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Ritchie Bros. Auctioneers achieves over $1 Billion of gross auction proceeds in second quarter and increases dividend

08/08/2008

FOR IMMEDIATE RELEASE: August 8, 2008

VANCOUVER, BRITISH COLUMBIA – Ritchie Bros. Auctioneers Incorporated (NYSE and TSX: RBA) 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 25 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, real estate, and agricultural industries. The Company maintains a web site at www.rbauction.com.

Earnings Conference Call
Ritchie Bros. is hosting a conference call to discuss its 2008 first half financial results at 8:00am Pacific Time (11:00am Eastern Time) on August 8, 2008. To access a live broadcast of the conference call, please go to the Ritchie Bros. website http://www.rbauction.com, click on 'About Ritchie Bros.' then click on 'Investor Information'. Please go to the website at least fifteen minutes early to download and install any necessary audio software. A replay will be available on the website shortly after the call.

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.

Consolidated Statements of Operations (USD thousands, except share and per share amounts)

Six months
ended June 30,
2008
(unaudited)

Six months
ended June 30,
2007
(unaudited)

Gross auction proceeds
$ 1,945,515
$ 1,645,624
 
 
Auction revenues (1)
$ 197,216
$ 162,603
Direct expenses (1)
26,496
22,205
170,720
140,398
 
 
Expenses
 
 
Depreciation and amortization
11,587
9,008
General and administrative
82,482
65,062
Earnings from operations
76,651
66,328
Other income (expense)
 
 
Interest expense
(514)
(706)
Interest income
2,346
3,498
Gain on disposition of capital assets
7,310
156
Other income
677
920
Earnings before income taxes
86,470
70,196
 
 
Income taxes
24,144
26,082
 
 
Net earnings (2)
$ 62,326
$ 44,114
 
 
Net earnings per share (2) (3)
$ 0.60
$ 0.42
Net earnings per share - diluted (2) (3)
$ 0.59
$ 0.42
 
 
Diluted weighted average shares outstanding (3)
105,730,812
105,032,169
 
 
 
 
Net earnings in accordance with GAAP
$ 62,326
$ 44,114
Less: after-tax gain on sale of property (2)
(7,295)
-
Adjusted net earnings
$ 55,031
$ 44,114
 
 
Adjusted net earnings per share (3)
$ 0.53
$ 0.42
Adjusted net earnings per share - diluted (3)
$ 0.52
$ 0.42
 
 
(1)Figures have been reclassified to conform with presentation adopted in the current period.
(2)Net earnings for the six months ended June 30, 2008 included total gains of $8,304 ($7,295 after tax) recorded on the sale of excess property. The Company highlighted this amount because it does not consider this gain to be part of the normal course of its operations.
(3) 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.
Consolidated Statements of Earnings (USD thousands, except share and per share amounts)

Three months
ended June 30,
2008
(unaudited)

Three months
ended June 30,
2007
(unaudited)

Gross auction proceeds
$ 1,163,546
$ 945,256
 
 
Auction revenues (1)
$ 115,822
$ 94,054
Direct expenses (1)
16,381
14,640
99,441
79,414
 
 
Expenses
 
 
Depreciation and amortization
5,983
4,783
General and administrative
40,891
34,333
Earnings from operations
52,567
40,298
Other income (expense)
 
 
Interest expense
(144)
(380)
Interest income
1,061
2,191
Gain on disposition of capital assets
7,217
93
Other income
434
568
Earnings before income taxes
61,135
42,770
 
 
Income taxes
15,216
16,215
 
 
Net earnings (2)
$ 45,919
$ 26,555
 
 
Net earnings per share (2) (3)
$ 0.44
$ 0.25
Net earnings per share - diluted (2) (3)
$ 0.43
$ 0.25
 
 
Diluted weighted average shares outstanding (3)
105,772,717
105,213,993
 
 
 
 
Net earnings in accordance with GAAP
$ 45,919
$ 26,555
Less: after-tax gain on sale of property (2)
(7,295)
-
Adjusted net earnings
$ 38,624
$ 26,555
 
 
Adjusted net earnings per share (3)
$ 0.37
$ 0.25
Adjusted net earnings per share - diluted (3)
$ 0.37
$ 0.25
 
 
(1)Figures have been reclassified to conform with presentation adopted in the current period.
(2)Net earnings for the three months ended June 30, 2008 included total gains of $8,304 ($7,295 after tax) recorded on the sale of excess property. The Company highlighted this amount because it does not consider this gain to be part of the normal course of its operations.
(3) 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.
Selected Balance Sheet Data (USD thousands)

June 30, 2008
(unaudited)

December 31, 2007

Current assets
$ 478,097
$ 237,185
Current liabilities
399,306
178,978
Working capital
$ 78,791
$ 58,207
 
 
Total assets
943,601
672,887
Long-term debt
44,509
44,844
Total shareholders' equity
487,685
435,116
Selected Operating Data (unaudited)
Six months
ended June 30,
2008

Six months
ended June 30,
2007

Number of industrial auctions
92
87
Number of agricultural auctions
110
146
Auction revenues as percentage of gross auction proceeds
10.14%
9.88%
Number of consignments at industrial auctions
18,786
17,321
Number of bidders at industrial auctions
139,864
129,112
Number of buyers at industrial auctions
41,248
40,672
Number of permanent auction sites
30
27
Number of regional auction units
8
10
%SEDAR: 00010198E
 
 

 

For more information contact:
Jeremy Black
Director, Business Development
Corporate Secretary
Phone: 778.331.5500
Fax: 604.273.2405
Email: ir@rbauction.com

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