October 23, 2013
Rush Enterprises, Inc. posted a third quarter net income of $15.2 million Wednesday, up from $14.9 million the year before.
The company’s aftermarket services continued to surge, accounting for more than 64 percent of the company’s quarterly total gross profits.
“On-going demand for maintenance and repair of aged vehicles combined with our focus on aftermarket solutions continued to drive our strong parts, service and body shop revenues and absorption performance,” says W.M. “Rusty” Rush, Chairman, CEO and President of Rush Enterprises, Inc. “Our primary service goal is to always help keep our customers up and running. We remain committed to expanding our portfolio of parts and service solutions, investing in technology to improve diagnostics and customer communication and replicating best practices and exceptional customer care across our network.”
Third quarter parts, service and body shop revenues increased by 22.2 percent compared to the third quarter of 2012. Rush added he expects parts, service and body shop revenues to remain strong throughout the remainder of the year and into 2014.
Parts, service and body shop sales revenue was $257.5 million in the third quarter of 2013, compared to $210.7 million in the third quarter of 2012.
As for selling trucks, Rush exceeded expectations there, too.
In the third quarter the company’s Class 8 retail sales, which accounted for 5.2 percent of the U.S. market, increased 15 percent over the same time period in 2012. The company’s Class 4-7 medium-duty sales, which accounted for 5.4 percent of the total U.S. market, increased 47 percent over the third quarter of 2012.
Light-duty truck sales jumped 42 percent, up 152 units over the third quarter of 2012.
“We are encouraged by Navistar’s progress over the past several months in regaining customer confidence in their truck and engine combinations,” Rush says. “This was evidenced by their increase in order intake in September, the highest since December of 2011. We believe there is strong marketplace acceptance of the Cummins ISX 15-liter engine and Cummins SCR technology on the MaxxForce 13-liter engine in Navistar’s Class 8 products. We expect similar acceptance of the Cummins ISB 6.7-liter engine for medium-duty trucks and school buses. This progress has contributed to our increased heavy- and medium-duty truck sales this quarter.”
The company delivered 2,605 new heavy-duty trucks, 2,421 new medium-duty commercial vehicles, 515 new light-duty commercial vehicles and 1,635 used commercial vehicles during the third quarter of 2013, compared to 2,272 new heavy-duty trucks, 1,650 new medium-duty commercial vehicles, 363 new light-duty commercial vehicles and 1,211 used commercial vehicles during the third quarter of 2012.
Industry experts forecast 2013 U. S. Class 8 retail sales of 188,000 units, a decrease of 5.4 percent compared to last year. Industry experts forecast U. S. Class 4-7 retail sales of 183,500 units in 2013, up 11.7 percent compared to 2012.
“We expect truck sales to continue at their current pace for the remainder of the year,” Rush adds.
For 2014, industry experts estimate U. S. Class 8 retail sales to reach 215,000 units, a 14.4 percent increase over this year, but down from previous estimates. U. S. Class 4-7 retail sales are estimated to reach 193,500 units, up 5.5 percent over 2013.
“Based on current economic indicators, we expect truck deliveries will accelerate in 2014,” Rush says, “resulting in increased truck sales.”
Between July and September, the company completed acquisitions in Kansas, Missouri and Virginia this and entered into purchase agreements with two dealer groups to acquire locations in Illinois and Indiana.
When complete, the acquisitions will expand the Company’s contiguous network of Rush Truck Centers to 106 locations in 20 states.
“These acquisitions provide us with significant presence in the Midwestern United States and Virginia markets, where we had not previously operated,” Rush says. “More importantly, they will expand our service network to provide coverage along highways that run from the Midwestern to the eastern United States, allowing us to serve trucking companies operating in these specific regions as well as those whose operations route through these states to other destinations.”
The company also opened a new International parts and service facility in Springfield, Ohio this quarter and will open a new full service Peterbilt dealership and Paclease commercial vehicle leasing and rental operation in Corpus Christi, Texas in December.
The company’s gross revenues hit $913.1 million in the third quarter, a 22.5 percent increase from gross revenues of $745.1 million reported last year.