Ritchie Bros. reports fourth quarter and 2020 annual results
VANCOUVER, BC, Feb. 18, 2021 /PRNewswire/ - Ritchie Bros. Auctioneers Incorporated (NYSE: RBA) (TSX: RBA), (the "Company", "Ritchie Bros.", "we", "us", or "our") reported the following results for the fourth quarter and full year ended December 31, 2020.
(All figures are presented in U.S. dollars)
Fourth quarter highlights
Net income attributable to stockholders decreased 5% to $48.9 million, compared to $51.6 million in Q4 2019. Adjusted net income attributable to stockholders*(non-GAAP measures), which excludes $5.2 million of acquisition-related costs ($3.9 million net of tax) related to the acquisition of Rouse Services LLC ("Rouse"), and $1.5 million current income tax expense related to an unfavourable adjustment to reflect final regulations published regarding hybrid financing arrangements, increased 13% to $54.3 million as compared to $48.2 million in Q4 2019. Diluted earnings per share ("EPS") attributable to stockholders decreased 6% to $0.44 per share in Q4 2020 compared to $0.47 per share in Q4 2019. Diluted adjusted EPS attributable to stockholders*(non-GAAP measures) which excludes adjusting items, increased 11% to $0.49 per share at Q4 2020 compared to $0.44 per share in Q4 2019.
Consolidated results:
-- Total revenue in Q4 2020 increased 15% to $383.4 million as compared to
Q4 2019
-- Service revenue in Q4 2020 increased 6% to $231.7 million as
compared to Q4 2019
-- Inventory sales revenue in Q4 2020 increased 33% to $151.8 million
as compared to Q4 2019
-- Total selling, general and administrative expenses ("SG&A") in Q4 2020
increased 13% to $108.3 million as compared to Q4 2019
-- Operating income in Q4 2020 increased 2% to $72.9 million as compared to
Q4 2019
-- Adjusted operating income*(non-GAAP measures) in Q4 2020 increased 16%
to $78.1 million as compared to Q4 2019
-- Net income in Q4 2020 decreased 5% to $48.9 million as compared to Q4
2019
-- Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization*
("EBITDA") (non-GAAP measure) in Q4 2020 increased 12% to $98.5 million
as compared to Q4 2019
-- Cash provided by operating activities was $257.9 million for 2020
Auctions & Marketplaces segment results:
-- GTV(1) in Q4 2020 increased 5% to $1.4 billion as compared to Q4 2019
-- A&M total revenue in Q4 2020 increased 17% to $348.5 million as compared
to Q4 2019
-- Service revenue in Q4 2020 increased 7% to $196.7 million as
compared to Q4 2019
-- Inventory sales revenue in Q4 2020 increased 33% to $151.8 million
as compared to Q4 2019
Other Services segment results:
-- Other Services total revenue in Q4 2020 increased 2% to $35.0 million as
compared to Q4 2019
-- RBFS revenue in Q4 2020 increased 10% to $9.1 million as compared to Q4
2019
Other Company development
-- On December 8, 2020, the Company acquired Rouse, a privately held
company that provides data intelligence and performance benchmarking
solutions for a fair value of approximately $275 million
_____________________
(1) Gross Transaction Value ("GTV") represents total
proceeds from all items sold at the Company's live on site
auctions and online marketplaces. GTV is not a measure of
financial performance, liquidity, or revenue, and is not
presented in the Company's consolidated financial
statements.
The Company presents both GAAP and non-GAAP measures to
provide investors with additional information. Providing
these non-GAAP measures along with GAAP measures allows
for increased comparability of our ongoing performance from
period to period. Non-GAAP financial measures referred to
in this news release are labeled as "non-GAAP measure" or
designated as such with an asterisk (*). Please see page 9-
11 for explanations of why the Company uses these non-GAAP
measures and the reconciliation to the most comparable GAAP
financial measures.
Full year highlights
Net income attributable to stockholders for 2020 increased 14% to $170.1 million compared to $149.0 million in 2019. Adjusted net income attributable to stockholders* (non-GAAP measure), which excludes $7.8 million income tax expense related to an unfavourable adjustment to reflect final regulations published regarding hybrid financing arrangements, $5.2 million of acquisition-related costs ($3.9 million net of tax) related to the acquisition of Rouse, and $4.3 million ($3.2 million net of tax) of severance costs, increased 27% to $185.0 million in 2020 as compared to $145.6 million in 2019. Diluted earnings per share ("EPS") attributable to stockholders increased 13% to $1.54 from $1.36 per share. Diluted adjusted EPS attributable to stockholders* (non-GAAP measure), which excludes adjusting items, increased 26% to $1.68 per share in 2020 as compared to $1.33 per share in 2019.
Consolidated results:
-- Total revenue increased 4% to $1.4 billion as compared to 2019
-- Service revenue increased 8% to $871.6 million as compared to 2019
-- Inventory sales revenue decreased 2% to $505.7 million as compared
to 2019
-- Total SG&A increased 9% to $417.5 million in 2020 as compared to 2019
-- Operating income increased 18% to $263.2 million as compared to 2019
-- Net income increased 14% to $170.4 million as compared to 2019
-- Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization*
("EBITDA")(non-GAAP measure) increased 20% to $353.5 million as compared
to 2019
-- Cash provided by operating activities was $257.9 million for the year
ended December 31, 2020
Auctions & Marketplaces segment results:
-- GTV increased 5% to $5.4 billion compared to 2019
-- A&M total revenue increased 4% to $1.2 billion as compared to 2019
-- Service revenue increased 9% to $740.0 million as compared to 2019
-- Inventory sales revenue decreased 2% to $505.7 million as compared
to 2019
Other Services segment results:
-- Other Services total revenue increased 5% to $131.6 million as compared
to 2019
-- RBFS revenue increased 12% to $32.2 million as compared to 2019
"We delivered a solid fourth quarter with a 5% increase in GTV contributing to an 18% growth in operating income for the full year."
"2020 was an unprecedented year as the COVID-19 pandemic had a devastating impact on public health while creating global economic uncertainty. I am proud of the technology driven innovations our teams implemented to help customers leverage our Omni-channel platform while keeping our health protocols a top priority," said Ann Fandozzi, CEO of Ritchie Bros.
Fandozzi concluded "Uncertainty in the fourth quarter, driven by new COVID shut-downs and turbulent US election, resulted in consigners taking a wait and see approach. We continue to focus on things that drive long term value: innovating and leveraging technology to enhance customer experience, optimizing operating cost and driving execution against our strategic pillars."
Financial Overview
(Unaudited)
(in U.S. $000's, except EPS and percentages)
Three months ended December 31,
Year ended December 31,
--- ---
% Change % Change
2020 2019 2020 over 2020 2019 2020 over
2019 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 45 54 (17) 168 194 (13)
auctions % %
Bidder 279,950 223,800 25 957,050 732,550 31
registrations % %
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
%
Please refer to page 12 for
a summary of adjusting
items for the three months
and year ended December 31,
(1) 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.
View original content:http://www.prnewswire.com/news-releases/ritchie-bros-reports-fourth-quarter-and-2020-annual-results-301231306.html
SOURCE Ritchie Bros. Auctioneers
