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 questions 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. Rush, 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 10K for the year into December 31st, 2024 and our other fileings 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 73 cents 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 cashed dividend of 18 cents 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 US trade policies and tariffs, and the future of emissions regulations. These factors caused a slowdown in customer activity, particularly in the Class 8 -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 -to-roll inventory program was particularly effective, and again we outperformed the industry with steady Class 4 through 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, 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% -over-year. By comparison, we were down 7.8%, selling 3,222 new Class 8 trucks, and accounting for .1% of the total U.S. market and .1% of the new Class 8 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 8 sales forecast downward to 234,600 units in 2025, a .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's too much market uncertainty to predict what demand will look like in the second half for our -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 .5% in the first quarter, but our performance remains stable, and we sold 3329 new Class 4 through 7 trucks, outpacing the market and increasing our market share to .6% of the U.S. Class 4 through 7 market and .1% of the Canadian Class 5 through 7 market. ACT research forecast U.S. and Canadian sales of Class 4 through 7 trucks to be 254,050 in 2025, down .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 .7% compared to 2021. As of now, demand remains soft, and tariffs haven't yet affected used truck pricing, but we've been proactive in increasing inventory 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 delivers solid results again in the first quarter. Leasing and rental revenue increased .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 worked 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's core, 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 Inbrough with Stevens, please go ahead.

Yeah,

hey, good morning, guys. Thanks for checking the questions.

Good morning,

Daniel. Rusty, obviously a lot of moving pieces out there. Maybe we'll just start on the demand backdrop. Can you talk about maybe how new unit sales trended through the quarter, 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 plans and 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, 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, okay? 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, 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 8 deliveries were in Q1. So, I mean, it's just those uncertainties, Daniel. I mean, it's, and like you said, a lot of people, I know people, I don't wanna go to name names, but I know people that have shut off Total Buy for the back half of the year. And it's understood that, you know, that it's just really, really difficult. I don't have to give you a, so I'm hoping the same thing happens with Q3 and Q4. Kids say, you've heard me use this phrase a few times over the last year or so, it's hand to mouth, baby. And, but, you know, it's not something we're not used to. I would tell you that backlogs while the OEMs we deal with are not full through Q2 still, there are still slots available in June. So, as you can see, it's hard to put your arms around, you know, where Q3 is gonna be when you still got slots available in Q2. Not a whole lot, but there are some, you know, slots that are available in Q2. And it's, we don't, it's very difficult to price right now, you know, because tariffs just came up again last week, they're being re-looked at again. I mean, we still don't have certainty around the emissions. Okay, you saw that House maybe yesterday, you know, passed a bill as the House, you know, as the federal government's going back and forth with CARB out in California, we're gonna see how that all plays out. Is we still, we do not have established emissions, and we have them, but they are under siege right now, right or wrong, for, you know, 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 gonna project on what that will, well, I will change, but with the current administration that's in it right now, there's no question it's gonna change, and it should change. But all these uncertainties just create, 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 is gonna 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 if we're gonna 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 demand, but I'm in line with what ACT said when it comes to, you know, they're off of around 15%. I'll take that right now, to be honest with you, for the year, as I look out there and see, 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. 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, we're five weekly 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 had the experience and done this before. Really, for my follow-up, Rusty, if you could just expand a bit on the Parson 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 -over-year growth, or just sequentially higher than the first quarter?

Sequential,

okay.

I'm hoping, but I'm not here to guarantee any -over-year growth, right? I think 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 we're at 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 go 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 -the-road customers, are not putting the miles on their vehicles that they historically have. And obviously with less miles, probably needs less maintenance and less repair to go with it. That said, given, you know, 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, right? 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. So, and typically these months are better months for us. When you get into May and June and July, get into summer, and your air conditioning work picks up and things like that, you know, around the country because we have a lot of stores in the South. So I would, you know, look for sequential growth. I'm not here to commit to -over-year growth. What I have to ever commit to is if you look at our expense management, you know, -over-year we were down in G&A, which is what I really look at. I mean, S is nothing but the derivative of sales. But G&A was off .5% -over-year. That's why you only saw a .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 the 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've said. We proved that out over the last five years in the business model and we'll continue to operate in the environment in the hand of what's left. 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, Coler. I really appreciate it and best of luck. You bet. Thank you.

Your next question comes from the line of Andrew Open 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. I heard that correct.

Well, let's ease. Whoa, Andrew, whoa, whoa, whoa. Slightly. Now I get it. Slightly. Let's not get carried away here. The problem is the uncertainty, man. I'll tell you what it's 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 you know, a lot of stuff changes on a daily basis. It just makes it very difficult running a business. And for me to give 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. I got told a minute ago on the call, I'm 69, I couldn't have told you Q2 60 days ago. But we were able to put something together when we got some clarity on what pricing was going to be in Q2. But again, they're re-looking 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.

So

we expect slightly.

Okay, no, I totally appreciate it. And can you just tell us sequentially, and I know in April 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 how did it, I know we're getting hyper-granular here, but was there a slowdown in April?

Yeah, a slightly less than April per day average. But I attribute it, hopefully, I'm right, I'm attributed to the Easter week, okay. Easter week, we did not have a very good week, right. I will tell you this, we closed it. 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. 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. I know we're getting granular, but there's certain pockets in the country that I can attribute. I know you always like to know where in the country where things are, but there are certain pockets that you can attribute some of this, 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 cost, is that a good baseline 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, Don. There's no way I'm gonna get back down to that number right now. I'll be cutting meat and bone out of the place because 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, not like we've had deflation. So, you know, you've continued 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, it's like Q1 was off .5% over last year's Q1. We've been able to hold it. Is there more we can do? Possibly, but 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 try to continue to get clarity of the market I'm in, right? I'm gonna see how April closes. I'll get the nets on April. I'll look at where we are from a GNA 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. 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. You know, there's a lot of haze, a lot of fog. And when I rolled off all the things that are going on, and that's not just for me, that's for our customers. And then we're driven by what customers see, okay? 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 gonna see any growth, even to what 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, that out there from the Mackerel 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 I, 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, a little bit of a side to choose from. 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, 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 because 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. That 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 customer's 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 markets they're dealing with. Okay? Unfortunately, as I've talked about, we've had decent vocational business, decent, you know, municipal business that have allowed us to continue to perform. What's going to have to happen is business has to get better. Well, okay, we can't have contraction in GDP and expect us to, for business to get any better. But people are going to have to start running more miles. You know, we're going to, you know, it's, and we got to get clarity on tariffs. I mean, we think we have them right now, but as I said, they just announced last week to go to relook at it again. So, and we do not know about emissions. Okay? I do believe it's not going to be as stringent in 21. You know, we were supposed to have this big pre-vot, right? Big pre-vot, going to start in 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? So price is 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 next stuff? I mean, all we were pushing out GHC's regot into 2030, but there's no solid answer on all of that. And you throw all these things in, along with the tough economy and less, you know, not miles being driven. And I don't have your answer. All I can tell you is I'm not producing this doing it. I'm just saying it's very, it's a forked window. I cannot see out that far. And I don't think anybody can really right now. And the sustainability of it.

And just the last question for me. What's been access to credit? Are people still willing to finance customers? Are, you know, sort of people who provide credit to the industry, are they providing, you know, are they pulling on credit or they're 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's not, I don't see any issues with credit, you know, at the moment, you know? I mean, you know, 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, I don't think there's still availability of money out there for you. That's not an issue. And I, 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, one manufacturer stepped out, devil's in the details. 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, need to do customers, but you're living in an environment that changes. You know, it was changing February until March to April. And now we're doing another relook. So it's just, it's just difficult. All I can tell you is, you know, I'm very confident in us. You know, track record speaks for itself. We're nimble. We will make, we will sell trucks. We will work on trucks. And we will continue to produce solid results. We have many levers to pull. It's not just, we don't just sell trucks. We don't just work to sell parts. We don't just sell service. We sell a lot of different things. We have a dispense lines to work with. We have many different levers to outperform the market, regardless of the hand we're dealt. Okay, that's all I can tell you about it. I don't have the answers as to what the back is gonna look like, but I can tell you, as soon as I know, I'll let you know if you wanna know.

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

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

Hi, good morning, guys. Good morning.

So I know it's, I know it's gotta be hard to parse this out, but in the hesitancy that you are seeing from customers, when you say it's more from the uncertainty to the prices or more 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 gonna 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 gonna sell them a truck for in October or November or any of those things. So you do it with, here your price is this, with a caveat unless somebody decides to change the tariff laws, you know, rules. You know? And customers understand that. They don't like it. We don't like it. But, you know, for me to say which is more, it's both. Okay? I know that's kind of a lame answer, but it's the truth. And that's all I would tell. So, you know, it's the truth is both. But first your business has to be good. Why am I, first off, no one's growing their fleet. Let's get real. Okay? The only people that, if you're just trying to get replacement, but people can slow replacement down too. You know, products are not what they were 30 years ago. They're much better. You can put more miles on products. And by the way, if you're not running as many miles, I can run it longer. Keep appreciating what I got. And 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 gonna cost for a vehicle in January 27th. I don't know. We know it's gonna 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 the OEMs and the engine manufacturer. And how it affects their, you know, what it's gonna take from a cost perspective, from their perspective, especially on the warranty piece. So, you know, 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, you know, 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. We'd be curious. Well,

I think we'll see if the economy would hold up and just, this is what it's gonna be. You know, it's something I've always told you, but you tell me the rules and I'll figure out how to play the game. 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 wise 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, you know, 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 know it's, I'm hoping that we can get some stability in the overall economy and continue to, I'm not sure where we're at in the last couple of months, taking trucks out of the marketplace because we had to get a balance between supply and demand. So the customers, we thought, remember, six months ago, we thought we saw it turning, right? You know, we're gonna get it turned and buy it right now. You know, they're gonna get rate increases. If they are, they're really slight. You know, 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? And, you know, 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. You know, those effects are still coming down the stream. Again, I'm not being Debbie Downer, I'm just a realist. And, you know, 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, 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 open up new manufacturing plants. That takes time. Well, there's an interim of pain. Even our president said that, you know, there's gonna 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 because it's just, we haven't gotten all over 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 wanna 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 take place, you know, with or without the warranty. You still think that's the case or just no confidence? Well, well,

I don't wanna, I don't wanna get in where I shouldn't be. I think you're gonna have something lower, yeah. But it may not be as low as what they had, okay? That's being debated right now by people above my pay grade. So I would tell you that, you know, it sure is gonna be lower than what it currently is, but it may not be as low as what was originally said or originally 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 if someone's gonna tell me. Yeah, we'll know in this quarter. That's why 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. So I'm gonna just let it play out and stay out of it. But 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. 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 it. Well, it was 120 years of infrastructure investment and internal combustion. You're not gonna 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. As 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. And what that does is it probably doesn't drive as big a pre-bought, right? Especially with the tough overall economic situation that we're certainly we're able 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-bought 26 by any stretch, but you know, every day that goes by the chain where it weren't 27 gets closer. So you're condensing it, right? You're condensing that tie break. 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 gotta have business regardless of the price of a drug, regardless of the technology. I've gotta have my business fairly straight so I can go buy something, right? So, you know, those are some headwinds. So I would expect a pre-bought sometime. I just don't think it's, 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 federally unknown 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 at 2010, when we switched to SCR, okay? We were gonna have this big, big year in 09. You remember 08 and 09? Well, the economy kind of rode over all that, didn't it? And you can go look at the numbers. 09 never made the pre-bought it was supposed to. So again, hopefully we can get the economy straight. Hopefully we can, you know, get some of this, 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, you know, see a window, see a path in front of us to where, okay, I can make that investment. I could do this. I know where my business is going. That's the key thing. You know, 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 Russia 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. Russie 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.