Rush Enterprises Inc

NASDAQ:RUSHA

Earnings Call Transcript 2022-Q2

[Rusty Rush, Chairman, Chief Executive Officer & President]

Good morning. I hope everyone has been able to get through obviously a little new technology to the lakes this morning. We had a couple of e-mails with a couple of folks having trouble. But hopefully, everybody will get sorted out this morning and be able to join us for the call.

So I'm going to get started. Good morning and welcome to the Second Quarter 2022 Earnings Release Conference Call. On the call today are Mike McRoberts, Chief Operating Officer; Steve Keller, Chief Financial Officer; Jay Hazelwood, Vice President and Controller; and Michael Goldstone, Vice President General Counsel and Corporate Secretary.

Now Steve will say a few words regarding forward-looking statements.

[Steve Keller, Chief Financial Officer]

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 risks 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 ended December 31, 2021 and our other filings with the Securities and Exchange Commission.

[Rusty Rush, Chairman, Chief Executive Officer & President]

As indicated in our news release, we achieved second quarter revenues of $1.8 billion and net income of $110 million or $1.92 per diluted share. Earnings per share excluding the one-time gain related to our acquisition of a controlling interest in Rush Truck Centers Canada Limited or a $1.75 per diluted share. We are very proud of our accomplishments this quarter. Not only did we achieve record high quarterly profits, we also completed the conversion of our previously acquired Summit locations to our SAB businesses, acquiring additional 30% of Rush Truck Centers Canada Limited, repurchased $38.4 million of company stock and declared a cash dividend of $0.21 per common share or a 10.5% increase in our dividend and our fifth increase since 2018.

Our results in the second quarter were due primarily to a strong freight demand and healthy consumer spending. New truck production continues to be constrained because of component supply issues. But our Class 8 new truck sales substantially outpaced the industry.

Our aftermarket results also significantly outperformed the market due to strong demand from parts and service throughout the quarter. Our results were also positively impacted by 19 locations acquired in the fourth quarter of 2021, as well as 15 locations in Canada, through our additional investment in Rush Truck Centers Canada Limited, whose operating results are now consolidated in our financials.

In the aftermarket, our parts service and body job revenues were $598.3 million, up 34.3% and our absorption ratio was 136.4%. In the second quarter there was strong widespread demand for parts and service from most market segments. We continue to strategically expand our workforce and service, technicians and aftermarket sales for vessels throughout our network, including our new locations extending our rigs to large national fleets.

We expect supply constraints will continue to impact the industry into 2023, but we believe parts and service demand will remain strong, due to our network reach and scale of our inventory along with our partnerships with parts manufacturers. We are better equipped to navigate any industry parts shortages moving forward.

With the continued expansion of our workforce of technicians and aftermarket professionals and by implementing our strategies in our newly acquired locations, we believe our aftermarket results will significantly outpace the market in 2022.

Turning to truck sales; we sold 4,168 new Class 8 trucks, accounting for 6.4% of the total US Class 8 market and 1.7% in the Canada market. While the truck production is still constrained the Class 8 manufacturers, we represent we're able to increase production somewhat in the second quarter. We experienced healthy demand for most market segments, particularly over the road construction and vocational customers.

Our backlog remains strong and we are proud of our Class 8 product sales results this quarter, especially given a limited number of new trucks available to sell. ACT Research forecasts US Class 8 retail sales to be 253,000 units in 2022, up 11.3% from 2021 and Canada new Class 8 retail sales to be 29,500 or up 4.9% from 2021. We believe that because of supply constraints retail sales of Class 8 trucks have lagged demand by as many as over 100,000 trucks the last couple of years. We believe because of this pent-up demand for Class eight truck sales and the pending changes to emissions guidelines in 2024 and 2027, that the commercial vehicle market will remain strong through 2026.

Our Class 4 through 7 new truck sales reached 2,815 units in the second quarter, accounting for 5.1% of the US Class 4 through 7 market and 1.3% of the Canada Class 5 through 7 market. Production capacity remained limited but we experienced healthy demand from a variety of market segments including vocational and food and beverage customers.

ACT Research forecasts US Class 4 through 7 retail sales to be 230,000 units in 2022, down 7.7% from 2021. In Canada Class 5 through 7 retail sales to be 10,250 units, are down 22.5% from 2021. Looking ahead, we expect supply constraints on Class 4 through 7 trucks to continue though some manufacturers may increase production this year. We believe our results will align with the industry in 2022.

Our used truck sales reached 1,629 units in the second quarter, down 22.2% over 2021. Overall, demand softened for Class 8 on-highway used trucks, due to weak spot rates and high diesel prices, putting an increased burden on owner-operators and small fleets. However, there was still strong used truck demand from medium-duty flatbed and vocational and energy customers. Used truck values have decreased significantly and we anticipate they will continue to soften through the year. We are managing our values and inventory and believe we can effectively meet the needs of the market this year.

I would like to note, that our lease and rental operations have grown to become a significant contributor to our company's overall profitability, with second quarter lease and rental revenues, increasing 31.2% year-over-year. The growth is driven by our recent acquisitions in the fourth quarter of 2021 and second quarter of 2022, as well as strong demand, due to healthy freight environment and limited new truck production.

As we look ahead, we are closely monitoring inflation, interest rates, fuel prices and other economic factors, which may impact our industry. That said, while economic growth has slowed somewhat, we believe strong new trucks or demand for new trucks and aftermarket parts will continue. We've continued to focus on our strategic initiatives and diligent expense management, and we believe our financial results will remain strong. It is very important that I thank our employees, for their impressive work to their ongoing commitment to our company and our future.

With that, I'll take your questions.

[Operator]

Thank you. [Operator Instructions] Our first question comes from Justin Long with Stephens. You may proceed.

[Justin Long, Stephens]

Thanks. Good morning and congrats on the quarter.

[Rusty Rush, Chairman, Chief Executive Officer & President]

Thank you, Justin.

[Justin Long, Stephens]

I guess to start I wanted to ask about Class 8 sales. We saw pretty nice step up here in the second quarter versus the first quarter. Any thoughts on how that number trends sequentially headed into 3Q and 4Q?

[Rusty Rush, Chairman, Chief Executive Officer & President]

It looks like it's going to be pretty flat, okay? I think manufacturers have pretty much gotten to where they're going to be still dealing with not really as much as we were last year of course, but there still are component supply shortages. There still are trucks being partially built, they're are offline. They're still dealing with those headwinds. So, if I was going to look somewhere -- and a lot of that has to do with timing, right and mix of what the trucks are. They need bodies. Do they have this? I don't have all that detail in front of me.

But as far as what we're getting from a production perspective, I would call it basically flat. Not that only for new truck deliveries to change a lot over the next quarter and on that through to Q4 remember, we are still on allocation. So, it's more than -- it's more what we can get, right it's not what we have sold. Our backlog is still strong. Our backlog is as strong as it was at the end of the quarter last year -- last quarter excuse me at the end of Q1. So, we feel good about it.

And as manufacturers are able to ramp up production some, then we will go forward, but I'm not going to -- I'm going to hedge out on that right now. I think they're doing a decent job of managing what they've had to manage -- dealing with the supply issues that we've had. We got pretty good. We've been dealing with it for like 15, 16 months now. So I think manufacturers have figured out how not to overpromise and under deliver after what we went through in 2021.

[Justin Long, Stephens]

Got it. And you started the call and mentioned the strong and widespread demand for parts and service. Obviously, a big revenue number here in the second quarter. But could you share what the same-store organic growth rate was in parts and service and how you're thinking about that in the back half?

[Rusty Rush, Chairman, Chief Executive Officer & President]

Well, it was robust. I think -- you remember right we were 18% in Q1. It was a fairly robust 19% obviously in Q2, right? So, I guess I missed the mark a little when I started coming in the first of the year and I told you it will be high singles, but I guess we missed it on the right side of it anyway. So, as we look forward, I would expect comps to get harder, but I still would expect some pretty solid double-digit growth rates on a same-store basis. I'm not sure we'll get 19%. That's to be seen. I can reflect upon where I'm at as of today, okay? And this far in July, we have continued to maintain the pace that we were setting in June. So, we've seen no slowdown or anything.

There'll be subseasonal slight slowdown in the winter. That's just natural because we've got so many stores in the South, just because of the air conditioning work, etcetera. But it is not significant. That's just had normal seasonal things we deal with. But right now, demand remains robust, and we continue to believe and we have the initiatives that we have going on out there, whether it's mobile side or really chasing after the large fleet business. We've really been very focused on that, given our network, leveraging off the largest network in the country. We still believe that we can maintain pretty strong double digits. I'm not going to go into 19%, but you never know these guys surprise me all the time. So -- but anyhow good robust growth as we go forward.

[Justin Long, Stephens]

Good to hear. I’ll leave it at that. Thanks for the time.

[Rusty Rush, Chairman, Chief Executive Officer & President]

You bet. Thank you Justin.

[Operator]

Thank you. Our next question comes from Jamie Cook with Credit Suisse. You may proceed.

[Jamie Cook, Credit Suisse]

Hi, good morning. Nice quarter. So Rusty, I guess, my just first question in your prepared remarks, I think you said you see strong demand on the truck side, I think through 2026 just given pent-up demand and emissions requirements that are coming up. So just interested on that's a pretty bold statement. Just your thought process there and what your assumptions on the macro in that environment is as everyone is worried about a recession?

And then just my second question when you were talking about Class 8 sales or new truck sales or -- and you said a flat year, I think you said flat was that relative to the first half or year-over-year? Thanks.

[Rusty Rush, Chairman, Chief Executive Officer & President]

Well, I'll answer back in a reverse order. That's sequential Jamie.

[Jamie Cook, Credit Suisse]

Okay, okay. That’s what I thought.

[Rusty Rush, Chairman, Chief Executive Officer & President]

So a little bold statement from me, you don't hear many of them do you? So I wouldn't -- look those comments are industry specific directed, okay? I do not control the general economy. What I can tell you is that given what we've dealt with since 2020, just step back a minute going last 2.5 years, right? We were shut down for 1.5 months in 2020, okay? We didn't even build trucks when COVID hit in April and into May, okay? So you lost that production. Then you get into 2021 you're starting about March or April. And all of a sudden we've got supply constraints. And we don't build the 220-something US retail last year. The demand was there for way more. And so -- and we get into this year where we going to be in the 250.

Understanding this industry like I do if you go back in time, we historically have always built to max capacity. Manufacturers have never worried about anything, but producing everything they could. I've talked -- I do have some customer touch and a lot of large fleets, not the smaller people they're getting hurt right now, right? The spot rates are only going up but a lot of large fleets have not been able to keep track and replace at the rates they want to, okay?

So you still got this pent-up demand. Look we have a big d-bar, of course, that's going to affect it all. I can't predict that and that's not my job to be that economist. But I can tell you that all -- everything in the industry aligns if you go back and look at what like 1.5 years or people projected 1.5 years ago for 2024, and understanding what's going on -- we went through a decade between 2010 and 2020 where we didn't have any governmental influence, okay? We didn't have really any emissions issues.

We sure did between -- in 2010 I say, I'm old. We had a lot to deal with. We had some pretty big years in 2005 and 2006. And I would somewhat compare what we have coming in front of us when I look at 2025 and 2026 to the same things, excluding what we're going to start dealing with in 2025. Remember most people figured 2024 we're going to be down to 170,000 US units. But because taking and not being able to meet demand, I think we somewhat -- we're going to go down in 2024, no question, but it's not going to go to 170, maybe it's 210, 215. These are my thoughts. I can be wrong. There's no question that the overall economy can throw things for a loop.

But the industry specifics are aligned that once we get through that then the whole country, again we're talking about diesel engines going up maybe $20,000 okay? And I realize that the economy can override all of this. But if you look specifically at the industry specifics, they pretty much align that way given 2024 and 2027 emissions and given the lack of product that we typically would have produced to meet that demand.

We did -- we haven't done it. With backlogs like this, we'd be busting not 220 and 250 and 240. We'd be busting out of 280,000, 290,000 units and more. Manufacturers are not running at full capacity currently. And it's really been a good thing from my perspective. This will -- I like to believe outside of the overall economy, I can't control that. We get a soft R, a middle R, not a big R. There'll be some effect, but I don't think it's just going to look bad given these other things that I've talked about is what we've -- is what could be expected.

And so that's really where those numbers I'm giving to you come from that I believe -- but we're going to be fine as always I believe. If it is a big R and the whole country tanks down, obviously, it's going to have an effect, but I'm not an economist and I don't believe it to be that case.

[Jamie Cook, Credit Suisse]

Okay. And then just one follow-up question on G&A. G&A has been trending higher. I know there's some acquisitions that are in there as well and you've done well at expense management. Just maybe Steve, how you're thinking about that in the back half of the year? Thanks.

[Steve Keller, Chief Financial Officer]

G&A. So we did have salary increases that went effective July 1st and the numbers you see printed only have two months of Canada consolidated in the quarter. So that's -- when you get the third month and you take into account the salary increases that we put through the company in July that's probably going to add on a quarterly basis about $8 million to $10 million of G&A. And then the rest of the lift will be just coincided with the lift in back-end business aftermarket GP.

[Jamie Cook, Credit Suisse]

Okay. Thank you.

[Rusty Rush, Chairman, Chief Executive Officer & President]

One thing Jamie, I think, when you look at that absorption rate remember that takes into account expenses at the dealership level right the biggest expenses. So we're managing to keep that grow the gross a whole lot more than we are on expenses, right? That really reflects the spread that you get.

[Jamie Cook, Credit Suisse]

Thank you.

[Unidentified Speaker]

You bet.

[Operator]

Thank you. [Operator Instructions] Our next question comes from Andrew Obin with Bank of America. You may proceed.

[Andrew Obin, Bank of America]

Hi, everybody. Hi. Good morning.

[Rusty Rush, Chairman, Chief Executive Officer & President]

Thank you, Andrew. Good morning to you.

[Andrew Obin, Bank of America]

Just a question just a follow-up on Jamie's question. Parts and services clearly a big beneficiary of the environment, big beneficiary of the investments that you guys have made it seems pricing is strong. So first if we have disinflation how sticky are the prices? And part two you sort of outlined this regulatory environment for the next five years that I think is going to be fairly favorable.

So what should we expect from your parts and services in terms of growth over the next several years? And how should we think about gross margins right because it's such a huge driver of your profitability. And you have outlined these big regulatory changes that's going to drive demand. But how should we think about demand for parts and services within that environment given how profitable they are.

[Rusty Rush, Chairman, Chief Executive Officer & President]

Right. Well that's a good question Andrew, right? Because all of a sudden if you start taking the age of the fleet down you would naturally think that that would be a hit to parts and service. But I've got to tell you a lot of the -- we look at what we've been doing.

Our growth -- we've been affected by inflation we all know that. But I do believe that the majority of our growth has been -- a slight majority of our growth has been through share gain, okay? Yes we benefited through ablation, but we've also taken share at the same time. And that's really what it's all about.

This last acquisition and the last two acquisitions really continue to help fill out our map and understanding that we're after that large fleet business we're after all customer base. But our map is our differentiator. No one can talk about a map when it comes to service especially across the bottom two-thirds of the United States like us. And we're going to continue to try to take share. That's what we get paid to do around here.

Competition is strong, but I have a belief that the historical track records that we've put up support and the continued growth in our map is going to support our abilities to grow our parts and service market right and take share. So I mean that's the best I can tell you will the fleet if they have all those truck market stays strong will the average age of the fleet come down? You better believe it will hitting some.

But at the same time, it's more about adding technicians, putting more emphasis on where we believe -- and I don't want to get into all everything we do. I know a lot of people who probably listen to this goal are our competitors. But I do believe we have – I don't know what to tell you there's no secret sauce to this business, but there is an ability to leverage off of that map and continue to provide support to the customer through a broader base than anyone else. And we can take share. And we've done it in the past and we will continue to do it from my perspective going forward.

Our people are the best and we're trying to invest and provide them the best tools we can from a technology perspective even on an equipment perspective across the board facilities whatever and listening to customers and what they're asking for especially when it comes to mobile and embedded technicians and these types of support that I think we lead the industry in. So I know that's just maybe to you -- maybe a generic answer, but it's a solid answer my friend. And let me tell you, it's what we do. That's -- and I think it's reflective in the numbers we're showing, right? And I have no reason to believe that it's going to stop.

[Andrew Obin, Bank of America]

And just to -- and then I'll segue into a question about macro but I think a lot of folks from Wall Street are concerned about a downturn. You brought it up. You know, given how you phase-in price increases and given the market share that you've gained year-to-date do you think you can grow parts and services business in a mild recession? Just top-line that you report to us.

[Rusty Rush, Chairman, Chief Executive Officer & President]

I got you. It's a good question. We have historically had -- the last time I had an issue in growing it was I was really more heavily weighted in one particular industry and you would know what that is. And that would be oil and gas. You got it brother. And you know what the good thing about it right now is? We're not weighted that heavily in that business.

So while it may slow our growth rate down and I'm not here to say guarantee 100% that if we had a pretty strong recession, I wouldn't have -- I wouldn't take a few hits because that's just natural in this business. They'll tighten up their belts a little bit. It would be nothing as significant as we might have seen in the past. And we would try to do our best to come back to that with share gain. So, I don't see -- even if we have a very strong recession, I see no way to take more than 5% -- if I were to take more than 5%, it would really bother me given the diversity. And I mean that the diversity of our customer base now. Our customer base is much more diverse than it has been historically.

So, you'd be better equipped to weather any storm that might come our way not that you're not going to be affected by a storm. We'll be in a whole lot better shape given that diversity of customer base across many market segments not -- it's focused -- because you have to remember back in what 2017 or so, we figured that we were what 15% tied to sale or something right oil and gas [indiscernible]. So, I don't believe that we're quite as affected. We're going to get affected, but I believe we can maintain pretty close to flat. That would be my answer to you right now Andrew.

[Andrew Obin, Bank of America]

So, flat or better in a mild recession and maybe down mid-single-digits and something more severe.

[Rusty Rush, Chairman, Chief Executive Officer & President]

Yes, mild flat or better. If you get a heavier recession to whatever, we'll keep it within 5% my friend. And then remember I got another lever to bolt on expenses at the same time. So, don't forget about the other side of the house.

[Andrew Obin, Bank of America]

And just to follow-up, I guess clearly part of the reason your services are doing so well is because of the systems you guys have and of course, these systems give you a lot of visibility in your end markets in terms of real-time. Can you just tell us what are you seeing in the economy, right? We're in towards the end of July people are talking about recession there seems to be a consensus that there's going to be a recession in the next six to 12 months. What are you seeing maybe go by geography? You did highlight key verticals. You did highlight that you were seeing things slowing. What are you seeing slowing? And I think last time you sort of talked about the fact that spot rate maybe was bottoming -- what's happening there? Just would greatly appreciate your insights. Thank you.

[Rusty Rush, Chairman, Chief Executive Officer & President]

Sure. You bet. Well, I'm going to take it in reverse order. Spot rates, I think the spot rates peaked around $3 and they're around $2, $2.95 or $1.95 somewhere in there give or take a few percent. So, obviously, they've taken quite a bit out of them.

I don't know I mean we are all talking to the truckload guys and it's the LTL guys about where those rates are and where they believe they're trending. They're going to be closer to it than me. I know where they've been. And I know how it's affected some of our stuff on the used side and that small customer and there's no question that it's had an effect and will have. I think there's -- I was talking to a finance company last night and they were seeing -- starting to see some delinquency and that more marginal customer out there. So, that's the effect of spot rates.

Now, when we talk about across the country I'll be honest Andrew, we're not seeing a lot of softening in any certain area. And there's not one area as I just -- I got some folks around me here at the table when I looked around and everybody sort of shift their head nothing's going backwards specifically.

Our antennas are up and we're looking for it. We always go through the same news headlines every day. We all read the same stuff. So, yes they are. But are we seeing it right now? No.

And if our customers said look, it's solvent, but it's still pretty good okay. I mean is it solvent? Yes, I'm still doing extremely well and will be the first or second most profitable year they've ever had. Even if we have a slight arc next year which is zero flat EDV. I mean from folks I've talked to our customers have had the fourth best year they've ever had even next year.

So, I mean it's pretty good in our industry right now for our customer base. I've got to tell you. And I mean everybody's gotten -- they're not going to get the same contract rates and increases. Some people said flat. You've heard one or two people say maybe a little contraction. Some people said well I still get low to mid-single-digit increases which I don't know. The market will dictate that. But you're not hearing doom and gloom. And it's still for people that are behind on replacement I have not heard about what's going to stop fleet age more. I have not heard that yet.

So, I don't think it's -- and the truck business is usually a leader in and a leader out. It's a great indicator of what's going on in this country. It comes to goods being hauled. But I'm not -- I'm just not -- I'm not seeing better not hearing it. Softening, yes, but it was such high levels and they were getting 10% to 12%, 15% rate increases. That would have been unrealistic to expect that to continue.

But I've got -- I was talking about replacing trucks. So, I really believe that to be the case. I just have -- what we've seen as you know the only place that you've seen it and I'm sure maybe somebody will ask it is okay? And that excuse me for -- but that's because new truck production is up and we're delivering more new trucks. So, it was naturally, took -- used -- that put pressure on used, was used to crazy rates and the spot market effect of it. So used is often more than a -- because used is the one area, that I can say, is softened. But that would be expected, as new truck deliveries increase. So I mean, it's the best answer I can give you, is we don't -- our antennas are up. We read about it. We see it. We know that people are getting to get rate increases they were, they're flat, but they're still hauling a lot of rate. And there's still demand out there at this moment.

[Andrew Obin, Bank of America]

Thanks a lot Rusty. Really appreciate it.

[Rusty Rush, Chairman, Chief Executive Officer & President]

You bet. Thank you, sir.

[Operator]

Thank you [Operator Instructions] Our next question comes from Matthew Brooklier with Gamco. You may proceed

[Matthew Brooklier, Gamco]

Hi. Thanks and good morning. So a question on the used truck side of things. It sounds like Class 8 over the road those used prices are sequentially down, but you had positive mix in the quarter. Are you able to maybe put some numbers or percentages around, how much the over-the-road trucks are down on a sequential basis? And then second part of the question would be, what are your expectations for the remainder of the year?

[Rusty Rush, Chairman, Chief Executive Officer & President]

Got it. Good question. Huge peaks -- let's talk about peaks, and we'll take it down. Peak was the late fourth quarter, January something like that. And then we started volume -- started volume at the auction levels, further. They rolled into retail, probably by about parts and numbers 20% 25% depending on the tax specification. Not over the road, somewhere in that range where all it was trickling down about 5%, a month there instead of a typical number.

You typically get about a 1.5% depreciation on our trucks. This is -- it could be a little more in different stages of its life, but just use 1.5%. Well we wrapped it up to about 5%. Then you run about five months in a row, and then we can do the math right, somewhere in that border. So you've got -- and that truck where you sold me a month ago, I said 20 now I might say 25. I do expect that to -- but it's still higher than we -- it got so high unlike I have never seen in my entire 40 years in this business okay, 40-plus years cash amount [ph] in this business, never seen it like it peak to that kind of, but there was such strong demand out there, but it got really high.

It's still higher than it probably was, a little over a year ago or out a year ago. So it could come down further. And I would expect it to, but not at that same pace. I think you'll see that you're getting further down the hill, right? You get into the valley that starts to be decline. It was a big -- it was a real stack of mountain, real steep up top and it starts getting a little bit more of [indiscernible] as it comes down, but it's still declining. So maybe another 10%, rest of this year something like that. And that's just a guess, because we are building more new trucks not building as many as we probably could given demand, but we are building more, so you've got to expect it to what 5%, 7%, 8%, 10% more, I'm hoping. That's it.

And then it will sort of solve it out and get more back from it, who knows. You get a big recession, it can drop more or something, but I'm not forecasting that, but I'm not an economist. So those are your answers. Look I mean, we are buying trucks more than you sold them two years ago, you know things are crazy and that's kind of stuff that was going on late last like -- given the back half of last year, and into the first quarter of this year. That's all, it is now. So it will work itself out and through. This I can tell you, as we always do, as we always do people need to know that.

Yeah, our margins were down. My margins have gotten crazy. Our margins in the quarter, we're more like we always tell you eight to 10 they were in the upper 10s. But my inventory, we believe is mark-to-market at the current rate and we are working on getting our inventories levels down. We peak at about 2,400. We're at about 2,000. I'm hoping to get to 1,800 1,900 units, by the end of this month. We've been attacking it for about the last 60-plus days. So you always look back at started, maybe 60 days before we started a little early. We started at a good enough time, but I feel good about where we're at where we're heading, how's that?

[Matthew Brooklier, Gamco]

Okay. I appreciate the color, Rusty.

[Rusty Rush, Chairman, Chief Executive Officer & President]

You bet.

[Operator]

Thank you [Operator Instructions] Our next question comes from Jim Misago with FactSet. You may proceed. If your line is on mute…

[Rusty Rush, Chairman, Chief Executive Officer & President]

That’s a great question.

[Operator]

And I'm not showing any further questions, at this time. I would like to turn the call back over to Rusty Rush, for any further remarks.

[Rusty Rush, Chairman, Chief Executive Officer & President]

Sure. Well, we appreciate everyone's time this morning and listening in. We look forward to talking to you again in October, with hopefully great results, again. So thank you very much. We appreciate your time and have a great next quarter.

[Operator]

This -- today's conference call. Thank you for participating. You may now disconnect.