Rush Enterprises, Inc. Reports Third Quarter Results
"Despite the fact that general economic uncertainty continues to negatively impact demand for new trucks, we were able to increase new Class 8 truck deliveries by 25% as compared to the same quarter last year and 58% over the second quarter of 2010, reaching the highest levels of new Class 8 truck deliveries we've seen since the fourth quarter of 2008," said W. M. "Rusty" Rush, President and Chief Executive Officer for Rush Enterprises, Inc.
"Major oilfield and general freight fleet customers have gained enough confidence in their business outlook to begin to invest in new Class 8 trucks this quarter. New truck sales are clearly poised for a return to historically normal levels as customers have accepted the new emissions-compliant engine technology and pricing, and the age of the current fleet continues to drive the need for truck replacement," explained Rusty Rush.
"However, the sustainability of this increase in new truck retail sales activity is still in question. Until improvements are evident in major sectors that drive freight movement, like residential construction and capital goods manufacturing, new truck sales may remain volatile. However, used Class 8 truck sales and values are expected to remain strong for the foreseeable future," Rusty Rush said.
"Manufacturer production delays limited the availability of medium-duty trucks, which negatively impacted Rush's medium-duty truck sales this quarter. In addition, we continue to work to replace lost GM franchise revenues with other truck brands. To this end, we recently acquired a Ford and Isuzu dealership in Dallas. We have now acquired seven new medium-duty franchises since GM announced that it was discontinuing its medium-duty product line," continued Rusty Rush."Parts, service and body shop revenues continued to be strong throughout the third quarter, up 38% over Q3 2009 and approaching peak levels achieved prior to the downturn in 2008. This resulted in a third quarter absorption rate of 109.1%, the second highest quarterly absorption rate in the Company's history. As freight continues to increase and truck utilization remains high, we expect parts, service and body shop sales to continue to remain strong, impacted only by typical seasonality and fewer working days in November and December," added Rusty Rush.
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