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Ritchie Bros. reports second quarter 2021 results

08/05/2021

VANCOUVER, BC, Aug. 5, 2021 /CNW/ - Ritchie Bros. Auctioneers Incorporated (NYSE: RBA) (TSX: RBA) (the "Company", "Ritchie Bros.", "we", "us", or "our") reported the following results for the three months ended June 30, 2021.

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

Net income attributable to stockholders increased 15% to $60.7 million, compared to $53.0 million in Q2 2020. Diluted earnings per share ("EPS") attributable to stockholders increased 12% to $0.55 per share in Q2 2021 compared to $0.49 per share in Q2 2020. Diluted adjusted EPS attributable to stockholders* increased 2% to $0.55 per share in Q2 2021 compared to $0.54 per share in Q2 2020.

"We grew our total service revenue by 8% in the quarter despite an unfavorable, albeit temporary, used equipment supply environment." said Ann Fandozzi, CEO of Ritchie Bros.

Fandozzi concluded " We continue to focus on our long-term strategy of providing insights, services, and transaction solutions to our customers. We are testing and learning more how to service our customers digitally, with Business Inventory Management System "IMS" activations increasing 34% sequentially compared to last quarter."

For the second quarter of 2021 as compared to the second quarter of 2020:

Consolidated results:

  • Total revenue in Q2 2021 increased 2% to $396.4 million
    • Service revenue in Q2 2021 increased 8% to $252.7 million
    • Inventory sales revenue in Q2 2021 decreased 7% to $143.6 million
  • Total selling, general and administrative expenses ("SG&A") in Q2 2021 increased 11% to $111.8 million
  • Operating income in Q2 2021 increased 1% to $89.5 million
  • Net income in Q2 2021 increased 14% to $60.8 million
  • Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization* ("EBITDA") (non-GAAP measure) in Q2 2021 increased 5% to $112.3 million
  • Cash provided by operating activities was $211.4 million for the first half of 2021

Auctions & Marketplaces segment results:

  • GTV1 in Q2 2021 increased 2% to $1.5 billion and decreased 3% when excluding the impact of foreign exchange
  • A&M total revenue in Q2 2021 remained flat at $355.1 million
    • Service revenue in Q2 2021 increased 6% to $211.5 million
    • Inventory sales revenue in Q2 2021 decreased 7% to $143.6 million

Other Services segment results:

  • Other Services total revenue in Q2 2021 increased 20% to $41.3 million
    • RBFS revenue in Q2 2021 increased 39% to $11.8 million
    • Rouse revenue of $6.2 million was recognized in Q2 2021, which was its second full quarter since its acquisition on December 8, 2020
  • Total number of organizations activated on our IMS increased by 34%

Other Company development:

  • Increased quarterly cash dividend by 14% to $0.25 per share

1 Gross Transaction Value ("GTV") represents total proceeds from all items sold at the Company's 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 9-10 for explanations of why the Company uses these non-GAAP measures and the reconciliation to the most comparable GAAP financial measures.

Financial Overview
(Unaudited)



















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


Three months ended June 30, 


Six months ended June 30, 








% Change








% Change


2021


2020


2021 over
2020


2021


2020


2021 over
2020

Service revenue:


















Commissions

$

129,334


$

125,465


3

%


$

233,309


$

218,950


7

%

Fees


123,414



108,674


14

%



225,469



198,312


14

%

Total service revenue


252,748



234,139


8

%



458,778



417,262


10

%

Inventory sales revenue


143,613



154,911


(7)

%



269,138



245,043


10

%

Total revenue


396,361



389,050


2

%



727,916



662,305


10

%

Costs of services


39,042



39,448


(1)

%



75,069



78,803


(5)

%

Cost of inventory sold


131,023



143,134


(8)

%



241,770



224,719


8

%

Selling, general and administrative expenses


111,819



100,632


11

%



227,897



199,017


15

%

Operating expenses


306,844



300,250


2

%



593,897



539,423


10

%

Operating income


89,517



88,800


1

%



134,019



122,882


9

%

Operating income as a % of total revenue


22.6

%


22.8

%

(20)

bps



18.4

%


18.6

%

(20)

bps

Net income attributable to stockholders


60,749



53,043


15

%



88,937



75,851


17

%

Adjusted net income attributable to stockholders*


60,749



59,271


2

%



88,937



82,079


8

%

Diluted EPS attributable to stockholders

$

0.55


$

0.49


12

%


$

0.80


$

0.69


16

%

Diluted adjusted EPS attributable to stockholders*

$

0.55


$

0.54


2

%


$

0.80


$

0.75


7

%

Effective tax rate


25.7

%


34.2

%

(850)

bps



24.9

%


30.5

%

(560)

bps

Total GTV


1,527,642



1,493,982


2

%



2,802,182



2,641,006


6

%

Service GTV


1,384,029



1,339,071


3

%



2,533,044



2,395,963


6

%

Service revenue as a % of total GTV - Rate


16.5

%


15.7

%

80

bps



16.4

%


15.8

%

60

bps

Inventory GTV


143,613



154,911


(7)

%



269,138



245,043


10

%

Service revenue as a % of total revenue


63.8

%


60.2

%

360

bps



63.0

%


63.0

%

bps

Inventory sales revenue as a % of total revenue


36.2

%


39.8

%

(360)

bps



37.0

%


37.0

%

bps

Cost of inventory sold as a % of operating expenses


42.7

%


47.7

%

(500)

bps



40.7

%


41.7

%

(100)

bps

Service GTV as a % of total GTV - Mix


90.6

%


89.6

%

100

bps



90.4

%


90.7

%

(30)

bps

Inventory sales revenue as a % of total GTV - Mix


9.4

%


10.4

%

(100)

bps



9.6

%


9.3

%

30

bps

Segment Overview

















(in U.S $000's)

Three months ended June 30, 2021


Six months ended June 30, 2021


A&M


Other


Consolidated


A&M


Other


Consolidated

Service revenue

$

211,475


41,273


$

252,748


$

382,230


76,548


$

458,778

Inventory sales revenue


143,613




143,613



269,138




269,138

Total revenue


355,088


41,273



396,361



651,368


76,548



727,916

Ancillary and logistical service expenses



14,819



14,819




27,088



27,088

Other costs of services


21,985


2,238



24,223



43,575


4,406



47,981

Cost of inventory sold


131,023




131,023



241,770




241,770

SG&A expenses


101,417


10,402



111,819



205,762


22,135



227,897

Segment profit

$

100,663


13,814


$

114,477


$

160,261


22,919


$

183,180

Total GTV


1,527,642


N/A



N/A



2,802,182


N/A



N/A

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


13.8

%

N/A



N/A



13.6

%

N/A



N/A

 



















(in U.S $000's)

Three months ended June 30, 2020


Six months ended June 30, 2020


A&M


Other


Consolidated


A&M


Other


Consolidated

Service revenue

$

199,648


$

34,491


$

234,139


$

354,391


$

62,871


$

417,262

Inventory sales revenue


154,911





154,911



245,043





245,043

Total revenue


354,559



34,491



389,050



599,434



62,871



662,305

Ancillary and logistical service expenses




16,060



16,060





28,818



28,818

Other costs of services


22,190



1,198



23,388



47,285



2,700



49,985

Cost of inventory sold


143,134





143,134



224,719





224,719

SG&A expenses


94,559



6,073



100,632



186,144



12,873



199,017

Segment profit

$

94,676


$

11,160


$

105,836



141,286



18,480



159,766

Total GTV


1,493,982



N/A



N/A



2,641,006



N/A



N/A

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


13.4

%


N/A



N/A



13.4

%


N/A



N/A

Q2 2021 Consolidated Performance Overview

In response to the COVID-19 pandemic, 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. 

Total GTV increased 2% to $1.5 billion and decreased 3% when excluding the impact of foreign exchange in Q2 2021. GTV volumes grew primarily in International and Canada, offset by lower volume in the US. All regions continued to experience very strong mix adjusted auction price performance due to high demand for used equipment, in part aided by our digital marketing efforts. However, despite higher mix adjusted pricing, we experienced headwinds due to negative mix impacts driven in part by older aged equipment in the transportation and construction sectors. This combined with auction calendar shifts of $52 million from the impact of the COVID-19 pandemic that were shifted from Q1 into Q2 2020 that did not repeat in Q2 2021 led to lower GTV. Total GTV increased in International driven by an improved economic climate, the benefit from the use of new satellite yards in France, Germany and Australia coupled with a favourable foreign exchange impact, partially offset by the auction shift of Caorso, Italy. Total GTV also increased in Canada which benefited from a favourable foreign exchange impact, higher performance at our Toronto auction, an increased volume from RBFS providing escrow services for private brokered transactions, offset by lower overall volumes in Edmonton and Grand Prairie as well as the shift of our Montreal auction. Total GTV volumes decreased in the US due to the shift of our Los Angeles auction, lower activity due to supply constraints mainly in our Fort Worth auction and Denver regional combined events and the non-repeat of a large supply contract. In addition, lower volumes in our US strategic accounts in the finance, original equipment manufacturer ("OEM") and transportation sectors also contributed to lower GTV, partially offset by positive online performance.

Total revenue increased 2% to $396.4 million in Q2 2021, with total service revenue increasing by 8%, offset by a decrease in  inventory sales revenue by 7%.

Service revenue increased 8% with fees revenue increasing 14% and commissions revenue increasing 3%. Fee revenue was up 14% mainly due to fee revenue from the acquisition of Rouse, and the continued growth in RBFS fee revenue. Fees revenue also increased due to the revised global buyer fee structure implemented on May 1, 2021 and the re-instatement of fees at the Canadian on-the-farm auctions which were waived in Q2 as part of our COVID-19 pandemic response. These increases were partially offset by lower ancillary revenue mainly due to lower fees earned on refurbishment, transportation and redeployment of assets in the US. Commissions revenue was up 3%, in line with the higher service GTV of 3%.

Inventory sales revenue decreased 7% representing a lower mix of volumes of inventory contracts, partially offset by higher pricing, primarily in the US and Canada. These decreases were partially offset by strong year-over-year performance in our International region primarily driven by increased sales in Australia, and in the Middle East benefiting from overall improved economic conditions from the recovery of the COVID-19 pandemic. In addition, we saw increased volumes sold through our GovPlanet business as a result of the new non-rolling and rolling stock contracts effective June 1, 2021 and higher volumes due to the government shutdowns in prior year in response to the COVID-19 pandemic.

Costs of services decreased 1% to $39.0 million. This decrease was primarily driven by lower activity in line with lower GTV in the US, lower ancillary and logistical service expenses, in line with the decrease in ancillary fees earned on refurbishment, transportation and redeployment of assets in the US. These decreases were partially offset by higher costs incurred to support the increased activity in our GovPlanet business, incremental costs to introduce the new satellite yards in Europe and the second full quarter of costs of services incurred from Rouse since acquisition.

Cost of inventory decreased 8% to $131.0 million, primarily in line with lower inventory sales revenue. Cost of inventory sold decreased at a higher rate than the decrease of inventory sales revenue, indicating a slight increase in the revenue rates primarily in our GovPlanet business and US region, partially offset by the International region.

Selling, general and administrative ("SG&A") expenses increased 11% to $111.8 million primarily due to an unfavourable impact of foreign exchange fluctuation, higher wages, salaries and benefit expenses driven by higher headcount to support our growth initiatives and a second full quarter of costs incurred from Rouse since acquisition. We also incurred higher travel, advertising and promotion expenses to promote our global digital marketing efforts, and increased travel activity due to the lifting of  border and quarantine restrictions. These increases were partially offset by lower short-term and long-term incentive costs including the non-repeat of a prior year one-time incentive accrual to employees during the COVID-19 pandemic.

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 Australian dollar, Canadian dollar, and the Euro exchange rates relative to the U.S. dollar.

Net income attributable to stockholders increased 15% to $60.7 million primarily related to the decrease in effective tax rate following a $6.2 million income tax expense recognized in Q2 2020 relating to an unfavourable adjustment to reflect final regulations published regarding hybrid financing arrangements, and slightly higher operating income. Adjusted net income attributed to stockholders* increased 2% to $60.7 million in Q2 2021 compared to $59.3 million in Q2 2020.

Primarily for the same reasons noted above, diluted EPS attributable to stockholders increased 12% to $0.55 per share for Q2 2021 from $0.49 per share in Q2 2020. Diluted adjusted EPS attributable to stockholders* increased 2% to $0.55 per share in Q2 2021.

Dividend Information

Quarterly dividend
On August 4, 2021, the Company declared a quarterly cash dividend of $0.25 per common share payable on September 15, 2021 to shareholders of record on August 25, 2021.

Q2 2021 Earnings Conference Call
Ritchie Bros. is hosting a conference call to discuss its financial results for the quarter ended June 30, 2021 at 8am Pacific time / 11 am Eastern time / 4pm GMT on August 6, 2021. The replay of the webcast will be available through September 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, and growth and value prospects and payment of dividends. 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 and the Company's Form 10-Q for the quarter ended June 30, 2021, 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 – Second 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 June 30, 


Six months ended June 30, 






% Change






% Change



2021


2020

2021 over 2020



2021


2020

2020 over 2019

GTV

$

1,527,642

$

1,493,982

2

%


$

2,802,182

$

2,641,006

6

%

Revenues:














Service revenues

$

252,748

$

234,139

8

%


$

458,778

$

417,262

10

%

Inventory sales revenue


143,613


154,911

(7)

%



269,138


245,043

10

%

Total revenues


396,361


389,050

2

%



727,916


662,305

10

%

Operating expenses:














Costs of services


39,042


39,448

(1)

%



75,069


78,803

(5)

%

Cost of inventory sold


131,023


143,134

(8)

%



241,770


224,719

8

%

Selling, general and administration expenses


111,819


100,632

11

%



227,897


199,017

15

%

Acquisition-related costs


3,049


100

%



5,971


100

%

Depreciation and amortization expenses


21,935


17,857

23

%



43,005


37,150

16

%

Gain on disposition of property, plant and equipment


(175)


(1,213)

(86)

%



(243)


(1,260)

(81)

%

Foreign exchange (gain) loss


151


392

(61)

%



428


994

(57)

%

Total operating expenses


306,844


300,250

2

%



593,897


539,423

10

%

Operating income


89,517


88,800

1

%



134,019


122,882

9

%

Interest expense


(8,867)


(8,882)

(0)

%



(17,813)


(18,064)

(1)

%

Other income, net


1,196


857

40

%



2,198


4,434

(50)

%

Income before income taxes


81,846


80,775

1

%



118,404


109,252

8

%

Income tax expense


21,065


27,656

(24)

%



29,484


33,304

(11)

%

Net income

$

60,781

$

53,119

14

%


$

88,920

$

75,948

17

%

Net income attributable to:














Stockholders

$

60,749

$

53,043

15

%


$

88,937

$

75,851

17

%

Non-controlling interests


32


76

(58)

%



(17)


97

(118)

%


$

60,781

$

53,119

14

%


$

88,920

$

75,948

17

%

Earnings per share attributable to stockholders:














Basic

$

0.55

$

0.49

12

%


$

0.81

$

0.70

16

%

Diluted

$

0.55

$

0.49

12

%


$

0.80

$

0.69

16

%

Weighted average number of share outstanding:














Basic


110,311,615


108,387,490

2

%



110,144,229


108,818,903

1

%

Diluted


111,334,184


109,323,343

2

%



111,302,711


109,903,808

1

%

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







June 30, 2021

December 31, 2020






Assets





Cash and cash equivalents

$

301,757

$

278,766

Restricted cash


140,966


28,129

Trade and other receivables


271,980


135,001

Less: allowance for credit losses


(5,348)


(5,467)

Inventory


85,930


86,278

Other current assets


27,776


27,274

Income taxes receivable


10,524


6,797

Total current assets


833,585


556,778






Property, plant and equipment


482,732


492,127

Other non-current assets


146,890


147,608

Intangible assets


292,444


300,948

Goodwill


838,798


840,610

Deferred tax assets


12,534


13,458

Total assets

$

2,606,983

$

2,351,529






Liabilities and Equity





Auction proceeds payable

$

445,090

$

214,254

Trade and other payables


221,738


243,786

Income taxes payable


4,240


17,032

Short-term debt


35,213


29,145

Current portion of long-term debt


10,657


10,360

Total current liabilities


716,938


514,577






Long-term debt


625,832


626,288

Other non-current liabilities


156,636


153,000

Deferred tax liabilities


46,150


45,265

Total liabilities


1,545,556


1,339,130






Commitments and Contingencies





Stockholders' equity:





Share capital:





Common stock; no par value, unlimited shares





authorized, issued and outstanding shares:





110,366,808 (December 31, 2020: 109,876,428)


215,666


200,451

Additional paid-in capital


51,800


49,171

Retained earnings


832,037


791,918

Accumulated other comprehensive loss


(43,173)


(34,295)

Stockholders' equity


1,056,330


1,007,245

Non-controlling interest


5,097


5,154

Total stockholders' equity


1,061,427


1,012,399

Total liabilities and equity

$

2,606,983

$

2,351,529


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






Six months ended June 30,

2021

2020

Cash provided by (used in):





Operating activities:





Net income

$

88,920

$

75,948

Adjustments for items not affecting cash:





Depreciation and amortization expenses


43,005


37,150

Stock-based compensation expense


16,183


7,747

Deferred income tax expense


1,719


6,657

Unrealized foreign exchange loss


(65)


1,129

Gain on disposition of property, plant and equipment


(243)


(1,260)

Amortization of debt issuance costs


1,443


1,577

Amortization of right-of-use assets


6,280


6,318

Gain on contingent consideration from equity investment



(1,700)

Other, net


1,568


1,934

Net changes in operating assets and liabilities


52,577


62,824

Net cash provided by operating activities


211,387


198,324

Investing activities:





Acquisition of Rouse, net of cash acquired


728


Property, plant and equipment additions


(4,616)


(6,140)

Proceeds on disposition of property, plant and equipment


342


16,106

Intangible asset additions


(17,361)


(13,244)

Issuance of loans receivable


(2,622)


(2,985)

Repayment of loans receivable


226


203

Distribution from equity investment



4,212

Proceeds on contingent consideration from equity investment



1,700

Net cash used in investing activities


(23,303)


(148)

Financing activities:





Share repurchase



(53,170)

Dividends paid to stockholders


(48,537)


(43,586)

Dividends paid to non-controlling interests


(26)


Proceeds from exercise of options and share option plans


10,699


19,425

Payment of withholding taxes on issuance of shares


(9,155)


(3,321)

Net increase (decrease) in short-term debt


6,842


15,858

Repayment of long-term debt


(5,328)


(8,633)

Repayment of finance lease obligations


(5,355)


(4,384)

Net cash used in financing activities


(50,860)


(77,811)

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


(1,396)


(2,608)

Increase


135,828


117,757

Beginning of period


306,895


420,256

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

$

442,723

$

538,013

Selected Data
(Unaudited)

Total auction metrics












Three months ended June 30, 


Six months ended June 30, 




% Change




% Change


2021

2020

2021 over 2020


2021

2020

2021 over 2020

Number of auction sales days

240

226

6

%


333

313

6

%

Bids per lot sold *

27

25

9

%


28

23

19

%

Total lots sold *

148,206

148,957

(1)

%


263,035

249,754

5

%

* Management reviews industrial equipment auction metrics excluding GovPlanet; as a result GovPlanet business metrics are excluded from these metrics

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 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 June 30, 


Six months ended June 30, 






% Change






% Change


2021

2020

2021 over 2020


2021

2020

2021 over 2020

Net income attributable to stockholders

$

60,749

$

53,043

15

%


$

88,937

$

75,851

17

%

Current income tax adjusting item:














Change in uncertain tax provision



766

(100)

%




766

(100)

%

Deferred tax adjusting item:














Change in uncertain tax provision



5,462

(100)

%




5,462

(100)

%

Adjusted net income attributable to stockholders*

$

60,749

$

59,271

2

%


$

88,937

$

82,079

8

%

Weighted average number of dilutive shares outstanding


111,334,184


109,323,343

2

%



111,302,711


109,903,808

1

%










0





Diluted earnings per share attributable to stockholders

$

0.55

$

0.49

12

%


$

0.80

$

0.69

16

%

Diluted adjusted EPS attributable to Stockholders*

$

0.55

$

0.54

2

%


$

0.80

$

0.75

7

%

(1)

Please refer to page 10 for a summary of adjusting items for the three and six months ended June 30, 2021 and June 30, 2020.

(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 June 30, 



Six months ended June 30, 







% Change






% Change


2021

2020

2021 over 2020


2021

2020

2021 over 2020

Net income

$

60,781

$

53,119

14

%


$

88,920

$

75,948

17

%

Add: depreciation and amortization expenses


21,935


17,857

23

%



43,005


37,150

16

%

Add: interest expense


8,867


8,882

(0)

%



17,813


18,064

(1)

%

Less: interest income


(332)


(393)

(16)

%



(634)


(1,063)

(40)

%

Add: income tax expense


21,065


27,656

(24)

%



29,484


33,304

(11)

%

Adjusted EBITDA*

$

112,316

$

107,121

5

%


$

178,588

$

163,403

9

%

(1)

Please refer to page 10 for a summary of adjusting items for the three and six months ended June 30, 2021 and June 30, 2020.

(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 during the trailing 12-months ended June 30, 2021 were:

Recognized in the second quarter of 2021

  • There were no adjustment items recognized in the second quarter of 2021.

Recognized in the first quarter of 2021

  • There were no adjustment items recognized in the first quarter of 2021.

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.

Adjusting items during the trailing 12-months ended June 30, 2020 were:

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.

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.

Cision View original content:https://www.prnewswire.com/news-releases/ritchie-bros-reports-second-quarter-2021-results-301349688.html

SOURCE Ritchie Bros. Auctioneers

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