Rush Enterprises chairman W. Marvin Rush said he is seeing signs of growth in his business in 2010 and the company is encouraged by signs of recovery in the market. “We believe 2010 will be another difficult year, but see encouraging signs of recovery in the general economy and specifically in our industry,” Rush said in announcing the company’s first quarter results.
“Our employees worked diligently to control expenses throughout this prolonged downturn,” he continued. “We are seeing signs that lead me to believe Rush will experience an upturn in business in 2010 which will allow our employees to focus on servicing our customers in an expanding market.”
Rush reported gross revenues totaling $308.4 million, a 6.3% decrease from gross revenues of $329.1 million reported for the first quarter of 2009. Net income for the quarter was $2.2 million, or $0.06 per diluted share, compared with net income of $2.9 million, or $0.08 per diluted share.
Truck sales revenues declined to $295.5 million in the first quarter, down from $313 in 2009. Rush delivered 969 new heavy-duty trucks, 611 medium-duty trucks and 686 used trucks in 2010.
The company’s parts business, though, performed relatively well, dropping only slightly to $99.4 million from $101.8 million in 2009.
“I am encouraged that we are seeing initial signs of recovery in our parts and service business,” said Rusty Rush, president & CEO, said. “Rush Truck Centers’ parts, service and body shop revenues increased 10.0% compared to the fourth quarter of 2009. This resulted in our absorption rate increasing from 92.4% to 97.0% for the same time period. As excess truck capacity and freight demand equalize, more trucks are being put into service, which is increasing the need for maintenance and repair. We are optimistic that this increase in our parts and service business is an early indicator that a sustainable recovery has begun and should accelerate throughout the year.”
Rush’s construction equipment segment recorded revenues of $9.1 million in the first quarter of 2010 compared to $11.6 million in 2009. New and used construction equipment sales revenue decreased 20% to $5.6 million in the first quarter, down from $7 million in 2009. Construction equipment parts, service and body shop sales decreased 26.7% to $3.3 million from $4.5 million.
The introduction of 2010-compliant trucks will hold back heavy-duty truck sales through the second and third quarters, Rusty Rush said, although he believes when the market comes back, it will do so quickly.
“Looking forward, we expect truck orders to increase in the second half of 2010 which will lead to a strong recovery in retail sales in 2011, 2012 and 2013,” he said. “Unlike the general economy, I believe that when the Class 8 truck market recovers, it will come back fast and strong due to the pent-up demand created by four consecutive years of below normal replacement cycles.”
The entire Rush earnings conference call can be heard via the Internet at http://investor.rushenterprises.com/events.cfm.