Rush Enterprises, based in San Antonio, Texas, operates the largest network of heavy-duty and medium-duty truck dealerships in North America.
Gross revenues for the year totaled $1.7 billion, an 18.5 percent decrease from 2007. Net income was $28.9 million, a 43.9 percent drop.
In the fourth quarter, gross revenues were $382.7 million, a 16.5 percent decrease from gross revenues for the 2007 fourth quarter. Net income was $5.1 million for the fourth quarter, compared to $12.3 million the year before.
The company's truck segment recorded revenues of $1.6 billion in 2008, compared to $1.9 billion in 2007. Overall, Rush sold 12,523 new and used trucks in 2008, a 25.5 percent decrease from 2007. The company delivered 5,516 new heavy-duty trucks, 3,773 new medium-duty trucks and 3,234 used trucks during 2008, compared to 7,230 new heavy-duty trucks, 5,482 new medium-duty trucks and 4,101 used trucks during 2007. Parts, service and body shop sales fell to $445.8 million in 2008 from $448 million in 2007.
The company's truck segment recorded revenues of $356.5 million in the fourth quarter of 2008, compared to $427.5 million in the fourth quarter of 2007. Rush delivered 1,235 new heavy-duty trucks, 903 new medium-duty trucks and 603 used trucks during the fourth quarter of 2008, compared to 1,511 new heavy-duty trucks, 1,199 new medium-duty trucks and 1,008 used trucks during the fourth quarter of 2007. Parts, service and body shop sales decreased to $108.1 million in the fourth quarter of 2008 from $110.6 million in the fourth quarter of 2007.
"Although our financial performance was below our expectations in the fourth quarter, I am very proud of our people, who continue to demonstrate their ability to maintain high levels of customer service despite extremely challenging market conditions," said W. M. "Rusty" Rush, president and CEO. "We were able to increase our absorption rate to 106 percent in 2008, up 1 percent over 2007. Significant reductions in our expense structure combined with consistent, disciplined expense management throughout the year enabled us to operate profitably in a bleak truck sales environment. The majority of the decline in fourth quarter gross profit compared to 2007 was the result of decreased truck sales and margins."
"Currently, industry analysts forecast 2009 U.S. retail sales of Class 8 trucks to be 132,000 units, down 6 percent over 2008," Rush continued. "However, we expect that 2009 sales of Class 8 units could be as low as 110,000 to 120,000 units. We also believe U.S. retail sales of medium-duty trucks could be off as much as 15 percent compared to 2008. We expect the first quarter of 2009 to be the weakest quarter since the truck market downturn began in 2007."
He noted that the company made significant changes to its business model in response to the last Class 8 truck downturn, in 2001 to 2003, and that business model has been proving successful through this down market as well.
"The lessons we learn during this downturn will make our people better operators and Rush Enterprises a stronger company," Rush said. "Historically, market downturns create growth opportunities, which we have used to expand our footprint."