Rush Enterprises, Inc. · NASDAQ:RUSHA
Rush Enterprises — Rush Enterprises Inc \tx\ — Investor Presentation (October 2014)
28 slides from Rush Enterprises's investor presentation, Oct 31, 2014
Slide 1: Rush Enterprises – October 31, 2014
lw SN ENTERPRISES October 31, 2014 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 result
Slide 3: Company Overview
Company Overview « Full service solutions provider to commercial vehicle industry * 6,200 dedicated employees * $3.4 billion in revenues in 2013 * 26,336 trucks sold in 2013 + 5.5-6.5% U.S. Class 4-8 market share * $40 million share repurchase authorization ¢ Aand B common shares due to control requ
Slide 4: Commercial Vehicle Market
Commercial Vehicle Market « Fleet age will continue to drive strong aftermarket sales « Automotive strong, housing recovery underway Vocational markets drive need for aftermarket solutions (upfitting, mobile service, modifications) « Alternate fuel vehicles growing opportunity -— up to 10% of market
Slide 5: US Truck Retail Sales
US Truck Retail Sales Units (00's) 360 300 250 200 150 ae 100 ACT Research 50 | as 2009 «2010 «2011 «2012, 2013 2014E
Slide 6: Rush Truck Centers
Rush Truck Centers « Largest commercial vehicle dealer group in North America * 107 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 2 million sq. ft.
Slide 7: Peterbilt Division
Peterbilt Division \ & x \ e e &e ° ° e ° e f e e e aa « “he B4 i ° 6 2 @ wat ° o & é
Slide 8: Navistar Division
Navistar Division ¢ ny ° oe 2 1 3. Be \e* © SP lee 3 © % e.- ° 6%, . ° ° yt {
Slide 9: Rush Truck Centers Network
Rush Truck Centers Network 2 oo ° e e a > # a ° y oe oe = e ae ° e ° e 6°83 ° ° ° ri =a : : " . ° i . 4 ‘ > ° l, 4 of 00. tin c ad &
Slide 10: Solutions Network
Solutions Network ¢ 107 locations support all Rush businesses * Capabilities for all makes and models ¢ Aftermarket Parts - $190 million parts inventory — Proprietary Rig Tough truck parts — RushCare Rapid Parts call centers ¢ Service and Body Shop — 1,897 service bays; 2,199 technicians; 27 collisi
Slide 11: Natural Gas Sales and Service
Natural Gas Sales and Service « Expected 8-10% of industry by 2017 « Rush sales — 3,380 units since 2005 (645 YTD) * Sales support — Green consultant — Sales specialist « Parts and service support — Natural Gas Operations Manager - 10 dedicated CNG locations, 9 underway — All new facility constructi
Slide 12: Momentum Fuel Technologies
Momentum Fuel Technologies « Complete natural gas fuel system solution « Momentum Fuel Technologies — Design, manufacturing and installation — Sales and distribution — Warranty and service support ¢ Partnership with 3M — Advanced proprietary materials and tank technology — Lean manufacturing experti
Slide 13: Absorption Performance
Absorption Performance ¢ Critical metric for dealership efficiency ABSORPTION RATIO" « Measures less cyclical gross profit 120 compared to controllable expenses 114 US 114 ¢ Maintained above 95% in down cycle - expense management « Entered up cycle at 106%; 92% in 2003 * Q3 record 120.2% 105 105 100
Slide 14: Quality of Earnings
Quality of Earnings ‘00 4 y A 80 20.1% 27.3% 36.9% 60 40 71.0% 64.4% 52.5% 20 Peak 0 2006 2013 Parts and Service Truck Sales Leasing and Rental Class 8 Units 290,000 188,000
Slide 15: Rush Annual Truck Sales
Rush Annual Truck Sales 9,052 10,000 7°” ? 8,416 an ff 6% 4 4746 | 7,126 42% 970 ee | 28% 5 643 2,934 |, mnt | 8,000 923% 4,000 —ineas 4.649 6,405 : 30% 9 975 461 ; 4,744 y oI ; 2009 2010 2011 2012 2013 20146 Used @ Light - Duty Medium — Duty 1Class 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 - 47 locations, 10 states — 49 locations, 10 states — 30 locations, 10 states — 28 locations, 8 states - 6 locations, 6 states - 5 locations, 3 stat
Slide 17: Rush Class Customers
Rush Class 8 Customers Rush US Class 8 ED market share - 6.0% to 7.5% " Strong vocational component oage PRIVE wu. osHROSH ‘ « Large fleets consolidating « Private mid-size fleets remain viable « Independent owner-operator Ueda. now variable component of = truckload carrier averrrroenss ©=— «Pilot U
Slide 18: Rush Class 4-7 Customers
Rush Class 4-7 Customers Rush US Class 4-7 market share - 4.5% - 5.5% ¢ Vocational and specialty markets « Ready to roll inventory + National fleets account « Market tied closely to the general economy bright house pee ae MSpresuild PICK-UP/ DELIVERY RENTAL LEASING } 10%
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 * 66 locations including 10 captive shops * 6,624 truck fleet, 1,170 units $ Millions under contract maintenance $185 $175 * Growing 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 — Grow to $5 billion in revenue with 20% average ROIC * Objectives — Expand network — Extend breadth o
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 Revenue $1,2005 $14979 $25806 $30906 $33847 $24595 $3,3822 Gross Profit $2156 $2849 += $4233«s« $5008 «= $8720 «= $4218 ~=—«$5580 Gross Profit Margin 180% 190% 16.4% 16.2% 16.9% 17.1% 165% Adjusted EBIT (1)* $130 $426 $930 $1056 $95.4 $70.1 9924 Means a 11% 28% 3.6% 3.4% 28% 28% 2
Slide 23: Adjusted Return on Invested Capital
Adjusted Return on Invested Capital $ in thousa 2009 2010 2011 2012 2013 9/30/13 9/30/14 Total debt $433,202 $532,144 $804,534 $984,157 $1,424,807 «$1,081,168 $1,318,089 Adjustments Debt related to lease and rental fleet ($149,615) ($181,022) ($233,624) ($322,913) ($413,068) ($374,675) ($490,525) Fl
Slide 24: Free Cash Flow
Free Cash Flow $ in thousands Net cash provided by (used in) operations Acquisition of property/equipment Free cash flow Adjustments: Draws (payments) on floor plan financing, net Proceeds from lease/rental debt Principal payments on leaselrental debt Debt proceeds related to acquisitions Non-mainte
Slide 25: Rush Enterprises – October 31, 2014
lw SN ENTERPRISES October 31, 2014 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 EBITDA and EBIT
Appendix Reconciliation Adjusted EBITDA and EBIT 9 months ended $inthousands 2009 2010 2011 2012 2013 9/30/13 9/30/14 Adjusted Net Income* $6,925 $24,567 $55,213 $62,455 $55,791 $40,932 $55,330 Provision f Income Taxes (82,003) $11,737 $34,964 $38,728 $36,047 $26,343 $35,003 Interest expense $5,695
Slide 28: Appendix Reconciliation Adjusted Net Income and EPS
App endix Reconciliation Adjusted Net Income and EPS 9 months ended HEE Ss Seg e 2009 2010 2011 2012 2013 9/30/13 9730/14 share amounts Net Income $5,884 $31,282 $55,213 $62,455 $49,217 $34,358 $55,330 Adjustments Income from Discontinued (6789) (66.715) Operations GMC franchise termination, net of
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