Rush Enterprises, Inc. · NASDAQ:RUSHA
Rush Enterprises — Rush Enterprises Inc \tx\ — Investor Presentation (June 2017)
26 slides from Rush Enterprises's investor presentation, Jun 13, 2017
Slide 1: Rush Enterprises
aN ENTERPRISES June 12, 2017
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 * 6,300 dedicated employees * $4.2 billion in revenue in 2016 * 30,635 trucks sold in 2016 ° 4,.9-5.5% U.S. Class 4-8 market share in 2016 «Aand B common shares due to voting control requirements included in Peterbilt
Slide 4: Commercial Vehicle Market
Commercial Vehicle Market + Market supply and demand factors negatively impacting used Class 8 truck values * Continued softness in energy sector and related geographic regions * Overcapacity from near record 2015 Class 8 truck sales * Erratic freight environment * Automotive strong; housing and roa
Slide 5: US Retail Truck Sales
US Retail Truck Sales 350 Class 8 @ Class 4-7 300 Units ($000s) nN Ss 150 —@., "+, 100 D oro 50 2007 = 2008) 2009S 2010 2011 2012) 2013) 2014) 2015 = 2016 = 2017E reg 157 | 139 | 97 | 110 | 174 | 199 224 | 253 | 197 | 168 expect more.
Slide 6: Rush Truck Centers
Rush Truck Centers * Largest commercial vehicle dealer group in North America ¢ More than 100 locations in 21 states * Class 3-8 truck sales, full range of aftermarket solutions ¢ Broad market segment coverage * Largest dealer group for Peterbilt, Navistar, Hino, Isuzu, hope to grow with Ford * Leas
Slide 7: Rush Truck Centers Network
Rush Truck Centers Network
Slide 8: Solutions Network
Solutions Network * 100+ locations support all Rush businesses * Capabilities for all makes and models + Aftermarket parts — More than $190 million parts inventory — Proprietary Rig Tough truck parts — RushCare Rapid Parts call centers * Service and body shop — 2,369 service bays; 2,162 technicians;
Slide 9: Natural Gas Sales and Service
Natural Gas Sales and Service + Natural gas-powered vehicles remain long-term growth opportunity ¢ Rush sales — more than 5,000 units since 2005 * Sales support — Green consultant — Sales specialists + Parts and service support — Natural gas operations manager - 27 dedicated CNG locations — Natural
Slide 10: Momentum Fuel Technologies
Momentum Fuel Technologies * Production began in 2015 * Innovative design and manufacturing § + Advanced safety features « Installation expertise + Nationwide service network * Multiple configurations serving over-the-road, refuse, construction, beverage, bulk haul and transit U.S. CLASS8 NATURALGAS
Slide 11: Absorption Performance
Absorption Performance * Critical metric for dealership efficiency ABSORPTION RATIO* . 120 ¢ Measures less cyclical gross profit compared to controllable expenses * Above 95% in recession due to efficient expense management 400 + Entered up cycle at 106% © 112% overall in 2016 80 5 6 7 8 9 10 11 12
Slide 12: Quality of Earnings
Quality of Earnings 2009 Class 8 Units 97,000 2016GP Margin Truck Sales 6.7% | Parts/Service 36.1% | Rental and Leasing 12.5% Parts and Service m Truck Sales m Leasing & Rental m Other
Slide 13: Rush Annual Truck Sales
Rush Annual Truck Sales 40,000 36,000 32,000 28,000 24,000 20,000 16,000 12,000 8,000 4,000 2012 2013 2014 2015 2016 2017E Used @ Light-duty = Medium—duty Class 8 expect more.
Slide 14: Commercial Vehicle Franchises
Commercial Vehicle Franchises Peterbilt, Class 6-8 — 54 locations, 11 states International, Class 5-8 - 45 locations, 9 states Ford, Class 3-7 — 7 locations, 7 states Hino, Class 5-7 — 30 locations, 9 states Isuzu, Class 4-5 — 24 locations, 9 states Mitsubishi Fuso, Class 4-5 — 5 locations, 3 states
Slide 15: Rush Class Customers
Rush Class 8 Customers Rush 2016 US Class 8 market share - 5.5% en * Strong vocational component ple + Large fleets consolidating * Private mid-size fleets remain viable * Independent owner-operator now variable component of truckload carrier / MID-SIZE FLEETS 15-20% Gestation we, —osikhsn Pio Sfeem
Slide 16: Rush Class 4-7 Customers
Rush Class 4-7 Customers Rush 2016 US Class 4-7 market share - 4.9% + Vocational and specialty markets rad + Ready-to-roll inventory + National fleet accounts TMA + Market tied closely to the generaleconomy \ TOWING! RECOVERY = 10% CANTEEN LN * Red Bull’ sonmons Nestic 238 setilim
Slide 17: 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 5 captive shops ¢ 7,842 units in truck fleet; 1,183 units under contract maintenance * Growing need by customers for outsource
Slide 18: Strategic Growth Initiatives
Strategic Growth Initiatives + Financial goals — $7 billion in annual revenue - 4% pretax profit margin * Growth goals and opportunities — Grow our parts business from $1 billion to $2 billion — Expand vehicle technology and customer service solutions — Increase CNG fuel systems market share to 25%
Slide 19: 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 Insurance Services Rig Tough Truck Parts Rig Tough Used Trucks Momentum Fuel Technologies Custom Vehicle Solutions Perfection Truck Parts & Equipment [gs C
Slide 20: Historical Results
Historical Results $ in millions, except per shareamounts 2013 2016 3312016 | 3/34/2017 Revenue $3,384.7 94,7274 $4,979.7 $4.2146 $1,0708 Gross Profit $572.0 $756.0 $784.9 $726.4 $183.3 Gross Profit Margin 16.9% 16.0% 15.8% 17.2% 17.1% Adjusted EBIT (1)* $95.4 $133.2 $108.8 $67.1 $98 Adjusted EBIT M
Slide 21: Adjusted Return on Invested Capital
Adjusted Return on Invested Capital $in thousands 2014 2015 2016 3/31/2016 | 3/34/2017 Total debt $1,121,897 $1,487,641 $1,586,278 $1,335,441 $1,551,154 $1,358,657 Adjustments Debtrelatedtolease (5413.66) _($539.426) ($603,894) (8579819) ($599,848) ($568,347) Haccelaeua ($593,649) ($845,977) ($854,7
Slide 22: Free Cash Flow
Free Cash Flow $in thousands 2016 3/31/2016 3/31/2017 Net cash provided by esa oaeeicret $173,488 Acquisition of propertylequipment ($191,584) Free cash flow* ($18,096) ($171,883) ($140,540) ($324,205) $85,414 $275,635 $88,937 ($260,820) $227,250 $521,170 $424,629 $457,929 ($367,790) ($196,965) ($33
Slide 23: Rush Enterprises
aN ENTERPRISES June 12, 2017
Slide 24: Appendix
Appendix This presentation contains certain Non-GAAP financial measures as defined under SEC tules, 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 25: Appendix Reconciliation adjusted net income and EPS
Appendix Reconciliation adusted net income and EPS In thousands, except per share 2 2015 2016 3/34/2016 3/31/2017 amounts Net Income $79,957 i I . $14,479 Adjustments retirement 7 ment accrual, net $2,083 $55,791 $82,040 $66,053 $46,007 f $14,479 40,506 40,894 41,093 40,603 { 40,701 $1.22 $1.96 $1.6
Slide 26: Appendix Reconciliation adjusted EBITDA and EBIT
Appendix Reconciliation adusted E8170 and ESIT $in thousands 2013 2014 2015 2016 | astizo1e | 3131/2017 Net Income $49217 $79957 «$66,053 «$40,582 «$2395 $14,479 Adjusted Net Income* 965791 $82040 $66,083 «$46,007 —=«$7.298 +S 14,479 Aes $36,047 $50,586 «$41,750 «$29,372 «$1847 «7ST Interest expense
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