Rush Enterprises (NASDAQ:RUSHB) held its first-quarter earnings conference call on Wednesday. Below is the complete transcript from the call.
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Summary
Rush Enterprises Inc reported first quarter 2026 revenues of $1.68 billion, with net income of $61.5 million or $0.77 per diluted share.
The company declared a quarterly cash dividend of $0.19 per share, emphasizing its commitment to returning value to shareholders.
Despite a challenging commercial vehicle market, the company expects the first quarter to be the trough and anticipates improvement driven by increased order activity and customer optimism.
Aftermarket services, leasing, and rental businesses remained strong and contributed significantly to profitability, with the aftermarket business accounting for 66% of gross profit.
Strategic initiatives included signing an agreement to acquire Peterborough dealerships in Louisiana and Mississippi, expected to close in June.
Management highlighted the importance of emissions regulations and the anticipated impact on future truck sales, with a focus on maintaining inventory levels and managing costs effectively.
The company expects gradual improvement in truck sales and aftermarket performance, supported by improving freight conditions and customer sentiment.
Full Transcript
OPERATOR
Good day and thank you for standing by. Welcome to Rush Enterprises Inc’s first quarter 2026 earnings conference call. At this time, all participants are in a listen only mode. After the speaker’s presentation, there’ll be a question and answer session. To ask a question during the session, you’ll need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised to withdraw your question. Please press star 11 again. Please be advised that today’s conference is being recorded. I would now like to turn the conference over to your speaker for today, Rusty Rush, Chairman, CEO and President. Please go ahead.
Rusty Rush (Chairman, CEO and President)
Well, good morning and welcome to our first quarter 2026 earnings release call. With me on the call this morning are Steve Keller, Chief Financial Officer, Jody Pollard, Chief Operating Officer, Jay Hazelwood, Vice President Controller, and Michael Goldstone, Senior Vice President, General Counsel and Corporate Secretary. Before I get started, Steve will say a few words regarding forward looking statements.
Steve Keller (Chief Financial Officer)
Certain statements we will make today are considered forward looking statements as defined in the Private Securities Litigation Reform act of 1995. Because these statements include risks and uncertainties, our actual results may differ materially from those expressed or implied by such forward looking statements. Important factors that could cause actual results to differ materially from those expressed or implied by such forward looking statements include but are not limited to or those discussed in our annual report on Form 10-K for the year ended December 31, 2025 and in our other filings with the Securities and Exchange Commission.
Rusty Rush (Chairman, CEO and President)
Thank you Steve and thanks everyone for joining us today. As we reported yesterday, we generated revenues of $1.68 billion in the first quarter with net income of $61.5 million or 77 cents per diluted share. We also declared a quarterly cash dividend of $0.19 per share, which reflects our continued focus on returning value to shareholders. Now, stepping back for a minute, the first quarter was still a tough environment for the commercial vehicle market industry wide. Retail sales for new trucks remained at historically low levels and we’re still working through the effects of the freight recession, excess capacity and general economic uncertainty. That said, we do believe this quarter represents the trough of the cycle and more importantly, we’re starting to see some early signs that things are moving in the right direction. Freight rates improved a bit, miles driven began to pick up, and customer sentiment started to feel a little more optimistic. As a result, we saw increased quoting activity and order intake as the quarter progressed, especially from our large fleet customers. That hasn’t translated into sustained strength in truck sales yet, but it’s a good leading indicator and gives us Confidence that demand is starting to come back. One thing that stood out again this quarter is the strength of our business model. Even with soft truck sales, our aftermarket leasing and rental businesses, along with disciplined expense management, helped us stay very profitable and perform well overall. We also stayed focused on growing the business. During the quarter, we signed an agreement to acquire Peterbilt dealerships in southern Louisiana and Mississippi. We expect to close that deal and begin operating those locations as Rush Truck Centers in June. So even in a down cycle, we continue to invest in the business, expanding into new markets and positioning ourselves for long term growth. Our aftermarket business continues to be a key strength for us. It made up roughly 66% of our gross profit in the quarter and generated 627 million in revenue, up slightly year over year. Demand was still soft in some segments, excuse me, especially for some of our over the road customers. But overall we were able to deliver growth, which speaks to the strength of our relationships and our execution. We also started seeing to starting to see some positive indicators here. More freight activities and more miles being driven, which should translate into stronger parts and service demand as customers begin catching up on deferred maintenance. Our aftermarket strategic initiatives are also making a difference. Our inspection processes and parts delivery optimization have gained traction across our network and are delivering incremental revenue, increasing uptime for our customers and delivering a better experience overall. Looking ahead, we expect the aftermarket to gradually improve as we move through the year and continue to be a key driver for our performance. Turning to truck sales, the market was still very tough in the first quarter with Class 8 truck sales at their lowest level since COVID But even in that environment, we performed well. We sold 2,964 Class 8 trucks in the US and captured a 7.2% market share. That really comes down to execution, having the right inventory and the diversity of our customer base. As I mentioned earlier, we saw solid order activity and increased engagement from customers during the quarter. We think that’s being driven by improving freight conditions and customers beginning to plan for 2027 engines. Emissions emissions regulations Class 4 through 7 truck sales saw the worst demand since 2015, but our results were more about timing than demand. Some large fleet customers pushed deliveries until later in the year, so we expect that to benefit benefit us in the coming quarter. Used truck demand improved as we move through the quarter and we’re seeing better conditions tied to improving spot rates and tighter capacity. So overall, while the first quarter was slow, we expect sales to improve gradually in the second quarter and then pick up in the second Pick up more in the second half of the year. Renewal leasing continue to be strong and growing part of our business. Revenue was 92 million in the quarter, up a little over 2%. Year over year. Leasing demand remains strong as customers look to replace aging equipment and get ahead of cost increases tied to the upcoming emissions regulations. Rental is below where we’d like it to be, driven by current market conditions, but it did improve as the quarter progressed, and we expect the utilization to continue trending up through the year. Overall, rush truck leasing continues to generate consistent reoccurring revenue and remains an important contributor to our performance. So to wrap it up, the first quarter reflected the ongoing pressure from the freight recession and weak truck demand. But we delivered solid earnings and profitability. That speaks to the strength and balance of our business. We believe we’re at the bottom of the cycle and we’re encouraged by early signs we are seeing whether that’s freight customer activity or order trends. As conditions continue to improve, we believe we’re well positioned to capture that demand and grow the business. Before I close, I want to thank our employees across the company. Their focus, discipline and commitment to our customers continue to drive our performance, especially in a very challenging environment like this. With that, I’ll take your questions.
OPERATOR
Thank you. As a reminder, if you’d like to ask a question, please press Star one one on your telephone. You’ll hear the automated message advising your hand is raised. We also ask that you please wait for your name and company to be announced before proceeding with your question. One moment while we compile the Q and A roster, our first question for the day will be coming from the line of avi. Audrey Lashwin of ubs. Your line is open.
Audrey Lashwin (Equity Analyst at UBS)
Hey, good morning, guys. So glad to see that the year is still on track for improvement sequentially. But, you know, just thinking about the second half year, it sounds like there’s still a decent amount of uncertainty around the pre buy for this year on just a number of fronts. Whether the OEMs (Original Equipment Manufacturers) are going to have new engines ready and how the rules are going to be enforced and the demand dynamics around that. Can you just give us a rundown on how those different moving parts are shaping your expectations??
Rusty Rush (Chairman, CEO and President)
Well, that’s a good statement there, avi. It’s kind of crazy, isn’t it? We’re. What are we? We’re April 30 tomorrow. We got eight months left in the year and we still don’t have definitive regulations printed. Okay, now, when I’m talking about emissions regulations, they have sent out signals and told People the EPA has of what they’re going to do, right, they’re going to keep supposedly at 0.35, but they have not clarified about credits, et cetera. If there’s going to be NCPs (Noncompliance Penalties), things like that, we’re probably still 60 days away from it. But regardless of that, we do know that there are going to be new emissions regulations, you know, so I think that’s spurred customers to go ahead. You know, order activity, as you can see starting in December has been up dramatically from where it was the prior seven or eight months from order intake. So you know, even with that uncertainty, you know there is certainty of something going down. Exactly what it is we’re not exactly sure because it hasn’t been posted by the EPA yet. So you know, we’ll still have to follow that and see. We hope to know within the next 45 to 60 days. But if I had been, if I told you that 45 days ago and held my breath, I wouldn’t be in very good shape because I told you I’d known by now. So it keeps getting, the candy is keep getting kicked down the road a little bit. So I think the most important thing is that, you know, customers, business is people are more optimistic finally because of the contraction on the supply side, right, of taking trucks out, whether it was through non domicile building less trucks in the back half of last year, building less trucks in the first quarter of this year, we slowed the intake down so the supply side squeezed down. Customers are more optimistic about rates coming in. If you’d asked me three or four months ago, everybody said, I know this is one of your questions, but you know me, I’m going to ramble on that, you know, we’re going to be flat to low singles and it was mid singles and now people look at maybe high single digit increases. So people are optimistic at the same time to your point about emissions not knowing clear, not knowing clearly what it’s going to be, what the state is. But we do know it’s going to be worse whether there would be NCPs (Noncompliance Penalties) and the cost would go up dramatically or the total enforcement of what’s out there for EPA. January 27th. So that’s about the best thing I can tell you is there’s still uncertainty but you know, something’s coming down the tracks. Right. You just don’t know exactly what. Got it.
Audrey Lashwin (Equity Analyst at UBS)
Appreciate that Rusty. And just to follow on a point there. So thinking about the improving conditions within the freight market, as you just noted, really more driven by supply reductions, capacity reductions that doesn’t necessarily help the parts and service side as much as improving freight activity. So what are you seeing there and when do you think we might see parts and service volumes inflect positively?
Rusty Rush (Chairman, CEO and President)
Yep. You know, it’s funny, people, theoretically, you know, people believe that when truck sales go down,, okay, that you’re going to get more parts than service. Well, that’s not really actually the case because people are cutting back their budgets and things. And that’s what we’ve seen. Right. That’s why we’ve been fairly flat over the last couple three quarters. Right. We’ve even in spite of inflation, we’ve had, we’ve remained flat. And that’s because people have tightened their belts. The best thing I can see is for their business to get better. Right. Historically, when customers feel better about looking forward and more optimistic, there will be no postponement of any maintenance or repairs because it’s just like anything, you know, when your income level goes down, you learn how to take your outcome, what you spend down too. It’s no different than you as a person managing your household. So that’s what customers have done. The most encouraging thing for me is going to be hopefully seeing second and third quarter releases and listen and hearing about contract rates going up. So that optimistic, that optimism that we see out there, you know, comes to fruition is the best way I can describe it. We expect, I would tell you this, we’ve been going slightly, I’m not happy with it, but we have gradually gone January. February was better than January, March was better than February, and April looks like it’s going to be a little …
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