Rush Enterprises, Inc. · NASDAQ:RUSHA
Rush Enterprises — Rush Enterprises Inc \tx\ — Investor Presentation (July 2015)
28 slides from Rush Enterprises's investor presentation, Jul 31, 2015
Slide 1: Rush Enterprises – July 31, 2015
VN ENTERPRISES duly 31, 2015 1 expect more.
Slide 2: Disclosure/Safe Harbour
Disclosure/Safe Harbour 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 * 6,989 dedicated employees + $4.7 billion in revenues in 2014 * 35,352 trucks sold in 2014 * 4.9-7.1% U.S. Class 4-8 market share in 2014 * $40 million share repurchase authorization « Aand B common shares due to voti
Slide 4: Commercial Vehicle Market
Commercial Vehicle Market « Fleet age will continue to drive strong aftermarket sales « Automotive strong; commercial and residential construction continues to improve Vocational markets drive need for aftermarket solutions (upfitting, mobile service, modifications) « Alternate fuel vehicles growing
Slide 5: US Truck Retail Sales
US Truck Retail Sales Units (00's) 360 300 250 \ 200 \ 150 \ 100 ACT Research 008 «= 2009) «2010 2011 «2012 «2013 «2014 2015E 50
Slide 6: Rush Truck Centers
Rush Truck Centers « Largest commercial vehicle dealer group in North America * 120 locations in 20 states « Broad market segment coverage + Peterbilt and Navistar divisions « Medium-duty operates within both divisions « Leasing and rental « Financial and insurance services * Over 5 million sq. ft.
Slide 7: Peterbilt Division
Peterbilt Division oe e e os e . ° a ; A ° . of. : A . i. ee e e * ee ° ee o * o &
Slide 8: Navistar Division
Navistar Division t. by ra) “ a oe ler e ry ee e- oes ry e & Pegs
Slide 9: Rush Truck Centers Network
Rush Truck Centers Network & Ve .? i : aS . . a oe Cat es ry e § XQ : é- x) e e ° e oes e ° e e ~. e . : ° bd . om %y a 2 Os Peee . e 2 ee e eo ay 73 :
Slide 10: Solutions Network
Solutions Network * 120 locations support all Rush businesses * Capabilities for all makes and models « Aftermarket Parts - $220 million parts inventory — Proprietary Rig Tough truck parts — RushCare Rapid Parts call centers * Service and Body Shop — 1,965 service bays; 2,442 technicians; 28 collisi
Slide 11: Natural Gas Sales and Service
Natural Gas Sales and Service « Expected 8 - 10% of market by 2018 « Rush sales —- 4,136 units since 2005 (497 YTD) * Sales support — Green consultant — Sales specialist « Parts and service support — Natural Gas Operations Manager - 14 dedicated CNG locations, 12 underway — Natural Gas service being
Slide 12: Momentum Fuel Technologies
Momentum Fuel Technologies + Innovative design and manufacturing capabilities * Advanced safety features « Installation expertise * Nationwide service network * Production Summer 2015 U.S. CLASS 8 NATURAL GAS ADOPTION RATES va oi: AR 60 7 00 | 40 | . 30 | 20 | : | _ 4 Pao Lafill.f LS | ; 2012 2013 2
Slide 13: Absorption Performance
Absorption Performance * Critical metric for dealership efficiency ABSORPTION RATIO® « Measures less cyclical gross profit 120 5 compared to controllable expenses « Above 95% in down cycle due to efficient expense management « Entered up cycle at 106%; 100 92% in 2003 * Q3 2014 record 120.2% * 118%
Slide 14: Quality of Earnings
Quality of Earnings ‘00 Z A y 80 ani 29.1% 36.9% 60 40 71.0% 62.6% 52.5% ‘ 20 Peak 0 2006 2014 Parts and Service Truck Sales Leasing and Rental Class 8 Units 290,000 224,000
Slide 15: Rush Annual Truck Sales
Rush Annual Truck Sales 15,833 24,000 9,545 | 20,000 9.925 9,052 16,000 9,922 » 8,416 12,000 4 5,469 7,126 8,000 A eg 2984 gt = ee 7,893 8,000 §)2'% 4,000 31% 3 4,649 4744 ; a 0 2010 2011 2012 2013 2014 2015E Used @ Light - Duty Medium — Duty @ Class 8
Slide 16: Commercial Vehicle Franchises
Commercial Vehicle Franchises Peterbilt, Class 6-8 International, Class 5-8 Isuzu, Class 4-5 Hino, Class 5-7 Ford, Class 3-7 Mitsubishi Fuso, Class 4-5 — 50 locations, 10 states — 59 locations, 10 states — 31 locations, 10 states — 31 locations, 8 states - 6 locations, 6 states - 5 locations, 3 stat
Slide 17: Rush Class Customers
Rush Class 8 Customers Rush US Class 8 je) Walmart market share - 6% to 6.5% . wae * Strong vocationalcomponent = saxte « Large fleets consolidating « Private mid-size fleets remain viable « Independent owner-operator Uegeule. oh now variable component of truckload carrier Fed past = ZLemex aia
Slide 18: Rush Class 4-7 Customers
Rush Class 4-7 Customers Rush US Class 4 -7 bright house ERR Di MASCO market share - 5% - 5.5% 5 i Plorce. * Vocational and specialty markets Mpresuild IPODS] « Ready to roll inventory + National fleet accounts « Market tied closely to the : 4 PICK-UP/ general economy DELIVERY
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 * 72 locations including 14 captive shops + 7,436 truck fleet, 1,251 units under contract maintenance * Growing need by customer for outsourced mainten
Slide 20: Growth Strategy
Growth Strategy * Goals — Provide comprehensive solutions and premier service to commercial equipment industry — Expand scope of commercial equipment product offerings — Enhance value of Rush brand * Objectives — Expand network — Extend breadth of product and service offerings in current markets — I
Slide 21: Company at a Glance
Company at a Glance Rush Truck Centers Rush Refuse Systems Rush Crane Systems Rush Towing Systems Rush Bus Centers Rush Truck Financing Rush Truck Leasing Rush Truck Insurance Perfection Equipment Rig Tough Truck Parts Rig Tough Used Trucks Momentum Fuel Technologies Custom Vehicle Solutions Chrome
Slide 22: Historical Results
Historical Results $ in millions, except per 6months ended 6 months ended share amounts ZOO au ouE ze aon 6/30/2014 6/30/2015 Revenue $1,4979 $2,580.6 —$3,0906 $3,3847 © $4,727.4 $2,141.4 $2,523.8 Gross Profit $284.9 $423.3 $500.8 $572.0 $756.0 $359.3 $401.3 Gross Profit Margin 19.0% 16.4% 18.2% 16.
Slide 23: Adjusted Return on Invested Capital
Adjusted Return on Invested Capital $ in thousands 2010 2011 2012 2013 2014 6/30/2014 6/30/20 Total debt $532,141 $804,534 $984,157 $1,121,807 $1,487,641 $4,271,524 $4,524,501 Adjustments Debt related to lease pie rene ($181,022) ($233,624) ($322,913) ($413,066) ($539,426) ($475,540) ($569,968) Floo
Slide 24: Free Cash Flow
Free Cash Flow housands 2010 2011 2012 2013 2014 12 montis 12 montis Sit ended 6/30/2014 ended 6/30/2015 ean fetal) $66,433 ($81,369) $219,336 © $173,488 © «$88,937 $181,274 $104,669 area ($84,303) ($148,543) ($170,951) ($191,884) ($260,820) ($225,270) ($308,819) Free cash flow ($17,870) ($229,912)
Slide 25: Rush Enterprises – July 31, 2015
VN ENTERPRISES duly 31, 2015 expect more.
Slide 26: Appendix
Appendix This presentation contains certain Non-GAAP financial measures as defined under SEC rules, such as Absorption Ratio, Adjusted EBITDA, Adjusted EBIT, Adjusted EBIT Margin, Adjusted Net Income, Adjusted EPS, Adjusted Total Debt, Adjusted Net Debt, Invested Capital, Adjusted Return on Invested
Slide 27: Appendix Reconciliation Adjusted Net Income and EPS
App endix Reconciliation Adjusted Net Income and EPS In thousand: share amounts tper 2010 2011 2012 2013 2014S mor 6/30/2014 6/30/2015 Net Income $31,282 $55,213 $62,455 $49,217 $79,957 $31,852 $36,357 Adjustments Income from Discontinued Operations ($6,715) W. Marvin Rush retirement payment accrual
Slide 28: Appendix Reconciliation Adjusted EBITDA and EBIT
Appendix Reconciliation Adjusted EBITDA and EBIT 6monthsended 6m $ in thousands 2010 2011 2012 2013 2014 Adjusted Net Income* $24,567 $55,213 $62,455 $55,791 $82,040 Provision for Income Taxes $11,737 $34,964 $38,728 $36,047 ‘$50,586, $20,152 $22,993 Interest expense $5363 $7,161 «$13,017 $10,693 $1
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