Rush Enterprises, San Antonio, saw revenues and income fall for the third quarter compared with last year, but notes that its balance sheet is strong and the company continues activities targeting long-term growth.
Rush, which operates the largest network of heavy- and medium-duty truck dealerships in North America, reports that for the quarter ended Sept. 30, the company's gross revenues totaled $413.7 million, a 20.7% decrease from gross revenues of $521.6 million reported for the third quarter ended Sept. 30, 2007. Net income for the quarter was $8 million, or $0.21 per diluted share, compared with net income of $13.1 million, or $0.34 per diluted share, in the same quarter last year.
The company's truck segment recorded revenues of $392.5 million in the third quarter of 2008, compared to $491.3 million in the third quarter of 2007. Rush dealers delivered 1,350 new heavy-duty trucks, 919 new medium-duty trucks and 936 used trucks during the third quarter of 2008, compared to 1,820 new heavy-duty trucks, 1,520 new medium-duty trucks and 1,032 used trucks during the third quarter of 2007. Parts, service and body shop sales increased to $116.3 million in the third quarter of 2008, compared to $115.5 million in the third quarter of 2007.
"As expected, given current volatile economic conditions, both heavy- and medium-duty truck markets remained weak in the third quarter," said Chairman Marvin Rush. "We believe that the continuation of the weak freight environment, slowing construction markets, historically high fuel prices and tight credit markets will cause both Class 8 and medium-duty truck deliveries to remain soft through 2009."
W.M. "Rusty" Rush, President and CEO, touted the company's 108 percent absorption rate for the quarter as "a testament to our ability to perform in tough times." He also noted that U.S. Class 8 retail sales remain depressed, with truckload carriers the most severely impacted.
In addition, the company's truck, equipment and leasing operations in Texas were adversely impacted by hurricane activity throughout the summer, particularly Hurricane Ike in Houston and eastern Texas and Hurricane Dolly in southern Texas. "Although difficult to quantify, these storms obviously had a negative impact to earnings in the third quarter," Rusty Rush explained.
Looking ahead, Rush executives believe 2009 sales of both heavy- and medium-duty trucks will remain relatively flat compared to 2008. "Based on current economic and market conditions, we have no reason to expect a strong pre-buy of Class 8 trucks to occur in 2009," said Rusty Rush. "However, we do anticipate some recovery late in 2009, given impending 2010 diesel emissions regulations."
Rusty Rush also said the company's balance sheet is strong. It currently has $144 million in cash and expects continued positive cash flow from operations.
"We continue to implement our strategy to diversify earnings by expanding the geographic reach of our dealership network, leveraging our existing infrastructure to increase sales and service of new products, and growing our less cyclical parts, service and body shop revenues," Rusty Rush said. "Evidence of this can be seen in the recent acquisition of a Blue Bird bus franchise in Texas. Rush Bus Centers provides us with additional opportunity for parts and service revenue as well as entry into the school bus and commercial transit industries. We are in excellent financial position to pursue acquisitions that fit into our long-term plans."
Rush, which operates the largest network of heavy- and medium-duty truck dealerships in North America, reports that for the quarter ended Sept. 30, the company's gross revenues totaled $413.7 million, a 20.7% decrease from gross revenues of $521.6 million reported for the third quarter ended Sept. 30, 2007. Net income for the quarter was $8 million, or $0.21 per diluted share, compared with net income of $13.1 million, or $0.34 per diluted share, in the same quarter last year.
The company's truck segment recorded revenues of $392.5 million in the third quarter of 2008, compared to $491.3 million in the third quarter of 2007. Rush dealers delivered 1,350 new heavy-duty trucks, 919 new medium-duty trucks and 936 used trucks during the third quarter of 2008, compared to 1,820 new heavy-duty trucks, 1,520 new medium-duty trucks and 1,032 used trucks during the third quarter of 2007. Parts, service and body shop sales increased to $116.3 million in the third quarter of 2008, compared to $115.5 million in the third quarter of 2007.
"As expected, given current volatile economic conditions, both heavy- and medium-duty truck markets remained weak in the third quarter," said Chairman Marvin Rush. "We believe that the continuation of the weak freight environment, slowing construction markets, historically high fuel prices and tight credit markets will cause both Class 8 and medium-duty truck deliveries to remain soft through 2009."
W.M. "Rusty" Rush, President and CEO, touted the company's 108 percent absorption rate for the quarter as "a testament to our ability to perform in tough times." He also noted that U.S. Class 8 retail sales remain depressed, with truckload carriers the most severely impacted.
In addition, the company's truck, equipment and leasing operations in Texas were adversely impacted by hurricane activity throughout the summer, particularly Hurricane Ike in Houston and eastern Texas and Hurricane Dolly in southern Texas. "Although difficult to quantify, these storms obviously had a negative impact to earnings in the third quarter," Rusty Rush explained.
Looking ahead, Rush executives believe 2009 sales of both heavy- and medium-duty trucks will remain relatively flat compared to 2008. "Based on current economic and market conditions, we have no reason to expect a strong pre-buy of Class 8 trucks to occur in 2009," said Rusty Rush. "However, we do anticipate some recovery late in 2009, given impending 2010 diesel emissions regulations."
Rusty Rush also said the company's balance sheet is strong. It currently has $144 million in cash and expects continued positive cash flow from operations.
"We continue to implement our strategy to diversify earnings by expanding the geographic reach of our dealership network, leveraging our existing infrastructure to increase sales and service of new products, and growing our less cyclical parts, service and body shop revenues," Rusty Rush said. "Evidence of this can be seen in the recent acquisition of a Blue Bird bus franchise in Texas. Rush Bus Centers provides us with additional opportunity for parts and service revenue as well as entry into the school bus and commercial transit industries. We are in excellent financial position to pursue acquisitions that fit into our long-term plans."
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