Rush Enterprises Inc. Reports Second Quarter Results
18 July 2000
Rush Enterprises Inc. Reports Second Quarter Results
SAN ANTONIO - Rush Enterprises Inc. , which operates the largest network of Peterbilt heavy-duty truck dealerships in North America and John Deere construction equipment dealerships in Texas and Michigan, today announced results for the second quarter ended June 30, 2000.In the second quarter of 2000, the Company's gross revenues totaled $248.5 million, a 31.2 percent increase over gross revenues of $189.4 million reported for the second quarter ended June 30, 1999. Net income for the quarter decreased 56.4 percent to $1.7 million, or $0.25 per diluted share, compared with net income of $3.9 million, or $0.57 per share reported in the quarter ended June 30, 1999. These results include $1.25 million of loss provision recognized during the second quarter of 2000 to increase the Company's reserve for used truck valuation and repossession losses.
The Company's heavy-duty truck segment recorded revenues of $210.4 million in the second quarter of 2000, compared to $161.7 million in the second quarter of 1999. The Company delivered 1,653 and 558 new and used trucks, respectively, during the second quarter of 2000 compared to 1,226 and 542 new and used trucks, respectively, for the same period in 1999. Parts, service and body shop sales increased 47.0 percent from $25.1 million to $36.9 million from the second quarter of 1999 to the second quarter of 2000. The acquisitions of the Arizona, New Mexico and southern California locations during the latter half of 1999 significantly impacted the increase in revenues.
The Company's construction equipment segment recorded revenues of $28.7 million in the second quarter of 2000, compared to $20.0 million in the second quarter of 1999. The Company delivered 220 and 114 new and used construction equipment units, respectively, during the second quarter of 2000 compared to 137 and 74 new and used construction equipment units, respectively, for the same period in 1999. Parts and service sales increased 19.6 percent from $4.6 million to $5.5 million from the second quarter of 1999 to the second quarter of 2000. Rental sales increased from $2.1 million to $2.4 million, or 14.3 percent, from the second quarter of 1999 to the second quarter of 2000. The September 1999 acquisition of the eastern Michigan locations impacted the increase in revenues.
In announcing the results, W. Marvin Rush, chairman and chief executive officer of Rush Enterprises, said, "As indicated by our second quarter results, the truck market remains soft. The continuing decline in used truck values has negatively impacted our profitability. Rising interest rates have also contributed to a substantial reduction in finance income.
"We expect the remainder of the year to show financial improvements over the second quarter, however, we still believe that year 2000 new truck deliveries will be sharply below prior year levels. Although industry conditions have weakened, we believe the Company is positioned to take advantage of any opportunities that may arise."
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 two retail farm and ranch superstores that serve the greater San Antonio and Houston, Texas, areas.
Certain statements contained herein, including those concerning the outlook for the remainder of the year, 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
(in thousands, except earnings per share -- unaudited)
Three months ended Six months ended
June 30, June 30,
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2000 1999 2000 1999
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REVENUES:
New and used truck sales $166,879 $129,607 $300,524 $251,291
Parts and service 44,067 31,477 85,653 61,618
Construction
equipment sales 20,244 12,807 38,411 24,599
Lease and rental 7,457 6,279 14,351 11,337
Finance and insurance 1,830 3,875 5,225 7,503
Retail sales 7,167 4,499 12,047 9,111
Other 892 868 2,277 1,796
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TOTAL REVENUES 248,536 189,412 458,488 367,255
COST OF PRODUCTS SOLD 209,044 157,279 382,251 303,887
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GROSS PROFIT 39,492 32,133 76,237 63,368
SELLING, GENERAL AND
ADMINISTRATIVE 30,551 22,318 60,017 45,207
DEPRECIATION AND
AMORTIZATION 2,259 1,457 4,327 2,787
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OPERATING INCOME 6,682 8,358 11,893 15,374
INTEREST EXPENSE 3,793 1,882 7,211 3,366
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INCOME BEFORE INCOME TAXES 2,889 6,476 4,682 12,008
PROVISION FOR INCOME TAXES 1,156 2,590 1,873 4,803
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NET INCOME $ 1,733 $ 3,886 $ 2,809 $ 7,205
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EARNINGS PER SHARE:
Basic $ 0.25 $ 0.58 $ 0.40 $ 1.08
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Diluted $ 0.25 $ 0.57 $ 0.40 $ 1.07
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Weighted average shares
outstanding
Basic 7,002 6,646 7,002 6,646
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Diluted 7,013 6,812 7,041 6,757
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