Peterbilt Dealer Rush Enterprises Reports Second Quarter Results
SAN ANTONIO--July 16, 2002--Rush Enterprises Inc. , which operates the largest network of Peterbilt heavy-duty truck dealerships in North America, John Deere construction equipment dealerships in Texas and Michigan, and three of the largest farm and ranch superstores (D&D) in America, today announced results for the quarter ended June 30, 2002.In the second quarter, the Company's gross revenues totaled $193.1 million, a 3.1 percent decrease from gross revenues of $199.3 million reported for the second quarter ended June 30, 2001. Net income increased 36.3 percent from approximately $1.5 million, or $0.10 per diluted share, reported in the quarter ended June 30, 2001, to approximately $2.0 million, or $0.14 per diluted share during the second quarter of 2002. These earnings per share amounts retroactively reflect 7,002,044 shares of common stock issued pursuant to the July 10, 2002 stock dividend. Earnings per share would have been $0.27 and $0.21 per diluted share for the quarters ended June 30, 2002 and 2001, respectively, had the stock dividend not occurred. During the second quarter of 2002, the Company recognized approximately $26,000 in pretax gain on the sale of property and equipment and recorded no pretax truck valuation and repossession losses. During the second quarter of 2001 the Company recognized an approximate $770,000 pretax gain on the sale of real estate and approximately $900,000 of pretax loss provision to increase the Company's reserve for truck valuation and repossession losses.
The Company's heavy-duty truck segment recorded revenues of $160.7 million in the second quarter of 2002, compared to $160.0 million in the second quarter of 2001. The Company delivered 972 and 535 new and used trucks, respectively, during the second quarter of 2002 compared to 998 and 524 new and used trucks, respectively, for the same period in 2001. Parts, service and body shop sales at our truck dealerships increased 15.7 percent from $46.3 million to $56.3 million from the second quarter of 2001 to the second quarter of 2002.
The Company's construction equipment segment recorded revenues of $20.1 million in the second quarter of 2002 compared to $26.2 million in the second quarter of 2001. New and used construction equipment unit sales revenue decreased $4.9 million or 27.2 percent from the same period in 2001. Parts and service sales remained flat at approximately $6.1 million in the second quarter of 2001 and 2002. Rental sales decreased from $1.6 million to $0.7 million, or 54.2 percent, from the second quarter of 2001 to the second quarter of 2002.
In announcing the results, W. Marvin Rush, Chairman and Chief Executive Officer of Rush Enterprises, said, "I am very pleased with our results and more importantly, extremely excited with the direction our Company is heading. First, our recent corporate stock restructuring was successful. We have doubled our outstanding shares to approximately 14,000,000 common shares, and have essentially overcome the restrictions on growth that our manufacturers' voting control covenants created. We now have the ability to use our stock to fund growth in the truck and construction equipment businesses under the terms of our dealer agreements. Second, in spite of a 2.6 percent drop in our new truck deliveries during the quarter, it is the third straight quarter our earnings have increased versus the prior year. This is primarily due to the successful results of our asset reduction efforts and our efforts to grow our higher margin parts and service business. Finally, the industry expects new truck deliveries to increase significantly during the third quarter, as customers accelerate their purchases prior to new emission regulations becoming effective October 1, 2002. I believe we are well positioned to take advantage of any acquisition opportunities that may arise and for continued earnings growth."
Rush Enterprises operates the largest network of Peterbilt heavy-duty truck dealerships in North America and John Deere construction equipment dealerships in Texas and Michigan. Its current operations include a network of dealerships located in Texas, California, Oklahoma, Louisiana, Colorado, Arizona, New Mexico and Michigan. 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. The Company also operates retail farm and ranch superstores that serve the greater San Antonio, Houston and Dallas/Forth Worth, Texas areas.
Certain statements contained herein, including those concerning industry conditions, 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, competitive factors, general economic conditions, cyclicality, economic conditions in the new and used truck and construction equipment markets, customer relations, relationships with vendors, the interest rate environment, governmental regulation and supervision, seasonality, distribution networks, product introductions and acceptance, technological change, changes in industry practices, onetime events and other factors described herein and in filings made by the company with the Securities and Exchange Commission.
RUSH ENTERPRISES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands - except for share information)
June 30, December 31,
2002 2001
(unaudited) (audited)
--------- -------
ASSETS
------
CURRENT ASSETS:
Cash and cash equivalents $ 21,343 $ 19,852
Accounts receivable, net 23,977 26,403
Inventories 122,282 114,305
Prepaid expenses and other 1,133 1,244
Deferred income taxes 1,072 1,508
--------- ---------
Total current assets 169,807 163,312
PROPERTY AND EQUIPMENT, net 129,215 132,196
OTHER ASSETS, net 42,052 42,703
--------- ---------
Total assets $ 341,074 $ 338,211
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LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Floor plan notes payable $ 87,502 $ 85,300
Current maturities of long-term debt 14,975 15,594
Advances outstanding under lines
of credit 28,237 22,459
Trade accounts payable 13,048 15,284
Accrued expenses 20,960 23,047
--------- ---------
Total current liabilities 164,722 161,684
LONG-TERM DEBT, net of
current maturities 79,487 82,576
DEFERRED INCOME TAXES, net 13,003 12,512
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred stock, par value $.01
per share; 1,000 shares authorized;
0 shares outstanding in 2002
and 2001 -- --
Common stock, par value $.01 per
share; 50,000,000 shares authorized;
14,004,088 shares outstanding -
2002 and 2001 140 140
Additional paid-in capital 39,155 39,155
Retained earnings 44,567 42,144
--------- ---------
Total shareholders' equity 83,862 81,439
--------- ---------
Total liabilities and
shareholders' equity $ 341,074 $ 338,211
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RUSH ENTERPRISES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except earnings per share - unaudited)
Three months ended Six months ended
June 30, June 30,
---------------------- ----------------------
2002 2001 2002 2001
--------- --------- --------- ---------
REVENUES:
New and
used truck sales $ 103,110 $ 110,728 $ 201,329 $ 236,769
Parts and service 58,007 50,268 112,030 97,190
Construction
equipment sales 13,084 17,989 24,140 31,930
Lease and rental 6,707 7,423 13,044 13,679
Finance
and insurance 1,399 1,668 2,464 2,785
Retail sales 10,101 10,241 19,734 19,638
Other 646 975 2,022 1,873
--------- --------- --------- ---------
TOTAL REVENUES 193,054 199,292 374,763 403,864
COST OF
PRODUCTS SOLD 153,543 161,732 298,981 329,368
--------- --------- --------- ---------
GROSS PROFIT 39,511 37,560 75,782 74,496
SELLING, GENERAL AND
ADMINISTRATIVE 31,711 30,219 62,638 60,338
DEPRECIATION AND
AMORTIZATION 2,490 2,658 4,967 5,315
--------- --------- --------- ---------
OPERATING INCOME 5,310 4,683 8,177 8,843
INTEREST
INCOME (EXPENSE) (2,018) (3,018) (4,086) (6,920)
GAIN (LOSS) ON SALE
OF ASSETS 26 770 (52) 770
--------- --------- --------- ---------
INCOME BEFORE
INCOME TAXES 3,318 2,435 4,039 2,693
PROVISION FOR
INCOME TAXES 1,326 974 1,616 1,077
--------- --------- --------- ---------
NET INCOME $ 1,992 $ 1,461 $ 2,423 $ 1,616
========= ========= ========= =========
EARNINGS PER SHARE:
Basic $ 0.14 $ 0.10 $ 0.17 $ 0.12
========= ========= ========= =========
Diluted $ 0.14 $ 0.10 $ 0.17 $ 0.12
========= ========= ========= =========
Weighted average
shares outstanding
Basic 14,004 14,004 14,004 14,004
========= ========= ========= =========
Diluted 14,634 14,076 14,490 14,050
========= ========= ========= =========