Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 08, 2019 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Ritchie Bros Auctioneers Inc | |
Entity Central Index Key | 0001046102 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Trading Symbol | rba | |
Entity Common Stock, Shares Outstanding | 108,984,083 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false |
Condensed Consolidated Income S
Condensed Consolidated Income Statements - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue: | ||
Total revenue | $ 303,429 | $ 260,178 |
Operating expenses: | ||
Direct expenses | 36,069 | 36,657 |
Selling, general and administrative expenses | 95,184 | 97,470 |
Acquisition-related costs | 669 | 1,633 |
Depreciation and amortization expenses | 17,115 | 16,191 |
Gain on disposition of property, plant and equipment | (149) | (345) |
Foreign exchange (gain) loss | 478 | (92) |
Total operating expenses | 269,841 | 227,305 |
Operating income | 33,588 | 32,873 |
Interest expense | (10,816) | (11,310) |
Other income, net | 2,039 | 913 |
Income before income taxes | 24,811 | 22,476 |
Income tax expense | 6,639 | 5,269 |
Net income | 18,172 | 17,207 |
Net income attributable to: | ||
Stockholders | 18,164 | 17,138 |
Non-controlling interests | 8 | 69 |
Net income | $ 18,172 | $ 17,207 |
Earnings per share attributable to stockholders: | ||
Basic | $ 0.17 | $ 0.16 |
Diluted | $ 0.17 | $ 0.16 |
Weighted average number of shares outstanding: | ||
Basic | 108,765,489 | 107,355,381 |
Diluted | 110,044,213 | 108,643,897 |
Service Revenues [Member] | ||
Revenue: | ||
Total revenue | $ 172,372 | $ 176,016 |
Operating expenses: | ||
Direct expenses | 36,069 | 36,657 |
Inventory Sales Revenue [Member] | ||
Revenue: | ||
Total revenue | 131,057 | 84,162 |
Operating expenses: | ||
Direct expenses | $ 120,475 | $ 75,791 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Condensed Consolidated Statements of Comprehensive Income [Abstract] | ||
Net income | $ 18,172 | $ 17,207 |
Other comprehensive income (loss), net of income tax: | ||
Foreign currency translation adjustment | (1,634) | 4,907 |
Total comprehensive income | 16,538 | 22,114 |
Total comprehensive income attributable to: | ||
Stockholders | 16,542 | 22,033 |
Non-controlling interests | (4) | 81 |
Total comprehensive income | $ 16,538 | $ 22,114 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Cash and cash equivalents | $ 266,491 | $ 237,744 |
Restricted cash | 56,743 | 67,823 |
Trade and other receivables | 220,452 | 129,257 |
Inventory | 75,529 | 113,294 |
Other current assets | 66,553 | 49,055 |
Income taxes receivable | 7,823 | 6,365 |
Total current assets | 693,591 | 603,538 |
Property, plant and equipment | 469,068 | 486,599 |
Other non-current assets | 127,079 | 29,395 |
Intangible assets | 241,968 | 245,622 |
Goodwill | 671,797 | 671,594 |
Deferred tax assets | 16,159 | 15,648 |
Total assets | 2,219,662 | 2,052,396 |
Liabilities and Equity | ||
Auction proceeds payable | 322,358 | 203,503 |
Trade and other payables | 181,015 | 201,255 |
Income taxes payable | 3,838 | 2,312 |
Short-term debt | 8,687 | 19,896 |
Current portion of long-term debt | 15,648 | 13,126 |
Total current liabilities | 531,546 | 440,092 |
Long-term debt | 687,689 | 698,172 |
Other non-current liabilities | 129,205 | 41,980 |
Deferred tax liabilities | 37,109 | 35,519 |
Total liabilities | 1,385,549 | 1,215,763 |
Commitments | ||
Contingencies | ||
Contingently redeemable performance share units | 984 | 923 |
Share capital: | ||
Common stock; no par value, unlimited shares authorized, issued and outstanding shares: 108,958,906 (December 31, 2018: 108,682,030) | 189,297 | 181,780 |
Additional paid-in capital | 50,054 | 56,885 |
Retained earnings | 646,614 | 648,255 |
Accumulated other comprehensive loss | (57,899) | (56,277) |
Stockholders' equity | 828,066 | 830,643 |
Non-controlling interest | 5,063 | 5,067 |
Total stockholders' equity | 833,129 | 835,710 |
Total liabilities and equity | $ 2,219,662 | $ 2,052,396 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Condensed Consolidated Balance Sheets [Abstract] | ||
Common stock, no par value | ||
Common stock, Shares Authorized, Unlimited | Unlimited | Unlimited |
Common stock, issued shares | 108,958,906 | 108,682,030 |
Common stock, outstanding shares | 108,958,906 | 108,682,030 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Common stock [Member] | Additional paid-in capital ("APIC") [Member] | Retained earnings [Member] | Accumulated other comprehensive loss [Member] | Non-controlling interest ("NCI") [Member] | Contingently redeemable non-controlling interest [Member]Contingently Redeemable Performance Share Units [Member] | Total |
Balance at Dec. 31, 2017 | $ 138,582 | $ 41,005 | $ 602,609 | $ (42,514) | $ 5,069 | $ 9,014 | $ 744,751 |
Balance, shares at Dec. 31, 2017 | 107,269,783 | ||||||
Net income | 17,138 | 69 | 17,207 | ||||
Other comprehensive loss | 4,895 | 12 | 4,907 | ||||
Comprehensive income | 17,138 | 4,895 | 81 | 22,114 | |||
Stock option exercises | $ 5,805 | (1,492) | 4,313 | ||||
Stock option exercises, shares | 202,112 | ||||||
Stock option compensation expense | 2,343 | 2,343 | |||||
Modification of PSUs | 703 | (134) | 6,132 | 569 | |||
Equity-classified PSU expense | 1,678 | 1,357 | 1,678 | ||||
Equity-classified PSU dividend equivalents | 90 | (200) | 110 | (110) | |||
Change in fair value of contingently redeemable PSUs | 37 | (37) | 37 | ||||
Cash dividends paid | (18,245) | (18,245) | |||||
Balance at Mar. 31, 2018 | $ 144,387 | 44,327 | 601,205 | (37,619) | 5,150 | 16,576 | 757,450 |
Balance, shares at Mar. 31, 2018 | 107,471,895 | ||||||
Balance at Dec. 31, 2018 | $ 181,780 | 56,885 | 648,255 | (56,277) | 5,067 | 923 | 835,710 |
Balance, shares at Dec. 31, 2018 | 108,682,030 | ||||||
Net income | 18,164 | 8 | 18,172 | ||||
Other comprehensive loss | (1,622) | (12) | (1,634) | ||||
Comprehensive income | 18,164 | (1,622) | (4) | 16,538 | |||
Stock option exercises | $ 2,478 | (850) | $ 1,628 | ||||
Stock option exercises, shares | 82,926 | 82,926 | |||||
Issuance of common stock related to vesting of share units | $ 5,039 | (10,064) | $ (5,025) | ||||
Issuance of common stock related to vesting of share units, shares | 193,950 | ||||||
Stock option compensation expense | 1,539 | 1,539 | |||||
Equity-classified PSU expense | 2,322 | 46 | 2,322 | ||||
Equity-classified PSU dividend equivalents | 222 | (237) | 15 | (15) | |||
Cash dividends paid | (19,568) | (19,568) | |||||
Balance at Mar. 31, 2019 | $ 189,297 | $ 50,054 | $ 646,614 | $ (57,899) | $ 5,063 | $ 984 | $ 833,129 |
Balance, shares at Mar. 31, 2019 | 108,958,906 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Operating activities: | ||
Net income | $ 18,172 | $ 17,207 |
Adjustments for items not affecting cash: | ||
Depreciation and amortization expenses | 17,115 | 16,191 |
Stock option compensation expense | 1,539 | 2,343 |
Equity-classified PSU expense | 2,368 | 3,035 |
Deferred income tax expense | 1,057 | 1,265 |
Unrealized foreign exchange (gain) loss | (48) | 263 |
Gain on disposition of property, plant and equipment | (149) | (345) |
Amortization of debt issuance costs | 934 | 1,066 |
Other, net | 3,510 | 948 |
Net changes in operating assets and liabilities | 27,405 | 25,265 |
Net cash provided by operating activities | 71,903 | 67,238 |
Investing activities: | ||
Property, plant and equipment additions | (2,801) | (2,564) |
Intangible asset additions | (5,625) | (7,034) |
Proceeds on disposition of property, plant and equipment | 262 | 1,066 |
Other, net | (4,674) | |
Net cash used in investing activities | (8,164) | (13,206) |
Financing activities: | ||
Dividends paid to stockholders | (19,568) | (18,245) |
Issuances of share capital | 1,628 | 4,313 |
Payment of withholding taxes on issuance of shares | (2,047) | |
Proceeds from short-term debt | 6,741 | 308 |
Repayment of short-term debt | (17,946) | (1,754) |
Repayment of long-term debt | (12,235) | (29,237) |
Repayment of finance lease obligations | (1,269) | (802) |
Net cash used in financing activities | (44,696) | (45,417) |
Effect of changes in foreign currency rates on cash, cash equivalents, and restricted cash | (1,376) | 1,627 |
Increase | 17,667 | 10,242 |
Beginning of period | 305,567 | 331,116 |
Cash, cash equivalents, and restricted cash, end of period | $ 323,234 | $ 341,358 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 1. Summary of significant accounting policies Ritchie Bros. Auctioneers Incorporated and its subsidiaries (collectively referred to as the “Company”) provide global asset management and disposition services, offering customers end-to-end solutions for buying and selling used industrial equipment and other durable assets through its unreserved live on site auctions, online marketplaces, listing services, and private brokerage services. Ritchie Bros. Auctioneers Incorporated is a company incorporated in Canada under the Canada Business Corporations Act, whose shares are publicly traded on the Toronto Stock Exchange (“TSX”) and the New York Stock Exchange (“NYSE”). (a) Basis of preparation These unaudited condensed consolidated interim financial statements have been prepared in accordance with United States generally accepted accounting principles (“US GAAP”). They include the accounts of Ritchie Bros. Auctioneers Incorporated and its subsidiaries from their respective dates of formation or acquisition. All significant intercompany balances and transactions have been eliminated. Certain information and footnote disclosure required by US GAAP for complete annual financial statements have been omitted and, therefore, these unaudited condensed consolidated interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2018, included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”). In the opinion of management, these unaudited condensed consolidated interim financial statements reflect all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly, in all material respects, the Company’s consolidated financial position, results of operations, cash flows and changes in equity for the interim periods presented. The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. (b) Revenue recognition Revenues are comprised of: · Service revenue, including the following: i. Revenue from auction and marketplace (“A&M”) activities, including commissions earned at our live auctions, online marketplaces, and private brokerage services where we act as an agent for consignors of equipment and other assets, and various auction-related fees, including listing and buyer transaction fees; and ii. Other services revenue, including revenue from listing services, refurbishment, logistical services, financing, appraisal fees and other ancillary service fees; and · I nventory sales revenue as part of A&M activities The Company recognizes revenue when control of the promised goods or services is transferred to our customers, or upon completion of the performance obligation, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. For live event-based auctions or online auctions, revenue is recognized when the auction sale is complete and the Company has determined that the sale proceeds are collectible. Revenue is measured at the fair value of the consideration received or receivable and is shown net of value-added tax and duties. 1. Summary of significant accounting policies (continued) (b) Revenue recognition (continued) Service revenue Commissions from sales at the Company’s auctions represent the percentage earned by the Company on the gross proceeds from equipment and other assets sold at auction. The majority of the Company’s commissions are earned as a pre-negotiated fixed rate of the gross selling price. Other commissions from sales at the Company’s auctions are earned from underwritten commission contracts, when the Company guarantees a certain level of proceeds to a consignor. The Company accepts equipment and other assets on consignment stimulating buyer interest through professional marketing techniques, and matches sellers (also known as consignors) to buyers through the auction or private sale process. Prior to offering an item for sale on its online marketplaces, the Company also performs inspections. Following the sale of the item, the Company invoices the buyer for the purchase price of the asset, taxes, and, if applicable, the buyer transaction fee, collects payment from the buyer, and remits the proceeds to the seller, net of the seller commissions, applicable taxes, and applicable fees. Commissions are calculated as a percentage of the hammer price of the property sold at auction. Fees are also charged to sellers for listing and inspecting equipment. Other revenue earned in the process of conducting the Company’s auctions include administrative, documentation, and advertising fees. On the fall of the auctioneer’s hammer, the highest bidder becomes legally obligated to pay the full purchase price, which is the hammer price of the property purchased and the seller is legally obligated to relinquish the property in exchange for the hammer price less any seller’s commissions. Commission and fee revenue are recognized on the date of the auction sale upon the fall of the auctioneer’s hammer. Under the standard terms and conditions of its auction sales, the Company is not obligated to pay a consignor for property that has not been paid for by the buyer, provided the property has not been released to the buyer. If the buyer defaults on its payment obligation, also referred to as a collapsed sale, the sale is cancelled in the period in which the determination is made, and the property is returned to the consignor or placed in a later event-based or online auction. Historically cancelled sales have not been material. Online marketplace commission revenue is reduced by a provision for disputes, which is an estimate of disputed items that are expected to be settled at a cost to the Company, related to settlements of discrepancies under the Company’s equipment condition certification program. The equipment condition certification refers to a written inspection report provided to potential buyers that reflects the condition of a specific piece of equipment offered for sale, and includes ratings, comments, and photographs of the equipment following inspection by one of the Company’s equipment inspectors. The equipment condition certification provides that a buyer may file a written dispute claim during an eligible dispute period for consideration and resolution at the sole determination of the Company if the purchased equipment is not substantially in the condition represented in the inspection report. Typically disputes under the equipment condition certification program are settled with minor repairs or additional services, such as washing or detailing the item; the estimated costs of such items or services are included in the provision for disputes. Commission revenue are recorded net of commissions owed to third parties, which are principally the result of situations when the commission is shared with a consignor or with the counterparty in an auction guarantee risk and reward sharing arrangement. Additionally, in certain situations, commissions are shared with third parties who introduce the Company to consignors who sell property at auction. 1. Summary of significant accounting policies (continued) (b) Revenue recognition (continued) Service revenue (continued) Underwritten commission contracts can take the form of guarantee contracts. Guarantee contracts typically include a pre-negotiated percentage of the guaranteed gross proceeds plus a percentage of proceeds in excess of the guaranteed amount. If actual auction proceeds are less than the guaranteed amount, commission is reduced; if proceeds are sufficiently lower, the Company can incur a loss on the sale. Losses, if any, resulting from guarantee contracts are recorded in the period in which the relevant auction is completed. If a loss relating to a guarantee contract held at the period end to be sold after the period end is known or is probable and estimable at the financial statement reporting date, the loss is accrued in the financial statements for that period. The Company’s exposure from these guarantee contracts fluctuates over time. Other services revenue also includes fees for refurbishment, logistical services, financing, appraisal fees and other ancillary service fees. Fees are recognized in the period in which the service is provided to the customer. I nventory sales revenue Underwritten commission contracts can take the form of inventory contracts. Revenue related to inventory contracts is recognized in the period in which the sale is completed, title to the property passes to the purchaser and the Company has fulfilled any other obligations that may be relevant to the transaction. In its role as auctioneer, the Company auctions its inventory to equipment buyers through the auction process. Following the sale of the item, the Company invoices the buyer for the purchase price of the asset, taxes, and, if applicable, the buyer transaction fee, and collects payment from the buyer. On the fall of the auctioneer’s hammer, the highest bidder becomes legally obligated to pay the full purchase price, which is the hammer price of the property purchased. Title to the property is transferred in exchange for the hammer price, and if applicable, the buyer transaction fee plus applicable taxes. (c) Costs of services Costs of services are comprised of expenses incurred in direct relation to conducting auctions (“direct expenses”), earning online marketplace revenue, and earning other fee revenue. Direct expenses include direct labour, buildings and facilities charges, and travel, advertising and promotion costs. Costs of services incurred to earn online marketplace revenue in addition to the costs listed above also include inspection costs. Inspections are generally performed at the seller’s physical location. The cost of inspections includes payroll costs and related benefits for the Company’s employees that perform and manage field inspection services, the related inspection report preparation and quality assurance costs, fees paid to contractors who perform field inspections, related travel and incidental costs for the Company’s inspection service organization, and office and occupancy costs for its inspection services personnel. Costs of earning online marketplace revenue also include costs for the Company’s customer support, online marketplace operations, logistics, title and lien investigation functions. Costs of services incurred in earning other fee revenue include ancillary and logistical service expenses, direct labour (including commissions on sales), software maintenance fees, and materials. Costs of services exclude depreciation and amortization expenses. (d) Cost of inventory sold Cost of inventory sold includes the purchase price of assets sold for the Company’s own account and is determined using a specific identification basis. 1. Summary of significant accounting policies (continued) (e) Share-based payments The Company classifies a share-based payment award as an equity or liability payment based on the substantive terms of the award and any related arrangement. Equity-classified share-based payments Share unit plans The Company has a senior executive performance share unit (“PSU”) plan and an employee PSU plan that provides for the award of PSUs to certain senior executives and employees, respectively, of the Company. The Company has the option to settle certain share unit awards in cash or shares and expects to settle them in shares. The cost of PSUs granted is measured at the fair value of the underlying PSUs at the grant date. PSUs vest based on the passage of time and achievement of performance criteria. The Company also has a senior executive restricted share unit (“RSU”) plan and an employee RSU plan that provides for the award of RSUs to certain senior executives and employees, respectively, of the Company. The Company has the option to settle certain share unit awards in cash or shares and expects to settle all grants on and after 2017 in shares. The cost of RSUs granted is measured at the fair value based on the fair value of the Company’s common shares at the grant date. RSUs vest based on the passage of time and include restrictions related to employment. This fair value of awards expected to vest under these plans is expensed over the respective remaining service period of the individual awards, on an accelerated recognition basis, with the corresponding increase to APIC recorded in equity. At the end of each reporting period, the Company revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognized in earnings, such that the consolidated expense reflects the revised estimate, with a corresponding adjustment to equity. Dividend equivalents on the equity-classified PSUs and RSUs are recognized as a reduction to retained earnings over the service period. Stock option plans The Company has three stock option compensation plans that provide for the award of stock options to selected employees, directors and officers of the Company. The cost of options granted is measured at the fair value of the underlying option at the grant date using the Black-Scholes option pricing model. The fair value of options expected to vest under these plans is expensed over the respective remaining service period of the individual awards, on an accelerated recognition basis, with the corresponding increase to APIC recorded in equity. Upon exercise, any consideration paid on exercise of the stock options and amounts fully amortized in APIC are credited to the common shares. Liability-classified share-based payments The Company maintains other share unit compensation plans that vest over a period of up to three years after grant. Under those plans, the Company is either required or expects to settle vested awards on a cash basis or by providing cash to acquire shares on the open market on the employee’s behalf, where the settlement amount is determined based on the average price of the Company’s common shares prior to the vesting date or, in the case of deferred share unit (“DSU”) recipients, following cessation of service on the Board of Directors. These awards are classified as liability awards, measured at fair value at the date of grant and re-measured at fair value at each reporting date up to and including the settlement date. The determination of the fair value of the share units under these plans is described in note 1 6 . The fair value of the awards is expensed over the respective vesting period of the individual awards with recognition of a corresponding liability. Changes in fair value after vesting are recognized through compensation expense. Compensation expense reflects estimates of the number of instruments expected to vest. 1. Summary of significant accounting policies (continued) (e) Share-based payments (continued) Liability-classified share-based payments (continued) The impact of forfeitures and fair value revisions, if any, are recognized in earnings such that the cumulative expense reflects the revisions, with a corresponding adjustment to the settlement liability. Liability-classified share unit liabilities due within 12 months of the reporting date are presented in trade and other payables while settlements due beyond 12 months of the reporting date are presented in other non-current liabilities. (f) Leases The Company determines if an arrangement is a lease at inception. The Company may have lease agreements with lease and non-lease components, which are generally accounted for separately. Additionally, for certain vehicle and equipment leases, management applies a portfolio approach to account for the right-of-use (“ROU”) assets and liabilities for assets leased with similar lease terms. Operating leases Operating leases are included in other non-current assets, trade and other payables, and other non-current liabilities in our consolidated balance sheets if the initial lease term is greater than 12 months. For leases with an initial term of 12 months or less the Company recognizes those lease payments on a straight-line basis over the lease term. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, management uses the incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Management uses the implicit rate when readily determinable. The Company includes lease payments for renewal or termination options in its determination of lease term, ROU asset, and lease liability when it is reasonably certain that the Company will exercise these options. Lease expense for lease payments is recognized on a straight-line basis over the lease term and are included in Cost s of services or Selling, general, and administrative (“SG&A”) expenses. Finance leases Finance lease ROU assets are included in property , plant and equipment, trade and other payables, and other non-current liabilities in our consolidated balance sheets. Finance lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, management uses the incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Management uses the implicit rate when readily determinable. The Company includes lease payments for renewal, purchase options, or termination options in its determination of lease term, ROU asset, and lease liability when it is reasonably certain that the Company will exercise these options. Finance lease ROU assets are generally amortized over the lease term and are included in depreciation expense. The interest on the finance lease liabilities is included in interest expense. 1. Summary of significant accounting policies (continued) (g) Inventories Inventory consists of equipment and other assets purchased for resale in an upcoming live on site auction or online marketplace event. The Company typically purchases inventory for resale through a competitive process where the consignor or vendor has determined this to be the preferred method of disposition through the auction process. In addition, certain jurisdictions require auctioneers to hold title to assets and facilitate title transfer on sale. Inventory is valued at the lower of cost and net realizable value where net realizable value represents the expected sale price upon disposition less make-ready costs and the costs of disposal and transportation. As part of its government business, the Company purchases inventory for resale as part of its commitment to purchase certain surplus government property (note 18). The significant elements of cost include the acquisition price of the inventory and make-ready costs to prepare the inventory for sale that are not selling expenses and in-bound transportation costs. Write-downs to the carrying value of inventory are recorded in cost of inventory sold on the consolidated income statement. (h) Impairment of long-lived and indefinite-lived assets Long-lived assets, comprised of property, plant and equipment and intangible assets subject to amortization, are assessed for impairment whenever events or circumstances indicate that their carrying value may not be recoverable. For the purpose of impairment testing, long-lived assets are grouped and tested for recoverability at the lowest level that generates independent cash flows. An impairment loss is recognized when the carrying value of the assets or asset groups is greater than the future projected undiscounted cash flows. The impairment loss is calculated as the excess of the carrying value over the fair value of the asset or asset group. Fair value is based on valuation techniques or third party appraisals. Significant estimates and judgments are applied in determining these cash flows and fair values. Indefinite-lived intangible assets are tested annually for impairment as of December 31, and between annual tests if indicators of potential impairment exist. The Company has the option of performing a qualitative assessment to first determine whether the quantitative impairment test is necessary. This involves an assessment of qualitative factors to determine the existence of events or circumstances that would indicate whether it is more likely than not that the carrying amount of the indefinite-lived intangible asset is less than its fair value. If the qualitative assessment indicates it is not more likely than not that the carrying amount is less than its fair value, a quantitative impairment test is not required. Where a quantitative impairment test is required, the procedure is to compare the indefinite-lived intangible asset’s fair value with its carrying amount. An impairment loss is recognized as the difference between the indefinite-lived intangible asset’s carrying amount and its fair value. (i) Goodwill Goodwill represents the excess of the purchase price of an acquired enterprise over the fair value assigned to the assets acquired and liabilities assumed in a business combination. Goodwill is not amortized, but it is tested annually for impairment at the reporting unit level as of December 31, and between annual tests if indicators of potential impairment exist. The Company has the option of performing a qualitative assessment of a reporting unit to first determine whether the quantitative impairment test is necessary. This involves an assessment of qualitative factors to determine the existence of events or circumstances that would indicate whether it is more likely than not that the carrying amount of the reporting unit to which goodwill belongs is less than its fair value. If the qualitative assessment indicates it is not more likely than not that the reporting unit’s carrying amount is less than its fair value, a quantitative impairment test is not required. 1. Summary of significant accounting policies (continued) (i) Goodwill (continued) If a quantitative impairment test is required, the procedure is to identify potential impairment by comparing the reporting unit’s fair value with its carrying amount, including goodwill. The reporting unit’s fair value is determined using various valuation approaches and techniques that involve assumptions based on what the Company believes a hypothetical marketplace participant would use in estimating fair value on the measurement date. An impairment loss is recognized as the difference between the reporting unit’s carrying amount and its fair value. If the difference between the reporting unit’s carrying amount and fair value is greater than the amount of goodwill allocated to the reporting unit, the impairment loss is restricted by the amount of the goodwill allocated to the reporting unit. (j) New and amended accounting standards Effective January 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842) . The Company adopted the new standard utilizing the “optional transition method”, which permits the Company to apply the new lease standard at the adoption date. As the optional transition method is being utilized, the Company’s reporting for the comparative periods presented in the financial statements in which it adopts Topic 842 will continue to be reported pursuant to Topic 840. On adoption, the Company elected to utilize the package of practical expedients permitted within the new standard, which among other things, allows the Company to carryforward the historical lease classification. In addition, the Company elected to utilize the hindsight practical expedient to determine the reasonably certain lease term for existing leases. While lease classification will remain unchanged, hindsight will result in generally longer accounting lease terms where the Company has determined that it is reasonably certain to exercise certain renewal options and thereby increasing the useful lives of the corresponding leasehold improvements. The Company also elected not to recognize the lease assets and liabilities for leases with an initial term of 12 months or less and will recognize those lease payments on a straight-line basis over the lease term. On adoption of the new standard the Company recognized ROU assets of $103,897,000 with a corresponding increase in operating lease liability. Offsetting the increase in ROU assets recognized was the reclassification of prepaid rent and deferred rent liabilities to ROU assets of $5,752,000 . There was no impact on retained earnings or cash flows. The adoption of the standard had no impact on our debt-covenant compliance under our current agreements. |
Significant Judgments, Estimate
Significant Judgments, Estimates and Assumptions | 3 Months Ended |
Mar. 31, 2019 | |
Significant Judgments, Estimates and Assumptions [Abstract] | |
Significant Judgments, Estimates and Assumptions | 2. Significant judgments, estimates and assumptions The preparation of financial statements in conformity with US GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Future differences arising between actual results and the judgments, estimates and assumptions made by the Company at the reporting date, or future changes to estimates and assumptions, could necessitate adjustments to the underlying reported amounts of assets, liabilities, revenues and expenses in future reporting periods. Judgments, estimates and underlying assumptions are evaluated on an ongoing basis by management, and are based on historical experience and other factors including expectations of future events that are believed to be reasonable under the circumstances. However, existing circumstances and assumptions about future developments may change due to market changes or circumstances and such changes are reflected in the assumptions when they occur. Significant items subject to estimates include purchase price allocations, the carrying amounts of goodwill, the useful lives of long-lived assets, share based compensation, the determination of lease term and lease liabilities, deferred income taxes, reserves for tax uncertainties, and other contingencies. |
Seasonality
Seasonality | 3 Months Ended |
Mar. 31, 2019 | |
Seasonality [Abstract] | |
Seasonality | 3. Seasonality The Company’s operations are both seasonal and event driven. Revenues tend to be the highest during the second and fourth calendar quarters. The Company generally conducts more live, on site auctions during these quarters than during the first and third calendar quarters. Late December through mid-February and mid-July through August are traditionally less active periods. Online volumes are similarly affected as supply of used equipment is lower in the third quarter as it is actively being used and not available for sale. |
Segmented Information
Segmented Information | 3 Months Ended |
Mar. 31, 2019 | |
Segmented Information [Abstract] | |
Segmented Information | 4. Segmented information The Company’s principal business activity is the management and disposition of used industrial equipment and other durable assets. The Company’s operations are comprised of one reportable segment and other business activities that are not reportable as follows: · Auctions and Marketplaces – This is the Company’s only reportable segment, which consists of the Company’s live on site auctions, its online auctions and marketplaces, and its brokerage service; · Other includes the results of Ritchie Bros. Financial Services (“RBFS”), Mascus online services, and the results from various value-added services and make-ready activities, including the Company’s equipment refurbishment services, a sset a ppraisal s ervices, and Ritchie Bros. Logistical Services. Three months ended March 31, 2019 A&M Other Consolidated Service revenue $ 143,437 $ 28,935 $ 172,372 Inventory sales revenue 131,057 - 131,057 Total revenue $ 274,494 $ 28,935 $ 303,429 Costs of services 20,817 15,252 36,069 Cost of inventory sold 120,475 - 120,475 SG&A expenses 89,182 6,002 95,184 Segment profit $ 44,020 $ 7,681 $ 51,701 Acquisition-related costs 669 Depreciation and amortization expenses ("D&A") 17,115 Gain on disposition of property, plant and equipment ("PPE") (149) Foreign exchange loss 478 Operating income $ 33,588 Interest expense (10,816) Other income, net 2,039 Income tax expense (6,639) Net income $ 18,172 4 . Segmented information (continued) Three months ended March 31, 2018 A&M Other Consolidated Service revenue $ 148,405 $ 27,611 $ 176,016 Inventory sales revenue 84,162 - 84,162 Total revenue $ 232,567 $ 27,611 260,178 Costs of services 21,448 15,209 36,657 Cost of inventory sold 75,791 75,791 SG&A expenses 93,002 4,468 97,470 Segment profit $ 42,326 $ 7,934 $ 50,260 Acquisition-related costs 1,633 D&A expenses 16,191 Gain on disposition of PPE (345) Foreign exchange gain (92) Operating income $ 32,873 Interest expense (11,310) Other income, net 913 Income tax expense (5,269) Net income $ 17,207 The Company‘s geographic breakdown of total revenue as determined by the revenue and location of assets, which represents property, plant and equipment is as follows: United States Canada Europe Other Consolidated Total revenue for the three months ended: March 31, 2019 $ 183,573 $ 31,531 $ 54,785 $ 33,540 $ 303,429 March 31, 2018 135,563 65,809 34,574 24,232 260,178 |
Revenues
Revenues | 3 Months Ended |
Mar. 31, 2019 | |
Revenues [Abstract] | |
Revenues | 5. Revenue The Company’s revenue from the rendering of services is as follows: Three months ended March 31, 2019 2018 Service revenue: Commissions $ 92,280 $ 101,294 Fees 80,092 74,722 172,372 176,016 Inventory sales revenue 131,057 84,162 $ 303,429 $ 260,178 |
Operating Expenses
Operating Expenses | 3 Months Ended |
Mar. 31, 2019 | |
Operating Expenses [Abstract] | |
Operating Expenses | 6. Operating expenses Costs of services Three months ended March 31, 2019 2018 Ancillary and logistical service expenses $ 13,759 $ 14,580 Employee compensation expenses 10,807 9,019 Buildings, facilities and technology expenses 2,134 2,627 Travel, advertising and promotion expenses 5,868 6,808 Other costs of services 3,501 3,623 $ 36,069 $ 36,657 SG&A expenses Three months ended March 31, 2019 2018 Employee compensation expenses $ 61,464 63,293 Buildings, facilities and technology expenses 15,915 15,273 Travel, advertising and promotion expenses 9,142 9,719 Professional fees 4,075 4,267 Other SG&A expenses 4,588 4,918 $ 95,184 $ 97,470 Acquisition-related costs Acquisition-related costs consist of operating expenses directly incurred as part of a business combination, due diligence and integration planning related to the IronPlanet acquisition, and continuing employment costs that are recognized separately from our business combinations. Three months ended March 31, 2019 2018 IronPlanet: Other acquisition-related costs $ 82 $ 639 Other acquisitions: Continuing employment costs 87 968 Other acquisition-related costs 500 26 $ 669 $ 1,633 Depreciation and amortization expenses Three months ended March 31, 2019 2018 Depreciation expense $ 7,168 $ 6,916 Amortization expense 9,947 9,275 $ 17,115 $ 16,191 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Taxes [Abstract] | |
Income Taxes | 7 . Income taxes At the end of each interim period, the Company estimates the effective tax rate expected to be applicable for the full fiscal year. The estimate reflects, among other items, management’s best estimate of operating results. It does not include the estimated impact of foreign exchange rates or unusual and/or infrequent items, which may cause significant variations in the customary relationship between income tax expense and income before income taxes. For the three months ended March 31, 2019, income tax expense was $6,639,000 , compared to an income tax expense of $5,269,000 for the same period in 2018. Our effective tax rate was 27% in the first quarter of 2019, compared to 23% in the first quarter of 2018. |
Earnings Per Share Attributable
Earnings Per Share Attributable to Stockholders | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share Attributable to Stockholders [Abstract] | |
Earnings Per Share Attributable to Stockholders | 8 . Earnings per shar e attributable to stockholders Basic earnings per share (“EPS”) attributable to stockholders was calculated by dividing the net income attributable to stockholders by the weighted average (“WA”) number of common shares outstanding during the period. Diluted EPS attributable to stockholders was calculated by dividing the net income attributable to stockholders by the WA number of shares of common stock outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include unvested PSUs, RSUs, and outstanding stock options. The dilutive effect of potentially dilutive securities is reflected in diluted earnings per share by application of the treasury stock method. Under the treasury stock method, an increase in the fair market value of the Company’s common stock can result in a greater dilutive effect from potentially dilutive securities. Three months ended March 31, 2019 Net income WA attributable to number Per share stockholders of shares amount Basic $ 18,164 108,765,489 $ 0.17 Effect of dilutive securities: Share units - 486,626 - Stock options - 792,098 - Diluted $ 18,164 110,044,213 $ 0.17 Three months ended March 31, 2018 Net income WA attributable to number Per share stockholders of shares amount Basic $ 17,138 107,355,381 $ 0.16 Effect of dilutive securities: Share units - 358,087 - Stock options - 930,429 - Diluted $ 17,138 108,643,897 $ 0.16 |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 3 Months Ended |
Mar. 31, 2019 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | 9 . Supplemental cash flow information Three months ended March 31, 2019 2018 Trade and other receivables $ (91,605) $ (90,077) Inventory 37,135 3,090 Advances against auction contracts (1,041) (223) Prepaid expenses and deposits (492) (3,443) Income taxes receivable (1,458) 1,903 Auction proceeds payable 120,036 103,390 Trade and other payables (36,887) 8,202 Income taxes payable 1,496 920 Share unit liabilities - 1,192 Other 221 311 Net changes in operating assets and liabilities $ 27,405 $ 25,265 Three months ended March 31, 2019 2018 Interest paid, net of interest capitalized $ 16,521 $ 16,877 Interest received 855 392 Net income taxes paid 6,339 1,265 Non-cash purchase of property, plant and equipment under capital lease $ 2,564 $ 573 March 31, December 31, 2019 2018 Cash and cash equivalents $ 266,491 $ 237,744 Restricted cash 56,743 67,823 Cash, cash equivalents, and restricted cash $ 323,234 $ 305,567 |
Fair Value Measurement
Fair Value Measurement | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Measurement [Abstract] | |
Fair Value Measurement | 10. Fair value measurement All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement or disclosure: ● Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities that the entity can access at measurement date; ● Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly; and ● Level 3: Unobservable inputs for the asset or liability. March 31, 2019 December 31, 2018 Category Carrying amount Fair value Carrying amount Fair value Fair values disclosed: Cash and cash equivalents Level 1 $ 266,491 $ 266,491 $ 237,744 $ 237,744 Restricted cash Level 1 56,743 56,743 67,823 67,823 Short-term debt Level 2 8,687 8,687 19,896 19,896 Long-term debt Senior unsecured notes Level 1 489,579 510,938 489,136 487,813 Term loans Level 2 213,758 215,879 222,162 224,582 The carrying value of the Company‘s cash and cash equivalents, restricted cash, trade and other receivables, advances against auction contracts, auction proceeds payable, trade and other payables, and short term debt approximate their fair values due to their short terms to maturity. The carrying value of the term loans, before deduction of deferred debt issue costs, approximates their fair value as the interest rates on the loans were short-term in nature. The fair value of the senior unsecured notes is determined by reference to a quoted market price . |
Other Current Assets
Other Current Assets | 3 Months Ended |
Mar. 31, 2019 | |
Other Current Assets [Abstract] | |
Other Current Assets | 11. Other current assets March 31, December 31, 2019 2018 Advances against auction contracts $ 16,573 $ 15,558 Assets held for sale 31,221 15,051 Prepaid expenses and deposits 18,759 18,446 $ 66,553 $ 49,055 Assets held for sale Balance, December 31, 2018 15,051 Reclassified from property, plant and equipment 16,170 Balance, March 31, 2019 $ 31,221 11. Other current assets (continued) Assets held for sale (continued) As at March 31, 2019, the Company’s assets held for sale consisted of five excess properties located in the United States. Management made the strategic decision to sell these properties to maximize the Company’s return on invested capital. The estimated sales proceeds are expected to be in excess of the current book value. The properties have been actively marketed for sale, and management expects the sales to be completed within 12 months of March 31, 2019. This property belongs to the A&M reportable segment. |
Other Non-current Assets
Other Non-current Assets | 3 Months Ended |
Mar. 31, 2019 | |
Other Non-current Assets [Abstract] | |
Other Non-current Assets | 12. Other non-current assets March 31, December 31, 2019 2018 Right-of-use assets $ 96,805 $ - Tax receivable 13,234 12,705 Equity-accounted investments 4,235 4,010 Deferred debt issue costs 1,884 2,017 Other 10,921 10,663 $ 127,079 $ 29,395 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2019 | |
Debt [Abstract] | |
Debt | 13. Debt Carrying amount March 31, December 31, 2019 2018 Short-term debt $ 8,687 $ 19,896 Long-term debt: Term loans: Denominated in Canadian dollars, secured, bearing interest at a weighted average rate of 4.342% , due in monthly installments of interest only and quarterly installments of principal, maturing in October 2021 163,189 161,891 Denominated in United States dollars, secured, bearing interest at a weighted average rate of 4.606% , due in weekly installments of interest only and quarterly installments of principal, maturing in October 2021 52,690 62,690 Less: unamortized debt issue costs (2,121) (2,419) Senior unsecured notes: Bearing interest at 5.375% due in semi-annual installments, with the full amount of principal due in January 2025 500,000 500,000 Less: unamortized debt issue costs (10,421) (10,864) Total long-term debt 703,337 711,298 Total debt $ 712,024 $ 731,194 Long-term debt: Current portion $ 15,648 $ 13,126 Non-current portion 687,689 698,172 Total long-term debt $ 703,337 $ 711,298 13. Debt (continued) During the quarter, the Company made voluntary prepayments totalling $10,000,000 (2018 - $25,000,000 ) on the term loan denominated in United States dollars. Prepayments are applied against future scheduled mandatory payments. The amount available pursuant to the term loan facility was only available to finance the acquisition of IronPlanet and will not be available for other corporate purposes upon repayment of amounts borrowed under that facility. Short-term debt is comprised of drawings in different currencies on the Company’s committed revolving credit facilities, and for the three months ended March 31, 2019, have a weighted average interest rate of 3.6% (December 31, 2018: 2.3% ). As at March 31, 2019, the Company had unused committed revolving credit facilities aggregating $485,366,000 of which $480,962,000 is available until October 27, 2021. |
Other Non-current Liabilities
Other Non-current Liabilities | 3 Months Ended |
Mar. 31, 2019 | |
Other Non-current Liabilities [Abstract] | |
Other Non-current Liabilities | 14 . Other non-current liabilities March 31, December 31, 2019 2018 Operating lease liability $ 93,035 $ - Tax payable 22,438 22,583 Finance lease liability 10,912 10,146 Other 2,820 9,251 $ 129,205 $ 41,980 |
Equity and Dividends
Equity and Dividends | 3 Months Ended |
Mar. 31, 2019 | |
Equity and Dividends [Abstract] | |
Equity and Dividends | 15 . Equity and dividends Share capital Preferred stock Unlimited number of senior preferred shares, without par value, issuable in series. Unlimited number of junior preferred shares, without par value, issuable in series. All issued shares are fully paid. No preferred shares have been issued. Dividends Declared and paid The Company declared and paid the following dividends during the three months ended March 31, 2019 and 201 8: Declaration date Dividend per share Record date Total dividends Payment date Fourth quarter 2018 January 25, 2019 $ 0.1800 February 15, 2019 $ 19,568 March 8, 2019 Fourth quarter 2017 January 26, 2018 $ 0.1700 February 16, 2018 $ 18,246 March 9, 2018 Declared and undistributed Subsequent to March 31, 2019, the Company’s Board of Directors declared a quarterly dividend of $0.18 cents per common share, payable on June 19, 2019 to stockholders of record on May 29, 2019. This dividend payable has not been recognized as a liability in the financial statements. The payment of this dividend will not have any tax consequences for the Company. 15 . Equity and dividends (continued) Foreign currency translation reserve Foreign currency translation adjustments include intra-entity foreign currency transactions that are of a long-term investment nature, which generated a net loss of $855,000 for the three months ended March 31, 2019 (2018: net gains of $2,138,000 ). |
Share-Based Payments
Share-Based Payments | 3 Months Ended |
Mar. 31, 2019 | |
Share-Based Payments [Abstract] | |
Share-Based Payments | 16. Share-based payments Share-based payments consist of the following compensation costs: Three months ended March 31, 2019 2018 Stock option compensation expense: SG&A expenses $ 1,539 2,148 Acquisition-related costs - 195 Share unit expense: Equity-classified share units 2,368 3,035 Liability-classified share units 150 1,599 Employee share purchase plan - employer contributions 553 537 $ 4,610 $ 7,514 Share unit expense and employer contributions to the employee share purchase plan are recognized in SG&A expenses. Stock option plans Stock option activity for the three months ended March 31, 201 9 is presented below: WA Common WA remaining Aggregate shares under exercise contractual intrinsic option price life (in years) value Outstanding, December 31, 2018 4,013,863 $ 26.41 7.2 $ 25,374 Granted 862,198 33.79 Exercised (82,926) 19.61 1,302 Forfeited (15,405) 15.83 Outstanding, March 31, 2019 4,777,730 27.89 7.5 29,190 Exercisable, March 31, 2019 2,820,624 $ 25.51 6.5 $ 23,943 The significant assumptions used to estimate the fair value of stock options granted during the three months ended March 31, 201 9 and 201 8 are presented in the following table on a weighted average basis : Three months ended March 31, 2019 2018 Risk free interest rate 2.5% 2.7% Expected dividend yield 2.06% 2.11% Expected lives of the stock options 5 years 5 years Expected volatility 26.8% 28.1% As at March 31, 2019, the unrecognized stock-based compensation cost related to the non-vested stock options was $9,530,000 , which is expected to be recognized over a weighted average period of 2.6 years . 16. Share-based payments (continued) Share unit plans Share unit activity for the three months ended March 31, 2019 is presented below: Equity-classified awards Liability-classified awards PSUs RSUs DSUs WA grant WA grant WA grant date fair date fair date fair Number value Number value Number value Outstanding, December 31, 2018 670,288 $ 31.46 207,986 $ 28.99 113,435 $ 28.16 Granted 155,803 36.41 25,726 36.44 6,522 36.54 Vested and settled (231,873) 30.41 (260) 31.98 - - Forfeited (1,123) 31.63 (530) 32.08 - - Outstanding, March 31, 2019 593,095 $ 33.17 232,922 $ 29.81 119,957 $ 28.62 Senior executive and employee PSU plans The Company grants PSUs under a senior executive PSU plan and an employee PSU plan (the “PSU Plans”). Under the PSU Plans, the number of PSUs that vest is conditional upon specified market, service, or performance vesting conditions being met. The PSU Plans allow the Company to choose whether to settle the awards in cash or in shares. The Company intends to settle in shares. With respect to settling in shares, the Company has the option to either (i) arrange for the purchase shares on the open market on the employee’s behalf based on the cash value that otherwise would be delivered, or (ii) to issue a number of shares equal to the number of units that vest. The fair value of the equity-classified PSUs awarded in 2018 is estimated on modification date and on the date of grant using a Monte-Carlo simulation model as these awards are subject to market vesting conditions . The significant assumptions used to estimate the fair value of the equity-classified PSUs awarded during the three months ended March 31, 2018 are presented in the following table on a weighted average basis: Three months ended March 31, 2018 Risk free interest rate 1.9% Expected dividend yield 2.09% Expected lives of the PSUs 3 years Expected volatility 31.1% Average expected volatility of comparable companies 34.1% The fair value of the equity-classified PSUs awarded in 2019 is estimated based on the Company’s common share price at grant date, as these awards are not subject to market vesting conditions. As at March 31, 2019, the unrecognized share unit expense related to equity-classified PSUs was $11,688,000 , which is expected to be recognized over a weighted average period of 2.2 years. RSUs The Company has RSU plans that are equity-settled and not subject to market vesting conditions. As at March 31, 2019, the unrecognized share unit expense related to equity-classified RSUs was $4,386,000 , which is expected to be recognized over a weighted average period of 1.8 years . 16. Share-based payments (continued) Share unit plans (continued) DSUs The Company has DSU plans that are cash-settled and not subject to market vesting conditions. Fair values of DSUs are estimated on grant date and at each reporting date. DSUs are granted under the DSU plan to members of the Board of Directors. There is no unrecognized share unit expense related to liability-classified DSUs as they vest immediately and are expensed upon grant. As at March 31, 2019, the Company had a total share unit liability o f $4,068,000 (December 31, 2018: $3,714,000 ) in respect of share units under the DSU plans. Employee share purchase plan The Company has an employee share purchase plan that allows all employees that have completed two months of service to contribute funds to purchase common shares at the current market value at the time of share purchase. Employees may contribute up to 4% of their salary. The Company will match between 50% and 100% of the employee‘s contributions, depending on the employee‘s length of service with the Company. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Commitments [Abstract] | |
Leases | 17. Leases The Company’s breakdown of lease expense for the three months ended March 31, 2019 is as follows: Three months ended March 31, 2019 Operating lease cost $ 5,212 Finance lease cost Amortization of leased assets 1,760 Interest on lease liabilities 155 Short-term lease cost 2,565 Sublease income (154) $ 9,538 Operating leases The Company has entered into commercial leases for various auction sites and offices located in North America, Europe, the Middle East and Asia. The majority of these leases are non-cancellable. The Company also has further operating leases for computer equipment, certain motor vehicles and small office equipment where it is not in the best interest of the Company to purchase these assets. The majority of the Company‘s operating leases have a fixed term with a remaining life between one month and 20 years, with renewal options included in the contracts. The leases have varying contract terms, escalation clauses and renewal options. Generally there are no restrictions placed upon the lessee by entering into these leases, other than restrictions on use of property, sub-letting and alterations. At the inception of a lease, the Company determines whether it is reasonably certain to exercise a renewal option and includes the options in the determination of the lease term and the lease liability where it is reasonably certain to exercise the option. If the Company’s intention is to exercise an option subsequent to the commencement of the lease, the Company will re-assess the lease term. The Company has included certain renewal options in its operating lease liabilities for key property leases for locations that have strategic importance to the Company such as its Corporate Head Office. The Company has not included any purchase options available within its operating lease portfolio in its determination of its operating lease liability. 17. Leases (continued) Operating leases (continued) The future aggregate minimum lease payments under non-cancellable operating leases are as follows: Remainder of 2019 $ 11,555 2020 13,817 2021 10,925 2022 9,524 2023 7,792 Thereafter 85,876 Total future minimum lease payments $ 139,489 less: imputed interest (35,804) Total operating lease liability $ 103,685 less: operating lease liability - current (10,650) Total operating lease liability – non-current $ 93,035 At March 31, 2019 the Company has ROU assets relating to operating leases in the amount of $96,805,000 . At March 31, 2019 the weighted average remaining lease term for operating leases is 14.9 years and the weighted average discount rate is 4.1% . Finance leases The Company has entered into finance lease arrangements for certain vehicles, computer and yard equipment and office furniture. The majority of the leases have a fixed term with a remaining life of one month to six years with renewal options included in the contracts. In certain of these leases, the Company has the option to purchase the leased asset at fair market value or a stated residual value at the end of the lease term. For certain leases such as vehicle leases the Company has included renewal options in the determination of its lease liabilities. The Company has not included any purchase options available within its finance lease portfolio in its determination of the finance lease liability. As at March 31, 2019 , the net carrying amount of computer and yard equipment and other assets under capital leases is $15,356,000 (December 31, 2018: $14,976,000 ), and is included in the total property, plant and equipment as disclosed on the consolidated balance sheets. As at March 31, 2019 Cost Accumulated depreciation Net book value Computer equipment $ 11,291 $ (4,805) $ 6,486 Yard and others 11,925 (3,055) 8,870 $ 23,216 $ (7,860) $ 15,356 As at December 31, 2018 Cost Accumulated depreciation Net book value Computer equipment $ 9,428 $ (3,992) $ 5,436 Yard and auto equipment 12,125 (2,585) 9,540 $ 21,553 $ (6,577) $ 14,976 17. Leases (continued) Finance leases (continued) The future aggregate minimum lease payments under non-cancellable finance leases are as follows: Remainder of 2019 $ 4,539 2020 5,157 2021 3,871 2022 2,314 2023 1,020 Thereafter 43 Total future minimum lease payments $ 16,944 less: imputed interest (303) Total finance lease liability $ 16,641 less: finance lease liability - current (5,729) Total finance lease liability – non-current $ 10,912 At March 31, 2019 the weighted average remaining lease term for finance leases is 3.3 years and the weighted average discount rate is 3.9% . Subleases As at March 31, 2019, the total future minimum sublease payments expected to be received under non-cancellable subleases is $981,000. |
Commitments
Commitments | 3 Months Ended |
Mar. 31, 2019 | |
Commitments [Abstract] | |
Commitments | 18. Commitments Commitment for inventory purchase The Company entered into a two-year non-rolling stock surplus contract with the U.S. Government Defense Logistics Agency (the “DLA”) in December 2017 with the option to extend for up to four-years. Pursuant to the contract the performance period commenced in April 2018 and concludes in March 2020. The Company has committed to purchase between 150,000 and 245,900 units of property with an expected minimum value of $11,104,000 and up to $51,028,000 annually to the extent that goods are available from the DLA over the initial 12 month period relating to the purchase of inventory. At March 31 , 201 9 , the Company has purchased $47,676,000 pursuant to the initial 12 month period of this contract which commenced in April 2018. |
Contingencies
Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Contingencies [Abstract] | |
Contingencies | 19. Contingencies Legal and other claims The Company is subject to legal and other claims that arise in the ordinary course of its business. Management does not believe that the results of these claims will have a material effect on the Company’s consolidated balance sheet or consolidated income statement. Guarantee contracts In the normal course of business, the Company will in certain situations guarantee to a consignor a minimum level of proceeds in connection with the sale at auction of that consignor’s equipment. 19. Contingencies (continued) At March 31, 2019, there were $138,057,000 of assets guaranteed under contract, of which 83% is expected to be sold prior to June 30, 2019 with the remainder to be sold by September 30, 2021 (December 31, 2018: $41,461,000 of which 51% is expected to be sold prior to the end of March 31, 2019 with the remainder to be sold by May 31, 2020). The outstanding guarantee amounts are undiscounted and before estimated proceeds from sale at auction. |
Subsequent Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Event [Abstract] | |
Subsequent Event | 20. Subsequent Events On May 8, 2019, our Board of Directors authorized a share repurchase program for the repurchase of up to $100 ,000,000 worth of our common shares subject to Toronto Stock Exchange approval over the next 12 months. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policy) | 3 Months Ended |
Mar. 31, 2019 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of Preparation | (a) Basis of preparation These unaudited condensed consolidated interim financial statements have been prepared in accordance with United States generally accepted accounting principles (“US GAAP”). They include the accounts of Ritchie Bros. Auctioneers Incorporated and its subsidiaries from their respective dates of formation or acquisition. All significant intercompany balances and transactions have been eliminated. Certain information and footnote disclosure required by US GAAP for complete annual financial statements have been omitted and, therefore, these unaudited condensed consolidated interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2018, included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”). In the opinion of management, these unaudited condensed consolidated interim financial statements reflect all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly, in all material respects, the Company’s consolidated financial position, results of operations, cash flows and changes in equity for the interim periods presented. The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. |
Revenue Recognition | (b) Revenue recognition Revenues are comprised of: · Service revenue, including the following: i. Revenue from auction and marketplace (“A&M”) activities, including commissions earned at our live auctions, online marketplaces, and private brokerage services where we act as an agent for consignors of equipment and other assets, and various auction-related fees, including listing and buyer transaction fees; and ii. Other services revenue, including revenue from listing services, refurbishment, logistical services, financing, appraisal fees and other ancillary service fees; and · I nventory sales revenue as part of A&M activities The Company recognizes revenue when control of the promised goods or services is transferred to our customers, or upon completion of the performance obligation, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. For live event-based auctions or online auctions, revenue is recognized when the auction sale is complete and the Company has determined that the sale proceeds are collectible. Revenue is measured at the fair value of the consideration received or receivable and is shown net of value-added tax and duties. 1. Summary of significant accounting policies (continued) (b) Revenue recognition (continued) Service revenue Commissions from sales at the Company’s auctions represent the percentage earned by the Company on the gross proceeds from equipment and other assets sold at auction. The majority of the Company’s commissions are earned as a pre-negotiated fixed rate of the gross selling price. Other commissions from sales at the Company’s auctions are earned from underwritten commission contracts, when the Company guarantees a certain level of proceeds to a consignor. The Company accepts equipment and other assets on consignment stimulating buyer interest through professional marketing techniques, and matches sellers (also known as consignors) to buyers through the auction or private sale process. Prior to offering an item for sale on its online marketplaces, the Company also performs inspections. Following the sale of the item, the Company invoices the buyer for the purchase price of the asset, taxes, and, if applicable, the buyer transaction fee, collects payment from the buyer, and remits the proceeds to the seller, net of the seller commissions, applicable taxes, and applicable fees. Commissions are calculated as a percentage of the hammer price of the property sold at auction. Fees are also charged to sellers for listing and inspecting equipment. Other revenue earned in the process of conducting the Company’s auctions include administrative, documentation, and advertising fees. On the fall of the auctioneer’s hammer, the highest bidder becomes legally obligated to pay the full purchase price, which is the hammer price of the property purchased and the seller is legally obligated to relinquish the property in exchange for the hammer price less any seller’s commissions. Commission and fee revenue are recognized on the date of the auction sale upon the fall of the auctioneer’s hammer. Under the standard terms and conditions of its auction sales, the Company is not obligated to pay a consignor for property that has not been paid for by the buyer, provided the property has not been released to the buyer. If the buyer defaults on its payment obligation, also referred to as a collapsed sale, the sale is cancelled in the period in which the determination is made, and the property is returned to the consignor or placed in a later event-based or online auction. Historically cancelled sales have not been material. Online marketplace commission revenue is reduced by a provision for disputes, which is an estimate of disputed items that are expected to be settled at a cost to the Company, related to settlements of discrepancies under the Company’s equipment condition certification program. The equipment condition certification refers to a written inspection report provided to potential buyers that reflects the condition of a specific piece of equipment offered for sale, and includes ratings, comments, and photographs of the equipment following inspection by one of the Company’s equipment inspectors. The equipment condition certification provides that a buyer may file a written dispute claim during an eligible dispute period for consideration and resolution at the sole determination of the Company if the purchased equipment is not substantially in the condition represented in the inspection report. Typically disputes under the equipment condition certification program are settled with minor repairs or additional services, such as washing or detailing the item; the estimated costs of such items or services are included in the provision for disputes. Commission revenue are recorded net of commissions owed to third parties, which are principally the result of situations when the commission is shared with a consignor or with the counterparty in an auction guarantee risk and reward sharing arrangement. Additionally, in certain situations, commissions are shared with third parties who introduce the Company to consignors who sell property at auction. 1. Summary of significant accounting policies (continued) (b) Revenue recognition (continued) Service revenue (continued) Underwritten commission contracts can take the form of guarantee contracts. Guarantee contracts typically include a pre-negotiated percentage of the guaranteed gross proceeds plus a percentage of proceeds in excess of the guaranteed amount. If actual auction proceeds are less than the guaranteed amount, commission is reduced; if proceeds are sufficiently lower, the Company can incur a loss on the sale. Losses, if any, resulting from guarantee contracts are recorded in the period in which the relevant auction is completed. If a loss relating to a guarantee contract held at the period end to be sold after the period end is known or is probable and estimable at the financial statement reporting date, the loss is accrued in the financial statements for that period. The Company’s exposure from these guarantee contracts fluctuates over time. Other services revenue also includes fees for refurbishment, logistical services, financing, appraisal fees and other ancillary service fees. Fees are recognized in the period in which the service is provided to the customer. I nventory sales revenue Underwritten commission contracts can take the form of inventory contracts. Revenue related to inventory contracts is recognized in the period in which the sale is completed, title to the property passes to the purchaser and the Company has fulfilled any other obligations that may be relevant to the transaction. In its role as auctioneer, the Company auctions its inventory to equipment buyers through the auction process. Following the sale of the item, the Company invoices the buyer for the purchase price of the asset, taxes, and, if applicable, the buyer transaction fee, and collects payment from the buyer. On the fall of the auctioneer’s hammer, the highest bidder becomes legally obligated to pay the full purchase price, which is the hammer price of the property purchased. Title to the property is transferred in exchange for the hammer price, and if applicable, the buyer transaction fee plus applicable taxes. |
Costs of Services | (c) Costs of services Costs of services are comprised of expenses incurred in direct relation to conducting auctions (“direct expenses”), earning online marketplace revenue, and earning other fee revenue. Direct expenses include direct labour, buildings and facilities charges, and travel, advertising and promotion costs. Costs of services incurred to earn online marketplace revenue in addition to the costs listed above also include inspection costs. Inspections are generally performed at the seller’s physical location. The cost of inspections includes payroll costs and related benefits for the Company’s employees that perform and manage field inspection services, the related inspection report preparation and quality assurance costs, fees paid to contractors who perform field inspections, related travel and incidental costs for the Company’s inspection service organization, and office and occupancy costs for its inspection services personnel. Costs of earning online marketplace revenue also include costs for the Company’s customer support, online marketplace operations, logistics, title and lien investigation functions. Costs of services incurred in earning other fee revenue include ancillary and logistical service expenses, direct labour (including commissions on sales), software maintenance fees, and materials. Costs of services exclude depreciation and amortization expenses. |
Cost of Inventory Sold | (d) Cost of inventory sold Cost of inventory sold includes the purchase price of assets sold for the Company’s own account and is determined using a specific identification basis. |
Share-Based Payments | (e) Share-based payments The Company classifies a share-based payment award as an equity or liability payment based on the substantive terms of the award and any related arrangement. Equity-classified share-based payments Share unit plans The Company has a senior executive performance share unit (“PSU”) plan and an employee PSU plan that provides for the award of PSUs to certain senior executives and employees, respectively, of the Company. The Company has the option to settle certain share unit awards in cash or shares and expects to settle them in shares. The cost of PSUs granted is measured at the fair value of the underlying PSUs at the grant date. PSUs vest based on the passage of time and achievement of performance criteria. The Company also has a senior executive restricted share unit (“RSU”) plan and an employee RSU plan that provides for the award of RSUs to certain senior executives and employees, respectively, of the Company. The Company has the option to settle certain share unit awards in cash or shares and expects to settle all grants on and after 2017 in shares. The cost of RSUs granted is measured at the fair value based on the fair value of the Company’s common shares at the grant date. RSUs vest based on the passage of time and include restrictions related to employment. This fair value of awards expected to vest under these plans is expensed over the respective remaining service period of the individual awards, on an accelerated recognition basis, with the corresponding increase to APIC recorded in equity. At the end of each reporting period, the Company revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognized in earnings, such that the consolidated expense reflects the revised estimate, with a corresponding adjustment to equity. Dividend equivalents on the equity-classified PSUs and RSUs are recognized as a reduction to retained earnings over the service period. Stock option plans The Company has three stock option compensation plans that provide for the award of stock options to selected employees, directors and officers of the Company. The cost of options granted is measured at the fair value of the underlying option at the grant date using the Black-Scholes option pricing model. The fair value of options expected to vest under these plans is expensed over the respective remaining service period of the individual awards, on an accelerated recognition basis, with the corresponding increase to APIC recorded in equity. Upon exercise, any consideration paid on exercise of the stock options and amounts fully amortized in APIC are credited to the common shares. Liability-classified share-based payments The Company maintains other share unit compensation plans that vest over a period of up to three years after grant. Under those plans, the Company is either required or expects to settle vested awards on a cash basis or by providing cash to acquire shares on the open market on the employee’s behalf, where the settlement amount is determined based on the average price of the Company’s common shares prior to the vesting date or, in the case of deferred share unit (“DSU”) recipients, following cessation of service on the Board of Directors. These awards are classified as liability awards, measured at fair value at the date of grant and re-measured at fair value at each reporting date up to and including the settlement date. The determination of the fair value of the share units under these plans is described in note 1 6 . The fair value of the awards is expensed over the respective vesting period of the individual awards with recognition of a corresponding liability. Changes in fair value after vesting are recognized through compensation expense. Compensation expense reflects estimates of the number of instruments expected to vest. 1. Summary of significant accounting policies (continued) (e) Share-based payments (continued) Liability-classified share-based payments (continued) The impact of forfeitures and fair value revisions, if any, are recognized in earnings such that the cumulative expense reflects the revisions, with a corresponding adjustment to the settlement liability. Liability-classified share unit liabilities due within 12 months of the reporting date are presented in trade and other payables while settlements due beyond 12 months of the reporting date are presented in other non-current liabilities. |
Leases | (f) Leases The Company determines if an arrangement is a lease at inception. The Company may have lease agreements with lease and non-lease components, which are generally accounted for separately. Additionally, for certain vehicle and equipment leases, management applies a portfolio approach to account for the right-of-use (“ROU”) assets and liabilities for assets leased with similar lease terms. Operating leases Operating leases are included in other non-current assets, trade and other payables, and other non-current liabilities in our consolidated balance sheets if the initial lease term is greater than 12 months. For leases with an initial term of 12 months or less the Company recognizes those lease payments on a straight-line basis over the lease term. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, management uses the incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Management uses the implicit rate when readily determinable. The Company includes lease payments for renewal or termination options in its determination of lease term, ROU asset, and lease liability when it is reasonably certain that the Company will exercise these options. Lease expense for lease payments is recognized on a straight-line basis over the lease term and are included in Cost s of services or Selling, general, and administrative (“SG&A”) expenses. Finance leases Finance lease ROU assets are included in property , plant and equipment, trade and other payables, and other non-current liabilities in our consolidated balance sheets. Finance lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, management uses the incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Management uses the implicit rate when readily determinable. The Company includes lease payments for renewal, purchase options, or termination options in its determination of lease term, ROU asset, and lease liability when it is reasonably certain that the Company will exercise these options. Finance lease ROU assets are generally amortized over the lease term and are included in depreciation expense. The interest on the finance lease liabilities is included in interest expense. |
Inventories | 1. Summary of significant accounting policies (continued) (g) Inventories Inventory consists of equipment and other assets purchased for resale in an upcoming live on site auction or online marketplace event. The Company typically purchases inventory for resale through a competitive process where the consignor or vendor has determined this to be the preferred method of disposition through the auction process. In addition, certain jurisdictions require auctioneers to hold title to assets and facilitate title transfer on sale. Inventory is valued at the lower of cost and net realizable value where net realizable value represents the expected sale price upon disposition less make-ready costs and the costs of disposal and transportation. As part of its government business, the Company purchases inventory for resale as part of its commitment to purchase certain surplus government property (note 18). The significant elements of cost include the acquisition price of the inventory and make-ready costs to prepare the inventory for sale that are not selling expenses and in-bound transportation costs. Write-downs to the carrying value of inventory are recorded in cost of inventory sold on the consolidated income statement. |
Impairment of Long-lived and Indefinite-lived Assets | (h) Impairment of long-lived and indefinite-lived assets Long-lived assets, comprised of property, plant and equipment and intangible assets subject to amortization, are assessed for impairment whenever events or circumstances indicate that their carrying value may not be recoverable. For the purpose of impairment testing, long-lived assets are grouped and tested for recoverability at the lowest level that generates independent cash flows. An impairment loss is recognized when the carrying value of the assets or asset groups is greater than the future projected undiscounted cash flows. The impairment loss is calculated as the excess of the carrying value over the fair value of the asset or asset group. Fair value is based on valuation techniques or third party appraisals. Significant estimates and judgments are applied in determining these cash flows and fair values. Indefinite-lived intangible assets are tested annually for impairment as of December 31, and between annual tests if indicators of potential impairment exist. The Company has the option of performing a qualitative assessment to first determine whether the quantitative impairment test is necessary. This involves an assessment of qualitative factors to determine the existence of events or circumstances that would indicate whether it is more likely than not that the carrying amount of the indefinite-lived intangible asset is less than its fair value. If the qualitative assessment indicates it is not more likely than not that the carrying amount is less than its fair value, a quantitative impairment test is not required. Where a quantitative impairment test is required, the procedure is to compare the indefinite-lived intangible asset’s fair value with its carrying amount. An impairment loss is recognized as the difference between the indefinite-lived intangible asset’s carrying amount and its fair value. |
Goodwill | (i) Goodwill Goodwill represents the excess of the purchase price of an acquired enterprise over the fair value assigned to the assets acquired and liabilities assumed in a business combination. Goodwill is not amortized, but it is tested annually for impairment at the reporting unit level as of December 31, and between annual tests if indicators of potential impairment exist. The Company has the option of performing a qualitative assessment of a reporting unit to first determine whether the quantitative impairment test is necessary. This involves an assessment of qualitative factors to determine the existence of events or circumstances that would indicate whether it is more likely than not that the carrying amount of the reporting unit to which goodwill belongs is less than its fair value. If the qualitative assessment indicates it is not more likely than not that the reporting unit’s carrying amount is less than its fair value, a quantitative impairment test is not required. 1. Summary of significant accounting policies (continued) (i) Goodwill (continued) If a quantitative impairment test is required, the procedure is to identify potential impairment by comparing the reporting unit’s fair value with its carrying amount, including goodwill. The reporting unit’s fair value is determined using various valuation approaches and techniques that involve assumptions based on what the Company believes a hypothetical marketplace participant would use in estimating fair value on the measurement date. An impairment loss is recognized as the difference between the reporting unit’s carrying amount and its fair value. If the difference between the reporting unit’s carrying amount and fair value is greater than the amount of goodwill allocated to the reporting unit, the impairment loss is restricted by the amount of the goodwill allocated to the reporting unit. |
New and amended accounting standards | (j) New and amended accounting standards Effective January 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842) . The Company adopted the new standard utilizing the “optional transition method”, which permits the Company to apply the new lease standard at the adoption date. As the optional transition method is being utilized, the Company’s reporting for the comparative periods presented in the financial statements in which it adopts Topic 842 will continue to be reported pursuant to Topic 840. On adoption, the Company elected to utilize the package of practical expedients permitted within the new standard, which among other things, allows the Company to carryforward the historical lease classification. In addition, the Company elected to utilize the hindsight practical expedient to determine the reasonably certain lease term for existing leases. While lease classification will remain unchanged, hindsight will result in generally longer accounting lease terms where the Company has determined that it is reasonably certain to exercise certain renewal options and thereby increasing the useful lives of the corresponding leasehold improvements. The Company also elected not to recognize the lease assets and liabilities for leases with an initial term of 12 months or less and will recognize those lease payments on a straight-line basis over the lease term. On adoption of the new standard the Company recognized ROU assets of $103,897,000 with a corresponding increase in operating lease liability. Offsetting the increase in ROU assets recognized was the reclassification of prepaid rent and deferred rent liabilities to ROU assets of $5,752,000 . There was no impact on retained earnings or cash flows. The adoption of the standard had no impact on our debt-covenant compliance under our current agreements. |
Segmented Information (Tables)
Segmented Information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segmented Information [Abstract] | |
Schedule of Revenue and (Loss) Income Before Taxes by Segment | Three months ended March 31, 2019 A&M Other Consolidated Service revenue $ 143,437 $ 28,935 $ 172,372 Inventory sales revenue 131,057 - 131,057 Total revenue $ 274,494 $ 28,935 $ 303,429 Costs of services 20,817 15,252 36,069 Cost of inventory sold 120,475 - 120,475 SG&A expenses 89,182 6,002 95,184 Segment profit $ 44,020 $ 7,681 $ 51,701 Acquisition-related costs 669 Depreciation and amortization expenses ("D&A") 17,115 Gain on disposition of property, plant and equipment ("PPE") (149) Foreign exchange loss 478 Operating income $ 33,588 Interest expense (10,816) Other income, net 2,039 Income tax expense (6,639) Net income $ 18,172 4 . Segmented information (continued) Three months ended March 31, 2018 A&M Other Consolidated Service revenue $ 148,405 $ 27,611 $ 176,016 Inventory sales revenue 84,162 - 84,162 Total revenue $ 232,567 $ 27,611 260,178 Costs of services 21,448 15,209 36,657 Cost of inventory sold 75,791 75,791 SG&A expenses 93,002 4,468 97,470 Segment profit $ 42,326 $ 7,934 $ 50,260 Acquisition-related costs 1,633 D&A expenses 16,191 Gain on disposition of PPE (345) Foreign exchange gain (92) Operating income $ 32,873 Interest expense (11,310) Other income, net 913 Income tax expense (5,269) Net income $ 17,207 |
Geographic Information of Revenue | United States Canada Europe Other Consolidated Total revenue for the three months ended: March 31, 2019 $ 183,573 $ 31,531 $ 54,785 $ 33,540 $ 303,429 March 31, 2018 135,563 65,809 34,574 24,232 260,178 |
Revenues (Tables)
Revenues (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenues [Abstract] | |
Revenue from the Rendering of Services | Three months ended March 31, 2019 2018 Service revenue: Commissions $ 92,280 $ 101,294 Fees 80,092 74,722 172,372 176,016 Inventory sales revenue 131,057 84,162 $ 303,429 $ 260,178 |
Operating Expenses (Tables)
Operating Expenses (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Operating Expenses [Abstract] | |
Schedule of Direct Operating Expenses | Three months ended March 31, 2019 2018 Ancillary and logistical service expenses $ 13,759 $ 14,580 Employee compensation expenses 10,807 9,019 Buildings, facilities and technology expenses 2,134 2,627 Travel, advertising and promotion expenses 5,868 6,808 Other costs of services 3,501 3,623 $ 36,069 $ 36,657 |
Schedule of Selling, General and Administrative Expenses | Three months ended March 31, 2019 2018 Employee compensation expenses $ 61,464 63,293 Buildings, facilities and technology expenses 15,915 15,273 Travel, advertising and promotion expenses 9,142 9,719 Professional fees 4,075 4,267 Other SG&A expenses 4,588 4,918 $ 95,184 $ 97,470 |
Schedule of Acquisition Related Costs | Three months ended March 31, 2019 2018 IronPlanet: Other acquisition-related costs $ 82 $ 639 Other acquisitions: Continuing employment costs 87 968 Other acquisition-related costs 500 26 $ 669 $ 1,633 |
Schedule of Depreciation and Amortization Expenses | Three months ended March 31, 2019 2018 Depreciation expense $ 7,168 $ 6,916 Amortization expense 9,947 9,275 $ 17,115 $ 16,191 |
Earnings Per Share Attributab_2
Earnings Per Share Attributable to Stockholders (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share Attributable to Stockholders [Abstract] | |
Computation of Basic and Diluted Earnings Per Share | Three months ended March 31, 2019 Net income WA attributable to number Per share stockholders of shares amount Basic $ 18,164 108,765,489 $ 0.17 Effect of dilutive securities: Share units - 486,626 - Stock options - 792,098 - Diluted $ 18,164 110,044,213 $ 0.17 Three months ended March 31, 2018 Net income WA attributable to number Per share stockholders of shares amount Basic $ 17,138 107,355,381 $ 0.16 Effect of dilutive securities: Share units - 358,087 - Stock options - 930,429 - Diluted $ 17,138 108,643,897 $ 0.16 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of Net Changes in Operating Assets and Liabilities | Three months ended March 31, 2019 2018 Trade and other receivables $ (91,605) $ (90,077) Inventory 37,135 3,090 Advances against auction contracts (1,041) (223) Prepaid expenses and deposits (492) (3,443) Income taxes receivable (1,458) 1,903 Auction proceeds payable 120,036 103,390 Trade and other payables (36,887) 8,202 Income taxes payable 1,496 920 Share unit liabilities - 1,192 Other 221 311 Net changes in operating assets and liabilities $ 27,405 $ 25,265 |
Schedule of Supplemental Cash Flow | Three months ended March 31, 2019 2018 Interest paid, net of interest capitalized $ 16,521 $ 16,877 Interest received 855 392 Net income taxes paid 6,339 1,265 Non-cash purchase of property, plant and equipment under capital lease $ 2,564 $ 573 |
Schedule of Cash, Cash Equivalents and Restricted Cash | March 31, December 31, 2019 2018 Cash and cash equivalents $ 266,491 $ 237,744 Restricted cash 56,743 67,823 Cash, cash equivalents, and restricted cash $ 323,234 $ 305,567 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Measurement [Abstract] | |
Fair Value Assets Recurring and Nonrecurring | March 31, 2019 December 31, 2018 Category Carrying amount Fair value Carrying amount Fair value Fair values disclosed: Cash and cash equivalents Level 1 $ 266,491 $ 266,491 $ 237,744 $ 237,744 Restricted cash Level 1 56,743 56,743 67,823 67,823 Short-term debt Level 2 8,687 8,687 19,896 19,896 Long-term debt Senior unsecured notes Level 1 489,579 510,938 489,136 487,813 Term loans Level 2 213,758 215,879 222,162 224,582 |
Other Current Assets (Tables)
Other Current Assets (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Other Current Assets [Abstract] | |
Schedule of Other Current Assets | March 31, December 31, 2019 2018 Advances against auction contracts $ 16,573 $ 15,558 Assets held for sale 31,221 15,051 Prepaid expenses and deposits 18,759 18,446 $ 66,553 $ 49,055 |
Summary of Assets Held For Sale | Balance, December 31, 2018 15,051 Reclassified from property, plant and equipment 16,170 Balance, March 31, 2019 $ 31,221 |
Other Non-current Assets (Table
Other Non-current Assets (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Other Non-current Assets [Abstract] | |
Schedule of Other Non-current Assets | March 31, December 31, 2019 2018 Right-of-use assets $ 96,805 $ - Tax receivable 13,234 12,705 Equity-accounted investments 4,235 4,010 Deferred debt issue costs 1,884 2,017 Other 10,921 10,663 $ 127,079 $ 29,395 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt [Abstract] | |
Schedule of Debt | Carrying amount March 31, December 31, 2019 2018 Short-term debt $ 8,687 $ 19,896 Long-term debt: Term loans: Denominated in Canadian dollars, secured, bearing interest at a weighted average rate of 4.342% , due in monthly installments of interest only and quarterly installments of principal, maturing in October 2021 163,189 161,891 Denominated in United States dollars, secured, bearing interest at a weighted average rate of 4.606% , due in weekly installments of interest only and quarterly installments of principal, maturing in October 2021 52,690 62,690 Less: unamortized debt issue costs (2,121) (2,419) Senior unsecured notes: Bearing interest at 5.375% due in semi-annual installments, with the full amount of principal due in January 2025 500,000 500,000 Less: unamortized debt issue costs (10,421) (10,864) Total long-term debt 703,337 711,298 Total debt $ 712,024 $ 731,194 Long-term debt: Current portion $ 15,648 $ 13,126 Non-current portion 687,689 698,172 Total long-term debt $ 703,337 $ 711,298 |
Other Non-current Liabilities (
Other Non-current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Other Non-current Liabilities [Abstract] | |
Other Non-current Liabilities | March 31, December 31, 2019 2018 Operating lease liability $ 93,035 $ - Tax payable 22,438 22,583 Finance lease liability 10,912 10,146 Other 2,820 9,251 $ 129,205 $ 41,980 |
Equity and Dividends (Tables)
Equity and Dividends (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Equity and Dividends [Abstract] | |
Schedule of Quarterly Dividends Declared and Paid | Declaration date Dividend per share Record date Total dividends Payment date Fourth quarter 2018 January 25, 2019 $ 0.1800 February 15, 2019 $ 19,568 March 8, 2019 Fourth quarter 2017 January 26, 2018 $ 0.1700 February 16, 2018 $ 18,246 March 9, 2018 |
Share-Based Payments (Tables)
Share-Based Payments (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Compensation Costs Related to Share-Based Payments | Three months ended March 31, 2019 2018 Stock option compensation expense: SG&A expenses $ 1,539 2,148 Acquisition-related costs - 195 Share unit expense: Equity-classified share units 2,368 3,035 Liability-classified share units 150 1,599 Employee share purchase plan - employer contributions 553 537 $ 4,610 $ 7,514 |
Summary of Stock Option Activity | WA Common WA remaining Aggregate shares under exercise contractual intrinsic option price life (in years) value Outstanding, December 31, 2018 4,013,863 $ 26.41 7.2 $ 25,374 Granted 862,198 33.79 Exercised (82,926) 19.61 1,302 Forfeited (15,405) 15.83 Outstanding, March 31, 2019 4,777,730 27.89 7.5 29,190 Exercisable, March 31, 2019 2,820,624 $ 25.51 6.5 $ 23,943 |
Summary of Stock Option and Performance Share Unit Pricing Assumptions | Three months ended March 31, 2019 2018 Risk free interest rate 2.5% 2.7% Expected dividend yield 2.06% 2.11% Expected lives of the stock options 5 years 5 years Expected volatility 26.8% 28.1% |
Performance Share Units [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of Stock Option and Performance Share Unit Pricing Assumptions | Three months ended March 31, 2018 Risk free interest rate 1.9% Expected dividend yield 2.09% Expected lives of the PSUs 3 years Expected volatility 31.1% Average expected volatility of comparable companies 34.1% |
Summary of Share Unit Activity | Equity-classified awards Liability-classified awards PSUs RSUs DSUs WA grant WA grant WA grant date fair date fair date fair Number value Number value Number value Outstanding, December 31, 2018 670,288 $ 31.46 207,986 $ 28.99 113,435 $ 28.16 Granted 155,803 36.41 25,726 36.44 6,522 36.54 Vested and settled (231,873) 30.41 (260) 31.98 - - Forfeited (1,123) 31.63 (530) 32.08 - - Outstanding, March 31, 2019 593,095 $ 33.17 232,922 $ 29.81 119,957 $ 28.62 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Commitments [Abstract] | |
Breakdown of Lease Expense | Three months ended March 31, 2019 Operating lease cost $ 5,212 Finance lease cost Amortization of leased assets 1,760 Interest on lease liabilities 155 Short-term lease cost 2,565 Sublease income (154) $ 9,538 |
Future Minimum Operating Lease Payments | Remainder of 2019 $ 11,555 2020 13,817 2021 10,925 2022 9,524 2023 7,792 Thereafter 85,876 Total future minimum lease payments $ 139,489 less: imputed interest (35,804) Total operating lease liability $ 103,685 less: operating lease liability - current (10,650) Total operating lease liability – non-current $ 93,035 |
Information Disclosed on Balance Sheets | As at March 31, 2019 Cost Accumulated depreciation Net book value Computer equipment $ 11,291 $ (4,805) $ 6,486 Yard and others 11,925 (3,055) 8,870 $ 23,216 $ (7,860) $ 15,356 As at December 31, 2018 Cost Accumulated depreciation Net book value Computer equipment $ 9,428 $ (3,992) $ 5,436 Yard and auto equipment 12,125 (2,585) 9,540 $ 21,553 $ (6,577) $ 14,976 |
Future Minimum Finance Lease Payments | Remainder of 2019 $ 4,539 2020 5,157 2021 3,871 2022 2,314 2023 1,020 Thereafter 43 Total future minimum lease payments $ 16,944 less: imputed interest (303) Total finance lease liability $ 16,641 less: finance lease liability - current (5,729) Total finance lease liability – non-current $ 10,912 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Property, Plant and Equipment [Line Items] | |
Liabilities | $ 35,804,000 |
Right-of-use asset | 96,805,000 |
Accounting Standards Update 2016-02 [Member] | |
Property, Plant and Equipment [Line Items] | |
Liabilities | 5,752,000 |
Right-of-use asset | $ 103,897,000 |
Liability Classified Awards [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Award vesting period | 3 years |
Segmented Information (Narrativ
Segmented Information (Narrative) (Details) | 3 Months Ended |
Mar. 31, 2019segment | |
Segmented Information [Abstract] | |
Number of reportable segments | 1 |
Segmented Information (Schedule
Segmented Information (Schedule of Revenue and (Loss) Income Before Taxes by Segment) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Segment Reporting [Line Items] | ||
Revenues | $ 303,429 | $ 260,178 |
Direct expenses | 36,069 | 36,657 |
SG&A expenses | 95,184 | 97,470 |
Segment profit | 50,260 | |
Acquisition-related costs | 669 | 1,633 |
D&A expenses | 17,115 | 16,191 |
Gain on disposition of PPE | (149) | (345) |
Foreign exchange (gain) loss | 478 | (92) |
Operating income | 33,588 | 32,873 |
Interest expense | (10,816) | (11,310) |
Other income, net | 2,039 | 913 |
Income tax expense | (6,639) | (5,269) |
Net income | 18,172 | 17,207 |
Operating Segments [Member] | ||
Segment Reporting [Line Items] | ||
Revenues | 303,429 | |
SG&A expenses | 95,184 | |
Segment profit | 51,701 | |
D&A expenses | 17,115 | |
Operating income | 33,588 | |
Interest expense | (10,816) | |
Other income, net | 2,039 | |
Income tax expense | (6,639) | |
Net income | 18,172 | |
Segment Reconciling Items [Member] | ||
Segment Reporting [Line Items] | ||
Acquisition-related costs | 669 | |
Gain on disposition of PPE | (149) | |
Foreign exchange (gain) loss | 478 | |
Auctions and Marketplaces [Member] | ||
Segment Reporting [Line Items] | ||
Revenues | 232,567 | |
SG&A expenses | 93,002 | |
Segment profit | 42,326 | |
Auctions and Marketplaces [Member] | Operating Segments [Member] | ||
Segment Reporting [Line Items] | ||
Revenues | 274,494 | |
SG&A expenses | 89,182 | |
Segment profit | 44,020 | |
Other Reporting Unit [Member] | ||
Segment Reporting [Line Items] | ||
Revenues | 27,611 | |
SG&A expenses | 4,468 | |
Segment profit | 7,934 | |
Other Reporting Unit [Member] | Operating Segments [Member] | ||
Segment Reporting [Line Items] | ||
Revenues | 28,935 | |
SG&A expenses | 6,002 | |
Segment profit | 7,681 | |
Service Revenues [Member] | ||
Segment Reporting [Line Items] | ||
Revenues | 172,372 | 176,016 |
Direct expenses | 36,069 | 36,657 |
Service Revenues [Member] | Operating Segments [Member] | ||
Segment Reporting [Line Items] | ||
Revenues | 172,372 | |
Direct expenses | 36,069 | |
Service Revenues [Member] | Auctions and Marketplaces [Member] | ||
Segment Reporting [Line Items] | ||
Revenues | 148,405 | |
Direct expenses | 21,448 | |
Service Revenues [Member] | Auctions and Marketplaces [Member] | Operating Segments [Member] | ||
Segment Reporting [Line Items] | ||
Revenues | 143,437 | |
Direct expenses | 20,817 | |
Service Revenues [Member] | Other Reporting Unit [Member] | ||
Segment Reporting [Line Items] | ||
Revenues | 27,611 | |
Direct expenses | 15,209 | |
Service Revenues [Member] | Other Reporting Unit [Member] | Operating Segments [Member] | ||
Segment Reporting [Line Items] | ||
Revenues | 28,935 | |
Direct expenses | 15,252 | |
Inventory Sales Revenue [Member] | ||
Segment Reporting [Line Items] | ||
Revenues | 131,057 | 84,162 |
Direct expenses | 120,475 | 75,791 |
Inventory Sales Revenue [Member] | Operating Segments [Member] | ||
Segment Reporting [Line Items] | ||
Revenues | 131,057 | |
Direct expenses | 120,475 | |
Inventory Sales Revenue [Member] | Auctions and Marketplaces [Member] | ||
Segment Reporting [Line Items] | ||
Revenues | 84,162 | |
Direct expenses | $ 75,791 | |
Inventory Sales Revenue [Member] | Auctions and Marketplaces [Member] | Operating Segments [Member] | ||
Segment Reporting [Line Items] | ||
Revenues | 131,057 | |
Direct expenses | $ 120,475 |
Segmented Information (Geograph
Segmented Information (Geographic Information of Revenue) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | $ 303,429 | $ 260,178 |
Operating Segments [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 303,429 | |
United States [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 183,573 | 135,563 |
Canada [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 31,531 | 65,809 |
Europe [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 54,785 | 34,574 |
Other [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | $ 33,540 | $ 24,232 |
Revenues (Details)
Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues | $ 303,429 | $ 260,178 |
Service Revenues [Member] | ||
Revenues | 172,372 | 176,016 |
Commission Revenue [Member] | ||
Revenues | 92,280 | 101,294 |
Fees Revenue [Member] | ||
Revenues | 80,092 | 74,722 |
Inventory Sales Revenue [Member] | ||
Revenues | $ 131,057 | $ 84,162 |
Operating Expenses (Schedule of
Operating Expenses (Schedule of Direct Operating Expenses) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Ancillary and logistical service expenses | $ 13,759 | $ 14,580 |
Employee compensation expenses | 10,807 | 9,019 |
Buildings, facilities and technology expenses | 2,134 | 2,627 |
Travel, advertising and promotion expenses | 5,868 | 6,808 |
Other costs of services | 3,501 | 3,623 |
Total direct expenses | 36,069 | 36,657 |
Service Revenues [Member] | ||
Total direct expenses | $ 36,069 | $ 36,657 |
Operating Expenses (Schedule _2
Operating Expenses (Schedule of Selling, General and Administrative Expenses) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Operating Expenses [Abstract] | ||
Employee compensation expenses | $ 61,464 | $ 63,293 |
Buildings, facilities and technology expenses | 15,915 | 15,273 |
Travel, advertising and promotion expenses | 9,142 | 9,719 |
Professional fees | 4,075 | 4,267 |
Other SG&A expenses | 4,588 | 4,918 |
Total selling, general and administrative expenses | $ 95,184 | $ 97,470 |
Operating Expenses (Schedule _3
Operating Expenses (Schedule of Acquisition Related Costs) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Acquisition-related costs | $ 669 | $ 1,633 |
Iron Planet Holdings Inc. [Member] | Other Related Costs [Member] | ||
Acquisition-related costs | 82 | 639 |
Other Acquisitions [Member] | Employment Costs [Member] | ||
Acquisition-related costs | 87 | 968 |
Other Acquisitions [Member] | Other Related Costs [Member] | ||
Acquisition-related costs | $ 500 | $ 26 |
Operating Expenses (Schedule _4
Operating Expenses (Schedule of Depreciation and Amortization Expenses) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Operating Expenses [Abstract] | ||
Depreciation expense | $ 7,168 | $ 6,916 |
Amortization expense | 9,947 | 9,275 |
Total depreciation and amortization expenses | $ 17,115 | $ 16,191 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Taxes [Abstract] | ||
Income tax expense | $ 6,639 | $ 5,269 |
Effective income tax rate | 27.00% | 23.00% |
Earnings Per Share Attributab_3
Earnings Per Share Attributable to Stockholders (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Net income attributable to: | |||
Basic | $ 18,164 | $ 17,138 | |
Diluted | $ 18,164 | $ 17,138 | |
Weighted average number of shares outstanding: | |||
Basic | 108,765,489 | 107,355,381 | 107,355,381 |
Diluted | 110,044,213 | 108,643,897 | |
Per Share Amount | |||
Basic | $ 0.17 | $ 0.16 | $ 0.16 |
Diluted | $ 0.17 | $ 0.16 | |
Share Units [Member] | |||
Weighted average number of shares outstanding: | |||
Effect of dilutive securities: | 486,626 | 358,087 | |
Stock Options [Member] | |||
Weighted average number of shares outstanding: | |||
Effect of dilutive securities: | 792,098 | 930,429 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Schedule of Net Changes In Operating Assets and Liabilities) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Supplemental Cash Flow Information [Abstract] | ||
Trade and other receivables | $ (91,605) | $ (90,077) |
Inventory | 37,135 | 3,090 |
Advances against auction contracts | (1,041) | (223) |
Prepaid expenses and deposits | (492) | (3,443) |
Income taxes receivable | (1,458) | 1,903 |
Auction proceeds payable | 120,036 | 103,390 |
Trade and other payables | (36,887) | 8,202 |
Income taxes payable | 1,496 | 920 |
Share unit liabilities | 1,192 | |
Other | 221 | 311 |
Net changes in operating assets and liabilities | $ 27,405 | $ 25,265 |
Supplemental Cash Flow Inform_4
Supplemental Cash Flow Information (Schedule of Supplemental Cash Flow) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Supplemental Cash Flow Information [Abstract] | ||
Interest paid, net of interest capitalized | $ 16,521 | $ 16,877 |
Interest received | 855 | 392 |
Net income taxes paid | 6,339 | 1,265 |
Non-cash purchase of property, plant and equipment under capital lease | $ 2,564 | $ 573 |
Supplemental Cash Flow Inform_5
Supplemental Cash Flow Information (Schedule of Cash, Cash Equivalents and Restricted Cash) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Supplemental Cash Flow Information [Abstract] | ||||
Cash and cash equivalents | $ 266,491 | $ 237,744 | ||
Restricted cash | 56,743 | 67,823 | ||
Cash, cash equivalents, and restricted cash | $ 323,234 | $ 305,567 | $ 341,358 | $ 331,116 |
Fair Value Measurement (Details
Fair Value Measurement (Details) - Recurring [Member] - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Carrying Amount [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | $ 266,491 | $ 237,744 |
Restricted Cash | 56,743 | 67,823 |
Fair Value [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 266,491 | 237,744 |
Restricted Cash | 56,743 | 67,823 |
Short-term Debt [Member] | Carrying Amount [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument | 8,687 | 19,896 |
Short-term Debt [Member] | Fair Value [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument | 8,687 | 19,896 |
Senior Unsecured Notes [Member] | Long-term Debt [Member] | Carrying Amount [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument | 489,579 | 489,136 |
Senior Unsecured Notes [Member] | Long-term Debt [Member] | Fair Value [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument | 510,938 | 487,813 |
Delayed Draw Term Loans [Member] | Long-term Debt [Member] | Carrying Amount [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument | 213,758 | 222,162 |
Delayed Draw Term Loans [Member] | Long-term Debt [Member] | Fair Value [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument | $ 215,879 | $ 224,582 |
Other Current Assets (Schedule
Other Current Assets (Schedule of Other Current Assets) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 |
Other Current Assets [Abstract] | |||
Advances against auction contracts | $ 16,573 | $ 15,558 | |
Assets held for sale | 31,221 | $ 15,051 | 15,051 |
Prepaid expenses and deposits | 18,759 | 18,446 | |
Other Current Assets | $ 66,553 | $ 49,055 | $ 49,055 |
Other Current Assets (Summary o
Other Current Assets (Summary of Assets Held For Sale) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Other Current Assets [Abstract] | |
Beginning balance | $ 15,051 |
Reclassified from property, plant and equipment | 16,170 |
Ending balance | $ 31,221 |
Other Non-current Assets (Detai
Other Non-current Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Other Non-current Assets [Abstract] | ||
Right-of-use asset | $ 96,805 | |
Tax receivable | 13,234 | $ 12,705 |
Equity-accounted investments | 4,235 | 4,010 |
Deferred debt issue costs | 1,884 | 2,017 |
Other | 10,921 | 10,663 |
Other Non-current Assets, Total | $ 127,079 | $ 29,395 |
Debt (Narrative) (Details)
Debt (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Debt [Line Items] | |||
Repayment of debt | $ 12,235 | $ 29,237 | |
Delayed Draw Term Loans [Member] | |||
Debt [Line Items] | |||
Repayment of debt | 10,000 | $ 25,000 | |
Committed Revolving Credit Facilities [Member] | |||
Debt [Line Items] | |||
Maximum borrowing capacity | 485,366 | ||
Available borrowing capacity | $ 480,962 | ||
Revolving Credit Facility [Member] | |||
Debt [Line Items] | |||
Weighted average interest rate | 3.60% | 2.30% |
Debt (Summary of Debt) (Details
Debt (Summary of Debt) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Debt [Line Items] | ||
Short-term debt | $ 8,687 | $ 19,896 |
Long-term Debt, Total | 703,337 | 711,298 |
Total debt | 712,024 | 731,194 |
Current portion | 15,648 | 13,126 |
Non-current portion | 687,689 | 698,172 |
Delayed Draw Term Loans [Member] | ||
Debt [Line Items] | ||
Less: unamortized debt issue costs | (2,121) | (2,419) |
Senior Unsecured Notes [Member] | ||
Debt [Line Items] | ||
Less: unamortized debt issue costs | $ (10,421) | (10,864) |
4.342% Term Loan, Due October 2021 [Member] | ||
Debt [Line Items] | ||
Weighted average interest rate | 4.342% | |
4.342% Term Loan, Due October 2021 [Member] | Delayed Draw Term Loans [Member] | ||
Debt [Line Items] | ||
Long-term Debt | $ 163,189 | 161,891 |
Maturity date | Oct. 31, 2021 | |
4.606% Term Loan, Due October 2021 [Member] | Delayed Draw Term Loans [Member] | ||
Debt [Line Items] | ||
Long-term Debt | $ 52,690 | 62,690 |
Weighted average interest rate | 4.606% | |
Maturity date | Oct. 31, 2021 | |
5.375% Senior Unsecured Note, Due January 2025 [Member] | Senior Unsecured Notes [Member] | ||
Debt [Line Items] | ||
Long-term Debt | $ 500,000 | $ 500,000 |
Interest rate | 5.375% | |
Maturity date | Jan. 31, 2025 |
Other Non-current Liabilities_2
Other Non-current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Other Non-current Liabilities [Abstract] | ||
Operating lease liability | $ 93,035 | |
Tax payable | 22,438 | $ 22,583 |
Finance lease obligation | 10,912 | 10,146 |
Other | 2,820 | 9,251 |
Other non-current liabilities, Total | $ 129,205 | $ 41,980 |
Equity and Dividends (Narrative
Equity and Dividends (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | |
Apr. 30, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | |
Dividends Payable [Line Items] | |||
Preferred shares issued | 0 | ||
Intra-entity foreign currency transactions | $ (855) | $ 2,138 | |
Subsequent Event [Member] | |||
Dividends Payable [Line Items] | |||
Dividends declared (usd per share) | $ 0.18 |
Equity and Dividends (Schedule
Equity and Dividends (Schedule of Quarterly Dividends Declared and Paid) (Details) $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($)$ / shares | |
Fourth Quarter 2017 [Member] | |
Dividends Payable [Line Items] | |
Declaration date | Jan. 26, 2018 |
Dividend per share | $ / shares | $ 0.1700 |
Record date | Feb. 16, 2018 |
Total dividends | $ | $ 18,246 |
Payment date | Mar. 9, 2018 |
Fourth Quarter 2018 [Member] | |
Dividends Payable [Line Items] | |
Declaration date | Jan. 25, 2019 |
Dividend per share | $ / shares | $ 0.1800 |
Record date | Feb. 15, 2019 |
Total dividends | $ | $ 19,568 |
Payment date | Mar. 8, 2019 |
Share-Based Payments (Narrative
Share-Based Payments (Narrative) (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation costs | $ 9,530,000 | |
Unrecognized compensation costs, period for recognition | 2 years 7 months 6 days | |
Maximum employee contribution, percentage | 4.00% | |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Employer matching contribution, percentage | 50.00% | |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Employer matching contribution, percentage | 100.00% | |
Performance Share Units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation costs | $ 11,688,000 | |
Unrecognized compensation costs, period for recognition | 2 years 2 months 12 days | |
Restricted Share Units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation costs | $ 4,386,000 | |
Unrecognized compensation costs, period for recognition | 1 year 9 months 18 days | |
Deferred Share Units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation costs | $ 0 | |
Share unit liability | $ 4,068,000 | $ 3,714,000 |
Share-Based Payments (Compensat
Share-Based Payments (Compensation Costs Related To Share-Based Payments) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock option compensation expense | $ 1,539 | $ 2,343 |
Equity-classified share units | 2,368 | 3,035 |
Liability-classified share units | 150 | 1,599 |
Employee share purchase plan - employer contributions | 553 | 537 |
Total compensation costs related to share based payments | 4,610 | 7,514 |
Selling, General and Administrative Expenses [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock option compensation expense | $ 1,539 | 2,148 |
Acquisition-related Costs [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock option compensation expense | $ 195 |
Share-Based Payments (Summary o
Share-Based Payments (Summary of Stock Option Activity) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Share-Based Payments [Abstract] | ||
Outstanding beginning balance, Common shares under option | 4,013,863 | |
Granted, Common shares under option | 862,198 | |
Exercised, Common shares under option | (82,926) | |
Forfeited, Common shares under option | (15,405) | |
Outstanding ending balance, Common shares under option | 4,777,730 | 4,013,863 |
Exercisable, Common shares under option | 2,820,624 | |
Outstanding beginning balance, Weighted average exercise price (per share) | $ 26.41 | |
Granted, Weighted average exercise price (per share) | 33.79 | |
Exercised, Weighted average exercise price (per share) | 19.61 | |
Forfeited, Weighted average exercise price (per share) | 15.83 | |
Outstanding ending balance, Weighted average exercise price (per share) | 27.89 | $ 26.41 |
Exercisable, Weighted average exercise price (per share) | $ 25.51 | |
Outstanding, Weighted average remaining contractual life (in years) | 7 years 6 months | 7 years 2 months 12 days |
Exercisable, Weighted average remaining contractual life (in years) | 6 years 6 months | |
Outstanding beginning balance, Aggregate intrinsic value | $ 25,374 | |
Exercised, Aggregate intrinsic value | 1,302 | |
Outstanding ending balance, Aggregate intrinsic value | 29,190 | $ 25,374 |
Exercisable, Aggregate intrinsic value | $ 23,943 |
Share-Based Payments (Summary_2
Share-Based Payments (Summary of Stock Option and Performance Share Unit Pricing Assumptions) (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk free interest rate | 2.50% | 2.70% |
Expected dividend yield | 2.06% | 2.11% |
Expected lives | 5 years | 5 years |
Expected volatility | 26.80% | 28.10% |
Performance Share Units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk free interest rate | 1.90% | |
Expected dividend yield | 2.09% | |
Expected lives | 3 years | |
Expected volatility | 31.10% | |
Average expected volatility of comparable companies | 34.10% |
Share-Based Payments (Summary_3
Share-Based Payments (Summary of Share Unit Activity) (Details) | 3 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Performance Share Units [Member] | Equity Securities [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding beginning balance, Shares | shares | 670,288 |
Granted, Shares | shares | 155,803 |
Vested and settled, Shares | shares | (231,873) |
Forfeited, Shares | shares | (1,123) |
Outstanding ending balance, Shares | shares | 593,095 |
Outstanding beginning balance, Weighted average grant date fair value (per share) | $ / shares | $ 31.46 |
Granted, Weighted average grant date fair value (per share) | $ / shares | 36.41 |
Vested and settled, Weighted average grant date fair value (per share) | $ / shares | 30.41 |
Forfeited, Weighted average grant date fair value (per share) | $ / shares | 31.63 |
Outstanding ending balance, Weighted average grant date fair value (per share) | $ / shares | $ 33.17 |
Restricted Share Units [Member] | Equity Securities [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding beginning balance, Shares | shares | 207,986 |
Granted, Shares | shares | 25,726 |
Vested and settled, Shares | shares | (260) |
Forfeited, Shares | shares | (530) |
Outstanding ending balance, Shares | shares | 232,922 |
Outstanding beginning balance, Weighted average grant date fair value (per share) | $ / shares | $ 28.99 |
Granted, Weighted average grant date fair value (per share) | $ / shares | 36.44 |
Vested and settled, Weighted average grant date fair value (per share) | $ / shares | 31.98 |
Forfeited, Weighted average grant date fair value (per share) | $ / shares | 32.08 |
Outstanding ending balance, Weighted average grant date fair value (per share) | $ / shares | $ 29.81 |
Deferred Share Units [Member] | Debt securities | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding beginning balance, Shares | shares | 113,435 |
Granted, Shares | shares | 6,522 |
Outstanding ending balance, Shares | shares | 119,957 |
Outstanding beginning balance, Weighted average grant date fair value (per share) | $ / shares | $ 28.16 |
Granted, Weighted average grant date fair value (per share) | $ / shares | 36.54 |
Outstanding ending balance, Weighted average grant date fair value (per share) | $ / shares | $ 28.62 |
Leases (Narrative) (Details)
Leases (Narrative) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 |
Leases [Line Items] | |||
Right-of-use asset | $ 96,805 | ||
Weighted average remaining lease term | 14 years 10 months 24 days | ||
Discount rate | 4.10% | ||
Weighted average remaining finance lease term | 3 years 3 months 18 days | ||
Finance discount rate | 3.90% | ||
Future minimum sublease payments | $ 981 | ||
Net book value | $ 469,068 | $ 486,599 | |
Minimum [Member] | |||
Leases [Line Items] | |||
Operating lease fixed term | 1 month | ||
Finance lease term | 1 month | ||
Maximum [Member] | |||
Leases [Line Items] | |||
Operating lease fixed term | 20 years | ||
Finance lease term | 6 years | ||
Computer Equipment [Member] | |||
Leases [Line Items] | |||
Net book value | $ 6,486 | 5,436 | |
Yard And Other [Member] | |||
Leases [Line Items] | |||
Net book value | 8,870 | ||
Yard and Auto Equipment [Member] | |||
Leases [Line Items] | |||
Net book value | 9,540 | ||
Capital Leases [Member] | |||
Leases [Line Items] | |||
Net book value | $ 15,356 | $ 14,976 | $ 14,976 |
Leases (Breakdown of Lease Expe
Leases (Breakdown of Lease Expense) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Commitments [Abstract] | |
Operating lease cost | $ 5,212 |
Amortization of leased assets | 1,760 |
Interest on lease liabilities | 155 |
Short-term lease cost | 2,565 |
Sublease income | (154) |
Lease expense | $ 9,538 |
Leases (Future Minimum Operatin
Leases (Future Minimum Operating Lease Payments) (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Commitments [Abstract] | |
Remainder of 2019 | $ 11,555 |
2020 | 13,817 |
2021 | 10,925 |
2022 | 9,524 |
2023 | 7,792 |
Thereafter | 85,876 |
Total future minimum lease payments | 139,489 |
less: imputed interest | (35,804) |
Total operating lease liability | 103,685 |
less: operating lease liability - current | (10,650) |
Total operating lease liability - non current | $ 93,035 |
Leases (Information Disclosed o
Leases (Information Disclosed on Balance Sheets) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 |
Property, Plant and Equipment [Line Items] | |||
Net book value | $ 469,068 | $ 486,599 | |
Computer Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 11,291 | 9,428 | |
Accumulated depreciation | (4,805) | (3,992) | |
Net book value | 6,486 | 5,436 | |
Yard And Other [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 11,925 | ||
Accumulated depreciation | (3,055) | ||
Net book value | 8,870 | ||
Yard and Auto Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 12,125 | ||
Accumulated depreciation | (2,585) | ||
Net book value | 9,540 | ||
Capital Leases [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 23,216 | 21,553 | |
Accumulated depreciation | (7,860) | (6,577) | |
Net book value | $ 15,356 | $ 14,976 | $ 14,976 |
Leases (Future Minimum Finance
Leases (Future Minimum Finance Lease Payments) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Commitments [Abstract] | ||
Remainder of 2019 | $ 4,539 | |
2020 | 5,157 | |
2021 | 3,871 | |
2022 | 2,314 | |
2023 | 1,020 | |
Thereafter | 43 | |
Total future minimum lease payments | 16,944 | |
less: imputed interest | (303) | |
Total finance lease liability | 16,641 | |
less: finance lease liability - current | (5,729) | |
Total finance lease liability - non current | $ 10,912 | $ 10,146 |
Commitments (Details)
Commitments (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($)item | |
Commitments [Line Items] | |
Purchase commitment amount purchased | $ 47,676 |
Minimum [Member] | |
Commitments [Line Items] | |
Purchase commitment quantity | item | 150,000 |
Purchase commitment | $ 11,104 |
Maximum [Member] | |
Commitments [Line Items] | |
Purchase commitment quantity | item | 245,900 |
Purchase commitment | $ 51,028 |
Contingencies (Details)
Contingencies (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Contingencies [Abstract] | ||
Assets guaranteed under contract | $ 138,057 | $ 41,461 |
Percentage of assets expected to be sold | 83.00% | 51.00% |
Subsequent Event (Details)
Subsequent Event (Details) | May 08, 2019USD ($) |
Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Stock repurchase program, authorized amount | $ 100,000,000 |