Rush Enterprises, Inc. · NASDAQ:RUSHA
Rush Enterprises — Rush Enterprises Inc \tx\ — Investor Presentation (November 2019)
25 slides from Rush Enterprises's investor presentation, Nov 1, 2019
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. Itis important to note that our actual results
Slide 3: Company Overview
COMPANY OVERVIEW * Full service solutions provider to commercial vehicle industry * 7,356 dedicated employees + $5.5B in revenue in 2018 * 37,797 trucks sold in 2018 + 5.7% U.S. Class 8 market share in 2018 * 5.0% U.S. Class 4-7 market share in 2018 + Aftermarket revenues account for 64% of company
Slide 4: Company at a Glance
COMPANY AT A GLANCE Rush Truck Centers Rush Truck Leasing Custom Vehicle Solutions Rush Refuse Systems Rush Truck Insurance Perfection Truck Parts & Equipment Rush Crane Systems House of Trucks Chrome Country Rush Towing Systems Momentum Fuel Technologies World Wide Tires Rush Bus Centers expect mor
Slide 5: Commercial Vehicle Market
COMMERCIAL VEHICLE MARKET * Healthy economy positively impacting truck sales and 4 aftermarket services but growth slowing + Aftermarket parts and service activity remains stable * Market conditions and industry indicators expected to negatively impact Class 8 truck sales beginning Q4 2019 4 * Incre
Slide 6: U.S. Retail Truck Sales
U.S. RETAIL TRUCK SALES 300 250 200 150 Units (Thousands) 100 50 2014 2015 2016 2017 2018 = 2019E = 2020E_- 2021E © 2022E)« 2028E = 04E 197 256 27 204 212 225 258 177 226 258 266 257 257 262 267 262 -wClass8 Class 4-7 ee
Slide 7: Strategic Growth Initiatives
STRATEGIC GROWTH INITIATIVES * 2022 financial goals — $7B in annual revenue — 5% pre-tax profit margin * Growth goals and opportunities Grow parts revenue to $2B Grow service and body shop revenue to $600M Increase U.S. Class 8 market share to 7.5% Increase U.S. Class 4-7 market share to 6.5% ~ Incr
Slide 8: Rush Truck Centers
RUSH TRUCK CENTERS + Largest commercial vehicle dealer group in North America * 120 locations in 22 states * 50% ownership of Rush Truck Centres of Canada, A 14 International locations in Ontario f * Class 3-8 truck sales, full range of aftermarket solutions. + Broad market segment coverage + Larges
Slide 9: Rush Truck Centers Networks
RUSH Mantes CENTERS NETWORKS © Peterbit Dealerships © Intemational Dealerships @ Independent Pars and Service Locations © Rush Truck Centres Canada
Slide 10: Solutions Network
SOLUTIONS NETWORK * Capabilities for all makes and models + Aftermarket parts - More than $274M parts inventory - Genuine OEM and all-makes parts including proprietary Rig Tough and Premium Power powertrain parts * Service and body shop — 2,401 service bays, 2,603 technicians; 26 collision centers —
Slide 11: 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 12: Absorption Performance
ABSORPTION PERFORMANCE * Critical metric for dealership efficiency + Measures less cyclical gross profit compared to controllable expenses + Above 95% in recession due to efficient expense management + Entered up cycle at 106% * 122% overallin 2018 130% 110% 920% 70% 50% ABSORPTION RATIO* 2009 2010
Slide 13: Quality of Earnings
QUALITY OF EARNINGS 100% 79% 6.0% 4.0% 27% 29% 4.2% 80% 60% 40% 20% 0% 2018 Class 8 Units 255,000 2018GP Margin Truck Sales 7.8% | Parts/Service 37.1% | Rental and Leasing 17.2% expect mParts and Service m= Truck Sales mLeasingandRental Other more.
Slide 14: Rush Enterprises Annual Truck Sales
RUSH ENTERPRISES ANNUAL TRUCK SALES Units (Thousands) 50 40 30 20 10 15.8 2014 2015 2016 Used Light-duty 2017 = Medium-duty mClass 8 168 146 108 20 129 11.2 14 109 2018 15.0 13.5 20196 expect more.
Slide 15: Vehicle Franchises
VEHICLE FRANCHISES + Peterbilt, Class 6-8 - 59 locations, 11 states C Pater) * International, Class 5-8 - 43 locations, 9 states, 50% ownership of 14 locations in Canada * Ford, Class 3-7 - 9 locations, 7 states + Hino, Class 5-7 - 32 locations, 9 states + Isuzu, Class 4-5 - 26 locations, 9 states *
Slide 16: Class 8 Customers
CLASS 8 CUSTOMERS * Rush Enterprises 2018 U.S. Class 8 market share - 5.7% * Strong vocational component Large Fleets + Large fleets consolidating 30-35% * Private mid-size fleets remain viable + Independent owner-operator now variable component of truckload carrier 0, 5 r 0 Mid-Size Fed: Pitot. Wal
Slide 17: Class 4-7 Customers
CLASS 4-7 CUSTOMERS Rush Enterprises 2018 U.S. Class 4-7 market share - 5.0% + Vocational and specialty markets (Bene, + Ready-to-RollsM i + National fleet accounts + Market tied closely to general economy 5 0% . = = & RedBull = serena expect Pino re;
Slide 18: 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 * 8,502 units in truck fleet, 1,117 units under contract fleet maintenance + Growing need by customers for out
Slide 19: Historical Results
HISTORICAL RESULTS Sin Millions, except 2016 2017 Nine Months Ended | NineMonths Ended per share amounts 9730/2018 9730/2019 $7849 si $8299 50783 $7194 i $1088 7 $138 $2 2 7 1 22% Ne st A $17 § $92 $21 3 $2 $3.13 expect more.
Slide 20: Adjusted Return on Invested Capital
ADJUSTED RETURN ON INVESTED CAPITAL NineMonths Ended | Nine Months Ended “020 Total debt $1,586.278 — $1,335441 —$1,473.230 $1,693,306 $1,661,650 $1,750,681 ‘Adjustments, Debtrelaedto lease andrentalteet ($603,894) ($579,819) ($598,512) ($589,933) ($588,079) ($639,138) Floorplan noes payable ($854,7
Slide 21: Free Cash Flow
FREE CASH FLOW TwelveMonths | Twelve Months — Net cash provided by (used in) operations $227,250 $521,170 $152,737 $215,364 $185,485 233,962 Acquistion of propertylequipment ($367,790) ($196,965) ($209,917) ($238,260) ($247,382) ($292,634) Free cash fow* ($140,540) $324,205 ($57,180) ($22,896) (861,
Slide 22: Slide 22
Slide 23: 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 Return on Invested Capital,
Slide 24: Appendix Reconciliation
APPENDIX RECONCILIATION Net income ‘Adjustments Restructuring charges, net of tax ERP platform wrie-of, net of tax Revaluation of deferred tax lables ‘Adjusted Net Income” Ditted shares outstanding EPS EPS Adjusted EPS* Adjusted Net Income and EPS ine Months Ended 018 $66,053 $40,582 $172,129 $139,0
Slide 25: Appendix Reconciliation: Adjusted EBITDA and EBIT
APPENDIX RECONCILIATION ‘Adjusted EBITDA@nd EBIT aan Net income $66,053 $40582 $172,129 $199,062 $92,093 $117,829 ‘Adjusted Net Income” $66,053 $46,007 $89,267 $154,948 $107,775 $117,829 Provision for Income Taxes $41,750 $29372 $47132 $44,107 $29,103 $38,349 Interest expense $13473-$14279 $1230 19.
Rush Enterprises Inc \tx\ — Investor Presentation (November 2019) on 6ix