Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934

For the month of November 2004

Commission File Number: 001-13425

Ritchie Bros. Auctioneers Incorporated

6500 River Road
Richmond, BC, Canada
V6X 4G5
(604) 273 7564
(Address of principal executive offices)

indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F

Form 20-F                                 Form 40-F            X

indicate by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(1):     

indicate by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(7):     

indicate by check mark whether by furnishing information contained in this Form,
the registrant is also thereby furnishing the information to the Commission pursuant to
Rule 12g3-2(b) under the Securities Exchange Act of 1934

Yes                           No            X

If “Yes” is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82-                   

PART 1. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The accompanying unaudited consolidated financial statements do not include all information and footnotes required by Canadian or United States generally accepted accounting principles for a complete set of annual financial statements. However, in the opinion of management, all adjustments (which consist only of normal recurring adjustments) necessary for a fair presentation of the results of operations for the relevant periods have been made. Results for the interim periods are not necessarily indicative of the results to be expected for the year or any other period. These financial statements should be read in conjunction with the summary of accounting policies and the notes to the consolidated financial statements included in the Company’s Annual Report on Form 40-F for the fiscal year ended December 31, 2003, a copy of which has been filed with the Securities and Exchange Commission. These policies have been applied on a consistent basis.

- 2-

RITCHIE BROS. AUCTIONEERS INCORPORATED

(Expressed in thousands of United States dollars, except per share amounts)
(Unaudited)

See accompanying notes to consolidated financial statements.

- 3 -

RITCHIE BROS. AUCTIONEERS INCORPORATED

(Expressed in thousands of United States dollars)

See accompanying notes to consolidated financial statements.

- 4 -

RITCHIE BROS. AUCTIONEERS INCORPORATED

(Expressed in thousands of United States dollars)
(Unaudited)

See accompanying notes to consolidated financial statements.

- 5 -

RITCHIE BROS. AUCTIONEERS INCORPORATED

(Expressed in thousands of United States dollars)
(Unaudited)

See accompanying notes to consolidated financial statements.

- 6 -

RITCHIE BROS. AUCTIONEERS INCORPORATED

- 7 -

RITCHIE BROS. AUCTIONEERS INCORPORATED
Notes to Consolidated Financial Statements

- 8 -

RITCHIE BROS. AUCTIONEERS INCORPORATED
Notes to Consolidated Financial Statements

- 9 -

RITCHIE BROS. AUCTIONEERS INCORPORATED
Notes to Consolidated Financial Statements

- 10 -

RITCHIE BROS. AUCTIONEERS INCORPORATED
Notes to Consolidated Financial Statements

- 11 -

RITCHIE BROS. AUCTIONEERS INCORPORATED
Notes to Consolidated Financial Statements

- 12 -

RITCHIE BROS. AUCTIONEERS INCORPORATED
Notes to Consolidated Financial Statements

- 13 -

RITCHIE BROS. AUCTIONEERS INCORPORATED
Notes to Consolidated Financial Statements

- 14 -

RITCHIE BROS. AUCTIONEERS INCORPORATED
Notes to Consolidated Financial Statements

- 15 -

Overview

The following discussion summarizes significant factors affecting the consolidated operating results and financial condition of Ritchie Bros. Auctioneers Incorporated (“Ritchie Bros.”, the “Company”, “we” or “us”) for the three- and nine-month periods ended September 30, 2004 compared to the three- and nine-month periods ended September 30, 2003. This discussion should be read in conjunction with the consolidated financial statements and notes thereto included elsewhere in this document, and with the disclosures below regarding forward-looking statements and risk factors. You should also consider our audited consolidated financial statements and notes thereto and the Management’s Discussion and Analysis of Financial Position and Results of Operations included in our Annual Report on Form 40-F for the year ended December 31, 2003.

The date of this discussion is as of November 1, 2004. Additional information relating to our company, including our Annual Information Form, is available by accessing the SEDAR website at www.sedar.com. None of the information on the SEDAR website is incorporated by reference into this document by this or any other reference.

We prepare our consolidated financial statements in accordance with generally accepted accounting principles in Canada, or Canadian GAAP. There are no material measurement differences between those financial statements and the financial position and results of operations that would be reported under generally accepted accounting principles in the United States, or U.S. GAAP. Amounts discussed below are based on our consolidated financial statements prepared in accordance with Canadian GAAP and are presented in United States dollars. All dollar amounts discussed below are expressed in thousands of dollars, except per share amounts.

Ritchie Bros. is the world’s largest auctioneer of industrial equipment. Our world headquarters are located in Richmond, British Columbia, Canada, and at September 30, 2004, we operated from over 100 locations, including 29 auction sites, in more than 20 countries around the world. We sell, through unreserved public auctions, a broad range of equipment, including equipment used in the construction, transportation, mining, forestry, petroleum, marine and agricultural industries.

We operate in the auction segment of the global industrial equipment marketplace. Our target market is the entire used equipment sector, which is large and fragmented and continues to grow primarily as a result of the increasing, cumulative world supply of used equipment, which is driven by the ongoing production of new equipment. The auction segment of the industrial equipment market is highly fragmented and has been growing; we believe that this growth will continue in the future.

In recent periods, an average of approximately 80% of the buyers at our auctions have been end users of equipment (retail buyers), such as contractors, with the remainder being primarily equipment dealers and brokers (wholesale buyers). Consignors to our auctions represent a broad mix of equipment owners, the majority being end users of equipment. Consignment volume at our auctions is affected by a number of factors, including regular fleet upgrades and reconfigurations, financial pressure, retirements, and inventory reductions, as well as by the timing of the completion of major construction and other projects.

We believe that we have several key strengths that will enable us to continue to attract an increasing number of consignors and bidders to our auctions. Our principal strengths are our reputation for conducting only unreserved auctions and our highly publicized commitment to fair dealing. Other important strengths include our size, the international scope of our operations, our extensive network of auction sites, our Internet tools and our in-depth experience in the marketplace.

- 16 -

Strict adherence to the unreserved auction process is one of our founding principles and, we believe, one of our most significant competitive advantages. When we say “unreserved” we mean that there are no minimum prices for anything sold at a Ritchie Bros. auction – each item sells to the highest bidder on sale day, regardless of the price. In addition, consignors (or their agents) are not allowed to bid on or buy back or in any way influence the selling price of their equipment. We have maintained our commitment to the unreserved auction process since our first industrial auction in 1963.

One of our primary goals is to continue to grow our gross auction sales, which is the total proceeds from all items sold at our auctions during the period. Our strategies for accomplishing this objective include, among others, continued development of markets and regions in which we already operate and expansion into new and emerging markets and regions, particularly within Europe, North America and Asia. We intend to continue to look for ways to capitalize on our competitive advantages outlined above. Where there are opportunities for us to bring some or all of these factors into play and assist an owner in realizing the best possible return on the sale of their assets, we will pursue that opportunity.

We are also using the Internet to increase our level of service and to extend further the geographic reach of our auctions and the multinational character of our bidding audiences. In addition, we continue to develop our technical and physical infrastructure, as well as our recruiting and training programs, in order to improve the productivity of our employees and to enhance the service we provide to our customers.

During the nine months ended September 30, 2004, we conducted 100 unreserved industrial auctions at locations in North America, Europe, the Middle East and Australia. We also held 79 smaller unreserved agricultural auctions in the first nine months of 2004. At September 30, 2004 we had 623 full-time employees, including 199 sales representatives.

We are a public company and our common shares are listed under the symbol “RBA” on the New York Stock Exchange and the Toronto Stock Exchange (known as the TSX). At November 1, 2004 we had 34,237,700 common shares issued and outstanding and stock options outstanding to purchase a total of 833,598 common shares. On May 4, 2004, our issued and outstanding common shares were split on a two-for-one basis. All share and per share amounts in this document reflect the stock split on a retroactive basis.

Sources of Revenue and Revenue Recognition

Gross auction sales is a key indicator of our operating performance. It is not a measure of revenue and is not presented in our consolidated financial statements. However, we believe that gross auction sales provides an important comparative measure of our relative operating performance between periods. Auction revenues are reported as the top line of our Statement of Operations and, as with certain other Statement of Operations line items, is best understood by considering its relationship to gross auction sales.

Auction revenues are comprised of auction commissions earned from consignors through straight commission and guarantee contracts, net profits or losses on the sale of inventory items, incidental interest income, handling fees on the sale of certain lots, and the Internet Purchase Fee and Proxy Purchase Fee. All revenue is recognized when the auction sale is complete and we have determined that the auction proceeds are collectible. When a multi-day auction occurs over a quarter end, the revenue from the sale is recognized in the period in which the auction is completed.

Straight commissions are our most common type of auction revenues and are generated by us when we act as agent for consignors and earn a pre-negotiated, fixed commission rate on the gross sales price of the consigned equipment at auction. In recent periods, this type of sale has generally represented approximately 75% of our gross auction sales volume on an annual basis.

In certain other cases, we guarantee minimum sales proceeds to the consignor and earn a commission based on the actual results of the auction, including a negotiated percentage of any sales proceeds in excess of the guaranteed amount. If the actual auction proceeds are less than the guaranteed amount, our commission is

- 17 -

reduced and, if proceeds are sufficiently lower, we can incur a loss on the sale. We factor in a higher rate of commission on these sales to compensate for the increased risk we assume. Our exposure from these guarantee contracts fluctuates over time, but guarantees relating to industrial auctions are generally outstanding for less than 45 days and the combined exposure at any time from all outstanding guarantees is usually less than $30 million. Losses, if any, resulting from guarantee contracts are recorded in the period in which the relevant auction is held. If a loss arises from a guarantee contract relating to an auction that occurs after the period end but prior to our reporting date, the loss is reflected in the period end financial statements. In recent periods, guarantee contracts have generally represented in the range of 20% of gross auction sales on an annual basis.

Auction revenues also include the net profit or loss on the sale of inventory in cases where we acquire ownership of equipment for a short time prior to an auction sale. When purchased, this equipment is assigned to a specific auction sale and sold at that auction in the same manner as consigned equipment. During the period that we retain ownership, the cost of the equipment is recorded as inventory on our Balance Sheet. If the equipment sells subsequent to period end but before the date of the related financial statements for less than the amount recorded in our Balance Sheet, the inventory is written down to its net realizable value. The net gain or loss on the sale is recorded as auction revenue. In recent periods, sales of inventory have generally represented in the range of 5% of gross auction sales on an annual basis.

The choice by consignors between straight commission, guarantee, or outright purchase arrangements depends on many factors, including the consignor’s risk tolerance and sale objectives. As a result, the mix of contracts in a particular quarter or year is not necessarily indicative of future performance. The composition of our auction revenues and our auction revenue rate (i.e. auction revenues as a percentage of gross auction sales) depend on the mix and performance of contracts entered into with consignors in any particular period and fluctuate from period to period. Our auction revenue rate performance is presented below.

Prior to 2002, our long-term expected average auction revenue rate was approximately 8.80%. With the introduction of a handling fee in 2002 and the proxy and Internet purchase fees in 2003, our long-term expected average auction revenue rate increased to approximately 9.30%. At the end of the second quarter of 2003, we determined that we were achieving a sustainably higher average auction revenue rate and we increased our long-term expected average auction revenue rate to 9.50%. At the end of 2003 we estimated that our average expected auction revenue rate for 2004 would be in the range of 9.50% to 10.00%.

- 18 -

The largest contributor to the variability in our auction revenue rate is the performance of our underwritten business. In a period when our underwritten business performs better than average, our auction revenue rate typically exceeds the expected average rate. Conversely, if our underwritten business performs below average, our auction revenue rate will typically be below the expected average rate. See further discussion of our auction revenue rate under “Results of Operations – Auction Revenue.”

Our gross auction sales and auction revenues are affected by the seasonal nature of the auction business. They tend to increase during the second and fourth calendar quarters, during which time we generally conduct more business than in the first and third calendar quarters.

Our gross auction sales and auction revenues are also affected on a period-to-period basis by the timing of major auctions. In newer markets where we are developing operations, the number and size of auctions and, as a result, the level of gross auction sales and auction revenues, are likely to vary more dramatically from period-to-period than in our established markets where the number, size and frequency of our auctions are more consistent. In addition, economies of scale are achieved as our operations in a region mature from conducting intermittent auctions, establishing a regional auction unit, and ultimately to developing a permanent auction site. Economies of scale are also achieved when our auctions increase in size.

Because of these seasonal and period-to-period variations, we believe that our gross auction sales and auction revenues are best compared on an annual or rolling twelve-month basis, rather than quarterly basis.

Developments in 2004

Our common shares commenced trading on the Toronto Stock Exchange on January 27, 2004. Our issued and outstanding common shares split on a two-for-one basis on May 4, 2004. All share and per share information in this document gives effect to the stock split on a retroactive basis.

On August 4, 2004, David E. Ritchie, our Chairman and Chief Executive Officer (or CEO), announced his intention to retire as our CEO effective October 31, 2004. Our Board of Directors appointed Peter J. Blake, our former Senior Vice-President and Chief Financial Officer, to become CEO when Mr. Ritchie retired. Robert S. Armstrong, our former Vice-President Finance and Corporate Secretary, was appointed Vice-President Finance, Chief Financial Officer and Corporate Secretary effective November 1, 2004. Mr. Ritchie will continue as Chairman of our Board of Directors.

On October 29, 2004, our Board of Directors appointed Beverley Briscoe to the Board. Ms. Briscoe has an extensive background working in industries complementary to the auction business, most recently as the president of her own transportation services company, Hiway Refrigeration Ltd. Ms. Briscoe is Chair of the British Columbia Government’s Industry Training Authority, a member of the Boards of BC Rail Corporation and Westminster Savings Credit Union, as well as a Director of the Boys and Girls Club of Greater Vancouver. With the addition of Ms. Briscoe and Eric Patel in April 2004, our Board of Directors is now comprised of a majority of independent directors.

Ms. Briscoe will join Eric Patel and G. Edward Moul on our Audit Committee, and Chuck Croft will step down from the Audit Committee. Ms. Briscoe, Mr. Patel and Mr. Croft have been appointed to the newly created Nominating and Corporate Governance Committee effective October 29, 2004.

On April 16, 2004, our shareholders approved an Executive Long Term Incentive Plan, the ELTIP, which involved the issuance of common shares from treasury. At the same time, they also authorized our Board of Directors to not implement the ELTIP if they see fit. On October 29, 2004, our directors passed a resolution not to implement the ELTIP. Instead, they approved and adopted a new Executive Long Term Incentive Plan, the New Plan, with terms similar to the ELTIP, which does not involve issuance of common shares from treasury. Instead the New Plan contemplates an administrator purchasing common shares through the open market. Our directors believe that the New Plan is preferable to the ELTIP for tax and administrative reasons. No shareholder approval is required for the adoption of the New Plan.

- 19 -

Critical Accounting Policies and Estimates

There have been no significant changes in our critical accounting policies and estimates since our Management’s Discussion and Analysis of Financial Condition and Results of Operations as at and for the year ended December 31, 2003.

Overall Performance

For the nine months ended September 30, 2004 we recorded auction revenues of $125.1 million and net earnings of $23.6 million, or $0.68 per diluted common share. This performance compares to auction revenues of $113.8 million and net earnings of $24.2 million, or $0.71 per diluted common share, for the corresponding period in 2003. Earnings for the first nine months of 2004 were essentially the same as in the comparable period in 2003, primarily because growth in auction revenues was offset by higher general and administrative expenses and income taxes. We ended the nine months of 2004 with working capital of $33.5 million, compared to $35.3 million at December 31, 2003.

Results of Operations

We conduct operations on a global basis in a number of different currencies, but our reporting currency is the United States dollar. For the nine months ended September 30, 2004 approximately 30% of our revenues and approximately 40% of our operating costs were denominated in currencies other than the United States dollar, which is consistent with the relative proportions in recent periods. While the impact of currency fluctuations on our net earnings was essentially neutral, the presentation of our financial position and results of operations was impacted by fluctuations in foreign exchange rates.

The main currencies other than the United States dollar in which our revenues and operating costs are denominated are the Canadian dollar, the Euro, and the Australian dollar. Since the end of 2002 there has been a significant increase in the value of these currencies relative to the United States dollar. This fluctuation, which we refer to as the currency fluctuation, has resulted in higher revenues and operating costs compared to the same period in the prior year, as discussed in more detail below.

Nine Months Ended September 30, 2004 Compared to Nine Months Ended September 30, 2003

Auction Revenues

Auction revenues increased in 2004 as a result of higher gross auction sales during the year, partially offset by a decrease in our auction revenue rate. The higher gross auction sales in 2004 was primarily a result of increases in the United States and Canada compared to the nine months ended September 30, 2003. Gross auction sales in 2004 include $35.0 million relating to agricultural auctions held during the nine months ended September 30, 2004 (2003 – $20.7 million). The decrease in the auction revenue rate in 2004 can be attributed mainly to the performance of our guarantee and inventory contracts compared to their unusually strong performance in 2003. This underwritten business represented 22% of our total gross auction sales for the nine months ended September 30, 2004 compared to 27% for the equivalent period in 2003.

- 20 -

Our auction revenue rate was 10.09% for the nine months ended September 30, 2004, slightly above our expected range. We continue to expect that our auction revenue rate will be within the range of 9.50% to 10.00% for the remainder of 2004. Past experience has shown that our auction revenue rate is difficult to estimate precisely, and therefore, the actual auction revenue rate for the remainder of 2004 may be above or below this range.

A small change in our auction revenue rate can have a material impact on our auction revenues and therefore, our net earnings. For example, a 10 basis point (0.1%) increase or decrease in our auction revenue rate would have impacted auction revenues by approximately $1.2 million in the first nine months of 2004, of which approximately $0.8 million would have flowed through to net earnings in our Statement of Operations, assuming no other changes. This factor is important to consider when evaluating our current and past performance, as well as when judging future prospects.

Direct Expenses

Direct expenses consist of costs incurred as a direct result of an auction sale being held. Direct expenses include the costs of hiring personnel to assist in conducting the auction, advertising specifically related to the auction, travel costs for employees to attend and work at the auction, security hired to safeguard equipment at the auction site and rental expenses for temporary auction sites.

Direct expenses as a percentage of gross auction sales fluctuate based on the size and location of auctions held each period. As the size of auctions increases, the direct expense rate generally decreases. Moreover, auctions held at permanent auction sites tend to have lower direct expense rates than auctions held at temporary locations due to the economies of scale and other efficiencies typically achieved at permanent auction sites. During the nine months ended September 30, 2004 we held a number of large auctions and we experienced an increase in the average size of our auctions, which resulted in a lower direct expense rate compared to the rate for the nine months ended September 30, 2003. We expect that the direct expense rate will be in the range of 1.40% for the remainder of 2004.

Depreciation Expense

Depreciation is calculated on either a straight line or a declining balance basis on capital assets employed in our business, including buildings and site improvements, automobiles, yard equipment, and computer hardware and software, depending on their nature. Depreciation expense grew primarily as a result of the depreciation of new auction facilities constructed over the past few years and charges related to capitalized software development costs from recent periods. In addition, the currency fluctuation resulted in higher depreciation expense on assets denominated in currencies other than the United States dollar.

We anticipate that depreciation expense will continue to increase in the future as existing auction sites are improved and additional permanent auction sites are acquired and developed, though we expect that the rate of increase will be slower than in recent years because the acquisition and development of auction sites has slowed, as discussed below under “Liquidity and Capital Resources”.

- 21 -

General and Administrative Expenses

General and administrative expenses (“G&A”) include items such as employee expenses (salaries, wages, performance bonuses and benefits), non-auction related travel, information technology, repairs and maintenance, insurance, telecommunications, rent and lease payments, utilities, and institutional advertising. The increase in G&A is attributable to a number of factors, including the currency fluctuation, and increased costs incurred in 2004 to support our growth initiatives (salaries and wages, information technology, repairs and maintenance). We have also recorded higher employee performance bonus accruals as a result of the executive long-term incentive plan adopted during the year. In addition, we recorded higher G&A expenses as a result of a change in our method of allocating costs to internal software development projects, which caused a lower level of costs to be capitalized to such projects in 2004. We adopted the fair value method of accounting for stock-based compensation in 2003, and the related expenses are recorded in G&A. 2003 G&A amounts have been increased by $0.8 million to reflect the new accounting policy that was adopted effective January 1, 2003. Future levels of G&A will continue to be affected by the expansion of infrastructure and workforce necessary to support our growth plans, as well as other factors including fluctuations in foreign exchange rates.

Income Taxes

Income taxes have been computed based on rates of tax that apply in each of the tax jurisdictions in which we earn our income. The effective tax rate for the nine months ended September 30, 2004 was higher than the rate we experienced in 2003 as a result of differences in earnings within the various tax jurisdictions in which we earn our income. In addition, realized foreign exchange gains at the subsidiary level on certain term debt coming due in 2004 have resulted in an increase of $0.9 million in our third quarter income tax provision. A similar amount is expected to be recorded as tax expense in the fourth quarter of 2004. This portion of the income tax provision is unrelated to our operations and we do not expect to incur an equivalent charge in subsequent periods. Absent this non-recurring component, our income tax rate for the nine months ended September 30, 2004 would have been 35.3%. Income tax rates in future periods will fluctuate depending upon the impact of unusual items and the level of earnings in the different tax jurisdictions in which we earn our income.

Net Earnings

Net earnings for the first nine months of 2004 decreased slightly compared to the same period in the prior year. Although gross auction sales increased, there was a reduction in the auction revenue rate and an increase in G&A and income tax expenses. The currency fluctuation did not have a material net effect on earnings for the nine months ended September 30, 2004.

- 22 -

Three Months Ended September 30, 2004 Compared to Three Months Ended September 30, 2003

Auction Revenues

Auction revenues increased in the third quarter of 2004 primarily as a result of higher gross auction sales, offset in part by a decrease in our auction revenue rate. The increase in gross auction sales in 2004 was mainly attributable to higher gross auction sales in Canada, Europe and the Middle East compared to the quarter ended September 30, 2003. The decrease in the auction revenue rate in 2004 can be explained mainly by the performance of the Company’s guarantee and inventory contracts compared to 2003 which, while strong, did not achieve the unusually high level recorded in the third quarter of 2003. This underwritten business represented 19% of our total gross auction sales for the three months ended September 30, 2004 compared to 26% for the equivalent period in 2003.

Direct Expenses

Direct expenses as a percentage of gross auction sales were lower than expected for the three months ended September 30, 2004 and lower than the equivalent period in the prior year because we held several larger than average auctions during the quarter, which resulted in a lower direct expense rate. During interim periods, we are required to make certain estimates of direct expenses incurred with respect to auctions completed near the quarter end. In the subsequent quarter, we revise these estimates, to the extent necessary, to reflect actual costs incurred. For the third quarter of 2004, this process has resulted in a reduction in direct expenses to reflect the recovery of previously provided for estimated costs.

Depreciation Expense

Depreciation expense was consistent with our expectations and not materially different from the depreciation expense recorded in the third quarter of the prior year.

- 23 -

General and Administrative Expenses

The increase in G&A is attributable to a number of factors, including increased costs incurred in 2004 to support our growth initiatives (salaries, wages and benefits, information technology, and repairs and maintenance) and the currency fluctuation. In addition, accruals relating to the executive long-term incentive plan contributed further to the growth in G&A. We also recorded higher G&A expenses as a result of a change in our method of allocating costs to internal software development projects, which caused a lower level of costs to be capitalized to such projects.

Income Taxes

The effective tax rate for the three months ended September 30, 2004 was higher than the rate we experienced in 2003 as a result of differences in earnings within the various tax jurisdictions in which we earn our income. In addition, income tax expenses include the $0.9 million effect relating to the realized foreign exchange gains recorded at the subsidiary level in connection with term debt coming due in 2004, as discussed above under income taxes for the nine months ended September 30, 2004. Absent this non-recurring component, our income tax rate for the quarter ended September 30, 2004 would have been 27.7%.

Net Earnings

Net earnings decreased in the third quarter of 2004 compared to the same period in 2003 primarily as a result of increased G&A and income tax expenses, partially offset by higher auction revenues and lower direct and interest expenses, as discussed above. The currency fluctuation did not have a material net effect on earnings for the three months ended September 30, 2004.

Summary of Quarterly Results

The following tables present our unaudited consolidated quarterly results of operations for each of our last eight quarters. This data has been derived from our unaudited consolidated financial statements, which were prepared on the same basis as the annual audited consolidated financial statements and, in our opinion, include all adjustments necessary, consisting solely of normal recurring adjustments, for the fair presentation of such information. These unaudited quarterly results should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2003. All dollar amounts in the following tables are stated in thousands of United States dollars, except per share data.

- 24 -

Liquidity and Capital Resources

Our cash position fluctuates significantly from period to period, largely as a result of differences between the timing, size and number of auctions, the timing of the receipt of auction sale proceeds from buyers, and the timing of the payment of net amounts due to consignors. We usually collect auction proceeds from buyers within seven days of the auction and generally pay out auction proceeds to consignors approximately 21 days following an auction. If auctions are conducted near a period end, we may hold cash in respect of those auctions that will not be paid to consignors until after the period end. Accordingly, we believe a more meaningful measure of our liquidity is working capital, including cash. In our opinion, our working capital balance at September 30, 2004 is adequate to meet our needs.

Working capital at September 30, 2004 included funds committed for debt repayment of $18.1 million. We expect to renegotiate certain of our term debt during the remainder of 2004, as discussed below. If this debt is renegotiated, the funds committed for debt payment in excess of the amount applied to debt repayment will become cash and cash equivalents on our balance sheet, and available for general purposes.

- 25 -

Capital asset additions were $15.3 million for the nine-month period and $5.7 million for the three-month period ended September 30, 2004, compared to $11.7 million and $3.5 million respectively for the corresponding periods in 2003. Our capital expenditures in 2004 relate primarily to the construction of our new permanent auction site in Sacramento, California. Exchange rate changes relating to capital assets held in currencies other than the United States dollar resulted in an increase in the recorded value of capital assets of $1.2 million for the first nine months of 2004 and $4.3 million for the third quarter, compared to increases of $12.6 million and $0.3 million, respectively in the nine and three months ended September 30, 2003.

On October 1, 2004 we entered into an agreement to dispose of our property in Ocala, Florida for proceeds approximating its book value. The proceeds will be received over a period not to exceed three years. The land was no longer being used in our operations. During the quarter ended September 30, 2004, we committed to purchase a parcel of land in Nashville, Tennessee. The purchase price, which is expected to be paid in the fourth quarter of 2004, will be approximately $1.9 million. We intend to develop the property for a new permanent auction site.

We intend to add additional permanent auction sites in selected locations as appropriate opportunities arise, though actual expenditure levels in the future will depend on our ability to identify, acquire and develop suitable auction sites. We expect that capital expenditures, including maintenance capital expenditures, will be in the range of $15 million to $20 million per year on average for the next few years.

On August 4, 2004, our Board of Directors declared a quarterly cash dividend of $0.11 per common share relating to the quarter ended June 30, 2004. The dividend was payable on September 17, 2004 to shareholders of record on August 27, 2004. The total dividend payment was $3.8 million. On October 29, 2004, our Board of Directors declared a quarterly cash dividend of $0.11 per common share relating to the quarter ended September 30, 2004. The dividend will be payable on December 17, 2004 to shareholders of record on November 26, 2004. The total dividend payment is expected to be approximately $3.8 million.

We have established credit facilities with financial institutions in the United States, Canada, Europe, and Australia. We had no floating rate debt at September 30, 2004 (December 31, 2003 – $4.4 million). During the three- and nine-month periods ended September 30, 2004 we repaid term debt of $0.1 million and $6.8 million respectively, compared to $0.1 million and $2.8 million respectively during the same periods in 2003.

We expect to renegotiate approximately $20 million of our term debt in the fourth quarter of 2004, once it becomes due, and most of this debt to be renegotiated is subject to short-term interest rates until its due date. During the quarter ended September 30, 2004, we extended the due date of this debt into the fourth quarter of 2004. At September 30, 2004, we were in compliance with all of the covenants applicable to our bank debt.

- 26 -

Transactions with Related Parties

During the quarter ended September 30, 2004, we paid approximately $0.8 million to D.E.R. Resorts Ltd. (or Resorts), a company controlled by David E. Ritchie, the Chairman of our Board of Directors and our former Chief Executive Officer. The costs were incurred pursuant to agreements, approved by our Board of Directors, by which Resorts agrees to provide meeting rooms, accommodations, meals and recreational activities at its facilities on Stuart Island in British Columbia, Canada, for certain of our customers and guests. The agreements set forth the fees and costs per excursion, which are based on market prices for similar types of facilities and excursions. We believe that the terms of the agreements were at least as favorable to us as we could have obtained from a third party. We have entered into similar agreements with Resorts in the past and intend to do so in the future.

Quantitative and Qualitative Disclosure about Market Risk

Although we cannot accurately anticipate the future effect of inflation on our financial condition or results of operations, inflation historically has not had a material impact on our operations.

We are exposed to currency fluctuations and exchange rate risk on all operations conducted in currencies other than the United States dollar. We cannot accurately predict the future effects of foreign currency fluctuations on our financial condition or results of operations. For the nine months ended September 30, 2004, approximately 30% of our revenues were earned in currencies other than the United States dollar and approximately 40% of our operating costs were denominated in currencies other than the United States dollar. We do not enter into foreign currency contracts to hedge against foreign currency rate fluctuations associated with our operations denominated in currencies other than the United States dollar.

During the nine months ended September 30, 2004 we recorded an increase in our foreign currency translation adjustment balance of $1.4 million, compared to an increase of $12.6 million in the same period in 2003. Our foreign currency translation adjustment arises from the translation of our net assets denominated in currencies other than the United States dollar into our reporting currency, which is the United States dollar.

- 27 -

Forward-Looking Statements

This “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contains forward-looking statements that involve risks and uncertainties. These statements are based on current expectations and estimates about our business, and include, among others, statements relating to:

In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “could,” “continue,” “estimate,” “expect,” “intend,” “may,” “might,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would,” or the negative of these terms, and similar expressions intended to identify forward-looking statements. Our forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. While we have not described all potential risks related to our business and owning our common shares, the important factors listed under “Risk Factors” are among those that may affect our performance and could cause our actual financial and operational results to differ significantly from our predictions. We do not intend to update publicly any forward-looking statements, even if our predictions have been affected by new information, future events or other developments. You should consider our forward-looking statements in light of these and other relevant factors.

Risk Factors

Our business is subject to a number of risks and uncertainties, and our past performance is no guarantee of future performance. Some of the more important risks we face are outlined below and should be considered by holders of our common shares. The risks and uncertainties described below are not the only risks and uncertainties we face. Additional risks and uncertainties not currently known to us or that we currently deem immaterial also may impair our business operations. If any of the following risks actually occur, our business, results of operations and financial condition would suffer.

- 28 -

We may incur losses related to our guarantee and outright purchase contracts and advances to consignors.

We generally offer our services to consignors on a straight commission basis. In some cases we will, subject to our evaluation of the items being consigned, either offer to:

If auction proceeds are less than the guaranteed amount, our commission will be reduced or, if sufficiently lower, we will incur a loss. If auction proceeds are less than the purchase price we paid, we will incur a loss. Because all of our auctions are unreserved, we cannot protect against these types of losses by bidding on or acquiring any items at the auctions. In recent periods, guarantee contracts and our direct purchases and sales of inventory have generally represented approximately one-quarter of our annual gross auction sales.

Occasionally we advance to consignors a portion of the estimated auction proceeds prior to the auction. We generally make these advances only after taking possession of the assets to be auctioned and upon receipt of a security interest in the assets to secure the obligation. If we were unable to auction the assets or if auction proceeds were less than amounts advanced, we could incur a loss.

We may incur losses related to our guarantees of clear title on the assets sold at our auctions.

We guarantee that each item purchased at our auctions is free of liens and other encumbrances up to the purchase price paid by the buyer. While we expend considerable effort ensuring that all liens have been identified and, if necessary, discharged prior to the auction sale, occasionally we have not properly identified or discharged liens and have had to make payments to the relevant lienholders or purchasers. If we are unable to recover sufficient funds from the consignors to offset these payments, we will incur a loss; aggregate losses from these payments could be material.

Our operating results are subject to quarterly variations.

Our revenues and operating results historically have fluctuated from quarter to quarter. Among the factors that we expect will continue to cause these fluctuations are:

Additionally, we generally incur substantial costs when entering new markets, and the profitability of operations at a new location is uncertain due to heightened variability in the number and size of auctions at these sites. These and other factors may cause our future results to fall short of investor expectations or to not compare favorably to past results.

- 29 -

Decreases in the supply of, demand for, or market values of industrial assets, primarily used industrial equipment, would harm our business.

Significant erosion in the supply of, demand for, or market values of used equipment could reduce our auction revenues and impact our financial condition and results of operations. Most of the factors that affect the supply of, and demand for, used equipment are beyond our control, and market values for used equipment fluctuate based on circumstances beyond our control. In addition, price competition for new equipment has a direct impact on the supply of, demand for, and market value of used equipment

We may be unable to sustain and manage our growth.

A principal component of our strategy is to continue our growth, primarily by increasing earnings from operations in existing markets and by expanding into new geographic markets and into auction market segments that we have not historically emphasized. We may not be successful in growing our business or in managing this growth. Our growth depends on our ability to accomplish a number of things, including:

Any growth we achieve may require additional employees and increase the scope of both our operating and financial systems and the geographic area of our operations. This will increase our operating complexity and the level of responsibility of existing and new management personnel. We may be unable to attract and retain qualified managers and employees, and our existing operating and financial systems and controls may not be adequate to support our growth. Our ability to improve our systems and controls may be limited by increased costs, technological challenges, or lack of qualified employees. Our past results and growth may not be indicative of our prospects or our ability to penetrate new markets, many of which may have different competitive conditions and demographic characteristics than our current markets.

Our substantial international operations expose us to foreign exchange rate fluctuations and political and economic instability, which could harm our operating results.

We conduct business in North, South and Central America, Europe, Asia, Australia, Africa and the Middle East and intend to continue expanding our international presence. Fluctuating currency exchange rates, acts of terrorism or war, and changing social, economic and political conditions and regulations may adversely affect our business in international markets and our related operating results. Fluctuations in currency exchange rates between the different countries in which we conduct auctions impact the purchasing power of buyers, the motivation of consignors, asset values and asset flows between different countries. These factors and other global economic conditions may impair our business and harm our operating results.