RB Global, Inc. (NYSE & TSX: RBA, the “Company”, “RB
Global”, “we”, “us”, “their”, or “our”) reported the following
results for the three months ended September 30, 2024.
"Our year-round dedication to CAT preparedness ensured a rapid
and seamless response to recent hurricanes,” said Jim Kessler, CEO
of RB Global. "We are incredibly proud of our team's dedication to
over delivering for our partners and customers and their visible
display of One Team - All In spirit."
"We are focused on managing expenses through careful cost
controls and limiting discretionary spend to help us navigate the
current environment" said Eric J. Guerin, Chief Financial Officer.
"We continue to invest in strategic areas to position us for
long-term growth."
Third Quarter Financial Highlights1,2,3:
- Total gross transaction value ("GTV") decreased 7%
year-over-year to $3.6 billion.
- Total revenue decreased 4% year-over-year to $981.8
million.
- Service revenue increased 1% year-over-year to $779.9
million.
- Inventory sales revenue decreased 18% year-over-year to $201.9
million.
- Net income increased 20% year-over-year to $76.0 million.
- Net income available to common stockholders increased 22%
year-over-year to $66.9 million.
- Diluted earnings per share available to common stockholders
increased 20% to $0.36 per share.
- Diluted adjusted earnings per share available to common
stockholders decreased 1% year-over-year to $0.71 per share.
- Adjusted earnings before interest, taxes, depreciation and
amortization ("EBITDA") decreased 1% year-over-year to $283.7
million.
2024 Financial Outlook
The Company has updated its full-year 2024 outlook for select
financial data, as shown below:
(in U.S. dollars in millions, except
percentages)
Current Outlook
Prior Outlook
GTV growth4
0% to 2%
0% to 2%
Adjusted EBITDA
$1,235 to $1,270
$1,220 to $1,270
Full year 2024 tax rate (GAAP and
Adjusted)
25% to 27%
25% to 27%
Capital expenditures5
$275 to $325
$275 to $325
The Company has not provided a reconciliation of Adjusted EBITDA
outlook for fiscal 2024 to GAAP net income, the most directly
comparable GAAP financial measure, because without unreasonable
efforts, it is unable to predict with reasonable certainty the
amount or timing of non-GAAP adjustments that are used to calculate
Adjusted EBITDA, including but not limited to: (a) the net loss or
gain on the sale of property plant & equipment or other assets,
(b) acquisition-related or integration costs relating to our
mergers and acquisition activity, including severance costs, (c)
other legal, advisory, restructuring and non-income tax expenses,
(d) share-based payments compensation expense which value is
directly impacted by the fluctuations in our share price and other
variables, and (e) other expenses that we do not believe are
indicative of our ongoing operations. These adjustments are
uncertain, depend on various factors that are beyond our control
and could have a material impact on net income for fiscal 2024.
___________________________________
1 For information regarding RB Global's
use and definition of certain measures, see “Key Operating Metrics”
and “Non-GAAP Measures” sections in this press release.
2 All figures are presented in U.S.
dollars.
3 For the third quarter of 2024 as
compared to the third quarter of 2023.
4 Compared to pro forma combined 2023
results.
5 Capital expenditures is defined as
property, plant and equipment, net of proceeds on disposals, plus
intangible asset additions.
Additional Financial and Operational Highlights
Three months ended September
30,
Nine months ended September
30,
% Change
% Change
(in U.S. dollars in millions, except
EPS and percentages)
2024
2023
2024 over 2023
2024
2023
2024 over 2023
GTV
$
3,622.2
$
3,875.4
(7
)%
$
11,803.6
$
9,918.6
19
%
Service revenue
779.9
773.8
1
%
2,488.1
1,923.4
29
%
Service revenue take rate
21.5
%
20.0
%
150bps
21.1
%
19.4
%
170bps
Inventory sales revenue
$
201.9
$
246.0
(18
)%
$
654.5
$
715.3
(8
)%
Inventory return
8.4
16.0
(48
)%
41.7
41.9
—
%
Inventory rate
4.2
%
6.5
%
(230)bps
6.4
%
5.9
%
50bps
Net income
$
76.0
$
63.2
20
%
$
294.4
$
121.8
142
%
Net income available to common
stockholders
66.9
54.7
22
%
264.7
99.1
167
%
Adjusted EBITDA
283.7
285.8
(1
)%
956.7
725.4
32
%
Diluted earnings per share available to
common stockholders
$
0.36
$
0.30
20
%
$
1.43
$
0.61
134
%
Diluted adjusted earnings per share
available to common stockholders
$
0.71
$
0.72
(1
)%
$
2.54
$
2.16
18
%
Revenue
Beginning in the third quarter of 2024, the Company updated its
presentation of disaggregated revenue to be consistent with how
management currently evaluates its financial and business
performance. The prior year disaggregation of revenue has been
recast to conform with current period presentation. Please refer to
the quarterly report on Form 10-Q for the quarter ended September
30, 2024 for additional details.
Three months ended
September 30,
Nine months ended
September 30,
(in U.S. dollars in millions)
2024
2023
2024
2023
Transactional seller revenue
$
206.6
$
223.2
$
695.9
$
607.0
Transactional buyer revenue
486.9
476.6
1,522.3
1,104.5
Marketplace services revenue
86.4
74.0
269.9
211.9
Total service revenue
779.9
773.8
2,488.1
1,923.4
Inventory sales revenue
201.9
246.0
654.5
715.3
Total revenue
$
981.8
$
1,019.8
$
3,142.6
$
2,638.7
2024
2023
(in U.S. dollars in millions,
recast)
September 30
June 30
March 31
December 31
September 30
June 30
March 31
Transactional seller revenue
$
206.6
$
250.7
$
238.6
$
244.7
$
223.2
$
244.6
$
139.2
Transactional buyer revenue
486.9
510.0
525.4
488.7
476.6
482.7
145.3
Marketplace services revenue
86.4
98.4
85.1
75.7
74.0
78.8
59.1
Total service revenue
779.9
859.1
849.1
809.1
773.8
806.1
343.6
Inventory sales revenue
201.9
237.0
215.6
231.8
246.0
300.4
168.8
Total revenue
$
981.8
$
1,096.1
$
1,064.7
$
1,040.9
$
1,019.8
$
1,106.5
$
512.4
For the Third Quarter:
- GTV decreased 7% year-over-year to $3.6 billion with declines
across all sectors due to lower average selling prices.
- Service revenue increased 1% year-over-year to $779.9 million
as a result of a higher average service revenue take rate,
partially offset by lower GTV. Service revenue take rate expanded
150 basis points year-over-year to 21.5% driven by a higher buyer
fee rate structure and growth in marketplace services. Growth in
marketplace services revenue was driven by an increase in
transportation services, primarily in connection with the large
consignment contract in the transportation sector in the United
States.
- Inventory sales revenue decreased 18% year-over-year to $201.9
million due to lower revenues from the commercial construction and
transportation and automotive sectors. Inventory rate declined 230
basis points year-over-year to 4.2%, attributable to weaker
performance in all sectors.
- Net income available to common stockholders increased to $66.9
million, primarily driven by higher operating income, lower
interest expense, partially offset by higher income tax
expense.
- Adjusted EBITDA1 decreased 1% year-over-year driven by lower
GTV, inventory return, and higher operating expenses, partially
offset by service revenue take rate expansion.
__________________________________
1 For information regarding RB Global's
use and definition of this measure, see “Key Operating Metrics” and
“Non-GAAP Measures” sections in this press release.
GTV by Sector
Three months ended September
30,
Nine months ended September
30,
% Change
% Change
(in U.S. dollars in millions, except
percentages)
2024
2023
2024 over 2023
2024
2023
2024 over 2023
Automotive
$
2,031.1
$
2,051.1
(1
)%
$
6,143.7
$
4,484.8
37
%
Commercial construction and
transportation
1,217.6
1,352.5
(10
)%
4,392.1
4,023.7
9
%
Other
373.5
471.8
(21
)%
1,267.8
1,410.1
(10
)%
Total GTV
$
3,622.2
$
3,875.4
(7
)%
$
11,803.6
$
9,918.6
19
%
Total Lots Sold by Sector
Three months ended September
30,
Nine months ended September
30,
% Change
% Change
(in '000's of lots sold, except
percentages)
2024
2023
2024 over 2023
2024
2023
2024 over 2023
Automotive
553.8
555.0
—
%
1,686.1
1,215.9
39
%
Commercial construction and
transportation
103.1
86.6
19
%
330.1
227.6
45
%
Other
140.8
157.8
(11
)%
459.9
435.8
6
%
Total lots sold
797.7
799.4
—
%
2,476.1
1,879.3
32
%
Reconciliation of Operating Expenses
The below table reconciles as reported operating expenses by
line item to adjusted operating expenses to exclude the impact of
adjustments as defined in our Non-GAAP Measures.
For the three months ended
September 30, 2024
Cost of services
Cost of inventory sold
Selling, general and
administrative expenses
Acquisition- related
and
integration costs
Depreciation and
amortization
Total operating
expenses
(in U.S. dollars in millions)
As reported
$
339.7
$
$
177.8
$
6.0
$
111.9
$
828.9
Share-based payments expense
—
—
(9.7
)
—
—
(9.7
)
Acquisition- related and integration
costs
—
—
(6.0
)
—
(6.0
)
Amortization of acquired intangible
assets
—
—
—
—
(67.9
)
(67.9
)
(Loss) gain on disposition of property,
plant and equipment and related costs
—
(0.7
)
—
—
(0.7
)
Prepaid consigned vehicle charges
0.6
—
—
—
—
0.6
Other legal, advisory, restructuring and
non-income tax expenses
—
(0.2
)
—
—
(0.2
)
Executive transition costs
—
—
(0.6
)
—
—
(0.6
)
Remeasurements in connection with business
combinations
—
(1.2
)
—
—
(1.2
)
Adjusted
$
340.3
$
193.5
$
165.4
$
—
$
44.0
$
743.2
For the nine months ended
September 30, 2024
Cost of services
Cost of inventory sold
Selling, general and
administrative expenses
Acquisition- related
and
integration costs
Depreciation and
amortization
Total operating
expenses
(in U.S. dollars in millions)
As reported
$
1,041.5
$
$
584.5
$
22.9
$
329.9
$
2,591.6
Share-based payments expense
—
—
(41.1
)
—
—
(41.1
)
Acquisition- related and integration
costs
—
—
(22.9
)
—
(22.9
)
Amortization of acquired intangible
assets
—
—
—
—
(206.5
)
(206.5
)
(Loss) gain on disposition of property,
plant and equipment and related costs
—
(2.1
)
—
—
(2.1
)
Prepaid consigned vehicle charges
4.0
—
—
—
—
4.0
Other legal, advisory, restructuring and
non-income tax expenses
—
(8.3
)
—
—
(8.3
)
Executive transition costs
—
—
(4.3
)
—
—
(4.3
)
Remeasurements in connection with business
combinations
—
(1.2
)
—
—
(1.2
)
Adjusted
$
1,045.5
$
612.8
$
527.5
$
—
$
123.4
$
2,309.2
Dividend Information
Quarterly Dividend
On November 6, 2024, the Company declared a quarterly cash
dividend of $0.29 per common share, payable on December 18, 2024,
to shareholders of record on November 27, 2024.
Other Company Developments
As disclosed in the Company’s 8-K filed on November 8, 2024,
Jeffrey Smith notified the Company of his decision to retire from
service on the Company’s Board of Directors effective November 6,
2024. The Company would like to thank Mr. Smith for his valuable
contributions to the Board during his tenure as a director. “It has
been my pleasure to work with Jeff during his time as a Board
member of the Company. I greatly appreciated the guidance that Jeff
provided and found his advice to be extremely helpful as we
navigated the closing and then integration of the largest
transaction in the Company’s history, while making sure to keep us
focused on delivering consistent execution for our partners,” said
Mr. Kessler.
Mr. Smith commented: “When we first engaged with the Company, it
was embarking on a major integration and the turnaround of a new
business line. I am extremely proud of the significant progress
that Jim, Eric and the team have made on both fronts – achieving
synergy targets well ahead of plan and substantially improving
service levels at IAA, all while continuing to perform as the
best-in-class operator in the construction equipment market. I look
forward to watching RB Global’s continued growth. I would also like
to thank Bob and the rest of the Board for keeping the Company
focused throughout this transition, and ensuring RB Global has
best-in-class governance. I am confident the Company is on a path
to deliver on its strategy, and I wish the Board and management all
the best.”
“Jeff has been an invaluable contributor to the RB Global Board
and we are sad to see him depart,” said Bob Elton, Chair of RB
Global. “Given the Company’s great progress, Jeff felt this was the
right time for him to step back from the Board. We are grateful for
his valuable contributions and wish him the best going
forward.”
Third Quarter 2024 Earnings Conference Call
RB Global is hosting a conference call to discuss its financial
results for the quarter ended September 30, 2024 at 8:30 AM ET on
November 8, 2024. The replay of the webcast will be available
through November 7, 2025.
Conference call and webcast details are available at the
following link:
https://investor.rbglobal.com
About RB Global
RB Global, Inc. (NYSE: RBA) (TSX: RBA) is a leading, omnichannel
marketplace that provides value-added insights, services and
transaction solutions for buyers and sellers of commercial assets
and vehicles worldwide. Through our auction sites and digital
platform, we have a wide global presence and serve customers across
a variety of asset classes, including automotive, commercial
transportation, construction, government surplus, lifting and
material handling, energy, mining and agriculture. Our marketplace
brands include Ritchie Bros., the world's largest auctioneer of
commercial assets and vehicles offering online bidding, and IAA,
Inc. ("IAA"), a leading global digital marketplace connecting
vehicle buyers and sellers. Our portfolio of brands also includes
Rouse Services ("Rouse"), which provides a complete end-to-end
asset management, data-driven intelligence and performance
benchmarking system; SmartEquip Inc. ("SmartEquip"), an innovative
technology platform that supports customers' management of the
equipment lifecycle and integrates parts procurement with both OEMs
and dealers; and VeriTread LLC ("VeriTread"), an online marketplace
for heavy haul transport.
Forward-looking Statements
This news release contains forward-looking statements and
forward-looking information within the meaning of applicable US and
Canadian securities legislation (collectively, “forward-looking
statements”), including, in particular, statements regarding future
financial and operational results, opportunities, and any other
statements regarding events or developments that RB Global believes
or anticipates will or may occur in the future. Forward-looking
statements are statements that are not historical facts and are
generally, although not always, identified by words such as
“expect”, “plan”, “anticipate”, “project”, “target”, “potential”,
“schedule”, “forecast”, “budget”, “confident”, “estimate”, “intend”
or “believe” and similar expressions or their negative
connotations, or statements that events or conditions “will”,
“would”, “may”, “remain”, “could”, “should” or “might” occur. All
such forward-looking statements are based on the opinions and
estimates of management as of the date such statements are made.
Forward-looking statements necessarily involve assumptions, risks
and uncertainties, certain of which are beyond RB Global’s control,
including risks and uncertainties related to: the effects of the
business combination with IAA, including the Company’s future
financial condition, results of operations, strategy and plans;
potential adverse reactions or changes to business or employee
relationships, including those resulting from the completion of the
merger; the diversion of management time on transaction-related
issues; the response of competitors to the merger; the ultimate
difficulty, timing, cost and results of integrating the operations
of IAA; the fact that operating costs and business disruption may
be greater than expected; the effect of the consummation of the
merger on the trading price of RB Global's common shares; the
ability of RB Global to retain and hire key personnel and
employees; the significant costs associated with the merger; the
outcome of any legal proceedings that have been or could be
instituted against RB Global; the ability of the Company to realize
anticipated synergies in the amount, manner or timeframe expected
or at all; the failure of the Company to achieve expected operating
results in the amount, manner or timeframe expected or at all;
changes in capital markets and the ability of the Company to
generate cash flow and/or finance operations in the manner expected
or to de-lever in the timeframe expected; the failure of RB Global
or the Company to meet financial forecasts and/or key performance
targets including the Company's key operating metrics; the
Company’s ability to commercialize new platform solutions and
offerings; legislative, regulatory and economic developments
affecting the combined business; general economic and market
developments and conditions; the evolving legal, regulatory and tax
regimes under which RB Global operates; unpredictability and
severity of catastrophic events, including, but not limited to,
pandemics, acts of terrorism or outbreak of war or hostilities, as
well as RB Global’s response to any of the aforementioned factors.
Other risks that could cause actual results to differ materially
from those described in the forward-looking statements are included
in RB Global's periodic reports and other filings with the
Securities and Exchange Commission (“SEC”) and/or applicable
Canadian securities regulatory authorities, including the risk
factors identified under Item 1A “Risk Factors” and the section
titled “Summary of Risk Factors” in RB Global’s most recent Annual
Report on Form 10-K for the fiscal year ended December 31, 2023,
and RB Global’s periodic reports and other filings with the SEC,
which are available on the SEC, SEDAR and RB Global websites. The
foregoing list is not exhaustive of the factors that may affect RB
Global’s forward-looking statements. There can be no assurance that
forward-looking statements will prove to be accurate, and actual
results may differ materially from those expressed in, or implied
by, these forward-looking statements. Forward-looking statements
are made as of the date of this news release and RB Global does not
undertake any obligation to update the information contained herein
unless required by applicable securities legislation. For the
reasons set forth above, you should not place undue reliance on
forward-looking statements.
Key Operating Metrics
We regularly review a number of metrics, including the following
key operating metrics, to evaluate our business, measure our
performance, identify trends affecting our business, and make
operating decisions. We believe these key operating metrics are
useful to investors because management uses these metrics to assess
the growth of our business and the effectiveness of our operational
strategies.
We define our key operating metrics as follows:
GTV: Represents total proceeds from
all items sold on our auctions and online marketplaces, third-party
online marketplaces, private brokerage services and other
disposition channels. GTV is not a measure of financial
performance, liquidity, or revenue, and is not presented in the
Company’s consolidated financial statements.
Total service revenue take rate:
Total service revenue divided by total GTV.
Inventory return: Inventory sales
revenue less cost of inventory sold.
Inventory rate: Inventory return
divided by inventory sales revenue.
Total lots sold: A single asset to
be sold or a group of assets bundled for sale as one unit. Low
value assets are sometimes bundled into a single lot, collectively
referred to as “small value lots.”
Historically, we presented GTV from the sale of parts in our
vehicle dismantling business within our automotive sector and
excluded the number of parts sold from our total lots sold metric.
Commencing in the second quarter of 2024, management has begun to
review the number of parts sold in our vehicle dismantling business
within our other sector and as part of our total lots sold
metric.
GTV and Selected Condensed Consolidated Financial
Information
GTV and Condensed Consolidated Income
Statements
(Expressed in millions of U.S. dollars,
except share and per share data)
(Unaudited)
Three months ended September
30,
Nine months ended September
30,
2024
2023
2024
2023
GTV
$
3,622.2
$
3,875.4
$
11,803.6
$
9,918.6
Revenue:
Service revenue
$
779.9
$
773.8
$
2,488.1
$
1,923.4
Inventory sales revenue
201.9
246.0
654.5
715.3
Total revenue
981.8
1,019.8
3,142.6
2,638.7
Operating expenses:
Costs of services
339.7
316.8
1,041.5
680.5
Cost of inventory sold
193.5
230.0
612.8
673.4
Selling, general and administrative
177.8
203.5
584.5
546.2
Acquisition-related and integration
costs
6.0
23.1
22.9
195.6
Depreciation and amortization
111.9
101.1
329.9
246.9
Total operating expenses
828.9
874.5
2,591.6
2,342.6
Gain on disposition of property, plant and
equipment
0.5
0.5
3.2
4.4
Operating income
153.4
145.8
554.2
300.5
Interest expense
(57.2
)
(63.7
)
(181.0
)
(149.6
)
Interest income
6.9
4.5
20.3
15.8
Other income (loss), net
(1.2
)
0.4
(2.2
)
3.0
Foreign exchange gain (loss)
0.3
(0.7
)
(1.6
)
(1.4
)
Income before income taxes
102.2
86.3
389.7
168.3
Income tax expense
26.2
23.1
95.3
46.5
Net income
$
76.0
$
63.2
$
294.4
$
121.8
Net income (loss) attributable to:
Controlling interests
$
76.1
$
63.4
$
294.6
$
122.2
Redeemable non-controlling interests
(0.1
)
(0.2
)
(0.2
)
(0.4
)
Net income
$
76.0
$
63.2
$
294.4
$
121.8
Net income attributable to controlling
interests
$
76.1
$
63.4
$
294.6
$
122.2
Cumulative dividends on Series A Senior
Preferred Shares
(6.7
)
(6.7
)
(20.1
)
(17.6
)
Allocated earnings to Series A Senior
Preferred Shares
(2.5
)
(2.0
)
(9.8
)
(5.5
)
Net income available to common
stockholders
$
66.9
$
54.7
$
264.7
$
99.1
Earnings per share available to common
stockholders:
Basic
$
0.36
$
0.30
$
1.44
$
0.61
Diluted
$
0.36
$
0.30
$
1.43
$
0.61
Weighted average number of shares
outstanding:
Basic
184,304,993
182,148,717
183,752,510
161,724,677
Diluted
185,499,988
183,601,601
184,999,899
162,916,593
Condensed Consolidated Balance
Sheets
(Expressed in millions of U.S. dollars,
except share data)
(Unaudited)
September 30,
2024
December 31,
2023
Assets
Cash and cash equivalents
$
650.7
$
576.2
Restricted cash
139.4
171.7
Trade and other receivables, net of
allowance for credit losses of $8.4 and $6.4, respectively
736.3
731.5
Prepaid consigned vehicle charges
60.7
66.9
Inventory
163.9
166.5
Other current assets
82.4
91.2
Income taxes receivable
25.4
10.0
Total current assets
1,858.8
1,814.0
Property, plant and equipment, net
1,259.5
1,200.9
Operating lease right-of-use assets
1,431.9
1,475.5
Other non-current assets
96.7
85.6
Intangible assets, net
2,736.5
2,914.1
Goodwill
4,537.1
4,537.0
Deferred tax assets
11.5
10.3
Total assets
$
11,932.0
$
12,037.4
Liabilities, Temporary Equity and
Stockholders' Equity
Auction proceeds payable
$
546.7
$
502.5
Trade and other liabilities
740.9
685.8
Current operating lease liabilities
116.4
118.0
Income taxes payable
9.3
8.5
Short-term debt
31.4
13.7
Current portion of long-term debt
4.4
14.2
Total current liabilities
1,449.1
1,342.7
Long-term operating lease liabilities
1,326.2
1,354.3
Long-term debt
2,724.9
3,061.6
Other non-current liabilities
90.6
86.7
Deferred tax liabilities
639.5
682.7
Total liabilities
6,230.3
6,528.0
Temporary equity:
Series A Senior Preferred Shares; shares
authorized, issued and outstanding: 485,000,000 (December 31, 2023:
485,000,000)
482.0
482.0
Redeemable non-controlling interest
8.2
8.4
Stockholders' equity:
Senior preferred and junior preferred
stock, no par value, unlimited shares authorized; issued and
outstanding shares, other than Series A Senior Preferred Shares:
nil (December 31, 2023: nil)
Common stock, no par value, unlimited
shares authorized; shares issued and outstanding: 184,407,685
(December 31, 2023: 182,843,942)
4,140.5
4,054.2
Additional paid-in capital
85.2
88.0
Retained earnings
1,034.4
918.5
Accumulated other comprehensive loss
(51.0
)
(44.0
)
Stockholders' equity
5,209.1
5,016.7
Non-controlling interests
2.4
2.3
Total stockholders' equity
5,211.5
5,019.0
Total liabilities, temporary equity and
stockholders' equity
$
11,932.0
$
12,037.4
Condensed Consolidated Statements of
Cash Flows
(Expressed in millions of U.S.
dollars)
(Unaudited)
Nine months ended September 30,
2024
2023
Cash provided by (used in):
Operating activities:
Net income
$
294.4
$
121.8
Adjustments for items not affecting
cash:
Depreciation and amortization
329.9
246.9
Share-based payments expense
45.2
39.9
Deferred income tax benefit
(44.5
)
(31.4
)
Unrealized foreign exchange (gain)
loss
(0.5
)
5.4
Gain on disposition of property, plant and
equipment
(3.2
)
(4.4
)
Allowance for expected credit losses
5.4
—
Loss on redemption of notes
—
3.3
Gain on remeasurement of investment upon
acquisition
—
(1.4
)
Amortization of debt issuance costs
9.7
7.1
Amortization of right-of-use assets
114.7
72.9
Other, net
16.1
7.0
Net changes in operating assets and
liabilities
(19.7
)
(260.4
)
Net cash provided by operating
activities
747.5
206.7
Investing activities:
Acquisition of IAA, net of cash
acquired
—
(2,755.2
)
Acquisition of VeriTread, net of cash
acquired
—
(24.7
)
Property, plant and equipment
additions
(110.8
)
(153.6
)
Proceeds on disposition of property, plant
and equipment
1.5
31.6
Intangible asset additions
(83.7
)
(83.3
)
Proceeds from repayment of loans
receivable
6.3
2.3
Issuance of loans receivable
(20.8
)
(18.8
)
Other
(2.1
)
(0.6
)
Net cash used in investing activities
(209.6
)
(3,002.3
)
Financing activities:
Issuance of Series A Senior Preferred
Shares and common stock, net of issuance costs
—
496.9
Dividends paid to common stockholders
(152.4
)
(248.7
)
Dividends paid to Series A Senior
Preferred shareholders
(25.6
)
(21.9
)
Proceeds from exercise of options and
share option plans
57.5
15.5
Payment of withholding taxes on issuance
of shares
(14.6
)
(14.6
)
Net increase (decrease) in short-term
debt
16.4
(23.9
)
Proceeds from long-term debt
—
3,175.0
Repayment of long-term debt
(353.3
)
(603.3
)
Payment of debt issue costs
—
(41.7
)
Repayment of finance lease and equipment
financing obligations
(19.7
)
(13.6
)
Proceeds from equipment financing
obligations
2.0
11.1
Payment of contingent consideration
(1.9
)
(2.0
)
Net cash (used in) provided by financing
activities
(491.6
)
2,728.8
Effect of changes in foreign currency
rates on cash, cash equivalents, and restricted cash
(4.1
)
0.1
Net increase (decrease) in cash, cash
equivalents, and restricted cash
42.2
(66.7
)
Cash, cash equivalents, and restricted
cash, beginning of period
747.9
625.9
Cash, cash equivalents, and restricted
cash, end of period
$
790.1
$
559.2
Non-GAAP Measures
This news release references non-GAAP measures. These measures
do not have a standardized meaning and are, therefore, unlikely to
be comparable to similar measures presented by other companies. The
presentation of this financial information, which is not prepared
under any comprehensive set of accounting rules or principles, is
not intended to be considered in isolation of, or as a substitute
for, the financial information prepared and presented in accordance
with US GAAP.
Please refer to the quarterly report on Form 10-Q for the
quarter ended September 30, 2024 for a summary of adjusting items
during the trailing twelve months ended September 30, 2024 and
September 30, 2023.
Adjusted Net Income Available to Common Stockholders and
Diluted Adjusted EPS Available to Common Stockholders
Reconciliation
The Company believes that adjusted net income available to
common stockholders provides useful information about the growth or
decline of the net income available to common stockholders for the
relevant financial period and eliminates the financial impact of
adjusting items the Company does not consider to be part of the
normal operating results. Diluted adjusted EPS available to common
stockholders eliminates the financial impact of adjusting items
from net income available to common stockholders that the Company
does not consider to be part of the normal operating results.
Adjusted net income available to common stockholders is
calculated as net income available to common stockholders,
excluding the effects of adjusting items that we do not consider to
be part of our normal operating results, such as share-based
payments expense, acquisition-related and integration costs,
amortization of acquired intangible assets, executive transition
costs and certain other items. Net income available to common
stockholders is calculated as net income attributable to
controlling interests, less cumulative dividends on Series A Senior
Preferred Shares and allocated earnings to participating
securities.
Diluted adjusted EPS available to common stockholders is
calculated by dividing adjusted net income available to common
stockholders by the weighted average number of dilutive shares
outstanding, except that it is computed based upon the lower of the
two-class method or the if-converted method, which includes the
effects of the assumed conversion of the Series A Senior Preferred
Shares and the effect of shares issuable under the Company’s
stock-based incentive plans, if such effect is dilutive.
The following table reconciles adjusted net income available to
common stockholders and diluted adjusted EPS available to common
stockholders to net income available to common stockholders and
diluted EPS available to common stockholders, which are the most
directly comparable GAAP measures in our consolidated financial
statements:
Three months ended September
30,
Nine months ended September
30,
% Change
% Change
(in U.S. dollars in millions, except
share, per share data, and percentages)
2024
2023
2024 over 2023
2024
2023
2024 over 2023
Net income available to common
stockholders
$
66.9
$
54.7
22
%
$
264.7
$
99.1
167
%
Share-based payments expense
9.7
12.7
(24
)%
41.1
31.7
30
%
Acquisition-related and integration
costs
6.0
23.1
(74
)%
22.9
195.6
(88
)%
Amortization of acquired intangible
assets
67.9
63.9
6
%
206.5
156.5
32
%
Loss (gain) on disposition of property,
plant and equipment and related costs
0.2
0.6
(67
)%
(1.2
)
(0.9
)
33
%
Prepaid consigned vehicles charges
(0.6
)
(7.6
)
(92
)%
(4.0
)
(59.7
)
(93
)%
Loss on redemption of the 2016 and 2021
Notes and certain related interest expense
—
—
—
%
—
3.3
NM
Other legal, advisory, restructuring and
non-income tax expenses
2.2
0.6
267
%
12.1
1.3
831
%
Executive transition costs
0.6
9.8
(94
)%
4.3
9.8
(56
)%
Remeasurements in connection with business
combinations
1.2
—
NM
1.2
(2.9
)
NM
Related tax effects of the above
(21.0
)
(22.2
)
(5
)%
(69.8
)
(74.7
)
(7
)%
Related allocation of the above to
participating securities
(2.3
)
(2.9
)
(21
)%
(7.6
)
(7.6
)
—
%
Adjusted net income available to common
stockholders
$
130.8
$
132.7
(1
)%
$
470.2
$
351.5
34
%
Weighted average number of dilutive shares
outstanding
185,499,988
183,601,601
1
%
184,999,899
162,916,593
14
%
Diluted earnings per share available to
common stockholders
$
0.36
$
0.30
20
%
$
1.43
$
0.61
134
%
Diluted adjusted earnings per share
available to common stockholders
$
0.71
$
0.72
(1
)%
$
2.54
$
2.16
18
%
NM = Not meaningful
Adjusted EBITDA
The Company believes adjusted EBITDA provides useful information
about the growth or decline of its net income when compared between
different financial periods. The Company uses adjusted EBITDA as a
key performance measure because the Company believes it facilitates
operating performance comparisons from period to period and
provides management with the ability to monitor its controllable
incremental revenues and costs.
Adjusted EBITDA is calculated by adding back depreciation and
amortization, interest expense, income tax expense, and subtracting
interest income from net income, as well as adding back the
adjusting items.
The following table reconciles adjusted EBITDA to net income,
which is the most directly comparable GAAP measure in, or
calculated from, our consolidated financial statements:
Three months ended September
30,
Nine months ended September
30,
% Change
% Change
(in U.S. dollars in millions, except
percentages)
2024
2023
2024 over 2023
2024
2023
2024 over 2023
Net income
$
76.0
$
63.2
20
%
$
294.4
$
121.8
142
%
Add: depreciation and amortization
111.9
101.1
11
%
329.9
246.9
34
%
Add: interest expense
57.2
63.7
(10
)%
181.0
149.6
21
%
Less: interest income
(6.9
)
(4.5
)
53
%
(20.3
)
(15.8
)
28
%
Add: income tax expense
26.2
23.1
13
%
95.3
46.5
105
%
EBITDA
264.4
246.6
7
%
880.3
549.0
60
%
Share-based payments expense
9.7
12.7
(24
)%
41.1
31.7
30
%
Acquisition-related and integration
costs
6.0
23.1
(74
)%
22.9
195.6
(88
)%
Loss (gain) on disposition of property,
plant and equipment and related costs
0.2
0.6
(67
)%
(1.2
)
(0.9
)
33
%
Remeasurements in connection with business
combinations
1.2
—
NM
1.2
(1.4
)
NM
Prepaid consigned vehicles charges
(0.6
)
(7.6
)
(92
)%
(4.0
)
(59.7
)
(93
)%
Other legal, advisory, restructuring and
non-income tax expenses
2.2
0.6
267
%
12.1
1.3
831
%
Executive transition costs
0.6
9.8
(94
)%
4.3
9.8
(56
)%
Adjusted EBITDA
$
283.7
$
285.8
(1
)%
$
956.7
$
725.4
32
%
NM = Not meaningful
Adjusted Net Debt and Adjusted Net Debt/Adjusted EBITDA
Reconciliation
The Company believes that comparing adjusted net debt/adjusted
EBITDA on a trailing twelve-month basis for different financial
periods provides useful information about the performance of its
operations as an indicator of the amount of time it would take to
settle both the Company’s short and long-term debt. The Company
does not consider this to be a measure of its liquidity, which is
its ability to settle only short-term obligations, but rather a
measure of how well it funds liquidity. Measures of liquidity are
noted under “Liquidity and Capital Resources” in our Quarterly
Report on Form 10-Q for the quarter ended September 30, 2024.
Adjusted net debt is calculated by subtracting cash and cash
equivalents from short and long-term debt and long-term debt in
escrow. Adjusted net debt/Adjusted EBITDA is calculated by dividing
adjusted net debt by adjusted EBITDA.
The following table reconciles adjusted net debt to debt,
adjusted EBITDA to net income, and adjusted net debt/ adjusted
EBITDA to debt/ net income, respectively, which are the most
directly comparable GAAP measures in, or calculated from, our
consolidated financial statements.
At and for the twelve months
ended September 30,
% Change
(in U.S. dollars in millions, except
percentages)
2024
2023
2024 over 2023
Short-term debt
$
31.4
$
4.7
568
%
Long-term debt
2,729.3
3,122.2
(13
)%
Debt
2,760.7
3,126.9
(12
)%
Less: cash and cash equivalents
(650.7
)
(428.3
)
52
%
Adjusted net debt
2,110.0
2,698.6
(22
)%
Net income
$
378.6
$
167.1
127
%
Add: depreciation and amortization
435.2
271.3
60
%
Add: interest expense
245.2
159.1
54
%
Less: interest income
(26.5
)
(19.5
)
36
%
Add: income tax expense
125.2
60.1
108
%
EBITDA
1,157.7
638.2
81
%
Share-based payments expense
54.8
40.8
34
%
Acquisition-related and integration
costs
43.4
217.8
(80
)%
(Gain) loss on disposition of property,
plant and equipment and related costs
(1.1
)
—
NM
Remeasurements in connection with business
combinations
1.3
(1.4
)
NM
Prepaid consigned vehicles charges
(11.3
)
(59.7
)
(81
)%
Other legal, advisory, restructuring and
non-income tax expenses
12.9
1.5
760
%
Executive transition costs
6.5
9.8
(34
)%
Adjusted EBITDA
$
1,264.2
$
847.0
49
%
Debt/net income
7.3 x
18.7 x
(61
)%
Adjusted net debt/adjusted EBITDA
1.7 x
3.2 x
(47
)%
NM = Not meaningful
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241108840405/en/
Sameer Rathod | Vice President, Investor Relations and Market
Intelligence 1-510-381-7584 | srathod@rbglobal.com
RB Global (NYSE:RBA)
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