Rush Enterprises (RUSHA) 28 Jul 192019 Q2 Earnings call transcript

Company Profile

Participants

Rusty Rush	Chairman, President and CEO
Steve Keller	CFO
Justin Long	Stephens
Neil Frohnapple	Buckingham Research
Jamie Cook	Credit Suisse
Andrew Obin	Bank of America Merrill Lynch
Joel Tiss	BMO

Call transcript

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Operator

Good day, ladies and gentlemen, thank you for standing by, and welcome to the Rush Enterprises Inc.

Second Quarter 2019 Earnings Results Conference Call. [Operator instructions] As a reminder, this conference may be recorded.

At this time, I would like to turn the conference call over to Mr. Rusty Rush, Chairman, CEO and President.

begin. may You

Rusty Rush

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

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

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

Steve Keller

may the these we Reform results Act Litigation will considered materially statements Certain our Securities risks differ today statements uncertainties, forward-looking statements expressed by XXXX. Because those Private are make as include and defined or in forward-looking such from of actual implied statements.

XX-K could Securities results those the or to, include, and XX, December Important the cause factors in year those forward-looking are from but differ discussed expressed in that other ended by statements for such filings and actual with Form XXXX Exchange to our limited materially our annual not Commission. implied on report

Rusty Rush

As or results We're market X-X stated sales billion this Class release, aftermarket income and $X.X both news financial by our was net of quarter, outpacing an the achieved initiatives, healthy Class overall per economy. our for of X revenues performance which $X.XX new positively we quarterly in and proud of our impacted $XX.X from truck diluted million and U.S. very share.

cash pleased quarters. common quarterly again X% We're to $X.XX the declare last four dividend per increase time this another share over or an

revenues were XXXX. million, industry while of aftermarket, $XXX demand increased body marginally, up the shop service X% In second parts, over our up quarter the and

X% Our our absorption aftermarket and ratio year-over-year, XXX.X%. up gross remains was strong, profit

take our data and initiatives, strategic analytics, was e-commerce parts sales in availability, opportunity growth parts this parts advantage quarter especially every our aftermarket by Our platform. of driven which help us traction expanded directly

of second in sector softness offerings demand service rate quarter energy add continued given half and We the our aftermarket our believe service energy aftermarket -- technicians in enhanced activity. the and to was slower performance continued to growth strong, industry our network. especially also efforts sector We and

continue believe to with aftermarket quarter demand, monitor will rest but initiatives, execution our industry aftermarket we with for our year will the successful strategic consistent performance. the We results remain second of our of

to X.X% and total sold X We the Class U.S. XX% for market. sales. accounting now X,XXX X trucks, of year-over-year Class up Turning truck new

sales sales driven fleet widespread quarter. country, in remain Our strong growth our by large believe across the with particularly truck on quarter the third was and performance activity the and we deliveries, pace vocational will second

units currently forecast XXXX. sales X Research XXX,XXX be to ACT U.S. retail in Class

X have is the However, there Class orders the in decreased past and few significantly months. excess market, capacity in

sales could As year. a quarter Class result, this fourth as early X as truck begin decline of to the

due In of sales sales a up customers. Research robust This medium-duty, market. nationwide sales X,XXX truck X-X for trucks us U.S. Class year, strong was from X.X% forecasts construction this to units in ability to inventory to the demand for ACT retail XXX,XXX provide the Class our units reached and from truck be medium-duty ready-to-roll and of a new U.S. XXXX. X.X% rental quarter accounted record-setting and our X-X

trucks X-X will through Class XXXX. remain our We sales healthy rest expect of the

achieve for to hard to customers, such management lease the is express to over oversupply my the were fleet costs second That their revenues demand, market. helped lease due pressure second into we us our the its of dedication face would of increased inventory to by used quarter. of of and XXXX. coming values due sales of company appropriately work quarter market. fleet the the continued lease quarter beginning to model. primarily positioned of employees our X% to to our to XXXX truck I The rental compared its and truck healthy which believe execution gratitude used the Our operating service strong in a XXXX, and like Used up to truck used X.X% second trucks are quarter said, support

your With questions. that, I'll take

Operator

coming [Operator question the of Instructions] Stephens. Our first line from from Justin Long

Justin Long

on Congrats the quarter.

to were parts up last points service much be we about how basis quarter. XXX with as going you they forward. get margins gross you view wanted time? how Can I strong, we maybe sense and one that what from margins, service about gross start So and talk to saw parts improvement just for should of a modeling

Rusty Rush

years. some we've you X. a margins know, to in, last continue I to margin record X.X, the talking years you can't I expect do QX. X seen I last we the that would to probably about that last I don't remain last I tell over would X been I X, quite for increase, last our as strong. do the years, of expect as X.X haven't right, or in steadily X expect, you X.X Well, initiatives margins given year so, have remember, not the seen over But Sure. over years. tell it margins investment they the in was or the have grow years

that from ramping the over last been of pace in We've to continue it more margins will for year on extremely to we're mix saw, QX, I but growing expect more, be continue to of we I quarter. should board. maybe up. in quarter. as improvement grow you But and back a what do we just, going believe But QX go A over had ramping expecting as QX, lot across steadily things up and we QX, start there. steady other the QX. the to strong with maybe do to it of we getting to continue had now strong to say, not some see And were quite an margin margins on that

Justin Long

that you've and we of bit Okay. you talk view service then if today? even Class about and the and about. energy we came about stay how on units on That X%. parts Can can think a your from service was what's high-single growth? revenue get digits parts still the headwind Rusty, much then Great. see around you talked year, XXX,XXX in X below where next is into up markets digits And about the And it Do a look to high-single energy saw little sales market? as we you

Rusty Rush

we I the proud Yes, let, things I'm am, a, the most is the faced energy truly energy of, the think can. is had headwinds of market Obviously, in sector. I one absolutely, we fact, the

probably a XX% the our year-over-year energy XX% we If business you business best can customers, about downturn of year-over-year, to for XX%, sector. when and the in off the was the business, it combined look at across go it segment was so we service parts off energy

that. was me given to number X% that So outstanding

the down 'XX. years we go of to 'XX and ago, or saw barrel, to, X $XX about X below a think everybody back shut energy end at years, go to organization, big back remembers. you everything back was or got to the say, hit, through the We If XXXX, when down

well could QX, we performed as as did have compared the we ever the we that business given have We business model model never then now. in to had

proud over strategy we all really organization mean put it given the we in the of the I'm network and the implementation for the the effectiveness the did results producing just of years. tools of those the diversification and that so couple Now, of shows across last headwinds. I

hope having get there stretch my out far of my your side on back high I are market right a back when back it's to can you're high you of believe X and of margin we numbers where going already next already less there's XXX believe and can right? U.S. get Even get because mean do single. sales. arrive I spite right? you're there, and at to So we to that's forward, in not right, you're singles, believe would high be retail in can to headwinds I not were comps that's, singles the a energy Looking year, that a, that we'll business,

think I but to Some that's you want because we're think years, telling market, key results that line, the believe investing some see over just the we've my the investments, couple front haven't because can back don't I'm that And not to the digit continuing stopped to utilization get But that, the invest. business. high of things, full we to seen I in the single don't last still we that's and we've of people of it probably the seen G&A ends I you, of results the the in so, say think we reality.

that would believe, I yes. So we'll sure, call on like a sure we able I'd in but what be to, that, I able answer bet you I'm bet I wouldn't planning for high lot mean is something do be that. the somewhere like to X, believe between still that singles, life I yes, should it anyway. it, to my produce on

Justin Long

to hear. great Sure. I get it. That's

Rusty Rush

energy the get And a if of take bit business, would pickup in to it. able little we you back were

Justin Long

Yes.

business. it It that in assume So energy any is. pickup digits, just energy the assumes stays business high doesn't single where the it

Rusty Rush

comps, energy service willing numbers the wants threw because we're because down go we're can parts to from to or the would can we It any I tell a I the has which to. it that softened. not again, I you and sector, up yes, has than assume assume, sometimes at think, anybody I the now. take. knows it energy question, next we're no, any the and always But knows I If back X picks compared perspective But be as business said, hope more doesn't right or it where out. able to ready, ready famine it who but up year from down in did feast if didn't

Justin Long

the That's helpful. appreciate Great. I time. really

Rusty Rush

You bet, Justin.

anyway. You'd upgrade probably from an be Brad

Justin Long

about know don't I that.

Rusty Rush

Because this first is show. your

Justin Long

now. can You trucks him some sell

Rusty Rush

Thanks. Okay.

Operator

the Buckingham of next line from question Neil from Our coming Frohnapple Research.

Neil Frohnapple

a Congrats great on quarter.

X.X, follow-up a there. question Justin's mean Brad Just I on

more is XX% percentage range, to tied that what Just normal overall roughly? XX% in Is times, aftermarket energy? I just to it in of guess,

Rusty Rush

question. And, does, would right? take more a that, stores, answer a do all than West parts little it's But sometimes to XX% affects our service more And that's of around it. the the when Texas effects, we say, your stuff the it country, it than, going But a the of you yes, to I'm effect dramatically our give it other at has at we XX% but or over side go But points, the and yes, on a parts upfitting stores, that us. Obviously, service too. Texas parts it dramatically, good couple business, it a but of effect a of look around beyond the is, especially affects range effects swag. that, because it okay? side Yes. say

Neil Frohnapple

Okay.

aftermarket guys you double-digit basically had have would not So been... done growth

Rusty Rush

Yes.

have And For okay, at -- we'd at margins. best of sure, my abilities, right been that or double-digit we've the take a point. XX% give been mark, right

Neil Frohnapple

gears. Rusty. you year, X next just Obviously, then to Okay. mentioned And retail wanted switch Class XXX,XXX the

So...

Rusty Rush

yes. U.S.,

Neil Frohnapple

Yes.

just rate based you sales event you your some of guys do any X maybe are think that just to share higher to XX%, positioned through? the Class mix you on to and Navistar could growth talk mean if So are more XX% relative gains outperform -- can how year. vocational next coming industry industry I down you that

Rusty Rush

so. always Yes. believe No, like been I That's -- would performed best. to we've always

I -- XX in the the in big go flow XX, is back the X to you -- bit the years, of over-the-road robust where we a I little market of you've X%. Class huge XXX,XXX that market. X% back historically, our a two years. that's it's when you more seen U.S. If It's in in get comes more percentage And -- historically, it balanced go would years. to best percentage expect market the the -- when of not because, so why segments been our over get over-the-road different trucks there's market last we're market, goes back -- when -- you the about into behind know, go obviously,

do, or to so do market going approach perform Navistar always we we're we that very as some because to Navistar and some, the I'm sure very XX% on market, sales side hopefully, no, tailwinds have So five take to two, the hoping will a not all much you And share. help balanced side, of take somewhere. offset tailwind will maybe if be the of that up I'm hope mean tied they of one continue we I so but proud I and XX% Hopefully, -- there there that. we gain share. believe mean, right, hit. the segment, it just on won't our gaining be to pick the do be, market we're you could not -- because to take would XX% maybe other have share, or they're like we to one

softer our that overall be of retail in in both those things both tools favor So yourself, those will believe Neil, up -- of that we you year reasons environment. next a are brought

Neil Frohnapple

Okay. I Great. like last That's helpful. And one for just ask. Steve, one normally

margin the by truck you in gross quarter? could breakdown -- Just the provide

Steve Keller

X.X%. X.X%; is light, Heavy-duty medium-duty, Yes. X.X%; X.X%; used,

Operator

of with question Credit the And Suisse. Jamie line from coming our next Cook

Jamie Cook

you. have then last And my as do talk can sort with any thinking Nice quarter. talking context we're downturn we about some a of about Maybe the difference level to where about into sort you there Rusty. normal Thank this at are assuming can level? about couple with you XXXX trough Is of Two, visibility comfort thinking put the questions, OEs question, EPS One, and is the the you're sort I as just are relative because cycle you of the your of extended you just inventory your the dealer downturn? that? guess way I'm entering we forecasts can see or about aftermarket? a sits talk industry given and today it the Steve, right. just how

Rusty Rush

Jamie. Oh,

Jamie Cook

Rusty. Oh,

Rusty Rush

You will you give the EPS think I I say But not I'm going this, I'm... guidance. to know

Jamie Cook

my it not? or Is Is it consensus-crazy? That's question. consensus-crazy

Rusty Rush

What is that?

Jamie Cook

is consensus, consensus it Is the estimate reasonable?

Rusty Rush

little you. studied don't on a to them. with ... of 'XX honest most out I would Typically, honed say really haven't if really yet, there. know anybody's in Probably I bit be I

Steve Keller

I of know. the don't know even number top the I it? head, is don't What Jamie. even off my

Jamie Cook

for XXX? What, where It's X, estimate XXXX? like consensus is the at

Rusty Rush

XXXX strong if 'XX. units go the little if and last look XXX,XXX, sounds to stuff XXX,XXX talk in, look let's That you about also good And a let's the at was good okay? but the me, trough, at back, stuff. you is,

than I'm or let's something above Now better X believe one like market it to I going But you times not into I say much around time different off do. the above, one my it's for us. last there. big head, were those was was I feel target going around remember of if Those X. that? is, think, are the years X XXX, XXX,XXX. Do right, I'm better that You tell a XXX top going what just my was but I and this

that, type at okay, more market target's get rest lot like with our our assured than of you you a you market. that, So look can performance, a that

given, to and if I know is The get around there's what, that's am, it leave for what like my said, that's Steve year tell it's get my don't so be. get haven't to that. year, I'll that. around and Canada, to sounds XX-something-thousand, X have trying like units next around Because I'm anybody. than North paid what X XXX, So still in I I'd to I'm at don't I arms arms is. attention trying the months, going I say, I up last in XX,XXX smarter consensus a, do much to annualize next else to because It everybody well, believe America,

You XXX, to don't get right?

folks. now. I XXX backlog. up, just That's XXX So last that's we're XXX something up When to was facts. backlog, we've why October. been over something and down chewing mean say It I the

once know I we get okay? whole remember you the year, look can But lot the I'm were out think, November, think orders a there. year to I on next out. better I if we so because But have kicking So far last

You intake summer people right? the in that's summer, that had a order taking summer was, slots. were doldrums, the usually But

you set. through, got you we of I'm But and people Because, I putting telling like had before. usually, that. have. into December know got by didn't By to got and summer believe ever I to slots pickup we're where us you at time, things, that the October, all last customers have a on. than they're more tell you you going October, never what orders lot year, be. the you with especially that's they've and They order taking building determine their where headed that's all But and your can get budgets going over-the-road November

this okay? going mean So to truly be ACT's honest. it's us with land. that going is what indicators where, December That's I to year I in will land, not think, will to more I November and I'm think of ready next I'll is, October, I'm be call, line give where number good But typical,

a always okay, be may people more Some am. realistic, be optimistic. just to I as I'm trying little

What to question. go your Let's was back other question? first the

Jamie Cook

versus... Where today changes. visibility is Just it

Rusty Rush

fireworks I be you just pop got some New before to be, off is okay, as going me, I'll champagne I I I could Visibility, a to open wanted on or it honest, I that, truck around if to like said, bottles. said, now, some for Year's, get to visibility, November. know move probably yes, get some you we and stuff right

way get probably could to out I So to it you. a figure

because you buy it's Don't couldn't truck think a could, get Now full, don't but okay? you that. mostly

So you, in thought said. is it do but would the so, be? than little still quarter can some fourth work pretty bit it's still stuff, solid, softer what a I'd I it probably I tell and we but Yes, as

we're finishing out And could a what This be okay? a finishing year. I say nothing you doesn't That's why which out, build bad. times, Well, I might in mean the there quarter going said back mean will, they thing normalized would might be quarter. That me, I doesn't like I admit that same the in said to another I work there's said, to way, it filling it's little fourth weaker. truck, could and means to more the I be,

X% in before a or but anything have whatever, over-the-road just that's up, it not, of little different different everybody freight something lot okay? price, ago is don't months tonnage Yes, there's just until you it's right? out nature the is. And XXXX, means you, the for And X That everybody where it's told to, still get it. when a there, I I mean market than I'm or Okay. beast. opportunity whole which a couldn't in year the sure the knows stuff, got hasn't, is freight

read know putting been markers Spot Therefore, all, contracts a it I works. back. coming and way Contracts, shippers new long. I read give the piece after people the we That's off out got are XXXX. most Everybody's in of have to after them all little week the down huge, just them them in flat year. mean, hammered I and will a

rates consumer economy run. is still job keeping don't now, great Right and our is GDP going. we would The love solid. we I of the pull. don't a the I the think have know, push The doing

there's get, can there. you So things out

You in day, told go other U.S. I was, back like like row to normally something the XXX-something. a get and like back the don't this. XXX was got X 'XX, 'XX something, 'XX and 'XX it we years, okay? or that between I retail XXX, somebody years was X see, and Then X, like

right Well, And then we XXX. and 'XX got now, 'XX get 'XX and probably to 'XX. we'll

at So like like X-year where got is number you strung cycles. over that's you like 'XX. period and X-year together take years that if about XX% a you out did it in going do that And I'm X what because see we're around don't somewhere looking you probably before, and XXX,XXX we gets 'XX to a to

unless it. you normally, find go can't. I history find back and you years just that. like You as It's in hard X run to

XXX,XXX to norm, softness, have mean is a going people tell you that bad. you're Most doesn't U.S. So it's would Okay. right? a retail little

that's I year, don't So we too. It's what are. election go want to lower than let's that. an hope

can't do will it. We you done talk. you obviously, through get of right much have, now. know. Washington a what to get can't going regardless indecisive be I And can't think people You're We little to even anything

okay? things just XXX there's it they're So to going make around that to number, there that me out

Jamie Cook

I'll queue in you're then like vocational versus trends? distinction last get back what in Any haul? markets line that. And in change after between just question. just Okay. And Any seeing the

Rusty Rush

you would for I more tell more the because other it's going Jamie. be stable to road, over bet, sure, it's than those tied You that, businesses.

not gas Now oil is there. and

year, We haven't oil sales gas I and any had hardly produced this in anything okay.

I've XX%. sales really been we talked drabs on service parts On -- dribs side, the But truck little had remember they've I being into and side, really the -- the anything off inventory back of nothing so, in truck up of but as and haven't earlier they and over, had bought a about 'XX. year half or all substance 'XX or right, chewing the over last that first

solid. I -- solid, at not mean be look be So other Housing construction. market if -- but we pretty they've historically constant. believe but stable. other, the the pretty segments, that They're I more has they're it always starts could It over-the-top run been whether right? been running I will pretty

infrastructure roadwork help. bill, little country. You've this got surely lots We that in a need money sure going of on. on need an would infrastructure spend to We

And volatile. -- these We're we're that, the crane over-the-road we're construction, The market up been more refuse. business, stable. pretty bit little that different more or always, in segments historically the and more like going that. and the other We're to in in We're this, all segments. in those purchases down in have we're a be constant more we're

So actually market, I -- do was. talking XXX,XXX having was guess X Class I that's it yes, XXX,XXX when the when I why better Neil, But I yes, market. share in than the to of plan market a in we're talking earlier on

believe better You that.

we historically have. So

you bit would I stable. piece guess, a that more little yes, say, the is of business So

Operator

from question with our America And of Merrill coming line Lynch. of Andrew Bank the Obin next

Andrew Obin

as or walk math. to downturn a you I'm -- just But good going well, not guidance. ask is questions clearly wanted fast and but not as to on Jamie of I was suck your couple as at through I framework this, I

say services right? that to and That's did You businesses. you're fair, still committed growth

Rusty Rush

Check. Fair.

Andrew Obin

Check?

Rusty Rush

Yes.

Andrew Obin

to right? are your in able is SG&A. you nature your that of reduce seem does just downturn SG&A a fair, the It That's

Rusty Rush

get we a Obin. not okay. color QX, to it fair on see little that, think Don't probably every back Go history you'll time already plan a comment. and okay? By I'm to it, to in you'll time, It's the at it work see

Andrew Obin

also in outperform the more just given have because garbage, And more should and -- downturn even the fleets. just fair maybe outperform That's and a large and your you you vocational PACCAR mix, statement? industry fewer

Rusty Rush

couple in said of today a the times had always a share higher typically. we've as downturn I've Well, market

Andrew Obin

I as bad of checking, just just couple math I'm Okay. in check to am, want facts. I a as

Rusty Rush

model you... to here try you don't Andrew, in on me right now. Now Don't

Andrew Obin

Jamie. fine. No, she is, no, good as I'm I'm as nowhere no. not so that's

Okay.

Rusty Rush

not you -- going Andrew, we to -- we're But better. do will understand, still

As I 'XX. to better goals 'XX said, do than our are or

can If if do -- can those better, average we probably two me, you replace years, don't okay? I you

Andrew Obin

have I question. a much simpler

say in are Could on in investing more Because SG&A, you you what importantly the huge -- detail, describe past theme think also you years. the that are So the couple this I quarter. over been doing? could investments? for the has quantify a And a did you you more company, improving operations of

give color. a more Just us

Rusty Rush

Well, to made to to there's they proprietary -- on a going fine secret sauce and between day? Box In No. me consider what I call, a you walk is what this okay? back to the Jack what tell be -- Do say ever with you like The line in you did information want

we're back So you to to of. I me in am that why go everything going customer no. think yes, look, tell I related, I'm I tell you let doing, capable can

Andrew Obin

Right.

philosophy. think I I want your operating to just realize

Rusty Rush

Thank Can I finish? Andrew. Yes. you,

Let's XX, we X the my it got XX, years dummy we and told the would I platform and we go up, you, years so I million SAP system, or admitting needed be later, $XX that was down X Board million. my the and back done. different Well, faults, or mind hand in and X and told dunce I don't X $XX years XX business went room, in right? ago. So the this We I that hold room, decided, that I'll years it

think off I little off. on math, but a million was about $XX my it's I Andrew, Just,

do data. and robust but the what what industry, And got guess think with it, to we that data We allows in okay? got so, the And we got most comes we us things. is

the doing can't can years of it, X stack reams what taking, use selling everything, into and here, because right? data look absolutely last learning is And if around been of I what I if paper, to we've kinds turn trucks up how it revenue, and put in books revenue writing not touch is good computers customer parts all here worthless. and but at service. it can't turn I'm I'm to it's you

tools So not all around revenue. it, with okay? spending that, turn millions added tools. and going that's it that to taken into been And into We've to the we've I'm get on, what which trying we've

like I'd we that. believe to And continue

the revenue seen full that out the we've not all of of have made. We fruition investments

I'll many to in down whole what, we're tell hide we have you this, or going We're X regimented not, know take but I a can real what We're of invested to path. X it many, guy you an projects okay, revenue. still it's lot you're it still understand nobody what and you tools being little millions turn old run ago, I'm telling I it's you I've that. headed our the allows tell tapping. really years into because and I different business I'm than we did But with time about more, lot point, dollars, that a doing, but in that more am, not not a to, learning. We still can we almost like have

had to our give into table it at a from people to across exactly and going get but here. not we, large, looking best tools And I'm out seen the CIO And there long we invest take continue departments, I've I'm very my, rambling. it's through. know what's sitting we my flowing me the and I believe. I've

lot we, can best not And I'm I great we're lot You people company. of I'm that getting answering work from I'm a of exactly the in blessed have blessed this just to a investment. XXX There's nothing. into answering think I'm doing. people It's it, and hard these it without but have what may to

Andrew Obin

last of economy? car general You're dealers see do happening you question. the just in one country. the And What sort fair. the largest very That's No. in medium of the

good it, You great quarter. from you. of would appreciate A very systems. And debate really have color lot about

Rusty Rush

saying says He And Well, one not here. medium-duty he's upset getting Thank and Andrew. you, of largest. you, the he's my over Andrew. we sitting Vice are President with

So I'll let him, better. he's now smiling

on given get into Class get, are before, the, out. he the And itself So it's while called get going anything as but here. him no driven talked by a not, will I medium-duty That how what us, last moving see to said, "You to also “No, "What spoke I driven Rusty?" with marketplace X given I we're that happen. in while this general in what as side. hub is our, And you GDP with think going no, the back, or we going GDP, what, get is well sorts of over there's how and start the way I it?" think, all dynamics help a in it's down a see into, by It's where business, to not medium-duty do that's amongst if Nobody we me Rusty, not the do negative. so on. to I X And you, believe the to do spell in the going stay we're Mr. you're too, mentioned no.” I that's as next But think, you stuff into, eventually, X% that's going get an it's going R, ago, it's and likes know to month Taylor I talk said, But and stuff economy? said, we you call to GDP, and or going to softening I mile what year. Not few do mean others, the changing heated,

They all brand every Isuzu, one business, we Not that. is about, we business, side. The But X about in is represent represent Navistar, medium-duty forget don't think it's represent, Hino, X Every about not okay? they So people okay? Ford. in with only the brands the every brand Think forget thing time. the we we that Peterbilt, the brand represent.

the they're represent, that these the are business we in only and in medium-duty All all medium-duty some business. guys

remain to believe to it general changing also it That always it's to more and economy, continue which tied should there's to are At allow I say continue will grow given, strong around. I business much stable. is. that be that same more So the time, dynamics the

continue more not the will it'll to wrote And market help sure going being it forward. other but going to see somebody day, it's okay? help, going no, a stable It offset, to because we it's offset,

or job it where better that market has great or share. a continued, with the get last PACCAR is has X the their been Peterbilt share to then done years market done And X going that add you has when been. Navistar ever with, So than you their

to environments, you We can like operate can't I can't better. we do, We we So to anywhere, that's make I sure and away make on drag I we that's inside anybody organization. doing, can't can cannot me what changing are we operate add believe get but but well I to But a And as understand as together, truck the do sales learn, what it not that little from, market. there. Hey, why heck can't the as all out know inside we do. hope it guys. plan and a what can you market. of

Operator

Joel coming question our [Operator the Instructions] Now line Tiss from next of with BMO.

Joel Tiss

going, How is it guys?

Rusty Rush

I've to Oh, talk waiting been all to you Joe. morning,

Joel Tiss

things there of like market because So and between X being cancellations heavy many that. orders used and out probably a the little bit think you Class too like orders

do XXXX? adjustment to clear grow think think all in not can Or to happens normal, to an out going XXXX, You to going of able in get be the in to again frothiness? back enough start of we're be to kind everything XXXX, there's we whatever so you

Rusty Rush

eventually Used Look, used longer, used. softening. are for see Well, Joel. XXX than the, back. to, run mean, we've I maybe little couple I'd I, but mean has a that I think to bit. see of But it would XXX,XXX you good maybe can years stronger question, expected seeing No up we get we if ever can I asked figured can question. I we XX. a need getting about has in one got or I I a XXXX, one remained

was I down sales year, can look very told were average at or the at look be our you We didn't. I and happy in going last I price, and elevated. the you the been last quarters, X for I our go time, of and margin, X mid to tell think everybody, it which wrong. it's was thought If elevated, proud and more in normalized. We've as to it you QX first fall

do we've -- the lot if the it has ago. back a going see and -- been finally sending trades just and I been them of it, economy them But we're oversupply coming We'll XXX,XXX because we're got of XX product -- there's it's there still -- just trucks. in, product used on was just chewing think of great. out to or up XX, much quality a years XX, It's Even mile different the the the is than so trucks piece. XXX,XXX an good

into new things hauls more can had to trucks. it like used that. go it compete Where still So regionalized and go with to and out

the it's can stuff. over better because go it Nowadays, road still back just

XXXX. believe what everybody I we'll hope, get me all told always normal. retail, U.S. is XXX,XXX has I through that But in that,

activity the better fuel now So engines is and one could to and perspective. spur is will say The fuel things the have -- mileage gotten continually from continue spur I quality, continually and of just mileage. it this, does but better a activity

sense you So of out it. can make

to able be the got with to the able used values of just balance to You to be used. dispose that

picking 'XX. 'XX, it we to can here got up got you've things. you've I'm two a industry, guarantee because go anything see in through not can I if an So about little better that

the have then into and got macroeconomics, everything country, the you've industry else You it. GDP You got goes trends right? the that and

in 'XX, stop So if will producing to we product. aligned sell going which we much we all have they out XXXX, that. properly go clear and to so And trucks stars the can down in less are

right? get just through hard have service. It's And driven perspective, parts been natural. more as from and get I'm is 'XX to right? -- November it and little but see over order see that, your better. And and I happening. 'XX, not can I can so want I looking the if to here not just we'll to I said earlier, and what want positioned point, And guarantee company on -- we're that's intake that this see So to ready up really see guarantee normalized -- we that. an a ready I'm picking but things can we've why if I And

prove that is But can it X we to So we're truck not not affect we're to us? just tied just -- Class the sales. tied Yes. to going

We've out where next from on do. upside to long going answer to year of focused they will changed question. XXX and 'XX this service. I profits possible parts And that, in markets we're think winded there's of A sort way, that and But the where and a stay organization your come the XX% as always.

Joel Tiss

talk we you terms months then just a And of worst. lot Has narrowed? And update profitability sort give Is a and milestones? opportunity? wondered of and to that forward the your in little guys the terms dealership of things XX the best look I you little And of to ago there. location gap working us you what maybe still the in on, more about could there of kind if of gap a between could are some are used guys

Rusty Rush

good we thing a good you something always Well, you about softens. there's -- this the But working that. soften -- makes house one when market your clean right, on little better, up we're like the when

stores, between and Peterbilt think right? most to and gap we talk the the what Navistar thing used stores important was the the I about

Joel Tiss

Right.

Rusty Rush

getting gap backwards Peterbilt the And Navistar not because stores but going side better. and is Peterbilt returns are on house, stores still because of higher the closing are the are the

the of that's organization big It's I sometimes has one And at I tailwind the overnight just to the because steady, always sector. side me what It QX, they're of, think And is a breaking numbers, the side has service posted, getting everybody, come Peterbilt from it's more be it's we've didn't so growth. than and ongoing continues Navistar the hidden is it that that's, growth in because these hit to thing. was believe it's been, very And told They've add I continued as from one energy best tied -- that. of their sensation, energy the all but water helpful an not the doing, Peterbilt in better and okay, in part without stir part look the okay? numbers sector apart. It all a place. way side took or

thing of was nice we a that in got there So QX, that right? out

sides parts, and called much 'XX halfway great those and of and went the okay? difference or Navistar It trucks everything all boneyard, the abroad, is in both is 'XX of in we're their think the Vietnam one 'XX, you driving the what the got they either nasty Remember, two. at. They word to But or that's MAXXFORCE, 'XX, okay? which on tough cars pretty are the Vietnam. through okay, house produced the side getting It was was for, through. And took thing in XXXX, when were all I

what this happened missed of trucks on. work gap So you to big was

we're we that of sweet going done product those revenue of parts great X us trucks. lost to or what, 'XX, owner. not And that getting. spot. years through and on the the sweet spot, necessarily truck, lost off right the third house. second, job the man. up have now So an We're necessarily but spot stuff a production, a that didn't side of over-the-road it's And picking owner second weathering of 'XX and year true sweet it's and guess That's We And third We're you fourth, the not be business owner, X first parts where truck. of it. they've produce year years is we in But really for our the service in 'XX flowing. because service that most

with the but are the we they they've side products all have done, And both the that X just what Peterbilt gotten I'm on appealing, better, those. of brands, very like their job represent products side, Class and their on on proud

So to that still we believe be continue will tailwind. a

mainly start own in where they be their right? producing us, of, some to we of sort market it plus gain And roll where to share, would to they a continue engines. engines started with producing, Tallman's but continue for they As

a X-year-old that's second 'XX. Well, of at you those me about the for about lot sweet a the think that of And truck, given us. has that, quarter spot

back into work will more product up it picking get So we to believe on.

work So hustle work on on, we brand do work most. we're and work everything. Remember, not truck. and But like we the on represent you having on scrape you to any to

So I it's of a know items. list long

Operator

remarks. would time, Rush over this the showing closing am I At conference to Mr. turn for Rusty further like no call to I back questions.

Rusty Rush

far, or hope August I wonderful left. Ma'am. you, a will Well, have everybody got you thank summer so

We will release. our Thank third in talk with October everybody with quarter you.

Operator

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

You Good may disconnect. all day.

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