Rb Global Inc 10-Q for FY2021 Q1

Rb Global Inc. (RBA)

10-Q 2021-05-10 For: 2021-03-31

Added on April 09, 2026

About this 10-Q

Rb Global Inc filed this 10-Q on May 10, 2021, covering the quarter ended March 31, 2021 (FY2021 Q1).

Headline figures

Quarter ended March 31, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $331.56M; up 21.3% from $273.26M a year earlier
Net income: $28.19M; up 23.6% from net income of $22.81M a year earlier
Diluted EPS: $0.25; up 19.0% from $0.21 a year earlier

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☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2021

OR

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

For the transition period from ______ to ______


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)

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

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


PART I – FINANCIAL INFORMATION
ITEM 1:	Consolidated Financial Statements	1
ITEM 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
ITEM 3:	Quantitative and Qualitative Disclosures About Market Risk	49
ITEM 4:	Controls and Procedures	49

PART II – OTHER INFORMATION
ITEM 1:	Legal Proceedings	51
ITEM 1A:	Risk Factors	51
ITEM 2:	Unregistered Sales of Equity Securities and Use of Proceeds	51
ITEM 3:	Defaults Upon Senior Securities	51
ITEM 4:	Mine Safety Disclosures	51
ITEM 5:	Other Information	51
ITEM 6:	Exhibits	52

SIGNATURES		53


	Three months ended
	March 31,
	2021		2020
Revenue:
Service revenue	$	206,030	$	183,123
Inventory sales revenue		125,525		90,132
Total revenue		331,555		273,255

Operating expenses:
Costs of services		36,027		39,355
Cost of inventory sold		110,747		81,585
Selling, general and administrative expenses		116,078		98,385
Acquisition-related costs		2,922		—
Depreciation and amortization expenses		21,070		19,293
Gain on disposition of property, plant and equipment		(68)		(47)
Foreign exchange loss		277		602
Total operating expenses		287,053		239,173
Operating income		44,502		34,082

Interest expense		(8,946)		(9,182)
Other income, net		1,002		3,577
Income before income taxes		36,558		28,477

Income tax expense		8,419		5,648
Net income	$	28,139	$	22,829

Net income attributable to:
Stockholders	$	28,188	$	22,809
Non-controlling interests		(49)		20
Net income	$	28,139	$	22,829

Earnings per share attributable to stockholders:
Basic	$	0.26	$	0.21
Diluted	$	0.25	$	0.21

Weighted average number of shares outstanding:
Basic		109,972,997		109,248,880
Diluted		111,267,392		110,482,837


	March 31,		December 31,
	2021		2020
Assets

Cash and cash equivalents	$	294,380	$	278,766
Restricted cash		147,240		28,129
Trade and other receivables		294,291		135,001
Less: allowance for credit losses		(5,576)		(5,467)
Inventory		72,314		86,278
Other current assets		32,802		27,274
Income taxes receivable		8,224		6,797
Total current assets		843,675		556,778

Property, plant and equipment		483,981		492,127
Other non-current assets		148,882		147,608
Intangible assets		296,480		300,948
Goodwill		840,632		840,610
Deferred tax assets		13,044		13,458
Total assets	$	2,626,694	$	2,351,529

Liabilities and Equity

Auction proceeds payable	$	517,521	$	214,254
Trade and other payables		227,679		243,786
Income taxes payable		3,215		17,032
Short-term debt		25,933		29,145
Current portion of long-term debt		10,517		10,360
Total current liabilities		784,865		514,577

Long-term debt		626,202		626,288
Other non-current liabilities		159,266		153,000
Deferred tax liabilities		45,753		45,265
Total liabilities		1,616,086		1,339,130

Commitments and Contingencies (Note 21 and Note 22 respectively)
Stockholders' equity:
Share capital:
Common stock; no par value, unlimited shares authorized, issued and outstanding shares: 110,253,056 (December 31, 2020: 109,876,428)		210,765		200,451
Additional paid-in capital		43,612		49,171
Retained earnings		795,781		791,918
Accumulated other comprehensive loss		(44,639)		(34,295)
Stockholders' equity		1,005,519		1,007,245
Non-controlling interest		5,089		5,154
Total stockholders' equity		1,010,608		1,012,399
Total liabilities and equity	$	2,626,694	$	2,351,529


	Attributable to stockholders
				Additional				Accumulated		Non-
	Common stock			paid-In				other		controlling
	Number of			capital		Retained		comprehensive		interest		Total
Three months ended March 31, 2021	shares	Amount		("APIC")		earnings		loss		("NCI")		equity

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 loss	—		—		—		—		(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 combination	(55,510)		—		—		—		—		—		—
Share-based continuing employment costs related to business combination	—		—		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

Three months ended March 31, 2020

Balance, December 31, 2019	109,337,781	$	194,771	$	52,110	$	714,051	$	(59,099)	$	5,154	$	906,987
Net income	—		—		—		22,809		—		20		22,829
Other comprehensive loss	—		—		—		—		(15,860)		(8)		(15,868)
	—		—		—		22,809		(15,860)		12		6,961
Stock option exercises	247,446		8,684		(1,630)		—		—		—		7,054
Issuance of common stock related to vesting of share units	138,824		3,516		(7,445)		—		—		—		(3,929)
Stock option compensation expense	—		—		1,187		—		—		—		1,187
Equity-classified share units expense	—		—		1,786		—		—		—		1,786
Equity-classified share units dividend equivalents	—		—		139		(139)		—		—		—
Change in fair value of contingently redeemable PSUs	—		—		—		—		—		—		—
Cash dividends paid	—		—		—		(21,905)		—		—		(21,905)
Shares repurchased	(1,525,312)		(53,170)		—		—		—		—		(53,170)
Balance, March 31, 2020	108,198,739	$	153,801	$	46,147	$	714,816	$	(74,959)	$	5,166	$	844,971


Three months ended March 31,	2021		2020
Cash provided by (used in):
Operating activities:
Net income	$	28,139	$	22,829
Adjustments for items not affecting cash:
Depreciation and amortization expenses		21,070		19,293
Stock-based compensation expense		7,193		2,973
Deferred income tax expense		963		1,331
Unrealized foreign exchange loss		459		782
Gain on disposition of property, plant and equipment		(68)		(47)
Amortization of debt issuance costs		720		756
Amortization of right-of-use assets		3,172		3,343
Gain on contingent consideration from equity investment		—		(1,700)
Other, net		1,184		1,282
Net changes in operating assets and liabilities		117,855		(46,710)
Net cash provided by operating activities		180,687		4,132
Investing activities:
Property, plant and equipment additions		(1,556)		(3,495)
Proceeds on disposition of property, plant and equipment		66		333
Intangible asset additions		(8,769)		(7,220)
Issuance of loans receivable		—		(2,984)
Repayment of loans receivable		224		180
Distribution from equity investment		—		4,212
Proceeds on contingent consideration from equity investment		—		1,700
Net cash used in investing activities		(10,035)		(7,274)
Financing activities:
Share repurchase		—		(53,170)
Dividends paid to stockholders		(24,181)		(21,905)
Proceeds from exercise of options and share option plans		6,719		7,054
Payment of withholding taxes on issuance of shares		(7,542)		(2,984)
Net increase (decrease) in short-term debt		(2,886)		29,069
Repayment of long-term debt		(2,626)		(4,236)
Repayment of finance lease obligations		(2,629)		(2,189)
Net cash used in financing activities		(33,145)		(48,361)
Effect of changes in foreign currency rates on cash, cash equivalents, and restricted cash		(2,782)		(12,828)
Increase (decrease)		134,725		(64,331)
Beginning of period		306,895		420,256
Cash, cash equivalents, and restricted cash, end of period	$	441,620	$	355,925


	December 8, 2020
Cash consideration paid on closing	$	250,265
Equity consideration paid for pre-combination services		1,459
Purchase price	$	251,724


	Fair value		Weighted average
Asset	at acquisition		amortization period
Customer relationships		71,000	15 years
Software and technology assets		7,500	4 years
Trade names and trademarks	$	800	2 years
Total	$	79,300	13.8 years


	Three months ended March 31, 2021
	A&M		Other		Consolidated
Service revenue	$	170,755	$	35,275	$	206,030
Inventory sales revenue		125,525		—		125,525
Total revenue	$	296,280	$	35,275	$	331,555
Costs of services		21,590		14,437		36,027
Cost of inventory sold		110,747		—		110,747
Selling, general and administrative expenses ("SG&A")		104,345		11,733		116,078
Segment profit	$	59,598	$	9,105	$	68,703
Acquisition-related costs						2,922
Depreciation and amortization expenses ("D&A")						21,070
Gain on disposition of property, plant and equipment ("PPE")						(68)
Foreign exchange loss						277
Operating income					$	44,502
Interest expense						(8,946)
Other income, net						1,002
Income tax expense						(8,419)
Net income					$	28,139


	United
	States		Canada		Europe		Other		Consolidated
Total revenue for the three months ended:
March 31, 2021	$	207,414	$	48,478	$	47,176	$	28,487	$	331,555
March 31, 2020		190,530		35,643		26,338		20,744		273,255


	Net income		WA	Per
	attributable to		number	share
Three months ended March 31, 2021	stockholders		of shares	amount
Basic	$	28,188	109,972,997	$	0.26
Effect of dilutive securities:
Share units		—	579,133		—
Stock options		—	715,262		(0.01)
Diluted	$	28,188	111,267,392	$	0.25


		March 31, 2021				December 31, 2020
		Carrying				Carrying
	Category	amount		Fair value		amount		Fair value
Fair values disclosed:
Cash and cash equivalents	Level 1	$	294,380	$	294,380	$	278,766	$	278,766
Restricted cash	Level 1		147,240		147,240		28,129		28,129
Loan receivables	Level 2		5,658		6,238		5,798		6,438
Short-term debt	Level 2		25,933		25,933		29,145		29,145
Long-term debt
Senior unsecured notes	Level 1		493,177		513,450		492,734		514,219
Term loan	Level 2		96,734		97,279		97,812		98,420
Long-term revolver loan	Level 2		46,808		46,882		46,102		46,184


Ritchie Bros.	1


Ritchie Bros.	2


Ritchie Bros.	3


Ritchie Bros.	4


Balance, December 31, 2020		(5,467)
Current period provision		(501)
Write-offs charged against the allowance		392
Balance, March 31, 2021	$	(5,576)


	Carrying amount
	March 31,		December 31,
	2021		2020
Short-term debt	$	25,933	$	29,145

Long-term debt:

Term loan and long-term revolver loan:
Term loan denominated in Canadian dollars, secured, bearing interest at a weighted average rate of 2.68%, due in monthly installments of interest only and quarterly installments of principal, maturing in October 2023		97,279		98,420
Long-term revolver loan denominated in Canadian dollars, secured, bearing interest at a weighted average rate of 2.68%, due in monthly installments of interest only, maturing in October 2023		46,882		46,184
Less: unamortized debt issue costs		(619)		(690)
Senior unsecured notes:
Bearing interest at 5.375% due in semi-annual installments, with the full amount of principal due in January 2025		500,000		500,000
Less: unamortized debt issue costs		(6,823)		(7,266)
Total long-term debt		636,719		636,648

Total debt	$	662,652	$	665,793

Long-term debt:
Current portion	$	10,517	$	10,360
Non-current portion		626,202		626,288
Total long-term debt	$	636,719	$	636,648


				WA
	Common	WA		remaining		Aggregate
	shares under	exercise		contractual		intrinsic
	option	price		life (in years)		value
Outstanding, December 31, 2020	1,985,754	$	34.95		7.7	$	68,717
Granted	684,761		54.83
Exercised	(197,863)		33.96				4,538
Forfeited	(6,533)		35.39
Outstanding, March 31, 2021	2,466,119		40.54		8.0		44,460
Exercisable, March 31, 2021	1,046,861	$	31.27		6.3	$	28,557


	Equity-classified awards						Liability-classified awards
	PSUs			RSUs			DSUs
		WA grant			WA grant				WA grant
		date fair			date fair				date fair
	Number	value		Number	value			Number	value
Outstanding, December 31, 2020	542,676	$	38.09	134,937	$	39.14	$	137,514	$	32.06
Granted	137,848		56.81	28,560		56.45		4,525		52.08
Vested and settled	(161,248)		31.14	(87,409)		33.14		—		—
Forfeited	(10,750)		48.54	(4,089)		64.32		—		—
Outstanding, March 31, 2021	508,526	$	45.14	71,999	$	51.87	$	142,039	$	32.70


Remainder of 2021	$	12,478
2022		14,843
2023		12,784
2024		10,769
2025		10,647
Thereafter		107,826
Total future minimum lease payments	$	169,347
less: imputed interest		(41,586)
Total operating lease liability	$	127,761
less: operating lease liability - current		(11,419)
Total operating lease liability - non-current	$	116,342


			Accumulated		Net book
As at March 31, 2021	Cost		depreciation		value
Computer equipment	$	16,161	$	(7,936)	$	8,225
Yard and others		29,275		(12,278)		16,997
	$	45,436	$	(20,214)	$	25,222


			Accumulated		Net book
As at December 31, 2020	Cost		depreciation		value
Computer equipment	$	16,597	$	(8,317)	$	8,280
Yard and others		28,234		(10,865)		17,369
	$	44,831	$	(19,182)	$	25,649


Remainder of 2021	$	7,702
2022		8,545
2023		6,272
2024		3,759
2025		821
Thereafter		24
Total future minimum lease payments	$	27,123
less: imputed interest		(1,243)
Total finance lease liability	$	25,880
less: finance lease liability - current		(9,256)
Total finance lease liability - non-current	$	16,624


	Three months ended March 31,
							% Change
(in U.S. $000's, except EPS and percentages)	2021			2020			2021 over 2020
Service revenue:
Commissions	$	103,975		$	93,484			11	%
Fees		102,055			89,639			14	%
Total service revenue		206,030			183,123			13	%
Inventory sales revenue		125,525			90,132			39	%
Total revenue		331,555			273,255			21	%
Costs of services		36,027			39,355			(8)	%
Cost of inventory sold		110,747			81,585			36	%
Selling, general and administrative expenses		116,078			98,385			18	%
Operating expenses		287,053			239,173			20	%
Operating income		44,502			34,082			31	%
Operating income as a % of total revenue		13.4	%		12.5	%		90	bps
Net income attributable to stockholders		28,188			22,809			24	%
Adjusted net income attributable to stockholders*		28,188			22,809			24	%
Diluted earnings per share attributable to stockholders	$	0.25		$	0.21			19	%
Diluted adjusted EPS attributable to stockholders*	$	0.25		$	0.21			19	%
Effective tax rate		23.0	%		19.8	%		320	bps

Total GTV		1,274,539			1,147,025			11	%
Service GTV		1,149,014			1,056,893			9	%
Service revenue as a % of total GTV		16.2	%		16.0	%		20	bps
Inventory GTV		125,525			90,132			39	%

Service revenue as a % of total revenue		62.1	%		67.0	%		(490)	bps
Inventory sales revenue as a % of total revenue		37.9	%		33.0	%		490	bps
Cost of inventory sold as a % of operating expenses		38.6	%		34.1	%		450	bps
Service GTV as a % of total GTV - Mix		90.2	%		92.1	%		(190)	bps
Inventory sales revenue as a % of total GTV - Mix		9.8	%		7.9	%		190	bps


					% Change
					2021 over
Value of one local currency to U.S dollar	2021		2020		2020
Period-end exchange rate
Canadian dollar		0.7961		0.7097	12	%
Euro		1.1726		1.1025	6	%
Australian dollar		0.7595		0.6118	24	%

Average exchange rate -Three months ended March 31,
Canadian dollar		0.7896		0.7453	6	%
Euro		1.2059		1.1031	9	%
Australian dollar		0.7728		0.6575	18	%


	Three months ended March 31, 2021
(in U.S $000's)	A&M		Other		Consolidated
Service revenue	$	170,755	$	35,275	$	206,030
Inventory sales revenue		125,525		—		125,525
Total revenue		296,280		35,275		331,555
Ancillary and logistical service expenses		—		12,269		12,269
Other costs of services		21,590		2,168		23,758
Cost of inventory sold		110,747		—		110,747
SG&A expenses		104,345		11,733		116,078
Segment profit		59,598		9,105		68,703


	Three months ended March 31,
			% Change
(in U.S. $000's)	2021	2020	2021 over 2020
Total GTV by Geography
United States	881,653	862,442	2	%
Canada	210,611	149,311	41	%
International	182,275	135,272	35	%
Total GTV	1,274,539	1,147,025	11	%

Service GTV by Geography
United States	815,316	805,494	1	%
Canada	200,896	141,116	42	%
International	132,802	110,283	20	%
Total Service GTV¹	1,149,014	1,056,893	9	%

¹ Service GTV is calculated as total GTV less inventory sales revenue


	Three months ended March 31,
			% Change
(in U.S. $000's, except percentages)	2021	2020	2021 over 2020
A&M Revenue by Geography
United States
Service revenue	122,911	120,339	2	%
Inventory sales revenue	66,337	56,948	16	%
A&M revenue- United States	189,248	177,287	7	%
Canada
Service revenue	28,037	18,560	51	%
Inventory sales revenue	9,715	8,195	19	%
A&M revenue- Canada	37,752	26,755	41	%
International
Service revenue	19,807	15,844	25	%
Inventory sales revenue	49,473	24,989	98	%
A&M revenue- International	69,280	40,833	70	%
Total
Service revenue	170,755	154,743	10	%
Inventory sales revenue	125,525	90,132	39	%
A&M total revenue	296,280	244,875	21	%


	Three months ended March 31,
					% Change
(in U.S. $000's, except share and
per share data, and percentages)	2021		2020		2021 over 2020
Net income attributable to stockholders	$	28,188	$	22,809	24	%
Adjusted net income attributable to stockholders*	$	28,188	$	22,809	24	%
Weighted average number of dilutive shares outstanding		111,267,392		110,482,837	1	%

Diluted earnings per share attributable to stockholders	$	0.25	$	0.21	19	%
Diluted adjusted EPS attributable to Stockholders*	$	0.25	$	0.21	19	%


	As at and for the 12 months ended March 31,
							% Change
(in U.S. $millions, except percentages)	2021			2020			2021 over 2020
Short-term debt	$	25.9		$	33.1		(22)	%
Long-term debt		636.7			630.5		1	%
Debt		662.6			663.6		(0)	%
Less: Cash and cash equivalents		(294.4)			(290.1)		1	%
Adjusted net debt*		368.2			373.5		(1)	%
Net income	$	175.7		$	153.8		14	%
Add: depreciation and amortization expenses		76.7			72.7		6	%
Add: interest expense		35.3			39.6		(11)	%
Less: interest income		(1.8)			(3.8)		(53)	%
Add: income tax expense		68.3			40.6		68	%
Pre-tax adjusting items:
Share-based payment expense recovery		—			(4.1)		(100)	%
Acquisition-related costs		5.2			—		100	%
Severance		4.3			—		100	%
Adjusted EBITDA*	$	363.7		$	298.8		22	%
Debt/net income		3.8	x		4.3	x	(12)	%
Adjusted net debt/adjusted EBITDA		1.0	x		1.3	x	(23)	%


	12 months ended March 31,
					% Change
(in U.S. $ millions, except percentages)	2021		2020		2021 over 2020
Cash provided by operating activities	$	436.6	$	265.0		65	%
Property, plant and equipment additions		12.3		14.3		(14)	%
Intangible asset additions		30.4		29.0		5	%
Proceeds on disposition of property plant and equipment		(16.1)		(6.0)		168	%
Net capital spending	$	26.6	$	37.3		(29)	%
OFCF*	$	410.0	$	227.7		80	%


Exhibit
Number		Document


31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended
31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended
32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101		Interactive Data Files Pursuant to Rule 405 of Regulation S-T , for the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, formatted in Inline XBRL: (i) Condensed Consolidated Income Statements; (ii) Condensed Consolidated Balance Sheets; (iii) Condensed Consolidated Statements of Changes in Equity; (iv) Condensed Consolidated Statements of Cash Flows; and (v) Notes to the Condensed Consolidated Financial Statements
104		Cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, formatted in Inline XBRL and contained in Exhibit 101


	RITCHIE BROS. AUCTIONEERS INCORPORATED


Dated: May 10, 2021	By:	/s/ Ann Fandozzi
		Ann Fandozzi
		Chief Executive Officer

Dated: May 10, 2021	By:	/s/ Sharon R. Driscoll
		Sharon R. Driscoll
		Chief Financial Officer


Date: May 10, 2021

/s/ Ann Fandozzi

Ann Fandozzi
Chief Executive Officer