Rush Enterprises (RUSHA) 16 Feb 192018 Q4 Earnings call transcript

Company Profile

Participants

Mike McRoberts	Chief Operating Officer
Derrek Weaver	Executive Vice President
Jay Hazelwood	Vice President and Controller
Michael Goldstone	Vice President, General Counsel and Corporate Secretary
Rusty Rush	Chairman, President and CEO
Steve Keller	Chief Financial Officer
Jamie Cook	Credit Suisse
Neil Frohnapple	Buckingham Research
Brad Delco	Stephens
Faheem Sabeiha	Longbow Research
Mike Baudendistel	Stifel
Joel Tiss	BMO Capital Markets

Call transcript

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Operator

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Rush Enterprises Fourth Quarter and Year-End 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. to host like Mr. today's now would introduce for your presentation, I Rush, President. CEO Rusty and Chairman, begin. please Sir,

Rusty Rush

Good morning, welcome earnings everyone, and release year-end quarter conference XXXX and call. to our fourth

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

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

Steve Keller

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

Rusty Rush

long-term year $X.X high resulted I which record this dedicated for for our and am performance and strategy, work billion. net in million $X.XX $X.X per of per share. financial of annual share $X.XX excellent revenues remaining our revenues our fourth million release, very and revenues. $XX team net indicated As income we proud billion $XXX our in their of the In gross company on and diluted income or to news was strong quarter, achieved of diluted or customers

our freight In our driven absorption industry body ratio XXX%, our by parts, the company by revenues service billion, were strong a was the positively Our strategic widespread initiatives and economy. $X.X impacted activity, were along shop record. annual annual and aftermarket, robust and results demand with

all-makes XX.X% our compared and parts, Approximately growth of initiatives, increased revenues half in additional expanded services. by technicians network driven to hours especially aftermarket this service our increase locations, increased Our was annual XXXX. new aftermarket by and of parts

other we expect resulted in and of remain for slow solid anticipate XXXX. services and The Though service we industry's to service parts the strong in wide activity growth slightly aftermarket pace XXXX the the markets that from parts demand XXXX, compared market half from in will we support. to

next to our expect industry to we in initiatives solutions plan However, to strategic as implement software customer-facing this we in enable outpace and we XXXX continue to people and to that us year. aftermarket invest technology continue certain out roll the

XXXX, XX% of Class Turning U.S. sold to previous truck total market. year trucks, new In we X XX,XXX up X.X% sales. now from the the and

positively market all activity Our a impacted segments. throughout healthy truck by the sales economy were country and in

proud history. the fourth truck currently XXXX be of the XXXX. X ACT pace retail in believe of While XXXX. quarter of second purchases, company's in timing sales in remain sales the our our market which decreased will half from the Research we forecasts to XXX,XXX our Class first maintain We last was especially half our U.S. to of strongest the quarter, performance, due share year, somewhat of truck sales

monitor closely in cancellations Class will will pace with on sales market expect we conditions, new the X We our truck and XXXX. other be and industry

reached and X-X U.S. of new monitor XX.X% truck and to our the continue the will X% in units, truck decreased rates we year-over-year, market accounted is medium-duty, extended XX.X% new truck flat resulting and believe freight on trucks of used Our for times We freight demand. the our up in year orders. In truck but XXXX, could used XX,XXX believe appropriately year-over-year, to in inventory used supply sales increased put freight and or rates market. increase solid sales positioned rates values truck delivery pressure support used next for from an Class

inventory Our sales performance customer X-X year, needs outpaced medium-duty ACT our to our and XXX,XXX units company this focus nationwide due was to a work-ready be XXXX. X.X% medium-duty this with up Class on forecasts from year, meeting retail U.S. the sales of significantly market record trucks. Research

medium-duty our market will strong, the the area our beginning continued the In X-X customers company sales believe new of market XXXX with trucks be we Class consistent the nine will expect the ability due to We remain added growth, support network of XXXX. locations and across to since in Rush the growth in our country. our results and

their impressive We payroll your questions. in to our sequentially recognize to increases our administrative expect is It strategic in employees all due customers ongoing benefits quarter our I'll to important XXXX, to that I expenses be due and is It achieve our work strong for of and in taxes. employee dedication general that, financial this we long-term our were XXXX. seasonal results take to normal their higher such and the able With that last initiatives year. first

Operator

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

Your line open. is

Jamie Cook

things Hi, think expect about thinking back just earnings good assuming Rusty, like in I'm downturn I about it the XXXX, there specifically, half the to happens whether we your to market, trying resilience. 'XX in about your is thinking And to of just be helpful Rush view concerns XXXX? what quarter. then truck understand just, should out morning. in the deteriorate or of cycle, the just Nice guess, would given the

how do then a parts structurally also the SG&A ability grow you. investments about of that think business, with downturn? some making? the So we higher And of you're to assuming sort is your Thank

Rusty Rush

Sure.

from of for the you looked I see much see believe solid, the of I've the me same start four in said some about XX of back doesn't rest I there, market, beginning, year moving first I'm trucks back still I'll it's my full years, as we to few got smooth doing mean freight believe out. year, the backlogs pretty you the the been you and the time, key solid can't if rates for year. orders but in here. we At when to the get everybody new one, half take come out not, given this a You and this now. there, start, XX, is the watching now, right back in start, that's and view half and So Let's If to guess and aren't I does in the miss perspective. of at bet, are eye always hidden try stuff to in year, the questions an the to release, from it Jamie. moving the out indicators, But or going half in I you? truck don't let's Well, Over right? contract year right? three a right have what I everything about obviously,

typically while different. truck remained year. a Let's the strong if the now, totally history change amazed asleep me truck look you'd I asked and to you're not third at used thought I'd throughout that same fall ago timing third the very the values. used time, resilient At and the very to on from be got happy to year. right quarter, can fact watch always say, wrong They was values. last be am itself doesn't we year going I I going to quarter,

more marketplace. getting into trucks are used the You

that be to not I'm I've to You've over middle going you has takes supply and be not of I'm used give you But oversupply stronger, an do now trucks. summer, saying remained to saying and not there I'm the selling used it got this some this new. at will I eventually the when from that missed It that to when get, know demand you're of valuation time, but month the happens, many last build time. obviously, have it's We of or just truck perspective. will obviously law believe a inventory will year and believe

While of there's replacements. still there is growth inside a of lot this,

the at a replacement lot of So same time. going on

clicking XX,XXX then and when rates at to times, too month. watching cancellation So, times get sometimes you're fall, everything were along that nine out, a extended double you had long, that in we haven't and sure that, ordered that like things to make months. lead way the because units like is out solid, and people XX lead just extended Those what watching

all the it always listen I to ACT pay cognizant. those don't, But one-off close use, that just look you moment that of time. at always to attention most trigger, when but be have indicators watching the that's fine, being year report sure market. going all the and at at and I that report, this can sure the you are I the to tell it. XXXX is nothing year. the that's going to around but out you to At the back watch solid to make nothing can see you're moment other XXXX over. And So trip on through I not same it, We're time, know there, be do that that you we're the We're was when half got people to top watching, of always time going watch. everything solid. that while, if that are watching on be, that, you a and you eventually will into make we've this you think looks frame, cognizant I'll why to my right? take now, it's get the have folks, estimates that say but right be you running been to and to but that So I to XX%,

invest. of if are service. row before, had know rates we? continue it to is, how's growth we've a where I lot whatever ever double-digit We're that? our eight quarters how and we've resilient parts on heck extremely happy. in We resilient a been don't A or it's Secondly, more

I we're made, surface to to same from get the investments growing investments job that the when of we're results starting because a in investments perspective, because little my comes or putting company we're Now, put spend the the the right results got you, more, ones at I've absorption and we're keeping just doing a making. that on while up heck later, top bringing to a the we've from to the a lot line scratch a getting that and believe money And now, inching tell we're to it to perspective. still of to spending in had we're we've the time, there,

I you all chicken be very, if with egg, for growth. make working an keep growth just just I downstream can I So obviously, market keep look pleased yes, market. these I'm get and but to from Everybody Well, the all know eventually it where not and initiatives, at But we're I with a want our investments markets and more can, will tell we our are our investments. and to that will get, drive not we in at us. keeping it's to numbers, more, drives what see to focus of we're we driven, further a investments the have is, growth. our some. to people, perspective little I driven see working. we very market-driven The I able and we and work want could continue there's as

And and capture more of a so that from goes. we're I about excited doing grows, to about feel Rush market regardless we're share. market the out where where perspective what goes, good go

Jamie Cook

Okay.

are like back in sounds impact I'm just seeing about guys, last parts get you energy you on could any deterioration? if how grow the the Thanks. just it XXXX, you're then And in you then still queue. it? my, summarizing So business I'll sorry, in And whether XXXX, think question, thinking

Rusty Rush

flat perspective Pretty had had weren't, of energy last in it 'XX at sales than with year, the in year put like wasn't all, okay, be quotes. there lot the didn't, truck you. moment, sales in We right our a more we in from a to honest before. XXXX, We

be So in I than of but when less 'XX of half because It don't the I service guidance. you partnered some, a it was country in strategic very 'XX year upon, partner to a would a continue those we parts the be continue sales look with to was given support was activity, long believe guys in there there something all we maybe, weren't. was to and perspective. of fortunate and at say from history or the energy don't we're substantially to have reputation and our areas blessed big that we're being, years, needed, where for truck and of There what 'XX, what were there perspective, are, and being lot the be to we of From or was years exactly. relied and customers course, know support

lucky be as as I XXXX. but very you huge think just and, quarters. high eight So right double-digit I been to to low go mean, don't XX%, 'XX, double or it right as shuffle may It that we change. that. XX%, going downturns we But to We've XX% quite the now, I or We see keep downside at flat anything. growth now single expect right? growth don't from see rate to real we don't in, perspective. big I in believe like close not could right able said because guess decide. continue a that it, through margin, circle want grow was, business? to keep pretty of It's very, I as get if And your can growth be a can of just so, it through growth back like when like rate, to want think rates Maybe ma'am, anything I parts for we borrowing. me we, do. not high to still double-digit we for regardless not you matter be of you to can still you it, that, to Yes, what's it

Jamie Cook

you. Thank get Okay. queue. I'll back in

Rusty Rush

You bet. Thank you ma'am.

Operator

you. Thank

next of Neil or from Our the line comment Buckingham Frohnapple question from comes Research.

is line open. Your

Neil Frohnapple

Hi. Rusty, called XXXX. growth you great Good congrats in in XXXX. on XX.X% technicians a the service and morning, gentlemen, out

last added experience point. this level productivity I the in and that quarter at you to of higher you only more a your XXXX hires you start one of have mentioned level you that a is benefit lot results think XXXX technicians in these or from two Will think? are

Rusty Rush

would the animal, say, as right. growing here's feeding technicians, okay. going the We're okay, going, still not We're I is stop it all to think I deal.

it put I same on, goes At to growth, technician have question, when think we comes we've ones the no be the up. we're got bigger still, that for with productivity to you. time, plans honest XXXX

replacing head we're So to ones and fives, those, going with we're twos, to okay. fours be and replacing threes be more rise and going to those ones twos and those be on to

XX.X%, that. the they'll same, learning through stopping as will think hours curve with Because, growth unworked long that. a and of that. same our also been XX growth. and up through stuff. again, like technicians we So, got that We've to that day, it we'll telling go the just training have question, at And got a through get parts mobile a no of yes, add returns will to the G&A hours inside others. not on, go and adding, the lot, those There's will many We're of get we continued yes, the the But productivity we're technicians we grow we're initiatives talk don't growth level because for unbilled And providing. we're continued We've believe some hours. just continued on go side and better, the got spending we'll locations. we support we on this the the ones on we're way grew embedded with our customer all and getting should ones need shops, guys get those long-term. a we've that's about I'm lot money with folks in sold But will you, better.

we've know I you, the time, So bottom higher we're feeding telling same still too. will better, yes, going ones to levels. productivity I'm added be the get At the

to know. up, grow end it, and continue the the will right? sword So the up, the of day, I absolute to returns There's But excuse don't a absolute me. dollars double-edged at go

Neil Frohnapple

was this then, increased is so, Got market hold the taking aftermarket from right. is all-makes Rusty, had from really if last starting That's Navistar dealerships are the when of on quarters? like experiencing some, And it. impact well? the activity the few And over All low this due helpful. or house as you initiatives to you out is years the come to parts you outside share that of their the still

Rusty Rush

from no, those I think we've don't, I still drag a got years.

first a then in there's, right? got XXXX. remember of right, prime just It's So market quarter we is We to back. I this, in now, just, years market that's still that started been, at, low That we're share, XXXX, Cummins quit ago You into we're six real what we share. low missing, and spot, if go are correctly, the went putting we what

took we six share, XXs, Then past XXs. but we're and years the had you So that. out market little XXs all a

six, on don't really your to you market you and little got trucks share. have seven-year-old So work a

there's from still So the It's no that, headwinds no, but question there's that just factor. coming, okay. a tailwinds timing are

the So OEMs the headwinds, we're growth gaining with proud going about doing extremely job. all we're from of on some had the a had from we market line. they're told extremely to perspective return long growth an Both I've keep of of believe, Navistar's that my the bottoms, us for you outstanding But their well excited side, in and Navistar bodes are slowly they're coming product spite we've long-term. the time, a share, which, for and

So, through say, while to because the get push market going I'm are initiatives, yes, we growth to we're their of our what own Peterbilt through coming it's we Navistar it's the on way side, less initiatives doing, most than But okay. still is we're their share up. on the coming side, going know getting,

So still unfold, takes coming. cetera, in that things of et little the years. But marketplace for a couple those under cetera, to warranty, a first that's are because et time tailwind

seven the returns, getting it vehicle. not getting You're typically six, a same that through get on you're four, years we five,

come, So and continue growth so get on on we'll as that toward part's side rates have the up we we as and that unfolds. growth the house. that believe can that we're said, we inch I those side excited of rise try to And still to about to when the rates, that other

Neil Frohnapple

margin the in one, last XXXX. average new and was just then truck And above helpful. gross That's Okay. used

asking about guidance, we'll can but little moderation to trucks everyone's is mind it is keep a talk so standpoint, as in mean, safe to Not I for see anything there to else some bit 'XX? won't you give page, be strong? mean, Thanks. Just expectations as a mix likely Rusty? I used the on same from assume

Rusty Rush

Neil, I Sure. not anyway, Well, mind. guidance But don't that's it what don't is. know asking, I

Neil Frohnapple

I'd try. I thought

Rusty Rush

history work mind margins talking had used how had. about the it, of the start probably don't know That's me. know we've the don't maintain I would I used, company. know you I Okay. don't used I you and we maintain with let's you like ever you, how tell best in the backwards.

I said, being used that So would margins. expect

For exact down got to But is and normal of right down That's out now, used But being. you part or sometime. what good, tell compressed that's here road. still we I'm okay. and it that I they've [indiscernible] somewhat that just get month the time little still facts somewhere earlier the the okay not down the not got in we're at or truck hey, to, good would else, going anything to sit life, cycle, to will I'm my, statements it going I we're I but be said come line, the they just let time you good. okay. being, compressed a But, bit, know earlier, the of tell there, think they

when, prepared probably From believe margins got not but perspective, we'll dictate to promise I come have, exactly will and bit. for. be sure, a new Just we this, little that the truck that, a market should will down I'm you I've

half we year back down I And not a that it not be knowing, I the of of had we about and goes not the be totally just it the pragmatically, year right, strong expect, we've not toward, the half the because think would but guaranteeing looking some, year sure comp, margins. saying not think I strong demand. don't back got, of would

come decent, are to moment, the factors lots of the we'll we probably Well, half mentioned I we'll I year, slightly we, and talking to are confident as the to asking and year, And for I back there half I continue going First think our continue unfold. stuff booked, watch will see now anybody earlier, don't of XXXX. we pretty to just earlier said I, continue and lot feel the really out way margins through right be all where But through would hold but work watch this all is that at out. down, about together let's a say you're whole this the if me. XXXX thing

for said. Okay. volumes, volumes down be to I don't But I as look

of I I'm that half If the release, I half from was read it QX a it you The the the expect of be last delivered from mean, four last and breakout a my out we the differently lot year, jump year. as with comes but go looking the first Xs, months a it, X,XXX so, months, delivery say out a next multiply half to vehicle the the the to for believe quarter to we've ahead I of year going perspective. months Class in okay. perspective. have Valentine's broken Day. half said, five didn't to don't quarter now two, I will left fourth only the record and four got or probably units, like right by a same, from But us. what When I for four I of

got half. deliveries same had amount the forward, over There the Looking about half as we've the go. first back we you in of

Neil Frohnapple

Got it.

helpful. very Day, That's Rusty. Happy Valentines Okay.

Rusty Rush

QX probably. be don't and QX, dramatic more flat difference like a it It I expect Yes. between won't to little as be,

Neil Frohnapple

Okay. Great. All right. Thank you.

Operator

Thank you.

comes Our from question line comment Brad the from next Delco Stephens. of or

Brad Delco

morning. Good Rusty. Hi,

Rusty Rush

Hello, Brad.

Brad Delco

truck you the could think, of with your on I another I side. Could you the recent there U.S. Navistar think talk you the you've bring think you some Tom group, think organization what aftermarket probably probably that the making can what from and to it's group franchise? anything and investments But about and leverage been you acquisition, in obvious is success

Rusty Rush

we were fifth sure them? of very sure let's whole management an team turn to was they immediately customer a the strong an are will the light put obviously, top I'm me and they're time, and them. five, have, They work in them. we have there. team, impressed many largest acquisition, acquisition, or the okay, there'll me this a and crossovers. have that staying okay, it like a on over two, customers, we no benefits lot very At that some our to part typical equation. keys we an bring management team over something next or will strong into first not, But not to of the through switch, with off, it the that to that. start, the immediately comes while it. management country we They day when be that about us me time, At right, And stuff go customers can happening time. this time, it maintain Navistar strategic and that possibly roll the some our our, not Navistar of that And bringing investment, a time, But one. flip group the It's of same of to obviously got go se, of them will I at be be I'm our come an where this. group, it's our on because it's large, that's We, we believe practices lot forward we there, same that's it per them. question that. this them. forward. all out management year is is there's knows light that The excited over is not or investment, be with in not do will it as their trail try Well, are investment. they a an to up customers We're best into probably let because an and it's that But about there. it's At we we which will not it's base, of of And But all some given acquisition to switch extremely them some From bringing where time, time. our over

excited things they've So, there see largest only hi, is, to for proven group in as area, can of both the okay? Rush, I about they outstanding the roll And go we Navistar in Canadian be good an as It's forward, the Toronto sides organization. with we're it. dealer this

Brad Delco

touch and Okay. service again. That's parts I on to helpful. then And want side the

momentum would how and you You on outperformance investments in what that sort momentum, be sort helpful that and talk the what's about you sort a do question. know lot is in how momentum your that the much I investments? of understand… of vague business, trying the left made, investments think I'm are 'XX, to you've of been building of describe to meaning what's it's some come and invested really a seeing where I of greatest just so and

Rusty Rush

That's and wave, right? and mean, our still there in? mean, and we've more I talked a I come we're very, see out, coming mentioned I ongoing just Am I'm well, be It's Brad excited. spending the to it's are I that, and Yes. in year an service, the I that the more that here. I introducing I where things the now, to release I where continues expect it It's building continuing, do build. about, stuff stuff we got in we'll mean, invested money? don't, I of some rolling back half expect

of So I we've things here And to later okay. timing ahead we'll this until myself. like to roll the that out stuff come it's that. some supposed there's out, I things in some on to next done. the main want some I'm get other forward, going of outside don't but commerce days spring, It's not going be some XX and announcing things certain, of in coming just stuff

XX seeing pleased I've So days seeing the been first year, we're numbers. the If of think. this far. I'm Look, so with numbers I we've opened good

Brad Delco

it me Let ask way. this

hours think service. of it's I the increasing So first time you we've reference a to seen your

you to and a in two that a in or there way 'XX, that year. point lap So the say, not later that could well, is until added going we're

we that's X-amount us kind what through, we added down that is asking? that break least going. the X driven of any to give at of of number it there should independent sort of see and way stores to to that momentum and So way, growth, I'm momentum or have continue carry we some Is

Rusty Rush

some extended tell of of it didn't comes all-makes winner. Well, the had lot and they while lot I okay. didn't during them you in click and happen to them when all-makes. of we're and Xst January until stores January, all-makes of A a about 'XX, of hours talked can service, we we till Xst a of just,

understand, metamorphosis are all-makes and it's just been orders okay. it change okay. Our and people for years. same and truly because getting just being your XX folks guys, way a, because after starting people, a they've taking all three dealer don't of proprietary parts it out becoming stuff. it, We're really a the just selling This to two typical see We're at is We've for years better and and you years. just go done

in and train your come You people.

go do, because you and they're saying, to understanding been me it and is right, giving little the out years, giving takes what work. going data. them Just this doing are for takes XX It me it they're a the they've one them and tools, they're way these and tell guys

truly got a and mark data and else's it little and believe time, proud our and years system As been go million, supposed now fired, it above comes doesn't very put three mean the At That million. to I I when that is same in XX was on okay. was, tell the we it's I customers of. be happy we go, XX everyone, was It anybody and I folks. we back, SAP eight let's should've it to the missed number. can understanding, propriety probably we're

we've or buy use got it's been last other. The is harnessing this a to it. two that it you And unless all you okay. anything data worth mean, not people then to just get the Now, and process. years, three the I over

I one the can't way, ago you we a the doing technicians this. answer talked thing and talked, with tell threes Neil, I to this what, twos. Well, where, going about can that, minute one like guess So turn fours. or to and one I exactly ones oh, they're

the both there some over service just sales and last but outside guys. consolidating, way, we've which will and along to and be things, pretty These turn two services added, ASRs implemented not going parts just they're course, fours. sales The things have guys, are the parts the all Of sales representatives are threes to are been parts years. attrition there and rapidly these all and they're on

when So one growing, talking same time, about? we to each raising doing it we're we Maybe these initiatives At I better to doubt in as just technologies. adults become we're I got believe to are. like you are showing know come I the it's on know there, we forward. exact said, numbers that there different And customer-facing have giving that I'm is every go in there the we've the wrong, I world child. just not believe I'm but numbers. fruition. working, it's comes to all believe it's a kind going things confidence stuff what they're other like will it. legs pipeline in of strategic going I these like as And initiatives the You all that, and because of the we're and get and

than outpace what market the if regardless continue to we're better does, Forget get to the going and goes okay. that we're is going market, it We We're is parts do share. it what to market service you're over means to going the outpace goal, stays going does, don't goes which market. market, our okay. it, And the to is market. a I get backward, share, care more time, to flat, the more of believe up,

roll for I XX seen. or believe I not as my here passion you I exact but days we're, of. hear know January I've And an into been going you this and of proud this year, XX as what the can have great February days first there, think I and of I'm is So

quarter my where last up if go. at don't and go I'm and answering Now the questions quarter here me, year, of the if I'm performance go first given look myself, making They jump benefit out the packages high-expense always stuff. out, for a that the but you you we way especially sequentially, organization, pretty I know that, guys and good you me. said, it's being know remember, before own in back

Okay.

in I works. million That's you it be G&A. last up the $XX QX But of we're man. okay, think to million from That's going if years, to how about probably million that look part I we're to $XX to But of growth, expect sequentially that's here. couple back continue. typically QX. $XX

and profits the working, are then customer, I gross more said, the man. revenues customers customers, moving if and it's and the getting getting As more forward we're

Brad Delco

and you just 'XX And in thinking to in I anything Appreciate flow XXXX, truck could. bring of we'd there about? then margins? was quick, that. Can be And Steve the just unique real unique the or on sort free to anything us if to give your thoughts cash 'XX cadence of

Steve Keller

XX.X%. margin Okay. X.X%, the I'll and Brad. answer first, medium-duty margins X.X%, quarter, were was were X% was light-duty used In heavy-duty question your

flow, depreciation it flow In of for us with did our in bonus and helped lot from liabilities change paid people fleet deferred But 'XX. in EPS, tax bottom leased perspective, cash Q, line. no, tax to some do, there reform. unusual in I was really didn't cash nothing mean XXXX. It questions reform, that because was about the our and a of the much taxes A terms we cash related our but tax windfall of help there and of things all give no

be should replica pretty 'XX of 'XX. So good a

QX QX quarter released, in the we and the cash us up bonuses. saw repurchase if Now, reasons. have in few and we tough in is acquisition you really flow We, the just QX. we amped paid quarter that release, a for it's for continued And the a we

number. going that's some stress to on is, that cash So put the

QX. fine. But it we're QX versus saw in fall pretty You precipitously

to We have plenty the of cash business. day-to-day run

XXXX, should And a have a line pretty Rush. see free dust settles the you when never flow tapped. We we've strong for year on cash

Brad Delco

I'll get back time. for All the in it. right, Thanks queue. Appreciate guys.

Operator

you. Thank

or Our Faheem line comes comment from of the Sabeiha from Longbow next question Research.

is open. line Your

Faheem Sabeiha

Rusty, great guys, with Class to I Hi. for Good that mean, sales on be, sales year-over-year? to I sales. But the XXXX, outlook falling significantly guess, second mean, half off at does that the for that looking second going quarter. I sales said are morning, can you be on a going half I X congrats 'XX. I start if wondered are par the imply and first half with

Rusty Rush

now, Well, to remember, just are XXX XX not, We as say and would I'm you're I out. I they're that. as while to days not I'll tell right solid a backlogs say, of always folks, feel, going walk always I that that days the want don't XX or say are know historical at cognizant happened, this and just we see but XXX can that over things truck, don't cancel people it out. moment, of it, I okay. strong,

many in. here to watching truck eventually, always, say and hard not why that cycles I As am that's going I going mentioned, service. say these to we're focus on so indicators. What happen we by there's be to That's do to any stretch. I'm here parts

ride will spot what's eventually, Everything contractual down. are So strong. truck I the buyers, do record as used through we'll earlier, cancellations, happening is to But marketplace, levels, I and don't it. we they are Manufacturers of cognizant theirs, currently. see it markets right. continue building on new be at went rates,

I can what maybe than about to going the And QX. So keep get half don't what those are, out to will to let's that always give, closer more that's be, on give indicator than next I'll their then working in will I different it. anything, to to half can don't business see an second same. the will the got I perception But okay. it, solid Not there it, what be QX I'm of whole that close of say change are their it, But that the was am business predict year. be, it's I we mitigate believe not cognizant that call, people's circumstances watch. it I'll you, or I and first we if here currently, any to be to through but is know, the just able there now be more and

be years this. given saying. will will I'm all That's So solid doing XX-XX everything. I right But be of all. with now, That's I'm very watching, calm. I

mean, I it and we'll feel I about watching. all. That's be good So

Faheem Sabeiha

used given how to of is guess industry what in your And pressure industry on that regarding you're truck magnitude become anticipating decline your sales? are that just comments guess happen, what are before seeing the where history used Okay. values if you I in the were trucks year, a the of I prices decline given a can much your headwind absorb backlog view your and this of to

Rusty Rush

point, quick, first be, that tell Well, it'll inflection on we've used when truck gradually out one been. of box a it's don't turn that that like a you that. long they the you've step when turn time, they they hit values, is step. they It'll okay. continue high been big down, When but I typically turn, a when turn, quickly, over of those, you will

way, Doesn't happen seen in historically this a can it one step but past. that it'll have I've happen happen in can It XX% that can happen. seen that You it I've the way. month. time it mean way.

don't We the They're XX to marketplace. supply the but quarterly, you again, eye do not because this values That our a there on, okay, the but There's have have It's wary the supply, I'm you. that on weekly, of pretty more I the levels. a at it a that slightly drive dramatically, basis ago, year, and say far inventories the believe review you tell used up. somewhat is, That not depends type going is inventory the from truck right? somewhat to while. monthly, not if they moment, around were, supply watching then truck be in and It going demand, are, do. up up, daily months watching and will to out what that of XX good supply used but done so I've a here, in again. certain okay, So, say, of dictate days confident trend deals our not down. is will first law given, demand. anything been what of will on It what to and hit the decrease bad

trades bigger with You got and trades some have ahead, deals more a on some don't. Well, deals that more packages got couple we them.

basis, inventory them moving I'm we're with, them you're a turning out that adjust we the where to our because used release about valuation we comfortable and or be to inventory and degradation have weekly, you're turning now. quarterly you where it. really how not, to watch if your We're on months that's Now three moving okay. you turn indicators inventory, to need But need review going your right monthly, daily, truck it, key inside

to of inventories, sure be honest make and on quarterly inside never our all we our with marked-to-market, very inventories You go you. closely look but they're at out, a that basis

Faheem Sabeiha

Okay. is parts I year, mean, high low double-digits it to your single-digits And in regards service and this outlook, to

Rusty Rush

just up having hearing I'm you. speak you a little Can time a hard bit?

Faheem Sabeiha

you Can me sorry. hear I'm better?

Rusty Rush

There you go. Yes, sir.

Faheem Sabeiha

Yes. Okay.

XXXX, So given is service mean, in your just outgrowth say coming it parts digits, high and is this regards outlook single increasing that I down? growth fair to outlook is versus digits low of to year, your double market that the

Rusty Rush

Will at me X% XX.X%, market. We market, we to is pretty what I don't it spread the know, last ask heard I think was X% the markets you overall looked year, more, over be doubling our I up much it. were

I same. think it'd be around the somewhere

if with that continue first market market hope to hoping you're X%, this to But to fourth mind the truck I'll is. into going in. quarter it. hope could in our we no again, the question double in be up I to there's sort to XX% that. growth When be I and we're see you that up growing it the and It's honest And we X% to pretty XX% roll market's have, big you. continue to we're XX%, hard rates, then would comps up goes for down. market. start the double, if me have I watch off and with I'm and So we're up to to would like XX% to we'll going strong. okay. a just is My kicked like going year, to, the all the to quarter. we're digits we're initiatives expect year, up continue whatever first of X% continue, quarter, less, in But out XX%, my something see I'd be If the if third

they for years. continue people my And our last Somewhere the in that amaze, continue get have tough, two I surprise taking they're range, out and answer continue producing and that them, path. we growth more that the really, share forward provided look we've and for the there continuing of because them don't slowing is investments what I advantage to taking least. and it advantage to to at them. to now. respect get, of people as they're I and can't taking made they're training and get They're we've all our question, their to share. right see And they're change been, going down down, your to we're same That a I I getting market. and comes out market, When to goal. going the But where the us for comps

Faheem Sabeiha

Thanks, All the color. guys. right. Appreciate

Rusty Rush

You bet.

Operator

you. Thank

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

Your line is open.

Mike Baudendistel

Thank you. Hi, guys.

X wanted XXXX. talked declining Just you about sales to ask Class in you, truck in share market the

we are rebound with think get XXXX? higher all I why in the expecting a you mean, I fleet sales.

Rusty Rush

half. year. second Well, if I'm going half half, first first I the I How have, the of in to expect the half, is Because share second watch had larger that? last I a

the in what would do in tell okay. first first share the better I anticipate little units. in being sold year, bit we not second if we first, you we half that would we you Of half mistaken. X,XXX last about of of the And I if sold X,XXX year, X,XXX, of we I'm If year, delivered the year, half around get the the remember, then the what a

may The X% unfold. hope of second to X%, X% continue back I'm year, we whatever not be mean, half hoping to the, than how's would what dramatic, closer a hoping It to on will the to I'm had that? year. that we or I to better overall. and share I'm number get planning a was get better get I yes, share, last I'm hoping, but it,

Mike Baudendistel

it. Got

Sounds good.

ask investments in on Canada. the wanted to you Just

larger about lower level strategy part Canada of Navistar your profitability Peterbilt mean, the than can is you locations locations talked in a compare the the locations? of I that being Canada? those locations. Navistar always sort investment existing with profitability And of You a in

Rusty Rush

that? we closed half back I'm I'm evolve going will your to question and about That how's up get, will even going deal growth there. haven't Well, as to talk yet. the forward, the that I really not just, not go of take

weeks, week we we got So I a wire where money. two let's, don't, and a half

once have done actually that do let's it. So we

answer question, I your growing, answer, Secondly, tell first and ours you to okay. would to similar

I grow brand grown in that investments Just of forward, 'XX, product tough theirs-their 'XX with has of and and headed. grown returns continue went the the 'XX, going expect and have they've both made think to 'XX, like it's them the times through we 'XX, to we and ours the XXXX, in given where

going At the everybody, that a more the means to Again, So to thing. which ours, be market's and right. to to same coming should they're if to share, do have time, we they lot from same very expect customers, grow. means makes, which share doing continue with out-advance growing, their continue gaining market, similar the grow the we levels, should to because

under, market will to we to in aspects just see that's, starting some to growth. sides of thing above-market above-market sometimes runway Even rate told in the we on it you've outpace gain way and be So mind, we that's I've the expect inside 'XX all outside been that and and numbers saw all hidden see theirs people the strength, growth the numbers of the nice And in about, always right. business. market my ours been organization. And the though it's

the business you coming but product parts start they've the Excited but of should will it seeing that I honestly, better fit And lagging, really their year, growing, out, nicely out. the little given that's is and got years, of a the CV have couple that kick going right? is going, business, gear, so right? this next where benefits last the some I think should share, service in late, invest all market X-X segment. Ford, mile see Now, I our medium-duty I new we're it about to well but and brands you on that all still into business. much getting especially share product into we're believe that business, and it and to effect we Toronto, in that brands, as we think go the grow that in Navistar too. the need people look, When try Peterbilt forward. pretty show in more And whether Hino, the to really going continue that we stable be forward the I continuing think pay look attention Isuzu, continue X-X that big side, to to to what the to And forward, in growth it side, to we're of that as share

Mike Baudendistel

how of, sort done? that I can the how how you wanted one to Got at parts it makes just strikes you there. a lot on the a you and to the a That number or were at of can is there stronger very mean, ask contextualize have? it. is people much people the people I and XXXX, pace? And also similar mean, did revenue much the work that I add business. demand is if main great rate grew of just a more versus to sense. in mean, services another sort you to constraint, the part continue wanted sort the that people, you adding of added of you be me job really of to And is much runway double-digit

Rusty Rush

of the plenty the of this we the believe market. runway. of started Hi, is parts we we When there were less versus market, on we project, X% parts than said X%

to is goal Our get X%. over

So nowhere near that. we're

that sales right, With business line and we'll am the across bit Yes. with investments we running in, have would I spend share business get invest. to the plenty continue little we numbers. runway like, dollars I I sell investing. average, you that. top How? always drive Because those our the made growing add to but there's get I was I see if adding to up technicians? we've this will through normal representatives, going go returns, same that's XX% to because Probably, the throughput our and better continue runway, what, my those goal of Are normal still keep a sales got understanding numbers, is board. returns, better than keep little But we the continue gain sorts maybe technology, feel to growth, for want the and to just know in we're plenty also in slower why the to status growing, but believe to representatives required? toward work band, become, if do to I Yes. where So more to spend I about are not going a and quo, up. them but in continue talk we out and customer-facing have service so we we Hi, than is absolute normally look, can the more. and to But still Again, of the you at we're all-makes

now, growing. five right that, put out because right That's X% we If that out. market and grow anticipate And at to grow but dollars or you does. all get matter the I technicians can't we're what I so years. add to superwidening can stopping XX% But to and so, stop, think that do there's you for do no top still our got big, a we've to no now, that for and over the chasing constantly that flattening and, the don't can line that continue to moment, math, we absolute absorption it's what slightly does rate,

continue going see out little we've when somewhat not out we're stop. biggest still. and But it we'll on, answering near bit, weighed the to it getting I'm a like nowhere repetitive hope that here. slowed make side, not sometimes with stop the markets and I We're of growing we've the path maximum. I got of we're returns the what but there our going it's regardless been on your we a do yes, continue I we're network stuff think we've So question. down feel And to parts down to service out going I'm Remember, we're investing reached maximum network. investments. the that believing And until little

So a that is that key, and piece. customer network leverage that's and touch

You're leveraging.

and slightly, going parts you're stores. and Most of you're going growth network but Yes, services. existing You're pushing revenue, leveraging through more our guys. your is truly, really

had proficiencies efficiencies And to a leverage. those But but so continue some we we're continue act to between the along that's we drive a try And keeping way. spend to money, balancing and we and as little we're forward. to Yes, going growth. go

going moment, to call, can And to tell the conference the so to sorry, you pace stop that. I'm never have so go at I earnings way, quarter when get my the by I it. right not do And I always your you fourth we're growth

for So I that. apologize

Mike Baudendistel

I you We fine. some that's understand. time, understand. can it Yes. make Hopefully, but

Rusty Rush

say. I want right want at speak conference to I my to to just your earnings But call. now over QX always it seems lap

Mike Baudendistel

and for and that, year these Well, year. thanks questions, answering saying great for thanks last

Rusty Rush

forward We my this one to next year better I should look friend. Thank a you, or say. year

Operator

[Operator you. from Tiss next Our Thank Joel question of Instructions] comment Capital or Markets. BMO the from comes line

open. is line Your

Joel Tiss

How Hi, is it guys. going?

Rusty Rush

about Hanging in yourself? there, Joe. How

Joel Tiss

is fourth right. time Being to All a it's good Valentine's get that time? divorced it the Day, for

Rusty Rush

that? Joe, say did you just

Joel Tiss

No. things. We're hearing

Rusty Rush

Oh my paybacks goodness gracious. know you are Joe, what.

Okay.

Joel Tiss

bit. a I little missed

Rusty Rush

can earnings Listen you I tell that. calls, these to

Joel Tiss

I'm listening. sure not is she

Rusty Rush

by way, it the three would And only be times.

Okay.

Joel Tiss

of ahead getting Okay. myself. I'm

Rusty Rush

be fourth we how's Fourth Okay, when would remarried, marriage, go that? that? It how's ahead.

Joel Tiss

the if go. is Okay. you how There landscape looking about there? you I wonder and talked at all acquisitions

Rusty Rush

It's there. a deal. up Well, $XXX about investment in pretty an big revenue Canada. we million That's did

investment It a Group try sense. separated given nice little and in some the now four just other one, we it, but sides house. I'm of, building, limited. but looking, to had both in I side, to with, thin makes goes Northern This Class a mean, on how's California. to right. to and a with get little continue at OEMs we're release, makes The commitments this pairing somewhat closed starts things. commercial think, We sense, layer the hadn't that of every X the about I'll certain acquisitions, We in places keep that, was Thalmann them the that then my really little I on nice where press proud we're it up four the there, up that, mentioned do we're to excited it's always I done in math we while.

always, make could You're up we're looking, you the I constantly sense. always myself. to guess But has always come but help I'm and visit can't I looking, and just I it to northeast guys, talking, no,

Joel Tiss

wonder… I

Rusty Rush

peak market. at You to we're remember, got

should the market So most down taking until turns. sell to of [indiscernible] want people peak market, at but people a keep lot times, probably just

watch we'll to So continue just closely.

Joel Tiss

you little if all a explain you're like place Like had what, wonder what is it like I what could XXXX? I the thought parts better for everything for And in you in software how putting together business, fits I'm... kind of

Rusty Rush

no? about How

Joel Tiss

backup a have too. I question

of have don't from that some that's if sort dealers to going You truth you to wondered there the the cancellations was, just heard last that's get that talks? lead the we as into or of November, there's think October, some to guy a And rumblings orders half I negative I a the of in customers. from than second that. and lot answer like lot in it of more December was were more year

Rusty Rush

heard Joe, the I same rumblings.

don't of Speaking do people to for No, no, At it past time, do lot some again. of do a put okay, the put myself, [indiscernible] it answer that the understanding maybe either some I of that? past other I the we volume. is same

We and allow we, because no, outlier about OEMs own All double of because can't and what So this But have rumblings, our will did what my concerned our the get believe same did person ordering speak but person don't really really I sit I they yes, an I most, is they of all order But here any. to it of lead there not heresy. is stuff this heard the here say say, sure the there. and happened, customers that was can miss organization, that's was to have times don't we in try board I believe on and they're talk I be that any. pinpoint My that. just might rest out not pretty to. solid. can I've and that. The

from my heresy, else's, from it's anybody perspective, no; just So, buddy.

Joel Tiss

so much. you Well, right. awesome. that's All Thank

Rusty Rush

Hi, Joe.

said, said okay. Like to like wife about my my I I remember call. listen paybacks, forcing Just to earnings

How's rest for married the that? our happily of are We lives.

Joel Tiss

figure some I good. That's shoes anyway. she's probably buying something new or out

Rusty Rush

Yes.

funny. You're

Joel Tiss

All you. right. Thank

Rusty Rush

Joe. humor, like I [indiscernible]

could've it not have that you someone with appreciated So much. done they might as else,

Joel Tiss

Yes, exactly.

Operator

like to remarks. in the showing questions queue Thank time. additional over Sir, at you. to this it no for I'd back closing any I'm you turn

Rusty Rush

April. and two now talk just time You short bet. be again attention about this report frame we to we can obviously, Well, before to when you results. you QX And a time talk again, Really from morning. it'll your in folks, appreciate when months we we

a So, support new thank XXXX. your have soon. for forward you great you Bye-bye. much look hope See you to, year, and great very a

Operator

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

have Everyone, You disconnect. now day. wonderful a may

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