RBA - Earnings call transcript Q1 2020

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Operator

Good morning. My name is James, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Ritchie Bros. Auctioneers First Quarter Conference Call. [Operator Instructions]. you. Thank

the open Mr. Mawani, the begin conference. turn Investor Mawani you over your to Relations conference call now Zaheed to of may I'll call. Mr.

Zaheed Mawani

call you results. us Good quarter for and our first thank on morning, today's to discuss XXXX joining

are who our Chief today of for Q&A will Driscoll, be and Executive other with the Fandozzi, Officer; portion Financial available Chief along Ann call. members me Officer; Sharon Joining our of management, the

from a items not of SEC XX-Q, forward-looking forward-looking available in gross We risks on EDGAR statements. forward-looking our website filings and available Comments encourage projections our detailed are earnings SEDAR. could as and risks Form well which The future fact, and our uncertainties The following Investor discussion review of cause Securities release are including significantly actual, Relations will at include our transaction that our value are statements and involve you are statement to earnings, website and revenue, investor.ritchiebrothers.com. financial results that our and uncertainties. and Canadian and differ other considered operating on as to

we On non-GAAP discuss financial will measures. certain this call,

and the two, Form identification financial the non-GAAP financial between directly see XX-Q. reconciliation measures, of GAAP comparable measure our For earnings and a the most release

in or are our from call our These slides through figures dollars, slides webcast on today. or indicated. commentary today's recorded downloaded Presentation the website. accompany can unless be live viewed discussed otherwise All U.S.

over turn the call I'll Ann to Fandozzi. now

Ann Fandozzi

of to pandemic. of individuals we front to at platform. technology-enabled Ritchie lives our as face on day, a battle service the employees are and express extraordinary in our business, like And us our critical of the morning, line this plays behalf things: unique the all These everyone. Thank I'd gratitude on multichannel of global the the our by deepest our reinforced in of customers; perseverance of good Every the our truly you, adversity; resilience few we and selfless the Bros., of roles reminded are times.

of like I our COVID-XX would Before get share has into insights the details the we some the impact had in company. on quarter, to

True As the you common customers this for being aligned while to North, although financial and the uncertainty employees call them we gone committed business are our rallied all has we True of and for our our tremendous and our around purpose, strain a businesses unaffected, has North, globe. which we and keeping amount people safe. This and COVID-XX our there and strengthened know, created And not around have purpose. common is

time when a our and each our proud I At commitments by employees other. most, liquidity their demonstrated of to so our and customers the resiliency, customers am need

after arrangements and at of quickly into is all customer has prepared for have work people advantage technology environments. us of safe working in into to our and us. multiyear this flexible ever our than in online moment, digital well XXX% very competitive clearer sales, supported transitioned we remotely for business capabilities that with a much which Well, One am often investments our I by hears company's about It's just how and a to Ritchie we heart. culture, thing In difficult XX can sometimes business. about I you, focus, pivoted proud a tell words. few Bros., months hours, of put a a our matter our culture perseverance turned

arose well-positioned we for during share an quarter that and exceptional. take our stakeholders. growth, financial sheet confiners highlights. important XX% business and results. better-than-expected a the very deliver But situation from we team our you through COVID-XX, strong Despite strong creating entered to per of long-term of from outcomes with And short the for exceptionally standpoint, a to challenges liquidity and are also financial is continuity value operating operational nothing continue recognize crisis, to our the It delivered is and balance first in the position. earnings will Sharon while midst quarter achieving that

spend COVID-XX. crisis, few we describing I response From a our minutes of Now key govern response the efforts. to beginning turning to the established which X. priorities, Slide will our X

First, their the our of employees, health safety our and and customers families.

government Second, the our guidelines, to implemented And compromise our we was Health there. CDC, operations continuing regulations strictly entities. those World to ensure and for safely were no and by as adhering safety Organization third, such customers. there other There all

evolving responding swiftly crisis steering place and in Our to continuity a regulatory with quickly safety climate. management was mandate to while put team business plans, a implement

our of on employees to home a travel we the As including temporary company-wide globe, the a implemented COVID-XX offices instructed home. and our from pandemic, XX% we Of and work our basis, are transitioned employees, from of result across headquarters, at currently nonfield-based many restructuring. working corporate

alternating employees auction sites, remotely, working teams and shifts, are field at and while between our sites auction are For in approximately the remainder home. XX% working

of able Bros. technology Ritchie solutions, to auction the needs. customers' company largely serve platform our and operations our continue was liquidity Through our

include modified of digital-only our live auctions traditional our GovPlanet transitioned Marketplace-E at to online and In and IronPlanet online all solutions, which Weekly, to bidding. addition our auctions, we

their to health events to auction able yard, safe of were by While staggered strictest buyers guidelines. the staggering our schedules. the similarly pre-auction online pickups to and live keep and We granted safety equally were bidding, access XXX% our keeping to equipment to off under inspections sellers equipment transitioned drop physical

electronic a interact disinfection protocols. implemented to installing physically protective payments cash customers, In have from addition we we steps, adherence these measures how guards, and and accepting transitioning fierce hygiene away also change plexiglass with to our to to only

We online optimize time. technology able looked we be to scaled up systems transactional our more of proactively single to at website experience. our quickly for handle a ways and to XXX% standpoint, a customer period From activity

for or I'm up. April. certain or lockdown pick our say result impossible successfully where pleased business a be disruptions. have due our drop-off that these very equipment in consignors, regions, were rescheduled to Montreal postpone Angeles with our was events efforts buyers and As for executed date, employees situations of Los to we site only operational others, live at To limited remains and it had X to in to and

interesting. Moving winning I'd business. take results is we to we next today, slide. online live our a online. to and back discuss business, of XX% our auction and to in how our like peel we're if XXX% delineate But channels, coming auction using digital. our you live something we would find And auction today, report the across of experience. a what the Online digital before moment live fully already all is COVID-XX, bids Even expect,

does auction I've business, our I've demarcation the do with learn to As to the gotten then live to So demarcation of ruling? live has online The know has transaction online come what itself. physical the do to where versus the equipment of with little that sits. versus

can their their cetera. prefer so the off drop post site, auction sales, scheduling we it process For many on simply our customers, at the behalf, storing et delivery equipment they sites, manage entire to equipment, inspecting on

they transaction, bottom title For and us equipment, our other prefer the and services remotely. line like the cetera, closing on to to of The is inspections, search, hold et this. customers, for lien provide to

to a company that also customers, operations. and our they key digital be however wherever us has a there advantage, is allowing are source This for live need of competitive We world-class us.

to and financial call me to let the quarter's discuss operational Sharon the highlights. that, With transition

Sharon Driscoll

everyone. morning, good and Anne, you, Thank

We going jump in. have lot so a to I'm today, right cover to

Our first and in was X adversely Japan, down GTV was auction Italy, quarter Angeles by X%, impacted and Los postponements Montreal.

For generated reference, $XX in year. QX a these last X comparable auctions GTV million in

our GTV timing basis differences, that these comparable adjusting a on X% would for and on So up been have basis.

up quarter, last XX% was Total in X of this XXX% includes GTV all purchased online. completed XXXX. of online were This QX purchases March, of from XX% where weeks the

and had the from quarter. robust growth online IronPlanet Weekly, pure-play our of in GovPlanet addition, Marketplace-E In GTV XX%

comparable to Our auction or on due the GTV basis these auction year declined from events live to primarily XXXX X%, base. after removing equal postponements last essentially a the

In impressive the the team of as posted across quarter. to all positive L.A. the but our event U.S. comparable effect and teams regional event, strategic accounts business. team overcome of another postponement Orlando auction. history rallied quarter not The was year-over-year delivered also the in the GTV only of The live growth the channels, lower largest again its our particularly U.S., growth once strong both delivered the and

came quarter, due the challenge through in well the but trending and GTV Montreal The of the in of mid-March, Canadian we're postponement for QX, decline to the off ultimately team posted a auction.

Excluding positive this postponement, delivered GTV would have growth. our team Canadian

Eastern once strong Canada the continued country, of to outpace the results. again and rest delivered

the Marketplace-E, was the which by had XXX% group in GTV international growth up sharply in We was in strong X factors. down driven quarter, our quarter. principally from also online

Europe navigating economic uncertainty and region general international Asia. already the and slowdown First, was in a

compounding effects mid-February, more in and our COVID-XX. as of challenges strong of QX impacts cycling Second, North the of year. from COVID-XX last virus And region resulting the inventory nonrepeating distancing pronounced we packages third, in ahead social began also America. the were The in international spread lockdowns were of

over Asia lot international with with seller both featured capabilities. platform huge events the The all lockdown, With team our live Notably, European and moved auction the much region had model IronPlanet quarter, success and Italy. or in our we Australian team online in positive had auction live that and to over auctions to Pacific timed to Japan the of moved postpone their online other reactions. Weekly and auctions in buyer

growth remained most in our metrics measures. year-over-year Overall, our operational of strong, with key

our online, marketing team can demand into kicked in buyer no and industry XXX% our With the gear, others strong digital the shift creating like base to high bringing do.

the Moving financial now highlights. to

X, was the in X%, our incidentally, as service lots lap inventory XX% revenue we our and which quarter. XX% total X% decline result the XX% GovPlanet Our a Lake partially a up revenue, of in in auction revenues decline small will primarily by harmonization, revenues. Fee higher up offset our and events. increase with revenue fee volume on was fee Commission of June revenue from sales increased of

produced also growth XX%. of revenue double-digit RBFS

amortization leverage, by X%, up announced offset of business the and partially a collapse and for nonrecurring termination revenue costs departures expenses. These the operating approximately was relate income other to of business operating GovPlanet the million and our growth $X of unit, by our solid executive property depreciation U.S. service transaction driven arrangement U.K. and quarter. a Our during

from income the a lower year-over-year on a contingent effective Net combination the sale interest Machinio of proceeds operating expenses, investment lower of consideration million rate of tax in improved $X.X of our receipt XXXX. income growth, from and XX%

and like Tax I April were subsequent considered inform XXXX, X, hybrid related On Before would in I to Treasury for everyone regulations of Service regulations transactions that of the Department States the and United X $X million need recorded income initial million U.S. we regulations. Internal earlier final to principles, accepted will Revenue preliminary Reform move the event, be benefit a these published XXXX, XX in Act. about will introduced to QX. on, XXXX, which Based in the December and months final XX, tax ended which March accounting $X with the be generally ended in on by effectively XX, months accordance approximately nullified

a reflecting of As we result, will an in approximately $X our adjustment million second quarter earnings. be unfavorable

be we to of to of impact expect the go-forward quarters. in this Excluding for rate the tax subsequent range our retroactive charge, XX% XX%

Turning quarter. Service Marketplaces On last to increased higher performance Auctions basis, a regional year. our up XX%, from the and segment. of in rate X% GTV QX was very strong fees revenue our growth revenue and guarantee driven service harmonization, by versus U.S.

by increase earned decreased X%, our an primarily GTV, was This as Montreal in harmonization. result and revenues, event. fees on commissions revenues postponing offset to service partially a of driven service by lower Canada fee lower due

this Our due a by resulting volume and of revenue from commission lower sharply primarily revenue overall revenue the we points of the improvement XX%, basis, live GTV, pleased Auction service international COVID-XX X from rate, to coming XXX harmonization, region. lower sales. service our postponement impacted fee fee the to in pandemic auctions lower On at contracts due higher and were in than from year. roughly The was Lake plus our rate basis and with GovPlanet last revenue A&M XX.X%, rate growth decreased

and international in offset sales The due segment decline our any decline inventory our sales regions, on in by lower was to COVID-XX-related and our Marketplaces The region. inventory revenue XX% to Canadian revenue. Moving was U.S. volumes inventory in partially stronger not impact. performance attributable XX% to our Auctions

over last point implied basis, a year, basis deals was of revenue Our in U.S. X.X%, Canadian roughly inventory declining On our improvement inventory a the XXX over year-over-year international sales basis XX% and also XX%. QX. up revenue which improvement XXX% region with return rate was rate and declining from sequential on quarter our point was XXX

strong Looking based sheet. ahead our on balance

We rigor are for applying open degree quality we deals, of higher in very valuations. much underwriting a our are inventory but

to on Moving expenses. SG&A

in investments and continued by customer driven growth enablers was our increase strategic growth technology initiatives dollar like SG&A Our experience. and key improving

due with SG&A we were accounted through partially the higher rate of entertainment in service and lower the our of compensation management offset combined cost mid-February, revenues. on as travel mark-to-market a continue growth discipline our expense the for by which expenses X%, volatility our DSU only of half of program. to the investments, SG&A apply grew majority These Notably, growth and share-based to was our of strong

Since possible, at our have operating environment. and levels, critically we been looking control costs to we in taking company-wide expenses as the the COVID-XX pandemic discretionary steps we to and began, efforts company, the manage spending productivity response monitor where across new are apply to

taken position and moderate our we to to actions date. generating to revenues, have SG&A cash some cost ability Due strong our keep

not pandemic. future predictable. operational volume we the optimize resulting declines, business through while business to are and rebound when We impacts duration our preserving material Should have ready severity experience to and of take business been conditions or downturn, uncertain our able market our to from necessary easily fully our prepared actions ability to this cost improve. are keep The increased structure,

we are our event site costs in declines across primarily and margins operating in possible costs, erosions over future quarters, regions. to certain nature, anticipate fixed the revenue do XX% As in of service of people

global into a navigate made allocation believe well-equipped the we capital a have years that deleveraging we unprecedented a to substantial today. we the are put as result, difference. has and And balance over are we environment disciplined standpoint sheet Our tremendous past from facing efforts very liquidity the our X

of In in million available at flows, credit we ongoing cash, of million $XXX ability first cash the generate quarter. unused of our in to of addition addition was at million facilities quarter, end continue the cash, cash to $XXX to which and end $XXX the had to restricted the equivalents

covenant And in shift to material are priorities preservation thresholds time, capital operations, while dividend. support and have business this cash to to our this continuing don't until context, within our at and we debt comfortably maturities Additionally, our debt any of XXXX. October wisely investing allocation our prioritize

Specifically with the to carefully but at time, unfolds. as dividend. We to no pandemic our situation have the change are approach ongoing this currently monitoring intention the regard impact

repositioned also to technology CapEx support essential and our have We program. spend program only property our

$XX spend we As such, revising be $XX now down million XXXX to CapEx are to our million. year full between expected

to our shares pandemic purchased the repurchasing at clear. million during intention shares on quarter, for authority have instructions this no with $XX offset Consistent NCIB renew severity expires we the suspended our directive first our became million of however, we X, auction time. dilution, repurchase share under and economic to current program X.X once the May of Existing

quarter. the of end the at first Finally

to multitude and disciplined approach very We enhance X.Xx, Our a a of plan was maintain ceiling adjusted value net debt long-term company. our our investing navigate are our scenarios. balance of economic to well inside ratio to X.Xx. of adjusted of we capital target believe we the well-positioned EBITDA with And position sheet to to strong liquidity

prepared our I'd a for to balance cash $X.X metrics, to decrease like drivers. remarks X There were over million, flow color related operating some year. provide on closing last our XX% our primary quarter the sheet Before of

negatively the First, XXXX's approximately million. $XX held increased QX. X these QX to And Even second, $XX at North the and cash higher-than-normal U.S. XXXX operating cash flow on American a trailing due was strong XX% European million was our to cash flow as free impacted basis, considerations, postponements with inventory into our exceptionally million to XX-month $XXX of auctions through at operating year-end our events. the sold positions by flow

solid Lastly, capital measure last our year. improvement invested want X.X% of XX%, from of showing QX return on touch in on to I

with We are our Evergreen And our were the we XX% on track progress. of end by target to pre-COVID-XX, achieve pleased continued XXXX. stated ROIC of

time achieved priority shifting on focusing no we our will commit business this preservation, target that with during However, stabilizing crisis, be during this this and cash can to longer frame. our

To their team in global and like our for conclude to I tremendous would results effort this my Bros. quarter. thank Ritchie remarks,

and amazing. nothing Your to customers of short is commitment dedication, resilience our serving

back Ann. the turn With that, to me let call

Ann Fandozzi

In competitive truly an of it multichannel Thank Sharon. much advantage our is. just moments you, platform is how of and asset clear these uncertainty,

power auction our the As Angeles our before well via April, in of day. bid, a feature of in an received even recently XX% of equipment example started, of online up priority call bids, completed platform, auction the opens Los the in advance we which auction

shifted our timed to As auction all a lots. our further quickly we technical auctions nod agility, to agricultural

an We technologies, simple. act to is several combined we of Australia, offer answer IronPlanet the in quickly we market a how solution. already were quite and so While online e-reserve The able were unique company.

spears that live, the or us blurring, be. with with manage are interconnected realm custody another. live we it call and experience, wherever highlighted call online care and equipment, live Whether a of auction and the need they COVID-XX their are our combined strengthened to online, operations, digital providing between XXX% however, customers one we our we and it world-class which

prepared our close key to remarks, our I on around quarter. out organization I would priorities. some aligned like the considerations Before share We've second

the staying of needs; our serve strong First, liquidity. third, unique and and employees ample balance customers sheet to our a being for and their safety customers; health with our second, well-positioned on focus and there

challenging conditions uncertain continue. QX to expect in we expect XXXX. does to downturns, ahead, quarter Ritchie could current Bros. of and the environment that remain, we look the indicate we As Historically, and that well most be

QX is the the because quarter. of unique uncertainty surrounding

you the can difficult, number of right relate, of given unknowns. modeling all is As now

macro and share the in some business broader of seeing However, let in me are our what environment. we

of uncertainty of earlier around service international in We very with restrictions, XX%. economy slowly reopen. revenue the starts declined QX high by equipment and timing hindering is as international still challenged border lockdowns mentioned degree strength our international and Our recovery that to a coupled region movement,

a moderate expect We to but challenging in recovery environment in operating this region expect still the continue. QX,

forecasts consignors Looking together or The pandemic, oil incremental to in now. wait-and-see to may drive prices, pricing declines their with question, supply, take the uncertain that And may for America our of This XX% will at a without GDP customers. U.S. greater. equipment will are some need environment. suggesting many able hold more approach pressure liquidity. on of North distress and plunge a many to in put but on Several consignors economy dramatic this are

North before disposition. as months for XX take over channel we $XX increase, bankruptcies auction XXXX. is that had long item large the that further notable package American A equipment from business Columbus, those for are a Ohio our as massive which if Equally, auction XX not into way deals cycling finds in the to last QX million repeat its can liquidation year, will

current a off quarter, reasonable at so a start. Looking our and into month trends. to about We're far, we're

rescheduled versus last Our sale year. and rescheduled the was up sale was last XX% XX% Angeles year, Los above Montreal

versus XX% constraints Although Netherlands same the auction down our business. clearly last April our in event showing Moerdijk the the was international of impact year,

As still with quarter in heavily for the June. balance is scheduled for as of our weighted, of the back-end the the auction events auction our early quarter. majority It's calendar

also government decline Our unknown offset by the decline. to is potential when uncertainty demand conditions And point in and and QX informed stimulus showing data can how cautious equipment. used macro help or approach for at any nonresidential is are this The construction and headlines. ABI it

are of used our likely OEM of finally, why supply. QX out fleets, new supply announced rental can chains production the cuts toughest the year. release brings impact understand into taking around affect in, consideration, CapEx cutting you and negatively All the availability could to trade-ins which equipment and may and equipment vertical Recently of as everything that auction. viewing equipment quarter affecting the we're companies aging issues OEM this And

back lack not of further far visibility us the given half speculate into would looking that it to of As and and be the far for responsible of that far, degree the XXXX year, as uncertainty out.

closing. In

necessary remain While to work. There long have risen our our and to ourselves the the this customers. in term. hard the the normal find be strength our to the want keep about I other challenging, challenge, of employees prouder be for and very and And could to over serve to today. thank resiliency taking great we each employees is company. near-term their we the dedication I extra which in a safe will business be nothing not of steps situation part our confident

With to that, line open the operator, questions. please

Operator

Instructions]. [Operator

Doumet Our first question line comes Scotiabank. Michael with from the of

Michael Doumet

First, just online. successful on the congratulations transition

I So share where from do just a get forward? long early, wanted one, transition? auctions? places for sense understanding still to three, see maintain in going you And you implications the online-only for, long-term competitors what your how expect amongst Two, you this it's to market implications this

Ann Fandozzi

Ann Fandozzi question. the happy Michael, handle here, to

So we're the the long how to online-only? answer going -- the be to question think let surroundings I expect dictate first of that. to we environment

candidly very can customers thrive, business Our we operate marketplace. a our keeping driving safe, has that proven to continue and healthy while and employees

So continue. line that of the will time

Your of learning. the just through broader of kind to It's I'm questions and COVID-XX very actually journey me, been ways. been It's big see all of learnings, for in -- in ways fascinating fourth small a month. my

the front, parts on very globe virtually. arrangements side see work work us, in leverage to much So how for fascinating allowing it's of talent many to us small been the of can the remote

take So that's going sure. for We're forward. that to

dichotomy the also online, our spelling really, versus kind live But of of business. this

said the I in of what prepared remarks. kind So

and going huge the as our sales both give fast pivot. our to I virtual to about change transactions in we online, customers, So customers a XXX% sales a that entire provide services, the think way. as a the everything when force, advisory you want trusted process, that our to but incredibly advisers really also was nod act to to

more is where remember importantly thrives, fit. continues live that the the and transactions about happen equally despite that equipment as fact I still Live, to the online. again, does But said,

vast of of that the so behalf, can way that customers sites, and perform to our are closing drop-offs, services, forward But our their learnings we've the stay drop the all even taking be safe. that ensuring environment. that our prefer and off at in inspections, this of simply continues all we equipment the pickups, through the employees going majority sale So the is all auction with the to taken on these staggering the us. steps we're customers staggering The

Michael Doumet

the part, on some just I stacks up you your how your last competitive of And Great. -- guess, advantage Okay. against competitors?

Ann Fandozzi

I actually we industry, plead In is we going interesting. metrics. be that This our It's in share new, something still place. Yes. can are really great and don't to have putting being market

So for stay tuned that.

As we build embedded data competencies. them, you've out in capabilities investigating We've market seen which and March. tool summary broader the of been our report, trend set. started our in developing with our as launch product deeply RBA's data And our a

really and Bros., is next drive of out market leveraging muscle lot data will. if our to of of share the acumen the we're So is business. horizon, source flexing on just Figuring kind Ritchie you that the a about

to But First really the product it in you being again, much very RBA's a the into with that integration report. of do, and market of data and was the any was sources us. of believe space is on market that in leaders us. with what's we that about positive for the trends foremost, then are. metric, launch almost the trend happening And the Many available all and seen in we data deeper have the understanding March the fact,

Michael Doumet

term, to rate, fees particularly or the to Okay, given to flow there how run the sort comps QX? Specifically, to consideration of maybe mean some flexing tougher revenue is being I your unrelated follow-up. near I through? commissions it A&M we get think an And for overall any should optimize the starts about thoughts great. as just into want on into

Sharon Driscoll

Yes.

again, mix -- that of do just So we being I it's is capped handle the assets we're start some fee side I'll driving end the Michael, But And the of at buyer that. top June some really Sharon. end that seeing that's last correct, continued took Again, pricing fees. to in we items incremental growth you're can actions the X cycle not up year. out lower rate. of of the on

they which was buyer buyer to agnostic again, channel the purpose the And make is of between fee purchased sure on. the really

And been for so has this us that made. to that we've highly pivot quick enable advantageous

over least, that that that, hold seen slightly, the we we've year. and same pace So expect at at rate not grow last but to, the

Operator

the comes line America. of next our Michael question from of And from Feniger Bank

Michael Feniger

of up you rate. just piece June following harmonization fee, I mean Sharon Ann. it the down, and lapping give all? mean rates in to more takes? for just And small year to now, at bigger You lots? on the adding and to go through of I go we're just -- you won't services, the seeing picture, are upside grind if is guys walk more Just why on but us picture. continue should puts rate know the Can this with lot us the X, value can a just a Why I bias RBFS. from these rate continue bigger -- movie why, higher?

Sharon Driscoll

again, I'll that. take Michael, So

seen from Ritchie don't talked Bros. to so terms year. decline, of just the services same that rate, related we've you about last to we rate all does that of the the expect And rate for it we Services. was didn't question Financial at we be benefit that our not expect that don't first the just A&M to So increase a say in

increase. are So expecting it hold still we and to

And right. you're absolutely

in service continue value-added rate that would As would you revenue to our growth through growth continue we with increases future offerings to don't that drive of GTV, other see to drive we quarters. the further expect come top house

Michael Feniger

this And forward? able at-risk with of you mean, caught manage where you think obviously an put of quarter low. of you the impressive to you How do guys there's up portion going only the have XX% GTV, the been get Because very offside I underwriting, years supply/demand guys with business. some underwriting, were imbalance, and

that XX% you that? how you going curious about yourself driving guys see So And if I'm are just underwriting of up?

Sharon Driscoll

Yes.

competitor So Michael, only they're for it's we believe balance service as customers a actually support our are our much the Clearly, and business strength looking again, that and can that. sheet, time, underwritten going I'll with this the we in be the that need at liquidity. of needed Sharon that's space one handle to

data that's tremendous that we we had available QX, see category. certainly the out in trucks, of already begun look saw -- do have things that in to we on called we in we One compression pricing. And that over-the-road pricing at,

a our using and job all top could where declines future see we so have being on done pricing of of just our valuation be. exceptional risk And that really price to team -- and and those data very of exposure mitigating by

along. and with through to we which COVID-XX, a valuation. this, right both both shock then, deals which approach continue very quarter. is to a do out, taking pitch risk that launched a as prudent we taking And certainly just contracts, oil pricing new bit a the it's for will inventory come we're also Clearly product this take and have And required, tool, gas the or again, guaranteed when we positions that of

so that's to website. you our not have pricing available it's now others, to that is access investor certainly, also but only us, -- available And information and to through

Michael Feniger

guys from in an of increase and in I ability in And technology, other equipment you is market, when other GovPlanet helpful. impacting platforms. to Are asset served seeing Sharon, heavy the you downturns Obviously -- the your share asset just investment maybe -- COVID have you're to the aside in just I you you categories? guys gain construction your ability how cycles? in government referring, of out dislocations seeing That's and just categories, other and other auction that flesh -- market hoping platform because are prior have you was could

Sharon Driscoll

be you and the add Ann, trucks our Clearly, over-the-road are Those will can primary construction particularly some in to color. business assets prime focus area, start, and of So I and assets. underwriting transportation our can is maybe, deals. continue

will looking being transportation do in more assets core to oil support -- consignors oilfield the market. But that driving bring do and now need assets services, Certainly, they we they on at and whatever is expansion will don't asset to really that, with not, we that's we're construction endeavor believe way whatever our trucks. categories, marketing So we have. over-the-road construction, on sector but we pressure gas reach transportation, assets, point, that clearly, focused our this expect at and

Ann Fandozzi

only technology add, that is ubique. this is I platforms and have, the would Sharon, that so investment the we Yes. Ann,

service a they us provide for their to So to our need provide for in -- it. it's customer really customers whatever there way

look very, but the featured from segment, Marketplace-E, way core equipment. categories, customers there's equipment a sells construction of our mining through very quite of vehicles, all span at heavy the that Our and anything take especially sales, if any the you obviously across a weekly

the XX need. our allowing it lots technology years fact, wherever to is but platform in be customer to use causing anything for liquidating and in customers construction kind it allows And we center, of need to land, lots So our focus, to that's more our that industry, rings be. of bull's be that this of they our around eye, expertise

Operator

And of comes our next question from the Fromson CIBC. Scott line with

Scott Fromson

bolster you to assets could auction So the competitors' that in pain you some this certain are Or put to the initial process? given -- auction, physical your into planning into competitors the lines? efforts are or geographies identifying already product well

Sharon Driscoll

you're question. So Sharon. know I asking? if that kind the of Scott, that's don't of it's what Is kind acquisition

Scott Fromson

Exactly.

Sharon Driscoll

Yes.

is support priority sure again, and dividend. to first our the and I'll that to Clearly, business operational the needs start. cash make get have our through this So support of we available crisis,

But options regional may now, our look if competitors. top become there we although still do that that things available states add will I say us primary right on would priority not that's be for they opportunistic fit focus, network. to a So our at additional

Scott Fromson

look see you do Or you'd down at things how to that the something this line? need further out? shake really Is

Sharon Driscoll

Yes.

think boundaries. always regional we're at makes that the clearly, actually technology us beyond So looking We've sense. that bought takes acquisitions we

allow on consolidation, So we're But technology growth. is always they we regional said, to acquisitions and that the our arrive. looking I as basically to open approach that actually at as opportunities weapon our for primary believe

Scott Fromson

how if kind makes of this the the pandemic changes is done. auction landscape of permanently sense That

Operator

line of Our comes the question next Cherniavsky James. Ben from from Raymond

Ben Cherniavsky

I I'm you guess, the out a and -- how couple trying macro current from mean figure impact for environment? I like the there's to of what's takes. net puts guys you

online, that you outlined, you liquidity, have capability. you've you've -- As you've source moved auctions got all of the become your one

dislocations, yet protecting balance drive off You sheet. the hand, the and other on you're

understand guess, where is -- the now. is that's the be But don't that negative this know to I ROIC. You've this this virtually -- net visible. does visibility quite here. we for I even going what targets out we're I'm figure second the and Is already impossible to on quarter, beyond a which of trying business? sort time the appreciate withdrawn net I being? like Is your takeaway is just right How something impact modeling

Ann Fandozzi

Yes.

So let me start.

And so this -- is can, Ann, then we'll Sharon Ben, and of add course, in.

think, word So Ben. key modeling, the is I here,

running all are model-after-model. scenarios, taking publicly of we running information the available and So

be that says away. that look recovery ways a models will Ls have like we So

that standpoint, scenarios, of and that have quick under of And a like we that a make what look and balance Vs we liquidity a Sharon. have that trough, then much fairly sure around. And the you but that's to then, Ws no issues, we rebound. want have kind from foremost, sheet and have all from bounce heard deeper We first models

So that's number one.

company confident microcosm, and positive. us puts Number run, positive. are is it The is long for to the then uncertainty. QX of the for two, you kind is see question if a takes the In we're what neutral very link largely our the of is

the length recovery, less really of but than length the uncertainty. the So of the

come things if we as out our things packages well the through XX recovery, [indiscernible] work there stimulus those auction. may finally system, in for all are, for liquidity much boom, that know sure kind get as let's they XX a So construction of because even more the of can to the way, bankruptcy business, until bodes going worse, be way need months there's us. it for but obviously then its take say, to process, to If makes snapback and and

challenge. from the biggest is bullish. run, very April around but just reality. well, can't -- something Again, a QX hearing We It's QX from. uncertainty very in what QX. think Obviously we're the is us you're is, we a long surrounding our strong started believe away I look

Ben Cherniavsky

migrated the trends? the deals your transactional, And is events most already travel do do, managers that people your impact on very business? to very online those territory of you transactions customers a lots I they the that business you very won't anyway. do online, are every net it's How relationship-driven, But kinds and pipeline fill if when or day. inspect your hustling pipeline of and their Like these What's bidding fill appreciate how you are out there on do of you're to difficult restrictions, lockdown, of let under that? variables sites you

Ann Fandozzi

Yes.

have So some Ben, surprises. positive and been very I had really incredible I've learning since here

I along. digital maybe it And So you're live acting strong like the now has all, a operations. very one the most positive a we with of that think company fact them the all just been besides were highlighting

and to has in what actually that into moved So positive years we've communications environment. base, client a been course, of very beat. a our way, is our surprising, XX not had is have which, all a advisory services sales missing organization over They virtual

completely staying been pulse; development, their finger every have to time are, than on on and now that listening our top they So ever understanding really and even the needs we're of are. ensure before, but their customers candidly, lines busier what what needing

and the do. to inform And guide said our at all data, having the what disposal, help pricing of obviously as tools customers tools should of our new the Sharon all

So turn been that's an really of events. incredible

all, very, services. far. any, orders, the with Very, spotty, if on thus same secondarily, we have had no inspection at then And very place issues

safety out and So all our to health inspectors inspecting them bringing and taking market. precautions obviously, about, but of the products, are

stayed strong really in sales environment. the this a just on virtual of side, So side supply inspection business, business. a the the very side, on to on the very, testament it has It's

Ben Cherniavsky

I maybe appreciate that I business screen and market of what question the over imagine if Yes. managers. I has got is to in can territory the and that sales way was see. still force I've But I trust a and boat in impressive. the built. for all fishing think the this, changed was that and developed, really you is if build human development that the world? the relationships your impact would we'll opportunities Bros. dinner the that's that, a very relationships versus factor traditionally can guess, Ritchie on I don't an long-term -- for and know the

Ann Fandozzi

run, in hope, get let's both dinners. can back the trips So fishing we to and long

thing that Let's hope for forever.

Ben Cherniavsky

Yes.

then. Okay,

different and these got? component if like you anymore return given to platform. auctions central I here many guess, another model the don't need permanent Do as change long-run so as question you business. do this does -- and depository yards think bidding model radically the you the anymore? Do need Or booths live now them? you don't of -- the need Like you've think do what's the just digital as you we look in if And you or -- sites a then, to transition appreciate of you many normal? big the see But I really could your in happened when

Ann Fandozzi

Okay.

So was Ben, about been Whereas and that that's in aha online. Is really, since I is here. think question, in, my been live of biggest an interesting I've our you them I operations would thinking came when versus to a retail ship a the the used just at a shipped my on I click it and something warehouse physical I'm store. button, that store landscape, and right? So home Tomorrow, physical shopping brick-and-mortar to house. you're to

is of in Bros. the my shared for a bit prepared online us, have little into buy as that, does I coming was what found not here Ritchie that really What remarks. That notion preconceived is coming kind versus in I

a the online. the of stated, actual As was transaction, bidding majority you of happening already our auction, live

back-end, we set say to our were digital always the processes So more can that's was it we already that who of a company, and volume when all about were we flow, handle we ensuring systems technology shift handle higher because the were. up but

over vast equipment of our it, yourselves to and the no longer to they nuts. want customer for us need shoes when us with for to do is they handle Live the And equipment. what really majority want about in of soup their hand the to customers putting a understanding

customers we take it work, look and off at drop manage a to obviously we in auction. site, handle product, do coming the So prep all We lien an the the title transaction. do we we inspection, a the before

happen. That that to And advantage is a that are manage want the ones that and then that. majority that, really desire part of us of operations delivery vast That's pickup huge of the kind world-class live our allow source customers of for and we the it.

out say, kind handles close look, The customers the the here virtually kind everything customer inspectors, still seller where we we going I with with the ensure our keep and remotely," interaction to mind, research. everything to product "No, -- of then transaction. pickup, of the the on portion and I'm do don't Some title of send handle to

products. they we and intend even lens, day be of as through think I And auction with little however, has not with and We for service itself. providing provide at for that do sites, customers to care around our their of did the whenever the all critical and it about to we site. to do customers, So has the and service control will auctions majority It to terms transaction the thinking of customers happen very before not of for actually there this the custody sites live think in auction our around that of us. that all at of need number since this, live vast be

Ben Cherniavsky

located factors change? auctions, of and to they you on-site those the that facilitate all hotels would bidders, airport how Yes, change and where auctions, could big to kind or proximity all and live your in were,

Ann Fandozzi

is service that that foremost provide the need is clearly and that we but of our first all ensuring value. in consideration, think want, customers I and

Operator

Instructions]. [Operator

Our TD the of from Radbourne with Cherilyn line Securities. next comes question

Cherilyn Radbourne

square that this of points? So of sort really there on that to performance against see as reason of trying auctions shouldn't impressive the encouraging in the at height the Montreal data commentary and QX at L.A. pretty I guess, your in world. balance, outlook the a lockdown some kind part was just And for those cautionary. pretty April, I'm of we Is

Ann Fandozzi

Yes.

why That's of course, encouraging. fraught answer April, So with QX we answer also The Ann. Cherilyn, is hello, the -- uncertainty. it's is, is

kind the considerations, macro on even is more company-specific. this and or -- every For of

Ohio me going QX of Columbus, last but facts some I let be more It versus that remarks, is highlighted not we're going year life, right? So the them lapping prepared just a auction fact to repeat. that's a bring to during to

the hearing in is considerations, business and you sector from QX. that Other what hardest, gas change expect obviously much macro as volatility It in anybody them that our to candidly international fact is and significantly the doesn't and we're hit was guys as else, it don't which a mean. we and oil

taking OEMs production Some cuts.

cutting there's a chain holding Rental bit Again, CapEx mean believe short-term we So supply companies short-term onto does nature. these are impact? equipment potentially a little longer? or in that

is, Of the question short-term? how course,

that's why us -- makes the that of about we all again, cautious so potentially quarter QX, and of that the year. toughest making And

reasonably comments, that long-term times Cherilyn, period, exactly of bad. Your is from of good are kind right, a company in in this perspective, any terms well, and does in

ourselves find short periods the approach. uncertainty for we our want fear during It's cautious be that that of QX to we in

Cherilyn Radbourne

the as territory any a do And your theory have international North mobility domestically versus of you America? greater to lockdowns impact on equipment why Okay. and have had in

Ann Fandozzi

Yes.

towards half the So year. it's think even I Sharon's little those back already of beginning, a comments bit in saw markets last the is were which back in -- were they

Asia, spreading one. number hit and it that's two, then hardest. Obviously Europe. hit COVID to So first, Number

in One of in the close proximity be very, close, that outbreaks very site. happened to to first Italy

We're dime that is was is say in and I that think something then on a the seeing. on Karl we're a backdrop cautious. the reopening. But was slowly in, QX, probability turning already now -- trend we're was would We're was not hit optimistic not thought again, it of also we the soft that kind of high about what the hardest. So event. very line. coming And And

international? an from anything add to wanted you If

Karl Werner

border the control. think I Cherilyn, Sure. question the around

to when goes days. to customer something, from someone the wants buys Compared North America State if California, Europe mainly. So no quarantine in Germany have XX quarantine back to drive In between forth. and quarantine. you it America, Poland, go and Europe, they they North take closures, when versa, buy to to the back go there's And for to difference when Washington something and Poland rest the border a with to now vice

put of a the moving kind from that's within So EU. country-to-country, is even how the damper equipment on

Cherilyn Radbourne

I last color. in if helpful one. sneak just very That's a Okay. can Maybe

You on your the initial end of performance came GovPlanet. period to

on things inventory? you year. evaluate like base, of first the terms with a You've Maybe X-year in into on for capital Bros. and cross-selling performance how you and would return comment employed just that can period customer that the renewed warehouses existing Ritchie

Ann Fandozzi

Yes.

we Sharon ask me thread. pick let and then maybe start, up to So can the

headline and So customers. is GovPlanet learning for invaluable. new new about the would competencies from I me it say candidly, has been And

So been kind the we've non-rolling was interaction of the been that's a some -- to house, we're obviously required with auction new Really, warehousing in and business quite as And like surface, customers. GovPlanet us to time. competencies, an for I the stock build on we rolling the and -- but that feel tremendous. it's different us,

do extended. sellers. business bolster this is really, to going we what What we our customers, of unique competencies. we're period value good, next drive? that and over thinking to be them? so Obviously add through could doing time How can we really buyers obviously, The And various the this

So and and taking learnings then we're the that much them moving we've into the very still now space. had,

So mean we're terms long-term, you would additional So that anything in add? to of state investments like transitioning thinking. very what does to forward? or looking anything much else that now-what of Sharon,

Sharon Driscoll

No.

you've That's think handled it. I great.

Operator

our Kevin of Baird. with comes And line Condon question R.W. next from the

Kevin Condon

little answered. more have of shed them Many expenses. with on you light SG&A you I what levers a been could have But was hoping

fairly online in environment? with can meaningfully the bidding. but channel and infrastructure an potentially to still especially, more cost model, potentially a a online reduce SG&A, You cost physical while and or you understanding had to But shift mentioned you've a there advantage are GTV challenging change your for important, accelerated with opportunities levers to fixed an haul your base, digital is a more

Sharon Driscoll

Yes.

Sharon, that, monitoring years. our question. So the for We've few expenses so last a been handle it's good I'll and actively

daily of are really small of and U.S. some our fully a regionally, very have teams sites our to downturn looking in we done actions to regions. -- productivity business at mostly mostly, how so business. respond. during And both couple in particularly understand a now, this basis active are we And a But in core best in to on couple try units, Canadian

actions take there. to had significant now we've So

your about model. comment to I think shifting online the

make to want are in long handling cared still and possession while essential. for equipment of our as that is take be care of custody appropriately, they're still their to sure they assets, control customers the essential, of that the sites As us continue to and

really to with out, will the the could we really equipment what continue this and we and store term. needs needs business, this this the they during prepare our and typical efficiencies learn to So -- just take of of a the opportunity to want period we for that really But long to point about are handle for around in have just online is us not simply sale. customers BXC because their that learnings

Operator

remarks. And like there time. are some turn no further over to questions at this for call I'd Mr. closing back to Mawani the

Zaheed Mawani

James, Thank our us for quarter and thank you, first you, on call. everyone, joining

Thank please If reach all QX out hesitate much. me. speaking questions, forward to have any call. With further we very our that, don't look conclude our to in you August to you you call. Otherwise, again with follow-up we'll for

Operator

This does conclude today's conference call.

may disconnect. You now

RB Global (RBA) 8 May 202020 Q1 Earnings call transcript