Record annual revenues of $5.8 billion; net income of $141.6 million
Annual earnings per diluted share of $3.77Annual absorption ratio 120.2%Annual medium-duty truck sales significantly outperform the marketAnnual aftermarket growth outpaces industry4th quarter revenues of $1.3 billion; net income of $23.8 millionBoard declares cash dividend of $0.13 per share of Class A and Class B common stockSAN ANTONIO, Feb. 12, 2020 (GLOBE NEWSWIRE) — Rush Enterprises, Inc. (NASDAQ: RUSHA & RUSHB), which operates the largest network of commercial vehicle dealerships in North America, today announced that for the year ended December 31, 2019, the Company achieved record revenues of $5.8 billion and net income of $141.6 million, or $3.77 per diluted share, compared with revenues of $5.5 billion and net income of $139.1 million, or $3.45 per diluted share, for the year ended December 31, 2018. During 2018, the Company incurred a non-cash charge to amortization expense and a charge to selling, general and administrative expense totaling $20.9 million associated with the upgrade and replacement of certain components of the Company’s Enterprise Resource Planning software platform (ERP Platform). Excluding the charge related to the ERP Platform, the Company’s adjusted net income in 2018 was $154.9 million, or $3.85 per diluted share. Additionally, the Company’s Board of Directors declared a cash dividend of $0.13 per share of Class A and Class B Common Stock, to be paid on March 17, 2020, to all shareholders of record as of February 25, 2020.“We are pleased with our strong financial performance in 2019,” said W.M. “Rusty” Rush, Chairman, Chief Executive Officer and President of Rush Enterprises, Inc. “Though we experienced declines in new Class 8 truck sales and aftermarket products and services sales in the fourth quarter, our overall performance for the full year 2019 was strong, primarily due to a healthy economy and activity throughout the markets we support. In addition, the successful execution of our strategic initiatives continues to contribute to our parts and service revenue growth, and we gained market share in our new medium-duty truck sales,” he added.“I want to thank our employees who continue to inspire me with their dedication to our customers and to our company’s success. It is only because of their hard work that we were able to achieve such a successful year,” Rush said.OperationsAftermarket Products and ServicesAftermarket products and services accounted for approximately 64.9% of the Company’s total gross profits in 2019, with parts, service and collision center revenues reaching $1.8 billion, up 5.5% compared to 2018. The Company achieved an annual absorption ratio of 120.2% in 2019. “Looking forward, we expect that parts and service activity throughout the industry will be relatively flat in 2020 compared to 2019. We believe aftermarket demand from our energy sector customers has bottomed, which will limit our year over year aftermarket growth in the first half of 2020 because stronger energy sector demand existed in the first half of 2019,” said Rush. “We remain focused on our strategic initiatives and have ambitious targets for improving efficiency and productivity in our parts fulfillment processes to facilitate additional parts sales. We are also excited about RushCare® Complete, which we launched in the summer of 2019. RushCare® Complete is an all-inclusive service that expedites vehicle repairs through qualified service facilities across North America. We believe this new service solution will drive parts and service revenue growth and improve vehicle uptime,” Rush said. “As a direct result of the technology investments we have made over the past 18 months in the furtherance of our strategic initiatives, we have more insight into our business than ever before, and we are using that insight to our advantage. Though industry demand for aftermarket products and services may remain flat in 2020, we are laser focused on gaining market share and believe we are positioned for modest aftermarket products and services revenues growth in 2020,” said Rush.Truck SalesNew U.S. Class 8 retail truck sales totaled 281,440 units in 2019, up 10% over 2018, according to ACT Research. The Company sold 14,986 new Class 8 trucks in 2019, an increase of 2.2% compared to 2018, and accounted for 5.3% of the new U.S. Class 8 truck market. “Our new Class 8 truck sales grew steadily from the first quarter of 2019 through the third quarter of 2019, primarily due to the healthy economy and strong activity across the market segments we support. In the fourth quarter of 2019, as predicted by ACT Research, all new U.S. Class 8 truck retail sales declined compared to the fourth quarter of 2018, and our results were further negatively impacted by the timing of certain fleet deliveries,” Rush said.ACT Research forecasts U.S. retail sales of new Class 8 trucks to total 190,000 units in 2020, a 32.5% decrease compared to 2019. “2020 will be a challenging year for the new Class 8 truck market due to excess truck capacity in the market resulting from exceptionally high unit sales volumes over the past two years. This excess truck capacity has negatively impacted freight rates for our customers. Declining freight rates, coupled with the fact that this is an election year, generally results in our customers being more cautious with their purchase decisions. That said, freight rates are expected to improve in the second half of the year, the housing sector is growing and the economy is healthy. Our team will continue to closely monitor market conditions impacting Class 8 truck sales, and we believe that we are well positioned to gain market share in 2020,” said Rush.The Company sold 14,470 new Class 4-7 medium-duty commercial vehicles in 2019, an increase of 11.7% compared to 2018, accounting for 5.4% of the total U.S. market and significantly outpacing the industry. New U.S. Class 4-7 medium-duty commercial vehicle sales were 266,977 units in 2019, up 3.4% over 2018. “While our fourth quarter 2019 new medium-duty commercial vehicle sales results were flat compared to the fourth quarter of 2018, we experienced strong activity from all of the market segments we support in 2019 and our annual sales significantly outpaced the market, resulting in another record-setting year for new Class 4-7 medium-duty commercial vehicle sales,” said Rush. “By offering a breadth of options from the five medium-duty manufacturers we represent, we continue to evolve to meet our customers’ needs, moving us further towards our medium-duty commercial vehicle sales strategic goals,” said Rush.ACT Research forecasts U.S. retail sales for new Class 4-7 commercial vehicles to be approximately 253,400 units in 2020, a 5.1% decrease compared to 2019. “We believe our medium-duty performance will be on pace with the market in 2020, due to solid activity across the markets we support, and we are well-positioned to take advantage of every opportunity possible and continue the long-term upward trend of our new Class 4-7 commercial vehicle sales,” said Rush.The Company sold 7,741 used vehicles in 2019, a 3.5% decrease compared to 2018. “Record new truck deliveries in the past few years caused an oversupply of used trucks in the market in 2019, which put pressure on used truck values in the second half of the year,” said Rush. “Currently, we believe that used truck values continue to depreciate significantly faster than what is considered a normal rate. We continue to closely monitor used truck values and other market factors, but we believe our inventory, in terms of quantity and value, is well positioned to meet current market demand,” he added.Network Expansion
Bay Street News
