Rush Enterprises, Inc. · NASDAQ:RUSHA
Rush Enterprises — Rush Enterprises Inc \tx\ — Investor Presentation (October 2021)
27 slides from Rush Enterprises's investor presentation, Oct 29, 2021
Slide 1: Rush Enterprises
aN ENTERPRISES ,1€SS Atude
Slide 2: Disclosure/Safe Harbor
DISCLOSURE/SAFE HARBOR This presentation may contain forward-looking statements (as defined in the Private Securities Litigation Reform Act 1995). Any forward-looking statements are based on current expectations with respect to important risk factors. It is important to note that our actual results
Slide 3: Company Overview
COMPANY OVERVIEW + Full-service solutions provider to commercial vehicle industry * 6,463 dedicated employees + $4.7B in revenue in 2020 ¢ 30,513 trucks sold in 2020 * 5.5% U.S. Class 8 market share in 2020 * 49% U.S. Class 4-7 market share in 2020 Aftermarket revenues account for 64.5 of company gr
Slide 4: Company at a Glance
COMPANY AT A GLANCE Rush Truck Centers Rush Truck Leasing Custom Vehicle Solutions Rush Refuse Systems Rush Truck Insurance Perfection Truck Parts & Equipment Rush Crane Systems House of Trucks Chrome Country Rush Towing Systems Momentum Fuel Technologies World Wide Tires Rush Bus Centers expect mor
Slide 5: Economic Outlook
ECONOMIC OUTLOOK ¢ U.S. economic recovery has improved ¢ Employmentimproving * Consumer confidence mixed * Strong retail sales environment * Housing starts remain strong * Manufacturing accelerating * GDP forecast between 5-7% * Inflation and rising interest rates expected expect more.
Slide 6: Industry Outlook
INDUSTRY OUTLOOK * Strong freight volumes, increasing rates Truck demand remains strong ¢ Used truck values remain high * Supply chain issues impacting new vehicles and parts availability — Expected to impact revenues through 2021, into 2022 — Manufacturers adjusting capacity and allocating supply
Slide 7: Liquidity and Expense Management
LIQUIDITY AND EXPENSE MANAGEMENT * Strong free cash flow; $259.5M in cash as of September 2021 * Continuing to invest in strategic initiatives + Authorized $100M share repurchase program in December 2020 and increased dividend in Q1 2021 and Q3 2021 * Disciplined expense management approach as busin
Slide 8: U.S. Retail Truck Sales Projections to 2026
U.S. RETAIL TRUCK SALES PROJECTIONS TO 2026 350 300 250 Units (Thousands) 2012 2013 2014 «2015 2016 2017 2018 2019 2020 2021E 2022E 2023E 2024E 2025E 2026E ea eae deeded ale expect Source: ACT Research <®Class 8 Class 4-7 more.
Slide 9: Strategic Growth Initiatives
STRATEGIC GROWTH INITIATIVES + Financial goals — $7B in annual revenue — 5% pre-tax profit margin * Growth goals and opportunities — Grow parts revenue to $2B — Grow service and collision center revenue to $600M — Increase U.S. Class 8 market share — Increase U.S. Class 4-7 market share — Increase R
Slide 10: Rush Truck Centers
RUSH TRUCK CENTERS « Largest commercial vehicle dealer group in North America * 120 locations in 22 states * 50% ownership of Rush Truck Centres of Canada, 14 International locations in Ontario * Class 3-8 commercial vehicle sales, full range of aftermarket solutions ¢ Broad market segment coverage
Slide 11: Rush Truck Centers Network
RUSH TRUCK CENTERS NETWORK XN Peterbilt Dealerships International Dealerships Independent Parts and Service Locations Rush Truck Centres Canada Av i
Slide 12: Solutions Network
SOLUTIONS NETWORK * Capabilities for all makes and models Aftermarket parts — Over $200M parts inventory - Genuine OEM and all-makes parts including proprietary Rig Tough and Premium Power powertrain parts * Service and body shop — 2,398 service bays, 2,224 technicians 26 collision centers — 543 mob
Slide 13: Contract Service Connect
CONTRACT SERVICE CONNECT MAINTENANCE PARTS CONNECT AN ‘ VEHICLE RECALL AND TELEMATICS SUPPORT RAPID PARTS CAMPAIGN MANAGEMENT CALL CENTER MOBILE SERVICE AND ALTERNATIVE FUELS EMBEDDED TECHNICIANS VEHICLE MODIFICATION DEDICATED SERVICE CONCIERGE TEAM ih wid XPRESS SERVICES CRM AND SALES ANALYTICS
Slide 14: Absorption Performance
ABSORPTION PERFORMANCE * Critical metric for dealership efficiency ‘0% ABSORPTION RATIO* ¢ Measures less cyclical gross profit compared to controllable expenses * 118.7% overall in 2020 ame * 128.7% YTD Q3 2021 90% 70% 50% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 “Absorption ratio
Slide 15: Quality of Earnings 2020
QUALITY OF EARNINGS 2020 Lease, Rental/Finance, Insurance/Other —' 8% ™. Lease, Rental/Finance, Insurance/Other 6%
Slide 16: Rush Enterprises Annual Truck Sales
RUSH ENTERPRISES ANNUAL TRUCK SALES Units (Thousands) 50 40 30 20 10 16.8 10.8 mUsed 13.0 10.9 2017 Light-duty 14.6 2018 ™ Medium-duty 10.7 11.3 Ee 2020 2021E expect more.
Slide 17: Vehicle Franchises
VEHICLE FRANCHISES Peterbilt, Class 6-8 - 63 locations, 11 states + International, Class 5-8 - 42 locations, 9 states, 50% ownership of 14 locations in Canada * Ford, Class 3-7-9 locations, 7 states * Hino, Class 5-7 - 33 locations, 9 states * Isuzu, Class 4-5 - 26 locations, 9 states * Blue Bird -
Slide 18: Class 8 Customers
CLASS Strong v 8 CUSTOMERS ocational component Large fleets consolidating Private mid-size fleets remain viable component of truckload carrier @ UnivarSolutions Pitot. rnc peel ey Rush Enterprises 2020 U.S. Class 8 market share — 5.5% Independent owner-operator now variable Vocational 40-45% Large F
Slide 19: Class 4-7 Customers
CLASS 4-7 CUSTOMERS Rush Enterprises 2020 U.S. Class 4-7 market share - 4.9% Vocational and specialty markets Ready-to-Roll® National fleet accounts Market tied closely to general economy amazon Sater FedEx. <Q © Nestle: GH Sees RedBell ater Offige ed expect more.
Slide 20: Rush Truck Leasing
RUSH TRUCK LEASING ¢ Full-service leasing and rental LEASING AND RENTAL REVENUE « Lease trucks captive source for $300 parts and service revenue $250 $238 $248 $236 $245 * PacLease and Idealease franchises g208 «8217 * 44 locations including 3 captive shops $200 * 7,995 units in truck fleet, includi
Slide 21: Historical Results
HISTORICAL RESULTS $in Millions, except Nine Months Nine Months per share amounts Ended 9/30/2020 | Ended 9/30/2021 Revenue $4,713.9 $5,506.2 $5,809.8 $4,735.9 $3,467.7 $3,814.3 Gross profit $829.9 $978.3 $1,025.6 $875.5 $639.3 $797.9 Gross profit margin 17.6% 17.8% 17.1% 18.5% 18.4% 20.9% Adjusted
Slide 22: Adjusted Return on Invested Capital
ADJUSTED RETURN ON INVESTED CAPITAL $in Thousands 2017 2018 2019 2020 9130/2020 024 Total debt (GAAP) $1,473,230 $1,693,306 $1,716,384 $1,158,553 $1,287,766 $843,871 Adjustments: Debt rei esse (5598 512) (§589,933) ($661,191) (601,272) (616.998) (§485,141) Floorplan notes payable (S778,561) ($1,023,
Slide 23: Free Cash Flow
FREE CASH FLOW $in Thousands Net cash provided by operations Acquisition of property/equipment Free cash flow” Adjustments: Draws (payments) on floor plan financing, net Proceeds from lease’rental debt Principal payments on lease/rental debt Cash used for lease/rental fleet purchases Non-maintenance
Slide 24: Rush Enterprises
aN ENTERPRISES ,1€SS Atude
Slide 25: Appendix
APPENDIX This presentation contains certain Non-GAAP financial measures as defined under SEC rules, such as Adjusted EBITDA, Adjusted EBIT, Adjusted EBIT Margin, Adjusted Net Income, Adjusted EPS, Adjusted Total Debt, Adjusted Net Debt, Adjusted Invested Capital, Adjusted Return on Invested Capital,
Slide 26: Appendix Reconciliation: Adjusted Net Income and EPS
APPENDIX RECONCILIATION Adjusted Net Income and EPS Nine Months Nine Months $in Millions, except per share amounts 2017 2018 2019 2020 Ended 9/30/2020 | Ended 9/30/2021 Net income $172,129 $139,062 $141,583 $114,887 $73,862 $172,776 Adjustments: ERP platform write-off, net of tax - $15,886 = = = = T
Slide 27: Appendix Reconciliation: Adjusted EBITDA and EBIT
APPENDIX RECONCILIATION $in Thousands Net Income Adjusted Net Income” Provision for Income Taxes Interest expense Depreciation and amortization Asset impairmenticharge, net of tax (Gain) Loss on sales of assets EBITDA* Adjustments: Interest expense associated with floor plan notes payable Adjusted E
Rush Enterprises Inc \tx\ — Investor Presentation (October 2021) on 6ix