Rush Enterprises, Inc. · NASDAQ:RUSHA
Rush Enterprises — Rush Enterprises Inc \tx\ — Investor Presentation (May 2019)
27 slides from Rush Enterprises's investor presentation, May 14, 2019
Slide 1: Rush Enterprises - May 2019
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 + 7,385 dedicated employees * $5.5 billion in revenue in 2018 ¢ 37,797 trucks sold in 2018 * 5.7% U.S. Class 8 market share in 2018 * 5.0% U.S. Class 4-7 market share in 2018 + Dual class structure + First ever cash di
Slide 4: Company at a Glance
Company at a Glance Rush Truck Centers Rush Bus Centers Rush Refuse Systems Rush. Crane Systenis 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 and Equipment Chrom
Slide 5: Commercial Vehicle Market
Commercial Vehicle Market * Healthy economy positively impacting truck sales and aftermarket services — Continued strength in vocational markets — Extended delivery time for new truck orders Decreased freight rates, increased used truck supply could put pressure on used truck values * U.S. Class 8 t
Slide 6: US Retail Truck Sales
US Retail Truck Sales @ Class 8 Class 4-7 eS Ss S S S@ £ cs = 100 50 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019E Class8| 97 | 110 | 174 | 199 | 188 | 224 | 253 | 197 | 197 | 256 264 Class 4-7| 111 | 118 | 146 | 164 | 180 | 200 | 218 | 226 | 242 | 258 262 Source: ACT Research
Slide 7: Strategic Growth Initiatives
Strategic Growth Initiatives + 2022 financial goals — $7.0 billion in annual revenue — 5% pretax profit margin t ¢ Growth goals and opportunities | fad — Grow parts revenue to $2 billion — Grow service and body shop revenue to $600 million ~ Increase Momentum Fuel Technologies market share to 30% ~
Slide 8: Rush Truck Centers
Y Rush Truck Centers + Largest commercial vehicle dealer group in North America * 120+ locations in 22 states * 50% ownership of Rush Truck Centres of Canada, 14 International locations in Ontario * Class 3-8 truck sales, full range of aftermarket solutions * Broad market segment coverage + Largest
Slide 9: Parts and Service Locations
Parts and Service Locations International Dealerships Peterbilt Dealerships ~~ Rush Truck Centres Canada
Slide 10: Solutions Network
Solutions Network * Capabilities for all makes and models * Aftermarket parts —$268 million parts inventory —Proprietary Rig Tough truck parts —RushCare Rapid Parts call centers * Service and body shop —2,349 service bays; 2,610 technicians; 26 collision centers — Complete range of maintenance solut
Slide 11: Technology Innovation
Technology Innovation * RushCare Parts Connect * RushCare Service Connect * RushCare Telematics Solutions * RushCare call center and customer support team
Slide 12: Natural Gas
y dj Natural Gas Sales and Service + Natural gas-powered vehicles remain long-term growth opportunity ¢ More than 6,928 units sold since 2005 * Sales specialists and grant consultant + Parts and service support — Natural gas operations manager — 27 dedicated CNG locations — Natural gas service inclu
Slide 13: 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 %US Class 8 Sales Units (000) 2012 2013 2014 2015 2
Slide 14: Absorption Performance
Absorption Performance * Critical metric for dealership efficiency ABSORPTION RATIO* « Measures less cyclical gross profit compared to controllable expenses 499 « Above 95% in recession due to efficient expense management « Entered up cycle at 106% * 122% overall in 2018 424 122 80 — 9 10 11 12 13 1
Slide 15: Quality of Earnings
Quality of Earnings 2006 2009 2018 Class 8 Units 290,000 97,000 255,000 2018GPMargin Truck Sales 7.8% | Parts/Service 37.1% | Rental and Leasing 17.2% a Parts and Service c Truck Sales © Leasing & Rental m= Other
Slide 16: Rush Annual Truck Sales
Rush Annual Truck Sales 44,000 40,000 36,000 32,000 28,000 24,000 20,000 2014 Used 2015 Light-duty 2016 2017 Medium-duly m Class 8 2018
Slide 17: Commercial Vehicle Franchises
Commercial Vehicle Franchises Peterbilt, Class 6-8 — 59 locations, 11 states International, Class 5-8 — 45 locations, 9 states and 50% ownership of 14 locations in Canada Ford, Class 3-7 — 9 locations, 7 states Hino, Class 5-7 — 32 locations, 9 states Isuzu, Class 4-5 — 26 locations, 9 states Mitsub
Slide 18: Rush Enterprises Class 8 Customers
J y Rush Enterprises 4 Class 8 Customers ¢ Rush Enterprises 2018 US Class 8 market share - 5.7% ¢ Strong vocational component « Large fleets consolidating * Private mid-size fleets remain viable « Independent owner-operator now variable component of truckload carrier VOCATIONAL 40-45% OWNER 10-15%
Slide 19: Rush Enterprises Class 4-7 Customers
J y 7 Rush Enterprises 7 Class 4-7 Customers CONSTRUCTIONA —LANDSCAPING * Rush Enterprises 2018 US Class 4-7 market share - 5.0% ¢ Vocational and specialty markets + Ready-to-roll inventory + National fleet accounts oy + Market tied closely to the MUNICIPAL Som general economy (tts) Pops
Slide 20: Rush Truck Leasing
Rush Truck Leasing ¢ Full service leasing and rental « Lease trucks captive source for parts and service revenue $251 « PacLease and Idealease franchises + 45 locations including 4 captive shops * 8,135 units in truck fleet; 1,197 units under contract maintenance * Growing need by customers 2018 © 2
Slide 21: Historical Results
Historical Results $ in millions, except , Three Months Three Months per share amounts hie anit autF Ended 3/31/2018 | Ended 3 Revenue $4,9797 $4,214.6 $4,713.9 $1,240.8 $1,348.3 Gross profit $784.9 $718.0 $829.9 $227.0 $256.9 Gross profit margin 15.8% 17.0% 176% 18.3% 19.1% Adjusted EBIT (1)* $108.
Slide 22: Adjusted Return on Invested Capital
Adjusted Return on Invested Capital $ in thousands Total debt 2015 $1,586,278 2016 $1,335,441 2017 $1,473,230 3/31/2018 $1,481,023 3/31/2019 $1,905,410 Adjustments Debt related to lease and rental fleet ($603,894) ($579,819) ($598,512) ($583,906) ($597,182) Floor plan notes payable ($854,758) ($646,
Slide 23: Free Cash Flow
Free Cash Flow $ in thousands Net cash provided by (used in) operations 2015 $227,250 2016 $521,170 2017 $152,737 Twelve Months Ended 3/31/2018 $232,876 Twelve Months Ended 3/31/2019 $58,445 Acquisition of property/equipment ($367,790) ($196,965) ($209,917) ($218,923) ($253,616) Free cash flow* ($14
Slide 24: Slide 24
Slide 25: Appendix
Appendix This presentation contains certain Non-GAAP financial measures as defined under SEC rules, 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 26: Adjusted Net Income
Adjusted Net income Appendix Reconciliation sve In thousands, except 2015 2016 Three Months | Three Months per share amounts 0 Ended 3/31/2019 Net Income | $66,053 $40,582 $172,129 $21,039 $37,104 Adjustments Restructurin charges, Ae a $5,425 ERP platform write-off, net of tax Aircraft impairment ch
Slide 27: Adjusted EBITDA
Adjusted EBITDA Appendix Reconciliation — :xcésr 9 Three Months Three Months $in thousands 2015 2016 2017 PU tere telat Arena Net Income $66,053 $40,582 $172,129 $21,039 $37,104 Adjusted Net Income* $66,053, $46,007 $89,267 $28,740 $37,104 Provision for Income Taxes $41,750 $29,372 $47,132 $7,044 $1
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