A big jump in truck sales helped push profits higher in the first quarter of the year for the network of dealerships under the Rush Enterprises banner.
Net income was $16.8 million, or 41 cents per diluted share, compared to $12 million, or 30 cents per diluted share, in the quarter a year earlier. Revenues totaled $1.194 billion, a 24.5% increase from $958.7 million.
"We are extremely pleased with our strong financial performance this quarter despite a significant impact to Class 8 truck sales due to reduced activity in the energy sector,” said W.M. "Rusty" Rush, chairman, chief executive officer and president of Rush Enterprises.
Rush's Class 8 sales increased 52% compared to a year ago, significantly outpacing the industry and accounting for 7.2% of the U.S. Class 8 truck market, according to the company. (U.S. Class 8 retail sales were 56,736 units in the first quarter, up 25% over the same time period last year.)
Rush's Class 4-7 medium-duty sales increased 37% over the first quarter of 2014, accounting for 5.6% of the total U.S. market and also significantly outpacing U.S. Class 4-7 truck sales in the first quarter, which increased by 12%.
"Our backlog remains stable through the second quarter, but as expected, order intake has softened from the peak order months at the end of last year," Rush said. "We expect our Class 8 truck sales to remain flat through the second quarter as we work to offset the decline in new truck sales to the energy sector with incremental business in other market segments and regions of the country benefiting from an improving economy."
Aftermarket services accounted for approximately 63% of the company's total gross profit, with parts, service and body shop revenue up 9.1% compared to the first quarter of 2014.
"Continued steady demand for repair and maintenance of vehicles fueled by general economic improvement, pre-delivery inspections and modifications from new and used truck sales and mobile service activity drove aftermarket revenues in the first quarter," said Rush. "Aftermarket activity in the energy sector remained steady this quarter, although we have begun to see activity decrease slightly as compared to the end of 2014. As rig counts decrease, we expect that this decline will negatively impact parts and service revenues through the remainder of the year.”