Rush Enterprises Announces Fourth Quarter and Year End Results

2 March 1998

    SAN ANTONIO, March 2 -- Rush Enterprises, Inc.
, which operates the largest network of Peterbilt heavy-duty
truck dealerships in North America and a John Deere construction equipment
dealership in Houston, Texas, today announced the results of operations for
the fourth quarter and twelve months ended December 31, 1997.
    In the fourth quarter ended December 31, 1997, the Company's net revenues
totaled $118.5 million, up 26.9% from the $93.4 million reported in the fourth
quarter of 1996.  Net income in the fourth quarter increased $333,000 to
$1.9 million from the prior year's quarter of $1.6 million.  Earnings per
share in the fourth quarter increased from $0.24 to $0.29, or 20.7%.
    In the year ended December 31, 1997, the Company's net revenues totaled
$399.4 million, up 16.2% from the $343.7 million reported in the previous
year.  Net income increased $112,000 to $5.4 million from the prior year pro
forma level of $5.3 million.  Earnings per share decreased from a pro forma
level of $0.94 to an actual of $0.81, or 13.8%, on an 18.9% increase in the
average shares outstanding, resulting from the Company's initial public
offering.  The 1996 results were reported as pro forma figures, computed as if
the Company's subchapter S earnings were subject to income taxes.
    Additionally, Rush today announced through its Rush Retail Centers
division, that it has acquired the stock of D&D Farm and Ranch Supermarket,
Inc. ("D&D") for approximately $10,500,000, with the purchase price being paid
in a combination of cash and notes payable.  D&D operates a retail farm and
ranch superstore, in the Greater San Antonio, Texas area (Seguin, Texas).  D&D
generated revenues of approximately $17.0 million for the year ended April 30,
1997.
    Rush will continue to operate D&D as a full-service retail center under
the Rush Retail Centers concept, which Rush believes will provide increased
opportunities for expansion into additional metropolitan markets.  As
previously announced, to facilitate the planned expansion, Mr. Daryl Lansdale
will serve as President of the newly formed retail division.
    W. Marvin Rush, Chairman and Chief Executive Officer of Rush Enterprises,
Inc. stated, "The results of the entire fiscal year reflect the difficulties
encountered during the first half of 1997.  However, the results of the second
half of 1997 and particularly the fourth quarter generally reflect the
strength of our business.  The fourth quarter earnings growth of 20.7% coupled
with strong revenue growth has positioned us for the upcoming year.  We remain
optimistic as to our prospects during 1998."
    Mr. Rush continued, "We remain committed to our strategy of industry
consolidation and believe offering high-quality service to our customers over
a wide geographic area will enable us to realize economies of scale and more
favorable purchasing power.  In furtherance of this, our acquisition of D&D
creates an exciting new avenue of strategic diversification as well as an
opportunity to market additional products to our existing customers.  By
following this strategy, we believe we are poised to become the dominant
player in the truck and equipment dealership industry, all while generating
increasing levels of revenues, earnings, and shareholder value."
    Rush Enterprises operates the largest network of Peterbilt heavy-duty
truck dealerships in North America and a John Deere construction equipment
dealership in Houston, Texas.  Its current operations include a network of
dealerships located in Texas, California, Oklahoma, Louisiana and Colorado.
These dealerships provide an integrated, one-stop source for the retail sale
of new and used heavy-duty trucks and construction equipment; aftermarket
parts, service and body shop facilities; and a wide array of financial
services, including the financing of truck and equipment sales, insurance
products, and leasing and rentals.
    Certain statements contained herein are "forward-looking" statements (as
such term is defined in the Private Securities Litigation Reform Act of 1995).
Because such statements include risks and uncertainties, actual results may
differ materially from those expressed or implied by such forward-looking
statements.  Factors that could cause actual results to differ materially from
those expressed or implied by such forward-looking statements include, but are
not limited to, those discussed in filings made by the Company with the
Securities and Exchange Commission.

                   RUSH ENTERPRISES, INC., AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF INCOME
             FOR THE YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
                   (In Thousands, Except Per Share Amounts)

                                         1995         1996         1997
    REVENUES:
    New and used truck sales          $192,949     $258,613     $290,495
    Parts and service                   53,368       64,505       78,665
    Construction equipment sales           ---          ---        7,518
    Lease and rental                    10,058       13,426       14,761
    Finance and insurance                3,980        5,855        6,026
    Other                                1,279        1,262        1,904
       Total revenues                  261,634      343,661      399,369

    COST OF PRODUCTS SOLD              219,059      289,143      334,583

    GROSS PROFIT                        42,575       54,518       64,786

    SELLING, GENERAL AND
      ADMINISTRATIVE                    31,238       40,552       50,618

    DEPRECIATION AND AMORTIZATION        1,846        2,416        2,977

    OPERATING INCOME                     9,491       11,550       11,191

    INTEREST INCOME (EXPENSE):
     Interest income                       ---        1,118        1,155
     Interest expense                    2,886        4,171        3,668
       Total interest expense, net       2,886        3,053        2,513

    MINORITY INTEREST                      162          ---          ---

    INCOME FROM CONTINUING OPERATIONS
     BEFORE INCOME TAXES                 6,443        8,497        8,678

    PROVISION FOR INCOME TAXES             ---        2,295        3,298
    INCOME FROM CONTINUING OPERATIONS    6,443        6,202        5,380
    DISCONTINUED OPERATIONS:
     Operating income (loss)              (224)         ---          ---
     Gain on disposal                    1,785          ---          ---

    INCOME FROM DISCONTINUED
     OPERATIONS                          1,561          ---          ---

    NET INCOME                          $8,004       $6,202       $5,380
    BASIC AND DILUTED EARNINGS
     PER SHARE
     Net income loss before
      discontinued operations            $1.50        $1.11         $.81
     Income from discontinued operations   .36          ---          ---
     Net income per common share         $1.86        $1.11         $.81

     UNAUDITED PRO FORMA DATA:
      Income from continuing operations
       before income taxes              $6,443       $8,497
      Pro forma adjustments to
       reflect federal and state
       income taxes                      2,448        3,229
      Pro forma income from continuing
       operations after provision for
       income taxes                     $3,995       $5,268
      Pro forma basic and dilutive
       income from continuing
       operations per share             $  .93       $  .94
    Weighted average shares outstanding
     used in the pro forma income
     from continuing operations per
     share calculation                   4,297        5,590

SOURCE  Rush Enterprises, Inc.