RUSH ENTERPRISES INC \TX\

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 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 and 2 IC Bus dealership locations in Ontario. RTC Canada also sells IC Busses in Quebec and the Maritimes. 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.

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 126 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 and 2 IC Bus dealership locations in Ontario. RTC Canada also sells IC Busses in Quebec and the Maritimes. 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 221,400 units in 2025, which would represent a 10.5% decrease compared to 2024. The ongoing freight recession and general economic uncertainty in addition to uncertainty with respect to U.S. trade policy and engine emission regulations, continues to weigh on the industry and impact demand for new commercial vehicles. While we expect that new Class 8 truck sales to vocational customers will remain strong through the end of the year, we also expect continued weak demand from our over-the-road customer, our largest customer segment. 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 12,000 to 13,000 new Class 8 trucks in 2025. We expect to sell approximately 400 new Class 8 trucks in Canada in 2025.

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 216,300 units in 2025, which would represent a 12.5% decrease compared to 2024. The ongoing freight recession and uncertainty with respect to U.S. trade policy and engine emission regulations, continues to weigh on the industry and impact demand for new commercial vehicles. While we expect that new Class 8 truck sales to vocational customers will remain solid through the end of the year, we also expect continued weak demand from our over-the-road customers, our largest customer segment. 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 of 216,300. This market share percentage would result in the sale of approximately 11,700 to 12,800 new Class 8 trucks in 2025. We expect to sell approximately 350 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 231,300 units in 2025, which would represent a 10.2% decrease compared to 2024. We believe that demand for medium-duty commercial vehicle will remain solid, at least through the third quarter. We expect our U.S. market share of new Class 4 through 7 commercial vehicle sales to range between 5.8% and 6.3% in 2025 based on A.C.T. Research’s current forecast. This market share percentage would result in the sale of approximately 13,400 to 14,600 new Class 4 through 7 commercial vehicles in 2025. We expect to sell approximately 900 new Class 5 through 7 commercial vehicles in Canada in 2025.

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 227,225 units in 2025, which would represent a 11.8% decrease compared to 2024. We believe that demand for medium-duty commercial vehicles will remain stable through the end of the year. We expect our U.S. market share of new Class 4 through 7 commercial vehicle sales to range between 5.5% and 6.0% in 2025 based on A.C.T. Research’s current forecast of 227,225. This market share percentage would result in the sale of approximately 12,500 to 13,600 new Class 4 through 7 commercial vehicles in 2025. We expect to sell approximately 1,000 new Class 5 through 7 commercial vehicles in Canada in 2025.

Previous wording

We expect to sell approximately 2,500 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 5.0% during 2025, compared to 2024.

Current wording

We expect to sell approximately 2,600 to 2800 light-duty vehicles and approximately 6,500 used commercial vehicles in 2025, and we expect lease and rental revenue to increase approximately 4.5% during 2025, compared to 2024.

Previous wording

With respect to our parts, service, and collision center (collectively referred to herein as “Aftermarket Products and Services”) operations, despite a difficult operating environment, we experienced a slight increase in demand during the second quarter from most of our customer segments, including owner-operators and small fleets, which we believe is a potential signal of improving demand ahead. We believe that our Aftermarket Products and Services revenues will remain flat in the third quarter, with the potential for modest growth. However, there is too much uncertainty to provide a reliable outlook for the remainder of the year, as potential changes in U.S. trade policy may have a material impact – either positive or negative – on customer demand.

Current wording

With respect to our parts, service, and collision center (collectively referred to herein as “Aftermarket Products and Services”) operations, despite a difficult operating environment, we achieved a slight increase in revenue during the third quarter of 2025, compared to the third quarter of 2024. We believe that our Aftermarket Products and Services revenues will remain flat to slightly down in the fourth quarter, compared to the third quarter of 2025.

Previous wording

The following discussion and analysis includes our historical results of operations for the three months and six months periods ended June 30, 2025 and 2024.

Current wording

The following discussion and analysis includes our historical results of operations for the three months and nine months ended September 30, 2025 and 2024.

Previous wording

The following table sets forth the unit sales and revenues for new heavy-duty, new medium-duty, new light-duty and used commercial vehicles and the absorption ratio (revenues in millions):

Current wording

The following table sets forth the unit sales and revenues for new heavy-duty, new medium-duty, new light-duty and used commercial vehicles and our absorption ratio (revenue in millions):

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 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 135.5% absorption ratio for the second quarter of 2025 compared to a 134.0% absorption ratio for the second quarter of 2024.

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 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 129.3% absorption ratio for the third quarter of 2025, compared to a 132.6% absorption ratio for the third quarter of 2024.

Previous wording

Total revenues decreased $96.3 million, or 4.8%, in the second quarter of 2025, compared to the second quarter of 2024. This decrease was primarily the result of decreased new Class 8 truck sales revenue due to continued weak demand from over-the-road customers.

Current wording

Total revenues decreased $15.4 million, or 0.8%, in the third quarter of 2025, compared to the third quarter of 2024. This decrease was primarily the result of decreased new Class 8 truck sales due to continued weak demand from over-the-road customers.

Previous wording

Revenues from sales of new and used commercial vehicles decreased $108.8 million, or 8.4%, in the second quarter of 2025, compared to the second quarter of 2024. This decrease was primarily the result of decreased new Class 8 truck sales revenue due to the timing of several large fleet deliveries that occurred in the second quarter of 2024 and continued weak demand from over-the-road customers.

Current wording

Revenues from sales of new and used commercial vehicles decreased $28.4 million, or 2.4%, in the third quarter of 2025, compared to the third quarter of 2024. This decrease was primarily the result of reduced demand due to challenging market conditions and regulatory uncertainty.

Previous wording

We sold 3,626 new Class 4 through 7 commercial vehicles, including 359 buses, in the second quarter of 2025 in the United States, a 1.0% increase compared to 3,591 new medium-duty commercial vehicles, including 351 buses, in the second quarter of 2024. We sold 177 Class 5 through 7 commercial vehicles in the second quarter of 2025 in Canada, a 77.0% increase compared to 100 new Class 5 through 7 commercial vehicles in the second quarter of 2024. The slight increase in new Class 4 through 7 commercial vehicle sales in the United States was primarily a result of consistent demand and our ability to meet customer needs with our bodied-up inventory.

Current wording

We sold 3,427 new Class 4 through 7 medium-duty commercial vehicles in the United States, including 660 buses, during the third quarter of 2025, a 1.4% increase compared to 3,379 new medium-duty commercial vehicles, including 258 buses, in the third quarter of 2024. We sold 448 Class 5 through 7 medium-duty commercial vehicles, including 291 buses, in the third quarter of 2025 in Canada, a 239.4% increase compared to 132 new Class 5 through 7 commercial vehicles in the third quarter of 2024. The slight increase in new Class 4 through 7 commercial vehicle sales in the United States was primarily a result of consistent demand and our ability to meet customer needs with our bodied-up inventory. The increase in new Class 5 through 7 commercial vehicle sales in Canada was primarily the result of RTC Canda’s acquisition of IC Bus and Collins Bus franchises in June 2025.

Previous wording

We sold 703 light-duty vehicles in the second quarter of 2025, a 30.9% increase compared to 537 light-duty vehicles sold in the second quarter of 2024. We sold 1,715 used commercial vehicles in the second quarter of 2025, a 0.5% decrease compared to 1,723 used commercial vehicles sold in the second quarter of 2024.

Current wording

We sold 858 light-duty vehicles in the third quarter of 2025, a 49.5% increase compared to 574 light-duty vehicles sold in the third quarter of 2024. We sold 1,814 used commercial vehicles in the third quarter of 2025, a 0.8% decrease compared to 1,829 used commercial vehicles in the third quarter of 2024.

Previous wording

Commercial vehicle lease and rental revenues increased $5.5 million, or 6.3%, in the second quarter of 2025, compared to the second quarter of 2024. This increase in commercial vehicle lease and rental revenues was primarily due to the addition of new vehicles to our lease fleet and consistent demand from lease customers.

Current wording

Commercial vehicle lease and rental revenues increased $4.2 million, or 4.7%, in the third quarter of 2025, compared to the third quarter of 2024. This increase in commercial vehicle lease and rental revenues was primarily due to the in-service of new vehicles into the lease fleet, which was partially offset by lower rental fleet utilization.

Previous wording

Finance and insurance revenues decreased $0.4 million, or 6.5%, in the second quarter of 2025, compared to the second quarter of 2024. This decrease is primarily due to the decrease in new Class 8 truck sales and the tightening of credit for used trucks. Finance and insurance revenues have limited direct costs and, therefore, contribute a disproportionate share of our operating profits.

Current wording

Finance and insurance revenues decreased $0.2 million, or 3.5%, in the third quarter of 2025, compared to the third quarter of 2024. This decrease is primarily due to the decline in sales of new 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 wording

Gross profit decreased $12.7 million, or 3.2%, in the second quarter of 2025, compared to the second quarter of 2024. Gross profit as a percentage of sales increased to 19.7% in the second quarter of 2025, from 19.4% in the second quarter of 2024. 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 61.7% in the second quarter of 2025, from 64.1% in the second quarter of 2024. Aftermarket Products and Services revenues, a higher margin revenue item, increased as a percentage of total revenues to 33.0% in the second quarter of 2025, from 31.0% in the second quarter of 2024.

Current wording

Gross profit decreased $4.3 million, or 1.1%, in the third quarter of 2025, compared to the third quarter of 2024. Gross profit as a percentage of sales decreased to 19.9% in the third quarter of 2025, from 20.0% in the third quarter of 2024. This decrease in gross profit as a percentage of sales was primarily a result of a decrease in commercial vehicle margins, which was partially offset by an increase in aftermarket gross profit margins. Commercial vehicle sales, a lower margin revenue item, decreased as a percentage of total revenues to 60.3% in the third quarter of 2025, from 61.3% in the third quarter of 2024. Aftermarket Products and Services revenues, a higher margin revenue item, increased as a percentage of total revenues to 34.2% in the third quarter of 2025, from 33.4% in the third quarter of 2024. Although commercial vehicle sales typically carry lower gross margins, the volume of transactions has a material impact on overall gross profit.

Previous wording

Gross margins from our Aftermarket Products and Services operations increased to 37.6% in the second quarter of 2025, from 37.5% in the second quarter of 2024. Gross profit from our Aftermarket Products and Services operations increased to $239.2 million in the second quarter of 2025, from $235.3 million in the second quarter of 2024. 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 61.3% of total gross profit from Aftermarket Products and Services operations in the second quarter of 2025 and 58.4% in the second quarter of 2024. Service and collision center operations represented 38.7% of total gross profit from Aftermarket Products and Services operations in the second quarter of 2025 and 38.8% in the second quarter of 2024. We expect blended gross margins on Aftermarket Products and Services operations to range from 36.0% to 37.5% in 2025.

Current wording

Gross margins from our Aftermarket Products and Services operations increased to 37.2% in the third quarter of 2025, from 36.8% in the third quarter of 2024. Gross profit for the Aftermarket Products and Services departments increased to $238.9 million in the third quarter of 2025, from $233.1 million in the third quarter of 2024. 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 56.7% of total gross profit for Aftermarket Products and Services operations in the third quarter of 2025 and 57.5% in the third quarter of 2024. Service and collision center operations represented 43.3% of total gross profit for Aftermarket Products and Services operations in the third quarter of 2025 and 42.5% in the third quarter of 2024. We expect blended gross margins on Aftermarket Products and Services operations to range from 36.5% to 37.0% in 2025.

Previous wording

Gross margins on new Class 4 through 7 commercial vehicle sales decreased to 7.5% in the second quarter of 2025, from 8.4% in the second quarter of 2024. This decrease was primarily due to change in the mix of purchasers. For 2025, we expect overall gross margins from new medium-duty commercial vehicle sales of approximately 7.5% to 8.5%, 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 8.1% in the third quarter of 2025, from 10.3% in the third quarter of 2024. The decrease in new Class 4 through 7 truck margins was primarily due to change in our product sales mix and challenging market conditions. For 2025, we expect overall gross margins from new medium-duty commercial vehicle sales of approximately 7.8% 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 decreased to 16.9% in the second quarter of 2025, from 19.2% in the second quarter of 2024. This decrease was primarily due to the mix of purchasers. We expect margins on used commercial vehicles to range between 12.0% and 17.0% in 2025.

Current wording

Gross margins on used commercial vehicle sales decreased to 10.9% in the third quarter of 2025, from 18.0% in the third quarter of 2024. This decrease was primarily due to a change in the mix of wholesale versus retail sales. We expect margins on used commercial vehicles to range between 10.0% and 13.0%.

Previous wording

Gross margins from truck lease and rental sales increased to 28.7% in the second quarter of 2025, from 28.5% in the second quarter of 2024. This increase was primarily related to decreased maintenance costs due to a lower average age of the leasing fleet. 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 wording

Gross margins from truck lease and rental sales decreased to 28.2% in the third quarter of 2025, from 28.6% in the third quarter of 2024. We expect gross margins from lease and rental sales of approximately 27.0% to 29.0% during 2025. This decrease was primarily due to a decrease in rental utilization.

Previous wording

Selling, General and Administrative (“SG&A”) expenses increased $0.6 million, or 0.2%, in the second quarter of 2025, compared to the second quarter of 2024. SG&A expenses as a percentage of total revenues increased to 13.1% in the second quarter of 2025, from 12.4% in the second 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.

Current wording

Selling, General and Administrative (“SG&A”) expenses increased $16.7 million, or 12.6%, in the third quarter of 2025, compared to the third quarter of 2024. SG&A expenses as a percentage of total revenues increased to 13.6% in the third quarter of 2025, from 12.6% in the third 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 the third quarter of 2025, the Company’s SG&A expenses were higher than normal, due in part to increased accruals with respect to pending litigation matters and recent increases in insurance retentions. 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

Net interest expense decreased $6.7 million, or 34.6%, in the second quarter of 2025, compared to the second quarter of 2024. This decrease in interest expense is a result of a decrease in our vehicle inventory levels and lower interest rates on our variable rate debt compared to the second 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 wording

Net interest expense decreased $5.9 million, or 33.7%, in the third quarter of 2025, compared to the third quarter of 2024. This decrease in interest expense is a result of a decrease in our vehicle inventory levels, lower debt levels and lower interest rates on our variable rate debt compared to the third 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.

Previous wording

As a result of the factors described above, income before income taxes decreased $8.0 million, or 7.6%, in the second quarter of 2025, compared to the second quarter of 2024.

Current wording

As a result of the factors described above, income before income taxes decreased $15.4 million, or 14.9%, in the third quarter of 2025, compared to the third quarter of 2024.

Previous wording

Income taxes decreased $2.2 million, or 8.2%, in the second quarter of 2025, compared to the second quarter of 2024. We provided for taxes at a 24.8% effective rate in the second quarter of 2025 and 24.5% in the second quarter of 2024. We expect our effective tax rate to be approximately 23.0% to 24.0% of pretax income in 2025.

Current wording

Income taxes decreased $3.7 million, or 15.5%, in the third quarter of 2025, compared to the third quarter of 2024. We provided for taxes at a 22.9% effective rate in the third quarter of 2025 compared to 23.0% in the third quarter of 2024. We expect our effective tax rate to be approximately 22.5% to 24.0% of pretax income in 2025.

Previous wording

Unless otherwise stated below, our variance explanations and future expectations with regards to the items discussed in this section are set forth in the discussion of the “Three Months Ended June 30, 2025, Compared to Three Months Ended June 30, 2024.”

Current wording

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, 2025 Compared to Three Months Ended September 30, 2024.

Previous wording

We sold 6,481 new Class 8 heavy-duty trucks in the first six months of 2025 in the United States, a 14.3% decrease compared to 7,622 new Class 8 heavy-duty trucks in the first six months of 2024. According to A.C.T. Research, retail sales in the U.S. Class 8 truck market decreased 4.8% in the first six months of 2025, compared to the first six months of 2024. We sold 149 new Class 8 heavy-duty trucks in the first six months of 2025 in Canada, a 35.5% decrease compared to 231 new Class 8 heavy-duty trucks in the first six months of 2024.

Current wording

We sold 9,452 new Class 8 heavy-duty vehicles in the United States during the first nine months of 2025, a 13.2% decrease compared to 10,895 new Class 8 heavy-duty trucks in the first nine months of 2024. According to A.C.T. Research, new U.S. Class 8 truck sales decreased 10.0% in the first nine months of 2025, compared to the first nine months of 2024. We sold 244 new Class 8 heavy-duty trucks in the first nine months of 2025 in Canada, a 26.3% decrease compared to 331 new Class 8 heavy-duty trucks in the first nine months of 2024.

Previous wording

We sold 6,830 new Class 4 through 7 medium-duty commercial vehicles, including 669 buses, in the United States in the first six months of 2025. This result remained relatively flat compared to 6,829 new Class 4 through 7 medium-duty commercial vehicles, including 734 buses, in the first six months of 2024. A.C.T. Research estimates that unit sales of new Class 4 through 7 commercial vehicles in the U.S. decreased approximately 6.6% in the first six months of 2025, compared to the first six months of 2024. We sold 302 new Class 5 through 7 medium-duty commercial vehicles in the first six months of 2025 in Canada, a 56.5% increase compared to 193 new Class 5 through 7 medium-duty commercial vehicles in the first six months of 2024.

Current wording

We sold 9,809 new Class 4 through 7 medium-duty commercial vehicles in the United States, including 1,038 buses, during the first nine months of 2025, a 6.3% increase compared to 10,076 new Class 4 through 7 medium-duty commercial vehicles, including 922 buses, in the first nine months of 2024. A.C.T. Research estimates that unit sales of new Class 4 through 7 commercial vehicles, including buses, in the U.S decreased 7.2% in the first nine months of 2025, compared to the first nine months of 2024. We sold 750 new Class 5 through 7 medium-duty commercial vehicles, including 291 buses, during the first nine months of 2025 in Canada, a 130.8% increase compared to 325 new Class 5 through 7 medium-duty commercial vehicles in the first nine months of 2024.

Previous wording

Truck lease and rental revenues increased $7.8 million, or 4.4%, in the first six months of 2025, compared to the first six months of 2024.

Current wording

Truck lease and rental revenues increased $12.0 million, or 4.5%, in the first nine months of 2025, compared to the first nine months of 2024.

Previous wording

Gross profit decreased $44.8 million, or 5.7%, in the first six months of 2025, compared to the first six months of 2024. Gross profit as a percentage of sales was 19.5% in the first six months of 2025 and 20.1% in the first six months of 2024.

Current wording

Gross profit decreased $49.1 million, or 4.2%, in the first nine months of 2025, compared to the first nine months of 2024. Gross profit as a percentage of sales decreased to 19.6% in the first nine months of 2025, from 20.0% in the first nine months of 2024.

Previous wording

Gross margins from Aftermarket Products and Services operations decreased to 36.7% in the first six months of 2025, from 37.0% in the first six months of 2024. Gross profit for Aftermarket Products and Services was $460.6 million in the first six months of 2025, compared to $472.2 million in the first six months of 2024. Gross profit from parts sales represented 59.0% of the total gross profit for Aftermarket Products and Services operations in the first six months of 2025 and 58.1% in the first six months of 2024. Service and collision center operations represented 41.0% of the total gross profit for Aftermarket Products and Services operations in the first six months of 2025 and 41.9% in the first six months of 2024.

Current wording

Gross margins from our Aftermarket Products and Services operations remained flat at 36.9% in the first nine months of 2025, compared to the first nine months of 2024. Gross profit for the Aftermarket Products and Services departments was $699.4 million in the first nine months of 2025, compared to $705.3 million in the first nine months of 2024. Gross profits from parts sales represented 59.1% of total gross profit for Aftermarket Products and Services operations in the first nine months of 2025 and 57.9% in the first nine months of 2024. Service and collision center operations represented 40.9% of total gross profit for Aftermarket Products and Services operations in the first nine months of 2025 and 42.1% in the first nine months of 2024.

Previous wording

Gross margins on new Class 8 heavy-duty truck sales decreased to 8.8% in the first six months of 2025, from 9.1% in the first six months of 2024.

Current wording

Gross margins on new Class 8 truck sales decreased to 8.9% in the first nine months of 2025, from 9.1% in the first nine months of 2024.

Previous wording

Gross margins on used commercial vehicle sales decreased to 15.7% in the first six months of 2025, from 20.5% in the first six months of 2024.

Current wording

Gross margins on used commercial vehicle sales decreased to 14.1% in the first nine months of 2025, from 19.7% in the first nine months of 2024.

Previous wording

Gross margins from truck lease and rental sales increased to 28.5% in the first six months of 2025, from 28.0% in the first six months of 2024.

Current wording

Gross margins from truck lease and rental sales remained flat at 28.2% in the first nine months of 2025, compared to the first nine months of 2024.

Previous wording

SG&A expenses decreased $14.2 million, or 2.8%, in the first six months of 2025, compared to the first six months of 2024. SG&A expenses remained flat at 13.2% of total revenue in the first six months of 2025, compared to 2024.

Current wording

SG&A expenses increased $2.4 million, or 0.3%, in the first nine months of 2025, compared to the first nine months of 2024. SG&A expenses equaled 13.4% of total revenue in the first nine months of 2025, compared to 13.0% in the first nine months of 2024.

Previous wording

Net interest expense decreased $11.8 million, or 31.6%, in the first six months of 2025, compared to the first six months of 2024.

Current wording

Net interest expense decreased $17.8 million, or 32.3%, in the first nine months of 2025, compared to the first nine months of 2024.

Previous wording

Income taxes decreased $5.5 million, or 11.6%, in the first six months of 2025, compared to the first six months of 2024. We provided for taxes at a 23.8% rate in the first six months of 2025 and a 24.1% rate in the first six months of 2024.

Current wording

Income taxes decreased $9.2 million in the first nine months of 2025, compared to the first nine months of 2024. We provided for taxes at a 23.6% rate in the first nine months of 2025 and a 23.0% rate in the first nine months of 2024.

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 June 30, 2025, we had working capital of approximately $694.8 million, including $211.1 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.

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 September 30, 2025, we had working capital of approximately $600.8 million, including $242.0 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 and cash equivalents 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.

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 June 30, 2025, however, $18.7 million was pledged to secure various letters of credit related to self-insurance products, leaving $6.3 million available for our future borrowings as of June 30, 2025.

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 September 30, 2025, however, $18.7 million was pledged to secure various letters of credit related to self-insurance products, leaving $6.3 million available for future borrowings as of September 30, 2025.

Previous wording

Certain of our long-term debt, floor plan financing agreements and our credit agreement with Wells Fargo Bank, National Association the (“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 June 30, 2025, we were in compliance with all debt covenants related to debt secured by lease and rental units, our floor plan credit agreements and the credit agreement with WF. We do not anticipate any breach of these covenants in the foreseeable future.

Current wording

Certain of our long-term debt, floor plan financing 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 September 30, 2025, we were in compliance with all debt covenants related to debt secured by lease and rental units, our floor plan credit agreements and the credit agreement with WF. We do not anticipate any breach of these covenants in the foreseeable future.

Previous wording

During the second quarter of 2025, we paid a cash dividend of $14.3 million. Additionally, on July 30, 2025, our Board of Directors declared a cash dividend of $0.19 per share of Class A and Class B common stock, to be paid on September 12, 2025, to all shareholders of record as of August 12, 2025, which represents a 5.6% increase compared to the cash dividend we paid in the first quarter of 2025. 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 third quarter of 2025, we paid a cash dividend of $14.8 million. Additionally, on October 29, 2025, our Board of Directors declared a cash dividend of $0.19 per share of Class A and Class B common stock, to be paid on December 12, 2025, to all shareholders of record as of November 12, 2025. 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.