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What changed in RUSH ENTERPRISES INC \TX\'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of RUSH ENTERPRISES INC \TX\'s 2023 and 2024 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 2024 report.

+345 added−333 removedSource: 10-K (2025-02-24) vs 10-K (2024-02-23)

Top changes in RUSH ENTERPRISES INC \TX\'s 2024 10-K

345 paragraphs added · 333 removed · 276 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

106 edited+33 added−23 removed63 unchanged
Biggest changeA central component of our Ethics and Compliance Program is the continuous training and education of our employees on general ethics and compliance training topics. We also regularly reinforce our commitment to ethics and integrity in communications with our employees. Health and Safety. Promoting a safe and healthy workplace is our highest priority and is embodied in our core values.
Biggest changePromoting a safe and healthy workplace is our highest priority and is embodied in our core values. We utilize a mixture of leading and lagging indicators to assess the health and safety performance of our operations.
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.
The turnover rate of our technicians is 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.
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.
Our backlog is determined quarterly by multiplying the number of new commercial vehicles for each 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.
We believe that this full-service strategy helps to mitigate cyclical economic fluctuations because our parts, service and collision center operations (referred to herein collectively as “Aftermarket Products and Services”) at our dealerships generally tend to be less volatile than our new and used commercial vehicle sales. ● Aftermarket Products and Services .
We believe that this full-service strategy helps to mitigate cyclical economic fluctuations because our parts, service and collision center operations (referred to herein collectively as “Aftermarket Products and Services”) at our dealerships generally tend to be less cyclical than our new and used commercial vehicle sales. ● Aftermarket Products and Services .
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 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.
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”).
Lease and Rental Fleet Financing On September 14, 2021, we entered into the Credit Agreement (the “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”).
The Rush Foundational Leader Program consists of a series of courses ranging from basic management skills, including promoting a culture of diversity and inclusion, to more advanced leadership concepts and skills that are designed for managers throughout our organization.
The Rush Foundational Leader Program consists of a series of courses ranging from basic management skills, including promoting a culture of inclusion, to more advanced leadership concepts and skills that are designed for managers throughout our organization.
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.
In addition, we provide our employees with an opportunity to save for retirement by participating in the Rush 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.
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.
Dealership Franchise Agreements Peterbilt. We have entered into nonexclusive dealership franchise 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, Nebraska, Nevada, New Mexico, Oklahoma, Tennessee and Texas.
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.
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 $220.0 million.
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.
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 12 International dealership locations in Ontario.
We sell used commercial vehicles at most of our Rush Truck Centers and also at our non-franchised used commercial vehicle facilities.
We sell used commercial vehicles at most of our Rush Truck Centers and at our non-franchised used commercial vehicle facilities.
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.
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.
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 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 .
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.
We have incurred, and will continue to incur, capital and operating expenditures and other costs in complying with such laws and regulations. 12 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 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.
We utilize our excess cash on hand to pay down our outstanding borrowings under the RTC Canada Floor Plan Credit Agreement, and the resulting interest earned is recognized as an offset to our gross interest expense under the RTC Canada Floor Plan Credit Agreement.
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.
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.
In addition, each of our dealership agreements requires the consent of the relevant manufacturer for the sale or transfer of a franchise. 13 Table of Contents Any termination or nonrenewal of our dealership agreements must follow certain guidelines established by both state and federal legislation designed to protect motor vehicle dealers from arbitrary termination or nonrenewal of franchise agreements.
In addition, each of our dealership franchise agreements requires the consent of the relevant manufacturer for the sale or transfer of a franchise. Any termination or nonrenewal of our dealership agreements must follow certain guidelines established by both state and federal legislation designed to protect motor vehicle dealers from arbitrary termination or nonrenewal of franchise agreements.
Our principal offices are located at 555 IH 35 South, Suite 500, New Braunfels, Texas 78130. We are a full-service, integrated retailer of commercial vehicles and related services.
Our principal offices are located at 555 IH 35 South New Braunfels, Texas 78130. We are a full-service, integrated retailer of commercial vehicles and related services.
We have developed our larger commercial vehicle dealerships as “one-stop centers” that offer an integrated approach to meeting customer needs. We provide service, including collision repairs, parts, new and used commercial vehicles sales, leasing and rental, plus financial services including finance and insurance.
We have developed certain of our commercial vehicle dealerships as “one-stop centers” that offer an integrated approach to meeting customer needs. We provide service, including collision repairs, parts, new and used commercial vehicles sales, leasing and rental, plus financial services including finance and insurance.
Our Rush Truck Centers are principally located in high traffic areas throughout the United States and Ontario, Canada. Since commencing operations as a Peterbilt heavy-duty truck dealer in 1966, we have grown to operate over 125 franchised Rush Truck Centers in 23 states.
Our Rush Truck Centers are principally located in high traffic areas throughout the United States and Ontario, Canada. Since commencing operations as a Peterbilt heavy-duty truck dealer in 1966, we have grown to operate over 143 franchised Rush Truck Centers locations in 23 states.
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.
We have entered into nonexclusive dealership franchise agreements with International that authorize us to act as a dealer of International heavy- and medium-duty trucks and, in certain markets, IC buses. Our International areas of responsibility currently encompass areas in the states of Arkansas, Georgia, Idaho, Illinois, Indiana, Kansas, Missouri, North Carolina, Ohio, Tennessee, Utah, Virginia and Ontario, Canada.
Pursuant to the terms of the Agreement, BMO agreed to make up to $116.7 million CAD of revolving credit loans to finance RTC Canada’s purchase of new and used vehicle inventory. Loans to purchase used vehicle inventory are limited to twenty percent (20%) of the credit limit available at such time.
Pursuant to the terms of the RTC Canada Floor Plan Credit Agreement, BMO agreed to make up to $116.7 million CAD of revolving credit loans to finance RTC Canada’s purchase of new and used vehicle inventory. Loans to purchase used vehicle inventory are limited to twenty percent (20%) of the credit limit available at such time.
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.
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, Dennis Eagle, Blue Arc and Battle Motors.
The majority of our used commercial vehicle inventory consists of commercial vehicles taken as trade-ins from new commercial vehicle customers or retired from our lease and rental fleet, but we also supplement our used commercial vehicle inventory by purchasing used commercial vehicles from third parties for resale, as market conditions warrant. Vehicle Leasing and Rental .
Most of our used commercial vehicle inventory consists of commercial vehicles taken as trade-ins from new commercial vehicle customers or retired from our lease and rental fleet, but we also supplement our used commercial vehicle inventory by purchasing used commercial vehicles from third parties for resale, as market conditions warrant. Vehicle Leasing and Rental .
Additionally, we use onboarding and exit survey feedback to monitor and improve engagement and retention. We have formal “listening groups” that provide additional engagement channels for feedback from our dealerships to senior management throughout the year. One of these groups is the Field Leadership Advisory Group (FLAG). FLAG consists of field employees nominated and selected for their valuable experience.
Additionally, we use onboarding and exit survey feedback to monitor and improve engagement and retention. We have formal listening groups that provide additional engagement channels for feedback from our dealerships to senior management throughout the year. One of these groups is the Field Leadership Advisory Group (“FLAG”). FLAG consists of field employees nominated and selected for their valuable experience.
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.
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 2.10%, 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 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.
The sale of financial and insurance products accounted for approximately $22.0 million, or 0.3%, of our total revenues for 2024. 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.
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 (as amended).
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 employ a branding program at 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.
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.
Borrowings under the WF Credit Agreement bear interest per annum, payable on each interest payment date, 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 SOFR transition date, SOFR plus (i) 1.25% or (ii) 1.5%, depending on our consolidated leverage ratio.
Pursuant to the terms of the PLC Agreement, PLC agreed to make up to $300.0 million of revolving credit loans to finance certain of our capital expenditures, including commercial vehicle purchases and other equipment to be leased or rented through our PacLease franchises.
Pursuant to the terms of the PLC Agreement (as amended), PLC agreed to make up to $500.0 million of revolving credit loans to finance certain of our capital expenditures, including commercial vehicle purchases and other equipment to be leased or rented through our PacLease franchises.
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.
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.
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.
These agreements currently have terms expiring in July 2025. Our 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 34.3% of our total revenues for 2024. International.
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.
These agreements currently have terms expiring between May 2025 and January 2029. Sales of new International commercial vehicles accounted for approximately 17.4% of our total revenues for 2024. Other Commercial Vehicle Suppliers .
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.
However, Aftermarket Products and Services operations historically have experienced higher sales volumes in the second and third quarters. Backlog On December 31, 2024, our backlog of commercial vehicle orders was approximately $1,512.7 million, compared to a backlog of commercial vehicle orders of approximately $3,733.4 million on December 31, 2023.
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 .
We had 2,942 vehicles under contract maintenance as of December 31, 2024. 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 .
Although we do not provide any warranty on used commercial vehicles, we offer for sale third-party warranties. Trademarks The trademarks and trade names of the manufacturers we represent, which are used in connection with our marketing and sales efforts, are subject to limited licenses included in our dealership agreements with each manufacturer.
Although we do not provide any warranty on used commercial vehicles, our customers may purchase third-party warranties from us. Trademarks The trademarks and trade names of the manufacturers we represent, which are used in connection with our marketing and sales efforts, are subject to limited licenses included in our dealership agreements with each manufacturer.
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.
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 $186.6 million, or 2.4%, of our total revenues for 2024.
This formal mentorship program also helps us identify top performers and we believe it improves employee performance and retention for participants in the program. Employee Experience. We conduct an annual comprehensive employee engagement survey designed to measure organizational culture and engagement.
We believe that this program increases the technicians’ likelihood of career success. This formal mentorship program also helps us identify top performers and we believe it improves employee performance and retention for participants in the program. Employee Experience. We conduct an annual comprehensive employee engagement survey designed to measure organizational culture and engagement.
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.
Vehicle leasing and rental revenues accounted for approximately $354.9 million, or 4.5%, of our total revenues for 2024. 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, 2024, we had 10,148 commercial vehicles in our lease and rental fleet.
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.
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 2024, we had a TRIR of 4.10, compared to 3.68 in 2023 and a LTIR of 0.62 in 2024, compared to 0.57 in 2023. 7 Table of Contents Labor Relations.
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.
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.
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.
New light-duty commercial vehicle sales accounted for approximately $126.0 million, or 1.6%, of our total revenues for 2024, and 2.8% of our new commercial vehicle revenues for 2024. A significant portion of our new commercial vehicle sales are to customers with large fleets of commercial vehicles.
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.
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.
Our aftermarket capabilities include a wide range of services and products, including a fleet of mobile service units, mobile technicians who work in our customers’ facilities, technology solutions, including vehicle telematics support, a proprietary line of parts and accessories, and factory-certified service for assembly services for specialized bodies and equipment.
Our aftermarket capabilities include a wide range of services and products such as providing parts, service and collision repairs at certain of our Rush Truck Centers, a fleet of mobile service units, mobile technicians who work in our customers’ facilities, technology solutions, including vehicle telematics support, a proprietary line of parts and accessories, and factory-certified service for assembly services for specialized bodies and equipment.
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”).
On December 31, 2024, we had approximately $153.4 million outstanding under the WF Credit Agreement. On November 1, 2023, the Company entered into that certain Second Amended and Restated Inventory Financing and Purchase Money Security Agreement with PACCAR Leasing Company (“PLC”), a division of PFC (the “PLC Agreement”).
Sales of new non‑Peterbilt and non-International commercial vehicles accounted for approximately 8.5% of our total revenues for 2023. Our dealership agreements impose certain operational obligations and financial requirements upon us and the relevant dealerships.
Sales of new non Peterbilt and non-International commercial vehicles accounted for approximately 6.6% of our total revenues for 2024. 9 Table of Contents Our dealership franchise agreements impose certain operational obligations and financial requirements upon us and the relevant dealerships.
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.
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. 4 Table of Contents Used Commercial Vehicle Sales . Used commercial vehicle sales accounted for approximately $335.8 million, or 4.3%, of our total revenues for 2024.
Programs are designed to facilitate the development and advancement of talent from within our organization to enable us to continuously fill our ranks with qualified employees for critical positions in the organization. 10 Table of Contents Our Rush Foundational Leader Program is focused on developing key management and leadership skills.
Career development is fostered through education, training, learning opportunities, succession planning and performance management. Programs are designed to facilitate the development and advancement of talent from within our organization to enable us to continuously fill our ranks with qualified employees for critical positions in the organization. Our Rush Foundational Leader Program is focused on developing key management and leadership skills.
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.
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 model ordered.
The PLC Agreement expires on December 1, 2025, although either party has the right to terminate the PLC Agreement at any time upon 180 days written notice. On December 31, 2023, we had approximately $265.0 million outstanding under the PLC Agreement.
The PLC Agreement expires on December 16, 2029, although either party has the right to terminate the PLC Agreement at any time upon 360 days written notice. On December 31, 2024, we had approximately $220.0 million outstanding under the PLC Agreement.
In general, our compensation programs consist of a base salary or hourly rate, commissions for employees in front-line customer facing roles, cash performance bonuses for certain employees, equity incentive awards for senior leaders, vacation leave, sick leave and other forms of paid time off. We are committed to fair pay.
In general, our compensation programs consist of a base salary or hourly rate, commissions for employees in front-line customer facing roles, cash performance bonuses for certain employees, equity incentive awards for senior leaders, vacation leave, sick leave and other forms of paid time off. We offer a defined contribution retirement savings plan (the “Rush 401k Plan”) to eligible employees.
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.
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.
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.
The BMO Floor Plan Credit Agreement expires December 31, 2029, although BMO Bank N.A. 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, 2024, we had approximately $389.3 million outstanding under the BMO Floor Plan Credit Agreement.
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).
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).
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.
There are also multiple lawsuits pending where plaintiffs are challenging the GHG-3 rule on multiple grounds, including that the EPA exceeded its statutory authority in creating the rule. 13 Table of Contents In July 2023, CARB and various manufacturers of heavy-duty commercial vehicles and engines, including PACCAR, International, 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.
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.
We have entered into collective bargaining agreements covering certain employees at our Rush Truck Center, Chicago location, which will expire on May 10, 2025, Joliet, Illinois, which will expire on May 3, 2026, Carol Stream, Illinois, which will expire on May 2, 2027 and at our Chicago Light and Medium Duty location, which will expire on May 6, 2028.
Department of Transportation, issued rules associated with reducing greenhouse gas (“GHG”) emissions and improving the fuel efficiency of medium and heavy-duty trucks and buses for current model years through 2027.
Department of Transportation, have issued rules associated with reducing greenhouse gas (“GHG”) and Nitrogen Oxide (“NOx”) emissions and improving the fuel efficiency of medium and heavy-duty trucks and buses.
We believe that our core values are the foundation of a strong and ethical culture that is a strength for us, and we intend to continue building upon that culture to improve performance across our business. Employee Recruitment. We strive to attract the best talent from a variety of sources to meet the current and future needs of our business.
We believe that our core values are the foundation of a strong and ethical culture that is a strength for us, and we intend to continue building upon that culture to improve performance across our business. 5 Table of Contents Employee Recruitment.
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.
During 2024, 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.
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.
We utilize our excess cash on hand to pay down our outstanding borrowings under the PFC Floor Plan Credit Agreement, and the resulting interest earned is recognized as an offset to our gross interest expense under the PFC Floor Plan Credit Agreement. On September 14, 2021, we entered into the Fifth Amended and Restated Credit Agreement with BMO Bank N.A.
Management continually monitors employee turnover data, which is supplemented with additional data from exit surveys to assist in determining the reasons for voluntary employee terminations. In 2023, our overall turnover rate for U.S. and Canada was 25.1%, compared to 28.6% in 2022.
Management continually monitors employee turnover data, which is supplemented with additional data from exit surveys to assist in determining the reasons for voluntary employee terminations. In 2024, our overall turnover rate for U.S. and Canada was 30.5%, as compared to 25.1% in 2023, due in large part to expense reduction efforts completed in the first half of 2024.
Recent Acquisitions On December 4, 2023, we acquired certain assets of Freeway Ford Truck Sales, Inc., which included real estate and a Ford commercial vehicle franchise in Chicago, Illinois, along with commercial vehicle and parts inventory. The transaction was valued at approximately $16.3 million, with the purchase price paid in cash.
On December 4, 2023, we acquired certain assets of Freeway Ford Truck Sales, Inc., which included real estate and a Ford commercial vehicle franchise in Chicago, Illinois, along with commercial vehicle and parts inventory.
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.
In addition to our dealership franchise agreements with Peterbilt and International, various Rush Truck Centers have entered into dealership franchise agreements with other commercial vehicle manufacturers, including Ford, Hino, Isuzu and Battle Motors that have perpetual terms and Blue Bird, Micro Bird, Dennis Eagle and Blue Arc that have variable terms.
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.
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. 3 Table of Contents ● Open New Rush Truck Centers in Existing Areas of Operation .
Substantially all of our long-term leases also contain a service provision, whereby we agree to service the vehicle through the life of the lease.
Our lease and rental fleets are offered to customers on a daily, monthly or long-term basis. Substantially all of our long-term leases also contain a service provision, whereby we agree to service the vehicle through the life of the lease.
Competition There is, and will continue to be, significant competition both within our current markets and in new markets we may enter.
See Note 15 – Acquisitions in the Notes to the Financial Statements for further discussion. Competition There is, and will continue to be, significant competition both within our current markets and in new markets we may enter.
Through certain of our Rush Truck Centers and several stand-alone Rush Truck Leasing locations, we provide a broad line of product selections for lease or rent, including Class 4 through Class 8 commercial vehicles, heavy-duty cranes and refuse vehicles. Our lease and rental fleets are offered to customers on a daily, monthly or long-term basis.
Through certain of our Rush Truck Centers and several stand-alone locations, we operate 54 franchised Rush Truck Leasing locations in 21 states and 5 locations in Ontario. We provide a broad line of product selections for lease or rent, including Class 4 through Class 8 commercial vehicles, heavy-duty cranes and refuse vehicles.
Product Warranties The manufacturers we represent provide retail purchasers of their products with a limited warranty against defects in materials and workmanship, excluding certain specified components that are separately warranted by the suppliers of such components.
On December 31, 2024, we had approximately $50.4 million CAD outstanding under the RTC Canada Revolving Credit Agreement. 11 Table of Contents Product Warranties The manufacturers we represent provide retail purchasers of their products with a limited warranty against defects in materials and workmanship, excluding certain specified components that are separately warranted by the suppliers of such components.
Effective January 2022, we sold 50% of our equity interest in Momentum Fuel Technologies to a subsidiary of Cummins, Inc. and we are now operating the business, Cummins Clean Fuel Technologies, as a joint venture with Cummins. The joint venture manufactures compressed natural gas fuel systems and related component parts for commercial vehicles at its facility in Roanoke, Texas.
Our World Wide Tires store operates in Houston, Texas. World Wide Tires primarily sells tires for use on commercial vehicles. Effective January 2022, we sold 50% of our equity interest in Momentum Fuel Technologies to a subsidiary of Cummins, Inc. and we are now operating the business, Cummins Clean Fuel Technologies, as a joint venture with Cummins.
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 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 several leading insurance companies. Human Capital Management On December 31, 2024, we employed 7,388 people in the U.S. and 550 people in Canada.
New medium-duty commercial vehicle sales, excluding new bus sales, accounted for approximately $1,119.7 million, or 14.1%, of our total revenues for 2023, and 24.6% of our new commercial vehicle revenues for 2023. New bus sales accounted for approximately $192.3 million, or 2.4%, of our total revenues for 2023, and 4.2% of our new commercial vehicle revenues for 2023.
New medium-duty commercial vehicle sales, excluding new bus sales, accounted for approximately $1,312.3 million, or 16.8%, of our total revenues for 2024, and 28.8% of our new commercial vehicle revenues for 2024. New bus sales accounted for approximately $172.9 million, or 2.2%, of our total revenues for 2024, and 3.8% of our new commercial vehicle revenues for 2024.
Prior to acquiring our additional equity interest, we accounted for the equity interest in RTC Canada using the equity method of accounting.
Prior to acquiring our additional equity interest, we accounted for the equity interest in RTC Canada using the equity method of accounting. After we acquired the additional 30% equity interest, the operating results of RTC Canada were consolidated in the Consolidated Statements of Income, the Consolidated Statements of Comprehensive Income and the Consolidated Balance Sheets.
In 2020, the Company established a minimum hourly wage of $15.00 an hour. Our employees receive a base level of monthly or hourly compensation that we believe is commensurate with their expertise, skills, knowledge, experience and location. We provide our full-time employees with comprehensive benefit options that allow our employees and their families to live healthier and more secure lives.
We are committed to fair pay and have established a minimum hourly wage of $15.00 per hour. Our employees receive a base level of monthly or hourly compensation that we believe is commensurate with their expertise, skills, knowledge, experience and location.
Certain Rush Truck Centers sell medium-duty commercial vehicles manufactured by Peterbilt, Hino, Isuzu, Ford, International or Dennis Eagle, buses manufactured by Blue Bird, IC Bus or Elkhart and light-duty commercial vehicles manufactured by Ford (see Part I, Item 1, “General – Rush Truck Centers ” for information on which brands we sell at each Rush Truck Center).
Certain Rush Truck Centers sell medium-duty commercial vehicles manufactured by Peterbilt, Hino, Isuzu, Ford, International, Blue Arc, Dennis Eagle or Battle Motors, buses manufactured by Blue Bird, IC Bus or Micro Bird and light-duty commercial vehicles manufactured by Ford.
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.
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, although multiple of these states have recently announced plans to delay various aspects of CARB’s regulations.
Of this total, new Class 8 heavy-duty truck sales accounted for approximately $3,083.1 million, or 38.9%, of our total revenues for 2023, and 67.9% of our new commercial vehicle revenues for 2023. 8 Table of Contents Our Rush Truck Centers that sell new and used Class 8 heavy-duty trucks manufactured by Peterbilt, International or Dennis Eagle may also sell medium-duty and light-duty commercial vehicles.
Our Rush Truck Centers that sell new and used Class 8 heavy-duty trucks manufactured by Peterbilt, International, Hino, Dennis Eagle or Battle Motors may also sell medium-duty and light-duty commercial vehicles.
The average daily outstanding borrowings under the Floor Plan Credit Agreement were $870.1 million during the year ended December 31, 2023.
The average daily outstanding borrowin.gs under the BMO Floor Plan Credit Agreement were $956.4 million during the twelve months ended December 31, 2024.
In addition, it is not uncommon for neighboring landowners and other third parties to file claims for personal injury and property damage allegedly caused by the release of hazardous substances or other materials into the environment. 16 Table of Contents The federal Clean Water Act and comparable state statutes require containment of potential discharges of oil or hazardous substances and require preparation of spill contingency plans.
These responsible parties also may be liable for damages to natural resources. In addition, it is not uncommon for neighboring landowners and other third parties to file claims for personal injury and property damage allegedly caused by the release of hazardous substances or other materials into the environment.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeNew 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.
Biggest changeWe 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.
If any of the following risks actually occur, our financial condition and results of operations could be materially adversely affected. If this were to happen, the value of our common stock could decline significantly, and you could lose all or part of your investment. This report is qualified in its entirety by these risk factors.
If any of the following risks occur, our financial condition and results of operations could be materially adversely affected. If this were to happen, the value of our common stock could decline significantly, and you could lose all or part of your investment. This report is qualified in its entirety by these risk factors.
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.
We have, from time to time, experienced threats to our data and systems, including malware, ransomware, phishing 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.
Each share of Class A common stock ranks substantially equal to each share of Class B common stock with respect to receipt of any dividends or distributions declared on shares of common stock and the right to receive proceeds on liquidation or dissolution of us after payment of our indebtedness and liquidation preference payments to holders of any preferred shares.
Each share of Class A common stock ranks equal to each share of Class B common stock with respect to receipt of any dividends or distributions declared on shares of common stock and the right to receive proceeds on liquidation or dissolution of us after payment of our indebtedness and liquidation preference payments to holders of any preferred shares.
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.
Due to our dependence on International Motors, 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 International Motors; and ● the maintenance of goodwill associated with the International and IC Bus brands, which can be adversely affected by decisions made by International Motors and the owners of other International and IC Bus dealerships.
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.
In July 2023, CARB and various manufacturers of heavy-duty commercial vehicles and engines, including PACCAR, International Motors, 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.
At certain Rush Truck Centers, we operate as a dealer of International trucks and parts and IC buses and parts pursuant to dealership agreements with International and IC Bus, each of which are divisions of Navistar. We have no control over the management or operation of International, IC Bus or Navistar.
At certain Rush Truck Centers, we operate as a dealer of International trucks and parts and IC buses and parts pursuant to dealership agreements with International and IC Bus, each of which are divisions of International Motors. We have no control over the management or operation of International, IC Bus or International Motors.
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
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. 22 Table of Contents
Our results of operations, financial condition or cash flows could be adversely affected if one or more of the manufacturers we represent are impacted by any of the foregoing adverse events. Actions taken in response to continued operational losses by manufacturers we represent, including bankruptcy or reorganizations, could have a material adverse effect on our sales volumes and profitability.
Our results of operations, financial condition or cash flows could be adversely affected if one or more of the manufacturers we represent are impacted by any of the foregoing adverse events. 18 Table of Contents Actions taken in response to continued operational losses by manufacturers we represent, including bankruptcy or reorganizations, could have a material adverse effect on our sales volumes and profitability.
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.
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. Risks Related to Financial and Economic Matters We may be required to obtain additional financing to maintain adequate inventory levels.
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.
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.
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.
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. 21 Table of Contents We have operations in Canada.
“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.
“Rusty” Rush, 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 41.2% of the aggregate voting power with respect to the election of directors as of December 31, 2024); 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.
While the manufacturers we represent have made substantial progress in reducing the amount of greenhouse gas emissions that result from internal combustion engines, it is widely accepted that alternative fuel vehicles are necessary to address climate change.
While the manufacturers we represent have made substantial progress in reducing the amount of nitrogen oxide and greenhouse gas emissions that result from internal combustion engines, it is widely accepted that alternative fuel vehicles are necessary to address climate change.
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 PFC Floor Plan Credit Agreement, BMO Floor Plan Credit Agreement, RTC Canada Floor Plan Credit 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.
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.
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 real property and personal property (other than our vehicle inventory) that we own.
In the course of our business, we are exposed to claims for personal injury, death or property damage resulting from: (i) our customers’ use of commercial vehicles that we sell, service, lease or rent; (ii) our customers’ purchase of other products that we design, manufacture, sell or install, such as commercial vehicle parts, custom vehicle modifications and CNG fuel systems; and (iii) injuries caused by motor vehicle accidents that our service or delivery personnel are involved in.
In the course of our business, we are exposed to claims for personal injury, death or property damage resulting from: (i) our customers’ use of commercial vehicles that we sell, service, lease or rent; (ii) our customers’ purchase of other products that we design, manufacture, sell or install, such as commercial vehicle parts, custom vehicle modifications and CNG fuel systems through our joint venture with Cummins; and (iii) injuries caused by motor vehicle accidents that our service or delivery personnel are involved in.
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.
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. 19 Table of Contents Engine emissions rules and regulations could affect demand for the products that we sell in certain markets.
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.
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 International dealership agreements, would have an adverse impact on our business. Our growth strategies may be unsuccessful if we are unable to successfully execute our strategic initiatives or identify and complete future acquisitions.
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.
Rush and his affiliate own approximately 0.3% of our issued and outstanding shares of Class A common stock and 44.3% of our issued and outstanding Class B common stock. Mr. Rush collectively controls approximately 35.6% of the aggregate voting power of our outstanding shares, which is substantially more than any other person or group. The interests of Mr.
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.
A negative change in any of the preceding, or a change in control of International Motors, could have a material adverse effect on our operations, revenues and profitability. 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.
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 produce nitrogen oxide and greenhouse gas emissions.
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.
The volume of trading in our Class B common stock varies greatly and may often be light. As of December 31, 2024, the three-month average daily trading volume of our Class B common stock was approximately 17,000 shares, with twenty-three days having a trading volume below 10,000 shares.
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.
During 2024, a significant portion of our revenues resulted from sales of trucks purchased from International, buses purchased from IC Bus and parts purchased from International Motors.
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.
The dollar amount of our backlog, as stated at any given time, is not necessarily indicative of our future earnings. As of December 31, 2024, our backlog of new commercial vehicle orders was approximately $1,512.7 million.
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.
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.
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.
Any cyberattack, security breach or other event resulting in the misappropriation, loss, or other unauthorized disclosure of confidential information or 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. 20 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.
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.
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.
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.
Our dealership agreements with Peterbilt and International have current terms expiring between May 2025 and May 2029. Our dealerships agreements with the other manufacturers we represent generally have terms expiring between 2025 and 2028 or have indefinite terms. Upon expiration of each agreement, we must negotiate a renewal.
Management expects that, consistent with in some cases decades of past practice, each of our dealership agreements will be renewed or otherwise extended before its termination date, provided that we do not breach any of the material terms of such agreement.
Management expects that, consistent with in some cases decades of past practice, each of our dealership agreements will be renewed or otherwise extended before its termination date, provided that we do not breach any of the material terms of such agreement. 15 Table of Contents Management attempts to mitigate the risk that any manufacturer would not renew a dealership agreement by providing superior representation of each brand that we represent in each of our areas of responsibility.
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.
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.
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.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting 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.
Due in large part to the geographic reach of our dealership network, relationships with both the manufacturers we represent and our customers and our access to capital, we believe we are well-positioned to serve our customers’ evolving needs and help them reduce their greenhouse gas emissions by helping them integrate more alternative fuel vehicles into their fleets and providing various services related thereto.
Due in large part to the geographic reach of our dealership network, relationships with both the manufacturers we represent and our customers and our access to capital, we believe we are well-positioned to serve our customers’ evolving needs and help them reduce their nitrogen oxide and greenhouse gas emissions by helping them integrate more alternative fuel vehicles into their fleets and providing various services related thereto. 16 Table of Contents 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) have disrupted our operations in the past.
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.
It is also worth noting that 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 the waivers with respect to the HD Omnibus and Advanced Clean Truck rules.
Risks Related to Our Business Operations We are dependent upon PACCAR for the supply of Peterbilt trucks and parts, the sale of which generates the majority of our revenues. At certain Rush Truck Centers, we operate as a dealer of Peterbilt trucks and parts pursuant to dealership agreements with Peterbilt, a division of PACCAR.
Risks Related to Our Business Operations We are dependent upon PACCAR for the supply of Peterbilt trucks and parts, as well as the financing of Peterbilt trucks, the sale of which generates the majority of our revenues.
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.
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.
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.
While the reduction in the number of new commercial vehicles that we were able to sell in 2024 due to CARB’s rules was not material to our financial results, 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.
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.
At certain Rush Truck Centers, we operate as a dealer of Peterbilt trucks and parts pursuant to dealership agreements with Peterbilt, a division of PACCAR. We have no control over the management or operation of Peterbilt or PACCAR. During 2024, the majority of our revenues resulted from sales of trucks purchased from Peterbilt and parts purchased from PACCAR Parts.
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.
Given the current uncertainty in connection with recently proposed tariffs against Canada, Mexico and China, we believe that certain commercial vehicle orders currently reflected in our backlog could be cancelled in the event that such tariffs are enacted and significantly increase the aggregate price that our customers will have to pay for such vehicles. 17 Table of Contents Impairment in the carrying value of goodwill and other indefinite-lived intangible assets could negatively affect our operating results.
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.
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, although multiple of these states have recently announced plans to delay various aspects of CARB’s regulations.
A negative change in any of the preceding, or a change in control of PACCAR, could have a material adverse effect on our operations, revenues and profitability. We are dependent upon Navistar for the supply of International trucks and parts and IC buses and parts, the sale of which generate a significant portion of our revenues.
A negative change in any of the preceding, or a change in control of PACCAR, could have a material adverse effect on our operations, revenues and profitability.
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.
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.
We self-insure our property insurance with respect to the real property that we own and our personal property (excluding our vehicle inventory, which is insured). We also maintain various insurance policies with third-party insurers, each of which are subject to deductibles with high dollar amounts.
We also maintain various insurance policies with third-party insurers, each of which are subject to deductibles with high dollar amounts.
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.
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.
Our primary floor plan financing agreement, the Floor Plan Credit Agreement, expires on September 14, 2026, and may be terminated without cause upon 360 days’ notice.
Our primary floor plan financing agreements include the PFC Floor Plan Credit Agreement and the BMO Floor Plan Credit Agreement. Both of these floor plan credit agreements expire in December 2029 and may be terminated without cause upon 360 days’ notice.
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.
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. We are subject to risks associated with commercial vehicles and parts manufactured outside of the United States.
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.
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.
Management attempts to mitigate the risk that any manufacturer would not renew a dealership agreement by providing superior representation of each brand that we represent in each of our areas of responsibility. We deliver superior representation to our manufacturers by continuously investing substantial capital into our dealership locations, marketing and personnel.
We deliver superior representation to our manufacturers by continuously investing substantial capital into our dealership locations, marketing and personnel.
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.
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.
Laws 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.
Laws 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. Currently, the commercial vehicle industry is subject to the EPA 2027 Low NOx and the EPA’s GHG-3 rule, each of which are scheduled to become effective starting in model year 2027.
Removed
Scientific evidence suggests that a warming climate potentially results in an environment more prone to natural disasters, such as hurricanes and flooding.
Added
In addition to the factors listed above, we also finance our Peterbilt commercial vehicle inventory through the PFC Floor Plan Agreement with PFC, and thus, the financial health of PACCAR is also important to our business operations. 14 Table of Contents We are dependent upon International Motors for the supply of International trucks and parts and IC buses and parts, the sale of which generate a significant portion of our revenues.
Removed
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.
Added
Although we have not experienced any material losses from natural disasters or severe weather events, it is possible that future natural disasters and severe weather events may adversely impact our business, results of operations, financial condition and cash flows.
Removed
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.
Added
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.
Removed
Vehicle manufacturers’ lobbying efforts may lead to the repeal or revision of state motor vehicle dealer laws.
Added
In addition, owners and commercial fleets that register or operate commercial vehicles in the State of California are also subject to CARB’s HD Omnibus and Advanced Clean Truck rules, both of which became effective in January 2024.
Removed
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.
Added
It is widely expected that the current GHG-3 rule will be revoked or modified by a branch of the federal government, but it is less clear whether a branch of the federal government may attempt to revoke or modify the EPA 2027 Low NOx rule.
Removed
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.
Added
Recently, CARB revoked its request for a waiver from the EPA with respect to the Advanced Clean Fleet rule. In addition, the EPA recently announced that it has asked Congress to review the previously granted waivers that CARB received with respect to the HD Omnibus and Advanced Clean Truck rules.
Removed
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.
Added
The current head of the EPA believes that these waivers should have been approved by Congress prior to becoming effective.
Removed
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.
Added
There are also multiple lawsuits pending where plaintiffs are challenging the GHG-3 rule on multiple grounds, including that the EPA exceeded its statutory authority in creating the rule.
Removed
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.
Added
It is unclear what effect, if any, the outcome of the multiple lawsuits challenging the HD Omnibus and Advanced Clean Truck rules, or Congress’ decisions with respect to the EPA’s previously granted waivers, might have on the Clean Truck Partnership.
Removed
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.
Added
Six of the states that signed are states where we sell new commercial vehicles: California, Colorado, New Mexico, North Carolina and Virginia.
Removed
Rush may not be consistent with the interests of all shareholders. As a result of such ownership, Mr.
Added
For example, we believe that the HD Omnibus and Advanced Clean Truck rules, and the uncertainty regarding CARB’s enforcement of the same, resulted in our California dealerships selling less new commercial vehicles in 2024 than they would have absent such rules.
Removed
Additionally, the number of shares owned by Mr.
Added
We utilize a captive insurance company to provide our auto and general commercial liability insurance, which we supplement with excess insurance coverage. We self-insure the real property that we own and our personal property (excluding our vehicle inventory, which is insured).
Added
Our business involves the sale of commercial vehicles, parts and commercial vehicles composed of parts that are manufactured outside of the United States, including Canada, Mexico and China.
Added
As a result, our operations are subject to certain risks of doing business outside of the United States, including import duties, exchange rates, trade restrictions and general political and socio-economic conditions in other countries.
Added
The United States or the countries where certain of the commercial vehicles and parts that we sell are manufactured may, from time to time, impose new quotas, duties, tariffs or other restrictions or limitations, or adjust presently prevailing quotas, duties or tariffs.
Added
The imposition of new, or adjustments to prevailing, quotas, duties, tariffs or other restrictions or limitations could have a material adverse effect on our business, financial condition, results of operations and cash flows. Our dealerships are subject to federal, state and local environmental regulations that may result in claims and liabilities, which could be material.
Added
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, the number of shares owned by Mr.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

3 edited+1 added−0 removed7 unchanged
Biggest changeThe COO and the ISGC meet with the CIO and CPO on a regular basis to review and monitor our cybersecurity risks and mitigation efforts. We engage external assessors, consultants, and auditors to assist us in evaluating and enhancing our cybersecurity risk management processes.
Biggest changeMembers of the ISGC, including the CIO and CPO, meet with the COO on a regular basis to review and monitor our cybersecurity risks and mitigation efforts. Our Board of Directors (the “Board”) oversees our enterprise risk management activities in general, including cybersecurity risks.
Our Board of Directors (the “Board”) oversees our enterprise risk management activities in general, including cybersecurity risks. The Audit Committee of the Board has been designated with specific oversight responsibility with respect to cybersecurity and data privacy risk management. The Board receives a comprehensive update on the status of risks related to cybersecurity annually and periodic updates on particular matters.
The Audit Committee of the Board has been designated with specific oversight responsibility with respect to cybersecurity and data privacy risk management. The Board receives a comprehensive update on the status of risks related to cybersecurity annually and periodic updates on particular matters.
We also have processes to oversee and identify such risks from cybersecurity threats associated with our use of third-party service providers. While we have not experienced a material breach, our systems are frequently the target of cyber security attacks intending to steal, misuse, or destroy data, to impact our ability to do business, or otherwise negatively impact us.
While we have not experienced a material breach, our systems are frequently the target of cyber security attacks intending to steal, misuse, or destroy data, to impact our ability to do business, or otherwise negatively impact us.
Added
We engage external assessors, consultants, and auditors to assist us in evaluating and enhancing our cybersecurity risk management processes. We also have processes to oversee and identify such risks from cybersecurity threats associated with our use of third-party service providers.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 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.
Biggest changeAs of December 2024, 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, Nebraska, Nevada, New Mexico, North Carolina, Ohio, Oklahoma, Tennessee, Texas, Utah, Virginia and Ontario, Canada.
We 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.
We also own and operate a guest ranch of approximately 10,950 acres near Cotulla, Texas, which is used for client development purposes. 23 Table of Contents
Added
Item 2. Properties Our corporate headquarters are owned by us and located in New Braunfels, Texas.
Added
For information regarding the number of locations that we have in each state, the number of locations that we own or lease and the number of franchises that we represent in each state, please see “Business” in “Item 1. Business.” We lease a hangar in New Braunfels, Texas for our corporate aircraft.

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. 27 Table of Contents
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.
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.
As of December 31, 2024, 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

12 edited+0 added−1 removed3 unchanged
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.
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. 2024 2023 Dividends Declared High Low Dividends Declared High Low Class A Common Stock First Quarter $ .17 $ 53.72 $ 42.77 $ .14 $ 41.47 $ 33.44 Second Quarter .17 53.78 41.51 .14 41.32 33.37 Third Quarter .18 56.64 40.99 .17 46.30 38.85 Fourth Quarter .18 65.15 49.52 .17 50.42 34.68 Class B Common Stock First Quarter $ .17 $ 53.35 $ 45.00 $ .14 $ 43.73 $ 35.43 Second Quarter .17 53.31 37.85 .14 45.93 36.57 Third Quarter .18 51.91 37.92 .17 50.05 42.54 Fourth Quarter .18 58.61 43.81 .17 53.11 39.81 As of February 17, 2025, there were seventeen record holders of Class A common stock and nineteen 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. 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.
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. 25 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.
However, there is no assurance as to the payment of future dividends because the declaration and payment of such dividends is subject to the business judgment of our Board of Directors and will depend on historic and projected earnings, capital requirements, covenant compliance, financial conditions and such other factors as the Board of Directors deems relevant.
However, there is no assurance as to the payment of future dividends because the declaration and payment of such dividends is subject to the business judgment of our Board and will depend on historic and projected earnings, capital requirements, covenant compliance, financial conditions and such other factors as the Board deems relevant.
(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.
(2) The shares represent Class A and Class B common stock repurchased by us. (3) We repurchased shares in 2024 under a stock repurchase program announced on December 2, 2023, which authorized the repurchase of up to $150.0 million of our shares of Class A common stock and/or Class B common stock.
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.
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 2024, our Board approved four quarterly cash dividends on all outstanding shares of common stock totaling $0.70 per share.
The stock price performance included in this graph is not necessarily indicative of future stock price performance. 30 Table of Contents
The stock price performance included in this graph is not necessarily indicative of future stock price performance. 26 Table of Contents
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.
On December 3, 2024, we announced the approval of a new stock repurchase program, effective December 3, 2024, 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.
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.
This plan was terminated effective December 2, 2024; we repurchased $77.5 million shares of our Class A and Class B common stock under the plan prior to its termination.
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.
As of December 31, 2024, we have not sold any securities in the last three years that were not registered under the Securities Act. 24 Table of Contents A summary of our stock repurchase activity for the fourth quarter of 2024 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, 2024 1,326 $ 44.99 (4) 1,326 $ 72,550,513 November 1 – November 30, 2024 1,200 53.92 (5) 1,200 72,485,771 December 1 – December 31, 2024 118,138 54.71 (6) 118,138 143,533,592 Total 120,664 120,664 (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.
(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.
(6) Represents 87,424 shares of Class A common stock at an average price paid per share of $54.74 and 30,714 shares of Class B common stock at an average price paid per share of $54.62.
(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.
(4) Represents 1,326 shares of Class B common stock at an average price paid per share of $44.99. (5) Represents 1,200 shares of Class B common stock at an average price paid per share of $53.92.
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.
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 12/31/2019 and tracks it through 12/31/2024. 12/19 12/20 12/21 12/22 12/23 12/24 Rush Enterprises, Inc. 100.00 130.85 183.74 184.90 268.10 287.61 S&P 500 100.00 118.40 152.39 124.79 157.59 197.02 Peer Group 100.00 121.33 138.72 146.30 221.32 238.42 The stock price performance included in this graph is not necessarily indicative of future stock price performance.
Removed
(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.

Item 7. Management's Discussion & Analysis

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

98 edited+16 added−21 removed38 unchanged
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.
Biggest changeThe following table sets forth for the years indicated certain financial data as a percentage of total revenues: Year Ended December 31, 2024 2023 2022 Revenue New and used commercial vehicle sales 62.6 % 62.6 % 61.3 % Aftermarket Products and Services sales 32.3 32.3 33.4 Lease and rental 4.5 4.5 4.5 Finance and insurance 0.3 0.3 0.4 Other 0.3 0.3 0.4 Total revenues 100.0 100.0 100.0 Cost of products sold 80.4 79.9 79.1 Gross profit 19.6 20.1 20.9 Selling, general and administrative 12.8 12.9 13.1 Depreciation and amortization 0.9 0.7 0.7 Gain (loss) on sale of assets 0.0 0.0 0.0 Operating income 5.9 6.5 7.1 Other income 0.0 0.0 0.3 Interest expense, net 0.9 0.7 0.2 Income from continuing operations before income taxes 5.0 5.8 7.2 Provision for income taxes 1.2 1.4 1.7 Net income 3.8 4.4 5.5 Net income attributable to noncontrolling interest 0.0 0.0 0.0 Net income attributable to Rush Enterprises, Inc. 3.8 % 4.4 % 5.5 % 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 2024 2023 2022 2024 vs 2023 2023 vs 2022 Vehicle unit sales: New heavy-duty vehicles 15,465 17,457 16,778 (11.4 )% 4.0 % New medium-duty vehicles 13,935 13,264 11,025 5.1 20.3 New light-duty vehicles 2,105 1,848 2,039 13.9 (9.4 ) Total new vehicle unit sales 31,505 32,569 29,842 (3.3 )% 9.1 % Used vehicles sales 7,110 7,117 7,078 (0.1 )% 0.6 % Vehicle revenue: New heavy-duty vehicles $ 2,906.8 $ 3,083.1 $ 2,715.3 $ (5.7 ) $ 13.5 New medium-duty vehicles 1,485.2 1,312.0 959.1 13.2 36.8 New light-duty vehicles 126.0 108.8 104.0 15.8 4.6 Total new vehicle revenue $ 4,518.0 $ 4,503.9 $ 3,778.4 $ 0.3 $ 19.2 Used vehicle revenue $ 335.8 $ 414.7 $ 552.9 $ (19.0 ) $ (25.0 ) Other vehicle revenue: (1) $ 35.0 $ 39.4 $ 20.1 $ (11.3 ) $ 96.0 Dealership absorption ratio: 132.2 % 135.3 % 136.6 % (2.3 ) % (1.0 )% (1) Includes sales of truck bodies, trailers and other new equipment. 30 Table of Contents The following table sets forth for the periods indicated the percent of gross profit by revenue source: 2024 2023 2022 Gross Profit: New and used commercial vehicle sales 30.2 % 30.4 % 27.9 % Aftermarket products and services sales 60.4 59.8 61.7 Lease and rental 6.5 6.6 6.7 Finance and insurance 1.4 1.5 2.0 Other 1.5 1.7 1.7 Total gross profit 100.0 % 100.0 % 100.0 % Industry We operate in the commercial vehicle market.
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.
Although we believe that the judgments and estimates are reasonable, actual results could differ, and we may be exposed to losses or gains that could be material. An unfavorable tax settlement would generally require use of our cash and result in an increase in our effective income tax rate in the period of resolution.
Although we believe that the judgments and estimates are reasonable, actual results could differ, and we may be exposed to losses or gains that could be material. An unfavorable tax settlement would require use of our cash and result in an increase in our effective income tax rate in the period of resolution.
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.
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.
Critical Accounting Policies and Estimates Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles.
Critical Accounting Estimates Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles.
Heavy-Duty Truck Market The U.S. retail heavy-duty truck market is affected by a number of factors, including general economic conditions, fuel prices, other methods of transportation, environmental and other government regulation, interest rate fluctuations and customer business cycles. According to data published by A.C.T.
Heavy-Duty Truck Market The U.S. retail heavy-duty truck market is affected by a number of factors, including general economic conditions, fuel prices, other methods of transportation, environmental and other government regulations, interest rate fluctuations and customer business cycles. According to data published by A.C.T.
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.
During 2023, operating activities resulted in 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.
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.
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, 2024.
On July 15, 2022, RTC Canada entered into the RTC Canada Floor Plan Agreement with BMO. Pursuant to the terms of the Agreement, BMO agreed to make up to $116.7 million CAD of revolving credit loans to finance RTC Canada’s purchase of new and used vehicle inventory.
On July 15, 2022, RTC Canada entered into the RTC Canada Floor Plan Credit Agreement (as amended) with BMO. Pursuant to the terms of the RTC Canada Floor Plan Credit Agreement, BMO agreed to make up to $116.7 million CAD of revolving credit loans to finance RTC Canada’s purchase of new and used vehicle inventory.
We continually evaluate our liquidity and capital resources based upon: (i) our cash and cash equivalents on hand; (ii) the funds that we expect to generate through future operations; (iii) current and expected borrowing availability under our secured line of credit, working capital lines of credit available under certain of our credit agreements and our Floor Plan Credit Agreement; and (iv) the potential impact of our capital allocation strategy and any contemplated or pending future transactions, including, but not limited to, acquisitions, equity repurchases, dividends, or other capital expenditures.
We continually evaluate our liquidity and capital resources based upon: (i) our cash and cash equivalents on hand; (ii) the funds that we expect to generate through future operations; (iii) current and expected borrowing availability under our secured line of credit, working capital lines of credit available under certain of our credit agreements and both our Peterbilt and BMO Floor Plan Credit Agreements; and (iv) the potential impact of our capital allocation strategy and any contemplated or pending future transactions, including, but not limited to, acquisitions, equity repurchases, dividends, or other capital expenditures.
We believe the following accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements. The Company’s significant accounting policies are disclosed in Note 2 of the Notes to Consolidated Financial Statements. Inventory Reserves Inventories are stated at the lower of cost or net realizable value.
We believe the following accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements. 28 Table of Contents The Company’s significant accounting policies are disclosed in Note 2 of the Notes to Consolidated Financial Statements. Inventory Reserves Inventories are stated at the lower of cost or net realizable value.
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.
Year Ended December 31, 2023, Compared to Year Ended December 31, 2022 For a discussion of information on the year ended December 31, 2023, refer to Part II Item 7 in the 2023 Annual Report on Form 10-K.
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.
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, Blue Arc, Battle Motors, IC Bus or Blue Bird.
Additionally, during 2023, we paid cash dividends of $50.6 million and used $211.8 million to repurchase shares of Rush Class A common stock and Rush Class B common stock.
Additionally, during 2024, we paid cash dividends of $50.6 million and used $211.8 million to repurchase shares of Rush Class A common stock and Rush Class B common stock.
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.
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 2.10%, 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.
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.
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, 2024.
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.
For 2025, we expect overall gross margins from new medium-duty commercial vehicle sales of approximately 8.0% to 10.0%, but this will largely depend upon the mix of purchasers and types of vehicles sold. Gross margins on used commercial vehicle sales increased to 18.9% in 2024, from 12.4% in 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.
We expect to purchase or lease commercial vehicles worth approximately $200.0 million to $250.0 million for our leasing operations during 2025, 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 2025.
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.
We utilize our excess cash on hand to pay down our outstanding borrowings under the BMO Floor Plan Credit Agreement, and the resulting interest earned is recognized as an offset to our gross interest expense under the BMO Floor Plan Credit Agreement. On May 31, 2022, RTC Canada entered into the RTC Canada Revolving Credit Agreement with BMO.
From time to time, we utilize our excess cash on hand to pay down our outstanding borrowings under our various credit agreements. The resulting interest earned on the Floor Plan Credit Agreement is recognized as an offset to our interest expense.
From time to time, we utilize our excess cash on hand to pay down our outstanding borrowings under our various credit agreements. The resulting interest earned is recognized as an offset to our interest expense.
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.
We provided for taxes at a 23.3% effective rate in 2024 and 24.7% in 2023. We expect our effective tax rate to be approximately 23.0% to 25.0% of pretax income in 2025.
Inline XBRL Viewer (sec.gov) Liquidity and Capital Resources Our short-term cash requirements are primarily for working capital, inventory financing, the renovation and expansion of existing facilities and the construction or purchase of new facilities. Historically, these cash requirements have been met through the retention of profits, borrowings under our floor plan arrangements and bank financings.
Inline XBRL Viewer (sec.gov) Liquidity and Capital Resources Our short-term cash requirements are primarily for working capital, inventory financing, the renovation and expansion of existing facilities and the construction or purchase of new facilities. Historically, these cash requirements have been met through the retention of profits and borrowings under our floor plan arrangements and other credit agreements.
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%.
We expect blended gross margins on Aftermarket Products and Services operations to range from 35.0% to 38.0% in 2025. Gross margins on new Class 8 truck sales decreased to 8.9% in 2024, from 9.7% in 2023. In 2025, we expect overall gross margins from new heavy-duty truck sales of approximately 8.5% to 9.5%.
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.
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 $25.0 million.
Research, total U.S. retail sales of new Class 8 trucks in the last ten years have ranged from a low of approximately 187,600 in 2013 to a high of approximately 281,440 in 2019. Class 8 trucks are defined by the American Automobile Association as trucks with a minimum gross vehicle weight rating above 33,000 pounds.
Research, total U.S. retail sales of new Class 8 trucks in the last ten years have ranged from a low of approximately 195,687 in 2020 to a high of approximately 281,440 in 2019. Class 8 trucks are defined by the American Automobile Association as trucks with a minimum gross vehicle weight rating above 33,000 pounds.
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.
Research currently forecasts sales of new Class 8 trucks in the U.S. to be approximately 291,100 in 2026. 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.
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.
As of December 31, 2024, we were in compliance with all debt covenants related to debt secured by lease and rental units, the BMO Floor Plan Credit Agreement and the WF Credit Agreement. We do not anticipate any breach of the covenants in the foreseeable future.
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.
The increase in our Class 4 through 7 commercial vehicle sales in 2024 was primarily a result of strong demand and increased production of commercial vehicles from the manufacturers we represent. We sold 2,105 new light-duty vehicles in 2024, a 13.9% increase compared to 1,848 new light-duty vehicles in 2023.
We offer an integrated approach to meeting customer needs by providing service, parts and collision repair (collectively, “Aftermarket Products and Services”) in addition to new and used commercial vehicle sales and leasing, insurance and financial services, vehicle upfitting, CNG fuel systems and vehicle telematics products.
We offer an integrated approach to meeting customer needs by providing service, parts and collision repair (collectively, “Aftermarket Products and Services”) in addition to new and used commercial vehicle sales, leasing, insurance and financial services, vehicle upfitting, CNG fuel systems through our joint venture with Cummins and vehicle telematics products.
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.
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 132.2% absorption ratio for the year ended December 31, 2024, and 135.3% absorption ratio for the year ended December 31, 2023.
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.
Gross margins on new Class 4 through 7 commercial vehicle sales increased to 9.2% in 2024, from 9.0% in 2023. This increase was primarily due to the mix of purchasers during 2024.
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.
The BMO Floor Plan Credit Agreement 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.
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.
During the fourth quarter of 2024, we paid a cash dividend of $14.3 million. Additionally, on February 17, 2025, our Board of Directors declared a cash dividend of $0.18 per share of Class A and Class B common stock, to be paid on March 18, 2025, to all shareholders of record as of March 3, 2025.
The total dividend disbursement is estimated to be approximately $13.2 million. We expect to continue paying cash dividends on a quarterly basis.
The total dividend disbursement is estimated to be approximately $14.3 million. We expect to continue paying cash dividends on a quarterly basis.
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.
As of December 31, 2024, we had repurchased $6.5 million of our shares of common stock under the current stock repurchase program. The current stock repurchase program expires on December 31, 2025, and may be suspended or discontinued at any time.
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.
Aftermarket Products and Services accounted for 60.4% of our total gross profits in 2024. Stock Split On July 25, 2023, the Board 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.
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.
In 2024, we achieved a 5.3% share of the Class 4 through 7 commercial vehicle market in the U.S., compared to 5.1% in 2023. Our share of the Canada medium-duty commercial vehicles market was approximately 3.1% in 2024.
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.
We expect our U.S. market share of new Class 8 truck sales to range between 5.8% and 6.3% in 2025. This market share percentage would result in the sale of 14,500 to 16,000 new Class 8 trucks in 2025. We expect to sell approximately 500 additional new Class 8 trucks in Canada in 2025. According to A.C.T. Research, new U.
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.
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. On September 14, 2021, we entered into the WF Credit Agreement with the WF lenders and the WF Agent.
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, 2024, we had working capital of approximately $736.1 million, including $228.1 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.
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.
This decrease is primarily related to a decrease in rental utilization rates. We expect gross margins from lease and rental sales of approximately 27.0% to 29.0% during 2025. Our policy is to depreciate our lease and rental fleet using a straight-line method over each customer’s contractual lease term.
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.
There were no advances outstanding under this secured line of credit as of December 31, 2024, however, $18.8 million was pledged to secure various letters of credit related to self-insurance products, leaving $6.2 million available for future borrowings as of December 31, 2024.
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.
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 31,2024. See Note 15 of the Notes to Consolidated Financial Statements for a detailed discussion of the business acquisitions.
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.
Gross profit as a percentage of sales decreased to 19.6% in 2024, from 20.1% in 2023. ● Our new Class 8 heavy-duty unit sales decreased 11.4%, compared to 2023, which accounted for 6.1% of the total U.S. market and 1.7% of the total Canadian market. ● Our new Class 4 through 7 medium-duty unit sales increased 5.1%, compared to 2023, including buses, which accounted for 5.3% of the total U.S. market and 3.1% of the total Canadian market. ● New light-duty truck unit sales increased 13.9% in 2024, compared to 2023. ● Used truck unit sales decreased 0.1% in 2024, compared to 2023. 27 Table of Contents ● Aftermarket Products and Services revenues decreased $46.1 million, or 1.8% to $2,516.0 million, compared to $2,562.1 million in 2023. ● Lease and rental revenues increased $1.2 million, or 0.3%, to $354.9 million, compared to 2023. ● Selling, General and Administrative (“SG&A”) expenses decreased $26.1 million, or 2.6%, to $995.6 million, compared to $1,021.7 million in 2023. ● Net interest expense increased $17.9 million, or 33.9%, in 2024, compared to 2023. 2025 Outlook According to A.C.T.
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.
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 2024, our financing activities resulted in net cash used in financing of $129.3 million.
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.
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 252,000 new Class 8 trucks will be sold in the United States in 2025, compared to approximately 247,337 new Class 8 trucks sold in 2024. A.C.T.
The cash outflows consisted primarily of $1,099.2 million used for principal repayments of long-term debt and capital lease obligations during 2022 and $8.7 million for taxes paid related to net share settlement of equity awards.
The cash outflows consisted primarily of $1,846.8 million used for principal repayments of long-term debt and finance lease obligations and $10.1 million for taxes paid related to net share settlement of equity awards.
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.
Other revenues decreased $3.9 million, or 14.5% in 2024, compared to 2023. 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 decreased $61.7 million, or 3.9%, compared to 2023.
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.
Capital expenditures totaled $368.9 million during 2024 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.
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.
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 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.
We sold 15,465 new Class 8 trucks in 2024, a 11.4% decrease compared to 17,457 new heavy-duty trucks in 2023. Our share of the new U.S. Class 8 commercial vehicle sales market decreased to approximately 6.1% in 2024, from 6.2% in 2023. Our share of the new Canada Class 8 truck market was approximately 1.7% in 2024.
Pursuant to the terms of the PLC Agreement, PLC agreed to make up to $300.0 million of revolving credit loans to finance certain of our capital expenditures, including commercial vehicle purchases and other equipment to be leased or rented through our PacLease franchises.
Pursuant to the terms of the PLC Agreement, as amended by that certain amendment entered into on December 16, 2024, PLC agreed to make up to $500.0 million of revolving credit loans to finance certain of our capital expenditures, including commercial vehicle purchases and other equipment to be leased or rented through our PacLease franchises.
The average daily outstanding borrowings under the Floor Plan Credit Agreement were $870.1 million during the twelve months ended December 31, 2023.
The average daily outstanding borrowings under the BMO Floor Plan Credit Agreement were $956.4 million during the twelve months ended December 31, 2024.
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.
Gross profits from parts sales represented 58.0% of total gross profit for Aftermarket Products and Services operations in 2024 and 59.5% in 2023. Service and collision center operations represented 42.0% of total gross profit for Aftermarket Products and Services operations in 2024 and 40.5% 2023.
Additionally, during 2022, we paid cash dividends of $44.6 million and used $93.7 million to repurchase shares of Rush Class A common stock and Rush Class B common stock.
Additionally, during 2024, we paid cash dividends of $55.5 million and used $15.7 million to repurchase shares of Rush Class A common stock and Rush 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, 2023, we had approximately $984.4 million outstanding under the Floor Plan Credit Agreement.
The BMO Floor Plan Credit Agreement expires December 31, 2029, although BMO Bank N.A. 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, 2024, we had approximately $389.3 million outstanding under the BMO Floor Plan Credit Agreement.
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.
Aftermarket Products and Services revenues, a higher margin revenue item, decreased slightly as a percentage of total revenues to 32.2% in 2024, from 32.3% in 2023. 32 Table of Contents Gross margins from our Aftermarket Products and Services operations decreased to 36.7% in 2024, from 37.2% in 2023.
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.
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 252,000 truck units in 2025, a 1.9% increase compared to 247,337 units sold in 2024.
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.
These cash outflows were partially offset by $54.3 million from net draws on floor plan notes payable (non-trade), borrowings of $1,844.5 million of long-term debt and $25.4 million from the issuance of shares related to equity compensation plans. During 2024, our financing activities resulted in net cash received in financing of $74.0 million.
Summary of 2023 Our results of operations for the year ended December 31, 2023 are summarized below as follows: ● Our gross revenues totaled $7,925.0 million, a 11.6% increase from gross revenues of $7,101.7 million in 2022. ● Gross profit increased $105.9 million, or 7.1%, compared to 2022.
Summary of 2024 Our results of operations for the year ended December 31, 2024, are summarized below as follows: ● Our gross revenues totaled $7,804.7 million, a 1.5% decrease from gross revenues of $7,925.0 million in 2023. ● Gross profit decreased $61.7 million, or 3.9%, compared to 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.
S. Class 4 through 7 commercial vehicle retail sales are estimated to total 266,300 units in 2025, a 5.7% increase compared to 251,895 units sold in 2024. We expect our U.S. market share of new Class 4 through 7 commercial vehicle sales to range between 5.4% and 5.8% in 2025.
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.
This increase was primarily due to the successful execution of our used commercial vehicle sales strategy. We expect margins on used commercial vehicles to range between 13.0% and 18.0% in 2025. Gross margins from commercial vehicle lease and rental sales decreased to 28.0% in 2024, from 29.9% in 2023.
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.
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. Tax authorities periodically audit our income tax returns. These audits include questions regarding our tax filing positions, including the timing and amount of deductions.
During 2023, most of our sales were to larger fleets, which usually arrange their own financing and insurance. We are more likely to provide financing to owner-operators and smaller fleets, which comprised a smaller percentage of commercial vehicle sales during 2023. Finance and insurance revenues have limited direct costs and, therefore, contribute a disproportionate share of our operating profits.
This decrease is primarily due to the mix of purchasers of commercial vehicles. We are more likely provide financing to owner-operators and smaller fleets, which comprised a smaller percentage of commercial vehicle sales during 2024. Finance and insurance revenues have limited direct costs and, therefore, contribute a disproportionate share of our operating profits.
Included in the net change in operating assets and liabilities were primarily the result of $31.4 million from the increase in accounts payable, $34.1 million from the increase in customer deposits and $32.8 million from the increase in accrued liabilities which were offset primarily by cash outflows of $74.6 million from an increase in accounts receivable and $324.5 million from an increase in inventory.
Net change in operating assets and liabilities were primarily the result of $34.8 million from the decrease in customer deposits and $12.2 million from the decrease in accrued liabilities, which were offset primarily by cash outflows of $91.7 million from an increase in accounts receivable, $81.9 million from the decrease in accounts payable and $85.1 million from an increase in inventory.
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.
For 2025, we expect the selling portion of SG&A expenses to be 25.0% to 30.0% of new and used commercial vehicle gross profit. Depreciation and Amortization Expense Depreciation and amortization expense increased $8.7 million, or 14.6%, in 2024, compared to 2023. Interest Expense, Net Net interest expense increased $17.9 million, or 33.9%, in 2024, compared to 2023.
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.
Income before Income Taxes Income before income taxes decreased $64.2 million, or 13.9%, in 2024, compared to 2023, as a result of the factors described above. 33 Table of Contents Income Taxes Income tax expense decreased $21.2 million, or 18.6%, in 2024, compared to 2023, as a result of the factors described above.
Effective June 1, 2023, advances required to be made in USD dollars under the RTC Canada Floor Plan Agreement bear interest per annum, payable monthly, at Term SOFR, plus 1.20%. The RTC Canada Floor Plan Agreement expires September 14, 2026. On December 31, 2023, we had approximately $55.9 million CAD outstanding under the RTC Canada Floor Plan Agreement.
Advances required to be made in CAD dollars under the RTC Canada Floor Plan Credit Agreement bear interest per annum, payable monthly, at CORRA, plus 1.27%. Advances required to be made in USD dollars bear interest per annum, payable monthly, at SOFR (as defined in the agreement), plus 1.20%. The RTC Canada Floor Plan Credit Agreement expires September 14, 2026.
The PLC Agreement expires on December 1, 2025, although either party has the right to terminate the PLC Agreement at any time upon 180 days written notice. On December 31, 2023, we had approximately $265.0 million outstanding under the PLC Agreement.
The PFC Floor Plan Credit Agreement expires December 16, 2029, although either party has the right to terminate the PFC Floor Plan Credit Agreement at any time upon 360 days written notice. On December 31, 2024, we had approximately $492.7 million outstanding under the PFC Floor Plan Credit Agreement.
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.
We utilize our excess cash on hand to pay down our outstanding borrowings under the PFC Floor Plan Credit Agreement, and the resulting interest earned is recognized as an offset to our gross interest expense under the PFC Floor Plan Credit Agreement.
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.
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. For 2025, we expect SG&A expenses as a percentage of total revenues to range from 11.5% to 13.5%.
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.
On December 31, 2024, we had approximately $153.4 million outstanding under the WF Credit Agreement. On November 1, 2023, we entered into the PLC Agreement with PACCAR Leasing Company, a division of PFC.
Finance and insurance revenues and other revenues, as described above, have limited direct costs and, therefore, contribute a disproportionate share of gross profit. 38 Table of Contents Selling, General and Administrative Expenses SG&A expenses increased $93.9 million, or 10.1%, in 2023, compared to 2022.
Finance and insurance revenues and other revenues, as described above, have limited direct costs and, therefore, contribute a disproportionate share of gross profit. Selling, General and Administrative Expenses SG&A expenses decreased $26.1 million, or 2.6%, in 2024, compared to 2023. This decrease primarily resulted from company initiatives to reduce operating expenses.
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.
This market share percentage would result in the sale of 14,500 to 15,500 new Class 4 through 7 commercial vehicles in 2025. We expect to sell approximately 550 additional new Class 5 through 7 commercial vehicles in Canada in 2025. We expect to sell approximately 2,200 to 2,700 light-duty vehicles and 7,000 to 8,000 used commercial vehicles in 2025.
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.
Borrowings under the RTC Canada Revolving Credit Agreement bear interest per annum payable monthly at CORRA, plus 1.72%. The RTC Canada Revolving Credit Agreement expires September 14, 2026. On December 31, 2024, we had approximately $50.4 million CAD outstanding under the RTC Canada Revolving Credit Agreement.
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.
Cash Flows The following table summarizes our cash flows for the periods indicated (in thousands): Year Ended December 31, 2024 2023 2022 Net cash provided by (used in): Operating activities $ 619,550 $ 295,713 $ 294,400 Investing activities (445,578 ) (387,030 ) (240,930 ) Financing activities (129,321 ) 73,962 (690 ) Effect of exchange rate changes on cash (246 ) 36 118 Net (decrease) increase in cash $ 44,651 $ (17,319 ) $ 52,898 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.
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.
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 2023. We expect net interest expense in 2025 to decrease compared to 2024 due to decreased commercial vehicle inventory levels and lower interest rates.
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.
Borrowings under the BMO Floor Plan Credit Agreement bear interest per annum, payable monthly, at (A) the greater of (i) zero and (ii) Term SOFR (as defined in the agreement), plus (B) 1.20%.
This increase in commercial vehicle lease and rental revenues was primarily a result of strong demand for lease commercial vehicles. Finance and insurance revenues decreased $5.5 million, or 18.4%, in 2023, compared to 2022. This decrease is primarily due to the mix of purchasers of commercial vehicles.
Commercial vehicle lease and rental revenues increased $1.2 million, or 0.3%, in 2024, compared to 2023. This increase in commercial vehicle lease and rental revenues was primarily a result of steady demand for lease commercial vehicles, which was partially offset by decreased rental utilization. Finance and insurance revenues decreased $2.3 million, or 9.4%, in 2024, compared to 2023.
However, there is no assurance as to future dividends because the declaration and payment of such dividends is subject to the business judgment of our Board of Directors and will depend on historic and projected earnings, capital requirements, covenant compliance and financial conditions and such other factors as our Board of Directors deem relevant.
However, there is no assurance as to future dividends because the declaration and payment of such dividends is subject to the business judgment of our Board and will depend on historic and projected earnings, capital requirements, covenant compliance and financial conditions and such other factors as our Board deems relevant. 34 Table of Contents On December 2, 2024, we announced that our Board 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.

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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 changeOur 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.
Biggest changeThe PFC Floor Plan Credit Agreement and the PLC Agreement are both based on the prime rate. The BMO Floor Plan Credit Agreement and the WF Credit Agreement are both based on SOFR. The RTC Canada Revolving Credit Agreement and RTC Canada Floor Plan Credit Agreement are both based on CORRA.
We are exposed to market risk through interest rates related to our floor plan financing agreements, the WF Credit Agreement, the PLC Agreement, the RTC Canada Revolving Credit Agreement and discount rates related to finance sales.
We are exposed to market risk through interest rates related to the PFC Floor Plan Credit Agreement, the BMO Floor Plan Credit Agreement, the WF Credit Agreement, the PLC Agreement, the RTC Canada Revolving Credit Agreement, the RTC Canada Floor Plan Credit Agreement and discount rates related to finance sales.
As 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
As of December 31, 2024, we had outstanding floor plan borrowings and lease and rental fleet borrowings in the aggregate amount of $1,344.8 million. Assuming an increase or decrease in the prime rate, SOFR or CORRA of 100 basis points, annual interest expense could correspondingly increase or decrease by approximately $13.4 million. 38 Table of Contents

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