Rush Enterprises, Inc. · NASDAQ:RUSHA
Rush Enterprises — Rush Enterprises Inc \tx\ — Investor Presentation (April 2016)
28 slides from Rush Enterprises's investor presentation, Apr 26, 2016
Slide 1: April 28, 2016
April 28, 2016 pect more.
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 * 6,400 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 de
Slide 4: Commercial Vehicle Market
Commercial Vehicle Market + Market supply and demand negatively impacting used truck values + Declining sales/service to the energy sector and related geographic regions * Overcapacity due to near record truck sales in 2015 * Choppy freight environment + Automotive strong; commercial and residential
Slide 5: US Retail Truck Sales by Class
US Retail Truck Sales 320 @ Class 8 @ Class 4-7 300 250 200 Units ($000s) 150 100 50 2006 = =2007 «= 2008 )=— 2009S 2010 2011 9 2012, 2013 2014 = 2015 = 2016E regs 200 | 157 | 130 | 97 199 | 188 | 224 218 221
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 - 2,298 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 4,200 units since 2005 * Sales support — Green consultant — Sales specialists « Parts and service support - Natural gas operations manager — 26 dedicated CNG locations — Natural
Slide 12: Momentum Fuel Technologies
Momentum Fuel Technologies + Production began in 2015 + Innovative design and manufacturing capabilities + Advanced safety features + Installation expertise + Nationwide service network * Two configurations with more in development U.S. CLASS 8 NATURAL GAS ADOPTION RATES 60 26US Class 8 Sales. 50 34
Slide 13: Absorption Performance
Absorption Performance * Critical metric for dealership efficiency ABSORPTION RATIO* + Measures less cyclical gross profit compared to controllable expenses * Above 95% in down cycle due to efficient expense management * Entered up cycle at 106 * 116% overall in 2015 80 3.45 6 7 8 9 1011 12 13 1415
Slide 14: Quality of Earnings
Quality of Earnings 100 2009 2015 253,000 2015GP Margin Truck Sales 6.6% | Parts/Service 36.4% | Rental and Leasing 11.5% Parts and Service m Truck Sales wm Other = Leasing and Rental expect more.
Slide 15: Rush Annual Truck Sales
Rush Annual Truck Sales 2011 2012 2013 2014 2015 2016E Used mi Light-duty = Medium-duty Class 8 expect mote.
Slide 16: Commercial Vehicle Franchises
Commercial Vehicle Franchises Peterbilt, Class 6-8 - 51 locations, 11 states International, Class 5-8 — 46 locations, 9 states Ford, Class 3-7 - 6 locations, 6 states Hino, Class 5-7 — 30 locations, 11 states Isuzu, Class 4-5 - 31 locations, 10 states Mitsubishi Fuso, Class 4-5 - 5 locations, 3 stat
Slide 17: Rush Class 8 Customers
Rush Class 8 Customers Rush 2015 US Class 8 market share — 6.7% * Strong vocational component + Large fleets consolidating + Private mid-size fleets remain viable + Independent owner-operator now variable component of truckload carrier cm} Walmart>\: “\ MARTE aaa Geataion PRP wn osHxbsH Bios Lfoemex
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 ea + Ready-to-roll inventory * National fleet accounts MUMIA + Market tied closely to the general economy " brignthouse(©) yerRDaN MASCO PSPROBuild as 6G CANTEEN
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 D * 71 locations including LEASING AND RENTAL REVENUE 10 captive shops a 0 a + 7,889 units in truck fleet; 1,376 sins units under contract maintenance
Slide 20: Strategic Growth Initiatives
Strategic Growth Initiatives * 2020 financial goals - $7 billion in annual revenue - 4% pretax profit margin * Growth goals and opportunities - Increase same store US parts market share from 4% to 6% — Expand vehicle technology and customer service solutions - Increase CNG fuel systems market share
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 9 3 months ended 3 months ended shareamourts "> cede || all cl || ete 3/31/2015 3131/2016 Revenue $3.0906 $3387 $47274 $4.9797 $1,1935 $1,0708 Gross Profit $5008 $5720 $7560 $7849 $1936 $1833 Gross Profit Margin 162% 169% 160% 158% 16.2% 171% ‘Adjusted EBI
Slide 23: Adjusted Return on Invested Capital
Adjusted Return on Invested Capital $ in thousand: 201 Total debt $984,157 Adjustments Debtrelatedtolease —(¢392913) ($413,066) (6539426) ($603894) ($552,223) ($598,619) ieee ($534,520) ($593,649) ($845,977) ($854,758) ($912,600) ($825,987) Adjustedtotaldebt? «$126,724 $116,182 $102,298 $127,625 $85
Slide 24: Free Cash Flow
Free Cash Flow 42 months ended | 12months ended $in thousands 2012 2013 2014 2015 3/31/2015 3/31/2016 Net cash provided by $19,336 $173488 $88937 $227,250 (S547) $424,629 Acquistion nent _@170.951) ($191,584) ($260,820) ($367,790) (8290073) ($339,216) Free cash flow $48,385 ($18,096) ($171,883) ($14
Slide 25: April 28, 2016
April 28, 2016 pect more.
Slide 26: Appendix
Appendix This presentation contains certain Non-GAAP financial measures as defined under SEC tules, 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
Appendix Reconciliation adusted net income and EPS In thousands, except per 2013 2014 2015 | 3monthsended | 3months ended share amounts 3/31/2015, 3/31/2016 Net Income $62,455 $49,217 $79,957 $66,053 $16,781 Adjustments Income from, discontinued operations Restructuring ch: netoftax 99s: charge, net
Slide 28: Appendix Reconciliation adjusted EBITDA and EBIT
Appendix Reconciliation adusted EBTDa and EBIT $in thousands 2013 2014 20 ‘Adjusted NetIncome* 962455 $65,791 $82,040 $16,781 (Bela a 938,728 $36,047 $60,586 $41,750 $10,607 Interest expense $13017 $10,693 $11,198 $13,473 $2941 Pepreciationand $25016 $29.925 $40,786 $43,859 $9,904 $12,647 Pea eal ea
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