Rush Enterprises, Inc. · NASDAQ:RUSHA
Rush Enterprises — Rush Enterprises Inc \tx\ — Investor Presentation (May 2023)
29 slides from Rush Enterprises's investor presentation, May 24, 2023
Slide 1: Slide 1
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 * 8,121 dedicated employees + $7.1B in revenue in 2022 + 34,881 trucks sold in 2022 * 2022 Class 8 market share: 6.3% U.S. and 1.8% Canada + 2022 Class 4-7 market share: 4.6% U.S. and 2.2% Canada
Slide 4: Company at a Glance
COMPANY AT A GLANCE Rush Truck Centers Rush Truck Leasing Rush Refuse Systems Rush Truck Insurance Rush Crane Systems House of Trucks Rush Towing Systems Cummins Clean Fuel Technology Rush Bus Centers Custom Vehicle Solutions Perfection Truck Parts & Equipment Chrome Country World Wide Tires expect
Slide 5: Economic Outlook
ECONOMIC OUTLOOK + U.S. GDP growth forecast currently calls for shallow recession + Banking sector disturbances may } tighten credit availability + Inflation moderating, but expected to remain elevated * Higher interest rates likely to negatively impact consumer spending and residential construction
Slide 6: Industry Outlook
INDUSTRY OUTLOOK + Commercial vehicle demand expected to remain strong through 2023 + New truck production improving: not yet caught up to customer demand * Used truck values expected to continue decreasing in second half of 2023 + Parts availabilty improved significantly + Rate of inflation expecte
Slide 7: Liquidity and Expense Management
LIQUIDITY AND EXPENSE MANAGEMENT + Strong free cash flow; $226M in cash as of March 2023 + Continuing to invest in strategic initiatives + Authorized $150M share repurchase program in December 202, increased dividend in Q3 2022 + Disciplined expense management approach * $1.18 in floorplan facilites
Slide 8: U.S. Retail Truck Sales Projections to 2027
U.S. RETAIL TRUCK SALES PROJECTIONS TO 2027 350 300 250 200 150 100 50 Units (Thousands) 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023E 2024E 2025E 2026 2027E Class8 | 188 | 224 | 253 Class 47 | 180 197 | 256 196 | 227 | 259 249 Source: ACT Research Class 8 Class 4-7
Slide 9: Strategic Growth Initiatives Report Card 2017-2022
STRATEGIC GROWTH INITIATIVES REPORT CARD 2017-2022 $6.7B annual revenue $7.1B 5% pretax profit margin 7.2% Grow parts revenue from $1B to $2B $1.8B Grow service and body shop revenue from $385M to $540M $528M Increase CNG market share to 30% 15% with Momentum Fuel Technologies Increase U.S. Class 8
Slide 10: Strategic Growth Initiatives
STRATEGIC GROWTH INITIATIVES + 2027 financial goals HI i I ~ $108 in annual revenue Z l = 6% return on sales * Growth goals and opportunities Grow aftermarket parts and service revenue to $3.5 Increase U.S. Class 8 market share to 7.5% Increase U.S. Class 4-7 market share to 5.5% Maintain RTL retum
Slide 11: Sustainability - ESG
SUSTAINABILITY - ESG Oversight by Nominating and Governance Committee of the Board Issued first Corporate Responsibilty Report - April 2024 Environmental — Supporting transition from fossil fuels — Working with OEMs on alternative fuel technologies — Cummins Clean Fuel Technologies joint venture — R
Slide 12: Rush Truck Centers
RUSH TRUCK CENTERS + Largest commercial vehicle dealer network in North America * 140 locations in 23 states, 15 locations in Canada * Class 3-8 commercial vehicle sales, full range of aftermarket solutions + Largest dealer group for Peterbilt, Navistar, Hino, Isuzu, growing with Ford + Broad market
Slide 13: Rush Truck Centers Network
RUSH TRUCK CENTERS NETWORK © Peerbt Dealerships © ‘Inemnatonal Dealerships © IndependentPars and Senice Locatons| Peter Irteatonal Foo = expect more.
Slide 14: Solutions Network
SOLUTIONS NETWORK * Capabilities for all makes and models * Aftermarket parts ~ More than $325M parts inventory ~ Genuine OEM and all-makes parts, including proprietary Rig Tough and Premium Power powertrain parts * Service and body shop — 2,636 service bays ~ 2,706 technicians in the U.S ~ 222 tech
Slide 15: An Unrivaled Portfolio of Aftermarket Capabilities
AN UNRIVALED PORTFOLIO OF AFTERMARKET CAPABILITIES af) BS a oS \VEHICLE RECALL AND STATE.OF-THEART ‘ALTERNATIVEFUELS COLLISIONCENTER VEHICLE MODIFICATION ‘CAMPAIGN MANAGEMENT SERVICE FACILITIES
Slide 16: Absorption Performance
ABSORPTION PERFORMANCE * Critical metric for dealership efficiency 450% ABSORPTION RATIO* + Measures less cyclical gross profit 1% compared to controllable expenses 130% a 7 1 + 137% overall in 2022 1149 HE say ST + 137% in Q1 2023 iO 90% 70% 50% Zio mrt 212 zo zo Zs BIE HT a0 ZO ZOD 2021 272 nab ca
Slide 17: Quality of Earnings 2022
QUALITY OF EARNINGS 2022 Lease, RentaliFinance, InsurancelOther —| Lor ye Service ~ Lease, RentallFinance, 62% Insurance/Other 6%
Slide 18: Rush Enterprises Annual Truck Sales
RUSH ENTERPRISES ANNUAL TRUCK SALES 50 40 2 3 . 146 168 170 z 130 107 114 ar) 9 109 i 13 105 110 125 10 _ @ G ad 2017 2018 2020 2021 2022 20238 Used Liked) eMledumety las expe more.
Slide 19: Vehicle Franchises
VEHICLE FRANCHISES + Peterbilt, Class 6-8 - 65 locations, 11 states ‘BUILT! + International, Class 5-8 - 58 locations, 12 states, = } 80% ownership of 15 locations in Canada + Ford, Class 3-7 - locations, 7 states + Hino, Class 6-7 ~ 34 locations, 9 states 2 ‘venniseacte ED 10] + Isuzu, Cass 4-5 ~ 2
Slide 20: Class 8 Customers
CLASS 8 CUSTOMERS + Rush Enterprises 2022 U.S. Class 8 market share - 6.3% * Strong vocational component + Large fleets consolidating Large ie 30-35% + Private mid-size fleets remain viable + Independent owner-operator now variable component of truckload carrier Wig size Fleets Feckx. wma: UNF! yn 9
Slide 21: Class 4-7 Customers
CLASS 4-7 CUSTOMERS + Rush Enterprises 2022 U.S. Class 4-7 market share - 4.6% Vocational and specialty markets Ready-to-Roll? * National fleet accounts *+ Market tied closely to general economy amazon Saver FedEx is ee a) Truce’ EERE © verroaw southweste expect Pitore.
Slide 22: Rush Truck Leasing
RUSH TRUCK LEASING + Full-service leasing and rental + Lease trucks captive source for parts and service revenue + PacLease and Idealease franchises + 51 locations including 6 captive shops + 10,366 units in truck fleet, including cranes + 1,904 units under contract fleet maintenance * Growing need
Slide 23: Historical Results
HISTORICAL RESULTS Revenue Goss prot Gross prot margin ‘Adjusted EBT (1)" ‘Agjsted EBIT margin® Netincome ‘Adjusted netincome(1)° EPS) ‘Adjusted EPS (1° () ncfesptaganen ssbotS126milnrestoae se fines n Momentive Teese 22 $5,8098 $0256 177% $1905 33% $1416 $1418 S251 s25t 347359 $8755 185% st499 32%
Slide 24: Adjusted Return on Invested Capital
ADJUSTED RETURN ON INVESTED CAPITAL ‘Total debt (GAAP) $1,716,384 $1,158,553. $1,082,187 $1,331,328 $1,153,070 $1,410,572 Adjstents Deb tae ee ($664,191) ($601,272) (447,098) (6393879) (3446529) ($390,386) Foor plannoes payable ($996,336) (8511785) ———($630731) 483.203) (970220) (61. 01597%) ‘Adjust
Slide 25: Free Cash Flow
FREE CASH FLOW "Net cash rovdedty operations ‘qusiton of popeylequpmert Freecashtow” igen Dans (paymens) on oo plannang, nt ‘Draws (payment) onleaseerta debt Proceods fom leasetetal debt Pincpal pamenis onleaseleial debt Cashusedtrleasetent eet purchases Nonmeintnance capi expendres ‘Adjusted free c
Slide 26: Slide 26
Slide 27: 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 28: Appendix Reconciliation: Adjusted Net Income and EPS
APPENDIX RECONCILIATION Adjusted Net Income and EPS Netinoome S141583Si14ge7 sunt $391,302 392453 $9045, Adjusment ‘Ganon equiyivestnent - - - ($9788) - - ‘Adjusted Net income" (1). 141583 $1t4ga7 241415381504 392453 $90,455 Died shares oustanding EPS 56356 56202 57878 57.51 s7912 56.564 32) $251 $2
Slide 29: Appendix Reconciliation: Adjusted EBITDA and EBIT
APPENDIX RECONCILIATION ‘Net nome ‘Adjusted Net income” Provision or home Taxes Inerest expense Depreciation and amartzaton (Gain Loss on sles of assets EBITDA ‘Adjusts Interest expense associaled wih foo: pan notes payable ‘Adjusted EBITD’ Depreciation and amartzaton ‘Adjusted EBT “Non Gite franca
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