Q3 2021 Rush Enterprises Inc Earnings Call
[music].
Right Yeah.
Good day, and thank you for standing by and welcome to the Rush Enterprises, Inc. Reports third quarter 2021 earnings results call at this time all participants.
On a listen only mode. Please be advised that todays call is being recorded if you require any further assistance. Please press star zero I would now like to hand, the conference over to Mr.
Rusty Rush, Chairman CEO and president Thank you.
Well good morning, and welcome to our third quarter 2021 earnings release Conference call.
So today are Mike Mcroberts, Chief operating Officer, Steve Keller, Chief Financial Officer, Derrek Weaver Executive Vice President, Jay Hazelwood, Vice President Controller, and Michael Goldstone, Vice President General Counsel and corporate Secretary now Steve will say a few words regarding forward looking statements.
Certain statements we will make today are considered forward looking statements.
OMA 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.
Factors that could cause actual results to differ materially from those expressed or implied by such forward looking statements include but are not.
<unk> is committed to those discussed in our annual report on Form 10-K for the year ended December 31, 2020, and in our other filings with the Securities and Exchange Commission.
As indicated in our news release in the third quarter, we achieved revenues $1 $2 7 billion and record high net income of $69 4 million or $1 20 per diluted share.
We are proud to declare a cash dividend <unk> 19 per common share we continue to see economic recovery and a strong freight environment throughout the country with screening widespread demand for new and used trucks as well as aftermarket products and services.
I, probably built probability was largely driven by our diligent expense.
During the quarter during 2020, we made it a priority to implement new processes and tools throughout our organization to control expenses throughout the truck cycle. We believe these processes will allow us to effectively control expenses that we can as we continue to implement our strategic growth initiatives and will contribute.
We will continue to contribute.
Due to a higher pretax profit margins than we historically experience looking.
Looking ahead, though demand remains healthy for new trucks and aftermarket parts and services.
Ponant supply chain.
Our parts sales are historically high and we experience.
The activity in most market segments service revenues are accelerating graduate largely due to hiring more technicians and improving the proficiency of our workforce as well as our enhanced service offerings.
We believe demand for aftermarket parts and service.
Wrong, but we expect supply constraints to continue to impact the industry through the middle of 2022, we continue to focus on our strategic aftermarket initiatives and expect our fourth quarter performance to remain strong, though we expect normal seasonal decline over the next couple of months.
Turning to truck sales in the second quarter, we sold 2500 <unk>.
Seven new class a drugs are getting from four 7% of the total U S class eight market.
The economy's strong freight rates led to widespread demand for new class eight trucks, but our results were natively impacted.
Manufacturers limited production capabilities.
<unk> research forecast U S retail sales.
Is the 228500 units in 2021 up 16, 8% from 2020.
We expect component supply constraints will continue to delay some class eight trucks push got some glass translate sales into next year, which will likely impact our performance in the fourth quarter.
However, we believe class eight new.
Truck sales will accelerate in 2022, when manufacturers are able to increase production.
Our class four through seven new truck sales reached 2700 92 units in the third quarter accounting for four 7% of the U S market, we experienced healthy activity for many market segments, particularly foodservice in lease and rental.
But the limited production of new medium duty trucks, enabling impacted our results.
ACD research forecast U S class four through seven retail sales with 251000 units in 2021 up 8% from 2020.
As we look ahead, we believe class four to seven.
Auction will not increases.
It's correct class eight we are pleased that Hino is back in production, but we do not expect the other medium duty manufacturers, we represent to significantly ramp up production for some time that said demand remains strong and we believe our fourth quarter class four through seven results will be on pace with our third quarter results.
Our used truck sales reached <unk> hundred 12 units in the third quarter down 16, 7% year over year. Our unit sales are down compared to last year used truck demand and values remained strong largely due to production limitations of new class eight trucks.
We expect used truck demand and values to remain strong.
Strong in the fourth quarter and begin to normalize when new truck production catches up eventually with customer demand.
It is becoming more challenging to maintain a healthy used truck inventory, but we believe our fourth quarter used truck sales will be consistent with our third quarter results.
Regarding network growth. This week, we acquired an independent parts and services facility in.
In Victorville, California that will convert into a full service peterbilt dealership.
We also have plans to acquire full service <unk> dealership in Elk Grove, Illinois next month.
Further we entered into an agreement with the summit truck group to acquire full service dealerships in several states representing international IC.
Bus ideal lease zuzu and other.
There are factors, we expect that transition to close in December. Additionally, we plan to close our previously announced agreement with Cummins.
With Cummins to acquire 50%.
Interest and momentum fuel technologies later this year.
It is important that I, thank our employees.
<unk> for their unwavering commitment to growing our business and supporting our customers in recognition of their hard work.
On the front lines during the pandemic, we are happy to issue a one time discretionary $1000 bonus to all employees in mid December.
Is one way for us to express our gratitude to our employees for their impressive work over the past.
Last year with that I'll take your questions.
Yes.
And thank you as a reminder to ask a question you will need to press star one on your telephone to withdraw your question press the pound key please standby we compile the Q&A roster and once again that is star one if you'd like.
Question and our first question comes from Jamie Cook from Credit Suisse.
Your line is now open.
Uh huh.
Good morning, Jamie.
Jamie is your line on mute.
So could you. Please mute your phone sorry, sorry, I was on mute I'm.
Good morning, everyone good job on execution than usual.
I guess my first question you talked about class eight production ramping faster than 47, if you could just provide some color on that and how you think about production ramping in general in 2022.
My second question can you sort of address and market approach to pricing with that.
The incremental cost.
And then I guess lastly, just any color you can provide on sort of the acquisition.
That you announced.
Incremental earnings accretion to 2024.
Okay, Jamie I'll start at the top well, we can compare our class four through seven versus classic why did I say that 40% will ramp up slower.
And it mainly is it the large two large manufacturers that you will probably see class eight because demand is extremely strong on the AG side right.
And also.
More expensive larger product.
I think even for US if you look historically.
Margins typically tend to be better on the <unk> side, so when you're in a supply constrained arena, which you are now you have to pick and choose right.
Because there's a lot of time.
We're not going to have a lot.
Components right. So obviously the eight demand I think is even stronger than before to seven right now and given the vehicles themselves.
You have to pick and choose you got to make decisions because of the supply constraints. We've been dealing with so I think tend to favor the class eight right now given the demand and also.
The profitability of the products you want to get real.
Because as you know.
Cost twice as much right. So obviously.
So it only makes sense that margins tend to be better just based on the revenue side of it to begin with.
Do you price the question.
Clark Picky.
Thank you.
On average.
Forget about that people are worried about them.
Yes.
Mike.
No I don't no I don't feel that way about our overboard I don't.
I think.
Look in my mind.
What's happened.
Is demand we look at things ramped.
Since July of last year, I mean, it took really blew up right from a freight perspective add money we were buying everything.
So demand was there. So we ended up when we ran into the supply shortages starting in really March April.
By the time the year's out you asked me, we probably put.
1000, or more on bottom side 40000 class a units that should've been built this year that are not going to be built when you think about it all youre doing is pressing that demand into 'twenty to 'twenty. Two is supposed to be a pretty good year. Then you run into 'twenty three right you run into 'twenty three you've got car.
40th pre buy in those states those 15 states if it all goes down to get fast and with other states, but procured in California.
Because the price of diesel engines has gone way up there's a lot of different numbers.
How much but if theyre going way up and 20 volt, so easy I don't.
Carb.
Don't see this thing slowed down to a 24 outside of some big economic issue, Okay. Because I don't see that we're going to catch up to demand right. Now I mean manufacturers are not meeting demand at the moment and so it just keeps pushing it out and pushing it out.
Unless there's some big economic downturns.
Churn in the country I don't see that demand going away, because you're not really going to be you're just going to be running the right replacement I think replacements in the too Twenty's now.
And Thats what this is U S retail so I don't think when you look last year was.
Under that obviously like 190 or something what I need to do something.
So, but then you had a huge increase backup in GDP and freight.
Rich.
And given what we see in 'twenty, two and 'twenty three.
I don't I don't see that.
Double ordering.
I don't have it I mean, I can let me give you some data points.
I would talk about.
What I really care about is what's happening in 'twenty two 'twenty three our backlog a year ago. At this time was about $1 1 billion, okay into Q3 or excuse me in Q2, it was $2 two and its $2 seven now could there be a little something in there of course are probably.
There is never an order more just perfectly clean, but I don't see any evidence based in there.
Even if there was a little bit they are still in the backlogs big So we've got to catch up with what we've missed.
So I'll try to I'll leave that one alone.
Is that a little bit with the coupons.
I can tell you the backlog can you just address how you're approaching pricing then like with just.
Certainly being driven a lot right youre, right and being driven a lot by the Oems okay.
No what where costs have gone up.
He has been scrambling on the OEM side on the supplier side.
Two point Theyre paying more obviously prices of trucks are going up.
Anybody anywhere they can't see the inflationary pressures that are out there, sometimes I know people talk about them a little bit.
A much larger sometimes just in March.
For sure see in our business.
You know they are out there and you asked about pricing you better.
So.
It's trying to keep up with trying to keep up from a change not just the Oems theyre getting hit for pricing right, they're getting hit hard on.
Not just supply, but if you can't give supply where they're getting hit on the pricing at the same time, because the whole supply and demand.
It's been like that forever.
So thats really just feeds from the bottom of the food chain up to the top.
And I think thats, what youre seeing out there right now I don't have exact numbers, but I would say it ends up getting passed onto the end user right.
Good day.
It comes out of margin if it gets passed one.
One of the other.
So I would imagine sometimes on the front side because it accelerates so fast it's hard to get it passed on but this didn't just start yesterday it started last.
Last year or nine months ago, 10 months ago. So is it clear out which of ship should be putting into your backlog.
<unk>.
'twenty two.
Should catch up with the pricing pressures that you had because that's the way it's supposed to work will work.
Because you've got a backlog and so that makes it hard.
Work your way through commitments.
So both locally.
Most people do.
And then.
And then.
Price it out into the products that you're selling now for the future, but probably.
So much of it goes back because you got it there's been no supply I mean look we delivered only 2500 trucks class eight.
And that's why I'm. So proud of the quarter is because the quarter was you look at it from a whole everybody used to view our company.
With so many trucks, Okay, and then you look at the <unk>.
Performance and it is just driving to the things we've talked about doing for a long time and I think youre seeing the fruition of it in the results in these numbers.
You asked what was your third question Jamie My third question was just trying to figure out all the M&A that you're doing.
Oh.
I Love.
It's been so long since I've never been able to talk about M&A, but I'll talk about it.
Well it gets hard out there.
And stuff, but a little deal that we just talked about nice independent deal. We closed just add ons so about single.
In the Midwest.
Hello, This above single the summit deal, though on the other hand represents quite a bit of growth.
For us when you look at it it's the second largest international dealer okay.
Yes.
It fills in three states it feels in three states we're doing.
Rusty silliness here, but if you look at Kansas.
Missouri and when you look at Arkansas, We don't have anything there and Memphis and so you know I don't know 17, 18 stores and you know as I tell people, it's like you've been making that puzzle.
The dog Cook recent chew up you can't find it well those free stage plug right into our map I'm looking at my math right.
You look at it next to me on the wall here and it's a perfect fit.
Hard for us to bounce up but get fits more perfectly from a geographic perspective now.
Well run group, we can run it even better.
We'll know that group into our overtime.
Close it in the Middle of December we're excited about.
That the Cummins JV Super excited about that momentum we have been at fuel system businesses.
<unk> you remember back in that day natural gas it could be 10% of the market by 2017 never got off to.
Okay.
Companies must believe something about the future and we do too we believe that RMG.
He will be a bridge technology as we get deeper into this decade okay.
And so we're excited and that's not something that's going to affect we finally got them out.
[laughter] I finally get their business to breakeven on our own okay.
Last year, or so, but there is going to be an opportunity.
And $25 26, or 27% for that to be a bridge technology and we believe partnering with Cummins I was looking the other day I thought that had pretty good brand equity.
A great partner in the fuel system business literally all ones building natural gas engine, you may not have seen but last week, they announced they're going to build a fifth.
15 liter natural gas engine, which is really going to open up the market.
We believe for mid decade, as I said, so we're pretty excited about that too so.
There you go again I tried to answer it.
I could.
You bet. Thank you so much.
Well ill, let someone else.
To answer your questions.
Thank you.
And our next question comes from Justin Long from Stephens. Your line is now open.
Good morning, and congrats on the quarter.
Thanks Joseph.
So maybe to just put a bow on that on the fourth quarter I know typically you see a seasonal decline.
Rusty you called out five fewer working days, but is there any way you can help us think about the magnitude of the impact from fewer working days in the fourth quarter.
Sure.
It's two things look these are just a little bump we know about the supply chain issues, we're dealing with them right now the problem.
I'm going to let me answer your first question and then I'll add to it and we'll get get passes for what we're going to have a good fourth quarter point being though the way. It falls out we've got five less working days typically in the four quarters about three but the way the holidays at work this year.
We're pulling on holiday out of 'twenty, two and sticking it back in 'twenty one because.
We're first and we're giving all of December 31 was just the right thing to do on a Friday, so impactful without getting into all that we do today with the $2 $6 million of gross profit a day and parts and service.
You can do the math, it's about 13.
Gross might be down some.
Just given we've had a lot of support.
Why chain issues, but as I said I'm not worried it's going to be a good quarter wont be the third quarter, we had a great quarter really good quarter, but the good part of it is 'twenty, two and 'twenty, you're talking about maybe 20 billion of gross profit or so but at the same time you can just graduated from there.
Other than that everything.
It should be running smooth and good and we just one of them.
We have a better fourth quarter than last year.
But third quarter is always typically our best quarter, if you'd go back historically not every time, but historically the third quarter is always our best quarter. So.
<unk>.
But listen 'twenty, two 'twenty three our setup.
Set up when you look at the growth we've had in parts and service and look where the black backlog I talked about it a minute ago.
So I'm very calm these acquisitions that we can plug it in.
We get them implemented.
Now integrated into the organization.
Things look great so from that perspective.
Well and Thats, where I wanted to go with my next question as we kind of zoom out and look at the next couple of years, you talked earlier about the truck cycle being extended through 2023, but could you maybe expand a little bit more on the parts and service business. How you see that growing the next couple of years and then.
Incremental margins as well because I think when you put together the truck cycle with parts and service recovering and incremental margin implies that EPS can still grow nicely in the next couple of years, but would love to get your thoughts around all of that.
Sure No I would agree with that.
You have one piece out and that's it.
M&A.
Right I never to give an answer because I'm going to integrate it.
Okay, we're not doing it to be.
If I can promise you so we'll sort of exactly what the M&A brings to the organization, but it would be nice.
From a margin perspective with Super high margins always quarter, but I've seen nothing that's going to stay in the way.
<unk>.
<unk>.
Just continuing on the parts and service side to continue to grow.
For now, it's 15% growth rates quarter over quarter remember last year, we were coming out of Covid et cetera. So your baseline was there but it is we are.
Targeting high single.
Eight 9% growth.
Extreme which I do believe in parts and service are doable and very achievable.
And I'm not going to count I'm not going to.
<unk> talked about it anymore than that but I do believe that we will continue to see those type of growth rates.
In the first half and into next year I think we can do that if you look at all the.
Initiatives over the last few years, if you look at some of the other things we're doing now but I don't.
I want to talk about but some of the things we're doing to go to market and that's the piece of the business I mean, we ran 134% absorption that's a record for us.
Operating metric, but it is something we have key on Purdue pretty quite heavily so.
From a parts and service perspective.
Is there you've heard me talk about the backlog from a truck sales perspective, it's there it's just going to take some execution on our part and I'll, let him speak about whether we can execute or not so we've been able to do it before and I don't want our team only continues to get better. It's not me, it's all of the folks throughout.
The organization.
And.
Just excited about where we're going and those are easy things to look at we do believe margins are sustainable and maybe not all of exact where they are what they're going to be sustainable higher than what they were a couple of years ago for sure.
We ran a pretty high margins in parts and service problems.
If we ever out this last quarter.
We are in that range and you're adding some like I said, 9% growth rates and stuff like that.
Next year.
I'm, hoping to do better, but we're going to do that out belief.
You can extrapolate the numbers familiar with the manage the expense piece don't lose sight of.
To manage the expense base G&A sequentially was it down actually and I would expect that to stay down but it was actually down a couple of points from Q2.
So you know, but I do expect us to be able to manage I talked about that a couple of years ago. If you remember about when we come out of all of US how we're going to do a better job really last year, we're going to do.
Our job.
Managing our expenses as we grow or as we grow our revenues and our gross profits. So so far so good.
We look forward to continuing that into the next couple of years.
Great very helpful. Thanks for asking.
Thank you Sir.
And thank you.
Our next question comes from Andrew <unk> from Bank of America.
Your line is now open.
Hey, Rusty how are you.
Andrew how are you today I'm. Good. Thank you. So so just go back to this comment on expanding margin and expense management, you sort of highlighted expense management.
Management statement.
Early on in your prepared remarks, I think this is sort of a new focus can you just expand it does seem that your approach to cost and the cycle a little bit different because I think historically when things went up right. You were very good at sort of keeping costs from control earlier.
Early on in the cycle.
The cycle sort of got going cost came back just go more in depth just to talk about what are you guys doing what initiatives do you have internally to sort of change your approach to cost this time around because execution seems to be superb. Thank you.
Thank you Andrew I appreciate.
Well.
No I won't give you as much detail as I can training I think our managers, we have put in some new processes and new controls and as we grow but we're only going to spend so much money.
We grow gross profit goes up X.
We're going to spend X right and that's what we're going to spend and we're going to stick to it we almost internally we call. It a salary cap just like sports sometimes right doesn't mean, you can't grow because remember we're not I don't loan money I don't do this I work on trucks are worked on parts I can literally sell parts, we deliver them. We do this it takes people.
But we want to make sure. We are staff remember two thirds of our cost are people at the end of the day. So we don't make sure that we don't get out ahead of our skis and Overstaff. It doesn't mean, we don't grow we don't add people, but we do it with some tools that everyone is pretty dialed into it took a lot of work. This year now we've got.
To continue that in the future.
We're pretty dialed in to.
We're only going to spend X of every dollar we get and the gross spot. So we're not going to get way out over it in these tool or is this a salary cap. It's this we can call. It there's other tools other than AMG, we can give to it but with the guys have been very very focused all the managers have been.
With diligent I'm proud of them.
And the teams out to and this is in spite of this.
These last few months were tough from a COVID-19 perspective, but I have a second fourth worst month in the third quarter that I've ever had with people out.
Dealing with so these controls are not leaving the organization and we're still going to.
Been very to invest on the corporate side, we are going to continue to invest but just in a proper pace.
Hopefully you learned something that you can get a little bit older.
That difficult.
I would say that but sometimes everybody gets caught up.
We're running and things are growing and you're just not as diligent as you should.
Should be I think there is some of the lessons that we have learned.
And the last two years.
I was just going to continue to bode well and we're focused on it we will expenses will grow but they will grow in relation to our gross profit growth and we will end up keeping more of it than we historically have and I'm very confident our ability to.
Continued.
Thank you Rusty just a follow up question you guys have very good systems.
Just the usual question for me could you just walk us through what Youre seeing by key industry verticals residential nonresidential oil and gas.
Corporate customers ways maybe.
Maybe what youre seeing.
Do the country in terms of macro because you do have very unique footprint. Thank you.
Beth.
I don't want to say everything is good but because oil and gas is still oil and gas I don't expect to see the capex spend in it but we've seen a slight pick up here recently.
Across.
The services that are being asked for we sure as you've seen in bottom price of oil obviously has gone up we've seen a slight pickup but I don't think people I don't expect companies to be as disciplined as they were historically or money to flow like it did historically, but I do think there is some upside still there as it has gradually been.
Bin picking up from its trough.
Other industries the over the road business I mean.
Is great right I mean, it's really good because remember if we're 40000 trucks short to what demand was that means people are running their trucks longer right.
So when you look at the <unk> side the <unk>.
At extremely strong for those customers as customers. We have we've got a couple of three or four big LPL carriers and our business with them is good when you look at housing construction is still strong.
Demand for mixture trucks demand.
For garbage trucks, and the revenue side very strong parts and service.
<unk> strong in those sectors, I mean, I'm sounding like a broken record repeating myself, but that's what we are truly rental and leasing customers.
Look at it.
I need to point out our leasing division has had the most outstanding year they've ever had.
It's just been over the top.
So you look at our leasing margins and rental margins I mean, they're just.
Above and beyond what I would what we couldn't be able to do and it's not all driven by gain on sale. There are operating because you know rentals utilized strong and leasing strong now I will tell you. This because of the lack of product revenue to extend leases and do things on other fronts that normally.
We would be taking out of service because you cant get trucks is you can't get as many trucks as you need but that's still won't inhibit.
We believe that from having an outstanding year in 'twenty, two so Andrew I know, it's a little bit.
Even municipal as Finfet bus.
Buses school buses.
I mean.
All units.
There's a lot of it's been a pretty rosy picture, which always scares you when it looks at Rosie out there, but at the same time. It is what you can see now and right now I don't see that changing a lot.
I'm not an economist or anything like that in my biggest concerns inflation I'll be honest with you.
Runaway inflation.
And I see the inflation out there sometimes I look at the numbers that are printed in Iowa.
But.
Other than that our business as an industry.
Broadly looking at it across and that goes from Florida to California, I don't see any reason that as you know.
Having as bad.
Because right now some better than others, but broadly speaking everything looks.
Good.
Of course.
No slowdown on <unk> as far as I know because unlike commercial once we haven't seen it yet we haven't seen it yet because they're still.
I believe there's something out.
Bad random lurking, but we have not seen it in some of our especially here in Texas and whatever I mean.
So it's everywhere around here.
The state.
Typically some of the states we're in like Florida.
Growing okay.
So.
No.
I'm sure I could pick a residential pocketed in some areas.
To date to pick it by state, but I can tell you here in <unk>.
Florida travel other stages still still blown up pretty good.
All right. Thank you.
I have to say that the market today is rewarding your team for all the hard work they've done this quarter.
Out there with you.
And thank you and ladies and gentlemen, if you have a question that is star. One again, if you have a question that is star one and our next question comes from Joel <unk>.
From BMO. Your line is now open.
Yes.
Hey, guys.
No.
Going well, Joe how are you.
That's quite the entourage you'd have to introduce at the beginning of every call now.
Changed much.
Yeah.
Yes.
No.
It does I don't think so but that's okay.
Same on him introduced in last couple of years.
But youre also getting if you will.
Getting up there Joel it's okay.
Yes, I was going to say, maybe my hearing aid batteries haven't been updated lately.
Probably not.
You need help I'll get you a good one good place to go get it replaced.
Hey, guys.
Can you.
Yeah.
Can you talk a little about where your parts and service mix might be three years from now like just sort of the flow of what youre looking at.
And what you've announced in terms of acquisitions and the growth rates and all that just trying to give us a little bit of a guidepost.
Well you know the growth rates I gave you was on current themes.
Same store basis, right I've got to bring these other stores and to our organization I think there is some upside there.
Look it's a well run company no question, but I think with some of our systems and some of our stuff I think there's some upside.
On the acquisition, especially from a technician perspective.
When you look out there.
I've got 500 model trucks, they've got a couple.
Things like that there'll be some of the things we do and there is some of our initiatives. So it's actually one of our big initiatives next couple of years.
To increase our mobile fleet a lot.
Like I.
I said high single digits.
For same store growth parts and service.
Parks growth.
Service growth will probably be more steady and gradual.
Looking back three years ago.
And all those technicians, we did real good the first year in the second year, we just added technicians.
Our technicians, so we had deferred some which we have which gives our proficiency backup now adding back much more strategically much more gradual and our returns.
Way higher and we're going to keep it at that pace.
We'd like to add a couple of hundred technicians over this year to our same store growth next year not five.
They really like we wanted to few years ago, and so I don't think its possible to do that and do it right with the right proficient technicians, because you cant add skilled ones. All the time, we undertake one is at the level ones and twos and train them up its just youre overburdening and you'll have to carry they are not producing for themselves, but we think we can continue to gradually add service I think the parks.
Parks business will continue to go up look inflation is going to help drive part of itself to begin with when it goes through from a revenue perspective.
When you look at what some of the prices that are coming in on the price tags on parts.
Light trucks like everything you see in the grocery store right now as I said, it's one of the things you worry about but.
I think we will still out we're going to try to outrun the market and take share.
We had a little hiccup last year, but we feel really good that we're taking share right now and going back and getting back on track with our results speak for that.
What we want to do we just wanted to make sure.
We want.
As the markets up 7% I wanted to be up 9% right I don't need to take it all one day, but just consistently take share over time and we believe we can do that especially when you look at like I said you can plug in this new acquisition.
The integration of these stores into our math.
Well, it's a differentiator in my mind it helps continue.
To allow us to differentiate from a geographic perspective, now because what you do with that geography, and how your go to market.
That's what we're trying to do is tie everything together that we have as best we can from a.
Keep trucks up and running right.
Different when you go to market with US you get the same pricing you get all that from one coast to the other coast.
Unlike 20 states within 27 28.
We will cover probably 70% or more of all the trucks sold inside our geography. So we'll continue to press that forward and hopefully that allows us with our systems and stuff to gain share. That's our goal on the parts side our goal in the others.
Other side as I said the acquisition, we've got a goal in the next five years I wanted to double my mobile service fleet.
Throwing it out there, but that's a Google we came up with in our last strategic Offsite meeting, we believe that the customer base is going to be demanding that we believe especially with technology changes that are coming and things like that you'll see it in the automotive side.
And we've always done it here, but we're going to do a better job of it.
We've got the biggest one for many dealership perspective by far.
Mobile service fleet that we're going to get bigger so.
We've got the ability to do it and we've got the expertise and then obviously get the assets. So those are just different things, we've got going to feed it.
I know I'm, not giving you exact numbers, but I'm trying to tell you.
The tools in the toolbox, we believe we've got those tools and we're going to keep pressing forward with them.
And any unusual opportunities from all these trucking business as being separated from their kind of conglomerate parents.
Yeah.
Trucking business is what I'm trying to follow you sorry.
I've iveco getting spun out and and.
Freightliner business holding out a dialer and.
No I don't see anything for US right now you know I haven't seen any look I'm my two class eight Oems are pretty set.
Okay, I've got to I'm, not going to be able to be with the others. Okay. They're not going to allow me okay remember their state laws in France.
Franchise things inside of agreements.
I'm going to I'm, a pack of our peterbilt and Navistar when it comes to class eight person there could be I think there might be other opportunities in Ohio.
With new technologies coming it's going to breathe a little confusion in the marketplace not yet everybody talks about it all right that just wait for a couple of three years and see and I believe our Oems will be leading the back in that but there are other independent people out there with other technologies that is going to be interesting to watch.
And we will have our eyes out there.
Who believe in our Oems and their capabilities to meet the changing technologies.
They're going to be demanded.
Government by the governments I didn't believe we might be pushing it a little too far.
I think that some of the demands.
I wanted to talk about electric and hydrogen and fuel so at all.
But I look at stuff.
The government's very careful pressing it too because we've got to get it.
We got to catch up to what we want I know, we've got to clean things up but those those types of things will be where opportunities might come but I can't see right now, but I'm very comfortable with the Oems I have participating in that transition is this is a transition arie dekker.
All the others like never seen transition creates a little bit of confusion, which creates opportunity Trust me we're poised.
And just last and maybe youre kind of already answered it that it's too far away, but any.
Do you feel any need to to get into like EV charging business or anything like that like things that you're thinking.
Jade.
Couple of years out or it's just way too early.
I know, it's not like we're looking at a lot of stuff by this time next year every store in California will be solar and have all their charging stuff. Okay. Obviously, we've got to meet the needs of California as the leader in it right. So we will be there a year from now.
About <unk>, we're learning we're learning with customers. We have approximately so we have electric trucks, we sold in different marketplaces, I'm not going to give the specifics.
We look forward to doing more around that space.
But again I think I believe I mean I'm not here to go along with US and we talk you probably already heard.
But I believe is going to be market segment, driven as to what technologies went up.
A lot obviously in class six seven.
Get to the end of this decade, I'm not sure it will be 50% or more.
Electric it's not going to be that way.
You're going to see that on the TL side.
You'll get it in certain applications and certain market segments, but.
That's not going to I believe worked for.
Pure TL over the road at least not now.
Could be in 20 years, or so, but I don't think we're there with that but you know you've got folks that.
I know hydrogen is something we will know something bigger Oems.
There is a lot of things going on and that's what's going to create some confusion.
Things transition.
Over the next decade, driven by we all have to deal with ESG.
And it's real.
The environmental piece.
<unk>.
But I think as I said.
Technologies will.
Be driven just by market segments will adapt to whatever makes sense. This was not diesel will be phased out over time it needs to be but it's not going away right now okay.
Going to be multi pronged and looking working with whatever technologies out there, but always trying to be on the leading.
<unk> not bleeding edge.
Okay. That's awesome. Thank you so much.
Thank you Joe.
And thank you and I'm showing no further questions I would now like to turn the call back to Mr. Rusty Rush Chairman President for closing remarks.
Thank.
Well I appreciate everybody's time, obviously there'll be a longer time period can we talk in February so I want to wish everyone, a happy holidays and between enjoy your families enjoy the time that you get to spend with them and we will talk to you in February. Thank you very much.
Thank you. This concludes today's conference call. Thank.
Dissipate and you may now disconnect.
[music].
[music].
[music].
[music].