RUSHA - Earnings call 3 2023 | Rush Enterprises, Inc.

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

Operator

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

Third Quarter 2023 Earnings Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Rusty Rush, Chairman, President and Chief Executive Officer. Please go ahead, sir.

W. Rush

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

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

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

Steven Keller

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

W. Rush

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

We share. dividend to a $X.XX per declare are of proud common cash

quarter, financial to growth workforce. results our achieved the revenue technician we expanded due service In from third strong

ongoing Our a Class years. new X-X the of limited over pent-up trucks new national support accounts Class large few and past following for demand X and truck production

results freight third other over-the-road partially achieved the and our segment, in financial high being low us initiatives on negatively rates, are ongoing quarter. helps challenges customer offset customers largest our Though the and economic rates strategic parameters focus strong by interest these [ ], affected

our revenue for up accounts base, XXX.X%. our our compared national quarter. workforce Though absorption revenues focus aftermarket, previous this has diversity our the and technician parts, In growth slowed, aftermarket rate shop of results large and The body quarters. our our has on to fueled slowed customer were strong million, $XXX.X X.X%, service aftermarket

the parts could through and year, we to aftermarket which will demand. and consumer believe service growth we rest ahead, are impact of closely and continue moderate condition Looking spending economic monitoring this other

fourth our adjustments the in be softness aftermarket for demand by customer third slight working and with normal services and will that steady fewer similar seasonal the quarter. In believe will to quarter, quarter, caused remain the we results aftermarket days

Turning truck affect U.S. quarter, demand over new to market sold for truck sales. X,XXX continues freight ] X the the production Class limited Low smaller continue few in We to strong in but Canadian X.X% the operators, of [ pent-up due continue past trucks to to market. to total and rates the X.X% guiding -- years.

is there supplies allocation significantly to improve there's causing for shorter types is still new on from in quarter, While -- OEMs, be resulting us truck new production our truck drugs. lead to new third still in continued still the that

results. sales, U.S. performance fourth compared truck quarter XXXX. forecast truck Class third X believe pent-up the be and We fourth XXXX, through with Class X Research quarter $XXX,XXX to our Class for align will ACT last sales in trucks our will X truck up then quarter X.X% demand

for and sales medium-duty and market. variety quarter, to solid demand experienced the truck the devoting in market We the X.X% trucks. reached new X,XXX X-X a demand in quarter the limited market -- Canadian third resources truck Class Production of X.X% Our accounting units of remains. from fourth and more unmet manufacturers segments market U.S. of those remains

X-X U.S. to units to Class from Research be XXXX, ACT for XXX,XXX X.X% up sales in XXXX. retail

align fourth quarter economic quarter results impact other expect which factors, watching our consumer could but we significant new third [indiscernible] X-X spending and Class with our pent-up results. demand closely units, will continued are We with our

X,XXX X.X% year-over-year. up in quarter, reached sales units truck third used Our the

continuing the slow with rate in With continued is to of to tight and soft to at production, be production our rates, truck new truck the normalizing. fourth rate, in third decline freight to quarter. appear increase values improve rates credit quarter. weak Used conditions led significantly to values -- the though not truck expected continued demand New an industry freight decline in accelerated

expect used to our We demand of We market these low we at maintain truck than the will levels inventory end positioned to to and navigate believe plan challenging remain year. this lower well normal conditions. are

quarter. fourth results our truck with third quarter again used our expect will consistent be We

substantially will the and that ahead, of by As the end the fourth improve. truck we Class X demand we new production look for believe be that continued to trucks quarter, satisfied has

are our over-the-road to factors, continue our economic impacting We carriers. customers, especially monitor which will

financial typical the expect and close year quarter, in fourth the strong. with align the we results seasonal third While we will our softness will results we believe quarter

to service As every for our always, initiatives work is employees for company's important their me our providing superior to on it for staying and long-term day focused thank while great customers. our strategic

that, your With I'll take questions.

Operator

with Our the line Bank Instructions] of question from America. Obin [Operator first of Andrew comes

Andrew Obin

are team. How Steve, Rusty, you?

W. Rush

Andrew. Thank Very you, good.

Andrew Obin

is, they Traton question saying today think think So units to on engine new they're first ship Navistar of quarter 'XX. and in that sales start to expect I starting SXX was the

So of sort does you're model of on And on engines Cummins us franchise this vertically forward? remind have the you can any the your positioned Navistar going how PACCAR? outside profitability impact in also on your integrated

W. Rush

it. comes that most That thing excited with drive, we're said, be get the brand. you slower more to We the Navistar we're up showing know of with excited excited be were that about it it that We we're we've is anticipated to that hoping than start excited what important to few and engine this profitability what will Remember, to more with than Well, makes Well, believe it. a It's getting parts [indiscernible] great we profitability. about it. a performance here. it we You Volkswagen we'll the typically, and it going XXXX. But long-term parts it a what become bet. SXX because year about is when we're little excited, the in goes gotten.

effect the overall of profitability in have Navistar that of expect would franchises. we to the So over the time definitely an

I'm thinking understand because... to question. about Obviously, your comments trying

Andrew Obin

Just Yes, just position? what's us. with with what's relationship remind Cummins? your And happening Cummins? your What's

W. Rush

great. From Sure. dealer, Cummins and largest delivery. an the world, we're Cummins would X when largest engines, PACCAR So we're we're dealer to or guess, our retail Navistar comes of relationship considering Well, the we're their the perspective, the retail and distributor the in Navistar, dealer largest largest engine customers right? is [indiscernible] probably largest I it

X the haul wrestle dealing X%, what think than around strong all increase a prepare has can on they bought Clean always X% because -- just next which have we over here relationship board. we is believe the much believe XX% Cummins with the X, that, our We gas Remember, it as a -- also X%, our environmental that. Technologies accelerated to X%. for X natural share with increase truckload that in the big for opportunity 'XX, pressures stayed that pressures the It's joint CCFT share because Fuel is that we deeper share them system We JV, as call over-the-road the market with. we the the got years we've long investments we we're January across have fuel very what and especially side, what it's side, side from both to to -- our that venture,

needs Right And on when away away. of is a the electric fuel I a it for that don't Hydrogens ways to believe now. is set XXX, daily right those basis. now, cell ways meeting XXX-mile still comes None are a away. of are ways haul up

as other a we've that their the So that really opportunity a but system accelerate engine. of And that believe lot we get partnership we got do 'XX, over fuel we 'XX, believe us, believe 'XX, 'XX, 'XX XX-liter from and to to really starting doing in be for 'XX, into new they're getting is side. going bringing we to well around

have with So as a with always. continue broad that working relationship very we're I And relationship like forward to it's them have them. to to and said, we excited

Andrew Obin

And follow-up QX. that on sort is just your to -- be roughly QX going of line a in of sort with question saying

the quarterly about the hate right? sort of but asked sort sales call sustainable We And unit is sort new question of around But power, is and I telegraphing sustainable to a be it own know How going year. are your then sort don't I let's forward? earnings you're going down know, you that of to next $X.XX of dynamic be the that pace, have aftermarket. how

W. Rush

what if how But of that. Well, I about we a as me let in more and about how view see fourth always. broadly, stay year. the number, little I to going more Andrew, depth next off I'm in a change a little quarter talk not

but involved, washes in right? We puts puts said to QX. there's going expect think I It's similar similar, to QX, very be it it we from in all that, I takes, results should won't return around there's and sequentially. We we've and and the say but see, There's when When different. be seasonality fairly you be to end into release As the what [ perspective, takes. the October but ] flat, October. based up are a We got. the on out what already how know is same running it same, exactly there's

perspective. So a should truck you that gives from sales you some be what delivering outlook,

the So said takes. be there'll we said, but be QX puts we in the I some release, same, as would and -- about

than we'll believe books believe EPS better can do has what we than to to Class next glad probably the order to opened of you've September. us, for way we into do we I'm not hoping, dramatically. believe, they up you, be that. into Now better the X a understand say that okay? you is can got But market, Looking well, remember got we to like going exact not ACT XX%, that market down. get to We're with to just little we do year, down like We but that in in that. got

so, so, little up July XX,XXX open or You September earlier in happened saw "Oh, the It Remember, into like is last I got XX,XXX -- like goodness, their order was or like to books dive used order we've big year, manufacturers Well, People what's think around September to got the remember intake." units, it. number. correctly. you've right? if typically this year, deeper was my a right? And the go, I

else. the when the bad, had all right? we had run-up the everything they got years and surcharges Well, ago, pretty burned couple of inflation from side commodity in all We a

books to it. their order I when okay? an they September. that So up back a like and out in out they and open couple what they have they've count that is mean stuff months, X day now to of of like the take But done place orders push June pushed

they like was to the the of already get more -- OEMs they a with get factors So cost ordered because which pent-up did some with make comfortable for demand, got some released want I but not 'XX, and pretty they burn. their not you think burned had were customers ago, what couple by years had they pricing,

Let that's me tell et come you, in the and had to cetera. with why surcharges, all you

was September placed we're in by that really in June bit selves head manufacturer When little some open from a -- maybe and have it I want have because their may protecting there July, was there a didn't been cetera. number. they quick rise because It et released been fake, were So wasn't orders demand, maybe say to but of by just okay? pent-up it a commodity not costs, they the up sudden because some

as big, I XX,XXX -- people think, solve. that when really wasn't as So

only really on X business So September, for year. for again, we've next weeks been working

the to overall, the you in -- say, though, EPA laws that little I take to our can 'XX years. I be or 'XX or going down. us first market anticipate the to far. early It's before remember be be customer year 'XX. So but me, base. still going will -- we'll We 'XX excuse breath robust a to And of backwards bit Because of to through what of a Why? would it's it. going end that as to with very expect the in, get believe is 'XX a don't coming 'XX have diversity

you tell were be type don't drive the We be the we'd right, the carrier into it be down. be worse. build. of number money be I going closer all to [indiscernible] to freight to tied the be remember over-the-road, freight, that I stuff. from totally be would Again, to pumped given spent. vocational same. if the economy we small to my -- the it or would is to on diversity, that But expect If the I would infrastructure That's still expect side, got because -- you

a didn't So of freight been market recession. plan just know -- a segments we that a lot We've in -- that. and look, recession. should I other that there's a freight better maintain we're lot in the than

Just year was on We've I out. mean results, with customers. go check check the lot -- now. check a of it just a one I the all for been

it week year. still I expect the know and beaches was because at yet. to hopefully maybe we missed back bottom. It's on sometime Well, April next probably ATA, along. it that Last hasn't clean all but not everywhere. I pick date it's don't before the hope market exactly I still bobbling up,

Just anticipating, contract least people rates at still check not their [indiscernible] on rates out taking spot still -- People in the business. of their side are the that are of hits taking

small pushed The just at a There's guys We XX, supply much out there. still days little long just prices bit trucks. rise have. were lot. too over-the-road a in are We've on getting the with XXX that fuel had the

the will it is okay? of So get out, we're be X to truck still always to pushed that the but it which out, -- piece it's trying Class business, largest does, trying pushed

I So I you I'm and what the on think reflect but on, go can I'll gist try saying. -- get could of to

Parts about also. of service, you that asked

I will slow We to and at growth As where in to the there you fairly now look flat look, deeper down, got line, revenue dive it. go, little at Well, would we're were if okay? understand X.X%. you at a only rates really the understanding we're you

to guys Well, account the out. Those XX% by freight problem caused types. roughly unassigned business that's our salesman of are have that small making accounts real The call It's to recession, not dedicated big still of That business. flex everything is as to still but -- cash customer, the was the is of have they that's what okay? the business we XX% the positions The folks. inside cash That good. still write piece money, are XX%. much you ones is those They're don't out. our it almost great or

our piece carriers. folks of higher-margin are big But right? those business, You're public also Okay. a

nice people us, for fortunately, around that for quite stuff real after business, account -- some going So had we've dedicated some out and done up is national really business going dramatically.

in too, we've small but continue of it's lot it, we'll going So okay? offset, forward. business. success to high because our that that business, as around that should steadier margin but not focus helps had pace cost a be that and a It's to a on It's

we year. it's It's our business feel a we'll plays little good So have to tougher good just a see bit early. year But be pretty how next to about out. but going still model,

then think But might okay? what it with the few is last I think years. You done wrong, we've company over the

years. terrible, and as tell Let's going the very look be being 'XX X all we good but as the I with And 'XX at 'XX, not the in in Even going forward. not probably can 'XX you. to as as last results not results okay? it's believe good or That's strongly

Andrew Obin

So it know me, bet me, the set ask. for last I you think and I question and the you I'm going to up question for

slowing. as ahead earnings are things keep even You well consensus, delivering of

you everything consensus, message control, you're your versus excellent at to SG&A you're if the think do. seems you're -- up coming coming look doing out I quarter, supposed fourth

know You be is not going next to year good. that the

X% like, on 'XX when You particularly to going company also very day to going thinking in is numbers? up buyback deliver. stock down about is know what What's sort you the a is of today environment, what this know and share stepping like Board's on 'XX solid look the

W. Rush

I afternoon. right? Board question, just yesterday Good the finished meeting,

going shareholder cash That particularly to return do, Andrew. detail We and year. and -- We we've we're been stock year, we return want want to XX% been what got fact, we this this stepped a a We return dividend a great to up to In between me. XX% pretty as XX% doing. said, what XX% of to look we've it return excuse stated, value. we That have buyback. doing wouldn't it at we've flow, combination free said -- and going okay? We're said,

don't is XX%. year. more see next the don't us I returning FCS I returning much whatever us see than

in I've got make money I I M&A build cushion, along. think in like comes want to case a to sure you of some

but M&A show this $XXX to year, we backwards, okay. able have going and to to now, And great I a decision. million not make be typically, M&A everything. going do We're spend to right? with I feeling the anticipate want don't we'll so right positioned downturn, that the might We're know, up, have some -- You I would any be whole us

we We you're the truth, have get on a as to ball. make call Board XXth by further weeks that nNovember look never know helps, little a so call, in another determination you want if trying the few to crystal the to

they a have X X announced got left up that's every when our announce what November So for Board December because December because when year XX be. no we buyback for we've is calls will they is

about So stay that. tuned

Andrew Obin

feel Well, Great you I it. about know quarter. what

W. Rush

want bet. M&A need to it a I have and take to sure ] I'm best want balancing as but we know, prepared believe You [ you. we we might I debt the don't make. want we I there's I be able is of investment still up some can to don't to totally and just to Andrew, I'm agreement act, with in take I everything said, go, and make care while possibly to show

Operator

Stephens. the next comes of [Operator with Long from line Justin question Instructions] Our

Justin Long

right back Well, can we the unassigned, to are customers things a I were to like with like some wanted you question feel earlier. you that start small customer the saying going share how do accounts relative has you on mix, feel performing side XX% Do the trends? bottomed the you national on other this there are so And understand coin, down quarter? your then just activity now the of

W. Rush

get XX%. going comps don't like easier. No, but I said, to are that have answer, you the down Sure. numbers, -- I get the I'll

They're okay? don't know mean you're there, okay? -- and last And I met when up. freight right year-over-year comp, basically if points heard I cleansed was that barely you, customers with for out breakeven there couple there that yet, there. we've to folks in at yes. hauling totally another There's fuel, tell numbers lot to people might be on are Sequentially, I of has still the been the X I I for slashing got week market I that pay I okay? going a that free left probably only ATA. my there going if of some can I some were out was heard So know buddy. don't or not

So another here, it's that to [indiscernible] continue keep for to you're going So months out. X okay? flushing means some

would knowing the year-over-year market comps I But have Sequentially, bit same. that year, to right? more, QX that as may bad Okay. a with expect it it wasn't around last and be QX the little

tell how you to would stay But talk I be on would I year would worse depends because that a suggest guess, will went on. similar it what it So on basis, it. you want about I the in got year-over-year it me

comes it and When people. because in company. of valuable ability second first all lot it this the inside of our piece we That's a business are most on account foremost. proud G&A to the always tied really focused first, dedicated some and national to is I of My grow our put on people with that. the directly that money business, piece efforts our spent of we're because

out else's companies take got that you And map can you My feel for not they're with or we but can conquest folks, people, that is provide We've when out the of folks do some bigger still or with there's mean names we consistency a accounts many -- many sure this an begging that large continue to with. provide that with has meetings there I to large I But and anybody like earnings on is to years endless, your to I business plenty week, mean consolidation over I me the analysts, can do I and But or national to know us interview my as bigger opportunities go consistency, to that than you and continued and I'm for capture us. sat going do any will map. and almost we it When call. can somewhat. plenty around of name business not last second our piece don't opportunity. come industry map service, is of map. ability get

XX%. what And solution, but or I'm where of Regardless it's I what up yourself still we but your of down really down, is that, a do kind about. can't it's the can it's competition different is I know good all margin, it's and business the is But business, provide understanding right? -- that change at growth being about differentiating we a grew -- talking lower little a XX%, environment.

to keep the piece our service business. account into got And is other you

parts but to Why? a business service our We this them business, brought grow. year. expect mobile. many we business technicians to our expect next in take Because We be service XXX up year, we may hit some of

demand it's a got great. of is the We and array to ago, to providing competition We've kind get those XXX there, a basis now. goal larger doesn't have XXX to we're type to a on of our that asked we X,XXX, of And mean year consistent okay? plus me out a get -- to that an is something on for were map, go services just thing

right now. listening So we're all

there's same and able the a having but tie of good And being we all at replay. that's by it time, But to -- to brand. larger together, [indiscernible] regardless differentiate map try

all a There's proprietary. of It's It's not still lot all proprietary. not vertical.

year-over-year basis. of goes quarterly or left look best a we really there. When market go That's to care that as lot the could don't So in We take we're We grow got goes change -- market up folks. down, think either able I give and to it forward. we runway for consistently on definition we can you. the the a of

Justin Long

truck the numbers it have sales. and you And on to expecting plays grow you parts grow to year helpful. Do out, If your should still now And how for like that that, to trend close order That's they're earlier it. continued next act Got magnitude? you pretty so, Class XX% in any feel X if and mentioned we a lower, ability if think thoughts is it? can of the decline service? about reality

W. Rush

Sure.

will to comps that it's got this QX year-over-year guy little flat in when get shift small we QX that get more that's margin when account. a I because right? start we and made earlier, Remember, towards our think a was out the better -- some it little tougher. I into speaking national Yes, that because year,

You can see it.

You the it parts can in and profit. see numbers service of

overcome we We be to -- first but We least expect like think had There's We're a year, that better little effect. we next XX% we -- a growth wheel. expected that. trough it quarter can a We year. quarter. We're do not to it at going would to that do this But have think next going tell no QX or like rate. maintain. you was not would have I question, some

I'm do We do don't see volatile I'm right out not big, guarantee decline I probably continue [indiscernible]. now. QX there. were But [indiscernible] right pretty type probably that future any -- around been what in dynamics huge the X.X% probably and based I We at can't in -- use will because same on it's dealing to the would that QX, and in I not times have dynamics. of I market going QX with that we're same not now. expect watching to we're the bobble hoping

got that customers. think. we think around effect? have to we Will growth believe to service sales truck up work, our our We by our think we little we've it. internal us, larger with dedication are an available a But around strategy got in I and Yes, the less what it in where could are keep get arena it we can less overcome really a there other areas picking obstacles out

So I I a internal it less on lot of is sell of trucks a here headwind, trucks to it it getting is. going do ready. because work course, [indiscernible] we mean, somewhat to of sit can't we're

it up, keep believe sales, thinking a we probably side, takes. think and pounding -- outside a if QX in we're little down I'm service But parts that puts having indicative we'll but out of was even shift and some that I in some truck

to is I we in just that's But our a when like -- the -- of we're 'XX that diversification the I be customers over in this Remember, And so just over-the-road We'd the were it market look tied for so were many business. giving segments comps and committed speak themselves. are, we're that. my embedded to comes I'd from our like -- road remember, about. we're and to if but lot not talk if just getting 'XX, numbers just we year-over-year just to, crushed was other not,

into segments. diversified so are market We many other

Justin Long

question Got it. And last on for truck is me the used market.

into what You early talked trend you was of expecting truck if in could earlier. move wondering color you're little little about and more that XXXX? for bit But we terms a year-end a I give bit the used in as pricing

W. Rush

you gets go that hard down October, that -- as frame, same I'm XX% out September, I -- I what X-year-old to trucks let's for [ and don't to say, large too see XX% guess, more like-for-like new come There ] may value. be go of a sudden, around X guessing? in trucks take Sure. happens used we'd year-over-year between time probably all for the X-, price can be me or model of so, Well, late much it is spread another X because by it'd new.

that So whatever so that a gets when value spread low. when that creates I it eventually, say it proposition use on but yes,

getting Well, typically truck the is, person, used buyers is problem they're right? that small The crushed. the

You as have too, you to okay? want. take got cheap you price So demand, as can

market don't Now lease let's [indiscernible] place, spread difficult. looks really enticing. But if go it makes a it to have truck you because you on any don't have demand some

time. takes just it eventually, So

higher. Typically, yet. that you that have there over typical accelerating still It's was, to historically, So not right as see would little monthly demand now, a but we're I by said, to it a still -- it's back. I a what not as accelerated. it's is don't to Like It's we're basis. depreciation percentage dramatically little get it depreciation on call like piece we're going

that seasonally, always around through better we I -- until a it So little out we'll once that just saw time. in see changing we -- winter hopefully, And spring. do do anything maybe we get we I don't the get than

But I would that in, a would That's X that -- we people be is used X from years cycle I'm money before. trucks, time have because now, it's like something get The hope the was high -- too what hoping were so X.X normal months, you to for been by crazy. they couldn't got say, to that's X X paying we months on accelerate new that. accelerated So and get would depreciation ago way reason when the we years right? through trucks,

to And of take all out demand had so as with to back now we -- meaning continue the [indiscernible]. that we've

demand down. -- quarter a second should little of just -- So itself used next cycle year it sometime down still next is second second it's out business quarter used straighten conservatively. bit a for but be to values It's year, safe and late

shape. good But inventory we've we're line we're turns got inventory. trying about do. in know less is. the lower and with We've is, we inventory. okay, turns a feel because what always this we what like to our demand It's downside we're for is But little to truck used less probably get us carrying The upside have your much got turns. used pretty truck our be And we in

QX. margins back and typical to were Our QX in margins

It's trucks because fast that fine just that's So we with -- age. turn them we're just wine, be And they're can just trade we sure better to there. of make out we of enough have the top it still get going like and they don't cognizant day. every to stay on not demand for

dealing demand to inventory doing units. have So is unit controlled with inventories it it just with X,XXX I a inventory a would right tighter now, -- but of we're X,XXX don't out got now because because the -- we're we is of of not upwards I a but there. to sometimes, inventories demand comes job good right X,XXX fast X,XXX turn have

what just to allows market just was pricing, goes we'll used our the we'll inventory. us decent So closely. it -- And up, to maintain not but try valuations, truck again, margin, But in still that to increase it to start back to it goes monitor not and as a back demand. picking

Operator

turn Thank Rush like now questions. closing conference back I Mr. you for to for the to your remarks. would

W. Rush

Thank everyone happy holidays it. you wish to results. our I'd and speak appreciate will to much. early very we mid-February QX very we to like Folks, you a with

very So much. again, thank you

Operator

call. for conference your you today's concludes This participation. Thank

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

Rush Enterprises (RUSHA) 25 Oct 232023 Q3 Earnings call transcript