What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-02-25 compared with 2025-02-24 · 120 added, 132 removed, 843 unchanged (23% of the section changed)

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The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Commercial Vehicle Inventory Reserves

New Commercial Vehicle Inventory Reserves

Description of the Matter

At December 31, 2024, the Company’s commercial vehicle inventory balance is approximately $1.4 billion, which is net of management’s estimate of commercial vehicle inventory reserves in the amount of approximately $9.8 million.

As described in Note 6 to the consolidated financial statements, management adjusts the value of its inventory to net realizable value to the extent it determines inventory cost cannot be recovered.

Management estimates future demand and sales prices to calculate the commercial vehicle inventory reserves and to make corresponding adjustments to the carrying value of these inventories to reflect the lower of cost or net realizable value.

Auditing management’s estimate of the commercial vehicle inventory reserves involved auditor subjective judgment because the estimate is sensitive to changes in management’s assumptions for forecasted product demand and future sales prices.

At December 31, 2025, the Company’s new commercial vehicle inventory balance was approximately $1.1 billion, which is net of management’s estimate of new commercial vehicle inventory reserves in the amount of approximately $11.8 million.

As described in Notes 2 and 6 to the consolidated financial statements, management adjusts the value of its new commercial vehicle inventory to net realizable value to the extent it determines new commercial vehicle inventory cost cannot be recovered.

Auditing management’s estimate of the new commercial vehicle inventory reserves involved a higher degree of auditor judgment because the estimate is affected by significant assumptions of expected future demand, market trends and economic conditions, and historical sales.

How We Addressed the Matter in Our Audit

We evaluated and tested the design and operating effectiveness of controls over the Company’s processes to estimate the commercial vehicle inventory reserve, which included management’s review of the underlying significant assumptions.

We evaluated and tested the design and operating effectiveness of controls over the Company’s processes to estimate the new commercial vehicle inventory reserves, which included management’s review of the underlying significant assumptions.

Our substantive audit procedures included, among others, evaluating the significant assumptions described above, and we tested the completeness and accuracy of underlying data used in the estimation calculations.

We also compared the cost of on-hand commercial vehicle inventories to customer demand forecasts and historical sales.

We assessed the historical accuracy of management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the commercial vehicle inventory reserves that would result from changes in the assumptions.

We also compared the cost of new commercial vehicle inventories on-hand to customer demand forecasts and historical sales.

We assessed the historical accuracy of management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the new commercial vehicle inventory reserves that would result from changes in the significant assumptions.

/s/ Ernst & Young LLP

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Floor plan notes payable

Current maturities of long-term debt

Current maturities of finance lease obligations

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Total current liabilities

Long-term debt

Long-term debt, net of current maturities

Finance lease obligations, net of current maturities

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Operating income

Other income (loss)

Interest income (expense):

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Foreign currency translation

Reclassification of currency translation related to equity method accounting

Other comprehensive income (loss) attributable to Rush Enterprises, Inc.

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(In Thousands)

Rush Enterprises,

Class A Class B

Comprehensive

Income (Loss)

Rush Enterprises,

Shareholders’

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Shareholders’

Income (Loss)

Balance, December 31, 2022

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Common stock repurchases

Retirement of treasury shares and par value adjustment

Cash dividends declared on Class A common stock

Cash dividends declared on Class B common stock

Reclassification of foreign currency translation related to equity method

Foreign currency translation adjustment

Noncontrolling interest equity

Balance, December 31, 2023

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Common stock repurchases

Retirement of treasury shares and par value adjustment

Cash dividends declared on Class A common stock

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Gain on sale of property and equipment, net

Gain on joint venture transaction

Gain on business acquisition

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

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Change in trade accounts payable

Draws (payments) in floor plan notes payable – trade, net

Change in customer deposits

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Change in notes receivable from affiliate

Business disposition

Business acquisitions, net of cash

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(the “Company”) was incorporated in 1965 under the laws of the State of Texas.

The Company operates a network of commercial vehicle dealerships that primarily sell commercial vehicles manufactured by Peterbilt, International, Hino, Ford, Isuzu, IC Bus, Blue Bird, Dennis Eagle, Blue Arc or Battle Motors.

Through its strategically located network of Rush Truck Centers, the Company provides one-stop service for the needs of its commercial vehicle customers, including retail sales of new and used commercial vehicles, aftermarket parts sales, service and repair facilities, financing, leasing and rental, and insurance products.

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 December 31, 2024.

Restricted cash consists of deposits for the statutory restriction on cash related to the Company’s captive insurance company of $ 6.3 million as of December 31, 2025 and $ 5.1 million as of December 31, 2024.

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.

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Inventories are stated at the lower of cost or net realizable value.

Cost is determined by specific identification of new and used commercial vehicle inventory.

As the market value of the Company’s inventory typically declines over time, reserves are established based on historical loss experience and market trends.

Cost is determined by specific identification of new and used commercial vehicle inventory and by the first-in, first-out method for tires, parts and accessories.

As the market value of the Company’s inventory typically declines over time, reserves are established based on historical experience and market trends.

These reserves are charged to cost of sales and reduce the carrying value of the Company’s inventory on hand.

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The cost, accumulated depreciation and amortization and estimated useful lives of the Company’s property and equipment are summarized as follows (in thousands):

Estimated Life

Buildings and improvements

Estimated Life (Years)

Leasehold improvements

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Equity Method Investments

On February 25, 2019, the Company acquired 50 % of the equity interest in RTC Canada, which acquired the operating assets of Tallman Group, the largest International Truck dealer in Canada.

Prior to acquiring an additional 30 % equity interest on May 2, 2022, for approximately $ 20.0 million, the Company accounted for the equity interest in RTC Canada using the equity method of accounting.

After the Company’s acquisition of the additional 30 % equity interest on May 2, 2022, operations of RTC Canada were included in the accompanying consolidated financial statements.

Income (loss) related to the 20 % equity owner of RTC Canada is reflected in the accompanying consolidated financial statements as a noncontrolling interest.

See Note 15 – Acquisitions in the Notes to the Financial Statements for further discussion.

On January 3, 2022, a subsidiary of Cummins, Inc.

acquired a 50 % equity interest in Natural Gas Fuel Systems, LLC (“NGFS”) from the Company for $ 27.5 million.

NGFS previously conducted business as Momentum Fuel Technologies.

The $ 12.5 million gain realized on the transaction is included in Other income on the Consolidated Statements of Income for the year ended December 31, 2022.

The Company is accounting for the business as a joint venture and recognizes the investment using the equity method.

The Company recognizes the investment for its 50 % equity interest in Natural Gas Fuel Systems, LLC (“NGFS”) with a subsidiary of Cummins, Inc.

using the equity method.

The Company’s equity income in NGFS is included in the line-item Other income on the Consolidated Statements of Income.

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Selling, General and Administrative Expenses

Selling, general and administrative expenses consist primarily of incentive-based compensation for sales, finance and general management personnel, salaries for administrative personnel and expenses for rent, marketing, insurance, utilities and other general operating purposes.

Selling, general and administrative expenses consist primarily of incentive-based compensation for sales, finance and general management personnel, salaries for administrative personnel, legal reserves and expenses for rent, marketing, insurance, utilities and other general operating purposes.

Stock Based Compensation

The Company applies the provisions of ASC topic 718-10, “ Compensation – Stock Compensation, ” which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors, including grants of employee stock options, restricted stock units, restricted stock awards and employee stock purchases under the Employee Stock Purchase Plan, based on estimated fair values.

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

The Company uses the Black-Scholes option-pricing model to estimate the fair value of share-based payment awards on the date of grant.

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Advertising costs are expensed as incurred.

Advertising and marketing expense was $ 11.3 million for 2024, $ 10.0 million for 2023 and $ 8.7 million for 2022.

Advertising and marketing expense is included in selling, general and administrative expense.

Advertising and marketing expenses were $ 10.8 million for 2025, $ 11.3 million for 2024 and $ 10.0 million for 2023.

Advertising and marketing expenses are included in selling, general and administrative expense.

Accounting for Internal Use Software

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The Company has capitalized software costs, including capitalized interest, of approximately $ 1.1 million as of December 31, 2025, net of accumulated amortization of $ 21.1 million, and had $ 1.8 million as of December 31, 2024, net of accumulated amortization of $ 17.2 million.

The Company utilizes a captive insurance company to manage its auto and general commercial liability insurance, which the Company supplements with excess insurance coverage at a level management believes is sufficient.

The Company is partially self-insured for a portion of the claims related to its worker’s compensation and medical insurance.

The Company self-insures and utilizes a captive insurance company to manage its auto and general commercial liability insurance, which the Company supplements with excess insurance coverage at a level management believes is sufficient to cover potential losses.

The Company is partially self-insured related to its worker’s compensation and medical insurance.

The Company uses actuarial information provided from third-party administrators to calculate an accrual for claims incurred, but not reported, and for the remaining portion of claims that have been reported.

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Recently Adopted Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued updated accounting guidance related to annual and interim segment disclosures (ASU 2023-07).

The updated accounting guidance, among other things, intends to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

We adopted ASU 2023-07 in the fourth quarter of 2024, by identifying the Chief Operating Decision Maker (“CODM”), identifying and aggregating operating segments, determining reportable segments and including significant segment expenses reviewed by the Company’s CODM.

Refer to Note 16, Segment Reporting, for our updated presentation.

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures.

We adopted this ASU on a retrospective basis effective January 1, 2025.

Refer to Note 13, Income Taxes for the inclusion of new disclosures required.

New Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, may be applied prospectively or retrospectively, and allows for early adoption.

These requirements are not expected to have an impact on our financial statements but will impact our income tax disclosures.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, requiring more detailed disclosure about specified categories of expenses such as inventory purchases, employee compensation, depreciation and amortization in their financial statements.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, may be applied prospectively or retrospectively, and allows for early adoption.

The Company is currently evaluating the impact, if any, adoption will have on its financial statements.

The Company is currently evaluating the impact, if any, that the adoption of ASU 2024-03 will have on its financial statements.

In January 2025, the FASB issued ASU 2025-01, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40):

Clarifying the Effective Date ( “ ASU 2025-01 ” ) , which clarifies the effective date of ASU 2024-03 to require all public business entities to adopt the guidance for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The amendments may be applied either prospectively or retrospectively to prior periods presented.

Management is currently evaluating the impact that the adoption of ASU 2024-03, as clarified by ASU 2025-01, will have on its financial statements and related disclosures.

At this time, it is not practicable to estimate the effect of the standard on the disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software.

The amendments modernize the guidance on accounting for costs to develop or obtain software for internal use and replace the prior stage-based framework with a principles-based approach.

The amendments are effective for annual reporting periods beginning after December 15, 2027, and interim periods within those annual periods, with early adoption permitted.

Entities may apply the guidance prospectively, retrospectively, or via a modified transition approach.

The Company is currently evaluating the timing of adoption, the transition method it will elect, and the impact of this guidance on its consolidated financial statements and related disclosures.

In December 2025, the FASB issued ASU 2025‑11, Interim Reporting (Topic 270):

Narrow ‑ Scope Improvements.

The amendments clarify when Topic 270 applies, improve the navigability of the interim reporting guidance in ASC 270, and specify the form and content of interim financial statements and accompanying notes presented in accordance with GAAP.

Topic 270 also clarifies aspects of the form and content of interim financial statements for entities that present condensed statements and identifies interim disclosures required by GAAP topics outside of Topic 270.

The amendments are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027.

The Company is evaluating the effects, if any, that ASU 2025-11 will have on its interim financial statement disclosures and related processes.

SUPPLIER CONCENTRATION :

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International

May 2025 through January 2029

March 2026 through May 2030

Currently Negotiating

May 2025 through December 2027

March 2026 through May 2030

Battle Motors

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Primary Lenders

The Company purchases its new and used commercial vehicle inventories with the assistance of floor plan financing programs as described in Note 7 to these Notes to Consolidated Financial Statements.

The Company finances its Peterbilt new vehicle inventory under the PFC Floor Plan Credit Agreement with PFC, which has an aggregate loan commitment of $ 800.0 million.

The remainder of the Company’s new vehicle inventory, and all of its used vehicle inventory, is financed under the BMO Floor Plan Credit Agreement with BMO Bank, N.A., which has an aggregate loan commitment of $ 675.0 million.

The Company purchases its new and used commercial vehicle inventories with the assistance of floorplan financing programs as described in Note 7 to these Notes to Consolidated Financial Statements.

The Company is eligible to finance its Peterbilt new vehicle inventory under the PFC Floor Plan Credit Agreement with PFC, which has an aggregate loan commitment of $ 800.0 million.

The remainder of the Company’s new vehicle inventory, and all of its used vehicle inventory, is eligible to be financed under the BMO Floor Plan Credit Agreement with BMO Bank, which has an aggregate loan commitment of $ 675.0 million.

The Company’s floor plan financing agreements provide that the occurrence of certain events will be considered events of default.

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Pursuant to the terms of the RTC Canada Floor Plan Agreement, BMO agreed to make up to $ 171.7 million CAD of revolving credit loans to finance RTC Canada’s purchase of new and used vehicle inventory.

Concentrations of Credit Risks

Concentration of Credit Risks

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash, cash equivalents, restricted cash, and accounts receivable.

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Most of the Company’s finance contracts are sold without recourse.

The Company provides an allowance for doubtful receivables and a reserve for repossession losses related to finance contracts sold with recourse.

The Company provides an allowance for doubtful receivables and a reserve for collection losses related to finance contracts sold with recourse.

Historically, the Company’s allowances and reserves have covered losses inherent in these receivables.

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Less allowance for credit losses

Accounts receivable as of January 1, 2023, was $ 220.7 million.

As of January 1, 2024, the Company had accounts receivable of $ 259.4 million.

Notes receivable from the Cummins Clean Fuel Technologies (“CCFT”) joint venture include a $ 15.0 million promissory note bearing interest at the monthly SOFR, plus 1.5 % and maturing on December 31, 2026.

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The reserve is reviewed and, if necessary, adjustments are made on a quarterly basis.

The Company relies on historical information to support its reserve.

The Company relies on historical information to support its reserves.

Once the inventory is written down, the Company does not reverse any reserve balance until the inventory is sold.

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A detail of new and used commercial vehicle inventory is reviewed and, if necessary, adjustments to the value of specific vehicles are made on a quarterly basis.

Once the inventory is written down, the Company does not reverse any reserve balance until the inventory is sold.

Accounts Receivable and Allowance for Credit Losses

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These notes are collateralized by the inventory purchased, and accounts receivable arising from the sale thereof.

The Company’s BMO Floor Plan Credit Agreement with BMO Bank, N.A.

provides for a loan commitment of up to $ 675.0 million.

The Company’s BMO Floor Plan Credit Agreement provides for a loan commitment of up to $ 675.0 million.

The interest rate under the BMO Floor Plan Credit Agreement is the one-month SOFR, plus 1.20 %.

The effective interest rate applicable to the BMO Floor Plan Credit Agreement was approximately 4.99 % as of December 31, 2025.

The Company utilizes its excess cash on hand to pay down its outstanding borrowings under its BMO Floor Plan Credit Agreement, and the resulting interest earned is recognized as an offset to the Company’s gross interest expense under the BMO Floor Plan Credit Agreement.

The Company’s PFC Floor Plan Credit Agreement with PFC provides for a loan commitment of up to $ 800.0 million.

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The effective interest rate applicable to the PFC Floor Plan Credit Agreement was approximately 4.65 % as of December 31, 2025.

The Company utilizes its excess cash on hand to pay down its outstanding borrowings under the PFC Floor Plan Credit Agreement, and the resulting interest earned is recognized as an offset to the Company’s gross interest expense under the PFC Floor Plan Credit Agreement.

The Company’s RTC Canada Floor Plan Credit Agreement provides for a loan commitment of up to $ 171.7 million CAD of revolving credit loans to finance RTC Canada’s purchase of new and used vehicle inventory.

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RTC Canada may borrow, repay and reborrow loans from time to time until the maturity date, provided, however, that the outstanding principal amount on any date shall not exceed the credit limits set forth above with respect to new and used vehicles.

Advances under the RTC Canada Floor Plan Credit Agreement bear interest per annum, payable on the first business day of each calendar month, payable monthly, at CORRA, plus 1.27 %.

The Company finances all of the purchase price of its new commercial vehicle inventory and the loan value of its used commercial vehicle inventory under the PFC Floor Plan Credit Agreement, the BMO Floor Plan Credit Agreement and the RTC Canada Floor Plan Agreement, under which BMO Bank, N.A., PFC and BMO pay the manufacturer directly with respect to new commercial vehicles.

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, plus 1.20 %.

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

The effective interest rate applicable to the RTC Canada Floor Plan Credit Agreement was approximately 3.57 % as of December 31, 2025.

The Company finances all of the purchase price of its new non-Peterbilt commercial vehicle inventory and the loan value of its used commercial vehicle inventory under the BMO Floor Plan Credit Agreement and the RTC Canada Floor Plan Agreement, under which BMO Bank and BMO pay the manufacturer directly with respect to new commercial vehicles.

Amounts borrowed under the agreements are due when the related commercial vehicle inventory (collateral) is sold.

The BMO Floor Plan Credit Agreement expires December 31, 2029, although BMO Bank, N.A.

The BMO Floor Plan Credit Agreement expires December 31, 2029, although BMO.

has the right to terminate the BMO Floor Plan Credit Agreement at any time upon 360 days written notice and the Company may terminate at any time, subject to specified limited exceptions.

The Company finances all of the purchase price of its new Peterbilt commercial vehicle inventory under the PFC Floor Plan Credit Agreement, under which we pay the manufacturer directly with respect to new Peterbilt commercial vehicles.

Amounts borrowed under the agreements are due when the related commercial vehicle inventory (collateral) is sold.

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.

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Long-term debt was comprised of the following variable interest rate term notes (in thousands):

Variable interest rate term notes

Total long-term debt, net of current maturities

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Borrowings under the WF Credit Agreement bear interest per annum, payable on each interest payment date, at (A) SOFR plus (i) 1.25 % or (ii) 1.5 %, depending on the Company’s 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 the Company’s consolidated leverage ratio.

The WF Credit Agreement expires on September 14, 2026, although, upon the occurrence and during the continuance of an event of default, the WF Agent has the right to, or upon the request of the required lenders must, terminate the commitments and declare all outstanding principal and interest due and payable.

Effective September 30, 2025, the WF Credit Agreement was amended to, amongst other things, extend the expiration date to September 30, 2028, although, upon the occurrence and during the continuance of an event of default, the agent has the right to, or upon the request of the required lenders must, terminate the commitments and declare all outstanding principal and interest due and payable.

The Company may terminate the commitments at any time.

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The Company does not anticipate any breach of the covenants in the foreseeable future.

The $ 40.4 million CAD outstanding revolving credit loans pursuant to terms of the RTC Canada Revolving Credit Agreement maturing on September 16, 2026, have been classified as long-term debt under the assumption that the Company’s WF Credit Agreement (as amended) could be used to refinance this debt, if required.

On December 31, 2025, the Company had $ 152.7 million in availability under the WF Credit Agreement.

The Company intends to refinance the RTC Canada Revolving Credit Agreement in 2026.

FINANCIAL INSTRUMENTS AND FAIR VALUE :

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The carrying amount approximates fair value.

The Company’s accounting policy with respect to leases complies with ASU 842, Leases .

The Company’s accounting policy with respect to leases complies with ASU 842, Leases (“Topic 842”).

The standard requires lessees to record assets and liabilities on the balance sheet for all leases with terms longer than twelve months.

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The lease term is for a major part of the remaining economic life of the underlying asset.

The present value of the lease payments equals or exceeds the fair value of the underlying asset.

The present value of the lease payments equals or exceeds substantially all of the fair value of the underlying asset.

The underlying asset is of such a specialized nature that only the lessee can use it without major modifications.

The lessor expects to have no alternative use for the leased asset at the end of the lease.

The Company applied the practical expedients permitted under Topic 842, which among other things, allowed it to retain its existing assessment of whether an arrangement is, or contains, a lease and whether such lease is classified as an operating or finance lease.

The Company applied the practical expedients permitted under Topic 842 during implementation, which among other things, allowed it to retain its existing assessment of whether an arrangement is, or contains, a lease and whether such lease is classified as an operating or finance lease.

The Company made an accounting policy election that keeps leases with an initial term of twelve months or less off the balance sheet and results in recognizing those lease payments in the Consolidated Statements of Income and Comprehensive Income on a straight-line basis over the lease term.

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These vehicles are then subleased or rented by the Company to customers under various agreements.

The Company received sublease income under non-cancelable subleases of $ 54.3 million for the year ended December 31, 2024, and $ 50.0 million for the year ended December 31, 2023.

The Company received sublease income under non-cancelable subleases of $ 60.0 million for the year ended December 31, 2025, $ 54.3 million for the year ended December 31, 2024 and $ 50.0 million for the year ended December 31, 2023.

The Company usually guarantees the residual value of vehicles under operating lease and finance lease arrangements.

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Components of lease cost are as follows (in thousands):

Year Ended December 31,

Classification

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Supplemental cash flow information and non-cash activity related to operating and finance leases are as follows (in thousands):

Year Ended December 31,

Operating cash flow information:

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Operating Leases

Weighted-average remaining lease term (in months)

Weighted-average remaining lease term (in years)

Weighted-average discount rate

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provided however, that directors may elect to receive up to 40 % of the value of such grant in cash.

In 2025, two non-employee directors each received a grant of 2,810 shares of the Company’s Class A common stock, two non-employee directors each received a grant of 2,107 shares of the Company’s Class A common stock and $ 36,250 cash, one non-employee director received a grant of 1,967 shares of the Company’s Class A common stock and $ 43,500 cash and two non-employee directors received a grant of 1,686 shares of the Company’s Class A common stock and $ 58,000 cash.

In 2024, three non-employee directors each received a grant of 3,230 shares of the Company’s Class A common stock, three non-employee directors each received a grant of 1,938 shares of the Company’s Class A common stock and $ 58,000 cash and one non-employee director received a grant of 2,261 shares of the Company’s Class A common stock and $ 43,499 cash, for total compensation equivalent to $ 145,000 each.

In 2023, three non-employee directors each received a grant of 4,116 shares of the Company’s Class A common stock, two non-employee directors each received a grant of 2,469 shares of the Company’s Class A common stock and $ 58,000 cash and one non-employee director received a grant of 2,880 shares of the Company’s Class A common stock and $ 43,500 cash, for total compensation equivalent to $ 145,000 each.

One director who was appointed to the Company’s Board of Directors in October of 2024 received 1,501 shares of the Company’s Class A common stock at the time of appointment, for total compensation equivalent to $ 72,500 .

Under the Director Plan, there are approximately 147,360 shares remaining for issuance of the 1,125,000 shares of the Company’s Class A common stock that were reserved for issuance.

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Each option granted pursuant to the 2007 Incentive Plan has a ten -year term from the grant date and vests in three equal annual installments beginning on the third anniversary of the grant date.

The Company has 21,600,000 shares of Class A common stock and 9,000,000 shares of Class B common stock reserved for issuance under the Company’s 2007 Incentive Plan.

As of December 31, 2025, approximately 2,610,940 shares of Class A common stock and 1,667,925 shares of Class B common stock are available for issuance under the Company’s 2007 Incentive Plan.

The Company issues new shares of its Class A or Class B common stock upon the exercise of stock options or vesting of restricted stock awards.

During the year ended December 31, 2024, the Company granted to employees 538,700 options to purchase Class A common stock and 398,525 restricted Class B common stock awards under the 2007 Incentive Plan.

During the year ended December 31, 2023, the Company granted to employees 790,673 options to purchase Class A common stock and 551,138 shares of restricted Class B common stock awards under the 2007 Incentive Plan.

During the year ended December 31, 2025, the Company granted employees 549,400 options to purchase Class A common stock and 385,375 restricted Class B common stock awards under the 2007 Incentive Plan.

During the year ended December 31, 2024, the Company granted employees 538,700 options to purchase Class A common stock and 398,525 shares of restricted Class B common stock awards under the 2007 Incentive Plan.

Restricted stock awards are issued when granted but are subject to vesting requirements.

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The weighted-average grant date fair value of options granted was $ 19.01 per share during the year ended December 31, 2025, $ 17.13 per share during the year ended December 31, 2024, and $ 11.82 per share during the year ended December 31, 2023.

The Company granted restricted stock awards to certain of its employees under the 2007 Incentive Plan and unrestricted stock awards to its non-employee directors under the Director Plan during the year ended December 31, 2024.

The Company granted restricted stock awards to certain of its employees under the 2007 Incentive Plan during the year ended December 31, 2025.

The restricted stock awards granted to employees vest in three equal installments on the first, second and third anniversary of the grant date and are forfeited in the event the recipient’s employment or relationship with the Company is terminated prior to vesting, except as a result of retirement or under certain circumstances associated with a change of control or involuntary termination, as further described in the Company’s executive transition plan.

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The weighted-average grant date fair value of stock awards granted was $ 54.09 per share during the year ended December 31, 2025, $ 50.64 per share during the year ended December 31, 2024, and $ 36.97 per share during the year ended December 31, 2023.

As of December 31, 2024, the Company had $ 12.4 million of unrecognized compensation expense related to non-vested employee stock options to be recognized over a weighted-average period of 2.1 years and $ 13.5 million of unrecognized compensation cost related to non-vested restricted stock awards to be recognized over a weighted-average period of 1.3 years.

As of December 31, 2025, the Company had $ 13.6 million of unrecognized compensation expense related to non-vested employee stock options to be recognized over a weighted-average period of 1.3 years and $ 13.8 million of unrecognized compensation related to non-vested restricted stock awards to be recognized over a weighted-average period of 2.1 years.

Defined Contribution Plan

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INCOME TAXES:

The tax provisions are summarized as follows (in thousands):

The significant components of the tax provision are summarized as follows (in thousands):

Year Ended December 31,

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Provision for income taxes

A reconciliation of taxes based on the federal statutory rates and the provisions (benefits) for income taxes are summarized as follows (in thousands):

A reconciliation of taxes based on the federal statutory rates to the income tax provision (benefits) for income taxes are summarized as follows (in thousands):

Year Ended December 31,

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State income taxes, net of federal benefit (a)

Foreign Tax Effects

Effect of Cross-Border Tax Laws

Tax effect of permanent differences

Foreign tax rate differential

Provision for income taxes

(a) State taxes in Texas, California and Illinois made up the majority (greater than 50 percent) of the tax effect in this category

Share-based payments awards

Executive compensation (b)

Changes in Unrecognized Tax Benefits

Income tax provision

(a) State taxes in California, Illinois and Texas made up the majority (greater than 50 percent) of the tax effect in this category for each year presented.

The executive compensation limitations in years 2025 & 2023 are below the disclosure threshold and are included in other.

The following summarizes the components of net deferred income tax liabilities included in the balance sheet (in thousands):

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Accounts receivable

Vehicle finance lease obligations

Finance and operating leases - Liability

Finance lease obligations

Finance and operating leases

Stock options

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State tax credit

Finance and operating leases - Asset

Fixed assets and intangibles

Difference between book and tax basis- Operating lease assets

Difference between book and tax basis- Depreciation and amortization

Valuation allowance

Net deferred income tax liability

As of December 31, 2025, the Company had approximately $ 42.8 million in state net operating loss carry forwards that expire from 2030 to 2044, which result in a deferred tax asset of approximately $ 1.7 million.

The Company has evaluated whether its state net operating losses are realizable and has not recorded a valuation allowance against them.

The valuation allowance did not change over the prior year ending December 31, 2023.

The Company had unrecognized income tax benefits totaling $ 8.0 million as a component of accrued liabilities as of December 31, 2024, and $ 6.7 million as of December 31, 2023, the total of which, if recognized, would impact the Company’s effective tax rate.

The Company has evaluated whether its state net operating losses are realizable and has recorded a valuation allowance against them.

The valuation allowance increased $ 1.1 million over the prior year ending December 31, 2024.

The Company had unrecognized income tax benefits totaling $ 7.9 million ($ 6.2 million rate impact after net of federal benefit) as a component of accrued liabilities as of December 31, 2025, and $ 8.0 million ($ 6.3 million rate impact after net of federal benefit) as of December 31, 2024, the total of which, if recognized, the net of federal tax benefit 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.

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The Company had approximately $ 625,000 , $ 530,000 and $ 389,000 of interest accrued as of December 31, 2025, 2024 and 2023, respectively.

Undistributed earnings of certain of the Company’s foreign subsidiaries amounted to approximately $ 26.1 million at December 2024 and $ 22.9 million at December 2023.

Those earnings are considered to be indefinitely reinvested.

Undistributed earnings of the Company’s foreign subsidiaries are considered to be indefinitely reinvested.

Upon repatriation of those earnings in the form of dividends or otherwise, the Company may be subject to state and local taxes, and/or withholding taxes payable to the various foreign countries.

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federal income tax liability on the distribution of untaxed earnings and profits.

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

As of December 31, 2025, the tax years ended December 31, 2022 through 2025 remained subject to audit by federal tax authorities and the tax years ended December 31, 2021 through 2025, remained subject to audit by state tax authorities.

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Unrecognized tax benefits at end of period

The table below presents detail to supplemental disclosure of cash flow for Income Taxes paid, net (in thousands):

COMMITMENTS AND CONTINGENCIES :

From time to time, the Company is involved in litigation arising out of its operations in the ordinary course of business.

The Company maintains liability insurance, through self-insurance and third-party excess insurance, including product liability coverage, in amounts deemed adequate by management.

The Company maintains liability insurance through self-insurance, a captive insurer and third-party excess insurance, including product liability coverage, in amounts deemed adequate by management.

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 December 31, 2024, 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 December 31, 2025, the Company believes that there are no pending claims or litigation, individually or in the aggregate, that are reasonably possible 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.

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The following acquisitions, unless otherwise noted, were considered business combinations accounted for under ASC 805 “Business Combinations.” Pro forma information is not included in accordance with ASC 805 since no acquisitions were considered material individually or in the aggregate.

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

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

On July 15, 2024, the Company 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.

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The transaction was valued at approximately $ 16.3 million, with the purchase price paid in cash.

On November 7, 2022, the Company acquired certain assets of Scheppers International Truck Center, Inc., which included real estate and an International truck franchise in Jefferson City, Missouri, along with commercial vehicle and parts inventory.

The transaction was valued at approximately $ 6.8 million, with the purchase price paid in cash.

On May 2, 2022, the Company completed the acquisition of an additional 30 % equity interest in RTC Canada, resulting in an 80 % controlling interest in RTC Canada.

The acquisition was accounted for as an acquisition achieved in stages under ASC 805, Business Combinations .

The acquisition-date fair value of the previous 50 % equity interest was $ 44.7 million, resulting in a gain of $ 7.0 million included in the line-item Other income (expense) on the Consolidated Statements of Income in the year ended December 31, 2022.

The Company also recognized a reversal of deferred tax liabilities of $ 2.2 million and $ 0.6 million related to reclassification of the foreign currency translation adjustment related to the remeasurement of the Company’s previous equity method investment in RTC Canada.

As of May 2, 2022, the Company established a noncontrolling interest related to the minority holders.

The fair value of the 20 % noncontrolling interest in RTC Canada is estimated to be $ 17.8 million.

The fair value of the noncontrolling interest was estimated using a combination of the income approach and a market approach.

Since RTC Canada is a private company, the fair value measurement is based on significant inputs that are not observable in the market and thus represents a Level 3 measurement as defined in ASC 820, Fair Value Measurement .

The fair value estimates are based on:

(i) a discount rate of 11 %;

(ii) a terminal value based on a long-term sustainable growth rate of 3 %;

(iii) financial multiples of companies in the same industry as RTC Canada;

and (iv) adjustments because of the lack of control or lack of marketability that market participants would consider when estimating the fair value of the noncontrolling interest in RTC Canada.

The purchase price was allocated based on the fair values of the assets and liabilities at the date of acquisition as follows (in thousands):

Accounts receivable

Property and equipment, including real estate

Floor plan notes payable

Trade payables

Customer deposits

Accrued liabilities

Notes payable

Franchise rights

Equity investment in RTC Canada

Noncontrolling interest

Gain on equity method investment

The goodwill of $ 44.2 million for the RTC Canada acquisition is primarily attributable to the synergies expected to arise after obtaining a controlling interest in the entity.

Prior to May 2, 2022, the Company accounted for its 50 % equity interest in RTC Canada as an equity-method investment.

After the Company’s acquisition of the additional 30 % equity interest on May 2, 2022, operations of RTC Canada are included in the accompanying consolidated financial statements.

The Company reports information based on operating segments identified in accordance with how the chief operating decision maker (“CODM”) evaluates business performance and allocates resources.

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“Rusty” Rush, the Chief Executive Officer, President and Chairman of the Board.

As of the reporting period, T he Company currently has one reportable business segment - the Truck Segment.

As of the reporting period, the Company has one reportable business segment - the Truck Segment.

The Truck Segment includes the Company’s operation of a network of commercial vehicle dealerships in the United States and Ontario, Canada that provide an integrated one-stop source for the commercial vehicle needs of its customers, including retail sales of new and used commercial vehicles;

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Retail Tire Sales and Insurance Services.

These operating segments do not meet the quantitative thresholds for separate reporting as specified under the guidance of ASU 2023-07.

These operating segments do not meet the quantitative thresholds for separate reporting as specified under the guidance of ASC 280-10.

Therefore, they are consolidated under the “All Other” category in the segment disclosures below.

These segments share accounting policies consistent with the summary of significant accounting policies.

There were no material intersegment sales for the years ended December 31, 2024, 2023, or 2022.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies.

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 December 31, 2025, 2024 and 2023 (in thousands):

Revenues from external customers

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Allocated expenses

Segment operating income (loss)

Segment operating income

Interest income

Interest expense

Net income (loss)

Segment assets

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Allocated expenses

Segment operating income (loss)

Segment operating income

Interest income

Interest expense

Net income (loss)

Segment assets

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Allocated expenses

Segment operating income (loss)

Segment operating income

Interest income

Interest expense

Net income (loss)

Segment assets

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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-K

Item 8. Financial Statements and Supplementary Data