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VANCOUVER,
BRITISH COLUMBIA -- Ritchie Bros. Auctioneers Incorporated
(NYSE:RBA) announces its financial results for the nine-month
and three-month periods ended September 30, 1998. All amounts
are stated in US Dollars.
Gross
auction sales were $750.5 million for the nine months ended
September 30, 1998, generating auction revenues of $64.3
million, compared to Gross Auction Proceeds of $640.1 million
and auction revenues of $59.9 million for the nine months
ended September 30, 1997, increases of 17% and 7% respectively.
Net income after tax for the first nine months of 1998 was
$13.9 million, or $0.87 per diluted weighted average share.
David E. Ritchie, Chairman and CEO of the Company states,
"Our 1998 results are very encouraging. We have been able
to take advantage of the current economic climate and grow
our Gross Auction Proceeds even faster than we had expected."
As
a percentage of Gross Auction Proceeds, auction revenues during
the nine months ended September 30, 1998 were 8.57%, lower
than the unusually high rate of 9.35% experienced during
the comparable 1997 period but only slightly below RBA's
longer-term average of approximately 8.80%.
For
the quarter ended September 30, 1998, Gross Auction Proceeds
were $183.6 million, generating auction revenues of $13.9
million, compared to Gross Auction Proceeds of $163.5 million
and auction revenues of $15.6 million for the quarter ended
September 30, 1997. Net income after tax for the quarter
ended September 30, 1998, excluding the impact of non-recurring
gains, was $0.8 million, or $0.05 per diluted weighted average
share. Including the non-recurring gains, net income after
tax for the quarter was $2.0 million, or $0.12 per diluted
weighted average share.
Gross
auction sales represent the aggregate selling prices of
all items sold at auction; auction revenues consist principally
of commissions earned and net profit on the sale of equipment
purchased and sold by RBA as principal. Net income after
tax and earnings per share for the 1997 periods are not
meaningful as comparative numbers because the 1997 periods
preceded the corporate reorganization that took place at
the end of 1997 and pre-reorganization expenses and income
taxes are not indicative of post-reorganization expenses
and income taxes.
Russell
Cmolik, President and COO of the Company notes several significant
events that took place during the quarter: "During the third
quarter, our team in Olympia, Washington held their largest
sale to date, grossing over $21 million. Five years ago
it took us 3 or 4 sales to generate that volume in Olympia.
In addition, we purchased the land necessary to develop
a permanent auction site in Morris, Illinois, just outside
of Chicago, which will enable us to expand our presence
in the Midwest. We also celebrated the grand opening of
our new auction facility in Toronto, Ontario. The new site
is 4 times larger than our old Toronto site and the new
state-of-the-art auction building enables us to deliver
the highest possible level of customer service. We are currently
building similar facilities in Australia, The Netherlands,
California and Illinois."
Ritchie
Bros. is the world's leading auctioneer of industrial equipment,
operating through over 50 locations, including 14 permanent
auction sites and 8 regional auction units, in 14 countries
in North America, Europe, Asia, Australia and the Middle
East. The Company sells, through unreserved public auctions,
a broad range of used industrial equipment including equipment
utilized in the construction, transportation, mining, forestry,
petroleum and agricultural industries.
Safe
Harbor Statement under the Private Securities Litigation
Reform Act of 1995: The discussion in this press release
relating to future operating periods contains forward-looking
statements (as defined in Section 21E of the Securities
Exchange Act of 1934, as amended) that involve risks and
uncertainties, including, in particular, statements regarding
anticipated results for the remainder of 1998 and future
years and the implementation of the Company's growth strategy.
These risks and uncertainties include: the many factors
that impact on the supply of and demand for used equipment;
fluctuations in the market values of used equipment; periodic
and seasonal variations in operating results; potential
delays in construction or development of auction sites;
actions of competitors; and other risks and uncertainties
as detailed from time to time in the Company's SEC reports,
including the Prospectus dated March 9, 1998. Actual results
may differ materially. The Company does not undertake any
obligation to update the information contained herein, which
speaks only as of this date.
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Consolidated
Statements of Income (USD thousands)
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9
mos ended
|
9
mos ended
|
|
|
30/9/98
|
30/9/97
(1)
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Gross
auction sales
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$
750,489
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$
640,070
|
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Auction
revenues
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$
64,286
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$
59,864
|
|
Direct
expenses
|
11,029
|
11,471
|
|
|
53,257
|
48,393
|
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Expenses
|
|
|
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Depreciation
|
1,969
|
1,838
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General
and administrative
|
30,257
|
25,439
|
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Employee
equity participation
|
-
|
7,733
(2)
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Income
from operations
|
21,031
|
13,383
|
|
Other
income (expenses)
|
|
|
|
Interest
expense
|
(1,288)
|
(1,329)
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Other
income (3)
|
2,651
|
514
|
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Income
before income taxes
|
22,394
|
12,568
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Income
taxes
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8,521
|
4,853
(4)
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Net
income
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$
13,873
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$
7,715
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Net
income per share
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$
0.88
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(5)
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Net
income per share - diluted
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$
0.87
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|
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Net
income excluding non-recurring gains (3)
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$
12,673
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|
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Net
income per share excluding non-recurring gains
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$
0.81
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|
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Net
income per share excluding non-recurring gains - diluted
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$
0.80
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|
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Weighted
average shares outstanding
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15,705,754
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|
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Diluted
weighted average shares outstanding
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15,900,758
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Consolidated
Statements of Income (USD thousands)
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3
mos ended
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3
mos ended
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|
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30/9/98
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30/9/97
(1)
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Gross
auction sales
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$
183,633
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$
163,455
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Auction
revenues
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$
13,869
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$
15,629
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Direct
expenses
|
2,566
|
3,481
|
|
|
11,303
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12,148
|
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Expenses
|
|
|
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Depreciation
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713
|
678
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General
and administrative
|
9,382
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9,814
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Employee
equity participation
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|
7,733
(2)
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Income
(loss) from operations
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1,208
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(6,077)
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|
Other
income (expenses)
|
|
|
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Interest
expense
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(117)
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(659)
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Other
income (3)
|
2,074
|
279
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Income
(loss) before income taxes
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3,165
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(6,457)
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Income
taxes
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1,161
|
3,543
(4)
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Net
income (loss)
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$
2,004
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$
(10,000)
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|
Net
income per share
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$
0.12
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(5)
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Net
income per share - diluted
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$
0.12
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|
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Net
income excluding non-recurring gains (3)
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$
804
|
|
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Net
income per share excluding non-recurring gains
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$
0.05
|
|
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Net
income per share excluding non-recurring gains - diluted
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$
0.05
|
|
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Weighted
average shares outstanding
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16,548,666
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|
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Diluted
weighted average shares outstanding
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16,756,391
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Notes:
- Effective December 31,
1997, the Company changed its year-end from April 30 to
December 31. Statement of Income data for the periods
ended September 30, 1997 is based on management estimates.
- During the quarter ended
September 30, 1997, the Company incurred an expense of
$7.7 million related to a pre-IPO equity participation
program that enabled employees to purchase equity in the
Company.
- Other income includes $1.8
million ($1.2 million after tax) of non-recurring income,
primarily a gain on sale of a permanent auction site that
has been replaced by a new facility.
- Income taxes for the 1997
period should not be construed as indicative of future
income tax expense, as discussed in the Company's prospectus
dated March 9, 1998.
- Income per share numbers
for the 1997 periods are not meaningful as comparative
numbers.
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Selected
Balance Sheet Data (USD thousands)
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30/9/98
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31/12/97
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Working
capital
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$
45,074
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$
3,322
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Total
assets
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178,800
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70,460
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Total
liabilities
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85,686
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44,754
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Total
shareholders' equity
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93,114
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25,706
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Selected
Operating Data
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30/9/98
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31/12/97
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Number
of auctions (9 mos)
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72
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77
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Auction
revenues as percentage of Gross Auction Proceeds (9 mos)
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8.57%
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9.35%
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Number
of consignors (9 mos)
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10,338
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9,798
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Number
of buyers (9 mos)
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24,340
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23,720
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Number
of permanent auction sites
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13
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13
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Number
of regional auction units
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8
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8
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- 30 -
For
further information, please contact:
Bob Armstrong
Manager, Finance & Corporate Relations
Phone: 604 273 2101
Fax: 604 273 2405
Email: barmstrong@rbauction.com
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