Ritchie Bros. Auctioneers achieves over $1 billion of gross auction proceeds in second quarter and increases dividend
Friday, August 8th 2008
Ritchie Bros. Auctioneers Incorporated announces another record-breaking quarter, with quarterly gross auction proceeds exceeding $1 billion for the first time. Net earnings for the six months ended June 30, 2008 reached $62.3 million, or $0.59 per diluted weighted average share. Net earnings for the first half of 2008 would have been $55.0 million, or $0.52 per diluted share, had after-tax gains of $7.3 million on the sale of excess property been excluded. The Company has highlighted these gains because it does not consider them to be part of its normal operating results. This compares to net earnings of $44.1 million, or $0.42 per diluted share for the six months ended June 30, 2007, representing earnings growth of 25% over the first half of 2007. All dollar amounts are presented in United States dollars and all share and per share information reflects 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 six months ended June 30, 2008 were $1.95 billion, 18% higher than gross auction proceeds for the first half of 2007. Auction revenues increased 21% to $197.2 million for the six months ended June 30, 2008 compared to the first six months of 2007. The Company’s auction revenue rate (auction revenues as a percentage of gross auction proceeds) was 10.14% in 2008, compared to 9.88% in the first half of 2007.
The Company achieved gross auction proceeds of $1.16 billion in the second quarter of 2008, representing a 23% increase compared to the second quarter of 2007. Auction revenues were $115.8 million for the three months ended June 30, 2008, compared to $94.1 million for the second quarter of 2007. The Company’s auction revenue rate was 9.95% for the second quarter of 2008. Net earnings for the three months ended June 30, 2008 were $45.9 million, or $0.43 per diluted share. Had after-tax gains on the sale of excess property been excluded, net earnings would have been $38.6 million, or $0.37 per diluted share, which represented a 45% increase over the prior year.
Ritchie Bros. conducted 92 unreserved industrial auctions in 12 countries throughout North America, Europe, the Middle East, Asia and Australia during the first half of 2008. The Company set eight regional gross auction proceeds records during the period, 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.
During the first half of 2008, the Company had almost 140,000 bidder registrations at its unreserved industrial auctions, of which over 41,000 were successful buyers. In the first half of 2007, the Company had more than 129,000 bidder registrations, of which over 40,000 were buyers.
Ritchie Bros. worked with a large number of truck, equipment and other asset sellers in the first half of 2008, selling almost 123,000 lots from over 18,000 consignments. In the first half of 2007, Ritchie Bros. sold almost 138,000 lots from over 17,000 consignments.
Although the Company’s auctions varied greatly in size over the 12 months ended June 30, 2008, the average Ritchie Bros. industrial auction attracted over 1,400 bidders who competed for more than 1,400 lots consigned by 193 consignors, generating average gross auction proceeds per industrial auction of $17.8 million (12 months ended June 30, 2007 – $15.9 million).
Almost $370 million worth of trucks, equipment, and other assets were sold using the Company’s rbauctionBid-Live internet bidding service during the first half of 2008. This is an increase of 21% over the online gross auction proceeds during the first half of 2007. More than 89,000 customers from almost 180 countries have now registered and received approval to use rbauctionBid-Live. Internet bidders represented approximately 26% of the total registered bidders at Ritchie Bros. industrial auctions for the six month period ended June 30, 2008, and they were the buyer or runner up bidder on approximately 29% of the lots offered online at these auctions. Since launching its internet bidding service in 2002, the Company has now sold over $2.1 billion of trucks, equipment, and other assets over the internet.
Peter Blake, the Company’s CEO, said: “Each year we have welcomed more bidders and more sellers from around the world to our auctions and that trend continued in the first six months of 2008. Many of the markets and regions we serve are experiencing challenging economic times, yet our auctions were, on average, larger than ever before. We proudly conducted our first billion-dollar quarter in Q2 and set a number of new company records, including our highest auction revenues, net earnings and earnings per share for one quarter. We are very pleased with these results because they are evidence of our success to date in executing our ongoing growth strategy, which emphasizes continual reinvestment in our people, places and processes. In the past six months we continued to lay the foundation for sustainable long-term growth by hiring and training more qualified sales and support personnel; expanding and improving our global network of auction sites; and investing in the development of more efficient and scalable business processes.”
The Company’s Board of Directors also announces the declaration of a quarterly cash dividend of $0.09 per common share payable on September 12, 2008 to shareholders of record on August 22, 2008, representing a 13% increase over the Company’s previous quarterly dividend.
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 are 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 through over 110 locations in more than 27 countries around the world. The Company sells, through unreserved public auctions, a broad range of used and unused industrial assets, including equipment, trucks and other assets utilized in the construction, transportation, material handling, mining, forestry, petroleum, marine, and agricultural industries. The Company maintains a web site at www.rbauction.com.
