Q1 2025 Rush Enterprises Inc Earnings Call - Q&A

May 1, 2025

Speaker Change: [music].

Operator: Thank you for standing by. My name is Janice, and I will be your conference operator today. At this time, I would like to welcome everyone to the Rush Enterprises Inc. Report First 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. Thank you. I would like to turn the call over now to Mr. W.M. Rush, Chairman, CEO, and President. Please go ahead.

Operator: Thank you for standing by. My name is Janice, and I will be your conference operator today. At this time, I would like to welcome everyone to the Rush Enterprises Inc Report Q1 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. Thank you. I would like to turn the call over now to Mr. Rusty Rush, Chairman, CEO, and President. Please go ahead.

Thank you for standing by my name is Janice and I will be your conference operator today at this time I would like to welcome everyone to the Rush Enterprises, Inc. Reports first quarter 'twenty twenty-five earning results all lines have been placed on mute to prevent any background noise.

Speaker Change: After the Speakers' remarks, there will be question and answer session. If you'd like to ask question. During this time simply pass press star followed by the number one on your telephone keypad. If you would like to withdraw your question Press Star. One again. Thank you I would like to turn the call over now to Mr. Rusty Rush Chairman CEO and President. Please go ahead.

W.M. Rush: Well, good morning, everyone, and welcome to our Q1 2025 Earnings Call. With me on the call 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. Before we begin, Steve will say a few words regarding forward-looking statements.

Rusty Rush: Well, good morning, everyone, and welcome to our Q1 2025 Earnings Call. With me on the call 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. Before we begin, Steve will say a few words regarding forward-looking statements.

Rusty Rush: Well good morning, everyone and welcome to our first quarter 2025 earnings call.

Speaker Change: With me on the call. This morning, adjacent Wilder, Chief operating Officer, Steve Keller, Chief Financial Officer, Jay Hazelwood, Vice President Controller, and Michael Goldstone, Senior Vice President General Counsel and corporate Secretary.

Rusty Rush: Before we begin.

Rusty Rush: I'll 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.

Steven Keller: 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 31 December 2024, and our other filings with the Securities and Exchange Commission.

Rusty Rush: 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 2000.

Rusty Rush: 24, and our other filings with the Securities and Exchange Commission.

W.M. Rush: As we stated in our news release yesterday, in the Q1, we achieved revenues of $1.85 billion, and net income of $60.3 million or $0.73 per diluted share. We remain committed to returning value to our shareholders, so I'm proud to announce that our board of directors has again declared a cash dividend of $0.18 per common share for the quarter. The business environment in the Q1 was difficult to say the least. The industry continues to struggle with a freight recession, economic uncertainty, growing concerns around US trade policies and tariffs, and the future of emissions regulations. These factors caused a slowdown in customer activity, particularly in the Class 8 over-the-road segment. Truck sales to Class 8 customers were weaker as we began the year.

Rusty Rush: As we stated in our news release yesterday, in the Q1, we achieved revenues of $1.85 billion, and net income of $60.3 million or $0.73 per diluted share. We remain committed to returning value to our shareholders, so I'm proud to announce that our board of directors has again declared a cash dividend of $0.18 per common share for the quarter. The business environment in the Q1 was difficult to say the least. The industry continues to struggle with a freight recession, economic uncertainty, growing concerns around US trade policies and tariffs, and the future of emissions regulations. These factors caused a slowdown in customer activity, particularly in the Class 8 over-the-road segment. Truck sales to Class 8 customers were weaker as we began the year.

Rusty Rush: As we stated in our news release yesterday.

Rusty Rush: First quarter, we achieved revenues of $1 1 billion and net income was $63 million or 73 cents per diluted share.

Rusty Rush: We remain committed to returning value to our shareholders. So I'm proud to announce that our board of directors again declared a cash dividend of <unk> 18 per common share for the quarter.

Rusty Rush: The business environment in the third quarter was difficult to say the least the industry continues to struggle with a freight recession economic uncertainty growing concerns around U S trade policies.

Rusty Rush: Tariffs and future and the future of emissions regulations. These factors caused a slowdown in customer activity, particularly in the class eight over the road segment.

Rusty Rush: Drug sales to class eight customers were weaker as we began the year. However, thanks to our continued focus on strategic initiatives and our diversified customer base, we managed to outperform the broader market in the first quarter, primarily due to strong sales to the vocational and public sector.

W.M. Rush: However, thanks to our continued focus on strategic initiatives and our diversified customer base, we managed to outperform the broader market in Q1, primarily due to strong sales to the vocational and public sector customers. In the medium-duty truck sales market, while the overall market was down, our unique Ready to Roll inventory program was particularly effective. Again, we outperformed the industry with steady Class 4 through 7 sales in Q1. From a used truck perspective, we saw a typical seasonal pattern, slower sales in January and February, but a good pickup in March, giving us sequential growth from Q4. With respect to our aftermarket results, our parts, service, and body shop revenues were $619 million in Q1, down 4.6% compared to last year. Our absorption ratio was 128.6 compared to 130.1 in Q1 of 2024, but still very strong.

Rusty Rush: However, thanks to our continued focus on strategic initiatives and our diversified customer base, we managed to outperform the broader market in Q1, primarily due to strong sales to the vocational and public sector customers. In the medium-duty truck sales market, while the overall market was down, our unique Ready to Roll inventory program was particularly effective. Again, we outperformed the industry with steady Class 4 through 7 sales in Q1. From a used truck perspective, we saw a typical seasonal pattern, slower sales in January and February, but a good pickup in March, giving us sequential growth from Q4. With respect to our aftermarket results, our parts, service, and body shop revenues were $619 million in Q1, down 4.6% compared to last year. Our absorption ratio was 128.6 compared to 130.1 in Q1 of 2024, but still very strong.

Rusty Rush: In the medium duty truck sales market, while the overall market was down our unique ready to roll inventory program was particularly effective and again, we outperformed the industry with the steady glass four through seven sales in the quarter.

Rusty Rush: From a used truck perspective, we saw a typical seasonal pattern of lower sales in January and February but a good pick up in March giving us sequential growth from the fourth quarter.

Rusty Rush: With respect to our aftermarket results, our parts service and body shop revenues were $619 million in the quarter down $4 six compared to last year, our absorption ratio was $148 six compared to $1 31 in the quarter Q1 of 2024.

Rusty Rush: Very strong.

W.M. Rush: Despite tough market conditions, we experienced a slight improvement in aftermarket sales revenues compared to Q4 of last year, with demand from our public sector, vocational, and medium-duty leasing customers remaining steady and sales to the energy sector beginning to pick up. We also expanded our aftermarket sales force in Q1, which should help us provide an even higher level of service to our customers going forward. All things considered, operations in Q1. Looking ahead, we expect to see some improvement in aftermarket revenues in Q2. We added service technicians during Q1, which will allow us to decrease customer dwell time going forward.

Rusty Rush: Despite tough market conditions, we experienced a slight improvement in aftermarket sales revenues compared to Q4 of last year, with demand from our public sector, vocational, and medium-duty leasing customers remaining steady and sales to the energy sector beginning to pick up. We also expanded our aftermarket sales force in Q1, which should help us provide an even higher level of service to our customers going forward. All things considered, operations in Q1. Looking ahead, we expect to see some improvement in aftermarket revenues in Q2. We added service technicians during Q1, which will allow us to decrease customer dwell time going forward.

Rusty Rush: Despite tough market conditions, we experienced a slight improvement in aftermarket sales revenues compared to the more quarter of last year with demand from our public sector vocational and medium duty leasing customers remaining steady and sales to the energy sector beginning to pick up.

Rusty Rush: We also expanded our aftermarket sales force in the vertical which should help us provide an even higher level of service to our customers going forward.

Rusty Rush: All things considered operation Walgreens operations in the first floor.

Rusty Rush: Looking ahead, we expect to see some improvement in aftermarket revenues in Q2.

Rusty Rush: We added service technicians during the first quarter, which will allow us to decrease customer dwell time going forward. We also continue to optimize our parts delivery routes and improve our call center operations, which helped us serve more customers efficiently.

W.M. Rush: We also continue to optimize our parts delivery routes and improve our call center operations, which help us serve more customers efficiently. With respect to the H2 of the year, we are actively monitoring the supply chain and the impact that proposed tariffs may have on parts availability and pricing. We believe that we are well-positioned with our parts inventory to mitigate the effects of any potential supply chain disruptions. The Class 8 new truck sales market continues to face challenges. ACT Research says that US and Canadian retail truck sales totaled 57,946 in Q1, down 9% year over year. By comparison, we were down 7.8%, selling 3,222 new Class 8 trucks and accounting for 6.1% of the total US market and 1.1% of the new Class 8 market in Canada. While this was a tough quarter, I'm pleased that we outperformed the market.

Rusty Rush: We also continue to optimize our parts delivery routes and improve our call center operations, which help us serve more customers efficiently. With respect to the H2 of the year, we are actively monitoring the supply chain and the impact that proposed tariffs may have on parts availability and pricing. We believe that we are well-positioned with our parts inventory to mitigate the effects of any potential supply chain disruptions. The Class 8 new truck sales market continues to face challenges. ACT Research says that US and Canadian retail truck sales totaled 57,946 in Q1, down 9% year over year. By comparison, we were down 7.8%, selling 3,222 new Class 8 trucks and accounting for 6.1% of the total US market and 1.1% of the new Class 8 market in Canada. While this was a tough quarter, I'm pleased that we outperformed the market.

Rusty Rush: With respect to the second half of the year, we are actively monitoring the supply chain and the impact of proposed tariffs.

Rusty Rush: Our parts availability and pricing, we believe that we are well positioned with our parts inventory to mitigate the effects of any potential supply chain disruptions.

Rusty Rush: The class eight new truck sales market continues to face challenges ACG research says U S and Canadian retail drive sales totaled 57946 in the first four down 9% year over year.

Rusty Rush: By comparison, we were down seven 8% and 32 to 122, new class a drugs and accounting for six 1% of the total U S market and one 1% of the new class eight market in Canada.

Rusty Rush: While this was a tough quarter I am pleased that we outperformed the market.

W.M. Rush: Looking ahead at Q2 and H2, ACT Research revised its US and Canadian Class 8 sales forecast downward to 234,600 units in 2025, a 14.7% decline compared to last year. However, we do anticipate a slight improvement in Class 8 sales in Q2 due to the timing of some fleet deliveries. At this point, there is too much market uncertainty to predict what demand will look like in H2 for our over-the-road customers. We remain optimistic about demand from our vocational and public sector customers throughout 2025. In medium-duty sales, the overall market declined 3.5% in Q1.

Rusty Rush: Looking ahead at Q2 and H2, ACT Research revised its US and Canadian Class 8 sales forecast downward to 234,600 units in 2025, a 14.7% decline compared to last year. However, we do anticipate a slight improvement in Class 8 sales in Q2 due to the timing of some fleet deliveries. At this point, there is too much market uncertainty to predict what demand will look like in H2 for our over-the-road customers. We remain optimistic about demand from our vocational and public sector customers throughout 2025. In medium-duty sales, the overall market declined 3.5% in Q1.

Rusty Rush: Looking ahead of Q2 and the back half of the year ACG research revised its U S and Canadian class eight sales forecast downward to 234600 units in 2025 out of 14, 7% decline compared to last year. However.

Rusty Rush: However, we do anticipate a slight improvement in class eight sales in the second quarter due to the timing of certain fleet deliveries.

Rusty Rush: At this point there is too much market uncertainty to predict what demand will look like in the second half for our over the road customers, but we remain optimistic about demand from our vocational and public sector customers throughout 2020.

Rusty Rush: In medium duty sales the overall market declined three 5% in the first quarter, but our performance remains today and results already 329, new class four to seven drugs outpacing the market and increasing our market share to five 6% of the U S class four through seven mortgage and three 1%.

W.M. Rush: Our performance remained stable, and we sold 3,329 new Class 4 through 7 trucks, outpacing the market and increasing our market share to 5.6% of the US Class 4 through 7 market and 3.1% of the Canadian Class 5 through 7, excuse me, Canadian market. ACT Research forecasts US and Canadian sales of Class 4 through 7 trucks to be 254,050 in 2025, down 7.2% compared to last year. Going forward, we expect customers to be cautious, replacing vehicles rather than expanding their fleet. Our strategic approach to stocking work-ready vehicles should allow us to meet customer needs when and where they need vehicles, and we expect to continue to outperform the market this year. We sold 1,769 used trucks in Q1, down 2.7% compared to 2024. As of now, demand remains soft and tariffs haven't yet affected used truck pricing.

Rusty Rush: Our performance remained stable, and we sold 3,329 new Class 4 through 7 trucks, outpacing the market and increasing our market share to 5.6% of the US Class 4 through 7 market and 3.1% of the Canadian Class 5 through 7, excuse me, Canadian market. ACT Research forecasts US and Canadian sales of Class 4 through 7 trucks to be 254,050 in 2025, down 7.2% compared to last year. Going forward, we expect customers to be cautious, replacing vehicles rather than expanding their fleet. Our strategic approach to stocking work-ready vehicles should allow us to meet customer needs when and where they need vehicles, and we expect to continue to outperform the market this year. We sold 1,769 used trucks in Q1, down 2.7% compared to 2024. As of now, demand remains soft and tariffs haven't yet affected used truck pricing.

Rusty Rush: Indian class five through seven Canadian the Canadian market.

Speaker Change: ACG research forecast U S uranium sales of glass four to seven drugs to be 254000, or <unk> in 2020 plan down seven 2% compared to last year.

Speaker Change: Going forward, we expect customers to be cautious, replacing vehicles, rather than expanding our fleet, but our strategic approach to start getting work ready vehicles that allow us to meet customer needs.

Speaker Change: Where they need vehicles, and we expect to continue to outperform the market this year.

Speaker Change: We sold $17 69 used drugs.

Speaker Change: Two 7% compared to 22 way.

Speaker Change: As of now demand remains soft and tariffs have affected used truck price.

W.M. Rush: We've been proactive in increasing inventories slightly in preparation for the spring and summer selling season, and we believe our stock levels are where they need to be to meet customer needs. Our Rush Truck Leasing division delivered solid results again in Q1. Leasing and rental revenue increased 2.3% compared to Q1 of 2024 and totaled $90 million for Q1. Rental revenue was down just slightly year-over-year due to lower utilization rates, but full-service leasing continues to perform well as we put additional vehicles into service. I'm confident that our leasing and rental business will stay strong throughout the year. While we faced our share of challenges in Q1, I'm proud of how our team has navigated the uncertainty that is currently impacting the commercial vehicle industry.

Rusty Rush: We've been proactive in increasing inventories slightly in preparation for the spring and summer selling season, and we believe our stock levels are where they need to be to meet customer needs. Our Rush Truck Leasing division delivered solid results again in Q1. Leasing and rental revenue increased 2.3% compared to Q1 of 2024 and totaled $90 million for Q1. Rental revenue was down just slightly year-over-year due to lower utilization rates, but full-service leasing continues to perform well as we put additional vehicles into service. I'm confident that our leasing and rental business will stay strong throughout the year. While we faced our share of challenges in Q1, I'm proud of how our team has navigated the uncertainty that is currently impacting the commercial vehicle industry.

Speaker Change: But we've been proactive increasing inventories slightly in preparation for the spring and summer selling season and.

Speaker Change: And we believe our stock levels are where they need to be to meet customer needs.

Speaker Change: Our restaurant leasing division delivered solid results again in the first quarter leasing and rental revenue increased two 3% compared to Q1 of 2020 board until $90 million for the quarter rental revenue was down just slightly year over year due to lower utilization rates with full service leasing.

Speaker Change: They used to perform well as we put additional deal digital vehicles into service.

Speaker Change: Covenant, there are leasing and rental business will stay strong throughout the year.

Speaker Change: While we faced our share of challenges in the first quarter I am proud of our team has navigated the uncertainty that is currently impacting the commercial vehicle industry.

W.M. Rush: As I said in the news release, what remains unclear for us and for the industry as a whole is how the H2 of the year is going to play out. The ongoing concerns around tariffs, their impact on the economy, and how current emission regulations may be modified, are making some customers hesitant to move forward with vehicle purchasing decisions. That said, I'm confident in our position as we navigate these challenges, and I believe our dealer network, strong relationships with customers and manufacturers, and our broad product offerings will allow us to respond quickly as these policies take shape. Before I close, I want to take a moment to thank our employees. The Q1 of 2025 has been tough, but our team has shown incredible resilience.

Rusty Rush: As I said in the news release, what remains unclear for us and for the industry as a whole is how the H2 of the year is going to play out. The ongoing concerns around tariffs, their impact on the economy, and how current emission regulations may be modified, are making some customers hesitant to move forward with vehicle purchasing decisions. That said, I'm confident in our position as we navigate these challenges, and I believe our dealer network, strong relationships with customers and manufacturers, and our broad product offerings will allow us to respond quickly as these policies take shape. Before I close, I want to take a moment to thank our employees. The Q1 of 2025 has been tough, but our team has shown incredible resilience.

Speaker Change: As I've said in the news release, what remains unclear for us and for the industry. So as to how the second half of the year is going to play out.

Speaker Change: Ongoing concerns around tariffs and their impact on the economy.

Speaker Change: Correct emission regulations may be modified.

Speaker Change: Some customers hesitant to move forward with vehicle purchasing decisions.

Speaker Change: That said I am confident in our position as we navigate these challenges and I believe our dealer network.

Speaker Change: Our relationships with customers and manufacturers and our broad product offerings will allow us to respond quickly to these policies that Jay.

Speaker Change: Before I close I wanted to take a moment to thank our employees in the first quarter of 2025 has been done but our team has shown incredible resilience they've worked tirelessly to help customers through certain consider these uncertain times, while keeping our long term goals and site and continuing to manage expenses.

W.M. Rush: They worked tirelessly to help customers through these uncertain times while keeping our long-term goals in sight and continuing to manage expenses. Their dedication directly contributed to our performance this quarter, and I am extremely grateful for their efforts. With that, I'll take your questions.

Rusty Rush: They worked tirelessly to help customers through these uncertain times while keeping our long-term goals in sight and continuing to manage expenses. Their dedication directly contributed to our performance this quarter, and I am extremely grateful for their efforts. With that, I'll take your questions.

Speaker Change: Dedication directly contributed to our performance this quarter.

Speaker Change: Streamline grateful for their efforts.

Speaker Change: And with that I'll take your questions.

Operator: At this time, I would like to remind everyone, in order to ask a question, press star then 1 on your telephone keypad. Your first question comes from the line of Daniel Imbro with Stephens. Please go ahead.

Operator: At this time, I would like to remind everyone, in order to ask a question, press star then one on your telephone keypad. Your first question comes from the line of Daniel Imbro with Stephens. Please go ahead.

Speaker Change: At this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad.

Speaker Change: Our first question comes from the line of Daniela in parallel.

Speaker Change: Please go ahead.

Daniel Imbro: Yeah. Hey, good morning, guys. Thanks for taking the questions.

Speaker Change: Yeah, Hey, good morning, guys. Thanks for taking the questions.

W.M. Rush: Good morning, Daniel.

Rusty Rush: Good morning, Daniel.

Speaker Change: Good morning, Dan.

Daniel Imbro: Rusty, obviously a lot of moving pieces out there. Maybe we'll just start on the demand backdrop.

Speaker Change: Rusty.

Speaker Change: Obviously, a lot of moving pieces out there maybe I'll just start on the demand backdrop is exact.

W.M. Rush: To say the least.

Rusty Rush: To say the least.

Daniel Imbro: Exactly. Can you talk about maybe how new unit sales trended through the quarter and maybe here into April? We've seen a lot of the larger fleets lowering their CapEx orders. I know those aren't always your customers, but are your customers behaving in a similar way? What are your customers telling you about their planned expenditures for the rest of the year?

Speaker Change: What exactly can you talk about maybe how new unit sales trended through the quarter and maybe here into April we've seen a lot of the larger fleets lowering their capex orders I know those aren't always your customers, but are your customers behaving in a similar way kind of what what are your customers telling you about their planned expenditures for the rest of the year.

W.M. Rush: Well, I think we're taking the approach that hopefully as we get through the back half of the year, it'll be somewhat similar to what Q2 was, right? With these ever-moving tariffs that are going on, besides business being rough, right? I mean, you've seen the earnings releases that have come out from all the carriers, right? We do business with those carriers. Not a lot of them, not all of them by any stretch, they are a component of what we do. The tariff bouncing around has made it very difficult. If you'd come to me 60 days ago, I would've said the same thing about Q2 that I'm telling you about the back half of the year. Okay?

Rusty Rush: Well, I think we're taking the approach that hopefully as we get through the H2 of the year, it'll be somewhat similar to what Q2 was, right? With these ever-moving tariffs that are going on, besides business being rough, right? I mean, you've seen the earnings releases that have come out from all the carriers, right? We do business with those carriers. Not a lot of them, not all of them by any stretch, they are a component of what we do. The tariff bouncing around has made it very difficult. If you'd come to me 60 days ago, I would've said the same thing about Q2 that I'm telling you about the H2 of the year. Okay?

Speaker Change: Well I think we're taking the approach that hopefully as we get through the back half of the year. It will be somewhat similar to what <unk> was ripe with these ever moving tariffs going on besides business being rough right I mean, you're seeing their invoices that have come out from voluntary is right and we do do business with those carriers and a lot of them not all of them.

Speaker Change: Scratch, but they are they are a component of what we do so.

Speaker Change: The tariff bouncing around.

Speaker Change: <unk> made it very difficult.

Speaker Change: <unk> hundred 60 days ago, I would've said the same thing about Q2 that I'm, telling you about the back half of the year, but once we got a little <unk> when I say clarity, we got clarity like 60, 90 days out, but we don't have clarity and throughout the whole year and thats. The toughest thing we're dealing with right. So.

W.M. Rush: Once we got a little clarity, when I say clarity, we got clarity like 60, 90 days out. We don't have clarity throughout the whole year, and that's the toughest thing we're dealing with, right? I would've said, Oh, boy, I'm really concerned about Q2. As I mentioned in there, we expect deliveries to be slightly up, not dramatically, but slightly ahead of what Class 8 deliveries were in Q1. It's just those uncertainties, Daniel. Like you said, I'm not going to name names, but I know people that have shut off total buy for H2. It's understood that it's just really difficult. I'm hoping the same thing happens with Q3 and Q4. You've heard me use this phrase a few times over the last year or so, it's hand-to-mouth, baby. It's not something we're not used to.

Rusty Rush: Once we got a little clarity, when I say clarity, we got clarity like 60, 90 days out. We don't have clarity throughout the whole year, and that's the toughest thing we're dealing with, right? I would've said, Oh, boy, I'm really concerned about Q2. As I mentioned in there, we expect deliveries to be slightly up, not dramatically, but slightly ahead of what Class 8 deliveries were in Q1. It's just those uncertainties, Daniel. Like you said, I'm not going to name names, but I know people that have shut off total buy for H2. It's understood that it's just really difficult. I'm hoping the same thing happens with Q3 and Q4. You've heard me use this phrase a few times over the last year or so, it's hand-to-mouth, baby. It's not something we're not used to.

Speaker Change: I would have said Oh boy I'm really concerned about you do.

Speaker Change: And as I mentioned in there, we expect deliveries to be slightly up not dramatically, but slightly ahead of what class eight deliveries work.

Speaker Change: In Q1, so I mean, it's just those uncertainties.

Speaker Change: I mean, it seemed like you said a lot of <unk>.

Mike: Hi, Mike.

Mike: But I won't be able to shut off total buy for the back half of the year.

Mike: And so I understood that.

Mike: It's just really really difficult I don't want to forgive me.

Mike: So I am hoping the same thing happens with Q3, a few board.

Mike: Importantly uses for agency jobs over the last year or so its hand about maybe tan.

Mike: But it's not something we're not used to I would get you the backlogs while the Oems we deal with are not full probuphine still there are still slots available in June. So as you can see it's hard to put your arms around.

W.M. Rush: I would tell you that backlogs, while the OEMs we deal with are not full through Q2 still, there are still slots available in June. As you can see, it's hard to put your arms around where Q3 is going to be when you still got slots available in Q2. Not a whole lot, but there are some slots that are available in Q2. It's very difficult to price right now. Because tariffs just came up again last week. They're being re-looked at again. We still don't have certainty around the emissions. Okay? You saw that the House, maybe yesterday, passed a bill, as the federal government's going back and forth with CARB out in California. We're going to see how that all plays out. We do not have established emissions.

Rusty Rush: I would tell you that backlogs, while the OEMs we deal with are not full through Q2 still, there are still slots available in June. As you can see, it's hard to put your arms around where Q3 is going to be when you still got slots available in Q2. Not a whole lot, but there are some slots that are available in Q2. It's very difficult to price right now. Because tariffs just came up again last week. They're being re-looked at again. We still don't have certainty around the emissions. Okay? You saw that the House, maybe yesterday, passed a bill, as the federal government's going back and forth with CARB out in California. We're going to see how that all plays out. We do not have established emissions.

Mike: Q3 could be when you still got slots available in Q2, not notable not a whole lot, but there are some slots.

Mike: Slots that are available.

Mike: And it's we won't we don't it's very difficult to price right now.

Mike: Because tariffs.

Mike: <unk> came up again last week, they are being re looked at again.

Mike: Okay.

Mike: We still don't have certainty around the emissions. Okay. You saw that the house maybe yesterday.

Mike: <unk>.

Mike: Passenger bill is that business.

Mike: Federal governments.

Mike: Going back and forth with Carb, California, we're going to see how that all plays out as we still have we do not have established emissions and we have them, but they are under siege right now right or wrong.

W.M. Rush: We have them, but they're under siege right now, right or wrong, for January 1 or 27, right? I expect those to change. I don't have the detail. I'm not here, I'm not going to project on how it will change. With the current administration that's in it right now, there's no question it's going to change, and it should change. All these uncertainties just create. It's hard to run a business living in an uncertain world like that. It may be this way for a while, okay, until things smooth out, and I can't tell you when that is. I think there's another. On the emissions side, I think we're still 45 days or so away from getting more clarity.

Rusty Rush: We have them, but they're under siege right now, right or wrong, for January or 27, right? I expect those to change. I don't have the detail. I'm not here, I'm not going to project on how it will change. With the current administration that's in it right now, there's no question it's going to change, and it should change. All these uncertainties just create. It's hard to run a business living in an uncertain world like that. It may be this way for a while, okay, until things smooth out, and I can't tell you when that is. I think there's another. On the emissions side, I think we're still 45 days or so away from getting more clarity.

Mike: Sure.

Mike: January one of 2007, so I expect those to change I don't have the detail I'm not here to project on what that will well I will change, but with the current administration agenda right. Now there's no question as J S and X should change, but all of these uncertainties just create.

Mike: Hard to run a business living in an uncertain world like that so it might be this way for a while.

Mike: Until things smooth out and I can't tell you when that is I think there is another matter, but we will get any on the admission side I think were still 45 days or so away from getting more clarity.

W.M. Rush: I know the bill was going to be going to the House, as we try to come up with a solution that makes sense, not the one that's in place currently, which does not make sense. The tariff thing, like I said, they're re-looking at it again as of last week. I think we're going to see us operating in these short windows. I don't think you're going to see these big backlogs out through the rest of the year. If you do, and if you're counting on backlogs in Q4 being worth the paper they're written on, good luck, because things change quickly right now. I think there will be some demand, but I'm in line with what ACT said when it comes to, they're off around 15%. I'll take that right now, to be honest with you, for the year.

Rusty Rush: I know the bill was going to be going to the House, as we try to come up with a solution that makes sense, not the one that's in place currently, which does not make sense. The tariff thing, like I said, they're re-looking at it again as of last week. I think we're going to see us operating in these short windows. I don't think you're going to see these big backlogs out through the rest of the year. If you do, and if you're counting on backlogs in Q4 being worth the paper they're written on, good luck, because things change quickly right now. I think there will be some demand, but I'm in line with what ACT said when it comes to, they're off around 15%. I'll take that right now, to be honest with you, for the year.

Mike: Right on the bill is going to be going to the house.

Mike: As we tried to come up with a solution that makes sense not the one that is in place currently which does not make sense and the tariffs like I said they are really looking at it again as of last week. So.

Mike: I mean, I think we're going to see us operating in these short windows.

Don't think youre going to see these big backlogs out through the rest of the year and if you do if youre counting on backlogs in the fourth quarter being worth of data there Rick Doyle. Good luck because things change quickly right now so I think there will be some demand, but I'm in line with what <unk> said when it comes to <unk>.

We're at 17%.

Mike: I'll take them right now to be honest with you for the year.

W.M. Rush: As I look out there and see, and I'm not trying to be a Debbie Downer here about it, but it's just a reality of what we're dealing with. I think you see that we were still able to put out a pretty good quarter given everything we're dealing with. I would hope that we'll be able to continue to operate as Look, let's go back. We won't talk about Russia in particular. I know I'm rambling on, but here we go. Let's go back to 2020, right? Let's go back to COVID. Go look at the performance of the organization. Whether we had allocation or we're five weekly times, we've been able to perform, and I expect us to continue to perform as we go forward, no matter what the environment is.

Rusty Rush: As I look out there and see, and I'm not trying to be a Debbie Downer here about it, but it's just a reality of what we're dealing with. I think you see that we were still able to put out a pretty good quarter given everything we're dealing with. I would hope that we'll be able to continue to operate as Look, let's go back. We won't talk about Russia in particular. I know I'm rambling on, but here we go. Let's go back to 2020, right? Let's go back to COVID. Go look at the performance of the organization. Whether we had allocation or we're five weekly times, we've been able to perform, and I expect us to continue to perform as we go forward, no matter what the environment is.

Mike: As I look out there and see and I'm not trying to be Debbie downer here about it but it's just the reality of what we're dealing with but I think youll see that we were still able to put out a pretty good quarter, given everything we're dealing with and I would hope that we'll be able to continue to operators look let's go back we don't know about Russia.

Mike: Jay I know I'm rambling on but here. We go let's go back to 2020 right. Let's go back to Covid going into the performance of the organization, whether we add allocation.

Mike: Five week lead times, we've been able to perform in <unk>.

Mike: It performed as we go forward no matter what the environment is.

Daniel Imbro: Yeah. Well, if it's hand-to-mouth, at least you guys have the experience and done this before. Maybe for my follow-up, Rusty, if you could just expand a bit on the parts and service. Obviously, it was softer in Q1. Was that more in any one part of the business, collision, big fleets, or small fleets? You mentioned you expected an improvement in Q2. Did you mean a return to year-over-year growth, or just sequentially higher than Q1?

Speaker Change: Yeah, well, it's hand to mouth at least you guys have the experienced and others before maybe for my follow up Steve If you could just expand a bit on the parts and service. Obviously he was softer in <unk> was that more in any one part of the business collision big fleets or small fleets and then you mentioned you expected an improvement in <unk> did you mean, a return to year over year growth, we're just sequentially higher than the first.

Mike: Peter.

W.M. Rush: Sequential. Okay. I'm hoping, but I'm not here to guarantee any year-over-year growth, right? I think, one of the key things is you asked about Q1, we'll start there. It started off slow. Weather in January, I know there's always weather, but we had more store shutdown days this year than we did the prior year. In January, with some of the rough weather that came through. I was very concerned in January. We saw a pickup in February, and we saw a pickup from there into March. I'll be honest, we just looked at April this morning. Obviously, it's the first of May. April was solid. It was choppy, maybe a little off per day average.

Rusty Rush: Sequential. Okay. I'm hoping, but I'm not here to guarantee any year-over-year growth, right? I think, one of the key things is you asked about Q1, we'll start there. It started off slow. Weather in January, I know there's always weather, but we had more store shutdown days this year than we did the prior year. In January, with some of the rough weather that came through. I was very concerned in January. We saw a pickup in February, and we saw a pickup from there into March. I'll be honest, we just looked at April this morning. Obviously, it's the first of May. April was solid. It was choppy, maybe a little off per day average.

Peter: Sequential okay, I'm, hoping but I'm not here to guarantee.

Peter: Over year growth rate I think one of the key things is you asked about Q1, we'll start there.

Peter: You know it started off slow I mean, whether we're at all there is always weather, but we had we had.

Peter: More store shutdown days this year than we did prior year.

In January with some of the rough weather the game through.

Peter: I was very concerned in January we saw a pick up in February and we saw a pick up from there into March I think it will be.

Peter: Honestly I just looked at April this morning, obviously as far as demand.

Peter: April was solid it was choppy, maybe a little off per day average.

W.M. Rush: It looks like our backlog is similar, when I talk about that's work in process, as to what we were at the end of March, very similar within a point or so. It's choppy, right? Again, the uncertainty is wrapped around Like right now, you go ask anybody, what you're seeing lots and less of is miles driven. Miles driven is not really good. You'll see that customers, especially over-the-road customers, are not putting the miles on their vehicles that they historically have. Obviously, with less miles, probably needs less maintenance and less repair to go with it. That said, given the dynamics of all the programs that we have out there, I do believe we'll be able to have sequential growth, because January and February were softer. Right? We picked up through March, but a little bit choppy.

Rusty Rush: It looks like our backlog is similar, when I talk about that's work in process, as to what we were at the end of March, very similar within a point or so. It's choppy, right? Again, the uncertainty is wrapped around Like right now, you go ask anybody, what you're seeing lots and less of is miles driven. Miles driven is not really good. You'll see that customers, especially over-the-road customers, are not putting the miles on their vehicles that they historically have. Obviously, with less miles, probably needs less maintenance and less repair to go with it. That said, given the dynamics of all the programs that we have out there, I do believe we'll be able to have sequential growth, because January and February were softer. Right? We picked up through March, but a little bit choppy.

Peter: But it looks like our our backlog is similar when I talked about that that's work in process as to what where the end of March very simple with a point or so so I'm not.

Peter: It's just a little bit choppy right.

Peter: Again, the uncertainty is wrapped around.

Peter: But right now you could ask anybody what you are seeing a lot less of it as miles driven miles driven.

Peter: It is not really good you'll see it.

Peter: Customers, especially overrode customers are not putting the miles on their vehicles that they historically had and obviously with less miles.

Peter: Their needs less maintenance and less repair to go with that said given the given the dynamics of all of the programs that we have out there.

Peter: Do believe we'll be able to have sequential growth because January and February were softer right. We picked up through March, but a little bit choppy and maybe here I was just looking at numbers today for April, but we're real close.

W.M. Rush: Maybe here, I'm just looking at numbers today for April, but we're real close. Typically, these months are better months for us. When you get into May and June and July, get into summer, your air conditioning work picks up and things like that around the country because we got a lot of stores in the South. I would look for sequential growth. I'm not here to commit to year-over-year growth. What I have to able to commit to is if you look at our expense management, year-over-year, we were down in G&A, which is what I really look at. I mean, S is nothing but a derivative of sales. G&A was off 5.5% year-over-year. That's why you only saw a 1.5% drop really in the store operating absorption number, right?

Rusty Rush: Maybe here, I'm just looking at numbers today for April, but we're real close. Typically, these months are better months for us. When you get into May and June and July, get into summer, your air conditioning work picks up and things like that around the country because we got a lot of stores in the South. I would look for sequential growth. I'm not here to commit to year-over-year growth. What I have to able to commit to is if you look at our expense management, year-over-year, we were down in G&A, which is what I really look at. I mean, S is nothing but a derivative of sales. G&A was off 5.5% year-over-year. That's why you only saw a 1.5% drop really in the store operating absorption number, right?

Peter: So and typically these months are better months for us when you get into May and June and July and into summer and your earlier conditioning work picks up and things like that.

Peter:

Peter: Around around the country, because we have a lot of stores in the south.

Peter: So I would look for sequential growth.

Peter: We are committed to year over year growth want to add that we commit to.

Peter: You look at our expense management.

Peter: Year over year, we were down in G&A, which is what I really look at it as it is nothing but a derivative so sales, but G&A was up five 5% year over year. That's why we only saw one 5% drop really.

Peter: And our store operating.

W.M. Rush: If you're 4.5 down but you're only 1.5, you made a lot of it up from an expense perspective, right? That's the key thing is we do have more than one lever to hit as we go without tearing it apart. Again, choppy. We're pretty fluid, as I've said. Well, I believe we proved that out over the last 5 years, in the business model, and we'll continue to operate in the environment and the hand we're dealt. I'm confident in the company, I'm confident in our folks, and I'm confident in our leadership that we'll make the right decisions to continue to, in my mind, outperform the market. Even though we're the only public truck dealer, really, that's just a truck dealer. I know there's, like one or two other comps out there. I do expect us to outperform like we usually do in the past.

Rusty Rush: If you're 4.5 down but you're only 1.5, you made a lot of it up from an expense perspective, right? That's the key thing is we do have more than one lever to hit as we go without tearing it apart. Again, choppy. We're pretty fluid, as I've said. Well, I believe we proved that out over the last 5 years, in the business model, and we'll continue to operate in the environment and the hand we're dealt. I'm confident in the company, I'm confident in our folks, and I'm confident in our leadership that we'll make the right decisions to continue to, in my mind, outperform the market. Even though we're the only public truck dealer, really, that's just a truck dealer. I know there's, like one or two other comps out there. I do expect us to outperform like we usually do in the past.

Speaker Change: <unk> number right therefore to have Dan patrolled I wanted to ask you made a lot of it from the expense perspective.

Speaker Change: Thats. The key thing is we do have more than one lever to hit as we go without without tear it apart so.

Speaker Change: Again choppy.

Speaker Change: But we're pretty fluid as I've said, we're largely we prove that out over the last five years and the business model and we will continue to.

Speaker Change: To operate in the environment and the hand, we're dealt and I am confident in the gut rehab governing our folks from government leadership that will make the right decisions to continue to combine outperformed the market, even though we're the only global drug dealer related it's just a drug dealers out of it I guess, one or two other comps out there.

Speaker Change: I guess to outperform like we have <unk>, which like we usually do in the past.

Daniel Imbro: All super helpful, Justin Clower. I really appreciate it, and best of luck.

Speaker Change: All Super helpful color I really appreciate it and best of luck.

W.M. Rush: You bet. Thank you.

Rusty Rush: You bet. Thank you.

Speaker Change: You bet. Thank you.

Operator: Your next question comes from the line of Andrew Obin with Bank of America. Please go ahead.

Andrew Holden: Your next question comes from the line of Andrew Holden with Bank of America. Please go ahead.

Andrew Obin: Hey, Rusty, how are you?

Speaker Change: <unk> how are you.

W.M. Rush: I'm good, Andrew.

Rusty Rush: I'm good, Andrew.

Speaker Change: Good Andrew.

Andrew Obin: Okay.

Speaker Change: Okay. So as I hear you correct on second quarter sequentially class and is going to be better than sequentially parts and services is going to be a better that's right and I heard that correct.

W.M. Rush: All things considered.

Rusty Rush: All things considered.

Andrew Obin: If I hear you correct on Q2, sequentially, Class 8 is gonna be better and sequentially, parts and services is gonna be better. That's right? I heard that correctly.

W.M. Rush: Well, let's ease. Whoa, Andrew. Whoa, whoa. Slightly, okay?

Rusty Rush: Well, let's ease. Whoa, Andrew. Whoa, whoa. Slightly, okay?

Speaker Change: We're seeing as well.

Speaker Change: So Andrew well, well well slightly.

Andrew Obin: Slightly. Sequence No, I got it. Yeah.

Speaker Change: Hi.

Speaker Change: No I got it yeah.

W.M. Rush: Slightly. Let's don't get carried away here. The problem is the uncertainty, man. I'd tell you what it was exactly like if I knew. If you hadn't noticed since we had our first 100 days, every day has been different since 20 January. I'm not being critical there.

Rusty Rush: Slightly. Let's don't get carried away here. The problem is the uncertainty, man. I'd tell you what it was exactly like if I knew. If you hadn't noticed since we had our first 100 days, every day has been different since 20 January. I'm not being critical there.

Speaker Change: Slightly I'm not let's not get carried away.

Speaker Change: The problem is the uncertainty Matt I'd tell you what it exactly like a vibrant but if you have noticed since we had our first 100 days everyday has been difference in January and I'm not being critical there but no.

Andrew Obin: It's exciting.

W.M. Rush: A lot of stuff changes on a daily basis. It makes it very difficult running a business and for me to give forecasts that are out there. That's why you don't see me going out in H2. Like I told you a minute ago on the call, I couldn't have told you Q2 60 days ago. We were able to put something together when we got some clarity to what pricing was going to be in Q2, right? Again, they're relooking at tariffs again, so H2 is still up in the air. Also dealing with what's going on in the economy right now.

Rusty Rush: A lot of stuff changes on a daily basis. It makes it very difficult running a business and for me to give forecasts that are out there. That's why you don't see me going out in H2. Like I told you a minute ago on the call, I couldn't have told you Q2 60 days ago. We were able to put something together when we got some clarity to what pricing was going to be in Q2, right? Again, they're relooking at tariffs again, so H2 is still up in the air. Also dealing with what's going on in the economy right now.

Speaker Change: Changes on a daily basis.

<unk> makes it very difficult running a business.

Speaker Change: And for me to give forecasts that are out there thats why im always on you don't see that you won't have in the back half of the year I've got an embedded into on the call <unk> June 60 days ago, but we were able to put something together when we got.

Speaker Change: Some clarity on what pricing is going to be in Q2 right but.

Speaker Change: No.

Speaker Change: That re looking at tariffs again, so the back half of the year is still up in the air.

Speaker Change: And also dealing with what's going on in the economy.

Andrew Obin: No. That.

W.M. Rush: I'll wait for things to be slightly.

Rusty Rush: I'll wait for things to be slightly.

Speaker Change: No.

Speaker Change: Slightly.

Andrew Obin: Okay. No, I totally appreciate it. Can you just tell us sequentially, and I know in April there were some holiday timing issues, but parts and services in April, did that get better, or did that stay stable from March, or did that slow down? How did I know we're getting hyper-granular here, but was there a slowdown in April?

Speaker Change: Okay, No I I I I totally appreciate it and can you just tell us.

Sequentially and I know in April there were some holiday timing issues, but parts and services in April did that get better I did that from and does that stay stable from March or did that slow down and how it does and how it I know, we're getting a high pro granular here, but was there a slowdown in April.

W.M. Rush: Yeah, okay. A slightly less in April per day average.

Rusty Rush: Yeah, okay. A slightly less in April per day average.

Speaker Change: Yes, Jay its a slightly less in April per day average, but I attribute it hopefully hopefully I'm right I would attribute it to the Easter week OK <unk>, we did not have a very good week rates I will tell you. This we closed yet.

Andrew Obin: Okay.

W.M. Rush: I attribute it, hopefully I'm right, I would attribute it to the Easter week, okay? Easter week, we did not have a very good week, right? I will tell you this, we closed it. We didn't catch it all up here at the end, but we did close better here over the last week.

Rusty Rush: I attribute it, hopefully I'm right, I would attribute it to the Easter week, okay? Easter week, we did not have a very good week, right? I will tell you this, we closed it. We didn't catch it all up here at the end, but we did close better here over the last week.

Speaker Change: We didn't catch it all up European but we did close better here over the last week.

Andrew Obin: Okay, fine.

W.M. Rush: I'm hoping that we can maintain some of that. By the way, it was still better than January and February, per day average, okay? It wasn't quite to where April was on a per day average, but Easter week was a rough week, and if you'd asked me where we ended up today, if you'd asked me a week ago, I would've taken it, okay? I felt we had a good close to the month. I know we're getting granular, but there's certain pockets in the country that I can attribute. I know you always like to know where around the country where things are, but there are certain pockets that you can attribute some of this, a little bit of softness there, to be honest with you.

Rusty Rush: I'm hoping that we can maintain some of that. By the way, it was still better than January and February, per day average, okay? It wasn't quite to where April was on a per day average, but Easter week was a rough week, and if you'd asked me where we ended up today, if you'd asked me a week ago, I would've taken it, okay? I felt we had a good close to the month. I know we're getting granular, but there's certain pockets in the country that I can attribute. I know you always like to know where around the country where things are, but there are certain pockets that you can attribute some of this, a little bit of softness there, to be honest with you.

Speaker Change: Okay.

Speaker Change: We can maintain some of that.

Speaker Change: By the way it was still better than January and February okay.

Speaker Change: Per day average so it wasn't quite to where April was on a per day average but.

Speaker Change: We issue it was a rough weekend.

Speaker Change: If you'd asked me, where we ended up today, if you'd asked me a week ago I wouldn't have taken it.

Speaker Change: So I felt we had a good close to the model and I know, we're getting granular, but there are certain pockets in the country.

Speaker Change: I can't attribute I know you always liked to nowhere around manufacturing where things are but there are certain pockets did you get a Caribbean. Some of this so logo softness to be honest with you.

Andrew Obin: Okay. I assume that D&A is just fixed as what it is. As I think relative to 2022, right? As I think about SG&A cost, is that a good baseline for what SG&A can be, or were you so bare bones during COVID that it's not applicable, and I should just assume that there has been some inflation over the past two, three years?

Speaker Change: Okay, and then as I think.

Speaker Change: It does.

Speaker Change: I assume the DNA is fixed is what it is but as I think relative to 'twenty two.

Speaker Change: Right.

Speaker Change: As I think about SG&A cost is that a good baseline for what SG&A can be or we are so bare bones. During COVID-19, then it's not applicable and I should just assume that there has been some inflation over the past two or three years, yes, no. Let's go back that far dollars no way I'm going to kick back down to that number right now.

W.M. Rush: Yeah. No, let's not go back that far, Don. There's no way I'm gonna get back down to that number right now, or I'll be cutting meat and bone out of the place because it costs a little bit more money. We didn't give back all that inflationary pressures that we took in 2023 and 2022. It's not like we've had deflation. You continue to have inflation. That's why we've maintained pretty flat. Since I made those cuts last year around this time right now a year ago, we've maintained, which is what's allowed us. That's why Q1 was off 5.5% over last year's Q1. We've been able to hold it. Is there more we can do? Possibly. We're continuing to look at that on a rather daily, weekly basis. Again, as I get clarity, I make those decisions.

Rusty Rush: Yeah. No, let's not go back that far, Don. There's no way I'm gonna get back down to that number right now, or I'll be cutting meat and bone out of the place because it costs a little bit more money. We didn't give back all that inflationary pressures that we took in 2023 and 2022. It's not like we've had deflation. You continue to have inflation. That's why we've maintained pretty flat. Since I made those cuts last year around this time right now a year ago, we've maintained, which is what's allowed us. That's why Q1 was off 5.5% over last year's Q1. We've been able to hold it. Is there more we can do? Possibly. We're continuing to look at that on a rather daily, weekly basis. Again, as I get clarity, I make those decisions.

Speaker Change: Meat and bone out of the place cost a little bit more money.

Speaker Change: We didn't get back all the inflationary pressures that we took in 23 and 22 satellite satellite we've had deflation. So you've continued to have inflation. That's flat we've maintained pretty flat as I made those cuts last year round around this time right now a year ago, we've maintained which is what's allowed.

This is why Q1 was off by one 5% over last year's Q1, we've been able to hold it is there more we can do.

Speaker Change: Possibly.

Speaker Change: We're continuing to look at that.

Speaker Change: Rather a daily weekly basis, but again as I get clarity and make those decisions I try as continuing to get clarity on the market out there right.

W.M. Rush: I have to continue to get clarity in the market I'm in, right? I'm going to see how April closes. I'll get the nets on April. I'll look at where we are from a G&A perspective. When I say hand-to-mouth, it's hand-to-mouth in every facet of the business. Is that a bad thing? No, it's just the reality of it, right? I don't think anybody I'm very confident in our ability to react. Maybe I can't project as well as I'd like to project for you, but I'm very confident in our ability to react or proactively act, should I say. Given what we see in front of us, the runway is really short. There's a lot of haze, a lot of fog when I rolled off all the things that are going on. That's not just for me, that's for our customers.

Rusty Rush: I have to continue to get clarity in the market I'm in, right? I'm going to see how April closes. I'll get the nets on April. I'll look at where we are from a G&A perspective. When I say hand-to-mouth, it's hand-to-mouth in every facet of the business. Is that a bad thing? No, it's just the reality of it, right? I don't think anybody I'm very confident in our ability to react. Maybe I can't project as well as I'd like to project for you, but I'm very confident in our ability to react or proactively act, should I say. Given what we see in front of us, the runway is really short. There's a lot of haze, a lot of fog when I rolled off all the things that are going on. That's not just for me, that's for our customers.

Speaker Change: Im going to see how April closes I'll get the nets on April would be where we are from a G&A perspective, I mean, what I say here about its add about in every facet of the business.

Speaker Change: Is that is that a bad thing now it's just the reality of it right.

Speaker Change: Don't take anybody I'm very confident in our ability to react.

Speaker Change: Maybe I can't project as well as I'd like to project for you, but I'm very confident in our ability to react.

Speaker Change: Proactively Act should I say, given what we see in front of US is yes the.

Speaker Change: The runway is really short.

Speaker Change: There's a lot of hay as a lot of fog.

Speaker Change: The rollout of all the things that are going up and that's not just for me thats for our customers and they were driven by what customers see okay, what lately and what affects them. It's hard to make a decision if you're a customer to go out and make an acquisition of product you're not going to see any growth even do would you rather than less miles maybe you don't have to replace in this off right.

W.M. Rush: Remember, we're driven by what customers see. Okay? What they do, what affects them. It's hard to make a decision if you're a customer, to go out and make an acquisition, a product, if you're not going to see any growth. Even to, what you're running less miles, maybe you don't have to replace it as often, right? There's a lot of things that are not positive, but out there from the macro perspective, the most positive thing is our ability, in my mind, to be able to navigate and make the right decisions given the market that we're handed. Again, though, I'm not projecting doom and gloom in the H2, I'm just giving uncertainty because I don't have clarity for it. As I get it, I'll be happy to tell you. That's why I gave you a little insight and cue today.

Rusty Rush: Remember, we're driven by what customers see. Okay? What they do, what affects them. It's hard to make a decision if you're a customer, to go out and make an acquisition, a product, if you're not going to see any growth. Even to, what you're running less miles, maybe you don't have to replace it as often, right? There's a lot of things that are not positive, but out there from the macro perspective, the most positive thing is our ability, in my mind, to be able to navigate and make the right decisions given the market that we're handed. Again, though, I'm not projecting doom and gloom in the H2, I'm just giving uncertainty because I don't have clarity for it. As I get it, I'll be happy to tell you. That's why I gave you a little insight and cue today.

Speaker Change: I mean, there is a lot of things that are not hesitant there out there from a macro perspective, the most positive desirability of my model to be able to navigate and make the right decisions given the market that we're headed so.

Speaker Change: Again, though I'm not projected that.

Speaker Change: Globally, the back App I'm, just given uncertainty because I don't have clarity for it.

Speaker Change: I get it that will be have been Jay as well.

Andrew Obin: Yeah. What do you think it would take for OEMs to get more clarity on production schedules for H2? Is it clarity on, and I appreciate that it's both uncertainty about whether or not we're going into recession, but it's also uncertainty about treatment of their content under the new tariff rules.

Speaker Change: Hello.

Speaker Change: What do you think it would take for OAS.

Speaker Change: To sort of get more clarity on sort of production schedules for the second half.

Speaker Change: Is that clarity on you know and I appreciate that it's both uncertainty about whether or not we're going to recession, but it's all it's uncertainty about sort of treatment of their content.

Speaker Change: Under the new tariff rules.

W.M. Rush: Yes.

Rusty Rush: Yes.

Andrew Obin: Do they go together hand in hand or, I know that one of the competitors has given pricing, but it doesn't seem to drive demand for trucks. What sort of unclogs this bottleneck?

Speaker Change: They go together hand in hand, or I know that one of the competitors has sort of has given pricing, but it doesn't seem to sort of drive demand for trucks.

Speaker Change: What sort of Unclog this bottleneck.

W.M. Rush: Well, one has, there's some stipulations wrapped around it. Remember, though, sometimes the devil's in the detail. Always remember that. As you look at it, look, Andrew, it's all the above. It's our customer's business. It is the clarity with tariffs. As I said, they just announced they're going to do a relook last week. That's supposed to happen over the next few weeks. It could change again, just like it did on the automotive side this week, right? Our customer's business is not, I think we saw that Q1 GDP results. Go look at the earnings releases of the public carriers. They're not that good. They haven't been. It's no disrespect to them, it's just the facts of the market they're dealing with. Okay?

Rusty Rush: Well, one has, there's some stipulations wrapped around it. Remember, though, sometimes the devil's in the detail. Always remember that. As you look at it, look, Andrew, it's all the above. It's our customer's business. It is the clarity with tariffs. As I said, they just announced they're going to do a relook last week. That's supposed to happen over the next few weeks. It could change again, just like it did on the automotive side this week, right? Our customer's business is not, I think we saw that Q1 GDP results. Go look at the earnings releases of the public carriers. They're not that good. They haven't been. It's no disrespect to them, it's just the facts of the market they're dealing with. Okay?

Speaker Change: Well what has builders worrisome stipulations wrapped around it.

Andrew Holden: The Devil's in the detail always remember that and so as you look at it look Andrew it's all the above it's because our customers business. It is higher the clarity with tariffs as I said, they just announced the irregular re-look last week, that's supposed to happen over the next few weeks.

Speaker Change: That can change again, just like it did on the automotive side today or this week right I mean.

Speaker Change: We don't I mean their business our customers' business is that I think we saw that first quarter GDP results go look at the earnings releases of the public carriers Theyre not that's good they haven't been and has no disrespect to them. It's just the facts of the markets are dealing with okay. Fortunately.

W.M. Rush: Fortunately, as I've talked about, we've had decent vocational business, decent municipal business, that have allowed us to continue to perform. What's going to have to happen is business has to get better. Okay? We can't have contraction in GDP and expect for business to get any better. People are going to have to start running more miles. We got to get clarity on tariffs. We think we have them right now, but as I said, they just announced last week they're going to relook at it again. We do not know about emissions. Okay? I do believe it's not going to be as stringent in 2021. We were supposed to have this big pre-buy, right? Big pre-buy, going to start in 2025. That's the end of the back half of 2025. Now, nobody even talks about it. Why? Because we don't even know the regs.

Rusty Rush: Fortunately, as I've talked about, we've had decent vocational business, decent municipal business, that have allowed us to continue to perform. What's going to have to happen is business has to get better. Okay? We can't have contraction in GDP and expect for business to get any better. People are going to have to start running more miles. We got to get clarity on tariffs. We think we have them right now, but as I said, they just announced last week they're going to relook at it again. We do not know about emissions. Okay? I do believe it's not going to be as stringent in 2021. We were supposed to have this big pre-buy, right? Big pre-buy, going to start in 2025. That's the end of the H2 of 2025. Now, nobody even talks about it. Why? Because we don't even know the regs.

Speaker Change: Talked about with decent vocational business nascent.

Speaker Change: Missile business would've allowed us to continue to perform.

Speaker Change: What's going to happen is business has to get better.

Speaker Change: We can have contraction in GDP and expect us to for business to get any better.

Speaker Change: Where people are going to have to start running more miles.

Speaker Change: We're going to.

Speaker Change: And when we got to get clarity on tariffs, but we think we add the buyback, but as I said, they just announced last week too good of a re look at it again, so and we do not know about emissions okay.

Speaker Change: I do believe it's not going to be as stringent in 'twenty. One we were supposed to have this big pre buy right <unk> got to start 25.

Speaker Change: Back half of 'twenty five now nobody talks about it why because we don't even know the rigs the rigs are not done is probably 45 days the house passed yesterday.

W.M. Rush: The regs are not done. It's probably 45 days. The House passed yesterday, some stuff around it. The Senate's got to take it on. Again, that's clarity, right? Are we going to need it, so price is going to go up X? Are we going to require these super long extended warranties? What are the milligrams going to be in the NOx stuff? All these, we're pushing out GHGs out into 2030. There's no solid answer on all of that. You throw all these things in, along with a tough economy, and not miles being driven, Andrew, I don't have a clear answer. All I can tell you is, I'm not predicting it's doom and gloom, I'm just saying it's a short window. I cannot see out that far, and I don't think anybody can really right now.

Rusty Rush: The regs are not done. It's probably 45 days. The House passed yesterday, some stuff around it. The Senate's got to take it on. Again, that's clarity, right? Are we going to need it, so price is going to go up X? Are we going to require these super long extended warranties? What are the milligrams going to be in the NOx stuff? All these, we're pushing out GHGs out into 2030. There's no solid answer on all of that. You throw all these things in, along with a tough economy, and not miles being driven, Andrew, I don't have a clear answer. All I can tell you is, I'm not predicting it's doom and gloom, I'm just saying it's a short window. I cannot see out that far, and I don't think anybody can really right now.

Speaker Change: Some stuff around at the Senate has got to take it on but.

Speaker Change: So again, that's clarity right, we're going to need a surprise going to go up X or we got a required these super long extended warranties what is what's the what are the.

Speaker Change: The program is going to be one of the nice stuff I mean, all of them were pushing <unk> out into 2030.

Speaker Change: But there's no there's no solid answer on all of that.

Speaker Change: And you can throw all these things are always a tough economy they are less.

Speaker Change: Not miles being driven.

Speaker Change: I don't have the answer all I can tell you is as I am.

Speaker Change: Well I'll just say it is very short window I cannot see out that far and I don't think anybody can really right now.

Speaker Change: And ability.

Andrew Obin: Just the last question from me. What's been access to credit? Are people still willing to finance customers? Are people who provide credit to the industry, are they pulling on credit or they're providing incentives? What's happening in terms of liquidity in the market and ability for you and your customers to access credit? Easy, hard, or the same? Thank you.

Speaker Change: Just the last question for me.

What's been access to credit are people still willing to finance customers are you now sort of people who provide credit to the industry.

Speaker Change: Providing you know are they pulling on credit or they're providing incentives.

Speaker Change: What's happening in terms of sort of liquidity in the market and the ability for you and your customers to access credit easing the heart of the same credit Scott I don't see any issues or greater.

W.M. Rush: About the same. I don't see any issues with credit at the moment. There's not a lot of people running around taking subprime credit. Other than that, if you've got a good balance sheet, you're a good customer, no, there's still availability of money out there for you. That's not an issue. When you say incentives, I don't know if you're talking about vehicles or not, there really is nothing like that going on because we're just pricing out a few months right now. Most of the manufacturers are. As I keep saying, auto manufacturers stepped up, devil's in the details, understand sometimes. Since they announced last week that they're relooking, I would be very concerned. I understand why manufacturers have not been able to stretch out. I don't like it, neither do customers.

Rusty Rush: About the same. I don't see any issues with credit at the moment. There's not a lot of people running around taking subprime credit. Other than that, if you've got a good balance sheet, you're a good customer, no, there's still availability of money out there for you. That's not an issue. When you say incentives, I don't know if you're talking about vehicles or not, there really is nothing like that going on because we're just pricing out a few months right now. Most of the manufacturers are. As I keep saying, auto manufacturers stepped up, devil's in the details, understand sometimes. Since they announced last week that they're relooking, I would be very concerned. I understand why manufacturers have not been able to stretch out. I don't like it, neither do customers.

Speaker Change: At the moment.

Speaker Change: Theres not a lot of people running around.

Speaker Change: Jacob.

Speaker Change: Subprime credit, but other than that you've got.

Speaker Change: We've got a good balance sheet.

Speaker Change: No I don't think theres still availability of money out there that's not an issue.

Speaker Change: When you say incentives I don't know, if you talked about vehicles or not.

Speaker Change: It really is nothing like that going on because we're just price it out.

Speaker Change: A few months right now most of the manufacturers as I keep saying our manufacturers step out Devils in the details.

Speaker Change: Understand sometimes.

Speaker Change: And that could be under since.

Speaker Change: Since they announced last week that they're re looking I would be very concerned.

Speaker Change: Concerned about I understand why manufacturers have not been able to stretch out I don't like it needed to do customers look which you are living in an environment that changes.

W.M. Rush: You're living in an environment that changes. It was changing February to March to April. Now we're doing another relook. It's just difficult. All I can tell you is, I'm very confident in us. Our track record speaks for itself. We're nimble. We will sell trucks, we will work on trucks, and we will continue to produce solid results. We have many levers to pull. We don't just sell trucks. We don't just sell parts. We don't just sell service. We sell a lot of different things. We have diverse lines to work with. We have many different levers to outperform the market, regardless of the hand we're dealt. Okay? That's all I can tell you about it.

Rusty Rush: You're living in an environment that changes. It was changing February to March to April. Now we're doing another relook. It's just difficult. All I can tell you is, I'm very confident in us. Our track record speaks for itself. We're nimble. We will sell trucks, we will work on trucks, and we will continue to produce solid results. We have many levers to pull. We don't just sell trucks. We don't just sell parts. We don't just sell service. We sell a lot of different things. We have diverse lines to work with. We have many different levers to outperform the market, regardless of the hand we're dealt. Okay? That's all I can tell you about it.

Speaker Change: Any change in February to March to April and now we're getting another reload. So it's just.

Speaker Change: It's just difficult all I can tell you as you know I'm very confident in us.

Speaker Change: Record speaks words, where example, we will make we will sell drugs, we will work on drugs and we will continue to produce solid results. We have many levers to pull it Scott is we don't just sell drugs. We don't just work sell parts. We don't just sell service. We saw a lot of evergreens, we able to dispense labs to work with we have many different.

Speaker Change: Levers to outperform the market regardless of the hand, we're dealt.

Speaker Change: That's all I can tell you about it I don't have the answers as to what the back half is going to look like but I can tell you as soon as I know I'll, let you know if you want to know.

W.M. Rush: I don't have the answers as to what the H2's going to look like, but I can tell you, as soon as I know, I'll let you know if you want to know.

Rusty Rush: I don't have the answers as to what the H2's going to look like, but I can tell you, as soon as I know, I'll let you know if you want to know.

Andrew Obin: I'll take it. Thanks so much, Rusty.

Rusty Rush: I'll take it thanks, so much rusty.

W.M. Rush: You bet you.

Rusty Rush: You bet you.

Speaker Change: As you.

Operator: Your next question comes from the line of Avinatan Jaroslawicz of UBS. Please go ahead.

Speaker Change: The next question comes from the lineup adhere.

Speaker Change: <unk> of UBS. Please go ahead.

Avinatan Jaroslawicz: Hi, good morning, guys.

Avi Jaroslawicz: Hi, good morning, guys.

Speaker Change: Hi, good morning, guys.

W.M. Rush: Good morning.

Rusty Rush: Good morning.

Speaker Change: Good morning.

Avinatan Jaroslawicz: I know it's got to be hard to parse this out, but in the hesitancy that you are seeing from customers, would you say it's more from the uncertainty to the prices or more the uncertainty on the macro impacts that would affect their revenues or profitability?

Avi Jaroslawicz: I know it's got to be hard to parse this out, but in the hesitancy that you are seeing from customers, would you say it's more from the uncertainty to the prices or more the uncertainty on the macro impacts that would affect their revenues or profitability?

Speaker Change: So I know, it's I know, it's got to be hard to parse this out but in.

Speaker Change: The hesitancy that you are seeing from customers.

Speaker Change: When you say, it's more from the uncertainty to the prices are more the uncertainty on the macro impact that would affect their revenues and profitability.

W.M. Rush: I would say, first and foremost, their business. I'm not going to say 60/40 or 55/45. It's both. The first thing that needs to happen for someone to get confidence is your own business has to be solid, right? I think if you read some of these reports, they've been really difficult, right? People can stretch out lives on vehicles. It's also very difficult when I can't price them and tell them what I'm going to sell them a truck for in October or November or any of those things. You do it with, Here, your price is this, with a caveat, unless somebody decides to change the tariff rules. Customers understand that. They don't like it. We don't like it. For me to say which is more, it's both, okay?

Rusty Rush: I would say, first and foremost, their business. I'm not going to say 60/40 or 55/45. It's both. The first thing that needs to happen for someone to get confidence is your own business has to be solid, right? I think if you read some of these reports, they've been really difficult, right? People can stretch out lives on vehicles. It's also very difficult when I can't price them and tell them what I'm going to sell them a truck for in October or November or any of those things. You do it with, Here, your price is this, with a caveat, unless somebody decides to change the tariff rules. Customers understand that. They don't like it. We don't like it. For me to say which is more, it's both, okay?

Speaker Change: I would say first and foremost.

Speaker Change: Their business.

Speaker Change: No.

Speaker Change: I mean, I don't know that I get that.

Speaker Change: I'm going to say 60, 40, or 50 545 is Bose.

Speaker Change: The first thing and needs to happen for someone to get governance is your own business has to be solid right and I think a reset of these reports.

Speaker Change: They've been really difficult right. So.

Speaker Change: People can stretch out lives of vehicles, but it's also very difficult when I can't price them and tell them, what I'm going to sell them a truck or in October or November or any of those things. So you're dealing with here your price exist with a caveat unless somebody.

Speaker Change: Does that change the tariff laws and rules.

Speaker Change: And our customers understand that they don't like it we don't like it.

Speaker Change: But.

Speaker Change: For me to say, which is more its both okay.

W.M. Rush: I know that's kind of a lame answer, but it's the truth, and that's all I will tell. It's the truth. It's both. First, your business has to be good. First off, no one's growing their fleet. Let's get real, okay? You're just trying to get replacement, but people can slow replacement down, too. Products are not what they were 30 years ago. They're much better. You can put more miles on products. By the way, if you're not running as many miles, I can run it longer. Keep appreciating what I got. Mileage, as I said earlier, mentioned a couple times, miles being run on vehicles. I'm not getting the ton miles, I'm getting the vehicles themselves are down. I can probably stretch it out a little bit. Again, we just need some certainty around all of this, by the way.

Rusty Rush: I know that's kind of a lame answer, but it's the truth, and that's all I will tell. It's the truth. It's both. First, your business has to be good. First off, no one's growing their fleet. Let's get real, okay? You're just trying to get replacement, but people can slow replacement down, too. Products are not what they were 30 years ago. They're much better. You can put more miles on products. By the way, if you're not running as many miles, I can run it longer. Keep appreciating what I got. Mileage, as I said earlier, mentioned a couple times, miles being run on vehicles. I'm not getting the ton miles, I'm getting the vehicles themselves are down. I can probably stretch it out a little bit. Again, we just need some certainty around all of this, by the way.

Speaker Change: Kind of a lame answer, but it's the truth.

Thats all I will tell so drove this boat, but first year business has to be good why my first off no one's growing their fleet, let's get real.

Speaker Change: The only people.

Speaker Change: Can you just try to get replaced but they will get slower place for Dow two products are not what they were 30 years ago, they're much better you're going to put more miles on Brian by the way, we're not running as many miles I can run it longer scale differentiate what I got.

Speaker Change: Mileage as I've said earlier, you mentioned, a couple times miles being run on vehicles that might get into the ton miles are getting the vehicles themselves.

Speaker Change: Or not or down.

Speaker Change: So I can probably stretch it out a little bit again.

Speaker Change: We used some certainty around all of this by the way.

W.M. Rush: Tell me what it's going to cost for a vehicle in January 2027. I don't know. We know it's going to be less than what it was projected to be a year ago. We just don't know how those regs come out and how that affects the OEMs and the engine manufacturer. What it's going to take from a cost perspective, from their perspective, especially on the warranty piece. Their business first and then tariffs next. I can price you for 60 days, but I really can't price you 6 months out without a caveat.

Rusty Rush: Tell me what it's going to cost for a vehicle in January 2027. I don't know. We know it's going to be less than what it was projected to be a year ago. We just don't know how those regs come out and how that affects the OEMs and the engine manufacturer. What it's going to take from a cost perspective, from their perspective, especially on the warranty piece. Their business first and then tariffs next. I can price you for 60 days, but I really can't price you 6 months out without a caveat.

Speaker Change: Tell me, what it's going to cost per vehicle in January of 2000.

Speaker Change: I don't know, we know it's going to be less than what it was projected to be a year ago.

Speaker Change: Just don't know how those regs come out and how that affects the Oems and the engine manufacturer.

Speaker Change: What is going to take from us.

Speaker Change: From a cost perspective from their perspective, especially on the warranties.

Speaker Change: So.

Speaker Change: Their business first in terms of mix, but we can bracket pricing for 60 days, but I really get prices six months out without a caveat.

Avinatan Jaroslawicz: Right. No,

Avi Jaroslawicz: Right. No. That definitely makes sense. I guess part of what I'm trying to understand is just, if the economy does end up holding up okay, what kind of demand destruction we could see just from the higher prices? I don't know if you have a view on that. I'd be curious.

Speaker Change: Yes.

W.M. Rush: Sorry

Speaker Change: Alright.

Avinatan Jaroslawicz: that definitely makes sense. I guess part of what I'm trying to understand is just, if the economy does end up holding up okay, what kind of demand destruction we could see just from the higher prices? I don't know if you have a view on that. I'd be curious.

Speaker Change: That definitely makes sense I guess part of what I'm trying to understand is this.

Speaker Change: The economy does end up holding up okay.

Speaker Change: What kind of demand destruction, we can see just from the higher prices I don't know if you have it.

Speaker Change: It would be on that.

W.M. Rush: Well, I think we'll see. If the economy would hold up and just, this is what it's going to be. It's something I've always told everybody, you tell me the rules, and I'll figure out how to play the game. The problem is they keep changing the rules, man. That's made it a little bit difficult, not just for me, but for my customer base. The cost is what the cost is. Unfortunately, prices of trucks have gone up dramatically, as we all know. It's crazy to me. I think back to how much they've accelerated over the last few years, especially the last couple, three. Your business has to be better. Why? You can push those costs through, and that has not been the case. We had an oversupply of trucks for a couple years, remember?

Rusty Rush: Well, I think we'll see. If the economy would hold up and just, this is what it's going to be. It's something I've always told everybody, you tell me the rules, and I'll figure out how to play the game. The problem is they keep changing the rules, man. That's made it a little bit difficult, not just for me, but for my customer base. The cost is what the cost is. Unfortunately, prices of trucks have gone up dramatically, as we all know. It's crazy to me. I think back to how much they've accelerated over the last few years, especially the last couple, three. Your business has to be better. Why? You can push those costs through, and that has not been the case. We had an oversupply of trucks for a couple years, remember?

Speaker Change: Be curious well I think I think we will see it weakens the economy would hold up.

Speaker Change: This is what is going to be.

Speaker Change: Mobile is totally but you tell me the rules.

Speaker Change: Probably the game problem is they keep changing the rules that and so that's made it a little bit difficult not just for me, but for my customer base. So.

Speaker Change: The cost saves what the cost is.

Speaker Change: Prices of trucks have gone up dramatically as we all know it's crazy to me.

Speaker Change: But they have accelerated over the last few years, especially the last couple of three.

Speaker Change: <unk>.

Speaker Change: But I think your business has to be better why so you can push those costs through.

Speaker Change: And that has not been the case, we had an oversupply of trucks for a couple of years remember we sold all those trucks and rail.

W.M. Rush: We sold all those trucks really in 2022 and 2023. We still had a pretty big year in 2024, more than we were anticipating when we went into it. There's been an oversupply of trucks for the freight that's out there. I've never seen a freight recession last this long, right? It's been quite unique. It's on the negative side of uniqueness, by the way. I'm hoping that we can get some stability in the overall economy and continue to, I'm not sure where we're at in the last couple of months, taking trucks out of the marketplace because we had to get a balance between supply and demand. Remember, 6 months ago, we thought we saw it turning, right? We're going to get it turned. By right now, they're going to get rate increases. If they are, they're really slight.

Rusty Rush: We sold all those trucks really in 2022 and 2023. We still had a pretty big year in 2024, more than we were anticipating when we went into it. There's been an oversupply of trucks for the freight that's out there. I've never seen a freight recession last this long, right? It's been quite unique. It's on the negative side of uniqueness, by the way. I'm hoping that we can get some stability in the overall economy and continue to, I'm not sure where we're at in the last couple of months, taking trucks out of the marketplace because we had to get a balance between supply and demand. Remember, 6 months ago, we thought we saw it turning, right? We're going to get it turned. By right now, they're going to get rate increases. If they are, they're really slight.

Speaker Change: Really in 'twenty, two and 'twenty three.

Speaker Change: <unk> Big Big year 24, more than we were anticipating when we would add to it.

Speaker Change: No.

Speaker Change: There has been an oversupply of trucks, where the freight is out there.

Speaker Change: And it's just been a I've never seen a freight recession last this long right.

Speaker Change: While unique so on the negative side of uniqueness by the way.

Speaker Change: So I mean.

Speaker Change: I know.

Speaker Change: I am hoping that we can get some stability.

Speaker Change: And the overall economy.

Speaker Change: Continue I'm not sure where we're at in the last couple of months, taking trucks out of the marketplace will be able to get a balance between supply and demand.

Speaker Change: So the customers what we thought remember six months ago, we thought was solid target.

Speaker Change: We're going to get it turned a buyer right now.

Speaker Change: If we get rate increases.

Speaker Change: Yes. They are they are really slight.

W.M. Rush: You've seen the reports that are out there. They're not what we were anticipating getting on contracts 6 months ago. Who would have anticipated all this upheaval with tariffs and everything else? You look at what's going on, going to be going on at the ports. We haven't seen all the effects of it yet either. Those effects are still coming downstream. Again, I'm not being a Debbie Downer, I'm just a realist. I have concern for my friends down in California. Those ports with all that Chinese stuff that comes in, and how much it flows through the Port of LA and the Port of Long Beach. Now, we'll navigate it, but it's still not good for business overall. What we're doing is more of a longer term, all these tariffs to drive manufacturing back to our country.

Rusty Rush: You've seen the reports that are out there. They're not what we were anticipating getting on contracts 6 months ago. Who would have anticipated all this upheaval with tariffs and everything else? You look at what's going on, going to be going on at the ports. We haven't seen all the effects of it yet either. Those effects are still coming downstream. Again, I'm not being a Debbie Downer, I'm just a realist. I have concern for my friends down in California. Those ports with all that Chinese stuff that comes in, and how much it flows through the Port of LA and the Port of Long Beach. Now, we'll navigate it, but it's still not good for business overall. What we're doing is more of a longer term, all these tariffs to drive manufacturing back to our country.

Speaker Change: <unk> seen the reports that are out there.

Speaker Change: What we were anticipating giving on contracts.

Speaker Change: Six months ago, but.

Speaker Change: Anticipated dollars upheaval was.

Speaker Change: Tariffs and everything else.

Speaker Change: You look at what's going on here. We go are the ports, we haven't seen all the effects of it yet either.

Speaker Change: Those effects are still coming downstream again.

Speaker Change: I'm just a realist.

Speaker Change: Yeah.

Speaker Change: Our concern is doesn't California.

Speaker Change: Sports with all our Chinese.

Speaker Change: But it comes in and how much of it flows through the board will aid in the port of long Beach that will navigate it but it's still not good for business overall.

Speaker Change: Because what we're doing is more of a longer term always tends to drive manufacturing back to our country Youll, just add water and stir or flip a light switch and we spoke about new manufacturing plants that takes time when there is an interim of pain.

W.M. Rush: You don't just add water and stir or flip a light switch, and we open up new manufacturing plants. That takes time. Well, there's an interim of pain. Even our president said that. There's going to be some pain. That's what we're dealing with, and I think that's what we will continue to deal with for the near-term future. We haven't gotten through all of it yet by any stretch, okay? I can tell you that. It keeps changing. It's just hard.

Rusty Rush: You don't just add water and stir or flip a light switch, and we open up new manufacturing plants. That takes time. Well, there's an interim of pain. Even our president said that. There's going to be some pain. That's what we're dealing with, and I think that's what we will continue to deal with for the near-term future. We haven't gotten through all of it yet by any stretch, okay? I can tell you that. It keeps changing. It's just hard.

Speaker Change: President and CEO.

Speaker Change: There's going to be some pain.

Speaker Change: And that's what we're dealing with.

Speaker Change: That's what we will continue to deal with the near term future.

Speaker Change: Because it's just we haven't we haven't got the all over to yet by any stretch. Okay. Now I can tell you that and then it keeps changing.

Speaker Change: It's just hard.

Avinatan Jaroslawicz: Yeah, definitely understand that. Just want to circle back to the regulations quickly. Last quarter, you felt pretty confident that we would still see the low NOx regulations take place with or without the warranty. You still think that's the case or just no confidence?

Avi Jaroslawicz: Yeah, definitely understand that. Just want to circle back to the regulations quickly. Last quarter, you felt pretty confident that we would still see the low NOx regulations take place with or without the warranty. You still think that's the case or just no confidence?

Speaker Change: Yeah definitely understand that.

Speaker Change: Just wanted to circle back to the regulations quickly last last quarter you are.

Speaker Change: Pretty confident that we will still see the low Nox regulations.

Speaker Change: With or without the warranty.

Speaker Change: So I think that's the key.

Speaker Change: Or just no.

W.M. Rush: Well-

Rusty Rush: Well. Well, I don't want to get in where I shouldn't be. I think you're going to have something lower, yeah. It may not be as low as what they had, okay? That's being debated right now by people above my pay grade. I would tell you that sure it's going to be lower than what it currently is, it may not be as low as what was originally said, or originally put out there. That's going on as we speak. That debate is going on as we speak. Giving insight into that would probably be a little out of my, I don't think I should. I don't know. Let's see if someone's going to do it. Yeah, we'll know in this quarter. That's why I said earlier, we'll know about in 45 days or so. We'll know where we're at.

Avinatan Jaroslawicz: We even have a basis?

Speaker Change: You can have it there.

W.M. Rush: Well, I don't want to get in where I shouldn't be. I think you're going to have something lower, yeah. It may not be as low as what they had, okay? That's being debated right now by people above my pay grade. I would tell you that sure it's going to be lower than what it currently is, it may not be as low as what was originally said, or originally put out there. That's going on as we speak. That debate is going on as we speak. Giving insight into that would probably be a little out of my, I don't think I should. I don't know. Let's see if someone's going to do it. Yeah, we'll know in this quarter. That's why I said earlier, we'll know about in 45 days or so. We'll know where we're at.

Speaker Change: I don't want to.

Speaker Change: I don't want to get into where I should be.

Speaker Change: <unk> got to have something lower yeah.

Speaker Change: But it may not be as low as what they had.

Speaker Change: That's been that's being debated neuroma right now by people above my pay grade.

Speaker Change: So.

Speaker Change: I would tell you that.

Speaker Change: Sure it is going to be lower than what it currently is but it's it may not be as low as.

Speaker Change: What was originally said originally.

Speaker Change: <unk> put out there, so but thats going on as we speak.

Speaker Change: But that debate is going on as we speak.

I don't.

Speaker Change: Giving insight into that would probably be a little out of my.

Speaker Change: I don't think I should so I don't know see somewhere around there.

Speaker Change: Yes, well, we'll know we'll know it.

Speaker Change: This quarter, that's why I said earlier with logos, Boston 45 days or so we will know where we're at by the time. This quarter is over with we'll have the answers. Some we'll just let it play out and stay out of it but.

W.M. Rush: By the time this quarter is over with, we'll have the answers. I'm going to just let it play out and stay out of it. It's going to be a good thing, okay? There's nothing wrong. What we were trying to do was just not right. This country in no way was prepared to flip a switch and everything go electric and all this stuff. We don't have the grid, the infrastructure. That's a long-term equation, and we had people running with it like it's just easy, like add water and stir. Well, there's 120 years of infrastructure investment in internal combustion, and you're not going to change it in 5 or 6 years. That was asinine to believe you could do that. It's a good thing.

Rusty Rush: By the time this quarter is over with, we'll have the answers. I'm going to just let it play out and stay out of it. It's going to be a good thing, okay? There's nothing wrong. What we were trying to do was just not right. This country in no way was prepared to flip a switch and everything go electric and all this stuff. We don't have the grid, the infrastructure. That's a long-term equation, and we had people running with it like it's just easy, like add water and stir. Well, there's 120 years of infrastructure investment in internal combustion, and you're not going to change it in 5 or 6 years. That was asinine to believe you could do that. It's a good thing.

Speaker Change: It's going to be a good day okay.

Speaker Change: Nothing wrong, what we were trying to do.

Speaker Change: It was just not right. This cut rate no way was prepared flip a switch and everything go electric and all of this.

Speaker Change: We don't have a grid infrastructure.

Speaker Change: Long term equation, and we have people running with it.

Speaker Change: It is easy like add water stirrup wells are 120 years of infrastructure investment in internal combustion and youre not going to change it in five or six years that was asked about it to believe you can do that so it's a good thing had works itself out.

W.M. Rush: How it works itself out as to what the levels are, that's for smarter people than me to figure out, but it's going to be the right thing, right? It is the right thing to do. That's all I can tell you. What that does is it probably doesn't drive as big a pre-buy, right? Especially with the tough overall economic situation that we're suddenly liable to see caused by tariffs, not just by tariffs, but just everything that's going on right now. I'm not closing the door to a pre-buy in 2026 by any stretch, but every day that goes by, 1 January 2027 gets closer. You're condensing it, right? You're condensing that time frame, and you're fighting an uphill battle when you've got news, the reports of how rough it is on customers anyway.

Rusty Rush: How it works itself out as to what the levels are, that's for smarter people than me to figure out, but it's going to be the right thing, right? It is the right thing to do. That's all I can tell you. What that does is it probably doesn't drive as big a pre-buy, right? Especially with the tough overall economic situation that we're suddenly liable to see caused by tariffs, not just by tariffs, but just everything that's going on right now. I'm not closing the door to a pre-buy in 2026 by any stretch, but every day that goes by, 1 January 2027 gets closer. You're condensing it, right? You're condensing that time frame, and you're fighting an uphill battle when you've got news, the reports of how rough it is on customers anyway.

Speaker Change: As to what the levels are as for smarter people than me to figure out, but it's going to be the right rate right that is the right thing to do so that's all I can tell you what that does is it probably doesn't drive as big a pre bought bright, especially was a tough.

Speaker Change: Overall economic situation that we're suddenly arrival to seats caused by tariffs.

Speaker Change: Just by carriers produced everything that's going on right now so.

Speaker Change: Well I'm not I'm not closing the door to a pre buy 26 by any stretch, but everyday that goes by that we're at 127 gets closer so youre convincing and drive a convincing that timeframe.

Speaker Change: You are fighting an uphill battle when you've got news, although reports who are carrier how rough it is on customers anyway.

W.M. Rush: Regardless, I got to have business, regardless of the price of a truck, regardless of the technology. I've got to have my business fairly straight so I can go buy something, right? Those are some headwinds. I would expect a pre-buy of some kind. I just don't think you can clearly say what it'll be, given the unknowns of regulations, first off, and the unknowns around the tariffs. Really, when you talk about the federally unknown regulations, those regulations will have lots to say. Their business. Remember, first and foremost, it's your own business. I could take you back. I remember in 2010 when we switched to SCR, okay? We were going to have this big year in 2009. Well, you remember 2008 and 2009? Well, the economy kind of rode over all that, didn't it? You can go look at the numbers.

Rusty Rush: Regardless, I got to have business, regardless of the price of a truck, regardless of the technology. I've got to have my business fairly straight so I can go buy something, right? Those are some headwinds. I would expect a pre-buy of some kind. I just don't think you can clearly say what it'll be, given the unknowns of regulations, first off, and the unknowns around the tariffs. Really, when you talk about the federally unknown regulations, those regulations will have lots to say. Their business. Remember, first and foremost, it's your own business. I could take you back. I remember in 2010 when we switched to SCR, okay? We were going to have this big year in 2009. Well, you remember 2008 and 2009? Well, the economy kind of rode over all that, didn't it? You can go look at the numbers.

Speaker Change: Regardless I gotta have business, regardless of the price of a drug regardless of the technology I'd, rather have my business fairly straight so I could go buy something right. So those are some headwinds.

Speaker Change: We would expect a pre buy of sub debt I. Just don't think it's you can clearly say what it will be given we are known as the regulations versus first half.

Speaker Change: We are known as around the tariffs, but really when you're talking about the federally unknown of regulations.

Speaker Change: Those regulations will have a lot to say and then their business remember first and foremost ensure owners.

Speaker Change: I could take you back.

Speaker Change: I remember in 2010, when we switch to SCR.

Speaker Change: We were going to have this big big here at Orion a member get member OE No nine while the economy kind of wrote overall that business and you can go look at the numbers, though not never made it <unk> it was supposed to so.

W.M. Rush: 2009 never made the pre-buy it was supposed to. Again, hopefully we can get the economy straight. Hopefully we can settle down some of this uncertainty that's out there, that's been created in this last 100 days, and get back on where we can see a window, see a path in front of us to where, okay, I can make that investment. I can do this. I know where my business is going. That's the key thing. All these things getting flushed out and giving us some direction. That's the most important thing I can tell you for someone like myself, I know, running my business. I'll say it one last time, is the fact that I am very confident in Rush Enterprises being able to make adjustments and navigate the uncertainties of the world we're in and give performance above and beyond any of our peers.

Rusty Rush: 2009 never made the pre-buy it was supposed to. Again, hopefully we can get the economy straight. Hopefully we can settle down some of this uncertainty that's out there, that's been created in this last 100 days, and get back on where we can see a window, see a path in front of us to where, okay, I can make that investment. I can do this. I know where my business is going. That's the key thing. All these things getting flushed out and giving us some direction. That's the most important thing I can tell you for someone like myself, I know, running my business. I'll say it one last time, is the fact that I am very confident in Rush Enterprises being able to make adjustments and navigate the uncertainties of the world we're in and give performance above and beyond any of our peers.

Speaker Change: Again, hopefully we can get the heck out of his great openly weakening.

Speaker Change: Nonetheless.

Speaker Change: Settled down some of this uncertainty that's out there that's been created.

Speaker Change: And this last 100 days and get background of where we can see.

Speaker Change: We see a window seat a path in front of us to where okay. I can make that investment I can do this.

Rusty Rush: No where my business is going that's the key thing always things getting flushed out yet given us <unk>. That's the most important thing I can tell you for someone like myself I know running my business, but I will say one last time is the fact that I am very confident and rush enterprises being able to make adjustments.

Rusty Rush: [laughter] and navigate the uncertainties of the world, where it had good performance above and beyond the end of our peers.

Avinatan Jaroslawicz: All makes sense to me. All right. Appreciate the perspective. Best of luck.

Avi Jaroslawicz: All makes sense to me. All right. Appreciate the perspective. Best of luck.

Rusty Rush: All makes sense to me alright, I appreciate the perspective.

W.M. Rush: You bet.

Rusty Rush: You bet.

Operator: I will now turn the call back over to Mr. W.M. Rush, Chairman, CEO, and President, for the closing remarks. Please go ahead.

Operator: I will now turn the call back over to Mr. Rusty Rush, Chairman, CEO, and President, for the closing remarks. Please go ahead.

Rusty Rush: I will now turn the call back over to Mr. Rusty Rush, Chairman CEO and President for closing remarks. Please go ahead.

W.M. Rush: Sure. Well, I appreciate everyone's attendance this morning. I look forward to talking to you sometime in late July, hopefully with some more certainty and clarity. Maybe I can give you a six-month window instead of a three-month window, okay? Anyway, everybody have a great day. Thank you very much.

Rusty Rush: Sure. Well, I appreciate everyone's attendance this morning. I look forward to talking to you sometime in late July, hopefully with some more certainty and clarity. Maybe I can give you a six-month window instead of a three-month window, okay? Anyway, everybody have a great day. Thank you very much.

Rusty Rush: Well I appreciate everyone's attendance this morning, and I look forward to talking to you sometime in late July hopefully public with some more certainty and clarity I can give you a six month window instead of a three month window. Okay anyway, everybody have a great day. Thank you very much.

Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Speaker Change: Ladies and gentlemen that concludes today's call. Thank you all for joining you may now disconnect.

Speaker Change: [music].

Q1 2025 Rush Enterprises Inc Earnings Call - Q&A

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