RB Global, Inc. (RBA) Q4 2018 Earnings Report, Transcript and Summary

Good morning, afternoon, evening. My name is Emily, and I will be your conference operator today. At this time, I would like to welcome everyone to the Ritchie Bros. Auctioneers Fourth Quarter Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] I will now turn the call over to Mr. Zaheed Mawani of Investor Relations to open the conference call. Mr. Mawani, you may begin your conference.

Thank you, Emily. Good morning, and thank you for joining us on today’s call to discuss our fourth quarter and full-year 2018 results. I'm joined this morning by Ravi Saligram, our Chief Executive Officer; and Sharon Driscoll, our Chief Financial Officer. Also with us today for the Q&A portion of the call will be other members of the leadership team. The following discussion will include forward-looking statements as defined by the SEC and Canadian rules and regulations. Comments that are not a statement of fact, including projections of future earnings, revenue, gross auction proceeds or other items, 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 in our SEC and Canadian securities filings available on the SEC and SEDAR websites, as well as our Investor Relations website at investor.ritchiebros.com. Our definition of gross transaction value may differ from those used by other participants in our industry. It's not a measure of financial performance, liquidity or revenue and is not presented in our statement of operations. Our fourth quarter and full-year results were made available yesterday evening after market close. We encourage you to review our earnings release and Form 10-K, which includes our MD&A and financial statements, which are available on our website, as well as EDGAR and SEDAR. On this call, we will discuss certain non-GAAP financial measures. For the identification of non-GAAP financial measures to the most directly comparable GAAP financial measure and a reconciliation between the two, see our earnings release and Form 10-K. Presentation slides accompany our commentary today. These slides can be viewed through the live or recorded webcast or downloaded from our website. All figures discussed on today's call are in U.S. dollars unless otherwise indicated. I'll now turn the call over to Ravi Saligram, our Chief Executive officer. Ravi?

Thank you. Zaheed. Good morning, everybody, and thank you for joining our fourth quarter earnings call. We had a great year in 2018 and strengthened the Company in more ways than quarterly financials reflect. Technology is truly becoming a competitive advantage. We are systematically addressing legacy systems. We are a digital leader in our industry. Our operational policy is noteworthy. We are driving efficiencies with scale, and our data analytic capabilities are accelerating. We have strengthened our core competence of connecting buyers and sellers in multiple channels across multiple geographies and multiple sectors. Let me illustrate, with a day in the life of Ritchie Bros. Take Thursday, December 6th, this was an exciting day. I'm not saying everyday goes this way. But this is indicator of the new Ritchie Bros. On our websites, 295,000 unique users or visitors visited various RB properties around the globe. Many of these users were new users based on Google analytics. These users generated 390,000 sessions. Of these sessions, 54% of them were on mobile devices, 43% are regenerated outside the Mascus, 48% were between the ages of 25 and 54 of prime demographic. The new Ritchie Bros. is not just one father's company. It is also a son’s company and a grandsons company and a granddaughters company. The tradition of multigenerational customers working with Ritchie Bros. is alive and well as we remain passionately committed to deep and enduring personal relationships. At Ritchie Bros. everyday is a new day. Our mantra is move those growth. Take us pass through say February 26, 2019. The number of users jumped to 345,000 and positioned us to 445,000. These are impressive figures and while not everyday maybe like these, the examples bring to life, the power of the platform in domain we are growing our base. Since I mentioned December 6, let me talk about the week of December 9, 2018. In just that week alone, we sold 1,281 trucks across both our RB and TruckPlanet platforms for a total of $30 million shattering our previously key record on December 6, 2015, when we sold 875 trucks for $25 million. In fact, transportation, which has Class A trucks, trailers, but excluding vocational trucks, drove GTV of over $860 million in 2018. If you add vocational in that is well past 1 billion. We are no longer just a yellow iron company, we're much more. While construction remains our core with 57% of GTV in 2018, transportation is 17% and agriculture is 9%. In 2018, 59% of our GTV was online, which includes the portion of online associated with the live auction, essentially across all our channels, 59% online. At the end of 2018, we had over 1 million followers on Facebook, Instagram, Twitter, and LinkedIn, up 26% versus 2017. We had on average of 5 million users per month visiting our websites and generated 580 million page views in all of 2018, which is why we drove 8.5 million bids in 2018 across all our channels, up 16% versus 2017. You can see, we are clearly generating network effect and are more than an auction company much more. Let me turn it over to Sharon, who will go through the fourth quarter results, I’ll return to discuss 2018 and our outlook for 2019.

Thank you, Ravi, and good morning, everyone. Looking at our fourth quarter performance, GTV was up 3%, while we aspire for more, we view this as a positive outcome and are pleased with our ability to navigate tough market conditions as equipment availability continued to be tight in the quarter. From a channel perspective, GTV growth was led by another quarter of strong online performance with double-digit growth in our weekly featured auction. Our live industrial auctions grew at low-single digits, albeit with 15% fewer selling days and 23 fewer industrial auctions year-on-year. Live auction comps continue to deliver well with 70% of our live auctions posting year-on-year positive comps in the quarter. Regionally, Canada led the way with strong double-digit GTV growth with both the western and eastern regions performing well and a notable impressive performance by our agriculture business posting 43% GTV growth. Our International GTV grew mid-single digits led by good performances in the Middle East, Australia and Europe. Our U.S. region delivered another outstanding online quarter, but was slightly down overall. Despite the strong online performance, the U.S. continued to disproportionately feel the effects of the equipment supply shortages as well as cycling a major non-recurring Kruse auctions events from the fourth quarter of 2017. To recap some auction highlights in the quarter. In the U.S., our Fort Worth auction sold $60 million of equipment and delivered 19% year-over-year growth. Our Houston auction posted 11% growth and set site records for bidders and [indiscernible], and our Chehalis Washington auction posted 27 million in GTV and 25% year-over-year growth. Our Canadian team posted strong results in both Edmonton auctions for combined growth of 19% over last year. Our Toronto site continued their record breaking streak in the fourth quarter, selling $29 million, a 36% increase over 2017. Internationally, our Moerdijk Netherlands auction drove $48 million of GTV and posted a massive 69% growth over the previous year, posting their largest sale in 10 years. And finally, our Dubai site held at $37 million auction and posted 47% growth over last year's December sale. Moving on to revenue and agency proceeds. Our revenue and agency proceeds were up 22% and 8% respectively, driven by higher revenue from inventory sales in U.S. and Europe, as well as higher fee revenues and growth in our other services, led by Ritchie Bros. Financial Services. Our agency proceeds growth of 8% is driven by the partial buyer fee harmonization offset by some weaker guaranteed contract performance, particularly in the U.S. which I will discuss in more detail shortly. Our adjusted operating income improved 33% led by improved leverage from strong expense management coupled with lower acquisition related costs in the quarter and a small increase in property gains from the sale of two closed site location. Adjusted earnings per share growth grew 23% for the quarter due to strong operating income performance offset by slight increase in interest costs and an increase in the quarterly effective income tax rate to just over 25% bringing our full-year tax effective rate to 20.3%. The increase in the quarter tax rate is due to a greater proportion of our earnings being taxed in jurisdictions with higher tax rates. Also in the quarter, the U.S. tax regulations were clarified resulting in a minor true-up of the tax rate provision impacted by these new rules. As we continue to grow earnings in the U.S. and Canada and with the dynamic changes to international tax regulations, we believe it is appropriate to model our effective tax rate for 2019 which we expect to be in the range of 26% to 28%. Turning to our fourth quarter Auctions and Marketplaces segment agency proceeds. Agency proceeds were up 8% in the quarter, driven by continued online GTV growth with favorable impact of the partial fee harmonization and year-over-year price strength. One notable offset to these agency proceeds growth drivers with softness experience in some of our guaranteed contracts in the U.S. While we have significant experience in pricing at risk and inventory deals, inherently, there is always some level of uncertainties when item ultimately sells at auction. In December, we saw forward pricing environment on certain categories such as scrapers and motor graders at a small number of auction events. This insurance drove some price softness resulting in certain deals selling at the lower ranges of our guaranteed pricing A&M agency proceeds rate improved 80 basis points over last year to 13.4%. This year-over-year rate improvement was driven by the strong year-over-year pricing environment and the favorable impact of the partial fee harmonization. Sequentially, however, we did see the agency proceeds rate declined roughly 50 basis points from 13.9% in Q3 of 2018. In the quarter, we did see an increase in the volume of at risk deal sold and increased to 21% of GTV up from 17% of GTV in Q4 2017, and also up from our 2018 full-year rate of 17%. As the market continues to be extremely competitive for supply, our sales teams have been aggressive to secure volume and with increasing uncertainty in the economic outlook, we did experience some lower rates on at risk deal performance in the quarter. Although supply maybe loosening, it still remains competitive for quality gear and packages and we may continue to see some downward pressure on at risk rates relative to our positive rate experience during most of 2018. We maintain our Auctions and Marketplaces agency proceeds rate range of 12.25% to 13.25%. Turning now to our other services category. Our Ritchie Bros. Financial Services business continues to deliver double-digit growth with revenues in the quarter, solidly up 50% to $7 million. Our financial services program continues to have a robust growth outlook. We see several pathways to grow, including increasing our live auction penetration, a significant opportunity to grow our IronPlanet financing programs, and lastly, building on early success of our follow the customer initiatives. Mascus has also generated revenue growth in the quarter of 3% to $3.1 million as it cycled over strong Q4 2017 performance and ended the full-year with 21% revenue growth over 2017. Moving on to expenses, cost of services an SG&A expenses combined increased 7%. Cost of services increased 18% to $46 million with the majority of the increase related to the repair and haulage cost associated with the increase in ancillary revenues associated with our at risk contracts primarily in our European region. In addition, we did incur an increase in our direct expenses related to our GovPlanet operations to support the new government surplus contract, which was partially offset by a reduction in live event costs due to fewer live events conducted in the quarter. Removing the portion of cost of services included in agency proceeds calculation. The year on year growth is 4% or half the rate of the agency proceeds growth. Our SG&A was very well controlled in the quarter with an increase of 3% driven by continued investments to upper rationalize our GovPlanet surplus stock contracts and higher incentive compensation offset by lower share unit expenses and lower travel and entertainment expenditures. Overall, we continue to make good progress with our comp cost management initiatives and are encouraged by another sequential quarter of SG&A leverage as our agency proceeds growth nicely outpaced our SG&A expense growth. This is particularly positive as we are finding ways to drive our expense discipline mandate in the company without compromising our investments in our growth businesses such as GovPlanet RBFS and RB Asset Solutions. On a rate basis SG&A was 50% of total agency proceeds down roughly 200 basis points from the fourth quarter of last year. This rate performance came in slightly better than expected. As you recall last quarter, we provided the expected range of great improvement for Q4 to be between 50 basis points to 150 basis points. Looking ahead we will continue to stay focused on our cost management and we expect continued improvement with slight incremental SG&A leverage in Q1 over last year's Q1 performance. Turning to our balance sheet and liquidity metrics, we are very pleased with our strong balance sheet position and cash flow generation in the year. Our operating free cash flow of $112 million is exceptionally strong when you consider the CapEx investments in the year to support integration activities and the development of MARS and the investment of $75 million in inventory to support future revenues in our international U.S. and government business units. A small portion of this inventory is considered permanent resulting from the startup of operations to support the new government surplus contract. Most of the inventory increased, however is related to our normal deal activity which will flow into auctions during the first half of 2019. Our debt reduction as well ahead of schedule with an additional voluntary repayment of $30 million in Q4, taking total voluntary repayments in the year to $80 million and total debt reduction of $102 million in 2018. We ended the year with an adjusted net debt to adjusted EBITDA ratio of 1.9x down from 2.9x last year and well within our Evergreen Model target of below 2.5x. The credit rating agencies have noticed and they've responded with reason upgrades. In the second quarter of 2018 we also modestly increased our dividend and for the full-year return $76 million those to shareholders. We continue to prioritize having a strong balance sheet to ensure the company has significant financial flexibility and capacity to fund our growth. Remain well positioned for any market condition changes and to see CRI value opportunities to increase the long-term shareholder value. Our financial focus for 2019 we'll be on operating leverage, cash flow management, prudent capital allocation and managing changes resulting from the revenue recognition accounting standards. We feel good about the progress we are making and driving productivity and SG&A leverage. In 2019 we will remain very focused on driving efficiencies into our operating model and increasing our flow through and margin expansion by maintaining cost growth lower than agency proceeds growth. Ritchie Bros.’ is a business with a strong cash generation profile. And in 2019 we will continue to be focused on operating free cash flow growth to improved earnings and working capital efficiency. A few areas will be prioritizing are the optimization and efficient management of our GovPlanet inventory levels, supporting our international growth with sound management over equipment inventory purchases and total atlas deal management across the company. Turning to our capital allocation, we reiterate our previously stated allocation priorities and we'll be prioritizing continued debt reduction and maintaining our leverage ratio below 2x. From a capital expenditure standpoint we will continue to invest in technology and back office efficiency projects with our normal maintenance capital program for our large sites in place. We remain committed to our dividends and we'll look to return cash to our shareholders through ongoing dividends within a payout ratio of 55% to 60%. And once our leverage ratio is well below our stated target, we will have the balance sheet strength and flexibility to consider other strategic options such as shared buybacks and acquisition. Finally, as you know, he adopted the new revenue recognition accounting standard in the first quarter of 2018. As part of that change, we introduced agency proceeds as a supplemental non-GAAP measure as we felt this would be helpful to investors to understand that sometimes volatile nature of our revenues, given that a portion of revenues derived from inventory as opposed to consignments can fluctuate considerably. Based on letters and discussions with the Securities and Exchange Commission, we have been unsuccessful in convincing the SEC that this measure isn't helpful supplemental measure and as such they are affirming their stamps with this measure could be misconstrued as a substitute for revenue and we have been informed that we must get discontinue the use of agency proceeds in our MD&A and investor materials beginning in Q1 of 2019. As such, we will continue to improve our disclosures to assist the users of our statements to understand the volatility that the mix of contracts now place in our revenue. You will see new charts in our 10-K that identify new metrics such as revenue from inventory sales as a percentage of GTV and as a percentage of revenue. Also cost of goods sold as a percentage of total operating expenses. These measures will form the basis of our discussions related to revenue and operating costs in future filings. We are working through the impact of this decision on our Evergreen Model metrics, but must emphasize, it is strictly a change in revenue presentation and this does not change how we fundamentally operate or manage the business. We are working through the change and expect to keep you apprised on this issue as we progressed through it. To close out the quarter discussion, I would like to thank all Ritchie Bros. employees for their dedication and significant efforts to deliver a successful quarter and a strong year. I am very excited about the long-term prospects and growth opportunity ahead of us. With that, I'll turn it over to you, Ravi to discuss the full-year of 2018 in the future ahead.

Thank you, Sharon. Just to remind that we purchased IronPlanet in June, 2017 and our reported data includes only seven months of IP in 2017. When I compared 2018 to 2017, I'll provide like-for-like comparisons where possible. I'd like to now spend some time sharing some deeper insights on the full-year of 2018 as we felt it was a year of tremendous progress, and one that we accelerated our strategy on many fronts. From a financial perspective, it was an excellent year for Ritchie Bros. We delivered record GTV touching $5 billion, accelerated our topline agency proceeds up 19% on a reported basis and roughly up 11% on a like-for-like basis versus the prior year. Importantly, we worked hard to drive synergies and control SG&A costs through leverage. Specifically in the second half of 2018 agency proceeds were up 10% on a like-for-like basis, while SG&A growth was up only 3%, which allowed us to deliver a 33% increase in adjusted EPS, all while navigating to one of the toughest equipment supply environments we’ve seen. Let me touch on our key growth drivers in 2018. I'm pleased to say we grew both live and online channels on the unprecedented equipment supply challenges. Our IP weekly auction momentum was galvanized by a [indiscernible] store in the second quarter that acted as a catalyst or deliver consecutive double-digit growth over the last few quarters. And B has become an attractive complement to the live auctions specifically in Canada and international. But the Park, I'm extremely pleased about is that the combined Ritchie Bros. and IronPlanet company. Online pure-play volume in 2018 significantly exceeded the pure-play online volume generated by our tenant in its peak year of 2016 as a standalone company excluding that auction services includes live auctions. Our go-to-market execution, selling multichannel is improving and we're building momentum with online both operationally and culturally, and I would expect to carry that strength into 2019. Our Ritchie Bros. Financial Services team went from strength to strength each quarter delivering 44% total revenue growth in 2018 and as of the fourth quarter 27 consecutive quarters of double-digit growth. And finally, Ritchie Bros. Financial Services achieved close to 19% penetration of addressable GTV up 390 basis points versus prior year. Our aspirational long-term opportunity would be to get penetration up 25% or higher. With new customer acquisition being hurdle for us as a growth driver, our strategic accounts group really stepped up and drove new customer acquisition growth and impressive double-digit GTV growth in each of the last three quarters. Strategic accounts team acquired 181 new accounts in 2018 regenerated roughly a $100 million in GTV. Canada returned to strong growth levels as that team aggressively focused on new business, including selling, agricultural, real estate, utilizing Marketplace-E. International is steadily gaining traction from mega inventory deals leveraging the catalogs and jumping Marketplace-E. International alone delivered $100 million in pure-play online GTV. Excellent results for a first year starter. These are all fantastic growth and market penetration accomplishments, but I'd be remiss if I didn't comment on the strength of our catalogs. The partnership is driving value as evidenced by incremental cap volume growth in 2018 especially in international, and the relationship being a key catalyst for repositioning our Japan business. You'll recall the total lines were poised to close down the site and now it's been reinvigorated and the retail delivered the strongest GTV year in its history. Last year, I laid out four key strategic objectives for our teams. First, grow our auction business. Second, penetrate the upstream non-auction segment. Third, delivering magical customer experiences, and fourth, achieve operational efficiencies. We made major strides against these priorities in 2018, driving auction growth stocks for driving GTV for both live and IPVT and optimizing our model for both events as a regular flow of business. Our live industrial auctions while growing modestly did sell with greater than 65% of auctions delivering year-on-year comp growth and notably with fewer auctions and overall fewer selling days. Marketplace-E is targeted and giving the customer who transacts privately control over the disposition price with three reserve type formats. RB Asset Solutions is driving strategic partnerships at the retail level of upstreams with large OEM dealers, OEMs and major national global accounts by offering inventory management systems, data analytic and pricing tools, inspection apps, workshops, notices, et cetera. In 2018, we achieved a mix of 83% live auctions and 17% online on GTV. Longer time, our aim is to deliver a 75%, 25% mix. We made good progress on both improving the customer experience and driving operational efficiencies. In fact, in many cases the same initiatives such as MARS allowed us to achieve both goals. MARS would replace RB’s legacy note site-by-site auction operation system with a cloud-based common IronPlanet technology platform. Modules have been sequentially introduced with great success. We introduced the registration module in Orlando, which reduced customer wait times and our MARS title module has reduced handling titles from two days to just two minutes. Well maybe a few more minutes on that. Our mobile app is going from strength to strength. In fourth quarter 2018 over 10% of online GTV was driven through the mobile app. We relaunched Ritchie Specs, adding 4,000 new specs, Ritchie Specs where equipment specs are provided was widely used by customers and reinforces the perception of Ritchie Bros. as a top leader. We also now have both IP in Mascus and Oracle. Last but not least, we created a data like merging IP and RB customer data, which would be very useful and cross-selling and driving new business. Turning now to our Evergreen Model update. As a reminder, we created our Evergreen Model in 2015 to reflect our expectation of how we believe our business with grow on an average annual basis over a five-year to seven-year horizon. On this basis in 2015 and 2016 as a standalone company which achieve all our targets with the exception of GTV. In 2017, we have a challenge and delivering most of the metrics except for three since it was above the constitution yet post IP acquisition and we severely impacted by the supply shortage. In 2018 through stronger operational executional performance, we've met the majority of our Evergreen Model metrics. Notably the ROIC and adjusted EBITDA targets have finite that human dates in the future, but both metric should good progress with ROIC improving year-over-year and adjusted EBITDA rate expansion to 35.3% for 2018. We continue to be committed and focused on achieving the 40% EBITDA target by 2019 on our run rate basis. Our Evergreen Model substance a playbook for driving shareholder value. In 2018, we delivered 11.6% total shareholder return significantly hard than the SMP 500, Mid-Cap 400 and Russell 2000. On a three-year period, our TSR was 32% which compares favorably to the same industries. Ultimately, the most attractive component of our model is that we are a cash generating in June. In the last five years, we achieved that cumulative operating free cash flow of $675 million and return nearly two-thirds of this to shareholders and nearly in the form of dividends and some share buybacks. In 2018, newly combined teams came together and delivered a record breaking Orlando Auction. I'm sorry that was in 2018. In 2019, our team execute it to build and showcase the largest selection of inventory ever feeding up every square inch of 228 acre site. It was – historically because we delivered another record breaking Orlando auction in February, 2019, the $297 million in GTV up 7% versus the last year. And I'm pleased to say that we delivered fantastic results with that any safety instead, safety is of the up most important to us and making sure our team members are safe as a priority for all of us. And it's number one priority. We had approximately 10% more centers in last year with total registrants up 19% and online registration up 31% and probably many registrants came through our GovPlanet registered user base. There's another who find that on network effect is definitely having an impact. We experienced strong pricing on late model, low our construction equipment, but software pricing on older equipment with higher usage in hours. Orlando was the major success, but we need to be careful not to extrapolate Orlando’s results through the quarter are the year as Orlando's or one of [indiscernible]. We're all to please the February auction and Dublin, California, Houston and Edmonton and mostly UK of all growth versus prior year. Moving now through some considerations for H1 of 2019. As you know, we do not provide guidance since it's extremely difficult to forecast this business and especially on a quarterly basis. However, we're offering the following insights for your consideration as you model the first quarter 2019. First for payments, the higher levels of supply, we've been able to source and showcase that our auctions early in 2019 we're encouraging indications by the overall supplier environment is starting through is not. Our things that end user product still remain healthy, but not as robust as in 2018. OEM production levels appeared to be catching up the pending orders allowing dealers and equipment owners and life to begin getting older equipment and upgrading to New Orleans. No hour but used auction. No, this is not a case for all asset classes, lead times are still long it certain categories. The demand and supply harmonization combined with the possibility of the slowdown in economic demand with several global economies already showing signs of contraction, all point of signs we should stop to see loosing that supply. We will also look to capitalize on various North American projects that are currently bottleneck. End users have been carrying feats in anticipation and various infrastructure projects that have not moved forward and the cost to carry non-working inventory could create opportunity as they look to sell off equipment. At the same time as your pipeline projects get completed, there could be significantly lesser times to OEMs and dealers, which eventually we hopefully find its way to online channels. Next the headwinds, with the supply landscape looking as though the starting to loosen and we are seeing a gradual moderation in the rate of price performance growth in construction. However, we're looking at transportation and over-the-road trucks, pricing is still holding strong. One category that pricing is actually soft as material handling as rental companies return highly used, high hour [indiscernible] et cetera. We're carefully monitoring the evolution of pricing trends and taking them into account as we price under I can deals. It is to be expected that some deals could be impacted as the market in flex. We saw some of this in the U.S. in the fourth quarter and even in our landlord recently. We will be agile in our pricing and pivot as needed. There are a few other considerations, which we feel are important for investors to understand. For us in terms of Q1 auction calm, our Grande Prairie site, we'll have one less auction this year as the Q1 auction last year we generated $37 million in GTV won’t come in Q1 of 2019. Second to reiterate Sharon’s comments, we will have a higher effective tax rate due to continue changes in tax legislation and the first quarter we'll have a fewer number of selling base versus prior year. But 2019 we are five executional priorities. The first is to relentlessly drive multichannel new customer acquisition through stronger executional cadence and operational rhythms with our sales organization to drive new business through buyer conversion, win backs and new customer acquisition. Second is to drive upstream through aggressively scaling Marketplace-E by enhancing the differentiating value proposition, driving yield and kill rate improvements and enhancing our service initiatives. Third, is to grow our government business as we utilize all channels including live and bring the full force of Ritchie Bros. resources and marketing muscle to scale the business. We're also highly focused on managing inventories and rapidly increasing throughput and sell through. Fourth is to secure a key set of reference accounts for RB Asset Solutions. We were focused on quality over quantity and we'll look forward to onboarding 10 15 core strategic clients and build a solid foundation in exceptional customer experiences. And finally to pursue efficient operations and strengthen our sales support functions, continue to implement our MARS platform and drive value added improvements for our customers in our back office functions. These priorities would be driven into context or keeping SG&A under control. We're committed to keeping SG&A growth significantly lower than agency proceeds growth. But we will continue to make investment and high growth businesses such as GovPlanet. I'll be acid to you, shins and Ritchie Bros. financial services. Aspirationally, we continue to target internally to get to SG&A growth to half the rate of agency proceeds growths on a full-year basis, not on a quarterly but on a full-year basis. In conclusion, 2018 was an excellent year. We're advancing our strategy. We have strengthened core business and build the foundation for new growth in 2019 and beyond. Our reach scale in innovative product portfolio purposes in a great position to bird on business model that is substantially and durably differentiated from our competitors. We are entering 2019 with some win in our back with acceleration and improved performance against our financial objectives, a very strong balance sheet and the right foundation for multi-year goal. If you look at Ritchie Bros going into 2019, it is very different company than it was just two years ago. We have shifted the paradigm from being the world's largest unreserved live auction company, which we are still very proud off, the one that is uniquely diversified with multiple ways to win, multiple ways to sell and grow our customer base and a solid foundation for shareholder value creation. I thank our teams for a strong 2018 and we are enthusiastic about 2019. With that, we are ready to take questions. Operator, please open the line for questions.

[Operator Instructions] And our first question comes from the line of Michael Doumet from Scotiabank. Your line is open.

Hey. Good morning, guys.

Michael, good morning.

Hi, good morning. The A&M agency proceeds rate was down in the quarter. And you provided some comments there, but still much higher than last year's levels. Could you provide some insights on how we should think about that in the next several quarters? Your rate guidance is still unchanged, but were still above the upper range. So excluding the fee harmonization, is there a reason why we shouldn't normalize over time?

Yes, Michael. So the reason we're reiterating the range is as we grow certain areas of account growth, whether it be strategic accounts, international region, opening up agriculture, and with what we see is kind of the potential increasing risk on the pricing side for at risk deals. We're feeling that that range is still appropriate for you to use to model. We have been above that range as you've noticed, and we will not have an increase next year as a result of additional fee harmonization. So that was a one-time thing, even though it carries on permanently. But we believe that is the right range that we see inside of 2019.

So let me add to what Sharon said, Michael. First, I think you started by saying agency proceeds was down, so not sure maybe I misheard you. So because the agency proceeds on a like-for-like basis was up 8%, maybe the rate of growth, that's what you were talking about versus previous quarters, which was double-digits, like 10% or so. And look you have quarterly variation, which we say in this business. And to me probably the key driver of why it came off of that really had to do few things with principally I think that we had some inflection on our at risk deals and that had some effect. And look, I have absolutely no major concerns because underwritten business and I think many of you have been sort of critical while thinking we have not pursued at risk deals only to drive ratings whereas we've always said we want to balance underwritten rate and volume. And last year in a tough supplier environment where there's a lot of competition, we were aggressive about going after deals. Now when the market influx sometimes on certain categories or in certain geographies, you will have underwritten results, which you might not have expected, but that's the nature of it. In domain, as I've always maintained over the last 10 years since we are seeing the record, overall on underwritten, they've always been profitable, but there'll be a few contracts, you will not do well or you may lose money. And I'm fine with that because that's what we want to drive and that's our competitive advantage. So I think in domain, now the last thing I'd say is while we don't have a buyer fee next year, I think our supply lose in south, we're going to go back to – I think gradually over the course of the year, volumes picking up and we'll still – I think we're very good at managing at risk. So now we'll go to being a little bit more, hey, as the market influx a bit more careful in that regard.

That’s a great comment. I appreciate it. Thank you. And maybe just squeeze in an unrelated follow-up, just on the working capital. That was a cash outflow in 2018. That's I think the first I've seen in a number of years. And you mentioned GovPlanet’s impact there. So the question is, should we think of that as a one-time impact or is there a structural shift there with working capital if inventories may need to rise as a result of GovPlanet?

Yes. So we did see inventory rise, it increased $75 million year-on-year. The vast majority of that increase was actual normal deal volume, and not related to GovPlanet. There is a minor amount of GovPlanet that is permanent, and perhaps small amount in excess of what that permanent amount is. We've not detailed out the inventory components related to each of those sub businesses. But it's really – I would view it as more of a minor add to ongoing permanent inventory levels. We should be able to see most of that additional increase sell through within the first half of the year.

So I'll just add something on GovPlanet specifically Michael. One housekeeping note, that we won the award at the end of 2017, but it actually the formal award process took to about midyear or just a little bit before that. And the [indiscernible] stopped sending it to their previous supplier, so they had a massive amount of inventory that had build up, but as soon as the contract were operationalized, they kind of flooded to ask us a lot. And we have to because of the totally new business, we had to put up warehouses, build a whole team, et cetera, cope with this, and clearly it's a different dynamic, but I'm very proud that the team has taken this on. And what we're doing is actually building an amazing new buyer base for Gov. And that buyer base as we commented, even helped us in Orlando, actually GovPlanet now is attracting more users than RB and IP, which is quite incredible, and that spills volumes for later on in terms of acceleration of network effects. As Sharon pointed out, most of the – are a significant part of the inventory was normal stuff that we do. It's just the international. We're chasing some mega deals and we're actually very, very feel good that we're accelerating our international growth and it's becoming the powerful growth engine.

That’s helpful. Those are my questions. Thanks.

Our next question comes from the line of Derek Spronck from RBC. Your line is open.

Okay. Thank you for taking my questions. Just to start offset second quarter now where we blocked IronPlanet. For 2019, how should we think about GTV growth? Should we be thinking of it? It kind of in the low single-digit range. And then as the equipment supply, if that loosens up. For 2018, I believe you had a 3% reduction in lots that’s offset by a 6% increase in GTV per lot. If that changes where lots go up, but the GTV per lot goes down. Are you agnostic from a margin perspective on whether you're getting more lots, but less pricing or vice versa, less lots and better pricing.

Okay. Let me pass through that because there’s a lot of things from that. I think first as you know, we don't provide specific guidance on specific metrics. So I'd still refer you back to our Evergreen Model where we talk about high single-digit agency proceeds groves to low teens. So that's kind of the range. And that's again on average over five-year to seven-year period. And so to me, the strength of this management team is to pivot depending on market environment. So in 2018, the fact that we got through 10% or so is because of [indiscernible]. And next year volume – will we think volume will be a lot better and so better than the GTV that we have this year. But I can't tell you exactly how much, it'll be gradual every quarter I think it will stop increasing as supply loosens up. But we're pretty confident that we should drive that agency proceeds growth and that's what we're focused on. And in terms of your – the rest of your questions on I think use pay price, but lot went up, but number of lots went down. It's very tough. It's not like we tried to choose it. It all depends on what consignors want to give us. And clearly our sweet spot as three-year to five-year, equipment – heavy equipment, but a lot of times if there's a full to special, they give you a small lots, but for small lots you have higher buyer's speed. So you have to look at this as an overall portfolio. And our job is to take all of that and keep driving consistently topline growth and were quite committed to doing that.

Okay. Thank you. And just maybe just moving on to the strategic accounts, are there any big strategic accounts that that you feel is – out there that could provide for a potential opportunity going forward?

Yes. I think in my prepared remarks, we said we had already captured 181 in the U.S. and that's just the U.S. You've got strategic account in Canada as well as in Europe are also making good progress. Just as U.S. alone that team has identified outside of the running, I mean are in addition to the 181 that you universe was about 800, they'd captured about 181. So there's still 600 or so accounts that are on Radar and Target strategic accounts do take some time. You don't immediately sort of go in and get the thing. You have to build that relationship. But once you get it and you perform and do a great job for them. It is a great predictable annuity driven kind of business. Now sometimes they're low rate than end user business, but it provides a very good systematic, predictable flow. So our teams are very, very focused on getting continued to drive new acquisition, customer acquisition, the strategic accounts, but also on the end user side.

Some of your new initiative there be asked management, is that helping a sell your services to these strategic accounts and how are you leveraging that?

Yes. And that’s a great question. I would actually have Marathi, who is the guru of RB Assets Solutions to have a quick word on that.

Could you repeat the question?

Just how are you leveraging?

Go ahead Zaheed.

The way we're leveraging RB Asset Solutions for the strategic accounts is, we have many sellers who are looking for essentially, better data, better tools to help them manage the disposition process. So sellers are looking at their entire portfolio of assets and trying to decide, what is the best possible way to dispose of them to kind of maximize their profitability. And so by us being able to come to them with our data and with our software and essentially partner with them to give them the tools necessary to help them in that process. So whether it's selling on their own, whether it's selling through one of our channels, whether it's selling through their to their dealers privately, we offer a set of tools and data that that basically helps them manage the process and allows us to be better partners with them.

Are you offering that?

As directly after there's a number of other callers on the line. I apologize.

Fair enough. Thank you.

Our next question comes from the line of John Healy from Northcoast Research. Your line is open.

Thank you. Ravi and Sharon I wanted to ask a little bit about expenses in 2019. I know that's been a focus area for you guys and in the slide deck, you guys talk about growing SG&A at a lower rate then agency proceeds. I was just hoping to get more color in terms of those two metrics may trend in 2019 and maybe on the low side and then the high side, how that might shake out from the standpoint of what sort of topline, or volume numbers do you need to get to grow over at the SG&A increase. And at what point does it really select where, maybe the growth rate versus the SG&A level is, maybe more like two to one or something like that.

Yes. So I'll start and then Ravi can wrap that some additional color, but, certainly, we've learned a lot this year in terms of how to drive synergy through the technology that the IronPlanet now provide to us as well as simplifying the integration aspect. So a lot of the synergy action that was taken inside of 2018 has really yet to show up in terms of added value to providing that scale, so that as topline grows. We will not have to invest as much in costs, particularly in SG&A to support that growth. So MARS is an example of that. The Oracle integration and the finance team is also an example of that. So that's why we’re confident that we can keep SG&A growth significantly below agency proceeds growth for the year. And certainly there is an element of SG&A that is fixed. So as that revenue and volume starts to pump through that certainly will aid with the leverage. And I think we've recorded kind of historical flow through rates in the high 70s in the past that maybe something to look at modeling when we start to get into the higher kind of revenue, the top end of the range on revenue. And hopefully that's helpful.

So to add just philosophically John, we have a principle even where we make investments in growth businesses, it pay as you go. So we're not very big on hockey stick approaches, saying, hey, keep investing and some days see the growth. And when we stop seeing it, we're not hesitant like RBFS, when you have had 27 quarters of growth. You are willing to keep adding salespeople because they're just hitting the ball out of the park. So having said all of that, I think we are – philosophically, we are very careful, especially the learnings from 2017 and 2018 that if you have supply constrained environment, you cannot count on growth. Now the way we look at it as plan for the worst and then things get better, that's icing on the cake. So I think we tried to – we want to keep SG&A levels low. I think you've seen total year 2018 and you've seen the second half of 2018. So we’ll let you draw your own conclusions on what this view can drive. But the key is that it's significantly lower. And I've told internally aspirationally that doesn't mean that volumes. So I want to be very clear that we do want to try to get through half the rate of agency proceeds on SG&A.

Okay. That’s very helpful. And then I just wanted to ask kind of a larger picture question. I know you mentioned that you guys might revisit some of the evergreen model metrics just due to the change in reporting. But I was kind of curious just your feel on the progress towards the evergreen goals. Are there any of the kind of descriptive categories that you've outlined that you feel better about or maybe a little bit even worse about achieving over that kind of the multiyear timeframe? And then additionally, specifically on the ROIC target, it seems like that, you've made some improvements there over 2017 levels, but just kind of curious kind of what the strategy is in terms of how you kind of get to that 15% number by 2021 and if, maybe changing of – capital returns as part of that.

Yes, so certainly there's nothing that we're seeing today that would, say that we are not in line with those targets. Certainly our modeling would be volume growth dependence, so those would be the key drivers to both achieve both EBITDA margin target as well as the ROIC targets. Certainly our discussion around, we are looking at the evergreen model is purely the fact that at least three of the measures are really based on revenue as the denominator, and with the inability to refer to agency proceeds on a go forward basis. That's really all we're calling out. We're not calling out any change in our expectations on what the model is capable of delivering.

And I think, the last thing is to EBITDA margin, which is the one that we've been very committed to the fact we delivered 35.3 and in the quarter a much higher than that. I think it's just indicative that was – steadily making progress, we remain confidence, and if you can keep that basis, which we cannot talk about that we feel confident that we'll get there.

Great. Thank you, guys.

Thank you.

Our next question comes from the line of Craig Kennison from Baird. Your line is open.

Good morning. Thanks for taking my question. It's on RB Asset Solutions. How many subscribers do you have today and can you frame what success looks like in 2019?

Yes. so on that Craig we essentially you've got lot of this also came from masters and a lot of people, a lot of customers that are using that solution and now we've just added the transactional vehicles to that. So we brought a base there and we're also getting a customers. The key as I mentioned in my prepared remarks is really 15 to 20 reference accounts globally. And I will not look at this as a material revenue or profit driver necessarily in 2019. So that we don't give you a wrong impression. It is more of a marathon, longer term thing. Because once you get in and get these tools into the customers, eventually the big win for us is when they start using that transactional engines and cascade it. And so that's got to be a build over time and we're actually excited about the long-term prospects, but I wouldn't look at it as a huge driver in 2019.

Thanks. And as it relates to GovPlanet, could you frame what you think of as the long-term opportunity in that marketplace?

Sure. So we're already, we have the rolling stock with the Defense Logistics Agency, the non-rolling stock, which we just talked about. We have the Marine core exchanges. There are so many governmental agencies in the United States. This is a profitable business. The government loves the team because we had a lot of value to them. They trust us and that's just in the United States and known. So there's so many agencies that we can go and then have the local and municipal state opportunity that we just that team is embryonic, we created team and we're building on that. So long-term, I see this again, it's going to be a long-term opportunity. But I see this as a very potent and possible opportunity, to drive meaningful the topline and bottom line over time.

Thank you.

Thank you.

Our next question comes from the line Ben Cherniavsky from Raymond James. Your line is open.

Good morning.

Hello, Ben.

Good morning.

Ravi you and I have talked quite a bit of in the past about the managing the GTV up through both channels and not trading one for the other. And so there was one comment in the press release that I wanted to ask you about because you mentioned that $829 million of online full-year GTV was generated last year, which was quite a bit higher than IronPlanet's last year as a standalone company, which is encouraging to see obviously. But if you subtract that from the total GTV, it suggests that your live auction GTV last year was about 15% loss than what Ritchie's was as a standalone in 2016. So I just wonder if you can comment on that if I'm thinking about that the right way or what the different moving parts of that look like?

Yes, I think so the comparison to me, the more relevant from right now, and I understand how you would look at that 1,000 folks set the premise that we have been in a very supply constraint environment then no matter what I say will be very tough to believe that we have it in an extraordinary in 2017 and 2018 that we saw a depressed live auction levels in 2017 in the first half even before we bought our own planet. So I think this has been, ultimately, it is all a matter of customer choice. We are agnostic in terms of does the customer want to be on market where you see, whether you want to be on weekly auction or on live. Our culture and D&A is such a legacy Ritchie Bros.’, salespeople have a natural affinity for the live auction and so any concerns and they are the majority on the end user business. Any concerns that there is cannibalization that is the last thing I worry about. Frankly, on my priorities as a 100, it would not even make the 100 about cannibalization of online to life. I think it is really what customers are choosing. It depends on the mix because it feels smaller items, if you want to put it on the weekly auction to get flow through. And then last thing is strategic accounts. So strategic accounts, they tend to be more – their mix is kind of they look at both online and live, the same which was true even when we had EquipmentOne. So I think those – and last thing, we've had additional GTV coming out of international, I said $100 million of MPE in weekly, lot of those are new customers who never wanted to deal with us because we were only a live auction company. So I think we now have all the channels to suit customer needs. And the one thing I can reassure everybody is a live auction company is very alive. We are all very proud of it and that is our core and that is going to continue to be part of our core. And I think you saw an Orlando, $297 million. If that doesn't show love for live auctions, I don't know what else go.

Is there something that in the online channel? Is less sensitive to equipment supply constraints, like wouldn't those same headwinds of made it just is difficult to get to grow that side of the business or is there some different sort of way that mechanics there that isn't…?

That’s no. IronPlanet also got hit in 2017 first half as a standalone company. And then we saw it also happened in the second half of 2017. I think the difference is that we are on both channels aggressively going after a new customers and marketplace, he has been a big part of this because as we've said, its – or $200 million brand and in its first year and that's all people who wanted reserve auction, which we never had. Yes, we had EquipmentOne. IronPlanet had daily marketplace, but it was not the way we've now constructed it. That has driven some incremental growth. And when you think about it, while it is, we said versus the peak year of 2016, that's up significantly. The end of the day when you look at absolute dollars, that's the thing you need to think about. So because the base of live auctions is so big, that – I think that has some impact as well.

Okay. Well that's helpful color. And your right, that was a big testament to your model in Orlando. So congratulations on that could result. Thanks a lot.

Thank you, Ben.

Our next question comes from the line of Maxim Sytchev from National Bank Financial. Your line is open.

Hi, a couple of quick ones. In terms, Ravi, I was thinking about, equipment loosening dynamic. I mean, do you mind maybe providing a couple of tidbits that are a bit more tangible, just a relative to that you're hoping that, that you're seeing something. Is there any green shoots on that basis?

Jeff, you're on the line. Maybe you can just make a few comments, so that we also hear from some others on the loosening and you are right in call pace.

Yes. Thanks, Ravi. Maxim, two weeks ago when we were in Orlando, obviously that that gives us a great opportunity to get in front of a lot of people, a lot of our sellers, and I think in those conversations you just get a sense of what we've known is fleets have gotten very large, rental fleets have gotten large. And as new equipment is also loosening up, in those conversations you just get a strong sense that that inventory is going to start to turn this year. There was some of the equipment's gotten older and now they can replace it. They're starting to think about 2020. So they're starting to think about what is the right time to start moving in those assets into the market. We obviously saw a little bit of that in Orlando. As we were up this year, we've seen some very positive comps in the other auctions we've had thus far in Q1. So I think it's just all of those conversations that that kind of add up, we know a lot of the pipeline works completing. We know there are a lot of assets that are coming out of that sector. And so it's really all of these kinds of data points that we add up that give us the – that that enthusiasm that a supply will start, start to free up this year. And look, it will be gradual, I think as Ravi mentioned. But it just feels very different in all of those conversations that we're having.

Okay. That's helpful.

One thing to add there Max, the one thing we noticed in Orlando, this year which was different from last year. Lot of the OEM dealers were very engaged last year in backing up the pricing, driving it, trying to buy the footprint because of the shortages et cetera. This year we noticed a noticeable absence of that and I think a lot of them are concerned that they are going to get least returns. We've heard of suddenly a few pipeline projects coming to an end, which could bring several hundred pieces of equipment into the market. So I think all of those, as Jeff said, when you add them, I think we do feel that it is beginning to turn.

Okay. That's helpful. Do you mind maybe quantifying as well in your Page 20, that fewer selling days in Q1 2019 versus Q1 2018 is a possible to the quantified on a percentage basis?

Zaheed?

Yes. Max, we don't have that right handy with us, but I can follow-up with you, so that you have that information, okay.

Yes, it is four days less…

Yes. It's not a huge number.

That is about four days.

I’ll make sure I get back to you with the right answer.

Okay. And just one last one for Sharon. What has changed in terms of the tax rate expectations because obviously before we’re looking for lower tax rate if it’s possible?

Yes, so couple of things Max. First, we did say at the point of the acquisition that we did expect the best realization of the tax rate to happen within the first few years of the deal and that’s really what's been driving 2017 and 2018 rate performance. Now as we get to kind of more normalized penetration of profit coming out of North America, which is kind of your highest tax rate areas, that's what's really driving the growth. Certainly there was clarification on some of the U.S. tax reform that did have some implications to us on what's considered to be, predominantly taxes, which is the royalty transfer pricing that goes into the U.S. But we think that is probably going to be at its highest level inside of 2019 and then should be less of an impact as that region – basically clear through all of it NOLs and get to a higher level of profitability. So it’s really a good alternative minimum tax kind of approach that they put in place. And what we are also seeing is it's not just the U.S. regulations that are changing. It's also of the international jurisdictions that we operate in. And certainly we just see that it is an environment that continues to change. And that guidance, I will point you to the fact that the U.S. tax rate is probably all in about 26% tax rate, Canada is about 27%. And a lot of our expenses are actually nondeductible in region. So travel and entertainment or neither type expenses are not deductible. And stock auction costs in Canada are not deductible. So those are kind of the major leavers that are looking for that increased tax rate in here.

So before we leave you Max, I'll just give you the exact number on the live selling days, online, it's 49 in 2019 versus 53 last year. And on a – auction it's six selling days in 2019 versus eight in 2018. So let's put some takes, we've added some auctions in 2019, taken out some auctions. So in domain, you come out at four less days versus prior year. Thank you.

Thank you very much.

Our next question comes from the line of Cherilyn Radbourne from TD Securities. Your line is open.

Thanks very much and good morning.

Hi Cherilyn.

First off, having deleverage the balance sheet in 2018, could you just speak to your appetite for acquisitions going forward? In other words, are there still geographies, channels or end markets that you might want to enter inorganically or do you pretty much have the platform that you want at this stage?

So let me take a quick shot of that. So Cherilyn, first at this point, we're not contemplating sort of transformative big mega acquisitions like IronPlanet. However we are absolutely open and flexible on tuck-in bolt-on acquisitions which give us expertise in certain sectors. We'd love to find something in agriculture in the U.S. for instance, or build our transportation skills internationally. We are always looking in drive countries to find where's that might either have been a sector expertise or deeper penetration geographically. So definitely that piece is an ongoing thing. It just we need to make sure those acquisitions are value creative and set our value system because there's a lot of regional players that do business in a different way than we do. But we keep an eye out on those and I don't want to rule those out.

Okay, that's helpful. If you can, I'd love to get a bit more detail on what you're seeing in Western Canada because you're so dominant in that market place that you'd be very well positioned to benefit if things are starting to loosen up?

Give it to you from the [indiscernible] I think Brian [indiscernible] ahead of Canada especially focused on Western Canada can tell you all about his exciting auction we just finished yesterday. Brian.

Thanks Ravi. Good morning, Cherilyn. Yes, as the landscape continues to shift, particularly in the oil and gas sector across the [indiscernible] provinces through disruption and then I guess some dislocation. We're in front of those customers and those clients each and every day and as we witnessed here this past week in Edmonton. There is still certainly pockets of activity, no doubts, winter work in the northern regions of Western Canada help drive a lot of that. But when it comes down to the root of it, particularly in the oil and gas sector, we do expect a very busy Q2 and Q3 as we head into the summer months. And it's a tale of I guess two countries in some respect where we see opportunity for us in the West to help clients and customers with some redeployment of assets so to speak. We also see pockets of activity, as an example down through Texas where those buyers and those end users are good clients at Ritchie Bros. So we have the ability to reach out. We talked to those people each and every day to help move the product back and forth. So we expect we're going to be obviously seeing probably an uptick in some insolvency play also across the last, and we're well positioned for that as well with our strategic accounts group here in the West.

Great. Thank you. That’s my two.

Thank you, Cherilyn

Last question.

Our last question comes from the line of Michael Feniger from Bank of America. Your line is open. Michael, your line is open.

Can you guys hear me? Hello?

Yes.

Hey, good morning guys. I might have missed this. Did you quantify the fee harmonization or buyer fee benefit in the fourth quarter? How much did that help the rate?

We have not quantified it. It certainly was a positive impact on the overall rates that would then offset by some of the softness that we experienced on the guaranteed contracts. Right now we have not quantified.

Okay. And then just, I think this is related to the Evergreen Model. When we look at the fourth quarter results, your profit margin expanded nicely on a year-over-year basis, but it's still kind of below those peak levels we've seen in prior fourth quarters despite where GTV is and rates still near the high end. You guys did a good job in the SG&A line. So just to get back to those prior margin levels, is it really just a question of scale that kind of drives that or is there anything we should be cognizant of what the mix maybe going more online or maybe more international growth or a higher services that kind of changes that profitability discussion versus comparing it to the older Ritchie? Just any color on that would be helpful.

Yes, I don't know what math you're actually using when I look at our Q4 rate performance. I actually feel like we are back on trend to some of our historical Q4 performance measures. And we’re very pleased with the flow through that we did experience in Q4 related to kind of maintaining a low cost profile on an accelerating agency proceeds growth. So again, I think it is a combination of maintaining that cost management focus and that discipline that we expect to incur inside of 2019 and 2020 coupled with that kind of growth profile on agency proceeds that we've called out in our Evergreen Model.

And Michael, it's very important not to interpret the Evergreen Model on a quarterly basis. I'll be horrified if that's how people are using it because that was the whole purpose was not to do that because we are not giving quarterly values and we’ve in fact said over a 5% in near period average. Having said all of that, Sharon is absolutely right. We actually thought we have terrific EBITDA performance against agency proceeds on fourth quarter and it is definitely very comparable to – if you go back and look at that and you can call Zaheed and he can run you through some of those numbers. But in our minds, we don't know where your accounts are, but it was definitely very strong performance.

Thanks guys.

And there are no further questions at this time. I will turn the call back over to Zaheed Mawani for closing remarks.

Thank you very much everybody. Have a safe day, and onwards and upwards.

And this concludes today's conference call. You may now disconnect.