April 22, 2014
Water pipes and propane dealers weren’t the only ones put in Mother Nature’s icy crosshairs this winter. Rush Enterprises, Inc. Tuesday announced for the quarter ending March 31, a net income dip of roughly $1.5 million to $12.0 million, citing widespread dealership closings in harsh winter conditions.
“Our truck sales performance outpaced the U. S. Class 8 retail sales market and parts, service and body shop revenues topped $300 million, setting a new quarterly record, despite harsh weather conditions and multiple shutdown days at our dealerships in Georgia, Illinois, Indiana, North Carolina, Texas and Virginia during the quarter,” Rusty Rush, Chairman, Chief Executive Officer and President of Rush Enterprises, Inc., says. “We believe these shutdown days represent approximately $3.5-4.0 million in lost revenue potential…”
Rush says his Atlanta location was closed five days due to weather, costing the business revenues tied to immediacy of the need.
“It’s very difficult to recover that service labor because you’re selling time,” he says.
In the first quarter, the company’s gross revenues totaled $958.7 million, a 26.7 percent increase from gross revenues of $756.8 million reported for the first quarter ending March 31, 2013.
Aftermarket solutions accounted for approximately 66 percent of the company’s total gross profit and first quarter parts, service and body shop revenues reached a new record quarterly high, increasing by 33 percent compared to first quarter 2013. Parts, service and body shop sales revenue was $309.0 million in the first quarter of 2014, compared to $231.5 million in the first quarter of 2013.
“Continued strong demand for repair and maintenance of aged vehicles, service support in the energy sector and incremental business from our range of aftermarket solutions continues to drive strong performance in our aftermarket business,” says Rush.
U.S. Class 8 retail sales were 45,291 units in the first quarter, up 15 percent over the same time period last year. Rush’s Class 8 sales increased 30 percent over the same time period, significantly outpacing the industry and accounting for 5.9 percent of the U.S. Class 8 truck market.
“Overall, when you look at the year…I expect to end the year at 6 percent (market share) in Class 8,” Rush says.
“With improving general economic conditions, including activity in housing and construction, we began to see Class 8 truck sales improve last month across a range of market segments and throughout most regions of the country,” Rush adds. “We saw particular strength in energy and vocational segments operating in the South Central United States.”
Rush’s Class 4-7 medium-duty sales increased 1 percent over the first quarter of 2013, accounting for 4.6 percent of the total U.S. market. Rush says he expects to settle the year near 5 percent marketshare in this segment.
ACT Research forecasts U. S. retail sales for Class 8 vehicles to reach 217,000 units in 2014, a 16 percent increase over 2013. ACT Research also forecasts U. S. retail sales for Class 4-7 vehicles to reach 193,500 units in 2014, an 8 percent increase over 2013.
“Consistent with industry forecasts, our Class 8 order intake has improved as well,” Rush says. “We began to see our backlog increase at the end of last year and the increase continued in the first quarter. We expect our higher rate of order intake to continue throughout 2014 as on-highway and vocational fleets replace aged vehicles and add some capacity.”
In January, Rush Enterprises completed the acquisition of certain assets of Chicago International Trucks and Indy Truck Sales, which operated International commercial truck dealerships and Idealease commercial lease and rental operations, adding 10 dealership locations to its Rush Truck Centers network and expanding leasing capabilities in major leasing markets.
“Within 13 months, we added 37 dealerships to our network footprint, supplementing our existing Peterbilt network by growing our Navistar Division in the Midwest and Mid-Atlantic regions of the country,” Rush says. Rush Truck Centers now has 106 locations in 20 states.
“We continue to invest significantly in our Peterbilt Division, with new construction and remodel projects underway that will enhance capabilities and increase capacity at locations in Arizona, California, Colorado, Florida and Texas in 2014,” Rush said. “We have also begun facility improvements to existing Navistar dealerships in Ohio, Idaho and Missouri.”