Ritchie Bros. conducted 32 industrial auctions in nine countries in the first quarter of 2008 
(08/05/2008)
Ritchie Bros. Auctioneers Incorporated has announced that it achieved net earnings of $16.4 million, or $0.16 per diluted weighted average share, for the first quarter of 2008, compared to net earnings of $17.6 million, or $0.17 per diluted weighted average share, for the first quarter of 2007.
Gross auction proceeds for the three months ended March 31, 2008 were $782 million, 12% higher than gross auction proceeds for the first quarter of 2007. Auction revenues increased 19% to $81.4 million for the quarter ended March 31, 2008 compared to the first quarter of 2007, and the Company’s auction revenue rate (auction revenues as a percentage of gross auction proceeds) was 10.41% in 2008.
Ongoing investments in the Company’s growth initiatives resulted in increased operating expenses during the first quarter of 2008, which led to a decrease in net earnings for the first quarter of 2008 compared to net earnings in the first quarter of 2007.
Ritchie Bros. conducted 32 unreserved industrial auctions and five unreserved agricultural auctions in nine countries throughout North America, Europe, the Middle East, and Australia during the quarter ended March 31, 2008. The Company set three regional gross auction proceeds records during the quarter, including the largest auction in the Company’s history, held in February 2008 at the Company’s permanent auction site in Orlando, Florida with gross auction proceeds of $190 million.
The Company had almost 60,000 bidder registrations at its unreserved industrial auctions in the first quarter of 2008, of which approximately 16,000 were successful buyers. In the first quarter of 2007, the Company had more than 55,000 bidder registrations, of which approximately 16,000 were buyers.
Ritchie Bros. worked with a large number of truck, equipment and other asset sellers in the first quarter of 2008, selling almost 49,000 lots from over 7,000 consignments. In the first quarter of 2007, Ritchie Bros. sold approximately 55,000 lots from over 6,000 consignments.
Although the Company’s auctions varied greatly in size over the 12 months ended March 31, 2008, the average Ritchie Bros. industrial auction attracted over 1,400 bidders who competed for more than 1,400 lots consigned by 194 consignors, generating average gross auction proceeds per industrial auction of $17.2 million (12 months ended March 31, 2007 – $15.3 million).
Almost $140 million worth of trucks, equipment, and real estate were sold using the Company’s rbauctionBid-Live internet bidding service during the first quarter of 2008. This is an increase of 15% over the online gross auction proceeds during the first quarter of 2007. More than 77,000 customers from 170 countries have now registered and received approval to use rbauctionBid-Live.
Internet bidders represented approximately 28% of the total registered bidders at Ritchie Bros. industrial auctions for the three month period ended March 31, 2008, and they were the buyer or runner up bidder on 30% of the lots offered online at these auctions. The Company has now sold almost $1.9 billion of industrial and agricultural assets over the internet.
Peter Blake, the Company’s CEO, commented: “We are very pleased with the gross auction proceeds and auction revenue growth we accomplished during the first quarter. We continued to take steps to position our business for sustainable long-term earnings growth by hiring more great people, expanding our international network of auction sites and investing in process improvement initiatives, and this resulted in higher operating expenses in the first quarter of 2008. Our quarterly earnings have always been variable, which is why we believe it is important to focus on our annual results.”
Mr. Blake continued: “We still believe we are on track to deliver our planned 2008 earnings growth, which will continue to reflect results of our strategic efforts to grow our global business. We incurred higher personnel and other costs in the first quarter as part of our longer-term objective to grow our auction proceeds from $3 billion to $10 billion and beyond. As part of that objective, we continue to deliver unsurpassed value to our customers in the U.S. and other markets, particularly during these more challenging times. Our platform is more global now than it has ever been, in large part because of our ongoing investments in frontier markets, such as India, China and Eastern Europe. We believe these investments allow us to provide tremendous value for our customers and support our worldwide growth initiative.”
The Company’s Board of Directors also announced the appointment of James M. Micali as a director of the Company effective April 25, 2008. Mr. Micali is currently Chairman and President of Michelin North America, with responsibility for Michelin’s operations in North America. Mr. Micali has been with Michelin since 1977 and brings a wealth of experience managing major business functions, including strategic planning, sales and marketing, customer service, mergers and acquisitions, finance, legal, information systems, human resources and external relations. Mr. Micali is also a director of Sonoco (NYSE: SON) and SCANA Corporation (NYSE: SCG). Mr. Micali obtained his legal education from Boston College Law School and was admitted to the bars of Rhode Island and Massachusetts.
Mr. Blake added: “ We are thrilled to have someone of Jim’s caliber join our board – he brings a tremendous range of skills and experience that will be invaluable as we continue to pursue our growth objectives.”
Coincident with the appointment of Mr. Micali, the Company’s Board of Directors increased the total number of directors of the Company from six to seven. In addition, effective April 25, 2008, Robert S. Armstrong, formerly Chief Operating Officer and Chief Financial Officer, was appointed Chief Operating Officer of the Company and Robert A. McLeod, formerly Director, Global Accounting, was appointed Chief Financial Officer.
The Company’s Board of Directors also announces the declaration of a quarterly cash dividend of $0.08 per common share payable on June 13, 2008 to shareholders of record on May 23, 2008.
Related categories: Construction companies Used Equipment
