Rush Enterprises(RUSHB) - 2025 Q4 - Annual Report

Revenue Breakdown - Revenues from Aftermarket Products and Services accounted for approximately $2,523.0 million, or 33.9%, of total revenues for 2025, and 63.7% of gross profit[38] - New commercial vehicle sales represented approximately $4,139.8 million, or 55.7%, of total revenues in 2025, with Class 8 heavy-duty truck sales contributing $2,425.5 million, or 32.6%[41] - New medium-duty commercial vehicle sales accounted for approximately $1,271.1 million, or 17.1%, of total revenues for 2025[42] - Used commercial vehicle sales accounted for approximately $363.7 million, or 4.9%, of total revenues for 2025[44] - Vehicle leasing and rental revenues accounted for approximately $369.6 million, or 5.0%, of total revenues for 2025[45] - Financing and insurance product sales accounted for approximately $21.1 million, or 0.3%, of total revenues for 2025[46] - Warranty-related parts and service revenues accounted for approximately $182.7 million, or 2.5%, of total revenues for 2025[39] - Sales of new Peterbilt commercial vehicles accounted for approximately 26.1% of total revenues for 2025, while International commercial vehicles accounted for approximately 14.7%[83][85] - The company has entered into various dealership franchise agreements, with sales of new non-Peterbilt and non-International commercial vehicles accounting for approximately 11.1% of total revenues for 2025[86] Dealership Operations - The company operates 126 franchised Rush Truck Centers in 23 states and owns an 80% equity interest in Rush Truck Centres of Canada Limited, which operates 12 International dealerships and 2 IC Bus dealerships[26] - The company operates 55 franchised Rush Truck Leasing locations in 21 states and 5 locations in Ontario[28] - The company plans to continue expanding its dealership network by acquiring existing dealerships or opening new locations in areas where it does not already have a presence[35] - The company has developed certain dealerships as "one-stop centers" that provide an integrated approach to meeting customer needs, including service, parts, and financial services[36] - The company employs a branding program at its dealerships to standardize the quality of products and services across its network[36] Employee and Workforce Management - As of December 31, 2025, the company employed 7,355 people in the U.S. and 582 in Canada, with less than 1% classified as part-time[50] - The overall employee turnover rate was 26.0% in 2025, down from 30.5% in 2024, while the turnover rate for technicians was 35.0%, compared to 38.1% in 2024[66] - The company believes its employees are among the highest paid in the industry, which aids in attracting and retaining qualified personnel[73] - The company established a minimum hourly wage of $15.00 per hour and regularly conducts pay analyses to promote transparency and equality[56] - The company offers an employee stock purchase plan with a 15% discount on the purchase price of Class A common stock[58] - The company has established relationships with trade schools and universities to attract entry-level talent[53] - The Rush Foundational Leader Program focuses on developing key management and leadership skills across the organization[60] Financial Agreements and Credit - The PFC Floor Plan Credit Agreement has an aggregate loan commitment of $800 million, with approximately $380 million outstanding as of December 31, 2025[90] - The BMO Floor Plan Credit Agreement was amended to reduce the loan commitment from $1 billion to $675 million, with approximately $263.7 million outstanding as of December 31, 2025[91] - On December 31, 2025, approximately $81.7 million CAD was outstanding under the RTC Canada Floor Plan Credit Agreement[92] - On December 31, 2025, approximately $22.3 million was outstanding under the WF Credit Agreement[93] - On December 31, 2025, approximately $220.0 million was outstanding under the PLC Agreement[94] - On December 31, 2025, approximately $40.4 million CAD was outstanding under the RTC Canada Revolving Credit Agreement[95] Market Conditions and Competition - The company anticipates increased competition in both current and new markets, impacting its operational strategies and market positioning[82] - As of December 31, 2025, the backlog of commercial vehicle orders was approximately $1,109.6 million, down from $1,512.7 million on December 31, 2024, reflecting challenging industry conditions due to the freight recession[100] - The Truck Segment experiences moderate seasonality, with higher sales volumes in the second and third quarters historically attributed to Aftermarket Products and Services operations[99] - The diverse geographic locations of the company's dealerships help mitigate seasonal effects on new commercial vehicle sales[99] Environmental Compliance and Regulations - The company does not anticipate any material environmental liabilities, although soil and groundwater impacts are known to exist at some dealerships[105] - The EPA 2027 Low NOx rule, expected to take effect in January 2027, will require commercial vehicle engines to emit significantly less NOx than current standards[108] - The Clean Truck Partnership, involving CARB and various heavy-duty vehicle manufacturers, aims to comply with CARB's emission requirements, although its future is uncertain due to legal challenges[109] - The company is subject to various federal, state, and local environmental laws and regulations, which may require ongoing capital and operating expenditures[101] - The company is subject to rapidly changing federal and state laws regarding commercial vehicle engine emissions, which could affect demand for its products[106] - The EPA's repeal of the Endangerment Finding and the rescission of CARB's federal preemption waivers are currently facing multiple legal challenges[107] - If CARB prevails in its legal challenges, new laws and regulations may be required, potentially impacting the company's business[110] - Future changes in EPA policies regarding GHG emissions could lead to increased compliance costs and changes in demand for the company's products[110] Product and Service Offerings - The company offers a broad line of product selections for lease or rent, including Class 4 through Class 8 commercial vehicles, heavy-duty cranes, and refuse vehicles[28] - The company intends to expand its product lines within existing locations by adding complementary product categories and service capabilities[36] - The company provides limited warranties on its proprietary parts and services, as well as extended warranties on new Blue Bird school buses sold in Texas[96] - The company sells used commercial vehicles "as is" without a manufacturer's warranty, but customers can purchase third-party warranties[97] - The company utilizes a parts inventory distribution system that allows for prompt transfer of parts inventory among Rush Truck Centers, reducing delays in delivery[77]