Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________________ to _______________________ Commission File Number 0-20797 RUSH ENTERPRISES, INC. (Exact name of registrant as spec ...

Financial Data and Key Metrics Changes - The company reported third quarter revenues of $2 billion and net income of $80.3 million, translating to $0.96 per diluted share, with a cash dividend declared at $0.17 per common share [2][4] - The aftermarket parts, service, and body shop revenues were $643.6 million, reflecting a growth of 3.5% [23] Business Line Data and Key Metrics Changes - New Class 8 truck sales reached 4,326 units, capturing 6.1% of the US market and 2.1% in Canada, with ongoing pent-up demand due to previous production limitations [3][24] - Class 4-7 new truck sales totaled 3,244 units, representing 4.8% of the US market and 2.3% in Canada, with solid demand across various segments [24] - Used truck sales amounted to 1,797 units, up 1.9% year-over-year, although used truck values continued to decline at an accelerated rate [94] Market Data and Key Metrics Changes - The company noted that low freight rates are impacting smaller operators, but there is strong pent-up demand for new trucks due to limited production in prior years [3][4] - The Class 8 truck market is expected to see a 22% decline in sales according to ACT Research, while the company believes it can perform better than this forecast [70][77] Company Strategy and Development Direction - The company is focusing on expanding its service business, with plans to increase its technician workforce from 650 to 1,000 [31] - The company aims to return 35% to 40% of shareholder returns through dividends and stock buybacks, with a commitment to spend $150 million on buybacks this year [17][18] - The company is optimistic about its long-term growth strategy, particularly in the service sector and national accounts, despite anticipated challenges in truck sales [30][33] Management's Comments on Operating Environment and Future Outlook - Management expects typical seasonal softness in the fourth quarter but believes financial results will align with those of the third quarter [4][66] - The company is closely monitoring economic factors affecting customers, particularly over-the-road carriers, and anticipates a tougher year ahead [16][69] - Management expressed confidence in navigating current market challenges, emphasizing the importance of a diversified customer base [80][82] Other Important Information - The company is maintaining lower than normal inventory levels for used trucks due to weak demand and is well-positioned to handle market conditions [94] - The company is optimistic about the potential for growth in the service business, despite a slowdown in parts and service revenue growth [16][65] Q&A Session Summary Question: What is the outlook for the used truck market? - Management indicated that the used truck market is facing challenges due to low demand from small operators, but they expect normalization in pricing over the next six months [35][36] Question: How is the company positioned with Cummins engines? - The company highlighted its strong relationship with Cummins and its position as a major distributor, anticipating growth in parts profitability with new engine introductions [7][74] Question: What are the expectations for Class 8 truck sales? - Management acknowledged a forecasted decline in Class 8 truck sales but expressed confidence in outperforming the market due to a diversified customer base [70][77] Question: How sustainable is the earnings power going forward? - Management believes that earnings will remain stable, with expectations for continued performance similar to the third quarter, despite anticipated challenges [60][76]

Part I [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Rush Enterprises, Inc.'s unaudited consolidated financial statements for Q2 and H1 2023, encompassing balance sheets, income statements, comprehensive income, shareholders' equity, and cash flows [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) The balance sheet as of June 30, 2023, shows total assets increased to **$4.13 billion** from **$3.82 billion**, with liabilities rising to **$2.24 billion** from **$2.06 billion**, and shareholders' equity growing to **$1.89 billion** from **$1.76 billion** Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2023 (unaudited) | December 31, 2022 | | :--- | :--- | :--- | | **Total Current Assets** | $2,087,795 | $1,867,743 | | Inventories, net | $1,637,321 | $1,429,429 | | **Total Assets** | **$4,126,321** | **$3,821,066** | | **Total Current Liabilities** | $1,620,845 | $1,428,674 | | Floor plan notes payable | $1,125,373 | $933,203 | | **Total Liabilities** | $2,239,036 | $2,058,044 | | **Total Shareholders' Equity** | **$1,887,285** | **$1,763,022** | [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) Q2 2023 total revenues increased to **$2.00 billion** from **$1.79 billion**, but net income attributable to the company decreased to **$98.3 million** from **$110.2 million**, with diluted EPS falling to **$1.75** from **$1.92** Q2 & H1 2023 Financial Performance (in thousands, except per share amounts) | Metric | Q2 2023 | Q2 2022 | Y/Y Change | H1 2023 | H1 2022 | Y/Y Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $2,003,052 | $1,791,241 | +11.8% | $3,914,819 | $3,354,443 | +16.7% | | Gross Profit | $413,848 | $374,216 | +10.6% | $812,617 | $719,656 | +12.9% | | Operating Income | $142,859 | $135,023 | +5.8% | $270,635 | $242,522 | +11.6% | | **Net Income (to Co.)** | $98,275 | $110,227 | -10.8% | $188,730 | $202,680 | -6.9% | | **Diluted EPS** | $1.75 | $1.92 | -8.9% | $3.35 | $3.52 | -4.8% | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For H1 2023, net cash from operating activities significantly increased to **$114.0 million**, while cash used in investing activities rose to **$188.9 million**, and cash from financing activities decreased to **$65.7 million**, resulting in a **$9.2 million** overall decrease in cash Six Months Ended June 30 Cash Flow Summary (in thousands) | Cash Flow Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $114,016 | $58,179 | | Net cash used in investing activities | ($188,946) | ($94,194) | | Net cash provided by financing activities | $65,704 | $104,563 | | **Net (decrease) increase in cash** | **($9,226)** | **$68,548** | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section details accounting policies and financial statement items, including the company's single **"Truck Segment"** operation, increased **authorized shares**, and a subsequent **three-for-two stock split** declared in July 2023 - The company operates as a **single reportable business segment**, the Truck Segment, providing an integrated one-stop source for commercial vehicle needs[37](index=37&type=chunk) - On May 16, 2023, shareholders approved an increase in **authorized shares** of Class A Common Stock to **105,000,000** and Class B Common Stock to **35,000,000**[26](index=26&type=chunk) - On July 25, 2023, the Board of Directors declared a **three-for-two stock split**, payable as a stock dividend on August 28, 2023[56](index=56&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses strong Q2 2023 revenue growth to **$2.0 billion** driven by commercial vehicle sales, despite a net income decline, while maintaining a positive 2023 outlook with strong liquidity and an increased order backlog [Outlook](index=18&type=section&id=Outlook) Management forecasts a **5.2% increase** in U.S. Class 8 truck sales and **6.2% increase** for Class 4-7 vehicles in 2023, projecting **16,500-18,000 new Class 8 truck sales** and **10-15% lease and rental revenue growth**, despite softening aftermarket demand - A.C.T. Research forecasts U.S. Class 8 retail truck sales to be **272,600 units** in 2023, a **5.2% increase** from 2022[64](index=64&type=chunk) - The company expects to sell approximately **16,500 to 18,000 new Class 8 trucks** in the U.S. and **11,500 to 13,000 new Class 4-7 commercial vehicles** in 2023[64](index=64&type=chunk)[65](index=65&type=chunk) - Lease and rental revenue is projected to increase by **10% to 15%** in 2023 compared to 2022[66](index=66&type=chunk) [Results of Operations](index=19&type=section&id=Results%20of%20Operations) Q2 2023 revenues rose **11.8%** to **$2.0 billion**, driven by vehicle and aftermarket sales, with gross profit up **10.6%**, though income before taxes fell **6.9%** due to a prior-year gain, and the absorption ratio improved to **139.7%** Q2 2023 vs Q2 2022 Revenue Breakdown (in millions) | Revenue Source | Q2 2023 | Q2 2022 | % Change | | :--- | :--- | :--- | :--- | | New and used commercial vehicle sales | $1,250.8 | $1,098.3 | +13.9% | | Aftermarket products and services sales | $651.1 | $598.3 | +8.8% | | Lease and rental sales | $88.5 | $80.5 | +9.9% | | **Total revenues** | **$2,003.1** | **$1,791.2** | **+11.8%** | Vehicle Unit Sales (Q2 2023 vs Q2 2022) | Vehicle Type | Q2 2023 | Q2 2022 | % Change | | :--- | :--- | :--- | :--- | | New heavy-duty (Class 8) | 4,300 | 4,168 | +3.2% | | New medium-duty (Class 4-7) | 3,477 | 2,815 | +23.5% | | Used vehicles | 1,869 | 1,629 | +14.7% | - The dealership absorption ratio, a key performance metric, improved to **139.7%** in Q2 2023 from **136.4%** in Q2 2022[74](index=74&type=chunk) - Net interest expense increased by **286.3%** in Q2 2023 compared to Q2 2022, driven by higher inventory levels and rising interest rates on variable-rate debt[93](index=93&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2023, the company had **$467.0 million** in working capital, including **$191.9 million** cash, supported by various credit facilities, and is executing a **$150 million** stock repurchase program and capital expenditures - The company had working capital of approximately **$467.0 million**, including **$191.9 million** in cash, as of June 30, 2023[110](index=110&type=chunk) - A stock repurchase program authorizing up to **$150.0 million** was approved in December 2022, with **$71.4 million** of shares repurchased under this program as of June 30, 2023[116](index=116&type=chunk) - On July 25, 2023, the Board declared a **three-for-two stock split** and a quarterly cash dividend of **$0.17 per share** on a post-split basis, a **21.4% increase**[115](index=115&type=chunk) [Backlog](index=29&type=section&id=Backlog) The commercial vehicle order backlog increased to approximately **$4.04 billion** as of June 30, 2023, up from **$3.68 billion** year-over-year, driven by strong demand and production constraints, with a risk of cancellation for extended fulfillment times - The backlog of commercial vehicle orders was approximately **$4,041.6 million** on June 30, 2023, an increase from **$3,682.9 million** on June 30, 2022[132](index=132&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk on **$1.37 billion** of variable-rate debt as of June 30, 2023, where a **100-basis-point** change could impact annual interest expense by approximately **$13.7 million** - The company is exposed to interest rate risk on **$1,370.7 million** of variable-rate debt as of June 30, 2023[143](index=143&type=chunk) - A **100 basis point (1%) change** in interest rates (SOFR, CDOR, or prime rate) would result in an approximate **$13.7 million** change in annual interest expense[143](index=143&type=chunk) [Item 4. Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of quarter-end, with no material changes to internal control over financial reporting during Q2 2023 - The principal executive officer and chief financial officer concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[144](index=144&type=chunk) - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, these controls[145](index=145&type=chunk) Part II [Item 1. Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary course litigation, but management believes no pending claims are reasonably likely to have a material adverse effect on its financial position or results of operations - The company believes no pending litigation will have a material adverse effect on its financial position or results of operations[146](index=146&type=chunk) [Item 1A. Risk Factors](index=31&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the company's risk factors as previously disclosed in its 2022 Annual Report on Form 10-K - There has been no material change in the company's risk factors as disclosed in the 2022 Annual Report on Form 10-K[148](index=148&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=31&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company made no unregistered equity sales in Q2 2023, repurchasing **721,981 shares** of common stock, with approximately **$78.6 million** remaining available under the current repurchase program as of June 30, 2023 Stock Repurchase Activity (Q2 2023) | Period | Total Shares Purchased | Average Price Paid Per Share | Dollar Value Remaining in Plan | | :--- | :--- | :--- | :--- | | April 2023 | 196,525 | $54.62 | $108,179,816 | | May 2023 | 306,752 | $53.00 | $91,912,675 | | June 2023 | 218,704 | $60.77 | $78,614,929 | | **Total Q2** | **721,981** | - | **$78,614,929** | [Item 5. Other Information](index=32&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, terminated, or modified a Rule 10b5-1 trading arrangement during Q2 2023 - No directors or officers adopted, terminated, or modified a Rule 10b5-1 trading arrangement during the three months ended June 30, 2023[152](index=152&type=chunk)

Financial Data and Key Metrics Changes - The company achieved second quarter revenues of $2 billion and net income of $98.3 million, equating to $1.75 per diluted share [46] - The aftermarket revenue growth was 8.9%, with parts, service, and body shop revenues reaching $651 million [47] - The absorption ratio reached a record 139.7% [47] Business Line Data and Key Metrics Changes - Class 8 truck sales totaled 4,300 units, representing 5.7% of the U.S. market and 1.8% of the Canadian market [48] - Class 4-7 new truck sales increased by 25% year-over-year, reaching 3,477 units, accounting for 5.2% of the U.S. market and 2.6% of the Canadian market [49] - Used truck sales reached 1,869 units, up 14.7% year-over-year [50] Market Data and Key Metrics Changes - The overall market for aftermarket growth was impacted by economic factors such as high interest rates and low freight rates, particularly affecting small over-the-road carriers [18] - ACT Research forecasts U.S. Class 8 retail sales to be 272,600 in 2023, up 5.1% compared to 2022, while Class 4-7 retail sales are expected to be 248,150 units, up 6.2% from 2022 [24][25] Company Strategy and Development Direction - The company is focused on expanding its aftermarket offerings and supporting large national accounts, which is expected to sustain strong aftermarket revenues [23] - The company plans to continue adding service technicians, particularly mobile technicians, as part of its long-term strategy [23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining strong financial results despite moderating aftermarket growth due to economic factors [51] - The company anticipates that new truck supply will meet pent-up demand for commercial vehicles by the end of the year [51] - Management noted that the over-the-road business is currently at a low point but expects a gradual recovery in the coming year [70] Other Important Information - The company declared a three-for-two stock split and a post-split cash dividend of $0.17 per common share, a 21.4% increase from the previous quarterly dividend [46] - Used truck values remain low, but pricing has begun to stabilize [26] Q&A Session Summary Question: Thoughts on pricing and emission standards for 2024 - Management indicated that pricing increases are expected primarily in CARB-compliant states, with potential price increases of $20,000 or more for diesel trucks by 2026-2027 [31][56] Question: Margins for new and used truck sales - Management reported that used truck margins have improved to 11%, and they do not foresee a significant decline in margins despite potential market downturns [58][60] Question: Observations on the vocational market and overall economy - Management noted that larger carriers are managing through economic challenges better than smaller carriers, and the overall local economy appears stable [68][70] Question: Expectations for parts and service revenue growth - Management expects mid-single-digit growth rates for parts and service revenue in the upcoming quarters, with a focus on taking market share [80][81] Question: Control of SG&A expenses going into 2024 - Management emphasized improved expense management and discipline, which they believe will help navigate any cyclicality in the market [90][91]

```markdown [PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The company's financial statements for the quarter ended **March 31, 2023**, show an increase in total assets to **$3.97 billion** from **$3.82 billion** at year-end **2022**. Total revenues for the quarter grew to **$1.91 billion**, up from **$1.56 billion** in the prior-year period, driven by strong commercial vehicle sales. However, net income remained relatively flat at **$90.8 million** compared to **$92.5 million** in Q1 **2022**, with diluted EPS also holding steady at **$1.60**. Cash flow from operations increased significantly to **$92.5 million** [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) As of **March 31, 2023**, total assets increased to **$3.97 billion**, driven by rises in inventories and property and equipment. Total liabilities also grew to **$2.14 billion**, primarily due to higher floor plan notes payable. Shareholders' equity increased to **$1.83 billion** Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total Current Assets** | $1,973,952 | $1,867,743 | | Inventories, net | $1,498,948 | $1,429,429 | | **Total Assets** | **$3,969,552** | **$3,821,066** | | **Total Current Liabilities** | $1,513,077 | $1,428,674 | | Floor plan notes payable | $1,015,971 | $933,203 | | **Total Liabilities** | $2,140,016 | $2,058,044 | | **Total Shareholders' Equity** | **$1,829,536** | **$1,763,022** | [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) For the three months ended **March 31, 2023**, total revenue increased by **22.3%** year-over-year to **$1.91 billion**, primarily due to a **24.2%** rise in new and used commercial vehicle sales. Despite higher revenues, net income attributable to the company was slightly down at **$90.5 million** compared to **$92.5 million** in the prior-year quarter, with diluted EPS remaining unchanged at **$1.60** Consolidated Statements of Income (in thousands, except per share data) | Metric | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Total Revenue | $1,911,767 | $1,563,202 | | Gross Profit | $398,769 | $345,440 | | Operating Income | $127,776 | $107,499 | | Net Income | $90,790 | $92,453 | | Net Income attributable to Rush Enterprises, Inc. | $90,455 | $92,453 | | Diluted EPS | $1.60 | $1.60 | | Dividends declared per common share | $0.21 | $0.19 | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the first quarter of **2023**, net cash provided by operating activities was **$92.5 million**, a significant increase from **$34.6 million** in Q1 **2022**. Net cash used in investing activities rose to **$95.5 million**, mainly for property and equipment acquisitions. Financing activities provided **$28.3 million** in cash, down from **$43.1 million** in the prior year. The company ended the quarter with **$226.3 million** in cash and cash equivalents Consolidated Cash Flows (in thousands) | Cash Flow Activity | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $92,466 | $34,585 | | Net cash used in investing activities | ($95,514) | ($16,290) | | Net cash provided by financing activities | $28,294 | $43,085 | | **Net increase in cash and cash equivalents** | **$25,246** | **$61,380** | | **Cash and cash equivalents, end of period** | **$226,292** | **$209,526** | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes clarify that the company operates primarily in a single reportable business segment, the Truck Segment. On **May 2, 2022**, the company increased its equity interest in Rush Truck Centres of Canada Limited (RTC Canada) to a controlling **80%**, and its results are now consolidated. Revenue is disaggregated, showing commercial vehicle sales as the largest contributor. The company also details its accounting for leases, credit losses, and acquisitions - The company operates as a **single reportable business segment**, the **Truck Segment**, which includes a network of commercial vehicle dealerships providing sales, aftermarket parts, service, and financial services[33](index=33&type=chunk) - On **May 2, 2022**, the company acquired an additional **30% equity interest** in RTC Canada, bringing its total to an **80% controlling interest**. Consequently, RTC Canada's financial results are consolidated into the company's statements from that date forward[50](index=50&type=chunk)[54](index=54&type=chunk)[60](index=60&type=chunk) Disaggregated Revenue by Source (in thousands) | Revenue Source | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Commercial vehicle sales revenue | $1,161,725 | $935,719 | | Parts revenue | $384,418 | $330,645 | | Commercial vehicle repair service revenue | $263,808 | $212,618 | | Finance revenue | $3,508 | $4,462 | | Insurance revenue | $3,063 | $3,063 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a strong Q1 **2023** with a **22.3%** revenue increase driven by robust demand for new commercial vehicles and the consolidation of RTC Canada. The company forecasts continued growth in aftermarket services and lease/rental revenues for **2023**. Gross profit margins decreased slightly due to a shift in sales mix towards lower-margin vehicle sales. The company maintains a solid liquidity position with **$460.9 million** in working capital and is actively managing capital allocation through facility investments, dividends, and stock repurchases. The order backlog remains high at **$4.2 billion**, though it carries cancellation risk [Outlook](index=17&type=section&id=Outlook) The company projects stable U.S. Class 8 truck sales for **2023**, while Class 4-7 sales are expected to increase by **8.6%**. Management anticipates growth in both Aftermarket Products and Services revenue (**9-12%**) and Lease and Rental revenue (**9-11%**), supported by strong demand and the consolidation of RTC Canada. Projections are subject to risks from manufacturer supply chains, inflation, and rising interest rates 2023 Full Year Outlook | Metric | Forecast | YoY Change vs 2022 | | :--- | :--- | :--- | | U.S. Class 8 Truck Sales (A.C.T. Research) | 259,018 units | -0.1% | | U.S. Class 4-7 Vehicle Sales (A.C.T. Research) | 253,600 units | +8.6% | | Company Aftermarket Revenue Growth | 9% to 12% | N/A | | Company Lease and Rental Revenue Growth | 9% to 11% | N/A | - The company expects its U.S. market share for new Class 8 trucks to be between **6.2%** and **6.8%** and for new Class 4-7 vehicles to be between **4.5%** and **5.1%** in **2023**[62](index=62&type=chunk)[63](index=63&type=chunk) [Results of Operations](index=18&type=section&id=Results%20of%20Operations) In Q1 **2023**, total revenues rose **22.3%** to **$1.91 billion**, driven by a **28.6%** increase in new vehicle unit sales. Aftermarket revenues also grew **19.3%**. However, used vehicle unit sales declined **29.7%**. Gross profit increased **15.4%** to **$53.3 million**, but the gross margin percentage fell from **22.1%** to **20.9%** due to a higher mix of lower-margin vehicle sales. A significant **801%** increase in net interest expense, driven by higher rates and inventory levels, contributed to a slight decrease in income before taxes Vehicle Unit Sales - Q1 2023 vs Q1 2022 | Vehicle Type | Q1 2023 Units | Q1 2022 Units | % Change | | :--- | :--- | :--- | :--- | | New heavy-duty vehicles | 4,365 | 3,528 | 23.7% | | New medium-duty vehicles | 3,038 | 2,141 | 41.9% | | Total new vehicle unit sales | 7,907 | 6,150 | 28.6% | | Used vehicles | 1,684 | 2,395 | (29.7%) | - Total revenues increased by **$348.6 million (22.3%)** in Q1 **2023**, primarily due to strong demand for new commercial vehicles and the consolidation of RTC Canada[74](index=74&type=chunk) - Gross profit as a percentage of sales decreased to **20.9%** from **22.1%** YoY, as lower-margin commercial vehicle sales grew as a percentage of total revenues[84](index=84&type=chunk) - Net interest expense increased by **$9.8 million (801.0%)** in Q1 **2023** compared to Q1 **2022**, due to higher inventory levels and rising interest rates on variable-rate debt[94](index=94&type=chunk) [Liquidity and Capital Resources](index=22&type=section&id=Liquidity%20and%20Capital%20Resources) The company ended Q1 **2023** with a strong liquidity position, holding **$460.9 million** in working capital, including **$226.3 million** in cash. Capital allocation plans for **2023** include **$170-180 million** for leasing operations and **$35-40 million** for recurring capital expenditures. The company continues its capital return program, paying a **$0.21 per share** dividend in Q2 **2023** and repurchasing **$31.1 million** of stock under its **$150 million** authorization as of **March 31, 2023** - As of **March 31, 2023**, the company had working capital of approximately **$460.9 million**, including **$226.3 million** in cash[98](index=98&type=chunk) - Planned capital expenditures for **2023** include **$170.0 million to $180.0 million** for leasing operations and **$35.0 million to $40.0 million** for recurring items[102](index=102&type=chunk) - A new stock repurchase program authorizing up to **$150.0 million** was approved on **December 2, 2022**. As of **March 31, 2023**, **$31.1 million** had been repurchased[105](index=105&type=chunk) - The Board of Directors declared a quarterly cash dividend of **$0.21 per share**, payable on **June 9, 2023**[104](index=104&type=chunk) [Backlog](index=26&type=section&id=Backlog) The company's backlog of commercial vehicle orders increased to approximately **$4.2 billion** as of **March 31, 2023**, up from **$3.4 billion** a year prior. This increase reflects strong demand and manufacturer production constraints. Management notes that while orders are confirmed, they are subject to cancellation, and the extended fulfillment time increases this risk, especially given potential industry headwinds - The backlog of commercial vehicle orders was approximately **$4,209.9 million** on **March 31, 2023**, compared to **$3,441.4 million** on **March 31, 2022**[122](index=122&type=chunk) - Management cautions that the longer it takes to fill the backlog, the greater the risk that a significant number of orders could be cancelled due to potential industry headwinds like lower spot rates and higher interest rates[122](index=122&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is primarily exposed to market risk from interest rate fluctuations on its variable-rate debt, including floor plan financing and credit agreements. As of **March 31, 2023**, the company had **$1.28 billion** in such borrowings. A hypothetical **100 basis point (1%)** change in interest rates would result in an approximate **$12.8 million** change in annual interest expense - The company's primary market risk is interest rate changes affecting its variable-rate debt, which is based on LIBOR, CDOR, SOFR, and the prime rate[134](index=134&type=chunk) - As of **March 31, 2023**, with **$1,278.4 million** in outstanding variable-rate borrowings, a **100 basis point (1%)** change in interest rates would impact annual interest expense by approximately **$12.8 million**[134](index=134&type=chunk) [Item 4. Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of **March 31, 2023**. There were no material changes to the company's internal control over financial reporting during the quarter - The principal executive officer and chief financial officer concluded that the company's disclosure controls and procedures were effective as of **March 31, 2023**[135](index=135&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[136](index=136&type=chunk) [PART II. OTHER INFORMATION](index=28&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=28&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary course of business litigation from time to time. Management believes there are no pending claims or litigation as of **March 31, 2023**, that are reasonably likely to have a material adverse effect on its financial position or results of operations - As of **March 31, 2023**, the company believes there are no pending legal proceedings that are reasonably likely to have a material adverse effect on its financial position or results[137](index=137&type=chunk) [Item 1A. Risk Factors](index=28&type=page&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended **December 31, 2022** - There has been no material change in the company's risk factors from those disclosed in the **2022** Annual Report on Form 10-K[139](index=139&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=29&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not make any unregistered sales of equity securities in Q1 **2023**. Under its stock repurchase program, the company repurchased a total of **471,018 shares** for approximately **$25.5 million** during the quarter. As of **March 31, 2023**, approximately **$118.9 million** remained available for future repurchases under the program Stock Repurchase Activity - Q1 2023 | Period | Total Shares Purchased | Average Price Paid Per Share | Total Cost (Approx.) | | :--- | :--- | :--- | :--- | | Jan 2023 | 133,505 | $52.02 | $6.9M | | Feb 2023 | 49,843 | $56.78 | $2.8M | | Mar 2023 | 287,670 | $53.85 | $15.5M | | **Total** | **471,018** | **N/A** | **$25.2M** | - As of **March 31, 2023**, approximately **$118.9 million** remained available for repurchase under the company's stock repurchase program[142](index=142&type=chunk) [Item 6. Exhibits](index=30&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate governance documents, CEO and CFO certifications as required by the **Sarbanes-Oxley Act**, and XBRL data files - The report includes CEO and CFO certifications pursuant to **Sections 302 and 906** of the **Sarbanes-Oxley Act**[144](index=144&type=chunk) [Signatures](index=31&type=section&id=SIGNATURES) The report is duly signed and authorized by W.M. "Rusty" Rush, President, CEO, and Chairman of the Board, and Steven L. Keller, Chief Financial Officer and Treasurer, on **May 10, 2023** - The report was signed on **May 10, 2023**, by the company's Principal Executive Officer and Principal Financial Officer[148](index=148&type=chunk) ```

April 2023 expect expect more. This presentation may contain forward-looking statements (as defined in the Private Securities Litigation Reform Act 1995). Any forward-looking statements are based on current expectations with respect to important risk factors. It is important to note that our actual results could materially differ from the results anticipated in any forward-looking statements that may be contained in this presentation. Important factors that could cause actual results to differ materially fr ...

Financial Data and Key Metrics Changes - The company reported first-quarter revenues of $1.9 billion and net income of $90.5 million, translating to $1.60 per diluted share [28] - Parts service and body shop revenues increased to $648 million, up 19.3% year-over-year, with an absorption ratio of 136.5% [6][28] - Lease and rental revenue rose by 21.5% compared to the first quarter of 2022, indicating strong demand for leased vehicles [31] Business Line Data and Key Metrics Changes - Class 8 truck sales reached 4,365 units, capturing 6.4% of the US market and 2.2% in Canada, with a strong backlog expected to maintain sales levels [3] - Class 4-7 new truck sales totaled 3,038 units, representing 5.3% of the US market and 3.2% in Canada, with healthy demand across various segments [7] - Used truck sales declined to 1,684 units, down 29.7% year-over-year, attributed to increased new truck production [8] Market Data and Key Metrics Changes - ACT Research forecasts US Class 4-7 retail sales to be 253,600 units in 2023, an increase of 8.6% from 2022 [30] - The company anticipates that the overall financial results will remain strong through the rest of 2023, despite potential economic impacts [9] Company Strategy and Development Direction - The company is focusing on expanding its mobile service presence and supporting large national fleets, which is expected to drive aftermarket revenue growth [29][41] - Strategic initiatives have improved the quality of earnings and increased the absorption rate, indicating effective expense management [18][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the parts and service business, expecting continued growth despite potential moderation due to inflation [11][25] - The company plans to maintain a strong focus on long-term initiatives, including workforce expansion to support mobile services [29] Other Important Information - The company has increased its stock buyback program to $150 million, with approximately $40 million executed since approval [23][38] - Management highlighted the importance of leveraging a large network to service customers effectively, even those who do not purchase trucks [55] Q&A Session Summary Question: Thoughts on parts and service growth for the remainder of the year - Management believes growth will moderate slightly but still expects to close the year in double digits [12] Question: Expected trend in SG&A and interest expense - SG&A is expected to stabilize in Q2, with interest expenses remaining similar to Q1 levels [15][16] Question: Market perception of valuation multiples - Management feels the market does not fully understand the strategic execution and quality of earnings improvements [17][18] Question: Progression of parts and service business - Management noted strong performance driven by strategic initiatives and a diverse customer base [39][41] Question: Economic outlook across different regions - Management reported strong performance in Florida, Texas, and California, with no weak spots identified [44][58]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 ☐ TRANSITION REPORT PURSANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 0-20797 RUSH ENTERPRISES, INC. (Exact name of registrant as specified in its charter) Texas 74-1733016 (State or other juri ...

Rush Enterprises, Inc. (NASDAQ:RUSHA) Q4 2022 Earnings Conference Call February 16, 2023 10:00 AM ET Company Participants Marvin Rush - Chairman, CEO & President Steven Keller - CFO & Treasurer Conference Call Participants Justin Long - Stephens Inc. Operator Good day, and thank you for standing by. Welcome to the Rush Enterprises Reports Fourth Quarter and Year-end 2022 Earnings Results. [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the confe ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________________ to _______________________ Commission File Number 0-20797 RUSH ENTERPRISES, INC. (Exact name of registrant as specified ...