Rush Enterprises, Inc. Reports Second Quarter Results
"General economic uncertainty combined with the introduction of new emissions-compliant engine technology weighed heavily in creating yet another challenging market for new truck sales in the second quarter," said W. M. "Rusty" Rush, President and Chief Executive Officer for Rush Enterprises, Inc. "However, improvements in used truck and parts, service and body shop revenues contributed significantly to the Company's profitability this quarter."
"As expected, retail sales of new heavy- and medium-duty trucks remained sluggish throughout the second quarter, as fleets remain hesitant to take delivery of new trucks. Additionally, higher priced 2010 emissions-compliant engines are now the only available engines in most new trucks, and only a few fleets want to be among the first to adopt the new technology. This coupled with an undersupply of used trucks due to depressed new truck sales in recent years helped the used truck market continue to improve in the second quarter," explained Rusty Rush.
"Truck dealership parts, service and body shop operations have accelerated, with revenues increasing by 16.7% in the second quarter compared to the first quarter of 2010 and 21.1% compared to the second quarter of 2009. This resulted in a second quarter absorption rate of 104.3%. We expect our back-end operations to remain strong throughout the year. The average age of the fleet remains the highest in history and we believe truck capacity is now at equilibrium with freight movement, which results in more trucks in service and subsequently an increase in truck maintenance needs," explained Rusty Rush.
"We remain committed to growing the reach of our service network and the breadth of our products and services. We formed a new Navistar division within the Company and completed the acquisition of Lake City Trucks. We also opened a new flagship truck dealership in Oklahoma City and acquired a Ford Commercial Truck franchise to add to its product offering, which also includes Peterbilt, Hino and Isuzu trucks," continued Rusty Rush.
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