Condensed Consolidated Income Statements - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
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Revenues: | ||||
Total revenue | $ 389,050,000 | $ 393,222,000 | $ 662,305,000 | $ 696,651,000 |
Operating expenses: | ||||
Selling, general and administrative expenses | 100,632,000 | 97,714,000 | 199,017,000 | 192,898,000 |
Acquisition-related costs | 38,000 | 707,000 | ||
Depreciation and amortization expenses | 17,857,000 | 17,112,000 | 37,150,000 | 34,227,000 |
Gain on disposition of property, plant and equipment | (1,213,000) | (101,000) | (1,260,000) | (250,000) |
Foreign exchange loss | 392,000 | 403,000 | 994,000 | 881,000 |
Total operating expenses | 300,250,000 | 315,252,000 | 539,423,000 | 585,093,000 |
Operating income | 88,800,000 | 77,970,000 | 122,882,000 | 111,558,000 |
Interest expense | (8,882,000) | (10,117,000) | (18,064,000) | (20,933,000) |
Other income, net | 857,000 | 1,679,000 | 4,434,000 | 3,718,000 |
Income before income taxes | 80,775,000 | 69,532,000 | 109,252,000 | 94,343,000 |
Income tax expense | 27,656,000 | 15,401,000 | 33,304,000 | 22,040,000 |
Net income | 53,119,000 | 54,131,000 | 75,948,000 | 72,303,000 |
Net income attributable to: | ||||
Stockholders | 53,043,000 | 54,036,000 | 75,851,000 | 72,200,000 |
Non-controlling interests | 76,000 | 95,000 | 97,000 | 103,000 |
Net income | $ 53,119,000 | $ 54,131,000 | $ 75,948,000 | $ 72,303,000 |
Earnings per share attributable to stockholders: | ||||
Basic | $ 0.49 | $ 0.50 | $ 0.70 | $ 0.66 |
Diluted | $ 0.49 | $ 0.49 | $ 0.69 | $ 0.66 |
Weighted average number of shares outstanding: | ||||
Basic | 108,387,490 | 108,707,708 | 108,818,903 | 108,725,871 |
Diluted | 109,323,343 | 109,942,768 | 109,903,808 | 109,982,763 |
Service Revenue [Member] | ||||
Revenues: | ||||
Total revenue | $ 234,139,000 | $ 234,606,000 | $ 417,262,000 | $ 406,978,000 |
Operating expenses: | ||||
Direct expenses | 39,448,000 | 50,268,000 | 78,803,000 | 86,337,000 |
Inventory Sales Revenue [Member] | ||||
Revenues: | ||||
Total revenue | 154,911,000 | 158,616,000 | 245,043,000 | 289,673,000 |
Operating expenses: | ||||
Direct expenses | $ 143,134,000 | $ 149,818,000 | $ 224,719,000 | $ 270,293,000 |
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
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Condensed Consolidated Statements of Comprehensive Income | ||||
Net income | $ 53,119 | $ 54,131 | $ 75,948 | $ 72,303 |
Other comprehensive loss, net of income tax: | ||||
Foreign currency translation adjustment | 10,764 | 2,457 | (5,105) | 823 |
Total comprehensive income | 63,883 | 56,588 | 70,843 | 73,126 |
Total comprehensive income attributable to: | ||||
Stockholders | 63,795 | 56,486 | 70,743 | 73,028 |
Non-controlling interests | 88 | 102 | 100 | 98 |
Total comprehensive income | $ 63,883 | $ 56,588 | $ 70,843 | $ 73,126 |
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Condensed Consolidated Balance Sheets | ||
Common stock, no par value | $ 0 | $ 0 |
Common stock, issued shares | 108,630,537 | 109,337,781 |
Common stock, outstanding shares | 108,630,537 | 109,337,781 |
Summary of significant accounting policies |
6 Months Ended | ||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||
Summary of significant accounting policies | |||||||||||||||||
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, 2019, 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. In March 2020, the World Health Organization declared the outbreak of COVID-19 as a pandemic, which continues to spread throughout the world. The extent of the impact of the COVID-19 pandemic on the operational and financial performance of the Company, including the ability to execute on business strategies and initiatives, will depend on future developments, including the duration and spread of the pandemic and related restrictions placed by oversight bodies and respective global governments, as well as supply and demand impacts driven by the Company’s consignor and buyer base, all of which are uncertain and cannot be easily predicted. Given the dynamic nature of this situation, the Company cannot reasonably estimate the impacts of COVID-19 on its business operations, results of operations, cash flows or financial performance. (b) Revenue recognition Revenues are comprised of:
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. 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. 1. Summary of significant accounting policies (continued) (b) Revenue recognition (continued) Service revenue (continued) 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 in an auction guarantee risk and reward sharing arrangement. 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. 1. Summary of significant accounting policies (continued) (b) Revenue recognition (continued) Inventory 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, travel, advertising and promotion costs and fees paid to unrelated third parties who introduce the Company to equipment sellers who sell property at the Company’s auctions and marketplaces. 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. (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 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. 1. Summary of significant accounting policies (continued) (e) Share-based payments (continued) Equity-classified share-based payments (continued) Share unit plans (continued) The 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 17. 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. 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 Costs of services or Selling, general, and administrative (“SG&A”) expenses. 1. Summary of significant accounting policies (continued) (f) Leases (continued) 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. (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 19). 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
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Significant judgments, estimates and assumptions |
6 Months Ended |
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Jun. 30, 2020 | |
Significant judgments, estimates and assumptions | |
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. For the six months ended June 30, 2020, the Company performed a qualitative assessment of the A&M reporting unit and the Mascus reporting unit with consideration of the current global economic downturn as a result of COVID-19 and the Company concluded there were no indicators of impairment. |
Seasonality |
6 Months Ended |
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Jun. 30, 2020 | |
Seasonality | |
Seasonality | 3. Seasonality The Company’s operations are both seasonal and event driven. Historically, 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. The restrictions imposed and effects of the overall economic environment as a result of the COVID-19 pandemic may continue to impact these trends. |
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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:
4. Segmented information (continued)
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:
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Revenue |
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Revenue | 5. Revenue The Company’s revenue from the rendering of services is as follows:
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Operating expenses |
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Operating expenses | 6. Operating expenses Costs of services
SG&A expenses
Depreciation and amortization expenses
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Income taxes |
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Income taxes | |
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 June 30, 2020, income tax expense was $27,656,000 compared to an income tax expense of $15,401,000 for the same period in 2019. Our effective tax rate was 34% in the second quarter of 2020, compared to 22% in the second quarter of 2019. The effective tax rate increased in the three months ended June 30, 2020 compared to the three months ended June 30, 2019 primarily due to final regulations published on April 8, 2020 by the United States Department of Treasury and the Internal Revenue Service (“IRS”) that clarified income tax benefits related to hybrid financing arrangements that the Company recorded in 2019 and the first quarter of 2020 would not be deductible. The Company had recorded net income tax benefits of approximately $6,228,000 in the twelve months ended December 31, 2019 and $1,072,000 in the three months ended March 31, 2020 which are no longer deductible. In addition, the Company had a smaller income tax recovery related to decreases in uncertain tax positions in 2020 than it did in 2019. Offsetting these increases was the reduced impact of the US tax reform. For the six months ended June 30, 2020, income tax expense was $33,304,000, compared to an income tax expense of $22,040,000 for the same period in 2019. The effective tax rate was 30% for the six months ended June 30, 2020, compared to 23% for the six months ended June 30, 2019. The effective tax rate increased in the six months ended June 30, 2020 compared to the six months ended June 30, 2019 primarily due to the reasons described above.
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Earnings per share attributable to stockholders |
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Earnings per share attributable to stockholders | 8. Earnings per share 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, unvested RSUs, and outstanding stock options. The dilutive effect of potentially dilutive securities is reflected in diluted EPS 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.
8. Earnings per share attributable to stockholders (continued)
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Supplemental cash flow information |
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Supplemental cash flow information | 9. Supplemental cash flow information
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Fair value measurement |
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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:
10. Fair value measurement (continued)
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 loan, before deduction of deferred debt issue costs, approximates its fair value as the interest rate on the loan was short-term in nature. The fair value of the senior unsecured notes is determined by reference to a quoted market price.
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Trade receivables |
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Trade Receivables | 11. Trade receivables Trade receivables are generally secured by the equipment that they relate to as it is Company policy that equipment is not released until payment has been collected. The following table presents the activity in the allowance for expected credit losses for the period ended June 30, 2020:
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Other current assets |
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Other current assets | 12. Other current assets
During the three months ended June 30, 2020, the Company sold excess auction site acreage in the United States. The Company also sold the property that was reclassified to property, plant and equipment during the first quarter of 2020. The sale of the two properties resulted in combined proceeds of $15,555,000 and a combined gain of $1,090,000.
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Other non-current assets |
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Other non-current assets | 13. Other non-current assets
During the three months ended March 31, 2020, the Company received a final distribution of its equity-accounted investments in the Cura Classis entities. The transaction did not result in a significant gain or loss. |
Debt |
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Debt | 14. Debt
Short-term debt is comprised of drawings in different currencies on the Company’s committed revolving credit facilities, and for the three months ended June 30, 2020, have a weighted average interest rate of 1.9% (December 31, 2019: 2.3%). As at June 30, 2020, the Company had unused committed revolving credit facilities aggregating $472,658,000 of which $468,224,000 is available until October 27, 2021 subject to certain covenant restrictions. The Company was in compliance with all financial and other covenants applicable to the credit facilities at June 30, 2020. |
Other non-current liabilities |
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Other non-current liabilities | 15. Other non-current liabilities
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Equity and dividends |
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Equity and dividends | 16. 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. Share repurchase There were no share repurchases made during the three months ended June 30, 2020 (three months ended June 30, 2019: 1,223,674 common shares repurchased for $42,012,000). There were 1,525,312 common shares repurchased for $53,170,000 during the six months ended June 30, 2020 (six months ended June 30, 2019: 1,223,674 common shares repurchased for $42,012,000). Dividends Declared and paid The Company declared and paid the following dividends during the six months ended June 30, 2020 and 2019:
Declared and undistributed Subsequent to June 30, 2020, the Company’s Board of Directors declared a quarterly dividend of $0.22 cents per common share, payable on September 16, 2020 to stockholders of record on August 26, 2020. 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. 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 gain of $5,158,000 and net loss of $2,334,000 for the three and six months ended June 30, 2020 (2019: net gain of $2,508,000 and $1,653,000).
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Share-based payments |
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Share-based payments | 17. Share-based payments Share-based payments consist of the following compensation costs:
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 six months ended June 30, 2020 is presented below:
The significant assumptions used to estimate the fair value of stock options granted during the six months ended June 30, 2020 and 2019 are presented in the following table on a weighted average basis:
17. Share-based payments (continued) Stock option plans (continued) As at June 30, 2020, the unrecognized stock-based compensation cost related to the non-vested stock options was $7,109,000, which is expected to be recognized over a weighted average period of 2.5 years. Share unit plans Share unit activity for the six months ended June 30, 2020 is presented below:
PSUs 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. As at June 30, 2020 the unrecognized share unit expense related to equity-classified PSUs was $14,139,000, which is expected to be recognized over a weighted average period of 2.3 years. RSUs The Company has RSU plans that are equity-settled and not subject to market vesting conditions. As at June 30, 2020, the unrecognized share unit expense related to equity-classified RSUs was $1,921,000, which is expected to be recognized over a weighted average period of 1.3 years. 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 June 30, 2020, the Company had a total share unit liability of $5,349,000 (December 31, 2019: $5,130,000) 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 |
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Leases | 18. Leases The Company’s breakdown of lease expense is as follows:
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. The future aggregate minimum lease payments under non-cancellable operating leases are as follows:
At June 30, 2020 the weighted average remaining lease term for operating leases is 15.5 years and the weighted average discount rate is 4.1%. 18. Leases (continued) 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 June 30, 2020, the net carrying amount of computer and yard equipment and other assets under capital leases is $24,461,000 (December 31, 2019: $23,258,000), and is included in the total property, plant and equipment as disclosed on the consolidated balance sheets.
The future aggregate minimum lease payments under non-cancellable finance leases are as follows:
At June 30, 2020 the weighted average remaining lease term for finance leases is 3.4 years and the weighted average discount rate is 3.8%. Subleases As at June 30, 2020, the total future minimum sublease payments expected to be received under non-cancellable subleases is $359,000. |
Commitments |
6 Months Ended |
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Jun. 30, 2020 | |
Leases | |
Commitments | 19. 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 original performance period commenced in April 2018 and concluded in March 2020. The Company has exercised its option for one year, extending the performance period to March 2021. 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. At June 30, 2020, the Company has purchased $1,412,000 pursuant to the 12-month period of this contract which commenced in April 2020. |
Contingencies |
6 Months Ended |
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Jun. 30, 2020 | |
Contingencies | |
Contingencies | 20. 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. At June 30, 2020, there were $48,920,000 of assets guaranteed under contract, of which 74% is expected to be sold prior to September 30, 2020 with the remainder to be sold by December 31, 2020 (December 31, 2019: $63,612,000 of which 39% was expected to be sold prior to the end of March 31, 2020 with the remainder to be sold by June 30, 2020). The outstanding guarantee amounts are undiscounted and before estimated proceeds from sale at auction.
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Subsequent events |
6 Months Ended |
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Jun. 30, 2020 | |
Subsequent events | |
Subsequent Events | 21. Subsequent event On August 5, 2020, 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 accounting policies (Policies) |
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Summary of significant accounting policies | |||||||||||
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, 2019, 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. In March 2020, the World Health Organization declared the outbreak of COVID-19 as a pandemic, which continues to spread throughout the world. The extent of the impact of the COVID-19 pandemic on the operational and financial performance of the Company, including the ability to execute on business strategies and initiatives, will depend on future developments, including the duration and spread of the pandemic and related restrictions placed by oversight bodies and respective global governments, as well as supply and demand impacts driven by the Company’s consignor and buyer base, all of which are uncertain and cannot be easily predicted. Given the dynamic nature of this situation, the Company cannot reasonably estimate the impacts of COVID-19 on its business operations, results of operations, cash flows or financial performance. |
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Revenue recognition | (b) Revenue recognition Revenues are comprised of:
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. 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. 1. Summary of significant accounting policies (continued) (b) Revenue recognition (continued) Service revenue (continued) 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 in an auction guarantee risk and reward sharing arrangement. 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. 1. Summary of significant accounting policies (continued) (b) Revenue recognition (continued) Inventory 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. |
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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, travel, advertising and promotion costs and fees paid to unrelated third parties who introduce the Company to equipment sellers who sell property at the Company’s auctions and marketplaces. 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. |
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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. |
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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 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. 1. Summary of significant accounting policies (continued) (e) Share-based payments (continued) Equity-classified share-based payments (continued) Share unit plans (continued) The 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 17. 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. 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. |
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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 Costs of services or Selling, general, and administrative (“SG&A”) expenses. 1. Summary of significant accounting policies (continued) (f) Leases (continued) 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. |
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Inventories | (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 19). 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. |
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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. |
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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. |
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New and amended accounting standards | (j) New and amended accounting standards
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Segmented information (Tables) |
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Schedule of Revenue and Net income by Segment |
4. Segmented information (continued)
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Geographic Information of Revenue | 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:
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Revenue (Tables) |
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Revenue from the Rendering of Services |
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Operating expenses (Tables) |
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Operating expenses | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Direct Operating Expenses |
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Schedule of Selling, General and Administrative Expenses |
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Schedule of Depreciation and Amortization Expenses |
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Earnings per share attributable to stockholders (Tables) |
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Earnings per share attributable to stockholders | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Basic and Diluted Earnings Per Share |
8. Earnings per share attributable to stockholders (continued)
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Supplemental cash flow information (Tables) |
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Supplemental cash flow information | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Changes in Operating Assets and Liabilities |
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Schedule of Supplemental Cash Flow |
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Schedule of Cash, Cash Equivalents and Restricted Cash |
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Fair value measurement (Tables) |
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Fair Value Assets Recurring and Nonrecurring |
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Trade receivables (Tables) |
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Trade receivables | |||||||||||||||||||||
Schedule of activity in the allowance for expected credit losses |
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Other current assets (Tables) |
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Other current assets | ||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other current assets |
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Summary of Assets held for sale |
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Other non-current assets (Tables) |
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Other non-current assets | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other non-current assets |
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Debt (Tables) |
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Schedule of Debt |
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Other non-current liabilities (Tables) |
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Other non-current liabilities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of other non-current liabilities |
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Equity and dividends (Tables) |
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Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity and dividends | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Quarterly Dividends Declared and Paid |
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Share-based payments (Tables) |
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Share-based payments | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation Costs Related to Share-Based Payments |
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Summary of Stock Option Activity |
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Summary of Significant Assumptions Used to Estimate the Fair Value of Stock Options |
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Summary of Share Unit Activity |
|
Leases (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Leases | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Breakdown of Lease Expense |
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Future Minimum Operating Lease Payments |
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Information Disclosed on Balance Sheets |
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Future Minimum Finance Lease Payments |
|
Summary of significant accounting policies (Details) |
6 Months Ended |
---|---|
Jun. 30, 2020 | |
Liability Classified Awards [Member] | Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting period | 3 years |
Segmented information (Narrative) (Details) |
6 Months Ended |
---|---|
Jun. 30, 2020
segment
| |
Segmented information | |
Number of reportable segments | 1 |
Segmented information (Schedule of Revenue and Net income by Segment) (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Segment Reporting [Line Items] | ||||
Revenue | $ 389,050,000 | $ 393,222,000 | $ 662,305,000 | $ 696,651,000 |
Selling, general and administrative expenses ("SG&A") | 100,632,000 | 97,714,000 | 199,017,000 | 192,898,000 |
Acquisition-related costs | 38,000 | 707,000 | ||
Depreciation and amortization expenses ("D&A") | 17,857,000 | 17,112,000 | 37,150,000 | 34,227,000 |
Gain on disposition of property, plant and equipment ("PPE") | (1,213,000) | (101,000) | (1,260,000) | (250,000) |
Foreign exchange loss | 392,000 | 403,000 | 994,000 | 881,000 |
Operating income | 88,800,000 | 77,970,000 | 122,882,000 | 111,558,000 |
Interest expense | (8,882,000) | (10,117,000) | (18,064,000) | (20,933,000) |
Other income, net | 857,000 | 1,679,000 | 4,434,000 | 3,718,000 |
Income tax expense | (27,656,000) | (15,401,000) | (33,304,000) | (22,040,000) |
Net income | 53,119,000 | 54,131,000 | 75,948,000 | 72,303,000 |
Operating Segments [Member] | ||||
Segment Reporting [Line Items] | ||||
Revenue | 389,050,000 | 393,222,000 | 662,305,000 | 696,651,000 |
Selling, general and administrative expenses ("SG&A") | 100,632,000 | 97,714,000 | 199,017,000 | 192,898,000 |
Segment profit | 105,836,000 | 95,422,000 | 159,766,000 | 147,123,000 |
Acquisition-related costs | 38,000 | 707,000 | ||
Depreciation and amortization expenses ("D&A") | 17,857,000 | 17,112,000 | 37,150,000 | 34,227,000 |
Gain on disposition of property, plant and equipment ("PPE") | (1,213,000) | (101,000) | (1,260,000) | (250,000) |
Foreign exchange loss | 392,000 | 403,000 | 994,000 | 881,000 |
Operating income | 88,800,000 | 77,970,000 | 122,882,000 | 111,558,000 |
Interest expense | (8,882,000) | (10,117,000) | (18,064,000) | (20,933,000) |
Other income, net | 857,000 | 1,679,000 | 4,434,000 | 3,718,000 |
Income tax expense | (27,656,000) | (15,401,000) | (33,304,000) | (22,040,000) |
Net income | 53,119,000 | 54,131,000 | 75,948,000 | 72,303,000 |
Auctions and Marketplaces [Member] | Operating Segments [Member] | ||||
Segment Reporting [Line Items] | ||||
Revenue | 354,559,000 | 359,666,000 | 599,434,000 | 634,160,000 |
Selling, general and administrative expenses ("SG&A") | 94,559,000 | 91,466,000 | 186,144,000 | 180,648,000 |
Segment profit | 94,676,000 | 85,831,000 | 141,286,000 | 129,851,000 |
Other Reporting Unit [Member] | Operating Segments [Member] | ||||
Segment Reporting [Line Items] | ||||
Revenue | 34,491,000 | 33,556,000 | 62,871,000 | 62,491,000 |
Selling, general and administrative expenses ("SG&A") | 6,073,000 | 6,248,000 | 12,873,000 | 12,250,000 |
Segment profit | 11,160,000 | 9,591,000 | 18,480,000 | 17,272,000 |
Service Revenue [Member] | ||||
Segment Reporting [Line Items] | ||||
Revenue | 234,139,000 | 234,606,000 | 417,262,000 | 406,978,000 |
Direct expenses | 39,448,000 | 50,268,000 | 78,803,000 | 86,337,000 |
Service Revenue [Member] | Operating Segments [Member] | ||||
Segment Reporting [Line Items] | ||||
Revenue | 234,139,000 | 234,606,000 | 417,262,000 | 406,978,000 |
Direct expenses | 39,448,000 | 50,268,000 | 78,803,000 | 86,337,000 |
Service Revenue [Member] | Auctions and Marketplaces [Member] | Operating Segments [Member] | ||||
Segment Reporting [Line Items] | ||||
Revenue | 199,648,000 | 201,050,000 | 354,391,000 | 344,487,000 |
Direct expenses | 22,190,000 | 32,551,000 | 47,285,000 | 53,368,000 |
Service Revenue [Member] | Other Reporting Unit [Member] | Operating Segments [Member] | ||||
Segment Reporting [Line Items] | ||||
Revenue | 34,491,000 | 33,556,000 | 62,871,000 | 62,491,000 |
Direct expenses | 17,258,000 | 17,717,000 | 31,518,000 | 32,969,000 |
Inventory Sales Revenue [Member] | ||||
Segment Reporting [Line Items] | ||||
Revenue | 154,911,000 | 158,616,000 | 245,043,000 | 289,673,000 |
Direct expenses | 143,134,000 | 149,818,000 | 224,719,000 | 270,293,000 |
Inventory Sales Revenue [Member] | Operating Segments [Member] | ||||
Segment Reporting [Line Items] | ||||
Revenue | 154,911,000 | 158,616,000 | 245,043,000 | 289,673,000 |
Direct expenses | 143,134,000 | 149,818,000 | 224,719,000 | 270,293,000 |
Inventory Sales Revenue [Member] | Auctions and Marketplaces [Member] | Operating Segments [Member] | ||||
Segment Reporting [Line Items] | ||||
Revenue | 154,911,000 | 158,616,000 | 245,043,000 | 289,673,000 |
Direct expenses | $ 143,134,000 | $ 149,818,000 | $ 224,719,000 | $ 270,293,000 |
Segmented information (Geographic Information of Revenue) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | $ 389,050 | $ 393,222 | $ 662,305 | $ 696,651 |
United States [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | 204,588 | 212,233 | 395,118 | 395,806 |
Canada [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | 97,990 | 90,410 | 133,633 | 121,940 |
Europe [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | 47,430 | 47,283 | 73,768 | 102,068 |
Other [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | $ 39,042 | $ 43,296 | $ 59,786 | $ 76,837 |
Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Revenue | $ 389,050 | $ 393,222 | $ 662,305 | $ 696,651 |
Service Revenue [Member] | ||||
Revenue | 234,139 | 234,606 | 417,262 | 406,978 |
Commission Revenue [Member] | ||||
Revenue | 125,465 | 134,466 | 218,950 | 226,746 |
Fees Revenue [Member] | ||||
Revenue | 108,674 | 100,140 | 198,312 | 180,232 |
Inventory Sales Revenue [Member] | ||||
Revenue | $ 154,911 | $ 158,616 | $ 245,043 | $ 289,673 |
Operating expenses (Schedule of Direct Operating Expenses) (Details) - Service Revenue [Member] - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Ancillary and logistical service expenses | $ 16,060 | $ 16,472 | $ 28,818 | $ 30,231 |
Employee compensation expenses | 11,311 | 14,906 | 23,615 | 25,713 |
Buildings, facilities and technology expenses | 2,076 | 2,172 | 6,115 | 4,306 |
Travel, advertising and promotion expenses | 6,161 | 12,807 | 12,736 | 18,675 |
Other costs of services | 3,840 | 3,911 | 7,519 | 7,412 |
Total direct expenses | $ 39,448 | $ 50,268 | $ 78,803 | $ 86,337 |
Operating expenses (Schedule of Selling, General and Administrative Expenses) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Operating expenses | ||||
Employee compensation expenses | $ 70,807 | $ 63,889 | $ 133,302 | $ 125,353 |
Buildings, facilities and technology expenses | 14,616 | 14,582 | 30,207 | 30,497 |
Travel, advertising and promotion expenses | 4,817 | 9,225 | 15,086 | 18,367 |
Professional fees | 4,577 | 4,155 | 9,024 | 8,230 |
Other SG&A expenses | 5,815 | 5,863 | 11,398 | 10,451 |
Total selling, general and administrative expenses | $ 100,632 | $ 97,714 | $ 199,017 | $ 192,898 |
Operating expenses (Schedule of Depreciation and Amortization Expenses) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Operating expenses | ||||
Depreciation expense | $ 7,536 | $ 7,157 | $ 15,573 | $ 14,325 |
Amortization expense | 10,321 | 9,955 | 21,577 | 19,902 |
Total depreciation and amortization expenses | $ 17,857 | $ 17,112 | $ 37,150 | $ 34,227 |
Income taxes (Details) - USD ($) |
3 Months Ended | 6 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|
Jun. 30, 2020 |
Mar. 31, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
Income taxes | ||||||
Income tax expense | $ 27,656,000 | $ 15,401,000 | $ 33,304,000 | $ 22,040,000 | ||
Effective income tax rate | 34.00% | 22.00% | 30.00% | 23.00% | ||
Recorded net income tax benefits denied | $ 1,072,000 | $ 6,228,000 |
Earnings per share attributable to stockholders (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Net income attributable to: | ||||
Basic | $ 53,043 | $ 54,036 | $ 75,851 | $ 72,200 |
Diluted | $ 53,043 | $ 54,036 | $ 75,851 | $ 72,200 |
Weighted average number of shares outstanding: | ||||
Basic | 108,387,490 | 108,707,708 | 108,818,903 | 108,725,871 |
Diluted | 109,323,343 | 109,942,768 | 109,903,808 | 109,982,763 |
Per Share Amount | ||||
Basic | $ 0.49 | $ 0.50 | $ 0.70 | $ 0.66 |
Diluted | $ 0.49 | $ 0.49 | $ 0.69 | $ 0.66 |
Share Units [Member] | ||||
Weighted average number of shares outstanding: | ||||
Effect of dilutive securities: | 424,812 | 442,601 | 505,443 | 464,613 |
Stock Options [Member] | ||||
Weighted average number of shares outstanding: | ||||
Effect of dilutive securities: | 511,041 | 792,459 | 579,462 | 792,279 |
Per Share Amount | ||||
Effect of dilutive securities: | (0.01) | (0.01) |
Supplemental cash flow information (Schedule of Net Changes In Operating Assets and Liabilities) (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Increase (Decrease) in Operating Capital [Abstract] | ||
Trade and other receivables | $ (191,182) | $ (208,486) |
Inventory | 1,447 | 33,584 |
Advances against auction contracts | 5,207 | 188 |
Prepaid expenses and deposits | 1,980 | 739 |
Income taxes receivable | 2,873 | (306) |
Auction proceeds payable | 222,006 | 252,765 |
Trade and other payables | 19,769 | (40,263) |
Income taxes payable | 8,852 | 3,341 |
Operating lease obligation | (6,167) | (7,415) |
Other | (1,961) | 1,889 |
Net changes in operating assets and liabilities | $ 62,824 | $ 36,036 |
Supplemental cash flow information (Schedule of Supplemental cash flow) (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Supplemental Cash Flow Information [Abstract] | ||
Interest paid, net of interest capitalized | $ 16,524 | $ 19,024 |
Interest received | 1,265 | 1,918 |
Net income taxes paid | 13,850 | 18,455 |
Non-cash purchase of property, plant and equipment under capital lease | 5,930 | 8,335 |
Non-cash right of use assets obtained (reassessed) in exchange for new lease obligations | $ (139) | $ 20,179 |
Supplemental cash flow information (Schedule of Cash, Cash Equivalents and Restricted Cash) (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|---|---|
Supplemental cash flow information | ||||
Cash and cash equivalents | $ 389,720 | $ 359,671 | ||
Restricted cash | 148,293 | 60,585 | ||
Cash, cash equivalents, and restricted cash | $ 538,013 | $ 420,256 | $ 338,994 | $ 305,567 |
Trade receivables (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2020
USD ($)
| |
Activity in the allowance for expected credit losses | |
Opening balance at January 1, 2020 | $ (5,225) |
Current period provision | (1,601) |
Write-off charged against the allowance | 2,267 |
Balance, March 31, 2020 | $ (4,559) |
Other current assets (Schedule of Other Current Assets) (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Other current assets | ||
Advances against auction contracts | $ 7,669 | $ 12,925 |
Assets held for sale | 15,051 | |
Prepaid expenses and deposits | 19,817 | 22,184 |
Other Current Assets | $ 27,486 | $ 50,160 |
Other current assets (Summary of Assets Held For Sale) (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2020
USD ($)
| |
Other current assets | |
Beginning balance | $ 15,051 |
Reclassified from (to) property, plant and equipment | (6,888) |
Disposal | $ (8,163) |
Other Current Assets (Narrative) (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Mar. 31, 2020 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Other current assets | |||
Proceeds on disposition of assets | $ 15,555,000 | $ 16,106,000 | $ 583,000 |
Gain on sale of assets | $ 1,090,000 |
Other non-current assets (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Other non-current assets | ||
Right-of-use assets | $ 107,760 | $ 116,209 |
Tax receivable | 9,631 | 11,792 |
Equity-accounted investments | 4,276 | |
Deferred debt issue costs | 958 | 1,403 |
Other | 12,977 | 11,999 |
Other non-current assets | $ 131,326 | $ 145,679 |
Debt (Additional Information) (Details) - USD ($) |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
Debt [Line Items] | |||
Repayment of debt | $ 8,633,000 | $ 14,514,000 | |
Committed Revolving Credit Facilities [Member] | |||
Debt [Line Items] | |||
Maximum borrowing capacity | 472,658,000 | ||
Available borrowing capacity | $ 468,224,000 | ||
Revolving Credit Facility [Member] | |||
Debt [Line Items] | |||
Weighted average interest rate | 1.90% | 2.30% |
Debt (Summary of Debt) (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Dec. 31, 2019 |
|
Debt [Line Items] | ||
Short-term debt | $ 21,980 | $ 4,705 |
Total long-term debt | 631,963 | 645,481 |
Total debt | 653,943 | 650,186 |
Current portion | 17,588 | 18,277 |
Non-current portion | 614,375 | 627,204 |
Term Loan [Member] | ||
Debt [Line Items] | ||
Less: unamortized debt issue costs | (568) | (807) |
Senior Unsecured Notes [Member] | ||
Debt [Line Items] | ||
Less: unamortized debt issue costs | (8,171) | (9,067) |
3.905% Term Loan, Due October 2021 [Member] | Term Loan [Member] | ||
Debt [Line Items] | ||
Long-term Debt | $ 140,702 | 155,355 |
Delayed Draw Term Loan, In Canadian Dollars, Available until October 2021 [Member] | Term Loan [Member] | ||
Debt [Line Items] | ||
Weighted average interest rate | 2.555% | |
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 (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Other non-current liabilities | ||
Operating lease liability | $ 103,518 | $ 111,322 |
Tax payable | 18,997 | 20,232 |
Finance lease liability | 16,801 | 16,336 |
Other | 3,202 | 3,348 |
Total other non-current liabilities | $ 142,518 | $ 151,238 |
Equity and dividends (Additional Information) (Details) - USD ($) |
1 Months Ended | 3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|---|
Jul. 31, 2020 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Dividends Payable [Line Items] | |||||
Preferred shares issued | 0 | 0 | |||
Stock repurchased during period, shares | 0 | 1,223,674 | 1,525,312 | 1,223,674 | |
Stock repurchased during period, value | $ 42,012,000 | $ 53,170,000 | $ 42,012,000 | ||
Intra-entity foreign currency transactions | $ 5,158,000 | $ 2,508,000 | $ (2,334,000) | $ 1,653,000 | |
Subsequent Events [Member] | |||||
Dividends Payable [Line Items] | |||||
Dividends declared (usd per share) | $ 0.22 | ||||
Dividends payable date | Sep. 16, 2020 | ||||
Dividends, date of record | Aug. 26, 2020 |
Share-based payments (Compensation Costs Related To Share-Based Payments) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock option compensation expense | $ 2,730 | $ 3,199 | ||
Equity-classified share units | $ 3,231 | $ 3,535 | 5,017 | 5,903 |
Liability-classified share units | 971 | 90 | (185) | 240 |
Employee share purchase plan - employer contributions | 610 | 572 | 1,199 | 1,125 |
Total compensation costs related to share based payments | 6,355 | 5,857 | 8,761 | 10,467 |
Selling, General and Administrative Expenses [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock option compensation expense | $ 1,543 | $ 1,660 | $ 2,730 | $ 3,199 |
Share-based payments (Summary of Stock Option Pricing Assumptions) (Details) |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Share-based payments | ||
Risk free interest rate | 0.70% | 2.50% |
Expected dividend yield | 1.98% | 2.06% |
Expected lives of the stock options | 5 years | 5 years |
Expected volatility | 27.80% | 26.80% |
Leases (Narrative) (Details) - USD ($) |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Lessee, Lease, Description [Line Items] | ||
Weighted average remaining lease term | 15 years 6 months | |
Discount rate | 4.10% | |
Weighted average remaining finance lease term | 3 years 4 months 24 days | |
Finance discount rate | 3.80% | |
Future minimum sublease payments | $ 359,000 | |
Net book value | $ 475,936,000 | $ 484,482,000 |
Minimum [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease fixed term | 1 month | |
Finance lease term | 1 month | |
Maximum [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease fixed term | 20 years | |
Finance lease term | 6 years | |
Finance leases [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Net book value | $ 24,461,000 | $ 23,258,000 |
Leases (Breakdown of Lease Expense) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Leases | ||||
Operating lease cost | $ 3,969 | $ 4,071 | $ 8,470 | $ 9,283 |
Amortization of leased assets | 2,195 | 1,692 | 4,309 | 3,452 |
Interest on lease liabilities | 229 | 199 | 462 | 354 |
Short-term lease cost | 2,151 | 2,510 | 5,031 | 5,075 |
Sublease income | (148) | (143) | (296) | (297) |
Lease expense | $ 8,396 | $ 8,329 | $ 17,976 | $ 17,867 |
Leases (Future Minimum Operating Lease Payments) (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Leases | ||
Remainder of 2020 | $ 8,327 | |
2021 | 13,352 | |
2022 | 12,092 | |
2023 | 10,478 | |
2024 | 8,752 | |
Thereafter | 103,710 | |
Total future minimum lease payments | 156,711 | |
less: imputed interest | (43,116) | |
Total operating lease liability | 113,595 | |
less: operating lease liability - current | (10,077) | |
Total operating lease liability - non-current | $ 103,518 | $ 111,322 |
Leases (Assets Recorded Under Capital Leases) (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | $ 13,717 | $ 15,314 |
Accumulated depreciation | (6,748) | (7,832) |
Net book value | 6,969 | 7,482 |
Yard And Others [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 25,490 | 21,525 |
Accumulated depreciation | (7,998) | (5,749) |
Net book value | 17,492 | 15,776 |
Finance leases [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 39,207 | 36,839 |
Accumulated depreciation | (14,746) | (13,581) |
Net book value | $ 24,461 | $ 23,258 |
Leases (Future Minimum Finance Lease Payments) (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Leases | ||
Remainder of 2020 | $ 4,730 | |
2021 | 8,359 | |
2022 | 6,501 | |
2023 | 4,510 | |
2024 | 2,357 | |
Thereafter | 247 | |
Total future minimum lease payments | 26,704 | |
less: imputed interest | (1,572) | |
Total finance lease liability | 25,132 | |
less: finance lease liability - current | (8,331) | |
Total finance lease liability - non-current | $ 16,801 | $ 16,336 |
Commitments (Details) |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2020
USD ($)
item
|
Dec. 31, 2017 |
|
Commitments [Line Items] | ||
Contract period for inventory purchase | 2 years | |
Period for options to extend contract period | 4 years | |
Period of options exercised | 1 year | |
Purchase commitment amount purchased | $ 1,412,000 | |
Minimum [Member] | ||
Commitments [Line Items] | ||
Purchase commitment quantity | item | 150,000 | |
Purchase commitment | $ 11,104,000 | |
Maximum [Member] | ||
Commitments [Line Items] | ||
Purchase commitment quantity | item | 245,900 | |
Purchase commitment | $ 51,028,000 |
Contingencies (Details) - USD ($) |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2020 |
Dec. 31, 2019 |
|
Contingencies | ||
Assets guaranteed under contract | $ 48,920,000 | $ 63,612,000 |
Percentage of assets expected to be sold | 74.00% | 39.00% |
Subsequent events (Details) |
Aug. 05, 2020
USD ($)
|
---|---|
Subsequent Events [Member] | |
Subsequent Event [Line Items] | |
Stock repurchase program, authorized amount | $ 100,000,000 |