Ritchie Bros. reports third quarter 2019 results

Published

VANCOUVER, Nov. 7, 2019 /PRNewswire/ - Ritchie Bros. Auctioneers Incorporated (NYSE & TSX: RBA, the "Company" or "Ritchie Bros.") reported the following results for the three months ended September 30, 2019:

 (All figures are presented in U.S. dollars)

Net income attributable to stockholders for Q3 2019 increased 9% to $25.3 million, diluted earnings per share ("EPS") attributable to stockholders increased 10% to $0.23 from $0.21 per share, while diluted adjusted EPS attributed to stockholders (non-GAAP measure) increased 28% to $0.23 from $0.18 per share compared to the same period in 2018.

Consolidated results:

  • Total revenue in Q3 2019 increased 18% to $289.8 million as compared to Q3 2018
    • Service revenue in Q3 2019 increased 11% to $178.6 million as compared to Q3 2018
    • Inventory sales revenue in Q3 2019 increased 32% to $111.2 million as compared to Q3 2018
  • Total selling, general and administrative expenses ("SG&A") in Q3 2019 increased 6% to $93.7 million as compared to Q3 2018
  • Operating income in Q3 2019 increased 29% to $40.2 million as compared to Q3 2018
  • Cash provided by operating activities was $309.1 million for the first nine months of 2019

Auctions & Marketplaces segment results: 

  • GTV1 in Q3 2019 increased 4% to $1.1 billion and increased 5% when excluding the impact of foreign exchange as compared to Q3 2018
  • A&M total revenue in Q3 2019 increased 20% to $261.3 million as compared to Q3 2018
    • Service revenue in Q3 2019 increased 12% to $150.1 million as compared to Q3 2018
    • Inventory sales revenue in Q3 2019 increased 32% to $111.2 million as compared to Q3 2018

Other Services segment results:

  • Other Services total revenue in Q3 2019 increased 6% to $28.5 million as compared to Q3 2018
  • Ritchie Bros. Financial Services ("RBFS") revenue in Q3 2019 increased 29% to $6.2 million as compared to Q3 2018

Other Company development:

  • On August 8, 2019, the Board of Ritchie Bros. announced that Sharon Driscoll, Chief Financial Officer, and Karl Werner, President, International, have been named interim Co-Chief Executive Officers of the Company, in addition to their current roles effective October 1, 2019.

"Our positive earnings growth in the quarter was driven by solid GTV performance in our US region and global online GTV growth of 37%, highlighting the continued momentum and strength of our multichannel business model. Furthermore, we are pleased with our strong balance sheet and significant growth in our operating cash flow through the third quarter," said Sharon Driscoll interim Co-Chief Executive Officer and Chief Financial Officer.

Karl Werner, interim Co-Chief Executive Officer and President of International, said, "We are encouraged by improvement in the overall equipment supply, with our sales teams doing a good job of securing volume to help offset some pockets of price deflation in the quarter. We remain focused on continued execution of our strategy and delivering exceptional service for our customers."

_______________________________
1 Gross Transaction Value ("GTV") represents total proceeds from all items sold at the Company's live on site auctions and online marketplaces. GTV is not a measure of financial performance, liquidity, or revenue, and is not presented in the Company's consolidated financial statements.
The Company presents both GAAP and non-GAAP measures to provide investors with additional information. Providing these non-GAAP measures along with GAAP measures allows for increased comparability of our ongoing performance from period to period. Non-GAAP financial measures referred to in this newsrelease are labeled as "non-GAAP measure" or designated as such with an asterisk (*). Please see page 9-11 for explanations of why the Company uses thesenon-GAAP measures and, if applicable, the reconciliation to the most comparable GAAP financial measures.

 

Financial Overview(Unaudited)

_______________________________
1 Gross Transaction Value ("GTV") represents total proceeds from all items sold at the Company's live on site auctions and online marketplaces. GTV is not a measure of financial performance, liquidity, or revenue, and is not presented in the Company's consolidated financial statements. Three months ended September 30, Nine months ended September 30,
% Change % Change
The Company presents both GAAP and non-GAAP measures to provide investors with additional information. Providing these non-GAAP measures along with GAAP measures allows for increased comparability of our ongoing performance from period to period. Non-GAAP financial measures referred to in this newsrelease are labeled as "non-GAAP measure" or designated as such with an asterisk (*). Please see page 9-11 for explanations of why the Company uses thesenon-GAAP measures and, if applicable, the reconciliation to the most comparable GAAP financial measures. (in U.S. $000's, except EPS) 2019 2018 2019 over 2018 2019 2018 2019 over 2018
Service revenue:
Commissions $ 90,928 $ 87,548 4% $ 317,674 $ 313,539 1%
Fees 87,649 73,826 19% 267,881 238,197 12%
Total service revenue 178,577 161,374 11% 585,555 551,736 6%
Inventory sales revenue 111,219 83,972 32% 400,892 262,318 53%
Total revenue 289,796 245,346 18% 986,447 814,054 21%
Service revenue as a % of total revenue 61.6% 65.8% (420) bps 59.4% 67.8% (840) bps
Inventory sales revenue as a % of total revenue 38.4% 34.2% 420 bps 40.6% 32.2% 840 bps
Costs of services 36,382 33,053 10% 122,719 112,743 9%
Cost of inventory sold 102,410 74,341 38% 372,703 231,834 61%
Selling, general and administrative expenses 93,691 88,323 6% 286,589 287,052 (0%)
Operating expenses 249,636 214,152 17% 834,729 685,192 22%
Cost of inventory sold as a % of operating expenses 41.0% 34.7% 630 bps 44.6% 33.8% 1080 bps
Operating income 40,160 31,194 29% 151,718 128,862 18%
Operating income margin 13.9% 12.7% 120 bps 15.4% 15.8% (40) bps
Net income attributable to stockholders 25,266 23,138 9% 97,466 85,993 13%
Adjusted net income attributable to stockholders
(non-GAAP measure) 25,266 19,328 31% 97,466 82,183 19%
Diluted earnings per share attributable to stockholders $ 0.23 $ 0.21 10% $ 0.89 $ 0.79 13%
Diluted adjusted EPS attributable to stockholders
(non-GAAP measure) $ 0.23 $ 0.18 28% $ 0.89 $ 0.75 19%
Effective tax rate 21.1% 17.2% 390 bps 22.8% 18.2% 460 bps
Total GTV 1,084,241 1,039,427 4% 3,756,679 3,626,551 4%
Service revenue as a % of total GTV- Rate 16.5% 15.5% 100 bps 15.6% 15.2% 40 bps
Inventory sales revenue as a % of total GTV- Mix 10.3% 8.1% 220 bps 10.7% 7.2% 350 bps

 

Segment Overview

_______________________________
1 Gross Transaction Value ("GTV") represents total proceeds from all items sold at the Company's live on site auctions and online marketplaces. GTV is not a measure of financial performance, liquidity, or revenue, and is not presented in the Company's consolidated financial statements. Three months ended September 30, Nine months ended September 30, (in U.S $000's) Three months ended September 30, 2019 Nine months ended September 30, 2019
% Change % Change A&M Other Consolidated A&M Other Consolidated
The Company presents both GAAP and non-GAAP measures to provide investors with additional information. Providing these non-GAAP measures along with GAAP measures allows for increased comparability of our ongoing performance from period to period. Non-GAAP financial measures referred to in this newsrelease are labeled as "non-GAAP measure" or designated as such with an asterisk (*). Please see page 9-11 for explanations of why the Company uses thesenon-GAAP measures and, if applicable, the reconciliation to the most comparable GAAP financial measures. (in U.S. $000's, except EPS) 2019 2018 2019 over 2018 2019 2018 2019 over 2018 Service revenue $ 150,093 $ 28,484 $ 178,577 $ 494,580 $ 90,975 $ 585,555
Service revenue: Inventory sales revenue 111,219 - 111,219 400,892 - 400,892
Commissions $ 90,928 $ 87,548 4% $ 317,674 $ 313,539 1% Total revenue 261,312 28,484 289,796 895,472 90,975 986,447
Fees 87,649 73,826 19% 267,881 238,197 12% Ancillary and logistical service expenses - 13,285 13,285 - 43,516 43,516
Total service revenue 178,577 161,374 11% 585,555 551,736 6% Other costs of services 21,431 1,666 23,097 74,799 4,404 79,203
Inventory sales revenue 111,219 83,972 32% 400,892 262,318 53% Cost of inventory sold 102,410 - 102,410 372,703 - 372,703
Total revenue 289,796 245,346 18% 986,447 814,054 21% SG&A expenses 88,138 5,553 93,691 268,786 17,803 286,589
Service revenue as a % of total revenue 61.6% 65.8% (420) bps 59.4% 67.8% (840) bps Segment profit $ 49,333 $ 7,980 $ 57,313 $ 179,184 $ 25,252 $ 204,436
Inventory sales revenue as a % of total revenue 38.4% 34.2% 420 bps 40.6% 32.2% 840 bps Total GTV 1,084,241 N/A N/A 3,756,679 N/A N/A
Costs of services 36,382 33,053 10% 122,719 112,743 9% A&M service revenue as a % of total GTV- Rate 13.8% N/A N/A 13.2% N/A N/A
Cost of inventory sold 102,410 74,341 38% 372,703 231,834 61%
Selling, general and administrative expenses 93,691 88,323 6% 286,589 287,052 (0%) (in U.S $000's) Three months ended September 30, 2018 Nine months ended September 30, 2018
Operating expenses 249,636 214,152 17% 834,729 685,192 22% A&M Other Consolidated A&M Other Consolidated
Cost of inventory sold as a % of operating expenses 41.0% 34.7% 630 bps 44.6% 33.8% 1080 bps Service revenue $ 134,604 $ 26,770 $ 161,374 $ 463,076 $ 88,660 $ 551,736
Operating income 40,160 31,194 29% 151,718 128,862 18% Inventory sales revenue 83,972 - 83,972 262,318 - 262,318
Operating income margin 13.9% 12.7% 120 bps 15.4% 15.8% (40) bps Total revenue 218,576 26,770 245,346 725,394 88,660 814,054
Net income attributable to stockholders 25,266 23,138 9% 97,466 85,993 13% Ancillary and logistical service expenses - 11,682 11,682 - 46,242 46,242
Adjusted net income attributable to stockholders Other costs of services 20,059 1,312 21,371 62,888 3,613 66,501
(non-GAAP measure) 25,266 19,328 31% 97,466 82,183 19% Cost of inventory sold 74,341 - 74,341 231,834 - 231,834
Diluted earnings per share attributable to stockholders $ 0.23 $ 0.21 10% $ 0.89 $ 0.79 13% SG&A expenses 83,542 4,781 88,323 272,503 14,549 287,052
Diluted adjusted EPS attributable to stockholders Segment profit $ 40,634 $ 8,995 $ 49,629 $ 158,169 $ 24,256 $ 182,425
(non-GAAP measure) $ 0.23 $ 0.18 28% $ 0.89 $ 0.75 19% Total GTV 1,039,427 N/A N/A 3,626,551 N/A N/A
Effective tax rate 21.1% 17.2% 390 bps 22.8% 18.2% 460 bps A&M service revenue as a % of total GTV- Rate 12.9% N/A N/A 12.8% N/A N/A
Total GTV 1,084,241 1,039,427 4% 3,756,679 3,626,551 4%
Service revenue as a % of total GTV- Rate 16.5% 15.5% 100 bps 15.6% 15.2% 40 bps
Inventory sales revenue as a % of total GTV- Mix 10.3% 8.1% 220 bps 10.7% 7.2% 350 bps

 

Consolidated Performance Overview

GTV increased 4% to $1.1 billion and increased 5% when excluding the impact of foreign exchange. The increase was led by strong growth in online marketplaces of 37%, partially offset by live on site auction volume declining 3%. Despite a strong positive live GTV performance from the US region, overall live was down due to the calendar shift of the larger Moerdijk, Netherlands auction to Q2 2019, lower demand within the energy and the Canadian agriculture sectors, and softer performance at the Dubai, UAE auction from lower demand in the region.

Total revenue increased 18% to $289.8 million with Service revenue growth of 11% and Inventory sales revenue growth of 32%.

Service revenue growth of 11% was driven by commissions revenue increasing 4% and fee revenue increasing 19%. The increase in commissions revenue was in line with higher Service GTV of 2%, and due to strong performance in our US region, where the Company experienced volume growth through both live auctions and weekly featured online businesses, combined with strong growth in the Company's global guarantee rates. The increase in fee revenue was driven primarily by the buyer fees harmonization, fee growth from higher GTV and RBFS fee revenue growth.

Inventory sales revenue increased 32% primarily due to higher inventory volumes at the US live auctions and GovPlanet business.

Costs of services increased 10% to $36.4 million. The increase was primarily in line with growth in services revenue, including  incremental GovPlanet operating costs.

Cost of inventory increased 38% to $102.4 million, in line with the overall increase in inventory sales volume.

Selling, general and administrative ("SG&A") expenses increased 6% to $93.7 million primarily due to higher year-over-year incentive compensation expenses on improved performance and to a lesser extent, on-going incremental GovPlanet costs, partially offset by the positive impact of foreign exchange fluctuations.

Foreign exchange had an unfavourable impact on total revenue and a favourable impact on expenses. These impacts were primarily due to the fluctuations in the Euro and Canadian dollar exchange rates relative to the U.S. dollar.

Net income attributable to stockholders increased 9% to $25.3 million. The increase was primarily due to higher operating income, partially offset by a non-recurring gain on sale of equity accounted investment recorded in Q3 2018 and higher taxes due to an increase in the effective tax rate. Adjusted net income attributed to stockholders (non-GAAP measure) increased 31%, to $25.3 million in Q3 2019 compared to $19.3 million in Q3 2018.

Primarily for the same reasons noted above, diluted EPS attributable to stockholders increased 10% to $0.23 per share compared to $0.21 per share in Q3 2018. Diluted adjusted EPS attributed to stockholders (non-GAAP measure) increased 28% to $0.23 in Q3 2019 compared to $0.18 in Q3 2018.

Dividend InformationQuarterly dividendThe Company declared on November 6, 2019, a quarterly cash dividend of $0.20 per common share payable on December 18, 2019 to shareholders of record on November 27, 2019.

Q3 2019 Earnings Conference CallRitchie Bros. is hosting a conference call to discuss its financial results for the quarter ended September 30, 2019, at 8am Pacific time / 11 am Eastern time / 4pm GMT on November 8, 2019.  The replay of the webcast will be available through December 8, 2019.

Conference call and webcast details are available at the following link:https://investor.ritchiebros.com

About Ritchie Bros.Established in 1958, Ritchie Bros. (NYSE and TSX: RBA) is a global asset management and disposition company, offering customers end-to-end solutions for buying and selling used heavy equipment, trucks and other assets. Operating in a number of sectors, including construction, transportation, agriculture, energy, oil and gas, mining, and forestry, the company's selling channels include: Ritchie Bros. Auctioneers, the world's largest industrial auctioneer offers live auction events with online bidding; IronPlanet, an online marketplace with featured weekly auctions and providing the exclusive IronClad Assurance® equipment condition certification; Marketplace-E, a controlled marketplace offering multiple price and timing options; Mascus, a leading European online equipment listing service; and Ritchie Bros. Private Treaty, offering privately negotiated sales. The company's suite of multichannel sales solutions also includes RB Asset Solutions, a complete end-to-end asset management and disposition system. Ritchie Bros. also offers sector-specific solutions including GovPlanet, TruckPlanet, and Kruse Energy Auctioneers, plus equipment financing and leasing through Ritchie Bros. Financial Services. For more information about Ritchie Bros., visit RitchieBros.com.

Forward-looking StatementsThis news release contains forward-looking statements and forward-looking information within the meaning of applicable U.S. and Canadian securities legislation (collectively, "forward-looking statements"), including, in particular, statements regarding future financial and operational results, including Q4 performance, growth prospects and payment of dividends. 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", "estimate", "intend" or "believe" and similar expressions or their negative connotations, or statements that events or conditions "will", "would", "may", "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 the Company's control, including the numerous factors that influence the supply of and demand for used equipment; economic and other conditions in local, regional and global sectors; the Company's ability to successfully integrate IronPlanet, and to receive the anticipated benefits of the IronPlanet acquisition; and the risks and uncertainties set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2018 and the Company's Form 10-Q for the quarter ended September 30, 2019, which are available on the SEC, SEDAR, and Company websites. The foregoing list is not exhaustive of the factors that may affect the Company'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 the Company 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.

GTV and Selected Condensed Consolidated Financial Information

_______________________________ GTV and Condensed Consolidated Income Statements – Third Quarter
1 Gross Transaction Value ("GTV") represents total proceeds from all items sold at the Company's live on site auctions and online marketplaces. GTV is not a measure of financial performance, liquidity, or revenue, and is not presented in the Company's consolidated financial statements. Three months ended September 30, Nine months ended September 30, (in U.S $000's) Three months ended September 30, 2019 Nine months ended September 30, 2019 (Expressed in thousands of United States dollars, except share and per share amounts)
% Change % Change A&M Other Consolidated A&M Other Consolidated (Unaudited)
The Company presents both GAAP and non-GAAP measures to provide investors with additional information. Providing these non-GAAP measures along with GAAP measures allows for increased comparability of our ongoing performance from period to period. Non-GAAP financial measures referred to in this newsrelease are labeled as "non-GAAP measure" or designated as such with an asterisk (*). Please see page 9-11 for explanations of why the Company uses thesenon-GAAP measures and, if applicable, the reconciliation to the most comparable GAAP financial measures. (in U.S. $000's, except EPS) 2019 2018 2019 over 2018 2019 2018 2019 over 2018 Service revenue $ 150,093 $ 28,484 $ 178,577 $ 494,580 $ 90,975 $ 585,555
Service revenue: Inventory sales revenue 111,219 - 111,219 400,892 - 400,892 Three months ended September 30, 2019 Nine months ended September 30, 2019
Commissions $ 90,928 $ 87,548 4% $ 317,674 $ 313,539 1% Total revenue 261,312 28,484 289,796 895,472 90,975 986,447 % Change % Change
Fees 87,649 73,826 19% 267,881 238,197 12% Ancillary and logistical service expenses - 13,285 13,285 - 43,516 43,516 2019 2018 2019 over 2018 2019 2018 2019 over2018
Total service revenue 178,577 161,374 11% 585,555 551,736 6% Other costs of services 21,431 1,666 23,097 74,799 4,404 79,203 GTV $ 1,084,241 $ 1,039,427 4% $ 3,756,679 $ 3,626,551 4%
Inventory sales revenue 111,219 83,972 32% 400,892 262,318 53% Cost of inventory sold 102,410 - 102,410 372,703 - 372,703 Revenue:
Total revenue 289,796 245,346 18% 986,447 814,054 21% SG&A expenses 88,138 5,553 93,691 268,786 17,803 286,589 Service revenue $ 178,577 $ 161,374 11% $ 585,555 $ 551,736 6%
Service revenue as a % of total revenue 61.6% 65.8% (420) bps 59.4% 67.8% (840) bps Segment profit $ 49,333 $ 7,980 $ 57,313 $ 179,184 $ 25,252 $ 204,436 Revenue from inventory sales 111,219 83,972 32% 400,892 262,318 53%
Inventory sales revenue as a % of total revenue 38.4% 34.2% 420 bps 40.6% 32.2% 840 bps Total GTV 1,084,241 N/A N/A 3,756,679 N/A N/A Total revenue 289,796 245,346 18% 986,447 814,054 21%
Costs of services 36,382 33,053 10% 122,719 112,743 9% A&M service revenue as a % of total GTV- Rate 13.8% N/A N/A 13.2% N/A N/A Operating expenses:
Cost of inventory sold 102,410 74,341 38% 372,703 231,834 61% Costs of services 36,382 33,053 10% 122,719 112,743 9%
Selling, general and administrative expenses 93,691 88,323 6% 286,589 287,052 (0%) (in U.S $000's) Three months ended September 30, 2018 Nine months ended September 30, 2018 Cost of inventory sold 102,410 74,341 38% 372,703 231,834 61%
Operating expenses 249,636 214,152 17% 834,729 685,192 22% A&M Other Consolidated A&M Other Consolidated Selling, general and administration expenses 93,691 88,323 6% 286,589 287,052 0%
Cost of inventory sold as a % of operating expenses 41.0% 34.7% 630 bps 44.6% 33.8% 1080 bps Service revenue $ 134,604 $ 26,770 $ 161,374 $ 463,076 $ 88,660 $ 551,736 Acquisition-related costs 45 2,007 (98)% 752 5,039 (85)%
Operating income 40,160 31,194 29% 151,718 128,862 18% Inventory sales revenue 83,972 - 83,972 262,318 - 262,318 Depreciation and amortization expenses 17,692 16,723 6% 51,919 49,451 5%
Operating income margin 13.9% 12.7% 120 bps 15.4% 15.8% (40) bps Total revenue 218,576 26,770 245,346 725,394 88,660 814,054 Gain on disposition of property, plant and equipment (821) (342) 140% (1,071) (958) 12%
Net income attributable to stockholders 25,266 23,138 9% 97,466 85,993 13% Ancillary and logistical service expenses - 11,682 11,682 - 46,242 46,242 Foreign exchange loss 237 47 404% 1,118 31 3506%
Adjusted net income attributable to stockholders Other costs of services 20,059 1,312 21,371 62,888 3,613 66,501 Total operating expenses 249,636 214,152 17% 834,729 685,192 22%
(non-GAAP measure) 25,266 19,328 31% 97,466 82,183 19% Cost of inventory sold 74,341 - 74,341 231,834 - 231,834 Operating income 40,160 31,194 29% 151,718 128,862 18%
Diluted earnings per share attributable to stockholders $ 0.23 $ 0.21 10% $ 0.89 $ 0.79 13% SG&A expenses 83,542 4,781 88,323 272,503 14,549 287,052 Interest expense (10,090) (10,473) (4)% (31,023) (32,720) (5)%
Diluted adjusted EPS attributable to stockholders Segment profit $ 40,634 $ 8,995 $ 49,629 $ 158,169 $ 24,256 $ 182,425 Other, net 1,962 7,182 (73)% 5,680 8,995 (37)%
(non-GAAP measure) $ 0.23 $ 0.18 28% $ 0.89 $ 0.75 19% Total GTV 1,039,427 N/A N/A 3,626,551 N/A N/A Income before income taxes 32,032 27,903 15% 126,375 105,137 20%
Effective tax rate 21.1% 17.2% 390 bps 22.8% 18.2% 460 bps A&M service revenue as a % of total GTV- Rate 12.9% N/A N/A 12.8% N/A N/A Income tax expense 6,760 4,791 41% 28,800 19,091 51%
Net income $ 25,272 $ 23,112 9% $ 97,575 $ 86,046 13%
Total GTV 1,084,241 1,039,427 4% 3,756,679 3,626,551 4% Net income (loss) attributable to:
Service revenue as a % of total GTV- Rate 16.5% 15.5% 100 bps 15.6% 15.2% 40 bps Stockholders $ 25,266 $ 23,138 9% $ 97,466 $ 85,993 13%
Inventory sales revenue as a % of total GTV- Mix 10.3% 8.1% 220 bps 10.7% 7.2% 350 bps Non-controlling interests 6 (26) (123)% 109 53 106%
$ 25,272 $ 23,112 9% $ 97,575 $ 86,046 13%
Earnings per share attributable
to stockholders:
Basic $ 0.23 $ 0.21 10% $ 0.90 $ 0.80 13%
Diluted $ 0.23 $ 0.21 10% $ 0.89 $ 0.79 13%
Weighted average number of share outstanding:
Basic 108,003,390 108,365,427 0% 108,453,525 107,811,391 1%
Diluted 109,381,173 109,887,194 0% 109,634,195 109,133,378 0%

 

Condensed Consolidated Balance Sheets(Expressed in thousands of United States dollars, except share data)(Unaudited)

_______________________________ GTV and Condensed Consolidated Income Statements – Third Quarter
1 Gross Transaction Value ("GTV") represents total proceeds from all items sold at the Company's live on site auctions and online marketplaces. GTV is not a measure of financial performance, liquidity, or revenue, and is not presented in the Company's consolidated financial statements. Three months ended September 30, Nine months ended September 30, (in U.S $000's) Three months ended September 30, 2019 Nine months ended September 30, 2019 (Expressed in thousands of United States dollars, except share and per share amounts) September 30, December 31,
% Change % Change A&M Other Consolidated A&M Other Consolidated (Unaudited) 2019 2018
The Company presents both GAAP and non-GAAP measures to provide investors with additional information. Providing these non-GAAP measures along with GAAP measures allows for increased comparability of our ongoing performance from period to period. Non-GAAP financial measures referred to in this newsrelease are labeled as "non-GAAP measure" or designated as such with an asterisk (*). Please see page 9-11 for explanations of why the Company uses thesenon-GAAP measures and, if applicable, the reconciliation to the most comparable GAAP financial measures. (in U.S. $000's, except EPS) 2019 2018 2019 over 2018 2019 2018 2019 over 2018 Service revenue $ 150,093 $ 28,484 $ 178,577 $ 494,580 $ 90,975 $ 585,555 Assets
Service revenue: Inventory sales revenue 111,219 - 111,219 400,892 - 400,892 Three months ended September 30, 2019 Nine months ended September 30, 2019 Cash and cash equivalents $ 309,555 $ 237,744
Commissions $ 90,928 $ 87,548 4% $ 317,674 $ 313,539 1% Total revenue 261,312 28,484 289,796 895,472 90,975 986,447 % Change % Change Restricted cash 141,832 67,823
Fees 87,649 73,826 19% 267,881 238,197 12% Ancillary and logistical service expenses - 13,285 13,285 - 43,516 43,516 2019 2018 2019 over 2018 2019 2018 2019 over2018 Trade and other receivables 249,925 129,257
Total service revenue 178,577 161,374 11% 585,555 551,736 6% Other costs of services 21,431 1,666 23,097 74,799 4,404 79,203 GTV $ 1,084,241 $ 1,039,427 4% $ 3,756,679 $ 3,626,551 4% Inventory 53,092 113,294
Inventory sales revenue 111,219 83,972 32% 400,892 262,318 53% Cost of inventory sold 102,410 - 102,410 372,703 - 372,703 Revenue: Other current assets 44,364 49,055
Total revenue 289,796 245,346 18% 986,447 814,054 21% SG&A expenses 88,138 5,553 93,691 268,786 17,803 286,589 Service revenue $ 178,577 $ 161,374 11% $ 585,555 $ 551,736 6% Income taxes receivable 10,488 6,365
Service revenue as a % of total revenue 61.6% 65.8% (420) bps 59.4% 67.8% (840) bps Segment profit $ 49,333 $ 7,980 $ 57,313 $ 179,184 $ 25,252 $ 204,436 Revenue from inventory sales 111,219 83,972 32% 400,892 262,318 53% Total current assets 809,256 603,538
Inventory sales revenue as a % of total revenue 38.4% 34.2% 420 bps 40.6% 32.2% 840 bps Total GTV 1,084,241 N/A N/A 3,756,679 N/A N/A Total revenue 289,796 245,346 18% 986,447 814,054 21%
Costs of services 36,382 33,053 10% 122,719 112,743 9% A&M service revenue as a % of total GTV- Rate 13.8% N/A N/A 13.2% N/A N/A Operating expenses: Property, plant and equipment 476,776 486,599
Cost of inventory sold 102,410 74,341 38% 372,703 231,834 61% Costs of services 36,382 33,053 10% 122,719 112,743 9% Other non-current assets 148,375 29,395
Selling, general and administrative expenses 93,691 88,323 6% 286,589 287,052 (0%) (in U.S $000's) Three months ended September 30, 2018 Nine months ended September 30, 2018 Cost of inventory sold 102,410 74,341 38% 372,703 231,834 61% Intangible assets 234,249 245,622
Operating expenses 249,636 214,152 17% 834,729 685,192 22% A&M Other Consolidated A&M Other Consolidated Selling, general and administration expenses 93,691 88,323 6% 286,589 287,052 0% Goodwill 671,378 671,594
Cost of inventory sold as a % of operating expenses 41.0% 34.7% 630 bps 44.6% 33.8% 1080 bps Service revenue $ 134,604 $ 26,770 $ 161,374 $ 463,076 $ 88,660 $ 551,736 Acquisition-related costs 45 2,007 (98)% 752 5,039 (85)% Deferred tax assets 17,797 15,648
Operating income 40,160 31,194 29% 151,718 128,862 18% Inventory sales revenue 83,972 - 83,972 262,318 - 262,318 Depreciation and amortization expenses 17,692 16,723 6% 51,919 49,451 5% Total assets $ 2,357,831 $ 2,052,396
Operating income margin 13.9% 12.7% 120 bps 15.4% 15.8% (40) bps Total revenue 218,576 26,770 245,346 725,394 88,660 814,054 Gain on disposition of property, plant and equipment (821) (342) 140% (1,071) (958) 12%
Net income attributable to stockholders 25,266 23,138 9% 97,466 85,993 13% Ancillary and logistical service expenses - 11,682 11,682 - 46,242 46,242 Foreign exchange loss 237 47 404% 1,118 31 3506% Liabilities and Equity
Adjusted net income attributable to stockholders Other costs of services 20,059 1,312 21,371 62,888 3,613 66,501 Total operating expenses 249,636 214,152 17% 834,729 685,192 22% Auction proceeds payable $ 453,278 $ 203,503
(non-GAAP measure) 25,266 19,328 31% 97,466 82,183 19% Cost of inventory sold 74,341 - 74,341 231,834 - 231,834 Operating income 40,160 31,194 29% 151,718 128,862 18% Trade and other payables 166,796 201,255
Diluted earnings per share attributable to stockholders $ 0.23 $ 0.21 10% $ 0.89 $ 0.79 13% SG&A expenses 83,542 4,781 88,323 272,503 14,549 287,052 Interest expense (10,090) (10,473) (4)% (31,023) (32,720) (5)% Income taxes payable 16,053 2,312
Diluted adjusted EPS attributable to stockholders Segment profit $ 40,634 $ 8,995 $ 49,629 $ 158,169 $ 24,256 $ 182,425 Other, net 1,962 7,182 (73)% 5,680 8,995 (37)% Short-term debt 5,805 19,896
(non-GAAP measure) $ 0.23 $ 0.18 28% $ 0.89 $ 0.75 19% Total GTV 1,039,427 N/A N/A 3,626,551 N/A N/A Income before income taxes 32,032 27,903 15% 126,375 105,137 20% Current portion of long-term debt 18,027 13,126
Effective tax rate 21.1% 17.2% 390 bps 22.8% 18.2% 460 bps A&M service revenue as a % of total GTV- Rate 12.9% N/A N/A 12.8% N/A N/A Income tax expense 6,760 4,791 41% 28,800 19,091 51% Total current liabilities 659,959 440,092
Net income $ 25,272 $ 23,112 9% $ 97,575 $ 86,046 13%
Total GTV 1,084,241 1,039,427 4% 3,756,679 3,626,551 4% Net income (loss) attributable to: Long-term debt 671,301 698,172
Service revenue as a % of total GTV- Rate 16.5% 15.5% 100 bps 15.6% 15.2% 40 bps Stockholders $ 25,266 $ 23,138 9% $ 97,466 $ 85,993 13% Other non-current liabilities 150,400 41,980
Inventory sales revenue as a % of total GTV- Mix 10.3% 8.1% 220 bps 10.7% 7.2% 350 bps Non-controlling interests 6 (26) (123)% 109 53 106% Deferred tax liabilities 32,859 35,519
$ 25,272 $ 23,112 9% $ 97,575 $ 86,046 13% Total liabilities 1,514,519 1,215,763
Earnings per share attributable
to stockholders: Commitments
Basic $ 0.23 $ 0.21 10% $ 0.90 $ 0.80 13% Contingencies
Diluted $ 0.23 $ 0.21 10% $ 0.89 $ 0.79 13% Contingently redeemable performance share units - 923
Weighted average number of share outstanding: Stockholders' equity:
Basic 108,003,390 108,365,427 0% 108,453,525 107,811,391 1% Share capital:
Diluted 109,381,173 109,887,194 0% 109,634,195 109,133,378 0% Common stock; no par value, unlimited shares
authorized, issued and outstanding shares:
108,210,335 (December 31, 2018: 108,682,030) 159,773 181,780
Additional paid-in capital 59,289 56,885
Retained earnings 684,231 648,255
Accumulated other comprehensive loss (65,129) (56,277)
Stockholders' equity 838,164 830,643
Non-controlling interest 5,148 5,067
Total stockholders' equity 843,312 835,710
Total liabilities and equity $ 2,357,831 $ 2,052,396

 

Condensed Consolidated Statements of Cash Flows(Expressed in thousands of United States dollars)(Unaudited)

_______________________________ GTV and Condensed Consolidated Income Statements – Third Quarter
1 Gross Transaction Value ("GTV") represents total proceeds from all items sold at the Company's live on site auctions and online marketplaces. GTV is not a measure of financial performance, liquidity, or revenue, and is not presented in the Company's consolidated financial statements. Three months ended September 30, Nine months ended September 30, (in U.S $000's) Three months ended September 30, 2019 Nine months ended September 30, 2019 (Expressed in thousands of United States dollars, except share and per share amounts) September 30, December 31, Nine months ended September 30, 2019 2018
% Change % Change A&M Other Consolidated A&M Other Consolidated (Unaudited) 2019 2018 Cash provided by (used in):
The Company presents both GAAP and non-GAAP measures to provide investors with additional information. Providing these non-GAAP measures along with GAAP measures allows for increased comparability of our ongoing performance from period to period. Non-GAAP financial measures referred to in this newsrelease are labeled as "non-GAAP measure" or designated as such with an asterisk (*). Please see page 9-11 for explanations of why the Company uses thesenon-GAAP measures and, if applicable, the reconciliation to the most comparable GAAP financial measures. (in U.S. $000's, except EPS) 2019 2018 2019 over 2018 2019 2018 2019 over 2018 Service revenue $ 150,093 $ 28,484 $ 178,577 $ 494,580 $ 90,975 $ 585,555 Assets Operating activities:
Service revenue: Inventory sales revenue 111,219 - 111,219 400,892 - 400,892 Three months ended September 30, 2019 Nine months ended September 30, 2019 Cash and cash equivalents $ 309,555 $ 237,744 Net income $ 97,575 $ 86,046
Commissions $ 90,928 $ 87,548 4% $ 317,674 $ 313,539 1% Total revenue 261,312 28,484 289,796 895,472 90,975 986,447 % Change % Change Restricted cash 141,832 67,823 Adjustments for items not affecting cash:
Fees 87,649 73,826 19% 267,881 238,197 12% Ancillary and logistical service expenses - 13,285 13,285 - 43,516 43,516 2019 2018 2019 over 2018 2019 2018 2019 over2018 Trade and other receivables 249,925 129,257 Depreciation and amortization expenses 51,919 49,451
Total service revenue 178,577 161,374 11% 585,555 551,736 6% Other costs of services 21,431 1,666 23,097 74,799 4,404 79,203 GTV $ 1,084,241 $ 1,039,427 4% $ 3,756,679 $ 3,626,551 4% Inventory 53,092 113,294 Stock option compensation expense 4,852 6,711
Inventory sales revenue 111,219 83,972 32% 400,892 262,318 53% Cost of inventory sold 102,410 - 102,410 372,703 - 372,703 Revenue: Other current assets 44,364 49,055 Equity-classified PSU expense 8,754 8,978
Total revenue 289,796 245,346 18% 986,447 814,054 21% SG&A expenses 88,138 5,553 93,691 268,786 17,803 286,589 Service revenue $ 178,577 $ 161,374 11% $ 585,555 $ 551,736 6% Income taxes receivable 10,488 6,365 Deferred income tax recovery (4,760) (3,774)
Service revenue as a % of total revenue 61.6% 65.8% (420) bps 59.4% 67.8% (840) bps Segment profit $ 49,333 $ 7,980 $ 57,313 $ 179,184 $ 25,252 $ 204,436 Revenue from inventory sales 111,219 83,972 32% 400,892 262,318 53% Total current assets 809,256 603,538 Unrealized foreign exchange (gain) loss (129) 501
Inventory sales revenue as a % of total revenue 38.4% 34.2% 420 bps 40.6% 32.2% 840 bps Total GTV 1,084,241 N/A N/A 3,756,679 N/A N/A Total revenue 289,796 245,346 18% 986,447 814,054 21% Gain on disposition of property, plant and equipment (1,071) (958)
Costs of services 36,382 33,053 10% 122,719 112,743 9% A&M service revenue as a % of total GTV- Rate 13.8% N/A N/A 13.2% N/A N/A Operating expenses: Property, plant and equipment 476,776 486,599 Amortization of debt issuance costs 2,701 3,032
Cost of inventory sold 102,410 74,341 38% 372,703 231,834 61% Costs of services 36,382 33,053 10% 122,719 112,743 9% Other non-current assets 148,375 29,395 Gain on disposition of equity investment - (4,935)
Selling, general and administrative expenses 93,691 88,323 6% 286,589 287,052 (0%) (in U.S $000's) Three months ended September 30, 2018 Nine months ended September 30, 2018 Cost of inventory sold 102,410 74,341 38% 372,703 231,834 61% Intangible assets 234,249 245,622 Other, net 9,892 (3,678)
Operating expenses 249,636 214,152 17% 834,729 685,192 22% A&M Other Consolidated A&M Other Consolidated Selling, general and administration expenses 93,691 88,323 6% 286,589 287,052 0% Goodwill 671,378 671,594 Net changes in operating assets and liabilities 139,372 (44,227)
Cost of inventory sold as a % of operating expenses 41.0% 34.7% 630 bps 44.6% 33.8% 1080 bps Service revenue $ 134,604 $ 26,770 $ 161,374 $ 463,076 $ 88,660 $ 551,736 Acquisition-related costs 45 2,007 (98)% 752 5,039 (85)% Deferred tax assets 17,797 15,648 Net cash provided by operating activities 309,105 97,147
Operating income 40,160 31,194 29% 151,718 128,862 18% Inventory sales revenue 83,972 - 83,972 262,318 - 262,318 Depreciation and amortization expenses 17,692 16,723 6% 51,919 49,451 5% Total assets $ 2,357,831 $ 2,052,396 Investing activities:
Operating income margin 13.9% 12.7% 120 bps 15.4% 15.8% (40) bps Total revenue 218,576 26,770 245,346 725,394 88,660 814,054 Gain on disposition of property, plant and equipment (821) (342) 140% (1,071) (958) 12% Property, plant and equipment additions (6,915) (13,394)
Net income attributable to stockholders 25,266 23,138 9% 97,466 85,993 13% Ancillary and logistical service expenses - 11,682 11,682 - 46,242 46,242 Foreign exchange loss 237 47 404% 1,118 31 3506% Liabilities and Equity Intangible asset additions (18,377) (19,410)
Adjusted net income attributable to stockholders Other costs of services 20,059 1,312 21,371 62,888 3,613 66,501 Total operating expenses 249,636 214,152 17% 834,729 685,192 22% Auction proceeds payable $ 453,278 $ 203,503 Proceeds on disposition of property, plant and equipment 5,610 2,524
(non-GAAP measure) 25,266 19,328 31% 97,466 82,183 19% Cost of inventory sold 74,341 - 74,341 231,834 - 231,834 Operating income 40,160 31,194 29% 151,718 128,862 18% Trade and other payables 166,796 201,255 Proceeds on disposal of equity investment - 6,147
Diluted earnings per share attributable to stockholders $ 0.23 $ 0.21 10% $ 0.89 $ 0.79 13% SG&A expenses 83,542 4,781 88,323 272,503 14,549 287,052 Interest expense (10,090) (10,473) (4)% (31,023) (32,720) (5)% Income taxes payable 16,053 2,312 Other, net (1,000) (4,674)
Diluted adjusted EPS attributable to stockholders Segment profit $ 40,634 $ 8,995 $ 49,629 $ 158,169 $ 24,256 $ 182,425 Other, net 1,962 7,182 (73)% 5,680 8,995 (37)% Short-term debt 5,805 19,896 Net cash used in investing activities (20,682) (28,807)
(non-GAAP measure) $ 0.23 $ 0.18 28% $ 0.89 $ 0.75 19% Total GTV 1,039,427 N/A N/A 3,626,551 N/A N/A Income before income taxes 32,032 27,903 15% 126,375 105,137 20% Current portion of long-term debt 18,027 13,126 Financing activities:
Effective tax rate 21.1% 17.2% 390 bps 22.8% 18.2% 460 bps A&M service revenue as a % of total GTV- Rate 12.9% N/A N/A 12.8% N/A N/A Income tax expense 6,760 4,791 41% 28,800 19,091 51% Total current liabilities 659,959 440,092 Share repurchase (42,012) -
Net income $ 25,272 $ 23,112 9% $ 97,575 $ 86,046 13% Dividends paid to stockholders (60,791) (56,116)
Total GTV 1,084,241 1,039,427 4% 3,756,679 3,626,551 4% Net income (loss) attributable to: Long-term debt 671,301 698,172 Issuances of share capital 12,440 27,072
Service revenue as a % of total GTV- Rate 16.5% 15.5% 100 bps 15.6% 15.2% 40 bps Stockholders $ 25,266 $ 23,138 9% $ 97,466 $ 85,993 13% Other non-current liabilities 150,400 41,980 Payment of withholding taxes on issuance of shares (5,260) (3,901)
Inventory sales revenue as a % of total GTV- Mix 10.3% 8.1% 220 bps 10.7% 7.2% 350 bps Non-controlling interests 6 (26) (123)% 109 53 106% Deferred tax liabilities 32,859 35,519 Proceeds from short-term debt 10,519 6,949
$ 25,272 $ 23,112 9% $ 97,575 $ 86,046 13% Total liabilities 1,514,519 1,215,763 Repayment of short-term debt (24,979) (3,372)
Earnings per share attributable Repayment of long-term debt (29,022) (58,825)
to stockholders: Commitments Repayment of finance lease obligations (4,848) (2,827)
Basic $ 0.23 $ 0.21 10% $ 0.90 $ 0.80 13% Contingencies Other, net - (1,176)
Diluted $ 0.23 $ 0.21 10% $ 0.89 $ 0.79 13% Contingently redeemable performance share units - 923 Net cash used in financing activities (143,953) (92,196)
Weighted average number of share outstanding: Stockholders' equity: Effect of changes in foreign currency rates on
Basic 108,003,390 108,365,427 0% 108,453,525 107,811,391 1% Share capital: cash, cash equivalents, and restricted cash 1,350 (3,215)
Diluted 109,381,173 109,887,194 0% 109,634,195 109,133,378 0% Common stock; no par value, unlimited shares Increase (decrease) 145,820 (27,071)
authorized, issued and outstanding shares: Beginning of period 305,567 331,116
108,210,335 (December 31, 2018: 108,682,030) 159,773 181,780 Cash, cash equivalents, and restricted cash, end of period $ 451,387 $ 304,045
Additional paid-in capital 59,289 56,885
Retained earnings 684,231 648,255
Accumulated other comprehensive loss (65,129) (56,277)
Stockholders' equity 838,164 830,643
Non-controlling interest 5,148 5,067
Total stockholders' equity 843,312 835,710
Total liabilities and equity $ 2,357,831 $ 2,052,396

 

Selected Data(Unaudited)

_______________________________ GTV and Condensed Consolidated Income Statements – Third Quarter Industrial live on site auction metrics
1 Gross Transaction Value ("GTV") represents total proceeds from all items sold at the Company's live on site auctions and online marketplaces. GTV is not a measure of financial performance, liquidity, or revenue, and is not presented in the Company's consolidated financial statements. Three months ended September 30, Nine months ended September 30, (in U.S $000's) Three months ended September 30, 2019 Nine months ended September 30, 2019 (Expressed in thousands of United States dollars, except share and per share amounts) September 30, December 31, Nine months ended September 30, 2019 2018
% Change % Change A&M Other Consolidated A&M Other Consolidated (Unaudited) 2019 2018 Cash provided by (used in): Three months ended September 30, Nine months ended September 30,
The Company presents both GAAP and non-GAAP measures to provide investors with additional information. Providing these non-GAAP measures along with GAAP measures allows for increased comparability of our ongoing performance from period to period. Non-GAAP financial measures referred to in this newsrelease are labeled as "non-GAAP measure" or designated as such with an asterisk (*). Please see page 9-11 for explanations of why the Company uses thesenon-GAAP measures and, if applicable, the reconciliation to the most comparable GAAP financial measures. (in U.S. $000's, except EPS) 2019 2018 2019 over 2018 2019 2018 2019 over 2018 Service revenue $ 150,093 $ 28,484 $ 178,577 $ 494,580 $ 90,975 $ 585,555 Assets Operating activities: % Change % Change
Service revenue: Inventory sales revenue 111,219 - 111,219 400,892 - 400,892 Three months ended September 30, 2019 Nine months ended September 30, 2019 Cash and cash equivalents $ 309,555 $ 237,744 Net income $ 97,575 $ 86,046 2019 2018 2019 over 2018 2019 2018 2019 over 2018
Commissions $ 90,928 $ 87,548 4% $ 317,674 $ 313,539 1% Total revenue 261,312 28,484 289,796 895,472 90,975 986,447 % Change % Change Restricted cash 141,832 67,823 Adjustments for items not affecting cash: Number of auctions 46 45 2% 140 130 8%
Fees 87,649 73,826 19% 267,881 238,197 12% Ancillary and logistical service expenses - 13,285 13,285 - 43,516 43,516 2019 2018 2019 over 2018 2019 2018 2019 over2018 Trade and other receivables 249,925 129,257 Depreciation and amortization expenses 51,919 49,451 Bidder registrations 165,500 123,000 35% 508,750 383,500 33%
Total service revenue 178,577 161,374 11% 585,555 551,736 6% Other costs of services 21,431 1,666 23,097 74,799 4,404 79,203 GTV $ 1,084,241 $ 1,039,427 4% $ 3,756,679 $ 3,626,551 4% Inventory 53,092 113,294 Stock option compensation expense 4,852 6,711 Consignors 14,000 13,600 3% 43,000 39,050 10%
Inventory sales revenue 111,219 83,972 32% 400,892 262,318 53% Cost of inventory sold 102,410 - 102,410 372,703 - 372,703 Revenue: Other current assets 44,364 49,055 Equity-classified PSU expense 8,754 8,978 Buyers 34,800 31,400 11% 109,050 96,750 13%
Total revenue 289,796 245,346 18% 986,447 814,054 21% SG&A expenses 88,138 5,553 93,691 268,786 17,803 286,589 Service revenue $ 178,577 $ 161,374 11% $ 585,555 $ 551,736 6% Income taxes receivable 10,488 6,365 Deferred income tax recovery (4,760) (3,774) Lots 98,400 89,000 11% 305,150 273,500 12%
Service revenue as a % of total revenue 61.6% 65.8% (420) bps 59.4% 67.8% (840) bps Segment profit $ 49,333 $ 7,980 $ 57,313 $ 179,184 $ 25,252 $ 204,436 Revenue from inventory sales 111,219 83,972 32% 400,892 262,318 53% Total current assets 809,256 603,538 Unrealized foreign exchange (gain) loss (129) 501
Inventory sales revenue as a % of total revenue 38.4% 34.2% 420 bps 40.6% 32.2% 840 bps Total GTV 1,084,241 N/A N/A 3,756,679 N/A N/A Total revenue 289,796 245,346 18% 986,447 814,054 21% Gain on disposition of property, plant and equipment (1,071) (958)
Costs of services 36,382 33,053 10% 122,719 112,743 9% A&M service revenue as a % of total GTV- Rate 13.8% N/A N/A 13.2% N/A N/A Operating expenses: Property, plant and equipment 476,776 486,599 Amortization of debt issuance costs 2,701 3,032
Cost of inventory sold 102,410 74,341 38% 372,703 231,834 61% Costs of services 36,382 33,053 10% 122,719 112,743 9% Other non-current assets 148,375 29,395 Gain on disposition of equity investment - (4,935)
Selling, general and administrative expenses 93,691 88,323 6% 286,589 287,052 (0%) (in U.S $000's) Three months ended September 30, 2018 Nine months ended September 30, 2018 Cost of inventory sold 102,410 74,341 38% 372,703 231,834 61% Intangible assets 234,249 245,622 Other, net 9,892 (3,678)
Operating expenses 249,636 214,152 17% 834,729 685,192 22% A&M Other Consolidated A&M Other Consolidated Selling, general and administration expenses 93,691 88,323 6% 286,589 287,052 0% Goodwill 671,378 671,594 Net changes in operating assets and liabilities 139,372 (44,227)
Cost of inventory sold as a % of operating expenses 41.0% 34.7% 630 bps 44.6% 33.8% 1080 bps Service revenue $ 134,604 $ 26,770 $ 161,374 $ 463,076 $ 88,660 $ 551,736 Acquisition-related costs 45 2,007 (98)% 752 5,039 (85)% Deferred tax assets 17,797 15,648 Net cash provided by operating activities 309,105 97,147
Operating income 40,160 31,194 29% 151,718 128,862 18% Inventory sales revenue 83,972 - 83,972 262,318 - 262,318 Depreciation and amortization expenses 17,692 16,723 6% 51,919 49,451 5% Total assets $ 2,357,831 $ 2,052,396 Investing activities:
Operating income margin 13.9% 12.7% 120 bps 15.4% 15.8% (40) bps Total revenue 218,576 26,770 245,346 725,394 88,660 814,054 Gain on disposition of property, plant and equipment (821) (342) 140% (1,071) (958) 12% Property, plant and equipment additions (6,915) (13,394)
Net income attributable to stockholders 25,266 23,138 9% 97,466 85,993 13% Ancillary and logistical service expenses - 11,682 11,682 - 46,242 46,242 Foreign exchange loss 237 47 404% 1,118 31 3506% Liabilities and Equity Intangible asset additions (18,377) (19,410)
Adjusted net income attributable to stockholders Other costs of services 20,059 1,312 21,371 62,888 3,613 66,501 Total operating expenses 249,636 214,152 17% 834,729 685,192 22% Auction proceeds payable $ 453,278 $ 203,503 Proceeds on disposition of property, plant and equipment 5,610 2,524
(non-GAAP measure) 25,266 19,328 31% 97,466 82,183 19% Cost of inventory sold 74,341 - 74,341 231,834 - 231,834 Operating income 40,160 31,194 29% 151,718 128,862 18% Trade and other payables 166,796 201,255 Proceeds on disposal of equity investment - 6,147
Diluted earnings per share attributable to stockholders $ 0.23 $ 0.21 10% $ 0.89 $ 0.79 13% SG&A expenses 83,542 4,781 88,323 272,503 14,549 287,052 Interest expense (10,090) (10,473) (4)% (31,023) (32,720) (5)% Income taxes payable 16,053 2,312 Other, net (1,000) (4,674)
Diluted adjusted EPS attributable to stockholders Segment profit $ 40,634 $ 8,995 $ 49,629 $ 158,169 $ 24,256 $ 182,425 Other, net 1,962 7,182 (73)% 5,680 8,995 (37)% Short-term debt 5,805 19,896 Net cash used in investing activities (20,682) (28,807)
(non-GAAP measure) $ 0.23 $ 0.18 28% $ 0.89 $ 0.75 19% Total GTV 1,039,427 N/A N/A 3,626,551 N/A N/A Income before income taxes 32,032 27,903 15% 126,375 105,137 20% Current portion of long-term debt 18,027 13,126 Financing activities:
Effective tax rate 21.1% 17.2% 390 bps 22.8% 18.2% 460 bps A&M service revenue as a % of total GTV- Rate 12.9% N/A N/A 12.8% N/A N/A Income tax expense 6,760 4,791 41% 28,800 19,091 51% Total current liabilities 659,959 440,092 Share repurchase (42,012) -
Net income $ 25,272 $ 23,112 9% $ 97,575 $ 86,046 13% Dividends paid to stockholders (60,791) (56,116)
Total GTV 1,084,241 1,039,427 4% 3,756,679 3,626,551 4% Net income (loss) attributable to: Long-term debt 671,301 698,172 Issuances of share capital 12,440 27,072
Service revenue as a % of total GTV- Rate 16.5% 15.5% 100 bps 15.6% 15.2% 40 bps Stockholders $ 25,266 $ 23,138 9% $ 97,466 $ 85,993 13% Other non-current liabilities 150,400 41,980 Payment of withholding taxes on issuance of shares (5,260) (3,901)
Inventory sales revenue as a % of total GTV- Mix 10.3% 8.1% 220 bps 10.7% 7.2% 350 bps Non-controlling interests 6 (26) (123)% 109 53 106% Deferred tax liabilities 32,859 35,519 Proceeds from short-term debt 10,519 6,949
$ 25,272 $ 23,112 9% $ 97,575 $ 86,046 13% Total liabilities 1,514,519 1,215,763 Repayment of short-term debt (24,979) (3,372)
Earnings per share attributable Repayment of long-term debt (29,022) (58,825)
to stockholders: Commitments Repayment of finance lease obligations (4,848) (2,827)
Basic $ 0.23 $ 0.21 10% $ 0.90 $ 0.80 13% Contingencies Other, net - (1,176)
Diluted $ 0.23 $ 0.21 10% $ 0.89 $ 0.79 13% Contingently redeemable performance share units - 923 Net cash used in financing activities (143,953) (92,196)
Weighted average number of share outstanding: Stockholders' equity: Effect of changes in foreign currency rates on
Basic 108,003,390 108,365,427 0% 108,453,525 107,811,391 1% Share capital: cash, cash equivalents, and restricted cash 1,350 (3,215)
Diluted 109,381,173 109,887,194 0% 109,634,195 109,133,378 0% Common stock; no par value, unlimited shares Increase (decrease) 145,820 (27,071)
authorized, issued and outstanding shares: Beginning of period 305,567 331,116
108,210,335 (December 31, 2018: 108,682,030) 159,773 181,780 Cash, cash equivalents, and restricted cash, end of period $ 451,387 $ 304,045
Additional paid-in capital 59,289 56,885
Retained earnings 684,231 648,255
Accumulated other comprehensive loss (65,129) (56,277)
Stockholders' equity 838,164 830,643
Non-controlling interest 5,148 5,067
Total stockholders' equity 843,312 835,710
Total liabilities and equity $ 2,357,831 $ 2,052,396

 

Non-GAAP MeasuresThis news release references to non-GAAP measures. Non-GAAP 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 generally accepted accounting principles.

Adjusted Net Income Attributable to Stockholders* and Diluted Adjusted EPS Attributable to Stockholders* Reconciliation The Company believes that adjusted net income attributable to stockholders* provides useful information about the growth or decline of the net income attributable to 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 attributable to stockholders* eliminates the financial impact of adjusting items which are after-tax effects of significant non-recurring items that the Company does not consider to be part of the normal operating results, such as acquisition-related costs, management reorganization costs, and certain other items, which the Company refers to as 'adjusting items'.

The following table reconciles adjusted net income attributable to stockholders* and diluted adjusted EPS attributable to stockholders* to net income attributable to stockholders and diluted EPS attributable to stockholders, which are the most directly comparable GAAP measures in the consolidated income statements.

_______________________________ GTV and Condensed Consolidated Income Statements – Third Quarter Industrial live on site auction metrics
1 Gross Transaction Value ("GTV") represents total proceeds from all items sold at the Company's live on site auctions and online marketplaces. GTV is not a measure of financial performance, liquidity, or revenue, and is not presented in the Company's consolidated financial statements. Three months ended September 30, Nine months ended September 30, (in U.S $000's) Three months ended September 30, 2019 Nine months ended September 30, 2019 (Expressed in thousands of United States dollars, except share and per share amounts) September 30, December 31, Nine months ended September 30, 2019 2018 (in U.S. $000's, except share and per share data) Three months ended September 30, Nine months ended September 30,
% Change % Change A&M Other Consolidated A&M Other Consolidated (Unaudited) 2019 2018 Cash provided by (used in): Three months ended September 30, Nine months ended September 30, % Change % Change
The Company presents both GAAP and non-GAAP measures to provide investors with additional information. Providing these non-GAAP measures along with GAAP measures allows for increased comparability of our ongoing performance from period to period. Non-GAAP financial measures referred to in this newsrelease are labeled as "non-GAAP measure" or designated as such with an asterisk (*). Please see page 9-11 for explanations of why the Company uses thesenon-GAAP measures and, if applicable, the reconciliation to the most comparable GAAP financial measures. (in U.S. $000's, except EPS) 2019 2018 2019 over 2018 2019 2018 2019 over 2018 Service revenue $ 150,093 $ 28,484 $ 178,577 $ 494,580 $ 90,975 $ 585,555 Assets Operating activities: % Change % Change 2019 2018 2019 over2018 2019 2018 2019 over 2018
Service revenue: Inventory sales revenue 111,219 - 111,219 400,892 - 400,892 Three months ended September 30, 2019 Nine months ended September 30, 2019 Cash and cash equivalents $ 309,555 $ 237,744 Net income $ 97,575 $ 86,046 2019 2018 2019 over 2018 2019 2018 2019 over 2018 Net income attributable to stockholders $ 25,266 $ 23,138 9% $ 97,466 $ 85,993 13%
Commissions $ 90,928 $ 87,548 4% $ 317,674 $ 313,539 1% Total revenue 261,312 28,484 289,796 895,472 90,975 986,447 % Change % Change Restricted cash 141,832 67,823 Adjustments for items not affecting cash: Number of auctions 46 45 2% 140 130 8% Pre-tax adjusting items:
Fees 87,649 73,826 19% 267,881 238,197 12% Ancillary and logistical service expenses - 13,285 13,285 - 43,516 43,516 2019 2018 2019 over 2018 2019 2018 2019 over2018 Trade and other receivables 249,925 129,257 Depreciation and amortization expenses 51,919 49,451 Bidder registrations 165,500 123,000 35% 508,750 383,500 33% Severance and retention - 1,501 (100)% - 1,501 (100)%
Total service revenue 178,577 161,374 11% 585,555 551,736 6% Other costs of services 21,431 1,666 23,097 74,799 4,404 79,203 GTV $ 1,084,241 $ 1,039,427 4% $ 3,756,679 $ 3,626,551 4% Inventory 53,092 113,294 Stock option compensation expense 4,852 6,711 Consignors 14,000 13,600 3% 43,000 39,050 10% Gain on sale of equity accounted for investment - (4,935) 100% - (4,935) 100%
Inventory sales revenue 111,219 83,972 32% 400,892 262,318 53% Cost of inventory sold 102,410 - 102,410 372,703 - 372,703 Revenue: Other current assets 44,364 49,055 Equity-classified PSU expense 8,754 8,978 Buyers 34,800 31,400 11% 109,050 96,750 13% Current income tax effect of adjusting items:
Total revenue 289,796 245,346 18% 986,447 814,054 21% SG&A expenses 88,138 5,553 93,691 268,786 17,803 286,589 Service revenue $ 178,577 $ 161,374 11% $ 585,555 $ 551,736 6% Income taxes receivable 10,488 6,365 Deferred income tax recovery (4,760) (3,774) Lots 98,400 89,000 11% 305,150 273,500 12% Severance and retention - (376) 100% - (376) 100%
Service revenue as a % of total revenue 61.6% 65.8% (420) bps 59.4% 67.8% (840) bps Segment profit $ 49,333 $ 7,980 $ 57,313 $ 179,184 $ 25,252 $ 204,436 Revenue from inventory sales 111,219 83,972 32% 400,892 262,318 53% Total current assets 809,256 603,538 Unrealized foreign exchange (gain) loss (129) 501 Adjusted net income attributable to stockholders* $ 25,266 $ 19,328 31% $ 97,466 $ 82,183 19%
Inventory sales revenue as a % of total revenue 38.4% 34.2% 420 bps 40.6% 32.2% 840 bps Total GTV 1,084,241 N/A N/A 3,756,679 N/A N/A Total revenue 289,796 245,346 18% 986,447 814,054 21% Gain on disposition of property, plant and equipment (1,071) (958) Weighted average number of dilutive shares outstanding 109,381,173 109,887,194 0% 109,634,195 109,133,378 0%
Costs of services 36,382 33,053 10% 122,719 112,743 9% A&M service revenue as a % of total GTV- Rate 13.8% N/A N/A 13.2% N/A N/A Operating expenses: Property, plant and equipment 476,776 486,599 Amortization of debt issuance costs 2,701 3,032 Diluted earnings per share attributable to stockholders $ 0.23 $ 0.21 10% $ 0.89 $ 0.79 13%
Cost of inventory sold 102,410 74,341 38% 372,703 231,834 61% Costs of services 36,382 33,053 10% 122,719 112,743 9% Other non-current assets 148,375 29,395 Gain on disposition of equity investment - (4,935) Diluted adjusted EPS attributable to Stockholders* $ 0.23 $ 0.18 28% $ 0.89 $ 0.75 19%
Selling, general and administrative expenses 93,691 88,323 6% 286,589 287,052 (0%) (in U.S $000's) Three months ended September 30, 2018 Nine months ended September 30, 2018 Cost of inventory sold 102,410 74,341 38% 372,703 231,834 61% Intangible assets 234,249 245,622 Other, net 9,892 (3,678)
Operating expenses 249,636 214,152 17% 834,729 685,192 22% A&M Other Consolidated A&M Other Consolidated Selling, general and administration expenses 93,691 88,323 6% 286,589 287,052 0% Goodwill 671,378 671,594 Net changes in operating assets and liabilities 139,372 (44,227)
Cost of inventory sold as a % of operating expenses 41.0% 34.7% 630 bps 44.6% 33.8% 1080 bps Service revenue $ 134,604 $ 26,770 $ 161,374 $ 463,076 $ 88,660 $ 551,736 Acquisition-related costs 45 2,007 (98)% 752 5,039 (85)% Deferred tax assets 17,797 15,648 Net cash provided by operating activities 309,105 97,147
Operating income 40,160 31,194 29% 151,718 128,862 18% Inventory sales revenue 83,972 - 83,972 262,318 - 262,318 Depreciation and amortization expenses 17,692 16,723 6% 51,919 49,451 5% Total assets $ 2,357,831 $ 2,052,396 Investing activities:
Operating income margin 13.9% 12.7% 120 bps 15.4% 15.8% (40) bps Total revenue 218,576 26,770 245,346 725,394 88,660 814,054 Gain on disposition of property, plant and equipment (821) (342) 140% (1,071) (958) 12% Property, plant and equipment additions (6,915) (13,394)
Net income attributable to stockholders 25,266 23,138 9% 97,466 85,993 13% Ancillary and logistical service expenses - 11,682 11,682 - 46,242 46,242 Foreign exchange loss 237 47 404% 1,118 31 3506% Liabilities and Equity Intangible asset additions (18,377) (19,410)
Adjusted net income attributable to stockholders Other costs of services 20,059 1,312 21,371 62,888 3,613 66,501 Total operating expenses 249,636 214,152 17% 834,729 685,192 22% Auction proceeds payable $ 453,278 $ 203,503 Proceeds on disposition of property, plant and equipment 5,610 2,524
(non-GAAP measure) 25,266 19,328 31% 97,466 82,183 19% Cost of inventory sold 74,341 - 74,341 231,834 - 231,834 Operating income 40,160 31,194 29% 151,718 128,862 18% Trade and other payables 166,796 201,255 Proceeds on disposal of equity investment - 6,147
Diluted earnings per share attributable to stockholders $ 0.23 $ 0.21 10% $ 0.89 $ 0.79 13% SG&A expenses 83,542 4,781 88,323 272,503 14,549 287,052 Interest expense (10,090) (10,473) (4)% (31,023) (32,720) (5)% Income taxes payable 16,053 2,312 Other, net (1,000) (4,674)
Diluted adjusted EPS attributable to stockholders Segment profit $ 40,634 $ 8,995 $ 49,629 $ 158,169 $ 24,256 $ 182,425 Other, net 1,962 7,182 (73)% 5,680 8,995 (37)% Short-term debt 5,805 19,896 Net cash used in investing activities (20,682) (28,807)
(non-GAAP measure) $ 0.23 $ 0.18 28% $ 0.89 $ 0.75 19% Total GTV 1,039,427 N/A N/A 3,626,551 N/A N/A Income before income taxes 32,032 27,903 15% 126,375 105,137 20% Current portion of long-term debt 18,027 13,126 Financing activities:
Effective tax rate 21.1% 17.2% 390 bps 22.8% 18.2% 460 bps A&M service revenue as a % of total GTV- Rate 12.9% N/A N/A 12.8% N/A N/A Income tax expense 6,760 4,791 41% 28,800 19,091 51% Total current liabilities 659,959 440,092 Share repurchase (42,012) -
Net income $ 25,272 $ 23,112 9% $ 97,575 $ 86,046 13% Dividends paid to stockholders (60,791) (56,116)
Total GTV 1,084,241 1,039,427 4% 3,756,679 3,626,551 4% Net income (loss) attributable to: Long-term debt 671,301 698,172 Issuances of share capital 12,440 27,072
Service revenue as a % of total GTV- Rate 16.5% 15.5% 100 bps 15.6% 15.2% 40 bps Stockholders $ 25,266 $ 23,138 9% $ 97,466 $ 85,993 13% Other non-current liabilities 150,400 41,980 Payment of withholding taxes on issuance of shares (5,260) (3,901)
Inventory sales revenue as a % of total GTV- Mix 10.3% 8.1% 220 bps 10.7% 7.2% 350 bps Non-controlling interests 6 (26) (123)% 109 53 106% Deferred tax liabilities 32,859 35,519 Proceeds from short-term debt 10,519 6,949
$ 25,272 $ 23,112 9% $ 97,575 $ 86,046 13% Total liabilities 1,514,519 1,215,763 Repayment of short-term debt (24,979) (3,372)
Earnings per share attributable Repayment of long-term debt (29,022) (58,825)
to stockholders: Commitments Repayment of finance lease obligations (4,848) (2,827)
Basic $ 0.23 $ 0.21 10% $ 0.90 $ 0.80 13% Contingencies Other, net - (1,176)
Diluted $ 0.23 $ 0.21 10% $ 0.89 $ 0.79 13% Contingently redeemable performance share units - 923 Net cash used in financing activities (143,953) (92,196)
Weighted average number of share outstanding: Stockholders' equity: Effect of changes in foreign currency rates on
Basic 108,003,390 108,365,427 0% 108,453,525 107,811,391 1% Share capital: cash, cash equivalents, and restricted cash 1,350 (3,215)
Diluted 109,381,173 109,887,194 0% 109,634,195 109,133,378 0% Common stock; no par value, unlimited shares Increase (decrease) 145,820 (27,071)
authorized, issued and outstanding shares: Beginning of period 305,567 331,116
108,210,335 (December 31, 2018: 108,682,030) 159,773 181,780 Cash, cash equivalents, and restricted cash, end of period $ 451,387 $ 304,045
Additional paid-in capital 59,289 56,885
Retained earnings 684,231 648,255
Accumulated other comprehensive loss (65,129) (56,277)
Stockholders' equity 838,164 830,643
Non-controlling interest 5,148 5,067
Total stockholders' equity 843,312 835,710
Total liabilities and equity $ 2,357,831 $ 2,052,396

_______________________________ GTV and Condensed Consolidated Income Statements – Third Quarter Industrial live on site auction metrics (1) Please refer to page 11 for a summary of adjusting items for the three month and nine month ended September 30, 2019 and September 30, 2018.
1 Gross Transaction Value ("GTV") represents total proceeds from all items sold at the Company's live on site auctions and online marketplaces. GTV is not a measure of financial performance, liquidity, or revenue, and is not presented in the Company's consolidated financial statements. Three months ended September 30, Nine months ended September 30, (in U.S $000's) Three months ended September 30, 2019 Nine months ended September 30, 2019 (Expressed in thousands of United States dollars, except share and per share amounts) September 30, December 31, Nine months ended September 30, 2019 2018 (in U.S. $000's, except share and per share data) Three months ended September 30, Nine months ended September 30, (2) Adjusted net income attributable to stockholders* represents net income attributable to stockholders excluding the effects of adjusting items.
% Change % Change A&M Other Consolidated A&M Other Consolidated (Unaudited) 2019 2018 Cash provided by (used in): Three months ended September 30, Nine months ended September 30, % Change % Change (3) Diluted adjusted EPS attributable to stockholders* is calculated by dividing adjusted net income attributable to stockholders*, net of the effect of dilutivesecurities, by the  weighted average number of dilutive shares outstanding.
The Company presents both GAAP and non-GAAP measures to provide investors with additional information. Providing these non-GAAP measures along with GAAP measures allows for increased comparability of our ongoing performance from period to period. Non-GAAP financial measures referred to in this newsrelease are labeled as "non-GAAP measure" or designated as such with an asterisk (*). Please see page 9-11 for explanations of why the Company uses thesenon-GAAP measures and, if applicable, the reconciliation to the most comparable GAAP financial measures. (in U.S. $000's, except EPS) 2019 2018 2019 over 2018 2019 2018 2019 over 2018 Service revenue $ 150,093 $ 28,484 $ 178,577 $ 494,580 $ 90,975 $ 585,555 Assets Operating activities: % Change % Change 2019 2018 2019 over2018 2019 2018 2019 over 2018
Service revenue: Inventory sales revenue 111,219 - 111,219 400,892 - 400,892 Three months ended September 30, 2019 Nine months ended September 30, 2019 Cash and cash equivalents $ 309,555 $ 237,744 Net income $ 97,575 $ 86,046 2019 2018 2019 over 2018 2019 2018 2019 over 2018 Net income attributable to stockholders $ 25,266 $ 23,138 9% $ 97,466 $ 85,993 13%
Commissions $ 90,928 $ 87,548 4% $ 317,674 $ 313,539 1% Total revenue 261,312 28,484 289,796 895,472 90,975 986,447 % Change % Change Restricted cash 141,832 67,823 Adjustments for items not affecting cash: Number of auctions 46 45 2% 140 130 8% Pre-tax adjusting items:
Fees 87,649 73,826 19% 267,881 238,197 12% Ancillary and logistical service expenses - 13,285 13,285 - 43,516 43,516 2019 2018 2019 over 2018 2019 2018 2019 over2018 Trade and other receivables 249,925 129,257 Depreciation and amortization expenses 51,919 49,451 Bidder registrations 165,500 123,000 35% 508,750 383,500 33% Severance and retention - 1,501 (100)% - 1,501 (100)%
Total service revenue 178,577 161,374 11% 585,555 551,736 6% Other costs of services 21,431 1,666 23,097 74,799 4,404 79,203 GTV $ 1,084,241 $ 1,039,427 4% $ 3,756,679 $ 3,626,551 4% Inventory 53,092 113,294 Stock option compensation expense 4,852 6,711 Consignors 14,000 13,600 3% 43,000 39,050 10% Gain on sale of equity accounted for investment - (4,935) 100% - (4,935) 100%
Inventory sales revenue 111,219 83,972 32% 400,892 262,318 53% Cost of inventory sold 102,410 - 102,410 372,703 - 372,703 Revenue: Other current assets 44,364 49,055 Equity-classified PSU expense 8,754 8,978 Buyers 34,800 31,400 11% 109,050 96,750 13% Current income tax effect of adjusting items:
Total revenue 289,796 245,346 18% 986,447 814,054 21% SG&A expenses 88,138 5,553 93,691 268,786 17,803 286,589 Service revenue $ 178,577 $ 161,374 11% $ 585,555 $ 551,736 6% Income taxes receivable 10,488 6,365 Deferred income tax recovery (4,760) (3,774) Lots 98,400 89,000 11% 305,150 273,500 12% Severance and retention - (376) 100% - (376) 100%
Service revenue as a % of total revenue 61.6% 65.8% (420) bps 59.4% 67.8% (840) bps Segment profit $ 49,333 $ 7,980 $ 57,313 $ 179,184 $ 25,252 $ 204,436 Revenue from inventory sales 111,219 83,972 32% 400,892 262,318 53% Total current assets 809,256 603,538 Unrealized foreign exchange (gain) loss (129) 501 Adjusted net income attributable to stockholders* $ 25,266 $ 19,328 31% $ 97,466 $ 82,183 19%
Inventory sales revenue as a % of total revenue 38.4% 34.2% 420 bps 40.6% 32.2% 840 bps Total GTV 1,084,241 N/A N/A 3,756,679 N/A N/A Total revenue 289,796 245,346 18% 986,447 814,054 21% Gain on disposition of property, plant and equipment (1,071) (958) Weighted average number of dilutive shares outstanding 109,381,173 109,887,194 0% 109,634,195 109,133,378 0%
Costs of services 36,382 33,053 10% 122,719 112,743 9% A&M service revenue as a % of total GTV- Rate 13.8% N/A N/A 13.2% N/A N/A Operating expenses: Property, plant and equipment 476,776 486,599 Amortization of debt issuance costs 2,701 3,032 Diluted earnings per share attributable to stockholders $ 0.23 $ 0.21 10% $ 0.89 $ 0.79 13%
Cost of inventory sold 102,410 74,341 38% 372,703 231,834 61% Costs of services 36,382 33,053 10% 122,719 112,743 9% Other non-current assets 148,375 29,395 Gain on disposition of equity investment - (4,935) Diluted adjusted EPS attributable to Stockholders* $ 0.23 $ 0.18 28% $ 0.89 $ 0.75 19%
Selling, general and administrative expenses 93,691 88,323 6% 286,589 287,052 (0%) (in U.S $000's) Three months ended September 30, 2018 Nine months ended September 30, 2018 Cost of inventory sold 102,410 74,341 38% 372,703 231,834 61% Intangible assets 234,249 245,622 Other, net 9,892 (3,678)
Operating expenses 249,636 214,152 17% 834,729 685,192 22% A&M Other Consolidated A&M Other Consolidated Selling, general and administration expenses 93,691 88,323 6% 286,589 287,052 0% Goodwill 671,378 671,594 Net changes in operating assets and liabilities 139,372 (44,227)
Cost of inventory sold as a % of operating expenses 41.0% 34.7% 630 bps 44.6% 33.8% 1080 bps Service revenue $ 134,604 $ 26,770 $ 161,374 $ 463,076 $ 88,660 $ 551,736 Acquisition-related costs 45 2,007 (98)% 752 5,039 (85)% Deferred tax assets 17,797 15,648 Net cash provided by operating activities 309,105 97,147
Operating income 40,160 31,194 29% 151,718 128,862 18% Inventory sales revenue 83,972 - 83,972 262,318 - 262,318 Depreciation and amortization expenses 17,692 16,723 6% 51,919 49,451 5% Total assets $ 2,357,831 $ 2,052,396 Investing activities:
Operating income margin 13.9% 12.7% 120 bps 15.4% 15.8% (40) bps Total revenue 218,576 26,770 245,346 725,394 88,660 814,054 Gain on disposition of property, plant and equipment (821) (342) 140% (1,071) (958) 12% Property, plant and equipment additions (6,915) (13,394)
Net income attributable to stockholders 25,266 23,138 9% 97,466 85,993 13% Ancillary and logistical service expenses - 11,682 11,682 - 46,242 46,242 Foreign exchange loss 237 47 404% 1,118 31 3506% Liabilities and Equity Intangible asset additions (18,377) (19,410)
Adjusted net income attributable to stockholders Other costs of services 20,059 1,312 21,371 62,888 3,613 66,501 Total operating expenses 249,636 214,152 17% 834,729 685,192 22% Auction proceeds payable $ 453,278 $ 203,503 Proceeds on disposition of property, plant and equipment 5,610 2,524
(non-GAAP measure) 25,266 19,328 31% 97,466 82,183 19% Cost of inventory sold 74,341 - 74,341 231,834 - 231,834 Operating income 40,160 31,194 29% 151,718 128,862 18% Trade and other payables 166,796 201,255 Proceeds on disposal of equity investment - 6,147
Diluted earnings per share attributable to stockholders $ 0.23 $ 0.21 10% $ 0.89 $ 0.79 13% SG&A expenses 83,542 4,781 88,323 272,503 14,549 287,052 Interest expense (10,090) (10,473) (4)% (31,023) (32,720) (5)% Income taxes payable 16,053 2,312 Other, net (1,000) (4,674)
Diluted adjusted EPS attributable to stockholders Segment profit $ 40,634 $ 8,995 $ 49,629 $ 158,169 $ 24,256 $ 182,425 Other, net 1,962 7,182 (73)% 5,680 8,995 (37)% Short-term debt 5,805 19,896 Net cash used in investing activities (20,682) (28,807)
(non-GAAP measure) $ 0.23 $ 0.18 28% $ 0.89 $ 0.75 19% Total GTV 1,039,427 N/A N/A 3,626,551 N/A N/A Income before income taxes 32,032 27,903 15% 126,375 105,137 20% Current portion of long-term debt 18,027 13,126 Financing activities:
Effective tax rate 21.1% 17.2% 390 bps 22.8% 18.2% 460 bps A&M service revenue as a % of total GTV- Rate 12.9% N/A N/A 12.8% N/A N/A Income tax expense 6,760 4,791 41% 28,800 19,091 51% Total current liabilities 659,959 440,092 Share repurchase (42,012) -
Net income $ 25,272 $ 23,112 9% $ 97,575 $ 86,046 13% Dividends paid to stockholders (60,791) (56,116)
Total GTV 1,084,241 1,039,427 4% 3,756,679 3,626,551 4% Net income (loss) attributable to: Long-term debt 671,301 698,172 Issuances of share capital 12,440 27,072
Service revenue as a % of total GTV- Rate 16.5% 15.5% 100 bps 15.6% 15.2% 40 bps Stockholders $ 25,266 $ 23,138 9% $ 97,466 $ 85,993 13% Other non-current liabilities 150,400 41,980 Payment of withholding taxes on issuance of shares (5,260) (3,901)
Inventory sales revenue as a % of total GTV- Mix 10.3% 8.1% 220 bps 10.7% 7.2% 350 bps Non-controlling interests 6 (26) (123)% 109 53 106% Deferred tax liabilities 32,859 35,519 Proceeds from short-term debt 10,519 6,949
$ 25,272 $ 23,112 9% $ 97,575 $ 86,046 13% Total liabilities 1,514,519 1,215,763 Repayment of short-term debt (24,979) (3,372)
Earnings per share attributable Repayment of long-term debt (29,022) (58,825)
to stockholders: Commitments Repayment of finance lease obligations (4,848) (2,827)
Basic $ 0.23 $ 0.21 10% $ 0.90 $ 0.80 13% Contingencies Other, net - (1,176)
Diluted $ 0.23 $ 0.21 10% $ 0.89 $ 0.79 13% Contingently redeemable performance share units - 923 Net cash used in financing activities (143,953) (92,196)
Weighted average number of share outstanding: Stockholders' equity: Effect of changes in foreign currency rates on
Basic 108,003,390 108,365,427 0% 108,453,525 107,811,391 1% Share capital: cash, cash equivalents, and restricted cash 1,350 (3,215)
Diluted 109,381,173 109,887,194 0% 109,634,195 109,133,378 0% Common stock; no par value, unlimited shares Increase (decrease) 145,820 (27,071)
authorized, issued and outstanding shares: Beginning of period 305,567 331,116
108,210,335 (December 31, 2018: 108,682,030) 159,773 181,780 Cash, cash equivalents, and restricted cash, end of period $ 451,387 $ 304,045
Additional paid-in capital 59,289 56,885
Retained earnings 684,231 648,255
Accumulated other comprehensive loss (65,129) (56,277)
Stockholders' equity 838,164 830,643
Non-controlling interest 5,148 5,067
Total stockholders' equity 843,312 835,710
Total liabilities and equity $ 2,357,831 $ 2,052,396

 

Adjusted Net Debt* and Adjusted Net Debt/Adjusted EBITDA* ReconciliationThe Company believes that comparing adjusted net debt/adjusted EBITDA* on a trailing 12-month basis for different financial periods provides useful information about the performance of the Company's operations as an indicator of the amount of time it would take the Company to settle both the short and long-term debt. The Company does not consider this to be a measure of liquidity, which is the ability to settle only short-term obligations, but rather a measure of how well the Company funds liquidity.

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.

_______________________________ GTV and Condensed Consolidated Income Statements – Third Quarter Industrial live on site auction metrics (1) Please refer to page 11 for a summary of adjusting items for the three month and nine month ended September 30, 2019 and September 30, 2018.
1 Gross Transaction Value ("GTV") represents total proceeds from all items sold at the Company's live on site auctions and online marketplaces. GTV is not a measure of financial performance, liquidity, or revenue, and is not presented in the Company's consolidated financial statements. Three months ended September 30, Nine months ended September 30, (in U.S $000's) Three months ended September 30, 2019 Nine months ended September 30, 2019 (Expressed in thousands of United States dollars, except share and per share amounts) September 30, December 31, Nine months ended September 30, 2019 2018 (in U.S. $000's, except share and per share data) Three months ended September 30, Nine months ended September 30, (2) Adjusted net income attributable to stockholders* represents net income attributable to stockholders excluding the effects of adjusting items. (in U.S. $ millions) As at and for the 12 months ended September 30,
% Change % Change A&M Other Consolidated A&M Other Consolidated (Unaudited) 2019 2018 Cash provided by (used in): Three months ended September 30, Nine months ended September 30, % Change % Change (3) Diluted adjusted EPS attributable to stockholders* is calculated by dividing adjusted net income attributable to stockholders*, net of the effect of dilutivesecurities, by the  weighted average number of dilutive shares outstanding. % Change
The Company presents both GAAP and non-GAAP measures to provide investors with additional information. Providing these non-GAAP measures along with GAAP measures allows for increased comparability of our ongoing performance from period to period. Non-GAAP financial measures referred to in this newsrelease are labeled as "non-GAAP measure" or designated as such with an asterisk (*). Please see page 9-11 for explanations of why the Company uses thesenon-GAAP measures and, if applicable, the reconciliation to the most comparable GAAP financial measures. (in U.S. $000's, except EPS) 2019 2018 2019 over 2018 2019 2018 2019 over 2018 Service revenue $ 150,093 $ 28,484 $ 178,577 $ 494,580 $ 90,975 $ 585,555 Assets Operating activities: % Change % Change 2019 2018 2019 over2018 2019 2018 2019 over 2018 2019 2018 2019 over 2018
Service revenue: Inventory sales revenue 111,219 - 111,219 400,892 - 400,892 Three months ended September 30, 2019 Nine months ended September 30, 2019 Cash and cash equivalents $ 309,555 $ 237,744 Net income $ 97,575 $ 86,046 2019 2018 2019 over 2018 2019 2018 2019 over 2018 Net income attributable to stockholders $ 25,266 $ 23,138 9% $ 97,466 $ 85,993 13% Short-term debt $ 5.8 $ 10.5 (45)%
Commissions $ 90,928 $ 87,548 4% $ 317,674 $ 313,539 1% Total revenue 261,312 28,484 289,796 895,472 90,975 986,447 % Change % Change Restricted cash 141,832 67,823 Adjustments for items not affecting cash: Number of auctions 46 45 2% 140 130 8% Pre-tax adjusting items: Long-term debt 689.3 751.8 (8)%
Fees 87,649 73,826 19% 267,881 238,197 12% Ancillary and logistical service expenses - 13,285 13,285 - 43,516 43,516 2019 2018 2019 over 2018 2019 2018 2019 over2018 Trade and other receivables 249,925 129,257 Depreciation and amortization expenses 51,919 49,451 Bidder registrations 165,500 123,000 35% 508,750 383,500 33% Severance and retention - 1,501 (100)% - 1,501 (100)% Debt 695.1 762.3 (9)%
Total service revenue 178,577 161,374 11% 585,555 551,736 6% Other costs of services 21,431 1,666 23,097 74,799 4,404 79,203 GTV $ 1,084,241 $ 1,039,427 4% $ 3,756,679 $ 3,626,551 4% Inventory 53,092 113,294 Stock option compensation expense 4,852 6,711 Consignors 14,000 13,600 3% 43,000 39,050 10% Gain on sale of equity accounted for investment - (4,935) 100% - (4,935) 100% Less: cash and cash equivalents (309.6) (228.8) 35%
Inventory sales revenue 111,219 83,972 32% 400,892 262,318 53% Cost of inventory sold 102,410 - 102,410 372,703 - 372,703 Revenue: Other current assets 44,364 49,055 Equity-classified PSU expense 8,754 8,978 Buyers 34,800 31,400 11% 109,050 96,750 13% Current income tax effect of adjusting items: Adjusted net debt* 385.5 533.5 (28)%
Total revenue 289,796 245,346 18% 986,447 814,054 21% SG&A expenses 88,138 5,553 93,691 268,786 17,803 286,589 Service revenue $ 178,577 $ 161,374 11% $ 585,555 $ 551,736 6% Income taxes receivable 10,488 6,365 Deferred income tax recovery (4,760) (3,774) Lots 98,400 89,000 11% 305,150 273,500 12% Severance and retention - (376) 100% - (376) 100% Net income $ 133.0 $ 122.9 8%
Service revenue as a % of total revenue 61.6% 65.8% (420) bps 59.4% 67.8% (840) bps Segment profit $ 49,333 $ 7,980 $ 57,313 $ 179,184 $ 25,252 $ 204,436 Revenue from inventory sales 111,219 83,972 32% 400,892 262,318 53% Total current assets 809,256 603,538 Unrealized foreign exchange (gain) loss (129) 501 Adjusted net income attributable to stockholders* $ 25,266 $ 19,328 31% $ 97,466 $ 82,183 19% Add: depreciation and amortization expenses 69.1 65.1 6%
Inventory sales revenue as a % of total revenue 38.4% 34.2% 420 bps 40.6% 32.2% 840 bps Total GTV 1,084,241 N/A N/A 3,756,679 N/A N/A Total revenue 289,796 245,346 18% 986,447 814,054 21% Gain on disposition of property, plant and equipment (1,071) (958) Weighted average number of dilutive shares outstanding 109,381,173 109,887,194 0% 109,634,195 109,133,378 0% Add: interest expense 42.8 43.7 (2)%
Costs of services 36,382 33,053 10% 122,719 112,743 9% A&M service revenue as a % of total GTV- Rate 13.8% N/A N/A 13.2% N/A N/A Operating expenses: Property, plant and equipment 476,776 486,599 Amortization of debt issuance costs 2,701 3,032 Diluted earnings per share attributable to stockholders $ 0.23 $ 0.21 10% $ 0.89 $ 0.79 13% Less: interest income (3.3) (2.7) 22%
Cost of inventory sold 102,410 74,341 38% 372,703 231,834 61% Costs of services 36,382 33,053 10% 122,719 112,743 9% Other non-current assets 148,375 29,395 Gain on disposition of equity investment - (4,935) Diluted adjusted EPS attributable to Stockholders* $ 0.23 $ 0.18 28% $ 0.89 $ 0.75 19% Add: income tax expense 40.7 13.2 208%
Selling, general and administrative expenses 93,691 88,323 6% 286,589 287,052 (0%) (in U.S $000's) Three months ended September 30, 2018 Nine months ended September 30, 2018 Cost of inventory sold 102,410 74,341 38% 372,703 231,834 61% Intangible assets 234,249 245,622 Other, net 9,892 (3,678) Pre-tax adjusting items:
Operating expenses 249,636 214,152 17% 834,729 685,192 22% A&M Other Consolidated A&M Other Consolidated Selling, general and administration expenses 93,691 88,323 6% 286,589 287,052 0% Goodwill 671,378 671,594 Net changes in operating assets and liabilities 139,372 (44,227) Severance and retention - 3.7 (100)%
Cost of inventory sold as a % of operating expenses 41.0% 34.7% 630 bps 44.6% 33.8% 1080 bps Service revenue $ 134,604 $ 26,770 $ 161,374 $ 463,076 $ 88,660 $ 551,736 Acquisition-related costs 45 2,007 (98)% 752 5,039 (85)% Deferred tax assets 17,797 15,648 Net cash provided by operating activities 309,105 97,147 Gain on sale of equity accounted for investment - (4.9) 100%
Operating income 40,160 31,194 29% 151,718 128,862 18% Inventory sales revenue 83,972 - 83,972 262,318 - 262,318 Depreciation and amortization expenses 17,692 16,723 6% 51,919 49,451 5% Total assets $ 2,357,831 $ 2,052,396 Investing activities: Adjusted EBITDA* $ 282.3 $ 241.0 17%
Operating income margin 13.9% 12.7% 120 bps 15.4% 15.8% (40) bps Total revenue 218,576 26,770 245,346 725,394 88,660 814,054 Gain on disposition of property, plant and equipment (821) (342) 140% (1,071) (958) 12% Property, plant and equipment additions (6,915) (13,394) Debt/net income 5.2x 6.2x (16%)
Net income attributable to stockholders 25,266 23,138 9% 97,466 85,993 13% Ancillary and logistical service expenses - 11,682 11,682 - 46,242 46,242 Foreign exchange loss 237 47 404% 1,118 31 3506% Liabilities and Equity Intangible asset additions (18,377) (19,410) Adjusted net debt*/adjusted EBITDA* 1.4x 2.2x (36%)
Adjusted net income attributable to stockholders Other costs of services 20,059 1,312 21,371 62,888 3,613 66,501 Total operating expenses 249,636 214,152 17% 834,729 685,192 22% Auction proceeds payable $ 453,278 $ 203,503 Proceeds on disposition of property, plant and equipment 5,610 2,524
(non-GAAP measure) 25,266 19,328 31% 97,466 82,183 19% Cost of inventory sold 74,341 - 74,341 231,834 - 231,834 Operating income 40,160 31,194 29% 151,718 128,862 18% Trade and other payables 166,796 201,255 Proceeds on disposal of equity investment - 6,147
Diluted earnings per share attributable to stockholders $ 0.23 $ 0.21 10% $ 0.89 $ 0.79 13% SG&A expenses 83,542 4,781 88,323 272,503 14,549 287,052 Interest expense (10,090) (10,473) (4)% (31,023) (32,720) (5)% Income taxes payable 16,053 2,312 Other, net (1,000) (4,674)
Diluted adjusted EPS attributable to stockholders Segment profit $ 40,634 $ 8,995 $ 49,629 $ 158,169 $ 24,256 $ 182,425 Other, net 1,962 7,182 (73)% 5,680 8,995 (37)% Short-term debt 5,805 19,896 Net cash used in investing activities (20,682) (28,807)
(non-GAAP measure) $ 0.23 $ 0.18 28% $ 0.89 $ 0.75 19% Total GTV 1,039,427 N/A N/A 3,626,551 N/A N/A Income before income taxes 32,032 27,903 15% 126,375 105,137 20% Current portion of long-term debt 18,027 13,126 Financing activities:
Effective tax rate 21.1% 17.2% 390 bps 22.8% 18.2% 460 bps A&M service revenue as a % of total GTV- Rate 12.9% N/A N/A 12.8% N/A N/A Income tax expense 6,760 4,791 41% 28,800 19,091 51% Total current liabilities 659,959 440,092 Share repurchase (42,012) -
Net income $ 25,272 $ 23,112 9% $ 97,575 $ 86,046 13% Dividends paid to stockholders (60,791) (56,116)
Total GTV 1,084,241 1,039,427 4% 3,756,679 3,626,551 4% Net income (loss) attributable to: Long-term debt 671,301 698,172 Issuances of share capital 12,440 27,072
Service revenue as a % of total GTV- Rate 16.5% 15.5% 100 bps 15.6% 15.2% 40 bps Stockholders $ 25,266 $ 23,138 9% $ 97,466 $ 85,993 13% Other non-current liabilities 150,400 41,980 Payment of withholding taxes on issuance of shares (5,260) (3,901)
Inventory sales revenue as a % of total GTV- Mix 10.3% 8.1% 220 bps 10.7% 7.2% 350 bps Non-controlling interests 6 (26) (123)% 109 53 106% Deferred tax liabilities 32,859 35,519 Proceeds from short-term debt 10,519 6,949
$ 25,272 $ 23,112 9% $ 97,575 $ 86,046 13% Total liabilities 1,514,519 1,215,763 Repayment of short-term debt (24,979) (3,372)
Earnings per share attributable Repayment of long-term debt (29,022) (58,825)
to stockholders: Commitments Repayment of finance lease obligations (4,848) (2,827)
Basic $ 0.23 $ 0.21 10% $ 0.90 $ 0.80 13% Contingencies Other, net - (1,176)
Diluted $ 0.23 $ 0.21 10% $ 0.89 $ 0.79 13% Contingently redeemable performance share units - 923 Net cash used in financing activities (143,953) (92,196)
Weighted average number of share outstanding: Stockholders' equity: Effect of changes in foreign currency rates on
Basic 108,003,390 108,365,427 0% 108,453,525 107,811,391 1% Share capital: cash, cash equivalents, and restricted cash 1,350 (3,215)
Diluted 109,381,173 109,887,194 0% 109,634,195 109,133,378 0% Common stock; no par value, unlimited shares Increase (decrease) 145,820 (27,071)
authorized, issued and outstanding shares: Beginning of period 305,567 331,116
108,210,335 (December 31, 2018: 108,682,030) 159,773 181,780 Cash, cash equivalents, and restricted cash, end of period $ 451,387 $ 304,045
Additional paid-in capital 59,289 56,885
Retained earnings 684,231 648,255
Accumulated other comprehensive loss (65,129) (56,277)
Stockholders' equity 838,164 830,643
Non-controlling interest 5,148 5,067
Total stockholders' equity 843,312 835,710
Total liabilities and equity $ 2,357,831 $ 2,052,396

_______________________________ GTV and Condensed Consolidated Income Statements – Third Quarter Industrial live on site auction metrics (1) Please refer to page 11 for a summary of adjusting items for the three month and nine month ended September 30, 2019 and September 30, 2018. (1) Please refer to page 11 for a summary of adjusting items during the trailing 12-months ended September 30, 2019 and September 30, 2018.
1 Gross Transaction Value ("GTV") represents total proceeds from all items sold at the Company's live on site auctions and online marketplaces. GTV is not a measure of financial performance, liquidity, or revenue, and is not presented in the Company's consolidated financial statements. Three months ended September 30, Nine months ended September 30, (in U.S $000's) Three months ended September 30, 2019 Nine months ended September 30, 2019 (Expressed in thousands of United States dollars, except share and per share amounts) September 30, December 31, Nine months ended September 30, 2019 2018 (in U.S. $000's, except share and per share data) Three months ended September 30, Nine months ended September 30, (2) Adjusted net income attributable to stockholders* represents net income attributable to stockholders excluding the effects of adjusting items. (in U.S. $ millions) As at and for the 12 months ended September 30, (2) Adjusted EBITDA* is calculated by adding back depreciation and amortization expenses, interest expense, and income tax expense, and subtracting interestincome from net income excluding the pre-tax effects of adjusting items.
% Change % Change A&M Other Consolidated A&M Other Consolidated (Unaudited) 2019 2018 Cash provided by (used in): Three months ended September 30, Nine months ended September 30, % Change % Change (3) Diluted adjusted EPS attributable to stockholders* is calculated by dividing adjusted net income attributable to stockholders*, net of the effect of dilutivesecurities, by the  weighted average number of dilutive shares outstanding. % Change (3) Adjusted net debt* is calculated by subtracting cash and cash equivalents from short and long-term debt.
The Company presents both GAAP and non-GAAP measures to provide investors with additional information. Providing these non-GAAP measures along with GAAP measures allows for increased comparability of our ongoing performance from period to period. Non-GAAP financial measures referred to in this newsrelease are labeled as "non-GAAP measure" or designated as such with an asterisk (*). Please see page 9-11 for explanations of why the Company uses thesenon-GAAP measures and, if applicable, the reconciliation to the most comparable GAAP financial measures. (in U.S. $000's, except EPS) 2019 2018 2019 over 2018 2019 2018 2019 over 2018 Service revenue $ 150,093 $ 28,484 $ 178,577 $ 494,580 $ 90,975 $ 585,555 Assets Operating activities: % Change % Change 2019 2018 2019 over2018 2019 2018 2019 over 2018 2019 2018 2019 over 2018 (4) Adjusted net debt*/adjusted EBITDA* is calculated by dividing adjusted net debt* by adjusted EBITDA*.
Service revenue: Inventory sales revenue 111,219 - 111,219 400,892 - 400,892 Three months ended September 30, 2019 Nine months ended September 30, 2019 Cash and cash equivalents $ 309,555 $ 237,744 Net income $ 97,575 $ 86,046 2019 2018 2019 over 2018 2019 2018 2019 over 2018 Net income attributable to stockholders $ 25,266 $ 23,138 9% $ 97,466 $ 85,993 13% Short-term debt $ 5.8 $ 10.5 (45)%
Commissions $ 90,928 $ 87,548 4% $ 317,674 $ 313,539 1% Total revenue 261,312 28,484 289,796 895,472 90,975 986,447 % Change % Change Restricted cash 141,832 67,823 Adjustments for items not affecting cash: Number of auctions 46 45 2% 140 130 8% Pre-tax adjusting items: Long-term debt 689.3 751.8 (8)%
Fees 87,649 73,826 19% 267,881 238,197 12% Ancillary and logistical service expenses - 13,285 13,285 - 43,516 43,516 2019 2018 2019 over 2018 2019 2018 2019 over2018 Trade and other receivables 249,925 129,257 Depreciation and amortization expenses 51,919 49,451 Bidder registrations 165,500 123,000 35% 508,750 383,500 33% Severance and retention - 1,501 (100)% - 1,501 (100)% Debt 695.1 762.3 (9)%
Total service revenue 178,577 161,374 11% 585,555 551,736 6% Other costs of services 21,431 1,666 23,097 74,799 4,404 79,203 GTV $ 1,084,241 $ 1,039,427 4% $ 3,756,679 $ 3,626,551 4% Inventory 53,092 113,294 Stock option compensation expense 4,852 6,711 Consignors 14,000 13,600 3% 43,000 39,050 10% Gain on sale of equity accounted for investment - (4,935) 100% - (4,935) 100% Less: cash and cash equivalents (309.6) (228.8) 35%
Inventory sales revenue 111,219 83,972 32% 400,892 262,318 53% Cost of inventory sold 102,410 - 102,410 372,703 - 372,703 Revenue: Other current assets 44,364 49,055 Equity-classified PSU expense 8,754 8,978 Buyers 34,800 31,400 11% 109,050 96,750 13% Current income tax effect of adjusting items: Adjusted net debt* 385.5 533.5 (28)%
Total revenue 289,796 245,346 18% 986,447 814,054 21% SG&A expenses 88,138 5,553 93,691 268,786 17,803 286,589 Service revenue $ 178,577 $ 161,374 11% $ 585,555 $ 551,736 6% Income taxes receivable 10,488 6,365 Deferred income tax recovery (4,760) (3,774) Lots 98,400 89,000 11% 305,150 273,500 12% Severance and retention - (376) 100% - (376) 100% Net income $ 133.0 $ 122.9 8%
Service revenue as a % of total revenue 61.6% 65.8% (420) bps 59.4% 67.8% (840) bps Segment profit $ 49,333 $ 7,980 $ 57,313 $ 179,184 $ 25,252 $ 204,436 Revenue from inventory sales 111,219 83,972 32% 400,892 262,318 53% Total current assets 809,256 603,538 Unrealized foreign exchange (gain) loss (129) 501 Adjusted net income attributable to stockholders* $ 25,266 $ 19,328 31% $ 97,466 $ 82,183 19% Add: depreciation and amortization expenses 69.1 65.1 6%
Inventory sales revenue as a % of total revenue 38.4% 34.2% 420 bps 40.6% 32.2% 840 bps Total GTV 1,084,241 N/A N/A 3,756,679 N/A N/A Total revenue 289,796 245,346 18% 986,447 814,054 21% Gain on disposition of property, plant and equipment (1,071) (958) Weighted average number of dilutive shares outstanding 109,381,173 109,887,194 0% 109,634,195 109,133,378 0% Add: interest expense 42.8 43.7 (2)%
Costs of services 36,382 33,053 10% 122,719 112,743 9% A&M service revenue as a % of total GTV- Rate 13.8% N/A N/A 13.2% N/A N/A Operating expenses: Property, plant and equipment 476,776 486,599 Amortization of debt issuance costs 2,701 3,032 Diluted earnings per share attributable to stockholders $ 0.23 $ 0.21 10% $ 0.89 $ 0.79 13% Less: interest income (3.3) (2.7) 22%
Cost of inventory sold 102,410 74,341 38% 372,703 231,834 61% Costs of services 36,382 33,053 10% 122,719 112,743 9% Other non-current assets 148,375 29,395 Gain on disposition of equity investment - (4,935) Diluted adjusted EPS attributable to Stockholders* $ 0.23 $ 0.18 28% $ 0.89 $ 0.75 19% Add: income tax expense 40.7 13.2 208%
Selling, general and administrative expenses 93,691 88,323 6% 286,589 287,052 (0%) (in U.S $000's) Three months ended September 30, 2018 Nine months ended September 30, 2018 Cost of inventory sold 102,410 74,341 38% 372,703 231,834 61% Intangible assets 234,249 245,622 Other, net 9,892 (3,678) Pre-tax adjusting items:
Operating expenses 249,636 214,152 17% 834,729 685,192 22% A&M Other Consolidated A&M Other Consolidated Selling, general and administration expenses 93,691 88,323 6% 286,589 287,052 0% Goodwill 671,378 671,594 Net changes in operating assets and liabilities 139,372 (44,227) Severance and retention - 3.7 (100)%
Cost of inventory sold as a % of operating expenses 41.0% 34.7% 630 bps 44.6% 33.8% 1080 bps Service revenue $ 134,604 $ 26,770 $ 161,374 $ 463,076 $ 88,660 $ 551,736 Acquisition-related costs 45 2,007 (98)% 752 5,039 (85)% Deferred tax assets 17,797 15,648 Net cash provided by operating activities 309,105 97,147 Gain on sale of equity accounted for investment - (4.9) 100%
Operating income 40,160 31,194 29% 151,718 128,862 18% Inventory sales revenue 83,972 - 83,972 262,318 - 262,318 Depreciation and amortization expenses 17,692 16,723 6% 51,919 49,451 5% Total assets $ 2,357,831 $ 2,052,396 Investing activities: Adjusted EBITDA* $ 282.3 $ 241.0 17%
Operating income margin 13.9% 12.7% 120 bps 15.4% 15.8% (40) bps Total revenue 218,576 26,770 245,346 725,394 88,660 814,054 Gain on disposition of property, plant and equipment (821) (342) 140% (1,071) (958) 12% Property, plant and equipment additions (6,915) (13,394) Debt/net income 5.2x 6.2x (16%)
Net income attributable to stockholders 25,266 23,138 9% 97,466 85,993 13% Ancillary and logistical service expenses - 11,682 11,682 - 46,242 46,242 Foreign exchange loss 237 47 404% 1,118 31 3506% Liabilities and Equity Intangible asset additions (18,377) (19,410) Adjusted net debt*/adjusted EBITDA* 1.4x 2.2x (36%)
Adjusted net income attributable to stockholders Other costs of services 20,059 1,312 21,371 62,888 3,613 66,501 Total operating expenses 249,636 214,152 17% 834,729 685,192 22% Auction proceeds payable $ 453,278 $ 203,503 Proceeds on disposition of property, plant and equipment 5,610 2,524
(non-GAAP measure) 25,266 19,328 31% 97,466 82,183 19% Cost of inventory sold 74,341 - 74,341 231,834 - 231,834 Operating income 40,160 31,194 29% 151,718 128,862 18% Trade and other payables 166,796 201,255 Proceeds on disposal of equity investment - 6,147
Diluted earnings per share attributable to stockholders $ 0.23 $ 0.21 10% $ 0.89 $ 0.79 13% SG&A expenses 83,542 4,781 88,323 272,503 14,549 287,052 Interest expense (10,090) (10,473) (4)% (31,023) (32,720) (5)% Income taxes payable 16,053 2,312 Other, net (1,000) (4,674)
Diluted adjusted EPS attributable to stockholders Segment profit $ 40,634 $ 8,995 $ 49,629 $ 158,169 $ 24,256 $ 182,425 Other, net 1,962 7,182 (73)% 5,680 8,995 (37)% Short-term debt 5,805 19,896 Net cash used in investing activities (20,682) (28,807)
(non-GAAP measure) $ 0.23 $ 0.18 28% $ 0.89 $ 0.75 19% Total GTV 1,039,427 N/A N/A 3,626,551 N/A N/A Income before income taxes 32,032 27,903 15% 126,375 105,137 20% Current portion of long-term debt 18,027 13,126 Financing activities:
Effective tax rate 21.1% 17.2% 390 bps 22.8% 18.2% 460 bps A&M service revenue as a % of total GTV- Rate 12.9% N/A N/A 12.8% N/A N/A Income tax expense 6,760 4,791 41% 28,800 19,091 51% Total current liabilities 659,959 440,092 Share repurchase (42,012) -
Net income $ 25,272 $ 23,112 9% $ 97,575 $ 86,046 13% Dividends paid to stockholders (60,791) (56,116)
Total GTV 1,084,241 1,039,427 4% 3,756,679 3,626,551 4% Net income (loss) attributable to: Long-term debt 671,301 698,172 Issuances of share capital 12,440 27,072
Service revenue as a % of total GTV- Rate 16.5% 15.5% 100 bps 15.6% 15.2% 40 bps Stockholders $ 25,266 $ 23,138 9% $ 97,466 $ 85,993 13% Other non-current liabilities 150,400 41,980 Payment of withholding taxes on issuance of shares (5,260) (3,901)
Inventory sales revenue as a % of total GTV- Mix 10.3% 8.1% 220 bps 10.7% 7.2% 350 bps Non-controlling interests 6 (26) (123)% 109 53 106% Deferred tax liabilities 32,859 35,519 Proceeds from short-term debt 10,519 6,949
$ 25,272 $ 23,112 9% $ 97,575 $ 86,046 13% Total liabilities 1,514,519 1,215,763 Repayment of short-term debt (24,979) (3,372)
Earnings per share attributable Repayment of long-term debt (29,022) (58,825)
to stockholders: Commitments Repayment of finance lease obligations (4,848) (2,827)
Basic $ 0.23 $ 0.21 10% $ 0.90 $ 0.80 13% Contingencies Other, net - (1,176)
Diluted $ 0.23 $ 0.21 10% $ 0.89 $ 0.79 13% Contingently redeemable performance share units - 923 Net cash used in financing activities (143,953) (92,196)
Weighted average number of share outstanding: Stockholders' equity: Effect of changes in foreign currency rates on
Basic 108,003,390 108,365,427 0% 108,453,525 107,811,391 1% Share capital: cash, cash equivalents, and restricted cash 1,350 (3,215)
Diluted 109,381,173 109,887,194 0% 109,634,195 109,133,378 0% Common stock; no par value, unlimited shares Increase (decrease) 145,820 (27,071)
authorized, issued and outstanding shares: Beginning of period 305,567 331,116
108,210,335 (December 31, 2018: 108,682,030) 159,773 181,780 Cash, cash equivalents, and restricted cash, end of period $ 451,387 $ 304,045
Additional paid-in capital 59,289 56,885
Retained earnings 684,231 648,255
Accumulated other comprehensive loss (65,129) (56,277)
Stockholders' equity 838,164 830,643
Non-controlling interest 5,148 5,067
Total stockholders' equity 843,312 835,710
Total liabilities and equity $ 2,357,831 $ 2,052,396

 

Operating Free Cash Flow* ("OFCF") ReconciliationThe Company believes OFCF*, when compared on a trailing 12-month basis to different financial periods provides an effective measure of the cash generated by the business and provides useful information regarding cash flows remaining for discretionary return to stockholders, mergers and acquisitions, or debt reduction. The balance sheet scorecard includes OFCF* as a performance metric. OFCF* is also an element of the performance criteria for certain annual short-term and long-term incentive awards.

The following table reconciles OFCF* to cash provided by operating activities, which is the most directly comparable GAAP measure in, or calculated from, the consolidated statements of cash flows:

_______________________________ GTV and Condensed Consolidated Income Statements – Third Quarter Industrial live on site auction metrics (1) Please refer to page 11 for a summary of adjusting items for the three month and nine month ended September 30, 2019 and September 30, 2018. (1) Please refer to page 11 for a summary of adjusting items during the trailing 12-months ended September 30, 2019 and September 30, 2018.
1 Gross Transaction Value ("GTV") represents total proceeds from all items sold at the Company's live on site auctions and online marketplaces. GTV is not a measure of financial performance, liquidity, or revenue, and is not presented in the Company's consolidated financial statements. Three months ended September 30, Nine months ended September 30, (in U.S $000's) Three months ended September 30, 2019 Nine months ended September 30, 2019 (Expressed in thousands of United States dollars, except share and per share amounts) September 30, December 31, Nine months ended September 30, 2019 2018 (in U.S. $000's, except share and per share data) Three months ended September 30, Nine months ended September 30, (2) Adjusted net income attributable to stockholders* represents net income attributable to stockholders excluding the effects of adjusting items. (in U.S. $ millions) As at and for the 12 months ended September 30, (2) Adjusted EBITDA* is calculated by adding back depreciation and amortization expenses, interest expense, and income tax expense, and subtracting interestincome from net income excluding the pre-tax effects of adjusting items. (in U.S. $ millions) 12 months ended September 30,
% Change % Change A&M Other Consolidated A&M Other Consolidated (Unaudited) 2019 2018 Cash provided by (used in): Three months ended September 30, Nine months ended September 30, % Change % Change (3) Diluted adjusted EPS attributable to stockholders* is calculated by dividing adjusted net income attributable to stockholders*, net of the effect of dilutivesecurities, by the  weighted average number of dilutive shares outstanding. % Change (3) Adjusted net debt* is calculated by subtracting cash and cash equivalents from short and long-term debt. % Change
The Company presents both GAAP and non-GAAP measures to provide investors with additional information. Providing these non-GAAP measures along with GAAP measures allows for increased comparability of our ongoing performance from period to period. Non-GAAP financial measures referred to in this newsrelease are labeled as "non-GAAP measure" or designated as such with an asterisk (*). Please see page 9-11 for explanations of why the Company uses thesenon-GAAP measures and, if applicable, the reconciliation to the most comparable GAAP financial measures. (in U.S. $000's, except EPS) 2019 2018 2019 over 2018 2019 2018 2019 over 2018 Service revenue $ 150,093 $ 28,484 $ 178,577 $ 494,580 $ 90,975 $ 585,555 Assets Operating activities: % Change % Change 2019 2018 2019 over2018 2019 2018 2019 over 2018 2019 2018 2019 over 2018 (4) Adjusted net debt*/adjusted EBITDA* is calculated by dividing adjusted net debt* by adjusted EBITDA*. 2019 2018 2019 over 2018
Service revenue: Inventory sales revenue 111,219 - 111,219 400,892 - 400,892 Three months ended September 30, 2019 Nine months ended September 30, 2019 Cash and cash equivalents $ 309,555 $ 237,744 Net income $ 97,575 $ 86,046 2019 2018 2019 over 2018 2019 2018 2019 over 2018 Net income attributable to stockholders $ 25,266 $ 23,138 9% $ 97,466 $ 85,993 13% Short-term debt $ 5.8 $ 10.5 (45)% Cash provided by operating activities $ 356.2 $ 146.2 144%
Commissions $ 90,928 $ 87,548 4% $ 317,674 $ 313,539 1% Total revenue 261,312 28,484 289,796 895,472 90,975 986,447 % Change % Change Restricted cash 141,832 67,823 Adjustments for items not affecting cash: Number of auctions 46 45 2% 140 130 8% Pre-tax adjusting items: Long-term debt 689.3 751.8 (8)% Property, plant and equipment additions 10.4 16.1 (35)%
Fees 87,649 73,826 19% 267,881 238,197 12% Ancillary and logistical service expenses - 13,285 13,285 - 43,516 43,516