Rush Enterprises, Inc. · NASDAQ:RUSHA
Rush Enterprises — Rush Enterprises Inc \tx\ — Investor Presentation (November 2022)
29 slides from Rush Enterprises's investor presentation, Nov 10, 2022
Slide 1: Rush Enterprises – November 2022
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 + 7,931 dedicated employees + $5.1B in revenue in 2021 © 30,786 trucks sold in 2021 * 4.9% U.S. Class 8 market share in 2021 (6.4% YTD Q3 2022) * 4.2% U.S. Class 4-7 market share in 2021 (4.7% YTD Q3 2022) expect Pore.
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. economy uncertain — rising interest rates, slowdown in consumer spending causing concern | + Housing starts declining + Manufacturing at risk + Softening retail sales environment + GDP forecast between -1% and 1% + Inflation forecasted at 2-4% expect Pore.
Slide 6: Industry Outlook
INDUSTRY OUTLOOK + Truck demand remains strong + Used truck values contracting + Stable freight volumes, contract rates declining + Spot market rates weak + Supply chain issues continue to impact new vehicles — Manufacturers adjusting capacity, allocating supply — Expected to impact revenues through
Slide 7: Liquidity and Expense Management
LIQUIDITY AND EXPENSE MANAGEMENT * Strong free cash flow; $220M in cash as of September 2022 * Continuing to invest in strategic initiatives + Authorized $100M share repurchase program in December 2021, increased dividend in Q3 2022 * Disciplined expense management approach * $1.1B in floorplan faci
Slide 8: U.S. Retail Truck Sales Projections to 2027
U.S. RETAIL TRUCK SALES PROJECTIONS TO 2027 350 300 250 200 150 2 100 50 0 Units (Thousands) 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E 2026E 2027E class | 188 | 224 | 253 | 197 | 197 | 256 | 281 | 196 | 227 | 258 | 233 | 210 | 256 | 311 | 175 Class 47 | 180 | 200 | 218 | 2
Slide 9: Strategic Growth Initiatives Report Card 2017-2022
STRATEGIC GROWTH INITIATIVES REPORT CARD 2017-2022 2022 Financial Goals 202208 YTD $6.7B annual revenue $5.2B 5% pretax profit margin 7.3% Grow parts business from $1B to $2B $1.3B Grow service and body shop revenue from $385M to $540M $418M Increase CNG market share to 30% Cummins Clean with Moment
Slide 10: Strategic Growth Initiatives
STRATEGIC GROWTH INITIATIVES + 2027 financial goals pr lit] yy ~ $10B in annual revenue — 6% return on sales * Growth goals and opportunities Grow aftermarket parts and service revenue to $3.5B Increase U.S. Class 8 market share to 7.5% Increase U.S. Class 4-7 market share to 5.5% Maintain RTL retur
Slide 11: Sustainability - ESG
SUSTAINABILITY - ESG * Oversight by Nominating and Governance Committee of the Board * Issued first Corporate Responsibility Report — April 2021 + Environmental — Supporting transition from fossil fuels - Working with OEMs on alternative fuel technologies — Cummins Clean Fuel Technologies joint vent
Slide 12: Rush Truck Centers
RUSH TRUCK CENTERS * Largest commercial vehicle dealer group in North America * 140 locations in 23 states, 15 locations in Canada — Summit acquisition - December 2021, 19 locations — Rush Truck Centres of Canada — 80% ownership May 2022 * Class 3-8 commercial vehicle sales, full range of aftermarke
Slide 13: Rush Truck Centers Network
RUSH TRUCK CENTERS NETWORK ONT KC © Peterbit Dealerships © Intematonal Dealerships © IndependentParts and Senice Locatons © Peterbit Intemational i Ford
Slide 14: Solutions Network
SOLUTIONS NETWORK * Capabilities for all makes and models + Aftermarket parts = Over $300M 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, 2,604 technicians; 30 collision centers — 542
Slide 15: An Unrivaled Portfolio of Aftermarket Capabilities
AN UNRIVALED PORTFOLIO OF AFTERMARKET CAPABILITIES ALL-MAKES PARTS: PARTS CONNECT RAPID PARTS SERVICE ‘CONCIERGE TEAM SERVICE CONNECT CONTACT CENTER RUSHCARE COMPLETE XPRESS SERVICES CONTRACT MAINTENANCE MOBILE SERVICE AND TELEMATICS SUPPORT EMBEDDED TECHNICIANS VEHICLE RECALL AND ‘STATE OF THE ART
Slide 16: Absorption Performance
ABSORPTION PERFORMANCE * Critical metric for dealership efficiency ABSORPTION RATIO* + Measures less cyclical gross profit compared to controllable expenses a * 129.8% overall in 2021 * 136.6% YTD September 2022 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 sip by he overhead expenses
Slide 17: Quality of Earnings 2021
QUALITY OF EARNINGS 2021 Lease, RentaliFinance, Insurance/Other — 9% ™ Lease, Rental/Finance, Insurance/Other 6%
Slide 18: Rush Enterprises Annual Truck Sales
RUSH ENTERPRISES ANNUAL TRUCK SALES Units (Thousands) 50 40 30 20 10 108 13.0 11.4 10.9 2016 146 (ee 10.7 11.1 144 128 113 10.5 2017 2018 2019 2020 2021 Used Light-duty = Medium-duty mass 8 2022E expect Pan ore.
Slide 19: Vehicle Franchises
VEHICLE FRANCHISES Peterbilt, Class 6-8 - 64 locations, 11 states International, Class 5-8 - 61 locations, 13 states, 80% ownership of 15 locations in Canada Ford, Class 3-7 - 9 locations, 7 states Hino, Class 5-7 - 34 locations, 9 states Isuzu, Class 4-5 — 29 locations, 14 states Blue Bird — 25 loc
Slide 20: Class 8 Customers
CLASS 8 CUSTOMERS + Rush Enterprises 2021 U.S. Class 8 market share — 4.9% Strong vocational component Large fleets consolidating Private mid-size fleets remain viable Independent owner-operator now variable component of truckload carrier Large Fleets 30-35% Mid-Size Fleets FedEx. Walmart >: UNEL fe
Slide 21: Class 4-7 Customers
CLASS 4-7 CUSTOMERS * Rush Enterprises 2021 U.S. Class 4-7 market share - 4.2% * Vocational and specialty markets Ready-to-Roll® ene National fleet accounts bs + Market tied closely to general economy 0, amazon Saret FedEx. <2 co 4.2% maz BH Yoon RedBull Aten SEER Trucreen” ERRDAN — Southweste expec
Slide 22: Rush Truck Leasing
RUSH TRUCK LEASING + Full-service leasing and rental LEASING AND RENTAL REVENUE * Lease trucks captive source for $350 $323 parts and service revenue $300 + PacLease and Idealease franchises : 5 238 8248 gy4g S247 + 53 locations including 6 captive shops $217 * 10,343 units in truck fleet, including
Slide 23: Historical Results
HISTORICAL RESULTS 5 9 Months 9 Months 2018 2020 a Ended 9/30/2021 | Ended 9/30/2022 BIT (1 1 $ $314 $ $262 ; 24 $i72 52931 § $2 5 7 $29 $ Aj $2 expect more.
Slide 24: Adjusted Return on Invested Capital
ADJUSTED RETURN ON INVESTED CAPITAL Total debt GAAP) Adjustments: Debt related to lease and rental feet Floorplan notes payable ‘Adjusted total deb (non-GAAP) Cash and cash equivalents, Adjusted net (cash) debt Shareholders‘ equity ‘Adjusted invested capital” Adjusted return on invested captal(1)° (
Slide 25: Free Cash Flow
FREE CASH FLOW $in Thousands 2019 2024 9/30/2021 9730/2022 Ac (6136.20 7117) $220,102 (ste ($180,212 $137, $43,123 $13.547 $135 $10,319 $20,748 mre.
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 Return on Invested Capital,
Slide 28: Appendix Reconciliation: Adjusted Net Income and EPS
APPENDIX RECONCILIATION Adjusted Net Income and EPS per share amounts come" (1) $141,583, 887 $241,415 $172,776 $28! fed utstanding EPS 242 7, S (2) 251 2.04 S417 $299 $611 S" (2 251 2. $2 $ expect more.
Slide 29: Appendix Reconciliation
APPENDIX RECONCILIATION $ in Thousand: Net Income ‘Adjusted Net Income” Provision for income Taxes interest expense Depreciation and amorizaton (Gain) Loss on sales of assets EBITDA" ‘Agjusiments: Interest expense associated wih foor plan notes payable ‘Adjusted EBITDA® Depreciation and amortzaton A
Rush Enterprises Inc \tx\ — Investor Presentation (November 2022) on 6ix