UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June 30, 2023~~March 31, 2024

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________________ to _______________________

Commission File Number 0-20797

RUSH ENTERPRISES, INC.

(Exact name of registrant as specified in its charter)

Texas	74-1733016
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)	~~(I.R.S. Employer Identification No.)~~

555 I.H. 35 South, Suite 500

New Braunfels, Texas 78130

(Address of principal executive offices)

(Zip Code)

(830) 302-5200

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☑ No ☐

~~Yes ☑~~

~~No ☐~~

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

~~Yes ☑~~

Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☑	Accelerated filer ☐	Non-accelerated filer ☐	Smaller Reporting company ☐

			Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

~~Yes ☐~~

~~No ☑~~

Indicated below is the number of shares outstanding of each of the issuer’s classes of common stock, as of ~~July 31, 2023.~~May 3, 2024.

~~Title of Class~~		Number of Shares
Title of Class		Outstanding
Class A Common Stock, $.01 Par Value		~~41,704,225~~61,900,735
Class BA Common Stock, $.01 Par Value		~~12,132,380~~16,713,423

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, $0.01 par value	RUSHA	NASDAQ Global Select Market
Class B Common Stock, $0.01 par value	RUSHB	NASDAQ Global Select Market

Table of Contents

	June 30,			December 31,			March 31,			December 31,
	2023			2022			2024			2023
	(unaudited)						(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	191,897		$	201,044
Cash, cash equivalents and restricted cash							$	155,905		$	183,725
Accounts receivable, net		236,870			220,651			303,444			259,353
Note receivable, affiliate								5,500			–
Inventories, net		1,637,321			1,429,429			2,031,775			1,801,447
Prepaid expenses and other		21,707			16,619			20,377			15,779
Total current assets		2,087,795			1,867,743			2,517,001			2,260,304
Property and equipment, net		1,441,046			1,368,594			1,501,066			1,488,086
Operating lease right-of-use assets, net		104,840			102,685			119,329			120,162
Goodwill, net		417,465			416,363			419,728			420,708
Other assets, net		75,175			65,681			71,882			74,981
Total assets	$	4,126,321		$	3,821,066		$	4,629,006		$	4,364,241

Liabilities and shareholders’ equity
Current liabilities:
Floor plan notes payable	$	1,125,373		$	933,203		$	1,248,853		$	1,139,744
Current maturities of finance lease obligations		34,605			29,209			38,210			36,119
Current maturities of operating lease obligations		14,966			15,003			16,716			17,438
Trade accounts payable		186,809			171,717			181,079			162,134
Customer deposits		101,570			116,240			127,400			145,326
Accrued expenses		157,522			163,302			145,071			172,549
Total current liabilities		1,620,845			1,428,674			1,757,329			1,673,310
Long-term debt, net of current maturities		245,277			275,433			524,450			414,002
Finance lease obligations, net of current maturities		102,227			93,483			99,394			97,617
Operating lease obligations, net of current maturities		91,431			89,029			104,600			104,514
Other long-term liabilities		24,301			19,455			28,788			24,811
Deferred income taxes, net		154,955			151,970			159,525			159,571
Shareholders’ equity:
Preferred stock, par value $.01 per share; 1,000,000 shares authorized; 0 shares outstanding in 2023 and 2022		–			–
Common stock, par value $.01 per share; 105,000,000 Class A shares and 35,000,000 Class B shares authorized; 41,715,105 Class A shares and 12,179,225 Class B shares outstanding in 2023; and 42,808,333 Class A shares and 12,266,309 Class B shares outstanding in 2022		578			572
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; 61,813,022 Class A shares and 16,715,277 Class B shares outstanding in 2024; and 61,461,281 Class A shares and 16,364,158 Class B shares outstanding in 2023								815			806
Additional paid-in capital		522,375			500,642			556,001			542,046
Treasury stock, at cost: 2,635,163 Class A shares and 1,297,059 Class B shares in 2023; and 979,978 Class A shares and 927,330 Class B shares in 2022		(196,515	)		(130,930	)
Treasury stock, at cost: 1,220,155 Class A shares and 1,731,162 Class B shares in 2024; and 1,092,142 Class A shares and 1,731,157 Class B shares in 2023								(125,462	)		(119,835	)
Retained earnings		1,543,941			1,378,337			1,508,202			1,450,025
Accumulated other comprehensive income		(2,209	)		(4,130	)
Accumulated other comprehensive income (loss)								(4,054	)		(2,163	)
Total Rush Enterprises, Inc. shareholders’ equity		1,868,170			1,744,491			1,935,502			1,870,879
Noncontrolling interest		19,115			18,531			19,418			19,537
Total shareholders’ equity		1,887,285			1,763,022			1,954,920			1,890,416
Total liabilities and shareholders’ equity	$	4,126,321		$	3,821,066		$	4,629,006		$	4,364,241

The accompanying notes are an integral part of these consolidated financial statements.

	Three Months Ended June 30,					Six Months Ended June 30,				Three Months Ended March 31,
	2023			2022		2023		2022		2024			2023

Revenues
New and used commercial vehicle sales	$	1,250,794		$	1,098,255	$	2,412,519	$	2,033,974	$	1,123,319		$	1,161,725
Aftermarket products and services sales		651,130			598,298		1,299,356		1,141,561		649,196			648,226
Lease and rental sales		88,549			80,538		175,215		151,873		87,921			86,666
Finance and insurance		6,189			7,755		12,760		15,280		5,394			6,571
Other		6,390			6,395		14,969		11,755		6,169			8,579
Total revenue		2,003,052			1,791,241		3,914,819		3,354,443		1,871,999			1,911,767
Cost of products sold
New and used commercial vehicle sales		1,124,339			994,406		2,174,704		1,829,399		1,006,100			1,050,365
Aftermarket products and services sales		403,351			367,284		805,506		701,492		412,254			402,155
Lease and rental sales		61,514			55,335		121,992		103,896		63,770			60,478
Total cost of products sold		1,589,204			1,417,025		3,102,202		2,634,787		1,482,124			1,512,998
Gross profit		413,848			374,216		812,617		719,656		389,875			398,769
Selling, general and administrative expense		256,691			225,327		513,499		449,774		263,665			256,808
Depreciation and amortization expense		14,545			13,910		28,859		27,584		15,750			14,314
Gain on sale of assets		247			44		376		224		150			129
Operating income		142,859			135,023		270,635		242,522		110,610			127,776
Other (expense) income		(96	)		8,333		2,251		22,397
Other income, net											177			2,347
Interest expense, net		12,238			3,168		23,221		4,387		17,973			10,983
Income before taxes		130,525			140,188		249,665		260,532		92,814			119,140
Income tax provision		32,001			29,515		60,351		57,406		21,325			28,350
Net income		98,524			110,673		189,314		203,126		71,489			90,790
Less: Net income attributable to noncontrolling interest		249			446		584		446
Less: Net income (loss) attributable to noncontrolling interest											(119	)		335
Net income attributable to Rush Enterprises, Inc.	$	98,275		$	110,227	$	188,730	$	202,680	$	71,608		$	90,455

Net income attributable to Rush Enterprises, Inc. per share of common stock:
Basic	$	1.80		$	1.98	$	3.46	$	3.63	$	0.91		$	1.10
Diluted	$	1.75		$	1.92	$	3.35	$	3.52	$	0.88		$	1.07

Weighted average shares outstanding:
Basic		54,460			55,640		54,617		55,788		78,483			82,150
Diluted		56,104			57,310		56,334		57,610		81,454			84,846

Dividends declared per common share	$	0.21		$	0.19	$	0.42	$	0.38	$	0.17		$	0.14

The accompanying notes are an integral part of these consolidated financial statements.

																					Total								Common Stock Shares					$0.01		Additional									Accumulated Other			Total Rush Enterprises, Inc.			Non-			Total
																					Rush								Outstanding					Par		Paid -In			Treasury			Retained			Comprehensive			Shareholders’			controlling			Shareholders’
	Common Stock																	Accumulated			Enterprises,								Class A			Class B		Value		Capital			Stock			Earnings			Income (Loss)			Equity			Interest			Equity
	Shares						$0.01		Additional									Other			Inc.					Total
	Outstanding						Par		Paid -In			Treasury			Retained			Comprehensive			Shareholders’			Noncontrolling		Shareholders’
	Class A			Class B			Value		Capital			Stock			Earnings			Income (Loss)			Equity			Interest		Equity
Balance, December 31, 2022		42,345			12,083		$	572	$	500,642		$	(130,930	)	$	1,378,337		$	(4,130	)	$	1,744,491		$	18,531	$	1,763,022
Balance, December 31, 2023																														61,461			16,364	$	806	$	542,046		$	(119,835	)	$	1,450,025		$	(2,163	)	$	1,870,879		$	19,537		$	1,890,416
Stock options exercised and stock awards		152			–			2		3,412			–			–			–			3,414			–		3,414			383			–		4		5,997			–			–			–			6,001			–			6,001
Stock-based compensation related to stock options, restricted shares and employee stock purchase plan		–			–			–		13,080			–			–			–			13,080			–		13,080			–			–		–		14,090			–			–			–			14,090			–			14,090
Vesting of restricted share awards		–			281			3		(6,964	)		–			–			–			(6,961	)		–		(6,961	)		–			351		4		(9,486	)		–			–			–			(9,482	)		–			(9,482	)
Issuance of common stock under employee stock purchase plan		68			–			–		2,828			–			–			–			2,828			–		2,828			97			–		1		3,354			–			–			–			3,355			–			3.355
Common stock repurchases		(415	)		(56	)		–		–			(25,280	)		–			–			(25,280	)		–		(25,280	)		(128	)		–		–		–			(5,627	)		–			–			(5,627	)		–			(5,627	)
Cash dividends declared on Class A common stock		–			–			–		–			–			(8,897	)		–			(8,897	)		–		(8,897	)		–			–		–		–			–			(10,467	)		–			(10,467	)		–			(10,467	)
Cash dividends declared on Class B common stock		–			–			–		–			–			(2,692	)		–			(2,692	)		–		(2,692	)		–			–		–		–			–			(2,964	)		–			(2,964	)		–			(2,964	)
Foreign currency translation adjustment		–			–			–		–			–			–			232			232			–		232			–			–		–		–			–			–			(1,891	)		(1,891	)		–			(1,891	)
Net income		–			–			–		–			–			90,455			–			90,455			335		90,790			–			–		–		–			–			71,608			–			71,608			(119	)		71,489
Balance, March 31, 2023		42,150			12,308		$	577	$	512,998		$	(156,210	)	$	1,457,203		$	(3,898	)	$	1,810,670		$	18,866	$	1,829,536
Stock options exercised and stock awards		158			–			1		3,479			–			–			–			3,480			–		3,480
Stock-based compensation related to stock options, restricted shares and employee stock purchase plan		–			–			–		5,952			–			–			–			5,952			–		5,952
Vesting of restricted share awards		–			–			–		(54	)		–			–			–			(54	)		–		(54	)
Issuance of common stock under employee stock purchase plan		–			–			–		–			–			–			–			–			–		–
Common stock repurchases		(593	)		(129	)		–		–			(40,305	)		–			–			(40,305	)		–		(40,305	)
Cash dividends declared on Class A common stock		–			–			–		–			–			(8,812	)		–			(8,812	)		–		(8,812	)
Cash dividends declared on Class B common stock		–			–			–		–			–			(2,725	)		–			(2,725	)		–		(2,725	)
Foreign currency translation adjustment		–			–			–		–			–			–			1,689			1,689			–		1,689
Net income		–			–			–		–			–			98,275			–			98,275			249		98,524
Balance, June 30, 2023		41,715			12,179		$	578	$	522,375		$	(196,515	)	$	1,543,941		$	(2,209	)	$	1,868,170		$	19,115	$	1,887,285
Balance, March 31, 2024																														61,813			16,715	$	815	$	556,001		$	(125,462	)	$	1,508,202		$	(4,054	)	$	1,935,502		$	19,418		$	1,954,920

	Common Stock Shares						$0.01		Additional									Accumulated Other			Total Rush Enterprises, Inc.			Non-		Total
	Outstanding						Par		Paid -In			Treasury			Retained			Comprehensive			Shareholders’			controlling		Shareholders’
	Class A			Class B			Value		Capital			Stock			Earnings			Income (Loss)			Equity			Interest		Equity
Balance, December 31, 2022		63,518			18,125		$	572	$	500,642		$	(130,930	)	$	1,378,337		$	(4,130	)	$	1,744,491		$	18,531	$	1,763,022
Stock options exercised and stock awards		228			–			2		3,412			–			–			–			3,414			–		3,414
Stock-based compensation related to stock options, restricted shares and employee stock purchase plan		–			–			–		13,080			–			–			–			13,080			–		13,080
Vesting of restricted share awards		–			422			3		(6,964	)		–			–			–			(6,961	)		–		(6,961	)
Issuance of common stock under employee stock purchase plan		102			–			–		2,828			–			–			–			2,828			–		2,828
Common stock repurchases		(623	)		(84	)		–		–			(25,280	)		–			–			(25,280	)		–		(25,280	)
Cash dividends declared on Class A common stock		–			–			–		–			–			(8,897	)		–			(8,897	)		–		(8,897	)
Cash dividends declared on Class B common stock		–			–			–		–			–			(2,692	)		–			(2,692	)		–		(2,692	)
Foreign currency translation adjustment		–			–			–		–			–			–			232			232			–		232
Net income		–			–			–		–			–			90,455			–			90,455			335		90,790
Balance, March 31, 2023		63,225			18,463		$	577	$	512,998		$	(156,210	)	$	1,457,203		$	(3,898	)	$	1,810,670		$	18,866	$	1,829,536

The accompanying notes are an integral part of these consolidated financial statements.

Total
Rush
Common Stock Accumulated Enterprises,
Shares $0.01 Additional Other Inc. Total

Outstanding

Par

Paid -In

Treasury

Retained

Comprehensive

Shareholders’

Noncontrolling

Shareholders’

Class A Class B Value Capital Stock Earnings Income (Loss) Equity Interest Equity

Balance, December 31, 2021
43,108 12,399 $ 563 $ 470,750 $ (36,933 ) $ 1,031,582 $ 787 $ 1,466,749 – $ 1,466,749
Stock options exercised and stock awards
112 – 1 2,384 – – – 2,385 – 2,385
Stock-based compensation related to stock options, restricted shares and employee stock purchase plan
– – – 13,793 – – – 13,793 – 13,793
Vesting of restricted share awards
– 302 3 (7,215 ) – – – (7,212 ) – (7,212 )
Issuance of common stock under employee stock purchase plan
66 – 1 2,434 – – – 2,435 – 2,435
Common stock repurchases
(192 ) (104 ) – – (15,315 ) – – (15,315 ) – (15,315 )
Dividend Class A common stock
– – – – – (8,189 )
––
(8,189 ) – (8,189 )
Dividend Class B common stock
– – – – – (2,505 )
––
(2,505 ) – (2,505 )
Foreign currency translation adjustment
– – – – – – 445 445 – 445
Net income
– – – – – 92,453 – 92,453 – 92,453
Balance, March 31, 2022
43,094 12,597 $ 568 $ 482,146 $ (52,248 ) $ 1,113,341 $ 1,232 $ 1,545,039 – $ 1,545,039
Stock options exercised and stock awards
162 – 2 3,244 – – – 3,246 – 3,246
Stock-based compensation related to stock options, restricted shares and employee stock purchase plan
– – – 4,203 – – – 4,203 – 4,203
Vesting of restricted share awards
– – – (1,423 ) – – – (1,423 ) – (1,423 )
Common stock repurchases
(448 ) (331 ) – – (38,438 ) – – (38,438 ) – (38,438 )
Dividend Class A common stock
– – – – – (8,128 )
––
(8,128 ) – (8,128 )
Dividend Class B common stock
– – – – – (2,521 )
––
(2,521 ) – (2,521 )
Foreign currency translation adjustment
– – – – – – (567 ) (567 ) – (567 )
Reclassification of foreign currency translation related to equity method
– – – – – – (601 ) (601 ) – (601 )
Noncontrolling interest equity
– – – – – – – – 17,828 17,828
Net income
– – – – – 110,227 – 110,227 446 110,673
Balance, June 30, 2022
42,808 12,266 $ 570 $ 488,170 $ (90,686 ) $ 1,212,919 $ 64 $ 1,611,037 $ 18,274 $ 1,629,311

	Three Months Ended
	March 31,
	2024			2023
Cash flows from operating activities:
Net income	$	71,489		$	90,790
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		56,834			53,896
Gain on sale of property and equipment		(150	)		(129	)
Stock-based compensation expense related to employee stock options and employee stock purchases		14,090			13,080
Provision for deferred income tax expense		71			3,165
Change in accounts receivable, net		(49,933	)		(8,972	)
Change in inventories, net		(215,506	)		(52,845	)
Change in prepaid expenses and other, net		(4,623	)		(2,408	)
Change in trade accounts payable		17,446			27,130
Change in customer deposits		(17,705	)		(15,892	)
Change in accrued expenses		(26,863	)		(14,699	)
Other, net		(203	)		(650	)
Net cash (used) provided by operating activities		(155,053	)		92,466
Cash flows from investing activities:
Acquisition of property and equipment		(79,136	)		(90,446	)
Proceeds from the sale of property and equipment		3,035			122
Other		(6,913	)		(5,190	)
Net cash used in investing activities		(69,188	)		(95,514	)
Cash flows from financing activities:
Draws on floor plan notes payable – non-trade, net		110,172			82,642
Proceeds from long-term debt		698,754			257,705
Principal payments on long-term debt		(587,249	)		(270,793	)
Principal payments on finance lease obligations		(5,605	)		(4,471	)
Proceeds from issuance of shares related to employee stock options and employee stock purchases		9,360			6,245
Taxes paid related to net share settlement of equity awards		(9,486	)		(6,964	)
Payments of cash dividends		(13,868	)		(12,062	)
Common stock repurchased		(5,627	)		(24,008	)
Net cash provided by financing activities		196,451			28,294
Net (decrease) increase in cash, cash equivalents and restricted cash		(27,790	)		25,246
Effect of exchange rate on cash		(30	)		204
Cash, cash equivalents and restricted cash, beginning of period		183,725			200,842
Cash, cash equivalents and restricted cash, end of period	$	155,905		$	226,292
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest	$	18,630		$	11,712
Income taxes, net of refunds	$	518		$	374
Noncash investing and financing activities:
Assets acquired under finance leases	$	12,140		$	16,178

The accompanying notes are an integral part of these consolidated financial statements.

Six Months Ended

June 30,

2023

2022

Cash flows from operating activities:
Net income
$ 189,314 $ 203,126
Adjustments to reconcile net income to net cash provided by operating activities-
Depreciation and amortization
108,557 95,122
Gain on sale of property and equipment, net
(377 ) (224 )
Gain on joint venture transaction
– (12,500 )
Gain on business acquisition
– (6,958 )
Stock-based compensation expense related to employee equity awards and employee stock purchases
19,032 17,996
Deferred income tax expense
2,854 4,116
Change in accounts and notes receivable, net
(15,911 ) (85,110 )
Change in inventories, net
(174,353 ) (193,046 )
Change in prepaid expenses and other, net
(5,057 ) (1,922 )
Change in trade accounts payable
12,813 33,307
Change in customer deposits
(14,868 ) (8,773 )
Change in accrued expenses
(7,354 ) 18,572
Other, net
(634 ) (5,527 )
Net cash provided by operating activities
114,016 58,179
Cash flows from investing activities:
Acquisition of property and equipment
(186,000 ) (107,226 )
Proceeds from the sale of property and equipment
1,142 2,772
Business disposition
– 27,500
Business acquisition, net of cash acquired
– (15,051 )
Other
(4,088 ) (2,189 )
Net cash used in investing activities
(188,946 ) (94,194 )
Cash flows from financing activities:
Draws on floor plan notes payable – non-trade, net
191,002 190,483
Proceeds from long-term debt
653,445 571,302
Principal payments on long-term debt
(684,803 ) (574,165 )
Principal payments on finance lease obligations
(9,341 ) (8,110 )
Proceeds from issuance of shares relating to equity awards and employee stock purchases
9,724 8,068
Taxes paid related to net share settlement of equity awards
(7,017 ) (8,637 )
Payments of cash dividends
(23,449 ) (21,589 )
Common stock repurchased
(63,857 ) (52,789 )
Net cash provided by financing activities
65,704 104,563
Net (decrease) increase in cash and cash equivalents
(9,226 ) 68,548
Effect of exchange rate on cash
79 −
Cash and cash equivalents, beginning of period
201,044 148,146
Cash and cash equivalents, end of period
$ 191,897 $ 216,694
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest
$ 25,033 $ 5,964
Income taxes, net of refunds
$ 46,502 $ 38,354
Noncash activities:
Assets acquired under finance leases
$ 29,401 $ 5,749

~~The accompanying notes are an integral part of these consolidated financial statements.~~

The interim consolidated financial statements included herein have been prepared by Rush Enterprises, Inc. and its subsidiaries (collectively referred to as the “Company”), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). All adjustments have been made to the accompanying interim consolidated financial statements, which, in the opinion of the Company’s management, are necessary for a fair presentation of its operating results. All adjustments are of a normal recurring nature. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. It is recommended that these interim consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2022.~~2023. Results of operations for interim periods are not necessarily indicative of results that may be expected for any other interim periods or the full fiscal year.

Restricted cash consists of deposits for the statutory restriction on cash related to the Company’s captive insurance company of $3.1 million as of March 31, 2024.

On ~~May 16,~~July 25, 2023, the ~~Company’s shareholders approved the Certificate~~Board of ~~Amendment to the Restated Articles of Incorporation~~Directors of the Company ~~to increase~~declared a 3-for-2 stock split of the ~~number~~Company’s Class A common stock and Class B common stock, which was effected in the form of ~~authorized~~a stock dividend. On August 28, 2023, the Company distributed one additional share of stock for every two shares of Class A ~~Common Stock from 60,000,000 to 105,000,000~~common stock, par value $0.01 per share, and Class B ~~Common Stock from 20,000,000~~common stock, par value $0.01 per share, held by shareholders of record as of August 7, 2023. All share and per share data in this Form 10-Q have been adjusted and restated to ~~35,000,000.~~reflect the stock split as if it occurred on the first day of the earliest period presented.

The functional currency of the Company’s foreign subsidiary, Rush Truck Centres of Canada Limited (“RTC Canada”), is the local currency, the Canadian dollar. Results of operations for RTC Canada are translated to USD using the average exchange rate on a monthly basis during each quarter. The assets and liabilities of RTC Canada are translated into USD using the exchange rate in effect on the balance sheet date. The related translation adjustments are recorded as a separate component of the Company’s Consolidated Statements of Shareholders’ Equity in accumulated other comprehensive income (loss).

From time to time, the Company is involved in litigation arising out of its operations in the ordinary course of business. The Company maintains liability insurance, through self-insurance and third-party excess insurance, including product liability coverage, in amounts deemed adequate by management. However, an uninsured or partially insured claim, or claim for which indemnification is not available, could have a material adverse effect on the Company’s financial condition or results of operations. As of ~~June 30, 2023,~~March 31, 2024, the Company believes that there are no pending claims or litigation, individually or in the aggregate, that are reasonably likely to have a material adverse effect on its financial position or results of operations. However, due to the inherent uncertainty of litigation, there can be no assurance that the resolution of any particular claim or proceeding would not have a material adverse effect on the Company’s financial condition or results of operations for the fiscal period in which such resolution occurred.

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share ~~amounts)~~information):

Options to purchase shares of common stock that were outstanding for the three months ended March 31, 2024 and ~~six months ended June 30,~~ 2023 ~~and 2022,~~ that were not included in the computation of diluted earnings per share because the effect would have been anti-dilutive are as follows (in thousands):

The Company accounts for stock-based compensation in accordance with Accounting Standards Codification (“ASC”) 718-10, Compensation – Stock Compensation, which requires the measurement and recognition of compensation expense for all share-based payment awards made to the Company’s employees and directors, including employee stock options, restricted stock awards and employee stock purchases related to the Employee Stock Purchase Plan, based on estimated fair values.

Stock-based compensation expense, calculated using the Black-Scholes option-pricing model for employee stock options, and included in selling, general and administrative expense, was ~~$6.0~~$14.1 million for the three months ended ~~June 30, 2023,~~March 31, 2024, and ~~$4.2~~$13.1 million for the three months ended June 30, 2022. Stock-based compensation expense, included in selling, general and administrative expense, was $19.0 million for the six months ended June 30, 2023, and was $18.0 million for the six months ended June 30, 2022.March 31, 2023.

As of ~~June 30, 2023,~~March 31, 2024, the Company had ~~$14.9~~$17.6 million of unrecognized compensation ~~cost~~expense related to non-vested employee stock options to be recognized over a weighted-average period of 2.5 years and ~~$18.8~~$22.8 million of unrecognized compensation cost related to non-vested restricted stock awards to be recognized over a weighted-average period of ~~1.5~~1.6 years.

The Company measures certain financial assets and liabilities at fair value on a recurring basis. Financial instruments consist primarily of cash, accounts receivable, accounts payable and floor plan notes payable. The carrying values of the Company’s financial instruments approximate fair value due either to their short-term nature or existence of variable interest rates, which approximate market rates. Certain methods and assumptions were used by the Company in estimating the fair value of financial instruments as of ~~June 30, 2023,~~March 31, 2024, and December 31, ~~2022.~~2023. The carrying value of current assets and current liabilities approximates the fair value due to the short maturity of these items.

The fair value of the Company’s long-term debt is based on secondary market indicators. Because the Company’s debt is not quoted, estimates are based on each obligation’s characteristics, including remaining maturities, variable interest rate, credit rating, collateral and liquidity. Accordingly, the Company concluded that the valuation measurement inputs of its long-term debt represent, at its lowest level, current market interest rates available to the Company for similar debt and the Company’s current credit standing. Thus, the carrying amount of such debt approximates fair value.

The Company currently has one reportable business segment - the Truck Segment. The Truck Segment includes the Company’s operation of a network of commercial vehicle dealerships throughout the United States and Ontario, Canada that provide an integrated one-stop source for the commercial vehicle needs of its customers, including retail sales of new and used commercial vehicles; aftermarket parts, service and collision center facilities; and financial services, including the financing of new and used commercial vehicle purchases, insurance products and truck leasing and rentals. The commercial vehicle dealerships are deemed a single reporting unit because they have similar economic characteristics. The Company’s chief operating decision maker considers the entire Truck Segment, not individual dealerships or departments within its dealerships, when making decisions about resources to be allocated to the segment and assessing its performance.

The Company also has revenues attributable to three other operating segments. These segments include a retail tire company, an insurance agency and a guest ranch operation and are included in the All Other column below. None of these segments has ever met any of the quantitative thresholds for determining reportable segments.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company evaluates performance based on income before income taxes, not including extraordinary items.

The following table contains summarized information about reportable segment revenues, segment income or loss from continuing operations and segment assets for the periods ended ~~June 30,~~March 31, 2024 and 2023 ~~and 2022~~ (in thousands):

The Company had unrecognized income tax benefits totaling ~~$5.3~~$6.7 million as a component of accrued liabilities as of ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, the total of which, if recognized, would impact the Company’s effective tax rate. An unfavorable settlement would require a charge to income tax expense and a favorable resolution would be recognized as a reduction to income tax expense. The Company recognizes interest accrued related to unrecognized tax benefits in income tax expense. The Company had approximately ~~$302,000~~$389,000 accrued for the payment of interest as of ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022.~~ 2023. No amounts were accrued for penalties.

The Company does not anticipate a significant change in the amount of unrecognized tax benefits in the next 12 months. As of ~~June 30,~~December 31, 2023, the tax years ended December 31, ~~2019~~2020 through ~~2022~~2023 remained subject to audit by federal tax authorities and the tax years ended December 31, ~~2018~~2019 through ~~2022,~~2023, remained subject to audit by state tax authorities.

The Company’s non-lease and rental revenues are primarily generated from the sale of finished products to customers. Those sales predominantly contain a single delivery element and revenue from such sales is recognized when the customer obtains control, which is typically when the finished product is delivered to the customer. The Company’s material revenue streams have been identified as the following: the sale of new and used commercial vehicles, the arrangement of associated commercial vehicle financing and insurance contracts, the performance of commercial vehicle repair services and the sale of commercial vehicle parts. Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenues.

The following table summarizes the Company’s disaggregated revenue by revenue source, excluding lease and rental revenue, for the three months ended March 31, 2024 and ~~six months ended June 30,~~ 2023 ~~and 2022~~ (in thousands):

All of the Company's performance obligations and associated revenues are generally transferred to customers at a point in time. The Company did not have any material contract assets or contract liabilities on the balance sheet as of ~~June 30, 2023.~~March 31, 2024. Revenues related to commercial vehicle sales, parts sales, commercial vehicle repair service, finance and ~~the majority of~~most other revenues are related to the Truck Segment.

The Company primarily leases commercial vehicles that the Company owns to customers primarily over periods of one to ten years. The Company does not separate lease and nonlease components. Nonlease components typically consist of maintenance and licensing for the commercial vehicle. The variable nonlease components are generally based on mileage. Some leases contain an option for the lessee to purchase the commercial vehicle at the end of the lease term.

The Company’s policy is to depreciate its lease and rental fleet using a straight-line method over each customer’s contractual lease term. The lease unit is depreciated to a residual value that approximates fair value at the expiration of the lease term. This policy results in the Company realizing reasonable gross margins while the unit is in service and a corresponding gain or loss on sale when the unit is sold at the end of the lease term.

Sales-type leases are recognized by the Company as lease receivables. The lessee obtains control of the underlying asset and the Company recognizes sales revenue upon lease commencement. The receivable for sales-type leases as of June 30, 2023 was $6.1 million, compared to $6.0 million as of December 31, 2022, and is reflected in Other Assets on the Consolidated Balance Sheet.

Lease and rental income during the three ~~and six~~ months ended ~~June 30,~~March 31, 2024 and March 31, 2023 ~~and June 30, 2022~~ consisted of the following (in thousands):

The following table shows the components of accumulated other comprehensive income (loss) (in thousands):

The functional currency of the Company’s foreign subsidiary, RTC Canada, is its local currency. Results of operations of RTC Canada are translated into USD using the average exchange rates ~~on a~~ monthly ~~basis~~ during the year. The assets and liabilities of RTC Canada are translated into USD using the exchange rates in effect on the balance sheet date. The related translation adjustments are recorded in a separate component of stockholders' equity in accumulated other comprehensive loss and the statement of comprehensive income.

The Company establishes an allowance for credit losses to present the net amount of accounts receivable expected to be collected. Under Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, the Company is required to remeasure expected credit losses for financial instruments held on the reporting date based on historical experience, current conditions, and reasonable forecasts.

Accounts receivable consists primarily of commercial vehicle sales receivables, manufacturers’ receivables and leasing, parts and service sales receivables and other trade receivables. The Company maintains an allowance for credit losses based on the probability of default, its historical rate of losses, aging and current economic conditions. The Company writes off account balances when it has exhausted reasonable collection efforts and determined that the likelihood of collection is remote. These write-offs are charged against the allowance for credit losses.

The following table summarizes the changes in the allowance for credit losses (in thousands):

The following acquisition, unless otherwise noted, was considered a business combination accounted for under ASC 805 “Business Combinations.” Pro forma information is not included in accordance with ASC 805 since the acquisition was not considered material.

On ~~May 2, 2022,~~December 4, 2023, the Company ~~completed~~acquired certain assets of Freeway Ford Truck Sales, Inc., which included real estate and a Ford commercial vehicle franchise in Chicago, Illinois, along with commercial vehicle and parts inventory. The transaction was valued at approximately $16.3 million, with the ~~acquisition of an additional 30% equity interest~~purchase price paid in ~~RTC Canada, resulting in an 80% controlling interest in RTC Canada. The acquisition was accounted for as an acquisition achieved in stages under ASC 805,~~ ~~Business Combinations~~. The acquisition-date fair value of the previous 50% equity interest was $44.7 million, resulting in a gain of $7.0 million included in the line item Other income (expense) on the Consolidated Statements of Income for the three months ended June 30, 2022 and for the six months ended June 30, 2022. The Company also recognized a reversal of deferred tax liabilities of $2.2 million and $0.6 million related to reclassification of the foreign currency translation adjustment related to the remeasurement of the Company’s previous equity method investment in RTC Canada Income for the three months ended June 30, 2022 and for the six months ended June 30, 2022.cash.

As of May 2, 2022, the Company established a noncontrolling interest related to the minority holders. The fair value of the 20% noncontrolling interest in RTC Canada is estimated to be $17.8 million. The fair value of the noncontrolling interest was estimated using a combination of the income approach and a market approach. Since RTC Canada is a private company, the fair value measurement is based on significant inputs that are not observable in the market and thus represents a Level 3 measurement as defined in ASC 820, ~~Fair Value Measurement~~. The fair value estimates are based on: (i) a discount rate of 11%; (ii) a terminal value based on a long-term sustainable growth rate of 3%; (iii) financial multiples of companies in the same industry as RTC Canada; and (iv) adjustments because of the lack of control or lack of marketability that market participants would consider when estimating the fair value of the noncontrolling interest in RTC Canada.

~~The purchase price was allocated based on the fair values of the assets and liabilities at the date of acquisition as follows (in thousands):~~

~~The goodwill of $44.2 million for the RTC Canada acquisition is primarily attributable to the synergies expected to arise after obtaining a controlling interest in the entity.~~

Prior to May 2, 2022, the Company accounted for its 50% equity interest in RTC Canada as an equity-method investment. Subsequent to the Company’s acquisition of the additional 30% equity interest on May 2, 2022, operations of RTC Canada are included in the accompanying consolidated financial statements.

~~On July 25, 2023, the Company’s Board of Directors declared a~~ ~~three-for-two~~ stock split with respect to both the Company’s Class A and Class B common stock. The stock split will be effected in the form of a stock dividend payable on August 28, 2023, to shareholders of record as of August 7, 2023. Holders of the Company’s common stock will receive an additional one-half share for each share of common stock held as of the record date. The Company’s Class A and Class B common stock will begin trading on a split adjusted basis on August 29, 2023.

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Certain statements contained in this Form 10-Q (or otherwise made by the Company or on the Company’s behalf from time to time in other reports, filings with the Securities and Exchange Commission (“SEC”), news releases, conferences, website postings or otherwise) that are not statements of historical fact constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act of 1934, as amended (the “Exchange Act”), notwithstanding that such statements are not specifically identified. Forward-looking statements include statements about the Company’s financial position, business strategy and plans and objectives of management of the Company for future operations. These forward-looking statements reflect the best judgments of the Company about the future events and trends based on the beliefs of the Company’s management as well as assumptions made by and information currently available to the Company’s management. Use of the words “may,” “should,” “continue,” “plan,” “potential,” “anticipate,” “believe,” “estimate,” “expect” and “intend” and words or phrases of similar import, as they relate to the Company or its subsidiaries or Company management, are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Forward-looking statements reflect our current view of the Company with respect to future events and are subject to risks and uncertainties that could cause actual results to differ materially from those in such statements. Please read Item 1A. “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2022,~~2023, for a discussion of certain of those risks. Other unknown or unpredictable factors could also have a material adverse effect on future results. Although the Company believes that its expectations are reasonable as of the date of this Form 10-Q, it can give no assurance that such expectations will prove to be correct. The Company does not intend to update or revise any forward-looking statements unless securities laws require it to do so, and the Company undertakes no obligation to publicly release any revisions to forward-looking statements, whether because of new information, future events or otherwise.

The following comments should be read in conjunction with the Company’s consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q.

Peterbilt® is a registered trademark of Peterbilt Motors Company. PACCAR® is a registered trademark of PACCAR, Inc. PacLease® is a registered trademark of PACCAR Leasing Corporation. Navistar® is a registered trademark of Navistar International, Inc. International® is a registered trademark of Navistar, Inc. Idealease is a registered trademark of Idealease, Inc. aka Idealease of North America, Inc. Blue Bird® is a registered trademark of Blue Bird Investment Corporation. IC Bus® is a registered trademark of IC Bus, LLC. Hino® is a registered trademark of Hino Motors, Ltd. Isuzu® is a registered trademark of Isuzu Motors Limited. Ford® is a registered trademark of Ford Motor Company. Dennis Eagle®is a registered trademark of Dennis Eagle Limited. Cummins® is a registered trademark of Cummins, Inc. This report contains additional trade names or trademarks of other companies. Our use of such trade names or trademarks should not imply any endorsement or relationship with such companies.

Rush Enterprises, Inc. was incorporated in Texas in 1965 and consists of one reportable segment, the Truck Segment, and conducts business through its subsidiaries. Our principal offices are located at 555 IH 35 South, Suite 500, New Braunfels, Texas 78130.

We are a full-service, integrated retailer of commercial vehicles and related services. The Truck Segment includes our operation of a network of commercial vehicle dealerships under the name “Rush Truck Centers.” Rush Truck Centers primarily sell commercial vehicles manufactured by Peterbilt, International, Hino, Ford, Isuzu, ~~Dennis Eagle,~~ IC Bus, Blue Bird and ~~Blue Bird.~~Dennis Eagle. Through our strategically located network of Rush Truck Centers, we provide one-stop service for the needs of our commercial vehicle customers, including retail sales of new and used commercial vehicles, aftermarket parts sales, service and repair facilities, financing, leasing and rental, and insurance products.

Our Rush Truck Centers are principally located in high traffic areas throughout the United States and Ontario, Canada. Since commencing operations as a Peterbilt heavy-duty truck dealer in 1966, we have grown to operate over 125 franchised Rush Truck Centers in 2322 states. In 2019, we purchased a 50% equity interest in an entity in Canada, Rush Truck Centres of Canada Limited (“RTC Canada”) and on May 2, 2022, we purchased an additional 30% equity interest in RTC Canada that increased our equity interest to 80%. RTC Canada currently owns and operates 1514 International dealership locations in Ontario. Prior to acquiring the additional 30%, we accounted for the equity interest in RTC Canada using the equity method of accounting. Now, the operating results of RTC Canada are consolidated in the Consolidated Statements of Operations, the Statements of Comprehensive Income, the Consolidated Balance Sheets and commercial vehicle unit sales data as of May 2, 2022.

Our business strategy consists of providing solutions to the commercial vehicle industry through our network of commercial vehicle dealerships. We offer an integrated approach to meeting customer needs by providing service, parts and collision repairs in addition to new and used commercial vehicle sales and leasing, plus financial services, vehicle upfitting, CNG fuel systems through our joint venture with Cummins and vehicle telematics products. We intend to continue to implement our business strategy, reinforce customer loyalty and remain a market leader by continuing to develop our Rush Truck Centers as we expand our product offerings and extend our dealership network through strategic acquisitions of new locations and opening new dealerships in our existing areas of operation to enable us to better serve our customers.

A.C.T. Research Co., LLC (“~~A. C.T.~~A.C.T. Research”), a commercial vehicle industry data and forecasting service provider, currently forecasts new U.S. Class 8 retail truck sales to be ~~272,600~~228,000 units in ~~2023,~~2024, which would represent a ~~5.2% increase~~16.0% decrease compared to ~~2022.~~2023. As anticipated, our Class 8 new truck sales in the first quarter were down significantly from the same time period in 2023, due to the previously anticipated industry downturn in new Class 8 truck sales caused by new truck production having caught up to the pent-up market demand and persistent low freight rates and high interest rates. We expect our new Class 8 truck sales in the second quarter to be better than our results in the first quarter. However, we also expect that new U.S. Class 8 retail truck sales in the second half of 2024 will be less than in the first half of the year. We expect our U.S. market share of new Class 8 truck sales to range between ~~6.1%~~5.9% and ~~6.6%~~6.4% in ~~2023.~~2024. This market share percentage would result in the sale of approximately ~~16,500~~13,500 to ~~18,000~~14,500 new Class 8 trucks in ~~2023. Additionally, we~~2024. We expect to sell approximately ~~750~~550 new Class 8 trucks in Canada in ~~2023.~~2024.

With respect to new U.S. Class 4 through 7 retail commercial vehicle sales, A.C.T. Research currently forecasts sales to be ~~248,150~~262,000 units in ~~2023,~~2024, which would represent a ~~6.2%~~3.7% increase compared to ~~2022.~~2023. As we look forward, new Class 4 through 7 commercial vehicle production is still somewhat constrained, but we believe it will continue to improve, and we expect demand to remain steady as customers replace older equipment with new vehicles. Currently, we believe Class 4 through 7 commercial vehicle sales will improve in the second quarter compared to the first quarter and remain strong for the remainder of the year. We expect our U.S. market share of new Class 4 through 7 commercial vehicle sales to range between ~~4.6%~~5.2% and ~~5.2%~~5.5% in ~~2023.~~2024. This market share percentage would result in the sale of approximately ~~11,500~~13,500 to ~~13,000~~14,500 new Class 4 through 7 commercial vehicles in ~~2023. Additionally, we~~2024. We expect to sell approximately ~~250~~500 new Class 5 through 7 commercial vehicles in Canada in ~~2023.~~2024.

We expect to sell approximately 1,800 to 2,000 light-duty vehicles and approximately ~~6,700~~6,500 to ~~7,300~~7,500 used commercial vehicles in ~~2023.~~

We2024, and we expect lease and rental revenue to increase ~~10% to 15%~~approximately 3% during ~~2023,~~2024, compared to ~~2022. This projected increase in lease and rental revenue is primarily related to strong demand for lease commercial vehicles and the consolidation of RTC Canada into our operating results.~~2023.

With respect to ~~Aftermarket~~our parts, service, and collision center (collectively referred to herein as “Aftermarket Products and ~~Services,~~Services”) operations, we ~~are beginning~~expect that the sluggish freight market, persistent inflation and high interest rates will continue to ~~see demand softening due to difficult operating conditions affecting certain customers, particularly~~negatively impact our over-the-road customers, ~~which is~~including both small carriers and larger fleets. In the second quarter of 2024, we expect demand for Aftermarket Parts and Services will remain consistent with the first quarter. We believe that the current freight recession will continue to negatively impact our ~~largest customer segment.~~customers until at least late 2024. Despite ~~a difficult~~the challenging operating environment, we believe that ~~our ability~~the strategic decisions we made several years ago to ~~execute on certain of our strategic initiatives and our commitment to diversifying~~diversify our customer base ~~over~~and focus on supporting large national fleets, along with our current efforts to reduce expenses across all areas of the ~~last couple of years~~company, will ~~enable~~allow us to ~~continue~~successfully navigate this difficult market cycle. We also believe that our Aftermarket Products and Services revenues will increase between 1% and 5% in 2024, compared to ~~achieve strong financial results going forward.~~

The above projections for new commercial vehicle sales will depend on our ability to obtain commercial vehicles from the manufacturers we represent and such projections could be negatively impacted by manufacturer allocation decisions, supply chain issues affecting manufacturers’ production and delivery delays by truck body upfitters due to supply issues, which are primarily affecting medium-duty truck deliveries. In addition, we continue to monitor inflation, interest rates and freight rates, which may negatively impact consumer spending and capital expenditures across a variety of industries we support.2023.

The preparation of our interim unaudited consolidated financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and the related disclosures of contingent assets and liabilities in our interim unaudited consolidated financial statements and accompanying notes. In accordance with GAAP, we base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. We evaluate our estimates, judgments and assumptions on an ongoing basis, and while we believe that our estimates, judgments and assumptions are reasonable, they are based upon information available at the time. Actual results might differ from these estimates under different assumptions or conditions.

Our significant accounting policies are discussed in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" under the heading "Critical Accounting Policies and Estimates" in our Form 10-K. There were no material changes to our significant accounting policies.

The following discussion and analysis ~~includes~~include our historical results of operations for the three months ended March 31, 2024, and ~~six months periods ended June 30, 2023 and 2022.~~2023.

The following table sets forth certain financial data as a percentage of total revenues for the periods indicated:

The following table sets forth for the periods indicated the percent of gross profit by revenue source:

The following table sets forth the unit sales and revenues for new heavy-duty, new medium-duty, new light-duty and used commercial vehicles and ~~the~~our absorption ratio ~~(revenues~~(revenue in millions):

Management uses several performance metrics to evaluate the performance of our commercial vehicle dealerships and considers Rush Truck Centers’ “absorption ratio” to be of critical importance. Our absorption ratio is calculated by dividing the gross profit from our Aftermarket Products and Services 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, all of the gross profit from the sale of a commercial vehicle, after sales commissions and inventory carrying costs, directly impacts operating profit. Our commercial vehicle dealerships achieved a ~~139.7%~~130.1% absorption ratio for the ~~second~~first quarter of ~~2023 and~~2024, compared to a ~~136.4%~~136.5% absorption ratio for the ~~second~~first quarter of ~~2022.~~2023.

Three Months Ended ~~June 30, 2023~~March 31, 2024 Compared to Three Months Ended ~~June 30, 2022~~March 31, 2023

Total revenues ~~increased $211.8~~decreased $39.8 million, or ~~11.8%~~2.1%, in the ~~second~~first quarter of ~~2023,~~2024, compared to the ~~second~~first quarter of ~~2022.~~2023. This ~~increase~~decrease was primarily the result of ~~strong~~decreased demand for new ~~commercial vehicles, increased production of commercial vehicles from the manufacturers we represent~~Class 8 trucks and ~~the consolidation of RTC Canada into~~high interest rates and low freight rates that are negatively impacting our ~~operating results as of May 2022.~~over-the-road customers, our largest customer segment.

Our Aftermarket Products and Services revenues ~~increased $52.8~~totaled $649.2 million ~~or 8.8%,~~ in the ~~second~~first quarter of ~~2023, compared to~~2024, up 0.1% from the ~~second~~first quarter of ~~2022.~~2023. The slight increase in Aftermarket Parts and Services revenues was ~~primarily a result~~related to the continued moderating of ~~healthy demand,~~ inflation and ~~the consolidation of RTC Canada into~~challenging economic conditions that are negatively impacting our ~~operating results.~~over-the-road customers.

Revenues from sales of new and used commercial vehicles ~~increased $152.5~~decreased $38.4 million, or ~~13.9%~~3.3%, in the ~~second~~first quarter of ~~2023,~~2024, compared to the ~~second~~first quarter of ~~2022.~~2023. The ~~increase~~decrease in new commercial vehicle revenues was primarily a result of ~~strong~~decreased demand ~~increased~~for new Class 8 trucks caused by high interest rates and production recently catching up to the pent-up demand experienced over the last couple of ~~commercial vehicles from the manufacturers we represent and the consolidation of RTC Canada into our operating results.~~years.

We sold ~~4,300~~3,494 new Class 8 trucks in the ~~second~~first quarter of ~~2023,~~2024, a ~~3.2% increase~~20.0% decrease compared to ~~4,168~~4,365 new Class 8 trucks sold in the ~~second~~first quarter of ~~2022.~~2023. The ~~increase~~decrease in new Class 8 truck sales was primarily related to delayed deliveries to certain large fleet customers due to delays associated with body companies and decreased demand caused by high interest rates and production recently catching up to the pent-up demand experienced over the last couple of years. New U.S. Class 8 retail truck sales totaled 57,181 units in the first quarter of 2024, a ~~result~~decrease of ~~strong demand, increased production~~13.1% compared to the first quarter of ~~commercial vehicles from the manufacturers we represent and the consolidation of RTC Canada into our operating results.~~2023, according to ACT Research.

We sold ~~3,477~~3,331 new Class 4 through 7 medium-duty commercial vehicles, including ~~462~~386 buses, in the ~~second~~first quarter of ~~2023,~~2024, a ~~23.5%~~9.6% increase compared to ~~2,815~~3,038 new medium-duty commercial vehicles, including ~~279~~332 buses, in the ~~second~~first quarter of ~~2022.~~2023. The increase in our new Class 4 through 7 commercial vehicle sales in the first quarter was primarily ~~a result of strong demand,~~related to increased production of medium-duty commercial vehicles ~~from~~by the manufacturers we ~~represent and~~represent. New U.S. Class 4 through 7 retail commercial vehicle sales totaled 59,786 units in the ~~consolidation~~first quarter of ~~RTC Canada into our operating results.~~2024, up 6.5% compared to the first quarter of 2023, according to ACT Research.

We sold ~~452~~456 light-duty vehicles in the ~~second~~first quarter of ~~2023,~~2024, a ~~10.8% increase~~9.5% decrease compared to ~~408~~504 light-duty vehicles sold in the ~~second~~first quarter of ~~2022.~~2023.

We sold ~~1,869~~1,818 used commercial vehicles in the ~~second~~first quarter of ~~2023, a 14.7%~~2024, an 8.0% increase compared to ~~1,629~~1,684 used commercial vehicles ~~sold~~ in the ~~second~~first quarter of ~~2022. Although we experienced growth in~~2023. We expect used commercial vehicle ~~sales year-over-year, we expect~~ demand and values to remain low through ~~2023~~2024 due to ~~new commercial vehicle production continuing to increase~~high interest rates and anticipated low freight rates.

Commercial vehicle lease and rental revenues increased ~~$8.0~~$1.2 million, or ~~9.9%~~1.4%, in the ~~second~~first quarter of ~~2023,~~2024, compared to the ~~second~~first quarter of ~~2022. This~~2023. The slight increase in commercial vehicle lease and rental revenues was primarily due to the delivery of new leased vehicles, as manufacturers were able to increase production, which was partially offset by a ~~result of strong demand for lease commercial vehicles and the consolidation of RTC Canada into our operating results.~~slight decrease in rental utilization.

Finance and insurance revenues decreased ~~$1.6~~$1.2 million, or ~~20.2%~~17.9%, in the ~~second~~first quarter of ~~2023,~~2024, compared to the ~~second~~first quarter of ~~2022.~~2023. This decrease is primarily due to the mix of purchasers of commercial vehicles. During the ~~second~~first quarter of ~~2023,~~2024, most of our sales were to larger fleets, which usually arrange their own financing. We are more likely to provide financing to owner-operators and smaller fleets, which comprised a smaller percentage of commercial vehicle sales during the ~~second~~first quarter of ~~2023.~~2024. Finance and insurance revenues have limited direct costs and, therefore, contribute a disproportionate share of our operating profits.

Gross profit ~~increased $39.6~~decreased $8.9 million, or ~~10.6%~~2.2%, in the ~~second~~first quarter of ~~2023,~~2024, compared to the ~~second~~first quarter of ~~2022.~~2023. Gross profit as a percentage of sales decreased to ~~20.7%~~20.8% in the ~~second~~first quarter of ~~2023,~~2024, from 20.9% in the ~~second~~first quarter of 2022. This decrease in gross profit as a percentage of sales is a result of a change in our product sales mix. Commercial vehicle sales, a lower margin revenue item, increased as a percentage of total revenues to 62.4% in the second quarter of 2023, from 61.3% in the second quarter of 2022. Aftermarket Products and Services revenues, a higher margin revenue item, decreased as a percentage of total revenues to 32.5% in the second quarter of 2023, from 33.4% in the second quarter of 2022.2023.

Gross margins from our Aftermarket Products and Services operations decreased to ~~38.1%~~36.5% in the ~~second~~first quarter of ~~2023,~~2024, from ~~38.6%~~38.0% in the ~~second~~first quarter of ~~2022.~~2023. Gross profit ~~from our~~for the Aftermarket Products and Services ~~operations increased~~departments decreased to ~~$247.8~~$236.9 million in the ~~second~~first quarter of ~~2023,~~2024, from ~~$231.0~~$246.1 million in the ~~second~~first quarter of ~~2022.~~2023. This ~~increase~~decrease is primarily related to ~~the consolidation~~continued moderating of ~~RTC Canada into~~inflation and softening demand due to difficult economic conditions impacting many of our ~~operating results and strong parts and service demand.~~customers. Historically, gross margins on parts sales range from 28% to 30% and gross margins on service and collision center operations range from 66% to 68%. Gross profits from parts sales represented ~~60.5%~~57.5% of total gross profit ~~from~~for Aftermarket Products and Services operations in the ~~second~~first quarter of ~~2023~~2024 and ~~63.6%~~61.4% in the ~~second~~first quarter of ~~2022.~~2023. Service and collision center operations represented ~~39.5%~~42.5% of total gross profit ~~from~~for Aftermarket Products and Services operations in the ~~second~~first quarter of ~~2023~~2024 and ~~36.4%~~38.6% in the ~~second~~first quarter of ~~2022.~~2023. We expect blended gross margins on Aftermarket Products and Services operations to range from ~~37.5%~~36.0% to ~~38.5%~~38.0% in ~~2023.~~2024.

Gross margins on new Class 8 truck sales ~~increased~~decreased to ~~10.3%~~9.7% in the ~~second~~first quarter of ~~2023,~~2024, from ~~9.9%~~9.8% in ~~the second quarter of 2022. This increase was primarily due to strong demand for new Class 8 trucks and the mix of purchasers during~~ the first quarter of 2023. In ~~2023,~~2024, we expect overall gross margins from new heavy-duty truck sales of approximately ~~9.0%~~8.5% to ~~10.0%~~9.5%.

Gross margins on new Class 4 through 7 commercial vehicle sales increased to 9.3% in the first quarter of 2024, from 8.8% in the ~~second~~first quarter of ~~2023, from 7.3% in the second quarter of 2022.~~2023. This increase was primarily due to the mix of purchasers during the ~~second~~first quarter of ~~2023.~~2024. For ~~2023,~~2024, we expect overall gross margins from new medium-duty commercial vehicle sales of approximately ~~7.5%~~8.0% to ~~8.8%~~9.0%, but this will largely depend upon the mix of purchasers and types of vehicles sold.

Gross margins on used commercial vehicle sales increased to ~~11.8%~~21.6% in the ~~second~~first quarter of ~~2023,~~2024, from ~~10.6%~~9.0% in the ~~second~~first quarter of ~~2022.~~2023. This increase was primarily due to ~~strategic~~successful execution on our used truck inventory ~~management.~~and sales strategy. We expect margins on used commercial vehicles to range between ~~8.0%~~15.0% and ~~10.0%~~20.0% in ~~2023.~~2024.

Gross margins from truck lease and rental sales decreased to ~~30.5%~~27.5% in the ~~second~~first quarter of ~~2023,~~2024, from ~~31.3%~~30.2% in the ~~second~~first quarter of ~~2022.~~2023. This decrease is primarily related to ~~increased maintenance expenses for the lease~~a decrease in rental utilization rates, which have returned to historical levels as new commercial vehicle production has normalized and rental ~~fleet. In addition, lease revenue, a lower margin revenue item, increased more than rental revenue, a higher margin revenue item, in the second quarter of 2023 compared to the second quarter of 2022.~~customers have purchased or leased new commercial vehicles. We expect gross margins from lease and rental sales of approximately ~~29.0%~~28.0% to ~~31.0%~~30.0% during ~~2023.~~2024. Our policy is to depreciate our lease and rental fleet using a straight-line method over each customer’s contractual lease term. The lease unit is depreciated to a residual value that approximates fair value at the expiration of the lease term. This policy results in us realizing reasonable gross margins while the unit is in service and a corresponding gain or loss on sale when the unit is sold at the end of the lease term.

Finance and insurance revenues and other ~~revenues,~~income, as described above, have limited direct costs and, therefore, contribute a disproportionate share of gross profit.

Selling, General and Administrative (“SG&A”) expenses increased ~~$31.4~~$6.9 million, or ~~13.9%~~2.7%, in the ~~second~~first quarter of ~~2023,~~2024, compared to the ~~second~~first quarter of ~~2022.~~2023. This increase primarily resulted from increased personnel expense and other increased ~~selling expense,~~costs due to inflation, compared to the ~~second~~first quarter of ~~2022, and in addition, increased general and administrative expense associated with consolidation of RTC Canada into our operating results.~~2023. SG&A expenses as a percentage of total revenues increased to ~~12.8%~~14.1% in the ~~second~~first quarter of ~~2023,~~2024, from ~~12.6%~~13.4% in the ~~second~~first quarter of ~~2022.~~2023. Annual SG&A expenses as a percentage of total revenues have ranged from approximately 12.4% to 14.4% over the last five years. In general, when new and used commercial vehicle revenues increase as a percentage of total revenues, SG&A expenses as a percentage of total revenues will be at the lower end of this range. For ~~2023,~~2024, we expect SG&A expenses as a percentage of total revenues to range from ~~12.8%~~13.0% to ~~13.5%~~14.0%. For ~~2023,~~2024, we expect the selling portion of SG&A expenses to be approximately 25.0% to 30.0% of new and used commercial vehicle gross profit.

Net interest expense increased ~~$9.1~~$7.0 million, or ~~286.3%~~63.6%, in the ~~second~~first quarter of ~~2023,~~2024, compared to the ~~second~~first quarter of ~~2022.~~2023. This increase in interest expense is a result of the increase in inventory levels and rising interest rates on our variable rate debt compared to ~~2022.~~the first quarter of 2023. We expect net interest expense in ~~2023,~~2024 to increase compared to ~~2022, to increase~~2023, primarily due to increased borrowings under our credit facilities and the interest related ~~to our working capital lines of credit and floor plan debt,~~thereto, but the amount of the increase will depend on inventory levels, interest rate fluctuations and the amount of cash available to make prepayments on our floor plan arrangements. We expect that the amount of borrowings on our credit facilities will decline during the remainder of 2024 and that the net interest expense associated therewith will subside.

As a result of the factors described above, income before income taxes decreased ~~$9.7~~$26.3 million, or ~~6.9%~~22.1%, in the ~~second~~first quarter of ~~2023,~~2024, compared to the ~~second~~first quarter of 2022. This decrease is primarily due to the one-time gain of $9.8 million recognized in the second quarter of 2022 related to the acquisition of an additional 30% interest in Rush Truck Centres of Canada Limited.2023.

Income taxes ~~increased $2.5~~decreased $7.0 million, or ~~8.4%~~24.8%, in the ~~second~~first quarter of ~~2023,~~2024, compared to the ~~second~~first quarter of ~~2022.~~2023. We provided for taxes at a ~~24.5%~~23.0% effective rate in the ~~second~~first quarter of ~~2023~~2024 and ~~21.1%~~23.8% in the ~~second~~first quarter of ~~2022.~~2023. We expect our effective tax rate to be approximately 24.0% to ~~24.5%~~25.0% of pretax income in ~~2023.~~

Unless otherwise stated below, our variance explanations and future expectations with regards to the items discussed in this section are set forth in the discussion of the “Three Months Ended June 30, 2023, Compared to Three Months Ended June 30, 2022.”

Total revenues increased $560.4 million, or 16.7%, in the first six months of 2023, compared to the first six months of 2022. Sales of new and used commercial vehicles increased $378.5 million, or 18.6%, in the first six months of 2023, compared to the first six months of 2022.

~~Aftermarket Products and Services revenues increased $157.8 million, or 13.8%, in the first six months of 2023, compared to the first six months of 2022.~~

We sold 8,665 new Class 8 heavy-duty trucks in the first six months of 2023, a 12.6% increase compared to 7,696 new Class 8 heavy-duty trucks in the first six months of 2022. According to A.C.T. Research, retail sales in the U.S. Class 8 truck market increased 19.9% in the first six months of 2023, compared to the first six months of 2022.

We sold 6,513 new Class 4 through 7 medium-duty commercial vehicles, including 805 buses, in the first six months of 2023. This represented a 31.4% increase compared to 4,956 new Class 4 through 7 medium-duty commercial vehicles, including 504 buses, in the first six months of 2022. A.C.T. Research estimates that unit sales of new Class 4 through 7 commercial vehicles in the U.S. increased approximately 9.2% in the first six months of 2023, compared to the first six months of 2022.

~~We sold 956 new light-duty vehicles in the first six months of 2023, a 7.5% increase compared to 889 new light-duty vehicles sold in the first six months of 2022.~~

~~We sold 3,553 used commercial vehicles in the first six months of 2023, an 11.7% decrease compared to 4,024 used commercial vehicles in the first six months of 2022.~~

~~Truck lease and rental revenues increased $23.3 million, or 15.4%, in the first six months of 2023, compared to the first six months of 2022.~~

~~Finance and insurance revenues decreased $2.5 million, or 16.5%, in the first six months of 2023, compared to the first six months of 2022.~~

Gross profit increased $93.0 million, or 12.9%, in the first six months of 2023, compared to the first six months of 2022. Gross profit as a percentage of sales was 20.8% in the first six months of 2023 and 21.5% in the first six months of 2022.

Gross margins from Aftermarket Products and Services operations decreased to 38.0% in the first six months of 2023, from 38.5% in the first six months of 2022. Gross profit for Aftermarket Products and Services was $493.9 million in the first six months of 2023, compared to $440.1 million in the first six months of 2022. Gross profit from parts sales represented 61.0% of the total gross profit for Aftermarket Products and Services operations in the first six months of 2023 and 63.1% in the first six months of 2022. Service and collision center operations represented 39.0% of the total gross profit for Aftermarket Products and Services operations in the first six months of 2023 and 36.9% in the first six months of 2022.

~~Gross margins on new Class 8 heavy-duty truck sales increased to 10.1% in the first six months of 2023, from 9.8% in the first six months of 2022.~~

~~Gross margins on new Class 4 through 7 medium-duty commercial vehicle sales increased to 8.8% in the first six months of 2023, from 7.8% in the first six months of 2022.~~

~~Gross margins on used commercial vehicle sales decreased to 10.5% in the first six months of 2023, from 13.6% in the first six months of 2022.~~

~~Gross margins from truck lease and rental sales decreased to 30.4% in the first six months of 2023, from 31.6% in the first six months of 2022.~~

~~Finance and insurance revenues and other income, as described above, have limited direct costs and, therefore, contribute a disproportionate share of gross profit.~~

SG&A expenses increased $63.7 million, or 14.2%, in the first six months of 2023, compared to the first six months of 2022. SG&A expenses equaled 13.1% of total revenue in the first six months of 2023, compared to 13.4% in the first six months of 2022.

~~Net interest expense increased $18.8 million, or 429.3%, in the first six months of 2023, compared to the first six months of 2022.~~

~~Income before income taxes decreased $10.9 million, or 4.2%, in the first six months of 2023, compared to the first six months of 2022.~~

Income taxes increased $2.9 million, or 5.1%, in the first six months of 2023, compared to the first six months of 2022. We provided for taxes at a 24.2% rate in the first six months of 2023 and a 22.0% rate in the first six months of 2022.2024.

Our short-term cash requirements are primarily for working capital, inventory financing, the renovation and expansion of existing facilities and the construction or purchase of new facilities. Historically, these cash requirements have been met through the retention of profits, borrowings under our floor plan arrangements and bank financings. As of ~~June 30, 2023,~~March 31, 2024, we had working capital of approximately ~~$467.0~~$758.8 million, including ~~$191.9~~$155.9 million in cash, available to fund our operations. We believe that these funds, together with expected cash flows from operations, are sufficient to meet our operating requirements for at least the next twelve months. From time to time, we utilize our excess cash on hand to pay down our outstanding borrowings under various credit agreements. The resulting interest earned on the floor plan credit agreement with BMO Harris Bank N.A. (“BMO Harris”) (the “Floor Plan Credit Agreement”) is recognized as an offset to our interest expense.

We continually evaluate our liquidity and capital resources based upon: (i) our cash, ~~and~~ cash equivalents and restricted cash on hand; (ii) the funds that we expect to generate through future operations; (iii) current and expected borrowing availability under our secured line of credit, working capital lines of credit available under certain of our credit agreements and our Floor Plan Credit Agreement; and (iv) the potential impact of our capital allocation strategy and any contemplated or pending future transactions, including, but not limited to, acquisitions, equity repurchases, dividends, or other capital expenditures. We believe we will have sufficient liquidity to meet our debt service and working capital requirements, commitments and contingencies, debt repayments, acquisitions, capital expenditures and any operating requirements for at least the next twelve months.

We have a secured line of credit that provides for a maximum borrowing of $20.0 million. There were no advances outstanding under this secured line of credit on ~~June 30, 2023,~~March 31, 2024, however, ~~$18.0~~$18.9 million was pledged to secure various letters of credit related to self-insurance products, leaving ~~$2.0~~$1.1 million available for future borrowings as of ~~June 30, 2023.~~March 31, 2024.

Our ~~long-term debt,~~ floor plan financing agreements and the credit agreement with Wells Fargo Bank, National Association the (“WF Credit Agreement”) require us to satisfy various financial ratios such as the leverage ratio, the asset coverage ratio and the fixed charge coverage ratio. As of ~~June 30, 2023,~~March 31, 2024, we were in compliance with all debt covenants related to debt secured by lease and rental units, our floor plan credit agreements and the WF Credit Agreement. We do not anticipate any breach of ~~the~~these covenants in the foreseeable future.

We expect to purchase or lease commercial vehicles worth approximately ~~$170.0~~$200.0 million to ~~$180.0~~$225.0 million for our leasing operations during ~~2023,~~2024, depending on customer demand. We also expect to make capital expenditures for the purchase of recurring items such as computers, shop tools and equipment and company vehicles of approximately $35.0 million to $40.0 million during ~~2023.~~2024.

~~We are currently under contract to construct a new facility in the St. Louis, Illinois area at an estimated cost of $13.9 million.~~

During the ~~second~~first quarter of ~~2023,~~2024, we paid a cash dividend of ~~$11.4~~$13.9 million. On July 25, 2023, the Company’s Board of Directors declared a three-for-two stock split with respect to both the Company’s Class A and Class B common stock. The stock split will be effected in the form of a stock dividend payable on August 28, 2023, to shareholders of record as of August 7, 2023. Holders of the Company’s common stock will receive an additional one-half share for each share of common stock held as of the record date. Additionally, on ~~July 25, 2023,~~April 23, 2024, our Board of Directors declared a cash dividend of $0.17 per share of Class A and Class B common stock, to be paid on ~~September 22, 2023,~~June 10, 2024, to all shareholders of record as of ~~September 7, 2023, which on a post-stock split basis represents a 21.4% increase compared to the cash dividend we paid in the second quarter of 2023.~~May 9, 2024. The total dividend disbursement is estimated at approximately ~~$13.7~~$13.4 million. We expect to continue paying cash dividends on a quarterly basis. However, there is no assurance as to future dividends because the declaration and payment of such dividends is subject to the business judgment of our Board of Directors and will depend on historic and projected earnings, capital requirements, covenant compliance and financial conditions and such other factors as our Board of Directors deem relevant.

On December ~~2, 2022,~~6, 2023, we announced that our Board of Directors approved a new stock repurchase program authorizing management to repurchase, from time to time, up to an aggregate of $150.0 million of our shares of Class A common stock and/or Class B common stock. In connection with the adoption of the new stock repurchase plan, we terminated the prior stock repurchase plan, which was scheduled to expire on December 31, ~~2022.~~2023. Repurchases, if any, will be made at times and in amounts as we deem appropriate and may be made through open market transactions at prevailing market prices, privately negotiated transactions or by other means in accordance with federal securities laws. The actual timing, number of shares and value of repurchases under the stock repurchase program will be determined by management at its discretion and will depend on a number of factors, including market conditions, stock price and other ~~factors, including those related to the ownership requirements of our dealership agreements with Peterbilt.~~factors. As of ~~June 30, 2023,~~March 31, 2024, we had repurchased ~~$71.4~~$73.2 million of our shares of common stock under the current stock repurchase ~~program.~~program, excluding federal excise tax. The current stock repurchase program expires on December 31, ~~2023,~~2024, and may be suspended or discontinued at any time.

The Inflation Reduction Act of 2022 imposed a nondeductible 1% excise tax on the net value of certain stock repurchases made after December 31, 2022. We have reflected the applicable excise tax in treasury stock as part of the cost basis of the stock repurchased.

We anticipate funding the capital expenditures for the improvement and expansion of existing facilities and recurring expenses through our operating cash flows. We ~~have the ability to~~can fund the construction or purchase of new facilities through our operating cash flows or by financing.

We have no other material commitments for capital expenditures as of ~~June 30, 2023.~~March 31, 2024. However, we will continue to purchase vehicles for our lease and rental operations and authorize capital expenditures for the improvement or expansion of our existing dealership facilities and construction or purchase of new facilities based on market opportunities.

~~Cash and~~The following table summarizes our cash ~~equivalents decreased by $9.2 million during~~flows for the ~~six months ended June 30, 2023 and increased by $68.5 million during the six months ended June 30, 2022. The major components~~periods indicated (in thousands):

Cash flows from operating activities include net income adjusted for non-cash items and the effects of changes in working capital. During the first ~~six months~~quarter of ~~2023,~~2024, operating activities resulted in net cash ~~provided~~used in by operations of ~~$114.0~~$155.1 million. Net cash provided by operating activities primarily consisted of ~~$189.3~~$71.5 million in net income, as well as non-cash adjustments related to depreciation and amortization of ~~$108.6~~$56.8 million, and stock-based compensation of ~~$19.0 million and the benefit for deferred income tax expense of $2.9~~$14.1 million. Cash ~~provided~~used by operating activities included an aggregate of ~~$205.7~~$297.4 million net change in operating assets and liabilities. Included in the net change in operating assets and liabilities were cash inflows of ~~$12.8~~$17.4 million from the increase in accounts payable, which was offset primarily by cash outflows of ~~$15.9~~$215.5 million from the increase in inventories, $49.9 million from the increase in accounts receivable, ~~$174.4 million from the increase in inventories, $5.7 million from the increase in other assets, $14.9~~$17.7 million from the decrease in customer deposits and ~~$7.4~~$26.9 million from the ~~decrease~~increase in accrued ~~liabilities. The majority~~expenses. Most of our commercial vehicle inventory is financed through our floor plan credit agreements.

During the first ~~six months~~quarter of ~~2022,~~2023, operating activities resulted in net cash provided by operations of ~~$58.2~~$92.5 million. Net cash provided by operating activities primarily consisted of ~~$202.7~~$90.8 million in net income, as well as non-cash adjustments related to depreciation and amortization of ~~$95.1~~$53.9 million, deferred income tax provision of $3.2 million and stock-based compensation of ~~$18.0 million and the benefit for deferred income tax expense of $4.1~~$13.1 million. Cash provided by operating activities included an aggregate of ~~$236.9~~$65.2 million net change in operating assets and liabilities. Included in the net change in operating assets and liabilities were ~~cash inflows of $33.3 million from the increase in accounts payable and $18.6 million from the increase in accrued liabilities, which was offset by~~primarily cash outflows of ~~$85.1~~$9.0 million from the increase in accounts receivable, ~~$193.0~~$52.8 million from the increase in ~~inventories, $1.9 million from the increase in other assets, and $8.8~~inventory, $15.9 million from the decrease in customer ~~deposits.~~

During the first ~~six months~~quarter of ~~2023,~~2024, cash used in investing activities was ~~$188.9~~$69.2 million. Cash flows used in investing activities consist primarily of cash used for the acquisition of property and equipment. Acquisition of property and equipment totaled ~~$186.0~~$79.1 million during the first ~~six~~three months of ~~2023~~2024 and consisted primarily of purchases of ~~machine~~machinery and shop equipment, furniture and fixtures, real estate and facilities, improvements to our existing dealership facilities and ~~$138.6~~$52.1 million for purchases of rental and lease vehicles for our rental and leasing operations.

During the first ~~six months~~quarter of ~~2022,~~2023, cash used in investing activities ~~was $94.2~~totaled $95.5 million. ~~Cash flows used in investing activities consisted primarily of cash used for capital expenditures and the purchase of the additional 30% equity interest in RTC Canada.~~ Cash flows used in investing activities consist primarily of cash used for the acquisition of property and equipment. ~~Acquisition of property and equipment~~Capital expenditures totaled ~~$107.2~~$90.4 million during the first ~~six months~~quarter of ~~2022~~2023 and consisted primarily of purchases of ~~machine~~property and ~~shop~~ equipment, ~~furniture and fixtures, real estate and facilities,~~ improvements to our existing dealership facilities and ~~$71.4~~$75.2 million for purchases of rental and lease vehicles for ~~our~~the rental and leasing operations. Additionally, during the first six months of 2022, cash outflows consisted of $15.1 million related to the acquisition of the additional 30% equity interest in RTC Canada. The cash outflows were offset by the cash inflow of $27.5 million related to Cummins, Inc.’s acquisition of a 50% equity interest in Momentum Fuel Technologies in the first quarter of 2022.

Cash flows from financing activities include borrowings and repayments of long-term debt and net proceeds of floor plan notes payable, non-trade. During the first ~~six months~~quarter of ~~2023,~~2024, financing activities resulted in net cash provided by financing activities of ~~$65.7~~$196.5 million, primarily related to ~~cash inflows~~$110.2 million from net draws on floor plan notes payable, non-trade, $698.8 million from borrowings of ~~$9.7~~long-term debt and $9.4 million from the issuance of shares related to equity compensation ~~plans, $191.0 million from net draws on floor plan notes payable, non-trade and borrowings of $653.4 million of long-term debt.~~plans. These cash inflows were offset by ~~$694.1~~cash outflows of $592.9 million used for principal repayments of long-term debt and ~~capital~~finance lease obligations, ~~$7.0~~$5.6 million used for repurchases of common stock, $9.5 million for taxes paid related to net share settlement of equity awards ~~$63.9 million used for repurchases of common stock~~ and ~~$23.4~~$13.9 million used for payment of cash dividends. ~~The borrowings of long-term debt were primarily related to purchasing units for the rental and leasing operations.~~

During the first ~~six months~~quarter of ~~2022,~~2023, financingactivities ~~resulted~~provided $28.3 million in net cash ~~used in financing of $104.6 million,~~flow. Cash outflows were primarily related to cash inflows of $8.1 million from the issuance of shares related to equity compensation plans, $190.5 million from net draws on floor plan notes payable, non-trade and borrowings of $571.3 million of long-term debt. These cash inflows were offset by $582.3$275.3 million used for principal repayments of long-term debt and ~~capital~~finance lease obligations, ~~$8.6 million for taxes related to net share settlement of equity awards, $52.8~~$24.0 million used for ~~repurchases~~the repurchase of our common stock and ~~$21.6~~$12.1 million used for the payment of cash dividends. ~~The~~These cash outflows were offset by cash inflows related to borrowings of $257.7 million of long-term debt ~~were primarily related to purchasing units~~and $82.6 million used for ~~the rental and leasing operations.~~net draws on floor plan (non-trade).

On September 14, 2021, we entered into the WF Credit Agreement with the lenders signatory thereto (the “WF Lenders”) and Wells Fargo Bank, National Association (“WF”), as Administrative Agent (in such capacity, the “WF Agent”) ~~which was amended effective November 30, 2022.~~. Pursuant to the terms of the WF Credit Agreement (as amended), the WF Lenders have agreed to make up to $175.0 million of revolving credit loans for certain of our capital expenditures, including commercial vehicle purchases for our Idealease leasing and rental fleet, and general working capital needs. We expect to use the revolving credit loans available under the WF Credit Agreement primarily for the purpose of purchasing commercial vehicles for our Idealease lease and rental fleet. We may borrow, repay and reborrow amounts pursuant to the WF Credit Agreement from time to time until the maturity date. Borrowings under the WF Credit Agreement bear interest per annum, payable on each interest payment date, as defined in the WF Credit Agreement, at (A) the daily ~~Simple, secured overnight financing rate (“SOFR”)~~SOFR plus (i) 1.25% or (ii) 1.5%, depending on our consolidated leverage ratio or (B) on or after the term SOFR transition date, the term SOFR plus (i) 1.25% or (ii) 1.5%, depending on our consolidated leverage ratio. The WF Credit Agreement expires on September 14, ~~2024,~~2026, although, upon the occurrence and during the continuance of an event of default, the WF Agent has the right to, or upon the request of the required lenders must, terminate the commitments and declare all outstanding principal and interest due and payable. We may terminate the commitments at any time. On ~~June 30, 2023,~~March 31, 2024, we had approximately ~~$41.3~~$174.7 million outstanding under the WF Credit Agreement.

On ~~October~~November 1, ~~2021, we~~2023, the Company entered into that certain Amended and Restated Inventory Financing and Purchase Money Security Agreement with PACCAR Leasing Company (“PLC”), a division of PACCAR Financial Corp. (the “PLC Agreement”). Pursuant to the terms of the PLC Agreement, PLC agreed to make up to $300.0 million of revolving credit loans to finance certain of our capital expenditures, including commercial vehicle purchases and other equipment to be leased or rented through our PacLease franchises. On April 9, 2024, the PLC agreement was amended to increase the total loan commitment to $375.0 million. We may borrow, repay and reborrow amounts pursuant to the PLC Agreement from time to time until the maturity date, provided, however, that the outstanding principal amount on any date shall not exceed the borrowing base. In addition, we must maintain a minimum balance of $190.0 million. Advances under the PLC Agreement bear interest per annum, payable on the fifth day of the following month, at our option, at either (A) the prime rate, minus ~~1.55%~~1.95%, provided that the floating rate of interest is subject to a floor of 0%, or (B) a fixed rate, to be determined between us and PLC in each instance of borrowing at a fixed rate. The PLC Agreement expires on ~~October~~December 1, 2025, although either party has the right to terminate the PLC Agreement at any time upon 180 days written notice. ~~If we terminate the PLC Agreement prior to October 1, 2025, then all payments will be deemed to be voluntary prepayments subject to a potential prepayment premium.~~ On ~~June 30, 2023,~~March 31, 2024, we had approximately ~~$150.0~~$300.0 million outstanding under the PLC Agreement.

Most of our commercial vehicle purchases are made on terms requiring payment to the manufacturer within 15 to 60 days or less from the date the commercial vehicles are invoiced from the factory. Navistar Financial Corporation and Peterbilt offer trade terms that provide an interest-free inventory stocking period for certain new commercial vehicles. This interest-free period is generally 15 to 60 days. If the commercial vehicle is not sold within the interest-free period, we ~~then~~ finance the commercial vehicle under the Floor Plan Credit Agreement. On September 14, 2021, we entered into the Floor Plan Credit Agreement with BMO Harris and the lenders signatory thereto. The Floor Plan Credit Agreement includes an aggregate loan commitment of $1.0 billion. Prior to June 1, 2023, borrowings under the Floor Plan Credit Agreement bore interest at an annual rate equal to (A) the greater of (i) zero and (ii) one month ~~London Interbank Offered Rate (“LIBOR”),~~LIBOR, determined on the last day of the prior month, plus (B) 1.10% and were payable monthly. On May 31, 2023, we entered into the First Amendment to the Floor Plan Credit Agreement that changed the benchmark interest rate to Term SOFR, as defined byin the ~~First Amendment.~~amendment. Effective June 1, 2023, borrowings under the Floor Plan Credit Agreement ~~now~~ bear interest per annum, payable monthly, at (A) the greater of (i) zero and (ii) Term SOFR, plus (B) 1.20%. Borrowings under the Floor Plan Credit Agreement for the purchase of used inventory are limited to $150.0 million and loans for working capital purposes are limited to $200.0 million. The Floor Plan Credit Agreement expires September 14, 2026, although BMO Harris has the right to terminate at any time upon 360 days written notice and we may terminate at any time, subject to specified limited exceptions. On ~~June 30, 2023,~~March 31, 2024, we had approximately ~~$940.4 million~~$1.0 billion outstanding under the Floor Plan Credit Agreement. The average daily outstanding borrowings under the Floor Plan Credit Agreement were ~~$824.2~~$958.3 million during the ~~six~~first three months ended ~~June 30, 2023.~~March 31, 2024. We utilize our excess cash on hand to pay down our outstanding borrowings under the Floor Plan Credit Agreement, and the resulting interest earned is recognized as an offset to our gross interest expense under the Floor Plan Credit Agreement.

On May 31, 2022, RTC Canada entered into that certain BMO Revolving Lease and Rental Credit Agreement (the “RTC Canada Revolving Credit Agreement”) with BMO. Pursuant to the terms of the RTC Canada Revolving Credit Agreement, BMO agreed to make up to $120.0 million CAD of revolving credit loans to finance certain of RTC Canada’s capital expenditures, including commercial vehicle purchases and other equipment to be leased or rented through RTC Canada’s Idealease franchise, with an additional $20.0 million CAD available upon the request of RTC Canada and consent of BMO. Advances under the RTC Canada Revolving Credit Agreement bear interest per annum, payable on the first business day of each calendar month, at the ~~Canadian Offered Dollar Rate (“CDOR”),~~CDOR, plus 1.35%. The RTC Canada Revolving Credit Agreement expires September 14, 2026. On ~~June 30, 2023,~~March 31, 2024, we had approximately ~~$67.0~~$67.4 million CAD outstanding under the RTC Canada Revolving Credit Agreement.

On July 15, 2022, RTC Canada entered into ~~that certain Amended and Restated BMO Wholesale Financing and Security Agreement (the “RTC~~the RTC Canada Floor Plan ~~Agreement”)~~Agreement with ~~Bank of Montreal (“BMO”).~~BMO. Pursuant to the terms of the Agreement, BMO agreed to make up to $116.7 million CAD of revolving credit loans to finance RTC Canada’s purchase of new and used vehicle inventory. Loans to purchase used vehicle inventory are limited to twenty percent (20%) of the credit limit available at such time. RTC Canada may borrow, repay and reborrow loans from time to time until the maturity date, provided, however, that the outstanding principal amount on any date shall not exceed the credit limits set forth above with respect to new and used vehicles. Prior to June 1, 2023, advances under the RTC Canada Floor Plan Agreement bore interest per annum, payable on the first business day of each calendar month, at CDOR, plus 0.90% and in the case of an advance required to be made in USD dollars, at LIBOR, plus 1.10%. On June 1, 2023, RTC Canada entered into the First Amendment to the RTC Canada Floor Plan Agreement that changed the interest rate in the case of an advance required to be made in USD dollars to Term SOFR, as defined byin the ~~First Amendment.~~amendment. Effective June 1, 2023, advances required to be made in USD dollars under the RTC Canada Floor Plan Agreement ~~will now~~ bear interest per annum, payable monthly, at Term SOFR, plus 1.20%. The RTC Canada Floor Plan Agreement expires September 14, 2026. On ~~June 30, 2023,~~March 31, 2024, we had approximately ~~$71.5~~$72.5 million CAD outstanding under the RTC Canada Floor Plan Agreement.

On ~~June 30, 2023,~~March 31, 2024, our backlog of commercial vehicle orders was approximately ~~$4,041.6~~$2,047.1 million, as compared to a backlog of commercial vehicle orders of approximately ~~$3,682.9~~$4,209.9 million on ~~June 30, 2022. This increase~~March 31, 2023. The decrease in our backlog is primarily ~~due to strong~~reflects the decreased demand for new ~~commercial vehicles and~~Class 8 trucks resulting from production ~~constraints experienced~~catching up to pent-up demand caused by limited production over the ~~manufacturers we represent.~~last few years. Our backlog is determined quarterly by multiplying the number of new commercial vehicles for each ~~particular~~ type of commercial vehicle ordered by a customer at our Rush Truck Centers by the recent average selling price for that type of commercial vehicle. We include only confirmed orders in our backlog. However, such orders are subject to cancellation. In the event of order cancellation, we have no contractual right to the total revenues reflected in our backlog. The delivery time for a custom-ordered commercial vehicle varies depending on the truck specifications and demand for the ~~particular~~ model ordered. We sell ~~the majority~~most of our new heavy-duty commercial vehicles by customer special order, and we sell the majority of our medium- and light-duty commercial vehicles out of inventory. Orders from ~~a number~~several of our major fleet customers are included in our backlog as of ~~June 30, 2023,~~March 31, 2024, and we expect to fill ~~the majority~~most of our backlog orders during ~~2023 and the first half of~~ 2024, assuming that the manufacturers we represent can meet their current production schedule. Our current backlog continues to be much higher than normal. Given the potential for industry headwinds in the coming months caused by lower spot rates and higher interest rates, which could negatively impact industry demand for new commercial vehicles moving forward, we believe that the longer it takes to fill our backlog, the greater the risk that a significant amount of commercial vehicle orders currently reflected in our backlog could be cancelled.

Our Truck Segment is moderately seasonal. Seasonal effects on new commercial vehicle sales related to the seasonal purchasing patterns of any single customer type are mitigated by the diverse geographic locations of our dealerships and our diverse customer base, including regional and national fleets, local and state governments, corporations, and owner-operators. However, Aftermarket Products and Services operations historically have experienced higher sales volumes in the second and third quarters.

Our business is dependent on a number of factors including general economic conditions, fuel prices, interest rate fluctuations, credit availability, environmental and other government regulations and customer business cycles. Unit sales of new commercial vehicles have historically been subject to substantial cyclical variation based on these general economic conditions. According to data published by A.C.T. Research, in the last ten years, total U.S. retail sales of new Class 8 commercial vehicles have ranged from a low of approximately 187,600 in 2013, to a high of approximately 281,440 in 2019. Through geographic expansion, concentration on higher margin Aftermarket Products and Services and diversification of our customer base, we have attempted to reduce the negative impact of adverse general economic conditions or cyclical trends affecting the Class 8 commercial vehicle industry on our earnings.

We are subject to federal, state, and local environmental laws and regulations governing the following: discharges into the air and water; the operation and removal of underground and aboveground storage tanks; the use, handling, storage and disposal of hazardous substances, petroleum and other materials; and the investigation and remediation of environmental impacts. As with commercial vehicle dealerships generally, and vehicle service, parts and collision center operations in particular, our business involves the generation, use, storage, handling and contracting for recycling or disposal of hazardous materials or wastes and other environmentally sensitive materials. We have incurred, and will continue to incur, capital and operating expenditures and other costs in complying with such laws and regulations.

Our operations involving the use, handling, storage, and disposal of hazardous and nonhazardous materials are subject to the requirements of the federal Resource Conservation and Recovery Act, or RCRA, and comparable state statutes. Pursuant to these laws, federal and state environmental agencies have established approved methods for handling, storage, treatment, transportation, and disposal of regulated substances with which we must comply. Our business also involves the operation and use of aboveground and underground storage tanks. These storage tanks are subject to periodic testing, containment, upgrading and removal under RCRA and comparable state statutes. Furthermore, investigation or remediation may be necessary in the event of leaks or other discharges from current or former underground or aboveground storage tanks.

We may also have liability in connection with materials that were sent to third‑party recycling, treatment, or disposal facilities under the federal Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA, and comparable state statutes. These statutes impose liability for investigation and remediation of environmental impacts without regard to fault or the legality of the conduct that contributed to the impacts. Responsible parties under these statutes may include the owner or operator of the site where impacts occurred and companies that disposed, or arranged for the disposal, of the hazardous substances released at these sites. These responsible parties also may be liable for damages to natural resources. In addition, it is not uncommon for neighboring landowners and other third parties to file claims for personal injury and property damage allegedly caused by the release of hazardous substances or other materials into the environment.

The federal Clean Water Act and comparable state statutes require containment of potential discharges of oil or hazardous substances and require preparation of spill contingency plans. Water quality protection programs govern certain discharges from some of our operations. Similarly, the federal Clean Air Act and comparable state statutes regulate emissions of various air emissions through permitting programs and the imposition of standards and other requirements.

The Environmental Protection Agency (“EPA”) and the National Highway Traffic Safety Administration (“NHTSA”), on behalf of the U.S. Department of Transportation, issued rules associated with reducing greenhouse gas (“GHG”) emissions and improving the fuel efficiency of medium and heavy-duty trucks and buses for current model years through 2027. In March 2024, the EPA issued additional rules associated with reducing GHG emissions from medium and heavy-duty trucks and buses for model years 2027 through 2032. In addition, in August 2021, the President of the United States issued an executive order intended to increase fuel efficiency, further reduce GHG emissions and speed up the development of “zero-emission” vehicles. The executive order calls for the EPA and the Secretary of Transportation to adopt new rules and regulations for commercial vehicles starting as early as model year 2027. Similarly, in June 2020, ~~the California Air Resources Board (“CARB”)~~CARB adopted a final rule that is intended to phase out the sale of ~~diesel-powered~~internal combustion engine commercial vehicles over time by requiring a certain percentage of each manufacturer’s commercial vehicles sold within the state to be “zero-emission vehicles,” or “near-zero emission vehicles,” starting in model year 2024. In July 2023, CARB and various manufacturers of heavy-duty commercial vehicles and engines, including PACCAR, Navistar, Ford, Hino, Isuzu and Cummins, entered into the Clean Truck Partnership, whereby the manufacturers agreed to comply with CARB’s emission requirements where applicable, regardless of whether any entity challenges CARB’s rule-making authority, and CARB agreed to work with manufacturers to provide reasonable lead time to meet CARB’s requirements and before imposing new regulations. In addition, CARB agreed to align its nitrogen oxide emissions rules with the EPA’s, which go into effect starting in model year 2027, and modify certain of its 2024 nitrogen oxide emissions regulations ~~for~~currently in effect, with respect to which manufacturers ~~will~~may provide certain offsets ~~as needed~~ to meet ~~California’s~~CARB’s emission ~~targets.~~target in exchange for the ability to sell legacy engines. Since July 2020, a group of ~~eighteen~~seventeen U.S. states and the District of Columbia have entered into a joint memorandum of understanding that adopts at least a portion of CARB’s emissions regulations and commits each of them to work together to advance and accelerate the market for electric Class 3 through 8 commercial vehicles. Six of the states are states where we operate new commercial vehicle dealerships: California, Colorado, Nevada, New Mexico, North Carolina, and Virginia. The signatories to the memorandum all agreed on a goal of ensuring that 100% of new Class 3 through 8 commercial vehicles are zero emission by 2050, with an interim target of 30% zero emission vehicles by 2030. Attaining these goals would likely require the adoption of new laws and regulations and we cannot predict at this time whether such laws and regulations would have an adverse impact on our business. Additional regulations, or CARB’s enforcement of its existing regulations, could result in increased compliance costs, additional operating restrictions, or changes in demand for our products and services, which could have a material adverse effect on our business, financial condition and results of operations.

We do not believe that we currently have any material environmental liabilities or that compliance with environmental laws and regulations will have a material adverse effect on our results of operations, financial condition, or cash flows. However, soil and groundwater impacts are known to exist at some of our dealerships. Further, environmental laws and regulations are complex and subject to change. In addition, in connection with acquisitions, it is possible that we will assume or become subject to new or unforeseen environmental costs or liabilities, some of which may be material. In connection with our dispositions, or prior dispositions made by companies we acquire, we may retain exposure for environmental costs and liabilities, some of which may be material. Compliance with current or amended, or new or more stringent, laws or regulations, stricter interpretations of existing laws or the future discovery of environmental conditions could require additional expenditures by us, which could materially adversely affect our results of operations, financial condition, or cash flows. In addition, such laws could affect demand for the products that we sell.

Market risk represents the risk of loss that may impact the financial position, results of operations, or cash flows of the Company due to adverse changes in financial market prices, including interest rate risk, and other relevant market rate or price risks.

We are exposed to market risk through interest rates related to our floor plan financing agreements, the WF Credit Agreement, the PLC Agreement and discount rates related to finance sales. Our floor plan debt is based on SOFR and CDOR, the WF Credit Agreement is based on SOFR, the RTC Canada Revolving Agreement is based on CDOR and the PLC Agreement is based on the prime rate. As of ~~June 30, 2023,~~March 31, 2024, we had floor plan borrowings and borrowings from WF, BMO and PLC in the amount of ~~$1,370.7~~$1,773.3 million. Assuming an increase or decrease in SOFR, CDOR or the prime rate of 100 basis points, annual interest expense could correspondingly increase or decrease by approximately ~~$13.7~~$17.7 million.

The Company, under the supervision and with the participation of management, including the Company’s principal executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the principal executive officer and chief financial officer concluded that our disclosure controls and procedures were effective as of March 31, ~~2023~~2024, to ensure that information required to be disclosed in the reports filed or submitted under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and (ii) is accumulated and communicated to Company management, including the principal executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

There has been no change in our internal control over financial reporting that occurred during the three months ended ~~June 30, 2023~~March 31, 2024, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

From time to time, we are involved in litigation arising out of our operations in the ordinary course of business. We maintain liability insurance, through self-insurance and third-party excess insurance, including product liability coverage, in amounts deemed adequate by management. However, an uninsured or partially insured claim, or claim for which indemnification is not available, could have a material adverse effect on our financial condition or results of operations. As of ~~June 30, 2023,~~March 31, 2024, we believe that there are no pending claims or litigation, individually or in the aggregate, that are reasonably likely to have a material adverse effect on our financial position or results of operations. However, due to the inherent uncertainty of litigation, there can be no assurance that the resolution of any particular claim or proceeding would not have a material adverse effect on our financial condition or results of operations for the fiscal period in which such resolution occurred.

While we attempt to identify, manage and mitigate risks and uncertainties associated with our business to the extent practical under the circumstances, some level of risk and uncertainty will always be present. Item 1A, Part I of our ~~2022~~2023 Annual Report on Form 10-K (the ~~“2022~~“2023 Annual Report”) describes some of the risks and uncertainties associated with our business that have the potential to materially affect our business, financial condition or results of operations.

There has been no material change in our risk factors disclosed in our ~~2022~~2023 Annual Report.

The Company did not make any unregistered sales of equity securities during the ~~second~~first quarter of ~~2023.~~2024.

A summary of the Company’s stock repurchase activity for the ~~second~~first quarter of ~~2023~~2024 is as follows:

During the three months ended ~~June 30, 2023,~~ March 31, 2024, none of the Company's directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934) adopted, terminated or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K).

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

PART I. FINANCIAL INFORMATION			Page

	Item 11.	Financial Statements

		Consolidated Balance Sheets - ~~June 30, 2023~~March 31, 2024 (unaudited) and December 31, ~~2022~~2023	3

		Consolidated Statements of Income - For the Three Months Ended March 31, 2024 and 2023 (unaudited)	4

		Consolidated Statements of Comprehensive Income - For the Three Months Ended March 31, 2024 and 2023 (unaudited)	5

		Consolidated Statements of Shareholders’ Equity – For the Three Months Ended March 31, 2024 and 2023 (unaudited)	6

		Consolidated Statements of Cash Flows - For the Three Months Ended March 31, 2024 and 2023 (unaudited)	7

		Notes to Consolidated Financial Statements ~~of Income - For the Three and Six Months Ended June 30, 2023 and 2022~~ (unaudited)	48

	Item 2.	~~Consolidated Statements~~Management’s Discussion and Analysis of ~~Comprehensive Income - For the Three~~Financial Condition and ~~Six Months Ended June 30, 2023 and 2022 (unaudited)~~Results of Operations	513

	Item 3.	~~Consolidated Statements of Shareholders’ Equity – For the Three~~Quantitative and ~~Six Months Ended June 30, 2023 and 2022 (unaudited)~~Qualitative Disclosures About Market Risk	623

	Item 4.	~~Consolidated Statements of Cash Flows - For the Six Months Ended June 30, 2023~~Controls and ~~2022 (unaudited)~~Procedures	824

				~~Notes to Consolidated Financial Statements (unaudited)~~	9

	~~Item 2.~~	~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~	15

	~~Item 3.~~	~~Quantitative and Qualitative Disclosures About Market Risk~~	28

	~~Item 4~~	~~Controls and Procedures~~	28

PART II. OTHER INFORMATION

	Item 1.	Legal Proceedings	2824

	Item 1A.	Risk Factors	2824

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2824

	Item 3.	Defaults Upon Senior Securities	2925

	Item 4.	Mine Safety Disclosures	2925

	Item 5.	Other Information	2925

	Item 6.	Exhibits	2925

SIGNATURES			3126

	Truck Segment		All Other			Total		Truck Segment		All Other			Totals
As of and for the three months ended June 30, 2023

As of and for the three months ended March 31, 2024
Revenues from external customers								$	1,867,968	$	4,031		$	1,871,999
Segment operating income (loss)									110,708		(98	)		110,610
Segment income (loss) before taxes									92,912		(98	)		92,814
Segment assets									4,570,652		58,354			4,629,006

As of and for the three months ended March 31, 2023
Revenues from external customers	$	1,999,028	$	4,024		$	2,003,052	$	1,907,941	$	3,826		$	1,911,767
Segment operating income		142,869		(10	)		142,859		127,563		213			127,776
Segment income before taxes		130,535		(10	)		130,525		118,927		213			119,140
Segment assets		4,070,544		55,777			4,126,321		3,913,928		55,624			3,969,552

For the six months ended June 30, 2023
Revenues from external customers	$	3,906,969	$	7,850		$	3,914,819
Segment operating income		270,432		203			270,635
Segment income before taxes		249,462		203			249,665

As of and for the three months ended June 30, 2022
Revenues from external customers	$	1,786,927	$	4,314		$	1,791,241
Segment operating income		134,506		517			135,023
Segment income before taxes		139,765		423			140,188
Segment assets		3,615,745		53,624			3,669,369

For the six months ended June 30, 2022
Revenues from external customers	$	3,345,979	$	8,464		$	3,354,443
Segment operating income		241,826		696			242,522
Segment income before taxes		260,023		509			260,532

	Three Months Ended				Six Months Ended				Three Months Ended March 31,
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022		2024		2023
Commercial vehicle sales revenue	$	1,250,794	$	1,098,255	$	2,412,519	$	2,033,974	$	1,123,319	$	1,161,725
Parts revenue		379,444		361,562		764,898		692,304		373,426		384,418
Commercial vehicle repair service revenue		271,685		236,736		534,458		449,257		275,770		263,808
Finance revenue		2,978		4,578		6,500		9,067		2,074		3,508
Insurance revenue		3,212		3,177		6,260		6,213		3,320		3,063
Other revenue		6,390		6,395		14,969		11,755		6,169		8,579
Total	$	1,914,503	$	1,710,703	$	3,739,604	$	3,202,570	$	1,784,078	$	1,825,101

	Balance December 31, 2022		Provision for the Six Months Ended June 30, 2023			Write offs Against Allowance, net of Recoveries			Balance June 30, 2023		Balance December 31, 2023		Provision For the Three Months Ended March 31, 2024		Write offs Against Allowance, net of Recoveries			Balance March 31, 2024

Commercial vehicle receivables	$	160	$	(45	)	$	−		$	115	$	102	$	−	$	57		$	159
Manufacturers’ receivables		573		997			(766	)		804		964		667		(644	)		987
Leasing, parts and service receivables		1,589		3,835			(1,488	)		3,936		1,660		1,095		(864	)		1,891
Other receivables		−		−			24			24		1,079		5		(29	)		1,055
Total	$	2,322	$	4,787		$	(2,230	)	$	4,879	$	3,805	$	1,767	$	(1,480	)	$	4,092

Cash	$	4,310
Accounts receivable		19,072
Inventory		56,255
Property and equipment, including real estate		80,196
Floor plan notes payable		(30,501	)
Trade payables		(19,978	)
Customer deposits		(1,980	)
Accrued liabilities		(7,875	)
Notes payable		(69,545	)
Goodwill		44,174
Franchise rights		3,906
Other		3,422
Equity investment in RTC Canada		(37,309	)
Noncontrolling interest		(17,828	)
Gain on equity method investment		(6,958	)

Total	$	19,361

	Three Months Ended					Six Months Ended					Three Months Ended March 31,
	June 30, 2023		June 30, 2022			June 30, 2023		June 30, 2022			2024			2023

Net income	$	98,524	$	110,673		$	189,314	$	203,126		$	71,489		$	90,790
Other comprehensive income (loss), net of tax:
Foreign currency translation		1,689		(567	)		1,921		(122	)		(1,891	)		232
Reclassification of currency translation related to equity method accounting		–		(601	)		–		(601	)
Other comprehensive income (loss) attributable to Rush Enterprises, Inc.		1,689		(1,168	)		1,921		(723	)		(1,891	)		232
Comprehensive income	$	100,213	$	109,505		$	191,235	$	202,403		$	69,598		$	91,022
Less: Comprehensive income attributable to noncontrolling interest		249		446			584		446
Less: Comprehensive income (loss) attributable to noncontrolling interest												(119	)		335
Comprehensive income attributable to Rush Enterprises, Inc.	$	99,964	$	109,059		$	190,651	$	201,957		$	69,717		$	90,687

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Numerator:
Numerator for basic and diluted earnings per share – Net income available to common shareholders	$	98,275	$	110,227	$	188,730	$	202,680
Denominator:
Denominator for basic earnings per share – weighted average shares outstanding		54,460		55,640		54,617		55,788
Effect of dilutive securities – Employee stock options and restricted stock awards		1,644		1,670		1,717		1,822
Denominator for diluted earnings per share – adjusted weighted average shares outstanding and assumed conversions		56,104		57,310		56,334		57,610
Basic earnings per common share	$	1.80	$	1.98	$	3.46	$	3.63
Diluted earnings per common share and common share equivalents	$	1.75	$	1.92	$	3.35	$	3.52

Balance as of December 31, 2022	$	(4,130	)
Foreign currency translation adjustment		232
Balance as of March 31, 2023	$	(3,898	)
Foreign currency translation adjustment		1,689
Balance as of June 30, 2023	$	(2,209	)

Balance as of December 31, 2023	$	(2,163	)
Foreign currency translation adjustment		(1,891	)
Balance as of March 31, 2024	$	(4,054	)

	Three Months Ended March 31,
	2024			2023
Net cash provided by (used in):
Operating activities	$	(155,053	)	$	92,466
Investing activities		(69,188	)		(95,514	)
Financing activities		196,451			28,294
Net (decrease) increase in cash	$	(27,790	)	$	25,246

Period	Total Number of Shares Purchased (1)(2)(3)		Average Price Paid Per Share (1)			Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)		Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (3)
January 1 – January 31, 2024		127,974	$	43.93	(4)		127,974	$	76,795,178
February 1 – February 29, 2024		44		44.71	(5)		44		76,793,209
March 1 – March 31, 2024		‒		‒			‒		76,793,209
Total		128,018					128,018

Period	Total Number of Shares Purchased (1)(2)(3)		Average Price Paid Per Share (1)			Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)		Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (3)
April 1 – April 30, 2023		196,525	$	54.62	(4)		196,525	$	108,179,816
May 1 – May 31, 2023		306,752		53.00	(5)		306,752		91,912,675
June 1 – June 30, 2023		218,704		60.77	(6)		218,704		78,614,929
Total		721,981					721,981

(5)	Represents ~~273,753~~44 shares of Class A Common Stock at an average price paid per share of ~~$52.43 and 32,999 shares of Class B Common Stock at an average price paid per share of $57.77.~~
~~(6)~~	~~Represents 162,696 shares of Class A Common Stock at an average price paid per share of $59.09 and 56,008 shares of Class B Common Stock at an average price paid per share of $65.67.~~$44.71.

Exhibit Number		*Exhibit Title*
3.1		Restated Articles of Incorporation of Rush Enterprises, Inc. (incorporated herein by reference to Exhibit 3.1 of the Company’s Quarterly Report on Form 10-Q (File No. 000-20797) for the quarter ended June 30, 2008)

3.2*3.2		Certificate of Amendment to the Restated Articles of Incorporation of Rush Enterprises, Inc. (incorporated herein by reference to Exhibit 3.2 of the Company’s Quarterly Report on Form 10-Q (File No. 000-20797) for the quarter ended June 30, 2023)

3.3		Rush Enterprises, Inc. Amended and Restated Bylaws (incorporated herein by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K (File No. 000-20797) filed May 21, 2013)

3.4		First Amendment to Amended and Restated Bylaws of Rush Enterprises, Inc. (incorporated herein by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K (File No. 000-20797) filed May 24, 2021)


10.1		First Amendment to ~~Fifth~~Second Amended and Restated ~~Credit~~Inventory Financing and Purchase Money Security Agreement, dated as of ~~May 31, 2023,~~April 9, 2024 by and ~~among the~~between Rush Truck Leasing, Inc. and PACCAR Leasing Company ~~and certain of its subsidiaries, the Lenders signatory thereto and BMO Harris Bank N.A., as administrative agent and collateral agent for the Lenders~~ (incorporated ~~herein~~ by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K (File No. 000-20797) filed ~~June 6, 2023)~~April 15, 2024)

10.2		~~First Amendment to First~~Second Amended and Restated ~~BMO Wholesale Financing and Security Agreement,~~Promissory Note dated ~~as of May 31, 2023, by and among RTC-Canada and BMO~~April 9, 2024 (incorporated ~~herein~~ by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K (File No. 000-20797) filed ~~June 6, 2023)~~April 15, 2024)
~~10.3+~~		Rush Enterprises, Inc. Amended and Restated 2007 Long-Term Incentive Plan (incorporated herein by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K (File No. 000-20797) filed May 22, 2023)
~~10.4+~~		Rush Enterprises, Inc. Amended and Restated 2004 Employee Stock Purchase Plan (incorporated herein by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K (File No. 000-20797) filed May 22, 2023)
31.1*		Certification of CEO pursuant to Rules 13a-14(a) and 15d-14(a) adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of CFO pursuant to Rules 13a-14(a) and 15d-14(a) adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**		Certification of CEO pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**		Certification of CFO pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		XBRL Instance Document – The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the inline XBRL document

101.SCH*		Inline XBRL Taxonomy Extension Schema Document.

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (embedded within the Inline XBRL and contained in Exhibit 101)

	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended March 31,
	2023			2022			2023			2022			2024			2023
Revenue
New and used commercial vehicle sales		62.5	%		61.3	%		61.6	%		60.6	%		60.0	%		60.8	%
Aftermarket products and services sales		32.5			33.4			33.2			34.0			34.7			33.9
Lease and rental sales		4.4			4.5			4.5			4.5			4.7			4.5
Finance and insurance		0.3			0.4			0.3			0.5			0.3			0.3
Other		0.3			0.4			0.4			0.4			0.3			0.5
Total revenues		100.0			100.0			100.0			100.0			100.0			100.0
Cost of products sold		79.3			79.1			79.2			78.5			79.2			79.1
Gross profit	20.7			20.9			20.8				21.5		20.8			20.9
Selling, general and administrative		12.8			12.6			13.1			13.4			14.1			13.4
Depreciation and amortization		0.8			0.8			0.8			0.8			0.8			0.8
Gain (loss) on sale of assets		0.0			0.0			0.0			0.0
Gain on sale of assets														0.0			0.0
Operating income		7.1			7.5			6.9			7.3			5.9			6.7
Other income		0.0			0.5			0.0			0.7			0.0			0.1
Interest (income) expense, net		0.6			0.2			0.6			0.2
Interest expense, net														1.0			0.6
Income before income taxes		6.5			7.8			6.3			7.8			4.9			6.2
Provision for income taxes		1.6			1.7			1.5			1.7			1.1			1.5
Net income		4.9			6.1			4.8			6.1			3.8			4.7
Less: Net income attributable to noncontrolling interest		0.0			0.0			0.0			0.0
Net income attributable to noncontrolling interest														0.0			0.0
Net income attributable to Rush Enterprises, Inc.		4.9	%		6.1	%		4.8	%		6.1	%		3.8	%		4.7	%

																			Three Months Ended
	Three Months Ended June 30,									Six Months Ended June 30,									March 31,
	2023			2022			% Change			2023			2022			% Change			2024			2023			% Change
Vehicle unit sales:
New heavy-duty vehicles		4,300			4,168			3.2	%		8,665			7,696			12.6	%		3,494			4,365			-20.0
New medium-duty vehicles		3,477			2,815			23.5	%		6,513			4,956			31.4	%		3,331			3,038			9.6
New light-duty vehicles		452			408			10.8	%		956			889			7.5	%		456			504			-9.5
Total new vehicle unit sales		8,229			7,391			11.3	%		16,134			13,541			19.1	%		7,281			7,907			-7.9
Used vehicles		1,869			1,629			14.7	%		3,553			4,024			-11.7	%		1,818			1,684			8.0
Vehicle revenue:
Vehicle revenues:
New heavy-duty vehicles	$	773.9		$	691.2			11.9	%	$	1,510.6		$	1,237.4			22.1	%	$	666.3		$	736.7			-9.6
New medium-duty vehicles		332.8			240.3			38.5	%		619.7			418.3			48.1	%		333.6			286.9			16.3
New light-duty vehicles		26.9			20.2			33.7	%		54.9			44.0			25.0	%		27.5			28.0			-1.9
Total new vehicle revenue	$	1,133.6		$	951.7			19.1	%	$	2,185.2		$	1,699.7			28.6	%	$	1,027.4		$	1,051.6			-2.3
Used vehicle revenue	$	107.7		$	142.5			-24.4	%	$	210.4		$	328.1			-35.9	%	$	88.0		$	102.7			-14.3
Other vehicle revenue⁽¹⁾	$	9.5		$	4.1			130.0	%	$	16.9		$	6.2			173.4	%
Dealership absorption ratio:		139.7	%		136.4	%		2.4	%		138.6	%		136.8	%		1.3	%
Other vehicle revenues:⁽¹⁾																			$	7.9		$	7.4			6.8
Absorption ratio:																				130.1	%		136.5	%		-4.7

	RUSH ENTERPRISES, INC.




~~Date: August 9, 2023~~	~~By:~~	~~/s/~~ ~~/S/ W.M. “RUSTY” RUSH~~
		~~W.M. “Rusty” Rush~~
		~~President, Chief Executive Officer and~~
		~~Chairman of the Board~~
		~~(Principal Executive Officer)~~

Date: May 10, 2024	By:	/S/ W.M. “RUSTY” RUSH
		W.M. “Rusty” Rush
		President, Chief Executive Officer and
		Chairman of the Board
		(Principal Executive Officer)


Date: ~~August 9, 2023~~ May 10, 2024	By:	/S/ STEVEN L. KELLER
		Steven L. Keller
		Chief Financial Officer and Treasurer
		(Principal Financial and Accounting Officer)