Rush Enterprises, Inc. · NASDAQ:RUSHA
Rush Enterprises — Rush Enterprises Inc \tx\ — Investor Presentation (September 2013)
40 slides from Rush Enterprises's investor presentation, Sep 10, 2013
Slide 1: Rush Enterprises - Expect More
aN ENTERPRISES 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: Full service solutions provider to commercial equipment industry
ve AY Full service solutions provider to commercial equipment industry Over 100 state-of-the-art facilities and offices in growth markets across the U.S. 4,728 dedicated employees $3.1 billion in revenues in 2012 23,171 trucks sold in 2012 $40 million share repurchase authorization
Slide 4: Company at a Glance
Company at a Glance Rush Truck Centers, Rush Refuse Rush Truck Financing h Truck Leasing, Chrome Country World Wide Tires
Slide 5: Rush Means More
Rush Means More Culture and Values Customer Solutions Premium and Quality. Network Reach
Slide 6: Premier service solutions provider to the commercial vehicle industry
a 1 em 1 a ust A Paich T11cl entere ANAUSLL LLULN WLLILOELTS = Premier service solutions provider to the commercial vehicle industry = Largest commercial vehicle dealer group in North America = 85 locations in 17 states = Broad market segment coverage = Peterbilt and Navistar divisions = Medium-duty
Slide 7: Rush Truck Centers Network
Rush Truck Centers Network +4 f fe i F ° wi* 4 g 7 H 3 jen 8 A. ° oe? 385 ; * y= : sy e e aN 4 * ° pf Fe ee, Ma ry x, é e “ ote S| 0s \ ae a s\e f °° > . ° i mace gee. PMG Ri
Slide 8: GP Margin by Revenue Type
GP MARGIN BY REVENUE TYPE = Truck Sales - 6.5 to 7.5% = Parts and Service - 37.39 to 40% = Rental and Leasing - 14 to 16% = Finance and Insurance — 100% = Other Income - 100% GP CONTRIBUTION BY PROFIT CENTER = Truck Sales - 20 to 30% = Parts and Service - 60 to 70% = Leasing and Rental - 3 to 5% «Fi
Slide 9: Aftermarket parts and service capabilities
* 85 locations support all divisions = Capabilities for all makes and models at all locations AFTERMARKET PARTS = $130+ million parts inventory = Only authorized Peterbilt and Intemational parts dealer in territories = Proprietary Rig Tough truck parts SERVICE AND BODY SHOP = 1,550 service bays; 1,7
Slide 10: Aftermarket revenue ($ Millions)
$ Millions $1,000 $900 $817 $800 $675 $700 $600 $489 ung S460 $458 $500 A j $395 $400 $300 $200 $100 | = 8 $0 2006 =©2007- «= 2008 )3S 2009S 2010 2011S 2012) 2013E
Slide 11: Absorption Performance
Absorption Performance ABSORPTION RATIO" = Critical metric for dealership efficiency = Measures less cyclical gross profit compared to controllable expenses = Maintained above 95% in down cycle — expense management = Entered up cycle at 106%; 92% in 2003 80 ~ = Record 116% in 2012 Yer 3 4 5 6 7 8 9
Slide 12: Upfit and specialty facilities
Fal DENTON = Established October, 2011 = New vehicle pre-delivery inspections = Truck modifications = LNG/CNG fuel system installations = Body, chassis upfit and component installation HOUSTON = Project engineering * Certified engineers on staff * Custom work capability = Body, chassis upfit and com
Slide 13: Brands and locations by franchise
Peterbilt, Class 6-8 Hino, Class 4-7 Isuzu, Class 4-7 Intemational, Class 4-8 Mitsubishi Fuso Ford, Class 3-7 Autocar Kalmar IC Bus Blue Bird Elkhart Collins Jerr-Dan PacLease Idealease — 47 locations, 10 states — 22 locations, 8 states — 21 locations, 9 states — 29 locations, 7 states - 4 locations
Slide 14: Largest Peterbilt dealer group
= Largest Peterbilt dealer group = Peterbilt market share Class 8 - 11.5% - 13.7% Class 6/7 - 2.5% - 3.5% = Rush exceeds Peterbilt market share in its AORs = Rush accounts for 30+% of Peterbilt US retail sales = Established management team = Established customer relationships = Core business/springb
Slide 15: Navistar International division formed 2010
New division formed 2010 Largest Intemational dealer group Navistar market share * Class 8 - 15.0% - 25.0% + Class 6/7 - 35.0% - 40.0% High potential for parts and service growth Strong growth potential through acquisitions
Slide 16: Largest Hino dealer group
Largest Hino dealer group Largest International dealer group Largest Isuzu dealer group Largest Peterbilt dealer group Growing with Ford Sales, parts and service integrated into Class 8 dealerships Dedicated sales staff and support Breadth of product offerings provides customer solutions
Slide 17: Refuse, crane, towing and bus systems
REFUSE SYSTENS |) Bus CENTERS | t ~ 4 Rush Refuse Systems + Peterbilt, McNeilus Rush Crane Systems + Peterbilt, National, Manitex Rush Towing Systems + Jerr-Dan wreckers, carriers + Texas, New Mexico, Oklahoma, California, Tennessee Rush Bus Centers + IC Busin Utah, Idaho, Ohio, Georgia + Blue Bird
Slide 18: Alternate fuel and green solutions
Treen IN)? = Alternate fuel vehicle specialists — Natural Gas, Hybrid, HLA, Propane = LNG/CNG/Propane Fuel System installations = Dedicated green service dealerships, certified natural gas/hybrid technicians = Parts and retrofits — anti-idle, emissions reduction, fuel savings = DPF cleaning and retr
Slide 19: Rush Class 8 Customers
Rush Class 8 Customers RUSH U.S. CLASS 8 MARKET SHARE - 5.0% - 5.5% VOCATIONAL ~ 45-50% = Strong vocational component = Large fleets consolidating = Private mid-size fleets remain viable = Independent Owner-Operator now variable component of truckload carrier
Slide 20: Rush Class 4-7 Customers
Rush Class 4-7 Customets RUSH MEDIUM-DUTY MARKET SHARE - 4.1% - 4.6% = Vocational and specialty markets = Ready to roll inventory = National fleet accounts = Market tied closely to the general economy brighthouse (©) veRRDan MASCO PSproauild wo ~ GA CANTEEN
Slide 21: Used truck sales by class
2007 2008 2009 2010 2011 2012 2013E Used Light Duty Medium Duty BClass 8
Slide 22: Leasing and rental revenue
ee ee Mil LEASING AND RENTAL REVENUE $ Millions $125 $100 2007 2008 2009 2010 2011 2012 2013E o O Full service leasing and rental Lease trucks captive source for parts and service revenue PacLease and Idealease franchises 46 locations; 8 captive shops 4,707 truck fleet 887 units under contract maint
Slide 23: Finance and insurance revenue
be, ES [ TRUCK ISURDIGE! FINANCE AND INSURANCE REVENUE = RUSH TRUCK FINANCING oMllons = Third party financing = PACCAR Financial, Navistar Financial, GE Capital, Wells Fargo $7.6 $7.9 a ATIS TRUCK INSURANCE = Property, casualty insurance = Great American, American General, Hartford = 80% average ren
Slide 24: Market outlook
= Fleet age will continue to drive strong aftermarket sales = Energy sector demand for parts/service continues; signs of improvement in construction = 2013 class 8 retail sales flat; back-end loaded = Vocational markets drive need for aftermarket solutions (upfitting, mobile service, modifications)
Slide 25: Class 8 truck sales
cf Q 'T: | Pe %, ] Plaea.c Sra) ss Class oO LTUCK Oales Units (000s) 290 300 258 250 509 227 199 197 200 174 j 157 150 139 BEERROERE | 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E 2014E Source: ACT Research
Slide 26: Class 4-7 truck sales
faa LL... Units (000s) 300 an 239 197 200 183 4 vil 164. ¢ | Mg #0 1g 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E 2014E Source: ACT Research
Slide 27: General Outlook
GENERAL OUTLOOK = Vehicle population remains relatively same size; mix changes = Continued consolidation — shippers, suppliers, dealers = Customers drive efficiency to dealers = Dealer and customer relationships grow deeper DEALER IS SOLUTIONS PROVIDER = Leasing and vocational support model = Dealer
Slide 28: Goals and Objectives
GOALS Provide comprehensive solutions and premier service to commercial equipment industry Expand scope of commercial equipment product offerings Enhance value of Rush brand Grow to $5 billion in revenue with 20% average ROIC OBJECTIVES Expand network Extend breadth of product and service offerings
Slide 29: Expand the Network - Navistar
Expand the Network - Navistar
Slide 30: Extend Breadth of Products
Extend dela of Products Medium Duty Mixers Fire Buses Towing Refuse Crane Alternate Fuel Rig Tough Outsourced Maintenance Construction Equipment
Slide 31: Construction equipment business with John Deere dealer
13 years as successful, profitable John Deere dealer in Houston Synergy with Rush Truck Centers customers Develop construction equipment business contiguous to Rush Truck Centers
Slide 32: Historical Results
Historical Results $ in millions, except per share amounts 2008 2009 2010 2011 2012 13 Revenue $15712 $1,2005 $1,4979 $2,5806 $3,0906 $1,5465 Adjusted EBITDA (1)* $56.0 $28.9 $58.3 $1130 $130.6 $58.5 % Margin* 3.6% 2.4% 3.9% 4.4% 42% 3.8% Adjusted EBIT (1)* $408 $13.0 $426 $930 $105.6 $44.1 % Margin
Slide 33: Capitalization
Capitalization $ in thousands 2008 2009 11 2012 6-30-2013 Total debt $507,198 $433,202 $532,141 $894,534 $1,036,456 $1,039,602 Adjustments: Debt related to lease and rental fleet (137,167) ($149,615) (181,022) 233,624) ($267,281) $346,373) Floor plan notes payable 282702) ($189,256) 237,810) $520,69
Slide 34: Capital Expenditures
Capital Expenditures $ Millions $225.0 $200.0 $175.0 $150.0 $125.0 $100.0 $75.0 $50.0 $25.0 $0.0 2007 2008 2009 2010 2011 2012 2013E Total $71.9 $80.6 $749 $148.9 $180.7 $2246 $163.0 Nonfinanced ¢ j Lease and Rental Units J Real Estate and Special Projects Maintenance Cap Ex Note: Capital expenditur
Slide 35: Free Cash Flow
Free Cash Flow $inthousands 2008 2008 2010 2014 2012 30-12 43 Net cash provided by (used in) operations $83,059 $150,205 $00,433 81360) 219336 112.530) $323,238 Acquisition of propertylequipment (668,160) ($50,485) ($84,303) 148.543) GI70.951) 168.254) 174,967) Free cash flows $14,809 $09,810 7,870)
Slide 36: Premier solutions provider to the commercial vehicle industry
Premier solutions provider to the commercial vehicle industry Largest commercial vehicle dealer group in North America Experienced and dedicated management Diverse commercial equipment/market segment expertise Proven record of operating results Proven history of acquisition success Well-defined stra
Slide 37: Appendix
Appendix This presentation contains certain Non-GAAP financial measures as defined under SEC rules, such as Absorption Ratio, Adusted EBITDA, Adjusted EBIT, Adjusted Net Income, Adjusted EPS, Adjusted Total Debt, Adjusted Net Debt, Adjusted Invested Capital, Adjusted Return on Invested Capital, Free
Slide 38: Reconciliation - Adjusted EBITDA and EBIT
Appendix Reconciliation — Adjusted EBITDA and EBIT $in thousands § months ended EBT 2008 2009 2010 2011 2012 43 Adjusted Net Income* $25,178 96,925 $24,567 $55,213 $62,455 $29,958 Provision for Income Taxes $13,864 (83,173) $11,737 $34,964 $38,728 $12,280 Interest expense $7,230 $5,695 $5,363 $7,164
Slide 39: Reconciliation - Adjusted Net Income and EPS
Appendix Reconciliation Adjusted Net Income and EPS Dollars and shares in thousands § months ended Adjusted Net Income 2008 2009 2010 2044 2012 43 Net Income $28,865 $5,884 $31,282 $55,213 $62,455 $19,179 Adjustments Income from Discounted Operations ($3,687) (8789) (96,715) GMC franchise terminatio
Slide 40: Rush Enterprises - Expect More
TSN ENTERPRISES expect more.
Rush Enterprises Inc \tx\ — Investor Presentation (September 2013) on 6ix