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Truck dealership Rush Enterprises Inc. said its net profit more than doubled in the first quarter as revenue rose 27% from a year earlier. Both were first-quarter records.
Net income for the period ended March 31 climbed to $92.5 million, or $1.60 per diluted share, from net income of $45.3 million, 79 cents, a year earlier.
Revenues reached $1.5 billion compared to $1.2 billion for the 2021 period.
“Our results were primarily driven by the continued strength of the economy and healthy consumer spending for much of the quarter,” Chairman and CEO WM “Rusty” Rush said in a statement.
“Currently, the economy remains healthy and there continues to be pent-up demand for new commercial vehicles and aftermarket services due to last year’s supply constraints,” he said. “These factors are expected to have a positive impact on commercial vehicle and aftermarket sales throughout 2022.”
On January 3, Cummins Inc. and Company completed Cummins’ acquisition of a 50% interest in Momentum Fuel Technologies resulting in a gain of $12.5 million. Rush also acquired 19 dealerships from The Summit Truck Group in the fourth quarter of 2021, which helped boost Rush’s first quarter results, as did its aftermarket segment.
On the other hand. Rush noted that high fuel prices are starting to have a negative impact on spot market rates and he thinks inflation and rising interest rates could start to reduce consumer spending and capital spending. in a variety of industries supported by Rush.
Aftermarket products and services accounted for 61% of the company’s total gross profit in the first quarter of 2022, with parts, service and collision center revenue reaching $543.3 million, up 30, 7% from the first quarter of 2021, the San Antonio-based company noted. The company achieved a quarterly burn rate of 136.3% in the first quarter of 2022, compared to 122.6% in the first quarter of 2021.
The company said there was good parts and service activity, particularly in its waste, large national fleets and some energy customers.
Rush expanded its Xpress service, mobile service and contract maintenance offerings, “which contributed to our aftermarket revenue growth,” he added.
In the first quarter, the company expanded its network with Rush Truck Centers–Miami Northwest, which offers used truck parts and sales. “This new location strengthens our presence in a major trucking market and allows us to improve the support we provide to customers in Florida,” he said.
The company said it expects to reach an agreement in early May to acquire an additional 30% of Rush Truck Centers of Canada Limited, Canada’s largest international truck dealership, bringing total ownership of Rush Truck Centers of Canada to 80%. the business into Rush Truck Centers of Canada Limited. .
“We’ve been integrating all 15 Rush Truck Centers of Canada dealerships into our network since 2019, and we’re excited to expand our investment to further support cross-border transportation customers,” said Rush.
During the quarter, the company delivered 3,528 new heavy-duty trucks, 2,141 new medium-duty trucks, 481 new light-duty trucks and 2,395 used-duty trucks in the first quarter of 2022, compared to 2,995 new heavy-duty trucks, 2 334 new medium commercial vehicles, 395 new light commercial vehicles and 1,924 used commercial vehicles during the first quarter of 2021.
The company owns and operates Rush Truck Centers, the largest network of commercial vehicle dealerships in North America, with 139 locations in 23 states, including 125 Rush Truck Center franchisees. These vehicle centers, strategically located in high traffic areas on or near major US highways, represent truck and bus manufacturers including Peterbilt, International, Hino, Isuzu, Ford, IC Bus and Blue Bird.