Rush Enterprises, Inc. Reports Third Quarter Results.

EPS Increases 22.6% to $0.65 on a Revenue Increase of 34.2%

SAN ANTONIO -- Rush Enterprises, Inc. (NASDAQ: RUSHA & RUSHB), which operates the largest network of heavy-duty and medium-duty truck dealerships in North America and a John Deere construction equipment dealership in Houston, Texas, today announced results for the third quarter ended September 30, 2006.

In the third quarter, the Company's gross revenues totaled $651.3 million, a 34.2% increase from gross revenues of $485.4 million reported for the third quarter ended September 30, 2005. Net income for the quarter was $16.4 million, or $0.65 per diluted share, a 22.6% increase, compared with net income of $13.2 million, or $0.53 per diluted share, in the quarter ended September 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 totaled $391,000 ($244,000 after tax or $0.01 per diluted share) in the third quarter of 2006.

The Company's truck segment recorded revenues of $625.5 million in the third quarter of 2006, compared to $467.8 million in the third quarter of 2005. The Company delivered 3,512 new heavy-duty trucks, 1,109 new medium-duty trucks and 999 used trucks during the third quarter of 2006, compared to 2,648 new heavy-duty trucks, 671 new medium-duty trucks and 890 used trucks in the third quarter of 2005. Parts, service and body shop sales increased to $105.6 million in the third quarter of 2006 from $88.6 million in the third quarter of 2005.

The Company's construction equipment segment recorded revenues of $20.7 million in the third quarter of 2006, compared to $14.2 million in the third quarter of 2005. New and used construction equipment unit sales revenue increased 55.9% to $15.9 million in the third quarter of 2006 from $10.2 million in the third quarter of 2005. Construction equipment parts, service and body shop sales increased 16.2% to $4.3 million in the third quarter of 2006 from $3.7 million in the third quarter of 2005.

W. Marvin Rush, Chairman of Rush Enterprises, Inc., said, "I am pleased to announce another solid quarter in route to a record year for Rush. We delivered more trucks this quarter than any quarter in the history of the Company. Consequently our finance and insurance revenues set quarterly records as well. Due to increased deliveries to several large fleets, our new truck gross profit margin decreased slightly in the third quarter. We expect to deliver a large number of new trucks to fleets in the fourth quarter as well. As a result, Rush Enterprises should achieve record profits in 2006."

Mr. Rush added, "New emissions standards governing diesel engines manufactured after January 1, 2007 will cause a significant decrease in truck deliveries in 2007. We expect first quarter deliveries to remain robust followed by weaker deliveries in the second and third quarters. We believe the market will begin to rebound in the fourth quarter of 2007, and will be followed by strong markets in 2008 and 2009 as customers purchase trucks in advance of even more stringent diesel engine emissions standards that will go into effect in 2010."

Rusty Rush, President and Chief Executive Officer of Rush Enterprises, Inc., said, "We know that there will be a sharp decline in the class 8 truck market next year, but we have worked hard to put Rush Enterprises into the best position possible heading into 2007. We began increasing our new class 8 truck inventory during the third quarter of 2006, and expect to continue to increase it through the remainder of the year. We believe a large inventory of class 8 trucks with engines manufactured before the new emission guidelines take effect will lead to a strong start in 2007. Additionally, we have grown our medium-duty business across our network, and we will continue to focus on growing this facet of our business. Although industry wide medium-duty truck sales are expected to decrease approximately 15% in 2007, we expect to increase our medium-duty truck sales in 2007."

Rusty Rush added, "We also remain focused on increasing our absorption rate. The Company's absorption rate increased from 101.2% in the third quarter of 2005, to 104.5% in the third quarter of 2006. Through September 2006, the Company's year-to-date absorption rate was 105.0% compared to 100.7% in the first nine months of 2005. We expect to maintain or slightly increase our absorption rate in 2007, despite the decrease in the class 8 truck market, while keeping our eye on our stated goal of achieving an absorption rate of 110% by 2008. By continuing to grow our medium-duty business, remaining focused on increasing our absorption rate, and properly managing class 8 inventory levels heading into 2007, we hope to soften the earnings impact that will result from fewer class 8 trucks being sold in 2007."

Conference Call Info.

Rush Enterprises will host its quarterly conference call to discuss earnings for the third quarter on Thursday, October 19th, 2006 at 10:00 a.m. ET/ 9:00 a.m. CT. Earnings will be reported on Wednesday, October 18th, 2006 after close of market. The call can be heard live by dialing 866-200-5830 (US) or 212-659-4210 (International) and entering pin code 680807 followed by the # key or via the Internet 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 November 19(th), by dialing 866-206-0173 (US) or 646-216-7204 (International) and entering the conference reference code 188918 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, Arizona, California, Colorado, Florida, Oklahoma, New Mexico, Tennessee 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 parts and accessories and have service performed by certified 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, growth of the Company's medium-duty market, ability to properly manage inventories, 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 of 1995). Because such statements include risks and uncertainties, 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, 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.

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