Rush Enterprises Returns Strong Q3 Results
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North American truck dealer Rush Enterprises Inc. reported a surge in third-quarter net income and revenue, amid ongoing pent-up demand for commercial vehicles and growth in aftermarket services.
For the period ended Sept. 30, the San Antonio-based company reported net income of $90.4 million, or $1.59 per diluted share, on revenue of $1.86 billion compared with net income of $69.4 million, $1.20, on revenue of $1.27 billion.
“Our aftermarket revenues continued to grow in the third quarter, and we expect aftermarket demand to remain strong for the remainder of the year,” Chairman and CEO W.M. “Rusty” Rush said in a release.
Strong parts and service demand was particularly evident in the refuse, leasing and energy sectors.
Rush
Aftermarket products and services accounted for 63.8% of the company’s total gross profits in the third quarter, with parts, service and collision center revenues totaling $622.1 million, up 34.4% compared with the third quarter of 2021.
“Our ongoing initiative to support large national fleets by expanding our aftermarket sales team helped drive our growth this quarter, especially at our newly acquired locations,” he said. The company continued to add service technicians to its network, which also contributed to its strong results this quarter.
Rush said component part supply chain issues meant truck production remained limited in the quarter — but demand remained high.
New U.S. Class 8 retail truck sales totaled 67,939 units in the third quarter of 2022, up 27% from the third quarter of last year, according to ACT Research. Rush sold 4,200 new Class 8 trucks in the third quarter, an increase of 65.5% compared to the third quarter of 2021, which accounted for 6% of the new U.S. Class 8 truck market and 1.4% of the new Canadian Class 8 truck market, the company reported. It sold 3,223 new Classes 4-7 medium-duty commercial vehicles in the quarter, an increase of 15.4% compared to the third quarter of 2021, which accounted for 5.3% of the new U.S. Class 4 through 7 commercial vehicle market and 1.7% of the new Canadian Class 4 through 7 commercial vehicle market.
Rush said during the earnings call there is healthy demand from both over-the-road and vocational customers. And the biggest growth on a consistent basis is coming from national accounts. He attributed that to leveraging the company’s broad geographic reach. “We have a map like no one else in our industry.” And even if the company initially doesn’t sell those fleets new trucks, it “does millions of dollars of business with them in parts and service because of that map. And that list of customers continues to grow.”
Rush Truck Leasing operates 57 PacLease and Idealease franchises across the United States and Canada with more than 10,100 trucks in its lease and rental fleet and more than 1,600 trucks under contract maintenance agreements. Lease and rental revenue increased 36.7% in the third quarter of 2022 compared with the third quarter of 2021.
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“Rush Truck Leasing’s financial results remained strong in the third quarter, with healthy rental demand due in part to limited new truck production. Looking to the fourth quarter, although operating costs may increase slightly due to the age of our fleet, we expect our leasing and rental revenues to remain strong, contributing significantly to our overall profitability,” said Rush.
To show his appreciation for his employees’ efforts during the strong quarter, Rush announced that in mid-December, the company will present a one-time discretionary $1,000 bonus to all employees employed as of that date and who have been with the company since Sept. 22.
Looking ahead, Rush pointed to trends he was watching including fuel prices, inflation and rising interest rates, continuing limitations on new truck production capacity, pent-up demand for new trucks and ongoing widespread demand for parts and service — and expects strong financial results in the fourth quarter.
The company’s network of commercial vehicle dealerships in North America includes 150 locations in 23 states and Ontario, Canada, including 125 franchised dealership locations. The company sells trucks from Peterbilt Motors Co., a brand of Paccar Inc.; Traton SE subsidiary Navistar Inc.’s International brand; Hino Trucks, a Toyota Group company; Isuzu Commercial Truck of America Inc.; and Ford Motor Co. Its bus brands include IC Bus, from Navistar, and Blue Bird Corp.
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