Rush Enterprises, Inc. · NASDAQ:RUSHA
Rush Enterprises — Rush Enterprises Inc \tx\ — Investor Presentation (October 2016)
28 slides from Rush Enterprises's investor presentation, Oct 31, 2016
Slide 1: Rush Enterprises
WN ENTERPRISES October 31, 2016
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 * 6,100 dedicated employees + $5.0 billion in revenue in 2015 ¢ 37,702 trucks sold in 2015 ° 5.2-6.7% U.S. Class 4-8 market share in 2015 «Aand B common shares due to voting control requirements included in Peterbilt d
Slide 4: Commercial Vehicle Market
Commercial Vehicle Market « Market supply and demand negatively impacting used Class 8 truck values * Continued softness in energy sector and related geographic regions * Overcapacity due to near record Class 8 truck sales in 2015 * Choppy freight environment « Automotive strong; commercial and resi
Slide 5: US Retail Truck Sales
US Retail Truck Sales _ Class 8 @ Class 4-7 300 g 250 * Units ($000s) nN Ss 50 2006 §=2007 «2008 )S 2009 2010 2011S 2012, 2013S 2014) 2015) 2016E Class 8 ld) 157 139 97 110 | 174 199 | 188 224 x} 201 expect more.
Slide 6: Rush Truck Centers
Rush Truck Centers * Largest commercial vehicle dealer group in North America * More than 100 locations in 21 states ¢ Broad market segment coverage * Peterbilt and Navistar divisions * Medium-duty operates within both divisions * Leasing and rental + Financial and insurance services ¢ Over 5 millio
Slide 7: Peterbilt Division
Slide 8: Navistar Division
Slide 9: Rush Truck Centers Network
Rush Truck Centers Network
Slide 10: Solutions Network
Solutions Network * More than 100 Rush Truck Centers locations support all Rush businesses * Capabilities for all makes and models + Aftermarket parts - More than $200 million parts inventory — Proprietary Rig Tough truck parts — RushCare Rapid Parts call centers + Service and body shop — 2,302 serv
Slide 11: Natural Gas Sales and Service
Natural Gas Sales and Service « Natural gas-powered vehicles remain long-term growth opportunity « Rush sales — more than 4,600 units since 2005 * Sales support — Green consultant - Sales specialists « Parts and service support — Natural gas operations manager — 27 dedicated CNG locations — Natural
Slide 12: Momentum Fuel Technologies
Momentum Fuel Technologies * Production began in 2015 * 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
Slide 13: Absorption Performance
Absorption Performance * Critical metric for dealership efficiency ABSORPTION RATIO* . 120 ¢ Measures less cyclical gross profit compared to controllable expenses * Above 95% in recession due to efficient expense management 400 + Entered up cycle at 106 * 116% overall in 2015 80 394 5 6 7 8 9 10 14
Slide 14: Quality of Earnings
Quality of Earnings 2009 Class 8 Units 97,000 253,000 2015GP Margin Truck Sales 6.6% | Parts/Service 36.4% | Rental and Leasing 11.5% Parts and Service m Truck Sales = Other m Leasing and Rental
Slide 15: 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 2011 2012 2013 2014 2015 2016E Used @ Light-duty = Medium—duty Class 8 expect more.
Slide 16: Commercial Vehicle Franchises
Commercial Vehicle Franchises Peterbilt, Class 6-8 - 52 locations, 12 states International, Class 5-8 - 45 locations, 9 states tabi) > Ford, Class 3-7 — 7 locations, 7 states Hino, Class 5-7 — 30 locations, 11 states Isuzu, Class 4-5 — 24 locations, 9 states Mitsubishi Fuso, Class 4-5 — 5 locations,
Slide 17: Rush Class 8 Customers
Rush Class 8 Customers Rush 2015 US Class 8 market share - 6.7% en * Strong vocational component ple + Large fleets consolidating * Private mid-size fleets remain viable * Independent owner-operator now variable component of truckload carrier / MID-SIZE FLEETS 15-20% Gesiaion we, —osiihsn Biot ZZeem
Slide 18: Rush Class 4-7 Customers
Rush Class 4-7 Customers Rush 2015 US Class 4-7 market share — 5.2% + Vocational and specialty markets rad + Ready-to-roll inventory + National fleet accounts MIA + Market tied closely to the generaleconomy \ TOWING! bright house (©) JERR-DAN RedBull’ NY /RecouERY x © CANTEEN ‘Anheuser-Busch
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 * 68 locations including 10 captive shops ¢ 7,977 units in truck fleet; 1,503 units under contract maintenance * Growing need by customers © 885 for ou
Slide 20: Strategic Growth Initiatives
Strategic Growth Initiatives + 2020 financial goals — $7 billion in annual revenue - 4% pretax profit margin * Growth goals and opportunities — Grow our parts business from $1 billion to $2 billion — Expand vehicle technology and customer service solutions — Increase CNG fuel systems market share to
Slide 21: 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 Financing Rush Truck Insurance Services Rig Tough Truck Parts Rig Tough Used Trucks Momentum Fuel Technologies Custom Vehicle Solutions Perfection Truck Pa
Slide 22: Historical Results
Historical Results $in millions, except per | 9monthsended| 9 months ended Shareamounts a2 2013 2014 a | 9/30/2015 9/30/2016 $3,817.9 $3,090.6 $3,3847 $4,7274 $4,979.77 $784.9 Revenue $500.8 $572.0 $756.0 $609.3 Gross Profit Gross Profit Margin 16.2% 16.9% 16.0% 15.8% 16.0% 17.1% Adjusted EBIT (1)*
Slide 23: Adjusted Return on Invested Capital
Adjusted Return on Invested Capital $in thousands 9/30/2015 9/30/2016 Total debt $984,157 $1,121,997 $1,487.641 $1,586,278 $1,587,322 $1,426,678 Adjustments Debtrelatedtolease —(g379913) ($413,066) ($639,426) ($603.894) ($585,184) ($600,586) Haccelaeua ($534,520) ($593,649) ($845,977) ($854,758) ($9
Slide 24: Free Cash Flow
Free Cash Flow 12 months ended | 12 months ended $in thousands 2012 2013 2014 2015 | ns apaie tis aoaae $99,791 $514,543 Net cash provided by lusedinoperatone, «$219,336. «$173,488 $88,937 Acquisition of propertylequipment (170.951) $227,250 ($191,584) ($260,820) ($367,790) ($328,867) ($277,125) Fre
Slide 25: Enterprises
WN ENTERPRISES October 31, 2016
Slide 26: 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 27: Appendix Reconciliation adjusted net income and EPS
Appendix Reconciliation adusted net income and EPS In thousands, except per 9 months ended | 9 months ended share amounts 9/30/2015 9/30/2016 Net Income J $79,957 $66,053 Adjustments retirement 7 ment accrual, net $2,083 $62,455 $55,791 $82,040 $66,053 $56,240 $33,517 39,688 40,506 40,894 41,093 41,
Slide 28: Appendix Reconciliation adjusted EBITDA and EBIT
Appendix Reconciliation adusted E8170 and ESIT $in thousands 2012 2013 2014 2015 | Smonths ended | 9 months ended Net Income $62,455 $49,217 $79.957 $66,053 $56,240 $28,092 Adjusted Net Income* 962,455 $55,791 $82,040 $66,053 $66,240 $33,517 homer $38,728 $36,047 $50,586 $41,750 $35,572 $21,467 Inte
Rush Enterprises Inc \tx\ — Investor Presentation (October 2016) on 6ix