Earnings call transcript Q1 2023

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Marvin Rush

And welcome to our first quarter 2023 earnings release conference call.

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

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

Steve Keller

Certain statements we will make today are considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Because these statements include risks and uncertainties, our actual results may differ materially from those expressed or implied by such forward-looking statements. discussed cause implied to include, the by not and to could those materially but Commission. year that report Exchange filings limited or annual with XXXX expressed such those our ended factors December actual XX-K and differ results from are on XX, Important Form our in for other in forward-looking Securities statements the

Marvin Rush

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

sales, We to demand for few outpaced common services and to on new due to excellence. initiatives, our support proud There years. strong quarter, maintained well declare are and four of are first a healthy proud largely past industry large we for $X.XX the share. we limited results We was sales a cash new in per well strategic of in Class quarter. and demand operational first aftermarket parts Class trucks, the fleets truck dividend as eight national truck and aftermarket as to and In significantly we widespread our focus as production the seven the medium-duty experienced over

and $XXX support. parts for body we service parts the ratio In our most aftermarket, XX.X% segments shop million, revenues of customer and XXX.X%. the service and strong first for experienced demand were In up the was absorption our quarter, we

mobile our across service technicians strategy the to add workforce, our mobile which We our presence long-term continue notably technicians, to expand to supports country.

when will and the moderate inflation first quarter the growth results. revenue, to compared anticipate continue our of slow we ahead, rate to Looking throughout the year, parts to

aftermarket workforce mobile will long-term remain continued this -- expanding strategically efforts national believe year. strong quarter our to our focus and initiatives, including with we accounts, However, revenues support after service on our

the new truck X.X% US total trucks, X.X% Class and in sold accounting to eight Canada Turning market for We X,XXX sales. market. the of

customers new Class units Research healthy US eight market fleets. over-the-road for for most pent-up to in particularly still there's large XXX,XXX segments, compared class demand to essentially energy flat XXXX, experienced ACT trucks, demand be While and we national hours, XXXX. sales call retail forecasts vocational,

allocation we backlog our our potential, second our continued quarter believe growth truck first truck and align sales with strong Class remains limit may eight While quarter results. our will

year. we Overall, this will results with industry expect consistent the our be

Our of trucks. shift get X,XXX with began Research up from caught units demand X-X in first to needs sales Class to in and the be of up the to see market segments. ACT the producing back market a XXXX. Canadian healthy resources while in of We Class X-X the not truck medium-duty reached for supply retail does manufacturers' accounting variety quarter, US the experienced Further, market. new X.X% sales X.X% X.X% US market, XXX,XXX units forecasts we XXXX, more truck from

to believe, demand continues and production regulations, of remainder for medium-duty continue customers as for prepare emission commercial for improve XXXX. be strong there the As vehicles will to upcoming we

new used increase trucks first reached low, due in year-over-year. for continuing remained the down truck X,XXX sales used the XX.X% drug Our largely Demand in units to quarter, production.

until production to and truck plan used carefully deterioration we manage new pricing truck increase As and inventory truck to stabilize. expect in value improve, we used continues levels, our begins further demand to

of quarter up revenue rental was Our XX.X% to 'XX. and compared lease the first

and in solid rates for rental our We quarter. the were experience utilization strong leased continue first vehicles to demand

for to and continue our of expect the overall significant XXXX. to remainder make profitability lease our to We rental operations contributions

XXXX. through will rest monitor will overall the we continue ahead, Looking of our factors, which we results remain impact may economic our to believe but industry strong financial

customers. well as With thank their that, closing, company's to Before our dedication to our great take goals, superior would to employees and work will for our I I any as questions. like service their for providing

Operator

you. with Long Stephens. Instructions] from Thank And Justin is our question [Operator first

line open. is Your

Justin Long

and the quarter. on Good congrats Thanks. morning,

Marvin Rush

Justin. Thanks

Justin Long

Rusty happen anything with happening inflation. given growth But get parts see or is the your you or moderation parts else on we're to with what's And, service start going service. I'll your year. would and some growth would moderation, driving consistent. and that's there love obviously, just the over is service forward ex-inflation going to thoughts parts say pretty remainder that of and remaining

Marvin Rush

No, out there. no, anything don't see I

rather last digits, believe to be honest. we all or execute pretty to okay? given the large seven year double coming plus are going six have years may would consistently close we moderate on implementing conditions somewhat I tell forward, the We strategic in continue -- that given the while some comps it been to over still you, we

would we were still I well some to there stuff the understanding quarters moderate XX-plus yeah also same-store a in few but the slightly perspective some that acquisition there, the expect percent next XX% Canadian QX. in were stuff score from over

talking high see growth just low and double it We'll still it we're later to overall how start, year. this to can't see out. plays outside of I inflation. but have got that will we singles with well predict So exactly,

good body know versus So I Well, I It's dealership, we just G&A the you profit everybody hope I shop number I again XXX.X%. service rate a -- rate we the gross -- of right? that see -- it's absorption believe put important. out, was and there. calculation of folks parts we it's about, think absorption feel very number.

Now I and from our acquisition that of Canadian that you that Summit. to the They important new with last our well take think it's along year acquisition are if acquisitions be number. would note below

two into had almost have never I prior ever number. would stores prior at mid-XXXs the ever could number acquisitions we achieve. thought that looked be would you we those to If that

of water thing. the way really going regimented is March on fact that business them Well, other stir year system on you really these them there's to So is add Over what August. to the brought between bringing explains of in just that we and plenty upside just to and and last to market an stores. our system not your getting

numbers our I So for room and for us the in those feel catch about outlook the as of very years forward growth good they right? parts sure to coming grow where is. locations, market service the have the rest going for overall up with So regardless of

You We're at people. very just not the different segments varied not just got understand, always market to We're to in to segment over-the-road diversified. we're to business; hitting market side. that the we I one in many go try explain location doing

it's there So pretty business -- is the vocational right out now. good not

on quality it and from But services a perspective out parts are of touching that's I I can So quality earnings bit but on a there. on mean of The and that there. go the Justin. see, I what little

Justin Long

in as it. And Okay, quarter is we second you is one into the but got the my move SG&A there That's anything on helpful. next Steve, probably share expected trend can for a relative given to forward up in it's going come expense last quarters? as first bit saw couple what quarter? we then the well of interest the on And thoughts good maybe

Steve Keller

significantly see as jump. Well, back cost. as in you sequential options you pretty benefit people incur In hit G&A -- us. as in QX, was and our benefit for from up what we to as year QX QX QX, We see amounts. typically taxes falloff won't issue -- earnings We another a which sequentially goes had will compared payroll normal kick we'll categorize employee-type that the of stabilize, that's lot

slightly even pretty down. it see flat You'll maybe

interest front, to elevated very the you'll last expect Inventory levels to similar be QX. QX would On I year. versus are --

interest product I $X to of about year. $X be. think $XX floor whatever and last a it million up versus believe it It's That's inventory. our carrying plan was rates of you million QX million amounts what on

though even bought up them while, things on remember to we're sit in do that. like we're turning inventory them quick. They got You while allocation a we and

going see point there's what of it rates maybe another the run think year depending the I'm bump. think the sure, So is your much to than rate outlook not to there's I quarter for you're I more that. remainder on if interest similar

going that the the remainder be to So for year. very probably of to similar QX

Justin Long

high-level I'll think and to forward, you very helpful. I relative about highs valuation we've we're see That's lows the it. for feels do seen Rusty. multiples going like going they're historically. missing? to close And market what with look When higher at I and still the think higher it today the What question is and business Got compressed maybe

Marvin Rush

growth our well of initiatives the our quality has aftermarket resulted The that above the our Justin. earnings. Based our upon chair. going I last fully old XXX, mentioned out couple in do strategic from it little understands earlier expense stores. good I'm as and absorption step to my market you're where has the the believe current and a here a question, But multiple right, bit Well our in to rate especially executing have of I sitting management improved not increased in strategic but been that years. how when execution

X the acquisitions you in. Combined, to to the the replacement market realize for XX-year per believe have that we Class last year. units US, normal over take in increased the average has the XXX,XXX when also I cycle

ACT I big industry we think believe cycle since trough we expected our market earnings as both the if Research improved how down such we've commercial the and experts to XXXX. performance, that, other in significantly last and

peak share. it is I've my XXX,XXX $X of units frustrating don't would that be of years, the and little a trough perspective don't I you that. the peak truly north pretty me that's earnings XXXX earnings at out. those sometimes. But a for ACT's be got Class for in XXX,XXX believe far units forecast from talk it ACT the say last a to correct, for could trough So When about and think I share – XXXX, been they've it couple looking X multiples people current of of operative That's at a from got perspective. $X at I've our which and company stepping could north usually understand be

and I with. what model it we into out at experts digs So, use That's the ACT. if going of to someone up industry come and lays most think you're deep looks the forecast

So, mean, don't that. to it I explain know than you better I way to a

Justin Long

of appreciate That sense. the Rusty, time. Thanks, makes lot a

Marvin Rush

bet. You

Operator

next And Bank of comes America. Obin Thank for moment One our Andrew you. next question question. our with from

line open. Your is

Andrew Obin

Hey, Hey, the to Andrew Obin. well. hello team as Rusty, guys, its

Marvin Rush

Thank hello , Andrew. you, teams And back. say,

Andrew Obin

I question have for and you think while. the for So a and I this had you debate

cash generating are You more and more flow. guys

$X earnings why not level the because number of missing Particularly back why you seems a frustration back your trough it get is were not is. on talking couple in more stock, peak we stock buying If stock so market -- the years but with number. I environment? there's buy your it's earnings this now more? about a And ago aggressive just know You a buyback are and of as where much

Marvin Rush

going everything not that. it get on that Well, here. I'm to specific Andrew, is how about the about table, right

I quarter. or the consistent. you know, are to the look in I buy We back back in out quarter. we $XX exactly. continue give million As did stock so

we've pace million on got We year, we million $XXX approved if approval. end of continuing you. of and through accelerating the about I $XX that and not the plan that hear bought And since back

is on your, the to everything So as buddy. I table, said

plan and sit call million, we $XXX $XXX the as on it, when to there the our approval I'm we doing this didn't right not we years that. pretty from few say, far on out right going probably as close you this million here of is executing to I to here buyback even -- last now, increased we've really but on can what tell plan execute got -- on

Andrew Obin

think get and be you has rate the holding expected. better that. expect service parts tougher? sort Can you that? to appreciate than talk just my relative of about to What's expectation, I for year I it What do as been your particularly progression comps the business? up exit driving Because the No, the of

drive and for sort of a business you. say customers, business know are sort We us a that you're your your customers, And we but who just this it Thank new after you people of some that larger much of not things that surface, going bit. changing little about large underlying your model. what how you're cases We in and do know parts business unpack lot maybe service of happening economy truck the even the -- know right? below

Marvin Rush

question. a big That's Yes.

years I it grow. We've great been it about our expectations comes a even been to the parts last on three years our I back, of continues mean, take touched We think, to some little look last bit if two, and consistent. and of over it you outperforming service growth. earlier. business, has a very I feel It the just couple okay? when

largest size, commercial the United we other for States even which have really When nobody by underestimate. the is, anymore, the even of And after trucks manufacturers also because our into and power a large without I one runs far, and brand to network numbers. mean, sometimes, the of network, underestimate you're you brands represent as we customer, getting network you a and We do in as go do many okay? okay? able

And you're that. to do equipped

four you we the around do too service parts we've believe to the goals -- your us, think put service by continue around then and on get specific, few -- our is proprietary that approach years, off take have you leveraging I to and you you execute I that people, years next of business, the as footprint and double initiatives business, three to some set and mobile to in whether last that. the like its in because we might the network strategic

You get numbers we're the about. talking

started about. if we Andrew, I when mean you, first I had knew talking

you XXX%, we we do customers, locations -- would that, go market, continue we dealership how And everything, and again, never do. our have look we are given this more when at continue to what customers I ever stores. Now, wanting. what people, facilities, believed This over we to find our but is attract running isn't could to

the up consistently to hodgepodge can I very service but a of can about all answer. provide consolidated We into want their networks. do And only it. marketplace. it's continue best They They're believe that mixed And I performance consistent numbers, get to one grow the I -- bunch in the we're that. going feel good not from we

continue customers. what That's dropping to taking all big a it we're to up service, get world dealership, the taking point providing reaching cities like person port, it having customers even, revenue. out to and producing this I to why more cogged -- know is And going more again. big the into and of the Those truck, thing, trucks said, pick on going to mobile a off, -- evolving. don't up inhibitors better driving I are

makes So that's of sense. lot why a thing the mobile

into the that's I all going anything And and the I change for get speaks Andrew, in itself can't performance see years but the last few to drivers, don't that.

I the much customer the of it here, So, believe you the this care we boss. things those to coin, employees customers. every us I Those And at numbers of taking already clearly did day into without are the when just, getting of growth telling that. the our are that comes mean, and one as end set the support says, is

Andrew Obin

Because that's vocational the a you question. my standpoint you Can of have you a just just you're you're really informed uniquely what us in us last walk question, economy? usual just Can Texas, you -- terms in And in seeing? Thank California, walk just you. can exposure Midwest. the in tell in Florida, economy of you you're macro from you're in you're point APRA to your you lot a view are of the have Mid-Atlantic,

MarvinRush

ago Florida state start to on right you throughout two was happy technicians let's group. and in lower tell I of weeks our just largest mobile mobile XX would I That working the over strong. that's still like the is Florida Alabama. Florida Coast, Certainly, Andrew. East about

their be strong. no less business year but last if out than not of expect we -- Florida. continues greater So And to year a

strong. extremely move I into also. really the you in Florida would reports. strong. give tell Texas bad Houston not you Colorado You continuing little to I and is that further doing better. up market Georgia be is to a any then going South bit you Southeast, extremely am would strong to grow seems growing. tell is I The

don't I to want anybody. Southern California, miss

but market go But I to -- broad-based back in -- blew one the it's don't customer segment on it it -- it to just to I all mean you mix. don't back goes telling time say the talks we segment. I our face. and our I'm mix market goes to

like interesting can this to you say something solid. try I geographically if It's everything that tell is to you

that's others. stronger I There Some than see Utah others. and I currently. well weak a of the that say that can are Mountain are map Idaho. than but some When is spots The on little West right better there that are really -- I doing mean no now.

to buys into side one trucks thing I'm that whether not international international trucks of other the and at buy able whether or all. network parts specific when going get talk two And But best the names whatever he is names, three from the and -- power customers say on the but service of my side or don't us of across to customer about side. of tells we're take company whole how power a you the from from business buy the the to largest trucks I leverage they even from our and the

We large we customers that by network. leveraging from even buy trucks us, don't have service that many but off

Difficulty] -- well doing still little in getting area. I'm where The was Midwest So, still a the [Technical Chicago in we're hanging there.

again So, I'm because what very can forever Andrew people have on accomplish. know ramble business able I proud you to our been as of about the

Andrew Obin

buy right. it. All to Rusty. Look updates forward on much back. the Really appreciate so Thanks

MarvinRush

You that got keep Andrew. it. I'll mind in

Operator

And no Thank it time. to I'm to Rush showing Rusty you. I turn over questions would at further like for closing back this remarks.

Marvin Rush

Well, appreciate was a I well, day big think we earnings today. -- it

companies we in and the think thank So, talk -- we for to loaded will analysts who participated, But you I of were with reporting all those July. today. everyone you

Operator

you And for participating. this concludes today's Thank conference call.

You may now disconnect.

Rush Enterprises (RUSHA) 26 Apr 232023 Q1 Earnings call transcript