Rush Enterprises, Inc.

Thank you for standing by. My name is Janice, and I will be your conference operator today. At this time, I would like to welcome everyone to the Rush Enterprises, Inc. report, first quarter 2025 earning results. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would like to turn the call over now to Mr. Rusty Ross, Chairman, CEO, and President. Please go ahead.

Well, good morning, everyone, and welcome to our first quarter 2025 earnings call. With me on the call this morning are Jason Wilder, Chief Operating Officer, Steve Keller, Chief Financial Officer, Jay Hazelwood, Vice President and Controller, and Michael Goldstone, Senior Vice President, General Counsel, and Corporate Secretary. Before we begin, Steve will say a few words regarding forward-looking statements.

Certain statements we will make today are considered forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. Because these statements include risk and uncertainties, our actual results may differ materially from those expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, those discussed in our annual report on Form 10-K for the year into December 31, 2024, and our other filings to the Securities and Exchange Commission.

As we stated in our news release yesterday, in the first quarter we achieved revenues of $1.85 billion, and net income of $60.3 million, or $0.73 per diluted share. We remain committed to returning value to our shareholders, so I'm proud to announce that our Board of Directors has again declared a cash dividend of $0.18 per common share for the quarter. The business environment in the first quarter was difficult, to say the least. The industry continues to struggle with a freight recession, economic uncertainty, growing concerns around U.S. trade policies and tariffs, and the future of emissions regulations. These factors caused a slowdown in customer activity, particularly in the Class 8 over-the-road segment. Truck sales to Class 8 customers were weaker as we began the year. However, thanks to our continued focus on strategic initiatives, and our diversified customer base, we managed to outperform the broader market in the first quarter, primarily due to strong sales to the vocational and public sector customers. In the medium-duty truck sales market, while the overall market was down, our unique ready-to-roll inventory program was particularly effective, and again, we outperformed the industry with steady Class 4-7 sales in the quarter. From a used truck perspective, we saw a typical seasonal pattern, slower sales in January and February, but a good pickup in March, giving us sequential growth from the fourth quarter. With respect to our aftermarket results, our parts, service, and body shop revenues were $619 million in the quarter, down 4.6 compared to last year. Our absorption ratio was 128.6 compared to 130.1 in the quarter Q1 of 2024, but still very strong. Despite tough market conditions, we experienced a slight improvement in aftermarket sales revenues compared to the fourth quarter of last year, with demand from our public sector, vocational, and medium-duty leasing customers remaining steady and sales to the energy sector beginning to pick up. We also expanded our aftermarket sales force in the first quarter, which should help us provide an even higher level of service to our customers going forward. All things considered, operation, all things considered, operations in the first quarter. Looking ahead, we expect to see some improvement in aftermarket revenues in Q2. We added service technicians during the first quarter, which will allow us to decrease customer dwell time going forward. We also continue to optimize our parts delivery routes and improve our call center operations, which helped us serve more customers efficiently. With respect to the second half of the year, we are actively monitoring the supply chain. and the impact that proposed tariffs may have on parts availability and pricing. We believe that we are well positioned with our parts inventory to mitigate the effects of any potential supply chain disruptions. The Class 8 new truck sales market continues to face challenges. ACT Research says that U.S. and Canadian retail truck sales totaled 57,946 in the first quarter, down 9% year-over-year. By comparison, we were down 7.8%, selling 3,222 new Class A trucks and accounting for 6.1% of the total U.S. market and 1.1% of the new Class A market in Canada. While this was a tough quarter, I'm pleased that we outperformed the market. Looking ahead at Q2 and the back half of the year, ACT Research revised its U.S. and Canadian Class A sales forecast downward to 234,600 units in 2025. a 14.7% decline compared to last year. However, we do anticipate a slight improvement in Class 8 sales in the second quarter due to the timing of some fleet deliveries. At this point, there is too much market uncertainty to predict what demand will look like in the second half for our over-the-road customers, but we remain optimistic about demand from our vocational and public sector customers throughout 2025. In medium-duty sales, the overall market declined 3.5% in the first quarter, but our performance remains stable, and we sold 3,329 new Class 4-7 trucks, outpacing the market and increasing our market share to 5.6% of the U.S. Class 4-7 market and 3.1% of the Canadian Class 5-7 Canadian market. ACT Research forecasts U.S. and Canadian sales of Class 4-7 trucks to be 254,050 in 2025, down 7.2% compared to last year. Going forward, we expect customers to be cautious replacing vehicles rather than expanding their fleet. But our strategic approach to stocking work-ready vehicles should allow us to meet customer needs when and where they need vehicles, and we expect to continue to outperform the market this year. We sold 1,769 used trucks in the first quarter. down 2.7% compared to 2020. As of now, demand remains soft and tariffs haven't yet affected used truck pricing. But we've been proactive in increasing inventories slightly in preparation for the spring and summer selling season. And we believe our stock levels are where they need to be to meet customer needs. Our rush truck leasing division delivered solid results again in the first quarter. Leasing and rental revenue increased 2.3% compared to Q1 of 2024 and totaled $90 million for the quarter. Rental revenue was down just slightly year over year due to lower utilization rates, but full-service leasing continues to perform well as we put additional vehicles into service. I'm confident that our leasing and rental business will stay strong throughout the year. While we faced our share of challenges in the first quarter, I'm proud of how our team has navigated the uncertainty that is currently impacting the commercial vehicle industry. As I said in the news release, what remains unclear for us and for the industry as a whole is how the second half of the year is going to play out. The ongoing concerns around tariffs, their impact on the economy, and how current emission regulations may be modified are making some customers hesitant to move forward with vehicle purchasing decisions. That said, I'm confident in our position as we navigate these challenges, and I believe our dealer network, strong relationships with customers and manufacturers, and our broad product offerings will allow us to respond quickly as these policies take shape. Before I close, I want to take a moment to thank our employees. The first quarter of 2025 has been tough, but our team has shown incredible resilience. They work tirelessly to help customers through these uncertain times while keeping our long-term goals in sight and continuing to manage expenses. Their dedication directly contributed to our performance this quarter, and I am extremely grateful for their efforts.

And with that, I'll take your questions.

At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. Your first question comes from the line of Daniel Imbrow with Stevens. Please go ahead.

Yeah. Hey, good morning, guys. Thanks for taking the questions.

Good morning, Daniel.

Rusty, obviously a lot of moving pieces out there. Maybe we'll just start on the demand backdrop. Exactly. Can you talk about maybe how new unit sales trended through the quarter and maybe here into April? We've seen a lot of the larger fleets lowering their capex orders. I know those aren't always your customers, but are your customers behaving in a similar way? What are your customers telling you about their planned expenditures for the rest of the year?

Well, I think we're taking the approach that hopefully as we get to the back half of the year, it'll be somewhat similar to what Q2 was, right? With these ever-moving tariffs that are going on, besides business being rough, right? I mean, you've seen the earnings releases that have come out from all the carriers, right? And we do do business with those carriers. A lot of them, not all of them by any stretch, but they are a component of what we do. So, you know, the tariff bouncing around has made it very difficult. If you'd have come to me 60 days ago, I would have said the same thing about Q2 that I'm telling you about the back half of the year. But once we got a little clarity, when I say clarity, we got clarity like 60, 90 days out. but we don't have clarity throughout the whole year, and that's the toughest thing we're dealing with, right? So, you know, I would have said, oh, boy, I'm really concerned about Q2. As I mentioned in there, we expect deliveries to be slightly up, not dramatically, but slightly ahead of what Class A deliveries were in Q1. So, I mean, it's just those uncertainties, you know, Daniel, I mean, Like you said, a lot of people, I know people, I'm not going to name names, but I know people that have shut off Total Bike for the back half of the year. And it's understood that it's just really, really difficult. So I'm hoping the same thing happens with Q3 and Q4. You've heard me use this phrase a few times over the last year or so. It's hand-to-mouth, baby. But it's not something we're not used to. I would tell you that backlogs while the OEMs we deal with are not full for Q2 still. There are still slots available in June. So as you can see, it's hard to put your arms around where Q3 is going to be when you've still got slots available in Q2. Not a whole lot, but there are some slots that are available in Q2. And it's very difficult to price right now. Because Tariffs just came up again last week. They're being relooked at again. I mean, we still don't have certainty around the emissions. You saw the House maybe yesterday pass the bill as the federal government's going back and forth with CARB out in California. We're going to see how that all plays out. We do not have established emissions. We have them, but they're under siege right now. right or wrong for January 1 or 27, right? So I expect those to change. I don't have the detail. I'm not here. I'm not going to project on what that will. I will change. But with the current administration that's in it right now, there's no question it's going to change. And it should change. But all these uncertainties just create uncertainty. It's hard to run a business living in an uncertain world like that. So it may be this way for a while, okay, until things smooth out. And I can't tell you when that is. I think there's another, I don't think we'll get any on the emissions side. I think we're still 45 days or so away from getting more clarity. I know the bill was going to be going to the House as we try to come up with a solution that makes sense, not the one that's in place currently, which does not make sense. And the tariff thing, like I said, they're re-looking at it again as of last week. So, you know, I mean, I think we're going to see us operating in these short windows. I don't think you're going to see these big backlogs out through the rest of the year. And if you do, And if you're counting on backlogs in the fourth quarter being worth the paper they're written on, good luck because things change quickly right now. So I think there will be some, you know, demand, but I'm in line with what ACT said when it comes to, you know, they're off around 15%. I'll take that right now, to be honest with you, for the year as I look out there and see, you know, and I'm not trying to be Debbie Downer here about it, but it's just a reality of what we're dealing with. But I think you see that You know, we were still able to put out a pretty good border, given everything we're dealing with. And I would hope that we'll be able to continue to operate it. Look, you know, let's go back. We don't talk about Russia in particular. I know I'm rambling on, but here we go. Let's go back to 2020, right? Let's go back to COVID. Go look at the performance of the organization, whether we had allocation or five-week lead times. We've been able to perform, and I expect us to continue to perform as we go forward, no matter what the environment is.

Yeah, well, let's hand them out. At least you guys have the experience and done this before. Maybe for my follow-up, Rusty, if you could just expand a bit on the parts and service. Obviously, it was softer in one queue. Was that more in any one part of the business, collision, big fleets for small fleets? And then you mentioned you expected an improvement in two queues. Did you mean a return to year-over-year growth or just sequentially higher than the first quarter?

Sequential, okay. I'm hoping, but I'm not here to guarantee any year-over-year growth, right? I think, you know, one of the key things is you asked about Q1. We'll start there. You know, it started off slow. I mean, weather in January, I know there's always weather, but we had more store shutdown days this year than we did the prior year. In January, it was some of the rough weather that came through. I was very concerned in January. We saw a pickup in February, and we saw a pickup from there into March. I mean, I'll be honest, we just looked at April this morning. Obviously, it's the first of May. April was solid. It was choppy, maybe a little off per day average, but it looks like our backlog is similar. When I talk about that, that's a working process as to what were the end of March, very similar within a point or so. So I'm not, you know, it's just a little bit, it's choppy, right? You know, again, The uncertainty is wrapped around, like right now, you can ask anybody, what you're seeing lots and less of is miles driven. Miles driven is not really good. You'll see that customers, especially the over-the-road customers, are not putting the miles on their vehicles that they historically had. And obviously with less miles, probably needs less maintenance and less repair to go with it. That said... Given the dynamics of all the programs that we have out there, I do believe we'll be able to have sequential growth because January and February were softer. We picked up through March, but a little bit choppy and maybe here. I'm just looking at numbers today for April, but we're real close. Typically, these months are better months for us. When you get into May and June and July, you get into summer and your air conditioning work picks up and things like that around the country because we have a lot of stores in the south. So I would look for sequential growth. I'm not here to commit to year-over-year growth. What I have to be able to commit to is if you look at our expense management. Year-over-year, we were down in G&A, which is what I really look at. That's just nothing but a derivative. of sales, but G&A was off 5.5% year-over-year. That's why you only saw a 1.5% drop, really, in the store operating absorption number, right? They're 4.5 down, but you're only 1.5. You made a lot of it up from an expense perspective, right? That's the key thing is we do have more than one lever to hit as we go without tearing it apart. So, you know, again, choppy, you know, but we're pretty fluid, as I said. I believe we proved that out over in the last five years in the business model, and we'll continue to operate in the environment in the hand we're dealt. And I'm confident in the company. I'm confident in our folks. I'm confident in our leadership that we'll make the right decisions to continue to, in my mind, outperform the market. Even though we're the only public truck dealer, really, that's just a truck dealer. I know that I've got one or two other comps out there. I do expect us to outperform like we usually do in the past.

All super helpful, Culler. I really appreciate it, and best of luck. You bet. Thank you.

Your next question comes from the line of Andrew Obin with Bank of America. Please go ahead.

Hey, Rusty. How are you? I'm good, Andrew. Okay. So just as I hear you correct on second quarter, sequentially Class 8 is going to be better and sequentially Parts and Services is going to be better. That's right, right? I heard that correct.

Well, let's face it. Whoa, Andrew. Whoa, whoa, whoa. Slightly.

Slightly.

Let's not get carried away here. The problem is the uncertainty, man. I'd tell you what it was exactly like if I knew, but if you hadn't noticed, since we had our first 100 days, every day has been different since January the 20th, and I'm not being critical there, but a lot of stuff changes on a daily basis, and It just makes it very difficult running a business. And for me to get forecasts that are out there, that's why I'm only going, you don't see me going out in the back half of the year. Like I told you a minute ago on the call, I'm 69, but I told you Q2 60 days ago. But we were able to put something together when we got some clarity of what pricing was going to be in Q2, right? But again, they're relooking at tariffs again. So the back half of the year is still up in the air. and also dealing with what's going on in the economy. No, no, no, no.

Okay, no, I totally appreciate it. And can you just tell us sequentially, and I know in April, you know, there were some holiday timing issues, but parts and services in April, did that get better or did that stay stable from March or did that slow down? And, you know, I know we're getting hyper-grangular here, But was there a slowdown in April?

Okay, a slightly less than April per day average. But I attribute it, hopefully, hopefully I'm right, I attribute it to the Easter week, okay? Easter week, we did not have a very good week, right? I will tell you this, we closed good. You know, we didn't catch it all up here at the end, but we did close better here over the last week. So I'm hoping that we can maintain some of that. And by the way, it was still better than January and February, okay, you know, per day average. So it wasn't quite to where April was on a per day average. But, you know, Easter week was a rough week. And if you'd asked me where we ended up today, if you'd asked me a week ago, I would have taken it, okay? So I felt we had a good close to the month. And I know we're getting granular. But, you know, there's certain pockets in the country where, that, you know, I can attribute. I know you always like to know where around the country where things are, but there are certain pockets that you can attribute some of this, you know, a little bit of softness to, to be honest with you.

Okay. And then as I think just, you know, I assume that DNA is just fixed is what it is, but as I think relative to 22, right, as I think about SG&A costs, is that a good baseline for for what SG&A can be, or we are so bare bones during COVID that it's not applicable, and I should just assume that there has been some inflation over the past two, three years.

Yeah, no, let's not go back that far down. There's no way I'm going to get back down to that number right now, or I'll be cutting meat and bone out of the place. It costs a little bit more money. We didn't give back all that inflationary pressures that we took in 23, and 22 is not like we've had deflation. So, you know, you continue to have inflation. That's why we've maintained pretty flat. Since I made those cuts last year around this time, right now, a year ago, we've maintained, which is what's allowed us, you know, that's why Q1 was off 5.5% over last year's Q1. We've been able to hold it. Is there more we can do? Possibly. We're continuing to look at that, you know, on a rather daily, weekly basis. But again, As I get clarity, I make those decisions. I continue to get clarity of the market I'm in, right? I'm going to see how April closes. I'll get the nets on April. I'll look at where we are from a G&A perspective. I mean, when I say hand-to-mouth, it's hand-to-mouth in every facet of the business. Is that a bad thing? No, it's just the reality of it, right? And I don't think anybody, I'm very confident in our ability to react to maybe I can't project as well as I'd like to project for you, but I'm very confident in our ability to react or proactively act, should I say, given what we see in front of us. It's just the runway is really short. There's a lot of haze, a lot of fog. When I rolled off all the things that are going on, and that's not just for me, that's for our customers. Remember, we're driven by what customers see, what they do, what affects them. It's hard to make a decision if you're a customer. to go out and make an acquisition of product. You're not going to see any growth. Even to when you're running less miles, maybe you don't have to replace it as often, right? I mean, there's a lot of things that are not positive, but out there from the macro perspective, the most positive thing is our ability, in my mind, to be able to navigate and make the right decisions given the market that we're headed. So, you know, again, though, I'm not projecting – doom and gloom in the back half, I'm just giving uncertainty because I don't have clarity for it. And as I get it, I'll be happy to tell you.

That's why I'm giving you a little... Yeah, and what do you think it would take for OEs to sort of, you know, get more clarity on sort of production schedules for the second half Is it clarity on, you know, and I appreciate that it's both uncertainty about whether or not we're going to recession, but it's also uncertainty about, you know, sort of treatment of their content, you know, under the new tariff rules. Do they go together hand in hand? Or, you know, I know that one of the competitors has sort of has given pricing, but it doesn't seem to sort of drive demand for trucks. You know, what sort of unclogs this bottleneck?

Well, one has, but there's some stipulations wrapped around it. Remember, sometimes the devil's in the detail. Always remember that. And so as you look at it, look, Andrew, it's all the above. It's our customer's business. It is our, you know, the clarity with tariffs. As I said, they just announced they're going to do a relook last week. That's supposed to happen over the next few weeks. It could change again, just like it did on the automotive side today, this week, right? I mean, we don't, I mean, their business, our customers' business is not, I think we saw that first quarter GDP results. Go look at the earnings releases of the public carriers. They're not that's good. They haven't been, and it's no disrespect to them. It's just the facts of the market they're dealing with, okay? Fortunately, as I've talked about, we've had decent vocational business. decent municipal business that have allowed us to continue to perform. What's going to have to happen is business has to get better. We can't have contraction in GDP and expect us for business to get any better. People are going to have to start running more miles. We've got to get clarity on tariffs. We think we have them right now. But as I said, they just announced last week they're going to re-look at it again. And we do not know about emissions. I do believe it's not going to be as stringent in 21. We were supposed to have this big pre-buy, right? Big pre-buy. Going to start at 25. That's the end, back half of 25. Now, nobody even talks about it. Why? Because we don't even know the regs. The regs are not done. It's probably 45 days. The house passed yesterday. some stuff around it. The Senate's got to take it on. But so again, that's clarity, right? Are we going to need it? Is the price going to go up X? Are we going to require these super long extended warranties? What is, what's the, you know, what are the milligrams going to be when they're in the non-stuff? I mean, all we were pushing out GHG3 out into 2030, but there's no, there's no solid answer on all of that. And you throw all these things in along with a tough economy and less, you know, not miles being driven. Andrew, I don't have your answer. All I can tell you is I'm not saying it's doom and gloom. I'm just saying it's a short window. I cannot see out that far, and I don't think anybody can really right now.

And just the last question for me, what's been access to credit? Are people still willing to finance customers or people who provide credit to the industry? Are they providing, you know, are they pulling on credit or are they providing incentives? What's happening in terms of sort of liquidity in the market and ability for you and your customers to access credit? Is it hard or the same? Thank you.

Not the same. Credit is not – I don't see any issues with credit, you know, at the moment. You know, I mean, there's not a lot of people running around taking subprime credit. But other than that, if you've got – You know, you've got a good balance sheet, you've got a good customer. No, there's still availability of money out there for you. That's not an issue. And when you say incentives, I don't know if you're talking about vehicles or not. There really is nothing like that going on because we're just pricing out a few months right now. Most of the manufacturers are. As I keep saying, when a manufacturer steps out, devil's in the details. I understand sometimes. And that could be under... Since they announced last week that they're relooking, I would be very concerned. But I understand why manufacturers have not been able to stretch out. I don't like it. Neither do customers. But you're living in an environment that changes. It was changing February to March to April. And now we're doing another relook. So it's just difficult. All I can tell you is I'm very confident in us. Our track record speaks for itself. We're nimble. We will sell trucks. We will work on trucks. And we will continue to produce solid results. We have many levers to pull. We don't just sell trucks. We don't just sell parts. We don't just sell service. We sell a lot of different things. We have expense lines to work with. We have many different levers to outperform the market, regardless of the hand we're dealt. That's all I can tell you about it. I don't have the answers as to what the back half is going to look like, but I can tell you as soon as I know, I'll let you know if you want to know.

I'll take it. Thanks so much, Rusty. You bet you.

Your next question comes from the line of Abby of UBS. Please go ahead.

Hi. Good morning, guys. Good morning.

So I know it's got to be hard to parse this out, but In the hesitancy that you are seeing from customers, you know, would you say it's more from the uncertainty to the prices or more just the uncertainty on the macro impacts that would affect their revenues or profitability?

I would say, first and foremost, their business, you know.

I mean, I don't know that I could – I'm not going to say 60-40 or 55-45. It's both. You know, the first thing that needs to happen for someone to get confidence is your own business has to be solid, right? And I think if you read some of these reports, they've been really difficult, right? So, and, you know, people can stretch out lives on vehicles. But it's also very difficult when I can't price them and tell them what I'm going to sell them a truck for in October or November or, you know, any of those things. You do it with, here, your price is this, with a caveat, unless somebody decides to change the tariff rules. And customers understand that. They don't like it. We don't like it. But for me to say which is more is both. I know that's kind of a lame answer, but it's the truth. And that's all I ever tell. So it's the truth is both. But first, your business has to be good. First off, no one's growing their fleet. Let's get real. You're just trying to get replacement, but people can slow replacement down too. Products are not what they were 30 years ago. They're much better. You can put more miles on products. By the way, if you're not running as many miles, I can run it longer. I keep appreciating what I got. Mileage, as I said earlier, I mentioned a couple times, miles being run on vehicles, I'm not getting into ton miles. I'm getting into vehicles themselves. Or not, you know, or down. So I can probably stretch it out a little bit. Again, you know, it's just we just need some certainty around all of this, by the way. Tell me what it's going to cost for a vehicle in January 27th. I don't know. We know it's going to be less than what it was projected to be a year ago. We just don't know how those regs come out and how that affects, you know, the OEMs and the engine manufacturers. and how it affects what it's going to take from a cost perspective, from their perspective, especially on the warranty piece. So their business first and then tariffs next. But I can price you for 60 days, but I really can't price you six months out without a caveat.

That definitely makes sense. I guess part of what I'm trying to understand is just if the economy does end up holding up okay, what kind of demand destruction we could see just from the higher prices. I don't know if you have a view on that. I'd be curious.

Well, I think we'll see if the economy would hold up and just this is what it's going to be. You know, it's something I've always told everybody. You tell me the rules and I'll figure out how to play the game. The problem is they keep changing the rules, man. And so that's made it a little bit difficult, not just for me, but for my customer base. So, The cost is what the cost is. You know, unfortunately, prices of trucks have gone up dramatically, as we all know. It's crazy to me. I think back to how much they've accelerated over the last few years, especially the last couple, three. But, you know, and then your business has to be better. Why? So you can push those costs through. And that has not been the case. We had an oversupply of trucks for a couple of years, remember? We sold all those trucks in – really in 22 and 23. And we still had a pretty big year in 24, more than we were anticipating when we went into it. So, you know, there's been an oversupply of trucks for the freight that's out there. And it's just been a... I've never seen a freight recession last this long, right? It's been quite unique. It's on the negative side of uniqueness, by the way. So, I mean, I... I know it's, I'm hoping that we can get some stability in, you know, in the overall economy and continue to, I'm not sure where we're at in the last couple months, taking trucks out of the marketplace because we had to get a balance between supply and demand so that customers, we thought, remember, six months ago, we thought we saw it turn, right? You know, we're going to get it turned and by right now, you know, they're going to get rate increases. If they are, they're really slight You've seen the reports that are out there. They're not what we were anticipating giving on contracts six months ago, but who anticipated all this upheaval with tariffs and everything else? You look at what's going on. It'll be going on at the ports. We haven't seen all the effects of it yet either. Those effects are still coming downstream. Again, I'm not being Debbie Downer. I'm just a realist. I have concern for my stuff in California. You know, those ports with all that Chinese stuff that comes in and how much flows through the port of LA and the port of Long Beach. Now we'll navigate it, but it's still not good for business overall. Um, you know, because what we're doing is more of a longer term, all these tariffs to drive manufacturing back to our country. You don't just add water and stir or flip a light switch and we still pop it up at new manufacturing plants. That takes time. Well, there's an interim of pain. Even our president said that there's, you know, there's going to be some pain and you know, that's what we're dealing with. And I think that's what we will continue to deal with for the near term future. Um, because it's just we haven't gotten to all of it yet by any stretch, okay? I can tell you that. And then it keeps changing. So it's just hard.

Yeah, definitely understand that. Just want to circle back to the regulations quickly. You know, last quarter you, you know, felt pretty confident that we would still see the low NOx regulations uh, take place, you know, with or without the warranty. You still think that's the case or just no confidence?

Well, I don't want to, I don't want to get in where I shouldn't be. I think you're going to have something lower. Yeah. But it's not, it may not be as low as what they had. Okay. That's being, that's being debated right now by people above my pay grade. So, uh, I would tell you that, you know, it sure is going to be lower than what it currently is, but it may not be as low as what was originally said or originally, you know, put out there. So, but that's going on as we speak. You know, that debate is going on as we speak. I don't, you know, giving insight into that would probably be a little out of my, I don't think I should. So, I don't know. Let's see. Someone's going to tell me. Yeah, we'll know in this quarter. That's what I said earlier. We'll know in 45 days or so. We'll know where we're at. By the time this quarter's over with, we'll have the answers. I'm going to just let it play out and stay out of it. It's going to be a good thing, okay? There's nothing wrong. What we were trying to do was just not right. This country in no way was prepared to flip a switch and everything go electric and all this stuff. We don't have the grid, the infrastructure. That's a long-term equation, and we had people running with it like, you know, it's just easy, like add water and stir. Well, there's 120 years of infrastructure investment in internal combustion, and you're not going to change it in five or six years. That was asinine to believe you could do that. So it's a good thing how it works itself out. as to what the levels are, that's for smarter people than me to figure out, but it's going to be the right thing, right? It is the right thing to do. So that's all I can tell you. But what that does is it probably doesn't drive as big a pre-buy, right? Especially with the tough overall economic situation that we're certainly, we're liable to see caused by tariffs and caused not just by tariffs, but just everything that's going on right now. So, You know, I'm not closing the door to a pre-buy at 26 by any stretch. But, you know, every day that goes by, the chain where it went at 27 gets closer. So you're condensing it, right? You're condensing that time frame. And you're fighting an uphill battle when you've got news, all the reports, how rough it is on customers anyway. Regardless, you know, I've got to have business regardless of the price of a truck. regardless of the technology. I've got to have my business fairly straight so I can go buy something, right? So, you know, those are some headwinds. But I would expect a pre-buy of some kind. I just don't think you can clearly say what it'll be given the unknowns of regulations, first off, and the unknowns around the tariffs. But really, when you talk about the federal unknown of regulations, those regulations will have a lot to say And then their business. Remember, first and foremost, it's your own business. I mean, I could take you back. I remember in 2010 when we switched to SCR. Okay? We were going to have this big, big year in 2009. Remember 2008 and 2009? Well, the economy kind of rode over all that, didn't it? And you can go look at the numbers. 2009 never made the pre-buy it was supposed to. So, again... Hopefully, we can get the economy straight. Hopefully, we can settle down some of this uncertainty that's out there that's been created in this last 100 days and get back on where we can see a window, see a path in front of us to where, okay, I can make that investment. I can do this. I know where my business is going. That's the key thing. All these things getting flushed out and giving us some direction. That's the most important thing I can tell you for someone like myself. I know running my business. But I'll say it one last time is the fact that I am very confident in Rush Enterprises being able to make adjustments and navigate the uncertainties of the world we're in and give performance above and beyond our peers.

All makes sense to me.

All right. I appreciate the perspective. Best of luck. You bet.

I will now turn the call back over to Mr. Rusty Rush, Chairman, CEO, and President for the closing remarks. Please go ahead.

Sure. Well, I appreciate everyone's attendance this morning, and I look forward to talking to you sometime in late July. Hopefully, hopefully with some more certainty and clarity, maybe I can give you a six-month window instead of a three-month window, okay? Anyway, everybody have a great day. Thank you very much.

Ladies and gentlemen that concludes today's call. Thank you all for joining. You may now disconnect.