Rush Enterprises Reports 8.7% Dip in 2Q Revenues

Rush Enterprises Inc., which operates heavy-duty and medium-duty truck dealerships throughout North America, said gross revenues totaled $519.4 million in the second quarter, an 8.7 percent decrease from gross revenues of $569.2 million

reported for the same period last year.
Net income for the quarter was $13 million, or $0.51 per diluted share, compared with net income of $14.9 million, or $0.59 per diluted share, in the quarter ended June 30, 2006.
W. Marvin Rush, chairman of Rush Enterprises, said, "As expected, we continued to experience the softening of the Class 8 truck market in the second quarter. While we previously expected United States retail sales of Class 8 units to be weaker in the second and third quarters of 2007, we now expect industry Class 8 deliveries to remain soft for the remainder of the year. We anticipate that Class 8 order intake will increase beginning in early 2008.
"Additionally, we believe industry conditions including normal customer trade cycles and new diesel emission regulations scheduled to take effect in 2010 will result in a pre-buy beginning in 2008. The magnitude of the 2008 and 2009 pre-buy will be largely dictated by the economy, among other factors. If general economic conditions in the U.S. are good in 2008 and 2009, we believe 2009 could be a record year for U.S. Class 8 deliveries."
W. M. "Rusty" Rush, president and CEO, added, "We prepared for the expected decrease in Class 8 truck sales by ensuring we had surplus inventory of Class 8 trucks with engines built before the new emissions guidelines took effect to sustain us during the first half of 2007. More importantly, we have focused on expanding our medium-duty and vocational truck offerings, increasing parts and service sales and increasing operational efficiencies throughout the organization. We believe the diversity in our earnings stream and our focus on increasing operational efficiencies will continue to allow us to outperform the truck sales industry in the declining 2007 truck market."
The company's truck segment recorded revenues of $488 million in the second quarter of 2007, compared to $543.9 million in the second quarter of 2006. Rush delivered 1,869 new heavy-duty trucks, 1,324 new medium-duty trucks and 984 used trucks during the second quarter of 2007, compared to 2,695 new heavy-duty trucks, 1,185 new medium-duty trucks and 954 used trucks during the second quarter of 2006. Parts, service and body shop sales increased to $112 million in the second quarter of 2007 from $104.8 million in the second quarter of 2006.