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What changed in RUSH ENTERPRISES INC \TX\'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of RUSH ENTERPRISES INC \TX\'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+327 added−312 removedSource: 10-K (2024-02-23) vs 10-K (2023-02-23)

Top changes in RUSH ENTERPRISES INC \TX\'s 2023 10-K

327 paragraphs added · 312 removed · 269 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

102 edited+17 added−11 removed73 unchanged
Biggest changePeters International, Dennis Eagle Yes Yes No Springfield International, Isuzu, Dennis Eagle Yes Yes No West Plains International, Dennis Eagle Yes Yes No Nevada Las Vegas Peterbilt Yes Yes No New Mexico Albuquerque Peterbilt Yes Yes Yes Farmington Peterbilt No Yes No Las Cruces Peterbilt Yes Yes No North Carolina Asheville International Yes Yes No Charlotte International, Hino, Isuzu Yes Yes Yes Hickory International Yes Yes No Ohio Akron International, IC Bus Yes Yes No Cincinnati International, IC Bus, Isuzu, Ford Yes Yes Yes Cleveland International, IC Bus Yes Yes No Columbus International, IC Bus, Isuzu(1) Yes Yes No Dayton International, IC Bus, Isuzu Yes Yes No Lima International, IC Bus Yes Yes No Oklahoma Ardmore Peterbilt Yes Yes No Oklahoma City Peterbilt, Hino, Ford, Isuzu Yes Yes Yes Tulsa Peterbilt, Hino Yes Yes Yes Pennsylvania Greencastle None Yes Yes No Tennessee Memphis International, Isuzu, Dennis Eagle Yes Yes Yes Memphis Used Trucks None Yes Yes No Nashville Peterbilt Yes Yes Yes Texas Abilene Peterbilt Yes Yes No Amarillo Peterbilt Yes Yes No Arlington Peterbilt, Blue Bird, Micro Bird, Elkhart Yes Yes No Austin Peterbilt, Hino, Isuzu, Blue Bird, Micro Bird, Elkhart Yes Yes No Austin North Peterbilt No Yes No Beaumont Peterbilt Yes Yes No Brownsville Peterbilt, Elkhart Yes Yes No College Station Peterbilt Yes Yes No Corpus Christi Peterbilt, Hino, Isuzu, Blue Bird, Elkhart Yes Yes No Cotulla Peterbilt No Yes No Dalhart Peterbilt No Yes No (1) Our Isuzu franchise is operated out of our Rush Truck Leasing - Columbus location. 7 Table of Contents Rush Truck Center Location Commercial Vehicle Franchise(s) Truck Sales Parts and Service Collision Center Dallas Heavy-Duty Peterbilt, Blue Bird, Micro Bird, Elkhart Yes Yes Yes Dallas Medium-Duty Peterbilt, Hino, Blue Bird, Micro Bird, Elkhart Yes Yes No Dallas Light & Medium-Duty Ford, Isuzu Yes Yes No Dallas South Peterbilt Yes Yes No El Paso Peterbilt, Hino, Isuzu Yes Yes Yes Fort Worth Peterbilt, Blue Bird, Micro Bird, Elkhart Yes Yes No Houston Peterbilt, Hino, Blue Bird, Micro Bird, Elkhart Yes Yes Yes Houston Medium-Duty Peterbilt, Hino Yes Yes No Laredo Peterbilt, Blue Bird, Micro Bird, Elkhart Yes Yes Yes Lubbock Peterbilt Yes Yes No Lufkin Peterbilt, Blue Bird, Micro Bird, Elkhart Yes Yes Yes Odessa Peterbilt Yes Yes No Pharr Peterbilt, Hino, Blue Bird, Micro Bird, Elkhart Yes Yes Yes Wichita Falls Peterbilt Yes Yes No San Antonio Peterbilt, Hino, Blue Bird, Micro Bird, Elkhart Yes Yes Yes Sealy Peterbilt, Isuzu, Blue Bird, Micro Bird, Elkhart Yes Yes No Texarkana Peterbilt, Hino, Isuzu, Blue Bird, Micro Bird, Elkhart Yes Yes No Tyler Peterbilt, Blue Bird, Micro Bird, Elkhart Yes Yes No Victoria Peterbilt Yes Yes No Waco Peterbilt, Hino, Isuzu, Blue Bird, Micro Bird, Elkhart Yes Yes No Wichita Falls Peterbilt Yes Yes No Utah Ogden International, IC Bus Yes Yes No Salt Lake City International, IC Bus Yes Yes Yes Springville International Yes Yes No St.
Biggest changePeters International, Dennis Eagle Yes Yes No Springfield International, Isuzu, Dennis Eagle Yes Yes No Nevada Las Vegas Peterbilt Yes Yes No New Mexico Albuquerque Peterbilt Yes Yes Yes Farmington Peterbilt No Yes No Las Cruces Peterbilt Yes Yes No North Carolina Asheville International Yes Yes No Charlotte International, Hino, Isuzu Yes Yes Yes Hickory International Yes Yes No Ohio Akron International, IC Bus Yes Yes No Cincinnati International, IC Bus, Isuzu, Ford Yes Yes Yes Cleveland International, IC Bus Yes Yes No Columbus International, IC Bus, Isuzu(1) Yes Yes No Dayton International, IC Bus, Isuzu Yes Yes No Lima International, IC Bus Yes Yes No (1) Our Isuzu franchise is operated out of our Rush Truck Leasing - Columbus location. 3 Table of Contents Rush Truck Center Location Commercial Vehicle Franchise(s) Truck Sales Parts and Service Collision Center Oklahoma Ardmore Peterbilt Yes Yes No Oklahoma City Peterbilt, Hino, Ford, Isuzu Yes Yes Yes Tulsa Peterbilt, Hino Yes Yes Yes Pennsylvania Greencastle None Yes Yes No Tennessee Memphis International, Isuzu, Dennis Eagle Yes Yes Yes Memphis Used Trucks None Yes Yes No Nashville Peterbilt Yes Yes Yes Texas Abilene Peterbilt Yes Yes No Amarillo Peterbilt Yes Yes No Arlington Peterbilt, Blue Bird, Micro Bird, Elkhart Yes Yes No Austin Peterbilt, Hino, Isuzu, Blue Bird, Micro Bird, Elkhart Yes Yes No Austin North Peterbilt No Yes No Beaumont Peterbilt Yes Yes No Brownsville Peterbilt, Elkhart Yes Yes No College Station Peterbilt Yes Yes No Corpus Christi Peterbilt, Hino, Isuzu, Blue Bird, Elkhart Yes Yes No Cotulla Peterbilt No Yes No Dalhart Peterbilt No Yes No Dallas Heavy-Duty Peterbilt, Blue Bird, Micro Bird, Elkhart Yes Yes Yes Dallas Medium-Duty Peterbilt, Hino, Blue Bird, Micro Bird, Elkhart Yes Yes No Dallas Light & Medium-Duty Ford, Isuzu Yes Yes No Dallas South Peterbilt No Yes No Dallas TRP None No Yes No El Paso Peterbilt, Hino, Isuzu Yes Yes Yes Fort Worth Peterbilt, Blue Bird, Micro Bird, Elkhart Yes Yes No Houston Peterbilt, Hino, Blue Bird, Micro Bird, Elkhart Yes Yes Yes Houston Medium-Duty Peterbilt, Hino Yes Yes No Laredo Peterbilt, Blue Bird, Micro Bird, Elkhart Yes Yes Yes Lubbock Peterbilt Yes Yes No Lufkin Peterbilt, Blue Bird, Micro Bird, Elkhart Yes Yes Yes Odessa Peterbilt Yes Yes No Pharr Peterbilt, Hino, Blue Bird, Micro Bird, Elkhart Yes Yes Yes San Antonio Peterbilt, Hino, Blue Bird, Micro Bird, Elkhart Yes Yes Yes Sealy Peterbilt, Isuzu, Blue Bird, Micro Bird, Elkhart Yes Yes No Texarkana Peterbilt, Hino, Isuzu, Blue Bird, Micro Bird, Elkhart Yes Yes No Tyler Peterbilt, Blue Bird, Micro Bird, Elkhart Yes Yes No Victoria Peterbilt Yes Yes No Waco Peterbilt, Hino, Isuzu, Blue Bird, Micro Bird, Elkhart Yes Yes No Wichita Falls Peterbilt, Blue Bird, Micro Bird Yes Yes No 4 Table of Contents Rush Truck Center Location Commercial Vehicle Franchise(s) Truck Sales Parts and Service Collision Center Utah Ogden International, IC Bus Yes Yes No Salt Lake City International, IC Bus Yes Yes Yes Springville International Yes Yes No St.
Rush Truck Centers. Our Rush Truck Centers are located in Alabama, Arizona, Arkansas, California, Colorado, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Missouri, Nevada, New Mexico, North Carolina, Ohio, Oklahoma, Pennsylvania, Tennessee, Texas, Utah, Virginia and Ontario, Canada.
Our Rush Truck Centers are located in Alabama, Arizona, Arkansas, California, Colorado, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Missouri, Nevada, New Mexico, North Carolina, Ohio, Oklahoma, Pennsylvania, Tennessee, Texas, Utah, Virginia and Ontario, Canada.
We provide an allowance for repossession losses and early repayment penalties that we may incur under these finance contracts. We sell, as agent, a complete line of property and casualty insurance to commercial vehicle owners.
We provide an allowance for repossession losses and early repayment penalties that we may incur under these finance contracts. We sell, as an agent, a complete line of property and casualty insurance to commercial vehicle owners.
Our core values are productivity, fairness, excellence and positive attitude and are described below. ● Productivity means constantly striving toward efficiency and success in all interactions and activities while working with a common purpose and sense of urgency. ● Fairness characterizes our honesty, integrity, truthfulness, dependability and reliability in everything we do. ● Excellence means doing it better than everyone else does.
Our core values are productivity, fairness, excellence and a positive attitude and are described below. ● Productivity means constantly striving toward efficiency and success in all interactions and activities while working with a common purpose and sense of urgency. ● Fairness characterizes our honesty, integrity, truthfulness, dependability and reliability in everything we do. ● Excellence means doing it better than everyone else does.
We have entered into nonexclusive dealership agreements with Navistar that authorize us to act as a dealer of International heavy- and medium-duty trucks and, in certain markets, IC buses. Our Navistar areas of responsibility currently encompass areas in the states of Arkansas, Georgia, Idaho, Illinois, Indiana, Kansas, Missouri, North Carolina, Ohio, Tennessee, Utah and Virginia.
International. We have entered into nonexclusive dealership agreements with Navistar that authorize us to act as a dealer of International heavy- and medium-duty trucks and, in certain markets, IC buses. Our Navistar areas of responsibility currently encompass areas in the states of Arkansas, Georgia, Idaho, Illinois, Indiana, Kansas, Missouri, North Carolina, Ohio, Tennessee, Utah and Virginia.
Pursuant to the terms of the RTC Canada Revolving Credit Agreement, BMO agreed to make up to $120.0 million CAD of revolving credit loans to finance certain of RTC Canada’s capital expenditures, including commercial vehicle purchases and other equipment to be leased or rented through RTC Canada’s Idealease franchise, with an additional $20.0 million available upon the request of RTC Canada and consent of BMO.
Pursuant to the terms of the RTC Canada Revolving Credit Agreement, BMO agreed to make up to $120.0 million CAD of revolving credit loans to finance certain of RTC Canada’s capital expenditures, including commercial vehicle purchases and other equipment to be leased or rented through RTC Canada’s Idealease franchise, with an additional $20.0 million CAD available upon the request of RTC Canada and consent of BMO.
Our backlog is determined quarterly by multiplying the number of new commercial vehicles for each particular type of commercial vehicle ordered by a customer at our Rush Truck Centers by the recent average selling price for that type of commercial vehicle. We include only confirmed orders in our backlog. However, such orders are subject to cancellation.
Our backlog is determined quarterly by multiplying the number of new commercial vehicles for each commercial vehicle ordered by a customer at our Rush Truck Centers by the recent average selling price for that type of commercial vehicle. We include only confirmed orders in our backlog. However, such orders are subject to cancellation.
We have established relationships with multiple trade schools and universities across the country, which we utilize as a source for entry-level talent. Additionally, we believe it is incumbent upon all our managers to continuously monitor their local markets for experienced individuals who might be successful additions to our organization. Compensation Programs and Employee Benefits.
We have established relationships with multiple trade schools and universities across the country that we utilize as a source for entry-level talent. Additionally, we believe it is incumbent upon all our managers to continuously monitor their local markets for experienced individuals who might be successful additions to our organization. Compensation Programs and Employee Benefits.
Given the potential for industry headwinds in the coming months caused by lower spot rates and higher interest rates, which could negatively impact industry demand for new commercial vehicles moving forward, we believe that the longer it takes to fill our backlog, the greater the risk that a significant amount of commercial vehicle orders currently reflected in our backlog could be cancelled.
Given the potential for industry headwinds in the coming months caused by lower spot rates and high interest rates, which could negatively impact industry demand for new commercial vehicles moving forward, we believe that the longer it takes to fill our backlog, the greater the risk that a significant amount of commercial vehicle orders currently reflected in our backlog could be cancelled.
Advances under the PLC Agreement bear interest per annum, payable on the fifth day of the following month, at our option, at either (A) the prime rate, minus 1.55%, provided that the floating rate of interest is subject to a floor of 0%, or (B) a fixed rate, to be determined between us and PLC in each instance of borrowing at a fixed rate.
Advances under the PLC Agreement bear interest per annum, payable on the fifth day of the following month, at our option, at either (A) the prime rate, minus 1.95%, provided that the floating rate of interest is subject to a floor of 0%, or (B) a fixed rate, to be determined between us and PLC in each instance of borrowing at a fixed rate.
The WF Credit Agreement expires on September 14, 2024, although, upon the occurrence and during the continuance of an event of default, the WF Agent has the right to, or upon the request of the required lenders must, terminate the commitments and declare all outstanding principal and interest due and payable. We may terminate the commitments at any time.
The WF Credit Agreement expires on September 14, 2026, although, upon the occurrence and during the continuance of an event of default, the WF Agent has the right to, or upon the request of the required lenders must, terminate the commitments and declare all outstanding principal and interest due and payable. We may terminate the commitments at any time.
In 2019, we purchased a 50% equity interest in an entity in Canada, Rush Truck Centres of Canada Limited (“RTC Canada”) and on May 2, 2022, we purchased an additional 30% equity interest in RTC Canada that increased our equity interest to 80%. RTC Canada currently owns and operates 15 International dealership locations in Ontario.
In 2019, we purchased a 50% equity interest in an entity in Canada, Rush Truck Centres of Canada Limited (“RTC Canada”) and on May 2, 2022, we purchased an additional 30% equity interest in RTC Canada that increased our equity interest to 80%. RTC Canada currently owns and operates 14 International dealership locations in Ontario.
Generally, commercial vehicle finance contracts involve an installment contract, which is secured by the commercial vehicle financed and requires a down payment, with the remaining balance generally financed over a two-year to seven-year period. The majority of these finance contracts are sold to third parties without recourse to us.
Generally, commercial vehicle finance contracts involve an installment contract, which is secured by the commercial vehicle financed and requires a down payment, with the remaining balance generally financed over a two-year to seven-year period. Most of these finance contracts are sold to third parties without recourse to us.
At each of our dealerships, we operate one or more of the following departments: new commercial vehicle sales, used commercial vehicle sales, financial services, parts, service or a collision center. Our general managers measure and manage the operations of each dealership according to the specific departments operating at that location.
At each of our dealerships, we operate one or more of the following departments: new commercial vehicle sales, used commercial vehicle sales, financial services, part sales, service, or a collision center. Our general managers measure and manage the operations of each dealership according to the specific departments operating at that location.
Pursuant to the terms of the WF Credit Agreement, the WF Lenders have agreed to make up to $175.0 million of revolving credit loans for certain of our capital expenditures, including commercial vehicle purchases for our Idealease leasing and rental fleet, and general working capital needs.
Pursuant to the terms of the WF Credit Agreement (as amended), the WF Lenders have agreed to make up to $175.0 million of revolving credit loans for certain of our capital expenditures, including commercial vehicle purchases for our Idealease leasing and rental fleet, and general working capital needs.
Recent Acquisitions On February 25, 2019, we acquired 50% of the equity interest in RTC Canada, which acquired the operating assets of Tallman Group, the largest International Truck dealer in Canada. On May 2, 2022, we acquired an additional 30% equity interest for approximately $20.0 million.
On February 25, 2019, we acquired 50% of the equity interest in RTC Canada, which acquired the operating assets of Tallman Group, the largest International Truck dealer in Canada. On May 2, 2022, we acquired an additional 30% equity interest for approximately $20.0 million.
The Truck Segment includes our operation of a network of commercial vehicle dealerships under the name “Rush Truck Centers.” Rush Truck Centers primarily sell commercial vehicles manufactured by Peterbilt, International, Hino, Ford, Isuzu, IC Bus and Blue Bird.
The Truck Segment includes our operation of a network of commercial vehicle dealerships under the name “Rush Truck Centers.” Rush Truck Centers primarily sell commercial vehicles manufactured by Peterbilt, International, Hino, Ford, Isuzu, IC Bus, Blue Bird and Dennis Eagle.
We intend to continue to implement our business strategy, reinforce customer loyalty and remain a market leader by continuing to develop our Rush Truck Centers as we expand our product offerings and extend our dealership network through strategic acquisitions of new locations and opening new dealerships in our existing areas of operation to enable us to better serve our customers.
We intend to continue to implement our business strategy, reinforce customer loyalty and remain a market leader by continuing to develop our Rush Truck Centers as we expand our product offerings and extend our dealership network through strategic acquisitions of new locations and opening new dealerships in our existing areas of operation to enable us to better serve our customers. 1 Table of Contents Rush Truck Centers.
Our Business Strategy Operating Strategy. Our strategy is to operate an integrated dealership network that provides service solutions to the commercial vehicle industry throughout the United States and Ontario, Canada. Our strategy includes the following key elements: ● Management by Dealership Units .
Our strategy is to operate an integrated dealership network that provides service solutions to the commercial vehicle industry throughout the United States and Ontario, Canada. Our strategy includes the following key elements: ● Management by Dealership Units .
The following chart reflects our franchises and parts, service and collision repair operations by location as of February 15, 2023: Rush Truck Center Location Commercial Vehicle Franchise(s) Truck Sales Parts and Service Collision Center Alabama Birmingham None Yes Yes No Mobile Peterbilt Yes Yes Yes Arizona Flagstaff Peterbilt No Yes No Phoenix Peterbilt, Hino Yes Yes Yes Phoenix East Peterbilt No Yes No Tucson Peterbilt, Hino Yes Yes No Yuma Peterbilt Yes Yes No Arkansas Jonesboro International, IC Bus No Yes No Lowell International, Isuzu, IC Bus, Dennis Eagle Yes Yes Yes North Little Rock International, IC Bus, Dennis Eagle Yes Yes Yes Pine Bluff International, IC Bus, Dennis Eagle Yes Yes No Russellville International, IC Bus, Dennis Eagle Yes Yes No California Ceres Ford Yes Yes No Fontana Heavy-Duty Peterbilt Yes Yes Yes Fontana Medium-Duty Peterbilt, Hino, Isuzu Yes Yes No Fontana Vocational None No Yes No 5 Table of Contents Rush Truck Center Location Commercial Vehicle Franchise(s) Truck Sales Parts and Service Collision Center Long Beach Peterbilt No Yes No Los Angeles Peterbilt Yes Yes Yes San Diego Peterbilt, Hino, Ford Yes Yes No Sylmar Peterbilt Yes Yes No Victorville Peterbilt Yes Yes No Whittier Ford, Isuzu Yes Yes No Colorado Colorado Springs Peterbilt Yes Yes No Denver Peterbilt, Ford, Isuzu Yes Yes Yes Greeley Peterbilt Yes Yes No Pueblo Peterbilt Yes Yes No Florida Haines City Peterbilt Yes Yes Yes Jacksonville Peterbilt, Hino Yes Yes No Jacksonville East Peterbilt Yes Yes No Lake City Peterbilt Yes Yes No Miami None Yes Yes No Orlando Heavy-Duty Peterbilt, Isuzu Yes Yes No Orlando Light & Medium-Duty Ford Yes Yes No Orlando North Isuzu Yes Yes No Orlando South Isuzu Yes Yes No Tampa Peterbilt Yes Yes No Georgia Atlanta International, Hino, Isuzu, IC Bus Yes Yes No Atlanta Bus Center IC Bus Yes Yes Yes Augusta International, IC Bus Yes Yes No Columbus International, Isuzu, IC Bus Yes Yes No Doraville International, Hino, Isuzu, IC Bus Yes Yes No Gainesville International, IC Bus Yes Yes No Macon International Yes Yes No Smyrna International, Hino, Isuzu, IC Bus Yes Yes No Tifton International, IC Bus Yes Yes No Valdosta International Yes Yes No Idaho Boise International, Hino, IC Bus Yes Yes Yes Idaho Falls International, IC Bus Yes Yes Yes Lewiston International Yes Yes No Twin Falls International Yes Yes No Illinois Bloomington International, Hino Yes Yes No Carol Stream International Yes Yes No Champaign International Yes Yes Yes Chicago International Yes Yes Yes Effingham International Yes Yes Yes Elk Grove Hino, Isuzu Yes Yes No Huntley International Yes Yes No Joliet International Yes Yes No Quincy International Yes Yes No Springfield International Yes Yes Yes Indiana Gary International Yes Yes No Indianapolis International Yes Yes Yes Kansas Olathe Hino, Isuzu, Dennis Eagle Yes Yes No Salina International, Dennis Eagle Yes Yes No Topeka International, Dennis Eagle Yes Yes No Wichita International, Dennis Eagle Yes Yes No 6 Table of Contents Rush Truck Center Location Commercial Vehicle Franchise(s) Truck Sales Parts and Service Collision Center Kentucky Bowling Green Peterbilt Yes Yes No Missouri Cape Girardeau International, Dennis Eagle Yes Yes No Jefferson City International, Dennis Eagle Yes Yes No Joplin International, Dennis Eagle Yes Yes No Kansas City International, Dennis Eagle Yes Yes Yes Kansas City Used Trucks None Yes No No St.
The following chart reflects our franchises and parts, service and collision repair operations by location as of February 15, 2024: Rush Truck Center Location Commercial Vehicle Franchise(s) Truck Sales Parts and Service Collision Center Alabama Birmingham None Yes Yes No Mobile Peterbilt Yes Yes Yes Arizona Flagstaff Peterbilt No Yes No Phoenix Peterbilt, Hino Yes Yes Yes Phoenix East Peterbilt No Yes No Tucson Peterbilt, Hino Yes Yes No Yuma Peterbilt Yes Yes No Arkansas Jonesboro International, IC Bus No Yes No Lowell International, Isuzu, IC Bus, Dennis Eagle Yes Yes Yes North Little Rock International, IC Bus, Dennis Eagle Yes Yes Yes Russellville International, IC Bus, Dennis Eagle Yes Yes No California Ceres Ford Yes Yes No Fontana Heavy-Duty Peterbilt Yes Yes Yes Fontana Medium-Duty Peterbilt, Hino, Isuzu Yes Yes No Fontana Vocational None No Yes No Long Beach Peterbilt No Yes No Los Angeles Peterbilt Yes Yes Yes San Diego Peterbilt, Hino, Ford Yes Yes No Sylmar Peterbilt Yes Yes No Ventura Peterbilt No Yes No Victorville Peterbilt Yes Yes No Whittier Ford, Isuzu Yes Yes No Colorado Colorado Springs Peterbilt Yes Yes No Denver Peterbilt, Ford, Isuzu Yes Yes Yes Greeley Peterbilt Yes Yes No Pueblo Peterbilt Yes Yes No Florida Haines City Peterbilt Yes Yes Yes Jacksonville Peterbilt, Hino Yes Yes No Jacksonville East Peterbilt Yes Yes No Lake City Peterbilt Yes Yes No Miami None Yes Yes No Orlando Heavy-Duty Peterbilt, Isuzu Yes Yes No Orlando Light & Medium-Duty Ford Yes Yes No Orlando North Isuzu Yes Yes No Orlando South Isuzu Yes Yes No Tampa Peterbilt Yes Yes No Georgia Atlanta International, Hino, Isuzu, IC Bus Yes Yes No Atlanta Bus Center IC Bus Yes Yes Yes Augusta International, IC Bus Yes Yes No Columbus International, Isuzu, IC Bus Yes Yes No Doraville International, Hino, Isuzu, IC Bus Yes Yes No Gainesville International, IC Bus Yes Yes No Macon International Yes Yes No Smyrna International, Hino, Isuzu, IC Bus Yes Yes No Tifton International, IC Bus Yes Yes No Valdosta International Yes Yes No 2 Table of Contents Rush Truck Center Location Commercial Vehicle Franchise(s) Truck Sales Parts and Service Collision Center Idaho Boise International, Hino, IC Bus Yes Yes Yes Idaho Falls International, IC Bus Yes Yes Yes Lewiston International Yes Yes No Twin Falls International Yes Yes No Illinois Bloomington International, Hino Yes Yes No Carol Stream International Yes Yes No Champaign International Yes Yes Yes Chicago International Yes Yes Yes Chicago Light and Medium Duty Ford Yes Yes No Effingham International Yes Yes Yes Elk Grove Hino, Isuzu Yes Yes No Huntley International Yes Yes No Joliet International Yes Yes No Pontoon Beach International, Dennis Eagle Yes Yes No Quincy International Yes Yes No Springfield International Yes Yes Yes Indiana Gary International Yes Yes No Indianapolis International Yes Yes Yes Kansas Olathe Hino, Isuzu, Dennis Eagle Yes Yes No Salina International, Dennis Eagle Yes Yes No Topeka International, Dennis Eagle Yes Yes No Wichita International, Dennis Eagle Yes Yes No Kentucky Bowling Green Peterbilt Yes Yes No Missouri Cape Girardeau International, Dennis Eagle Yes Yes No Jefferson City International, Dennis Eagle Yes Yes No Joplin International, Dennis Eagle Yes Yes No Kansas City International, Dennis Eagle Yes Yes Yes Kansas City Used Trucks None Yes No No St.
We have incurred, and will continue to incur, capital and operating expenditures and other costs in complying with such laws and regulations. 19 Table of Contents Our operations involving the use, handling, storage and disposal of hazardous and nonhazardous materials are subject to the requirements of the federal Resource Conservation and Recovery Act, or RCRA, and comparable state statutes.
We have incurred, and will continue to incur, capital and operating expenditures and other costs in complying with such laws and regulations. Our operations involving the use, handling, storage and disposal of hazardous and nonhazardous materials are subject to the requirements of the federal Resource Conservation and Recovery Act, or RCRA, and comparable state statutes.
As a continuation of our leadership development initiatives, we have launched our High Impact Leadership series, which focuses on building more advanced leadership skills such as motivating employees through meaningful feedback and inclusive leadership and communication.
As a continuation of our leadership development initiatives, we have implemented our High Impact Leadership series, which focuses on building more advanced leadership skills such as motivating employees through meaningful feedback and inclusive leadership and communication.
We strive to provide our employees with the security of long-term employment, competitive compensation and benefits, a consistent work schedule and opportunities to improve their skills and advance within the Company. Core Values. Our core values define our culture and reflect who we are and the way we interact with our customers, suppliers, co-workers and shareholders.
We strive to provide our employees with the security of long-term employment, competitive compensation and benefits, a consistent work schedule and opportunities to improve their skills and advance within the Company. 9 Table of Contents Core Values. Our core values define our culture and reflect who we are and the way we interact with our customers, suppliers, co-workers and shareholders.
Additionally, we sell, as agent through our insurance agency, a complete line of property and casualty insurance, including collision and liability insurance on commercial vehicles, cargo insurance and credit life insurance. Other Businesses. Perfection Equipment offers installation of equipment, equipment repair, parts installation, and paint and body repair at our location in Oklahoma City.
Additionally, we sell, as agent through our insurance agency, a complete line of property and casualty insurance, including collision and liability insurance on commercial vehicles, cargo insurance and credit life insurance. 6 Table of Contents Other Businesses. Perfection Equipment offers installation of equipment, equipment repair, parts installation, and paint and body repair at our location in Oklahoma City.
The following chart reflects our leasing brands by location: Rush Truck Leasing Location Brand Standalone or in a Rush Truck Center Alabama Birmingham PacLease In RTC Arizona Phoenix PacLease Standalone Arkansas North Little Rock Idealease In RTC Lowell Idealease Standalone California Fontana PacLease Standalone Pico Rivera PacLease Standalone San Diego PacLease Standalone Sylmar PacLease In RTC Colorado Denver PacLease Standalone Florida Orlando PacLease Standalone Tampa PacLease In RTC Jacksonville PacLease Standalone Georgia Augusta Idealease In RTC Macon Idealease In RTC Idaho Boise Idealease In RTC Idaho Falls Idealease In RTC Illinois Carol Stream Idealease In RTC Chicago Idealease In RTC Effingham Idealease In RTC Huntley Idealease In RTC Joliet Idealease In RTC Springfield Idealease In RTC Indiana Indianapolis Idealease In RTC Gary Idealease In RTC Kansas Kansas City Idealease Standalone Salina Idealease In RTC Wichita Idealease In RTC Missouri Joplin Idealease In RTC St.
The following chart reflects our leasing brands by location: Rush Truck Leasing Location Brand Standalone or in a Rush Truck Center Alabama Birmingham PacLease In RTC Arizona Phoenix PacLease Standalone Arkansas North Little Rock Idealease In RTC Lowell Idealease Standalone California Fontana PacLease Standalone Pico Rivera PacLease Standalone San Diego PacLease Standalone Sylmar PacLease In RTC Colorado Denver PacLease Standalone Florida Orlando PacLease Standalone Tampa PacLease In RTC Jacksonville PacLease Standalone Georgia Augusta Idealease In RTC Macon Idealease In RTC Idaho Boise Idealease In RTC 5 Table of Contents Rush Truck Leasing Location Brand Standalone or in a Rush Truck Center Illinois Carol Stream Idealease In RTC Chicago Idealease In RTC Effingham Idealease In RTC Huntley Idealease In RTC Joliet Idealease In RTC Springfield Idealease In RTC Indiana Indianapolis Idealease In RTC Gary Idealease In RTC Kansas Kansas City Idealease Standalone Salina Idealease In RTC Wichita Idealease In RTC Missouri Joplin Idealease In RTC St.
We employ a branding program at all of our dealerships through distinctive signage and uniform marketing programs to take advantage of our existing name recognition and to communicate the standardized high quality of our products and reliability of our services throughout our dealership network. Growth Strategy.
We employ a branding program at all of our dealerships through distinctive signage and uniform marketing programs to take advantage of our existing name recognition and to communicate the standardized high quality of our products and reliability of our services throughout our dealership network. 7 Table of Contents Growth Strategy.
We believe that our dealerships are able to compete with other franchised dealerships, independent service centers, parts wholesalers, commercial vehicle wholesalers, rental service companies and industrial auctioneers in distributing our products and providing service because of the following: the overall quality and reputation of the products we sell; the “Rush” brand name recognition and reputation for quality service; the geographic scope of our dealership network; the breadth of commercial vehicles offered in our dealership network; and our ability to provide comprehensive Aftermarket Products and Services, as well as financing, insurance and other customer services. 16 Table of Contents Dealership Agreements Peterbilt.
We believe that our dealerships are able to compete with other franchised dealerships, independent service centers, parts wholesalers, commercial vehicle wholesalers, rental service companies and industrial auctioneers in distributing our products and providing service because of the following: the overall quality and reputation of the products we sell; the “Rush” brand name recognition and reputation for quality service; the geographic scope of our dealership network; the breadth of commercial vehicles offered in our dealership network; and our ability to provide comprehensive Aftermarket Products and Services, as well as financing, insurance and other customer services.
The turnover rate of our service and body shop technicians is also monitored closely by management, as the retention of skilled service and body shop technicians is critical to the success of the Company. Demand for service and body shop technicians across the country is very high, and turnover in this role is also traditionally high for commercial vehicle dealers.
The turnover rate of our technicians is also monitored closely by management, as the retention of skilled technicians is critical to the success of the Company. Demand for technicians across the country is very high, and turnover in this role is also traditionally high for commercial vehicle dealers.
However, Aftermarket Products and Services operations historically have experienced higher sales volumes in the second and third quarters. Backlog On December 31, 2022, our backlog of commercial vehicle orders was approximately $4,216.0 million, compared to a backlog of commercial vehicle orders of approximately $3,267.0 million on December 31, 2021.
However, Aftermarket Products and Services operations historically have experienced higher sales volumes in the second and third quarters. Backlog On December 31, 2023, our backlog of commercial vehicle orders was approximately $3,733.4 million, compared to a backlog of commercial vehicle orders of approximately $4,216.0 million on December 31, 2022.
We have entered into nonexclusive dealership agreements with Peterbilt that authorize us to act as a dealer of Peterbilt heavy- and medium-duty trucks. Our Peterbilt areas of responsibility currently encompass areas in the states of Alabama, Arizona, California, Colorado, Florida, Kentucky, Nevada, New Mexico, Oklahoma, Tennessee and Texas. These dealership agreements currently have terms expiring in May 2023.
Dealership Agreements Peterbilt. We have entered into nonexclusive dealership agreements with Peterbilt that authorize us to act as a dealer of Peterbilt heavy- and medium-duty trucks. Our Peterbilt areas of responsibility currently encompass areas in the states of Alabama, Arizona, California, Colorado, Florida, Kentucky, Nevada, New Mexico, Oklahoma, Tennessee and Texas.
Additionally, we provide a wide array of services, including assembly services for specialized commercial vehicle bodies and commercial vehicle mounted equipment. Our goal is to provide our customers with any service that they need related to their commercial vehicles. As part of our leasing and rental operations, we also enter into contracts to provide full-service maintenance on certain customers’ vehicles.
Additionally, we provide a wide array of services, including assembly services for specialized commercial vehicle bodies and commercial vehicle mounted equipment. Our goal is to provide our customers with any service that they need related to their commercial vehicles. We also enter into contracts to provide full-service maintenance on certain customers’ vehicles.
In addition, such laws could affect demand for the products that we sell. 20 Table of Contents
In addition, such laws could affect demand for the products that we sell. 17 Table of Contents
Additional regulations could result in increased compliance costs, additional operating restrictions or changes in demand for our products and services, which could have a material adverse effect on our business, financial condition and results of operations.
Additional regulations, or CARB’s enforcement of its existing regulations, could result in increased compliance costs, additional operating restrictions or changes in demand for our products and services, which could have a material adverse effect on our business, financial condition and results of operations.
In addition to our dealership agreements with Peterbilt and Navistar, various Rush Truck Centers have entered into dealership agreements with other commercial vehicle manufacturers, including Blue Bird, and Micro Bird, which currently have terms expiring between August 2023 and August 2024 and Ford, Hino, Isuzu and Dennis Eagle, which have perpetual terms.
In addition to our dealership agreements with Peterbilt and Navistar, various Rush Truck Centers have entered into dealership agreements with other commercial vehicle manufacturers, including Blue Bird, and Micro Bird, which currently have terms expiring between March 2024 and May 2029 and Ford, Hino, Isuzu and Dennis Eagle which have perpetual terms.
Joseph International, Dennis Eagle Yes Yes No St. Louis International, Dennis Eagle Yes Yes No St.
Joseph International, Dennis Eagle Yes Yes No St.
We have entered into collective bargaining agreements covering certain employees in Chicago, Illinois, which will expire on May 10, 2025, Joliet, Illinois, which will expire on May 3, 2026 and Carol Stream, Illinois, which will expire on May 6, 2023.
We have entered into collective bargaining agreements covering certain employees in Chicago, Illinois, which will expire on May 10, 2025, Joliet, Illinois, which will expire on May 3, 2026 and Carol Stream, Illinois, which will expire on May 2, 2027.
The Floor Plan Credit Agreement expires September 14, 2026, although BMO Harris has the right to terminate at any time upon 360 days written notice and we may terminate at any time, subject to specified limited exceptions. On December 31, 2022, we had approximately $762.9 million outstanding under the Floor Plan Credit Agreement.
The Floor Plan Credit Agreement expires September 14, 2026, although BMO Harris has the right to terminate at any time upon 360 days written notice and we may terminate at any time, subject to specified limited exceptions. On December 31, 2023, we had approximately $984.4 million outstanding under the Floor Plan Credit Agreement.
Borrowings under the Floor Plan Credit Agreement bear interest at an annual rate equal to (A) the greater of (i) zero and (ii) one month London Interbank Offered Rate (“LIBOR”), determined on the last day of the prior month, plus (B) 1.10% and are payable monthly.
Prior to June 1, 2023, borrowings under the Floor Plan Credit Agreement bore interest at an annual rate equal to (A) the greater of (i) zero and (ii) one month London Interbank Offered Rate (“LIBOR”), determined on the last day of the prior month, plus (B) 1.10% and were payable monthly.
Borrowings under the WF Credit Agreement bear interest per annum, payable on each interest payment date, as defined in the WF Credit Agreement, at (A) the daily simple, secured overnight financing rate (“SOFR”) plus (i) 1.25% or (ii) 1.5%, depending on our consolidated leverage ratio or (B) on or after the term SOFR transition date, the term SOFR plus (i) 1.25% or (ii) 1.5%, depending on our consolidated leverage ratio.
Borrowings under the WF Credit Agreement bear interest per annum, payable on each interest payment date, as defined in the WF Credit Agreement, at (A) the daily SOFR plus (i) 1.25% or (ii) 1.5%, depending on our consolidated leverage ratio or (B) on or after the term SOFR transition date, the term SOFR plus (i) 1.25% or (ii) 1.5%, depending on our consolidated leverage ratio.
We also have a New Graduate Management Trainee Program that identifies and recruits new talent from universities across the country and provides on-the-job training for them to fill various roles within our dealership network. In addition, we have established a program called Growing Rush Outstanding Women ("GROW"), which enables women to continue their professional development through educational opportunities.
We also have a New Graduate Program that identifies and recruits new talent from universities across the country and provides on-the-job training for them to fill various roles within our dealership network. In addition, we have established a program called Growing Resilient Outstanding Women (“GROW”), which enables women to continue their professional development through educational opportunities, mentoring and networking.
The sale of financial and insurance products accounted for approximately $29.7 million, or 0.4%, of our total revenues for 2022. Finance and insurance revenues have minimal direct costs and therefore, contribute a disproportionate share to our operating profits. Many of our Rush Truck Centers have personnel responsible for arranging third-party financing for our product offerings.
The sale of financial and insurance products accounted for approximately $24.3 million, or 0.3%, of our total revenues for 2023. Finance and insurance revenues have minimal direct costs and therefore, contribute a disproportionate share to our operating profits. Many of our Rush Truck Centers have personnel responsible for arranging third-party financing for our product offerings.
Patent and Trademark Office for the following names used in this document: “Rush Enterprises” and “Rush Truck Center.” Seasonality Our Truck Segment is moderately seasonal.
Patent and Trademark Office for the following names used in this document: “Rush Enterprises” and “Rush Truck Center.” 15 Table of Contents Seasonality Our Truck Segment is moderately seasonal.
The information contained on our website, or on other websites linked to our website, is not incorporated into this report or otherwise made part of this report. 4 Table of Contents General Rush Enterprises, Inc. was incorporated in Texas in 1965 and consists of one reportable segment, the Truck Segment, and conducts business through its subsidiaries.
Our website address is www.rushenterprises.com. The information contained on our website, or on other websites linked to our website, is not incorporated into this report or otherwise made part of this report. General Rush Enterprises, Inc. was incorporated in Texas in 1965 and consists of one reportable segment, the Truck Segment, and conducts business through its subsidiaries.
Advances under the RTC Canada Revolving Credit Agreement bear interest per annum, payable on the first business day of each calendar month, at CDOR, plus 1.35%. The RTC Canada Revolving Credit Agreement expires September 14, 2026. On December 31, 2022, we had approximately $49.9 million outstanding under the RTC Canada Revolving Credit Agreement.
Advances under the RTC Canada Revolving Credit Agreement bear interest per annum, payable on the first business day of each calendar month, at the CDOR, plus 1.35%. The RTC Canada Revolving Credit Agreement expires September 14, 2026. On December 31, 2023, we had approximately $64.7 million CAD outstanding under the RTC Canada Revolving Credit Agreement.
We had 1,839 vehicles under contract maintenance as of December 31, 2022. The full-service maintenance revenues and retail service revenues are included as Aftermarket Products and Services revenues on our Consolidated Statements of Income. New Commercial Vehicle Sales .
We had 3,246 vehicles under contract maintenance as of December 31, 2023. The full-service maintenance revenues and retail service revenues are included as Aftermarket Products and Services revenues on our Consolidated Statements of Income. New Commercial Vehicle Sales .
Leading indicators include training completion rates, tracking of local safety committee meeting minutes, and recording of near misses, as well as other proactive actions taken to ensure employee safety. In 2022, we had a TRIR of 4.03, compared to 3.87 in 2021 and a LTIR of 0.62 in 2022, compared to 0.71 in 2021. Labor Relations.
Leading indicators include training completion rates, tracking of local safety committee meeting minutes, and recording of near misses, as well as other proactive actions taken to ensure employee safety. In 2023, we had a TRIR of 3.68, compared to 4.03 in 2022 and a LTIR of .57 in 2023, compared to 0.72 in 2022. Labor Relations.
Our service departments perform warranty and non-warranty repairs on commercial vehicles. The cost of warranty work is generally reimbursed by the applicable manufacturer at retail commercial rates. Warranty-related parts and service revenues accounted for approximately $135.0 million, or 1.9%, of our total revenues for 2022.
Our service departments perform warranty and non-warranty repairs on commercial vehicles. The cost of warranty work is generally reimbursed by the applicable manufacturer at retail commercial rates. Warranty-related parts and service revenues accounted for approximately $168.1 million, or 2.1%, of our total revenues for 2023.
Advances under the RTC Canada Floor Plan Agreement bear interest per annum, payable on the first business day of each calendar month, at the Canadian Offered Dollar Rate (“CDOR”), plus 0.90% and in the case of an advance required to be made in USD dollars, at LIBOR, plus 1.10%. The RTC Canada Floor Plan Agreement expires September 14, 2026.
Prior to June 1, 2023, advances under the RTC Canada Floor Plan Agreement bore interest per annum, payable on the first business day of each calendar month, at the Canadian Offered Dollar Rate (“CDOR”), plus 0.90% and in the case of an advance required to be made in USD dollars, at LIBOR, plus 1.10%.
Lease and Rental Fleet Financing On September 14, 2021, we entered into a credit agreement with the lenders signatory thereto (the “WF Lenders”) and Wells Fargo Bank, National Association (“WF”), as Administrative Agent (in such capacity, the “WF Agent”) which was amended effective November 30, 2022 (collectively, the “WF Credit Agreement”).
Lease and Rental Fleet Financing On September 14, 2021, we entered into a credit agreement (“WF Credit Agreement”) with the lenders signatory thereto (the “WF Lenders”) and Wells Fargo Bank, National Association (“WF”), as Administrative Agent (in such capacity, the “WF Agent”).
Certain Rush Truck Centers also feature fully equipped service and collision center facilities, the combination and configuration of which varies by location, capable of handling a broad range of repairs on most commercial vehicles.
Rush Truck Centers carry a wide variety of commercial vehicle parts in inventory. Certain Rush Truck Centers also feature fully equipped service and collision center facilities, the combination and configuration of which varies by location, capable of handling a broad range of repairs on most commercial vehicles.
Orders from a number of our major fleet customers are included in our backlog as of December 31, 2022, and we expect to fill the majority of our backlog orders during 2023, assuming that the manufacturers we represent can meet their current production schedule. Our current backlog continues to be much higher than normal.
Orders from a number of our major fleet customers are included in our backlog as of December 31, 2023, and we expect to fill the majority of our backlog orders during 2024, assuming that the manufacturers we represent can meet their current production schedule.
Similarly, in June 2020, the California Air Resources Board adopted a final rule that is intended to phase out the sale of diesel-powered commercial vehicles over time by requiring a certain percentage of each manufacturer’s commercial vehicles sold within the state to be “zero-emission vehicles,” or “near-zero emission vehicles,” starting in model year 2024.
Similarly, in June 2020, CARB adopted a final rule that is intended to phase out the sale of internal combustion engine commercial vehicles over time by requiring a certain percentage of each manufacturer’s commercial vehicles sold within the state to be “zero-emission vehicles,” or “near-zero emission vehicles,” starting in model year 2024.
Similarly, the federal Clean Air Act and comparable state statutes regulate emissions of various air emissions through permitting programs and the imposition of standards and other requirements. The Environmental Protection Agency (“EPA”) and the National Highway Traffic Safety Administration (“NHTSA”), on behalf of the U.S.
Water quality protection programs govern certain discharges from some of our operations. Similarly, the federal Clean Air Act and comparable state statutes regulate emissions of various air emissions through permitting programs and the imposition of standards and other requirements. The Environmental Protection Agency (“EPA”) and the National Highway Traffic Safety Administration (“NHTSA”), on behalf of the U.S.
Peters Idealease Standalone Springfield Idealease In RTC New Mexico Albuquerque PacLease Standalone Nevada Las Vegas PacLease Standalone North Carolina Asheville Idealease Standalone Charlotte Idealease Standalone 9 Table of Contents Rush Truck Leasing Location Brand Standalone or in a Rush Truck Center Ohio Cincinnati Idealease Standalone Cleveland Idealease Standalone Columbus Idealease Standalone Dayton Idealease In RTC Oklahoma Oklahoma City PacLease In RTC Tennessee Memphis Idealease Standalone Nashville PacLease In RTC Texas Austin PacLease Standalone El Paso PacLease In RTC Arlington PacLease In RTC Houston PacLease Standalone Houston NW PacLease Standalone Odessa PacLease Standalone San Antonio PacLease In RTC Tyler PacLease Standalone Virginia Richmond Idealease Standalone Norfolk Idealease Standalone Utah Salt Lake City Idealease Standalone Ontario, Canada Markham Idealease In RTC Mississauga Idealease In RTC Oshawa Idealease In RTC Ottawa Idealease In RTC St.
Peters Idealease Standalone Springfield Idealease In RTC New Mexico Albuquerque PacLease Standalone Nevada Las Vegas PacLease Standalone North Carolina Asheville Idealease Standalone Charlotte Idealease Standalone Ohio Cincinnati Idealease Standalone Cleveland Idealease Standalone Columbus Idealease Standalone Dayton Idealease In RTC Oklahoma Oklahoma City PacLease In RTC Tennessee Memphis Idealease Standalone Nashville PacLease In RTC Texas Austin PacLease Standalone El Paso PacLease In RTC Arlington PacLease In RTC Houston PacLease Standalone Houston NW PacLease Standalone Odessa PacLease Standalone San Antonio PacLease In RTC Tyler PacLease Standalone Virginia Richmond Idealease Standalone Norfolk Idealease Standalone Utah Salt Lake City Idealease Standalone Ontario, Canada Markham Idealease In RTC Mississauga Idealease In RTC Ottawa Idealease In RTC St.
Vehicle leasing and rental revenues accounted for approximately $322.3 million, or 4.5%, of our total revenues for 2022. At our Rush Truck Leasing locations, we engage in full-service commercial vehicle leasing and rental through our PacLease and Idealease franchises. As of December 31, 2022, we had 9,957 commercial vehicles in our lease and rental fleet.
Vehicle leasing and rental revenues accounted for approximately $353.8 million, or 4.5%, of our total revenues for 2023. At our Rush Truck Leasing locations, we engage in full-service commercial vehicle leasing and rental through our PacLease and Idealease franchises. As of December 31, 2023, we had 10,463 commercial vehicles in our lease and rental fleet.
Some examples of our wide-ranging benefits offered are: medical insurance, prescription drug benefits, dental insurance, vision insurance, hospital indemnity insurance, accident insurance, critical illness insurance, smoking cessation assistance program, life insurance, disability insurance, health savings accounts and flexible spending accounts.
Some examples of the wide-ranging benefits we offer include: medical insurance, prescription drug benefits, dental insurance, vision insurance, hospital indemnity insurance, accident insurance, critical illness insurance, smoking cessation assistance, life insurance, disability insurance, health savings accounts and flexible spending accounts.
We believe that the broad range of products and services we offer to purchasers of commercial vehicles at the time of purchase and post-purchase results in a high level of customer loyalty. 12 Table of Contents Used Commercial Vehicle Sales . Used commercial vehicle sales accounted for approximately $552.9 million, or 7.8%, of our total revenues for 2022.
We believe that the broad range of products and services we offer to purchasers of commercial vehicles at the time of purchase and post-purchase results in a high level of customer loyalty. Used Commercial Vehicle Sales . Used commercial vehicle sales accounted for approximately $414.7 million, or 5.2%, of our total revenues for 2023.
Our agency, which operates at locations around the United States outside of our Rush Truck Centers, is licensed to sell commercial vehicle liability, collision and comprehensive, workers’ compensation, cargo, and credit life insurance coverage offered by a number of leading insurance companies. Our renewal rate in 2022 was approximately 80%.
Our agency, which operates at locations around the United States outside of our Rush Truck Centers, is licensed to sell commercial vehicle liability, collision, workers’ compensation, cargo, and credit life insurance coverage offered by several leading insurance companies. Our renewal rate in 2023 was approximately 81%. We also have licensed insurance agents at several of our Rush Truck Centers.
Our network is linked to our major suppliers for purposes of ordering parts and managing parts inventory levels. Automated reordering and communication systems allow us to maintain proper parts inventory levels and permit us to have parts inventory delivered to our locations, or directly to customers, typically within 24 hours of an order being placed.
Automated reordering and communication systems allow us to maintain proper parts inventory levels and permit us to have parts inventory delivered to our locations, or directly to customers, typically within 24 hours of an order being placed.
In the event of order cancellation, we have no contractual right to the total revenues reflected in our backlog. The delivery time for a custom-ordered commercial vehicle varies depending on the truck specifications and demand for the particular model ordered.
In the event of order cancellations, we have no contractual right to the total revenues reflected in our backlog. The delivery time for a custom-ordered commercial vehicle varies depending on the truck specifications, the demand for the particular model ordered and the status of the supply chain with respect to truck bodies and component parts.
On December 31, 2022, we had approximately $40.5 million outstanding under the WF Credit Agreement. On October 1, 2021, the Company entered into that certain Amended and Restated Inventory Financing and Purchase Money Security Agreement with PACCAR Leasing Company (“PLC”), a division of PACCAR Financial Corp. (the “PLC Agreement”).
On December 31, 2023, we had approximately $100.2 million outstanding under the WF Credit Agreement. 14 Table of Contents On November 1, 2023, the Company entered into that certain Amended and Restated Inventory Financing and Purchase Money Security Agreement with PACCAR Leasing Company (“PLC”), a division of PACCAR Financial Corp. (the “PLC Agreement”).
New light-duty commercial vehicle sales accounted for approximately $104.0 million, or 1.5%, of our total revenues for 2022, and 2.7% of our new commercial vehicle revenues for 2022. A significant portion of our new commercial vehicle sales are to customers with large fleets of commercial vehicles.
New light-duty commercial vehicle sales accounted for approximately $108.8 million, or 1.4%, of our total revenues for 2023, and 2.4% of our new commercial vehicle revenues for 2023. A significant portion of our new commercial vehicle sales are to customers with large fleets of commercial vehicles.
Catharines International, IC Bus Yes Yes No Sudbury International, IC Bus Yes Yes No Timmins International, IC Bus Yes Yes No 8 Table of Contents Leasing and Rental Services.
Catharines International, IC Bus Yes Yes No Sudbury International, IC Bus Yes Yes No Timmins International, IC Bus Yes Yes No Leasing and Rental Services.
The average daily outstanding borrowings under the Floor Plan Credit Agreement were $638.6 million during the year ended December 31, 2022.
The average daily outstanding borrowings under the Floor Plan Credit Agreement were $870.1 million during the year ended December 31, 2023.
These internal audits objectively measure dealership performance with respect to corporate expectations in the management and administration of sales, commercial vehicle inventory, parts inventory, parts sales, service sales, collision center sales, corporate policy compliance and environmental and safety compliance matters. 15 Table of Contents Purchasing and Suppliers.
Each Rush Truck Center is audited regularly for compliance with corporate policies and procedures. These internal audits objectively measure dealership performance with respect to corporate expectations in the management and administration of sales, commercial vehicle inventory, parts inventory, parts sales, service sales, collision center sales, corporate policy compliance and environmental and safety compliance matters. Purchasing and Suppliers.
We may borrow, repay and reborrow amounts pursuant to the PLC Agreement from time to time until the maturity date, provided, however, that the outstanding principal amount on any date shall not exceed the borrowing base.
We may borrow, repay and reborrow amounts pursuant to the PLC Agreement from time to time until the maturity date, provided, however, that the outstanding principal amount on any date shall not exceed the borrowing base. In addition, we must maintain a minimum balance of $190.0 million.
In addition, in July 2020, a group of fifteen U.S. states and the District of Columbia entered into a joint memorandum of understanding that commits each of them to work together to advance and accelerate the market for electric Class 3 through 8 commercial vehicles; two additional states have since signed.
Since July 2020, a group of seventeen U.S. states and the District of Columbia have entered into a joint memorandum of understanding that adopts at least a portion of CARB’s emissions regulations and commits each of them to work together to advance and accelerate the market for electric Class 3 through 8 commercial vehicles.
There have been no strikes, work stoppages or slowdowns during the negotiations of the foregoing collective bargaining agreements or at any time in the Company’s history, although no assurances can be given that such actions will not occur. We believe that our relations with the labor unions that represent these employees are generally good.
There have been no strikes, work stoppages or slowdowns during the negotiations of the foregoing collective bargaining agreements or at any time in the Company’s history, although no assurances can be given that such actions will not occur.
These dealership agreements currently have terms expiring between May 2023 and December 2027. Sales of new International commercial vehicles accounted for approximately 13.6% of our total revenues for 2022. Other Commercial Vehicle Suppliers.
These dealership agreements currently have terms expiring between May 2025 and January 2029. Sales of new International commercial vehicles accounted for approximately 16.4% of our total revenues for 2023. Other Commercial Vehicle Suppliers.
In addition, we provide our employees with an opportunity to save for retirement by participating in our 401k plan, which has a Company-matching component that is based on years of service. Training and Development.
In addition, we provide our employees with an opportunity to save for retirement by participating in our 401k plan, which has a Company-matching component that is based on years of service. Talent Development. Our talent development programs supply our employees and leaders with tools and experiences to foster learning, employee engagement, leadership development, talent management, and employee development.
Lagging indicators include the OSHA Total Recordable Incident Rate ("TRIR") and the Lost Time (or Lost Workday) Incident Rate ("LTIR") based upon the number of incidents per 100 employees (or per 200,000 work hours).
We utilize a mixture of leading and lagging indicators to assess the health and safety performance of our operations. Lagging indicators include the OSHA Total Recordable Incident Rate ("TRIR") and the Lost Time (or Lost Workday) Incident Rate ("LTIR") based upon the number of incidents per 100 employees (or per 200,000 work hours).
Subsequent to the Company’s acquisition of the additional 30% equity interest on May 2, 2022, the operating results of RTC Canada are consolidated in the Consolidated Statements of Income, the Consolidated Statements of Comprehensive Income and the Consolidated Balance Sheets.
Subsequent to the Company’s acquisition of the additional 30% equity interest on May 2, 2022, the operating results of RTC Canada are consolidated in the Consolidated Statements of Income, the Consolidated Statements of Comprehensive Income and the Consolidated Balance Sheets. 12 Table of Contents See Note 15 – Acquisitions in the Notes to the Financial Statements for further discussion.
Excellence is reflected in our first-class facilities, quality products and services, motivated and talented employees, superior results for the customer and consistency throughout our organization. ● Positive Attitude means approaching every day with excitement and passion for the work and dedication to our customers with positive intensity. 13 Table of Contents Each of these core values is embodied in our code of conduct, which we call our Rush Driving Principles.
Our excellence is reflected in our first-class facilities, quality products and services, motivated and talented employees, superior results for the customer and consistency throughout our organization. ● Positive attitude means approaching every day with excitement and passion for our work and dedication to our customers with positive intensity.
On December 31, 2022, we had approximately $185.0 million outstanding under the PLC Agreement. On May 31, 2022, RTC Canada entered into that certain BMO Revolving Lease and Rental Credit Agreement (the “RTC Canada Revolving Credit Agreement”) with BMO.
On May 31, 2022, RTC Canada entered into that certain BMO Revolving Lease and Rental Credit Agreement (the “RTC Canada Revolving Credit Agreement”) with BMO.
During 2022, no single customer accounted for more than 10% of our sales by dollar volume. We generally promote our products and related services through direct customer contact by our sales personnel and advertising. Facility Management Personnel.
Our customers include national and regional truck fleets, corporations, local and state governments and owner-operators. During 2023, no single customer accounted for more than 10% of our sales by dollar volume. We generally promote our products and related services through direct customer contact by our sales personnel and advertising. Facility Management Personnel.
The signatories to the memorandum all agreed on a goal of ensuring that 100% of new Class 3 through 8 commercial vehicles are zero emission by 2050, with an interim target of 30% zero emission vehicles by 2030.
Six of the states are states where we operate new commercial vehicle dealerships: California, Colorado, Nevada, New Mexico, North Carolina and Virginia. The signatories to the memorandum all agreed on a goal of ensuring that 100% of new Class 3 through 8 commercial vehicles are zero emission by 2050, with an interim target of 30% zero emission vehicles by 2030.
We also have licensed insurance agents at several of our Rush Truck Centers. Human Capital Management On December 31, 2022, we employed 7,418 people in the U.S. and 621 in Canada. Of these employees, less than 1.3% of our workforce was classified as part-time. We do not regularly use independent contractors in our business operations.
Human Capital Management On December 31, 2023, we employed 7,860 people in the U.S. and 649 people in Canada. Of these employees, less than 1.4% of our workforce was classified as part-time. We do not regularly use independent contractors in our business operations.
We also provide an extended warranty beyond the manufacturer’s warranty on new Blue Bird school buses that we sell in Texas, as required by state law. 18 Table of Contents We generally sell used commercial vehicles in “as is” condition without a manufacturer’s warranty, although manufacturers sometimes will provide a limited warranty on their used products if such products have been properly reconditioned prior to resale or if the manufacturer’s warranty on such product is transferable and has not expired.
We generally sell used commercial vehicles in “as is” condition without a manufacturer’s warranty, although manufacturers sometimes will provide a limited warranty on their used products if such products have been properly reconditioned prior to resale or if the manufacturer’s warranty on such product is transferable and has not expired.
Our dealership agreements with Peterbilt may be terminated by Peterbilt in the event that the aggregate voting power of W.M. “Rusty” Rush, certain other members of the Rush family and certain executives of the Company decreases below 22%. Sales of new Peterbilt commercial vehicles accounted for approximately 31.9% of our total revenues for 2022. International.
These dealership agreements currently have terms expiring in July 2024. Our dealership agreements with Peterbilt may be terminated by Peterbilt in the event that the aggregate voting power of W.M. “Rusty” Rush, and certain current and former executives of the Company decreases below 22%. Sales of new Peterbilt commercial vehicles accounted for approximately 29.1% of our total revenues for 2023.
We believe the geographic diversity of our Rush Truck Center network has significantly expanded our customer base while reducing the effects of local economic cycles. 11 Table of Contents ● Open New Rush Truck Centers in Existing Areas of Operation .
We believe the geographic diversity of our Rush Truck Center network has significantly expanded our customer base while reducing the effects of local economic cycles. ● Open New Rush Truck Centers in Existing Areas of Operation . We continually evaluate opportunities to increase our market presence by adding new Rush Truck Centers within our current franchises’ areas of operation.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

58 edited+20 added−17 removed61 unchanged
Biggest changeFor example, in August 2021, the President of the United States issued an executive order intended to increase fuel efficiency, further reduce GHG emissions and speed up the development of “zero-emission” vehicles. The executive order calls for the EPA and the Secretary of Transportation to adopt new rules and regulations for commercial vehicles starting as early as model year 2027.
Biggest changeLaws and regulations intended to achieve the goal of significantly reducing engine emissions associated with the operation of commercial vehicles are complex and subject to change. For example, in August 2021, the President of the United States issued an executive order intended to increase fuel efficiency, further reduce GHG emissions and speed up the development of “zero-emission” vehicles.
Six of the states that signed are states where we sell new commercial vehicles: California, Colorado, New Mexico, North Carolina and Virginia. The signatories to the memorandum all agreed on a goal of ensuring that 100% of new Class 3 through 8 commercial vehicles are zero emission by 2050, with an interim target of 30% zero emission by 2030.
Six of the states that signed are states where we sell new commercial vehicles: California, Colorado, New Mexico, North Carolina and Virginia. The signatories to the memorandum all agreed on a goal of ensuring that 100% of new Class 3 through 8 commercial vehicles are zero emission by 2050, with an interim target of 30% zero emission vehicles by 2030.
Despite the security measures we have in place, our facilities and systems, and those of our third-party service providers, could be vulnerable to cyberattacks and other security breaches, computer viruses, lost or misplaced data, programming errors, human errors or other events, and such incidents can remain undetected for a period of time despite our best efforts to detect and respond to them in a timely manner.
However, despite the security measures we have in place, our facilities and systems, and those of our third-party service providers, could be vulnerable to cyberattacks and other security breaches, computer viruses, lost or misplaced data, programming errors, human errors or other events, and such incidents can remain undetected for a period of time despite our best efforts to detect and respond to them in a timely manner.
However, we may be exposed to claims for which coverage is not afforded or the damages exceed the limits of our insurance coverage or multiple claims causing us to incur significant out-of-pocket costs before reaching the deductible amount, all of which could adversely affect our financial condition and results of operations.
We may be exposed to claims for which coverage is not afforded or the damages exceed the limits of our insurance coverage or multiple claims causing us to incur significant out-of-pocket costs before reaching the deductible amount, all of which could adversely affect our financial condition and results of operations.
Due to our dependence on PACCAR and Peterbilt, we believe that our long-term success depends, in large part, on the following: ● our ability to maintain our dealership agreements with Peterbilt; ● the manufacture and delivery of competitively-priced, technologically current, high-quality Peterbilt trucks in quantities sufficient to meet our requirements; ● the overall success of PACCAR and Peterbilt; ● PACCAR’s continuation of its Peterbilt division; and ● the maintenance of goodwill associated with the Peterbilt brand, which can be adversely affected by decisions made by PACCAR, Peterbilt and the owners of other Peterbilt dealerships.
Due to our dependence on PACCAR and Peterbilt, we believe that our long-term success depends, in large part, on the following: ● our ability to maintain our dealership agreements with Peterbilt; ● the manufacture and delivery of competitively priced, technologically current, emissions-compliant, high-quality Peterbilt trucks in quantities sufficient to meet our requirements; ● the overall success of PACCAR and Peterbilt; ● PACCAR’s continuation of its Peterbilt division; and ● the maintenance of goodwill associated with the Peterbilt brand, which can be adversely affected by decisions made by PACCAR, Peterbilt and the owners of other Peterbilt dealerships.
Due to our dependence on Navistar, International and IC Bus, we believe that our long-term success depends, in large part, on the following: ● our ability to maintain our dealership agreements with International and IC Bus; ● the manufacture and delivery of competitively-priced, technologically current, high-quality International trucks and IC buses in quantities sufficient to meet our requirements; ● the overall success of Navistar; and ● the maintenance of goodwill associated with the International and IC Bus brands, which can be adversely affected by decisions made by Navistar and the owners of other International and IC Bus dealerships.
Due to our dependence on Navistar, International and IC Bus, we believe that our long-term success depends, in large part, on the following: ● our ability to maintain our dealership agreements with International and IC Bus; ● the manufacture and delivery of competitively priced, technologically current, emissions-compliant, high-quality International trucks and IC buses in quantities sufficient to meet our requirements; ● the overall success of Navistar; and ● the maintenance of goodwill associated with the International and IC Bus brands, which can be adversely affected by decisions made by Navistar and the owners of other International and IC Bus dealerships.
Rush were to sell his Class B common stock or bequest his Class B common stock to a person or entity other than the Dealer Principals, or if his estate is required to liquidate its Class B common stock this it owns, directly or indirectly, to pay estate taxes or otherwise, the change of control provisions of the Peterbilt dealership agreements may be triggered, which would give Peterbilt the right to terminate our dealership agreements.
Rush were to sell his Class B common stock or bequest his Class B common stock to a person or entity other than the Dealer Principals, or if his estate is required to liquidate its Class B common stock that it owns, directly or indirectly, to pay estate taxes or otherwise, the change of control provisions of the Peterbilt dealership agreements may be triggered, which would give Peterbilt the right to terminate our dealership agreements.
Any nonrenewal or imposition of less favorable terms upon renewal could have an adverse impact on our business and in the case of the Peterbilt or Navistar dealership agreements, would have an adverse impact on our business. 22 Table of Contents Our growth strategies may be unsuccessful if we are unable to successfully execute our strategic initiatives or identify and complete future acquisitions.
Any nonrenewal or imposition of less favorable terms upon renewal could have an adverse impact on our business and in the case of the Peterbilt or Navistar dealership agreements, would have an adverse impact on our business. 19 Table of Contents Our growth strategies may be unsuccessful if we are unable to successfully execute our strategic initiatives or identify and complete future acquisitions.
A negative change in any of the preceding, or a change in control of Navistar, could have a material adverse effect on our operations, revenues and profitability. 21 Table of Contents Our dealership agreements may be terminable upon a change of control and we cannot control whether our controlling shareholder and management maintain their current ownership positions.
A negative change in any of the preceding, or a change in control of Navistar, could have a material adverse effect on our operations, revenues and profitability. 18 Table of Contents Our dealership agreements may be terminable upon a change of control, and we cannot control whether our controlling shareholder and management maintain their current ownership positions.
However, any rise in interest rates generally may also have the effect of depressing demand in the interest rate sensitive aspects of our business, particularly new and used commercial vehicle sales, because many of our customers finance such purchases.
In addition, any rise in interest rates generally may also have the effect of depressing demand in the interest rate sensitive aspects of our business, particularly new and used commercial vehicle sales, because many of our customers finance such purchases.
Rush, Robin M. Rush or any person who has been approved in writing by PACCAR holds the office of Chairman of the Board, President or Chief Executive Officer of the Company. We have no control over the transfer or disposition of Mr. Rush’s, or his estate’s, common stock. If Mr.
Rush or any person who has been approved in writing by PACCAR, holds the office of Chairman of the Board and the President or Chief Executive Officer of the Company. We have no control over the transfer or disposition of Mr. Rush’s, or his estate’s, common stock. If Mr.
Some of our dealerships are located in regions of the United States where natural disasters and severe weather events (such as hurricanes, earthquakes, fires, floods, tornadoes and hail storms) may disrupt our operations, which may adversely impact our business, results of operations, financial condition and cash flows.
Some of our dealerships are located in regions of the United States where natural disasters and severe weather events (such as hurricanes, earthquakes, fires, floods, tornadoes and hailstorms) may disrupt our operations, which may adversely impact our business, results of operations, financial condition and cash flows.
Given the potential for industry headwinds in the coming months caused by lower spot rates and higher interest rates, which could negatively impact industry demand for new commercial vehicles moving forward, we believe that the longer it takes to fill our backlog, the greater the risk that a significant amount of commercial vehicle orders currently reflected in our backlog could be cancelled.
Given the potential for industry headwinds in the coming months caused by low spot rates and high interest rates, which could negatively impact industry demand for new commercial vehicles moving forward, we believe that the longer it takes to fill our backlog, the greater the risk that a significant amount of commercial vehicle orders currently reflected in our backlog could be cancelled.
We have no control over the management or operation of Peterbilt or PACCAR. During 2022, the majority of our revenues resulted from sales of trucks purchased from Peterbilt and parts purchased from PACCAR Parts.
We have no control over the management or operation of Peterbilt or PACCAR. During 2023, the majority of our revenues resulted from sales of trucks purchased from Peterbilt and parts purchased from PACCAR Parts.
In addition, the cost of such insurance policies may increase significantly upon renewal of those policies as a result of general rate increases for the type of insurance we carry as well as our historical experience and experience in our industry.
In addition, the cost of third-party insurance policies may increase significantly upon renewal of those policies as a result of general rate increases for the type of insurance we carry as well as our historical experience and experience in our industry.
During 2022, a significant portion of our revenues resulted from sales of trucks purchased from International, buses purchased from IC Bus and parts purchased from Navistar.
During 2023, a significant portion of our revenues resulted from sales of trucks purchased from International, buses purchased from IC Bus and parts purchased from Navistar.
Similarly, in June 2020, the California Air Resources Board adopted a final rule that is intended to phase out the sale of diesel-powered commercial vehicles over time by requiring a certain percentage of each manufacturer’s commercial vehicles sold within the state to be “zero-emission vehicles,” or “near-zero emission vehicles,” starting in model year 2024.
Similarly, in June 2020, CARB adopted a final rule that is intended to phase out the sale of diesel-powered commercial vehicles over time by requiring a certain percentage of each manufacturer’s commercial vehicles sold within the state to be “zero-emission vehicles,” or “near-zero emission vehicles,” starting in model year 2024.
The manufacturers we represent may be adversely impacted by economic downturns, significant declines in the sales of their new vehicles, labor strikes or similar disruptions (including within their major suppliers), rising raw materials costs, rising employee benefit costs, adverse publicity that may reduce consumer demand for their products (including due to bankruptcy), product defects, vehicle recall campaigns, litigation, poor product mix or unappealing vehicle design, governmental laws and regulations, or other adverse events.
The manufacturers we represent may be adversely impacted by economic downturns, significant declines in the sales of their new vehicles, the ability to manufacture or supply vehicles that comply with applicable emissions requirements, labor strikes or similar disruptions (including within their major suppliers), rising raw materials costs, rising employee benefit costs, adverse publicity that may reduce consumer demand for their products (including due to bankruptcy), product defects, vehicle recall campaigns, litigation, poor product mix or unappealing vehicle design, governmental laws and regulations, or other adverse events.
In addition, the lack of a robust resale market may require a shareholder to sell a large number of shares of our Class B common stock in increments over time to mitigate any adverse impact of the sales on the market price of our Class B common stock. If W.M.
In addition, the lack of a robust resale market may require a shareholder to sell a large number of shares of our Class B common stock in increments over time to mitigate any adverse impact of the sales on the market price of our Class B common stock. 26 Table of Contents
Rush and his affiliate own approximately 0.3% of our issued and outstanding shares of Class A common stock and 47.3% of our issued and outstanding Class B common stock. Mr. Rush collectively controls approximately 41.8% of the aggregate voting power of our outstanding shares, which is substantially more than any other person or group. The interests of Mr.
Rush and his affiliate own approximately 0.3% of our issued and outstanding shares of Class A common stock and 43.7% of our issued and outstanding Class B common stock. Mr. Rush collectively controls approximately 36.6% of the aggregate voting power of our outstanding shares, which is substantially more than any other person or group. The interests of Mr.
The volume of trading in our Class B common stock varies greatly and may often be light. As of December 31, 2022, the three-month average daily trading volume of our Class B common stock was approximately 17,500 shares, with twenty-five days having a trading volume below 10,000 shares.
The volume of trading in our Class B common stock varies greatly and may often be light. As of December 31, 2023, the three-month average daily trading volume of our Class B common stock was approximately 20,330 shares, with five days having a trading volume below 10,000 shares.
Compliance with current or amended, or new or more stringent, laws or regulations, stricter interpretations of existing laws or the future discovery of environmental conditions could require additional expenditures by us which could materially adversely affect our results of operations, financial condition or cash flows. In addition, such laws could affect demand for the products that we sell.
In addition, compliance with current or amended, or new or more stringent, laws or regulations, stricter interpretations of existing laws or the future discovery of environmental conditions could require additional expenditures by us which could materially adversely affect our results of operations, financial condition or cash flows. We have operations in Canada.
The success of each of our dealerships is dependent on the manufacturers represented at each dealership. Our ability to sell new vehicles that satisfy our customers’ demands and replacement parts is dependent on the ability of the manufacturers we represent to produce and deliver new vehicles and replacement parts to our dealerships.
Our ability to sell new vehicles that satisfy our customers’ demands and replacement parts is dependent on the ability of the manufacturers we represent to produce and deliver new vehicles and replacement parts to our dealerships.
“Rusty” Rush, Scott Anderson, Steven Keller and Corey Lowe, along with certain other persons who no longer work for the Company (collectively, the “Dealer Principals”) decreases below 22% (the Dealer Principals, excluding those who no longer work for the Company, controlled approximately 44.0% of the aggregate voting power with respect to the election of directors as of December 31, 2022); or (ii) any person or entity other than the Dealer Principals and their respective associates, or any person or entity who has been approved in writing by PACCAR, owns common stock with a greater percentage of the voting power with respect to the election of our directors than the Dealer Principals and their respective associates, in the aggregate, or any person other than Mr.
“Rusty” Rush, Scott Anderson, Steven Keller, Corey Lowe, Jody Pollard, Jason Wilder, Michael Goldstone, Mike Eppes and Michael McRoberts, along with certain other persons who no longer work for the Company (collectively, the “Dealer Principals”) decreases below 22% (the Dealer Principals, excluding those who no longer work for the Company, controlled approximately 41.6% of the aggregate voting power with respect to the election of directors as of December 31, 2023); or (ii) any person or entity other than the Dealer Principals and their respective associates, or any person or entity who has been approved in writing by PACCAR, owns common stock with a greater percentage of the voting power with respect to the election of our directors than the Dealer Principals and their respective associates, in the aggregate, or any person other than Mr.
Our dealership agreements with the manufacturers we represent have current terms expiring between May 2023 and December 2027. Upon expiration of each agreement, we must negotiate a renewal.
Our dealership agreements with the manufacturers we represent have current terms expiring between March 2024 and May 2029. Upon expiration of each agreement, we must negotiate a renewal.
The concerns over climate change may impact our business in the future. Our current business model depends on our ability to sell, and provide services to, commercial vehicles primarily powered by diesel and gasoline internal combustion engines, which result in greenhouse gas emissions.
Our current business model depends on our ability to sell, and provide services to, commercial vehicles primarily powered by diesel and gasoline internal combustion engines, which result in greenhouse gas emissions.
Disruptions to our information technology systems and breaches in data or system security could adversely affect our business. We rely upon our information technology systems to manage all aspects of our business, including processing and recording sales to, and payments from, customers, managing inventory, communicating with manufacturers and vendors, processing employee payroll and benefits and financial reporting.
We rely upon our information technology systems to manage all aspects of our business, including processing and recording sales to, and payments from, customers, managing inventory, communicating with manufacturers and vendors, processing employee payroll and benefits and financial reporting.
Any cyberattack, security breach or other event resulting in the misappropriation, loss, or other unauthorized disclosure of confidential information of personal identifiable information of employees or customers, whether by us directly or our third-party service providers, could adversely affect our business operations, sales, reputation with current and potential customers, associates or vendors and employees and result in litigation or regulatory actions, all of which could have a material adverse effect on our business and reputation. 27 Table of Contents We are exposed to a variety of claims relating to our business and the liability associated with such claims may exceed the level of our insurance coverage.
Any cyberattack, security breach or other event resulting in the misappropriation, loss, or other unauthorized disclosure of confidential information of personal identifiable information of employees or customers, whether by us directly or our third-party service providers, could adversely affect our business operations, sales, reputation with current and potential customers, associates or vendors and employees and result in litigation or regulatory actions, all of which could have a material adverse effect on our business and reputation.
Rush and his affiliate, the requirement in our dealership agreements that the Dealer Principals retain a controlling interest in us and the restrictions on the sale or transfer of our franchises contained in our dealer agreements, combined with the ability of the Board of Directors to issue shares of preferred stock without further vote or action by the shareholders, may discourage, delay or prevent a change in control without further action by our shareholders, which could adversely affect the market price of our common stock or prevent or delay a merger or acquisition that our shareholders may consider favorable. 28 Table of Contents Actions by our shareholders or prospective shareholders that would violate any of the above restrictions on our dealership agreements are generally outside of our control.
Rush and his affiliate, the requirement in our dealership agreements that the Dealer Principals retain a controlling interest in us, the restrictions on who may serve as Chairman of the Board and President or Chief Executive Officer of the Company, and the restrictions on the sale or transfer of our franchises contained in our dealer agreements, combined with the ability of the Board of Directors to issue shares of preferred stock without further vote or action by the shareholders, may discourage, delay or prevent a change in control without further action by our shareholders, which could adversely affect the market price of our common stock or prevent or delay a merger or acquisition that our shareholders may consider favorable.
We have, from time to time, experienced threats to our data and systems, including malware, ransomware and computer virus attacks. We are continuously developing and enhancing our controls, processes, and practices designed to protect our systems, computers, software, data, and networks from attack, damage, or unauthorized access. This continued development and enhancement requires us to expend significant additional resources.
We have, from time to time, experienced threats to our data and systems, including malware, ransomware and computer virus attacks. As discussed above, we are continuously developing and enhancing our controls, processes, and practices designed to protect our systems, computers, software, data, and networks from attack, damage, or unauthorized access.
In addition, in July 2020, a group of fifteen U.S. states and the District of Columbia entered into a joint memorandum of understanding that commits each of them to work together to advance and accelerate the market for electric Class 3 through 8 commercial vehicles and two additional states have since signed.
Since July 2020, a group of seventeen U.S. states and the District of Columbia entered into a joint memorandum of understanding that adopts at least a portion of CARB’s emissions regulations and commits each of them to work together to advance and accelerate the market for electric Class 3 through 8 commercial vehicles.
Although we have substantial insurance to mitigate this risk, we may be exposed to uninsured or underinsured losses that could have a material adverse effect on our business, financial condition, results of operations or cash flows. Risks Related to Financial and Economic Matters We may be required to obtain additional financing to maintain adequate inventory levels.
Thus, we may be exposed to property losses that could have a material adverse effect on our business, financial condition, results of operations or cash flows, although we believe that such a material adverse effect would be unlikely. 20 Table of Contents Risks Related to Financial and Economic Matters We may be required to obtain additional financing to maintain adequate inventory levels.
State dealer laws generally provide that a manufacturer may not terminate or refuse to renew a dealership agreement unless it has first provided the dealer with written notice setting forth good cause and stating the grounds for termination or nonrenewal. Vehicle manufacturers’ lobbying efforts may lead to the repeal or revision of state motor vehicle dealer laws.
We depend on our vehicle dealership agreements for a substantial portion of our revenues and profitability. State dealer laws generally provide that a manufacturer may not terminate or refuse to renew a dealership agreement unless it has first provided the dealer with written notice setting forth good cause and stating the grounds for termination or nonrenewal.
As a result, a rise in interest rates may have the effect of simultaneously increasing our costs and reducing our revenues, which could negatively affect our business, financial condition and results of operations.
As a result, a rise in interest rates may have the effect of simultaneously increasing our costs and reducing our revenues, which could negatively affect our business, financial condition and results of operations. See “Quantitative and Qualitative Disclosures about Market Risk” for a discussion regarding our interest rate sensitivity.
In connection with dispositions of businesses, or dispositions previously made by companies we acquire, we may retain exposure for environmental costs and liabilities, some of which may be material. 26 Table of Contents Further, environmental laws and regulations are complex and subject to change.
In connection with dispositions of businesses, or dispositions previously made by companies we acquire, we may retain exposure for environmental costs and liabilities, some of which may be material.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates — Goodwill” for more information regarding the potential impact of changes in assumptions. Our business is subject to a number of economic risks New and used commercial vehicle retail sales tend to experience periods of decline when general economic conditions worsen.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates — Goodwill” for more information regarding the potential impact of changes in assumptions. 21 Table of Contents Our business is subject to a number of economic risks.
Attaining these goals would likely require the adoption of new laws and regulations and we cannot predict at this time whether such laws and regulations would have an adverse impact on our business.
Attaining these goals would likely require the adoption of new laws and regulations and we cannot predict at this time whether such laws and regulations would have an adverse impact on our business. In addition, engine emissions rules and regulations could affect demand for the products that we sell in certain markets.
However, we may not anticipate or combat all types of future attacks until after they have been launched. If any of these breaches of security occur, we will be required to expend additional capital and other resources, including costs to deploy additional personnel and protection technologies, train employees and engage third-party experts and consultants.
If any of these breaches of security occur, we will be required to expend additional capital and other resources, including costs to deploy additional personnel and protection technologies, train employees and engage third-party experts and consultants.
We could also be subject to potential litigation associated with compliance with various laws and governmental regulations at the federal, state or local levels, such as those relating to vehicle and highway safety, health and workplace safety, security and employment-related claims.
We could also be subject to potential litigation associated with compliance with various laws and governmental regulations at the federal, state or local levels, such as those relating to vehicle and highway safety, health and workplace safety, security and employment-related claims. 24 Table of Contents We utilize a captive insurance company to manage our auto and general commercial liability insurance, which we supplement with excess insurance coverage.
Most of the incentives and discounts are individually negotiated and not always the same as those made available to commercial vehicle manufacturers or our competitors. These incentives and discounts are material to our operations.
Most of the incentives and discounts are individually negotiated and not always the same as those made available to commercial vehicle manufacturers or our competitors. These incentives and discounts are material to our operations. A reduction or discontinuation of a commercial vehicle manufacturer’s or component supplier’s incentive program could have a material adverse effect on our profitability.
We may experience sustained periods of decreased commercial vehicle sales in the future. Any decline or change of this type could materially affect our business, financial condition and results of operations. In addition, adverse regional economic and competitive conditions in the geographic markets in which we operate could materially adversely affect our business, financial condition and results of operations.
New and used commercial vehicle retail sales tend to experience periods of decline when general economic conditions worsen. We may experience sustained periods of decreased commercial vehicle sales in the future. Any decline or change of this type could materially affect our business, financial condition and results of operations.
If we were to experience significant cancellations of orders in our backlog, our financial condition could be adversely affected. Our current backlog is the largest it has ever been in our Company’s history.
If we were to experience significant cancellations of orders in our backlog, our financial condition could be adversely affected.
In addition, in the ordinary course of business, we collect and store sensitive data and information, including our proprietary business information and that of our customers, suppliers and business partners, as well as personally identifiable information about our employees and customers.
In addition, in the ordinary course of business, we collect and store sensitive data and information, including our proprietary business information and that of our customers, suppliers and business partners, as well as personally identifiable information about our employees and customers. We take an enterprise-wide approach to cybersecurity, using established processes for assessing, identifying, and managing risks from cybersecurity threats.
Our Floor Plan Credit Agreement, RTC Canada Floor Plan Agreement, WF Credit Agreement, PLC Agreement and RTC Canada Revolving Credit Agreement are each subject to variable interest rates. Therefore, our interest expense rises when interest rates increase. Currently, our outstanding borrowings under our Floor Plan Credit Agreement and certain other loan agreements are borrowed at LIBOR plus an applicable margin.
Our Floor Plan Credit Agreement, RTC Canada Floor Plan Agreement, WF Credit Agreement, PLC Agreement and RTC Canada Revolving Credit Agreement are each subject to variable interest rates. Therefore, our interest expense rises when interest rates increase.
Our dealership agreements could discourage another company from acquiring us. Our dealership agreements with Peterbilt impose ownership requirements on certain officers of the Company. All of our dealership agreements include restrictions on the sale or transfer of the underlying franchises.
Our dealership agreements with Peterbilt impose ownership requirements on certain officers of the Company. All of our dealership agreements include restrictions on the sale or transfer of the underlying franchises. These ownership requirements and restrictions may prevent or deter prospective acquirers from acquiring control of us and, therefore, may adversely impact the value of our common stock.
The carrying value of goodwill represents the fair value of an acquired business in excess of identifiable assets and liabilities as of the acquisition date. Goodwill is not amortized, but instead is evaluated for impairment at least annually, or more frequently if potential interim indicators exist that could result in impairment.
Goodwill is not amortized, but instead is evaluated for impairment at least annually, or more frequently if potential interim indicators exist that could result in impairment.
Impairment in the carrying value of goodwill and other indefinite-lived intangible assets could negatively affect our operating results. We have a substantial amount of goodwill on our balance sheet as a result of acquisitions we have completed. Approximately 99% of this goodwill is concentrated in our Truck Segment.
We have a substantial amount of goodwill on our balance sheet as a result of acquisitions we have completed. Approximately 99% of this goodwill is concentrated in our Truck Segment. The carrying value of goodwill represents the fair value of an acquired business in excess of identifiable assets and liabilities as of the acquisition date.
We depend on relationships with the manufacturers we represent and component suppliers for sales incentives, discounts and similar programs which are material to our operations.
Economic conditions and the other factors described above also may materially adversely impact our sales of parts and repair services, and finance and insurance products. We depend on relationships with the manufacturers we represent and component suppliers for sales incentives, discounts and similar programs which are material to our operations.
In fact, due to the rising costs of premiums over the last couple of years, we have been increasing our use of self-insurance programs and increasing the amounts of our deductibles. We have operations in Canada.
In fact, due to the rising costs of premiums over the last couple of years, we have been generally increasing our use of self-insurance programs and increasing the amounts of our deductibles. Our dealerships are subject to federal, state and local environmental regulations that may result in claims and liabilities, which could be material.
Scientific evidence suggests that a warming climate potentially results in an environment more prone to natural disasters, such as hurricanes and flooding. To date, we have seen increases in our cost to insure against such risks, which costs could continue to increase should this trend continue.
Scientific evidence suggests that a warming climate potentially results in an environment more prone to natural disasters, such as hurricanes and flooding.
In addition to business interruption, our business is subject to substantial risk of property loss due to the significant concentration of property at dealership locations.
In addition to business interruption, our business is subject to substantial risk of property loss due to the significant concentration of property at dealership locations. Although our vehicle inventory is insured, we self-insure our property insurance with respect to the real property and personal property (other than our vehicle inventory) that we own.
See “Quantitative and Qualitative Disclosures about Market Risk” for a discussion regarding our interest rate sensitivity. 24 Table of Contents The dollar amount of our backlog, as stated at any given time, is not necessarily indicative of our future earnings. As of December 31, 2022, our backlog of new commercial vehicle orders was approximately $4,216.0 million.
The dollar amount of our backlog, as stated at any given time, is not necessarily indicative of our future earnings. As of December 31, 2023, our backlog of new commercial vehicle orders was approximately $3,733.4 million.
Actions taken in response to continued operational losses by manufacturers we represent, including bankruptcy or reorganizations, could also eliminate or reduce such manufacturers’ indemnification obligations to our dealerships, which could increase our risk in products liability actions.
Actions taken in response to continued operational losses by manufacturers we represent, including bankruptcy or reorganizations, could also eliminate or reduce such manufacturers’ indemnification obligations to our dealerships, which could increase our risk in products liability actions. 22 Table of Contents Risks Related to Legal and Regulatory Matters If state dealer laws are repealed or weakened, our dealerships will be more susceptible to termination, nonrenewal or renegotiation of their dealership agreements.
Rush may not be consistent with the interests of all shareholders. As a result of such ownership, Mr. Rush has the ability to exercise substantial control over the Company, including with respect to the election of directors, the determination of matters requiring shareholder approval and other matters pertaining to corporate governance.
Rush has the ability to exercise substantial control over the Company, including with respect to the election of directors, the determination of matters requiring shareholder approval and other matters pertaining to corporate governance. 25 Table of Contents Our dealership agreements could discourage another company from acquiring us.
If we are unable to renegotiate these restrictions, we may be forced to terminate or sell one or more of our dealerships, which could have a material adverse effect on us. These restrictions may also inhibit our ability to raise required capital or to issue our stock as consideration for future acquisitions.
Actions by our shareholders or prospective shareholders that would violate any of the above restrictions on our dealership agreements are generally outside of our control. If we are unable to renegotiate these restrictions, we may be forced to terminate or sell one or more of our dealerships, which could have a material adverse effect on us.
A reduction or discontinuation of a commercial vehicle manufacturer’s or component supplier’s incentive program could have a material adverse effect on our profitability. 25 Table of Contents We are dependent on the ongoing success of the manufacturers we represent and adverse conditions affecting the manufacturers we represent may negatively impact our revenues and profitability.
We are dependent on the ongoing success of the manufacturers we represent and adverse conditions affecting the manufacturers we represent may negatively impact our revenues and profitability. The success of each of our dealerships is dependent on the manufacturers represented at each dealership.
The potential impacts that we list above, and other impacts of the COVID-19 pandemic, are likely to also have the effect of heightening many of the other risk factors described herein. 23 Table of Contents Climate change concerns may impact our business in the future; natural disasters and adverse weather events can disrupt our business.
Climate change concerns may impact our business in the future; natural disasters and adverse weather events can disrupt our business. The concerns over climate change may impact our business in the future.
Our commercial vehicle sales volume therefore may differ from industry sales fluctuations. Economic conditions and the other factors described above also may materially adversely impact our sales of parts and repair services, and finance and insurance products.
In addition, adverse regional economic and competitive conditions in the geographic markets in which we operate could materially adversely affect our business, financial condition and results of operations. Our commercial vehicle sales volume therefore may differ from industry sales fluctuations.
Removed
COVID-19 has disrupted, and may continue to disrupt, our business, which could adversely affect our financial performance. In March 2020, the World Health Organization made the assessment that COVID-19 could be characterized as a pandemic, and the President of the United States declared the COVID-19 outbreak a national emergency.
Added
In addition, given the current regulatory uncertainty in connection with CARB’s rules and regulations, we believe that certain commercial vehicle orders currently reflected in our backlog could be cancelled with respect to customers that intend to operate such vehicles in California. Impairment in the carrying value of goodwill and other indefinite-lived intangible assets could negatively affect our operating results.
Removed
While our Rush Truck Centers have remained operational throughout the COVID-19 pandemic, the pandemic remains a fluid and evolving situation.
Added
Vehicle manufacturers’ lobbying efforts may lead to the repeal or revision of state motor vehicle dealer laws.
Removed
Some of the potential impacts to our business that we believe are directly related to the COVID-19 pandemic and that we are currently monitoring include, but are not limited to: ● The impact that the pandemic will have on our workforce availability; ● The impact that the pandemic will have on the supply chains of the commercial vehicle manufacturers and parts manufacturers that we represent.
Added
The commercial vehicles that we sell are subject to federal and state regulations focused on reducing engine emissions and we are dependent on the manufacturers that we represent to produce or supply engines that comply with such regulations.
Removed
We have been informed by the commercial vehicle manufacturers that we represent that production of commercial vehicles in 2023 will be allocated to all of their dealers based on historical purchases.
Added
The executive order calls for the EPA and the Secretary of Transportation to adopt new rules and regulations for commercial vehicles starting as early as model year 2027.
Removed
While we do not expect our allocation of commercial vehicles to be less than the number of commercial vehicles we sold in 2022, there is still concern that component manufacturers’ supply chain issues may limit certain of our commercial vehicle manufacturers’ ability to meet demand throughout the year; and ● The impact of the pandemic on global capital markets, which depending on future developments, could impact our capital resources and liquidity in the future.
Added
In July 2023, CARB and various manufacturers of heavy-duty commercial vehicles and engines, including PACCAR, Navistar, Ford, Hino, Isuzu and Cummins, entered into the Clean Truck Partnership, whereby the manufacturers agreed to comply with CARB’s emission requirements where applicable, regardless of whether any entity challenges CARB’s rule-making authority, and CARB agreed to work with manufacturers to provide reasonable lead time to meet CARB’s requirements and before imposing new regulations.
Removed
Although LIBOR is no longer being used to price new loans, LIBOR quotes will be available for existing credit agreements until June 30, 2023. In the event that LIBOR quotes are no longer available, SOFR will replace LIBOR in certain of our credit agreements which currently use LIBOR, including our Floor Plan Credit Agreement.
Added
In addition, CARB agreed to align its nitrogen oxide emissions rules with the EPA’s, which go into effect starting in model year 2027, and modify certain of its 2024 nitrogen oxide emissions regulations, currently in effect, with respect to which manufacturers may provide certain offsets to meet CARB's emmision targets in exhange for the ability to sell legacy engines.
Removed
It is unclear how increased regulatory oversight and changes in the method for determining benchmark interest rates may affect our results of operations or financial conditions.
Added
For example, there is currently uncertainty regarding CARB’s regulations that became effective January 1, 2024. The regulations require a certain percentage of each manufacturer’s commercial vehicles that are sold in California to be “zero-emission vehicles,” or “near-zero emission vehicles,” starting in model year 2024.
Removed
Risks Related to Legal and Regulatory Matters If state dealer laws are repealed or weakened, our dealerships will be more susceptible to termination, nonrenewal or renegotiation of their dealership agreements. We depend on our vehicle dealership agreements for a substantial portion of our revenues and profitability.
Added
There are currently multiple lawsuits pending where plaintiffs are challenging CARB’s rules on the basis that, amongst other things, such rules are preempted by other federal laws and that the EPA exceeded its authority in granting a waiver allowing CARB’s rules to take effect.
Removed
Our dealerships are subject to federal, state and local environmental regulations that may result in claims and liabilities, which could be material.
Added
We are working with the manufacturers we represent to understand the potential limitations on the sale of certain new commercial vehicles within California going forward, and the potential limitations that may apply to our customers that may operate model year 2024 and later commercial vehicles within California.
Removed
We carry comprehensive liability insurance, subject to deductibles and self-insured retentions, at levels we believe are sufficient to mitigate existing and future claims.
Added
While we do not currently believe that any reduction in the number of new commercial vehicles that we may be able to sell due to CARB’s rules and regulations would have a material adverse effect on our results in 2024, our success going forward depends on the ability of our manufacturers to successfully supply new commercial vehicles that comply with existing and future emissions rules and regulations in each of the markets in which we operate. 23 Table of Contents Disruptions to our information technology systems and breaches in data or system security could adversely affect our business.
Removed
These ownership requirements and restrictions may prevent or deter prospective acquirers from acquiring control of us and, therefore, may adversely impact the value of our common stock. Additionally, Mr.
Added
We have implemented various measures across our organization to manage our cybersecurity risks, including implementing systems to identify, prevent, detect, investigate, resolve, and recover from cyber security attacks. All employees participate in our security awareness training program, and additional training is required for various roles within the organization.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe lease a hangar in New Braunfels, Texas for our corporate aircraft. We also own and operate a guest ranch of approximately 10,500 acres near Cotulla, Texas, which is used for client development purposes. 29 Table of Contents
Biggest changeWe lease a hangar in New Braunfels, Texas for our corporate aircraft. We also own and operate a guest ranch of approximately 10,950 acres near Cotulla, Texas, which is used for client development purposes.
Item 2. Properties Our corporate headquarters are located in New Braunfels, Texas. As of December 2022, we also own or lease numerous facilities used in our operations in the following locations: Alabama, Arizona, Arkansas, California, Colorado, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Missouri, New Mexico, Nebraska, Nevada, North Carolina, Ohio, Oklahoma, Pennsylvania, Tennessee, Texas, Utah, Virginia and Ontario, Canada.
Item 2. Properties Our corporate headquarters are located in New Braunfels, Texas. As of December 2023, we also own or lease numerous facilities used in our operations in the following locations: Alabama, Arizona, Arkansas, California, Colorado, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Missouri, New Mexico, Nevada, North Carolina, Ohio, Oklahoma, Pennsylvania, Tennessee, Texas, Utah, Virginia and Ontario, Canada.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeHowever, due to the inherent uncertainty of litigation, there can be no assurance that the resolution of any particular claim or proceeding would not have a material adverse effect on our financial condition or results of operations for the fiscal period in which such resolution occurred.
Biggest changeHowever, due to the inherent uncertainty of litigation, there can be no assurance that the resolution of any particular claim or proceeding would not have a material adverse effect on our financial condition or results of operations for the fiscal period in which such resolution occurred. 27 Table of Contents
As of December 31, 2022, we believe that there are no pending claims or litigation, individually or in the aggregate, that are reasonably likely to have a material adverse effect on our financial position or results of operations.
As of December 31, 2023, we believe that there are no pending claims or litigation, individually or in the aggregate, that are reasonably likely to have a material adverse effect on our financial position or results of operations.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following table sets forth the high and low sales prices for our Class A common stock and Class B common stock for the fiscal periods indicated and as quoted on The NASDAQ Global Select Market SM and dividends declared. 2022 2021 Dividends Declared High Low Dividends Declared High Low Class A Common Stock First Quarter $ .19 $ 60.89 $ 47.34 $ .18 $ 51.92 $ 39.21 Second Quarter .19 54.37 46.73 .18 51.98 41.06 Third Quarter .21 52.99 42.72 .19 48.76 40.95 Fourth Quarter .21 55.06 44.15 .19 57.66 45.00 Class B Common Stock First Quarter $ .19 $ 58.01 $ 44.73 $ .18 $ 47.10 $ 36.40 Second Quarter .19 52.75 44.18 .18 46.81 36.20 Third Quarter .21 60.01 46.88 .19 47.40 36.21 Fourth Quarter .21 58.26 48.46 .19 57.40 45.78 As of February 2, 2023, there were approximately 18 record holders of Class A common stock and approximately 28 record holders of Class B common stock.
Biggest changeThe following table sets forth the high and low sales prices for our Class A common stock and Class B common stock for the fiscal periods indicated and as quoted on The NASDAQ Global Select Market SM and dividends declared. 2023 2022 Dividends Declared High Low Dividends Declared High Low Class A Common Stock First Quarter $ .14 $ 41.47 $ 33.44 $ .13 $ 40.59 $ 31.56 Second Quarter .14 41.32 33.37 .13 36.25 31.15 Third Quarter .17 46.30 38.85 .14 35.33 28.48 Fourth Quarter .17 50.42 34.68 .14 36.71 29.43 Class B Common Stock First Quarter $ .14 $ 43.73 $ 35.43 $ .13 $ 38.67 $ 29.82 Second Quarter .14 45.93 36.57 .13 35.17 29.45 Third Quarter .17 50.05 42.54 .14 40.01 31.25 Fourth Quarter .17 53.11 39.81 .14 38.84 32.31 As of February 2, 2024, there were approximately 18 record holders of Class A common stock and approximately 18 record holders of Class B common stock.
Information regarding our equity compensation plans is incorporated by reference from Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters,” of this annual report on Form 10-K and should be considered an integral part of this Item 5. 31 Table of Contents Performance Graph The graph below matches the cumulative 5-Year total return of holders of Rush Enterprises, Inc.'s common stock with the cumulative total returns of the S&P 500 index and a customized peer group of four companies that includes: Lithia Motors Inc, Paccar Inc, Penske Automotive Group Inc and Werner Enterprises Inc.
Information regarding our equity compensation plans is incorporated by reference from Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters,” of this annual report on Form 10-K and should be considered an integral part of this Item 5. 29 Table of Contents Performance Graph The graph below matches the cumulative 5-Year total return of holders of Rush Enterprises, Inc.'s common stock with the cumulative total returns of the S&P 500 index and a customized peer group of four companies that includes: Lithia Motors Inc, Paccar Inc, Penske Automotive Group Inc and Werner Enterprises Inc.
Item 5. Market for Registrant ’ s Common Equity, Related Shareholder Matters, and Issuer Purchases of Equity Securities Our common stock trades on The NASDAQ Global Select Market SM under the symbols RUSHA and RUSHB. During 2022, our Board of Directors approved four quarterly cash dividends on all outstanding shares of common stock totaling $0.80 per share.
Item 5. Market for Registrant ’ s Common Equity, Related Shareholder Matters, and Issuer Purchases of Equity Securities Our common stock trades on The NASDAQ Global Select Market SM under the symbols RUSHA and RUSHB. During 2023, our Board of Directors approved four quarterly cash dividends on all outstanding shares of common stock totaling $0.62 per share.
The stock price performance included in this graph is not necessarily indicative of future stock price performance. 32 Table of Contents
The stock price performance included in this graph is not necessarily indicative of future stock price performance. 30 Table of Contents
On December 2, 2022, we announced the approval of a new stock repurchase program, effective December 2, 2022, authorizing management to repurchase, from time to time, up to an aggregate of $150.0 million of our shares of Class A common stock and/or Class B common stock.
On December 6, 2023, we announced the approval of a new stock repurchase program, effective December 5, 2023, authorizing management to repurchase, from time to time, up to an aggregate of $150.0 million of our shares of Class A common stock and/or Class B common stock.
(2) The shares represent Class A and Class B common stock repurchased by us. (3) We repurchased shares in 2022 under a stock repurchase program announced on November 30, 2021, which authorized the repurchase of up to $100.0 million of our shares of Class A common stock and/or Class B common stock.
(2) The shares represent Class A and Class B common stock repurchased by us. (3) We repurchased shares in 2023 under a stock repurchase program announced on December 2, 2022, which authorized the repurchase of up to $150.0 million of our shares of Class A common stock and/or Class B common stock.
This plan was terminated effective December 1, 2022; we repurchased $93.1 million shares of our Class A and Class B common stock under the plan prior to its termination.
This plan was terminated effective December 3, 2023; we repurchased $150.0 million shares of our Class A and Class B common stock under the plan prior to its termination.
As of December 31, 2022, we have not sold any securities in the last three years that were not registered under the Securities Act. 30 Table of Contents A summary of our stock repurchase activity for the fourth quarter of 2022 is as follows: Period Total Number of Shares Purchased (1)(2)(3) Average Price Paid Per Share (1) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (3) October 1 – October 31, 2022 29,477 $ 45.74 (4) 29,477 $ 6,873,493 November 1 – November 30, 2022 – – (5) – 6,873,493 December 1 – December 31, 2022 113,192 51.21 113,192 144,200,145 Total 142,669 142,669 (1) The calculation of the average price paid per share does not give effect to any fees, commissions or other costs associated with the repurchase of such shares.
As of December 31, 2023, we have not sold any securities in the last three years that were not registered under the Securities Act. 28 Table of Contents A summary of our stock repurchase activity for the fourth quarter of 2023 is as follows: Period Total Number of Shares Purchased (1)(2)(3) Average Price Paid Per Share (1) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (3) October 1 – October 31, 2023 555,284 $ 39.77 (4) 555,284 $ 12,972,149 November 1 – November 30, 2023 341,834 37.92 (5) 341,834 500 December 1 – December 31, 2023 1,553,738 43.49 (6) 1,553,738 82,420,519 Total 2,450,856 2,450,856 (1) The calculation of the average price paid per share does not give effect to any fees, commissions or other costs associated with the repurchase of such shares.
(4) Represents 29,477 shares of Class A common stock at an average price paid per share of $45.74. (5) Represents 104,179 shares of Class A common stock at an average price paid per share of $50.96 and 9,013 shares of Class B common stock at an average price paid per share of $54.07.
(4) Represents 456,837 shares of Class A common stock at an average price paid per share of $38.76 and 98,447 shares of Class B common stock at an average price paid per share of $44.45.
The graph assumes that the value of the investment in our common stock, in each index, and in the peer group (including reinvestment of dividends) was $100 on December 31, 2017 and tracks it through December 31, 2022. 12/17 12/18 12/19 12/20 12/21 12/22 Rush Enterprises, Inc. 100.00 71.19 94.80 124.05 174.19 175.28 S&P 500 100.00 95.62 125.72 148.85 191.58 156.89 Peer Group 100.00 85.20 127.99 155.30 177.55 187.26 The stock price performance included in this graph is not necessarily indicative of future stock price performance.
The graph assumes that the value of the investment in our common stock, in each index, and in the peer group (including reinvestment of dividends) was $100 on December 31, 2018, and tracks it through December 31, 2023. 12/18 12/19 12/20 12/21 12/22 12/23 Rush Enterprises, Inc. 100.00 133.16 174.24 244.67 246.21 357.00 S&P 500 100.00 131.49 155.68 200.37 164.08 207.21 Peer Group 100.00 150.22 182.27 208.38 219.78 332.47 The stock price performance included in this graph is not necessarily indicative of future stock price performance.
Added
On August 28, 2023, we effected a three-for-two stock split with respect to both our Class A and Class B common stock in the form of a Stock Dividend. The foregoing stock prices and the following share amounts have been adjusted to give retroactive effect to the stock split for all periods presented.
Added
(5) Represents 315,220 shares of Class A common stock at an average price paid per share of $37.52 and 26,614 shares of Class B common stock at an average price paid per share of $42.57.
Added
(6) Represents 53,566 shares of Class A common stock at an average price paid per share of $41.63 and 1,500,172 shares of Class B common stock at an average price paid per share of $43.56.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

1 edited+0 added−0 removed3 unchanged
Biggest changeYear Ended December 31, 2022 2021 2020 (in thousands, except per share amounts) SUMMARY OF INCOME STATEMENT DATA Revenues New and used commercial vehicle sales $ 4,351,370 $ 3,039,953 $ 2,863,309 Aftermarket products and services sales 2,372,439 1,793,363 1,600,445 Lease and rental 322,257 247,234 236,223 Finance and insurance 29,741 27,964 21,949 Other 25,863 17,628 14,014 Total revenues 7,101,670 5,126,142 4,735,940 Cost of products sold 5,614,511 4,033,844 3,860,473 Gross profit 1,487,159 1,092,298 875,467 Selling, general and administrative 927,836 731,340 665,258 Depreciation and amortization 55,665 53,354 57,456 Gain (loss) on sale of assets 2,455 1,432 1,852 Operating income 506,113 309,036 154,605 Other income 22,338 6,417 6,132 Interest expense, net 19,124 1,770 9,014 Income before income taxes 509,327 313,683 151,723 Provision (benefit) for income taxes 117,242 72,268 36,836 Net Income 392,085 241,415 114,887 Less: Noncontrolling interest 703 − − Net Income attributable to Rush Enterprises $ 391,382 $ 241,415 $ 114,887 Net income per common share: Basic $ 7.06 $ 4.32 $ 2.09 Diluted $ 6.85 $ 4.17 $ 2.04 Cash dividends declared per share $ 0.80 $ 0.74 $ 0.41 Weighted average shares outstanding: Basic 55,400 55,892 54,866 Diluted 57,151 57,878 56,242 Year Ended December 31, 2022 2021 2020 OPERATING DATA Unit vehicle sales − New vehicles 29,842 23,259 23,113 Used vehicles 7,078 7,527 7,400 Total unit vehicles sales 36,920 30,786 30,513 Commercial vehicle lease and rental units 10,326 8,914 8,104 33 Table of Contents Year Ended December 31, 2022 2021 2020 (in thousands) BALANCE SHEET DATA Working capital $ 439,069 $ 320,950 $ 330,932 Inventories 1,429,429 1,020,136 858,291 Total assets 3,821,066 3,119,977 2,985,393 Floor plan notes payable 933,203 630,731 511,786 Long-term debt, including current portion 275,433 334,926 529,654 Finance lease obligations, including current portion 122,692 116,530 117,113 Total shareholders’ equity 1,763,022 1,466,749 1,268,037
Biggest changeYear Ended December 31, 2023 2022 2021 SUMMARY OF INCOME STATEMENT DATA (in thousands, except per share amounts) Revenues New and used commercial vehicle sales $ 4,957,969 $ 4,351,370 $ 3,039,953 Aftermarket products and services sales 2,562,141 2,372,439 1,793,363 Lease and rental 353,780 322,257 247,234 Finance and insurance 24,271 29,741 27,964 Other 26,863 25,863 17,628 Total revenues 7,925,024 7,101,670 5,126,142 Cost of products sold 6,331,934 5,614,511 4,033,844 Gross profit 1,593,090 1,487,159 1,092,298 Selling, general and administrative 1,021,722 927,836 731,340 Depreciation and amortization 59,830 55,665 53,354 Gain (loss) on sale of assets 843 2,455 1,432 Operating income 512,381 506,113 309,036 Other income 2,597 22,338 6,417 Interest expense, net 52,917 19,124 1,770 Income before income taxes 462,061 509,327 313,683 Provision (benefit) for income taxes 114,000 117,242 72,268 Net Income 348,061 392,085 241,415 Less: Noncontrolling interest 1,006 703 − Net Income attributable to Rush Enterprises $ 347,055 $ 391,382 $ 241,415 Net income per common share: Basic $ 4.28 $ 4.71 $ 2.88 Diluted $ 4.15 $ 4.57 $ 2.78 Cash dividends declared per share $ 0.62 $ 0.53 $ 0.49 Weighted average shares outstanding: Basic 81,089 83,100 83,838 Diluted 83,720 85,727 86,817 31 Table of Contents Year Ended December 31, 2023 2022 2021 OPERATING DATA Unit vehicle sales − New vehicles 32,569 29,842 23,259 Used vehicles 7,117 7,078 7,527 Total unit vehicles sales 39,686 36,920 30,786 Commercial vehicle lease and rental units 10,463 10,326 8,914 Year Ended December 31, 2023 2022 2021 (in thousands) BALANCE SHEET DATA Working capital $ 586,994 $ 439,069 $ 320,950 Inventories 1,801,447 1,429,429 1,020,136 Total assets 4,364,241 3,821,066 3,119,977 Floor plan notes payable 1,139,744 933,203 630,731 Long-term debt, including current portion 414,002 275,433 334,926 Finance lease obligations, including current portion 133,736 122,692 116,530 Total shareholders’ equity 1,890,416 1,763,022 1,466,749

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

92 edited+18 added−15 removed47 unchanged
Biggest changeThe following table sets forth for the years indicated certain financial data as a percentage of total revenues: Year Ended December 31, 2022 2021 2020 Revenue New and used commercial vehicle sales 61.3 % 59.3 % 60.5 % Aftermarket Products and Services sales 33.4 35.0 33.8 Lease and rental 4.5 4.8 5.0 Finance and insurance 0.4 0.6 0.4 Other 0.4 0.3 0.3 Total revenues 100.0 100.0 100.0 Cost of products sold 79.1 78.7 81.5 Gross profit 20.9 21.3 18.5 Selling, general and administrative 13.1 14.3 14.0 Depreciation and amortization 0.7 1.0 1.2 Gain (loss) on sale of assets 0.0 0.0 0.0 Operating income 7.1 6.0 3.3 Other income 0.3 0.1 0.1 Interest expense, net 0.2 0.0 0.2 Income from continuing operations before income taxes 7.2 6.1 3.2 Provision (benefit) for income taxes 1.7 1.4 0.8 Net income 5.5 4.7 2.4 Net income attributable to noncontrolling interest 0.0 0.0 0.0 Net income attributable to Rush Enterprises, Inc. 5.5 % 4.7 % 2.4 % The following table sets forth the unit sales and revenue for new heavy-duty, new medium-duty, new light-duty and used commercial vehicles and the absorption ratio for the years indicated (revenue in millions): % Change 2022 2021 2020 2022 vs 2021 2021 vs 2020 Vehicle unit sales: New heavy-duty vehicles 16,778 11,052 10,670 51.8 % 3.6 % New medium-duty vehicles 11,025 10,485 11,311 5.2 % -7.3 % New light-duty vehicles 2,039 1,722 1,132 18.4 % 52.1 % Total new vehicle unit sales 29,842 23,259 23,113 28.3 % 0.6 % Used vehicles sales 7,078 7,527 7,400 -6.0 % 1.7 % Vehicle revenue: New heavy-duty vehicles $ 2,715.3 $ 1,661.9 $ 1,587.9 63.4 % 4.7 % New medium-duty vehicles 959.1 857.1 919.7 11.9 % -6.8 % New light-duty vehicles 104.0 79.4 50.1 31.0 % 58.5 % Total new vehicle revenue $ 3,778.4 $ 2,598.4 $ 2,557.7 45.4 % 1.6 % Used vehicle revenue $ 552.9 $ 430.4 $ 291.5 28.5 % 47.7 % Other vehicle revenue:(1) $ 20.1 $ 11.2 $ 14.1 79.5 % -20.6 % Dealership absorption ratio: 136.6 % 129.8 % 118.7 % 5.2 % 9.4 % (1) Includes sales of truck bodies, trailers and other new equipment. 38 Table of Contents The following table sets forth for the periods indicated the percent of gross profit by revenue source: 2022 2021 2020 Gross Profit: New and used commercial vehicle sales 27.9 % 27.7 % 25.3 % Aftermarket products and services sales 61.7 62.7 66.7 Lease and rental 6.7 5.4 3.9 Finance and insurance 2.0 2.6 2.5 Other 1.7 1.6 1.6 Total gross profit 100.0 % 100.0 % 100.0 % Industry We operate in the commercial vehicle market.
Biggest changeThe following table sets forth for the years indicated certain financial data as a percentage of total revenues: Year Ended December 31, 2023 2022 2021 Revenue New and used commercial vehicle sales 62.6 % 61.3 % 59.3 % Aftermarket Products and Services sales 32.3 33.4 35.0 Lease and rental 4.5 4.5 4.8 Finance and insurance 0.3 0.4 0.6 Other 0.3 0.4 0.3 Total revenues 100.0 100.0 100.0 Cost of products sold 79.9 79.1 78.7 Gross profit 20.1 20.9 21.3 Selling, general and administrative 12.9 13.1 14.3 Depreciation and amortization 0.7 0.7 1.0 Gain (loss) on sale of assets 0.0 0.0 0.0 Operating income 6.5 7.1 6.0 Other income 0.0 0.3 0.1 Interest expense, net 0.7 0.2 0.0 Income from continuing operations before income taxes 5.8 7.2 6.1 Provision for income taxes 1.4 1.7 1.4 Net income 4.4 5.5 4.7 Net income attributable to noncontrolling interest 0.0 0.0 0.0 Net income attributable to Rush Enterprises, Inc. 4.4 % 5.5 % 4.7 % 35 Table of Contents The following table sets forth the unit sales and revenue for new heavy-duty, new medium-duty, new light-duty and used commercial vehicles and the absorption ratio for the years indicated (revenue in millions): % Change 2023 2022 2021 2023 vs 2022 2022 vs 2021 Vehicle unit sales: New heavy-duty vehicles 17,457 16,778 11,052 4.0 % 51.8 % New medium-duty vehicles 13,264 11,025 10,485 20.3 5.2 New light-duty vehicles 1,848 2,039 1,722 (9.4 ) 18.4 Total new vehicle unit sales 32,569 29,842 23,259 9.1 % 28.3 % Used vehicles sales 7,117 7,078 7,527 0.6 % (6.0 )% Vehicle revenue: New heavy-duty vehicles $ 3,083.1 $ 2,715.3 $ 1,661.9 13.5 % 63.4 % New medium-duty vehicles 1,312.0 959.1 857.1 36.8 11.9 New light-duty vehicles 108.8 104.0 79.4 4.6 31.0 Total new vehicle revenue $ 4,503.9 $ 3,778.4 $ 2,598.4 19.2 % 45.4 % Used vehicle revenue $ 414.7 $ 552.9 $ 430.4 (25.0 )% 28.5 % Other vehicle revenue: (1) $ 39.4 $ 20.1 $ 11.2 96.0 % 79.5 % Dealership absorption ratio: 135.3 % 136.6 % 129.8 % (1.0 )% 5.2 % (1) Includes sales of truck bodies, trailers and other new equipment.
Annual SG&A expenses as a percentage of total revenues have ranged from approximately 12.4% to 14.3% over the last five years. In general, when new and used commercial vehicle revenues increase as a percentage of total revenues, SG&A expenses as a percentage of total revenues will be at the lower end of this range.
Annual SG&A expenses as a percentage of total revenues have ranged from approximately 12.4% to 14.4% over the last five years. In general, when new and used commercial vehicle revenues increase as a percentage of total revenues, SG&A expenses as a percentage of total revenues will be at the lower end of this range.
Advances under the PLC Agreement bear interest per annum, payable on the fifth day of the following month, at our option, at either (A) the prime rate, minus 1.55%, provided that the floating rate of interest is subject to a floor of 0%, or (B) a fixed rate, to be determined between us and PLC in each instance of borrowing at a fixed rate.
Advances under the PLC Agreement bear interest per annum, payable on the fifth day of the following month, at our option, at either (A) the prime rate, minus 1.95%, provided that the floating rate of interest is subject to a floor of 0%, or (B) a fixed rate, to be determined between us and PLC in each instance of borrowing at a fixed rate.
The WF Credit Agreement expires on September 14, 2024, although, upon the occurrence and during the continuance of an event of default, the WF Agent has the right to, or upon the request of the required lenders must, terminate the commitments and declare all outstanding principal and interest due and payable. We may terminate the commitments at any time.
The WF Credit Agreement expires on September 14, 2026, although, upon the occurrence and during the continuance of an event of default, the WF Agent has the right to, or upon the request of the required lenders must, terminate the commitments and declare all outstanding principal and interest due and payable. We may terminate the commitments at any time.
We anticipate funding the capital expenditures for the improvement and expansion of existing facilities and recurring expenses through our operating cash flows. We have the ability to fund the construction or purchase of new facilities through our operating cash flows or by financing. We have no other material commitments for capital expenditures as of December 31, 2022.
We anticipate funding the capital expenditures for the improvement and expansion of existing facilities and recurring expenses through our operating cash flows. We have the ability to fund the construction or purchase of new facilities through our operating cash flows or by financing. We have no other material commitments for capital expenditures as of December 31, 2023.
The Truck Segment operates a network of commercial vehicle dealerships primarily under the name “Rush Truck Centers.” Most Rush Truck Centers are a franchised dealer for commercial vehicles manufactured by Peterbilt, International, Hino, Ford, Isuzu, IC Bus or Blue Bird.
The Truck Segment operates a network of commercial vehicle dealerships primarily under the name “Rush Truck Centers.” Most Rush Truck Centers are a franchised dealer for commercial vehicles manufactured by Peterbilt, International, Hino, Ford, Isuzu, Dennis Eagle, IC Bus or Blue Bird.
As of December 31, 2022, we were in compliance with all debt covenants related to debt secured by lease and rental units, our floor plan credit agreements and the WF Credit Agreement. We do not anticipate any breach of the covenants in the foreseeable future.
As of December 31, 2023, we were in compliance with all debt covenants related to debt secured by lease and rental units, our floor plan credit agreements and the WF Credit Agreement. We do not anticipate any breach of the covenants in the foreseeable future.
Pursuant to the terms of the WF Credit Agreement, the WF Lenders have agreed to make up to $175.0 million of revolving credit loans for certain of our capital expenditures, including commercial vehicle purchases for our Idealease leasing and rental fleet, and general working capital needs.
Pursuant to the terms of the WF Credit Agreement (as amended), the WF Lenders have agreed to make up to $175.0 million of revolving credit loans for certain of our capital expenditures, including commercial vehicle purchases for our Idealease leasing and rental fleet, and general working capital needs.
We periodically review the estimated useful lives and fair values of our identifiable intangible assets, taking into consideration any events or circumstances that might result in a diminished fair value or revised useful life. 36 Table of Contents The excess purchase price over the fair value of assets acquired is recorded as goodwill.
We periodically review the estimated useful lives and fair values of our identifiable intangible assets, taking into consideration any events or circumstances that might result in a diminished fair value or revised useful life. The excess purchase price over the fair value of assets acquired is recorded as goodwill.
We believe we will have sufficient liquidity to meet our debt service and working capital requirements, commitments and contingencies, debt repayments, acquisitions, capital expenditures and any operating requirements for at least the next twelve months. We have a line of credit that provides for a maximum borrowing of $20.0 million.
We believe we will have sufficient liquidity to meet our debt service and working capital requirements, commitments and contingencies, debt repayments, acquisitions, capital expenditures and any operating requirements for at least the next twelve months. 39 Table of Contents We have a line of credit that provides for a maximum borrowing of $20.0 million.
Through geographic expansion, concentration on higher margin Aftermarket Products and Services and diversification of our customer base, we have attempted to reduce the negative impact of adverse general economic conditions or cyclical trends affecting the Class 8 commercial vehicle industry on our earnings. 45 Table of Contents
Through geographic expansion, concentration on higher margin Aftermarket Products and Services and diversification of our customer base, we have attempted to reduce the negative impact of adverse general economic conditions or cyclical trends affecting the Class 8 commercial vehicle industry on our earnings.
Year Ended December 31, 2021 Compared to Year Ended December 31, 2020 For a discussion of information on the year ended December 31, 2021, refer to Part II Item 7 in the 2021 Annual Report on Form 10-K.
Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 For a discussion of information on the year ended December 31, 2022, refer to Part II Item 7 in the 2022 Annual Report on Form 10-K.
In connection with the adoption of the new stock repurchase plan, we terminated the prior stock repurchase plan, which was scheduled to expire on December 31, 2022.
In connection with the adoption of the new stock repurchase plan, we terminated the prior stock repurchase plan, which was scheduled to expire on December 31, 2023.
Research currently forecasts sales of new Class 8 trucks in the U.S. to be approximately 212,000 in 2024. Medium-Duty Truck Market Many of our Rush Truck Centers sell medium-duty commercial vehicles manufactured by Peterbilt, International, Hino, Ford or Isuzu, and provide parts and service for medium-duty commercial vehicles.
Research currently forecasts sales of new Class 8 trucks in the U.S. to be approximately 249,000 in 2025. Medium-Duty Truck Market Many of our Rush Truck Centers sell medium-duty commercial vehicles manufactured by Peterbilt, International, Hino, Ford or Isuzu, and provide parts and service for medium-duty commercial vehicles.
We utilize our excess cash on hand to pay down our outstanding borrowings under the Floor Plan Credit Agreement, and the resulting interest earned is recognized as an offset to our gross interest expense under the Floor Plan Credit Agreement. On May 31, 2022, RTC Canada entered into the RTC Canada Revolving Credit Agreement with BMO.
We utilize our excess cash on hand to pay down our outstanding borrowings under the Floor Plan Credit Agreement, and the resulting interest earned is recognized as an offset to our gross interest expense under the Floor Plan Credit Agreement. 42 Table of Contents On May 31, 2022, RTC Canada entered into the RTC Canada Revolving Credit Agreement with BMO.
Our long-term debt, floor plan financing agreements and the WF Credit Agreement require us to satisfy various financial ratios such as the leverage ratio, the asset coverage ratio and the fixed charge coverage ratio.
Our floor plan financing agreements and the WF Credit Agreement require us to satisfy various financial ratios such as the leverage ratio, the asset coverage ratio and the fixed charge coverage ratio.
On December 2, 2022, we announced that our Board of Directors approved a new stock repurchase program authorizing management to repurchase, from time to time, up to an aggregate of $150.0 million of our shares of Class A common stock and/or Class B common stock.
On December 5, 2023, we announced that our Board of Directors approved a new stock repurchase program authorizing management to repurchase, from time to time, up to an aggregate of $150.0 million of our shares of Class A common stock and/or Class B common stock.
The Floor Plan Credit Agreement expires September 14, 2026, although BMO Harris has the right to terminate at any time upon 360 days written notice and we may terminate at any time, subject to specified limited exceptions. On December 31, 2022, we had approximately $762.9 million outstanding under the Floor Plan Credit Agreement.
The Floor Plan Credit Agreement expires September 14, 2026, although BMO Harris has the right to terminate at any time upon 360 days written notice and we may terminate at any time, subject to specified limited exceptions. On December 31, 2023, we had approximately $984.4 million outstanding under the Floor Plan Credit Agreement.
When 100% absorption is achieved, all of the gross profit from the sale of a commercial vehicle, after sales commissions and inventory carrying costs, directly impacts operating profit. Our commercial vehicle dealerships achieved a 136.6% absorption ratio for the year ended December 31, 2022 and 129.8% absorption ratio for the year ended December 31, 2021.
When 100% absorption is achieved, all of the gross profit from the sale of a commercial vehicle, after sales commissions and inventory carrying costs, directly impacts operating profit. Our commercial vehicle dealerships achieved a 135.3% absorption ratio for the year ended December 31, 2023, and 136.6% absorption ratio for the year ended December 31, 2022.
We provided for taxes at a 23.0% effective rate in 2022 and 2021. We expect our effective tax rate to be approximately 23.0% to 24.0% of pretax income in 2023.
We provided for taxes at a 24.7% effective rate in 2023 and 23.0% in 2022. We expect our effective tax rate to be approximately 24.0% to 25.0% of pretax income in 2024.
Advances under the RTC Canada Revolving Credit Agreement bear interest per annum, payable on the first business day of each calendar month, at CDOR, plus 1.35%. The RTC Canada Revolving Credit Agreement expires September 14, 2026. On December 31, 2022, we had approximately $49.9 million outstanding under the RTC Canada Revolving Credit Agreement.
Advances under the RTC Canada Revolving Credit Agreement bear interest per annum, payable on the first business day of each calendar month, at CDOR, plus 1.35%. The RTC Canada Revolving Credit Agreement expires September 14, 2026. On December 31, 2023, we had approximately $64.7 million CAD outstanding under the RTC Canada Revolving Credit Agreement.
Cash Flows from Financing Activities Cash flows used in financing activities include borrowings and repayments of long-term debt and net payments of floor plan notes payable. During 2022, our financing activities resulted in net cash used in financing of $0.7 million.
Cash Flows from Financing Activities Cash flows used in financing activities include borrowings and repayments of long-term debt and net payments of floor plan notes payable. During 2023, our financing activities resulted in net cash received in financing of $74.0 million.
As of December 31, 2022, we had working capital of approximately $439.1 million, including $201.0 million in cash, available to fund our operations. We believe that these funds, together with expected cash flows from operations, are sufficient to meet our operating requirements for at least the next twelve months.
As of December 31, 2023, we had working capital of approximately $587.0 million, including $183.7 million in cash, available to fund our operations. We believe that these funds, together with expected cash flows from operations, are sufficient to meet our operating requirements for at least the next twelve months.
As of December 31, 2022, we had repurchased $5.8 million of our shares of common stock under the current stock repurchase program. The current stock repurchase program expires on December 31, 2023, and may be suspended or discontinued at any time.
As of December 31, 2023, we had repurchased $65.3 million of our shares of common stock under the current stock repurchase program. The current stock repurchase program expires on December 31, 2024, and may be suspended or discontinued at any time.
There were no advances outstanding under this secured line of credit at December 31, 2022, however, $14.1 million was pledged to secure various letters of credit related to self-insurance products, leaving $5.9 million available for future borrowings as of December 31, 2022.
There were no advances outstanding under this secured line of credit as of December 31, 2023, however, $17.9 million was pledged to secure various letters of credit related to self-insurance products, leaving $2.1 million available for future borrowings as of December 31, 2023.
During 2021, cash used in investing activities totaled $432.9 million. Cash flows used in investing activities consist primarily of cash used for capital expenditures and business acquisitions. Cash used for business acquisitions was $269.3 million during the year ended December 31, 2021. See Note 15 of the Notes to Consolidated Financial Statements for a detailed discussion of the business acquisitions.
During 2022, cash used in investing activities totaled $240.9 million. Cash flows used in investing activities consist primarily of cash used for capital expenditures and business acquisitions. Cash used for business acquisitions was $20.8 million during the year ended December 31, 2022. See Note 15 of the Notes to Consolidated Financial Statements for a detailed discussion of the business acquisitions.
Advances under the RTC Canada Floor Plan Agreement bear interest per annum, payable on the first business day of each calendar month, at CDOR, plus 0.90% and in the case of an advance required to be made in USD dollars, at LIBOR, plus 1.10%. The RTC Canada Floor Plan Agreement expires September 14, 2026.
Prior to June 1, 2023, advances under the RTC Canada Floor Plan Agreement bore interest per annum, payable on the first business day of each calendar month, at CDOR, plus 0.90% and in the case of an advance required to be made in USD dollars, at LIBOR, plus 1.10%.
See Note 15 of the Notes to Consolidated Financial Statements for a detailed discussion of the business acquisitions. Capital expenditures totaled $243.1 million during 2022 and consisted primarily of purchases of property and equipment, improvements to our existing dealership facilities and $168.5 million for purchases of rental and lease vehicles for the rental and leasing operations.
See Note 15 of the Notes to Consolidated Financial Statements for a detailed discussion of the business acquisitions. Capital expenditures totaled $368.9 million during 2023 and consisted primarily of purchases of property and equipment, improvements to our existing dealership facilities and $263.9 million for purchases of rental and lease vehicles for the rental and leasing operations.
Cash used in operating activities included an aggregate of $304.5 million net change in operating assets and liabilities.
Cash used in operating activities included an aggregate of $310.6 million net change in operating assets and liabilities.
For 2023, we expect overall gross margins from new medium-duty commercial vehicle sales of approximately 7.5% to 8.5%, but this will largely depend upon the mix of purchasers and types of vehicles sold. Gross margins on used commercial vehicle sales decreased to 9.9% in 2022, from 18.7% in 2021.
For 2024, we expect overall gross margins from new medium-duty commercial vehicle sales of approximately 8.0% to 9.0%, but this will largely depend upon the mix of purchasers and types of vehicles sold. Gross margins on used commercial vehicle sales increased to 12.4% in 2023, from 9.9% in 2022.
We expect net interest expense in 2023 to increase due to interest related to lease and rental borrowings and floor plan debt, but the amount of the increase will depend on inventory levels, interest rate fluctuations and the amount of cash available to make prepayments on our floor plan arrangements.
We expect net interest expense in 2024, compared to 2023, to increase due to interest related to our working capital lines of credit and floor plan debt, but the amount of the increase will depend on inventory levels, interest rate fluctuations and the amount of cash available to make prepayments on our floor plan arrangements.
This decrease in gross profit as a percentage of sales was a result of a change in our product sales mix. Commercial vehicle sales, a lower margin revenue item, increased as a percentage of total revenues to 61.3% in 2022, from 59.3% in 2021.
Gross profit as a percentage of sales decreased to 20.1% in 2023, from 20.9% in 2022. This decrease in gross profit as a percentage of sales was a result of a change in our product sales mix. Commercial vehicle sales, a lower margin revenue item, increased as a percentage of total revenues to 62.6% in 2023, from 61.3% in 2022.
In 2023, we expect overall gross margins from new heavy-duty truck sales of approximately 8.8% to 9.9%. Gross margins on new Class 4 through 7 commercial vehicle sales increased to 8.1% in 2022, from 7.8% in 2021. This increase was primarily due to the mix of purchasers during 2022.
Gross margins on new Class 4 through 7 commercial vehicle sales increased to 9.0% in 2023, from 8.1% in 2022. This increase was primarily due to the mix of purchasers during 2023.
We believe our one-stop center concept and the size and geographic diversity of our dealership network gives us a competitive advantage in providing these services. A.C.T. Research currently estimates approximately 255,155 new Class 8 trucks will be sold in the United States in 2023, compared to approximately 259,220 new Class 8 trucks sold in 2022. A.C.T.
We believe our one-stop center concept and the size and geographic diversity of our dealership network gives us a competitive advantage in providing these services. 36 Table of Contents A.C.T. Research currently estimates approximately 214,300 new Class 8 trucks will be sold in the United States in 2024, compared to approximately 271,607 new Class 8 trucks sold in 2023. A.C.T.
Borrowings under the Floor Plan Credit Agreement bear interest at an annual rate equal to (A) the greater of (i) zero and (ii) one month LIBOR rate, determined on the last day of the prior month, plus (B) 1.10% and are payable monthly.
The Floor Plan Credit Agreement includes an aggregate loan commitment of $1.0 billion. Prior to June 1, 2023, borrowings under the Floor Plan Credit Agreement bore interest at an annual rate equal to (A) the greater of (i) zero and (ii) one month LIBOR, determined on the last day of the prior month, plus (B) 1.10% and were payable monthly.
The majority of commercial vehicle inventory is financed through our floor plan credit agreements. 43 Table of Contents During 2021, operating activities resulted in net cash provided by operations of $422.3 million.
The majority of commercial vehicle inventory is financed through our floor plan credit agreements. During 2022, operating activities resulted in net cash provided by operations of $294.4 million.
Accordingly, the facts and financial circumstances impacting deferred income tax assets are reviewed quarterly and management’s judgment is applied to determine the amount of valuation allowance required, if any, in any given period. Our income tax returns are periodically audited by tax authorities. These audits include questions regarding our tax filing positions, including the timing and amount of deductions.
Accordingly, the facts and financial circumstances impacting deferred income tax assets are reviewed quarterly and management’s judgment is applied to determine the amount of valuation allowance required, if any, in any given period. 34 Table of Contents Our income tax returns are periodically audited by tax authorities.
We may borrow, repay and reborrow amounts pursuant to the PLC Agreement from time to time until the maturity date, provided, however, that the outstanding principal amount on any date shall not exceed the borrowing base.
We may borrow, repay and reborrow amounts pursuant to the PLC Agreement from time to time until the maturity date, provided, however, that the outstanding principal amount on any date shall not exceed the borrowing base. In addition, we must maintain a minimum balance of $190.0 million.
On October 12, 2020, we distributed one additional share of stock for every two shares of Class A common stock, par value $0.01 per share, and Class B common stock, par value $0.01 per share, held by shareholders of record as of September 28, 2020.
On August 28, 2023, the Company distributed one additional share of stock for every two shares of Class A common stock, par value $0.01 per share, and Class B common stock, par value $0.01 per share, held by shareholders of record as of August 7, 2023.
We expect our U.S. market share of new Class 8 truck sales to range between 6.0% and 6.5% in 2023. This market share percentage would result in the sale of approximately 15,300 to 16,500 new Class 8 trucks in 2023. We expect to sell approximately 1,000 additional new Class 8 trucks in Canada in 2023. According to A.C.T.
We expect our U.S. market share of new Class 8 truck sales to range between 6.3% and 6.8% in 2024. This market share percentage would result in the sale of approximately 13,500 to 14,500 new Class 8 trucks in 2024. We expect to sell approximately 650 additional new Class 8 trucks in Canada in 2024. According to A.C.T.
Net cash provided by operating activities primarily consisted of $241.4 million in net income, as well as non-cash adjustments related to depreciation and amortization of $169.5 million, deferred income tax of $13.7 million and stock-based compensation of $22.2 million. Cash used in operating activities included an aggregate of $17.4 million net change in operating assets and liabilities.
Net cash provided by operating activities primarily consisted of $392.1 million in net income, as well as non-cash adjustments related to depreciation and amortization of $199.1 million, deferred income tax of $4.3 million and stock-based compensation of $25.3 million. Cash used in operating activities included an aggregate of $304.5 million net change in operating assets and liabilities.
Gross profits from parts sales represented 62.8% of total gross profit for Aftermarket Products and Services operations in 2022 and 61.4% in 2021. Service and collision center operations represented 37.2% of total gross profit for Aftermarket Products and Services operations in 2022 and 38.6% 2021.
Gross profits from parts sales represented 59.5% of total gross profit for Aftermarket Products and Services operations in 2023 and 62.8% in 2022. Service and collision center operations represented 40.5% of total gross profit for Aftermarket Products and Services operations in 2023 and 37.2% 2022.
Research Co., LLC (“A.C.T. Research”), a commercial vehicle industry data and forecasting service provider, new U. S. Class 8 truck retail sales are estimated to total 255,155 truck units in 2023, a 7.8% decrease compared to 259,220 units sold in 2022.
Research Co., LLC (“A.C.T. Research”), a commercial vehicle industry data and forecasting service provider, new U. S. Class 8 truck retail sales are estimated to total 214,300 truck units in 2024, a 21.1% decrease compared to 271,607 units sold in 2023.
Cash Flows from Investing Activities During 2022, cash used in investing activities totaled $240.9 million. Cash flows used in investing activities consist primarily of cash used for capital expenditures and business acquisitions. Cash used for business acquisitions was $20.8 million during the year ended December 31, 2022.
Cash Flows from Investing Activities During 2023, cash used in investing activities totaled $387.0 million. Cash flows used in investing activities consist primarily of cash used for capital expenditures and business acquisitions. Cash used for business acquisitions was $16.1 million during the year ended December 31,2023.
Capital expenditures totaled $167.2 million during 2021 and consisted primarily of purchases of property and equipment, improvements to our existing dealership facilities and $164.6 million for purchases of rental and lease vehicles for the rental and leasing operations.
Capital expenditures totaled $243.1 million during 2022 and consisted primarily of purchases of property and equipment, improvements to our existing dealership facilities and $168.5 million for purchases of rental and lease vehicles for the rental and leasing operations.
Aftermarket Products and Services accounted for 61.7% of our total gross profits in 2022. Stock Split On September 15, 2020, our Board of Directors declared a 3-for-2 stock split of our Class A common stock and Class B common stock, which was effected in the form of a stock dividend.
Aftermarket Products and Services accounted for 59.5% of our total gross profits in 2023. Stock Split On July 25, 2023, the Board of Directors of the Company declared a 3-for-2 stock split of the Company’s Class A common stock and Class B common stock, which was effected in the form of a stock dividend.
For 2023, we expect SG&A expenses as a percentage of total revenues to range from 13.0% to 14.0%. For 2023, we expect the selling portion of SG&A expenses to be approximately 25.0% to 30.0% of new and used commercial vehicle gross profit.
For 2024, we expect SG&A expenses as a percentage of total revenues to range from 13.0% to 14.0%. For 2024, we expect the selling portion of SG&A expenses to be approximately 25.0% to 30.0% of new and used commercial vehicle gross profit. Depreciation and Amortization Expense Depreciation and amortization expense increased $4.2 million, or 7.5%, in 2023, compared to 2022.
These cash outflows were partially offset by $273.9 million from net draws on floor plan notes payable (non-trade), borrowings of $958.3 million of long-term debt and $13.3 million from the issuance of shares related to equity compensation plans. During 2021, our financing activities resulted in net cash used in financing of $153.3 million.
These cash outflows were partially offset by $205.5 million from net draws on floor plan notes payable (non-trade), borrowings of $1,429.1 million of long-term debt and $18.1 million from the issuance of shares related to equity compensation plans. 41 Table of Contents During 2022, our financing activities resulted in net cash used in financing of $0.7 million.
This market share percentage would result in the sale of approximately 10,750 to 11,900 new Class 4 through 7 commercial vehicles in 2023. We expect to sell approximately 250 additional new Class 5 through 7 commercial vehicles in Canada in 2023.
This market share percentage would result in the sale of approximately 12,200 to 13,400 new Class 4 through 7 commercial vehicles in 2024. We expect to sell approximately 350 additional new Class 5 through 7 commercial vehicles in Canada in 2024.
Aftermarket Services revenues, a higher margin revenue item, decreased as a percentage of total revenues to 33.4% in 2022, from 35.0% in 2021. 40 Table of Contents Gross margins from our Aftermarket Products and Services operations increased to 38.6% in 2022, from 38.1% in 2021.
Aftermarket Products and Services revenues, a higher margin revenue item, decreased as a percentage of total revenues to 32.3% in 2023, from 33.4% in 2022. Gross margins from our Aftermarket Products and Services operations decreased to 37.2% in 2023, from 38.6% in 2022.
We sold 16,778 new heavy-duty trucks in 2022, a 51.8% increase compared to 11,052 new heavy-duty trucks in 2021. Our share of the new U.S. Class 8 commercial vehicle sales market increased to approximately 6.3% in 2022, from 4.9% in 2021.
We sold 17,457 new Class 8 trucks in 2023, a 4.0% increase compared to 16,778 new heavy-duty trucks in 2022. Our share of the new U.S. Class 8 commercial vehicle sales market decreased to approximately 6.2% in 2023, from 6.3% in 2022. Our share of the new Canada Class 8 truck market was approximately 2.0% in 2023.
During 2022, operating activities resulted in net cash provided by operations of $294.4 million. Net cash provided by operating activities primarily consisted of $392.1 million in net income, as well as non-cash adjustments related to depreciation and amortization of $199.1 million, deferred income tax of $4.3 million and stock-based compensation of $25.3 million.
During 2023, operating activities resulted in net cash provided by operations of $295.7 million. Net cash provided by operating activities primarily consisted of $348.1 million in net income, as well as non-cash adjustments related to depreciation and amortization of $221.1 million, provision for deferred income tax of $7.6 million and stock-based compensation of $30.4 million.
Research, new U. S. Class 4 through 7 commercial vehicle retail sales are estimated to total 253,600 units in 2023, an 8.5% increase compared to 233,679 units sold in 2022. We expect our U.S. market share of new Class 4 through 7 commercial vehicle sales to range between 4.2% and 4.7% in 2023.
Research, new U. S. Class 4 through 7 commercial vehicle retail sales are estimated to total 254,250 units in 2024, a 0.6% increase compared to 252,649 units sold in 2023. We expect our U.S. market share of new Class 4 through 7 commercial vehicle sales to range between 4.8% and 5.3% in 2024.
This increase in interest expense is a result of the increase in inventory levels and rising interest rates on our variable rate debt compared to 2021.
Interest Expense, Net Net interest expense increased $33.8 million, or 176.7%, in 2023, compared to 2022. This increase in interest expense is a result of the increase in inventory levels and rising interest rates on our variable rate debt compared to 2022.
Research currently forecasts sales of new Class 4 through 7 commercial vehicles in the U.S. to be approximately 253,600 units in 2023, compared to 233,679 units in 2022. A.C.T.
Research currently forecasts sales of new Class 4 through 7 commercial vehicles in the U.S. to be approximately 254,250 units in 2024, compared to 252,649 units in 2023. A.C.T. Research currently forecasts sales of new Class 4 through 7 commercial vehicles in the U.S. to be approximately 268,750 in 2025.
We also expect to make capital expenditures for the purchase of recurring items such as computers, shop tools and equipment and company vehicles of approximately $35.0 million to $40.0 million during 2023.
We expect to purchase or lease commercial vehicles worth approximately $200.0 million to $225.0 million for our leasing operations during 2024, depending on customer demand. We also expect to make capital expenditures for the purchase of recurring items such as computers, shop tools and equipment and company vehicles of approximately $35.0 million to $40.0 million during 2024.
The average daily outstanding borrowings under the Floor Plan Credit Agreement were $638.6 million during the year ended December 31, 2022.
The average daily outstanding borrowings under the Floor Plan Credit Agreement were $870.1 million during the twelve months ended December 31, 2023.
Included in the net change in operating assets and liabilities were cash inflows of $32.3 million from a decrease in accounts receivable, $12.1 million from the increase in accounts payable and $3.0 million from the increase in customer deposits, which were offset by cash outflows of $33.6 million from an increase in inventory and $31.0 million from the decrease in accrued liabilities.
Included in the net change in operating assets and liabilities were primarily the result of $28.8 million from the decrease in customer deposits and $7.2 million from the decrease in accrued liabilities which were offset primarily by cash outflows of $38.3 million from an increase in accounts receivable, $10.6 million from the decrease in accounts payable and $297.7 million from an increase in inventory.
We expect margins on used commercial vehicles to return to our historical range of between 8.0% and 10.0% in 2023. Gross margins from commercial vehicle lease and rental sales increased to 31.2% in 2022, from 23.9% in 2021.
This increase was primarily due to the strategic inventory management of our used commercial vehicle inventory. We expect margins on used commercial vehicles to range between 8.0% and 10.0% in 2024. Gross margins from commercial vehicle lease and rental sales decreased to 29.9% in 2023, from 31.2% in 2022.
Additionally, on February 14, 2023, our Board of Directors declared a cash dividend of $0.21 per share of Class A and Class B common stock, to be paid on March 16, 2023, to all shareholders of record as of February 27, 2023. The total dividend disbursement is estimated to be approximately $11.4 million.
During the fourth quarter of 2023, we paid a cash dividend of $13.5 million. Additionally, on February 13, 2024, our Board of Directors declared a cash dividend of $0.17 per share of Class A and Class B common stock, to be paid on March 18, 2024, to all shareholders of record as of February 27, 2024.
These cash outflows were partially offset by $118.9 million from net draws on floor plan notes payable (non-trade), borrowings of $260.3 million of long-term debt related to the lease and rental fleet and $10.9 million from the issuance of shares related to equity compensation plans.
These cash outflows were partially offset by $273.9 million from net draws on floor plan notes payable (non-trade), borrowings of $958.3 million of long-term debt and $13.3 million from the issuance of shares related to equity compensation plans. On September 14, 2021, we entered into the WF Credit Agreement with the WF lenders and the WF Agent.
We expect to sell approximately 1,800 to 2,000 light-duty vehicles and approximately 7,000 to 7,200 used commercial vehicles in 2023. We expect lease and rental revenue to increase 9% to 11% during 2023, compared to 2022.
We expect to sell approximately 1,800 to 2,000 light-duty vehicles and approximately 6,500 to 7,500 used commercial vehicles in 2024. We expect lease and rental revenue to increase approximately 3% during 2024, compared to 2023. We believe our Aftermarket Products and Services revenues will increase 1% to 5% in 2024, compared to 2023.
We sold 11,025 new medium-duty commercial vehicles, including 1,237 buses, in 2022, a 5.2% increase compared to 10,485 new medium-duty commercial vehicles, including 959 buses, in 2021. In 2022, we achieved a 4.6% share of the Class 4 through 7 commercial vehicle market in the U.S., compared to 4.2% in 2021.
In 2023, we achieved a 5.1% share of the Class 4 through 7 commercial vehicle market in the U.S., compared to 4.6% in 2022. Our share of the Canada medium-duty commercial vehicles market was approximately 2.9% in 2023.
Income before Income Taxes Income before income taxes increased $195.6 million, or 62.4%, in 2022, compared to 2021, as a result of the factors described above. Income Taxes Income tax expense increased $45.0 million, or 62.2%, in 2022, compared to 2021, as a result of the factors described above.
Income before Income Taxes Income before income taxes decreased $47.3 million, or 9.3%, in 2023, compared to 2022, as a result of the factors described above. Income Taxes Income tax expense decreased $3.2 million, or 2.8%, in 2023, compared to 2022, as a result of the factors described above.
Unit sales of new commercial vehicles have historically been subject to substantial cyclical variation based on these general economic conditions. According to data published by A.C.T. Research, total U.S. retail sales of new Class 8 commercial vehicles have ranged from a low of approximately 187,600 in 2013, to a high of approximately 281,440 in 2019.
Research, total U.S. retail sales of new Class 8 commercial vehicles have ranged from a low of approximately 187,600 in 2013, to a high of approximately 281,440 in 2019.
Cash Flows The following table summarizes our cash flows for the periods indicated (in thousands): Year Ended December 31, 2022 2021 2020 Net cash provided by (used in): Operating activities $ 294,400 $ 422,346 $ 762,982 Investing activities (240,930 ) (432,905 ) (127,457 ) Financing activities (690 ) (153,343 ) (505,097 ) Effect of exchange rate changes on cash 118 − − Net increase (decrease) in cash $ 52,898 $ (163,902 ) $ 130,428 Cash Flows from Operating Activities Cash flows from operating activities include net income adjusted for non-cash items and the effects of changes in working capital.
However, we will continue to purchase vehicles for our lease and rental operations and authorize capital expenditures for the improvement or expansion of our existing dealership facilities and construction or purchase of new facilities based on market opportunities. 40 Table of Contents Cash Flows The following table summarizes our cash flows for the periods indicated (in thousands): Year Ended December 31, 2023 2022 2021 Net cash provided by (used in): Operating activities $ 295,713 $ 294,400 $ 422,346 Investing activities (387,030 ) (240,930 ) (432,905 ) Financing activities 73,962 (690 ) (153,343 ) Effect of exchange rate changes on cash 36 118 − Net (decrease) increase in cash $ (17,319 ) $ 52,898 $ (163,902 ) Cash Flows from Operating Activities Cash flows from operating activities include net income adjusted for non-cash items and the effects of changes in working capital.
Selling, General and Administrative Expenses SG&A expenses increased $196.5 million, or 26.9%, in 2022, compared to 2021. This increase primarily resulted from increased general and administrative expense associated with the Summit acquisition and consolidation of RTC Canada into our operating results. SG&A expenses as a percentage of total revenues decreased to 13.1% in 2022, from 14.3% in 2021.
This increase primarily resulted from increased personnel expense, increased selling expense and the consolidation of RTC Canada into our operating results for twelve months in 2023. SG&A expenses as a percentage of total revenues decreased to 12.9% in 2023, from 13.0% in 2022.
On December 31, 2022, we had approximately $40.5 million outstanding under the WF Credit Agreement. 44 Table of Contents On October 1, 2021, we entered into the PLC Agreement.
On December 31, 2023, we had approximately $100.2 million outstanding under the WF Credit Agreement. On November 1, 2023, we entered into the PLC Agreement.
We expect gross margins from lease and rental sales of approximately 28.0% to 31.0% during 2023. Our policy is to depreciate our lease and rental fleet using a straight-line method over each customer’s contractual lease term. The lease unit is depreciated to a residual value that approximates fair value at the expiration of the lease term.
This decrease is primarily related to a decrease in rental utilization rates and increased maintenance costs for the lease and rental fleet. We expect gross margins from lease and rental sales of approximately 29.0% to 31.0% during 2024. Our policy is to depreciate our lease and rental fleet using a straight-line method over each customer’s contractual lease term.
In addition, we continue to monitor inflation and rising interest rates, which may negatively impact consumer spending and capital expenditures across a variety of industries we support. Key Performance Indicator Absorption Ratio. Management uses several performance metrics to evaluate the performance of our commercial vehicle dealerships and considers Rush Truck Centers’ “absorption ratio” to be of critical importance.
In addition, we continue to monitor inflation, interest rates and freight rates, which may negatively impact consumer spending and capital expenditures across a variety of industries we support. 33 Table of Contents Key Performance Indicator Absorption Ratio.
This policy results in us realizing reasonable gross margins while the unit is in service and a corresponding gain or loss on sale when the unit is sold at the end of the lease term. Finance and insurance revenues and other revenues, as described above, have limited direct costs and, therefore, contribute a disproportionate share of gross profit.
The lease unit is depreciated to a residual value that approximates fair value at the expiration of the lease term. This policy results in us realizing reasonable gross margins while the unit is in service and a corresponding gain or loss on sale when the unit is sold at the end of the lease term.
Our revenues from sales of new and used commercial vehicles increased $1,311.4 million, or 43.1%, in 2022, compared to 2021. The increase in commercial vehicle revenues was primarily a result of strong demand, the Summit acquisition and the consolidation of RTC Canada into our operating results.
Our revenues from sales of new and used commercial vehicles increased $606.6 million, or 13.9%, in 2023, compared to 2022. The increase in new commercial vehicle revenues was primarily a result of strong demand and increased production of commercial vehicles from the manufacturers we represent.
Gross profit as a percentage of sales decreased to 20.9% in 2022, from 21.3% in 2021. ● Our new Class 8 heavy-duty unit sales increased 51.8%, compared to 2021, which accounted for 6.3% of the total U.S. market and 1.8% of the total Canadian market. ● Our new Class 4-7 medium-duty unit sales increased 5.2%, compared to 2021, including buses, which accounted for 4.6% of the total U.S. market and 2.2% of the total Canadian market. ● New light-duty truck unit sales increased 18.4% in 2022, compared to 2021. ● Used truck unit sales decreased 6.0%, compared to 2021, however, used truck revenues increased 28.5%, compared to 2021 due to a sharp increase in used truck values in the first half of 2022. ● Aftermarket Products and Services revenues increased $579.1 million, or 32.3%, to $2,372.4 million, compared to $1,793.4 million in 2021. ● Lease and rental revenues increased $75.0 million, or 30.3%, to $322.3 million, compared to 2021. ● Selling, General and Administrative (“SG&A”) expenses increased $196.5 million, or 26.9%, to $927.8 million, compared to $731.3 million in 2021. ● On May 2, 2022, we completed the acquisition of an additional 30% equity interest in RTC Canada, resulting in us now owning an 80% controlling interest in RTC Canada.
Gross profit as a percentage of sales decreased to 20.1% in 2023, from 20.9% in 2022. 32 Table of Contents ● Our new Class 8 heavy-duty unit sales increased 4.0%, compared to 2022, which accounted for 6.2% of the total U.S. market and 2.0% of the total Canadian market. ● Our new Class 4 through 7 medium-duty unit sales increased 20.3%, compared to 2022, including buses, which accounted for 5.1% of the total U.S. market and 2.9% of the total Canadian market. ● New light-duty truck unit sales decreased 9.4% in 2023, compared to 2022. ● Used truck unit sales increased 0.6% in 2023, compared to 2022. ● Aftermarket Products and Services revenues increased $189.7 million, or 8.0% to $2,562.1 million, compared to $2,372.4 million in 2022. ● Lease and rental revenues increased $31.5 million, or 9.8%, to $353.8 million, compared to 2022. ● Selling, General and Administrative (“SG&A”) expenses increased $93.9 million, or 10.1%, to $1,021.7 million, compared to $927.8 million in 2022. ● Net interest expense increased $33.8 million, or 176.7%, in 2023, compared to 2022. 2024 Outlook According to A.C.T.
A favorable tax settlement would be recognized as a reduction in our effective income tax rate in the period of resolution.
A favorable tax settlement would be recognized as a reduction in our effective income tax rate in the period of resolution. Our income tax expense includes the impact of reserve provisions and changes to reserves that we consider appropriate, as well as related interest.
We expect blended gross margins on Aftermarket Products and Services operations to range from 37.5% to 38.5% in 2023. Gross margins on new Class 8 truck sales increased to 9.9% in 2022, from 9.0% in 2021. This increase was primarily due to strong demand for new Class 8 trucks and the mix of purchasers during 2022.
We expect blended gross margins on Aftermarket Products and Services operations to range from 36.0% to 38.0% in 2024. Gross margins on new Class 8 truck sales decreased to 9.7% in 2023, from 9.9% in 2022. In 2024, we expect overall gross margins from new heavy-duty truck sales of approximately 8.5% to 9.5%.
Our new Class 4 through 7 commercial vehicle sales increased due to strong demand for new commercial vehicles, the Summit acquisition and the consolidation of RTC Canada into our operating results. We sold 2,039 new light-duty vehicles in 2022, an 18.4% increase compared to 1,722 new light-duty vehicles in 2021.
The increase in our Class 4 through 7 commercial vehicle sales in 2023 was primarily a result of strong demand and increased production of commercial vehicles from the manufacturers we represent. We sold 1,848 new light-duty vehicles in 2023, a 9.4% decrease compared to 2,039 new light-duty vehicles in 2022.
Loans under the Floor Plan Credit Agreement for the purchase of used inventory are limited to $150.0 million and loans for working capital purposes are limited to $200.0 million.
Effective June 1, 2023, borrowings under the Floor Plan Credit Agreement bear interest per annum, payable monthly, at (A) the greater of (i) zero and (ii) Term SOFR, plus (B) 1.20%. Borrowings under the Floor Plan Credit Agreement for the purchase of used inventory are limited to $150.0 million and loans for working capital purposes are limited to $200.0 million.
Other revenues increased $8.2 million, or 46.7% in 2022, compared to 2021. Other revenues consist primarily of document fees related to commercial vehicle sales. Gross Profit Gross profit increased $394.9 million, or 36.1%, in 2022, compared to 2021. Gross profit as a percentage of sales decreased to 20.9% in 2022, from 21.3% in 2021.
Other revenues increased $1.0 million, or 3.9% in 2023, compared to 2022. Other revenues consist primarily of the gains related to the disposition of our lease and rental fleet and document fees related to commercial vehicle sales. Gross Profit Gross profit increased $105.9 million, or 7.1%, compared to 2022.
We expect to continue paying cash dividends on a quarterly basis.
The total dividend disbursement is estimated to be approximately $13.2 million. We expect to continue paying cash dividends on a quarterly basis.
On December 31, 2022, we had approximately $44.6 million outstanding under the RTC Canada Floor Plan Agreement. Navistar Financial Corporation and Peterbilt offer trade terms that provide an interest-free inventory stocking period for certain new commercial vehicles. This interest-free period is generally 15 to 60 days.
We utilize our excess cash on hand to pay down our outstanding borrowings under the Floor Plan Credit Agreement, and the resulting interest earned is recognized as an offset to our gross interest expense under the Floor Plan Credit Agreement. Navistar Financial Corporation and Peterbilt offer trade terms that provide an interest-free inventory stocking period for certain new commercial vehicles.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs of December 31, 2022, we had outstanding floor plan borrowings and lease and rental fleet borrowings in the aggregate amount of $1,208.6 million. Assuming an increase or decrease in LIBOR, SOFR, CDOR or the prime rate of 100 basis points, annual interest expense could correspondingly increase or decrease by approximately $12.1 million. 46 Table of Contents
Biggest changeAs of December 31, 2023, we had outstanding floor plan borrowings and lease and rental fleet borrowings in the aggregate amount of $1,553.7 million. Assuming an increase or decrease in SOFR, CDOR or the prime rate of 100 basis points, annual interest expense could correspondingly increase or decrease by approximately $15.5 million. 43 Table of Contents
Our floor plan debt is based on LIBOR and CDOR, the WF Credit Agreement is based on SOFR, the RTC Canada Revolving Credit Agreement is based on CDOR and the PLC Agreement is based on the prime rate.
Our floor plan debt is based on SOFR and CDOR, the WF Credit Agreement is based on SOFR, the RTC Canada Revolving Credit Agreement is based on CDOR and the PLC Agreement is based on the prime rate.

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