What changed in this filing

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Item 1. Financial Statements

2025-08-08 compared with 2025-05-09 · 301 added, 171 removed, 533 unchanged (47% of the section changed)

7 unchanged sentences

Accounts receivable, net

Note receivable, affiliate

Notes receivable from affiliate

Inventories, net

8 unchanged sentences

Floor plan notes payable

Current maturities of long-term debt

Current maturities of finance lease obligations

22 unchanged sentences

Retained earnings

Accumulated other comprehensive income (loss)

Accumulated other comprehensive income

Total Rush Enterprises, Inc.

9 unchanged sentences

Three Months Ended

Six Months Ended

New and used commercial vehicle sales

10 unchanged sentences

Depreciation and amortization expense

Gain on sale of assets

Gain (loss) on sale of assets

Operating income

Other income (loss), net

Other (expense) income

Interest expense, net

1 unchanged sentence

Income tax provision

Net income (loss) attributable to noncontrolling interest

Net income attributable to noncontrolling interest

Net income attributable to Rush Enterprises, Inc.

6 unchanged sentences

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands)

Three Months Ended

Six Months Ended

June 30, 2025

June 30, 2024

June 30, 2025

June 30, 2024

Other comprehensive income (loss), net of tax:

2 unchanged sentences

Comprehensive income

Comprehensive income (loss) attributable to noncontrolling interest

Comprehensive income attributable to noncontrolling interest

Comprehensive income attributable to Rush Enterprises, Inc.

5 unchanged sentences

Comprehensive

Enterprises, Inc.

Rush Enterprises,

Shareholders’

11 unchanged sentences

Balance, March 31, 2025

Stock options exercised and stock awards

Stock-based compensation related to stock options, restricted shares and employee stock purchase plan

Vesting of restricted share awards

Issuance of common stock under employee stock purchase plan

Common stock repurchases

Cash dividends declared on Class A common stock

Cash dividends declared on Class B common stock

Foreign currency translation adjustment

Balance, June 30, 2025

Comprehensive

Enterprises, Inc.

Rush Enterprises,

Shareholders’

11 unchanged sentences

Balance, March 31, 2024

Stock options exercised and stock awards

Stock-based compensation related to stock options, restricted shares and employee stock purchase plan

Vesting of restricted share awards

Issuance of common stock under employee stock purchase plan

Common stock repurchases

Cash dividends declared on Class A common stock

Cash dividends declared on Class B common stock

Foreign currency translation adjustment

Balance, June 30, 2024

The accompanying notes are an integral part of these consolidated financial statements.

3 unchanged sentences

(In Thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities:

1 unchanged sentence

Depreciation and amortization

Gain on sale of property and equipment

Stock-based compensation expense related to employee stock options and employee stock purchases

Provision for deferred income tax expense

Change in accounts receivable, net

Gain on sale of property and equipment, net

Stock-based compensation expense related to employee equity awards and employee stock purchases

Deferred income tax expense

Change in accounts and notes receivable, net

Change in inventories, net

3 unchanged sentences

Change in accrued expenses

Net cash provided by (used in) operating activities

Net cash provided by operating activities

Cash flows from investing activities:

2 unchanged sentences

Change in notes receivable from affiliate

Business acquisition, net of cash acquired

Net cash used in investing activities

4 unchanged sentences

Principal payments on finance lease obligations

Proceeds from issuance of shares related to employee stock options and employee stock purchases

Proceeds from issuance of shares relating to equity awards and employee stock purchases

Taxes paid related to net share settlement of equity awards

1 unchanged sentence

Common stock repurchased

Net cash provided by (used in) financing activities

Net (decrease) increase in cash, cash equivalents and restricted cash

Net cash provided by financing activities

Net decrease in cash, cash equivalents and restricted cash

Effect of exchange rate on cash

4 unchanged sentences

Income taxes, net of refunds

Noncash investing and financing activities:

Noncash activities:

Assets acquired under finance leases

12 unchanged sentences

Restricted Cash

Restricted cash consists of deposits for the statutory restriction on cash related to the Company’s captive insurance company of $ 5.1 million as of March 31, 2025.

Restricted cash consists of deposits for the statutory restriction on cash related to the Company’s captive insurance company of $ 5.1 million as of June 30, 2025.

Foreign Currency Transactions

7 unchanged sentences

However, an uninsured or partially insured claim, or claim for which indemnification is not available, could have a material adverse effect on the Company’s financial condition or results of operations.

As of March 31, 2025, the Company believes that there are no pending claims or litigation, individually or in the aggregate, that are reasonably likely to have a material adverse effect on its financial position or results of operations.

As of June 30, 2025, the Company believes that there are no pending claims or litigation, individually or in the aggregate, that are reasonably likely to have a material adverse effect on its financial position or results of operations.

However, 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 the Company’s financial condition or results of operations for the fiscal period in which such resolution occurred.

3 – Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share information):

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts):

Three Months Ended

Six Months Ended

Numerator for basic and diluted earnings per share – Net income available to common shareholders

Denominator for basic earnings per share – weighted average shares outstanding

Effect of dilutive securities– Employee and director stock options and restricted share awards

Effect of dilutive securities– Employee stock options and restricted stock awards

Denominator for diluted earnings per share – adjusted weighted average shares outstanding and assumed conversions

1 unchanged sentence

Diluted earnings per common share and common share equivalents

Options to purchase shares of common stock that were outstanding for the three months ended March 31, 2025 and 2024 that were not included in the computation of diluted earnings per share because the effect would have been anti-dilutive are as follows (in thousands):

Options to purchase shares of common stock that were outstanding for the three months and six months ended June 30, 2025, and 2024, that were not included in the computation of diluted earnings per share because the effect would have been anti-dilutive, are as follows (in thousands):

Three Months Ended

Weighted average anti-dilutive options

Six Months Ended

Weighted average anti-dilutive stock options

4 – Stock Options and Restricted Stock Awards

1 unchanged sentence

The Company accounts for stock-based compensation in accordance with Accounting Standards Codification (“ASC”) 718-10, Compensation – Stock Compensation, which requires the measurement and recognition of compensation expense for all share-based payment awards made to the Company’s employees and directors, including employee stock options, restricted stock awards and employee stock purchases related to the Employee Stock Purchase Plan, based on estimated fair values.

Stock-based compensation expense, calculated using the Black-Scholes option-pricing model for employee stock options, and included in selling, general and administrative expense, was $ 13.7 million for the three months ended March 31, 2025, and $ 14.1 million for the three months ended March 31, 2024.

As of March 31, 2025, the Company had $ 19.7 million of unrecognized compensation expense related to non-vested employee stock options to be recognized over a weighted-average period of 2.5 years and $ 25.0 million of unrecognized compensation cost related to non-vested restricted stock awards to be recognized over a weighted-average period of 1.5 years.

Stock-based compensation expense, calculated using the Black-Scholes option-pricing model for employee stock options and grant price for restricted stock awards and included in selling, general and administrative expense, was $ 7.2 million for the three months ended June 30, 2025, and $ 5.5 million for the three months ended June 30, 2024.

Stock-based compensation expense, included in selling, general and administrative expense, was $ 22.0 million for the six months ended June 30, 2025, and was $ 19.6 million for the six months ended June 30, 2024.

As of June 30, 2025, the Company had $ 17.1 million of unrecognized compensation cost related to non-vested employee stock options to be recognized over a weighted-average period of 2.4 years and $ 20.1 million of unrecognized compensation cost related to non-vested restricted stock awards to be recognized over a weighted-average period of 1.4 years.

5 – Financial Instruments and Fair Value

2 unchanged sentences

The carrying values of the Company’s financial instruments approximate fair value due either to their short-term nature or existence of variable interest rates, which approximate market rates.

Certain methods and assumptions were used by the Company in estimating the fair value of financial instruments as of March 31, 2025, and December 31, 2024.

Certain methods and assumptions were used by the Company in estimating the fair value of financial instruments as of June 30, 2025, and December 31, 2024.

The carrying value of current assets and current liabilities approximates the fair value due to the short maturity of these items.

The fair value of the Company’s long-term debt is based on secondary market indicators.

Because the Company’s debt is not quoted, estimates are based on each obligation’s characteristics, including remaining maturities, variable interest rate, credit rating, collateral and liquidity.

Under the fair value hierarchy established by ASC 820-10-35, the inputs used to determine the market value of the Company’s debt are classified as Level 2.

Because the Company’s debt is not quoted, estimates are based on each obligation’s characteristics, including remaining maturities, variable interest rates, credit rating, collateral and liquidity.

Accordingly, the Company concluded that the valuation measurement inputs of its long-term debt represent, at its lowest level, current market interest rates available to the Company for similar debt and the Company’s current credit standing.

17 unchanged sentences

The Company evaluates performance based on segment operating income, not including extraordinary items.

The following table contains summarized information about reportable segment revenues, segment income or loss from continuing operations and segment assets for the periods ended March 31, 2025 and 2024 (in thousands):

Truck Segment

As of and for the three months ended March 31, 2025

As of and for the three months ended June 30, 2025

Revenues from external customers

9 unchanged sentences

Depreciation and amortization

As of and for the three months ended March 31, 2024

As of and for the six months ended June 30, 2025

Revenues from external customers

9 unchanged sentences

Depreciation and amortization

As of and for the three months ended June 30, 2024

Revenues from external customers

Cost of products sold

Controllable expenses

Allocated expenses

Segment operating income (loss)

Interest income

Interest expense

Net income (loss)

Segment assets

Capital expenditures

Depreciation and amortization

As of and for the six months ended June 30, 2024

Revenues from external customers

Cost of products sold

Controllable expenses

Allocated expenses

Segment operating income (loss)

Interest income

Interest expense

Net income (loss)

Segment assets

Capital expenditures

Depreciation and amortization

7 – Income Taxes

The Company had unrecognized income tax benefits totaling $ 6.4 million as a component of accrued liabilities as of March 31, 2025 and December 31, 2024, the total of which, if recognized, would impact the Company’s effective tax rate.

The Company had unrecognized income tax benefits totaling $ 8.0 million as a component of accrued liabilities as of June 30, 2025 and December 31, 2024, the total of which, if recognized, would impact the Company’s effective tax rate.

An unfavorable settlement would require a charge to income tax expense and a favorable resolution would be recognized as a reduction to income tax expense.

The Company recognizes interest accrued related to unrecognized tax benefits in income tax expense.

The Company had approximately $ 530,000 accrued for the payment of interest as of March 31, 2025 and December 31, 2024.

The Company had approximately $ 0.5 million accrued for the payment of interest as of June 30, 2025 and December 31, 2024.

No amounts were accrued for penalties.

The Company does not anticipate a significant change in the amount of unrecognized tax benefits in the next 12 months.

As of December 31, 2024, the tax years ended December 31, 2020 through 2023 remained subject to audit by federal tax authorities and the tax years ended December 31, 2019 through 2023 , remained subject to audit by state tax authorities.

As of June 30, 2025, the tax years ended December 31, 2021 through 2024 remained subject to audit by federal tax authorities and the tax years ended December 31, 2020 through 2024 , remained subject to audit by state tax authorities.

The Company’s non-lease and rental revenues are primarily generated from the sale of finished products to customers.

Those sales predominantly contain a single delivery element and revenue from such sales is recognized when the customer obtains control, which is typically when the finished product is delivered to the customer.

Those sales predominantly contain a single delivery element and revenues from such sales are recognized when the customer obtains control, which is typically when the finished product is delivered to the customer.

The Company’s material revenue streams have been identified as the following:

the sale of new and used commercial vehicles, the arrangement of associated commercial vehicle financing and insurance contracts, the performance of commercial vehicle repair services and the sale of commercial vehicle parts.

the sale of new and used commercial vehicles, arrangement of associated commercial vehicle financing and insurance contracts, the performance of commercial vehicle repair services and the sale of commercial vehicle parts.

Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenues.

The following table summarizes the Company’s disaggregated revenue by revenue source, excluding lease and rental revenue, for the three months ended March 31, 2025 and 2024 (in thousands):

The following table summarizes the Company’s disaggregated revenue by revenue source, excluding lease and rental revenue, for the three months and six months ended June 30, 2025 and 2024 (in thousands):

Three Months Ended

New and used commercial vehicles

Commercial vehicle repair services

Six Months Ended

June 30, 2025

June 30, 2024

June 30, 2025

June 30, 2024

Commercial vehicle sales revenue

Parts revenue

Commercial vehicle repair service revenue

Finance revenue

Insurance revenue

Other revenue

All of the Company's performance obligations and associated revenues are generally transferred to customers at a point in time.

The Company did not have any material contract assets or contract liabilities on the balance sheet as of March 31, 2025.

Revenues related to commercial vehicle sales, parts sales, commercial vehicle repair service, finance and most other revenues are related to the Truck Segment.

The Company did not have any material contract assets or contract liabilities on the balance sheet as of June 30, 2025.

Revenues related to commercial vehicle sales, parts sales, commercial vehicle repair service, finance and the majority of other revenues are related to the Truck Segment.

Lease of Vehicles as Lessor

7 unchanged sentences

This policy results in the Company realizing reasonable gross margins while the unit is in service and a corresponding gain or loss on sale when the unit is sold at the end of the lease term.

Lease and rental income during the three months ended March 31, 2025 and March 31, 2024 consisted of the following (in thousands):

Lease and rental income during the three and six months ended June 30, 2025 and June 30, 2024 consisted of the following (in thousands):

Three Months Ended

Six Months Ended

June 30, 2025

June 30, 2024

June 30, 2025

June 30, 2024

Minimum rental payments

5 unchanged sentences

Balance as of March 31, 2025

Foreign currency translation adjustment

Balance as of June 30, 2025

The functional currency of the Company’s foreign subsidiary, RTC Canada, is its local currency.

Results of operations of RTC Canada are translated into USD using the average exchange rates monthly during the year.

Results of operations of RTC Canada are translated into USD using the monthly average exchange rates during the year.

The assets and liabilities of RTC Canada are translated into USD using the exchange rates in effect on the balance sheet date.

The related translation adjustments are recorded in a separate component of stockholders’ equity in Accumulated other comprehensive income (loss) and the statements of comprehensive income (loss).

The related translation adjustments are recorded in a separate component of stockholders' equity in accumulated other comprehensive income (loss) and the statement of comprehensive income.

11 – Accounts Receivable and Allowance for Credit Losses

9 unchanged sentences

Provision for

June 30, 2025

Commercial vehicle receivables

1 unchanged sentence

Leasing, parts and service receivables

12 – Acquisition

Other receivables

12 – Acquisitions

The following acquisitions, unless otherwise noted, were considered business combinations accounted for under ASC 805 “Business Combinations.” Pro forma information was not included in accordance with ASC 805 because the acquisitions were not considered material.

On July 15, 2024, we acquired certain assets of Nebraska Peterbilt, which included real estate and a Peterbilt commercial vehicle franchise in Grand Island and North Platte, Nebraska, along with commercial vehicle and parts inventory.

The transaction was valued at approximately $ 16.5 million, with the purchase price paid in cash.

On June 16, 2025, the Company acquired 100 % of the outstanding shares of Leeds Transit, Inc.

The acquisition included commercial vehicle dealership locations in Elgin and Woodstock Ontario and a sales office in St-Roch-de-l’Achigan, Quebec, IC Bus and Collins Bus franchises, along with commercial vehicle and parts inventory.

The transaction was valued at approximately $ 25.6 million, with the purchase price paid in cash and with borrowings made pursuant to the RTC Canada’s floor plan credit agreement.

13 – Subsequent Events

On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act ("OBBBA").

ASC 740, “Income Taxes,” requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted.

Consequently, due to the timing of enactment, the Company will evaluate all deferred tax balances under the newly enacted tax law and identify any other changes required to its financial statements as a result of the OBBBA.

The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions.

The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.

The Company is currently assessing the OBBA’s impact on its consolidated financial statements and the results of such evaluations will be reflected in the Company's future filings with the SEC.

Management ’ s Discussion and Analysis of Financial Condition and Results of Operations.

37 unchanged sentences

We own an 80% equity interest in Rush Truck Centres of Canada Limited (“RTC Canada”).

RTC Canada currently owns and operates 12 International dealership locations in Ontario.

RTC Canada currently owns and operates 12 International dealership and 2 IC Bus dealership locations in Ontario.

RTC Canada also sells IC Busses in Quebec and the Maritimes.

The operating results of RTC Canada are consolidated in the Consolidated Statements of Operations, the Statements of Comprehensive Income, the Consolidated Balance Sheets and commercial vehicle unit sales data.

5 unchanged sentences

Class 8 retail truck sales to be 221,400 units in 2025, which would represent a 10.5% decrease compared to 2024.

The challenges that have plagued the industry for some time, including the ongoing freight recession and general economic uncertainty, have been exacerbated by increasing concerns related to U.S.

trade policy, tariffs, and uncertainty concerning engine emissions regulations, causing many customers, particularly in the over-the-road segment, to delay vehicle purchases.

Consequently, new Class 8 truck sales demand has softened significantly.

The ongoing freight recession and general economic uncertainty in addition to uncertainty with respect to U.S.

trade policy and engine emission regulations, continues to weigh on the industry and impact demand for new commercial vehicles.

While we expect that new Class 8 truck sales to vocational customers will remain strong through the end of the year, we also expect continued weak demand from our over-the-road customer, our largest customer segment.

We expect our U.S.

5 unchanged sentences

Class 4 through 7 retail commercial vehicle sales, A.C.T.

Research currently forecasts sales to be 213,300 units in 2025, which would represent an 8.5% decrease compared to 2024.

We believe that most medium-duty customers will remain cautious in 2025 and will look to replace vehicles rather than expand their fleets.

Research currently forecasts sales to be 231,300 units in 2025, which would represent a 10.2% decrease compared to 2024.

We believe that demand for medium-duty commercial vehicle will remain solid, at least through the third quarter.

We expect our U.S.

4 unchanged sentences

We expect to sell approximately 2,500 light-duty vehicles and approximately 6,500 to 7,500 used commercial vehicles in 2025, and we expect lease and rental revenue to increase approximately 5.0% during 2025, compared to 2024.

With respect to our parts, service, and collision center (collectively referred to herein as “Aftermarket Products and Services”) operations, we expect that the same economic challenges that are negatively impacting new commercial vehicle sales will continue to negatively impact demand for Aftermarket Products and Services.

We believe that our Aftermarket Products and Services revenues will be flat to down 2% in 2025, compared to 2024.

With respect to our parts, service, and collision center (collectively referred to herein as “Aftermarket Products and Services”) operations, despite a difficult operating environment, we experienced a slight increase in demand during the second quarter from most of our customer segments, including owner-operators and small fleets, which we believe is a potential signal of improving demand ahead.

We believe that our Aftermarket Products and Services revenues will remain flat in the third quarter, with the potential for modest growth.

However, there is too much uncertainty to provide a reliable outlook for the remainder of the year, as potential changes in U.S.

trade policy may have a material impact – either positive or negative – on customer demand.

Critical Accounting Estimates

6 unchanged sentences

Results of Operations

The following discussion and analysis include our historical results of operations for the three months ended March 31, 2025, and 2024.

The following discussion and analysis includes our historical results of operations for the three months and six months periods ended June 30, 2025 and 2024.

The following table sets forth certain financial data as a percentage of total revenues for the periods indicated:

Three Months Ended

Six Months Ended

New and used commercial vehicle sales

6 unchanged sentences

Depreciation and amortization

Gain on sale of assets

Gain (loss) on sale of assets

Operating income

Interest expense, net

Interest (income) expense, net

Income before income taxes

4 unchanged sentences

Three Months Ended

Six Months Ended

Gross Profit:

1 unchanged sentence

Aftermarket products and services sales

Lease and rental

Lease and rental sales

Finance and insurance

Total gross profit

The following table sets forth the unit sales and revenues for new heavy-duty, new medium-duty, new light-duty and used commercial vehicles and our absorption ratio (revenue in millions):

The following table sets forth the unit sales and revenues for new heavy-duty, new medium-duty, new light-duty and used commercial vehicles and the absorption ratio (revenues in millions):

Three Months Ended

Six Months Ended

Vehicle unit sales:

4 unchanged sentences

Used vehicles

Vehicle revenues:

Vehicle revenue:

New heavy-duty vehicles

3 unchanged sentences

Used vehicle revenue

Other vehicle revenues:

Absorption ratio:

Other vehicle revenue (1)

Dealership absorption ratio:

(1) Includes sales of truck bodies, trailers and other new equipment.

4 unchanged sentences

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 128.6% absorption ratio for the first quarter of 2025, compared to a 130.1% absorption ratio for the first quarter of 2024.

Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024

Total revenues decreased $21.2 million, or 1.1%, in the first quarter of 2025, compared to the first quarter of 2024.

This decrease was primarily the result of decreased Aftermarket Products and Services revenue due to continued weak demand from over-the-road customers.

Our Aftermarket Products and Services revenues totaled $619.1 million in the first quarter of 2025, down 4.6% from the first quarter of 2024.

The decrease in Aftermarket Parts and Services revenues was related to the continued freight recession, in addition to 2025 having one less working day than 2024, the completion of certain customer service projects and campaigns in 2024 that did not occur in 2025 and a decrease in business related to winter storms in January of 2025.

Revenues from sales of new and used commercial vehicles increased $7.5 million, or 0.7%, in the first quarter of 2025, compared to the first quarter of 2024.

The slight increase in new commercial vehicle revenues was primarily the result of the mix of products sold.

We sold 3,222 new Class 8 trucks in the first quarter of 2025, a 7.8% decrease compared to 3,494 new Class 8 trucks sold in the first quarter of 2024.

The decrease in new Class 8 truck sales was primarily related to the ongoing freight recession, high interest rates and general economic uncertainty, as well as concerns related to tariffs and U.S.

trade policy.

Class 8 retail truck sales totaled 51,938 units in the first quarter of 2025, a decrease of 9.2% compared to the first quarter of 2024, according to ACT Research.

We sold 3,329 new Class 4 through 7 medium-duty commercial vehicles, including 310 buses, in the first quarter of 2025, a 0.1% decrease compared to 3,331 new medium-duty commercial vehicles, including 386 buses, in the first quarter of 2024.

Class 4 through 7 retail commercial vehicle sales totaled 52,897 units in the first quarter of 2025, up 0.3% compared to the first quarter of 2024, according to ACT Research.

We sold 470 light-duty vehicles in the first quarter of 2025, a 3.1% increase compared to 456 light-duty vehicles sold in the first quarter of 2024.

We sold 1,769 used commercial vehicles in the first quarter of 2025, a 2.7% decrease compared to 1,818 used commercial vehicles in the first quarter of 2024.

Commercial vehicle lease and rental revenues increased $2.3 million, or 2.7%, in the first quarter of 2025, compared to the first quarter of 2024.

The increase in commercial vehicle lease and rental revenues was primarily due to an increase in the delivery of new leased vehicles, which was partially offset by a slight decrease in rental utilization.

Finance and insurance revenues decreased $0.2 million, or 3.4%, in the first quarter of 2025, compared to the first quarter of 2024.

This decrease is primarily due to the mix of purchasers of commercial vehicles.

During the first quarter of 2025, most of our sales were to larger fleets, which usually arrange their own financing.

We are more likely to provide financing to owner-operators and smaller fleets, which comprised a smaller percentage of commercial vehicle sales during the first quarter of 2025.

Our commercial vehicle dealerships achieved a 135.5% absorption ratio for the second quarter of 2025 compared to a 134.0% absorption ratio for the second quarter of 2024.

Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024

Total revenues decreased $96.3 million, or 4.8%, in the second quarter of 2025, compared to the second quarter of 2024.

This decrease was primarily the result of decreased new Class 8 truck sales revenue due to continued weak demand from over-the-road customers.

Our Aftermarket Products and Services revenues increased $8.8 million, or 1.4%, in the second quarter of 2025, compared to the second quarter of 2024.

The increase in Aftermarket Parts and Services revenues was primarily a result of a slight increase in demand.

Revenues from sales of new and used commercial vehicles decreased $108.8 million, or 8.4%, in the second quarter of 2025, compared to the second quarter of 2024.

This decrease was primarily the result of decreased new Class 8 truck sales revenue due to the timing of several large fleet deliveries that occurred in the second quarter of 2024 and continued weak demand from over-the-road customers.

We sold 3,178 new Class 8 trucks in the second quarter of 2025 in the United States, a 20.3% decrease compared to 3,985 new Class 8 trucks in the second quarter of 2024.

We sold 81 new Class 8 heavy-duty trucks in the second quarter of 2025 in Canada, a 43.4% decrease compared to 143 new Class 8 heavy-duty trucks in the second quarter of 2024.

The decline in our new Class 8 truck sales on a year-over-year basis in the second quarter was largely due to the timing of several large fleet deliveries that occurred in the second quarter of 2024 and continued weak demand from our over-the-road customers.

We sold 3,626 new Class 4 through 7 commercial vehicles, including 359 buses, in the second quarter of 2025 in the United States, a 1.0% increase compared to 3,591 new medium-duty commercial vehicles, including 351 buses, in the second quarter of 2024.

We sold 177 Class 5 through 7 commercial vehicles in the second quarter of 2025 in Canada, a 77.0% increase compared to 100 new Class 5 through 7 commercial vehicles in the second quarter of 2024.

The slight increase in new Class 4 through 7 commercial vehicle sales in the United States was primarily a result of consistent demand and our ability to meet customer needs with our bodied-up inventory.

We sold 703 light-duty vehicles in the second quarter of 2025, a 30.9% increase compared to 537 light-duty vehicles sold in the second quarter of 2024.

We sold 1,715 used commercial vehicles in the second quarter of 2025, a 0.5% decrease compared to 1,723 used commercial vehicles sold in the second quarter of 2024.

Commercial vehicle lease and rental revenues increased $5.5 million, or 6.3%, in the second quarter of 2025, compared to the second quarter of 2024.

This increase in commercial vehicle lease and rental revenues was primarily due to the addition of new vehicles to our lease fleet and consistent demand from lease customers.

Finance and insurance revenues decreased $0.4 million, or 6.5%, in the second quarter of 2025, compared to the second quarter of 2024.

This decrease is primarily due to the decrease in new Class 8 truck sales and the tightening of credit for used trucks.

Finance and insurance revenues have limited direct costs and, therefore, contribute a disproportionate share of our operating profits.

Gross profit decreased $32.1 million, or 8.2%, in the first quarter of 2025, compared to the first quarter of 2024.

This decrease is primarily related to decreased demand for Aftermarket Products and Services due to the continued freight recession, high interest rate and general economic uncertainty related to tariffs and U.S Trade Policy.

Gross profit as a percentage of sales decreased to 19.3% in the first quarter of 2025, from 20.8% in the first quarter of 2024.

Gross margins from our Aftermarket Products and Services operations decreased to 35.8% in the first quarter of 2025, from 36.5% in the first quarter of 2024.

Gross profit for the Aftermarket Products and Services departments decreased to $221.3 million in the first quarter of 2025, from $236.9 million in the first quarter of 2024.

This decrease is primarily related to decreased demand due to difficult economic conditions impacting many of our customers.

Gross profit decreased $12.7 million, or 3.2%, in the second quarter of 2025, compared to the second quarter of 2024.

Gross profit as a percentage of sales increased to 19.7% in the second quarter of 2025, from 19.4% in the second quarter of 2024.

This increase in gross profit as a percentage of sales is a result of a change in our product sales mix.

Commercial vehicle sales, a lower margin revenue item, decreased as a percentage of total revenues to 61.7% in the second quarter of 2025, from 64.1% in the second quarter of 2024.

Aftermarket Products and Services revenues, a higher margin revenue item, increased as a percentage of total revenues to 33.0% in the second quarter of 2025, from 31.0% in the second quarter of 2024.

Gross margins from our Aftermarket Products and Services operations increased to 37.6% in the second quarter of 2025, from 37.5% in the second quarter of 2024.

Gross profit from our Aftermarket Products and Services operations increased to $239.2 million in the second quarter of 2025, from $235.3 million in the second quarter of 2024.

Historically, gross margins on parts sales range from 28% to 30% and gross margins on service and collision center operations range from 66% to 68%.

Gross profits from parts sales represented 58.3% of total gross profit for Aftermarket Products and Services operations in the first quarter of 2025 and 57.5% in the first quarter of 2024.

Service and collision center operations represented 41.7% of total gross profit for Aftermarket Products and Services operations in the first quarter of 2025 and 42.5% in the first quarter of 2024.

Gross profits from parts sales represented 61.3% of total gross profit from Aftermarket Products and Services operations in the second quarter of 2025 and 58.4% in the second quarter of 2024.

Service and collision center operations represented 38.7% of total gross profit from Aftermarket Products and Services operations in the second quarter of 2025 and 38.8% in the second quarter of 2024.

We expect blended gross margins on Aftermarket Products and Services operations to range from 36.0% to 37.5% in 2025.

Gross margins on new Class 8 truck sales decreased to 9.0% in the first quarter of 2025, from 9.7% in the first quarter of 2024.

Gross margins on new Class 8 commercial vehicle sales decreased to 8.5% in the second quarter of 2025, from 8.6% in the second quarter of 2024.

The decrease in new Class 8 truck margins was primarily due to continued weak demand from over-the-road customers and an uncertain regulatory environment.

In 2025, we expect overall gross margins from new heavy-duty truck sales of approximately 8.5% to 9.0%.

Gross margins on new Class 4 through 7 commercial vehicle sales decreased to 7.9% in the first quarter of 2025, from 9.3% in the first quarter of 2024.

This decrease was primarily due to the mix of purchasers during the first quarter of 2025.

Gross margins on new Class 4 through 7 commercial vehicle sales decreased to 7.5% in the second quarter of 2025, from 8.4% in the second quarter of 2024.

This decrease was primarily due to change in the mix of purchasers.

For 2025, we expect overall gross margins from new medium-duty commercial vehicle sales of approximately 7.5% to 8.5%, but this will largely depend upon the mix of purchasers and types of vehicles sold.

Gross margins on used commercial vehicle sales decreased to 14.4% in the first quarter of 2025, from 21.6% in the first quarter of 2024.

This decrease was primarily due to a change in sales mix between wholesale and retail.

Gross margins on used commercial vehicle sales decreased to 16.9% in the second quarter of 2025, from 19.2% in the second quarter of 2024.

This decrease was primarily due to the mix of purchasers.

We expect margins on used commercial vehicles to range between 12.0% and 17.0% in 2025.

Gross margins from truck lease and rental sales increased to 28.2% in the first quarter of 2025, from 27.5% in the first quarter of 2024.

This increase is primarily related to the delivery of new lease vehicles, which have lower operating costs.

Gross margins from truck lease and rental sales increased to 28.7% in the second quarter of 2025, from 28.5% in the second quarter of 2024.

This increase was primarily related to decreased maintenance costs due to a lower average age of the leasing fleet.

We expect gross margins from lease and rental sales of approximately 27.0% to 29.0% during 2025.

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This policy results in us realizing reasonable gross margins while the unit is in service and a corresponding gain or loss on sale when the unit is sold at the end of the lease term.

Finance and insurance revenues and other income, as described above, have limited direct costs and, therefore, contribute a disproportionate share of gross profit.

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

Selling, General and Administrative (“SG&A”) expenses decreased $14.9 million, or 5.6%, in the first quarter of 2025, compared to the first quarter of 2024.

This decrease primarily resulted from reductions to our operating expenses that occurred in the first half of 2024.

SG&A expenses as a percentage of total revenues decreased to 13.4% in the first quarter of 2025, from 14.1% in the first quarter of 2024.

Selling, General and Administrative (“SG&A”) expenses increased $0.6 million, or 0.2%, in the second quarter of 2025, compared to the second quarter of 2024.

SG&A expenses as a percentage of total revenues increased to 13.1% in the second quarter of 2025, from 12.4% in the second quarter of 2024.

Annual SG&A expenses as a percentage of total revenues have ranged from approximately 12.4% to 14.4% over the last five years.

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Interest Expense, Net

Net interest expense decreased $5.1 million, or 28.4%, in the first quarter of 2025, compared to the first quarter of 2024.

This decrease in interest expense is primarily the result of decreased inventory levels and lower interest rates compared to the first quarter of 2024.

Net interest expense decreased $6.7 million, or 34.6%, in the second quarter of 2025, compared to the second quarter of 2024.

This decrease in interest expense is a result of a decrease in our vehicle inventory levels and lower interest rates on our variable rate debt compared to the second quarter of 2024.

We expect net interest expense in 2025 to decrease compared to 2024, but the amount of the decrease will depend on inventory levels, interest rate fluctuations and the amount of cash available to make prepayments on our floor plan arrangements.

Income before Income Taxes

As a result of the factors described above, income before income taxes decreased $14.2 million, or 15.4%, in the first quarter of 2025, compared to the first quarter of 2024.

Income taxes decreased $3.4 million, or 15.8%, in the first quarter of 2025, compared to the first quarter of 2024.

We provided for taxes at a 22.8% effective rate in the first quarter of 2025 and 23.0% in the first quarter of 2024.

As a result of the factors described above, income before income taxes decreased $8.0 million, or 7.6%, in the second quarter of 2025, compared to the second quarter of 2024.

Income taxes decreased $2.2 million, or 8.2%, in the second quarter of 2025, compared to the second quarter of 2024.

We provided for taxes at a 24.8% effective rate in the second quarter of 2025 and 24.5% in the second quarter of 2024.

We expect our effective tax rate to be approximately 23.0% to 24.0% of pretax income in 2025.

Six Months Ended June 30, 2025, Compared to Six Months Ended June 30, 2024

Unless otherwise stated below, our variance explanations and future expectations with regards to the items discussed in this section are set forth in the discussion of the “Three Months Ended June 30, 2025, Compared to Three Months Ended June 30, 2024.”

Total revenues decreased $117.5 million, or 3.0%, in the first six months of 2025, compared to the first six months of 2024.

Sales of new and used commercial vehicles decreased $101.4 million, or 4.2%, in the first six months of 2025, compared to the first six months of 2024.

Aftermarket Products and Services revenues decreased $21.3 million, or 1.7%, in the first six months of 2025, compared to the first six months of 2024.

We sold 6,481 new Class 8 heavy-duty trucks in the first six months of 2025 in the United States, a 14.3% decrease compared to 7,622 new Class 8 heavy-duty trucks in the first six months of 2024.

According to A.C.T.

Research, retail sales in the U.S.

Class 8 truck market decreased 4.8% in the first six months of 2025, compared to the first six months of 2024.

We sold 149 new Class 8 heavy-duty trucks in the first six months of 2025 in Canada, a 35.5% decrease compared to 231 new Class 8 heavy-duty trucks in the first six months of 2024.

We sold 6,830 new Class 4 through 7 medium-duty commercial vehicles, including 669 buses, in the United States in the first six months of 2025.

This result remained relatively flat compared to 6,829 new Class 4 through 7 medium-duty commercial vehicles, including 734 buses, in the first six months of 2024.

Research estimates that unit sales of new Class 4 through 7 commercial vehicles in the U.S.

decreased approximately 6.6% in the first six months of 2025, compared to the first six months of 2024.

We sold 302 new Class 5 through 7 medium-duty commercial vehicles in the first six months of 2025 in Canada, a 56.5% increase compared to 193 new Class 5 through 7 medium-duty commercial vehicles in the first six months of 2024.

We sold 1,173 new light-duty vehicles in the first six months of 2025, an 18.1% increase compared to 993 new light-duty vehicles sold in the first six months of 2024.

We sold 3,356 used commercial vehicles in the first six months of 2025, a 3.2% decrease compared to 3,541 used commercial vehicles in the first six months of 2024.

Truck lease and rental revenues increased $7.8 million, or 4.4%, in the first six months of 2025, compared to the first six months of 2024.

Finance and insurance revenues decreased $0.5 million, or 5.0%, in the first six months of 2025, compared to the first six months of 2024.

Gross profit decreased $44.8 million, or 5.7%, in the first six months of 2025, compared to the first six months of 2024.

Gross profit as a percentage of sales was 19.5% in the first six months of 2025 and 20.1% in the first six months of 2024.

Gross margins from Aftermarket Products and Services operations decreased to 36.7% in the first six months of 2025, from 37.0% in the first six months of 2024.

Gross profit for Aftermarket Products and Services was $460.6 million in the first six months of 2025, compared to $472.2 million in the first six months of 2024.

Gross profit from parts sales represented 59.0% of the total gross profit for Aftermarket Products and Services operations in the first six months of 2025 and 58.1% in the first six months of 2024.

Service and collision center operations represented 41.0% of the total gross profit for Aftermarket Products and Services operations in the first six months of 2025 and 41.9% in the first six months of 2024.

Gross margins on new Class 8 heavy-duty truck sales decreased to 8.8% in the first six months of 2025, from 9.1% in the first six months of 2024.

Gross margins on new Class 4 through 7 medium-duty commercial vehicle sales decreased to 7.7% in the first six months of 2025, from 8.8% in the first six months of 2024.

Gross margins on used commercial vehicle sales decreased to 15.7% in the first six months of 2025, from 20.5% in the first six months of 2024.

Gross margins from truck lease and rental sales increased to 28.5% in the first six months of 2025, from 28.0% in the first six months of 2024.

Finance and insurance revenues and other income, 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 $14.2 million, or 2.8%, in the first six months of 2025, compared to the first six months of 2024.

SG&A expenses remained flat at 13.2% of total revenue in the first six months of 2025, compared to 2024.

Interest (Income) Expense, Net

Net interest expense decreased $11.8 million, or 31.6%, in the first six months of 2025, compared to the first six months of 2024.

Income before Income Taxes

Income before income taxes decreased $22.2 million, or 11.2%, in the first six months of 2025, compared to the first six months of 2024.

Provision for Income Taxes

Income taxes decreased $5.5 million, or 11.6%, in the first six months of 2025, compared to the first six months of 2024.

We provided for taxes at a 23.8% rate in the first six months of 2025 and a 24.1% rate in the first six months of 2024.

Liquidity and Capital Resources

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Historically, these cash requirements have been met through the retention of profits, borrowings under our floor plan arrangements and bank financings.

As of March 31, 2025, we had working capital of approximately $751.3 million, including $228.7 million in cash, available to fund our operations.

As of June 30, 2025, we had working capital of approximately $694.8 million, including $211.1 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.

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We continually evaluate our liquidity and capital resources based upon:

(i) our cash, cash equivalents and restricted cash on hand;

(i) our cash and cash equivalents on hand;

(ii) the funds that we expect to generate through future operations;

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We have a secured line of credit that provides for a maximum borrowing of $25.0 million.

There were no advances outstanding under this secured line of credit on March 31, 2025, 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 March 31, 2025.

Our floor plan credit agreements and our credit agreement with Wells Fargo Bank, National Association (“WF”) require us to satisfy various financial ratios such as the leverage ratio, the asset coverage ratio and the fixed charge coverage ratio.

As of March 31, 2025, we were in compliance with all debt covenants related to debt secured by lease and rental units, our floor plan credit agreements and our credit agreement with WF.

There were no advances outstanding under this secured line of credit on June 30, 2025, however, $18.7 million was pledged to secure various letters of credit related to self-insurance products, leaving $6.3 million available for our future borrowings as of June 30, 2025.

Certain of our long-term debt, floor plan financing agreements and our credit agreement with Wells Fargo Bank, National Association the (“WF”) require us to satisfy various financial ratios such as the leverage ratio, the asset coverage ratio, and the fixed charge coverage ratio.

As of June 30, 2025, we were in compliance with all debt covenants related to debt secured by lease and rental units, our floor plan credit agreements and the credit agreement with WF.

We do not anticipate any breach of these covenants in the foreseeable future.

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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.

During the first quarter of 2025, we paid a cash dividend of $14.3 million.

Additionally, on April 30, 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 June 12, 2025, to all shareholders of record as of May 12, 2025.

The total dividend disbursement is estimated at approximately $14.4 million.

During the second quarter of 2025, we paid a cash dividend of $14.3 million.

Additionally, on July 30, 2025, our Board of Directors declared a cash dividend of $0.19 per share of Class A and Class B common stock, to be paid on September 12, 2025, to all shareholders of record as of August 12, 2025, which represents a 5.6% increase compared to the cash dividend we paid in the first quarter of 2025.

We expect to continue paying cash dividends on a quarterly basis.

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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.

Repurchases, if any, are made at times and in amounts as we deem appropriate and may be made through open market transactions at prevailing market prices, privately negotiated transactions or by other means in accordance with federal securities laws.

The actual timing, number of shares and value of repurchases under the stock repurchase program will be determined by management at its discretion and will depend on a number of factors, including market conditions, stock price and other factors.

As of March 31, 2025, we had repurchased $37.4 million of our shares of common stock under the current stock repurchase program, excluding federal excise tax.

On May 29, 2025, the Company announced an increase of $50 million to its existing stock repurchase program authorizing the Company to repurchase, from time to time, up to an aggregate of $200 million of its shares of common stock.

Repurchases, if any, will be made at times and in amounts as we deem appropriate and may be made through open market transactions at prevailing market prices, privately negotiated transactions or by other means in accordance with federal securities laws.

The actual timing, number and value of repurchases under the stock repurchase program will be determined by management at its discretion and will depend on a number of factors, including market conditions, stock price and other factors, including those related to the ownership requirements of our dealership agreements with Peterbilt.

As of June 30, 2025, we had repurchased $121.4 million of our shares of common stock under the current stock repurchase program, excluding federal excise tax.

The current stock repurchase program expires on December 31, 2025, and may be suspended or discontinued at any time.

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We anticipate funding the capital expenditures for the improvement and expansion of existing facilities and recurring expenses through our operating cash flows.

We can fund the construction or purchase of new facilities through our operating cash flows or by financing.

We have the ability to fund the construction or purchase of new facilities through our operating cash flows or by financing.

We are currently under contract to construct a new facility on the land adjacent to our current location in Huntley, IL with a current budget of $23.8 million.

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The following table summarizes our cash flows for the periods indicated (in thousands):

Ended March 31,

Six Months Ended June 30,

Net cash provided by (used in):

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Financing activities

Effect of exchange rate changes on cash

Net (decrease) increase in cash

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Cash flows from operating activities include net income adjusted for non-cash items and the effects of changes in working capital.

During the first quarter of 2025, operating activities resulted in net cash provided by operations of $153.5 million.

Net cash provided by operating activities primarily consisted of $60.6 million in net income, as well as non-cash adjustments related to depreciation and amortization of $61.5 million, and stock-based compensation of $13.7 million.

Cash used by operating activities included an aggregate of $16.6 million net change in operating assets and liabilities.

Included in the net change in operating assets and liabilities were cash inflows of $75.4 million from the increase in accounts payable and $50.3 million from the decrease in accounts receivable, which was offset primarily by cash outflows of $77.0 million from the increase in inventories, $12.6 million from the decrease in customer deposits and $19.6 million from the decrease in accrued expenses.

During the first six months of 2025, operating activities resulted in net cash provided by operations of $381.2 million.

Net cash provided by operating activities primarily consisted of $133.6 million in net income, as well as non-cash adjustments related to depreciation and amortization of $124.5 million, stock-based compensation of $22.0 million and cash inflows for deferred income tax expense of $0.5 million.

Cash provided by operating activities included an aggregate of $107.7 million net changes in operating assets and liabilities.

Included in the net change in operating assets and liabilities were cash inflows of $52.9 million from the increase in accounts payable, $40.7 million from the decrease in accounts receivable and $10.2 million from the decrease in inventories, which were offset by cash outflows of $8.1 million from the increase in other assets, $2.6 million from the decrease in customer deposits and $8.6 million from the increase in accrued expenses.

Most of our commercial vehicle inventory is financed through our floor plan credit agreements.

During the first quarter of 2024, operating activities resulted in net cash used in operations of $155.1 million.

Net cash provided by operating activities primarily consisted of $71.5 million in net income, as well as non-cash adjustments related to depreciation and amortization of $56.8 million, and stock-based compensation of $14.1 million.

Cash used by operating activities included an aggregate of $297.4 million net change in operating assets and liabilities.

Included in the net change in operating assets and liabilities were cash inflows of $17.4 million from the increase in accounts payable, which was offset primarily by cash outflows of $215.5 million from the increase in inventories, $49.9 million from the increase in accounts receivable, $17.7 million from the decrease in customer deposits and $26.9 million from the increase in accrued expenses.

During the first six months of 2024, operating activities resulted in net cash provided by operations of $115.5 million.

Net cash provided by operating activities primarily consisted of $150.3 million in net income, as well as non-cash adjustments related to depreciation and amortization of $114.3 million, stock-based compensation of $19.6 million and cash inflows for deferred income tax expense of $1.5 million.

Cash provided by operating activities included an aggregate of $169.7 million net change in operating assets and liabilities.

Included in the net change in operating assets and liabilities were cash inflows of $3.9 million from the increase in accounts payable, which were offset by cash outflows of $34.0 million from the increase in accounts receivable, $63.4 million from the increase in inventories, $7.6 million from the increase in other assets, $49.2 million from the decrease in customer deposits and $19.4 million from the increase in accrued expenses.

Most of our commercial vehicle inventory is financed through our floor plan credit agreements.

Cash Flows from Investing Activities

During the first quarter of 2025, cash used in investing activities was $97.2 million.

Cash flows used in investing activities consist primarily of cash used for the acquisition of property and equipment.

Acquisition of property and equipment totaled $109.1 million during the first three months of 2025 and consisted primarily of purchases of machinery and shop equipment, furniture and fixtures, real estate and facilities, improvements to our existing dealership facilities and $94.0 million for purchases of rental and lease vehicles for our rental and leasing operations.

During the first quarter of 2024, cash used in investing activities was $69.2 million.

Cash flows used in investing activities consist primarily of cash used for the acquisition of property and equipment.

Acquisition of property and equipment totaled $79.1 million during the first three months of 2025 and consisted primarily of purchases of machinery and shop equipment, furniture and fixtures, real estate and facilities, improvements to our existing dealership facilities and $52.1 million for purchases of rental and lease vehicles for our rental and leasing operations.

During the first six months of 2025, cash used in investing activities was $232.2 million.

Cash flows used in investing activities consisted primarily of cash used for the acquisition of property and equipment and the acquisition of new businesses.

See Note 12 of the Notes to Consolidated Financial Statements for a detailed discussion of the business acquisitions.

Acquisition of property and equipment totaled $222.3 million during the first six months of 2025 and consisted primarily of purchases of machine and shop equipment, furniture and fixtures, real estate and facilities, improvements to our existing dealership facilities and $182.1 million for purchases of rental and lease vehicles for our rental and leasing operations.

During the first six months of 2024, cash used in investing activities was $161.1 million.

Cash flows used in investing activities consisted primarily of cash used for the acquisition of property and equipment.

Acquisition of property and equipment totaled $172.5 million during the first six months of 2024 and consisted primarily of purchases of machine and shop equipment, furniture and fixtures, real estate and facilities, improvements to our existing dealership facilities and $140.1 million for purchases of rental and lease vehicles for our rental and leasing operations.

Cash Flows from Financing Activities

Cash flows from financing activities include borrowings and repayments of long-term debt and net proceeds of floor plan notes payable, non-trade.

During the first quarter of 2025, financing activities resulted in net cash used in financing activities of $56.4 million, primarily related to $288.4 million from borrowings of long-term debt and $6.2 million from the issuance of shares related to equity compensation plans.

These cash inflows were offset by cash outflows of $0.6 million from net draws on floor plan notes payable, non-trade, $293.2 million used for principal repayments of long-term debt and finance lease obligations, $29.6 million used for repurchases of common stock, $9.4 million for taxes paid related to net share settlement of equity awards and $14.4 million used for payment of cash dividends.

During the first quarter of 2024, financing activities resulted in net cash provided by financing activities of $196.5 million, primarily related to $110.2 million from net draws on floor plan notes payable, non-trade, $713.8 million from borrowings of long-term debt and $9.4 million from the issuance of shares related to equity compensation plans.

These cash inflows were offset by cash outflows of $607.9 million used for principal repayments of long-term debt and finance lease obligations, $5.6 million used for repurchases of common stock, $9.5 million for taxes paid related to net share settlement of equity awards and $13.9 million used for payment of cash dividends.

During the first six months of 2025, financing activities resulted in net cash used by financing activities of $166.3 million, primarily related to cash inflows of $7.9 million from the issuance of shares related to equity compensation plans and borrowings of $644.4 million of long-term debt.

These cash inflows were offset by $642.5 million used for principal repayments of long-term debt and capital lease obligations, $9.7 million for taxes related to net share settlement of equity awards, $117.1 million used for repurchases of common stock, $12.0 million used for net payments on floor plan notes payable and $28.9 million used for payment of cash dividends.

The borrowings of long-term debt were primarily related to purchasing units for the rental and leasing operations.

During the first six months of 2024, financing activities resulted in net cash provided by financing activities of $29.2 million, primarily related to cash inflows of $11.5 million from the issuance of shares related to equity compensation plans, $88.4 million from net draws on floor plan notes payable, non-trade and borrowings of $1.2 billion of long-term debt.

These cash inflows were offset by $1.2 billion used for principal repayments of long-term debt and capital lease obligations, $9.5 million for taxes related to net share settlement of equity awards, $9.5 million used for repurchases of common stock and $27.2 million used for payment of cash dividends.

The borrowings of long-term debt were primarily related to purchasing units for the rental and leasing operations.

On September 14, 2021, we entered into a credit agreement with WF, with the lenders signatory thereto (“WF Lenders”) and WF as administrative agent (the “Well Fargo Credit Agreement”).

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We may terminate the commitments at any time.

On March 31, 2025, we had approximately $142.4 million outstanding under the WF Credit Agreement.

On June 30, 2025, we had approximately $137.3 million outstanding under the WF Credit Agreement.

On November 1, 2023, we entered into that certain Second Amended and Restated Inventory Financing and Purchase Money Security Agreement with PACCAR Leasing Company (“PLC”), a division of Paccar Financing Corp.

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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 March 31, 2025, we had approximately $220.0 million outstanding under the PLC Agreement.

On June 30, 2025, we had approximately $220.0 million outstanding under the PLC Agreement.

On May 31, 2022, RTC Canada entered into that certain BMO Revolving Lease and Rental Credit Agreement (the “RTC Canada Revolving Credit Agreement”) with Bank of Montreal (“BMO”).

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The RTC Canada Revolving Credit Agreement expires on September 14, 2026.

On March 31, 2025, we had approximately $59.4 million CAD outstanding under the RTC Canada Revolving Credit Agreement.

On June 30, 2025, we had approximately $118.3 million CAD outstanding under the RTC Canada Revolving Credit Agreement.

Most of our commercial vehicle purchases are made on terms requiring payment to the manufacturer within 15 to 60 days or less from the date the commercial vehicles are invoiced from the factory.

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The PFC Floor Plan Credit Agreement expires on 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 March 31, 2025, we had approximately $480.0 million outstanding under the PFC Floor Plan Credit Agreement.

On June 30, 2025, we had approximately $480.0 million outstanding under the PFC 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.

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The BMO Floor Plan Credit Agreement expires on December 31, 2029, although BMO Bank 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 March 31, 2025, we had approximately $368.1 million outstanding under the BMO Floor Plan Credit Agreement.

On June 30, 2025, we had approximately $359.0 million outstanding under the BMO Floor Plan Credit Agreement.

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 July 15, 2022, RTC Canada entered into that certain Amended and Restated BMO Wholesale Financing and Security Agreement (the “RTC Canada Floor Plan Credit Agreement”) with BMO.

Pursuant to the terms of the RTC Canada Floor Plan Credit Agreement (as amended), 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.

Pursuant to the terms of the RTC Canada Floor Plan Credit Agreement (as amended), BMO originally 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 June 13, 2025, the RTC Canada Floor Plan Credit Agreement was amended to increase the loan commitment to $171.7 million CAD.

Loans to purchase used vehicle inventory are limited to twenty percent (20%) of the credit limit available at such time.

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The RTC Canada Floor Plan Credit Agreement expires on September 14, 2026.

On March 31, 2025, we had approximately $85.0 million CAD outstanding under the RTC Canada Floor Plan Credit Agreement.

On June 30, 2025, we had approximately $113.1 million CAD outstanding under the RTC Canada 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.

On March 31, 2025, our backlog of commercial vehicle orders was approximately $1,401.3 million, compared to a backlog of commercial vehicle orders of approximately $2,047.1 million on March 31, 2024.

Given the current uncertainty regarding tariffs, 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.

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.

On June 30, 2025, our backlog of commercial vehicle orders was approximately $967.0 million, as compared to a backlog of commercial vehicle orders of approximately $1,812.1 million on June 30, 2024.

The decrease in our backlog primarily reflects the difficult industry conditions caused by the ongoing freight recession and general economic uncertainty, in addition to uncertainty with respect to U.S.

trade policy and engine emissions regulations, which are negatively impacting demand for new commercial vehicles.

Our backlog is determined quarterly by multiplying the number of new commercial vehicles for each particular type of commercial vehicle ordered by a customer at our Rush Truck Centers by the recent average selling price for that type of commercial vehicle.

We include only confirmed orders in our backlog.

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The delivery time for a custom-ordered commercial vehicle varies depending on the truck specifications and demand for the model ordered.

We sell most of our new heavy-duty commercial vehicles by customer special order, and we sell the majority of our medium- and light-duty commercial vehicles out of inventory.

Orders from several of our major fleet customers are included in our backlog as of March 31, 2025, and we expect to fill most of our backlog orders during 2025, assuming that the manufacturers we represent can meet their current production schedule.

We sell the majority of our new heavy-duty commercial vehicles by customer special order and we sell the majority of our medium- and light-duty commercial vehicles out of inventory.

Orders from several of our major fleet customers are included in our backlog as of June 30, 2025, and we expect to fill most of our backlog orders during 2025.

Our Truck Segment is moderately seasonal.

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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.

Pursuant to these laws, federal and state environmental agencies have established approved methods for handling, storage, treatment, transportation, and disposal of regulated substances with which we must comply.

Pursuant to these laws, federal state and provincial environmental agencies have established approved methods for handling, storage, treatment, transportation, and disposal of regulated substances with which we must comply.

Our business also involves the operation and use of aboveground and underground storage tanks.

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In addition, such laws could affect demand for the products that we sell.

We are also subject to federal and state laws and regulations governing the commercial vehicle engine emissions.

We are also subject to federal and state laws and regulations governing commercial vehicle engine emissions.

The Environmental Protection Agency (“EPA”) and the National Highway Traffic Safety Administration on behalf of the U.S.

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.

One of these rules, referred to herein as the “EPA 2027 Low NOx” rule, will require commercial vehicle engines to emit significantly less NOx than such engines do today, beginning in model year 2027.

The EPA 2027 Low NOx rule also would increase the useful life of each vehicle and would require that manufacturers extend the warranty term of each vehicle to ensure that commercial vehicles remain compliant with the EPA’s emission standards as such vehicles age.

Department of Transportation, previously 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.

One of these rules, referred to herein as the “EPA 2027 Low NOx” rule, requires commercial vehicle engines to emit significantly less NOx than most such engines do today, beginning in model year 2027.

In March 2024, the EPA issued an additional rule associated with reducing GHG emissions from heavy-duty trucks and buses for model years 2027 through 2032 (the “GHG-3” rule).

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Similarly, the California Air Resources Board (“CARB”) has adopted rules and regulations that are intended to reduce NOx emissions (the “HD Omnibus” rule), phase out the sale of ICE commercial vehicles over time by requiring a certain percentage of each manufacturer’s commercial vehicles sold within the state to be “zero-emission vehicles” (the “Advanced Clean Trucks” rule) and require fleets to purchase a certain number of “zero-emission vehicles” (the “Advanced Clean Fleet” rule).

The EPA granted waivers to CARB with respect to the HD Omnibus and Advanced Clean Truck rules, each of which became effective in January 2024.

CARB withdrew its request for a waiver from the EPA with respect to the Advanced Clean Fleet rule in January 2025, and thus, it is unlikely that this rule will become effective in the near future.

In addition, the EPA asked Congress to review the previously granted waivers that CARB received with respect to the HD Omnibus and Advanced Clean Truck rules, and the U.S.

House of Representatives recently passed resolutions to rescind such waivers pursuant to the Congressional Review Act.

Senate must now vote on the resolutions.

However, if the U.S.

Senate votes to approve the resolutions, it is expected that there will be multiple legal challenges regarding Congress’s authority to revoke the waivers.

In addition, in March 2025, the EPA announced that it was reconsidering various previously approved engine emissions regulations, including the EPA 2027 Low NOx rule and the GHG-3 rule.

With respect to the EPA’s engine emission rules, while it is widely expected that that the current GHG-3 rule will be revoked or modified by a branch of the federal government, it is less clear whether a branch of the federal government may attempt to revoke or modify the EPA 2027 Low NOx rule.

The EPA previously granted waivers to CARB with respect to the HD Omnibus and Advanced Clean Truck rules, each of which became effective in January 2024.

CARB withdrew its request for a waiver from the EPA with respect to the Advanced Clean Fleet rule in January 2025.

Further, in February 2025, the EPA asked Congress to review the previously granted waivers that CARB received with respect to the HD Omnibus and Advanced Clean Truck rules.

Congress voted to rescind the waivers, and in June 2025, President Trump signed Congress’ resolutions rescinding the waivers.

The State of California and ten other states are currently challenging Congress’ authority to revoke the waivers.

In addition, in July 2025, the EPA issued a proposal to rescind President Obama’s 2009 findings that GHG emissions endanger public human health and that vehicle emissions contribute to the GHG emissions (the “2009 Endangerment Finding”).

The EPA’s proposal is currently out for public comment, but it is widely expected that that the GHG-3 rule will be repealed.

In addition, it is also widely expected that the EPA 2027 Low NOx rule will be modified or repealed during 2025.

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.

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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.

In addition, CARB agreed to align its HD Omnibus rule with the EPA 2027 Low NOx rule, which goes into effect starting in model year 2027, and modify certain provisions of its HD Omnibus rule currently in effect.

It is not clear at this time if the Clean Truck Partnership will survive in light of all of the legal challenges questioning CARB’s authority to regulate engine emissions regulations, in addition to legal challenges to the Clean Truck Partnership itself.

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.

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.

Six of the states are states where we operate new commercial vehicle dealerships:

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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.

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.

If CARB were to prevail in its legal challenges against Congress’ recission of the EPA waivers, attaining CARB’s 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.

Additional regulations, or CARB’s enforcement of its existing regulations, could result in increased compliance costs, additional operating restrictions, or changes in demand for our products and services, which could have a material adverse effect on our business, financial condition and results of operations.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements