Rush Enterprises, Inc. (NASDAQ: RUSHA & RUSHB), which operates the largest network of commercial vehicle dealerships in North America and two John Deere construction equipment dealerships in Southeast Texas, announced first-quarter gross revenues of $308.4 million, a 6.3% decrease from gross revenues of $329.1 million reported for the first quarter ended March 31, 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, in the quarter ended March 31, 2009.
The company’s truck segment recorded revenues of $295.5 million in the first quarter of 2010, compared to $313 million in the first quarter of 2009. The company delivered 969 new heavy-duty trucks, 611 new medium-duty trucks and 686 used trucks during the first quarter of 2010, compared to 1,032 new heavy-duty trucks, 754 new medium-duty trucks and 577 used trucks in the first quarter of 2009. Parts, service and body shop sales revenue was $99.4 million in the first quarter of 2010, compared to $101.8 million in the first quarter of 2009.
The company’s construction equipment segment recorded revenues of $9.1 million in the first quarter of 2010, compared to $11.6 million in the first quarter of 2009. New and used construction equipment sales revenue decreased 20% to $5.6 million in the first quarter of 2010 from $7 million in the first quarter of 2009. Construction equipment parts, service and body shop sales decreased 26.7% to $3.3 million in the first quarter of 2010 from $4.5 million in the first quarter of 2009.
"We believe 2010 will be another difficult year, but see encouraging signs of recovery in the general economy and specifically in our industry. Our employees worked diligently to control expenses
throughout this prolonged downturn. 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," said W. Marvin Rush, Chairman of Rush Enterprises, Inc.
Rusty Rush, President and Chief Executive Officer of Rush Enterprises, Inc, said “I am encouraged that we are seeing initial signs of recovery in our parts and service business. Rush Truck Centers’ parts, service and body shop revenues increased 10% 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.
“However, we expect 2010 will be another difficult year for truck sales. Trucks with 2010 emissions-compliant engines are now beginning to reach dealership lots. This new technology comes with a
significant price increase, which will limit demand. As a result, we believe that new heavy-duty and medium-duty truck sales will remain sluggish in the second and third quarters of this year. Until then, we
expect trucks with pre-2010 engines to be in high demand.
“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. 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.”