Rush Enterprises(RUSHA) - 2025 Q1 - Quarterly Results

Rush Enterprises, Inc. Q1 2025 Earnings Release Financial & Operational Highlights The company reported Q1 2025 revenues of $1.85 billion and net income of $60.3 million amid challenging market conditions Q1 2025 vs. Q1 2024 Financial Performance | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenues | $1.85 billion | $1.87 billion | | Net Income | $60.3 million | $71.6 million | | Diluted EPS | $0.73 | $0.88 | - The Board of Directors declared a cash dividend of $0.18 per share for both Class A and Class B Common Stock, payable on June 12, 2025[2] - The company achieved an absorption ratio of 128.6% in the first quarter[6][9] Management Commentary & Outlook Management cited significant industry headwinds from a freight recession and policy uncertainty, which softened new truck demand - Industry challenges in Q1 2025 were exacerbated by concerns over U.S. trade policy, tariffs, and emissions regulations, causing customers to adopt a cautious vehicle acquisition strategy[3] - The company's focus on sales to vocational and public sector customers, along with its "Ready to Roll" inventory program, helped outperform the industry[3] - The primary uncertainty for H2 2025 is the impact of potential tariffs and emissions regulations on freight volumes and vehicle pricing[5] - Aftermarket revenue was down year-over-year due to one less working day in 2025 and the completion of certain customer service projects in 2024[4] Operational Performance The company showed operational resilience with aftermarket services contributing 61.9% of total gross profit and vehicle sales outperforming the industry Aftermarket Products and Services Aftermarket revenues totaled $619.1 million, accounting for 61.9% of total gross profit despite a year-over-year decline Aftermarket Performance Q1 2025 | Metric | Value | | :--- | :--- | | Revenues | $619.1 million (-4.6% YoY) | | % of Total Gross Profit | 61.9% | | Absorption Ratio | 128.6% | - The company is actively monitoring potential parts supply chain disruptions that could result from proposed tariffs[11] - Strategic initiatives include growing the aftermarket salesforce, adding service technicians, and optimizing parts delivery and call center operations[10][11] Commercial Vehicle Sales The company's new Class 8 and Class 4-7 truck sales declines were less severe than the overall industry downturn U.S. New Class 8 Truck Sales - Q1 2025 | Metric | Rush Enterprises | Industry (ACT Research) | | :--- | :--- | :--- | | Units Sold | 3,154 | 51,938 | | YoY Change | -7.4% | -9.2% | | Market Share | 6.1% | N/A | U.S. New Class 4-7 Truck Sales - Q1 2025 | Metric | Rush Enterprises | Industry (ACT Research) | | :--- | :--- | :--- | | Units Sold | 3,204 | 56,988 | | YoY Change | Relatively Flat | -4.7% | | Market Share | 5.6% | N/A | - The company sold 1,769 used commercial vehicles in Q1 2025, a 2.7% decrease compared to Q1 2024[17] Leasing and Rental The Leasing and Rental division saw a 2.7% revenue increase to $90.3 million, driven by growth in full-service leasing - Leasing and Rental revenue was $90.3 million in Q1 2025, up 2.7% from Q1 2024[18] - The division operates over 10,100 trucks in its lease and rental fleet and has over 1,700 trucks under contract maintenance agreements[22] - Growth was driven by an increase in full-service leasing revenue, while rental revenue decreased slightly due to lower utilization[18] Financial Statements Consolidated financial statements for Q1 2025 show total assets of $4.69 billion and net income of $60.3 million Consolidated Balance Sheets Total assets grew to $4.69 billion as of March 31, 2025, with inventories increasing to $1.89 billion Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $2,434,389 | $2,389,715 | | Total assets | $4,687,941 | $4,617,547 | | Total current liabilities | $1,695,348 | $1,650,119 | | Total shareholders' equity | $2,187,584 | $2,161,903 | Consolidated Statements of Income For Q1 2025, total revenue was $1.85 billion, with net income attributable to the company falling to $60.3 million Consolidated Income Statement Highlights (in thousands) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total revenue | $1,850,830 | $1,871,999 | | Gross profit | $357,760 | $389,875 | | Operating income | $91,869 | $110,610 | | Net income attributable to Rush | $60,322 | $71,608 | | Diluted EPS | $0.73 | $0.88 | Non-GAAP Financial Measures The company uses non-GAAP measures like Adjusted EBITDA and Adjusted Free Cash Flow to assess performance and capital structure - Management believes these non-GAAP measures provide useful information about operating results and capital structure, cautioning they may not be comparable to other companies' measures[36] Absorption Ratio | Period | Ratio | | :--- | :--- | | Q1 2025 | 128.6% | | Q1 2024 | 130.1% | Debt Analysis (in thousands) | Metric | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Total Debt (GAAP) | $1,610,920 | $1,910,907 | | Adjusted Net Debt (Cash) (Non-GAAP) | $(225,148) | $(151,831) | EBITDA (in thousands, TTM) | Metric | TTM Ended Mar 31, 2025 | TTM Ended Mar 31, 2024 | | :--- | :--- | :--- | | EBITDA (Non-GAAP) | $517,312 | $557,220 | | Adjusted EBITDA (Non-GAAP) | $450,228 | $496,255 |