Rush Enterprises will consolidate its Navistar Division dealership network to reduce company expenses. The plan includes closing Rush Truck Centers in the following locations on May 1, 2016: Kankakee, IL; Decatur, IL; Ottawa, IL; Mount Vernon, IL; Grayslake, IL; Ontario, OR; Findlay, OH and Statesville, NC. Rush Truck Centers formerly located in Brazil, IN and Helper, UT, were closed in Q1/16.

“It’s never easy to make the decision to close a Rush Truck Center,” said W.M. Rush, chairman, CEO and president of Rush Enterprises. “However, as we acquired dealership groups across the country in recent years, we acquired a number of small dealerships located in close proximity to one another. Many of these dealerships have been in existence for a long time, but with changes in technology and, in certain cases, the local markets, there is no longer an economic justification for the affected dealerships to operate in such close proximity to our other dealerships,” Rush said.

Additionally, as a result of acquisitions, the company currently has two locations in each of Augusta, GA and Tifton, GA, which will be consolidated into one location in Augusta and one location in Tifton on June 1, 2016. The company also consolidated its Peterbilt location in Alice, TX, into its newly constructed Corpus Christi, TX, location in Q1/16. In total, the company expects to close 13 Rush Truck Centers in the first half of 2016.

The facility consolidations are expected to result in a restructuring charge estimated at approximately $4.0 million to $6.0 million. A significant majority of the charge will be taken in Q1/16, with the remainder expected to occur in the second quarter of 2016.

The charge is expected to consist of approximately $400,000 in severance and related benefits, plus $3.6 million to $5.6 million in facility exit costs, including impairment charges to certain fixed assets and the value of the real estate underlying the locations that will be classified as held-for-sale. Approximately $750,000 of the severance and related benefits and facility exit costs are cash costs, a significant majority of which are expected to be paid during fiscal year 2016.

“The 13 Rush Truck Centers we intend to close contributed approximately $55 million in revenue in 2015,” Rush said. “We expect that we will be able to retain approximately 55% of the revenue from these locations through consolidation into other nearby locations. However, we anticipate that the closures will result in annual expense reductions of approximately $11.0 million. Importantly, we believe these expense reductions will be achieved without any significant reduction in our ability to service customers in our areas of responsibility.”