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

[Part I](index=6&type=section&id=Part%20I) [Business](index=6&type=section&id=Item%201.%20Business) Rush Enterprises, Inc. is an integrated retailer of commercial vehicles and related services, operating primarily through its Truck Segment via a network of 'Rush Truck Centers' across the United States and Canada - Rush Enterprises operates as a full-service, integrated retailer of commercial vehicles and related services through its network of over **143 Rush Truck Centers** in 23 states and Ontario, Canada[26](index=26&type=chunk)[27](index=27&type=chunk) - The company's business strategy focuses on providing integrated solutions through its 'one-stop center' model, expanding product and service offerings, and growing its geographic footprint via acquisitions and new dealership openings[28](index=28&type=chunk)[36](index=36&type=chunk) - As of December 31, 2024, the company's backlog of commercial vehicle orders was approximately **$1.51 billion**, a significant decrease from **$3.73 billion** on December 31, 2023, attributed to decreased demand for new Class 8 trucks and the ongoing freight recession[102](index=102&type=chunk) - Sales of new Peterbilt commercial vehicles accounted for approximately **34.3% of total revenues** in 2024, while sales of new International commercial vehicles accounted for **17.4%**[85](index=85&type=chunk)[86](index=86&type=chunk) 2024 Revenue and Gross Profit Contribution | Category | Revenue (2024) | % of Total Revenue | % of Gross Profit | | :--- | :--- | :--- | :--- | | New Commercial Vehicle Sales | $4,553.0 million | 58.3% | N/A | | Aftermarket Products & Services | $2,516.0 million | 32.2% | 60.4% | | Used Commercial Vehicle Sales | $335.8 million | 4.3% | N/A | | Vehicle Leasing and Rental | $354.9 million | 4.5% | N/A | | Finance and Insurance | $22.0 million | 0.3% | N/A | [Risk Factors](index=19&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks related to its business operations, financial condition, and regulatory environment - The company is highly dependent on PACCAR for the supply of Peterbilt trucks and parts, which generate the majority of its revenues, and a negative change in this relationship could materially harm operations[111](index=111&type=chunk)[112](index=112&type=chunk) - Dealership agreements with Peterbilt are terminable if the aggregate voting power of W.M. 'Rusty' Rush and other key executives falls below **22%**, posing a significant change of control risk[117](index=117&type=chunk) - Long-term technological advances, such as drivetrain electrification and autonomous vehicles, could adversely affect the parts and service business, which currently relies on internal combustion engines[123](index=123&type=chunk)[124](index=124&type=chunk) - The business is subject to economic risks, including periods of decline in commercial vehicle sales during economic downturns, and financial risks such as the need for additional financing and the negative effects of rising interest rates[127](index=127&type=chunk)[128](index=128&type=chunk)[134](index=134&type=chunk) - Federal and state regulations on engine emissions (e.g., EPA 2027 Low NOx, CARB rules) are complex and subject to change, which could affect product demand and require reliance on manufacturers to supply compliant vehicles[142](index=142&type=chunk)[144](index=144&type=chunk) - The company is controlled by one shareholder, W.M. 'Rusty' Rush, who holds approximately **35.6% of the aggregate voting power**, allowing for substantial control over corporate matters[157](index=157&type=chunk) [Unresolved Staff Comments](index=28&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that there are no unresolved staff comments - None[164](index=164&type=chunk) [Cybersecurity](index=28&type=section&id=Item%201C.%20Cybersecurity) The company employs an enterprise-wide cybersecurity program based on the Center for Internet Security (CIS) Critical Security Framework - The company's cybersecurity risk management program is based on the Center for Internet Security (CIS) Critical Security Framework to ensure the confidentiality, integrity, and availability of its systems and data[166](index=166&type=chunk) - Cybersecurity oversight is managed by the Chief Information Officer (CIO), who reports to the Chief Operating Officer (COO), with the Audit Committee of the Board of Directors having specific oversight responsibility[167](index=167&type=chunk) - Although no material breach has been experienced, the company acknowledges its systems are frequent targets of cyberattacks, and a significant disruption could result in material harm to the business[168](index=168&type=chunk) [Properties](index=28&type=section&id=Item%202.%20Properties) The company's corporate headquarters are owned and located in New Braunfels, Texas - The company owns its corporate headquarters in New Braunfels, Texas[169](index=169&type=chunk) - As of December 2024, the company owns or leases numerous facilities for its operations across 23 U.S. states and Ontario, Canada[169](index=169&type=chunk) - The company owns and operates a **10,950-acre guest ranch** near Cotulla, Texas, for client development[169](index=169&type=chunk) [Legal Proceedings](index=29&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in ordinary course of business litigation and maintains liability insurance - The company is involved in litigation arising from its operations in the ordinary course of business and maintains liability insurance[171](index=171&type=chunk) - As of December 31, 2024, management believes there are no pending legal proceedings that are reasonably likely to have a material adverse effect on the company's financial position[171](index=171&type=chunk) [Mine Safety Disclosures](index=29&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[172](index=172&type=chunk) [Part II](index=29&type=section&id=Part%20II) [Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities](index=29&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Shareholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Rush Enterprises' Class A (RUSHA) and Class B (RUSHB) common stock trade on the NASDAQ Global Select Market - The company's Class A and Class B common stock are traded on The NASDAQ Global Select Market under the symbols RUSHA and RUSHB, respectively[174](index=174&type=chunk) - On December 3, 2024, a new stock repurchase program was approved, authorizing the repurchase of up to **$150.0 million** of Class A and/or Class B common stock[180](index=180&type=chunk) - The company's 5-year cumulative total return was **187.61%** (assuming $100 invested on 12/31/2019), outperforming the S&P 500 (**97.02%**) and a peer group (**138.42%**)[181](index=181&type=chunk)[182](index=182&type=chunk) 2024 Quarterly Dividends and Stock Price Range | Quarter | Dividend per Share | Class A High | Class A Low | Class B High | Class B Low | | :--- | :--- | :--- | :--- | :--- | :--- | | Q1 | $0.17 | $53.72 | $42.77 | $53.35 | $45.00 | | Q2 | $0.17 | $53.78 | $41.51 | $53.31 | $37.85 | | Q3 | $0.18 | $56.64 | $40.99 | $51.91 | $37.92 | | Q4 | $0.18 | $65.15 | $49.52 | $58.61 | $43.81 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2024, Rush Enterprises experienced a slight **1.5% decrease** in gross revenues to **$7.8 billion**, with a **3.9% drop** in gross profit - The company's absorption ratio, a key metric measuring how well aftermarket gross profit covers dealership overhead, was **132.2%** in 2024, down from **135.3%** in 2023[194](index=194&type=chunk) - As of December 31, 2024, the company had working capital of approximately **$736.1 million**, including **$228.1 million in cash**, which is considered sufficient to meet operating requirements for the next twelve months[234](index=234&type=chunk) Summary of 2024 Performance vs. 2023 | Metric | 2024 | Change vs. 2023 | | :--- | :--- | :--- | | Gross Revenues | $7,804.7 million | -1.5% | | Gross Profit | N/A | -3.9% | | New Class 8 Unit Sales | N/A | -11.4% | | New Class 4-7 Unit Sales | N/A | +5.1% | | Aftermarket Products & Services Revenue | $2,516.0 million | -1.8% | | Absorption Ratio | 132.2% | from 135.3% | 2025 Industry Outlook (A.C.T. Research) | Vehicle Class | 2025 U.S. Retail Sales Forecast | % Change vs. 2024 | | :--- | :--- | :--- | | Class 8 Trucks | 252,000 units | +1.9% | | Class 4-7 Commercial Vehicles | 266,300 units | +5.7% | [Results of Operations](index=35&type=section&id=Results%20of%20Operations) For the year ended December 31, 2024, total revenues decreased by **1.5%** to **$7.80 billion** compared to 2023 - The decrease in new Class 8 truck sales was attributed to the ongoing freight recession and high interest rates, while the increase in Class 4-7 sales was due to strong demand and increased production[214](index=214&type=chunk)[215](index=215&type=chunk)[216](index=216&type=chunk) - Gross margins on new Class 8 truck sales decreased to **8.9%** in 2024 from **9.7%** in 2023, while used vehicle margins increased to **18.9%** from **12.4%** due to successful sales strategy execution[224](index=224&type=chunk)[226](index=226&type=chunk) Financial Performance (2024 vs. 2023) | Metric | 2024 | 2023 | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | $7,804.7M | $7,925.0M | -1.5% | | Gross Profit | $1,531.4M | $1,593.1M | -3.9% | | Gross Margin | 19.6% | 20.1% | -0.5 ppt | | SG&A Expenses | $995.6M | $1,021.7M | -2.6% | | Operating Income | $468.1M | $512.4M | -8.6% | | Net Interest Expense | $70.9M | $52.9M | +33.9% | | Income Before Taxes | $397.8M | $462.1M | -13.9% | Vehicle Unit Sales (2024 vs. 2023) | Vehicle Type | 2024 Units | 2023 Units | % Change | | :--- | :--- | :--- | :--- | | New Heavy-Duty (Class 8) | 15,465 | 17,457 | -11.4% | | New Medium-Duty (Class 4-7) | 13,935 | 13,264 | +5.1% | | New Light-Duty | 2,105 | 1,848 | +13.9% | | Used Vehicles | 7,110 | 7,117 | -0.1% | [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity remains strong, with **$736.1 million** in working capital, including **$228.1 million** in cash, as of December 31, 2024 - The company expects to make capital expenditures of approximately **$200.0 million to $250.0 million** for its leasing operations and **$35.0 million to $40.0 million** for recurring items during 2025[238](index=238&type=chunk) - In December 2024, the company entered into a new **$800.0 million** floor plan credit agreement with Paccar Financial Corp. (PFC) and amended its BMO floor plan agreement, reducing the commitment to **$675.0 million**[255](index=255&type=chunk)[256](index=256&type=chunk) - During 2024, the company paid cash dividends of **$55.5 million** and repurchased **$15.7 million** of its common stock[249](index=249&type=chunk) Cash Flow Summary (in thousands) | Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash from Operating Activities | $619,550 | $295,713 | | Net cash used in Investing Activities | ($445,578) | ($387,030) | | Net cash (used in) from Financing Activities | ($129,321) | $73,962 | | Net Increase/(Decrease) in Cash | $44,651 | ($17,319) | [Quantitative and Qualitative Disclosures about Market Risk](index=44&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is exposed to market risk, primarily from interest rate fluctuations on its variable-rate debt, which totaled approximately **$1.34 billion** as of December 31, 2024 - The company's primary market risk is interest rate risk related to its variable-rate floor plan and lease fleet financing agreements[260](index=260&type=chunk)[261](index=261&type=chunk) - As of December 31, 2024, the company had approximately **$1,344.8 million** in outstanding borrowings subject to variable interest rates[261](index=261&type=chunk) - A **100 basis point (1.0%)** increase or decrease in the underlying interest rates (prime, SOFR, CORRA) would cause a corresponding change in annual interest expense of approximately **$13.4 million**[261](index=261&type=chunk) [Financial Statements and Supplementary Data](index=45&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for the fiscal year ended December 31, 2024, including the Report of Independent Registered Public Accounting Firm, Consolidated Balance Sheets, Statements of Income, Comprehensive Income, Shareholders' Equity, and Cash Flows, along with the accompanying Notes to Consolidated Financial Statements - The independent auditor, Ernst & Young LLP, provided an unqualified opinion, stating the financial statements are presented fairly in all material respects in conformity with U.S. GAAP[266](index=266&type=chunk) - A critical audit matter identified was the estimation of commercial vehicle inventory reserves, which involves subjective judgment regarding future demand and sales prices[271](index=271&type=chunk)[272](index=272&type=chunk) Consolidated Balance Sheet Highlights (As of Dec 31) | Account | 2024 (in thousands) | 2023 (in thousands) | | :--- | :--- | :--- | | Total Assets | $4,617,547 | $4,364,241 | | Total Liabilities | $2,455,644 | $2,473,825 | | Total Shareholders' Equity | $2,161,903 | $1,890,416 | Consolidated Statement of Income Highlights (Year Ended Dec 31) | Account | 2024 (in thousands) | 2023 (in thousands) | | :--- | :--- | :--- | | Total Revenue | $7,804,746 | $7,925,024 | | Gross Profit | $1,531,416 | $1,593,090 | | Operating Income | $468,090 | $512,381 | | Net Income Attributable to Rush | $304,153 | $347,055 | | Diluted EPS | $3.72 | $4.15 | [Notes to Consolidated Financial Statements](index=54&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed information supplementing the consolidated financial statements - Sales of new Peterbilt commercial vehicles, purchased from PACCAR, accounted for approximately **58.8%** of the company's new vehicle sales revenue in 2024[347](index=347&type=chunk) - The company has one reportable business segment: the Truck Segment, which includes its network of commercial vehicle dealerships and related services[428](index=428&type=chunk) - In July 2024, the company acquired Nebraska Peterbilt for approximately **$16.5 million**, and in May 2022, it acquired an additional **30%** of RTC Canada for approximately **$20.0 million**, bringing its interest to **80%** and resulting in consolidation[419](index=419&type=chunk)[422](index=422&type=chunk) - The company's effective tax rate was **23.3%** in 2024, compared to **24.7%** in 2023[411](index=411&type=chunk) Future Minimum Lease Payments (as of Dec 31, 2024, in thousands) | Year | Finance Leases | Operating Leases | | :--- | :--- | :--- | | 2025 | $43,603 | $21,082 | | 2026 | $32,510 | $20,345 | | 2027 | $24,226 | $19,536 | | 2028 | $19,998 | $17,399 | | 2029 | $13,978 | $15,074 | | Thereafter | $11,647 | $49,538 | | **Total** | **$145,962** | **$142,974** | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=81&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports that there were no changes in or disagreements with its accountants on accounting and financial disclosure - None[447](index=447&type=chunk) [Controls and Procedures](index=81&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of December 31, 2024 - The company's CEO and CFO concluded that disclosure controls and procedures were effective as of December 31, 2024[448](index=448&type=chunk) - Management assessed internal control over financial reporting based on the COSO 2013 framework and concluded it was effective as of December 31, 2024[451](index=451&type=chunk) - Ernst & Young LLP, the independent auditor, issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting as of December 31, 2024[452](index=452&type=chunk)[454](index=454&type=chunk) [Other Information](index=83&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[462](index=462&type=chunk) [Part III](index=83&type=section&id=Part%20III) [Directors, Executive Officers and Corporate Governance](index=83&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information required for this item is incorporated by reference from the company's definitive proxy statement for its 2025 Annual Meeting of Shareholders - The information for this item is incorporated by reference from the Company's Proxy Statement for the 2025 Annual Meeting of Shareholders[464](index=464&type=chunk) [Executive Compensation](index=83&type=section&id=Item%2011.%20Executive%20Compensation) Information required for this item is incorporated by reference from the company's definitive proxy statement for its 2025 Annual Meeting of Shareholders - The information for this item is incorporated by reference from the Company's Proxy Statement for the 2025 Annual Meeting of Shareholders[465](index=465&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters](index=84&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Shareholder%20Matters) Information required for this item is incorporated by reference from the company's definitive proxy statement for its 2025 Annual Meeting of Shareholders - The information for this item is incorporated by reference from the Company's Proxy Statement for the 2025 Annual Meeting of Shareholders[467](index=467&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=84&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information required for this item is incorporated by reference from the company's definitive proxy statement for its 2025 Annual Meeting of Shareholders - The information for this item is incorporated by reference from the Company's Proxy Statement for the 2025 Annual Meeting of Shareholders[468](index=468&type=chunk) [Principal Accountant Fees and Services](index=84&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information required for this item is incorporated by reference from the company's definitive proxy statement for its 2025 Annual Meeting of Shareholders - The information for this item is incorporated by reference from the Company's Proxy Statement for the 2025 Annual Meeting of Shareholders[469](index=469&type=chunk) [Part IV](index=85&type=section&id=Part%20IV) [Exhibits, Financial Statement Schedules](index=85&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the financial statements included in Item 8 and provides an index of all exhibits filed with the Form 10-K - This item lists the financial statements contained in Part II, Item 8 of the report[472](index=472&type=chunk) - Financial statement schedules are omitted as the required information is inapplicable or already presented in the consolidated financial statements or notes[473](index=473&type=chunk) - An index of exhibits is provided, including key corporate governance documents, credit agreements, and management compensation plans[474](index=474&type=chunk) [Form 10-K Summary](index=89&type=section&id=Item%2016.%20Form%2010-K%20Summary) This section was intentionally left blank in the report - Intentionally left blank[484](index=484&type=chunk)

Financial Performance - For the year ended December 31, 2024, the Company achieved revenues of $7.8 billion and net income of $304.2 million, or $3.72 per diluted share, compared to revenues of $7.9 billion and net income of $347.1 million, or $4.15 per diluted share for 2023[1]. - The company achieved its second highest annual revenue in history despite challenging operating conditions, with total revenue of $7.80 billion for 2024[28]. - Net income attributable to Rush Enterprises, Inc. for 2024 was $304.2 million, down from $347.1 million in 2023[37]. - Basic earnings per share for 2024 were $3.85, down from $4.28 in 2023[37]. - EBITDA for the twelve months ended December 31, 2024, was $553,596,000, compared to $572,959,000 in 2023, reflecting a decrease of approximately 3.4%[44]. - Adjusted EBITDA (Non-GAAP) decreased to $463,902,000 in 2024 from $518,937,000 in 2023, a decline of approximately 10.6%[44]. - Free cash flow (Non-GAAP) improved to $176,967,000 in 2024 from a negative $73,168,000 in 2023, indicating a significant turnaround[45]. Sales and Market Performance - The Company sold 15,465 new Class 8 trucks in 2024, a decrease of 11.4% compared to 2023, accounting for 6.1% of the new U.S. Class 8 truck market[13]. - The Company delivered 38,615 new and used commercial vehicles in 2024, a 2.7% decrease compared to 39,686 in 2023[23]. - Vehicle sales revenue for new heavy-duty vehicles decreased to $773,376,000 in 2024 from $816,532,000 in 2023, a decline of approximately 5.3%[40]. - New medium-duty vehicle sales revenue increased to $400,930,000 in 2024 from $359,767,000 in 2023, an increase of approximately 11.4%[40]. - The Company anticipates U.S. and Canadian retail sales of new Class 8 trucks to total 277,200 units in 2025, a 0.7% increase compared to 2024[13]. - The Company expects new Class 8 truck sales to be challenging in the first half of 2025, with a potential recovery in the second half[6]. Revenue Streams - Aftermarket products and services revenues were $2.5 billion for the year ended 2024, down 1.8% compared to $2.6 billion in 2023[10]. - Leasing and Rental revenue in 2024 was $354.9 million, up 0.3% from 2023[20]. - Lease and rental revenue increased by 1.3% in Q4 2024 compared to Q4 2023[26]. Shareholder Returns - The Board of Directors declared a cash dividend of $0.18 per share of Class A and Class B common stock, to be paid on March 18, 2025[1]. - Total cash dividends paid to shareholders in 2024 amounted to $54.9 million, reflecting an 8.5% increase over 2023[27]. - The company repurchased $16.4 million of its common stock during 2024, with $6.5 million repurchased in Q4 2024 under a new plan allowing for $150 million in repurchases through December 31, 2025[27]. Operational Efficiency - The Company's absorption ratio was 132.2% in 2024, compared to 135.3% in 2023[10]. - The absorption ratio improved to 133.0% in 2024 from 130.8% in 2023, indicating better operational efficiency[40]. Assets and Liabilities - Total assets increased to $4.62 billion in 2024, up from $4.36 billion in 2023[35]. - Total debt decreased to $1,620,350,000 in 2024 from $1,687,482,000 in 2023, a reduction of approximately 4.0%[42]. - Adjusted total debt (Non-GAAP) was reported at $3,571,000 in 2024, down from $4,112,000 in 2023[42]. - Total shareholders' equity increased to $2,141,549,000 in 2024 from $1,870,879,000 in 2023, an increase of approximately 14.5%[47]. - Adjusted invested capital (Non-GAAP) rose to $1,916,989,000 in 2024 from $1,691,266,000 in 2023, an increase of approximately 13.4%[47]. Strategic Initiatives - The company operates 57 franchises across the U.S. and Canada, with over 10,100 trucks in its lease and rental fleet[26]. - Rush Enterprises remains focused on long-term strategic initiatives as it enters its 60th year in the commercial vehicle industry[28].

Financial Performance - Revenues for Q3 2024 were $1.896 billion, a decrease of 4.3% from $1.981 billion in Q3 2023, with net income of $79.1 million or $0.97 per diluted share[1] - Total revenue for the three months ended September 30, 2024, was $1,896,133, a decrease of 4.2% compared to $1,980,740 for the same period in 2023[24] - Net income attributable to Rush Enterprises, Inc. for the three months ended September 30, 2024, was $79,132, a decrease of 1.8% from $80,278 in the same period of 2023[25] - Gross profit for the nine months ended September 30, 2024, was $1,161,305, down from $1,207,022 in the same period of 2023, reflecting a decrease of 3.8%[24] Sales and Market Performance - The company sold 3,604 new Class 8 trucks in Q3 2024, a decrease of 16.7% compared to Q3 2023, capturing 5.3% of the new U.S. Class 8 truck market[8] - New Class 4 through 7 commercial vehicle sales increased by 4.2% year-over-year, with 3,379 units sold in Q3 2024[11] - ACT Research forecasts a 12.5% decrease in U.S. and Canadian retail sales of new Class 8 trucks for 2024, totaling 264,000 units[8] Expenses and Charges - The company recognized a one-time, pre-tax charge of approximately $3.3 million related to Hurricane Helene in Q3 2024[1] - Leasing and rental revenue decreased by 0.4% year-over-year, attributed to a slight decrease in rental utilization[15] - The company reported a finance and insurance revenue of $5,780 for the three months ended September 30, 2024, down from $6,317 in the same period of 2023, a decrease of 8.5%[24] Assets and Liabilities - Current assets increased to $2,460,393 as of September 30, 2024, from $2,260,304 as of December 31, 2023, representing an increase of 8.8%[23] - Total assets reached $4,648,471 as of September 30, 2024, up from $4,364,241 as of December 31, 2023, indicating a growth of 6.5%[23] - Total current liabilities increased to $1,752,032 as of September 30, 2024, compared to $1,673,310 as of December 31, 2023, reflecting an increase of 4.7%[23] - Long-term debt, net of current maturities, decreased to $399,674 as of September 30, 2024, from $414,002 as of December 31, 2023, a reduction of 3.5%[23] Shareholder Returns and Equity - The company declared dividends of $0.18 per common share for the three months ended September 30, 2024, compared to $0.17 for the same period in 2023[25] - Total Shareholders' Equity (GAAP) increased to $2,083,145 thousand as of September 30, 2024, from $1,899,612 thousand, marking a growth of 9.7%[35] - Adjusted Invested Capital (Non-GAAP) rose to $1,902,057 thousand from $1,711,772 thousand, an increase of 11.1%[35] Cash Flow and Debt - Free Cash Flow (Non-GAAP) was negative at $(72,111) thousand for the twelve months ended September 30, 2024, compared to $(34,427) thousand in the prior year[33] - Adjusted Free Cash Flow (Non-GAAP) decreased to $398,156 thousand from $442,138 thousand, a decline of 9.9%[33] - Total Debt (GAAP) increased to $1,815,461 thousand as of September 30, 2024, from $1,568,733 thousand a year earlier, representing a 15.7% increase[30] - Adjusted Total Debt (Non-GAAP) decreased slightly to $3,985 thousand from $4,148 thousand year-over-year[30] EBITDA and Interest Expense - EBITDA (Non-GAAP) for the twelve months ended September 30, 2024, was $543,608 thousand, down from $588,673 thousand in the previous year, a decrease of 7.7%[32] - Adjusted EBITDA (Non-GAAP) also decreased to $472,169 thousand from $541,867 thousand, reflecting a decline of 12.8%[32] - Interest expense increased to $70,603 thousand for the twelve months ended September 30, 2024, compared to $45,877 thousand in the previous year, a rise of 54.1%[32] Market Outlook - The company expects a typical seasonal decline in aftermarket results in Q4 2024 but anticipates slow improvement in market conditions in Q1 2025[7] - The absorption ratio for Q3 2024 was 132.6%, slightly down from 132.8% in Q3 2023[5] - The company reported an absorption ratio of 132.6% for the three months ended September 30, 2024, compared to 132.8% for the same period in 2023[28]

Core Viewpoint - Rush Enterprises, Inc. will host a conference call to discuss its third-quarter earnings for 2024 on October 30, 2024, following the earnings report on October 29, 2024 [1][2]. Company Overview - Rush Enterprises, Inc. operates the largest network of commercial vehicle dealerships in North America, with over 150 locations across 23 states and Ontario, Canada [3]. - The company represents various truck and bus manufacturers, including Peterbilt, International, Hino, Isuzu, Ford, Dennis Eagle, IC Bus, and Blue Bird [3]. - Rush Enterprises provides a comprehensive range of services, including sales of new and used vehicles, aftermarket parts, service and body shop operations, financing, insurance, leasing, and rental [3]. - The company also offers CNG fuel systems through its investment in Cummins Clean Fuel Technologies, Inc., as well as telematics products and other vehicle technologies [3].

Sales Forecast - New U.S. Class 8 retail truck sales are forecasted to be 228,700 units in 2024, representing a 15.8% decrease compared to 2023[49] - The company expects to sell approximately 13,000 to 14,000 new Class 8 trucks in 2024, with a market share of 5.7% to 6.1%[49] - For Class 4 through 7 retail commercial vehicle sales, a forecast of 262,000 units in 2024 indicates a 3.7% increase compared to 2023[50] - The company anticipates selling approximately 13,000 to 14,000 new Class 4 through 7 commercial vehicles in 2024, with a market share of 4.9% to 5.3%[50] - The company expects to sell approximately 1,800 to 2,000 light-duty vehicles and 6,500 to 7,500 used commercial vehicles in 2024[54] Revenue and Profitability - Total revenues from new and used commercial vehicle sales accounted for 64.1% of total revenues for the three months ended June 30, 2024[54] - Total revenues increased by $24.0 million, or 1.2%, in Q2 2024 compared to Q2 2023, primarily due to strong truck sales[59] - Gross profit margin for new and used commercial vehicle sales was 30.7% for the three months ended June 30, 2024, compared to 30.6% for the same period in 2023[55] - Operating income margin was 6.2% for the three months ended June 30, 2024, down from 7.1% in the same period of 2023[54] - Gross profit decreased by $21.5 million, or 5.2%, in Q2 2024, with gross profit as a percentage of sales dropping to 19.4% from 20.7% in Q2 2023[63] - Gross profit decreased by $30.4 million, or 3.7%, in the first six months of 2024, with gross profit as a percentage of sales at 20.1%, down from 20.8% in the same period of 2023[76] Costs and Expenses - The cost of products sold was 80.6% of total revenues for the three months ended June 30, 2024, compared to 79.3% for the same period in 2023[54] - Aftermarket Products and Services revenues are expected to remain flat to slightly down in 2024 compared to 2023[51] - Aftermarket Products and Services revenues decreased by $23.7 million, or 3.6%, in Q2 2024 due to weaker demand from the freight recession and high interest rates[59] - SG&A expenses decreased by $5.3 million, or 2.1%, in Q2 2024, with SG&A as a percentage of total revenues decreasing to 12.4%[69] Vehicle Sales Performance - New heavy-duty vehicle sales decreased by 4.0% to 4,128 units in Q2 2024, while new medium-duty vehicle sales increased by 6.2% to 3,691 units[60][61] - In the first six months of 2024, the company sold 6,829 new Class 4 through 7 medium-duty commercial vehicles in the U.S., a 4.9% increase from 6,513 units in the same period of 2023[74] - Used commercial vehicle sales decreased by 0.3% to 3,541 units in the first six months of 2024, compared to 3,553 units in the first six months of 2023[75] - Used vehicle revenue decreased by 25.3% to $80.4 million in Q2 2024, reflecting a decline in used commercial vehicle sales[59] Financial Position and Capital Expenditures - As of June 30, 2024, the company had working capital of approximately $673.0 million, including $167.3 million in cash[79] - The company expects to purchase or lease commercial vehicles worth approximately $170.0 million to $180.0 million for its leasing operations during 2024[82] - The company has a backlog of commercial vehicle orders amounting to approximately $1,812.1 million as of June 30, 2024, down from $4,041.6 million on June 30, 2023, indicating decreased demand for new Class 8 trucks due to various market conditions[100] Debt and Interest Expenses - Net interest expense increased by $7.2 million, or 59.1%, in Q2 2024 due to higher vehicle inventory levels and elevated interest rates[70] - Net interest expense increased by $14.2 million, or 61.2%, in the first six months of 2024 compared to the same period in 2023[78] - The company is exposed to market risks related to interest rates from various financing agreements[111] - An increase or decrease in SOFR, CORRA, or the prime rate of 100 basis points could lead to an annual interest expense change of approximately $13.8 million[111] Environmental and Regulatory Compliance - The company is subject to various environmental regulations that may incur capital and operating expenditures, impacting financial performance[103] - The company has entered into agreements to comply with new greenhouse gas emissions regulations, which may affect operational costs and product demand[108] - Compliance with environmental laws could require additional expenditures that may adversely affect financial results[109] - The complexity and potential changes in environmental regulations could impact product demand[109] Corporate Governance and Risk Management - The company believes there are no pending claims or litigation that are likely to materially affect its financial position or results of operations as of June 30, 2024[115] - The company's disclosure controls and procedures were deemed effective as of June 30, 2024, ensuring timely reporting and decision-making[113] - There have been no material changes in internal control over financial reporting during the three months ended June 30, 2024[114] - The company maintains liability insurance deemed adequate by management to cover potential litigation risks[115]

Company Overview - Rush Enterprises, Inc. operates the largest network of commercial vehicle dealerships in North America, with over 150 locations across 22 states and Ontario, Canada [3] - The company represents various truck and bus manufacturers, including Peterbilt, International, Hino, Isuzu, Ford, IC Bus, and Blue Bird [3] - Rush Enterprises provides a comprehensive range of services, including sales of new and used vehicles, aftermarket parts, service and body shop operations, financing, insurance, leasing, and rental [3] Upcoming Earnings Call - Rush Enterprises will host a conference call to discuss its earnings for the second quarter of 2024 on August 1, 2024, at 10:00 a.m. Eastern/9:00 a.m. Central [1] - Earnings will be reported after the market closes on July 31, 2024 [1] - Participants can register for the call via a provided link and are encouraged to join 10 minutes early [2]

Revenue Performance - Total revenues decreased by $39.8 million, or 2.1%, in Q1 2024 compared to Q1 2023, primarily due to decreased demand for new Class 8 trucks and high interest rates [71]. - Aftermarket Products and Services revenues totaled $649.2 million in Q1 2024, up 0.1% from Q1 2023, reflecting moderating inflation and challenging economic conditions [72]. - Revenues from new and used commercial vehicles decreased by $38.4 million, or 3.3%, in Q1 2024 compared to Q1 2023, driven by decreased demand for new Class 8 trucks [73]. - New U.S. Class 8 retail truck sales are forecasted to be 228,000 units in 2024, representing a 16.0% decrease compared to 2023 [61]. - The company expects to sell approximately 13,500 to 14,500 new Class 8 trucks in 2024, with a market share ranging between 5.9% and 6.4% [61]. - For new U.S. Class 4 through 7 retail commercial vehicle sales, a forecast of 262,000 units in 2024 indicates a 3.7% increase compared to 2023 [62]. - 3,494 new Class 8 trucks were sold in Q1 2024, a 20.0% decrease from 4,365 units in Q1 2023, attributed to delayed deliveries and decreased demand due to high interest rates [74]. - Sales of new Class 4 through 7 medium-duty commercial vehicles increased by 9.6% to 3,331 units in Q1 2024, compared to 3,038 units in Q1 2023, driven by increased production [75]. - Light-duty vehicle sales decreased by 9.5% to 456 units in Q1 2024, while used commercial vehicle sales increased by 8.0% to 1,818 units [76]. Financial Performance - Gross profit decreased by $8.9 million, or 2.2%, in Q1 2024, with gross profit as a percentage of sales slightly declining to 20.8% [79]. - Gross margins for Aftermarket Products and Services decreased to 36.5% in Q1 2024 from 38.0% in Q1 2023, with gross profit for this segment falling to $236.9 million [80]. - Net interest expense increased by $7.0 million, or 63.6%, in Q1 2024, primarily due to rising interest rates and increased inventory levels [87]. - Income before income taxes decreased by $26.3 million, or 22.1%, in Q1 2024 compared to Q1 2023 [88]. - Cash flows from operating activities resulted in a net cash used of $155.1 million in Q1 2024, with significant cash outflows from inventory and accounts receivable increases [101]. Cash Flow and Investments - The company expects to purchase or lease commercial vehicles worth approximately $200.0 million to $225.0 million for leasing operations in 2024 [94]. - A cash dividend of $13.9 million was paid in Q1 2024, with an additional dividend of $0.17 per share declared for June 2024, estimated at $13.4 million [95]. - Cash used in investing activities in Q1 2024 was $69.2 million, with $79.1 million allocated for the acquisition of property and equipment, including $52.1 million for rental and lease vehicles [103]. - In Q1 2023, cash used in investing activities totaled $95.5 million, with capital expenditures of $90.4 million, including $75.2 million for rental and lease vehicles [104]. - Financing activities in Q1 2024 resulted in net cash provided of $196.5 million, primarily from $698.8 million in long-term debt borrowings [105]. - In Q1 2023, financing activities provided $28.3 million in net cash flow, with $275.3 million used for principal repayments of long-term debt [106]. Order Backlog and Market Conditions - As of March 31, 2024, the backlog of commercial vehicle orders was approximately $2,047.1 million, down from $4,209.9 million on March 31, 2023, reflecting decreased demand for new Class 8 trucks [113]. - The average daily outstanding borrowings under the Floor Plan Credit Agreement were $958.3 million during Q1 2024, with approximately $1.0 billion outstanding as of March 31, 2024 [110]. - The company expects to fill most of its backlog orders during 2024, assuming manufacturers can meet their production schedules [113]. Environmental and Regulatory Compliance - The company is subject to various environmental regulations that may incur capital and operating expenditures for compliance [116]. - The company believes it currently has no material environmental liabilities that would adversely affect its financial condition or results of operations [121]. - Soil and groundwater impacts are known to exist at some of the company's dealerships, which could lead to unforeseen environmental costs or liabilities [121]. - The company is subject to complex and changing environmental laws and regulations that could require additional expenditures, potentially affecting financial results [121]. Internal Controls and Litigation - The company evaluated the effectiveness of its disclosure controls and procedures as of March 31, 2024, concluding they were effective [124]. - There has been no change in internal control over financial reporting that materially affected the company's reporting during the three months ended March 31, 2024 [125]. - The company is involved in litigation arising from ordinary business operations but believes there are no pending claims likely to materially affect its financial position [126]. - The company maintains liability insurance deemed adequate by management, but uninsured claims could adversely affect financial results [126]. Market Risk - The company is exposed to market risk through interest rates related to its financing agreements, which could impact cash flows [122]. - An increase or decrease in SOFR, CDOR, or the prime rate by 100 basis points could result in an annual interest expense change of approximately $17.7 million [123].

Financial Performance - Revenues for Q1 2024 were $1.872 billion, a 2.1% decrease from $1.912 billion in Q1 2023, with net income of $71.6 million or $0.88 per diluted share compared to $90.5 million or $1.07 per diluted share in the same period last year [21]. - Total revenue for Q1 2024 was $1,871,999, a decrease of 2.1% from $1,911,767 in Q1 2023 [35]. - Gross profit for Q1 2024 was $389,875, down from $398,769 in Q1 2023, representing a decrease of 2.2% [35]. - Net income attributable to Rush Enterprises, Inc. for Q1 2024 was $71,608, a decline of 20.9% compared to $90,455 in Q1 2023 [35]. - Net Income (GAAP) for the twelve months ended March 31, 2024, was $328,208, a decrease of 15.7% from $389,384 in 2023 [42]. - Adjusted EBITDA (Non-GAAP) for the twelve months ended March 31, 2024, was $496,255, down 11.5% from $560,390 in 2023 [42]. - Free Cash Flow (Non-GAAP) for the twelve months ended March 31, 2024, was $(309,377), compared to $64,793 in 2023, indicating a significant decline [43]. - Net cash provided by operations (GAAP) decreased to $48,194 in 2024 from $352,610 in 2023, a decline of 86.3% [43]. Sales Performance - New Class 8 truck sales decreased by 20.0% year-over-year, with 3,494 units sold, representing 6.0% of the U.S. Class 8 truck market [12]. - New Class 4-7 truck sales increased by 9.6% year-over-year, with 3,331 units sold, accounting for 5.4% of the U.S. Class 4-7 truck market [15]. - The company sold 1,818 used commercial vehicles, an 8.0% increase compared to Q1 2023, despite challenging market conditions [18]. - New and used commercial vehicle sales revenue decreased to $1,123,319 in Q1 2024 from $1,161,725 in Q1 2023, reflecting a decline of 3.3% [35]. - The company anticipates steady demand for new Class 4-7 trucks for the remainder of the year, with expectations for improved sales in Q2 2024 [17]. Dividends and Stock Repurchase - The company declared a cash dividend of $0.17 per share, to be paid on June 10, 2024 [2]. - The company declared dividends of $0.17 per common share in Q1 2024, up from $0.14 in Q1 2023 [35]. - The company repurchased $5.6 million of its common stock in Q1 2024, totaling $73.2 million of the $150.0 million authorized by the board [24]. Market Conditions and Outlook - The company expects the freight recession to continue into at least late 2024, impacting new Class 8 truck sales and overall financial performance [5]. - Leasing and rental revenues increased by 1.4% compared to Q1 2023, supported by the delivery of new leased vehicles [23]. Assets and Liabilities - Total assets increased to $4,629,006 as of March 31, 2024, compared to $4,364,241 as of December 31, 2023, marking a growth of 6.1% [33]. - Total debt (GAAP) rose to $1,910,907 in Q1 2024 from $1,410,572 in Q1 2023, an increase of 35.4% [40]. - Total shareholders' equity (GAAP) increased to $1,935,502 as of March 31, 2024, from $1,810,670 in 2023, reflecting a growth of 6.9% [45]. - Adjusted Invested Capital (Non-GAAP) rose to $1,783,671 in 2024, compared to $1,588,594 in 2023, marking an increase of 12.3% [45]. Expenses - Interest expense increased significantly to $59,907 in 2024 from $28,888 in 2023, representing a rise of 107.5% [42]. - Depreciation and amortization expenses rose to $61,266 in 2024, up from $56,305 in 2023, an increase of 8.7% [42]. - The absorption ratio for Q1 2024 was 130.1%, down from 136.5% in Q1 2023 [38]. - Cash and cash equivalents decreased to $155,905 as of March 31, 2024, from $226,292 as of March 31, 2023 [40]. - Adjusted net debt (cash) for Q1 2024 was $(151,831), an improvement from $(222,076) in Q1 2023 [40]. - The company reported a loss on the sale of assets of $864 in 2024, compared to a gain of $2,404 in 2023 [42].

Business Operations - The company operates over 125 franchised Rush Truck Centers across 23 states and Ontario, Canada, providing a comprehensive range of commercial vehicle services[29] - The business strategy focuses on expanding the dealership network through strategic acquisitions and opening new locations to enhance customer service[30] - The company offers integrated solutions including service, parts, collision repairs, and financial services, aiming to reinforce customer loyalty and maintain market leadership[30] - The company has a joint venture with Cummins to provide CNG fuel systems, enhancing its product offerings in the commercial vehicle sector[30] - The company emphasizes the importance of aftermarket parts sales and service facilities as key revenue drivers[28] - The company is committed to developing new products and technologies to meet the evolving needs of the commercial vehicle industry[30] - The company’s strategic focus includes enhancing vehicle telematics products to improve service offerings[30] - The company operates larger commercial vehicle dealerships as "one-stop centers," providing a full range of services including sales, leasing, and financial services[42] - The integrated dealership network strategy includes management by dealership units, enhancing profitability across all aspects of operations[42] Financial Performance - Total revenues for 2023 were approximately $7,925.0 million, with new commercial vehicle sales accounting for $4,543.3 million, or 57.3% of total revenues[48] - Revenues from Aftermarket Products and Services accounted for approximately $2,562.0 million, or 32.3%, of total revenues for 2023, and 59.5% of gross profit[45] - New Class 8 heavy-duty truck sales contributed approximately $3,083.1 million, or 38.9% of total revenues for 2023[48] - New medium-duty commercial vehicle sales accounted for approximately $1,119.7 million, or 14.1%, of total revenues for 2023[49] - Used commercial vehicle sales generated approximately $414.7 million, or 5.2% of total revenues for 2023[51] - Vehicle leasing and rental revenues amounted to approximately $353.8 million, or 4.5% of total revenues for 2023, with a fleet of 10,463 commercial vehicles[52] - Warranty-related parts and service revenues accounted for approximately $168.1 million, or 2.1%, of total revenues for 2023[46] - Financial and insurance product sales contributed approximately $24.3 million, or 0.3% of total revenues for 2023, with minimal direct costs[53] Employee and Workforce Management - As of December 31, 2023, the company employed 7,860 people in the U.S. and 649 in Canada, with less than 1.4% classified as part-time[56] - The overall employee turnover rate for the U.S. and Canada in 2023 was 25.1%, down from 28.6% in 2022[69] - The turnover rate for technicians in the U.S. and Canada was 33.6% in 2023, compared to 36.7% in 2022[69] - The company established a minimum hourly wage of $15.00 in 2020, ensuring fair pay for employees[61] - In 2023, the company achieved a Total Recordable Incident Rate (TRIR) of 3.68, an improvement from 4.03 in 2022[71] - The Lost Time Incident Rate (LTIR) was 0.57 in 2023, down from 0.72 in 2022[71] - The company offers an employee stock purchase plan with a 15% discount on Class A common stock purchases[63] - The Rush Foundational Leader Program focuses on developing management and leadership skills across the organization[65] - The company maintains collective bargaining agreements with certain employees in Illinois, with expiration dates ranging from 2025 to 2028[72] Risks and Regulatory Compliance - The company’s financial position and future operations are subject to various risks and uncertainties, as outlined in its risk factors[22] - The company is subject to federal, state, and local environmental laws, incurring capital and operating expenditures to comply with these regulations[99] - The company is exposed to risks from climate change, including potential disruptions from natural disasters, which could adversely impact operations and financial condition[125] - The company does not currently believe it has any material environmental liabilities, but future compliance costs could adversely affect financial results[104] - Regulatory changes, such as CARB's emissions regulations, could impact the demand for commercial vehicles and the company's ability to sell them[140] - The company is working with manufacturers to understand potential limitations on the sale of new commercial vehicles due to regulatory uncertainties in California[142] - Disruptions to information technology systems could adversely affect the company's business operations and data security[144] - The company has implemented a comprehensive cybersecurity risk management program, utilizing the Center for Internet Security Critical Security Framework to ensure the confidentiality, integrity, and availability of systems and data[145] - Continuous development and enhancement of cybersecurity controls require significant additional resources, with potential costs for deploying personnel and protection technologies[146] - Any cyberattack or security breach could adversely affect business operations, sales, and reputation, potentially leading to litigation or regulatory actions[147] - The company is exposed to claims related to personal injury, death, or property damage, which may exceed the level of insurance coverage[148] - The company utilizes a captive insurance company for auto and general commercial liability insurance, supplemented with excess insurance coverage, and self-insures property insurance[149] - Environmental regulations may result in claims and liabilities that could materially affect the company's financial condition and results of operations[150] Strategic Growth and Acquisitions - The company plans to expand its dealership network by acquiring existing dealerships or opening new locations in areas where it does not already have a presence[48] - The company plans to continue pursuing acquisitions selectively to drive growth, although future opportunities are uncertain[121] - The company acquired certain assets of Freeway Ford Truck Sales, Inc. for approximately $16.3 million on December 4, 2023[79] - The company acquired an additional 30% equity interest in RTC Canada for approximately $20.0 million on May 2, 2022, consolidating its operating results thereafter[80] Market Position and Customer Relations - The company relies heavily on PACCAR for the supply of Peterbilt trucks and parts, which generated the majority of its revenues in 2023[108] - A significant portion of revenues also comes from Navistar for International trucks and parts, indicating dependency on multiple manufacturers[110] - The company has dealership agreements with Peterbilt and Navistar that may be terminated upon a change of control, which could adversely affect operations and profitability[114] - The company is well-positioned to adapt to changes in customer needs due to its geographic reach and relationships with manufacturers[122] - The company continues to enhance its product offerings and dealership network to meet customer needs[30] - The backlog of commercial vehicle orders was approximately $3,733.4 million, down from approximately $4,216.0 million on December 31, 2022[98] - The backlog of new commercial vehicle orders was approximately $3,733.4 million as of December 31, 2023[128]