It was a good third quarter for heavy equipment auctioneer Ritchie Bros. The Vancouver-based online and offline auctioneer grew the dollar value of web-based transactions by 19.1% in the quarter on its auction and marketplace websites, to $481.6 million from $404.5 million in the same quarter last year.
Ritchie Bros. sells construction equipment, trucks, drilling equipment and other vehicles online on its RitchieBros.com auction site and its equipment marketplace EquipmentOne.com. The marketplace sold $42.1 million of equipment and other assets on behalf of customers in the third quarter.
For the third quarter ended Sept. 30, Ritchie Bros. reported:
- Total sales of $128.9 million, up 18% from $109.3 million in Q3 2015.
- Net loss of $5.0 million, compared with net income of $21.2 million.
Also in the third quarter, Ritchie Bros. and Caterpillar Inc. jointly announced an agreement in which Ritchie Bros. will become Caterpillar’s preferred global partner for live on-site and online auctions for used Caterpillar equipment. Ritchie Bros. will provide Caterpillar and its dealers with access to proprietary auction platforms, software and other services, all designed to enhance the exchange of information and services between customers, dealers and suppliers, Ritchie Bros. said of the agreement.
The arrangement is part of Caterpillar’s stated Internet of Things connectivity initiative aiming to improve customer fleet utilization. The manufacturer outfits its products with internet sensors that monitor such things as engine idle times, fuel levels and geographic location to help its dealers and end-customers as well as Caterpillar customer service managers to access information on when and where a Caterpillar truck or other machinery needs service. Caterpillar also uses internet sensors to help manage its supply chain and fulfillment of customer orders. For instance, if the production and shipment of Caterpillar trucks or bulldozers ordered by a customer are halted because of a problem at a Caterpillar factory, data from internet sensors will instantly notify Caterpillar where similar vehicles and related parts are available within the manufacturer’s global network of production facilities and dealers.
The agreement with Ritchie Bros. is also contingent on the auction company’s pending acquisition of IronPlanet, an online marketplace for used heavy equipment and other durable assets, announced on Aug. 29. The agreement, which has been approved by the directors of both companies, calls for Ritchie Bros. to pay $758.5 million for IronPlanet. The transaction is expected to close by the first half of 2017.
IronPlanet focuses on corporate accounts, equipment manufacturers, dealers and government entities in equipment disposition situations. It conducts its sales mainly on online-only platforms with weekly online auctions, and in other equipment marketplaces. IronPlanet, a private company based in Pleasanton, Calif., sold about $787 million worth of equipment and other assets through its online sales channels in 2015, according to Ritchie Bros.
“With our strong core auction business and the acquisition of IronPlanet, we are excited about our journey to becoming a unique multichannel equipment disposition company, providing unprecedented choice to customers through both on-site and online sales solutions,” says Ravi Saligram, CEO of Ritchie Bros.
Ritchie Bros. did not report the dollar value of online transactions for the first nine months in its Q3 earnings document, but did break out first and second quarter metrics in the respective quarterly reports. Through the first three quarters of fiscal 2016 Ritchie Bros. grew online transactions 13.4%, to $1.580 billion from $1.393 billion in the same period last year.
For the nine months ended Sept. 30, Ritchie Bros. reported:
- Total sales of $419.6 million, a 10.3% increase from $380.4 million in the first nine months of 2015.
- Net income of $65.6 million, a 28.1% decrease from $91.2 million.
In addition to its flagship auction site and marketplace, Ritchie Bros. operates Mascus, a global online equipment listing service; private negotiated sales through Ritchie Bros. Private Treaty; and ancillary services, including financing and leasing through Ritchie Bros. Financial Services. The company has 45 auction sites in 15 countries.
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