RUSH ENTERPRISES INC \TX\

Previous wording

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Current wording

ITEM 2. Management**’s Discussion and Analysis of Financial Condition and Results of Operations.

Previous wording

Certain statements contained in this Form 10-Q (or otherwise made by the Company or on the Company’s behalf from time to time in other reports, filings with the Securities and Exchange Commission (“SEC”), news releases, conferences, website postings or otherwise)* that are not statements of historical fact constitute*“forward-looking statements”* within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the*“Securities Act”), and Section 21E of the Exchange Act of 1934, as amended (the“Exchange Act”), notwithstanding that such statements are not specifically identified. Forward-looking statements include statements about the Company’s financial position, business strategy and plans and objectives of management of the Company for future operations. These forward-looking statements reflect the best judgments of the Company about the future events and trends based on the beliefs of the Company’s management as well as assumptions made by and information currently available to the Company’s management. Use of the words“may,”* “should,” “continue,” “plan,” “potential,” “anticipate,” “believe,” “estimate,” “expect” and*“intend”* and words or phrases of similar import, as they relate to the Company or its subsidiaries or Company management, are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Forward-looking statements reflect our current view of the Company with respect to future events and are subject to risks and uncertainties that could cause actual results to differ materially from those in such statements. Please read Item 1A.“Risk Factors” in the Company*’s Annual Report on Form 10-K for the year ended December 31, 2025, for a discussion of certain of those risks. Other unknown or unpredictable factors could also have a material adverse effect on future results. Although the Company believes that its expectations are reasonable as of the date of this Form 10-Q, it can give no assurance that such expectations will prove to be correct. The Company does not intend to update or revise any forward-looking statements unless securities laws require it to do so, and the Company undertakes no obligation to publicly release any revisions to forward-looking statements, whether because of new information, future events or otherwise.

Current wording

Certain statements contained in this Form 10-Q (or otherwise made by the Company or on the Company’s behalf from time to time in other reports, filings with the Securities and Exchange Commission (“SEC”), news releases, conferences, website postings or otherwise) that are not statements of historical fact constitute“forward-looking statements”* within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the*“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the“Exchange Act”), notwithstanding that such statements are not specifically identified. Forward-looking statements include statements about the Company’s financial position, business strategy and plans and objectives of management of the Company for future operations. * These forward-looking statements reflect the best judgments of the Company about the future events and trends based on the beliefs of the Company*’s management as well as assumptions made by and information currently available to the Company’s management. * Use of the words*“may,”* “should,” “continue,” “plan,” “potential,” “anticipate,” “believe,” “estimate,” “expect” and*“intend”* and words or phrases of similar import, as they relate to the Company or its subsidiaries or Company management, are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.* * Forward-looking statements reflect our current view of the Company with respect to future events and are subject to risks and uncertainties that could cause actual results to differ materially from those in such statements. Please read Item 1A.“Risk Factors” in the Company*’s Annual Report on Form 10-K for the year ended December 31, 2025, for a discussion of certain of those risks. Other unknown or unpredictable factors could also have a material adverse effect on future results. * Although the Company believes that its expectations are reasonable as of the date of this Form 10-Q, it can give no assurance that such expectations will prove to be correct. The Company does not intend to update or revise any forward-looking statements unless securities laws require it to do so, and the Company undertakes no obligation to publicly release any revisions to forward-looking statements, whether because of new information, future events or otherwise.*

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. 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. 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. Cummins*®* is a registered trademark of Cummins, Inc. Carrier Transicold*® is a registered trademark of Carrier Corporation.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

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 160 franchised locations in 24 states. We own an 80% equity interest in Rush Truck Centres of Canada Limited (“RTC Canada”). RTC Canada currently owns and operates 17 International dealerships and 2 IC Bus dealerships in Ontario. RTC Canada also sells IC Buses in Quebec and the provinces of New Brunswick, Nova Scotia and Prince Edward Island. 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 160 Rush Truck Centers in 24 states. We own an 80% equity interest in Rush Truck Centres of Canada Limited (“RTC Canada”). RTC Canada currently owns and operates 17 International dealerships and 2 IC Bus dealership locations in Ontario. RTC Canada also sells IC Buses in Quebec and the provinces of New Brunswick, Nova Scotia and Prince Edward Island. 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

Our business strategy consists of providing solutions to the commercial vehicle industry through our network of commercial vehicle dealerships. We offer an integrated approach to meeting customer needs by providing service, parts and collision repairs in addition to new and used commercial vehicle sales and leasing, plus financial services, vehicle upfitting, CNG fuel systems through our joint venture with Cummins and vehicle telematics products. We intend to continue to implement our business strategy, reinforce customer loyalty and remain a market leader by continuing to develop our Rush Truck Centers as we expand our product offerings and extend our dealership network through strategic acquisitions of new locations and opening new dealerships in our existing areas of operation to enable us to better serve our customers.

Current wording

Our business strategy consists of providing solutions to the commercial vehicle industry through our network of commercial vehicle dealerships. We offer an integrated approach to meeting customer needs by providing service, parts and collision repairs in addition to new and used commercial vehicle sales and leasing, plus financial services, vehicle upfitting, vehicle telematics products, CNG fuel systems through our joint venture with Cummins, and refrigeration and auxiliary power units through our joint venture in MCT. We intend to continue to implement our business strategy, reinforce customer loyalty and remain a market leader by continuing to develop our Rush Truck Centers as we expand our product offerings and extend our dealership network through strategic acquisitions of new locations and opening new locations in our existing areas of operation to enable us to better serve our customers. We also intend to continue to grow by acquiring or investing in businesses that are adjacent to our commercial vehicle dealership business.

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 228,800 units in 2026, which would represent a 7.6% increase compared to 212,700 units in 2025. We believe that as freight markets continue to improve and our over-the-road customers maintain confidence in their business, demand for new Class 8 trucks will be stronger in the second half of the year. We expect our U.S. market share of new Class 8 truck sales to range between 6.1% and 6.5% in 2026 based on A.C.T. Research’s current forecast. This market share percentage would result in the sale of approximately 14,000 to 15,000 new Class 8 trucks in 2026. We expect to sell approximately 500 new Class 8 trucks in Canada in 2026.

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 229,400 units in 2026, which would represent a 7.9% increase compared to 212,700 units in 2025. While new Class 8 truck demand remains healthy, quoting and new order activity has slowed recently as the industry awaits the Environmental Protection Agency’s (“EPA”) final rules with respect to its model year 2027 emissions regulations. We expect that new Class 8 truck orders will normalize once customers have more information from both the EPA and manufacturers. We expect our U.S. market share of new Class 8 truck sales to range between 6.3% and 6.5% in 2026 based on A.C.T. Research’s current forecast. This market share percentage would result in the sale of approximately 14,500 to 15,000 new Class 8 trucks in 2026. We expect to sell approximately 450 new Class 8 trucks in Canada in 2026.

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 207,575 units in 2026, which would represent a 4.5% decrease compared to 217,412 units in 2025. We believe that most medium-duty customers will remain cautious in 2026 and will look to replace vehicles rather than expand their fleets, although we do expect demand for new Class 4 through 7 commercial vehicles to improve throughout the remainder of the year. We expect our U.S. market share of new Class 4 through 7 commercial vehicle sales to range between 5.3% and 5.8% in 2026 based on A.C.T. Research’s current forecast. This market share percentage would result in the sale of approximately 11,000 to 12,000 new Class 4 through 7 commercial vehicles in 2026. We expect to sell approximately 850 new Class 5 through 7 commercial vehicles in Canada in 2026.

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 218,575 units in 2026, which would represent a 0.5% increase compared to 217,472 units in 2025. We believe that demand for new medium-duty vehicles will remain stable for the remainder of the year, although production delays may impact the timing of deliveries. We expect our U.S. market share of new Class 4 through 7 commercial vehicle sales to range between 5.3% and 5.5% in 2026 based on A.C.T. Research’s current forecast. This market share percentage would result in the sale of approximately 11,500 to 12,000 new Class 4 through 7 commercial vehicles in 2026. We expect to sell approximately 1,000 new Class 5 through 7 commercial vehicles in Canada in 2026.

Previous wording

We expect to sell approximately 3,200 light-duty vehicles and approximately 7,500 used commercial vehicles in 2026, and we expect lease and rental revenue to increase approximately 2.5% during 2026, compared to 2025.

Current wording

We expect to sell approximately 3,500 light-duty vehicles and approximately 7,000 used commercial vehicles in 2026, and we expect lease and rental revenue to increase approximately 3.2% during 2026, compared to 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, 2026 and 2025.

Current wording

The following discussion and analysis includes our historical results of operations for the three months and nine months ended September 30, 2026 and 2025.

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 130.8% absorption ratio for the second quarter of 2026 compared to a 135.5% absorption ratio for the second quarter of 2025.

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 128.3% absorption ratio for the third quarter of 2026, compared to a 129.3% absorption ratio for the third quarter of 2025.

Previous wording

We sold 907 light-duty vehicles in the second quarter of 2026, a 29.0% increase compared to 703 light-duty vehicles sold in the second quarter of 2025. We sold 1,788 used commercial vehicles in the second quarter of 2026, a 4.3% increase compared to 1,715 used commercial vehicles sold in the second quarter of 2025.

Current wording

We sold 1,418 light-duty vehicles in the third quarter of 2026, a 65.3% increase compared to 858 light-duty vehicles sold in the third quarter of 2025. We sold 1,913 used commercial vehicles in the third quarter of 2026, a 5.5% increase compared to 1,814 used commercial vehicles in the third quarter of 2025.

Previous wording

Finance and insurance revenues increased $0.8 million, or 14.6%, in the second quarter of 2026, compared to the second quarter of 2025. Finance and insurance revenues have limited direct costs and, therefore, contribute a disproportionate share of our operating profits.

Current wording

Finance and insurance revenues increased $0.6 million, or 10.2%, in the third quarter of 2026, compared to the third quarter of 2025. Finance and insurance revenues have limited direct costs and, therefore, contribute a disproportionate share of our operating profits.

Previous wording

Gross profit decreased $18.0 million, or 4.7%, in the second quarter of 2026, compared to the second quarter of 2025. Gross profit as a percentage of sales decreased to 19.0% in the second quarter of 2026, from 19.7% in the second quarter of 2025. Overall gross profit margin decreased primarily due to an increase in trucks sales to large over-the-road fleet customers and aftermarket sales to our national account business versus small to mid-size customers. Commercial vehicle sales, a lower margin revenue item, decreased as a percentage of total revenues to 60.5% in the second quarter of 2026, from 61.7% in the second quarter of 2025. Aftermarket Products and Services revenues, a higher margin revenue item, increased as a percentage of total revenues to 34.0% in the second quarter of 2026, from 33.0% in the second quarter of 2025.

Current wording

Gross profit increased $12.2 million, or 3.3%, in the third quarter of 2026, compared to the third quarter of 2025. Gross profit as a percentage of sales decreased to 18.3% in the third quarter of 2026, from 19.9% in the third quarter of 2025. Overall gross profit margins decreased primarily due to an increase in truck sales to large over-the-road fleet customers and aftermarket sales to our national account customers. Commercial vehicle sales, a lower margin revenue item, increased as a percentage of total revenues to 62.7% in the third quarter of 2026, from 60.3% in the third quarter of 2025. Aftermarket Products and Services revenues, a higher margin revenue item, decreased as a percentage of total revenues to 32.2% in the third quarter of 2026, from 34.2% in the third quarter of 2025.

Previous wording

Gross margins from our Aftermarket Products and Services operations decreased to 35.9% in the second quarter of 2026, from 37.6% in the second quarter of 2025. The decrease was primarily a result of an increase in the percentage of sales to national account customers and a competitive pricing environment due to challenging industry conditions. Gross profit from our Aftermarket Products and Services operations decreased to $231.5 million in the second quarter of 2026, from $239.2 million in the second quarter of 2025. 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%. We expect blended gross margins on Aftermarket Products and Services operations to range from 35.5% to 37.5% in 2026.

Current wording

Gross margins from our Aftermarket Products and Services operations decreased to 35.8% in the third quarter of 2026, from 37.2% in the third quarter of 2025. The decrease was primarily a result of an increase in the percentage of sales to national account customers and a competitive pricing environment. Gross profit for the Aftermarket Products and Services departments increased to $243.1 million in the third quarter of 2026, from $238.9 million in the third quarter of 2025. 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%. We expect blended gross margins on Aftermarket Products and Services operations to range from 35.5% to 37.5% in 2026.

Previous wording

Gross margins on new Class 8 commercial vehicle sales decreased to 7.8% in the second quarter of 2026, from 8.5% in the second quarter of 2025. In 2026, we expect overall gross margins from new heavy-duty truck sales of approximately 8.0% to 9.0%.

Current wording

Gross margins on new Class 8 truck sales decreased to 7.2% in the third quarter of 2026, from 9.2% in the third quarter of 2025. The decrease was primarily a result of a change in customer mix. For 2026, we expect overall gross margins from new Class 8 truck sales of approximately 7.5% to 8.0%.

Previous wording

Gross margins on new Class 4 through 7 commercial vehicle sales decreased to 7.2% in the second quarter of 2026, from 7.5% in the second quarter of 2025. For 2026, 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.

Current wording

Gross margins on new Class 4 through 7 commercial vehicle sales decreased to 7.6% in the third quarter of 2026, from 8.1% in the third quarter of 2025. For 2026, we expect overall gross margins from new medium-duty commercial vehicle sales of approximately 7.5% to 8.0%, 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 13.7% in the second quarter of 2026, from 16.9% in the second quarter of 2025. 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 15.0% in 2026.

Current wording

Gross margins on used commercial vehicle sales increased to 14.9% in the third quarter of 2026, from 10.9% in the third quarter of 2025. We expect margins on used commercial vehicles to range between 12.0% and 15.0% in 2026. The increase was primarily a result of healthy demand and a change in sales mix to more retail customers.

Previous wording

Gross margins from truck lease and rental sales decreased to 28.5% in the second quarter of 2026, from 28.7% in the second quarter of 2025. We expect gross margins from lease and rental sales of approximately 27.0% to 29.0% during 2026.

Current wording

Gross margins from truck lease and rental sales increased to 29.0% in the third quarter of 2026, from 27.7% in the third quarter of 2025. We expect gross margins from lease and rental sales of approximately 28.0% to 30.0% during 2026.

Previous wording

Selling, General and Administrative (“SG&A”) expenses decreased $6.5 million, or 2.6%, in the second quarter of 2026, compared to the second quarter of 2025. SG&A expenses as a percentage of total revenues decreased to 12.9% in the second quarter of 2026, from 13.1% in the second quarter of 2025. The decrease was primarily the result of our ongoing efforts to control operating expenses. Annual SG&A expenses as a percentage of total revenues have ranged from approximately 12.4% to 14.4% over the last five years. For 2026, we expect SG&A expenses as a percentage of total revenues to range from 13.0% to 14.0%. For 2026, 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 $3.6 million, or 1.4%, in the third quarter of 2026, compared to the third quarter of 2025. SG&A expenses as a percentage of total revenues decreased to 12.3% in the third quarter of 2026, from 13.6% in the third quarter of 2025. Annual SG&A expenses as a percentage of total revenues have ranged from approximately 12.4% to 14.4% over the last five years. For 2026, we expect SG&A expenses as a percentage of total revenues to range from 13.0% to 14.0%. For 2026, 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 $8.3 million, or 65.6%, in the second quarter of 2026, compared to the second quarter of 2025. We expect net interest expense in 2026 to decrease compared to 2025, but the amount of the change 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 $6.0 million, or 50.8%, in the third quarter of 2026, compared to the third quarter of 2025. We expect net interest expense in 2026 to decrease compared to 2025, but the amount of the change 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 $4.8 million, or 5.0%, in the second quarter of 2026, compared to the second quarter of 2025.

Current wording

As a result of the factors described above, income before income taxes increased $14.5 million, or 16.5%, in the third quarter of 2026, compared to the third quarter of 2025.

Previous wording

Income taxes decreased $4.9 million, or 20.2%, in the second quarter of 2026, compared to the second quarter of 2025. We provided for taxes at a 20.9% effective rate in the second quarter of 2026 and 24.8% in the second quarter of 2025. We expect our effective tax rate to be approximately 21.0% to 23.0% of pretax income in 2026.

Current wording

Income taxes increased $3.4 million, or 16.9%, in the third quarter of 2026, compared to the third quarter of 2025. We provided for taxes at a 23.0% effective rate in the third quarter of 2026 compared to 22.9% in the third quarter of 2025. We expect our effective tax rate to be approximately 22.0% to 23.0% of pretax income in 2026.

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, 2026, Compared to Three Months Ended June 30, 2025.”

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, 2026 Compared to Three Months Ended September 30, 2025.

Previous wording

We sold 6,136 new Class 8 heavy-duty trucks in the first six months of 2026 in the United States, a 3.1% decrease compared to 6,332 new Class 8 heavy-duty trucks in the first six months of 2025. According to A.C.T. Research, retail sales in the new U.S. Class 8 truck market decreased 13.4% in the first six months of 2026, compared to the first six months of 2025. We sold 188 new Class 8 heavy-duty trucks in the first six months of 2026 in Canada, a 26.2% increase compared to 149 new Class 8 heavy-duty trucks in the first six months of 2025.

Current wording

We sold 10,016 new Class 8 heavy-duty vehicles in the United States during the first nine months of 2026, a 6.0% increase compared to 9,452 new Class 8 heavy-duty trucks in the first nine months of 2025. According to A.C.T. Research, new U.S. Class 8 truck sales decreased 5.6% in the first nine months of 2026, compared to the first nine months of 2025. We sold 302 new Class 8 heavy-duty trucks in the first nine months of 2026 in Canada, a 23.8% increase compared to 244 new Class 8 heavy-duty trucks in the first nine months of 2025.

Previous wording

We sold 5,200 new Class 4 through 7 medium-duty commercial vehicles, including 545 buses, in the United States, a 23.9% decrease compared to 6,830 new Class 4 through 7 medium-duty commercial vehicles, including 669 buses, in the first six months of 2025. A.C.T. Research estimates that unit sales of new Class 4 through 7 commercial vehicles in the U.S. decreased approximately 9.4% in the first six months of 2026, compared to the first six months of 2025. We sold 351 new Class 5 through 7 medium-duty commercial vehicles, including 172 buses, in Canada, a 16.2% increase compared to 302 new Class 5 through 7 medium-duty commercial vehicles, including 1 bus, in the first six months of 2025.

Current wording

We sold 8,465 new Class 4 through 7 medium-duty commercial vehicles in the United States, including 892 buses, during the first nine months of 2026, a 13.7% decrease compared to 9,809 new Class 4 through 7 medium-duty commercial vehicles, including 1,038 buses, in the first nine months of 2025. A.C.T. Research estimates that unit sales of new Class 4 through 7 commercial vehicles, including buses, in the U.S. decreased 6.2% in the first nine months of 2026, compared to the first nine months of 2025. We sold 905 new Class 5 through 7 medium-duty commercial vehicles, including 607 buses, during the first nine months of 2026 in Canada, a 20.7% increase compared to 750 new Class 5 through 7 medium-duty commercial vehicles, including 291 buses, in the first nine months of 2025.

Previous wording

Truck lease and rental revenues increased $3.7 million, or 2.0%, in the first six months of 2026, compared to the first six months of 2025.

Current wording

Truck lease and rental revenues increased $8.6 million, or 3.1%, in the first nine months of 2026, compared to the first nine months of 2025.

Previous wording

Gross profit decreased $32.0 million, or 4.3%, in the first six months of 2026, compared to the first six months of 2025. Gross profit as a percentage of sales was 19.7% in the first six months of 2026 and 19.5% in the first six months of 2025.

Current wording

Gross profit decreased $19.7 million, or 1.8%, in the first nine months of 2026, compared to the first nine months of 2025. Gross profit as a percentage of sales decreased to 19.2% in the first nine months of 2026, from 19.6% in the first nine months of 2025.

Previous wording

Gross margins on used commercial vehicle sales decreased to 12.9% in the first six months of 2026, from 15.7% in the first six months of 2025.

Current wording

Gross margins on used commercial vehicle sales decreased to 13.6% in the first nine months of 2026, from 14.1% in the first nine months of 2025.

Previous wording

Gross margins from truck lease and rental sales decreased to 28.1% in the first six months of 2026, from 28.5% in the first six months of 2025.

Current wording

Gross margins from truck lease and rental sales increased to 28.4% in the first nine months of 2026, from 28.2% in the first nine months of 2025.

Previous wording

SG&A expenses decreased $12.7 million, or 2.5%, in the first six months of 2026, compared to the first six months of 2025. SG&A expenses were 13.6% of total revenue in the first six months of 2026, compared to 13.2% in the first six months of 2025.

Current wording

SG&A expenses decreased $9.1 million, or 1.2%, in the first nine months of 2026, compared to the first nine months of 2025. SG&A expenses equaled 13.1% of total revenue in the first nine months of 2026, compared to 13.4% in the first nine months of 2025.

Previous wording

Net interest expense decreased $14.9 million, or 58.0%, in the first six months of 2026, compared to the first six months of 2025.

Current wording

Net interest expense decreased $20.8 million, or 55.8%, in the first nine months of 2026, compared to the first nine months of 2025.

Previous wording

Income taxes decreased $9.1 million, or 21.6%, in the first six months of 2026, compared to the first six months of 2025. We provided for taxes at a 19.7% rate in the first six months of 2026 and a 23.8% rate in the first six months of 2025.

Current wording

Income taxes decreased $5.7 million in the first nine months of 2026, compared to the first nine months of 2025. We provided for taxes at a 20.9% rate in the first nine months of 2026 and a 23.6% rate in the first nine months of 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 financing. As of June 30, 2026, we had working capital of approximately $710.7 million, including $264.9 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, 2026, we had working capital of approximately $713.2 million, including $226.4 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, 2026, however, $18.6 million was pledged to secure various letters of credit related to self-insurance products, leaving $6.4 million available for our future borrowings as of June 30, 2026.

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, 2026, however, $19.7 million was pledged to secure various letters of credit related to self-insurance products, leaving $5.3 million available for future borrowings as of September 30, 2026.

Previous wording

Our floor plan credit agreement with BMO Bank N.A. (“BMO Bank”), and the lenders signatory thereto 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 June 30, 2026, we were in compliance with all debt covenants related to our floor plan credit agreement with BMO Bank and our credit agreement with WF. We do not anticipate any breach of these covenants in the foreseeable future.

Current wording

Our floor plan credit agreement with BMO Bank N.A. (“BMO Bank”), and the lenders signatory thereto 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, 2026, we were compliant with all debt covenants related to our floor plan credit agreement with BMO Bank 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 $275.0 million to $325.0 million for our leasing operations during 2026, 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 2026.

Current wording

We expect to purchase or lease commercial vehicles worth approximately $300.0 million to $325.0 million for our leasing operations during 2026, 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 2026.

Previous wording

During the second quarter of 2026, we paid a cash dividend of $14.8 million. On July 28, 2026, the Company’s Board of Directors declared a three-for-two stock split with respect to both the Company’s Class A and Class B common stock. The stock split will be effected in the form of a stock dividend payable on August 31, 2026, to shareholders of record as of August 11, 2026. Holders of the Company’s common stock will receive an additional one-half share for each share of common stock held as of the record date. Additionally, on July 28, 2026, our Board of Directors declared a cash dividend of $0.14 per share of Class A and Class B common stock, to be paid on September 24, 2026, to all shareholders of record as of September 9, 2026, which on a post-stock split basis represents a 10.5% increase compared to the cash dividend we paid in the first quarter of 2026. The total dividend disbursement is estimated at approximately $16.3 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.

Current wording

During the third quarter of 2026, we paid a cash dividend of $16.4 million. Additionally, on October 27, 2026, our Board of Directors declared a cash dividend of $0.14 per share of Class A and Class B common stock, to be paid on December 10, 2026, to all shareholders of record as of November 11, 2026. 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 3, 2025, 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, 2025. Repurchases, if any, are made at times and in amounts 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 June 30, 2026, we had repurchased $5.5 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, 2026, and may be suspended or discontinued at any time.

Current wording

On December 3, 2025, 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, 2025. Repurchases, if any, are made at times and in amounts 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, 2026, we had repurchased $15.8 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, 2026, and may be suspended or discontinued at any time.