Rush Enterprises, which operates the largest network of commercial vehicle dealerships in North America, announced Q2/16 revenues of $1.026 billion and net income was $10.8 million compared with revenues of $1.330 billion and net income of $19.6 million in Q2/15. During Q2/16, the company incurred a restructuring charge of $0.9 million to selling, general and administrative expenses related to the consolidation of certain dealerships.

“As expected, continued softness in the energy sector, a choppy freight environment, excess Class 8 fleet vehicle capacity, and declining used truck values plagued the industry and negatively impacted our Class 8 new and used truck sales and parts and service revenues in the second quarter,” said W. M. “Rusty” Rush, chairman, president and CEO of Rush Enterprises.

U.S. Class 8 retail sales were 53,100 units in the second quarter, down 23% over the same time period last year, according to ACT Research.

Rush’s Class 8 sales decreased 45% as compared to the second quarter of 2015 and accounted for 4.9% of the U.S. Class 8 truck market. ACT Research forecasts U.S. retail sales for Class 8 vehicles to be 201,500 units in 2016, a 20% decrease compared to 2015.

“Our Class 8 new truck sales in the second quarter were severely impacted by reduced demand from several of our large fleet customers and from the sluggish Class 8 truck market,” Rush said. “We will continue to work hard to gain incremental new Class 8 truck sales to replace revenues lost this year from some large fleet transactions and a continued decline in demand in the energy sector.”

“In addition, an oversupply of used Class 8 trucks across the country, combined with reduced demand and less opportunity for export, has caused used truck values to depreciate faster than historical depreciation rates.  This further impeded new and used truck sales,” Rush explained.  “We expect these factors will continue to impact our used truck sales in 2016, but believe our used truck inventories are at appropriate levels and correctly valued for anticipated market demand.”

“Due to the current economic climate, an uncertain freight environment, reduced order intake, excess capacity and depressed used truck values, we expect new Class 8 truck sales will remain at current levels through the end of 2016,” Rush said.

Rush’s Class 4-7 medium-duty sales decreased 4% from the second quarter of 2015, accounting for 4.9% of the total U.S. market. U.S. Class 4-7 retail sales were 57,319 units in the second quarter, up approximately 7% over the second quarter of 2015. ACT Research forecasts U.S. retail sales for Class 4-7 vehicles to reach 230,200 units in 2016, a 5.5% increase over 2015.

“Our medium-duty truck sales remained solid during the second quarter, though down slightly due to the timing of deliveries to several large fleets earlier this year,” said Rush.  “Throughout the second quarter, we continued to see demand for our ready-to-roll equipment from a range of market segments around the country,” said Rush.  “Our ability to stock an extensive range of bodied-up Class 4-7 trucks from industry leading brands allows us to meet a wider range of our customers’ immediate needs.  To this end, we added Ford trucks to our product line up in Las Vegas, NV, in May, expanding our medium-duty product offering in the southwest region.”