Financial Data and Key Metrics Changes - The company reported first-quarter revenues of $1.6 billion and net income of $93 million, translating to $1.60 per diluted share [5] - A cash dividend of $0.19 per common share was declared [5] Business Line Data and Key Metrics Changes - Aftermarket revenues reached $543 million, up 30.7% year-over-year, with an absorption ratio of 136.3 [8] - New Class 8 truck sales totaled 3,528 units, capturing 6.9% of the total U.S. Class 8 market [10] - Class 4 through 7 new truck sales were 2,141 units, accounting for 3.7% of the U.S. market [12] - Used truck sales increased to 2,395 units, reflecting a 24.5% year-over-year growth [13] Market Data and Key Metrics Changes - The U.S. Class 8 retail sales forecast for 2022 is $244,500, up 7.5% from 2021 [11] - The forecast for U.S. Class 4 through 7 retail sales in 2022 is 263,000 units, an increase of 5.4% from 2021 [12] Company Strategy and Development Direction - The company plans to increase its investment in Rush Truck Centres of Canada Limited to 80%, enhancing support for cross-border transportation customers [14] - Continued focus on expense management is expected to maintain strong financial results throughout the year [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of parts and service demand, anticipating continued growth despite potential economic challenges [20][25] - The company is closely monitoring inflation, consumer spending, and interest rates, which may impact the industry [14] Other Important Information - The acquisition of 19 dealership locations from The Summit Truck Group positively impacted financial performance [7] - The company expects parts supply constraints to persist throughout the year, but demand for parts and service is anticipated to remain strong [9] Q&A Session Summary Question: Growth in parts and service - Management indicated that the 30% growth rate in parts and service was not entirely organic, with same-store growth around 18% year-over-year, and expects continued strong performance [20] Question: Performance in a freight recession - Management expects parts and service to perform well even in a freight recession, projecting mid-single-digit growth rates [25] Question: OE production trends - Management anticipates an increase in OE production as parts shortages lessen, with expectations for Q2 and Q4 deliveries to improve [27][29] Question: Class 8 market share strength - Management noted a market share of 6.9% in Class 8 trucks and expressed optimism about maintaining or improving this figure [36] Question: Sustainability of margins - Management acknowledged that while used truck margins may trend down, they expect to maintain strong performance in the near term [38][41] Question: Capital allocation strategy - Management indicated a commitment to returning 35% to 40% of earnings to shareholders through dividends and share repurchases, with plans to reassess this at the end of Q2 [68] Question: Market conditions outside freight - Management reported strong performance in construction and housing markets, particularly in Texas and Florida, while noting a disciplined approach in the oil and gas sector [73][74]

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, 2021 ☐ 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 | | --- | --- | ...

Financial Data and Key Metrics Changes - The company achieved annual revenues of $5.1 billion and net income of $241.4 million, or $4.17 per diluted share for the year 2021 [5] - In Q4 2021, revenues were $1.3 billion, with net income of $68.6 million, or $1.18 per diluted share [5] - The company declared a cash dividend of $0.19 per common share [5] Business Line Data and Key Metrics Changes - Annual parts, service, and body shop revenues were $1.8 billion, up 12.1% year-over-year, with an absorption rate of 129.8% [8] - New Class 8 truck sales reached 11,052 units, capturing 4.9% of the total U.S. Class 8 market [9] - Class 4-7 new truck sales totaled 10,485 units, representing 4.2% of the U.S. market [10] - Used truck sales were 7,527 units, up 1.7% year-over-year [10] Market Data and Key Metrics Changes - The company expects U.S. Class 8 retail sales to increase by 8.9% in 2022, with a forecast of 247,500 units [9] - The company anticipates continued strong demand for new trucks and aftermarket services due to economic recovery [8] Company Strategy and Development Direction - The company is focused on strategic initiatives, including network growth and expense management, to enhance revenue and profitability [5][8] - The acquisition of 17 full-service dealerships from Summit Truck Group is expected to strengthen the company's market position and service capabilities [6][24] - The company plans to integrate the Summit acquisition into its operations, enhancing parts and service offerings [24][26] Management's Comments on Operating Environment and Future Outlook - Management noted that supply constraints are likely to continue impacting the industry through mid-2022, but demand for trucks and aftermarket services remains strong [8] - The company is committed to managing expenses and expects general and administrative expenses to be higher in Q1 2022 compared to Q4 2021 [11] - Management expressed confidence in the company's ability to navigate inflationary pressures and maintain profitability [37][38] Other Important Information - The company added approximately 150 service technicians to its workforce in 2021 [8] - Management emphasized the importance of maintaining a strong balance sheet and cash position while returning value to shareholders [11] Q&A Session Summary Question: Can you talk about the potential positive signs in the energy sector for 2022? - Management noted a gradual pickup in parts and service from the oil and gas sector, but emphasized a disciplined approach to capital expenditures [15] Question: What are you seeing on the pricing front for new trucks and market share opportunities? - Management indicated that manufacturers are catching up to supply chain disruptions, leading to increased pricing, and expressed optimism about market share growth due to acquisitions [17][18] Question: What impact do you expect from the Summit acquisition in 2022? - Management is optimistic about the integration of the Summit acquisition and expects growth in parts and service sales, with high single-digit growth anticipated [27][28] Question: How do you manage costs in the current inflationary environment? - Management highlighted the importance of managing the spread between revenue and expenses, acknowledging the challenges posed by inflation [37][38] Question: What are your thoughts on the impact of higher interest rates on the economy? - Management noted that while there is concern about rising interest rates, business remains strong, particularly among larger companies with solid balance sheets [40][41]

Financial Performance - Total revenues increased by $88.0 million, or 7.5%, in Q3 2021 compared to Q3 2020[101] - Aftermarket Products and Services revenues totaled $463.0 million in Q3 2021, up 15.7% from Q3 2020[101] - Revenues from sales of new and used commercial vehicles increased by $17.6 million, or 2.5%, in Q3 2021 compared to Q3 2020[102] - Total revenues increased by $346.6 million, or 10.0%, in the first nine months of 2021 compared to the same period in 2020[122] - Gross profit increased by $158.6 million, or 24.8%, in the first nine months of 2021, with gross profit as a percentage of sales rising to 20.9% from 18.4%[127] Sales and Market Share - A.C.T. Research forecasts new U.S. Class 8 retail truck sales to be 228,500 units in 2021, representing a 16.8% increase compared to 2020[75] - The company expects to achieve a market share of new Class 8 truck sales between 5.0% and 5.2% in 2021, translating to approximately 11,400 to 11,900 units sold[76] - For new U.S. Class 4 through 7 retail commercial vehicle sales, A.C.T. Research forecasts 251,000 units in 2021, an 8.2% increase from 2020, with the company expecting a market share of 4.0% to 4.3%[77] - The company anticipates selling approximately 7,200 to 7,400 used commercial vehicles in 2021[78] Revenue Growth Projections - Lease and rental revenue is expected to increase by 5% to 7% in 2021 compared to 2020[78] - Aftermarket Products and Services revenues are projected to rise by 10% to 12% in 2021 compared to 2020[79] Acquisitions and Expansion - In October 2021, the company acquired an independent parts and service facility in Victorville, California, to be converted into a full-service Peterbilt dealership[80] - The company plans to acquire a full-service Hino and Isuzu dealership in Elk Grove, Illinois, in November 2021[80] - The company entered into an agreement to acquire full-service commercial vehicle dealerships and Idealease franchises in multiple states, with the transaction expected to close in December 2021[80] - The company entered into an Asset Purchase Agreement to acquire assets of Summit Truck Group for approximately $223.0 million, with $114.0 million expected to be financed at closing[143] Profitability and Margins - Gross profit increased by $69.8 million, or 32.9%, in Q3 2021 compared to Q3 2020, with gross profit as a percentage of sales rising to 22.3%[109] - Gross margins from Aftermarket Products and Services operations increased to 39.3% in Q3 2021, up from 35.4% in Q3 2020, with gross profit rising to $182.2 million from $141.9 million[110] - Gross margins on new Class 8 truck sales rose to 8.7% in Q3 2021, compared to 7.8% in Q3 2020, driven by strong demand[111] - Gross margins on new Class 4 through 7 commercial vehicle sales increased to 8.0% in Q3 2021, up from 5.9% in Q3 2020[112] - Gross margins on used commercial vehicle sales increased to 19.7% in Q3 2021, from 12.0% in Q3 2020, due to strong demand[113] - Gross margins from truck lease and rental sales increased to 25.1% in Q3 2021, up from 14.4% in Q3 2020, attributed to increased rental fleet utilization[114] Cash Flow and Financial Position - Cash flows from operating activities for the first nine months of 2021 provided net cash of $438.6 million, primarily from $172.8 million in net income and non-cash adjustments totaling $126.7 million[146] - As of September 30, 2021, the company had $259.7 million in cash, indicating strong liquidity[74] - Financing activities resulted in net cash used of $369.6 million in the first nine months of 2021, mainly due to $232.8 million for principal repayments of long-term debt[151] - The company has a Floor Plan Credit Agreement with an aggregate loan commitment of $1.0 billion, with approximately $333.7 million outstanding as of September 30, 2021[155] - The company expects to fund capital expenditures through operating cash flows and financing, with no other material commitments as of September 30, 2021[144] - The company anticipates using a new revolving credit agreement of up to $250.0 million for capital expenditures and working capital needs[153] Environmental and Regulatory Considerations - The California Air Resources Board adopted a rule to phase out diesel-powered commercial vehicles, requiring a percentage of new sales to be zero-emission vehicles starting in model year 2024[164] - A joint memorandum of understanding among fifteen U.S. states aims for 100% of new Class 3 through 8 commercial vehicles to be zero emission by 2030, with an interim target of 30% by 2030[164] - The company does not believe it currently has any material environmental liabilities that would adversely affect its financial condition or cash flows[165] - Soil and groundwater impacts are known to exist at some of the company's dealerships, which may lead to unforeseen environmental costs or liabilities[165] - Environmental laws and regulations are complex and subject to change, which could require additional expenditures that may adversely affect the company's operations[165] - The company does not anticipate that compliance with current environmental laws will have a material adverse effect on its results of operations[165] - Future legislation regarding greenhouse gas emissions may negatively impact the company's business operations[164] Interest Rate and Market Risks - The company is exposed to market risk through interest rates related to its financing agreements, primarily based on LIBOR[166] - An increase or decrease in LIBOR of 100 basis points could correspondingly increase or decrease annual interest expense by approximately $3.5 million[167]

Rush Enterprises, Inc. (NASDAQ:RUSHA) Q3 2021 Earnings Conference Call October 21, 2021 10:00 AM ET Company Participants Rusty Rush - Chairman, CEO and President Mike McRoberts - Chief Operating Officer Steve Keller - Chief Financial Officer Derrek Weaver - Executive Vice President Jay Hazelwood - Vice President and Controller Michael Goldstone - Vice President, General Counsel and Corporate Secretary Conference Call Participants Jamie Cook - Credit Suisse Justin Long - Stephens Andrew Obin - Bank of Amer ...

[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) This section presents the unaudited consolidated financial statements for Rush Enterprises, Inc. as of June 30, 2021, and for the three and six-month periods then ended [Consolidated Balance Sheets](index=4&type=page&id=Consolidated%20Balance%20Sheets) The Consolidated Balance Sheet as of June 30, 2021, shows a slight decrease in total assets to $2.91 billion from $2.99 billion at year-end 2020, primarily due to lower inventories and current debt. Total shareholders' equity increased to $1.36 billion from $1.27 billion, driven by retained earnings Balance Sheet Summary | Balance Sheet Items (In Thousands) | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Current Assets** | $1,306,280 | $1,357,726 | | Inventories, net | $813,773 | $858,291 | | **Total Assets** | **$2,912,124** | **$2,985,393** | | **Total Current Liabilities** | $928,811 | $1,026,794 | | Floor plan notes payable | $470,877 | $511,786 | | **Total Liabilities** | $1,551,925 | $1,717,356 | | **Total Shareholders' Equity** | **$1,360,199** | **$1,268,037** | [Consolidated Statements of Income and Comprehensive Income](index=5&type=page&id=Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) The company reported significant year-over-year growth for the three and six months ended June 30, 2021. For the second quarter, total revenue increased by 31.3% to $1.32 billion, and net income more than tripled to $58.0 million. Diluted EPS for the quarter rose to $1.00 from $0.30 in the prior-year period Income Statement Summary | Income Statement (In Thousands, Except Per Share) | Q2 2021 | Q2 2020 | YoY Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | $1,316,015 | $1,002,512 | +31.3% | | **Gross Profit** | $270,782 | $192,331 | +40.8% | | **Operating Income** | $72,791 | $23,001 | +216.5% | | **Net Income** | $58,044 | $16,816 | +245.2% | | **Diluted EPS** | $1.00 | $0.30 | +233.3% | Income Statement Summary | Income Statement (In Thousands, Except Per Share) | H1 2021 | H1 2020 | YoY Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | $2,547,821 | $2,289,175 | +11.3% | | **Gross Profit** | $515,596 | $426,832 | +20.8% | | **Operating Income** | $129,016 | $58,198 | +121.7% | | **Net Income** | $103,377 | $39,923 | +159.0% | | **Diluted EPS** | $1.79 | $0.72 | +148.6% | [Consolidated Statements of Cash Flows](index=8&type=page&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2021, net cash provided by operating activities was $237.7 million, a decrease from $418.2 million in the prior-year period, primarily due to a smaller decrease in inventories. Net cash used in financing activities also decreased significantly to $151.0 million from $309.9 million, mainly due to lower net payments on floor plan notes payable Cash Flow Summary | Cash Flows (In Thousands) | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $237,703 | $418,210 | | **Net cash used in investing activities** | ($82,879) | ($74,379) | | **Net cash used in financing activities** | ($150,961) | ($309,895) | | Net increase in cash and cash equivalents | $3,863 | $33,936 | | Cash and cash equivalents, end of period | $315,911 | $215,556 | [Notes to Consolidated Financial Statements](index=9&type=page&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail the basis of presentation, accounting policies, and segment information, with commercial vehicle sales as the largest revenue contributor - The company operates under a single reportable business segment, the Truck Segment, which includes a nationwide network of commercial vehicle dealerships providing integrated sales, aftermarket parts and service, and financial services[41](index=41&type=chunk) Disaggregated Revenue | Disaggregated Revenue (In Thousands) | Q2 2021 | Q2 2020 | | :--- | :--- | :--- | | Commercial vehicle sales revenue | $797,269 | $559,062 | | Parts revenue | $263,491 | $211,804 | | Commercial vehicle repair service revenue | $182,035 | $165,749 | | **Total (excluding lease/rental)** | **$1,254,619** | **$945,222** | - On September 15, **2020**, the company's Board of Directors declared a 3-for-2 stock split, which has been retroactively applied to all share and per-share data presented in this report[23](index=23&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, highlighting a significant recovery from the COVID-19 pandemic and strong demand for commercial vehicles and aftermarket services [Outlook](index=19&type=page&id=Outlook) The company provides a positive outlook for 2021, citing strong demand for new commercial vehicles. A.C.T. Research forecasts a 32.4% increase in U.S. Class 8 retail truck sales and an 11.0% increase for Class 4-7 vehicles. Rush anticipates growth in its Aftermarket Products and Services (8-10%) and lease and rental revenue (6-9%), though component supply chain issues could delay new vehicle deliveries into 2022 2021 Forecasts | 2021 Forecasts | Metric | Value/Range | | :--- | :--- | :--- | | **Industry Sales (A.C.T.)** | U.S. Class 8 Retail Sales | 259,000 units (+32.4% YoY) | | | U.S. Class 4-7 Retail Sales | 257,500 units (+11.0% YoY) | | **Company Market Share** | New Class 8 Trucks | 4.8% - 5.3% | | | New Class 4-7 Vehicles | 4.3% - 5.0% | | **Company Revenue Growth** | Aftermarket Products & Services | 8% - 10% YoY | | | Lease and Rental | 6% - 9% YoY | - Management believes that while demand for new commercial vehicles is strong, component supply chain issues could push the timing of deliveries into **2022**, potentially impacting industry sales forecasts for **2021**[69](index=69&type=chunk) [Results of Operations](index=23&type=page&id=Results%20of%20Operations) The company's results show significant improvement driven by the economic recovery. For Q2 2021, total revenues grew 31.3% YoY, with new and used vehicle sales up 42.6%. Gross profit margin expanded to 20.6% from 19.2%. The dealership absorption ratio, a key performance metric, improved to 129.1% from 110.2% in Q2 2020, indicating that aftermarket gross profit more than covered fixed overhead costs Vehicle Unit Sales | Vehicle Unit Sales | Q2 2021 | Q2 2020 | YoY Change | | :--- | :--- | :--- | :--- | | New heavy-duty vehicles | 2,954 | 1,866 | +58.3% | | New medium-duty vehicles | 2,825 | 2,333 | +21.1% | | Used vehicles | 2,094 | 1,768 | +18.4% | - The dealership absorption ratio, a key performance indicator, increased to **129.1%** in Q2 **2021** from **110.2%** in Q2 **2020**. This means gross profit from Aftermarket Products and Services covered all dealership overhead (excluding vehicle sales commissions and inventory costs)[95](index=95&type=chunk) Gross Margins by Product | Gross Margins by Product | Q2 2021 | Q2 2020 | | :--- | :--- | :--- | | Aftermarket Products & Services | 37.8% | 37.2% | | New Class 8 truck sales | 9.1% | 7.3% | | New Class 4-7 vehicle sales | 7.4% | 6.1% | | Used commercial vehicle sales | 17.4% | 5.4% | | Truck lease and rental sales | 21.2% | 10.1% | [Liquidity and Capital Resources](index=28&type=page&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2021, the company had strong liquidity with $377.5 million in working capital, including $315.9 million in cash. Total available liquidity was approximately $421.5 million. The company plans capital expenditures of $180-$215 million in 2021, primarily for its leasing operations and facility improvements. It also continues its shareholder return programs, including a quarterly dividend and a $100 million stock repurchase plan - Total net liquidity was approximately **$421.5 million** as of June 30, **2021**, comprising **$315.9 million** in cash and **$105.6 million** available under credit agreements[68](index=68&type=chunk)[131](index=131&type=chunk) - The company expects to purchase commercial vehicles worth **$150.0 to $180.0 million** for its leasing operations and make recurring capital expenditures of **$30.0 to $35.0 million** during **2021**[135](index=135&type=chunk) - A stock repurchase program authorizing up to **$100.0 million** was approved in December **2020**. As of June 30, **2021**, **$12.5 million** of shares had been repurchased under this program[137](index=137&type=chunk) [Backlog](index=31&type=page&id=Backlog) The company's backlog of commercial vehicle orders more than doubled year-over-year, indicating strong future demand. As of June 30, 2021, the backlog stood at approximately $2.26 billion, compared to $1.06 billion on the same date in 2020. These orders are expected to be filled during the remainder of 2021 and into 2022 Commercial Vehicle Backlog | Backlog of Commercial Vehicle Orders | Value | | :--- | :--- | | **June 30, 2021** | **$2,258.9 million** | | June 30, 2020 | $1,057.1 million | | **YoY Change** | **+113.7%** | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk exposure is to interest rates, particularly related to its floor plan financing agreements which are largely based on LIBOR. A hypothetical 100 basis point (1%) change in LIBOR would impact annual interest expense by approximately $4.7 million - The company is exposed to interest rate risk on its floor plan borrowings of approximately **$470.9 million**. A **100** basis point increase or decrease in LIBOR would result in a corresponding change in annual interest expense of about **$4.7 million**[160](index=160&type=chunk) [Item 4. Controls and Procedures](index=32&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 June 30, 2021. There were no material changes to 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 June 30, **2021**[161](index=161&type=chunk) - No changes in internal control over financial reporting occurred during the second quarter of **2021** that materially affected, or are reasonably likely to materially affect, internal controls[162](index=162&type=chunk) [PART II. OTHER INFORMATION](index=33&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary course litigation from time to time but believes there are no pending claims that could have a material adverse effect on its financial position or results of operations - The company states that it is not aware of any pending litigation that would have a material adverse effect on its financial position or results of operations[163](index=163&type=chunk) [Item 1A. Risk Factors](index=33&type=page&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's 2020 Annual Report on Form 10-K - No material changes have occurred in the company's risk factors since the filing of its **2020** Annual Report on Form 10-K[165](index=165&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=33&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 Q2 2021. It repurchased 98,975 shares of its Class B Common Stock during the quarter for a total of approximately $4.2 million under its publicly announced repurchase program Stock Repurchase Activity | Stock Repurchase Activity | Q2 2021 | | :--- | :--- | | **Total Shares Purchased** | 98,975 (Class B) | | **Total Cost** | ~$4.2 million | | **Remaining Authorization (as of June 30, 2021)** | $87,463,235 |

Rush Enterprises, Inc. (NASDAQ:RUSHA) Q2 2022 Earnings Conference Call July 21, 2021 10:00 AM ET Company Participants Rusty Rush - Chairman, President & Chief Executive Officer Steve Keller - Chief Financial Officer Conference Call Participants Jamie Cook - Credit Suisse Justin Long - Stephens Andrew Obin - Bank of America Merrill Lynch Joel Tiss - BMO Capital Markets Operator Ladies and gentlemen, thank you for standing by, and welcome to Rush Enterprises, Inc. reports Second Quarter 2021 Earnings Results. ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Exact name of registrant as specified in its charter) incorporation or organization) (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 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, IN ...

Financial Data and Key Metrics Changes - In Q1 2021, the company achieved revenues of $1.2 billion and net income of $45.3 million, translating to $0.79 per diluted share, with a cash dividend declared at $0.18 per common share [5][6] - The net income significantly increased compared to Q1 2020, driven by economic recovery and healthy demand across market segments [6] Business Line Data and Key Metrics Changes - Aftermarket product, service, and body shop revenues were $415.7 million, with an absorption ratio of 122.6%. However, aftermarket revenues decreased by 2.9% compared to Q1 2020 [8] - New Class 8 truck sales totaled 2,995 units, capturing 5.4% of the total U.S. Class 8 market, with strong demand from over-the-road, vocational, and construction customers [11] - Class 4 through 7 new truck sales were 2,334 units, accounting for 3.8% of the U.S. market, with a decline attributed to weak demand from leasing and rental customers [13] - Used truck sales increased by 23.5% year-over-year, totaling 1,924 units, driven by high demand due to new truck production constraints [15] Market Data and Key Metrics Changes - The U.S. Class 8 retail sales are forecasted to reach 249,000 units in 2021, up 27.2% from 2020, while Class 4 through 7 retail sales are expected to reach 251,500 units, up 8.4% from 2020 [12][14] - The company anticipates supply constraints affecting product availability in the industry for the next few quarters, but expects improvements in supply chain issues by late Q3 [7][10] Company Strategy and Development Direction - The company is focusing on expanding its technician workforce and service offerings, particularly in contract maintenance and preventive maintenance, to meet increasing aftermarket demand [10] - Management believes that the economic recovery and reopening of businesses will contribute to strong financial results throughout 2021 [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in strong financial results for 2021, despite anticipated supply chain constraints affecting parts and new truck availability [7] - The company is leveraging its nationwide inventory to mitigate supply impacts and is optimistic about demand for trucks and aftermarket services remaining strong [10] Other Important Information - The company has implemented tighter controls and learned from past experiences to manage expenses more effectively as it grows [32] - The tax rate for Q1 was 20%, but is expected to normalize to around 24.5% for the remainder of the year [39] Q&A Session Summary Question: What drove the margins in the first quarter on truck sales? - Management indicated that high used truck margins were a significant factor, with used truck prices up 30% to 35% compared to the previous year [20][21] Question: What are the supply chain shortages affecting the company? - Management noted various supply chain issues, including shortages of wiring harnesses and dash clusters, affecting production and parts availability [22][24] Question: Can you provide insights on the cost structure changes? - Management highlighted efforts to keep costs below historical levels by implementing tighter controls and learning from past experiences [30][32] Question: How did parts and service revenue trend throughout the quarter? - Management reported a gradual increase in parts and service revenue, with expectations to approach 2019 levels as the economy recovers [41][44] Question: What is the outlook for the fracking market? - Management indicated that while fracking has not shown significant recovery, there may be potential for growth in the future as oil consumption rises [58][60] Question: How have digital systems performed during COVID? - Management emphasized the importance of their digital systems in maintaining customer connectivity and driving revenue during the pandemic [63][66] Question: What is the outlook for the next few years regarding truck sales? - Management believes the upcoming regulatory changes and economic growth will support a multi-year upturn in truck sales [69][71]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) RUSH ENTERPRISES, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 555 IH 35 South, New Braunfels, TX 78130 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (830) 302-5200 Securities registered pursuant to Section 12(b) of the Act: | T ...