rusha20220630_10q.htm
0001012019 RUSH ENTERPRISES INC \TX\ false --12-31 Q2 2022 0.01 0.01 1,000,000 1,000,000 0 0 0 0 0.01 0.01 60,000,000 60,000,000 20,000,000 20,000,000 43,808,333 12,266,309 43,107,867 12,398,606 979,978 927,330 339,786 492,052 0.19 0.18 1 3 4.3 279,000 0 2018 2019 2022 2021 2017 2018 2019 2020 2021 1 10 11 3 00010120192022-01-012022-06-30 xbrli:shares 0001012019us-gaap:CommonClassAMember2022-07-29 0001012019us-gaap:CommonClassBMember2022-07-29 0001012019us-gaap:CommonClassAMember2022-01-012022-06-30 0001012019us-gaap:CommonClassBMember2022-01-012022-06-30 iso4217:USD 00010120192022-06-30 00010120192021-12-31 iso4217:USDxbrli:shares 0001012019us-gaap:CommonClassAMember2022-06-30 0001012019us-gaap:CommonClassAMember2021-12-31 0001012019us-gaap:CommonClassBMember2022-06-30 0001012019us-gaap:CommonClassBMember2021-12-31 0001012019rusha:NewAndUsedCommercialVehicleMember2022-04-012022-06-30 0001012019rusha:NewAndUsedCommercialVehicleMember2021-04-012021-06-30 0001012019rusha:NewAndUsedCommercialVehicleMember2022-01-012022-06-30 0001012019rusha:NewAndUsedCommercialVehicleMember2021-01-012021-06-30 0001012019rusha:PartsAndServiceMember2022-04-012022-06-30 0001012019rusha:PartsAndServiceMember2021-04-012021-06-30 0001012019rusha:PartsAndServiceMember2022-01-012022-06-30 0001012019rusha:PartsAndServiceMember2021-01-012021-06-30 00010120192022-04-012022-06-30 00010120192021-04-012021-06-30 00010120192021-01-012021-06-30 0001012019rusha:FinanceAndInsuranceMember2022-04-012022-06-30 0001012019rusha:FinanceAndInsuranceMember2021-04-012021-06-30 0001012019rusha:FinanceAndInsuranceMember2022-01-012022-06-30 0001012019rusha:FinanceAndInsuranceMember2021-01-012021-06-30 0001012019us-gaap:ProductAndServiceOtherMember2022-04-012022-06-30 0001012019us-gaap:ProductAndServiceOtherMember2021-04-012021-06-30 0001012019us-gaap:ProductAndServiceOtherMember2022-01-012022-06-30 0001012019us-gaap:ProductAndServiceOtherMember2021-01-012021-06-30 0001012019us-gaap:CommonClassAMemberus-gaap:CommonStockMember2021-12-31 0001012019us-gaap:CommonClassBMemberus-gaap:CommonStockMember2021-12-31 0001012019us-gaap:CommonStockMember2021-12-31 0001012019us-gaap:AdditionalPaidInCapitalMember2021-12-31 0001012019us-gaap:TreasuryStockMember2021-12-31 0001012019us-gaap:RetainedEarningsMember2021-12-31 0001012019us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-31 0001012019us-gaap:ParentMember2021-12-31 0001012019us-gaap:CommonClassAMemberus-gaap:CommonStockMember2022-01-012022-03-31 0001012019us-gaap:CommonStockMember2022-01-012022-03-31 0001012019us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-31 0001012019us-gaap:ParentMember2022-01-012022-03-31 00010120192022-01-012022-03-31 0001012019us-gaap:CommonClassBMemberus-gaap:CommonStockMember2022-01-012022-03-31 0001012019us-gaap:TreasuryStockMember2022-01-012022-03-31 0001012019us-gaap:CommonClassAMemberus-gaap:RetainedEarningsMember2022-01-012022-03-31 0001012019us-gaap:CommonClassAMemberus-gaap:ParentMember2022-01-012022-03-31 0001012019us-gaap:CommonClassAMember2022-01-012022-03-31 0001012019us-gaap:CommonClassBMemberus-gaap:RetainedEarningsMember2022-01-012022-03-31 0001012019us-gaap:CommonClassBMemberus-gaap:ParentMember2022-01-012022-03-31 0001012019us-gaap:CommonClassBMember2022-01-012022-03-31 0001012019us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-31 0001012019us-gaap:RetainedEarningsMember2022-01-012022-03-31 0001012019us-gaap:CommonClassAMemberus-gaap:CommonStockMember2022-03-31 0001012019us-gaap:CommonClassBMemberus-gaap:CommonStockMember2022-03-31 0001012019us-gaap:CommonStockMember2022-03-31 0001012019us-gaap:AdditionalPaidInCapitalMember2022-03-31 0001012019us-gaap:TreasuryStockMember2022-03-31 0001012019us-gaap:RetainedEarningsMember2022-03-31 0001012019us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-31 0001012019us-gaap:ParentMember2022-03-31 00010120192022-03-31 0001012019us-gaap:CommonClassAMemberus-gaap:CommonStockMember2022-04-012022-06-30 0001012019us-gaap:CommonStockMember2022-04-012022-06-30 0001012019us-gaap:AdditionalPaidInCapitalMember2022-04-012022-06-30 0001012019us-gaap:ParentMember2022-04-012022-06-30 0001012019us-gaap:CommonClassBMemberus-gaap:CommonStockMember2022-04-012022-06-30 0001012019us-gaap:TreasuryStockMember2022-04-012022-06-30 0001012019us-gaap:CommonClassAMemberus-gaap:RetainedEarningsMember2022-04-012022-06-30 0001012019us-gaap:CommonClassAMemberus-gaap:ParentMember2022-04-012022-06-30 0001012019us-gaap:CommonClassAMember2022-04-012022-06-30 0001012019us-gaap:CommonClassBMemberus-gaap:RetainedEarningsMember2022-04-012022-06-30 0001012019us-gaap:CommonClassBMemberus-gaap:ParentMember2022-04-012022-06-30 0001012019us-gaap:CommonClassBMember2022-04-012022-06-30 0001012019us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-04-012022-06-30 0001012019us-gaap:NoncontrollingInterestMember2022-04-012022-06-30 0001012019us-gaap:RetainedEarningsMember2022-04-012022-06-30 0001012019us-gaap:CommonClassAMemberus-gaap:CommonStockMember2022-06-30 0001012019us-gaap:CommonClassBMemberus-gaap:CommonStockMember2022-06-30 0001012019us-gaap:CommonStockMember2022-06-30 0001012019us-gaap:AdditionalPaidInCapitalMember2022-06-30 0001012019us-gaap:TreasuryStockMember2022-06-30 0001012019us-gaap:RetainedEarningsMember2022-06-30 0001012019us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-30 0001012019us-gaap:ParentMember2022-06-30 0001012019us-gaap:NoncontrollingInterestMember2022-06-30 0001012019us-gaap:CommonClassAMemberus-gaap:CommonStockMember2020-12-31 0001012019us-gaap:CommonClassBMemberus-gaap:CommonStockMember2020-12-31 0001012019us-gaap:CommonStockMember2020-12-31 0001012019us-gaap:AdditionalPaidInCapitalMember2020-12-31 0001012019us-gaap:TreasuryStockMember2020-12-31 0001012019us-gaap:RetainedEarningsMember2020-12-31 0001012019us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-31 0001012019us-gaap:ParentMember2020-12-31 00010120192020-12-31 0001012019us-gaap:CommonClassAMemberus-gaap:CommonStockMember2021-01-012021-03-31 0001012019us-gaap:CommonClassBMemberus-gaap:CommonStockMember2021-01-012021-03-31 0001012019us-gaap:CommonStockMember2021-01-012021-03-31 0001012019us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-31 0001012019us-gaap:TreasuryStockMember2021-01-012021-03-31 0001012019us-gaap:RetainedEarningsMember2021-01-012021-03-31 0001012019us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-31 0001012019us-gaap:ParentMember2021-01-012021-03-31 00010120192021-01-012021-03-31 0001012019us-gaap:CommonClassAMemberus-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-31 0001012019us-gaap:CommonClassAMemberus-gaap:TreasuryStockMember2021-01-012021-03-31 0001012019us-gaap:CommonClassAMemberus-gaap:RetainedEarningsMember2021-01-012021-03-31 0001012019us-gaap:CommonClassAMemberus-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-31 0001012019us-gaap:CommonClassAMemberus-gaap:ParentMember2021-01-012021-03-31 0001012019us-gaap:CommonClassAMember2021-01-012021-03-31 0001012019us-gaap:CommonClassBMemberus-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-31 0001012019us-gaap:CommonClassBMemberus-gaap:TreasuryStockMember2021-01-012021-03-31 0001012019us-gaap:CommonClassBMemberus-gaap:RetainedEarningsMember2021-01-012021-03-31 0001012019us-gaap:CommonClassBMemberus-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-31 0001012019us-gaap:CommonClassBMemberus-gaap:ParentMember2021-01-012021-03-31 0001012019us-gaap:CommonClassBMember2021-01-012021-03-31 0001012019us-gaap:CommonClassAMemberus-gaap:CommonStockMember2021-03-31 0001012019us-gaap:CommonClassBMemberus-gaap:CommonStockMember2021-03-31 0001012019us-gaap:CommonStockMember2021-03-31 0001012019us-gaap:AdditionalPaidInCapitalMember2021-03-31 0001012019us-gaap:TreasuryStockMember2021-03-31 0001012019us-gaap:RetainedEarningsMember2021-03-31 0001012019us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-31 0001012019us-gaap:ParentMember2021-03-31 00010120192021-03-31 0001012019us-gaap:CommonClassAMemberus-gaap:CommonStockMember2021-04-012021-06-30 0001012019us-gaap:CommonClassBMemberus-gaap:CommonStockMember2021-04-012021-06-30 0001012019us-gaap:CommonStockMember2021-04-012021-06-30 0001012019us-gaap:AdditionalPaidInCapitalMember2021-04-012021-06-30 0001012019us-gaap:TreasuryStockMember2021-04-012021-06-30 0001012019us-gaap:RetainedEarningsMember2021-04-012021-06-30 0001012019us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-04-012021-06-30 0001012019us-gaap:ParentMember2021-04-012021-06-30 0001012019us-gaap:CommonClassAMemberus-gaap:AdditionalPaidInCapitalMember2021-04-012021-06-30 0001012019us-gaap:CommonClassAMemberus-gaap:TreasuryStockMember2021-04-012021-06-30 0001012019us-gaap:CommonClassAMemberus-gaap:RetainedEarningsMember2021-04-012021-06-30 0001012019us-gaap:CommonClassAMemberus-gaap:AccumulatedOtherComprehensiveIncomeMember2021-04-012021-06-30 0001012019us-gaap:CommonClassAMemberus-gaap:ParentMember2021-04-012021-06-30 0001012019us-gaap:CommonClassAMember2021-04-012021-06-30 0001012019us-gaap:CommonClassBMemberus-gaap:AdditionalPaidInCapitalMember2021-04-012021-06-30 0001012019us-gaap:CommonClassBMemberus-gaap:TreasuryStockMember2021-04-012021-06-30 0001012019us-gaap:CommonClassBMemberus-gaap:RetainedEarningsMember2021-04-012021-06-30 0001012019us-gaap:CommonClassBMemberus-gaap:AccumulatedOtherComprehensiveIncomeMember2021-04-012021-06-30 0001012019us-gaap:CommonClassBMemberus-gaap:ParentMember2021-04-012021-06-30 0001012019us-gaap:CommonClassBMember2021-04-012021-06-30 0001012019us-gaap:CommonClassAMemberus-gaap:CommonStockMember2021-06-30 0001012019us-gaap:CommonClassBMemberus-gaap:CommonStockMember2021-06-30 0001012019us-gaap:CommonStockMember2021-06-30 0001012019us-gaap:AdditionalPaidInCapitalMember2021-06-30 0001012019us-gaap:TreasuryStockMember2021-06-30 0001012019us-gaap:RetainedEarningsMember2021-06-30 0001012019us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-30 0001012019us-gaap:ParentMember2021-06-30 00010120192021-06-30 xbrli:pure 0001012019rusha:RushTruckCentresOfCanadaLimitedMember2019-02-25 0001012019rusha:RushTruckCentresOfCanadaLimitedMemberrusha:RushTruckCentresOfCanadaLimitedMember2022-06-30 0001012019rusha:RushTruckCentresOfCanadaLimitedMember2022-05-022022-05-02 0001012019rusha:RushTruckCentresOfCanadaLimitedMember2022-06-30 0001012019us-gaap:CallOptionMemberrusha:RushTruckCentresOfCanadaLimitedMember2019-02-25 0001012019rusha:MomentumFuelTechnologiesMember2022-01-032022-01-03 0001012019us-gaap:OtherIncomeMemberrusha:MomentumFuelTechnologiesMember2022-01-032022-01-03 0001012019rusha:MomentumFuelTechnologiesMember2022-06-30 00010120192021-01-102021-06-30 0001012019us-gaap:EmployeeStockOptionMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2022-04-012022-06-30 0001012019us-gaap:EmployeeStockOptionMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2021-04-012021-06-30 0001012019us-gaap:EmployeeStockOptionMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2022-01-012022-06-30 0001012019us-gaap:EmployeeStockOptionMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2021-01-012021-06-30 0001012019us-gaap:EmployeeStockOptionMember2022-06-30 utr:Y 0001012019us-gaap:EmployeeStockOptionMember2022-01-012022-06-30 0001012019us-gaap:RestrictedStockMember2022-06-30 0001012019us-gaap:RestrictedStockMember2022-01-012022-06-30 0001012019rusha:TruckSegmentMember2022-01-012022-03-31 0001012019us-gaap:AllOtherSegmentsMember2022-01-012022-03-31 0001012019rusha:TruckSegmentMember2022-04-012022-06-30 0001012019us-gaap:AllOtherSegmentsMember2022-04-012022-06-30 0001012019rusha:TruckSegmentMember2022-06-30 0001012019us-gaap:AllOtherSegmentsMember2022-06-30 0001012019rusha:TruckSegmentMember2022-01-012022-06-30 0001012019us-gaap:AllOtherSegmentsMember2022-01-012022-06-30 0001012019rusha:TruckSegmentMember2021-04-012021-06-30 0001012019us-gaap:AllOtherSegmentsMember2021-04-012021-06-30 0001012019rusha:TruckSegmentMember2021-06-30 0001012019us-gaap:AllOtherSegmentsMember2021-06-30 0001012019rusha:TruckSegmentMember2021-01-012021-06-30 0001012019us-gaap:AllOtherSegmentsMember2021-01-012021-06-30 thunderdome:item 0001012019us-gaap:DomesticCountryMember2022-01-012022-06-30 0001012019us-gaap:StateAndLocalJurisdictionMember2022-01-012022-06-30 0001012019rusha:CommercialVehicleMember2022-04-012022-06-30 0001012019rusha:CommercialVehicleMember2021-04-012021-06-30 0001012019rusha:CommercialVehicleMember2022-01-012022-06-30 0001012019rusha:CommercialVehicleMember2021-01-012021-06-30 0001012019rusha:PartsMember2022-04-012022-06-30 0001012019rusha:PartsMember2021-04-012021-06-30 0001012019rusha:PartsMember2022-01-012022-06-30 0001012019rusha:PartsMember2021-01-012021-06-30 0001012019rusha:CommercialVehicleRepairServiceMember2022-04-012022-06-30 0001012019rusha:CommercialVehicleRepairServiceMember2021-04-012021-06-30 0001012019rusha:CommercialVehicleRepairServiceMember2022-01-012022-06-30 0001012019rusha:CommercialVehicleRepairServiceMember2021-01-012021-06-30 0001012019us-gaap:FinancialServiceMember2022-04-012022-06-30 0001012019us-gaap:FinancialServiceMember2021-04-012021-06-30 0001012019us-gaap:FinancialServiceMember2022-01-012022-06-30 0001012019us-gaap:FinancialServiceMember2021-01-012021-06-30 0001012019rusha:InsuranceMember2022-04-012022-06-30 0001012019rusha:InsuranceMember2021-04-012021-06-30 0001012019rusha:InsuranceMember2022-01-012022-06-30 0001012019rusha:InsuranceMember2021-01-012021-06-30 0001012019srt:MinimumMember2022-01-012022-06-30 0001012019srt:MaximumMember2022-01-012022-06-30 0001012019us-gaap:AccumulatedTranslationAdjustmentMember2022-01-012022-03-31 0001012019rusha:ReclassificationOfForeignCurrencyTranslationMember2022-04-012022-06-30 0001012019us-gaap:AccumulatedTranslationAdjustmentMember2022-04-012022-06-30 0001012019rusha:CommercialVehicleReceivablesMember2021-12-31 0001012019rusha:CommercialVehicleReceivablesMember2022-01-012022-06-30 0001012019rusha:CommercialVehicleReceivablesMember2022-06-30 0001012019rusha:ManufacturersReceivablesMember2021-12-31 0001012019rusha:ManufacturersReceivablesMember2022-01-012022-06-30 0001012019rusha:ManufacturersReceivablesMember2022-06-30 0001012019rusha:LeasingPartsAndServiceReceivablesMember2021-12-31 0001012019rusha:LeasingPartsAndServiceReceivablesMember2022-01-012022-06-30 0001012019rusha:LeasingPartsAndServiceReceivablesMember2022-06-30 0001012019rusha:OtherReceivablesMember2021-12-31 0001012019rusha:OtherReceivablesMember2022-01-012022-06-30 0001012019rusha:OtherReceivablesMember2022-06-30 0001012019rusha:AssetPurchaseAgreementWithSummitMember2021-12-132021-12-13 0001012019rusha:AssetPurchaseAgreementWithSummitMember2021-12-13 0001012019rusha:RtcCanadaMember2022-05-02 0001012019rusha:RtcCanadaMember2022-05-022022-05-02 0001012019rusha:RtcCanadaMemberrusha:OtherIncomeExpenseMember2022-05-022022-05-02 0001012019rusha:RtcCanadaMemberrusha:RtcCanadaMember2022-05-02 0001012019rusha:RtcCanadaMemberus-gaap:MeasurementInputDiscountRateMember2022-05-02 0001012019rusha:RtcCanadaMemberus-gaap:MeasurementInputLongTermRevenueGrowthRateMember2022-05-02 0001012019rusha:RtcCanadaMember2022-05-01 0001012019rusha:RtcCanadaMember2022-05-02
 

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2022

 

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from _____________________ to _______________________

 

Commission File Number 0-20797

 

RUSH ENTERPRISES, INC.

(Exact name of registrant as specified in its charter)

 

Texas74-1733016

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer Identification No.)

 

555 I.H. 35 South, Suite 500

New Braunfels, Texas 78130

(Address of principal executive offices)

(Zip Code)

 

(830) 302-5200

(Registrant’s telephone number, including area code)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☑                  No ☐

 

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☑                  No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filerAccelerated filer ☐Non-accelerated filer ☐Smaller Reporting company
   Emerging growth company 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes                   No ☑

 

Indicated below is the number of shares outstanding of each of the issuer’s classes of common stock, as of July 29, 2022.

 

Title of Class

Number of Shares

Outstanding

Class A Common Stock, $.01 Par Value42,880,529
Class B Common Stock, $.01 Par Value12,109,484

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A Common Stock, $0.01 par value

RUSHA

NASDAQ Global Select Market

Class B Common Stock, $0.01 par value

RUSHB

NASDAQ Global Select Market

 

 

 

 

RUSH ENTERPRISES, INC. AND SUBSIDIARIES

 

INDEX

 

 

PART I. FINANCIAL INFORMATION Page
       
  Item 1. Financial Statements  
       
    Consolidated Balance Sheets - June 30, 2022 (unaudited) and December 31, 2021 3
       
   

Consolidated Statements of Income - For the Three and Six Months Ended June 30, 2022 and 2021 (unaudited)

4
       
   

Consolidated Statements of Comprehensive Income - For the Three and Six Months Ended June 30, 2022 and 2021 (unaudited)

5
       
   

Consolidated Statements of Shareholders’ Equity – For the Three and Six Months Ended June 30, 2022 and 2021 (unaudited)

6
       
   

Consolidated Statements of Cash Flows - For the Six Months Ended June 30, 2022 and 2021 (unaudited)

8
       
    Notes to Consolidated Financial Statements (unaudited) 9
       
  Item 2. 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

16
       
  Item 3. Quantitative and Qualitative Disclosures About Market Risk 31
       
  Item 4. Controls and Procedures 31
       
PART II. OTHER INFORMATION  
       
  Item 1.  Legal Proceedings 31
       
  Item 1A. Risk Factors 31
       
  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 32
       
  Item 3. Defaults Upon Senior Securities 32
       
  Item 4. Mine Safety Disclosures 32
       
  Item 5. Other Information 32
       
  Item 6. Exhibits 33
       
SIGNATURES 34

  

 

 

 

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements.

 

RUSH ENTERPRISES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

JUNE 30, 2022 AND DECEMBER 31, 2021

(In Thousands, Except Shares)

 

  

June 30,

  

December 31,

 
  

2022

  

2021

 
  

(unaudited)

     

Assets

        

Current assets:

        

Cash and cash equivalents

 $216,694  $148,146 

Accounts receivable, net

  232,129   140,186 

Inventories, net

  1,273,969   1,020,136 

Prepaid expenses and other

  19,959   15,986 

Total current assets

  1,742,751   1,324,454 

Property and equipment, net

  1,347,748   1,278,207 

Operating lease right-of-use assets, net

  106,301   69,008 

Goodwill, net

  418,270   370,331 

Other assets, net

  54,299   77,977 

Total assets

 $3,669,369  $3,119,977 
         

Liabilities and shareholders equity

        

Current liabilities:

        

Floor plan notes payable

 $851,715  $630,731 

Current maturities of finance lease obligations

  26,388   26,695 

Current maturities of operating lease obligations

  15,406   12,096 

Trade accounts payable

  175,563   122,291 

Customer deposits

  73,768   80,561 

Accrued expenses

  156,713   131,130 

Total current liabilities

  1,299,553   1,003,504 

Long-term debt, net of current maturities

  401,760   334,926 

Finance lease obligations, net of current maturities

  82,204   89,835 

Operating lease obligations, net of current maturities

  92,076   57,976 

Other long-term liabilities

  19,876   26,514 

Deferred income taxes, net

  144,589   140,473 

Shareholders’ equity:

        

Preferred stock, par value $.01 per share; 1,000,000 shares authorized; 0 shares outstanding in 2022 and 2021

      

Common stock, par value $.01 per share; 60,000,000 Class A shares and 20,000,000 Class B shares authorized; 42,808,333 Class A shares and 12,266,309 Class B shares outstanding in 2022; and 43,107,867 Class A shares and 12,398,606 Class B shares outstanding in 2021

  570   563 

Additional paid-in capital

  488,170   470,750 

Treasury stock, at cost: 979,978 Class A shares and 927,330 Class B shares in 2022; and 339,786 Class A shares and 492,052 Class B shares in 2021

  (90,686)  (36,933)

Retained earnings

  1,212,919   1,031,582 

Accumulated other comprehensive income

  64   787 

Total Rush Enterprises, Inc. shareholders’ equity

  1,611,037   1,466,749 

Noncontrolling interest

  18,274    

Total shareholders’ equity

  1,629,311   1,466,749 

Total liabilities and shareholders equity

 $3,669,369  $3,119,977 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

 

RUSH ENTERPRISES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In Thousands, Except Per Share Amounts)

(Unaudited)

 

  

Three Months Ended

June 30,

  

Six Months Ended

June 30,

 
  

2022

  

2021

  

2022

  

2021

 
                 

Revenues

                

New and used commercial vehicle sales

 $1,098,255  $797,269  $2,033,974  $1,544,988 

Aftermarket products and services sales

  598,298   445,526   1,141,561   861,263 

Lease and rental sales

  80,538   61,396   151,873   119,623 

Finance and insurance

  7,755   7,407   15,280   13,872 

Other

  6,395   4,417   11,755   8,075 

Total revenue

  1,791,241   1,316,015   3,354,443   2,547,821 

Cost of products sold

                

New and used commercial vehicle sales

  994,406   719,768   1,829,399   1,396,860 

Aftermarket products and services sales

  367,284   277,078   701,492   538,920 

Lease and rental sales

  55,335   48,387   103,896   96,445 

Total cost of products sold

  1,417,025   1,045,233   2,634,787   2,032,225 

Gross profit

  374,216   270,782   719,656   515,596 

Selling, general and administrative expense

  225,327   184,734   449,774   359,689 

Depreciation and amortization expense

  13,910   13,421   27,584   27,147 

Gain on sale of assets

  44   164   224   256 

Operating income

  135,023   72,791   242,522   129,016 

Other income

  8,333   1,746   22,397   2,665 

Interest (income) expense, net

  3,168   (212)  4,387   295 

Income before taxes

  140,188   74,749   260,532   131,386 

Income tax provision

  29,515   16,705   57,406   28,009 

Net income

  110,673   58,044   203,126   103,377 

Less: Net income attributable to noncontrolling interest

  446      446    

Net income attributable to Rush Enterprises, Inc.

 $110,227  $58,044  $202,680  $103,377 
                 

Net income attributable to Rush Enterprises, Inc. per share of common stock:

                

Basic

 $1.98  $1.04  $3.63  $1.85 

Diluted

 $1.92  $1.00  $3.52  $1.79 
                 

Weighted average shares outstanding:

                

Basic

  55,640   56,009   55,788   55,819 

Diluted

  57,310   57,956   57,610   57,846 
                 

Dividends declared per common share

 $0 .19  $0 .18  $0.38  $0.36 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

 

RUSH ENTERPRISES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands)

(Unaudited)

 

  

Three Months Ended

  

Six Months Ended

 
  

June 30, 2022

  

June 30, 2021

  

June 30, 2022

  

June 30, 2021

 
                 

Net income

 $110,673  $58,044  $203,126  $103,377 

Other comprehensive income (loss), net of tax:

                

Foreign currency translation

  (567)  312   (122)  567 

Reclassification of currency translation related to equity method accounting

  (601)     (601)   

Other comprehensive income (loss) attributable to Rush Enterprises, Inc.

  (1,168)  312   (723)  567 

Comprehensive income

 $109,505  $58,356  $202,403  $103,944 
                 

Comprehensive income attributable to Rush Enterprises, Inc.

  109,059   58,356   201,957   103,944 

Comprehensive income attributable to noncontrolling interest

  446      446    

Comprehensive income

 $109,505  $58,356  $202,403  $103,944 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

 

RUSH ENTERPRISES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY

(In Thousands)

(Unaudited)

 

  

Common Stock

Shares

Outstanding

  

$0.01

Par

  

Additional

Paid -In

  

Treasury

  

Retained

  

Accumulated

Other

Comprehensive

  

Total

Rush

Enterprises,

Inc.

Shareholders’

  

Noncontrolling

  

Total

Shareholders’

 
  Class A  Class B  Value  Capital  Stock  Earnings  Income (Loss)  Equity  Interest  Equity 
                                         

Balance, December 31, 2021

  43,108   12,399  $563  $470,750  $(36,933) $1,031,582  $787  $1,466,749     $1,466,749 

Stock options exercised and stock awards

  112      1   2,384            2,385      2,385 

Stock-based compensation related to stock options, restricted shares and employee stock purchase plan

           13,793            13,793      13,793 

Vesting of restricted share awards

     302   3   (7,215)           (7,212)     (7,212)

Issuance of common stock under employee stock purchase plan

  66      1   2,434            2,435      2,435 

Common stock repurchases

  (192)  (104)        (15,315)        (15,315)     (15,315)

Dividend Class A common stock

                 (8,189) 

––

   (8,189)     (8,189)

Dividend Class B common stock

                 (2,505) 

––

   (2,505)     (2,505)

Foreign currency translation adjustment

                    445   445      445 

Net income

                 92,453      92,453      92,453 

Balance, March 31, 2022

  43,094   12,597  $568  $482,146  $(52,248) $1,113,341  $1,232  $1,545,039     $1,545,039 

Stock options exercised and stock awards

  162      2   3,244            3,246      3,246 

Stock-based compensation related to stock options, restricted shares and employee stock purchase plan

           4,203            4,203      4,203 

Vesting of restricted share awards

           (1,423)           (1,423)     (1,423)

Common stock repurchases

  (448)  (331)        (38,438)        (38,438)     (38,438)

Dividend Class A common stock

                 (8,128) 

––

   (8,128)     (8,128)

Dividend Class B common stock

                 (2,521) 

––

   (2,521)     (2,521)

Foreign currency translation adjustment

                    (567)  (567)     (567)

Reclassification of foreign currency translation related to equity method

                    (601)  (601)     (601)

Noncontrolling interest equity

                          17,828   17,828 

Net income

                 110,227      110,227   446   110,673 

Balance, June 30, 2022

  42,808   12,266  $570  $488,170  $(90,686) $1,212,919  $64  $1,611,037  $18,274  $1,629,311 

 

 

 
  

Common Stock

Shares

Outstanding

  

$0.01

Par

  

Additional

Paid -In

  

Treasury

  

Retained

  

Accumulated

Other

Comprehensive

  

Total

Rush

Enterprises,

Inc.

Shareholders’

  

Noncontrolling

  

Total

Shareholders’

 
  Class A  Class B  Value  Capital  Stock  Earnings  Income (Loss)  Equity  Interest  Equity 
                                         

Balance, December 31, 2020

  42,504   12,470  $551  $437,646  $(2,879) $831,850  $869  $1,268,037     $1,268,037 

Stock options exercised and stock awards

  298      3   5,416            5,419      5,419 

Stock-based compensation related to stock options, restricted shares and employee stock purchase plan

           11,520            11,520      11,520 

Vesting of restricted share awards

     345   3   (6,780)           (6,777)     (6,777)

Issuance of common stock under employee stock purchase plan

  86      1   1,988            1,989      1,989 

Common stock repurchases

  (3)  (155)        (6,483)        (6,483)     (6,483)

Dividend Class A common stock

                 (7,684) 

––

   (7,684)     (7,684)

Dividend Class B common stock

                 (2,380) 

––

   (2,380)     (2,380)

Other comprehensive income

                    255   255      255 

Net income

                 45,333      45,333      45,333 

Balance, March 31, 2021

  42,885   12,660  $558  $449,790  $(9,362) $867,119  $1,124  $1,309,229     $1,309,229 

Stock options exercised and stock awards

  219      2   3,926            3,928      3,928 

Stock-based compensation related to stock options, restricted shares and employee stock purchase plan

           3,683            3,683      3,683 

Vesting of restricted share awards

           (614)           (614)     (614)

Common stock repurchases

     (99)        (4,223)        (4,223)     (4,223)

Dividend Class A common stock

                 (7,735) 

––

   (7,735)     (7,735)

Dividend Class B common stock

                 (2,425) 

––

   (2,425)     (2,425)

Other comprehensive income

                    312   312      312 

Net income

                 58,044      58,044      58,044 

Balance, June 30, 2021

  43,104   12,561  $560  $456,785  $(13,585) $915,003  $1,436  $1,360,199     $1,360,199 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

 

RUSH ENTERPRISES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

(Unaudited)

 

  

Six Months Ended

 
  

June 30,

 
  

2022

  

2021

 

Cash flows from operating activities:

        

Net income

 $202,680  $103,377 

Adjustments to reconcile net income to net cash provided by operating activities-

        

Depreciation and amortization

  95,122   84,891 

Gain on sale of property and equipment, net

  (224)  (256)

Gain on joint venture transaction

  (12,500)   

Gain on business acquisition

  (6,958)   

Stock-based compensation expense related to employee equity awards and employee stock purchases

  17,996   15,203 

Deferred income tax expense

  4,116   (14,602)

Change in accounts and notes receivable, net

  (85,110)  12,046 

Change in inventories, net

  (193,046)  76,772 

Change in prepaid expenses and other, net

  (1,922)  (1,255)

Change in trade accounts payable

  33,307   12,376 

Change in customer deposits

  (8,773)  (23,725)

Change in accrued expenses

  18,572   (26,243)

Other, net

  (5,081)  (881)

Net cash provided by operating activities

  58,179   237,703 

Cash flows from investing activities:

        

Acquisition of property and equipment

  (107,226)  (84,352)

Proceeds from the sale of property and equipment

  2,772   327 

Business disposition

  27,500    

Business acquisition, net of cash acquired

  (15,051)   

Other

  (2,189)  1,146 

Net cash used in investing activities

  (94,194)  (82,879)

Cash flows from financing activities:

        

Draws (payments) on floor plan notes payable – non-trade, net

  190,483   (40,909)

Proceeds from long-term debt

  571,302   52,325 

Principal payments on long-term debt

  (574,165)  (129,221)

Principal payments on finance lease obligations

  (8,110)  (6,361)

Proceeds from issuance of shares relating to equity awards and employee stock purchases

  8,068   11,339 

Taxes paid related to net share settlement of equity awards

  (8,637)  (7,394)

Payments of cash dividends

  (21,589)  (19,922)

Common stock repurchased

  (52,789)  (10,818)

Net cash provided by (used in) financing activities

  104,563   (150,961)

Net increase in cash and cash equivalents

  68,548   3,863 

Cash and cash equivalents, beginning of period

  148,146   312,048 

Cash and cash equivalents, end of period

 $216,694  $315,911 

Supplemental disclosure of cash flow information:

        

Cash paid during the period for:

        

Interest

 $5,964  $13,213 

Income taxes, net of refunds

 $38,354  $67,766 

Noncash activities:

        

Assets acquired under finance leases

 $5,749  $15,019 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

RUSH ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

1 Principles of Consolidation and Basis of Presentation

 

The interim consolidated financial statements included herein have been prepared by Rush Enterprises, Inc. and its subsidiaries (collectively referred to as the “Company”), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). All adjustments have been made to the accompanying interim consolidated financial statements, which, in the opinion of the Company’s management, are necessary for a fair presentation of its operating results. All adjustments are of a normal recurring nature. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. It is recommended that these interim consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. Results of operations for interim periods are not necessarily indicative of results that may be expected for any other interim periods or the full fiscal year.

 

COVID-19 Risks and Uncertainties

 

While business conditions have improved significantly since the onset of the COVID-19 pandemic in the second quarter of 2020, our industry continues to be impacted by supply chain issues generally attributable to the COVID-19 pandemic that are negatively affecting new commercial vehicle production and the availability of aftermarket parts. The Company is unable to predict the impact that the COVID-19 pandemic will have on its future business and operating results due to numerous uncertainties, including the duration of the COVID-19 pandemic and its effect on global economic trends and the various supply chains serving the commercial vehicle industry.

 

Foreign Currency Transactions

 

The functional currency of the Company’s foreign subsidiary, Rush Truck Centres of Canada Limited (“RTC Canada”), is the local currency. Results of operations for RTC Canada are translated to USD using the average exchange rate on a monthly basis during the quarter. The assets and liabilities of RTC Canada are translated into USD using the exchange rate in effect on the balance sheet date. The related translation adjustments are recorded as a separate component of the Company’s Consolidated Statements of Shareholders’ Equity in accumulated other comprehensive income (loss).

 

 

2 Other Assets

 

Equity Method Investment

 

On February 25, 2019, the Company acquired 50% of the equity interest in Rush Truck Centres of Canada Limited (“RTC Canada”), which acquired the operating assets of Tallman Group, the largest International Truck dealer in Canada.  Prior to acquiring an additional 30% equity interest on May 2, 2022, for approximately $20.0 million, the Company accounted for the equity interest in RTC Canada using the equity method of accounting.  Now that the Company owns an 80% equity interest in RTC Canada, the operating results of RTC Canada are consolidated in the Consolidated Statements of Income, the Consolidated Statements of Comprehensive Income and the Consolidated Balance Sheets, as of May 2, 2022.  See Note 13 – Acquisitions in the Notes to the Financial Statements for further discussion.

 

On January 3, 2022, a subsidiary of Cummins, Inc. acquired a 50% equity interest in Natural Gas Fuel Systems, LLC, which previously conducted business as Momentum Fuel Technologies, from the Company for $27.5 million.  The $12.5 million gain realized on the transaction is included in Other income on the Consolidated Statements of Income.  The Company is accounting for the business as a joint venture and recognizes the investment using the equity method.  As of June 30, 2022, the Company’s investment in Natural Gas Fuels Systems, LLC was $14.8 million. The Company’s equity income in Natural Gas Fuels Systems, LLC is included in the line item Other income on the Consolidated Statements of Income.

 

 

3 Commitments and Contingencies

 

From time to time, the Company is involved in litigation arising out of its operations in the ordinary course of business. The Company maintains liability insurance, including product liability coverage, in amounts deemed adequate by management. However, an uninsured or partially insured claim, or claim for which indemnification is not available, could have a material adverse effect on the Company’s financial condition or results of operations. As of June 30, 2022, the Company believes that there are no pending claims or litigation, individually or in the aggregate, that are reasonably likely to have a material adverse effect on its financial position or results of operations. However, due to the inherent uncertainty of litigation, there can be no assurance that the resolution of any particular claim or proceeding would not have a material adverse effect on the Company’s financial condition or results of operations for the fiscal period in which such resolution occurred.

 

9

 

 

 

4 Earnings Per Share

 

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts):

 

  

Three Months Ended

June 30,

  

Six Months Ended

June 30,

 
  

2022

  

2021

  

2022

  

2021

 

Numerator:

                

Numerator for basic and diluted earnings per share – Net income available to common shareholders

 $110,227  $58,044  $202,680  $103,377 

Denominator:

                

Denominator for basic earnings per share – weighted average shares outstanding

  55,640   56,009   55,788   55,819 

Effect of dilutive securities–

                

Employee stock options and restricted stock awards

  1,670   1,947   1,822   2,027 

Denominator for diluted earnings per share – adjusted weighted average shares outstanding and assumed conversions

  57,310   57,956   57,610   57,846 

Basic earnings per common share

 $1.98  $1.04  $3.63  $1.85 

Diluted earnings per common share and common share equivalents

 $1.92  $1.00  $3.52  $1.79 

 

Options to purchase shares of common stock that were outstanding for the three months and six months ended June 30, 2022, and 2021, that were not included in the computation of diluted earnings per share because the effect would have been anti-dilutive, are as follows (in thousands):

 

  

Three Months Ended

June 30,

  

Six Months Ended

June 30,

 
  

2022

  

2021

  

2022

  

2021

 

Weighted average anti-dilutive stock options

  1,020   626   761   379 

 

 

5 Stock Options and Restricted Stock Awards

 

Valuation and Expense Information

 

The Company accounts for stock-based compensation in accordance with Accounting Standards Codification (“ASC”) 718-10, Compensation Stock Compensation, which requires the measurement and recognition of compensation expense for all share-based payment awards made to the Company’s employees and directors, including employee stock options, restricted stock awards and employee stock purchases related to the Employee Stock Purchase Plan, based on estimated fair values.

 

Stock-based compensation expense, calculated using the Black-Scholes option-pricing model for employee stock options and included in selling, general and administrative expense, was $4.2 million for the three months ended June 30, 2022, and $3.7 million for the three months ended June 30, 2021. Stock-based compensation expense, included in selling, general and administrative expense, was $18.0 million for the six months ended June 30, 2022, and was $15.2 million for the six months ended June 30, 2021.

 

As of June 30, 2022, the Company had $13.0 million of unrecognized compensation cost related to non-vested employee stock options to be recognized over a weighted-average period of 2.5 years and $15.0 million of unrecognized compensation cost related to non-vested restricted stock awards to be recognized over a weighted-average period of 1.5 years.

 

10

 

 

 

6 Financial Instruments and Fair Value

 

The Company measures certain financial assets and liabilities at fair value on a recurring basis. Financial instruments consist primarily of cash, accounts receivable, accounts payable and floor plan notes payable. The carrying values of the Company’s financial instruments approximate fair value due either to their short-term nature or existence of variable interest rates, which approximate market rates. Certain methods and assumptions were used by the Company in estimating the fair value of financial instruments as of June 30, 2022, and December 31, 2021. The carrying value of current assets and current liabilities approximates the fair value due to the short maturity of these items.

 

The fair value of the Company’s long-term debt is based on secondary market indicators. Because the Company’s debt is not quoted, estimates are based on each obligation’s characteristics, including remaining maturities, interest rate, credit rating, collateral and liquidity. Accordingly, the Company concluded that the valuation measurement inputs of its long-term debt represent, at its lowest level, current market interest rates available to the Company for similar debt and the Company’s current credit standing. The carrying amount of such debt approximates fair value.

 

 

7 Segment Information

 

The Company currently has one reportable business segment - the Truck Segment. The Truck Segment includes the Company’s operation of a network of commercial vehicle dealerships throughout the United States and Ontario, Canada that provide an integrated one-stop source for the commercial vehicle needs of its customers, including retail sales of new and used commercial vehicles; aftermarket parts, service and collision center facilities; and financial services, including the financing of new and used commercial vehicle purchases, insurance products and truck leasing and rentals. The commercial vehicle dealerships are deemed a single reporting unit because they have similar economic characteristics. The Company’s chief operating decision maker considers the entire Truck Segment, not individual dealerships or departments within its dealerships, when making decisions about resources to be allocated to the segment and assessing its performance.

 

The Company also has revenues attributable to three other operating segments. These segments include a retail tire company, an insurance agency and a guest ranch operation and are included in the All Other column below. None of these segments has ever met any of the quantitative thresholds for determining reportable segments.

 

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company evaluates performance based on income before income taxes, not including extraordinary items.

 

The following table contains summarized information about reportable segment revenues, segment income or loss from continuing operations and segment assets for the periods ended June 30, 2022 and 2021 (in thousands):

 

  

Truck

Segment

  

All Other

  

Total

 

As of and for the three months ended June 30, 2022

            

Revenues from external customers

 $1,786,927  $4,314  $1,791,241 

Segment operating income

  134,506   517   135,023 

Segment income before taxes

  139,765   423   140,188 

Segment assets

  3,615,745   53,624   3,669,369 
             

For the six months ended June 30, 2022

            

Revenues from external customers

 $3,345,979  $8,464  $3,354,443 

Segment operating income

  241,826   696   242,522 

Segment income before taxes

  260,023   509   260,532 
             

As of and for the three months ended June 30, 2021

            

Revenues from external customers

 $1,311,678  $4,337  $1,316,015 

Segment operating income

  72,163   628   72,791 

Segment income before taxes

  74,191   558   74,749 

Segment assets

  2,863,087   49,037   2,912,124 
             

For the six months ended June 30, 2021

            

Revenues from external customers

 $2,539,790  $8,031  $2,547,821 

Segment operating income

  128,113   903   129,016 

Segment income before taxes

  130,623   763   131,386 

 

11

 

 

 

8 Income Taxes

 

The Company had unrecognized income tax benefits totaling $4.3 million as a component of accrued liabilities as of June 30, 2022 and December 31, 2021, the total of which, if recognized, would impact the Company’s effective tax rate. An unfavorable settlement may require a charge to income tax expense and a favorable resolution would be recognized as a reduction to income tax expense. The Company recognizes interest accrued related to unrecognized tax benefits in income tax expense. The Company had approximately $279,000 accrued for the payment of interest as of June 30, 2022 and December 31, 2021. No amounts were accrued for penalties.

 

The Company does not anticipate a significant change in the amount of unrecognized tax benefits in the next 12 months. As of June 30, 2022, the tax years ended December 31, 2018 through 2021 remained subject to audit by federal tax authorities, and the tax years ended December 31, 2017 through 2021, remained subject to audit by state tax authorities.

 

 

9 Revenue

 

The Company’s revenues are primarily generated from the sale of finished products to customers. Those sales predominantly contain a single delivery element and revenue from such sales is recognized when the customer obtains control, which is typically when the finished product is delivered to the customer. The Company’s material revenue streams have been identified as the following: the sale of new and used commercial vehicles, arrangement of associated commercial vehicle financing and insurance contracts, the performance of commercial vehicle repair services and the sale of commercial vehicle parts. Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenues.  

 

The following table summarizes the Company’s disaggregated revenue by revenue source, excluding lease and rental revenue, for the three months and six months ended June 30, 2022 and 2021 (in thousands):

 

  

Three Months Ended

  

Six Months Ended

 
  

June 30, 2022

  

June 30, 2021

  

June 30, 2022

  

June 30, 2021

 
                 

Commercial vehicle sales revenue

 $1,098,255  $797,269  $2,033,974  $1,544,988 

Parts revenue

  361,562   263,491   692,304   503,927 

Commercial vehicle repair service revenue

  236,736   182,035   449,257   357,336 

Finance revenue

  4,578   4,549   9,067   8,453 

Insurance revenue

  3,177   2,858   6,213   5,419 

Other revenue

  6,395   4,417   11,755   8,075 

Total

 $1,710,703  $1,254,619  $3,202,570  $2,428,198 

 

All of the Company's performance obligations and associated revenues are generally transferred to customers at a point in time. The Company did not have any material contract assets or contract liabilities on the balance sheet as of June 30, 2022 or December 31, 2021. Revenues related to commercial vehicle sales, parts sales, commercial vehicle repair service, finance and the majority of other revenues are related to the Truck Segment.

 

 

10 Leases

 

Lease of Vehicles as Lessor

 

The Company primarily leases commercial vehicles that it owns to customers over periods of one to ten years. The Company does not separate lease and nonlease components. Nonlease components typically consist of maintenance and licensing for the commercial vehicle. The variable nonlease components are generally based on mileage. Some leases contain an option for the lessee to purchase the commercial vehicle at the end of the lease term.

 

The Company’s policy is to depreciate its lease and rental fleet using a straight-line method over each customer’s contractual lease term. The lease unit is depreciated to a residual value that approximates fair value at the expiration of the lease term. This policy results in the Company realizing reasonable gross margins while the unit is in service and a corresponding gain or loss on sale when the unit is sold at the end of the lease term.

 

Sales-type leases are recognized by the Company as lease receivables. The lessee obtains control of the underlying asset and the Company recognizes sales revenue upon lease commencement.  The receivable for sales-type leases as of June 30, 2022 was $5.5 million, compared to $5.4 million as of December 31, 2021, and is reflected in the line item Other assets on the Consolidated Balance Sheet. 

 

12

 

Lease and rental income during the three and six months ended June 30, 2022 and June 30, 2021 consisted of the following (in thousands):

 

  

Three Months Ended

  

Six Months Ended

 
  

June 30, 2022

  

June 30, 2021

  

June 30, 2022

  

June 30, 2021

 

Minimum rental payments

 $70,652  $52,947  $132,650  $103,652 

Nonlease payments

  9,886   8,449   19,223   15,971 

Total

 $80,538  $61,396  $151,873  $119,623 

 

 

11 Accumulated Other Comprehensive Income

 

The following table shows the components of accumulated other comprehensive income (loss) (in thousands):

 

Balance as of December 31, 2021

 $787 

Foreign currency translation adjustment

  445 

Balance as of March 31, 2022

 $1,232 

Reclassification of currency translation related to equity method of RTC Canada

  (601)

Foreign currency translation adjustment

  (567)

Balance as of June 30, 2022

 $64 

 

The functional currency of the Company’s foreign subsidiary, RTC Canada, is its local currency.  Results of operations of RTC Canada are translated in USD using the average exchange rates on a monthly basis during the year. The assets and liabilities of RTC Canada are translated into USD using the exchange rates in effect on the balance sheet date. The related translation adjustments are recorded in a separate component of stockholders' equity in accumulated other comprehensive loss.

 

The Company reclassified the foreign currency translation adjustment related to its previously held equity investment in RTC Canada into net income upon its acquisition of a majority equity interest according to ASC 830-30, Foreign Currency Matters.

 

 

12 Accounts Receivable and Allowance for Credit Losses

 

The Company establishes an allowance for credit losses to present the net amount of accounts receivable expected to be collected. Under Accounting Standards Update No. 2016-13, Financial InstrumentsCredit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, the Company is required to remeasure expected credit losses for financial instruments held on the reporting date based on historical experience, current conditions and reasonable forecasts.

 

Accounts receivable consists primarily of commercial vehicle sales receivables, manufacturers’ receivables, leasing and rental receivables, parts and service receivables and other trade receivables. The Company maintains an allowance for credit losses based on the probability of default, its historical rate of losses, aging and current economic conditions. The Company writes off account balances when it has exhausted reasonable collection efforts and determined that the likelihood of collection is remote. These write-offs are charged against the allowance for credit losses.

 

13

 

The following table summarizes the changes in the allowance for credit losses (in thousands):

 

  

Balance

December 31,

2021

  

Provision for

the Six

Months Ended

June 30, 2022

  

Write offs

Against

Allowance,

net of

Recoveries

  

Balance

June 30,

2022

 
                 

Commercial vehicle receivables

 $76  $53  $  $129 

Manufacturers’ receivables

  419   756   (552)  623 

Leasing, parts and service receivables

  1,069   1,091   (798)  1,362 

Other receivables

  26      (3)  23 

Total

 $1,590  $1,900  $(1,353) $2,137 

 

 

13 Acquisitions

 

On December 13, 2021, the Company completed the acquisition of certain of the assets of the Summit Truck Group, LLC and certain of its subsidiaries and affiliates (collectively, “Summit”) which included full-service commercial vehicle dealerships and Idealease franchises in Arkansas, Kansas, Missouri, Tennessee and Texas. The acquisition included Summit’s dealerships representing International, IC Bus, Idealease, Isuzu and other commercial vehicle manufacturers for a purchase price of approximately $205.3 million, excluding the real property associated with the transaction. The Company financed approximately $102.0 million of the purchase price under its floor plan and lease and rental truck financing arrangements and the remainder of the purchase price was paid in cash. In addition, the Company purchased certain real property owned by Summit for a purchase price of approximately $57.0 million, which was paid in cash.

 

The purchase price allocation has not yet been finalized for the Summit acquisition. The Company is currently working with Summit to obtain additional information that existed at the time of the acquisition related to property and equipment, inventory and valuation of intangible assets. Management has recorded the purchase price allocations based upon currently available information about Summit.

 

The operations of Summit are included in the accompanying consolidated financial statements from the date of the acquisition. The preliminary purchase price was allocated based on the fair values of the assets and liabilities at the date of acquisition as follows (in thousands):

 

Goodwill

 $73,710 

Franchise rights

  1,581 

Inventory

  72,773 

Property and equipment, including real estate

  113,306 

Other

  882 
     

Total

 $262,252 

 

The goodwill of $73.7 million for the Summit acquisition is primarily attributable to the synergies expected to arise after the acquisition. The goodwill acquired in the Summit acquisition will be amortized over 15 years for tax purposes.

 

On May 2, 2022, the Company completed the acquisition of an additional 30% equity interest in RTC Canada, resulting in an 80% controlling interest in RTC Canada.  The acquisition was accounted for as an acquisition achieved in stages under ASC 805, Business Combinations.  The acquisition-date fair value of the previous 50% equity interest was $44.7 million, resulting in a gain of $7.0 million included in the line item Other income (expense) on the Consolidated Statements of Income.  The Company also recognized a reversal of deferred tax liabilities of $2.2 million and $0.6 million related to reclassification of the foreign currency translation adjustment related to the remeasurement of the Company’s previous equity method investment in RTC Canada.

 

As of May 2, 2022, the Company established a noncontrolling interest related to the minority holders.  The fair value of the 20% noncontrolling interest in RTC Canada is estimated to be $17.8 million. The fair value of the noncontrolling interest was estimated using a combination of the income approach and a market approach. Since RTC Canada is a private company, the fair value measurement is based on significant inputs that are not observable in the market and thus represents a Level 3 measurement as defined in ASC 820, Fair Value Measurement. The fair value estimates are based on: (i) a discount rate of 11%; (ii) a terminal value based on a long-term sustainable growth rate of 3%; (iii) financial multiples of companies in the same industry as RTC Canada; and (iv) adjustments because of the lack of control or lack of marketability that market participants would consider when estimating the fair value of the noncontrolling interest in RTC Canada.

 

14

 

The preliminary purchase price was allocated based on the fair values of the assets and liabilities at the date of acquisition as follows (in thousands):

 

Cash

 $4,310 

Accounts receivable

  19,072 

Inventory

  56,255 

Property and equipment, including real estate

  80,337 

Floor plan notes payable

  (30,501)

Trade payables

  (19,978)

Customer deposits

  (1,980)

Accrued liabilities

  (7,875)

Notes payable

  (69,545)

Goodwill

  47,939 

Other

  3,422 

Equity investment in RTC Canada

  (37,309)

Noncontrolling interest

  (17,828)

Gain on equity method investment

  (6,958)
     

Total

 $19,361 

 

The purchase price allocation has not yet been finalized. The Company is currently working with RTC Canada to obtain additional information that existed at the time of the acquisition related to property and equipment, inventory and valuation of intangible assets.  Management has recorded the purchase price allocations based upon currently available information about RTC Canada. The goodwill of $47.9 million for the RTC Canada acquisition is primarily attributable to the synergies expected to arise after obtaining a controlling interest in the entity.

 

Prior to May 2, 2022, the Company accounted for its 50% equity interest in RTC Canada as an equity-method investment. Now that the Company owns an 80% equity interest, operations of RTC Canada are included in the accompanying consolidated financial statements as of May 2, 2022.

 

15

 

 

 

ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.

 

Certain statements contained in this Form 10-Q (or otherwise made by the Company or on the Companys behalf from time to time in other reports, filings with the Securities and Exchange Commission (SEC), news releases, conferences, website postings or otherwise) that are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Exchange Act of 1934, as amended (the Exchange Act), notwithstanding that such statements are not specifically identified. Forward-looking statements include statements about the Companys financial position, business strategy and plans and objectives of management of the Company for future operations, as well as statements regarding the effects COVID-19 may have on our business and financial results. These forward-looking statements reflect the best judgments of the Company about the future events and trends based on the beliefs of the Companys management as well as assumptions made by and information currently available to the Companys management. Use of the words may, should, continue, plan, potential, anticipate, believe, estimate, expect and intend and words or phrases of similar import, as they relate to the Company or its subsidiaries or Company management, are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Forward-looking statements reflect our current view of the Company with respect to future events and are subject to risks and uncertainties that could cause actual results to differ materially from those in such statements. Please read Item 1A. Risk Factors in the Companys Annual Report on Form 10-K for the year ended December 31, 2021, for a discussion of certain of those risks. Other unknown or unpredictable factors could also have a material adverse effect on future results. Although the Company believes that its expectations are reasonable as of the date of this Form 10-Q, it can give no assurance that such expectations will prove to be correct. The Company does not intend to update or revise any forward-looking statements unless securities laws require it to do so, and the Company undertakes no obligation to publicly release any revisions to forward-looking statements, whether because of new information, future events or otherwise.

 

The following comments should be read in conjunction with the Company’s consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q.

 

Note Regarding Trademarks Commonly Used in the Companys Filings

 

Peterbilt® is a registered trademark of Peterbilt Motors Company. PACCAR® is a registered trademark of PACCAR, Inc. PacLease® is a registered trademark of PACCAR Leasing Corporation. Navistar® is a registered trademark of Navistar International Corporation. International® is a registered trademark of Navistar International Transportation Corp. Idealease is a registered trademark of Idealease, Inc. aka Idealease of North America, Inc. Blue Bird® is a registered trademark of Blue Bird Investment Corporation. IC Bus® is a registered trademark of IC Bus, LLC. Hino® is a registered trademark of Hino Motors, Ltd. Isuzu® is a registered trademark of Isuzu Motors Limited. Ford Motor Credit Company® is a registered trademark of Ford Motor Company. Ford® is a registered trademark of Ford Motor Company. Cummins® is a registered trademark of Cummins, Inc. This report contains additional trade names or trademarks of other companies. Our use of such trade names or trademarks should not imply any endorsement or relationship with such companies.

 

General

 

Rush Enterprises, Inc. was incorporated in Texas in 1965 and consists of one reportable segment, the Truck Segment, and conducts business through its subsidiaries. Our principal offices are located at 555 IH 35 South, Suite 500, New Braunfels, Texas 78130.

 

We are a full-service, integrated retailer of commercial vehicles and related services. The Truck Segment includes our operation of a network of commercial vehicle dealerships under the name “Rush Truck Centers.” Rush Truck Centers primarily sell commercial vehicles manufactured by Peterbilt, International, Hino, Ford, Isuzu, IC Bus and Blue Bird. Through our strategically located network of Rush Truck Centers, we provide one-stop service for the needs of our commercial vehicle customers, including retail sales of new and used commercial vehicles, aftermarket parts sales, service and repair facilities, financing, leasing and rental, and insurance products.

 

Our Rush Truck Centers are principally located in high traffic areas throughout the United States and Ontario, Canada.  Since commencing operations as a Peterbilt heavy-duty truck dealer in 1966, we have grown to operate over 125 franchised Rush Truck Centers in 23 states.  In 2019, we purchased a 50% equity interest in an entity in Canada, Rush Truck Centres of Canada Limited (“RTC Canada”) and on May 2, 2022, we purchased an additional 30% equity interest in RTC Canada that increased our equity interest to 80%.  RTC Canada currently owns and operates 15 International dealership locations in Ontario.  Prior to acquiring the additional 30%, we accounted for the equity interest in RTC Canada using the equity method of accounting.  Now, the operating results of RTC Canada are consolidated in the Consolidated Statements of Operations, the Statements of Comprehensive Income, the Consolidated Balance Sheets and commercial vehicle unit sales data as of May 2, 2022. 

 

 

Our business strategy consists of providing solutions to the commercial vehicle industry through our network of commercial vehicle dealerships. We offer an integrated approach to meeting customer needs by providing service, parts and collision repairs in addition to new and used commercial vehicle sales and leasing, plus financial services, vehicle upfitting, CNG fuel systems through our joint venture with Cummins and vehicle telematics products. We intend to continue to implement our business strategy, reinforce customer loyalty and remain a market leader by continuing to develop our Rush Truck Centers as we expand our product offerings and extend our dealership network through strategic acquisitions of new locations and opening new dealerships in our existing areas of operation to enable us to better serve our customers.

 

The COVID-19 Pandemic and Its Impact on Our Business

 

While business conditions have improved significantly since the onset of the Covid-19 pandemic in the second quarter of 2020, our industry continues to be impacted by supply chain issues generally believed to be attributable to the COVID-19 pandemic that are negatively affecting new commercial vehicle production and the availability of aftermarket parts. 

 

Outlook

 

A.C.T. Research Co., LLC (“A. C.T. Research”), a commercial vehicle industry data and forecasting service provider, currently forecasts new U.S. Class 8 retail truck sales to be 253,100 units in 2022, which would represent an 11.3% increase compared to 2021. We expect our U.S. market share of new Class 8 truck sales to range between 6.1% and 6.4% in 2022. This market share percentage would result in the sale of approximately 15,500 to 16,200 new Class 8 trucks in 2022. We expect to sell approximately 350 to 380 additional new Class 8 trucks in Canada in the third and fourth quarters of 2022.

 

With respect to new U.S. Class 4-7 retail commercial vehicle sales, A.C.T. Research currently forecasts sales to be 230,500 units in 2022, which would represent a 7.7% decrease compared to 2021.  We expect our U.S. market share of new Class 4 through 7 commercial vehicle sales to range between 4.6% and 4.8% in 2022. This market share percentage would result in the sale of approximately 10,500 to 11,000 new Class 4 through 7 commercial vehicles in 2022. We expect to sell approximately 120 to 130 additional new Class 5 through 7 commercial vehicles in Canada in the third and fourth quarters of 2022.

 

We expect to sell approximately 1,700 light-duty vehicles and approximately 7,000 to 7,500 used commercial vehicles in 2022. We expect lease and rental revenue to increase 28% to 32% during 2022, compared to 2021.

 

We believe our Aftermarket Products and Services revenues will increase 25% to 30% in 2022, compared to 2021.

 

The above projections for new commercial vehicle sales will depend on our ability to obtain commercial vehicles from the manufacturers we represent and such projections could be negatively impacted by manufacturer allocation decisions and supply chain issues affecting manufacturers’ production.  In addition, we are monitoring inflation and rising interest rates, which may negatively impact consumer spending and capital expenditures across a variety of industries we support. 

 

All of the above projections for new commercial vehicle sales, lease and rental revenues and Aftermarket Products and Services revenues include the dealership and Idealease locations that we acquired on December 13, 2021, when we completed the acquisition of certain of the assets of the of Summit Truck Group, LLC and certain of its subsidiaries and affiliates (collectively, “Summit”). In addition, all of the above projections for new commercial vehicle sales, lease and rental revenues and Aftermarket Products and Services revenues include RTC Canada.

 

Critical Accounting Policies and Estimates

 

Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. There can be no assurance that actual results will not differ from those estimates. We believe the following accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.

 

 

Inventories

 

Inventories are stated at the lower of cost or net realizable value. Cost is determined by specific identification of new and used commercial vehicle inventory and by the first-in, first-out method for tires, parts and accessories. As the market value of our inventory typically declines over time, reserves are established based on historical loss experience and market trends. These reserves are charged to cost of sales and reduce the carrying value of our inventory on hand. An allowance is provided when it is anticipated that cost will exceed net realizable value less a reasonable profit margin.

 

Purchase Price Allocation, Intangible Assets and Goodwill

 

Purchase price allocation for business combinations and asset acquisitions requires the use of accounting estimates and judgments to allocate the purchase price to the identifiable tangible and intangible assets acquired and liabilities assumed based on their respective fair values. We determine whether substantially all the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If so, the single asset or group of assets, as applicable, is not a business. If not, we determine whether the single asset or group of assets, as applicable, meets the definition of a business.

 

In connection with our business combinations, we recorded certain intangible assets, including franchise rights. We periodically review the estimated useful lives and fair values of our identifiable intangible assets, taking into consideration any events or circumstances that might result in a diminished fair value or revised useful life.

 

The excess purchase price over the fair value of assets acquired is recorded as goodwill. We test goodwill for impairment annually in the fourth quarter, or whenever events or changes in circumstances indicate an impairment may have occurred. Because we operate a single reporting unit, the Truck Segment, the impairment test is performed at that level by comparing the estimated fair value of the reporting unit to the carrying value of the reporting unit. We estimate the fair value of the reporting unit using a "step one" analysis utilizing a fair-value-based approach that uses a discounted cash flow analysis of projected future results to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Determining the fair value of goodwill is subjective in nature and often involves the use of estimates and assumptions including, without limitation, use of estimates of future prices and volumes for our products, capital needs, economic trends and other factors which are inherently difficult to forecast. If actual results, or the plans and estimates used in future impairment analyses are lower than the original estimates used to assess the recoverability of these assets, we could incur impairment charges in a future period. The annual impairment test was performed in the fourth quarter of 2021. No impairment of goodwill was identified during 2021 and no circumstances or events occurred in the first six months of 2022 that would require a test for impairment.

 

Insurance Accruals

 

We are partially self-insured for a portion of the claims related to our property and casualty insurance programs, which requires us to make estimates regarding expected losses to be incurred. We engage a third-party administrator to assess any open claims and we adjust our accrual accordingly on a periodic basis. We are also partially self-insured for a portion of the claims related to our workers’ compensation and medical insurance programs. We use actuarial information provided from third-party administrators to calculate an accrual for claims incurred, but not reported, and for the remaining portion of claims that have been reported.

 

Changes in the frequency, severity and development of existing claims could influence our reserve for claims and financial position, results of operations and cash flows. We do not believe there is a reasonable likelihood that there will be a material change in the estimates or assumptions we used to calculate our self-insured liabilities. However, if actual results are not consistent with our estimates or assumptions, we may be exposed to losses or gains that could be material.

 

Accounting for Income Taxes

 

Management’s judgment is required to determine the provisions for income taxes and to determine whether deferred tax assets will be realized in full or in part. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. When it is more likely than not that all or some portion of specific deferred income tax assets will not be realized, a valuation allowance must be established for the amount of deferred income tax assets that are determined not to be realizable. Accordingly, the facts and financial circumstances impacting deferred income tax assets are reviewed quarterly and management’s judgment is applied to determine the amount of valuation allowance required, if any, in any given period.

 

 

Our income tax returns are periodically audited by tax authorities. These audits include questions regarding our tax filing positions, including the timing and amount of deductions. In evaluating the exposures associated with our various tax filing positions, we adjust our liability for unrecognized tax benefits and income tax provision in the period in which an uncertain tax position is effectively settled, the statute of limitations expires for the relevant taxing authority to examine the tax position or when more information becomes available.

 

Our liability for unrecognized tax benefits contains uncertainties because management is required to make assumptions and to apply judgment to estimate the exposures associated with our various filing positions. Our effective income tax rate is also affected by changes in tax law, the level of earnings and the results of tax audits. Although we believe that the judgments and estimates are reasonable, actual results could differ, and we may be exposed to losses or gains that could be material. An unfavorable tax settlement would generally require use of our cash and result in an increase in our effective income tax rate in the period of resolution. A favorable tax settlement would be recognized as a reduction in our effective income tax rate in the period of resolution. Our income tax expense includes the impact of reserve provisions and changes to reserves that we consider appropriate, as well as related interest.

 

Revenue Recognition

 

We recognize revenue when our customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services.  To determine revenue recognition for arrangements that we determine are within the scope of ASU 2014-09, “Revenue from Contracts with Customers (Topic 606), we perform the following five steps: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy a performance obligation.  We only apply the five-step model to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services we transfer to the customer.  At contract inception, once the contract is determined to be within the scope of Topic 606, we assess the goods or services promised within each contract and determine those that are performance obligations. We then assess whether each promised good or service is distinct and recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.  

 

Leases

 

We lease commercial vehicles and real estate under finance and operating leases. We determine whether an arrangement is a lease at its inception. For leases with terms greater than twelve months, we record a lease asset and liability at the present value of lease payments over the term. Many of our leases include renewal options and termination options that are factored into our determination of lease payments when appropriate.

 

When available, we use the rate implicit in the lease to discount lease payments to present value; however, most of our leases do not provide a readily determinable implicit rate. Therefore, we must estimate our incremental borrowing rate to discount the lease payments based on information available at lease commencement.

 

We lease commercial vehicles that we own to customers. Lease and rental revenue is recognized over the period of the related lease or rental agreement. Variable rental revenue is recognized when it is earned.

 

Allowance for Credit Losses

 

All trade receivables are reported on the consolidated balance sheet at their cost basis adjusted for any write-offs and net of allowances for credit losses. We maintain allowances for credit losses, which represent an estimate of expected losses over the remaining contractual life of our receivables after considering current market conditions and estimates for supportable forecasts, when appropriate. The estimate is a result of our ongoing assessments and evaluations of collectability, historical loss experience, and future expectations in estimating credit losses in each of our receivable portfolios (commercial vehicle receivables, manufacturers’ receivables, parts and service receivables, leasing receivables and other trade receivables). For trade receivables, we use the probability of default and our historical loss experience rates by portfolio and apply them to a related aging analysis while also considering customer and economic risk where appropriate. Determination of the proper amount of allowances by portfolio requires us to exercise our judgment about the timing, frequency and severity of credit losses that could materially affect the provision for credit losses and, as a result, net earnings. The allowances take into consideration numerous quantitative and qualitative factors that include receivable type, historical loss experience, collection experience, current economic conditions, estimates for supportable forecasts (when appropriate) and credit risk characteristics.

 

 

Foreign Currency Transactions

 

The functional currency of our foreign subsidiary, RTC Canada, is its local currency.  Results of operations for RTC Canada are translated in USD using the average exchange rate on a monthly basis during the quarter. The assets and liabilities of RTC Canada are translated into USD using the exchange rate in effect on the balance sheet date. The related translation adjustments are recorded as a separate component of our Consolidated Statements of Shareholders’ Equity in the line item Accumulated other comprehensive income. 

 

Results of Operations

 

The following discussion and analysis includes our historical results of operations for the three months and six months periods ended June 30, 2022 and 2021.

 

The following table sets forth certain financial data as a percentage of total revenues for the periods indicated:

 

   

Three Months Ended

June 30,

   

Six Months Ended

June 30,

 
   

2022

   

2021

   

2022

   

2021

 

Revenue

                               

New and used commercial vehicle sales

    61.3

%

    60.6

%

    60.6

%

    60.6

%

Aftermarket products and services sales

    33.4       33.8       34.0       33.8  

Lease and rental sales

    4.5       4.7       4.5       4.7  

Finance and insurance

    0.4       0.6       0.5       0.6  

Other

    0.4       0.3       0.4       0.3  

Total revenues

    100.0       100.0       100.0       100.0  

Cost of products sold

    79.1       79.4       78.5       79.8  

Gross profit

 

20.9

   

20.6

      21.5       20.2  

Selling, general and administrative

    12.6       14.0       13.4       14.1  

Depreciation and amortization

    0.8       1.0       0.8       1.1  

Gain (loss) on sale of assets

    0.0       0.0       0.0       0.0  

Operating income

    7.5       5.6       7.3       5.0  

Other income

    0.5       0.0       0.7       0.1  

Interest (income) expense, net

    0.2       0.0       0.2       0.0  

Income before income taxes

    7.8       5.6       7.8       5.1  

Provision for income taxes

    1.7       1.2       1.7       1.1  

Net income

    6.1       4.4       6.1       4.0  

Less: Net income attributable to noncontrolling interest

    0.0       0.0       0.0       0.0  

Net income attributable to Rush Enterprises, Inc.

    6.1

%

    4.4

%

    6.1

%

    4.0

%

 

The following table sets forth for the periods indicated the percent of gross profit by revenue source:

 

   

Three Months Ended

June 30,

   

Six Months Ended

June 30,

 
   

2022

   

2021

   

2022

   

2021

 

Gross Profit:

                               

New and used commercial vehicle sales

    27.8

%

    28.6

%

    28.4

%

    28.7

%

Aftermarket products and services sales

    61.7       62.2       61.2       62.5  

Lease and rental sales

    6.7