Ritchie Bros. Auctioneers Incorporated (NYSE:RBA) Q3 2017 Earnings Conference Call - Final Transcript

Nov 10, 2017 • 11:00 am ET

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Ritchie Bros. Auctioneers Incorporated (NYSE:RBA) Q3 2017 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

[Operator Instructions]. Your first question comes from Steven Volkmann from Jefferies. Your line is open.

Analyst
Steven Volkmann

Hi, good morning, everybody.

Executive
Ravi Saligram

Morning, Steven.

Analyst
Steven Volkmann

Ravi, it seems like you kind of touched on two major points. And I'm wondering if we can somehow disaggregate them a little bit. So, we obviously have some tightness in the end markets and so forth and I think that's fairly well documented. But then you also mentioned something, I think you called them growing pains. And I'm trying to figure out if you have a view as to how much of the kind of the top line weakness that you're seeing is attributable to the end market conditions and how much might be attributable to the growing pain portion? And then if you could just give your thoughts relative to sort of the trajectory of the growing pains, how long does it take to kind of get beyond that?

Executive
Ravi Saligram

Great question, Steve. And while it's tough to quantify, I'd say the super majority is really attributable to the supply situation. And I just wanted us to take accountability of some of the execution. And that's why I wanted to mention it. I would say in the main 80% to 85% would be the external situation and about 15% or so would be some of the growing pains. And which is why I'm very confident that over time that execution will improve, but really -- and that's why we need to focus on what we can control which is optimizing the execution.

But I would say I don't want to over blow the execution thing because it's just our -- the RB legacy folks have been used to the live auction, the IP people online. It is just a learning curve issue. There's no -- there is absolutely positively no issue or rejection the way we had it at E One long time ago. Everyone has embraced each other's models and I'm very excited. It's just a learning curve issue, which is why I say it is about 80% external -- 85% external.

Analyst
Steven Volkmann

Okay, great. Thanks. And maybe the quick follow-on for Sharon then. You give us the the October numbers which looked kind of flat year-over-year and I guess you're saying that the cost structure is fairly fixed at this point. Do you have any words of wisdom regarding kind of the fourth quarter outlook? It doesn't sound like trends are changing much for the fourth quarter.

Executive
Sharon Ruth Driscoll

Yeah. Again, the question I say that October was really affected by the Edmonton sales. So, that was a big driver of that performance. You know, I think we're still, you know, we're still on our original thoughts related to revenue, kind of outlook that we provided in last call. But again, we're, there's some positives we're seeing, certainly increased deal activity as we think certain suppliers look to be repositioning their fleets for the end of the year. And certainly our teams are very active right now.

Executive
Ravi Saligram

So, I'll add,