Rush Enterprises Moves to Expand Footprint in Q3
Rush Enterprises, which operates the largest network of commercial vehicle dealerships in North America, said third quarter net income was $14.9 million, compared to $16.0 million a year earlier.
In the third quarter, the company continued to implement its strategy to extend its geographic footprint, signing an agreement to purchase certain assets of a dealership group in Ohio with International, IC Bus, Isuzu and Idealease franchises. The agreement includes locations in Akron, Cincinnati, Cleveland, Columbus, Dayton, Findlay and Lima, OH. Rush said that although the transaction remains subject to regulatory approval, it plans to complete the acquisition by year end and expects it to be accretive to future earnings.
“When complete, the newly acquired dealership locations will operate within our Rush Truck Centers’ Navistar Division, said W. M. “Rusty” Rush, chief executive officer and president of Rush Enterprises.
“We also relocated our full service dealership in Phoenix, Arizona, to a newly renovated facility, which tripled our service capabilities in this market. A grand opening for this new dealership facility will take place in November,” Rush continued.
Rush’s Class 4-7 medium-duty truck sales increased 16% over the third quarter of 2011, outpacing the U.S. Class 4-7 market, which increased approximately 11% during the same time period. Rush’s Class 4-7 market share accounted for 4.1% of the total U.S. market during the third quarter. “This continues to be the result of medium-duty truck sales to national fleets across the country, solid execution by our Peterbilt, Navistar, Hino, Isuzu and Ford locations and our ability to quickly deliver vehicles to our vocational customers,” said Rush.
In the third quarter, Rush’s Class 8 unit sales, which accounted for 4.7% of the U.S. market, decreased by 8% over the same time period in 2011, and 19% as compared to the second quarter of 2012. “As anticipated, reduced order intake over the past several months and general economic and political uncertainty resulted in decreased Class 8 truck deliveries this quarter. Despite year-end tax incentives and EPA regulations that will increase the cost of trucks next year, we expect that Class 8 truck deliveries could decrease sequentially by up to 10% during the fourth quarter,” Rush cautioned.
In his outlook, Rush said, “While it is difficult to predict next year’s climate until after November, we believe that order intake will increase during the latter part of this year, but that activity would not result in an increase in our Class 8 truck deliveries until at least the second quarter of next year.”
To read the full Rush Enterprise earnings release click here.