RB Global, Inc.

Good afternoon, ladies and gentlemen. My name is Michelle and I will be your conference operator today. At this time, I would like to welcome everyone to the Ritchie Brothers Auctioneers first quarter conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. If you would like to withdraw your question, please press star, then the number two. I would now like to turn the call over to Mr. Samir Rathod, Vice President of Investor Relations and Market Intelligence, to open the conference call. Mr. Rathod, you may begin, sir.

Thanks, and hello, and good afternoon to everyone joining on our call today to discuss our first quarter results. Joining me on the call today are Ann Sandozzi, our Chief Executive Officer, and Eric Jacobs, our Chief Financial Officer. The following discussion will include forward-looking statements which can be identified by such words as expect, believe, estimate, anticipate, plan, intend, opportunity, and similar expressions. Comments? that are not a statement of fact, including but not limited to projections of future earnings, revenue, gross transaction value, debt, and other items, business and market trends, and expectations regarding integration of IAA, including the anticipated cost synergies are considered forward-looking and involve risk and uncertainties. The risk and uncertainties that could cause actual results to differ significantly from such forward-looking statements are detailed in our news release issued this afternoon, as well as our most recent quarterly report and annual report on Form 10-K, which are available on our investor relations website on EDGAR and CEDAR. On this call, we will also discuss certain non-GAAP financial measures, including forward-looking non-GAAP financial measures. For the identification of non-GAAP financial measures and the most directly comparable GAAP financial measures and the applicable reconciliation of the two, see our news release, Form 10-K, and investor presentation posted on our website. We are unable to present quantitative reconciliation of forward-looking non-GAAP financial measures as management cannot predict all the necessary components of such measures. Investors are cautioned not to place undue reliance on forward-looking, non-GAAP financial measures. All figures discussed on today's calls are in U.S. dollars, unless otherwise indicated. Following the prepared remarks, we will open the call to questions. Now I'd like to turn the call over to Ann Penderly.

Thank you, Sameer, and good afternoon to everyone joining our call today. Our team continues to deliver great outcomes for our customers, with unwavering focus on execution. As a result, we delivered strong first quarter performance, including double-digit GTV and service revenue growth, excluding the impact of the IAA acquisition, which closed on March 20th. Our results reflect an acceleration in GTV growth late in the quarter from our Ritchie Brothers customers, particularly from strategic accounts. Over the past several quarters, We have discussed the supply chain issues facing strategic accounts, which have limited their ability to refresh and grow their fleets. Now, as supply chains have started to loosen for several categories and macroeconomic uncertainty has increased, we are beginning to see increased activity in our commercial construction and transportation sectors. Notwithstanding, asset mixed pricing continues to be a moderate headwind. Turning to IAA, the financial results were in line with our expectations and included an 8% year-over-year increase in service revenue and a pro forma full quarter basis and approximately 5% decline in GTV. The increase in service revenue for IAA was primarily driven by previously implemented buyer fee increases. The GTV decline was primarily driven by lower average selling prices in line with broader industry trends, as well as expected modestly lower unit volumes due to the previously announced loss of significant volume from one customer. Of note, we expect to cycle through the impact of this customer loss in the second quarter. Excluding the loss of volume from this customer, volumes increased 1.6%, driven by organic growth from other insurance customers. We are starting to see a slight increase in the automotive total loss ratio to approximately 19.4% from 18.2% in the same period last year, which is positively impacting volumes. Recall that the total loss ratio is the number of vehicles deemed salvage as a percentage of total accident, and it has historically been influenced by used car values. Lower used car values make it more economical to deem a car a total loss after an accident. With the IEA acquisition now closed, we are embarking on an exciting new chapter for our business. To signify this new chapter as a combined company, we are unveiling a new corporate name, RB Global. Our new corporate identity reflects our structure as a diverse portfolio of verticals under a singular umbrella and our vision for the future of our company as the premier global marketplace leader. We will continue to do business under the Ritchie Brothers and IA brands. We expect to be united as one organization under the RB global name. More broadly, integration is off to a strong start. We've already kicked off detailed planning through our integration management office and implemented our new senior leadership organization. I'm pleased with how quickly the team has come together and confident that the new organizational structure will allow us to drive accountability across the entire company. As we continue integrating IEA and Ritchie Brothers, each member of the leadership team is focused on their area of expertise. For me personally, I've been in strengthening relationships with current and prospective customers in the automotive vertical to ensure we are doing all we can to drive value for them and reinforce why RB Global is the right partner. As part of this work, we are focusing on driving the very highest levels of service to IEA customers on a more consistent basis and reduce the kind of churn that the salvage industry has experienced in the past. Jim Kessler, our President and Chief Operating Officer, has dived deep into the work streams that will drive significant value creation from this combination. Jim is focusing in our transaction and service offerings, which will ultimately drive revenue growth, and cost savings, which will meaningfully enhance the margin profile of the combined business. We are in the process of constructing tests to validate the various opportunities we highlighted during diligence, which will form the basis for prioritization and ultimate execution. As always, we will keep you informed of our learnings and progress as we move forward in the coming quarters. Our Chief Transformation and People Officer is leading the execution of IEA integration planning to drive cost synergies. In the weeks following the close of the transaction, we've already identified and implemented actions that will result in approximately $15 million in annual run rate cost synergies. Based on our progress, we continue to expect to deliver 100 to 120 million plus of annual run rate synergies by the end of 2025. Finally, I would like to highlight our focus on ESG. We have published our 2022 sustainability reports for both Ritchie Brothers and IEA. Both reports can be found under the sustainability tab of our investor relations website. With that, I will now hand the call over to our Chief Financial Officer, Eric Jacobs, to discuss our financial results for the first quarter and to provide some additional outlook and commentary.