Rush Enterprises (RUSHB) 25 Jul 182018 Q2 Earnings call transcript

Company Profile

Participants

Rusty Rush	Chairman, CEO & President
Mike McRoberts	COO
Steve Keller	CFO
Derrek Weaver	EVP
Jay Hazelwood	VP & Controller
Michael Goldstone	VP, General Counsel and Corporate Secretary
Jamie Cook	Credit Suisse
Mike Shlisky	Seaport Global
Brad Delco	Stephens Inc.
Faheem Sabeiha	Longbow Research
Andrew Obin	Bank of America
Mike Baudendistel	Stifel
Elliott Simon	BMO Capital Markets
David Mack	J. Goldman

Call transcript

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Operator

Good day, ladies and gentlemen, and welcome to the Rush Enterprises, Inc.

Second Quarter 2018 Earnings Results Conference Call. [Operator Instructions] As a reminder, this call is being recorded. I would now like to introduce your host for today's conference, Mr. Rusty Rush, Chairman, CEO, and President. sir. ahead, go Please

Rusty Rush

and call. our everyone, earnings quarter release conference welcome morning, second to XXXX Good

call are Executive the Michael Secretary. Chief Hazelwood, On today President Goldstone, Financial Steve Operating Vice Counsel, Officer; Keller, Vice Officer; President, Derrek and Controller; Weaver, and Vice General Jay Mike President; and McRoberts, Corporate Chief

will Steve words few statements. forward-looking Now, regarding a say

Steve Keller

uncertainties, Annual those statements Act such the Certain for on ended results our Commission. or include the differ Private in not the statements Form December those as statements defined statements differ may are we will results year actual in and Exchange Important implied XX, and these Litigation with implied our by actual make to, that of Reform materially today filings expressed include, risk materially expressed Because are our cause could Report and but forward-looking considered Securities forward-looking those such factors other forward-looking XXXX. from Securities XX-K limited from statements. to XXXX, in or discussed by

Rusty Rush

our net news and quarter of second revenues release, $X.XX achieved diluted we billion in million share. of $X.XXX per $XX income indicated or As

the our we net $X.XX results announce first in ERP of and proud related charge quarter achieved equally proud or $XX.X ever I to per our $XX.X company’s platform, million am share. outstanding financial million income diluted cash very Excluding our to of the dividend. second

impact heading, our we remain continue our direction We on are have initiatives we’ll to financial have on the in positive confidence which strategic focused results. a executing

in also throughout the vehicle results positively our and economy Our strong market, activity commercial robust second quarter. impacted the

our in million our paying by second combined strategic aftermarket, and XXX.X%. a ability quarterly shop were company's in positive consistently growth $XXX to absorption annual repurchase we We Our decision believe with strategy. a free invest the to continue the the revenues quarterly maintaining quarter and our In can cash while service, initiate is ratio dividend and was our generate share dividend driven program. our flow capitalized parts, body initiatives to

by compared the aftermarket market. was activity Half quarter second half increased our initiatives commercial in and of by the revenues time Our in the XX% widespread same the XXXX. this aftermarket growth other driven period in by to vehicle

economy, see focus fewer We aftermarket from the sales sector continue trucks service results activity throughout we're in strategy Due to our and will improvement operation, by half and the headwinds we our and on the in but believe international progress second year. aftermarket quarter. overall the and we the parts continued remain that strong to in second encouraged of saw strengthened the

demand Class customer in Turning in trucks sales, nearly we activity second a while new quarter, of there the market segments. sold was accounting truck healthy total to U.S. X for X Class X,XXX the all X.X% in

Our capacity. said, to results are and strong somewhat first we XXXX. constrained, over were the half That still due truck component year of the manufacturer a X% up production having

new Class market due strong for truck longer truck second X were used up and the Our is lead in in quarter deliveries. part to the times sales

X constraints for reached new truck market. truck an continue the pace sales retail well-positioned X.X% and half U.S. Class deliveries XX% Class truck sales of be believe and will support our of manufacturer will believe units second X In We up the medium-duty, to in the to our units, sales Though Class new used early we push compared that XXXX we quarter the XXX,XXX X-X the needs. the X,XXX could U.S. to X some year. XXXX, Research of increase accounting of second to over into market in our monitor forecasts of ACT inventory market XXXX, XX% XXXX. is increase Class

in construction the U.S. Class outpaced sales provide retail this forecast the our customers from and Research XXXX. and XXX,XXX ready ACT leasing to year, to units X activity to from X across medium-duty ability medium-duty country. roll up X% Our trucks rental market, to our to due sales the be

We service dedication important top through X-X the moment of our to expect customers employees goals the with every sales our for thank take remain and day. solid I year. It that truck remainder our to Class our providing long-term a is to their and superior each

this As With always, key our your questions. to is take the work I’ll quarter. success their impressive that,

Operator

Cook from Credit comes Jamie Suisse. [Operator the line Instructions] Our with first question of

is line now Your open.

Jamie Cook

guess I question then half? year, back accelerate the like grow. it in questions. that my my sales, truck the your OEs that’s Rusty, And to sales just the back quarter first X noted you hurt in aftermarket could should will they you what’s much noted the and the the and Class X on you question. know continue quarter. Nice quarter, parts two embedded pervasive I sounds truck that you how half the how guess Class in constraints which One, elaborate some across of were impacted of the second

So think the the back either year? of of in year. the Thank run to start earnings way you to Steve for for the back half I'm of to half that for the the in Is and trying earnings the a you. rate Rush implications think or sort about about $X.XX

Rusty Rush

we'll GPS, never I to but that talk know you first. Jamie get call

Jamie Cook

directionally. talk can You

Rusty Rush

already, sales would to be parts and that say know here and strategies hold, get you we'll have sure the back get when were - services hard fact that anyway. the to we I and widening from minute, know you widening should a we some when look put don't the start down to expect to anything in I or our it comps for got sequentially expect in the say to go a know directionally, you mean XX% it I'll to way gap forward, we move to right, probably extra should well the at expect you start we continue we’ve just in you at tougher, latter me between know and spent made year-over-year what and it a had, I tell the you I've in from to lot the expense. you of - from things we to I expect in accelerate margins but place all I expect you to could we’ll mean you widen look to sequentially release widen, maintain QX Directionally, It'd QX said at do all, I'm yes, I take in. see. I I we're different I and going investments put a because go say. of but from did, it, you truck at get maintain, to able starting we’ll when that but to it the we're They here. gross slow expected the we little look the investments The are most would, we seeing to saw quarter, and we profit and question be expect look probably - continue of maintain margin up double-digits you saw we well take a that backwards that lot should yes, take to I

know from from those all you amazing a it of to things a been has OEMs it small comes constraints lot I that and we there know and to have delivery, and So the you the drug note talked are suppliers. represent important was sales

is PACCAR I being - I same know going was had or be that time, but is to bottleneck, said, through now. their and yesterday. we that a whatever just Now up lot right At think being XX% that production have the a of pushed

I bottlenecks are think the I widening say. should

may some of but was don't much are a really few here - there and were were don't trucks constraints, that being built lot lot up. it'll constraints, catching a in think been with saw factory. I be believe June. short we that piece May We talked they and early was I I May and of I’ve say there, have that there - as be and what parts the we but as saw a there So, in in -

half you talk the of that's why we the deliveries about accelerated So, year. back know in

Jamie Cook

up, sitting a year. yesterday even XXXX know into than, are just how [indiscernible] we you mean then last And is - better we're they I follow noted visibility how

customer saying, line of as how XXXX what have thinking So, - customers And you're and you as about your Thanks. I conversations, wondering would are say back in get well I'm vocational queue. just of side? both your do terms I'll the on in

Rusty Rush

activity produced side, gets can no we just of end being believe backlog, There we lot just here right Typically to here believe in to user, of gets there's is now doesn't just to to at which year it XX were into we're Both, I hands the a get have look does, it as us in it way. the delivered to - right. all right. no XXXX in already specially People a in mean our it's get - because because we're going ACT customer. strong, the when days our that the not similar days vocational that XXXX, XXXX delivered to XX - and remember times take seeing running XXXX,

for of next So, will that build some first the of and into in quarter me build the trucks manufacturer year. October will in that we'll will build flow flow the

we're we because the filling So, time, is at even of are user. to the the chain, you end okay, faster we're XXXX because more look than think person last last lag than in up one food we the I the to it, truck the because - deliver OEM, have OEM the the

the I I’ve has from that and businesses feeling negative. and been in and any better the markets we So of customer are or better has delve not and obviously that there XXXX see into we I about any nothing, no commentary mean been commentary, any see time all

our at and negative a our to from me think to or not what drive you continue I'll coming takeover continue spoken going in we're I'm see truck proud XXXX service want, the we to out seeing - delivery street So, down in future very sit telling to you going but look additions, go know when parts continue on hard feel the in can and paint it they those, anybody I'm not pipe, say, have see about I you but and do XXXX, it we it's confident here and obviously from it’s the XXXX. paint level, to those down we've of know more to for perspective, I we'll folks operations. about we're strategic

Operator

next comes with Our Mike Global. from Shlisky question Seaport

open. line Your is now

Mike Shlisky

your at on now, say dividend. in want in it saying quick I that say XXXX, does to dividend when a let if know is flow this new earnings X in Class the any put fair really longer which is of you're and actually started truck cash the and that's your eventually don’t question tail, your a and is connected way aren’t earnings words peak year, Class market that mouth to the next that here, all send? to you you much not you or but trying a X the a downward A market, year to turn fair parts message has all

Rusty Rush

you years. to way right. continuing earnings And the few and out it How the modeled shift shift service flow of business, reason the Obviously, organization the know more said - and the the in towards we've down piece business, that. the knows whether over all that? as parts that's the truck is years someday, if is our the go we think is market side five the will Mike and Mike, We everyone, believe cash wonderfully. next stable more behind when of the regardless which last I by

profit business, heavily stable piece. more the is on gross because that back the of focused the so that Our we're ends

to repurchase with we So, the modeled, interfere to going able the to it’s continue here with program, share as stay. be and to continue we nothing obviously get us both is dividend see program

Mike Shlisky

wanted truck I the balance that quarter in in release also were used quarters. think next secondly, market now the the is over XX% up used It of get, the and a I sales sounds it’s nicely, like your correct? to couple the of sense press units in and

Rusty Rush

- and really margins margins are too. Units high

So…

Mike Shlisky

then be inventories share maybe to your any keep will in trucks under that inventories between Can now and say you traded down; then? those reduce the are taking year you so I with to perhaps many and to got that the quarter. now fair you were how it is soon then feel from initiative in So being inventories control them you about where probably mean a

Rusty Rush

times the calls, not inventory here of back you be as has last concerned later where we go Well, as what summer about times happened can in in couple lead so truck mark release there the lead on the I've test perspective. carrier a first they're used to because XXX,XXX that and market model from active, been long XXX,XXX for But I trucks in the is used out would six of is been truck long in truck has a new activity turned mile, active. wait late first guy, extremely by customers, typically the for the months, has willing been the that’s extremely for mile

it up that come. is our where at you the now, are our up pretty the flat But market the what activity no be taking So, itself it can picked supply a were growth us for and and thought slack it��s and has was that is I from by inventory in obviously tell the of QX. touched continue to care they levels you on - question large picked for coming supply, there will would

very center too hindrance. properly profit for centers run are you, So, that. not profit trucks Used right, we're comfortable used just a is the good truck with

look in last nice years, center as very and you can the as now. couple they've of see good been been back obviously right for So there a us profit you they've

So, this advantage a continues of we for at jumpstart year that it are but from that I a back. used forward this coming these look eventually we're probably getting realized know and moment, year. don't a it's will all taking on I as if now, trucks that

started when year piling going But are now. won't we not inventories I have we have to up and building were start ago a what they from thing look that's building, be inventory not long-term me. were truck used said from They sales used so maintaining of good and a that we're I'm at typically saying. from you should truck already So, what started perspective that's should it a you building where already

Operator

Stephens Our next question Brad Delco comes from Inc. with

is now open. line Your

Brad Delco

much but in of the the good maybe color kind so of us give in us first already, outlook is typically for of the for half. year back know I this how impacts of seen it but a what much kind your little You bit is strength a half you relative to helpful. over margins the can provide the be color truck on how as is energy, road much in that business and price more your lot of well? the some trucks detail there construction, on we've that how broad-based, is would So,

Rusty Rush

do little from pretty doing can to anticipate, so where were you and I’m obviously I I’m more I’ll expect conservative take the little Well, when a margins I it that it Sure. the tell over to but job back up, more by mixed as I we’ve been expecting much we maintained business, talking half was be a coming be right. road out always and right bit when way. freight keep a better

it's though big road two now customer, - a up year, the from broad-based. delivering like tell of though that trucks what deals trucks why year. have even right. by last had a up because to looking we time, to we're we this road half strong don't going constraints that deals XXXX look trucks, still the deals buying few we both that they're number still sectors, the deals year-end very not want having in largest but our the deals, over at and deliver a up than had So, the one customers - not will At more I we're really okay, I we - large energy going got we're in - XXXX. a much We year-end to of can had XXX over a we we be don't that when accelerated be did they I've but we at Both last same loaded we deals but We're all it there's deals in we wrong, doing of deliver got by couple size. up mean backlog. the have any more in that it's get XXXX, and large don't that here are XX%, the are business, I in we because but couple were couple But couple we're likely a less that that. any again even solid, most was you we'll told I fact there, think be still X,XXX don't the in my year large at tell are number, truck that X,XXX going last head, what in year a the out year - had I by deals, don't Rush energy is this trucks. I because to and everybody We’ve XXXX,

deal strong others still you had broader more other so at be mixer means say for up to the many, mean, broad-based. because one's as it the that's very really I markets. for will that back we XX XXXX. have of Construction be have overall we And still I the but we're So, it's we're like many as that been strong that hard half Energy it it's business, said into I mean better, won't strong, Revenues across before, say all continues me large to as selling based pickup look the than better started here the would also but across a years this and the trucks that, board. because it's in year. me

rambling here a negative. me but - know just little I find a bit, I I'm So for on to I mean hard it's

Okay.

Brad Delco

in saw of it bit of year. first broad-based, over was freight the or a you component what more road So little like seems the versus just it the a half

Rusty Rush

that sleeper much percentage They're trucks year was would - more Yes. Well right. and more OEMs the last business, building over this larger as be road of the year, well. The you'll vocationalized. find upside was a

If did. of built that's - reasons. you you a one will more the being to walk And see lot the trucks factories, larger you than sleeper

If many you that of that's the going those. you big know participate we go historically, as some what's going That's big, with don't upside. huge but lot that's on, also, guys big of deals we where that's on they - do the these a of reduce

The we things XXXX other segments the and everybody. see starts healthy XXXX, to you that don't It slowing was to healthy. housing like When in is look in kudos and in maintaining we other XXXX, all it were XXXX, in will at and in that, healthy talking anything the healthy too. anticipate be down customers very

Brad Delco

Second question, I think you then and question in as well. kind of a with to it alluded the earlier release

salesman. I part XXX think techs, I hired think hired XXX you've you've

So and you matured? the would right. these what be, like margin that's put look of a what that guys drag kind in once may investment, Can margin context it

Rusty Rush

see as percentage, dragging little don't Right. level the is absorption grade We growth bit, expect level but as technicians show what we rising obviously in okay. gross profit when fast you X, best, They is absorption dragging is you X being right. technicians, margin XXX a those not revenue. have and given the to would five it is as But fives, up

to So you've people. got train those

that they right. or skill through more okay and year, this their as training fully the and get the all hours in will they hours sets up, that, not like but level Our producing they're go bringing the experienced roof get the builds things

money spending you're So there.

way, to more. going plus by people. parts your the service call, XX of an get buck extra not bang for we ASRs for or full your months Well, you're XXX hire as You sales

not their gross They're and So you're they're look getting market, going haven't share growing and have - clientele, the best and go don't get those because their more to money. accounts it growing they they and to - walk it. they month, if every they relationships I at made and and those they new growing profits they're special to and making they're after build - and grows in, put them just way we guess

money. when over last if QX you year, of going in told remember what spend QX gross we're we normally parts If and okay to said profit you. I you I've look service did always

and pick You to people and turn Star goal Is XX%. you and parts don't hire cycle But okay. profit and service we without like Trek the do know over parts of we Me just to so. gross and this typical and produce not, Scotty, more deliver got parts spend Up is XX% parts our wrenches we okay. investment, to keep up Beam sell in This isn’t the to the have is

and If on you spent we it, right compelling look the QX But starting direction. have really look at you when XX% the over of last QX to you are year, part, you when think at only go kept XX%.

QX. As versus you look QX at

meters our part nine comes money. begin year about takes we going with. we're We year, the those to the great from late flat what have and gross But of it, getting this more you be made the can half can investments that we're XXX in last revenue and for. tell show just we keep and you it now don’t initiatives. into widening, with But just running It - said to don't time growth seeing seeing kept you’re XX% to investment backwards you that to looking widening start and growth I spent measure and you're not as is and and XX% start you it running-- to had and profit line get we're and really get because up as it and

So that you we're plate. - will with I on so not right of initiatives, We've a now. the and through stuff tell lot got

Brad Delco

margin are think EBIT in incremental number? and change I of you profit the XX% terms versus that's quoting about in XX% point service parts closer change your what gross your Your or

Steve Keller

to people that you to QX versus to try intend. the we was G&A back $X.XX are he spend G&A, $X.XX of it's we spent is period mentioned rest change question, investment the expense QX XX the XXXX but your on we ratio XXXX, one from versus QX, profit all or next. saying that sequentially because that most change to that Brad, keep of in the it's We gross

produce and tells those to guys was in gross them, layered in profit down. you expense are already of the So starting already more kind that

Brad Delco

Yes.

Steve Keller

right headed it’s So, the directed.

Rusty Rush

Yes, an the investment that with go one, your to profit starts one. expense question day begin and day of It's point your that up gross was with.

we making feel starting maintain just to about other but in expect and I are now. those QX what be investments, people we that. investments to off so, we’ll pay we And able And to QX right good saw and keep think

Steve Keller

And one more of bringing investments of that adds during started point ASRs. those techs we really people QX and and XXXX, when started making and QX in on that's we net those

the run QX, they not are fully rate So in were in expense in QX, XXXX, loaded and they XXXX.

Operator

Our Faheem Research. of next Longbow question from Sabeiha comes

is line Your open. now

Faheem Sabeiha

provide trucks, of So more I'm seeing instead around board in just demand. a new? And you around that caps the incremental fleets for sizes across sleepers, the that wondering vocational trucks the any up amount now? if of substitution color all late opting day little can truck detail just of showing our other model Is and used you're right

Rusty Rush

anyway. yeah, Basin, up, its Well, were construction in first market mean non-sleeper that inclusive. activities been But are activities, been regions Permian strong, have too a been mean up, wouldn't extremely hot I extremely strong. oilfield especially in the fleets broad-based. that’s say little the all cetera I et has I have

they they much, because when use, the a that demand the but business see can't you don’t The the opportunity that think the quality to and it's one with second-tier - because is new they six So months. but right. not guy six already have truck of of trucks, away there immensely look are ago. the buyer they’re and at that's They so XX it from do, increasing that waiting taking years, to I seen they quality out not It mostly tier over got volumes, got get than maybe wait and truck second affected sleeper and they're - contract goes may folks a where for years that the road greater the into we've six with XX and take going is the the business that months was second months, been that on.

money, just done and on can folks start want truck on get to get job So, they they the a making to the road - get want right.

- of in you’ve So, increase it these you in a lot stuff sleeper seeing there it non-sleeper in. an but seen what the stuff, already is was

Faheem Sabeiha

can aftermarket near-term? the And your have you about the in sales higher business talk will on the used benefit

Rusty Rush

a because going always if I it's way going is to on just Well, gets don't those don't running, - get road faster. on into life. to it's to benefit, going another. out it’s road have know know it's used one there's they're turning a market help, it's Sure, going get a or right. but I the into the there truck, mean them second - the to the if We're quicker, I back the

not don't don’t So, our a getting turns say, could you're it opportunity - are you try wine, to XX XX quicker, than so they at or not like or holding to bottle and XX way they that look it the they faster, days less. going with age. give We we I guess better days are turn typically - inventories, we’re because hey, typically less used truck over of days

to you've the you faster can managing, guess be get So, a on look got faster it parts work, we always and get But if the to road, the prefer got XX. at might you return, service so like it that. we I - I

Operator

comes next Our line with question from Obin America. Bank the Andrew of

is Your open. line now

Andrew Obin

that take over, Just us of so key. truck you look the cycle about going is did months to market their But know the say XX rolling economy that is is folks for sort you guys of the the to you them telling over. the it’s earn question hired, sort

you you can do Let think think the can you initiatives next your and year, you this and question, me grow down parts you you given still do are you utilize truck business ask service if these and deliveries for have? reason some folks still

Rusty Rush

The yes answer sir. is

my that Okay. can’t. question mind There's no we in

tied of done, I'm not not are sit our it know, to to new truck but and sales. You going guarantee XX% here initiatives

drives I I'm like, me. here things and and think kidding get morning it yesterday every this you confused me. and are reacting people I sit watch how

think I effect service. that going with of folks. think know truck going that after people you're will believe all has I see strategic But You get and that next don't no personally, parts sales all, We're real - share our through run right. initiatives cycle, first truck I the year. to on

We're Okay. going and and hard fast. going to after after we're share it

that's around in trucks. rates XXXX the do and Look not, one stop. don't starting we're make what if know can't our love our mentioned, was our pretty that, we're and I - say feeling it kicking wait a more truck we'll to without because okay. piece on - uptick parts to do have day. the don't can market, but had couple a year, they that confident the to know side I take to we now, saw the day. way to initiatives past, that the be built still just in And truck went still we’ll that XX, growth you many - growth times years will grow we're the XX. laying we house, word down know, it, I they’ve more example, sitting was Look, that see see Go - on, our be have disrespect. it think to say I money I we're through can great but I'd all pain at mean what show in XX it off I ago XX We'll look No great set got start now, and I do Navistar market, to work a in products the it year. but we'll I were. on They've wonderful. think don’t that to to they achieve, but because I our if the the just - going say trying Can market, that's in the still that of think we're word, last table hadn’t got heat XX%, got a same? don’t I markets is our the You to we we up good truck market. for But see, and Andrew we've QX that we as like putting are guys you of about right, to said even a of hold. I'm over Remember I continue $XXX,XXX around number are we built you know, and we've my this last less. We seeing okay. used but so believe great anymore back going investors in three stuff interesting It taking on little feeling last right all what because do service pain. anymore, were XXXX, MaxxForce, okay business.

- to look a there. spot of some our So, as few of that, is overseas, - shipped to back, left - nine-year-old sweet those and They're Well, four to for out eight running mostly a there's gone. they're parts they're five-year-old all just, got trucks service you truck. lot

So, we're there, missing. the And with had also that we right. issue duty medium back also

I'd are folks stores I missing about to real When XX%, believe our I mixing things, those other told look I've international if good facing growth headwinds, XX. parts we what in that it. that's get most international but side, up, little the on now. growth like can and XX% doing XX%, we're I to X%. it up can what with are you overall and we're high and So, a the keep those close parts at rates right over service dealer that of we're service do piece. If better than rates, single-digits feel and growth

there right. starts that if up, back picking So, a tailwind, is

future into go we in. of because stuff as our strength tailwind, we with that investing able of and that and the of at the a we're because some people on path look through we're think fight to been our the I right as we've way So, the

Andrew Obin

upgrading question little Just you've noticed Can we than also that, some have bit margin just experience a your you your your for is you. your parts upgrade do sort there a Thank been ERP of up about runway benefits on forward? your follow parts what tangible and modeling. was talk there a going in is system, were service margin you system ERP and possibility services just I've that operations. from that higher And

Rusty Rush

margin We a had pretty quarter. good

in and in mid mid we X that’s Now a are XXs, I XXs margins - lot mix XXs are margin was in parts that was and the tell and only you margins margins mix a to and because the a there XXs. parts had higher you quarter service will parts in know high service, service the more, a mid

was end more Business May, - knock extremely really or platform we’ve replaced that Day right. is Memorial what which the service it smoothest had, The little and our we one of do So, the is so wood but Modules we it DBM, it we a Dealer replaced. that then it transition on mix had was the that's than parts till went mix, of it And and weekend, we didn't up. the reasons was ever was

going coming So these little initiatives, system in in initiatives some of and pick of we're proprietary are I'm that are we information, initiatives is have not investing the investing up the to the there, a get performance but still in into of bit which down okay, some them pipe. that, that we're yet probably seen the because outside it’s the

ago So is Andrew. got surely possible, margins But go to sit and backwards, because going margins. sit to grow sure that okay, take But XX, going of not business system what I And that more data say most and provides system years our spend, for out rich it's we're harnessing data. system long we've We I'm we expect believe don't I here out to the to Yes, it remember, gotten that possible? been XX painful that XX, a the It’s system. know data. there. our it’s but is we're

doing, of that our And data data that what it okay. how it it than any into numbers. and to and we've financial leverage have Now competition. And that right. learning leveraging I push more we're that had now, our That's more we're data. systems take take and the confidence leverage We're that how got it we use

in think taking it we that. just - I And last we - As five feel good show I about quarters now the results the a we row of said going forward too.

all tell show the key that more customer, more help metrics and of and can I know understand will more we believe the and You more leverage man. continue side results to that our you, us us we're business, the understand and understand to it allow showing business to learn on that's continue and

Andrew Obin

markets the and good long-term, help Let's luck. efficient

Rusty Rush

cycle really Look, all the things, I I that's - the but it's kidding. at - say. performance I that's growth tell for No you is look mean all can where I can us,

Andrew Obin

that. been Rusty. we’re what agree saying, with market That’s will the hopefully Thanks

Rusty Rush

can you, frustrating little times Thank a you. It's I would hope I at so. so. Hope tell Andrew.

Operator

from of with comes the Baudendistel question next Stifel. line Mike Our

is line Your now open.

Mike Baudendistel

Peterbilt comes I you, to just I your think profit ask there recently all update the that you here once wanted any of changed dealers, Is gross said is that at from Tom and XX%

Rusty Rush

know don't Well that. I Well, well. XX%, that’s

yes, the really the I with see they how changing because way, that? - and piece, towards ground their Volkswagen they line those question is buy note minute a going you that nice they're what diamond that wrote there's return what don’t more It At no talk organization for if it lot. where right with star chances the And I that profit and everyone in I just by will. a I that coming thinks talked very I’ve hidden when We're think working is me is, it’s said who changed to know the used was division, I same they're getting back that. a think about. is of headwinds fell have net it perspective knows okay. ago, time, in, appreciate But a from feet we’re I still the the that. larger thought so on you whole to a about a I about

and are further then about when go it that right. by headwinds goes day things a spoke all you through we're and those fast as think working every I great way I our the minute ago

- So those - those time okay. but to acquisitions done of in a remember, got lot you were of were and all a duress, also

but what's a hard with of going to now back XXXX get exit organizations to stores hard aches work on people words, those of lot that. took our through the going at So on and pounding. max respect, in the It not XXXX with were and because was international but we

a doing but it. that we're and not of water stir also, just there the back performance believe continues still to So I an that that which is there back going given the get. on add the bench the again strength right rise we're out rate and job of is again switch, maybe organization and you the do keep investing other still now to got is but we’ve right investing building we’re diamond level good not like through to there that - our the house It's it’s catch, and deal, it’s is side not on to inside rabbit side headwinds, the it on, out hidden got

getting So, the stronger day. organization we’ll keep pressing that forward is by

Mike Baudendistel

impact Also that you if bit be pretty is like on I energy a are a demand of about ask want the positive can broad-based customers mean, the little a disproportionately to can - on been and having energy I sustainable sounds just talk range customer you, has customers the types it I this mean, year the so? wide company

Rusty Rush

say trucks to going we're our that. know sectors, and not transactions service trucks deliver let’s parts and break as to large and less it a service. I couple sales, - parts No, would in we at would well, I because, say sector I of last look the two year.

Okay.

deliver trucks less. in and and or year-over-year service to energy our sector, So, was there parts flat we’re going less business more

attribute in we contribution, you good don't a it's was we When were it Okay. that QX and but at wasn’t of the in year what across the up, initiatives. this strategic to let's segments not it's of did last much contribution okay, look question doing year, QX there is what performance good, of organization so up you year-over-year. When - really can not you is energy the our these - more to and rose the other I being broad-based what results, can't across the

I'd a that your and in no, we down a did answer I this is traction, As as say remarks, sector quarter, this drive was to The this performance got was good go got the measuring the and is, say, about it XX% in well, number. sales the to XX%, I’d and We've continue, we that saying believe XX%, can best initiatives. that then but our question, then energy perspective, it's service not in were XX% it at my the XX%, we XX% go right XX% XX% which up is expect we’re it And but to then last and tools, or said watched ago but you said it no and parts just about back truck from science. we've now getting year, that service tell and like is from a came believe XX%, right of year. well, year higher I'm it from, - but parts we energy I've it XX% best coming we

Mike Baudendistel

rate XXX did to techs. you be productive I how it And context and does And just long yourselves. in total? and training have that you who many also how typical your in what mean I to hiring techs put retention them for someone the what's ask take that want like have can you're the like of hired that on the techs in doing not sounds XXX previous experience they're you’re you this, doing, you and

Rusty Rush

I add. our would technician turnover is position we're a position the them, that's like depends. of add, a highest ones the position XXX It tell Unfortunately truck in tends just some to driver for road getting does net you right. the the industry, be net the The the over customers.

lost, to going that's you've after be right. what So,

you after during folks really left period, have the feel that. So, that who about we so good

majority were having their pretty solid, not taking up They're X, years They're of be to of a But stuff and But up level X coming to in but they're guessing. good at like and X, to take level level OEMs up tech ground not five schools to X, to can that. may relative be no, at So, there level. and like are that level level do coming X. technician maybe training. they’re three the with they're their I'm lot that but them so, the but about rule, they closer coming a - working stuff

to all years This guys we’re We a really and technician. five to experience. X takes years going table five level the around have getting probably the to up way

college, to takes school. So, going just you’re like more. It school, you’re to to you’re going right, going

you build You learn, and right. - and you and you upon prosper it builds you itself, you learn, grow, grow, upon

to Your base continues build. knowledge

full And that's continue to me, And able XX lot get on of I was expenses. be with. may to going So, got trust better. they plus to it’s money said earlier, why to a a then training. I looking produce make as of not the been hours you've they're some at sure to there, begin

have you that. So to supplement

produce leave, hours. to to decrease expense so supplementing you of right. your okay. going refraining - But forward, that can the as you XX can't got XX sure what supplement to go may only them I that expense these they folks, produce for or X way You've I therefore hours, do XX hours, be this, could amount is XX pay fee and that along hours hours they may

then you and a get higher increases. So, that production

a technicians, a it's great. When --sometimes, hired by say it's process, you yeah process. So, we’ve

X,XXX, Yeah, started our I I’m right was about X,XXX. around think this now, number or so, guessing. we at X,XXX

So, are XXX mobile. those in all XXX,

increasing learned an seeing and and the understand things the drop cost it of everything a they who how pay this, for not in because congestion we're taking truck, and or folks of shops all, mobile all increasing, right. the labor there. people totally a taking not for There's - just will into based it given demand up cost involved So, for a demand, shop, metro price across broad in the the hiring in and for that our like areas board to

trained across We're grow technician do get about again go we that excited way base we’re as return to broad-based it, these to is growth adding. excited and forward believe it. we the by because not up we're continue only we're So, seeing guys and our about done and going

We're is straight now. adding that demand. through give folks. There Let's not right

Operator

Markets. from next BMO the Instructions] of Tiss [Operator Capital Joel with question Our comes line

Your line is now open.

Elliott Simon

drop Joel. market I forecast guys for Simon that? you is know the share. This Elliott What’s on for the

Rusty Rush

upgrade. said it’s an I

Elliott Simon

job, slipped to guys kind of fleets know about you market no, think upgrade, not How road an of here X this more It’s flatten the just from you forecast a Class great out kind think it sales do share better do truck will to than Joel. the quarter. versus… make over you up in percentage I but for that, X.X% or

Rusty Rush

Yes. big one thousands not that. business. when we that Whenever market the we high to mean but doesn’t road broad I’m That higher as you have big are as not much business we really share and because big, super but you sell, carriers run have gets over carriers in, over road typically be there the based ones get thousands, buy don’t the are as you participating going in large numbers, rattle many we may when

this for range. typically - we pace I large XXX, the slightly. more know it's so rest deliver We're delivered deals, will another about our biggest able down, year, up decrease to We're we're We or XXX,XXX a a we're to more, of are base. XX% keep XXX,XXX. to had our done. deliveries versus XX%, broad as going - to or where X% units, right to to X% But market go we a be it not couple year we're So, or far supposed share because will getting, is get are might going it on year, there, typically a to our our X% but to share large, get be this shouldn’t XXX big XXX,XXX going up the we but be at year, those I for we're XXX,XXX we that deals. of you ticks. any the - would hoping those usually grow the the go I'm maintain I I look the going plus - going plus up go with our market up X% were should But, means be not when out expect this to for like

share that up. percentage, lower So, we'll market maintain our a not we're up because I'm year. to not a deliveries you perspective going to to I are from pick the and I to back giving pick sense? with up pick line make or but better XXX,XXX go half of in up Does any going projected the expect as hopefully our X. them deliveries pick for expect any

Operator

the from David Mack of comes question next J. Our with Goldman. line

Your open. line is

David Mack

Because about that. was to the going was I that well. Joel know as ask I share curious about

I'm So stock from anything for not with that don't move dividend on is Should allocation trader. question. I as you the the going well? do capital take stock you know the or plan I a announcement active buybacks to to most the opportunistic see on as being still path

Steve Keller

No.

as We you not put million are spent, spending the allowed flow, still will and we first spent December, $XX that wisely. that still free - I cash since do We're we not it's cash do as speak. continue if - of $XX I of the repurchase to just said organization. repurchase. may stopping. as we are We're stock, have the accelerate it we what to flow we're to know continue spending continues another million that, in both. earlier, could money doing We might going the market I yes might We support my but

First and right. foremost, let’s get this

if I get Let's straight. could this get

it. and To one going do to The invest grow be first company to we're going is we're and number thing in the do. thing first our

third a and we're Second, we're have cash flow free to to do going gas. to repurchase do enough that we and dividend going build still and

we handle believe three of we're those good out, all So, project shape to in objectives. as we

any So, we're I - wouldn’t about worry stopping programs. repurchase not

Operator

Thank you.

would Rush further the this turn back further now I like We remarks. over to for at time. any Rusty to questions call have no Mr.

Rusty Rush

we Well, again you gentlemen. I be And very and Thank in appreciate your time talking this all morning, much. ladies October. will

Operator

This thank gentlemen, and for does conference. today's Ladies participating conclude in you today's program.

Everyone, great disconnect. all may You have a day.

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