RB Global reports first quarter 2024 results

WESTCHESTER, Ill., May 9, 2024 /PRNewswire/ - RB Global, Inc. (NYSE: RBA) (TSX: RBA) (the "Company", "RB Global", "we", "us", "their", or "our") reported the following results for the three months ended March 31, 2024.

"Our solid start to the year directly reflects our "One Team-All In" culture and our dedication to over delivering on our commitments to our customers" said Jim Kessler, CEO of RB Global. "Robust execution in our automotive sector continues to translate into strong performance for our partners".

"The increase in our full-year guidance speaks to our commitment to operational excellence and focus on investing in profitable growth" said Eric J. Guerin, Chief Financial Officer. "Strong financial performance has allowed the Company to meet the net leverage target communicated during the IAA transaction a year ahead of schedule".

First Quarter Financial Highlights^1,2,3:

• GTV increased 115% year-over-year to $4.1 billion, which includes $2.3 billion from IAA.
• Total revenue increased 108% year-over-year to $1.1 billion, which includes $588.6 million from IAA.
  • Service revenue increased 147% year-over-year to $849.1 million, which includes $516.9 million from IAA.
  • Inventory sales revenue increased 28% year-over-year to $215.6 million, which includes $71.7 million from IAA.
• Net income (loss) available to common stockholders increased 384% year-over-year to $97.1 million.
• Diluted earnings (loss) per share available to common stockholders increased 289% to $0.53 per share.
• Diluted adjusted earnings per share available to common stockholders increased 58% year-over-year to $0.90 per share.
• Adjusted EBITDA increased 150% year-over-year to $331.0 million.

2024 Financial Outlook
The Company has updated its full-year 2024 outlook for select financial data, as shown below:

The Company has not provided a reconciliation of Adjusted EBITDA outlook for fiscal 2024 to GAAP net income, the most directly comparable GAAP financial measure, because without unreasonable efforts, it is unable to predict with reasonable certainty the amount or timing of non-GAAP adjustments that are used to calculate Adjusted EBITDA, including but not limited to: (a) advisory, legal and restructuring expenses (b) the net loss or gain on the sale of property plant & equipment or other assets (c) acquisition-related or integration costs relating to our mergers and acquisition activity, including severance costs (d) share-based payments compensation expense which value is directly impacted by the fluctuations in our share price and other variables and, (e) other expenses that we do not believe are indicative of our ongoing operations. These adjustments are uncertain, depend on various factors that are beyond our control and could have a material impact on net income for fiscal 2024.

Additional Financial and Operational Highlights

GTV by Sector 

Lots Sold by Sector

Supplemental Pro Forma Revenue Related Highlights¹

 Supplemental Pro Forma GTV by Sector¹

 Supplemental Pro Forma Lots Sold by Sector¹

Reconciliation of Operating Expenses

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

For the First Quarter:

• GTV increased 115% year-over-year to $4.1 billion, primarily from the inclusion of $2.3 billion GTV from IAA. GTV increased 10% year-over-year on a pro forma combined basis, with strength coming from the commercial construction and transportation sector and the automotive sector, partially offset by declines in the other sector.
• Service revenue increased 147% year-over-year to $849.1 million, primarily from the inclusion of $516.9 million of service revenue from IAA. Service revenue increased 14% year-over-year on a pro forma combined basis on higher GTV and a higher average service revenue take rate. Service revenue take rate expanded 80 basis points on a pro forma combined basis year-over-year to 20.8% driven by a higher average buyer fee rate and growth in our marketplace services revenue. Growth in marketplace services revenue was driven by higher ancillary revenue and a higher auction-related fee structure.
• Inventory sales revenue increased 28% year-over-year to $215.6 million, mainly due to the inclusion of $71.7 million of inventory sales revenue from IAA. Inventory sales revenue decreased 12% year-over-year on a pro forma combined basis due to lower automotive and commercial construction and transportation-related revenue. Inventory rate declined 100 basis points year-over-year on a pro forma combined basis to 8.8%. The decline in inventory rate year-over-year can be attributed to a decrease in prices due to the asset mix and lower price realization in the commercial construction and transportation sector and an increase the average cost of vehicles sold in the automotive sector. This decline was partially offset by strong performance in the GovPlanet business.
• Net income (loss) available to common stockholders increased to $97.1 million, mainly due to an increase in operating income partially offset by higher net interest expense, higher income tax expense, and allocated earnings to Series A Senior Preferred shareholders.
• Adjusted EBITDA¹ increased 150% year-over-year mainly driven by the inclusion of IAA and strong operating performance.

Dividend Information

Quarterly Dividend
On May 8, 2024, the Company declared a quarterly cash dividend of $0.27 per common share, payable on June 20, 2024 to shareholders of record on May 29, 2024.

Upcoming Investor Events
RB Global will participate in the following investor conferences in the second quarter

• RBC Canadian Industrials Conference, May 16, Toronto, Canada
• Jefferies Automotive Conference, May 23, New York City, United States
• William Blair Growth Conference, June 5, Chicago, United States

First Quarter 2024 Earnings Conference Call
RB Global is hosting a conference call to discuss its financial results for the quarter ended March 31, 2024 at 4:30 PM ET on May 9, 2024. The replay of the webcast will be available through June 9, 2024.

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

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

Forward-looking Statements
This news release contains forward-looking statements and forward-looking information within the meaning of applicable US and Canadian securities legislation (collectively, "forward-looking statements"), including, in particular, statements regarding future financial and operational results, opportunities, and any other statements regarding events or developments that RB Global believes or anticipates will or may occur in the future. Forward-looking statements are statements that are not historical facts and are generally, although not always, identified by words such as "expect", "plan, "anticipate", "project", "target", "potential", "schedule", "forecast", "budget", "estimate", "intend" or "believe" and similar expressions or their negative connotations, or statements that events or conditions "will", "would", "may", "could", "should" or "might" occur. All such forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. Forward-looking statements necessarily involve assumptions, risks and uncertainties, certain of which are beyond RB Global's control, including risks and uncertainties related to: the effects of the business combination with IAA, including the Company's future financial condition, results of operations, strategy and plans; potential adverse reactions or changes to business or employee relationships, including those resulting from the completion of the merger; the diversion of management time on transaction-related issues; the response of competitors to the merger; the ultimate difficulty, timing, cost and results of integrating the operations of IAA; the fact that operating costs and business disruption may be greater than expected; the effect of the consummation of the merger on the trading price of RB Global's common shares; the ability of RB Global to retain and hire key personnel and employees; the significant costs associated with the merger; the outcome of any legal proceedings that could be instituted against RB Global; the ability of the Company to realize anticipated synergies in the amount, manner or timeframe expected or at all; the failure of the Company to achieve expected operating results in the amount, manner or timeframe expected or at all; changes in capital markets and the ability of the Company to generate cash flow and/or finance operations in the manner expected or to de-lever in the timeframe

expected; the failure of RB Global or the Company to meet financial forecasts and/or KPI targets; the Company's ability to commercialize new platform solutions and offerings; legislative, regulatory and economic developments affecting the combined business; general economic and market developments and conditions; the evolving legal, regulatory and tax regimes under which RB Global operates; unpredictability and severity of catastrophic events, including, but not limited to, pandemics, acts of terrorism or outbreak of war or hostilities, as well as RB Global's response to any of the aforementioned factors. Other risks that could cause actual results to differ materially from those described in the forward-looking statements are included in RB Global's periodic reports and other filings with the Securities and Exchange Commission ("SEC") and/or applicable Canadian securities regulatory authorities, including the risk factors identified under Item 1A "Risk Factors" and the section titled "Summary of Risk Factors" in RB Global's most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and RB Global's periodic reports and other filings with the SEC, which are available on the SEC, SEDAR and RB Global' websites. The foregoing list is not exhaustive of the factors that may affect RB Global's forward-looking statements. There can be no assurance that forward-looking statements will prove to be accurate, and actual results may differ materially from those expressed in, or implied by, these forward-looking statements. Forward-looking statements are made as of the date of this news release and RB Global does not undertake any obligation to update the information contained herein unless required by applicable securities legislation. For the reasons set forth above, you should not place undue reliance on forward-looking statements.

Key Operating Metrics

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

The Company defines its key operating metrics as follows:

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

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

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

Inventory rate: Inventory return divided by inventory sales revenue.

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

Non-GAAP Measures

This news release references non-GAAP measures. These measures do not have a standardized meaning and are, therefore, unlikely to be comparable to similar measures presented by other companies. The presentation of this financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation of, or as a substitute for, the financial information prepared and presented in accordance with US GAAP.

Following the recent changes in the Company's leadership team and integration with IAA, the Company reevaluated the metrics used to measure profitability and business performance. As a result, beginning in the first quarter of 2024, the Company will no longer report non-GAAP adjusted operating income and non-GAAP operating free cash flow.

Please refer to the quarterly report on Form 10-Q for the quarter ended March 31, 2024 for a summary of adjusting items during the trailing twelve months ended March 31, 2024 and March 31, 2023.

Adjusted Net Income Available to Common Stockholders and Diluted Adjusted EPS Available to Common Stockholders Reconciliation

The Company believes that adjusted net income available to common stockholders provides useful information about the growth or decline of the net income (loss) available to common stockholders for the relevant financial period and eliminates the financial impact of adjusting items the Company does not consider to be part of the normal operating results. Diluted adjusted EPS available to common stockholders eliminates the financial impact of adjusting items from net income (loss) available to common stockholders that the Company does not consider to be part of the normal operating results.

Adjusted net income available to common stockholders is calculated as net income (loss) available to common stockholders, excluding the effects of adjusting items that we do not consider to be part of our normal operating results, such as share-based payments expense, acquisition-related and integration costs, amortization of acquired intangible assets, executive transition costs and certain other items. Net income (loss) available to common stockholders is calculated as net income (loss) attributable to controlling interests, less cumulative dividends on Series A Senior Preferred Shares and allocated earnings to participating securities.

Diluted adjusted EPS available to common stockholders is calculated by dividing adjusted net income available to common stockholders by the weighted average number of dilutive shares outstanding, except that it is computed based upon the lower of the two-class method or the if-converted method, which includes the effects of the assumed conversion of the Series A Senior Preferred Shares and the effect of shares issuable under the Company's stock-based incentive plans, if such effect is dilutive.

The following table reconciles adjusted net income available to common stockholders and diluted adjusted EPS available to common stockholders to net income (loss) available to common stockholders and diluted EPS available to common stockholders, which are the most directly comparable GAAP measures in our consolidated financial statements:

Adjusted EBITDA

The Company believes adjusted EBITDA provides useful information about the growth or decline of its net income when compared between different financial periods. The Company uses adjusted EBITDA as a key performance measure because the Company believes it facilitates operating performance comparisons from period to period and provides management with the ability to monitor its controllable incremental revenues and costs.

Adjusted EBITDA is calculated by adding back depreciation and amortization, interest expense, income tax expense (benefit), and subtracting interest income from net income (loss), as well as adding back the adjusting items.

The following table reconciles adjusted EBITDA to net income (loss), which is the most directly comparable GAAP measure in, or calculated from, our consolidated financial statements:

Adjusted Net Debt and Adjusted Net Debt/Adjusted EBITDA Reconciliation

The Company believes that comparing adjusted net debt/adjusted EBITDA on a trailing twelve-month basis for different financial periods provides useful information about the performance of its operations as an indicator of the amount of time it would take to settle both the Company's short and long-term debt. The Company does not consider this to be a measure of its liquidity, which is its ability to settle only short-term obligations, but rather a measure of how well it funds liquidity. Measures of liquidity are noted under "Liquidity and Capital Resources" in our quarterly report on Form 10-Q for the quarter ended March 31, 2024.

Adjusted net debt is calculated by subtracting cash and cash equivalents from short and long-term debt and long-term debt in escrow. Adjusted net debt/Adjusted EBITDA is calculated by dividing adjusted net debt by adjusted EBITDA.

The following table reconciles adjusted net debt to debt, adjusted EBITDA to net income, and adjusted net debt/ adjusted EBITDA to debt/ net income, respectively, which are the most directly comparable GAAP measures in, or calculated from, our consolidated financial statements.

SOURCE RB Global

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