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Truck dealership Rush Enterprises Inc. reported net income more than doubled in the first quarter as revenue rose 27% compared with a year earlier. Both were first-quarter records.
Net income for the period ended March 31 soared to $92.5 million, or $1.60 per diluted share, compared with net income of $45.3 million, 79 cents, a year earlier.
Revenue reached $1.5 billion compared with $1.2 billion in the 2021period.
“Our results were primarily driven by the continued strong economy and healthy consumer spending for much of the quarter,” Chairman and CEO W.M. “Rusty” Rush said in a release.
“Currently, the economy remains healthy and there continues to be pent-up demand for new commercial vehicles and aftermarket services caused by supply constraints over the last year,” he said. “These factors should positively impact commercial vehicle and aftermarket sales throughout the remainder of 2022.”
On Jan. 3, Cummins Inc. and the company closed on Cummins’ acquisition of a 50% equity interest in Momentum Fuel Technologies that resulted in a $12.5 million gain. Rush also acquired 19 dealership locations from The Summit Truck Group in fourth quarter of 2021, which helped boost Rush’s Q1 results — as did its aftermarket segment.
On the other hand. Rush noted elevated fuel prices are beginning to negatively impact spot market rates and he believes inflation and rising interest rates may begin to cut into consumer spending and capital expenditures across a variety of industries Rush supports.
Aftermarket products and services accounted for 61% of the company’s total gross profit in the first quarter of 2022, with parts, service and collision center revenues reaching $543.3 million, up 30.7% compared with the first quarter of 2021, the San Antonio-based company noted. The company achieved a quarterly absorption ratio of 136.3% in the first quarter of 2022, compared to 122.6% in the first quarter of 2021.
The company said there was healthy parts and service activity particularly in its refuse, large national fleets and some energy customers.
Rush expanded its Xpress services, mobile service and contract maintenance offerings, “all of which helped our aftermarket revenues grow,” he added.
In the first quarter, the company expanded its network with Rush Truck Centers–Miami Northwest, which offers parts and used truck sales. “This new location strengthens our presence in a major trucking market and enables us to enhance the support we provide to customers in Florida,” he said.
The company noted it expects to close in early May on a deal to acquire an additional 30% of Rush Truck Centres of Canada Limited, the largest International Truck dealer in Canada, bringing the company’s total ownership of Rush Truck Centres of Canada Limited to 80%.
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“We have been integrating Rush Truck Centres of Canada’s 15 dealership locations to our network since 2019, and we are pleased to expand our investment, to further support cross-border transportation customers,” said Rush.
In the quarter, the company delivered 3,528 new heavy-duty trucks, 2,141 new medium-duty commercial vehicles, 481 new light-duty commercial vehicles and 2,395 used commercial vehicles during the first quarter of 2022, compared with 2,995 new heavy-duty trucks, 2,334 new medium-duty commercial vehicles, 395 new light-duty commercial vehicles and 1,924 used commercial vehicles during the first quarter of 2021.
The company owns and operates Rush Truck Centers, the largest network of commercial vehicle dealerships in North America, with 139 locations in 23 states, including 125 franchised Rush Truck Center locations. These vehicle centers, strategically located in high-traffic areas on or near major highways throughout the United States, represent truck and bus manufacturers, including Peterbilt, International, Hino, Isuzu, Ford, IC Bus and Blue Bird.