Rush Enterprises(US:RUSHA)2025-02-22 00:11Business Operations - Rush Enterprises operates over 143 franchised Rush Truck Centers locations across 23 states[27] - The company increased its equity interest in RTC Canada to 80% after acquiring an additional 30% in May 2022[27] - The total number of locations includes 121 owned, 78 leased, and 16 other locations, totaling 488 franchises[30] - The company plans to expand its dealership network through strategic acquisitions and new locations to better serve customers[28] - Rush Truck Centers provide a comprehensive range of services, including new and used vehicle sales, aftermarket parts, service, and financing[26] - The company operates 54 franchised Rush Truck Leasing locations in 21 states and 5 in Ontario, offering a wide range of commercial vehicles for lease[29] - The joint venture with Cummins focuses on manufacturing compressed natural gas fuel systems for commercial vehicles[33] - The company emphasizes a one-stop service model to mitigate economic fluctuations, enhancing overall operating margins[36] - The company has developed certain dealerships as "one-stop centers" providing integrated services including sales, leasing, and financial services[36] Financial Performance - Aftermarket Products and Services generated revenues of approximately $2,516.0 million, accounting for 32.2% of total revenues and 60.4% of gross profit for 2024[39] - New commercial vehicle sales accounted for approximately $4,553.0 million, or 58.3% of total revenues in 2024, with Class 8 heavy-duty truck sales contributing $2,906.8 million, or 37.2% of total revenues[42] - Used commercial vehicle sales reached approximately $335.8 million, representing 4.3% of total revenues for 2024[46] - Vehicle leasing and rental revenues amounted to approximately $354.9 million, or 4.5% of total revenues for 2024[47] - Warranty-related parts and service revenues accounted for approximately $186.6 million, or 2.4% of total revenues for 2024[40] - New medium-duty commercial vehicle sales, excluding new bus sales, accounted for approximately $1,312.3 million, or 16.8% of total revenues for 2024[43] - Financial and insurance product sales contributed approximately $22.0 million, or 0.3%, of total revenues for 2024[48] Employee Metrics - The turnover rate for U.S. and Canada technicians was 38.1% in 2024, compared to 33.6% in 2023, indicating a significant increase in technician turnover[66] - The company employed 7,388 people in the U.S. and 550 in Canada as of December 31, 2024, with less than 1.4% classified as part-time[51] - The overall employee turnover rate for U.S. and Canada was 30.5% in 2024, up from 25.1% in 2023[66] - The company had a Total Recordable Incident Rate (TRIR) of 4.10 in 2024, compared to 3.68 in 2023[71] Acquisitions - The company acquired assets of Nebraska Peterbilt for approximately $16.5 million on July 15, 2024, including commercial vehicle and parts inventory[79] - On December 4, 2023, the company acquired assets of Freeway Ford Truck Sales, Inc. for approximately $16.3 million, which included a Ford commercial vehicle franchise[80] - The company acquired assets of Scheppers International Truck Center for approximately $6.8 million on November 7, 2022, including an International truck franchise and inventory[81] - The company increased its equity interest in RTC Canada to 80% for approximately $20.0 million, consolidating its operating results thereafter[82] Revenue Breakdown - Sales of new Peterbilt commercial vehicles accounted for approximately 34.3% of total revenues for 2024[85] - Sales of new International commercial vehicles accounted for approximately 17.4% of total revenues for 2024[86] - Sales of new non-Peterbilt and non-International commercial vehicles accounted for approximately 6.6% of total revenues for 2024[87] Debt and Credit Agreements - As of December 31, 2024, the company had approximately $492.7 million outstanding under the PFC Floor Plan Credit Agreement[91] - The average daily outstanding borrowings under the BMO Floor Plan Credit Agreement were $956.4 million during the twelve months ended December 31, 2024[92] - The company had approximately $78.2 million CAD outstanding under the RTC Canada Floor Plan Credit Agreement as of December 31, 2024[94] - The company had approximately $153.4 million outstanding under the WF Credit Agreement as of December 31, 2024[95] - The Company entered into a PLC Agreement for up to $500.0 million in revolving credit loans to finance capital expenditures, with a minimum balance requirement of $220.0 million[96] - As of December 31, 2024, the outstanding amount under the PLC Agreement was approximately $220.0 million[96] - RTC Canada has a revolving credit agreement with BMO for up to $120.0 million CAD, with an additional $20.0 million CAD available upon request[97] - As of December 31, 2024, RTC Canada had approximately $50.4 million CAD outstanding under the revolving credit agreement[97] Order Backlog and Market Conditions - The backlog of commercial vehicle orders decreased to approximately $1,512.7 million as of December 31, 2024, down from approximately $3,733.4 million on December 31, 2023[102] - The decrease in backlog reflects reduced demand for new Class 8 trucks due to production catching up to pent-up demand and an ongoing freight recession[102] - The Company expects to fill all backlog orders during 2025, although recent tariffs could lead to cancellations[102] - The Truck Segment experiences moderate seasonality, with higher sales volumes in the second and third quarters historically for Aftermarket Products and Services[101] Environmental Regulations - The Company is subject to new EPA regulations requiring significant reductions in NOx emissions starting in model year 2027[108] - CARB has adopted rules to phase out the sale of internal combustion engine commercial vehicles, aiming for 100% zero-emission vehicles by 2050[109] - The Company does not anticipate material environmental liabilities affecting its financial condition, but compliance costs may increase due to evolving regulations[107] - The Clean Truck Partnership was established in July 2023, where manufacturers agreed to comply with CARB's emission requirements and align with the EPA 2027 Low NOx rule[109] - A joint memorandum of understanding among seventeen U.S. states aims for 100% of new Class 3 through 8 commercial vehicles to be zero emission by 2050, with a 30% target by 2030[109] - The company does not currently believe it has any material environmental liabilities, but acknowledges potential future costs related to compliance with environmental laws[107] Warranty Information - The company provides limited warranties on proprietary parts and services, and extended warranties on new Blue Bird school buses sold in Texas[98] - The company does not provide warranties on used commercial vehicles, but customers can purchase third-party warranties[99]