RITCHIE BROS AUCTIONEERS INC [RBA] Filings

10-Q 1 rba-20220630x10q.htm 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2022

OR

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission file number: 001-13425

Ritchie Bros. Auctioneers Incorporated

(Exact Name of Registrant as Specified in its Charter)


Canada		98-0626225
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

9500 Glenlyon Parkway
Burnaby, British Columbia, Canada		V5J 0C6
(Address of Principal Executive Offices)		(Zip Code)

(778) 331-5500

(Registrant’s Telephone Number, including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common shares	RBA	New York Stock Exchange
Common Share Purchase Rights	N/A	New York Stock Exchange

Indicate by checkmark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐	Non-accelerated filer	☐
Smaller reporting company	☐	Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):

Yes ☐ No ⌧

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practical date: 110,809,591 common shares, without par value, outstanding as of August 3, 2022.

Table of Contents

RITCHIE BROS. AUCTIONEERS INCORPORATED

FORM 10-Q

For the quarter ended June 30, 2022

INDEX


PART I – FINANCIAL INFORMATION
ITEM 1:	Consolidated Financial Statements	1
ITEM 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
ITEM 3:	Quantitative and Qualitative Disclosures About Market Risk	54
ITEM 4:	Controls and Procedures	54

PART II – OTHER INFORMATION
ITEM 1:	Legal Proceedings	55
ITEM 1A:	Risk Factors	55
ITEM 2:	Unregistered Sales of Equity Securities and Use of Proceeds	55
ITEM 3:	Defaults Upon Senior Securities	55
ITEM 4:	Mine Safety Disclosures	55
ITEM 5:	Other Information	55
ITEM 6:	Exhibits	56

SIGNATURES		57

Table of Contents

PART I – FINANCIAL INFORMATION

ITEM 1: CONSOLIDATED FINANCIAL STATEMENTS

Condensed Consolidated Income Statements

(Expressed in thousands of United States dollars, except share and per share data)

(Unaudited)


	Three months ended				Six months ended
	June 30,				June 30,
	2022		2021		2022		2021
Revenue:
Service revenue	$	286,502	$	252,748	$	531,363	$	458,778
Inventory sales revenue		198,044		143,613		347,104		269,138
Total revenue		484,546		396,361		878,467		727,916

Operating expenses:
Costs of services		45,039		41,301		84,054		79,167
Cost of inventory sold		176,171		131,023		307,753		241,770
Selling, general and administrative		144,277		109,560		270,883		223,799
Acquisition-related costs		3,399		3,049		13,036		5,971
Depreciation and amortization		24,298		21,935		48,523		43,005
Foreign exchange loss (gain)		(158)		151		(322)		428
Total operating expenses		393,026		307,019		723,927		594,140
Gain on disposition of property, plant and equipment		347		175		170,167		243
Operating income		91,867		89,517		324,707		134,019

Interest expense		(18,463)		(8,867)		(39,149)		(17,813)
Change in fair value of derivatives, net		—		—		1,263		—
Other income, net		1,639		1,196		2,559		2,198
Income before income taxes		75,043		81,846		289,380		118,404

Income tax expense		21,632		21,065		57,868		29,484
Net income	$	53,411	$	60,781	$	231,512	$	88,920

Net income (loss) attributable to:
Stockholders	$	53,365	$	60,749	$	231,459	$	88,937
Non-controlling interests		46		32		53		(17)
Net income	$	53,411	$	60,781	$	231,512	$	88,920

Earnings per share attributable to stockholders:
Basic	$	0.48	$	0.55	$	2.09	$	0.81
Diluted	$	0.48	$	0.55	$	2.07	$	0.80

Weighted average number of shares outstanding:
Basic		110,760,339		110,311,615		110,705,182		110,144,229
Diluted		111,705,102		111,334,184		111,681,644		111,302,711

See accompanying notes to the condensed consolidated financial statements.


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Table of Contents

Condensed Consolidated Statements of Comprehensive Income

(Expressed in thousands of United States dollars)

(Unaudited)


	Three months ended				Six months ended
	June 30,				June 30,
	2022		2021		2022		2021
Net income	$	53,411	$	60,781	$	231,512	$	88,920
Other comprehensive income (loss), net of income tax:
Foreign currency translation adjustment		(22,775)		1,468		(23,942)		(8,892)
Total comprehensive income	$	30,636	$	62,249	$	207,570	$	80,028

Total comprehensive income (loss) attributable to:
Stockholders	$	30,612	$	62,215	$	207,549	$	80,059
Non-controlling interests		24		34		21		(31)
	$	30,636	$	62,249	$	207,570	$	80,028

See accompanying notes to the condensed consolidated financial statements.


Ritchie Bros.	2

Table of Contents

Condensed Consolidated Balance Sheets

(Expressed in thousands of United States dollars, except share data)

(Unaudited)


	June 30,		December 31,
	2022		2021
Assets

Cash and cash equivalents	$	367,289	$	326,113
Restricted cash		164,371		102,875
Trade and other receivables		295,241		150,895
Less: allowance for credit losses		(3,763)		(4,396)
Inventory		124,964		102,494
Other current assets		36,212		64,346
Income taxes receivable		12,525		19,895
Total current assets		996,839		762,222

Restricted cash		—		933,464
Property, plant and equipment		442,743		449,087
Other non-current assets		168,360		142,504
Intangible assets		332,615		350,516
Goodwill		945,950		947,715
Deferred tax assets		7,458		7,406
Total assets	$	2,893,965	$	3,592,914

Liabilities and Equity

Auction proceeds payable	$	493,688	$	292,789
Trade and other liabilities		254,514		280,308
Income taxes payable		31,362		5,677
Short-term debt		8,637		6,147
Current portion of long-term debt		4,617		3,498
Total current liabilities		792,818		588,419

Long-term debt		639,755		1,733,940
Other non-current liabilities		155,911		147,260
Deferred tax liabilities		61,396		52,232
Total liabilities		1,649,880		2,521,851

Commitments and Contingencies (Note 22 and Note 23 respectively)
Stockholders' equity:
Share capital:
Common stock; no par value, unlimited shares authorized, issued and outstanding shares: 110,791,788 (December 31, 2021: 110,618,049)		235,244		227,504
Additional paid-in capital		73,014		59,535
Retained earnings		1,015,301		839,609
Accumulated other comprehensive loss		(79,883)		(55,973)
Stockholders' equity		1,243,676		1,070,675
Non-controlling interest		409		388
Total stockholders' equity		1,244,085		1,071,063
Total liabilities and equity	$	2,893,965	$	3,592,914

See accompanying notes to the condensed consolidated financial statements.


Ritchie Bros.	3

Table of Contents

Condensed Consolidated Statements of Changes in Equity

(Expressed in thousands of United States dollars, except where noted)

(Unaudited)


	Attributable to stockholders
				Additional				Accumulated		Non-
	Common stock			paid-In				other		controlling
	Number of			capital		Retained		comprehensive		interest		Total
Three months ended June 30, 2022	shares	Amount		("APIC")		earnings		loss		("NCI")		equity

Balance, March 31, 2022	110,735,243	$	231,064	$	61,123	$	989,923	$	(57,130)	$	385	$	1,225,365
Net income	—		—		—		53,365		—		46		53,411
Other comprehensive loss	—		—		—		—		(22,753)		(22)		(22,775)
	—		—		—		53,365		(22,753)		24		30,636
Stock option exercises	55,935		2,347		(471)		—		—		—		1,876
Issuance of common stock related to vesting of share units	610		14		(43)		—		—		—		(29)
Share-based continuing employment costs related to business combinations	—		1,819		261		—		—		—		2,080
Stock option compensation expense			—		3,056								3,056
Equity-classified share units expense	—		—		8,794		—		—		—		8,794
Equity-classified share units divided equivalents	—		—		294		(294)		—		—		—
Cash dividends paid	—		—		—		(27,693)		—		—		(27,693)
Balance, June 30, 2022	110,791,788	$	235,244	$	73,014	$	1,015,301	$	(79,883)	$	409	$	1,244,085


Three months ended June 30, 2021

Balance, March 31, 2021	110,253,056	$	210,765	$	43,612	$	795,781	$	(44,639)	$	5,089	$	1,010,608
Net income	—		—		—		60,749		—		32		60,781
Other comprehensive income	—		—		—		—		1,466		2		1,468
	—		—		—		60,749		1,466		34		62,249
Stock option exercises	113,290		4,889		(910)		—		—		—		3,979
Issuance of common stock related to vesting of share units	462		12		(30)		—		—		—		(18)
Share-based continuing employment costs related to business combinations	—		—		2,678		—		—		—		2,678
Stock option compensation expense	—		—		1,909		—		—		—		1,909
Equity-classified share units expense	—		—		4,404		—		—		—		4,404
Equity-classified share units dividend equivalents	—		—		137		(137)		—		—		—
Cash dividends paid	—		—		—		(24,356)		—		(26)		(24,382)
Balance, June 30, 2021	110,366,808	$	215,666	$	51,800	$	832,037	$	(43,173)	$	5,097	$	1,061,427


Ritchie Bros.	4

Table of Contents


	Attributable to stockholders
				Additional				Accumulated		Non-
	Common stock			paid-In				other		controlling
	Number of			capital		Retained		comprehensive		interest		Total
Six months ended June 30, 2022	shares	Amount		("APIC")		earnings		loss		("NCI")		equity

Balance, December 31, 2021	110,618,049	$	227,504	$	59,535	$	839,609	$	(55,973)	$	388	$	1,071,063
Net income	—		—		—		231,459		—		53		231,512
Other comprehensive loss	—		—		—		—		(23,910)		(32)		(23,942)
	—		—		—		231,459		(23,910)		21		207,570
Stock option exercises	80,183		3,554		(692)		—		—		—		2,862
Issuance of common stock related to vesting of share units	93,556		2,367		(5,945)		—		—		—		(3,578)
Share-based continuing employment costs related to business combinations			1,819		2,394		—		—		—		4,213
Stock option compensation expense			—		5,623		—		—		—		5,623
Equity-classified share units expense	—		—		11,684		—		—		—		11,684
Equity-classified share units dividend equivalents	—		—		415		(415)		—		—		—
Cash dividends paid	—		—		—		(55,352)		—		—		(55,352)
Balance, June 30, 2022	110,791,788	$	235,244	$	73,014	$	1,015,301	$	(79,883)	$	409	$	1,244,085

Six months ended June 30, 2021

Balance, December 31, 2020	109,876,428	$	200,451	$	49,171	$	791,918	$	(34,295)	$	5,154	$	1,012,399
Net income	—		—		—		88,937		—		(17)		88,920
Other comprehensive income	—		—		—		—		(8,878)		(14)		(8,892)
	—		—		—		88,937		(8,878)		(31)		80,028
Stock option exercises	311,153		13,157		(2,458)		—		—		—		10,699
Issuance (forfeiture) of common stock related to vesting of share units	234,737		2,058		(11,377)		—		—		—		(9,319)
Forfeiture of common stock related to business combinations	(55,510)		—		—		—		—		—		—
Share-based continuing employment costs related to business combinations	—		—		5,231		—		—		—		5,231
Stock option compensation expense	—		—		3,770		—		—		—		3,770
Equity-classified share units expense	—		—		7,182		—		—		—		7,182
Equity-classified share units dividend equivalents	—		—		281		(281)		—		—		—
Cash dividends paid	—		—		—		(48,537)		—		(26)		(48,563)
Balance, June 30, 2021	110,366,808	$	215,666	$	51,800	$	832,037	$	(43,173)	$	5,097	$	1,061,427

RITCHIE BROS AUCTIONEERS INC [RBA] Filings
10-Q	[2022-08-04]
10-Q	[2022-05-09]
10-K	[2022-02-17]
10-Q	[2021-11-04]
10-Q	[2021-08-05]
10-Q	[2021-05-10]
10-K	[2021-02-18]
10-Q	[2020-11-05]
10-Q	[2020-08-06]
10-Q	[2020-05-07]
10-K	[2020-02-27]
10-Q	[2019-11-07]
10-Q	[2019-08-08]
10-Q	[2019-05-09]
10-K	[2019-02-28]
10-Q	[2018-11-08]
10-Q	[2018-08-09]
10-Q	[2018-05-10]
10-K	[2018-02-26]
10-Q	[2017-11-09]
10-Q	[2017-08-08]
10-Q	[2017-05-04]
10-K	[2017-02-21]
10-Q	[2016-11-09]
10-Q	[2016-08-08]
10-Q	[2016-05-09]
10-K	[2016-02-25]