Profile: Rush Enterprises, Inc. (RUSHA.O)

Rush Enterprises, Inc. (Rush), incorporated in 1965, is a full-service, integrated retailer of transportation and construction equipment, and related services. The Company operates through two business segments: the Truck Segment and the Construction Equipment Segment. The Truck segment operates a regional network of Rush Truck Centers. Rush Truck Centers sell trucks manufactured by Peterbilt, Volvo, GMC, Hino, UD, Ford or Isuzu. Through its network of Rush Truck Centers, the Company provides one-stop service for the needs of its customers, including retail sales of new and used trucks, aftermarket parts sales, service and repair facilities, financing, leasing and rental, and insurance products. The Construction Equipment segment operates John Deere equipment centers in Southeast Texas. Construction equipment dealership operations include the retail sale of new and used construction equipment, aftermarket parts and service facilities, equipment rentals, and the financing of new and used equipment.

In June 2008, the Company acquired certain assets of Capital Bus Sales and Service of Texas, Inc., which included a Blue Bird bus franchise for the majority of Texas. In May 2008, it acquired certain assets of Peterbilt Carolina, Inc., which included a Peterbilt, Hino and Isuzu heavy and medium-duty truck dealership in Charlotte, North Carolina. In May 2008, the Company also acquired the common stock of Adams International Trucks, Inc., an international heavy and medium-duty truck and Workhorse Custom Chassis dealership in Charlotte, North Carolina.

Rush Truck Centers

The Company’s Rush Truck Centers are located in Alabama, Arizona, California, Colorado, Florida, Georgia, New Mexico, North Carolina, Oklahoma, Tennessee and Texas. Its Rush Truck Centers are responsible for sales of new and used heavy and medium-duty trucks, as well as related parts and services. New heavy-duty truck sales represent the largest portion of the Company’s revenue, accounting for approximately 40.2% of its total revenues during the year ended December 31, 2008. New Class 8 heavy-duty Peterbilt truck sales accounted for approximately 73.6% of its new truck revenues for 2008. The Rush Truck Centers that sell new and used Class 8 heavy-duty trucks also sell Class 6 and Class 7 medium-duty Peterbilt trucks. Certain Rush Truck Centers also sell medium-duty trucks manufactured by GMC, Hino, Isuzu, Ford or UD and buses manufactured by Blue Bird. New medium-duty truck sales, excluding new bus sales, accounted for approximately 12.2% of its total revenues for 2008, and 22.7% of its new truck revenues for 2008. The Company’s customers use heavy and medium-duty trucks to haul various materials, including general freight, petroleum, wood products, refuse and construction materials.

Used truck sales accounted for approximately 9.1% of the Company’s total revenues in 2008. It sells used heavy and medium-duty trucks at most of its Rush Truck Centers. Truck-related parts and service revenues accounted for approximately 27.6% of its total revenues for 2008. Most Rush Truck Centers carry a variety of Peterbilt and other truck parts in its inventory. Certain Rush Truck Centers also feature service and body shop facilities, the combination and configuration of which varies by location, capable of handling a range of truck repairs on most makes and classes of trucks. Each Rush Truck Center is a warranty service center for the truck manufacturers represented at that location and most are also authorized service centers for other manufacturers, including Caterpillar, Cummins, Eaton and Arvin Meritor. The Company has more than 900 service and body shop bays, including 23 paint booths, throughout its Rush Truck Center network. It performs both warranty and non-warranty service work on heavy and medium-duty trucks and components.

Truck leasing and rental revenues accounted for approximately 3.3% of the Company’s total revenues in 2008. At its Rush Truck Leasing locations, the Company engages in full-service truck leasing under the PacLease trade name at 11 locations. During 2008, it acquired an Idealease franchise in Charlotte, North Carolina. It had 2,570 units in its lease and rental fleet as of December 31, 2008. As of December 31, 2008, the Company owned approximately 83% of its lease and rental fleet, and leased the remaining trucks in its fleet primarily from PACCAR Leasing Company (PACCAR Leasing).

Rush Equipment Center

The Company’s Rush Equipment Centers are responsible for sales of new and used construction equipment and related parts and service. New construction equipment sales accounted for approximately 3.6% of its total revenues for 2008. Its Rush Equipment Centers carry a line of John Deere construction equipment. The Company carries a line of complementary construction equipment manufactured by other suppliers to enhance its John Deere product line. Rush sells construction equipment to a diverse customer base, including residential and commercial construction contractors, utility companies, government agencies, and various petrochemical, industrial and material supply businesses. Used construction equipment sales accounted for approximately 0.2% of its total revenues in 2008. It sells used construction equipment manufactured by several manufacturers, including John Deere, Case, Caterpillar, and Komatsu. Its used construction equipment inventory is derived from trade-ins from its construction equipment customers and purchases from third parties.

Construction equipment-related parts and service revenues accounted for approximately 1.3% of the Company’s total revenues in 2008. Its Rush Equipment Centers carry a variety of John Deere and other parts in its inventory, which consists of over 7,000 items from more than 15 suppliers. The Company is an authorized John Deere construction equipment parts and accessories supplier in the Houston, Texas area.

Financial and Insurance Products

The Company sells, as agent, a line of property and casualty insurance to its truck customers and other truck owners. Its agency is licensed to sell truck liability, general liability, collision and comprehensive, workers’ compensation, cargo, credit life and occupational accident insurance coverage. The Company serves as sales representatives for a number of insurance companies, including the Great American Insurance Companies, Hartford Insurance Group and American General Financial Group. The Company arranged customer financing through various commercial lending sources for approximately 30% of its new and used truck sales in 2008. The Company arranged customer financing through various commercial lending sources for approximately $32.7 million of its new and used construction equipment sales in 2008.

The Company competes with Navistar, Mack, Freightliner, Kenworth, Volvo, Western Star Truck Holdings, Ltd., PACCAR, Case, Caterpillar and Komatsu.