Q3 2023 Rush Enterprises Inc Earnings Call
Sure.
Yeah.
Speaker 1: transcript
Speaker 1: Good day and thank you for standing by. Welcome to Rush Enterprises Incorporated Third Quarter, 2023 Erniez Results Conference call.
Speaker 1: Good day and thank you for standing by. Welcome to Rush Enterprises Incorporated Third Quarter, 2023 Erniez Results Conference call.
Good day, and thank you for standing by and welcome to the Rush Enterprises incorporated third quarter 2023 earnings results Conference call. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question. During the session you will need to press star one on your telephone you will then here.
Speaker 1: transcript
Speaker 1: At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised.
Speaker 1: At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised.
Automated message advising your hand is race to withdraw your question. Please press star one again, please be advised that today's conference is being recorded I would now like to hand, the conference over to your speaker today, Rusty Rush, Chairman President and Chief Executive Officer. Please go ahead Sir.
Speaker 1: transcript
Speaker 1: To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to our speaker today, Rusty Rush, Chairman, President, and Chief Executive Officer. Please go ahead, sir.
Speaker 1: To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to you speaking today. Rusty Rush, Chairman, President and Chief Executive Officer. Please go ahead, sir.
Speaker 2: transcript
Speaker 2: Good morning and welcome to our third quarter 2023 earnings release conference call. On the call are Mike McRoberts, Chief Operating Officer.
Speaker 2: Good morning and welcome to our third quarter, 2019-23 earnings release conference call. On the call, our Mike McRoberts, Chief Operating Officer.
Morning, and welcome to our third quarter earnings release Conference call on the call are Mike Mcroberts, Chief Operating Officer, Steve Keller, Chief Financial Officer, Jay Hazelwood, Vice President Controller, and Michael Goldstone Senior Vice President General Counsel and corporate Secretary now Steve will say a few words regarding forward looking statements.
Speaker 2: transcript
Speaker 2: Steve Keller, Chief Financial Officer, Jay Hazelwood, Vice President and Controller, and Michael Goldstone, Senior Vice President, General Counsel and Corporate Secretary. Now Steve will say a few-
Speaker 2: Steve Keller, Chief Financial Officer, Jay Hazelwood, Vice President and Controller, and Michael Goldstone, Senior Vice President, General Counsel and Corporate Secretary. Now Steve will say a few-
Speaker 3: transcript
Speaker 3: Certain statements we will make today are considered for looking statements as to find in the private security litigation reform act of 1995 because these statements include risk and uncertainties. Our actual results may differ materially from those expressed or implied by such for looking statements.
Speaker 3: Certain statements we will make today are considered for looking statements as to find in the private security litigation reform act of 1995 because these statements include risk and uncertainties. Our actual results may differ materially from those expressed or implied by such for looking statements.
Certain statements we will make today are considered forward looking statements as defined in the private Securities Litigation Reform Act of 1995.
These statements include risks and uncertainties, our actual results may differ materially from those expressed or implied by such forward looking statements.
Speaker 3: transcript
Speaker 3: important factors that could cause actual results to differ materially from those expressed or implied by such foreign looking statements include, but are not limited to those discussed in our annual report on Form 10K for the year into December 31st, 2022 and in our other filings with the Securities and Exchange Commission.
Speaker 3: important factors that could cause actual results to differ materially from those expressed or implied by such foreign looking statements include, but are not limited to those discussed in our annual report on Form 10K for the year into December 31st, 2022 and in our other filings with the Securities and Exchange Commission.
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, 2022, and in our other filings with the Securities and Exchange Commission.
Speaker 2: transcript
Speaker 2: As indicated in our news release, we achieved third quarter revenues of $2 billion and net income of $80.3 billion or 96 cents per diluted share. We are proud to declare a cash dividend of 17 cents per common share.
Speaker 2: As indicated in our news release, we achieved third quarter revenues of $2 billion, and then income of 80.3 million, or 96 cents per diluted share. We're proud to declare a cash dividend of 17 cents per common share.
As indicated in our news release, we achieved third quarter revenues of $2 billion.
Net income of $80 3 million or 96 cents per diluted share.
We are proud to declare a cash dividend of <unk> 17 cents per common share.
Speaker 2: transcript
Speaker 2: In the third quarter, we achieved strong financial results due to revenue growth from our expanded service technician workforce, our support of large national accounts, and ongoing pent-up demand for new Class 8 and Class 4-7 trucks following the limited new truck production of the past few years.
Speaker 2: In the third quarter, we achieved strong financial results due to revenue growth from our expanded service technician workforce, our support of large national accounts, and ongoing PIN jump demand for new class A and class 427 trucks, following a limited new truck production of the past few years.
In the third quarter, we achieved strong financial results due to revenue growth from our expanded service technician workforce, our support of large national accounts and ongoing pent up demand for new class eight and class four through seven trucks borrowing the limited new production in the past few years.
Though our largest customer segment over the road guys are being negatively affected by high interest rates low freight rates and other recognize.
Speaker 2: transcript
Speaker 2: Though our largest customer segment, the over the road customers, are being negatively affected by high interest rates, low freight rates and other economic
Speaker 2: Though our largest customer segment, the over-road customers, are being negatively affected by high-interest rates, low freight rates, and other economic.
Ongoing focus on our strategic initiatives helped us partially offset these challenges and achieve strong results in the third quarter and the <unk>.
Speaker 2: transcript
Speaker 2: ongoing focus on our strategic initiatives help us partially offset these challenges and achieve strong financial results in the third quarter. In the African market, our part of service and body shop revenues were 640 to 8.6 billion, up 3.5 percent. For our absorption rate was 132.8.
Speaker 2: ongoing focus on our strategic initiatives help us partially offset these challenges and achieve strong financial results in the third quarter. In the African market, our part of service and body shop revenues were 640 to 8.6 billion, up 3.5 percent. For our absorption rate was 132.8.
Aftermarket our parts service and body shop revenues were $643 6 billion up three 5% for at our absorption rate was $132 eight.
Speaker 2: transcript
Speaker 2: Though our aftermarket revenue has slowed, growth has slowed compared to previous quarters, the diversity of our customer base, our technician workforce, and focus on large national accounts fueled our strong aftermarket results.
Speaker 2: The our aftermarket revenue has slowed growth of slow compared to previous cores. The diversity of our customer base, our technician workforce and focus on large national accounts fueled our strong aftermarket results.
No. Our aftermarket revenue is slow growth has slowed compared to previous quarters, the diversity of our customer base.
Workforce and focus on large national accounts fueled our strong aftermarket results this quarter.
Speaker 2: transcript
Speaker 2: Looking ahead, we believe aftermarket growth will continue to moderate through the rest of this year.
Speaker 2: Looking ahead, we believe aftermarket growth will continue to moderate to the rest of this year.
Looking ahead, we believe aftermarket growth will continue to moderate through the rest of this year.
And we are closely monitoring consumer spending and other economic conditions, which could impact parts and service demand.
Speaker 2: transcript
Speaker 2: And we are closely monitoring consumer spending and other economic conditions, which could impact parts and service demand.
Speaker 2: and we are close with monitoring, and consumers spending, and other economic conditions, which could impact parts of service demand.
Speaker 2: transcript
Speaker 2: In the fourth quarter, we believe customer demand for aftermarket services will remain steady. And then our aftermarket results will be similar to the third quarter, with slight adjustments caused by normal seasonal softness and fewer working days.
Speaker 2: In the fourth quarter, we believe customer demand round-for-market services will remain steady. And then our after-market results will be similar to the third quarter, with slight adjustments caused by normal seasonal softness and fewer working days.
In the fourth quarter, we believe customer demand for aftermarket services will remain steady and then our aftermarket results will be similar to the third quarter with slight adjustments caused by normal seasonal softness and fewer working days in the quarter.
Turning to truck sales, we sold 4300 26, new class eight trucks in the quarter guiding for six 1% of the total U S market and two 1% in the Canadian market.
Speaker 2: transcript
Speaker 2: Turning to truck sales. We saw 4,326 new class hate trucks.
Speaker 2: Turning to truck sales. We saw 4,326 new class hate trucks.
Speaker 2: transcript
Speaker 2: counting for 6.1% of the global U.S. market and 2.1% of the Canadian market.
Speaker 2: GAN for 6.1% is OLS market and 2.1% of the Canadian market.
Speaker 2: transcript
Speaker 2: Low freight rates continue to affect smaller operators, but strong, thin-up demand continues to limit into production over the past few years.
Speaker 2: Low freight rates continue to affect smaller operators. But strong, then up demand continues to, continues to deliver into prep reduction over the past few years.
Low freight rates continue to affect smaller operators, but strong pent up demand continues to continues to do a limited production over the past few years.
There is still.
Speaker 2: transcript
Speaker 2: There's still new truck supply issues causing us to still be on allocation from our OEMs. New truck production continued to improve in the third quarter, resulting in significantly shorter lead times for new trucks.
Speaker 2: and there's still new truck supplies who's causing us to still be on allocation from our OEMs. New truck production continue to improve in the third quarter, resulting in significantly shorter lead taps for new trucks.
There is still a new truck supply issues, causing us to still be an allocation from our Oems new truck production continued to improve in the third quarter, resulting in a significantly shorter lead times for new drugs.
Speaker 2: transcript
Speaker 2: ACT Research forecast U.S. class A truck sales to be $278,000 in 2023, up 7.2% compared to 2022. We believe pent-up demand for class A trucks will last through the fourth quarter, and then our fourth quarter class A truck performance will align with our third quarter results.
Speaker 2: ACT research, forecast US trucks, nails, classic trucks sales to be 278,000 in 2023, of 7.2% compared to 22.2%. We believe pandemic demand for classic trucks will last through the fourth quarter, and then our fourth quarter classic truck performance will align with our third quarter result.
ACD research forecasts U S drug sales class eight truck sales to be 278 and.
In 2023 up seven 2% compared to 2022.
We believe pent up demand for class eight trucks will last through the fourth quarter and then our fourth quarter class eight truck performance will align with our third quarter results. Our class four through seven new truck sales reached 3200 44 units in the third quarter guiding for 8% of the U S market and two 3% of the Canadian market.
Speaker 2: transcript
Speaker 2: Our Class 4 through 7 new truck sales reached 3,244 units in the third quarter, accounting for 4.8% of the U.S. market and 2.3% of the Canadian market.
Speaker 2: Our class 4 through 7 new truck sales reached 3244 units in the board quarter, accounting for 4.8% of the U.S. market, and 2.3% of the Canadian.
Speaker 2: transcript
Speaker 2: We experienced solid demand from a variety of market segments. And the no truck manufacturers are devoting more resources to medium duty trucks. Production remains limited and unmet demand in the market remains.
Speaker 2: with solid demand from a variety of market segments. And those truck manufacturers are voting more resources to be in beauty trucks. Production remains limited and unmet demand in the market remain.
We experienced solid demand from a variety of market segments, and the oral drug and drug manufacturers devoting more resources to medium duty trucks production remains limited and unmet demand in the market remains.
Operator: Good day, and thank you for standing by. Welcome to Rush Enterprise's Incorporated Third Quarter 2023 Erniez Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded.
Speaker 2: transcript
Speaker 2: ACT Research 4-Class U.S. Class 427 to retail sales to be 253,000 units in 2023, up 8.5% from 2022. We are closely watching consumers spending and other economic factors, which could impact our new Class 427 vehicles. But continue to send up demand. We wish to get an independent man. We expect our 4-quarter results. We'll align with that term.
Speaker 2: ACT Research 4-Class U.S. Class 427 to retail sales to be 253,000 units in 2023, up 8.5% from 2022. We are closely watching consumers spending and other economic factors, which could impact our new Class 427 vehicles. But continue to send up demand. We wish to get an independent man. We expect our 4-quarter results. We'll align with that term.
ACD research forecasts class U S class four through seven retail sales to be 253000 units in 2023.
Eight 5% from 2022.
We are closely watching consumer spending and other economic factors, which could impact our new class four through seven years, but continued pent up demand.
<unk> been getting a great brand, we expect our fourth quarter results and with our.
Rusty Rush: I would now like to hand the conference over to your speaker today, Rusty Rush, Chairman, President, and Chief Executive Officer. Please go ahead, sir. Good morning, and welcome to our third quarter of 2023 Erniez release conference call. On the call are Mike McRoberts, 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.
Third quarter results are.
Speaker 2: transcript
Speaker 2: Our used drug sales reached 1,797 units in the third quarter, up 1.9% year-old.
Speaker 2: Are use drug sales reached 1797 units in the third floor? Up 1.9% of your own.
Our used truck sales reached 797 units in the third quarter up one 9% year over year.
Speaker 2: transcript
Speaker 2: New truck production, soft freight rates, tight credit conditions, let continue to continue to weak demand in our industry in the third quarter. Use truck values to continue to decline at an accelerated rate. Though the rate of decline is slow and values.
Speaker 2: New truck production, soft freight rates, tight credit conditions, let continue to continue to weak demand in our industry in the third quarter. Use truck values to continue to decline at an accelerated rate. Though the rate of decline is slow and values.
New truck production saw freight rates tight credit conditions led continued to continued weak demand in our industry in the third quarter.
Used truck values to continue to decline at an accelerated rate, though the rate of decline has slowed and values.
Steve Keller: Now Steve will say a few words regarding forward-looking statements. 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 risk 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 10K for the year into December 31st, 2022 and in our other filings of the Securities and Exchange Commission.
Appear to be normalizing.
Speaker 2: transcript
Speaker 2: With new truck production continuing to increase, with freight rates not expected to improve significantly in the fourth quarter, we expect used truck demand will remain low to the end of this year.
Speaker 2: New threat production continuing to increase with freight rates not expected to improve signal in the port port. We expect you, Fred German, will remain low to the end of this.
With new truck production continuing to increase with freight rates not expected to improve significantly in the fourth quarter. We expect used truck demand will remain low through the end of this year.
Speaker 2: transcript
Speaker 2: We plan to maintain our inventory at lower than normal levels and believe we are well positioned to navigate these challenging markets.
Speaker 2: We plan to maintain our inventory at lower than normal levels. And believe we are well positioned to navigate these challenging markets.
We plan to maintain our inventory at lower than normal levels and believe we are well positioned to navigate these challenging market conditions.
Speaker 2: transcript
Speaker 2: We expect that our fourth quarter use truck results will be consistent again with our third
Speaker 2: We expect that our fourth quarter use truck results will be consistent again with our third
We expect that our fourth quarter used truck results will be consistent again with our third quarter performance.
Speaker 2: transcript
Speaker 2: As we look ahead, we believe that the demand for class eight trucks will substantially be satisfied by the end of the four quarters. And a new trucks production has continued to improve. We will continue to monitor our economic factors, which are impacting our customers, especially over the road carriers. While we expect difficult seasonal solvents in the four quarters, we believe our financial results will align with our third quarter results. And we will close the year strong.
Speaker 2: As we look ahead, we believe that the demand for class eight trucks will substantially be satisfied by the end of the four quarters. And a new trucks production has continued to improve. We will continue to monitor our economic factors, which are impacting our customers, especially over the road carriers. While we expect difficult seasonal solvents in the four quarters, we believe our financial results will align with our third quarter results. And we will close the year strong.
As we look ahead, we believe that demand for class eight trucks will substantially be satisfied by the end of the fourth quarter and that new truck production.
Steve Keller: As indicated in our news release, we achieve third quarter revenues of $2 billion and then income of $80.3 million or 96 cents for diluted share. We are proud to declare a cash dividend of 17 cents for a common share. In the third quarter, we achieve strong financial results due to revenue growth from our expanded service technician workforce, our support of large national accounts, and ongoing pandemic demand for new class 8 and class 427 trucks, following the limited new truck production of the past few years.
Has continued to improve we will continue to monitor economic factors, which are impacting our customers, especially over the road carriers, what we expect typical seasonal softness in the fourth quarter, we believe our financial results.
Third quarter results and we will close the year strong.
Speaker 2: transcript
Speaker 2: And always, it is important for me to thank our employees for their great work every day. And for staying focused on our company's long-term strategic initiatives while providing a superior service to our customers.
Speaker 2: And always, it is important for me to thank our employees for their great work every day. And for staying focused on our company's long-term strategic initiatives while providing a superior service to our customers.
As always it is important for me to thank our employees for their great work every day and for staying focused on our company's long term strategic initiatives, while providing superior service to our customers with that I'll take your questions.
Steve Keller: Though our largest customer segment, the over-road customers, are being negatively affected by high interest rates, low freight rates, and other economic measures, ongoing focus on our strategic initiatives help us partially offset these challenges and achieve strong financial results in the third quarter. In the aftermarket, our part of service and body shop revenues for 640 to 8.6 billion, up 3.5% for our absorption rate was 132.8. Though our aftermarket revenue has slowed, growth has slowed compared to previous quarters.
Speaker 1: transcript
Speaker 1: Thank you. As a reminder, to ask a question, you'll need to press star 11 on your telephone. To restore your question, please press star 11 again. Please wait for your name to be announced. One moment while we compile the Q&A roster. For your panelist of future comments please read.
Speaker 1: Thank you. As a reminder, to ask a question, you'll need to press star 11 on your telephone. To restore your question, please press star 11 again. Please wait for your name to be announced. One moment while we compile the Q&A roster. of explanation.
Thank you.
As a reminder to ask a question you will need to press star one on your telephone to withdraw your question. Please press star one again, please wait for your name to be announced one moment.
Compile the Q&A roster.
One moment for your first question.
Speaker 4: transcript
Speaker 4: Our first question comes from the line of Andrew Oben with Bank of America. Your line is now open. Hey Rusty, how are you? Rusty Steve Team, how are you?
Speaker 4: Our first question comes from the line of Andrew Oben with Bank of America. Your line is now open. Hey Rusty, how are you? Rusty Steve team, how are you?
Our first question comes from the line of Andrew <unk> with Bank of America. Your line is now open.
Hey, Rusty how are Ya Rusty Steve team how are you.
Very good thank you Andrew.
Speaker 4: transcript
Speaker 4: So, first question is, I think Trayton was saying today that they think they're starting to start sales of the new S13 engine.
Speaker 4: So first question is I think Trayton was saying today that they think they're starting to start sales of the new S13 engine.
Steve Keller: The diversity of our customer base, our technician workforce, and focus on large national accounts fueled our strong aftermarket results this quarter. Looking ahead, we believe aftermarket growth will continue to moderate through the rest of this year, and we are closely monitoring consumers spending in other economic conditions, which could impact parts and service demand. In the fourth quarter, we believe customer demand, our aftermarket services will remain steady, and that our aftermarket results will be similar to the third quarter, with slight adjustments caused by normal seasonal softness and fewer working days in the quarter.
So first question is I think trading was saying today that they think they are starting to start sales of 13 engine.
And expect to ship arm portable Navistar units in 24. So does this have any impact on your sort of profitability in the navistar.
Speaker 4: transcript
Speaker 4: and expect to ship on quarter-volve Navistar units in 24. So does this have any impact on your sort of profitability in the Navistar franchise going forward? And can you also remind us how you positioned on the common engines outside of your vertical integrated model on PACR? Thank you.
Speaker 4: and expect to ship on quarter-volve Navistar units in 24. So does this have any impact on your sort of profitability in the Navistar franchise going forward? And can you also remind us how you positioned on the common engines outside of your vertical integrated model on PACR? Thank you.
Franchise going forward and can you also remind us how you're positioned on the Cummins engines.
Outside of your vertically integrated model on pack car. Thank you.
You bet well.
Speaker 2: transcript
Speaker 2: You bet. Well, you know, the S13, we're excited about it. We know that
Speaker 2: You bet. Well, you know, the S-13 works side about it. We know that...
13, we're excited about it we know that.
Steve Keller: Turning to truck sales, we saw 4,326 new-class aid trucks in the quarter, guiding for 6.1% of its OLS market, and 2.1% Low freight rates continue to affect smaller operators but strong then up-demand continues to continue to deliver into truck production over the past few years. While there are still new trucks supplies who are causing us to still be on allocation from our OEMs, new truck production continue to improve in the third quarter, resulting in significantly shorter lead jobs for new trucks.
Speaker 2: transcript
Speaker 2: and then vote for like an excited about it. And never started excited about it. Well, again, we're gonna start it a little slower than what we anticipated with the engine getting in here. We were hoping to get a few more this year than what we've gotten, but we're excited and we'll be showing up in 2024. That said, when it comes to profitability, remember.
That Volkswagen is excited about it and avatar is excited about it we will get it started a little slower.
Slower than what we anticipated with the engine getting here, we were hoping to get a few more this year than.
And what we've got but we're excited and we'll be showing up.
2024 that said when it comes to profitability remember typically the most important thing that you derive.
Speaker 2: transcript
Speaker 2: Typically, the most important thing that you derive, we're excited with what we believe will be a great performance of it, is the long-term parts profitability that goes with it. Because if it makes parts become more... We would expect that over time to definitely have an effect in the profitability of the overall of our Napster franchise.
Speaker 2: Typically the most important thing that you derive We're excited with what we believe will do great performance of it It's the long-term parts probably that goes with it because of it makes you know parts become more We would expect that over time to definitely have an effect And the probability, you know of the overall of the Napoli star farm as our never-star friends
We're excited with what we believe will do great performance, but it's the long term parts profitability that goes with it because of a mix.
It's become more competitive.
Brian.
Yes.
Steve Keller: ACT research forecast US trucks nails, classic trucks sales can be 278,000 in 2023 of 7.2% compared to 20.2. We believe pandemic demand for classic trucks will last through the fourth quarter, and then our fourth quarter classic truck performance will align with our third quarter results. Our class 4 through 7 new trucks sales reached 3244 units in the fourth quarter, accounting for 4.8% of the US market and 2.3% of the Canadian market.
We would expect that over time to definitely have an effect.
Profitability.
Well the overall of an Apple store volumes on an average to our franchises.
Speaker 2: transcript
Speaker 2: I'm thinking about trying to understand your Cummins question. Obviously, Cummins is not the... Oh, just yeah, the community, yeah, just what's happening with Cummins and what's your position, what's your relationship with Cummins? Just remind us. Sure. Our Cummins relationship is great. From an engine perspective, we're the largest distributor of Cummins engines.
Speaker 2: Thank you about trying to understand your comments question. Obviously Yeah, the community. Yeah, just what's happening what's happening with comments and what's your position? What's your relationship with comments just remind us sure our comments relationship is great From an engine perspective we're the largest you know, the script of Cummins engine
Thinking about trying to understand your comments questions obviously.
Just what's happening what's happening with comments and what's your position what's your relationship with comment just remind us sure.
<unk> relationship is great.
From an engine perspective, we are the largest.
Cummins engines.
Steve Keller: We expect solid demand from a variety of market segments, and those truck manufacturers will be voting more resources to meet in beauty trucks, production remains limited and unmet demand in the market remains. ACT research forecast US class 4 through 7 to retail sales to be 253,000 units in 2023 of 8.5% from 2022. We are closely watching consumers spending and other economic factors, which could impact our new class 4 through 7 years.
Speaker 2: transcript
Speaker 2: considering their two largest customers are PACR and Navistar and we're the largest feeder mill dealer from the largest Navistar dealer, right? So we're probably the largest retail dealer in the world, I would guess, when he comes to retail delivery. We also have a very strong relationship across the board, much deeper than just that. Remember, we've got our JV, our joint venture.
Speaker 2: considering their two largest customers are PACR and Navistar and we're the largest feeder mill dealer from the largest Navistar dealer, right? So we're probably the largest retail dealer in the world, I would guess, when he comes to retail delivery. We also have a very strong relationship across the board, much deeper than just that. Remember, we've got our JV, our joint venture.
Considering our two largest customers are <unk> and navistar and we're the largest peterbilt dealer one of the largest navistar data right. So we're probably their largest retail dealer in the world I would guess when it comes to retail delivery.
We also have a very strong relationship across the board it's much deeper than just that remember we've got our JV, our joint venture, which is we've OFC cfd, because cummins clean fuel technologies.
Speaker 2: transcript
Speaker 2: We go at CCFD because it's coming clean field technologies as with them on the natural gas fuel systems side because we both believe they bought 50% share in that. Here at January 1 and 22, and we have accelerated our investments as what we prepare for what we believe. And a big opportunity for that market share to increase.
Speaker 2: We go at CCFD because it's coming clean field technologies as with them on the natural gas fuel systems side because we both believe they bought 50% share in that. Here at January 1 and 22, and we have accelerated our investments as what we prepare for what we believe. And a big opportunity for that market share to increase.
On the natural gas fuel systems.
We both believe that about 50% share of that.
Steve Keller: But continue to think of demand. We expect our fourth quarter results will align with our third quarter results. Our use truck sales reached 1797 units in the third quarter, up 1.9% here over here. New truck production saw freight rates, tight credit conditions, led continued to continue to weak demand in our industry in the third quarter. Use truck values to continue to decline at an accelerated rate. Though the rate of decline is slow, and values appear to be normalizing.
January one of 'twenty, two and we have accelerated our investments as we prepare for what we believe.
And a big opportunity for that market share to increase.
Speaker 2: transcript
Speaker 2: from which always stayed around 2%. We think that, you know, over the next two to three years that that share get increased at 7, 8, 9%. As the, especially the truckload side, the over the road long haul side has to, you know, wrestle with all the pressures, the environmental pressures.
Speaker 2: from which always stayed around 2%. We think that, you know, over the next two to three years that that share get increased at 7, 8, 9%. As the, especially the truckload side, the over the road long haul side has to, you know, wrestle with all the pressures, the environmental pressures.
What's always stayed around 2% we think.
Over the next two to three years that that share gain increased 789% as the especially the truckload side the over the road long haul side has to wrestle with all the pressures.
Steve Keller: With new truck production continuing to increase with freight rates not expected to improve significantly in the fourth quarter. We expect you truck demand will remain low to the end of this year. We plan to maintain our inventory at lower than normal levels, and believe we are well positioned to navigate these challenging market conditions. We expect that our fourth quarter to use truck results will be consistent again with our third quarter results.
The environmental pressures that we're dealing with.
Speaker 2: transcript
Speaker 2: As you know, right now, fuel cells still ways away.
Speaker 2: As you know, right now fuel cell still weighs away.
Right now fuel cell still ways away.
Hydrogen is a ways away and I don't believe electric is a ways away when it comes to meeting the needs.
Speaker 2: transcript
Speaker 2: Hydrogen is a ways away and I don't believe electric is a ways away when it comes to meeting the needs of you know a four or five hundred mile Halt on a daily basis none of those are set up for that right now So we believe they're bringing over their new 15 liter engine and we do believe together that partnership is gonna be really well for us Really as we get into 25 26 charge accelerate 24 but it's 25
Speaker 2: Hydrogen is a ways away and I don't believe electric is a ways away when it comes to meeting the needs of you know a four or five hundred mile Halt on a daily basis none of those are set up for that right now So we believe they're bringing over their new 15 liter engine and we do believe together that partnership is gonna be really well for us Really as we get into 25 26 charge accelerate 24 but it's 25
500 mile haul on a daily basis, none of those are set up for that right. Now. So we believe they are bringing over their new 15 liter engine and we do believe that together that partnership is going to do really well for us really as we get into 'twenty five 'twenty six starting to accelerate in 'twenty four 'twenty five 'twenty six and getting a 27, we believe we've got an outbreak lateral.
Steve Keller: As we look ahead, we believe the end of demand for class 8 trucks will substantially be satisfied by the end of the fourth quarter. And a new truck production has continued to improve. We will continue to monitor our economic factors, which are impacting our customers, especially over the road carriers. While we expect difficult seasonal solvents in the fourth quarter, we believe our financial results will align with our third quarter results, and we will close the year strong.
Speaker 2: transcript
Speaker 2: and getting to 27, we believe we've got a lot of opportunity around that from a fuel system side. So, you know, as I said, it's a very broad relationship with them.
Speaker 2: and getting to 27, we believe we got an opportunity around that from a fuel system side. So, as I said, it's a very broad relationship with them.
Turning around that from a fuel system side so.
As I said, it's a very broad relationship with them.
Speaker 2: transcript
Speaker 2: We're excited to have that relationship with the board to continue to work with the microwave of all of us.
Speaker 2: We're excited to have that relationship with the board to continue to work with the microwave of all of us.
We're excited to have that relationship and look forward to continuing to working with them like we have always said.
Rusty Rush: As always, it is important for me to thank our employees for their great work every day. And for staying focused on our company's long-term strategic initiatives while providing a superior service to our customers. With that, I'll take your questions. Thank you.
Thank you and just a follow up question.
Speaker 4: transcript
Speaker 4: Thank you. Just a follow-up question on sort of you sort of saying that Q4 is roughly gonna be in line with Q3 and you know sort of I hate to be asking question about next year but how sustainable is this sort of quarterly pace, right? We know that you're sort of telegraphing that new unit sales are gonna be down.
Speaker 4: Thank you. Just a follow-up question on sort of you sort of saying that Q4 is roughly gonna be in line with Q3 and you know sort of I hate to be asking question about next year but how sustainable is this sort of quarterly pace, right? We know that you're sort of telegraphing that new unit sales are gonna be down.
On sort of your sort of saying that Q4, yes.
Yes, roughly.
In line with Q3.
I hate to be asking the question about it.
Next year, but how sustainable is this sort of quarterly pace right. We know that you're sort of telegraphing that new unit sales are going to be down.
Operator: As a reminder, to ask a question, you'll need to press star 1-1 on your telephone. To assure you a question, please press star 1-1 again. Please wait for your name to be announced. One moment while we compile the Q&A roster. One moment for our first question.
Andrew Oben: Our first question comes from the line of Andrew Oben with Bank of America. Your line is now open. Hey Rusty, how are you? Rusty's team. How are you? Very good. Thank you Andrew. So first question is I think Trayton was saying today that they think they're starting to start sales of the new S13 engine and expect to ship on quarter old Navistar units in 24. So does this have any impact on your sort of profitability and the Navistar franchise going forward?
Andrew Oben: And can you also remind us how you positioned on the commons engines? You know outside of your vertical integrated model on PACAR? Thank you. You bet. Well, you know, the S13 we're excited about it. We know that they're both like this excited about it. Navistar is excited about it. We're going to start a little slower than what we anticipated with the engine getting in here. We were hoping to get a few more this year than what we've gotten, but we're excited and we'll be showing up in 2024.
Andrew Oben: That said, when it comes to profitability, remember typically the most important thing that you've derived. We're excited with what we believe will be a great performance of it. It's the long-term parts profitability goes with it because it makes, you know, parts become more practical. So we would expect that over time to definitely have an effect in the probability of the overall of the Navistar franchise. I'm thinking about trying to understand your comments question.
Andrew Oben: Obviously. What's happening with commons and what's your position? What's your relationship with commons? Just remind us. Sure. Our commons relationship is great. From an engine perspective, we're the largest distributor of commons engines. Considering there are two largest customers are Pac-R and Navistar and we're the largest dealer from the largest Navistar dealer, right? So we're probably the largest retail dealer in the world, I guess, when it comes to retail delivery. We also have a very strong relationship across the board.
Andrew Oben: It's much deeper than just that. Remember, we've got our JV, our joint venture, which is we call it CCFD because it's commons clean fuel technologies as with them on the natural gas fuel system side, because we both believe they bought 50% share in that. January 1-22 and we have accelerated our investments is what we prepare for what we believe and a big opportunity for that market share to increase. From what's always stayed around 2%, we think that over the next two to three years that that share can increase 7-8-9%.
Andrew Oben: As the, especially the truckload side, the over the road long haul side has to wrestle with all the pressures, the environmental pressures that we're dealing with. As you know, right now fuel cell still weighs away. Hydrogens are weighs away. And I don't believe the electric is a weighs away when it comes to meet the needs of, you know, a four or five hundred mile haul on a daily basis. None of those are set up for that right now.
Andrew Oben: So we believe they're bringing over their new 15-liter engine and we do believe together that partnership is going to do really well for us. Really as we get into 25, 26 targets, accelerate 24, but at 25, 26 and getting to 27, we believe we got an opportunity around that from a fuel system side.
Rusty Rush: So, you know, as I said, it's a very broad relationship with them and we're excited to have that relationship with the board to continue to work with them like we have always. Thank you.
Andrew Oben: And just a follow-up question on sort of you sort of saying that Q4 is roughly going to be in line with Q3 and you know sort of I hate to be asking questions about next year, but how sustainable is this sort of quarterly pace right? We know that you're sort of telegraphing that new unit sales are going to be down.