Rush Enterprises' revenues were down 24 percent, while net income dropped from $9.7 million last year to $1 million in this year's first quarter.
In the first quarter, the Company's gross revenues totaled $403.9 million, compared to $531.3 million reported for the first quarter ended March 31, 2007. Net income for the quarter was $9.7 million, or $0.25 per diluted share, compared with net income of $1 million, or $0.34 per diluted share, in the quarter ended March 31, 2007.
The company's truck segment recorded revenues of $376.7 million in the first quarter of 2008, compared to $505 million in the first quarter of 2007. Rush delivered 1,266 new heavy-duty trucks, 972 new medium-duty trucks and 900 used trucks during the first quarter of 2007, compared to 2,030 new heavy-duty trucks, 1,439 new medium-duty trucks and 1,077 used trucks in the first quarter of 2007. Parts, service and body shop sales revenue was $109.4 million in the first quarter of 2008 compared to $109.9 million in the first quarter of 2007.
Marvin Rush, Chairman of Rush Enterprises, Inc. said, "As expected, the impact of the Class 8 and medium-duty truck market downturn has continued through the first quarter of 2008. We believe that the current freight environment, record high fuel prices and tightening credit will cause both Class 8 and medium-duty truck deliveries to remain soft throughout the remainder of 2008."
"However, the flexibility in our expense structure and our strategy of focusing on the less cyclical areas of the business, have once again softened the impact of this weak truck sales market. While U.S. Class 8 retail sales were down 38% in the first quarter of 2008 compared to the first quarter of 2007, our pretax earnings declined only 25 percent for the same time period."
Rusty Rush, President and Chief Executive Officer said, "We took actions in the first quarter to reduce overhead expenses to a level more appropriate to serve the current market. Our solid performance in this extremely challenging environment is due to the diligent efforts of employees throughout our organization to manage costs, while remaining focused on growth opportunities and continuing to provide outstanding levels of customer service," he continued.
"Despite the significant decline in Class 8 and medium-duty truck deliveries; parts, service and body shop sales remained relatively constant in the first quarter of 2008, compared to the first quarter of 2007. More importantly, our management of expenses contributed to a healthy absorption rate of 104.9 percent, compared to 101.7 percent in the first quarter of 2007, and puts us in a good position to reach our strategic goal of an annual absorption rate of 105 percent for 2008," Rusty Rush continued.
"Recent downward adjustments to the industry forecast have validated our prior prediction that 2008 U. S. Class 8 truck deliveries are expected to be approximately 140,000 units, a 10% decline from the already depressed 2007 Class 8 truck market. Currently, the industry is forecasting retail sales of medium-duty trucks in the U.S. to be down approximately 12% in 2008 compared to 2007, however, we believe sales of medium-duty trucks in the U.S. will decline approximately 20-25 percent in 2008. Based on current economic and industry conditions, we do not expect truck sales to recover until early 2009. However, we continue to believe that 2009 will be a strong year for Class 8 truck deliveries, given replacement cycles of vehicles purchased in 2004 to 2006 and the impending 2010 emissions regulations," Rusty Rush explained.
"No doubt, 2008 is shaping up to be a tough operating environment. But, I remain confident that our people, our experience and our strategy will continue to deliver strong financial results," Rusty Rush concluded.
In the first quarter, the Company's gross revenues totaled $403.9 million, compared to $531.3 million reported for the first quarter ended March 31, 2007. Net income for the quarter was $9.7 million, or $0.25 per diluted share, compared with net income of $1 million, or $0.34 per diluted share, in the quarter ended March 31, 2007.
The company's truck segment recorded revenues of $376.7 million in the first quarter of 2008, compared to $505 million in the first quarter of 2007. Rush delivered 1,266 new heavy-duty trucks, 972 new medium-duty trucks and 900 used trucks during the first quarter of 2007, compared to 2,030 new heavy-duty trucks, 1,439 new medium-duty trucks and 1,077 used trucks in the first quarter of 2007. Parts, service and body shop sales revenue was $109.4 million in the first quarter of 2008 compared to $109.9 million in the first quarter of 2007.
Marvin Rush, Chairman of Rush Enterprises, Inc. said, "As expected, the impact of the Class 8 and medium-duty truck market downturn has continued through the first quarter of 2008. We believe that the current freight environment, record high fuel prices and tightening credit will cause both Class 8 and medium-duty truck deliveries to remain soft throughout the remainder of 2008."
"However, the flexibility in our expense structure and our strategy of focusing on the less cyclical areas of the business, have once again softened the impact of this weak truck sales market. While U.S. Class 8 retail sales were down 38% in the first quarter of 2008 compared to the first quarter of 2007, our pretax earnings declined only 25 percent for the same time period."
Rusty Rush, President and Chief Executive Officer said, "We took actions in the first quarter to reduce overhead expenses to a level more appropriate to serve the current market. Our solid performance in this extremely challenging environment is due to the diligent efforts of employees throughout our organization to manage costs, while remaining focused on growth opportunities and continuing to provide outstanding levels of customer service," he continued.
"Despite the significant decline in Class 8 and medium-duty truck deliveries; parts, service and body shop sales remained relatively constant in the first quarter of 2008, compared to the first quarter of 2007. More importantly, our management of expenses contributed to a healthy absorption rate of 104.9 percent, compared to 101.7 percent in the first quarter of 2007, and puts us in a good position to reach our strategic goal of an annual absorption rate of 105 percent for 2008," Rusty Rush continued.
"Recent downward adjustments to the industry forecast have validated our prior prediction that 2008 U. S. Class 8 truck deliveries are expected to be approximately 140,000 units, a 10% decline from the already depressed 2007 Class 8 truck market. Currently, the industry is forecasting retail sales of medium-duty trucks in the U.S. to be down approximately 12% in 2008 compared to 2007, however, we believe sales of medium-duty trucks in the U.S. will decline approximately 20-25 percent in 2008. Based on current economic and industry conditions, we do not expect truck sales to recover until early 2009. However, we continue to believe that 2009 will be a strong year for Class 8 truck deliveries, given replacement cycles of vehicles purchased in 2004 to 2006 and the impending 2010 emissions regulations," Rusty Rush explained.
"No doubt, 2008 is shaping up to be a tough operating environment. But, I remain confident that our people, our experience and our strategy will continue to deliver strong financial results," Rusty Rush concluded.
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