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Rush Enterprises Inc. Reports Third Quarter Results

18 October 2000

Rush Enterprises Inc. Reports Third Quarter Results

    SAN ANTONIO--Oct. 17, 2000--Rush Enterprises Inc. , which operates the largest network of Peterbilt heavy-duty truck dealerships in North America, as well as John Deere construction equipment dealerships in Texas and Michigan, and two of the largest farm and ranch superstores (D&D) in America, today announced results for the third quarter ended Sept. 30, 2000.
    In the third quarter of 2000, the Company's gross revenues totaled $227.4 million, a 5.9 percent increase over gross revenues of $214.8 million reported for the third quarter ended Sept. 30, 1999. Net income for the quarter decreased 50.0 percent to $2.1 million, or $0.30 per diluted share, compared with net income of $4.2 million, or $0.61 per share reported in the quarter ended Sept. 30, 1999.
    The Company's heavy-duty truck segment recorded revenues of $190.3 million in the third quarter of 2000, compared to $183.8 million in the third quarter of 1999. The Company delivered 1,488 and 528 new and used trucks, respectively, during the third quarter of 2000 compared to 1,428 and 509 new and used trucks, respectively, for the same period in 1999. Parts, service and body shop sales increased 52.1 percent from $26.3 million to $40.0 million from the third quarter of 1999 to the third quarter of 2000. The acquisitions of the Arizona, New Mexico and southern California locations during the fourth quarter of 1999 significantly impacted the increase in 2000 revenues.
    The Company's construction equipment segment recorded revenues of $27.4 million in the third quarter of 2000, compared to $24.6 million in the third quarter of 1999. The Company delivered 230 and 68 new and used construction equipment units, respectively, during the third quarter of 2000 compared to 185 and 68 new and used construction equipment units, respectively, for the same period in 1999. Parts and service sales increased 22.0 percent from $5.0 million to $6.1 million from the third quarter of 1999 to the third quarter of 2000. Rental sales remained steady at $2.5 million, from the third quarter of 1999 to the third quarter of 2000. The September 1999 acquisition of the eastern Michigan locations impacted the increase in 2000 revenues.
    In announcing the results, W. Marvin Rush, Chairman and Chief Executive Officer of Rush Enterprises, said, "As indicated by our third quarter results, the truck and construction equipment markets remain soft. The oversupply of used trucks, high fuel prices and increased interest rates have negatively impacted earnings. We expect industry conditions to continue to weaken and have taken the steps necessary to operate in this environment. We remain positioned to take advantage of any opportunities that may arise."
    

                RUSH ENTERPRISES INC. AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF INCOME
         (in thousands, except earnings per share - unaudited)

                             Three months ended     Nine months ended
                                  Sept. 30,             Sept. 30, 
                             --------------------  -------------------
                               2000        1999      2000       1999
                             --------    --------  --------   -------- 
REVENUES:
  New and used truck sales   $144,128    $149,931  $444,652   $401,222
  Parts and service            47,693      32,949   133,346     94,567
  Construction equipment 
   sales                       18,388      16,592    56,799     41,191
  Lease and rental              7,845       6,936    22,196     18,273
  Finance and insurance         1,278       3,326     6,503     10,829
  Retail sales                  7,334       4,454    19,381     13,565
  Other                           703         656     2,980      2,452
                             --------    --------  --------   --------

TOTAL REVENUES                227,369     214,844   685,857    582,099

COST OF PRODUCTS SOLD         186,009     181,179   568,260    485,066
                             --------    --------  --------   --------

GROSS PROFIT                   41,360      33,665   117,597     97,033
                                                                     
SELLING, GENERAL AND 
 ADMINISTRATIVE                30,935      23,229    90,952     68,436
                                                                      
DEPRECIATION AND 
 AMORTIZATION                   2,502       1,483     6,829      4,270
                             --------    --------  --------   --------

OPERATING INCOME                7,923       8,953    19,816     24,327
                                                                      
INTEREST EXPENSE                4,426       1,977    11,637      5,343
                             --------    --------  --------   --------

INCOME BEFORE INCOME TAXES      3,497       6,976     8,179     18,984

PROVISION FOR INCOME TAXES      1,399       2,791     3,272      7,594
                             --------    --------  --------   --------

NET INCOME                     $2,098      $4,185    $4,907    $11,390
                             ========    ========  ========   ========
EARNINGS PER SHARE:

    Basic                       $0.30       $0.63     $0.70      $1.71
                             ========    ========  ========   ========

    Diluted                     $0.30       $0.61     $0.70      $1.68
                             ========    ========  ========   ========

  Weighted average shares 
   outstanding

    Basic                       7,002       6,646     7,002      6,646
                             ========    ========  ========   ========

    Diluted                     7,002       6,860     7,030      6,799
                             ========    ========  ========   ========