RBA RB Global Inc

Reports strong financial results and significant progress on integration

WESTCHESTER, Ill., Aug. 3, 2023 /PRNewswire/ - RB Global, Inc. (NYSE: RBA) (TSX: RBA), the "Company", "RB Global", "we", "us", "their", or "our") reported the following results for the three months ended June 30, 2023.

Second Quarter Financial Highlights^{1, 2,3}:

• GTV increased 146% year-over-year to $4.1 billion, which includes $2.2 billion from the impact of the acquisition of IAA, Inc. ("IAA").
• Total revenue increased 128% year-over-year to $1.1 billion, which includes $560.4 million from the impact of the acquisition of IAA.
• • Service revenue increased 181% year-over-year to $806.1 million, which includes $476.6 million from the impact of the acquisition of IAA.
  • Inventory sales revenue increased 52% year-over-year to $300.4 million, which includes $83.8 million from the impact of the acquisition of IAA.
• Net income increased 63% year-over-year to $86.8 million.
• Diluted earnings per share available to common stockholders decreased 13% to $0.42 per share.
• Diluted adjusted earnings per share available to common stockholders increased 15% year-over-year to $0.85 per share.
• Adjusted EBITDA increased 126% year-over-year to $307.8 million.

"Solid second-quarter results and the growth we are seeing across the business demonstrates our customers' enthusiasm for RB Global's solutions and our success in delivering outstanding experiences for them," said Jim Kessler, CEO of RB Global. "The IAA integration is progressing well. We look forward with great confidence in RB Global's long runway for profitable growth and value creation, and remain committed to executing on our marketplace strategy."

Additional Financial and Operational Highlights

GTV by Geography

GTV by Sector

Lots Sold by Sector

The following table presents the selected results from RBA and IAA:

* Includes financial results of IAA in our consolidated financial statements during the six-month period ending June 30, 2023 since its acquisition on March 20, 2023.

Supplemental Pro Forma Revenue Related Highlights¹ 

Supplemental Pro Forma GTV by Sector¹

Supplemental Pro Forma Lots Sold by Sector¹

Reconciliation of Operating Expenses 

The below table reconciles as reported operating expenses by line item to adjusted operating expenses to exclude the impact of adjustments as defined in our Non-GAAP Measures.

For the Second Quarter: 

• GTV increased 146% year-over-year to $4.1 billion, primarily from the inclusion of $2.2 billion GTV from IAA.  GTV increased 9% year-over-year on a pro forma combined basis, primarily led by strength in the commercial construction and transportation sector followed by a rebound in the automotive sector. GTV increased 10% year-over-year on a pro forma combined basis when excluding the impact of foreign exchange.
  
  
• Service revenue increased 181% year-over-year to $806.1 million, primarily from the inclusion of $476.6 million of service revenue from IAA. Service revenue increased 15% year-over-year on a pro forma combined basis on higher GTV and higher service revenue take rate. Service revenue take rate expanded 100 basis points on a pro forma combined basis year-over-year to 19.5% driven by a higher average buyer fees rate and higher marketplace services revenue partially offset by a lower average commissions rate. Marketplace services was driven by increased activity in ancillary service businesses and activities, as well as new higher auction-related fee structures in the construction and transportation sector.
  
  
• Inventory sales revenue increased 52% year-over-year, mainly due to the inclusion of of $83.8 million of inventory sales revenue from IAA. Inventory sales revenue decreased 1% year-over-year on a pro forma combined basis on lower automotive related revenue partially offset by higher commercial construction and transportation related revenue. Inventory rate declined 710 basis points year-over-year on a pro forma combined basis to 2.8%. The decline in inventory rate year-over-year on a pro forma combined basis can be attributed to prices declining faster than anticipated between purchase price and sale date of inventory, primarily in the Company's commercial construction and transportation sector.
  
  
• Net income available to common stockholders increased to $77.4 million, mainly due to an increase in operating income and lower effective tax rate, partially offset by higher net interest expense and allocated earnings to Series A Senior Preferred shareholders.
  
  
• Adjusted EBITDA¹ increased 126% year-over-year mainly driven by the inclusion of IAA.
  
  
• Total debt decreased by $103.4 million, driven by the $100.0 million repayment of U.S. dollar Term Loan A facility.

Dividend Information

Quarterly Dividend
On August 2, 2023, the Company declared a quarterly cash dividend of $0.27 per common share, payable on September 13, 2023 to shareholders of record on August 23, 2023.

Second Quarter 2023 Earnings Conference Call
RB Global is hosting a conference call to discuss its financial results for the quarter ended June 30, 2023 at 1:30pm PT / 4:30pm ET / 8:30pm GMT on August 3, 2023. The replay of the webcast will be available through September 1, 2023.

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

About RB Global
RB Global, Inc. (NYSE: RBA) (TSX: RBA) is a leading, omnichannel marketplace that provides value-added insights, services and transaction solutions for buyers and sellers of commercial assets and vehicles worldwide. Through its auction sites in 14 countries and digital platform, RB Global serves customers in more than 170 countries across a variety of asset classes, including automotive, commercial transportation, construction, government surplus, lifting and material handling, energy, mining and agriculture. The company's marketplace brands include Ritchie Bros., the world's largest auctioneer of commercial assets and vehicles offering online bidding, and IAA, a leading global digital marketplace connecting vehicle buyers and sellers. RB Global's portfolio of brands also includes Rouse Services, which provides a complete end-to-end asset management, data-driven intelligence and performance benchmarking system; SmartEquip, an innovative technology platform that supports customers' management of the equipment lifecycle and integrates parts procurement with both OEMs and dealers; Xcira, a leader in live simulcast auction technologies; and VeriTread, an online marketplace for heavy haul transport.

Forward-looking Statements
This news release contains forward-looking statements and forward-looking information within the meaning of applicable US and Canadian securities legislation (collectively, "forward-looking statements"), including, in particular, statements regarding future financial and operational results, opportunities, and any other statements regarding events or developments that RB Global believes or anticipates will or may occur in the future. Forward-looking statements are statements that are not historical facts and are generally, although not always, identified by words such as "expect", "plan, "anticipate", "project", "target", "potential", "schedule", "forecast", "budget", "estimate", "intend" or "believe" and similar expressions or their negative connotations, or statements that events or conditions "will", "would", "may", "could", "should" or "might" occur. All such forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. Forward-looking statements necessarily involve assumptions, risks and uncertainties, certain of which are beyond RB Global's control, including risks and uncertainties related to: the effects of the business combination with IAA, including the Company's future financial condition, results of operations, strategy and plans; potential adverse reactions or changes to business or employee relationships, including those resulting from the completion of the merger; the diversion of management time on transaction-related issues; the response of competitors to the merger; the ultimate difficulty, timing, cost and results of integrating the operations of IAA; the fact that operating costs and business disruption may be greater than expected; the effect of the consummation of the merger on the trading price of RB Global's common shares; the ability of RB Global to retain and hire key personnel and employees; the significant costs associated with the merger; the outcome of any legal proceedings that could be instituted against RB Global; the ability of the Company to realize anticipated synergies in the amount, manner or timeframe expected or at all; the failure of the Company to achieve expected operating results in the amount, manner or timeframe expected or at all; changes in capital markets and the ability of the Company to generate cash flow and/or finance operations in the manner expected or to de-lever in the timeframe expected; the failure of RB Global or the Company to meet financial forecasts and/or KPI targets; the Company's ability to commercialize new platform solutions and offerings; legislative, regulatory and economic developments affecting the combined business; general economic and market developments and conditions; the evolving legal, regulatory and tax regimes under which RB Global operates; unpredictability and severity of catastrophic events, including, but not limited to, pandemics, acts of terrorism or outbreak of war or hostilities, as well as RB Global's response to any of the aforementioned factors. Other risks that could cause actual results to differ materially from those described in the forward-looking statements are included in RB Global's periodic reports and other filings with the Securities and Exchange Commission ("SEC") and/or applicable Canadian securities regulatory authorities, including the risk

factors identified under Item 1A "Risk Factors" and the section titled "Summary of Risk Factors" in RB Global's most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2022, and RB Global's periodic reports and other filings with the SEC which are available on the SEC, SEDAR and RB Global' websites The foregoing list is not exhaustive of the factors that may affect RB Global's forward-looking statements. There can be no assurance that forward-looking statements will prove to be accurate, and actual results may differ materially from those expressed in, or implied by, these forward-looking statements. Forward-looking statements are made as of the date of this news release and RB Global does not undertake any obligation to update the information contained herein unless required by applicable securities legislation. For the reasons set forth above, you should not place undue reliance on forward-looking statements. 

Key Operating Metrics

The Company regularly reviews a number of metrics, including the following key operating metrics, to evaluate its business, measure its performance, identify trends affecting its business, and make operating decisions. The Company believes these key operating metrics are useful to investors because management uses these metrics to assess the growth of the Company's business and the effectiveness of its operational strategies.

The Company defines its key operating metrics as follows:

Gross transaction value (GTV): Represents total proceeds from all items sold at the Company's auctions and online marketplaces. GTV is not a measure of financial performance, liquidity, or revenue, and is not presented in the Company's consolidated financial statements.

Total service revenue take rate: Total service revenue divided by total GTV.

Inventory return: Inventory sales revenue less cost of inventory sold.

Inventory rate: Inventory return divided by inventory sales revenue.

Total lots sold: A single asset to be sold, or a group of assets bundled for sale as one unit. Low value assets are sometimes bundled into a single lot, collectively referred to as "small value lots".

Historically, the Company reported total lots sold excluding lots sold in their GovPlanet business. Commencing in the first quarter of 2023, as a result of a change in management organizational structure and the acquisition of IAA, management reviews all auction metrics of the combined businesses as a whole, which includes GovPlanet. In addition, the total bids per lot sold metric was historically used by management as a key metric. This metric has been discontinued since the first quarter of 2023 as it is no longer considered meaningful when reviewing the auction metrics of the combined business and the Company's one reportable segment.

GTV and Selected Condensed Consolidated Financial Information

GTV and Condensed Consolidated Income Statements – Second Quarter
(Expressed in millions of U.S. dollars, except share, per share data and percentages)
(Unaudited)

Condensed Consolidated Balance Sheets
(Expressed in millions of U.S. dollars, except share data)
(Unaudited)