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VANCOUVER, BRITISH COLUMBIA -- Ritchie
Bros. Auctioneers Incorporated (NYSE:RBA) announces its
financial results for the year and quarter ended December
31, 1998. All amounts are stated in US Dollars.
Gross Auction Proceeds were $1.088 billion
for the year ended December 31, 1998, marking the first
time in the Company's history that annual gross auction
sales have exceeded $1 billion, and representing a 15% increase
over 1997 Gross Auction Proceeds. Auction revenues in 1998
were $94.9 million, an increase of 12% over 1997. Net income
after tax for 1998 was $24.8 million, or $1.54 per diluted
weighted average share. David E. Ritchie, Chairman and CEO
of the Company states, "We are very pleased with the results
for our first year as a public company. Our 1998 results
have exceeded our expectations thanks to the hard work of
every member of the Ritchie Bros. team."
As a percentage of Gross Auction Proceeds,
auction revenues during 1998 were 8.72%, slightly lower
than both the 8.98% rate experienced during 1997 period
and RBA's long-term average of approximately 8.85%.
For the quarter ended December 31, 1998,
Gross Auction Proceeds were $337.3 million, generating auction
revenues of $30.6 million, compared to Gross Auction Proceeds
of $306.3 million and auction revenues of $25.1 million
for the quarter ended December 31, 1997. The auction revenue
rate of 9.08% experienced during the fourth quarter of 1998
was significantly higher than the 8.21% rate experienced
during the fourth quarter of 1997. Net income after tax
for the quarter ended December 31, 1998 was $11.0 million,
or $0.65 per diluted weighted average share.
The fourth quarter of 1998 included the
largest sale in the Company's 35-year history. On November
18, 19 & 20, in Rotterdam, 1,328 bidders from 58 countries
purchased $59 million worth of equipment. The next week,
in Dubai, UAE, the Company held its largest ever Middle
Eastern auction. Gross Auction Proceeds exceeded $34 million
over the three-day auction.
Gross Auction Proceeds 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 commented on the status of the Company's capital
expenditure program: "Our Brisbane, Australia site is nearing
completion and we will be holding our first auction at the
new site on April 20. Work continues on our new Rotterdam
site in the port of Moerdijk and, while the yard is ready
for our auction on March 17&18, some of the facilities
will be completed later in the spring. Our new sites in
Morris, Illinois (southwest of Chicago) and Perris, California
(east of Los Angeles) are currently being developed and
the auction facilities are scheduled to be completed by
the fourth quarter of 1999. The addition of these four sites
to our network will increase our compliment of permanent
auction sites to 17."
During 1998, the company opened a sales
office in Singapore to better service its Asian customers.
The Company now has offices in 14 countries.
On February 22, Ritchie Bros. announced
that it had reached an agreement to acquire the auction
business of Forke Auctioneers, Inc., a major auctioneer
of industrial equipment headquartered in Lincoln, Nebraska.
The Forke acquisition is expected to close in March or April
1999, subject to regulatory clearance and other customary
conditions. Forke has been conducting industrial auctions
since 1921 and pioneered the industrial auction business
in the United States. Terms of the agreement were not disclosed.
Because of the pending Forke acquisition
and the Company's stated goal of using its cash flow to
grow the auction business, the Company's board of directors
has decided not to declare a dividend at this time.
Ritchie Bros. is the world's leading auctioneer
of industrial equipment, operating through over 50 locations,
including 13 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.
Ritchie Bros. maintains a website at www.rbauction.com.
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 future periods
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; the possibility that the Forke acquisition
will not be completed; 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.
| Consolidated Statements
of Income (USD thousands) year ended year ended |
31/12/98
|
31/12/97(1)
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| |
|
|
|
Gross Auction Proceeds
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$ 1,087,800
|
$ 946,415
|
|
|
|
|
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Auction revenues
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$ 94,899
|
$ 85,009
|
|
Direct expenses
|
$ 16,010
|
$ 17,351
|
|
|
$ 78,889
|
$ 67,658
|
|
|
|
|
|
Expenses
|
|
|
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Depreciation
|
2,752
|
2,548
|
|
General and administrative
|
39,315
|
37,724 (2)
|
|
Employee equity
participation
|
-
|
10,346 (3)
|
|
|
|
|
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Income from operations
|
36,822
|
17,040 (2)
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|
|
|
|
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Other income (expenses)
|
|
|
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Interest expense
|
(1,569)
|
(2,034)
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|
Other income
|
3,251 (4)
|
754
|
|
|
|
|
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Income before income
taxes
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38,504
|
15,760 (2)
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|
|
|
|
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Income taxes
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13,670
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7,438 (5)
|
|
|
|
|
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Net income
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$ 24,834
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$ 8,322 (2)
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|
|
|
|
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Net income per
share
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$ 1.56
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(2)
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Net income per
share - diluted
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$ 1.54
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|
|
|
|
|
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Net income excluding
non-recurring gains(4)
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$ 23,634
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|
|
|
|
|
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Net income per
share excluding non-recurring gains
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$ 1.49
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|
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Net income per
share excluding non-recurring gains - diluted
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$ 1.47
|
|
|
|
|
|
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Weighted average
shares outstanding
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15,918,214
|
|
|
Diluted weighted
average shares outstanding
|
16,116,242
|
|
| Consolidated
Statements of Income (USD thousands) |
3 mos ended
|
3 mos ended
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| |
31/12/98
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31/12/97 (1)
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| |
|
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| Gross Auction Proceeds |
$ 337,311
|
$ 306,345
|
| |
|
|
| Auction revenues |
$ 30,613
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$ 25,145
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| Direct expenses |
4,981
|
5,880
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| |
25,632
|
19,265
|
| |
|
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| Expenses |
|
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| Depreciation |
783
|
710
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| General and administrative |
9,058
|
14,898 (2)
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| Employee equity participation |
-
|
2,613 (3)
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| |
|
|
| Income from operations |
15,791
|
3,657 (2)
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| |
|
|
| Other income (expenses) |
|
|
| Interest expense |
(281)
|
(705)
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| Other income |
600
|
240
|
| |
|
|
| Income before income
taxes |
16,110
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3,192 (2)
|
| |
|
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| Income taxes |
5,149
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2,585 (5)
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| |
|
|
| Net income |
$ 10,961
|
$ 607 (2)
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| |
|
|
| Net income per share |
$ 0.66
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(2)
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| Net income per share
- diluted |
$ 0.65
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|
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|
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| Weighted average shares
outstanding |
16,548,666
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| Diluted weighted average
shares outstanding |
16,755,666
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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 December 31, 1997
is based on management estimates.
- G&A, Operating income, Net income,
and Income per share numbers for the 1997 periods are
not meaningful as comparative numbers.
- During the quarter ended December 31,
1997, the Company incurred an expense of $2.6 million
related to a pre-IPO equity participation program that
enabled employees to purchase equity in the Company. During
the quarter ended September 30, 1997, the Company incurred
a similar expense of $7.7 million
- Other income includes $1.8 million ($1.2
million after tax) of non-recurring income during the
quarter ended September 30, 1998, primarily a gain on
sale of a permanent auction site that was 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.
| Selected Balance Sheet
Data (USD thousands) |
31/12/98
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31/12/97
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|
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| Working capital (including
cash) |
$ 49,149
|
$ 3,322
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| Total assets |
152,593
|
70,460
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| Long-term
Debt |
8,768
|
4,623
|
| Total shareholders'
equity |
104,172
|
25,706
|
| |
|
|
| Selected Operating
Data |
31/12/98
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31/12/97
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|
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| Number of auctions
(12 mos) |
106
|
116
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| Auction revenues as
percentage of Gross Auction Proceeds (12 mos) |
8.72%
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8.98%
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| Number of consignors
(12 mos) |
14,432
|
13,636
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| Number of buyers (12
mos) |
34,613
|
33,340
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| Number of permanent
auction sites |
13
|
13
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| Number of regional
auction units |
8
|
8
|
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|
|
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- 30 -
Contact:
Bob Armstrong
Corporate Relations
Ritchie Bros. Auctioneers
Tel: (604) 273-7564 or 1-800-663-8457
Email: barmstrong@rbauction.com
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