Rush Enterprises, Inc. (Nasdaq:RUSHA) (Nasdaq:RUSHB), which operates the largest network of commercial vehicle dealerships in North America, announced that for the quarter ending December 31, 2010, gross revenues from continuing operations totaled $463 million, a 61.6% increase from the $286.5 million reported in the fourth quarter of 2009.
The company reported income from continuing operations and net income for the quarter of $9.2 million, or $0.24 per diluted share, compared with income from continuing operations and net income of $1.5 million, or $0.04 per diluted share, in the fourth quarter of 2009.
For the year ending December 31, 2010, the company's gross revenues from continuing operations totaled $1.5 billion, a 25% increase from gross revenues from continuing operations of $1.2 billion reported in 2009. Income from continuing operations for the year was $24.6 million, or $0.64 per diluted share, compared with income from continuing operations of $5.1 million, or $0.14 per diluted share, in 2009. The company reported net income for the year of $31.3 million, or $0.82 per diluted share, compared with a net income of $5.9 million, or $0.16 per diluted share in 2009.
On September 9, 2010, the company sold the assets of its John Deere construction equipment business, including its Rush Equipment Centers in Houston and Beaumont, Texas. The construction equipment business recorded income from discontinued operations, net of tax, of $6.7 million ($0.18 per diluted share) during 2010, compared to $0.8 million ($0.02 per diluted share) during 2009. A majority of the income from discontinued operations during 2010 is attributable to the gain on the sale of Rush Equipment Centers' assets.
The company sold 11,141 new and used commercial vehicles in 2010, a 17.4% increase compared to 9,490 new and used commercial vehicles in 2009. The company delivered 4,746 new heavy-duty trucks, 2,934 new medium-duty commercial vehicles and 3,461 used commercial vehicles during 2010, compared 3,972 new heavy-duty trucks, 2,643 new medium-duty commercial vehicles and 2,875 used commercial vehicles during 2009. Parts, service and body shop sales from our truck segment increased by 24.8% to $479.1 million in 2010 from $384.0 million in 2009.
During the fourth quarter of 2010, the company delivered 1,681 new heavy-duty trucks, 813 new medium-duty commercial vehicles and 987 used commercial vehicles, compared to 956 new heavy-duty trucks, 614 new medium-duty commercial vehicles and 762 used commercial vehicles during the fourth quarter of 2009. Parts, service and body shop sales revenue from our truck segment increased 44.1% to $130.4 million in the fourth quarter of 2010, compared to $90.5 million in the fourth quarter of 2009.
"Despite another year of weak truck sales, 2010 was a very significant year for the company,” said W. M. "Rusty" Rush, president and chief executive officer of Rush Enterprises, Inc. “We matched our record high annual absorption rate of 106% – previously achieved in 2008, fulfilled our commitment to grow our service network, established a new Navistar Division, extended the breadth of our product offerings in existing areas of responsibility and ended the year in a strong financial position.
“During the spring of 2010, our parts, service and body shop business began accelerating from the depressed levels we experienced throughout 2009, and continued to accelerate to record high levels at the end of the year. Our parts, service and body shop revenues were up 24% in 2010 compared to 2009, primarily due to increased maintenance and repair on aging vehicles that were put back into service during the year as well as significant increases in the oil and gas service industry in the south central U.S. This increase resulted in a fourth quarter absorption rate of 110%, the highest quarterly absorption rate we have ever achieved, and an annual absorption rate of 106%. We expect parts, service and body shop operations to remain strong in 2011.
"We formed a new Navistar Division within the Company, naming Richard J. Ryan as Senior Vice President - Navistar Dealerships, and completed the acquisition of the assets of Lake City International – adding 11 International dealership locations in Utah, Idaho and Oregon. We are very pleased with the performance of our new International dealerships, and more importantly, are excited about the growth potential for this new division, not only in incremental truck sales for Rush Truck Centers but also in parts and service revenues. We look forward to continued growth in our relationship with Navistar as we continue to expand our geographic network of truck centers.
"The company ended the year with $169 million in cash and cash equivalents, an increase of $20 million compared to year end 2009. This positive cash flow is net of $39 million in cash paid for business acquisitions. Given the economic uncertainty that plagued consumer confidence throughout the year and hesitation by fleet customers to invest in major truck purchases, I am very pleased with our financial performance this year and our strong financial position headed into the industry upturn.
"We are encouraged by the continuing improvement in Class 8 and medium-duty truck orders during the past several months. We believe this increase in new truck orders reflects the replacement of existing aged trucks that are currently in service and does not reflect fleet expansion or growth. While U.S. Class 8 order intake has reached over 25,000 units for three consecutive months, retail sales are not expected to substantially increase until later in 2011, causing the new truck sales market to remain competitive and challenging throughout the first half of the year. Industry experts forecast 2011 U.S. Class 8 truck sales to reach 179,000 units, up from 110,109 units sold in 2010. Current industry projections are for U.S. Class 4-7 retail sales in 2011 to be 128,300 units, up from 117,572 units in 2010. If economic conditions continue to improve, we expect that activity will increase in automotive and capital goods manufacturing as well as residential and commercial construction, which should result in strong truck sales markets in 2012 and 2013," Rusty Rush added.
"Our strong financial position will continue to allow us to fund significant investments in pending acquisitions and employee programs. We recently entered into an agreement to acquire certain assets of Asbury Automotive Atlanta, LLC's Nalley Motor Trucks dealerships in metro Atlanta, and we are scheduled to acquire a Ford Commercial Truck franchise in Orlando next week. When completed, these acquisitions will expand the company's contiguous network of Rush Truck Centers in the southeast and result in the company operating 65 Rush Truck Center locations in 14 states.”