EXHIBIT 99.1
Rush Enterprises, Inc. Reports Second Quarter Results
SAN ANTONIO, July 18, 2007 (PRIME NEWSWIRE) -- Rush Enterprises, Inc. (Nasdaq:RUSHA) (Nasdaq:RUSHB), which operates the largest network of heavy-duty and medium-duty truck dealerships in North America and a John Deere construction equipment dealership in Houston, Texas, today announced results for the second quarter ended June 30, 2007.
In the second quarter, the Company's gross revenues totaled $519.4 million, an 8.7% decrease from gross revenues of $569.2 million reported for the second quarter ended June 30, 2006. Net income for the quarter was $13.0 million, or $0.51 per diluted share, compared with net income of $14.9 million, or $0.59 per diluted share, in the quarter ended June 30, 2006.
The Company's truck segment recorded revenues of $488.0 million in the second quarter of 2007, compared to $543.9 million in the second quarter of 2006. The Company delivered 1,869 new heavy-duty trucks, 1,324 new medium-duty trucks and 984 used trucks during the second quarter of 2007, compared to 2,695 new heavy-duty trucks, 1,185 new medium-duty trucks and 954 used trucks during the second quarter of 2006. Parts, service and body shop sales increased to $112.0 million in the second quarter of 2007 from $104.8 million in the second quarter of 2006.
The Company's construction equipment segment recorded revenues of $26.3 million in the second quarter of 2007, compared to $20.2 million in the second quarter of 2006. New and used construction equipment unit sales revenue increased 31.8% to $20.7 million in the second quarter of 2007 from $15.7 million in the second quarter of 2006. Construction equipment parts and service sales increased 26.2% to $5.3 million in the second quarter of 2007 from $4.2 million in the second quarter of 2006.
In making the announcement, W. Marvin Rush, Chairman of Rush Enterprises, Inc. said, "As expected, we continued to experience the softening of the Class 8 truck market in the second quarter. While we previously expected United States retail sales of Class 8 units to be weaker in the second and third quarters of 2007, we now expect industry Class 8 deliveries to remain soft for the remainder of the year. We anticipate that Class 8 order intake will increase beginning in early 2008. Additionally, we believe industry conditions including normal customer trade cycles and new diesel emission regulations scheduled to take effect in 2010 will result in a pre-buy beginning in 2008. The magnitude of the 2008 and 2009 pre-buy will be largely dictated by the economy, among other factors. If general economic conditions in the U.S. are good in 2008 and 2009, we believe 2009 could be a record year for U.S. Class 8 deliveries."
W. M. "Rusty" Rush, President and Chief Executive Officer of Rush Enterprises, Inc., said, "We prepared for the expected decrease in Class 8 truck sales by ensuring we had surplus inventory of Class 8 trucks with engines built before the new emissions guidelines took effect to sustain us during the first half of 2007. More importantly, we have focused on expanding our medium-duty and vocational truck offerings, increasing parts and service sales and increasing operational efficiencies throughout the organization. We believe the diversity in our earnings stream and our focus on increasing operational efficiencies will continue to allow us to outperform the truck sales industry in the declining 2007 truck market."
Rusty Rush further explained, "Our people have performed admirably during this soft Class 8 environment. While industry deliveries of Class 8 units are down 37% for the first six months of the year, our Class 8 deliveries are only down 22%. Our medium-duty truck deliveries increased 12% from the second quarter of last year to the second quarter of 2007. Additionally, our second quarter absorption rate held steady at 109%, compared to the second quarter of 2006, despite fewer Class 8 truck deliveries. Even more encouraging was our same store absorption rate, which increased to 106.2% in the first half of 2007 versus 105.3% in the first half of 2006. We believe we can continue to outperform the Class 8 truck market in the third quarter and deliver approximately the same number of Class 8 trucks as we did in the second quarter. Our ability to predict Class 8 deliveries beyond the third quarter is still very limited, but we believe the weak Class 8 truck market's impact on our earnings will continue to be soften ed by the growth of our medium-duty business and the stability of our absorption rate."
Conference Call Information
Rush Enterprises will host its quarterly conference call to discuss earnings for the second quarter of 2007 on Thursday, July 19, 2007 at 10 a.m. EST/ 9 a.m. CST. The call can be heard live by dialing 800-811-8845 (US) or 913-981-4905 (International) or via the Internet at http://investor.rushenterprises.com/events.cfm.
For those who cannot listen to the live broadcast, the webcast will be available on our website at the above link until October 10, 2007. Listen to the audio replay until August 31, 2007 by dialing 888-203-1112 (US) or 719-457-0820 (International) and entering the replay pass code 4302156.
About Rush Enterprises, Inc.
Rush Enterprises, Inc. operates the largest network of heavy-duty and medium-duty truck dealerships in North America and a John Deere construction equipment dealership in Houston, Texas. Its operations include a network of over 50 Rush Truck Centers located in Alabama, Arizona, California, Colorado, Florida, Georgia, New Mexico, Oklahoma, Tennessee and Texas. The Company has developed its Rush Truck Centers and its Rush Equipment Center as "one-stop centers" where, at one convenient location, its customers can purchase new or used trucks or construction equipment, purchase insurance products, purchase aftermarket parts and accessories and have service performed by certified technicians. For additional information on Rush Enterprises, Inc., please visit www.rushenterprises.com
The Rush Enterprises, Inc. logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=3352
Certain statements contained herein, including those concerning current and projected truck industry and market conditions, the timing of such conditions, sales and delivery forecasts, projections regarding the Company's absorption rates, predictions regarding our ability to outperform the Class 8 truck market, growth of the Company's medium-duty market, ability to properly manage inventories, the Company's prospects and anticipated results for 2007 and the impact of diesel emissions standards on the truck market, are "forward-looking" statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, competitive factors, general U.S. economic conditions, economic conditions in the new and used truck and construction equipment markets, customer relations, relationships with vendors, the interest rate environment, governmental regulation and supervision, product introductions and acceptance, changes in industry practices, onetime events and other factors described herein and in filings made by the Company with the Securities and Exchange Commission.
RUSH ENTERPRISES, INC. AND SUBSIDIARIES
---------------------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
(In Thousands, Except Shares and Per Share Amounts)
June 30, December 31,
2007 2006
----------- -----------
Assets (Unaudited)
------
Current assets:
Cash and cash equivalents $ 165,695 $ 161,558
Accounts receivable, net 63,116 74,441
Inventories 478,627 484,696
Prepaid expenses and other 2,247 2,128
Deferred income taxes, net 7,790 7,496
----------- -----------
Total current assets 717,475 730,319
Property and equipment, net 293,908 278,690
Goodwill, net 119,931 117,071
Other assets, net 2,056 2,330
----------- -----------
Total assets $ 1,133,370 $ 1,128,410
=========== ===========
Liabilities and shareholders' equity
------------------------------------
Current liabilities:
Floor plan notes payable $ 418,922 $ 446,354
Current maturities of
long-term debt 26,208 25,999
Current maturities of
capital lease obligations 3,183 2,933
Trade accounts payable 30,939 37,449
Accrued expenses 59,546 61,287
----------- -----------
Total current liabilities 538,798 574,022
Long-term debt, net of current
maturities 173,348 166,125
Capital lease obligations, net
of current maturities 14,099 14,799
Deferred income taxes, net 36,420 33,856
Shareholders' equity:
Preferred stock, par value
$.01 per share; 1,000,000
shares authorized; 0 shares
outstanding in 2007 and
2006 -- --
Common stock, par value
$.01 per share; 40,000,000
class A shares and
10,000,000 class B shares
authorized; 17,261,688
class A shares and
8,129,615 class B shares
outstanding in 2007;
17,069,494 class A shares
and 8,072,226 class B
shares outstanding in 2006 254 251
Additional paid-in capital 174,823 169,801
Retained earnings 195,628 169,556
----------- -----------
Total shareholders' equity 370,705 339,608
----------- -----------
Total liabilities and
shareholders' equity $ 1,133,370 $ 1,128,410
=========== ===========
RUSH ENTERPRISES, INC. AND SUBSIDIARIES
---------------------------------------
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
(In Thousands, Except Per Share Amounts)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
-------------------- --------------------
2007 2006 2007 2006
--------- --------- --------- ---------
Revenues:
New and used
truck sales $356,504 $423,717 $734,140 $787,064
Parts and service 120,502 112,449 237,798 217,316
Construction equipment
sales 20,690 15,706 37,424 30,140
Lease and rental 13,257 10,239 25,322 19,619
Finance and insurance 6,273 5,005 11,777 9,070
Other 2,178 2,122 4,201 3,914
--------- --------- --------- ---------
Total revenue 519,404 569,238 1,050,662 1,067,123
Cost of products sold:
New and used truck
sales 328,708 393,298 676,600 727,470
Parts and service 69,621 66,068 138,044 128,347
Construction equipment
sales 18,386 14,008 33,382 26,706
Lease and rental 10,964 7,898 21,415 15,034
--------- --------- --------- ---------
Total cost of
products sold 427,679 481,272 869,441 897,557
--------- --------- --------- ---------
Gross profit 91,725 87,966 181,221 169,566
Selling, general and
administrative 62,539 57,572 122,987 114,228
Depreciation and
amortization 3,675 3,106 7,277 6,014
--------- --------- --------- ---------
Operating income 25,511 27,288 50,957 49,324
Interest expense, net 4,533 3,518 9,061 7,064
Gain on sale of assets 68 17 156 50
--------- --------- --------- ---------
Income before taxes 21,046 23,787 42,052 42,310
Provision for income
taxes 7,998 8,920 15,980 15,866
--------- --------- --------- ---------
Net income $ 13,048 $ 14,867 $ 26,072 $ 26,444
========= ========= ========= =========
Earnings per common
share:
Basic $ .51 $ .59 $ 1.03 $ 1.06
========= ========= ========= =========
Diluted $ .51 $ .59 $ 1.02 $ 1.05
========= ========= ========= =========
Weighted average shares
outstanding:
Basic 25,352 24,998 25,265 24,853
========= ========= ========= =========
Diluted 25,561 25,215 25,471 25,174
========= ========= ========= =========
CONTACT: Rush Enterprises, Inc., San Antonio
Steven L. Keller
830-626-5226
