Sales Projections - The company expects U.S. Class 8 retail truck sales to reach 253,100 units in 2022, an 11.3% increase from 2021, with an anticipated market share of 6.1% to 6.4%, translating to approximately 15,500 to 16,200 new Class 8 trucks sold [70]. - For U.S. Class 4-7 retail commercial vehicle sales, the forecast is 230,500 units in 2022, representing a 7.7% decrease from 2021, with a market share of 4.6% to 4.8%, resulting in approximately 10,500 to 11,000 new Class 4-7 vehicles sold [71]. - The company anticipates selling approximately 1,700 light-duty vehicles and 7,000 to 7,500 used commercial vehicles in 2022 [72]. - The projections for new commercial vehicle sales and revenues include the dealership locations acquired from Summit Truck Group, LLC, and RTC Canada [75]. Revenue Expectations - Lease and rental revenue is expected to increase by 28% to 32% in 2022 compared to 2021 [72]. - Aftermarket Products and Services revenues are projected to rise by 25% to 30% in 2022 compared to 2021 [73]. Financial Performance - Total revenues increased by $475.2 million, or 36.1%, in Q2 2022 compared to Q2 2021, driven by strong freight demand and the Summit acquisition [99]. - Aftermarket Products and Services revenues rose by $152.8 million, or 34.3%, in Q2 2022 compared to Q2 2021, attributed to strong demand and the Summit acquisition [100]. - Revenues from new and used commercial vehicles increased by $301.0 million, or 37.8%, in Q2 2022 compared to Q2 2021, primarily due to strong demand and the Summit acquisition [101]. - Total revenues increased by $806.6 million, or 31.7%, in the first six months of 2022 compared to the same period in 2021 [121]. - Sales of new and used commercial vehicles increased by $489.0 million, or 31.6%, in the first six months of 2022 compared to the same period in 2021 [121]. Profitability Metrics - Gross profit increased by $103.4 million, or 38.2%, in Q2 2022 compared to Q2 2021, with gross profit as a percentage of sales rising to 20.9% from 20.6% [108]. - Gross profit increased by $204.1 million, or 39.6%, in the first six months of 2022, with gross profit as a percentage of sales rising to 21.5% [126]. Operational Efficiency - The absorption ratio for commercial vehicle dealerships was 136.4% in Q2 2022, up from 129.1% in Q2 2021, indicating improved operational efficiency [98]. - Gross margins from Aftermarket Products and Services operations increased to 38.6% in Q2 2022, up from 37.8% in Q2 2021, due to higher parts pricing and rebates [109]. - New heavy-duty truck sales gross margins improved to 9.9% in Q2 2022 from 9.1% in Q2 2021, driven by strong demand and favorable purchaser mix [110]. Market Challenges - The company continues to face supply chain issues impacting new commercial vehicle production and aftermarket parts availability due to the COVID-19 pandemic [69]. - The company is monitoring inflation and rising interest rates, which may negatively impact consumer spending and capital expenditures across supported industries [74]. Environmental Compliance - The company is subject to various environmental laws and regulations, which will incur ongoing capital and operating expenditures to ensure compliance [162]. - The company is subject to environmental regulations under the federal Resource Conservation and Recovery Act (RCRA) and comparable state statutes, which may impose compliance costs [163]. - The federal Clean Water Act and Clean Air Act impose requirements that could affect the company's operations and compliance costs [165]. - The company may face increased compliance costs and operational restrictions due to new environmental regulations aimed at reducing greenhouse gas emissions and promoting zero-emission vehicles [166]. - The company operates in states that have committed to ensuring that 100% of new Class 3 through 8 commercial vehicles are zero emission by 2050, with an interim target of 30% by 2030 [166]. Financial Position and Cash Flow - Cash and cash equivalents increased by $68.5 million during the six months ended June 30, 2022, compared to an increase of $3.9 million during the same period in 2021 [145]. - Net cash provided by operating activities for the first six months of 2022 was $58.2 million, primarily consisting of $202.7 million in net income and non-cash adjustments totaling $95.1 million [146]. - The backlog of commercial vehicle orders as of June 30, 2022, was approximately $3,682.9 million, up from $2,258.9 million on June 30, 2021, marking the largest backlog in the company's history [159]. - The company expects to fill the majority of its backlog orders during 2022 and the first quarter of 2023, assuming manufacturers can meet their production schedules [159]. - The company entered into a WF Credit Agreement for up to $250.0 million of revolving credit loans for capital expenditures, with approximately $150.1 million outstanding as of June 30, 2022 [152]. - The company anticipates funding capital expenditures through operating cash flows and has no other material commitments for capital expenditures as of June 30, 2022 [144].
Rush Enterprises(RUSHB) - 2022 Q2 - Quarterly Report