Rush Enterprises, Inc. · NASDAQ:RUSHA
Rush Enterprises — Rush Enterprises Inc \tx\ — Investor Presentation (August 2024)
27 slides from Rush Enterprises's investor presentation, Aug 26, 2024
Slide 1: Strategic Growth Initiatives
STRATEGIC GROWTH INITIATIVES - 1!) ne * Financial goals joa) — $10B in annual revenue — 6% return on sales * Growth goals and opportunities — Grow aftermarket parts and service revenue to $3.5B — Increase U.S. Class 8 market share to 7.5% — Increase U.S. Class 4-7 market share to 6.5% — Maintain RTL
Slide 2: Investor Presentation August 2024
INVESTOR PRESENTATION August 2024 expect more.
Slide 3: 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 4: Company Performance
COMPANY PERFORMANCE * The largest commercial vehicle dealer group in North America * Full-service solutions provider to commercial vehicle industry * 8,000 dedicated employees * $7.9B in revenue in 2023 * 39,686 trucks sold in 2023 * 2023 Class 8 market share: 6.2% U.S. and 2.0% Canada * 2023 Class
Slide 5: The Premier Full-Service Solutions Provider
THE PREMIER FULL-SERVICE SOLUTIONS PROVIDER Rush Truck Centers The House of Trucks Rush Refuse Systems Cummins Clean Fuel Technologies Rush Crane Systems Custom Vehicle Solutions Rush Towing Systems Perfection Truck Parts & Equipment Rush Bus Centers Chrome Country Rush Truck Leasing World Wide Tire
Slide 6: Industry Outlook
INDUSTRY OUTLOOK + Low freight rates and high interest rates negatively impacting over-the-road customers * Commercial vehicle demand expected to decline through 2024 but should improve in 2025-2026 due to emissions + Vocational segments remain strong : af ¢ Used truck demand weak, but depreciation
Slide 7: Liquidity and Expense Management
LIQUIDITY AND EXPENSE MANAGEMENT * Strong free cash flow; $167M in cash as of June 2024 * Continuing to invest in strategic initiatives ¢ Authorized $150M share repurchase program in December 2023 * Quarterly cash dividend for Q3 2024 - $0.18 * Disciplined expense management appro: ¢ $1.27B in floor
Slide 8: U.S. Retail Truck Sales Projections to 2027
U.S. RETAIL TRUCK SALES PROJECTIONS TO 2027 Units (Thousands) 325 300 275 250 225 200 175 150 2017 2018 2019 2020 = .2021 2022 = 2023 Sa 2024E 2025E 2026E 2027E Source: ACT Research 7 ~#Class 8 Class 4-7 expect more.
Slide 9: Sustainability - ESG
SUSTAINABILITY - ESG Oversight by Nominating and Governance Committee of the Board Issued second Corporate Responsibility Report - Nov 2023 Environmental — Supporting transition from fossil fuels (zero emission vehicles) — Working with OEMs on alternative fuel technologies — Cummins Clean Fuel Techn
Slide 10: Rush Truck Centers
RUSH TRUCK CENTERS ¢ Largest commercial vehicle dealer network in North America ¢ 144 locations in 23 states, 13 locations in Canada * Class 3-8 commercial vehicle sales, full range of aftermarket solutions ¢ Largest dealer group for Peterbilt, Navistar, Hino, Isuzu, Blue Arc, growing with Ford ¢ Br
Slide 11: Rush Truck Centers Network
RUSH TRUCK CENTERS NETWORK
Slide 12: Solutions Network
SOLUTIONS NETWORK * Capabilities for all makes and models + Aftermarket parts — $320 million parts inventory — Genuine OEM and all-makes parts, including proprietary Rig Tough and Premium Power powertrain parts * Service and body shop — 2,648 service bays — 2,800 technicians in the U.S. — 190 techni
Slide 13: An Unrivaled Portfolio of Aftermarket Solutions
AN UNRIVALED PORTFOLIO OF AFTERMARKET SOLUTIONS BE Wie... MOBILE SERVICEAND (ON-SITETECHNICIANS, ‘SAME-DAY COLLISION AND BODY VEHICLE MODIFICATION XPRESS SERVICES. REPAIR SERVICES AND UPFITTING SINGLE SOURCE SOLUTIONS RUSHCARE CUSTOMER EXPERIENCE DATAAND. TECHNOLOGY ‘SERVICE CONNECT ‘COMMUNICATION P
Slide 14: Absorption Performance
14 ABSORPTION PERFORMANCE Critical metric for dealership efficiency ABSORPTION RATIO* . 145% Measures less cyclical gross profit compared to controllable expenses 135% in 2023 134% in Q2 2024 130% 115% 100% 2014 2015 «2016 «2017-2018 2019» 2020-2021 *Absorption ratio is calculated by dividing the gr
Slide 15: Quality of Earnings 2024
QUALITY OF EARNINGS 2024 GROSS Truck Sales REVE N U E Lease, Rental/Finance, PROFIT 62% ~ Insurance/Other —| 9% & Lease, Rental/Finance, Insurance/Other 5%
Slide 16: Rush Enterprises Annual Truck Sales
RUSH ENTERPRISES ANNUAL TRUCK SALES 50 40 E: 30 14.6 168 Ue 13.5 m7 10.7 11.4 > 20 - 113 105 11.0 133 ie 10 , & oe oe oe 2018 2020 2021 2022 2023 2024E ; : expect m Used Light-duty ™ Medium-duty Class 8 more.
Slide 17: Vehicle Franchises
17 VEHICLE FRANCHISES Peterbilt, Class 6-8 — 67 locations, 12 states International, Class 5-8 — 58 locations, 12 states, 80% ownership of 13 locations in Canada Ford, Class 3-7 — 10 locations, 8 states Hino, Class 5-7 — 34 locations, 9 states Isuzu, Class 4-5 — 29 locations, 14 states Dennis Eagle,
Slide 18: Class 8 Customers
18 CLASS 8 CUSTOMERS « Rush Enterprises 2023 U.S. Class 8 market share — 6.2% Strong vocational component + Large fleets consolidating Private mid-size fleets remain viable + Independent owner-operator now variable component of truckload carrier Mid-Size Fleets 15-20% FedEx. Walmart Ui Aye @ osukosu
Slide 19: Class 4-7 Customers
CLASS 4-7 CUSTOMERS Rush Enterprises 2023 U.S. Class 4-7 market share — 5.1% Vocational and specialty markets Ready-to-Roll® inventory National fleet accounts Market tied closely to general economy amazon = Sarat FedEx RS Pick-up/ Deliver Prt) @ cepsi RedBull = Atec Qffice 25% cea fat TRUGREENT verr
Slide 20: Rush Truck Leasing
20 RUSH TRUCK LEASING + Full-service leasing and rental * PacLease and Idealease franchises * 66 locations in 22 states + 9,900+ units in truck fleet, including cranes + 2,200 units under contract fleet maintenance * Growing need by customers for outsourced maintenance | IDEALEASE = Poclease Million
Slide 21: Historical Results
a HISTORICAL RESULTS Revenue $4,735.9 Gross profit $875.5 Gross profit margin 18.5% Adjusted EBIT* $149.9 Adjusted EBIT margin* 3.2% Net income $114.9 Adjusted net income* $114.9 EPS (1) $1.36 Adjusted EPS (1)* $1.36 “Non-GAAP financial measure. See Appendix. $5,126.1 $1,092.3 21.3% $314.8 6.1% $241
Slide 22: Adjusted Return on Invested Capital
22 ADJUSTED RETURN ON INVESTED CAPITAL ee ee ee Total debt (GAAP) $1,158,553 $1,082,187 $1,331,328 $1,687,482 $1,507,482 $1,760,423 Adjustments: Debt related to lease and rental fleet ($601,272) ($447,098) ($393,879) ($543,626) ($377,927) ($529,736) Floor plan notes payable ($511,786) ($630,731) ($9
Slide 23: Free Cash Flow
FREE CASH FLOW Net cash provided by (used in) operating activities Acquisition of propertylequipment Free cash flow” Adjustments: Draws (payments) on floor plan financing, net Acquisition of L&R Assets Non-maintenance capital expenditures Adjusted FCF* *Non-GAAP financial measure $762,982 $422,346 =
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 Retum on Invested Capital,
Slide 26: Appendix Reconciliation Adjusted Net Income and EPS
APPENDIX RECONCILIATION Adjusted Net Income and EPS Net income $114,887 $241,415 $391,382 $347,055 $188,730 $150,269 Adjustment Gain on equity investment - = ($9,788) - - - Adjusted Net Income’ (1) $114,887 $241,415 $381,594 $347,055 $188,730 $150,269 Diluted shares outstanding EPS 84,363 86,817 85,
Slide 27: Appendix Reconciliation Adjusted EBITDA and EBIT
a APPENDIX RECONCILIATION Net Income Adjusted Net Income” Provision for Income Taxes Interest expense Depreciation and amortization (Gain) Loss on sales of assets EBITDA* Adjustments: Interest expense associated with floorplan notes payable Adjusted EBITDA* Depreciation and amortization Adjusted EBI
Rush Enterprises Inc \tx\ — Investor Presentation (August 2024) on 6ix