Rush Enterprises, Inc. (NASDAQ: RUSHA & RUSHB), which operates
the largest network of commercial vehicle dealerships in North
America, today announced that for the quarter ended September 30,
2019, the Company achieved revenues of $1.6 billion and net income
of $39.1 million, or $1.05 per diluted share, compared with
revenues of $1.38 billion and net income of $41.7 million, or $1.03
per diluted share, in the quarter ended September 30, 2018.
Additionally, the Company’s Board of Directors declared a cash
dividend of $0.13 per share of Class A and Class B Common Stock, to
be paid on December 10, 2019, to all shareholders of record as of
November 8, 2019.
“Robust activity in the commercial vehicle market and our
continued focus on our aftermarket strategic initiatives positively
contributed to our third quarter results,” said W.M. “Rusty” Rush,
Chairman, Chief Executive Officer and President of Rush
Enterprises, Inc. “We outpaced the commercial vehicle market
in both Class 8 and Class 4-7 sales, and our parts and services
sales remained strong,” Rush said.
“I sincerely thank our employees for providing superior service
to our customers while remaining focused on the successful
execution of our strategic initiatives,” said Rush.
Operations
Aftermarket Products and Services
Aftermarket products and services accounted for approximately 64.4%
of the Company's total gross profits in the third quarter, with
parts, service and collision center revenues reaching $454.8
million, up 6.5% compared to the third quarter of 2018. The
Company achieved a quarterly absorption ratio of 120% in the third
quarter of 2019.
“Considering the continued decline in demand from the energy
sector compared to last quarter and especially compared to the
third quarter of 2018, we are pleased with our strong aftermarket
performance this quarter. Our aftermarket products and
services revenue growth is once again a direct result of the
successful execution of our long-term aftermarket initiatives,
which include offering a broad portfolio of internal and
customer-facing technology solutions, a parts e-commerce platform,
expedited commercial vehicle service and continuing to add skilled
technicians to our network,” Rush noted.
“We expect industry demand for aftermarket products and services
to remain steady in the fourth quarter, subject to typical seasonal
softness through the winter months,” said Rush. “With continued
focus on our strategic growth initiatives, we expect our
aftermarket parts and service sales to outperform the market in the
fourth quarter of 2019 and for the full year 2020,” he added.
Truck SalesNew U.S. Class 8 retail truck sales
totaled 78,117 units in the third quarter, up 12% over the same
period last year, according to ACT Research. The Company sold
4,318 Class 8 trucks in the third quarter, an increase of 29.9%
compared to the third quarter of 2018, and accounted for 5.5% of
the new U.S. Class 8 truck market. ACT Research forecasts
U.S. retail sales for new Class 8 vehicles to be 277,300 units in
2019, an 8.4% increase compared to 2018.
“Our new Class 8 truck sales outpaced the industry in the third
quarter of 2019. Our strong performance was primarily the
result of solid activity from over-the-road fleets and vocational
customers,” Rush said. “However, we believe that we have
passed the peak of the current truck sales cycle and our fourth
quarter new Class 8 truck sales will be down compared to the third
quarter,” he added.
ACT projects new U.S. Class 8 retail sales to be 204,000 units
in 2020, down 26% from the 277,300 units forecast in 2019.
“Although 2020 will be a challenging year for new Class 8 truck
sales, we are focused on achieving every sale possible and believe
we are well-positioned to increase our Class 8 market share in
2020,” said Rush.
The Company sold 4,566 Class 4-7 medium-duty commercial vehicles
in the third quarter of 2019, an increase of 36% from the third
quarter of 2018, accounting for 6.5% of the total U.S. market and
significantly outpacing the industry. U.S. Class 4-7 retail
sales were 69,978 units in the third quarter of 2019, up 7.2% over
the third quarter of 2018. ACT Research forecasts U.S. retail
sales for Class 4-7 vehicles to reach 266,000 units in 2019, a 3%
increase over 2018.
“We are very pleased with another record-setting performance in
our Class 4-7 medium-duty commercial vehicle sales this quarter.
Continued strong demand from all of the medium-duty market
segments we support, and especially our rental and construction
customers, along with our robust inventory of Ready-to-Roll
medium-duty trucks across the country, positively impacted our
Class 4-7 results in the third quarter of 2019,” Rush said. “Due to
the timing of large fleet deliveries in the second and third
quarters of 2019, our Class 4-7 medium-duty sales may be down in
the fourth quarter of 2019, but we should still outpace the
industry for 2019,” he added. ACT projects U.S. Class 4-7
medium-duty sales to be 257,400 units in 2020, down 3.2% from the
266,000 units forecast for 2019. “We believe our Class 4-7
medium-duty commercial vehicle sales results in 2020 will be on
pace with the market,” said Rush.
The Company sold 1,868 used vehicles in the third quarter of
2019, a 15% decrease compared to the third quarter of 2018.
“Near record high deliveries of new trucks over the past few
years have caused an oversupply of used trucks in the market.
Currently, we believe that used truck values are depreciating
faster than what is considered a normal rate. We are closely
monitoring used truck values, along with other market factors that
affect used truck sales. Our used truck inventory unit
count is currently at its lowest point of 2019, and we believe it
is valued appropriately with respect to current market conditions,”
Rush explained.
Financial Highlights
In the third quarter of 2019, the Company’s gross revenues
totaled $1.60 billion, a 16.2% increase from gross revenues of
$1.38 billion reported for the third quarter of 2018. Net
income for the third quarter was $39.1 million, or $1.05 per
diluted share, compared to net income of $41.7 million, or $1.03
per diluted share, in the third quarter of 2018.
Parts, service and collision center revenues were $454.8 million
in the third quarter of 2019, compared to $426.8 million in the
third quarter of 2018. The Company delivered 4,318 new
heavy-duty trucks, 4,566 new medium-duty commercial vehicles, 525
new light-duty commercial vehicles and 1,868 used commercial
vehicles during the third quarter of 2019, compared to 3,325 new
heavy-duty trucks, 3,349 new medium-duty commercial vehicles, 567
new light-duty commercial vehicles and 2,197 used commercial
vehicles during the third quarter of 2018.
During the third quarter of 2019, the Company repurchased $16.1
million of its common stock, paid a cash dividend of $4.7 million
and ended the quarter with $86.1 million in cash and cash
equivalents.
“Our balance sheet remains strong, and we are confident in our
ability to invest in the Company’s future while returning capital
to shareholders,” said
Rush.
Conference Call
Information
Rush Enterprises will host its quarterly conference call to
discuss earnings for the third quarter on Thursday, October
24, 2019, at 10 a.m. Eastern/9 a.m. Central. The
call can be heard live by dialing 877-638-4557 (US) or
914-495-8522 (International), Conference ID
3181958 or via the Internet at
http://investor.rushenterprises.com/events.cfm.
For those who cannot listen to the live broadcast, the webcast
will be available on our website at the above link until January
15, 2020. Listen to the audio replay until October 31, 2019,
by dialing 855-859-2056 (US) or 404-537-3406
(International) and entering the Conference ID
3181958.
About Rush Enterprises,
Inc.Rush Enterprises, Inc. is the premier
solutions provider to the commercial vehicle industry. The Company
owns and operates Rush Truck Centers, the largest network of
commercial vehicle dealerships in North America, with more than 100
dealership locations in 22 states. These vehicle centers,
strategically located in high traffic areas on or near major
highways throughout the United States, represent truck and bus
manufacturers, including Peterbilt, International, Hino, Isuzu,
Ford, Mitsubishi, IC Bus and Blue Bird. They offer an integrated
approach to meeting customer needs — from sales of new and used
vehicles to aftermarket parts, service and collision center
operations plus financing, insurance, leasing and rental. Rush
Enterprises' operations also provide vehicle upfitting, CNG fuel
systems and vehicle telematics products. Additional information
about Rush Enterprises’ products and services is available at
www.rushenterprises.com. Follow our news on Twitter at
@rushtruckcenter and on Facebook at
facebook.com/rushtruckcenters.
Certain statements contained herein, including
those concerning current and projected market conditions, sales
forecasts, market share forecasts, demand for the Company’s
services, the impact of strategic initiatives and the Company’s
capital allocation strategy, including future issuances of cash
dividends and future repurchases of the Company’s common stock, are
“forward-looking” statements (as such term is defined in the
Private Securities Litigation Reform Act of 1995). Because such
statements include risks and uncertainties, actual results may
differ materially from those expressed or implied by such
forward-looking statements. Important factors that could cause
actual results to differ materially from those expressed or implied
by such forward-looking statements include, but are not limited to,
competitive factors, general U.S. economic conditions, economic
conditions in the new and used commercial vehicle markets, customer
relations, relationships with vendors, the interest rate
environment, governmental regulation and supervision, product
introductions and acceptance, changes in industry practices,
one-time events and other factors described herein and in filings
made by the Company with the Securities and Exchange Commission. In
addition, the declaration and payment of cash dividends and
authorization of future share repurchase programs remains at the
sole discretion of the Company’s Board of Directors and the
issuance of future dividends and authorization of future share
repurchase programs will depend upon the Company’s financial
results, cash requirements, future prospects, applicable law and
other factors that may be deemed relevant by the Company’s Board of
Directors.
RUSH ENTERPRISES, INC. AND SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
(In Thousands, Except Shares and Per Share Amounts) |
|
|
September 30, |
|
December 31, |
|
|
2019 |
|
|
|
2018 |
|
|
(Unaudited) |
|
|
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
86,117 |
|
|
$ |
131,726 |
|
Accounts receivable, net |
|
220,378 |
|
|
|
190,650 |
|
Note receivable affiliate |
|
12,310 |
|
|
|
12,885 |
|
Inventories, net |
|
1,385,132 |
|
|
|
1,339,923 |
|
Prepaid expenses and other |
|
24,419 |
|
|
|
10,491 |
|
Assets held for sale |
|
419 |
|
|
|
2,269 |
|
Total current assets |
|
1,728,775 |
|
|
|
1,687,944 |
|
Property and equipment,
net |
|
1,261,370 |
|
|
|
1,184,053 |
|
Operating lease right-of-use
assets, net |
|
56,372 |
|
|
|
– |
|
Goodwill, net |
|
292,142 |
|
|
|
291,391 |
|
Other assets, net |
|
66,595 |
|
|
|
37,962 |
|
Total
assets |
$ |
3,405,254 |
|
|
$ |
3,201,350 |
|
|
|
|
|
Liabilities and shareholders’ equity |
|
|
|
Current liabilities: |
|
|
|
Floor plan notes payable |
$ |
1,051,241 |
|
|
$ |
1,023,019 |
|
Current maturities of long-term debt |
|
158,722 |
|
|
|
161,955 |
|
Current maturities of finance lease obligations |
|
20,995 |
|
|
|
19,631 |
|
Current maturities of operating lease obligations |
|
9,787 |
|
|
|
– |
|
Trade accounts payable |
|
137,781 |
|
|
|
127,451 |
|
Customer deposits |
|
33,553 |
|
|
|
36,183 |
|
Accrued expenses |
|
106,768 |
|
|
|
125,056 |
|
Total current liabilities |
|
1,518,847 |
|
|
|
1,493,295 |
|
Long-term debt, net of current
maturities |
|
462,646 |
|
|
|
439,218 |
|
Finance lease obligations, net
of current maturities |
|
57,077 |
|
|
|
49,483 |
|
Operating lease obligations,
net of current maturities |
|
46,899 |
|
|
|
– |
|
Other long-term
liabilities |
|
19,621 |
|
|
|
11,118 |
|
Deferred income taxes,
net |
|
162,911 |
|
|
|
141,308 |
|
Shareholders’ equity: |
|
|
|
Preferred stock, par value $.01 per share; 1,000,000 shares
authorized; 0 shares outstanding in 2019 and 2018 |
|
– |
|
|
|
– |
|
Common stock, par value $.01 per share; 60,000,000 Class A
shares and 20,000,000 Class B shares authorized; 27,806,319 Class A
shares and 8,283,916 Class B shares outstanding in 2019; and
28,709,636 Class A shares and 8,290,277 Class B shares outstanding
in 2018 |
|
463 |
|
|
|
458 |
|
Additional paid-in capital |
|
390,359 |
|
|
|
370,025 |
|
Treasury stock, at cost: 4,995,651 Class A shares and 5,262,911
Class B shares in 2019 and 3,791,751 Class A shares and 5,030,787
Class B shares in 2018 |
|
(300,041 |
) |
|
|
(245,842 |
) |
Retained earnings |
|
1,046,538 |
|
|
|
942,287 |
|
Accumulated other comprehensive income |
|
(66 |
) |
|
|
– |
|
Total shareholders’ equity |
|
1,137,253 |
|
|
|
1,066,928 |
|
Total liabilities and
shareholders’ equity |
$ |
3,405,254 |
|
|
$ |
3,201,350 |
|
|
RUSH ENTERPRISES, INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF OPERATIONS |
(In Thousands, Except Per Share Amounts) |
(Unaudited) |
|
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
New and used commercial vehicle sales |
$ |
1,070,868 |
|
$ |
878,845 |
|
|
$ |
2,933,952 |
|
|
$ |
2,508,970 |
Aftermarket products and services sales |
|
454,785 |
|
|
426,845 |
|
|
|
1,341,305 |
|
|
|
1,250,080 |
Lease and rental |
|
62,949 |
|
|
60,825 |
|
|
|
183,973 |
|
|
|
177,342 |
Finance and insurance |
|
5,863 |
|
|
5,053 |
|
|
|
18,874 |
|
|
|
15,286 |
Other |
|
4,800 |
|
|
4,568 |
|
|
|
14,039 |
|
|
|
14,070 |
Total revenue |
|
1,599,265 |
|
|
1,376,136 |
|
|
|
4,492,143 |
|
|
|
3,965,748 |
Cost of products
sold: |
|
|
|
|
|
|
|
New and used commercial vehicle sales |
|
997,946 |
|
|
808,634 |
|
|
|
2,717,484 |
|
|
|
2,311,156 |
Aftermarket products and services sales |
|
284,328 |
|
|
268,521 |
|
|
|
830,153 |
|
|
|
788,148 |
Lease and rental |
|
52,223 |
|
|
49,924 |
|
|
|
153,316 |
|
|
|
147,015 |
Total cost of products sold |
|
1,334,497 |
|
|
1,127,079 |
|
|
|
3,700,953 |
|
|
|
3,246,319 |
Gross
profit |
|
264,768 |
|
|
249,057 |
|
|
|
791,190 |
|
|
|
719,429 |
Selling, general and
administrative expense |
|
192,482 |
|
|
177,405 |
|
|
|
573,644 |
|
|
|
527,729 |
Depreciation and amortization
expense |
|
14,033 |
|
|
12,794 |
|
|
|
40,552 |
|
|
|
57,395 |
Gain (loss) on sale of
assets |
|
70 |
|
|
(209 |
) |
|
|
(12 |
) |
|
|
159 |
Operating
income |
|
58,323 |
|
|
58,649 |
|
|
|
176,982 |
|
|
|
134,464 |
Other income |
|
1,577 |
|
|
– |
|
|
|
2,316 |
|
|
|
– |
Interest expense, net |
|
7,690 |
|
|
4,468 |
|
|
|
23,120 |
|
|
|
13,268 |
Income before
taxes |
|
52,210 |
|
|
54,181 |
|
|
|
156,178 |
|
|
|
121,196 |
Provision for income
taxes |
|
13,106 |
|
|
12,516 |
|
|
|
38,349 |
|
|
|
29,103 |
Net
income |
$ |
39,104 |
|
$ |
41,665 |
|
|
$ |
117,829 |
|
|
$ |
92,093 |
|
|
|
|
|
|
|
|
Earnings per common
share: |
|
|
|
|
|
|
|
Basic |
$ |
1.07 |
|
$ |
1.06 |
|
|
$ |
3.21 |
|
|
$ |
2.33 |
Diluted |
$ |
1.05 |
|
$ |
1.03 |
|
|
$ |
3.13 |
|
|
$ |
2.27 |
|
|
|
|
|
|
|
|
Weighted average
shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
36,545 |
|
|
39,309 |
|
|
|
36,744 |
|
|
|
39,480 |
Diluted |
|
37,351 |
|
|
40,388 |
|
|
|
37,625 |
|
|
|
40,635 |
|
|
|
|
|
|
|
|
Dividends declared per
common share |
$ |
0.13 |
|
$ |
0.12 |
|
|
$ |
0.37 |
|
|
$ |
0.12 |
This press release and the attached financial
tables contain certain non-GAAP financial measures as defined under
SEC rules, such as Adjusted net income, Adjusted total debt,
Adjusted net (cash) debt, EBITDA, Adjusted EBITDA, Free cash flow,
Adjusted free cash flow and Adjusted invested capital, which
exclude certain items disclosed in the attached financial
tables. The Company provides reconciliations of these
measures to the most directly comparable GAAP measures.
Management believes the presentation of these
non-GAAP financial measures provides useful information about the
results of operations of the Company for the current and past
periods. Management believes that investors should have the
same information available to them that management uses to assess
the Company’s operating performance and capital structure.
These non-GAAP financial measures should not be considered in
isolation or as a substitute for the most comparable GAAP financial
measures. Investors are cautioned that non-GAAP financial
measures utilized by the Company may not be comparable to similarly
titled non-GAAP financial measures used by other companies.
|
|
|
|
|
Three Months Ended |
Vehicle Sales Revenue (in
thousands) |
|
September 30,2019 |
|
September 30, 2018 |
New heavy-duty vehicles |
|
$ |
605,675 |
|
|
$ |
501,478 |
|
New medium-duty vehicles
(including bus sales revenue) |
|
|
357,005 |
|
|
|
252,288 |
|
New light-duty vehicles |
|
|
21,538 |
|
|
|
22,434 |
|
Used vehicles |
|
|
80,405 |
|
|
|
97,587 |
|
Other vehicles |
|
|
6,245 |
|
|
|
5,058 |
|
|
|
|
|
|
Absorption
Ratio |
|
|
120.0 |
% |
|
|
122.4 |
% |
Absorption Ratio
Management uses several performance metrics to
evaluate the performance of its commercial vehicle dealerships and
considers Rush Truck Centers’ “absorption ratio” to be of critical
importance. Absorption ratio is calculated by dividing the
gross profit from the parts, service and collision center
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, then gross profit from the sale of a commercial vehicle,
after sales commissions and inventory carrying costs, directly
impacts operating profit.
This earnings release includes “adjusted net
income (non-GAAP)” and “adjusted net income per diluted share
(non-GAAP),” which are financial measures that are not in
accordance with U.S. generally accepted accounting principles,
since they exclude the charges related to the upgrade and
replacement of certain components of the Company’s Enterprise
Resource Planning software platform (ERP platform) in the second
quarter of 2018. These measures differ from the most directly
comparable measures calculated in accordance with GAAP and may not
be comparable to similarly titled non-GAAP financial measures used
by other companies. Reconciliations from the most directly
comparable GAAP measures of adjusted net income (non-GAAP) and
adjusted net income per diluted share (non-GAAP) are as
follows:
|
|
|
|
|
Nine Months Ended |
Adjusted Net Income (in
thousands) |
|
September 30,2019 |
September 30,2018 |
Net Income |
|
$ |
117,829 |
$ |
92,093 |
Charges related to upgrade and
replacement of ERP platform, net of tax |
|
|
– |
|
15,682 |
Adjusted Net Income
(non-GAAP) |
|
$ |
117,829 |
$ |
107,775 |
|
|
|
|
Per Diluted Share |
|
|
|
Net Income |
|
$ |
3.13 |
$ |
2.27 |
Charges related to upgrade and
replacement of ERP platform, net of tax |
|
|
– |
|
0.38 |
Adjusted Net Income
(non-GAAP) |
|
$ |
3.13 |
$ |
2.65 |
|
|
|
|
Debt Analysis (in
thousands) |
|
September 30,2019 |
September 30,2018 |
Floor plan notes payable |
|
$ |
1,051,241 |
|
$ |
990,594 |
|
Current maturities of
long-term debt |
|
|
158,722 |
|
|
159,972 |
|
Current maturities of finance
lease obligations |
|
|
20,995 |
|
|
16,977 |
|
Long-term debt, net of current
maturities |
|
|
462,646 |
|
|
439,418 |
|
Finance lease obligations, net
of current maturities |
|
|
57,077 |
|
|
54,689 |
|
Total Debt
(GAAP) |
|
|
1,750,681 |
|
|
1,661,650 |
|
Adjustments: |
|
|
|
Debt related to lease & rental fleet |
|
|
(639,138 |
) |
|
(588,079 |
) |
Floor plan notes payable |
|
|
(1,051,241 |
) |
|
(990,594 |
) |
Adjusted Total Debt
(Non-GAAP) |
|
|
60,302 |
|
|
82,977 |
|
Adjustment: |
|
|
|
Cash and cash equivalents |
|
|
(86,117 |
) |
|
(205,569 |
) |
Adjusted Net (Cash)
Debt (Non-GAAP) |
|
$ |
(25,815 |
) |
$ |
(122,592 |
) |
Management uses “Adjusted Total Debt” to reflect
the Company’s estimated financial obligations less debt related to
lease and rental fleet (L&RFD) and floor plan notes payable
(FPNP), and “Adjusted Net (Cash) Debt” to present the amount of
Adjusted Total Debt net of cash and cash equivalents on the
Company’s balance sheet. The FPNP is used to finance the
Company’s new and used inventory, with its principal balance
changing daily as vehicles are purchased and sold and the sale
proceeds are used to repay the notes. Consequently, in
managing the business, management views the FPNP as interest
bearing accounts payable, representing the cost of acquiring the
vehicle that is then repaid when the vehicle is sold, as the
Company’s credit agreements require it to repay loans used to
purchase vehicles when such vehicles are sold. The Company’s
lease & rental fleet are fully financed and are either (i)
leased to customers under long-term lease arrangements or (ii), to
a lesser extent, dedicated to the Company’s rental business.
In both cases, the lease and rental payments received fully cover
the capital costs of the lease & rental fleet (i.e., the
interest expense on the borrowings used to acquire the vehicles and
the depreciation expense associated with the vehicles), plus a
profit margin for the Company. The Company believes excluding
the FPNP and L&RFD from the Company’s total debt for this
purpose provides management with supplemental information regarding
the Company’s capital structure and leverage profile and assists
investors in performing analysis that is consistent with financial
models developed by Company management and research analysts.
“Adjusted Total Debt” and “Adjusted Net (Cash) Debt” are both
non-GAAP financial measures and should be considered in addition
to, and not as a substitute for, the Company’s debt obligations, as
reported in the Company’s consolidated balance sheet in accordance
with U.S. GAAP. Additionally, these non-GAAP measures may
vary among companies and may not be comparable to similarly titled
non-GAAP measures used by other companies.
|
|
|
|
|
Twelve Months Ended |
EBITDA (in thousands) |
|
September 30,2019 |
September 30,2018 |
Net Income (GAAP) |
|
$ |
164,798 |
|
$ |
197,960 |
|
Provision (benefit) for income
taxes |
|
|
53,353 |
|
|
(42,341 |
) |
Interest expense |
|
|
29,534 |
|
|
16,862 |
|
Depreciation and
amortization |
|
|
53,646 |
|
|
70,090 |
|
(Gain) loss on sale of
assets |
|
|
(126 |
) |
|
22 |
|
EBITDA
(Non-GAAP) |
|
|
301,205 |
|
|
242,593 |
|
Adjustment: |
|
|
|
Interest expense associated with FPNP |
|
|
(28,174 |
) |
|
(15,021 |
) |
Adjusted EBITDA
(Non-GAAP) |
|
$ |
273,031 |
|
$ |
227,572 |
|
The Company presents EBITDA and Adjusted EBITDA,
for the twelve months ended each period presented, as additional
information about its operating results. The presentation of
Adjusted EBITDA that excludes the addition of interest expense
associated with FPNP to EBITDA is consistent with management’s
presentation of Adjusted Total Debt, in each case reflecting
management’s view of interest expense associated with the FPNP as
an operating expense of the Company, and to provide management with
supplemental information regarding operating results and to assist
investors in performing analysis that is consistent with financial
models developed by management and research analyst. “EBITDA”
and “Adjusted EBITDA” are both non-GAAP financial measures and
should be considered in addition to, and not as a substitute for,
net income of the Company, as reported in the Company’s
consolidated statements of income in accordance with U.S.
GAAP. Additionally, these non-GAAP measures may vary among
companies and may not be comparable to similarly titled non-GAAP
measures used by other companies.
|
|
|
|
|
Twelve Months Ended |
Free Cash Flow (in thousands) |
|
September 30,2019 |
September 30,2018 |
Net cash provided by operations (GAAP) |
|
$ |
233,962 |
|
$ |
185,485 |
|
Acquisition of property and
equipment |
|
|
(292,634 |
) |
|
(247,382 |
) |
Free cash flow
(Non-GAAP) |
|
|
(58,672 |
) |
|
(61,897 |
) |
Adjustments: |
|
|
|
Draws on floor plan financing, net |
|
|
85,697 |
|
|
203,135 |
|
Proceeds from L&RFD |
|
|
203,573 |
|
|
170,460 |
|
Principal payments on L&RFD |
|
|
(169,339 |
) |
|
(160,420 |
) |
Non-maintenance capital expenditures |
|
|
55,696 |
|
|
42,348 |
|
Adjusted Free Cash
Flow (Non-GAAP) |
|
$ |
116,955 |
|
$ |
193,626 |
|
“Free Cash Flow” and “Adjusted Free Cash Flow”
are key financial measures of the Company’s ability to generate
cash from operating its business. Free Cash Flow is
calculated by subtracting the acquisition of property and equipment
included in the Cash flows from investing activities from Net cash
provided by (used in) operating activities. For purposes of
deriving Adjusted Free Cash Flow from the Company’s operating cash
flow, Company management makes the following adjustments: (i) adds
back draws (or subtracts payments) on the floor plan financing that
are included in Cash flows from financing activities as their
purpose is to finance the vehicle inventory that is included in
Cash flows from operating activities; (ii) adds back proceeds from
notes payable related specifically to the financing of the lease
and rental fleet that are reflected in Cash flows from financing
activities; (iii) subtracts draws on floor plan financing, net and
proceeds from L&RFD related to business acquisition assets that
are included in Cash flows from investing activities; (iv)
subtracts principal payments on notes payable related specifically
to the financing of the lease and rental fleet that are included in
Cash flows from financing activities; and (v) adds back
non-maintenance capital expenditures that are for growth and
expansion (i.e. building of new dealership facilities) that are not
considered necessary to maintain the current level of cash
generated by the business. “Free Cash Flow” and “Adjusted
Free Cash Flow” are both presented so that investors have the same
financial data that management uses in evaluating the Company’s
cash flows from operating activities. “Free Cash Flow” and
“Adjusted Free Cash Flow” are both non-GAAP financial measures and
should be considered in addition to, and not as a substitute for,
net cash provided by (used in) operations of the Company, as
reported in the Company’s consolidated statement of cash flows in
accordance with U.S. GAAP. Additionally, these non-GAAP
measures may vary among companies and may not be comparable to
similarly titled non-GAAP measures used by other
companies.
|
|
|
|
Invested Capital (in thousands) |
|
September 30,2019 |
September 30,2018 |
Total Shareholders' equity (GAAP) |
|
$ |
1,137,253 |
|
$ |
1,089,159 |
|
Adjusted net (cash)
(Non-GAAP) |
|
|
(25,815 |
) |
|
(122,592 |
) |
Adjusted Invested
Capital (Non-GAAP) |
|
$ |
1,111,438 |
|
$ |
966,567 |
|
“Adjusted Invested Capital” is a key financial
measure used by the Company to calculate its return on invested
capital. For purposes of this analysis, management excludes
L&RFD, FPNP, and cash and cash equivalents, for the reasons
provided in the debt analysis above and uses Adjusted Net Debt in
the calculation. The Company believes this approach provides
management a more accurate picture of the Company’s leverage
profile and capital structure, and assists investors in performing
analysis that is consistent with financial models developed by
Company management and research analysts. “Adjusted Net
(Cash) Debt” and “Adjusted Invested Capital” are both non-GAAP
financial measures. Additionally, these non-GAAP measures may
vary among companies and may not be comparable to similarly titled
non-GAAP measures used by other companies.
Contact:
Rush Enterprises, Inc., San Antonio Steven L. Keller,
830-302-5226
Rush Enterprises (NASDAQ:RUSHA)
Historical Stock Chart
From Aug 2024 to Sep 2024
Rush Enterprises (NASDAQ:RUSHA)
Historical Stock Chart
From Sep 2023 to Sep 2024