Rush Enterprises, Inc. · NASDAQ:RUSHA
Rush Enterprises — Rush Enterprises Inc \tx\ — Investor Presentation (August 2018)
26 slides from Rush Enterprises's investor presentation, Aug 29, 2018
Slide 1: Rush Enterprises
ENTERPRISES.
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 * 7,000 dedicated employees + $4.7 billion in revenue in 2017 * 32,756 trucks sold in 2017 *4.5-6.6% U.S. Class 4-8 market share in 2017 * Aand B common shares due to voting control requirements included in Peterbilt d
Slide 4: Commercial Vehicle Market
Commercial Vehicle Market + General economic confidence positively impacting truck sales and aftermarket services —Continued strength in vocational markets — Strong general freight environment — Over-the-road fleet market growing + Used truck values improving, demand is strong, increased used truck
Slide 5: US Retail Truck Sales
US Retail Truck Sales se @ Class 8 @ Class 4-7 300 250 a Units ($000s) ‘S s 50 2008 §=.2009 2010 20119 2012 2013 «2014 = 2015201639 2017 2018E 110 | 174 Class 8 REE) 7. 188 4 253 1! Class 4-7 RRNA 114 118 146 164 180 200 218 226 242 251
Slide 6: Rush Truck Centers
Rush Truck Centers + Largest commercial vehicle dealer group in North America * More than 110 locations in 22 states * Class 3-8 truck sales, full range of aftermarket solutions + Broad market segment coverage + Largest dealer group for Peterbilt, Navistar, Hino, Isuzu, growing with Ford + Leasing a
Slide 7: Rush Truck Centers Network
Rush Truck Centers Network
Slide 8: Solutions Network
Solutions Network * Capabilities for all makes and models + Aftermarket parts — More than $228 million parts inventory — Proprietary Rig Tough truck parts — RushCare Rapid Parts call centers * Service and body shop — 2,257 service bays; 2,507 technicians; 29 collision centers — Complete range of mai
Slide 9: Natural Gas Sales and Service
Natural Gas Sales and Service + Natural gas-powered vehicles remain long-term growth opportunity + Rush sales — more than 6,170 units since 2005 * Sales support — Green consultant — Sales specialists + Parts and service support — Natural gas operations manager — 27 dedicated CNG locations — Natural
Slide 10: Momentum Fuel Technologies
Momentum Fuel Technologies * Innovative design and manufacturing + Advanced safety features * Installation expertise + Nationwide service network + Multiple configurations serving over-the-road, refuse, construction, beverage, bulk haul and transit U.S. CLASS 8 NATURAL GAS ADOPTION RATES %6US Class
Slide 11: Absorption Performance
Absorption Performance * Critical metric for dealership efficiency ABSORPTION RATIO* * Measures less cyclical gross profit compared to controllable expenses 120 + Above 95% in recession due to efficient expense management + Entered up cycle at 106% ae * 121% overall in 2017 421 80 8 9 10 11 12 13 14
Slide 12: Quality of Earnings
Quality of Earnings 100 2006 2009 Units 290,000 000 2017GP Margin Truck Sales 7.6% | Parts/Service 36.5% | Rental and Leasing 15.8% Parts and Service m Truck Sales m Leasing & Rental m= Other expect mo
Slide 13: Rush Annual Truck Sales
Rush Annual Truck Sales 40,000 36,000 32,000 28,000 24,000 20,000 16,000 12,000 8,000 4,000 40% 11,135 10,952 12,000 7,893 7,008 7,060 7,500 6,405 2013 2014 2015 2016 2017 2018E Used mi Light-duty Medium-duty Class 8 expect more.
Slide 14: Commercial Vehicle Franchises
Commercial Vehicle Franchises Peterbilt, Class 6-8 - 55 locations, 11 states International, Class 5-8 — 46 locations, 9 states Ford, Class 3-7 - 8 locations, 7 states o TRUCKS Hino, Class 5-7 — 31 locations, 9 states Isuzu, Class 4-5 — 25 locations, 9 states 0 Mitsubishi Fuso, Class 4-5 — 5 location
Slide 15: Rush Class Customers
Rush Class 8 Customers Rush 2017 US Class 8 market share - 6.6% * Strong vocational component + Large fleets consolidating + Private mid-size fleets remain viable + Independent owner-operator now variable component of truckload carrier cm Walmart>\< \MARTEN aaa Ceetaton (E esres| wu osHxbsH Pilot —
Slide 16: Rush Class 4-7 Customers
Rush Class 4-7 Customers Rush 2017 US Class 4-7 market share - 4.5% + Vocational and specialty markets Ready-to-roll inventory + National fleet accounts + Market tied closely to the general economy TOWING! RECOVERY 40%
Slide 17: Rush Truck Leasing
Rush Truck Leasing * Full service leasing and rental + Lease trucks captive source for parts and service revenue * PacLease and Idealease franchises + 46 locations including 4 captive shops + 7,986 units in truck fleet; 1,132 units under contract maintenance * Growing need by customers for outsource
Slide 18: Strategic Growth Initiatives
Strategic Growth Initiatives * 2022 financial goals — $7.0 billion in annual revenue - 5% pretax profit margin * Growth goals and opportunities — Grow parts revenue to $2 billion — Grow service and body shop revenue from $385 million to $540 million — Increase Momentum Fuel Technologies market share
Slide 19: Company at a Glance
Company at a Glance Rush Truck Centers Rush Bus Centers Rush Refuse Systems Rush Crane Systems Rush Towing Systems Rush Truck Leasing Rush Truck Insurance Services Rig Tough Truck Parts House of Trucks Momentum Fuel Technologies Custom Vehicle Solutions Perfection Truck Parts & Equipment & Chrome Co
Slide 20: Historical Results
Historical Results $in millions, except per 2017 | SxMonthe Ended | Six Months Ended Shareamounts P| 2014 | 2015 | 2016 | 207 | GRaROTT 6/30/2018 Revenue $47274 $4979T = $4.2146 = $4,713.9 $2,248.3 $2,589.6 Gross Profit $756.0 $7849 $718.0 $829.9 $397.0 $4704 Gross Profit Margin 16.0% 15.8% 17.0% 17
Slide 21: Adjusted Return on Invested Capital
Adjusted Return on Invested Capital 2016 2017 | 6/30/2017 | 6/30/2018 Adjustments Delt relate ese) (9539426) ($603,894) ($579,819) ($598,512) ($560,380) ($579,434) reer ran ($845,977) ($854,758) ($646945) (S778.561) ($692,125) ($867,992) ‘Adjusted total debt* $102238 $127,626 © $108677 «$96,157 «$10
Slide 22: Free Cash Flow
Free Cash Flow Sownnss | zo | zis | zse | zr | ZARUGAGE, | Netoash provided by $88,937 $227,280 $621,170 $182,737 $428 976 $211,998 Acquistion ok nent (8260,820) ($367,790) ($195,965) ($209,917) ($161,269) ($246,863) Free cash low* ($171,883) ($140,540) $324,205 ($57,180) $267,707 ($34,566) Adjustme
Slide 23: Enterprises
ENTERPRISES.
Slide 24: Appendix
Appendix This presentation contains certain Non-GAAP financial measures as defined under SEC tules, 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 25: Appendix Reconciliation adjusted net income and EPS
Appendix Reconciliation adjusted net income and EPS Six Months Six Months In thousands, except per a per | 04 | 2015 aus 2017 | Ended 6/30/2047 | Ended 6/30/2018 share amounts Net Income $79,957 $66,053 $40,582 $172,129 $36,478 $50,428 Adjustments Reamer es $5425 ERP platform write-off, $15,682 sree
Slide 26: Appendix Reconciliation adjusted EBITDA and EBIT
Appendix Reconciliation adiusted esiroa and esr Net Income $79.95T $66,053 $40582 $172,129 $36.478 $50,428 ‘Adjusted Net Income $82,040 $66,053 $46,007 $89,267 $36,478 $66,110 aes $50586 $41,750 $2972 $47.32 ——$20.163 516587 Interest expense $11,198 $13473 $14,279 $1210 $5615 $8,800 peereoaion aid $
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