Truck dealership Rush Enterprises Inc. saw first-quarter net income climb and revenues dip, as truck sales, industry-wide, plummeted nearly 30% year-over-year amid challenging market conditions, it said.
Net income for the period ended March 31 rose to $14.5 million, or 36 cents per share, compared with $2.4 million, or 6 cents, as the company continued to manage costs aggressively throughout its organization, it said.
Also, aftermarket services accounted for about 67% of its total gross profit in the quarter, with parts, service and body shop revenues up 2.4%, compared with the first quarter of 2016, the company said.
Its quarterly absorption ratio was 113.4% in the first quarter of 2017. Experts say the absorption rate is the percentage that the parts, service and body shop operating gross covers of the total of its combined department operating expenses plus the total of fixed expenses and dealer salary.
Its net income in the year-earlier period was negatively impacted by a non-recurring restructuring charge of $8.1 million related to its closing of certain dealerships and the disposition of excess real estate in the first quarter of 2016. It reduced earnings by 12 cents in the first quarter last year.
Excluding the charge, net income increased by $7.2 million in the first quarter of 2017 compared with the first quarter of 2016, the San Antonio-based company said.
Revenue slid to $1.04 billion, down from $1.07 billion, a year earlier, but was buffered from further declines by modest increases in activity in both the energy and construction sectors, it said.
“Due to the timing of several large fleet deliveries in the first quarter of 2016, we showed a decline in our medium-duty sales this quarter, but we expect to remain on pace with the market throughout the rest of 2017,” Rush Chairman, CEO and President W.M. “Rusty” Rush, said in a statement. “We continue to see demand for our ‘Ready-to-Roll’ work-ready inventory, especially in the Southeast where construction is strong, as well as strong demand in our vehicle lease and rental markets.”
Meanwhile, total U.S. Class 8 retail sales were 38,023 units in the quarter, down 29% compared with the same time period last year, the company said.
| By Transport Topics |
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