Rush Enterprises, Inc. (NASDAQ: RUSHA & RUSHB), which operates
the largest network of commercial vehicle dealerships in North
America, today announced that for the quarter ended June 30, 2024,
the Company achieved revenues of $2.027 billion and net income of
$78.7 million, or $0.97 per diluted share, compared with revenues
of $2.003 billion and net income of $98.3 million, or $1.17 per
diluted share, in the quarter ended June 30, 2023. Additionally,
the Company’s Board of Directors declared a cash dividend of $0.18
per share of Class A and Class B Common Stock, to be paid on
September 10, 2024, to all shareholders of record as of August 13,
2024.
“Despite persistent market challenges, including weak demand for
Class 8 trucks and aftermarket parts and services due to the
lingering freight recession and high interest rates, we are pleased
with our financial performance in the second quarter,” said W.M.
“Rusty” Rush, Chairman, Chief Executive Officer, and President of
Rush Enterprises. “Although low freight rates continue to plague
over-the-road carriers, our largest customer segment, we are
experiencing continued strength in certain other key customer
segments, including the public sector and vocational segments,
which positively impacted our Class 8 truck sales revenues. Class
4-7 commercial vehicle sales remained steady, and we executed well
on our used truck pricing and inventory strategies,” he continued.
“However, along with the rest of the industry, we experienced a
decrease in demand for aftermarket parts and services during the
quarter, which negatively impacted our aftermarket results. Due to
our diverse customer base and continued focus on our strategic
initiatives, we believe we kept pace with the market from a parts
sales perspective and outperformed the industry with respect to our
service sales,” he added.
“Our Board of Directors approved a $0.01 increase in our
quarterly cash dividend, our eighth increase since we announced our
intent to begin paying a quarterly cash dividend in July 2018 as
part of our capital allocation strategy. This dividend increase
represents a 5.9% increase over our prior quarterly dividend and is
further evidence of our intent to increase the dividend on an
annual basis, although future declarations of dividends are subject
to approval by the Company’s Board of Directors and may be adjusted
as business needs or market conditions change. In addition, the
dividend increase also reflects our continuing ability to return
value to our shareholders while also investing in our Company’s
future,” explained Rush.
“Looking ahead, we expect the freight recession to continue
through the remainder of the year, although we are hopeful that
freight rates may have bottomed out. However, we do not anticipate
a meaningful recovery in freight rates until 2025 and we expect
difficult operating conditions to continue for the near term. In
the third quarter, we expect new Class 8 truck sales to soften
compared to the second quarter, but we expect Class 4-7 commercial
vehicle sales to remain steady, and we believe that our commercial
vehicle sales will keep pace with, if not outperform, the market. I
have confidence in our professional salesforce and believe we are
well positioned to take advantage of all sales opportunities that
we uncover,” Rush said. “Also, in anticipation of the softening
market, in the second quarter we made some very responsible
reductions to our operating expenses across the company to help
mitigate the expected decrease in revenues. These expense
reductions, combined with the strategic decisions we made several
years ago to diversify our customer base and focus on supporting
large national accounts, will help us manage this challenging
market cycle,” he added.
“This is a cyclical industry that has experienced downturns many
times before. However, that makes it no less challenging for our
employees to navigate this difficult market. Expense reductions
often mean our employees are asked to do more with fewer resources.
So, I particularly want to acknowledge their efforts throughout the
quarter and sincerely thank them for providing best-in-class
service to our customers while staying focused on operating
efficiently,” said Rush.
Operations
Aftermarket Products and
Services
Aftermarket products and services accounted for approximately
60.0% of the Company’s total gross profit in the second quarter of
2024, with parts, service and collision center revenues totaling
$627.4 million, down 3.6% compared to the second quarter of 2023.
The Company achieved a quarterly absorption ratio of 134.0% in the
second quarter of 2024, compared to 139.7% in the second quarter of
2023.
“In the second quarter, our aftermarket results were down
slightly year-over-year. As previously noted, the freight
recession, as well as continued high interest rates are still
negatively impacting over-the-road customers. That said, these
difficult operating conditions are having an outsized effect on
smaller operators, and we continue to see them exit the market. In
the long term, that will play to the strengths of our organization
and our strategic focus on supporting larger national accounts.
Challenging economic conditions also led to decreased aftermarket
demand from our wholesale, independent parts distributor and energy
customers. On a brighter note, we experienced healthy
year-over-year growth from our vocational, public sector and
medium-duty customers,” he said.
“As we look toward the third quarter, we expect demand for
aftermarket parts and services to remain steady, and we believe our
third quarter results will be consistent with our second quarter
performance. Although we do not expect market conditions to improve
significantly in the third quarter, we are committed to leveraging
the foundational tools and processes that we have put in place over
the last few years through the execution of our strategic
initiatives. We believe that these tools and processes will
increase our efficiency and provide enhanced service to our
customers, which I am confident will allow us to continue to
outperform the industry,” Rush added.
Commercial Vehicle Sales
New U.S. Class 8 retail truck sales totaled 58,991 units in the
second quarter of 2024, down 18.6% over the same period last year,
according to ACT Research. The Company sold 4,128 new Class 8
trucks in the second quarter, a decrease of 4.0% compared to the
second quarter of 2023, which accounted for 6.8% of the new U.S.
Class 8 truck market and 1.7% of the new Canada Class 8 truck
market. ACT Research forecasts U.S. retail sales of new Class 8
trucks to total 228,700 units in 2024, a 15.8% decrease compared to
2023.
“After the production shortages of the last few years, which
caused pent-up demand, new Class 8 truck demand has slowed
significantly. Additionally, the sluggish industry conditions
previously mentioned continue to negatively impact over-the-road
customers. However, we did experience healthy sales growth in the
second quarter, compared to the first quarter. This was primarily
due to the timing of deliveries to some large customers and
continued strong demand from vocational fleets. We expect
vocational sales to remain strong in the third quarter,” Rush
said.
“As we look toward the remainder of the year, we expect the
current freight recession to persist and Class 8 truck demand to
soften further, resulting in a decrease in Class 8 trucks sales in
the third quarter. We also expect truck pricing to become more
competitive in the second half of the year. However, we believe
that we are well prepared to perform in a more competitive
environment and we anticipate our sales will be in line with the
market. In addition, it is worth noting that we have not seen any
significant pre-buy activity related to 2027 emissions regulations,
and we do not expect that to begin until 2025,” he added.
New U.S. Class 4 through 7 retail commercial vehicle sales
totaled 63,534 units in the second quarter of 2024, down 3.0% over
the same period last year, according to ACT Research. The Company
sold 3,691 Class 4 through 7 medium-duty commercial vehicles in the
second quarter, an increase of 6.2% compared to the second quarter
of 2023, which accounted for 5.7% of the total new U.S. Class 4
through 7 commercial vehicle market and 2.4% of the new Canada
Class 5 through 7 commercial vehicle market. ACT Research forecasts
U.S. retail sales for new Class 4 through 7 commercial vehicles to
be approximately 262,000 units in 2024, a 3.7% increase compared to
2023.
“Demand from medium-duty customers remained healthy in the
second quarter. Class 4-7 commercial vehicle production continues
to increase, and delivery lead times have improved. Our Class 4-7
commercial vehicle sales were broad-based, across industry
segments, and we were pleased to outpace the market in the second
quarter. However, we continue to monitor delays at body
manufacturers that could impact deliveries to customers going
forward,” Rush said.
“Looking forward, we recognize that we are in an election year,
which is a time when many customers take a wait-and-see approach to
capital expenditures. We are closely watching various economic
factors that could impact consumer spending and lead to a decrease
in Class 4-7 commercial vehicle demand. However, at this time, we
anticipate that our third quarter Class 4-7 commercial vehicle
sales will be consistent with our second quarter results,” he
said.
The company sold 1,723 used commercial vehicles in the second
quarter of 2024, a 7.8% decrease compared to the second quarter of
2023. “Class 8 used truck demand remained weak in the quarter due
to the low freight rate environment, more readily available new
truck alternatives and high interest rates. However, we believe
that the rate of used truck depreciation is slowing. We executed
well on our used truck strategies during the second quarter while
keeping our inventory levels low, and we believe we are well
positioned for the second half of the year, and we expect our third
quarter performance to be on par with our second quarter results,”
Rush said.Leasing and Rental
Rush Truck Leasing operates 56 PacLease and Idealease franchises
across the United States and Canada, with more than 9,900 trucks in
its lease and rental fleet and more than 2,200 trucks under
contract maintenance agreements. Lease and rental revenue decreased
1% in the second quarter of 2024 compared to the second quarter of
2023, primarily due to a decrease in rental utilization. “While our
rental utilization rate was down compared to the second quarter of
2023, it began to increase during the second quarter. In addition,
the age of our lease and rental fleet continues to decrease, which
translates to lower operating costs. Because of these factors, we
believe that our results from our lease and rental operations will
remain solid for the remainder of 2024,” Rush said.
Financial Highlights
In the second quarter of 2024, the Company’s gross revenues
totaled $2.027 billion, a 1.2% increase from $2.003 billion in the
second quarter of 2023. Net income for the quarter was $78.7
million, or $0.97 per diluted share, compared to net income of
$98.3 million, or $1.17 per diluted share, in the quarter ended
June 30, 2023.
Aftermarket products and services revenues were $627.4 million
in the second quarter of 2024, compared to $651.1 million in the
second quarter of 2023. The Company delivered 4,128 new heavy-duty
trucks, 3,691 new medium-duty commercial vehicles, 537 new
light-duty commercial vehicles and 1,723 used commercial vehicles
during the second quarter of 2024, compared to 4,300 new heavy-duty
trucks, 3,477 new medium-duty commercial vehicles, 452 new
light-duty commercial vehicles and 1,869 used commercial vehicles
during the second quarter of 2023.
During the second quarter of 2024, the Company repurchased $4.0
million of its common stock pursuant to its stock repurchase plan
and has repurchased a total of $77.2 million of the $150.0 million
that was authorized by the board of directors. In addition, the
Company paid a cash dividend of $13.5 million during the second
quarter.
“Despite the ongoing economic challenges our industry
experienced in the second quarter, we are proud of our overall
performance and our ability to continue returning value to our
shareholders through our eighth quarterly dividend increase. We
remain committed to our long-term strategic initiatives and are
confident that we will successfully navigate this difficult market
cycle,” Rush said.
Conference Call Information
Rush Enterprises will host its quarterly
conference call to discuss earnings for the first quarter of 2024
on Thursday, August 1, 2024, at 10:00 a.m. Eastern/9:00 a.m.
Central. The call can be heard live via the Internet
at http://investor.rushenterprises.com/events.cfm.
Participants may register for
the call
at: https://register.vevent.com/register/BIa133312289504836aed447e6b6519c9fWhile
not required, it is recommended that you join the event 10 minutes
prior to the start.
For those who cannot listen to the live
broadcast, the webcast replay will be available
at http://investor.rushenterprises.com/events.cfm.
Rush Enterprises, Inc. is the premier solutions
provider to the commercial vehicle industry. The Company owns and
operates Rush Truck Centers, the largest network of commercial
vehicle dealerships in North America, with more than 150 locations
in 23 states and Ontario, Canada, including 125 franchised
dealership locations. These vehicle centers, strategically located
in high traffic areas on or near major highways throughout the
United States and Ontario, Canada, represent truck and bus
manufacturers, including Peterbilt, International, Hino, Isuzu,
Ford, Dennis Eagle, IC Bus and Blue Bird. They offer an integrated
approach to meeting customer needs – from sales of new and used
vehicles to aftermarket parts, service and body shop operations
plus financing, insurance, leasing and rental. Rush Enterprises'
operations also provide CNG fuel systems (through its investment in
Cummins Clean Fuel Technologies, Inc.), telematics products and
other vehicle technologies, as well as vehicle up-fitting, chrome
accessories and tires. For more information, please visit us at
www.rushtruckcenters.com www.rushenterprises.com and
www.rushtruckcentersracing.com, on Twitter @rushtruckcenter and
Facebook.com/rushtruckcenters.
Certain statements contained in this release,
including those concerning current and projected market conditions,
sales forecasts, market share forecasts s and anticipated demand
for the Company’s services, are “forward-looking” statements (as
such term is defined in the Private Securities Litigation Reform
Act of 1995). Such forward-looking statements only speak as of the
date of this release and the Company assumes no obligation to
update the information included in this release. Because such
statements include risks and uncertainties, actual results may
differ materially from those expressed or implied by such
forward-looking statements. Important factors that could cause
actual results to differ materially from those expressed or implied
by such forward-looking statements include, but are not limited to,
competitive factors, general U.S. economic conditions, economic
conditions in the new and used commercial vehicle markets, customer
relations, relationships with vendors, inflation and the interest
rate environment, governmental regulation and supervision, product
introductions and acceptance, changes in industry practices,
one-time events and other factors described herein and in filings
made by the Company with the Securities and Exchange Commission,
including in our annual report on Form 10-K for the fiscal year
ended December 31, 2023. In addition, the declaration and payment
of cash dividends and authorization of future share repurchase
programs remains at the sole discretion of the Company’s Board of
Directors and the issuance of future dividends and authorization of
future share repurchase programs will depend upon the Company’s
financial results, cash requirements, future prospects, applicable
law and other factors that may be deemed relevant by the Company’s
Board of Directors. Although we believe that these forward-looking
statements are based on reasonable assumptions, there are many
factors that could affect our actual business and financial results
and could cause actual results to differ materially from those in
the forward-looking statements. All future written and oral
forward-looking statements by us or persons acting on our behalf
are expressly qualified in their entirety by the cautionary
statements contained or referred to above. Except for our ongoing
obligations to disclose material information as required by the
federal securities laws, we do not have any obligations or
intention to release publicly any revisions to any forward-looking
statements to reflect events or circumstances in the future or to
reflect the occurrence of unanticipated events.
-Tables and Additional Information to Follow-
RUSH ENTERPRISES, INC. AND
SUBSIDIARIESCONSOLIDATED BALANCE
SHEETS(In Thousands, Except Shares and Per Share
Amounts)
|
|
June 30, |
|
December 31, |
|
|
|
2024 |
|
|
2023 |
|
|
|
(unaudited) |
|
|
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash, cash equivalents and
restricted cash |
$ |
|
167,266 |
|
$ |
183,725 |
|
Accounts receivable, net |
|
|
286,848 |
|
|
259,353 |
|
Note receivable,
affiliate |
|
|
6,035 |
|
|
|
Inventories, net |
|
|
1,894,214 |
|
|
1,801,447 |
|
Prepaid expenses and
other |
|
|
23,338 |
|
|
15,779 |
|
Total current assets |
|
|
2,377,701 |
|
|
2,260,304 |
|
Property and equipment,
net |
|
|
1,522,808 |
|
|
1,488,086 |
|
Operating lease right-of-use
assets, net |
|
|
115,503 |
|
|
120,162 |
|
Goodwill, net |
|
|
419,303 |
|
|
420,708 |
|
Other assets, net |
|
|
71,211 |
|
|
74,981 |
|
Total
assets |
$ |
|
4,506,526 |
|
$ |
4,364,241 |
|
|
|
|
|
|
Liabilities and shareholders’ equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Floor plan notes payable |
$ |
|
1,226,651 |
|
$ |
1,139,744 |
|
Current maturities of finance
lease obligations |
|
|
40,076 |
|
|
36,119 |
|
Current maturities of
operating lease obligations |
|
|
16,084 |
|
|
17,438 |
|
Trade accounts payable |
|
|
166,630 |
|
|
162,134 |
|
Customer deposits |
|
|
95,835 |
|
|
145,326 |
|
Accrued expenses |
|
|
152,625 |
|
|
172,549 |
|
Total current liabilities |
|
|
1,697,901 |
|
|
1,673,310 |
|
Long-term debt, net of current
maturities |
|
|
396,562 |
|
|
414,002 |
|
Finance lease obligations, net
of current maturities |
|
|
97,134 |
|
|
97,617 |
|
Operating lease obligations,
net of current maturities |
|
|
101,510 |
|
|
104,514 |
|
Other long-term
liabilities |
|
|
29,586 |
|
|
24,811 |
|
Deferred income taxes,
net |
|
|
160,899 |
|
|
159,571 |
|
Shareholders’ equity: |
|
|
|
|
Preferred stock, par value $.01 per share; 1,000,000 shares
authorized; 0 shares outstanding in 2024 and 2023 |
|
|
– |
|
|
– |
|
Common stock, par value $.01 per share; 105,000,000 Class A
shares and 35,000,000 Class B shares authorized; 61,869,093 Class A
shares and 16,700,392 Class B shares outstanding in 2024; and
61,461,281 Class A shares and 16,364,158 Class B shares outstanding
in 2023 |
|
|
816 |
|
|
806 |
|
Additional paid-in
capital |
|
|
563,604 |
|
|
542,046 |
|
Treasury stock, at cost:
1,298,522 Class A shares and 1,746,047 Class B shares in 2024;
and 1,092,142 Class A shares and 1,731,157 Class B shares in
2023 |
|
|
(129,415 |
) |
|
(119,835 |
) |
Retained earnings |
|
|
1,573,316 |
|
|
1,450,025 |
|
Accumulated other
comprehensive income (loss) |
|
|
(4,927 |
) |
|
(2,163 |
) |
Total Rush Enterprises, Inc.
shareholders’ equity |
|
|
2,003,394 |
|
|
1,870,879 |
|
Noncontrolling interest |
|
|
19,540 |
|
|
19,537 |
|
Total shareholders’
equity |
|
|
2,022,934 |
|
|
1,890,416 |
|
Total liabilities and shareholders’ equity |
$ |
$ |
4,506,526 |
|
$ |
4,364,241 |
|
RUSH ENTERPRISES, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
OPERATIONS(In Thousands, Except Per Share
Amounts)(Unaudited)
|
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
|
|
2024 |
|
|
2023 |
|
|
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
New and used
commercial vehicle sales |
$ |
|
1,300,308 |
|
$ |
1,250,794 |
|
$ |
|
2,423,627 |
$ |
2,412,519 |
Parts and service
sales |
|
|
627,431 |
|
|
651,130 |
|
|
|
1,276,627 |
|
1,299,356 |
Lease and
rental |
|
|
87,646 |
|
|
88,549 |
|
|
|
175,567 |
|
175,215 |
Finance and
insurance |
|
|
5,937 |
|
|
6,189 |
|
|
|
11,331 |
|
12,760 |
Other |
|
|
5,706 |
|
|
6,390 |
|
|
|
11,875 |
|
14,969 |
Total revenue |
|
|
2,027,028 |
|
|
2,003,052 |
|
|
|
3,899,027 |
|
3,914,819 |
Cost of products sold |
|
|
|
|
|
|
|
|
New and used
commercial vehicle sales |
|
|
1,179,819 |
|
|
1,124,339 |
|
|
|
2,185,919 |
|
2,174,704 |
Parts and service
sales |
|
|
392,133 |
|
|
403,351 |
|
|
|
804,387 |
|
805,506 |
Lease and
rental |
|
|
62,687 |
|
|
61,514 |
|
|
|
126,457 |
|
121,992 |
Total cost of products sold |
|
|
1,634,639 |
|
|
1,589,204 |
|
|
|
3,116,763 |
|
3,102,202 |
Gross profit |
|
|
392,389 |
|
|
413,848 |
|
|
|
782,264 |
|
812,617 |
Selling, general and administrative expense |
|
|
251,368 |
|
|
256,691 |
|
|
|
515,033 |
|
513,499 |
Depreciation and amortization expense |
|
|
16,492 |
|
|
14,545 |
|
|
|
32,242 |
|
28,859 |
Gain (loss) on sale of assets |
|
|
(48 |
) |
|
247 |
|
|
|
102 |
|
376 |
Operating
income |
|
|
124,481 |
|
|
142,859 |
|
|
|
235,091 |
|
270,635 |
Other income (expense) |
|
|
44 |
|
|
(96 |
) |
|
|
221 |
|
2,251 |
Interest expense (income), net |
|
|
19,464 |
|
|
12,238 |
|
|
|
37,437 |
|
23,221 |
Income before taxes |
|
|
105,061 |
|
|
130,525 |
|
|
|
197,875 |
|
249,665 |
Provision for income taxes |
|
|
26,278 |
|
|
32,001 |
|
|
|
47,603 |
|
60,351 |
Net income |
|
|
78,783 |
|
|
98,524 |
|
|
|
150,272 |
|
189,314 |
Less: Net income attributable to noncontrolling Interests |
|
|
122 |
|
|
249 |
|
|
|
3 |
|
584 |
Net income attributable to Rush Enterprises, Inc. |
$ |
$ |
78,661 |
|
$ |
98,275 |
|
$ |
$ |
150,269 |
$ |
188,730 |
|
|
|
|
|
|
|
|
|
Net income attributable to Rush Enterprises, Inc.
per share of common stock: |
|
|
|
|
|
|
|
|
Basic |
$ |
|
1.01 |
|
$ |
1.20 |
|
$ |
|
1.91 |
$ |
2.31 |
Diluted |
$ |
|
0.97 |
|
$ |
1.17 |
|
$ |
|
1.84 |
$ |
2.23 |
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
78,270 |
|
|
81,690 |
|
|
|
78,706 |
|
81,926 |
Diluted |
|
|
80,778 |
|
|
84,156 |
|
|
|
81,467 |
|
84,501 |
|
|
|
|
|
|
|
|
|
Dividends declared per common share |
$ |
|
0.17 |
|
$ |
0.14 |
|
$ |
|
0.34 |
$ |
0.28 |
This press release and the attached financial
tables contain certain non-GAAP financial measures as defined under
SEC rules, such as Adjusted Net Income, Adjusted Total Debt,
Adjusted Net (cash) Debt, EBITDA, Adjusted EBITDA, Free Cash Flow,
Adjusted Free Cash Flow and Adjusted Invested Capital, which
exclude certain items disclosed in the attached financial tables.
The Company provides reconciliations of these measures to the most
directly comparable GAAP measures.
Management believes the presentation of these
non-GAAP financial measures provides useful information about the
results of operations of the Company for the current and past
periods. Management believes that investors should have the same
information available to them that management uses to assess the
Company’s operating performance and capital structure. These
non-GAAP financial measures should not be considered in isolation
or as a substitute for the most comparable GAAP financial measures.
Investors are cautioned that non-GAAP financial measures utilized
by the Company may not be comparable to similarly titled non-GAAP
financial measures used by other companies.
|
|
Three Months Ended |
Commercial Vehicle Sales Revenue (in
thousands) |
|
June 30, 2024 |
|
June 30, 2023 |
New heavy-duty vehicles |
$ |
789,189 |
|
$ |
773,833 |
|
New medium-duty vehicles (including bus sales revenue) |
|
388,817 |
|
|
332,770 |
|
New light-duty vehicles |
|
32,778 |
|
|
26,946 |
|
Used vehicles |
|
80,360 |
|
|
107,735 |
|
Other vehicles |
|
9,164 |
|
|
9,510 |
|
|
|
|
|
|
Absorption
Ratio |
|
134.0 |
% |
|
139.7 |
% |
Absorption RatioManagement uses
several performance metrics to evaluate the performance of its
commercial vehicle dealerships and considers Rush Truck Centers’
“absorption ratio” to be of critical importance. Absorption ratio
is calculated by dividing the gross profit from the parts, service
and collision center departments by the overhead expenses of all of
a dealership’s departments, except for the selling expenses of the
new and used commercial vehicle departments and carrying costs of
new and used commercial vehicle inventory. When 100% absorption is
achieved, then gross profit from the sale of a commercial vehicle,
after sales commissions and inventory carrying costs, directly
impacts operating profit.
Debt Analysis (in
thousands) |
|
June 30, 2024 |
|
June 30, 2023 |
Floor plan notes payable |
$ |
1,226,651 |
|
$ |
1,125,373 |
|
Current maturities of finance
lease obligations |
|
40,076 |
|
|
34,605 |
|
Long-term debt, net of current
maturities |
|
396,562 |
|
|
245,277 |
|
Finance lease obligations, net
of current maturities |
|
97,134 |
|
|
102,227 |
|
Total Debt
(GAAP) |
|
1,760,423 |
|
|
1,507,482 |
|
Adjustments: |
|
|
|
|
Debt related to lease & rental fleet |
|
(529,736 |
) |
|
(377,927 |
) |
Floor plan notes payable |
|
(1,226,651 |
) |
|
(1,125,373 |
) |
Adjusted Total Debt
(Non-GAAP) |
|
4,036 |
|
|
4,182 |
|
Adjustment: |
|
|
|
|
Cash and cash equivalents |
|
(167,266 |
) |
|
(191,897 |
) |
Adjusted Net Debt
(Cash) (Non-GAAP) |
$ |
(163,230 |
) |
$ |
(187,715 |
) |
Management uses “Adjusted Total Debt” to reflect
the Company’s estimated financial obligations less debt related to
lease and rental fleet (L&RFD) and floor plan notes payable
(FPNP), and “Adjusted Net (Cash) Debt” to present the amount of
Adjusted Total Debt net of cash and cash equivalents on the
Company’s balance sheet. The FPNP is used to finance the Company’s
new and used inventory, with its principal balance changing daily
as vehicles are purchased and sold and the sale proceeds are used
to repay the notes. Consequently, in managing the business,
management views the FPNP as interest bearing accounts payable,
representing the cost of acquiring the vehicle that is then repaid
when the vehicle is sold, as the Company’s floor plan credit
agreements require it to repay loans used to purchase vehicles when
such vehicles are sold. The Company has the capacity to finance all
of its lease and rental fleet under its lines of credit established
for this purpose, but may choose to only partially finance the
lease and rental fleet depending on business conditions and its
management of cash and interest expense. The Company’s lease and
rental fleet inventory are either: (i) leased to customers under
long-term lease arrangements; or (ii) to a lesser extent, dedicated
to the Company’s rental business. In both cases, the lease and
rental payments received fully cover the capital costs of the lease
and rental fleet (i.e., the interest expense on the borrowings used
to acquire the vehicles and the depreciation expense associated
with the vehicles), plus a profit margin for the Company. The
Company believes excluding the FPNP and L&RFD from the
Company’s total debt for this purpose provides management with
supplemental information regarding the Company’s capital structure
and leverage profile and assists investors in performing analysis
that is consistent with financial models developed by Company
management and research analysts. “Adjusted Total Debt” and
“Adjusted Net (Cash) Debt” are both non-GAAP financial measures and
should be considered in addition to, and not as a substitute for,
the Company’s debt obligations, as reported in the Company’s
consolidated balance sheet in accordance with U.S. GAAP.
Additionally, these non-GAAP measures may vary among companies and
may not be comparable to similarly titled non-GAAP measures used by
other companies.
|
|
Twelve Months Ended |
EBITDA (in thousands) |
|
June 30, 2024 |
|
June 30, 2023 |
Net Income attributable to Rush Enterprises, Inc.
(GAAP) |
$ |
308,594 |
|
$ |
377,432 |
|
Provision for income
taxes |
|
101,252 |
|
|
120,187 |
|
Interest expense |
|
67,133 |
|
|
37,958 |
|
Depreciation and
amortization |
|
63,213 |
|
|
56,940 |
|
(Gain) on sale of assets |
|
(569 |
) |
|
(2,607 |
) |
EBITDA
(Non-GAAP) |
|
539,623 |
|
|
589,910 |
|
Adjustments: |
|
|
|
|
Interest expense associated
with FPNP and L&RFD |
|
(68,283 |
) |
|
(38,645 |
) |
Adjusted EBITDA
(Non-GAAP) |
$ |
471,430 |
|
$ |
551,265 |
|
The Company presents EBITDA and Adjusted EBITDA,
for the twelve months ended each period presented, as additional
information about its operating results. The presentation of
Adjusted EBITDA that excludes the addition of interest expense
associated with FPNP and the L&RFD to EBITDA is consistent with
management’s presentation of Adjusted Total Debt, in each case
reflecting management’s view of interest expense associated with
the FPNP and L&RFD as an operating expense of the Company, and
to provide management with supplemental information regarding
operating results and to assist investors in performing analysis
that is consistent with financial models developed by management
and research analyst. “EBITDA” and “Adjusted EBITDA” are both
non-GAAP financial measures and should be considered in addition
to, and not as a substitute for, net income of the Company, as
reported in the Company’s consolidated statements of income in
accordance with U.S. GAAP. Additionally, these non-GAAP measures
may vary among companies and may not be comparable to similarly
titled non-GAAP measures used by other companies.
|
|
Twelve Months Ended |
Free Cash Flow (in thousands) |
|
June 30, 2024 |
|
June 30, 2023 |
Net cash provided by operations (GAAP) |
$ |
297,562 |
|
$ |
350,566 |
|
Acquisition of property and
equipment |
|
(355,742 |
) |
|
(321,834 |
) |
Free cash flow
(Non-GAAP) |
|
(58,180 |
) |
|
28,732 |
|
Adjustments: |
|
|
|
|
Draws on floor plan financing, net |
|
102,889 |
|
|
274,425 |
|
Acquisitions of L&RF assets |
|
250,925 |
|
|
236,976 |
|
Non-maintenance capital expenditures |
|
27,908 |
|
|
24,358 |
|
Adjusted Free Cash
Flow (Non-GAAP) |
$ |
323,542 |
|
$ |
564,491 |
|
“Free Cash Flow” and “Adjusted Free Cash Flow”
are key financial measures of the Company’s ability to generate
cash from operating its business. Free Cash Flow is calculated by
subtracting the acquisition of property and equipment included in
the Cash flows from investing activities from Net cash provided by
(used in) operating activities. For purposes of deriving Adjusted
Free Cash Flow from the Company’s operating cash flow, Company
management makes the following adjustments: (i) adds back draws (or
subtracts payments) on the floor plan financing that are included
in Cash flows from financing activities, as their purpose is to
finance the vehicle inventory that is included in Cash flows from
operating activities; (ii) subtracts lease and rental fleet
purchases that are included in acquisition of property and
equipment (iii) adds back non-maintenance capital expenditures that
are for growth and expansion (i.e. building of new dealership
facilities) that are not considered necessary to maintain the
current level of cash generated by the business. “Free Cash Flow”
and “Adjusted Free Cash Flow” are both presented so that investors
have the same financial data that management uses in evaluating the
Company’s cash flows from operating activities. “Free Cash Flow”
and “Adjusted Free Cash Flow” are both non-GAAP financial measures
and should be considered in addition to, and not as a substitute
for, net cash provided by (used in) operations of the Company, as
reported in the Company’s consolidated statement of cash flows in
accordance with U.S. GAAP. Additionally, these non-GAAP measures
may vary among companies and may not be comparable to similarly
titled non-GAAP measures used by other companies.
Invested Capital (in thousands) |
|
June 30, 2024 |
|
June 30, 2023 |
Total Rush Enterprises, Inc. Shareholders' equity
(GAAP) |
$ |
2,003,461 |
|
$ |
1,868,170 |
|
Adjusted net debt (cash)
(Non-GAAP) |
|
(163,230 |
) |
|
(187,715 |
) |
Adjusted Invested
Capital (Non-GAAP) |
$ |
1,840,231 |
|
$ |
1,680,455 |
|
“Adjusted Invested Capital” is a key financial
measure used by the Company to calculate its return on invested
capital. For purposes of this analysis, management excludes
L&RFD, FPNP, and cash and cash equivalents, for the reasons
provided in the debt analysis above and uses Adjusted Net Debt in
the calculation. The Company believes this approach provides
management a more accurate picture of the Company’s leverage
profile and capital structure and assists investors in performing
analysis that is consistent with financial models developed by
Company management and research analysts. “Adjusted Net (Cash)
Debt” and “Adjusted Invested Capital” are both non-GAAP financial
measures. Additionally, these non-GAAP measures may vary among
companies and may not be comparable to similarly titled non-GAAP
measures used by other companies.
Contact:Rush Enterprises, Inc., San
AntonioSteven L. Keller, 830-302-5226
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