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Ritchie Bros. reports fourth quarter and 2020 annual results

02/18/2021

VANCOUVER, BC, Feb. 18, 2021 /CNW/ - 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:

  • GTV1in 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 dividend
On 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 Call
Ritchie 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 Statements
This 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* Reconciliation
The 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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