Press Release Details
Rush Enterprises, Inc. Reports First Quarter Results
Apr 22, 2009 (GlobeNewswire via COMTEX News Network) --
* Company remains profitable despite historically tough market conditions * SG&A expenses down 8.6% from first quarter 2008 * First quarter absorption rate of 97.2%
SAN ANTONIO, April 22, 2009 (GLOBE NEWSWIRE) -- Rush Enterprises, Inc. (Nasdaq:RUSHA) (Nasdaq:RUSHB), which operates the largest network of commercial vehicle dealerships in North America and two John Deere construction equipment dealerships in Southeast Texas, today announced results for the first quarter ended March 31, 2009.
In the first quarter, the Company's gross revenues totaled $329.1 million, an 18.5% decrease from gross revenues of $403.9 million reported for the first quarter ended March 31, 2008. Net income for the quarter was $2.9 million, or $0.08 per diluted share, compared with net income of $9.7 million, or $0.25 per diluted share, in the quarter ended March 31, 2008.
The Company's truck segment recorded revenues of $313.0 million in the first quarter of 2009, compared to $376.7 million in the first quarter of 2008. The Company delivered 1,032 new heavy-duty trucks, 754 new medium-duty trucks and 577 used trucks during the first quarter of 2009, compared to 1,266 new heavy-duty trucks, 972 new medium-duty trucks and 900 used trucks in the first quarter of 2008. Parts, service and body shop sales revenue was $101.8 million in the first quarter of 2009 compared to $109.4 million in the first quarter of 2008.
The Company's construction equipment segment recorded revenues of $11.6 million in the first quarter of 2009, compared to $22.4 million in the first quarter of 2008. New and used construction equipment sales revenue decreased 58.6% to $7.0 million in the first quarter of 2009 from $16.9 million in the first quarter of 2008. Construction equipment parts, service and body shop sales decreased 13.5% to $4.5 million in the first quarter of 2009 from $5.2 million in the first quarter of 2008.
"Despite some of the toughest market conditions I have seen in more than 40 years in the business, Rush Enterprises remained profitable in the first quarter of 2009. We were able to remain profitable because we have actively monitored and reduced expenses throughout this downturn. Our employees deserve credit for remaining focused on serving our customers and continuing to demonstrate that they have the discipline to operate productively in a tightly expense-controlled environment for an extended period of time," said W. Marvin Rush, Chairman of Rush Enterprises, Inc.
"The ongoing recession more adversely impacted our aftermarket operations during the first quarter of 2009 than in any quarter that I can remember. Rush Truck Center aftermarket parts, service and body shop revenues decreased 6.4% and gross profit decreased 12.8%. This sharp decline in aftermarket gross profit caused our absorption rate to decrease to 97.2% from 104.9% in the first quarter of last year," added W.M. "Rusty" Rush, President and Chief Executive Officer of Rush Enterprises, Inc.
"Depressed consumer spending has hurt over-the-road freight tonnage, the freight-intensive automotive and construction industries remain depressed, and most recently the oil and gas industry has dramatically reduced expenditures due to the decrease in oil and gas prices. While our network of dealerships has been built to provide geographic and customer diversity, we do not see any strong pockets of activity right now. Decreased freight tonnage and overall weakness in almost every vocational market we serve creates excess capacity for our customers, which is allowing them to delay maintenance on the trucks they already own and purchases of new trucks," Rusty Rush explained.
"Currently, industry analysts forecast 2009 U.S. retail sales of Class 8 trucks to be 114,600 units, down 18% over 2008. However, we expect that 2009 sales of Class 8 units to be in the range of 100,000 to 110,000 units. We also believe U.S. retail sales of medium-duty trucks could be off as much as 20% compared to 2008. As expected, the first quarter of 2009 was one of the weakest quarters for U.S. Class 8 truck sales since 1991, and we anticipate truck sales to continue at a slow pace throughout the second quarter. Continued weak truck and aftermarket sales will likely cause the second quarter to be the most challenging operating period since this downturn began in 2007," Rusty Rush continued.
"However, we do believe demand for new Class 8 trucks will begin to increase during the second half of the year because of the current average age of trucks in operation, which is at a level last seen in the early 1990's, and due to the impending 2010 diesel emissions regulations, which may add as much as $10,000 to the cost of Class 8 trucks with engines manufactured after January 1, 2010. While depressed used truck values and tight credit continue to impede truck sales efforts, we are seeing increasing interest and requests for quotes from some of our customers. Unfortunately, economic uncertainty remains high and we are not in a position to predict when the economy will improve or when lenders will begin to ease credit requirements. We are hopeful that the increased interest we currently see will translate into improved truck sales in the second half of 2009," said Rusty Rush.
"We remain confident in our strategy and our employees' ability to execute going forward. We are hopeful that we will begin to see more definitive signs of an economic recovery, and we are well positioned for growth when this period of economic uncertainty ends," Rusty Rush concluded.
Conference Call Information
Rush Enterprises will host its quarterly conference call to discuss earnings for the first quarter on Thursday, April 23, 2009 at 11 a.m. Eastern/10 a.m. Central. The call can be heard live by dialing 877-723-9518 (U.S.) or 719-325-4841 (International) or via the Internet at http://investor.rushenterprises.com/events.cfm.
For those who cannot listen to the live broadcast, the webcast will be available on our website at the above link until July 15, 2009. Listen to the audio replay until April 30, 2009 by dialing 888-203-1112 (U.S.) or 719-457-0820 (International) and entering the replay pass code 1870145.
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, GMC, Hino, International, Isuzu, Ford, UD, Blue Bird, Diamond and Elkhart and two construction equipment dealerships in Texas representing John Deere construction equipment. The Company's vehicle and equipment centers are strategically located in high traffic areas on or near major highways in eleven states throughout the southern United States. These one-stop centers offer an integrated approach to meeting customer needs -- from sales of new and used vehicles and equipment 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 www.rushenterprises.com.
The Rush Enterprises, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3352
Certain statements contained herein, including those concerning current and projected truck industry and market conditions, sales and delivery forecasts, the Company's prospects, the availability of credit, cash flow expectations, anticipated results for 2009, the impact of diesel emissions regulations, 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 truck and construction equipment 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.
RUSH ENTERPRISES, INC. AND SUBSIDIARIES
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CONSOLIDATED BALANCE SHEETS
---------------------------
(In Thousands, Except Shares and Per Share Amounts)
March 31, December 31,
2009 2008
------------- -------------
(Unaudited)
Assets
------
Current assets:
Cash and cash equivalents $ 131,614 $ 146,411
Investments 7,575 7,575
Accounts receivable, net 52,557 55,274
Inventories, net 325,985 362,234
Prepaid expenses and other 2,460 3,369
Deferred income taxes, net 7,271 6,730
------------- -------------
Total current assets 527,462 581,593
Property and equipment, net 333,907 332,147
Goodwill, net 141,910 141,904
Other assets, net 1,122 1,146
------------- -------------
Total assets $ 1,004,401 $ 1,056,790
============= =============
Liabilities and shareholders' equity
------------------------------------
Current liabilities:
Floor plan notes payable $ 245,938 $ 282,702
Current maturities of long-term debt 43,754 37,665
Current maturities of capital lease
obligations 4,046 3,454
Trade accounts payable 24,902 31,530
Accrued expenses 40,536 49,125
------------- -------------
Total current liabilities 359,176 404,476
Long-term debt, net of current
maturities 157,834 172,011
Capital lease obligations, net of
current maturities 14,277 11,366
Deferred income taxes, net 52,550 52,896
Shareholders' equity:
Preferred stock, par value $.01 per
share; 1,000,000 shares authorized;
0 shares outstanding in 2009 and 2008 -- --
Common stock, par value $.01 per
share; 60,000,000 class A shares and
20,000,000 class B shares authorized;
26,482,069 class A shares and
12,325,737 class B shares issued and
26,330,443 class A shares and
10,685,894 class B shares outstanding
in 2009; 26,327,734 class A shares
and 12,324,987 class B shares issued
and 26,255,974 class A shares and
10,685,144 class B shares
outstanding in 2008 386 386
Additional paid-in capital 185,478 183,818
Treasury stock, at cost: 1,639,843
shares (17,948) (17,948)
Retained earnings 252,648 249,785
------------- -------------
Total shareholders' equity 420,564 416,041
------------- -------------
Total liabilities and shareholders'
equity $ 1,004,401 $ 1,056,790
============= =============
RUSH ENTERPRISES, INC. AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
(In Thousands, Except Per Share Amounts)
(Unaudited)
Three Months Ended
March 31,
--------------------------
2009 2008
----------- -----------
Revenues:
New and used truck sales $ 195,988 $ 251,426
Parts and service 109,218 117,580
Construction equipment sales 7,003 16,939
Lease and rental 13,476 13,024
Finance and insurance 1,715 3,604
Other 1,686 1,285
----------- -----------
Total revenue 329,086 403,858
Cost of products sold:
New and used truck sales 182,827 231,037
Parts and service 66,449 68,640
Construction equipment sales 6,182 15,180
Lease and rental 11,928 10,822
----------- -----------
Total cost of products sold 267,386 325,679
----------- -----------
Gross profit 61,700 78,179
Selling, general and administrative 52,051 56,945
Depreciation and amortization 3,978 3,875
----------- -----------
Operating income 5,671 17,359
Interest expense, net 1,624 1,927
Gain on sale of assets 55 49
----------- -----------
Income before taxes 4,102 15,481
Provision for income taxes 1,239 5,806
----------- -----------
Net income $ 2,863 $ 9,675
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Earnings per share:
Earnings per common share - Basic $ .08 $ .25
=========== ===========
Earnings per common share - Diluted $ .08 $ .25
=========== ===========
Weighted average shares outstanding:
Basic 36,991 38,373
=========== ===========
Diluted 37,274 38,989
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This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: Rush Enterprises, Inc.
Rush Enterprises, Inc., San Antonio
Steven L. Keller
830-626-5226
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