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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 March 31, 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

Graphic

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: 110,740,128 common shares, without par value, outstanding as of May 6, 2022.

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

March 31, 

    

2022

    

2021

    

Revenue:

  

  

Service revenue

$

244,861

$

206,030

Inventory sales revenue

 

149,060

 

125,525

Total revenue

 

393,921

 

331,555

Operating expenses:

 

  

 

  

Costs of services

 

39,015

 

37,866

Cost of inventory sold

 

131,582

 

110,747

Selling, general and administrative expenses

 

126,606

 

114,239

Acquisition-related costs

 

9,637

 

2,922

Depreciation and amortization expenses

 

24,225

 

21,070

Foreign exchange loss (gain)

 

(164)

 

277

Total operating expenses

 

330,901

 

287,121

Gain on disposition of property, plant and equipment

 

169,820

 

68

Operating income

 

232,840

 

44,502

Interest expense

 

(20,686)

 

(8,946)

Change in fair value of derivatives, net

 

1,263

 

Other income, net

 

920

 

1,002

Income before income taxes

 

214,337

 

36,558

Income tax expense

36,236

8,419

Net income

$

178,101

$

28,139

Net income (loss) attributable to:

 

  

 

  

Stockholders

$

178,094

$

28,188

Non-controlling interests

 

7

 

(49)

Net income

$

178,101

$

28,139

Earnings per share attributable to stockholders:

 

  

 

  

Basic

$

1.61

$

0.26

Diluted

$

1.60

$

0.25

Weighted average number of shares outstanding:

 

  

 

  

Basic

 

110,647,700

 

109,972,997

Diluted

 

111,655,861

 

111,267,392

See accompanying notes to the condensed consolidated financial statements.

Ritchie Bros.

1

Condensed Consolidated Statements of Comprehensive Income

(Expressed in thousands of United States dollars)

(Unaudited)

Three months ended

    

March 31, 

2022

    

2021

    

Net income

$

178,101

$

28,139

Other comprehensive income (loss), net of income tax:

 

 

  

Foreign currency translation adjustment

 

(1,167)

 

(10,360)

Total comprehensive income

$

176,934

$

17,779

Total comprehensive income (loss) attributable to:

 

  

 

  

Stockholders

$

176,937

$

17,844

Non-controlling interests

 

(3)

 

(65)

$

176,934

$

17,779

See accompanying notes to the condensed consolidated financial statements.

Ritchie Bros.

2

Condensed Consolidated Balance Sheets

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

(Unaudited)

March 31, 

December 31, 

    

2022

    

2021

Assets

Cash and cash equivalents

$

440,120

$

326,113

Restricted cash

 

150,203

 

102,875

Trade and other receivables

 

292,418

 

150,895

Less: allowance for credit losses

(4,339)

(4,396)

Inventory

 

78,890

 

102,494

Other current assets

 

50,699

 

64,346

Income taxes receivable

 

19,517

 

19,895

Total current assets

 

1,027,508

 

762,222

Restricted cash

939,755

933,464

Property, plant and equipment

 

445,517

 

449,087

Other non-current assets

 

157,874

 

142,504

Intangible assets

 

341,771

 

350,516

Goodwill

 

947,798

 

947,715

Deferred tax assets

 

7,187

 

7,406

Total assets

$

3,867,410

$

3,592,914

Liabilities and Equity

 

  

 

  

Auction proceeds payable

$

539,739

$

292,789

Trade and other liabilities

 

258,595

 

280,308

Income taxes payable

 

24,967

 

5,677

Short-term debt

 

22,083

 

6,147

Current portion of long-term debt

 

3,564

 

3,498

Total current liabilities

 

848,948

 

588,419

Long-term debt

 

1,578,420

 

1,733,940

Other non-current liabilities

 

150,105

 

147,260

Deferred tax liabilities

 

64,572

 

52,232

Total liabilities

 

2,642,045

 

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: 110,735,243 (December 31, 2021: 110,618,049)

 

231,064

 

227,504

Additional paid-in capital

 

61,123

 

59,535

Retained earnings

 

989,923

 

839,609

Accumulated other comprehensive loss

 

(57,130)

 

(55,973)

Stockholders' equity

 

1,224,980

 

1,070,675

Non-controlling interest

 

385

 

388

Total stockholders' equity

 

1,225,365

 

1,071,063

Total liabilities and equity

$

3,867,410

$

3,592,914

See accompanying notes to the condensed consolidated financial statements.

Ritchie Bros.

3

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 March 31, 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

 

 

 

178,094

 

 

7

 

178,101

Other comprehensive loss

 

 

 

 

(1,157)

 

(10)

 

(1,167)

 

 

 

178,094

 

(1,157)

 

(3)

 

176,934

Stock option exercises

24,248

 

1,207

 

(221)

 

 

 

 

986

Issuance of common stock related to vesting of share units

92,946

 

2,353

 

(5,902)

 

 

 

 

(3,549)

Share-based continuing employment costs related to business combinations

 

 

2,133

 

 

 

 

2,133

Stock option compensation expense

2,567

2,567

Equity-classified share units expense

2,890

 

 

 

2,890

Equity-classified share units divided equivalents

121

(121)

 

 

 

Cash dividends paid

 

 

 

(27,659)

 

 

 

(27,659)

Balance, March 31, 2022

110,735,243

$

231,064

$

61,123

$

989,923

$

(57,130)

$

385

$

1,225,365

Three months ended March 31, 2021

  

 

  

 

  

 

  

 

  

 

  

 

  

Balance, December 31, 2020

109,876,428

$

200,451

$

49,171

$

791,918

$

(34,295)

$

5,154

$

1,012,399

Net income

 

 

 

 

28,188

 

 

(49)

 

28,139

Other comprehensive income

 

 

 

 

 

(10,344)

 

(16)

 

(10,360)

 

 

 

 

28,188

 

(10,344)

 

(65)

 

17,779

Stock option exercises

 

197,863

8,268

(1,549)

 

 

6,719

Issuance of common stock related to vesting of share units

 

234,275

2,046

(11,347)

 

 

(9,301)

Issuance (forfeiture) of common stock related to business combinations

 

(55,510)

 

 

 

Share-based continuing employment costs related to business combinations

2,553

 

2,553

Stock option compensation expense

 

1,861

 

 

1,861

Equity-classified share units expense

 

 

2,779

 

 

2,779

Equity-classified share units dividend equivalents

 

 

 

144

 

(144)

 

 

 

Cash dividends paid

 

 

(24,181)

 

(24,181)

Balance, March 31, 2021

 

110,253,056

$

210,765

$

43,612

$

795,781

$

(44,639)

$

5,089

$

1,010,608

See accompanying notes to the condensed consolidated financial statements.

Ritchie Bros.

4

Condensed Consolidated Statements of Cash Flows

(Expressed in thousands of United States dollars)

(Unaudited)

Three months ended March 31, 

    

2022

    

2021

Cash provided by (used in):

 

  

 

  

 

Operating activities:

 

  

 

  

 

Net income

$

178,101

$

28,139

Adjustments for items not affecting cash:

  

  

  

  

  

Depreciation and amortization expenses

 

24,225

 

21,070

Share-based payments expense

 

7,590

 

7,193

Deferred income tax expense

 

12,434

 

963

Unrealized foreign exchange (gain) loss

 

(248)

 

459

Gain on disposition of property, plant and equipment

 

(169,820)

 

(68)

Amortization of debt issuance costs

 

848

 

720

Amortization of right-of-use assets

3,455

3,172

Change in fair value of derivatives

(1,263)

Other, net

 

1,111

 

1,184

Net changes in operating assets and liabilities

 

128,701

 

117,855

Net cash provided by operating activities

 

185,134

 

180,687

Investing activities:

 

 

  

Acquisitions, net of cash acquired

 

(63)

 

Property, plant and equipment additions

 

(2,002)

 

(1,556)

Proceeds on disposition of property, plant and equipment

 

164,659

 

66

Intangible asset additions

 

(7,762)

 

(8,769)

Issuance of loans receivable

(1,099)

Repayment of loans receivable

1,212

224

Net cash provided by (used in) investing activities

 

154,945

 

(10,035)

Financing activities:

 

 

  

Dividends paid to stockholders

 

(27,659)

 

(24,181)

Proceeds from exercise of options and share option plans

 

986

 

6,719

Payment of withholding taxes on issuance of shares

 

(1,531)

 

(7,542)

Net increase (decrease) in short-term debt

15,376

(2,886)

Repayment of long-term debt

(162,698)

(2,626)

Debt issue costs

 

(2,261)

 

Repayment of finance lease obligations

 

(2,506)

 

(2,629)

Net cash used in financing activities

 

(180,293)

 

(33,145)

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

 

7,840

 

(2,782)

Increase

 

167,626

 

134,725

Beginning of period

 

1,362,452

 

306,895

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

$

1,530,078

$

441,620

See accompanying notes to the condensed consolidated financial statements.

Ritchie Bros.

5

1.    General information

Ritchie Bros. Auctioneers Incorporated and its subsidiaries (collectively referred to as the “Company”, “Ritchie Bros.”, “we”, “us”, or “our”) provide a marketplace for insights, services and transaction solutions for commercial assets. The Company offers its customers end-to-end transaction solutions for used commercial and other durable assets through its omnichannel platform, which includes auctions, online marketplaces, listing services, and private brokerage services. The Company also offers a wide array of value-added services connected to commercial assets as well as asset management software and data as a service solutions to help customers make more accurate and reliable business decisions. Ritchie Bros. Auctioneers Incorporated is a company incorporated in Canada under the Canada Business Corporations Act, whose shares are publicly traded on the Toronto Stock Exchange (“TSX”) and the New York Stock Exchange (“NYSE”).

2.    Significant accounting policies

(a) Basis of preparation

These unaudited condensed consolidated interim financial statements have been prepared in accordance with United States generally accepted accounting principles (“US GAAP”). They include the accounts of Ritchie Bros. Auctioneers Incorporated and its subsidiaries from their respective dates of formation or acquisition. All significant intercompany balances and transactions have been eliminated.

Certain information and footnote disclosure required by US GAAP for complete annual financial statements have been omitted and, therefore, these unaudited condensed consolidated interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2021, included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”). These unaudited condensed consolidated interim financial statements follow the same accounting policies and methods of application as our most recent annual audited consolidated financial statements except as described in Note 2(b) “ New and amended accounting standards and accounting policies”. In the opinion of management, these unaudited condensed consolidated interim financial statements reflect all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly, in all material respects, the Company’s consolidated financial position, results of operations, cash flows and changes in equity for the interim periods presented. The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

On February 24, 2022, the geopolitical situation in Eastern Europe intensified with Russia’s invasion of Ukraine, sharply affecting economic and global financial markets. Subsequent economic sanctions of Russia have exacerbated ongoing economic challenges, including issues such as rising inflation and global supply chain disruption. The Company does not have any direct or significant operations in Russia or Ukraine, or any material operations in neighboring countries and only has limited number of direct customers in the effected region. The extent of the ongoing impacts of the conflict on our operational and financial performance, including our ability to execute on our business strategies and initiatives and sustain our operations in Europe and globally, will depend on future developments, including the continued evolvement of military activity and sanctions imposed with Russia’s invasion of Ukraine. Given the evolving nature of the crisis, the Company cannot currently reasonably estimate the impacts of the conflict on its business operations, results of operations, cash flows or financial performance.

Reclassification

Certain amounts in the prior period financial statements have been reclassified from selling, general and administrative expenses to cost of services for certain employee costs related to equipment inspections to conform to the presentation of the current period financial statements.

Ritchie Bros.

6

2.    Significant accounting policies (continued)

(b) New and amended accounting standards and accounting policies

New accounting policies

Sale and leaseback

The transfer of the asset shall not be accounted for as a sale if the leaseback would be classified as a finance lease or a sales-type lease. For sale and leaseback transactions, the Company applies the requirements of ASC 606 Revenue from Contracts with Customers to determine whether the transfer of the asset should be accounted for as a sale and applies ASC 842 Leases when accounting for the sale and leaseback transactions. If the transfer of the asset is a sale, the Company derecognizes the underlying asset and recognizes the gain on sale of property, plant and equipment. The Company recognizes a lease obligation arising from the leaseback and the corresponding ROU asset. If the fair value of the consideration for the sale of an asset does not equal the fair value of the asset, or if the payments for the lease are not at market rates, the Company will make adjustments to measure the sale proceeds at fair value. Any below-market terms are accounted for as a prepayment of lease payments and any above- market terms are accounted for as additional financing provided by the buyer-lessor. If the transaction does not qualify for sale and leaseback accounting treatment, and control of the asset has not transferred, then the asset is not derecognized, and no gain or loss is recorded as the transaction is accounted for as a financing transaction.

New and amended accounting standards

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The update primarily addresses the accounting for contract assets and contract liabilities from revenue contracts with customers acquired in a business combination. The update requires that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606 - Revenue from Contracts with Customers, whereas prior to the adoption of the update, contract assets acquired and contract liabilities assumed in a business combination were recognized at fair value on the acquisition date. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption of the amendments is permitted, including adoption in an interim period. An entity that early adopts in an interim period should apply the amendments (1) retrospectively to all business combinations for which the acquisition date occurs on or after the beginning of the fiscal year that includes the interim period of early application and (2) prospectively to all business combinations that occur on or after the date of initial application. The Company has early adopted the update as of October 1, 2021 and therefore has applied the amendments to all acquisitions completed since January 1, 2021, which includes only the acquisition of SmartEquip, which was completed on November 2, 2021.

3.    Significant judgments, estimates and assumptions

The preparation of financial statements in conformity with US GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.

Future differences arising between actual results and the judgments, estimates and assumptions made by the Company at the reporting date, or future changes to estimates and assumptions, could necessitate adjustments to the underlying reported amounts of assets, liabilities, revenues and expenses in future reporting periods.

Judgments, estimates and underlying assumptions are evaluated on an ongoing basis by management and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. However, existing circumstances and assumptions about future developments may change due to market changes or circumstances and such changes are reflected in the assumptions when they occur.

Significant items subject to estimates and judgments during the quarter ended March 31, 2022 were made in accounting for the completed sale and leaseback transaction of our Bolton property (Note 15 & Note 21). The Company determined the following estimates in calculating the gain on sale: the present value of market rental payments of the Bolton property sold, the expected lease term in the leaseback arrangement and the Company’s incremental borrowing rate based on information available at the commencement date of the lease.

Ritchie Bros.

7

4.    Seasonality

The Company’s operations are both seasonal and event driven. Revenues tend to be the highest during the second and fourth calendar quarters as the Company generally conducts more auctions during these quarters. Volumes tend to also be lower during the third quarter, as supply of used equipment is lower as it is actively being used and not available for sale. Late December through mid-February and mid-July through August are traditionally less active periods.

5.   Business combinations

(a)SmartEquip acquisition

On November 2, 2021, the Company acquired all of the issued and outstanding common shares of SmartEquip for a total cash purchase price of $173,743,000. During the first quarter of 2022, the Company finalized the net working capital adjustment under the purchase agreement and increased the purchase price by $63,000, resulting in a total purchase price of $173,806,000.

SmartEquip is an innovative technology platform that supports customers' management of the equipment lifecycle and integrates parts procurement with both original equipment manufacturers and dealers.

The acquisition was accounted for in accordance with ASC 805, Business Combinations. The following table summarizes the preliminary allocation of the purchase price to the fair value of assets acquired and liabilities assumed.

SmartEquip purchase price allocation

Purchase price

$

173,806

 

  

Assets acquired:

 

  

Cash and cash equivalents

$

2,039

Trade and other receivables

 

2,926

Other current assets

486

Property, plant and equipment

 

120

Other non-current assets

 

75

Deferred tax assets

 

8,932

Intangible assets

 

71,700

 

  

Liabilities assumed:

 

  

Trade and other liabilities

 

1,239

Deferred revenue

3,565

Other non-current liabilities

119

Deferred tax liabilities

 

18,192

Fair value of identifiable net assets acquired

 

63,163

Goodwill acquired on acquisition

$

110,643

The deferred tax assets are presented net of a $1,486,000 valuation allowance. 

The following table summarizes the fair values of the identifiable intangible assets acquired:

Fair value

Weighted average

Asset

at acquisition

amortization period

Customer relationships

$

50,700

4 - 15 years

Software and technology assets

18,900

7 years

Trade names and trademarks

1,000

3 years

Backlog

1,100

2 years

Total

$

71,700

11.3 years

Ritchie Bros.

8

5.   Business combinations (continued)

SmartEquip purchase price allocation (continue)

The amounts included in the SmartEquip provisional purchase price allocation are preliminary in nature and are subject to adjustment as additional information is obtained about the facts and circumstances that existed at the date of the acquisition. The final determination of the fair values of certain assets and liabilities will be completed within the measurement period of up to one year from the acquisition date. Adjustments to the preliminary values during the measurement period may impact the amounts recorded as assets and liabilities with a corresponding adjustment to goodwill and will be recognized in the period in which the adjustments are determined.

Goodwill

Goodwill has been assigned and allocated to “Other” for segmented information purposes and is based on an analysis of the fair value of net assets acquired. Goodwill relates to benefits expected from the acquisition of SmartEquip’s business, its assembled workforce and associated technical expertise, as well as anticipated synergies from applying the Company’s auction expertise and transactional capabilities to SmartEquip’s existing customer base. The transaction is considered a non-taxable business combination and the goodwill is not deductible for tax purposes.

Transactions recognized separately from the acquisition of assets and assumptions of liabilities

At the date of acquisition, the Company issued 63,971 common shares to certain previous shareholders of SmartEquip in return for their continuing employment service. The common shares are expected to vest one third on each anniversary date of the acquisition over a three-year period as continuing employment services are provided to the Company. At the date of acquisition, the Company estimated that it will recognize a total fair value of $4,375,000 share-based continuing employment costs in acquisition-related costs over the vesting period, with an increase to additional paid-in capital, subject to continuing employment of those individuals. As and when the common shares vest, the Company will recognize the fair value of the issued common shares from additional paid-in capital to share capital (Note 19).

During the quarter ended March 31, 2022, the Company recorded $1,175,000 acquisition-related costs for legal, advisory, integration and other professional fees, which included $659,000 of share-based continuing employment costs.

(b)Euro Auctions acquisition

On August 9, 2021, the Company entered into a Sale and Purchase Agreement (“SPA”) pursuant to which it agreed to purchase Euro Auctions Limited, William Keys & Sons Holdings Limited, Equipment & Plant Services Ltd, and Equipment Sales Ltd. (collectively, “Euro Auctions”), each being a private limited company incorporated in Northern Ireland (the “Euro Auctions Acquisition”).

Under the terms of the SPA, the Company was to acquire all of the outstanding shares of Euro Auctions from their existing shareholders for approximately £775,000,000 (approximately $1.02 billion) cash consideration, to be paid on closing. The Euro Auctions acquisition is subject to regulatory clearances and the satisfaction of other customary closing conditions, including obtaining of antitrust clearance in the United Kingdom. On March 4, 2022, the Company was notified that the United Kingdom Competition and Markets Authority (“CMA”) intended to refer the proposed acquisition to a Phase 2 review process. On April 29, 2022, the Company made a decision that it is discontinuing the Phase 2 review by the CMA. The SPA will automatically terminate on June 28, 2022. (Note 24). As a result of the Company’s decision that it is discontinuing the Phase 2 review by the CMA, the Company redeemed all of the 2021 Notes (as defined below) at a redemption price equal to 100% of the original offering price of the notes, plus accrued and unpaid interest. (Note 17). The Company also terminated without cost its deal contingent forward currency contracts held to manage its exposure to foreign currency exchange rate fluctuations against the US and Canadian dollar on £343,000,000 of the £775,000,000 purchase consideration for the proposed Euro Auctions Acquisition. (Note 13).

Ritchie Bros.

9

6.    Segmented information

The Company’s principal business activity is the management and disposition of used industrial equipment and other durable assets. The Company’s operations are comprised of one reportable segment and other business activities that are not reportable as follows:

Auctions and Marketplaces – This is the Company’s only reportable segment, which consists of the Company’s live onsite auctions, its online auctions and marketplaces, and its brokerage service;
Other includes the results of Ritchie Bros. Financial Services (“RBFS”), Rouse, Mascus online services, SmartEquip, and the results from various value-added services and make-ready activities, including the Company’s equipment refurbishment services, and Ritchie Bros. Logistical Services (“RB Logistics”).

Three months ended March 31, 2022

    

A&M

    

Other

    

Consolidated

Service revenue:

Commissions

$

116,375

$

$

116,375

Fees

84,629

43,857

128,486

Total service revenue

201,004

43,857

244,861

Inventory sales revenue

 

149,060

 

 

149,060

Total revenue

$

350,064

$

43,857

$

393,921

Costs of services

 

25,574

 

13,441

 

39,015

Cost of inventory sold

 

131,582

 

 

131,582

Selling, general and administrative expenses ("SG&A")

 

108,811

 

17,795

 

126,606

Segment profit

$

84,097

$

12,621

$

96,718

Acquisition-related costs

 

  

 

  

 

9,637

Depreciation and amortization expenses ("D&A")

 

  

 

  

 

24,225

Foreign exchange gain

 

  

 

  

 

(164)

Total operating expenses

$

330,901

Gain on disposition of property, plant and equipment ("PPE")

 

  

 

  

 

169,820

Operating income

 

  

 

  

$

232,840

Interest expense

 

  

 

  

 

(20,686)

Change in fair value of derivatives

1,263

Other income, net

 

  

 

  

 

920

Income tax expense

 

  

 

  

 

(36,236)

Net income

 

  

 

  

$

178,101

Three months ended March 31, 2021

    

A&M

    

Other

    

Consolidated

Service revenue:

Commissions

$

103,975

$

$

103,975

Fees

68,096

33,959

102,055

Total service revenue

172,071

33,959

206,030

Inventory sales revenue

 

125,525

 

 

125,525

Total revenue

$

297,596

$

33,959

$

331,555

Costs of services

 

24,304

 

13,562

 

37,866

Cost of inventory sold

 

110,747

 

 

110,747

SG&A expenses

 

102,781

 

11,458

 

114,239

Segment profit

$

59,764

$

8,939

$

68,703

Acquisition-related costs

 

 

  

 

2,922

D&A expenses

 

  

 

 

21,070

Foreign exchange loss

 

 

 

277

Total operating expenses

$

287,121

Gain on disposition of PPE

 

 

 

68

Operating income

 

 

$

44,502

Interest expense