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]
Rush Enterprises(RUSHB) - 2024 Q2 - Quarterly Report