RUSH ENTERPRISES INC \TX\
For the period ended Mar 31, 2025. Filed May 9, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 9, 2025
RUSHB$58.61-0.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0001437749-24-033921
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-09.
0001437749-25-015788
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 121 previous paragraphs and 97 current paragraphs.
43 unchanged; 42 reworded; 10 added; 36 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (10)
Current report
With respect to our parts, service, and collision center (collectively referred to herein as “Aftermarket Products and Services”) operations, we expect that the same economic challenges that are negatively impacting new commercial vehicle sales will continue to negatively impact demand for Aftermarket Products and Services. We believe that our Aftermarket Products and Services revenues will be flat to down 2% in 2025, compared to 2024.
Current report
Total revenues decreased $21.2 million, or 1.1%, in the first quarter of 2025, compared to the first quarter of 2024. This decrease was primarily the result of decreased Aftermarket Products and Services revenue due to continued weak demand from over-the-road customers.
Current report
Our Aftermarket Products and Services revenues totaled $619.1 million in the first quarter of 2025, down 4.6% from the first quarter of 2024. The decrease in Aftermarket Parts and Services revenues was related to the continued freight recession, in addition to 2025 having one less working day than 2024, the completion of certain customer service projects and campaigns in 2024 that did not occur in 2025 and a decrease in business related to winter storms in January of 2025.
Current report
Revenues from sales of new and used commercial vehicles increased $7.5 million, or 0.7%, in the first quarter of 2025, compared to the first quarter of 2024. The slight increase in new commercial vehicle revenues was primarily the result of the mix of products sold.
Current report
We sold 1,769 used commercial vehicles in the first quarter of 2025, a 2.7% decrease compared to 1,818 used commercial vehicles in the first quarter of 2024.
Current report
Finance and insurance revenues decreased $0.2 million, or 3.4%, in the first quarter of 2025, compared to the first quarter of 2024. This decrease is primarily due to the mix of purchasers of commercial vehicles. During the first quarter of 2025, most of our sales were to larger fleets, which usually arrange their own financing. We are more likely to provide financing to owner-operators and smaller fleets, which comprised a smaller percentage of commercial vehicle sales during the first quarter of 2025. Finance and insurance revenues have limited direct costs and, therefore, contribute a disproportionate share of our operating profits.
Current report
Gross profit decreased $32.1 million, or 8.2%, in the first quarter of 2025, compared to the first quarter of 2024. This decrease is primarily related to decreased demand for Aftermarket Products and Services due to the continued freight recession, high interest rate and general economic uncertainty related to tariffs and U.S Trade Policy. Gross profit as a percentage of sales decreased to 19.3% in the first quarter of 2025, from 20.8% in the first quarter of 2024.
Current report
Gross margins from truck lease and rental sales increased to 28.2% in the first quarter of 2025, from 27.5% in the first quarter of 2024. This increase is primarily related to the delivery of new lease vehicles, which have lower operating costs. We expect gross margins from lease and rental sales of approximately 27.0% to 29.0% during 2025. Our policy is to depreciate our lease and rental fleet using a straight-line method over each customer’s contractual lease term. The lease unit is depreciated to a residual value that approximates fair value at the expiration of the lease term. This policy results in us realizing reasonable gross margins while the unit is in service and a corresponding gain or loss on sale when the unit is sold at the end of the lease term.
Current report
Net interest expense decreased $5.1 million, or 28.4%, in the first quarter of 2025, compared to the first quarter of 2024. This decrease in interest expense is primarily the result of decreased inventory levels and lower interest rates compared to the first quarter of 2024. We expect net interest expense in 2025 to decrease compared to 2024, but the amount of the decrease will depend on inventory levels, interest rate fluctuations and the amount of cash available to make prepayments on our floor plan arrangements.
Current report
We are also subject to federal and state laws and regulations governing the commercial vehicle engine emissions. The Environmental Protection Agency (“EPA”) and the National Highway Traffic Safety Administration on behalf of the U.S. Department of Transportation, have issued rules associated with reducing greenhouse gas (“GHG”) and Nitrogen Oxide (“NOx”) emissions and improving the fuel efficiency of medium and heavy-duty trucks and buses. One of these rules, referred to herein as the “EPA 2027 Low NOx” rule, will require commercial vehicle engines to emit significantly less NOx than such engines do today, beginning in model year 2027. The EPA 2027 Low NOx rule also would increase the useful life of each vehicle and would require that manufacturers extend the warranty term of each vehicle to ensure that commercial vehicles remain compliant with the EPA’s emission standards as such vehicles age. In March 2024, the EPA issued an additional rule associated with reducing GHG emissions from heavy-duty trucks and buses for model years 2027 through 2032 (the “GHG-3” rule). While the GHG-3 rule claims to be technology neutral, in order to comply with the rule, commercial vehicle engine manufacturers would be required to manufacture an increasing percentage of “zero-emission” vehicles over time, which would likely reduce the number of diesel internal combustion engines (“ICE”) vehicles that could be manufactured over that time period. Similarly, the California Air Resources Board (“CARB”) has adopted rules and regulations that are intended to reduce NOx emissions (the “HD Omnibus” rule), phase out the sale of ICE commercial vehicles over time by requiring a certain percentage of each manufacturer’s commercial vehicles sold within the state to be “zero-emission vehicles” (the “Advanced Clean Trucks” rule) and require fleets to purchase a certain number of “zero-emission vehicles” (the “Advanced Clean Fleet” rule). The EPA granted waivers to CARB with respect to the HD Omnibus and Advanced Clean Truck rules, each of which became effective in January 2024. CARB withdrew its request for a waiver from the EPA with respect to the Advanced Clean Fleet rule in January 2025, and thus, it is unlikely that this rule will become effective in the near future. In addition, the EPA asked Congress to review the previously granted waivers that CARB received with respect to the HD Omnibus and Advanced Clean Truck rules, and the U.S. House of Representatives recently passed resolutions to rescind such waivers pursuant to the Congressional Review Act. The U.S. Senate must now vote on the resolutions. However, if the U.S. Senate votes to approve the resolutions, it is expected that there will be multiple legal challenges regarding Congress’s authority to revoke the waivers. In addition, in March 2025, the EPA announced that it was reconsidering various previously approved engine emissions regulations, including the EPA 2027 Low NOx rule and the GHG-3 rule. With respect to the…
Excerpt shortened here; the source contains the full paragraph.
Removed paragraphs (36)
Previous report
With respect to our parts, service, and collision center (collectively referred to herein as “Aftermarket Products and Services”) operations, revenues were down slightly year-over-year, but were improved compared to our second quarter results. Although the ongoing freight recession continues to negatively affect Aftermarket Products and Services results, we did experience growth in the third quarter with respect to our over-the-road and wholesale customers for the first time since 2023. We are hopeful that declines in Aftermarket Products and Sales revenues are behind us and that we will begin to experience more normal market conditions starting in the first quarter of 2025. We expect that our Aftermarket Products and Services revenues will remain flat to slightly down in 2024, compared to 2023.
Previous report
Total revenues decreased $84.6 million, or 4.3%, in the third quarter of 2024, compared to the third quarter of 2023. This decrease was primarily the result of the ongoing freight recession resulting in continued weak demand for Class 8 trucks.
Previous report
Our Aftermarket Products and Services revenues totaled $633.0 million in the third quarter of 2024, down 1.6% from the third quarter of 2023. The decrease in Aftermarket Parts and Services revenues was primarily a result of weaker demand caused by the ongoing freight recession.
Previous report
Revenues from sales of new and used commercial vehicles decreased $72.5 million, or 5.9%, in the third quarter of 2024, compared to the third quarter of 2023. The decrease in new and used commercial vehicle revenues was primarily a result of weak demand for Class 8 trucks, which was partially offset by strong demand for Class 4 through 7 medium-duty commercial vehicles.
Previous report
We sold 1,829 used commercial vehicles in the third quarter of 2024, a 1.8% increase compared to 1,797 used commercial vehicles in the third quarter of 2023. We experienced a slight increase in used commercial vehicle sales year-over-year primarily due to our ability to successfully execute on our commercial vehicle sales strategies.
Previous report
Finance and insurance revenues decreased $0.5 million, or 8.5%, in the third quarter of 2024, compared to the third quarter of 2023. This decrease is primarily due to the decline in sales of Class 8 trucks and tighter lending requirements from finance companies. Finance and insurance revenues have limited direct costs and, therefore, contribute a disproportionate share of our operating profits.
Previous report
Gross profit decreased $15.4 million, or 3.6%, in the third quarter of 2024, compared to the third quarter of 2023. Gross profit as a percentage of sales increased to 20.0% in the third quarter of 2024, from 19.9% in the third quarter of 2023. This increase in gross profit as a percentage of sales is a result of a change in our product sales mix. Commercial vehicle sales, a lower margin revenue item, decreased as a percentage of total revenues to 61.3% in the third quarter of 2024, from 62.4% in the third quarter of 2023. Aftermarket Products and Services revenues, a higher margin revenue item, increased as a percentage of total revenues to 33.4% in the third quarter of 2024, from 32.5% in the third quarter of 2023.
Previous report
Gross margins from truck lease and rental sales decreased to 28.6% in the third quarter of 2024, from 30.6% in the third quarter of 2023. This decrease was primarily related to lower rental utilization. We expect gross margins from lease and rental sales of approximately 28.0% to 30.0% during 2024.
Previous report
Net interest expense increased $3.5 million, or 24.4%, in the third quarter of 2024, compared to the third quarter of 2023. This increase in interest expense is a result of an increase in our vehicle inventory levels and elevated interest rates on our variable rate debt, compared to the third quarter of 2023. For 2024, we expect net interest expense to increase 34.5% to 37.5% compared to 2023, primarily due to increased borrowings under our credit facilities and the interest related thereto.
Previous report
Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023
Previous report
Unless otherwise stated below, our variance explanations and future expectations with regard to the items discussed in this section are set forth in the discussion of the Three Months Ended September 30, 2024 Compared to Three Months Ended September 30, 2023.
Previous report
Revenues
Previous report
Total revenues decreased $100.4 million, or 1.7%, in the first nine months of 2024, compared to the first nine months of 2023.
Previous report
Aftermarket Products and Services revenues decreased $33.3 million, or 1.7%, in the first nine months of 2024, compared to the first nine months of 2023.
Previous report
Revenues from the sales of new and used commercial vehicles decreased $61.4 million, or 1.7%, in the first nine months of 2024, compared to the first nine months of 2023.
Previous report
We sold 10,895 new Class 8 heavy-duty trucks during the first nine months of 2024, a 13.1% decrease compared to 12,536 new Class 8 heavy-duty trucks in the first nine months of 2023. According to A.C.T. Research, new U.S. Class 8 truck sales decreased 11.6% in the first nine months of 2024, compared to the first nine months of 2023. We sold 331 new Class 8 heavy-duty trucks in the first nine months of 2024 in Canada, a 27.3% decrease compared to 455 new Class 8 heavy-duty trucks in the first nine months of 2023.
Previous report
We sold 10,076 new Class 4 through 7 medium-duty commercial vehicles, including 922 buses, during the first nine months of 2024, a 6.3% increase compared to 9,483 new Class 4 through 7 medium-duty commercial vehicles, including 1,232 buses, in the first nine months of 2023. A.C.T. Research estimates that unit sales of new Class 4 through 7 commercial vehicles, including buses, in the U.S increased 0.2% in the first nine months of 2024, compared to the first nine months of 2023. We sold 325 new Class 5 through 7 medium-duty commercial vehicles in the first nine months of 2024 in Canada, an 18.6% increase compared to 274 new Class 5 through 7 medium-duty commercial vehicles in the first nine months of 2023.
Previous report
We sold 1,567 new light-duty commercial vehicles during the first nine months of 2024, a 4.3% increase compared to 1,381 light-duty commercial vehicles in the first nine months of 2023.
Previous report
We sold 5,370 used commercial vehicles during the first nine months of 2024, a 0.4% increase compared to 5,350 used commercial vehicles in the first nine months of 2023.
Previous report
Truck lease and rental revenues remained flat in the first nine months of 2024, compared to the first nine months of 2023.
Previous report
Finance and insurance revenues decreased $2.0 million, or 10.3%, in the first nine months of 2024, compared to the first nine months of 2023.
Previous report
Gross Profit
Previous report
Gross profit decreased $45.7 million, or 3.8%, in the first nine months of 2024, compared to the first nine months of 2023. Gross profit as a percentage of sales decreased to 20.0% in the first nine months of 2024, from 20.5% in the first nine months of 2023.
Previous report
Gross margins from our Aftermarket Products and Services operations decreased to 36.9% in the first nine months of 2024, from 37.4% in the first nine months of 2023. Gross profit for the Aftermarket Products and Services departments was $705.3 million in the first nine months of 2024, compared to $726.5 million in the first nine months of 2023. Gross profits from parts sales represented 57.9% of total gross profit for Aftermarket Products and Services operations in the first nine months of 2024 and 60.1% in the first nine months of 2023. Service and collision center operations represented 42.1% of total gross profit for Aftermarket Products and Services operations in the first nine months of 2024 and 39.9% in the first nine months of 2023.
Previous report
Gross margins on new Class 8 truck sales decreased to 9.1% in the first nine months of 2024, from 10.0% in the first nine months of 2023.
Previous report
Gross margins on new Class 4 through 7 medium-duty commercial vehicle sales increased to 9.3% in the first nine months of 2024, from 8.9% in the first nine months of 2023.
Previous report
Gross margins on used commercial vehicle sales increased to 19.7% in the first nine months of 2024, from 10.8% in the first nine months of 2023.
Previous report
Gross margins from truck lease and rental sales decreased to 28.2% in the first nine months of 2024, from 30.4% in the first nine months of 2023.
Previous report
Selling, General and Administrative Expenses
Previous report
SG&A expenses decreased $15.9 million, or 2.1%, in the first nine months of 2024, compared to the first nine months of 2023. SG&A expenses equaled 13.0% of total revenue in the first nine months of 2024, compared to 13.1% in the first nine months of 2023.
Previous report
Interest Expense, Net
Previous report
Net interest expense increased $17.7 million, or 47.3%, in the first nine months of 2024, compared to the first nine months of 2023.
Previous report
Income before Income Taxes
Previous report
Income before income taxes decreased $56.1 million, or 15.7%, in the first nine months of 2024, compared to the first nine months of 2023.
Previous report
Provision for Income Taxes
Previous report
Income taxes decreased $15.9 million in the first nine months of 2024, compared to the first nine months of 2023. We provided for taxes at a 23% rate in the first nine months of 2024 and a 24.4% rate in the first nine months of 2023.
Reworded paragraphs (42)
Previous wording
Peterbilt®* is a registered trademark of Peterbilt Motors Company. PACCAR*®* is a registered trademark of PACCAR, Inc. PacLease*®* is a registered trademark of PACCAR Leasing Corporation. Navistar*®* is a registered trademark of Navistar International, Inc. International*®* is a registered trademark of International Motors, LLC (f/k/a Navistar, Inc.). Idealease is a registered trademark of Idealease, Inc. aka Idealease of North America, Inc. Blue Bird*®* is a registered trademark of Blue Bird Investment Corporation. IC Bus*®* is a registered trademark of IC Bus, LLC. Hino*®* is a registered trademark of Hino Motors, Ltd. Isuzu*®* is a registered trademark of Isuzu Motors Limited. Ford*®* is a registered trademark of Ford Motor Company. Dennis Eagle*®* is a registered trademark of Dennis Eagle Limited. Cummins® is a registered trademark of Cummins, Inc. This report contains additional trade names or trademarks of other companies. Our use of such trade names or trademarks should not imply any endorsement or relationship with such companies.*
Current wording
Peterbilt®* is a registered trademark of Peterbilt Motors Company. PACCAR*®* is a registered trademark of PACCAR, Inc. PacLease*®* is a registered trademark of PACCAR Leasing Corporation. International*®* is a registered trademark of International Motors, LLC (f/k/a Navistar, Inc.). Idealease is a registered trademark of Idealease, Inc. aka Idealease of North America, Inc. Blue Bird*®* is a registered trademark of Blue Bird Investment Corporation. IC Bus*®* is a registered trademark of IC Bus, LLC. Hino*®* is a registered trademark of Hino Motors, Ltd. Isuzu*®* is a registered trademark of Isuzu Motors Limited. Ford*®* is a registered trademark of Ford Motor Company. Dennis Eagle*®* is a registered trademark of Dennis Eagle Limited. Cummins® is a registered trademark of Cummins, Inc. Blue Arc*®* is a registered trademark of The Shyft Group Inc. Battle Motors*®* is a registered trademark of Battle Motors, Inc. This report contains additional trade names or trademarks of other companies. Our use of such trade names or trademarks should not imply any endorsement or relationship with such companies.*
Previous wording
We are a full-service, integrated retailer of commercial vehicles and related services. The Truck Segment includes our operation of a network of commercial vehicle dealerships under the name “Rush Truck Centers.” Rush Truck Centers primarily sell commercial vehicles manufactured by Peterbilt, International, Hino, Ford, Isuzu, Dennis Eagle, IC Bus and Blue Bird. Through our strategically located network of Rush Truck Centers, we provide one-stop service for the needs of our commercial vehicle customers, including retail sales of new and used commercial vehicles, aftermarket parts sales, service and repair facilities, financing, leasing and rental, and insurance products.
Current wording
We are a full-service, integrated retailer of commercial vehicles and related services. The Truck Segment includes our operation of a network of commercial vehicle dealerships under the name “Rush Truck Centers.” Rush Truck Centers primarily sell commercial vehicles manufactured by Peterbilt, International, Hino, Ford, Isuzu, IC Bus, Blue Bird, Dennis Eagle, Blue Arc and Battle Motors. Through our strategically located network of Rush Truck Centers, we provide one-stop service for the needs of our commercial vehicle customers, including retail sales of new and used commercial vehicles, aftermarket parts sales, service and repair facilities, financing, leasing and rental, and insurance products.
Previous wording
Our Rush Truck Centers are principally located in high traffic areas throughout the United States and Ontario, Canada. Since commencing operations as a Peterbilt heavy-duty truck dealer in 1966, we have grown to operate 124 franchised Rush Truck Centers in 23 states. In 2019, we purchased a 50% equity interest in an entity in Canada, Rush Truck Centres of Canada Limited (“RTC Canada”) and on May 2, 2022, we purchased an additional 30% equity interest in RTC Canada that increased our equity interest to 80%. RTC Canada currently owns and operates 15 International dealership locations in Ontario. Prior to acquiring the additional 30%, we accounted for the equity interest in RTC Canada using the equity method of accounting. The operating results of RTC Canada are consolidated in the Consolidated Statements of Operations, the Statements of Comprehensive Income, the Consolidated Balance Sheets and commercial vehicle unit sales data since May 2, 2022.
Current wording
Our Rush Truck Centers are principally located in high traffic areas throughout the United States and Ontario, Canada. Since commencing operations as a Peterbilt heavy-duty truck dealer in 1966, we have grown to operate over 125 franchised Rush Truck Centers in 23 states. We own an 80% equity interest in Rush Truck Centres of Canada Limited (“RTC Canada”). RTC Canada currently owns and operates 12 International dealership locations in Ontario. The operating results of RTC Canada are consolidated in the Consolidated Statements of Operations, the Statements of Comprehensive Income, the Consolidated Balance Sheets and commercial vehicle unit sales data.
Previous wording
A.C.T. Research Co., LLC (“A.C.T. Research”), a commercial vehicle industry data and forecasting service provider, currently forecasts new U.S. Class 8 retail truck sales to be 235,000 units in 2024, which would represent a 13.5% decrease compared to 2023. We expect our U.S. market share of new Class 8 truck sales to range between 6.1% and 6.6% in 2024. This market share percentage would result in the sale of approximately 14,500 to 15,500 new Class 8 trucks in 2024. Additionally, we expect to sell approximately 450 new Class 8 trucks in Canada in 2024.
Current wording
A.C.T. Research Co., LLC (“A.C.T. Research”), a commercial vehicle industry data and forecasting service provider, currently forecasts new U.S. Class 8 retail truck sales to be 213,300 units in 2025, which would represent a 13.8% decrease compared to 2024. The challenges that have plagued the industry for some time, including the ongoing freight recession and general economic uncertainty, have been exacerbated by increasing concerns related to U.S. trade policy, tariffs, and uncertainty concerning engine emissions regulations, causing many customers, particularly in the over-the-road segment, to delay vehicle purchases. Consequently, new Class 8 truck sales demand has softened significantly. We expect our U.S. market share of new Class 8 truck sales to range between 5.4% and 5.9% in 2025 based on A.C.T. Research’s current forecast. This market share percentage would result in the sale of approximately 11,500 to 12,500 new Class 8 trucks in 2025. We expect to sell approximately 450 new Class 8 trucks in Canada in 2025.
Previous wording
With respect to new U.S. Class 4 through 7 retail commercial vehicle sales, A.C.T. Research currently forecasts sales to be 268,300 units in 2024, which would represent a 4.2% increase compared to 2023. We expect our U.S. market share of new Class 4 through 7 commercial vehicle sales to range between 5.0% and 5.4% in 2024. This market share percentage would result in the sale of approximately 13,500 to 14,500 new Class 4 through 7 commercial vehicles in 2024. Additionally, we expect to sell approximately 550 new Class 5 through 7 commercial vehicles in Canada in 2024.
Current wording
With respect to new U.S. Class 4 through 7 retail commercial vehicle sales, A.C.T. Research currently forecasts sales to be 213,300 units in 2025, which would represent an 8.5% decrease compared to 2024. We believe that most medium-duty customers will remain cautious in 2025 and will look to replace vehicles rather than expand their fleets. We expect our U.S. market share of new Class 4 through 7 commercial vehicle sales to range between 5.6% and 6.1% in 2025 based on A.C.T. Research’s current forecast. This market share percentage would result in the sale of approximately 12,000 to 13,000 new Class 4 through 7 commercial vehicles in 2025. We expect to sell approximately 500 new Class 5 through 7 commercial vehicles in Canada in 2025.
Previous wording
We expect to sell approximately 2,000 to 2,200 light-duty vehicles and approximately 6,500 to 7,500 used commercial vehicles in 2024. We expect lease and rental revenue to remain flat during 2024, compared to 2023.
Current wording
We expect to sell approximately 2,000 light-duty vehicles and approximately 6,500 to 7,500 used commercial vehicles in 2025, and we expect lease and rental revenue to increase approximately 3.0% during 2025, compared to 2024.
Previous wording
The following discussion and analysis includes our historical results of operations for the three months and nine months ended September 30, 2024 and 2023.
Current wording
The following discussion and analysis include our historical results of operations for the three months ended March 31, 2025, and 2024.
Previous wording
Management uses several performance metrics to evaluate the performance of our commercial vehicle dealerships and considers Rush Truck Centers’ “absorption ratio” to be of critical importance. Our absorption ratio is calculated by dividing the gross profit from our Aftermarket Products and Services departments by the overhead expenses all of a dealership’s departments, except for the selling expenses of the new and used commercial vehicle departments and carrying costs of new and used commercial vehicle inventory. When 100% absorption is achieved, the gross profit from the sale of a commercial vehicle, after sales commissions and inventory carrying costs, directly impacts operating profit. Our commercial vehicle dealerships achieved a 132.6% absorption ratio for the third quarter of 2024, compared to a 132.8% absorption ratio for the third quarter of 2023.
Current wording
Management uses several performance metrics to evaluate the performance of our commercial vehicle dealerships and considers Rush Truck Centers’ “absorption ratio” to be of critical importance. Our absorption ratio is calculated by dividing the gross profit from our Aftermarket Products and Services departments by the overhead expenses of all of a dealership’s departments, except for the selling expenses of the new and used commercial vehicle departments and carrying costs of new and used commercial vehicle inventory. When 100% absorption is achieved, all of the gross profit from the sale of a commercial vehicle, after sales commissions and inventory carrying costs, directly impacts operating profit. Our commercial vehicle dealerships achieved a 128.6% absorption ratio for the first quarter of 2025, compared to a 130.1% absorption ratio for the first quarter of 2024.
Previous wording
We sold 3,604 new Class 8 trucks in the third quarter of 2024, a 16.7% decrease compared to 4,326 new Class 8 trucks sold in the third quarter of 2023. The decrease in new Class 8 truck sales was primarily due to the ongoing freight recession that is negatively impacting over-the-road-carriers. New U.S. and Canadian Class 8 retail truck sales totaled 73,037 units in the third quarter of 2024, a decrease of 3.5% compared to the third quarter of 2023, according to ACT Research.
Current wording
We sold 3,222 new Class 8 trucks in the first quarter of 2025, a 7.8% decrease compared to 3,494 new Class 8 trucks sold in the first quarter of 2024. The decrease in new Class 8 truck sales was primarily related to the ongoing freight recession, high interest rates and general economic uncertainty, as well as concerns related to tariffs and U.S. trade policy. New U.S. Class 8 retail truck sales totaled 51,938 units in the first quarter of 2025, a decrease of 9.2% compared to the first quarter of 2024, according to ACT Research.
Previous wording
We sold 3,379 new Class 4 through 7 medium-duty commercial vehicles, including 258 buses, in the third quarter of 2024, a 4.2% increase compared to 3,224 new medium-duty commercial vehicles, including 422 buses, in the third quarter of 2023. The increase in new Class 4 through 7 commercial vehicle sales was primarily a result of strong demand and increased production of commercial vehicles from the manufacturers we represent. New U.S. and Canadian Class 4 through 7 retail commercial vehicle sales totaled 68,923 units in the third quarter of 2024, down 1.1% compared to the third quarter of 2023, according to ACT Research.
Current wording
We sold 3,329 new Class 4 through 7 medium-duty commercial vehicles, including 310 buses, in the first quarter of 2025, a 0.1% decrease compared to 3,331 new medium-duty commercial vehicles, including 386 buses, in the first quarter of 2024. New U.S. Class 4 through 7 retail commercial vehicle sales totaled 52,897 units in the first quarter of 2025, up 0.3% compared to the first quarter of 2024, according to ACT Research.
Previous wording
We sold 574 light-duty vehicles in the third quarter of 2024, a 35.1% increase compared to 425 light-duty vehicles sold in the third quarter of 2023.
Current wording
We sold 470 light-duty vehicles in the first quarter of 2025, a 3.1% increase compared to 456 light-duty vehicles sold in the first quarter of 2024.
Previous wording
Commercial vehicle lease and rental revenues decreased $0.3 million, or 0.4%, in the third quarter of 2024, compared to the third quarter of 2023. This decrease in commercial vehicle lease and rental revenues was primarily a result of a slight decrease in rental vehicle utilization.
Current wording
Commercial vehicle lease and rental revenues increased $2.3 million, or 2.7%, in the first quarter of 2025, compared to the first quarter of 2024. The increase in commercial vehicle lease and rental revenues was primarily due to an increase in the delivery of new leased vehicles, which was partially offset by a slight decrease in rental utilization.
Previous wording
Gross margins from our Aftermarket Products and Services operations increased to 36.8% in the third quarter of 2024, from 36.2% in the third quarter of 2023. Gross profit for the Aftermarket Products and Services departments increased to $233.1 million in the third quarter of 2024, from $232.7 million in the third quarter of 2023. Historically, gross margins on parts sales range from 28% to 30% and gross margins on service and collision center operations range from 66% to 68%. Gross profits from parts sales represented 57.5% of total gross profit for Aftermarket Products and Services operations in the third quarter of 2024 and 58.4% in the third quarter of 2023. Service and collision center operations represented 42.5% of total gross profit for Aftermarket Products and Services operations in the third quarter of 2024 and 41.6% in the third quarter of 2023. We expect blended gross margins on Aftermarket Products and Services operations to range from 36.5% to 37.5% in 2024.
Current wording
Gross margins from our Aftermarket Products and Services operations decreased to 35.8% in the first quarter of 2025, from 36.5% in the first quarter of 2024. Gross profit for the Aftermarket Products and Services departments decreased to $221.3 million in the first quarter of 2025, from $236.9 million in the first quarter of 2024. This decrease is primarily related to decreased demand due to difficult economic conditions impacting many of our customers. Historically, gross margins on parts sales range from 28% to 30% and gross margins on service and collision center operations range from 66% to 68%. Gross profits from parts sales represented 58.3% of total gross profit for Aftermarket Products and Services operations in the first quarter of 2025 and 57.5% in the first quarter of 2024. Service and collision center operations represented 41.7% of total gross profit for Aftermarket Products and Services operations in the first quarter of 2025 and 42.5% in the first quarter of 2024. We expect blended gross margins on Aftermarket Products and Services operations to range from 35.5% to 37.5% in 2025.
Previous wording
Gross margins on new Class 8 truck sales decreased to 9.2% in the third quarter of 2024, from 9.9% in the third quarter of 2023. This decrease was primarily due to weak demand caused by the ongoing freight recession. For 2024, we expect overall gross margins from new Class 8 truck sales of approximately 9.0% to 10.0%.
Current wording
Gross margins on new Class 8 truck sales decreased to 9.0% in the first quarter of 2025, from 9.7% in the first quarter of 2024. In 2025, we expect overall gross margins from new heavy-duty truck sales of approximately 8.5% to 9.5%.
Previous wording
Gross margins on new Class 4 through 7 commercial vehicle sales increased to 10.3% in the third quarter of 2024, from 9.2% in the third quarter of 2023. For 2024, we expect overall gross margins from new medium-duty commercial vehicle sales of approximately 9.0% to 10.0%, but this will largely depend upon the mix of purchasers and types of vehicles sold.
Current wording
Gross margins on new Class 4 through 7 commercial vehicle sales decreased to 7.9% in the first quarter of 2025, from 9.3% in the first quarter of 2024. This decrease was primarily due to the mix of purchasers during the first quarter of 2025. For 2025, we expect overall gross margins from new medium-duty commercial vehicle sales of approximately 7.5% to 9.0%, but this will largely depend upon the mix of purchasers and types of vehicles sold.
Previous wording
Gross margins on used commercial vehicle sales increased to 18.0% in the third quarter of 2024, from 11.3% in the third quarter of 2023. This increase was primarily due to the successful execution of our used commercial vehicle sales strategy. We expect margins on used commercial vehicles to range between 18.0% and 20.0% in 2024.
Current wording
Gross margins on used commercial vehicle sales decreased to 14.4% in the first quarter of 2025, from 21.6% in the first quarter of 2024. This decrease was primarily due to a change in sales mix between wholesale and retail. We expect margins on used commercial vehicles to range between 12.0% and 17.0% in 2025.
Previous wording
Selling, General and Administrative (“SG&A”) expenses decreased $17.4 million, or 6.8%, in the third quarter of 2024, compared to the third quarter of 2023. This decrease primarily resulted from reductions to our operating expenses. SG&A expenses as a percentage of total revenues decreased to 12.6% in the third quarter of 2024, from 13.0% in the third quarter of 2023. Annual SG&A expenses as a percentage of total revenues have ranged from approximately 12.4% to 14.4% over the last five years. In general, when new and used commercial vehicle revenues increase as a percentage of total revenues, SG&A expenses as a percentage of total revenues will be at the lower end of this range. For 2024, we expect SG&A expenses as a percentage of total revenues to range from 12.5% to 13.5%. For 2024, we expect the selling portion of SG&A expenses to be approximately 25.0% to 30.0% of new and used commercial vehicle gross profit.
Current wording
Selling, General and Administrative (“SG&A”) expenses decreased $14.9 million, or 5.6%, in the first quarter of 2025, compared to the first quarter of 2024. This decrease primarily resulted from reductions to our operating expenses that occurred in the first half of 2024. SG&A expenses as a percentage of total revenues decreased to 13.4% in the first quarter of 2025, from 14.1% in the first quarter of 2024. Annual SG&A expenses as a percentage of total revenues have ranged from approximately 12.4% to 14.4% over the last five years. In general, when new and used commercial vehicle revenues increase as a percentage of total revenues, SG&A expenses as a percentage of total revenues will be at the lower end of this range. For 2025, we expect SG&A expenses as a percentage of total revenues to range from 13.0% to 14.0%. For 2025, we expect the selling portion of SG&A expenses to be approximately 25.0% to 30.0% of new and used commercial vehicle gross profit.
Previous wording
As a result of the factors described above, income before income taxes decreased $4.3 million, or 4.0%, in the third quarter of 2024, compared to the third quarter of 2023.
Current wording
As a result of the factors described above, income before income taxes decreased $14.2 million, or 15.4%, in the first quarter of 2025, compared to the first quarter of 2024.
Previous wording
Income taxes decreased $3.1 million, or 11.5%, in the third quarter of 2024, compared to the third quarter of 2023. We provided for taxes at a 23.0% effective rate in the third quarter of 2024 and 25.0% in the third quarter of 2023. We expect our effective tax rate to be approximately 23.5% to 24.5% of pretax income in 2024.
Current wording
Income taxes decreased $3.4 million, or 15.8%, in the first quarter of 2025, compared to the first quarter of 2024. We provided for taxes at a 22.8% effective rate in the first quarter of 2025 and 23.0% in the first quarter of 2024. We expect our effective tax rate to be approximately 23.0% to 24.0% of pretax income in 2025.
Previous wording
Our short-term cash requirements are primarily for working capital, inventory financing, the renovation and expansion of existing facilities and the construction or purchase of new facilities. Historically, these cash requirements have been met through the retention of profits, borrowings under our floor plan arrangements and bank financings. As of September 30, 2024, we had working capital of approximately $714.2 million, including $185.1 million in cash, available to fund our operations. We believe that these funds, together with expected cash flows from operations, are sufficient to meet our operating requirements for at least the next twelve months. From time to time, we utilize our excess cash on hand to pay down our outstanding borrowings under various credit agreements. The resulting interest earned on the floor plan credit agreement with BMO Harris Bank N.A. (“BMO Harris”) (the “Floor Plan Credit Agreement”) is recognized as an offset to our interest expense.
Current wording
Our short-term cash requirements are primarily for working capital, inventory financing, the renovation and expansion of existing facilities and the construction or purchase of new facilities. Historically, these cash requirements have been met through the retention of profits, borrowings under our floor plan arrangements and bank financings. As of March 31, 2025, we had working capital of approximately $751.3 million, including $228.7 million in cash, available to fund our operations. We believe that these funds, together with expected cash flows from operations, are sufficient to meet our operating requirements for at least the next twelve months. From time to time, we utilize our excess cash on hand to pay down our outstanding borrowings under various credit agreements.
Previous wording
We continually evaluate our liquidity and capital resources based upon: (i) our cash, cash equivalents and restricted cash on hand; (ii) the funds that we expect to generate through future operations; (iii) current and expected borrowing availability under our secured line of credit, working capital lines of credit available under certain of our credit agreements and our Floor Plan Credit Agreement; and (iv) the potential impact of our capital allocation strategy and any contemplated or pending future transactions, including, but not limited to, acquisitions, equity repurchases, dividends, or other capital expenditures. We believe we will have sufficient liquidity to meet our debt service and working capital requirements, commitments and contingencies, debt repayments, acquisitions, capital expenditures and any operating requirements for at least the next twelve months.
Current wording
We continually evaluate our liquidity and capital resources based upon: (i) our cash, cash equivalents and restricted cash on hand; (ii) the funds that we expect to generate through future operations; (iii) current and expected borrowing availability under our secured line of credit, working capital lines of credit available under certain of our credit agreements and our floor plan credit agreements; and (iv) the potential impact of our capital allocation strategy and any contemplated or pending future transactions, including, but not limited to, acquisitions, equity repurchases, dividends, or other capital expenditures. We believe we will have sufficient liquidity to meet our debt service and working capital requirements, commitments and contingencies, debt repayments, acquisitions, capital expenditures and any operating requirements for at least the next twelve months.
Previous wording
We have a secured line of credit that provides for a maximum borrowing of $25.0 million. There were no advances outstanding under this secured line of credit on September 30, 2024, however, $18.9 million was pledged to secure various letters of credit related to self-insurance products, leaving $6.1 million available for future borrowings as of September 30, 2024.
Current wording
We have a secured line of credit that provides for a maximum borrowing of $25.0 million. There were no advances outstanding under this secured line of credit on March 31, 2025, however, $18.8 million was pledged to secure various letters of credit related to self-insurance products, leaving $6.2 million available for future borrowings as of March 31, 2025.
Previous wording
Our long-term debt, floor plan financing agreements and the credit agreement with Wells Fargo Bank, National Association (the “WF Credit Agreement”) require us to satisfy various financial ratios such as the leverage ratio, the asset coverage ratio and the fixed charge coverage ratio. As of September 30, 2024, we were in compliance with all debt covenants related to debt secured by lease and rental units, our floor plan credit agreements and the WF Credit Agreement. We do not anticipate any breach of these covenants in the foreseeable future.
Current wording
Our floor plan credit agreements and our credit agreement with Wells Fargo Bank, National Association (“WF”) require us to satisfy various financial ratios such as the leverage ratio, the asset coverage ratio and the fixed charge coverage ratio. As of March 31, 2025, we were in compliance with all debt covenants related to debt secured by lease and rental units, our floor plan credit agreements and our credit agreement with WF. We do not anticipate any breach of these covenants in the foreseeable future.
Previous wording
We expect to purchase or lease commercial vehicles worth approximately $325.0 million to $350.0 million for our leasing operations during 2024, depending on customer demand. We also expect to make capital expenditures for the purchase of recurring items such as computers, shop tools and equipment and company vehicles of approximately $40.0 million to $45.0 million during 2024.
Current wording
We expect to purchase or lease commercial vehicles worth approximately $250.0 million to $300.0 million for our leasing operations during 2025, depending on customer demand. We also expect to make capital expenditures for the purchase of recurring items such as computers, shop tools and equipment and company vehicles of approximately $35.0 million to $40.0 million during 2025.
Previous wording
During the third quarter of 2024, we paid a cash dividend of $14.2 million. Additionally, on October 28, 2024, our Board of Directors declared a cash dividend of $0.18 per share of Class A and Class B common stock, to be paid on December 12, 2024, to all shareholders of record as of November 12, 2024. We expect to continue paying cash dividends on a quarterly basis. However, there is no assurance as to future dividends because the declaration and payment of such dividends is subject to the business judgment of our Board of Directors and will depend on historic and projected earnings, capital requirements, covenant compliance and financial conditions and such other factors as our Board of Directors deem relevant.
Current wording
During the first quarter of 2025, we paid a cash dividend of $14.3 million. Additionally, on April 30, 2025, our Board of Directors declared a cash dividend of $0.18 per share of Class A and Class B common stock, to be paid on June 12, 2025, to all shareholders of record as of May 12, 2025. The total dividend disbursement is estimated at approximately $14.4 million. We expect to continue paying cash dividends on a quarterly basis. However, there is no assurance as to future dividends because the declaration and payment of such dividends is subject to the business judgment of our Board of Directors and will depend on historic and projected earnings, capital requirements, covenant compliance and financial conditions and such other factors as our Board of Directors deem relevant.
Previous wording
On December 6, 2023, we announced that our Board of Directors approved a new stock repurchase program authorizing management to repurchase, from time to time, up to an aggregate of $150.0 million of our shares of Class A common stock and/or Class B common stock. In connection with the adoption of the new stock repurchase plan, we terminated the prior stock repurchase plan, which was scheduled to expire on December 31, 2023. Repurchases, if any, will be made at times and in amounts as we deem appropriate and may be made through open market transactions at prevailing market prices, privately negotiated transactions or by other means in accordance with federal securities laws. The actual timing, number of shares and value of repurchases under the stock repurchase program will be determined by management at its discretion and will depend on a number of factors, including market conditions, stock price and other factors. As of September 30, 2024, we had repurchased $77.4 million of our shares of common stock under the current stock repurchase program, excluding federal excise tax. The current stock repurchase program expires on December 31, 2024, and may be suspended or discontinued at any time.
Current wording
On December 2, 2024, we announced that our Board of Directors approved a new stock repurchase program authorizing management to repurchase, from time to time, up to an aggregate of $150.0 million of our shares of Class A common stock and/or Class B common stock. In connection with the adoption of the new stock repurchase plan, we terminated the prior stock repurchase plan, which was scheduled to expire on December 31, 2024. Repurchases, if any, are made at times and in amounts as we deem appropriate and may be made through open market transactions at prevailing market prices, privately negotiated transactions or by other means in accordance with federal securities laws. The actual timing, number of shares and value of repurchases under the stock repurchase program will be determined by management at its discretion and will depend on a number of factors, including market conditions, stock price and other factors. As of March 31, 2025, we had repurchased $37.4 million of our shares of common stock under the current stock repurchase program, excluding federal excise tax. The current stock repurchase program expires on December 31, 2025, and may be suspended or discontinued at any time.
Previous wording
We anticipate funding the capital expenditures for the improvement and expansion of existing facilities and recurring expenses through our operating cash flows. We have the ability to fund the construction or purchase of new facilities through our operating cash flows or by financing.
Current wording
We anticipate funding the capital expenditures for the improvement and expansion of existing facilities and recurring expenses through our operating cash flows. We can fund the construction or purchase of new facilities through our operating cash flows or by financing.
Previous wording
We have no other material commitments for capital expenditures as of September 30, 2024. However, we will continue to purchase vehicles for our lease and rental operations and authorize capital expenditures for the improvement or expansion of our existing dealership facilities and construction or purchase of new facilities based on market opportunities.
Current wording
We are currently under contract to construct a new facility on the land adjacent to our current location in Huntley, IL with a current budget of $23.8 million. We will continue to purchase vehicles for our lease and rental operations and authorize capital expenditures for the improvement or expansion of our existing dealership facilities.
Previous wording
Cash flows from operating activities include net income adjusted for non-cash items and the effects of changes in working capital. During the first nine months of 2024, operating activities resulted in net cash provided by operations of $227.3 million. Net cash provided by operating activities primarily consisted of $229.7 million in net income, as well as non-cash adjustments related to depreciation and amortization of $175.5 million, gain on sale of property and equipment of $0.7 million, stock-based compensation of $24.9 million and the benefit for deferred income tax expense of $11.1 million. Cash used by operating activities included an aggregate of $212.7 million net changes in operating assets and liabilities. Included in the net change in operating assets and liabilities were cash inflows of $11.6 million from the increase in accounts payable, which was offset primarily by cash outflows of $108.1 million from the increase in inventories, $30.5 million from the increase in accounts receivable, $58.2 million from the decrease in customer deposits and $22.3 million from the decrease in accrued expenses. Most of our commercial vehicle inventory is financed through our floor plan credit agreements.
Current wording
Cash flows from operating activities include net income adjusted for non-cash items and the effects of changes in working capital. During the first quarter of 2025, operating activities resulted in net cash provided by operations of $153.5 million. Net cash provided by operating activities primarily consisted of $60.6 million in net income, as well as non-cash adjustments related to depreciation and amortization of $61.5 million, and stock-based compensation of $13.7 million. Cash used by operating activities included an aggregate of $16.6 million net change in operating assets and liabilities. Included in the net change in operating assets and liabilities were cash inflows of $75.4 million from the increase in accounts payable and $50.3 million from the decrease in accounts receivable, which was offset primarily by cash outflows of $77.0 million from the increase in inventories, $12.6 million from the decrease in customer deposits and $19.6 million from the decrease in accrued expenses. Most of our commercial vehicle inventory is financed through our floor plan credit agreements.
Previous wording
During the first nine months of 2023, operating activities resulted in net cash provided by operations of $211.1 million. Net cash provided by operating activities primarily consisted of $269.9 million in net income, as well as non-cash adjustments related to depreciation and amortization of $165.1 million, gain on sale of property and equipment of $0.6 million, stock-based compensation of $25.3 million and the benefit for deferred income tax expense of $3.5 million. Cash used by operating activities included an aggregate of $252.2 million net change in operating assets and liabilities. Included in the net change in operating assets and liabilities were cash inflows of $4.5 million from the increase in accounts payable, which was offset by cash outflows of $193.7 million from the increase in inventories, $42.8 million from the increase in accounts receivable, $13.3 million from the decrease in customer deposits and $4.1 million from the decrease in accrued expenses.
Current wording
During the first quarter of 2024, operating activities resulted in net cash used in operations of $155.1 million. Net cash provided by operating activities primarily consisted of $71.5 million in net income, as well as non-cash adjustments related to depreciation and amortization of $56.8 million, and stock-based compensation of $14.1 million. Cash used by operating activities included an aggregate of $297.4 million net change in operating assets and liabilities. Included in the net change in operating assets and liabilities were cash inflows of $17.4 million from the increase in accounts payable, which was offset primarily by cash outflows of $215.5 million from the increase in inventories, $49.9 million from the increase in accounts receivable, $17.7 million from the decrease in customer deposits and $26.9 million from the increase in accrued expenses. Most of our commercial vehicle inventory is financed through our floor plan credit agreements.
Previous wording
During the first nine months of 2023, cash used in investing activities was $291.0 million. Cash flows used in investing activities consist primarily of cash used for the acquisition of property and equipment. Acquisition of property and equipment totaled $289.1 million during the first nine months of 2023 and consisted primarily of purchases of machine and shop equipment, furniture and fixtures, real estate and facilities, improvements to our existing dealership facilities and $210.5 million for purchases of rental and lease vehicles for our rental and leasing operations.
Current wording
During the first quarter of 2025, cash used in investing activities was $97.2 million. Cash flows used in investing activities consist primarily of cash used for the acquisition of property and equipment. Acquisition of property and equipment totaled $109.1 million during the first three months of 2025 and consisted primarily of purchases of machinery and shop equipment, furniture and fixtures, real estate and facilities, improvements to our existing dealership facilities and $94.0 million for purchases of rental and lease vehicles for our rental and leasing operations.
Previous wording
During the first nine months of 2024, cash used in investing activities was $305.8 million. Cash flows used in investing activities consist primarily of cash used for the acquisition of property and equipment and the acquisition of new businesses. See Note 12 of the Notes to Consolidated Financial Statements for a detailed discussion of the business acquisitions. Acquisition of property and equipment totaled $304.2 million during the first nine months of 2024 and consisted primarily of purchases of machine and shop equipment, furniture and fixtures, real estate and facilities, improvements to our existing dealership facilities and $223.1 million for purchases of rental and lease vehicles for our rental and leasing operations.
Current wording
During the first quarter of 2024, cash used in investing activities was $69.2 million. Cash flows used in investing activities consist primarily of cash used for the acquisition of property and equipment. Acquisition of property and equipment totaled $79.1 million during the first three months of 2025 and consisted primarily of purchases of machinery and shop equipment, furniture and fixtures, real estate and facilities, improvements to our existing dealership facilities and $52.1 million for purchases of rental and lease vehicles for our rental and leasing operations.
Previous wording
Cash flows from financing activities include borrowings and repayments of long-term debt and net proceeds of floor plan notes payable, non-trade.** During the first nine months of 2024, financing **activities resulted in net cash provided by financing activities of $79.9 million, primarily related to $146.0 million from net draws on floor plan notes payable, non-trade, $1,621.3 million from borrowings of long-term debt and $20.2 million from the issuance of shares related to equity compensation plans. These cash inflows were offset by cash outflows of $1,634.5 million used for principal repayments of long-term debt and capital lease obligations, $9.8 million used for repurchases of common stock, $9.5 million for taxes paid related to net share settlement of equity awards and $41.2 million used for payment of cash dividends.
Current wording
Cash flows from financing activities include borrowings and repayments of long-term debt and net proceeds of floor plan notes payable, non-trade.** During the first quarter of 2025, financing **activities resulted in net cash used in financing activities of $56.4 million, primarily related to $288.4 million from borrowings of long-term debt and $6.2 million from the issuance of shares related to equity compensation plans. These cash inflows were offset by cash outflows of $0.6 million from net draws on floor plan notes payable, non-trade, $293.2 million used for principal repayments of long-term debt and finance lease obligations, $29.6 million used for repurchases of common stock, $9.4 million for taxes paid related to net share settlement of equity awards and $14.4 million used for payment of cash dividends.
Previous wording
During the first nine months of 2023, financing** **activities resulted in net cash provided by financing activities of $70.8 million, primarily related to $188.4 million from net draws on floor plan notes payable, non-trade, $995.1 million from borrowings of long-term debt and $14.7 million from the issuance of shares related to equity compensation plans. These cash inflows were offset by cash outflows of $976.2 million used for principal repayments of long-term debt and capital lease obligations, $107.0 million used for repurchases of common stock, $7.0 million for taxes paid related to net share settlement of equity awards and $37.1 million used for payment of cash dividends.
Current wording
During the first quarter of 2024, financing** **activities resulted in net cash provided by financing activities of $196.5 million, primarily related to $110.2 million from net draws on floor plan notes payable, non-trade, $713.8 million from borrowings of long-term debt and $9.4 million from the issuance of shares related to equity compensation plans. These cash inflows were offset by cash outflows of $607.9 million used for principal repayments of long-term debt and finance lease obligations, $5.6 million used for repurchases of common stock, $9.5 million for taxes paid related to net share settlement of equity awards and $13.9 million used for payment of cash dividends.
Previous wording
On September 14, 2021, we entered into the WF Credit Agreement with the lenders signatory thereto (the “WF Lenders”) and Wells Fargo Bank, National Association (“WF”), as Administrative Agent (in such capacity, the “WF Agent”). Pursuant to the terms of the WF Credit Agreement (as amended), the WF Lenders have agreed to make up to $175.0 million of revolving credit loans for certain of our capital expenditures, including commercial vehicle purchases for our Idealease leasing and rental fleet, and general working capital needs. We expect to use the revolving credit loans available under the WF Credit Agreement primarily for the purpose of purchasing commercial vehicles for our Idealease lease and rental fleet. We may borrow, repay and reborrow amounts pursuant to the WF Credit Agreement from time to time until the maturity date. Borrowings under the WF Credit Agreement bear interest per annum, payable on each interest payment date, as defined in the WF Credit Agreement, at (A) the daily Simple, secured overnight financing rate (“SOFR”) plus (i) 1.25% or (ii) 1.5%, depending on our consolidated leverage ratio or (B) on or after the SOFR transition date, SOFR plus (i) 1.25% or (ii) 1.5%, depending on our consolidated leverage ratio. The WF Credit Agreement expires on September 14, 2026, although, upon the occurrence and during the continuance of an event of default, the WF Agent has the right to, or upon the request of the required lenders must, terminate the commitments and declare all outstanding principal and interest due and payable. We may terminate the commitments at any time. On September 30, 2024, we had approximately $175.0 million outstanding under the WF Credit Agreement.
Current wording
On September 14, 2021, we entered into a credit agreement with WF, with the lenders signatory thereto (“WF Lenders”) and WF as administrative agent (the “Well Fargo Credit Agreement”). Pursuant to the terms of the WF Credit Agreement (as amended), the WF Lenders have agreed to make up to $175.0 million of revolving credit loans for certain of our capital expenditures, including commercial vehicle purchases for our Idealease leasing and rental fleet, and general working capital needs. We expect to use the revolving credit loans available under the WF Credit Agreement primarily for the purpose of purchasing commercial vehicles for our Idealease lease and rental fleet. We may borrow, repay and reborrow amounts pursuant to the WF Credit Agreement from time to time until the maturity date. Borrowings under the WF Credit Agreement bear interest per annum, payable on each interest payment date, as defined in the WF Credit Agreement, at (A) the daily Secured Overnight Financing Rate (“SOFR”) plus (i) 1.25% or (ii) 1.5%, depending on our consolidated leverage ratio or (B) on or after the SOFR transition date, SOFR plus (i) 1.25% or (ii) 1.5%, depending on our consolidated leverage ratio. The WF Credit Agreement expires on September 14, 2026, although, upon the occurrence and during the continuance of an event of default, the agent has the right to, or upon the request of the required lenders must, terminate the commitments and declare all outstanding principal and interest due and payable. We may terminate the commitments at any time. On March 31, 2025, we had approximately $142.4 million outstanding under the WF Credit Agreement.
Previous wording
On November 1, 2023, we entered into certain Second Amended and Restated Inventory Financing and Purchase Money Security Agreement with PACCAR Leasing Company, (“PLC”), a division of PACCAR Financial Corp., (as amended the “PLC Agreement”). Pursuant to the terms of the PLC Agreement, PLC agreed to make up to $375.0 million of revolving credit loans to finance certain of our capital expenditures, including commercial vehicle purchases and other equipment to be leased or rented through our PacLease franchises. We may borrow, repay and reborrow amounts pursuant to the PLC Agreement from time to time until the maturity date, provided, however, that the outstanding principal amount on any date shall not exceed the borrowing base. In addition, we must maintain a minimum balance of $190.0 million. Advances under the PLC Agreement bear interest per annum, payable on the fifth day of the following month, at our option, at either (A) the prime rate, minus 1.95%, provided that the floating rate of interest is subject to a floor of 0%, or (B) a fixed rate, to be determined between us and PLC in each instance of borrowing at a fixed rate. The PLC Agreement expires on December 1, 2025, although either party has the right to terminate the PLC Agreement at any time upon 180 days written notice. On September 30, 2024, we had approximately $190.0 million outstanding under the PLC Agreement.
Current wording
On November 1, 2023, we entered into that certain Second Amended and Restated Inventory Financing and Purchase Money Security Agreement with PACCAR Leasing Company (“PLC”), a division of Paccar Financing Corp. (“PFC”) (“the PLC Agreement”). Pursuant to the terms of the PLC Agreement (as amended), PLC agreed to make up to $500.0 million of revolving credit loans to finance certain of our capital expenditures, including commercial vehicle purchases and other equipment to be leased or rented through our PacLease franchises. We may borrow, repay and reborrow amounts pursuant to the PLC Agreement from time to time until the maturity date, provided, however, that the outstanding principal amount on any date shall not exceed the borrowing base. In addition, we must maintain a minimum balance of $220.0 million or we are subject to an unused commitment fee 0.20% of the amount by which the average daily outstanding principal balance of the loan during such quarter is less than $220.0 million. Advances under the PLC Agreement bear interest per annum, payable on the fifth day of the following month, at our option, at either (A) the prime rate, minus 2.10%, provided that the floating rate of interest is subject to a floor of 0%, or (B) a fixed rate, to be determined between us and PLC in each instance of borrowing at a fixed rate. The PLC Agreement expires on December 16, 2029, although either party has the right to terminate the PLC Agreement at any time upon 360 days written notice. On March 31, 2025, we had approximately $220.0 million outstanding under the PLC Agreement.
Previous wording
On May 31, 2022, RTC Canada entered into that certain BMO Revolving Lease and Rental Credit Agreement (the “RTC Canada Revolving Credit Agreement”) with BMO. Pursuant to the terms of the RTC Canada Revolving Credit Agreement, BMO agreed to make up to $120.0 million CAD of revolving credit loans to finance certain of RTC Canada’s capital expenditures, including commercial vehicle purchases and other equipment to be leased or rented through RTC Canada’s Idealease franchise, with an additional $20.0 million CAD available upon the request of RTC Canada and consent of BMO. Prior to June 1, 2024, advances under the RTC Canada Revolving Credit Agreement bore interest per annum, payable on the first business day of each calendar month, at the Canadian Offered Dollar Rate (“CDOR”), plus 1.35%. On June 1, 2024, RTC Canada entered into the First Amendment to the RTC Revolving Credit Agreement that changed the benchmark interest rate to the Canadian Overnight Repo Rate (“CORRA”). Effective June 1, 2024, borrowing under the RTC Revolving Credit Agreement now bear interest per annum payable monthly at CORRA, plus 1.72%. The RTC Canada Revolving Credit Agreement expires September 14, 2026. On September 30, 2024, we had approximately $38.4 million CAD outstanding under the RTC Canada Revolving Credit Agreement.
Current wording
On May 31, 2022, RTC Canada entered into that certain BMO Revolving Lease and Rental Credit Agreement (“the RTC Canada Revolving Credit Agreement”) with Bank of Montreal (“BMO”). Pursuant to the terms of the RTC Canada Revolving Credit Agreement (as amended), BMO agreed to make up to $120.0 million CAD of revolving credit loans to finance certain of RTC Canada’s capital expenditures, including commercial vehicle purchases and other equipment to be leased or rented through RTC Canada’s Idealease franchise, with an additional $20.0 million CAD available upon the request of RTC Canada and consent of BMO. Borrowings under the RTC Canada Revolving Credit Agreement bear interest per annum payable monthly at Canadian Overnight Repo Rate Average (“CORRA”), plus 1.72%. The RTC Canada Revolving Credit Agreement expires on September 14, 2026. On March 31, 2025, we had approximately $59.4 million CAD outstanding under the RTC Canada Revolving Credit Agreement.
Previous wording
Most of our commercial vehicle purchases are made on terms requiring payment to the manufacturer within 15 to 60 days or less from the date the commercial vehicles are invoiced from the factory. Navistar Financial Corporation and Peterbilt offer trade terms that provide an interest-free inventory stocking period for certain new commercial vehicles. This interest-free period is generally 15 to 60 days. If the commercial vehicle is not sold within the interest-free period, we then finance the commercial vehicle under the Floor Plan Credit Agreement. On September 14, 2021, we entered into Floor Plan Credit Agreement with BMO Harris and the lenders signatory thereto. The Floor Plan Credit Agreement includes an aggregate loan commitment of $1.0 billion. Prior to June 1, 2023, borrowings under the Floor Plan Credit Agreement bore interest at an annual rate equal to (A) the greater of (i) zero and (ii) one month London Interbank Offered Rate (“LIBOR”), determined on the last day of the prior month, plus (B) 1.10% and were payable monthly. On May 31, 2023, we entered into the First Amendment to the Floor Plan Credit Agreement that changed the benchmark interest rate to SOFR. Effective June 1, 2023, borrowings under the Floor Plan Credit Agreement now bear interest per annum, payable monthly, at (A) the greater of (i) zero and (ii) SOFR, plus (B) 1.20%. Borrowings under the Floor Plan Credit Agreement for the purchase of used inventory are limited to $150.0 million and loans for working capital purposes are limited to $200.0 million. The Floor Plan Credit Agreement expires September 14, 2026, although BMO Harris has the right to terminate at any time upon 360 days written notice and we may terminate at any time, subject to specified limited exceptions. On September 30, 2024, we had approximately $1.0 billion outstanding under the Floor Plan Credit Agreement. The average daily outstanding borrowings under the Floor Plan Credit Agreement were $975.8 million during the nine months ended September 30, 2024. We utilize our excess cash on hand to pay down our outstanding borrowings under the Floor Plan Credit Agreement, and the resulting interest earned is recognized as an offset to our gross interest expense under the Floor Plan Credit Agreement.
Current wording
On September 14, 2021, we entered into the Fifth Amended and Restate Credit Agreement (“the BMO Floor Plan Credit Agreement”) (as amended) with BMO Bank and the lenders signatory thereto. This agreement previously had an aggregate loan commitment of $1.0 billion, which we utilized to finance all of our new and used commercial vehicle inventory in the United States until we entered into the PFC Floor Plan Credit Agreement. On December 12, 2024, we entered into an amendment of the BMO Floor Plan Credit Agreement. Pursuant to the terms of the amendment, the aggregate loan commitment was reduced from $1.0 billion to $675.0 million and the definition of “Inventory” was amended to remove trucks, tractors and chassis manufactured by Peterbilt. We utilize the BMO Floor Plan Credit Agreement to finance all of our new commercial vehicle inventory, except for equipment manufactured by Peterbilt, and all of our used commercial vehicle inventory and for working capital purposes. Borrowings under the BMO Floor Plan Credit Agreement bear interest per annum, payable monthly, at (A) the greater of (i) zero and (ii) Term SOFR (as defined in the agreement), plus (B) 1.20%. Borrowings under the BMO Floor Plan Credit Agreement for the purchase of used inventory are limited to $150.0 million and loans for working capital purposes are limited to $200.0 million. The BMO Floor Plan Credit Agreement expires on December 31, 2029, although BMO Bank has the right to terminate at any time upon 360 days written notice and we may terminate at any time, subject to specified limited exceptions. On March 31, 2025, we had approximately $368.1 million outstanding under the BMO Floor Plan Credit Agreement. We utilize our excess cash on hand to pay down our outstanding borrowings under the BMO Floor Plan Credit Agreement, and the resulting interest earned is recognized as an offset to our gross interest expense under the BMO Floor Plan Credit Agreement.
Previous wording
On July 15, 2022, RTC Canada entered into that certain Amended and Restated BMO Wholesale Financing and Security Agreement (the “RTC Canada Floor Plan Agreement”) with Bank of Montreal (“BMO”). Pursuant to the terms of the Agreement, BMO agreed to make up to $116.7 million CAD of revolving credit loans to finance RTC Canada’s purchase of new and used vehicle inventory. Loans to purchase used vehicle inventory are limited to twenty percent (20%) of the credit limit available at such time. RTC Canada may borrow, repay and reborrow loans from time to time until the maturity date, provided, however, that the outstanding principal amount on any date shall not exceed the credit limits set forth above with respect to new and used vehicles. Prior to June 1, 2024, borrowings with respect to advances required to be made in CAD dollars bore interest per annum, payable monthly, at CDOR, plus 0.90%. On June 1, 2024, we entered into the Second Amendment to the RTC Canada Floor Plan Agreement that changed the benchmark interest rate with respect to advances required to be made in CAD dollars to CORRA. Effective June 1, 2024, advances required to be made in CAD dollars under the RTC Canada Floor Plan Agreement now bear interest per annum, payable monthly, at CORRA, plus 1.27%. In addition, prior to June 1, 2023, advances required to be made in USD dollars bore interest, payable monthly, at LIBOR, plus 1.10%. On June 1, 2023, RTC Canada entered into the First Amendment to the RTC Canada Floor Plan Agreement that changed the benchmark interest rate in the case of an advances required to be made in USD dollars to SOFR. Effective June 1, 2023, advances required to be made in USD dollars under the RTC Canada Floor Plan Agreement bear interest per annum, payable monthly, at SOFR, plus 1.20%. The RTC Canada Floor Plan Agreement expires September 14, 2026. On September 30, 2024, we had approximately $109.0 million CAD outstanding under the RTC Canada Floor Plan Agreement. The average daily outstanding borrowings under the RTC Canada Floor Plan Credit Agreement were $76.5 million during the nine months ended September 30, 2024.
Current wording
On July 15, 2022, RTC Canada entered into that certain Amended and Restated BMO Wholesale Financing and Security Agreement (“the RTC Canada Floor Plan Credit Agreement”) with BMO. Pursuant to the terms of the RTC Canada Floor Plan Credit Agreement (as amended), BMO agreed to make up to $116.7 million CAD of revolving credit loans to finance RTC Canada’s purchase of new and used vehicle inventory. Loans to purchase used vehicle inventory are limited to twenty percent (20%) of the credit limit available at such time. RTC Canada may borrow, repay and reborrow loans from time to time until the maturity date, provided, however, that the outstanding principal amount on any date shall not exceed the credit limits set forth above with respect to new and used vehicles. Advances required to be made in CAD dollars under the RTC Canada Floor Plan Credit Agreement bear interest per annum, payable monthly, at CORRA, plus 1.27%. Advances required to be made in USD dollars bear interest per annum, payable monthly, at SOFR, plus 1.20%. The RTC Canada Floor Plan Credit Agreement expires on September 14, 2026. On March 31, 2025, we had approximately $85.0 million CAD outstanding under the RTC Canada Floor Plan Credit Agreement. We utilize our excess cash on hand to pay down our outstanding borrowings under the RTC Canada Floor Plan Credit Agreement, and the resulting interest earned is recognized as an offset to our gross interest expense under the RTC Canada Floor Plan Credit Agreement.
Previous wording
On September 30, 2024, our backlog of commercial vehicle orders was approximately $1,332.9 million, compared to a backlog of commercial vehicle orders of approximately $3,297.4 million on September 30, 2023. The decrease in our backlog primarily reflects the decreased demand for new Class 8 trucks resulting from production catching up to pent-up demand and the ongoing freight recession. Our backlog is determined quarterly by multiplying the number of new commercial vehicles for each type of commercial vehicle ordered by a customer at our Rush Truck Centers by the recent average selling price for that type of commercial vehicle. We include only confirmed orders in our backlog. However, such orders are subject to cancellation. In the event of order cancellation, we have no contractual right to the total revenues reflected in our backlog. The delivery time for a custom-ordered commercial vehicle varies depending on the truck specifications and demand for the model ordered. We sell the majority of our new heavy-duty commercial vehicles by customer special order and we sell the majority of our medium and light-duty commercial vehicles out of inventory. Orders from our major fleet customers are included in our backlog as of September 30, 2024, and we expect to fill most of our backlog orders during the remainder of 2024.
Current wording
On March 31, 2025, our backlog of commercial vehicle orders was approximately $1,401.3 million, compared to a backlog of commercial vehicle orders of approximately $2,047.1 million on March 31, 2024. Given the current uncertainty regarding tariffs, we believe that certain commercial vehicle orders currently reflected in our backlog could be cancelled in the event that such tariffs are enacted and significantly increase the aggregate price that our customers will have to pay for such vehicles. Our backlog is determined quarterly by multiplying the number of new commercial vehicles for each type of commercial vehicle ordered by a customer at our Rush Truck Centers by the recent average selling price for that type of commercial vehicle. We include only confirmed orders in our backlog. However, such orders are subject to cancellation. In the event of order cancellation, we have no contractual right to the total revenues reflected in our backlog. The delivery time for a custom-ordered commercial vehicle varies depending on the truck specifications and demand for the model ordered. We sell most of our new heavy-duty commercial vehicles by customer special order, and we sell the majority of our medium- and light-duty commercial vehicles out of inventory. Orders from several of our major fleet customers are included in our backlog as of March 31, 2025, and we expect to fill most of our backlog orders during 2025, assuming that the manufacturers we represent can meet their current production schedule.
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Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Most of our commercial vehicle purchases are made on terms requiring payment to the manufacturer within 15 to 60 days or less from the date the commercial vehicles are invoiced from the factory. Navistar Financial Corporation and Peterbilt offer trade terms that provide an interest-free inventory stocking period for certain new commercial vehicles. This interest-free period is 15 to 60 days. If the commercial vehicle is not sold within the interest-free period, we finance the commercial vehicle under the credit agreements described below.
Current report — wording carried from elsewhere
On December 16, 2024, we entered into the Inventory Financing and Purchase Money Security Agreement (“the PFC Floor Plan Credit Agreement”) with PFC. The PFC Floor Plan Credit Agreement includes an aggregate loan commitment of $800.0 million for the financing of new Peterbilt trucks, tractors, chassis and other related equipment manufactured by Peterbilt. Borrowings under the PFC Floor Plan Credit Agreement bear interest per annum, payable on the fifth day of the following month, at our option, at either (A) the prime rate, minus 2.10%, provided that the floating rate of interest is subject to a floor of 0%, or (B) a fixed rate, to be determined between us and PFC in each instance of borrowing at a fixed rate. The PFC Floor Plan Credit Agreement expires on December 16, 2029, although either party has the right to terminate the PFC Floor Plan Credit Agreement at any time upon 360 days written notice. On March 31, 2025, we had approximately $480.0 million outstanding under the PFC Floor Plan Credit Agreement. We utilize our excess cash on hand to pay down our outstanding borrowings under the PFC Floor Plan Credit Agreement, and the resulting interest earned is recognized as an offset to our gross interest expense under the PFC Floor Plan Credit Agreement.