Rush Enterprises, Inc. announced that its first-quarter net income was $13.5 million, or $0.34 per diluted share, compared with net income of $15.9 million, or $0.40 per diluted share, in the quarter ended March 31, 2012.
"The company's financial performance remained strong this quarter despite expected sluggishness in energy sector activity and a decrease in Class 8 new truck retail sales. Geographic expansion of our dealership network, breadth of product offerings and a sustained focus on aftermarket solutions continue to positively impact the company's financial performance," said W. M. "Rusty" Rush, Chief Executive Officer and President of Rush Enterprises, Inc. "I am grateful to our employees for their contributions to our success this quarter."
Aftermarket Solutions
Aftermarket solutions accounted for approximately 64% of the company's total gross profits in the first quarter of 2013. First quarter parts, service and body shop revenues reached a new record quarterly high, increasing by 18% as compared to first quarter 2012, despite the usual decrease due to seasonality experienced during the first quarter.
"Our aftermarket success this quarter is the result of continued maintenance of aged vehicles, incremental revenues generated from newly acquired locations and innovative aftermarket solutions," said Rusty Rush.
"Despite the decline in the energy sector activity and integration of newly acquired locations in Ohio, we were able to achieve a quarterly absorption ratio of 111.9%.
"Our efforts to be the premier solutions provider to the commercial vehicle industry continue to drive outstanding performance of our aftermarket operations. We have invested in personnel, facility enhancements, advanced diagnostic technology, mobile service offerings, custom vehicle modifications services and alternative fuel capabilities that expand our portfolio of customer solutions. The investments we have made allow us to efficiently support our customers in our shops or their job sites and are a key factor in our ability to increase aftermarket revenues.
"We expect parts, service and body shop revenues will remain strong throughout 2013.”
Truck Sales
In the first quarter, Rush's Class 8 retail sales accounted for 5.2% of the U.S. Class 8 truck market.
"As expected, declines in energy sector activity resulted in a decrease of our new Class 8 truck deliveries," said Rusty Rush. "In addition, U.S. Class 8 truck sales were well below normal replacement levels in the first quarter. However, our quoting activity remains strong, which should lead to stronger retail sales later this year."
Rush's Class 4-7 medium-duty sales increased 26% over the first quarter of 2012, outpacing the U. S. Class 4-7 market, which decreased 2%. Rush's Class 4-7 market share accounted for 5% of the total U.S. market, a record high and up from 4% in the first quarter of 2012.
"This is the result of solid execution by our medium-duty franchises across the country, including continued good performance from our Navistar Division," said Rusty Rush.
"Light duty truck sales were also up 43% compared to the first quarter of 2012, as a result of continued efforts at our Ford franchises. Our used truck sales also increased, up 13% over the first quarter of 2012."
Industry experts forecast U.S. Class 8 retail truck sales to remain flat with 2012 at 198,000 units. "We believe that steady U.S. Class 8 order intake over the past several months combined with increased activity in residential construction in key regions of the country will likely result in increased Class 8 retail truck deliveries beginning in the second half of 2013. U.S. Class 4-7 retail sales are expected to reach 182,000 units, up 11% over 2012," continued Rusty Rush.
"We are encouraged by Navistar's successful launch of the 15-liter Cummins ISX engine in the first quarter and the recent EPA approval of their MaxxForce 13-liter engine using SCR aftertreatment technology. We expect this to have a positive impact for our Navistar Division during the second half of 2013," Rusty Rush added.
Financial Highlights
In the first quarter, the Company's gross revenues totaled $756.8 million, a 2.6% decrease from gross revenues of $777.3 million reported for the first quarter ended March 31, 2012. Net income for the quarter was $13.5 million, or $0.34 per diluted share, compared with net income of $15.9 million, or $0.40 per diluted share.
Parts, service and body shop sales revenue was $231.5 million in the first quarter of 2013, compared to $196.6 million in the first quarter of 2012. The Company delivered 2,065 new heavy-duty trucks, 1,954 new medium-duty commercial vehicles, 395 new light-duty commercial vehicles and 1,414 used commercial vehicles during the first quarter of 2013, compared to 2,738 new heavy-duty trucks, 1,556 new medium-duty commercial vehicles, 277 new light-duty commercial vehicles and 1,252 used trucks during the first quarter of 2012.
"I am very pleased with our financial performance this quarter. Our strong financial position will enable us to continue to execute our strategic initiatives and help ensure we remain the premier solutions provider to the commercial vehicle industry," said W. Marvin Rush, Chairman and Founder of Rush Enterprises, Inc.