Rush Enterprises, Inc. Reports First Quarter Results; EPS Increases to $0.31 with 74.9% Increase in Revenues
SAN ANTONIO--April 18, 2005--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 Texas, today announced results for the first quarter ended March 31, 2005.First Quarter Results
In the first quarter, the Company's gross revenues totaled $402.0 million, a 74.9% increase from gross revenues of $229.9 million reported for the first quarter ended March 31, 2004. Income from continuing operations was $7.7 million, or $0.31 per diluted share, during the first quarter of 2005 compared to $2.1 million or $0.14 per diluted share in the first quarter of 2004. Net income for the quarter was $7.7 million, or $0.31 per diluted share, compared with net income of $2.2 million, or $0.14 per diluted share, reported in the quarter ended March 31, 2004.
The Company's truck segment recorded revenues of $388.5 million in the first quarter of 2005, compared to $217.7 million in the first quarter of 2004. The Company delivered 2,185 new heavy-duty, 624 new medium-duty and 980 used trucks during the first quarter of 2005 compared to 999 new heavy-duty, 327 new medium-duty and 775 used trucks for the same period in 2004. Truck parts, service and body shop sales increased 23.8% from $63.4 million in the first quarter of 2004 to $78.5 million in the first quarter of 2005. These results include sales at the dealerships acquired from American Truck Source, Inc. (ATS) in January.
The Company's construction equipment segment recorded revenues of $11.3 million in the first quarter of 2005, compared to $10.5 million in the first quarter of 2004. New and used construction equipment unit sales revenue increased 6.7% from $7.5 million in the first quarter of 2004 to $8.0 million in the first quarter of 2005. Construction equipment parts, service and body shop sales increased 18.5% from $2.7 million in the first quarter of 2004 to $3.2 million in the first quarter of 2005.
Expanding Reach
Rush is pursuing a growth strategy that expands its geographic reach while enhancing its overall results. As part of its efforts to integrate ATS into the Rush Truck Center network and expand our presence in the important Nashville market, the Company will relocate the Nashville dealership it acquired from ATS to a recently purchased 120,000-square-foot facility during the summer of 2005. The new facility is double the size of the Company's existing Nashville dealership. Plans are also underway to relocate several other existing Rush Truck Centers to better serve its customers. Construction is almost complete on a new 41,000-square-foot facility on Interstate 10 where the Company will relocate its existing Mobile, Alabama dealership. Additionally, the Company continues to pursue acquisitions of new medium-duty truck dealerships in the markets it already serves.
CEO Quote
In announcing the results, W. Marvin Rush, Chairman and Chief Executive Officer of Rush Enterprises, said, "Truck sales are back and, as a result, Rush Enterprises is pleased with its first quarter performance. Manufacturers and component suppliers expected U.S. heavy-duty truck sales to approach 186,000 units in 2004. In fact, U.S. heavy-duty truck sales totaled about 203,000 units in 2004, a 40% increase over 2003. Manufacturers and component suppliers currently estimate 2005 U.S. heavy-duty truck sales to approach 255,000 units, but it appears customers would purchase more units if the manufacturers could build more. Rush is well positioned to capitalize on this growing demand by maintaining its focus on fundamentals and improving the Rush bottom line." Mr. Rush added, "I'm very excited to report that our "quality of earnings" improved dramatically this quarter as our absorption rate increased more than six percent over our absorption rate in the first quarter of 2004."
Mr. Rush continued, "Our customer base has increased tremendously, now that we 'own' the Dallas and Nashville markets through our recent acquisition of American Truck Source. While ATS was successful, we believe there are major opportunities for Rush to improve its business and we have already begun integrating our culture and operating strategy into the acquired businesses. We also set a goal this year to strengthen the depth of our product offering by selling 2,500 medium-duty trucks in 2005, compared to the 1,766 we sold in 2004, with the ultimate goal of eventually selling as many medium-duty trucks as we do Class 8 trucks."
Conference Call
Rush Enterprises will host a conference call to review its first quarter results on April 19, 2005 at 10 a.m. ET/9 a.m. CT. The call can be heard live by dialing 800.901.5247 (US) or 617.786.4501 (International) and entering the passcode 67194684, or via the web on the 'Events' section of the Company's website at www.RushEnterprises.com, or at www.earnings.com, or www.streetevents.com. For those who cannot listen to the live broadcast, the Webcast and audio replay will be available until April 29, by dialing 888.286.8010 (US) or 617.801.6888 (International) and entering the passcode 97331725.
About Rush Enterprises
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 operations include a network of 44 Rush Truck Centers located in Texas, California, Oklahoma, Colorado, Arizona, New Mexico, Alabama, Florida and Tennessee. The Company has developed its Rush Truck Centers and its Rush Equipment Center as "one-stop centers" where, at one convenient location, its customers can purchase new or used trucks or construction equipment; purchase insurance products; purchase aftermarket parts and accessories and have service performed by certified technicians. For additional information on Rush Enterprises, Inc., please visit www.rushenterprises.com.
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
MARCH 31, 2005 AND DECEMBER 31, 2004
(In Thousands, Except Shares and Per Share Amounts)
March 31, December 31,
2005 2004
------------ ------------
(unaudited)
ASSETS
------
CURRENT ASSETS:
Cash and cash equivalents $ 98,277 $ 158,175
Accounts receivable, net 44,184 30,296
Inventories 278,108 189,792
Prepaid expenses and other 1,214 1,418
Deferred income taxes 1,544 1,544
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Total current assets 423,327 381,225
PROPERTY AND EQUIPMENT, net 164,529 138,953
OTHER ASSETS, net 98,923 45,755
------------ ------------
Total assets $ 686,779 $ 565,933
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LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Floor plan notes payable $ 252,722 $ 168,002
Current maturities of long-term debt 20,280 16,083
Advances outstanding under lines of credit 2,613 2,434
Trade accounts payable 20,255 16,970
Accrued expenses 43,364 39,495
------------ ------------
Total current liabilities 339,234 242,984
LONG-TERM DEBT, net of current maturities 96,350 79,973
DEFERRED INCOME TAXES, net 20,169 20,169
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred stock, par value $.01 per share;
1,000 shares authorized; 0 shares
outstanding in 2004 and 2005 - -
Common stock, par value $.01 per share;
50,000,000 shares authorized; 23,896,976
shares outstanding at December 31, 2004 and
23,954,858 outstanding at March 31, 2005 240 239
Additional paid-in capital 156,957 156,423
Retained earnings 73,829 66,145
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Total shareholders' equity 231,026 222,807
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Total liabilities and
shareholders' equity $ 686,779 $ 565,933
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RUSH ENTERPRISES, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Amounts)
(Unaudited)
Three Months Ended
March 31,
-------------------------
2005 2004
------------ ------------
REVENUES:
New and used truck sales $ 298,931 $ 146,268
Parts and service 83,009 67,005
Construction equipment sales 7,976 7,543
Lease and rental 7,703 6,671
Finance and insurance 3,163 1,723
Other 1,261 674
------------ ------------
Total revenues 402,043 229,884
COST OF PRODUCTS SOLD:
New and used truck sales 278,370 135,445
Parts and service 50,006 41,708
Construction equipment sales 7,018 6,664
Lease and rental 5,702 4,748
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Total cost of products sold 341,096 188,565
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GROSS PROFIT 60,947 41,319
SELLING, GENERAL AND ADMINISTRATIVE 43,608 34,594
DEPRECIATION AND AMORTIZATION 2,413 2,196
------------ ------------
OPERATING INCOME 14,926 4,529
INTEREST EXPENSE, NET 2,494 1,455
GAIN ON SALE OF ASSETS 63 430
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INCOME FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES 12,495 3,504
PROVISION FOR INCOME TAXES 4,811 1,402
------------ ------------
INCOME FROM CONTINUING OPERATIONS 7,684 2,102
GAIN FROM DISCONTINUED OPERATIONS, NET 0 53
------------ ------------
NET INCOME $ 7,684 $ 2,155
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EARNINGS PER COMMON SHARE - BASIC
Income from continuing operations $ .32 $ .15
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Net income $ .32 $ .15
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EARNINGS PER COMMON SHARE - DILUTED
Income from continuing operations $ .31 $ .14
============ ============
Net income $ .31 $ .14
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Weighted average shares outstanding:
Basic 23,955 14,122
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Diluted 24,853 15,257
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