Good morning, my name is Lisa, and I will be your conference operator today. At this time, I would like to welcome everyone to the Ritchie Bros. Auctioneers 2013 Q1 Earnings Call. [Operator Instructions] Thank you. Mr. Peter Blake, you may begin your conference.

Thanks, Lisa. Good morning, everyone. Thanks for joining us today on our 2013 Q1 Investor Conference Call. I'm joined today by Steve Simpson, our Chief Sales Officer; Bob Armstrong, our Chief Strategic Development Officer; and Rob McLeod, our CFO. Before we start, I'd like to make the Safe Harbor statement. The following discussion will include forward-looking statements as defined by SEC and Canadian rules and regulations. Comments that are not statements of fact, including projections of future earnings, revenue, gross auction proceeds and other items, such as our potential addressable market are considered forward-looking and involve risks and uncertainties. The risks and uncertainties that could cause our actual financial and operating results to differ significantly from our forward-looking statements are detailed from time to time in our SEC and Canadian securities filings, including our management's discussion and analysis of financial condition and results of operations for the period ended March 31, 2013 and subsequent quarters, which is available on the SEC, SEDAR and company websites. Actual results may differ materially from those contemplated in the forward-looking statements. We do not undertake any obligation to update the information contained on this call, which speaks only as of today's date. I'd also like to note that during today's call, we will talk about gross auction proceeds which represent the total proceeds from all items sold at our auctions and on our EquipmentOne and AssetNation marketplaces. Our definition of gross auction proceeds may differ from those used by other participants in our industry. It is not a measure of financial performance [Audio Gap] discussing adjusted net earnings which is a non-GAAP measure. We define adjusted net earnings as financial statement net earnings excluding the after tax effects of sales on excess properties and significant foreign exchange gains or losses, resulting from non-recurring financing…

Thanks, Pete, and good morning, everyone. On our last call, we told you that 2 key focus areas for us in 2013 would be the performance of our at risk business and our ability to grow our sales force. We underperformed in these areas in 2012, and we told you that we needed to improve both of these in order to deliver on our plan for 2013. Our at risk performance in Q1 was excellent, as reflected in our well above-average auction revenue rate. For the quarter, our at risk business volume represented 20% of our total, lower than it has been in recent periods and reflecting a sense of confidence from our equipment owners on the stability of the used equipment values in the current marketplace. I do not expect our at risk volume to remain at this level for the year and won't be surprised to see a trend upward, but unlikely to the levels we've seen in recent years. The quantum of at risk business is interesting but its performance is that's important, and we are extremely pleased with our performance in Q1. Our TMs have been focused on signing profitable GAP in order to grow the revenue line. To be clear, they have been aggressive on all risk business that we have pursued during the quarter, but as always, there were some type deals in which we decided to walk away. We're not chasing GAP, we're chasing profitable GAP, and our Q1 results reflected that. The second focus area we drew your attention to was the growth of our sales force. During the first 3 months of 2013, we increased the number of territory managers by a net of 14, for a total of 273 TMs in our sales force and a 13% increase year-over-year. Hiring new Territory Managers in itself does not lead directly to GAP in the quarter but it does prime the pump for the remainder of the year and even more so for the next year and the years after that. We have the sales tools and the training in place to ensure TMs are well-coached and trained to sell auction services and to enhance the productivity of our existing sales force. We added more TMs in Q1 than we did in all of 2012, reflecting the results of our forecasted effort and a lower sales force turnover. We are presently on path to achieve our full year hiring target during the first half of the year. Now over to Bob Armstrong.

Thanks, Steve, and good morning, everyone. On our last call, we were in the midst of our launch -- an initial launch phase for Ritchie Bros. EquipmentOne. At that time, we were migrating legacy asset nation buyers and sellers onto the EquipmentOne platform and working with these customers to enhance the marketplace. We successfully navigated through the initial launch, made modifications and tweaks along the way to enhance the buying and selling experience, and on April 8, we went live with the commercial launch. This marks a key step in fulfilling our vision to deliver an innovative solution to meet the needs of equipment owners whose needs aren't met by our unreserved auctions but who were nonetheless looking for a way to exchange equipment with ease and confidence. EquipmentOne makes private sales easy, fair and secure. The commercial launch was an important step and we are now in the growth and nurturing phase, attracting supply and demand to this new marketplace. $18 million in transactions moved through the EquipmentOne and AssetNation marketplaces in the first quarter, even before our commercial launch. And we're looking to grow from that point on the back of our marketing programs and new features and functionality that we released this month, such as intuitive self-serve listing tool, price reference tools, mobile device functionality and the EquipmentOne total buyer protection program. We have accomplished a lot over the nearly 12 months since we acquired AssetNation and we are very pleased with this newest solution, which we believe gives us a second growth engine and an opportunity to double our addressable market. We still expect the EquipmentOne and AssetNation marketplaces will not have a material impact on our overall financial position or results of operations for 2013. But now that we're officially launched, I look forward to updating you on future conference calls. Now over to Rob McLeod who will provide a financial overview for the quarter.

Thanks, Bob, and good morning, everyone. I hope you've all seen our press release this morning announcing our first quarter results. Our MD&A is currently being filed. We achieved gross auction proceeds of $845 million and auction revenues of $102 million for the first quarter of 2013, a decrease of 2% and an increase of 1%, respectively, compared to the same period in 2012. Included in the GAP and auction revenue numbers are $18 million in gross transaction value and $3 million under revenue for our EquipmentOne and AssetNation marketplace. Our auction revenue rate increased to 12.07% in the first quarter of 2013 from 11.71% in quarter 1 of 2012 and 11.21% for the full year of 2012, mainly due to better performance of our at risk business. Our at risk business represented approximately 20% of our gross auction proceeds in the first quarter compared to 29% for the first quarter of 2012. While we do not have a target level for our at risk business, we expect our 2013 volume to be lower than the 2012 levels. Our selling, general and admin expenses in quarter 1 increased to $71.1 million compared to quarter 1 last year of totaling $63.3 million. This increase was driven by the $4.6 million of operating expenses from the EquipmentOne and AssetNation marketplaces, and as planned, a $2.5 million increase in our sales team expenses, reflecting a 4% increase in our core business G&A. Our rolling 12-month EBITDA margin came in at 35% compared to our rolling 12-month EBITDA margin of 38% at March 31, 2012. The EBITDA margin was affected by the EquipmentOne and AssetNation marketplace operating expenses, but we still expect our EBITDA margin for the full year to be just below our 40% financial target. As for CapEx, we are on plan…

Thanks, Rob. In the quarter, we grew our core auction solutions with our first auction in China, and we added a new business solution with the launch of Ritchie Bros. EquipmentOne. Both of these initiatives have potential to become very significant parts of our business in the years to come. And while it's still early and we have lots of work to do on both, we are encouraged by the customer and the regulatory authorities' responses to both of our initiatives. With all that we have on, we remain confident we are on track to deliver and execute to achieve our 2013 guidance targets as planned. From our last call, we did receive a lot of positive feedback from most of you regarding our Q&A format. We'd like to continue it for this call, so please limit yourself to 2 questions, including any follow-up questions. And Lisa, can you open the call to questions, please?

[Operator Instructions] And your first question comes from the line of Cherilyn Radbourne from TD Securities.

See a pretty big drop in the percentage of at risk business as a proportion of GAP, and I'd just be interested in your comments as to how much of that you think is a reflection of increased control on the bids versus increase in confidence on the part of customers?

It's Steve Simpson here. I think the level of the at risk businesses is such that it's -- I think as you commented that the confidence, generally speaking, of the consignors is much better than in previous years given the confidence in the marketplace and the pricing. So we're not being requested to provide guarantees or bias as much as we were last year at this time. So and if that's going to trend going forward through the rest of the year -- I mean time will tell, but it's certainly, even at this point, in the second quarter, we are seeing similar levels of risk, so it seems to be a trend at the moment.

Okay. And then just sort of an observation about your business, you've always got to strike the right balance between adding enough sales people to support growth and not hiring so many that training them becomes too much of a distraction for your existing salespeople. So I'm just curious whether you felt like you've struck the right balance year-to-date or have you perhaps hired a bit too many too soon?

So I can take that, Cherilyn, Steve here. Yes, part of our goal is to make sure that we filled up our coffer of TMs, and I think we did a less than acceptable job at that last year, in fact, fairly flat through the year. So it's a bit of a makeup right now to add net 13 in the quarter. It doesn't stresses out too too, much, but at the same time, it does make sure that our guys are focused on recruiting and finding those people, and getting them on board, treating them as if they're a deal in themselves because those are the ones that can lever going forward. So it takes a little bit of time and energy for sure, but in the long run, it's the right thing to do.

And your next question comes from the line of Hamzah Mazari from Credit Suisse. Hamzah Mazari - Crédit Suisse AG, Research Division: The first question is just on negative mix that you highlighted with some of the older value equipment. Could you talk about how investors should think about this flushing through your system? I mean, is this going to last through 2014? Do you need OEM production to ramp up significantly for this to clear out? How should we think about this headwind going forward?

Sure, Hamzah, it's Pete here. I think if you look at the OEM production in general -- and you can look at almost any one of them and they're all very similar, you'll see a dip in mid to late '08, really down in '09 and '10 compared to prior periods of '07, '08. So we see that reflected in the population of equipment being sold. And we're seeing it even this 2012 here when we sold new and 1-year old equipment which is, by definition, in 2012, would be 2011 and '12 model year stuff. We saw an increase in the percentage of that stuff relative to the rest of our population, the GAP, and we saw a decrease in the 3 and 4-year old equipment. So as we watch this phenomena sort of work through the system, it's probably going to have, as we said in our call, a lessening effect on our trajectory of growth. It won't inhibit our growth but it will have a lessening effect on it as we work through. I suspect in '13, what you'll find is we'll see lesser 4 and 5-year old equipment in our mix than you would otherwise, and you'll see an increase in the other stuff. So I guess the best way to look at it is in our marketplace, we sell what's for sale, and we see a -- we have, and in the last couple of years seen a decline in the late model low hour stuff because there were less made. And whether you look at Komatsu or Hitachi or Paccar, CAT, whomever -- it doesn't matter -- Deere, they're all the same, that had that same void of production in those 2 model years, and we see a relatively contracted population of that equipment, and that's really what we're experiencing in the last year or so. Hamzah Mazari - Crédit Suisse AG, Research Division: That's helpful. And just the last question, on the auction revenue rate, how much of that is entirely better execution on your part versus maybe some easing of competition from brokers and dealers, and is that rate sustainable?

It's Rob -- the only Rob on today's call, in fact. And the -- yes, what we mentioned before is the confidence in the owners, in the pricing environment, and the -- and that's -- that is, we believe, we -- that will continue going forward, but it's a challenging market. And also it is a fine balance between being aggressive on those deals and walking away from them. And as Steve said, we're continuing to be aggressive on deals but we will walk away when we don't feel that the numbers are there. And so a 12.07% auction revenue rate probably isn't sustainable. If it was, we probably would have changed our guidance range of the revenue rate. That's historically, a very -- well, in fact, a record high for a quarterly revenue rate. And so the -- our performance on our at risk business is, to a large extent, within our control and at how we approach deals and how strategic those deals are, and how strategic we are in making our decision to pursue them and when to potentially walk away.

And your next question comes from Jamie Sullivan from RBC Capital Markets.

I guess just a follow-up on the risk business question. It sounds like there is the combination of walking away from deals. I guess, maybe, what's your outlook on how long competitors can continue to go after these deals at the thinner margins that don't necessarily meet your hurdles?

Jamie, it's Steve Simpson here. The appetite for people to take risks on deals, and competitors and other auction companies and dealers, I mean, from our perspective, I don't think that will ever go away. It's been here forever and it's here to stay and it's just depending on how people feel when they're looking at the stuff and what they think the market is versus what we do, and I don't anticipate any change in this. I mean, it's very competitive out there right now. We're -- very rarely are we looking at deals where customers are looking for some comfort, if you will, be it a buyer or a guarantee, that we don't have competition. And it's -- it happens all day everyday and we fully expect that will continue.

Okay. So then the -- I guess with 1Q coming in a little bit later than your expectations, you took down the GAP for the year, a touch, then should we read that as all the change in mix in the market and kind of this dynamic with the at risk business didn't have any impact on it?

No, I don't think so. I mean we're -- as we commented -- I mean, we certainly walked by some deals this quarter, a bunch of them. Watching them sell, we were pleased that we did. Once there are a couple that, in hindsight, maybe we should have taken them. Maybe we should have, what would've been a skinny deal but in the end, it might have been the right thing to do. But it's not -- it's challenging to find the perfect sweet spot to take risk and not take risk. And I mean, we made some adjustments and we continue to make them every day. We're watching the market closely everyday and watching the pricing everyday, so we're continuously affecting our level of how much we're willing to take. And does it affect the overall GAP? I mean, maybe it's a small amount but it wasn't significant.

And your next question comes from the line of Nate Brochmann from William Blair & Company. Nathan Brochmann - William Blair & Company L.L.C., Research Division: I wanted to talk a little bit back to the new TM hiring, and what the kind of normal ramp looks like for the average TM. And whether relative to history -- and I know every period is a little bit different, but relative to history, whether we're in a phase where that ramp period is somewhat normal or given some of the market dynamics, particularly with some of the lack of the newer equipment out there, whether that ramp gets a little bit extended?

This is Steve Simpson again. The New TMs and the ramping up of their ability to sign GAP for us, I mean, we typically look at a new TM that comes into the fold but in the first year, they're going to produce -- depending on the TM and how young they are and what location they're in, but that could be anywhere from $2 million to $5 million of expected GAP from those TMs. And that's within the first year and then gradually ramping up from there. So it's definitely a process. And as you commented on the marketplace being competitive, again, as I commented to one of the other fellows on the call, I mean, the market is competitive every year, and the forces that we're facing today, in some cases, maybe -- there may be some uniqueness to it, but generally it's the same year in, year out. And it's not an easy task to get these sales guys trained up because I'm here to tell you, when you're selling the unreserved auction business, it's not a walk in the park. And it's -- you really got to spend time with these folks and get them to understand what it takes to do it. And it takes time, and it's 2 to 3 years before you really get those guys up to speed.

Nate, I'll just add one comment, too, just to expand slightly on what Steve said. A big influence on that ramp up is the actual territory that that Territory Manager is going into. So if it's a Territory Manager that's replacing a salesperson that left Ritchie Bros., they're going into a territory that is already functioning and is active and has a customer base. If it's a new Territory Manager going into a new territory, we broke one off or we've changed the makeup of the territory, then it probably is a little bit longer of a ramp up time because you're truly building the territory and the customer base. Nathan Brochmann - William Blair & Company L.L.C., Research Division: Okay, that's great. And then just wanted to talk a little bit like when we start evaluating some of the end markets, and I know it's hard for you guys to say exactly what market your equipment goes into because there's so much overlap. But one of the things, Pete, that you highlighted at the start of the call is starting to see kind of the housing ramp a little bit domestically, and obviously, that's great for business. But when you look across like some of the other end markets relative to like commercial construction or obviously, mining has been down, how are you seeing those markets play out in terms of maybe balancing or offsetting some of the positive factors on the housing market? And like particularly, within mining, whether you're seeing some of the normal things that you would see when a end market is down, whether you're seeing that extra flow equipment come through the volume even though pricing might be down or whether there's anything unusual going on there?

Steve Simpson again. First, I'll touch on the mining part of the market. So we've been seeing a nice supply of those assets through our auctions. Typically, when that market is really hot, the availability of those items is not readily there. So when you start to see those things in an auction, that's an indication that that market has had a correction or softened up somewhat, though we have some more of that stuff coming up here in this quarter. The pricing levels are definitely somewhat reduced from what -- where they were. And -- but as everybody that plays in that game know, the market for that gear right now is not in demand, and there's an oversupply and the prices reflect that. As far as the general construction, the Canadian market continues to bubble along nicely. The U.S. market, we're seeing really nice signs of positive work out there for our customers, which is very encouraging. The European market is holding steady. I was just over in Bauma which is the world's largest construction show, it's on every 3 years in Germany. And I was there 2 weeks ago or 1 week ago, and a lot of positive stuff coming out of that area and the show was packed, they had the highest amount of attendees ever. And some generally positive signs coming out of the people there. Although it's not right in front of them, but they can feel it and it's in the next 12 to 24 months, things are going to come good there. So and then, as Pete said, he commented on what was going on in China there and the Australian market and the Middle East is going along at a sort of a composed pace, if you will. So I would say to you, generally, things are -- and the world economy, as we see it, is chugging along just nicely. I mean, it's nothing exuberant but it's going okay.

And your next question comes from the line of Stephen Volkmann from Jefferies. Stephen E. Volkmann - Jefferies & Company, Inc., Research Division: Just a quick one on the SG&A. Rob, you sort of broke out some of the increases there for us. And I guess, I'm curious how much of those we should expect to kind of continue through the year and how much may sort of fade as you maybe get some of these growth initiatives up and running?

Probably, the run rate, if you will, for AssetNation, EquipmentOne is probably in that range -- it was $4.6 million, $4.7 million to $5 million, probably, that would be the run rate for the quarter going forward. As the projects, as the development projects winds down, the marketing program and the launch ramps up, and that will more or less be maintained through the year. For our, the other comment I made with the uptick in our expenses related to our sales teams and our expectation is we will be, for sure, maintaining those salespeople in that capacity that we've created. And we'll, through the year, be adding a few more salespeople as well. So that's a probably pretty steady run rate. Also, remember in quarter 1, there's always some unique expenses that show up in quarter 1 that dissipate through the year. One of them being employee benefits costs, Social Security costs in particular, that ramp down through the year. And also our sales meetings that occur in quarter 1. And so you see that spike, it only happens once a year. And so if you look back in history, quarter 1, there's usually a little bit of a bump and then a fall other than growth in our team. Stephen E. Volkmann - Jefferies & Company, Inc., Research Division: Okay, good. That's helpful. And then maybe this one is for Bob. You're talking about your babies there being somewhat neutral, I guess, from a financial perspective. Does that mean they can generate enough profit to offset this increase in SG&A?

Yes, Steve. That's exactly the general plan. We're thinking that the revenue and expenses are going to be fairly similar this year. Stephen E. Volkmann - Jefferies & Company, Inc., Research Division: Great. And then maybe just a quick one on China. Is the auction on China mostly -- but I'm late in the game here. Is the auction in China mostly do you think to redistribute equipment out of China? Or going forward, do you think the Chinese really have an appetite for this type of thing? And how should we think about the cadence of future actions over there?

Yes. Steve, it's Pete. Yes, there is a void of a used equipment marketplace period in China that we're trying to establish. Much like we did in Spain when we moved into Spain in the -- right around the Olympic time, and there was a bit of a hodgepodge, of -- there was trading going on, but it was very unorganized and whatnot. I think there is an appetite, I would say for sure. But we're going about it in a very measured way. We don't want to get too far ahead of ourselves. We're encouraged for sure by the authorities and their exuberance in the response to what we were able to do and follow the rules, regulations, paperwork, all the things that were happening. So those are all good things. But we're going about it in, like I say, in our very customarily controlled manner and try not to get too far ahead of ourselves. The quality of the equipment has measurably increased over the years. And I think that some of the -- you see some of the OEM, the Chinese OEM and what they're doing in other markets around the world, and that should give you some measure of understanding about what you can expect to see in the years coming from them. But they're not without their own challenges. They've got a lot of overbuilt stuff there right now. There's a fair bit of new products that's been sitting for a while, and you can read other OEM reports and understand what's happening with that aspect. So it's just another marketplace for us, albeit, it's the largest in the world, we want be there and we're the only ones really that are there with the kind of offering that we have. So we're encouraged by all that, but it's early days, and we'll just keep plugging away and we'll update you again after the next sale.

And your next question comes from the line of Nick Coppola from Thompson Research.

I want you to share a little bit more about EquipmentOne and how it's going relative to your expectations? Is there any specific feedback that you heard from early users about what's working for them and maybe what needs to be improved?

Yes, a fair question. So first quarter, it was essentially right where we expected it to be, which was nice. But that was also expected to be a small period as we just had the initial launch. The commercial launch was about 3 weeks ago, so we're very much right now in the reacting to that phase. We've received lots of feedback from buyers and from sellers, some things they like, some things they don't like. And anybody who's been on the market place on a regular basis has seen fairly rapid evolution and change as we respond to some of the negative feedback and capitalize on some of the positive feedback. Right now, we're in the mode of driving both supply and demand, cut the marketplace there fully functioning, working very well, just need to push volumes through it, and that's a challenge with any brand new business. This is very much a startup within Ritchie Bros. And so the focus right now is working with all the customers, both new and experienced ones, to optimize the marketplace, and then drive volume through it. So I wish we had more to tell you, it's just such early days. We're like 3 weeks into the launch, so it's too soon to declare anything specific. It's probably doing exactly what you expect with any startup.

Okay, that's helpful. And my follow-up is on the at risk business, the decline to 20% at risk as a percentage of GAP. I just wanted to clarify, I guess, we talked about 2 drivers, being held -- potentially walking away from some deals and being more careful underwriting business, as well as maybe consignors becoming more confident in straight commission. That latter piece, why would consignors -- can you help me think through why consignors would be more interested in straight commission as pricing has kind of leveled out relative to the increases that we were seeing previously?

Yes. Let's just use the U.S. market as an example. And all of a sudden, it's not all of a sudden, but in the last while, you've had an increasing confidence with our client base and they're given the amount of work that they see in front of them and the opportunities to go and get work. So when you have confidence with the people you're dealing with and they're watching the sales and they're seeing the results, why would they rather take a risk position with us and pay us more commission? So from their perspective, they're watching the pricing, they know what we do, they know what we're achieving, we're getting the numbers. So if they go straight commission, they're paying us less and they're keeping more in their pocket, which is pretty damn good business in my world, from their perspective, not necessarily ours.

Your next question comes from the line of Scott Stember from Sidoti & Company. Scott L. Stember - Sidoti & Company, LLC: Just going back to the SG&A. Could you just remind us what the total increase in TMs will be for the full year? And I think you mentioned that by mid-year, you would be done with the ramp up for the most part?

Yes. Our expectation was that we would increase our TMs by at least 10%. And on our track rate that we are on right now, yes, we potentially would be filling the positions that we had in our plan for TMs by the middle of the year. Scott L. Stember - Sidoti & Company, LLC: And a follow-up question. What the total incremental spend would be for these people this year assuming that they are taking a little while to ramp up?

Yes, Scott, we generally don't get into that in granular detail on the G&A. And also every TM is going to be different depending on the geography the and the, I guess the experience, if you will, of the TM.

And your next question comes from the line of Ben Cherniavsky from Raymond James.

I'm going to apologize if you ran through this even circuitously today. But just the target, I think you said for earnings growth this year, about 15%. Is that the right? Did I hear that right? How do you get there when you're down in the first quarter, your EBITDA margin's down, you're talking about GAP, it looks kind of flat, your G&A is up. I don't understand how you're going to get to 15% earnings growth unless some of these variables change very quickly.

Hey, Ben, this is Rob. Our guidance with the GAP in the lower half, I guess, of our guidance, but also one of the main factors in there is the auction revenue rate. Last year's revenue rate was quite impacted by the at-risk performance, and so the expectation would be that our revenue rate in 2013 would be better.

Yes, but that happened and you saw that in the first quarter and your earnings were still down because your SG&A was up.

Right. And the quarter 1 being a relatively -- well, quite small -- the smallest quarter, in fact, for the whole year. And that revenue rate has such leverage on a bigger quarter or volume of GAP.

Okay. Second question, maybe more of a comment, perhaps a little bit of a tirade. But like, I'm looking at the last 5 years, your stocks done nothing, your EPS have been flat, your GAP's grown about 2% a year. I know it's been a tough market, but you guys are supposed to be out there driving more market share. You're not supposed to be so market dependent. As you said yourselves, it's largely a result of your own internal initiatives. You're still spending -- your CapEx has been high, it's down, but you're still spending 3 to 4x your maintenance CapEx levels, hiring more people, SG&A keeps going up, you spent $60 million on acquisitions last year. I think sooner or later, the rubbers got to hit the road and all these things should be translating into EPS growth and higher returns on capital. I don't sense -- I don't get a sense of urgency amongst you guys that this has to be -- that people are waiting around a long time for this, like when are you going to stick your necks out and say, come hell or high water, we're going to start getting the returns that investors expect for a company that has a stock trading the multiple you've got?

Ben, it sounds like you've been in our boardroom for the last couple of meetings. I can assure you beyond any level, that the level of urgency within the company is acute to go out and perform. We took our earnings down in 2010. And I think we talked mid-year about the fact that whether we saw 2010 as being an aberrant year and we have to do some dramatic shift in our cost structure or whether we saw that a temporary phenomenon. So '11, we saw a lift in earnings, again, in '12 albeit, for my money in 2012, it was an okay year, but not a great year. I think we're up about 12% earnings year-over-year, but on a low number. So we recognize that we put this network of sites and people and capacity in place to handle a market that contracted on us. So we looked at that, okay, well, why did it contract and is there something internally that we could and should be doing? And at the same time, we were contracting on our ability to go and spend money because we were mindful of that. We took our CapEx down from $175 million range down to $60 million, and I think Rob's comments today where we expect to see -- have that in the foreseeable future not to exceed. So our MO was to make sure that we're mindful of costs. And we think we did a very good job of controlling our costs going forward. But part of that was contracting our ability to -- or contracting our plan to expand our sales team. And I think we paid a little bit for that in 2012 with a less than robust GAP growth. And our business is about relationships. Those are very…

Is there a timeline on that, Pete?

There has to be, Ben. Yes, I mean you can't say never, never, never. But the reality is, for us, we realized our stock price has been flat over the last many periods. Lots of other companies in industrial space have been. It doesn't excuse us from not going out there and doing what we can do, because ideally, you go out there and you execute your strategy and everything comes together. Our external market forces affect us for sure, and sometimes, dramatically with the '08, '09, what happened there. So we have to be able to adjust and be nimble within the system that we have to go out and deliver on the bottom line. And if we don't, then there are consequences. And consequences, in part, are locked stock price. But the other consequences are, hey, you got to get the good people and make sure they're in the right place and go forward. So we've made some internal changes and internal structural changes about making sure that we've got sales guys focused on sales, and operations guys and the excellence focused on that. We think we've done a good job at making sure you're positioned in the right markets to go and deliver when that equipment is available for sale, and that's one thing we don't control. But largely, our successful line, the execution of our own strategy, the market is big. We're rather small relative to the whole market size. Now we've got a second solution in place that will address some of that market that might not decide they want to go to an unreserved auction. And for us, it's about going out there and making it happen. Is there a timeline? Sure. I mean, internally, we've got -- I'm not going to go into a bunch of detail with you guys, but internally, we have to go out there and execute, and we know that we need to deliver on our bottom line. And if we don't, then there's consequences at all levels within the organization for that, and we're dealing with those right now. Well, it's a great -- Ben, I just -- I would say, it's a great question, it's a big question, that's the big elephant, and we recognize that and understand them. It's a lot of almost tongue and cheek saying were you in the boardroom because I'm sure the board members that are on the call were saying, Ben, that's a great question, because we just finished talking about that.

You've heard it from me before, and you know I support what you guys are doing, but it's become a frustrating experience in a lot of ways.

Yes. No, I share your sense of acute desire to see improving bottom line results, and that's what we're committed to do.

Your next question comes from the line of Bert Powell from BMO Capital.

Pete, I want to go back to your commentary at the beginning of the call where you talked about a temporary void in the middle of your sweet spot, that there's some equipment that's got that age on it that you like. And if I think about what happened on the re-fleet in North America in the last few years, it would seem to me that there's a lot of equipment that's gone into rental houses, that have gone into OEM rental fleets, that have gone into dealer rental with purchase options, and it seems fairly significant this time in this cycle. And so I'm just wondering how addressable is that market to you going forward? And does that represent an additional headwind in terms of trying to grow GAP?

Yes. It's a great question, Bert, it's maybe akin to looking at who owns the equipment and how do they choose or want to sell it. Ultimately, everything has to be sold in a cycle. And what we have seen is in the last few years, in North America, particularly, is that the people are off cycle that were hanging onto their equipment just a little bit longer, a little bit less certainty in the market place, a little bit uncomfortable about where things are going, and it upset the sort of the, I guess, the flow of equipment that we normally see in the marketplace, and that was not just through us, that was through all different channels that we examined. So when you see that, you see people rather than going up and buying new, they might want to go and rent something and just hedge their bets a little bit. And the rental houses have done a nice job of positioning themselves, albeit, on the sort of mid to low-end -- lower-end, smaller, I'd say lower end, smaller stuff in the marketplace, then they've done a nice job at leading and making sure that they're positioning. You could see even the average age of the fleets within rental operations have aged beyond probably the area or a level that they're comfortable with, and they recognize they have to go out and deal with that . So you're seeing some people react that way. And of course, when that happens, that triggers transactions. For us, that becomes farther for us. So they can try to sell it through existing channels and we compete with that kind of activity every day. We have to outline our value proposition as a company and say, what can we do to help…

Okay. And then just on EquipmentOne, $18.7 million in, I guess, GAP for the quarter and $3 million in auction revenues. Can you -- that's all legacy EquipmentOne business, I guess, given the commercial launch. Can just give us a sense as to what that looks like year-over-year? Is that legacy business being maintained or is that atrophying?

I'd say right where it is, primarily legacy business. There's some new, but it's mostly legacy. Business was a legacy. How does it compare year-over-year? Last year, I think the grand extent of guidance that we sort of gave was that the AssetNation world was running a little over $100 million. But it was -- it ramps very differently than the Ritchie Bros. here. So we never gave any specific guidance on this. It's better than last year, but not dramatically and it's a small part of the year, so it's not really indicative.

And your next question comes from the line of Neil Forster from Scotiabank.

My first question is a 2-part question, so hopefully not cheating. I'm just trying to get a sense of how much GAP you guys walked away from through tighter bidding in Q1? And I'm not looking for a precise number. But do you think you could have grown GAP in Q1 if you would have had the same approach as you had last year? And the second part of that is, given that you're chasing more profitable GAP at this time, I would have expected merchants to be higher than they were. So I'm just wondering what your comments on that would be.

Steve Simpson here. The amount of GAP that we could have had if we were -- if we took some of those questionable deals, I guess, the quick answer is yes, there probably would have been -- our GAP number would have been a bit higher. But also, with that, our revenue would have been lower. So I don't know that's -- I think we're pleased with the path we chose for the quarter, and we're happy with how we're -- what we're doing going forward and what we see so far in the second quarter. So I don't necessarily think that -- I think your question whether there was a whole pile of business there that we've walked by, and the answer to that would be no. Because we're -- like the some of the questions, I mean, we're well aware of what we need to do to be successful. And we're out there chasing stuff all day every day. And we're pushing the envelope every day on deals to make sure we get them. And if it gets to the point where we think we're going to see brackets and there's no money to be made and it's not -- the deal is not strategic, then typically, we'll let them have it. And as I said to one of the other callers earlier, we're tracking that stuff, and in a lot of cases, it's not a result that anybody would enjoy.

And Neil, the second part of your question was, given that we were really focused on profitable GAP, not just GAP in general, while we're at the -- market is higher, we actually would say that we did extremely well on that. In fact, I think it was the highest auction revenue grid rate we've ever had in the quarter. So we would say that it wasn't as high as you would hope for.

And so it sounds like the lower year-over-year GAP is more a function of mix and it wasn't really driven by the tighter bidding and walking away from the business?

Yes. There is -- it's Pete here, Neil. I mean, thing, 20/20 hindsight is a wonderful thing; probably deals you would have walked by you wish you would have had and deals you walked by that you're happy you didn't have, and if you -- you would have taken them all, you would had a pretty odd ball result I think in the end. We were quite happy with some of the deals we didn't push over, as Steve said. But you can't handpick. You do the best you can with the information you have, and I think our focus is on growing profitable GAP and not just necessarily going out and buying GAP. I think your conclusion is right. It's more of a probably a mix impact than it would be just simply walking by some deals.

Okay, that's helpful. And then second question is just a quick one on SG&A, just a point of clarification. So it sounds like there's pushes and pulls this year. Is Q1 a good run rate to use moving forward for the full year? Or is it likely to be higher than what we saw in the quarter?

Neil, it's Rob. Any Q1 is probably a relatively good run rate because there'll be ups and downs and unique things in quarter 1, and then there's always unique things for sure in quarter 3 for sure, and then quarter 2 and quarter 4 are just bigger quarters. So you end up with more activity, which generates slightly higher incremental expenses as well.

And your next question comes from the line of Ross Gilardi from Bank of America.

Most of my questions have been answered at this point. But just bigger picture, I mean, it kind of ties into some of the prior questions. I mean, Ritchie, historically, have been able to grow earnings 15% when you were growing -- when you were growing gross auction proceeds by closer to 10%, and now you have a flat quarter, but you've got record auction revenue rates. So can you get back to growing the gross auction proceeds at a high single digit, low double-digit rate without sacrificing auction revenue rate? I imagine you could stimulate the top line very easily if you cut your auction revenue rate. But that, of course, doesn't necessarily make a lot of sense with the strategy. So how should we think about that?

The reason I want this, well, it's because we've talked about it internally so over the years. What would happen if you went around and reduced your commission rate by 1% to -- with all your customers or what would happen if you raise your commission rate by 1%. And the story that we've often discussed internally was, we're already the -- essentially the most expensive rate out there. You get what you paid for and you get a lot with Ritchie Bros. when you pay a lot for Ritchie Bros. If we reduced our rate by 1%, I don't think we'd see a lot of business coming in the door. Steve is agreeing, he's nodding head, which means, I think, yes. If we raised it, we'd probably do ourselves some pain. We think we're providing fair value and charging fair value. So I'm not -- I don't think the way to generate -- win more volume is to cut our rates. I don't think that would be a meaningful way to do it. But it's an interesting question, and we debate it internally.

Yes, I agree. I don't -- there's no need to lower our rates. I mean, they're -- I think our rates given what we provide to the customers are already very competitive given -- in comparison to what else is out there. And the at-risk stuff that we talked about, I mean, it's -- it will be interesting going through the rest of the year because if we lapse [ph] here as everybody knows, the Q2 and Q3 part of life for us was the bumpiest part of the year for us and having a clear picture of what the risk looked like and that's where we took some of our challenges and some of our deals. And all indications are right now is it feels a lot smoother rolling in through this quarter, and if we see some strength in the market and the pricing through the year, then, obviously, it will be a lot easier for us to load up and take as much risks as we need to -- through the rest of the year to finish off with a smile. So it feels good. It's early, but it's -- I think we're on the right path to deliver on what we said we're going to deliver.

And then just on the sales force issue. I mean, are you having to compete harder for sales force? I mean, the rental companies are also hiring right now, and again, a lot of business. So where are you getting people, and are you having to raise compensation levels and if you could just address that, please?

Yes, well, first, the compensation levels. I mean, we're paying what we need to pay to get the quality of the people that we're looking for. And there is different levels of that. I mean, we're out there chasing younger guys that we're going to train and we're chasing sort of second basement, if you will, and we're chasing A players. So I mean, we're looking at every individual as they come at us, and we're paying what the market requires us to pay. And as far as where we're getting them from, I mean, it's like every company, we've got all sorts of tentacles out there looking for these folks and we're -- this is actually quite refreshing this year. We're getting a lot of -- the guys we're hiring are actually coming through our regional sales managers and our TMs through referrals, which has been a nice change, and we are quite pleased with the quality and the caliber of the folks that we're getting. And now the key is just to get them on board and train them up and get them into the mix as quickly as we can and get them to perform.

Your final question comes from the line of Craig Kennison from Robert W. Baird. Craig R. Kennison - Robert W. Baird & Co. Incorporated, Research Division: Maybe I'll shift to EquipmentOne once again. I'm just curious what you view as the synergies between Ritchie Bros. and EquipmentOne, and how many people may start at EquipmentOne and then ultimately flow through to Ritchie Bros. with that equipment that's listed on EquipmentOne isn't selling.

Sure. Thanks, Craig. The synergies are pretty straightforward. We're marketing EquipmentOne to large corporate accounts to, I think, FORTUNE 500, and we're marketing it as part of the solutions set. So the synergy, it doesn't sit alone, it sits with Ritchie Bros. auctions. And we have a team, our strategic accounts team, which is out there meeting with those particular customers and offering the full solutions set, knowing that we don't have -- neither solution will get 100% share of wallet with these larger customers. And so legacy Ritchie Bros. and legacy AssetNation had partial coverage of these accounts. Together, we can provide a more comprehensive solution, and it's been extremely well received with that particular group. The second part of your question was a sort of spillover. It's early days yet. But one of the things we fully expected, if something does not sell on EquipmentOne, because it might not, we'll call it an online negotiation, it's not an auction. If something does not sell, one of the auctions that a seller has is to send it to the auction. And we've already seen a couple of assets heading in that direction. But it's early days to see whether it's going to be a landslide. I think about it now as it's captured, if you like within the Ritchie Bros. system, and we have a chance to sell it once and then a second chance, if we're not successful the first time around, and that's great service for the customer. Craig R. Kennison - Robert W. Baird & Co. Incorporated, Research Division: A second question then. I know you tweaked the compensation a little bit. Any impact on your results and how that has been received by your sales force and by customers?

Steve Simpson here again. So yes, so all of our sales force now are remunerated based on revenue generated. And it's been very well received by all the guys. We've really -- we made the whole program really simple for them to understand, how they get paid for what they do, and that was something that we did not have in the past. So the buy-in from the guys in the field has been excellent. And perhaps even that's probably have some nice effect from the revenue rate you saw in Q1 from those guys because they're recognizing when the opportunities present themselves to get the rates that they should be getting. And they're asking for it, and it's like anything if you asked for it, you'll get it, and that's what they're doing a bit more of. But very positive from the sales force and it's one we're all very pleased with the way that's going.

Okay. Thanks, everyone. Thanks, Lisa. We'll end the call here, and we look forward to talking to you guys at the end of Q2. Thanks, everyone.

This concludes today's conference call. You may now disconnect.