Rush Enterprises(RUSHA)2023-04-26 16:45Financial Data and Key Metrics Changes - The company reported first-quarter revenues of 90.5 million, translating to 648 million, up 19.3% year-over-year, with an absorption ratio of 136.5% [6][28] - Lease and rental revenue rose by 21.5% compared to the first quarter of 2022, indicating strong demand for leased vehicles [31] Business Line Data and Key Metrics Changes - Class 8 truck sales reached 4,365 units, capturing 6.4% of the US market and 2.2% in Canada, with a strong backlog expected to maintain sales levels [3] - Class 4-7 new truck sales totaled 3,038 units, representing 5.3% of the US market and 3.2% in Canada, with healthy demand across various segments [7] - Used truck sales declined to 1,684 units, down 29.7% year-over-year, attributed to increased new truck production [8] Market Data and Key Metrics Changes - ACT Research forecasts US Class 4-7 retail sales to be 253,600 units in 2023, an increase of 8.6% from 2022 [30] - The company anticipates that the overall financial results will remain strong through the rest of 2023, despite potential economic impacts [9] Company Strategy and Development Direction - The company is focusing on expanding its mobile service presence and supporting large national fleets, which is expected to drive aftermarket revenue growth [29][41] - Strategic initiatives have improved the quality of earnings and increased the absorption rate, indicating effective expense management [18][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the parts and service business, expecting continued growth despite potential moderation due to inflation [11][25] - The company plans to maintain a strong focus on long-term initiatives, including workforce expansion to support mobile services [29] Other Important Information - The company has increased its stock buyback program to 40 million executed since approval [23][38] - Management highlighted the importance of leveraging a large network to service customers effectively, even those who do not purchase trucks [55] Q&A Session Summary Question: Thoughts on parts and service growth for the remainder of the year - Management believes growth will moderate slightly but still expects to close the year in double digits [12] Question: Expected trend in SG&A and interest expense - SG&A is expected to stabilize in Q2, with interest expenses remaining similar to Q1 levels [15][16] Question: Market perception of valuation multiples - Management feels the market does not fully understand the strategic execution and quality of earnings improvements [17][18] Question: Progression of parts and service business - Management noted strong performance driven by strategic initiatives and a diverse customer base [39][41] Question: Economic outlook across different regions - Management reported strong performance in Florida, Texas, and California, with no weak spots identified [44][58]