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Rush Enterprises, Inc. Reports Third Quarter Results

Oct 20, 2010 (GlobeNewswire via COMTEX News Network) --

  --  Revenues up 38% compared to Q3 2009
  --  Diluted EPS $0.37, up 370% over prior year; Diluted EPS from continuing
      operations $0.21, up 168% compared to Q3 2009
  --  Company records second highest quarterly absorption rate of 109.1%
  --  Increases seen in Class 8 retail truck sales, sustainability remains

SAN ANTONIO, Texas, Oct. 20, 2010 (GLOBE NEWSWIRE) -- Rush Enterprises, Inc. (Nasdaq:RUSHA) (Nasdaq:RUSHB), which operates the largest network of commercial vehicle dealerships in North America, today announced results for the third quarter ended September 30, 2010.

In the third quarter ended September 30, 2010, the Company's gross revenues from continuing operations totaled $405.8 million, a 38.1% increase from gross revenues from continuing operations of $293.9 million reported for the third quarter ended September 30, 2009. Income from continuing operations for the quarter was $8.0 million, or $0.21 per diluted share, compared with income from continuing operations of $3.0 million, or $0.08 per diluted share, in the quarter ended September 30, 2009. The Company reported net income for the quarter of $14.2 million, or $0.37 per diluted share, compared with a net income of $3.0 million, or $0.08 per diluted share, in the quarter ended September 30, 2009.

On September 9, 2010, the Company sold the assets of its John Deere construction equipment business, including its Rush Equipment Centers in Houston and Beaumont, Texas, to Doggett Heavy Machinery Services, LLC. The construction equipment business recorded income from discontinued operations, net of tax, of $6.1 million ($0.16 per diluted share) during the third quarter of 2010, compared to $20,000 during the third quarter of 2009. A majority of the income from discontinued operations during the quarter is attributable to the gain on the sale of Rush Equipment Centers' assets.

The Company's truck segment recorded revenues of $401.7 million in the third quarter of 2010, compared to $289.8 million in the third quarter of 2009. The Company delivered 1,283 new heavy-duty trucks, 678 new medium-duty trucks and 899 used trucks during the third quarter of 2010, compared to 1,030 new heavy-duty trucks, 637 new medium-duty trucks and 760 used trucks in the third quarter of 2009. Parts, service and body shop sales revenue was $133.3 million in the third quarter of 2010, compared to $96.0 million in the third quarter of 2009.

"Despite the fact that general economic uncertainty continues to negatively impact demand for new trucks, we were able to increase new Class 8 truck deliveries by 25% as compared to the same quarter last year and 58% over the second quarter of 2010, reaching the highest levels of new Class 8 truck deliveries we've seen since the fourth quarter of 2008," said W. M. "Rusty" Rush, President and Chief Executive Officer for Rush Enterprises, Inc.

"Major oilfield and general freight fleet customers have gained enough confidence in their business outlook to begin to invest in new Class 8 trucks this quarter. New truck sales are clearly poised for a return to historically normal levels as customers have accepted the new emissions-compliant engine technology and pricing, and the age of the current fleet continues to drive the need for truck replacement," explained Rusty Rush.

"However, the sustainability of this increase in new truck retail sales activity is still in question. Until improvements are evident in major sectors that drive freight movement, like residential construction and capital goods manufacturing, new truck sales may remain volatile. However, used Class 8 truck sales and values are expected to remain strong for the foreseeable future," Rusty Rush said.

"Manufacturer production delays limited the availability of medium-duty trucks, which negatively impacted Rush's medium-duty truck sales this quarter. In addition, we continue to work to replace lost GM franchise revenues with other truck brands. To this end, we recently acquired a Ford and Isuzu dealership in Dallas. We have now acquired seven new medium-duty franchises since GM announced that it was discontinuing its medium-duty product line," continued Rusty Rush.

"Parts, service and body shop revenues continued to be strong throughout the third quarter, up 38% over Q3 2009 and approaching peak levels achieved prior to the downturn in 2008. This resulted in a third quarter absorption rate of 109.1%, the second highest quarterly absorption rate in the Company's history. As freight continues to increase and truck utilization remains high, we expect parts, service and body shop sales to continue to remain strong, impacted only by typical seasonality and fewer working days in November and December," added Rusty Rush.

"We are very encouraged by the performance of our recently acquired International and Ford franchises. We are excited about our expanding relationships with International and Ford and believe that there are opportunities for continued growth with these manufacturers. We continue to evaluate opportunities to extend our contiguous network of dealership locations into other parts of the country and expand the breadth of product we offer so that we can offer our solutions to new customers," said Rusty Rush.

"We are very proud of the company's strong financial performance this quarter. It appears that we may finally be approaching a turning point in the truck sales market. It is encouraging to see an uptick in truck sales activity to complement the increase in parts, service and body shop sales we've seen throughout 2010," concluded W. Marvin Rush, Chairman of Rush Enterprises, Inc.

                      Conference Call Information

Rush Enterprises will host its quarterly conference call to discuss earnings for the third quarter on Thursday, October 21, 2010, at 11 a.m. Eastern/10 a.m. Central. The call can be heard live by dialing 877-638-4557 (US) or 914-495-8522 (International) or via the Internet at

For those who cannot listen to the live broadcast, the webcast will be available on our website at the above link until February 15, 2011. Listen to the audio replay until October 28, 2010, by dialing 800-642-1687 (US) or 706-645-9291 (International) and entering the conference ID 15535467.

About Rush Enterprises, Inc.

Rush Enterprises, Inc. owns and operates the largest network of commercial vehicle dealerships in the United States, representing truck and bus manufacturers including Peterbilt, International, Hino, Isuzu, Ford, UD, Blue Bird, IC, Diamond and Elkhart. The Company's vehicle centers are strategically located in high traffic areas on or near major highways in 14 states throughout the southern and western United States. These one-stop centers offer an integrated approach to meeting customer needs -- from sales of new and used vehicles to aftermarket parts, service and body shop operations plus a wide array of financial services, including financing, insurance, leasing and rental. Rush Enterprises' operations also provide vehicle up-fitting, chrome accessories and tires. For more information, please visit

The Rush Enterprises, Inc. logo is available at

Certain statements contained herein, including those concerning current and projected truck industry and market conditions, sales forecasts, the Company's acquisition prospects, and the impact of general economic conditions are "forward-looking" statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, competitive factors, general U.S. economic conditions, economic conditions in the new and used commercial vehicle markets, customer relations, relationships with vendors, the interest rate environment, governmental regulation and supervision, product introductions and acceptance, changes in industry practices, onetime events and other factors described herein and in filings made by the Company with the Securities and Exchange Commission.

                        CONSOLIDATED BALANCE SHEETS
            (In Thousands, Except Shares and Per Share Amounts)

                                      September 30,       December 31,
                                          2010                2009
                                   ------------------  ------------------
  Current assets:
   Cash and cash equivalents                $ 150,902           $ 149,095
   Accounts receivable, net                    67,889              38,869
   Inventories, net                           335,995             252,219
   Prepaid expenses and other                   3,754               3,650
   Assets held for sale                            --              22,719

   Deferred income taxes, net                   9,670              11,414
                                   ------------------  ------------------
   Total current assets                       568,210             477,966
  Investments                                   7,575               7,575
  Property and equipment, net                 414,754             353,841
  Goodwill, net                               147,213             136,761

  Other assets, net                             6,972               1,154
                                   ------------------  ------------------

  Total assets                            $ 1,144,724           $ 977,297
                                   ==================  ==================

  Liabilities and shareholders'
  Current liabilities:
   Floor plan notes payable                 $ 252,383           $ 189,256
   Current maturities of
    long-term debt                             52,359              55,545
   Current maturities of capital
    lease obligations                           6,843               5,730
   Trade accounts payable                      37,533              22,427

   Accrued expenses                            64,511              40,843
                                   ------------------  ------------------
    Total current liabilities                 413,629             313,801
  Long-term debt, net of current
   maturities                                 193,159             153,957
  Capital lease obligations, net
   of current maturities                       30,170              28,714
  Other long-term liabilities                   1,114                  --
  Deferred income taxes, net                   53,910              54,600
  Shareholders' equity:
   Preferred stock, par value
    $.01 per share; 1,000,000
    shares authorized; 0 shares
   outstanding in 2010 and 2009                    --                  --
   Common stock, par value $.01
    per share; 60,000,000 class A
    shares and 20,000,000
   class B shares authorized;
    26,663,588 class A shares and
    10,693,641 class B shares
   outstanding in 2010; and
    26,437,848 class A shares and
    10,689,375 class B shares
   outstanding in 2009                            390                 388
   Additional paid-in capital                 193,227             188,116
   Treasury stock, at cost:
    1,639,843 class B shares                 (17,948)            (17,948)
   Retained earnings                          277,753             255,669
   Accumulated other
    comprehensive loss, net of
    tax                                         (680)                  --
                                   ------------------  ------------------

   Total shareholders' equity                 452,742             426,225
                                   ------------------  ------------------
    Total liabilities and
     shareholders' equity                 $ 1,144,724           $ 977,297
                                   ==================  ==================

                   (In Thousands, Except Per Share Amounts)

                                  Three Months Ended    Nine Months Ended
                                    September 30,         September 30,
                                 --------------------  --------------------

                                    2010       2009       2010       2009
                                 ---------  ---------  ---------  ---------

   New and used truck sales      $ 248,324  $ 179,121  $ 620,237  $ 562,263
   Parts and service               136,095     98,805    356,452    302,271
   Lease and rental                 18,254     13,300     48,541     40,012
   Finance and insurance             2,182      1,729      5,714      5,600

   Other                               986        986      4,024      3,857
                                 ---------  ---------  ---------  ---------
   Total revenue                   405,841    293,941  1,034,968    914,003
  Cost of products sold:
   New and used truck sales        228,864    167,396    570,027    530,069
   Parts and service                83,190     59,668    218,041    184,215

   Lease and rental                 15,590     11,756     41,461     35,273
                                 ---------  ---------  ---------  ---------

   Total cost of products sold     327,644    238,820    829,529    749,557
                                 ---------  ---------  ---------  ---------
  Gross profit                      78,197     55,121    205,439    164,446
  Selling, general and
   administrative                   60,392     50,340    165,677    149,257
  Depreciation and amortization      4,068      3,724     11,291     12,247

  Gain (loss) on sale of assets        (5)         88        (9)        166
                                 ---------  ---------  ---------  ---------
  Operating income                  13,732      1,145     28,462      3,108

  Interest expense, net              1,357      1,428      4,051      4,388
                                 ---------  ---------  ---------  ---------
  Income (loss) from continuing
   operations before taxes          12,375      (283)     24,411    (1,280)
  Provision (benefit) for
   income taxes                      4,344    (3,271)      9,042    (4,914)
                                 ---------  ---------  ---------  ---------
  Income from continuing
   operations                        8,031      2,988     15,369      3,634
  Income from discontinued
   operations, net of tax            6,128         20      6,715        716
                                 ---------  ---------  ---------  ---------

  Net income                      $ 14,159    $ 3,008   $ 22,084   $  4,350
                                 =========  =========  =========  =========

  Earnings per common share -
  Income from continuing
   operations                       $  .22     $  .08     $  .41     $  .10
  Net income                        $  .38     $  .08     $  .59     $  .12
  Earnings per common share -
  Income from continuing
   operations                     $    .21     $  .08     $  .40     $  .10
  Net income                       $   .37     $  .08     $  .58     $  .12

  Weighted average shares
   Basic                            37,350     37,110     37,271     37,047
   Diluted                          38,198     37,780     38,087     37,469

This news release was distributed by GlobeNewswire,

SOURCE: Rush Enterprises, Inc.

CONTACT:  Rush Enterprises, Inc., San Antonio
Steven L. Keller

(C) Copyright 2010 GlobeNewswire, Inc. All rights reserved.

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