Rush Enterprises, Inc. Reports Second Quarter Results; EPS Increases 31% to $0.59 on a Revenue Increase of 23%.SAN ANTONIO San Antonio (săn ăntō`nēō, əntōn`), city (1990 pop. 935,933), seat of Bexar co., S central Tex., at the source of the San Antonio River; inc. 1837. -- Rush Enterprises, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : RUSHA & RUSHB), which operates the largest network of heavy-duty heav·y-dut·y adj. Made to withstand hard use or wear. heavy-duty Adjective made to withstand hard wear, bad weather, etc. Adj. 1. and medium-duty truck dealerships in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and a John Deere construction equipment dealership in Houston, Texas “Houston” redirects here. For other uses, see Houston (disambiguation). Houston (pronounced /'hjuːstən/) is the largest city in the state of Texas and the , today announced results for the second quarter ended June June: see month. 30, 2006. In the second quarter, the Company's gross revenues totaled $569.2 million, a 23.3% increase from gross revenues of $461.8 million reported for the second quarter ended June 30, 2005. Net income for the quarter was $14.9 million, or $0.59 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared with net income of $11.2 million, or $0.45 per diluted share, in the quarter ended June 30, 2005. The Company began recording stock option expense in the first quarter of 2006 as required by Statement of Financial Accounting Standards No. 123R. This non-cash expense Noun 1. non-cash expense - an expense (such as depreciation) that is not paid for in cash disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to capital expenditures) totaled $931,000 ($581,875 after tax or $0.02 per diluted share) in the second quarter of 2006. The Company's truck segment recorded revenues of $543.9 million in the second quarter of 2006, compared to $442.5 million in the second quarter of 2005. The Company delivered 2,695 new heavy-duty trucks, 1,185 new medium-duty trucks and 954 used trucks during the second quarter of 2006, compared to 2,469 new heavy-duty trucks, 681 new medium-duty trucks and 874 used trucks in the second quarter of 2005. Parts, service and body shop sales increased to $104.8 million in the second quarter of 2006 from $86.3 million in the second quarter of 2005. The Company's construction equipment segment recorded revenues of $20.2 million in the second quarter of 2006, compared to $16.3 million in the second quarter of 2005. New and used construction equipment unit sales unit sales Sales measured in terms of physical units rather than dollars. Unit sales data are often used by financial analysts when evaluating the health of a company. revenue increased 34.2% to $15.7 million in the second quarter of 2006 from $11.7 million in the second quarter of 2005. Construction equipment parts, service and body shop sales increased 7.7% to $4.2 million in the second quarter of 2006 from $3.9 million in the second quarter of 2005. In announcing the results, W. Marvin Rush, Chairman of Rush Enterprises, Inc., said "The second quarter results were very strong and we continue to be confident about Rush's prospects for the remainder of the year. 2006 is on track to be a record year for us in terms of truck deliveries and parts, service, body shop and finance and insurance revenues. As a result, we expect to achieve record profits in 2006." Mr. Rush added, "New emissions standards governing gov·ern v. gov·erned, gov·ern·ing, gov·erns v.tr. 1. To make and administer the public policy and affairs of; exercise sovereign authority in. 2. diesel engines manufactured after January January: see month. 1, 2007 will cause a significant decrease in truck deliveries in 2007. We expect second and third quarter 2007 deliveries to be down more significantly compared to 2006 than first quarter 2007 deliveries. We expect the market to begin to rebound rebound (rē´bownd), n/v 1. a recovery from illness. n 2. an outbreak of fresh reflex activity after withdrawal of a stimulus rebound adjective in the fourth quarter of 2007 and to be followed by strong markets in 2008 and 2009 as customers pre-buy trucks in advance of even more stringent diesel engine emissions standards that will go into effect in 2010." Rusty rust·y adj. rust·i·er, rust·i·est 1. Covered with rust; corroded. 2. Consisting of or produced by rust. 3. Of a yellowish-red or brownish-red color. 4. Rush, President and Chief Executive Officer of Rush Enterprises, Inc., said "We remain committed to growing our medium-duty business and improving our absorption rates. We have expanded our medium-duty product offering in several locations and have created a dedicated medium-duty sales force. We sold over 400 medium-duty trucks in the month of June. When you consider that we only sold 899 medium-duty trucks in all of 2003, it is obvious that our medium-duty efforts are generating positive results. We expect to sell more than 4,500 medium-duty trucks in 2006. We believe the continued growth of our medium-duty operations will soften the earnings impact that will result from fewer Class 8 trucks being sold in 2007." Rusty Rush added, "I am also very excited about the progress we have made toward reaching our goal of achieving a 110% absorption rate by the end of 2008. The Company's absorption rate increased from 104.4 % in the second quarter of 2005, to 109.5% in the second quarter of 2006. Through June 2006, the Company's year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. absorption rate was 105.3% compared to 100.5% in the first six months of 2005." Conference Call Info. Rush Enterprises will host its quarterly conference call to discuss earnings for the second quarter on Thursday Thursday: see week. , July July: see month. 20th, 2006 at 10 a.m. EST/ 9 a.m. CST CST abbr. 1. Central Standard Time 2. convulsive shock treatment CST Central Standard Time Noun 1. . Earnings will be reported on Wednesday Wednesday: see week. , July 19th, 2006 after close of market. The call can be heard live by dialing 866-200-5830 (US) or 732-694-1588 (International) and entering the pin code 947572 followed by the # key or via the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at www.rushenterprises.com ("Events") section, www.earnings.com or www.streetevents.com. For those who cannot listen to the live broadcast, the Webcast will be available until August 20th. The audio replay will be available until August 20th, by dialing 866-206-0173 (US) or 732-694-1571 (International) and entering the conference reference code 179747 followed by the # key. About Rush Enterprises, Inc. Rush Enterprises, Inc. operates the largest network of heavy-duty truck and medium-duty dealerships in North America and a John Deere construction equipment dealership in Houston, Texas. Its operations include a network of over 40 Rush Truck Centers located in Alabama Alabama, indigenous people of North America Alabama (ăləbăm`ə), indigenous people of North America whose language belongs to the Muskogean branch of the Hokan-Siouan linguistic stock (see Native American languages). , Arizona Arizona (âr'əzō`nə), state in the southwestern United States. It is bordered by Utah (N), New Mexico (E), Mexico (S), and, across the Colorado R., Nevada and California (W). , California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). , Colorado Colorado, state, United States Colorado (kŏlərăd`ə, –răd`ō, –rä`dō), state, W central United States, one of the Rocky Mt. states. , Florida Florida, state, United States Florida (flôr`ĭdə, flŏr`–), state in the extreme SE United States. A long, low peninsula between the Atlantic Ocean (E) and the Gulf of Mexico (W), Florida is bordered by Georgia and , Oklahoma Oklahoma (ōkləhō`mə), state in SW United States. It is bordered by Missouri and Arkansas (E); Texas, partially across the Red R. (S, W); New Mexico, across the narrow edge of the Oklahoma Panhandle (W); and Colorado and Kansas (N). , New Mexico New Mexico, state in the SW United States. At its northwestern corner are the so-called Four Corners, where Colorado, New Mexico, Arizona, and Utah meet at right angles; New Mexico is also bordered by Oklahoma (NE), Texas (E, S), and Mexico (S). , Tennessee Tennessee, state, United States Tennessee (tĕn`əsē', tĕn'əsē`), state in the south-central United States. and Texas. The Company has developed its Rush Truck Centers and its Rush Equipment Center as "one-stop centers" where, at one convenient location, its customers can purchase new or used trucks or construction equipment, purchase insurance products, purchase aftermarket Aftermarket See: Secondary market. aftermarket See secondary market. parts and accessories and have service performed by certified See certification. technicians. For additional information on Rush Enterprises, Inc., please visit www.rushenterprises.com. Certain statements contained herein, including those concerning current and projected truck industry and market conditions, sales and delivery forecasts, anticipated improvement in the Company's absorption rates, the Company's prospects and anticipated results for the remainder of 2006 and 2007 and the impact of diesel emissions standards on the truck market, are "forward-looking" statements (as such term is defined in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995). Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . 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, competitive factors, general U.S. economic conditions, economic conditions in the new and used truck and construction equipment markets, customer relations, relationships with vendors, the interest rate environment, governmental regulation and supervision, product introductions and acceptance, changes in industry practices, onetime events and other factors described herein and in filings made by the company with the Securities and Exchange Commission.
RUSH ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2006 AND DECEMBER 31, 2005
(In Thousands, Except Shares and Per Share Amounts)
June 30, December 31,
2006 2005
----------- -----------
(Unaudited)
ASSETS
------
CURRENT ASSETS:
Cash and cash equivalents $ 140,502 $ 133,069
Accounts receivable, net 58,350 63,473
Inventories 415,553 338,212
Prepaid expenses and other 1,999 1,829
Deferred income taxes, net 4,557 3,856
----------- -----------
Total current assets 620,961 540,439
PROPERTY AND EQUIPMENT, net 224,729 196,161
OTHER ASSETS, net 113,027 103,634
----------- -----------
Total assets $ 958,717 $ 840,234
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Floor plan notes payable $ 374,942 $ 315,985
Current maturities of long-term debt 24,126 18,807
Current maturities of capital lease
obligations 2,651 2,277
Advances outstanding under lines of credit 3,154 2,755
Trade accounts payable 28,575 23,327
Accrued expenses 57,649 51,151
----------- -----------
Total current liabilities 491,097 414,302
LONG-TERM DEBT, net of current maturities 123,387 114,345
CAPITAL LEASE OBLIGATIONS, net of current
maturities 14,543 14,628
DEFERRED INCOME TAXES, net 23,958 23,339
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred stock, par value $.01 per share;
1,000,000 shares authorized; 0 shares
outstanding in 2005 and 2006 - -
Common stock, par value $.01 per share;
40,000,000 class A shares and 10,000,000
class B shares authorized; 16,770,060
class A shares and 7,895,863 class B
shares outstanding in 2005; and 17,011,268
class A shares and 8,059,915 class B
shares outstanding in 2006 251 247
Additional paid-in capital 168,267 162,603
Retained earnings 137,214 110,770
----------- -----------
Total shareholders' equity 305,732 273,620
----------- -----------
Total liabilities and shareholders' equity $ 958,717 $ 840,234
=========== ===========
RUSH ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- ----------------------
2006 2005 2006 2005
---------- ---------- ---------- ----------
REVENUES:
New and used truck
sales $ 423,717 $ 343,940 $ 787,064 $ 642,871
Parts and service 112,449 91,990 217,316 174,999
Construction
equipment sales 15,706 11,743 30,140 19,719
Lease and rental 10,239 8,387 19,619 16,090
Finance and insurance 5,005 4,073 9,070 7,236
Other 2,122 1,684 3,914 2,945
---------- ---------- ---------- ----------
Total revenues 569,238 461,817 1,067,123 863,860
COST OF PRODUCTS SOLD:
New and used truck
sales 393,298 320,481 727,470 598,851
Parts and service 66,068 53,173 128,347 103,179
Construction
equipment sales 14,008 10,077 26,706 17,095
Lease and rental 7,898 6,336 15,034 12,038
---------- ---------- ---------- ----------
Total cost of
products sold 481,272 390,067 897,557 731,163
---------- ---------- ---------- ----------
GROSS PROFIT 87,966 71,750 169,566 132,697
SELLING, GENERAL AND
ADMINISTRATIVE 57,572 47,698 114,228 91,306
DEPRECIATION AND
AMORTIZATION 3,106 2,590 6,014 5,003
---------- ---------- ---------- ----------
OPERATING INCOME 27,288 21,462 49,324 36,388
INTEREST EXPENSE, NET 3,518 3,217 7,064 5,711
GAIN ON SALE OF ASSETS 17 22 50 85
---------- ---------- ---------- ----------
INCOME BEFORE INCOME
TAXES 23,787 18,267 42,310 30,762
PROVISION FOR INCOME
TAXES 8,920 7,032 15,866 11,843
---------- ---------- ---------- ----------
NET INCOME $ 14,867 $ 11,235 $ 26,444 $ 18,919
========== ========== ========== ==========
EARNINGS PER COMMON
SHARE - BASIC
Net income $ .59 $ .47 $ 1.06 $ .79
========== ========== ========== ==========
EARNINGS PER COMMON
SHARE - DILUTED
Net income $ .59 $ .45 $ 1.05 $ .76
========== ========== ========== ==========
Weighted average
shares outstanding:
Basic 24,998 24,064 24,853 23,998
========== ========== ========== ==========
Diluted 25,215 24,855 25,174 24,826
========== ========== ========== ==========
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