Rush Enterprises(RUSHA)

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Rush Enterprises(RUSHA) - 2021 Q3 - Earnings Call Transcript
2021-10-21 19:47
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 ...
Rush Enterprises(RUSHA) - 2021 Q2 - Quarterly Report
2021-08-06 17:54
[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(RUSHA) - 2021 Q2 - Earnings Call Transcript
2021-07-21 20:17
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. ...
Rush Enterprises(RUSHA) - 2021 Q1 - Quarterly Report
2021-05-07 17:30
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 ...
Rush Enterprises(RUSHA) - 2021 Q1 - Earnings Call Transcript
2021-04-22 19:23
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]
Rush Enterprises(RUSHA) - 2020 Q4 - Annual Report
2021-02-24 21:26
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 ...
Rush Enterprises(RUSHA) - 2019 Q3 - Earnings Call Transcript
2019-10-26 17:39
Financial Data and Key Metrics Changes - The company reported quarterly revenues of $1.6 billion and net income of $39.1 million, or $1.05 per diluted share, indicating a strong financial performance positively impacted by aftermarket initiatives [5][6] - The absorption ratio for the aftermarket was strong at 120%, reflecting effective management and strategic initiatives [6] Business Line Data and Key Metrics Changes - Aftermarket revenues from parts, service, and body shop reached $455 million, a 6.5% increase over Q3 2018 [6] - New Class 8 truck sales totaled 4,318 units, up 30% year-over-year, capturing 5.5% of the total U.S. Class 8 market [8] - Class 4 to 7 new truck sales reached 4,566 units, accounting for 6.5% of the U.S. market, marking a record-setting quarter [10] - Used truck sales decreased by 15% compared to Q3 2018, with inventory at its lowest level of the year [12] Market Data and Key Metrics Changes - The U.S. Class 8 retail sales forecast for 2019 is 277,300 units, with expectations of a decline to 204,000 units in 2020, a 26% drop [9] - The U.S. Class 4 to 7 sales forecast for 2019 is 266,000 units, up 3% from 2018, with a projected decline to 257,000 units in 2020, down 3% [11] Company Strategy and Development Direction - The company aims to continue outperforming the market in aftermarket revenues through strategic initiatives, including technology solutions and e-commerce platforms [7] - The company is focused on maintaining strong performance in the medium-duty truck market, which is expected to remain stable over the next few years [20] Management's Comments on Operating Environment and Future Outlook - Management noted significant headwinds from the energy sector, with activity down over 50%, impacting parts and service revenue [18] - The company is implementing G&A cost cuts, expecting to save a couple of million dollars per month starting in 2020 [20][26] - Management expressed confidence in achieving better results than in previous downturns due to strategic focus and operational improvements [45] Other Important Information - The company declared a quarterly cash dividend of $0.13 per common share [5] - The Tallman Group joint venture has grown by $100 million since its inception, with positive performance expected to continue [58] Q&A Session Summary Question: What was the energy headwind for parts and service revenue this quarter? - Management indicated that energy sector activity was down over 50%, significantly impacting performance, but noted that the company managed to perform well despite these challenges [18] Question: Any updates on G&A cost cuts? - Management confirmed that G&A cost cuts would phase into Q4, with expectations of saving a couple of million dollars per month starting in 2020 [20][26] Question: What are customers saying about order expectations? - Management noted that while there is uncertainty in the market, they expect order intake to improve gradually, but not to previous peak levels [41] Question: Can you comment on parts and service revenue performance on the Navistar side? - Management reported improvement in parts and service revenue performance, indicating that the negative impacts from low market share are behind them [54] Question: Any updates on the Tallman Group JV and M&A opportunities? - Management expressed satisfaction with the Tallman Group's performance and indicated that while there are strategic M&A opportunities, they are not ready to disclose specifics [58]
Rush Enterprises(RUSHA) - 2019 Q2 - Earnings Call Transcript
2019-07-28 20:18
Financial Data and Key Metrics Changes - The company reported quarterly revenues of $1.5 billion and net income of $41.6 million, translating to $1.10 per diluted share, reflecting strong financial performance driven by aftermarket initiatives and healthy economic conditions [7] - A quarterly cash dividend of $0.13 per common share was declared, representing an 8% increase over the last four quarters [8] Business Line Data and Key Metrics Changes - Aftermarket revenues increased by $448 million, up 6% year-over-year, with aftermarket gross profit rising 9% year-over-year and an absorption ratio of 122.4% [8][10] - New Class 8 truck sales reached 4,119 units, a 28% increase year-over-year, capturing 5.7% of the total U.S. Class 8 market [12] - Class 4-7 new truck sales hit 3,866 units, accounting for 5.5% of the U.S. market, marking a record-setting quarter for medium-duty truck sales [14] - Used truck sales were up 2% year-over-year, while lease and rental revenues increased by 4.4% compared to the same quarter in 2018 [15] Market Data and Key Metrics Changes - The U.S. Class 8 retail sales forecast for 2019 is 275,100 units, with expectations of a decline in Class 8 truck sales as early as the fourth quarter due to excess capacity in the market [13] - The U.S. Class 4-7 retail sales forecast for 2019 is 262,300 units, reflecting a 1.5% increase from 2018 [14] Company Strategy and Development Direction - The company aims to continue monitoring aftermarket industry demand while executing strategic initiatives to maintain consistent performance [11] - The management believes that diversification and strategic investments over the past few years have strengthened the company's resilience against market fluctuations, particularly in the energy sector [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving high-single-digit growth in parts and service revenue despite headwinds from the energy market, which saw a year-over-year downturn of approximately 35% [22][25] - The company anticipates that its balanced approach to market segments will allow it to outperform the industry during downturns, particularly with a higher mix of vocational sales [46][76] Other Important Information - The company has invested significantly in data analytics and service offerings to enhance operational efficiency and revenue generation [84][85] - Management noted that the average sales price and margins for used trucks are normalizing after a period of elevated values [95] Q&A Session Summary Question: Parts and service gross margins improvement - Management indicated that the improvement in gross margins is not expected to remain at record levels but anticipates continued growth in margins moving forward [19][20] Question: Impact of energy market on parts and service revenue - Management acknowledged a significant headwind from the energy sector but remains optimistic about achieving high-single-digit growth in parts and service revenue [21][22] Question: Percentage of aftermarket tied to energy - Management estimated that approximately 10% of overall aftermarket revenue is tied to the energy sector, with a more significant impact on service than parts [40] Question: Visibility on inventory and market conditions - Management noted that visibility is somewhat softer than expected but still solid, with the potential for adjustments in the fourth quarter [61][62] Question: General economic outlook and medium-duty market - Management expects softening in GDP but believes the medium-duty market will remain stable due to ongoing dynamics in the sector [87][90] Question: Gap between dealership profitability - Management reported that the profitability gap between the best and worst dealership locations is narrowing, with improvements seen in the Navistar stores [101]
Rush Enterprises(RUSHA) - 2019 Q1 - Earnings Call Transcript
2019-04-28 01:09
Financial Data and Key Metrics Changes - The company reported quarterly revenues of $1.3 billion, with a net income of $37 million or $0.98 per diluted share, reflecting strong financial performance driven by strategic initiatives and a robust economy [5] - Aftermarket gross profit margins increased to 37.7% from 36.4% year-over-year, indicating improved profitability in this segment [6] Business Line Data and Key Metrics Changes - Parts, service, and body shop revenues reached $438 million, up 9.5% from the first quarter of 2018, with aftermarket growth attributed to expanded offerings and increased operational hours [6] - New Class 8 truck sales increased by 7% year-over-year, totaling 3,558 units, representing 5.5% of the total U.S. Class 8 market [8] - Medium-duty truck sales (Class 4-7) reached 2,614 units, accounting for 4.2% of the U.S. market, with expectations for acceleration in sales throughout 2019 [9] Market Data and Key Metrics Changes - The energy sector experienced a 30% year-over-year decline in activity, yet overall aftermarket growth remained strong, with expectations for modest improvement in the energy sector later in the year [7] - The company noted that the U.S. Class 8 retail sales forecast for 2019 is 264,000 units, while Class 4-7 retail sales are expected to increase by 1.6% from 2018 [8][9] Company Strategy and Development Direction - The company is focused on strategic initiatives to enhance service offerings and operational efficiencies, including the expansion of its All-Makes Parts offerings and the acquisition of 50% equity in Rush Truck Centers of Canada [10] - Management emphasized the importance of diversifying beyond Class 8 trucks, highlighting the stability of the medium-duty market and the potential for growth in parts and service even amid a downturn in truck sales [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining growth in parts and service despite potential declines in Class 8 truck sales, citing the aging fleet as a driver for continued demand [20][22] - The company anticipates that the aftermarket activity will remain strong, with expectations for continued growth in parts and service even if truck sales decline [19][34] Other Important Information - The company declared a quarterly cash dividend of $0.12 per common share, reflecting its commitment to returning capital to shareholders [5] - Management acknowledged increased expenses due to employee benefits and payroll taxes but maintained a strong balance sheet to support future investments [10] Q&A Session Summary Question: Inquiry about parts and service gross margins - Management expects gross margins to continue trending higher, with potential for further improvement driven by service initiatives [14][15] Question: Sales cadence for Class 8 trucks - Management noted a slight adjustment in expectations for Class 8 sales in the second and third quarters, with backlogs decreasing but remaining strong [28][29] Question: Heavy truck cycle and used truck values - Management indicated that while cancellations are muted, there may be pressure on used truck values later in the year, with expectations for some devaluation [39][45] Question: SG&A costs and structural changes - Management discussed the variability of SG&A costs tied to truck sales and the ongoing investments in technology and operations to drive growth [55][57]
Rush Enterprises(RUSHA) - 2018 Q4 - Earnings Call Transcript
2019-02-16 23:45
Rush Enterprises, Inc. (NASDAQ:RUSHA) Q4 2018 Results Earnings Conference Call February 14, 2019 10:00 AM ET Company Participants Mike McRoberts - Chief Operating Officer Derrek Weaver - Executive Vice President Jay Hazelwood - Vice President and Controller Michael Goldstone - Vice President, General Counsel and Corporate Secretary Rusty Rush - Chairman, President and CEO Steve Keller - Chief Financial Officer Conference Call Participants Jamie Cook - Credit Suisse Neil Frohnapple - Buckingham Research Brad ...