. Non-GAAP financial measures referred to in this news release are labeled as "non-GAAP measure" or designated as such with an asterisk (*). Please see page 9-11 for explanations of why the Company uses these non-GAAP measures and the reconciliation to the most comparable GAAP financial measures.

Full year highlights Net income attributable to stockholders for 2020 increased 14% to $170.1 million compared to $149.0 million in 2019. Adjusted net income attributable to stockholders* (non-GAAP measure), which excludes $7.8 million income tax expense related to an unfavourable adjustment to reflect final regulations published regarding hybrid financing arrangements, $5.2 million of acquisition-related costs ($3.9 million net of tax) related to the acquisition of Rouse, and $4.3 million ($3.2 million net of tax) of severance costs, increased 27% to $185.0 million in 2020 as compared to $145.6 million in 2019. Diluted earnings per share ("EPS") attributable to stockholders increased 13% to $1.54 from $1.36 per share. Diluted adjusted EPS attributable to stockholders* (non-GAAP measure), which excludes adjusting items, increased 26% to $1.68 per share in 2020 as compared to $1.33 per share in 2019.

Consolidated results:

  • Total revenue increased 4% to $1.4 billion as compared to 2019
    • Service revenue increased 8% to $871.6 million as compared to 2019
    • Inventory sales revenue decreased 2% to $505.7 million as compared to 2019
  • Total SG&A increased 9% to $417.5 million in 2020 as compared to 2019
  • Operating income increased 18% to $263.2 million as compared to 2019
  • Net income increased 14% to $170.4 million as compared to 2019
  • Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization* ("EBITDA")(non-GAAP measure) increased 20% to $353.5 million as compared to 2019
  • Cash provided by operating activities was $257.9 million for the year ended December 31, 2020

Auctions & Marketplaces segment results:

  • GTV increased 5% to $5.4 billion compared to 2019
  • A&M total revenue increased 4% to $1.2 billion as compared to 2019
    • Service revenue increased 9% to $740.0 million as compared to 2019
    • Inventory sales revenue decreased 2% to $505.7 million as compared to 2019

Other Services segment results:

  • Other Services total revenue increased 5% to $131.6 million as compared to 2019
  • RBFS revenue increased 12% to $32.2 million as compared to 2019

"We delivered a solid fourth quarter with a 5% increase in GTV contributing to an 18% growth in operating income for the full year."

"2020 was an unprecedented year as the COVID-19 pandemic had a devastating impact on public health while creating global economic uncertainty. I am proud of the technology driven innovations our teams implemented to help customers leverage our Omni-channel platform while keeping our health protocols a top priority," said Ann Fandozzi, CEO of Ritchie Bros.

Fandozzi concluded "Uncertainty in the fourth quarter, driven by new COVID shut-downs and turbulent US election, resulted in consigners taking a wait and see approach. We continue to focus on things that drive long term value: innovating and leveraging technology to enhance customer experience, optimizing operating cost and driving execution against our strategic pillars."

Financial Overview(Unaudited)

(in U.S. $000's, except EPS and percentages)

Three months ended December 31,

Year ended December 31,

% Change

% Change

2020

2019

2020 over 2019

2020

2019

2020 over 2019

Service revenue:

Commissions

$

121,170

$

114,107

6

%

$

452,882

$

431,781

5

%

Fees

110,485

104,362

6

%

418,714

372,243

12

%

Total service revenue

231,655

218,469

6

%

871,596

804,024

8

%

Inventory sales revenue

151,758

113,725

33

%

505,664

514,617

(2)

%

Total revenue

383,413

332,194

15

%

1,377,260

1,318,641

4

%

Costs of services

39,270

42,258

(7)

%

157,296

164,977

(5)

%

Cost of inventory sold

137,322

108,136

27

%

458,293

480,839

(5)

%

Selling, general and administrative expenses

108,318

95,800

13

%

417,523

382,389

9

%

Operating expenses

310,521

260,710

19

%

1,114,100

1,095,439

2

%

Operating income

72,892

71,484

2

%

263,160

223,202

18

%

Operating income as a % of total revenue

19.0

%

21.5

%

(250)

bps

19.1

%

16.9

%

220

bps

Net income attributable to stockholders

48,857

51,573

(5)

%

170,095

149,039

14

%

Adjusted net income attributable to stockholders*

54,268

48,183

13

%

184,952

145,649

27

%

Diluted EPS attributable to stockholders

$

0.44

$

0.47

(6)

%

$

1.54

$

1.36

13

%

Diluted adjusted EPS attributable to stockholders*

$

0.49

$

0.44

11

%

$

1.68

$

1.33

26

%

Effective tax rate

25.6

%

19.9

%

570

bps

27.8

%

21.8

%

600

bps

Total GTV

1,448,832

1,383,908

5

%

5,411,218

5,140,587

5

%

Service GTV

1,297,074

1,270,183

2

%

4,905,554

4,625,970

6

%

Service revenue as a % of total GTV- Rate

16.0

%

15.8

%

20

bps

16.1

%

15.6

%

50

bps

Inventory GTV

151,758

113,725

33

%

505,664

514,617

(2)

%

Service revenue as a % of total revenue

60.4

%

65.8

%

(540)

bps

63.3

%

61.0

%

230

bps

Inventory sales revenue as a % of total revenue

39.6

%

34.2

%

540

bps

36.7

%

39.0

%

(230)

bps

Cost of inventory sold as a % of operating expenses

44.2

%

41.5

%

270

bps

41.1

%

43.9

%

(280)

bps

Service GTV as a % of total GTV - Mix

89.5

%

91.8

%

(230)

bps

90.7

%

90.0

%

70

bps

Inventory sales revenue as a % of total GTV- Mix

10.5

%

8.2

%

230

bps

9.3

%

10.0

%

(70)

bps

Segment Overview

(in U.S $000's)

Three months ended December 31, 2020

Year ended December 31, 2020

A&M

Other

Consolidated

A&M

Other

Consolidated

Service revenue

$

196,703

34,952

$

231,655

$

740,043

131,553

$

871,596

Inventory sales revenue

151,758

151,758

505,664

505,664

Total revenue

348,461

34,952

383,413

1,245,707

131,553

1,377,260

Ancillary and logistical service expenses

14,614

14,614

59,982

59,982

Other costs of services

23,177

1,479

24,656

92,195

5,119

97,314

Cost of inventory sold

137,322

137,322

458,293

458,293

SG&A expenses

98,365

9,954

108,319

388,442

29,081

417,523

Segment profit

$

89,597

8,905

$

98,502

$

306,777

37,371

$

344,148

Total GTV

1,448,832

N/A

N/A

5,411,218

N/A

N/A

A&M service revenue as a % of total GTV- Rate

13.6

%

N/A

N/A

13.7

%

N/A

N/A

(in U.S $000's)

Three months ended December 31, 2019

Year ended December 31, 2019

A&M

Other

Consolidated

A&M

Other

Consolidated

Service revenue

$

184,243

$

34,226

$

218,469

$

678,823

$

125,201

$

804,024

Inventory sales revenue

113,725

113,725

514,617

514,617

Total revenue

297,968

34,226

332,194

1,193,440

125,201

1,318,641

Ancillary and logistical service expenses

15,736

15,736

59,252

59,252

Other costs of services

25,022

1,500

26,522

99,821

5,904

105,725

Cost of inventory sold

108,136

108,136

480,839

480,839

SG&A expenses

89,230

6,570

95,800

358,016

24,373

382,389

Segment profit

$

75,580

$

10,420

$

86,000

254,764

35,672

290,436

Total GTV

1,383,908

N/A

N/A

5,140,587

N/A

N/A

A&M service revenue as a % of total GTV- Rate

13.3

%

N/A

N/A

13.2

%

N/A

N/A

Q4 2020 Consolidated Performance Overview

In response to COVID-19 pandemic, beginning in March 2020, we transitioned all our traditional live on site auctions to online bidding utilizing our existing online bidding technology and simultaneously ceased all public attendance at our live auction theaters. Our core online auction channels (IronPlanet.com, GovPlanet.com, Marketplace-E) continued to operate as usual.

GTV increased 5% to $1.4 billion in Q4 2020. The increase was primarily in Canada due to a large dispersal of pipeline equipment at our Q4 2020 Grand Prairie auction, as well as holding three net new auctions compared to Q4 2019. The International sales team also delivered positive year-over-year results at our St. Aubin, France, and Caorso, Italy on site auctions, offset by lower online performance in Europe as well as the non-repeat of our Narita auction, which was cancelled due to the COVID-19 pandemic. We had lower year-over-year performance in our US live auctions, primarily due softer equipment supply, election uncertainty, and COVID fatigue, partially offset by positive growth on our online channel due to strong sales execution by our US strategic accounts team.

Total revenue increased 15% to $383.4 million in Q4 2020.

Service revenue increased 6% with both commissions revenue and fees revenue increasing 6%. Fees revenue was up 6% driven by higher fees from total GTV growth of 5% and improved buyer fee rate performance driven by our online fee structure in Australia,  incremental revenue of Rouse, higher online listing inspection fees in line with increased online GTV, and the continued growth in RBFS fee revenue. This increase was partially offset by lower ancillary fees from refurbishing and transporting sellers' equipment driven by lower volume in the US. Commission revenue increased 6% driven by higher volume of guarantee contracts and rate improvement in both US and Canada.

Inventory sales revenue increased 33% representing higher inventory sales volume primarily driven by strong performance in our Canada region due to a large dispersal of pipeline equipment in our Q4 2020 Grand Prairie auction. In addition, our International region also experienced strong growth in Australia and Europe. This was partially offset by the non-repeat of larger inventory contracts in the US.

Costs of services decreased 7% to $39.3 million. In response to the COVID-19 pandemic, we transitioned our live on site auctions to online bidding, utilizing TAL solutions for selected International and on-the-farm agricultural events and implementing travel restrictions. These operational changes resulted in temporary cost reductions in travel, advertising, and promotion expenses, and employee compensation. In addition, we incurred lower ancillary and logistical service expenses, in line with the decrease in ancillary fees earned from refurbishing and transporting sellers' equipment driven by lower volume in the US. This was partially offset by higher cost of services incurred to support new government contracts. 

Cost of inventory increased 27% to $137.3 million, in line with the overall increase in inventory GTV. Cost of inventory sold increased at a lower rate than the increase of inventory sales revenue, indicating an increase in the inventory revenue rate of return. The inventory rate of return improved mainly due to the achievement of strong rate performance across all regions.

Selling, general and administrative ("SG&A") expenses increased 13% to $108.3 million primarily due to higher headcount to support our growth initiatives and higher short-term incentive expense driven by strong performance. In addition, in Q4 2019, we recognized a recovery of $4.1 million of share-based payment expense related to the departure of our former CEO, which is non-recurring. These increases were partially offset by lower SG&A expenses related to lower travel, advertising, and promotion costs as we implemented travel restrictions.

Foreign exchange had a favourable impact on total revenue and an unfavourable impact on expenses. These impacts were primarily due to the fluctuations in the Euro and Australian dollar exchange rates relative to the U.S. dollar.

Net income attributable to stockholders decreased 5% to $48.9 million. The decrease is partially due to $5.2 million of acquisition-related costs incurred in 2020 related to the acquisition of Rouse, $1.5 million current income tax expense related to an unfavourable adjustment to reflect final regulations published regarding hybrid financing arrangements, and recovery of $4.1 million of share-based payment expense recognized in 2019 related to the departure of our former CEO, which are all non-recurring. An increase in the effective tax rate, partially offset by lower interest expense and higher operating income, also contributed to the decrease in net income attributable to stockholders.

Primarily for the same reasons noted above, diluted EPS attributable to stockholders decreased 6% to $0.44 per share for Q4 2020 from $0.47 per share in Q4 2019. Diluted adjusted EPS attributable to stockholders* increased 11% to $0.49 per share in Q4 2020, after excluding $5.2 million of acquisition-related costs ($3.9 million net of tax) and $1.5 million income tax expense in Q4 2020.

Dividend Information

Quarterly dividendOn January 22, 2021, the Company declared a quarterly cash dividend of $0.22 per common share payable on March 5, 2021 to shareholders of record on February 12, 2021.

Q4 2020 Earnings Conference CallRitchie Bros. is hosting a conference call to discuss its financial results for the quarter ended December 31, 2020 at 8am Pacific time / 11 am Eastern time / 4pm GMT on February 19, 2021. The replay of the webcast will be available through March 6, 2021.

Conference call and webcast details are available at the following link:https://investor.ritchiebros.com

About Ritchie Bros.Established in 1958, Ritchie Bros. (NYSE and TSX: RBA) is a world leader in asset management technologies and disposition of commercial assets. We offer customers end-to-end solutions for buying and selling used heavy equipment, trucks, and other assets. Operating in a number of sectors, including construction, transportation, agriculture, energy, oil and gas, mining, and forestry, the company's selling channels include: Ritchie Bros. Auctioneers, the world's largest industrial auctioneer offers live auction events with online bidding; IronPlanet, an online marketplace with featured weekly auctions and providing the exclusive IronClad Assurance® equipment condition certification; Marketplace-E, a controlled marketplace offering multiple price and timing options; Mascus, a leading European online equipment listing service; Rouse, a leader in market intelligence on sales and rental equipment data; and Ritchie Bros. Private Treaty, offering privately negotiated sales. Our suite of multichannel sales solutions also includes RB Asset Solutions, a complete end-to-end asset management and disposition system. We also offer sector-specific solutions including GovPlanet, TruckPlanet, and Kruse Energy Auctioneers, plus equipment financing and leasing through Ritchie Bros. Financial Services. For more information about Ritchie Bros., visit RitchieBros.com.

Forward-looking StatementsThis news release contains forward-looking statements and forward-looking information within the meaning of applicable U.S. and Canadian securities legislation (collectively, "forward-looking statements"), including, in particular, statements regarding future financial and operational results, including future auctions and estimated GTV thereof, growth and value prospects and payment of dividends, and the expected benefits of the Rouse acquisition. Forward-looking statements are statements that are not historical facts and are generally, although not always, identified by words such as "expect", "plan", "anticipate", "project", "target", "potential", "schedule", "forecast", "budget", "estimate", "intend", or "believe" and similar expressions or their negative connotations, or statements that events or conditions "will", "would", "may", "could", "should", or "might" occur. All such forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. Forward-looking statements necessarily involve assumptions, risks and uncertainties, certain of which are beyond the Company's control, including the duration and impact of the COVID-19 pandemic on the Company's operations, the operations of customers, and general economic conditions; the numerous factors that influence the supply of and demand for used equipment; economic and other conditions in local, regional and global sectors; the Company's ability to successfully integrate acquired companies, and to receive the anticipated benefits of such acquisitions; and the risks and uncertainties set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2020, which are available on the SEC, SEDAR, and Company websites. The foregoing list is not exhaustive of the factors that may affect the Company's forward-looking statements. There can be no assurance that forward-looking statements will prove to be accurate, and actual results may differ materially from those expressed in, or implied by, these forward-looking statements. Forward looking statements are made as of the date of this news release and the Company does not undertake any obligation to update the information contained herein unless required by applicable securities legislation. For the reasons set forth above, you should not place undue reliance on forward looking statements.

GTV and Selected Condensed Consolidated Financial Information

GTV and Condensed Consolidated Income Statements – Fourth Quarter(Expressed in thousands of United States dollars, except share, per share amounts and percentages)(Unaudited)

(in U.S. $000's, except EPS)

Three months ended December 31, 

Year ended December 31, 

% Change

% Change

2020

2019

2020 over 2019

2020

2019

2020 over 2019

GTV

$

1,448,832

$

1,383,908

5

%

$

5,411,218

$

5,140,587

5

%

Revenues:

Service revenues

$

231,655

$

218,469

6

%

$

871,596

$

804,024

8

%

Inventory sales revenue

151,758

113,725

33

%

505,664

514,617

(2)

%

Total revenues

383,413

332,194

15

%

1,377,260

1,318,641

4

%

Operating expenses:

Costs of services

39,270

42,258

(7)

%

157,296

164,977

(5)

%

Cost of inventory sold

137,322

108,136

27

%

458,293

480,839

(5)

%

Selling, general and administration expenses

108,318

95,800

13

%

417,523

382,389

9

%

Acquisition-related costs

6,014

25

23,956

%

6,014

777

674

%

Depreciation and amortization expenses

19,337

18,582

4

%

74,921

70,501

6

%

Gain on disposition of property, plant and equipment

(22)

(36)

(39)

%

(1,559)

(1,107)

41

%

Foreign exchange (gain) loss

282

(4,055)

(107)

%

1,612

(2,937)

(155)

%

Total operating expenses

310,521

260,710

19

%

1,114,100

1,095,439

2

%

Operating income

72,892

71,484

2

%

263,160

223,202

18

%

Interest expense

(8,767)

(10,254)

(15)

%

(35,568)

(41,277)

(14)

%

Other income, net

1,583

3,158

(50)

%

8,296

8,838

(6)

%

Income before income taxes

65,708

64,388

2

%

235,888

190,763

24

%

Income tax expense

16,789

12,823

31

%

65,530

41,623

57

%

Net income

$

48,919

$

51,565

(5)

%

$

170,358

$

149,140

14

%

Net income attributable to:

Stockholders

$

48,856

$

51,573

(5)

%

170,095

$

149,039

14

%

Non-controlling interests

63

(8)

(888)

%

263

101

160

%

$

48,919

$

51,565

(5)

%

170,358

$

149,140

14

%

Earnings per share attributable to stockholders:

Basic

$

0.45

$

0.47

(4)

%

1.56

$

1.37

14

%

Diluted

$

0.44

$

0.47

(6)

%

1.54

$

1.36

13

%

Weighted average number of share outstanding:

Basic

109,553,256

108,609,481

1

%

109,054,493

108,519,739

0

%

Diluted

111,058,161

110,194,557

1

%

110,310,984

109,759,123

1

%

Condensed Consolidated Balance Sheets(Expressed in thousands of United States dollars, except share data)(Unaudited)

Year ended December 31,

2020

2019

Assets

Cash and cash equivalents

$

278,766

$

359,671

Restricted cash

28,129

60,585

Trade and other receivables

135,001

142,627

Less: allowance for credit losses

(5,467)

(5,225)

Inventory

86,278

64,956

Other current assets

27,274

50,160

Income taxes receivable

6,797

6,810

Total current assets

556,778

679,584

Property, plant and equipment

492,127

484,482

Other non-current assets

147,608

145,679

Intangible assets

300,948

233,380

Goodwill

840,610

672,310

Deferred tax assets

13,458

13,995

Total assets

$

2,351,529

$

2,229,430

Liabilities and Equity

Auction proceeds payable

$

214,254

$

276,188

Trade and other payables

243,786

194,279

Income taxes payable

17,032

7,809

Short-term debt

29,145

4,705

Current portion of long-term debt

10,360

18,277

Total current liabilities

514,577

501,258

Long-term debt

626,288

627,204

Other non-current liabilities

153,000

151,238

Deferred tax liabilities

45,265

42,743

Total liabilities

1,339,130

1,322,443

Commitments and Contingencies

Stockholders' equity:

Share capital:

Common stock; no par value, unlimited shares

authorized, issued and outstanding shares:

109,876,428 (December 31, 2019: 109,337,781)

200,451

194,771

Additional paid-in capital

49,171

52,110

Retained earnings

791,918

714,051

Accumulated other comprehensive loss

(34,295)

(59,099)

Stockholders' equity

1,007,245

901,833

Non-controlling interest

5,154

5,154

Total stockholders' equity

1,012,399

906,987

Total liabilities and equity

$

2,351,529

$

2,229,430

Condensed Consolidated Statements of Cash Flows(Expressed in thousands of United States dollars)(Unaudited)

Year ended December 31,

2020

2019

2018

Cash provided by (used in):

Operating activities:

Net income

$

170,358

$

149,140

$

121,506

Adjustments for items not affecting cash:

Depreciation and amortization expenses

74,921

70,501

66,614

Impairment loss

Stock option compensation expense

5,853

4,697

8,252

Equity-classified share unit expense

9,897

8,047

11,256

Share-based continuing employment costs

802

Deferred income tax expense

9,152

8,826

6,239

Unrealized foreign exchange (gain) loss

2,453

(3,058)

951

Gain on disposition of property, plant and equipment

(1,559)

(1,107)

(2,731)

Amortization of debt issuance costs

3,123

4,086

4,995

Gain on disposition of equity investment

(4,935)

Amortization of right-of-use assets

12,240

12,280

Gain on contingent consideration from equity investment

(1,700)

Other, net

1,466

2,779

(2,317)

Net changes in operating assets and liabilities

(29,134)

76,602

(65,550)

Net cash provided by operating activities

257,872

332,793

144,280

Investing activities:

Acquisition of Rouse, net of cash acquired

(250,039)

Property, plant and equipment additions

(14,263)

(13,589)

(16,860)

Proceeds on disposition of property, plant and equipment

16,385

5,929

10,586

Intangible asset additions

(28,873)

(27,415)

(26,152)

Issuance of loans receivable

(9,071)

Repayment of loans receivable

3,227

Distribution from equity investment

4,212

Proceeds on contingent consideration from equity investment

1,700

6,147

Other, net

(982)

(4,674)

Net cash used in investing activities

(276,722)

(36,057)

(30,953)

Financing activities:

Share repurchase

(53,170)

(42,012)

Dividends paid to stockholders

(91,737)

(82,535)

(75,678)

Dividends paid to NCI

(320)

Proceeds from exercise of options and share option plans

44,128

41,094

28,524

Payment of withholding taxes on issuance of shares

(6,656)

(5,260)

(3,901)

Proceeds from short-term debt

50,799

13,169

19,715

Repayment of short-term debt

(29,368)

(28,684)

(6,628)

Repayment of long-term debt

(13,711)

(76,282)

(91,013)

Debt issue costs

(2,038)

Repayment of finance lease obligations

(9,388)

(6,708)

(3,950)

Other, net

(1,176)

Net cash used in financing activities

(111,461)

(187,218)

(134,107)

Effect of changes in foreign currency rates on cash, cash equivalents, and restricted cash

16,950

5,171

(4,769)

Increase

(113,361)

114,689

(25,549)

Beginning of period

420,256

305,567

331,116

Cash, cash equivalents, and restricted cash, end of period

$

306,895

$

420,256

$

305,567

Selected Data(Unaudited)

Industrial live on site auction metrics

Three months ended December 31,

Year ended December 31,

% Change

% Change

2020

2019

2020 over 2019

2020

2019

2020 over 2019

Number of auctions

45

54

(17)

%

168

194

(13)

%

Bidder registrations

279,950

223,800

25

%

957,050

732,550

31

%

Consignors

14,950

15,850

(6)

%

55,400

58,850

(6)

%

Buyers

43,000

44,350

(3)

%

157,250

153,400

3

%

Lots

116,950

117,650

(1)

%

429,400

422,800

2

%

Non-GAAP Measures This news release references to non-GAAP measures. Non-GAAP measures do not have a standardized meaning and are, therefore, unlikely to be comparable to similar measures presented by other companies. The presentation of this financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation of, or as a substitute for, the financial information prepared and presented in accordance with generally accepted accounting principles. Non-GAAP financial measures referred to in this report are labeled as "non-GAAP measure" or designated as such with an asterisk (*).

Adjusted Operating Income* ReconciliationThe Company believes that adjusting operating income* eliminates the financial impact of adjusting items which are significant non-recurring items that we do not consider to be part of our normal operating results, such as acquisition-related costs, management reorganization costs, and certain other items, which we refer to as 'adjusting items'. The Company believes that comparing adjusted operating income* for different financial periods provides useful information about the growth or decline of our operating income for the relevant financial period.

The following table reconciles adjusted operating income to operating income, which is the most directly comparable GAAP measure in our consolidated income statements.

Three months ended December 31,

Year ended December 31,

% Change

% Change

2020 over

2020 over

(in U.S. $000's, except percentages)

2020

2019

2020 over 2019

2020

2019

2020 over 2019

Operating income

$

72,892

$

71,484

2

%

$

263,160

$

223,202

18

%

Pre-tax adjusting items:

Share-based payment recovery

(4,078)

(100)

%

(4,078)

(100)

%

Acquisition-related costs

5,213

100

%

5,213

100

%

Severance

%

4,283

100

%

Adjusted operating income*

$

78,105

$

67,406

16

%

$

272,656

$

219,124

24

%

(1)

Please refer to page 12 for a summary of adjusting items for the three months and year ended December 31, 2020 and 2019.

(2)

Adjusted operating income* represents operating income excluding the effects of adjusting items.

Adjusted Net Income Attributable to Stockholders* and Diluted Adjusted EPS Attributable to Stockholders* Reconciliation The Company believes that adjusted net income attributable to stockholders* provides useful information about the growth or decline of the net income attributable to stockholders for the relevant financial period and eliminates the financial impact of adjusting items the Company does not consider to be part of the normal operating results. Diluted Adjusted EPS attributable to stockholders* eliminates the financial impact of adjusting items which are after-tax effects of significant non-recurring items that the Company does not consider to be part of the normal operating results, such as acquisition-related costs, management reorganization costs, and certain other items, which the Company refers to as 'adjusting items'.

The following table reconciles adjusted net income attributable to stockholders* and diluted adjusted EPS attributable to stockholders* to net income attributable to stockholders and diluted EPS attributable to stockholders, which are the most directly comparable GAAP measures in the consolidated income statements.

(in U.S. $000's, except share and per share data, and percentages)

Three months ended December 31,

Year ended December 31,

% Change

% Change

2020

2019

2020 over 2019

2020

2019

2020 over 2019

Net income attributable to stockholders

$

48,857

$

51,573

(5)

%

$

170,095

$

149,039

14

%

Pre-tax adjusting items:

Acquisition-related costs

5,213

100

%

5,213

100

%

Share-based payment recovery

(4,078)

(100)

%

(4,078)

(100)

%

Severance

%

4,283

100

%

Current income tax effect of adjusting items:

Acquisition-related costs

(1,329)

(100)

%

(1,329)

(100)

%

Severance

%

(1,065)

(100)

%

Deferred income tax effect of adjusting items:

Share-based payment recovery

688

(100)

%

688

(100)

%

Current income tax adjusting item:

Change in uncertain tax provision

1,527

100

%

2,293

100

%

Deferred tax adjusting item:

Change in uncertain tax provision

%

5,462

100

%

Adjusted net income attributable to stockholders*

$

54,268

$

48,183

13

%

$

184,952

$

145,649

27

%

Weighted average number of dilutive shares outstanding

111,058,161

110,194,557

1

%

110,310,984

109,759,123

1

%

Diluted earnings per share attributable to stockholders

$

0.44

$

0.47

(6)

%

$

1.54

$

1.36

13

%

Diluted adjusted EPS attributable to Stockholders*

$

0.49

$

0.44

11

%

$

1.68

$

1.33

26

%

(1)

Please refer to page 12 for a summary of adjusting items for the three months and year ended December 31, 2020 and 2019

(2)

Adjusted net income attributable to stockholders* represents net income attributable to stockholders excluding the effects of adjusting items

(3)

Diluted adjusted EPS attributable to stockholders* is calculated by dividing adjusted net income attributable to stockholders*, net of the effect of dilutive securities, by the weighted average number of dilutive shares outstanding

Adjusted EBITDA*The Company believes that adjusted EBITDA* provides useful information about the growth or decline of our net income when compared between different financial periods.

The following table reconciles adjusted EBITDA* to net income, which is the most directly comparable GAAP measures in, or calculated from, our consolidated income statements:

(in U.S. $000's, except percentages)

Three months ended December 31,

Year ended December 31,

% Change

% Change

2020

2019

2020 over 2019

2020

2019

2020 over 2019

Net income

$

48,920

$

51,565

(5)

%

$

170,358

$

149,140

14

%

Add: depreciation and amortization expenses

19,337

18,582

4

%

74,921

70,501

6

%

Add: interest expense

8,767

10,254

(15)

%

35,568

41,277

(14)

%

Less: interest income

(563)

(1,367)

(59)

%

(2,338)

(3,802)

(39)

%

Add: income tax expense

16,789

12,823

31

%

65,530

41,623

57

%

Pre-tax adjusting items:

Share-based payment recovery

(4,078)

(100)

%

(4,078)

(100)

%

Acquisition-related costs

5,213

100

%

5,213

100

%

Severance

%

4,283

100

%

Adjusted EBITDA*

$

98,463

$

87,779

12

%

$

353,535

$

294,661

20

%

(1)

Please refer to page 12 for a summary of adjusting items for the three months and year ended December 31, 2020 and 2019.

(2)

Adjusted EBITDA* is calculated by adding back depreciation and amortization expenses, interest expense, and income tax expense, and subtracting interest income from net income excluding the pre-tax effects of adjusting items.

Adjusting items for the year ended December 31, 2020:

Recognized in the fourth quarter of 2020

  • $5.2 million ($3.9 million after tax, or $0.04 per diluted share) of acquisition-related costs related to the acquisition of Rouse.
  • $1.5 million ($0.01 per diluted share) of current income tax expense recognized related to an unfavourable adjustment to reflect final regulations published in Q2 2020 regarding hybrid financing arrangements.

Recognized in the third quarter of 2020

  • $4.3 million ($3.2 million after tax, or $0.03 per diluted share) of severance costs related to the realignment of leadership to support the new global operations organization, in line with strategic growth priorities led by the new CEO.

Recognized in the second quarter of 2020

  • $6.2 million ($0.06 per diluted share) in current and deferred income tax expense related to an unfavourable adjustment to reflect final regulations published regarding hybrid financing arrangements.

Recognized in the first quarter of 2020

  • There were no adjustment items recognized in the first quarter of 2020.

Adjusting items for the year ended December 31, 2019:

Recognized in the fourth quarter of 2019

  • $4.1 million ($3.4 million after tax, or $0.03 per diluted share) in share-based payment expense recovery related to the departure of our former CEO.

Recognized in the third quarter of 2019

  • There were no adjustment items recognized in the third quarter of 2019.

Recognized in the second quarter of 2019

  • There were no adjustment items recognized in the second quarter of 2019.

Recognized in the first quarter of 2019

  • There were no adjustment items recognized in the first quarter of 2019.

https://www.ritchiebros.com/

Cision View original content:http://www.prnewswire.com/news-releases/ritchie-bros-reports-fourth-quarter-and-2020-annual-results-301231306.html

SOURCE Ritchie Bros. Auctioneers



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