- Earnings call transcript Q3 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day and thank you for standing by. Welcome to the Rush Enterprises Incorporated Reports Third Quarter 2022 Earnings Results. At this time, all participants are in listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. to and call Chairman like Rush, to now President CEO, of would turn over the Rusty I the Board. ahead. go Please

Rusty Rush

Good Steve General Corporate and Keller, Controller, third Counsel our Financial Officer; call. and are welcome Michael Vice earnings Chief McRoberts, and President Hazelwood, Mike Officer; conference today On Goldstone, quarter Operating Secretary. Chief and Jay release call morning XXXX to Vice President,

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

Steve Keller

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

Rusty Rush

As million, We're our dividend $X.XX of $X.XX income billion, diluted news $XX.X demand declare by revenues $X.XX common demand achieved strong we're release, new net quarter indicated parts third pent-up share. aftermarket proud driven quarter, for pleased continued me, share. were -- with We're which of their cash vehicles and of excuse per to or largely per which a for third results in service. the commercial and

significantly Class to outperformed but sales X truck remains production New limited our due suppliers, truck the industry. new component

in XX absorption in market especially XXXX ratio In we financials positively and due widespread our Truck impacted shop South the acquired million, third the investment in XX.X% now operating was body where additional to and our quarter, Limited. Our for leasing results revenues those and Canada, energy. our fourth included Midwest XXX.X%. parts, Rush experienced the are up segments, the results Canada quarter also in XX most our year-over-year, in refuse, of by locations $XXX.X of locations were and In Centers aftermarket, strong service, and demand were

also technicians sales our the of company, aftermarket growth which throughout addition was especially to fleets. service our better customer and allowed professionals by driven us Our large national base, support

parts beginning to parts supply supply the needs we're up the While catch through are still constraints market. industry, impacting of the see

repairs the fewer of to but and In the the for fourth remain months. in end typically year, maintenance strong experiences addition, and working the days seasonal quarter we winter by through tempered be expect through industry softness demand to to the

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

X.X% new While to experience in customers. Research limited, truck most and sales XXXX. retail Canadian X demand from X units both up XXXX remains XXX,XXX forecasts up market healthy to we segments, and up Class from including U.S. vocational ACT continue to production be from be X,XXX, sales XX.X% XXXX, Class over-the-road

our production third the we And We truck achieved to similar fourth constant. quarter. expect lotions to be what in X be to to Class vehicles for commercial remain quarter

market. quarter, X.X% of X-X units and accounting reached Canadian Class the the markets the X-X X,XXX in U.S. Our sales third X-X X.X% truck Class for of Class

XX,XXX be in units, XXX,XXX down a healthy of food variety units While XX.X%. vocational, segments, to remained sales forecasts from retail XXXX, to X-X down U.S. limited, particularly ACT beverage customers. we demand and saw XXXX, Class retail from market production sales X.X% a Canadian and Research medium-duty be

to of with Class XXXX. our the industry expect will results ahead, improve look we in the align slightly, we production X-X As trucks and

Overall XXXX. in interest rates units X,XXX X% rising operators prices, production, due over Class X rates, softened burden to spot demand an and continue owner and Our reached used fuel truck in used truck weak uptake sales small fleets. third new for high the trucks on-highway up which quarter, to

expect the to XXXX, level for remainder used continue used year a decline decision historically and inventory minimize into values the truck we of the to quarter. third truck to to we As the during our low made

values. We the inventory needs the while will allow negative manage used truck continue our market effect values to to to of closely and minimizing the meet watch used of levels declining us truck

by and as rental lease largely lease new a truck third contributor With our higher growth quarter caused rates significant recent production. year-over-year. is utilization rental overall Our This be profitability. as to increasing acquisitions well rental XX.X% company's to operations normal by our and driven continue revenues than limited

we the and rates, look future, and we to may fuel carefully spending, are interest our in monitoring consumer which other customers industry impact inflation, economic As factors, general. our prices

our vehicles However, we commercial aftermarket we the With our new there is still for significant executing future. our ongoing strong results expect and management disciplined on the service, strategic will through focus for and demand expense year. financial parts will continue initiatives, foreseeable believe and which remain

to for to for goals. company's With our like continued this their that, I'll their would thank work our your commitment I employees always, take outstanding As quarter questions. and

Operator

Suisse. [Operator Thank Jamie first you. from question Our comes Instructions] Cook from Credit

open. is line Your

Rusty Rush

Good morning Jamie.

Jamie Cook

cut name. out couldn’t my she I Sorry, say hear

couple Nice good about I questions. Sorry morning. Hey, guess, of quarter. a Rusty, that.

my the What's just little First, growth business. all the the service I on trucks? year. I the been on used It's reduce quarter? left you're used a go-forward margins to gave normalized the just then the in this, on color Again, impact did in on color to we mean, give with new impressive. about like margins used much how and how fairly trying the basis, Can parts how inventory question, think impressed was a and on in the I mean second levels. inventory you and you And

grow Thank parts a talk about share to about versus to in how So truck assuming think and macro ability were downturn? deteriorate, continue you market you the can market to normal do the you.

Rusty Rush

people back right? And five step look I in last I'll for Well, craziest We're and back complement values, the truck our quarters seen as a biggest ever Well, Sure. history. I've used the minute most reviews. quarters, Jamie, the for If margin. quarters going we in right? taking we that but the as look thing. XX% used, you good to were advantage turn, had right always, back, that's did of Well, averaging we that, XX%, very

actually values, So, large them to until last as if inventory started we midway our we had and as we And our really end dive it had you this X,XXX units going quarter. inventories market. the it, mark of cut up look but this dropping. to But quarter quarter, deep gotten and had the through we units. started into By into determined get to actually hey, obviously, this X,XXX to quarter,

down, were X.X%. weren't you if that back truck what margins. if look But -- from end had gotten we high. at So, you We did, running -- we look went used that were we we we high

what million, you effect it of was company, you if million. $XX the look the at compared So if to and was say, back QX, that go on $XX it, just compare

between So, was the we're acquisition in onetime how QX like gain difference strip out truck percent the really, it, Canadian if you and between QX of $X.XX in that three. book had, from two used you XX-plus we the

truck moving normalized I that, start can more margins. doing run I more going don't will towards margins. that but tell forward we in to X% So expect you used again

X% and mark-to-market, get that So, expect of our got rid the bit decline, is truck that inventories margins I again. to hopefully inventory making continuing be continue used of not inventory we to if a drag, to that a sure cleanup but understand will little that, value of do

So, all that was done quarter. inside the

really you I'm you, So, of we're at kind where it, to of proud when at. look honest be it with

we're don't bottom, get years, for margins through we've I sure. to a inventory least back know We've to that we'll been to right? I think, an And So, X% X% believe XX%, you on but told perspective. I I normalized do are expect from as going used X% XX%. in would position, the at that forward. crawl for

last I feel inside about this that. all That So, quarter. good of was

X%, what the you is this it down to but -- where fast. was had X%, going and is which truck we X%, somewhere drops it's did quarter. I all Parts we're in X% gets X.X%, not got still right it But the really before that feel look and we've cut at what it quarter to dropping closer of did pretty between mean to we values been from five month. what good, it start we thing used going where last just service. running continuing. somewhere, up we it maybe everything left They've that you X%. market a typically Obviously, been. half we've X% be do, got and But inside X%, That's to when X% So cleaned quarters okay? to X%, got but was

Jamie Cook

Yes, go ahead.

say was I to Sorry, that-- just going

Rusty Rush

bet. say me ask No, just do you you I'm that. service. So, to going parts want to and Yes, the

service parts I'm of some had that. and at I'm levels the So, kind stores we've from the perform So, rates perspective, new record probably to year, time other stores got, -- in even the of of while a that bringing we same absorption right? of an very obviously, don't outstanding proud

We we there's We these finished operations So other May acquisition. on the finished the just systems. we -- really in think, Summit in our integrate just just as putting there, we SAP stores. August, in business runway with some Canadian got

them. of So, there's a inside learning for curve there

new those by yet of front little there's a of spite XX stores, and think detriment that, a way, of us can that changes system on all bit in in can of first the XX, days runway them. I So, business tough it be all be a lot for side

there's inside tell too. what was you -- would all I happened, So, of probably that of

outlook inflation. and share, As but look took you also go bit, we we but benefit as a backwards from we our little forward, --

So, share. don't a It us was just minute taking of it make that both. a was combination for all

with look activity and for much probably discern we tell I Sometimes But through me you it's was other as was high that inflationary it. was some single-digits you hard to the share what there. would out how

now, see believe continued first, Looking to next I year, we'll guessing inflationary that pressures. forward think do the we I'm

inflation, if systems did I year and labor in side on our That's inflation then high always because now, I lot as that looking have have we're all year, but like all that. I will That's the this be that in I get to parts not for. subside. could go the numbers. inflation to expect based What that's mid that. we of into singles, will the And We somewhere rapid expect somewhere But and We XX%, I'm low have on we're next in around expect share subsiding up. seeing be I because to think the it some On the side, because last also single-digits will questions. quarter. investing share, seeing things goal. what on. to upon and not But know -- Cost in inflation take that's take run we had our doubles high some continues labor it and That's we're do still G&A number inflation. the even to our doing still the we're you're too continue stuff, But right high believe to. investments we to make going in a top quite of

over continue to returns think I we and like we'll rates that. investment enough. continued can continue you will want absorption years, numbers, the we last just you have So the in our hopefully, XX, been. our around see XX long Jamie, it And grow our And

Jamie Cook

you. Thank color. Okay. the appreciate I

Rusty Rush

bet. You

Operator

next for prepare Obin question from we our of next go while One that America. ahead. The Please we Bank coming Andrew have question. you. of is Thank

Rusty Rush

Andrew. morning Good

Operator

One moment person that stage. Andrew on your is open. I'll bring line

Andrew Obin

not Can Yes, hear on you me? I'm mute.

Operator

you hear can now. we Yes,

Rusty Rush

can Andrew. I Now

Andrew Obin

about Okay, Yes. sorry that.

earnings going and I Just a question. as started four like the like to something, our print over we looks six. year when said, you're estimate, well think was Look, I it

XX% given Rush? look a So about multiples lot number And sort I clearly everything sort normalized just Rush of just the the at these for recession? to you going at at asking forward say cycle like not I what of to as peak to how of recalibrate the seeing make sort numbers. earnings how this long of generally should said, try about than much Thanks. you've power a when But plus of were sort people Rush expected should But in expect be I'm year power Russia's how a higher in distributors, we for across days normalized the done? a numbers we through the think think of earnings run. to if And board seem recession I to is. to

Rusty Rush

cyclicality. industry to a in I'm an on know much in, that You go. little we are here Obviously, wanting not Andrew, go out have does but you

does country whole this to it. like Just

in -- go So, double In there we was goes But can new I it XXX could and lower little troughs -- bit try me. that. around go to trough, hopefully that split we'll are I XXX. that, for for adjusted it that. as a that to than lower How XXXX lower I look to made back is go what a and we out say believe 'XX, look somewhere to XXXX, was. down I back and projections product figure than sales than doesn't here. out I not if but probably with We not we Now, $X.XX. at it we get to trough, from trough We Steve believe made okay? when $X, there, Most get a that

tailwinds I the perspective, they I'd things to think continue out the But or new those side. look by those mean transistor, their tailwind Navistar do in to some going to like still the be XX. flow ago. will TRATON Backlog's into Peter on and, always acquisitions we will outstanding a some to the always of investments bought So, obviously, year the when got back us. tailwinds, at, XX, for we're on do return, be the from that going a you we are future are to continue doing, big especially at the and for do in an the think dealerships. I And I to organization job. believe more just just more and are things integrated still to peak being there's we continue to of

I been commitments with Packard's long think peer we've a so review there.

So, a a peak getting And that crazy manage me. for, with you're numbers barely OEMs but things commitment, down normal gives I we a both When realize that bit you see how in you I'm our it's little multiple, treated that a multiple, the at we're drive a guess, you our peak the commitment, we the getting now, color. normal what same we are But can I give now not do, if you normalized, say that troughs, I much make but like little what don't you're should your that and to using don't -- where Is where we're we U.S. there a there at market this around I are but peaks anything okay? are think you see pretty a industry, would think delivery, number anywhere. good want for? and rates, to that can around be. There's in that trough got looking just you I

Andrew Obin

I mean, I No, Yes. useful. it's think

$X So, at I've the like the sort at trough seems of heard. like least that's plus what new number,

you have asked, presence -- some systems the if broad the have the that of I question, you question there. across Second out very usual you U.S. Clearly, best could

sell obviously, what truckers, sell to seeing walk just the could verticals, through in you by what exposure you seeing of different FedEx, you're to contractors. you because and If U.S. also us regions sell also you to energy, you are to have you

you industry So, as a you. as good anybody the in experience. lot you have Thank and of you of have

Rusty Rush

still everywhere geographic. Well, said, getting it's almost really geographically, pretty see hit. I as one don't geographic I strong, spot

others. the Some doing is I are stronger it's in mean I doing would slowed mean I mean down well. very pretty some a broad. it still California, than strong. Midwest well is have little. thought Florida I too. We're region

it expect our on look the oil larger we've I and when segments be our everything like gas, accounts. in to what be than is from major any now, and biggest pickup refuse, to It but would would for segments minute think more when into get X% I but a business. was and was you and it when is Now, XX% happen don't parts at oil up it's gone of up service, else. up It X.X% years gas have ago got may

the of really we our believe that. can stuff, our what had do, us what job Our of national map account and forward a nice of we've than our going and all we is But we a growth biggest we we do customer, basis a be what will growth, consistent and take anybody is service represent, And we growth biggest do because at for else really care We larger which a that's And the on Rush local look brand map. you're still a in one ourselves accounts. differentiate like industry. we in to map of you off ways because can national no map got else. our regardless regional across

we our and leverage strength under how to and people one. how biggest millions a half really don't really We But that continues our and the them about business of we're all the that's to go us really ago is product, we our market service that at and that that to we to we and creates with have nowadays. market is put sell continuing road. umbrella, And It's rate. mind. do math. we list customers grow one same to it as there trucks it focused realigned go revenue because that down and so And of my the year creation parts -- time, map to in customers, And opportunities that's sell then biggest of and how dollars do and a of we just in all

eventually to I there geographic are future to the question, But effect, So about. that's segment going convenient how a Texas, the we little live And rear base down think, anticipate, do can I housing -- have -- do with market in it's in I how somewhere tell to I will But be is will what -- in have side. coming talked I I effect what going we you We the that and well got some. we're it's in and doing going to things downstream we'll go as with on but but what I still Andrew, that I me But believe a an diversified perspective. market the strong. is still be here. segment from do strong and continue okay, on what's rates, the it will we year, and and rates is got growth obviously, I at that believe we've we're us, tell with next understand and a going really, well it but to But know slow important from the ourselves off your an to and that. think Feds leasing

Andrew Obin

a And back on to question sort just question, going the just of trough.

how think So you because and in environment. can inflationary think an services and absolute earnings about as How parts can of putting an what such if maybe about decline and Once should see driver think us we and company. of kind we growing about, or you recession? calibrate and we could or in we parts the we're give however, trough it's how a services? Because number should money and in it again, keeps keep your a just you should a

Rusty Rush

ever down. the seen given enough I've think that as sit slow we've investments it tell not don't be naive I'm going to before, and it couldn't I it, go Well, to bad here it down as will you made but in

especially don't just with in guess people than know, a in into medium assists don't any resale case. this is how us listening talk see inflationary That's bit think as economist that backwards Okay. being little a to scale. naive, going if maybe. size I as funny any I a more stab. pretty are X% From we little growth or, much got I so. I this big really backwards, rate environment, Andrew, middle going don't that the far a high

being from single-digits, pull. and the like and typically. what the profit seasonality service little in down far a overall lever absorption -- But gross That's see bit normal to slow have means. of have remember, we expenses. over I as don't winter, things as We expenses That's parts

and go you to sites manage through mean, summer. was took we off short And the advantage back go it the mitigate the effect grow of typically So, I to how time, the pull we going when we mitigate back it back then even shut to to then bait. there back with try have down in able a other XXXX it to manage, that's took up. this. expenses we that. fall, we in shot that's whatever of though when And you market being at That's how that

point than that. running starting to been lot higher We've new our a us. remember, than that's XXX% with So, up and never absorption. acquisitions less is And running

So, we're mountain higher lot have lot we than starting at ever also. whole taller a

but So, naive that projecting now. line. But would driving think, bouncing I up somewhere if X%, I'm ends X%, I I -- the don't day. I'm here, general that, economy of we to around on not X%, But know not rambling know it's like the I'm that. see everything the or at top end don't that the enough

manage So that levers something happen course, by up to was could the of pulling to like through it then, we've and got. us some of

Andrew Obin

Rusty extensive much. answers. your Really thanks so appreciate

Rusty Rush

bet. sir. you, Thank You

Operator

[Operator Instructions] the moment Thank next get for you. One we ready while question.

question next is coming from [Indiscernible]. the Now,

open. is line Your

Unidentified Analyst

[Indiscernible]. is This hear you me? morning. Good Can

Rusty Rush

Yes, hear now. I you can

Unidentified Analyst

with X Okay, quarter? start truck Rusty, I'd parts for quick Class on you what organic in thoughts wanted Do on the to have number get XXXX. and the growth question great. your love the I service. was to then, And number a

Steve Keller

rate, if by growth organic. service mean and parts same-store that's you what The Okay.

XX.X% of or of was percent. so and XX%, has in the probably Just in it quarter. XX% growth Obviously, inflation X% that

that's organic I what you're is for. asking think, So the number,

Rusty Rush

I And little a number, middle and a if as I Kenny, as heart heart. ask far numbers three got ACT big really you they got heart, think a

XXX. reports is have he now. with what prints some year. there I right going seen I've I keeping flat fans think some know to And Those out people, problem -- with are be that's that. I'm are a I this the XXX

going big continue to your are think buy. fleets to I

on up good interest and customers they're to higher levered have you're to midsized used that and think I borrowing values truck to smaller going that rates money are rely pay.

that in sector. think to that's going happen I

will believe think range I more with think point -- front I going don't and being I'm So, $X.XX mine. be -- $X.XX it that do to be go loaded. I would to

some -- will get more believe more have and midsized So, what will on back, buyer we I deeper have as that small think the do loaded doing because the I do as effect are to hold that take into be front year. get we Feds is to

Unidentified Analyst

it. to EPS. Got I of cadence just Okay. And about and the ask wanted quarter fourth the

few gave be on pieces we the but truck else into moving fourth or sequentially quarter? moving of on expectations for a You G&A sales, mindful of should anything the anything

Rusty Rush

I look a that to flatten fewer a working When bit bit take of little days. little sequentially. view would out I it's No, for in G&A service it, off because we'll be and parts

You've and just with. That's shut lot down got can holidays the and deal have year. any no between just that Year's, works. we they That's other than Christmas normal. it companies different way that's of New A

So, that less fewer just seasonality. dealing we'll similar days the a with. working given quarter little bit be That's

don't up. to as is, I remain see expect far slightly day per continue don't winter. little go normally up. days. solid, a months the As have few them to few now, the they the last to Normally, a in right go typically average working continued softening during will less okay? They in you They

pretty what would of as solid. working still the -- that in at we're days, the a just -- little And as the but it I of really returns look it's when a that every they're printing soften can you at only But but year. still numbers and are. So, we bit that that be negative see I deal with it, look holidays, QX few the

Unidentified Analyst

the to quarter. question, tagging ask interest about then be in amount forward? going capital wanted the deployment Got what up I that, And by went we you're maybe last opportunities about just good today? on expense thinking should a to Steve, Curious and best And it. seeing where

Rusty Rush

plan shareholder five for Right. years. now We've consistent a had return

the we'll million, dividends very will best but when a we've interest million and can numbers see right cash continue repurchasing you, we it's we repurchase. varied, we're have FCF do we're continue free last $X dividends know, buy Steve? think that's we'll year, approved said, to if we on -- $XXX cheap another million backwards the from at honest quarter those what $XX the back, we with We do raised be I I $X.XX not we is X.XXX going We're it's XX% see year, can our shareholders, to return we stock soon, of consistently opportunities, opportunistic change, I feel be $X.XX return a have now, improving we We back, next discussing to mean, last like back. stock especially consistently And As perspective, of to it to approving a is $X.XX undervalued. we that buy XX% I'm been return be probably X% around, in right Steve not spend we my and bought months. the one consistent don't averaging just XX The under over and few dividend changing perspective. We going repurchase. increased spent or over do to be with be more mentioned we've to flow me, But rates sure, so stock. stock Board. from will we $X thing of years, may either million but have

Steve Keller

million and Sequentially, of things. product Yes. up QX, two $X were from we a it's

plan levels plan we've and a up for floor Our trucks more floor are a have our rates on and our of sheet because delivered variable. longer balance amount there are few time, more we inventory

have cash, foreseeable expense the that that is and the on I the down keep soften. similar lid current interest more we the to it And levels have the for driven levels turn interest coming So, floor ability you XXXX it. we've only And in lower to does got and XX one inventory plan of quarter of should market to probably by would to and those if extent expect down increase truck lines then drag But it will our to it on excess thing inside on rental is we a rate continue hedge it you the when future. guess The basis. fleet. the lease statement income kind see and XX

Justin. a driving what's that's So,

Unidentified Analyst

it. Got

Rusty Rush

Yes.

to The market tight. the other we has remember thing been know, labor extremely is, as

So, dramatically like do. have, July on early across in pay course raised we quite what we company we the X, the usually whole plus did double

the the too. So, was of inside -- that full quarter, that third effect we had

So, it's important to understand that also.

Unidentified Analyst

Makes time. sense. Thanks. Appreciate the

Operator

Thank management you. over for remarks. back call closing now turn the to I would like to

Rusty Rush

February participating. appreciate I holiday. will everyone thank listening today and be everyone sometime talk before It hope for has everyone, happy to in I we that. Well, a again. Well, you,

everyone you very much. thank bye. holidays see We'll Bye, happy February. wishing So, and you in

Operator

participating today's for conference. for the of concludes all Thank This you rest day. your

You may disconnect.

Rusty Rush	Chairman, CEO and President
Steve Keller	CFO
Mike McRoberts	COO
Jamie Cook	Credit Suisse
Andrew Obin	Bank of America

Rush Enterprises (RUSHA) 26 Oct 222022 Q3 Earnings call transcript