Rush Enterprises Q3 2025 Earnings Call - Navigating a Prolonged Freight Recession and Industry Headwinds

Conference Operator: Ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to the Rush Enterprises, Inc. third quarter 2025 earnings results. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press STAR followed by the number one on your telephone keypad. If you would like to withdraw your question, press the star one. I would now like to turn the conference over to Rusty Rush, President, CEO and Chairman of the Board. You may begin.

Rusty Rush, President, CEO and Chairman of the Board, Rush Enterprises, Inc.: Good morning and welcome to our third quarter 2025 earnings release call. With me this morning are Jason Wilder, Chief Operating Officer, Steve Keller, Chief Financial Officer, Jay Hazelwood, Vice President and Controller, and Michael Goldstone, Senior Vice President, General Counsel and Corporate Secretary. Certain statements we will make today are considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Because these statements include risks and uncertainties, our 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, those discussed in our annual report on Form 10-K for the year ended December 31, 2024, and in our other filings with the Securities and Exchange Commission.

As indicated in our news release, we achieved third quarter revenues of $1.9 billion and net income of $66.7 million, or $0.83 per diluted share. I am pleased to announce that our board of directors approved a $0.19 per share cash dividend. The commercial vehicle industry continued to face challenging operating conditions in the third quarter of 2025. Freight rates remained depressed and overcapacity continues to weigh on the market. In addition, while the industry gains some clarity regarding the tariffs that will be imposed on certain commercial vehicles and parts beginning November 1, economic uncertainty and regulatory ambiguity remains, especially with respect to engine emissions regulations. These factors are impacting our customers’ vehicle replacement decisions. Despite these headwinds, I am proud of the financial performance our team delivered in the third quarter.

Our employees’ commitment to operational discipline and customer service was evident in our ability to maintain strong aftermarket results and manage expenses effectively, and I am deeply grateful for their dedication. Our aftermarket operations accounted for approximately 63% of our total gross profit in the third quarter, with parts, service, and collision center revenues reaching $642.7 million, an increase of 1.5% compared to the third quarter of 2024, and our absorption ratio was 129.3 in the third quarter. Our aftermarket products and service businesses remained resilient despite ongoing market challenges. Our strategic focus on technician recruitment and retention, expanding our aftermarket sales force, and identifying new customer segments helped offset weak demand.

Looking ahead, we anticipate continued challenges in our aftermarket business due to seasonal trends and broader industry headwinds, but we remain confident that our diversified customer base and operational discipline will allow us to successfully navigate the remainder of the year. With respect to truck sales, we sold 3,120 new Class 8 trucks in the U.S. during the third quarter, accounting for 5.8% of the total U.S. market. While this represents an 11% year-over-year decrease, we outperformed the market primarily due to stable demand from our vocational customers, underscoring the strength of our diversified customer base. Looking forward, economic and regulatory uncertainty continues to dampen customer demand, particularly with respect to new Class 8 trucks. We believe that the weak demand the industry is currently experiencing will negatively impact new Class 8 truck sales for at least the next two quarters.

That said, if stricter emission laws become effective as planned, and if capacity continues to exit the market due to bankruptcies, retail sales being below replacement levels, and continued enforcement of government policies regarding English language proficiency and non-domicile drivers, Class 8 truck sales may be strong in the second half of 2026. In the medium duty market, we delivered 2,979 Class 4 through 7 medium duty commercial vehicles in the U.S. in the third quarter, representing an 8.3% year-over-year decrease and a 5.6% market share. We also sold 448 Class 5 through 7 commercial vehicles in Canada, which represents 10.7% of the new Canadian Class 5 through 7 commercial vehicle market. Despite ongoing industry headwinds, our medium duty results in the third quarter outpaced the broader market.

Our performance was bolstered by a significant increase in bus sales following our acquisition of an IC Bus franchise in Canada, which further diversified our customer base. Looking ahead, we expect medium duty commercial vehicle sales to remain stable through the remainder of the year. We sold 1,814 used commercial vehicles in the third quarter, essentially flat compared to the same period in 2024. While financing remains a challenge for used truck buyers, we believe our inventory is right-sized and that our used truck sales strategy is on track. Unlike the new truck market, the used truck margin is less exposed to tariff concerns and regulatory uncertainty, which may provide customers more confidence and incentive to consider used trucks as part of their fleet mix. In the near term, we expect fourth quarter used truck sales to be in line with third quarter Rush.

Truck leasing achieved record revenues of $93.3 million in the third quarter, up 4.7% year over year. Our full service leasing revenue increased as we brought new vehicles into service, which also helped lower operating costs and increased profitability. Rental utilization was lower year over year, but improved sequentially, and we are confident our leasing and rental performance will be solid for the remainder of the year. On the capital allocation front, we remain focused on returning value to shareholders. During the third quarter, we repurchased $9.2 million of our common stock as part of our expanded $200 million repurchase authorization, and we also paid a cash dividend of $14.8 million in the quarter. In summary, despite the aforementioned industry headwinds, I believe we’ve delivered solid results and I am proud of our team’s performance in the third quarter. Our employees across the U.S.

and Canada continue to demonstrate resilience and I am deeply grateful for their dedication. With that, I’ll take your question.

Conference Operator: Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset to ensure that phone is not on mute when asking a question. Our first question comes from Andrew Obin from Bank of America, please.

Rusty Rush, President, CEO and Chairman of the Board, Rush Enterprises, Inc.: Yes, good morning. Good morning, Rusty. Great execution. Hey, thank you, Andrew. Appreciate that. I’m sure the team worked very hard. Just a question. Could you just tell us, you know, we’ve been stuck in this cyclical malaise for a while now. We’ve been waiting for the turn of the cycle for a while now. Can you just expand and tell us what are you seeing? When do you feel things actually bottom and what’s the path going forward? What gets this thing sort of uncorked and just lets the sales actually go up eventually? Thank you. Right. I’m guessing, Andrew, that you’re speaking about from my customer’s perspective, is that correct? Yes.

Conference Operator: Correct.

Rusty Rush, President, CEO and Chairman of the Board, Rush Enterprises, Inc.: Yes. Okay, great. I just so happened that I spent the last couple days in lovely San Diego, California at ATA, which is the largest truck convention or customer truck convention there is. I met with quite a few customers while I was out there. I think, as I mentioned in one of the paragraphs in the press release, and I mentioned a little bit earlier, this is the first time I’m going to say we’ve been three years in a freight recession, man, three years. This usually doesn’t last but 12 to 16 months. I have never seen in my career it go so long. Right. You couldn’t figure out why supply was not coming out. Right. There’s supply and then there’s demand. I can’t really speak to demand as well. That’s more of an economy driven stuff around tariffs and just around the economy itself.

From a supply side, the crazy thing is it just has not come out of the market. It always comes out faster. I think if you look at it after rates were way up in 2021, 2022 and they started coming down, that’s been that three year run of just depressed freight rates from the customer perspective, especially on the truckload side. Not so much on the LTL side, but on the truckload side for sure. I think the government’s finally got their arms around some of this.

One of the things I learned while I was there is, you know, you read a lot and people are saying this non-domicile driver thing and the English speaking proficiency, but really around the non-domicile driver thing, most, some of the numbers I’d heard before, well, if we can enforce that now it’s going to be up to the states to enforce that. I’d heard numbers of 5% or something. While I was there, some of the carriers I talked to said that was way understated. Like 15 to 20 of the states are really starting to enforce it right now, that they all have to get on board. Over the next little bit it could take out up to 15% of the drivers, which are probably some of the smaller carriers have been using to hang on and stay.

Those are the carriers that usually go out in a freight recession first. Not your more well-capitalized bigger guys, but the smaller carriers that are always that variable piece, they get in and get out based upon where rates are. That’s one of the things that I believe will for sure help. Also, I think people continue to buy trucks if we came off of allocation.

Conference Operator: We.

Rusty Rush, President, CEO and Chairman of the Board, Rush Enterprises, Inc.: Should have slowed down selling trucks or producing trucks quicker than we did. Because there’s two sides to it. Right. That’s the attrition side. The other side is what are you producing? Right. Right now, the last, the back half of this year, I mean you’re talking we’re going to be down in production 30%, 35%, 40% at all the OEMs combined. I’m not sure exactly where it is, but it’s down dramatically. I think that’s going to continue into the first quarter for sure, maybe the first half. If you add that, you think about that. You’re shutting down the supply side, the intake side, you’re taking people out of the attrition side. You should start to get a more right size or balanced fleet out there with what market demand is or what freight tonnage is. I think you can see that if you look out now.

On top of that, even though the carriers, and I’m on their side, would prefer that it’s changed. You know the law that’s going into effect right now, the current law, the way it stands is, you know, 35. Don’t give me this, it’s changing to 35 particulates. On the NOx side, it’s 200 currently. The new law says 35. I’m with the carriers, they would prefer a pause on 35 and they’re, you know, they’re there but I’m not in the middle of that. You see folks and customers that are, you know, putting pressure on the EPA to pause that law right now. I can’t tell you where it goes, but if it stays as is and goes into effect, I do believe it will change.

If it stays as is, you will see change in the warranties will come down because a lot of the cost for that was going to be a warranty, but it’s still going to add more cost where tariffs has added more cost to an industry that’s been in the three year recession. People are asking for it. Like I said, carriers are asking to stay at 200 and I support them on that. I don’t know. Currently, if you look at the law, it says it’s going to go to 35. That’s going to add more cost also by the end of next year. You tie that in with tariff costs which are happening for sure starting Saturday with the new tariffs.

I mean, defend tariffs already all year but with the new 232 rule and how that affects everything, you’re going to put the DPA thing will only increase, you know, cost on trucks at the end of next year. You add that with a better right size fleet for the environment. That’s why I wrote you can see a much stronger back half of next year. Now I would prefer that we also have freight tonnage growth with that. It’s not just regulatory driven. I think if we can get, you know, some freight growth, which I hope we get some certainty. Man, uncertainty for everybody’s been the craziest thing trying to run a business all year. We get some certainty around whatever it is. Add that in, like I said, take supply out. Even if it stays, that 35 will help truck sales.

I’d like for my customer to be more healthy and I think getting a right size fleet is the most important thing with a pickup in, you know, a pickup in freight tonnage. That’s why you see some optimism. I’m more optimistic now for that. The big over the road market, that’s still two thirds of the market that’s out there. Vocational is awesome and we do more in vocational than a third of our business, but that’s still the largest segment and it has been obviously headwinds for everyone, my customers more than me for the last, yeah, three years. I know it’s a long-winded answer, but you’re used to my long-winded answers. I’m hoping. That’s sort of the way I see it right now. I have a little more optimism than I have had after coming back from San Diego. That’s not happening right now.

Remember we had five months, six months of the lowest order intake since 2009. I’m the tail on the dog. We are going to feel it in Q4 and Q1 without question. At the same time, it feels good to really believe that you can see real drivers to get the market right sized as long as the economy stays in good shape. That’s the way I see it. Just a follow up question. I ask it on every call. What’s your read on the macro? Just general macro. Outside of the stuff that feeds into your customer base, is it getting better? Is it getting worse? What are you excited about? What are you worried about? Thank you. Oh boy. I’m not an economist, Andrew. What I worry about, I worry about unemployment, which for sure would affect consumer demand. That bothers me.

I worry about, I don’t feel that we have seen the full effect of tariffs. No way. We had a free buy, you know, prior to August. We’re draining those, you know, as we drain those inventories down, we’ve got a restock. I have seen many large companies, manufacturers, customers, you know, that all across all segments that have eaten a lot of those costs. I don’t see those, I don’t see them eating those costs forever, which ends up being pushed down to the consumer at the end of the day. Those are the two things that bother me more than anything. I’m hoping we can get around all that, but I do a little more inflationary environment if tariffs get pushed on through because everybody knows that people pre-bought prior to August, but we’re draining those.

You know, and you put that in with, we get some more unemployment. You read some of the stuff you see, I see a little anecdotes out there myself that had me a little nervous, a little bit concerned. I can’t say this is going to, this is the number, this is what’s going to happen. I do have some concerns as I look at, just look around myself and try to pay attention to what’s going on. You know, like I said, I’m not an economist. I’m just looking at it from my street level. I do have quite a bit of touch and feel with a lot of different companies and things out there.

Besides all the big stuff you read about, when you read about, whether you read about UPS and these guys, these big companies are laying off right now, Amazon, everybody, laying all these people off. There you go. That’s what I’m worried about, just feeding into that. I’ll just take advantage, ask one last question. How is your parts and service business trending on a daily basis into the year end? Is it getting better, is it getting worse? Because that’s also a good indication and also, you know, obviously has quite a bit of torque to the financials. Thank you. Thank you very much. Yeah, it was flat to slightly up for the third quarter, but September was softer than I would have liked. Remember, we naturally are all naturally, yes, we naturally have seasonality.

I always told folks if I could get rid of sometimes November, December, January and February, I might keep the holidays for the kids. Other than that, from a business perspective, if I could. Sometimes, you know, we’re in the South, it can help a lot of our stores in the South, majority of them are, so that, you know, a little harder, a little softer, you have fewer working days. We typically tick down 3% or so, 3 to 4% from Q3 and Q4 and Q1. It’ll start picking back up hopefully by late February, March, it’s solving a little quicker in September. I’m waiting to get October finished tomorrow night. I’m hoping that we can try to get pretty close to flat with last year. We’ll be really close, I think, but you know, still to be determined.

You know, there are certain things I look at that show month over month. We got the same amount of backlog and our work in process in the parts and service. I do, you know, I’m hoping it’s just like normal seasonality and we have a slight downtick, and we got one less working day, which is, you know, quite a bit of gross profit, as big as our parts and service operations are. It’s the holidays. You know, factories shut down during Christmas and New Year, but you deal with that every year. I’m hoping we stay in the range of what we typically do. I was a little, you know, disappointed with September.

Typically, we’ll start in October, but we’ll see here by the end of the month, by midnight tomorrow night on Halloween, because they’ll be closing tickets and doing what they do every month, getting it all in. We’ll see. I expect it to be fairly close and to flat with last year’s number, which if we’re there, given the environment, I’ll be okay with it. I’ll be okay with that. Thank you very much, Rusty, and appreciate your and your team’s hard work. Thank you. Hey Andrew, thank you so much.

Conference Operator: Our next question comes from Brady Lierz from Stevens. Please go ahead.

Okay, great, thanks. Morning everyone. Rusty, I wanted to start. Morning, Rusty. I wanted to start, you know, kind of just with the outlook for the remainder of 2025 and the first half of 2026. You know, you’ve mentioned a couple times on the call that you expect a challenging end to 2025 and that to persist into 1Q. Can you expand just a little on that? I mean, what are your customers telling you as to why they’re not placing orders? Is it just uncertainty around regulation or is it uncertainty around tariffs?

Rusty Rush, President, CEO and Chairman of the Board, Rush Enterprises, Inc.: Is it both?

If we got more certainty around those items, could we see a meaningful improvement? Maybe just kind of related, your vocational customers seem more resilient. Are there some company specific opportunities you have to help offset this weakness and outperform the market?

From a delivery perspective, we slightly outperformed the Class 8 dip. I think we were off 11. Market was off more than that, I think in Q3, but around. To your first part, Q4, Q1, maybe partially into Q2, I can’t tell. Remember like I said earlier, we’re the tail on the dog. When you look at the order intake from April, May, June, July, August, September, it’s like September, there was 20,000 units. We have months that was 7,400 units. This is North America, 11,000. Those were the worst order intake months since 2009. Every manufacturer has taken more down days over the last. Since July, everybody built as much as they could in the first half year. There is not one manufacturer, not one, that hasn’t taken many down days and weeks so far in this quarter. We’re building less trucks.

I guess that’s less to sell, but there’s been less demand. You can circle E, that’s all the above. When you see you hit it, it’s really three things. It’s their business, it’s everybody’s business. The uncertainty, tariffs should make freight go up and down and cost of trucks go up and down. Then you add in, can we get an answer on emissions next year? Because everyone I spoke to, if their business can get a little bit, you know, a little. We’re not, I’m not saying they’re getting it now because you got to take care of those supply issues that I rambled on and talked about earlier. When I talk about the amount of trucks on the road has to get in line with freight. If you get that back in line, bring some certainty.

So here’s what the emissions regulations are, whatever they are, and if they stay as they are currently under the law, I don’t think there’s any question, in spite of the large freight customers, they’ll probably try to pull a little bit forward, not have huge pre-buys. They will try to shift some stuff, maybe they do in Q1 or 2027 or Q2, and try to shift some of those purchases into the back half of the year. If it stays as it’s written right now and there’s not a pause and they get a little relief, which I said before, for their sake, might hurt my truck sales in the back half. For their sake, I just assume they get it, get that relief. It’s what you said. Really, we knew they need to get aligned.

Really, we’ve got to get the supply aligned with tonnage to where they can get a little contract raise. If you look at the TL side, if they got 2%, they were lucky this last year because they were going down, down, down 10%, 15% plus the prior couple years. The cost of trucks and everything operationally and inflation went up, up, and up. They have not, you’ve seen the ORs and some of these things, and they’re not what they historically have been on that side. LTL started far better, of course, two years ago. They got a little tailwind with the demise of Yellow and stuff. When the third largest carrier goes out and there are more barriers to entry in LTL with all the doors and terminals and all the stuff required in that space, they weathered it better than the TL side.

I just got to tell you, the next couple quarters are going to be tough. You could tell by the order intake that’s been there. It wasn’t like everybody was ordering trucks hand over fist. Some people it was, we weren’t even. It’s difficult to give a price on a truck still. Remember the tariffs. The definition of it just came out a week and a half ago, okay? These manufacturers are just pouring through it, trying to make sure they clearly understand it, okay? It gets pretty complicated as to how these tariffs are figured out and from where you build and what your suppliers could be, people use different suppliers and where that comes from, etc. I would tell you that we’ll probably have a whole lot more clarity as to how things are going to pick up in the next 30 to 45 days.

There wasn’t a lot of clarity at ATA because it was good for some manufacturers and bad for others, and they’re trying to sort it out with the Rule 232 is what I’m talking about. That just came out, whatever, 10, 12 days ago, 10, 11 days ago. Folks are just pouring through it, making sure that they understand it right. I’ll be honest. You couldn’t price a lot of people right now. When you can’t do that from a manufacturer, that’s somebody supposed to buy some. It’s been crazy all year because you would price, like you would give quotes that were only good for 90 days, right? Maybe 120 based upon the ever-changing environment around tariffs. That’s difficult. You know, you’ve got all these question marks. If this happens, this will. If not, you know, it’s no good.

I mean, that’s the world we’ve been living in for the last six plus months, which has made it extremely difficult. That’s all I can tell you is clarity, clarity, clarity and less uncertainty and continue taking supply out and hopefully get a little bump in freight or tonnage here. I don’t see it right now, but I would hope as we get into the first part of next year, we do see something by the time we get out of Q1 into Q2, something there while you’re taking supply out over here, while you’re building less trucks so your intake’s less. You should naturally be squeezing down the supply of trucks. That’s all I got. The best way I can describe it, which for me the hard part was while we were in a freight recession, we just kept building and selling trucks longer than we probably should have.

Now we’re on that right sizing piece along with the government activities around drivers that are going on, the things I mentioned earlier. Anyway, I have some optimism. It’s just not over the next six months.

That’s very helpful. Color.

Thank you.

If I could just follow up on medium duty. Medium duty has continued to be a stable growth driver for your business. Can you talk about what you’re seeing in medium duty into the end of the year, and just maybe any preliminary thoughts on medium duty in 2026?

Medium duty is a different environment. Right. A different market by far than the Class 8 world. I would tell you we expect it to be fairly flat in Q4 with Q3 on the medium side. Most of the downturn for us will be on the Class 8 side for sure. Like I’ve mentioned, there’s no question we’re going to deliver fewer trucks and things. Because you can see order intake, that kind of tells you what you’re going to eventually come to. Regardless of what our share percentage might be, there’s going to be a lot less deliveries in this country because we haven’t taken many orders in for the last six months. I would tell you there’s a lot of leasing around medium duty. Okay. Also, what we call our ready to roll inventory.

It’s just, you know, it’s more about the general economy and what’s going on around there. You know, housing has a lot to do with it. There’s a lot of the leasing companies. I would tell you we’re working some stuff that had me somewhat hopeful for the entire year next year. It too will probably suffer some, maybe not to the degree. Right. It’ll be more stable, I believe, than the Class 8 business will for the next couple quarters. At the same time, I don’t know that we can comp. I don’t believe we’ll comp to the same that we did this year. It won’t have as big a hit, say, as the heavy duty side will right now. That’s about all I can tell you about it. It’s pretty much hand to hand combat out there still right now, right.

If you want a truck, I can still build you to you this year. All you got to do is tell me. There’s lots of slots open, you know, for everyone, for all manufacturers. It’s going to be November 1st and we shut down, most manufacturers shut down, you know, last 10 days of the month of December. They’re still not full by any stretch in their backlogs and that’s why they keep taking shutdown days. I’m talking about all manufacturers. Some will probably do better than others. I’m not going to get into all that right now. All I can tell you is that medium duty should weather better from a downturn perspective given the diversity of the markets it serves because it serves so much the general economy. It’s not totally. It will suffer some for sure though.

That’s super helpful, thank you, Rusty. Maybe just a final quick follow-up. Could you share what you’re seeing in the used truck market, particularly how is used truck pricing trending, just given this, like you said, volatile backdrop to say the least?

I think it’s been fairly stable. When I mean to say that, normal depreciation, unlike say a year ago, if you asked me that, I would have told you no. If depreciation or two years for sure, we were double depreciating. I would tell you now depreciation is more in line with what you typically would see from a % perspective. That’s good. You know, our used trucks, while it’s always more difficult in wintertime with used, we’ve done a really nice job. I’m proud of the job. We’ve been on the used side all year long managing our inventories and staying and doing what we have to do to support our customer base, because remember one thing about used is you have, you know, you’ve got it, you take trades, right? You have to have the flexibility and the ability to take trades.

We’ve managed, we’ve taken our inventory up a little on purpose during this last couple quarters to try to move more, not to be taking it way down. We probably split the middle of where our inventory is currently, where I used to carry it to where we do now, because you got to turn your used inventory. Our turns are maybe not as tight as they were at one time, but our production overall, you got to have inventory to do that for sure. As always, when you think about, as I mentioned in my comments, to open used trucks, they don’t have to worry about tariffs or emissions, do they? There is somewhat of an advantage to that, to when you. There’s not. There’s certainty around used trucks. They’re not worried about tariffs or, as I said, emissions when you’re buying a used. That’s a plus.

We’ve had a really nice year and we expect it to be solid going forward. The problem is the volumes just can’t make up for when heavy duty drops down. Remember, the thing about the company, and I think sometimes people lose sight of, is we have many revenue streams. Remember, I got a great leasing fleet. We’re super profitable in our leasing operations. We’re profitable in our parts and services. You can tell all the time. Everybody’s focused always on truck sales and they are a big piece of what we do, but at the same time, they’re not the most, you know, parts and services. The one stable piece that you, when I say it as, does not have the, you know, it does not have the volatility, say, of the truck, classic truck sales market.

Fortunately, we have all those revenues, for instance, help us weather the storm. We top it up, you know, knock it out of the park when you’re not. You need to have. You need to have all pieces contributing. The good part is, unlike some other businesses where they’re tied to just one or two revenue streams, we have many more which allow us to get through environments like we’re seeing right now and continue to put out the kind of results we do. Are they the best results we’ve ever had? Of course not. We’re not going to sell as many trucks. They’re going to be solid, they’re going to be good and, you know, forgiving the environment a whole lot better than my customer bases had to put up with. I feel sorry sometimes what they’ve had to go through the last three years.

A lot of them have anyway, especially, like I said, on the truckload side and some of the others. I know it’s probably more than you wanted to hear about, but that’s just how I usually approach it. Now we’re good where we’re at on used and hope to continue having solid quarters there. That’s great.

Thank you so much, Rusty. Thank you so much for the time this morning. I’ll go ahead and leave it there.

Good.

Conference Operator: Our next question comes from Avi Jaroslawicz from UBS. Please go ahead.

Rusty Rush, President, CEO and Chairman of the Board, Rush Enterprises, Inc.: Hey, good morning, guys.

Conference Operator: Thanks.

Rusty Rush, President, CEO and Chairman of the Board, Rush Enterprises, Inc.: Good morning. I know parts and service business is a pretty big focus area for you guys in trying to grow that. Can you just remind us what you’re doing to pick up more share in that part of the business? Is that more challenging to pick up more share in a softer market like that, like what we’re seeing now? Also, where are you still seeing opportunity within that space? It is more challenging without question, right, because the overall market is down. I would tell you we’re holding our own this year. I don’t know that we’ve picked up as much as we would like to, because when you get in this type of environment, it becomes much more highly competitive. Especially with the inflation stuff we’ve seen in the parts arena this year, it becomes more competitive.

To be quite honest, some folks are just looking to turn cash, right, and sometimes margin takes a back seat. You have to balance what you’re doing between taking share and margin and results at the same time. That becomes a challenge in this type of environment when it’s not a growing sector. We’ve remained fairly flat all year. I would tell you we’re in line, might be a little bit better than the overall. From a dealer, you had to rank it into independents and to dealers. I would tell you from a dealer perspective versus other dealers, I think we’re in pretty good shape. Independents, they can get down and dirty when it comes in this type of environment. Our overall deal is this, and over time, I don’t want to look at it as just every quarter.

I’d rather look at it annualized and over a couple, three years. If the market, if a market goes up, just make a simple math 5%, we want to go up 6%. That means we’re taking share. We have historically been able to do that and then throw a little M&A in there and do better than that some years, right. I’m not going to say we’ve done that this year, but I think we’ve taken some, maybe not as much as I would like. We want to be 20% better, right, because if you’re 20% better, if you’re taking a little bit more, you’re just slowly ramping up your share. It’s not an add water and stir arena. As far as what we do, our technology and our data is second to none, okay.

It’s continuing to take that, and without getting into each and every project that we have out there, we always have projects going on to help enhance it that support growth. They’re not just, we don’t go about it the same way every year. We go about our business, but we keep enhancing and adding, you know, technology and stuff to make it easier and, you know, easier for our customers to do business with us. That’s the key piece from our perspective as we look at going forward. Our industry is, you know, it’s not like consumer. It tends to operate a little behind the time, which can, you know, be challenging because you have to keep pace with your customers.

When I say that, and I don’t want to downgrade our industry, but it’s typically, you know, still a little more hands on than, say, some other consumer type things and how you go about it. Technology continues to be a bigger piece of it, and I don’t like to get into some of the things we do just because I consider proprietary. I think those investments and also our investments in folks and people, our growth in the mobile service area, you know, those types of things, we have goals that, you know, are pretty well stated out there. I think a lot of investors understand that because we expound on them quite a bit when we go to conferences. I got three of them here coming up in the next month, you know, to let people know those types of, you know, investments.

Whether we want to grow our mobile service fleet to X and then we want to take our, you know, total technicians and we want to, you know, grow our outside service, you know, excuse me, our outside parts and service, what we call ASRs, you know, take those guys more, more, grow that part of our business too. Sometimes you gotta be careful because in a market that’s getting really tight, you need to have a market out there, you know, but we still think there’s a lot of runway and we will continue to do it and have the goals we have around. Like I said, try to do about 20% better from a growth perspective. If market goes up 5%, we want to go up 6% because it’s not somewhere you’re going to go from 5% to 15%.

If market’s 5%, we’re not going to take 15%, or that means I’m giving stuff away or doing this and doing that. That would not be that. I don’t believe that’s the right way to go about it. That makes perfect sense to me. Appreciate the perspective. Thank you. You bet.

Conference Operator: That concludes the question and answer session. I would like to turn the call back over to Rusty Rush, President, CEO and Chairman of the Board, for closing remarks.

Rusty Rush, President, CEO and Chairman of the Board, Rush Enterprises, Inc.: This is the longest gap between earnings calls. We won’t be talking to everybody till February. In the meantime, I wish everyone a happy holidays and safe holidays, and we’ll talk to you in February. God bless you all. Thank you.

Conference Operator: This concludes today’s conference call. You may now disconnect.