Rush Enterprises, Inc. · NASDAQ:RUSHA
Rush Enterprises — Rush Enterprises Inc \tx\ — Investor Presentation (November 2020)
26 slides from Rush Enterprises's investor presentation, Nov 18, 2020
Slide 1: expect
expect more.
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 + 6,115 dedicated employees + $5.8B in revenue in 2019 + 39,326 trucks sold in 2019 + 5.3% US. Class 8 market share in 2019 + 5.4% U.S. Class 4-7 market share in 2019 + Aftermarket revenues account for 65% of company g
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 Momentum Fuel Technologies Rush Bus Centers Custom Vehicle Solutions Perfection Truck Parts & Equipment Chrome Country World Wide Tires expect Pac
Slide 5: Economic Outlook and Commercial Vehicle Market
ECONOMIC OUTLOOK AND COMMERCIAL VEHICLE MARKET + Uncertainty due to COVID-19 + Government stimulus payments and state re-openings bolstered consumer spending, strengthening freight and spot rates in Q3 ‘+ Timing and amount of future stimulus uncertain 4 + Fed funds at all-time low + ACT Research for
Slide 6: Liquidity and Expense Management
LIQUIDITY AND EXPENSE MANAGEMENT * Strong free cash flow; $259.5M in cash as of September 2020 * $100M line of credit, no outstanding draws * Continued investing in strategic initiatives * Lifted temporary freeze on share repurchase program and increased dividend + Rapidly implemented broad expense
Slide 7: U.S. Retail Truck Sales Projections to 2025
U.S. RETAIL TRUCK SALES PROJECTIONS TO 2025 350 300 250 200 ad Units (Thousands) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020E 2021E 2022E 2023E 2024E 2025E Class 8 197 | 256 | 281 | 186 | 221 486 | 217 Class 4.7 | 146 7 | 216 | 228 | 244 | 274 251 | 269 Source: ACT Research “wClass 8 PrClass +
Slide 8: 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 $28 Grow service and colision center revenue to $600M Increase U.S. Class 8 market share to 7.5% Increase U.S. Class 4-7 market share to 6.5% Incre
Slide 9: Rush Truck Centers
RUSH TRUCK CENTERS + Largest commercial vehicle dealer group in North America * 117 locations in 22 states * 50% ownership of Rush Truck Centres of Canada, 14 International locations in Ontario * Class 38 truck sales, full range of aftermarket solutions * Broad market segment coverage + Largest deal
Slide 10: Rush Truck Centers Network
RUSH TRUCK CENTERS NETWORK (© Petrbit Dealerships @ Irtematonal Dealerships @ Independent Pars and Senice Locations (© Rush ruck Centes Canada expect Piore.
Slide 11: Solutions Network
SOLUTIONS NETWORK * Capabilities for all makes and models + Aftermarket parts — More than $250M parts inventory = Genuine OEM and al-makes parts including proprietary Rig Tough and Premium Power powertrain parts * Service and body shop — 2.379 service bays, 2,071 technicians; 25 collision centers —
Slide 12: Technology and Customer Service Innovation
TECHNOLOGY AND CUSTOMER SERVICE INNOVATION + RushCare Parts Connect + RushCare Service Connect + RushCare Telematics Solutions - Custom fault code monitoring system - OEM/component supplier support + RushCare Rapid Parts and Rapid Service call centers + Nationwide call center and dedicated service c
Slide 13: Absorption Performance
ABSORPTION PERFORMANCE * Critical metric for dealership efficiency ABSORPTION RATIO" 130% * Measures less cyclical gross profit compared to controllable expenses 121% 122% 299, 18% 4g an 18% nang IOP 11086 159% 112 * 120% overall in 2019 = + 119.4% in Q3 2020 90% 70% 50% in i apie est cheater rs exp
Slide 14: Quality of Earnings
QUALITY OF EARNINGS Lease, Rental/Finance, Insurance/Other ~w 5% ™~ Lease, Rental/Finance, Insurance/Other 5%
Slide 15: Rush Enterprises Annual Truck Sales
RUSH ENTERPRISES ANNUAL TRUCK SALES 50 40 30 80 15.0 108 105 20 N2 14 a 11.2 10 a ea 2015 2016 2017 2018 2019 20206 expect Payore. Units (Thousands) m Used Light-duty = Medium-duty sm Class 8
Slide 16: Vehicle Franchises
VEHICLE FRANCHISES + Peterbilt, Class 6-8 ~ 59 locations, 11 states C Aictier) oven * International, Class 5-8 - 42 locations, 9 states, 50% ownership of 14 locations in Canada + Ford, Class 3-7 - 9 locations, 7 states =o EB AK JERRDAN + Hino, Class 5-7 ~ 33 locations, 9 states * Isuzu, Class 4-5 -
Slide 17: Class 8 Customers
CLASS 8 CUSTOMERS Rush Enterprises 2019 U.S. Class 8 market share — 5.3% Strong vocational component Large fleets consolidating Private mid-size fleets remain viable Independent owner-operator now variable component of truckload carrier FedEx. poe nme) Walmart UnFI aA WM Gosia Dsimpie ——Seambergr WE
Slide 18: Class 4-7 Customers
CLASS 4-7 CUSTOMERS Rush Enterprises 2019 U.S. Class 4-7 market share — 5.4% Vocational and specialty markets Ready-to-Roll® oy F National fleet accounts Market tied closely to general economy “@&@S& @ — expect more.
Slide 19: Rush Truck Leasing
RUSH TRUCK LEASING * Full service leasing and rental * Lease trucks captive source for parts and service revenue + PacLease and Idealease franchises + 45 locations including 4 captive shops * 8,155 units in truck fleet, including cranes * 1,404 units under contract fleet maintenance * Growing need b
Slide 20: Historical Results
HISTORICAL RESULTS expect more.
Slide 21: Adjusted Return on Invested Capital
ADJUSTED RETURN ON INVESTED CAPITAL $in Thousands Total debt (GAAP) $1,335441 Agjusiments: Sheree ($579,819) Floorplan notes payable ($646,945) Adjusted toal debt $108677 ‘Cash and cash equivalents: ($82,026) ‘Adjusted net (cash) debt $26,651 ‘Shareholders’ equiy $862,825 Adjusted invested captal* $
Slide 22: Free Cash Flow
FREE CASH FLOW ($238,250) ($293,493) 211 802) 121 $210, $45 3123 expect more.
Slide 23: expect
expect more.
Slide 24: 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 25: Appendix Reconciliation: Adjusted Net Income and EPS
APPENDIX RECONCILIATION Adjusted Net Income and EPS Netincome Adjustments Restructuring charges, net of tax ERP plato wrie-of, net of tax Tax adjustment ‘Adjusted Net income (1) Diluted shares oustanding EPS EPS (2) ‘Adjusted EPS" (2) $40,582 $172,123 $139,062 $141,583 $5425 = & - - $15,886 = - (982
Slide 26: Appendix Reconciliation: Adjusted EBITDA and EBIT
APPENDIX RECONCILIATION Adjusted EBITDA and EBIT Net come ‘Adjusted Net Income* Provision for income Taxes trierest expense Depreciaton and amortzaton ‘Assetimpaimenticharge, net of tax (Gain) Loss on sales of assets EBITDAT Adjustments tet Saas plan ‘Adjusted EBITDA ‘Depreciaton and amorization Adj
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