Rush Enterprises, Inc. · NASDAQ:RUSHA
Rush Enterprises — Rush Enterprises Inc \tx\ — Investor Presentation (October 2018)
26 slides from Rush Enterprises's investor presentation, Oct 25, 2018
Slide 1: Rush Enterprises October 2018
AN ENTERPRISES October 2018
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 * 7,125 dedicated employees * $4.7 billion in revenue in 2017 32,756 trucks sold in 2017 °4.5-6.6% U.S. Class 4-8 market share in 2017 + Dual class structure + First ever cash dividend Q2 2018 + Share repurchase author
Slide 4: Commercial Vehicle Market
Commercial Vehicle Market * General economic confidence positively impacting truck sales and aftermarket services — Freight tonnage showing solid growth, except housing — Continued strength in vocational markets — Over-the-road fleet market growing, record rate increases + Used truck values stabiliz
Slide 5: US Retail Truck Sales
US Retail Truck Sales _ @ Class 8 @ Class 4-7 300 250 Units ($000s) 38 8 50 2008 §=©2009 §=— 2010 2011) 2012 20132014 «9 2015) 2016 )3= 2017 = 2018E ciess 6 EIS to | 174 224 | 253 | 197 | 197 | 254 Class 47 ev [ve en [am | 2a eas | oe | oe |
Slide 6: Rush Truck Centers
Rush Truck Centers + Largest commercial vehicle dealer group in North America * More than 110 locations in 22 states * Class 3-8 truck sales, full range of aftermarket solutions * Broad market segment coverage + Largest dealer group for Peterbilt, Navistar, Hino, Isuzu, growing with Ford + Leasing a
Slide 7: Rush Truck Centers Network
Rush Truck Centers Network
Slide 8: Solutions Network
Solutions Network * Capabilities for all makes and models + Aftermarket parts — More than $244 million parts inventory — Proprietary Rig Tough truck parts — RushCare Rapid Parts call centers * Service and body shop — 2,296 service bays; 2,483 technicians; 29 collision centers — Complete range of mai
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 6,530 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 * 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. CLASS 8 NATURALGAS ADOPTION RATES 9%US Class 8
Slide 11: Absorption Performance
Absorption Performance * Critical metric for dealership efficiency ABSORPTION RATIO* * Measures less cyclical gross profit m= compared to controllable expenses 120 418 P p -—_————ig, 112 * Above 95% in recession due to efficient expense management + Entered up cycle at 106% 100 * 121% overallin 2017
Slide 12: Quality of Earnings
Quality of Earnings Class 8 Units 2017GP Margin Truck Sales 7.6% | Parts/Service 36.5% | Rental and Leasing 15.8% Parts and Service m Truck Sales m Leasing & Rental = Other
Slide 13: Rush Annual Truck Sales
Rush Annual Truck Sales 7,008 7,060 8,000 6,405 2013 2014 2015 2016 2017 2018E Used @ Light-duty Medium-duty Class 8 expect mote.
Slide 14: Commercial Vehicle Franchises
Commercial Vehicle Franchises Peterbilt, Class 6-8 — 56 locations, 11 states International, Class 5-8 - 46 locations, 9 states Cite } Ford, Class 3-7 — 8 locations, 7 states Hino, Class 5-7 — 31 locations, 9 states T Isuzu, Class 4-5 - 25 locations, 9 states 4 RUCKS Mitsubishi Fuso, Class 4-5 — 5 lo
Slide 15: Rush Class 8 Customers
Rush Class 8 Customers Rush 2017 US Class 8 market share — 6.6% * Strong vocational component + Large fleets consolidating + Private mid-size fleets remain viable * Independent owner-operator now variable component of truckload carrier MID-SIZE FLEETS Geelaton Ww) osHabsn Bios LZeemex Schlumberger’
Slide 16: Rush Class 4-7 Customers
Rush Class 4-7 Customers Rush 2017 US Class 4-7 market share — 4.5% ae DELIVERY + Vocational and specialty markets * Ready-to-roll inventory + National fleet accounts + Market tied closely to the general economy TOWING! RECOVERY 10% CANTEEN, mecoy's) 238 RedBull’ senenav Sy “an
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 * 46 locations including 4 captive shops ¢ 8,130 units in truck fleet; 1,155 units under contract maintenance * Growing need by customers for outsource
Slide 18: Strategic Growth Initiatives
Strategic Growth Initiatives * 2022 financial goals — $7.0 billion in annual revenue — 5% pretax profit margin * Growth goals and opportunities — Grow parts revenue to $2 billion — Grow service and body shop revenue to $600 million — Increase Momentum Fuel Technologies market share to 30% — Increase
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 House of Trucks Momentum Fuel Technologies Custom Vehicle Solutions Perfection Truck Parts & Equipment fess Chrome
Slide 20: Historical Results
Historical Results $ in millions, except per Nine Months Nine Months et ers |e nota 205 | 2016 | 2017 | endea¥suzei7 | Ended soviet share amounts Revenue $4,7274 $4,9797T $4,2146 — $4,7139 Gross Profit $756.0 $784.9 $718.0 $829.9 Gross Profit Margin 16.0% 15.8% 17.0% 17.6% Adjusted EBIT (1)* $133.2
Slide 21: Adjusted Return on Invested Capital
Adjusted Return on Invested Capital $in thousands 2015 2017 | 9/30/2017 9/30/2018 Total debt $1,487,641 $1,586,278 $1,335,441 $1,473,230 $1,380,077 $1,661,650 Adjustments Debtrelatedtolease (539.476) ($603,894) (8579819) _($598.512) (573.978) ($588,079) Hered eo ($845,977) ($854,758) ($646,945) ($77
Slide 22: Free Cash Flow
Free Cash Flow Twelve Months | Twelve Months pubes saat ub |) ey 2017 | Ended 9/30/2017 | Ended 9/30/2018 Netcash providedby $88,937 $227,250 $521,170 $182,737 $304,726 $185,485 Acquisition of propertylequipment ($260,820) ($367,790) ($196,965) ($209,917) ($176,175) ($247,382) Free cash flow* (171,8
Slide 23: Rush Enterprises October 2018
AN ENTERPRISES October 2018
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 aciusted Net income and EPS In thousands, e Nine Month: Nine Month: pilin alee! | 2014 ae 2017 | ended 90/2017 | Ended 9130/2018 Net Income $79,957 $66,053 $40,582 $172,129 $66,262 $92,093 Adjustments eee charges, $5,425 ERP latform write. -off, $15,682 Sugemielae" 2088 Scrau
Slide 26: Appendix Reconciliation Adjusted EBITDA and EBIT
Appendix Reconciliation acjusted espa and e8iT Nine Months Nine Months $in thousands | 2014 | 2015 | 2016 | 2017 | Endeagiso2017 | Ended 9/30/2018 Net Income $79,957 $40,582 $172,129 $66,262 $92,093, Adjusted Net Income* $82,040 $66,053 $46,007 $89,267 $66,262 $107,775 Pecaetaces 950586 $41,750 $293
Rush Enterprises Inc \tx\ — Investor Presentation (October 2018) on 6ix