RUSHA - Earnings call transcript Q4 2021

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Operator

Good day, and thank you for standing by. Welcome to the Rush Enterprises, Inc Reports Fourth Quarter and Year-End 2021 Earnings Results. At this time all participants are in a listen-only mode. [Operator Instructions] Please be advised that this call is being recorded. [Operator Instructions] I would now like to hand the conference over to your host today, Mr. and CEO, Chairman, Rush, President. Rusty

You may begin.

Rusty Rush

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

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

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

Steve Keller

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

Rusty Rush

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

parts for XXXX. service substantially remain strong, diligently network the managing and year, aftermarket our manufacturers demand proud has negatively of Trucks to fleet financial increased expensive chain remained parts spending trucks consumer our healthy Rush of and We expenses, year. That production component strategic truck the and commercial per $X.XX outstanding suppliers for XXXX. grew led said, capability truck an aftermarket Throughout results to services. our are We to strong Demand in as customers. to We and supply share. contributed which declare a aftermarket this our our of trucks from cash impacted large sales as and to common initiatives component committed overall in well and economy and dividend new

In California, the acquisition our acquiring January in in Arizona, Truck has addition and locations we of acquired Momentum from Illinois, Group. interest who into in to history, adding three XXXX, XX In agreement with we new full-service our other entered Summit locations Fuel Technologies. dealerships largest company and Compass XX% closed

we changes our enhancing reflect All not also to but customers. our these and network of services only strengthening offer commitment our products our to and

days billion, our working rate fewer [third XXX.X%. the fourth were revenue, up remain quarter]. pleased our essentially are believe expect likely there particularly service focus expense Express initiatives, shop demand services services, XX.X% focused strategic and after-market in economic supply our the was management to well network with that body approximately healthy ahead, as our service to the impact as considering the growth mid-XXXX. and continue aftermarket in trucks aftermarket constraints for aftermarket parts new We to including quarter, But added and mobile annual -- -- country's Looking maintenance. revenue parts, will along and industry will profitability which [Indiscernible] committed XXXX flat and fourth and recovery. and on to our service initiatives technicians continued $X.X aftermarket, absorption we contribute through the to our XXX continued in was with we were revenues on workforce In our XXXX. We quarter annual increased due

for believe expect the and through demand We middle aftermarket year. remain constraints the the continue But will some strong. services we will like parts of

or outperform new our locations, we our XXXX workforce As to implement our will believe results continue add and technicians industry. strategies the to we existing

led Class X healthy, to fourth truck Research X strong [Indiscernible] the impacted economic recovery in historically trucks, first remained sales, Class for X truck truck be deliveries XXXX. trucks new consumers the to new total And XXXX, X.X% XXXX, quarter, forecast sales sales year. production throughout new of the for as experienced year equates XX,XXX ACG but our the the XXX,XXX to and in bidding In in demand composite class U.S. U.S. X quarter. Turning sales [Asian-wide] sold up limited we X.X% we an results in Class units retail ended, to which increase market. from

truck sales continue And and strong expect will to strong. to our of due we recent we Demand this capacities. feel industry the new will backlog, outpace believe Class the year. X we While effects truck sales production for acquisitions remain our

truck X.X% to third Class units sales new X-X XX,XXX in of market. the U.S. guiding reached Our quarter, a

X.X% was Although [Indiscernible] Our Class increasing from strong X-X capacity demand remained production pre-pandemic medium-duty on production, manufacturers though through were to some to not limited economy, the focus year XXXX, increase sales able levels. in up healthy heavy-duty manufacturers be more XXXX. and production XXX,XXX through would than the retail

healthy, we be production likely As continue. will but will ahead, look X-X demand we believe constraints

We the growth XXXX expect the grow and at in industry. similar expected pace we [Indiscernible] our to will results in a

our gas. rates price begin of the reached the XXXX, advantage debt, expect of units second significant our used record-high The in processes the of rental cash achieve, the year. strong, in and of remain truck class remain to and drugs fleet country. demand of half paid XXXX, largely strong truck limitations debt values strong In all management to management across we sales a truck our paid lease estate] allow the acquisitions in to used may strong, free A values in majority XXXX purchase to of strides [real profits made our normalize XXXX, and new to remaining due to restructured used Our we flow year-over-year. In and strong take expense though of developing us up production X.X% spot

our are earnings dividends, balance through sheet to stock shareholders growth, continue our and us value and We that to while help cash we our quarterly our approach our proud keep repurchase plan. return to positions,

XXXX will in in increases focus management equity while due a ramps. remain seasonal normal benefits, to have employee taxes, and payroll We expense

first We the to administrative of and in compared expect fourth higher quarter XXXX. XXXX the quarter sequentially of our to general expenses be

I want employees service is in especially our always, to our and the goal, superior challenges to committed of their As long-term our customers growth continuing for XXXX COVID-XX to And It that given outstanding focus. providing net important usual have your for remaining their work understand pandemic. income not dedicated I'll the [Indiscernible] achieved take that With than voice work EPS today. emphasize I is without results could even questions. and worse my and thank been also that,

suffering I feel great. got voice but now, than from me, with bear heavy a other right I So always laryngitis I but am

So we'll questions now. take

Operator

stand comes Please And from by Instructions] Cook our Suisse. Q&A compile from [Operator roster. the wheel first Jamie question Credit

Your now open. line is

Jamie Cook

quarter. point, you the can sound in potential good heavy? understanding questions couple at life opportunity big of XXXX? just could seeing about year, second front my what be And share energy any both that then side Hi, rebound and Thanks. PACCAR's launches to good Congrats new the morning. some business you're signs one, question for And this great. is prices, market a you medium small on given a and of seeing your truck on this Rusty, A you're of if with relates positive part a of talk pricing on product the on of sort the

Rusty Rush

from some It up pick to perspective, When it has from and comes and okay? seeing we picked gradual though. gas, are Jamie. service parts oil is a Thanks, It up.

and actions about I my and in over are here. working it slowly, one a I to doing -- -- something country is I particular seen was [indiscernible] a coming the really on more able in that was have see is we've -- little knowledgeable last something to There's different, gentleman just actually South well couple the speaking think people but Texas of to disciplined pretty long the the was here I a agreed with time. seen what well been we drilling a approach, business not -- days bit to I oil it of hadn't yesterday, driving back slowly board, a to board best much right? meeting both

There's no a So that's positive. question.

sit people on be much to CapEx their going especially today, our huge here can't in I say it's that. this going make are results. I more disciplined approach. don't to think I me For to difference --

really what everybody we've to I minuscule can mean, that but to I from per the anything disciplined. just come, so sales that but seen stuff, have -- far, se attribute truck seen on say not I is very That's We won't can not side. attribute service

anything see could thrown it the outsider don't to for at something think have you historically typically approach. maybe question I see downstream. now. it's booming there money but have that seen You what booming, all be no that's going we be don't decades. it's when I service there's being right But don't this

as far that what As about was asked Jamie? you

Jamie Cook

on the market just for then the the like seeing front? pricing share for some wanted questions two of product are launches. opportunity There what And into to new you're get I

Rusty Rush

No supply Yes. manufacturers are pressure. catching increase, up -- the manufacturers chain, to all question inflationary

year. end-user. So that the a is during to passed little through. It No took be question while going to the

had. on all normal different cost you and saw especially with more but had have inflationary about the catch went bit As trying even have I differently, everybody chain overall it supply increases more the such up those put you to a manufacturers differently, price because was supply may to pressures little we side, [better] know, and into that gone but surcharges the inflationary price, disruption they going we in that guess what really

catching they up. So are

going question going no go up. to to go up continue pricing is or is to there's and So that up

wanting caught things having up in from discipline surcharges not did some bring see that. like around when far you'll think year get getting and like to to out, too I they manufacturers you're last

got normalized be X to what year, across happened for got and but there And for board the that will a margins to if they customer years saw expect they base right? wait this manufacturers back get I more caveats -- and wanting that's X across So they out, the goes do last to that do, You've board. themselves, them will a you -- minute protect pricing themselves. to

Jamie Cook

Rush And question. of then the there's share the No, no product opportunity last new market question, about for some the launches. with

all not in other have would base than many the we're fleet Missouri I over-the-road and in in in fleet call historical an we big states areas Kansas are and just have. more Jamie, country, our of it. But understanding there from you on is that XX problem, perspective. responsibility the We at The a look side, probably When fleets summit the of is allocation. there over-the-road Arkansas, acquisition

a it's we're constraint on going sell. for will allegation. We know to You -- much be pretty the us -- we're problem know the what

that 'XX. and conquest to out tell we've which XXXX, and That you businesses, could and had is possible in X, mean I Y. deal think that ability will this get go customers. other I continue to wants mean, certain our into all I new all customer it's to hamper manufacturers right? is

feel got chain that's put were We all bit numbers. allocation our half the going -- then pretty a little that a supply to So And caught bit had damper. little last good we loaded. back a I year much were about we we of constraints.

we to didn't get we I So trucks. more a lot that expected deliver expect to whole get. product

at good we You that we to XXXX. and back it think you because the and had go then loaded results we [Indiscernible] When get look half in It's were outstanding. produce. pretty

I get. acquisition, into up. we're there's right? be We're it's our you expect all XX maybe, can would we're again, deliveries, be to going us because get, go going So XX%, us all to ACC's up to our to think those I with to that's that's we're somewhere going XX%. would here. take something days we to get, expect limited I going but question no So all can lines up along to change. slightly something you can We're XX%

share average market here with above, us distributed So loaded, than back up But bit deliver from I with And the a I acquisition. but whole half and obviously, of perspective Russia's better out trucks market more expect do expect that I for should quest. Class more our think even the not to a of X.X% have go that to year. little Conquest. evenly still do being X go across the a

Okay. voice your I'll for and hope let you else. someone Thanks you save better. feel

Rusty Rush

wants else if it. don't I anybody know

Operator

And Justin question from from our Long Stephens. comes next

line open. Your now is

Rusty Rush

Good morning, Justin.

Justin Long

Good morning.

just just hood, deal wanted think the XXXX? way closed. the about Summit I a acquisition. ask a look how maybe there thinking that Obviously, after the Any expecting big business? from acquisition help the you're you're can impact that integrate to So improve business us having in And opportunity and the about you the to about under

Rusty Rush

Yes.

first our talk of acquisition. month Jo We'll just we that. remember, about talk Let's -- about January finished with the

drive, we about due everything, seen been results we do them. while the do it group to acclimation quick to back the got, is when using business. That did the you understand business are have there's until when there. great would it very which the But right? switch one group start do, there have intel excited going achieve to test we December. right? the time, than the the know May the SAP and same could group which a that have can has period. undertaking it, get that would be server-side. a historically, Justin drive we They of believe said, engine Typically, little then switch okay? car to period, switch very have XXth to we've people said, -- system, not do been At Xst on With you a deals, [indiscernible] complex. then we of you the the businesses then but had the believe especially Xst, So everybody them us deal we to disruptive what I a that getting there. the got diligence on that, they've and on the -- you anybody large in It first what a month. there's of provides your and comes our have an is lot to to acclimated and you on March we allows over then transitionary We're We more but best out closed --

So that take bit, little a transitionary or a period can while. people little

far. We're So pleased all so exciting those are things very seen though. what with we've

our to a We purchaser. into They great roll culture. but had the will continue obviously, culture, them we're

without now I through account selling perspective, I adding we looked technicians will July X But going if not to anything all happen at there's a a of national fleets the a August. to that. in and a lot [rush] lot believe else. necessarily and you service is be just a I a mean to acquisition. day roll believe it. Russian with our want But [three] more going trucks, [it's a stronger that person. as their especially but roll So not couldn't with parts side, -- -- good doesn't year upside these but be over those more in of possibilities. X, help service but just -- in network large deal -- make and they're year in back mind. things boy, roll the are that medium or upside, years pleased a upside year to us, not to X that's there to lot they watering] you from a for did little doubt in opportunity But about long-term mobile around feel X more I if We the of we've there's for

I'd from differentiator everybody at But what approach said people our -- timing a our a territories. say got and our else. about group results like outside networks, those piece our are watch I -- our and of and things. the because strengthens look before, differentiating great did I'm we map and just our look but just in people. like and right? work it all is customers, above ourselves just of do. to historical It to middle right And biggest around we've -- at trust But with, So great of

as we're mean, to be the obviously I about that. going So up. said, excited they're I numbers,

service margin and sales. doing You're

may sales tell teens, things in be high our you, with little again, to to a a ours, But going adding I'm from allegation that perspective. better. truck them like So

it for I base [indiscernible] do. So year XX% just upside believe that opportunities, mean that me limited it's and facilities acquisition But in honestly a them. good got we when so. the technician doing They've grow way. the I bought our or big I we service. is

Mobile, have of Service different we of those that do things mobile. of So all the put don't bring things us, allow some do, an again operate, initiatives with they names we in They have or not don't got [Indiscernible], that. and and Connect when some the the it's we services, but things then lot add accretive be we've us to like get upsides, express just we stir, water to that There's [Indiscernible], and a will it done. but other

Justin Long

Understood.

are you about layer in service and for in So then business, expectations think you growth Summit. what once your sale talked When year. organically XXXX, guess, expectations parts about I you this both truck and the

Rusty Rush

on a a bit from you I based okay, inflationary maybe more, had little told singles, pressures perspective. some same-store high

at and some integrated on the sales service both we're in. side parts teens, So the high side looking and with

rates, opportunities. hood, question, it more growth opportunities time really. you're we've similar driveway. again, haven't end. but There's crank Like we driven We and just off the no talking over said, we on a yet just a service the and the the I that barge say engine, living about Okay, mile out and some rolled got I rolled

like our So opportunities. you it rolling drive I a I in Justin. what it's and to can say more now, -- tell run and us But and what bit maybe supposed stuff you, would for more the basically a there. be be we it, to those bit tell will everything get but little lots that's I January is in let just of but get car little upside

Justin Long

Thanks for me. and question last

moving know Just looking layered there getting pieces quarter, are in. of at I lot a first Summit the with

you're what expecting? up around mentioned Any increase. G&A would to about XQ XQ that us EPS numbers of think G&A be some Maybe Rusty I kind earlier, way and think help you to sequentially. from put

Rusty Rush

say, is more our business great, in back going that. hitting on is is is solid, started business not Go back I'm going quarter, layer I'm good. to G&A. do look historically. you the softest okay? time to We When you all Understand QX, if business Okay. the EPS,

all then comp on We we QX this the equity taxes, have [Indiscernible] that level out. and in

So be when you up. expect you I to right? SG&A, got sales got G&A,

there. will So be But And And strong quarter murky, as back in what, little will was be roll year, on this at look from results. be to then a I G&A do okay? can expect I with last going first in mind, okay. my up and think -- up you it's summit $X.XX there,

and expect I there will So solid. some take it is The sell. business

allocation quarter last year, [Indiscernible] that. any remember weren't they than building were QX We but first they're higher truck are they a and Remember in on this were year. deliveries at that year again, -- not rate last

So -- we were in fourth year last quarter this okay, over Yes, -- the QX to Steve. X,XXX they compared almost were units. year's [Indiscernible].

XX down not -- probably now. QX, can sure won't trucks expect -- from not I might So be get would it somewhere up, but XX we we back -- deliveries, we were can same to do I'm over to QX truck I'm that QX right -- We to right.

allocation, the they because put into bodies be a that were lot and about so. XX we should they do There's them, vehicles. year, delivery -- rates of and I as no don't will were as going -- that this, be question, and some QX the but days QX, believe as QX bestly to lagging think get do do of I pronounced of behind remember XX to drivers we're are what the because better because There but chain in retail be are it constraints. QX, we we don't deliver hear as I I will production deliveries will expect rest So have right? the still as supply to

expect we'll up there on. deliver be -- to I'm long-winded sure, as my but to of -- days But same-store in I deliver XXXX] say from will to I'm a I were But we [X,XXX year we So trying because goes the like not get Summit. the QX. know, don't we'll store, for But don't -- it a know same ramp I we with will units, on I answer if Summit at. bet. more should we'll more here, giving basis, obviously, rambling

Justin Long

it. on pass on. the it Got Congrats quarter. I'll

Operator

next our Thank you. of Bank question [Operator Instructions] from Obin Andrew America. from comes And

line Your is open. now

Andrew Obin

Rusty, are Hey you? how

Rusty Rush

fine. I'm

Andrew Obin

sound would would I Yes. how I say you feel. presidential. start almost That's just to

Rusty Rush

aside Let's morning. leave this politics

Andrew Obin

the to all way you guys, pressures, cost for committed no execution you So results, when right, differently given I the company changed question couple internal right. you're to factor right, next seems been of cycle, cycle, right? given you've over just in this your a communication is, cost the the all clearly, sort you run has of internally, think, metrics, differentiating years, right, changed, that over inflationary It's inflation, I we the creep the it the you control compensation -- have the talk keeping

or we're do you. of had going So in for up? we the and how costs pressures given how while in you, on containing this pivot your that the all you the inflationary short to able Thank the seeing environment I strategy question labor, being components costs you market, are grow where of clearly, are do manage short

Rusty Rush

is -- everybody on okay. just else, it You friend But from mine getting pressure. I we I it inflation. it's the what like from and real, one to right? be talked can't I about. bet. back recently, admin run Great gifting we of if getting And are think So wage side, you'll a question you're revenue that okay? it Andrew. can't is that don't more

by we going you and hide from looked to is ago had time, G&A At go at I me was more I to next can't were when probably the manage run same going I told raise manage spread, the months G&A, except and hand, I to communicating, I If G&A year. up get how piece expense six can it. side, about, had to talked the okay? manage percentage that from around job revenue This on manage we what revenue I right? but the go perspective, are, embraces things hand Andrew, keep getting is a difference. should it what to my to is my and And in everybody I affected G&A can't again]. costs. At it to getting higher we're [spread then you -- becomes labor the fuel keeping that's again, costs. right? run -- other And what but I is it higher allowing too. much spend. that else. you're or can't time, that's to like And needs revenue be. -- it we're side, not what And have spend make We're do. It's gross you're the from that that to And it's going same from ensure run we're It's set to much talking How how how to much diligence. profit some going about. of about money, you create. where just spread it's that really on do that

bet, I'm again, You that much I I do world keep. the that on how in. spread. you am change at. change managing can't spread. what can't is where we're that's I manage But And focused

nothing to way the nothing of [Indiscernible] now you and up I of going the things greater than [Indiscernible] to give proof deeper We've do, it. going through communicated you're better, capable believe with learned. and side, original that, we're as that this These spread offset management getting COVID again, was have doing and going three I've to the said of not say, sales some it And be back but we're the to mean, we as I'm the managing than some had of disciplines believe business I we doing here, far a of on it. that them of eaten. folks and over that. already. over It's that here that it our I'm that guides side. getting getting As on And in the place, the deals are terrible put away. here

all over that looking boats what few spread. I we'll see to to ability the room here control keep next be But inflation. where the it's or mine, a buying I is it am around control guess I'm the of I our two, really on we needs can't responsibility doing. regardless year So all call, spread that but again, in That's right? but

Andrew Obin

higher do Thank is have, the of the about the question when checks, other we there interest rates high-interest and economy. our underlying debate channel rates expectation a and the I impact of on you,

a around You've been while. for

geographies. industries, of lot a touched of lot You a

economy, the conversations tell interest what the broad impact swath the I share just And you First, now the can you you're second, clearly, on customers seeing based economy? just but economy, with not you've underlying economy. with cycle, could underlying in on us rates your very broader about had touch as the us potential thoughts truck of just higher said, of the very, because you

Rusty Rush

in, be their up guys smaller off those make small a smaller forward got balance out. And will rely leveraging to or medium and balance to They're swing their blows it. that up. some other into now, -- good but last smaller have You rate is the it's motor the on last stronger have still folks in, of when affect but okay? Obviously, concerned companies if squeeze XX and effect you lever of everybody typically can't old, process am they abilities folks been it. this. higher you increases. basically, haven't first going if some in of years it [Indiscernible] like from Where the leveraged. all XX about an don't they doing first not like sheet there, out, because right extremely bet. yet. -- be of sheets they off will I Well, going And a But were [that] been of you affect out really money the lot But that, works. the pretty it a is that's got as the we clocked medium-sized has business shape. how these And balance strong, When the and I guys are or grow sheet only that will April on in start to stuff. don't you're of decision seen those rates some themselves can't run anybody's because have to obviously

will talk day this it. for you look touch -- haven't don't slow to but not seen I that remember, would given right seen anybody anything every anticipate I historical down be decisions in come, about different. haven't but I'm now, I People So any with customer.

larger We people but are upon big have to talking haven't about speaking And people a okay. heard slowing these the down But based big I'm I those of anyone want, sheets I rates. balance company. talk

the which I haven't now. it points to that obviously you couple to field -- there, anticipate a that's is to the But rate in from from when in, increases it would up. of yet, come So real trickling going get heard not going blow there

to others it more several slow So borrowing down, it take start but we But the to [Indiscernible] it's up slow those than the at end. but points at it down goes that again... end, will

Andrew Obin

thinking rates sort your sort Southern I you that other of what be Is think Texas, sort broader thinking be should muted said, than, from should of seeing Florida, about in and fleets. it? so you Yes, small economy, of how the to California, truck medium about interest reaction you're customers as initial

Rusty Rush

Andrew. because so, business But few think opinion. just strong. I years is a it, still so my That's at

starts And [Indiscernible] with of sheets are a medium and good. so now, slowing affect that levered business, people's slow that there, people's without getting than little the that will got to And pay a it to question. more people naturally margins levered small, I think, lot some a down in purchases more It's pretty But inflationary strong good to but be growth. little is there's for it's if Now interest. going little bit balance they're a room even going up. guys not everybody

having here, effect that have But it I -- a up substantially, see people can at over still, moment, an I inflation. see effect. which start getting, now, it could the quarter-point is strong the look when all don't You rates the is at much going we at think. demand. don't the will the a it's all you road driving If but is going the are in point in years we money so demand put the you still last there moment economy still, the not got be of slow there, It couple out overall just quarter right the I just as after still economy the because to is

Andrew Obin

Yes, Rusty, presidential, sharpest my despite advice your over I years, guys of one in you and the XX XX. are I or take XX have met would sounding smartest,

thanks. So

Rusty Rush

appreciate if don't the Thank you, know I kind deserved I Andrew. words. I it, but

Operator

back I'm to call Rusty closing I now like turn over And would further the remarks. showing Rush questions. no for to

Rusty Rush

of results. We look first-quarter be see Thank year-end listen sooner to talking morning our very with We'll you'll forward the be this We much. taking you to results, speaking to appreciate then. you middle you about to hopefully, results. you time you And as April the our [Indiscernible]. we'll to fourth-quarter

Operator

concludes you today's participating. Thank This for conference call.

now You may disconnect.

Rusty Rush	Chairman, CEO, and President
Mike McRoberts	Chief Operating Officer
Steve Keller	Chief Financial Officer
Derrek Weaver	Executive Vice President
Jay Hazelwood	Vice President and Controller
Michael Goldstone	Vice President, General Counsel, and Corporate Secretary
Jamie Cook	Credit Suisse
Justin Long	Stephens
Andrew Obin	Bank of America

Rush Enterprises (RUSHB) 17 Feb 222021 Q4 Earnings call transcript