Group 1 - Rush Enterprises, Inc. will host a conference call to discuss earnings for the first quarter of 2025 on May 1, 2025, at 10:00 a.m. Eastern/9:00 a.m. Central [1] - Earnings will be reported after the market closes on April 30, 2025 [1] - The call will be accessible via a dedicated link and participants are encouraged to join 10 minutes early [2] Group 2 - Rush Enterprises operates the largest network of commercial vehicle dealerships in North America, with over 150 locations across 22 states and Ontario, Canada [3] - The company represents various truck and bus manufacturers, including Peterbilt, International, and Ford, and offers a comprehensive range of services from vehicle sales to financing and insurance [3] - Rush Enterprises also provides CNG fuel systems, telematics products, and vehicle technologies, enhancing its service offerings in the commercial vehicle industry [3]

Business Operations - Rush Enterprises operates over 143 franchised Rush Truck Centers locations across 23 states[27] - The company increased its equity interest in RTC Canada to 80% after acquiring an additional 30% in May 2022[27] - The total number of locations includes 121 owned, 78 leased, and 16 other locations, totaling 488 franchises[30] - The company plans to expand its dealership network through strategic acquisitions and new locations to better serve customers[28] - Rush Truck Centers provide a comprehensive range of services, including new and used vehicle sales, aftermarket parts, service, and financing[26] - The company operates 54 franchised Rush Truck Leasing locations in 21 states and 5 in Ontario, offering a wide range of commercial vehicles for lease[29] - The joint venture with Cummins focuses on manufacturing compressed natural gas fuel systems for commercial vehicles[33] - The company emphasizes a one-stop service model to mitigate economic fluctuations, enhancing overall operating margins[36] - The company has developed certain dealerships as "one-stop centers" providing integrated services including sales, leasing, and financial services[36] Financial Performance - Aftermarket Products and Services generated revenues of approximately $2,516.0 million, accounting for 32.2% of total revenues and 60.4% of gross profit for 2024[39] - New commercial vehicle sales accounted for approximately $4,553.0 million, or 58.3% of total revenues in 2024, with Class 8 heavy-duty truck sales contributing $2,906.8 million, or 37.2% of total revenues[42] - Used commercial vehicle sales reached approximately $335.8 million, representing 4.3% of total revenues for 2024[46] - Vehicle leasing and rental revenues amounted to approximately $354.9 million, or 4.5% of total revenues for 2024[47] - Warranty-related parts and service revenues accounted for approximately $186.6 million, or 2.4% of total revenues for 2024[40] - New medium-duty commercial vehicle sales, excluding new bus sales, accounted for approximately $1,312.3 million, or 16.8% of total revenues for 2024[43] - Financial and insurance product sales contributed approximately $22.0 million, or 0.3%, of total revenues for 2024[48] Employee Metrics - The turnover rate for U.S. and Canada technicians was 38.1% in 2024, compared to 33.6% in 2023, indicating a significant increase in technician turnover[66] - The company employed 7,388 people in the U.S. and 550 in Canada as of December 31, 2024, with less than 1.4% classified as part-time[51] - The overall employee turnover rate for U.S. and Canada was 30.5% in 2024, up from 25.1% in 2023[66] - The company had a Total Recordable Incident Rate (TRIR) of 4.10 in 2024, compared to 3.68 in 2023[71] Acquisitions - The company acquired assets of Nebraska Peterbilt for approximately $16.5 million on July 15, 2024, including commercial vehicle and parts inventory[79] - On December 4, 2023, the company acquired assets of Freeway Ford Truck Sales, Inc. for approximately $16.3 million, which included a Ford commercial vehicle franchise[80] - The company acquired assets of Scheppers International Truck Center for approximately $6.8 million on November 7, 2022, including an International truck franchise and inventory[81] - The company increased its equity interest in RTC Canada to 80% for approximately $20.0 million, consolidating its operating results thereafter[82] Revenue Breakdown - Sales of new Peterbilt commercial vehicles accounted for approximately 34.3% of total revenues for 2024[85] - Sales of new International commercial vehicles accounted for approximately 17.4% of total revenues for 2024[86] - Sales of new non-Peterbilt and non-International commercial vehicles accounted for approximately 6.6% of total revenues for 2024[87] Debt and Credit Agreements - As of December 31, 2024, the company had approximately $492.7 million outstanding under the PFC Floor Plan Credit Agreement[91] - The average daily outstanding borrowings under the BMO Floor Plan Credit Agreement were $956.4 million during the twelve months ended December 31, 2024[92] - The company had approximately $78.2 million CAD outstanding under the RTC Canada Floor Plan Credit Agreement as of December 31, 2024[94] - The company had approximately $153.4 million outstanding under the WF Credit Agreement as of December 31, 2024[95] - The Company entered into a PLC Agreement for up to $500.0 million in revolving credit loans to finance capital expenditures, with a minimum balance requirement of $220.0 million[96] - As of December 31, 2024, the outstanding amount under the PLC Agreement was approximately $220.0 million[96] - RTC Canada has a revolving credit agreement with BMO for up to $120.0 million CAD, with an additional $20.0 million CAD available upon request[97] - As of December 31, 2024, RTC Canada had approximately $50.4 million CAD outstanding under the revolving credit agreement[97] Order Backlog and Market Conditions - The backlog of commercial vehicle orders decreased to approximately $1,512.7 million as of December 31, 2024, down from approximately $3,733.4 million on December 31, 2023[102] - The decrease in backlog reflects reduced demand for new Class 8 trucks due to production catching up to pent-up demand and an ongoing freight recession[102] - The Company expects to fill all backlog orders during 2025, although recent tariffs could lead to cancellations[102] - The Truck Segment experiences moderate seasonality, with higher sales volumes in the second and third quarters historically for Aftermarket Products and Services[101] Environmental Regulations - The Company is subject to new EPA regulations requiring significant reductions in NOx emissions starting in model year 2027[108] - CARB has adopted rules to phase out the sale of internal combustion engine commercial vehicles, aiming for 100% zero-emission vehicles by 2050[109] - The Company does not anticipate material environmental liabilities affecting its financial condition, but compliance costs may increase due to evolving regulations[107] - The Clean Truck Partnership was established in July 2023, where manufacturers agreed to comply with CARB's emission requirements and align with the EPA 2027 Low NOx rule[109] - A joint memorandum of understanding among seventeen U.S. states aims for 100% of new Class 3 through 8 commercial vehicles to be zero emission by 2050, with a 30% target by 2030[109] - The company does not currently believe it has any material environmental liabilities, but acknowledges potential future costs related to compliance with environmental laws[107] Warranty Information - The company provides limited warranties on proprietary parts and services, and extended warranties on new Blue Bird school buses sold in Texas[98] - The company does not provide warranties on used commercial vehicles, but customers can purchase third-party warranties[99]

Financial Data and Key Metrics Changes - The company reported annual revenues of $7.8 billion for 2024, with a net income of $304.2 million or $3.72 per diluted share [6] - For Q4 2024, revenues were $2 billion, and net income was $74.7 million or $0.91 per diluted share [6] - A cash dividend of $0.18 per common share was announced [7] Business Line Data and Key Metrics Changes - Parts, service, and body shop revenues were $2.5 billion, down 1.8% from 2023, with an absorption ratio of 132.2% compared to 135.3% in 2023 [10][11] - New Class 8 truck sales were 15,465 units, down 11.4% year-over-year, representing 6.1% of the US market and 1.7% of the Canadian market [12] - Class 4 through 7 new truck sales increased by 5.1% year-over-year, with 13,935 units sold in 2024, representing 5.3% of the US market and 3.1% of the Canadian market [14] Market Data and Key Metrics Changes - The used truck market remained challenging, with sales of 7,110 used trucks in 2024 being flat year-over-year [16] - Leasing and rental revenue was $354.9 million, basically flat from 2023 [17] - ACT Research forecasts US and Canadian sales of new Class 8 trucks to be 277,200 units in 2025, flat with 2024 [13] Company Strategy and Development Direction - The company aims to expand its technician workforce in 2025, particularly mobile technicians, to reduce vehicle downtime and enhance service [12] - Focus on growing the national account customer base and other aftermarket strategic initiatives is expected to drive revenue growth [11] - The company is monitoring proposed tariffs that may impact vehicle and component parts prices, which could decrease demand for new commercial vehicles [20] Management's Comments on Operating Environment and Future Outlook - The management acknowledged a challenging year in 2024 due to the freight recession, high interest rates, and economic uncertainty [7] - There is optimism for a recovery in the second half of 2025 as freight rates improve, despite a tough start to the year [14][34] - Management expressed confidence in the vocational market remaining strong, with potential growth in the oilfield sector [55] Other Important Information - The company plans to manage G&A expenses carefully as business ramps up, aiming to maintain a gross profit margin of around 40% [41][44] - The management highlighted the importance of adapting to e-commerce trends to potentially reduce expenses in the future [47] Q&A Session Summary Question: Earnings seasonality in 2025 and parts and service recovery - Management expects a tough first half of 2025 but anticipates a ramp-up in the second half, with parts and service potentially improving as the year progresses [25][34] Question: SG&A control and efficiency - Management indicated that SG&A expenses are tied to truck sales and that they managed to reduce G&A expenses by almost 5% year-over-year [40][41] Question: Vocational market outlook for 2025 - Management believes the vocational market will remain strong, with good demand despite not having large backlogs [55][60] Question: Medium-duty market expectations - Management expects medium-duty sales to remain flat in 2025, as supply has caught up with demand [62][66] Question: Emissions regulations and pre-buy discussions - Management noted uncertainty around emissions regulations and expects some pre-buy activity as new regulations approach [72][90] Question: Impact of proposed tariffs - Management expressed concerns that proposed tariffs could significantly increase truck prices and squeeze demand, but they are unsure of the timeline for implementation [93][96] Question: Discounting on new truck pricing - Management does not expect broad-based discounting in the first half of 2025, anticipating flat pricing instead [105][106]

Financial Performance - For the year ended December 31, 2024, the company achieved revenues of $7.8 billion, a slight decrease from $7.9 billion in 2023. Net income was $304.2 million, or $3.72 per diluted share, down from $347.1 million, or $4.15 per diluted share in the previous year [1][24]. - The company recognized a one-time, pre-tax charge of approximately $3.3 million in Q3 2024 due to Hurricane Helene, compared to a $2.5 million charge in Q3 2023 related to a fire loss [1][24]. - Adjusted net income for 2024 was $306.7 million, or $3.75 per diluted share, compared to $349.0 million, or $4.17 per diluted share in 2023 [1][24]. Market Conditions - The company faced persistent headwinds in 2024, including a freight recession, high interest rates, and economic uncertainty, which negatively impacted demand for Class 8 trucks, particularly from over-the-road carriers [2]. - Despite challenges, vocational and public sector sales of new Class 8 trucks remained strong, helping to offset weak demand from over-the-road customers [2]. - New U.S. and Canadian Class 8 retail truck sales totaled 275,184 units in 2024, down 8.8% from 2023, with the company selling 15,465 new Class 8 trucks, a decrease of 11.4% [14]. Aftermarket Products and Services - Aftermarket products and services accounted for approximately 60.4% of the company's total gross profits in 2024, with revenues totaling $2.5 billion, down 1.8% from 2023 [11][25]. - Parts revenue decreased year-over-year, primarily due to lower sales to over-the-road and wholesale customers, while service and body shop revenues increased, driven by vocational and public sector customers [3][12]. - The company achieved an annual absorption ratio of 132.2% in 2024, compared to 135.3% in 2023, indicating effective management of overhead expenses [11]. Strategic Initiatives - The company expanded its network in 2024 by adding new Rush Truck Centers locations and enhancing vehicle modification capabilities, demonstrating a commitment to better serve customers [9]. - A $150 million stock repurchase program was announced, reflecting confidence in the company's ability to generate strong free cash flow despite challenging conditions [4]. - The company plans to focus on growing its national account customer base and expanding its mobile service fleet to enhance aftermarket service sales in 2025 [13]. Future Outlook - Looking ahead to 2025, the company anticipates a challenging first half for new Class 8 truck sales, with expectations for improvement in freight rates by the end of Q2 [5][17]. - The company expects to maintain its market share in Class 4-7 commercial vehicles, despite a slight market softening, and aims to continue growing its medium-duty market share [5][19]. - The company is monitoring proposed tariffs that may impact vehicle and component prices, which could affect demand in 2025 [7].

Core Points - Rush Enterprises, Inc. will host a conference call to discuss earnings for the fourth quarter and year-end 2024 on February 19, 2025 [1] - Earnings will be reported after the market closes on February 18, 2025 [1] Company Overview - Rush Enterprises, Inc. operates the largest network of commercial vehicle dealerships in North America, with over 150 locations across 23 states and Ontario, Canada [3] - The company represents various truck and bus manufacturers, including Peterbilt, International, Hino, Isuzu, Ford, Dennis Eagle, IC Bus, and Blue Bird [3] - Rush Enterprises provides a comprehensive range of services, including sales of new and used vehicles, aftermarket parts, service, financing, insurance, leasing, and rental [3] - The company also offers CNG fuel systems, telematics products, vehicle technologies, up-fitting, chrome accessories, and tires [3]

SAN ANTONIO, Texas, Dec. 03, 2024 (GLOBE NEWSWIRE) -- Rush Enterprises, Inc. (NASDAQ: RUSHA & RUSHB), which operates the largest network of commercial vehicle dealerships in North America, today announced that its Board of Directors approved a new stock repurchase program authorizing the Company to repurchase, from time to time, up to an aggregate of $150 million of its shares of Class A common stock, $.01 par value per share, and/or Class B common stock, $.01 par value per share. “I am pleased to announce ...

Sales Forecast - The company expects U.S. Class 8 retail truck sales to be 235,000 units in 2024, a 13.5% decrease compared to 2023, with an anticipated market share of 6.1% to 6.6%, resulting in approximately 14,500 to 15,500 new Class 8 truck sales [60]. - For U.S. Class 4 through 7 retail commercial vehicle sales, the forecast is 268,300 units in 2024, representing a 4.2% increase from 2023, with a market share of 5.0% to 5.4%, leading to approximately 13,500 to 14,500 new sales [61]. - The company expects to sell approximately 2,000 to 2,200 light-duty vehicles and 6,500 to 7,500 used commercial vehicles in 2024, with lease and rental revenue projected to remain flat compared to 2023 [62]. Revenue Performance - Revenues from Aftermarket Products and Services were slightly down year-over-year but improved compared to the second quarter, with expectations for flat to slightly down revenues in 2024 compared to 2023 [63]. - Total revenues decreased by $84.6 million, or 4.3%, in Q3 2024 compared to Q3 2023, primarily due to weak demand for Class 8 trucks [71]. - Aftermarket Products and Services revenues totaled $633.0 million in Q3 2024, down 1.6% from the previous year [72]. Profit Margins - The gross profit margin for new and used commercial vehicle sales was 29.0% in Q3 2024, down from 31.1% in Q3 2023, while Aftermarket products and services gross profit margin increased to 61.5% from 59.0% [67]. - Gross profit decreased by $15.4 million, or 3.6%, in Q3 2024, while gross profit as a percentage of sales increased to 20.0% [79]. - Gross margins from Aftermarket Products and Services decreased to 36.9% in the first nine months of 2024, down from 37.4% in the same period of 2023 [95]. Expenses and Costs - The company reported that administrative expenses as a percentage of total revenues decreased to 12.6% in Q3 2024 from 13.0% in Q3 2023 [66]. - SG&A expenses decreased by $17.4 million, or 6.8%, in Q3 2024, with SG&A as a percentage of total revenues at 12.6% [85]. - Net interest expense increased by $3.5 million, or 24.4%, in Q3 2024 due to higher vehicle inventory levels and elevated interest rates [86]. Inventory and Backlog - The company's backlog of commercial vehicle orders was approximately $1,332.9 million as of September 30, 2024, down from approximately $3,297.4 million a year earlier, reflecting decreased demand for new Class 8 trucks [123]. - The company anticipates filling most of its backlog orders during the remainder of 2024, despite the ongoing freight recession affecting demand [123]. Financing and Capital Expenditures - The company entered into a PLC Agreement for up to $375.0 million in revolving credit loans to finance capital expenditures, with a minimum balance requirement of $190.0 million [118]. - As of September 30, 2024, the company had approximately $1.0 billion outstanding under the Floor Plan Credit Agreement, with average daily borrowings of $975.8 million during the nine months ended September 30, 2024 [119]. - The company expects to purchase or lease commercial vehicles worth approximately $325.0 million to $350.0 million for its leasing operations during 2024 [103]. Market Conditions and Outlook - The company anticipates that declines in Aftermarket Products and Services revenues are behind them, expecting more normal market conditions starting in Q1 2025 [63]. - The company is exposed to market risk with total borrowings of $1,676.1 million as of September 30, 2024, with potential annual interest expense fluctuations of approximately $16.8 million for a 100 basis points change in interest rates [133]. - The company has transitioned its interest rate benchmarks from LIBOR to SOFR for certain agreements, impacting borrowing costs [119][122]. Operational Expansion - The company operates 124 franchised Rush Truck Centers across 23 states and has increased its equity interest in RTC Canada to 80%, which operates 15 International dealership locations [58]. - The company plans to continue expanding its dealership network through strategic acquisitions and new dealership openings to better serve customers [59]. Environmental Compliance - The company is subject to various environmental regulations that may impact operational costs and compliance requirements [126].

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