Rush Enterprises Inc

NASDAQ:RUSHA

Earnings Call Transcript 2021-Q3

[Operator]

Good day, and thank you for standing by, and welcome to Rush Enterprises, Inc. Reports the Third Quarter 2021 Earnings Results Call. At this time, all participants are in a listen-only mode. Please be advised that today's call is being recorded [Operator Instructions].

I would now like to hand the conference over to Mr. Rusty Rush, Chairman, CEO and President. Thank you.

[Rusty Rush, Chairman, CEO and President]

Good morning, and welcome to our third quarter 2021 earnings release conference call. On the call today are Mike McRoberts, Chief Operating Officer; Steve Keller, Chief Financial Officer; Derrek Weaver, Executive Vice President; 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, 2020, and in our other filings with the Securities and Exchange Commission.

[Rusty Rush, Chairman, CEO and President]

As indicated in our news release, in the second quarter, we achieved revenues of $1.27 billion and record high net income of $69.4 million or $1.20 per diluted share. We are very proud to declare cash dividend of $0.19 per common share. We continue to see economic recovery and a strong freight environment throughout the country, which has created really widespread demand for new and used trucks as well as aftermarket products and services. Our profitability was largely driven by a diligent expense management during the quarter. During 2020, we made it a priority to implement new processes and tools throughout our organization to control expenses throughout the truck cycle. We believe these processes will allow us to effectively control expenses as we continue to implement our strategic growth initiatives and will continue to contribute to higher pre-tax profit margins than we have historically experienced.

Looking ahead though, demand remains healthy for new trucks and aftermarket parts and service. Component supply chain issues continue to challenge the industry, pushing new drug deliveries into 2022 and impacting the availability of aftermarket parts. These supply constraints coupled with normal seasonal aftermarket softness in the winter months, and the fact that we have five fewer working days in the fourth quarter compared to the third quarter, will negatively impact our earnings in the fourth quarter. However, we believe customer demand will remain robust and supply constraints will subside and then 2022 will be a strong year for the commercial vehicle industry and Rush. In the aftermarket, our parts, service and body shop revenues were $463 million and our absorption ratio was 134% in third quarter.

Our aftermarket revenues increased 15.7% year-over-year, which is primarily a result of our continued focus on our strategic initiatives and the limited availability of new trucks, which helps drive demand for parts and services of vehicles that are in operation. Our parts sales are historically high and we experienced healthy activity in most market segments. Service revenues are accelerating gradually, largely due to hiring more technicians and improving the proficiency of our workforce, as well as our enhanced service offerings. We believe demand for aftermarket parts and service is strong but we expect supply constraints to continue to impact the industry for the middle of 2022. We continue to focus on our strategic aftermarket initiatives and expect our fourth quarter performance to remain strong, though we expect normal seasonal decline over the next couple months.

Turning to truck sales. In the second quarter, we sold 2,537 new Class 8 trucks, accounting to 4.7% of the total US Class 8 market. The healthy economy, strong freight rates, led to widespread demand for new Class 8 trucks. But our results were mainly impacted by manufacturers’ limited production capabilities. ACT Research forecasts US retail sales to be 228,500 units in 2021, up 16.8% from 2020. We expect component supply constraints will continue to delay some Class 8 trucks -- pushed out some Class 8 trucks sales into next year, which will likely impact our performance in the fourth quarter. However, we believe Class 8 new truck sales will accelerate in 2022 when manufacturers are able to increase production. Our Class 4 through 7 new truck sales reached 2,792 units in the third quarter, accounting for 4.7% of the US market. We experienced healthy activity from many market segments, particularly food service and lease and rental but the limited production of new medium-duty trucks negatively impacted our results. ACT Research forecast US Class 4 through 7 retail sales to be 251,000 units in 2021, up 8% from 2020.

As we look ahead, we believe Class 4 through 7 truck production will not increase as quickly as Class 8. We are pleased that Hino is back in production, but we do not expect the other medium-duty manufacturers we represent to significantly ramp up production for some time. That said demand remains strong and we believe our fourth quarter Class 4 through 7 results will be on pace with our third quarter results. Our used truck sales reached 1,712 units in the third quarter, down 16.7% year-over-year. Our unit sales are down compared to last year. Used truck demand and values remained strong, largely due to production limitations of new Class 8 trucks. We expect used truck demand and values to remain strong in the fourth quarter, and begin to normalize when new truck production catches up, eventually with customer demand. It is becoming more challenging to maintain a healthy used truck inventory but we believe our fourth used truck sales will be consistent with our third quarter results.

Regarding network growth. This week, we acquired an independent parts and services facility in Victorville, California that we will convert into a full service Peterbilt leadership. We also have plans to acquire full service Hino and Isuzu dealership in Elk Grove, Illinois next month. Further, we entered into an agreement with the Summit Truck Group to acquire full service dealerships in several states, representing international, IC Bus, Idealease, Isuzu and other manufacturers. We expect that transition to close in December. Additionally, we plan to close our previously announced agreement with Cummins with Cummins to acquire 50% of interest in Momentum Fuel Technologies later this year. It is important that I thank our employees for their unwavering commitment to growing our business and supporting our customers. In recognition of their hard work on the frontlines during the pandemic, we are happy to issue a one-time discretionary $1,000 bonus to all employees in mid-December. This is one way for us to express our gratitude to our employees for their impressive work over the past year.

With that, I'll take your questions.

[Operator]

[Operator Instructions] And our first question comes from Jamie Cook from Credit Suisse.

[Rusty Rush, Chairman, CEO and President]

Good morning, Jamie.

[Operator]

Jamie, is your line on mute? Could you please unmute your phone?

[Jamie Cook, Credit Suisse]

I was on mute. Good morning, everyone. And good job on execution as usual. I guess Rusty, first question you talked about Class 8 production ramping faster than 4 through 7. If you could just provide some color on that and how you think about production ramping in general in 2022? My second question is, can you sort of address the market’s approach to pricing with the incremental costs? And then I guess, last, just any color you can provide on sort of the acquisitions and the JV that you announced and sort of incremental earnings accretion to 2022?

[Rusty Rush, Chairman, CEO and President]

When you compare Class 4 through 7 versus Class 8, and why did I say the Class 4 through 7 ramp up slower is the fact and it mainly is the two large manufacturers that you will probably see Class 8, because demand is extremely strong on the 8 side. And also there’s more expensive larger product and I think, even for us, if you look historically, margins typically tend to be better on the 8 side. So when you're in a supply constrained arena, which you are now, you have to pick and choose, because a lot of -- you have a lot of same components. So obviously, the 8 demand I think is even stronger than 4 through 7 right now. And given the vehicles theirselves, you have to pick and choose, you got to make decisions, because the supply constraints we've been dealing with. So I think in the favorable Class 8 right now given the demand and also the profitability of the products, you want to get real because it’s unlocking our costs twice as much. So obviously -- so it only makes sense that margins tend to be better just based on the revenue side to begin with…

[Jamie Cook, Credit Suisse]

But do you see any evidence of [double] booking or are you worried about that, people are worried about double ordering as some this demand [stake]?

[Rusty Rush, Chairman, CEO and President]

No, I don't feel -- I know I don’t feel that way about our order more. I don't -- I think -- look, in my mind, what's happened is we -- look how things ramped up since July of last year. I mean, it certainly blew up from a freight perspective, everybody had money, we were buying [everybody]. And so demand was there. So we ended up and we ran in the supply shortages starting in really March, April. By the time the year is out, you ask me, we probably push 40,000 or more on the bottom side 40,000, Class 8 units that should have been built this year that are not going to be built. Well, when you think about it, all you're doing is pressing that demand into '22. '22 is supposed to be a pretty good year. Then you run into '23, you run into '23 and you got car and prebuys in the state, so 15 states, it goes down and [Technical Difficulty] California, because of price of diesel engine is going through -- going way up. I know there's a lot of different numbers as to how much, but it's certainly in '24. So I don't see this thing slowing down until '24, down side some big economic issue, okay, because I don't see that we're going to catch up their demand right now.

I mean, manufactures are not meeting demand at the moment. And so that just keeps pushing it out unless there's some big economic downturn in the country, I don't see that demand going away, because you're not really going to be -- you're just going to be running right to replace and I think replace was in the 220s now, and that's what -- this is US retail. So I don't think, and you look last year, it was under that, obviously, like 190 or something, 192 or something. But then you had a huge increase backup in GDP and freight. And given what we see in '22 and ‘23, I don't see the double ordering. I mean I don't think we have it. I mean, let me give you some data points. When I talk about -- what I would care about is what's happened in '22 and '23. Our backlog a year ago at this time was about 1.1 billion. In the Q2, it was 2.2 and it's 2.7 now. Could there be a little something in there? Of course, there's never an order more just perfectly clean. But I don't see any evidence of based in there that even if there was a little bit [Multiple Speakers] backlog is big. So we've got to catch up with what we've missed. So I'll leave that one alone. I mean, it's a little…

[Jamie Cook, Credit Suisse]

With the 2.7 billion in backlog, can you just address how you're approaching sort of pricing then, like what just your cost price…

[Rusty Rush, Chairman, CEO and President]

You're right, I'm being driven a lot by the OEMs. We all know what costs have gone up, everybody's been scrambling on the OEM side and the supplier side, and they're paying more, so obviously prices of trucks are going up. Anybody can't see inflationary pressures that are out there, sometimes I know people talk about them a little bit, but I see them a much larger sometimes just in my -- in real life, I for sure see in our business that they're out there. Well, you asked about pricing, you better believe pricing up. But just try to keep up from the chain, it's not just the OEMs, they’re getting hit for pricing. They're getting hit hard on, not just supply but if you can't give supply [Technical Difficulty] hit on the pricing at the same time, because it’s the old supply and demand, it’s been like that forever. And so that's really -- it just keeps through the bottom of the food chain up to the top, and I think that's what you're seeing out there right now. I don't have exact numbers. But I would say that it is up getting passed on to the end user at the end of the day [Technical Difficulty] comes out of margin, it gets passed on, one or the other.

And so I would imagine sometimes on the front side because it accelerate so fast, it's hard to get passed on. But this didn't just start yesterday, it started last year or nine months ago, 10 months ago. So it’d just clear out. What you should be putting into your backlog in ‘22 should catch up with the pricing pressures that you had, I think that’s the way it’s supposed to work and will work. So you got a backlog and so that makes it hard to work your way through commitments, so hopefully, most people do. And then get new pricing out into the products that you’re selling now for future. The problem is you've got so much stacked, but there's been no supply. I mean, we delivered only 2,500 and something Class 8 and that's why I'm so proud of the quarter is because the core was, you look at it from a whole [Technical Difficulty] used to view our company, we had so many trucks. And then you look at the performance and it's just rather than things we’ve talked about doing for a long time, and I think you're seeing the fruition of it in the results of these numbers. And you asked -- what was your third question, Jamie?

[Jamie Cook, Credit Suisse]

My third question was just, I'm just trying to figure out all the M&A that you're doing like what's incremental [Multiple Speakers] provide?

[Rusty Rush, Chairman, CEO and President]

It's been so long since I've never been able to talk about M&A, but I’ll talk about it in 8-K. But it gets hard out there, supply and stuff. But a little bit, we just talked about a nice independent deal we closed, which is just add-on it's about the same. The deal up hopefully in Midwest and Elk Grove it’s about saying, the Summit deal though, on the other hand, represents quite a bit of growth for us when you look at it, it’s a second largest international dealer. It builds in three states, you're going to get some of our recipe’s silliness here. But if you go to Kansas and you look at Missouri, and you look at Arkansas, we don't have anything there, and Memphis. And so [Technical Difficulty] making stores. And as I tell people, it's like you've been making that puzzle and the [Technical Difficulty] we can't find it. Well, those three states plug right into our map, I'm looking at my map, it’s right next to me on the wall here and it's a perfect fit. And it’d be hard for us to found something that fits more perfectly from a geographic perspective.

Now, it's a good well run group, we can run it even better. And the thing that we'll mold that group into our overtime, we'll close it in middle of December. We’re excited about that. The Cummins JV, super excited about that. Momentum, we’ve been in that deal since the business is. 14, remember back in that days, natural gas was because of some of the market by 2017 and then we got it off the two. But Cummins must believe something about the future and we do too. We believe that RNG will be a bridge technology as we get deeper into this decade. And so we're excited and this is not something that’s going to affect -- we finally got that. I finally get that business to breakeven on our own, this last year or so. But there is going to be an opportunity in 25, or 26 or 27 for that to be a bridge technology, and we believe partnering with Cummins, I was looking the other day, I thought they had brand good brand equity and make a great partner in the fuel system business. They're the ones that building natural gas engine and you may not have seen. But last week, they announced they're going to build 15 liter natural gas engine, which is really going to open up the market we believe from mid-decade, as I said. So we're very excited about that to. So there you go. I tried to answer all as best I could.

[Operator]

And our next question comes from Justin Long from Stephens.

[Justin Long, Stephens]

So maybe to just put a bow on the fourth quarter. I know typically you see a seasonal decline. Rusty, you called out five fewer working days. But is there any way you can help us think about the magnitude of the impact from five fewer working days in the fourth quarter?

[Rusty Rush, Chairman, CEO and President]

You know, it's two things. These are just little bumps. We know about the supply chain issues. We're dealing with them right now. The problem -- I'm going to answer your first question and I'll add to it, and we'll get pass this. We got a good quarter. Point being though, the way it falls out we’ve got five less working days, typically the four quarter is about three. But the way that holidays have worked this year, we're pulling a holiday out of '22 and sticking it back in '21, because that's January 1st and we're giving off December 31, which is the right thing to do on a Friday. So impactfully, we’re not getting to know that [method], we do $2.6 million of gross profit a day in parts and service. So you can do the math it's about 13, I think gross might being down some just given with how long the supply chain issue.

But as I said, I'm not worried, it's going to be a good quarter but it won’t be the third quarter, but itd be a great quarter, really good quarter. But the good part, it is '22 and '23, so you're talking about maybe 20 million gross profit or so. But at the same time, you can just extrapolate it from there. Other than that everything should be running smooth and good. And we just want to -- it’d be a better fourth quarter than last year. But third quarter is always typically our best quarter. If you go back historically, not every time but historically, the third quarter is always our best quarter. But '22 and '23, our setup and even to the growth we've had in parts and service and look where the backlog I talked about a min ago, I'm very -- and these acquisitions that we're plugging in, as we get them implemented and integrated into the organization, things look great, so from that perspective.

[Justin Long, Stephens]

And that's where I wanted to go with my next question, if we kind of zoom out and look at the next couple of years, you talked earlier about the truck cycle being extended through 2023. But could you maybe expand a little bit more on the parts and service business. How you see that growing the next couple of years, and then incremental margins as well? Because I think when you put together the truck cycle with parts and service recovering and incremental margins, it implies that EPS can still grow nicely the next couple of years, but would love to get your thoughts around all of that?

[Rusty Rush, Chairman, CEO and President]

No, I would agree with that. And you have one piece out and that's M&A. I never really gave an answer, because I'm an integrator, but I take this, it’s accretive. We're not doing it to be un-accretive, I can promise you. So we'll sort out exactly what the M&A brings to the organization, but it'll be nice. From a margin perspective, we have super high margins all this quarter. But I see nothing that’s going to stay in the way, I was continuing on the parts and service side to continue to grow. Now, I can't pronounce 15% growth rates quarter-over-quarter. Remember, last year we're coming out COVID, et cetera. So your baseline was there. But it is -- we're targeting high single -- 8%, 9% growth rates next year, which I do believe in parts and service are doable and very achievable. And I'm not going to count, I'm not going to talk about any more than that. But I do believe that we will continue to see those type of growth rates in the first half and into next year, I think we can do that.

You look at all the initiatives over the last few years and you look at some of the other things we're doing now, but I really don’t want to talk about. But some of the things we're doing to go-to-market, and that's the piece of the business. I mean we ran 134% absorption, that's a record for us. It was just an operating metric but it's something we've key on putting pretty -- quite heavily. So from a parts and service perspective, it’s there. You heard me talk about the backlog from a truck sales perspective, it's there. It's just in terms of some execution on our part and all that is, we speak about whether we execute or not. So we've been able to do it before and I don't -- and our team only continues to get better, it's not me, it's all the folks throughout the organization. And just excited about where we're going. And those are easy things to look at. We do believe margins are sustainable, and maybe not all exact where they are, but they're going to be sustainable, higher than what they were a couple years ago for sure.

We ran pretty high margins in parts and service probably the bigger we ever have this last quarter, up in that range and you add in, like I said, 9% growth rates and stuff like that.

Next year, I'm hoping to do better but if we're going to do out, I believe you all going to extrapolate the numbers from there with the managed expense base don't lose sight of the managed expense fee, that sequentially was down actually and I would expect that to stay down but it was actually down a couple points from Q2. But I do expect us to be able to manage. I talked about that a couple years ago if you remember about when we come out of all this, how we're going to do a better job over the last year, we're going to do a better job of managing our expenses as we grow our revenues and our gross profits. So, so far so good and we look forward to continuing that over the next couple of years.

[Operator]

And our next question comes from Andrew Obin from Bank of America.

[Andrew Obin, Bank of America]

So just go back to this comment on expanding margin and expense management, you sort of highlighted expense management statement early on in your prepared remarks, I think this was sort of a new focus. Can you just expand, it does seem that your approach to costs in the cycle a little bit different, because I think historically, once things went off, you were very good at sort of keeping costs in control early on in the cycle. But as the cycle sort of got going, costs came back. Can you just go more in depth just to talk about what are you guys doing, what initiatives do you have internally to sort of change your approach to costs this time around, because execution seems to be superb?

[Rusty Rush, Chairman, CEO and President]

Well, I won’t get into as much detail as I can. I think our managers we have put in some new processes and new controls, but as we grow back, we're only going to spend so much money of what we grow. If our gross profit goes up X, we're going to spend X. And that's what we're going to spend and we're going to stick to it. We almost -- internally we call it a salary cap, it’s like in a sports sometimes. Doesn’t mean you can't grow. Because remember we're not -- I don't loan money, I don't do this. I work on trucks, I work on parts, I deliver, we sell parts, we deliver and we do this, it takes people. But we want to make sure we are staffed. Remember two thirds of our costs are people at the end of the day. So we will make sure that we don't get out of our skis and overstaff. It doesn't mean we don't grow, we don't add people but we do it with some tools that everyone is pretty dialed into, it took a lot of work this year.

Now we got to continue that in the future. But we're pretty dialed in to -- we're only going to spend X of every dollar we get in the gross bar. So we're not going to get way out over it. And these two are, so this is salary cap, we can call it -- there's other tool, the other names we can give to it. But the guys have been very, very focused, all the managers have been very diligent, I'm proud of them and the teams have too. And this is inspite of just, these last few months were tough from a COVID perspective, but it has the second fourth worst month in the third quarter that I've ever had with people out dealing with. So these controls are not leaving the organization and we're still going to continue to invest on the corporate side, we're going to continue to invest but just at a proper pace. Hopefully, you learn something you get a little bit older. It's not that difficult. And I say that but sometimes everybody gets caught up. We are running and things are growing and you're just not as diligent as you should be. I think there's some of the lessons that we have learned in the last two years are just going to continue to bode well and we're focused on it, we will, expenses will grow, but they will grow in relation to our gross profits growth. And we will end up keeping more of it than we historically have, and I'm very confident in our abilities to do that.

[Andrew Obin, Bank of America]

And just to follow up the question, you guys have very good systems. Just the usual question for me. Could you just walk us through what you're seeing by key industry verticals, residential, non-residential, oil and gas, the [Technical Difficulty] customers ways, maybe what you're seeing across the country in terms of macro, because you do have very unique footprint?

[Rusty Rush, Chairman, CEO and President]

I want to say everything is good, but -- because oil and gas is still oil and gas, I don't expect to see the CapEx spend in it. But we see a slight pick up here recently and in services that are being asked for, which are average you've seen in pricing oil, obviously is going up. We've seen a slight pick up. But I don't think people to -- I don't expect companies to be as disciplined as they were historically, or money to flow like it did historically. But I do think there's some upside still there as it's gradually been picking up from its trough. Other industry, the [open road] business, I mean, it's great. I mean, it's really good. Because remember if we're 40,000 trucks short of what demand was that means people are running their trucks longer. So when you look at the TL side, the LTL side, extremely strong for those customers, customers we have. We got a couple three or four big LTL carriers, and our business with them is good.

When you look at housing and construction, still wrong, demand for mixer trucks, demand for garbage trucks and the refu side, very strong. Parts and service, strong in those sectors. I mean, I'm sounding like a broken record repeating myself but that's what we are truly [really] leasing customers. I need to point out. Our leasing division, it has the most outstanding year they've ever had. I mean, it's just been over the top. If you look at our leasing margins and rental margins, I mean, they're above and beyond what I would probably could have been able to do. And it's not all driven by gain on sale, there are operating because rentals utilize strong and lease is coming up. I will tell you this, because of lack of product. We’re having to extend leases and do things on other trucks that normally would be taking out of service, because you can't get trucks, you can’t get as many trucks as you need. But that still will only inhibit we believe incremetaly outstanding here in '22.

So Andrew, I know that was a little bit, I mean, even municipal asset in that, bus has, school buses have been decent. I mean, there's a lot of -- it's been a pretty rosy picture, which always scares you when I say it’s rosy out there. But at the same time, it is what you can see now. And right now, I don't see that changing a lot. I'm not an economist or anything like that and my biggest concern is inflation, I’ll be honest with you, runaway inflation, because I see the inflation out there. And sometimes I look at the numbers that are printed, and I go, huh, okay. But, other than that, our business as an industry, broadly looking at it across -- and that goes from Florida to California. I don't see any region that is having, it’s bad right now, some better than others. But broadly speaking, everything looks good.

[Andrew Obin, Bank of America]

No slow down on resi, as far as you know, I know because in light commercial small…

[Rusty Rush, Chairman, CEO and President]

We haven't seen it yet, because there's still -- I believe there's something out there, Andrew, lurking. I mean, we have not seen it in some of our areas, especially here in Texas and whatever. I mean, we're putting up services, which is everywhere around here. The state, we typically -- some of the states we’re in like Florida and here that's still growing. So you know, I mean -- and I've tried to pick a residential pocket in some area, but I’m not up to date to pick it by state. But I can tell you here in Florida and couple other states it’s still going up pretty good.

[Andrew Obin, Bank of America]

Thank you. And I'm glad to say that the market today is rewarding your team for the hard work they've done this quarter. Thanks.

[Operator]

[Operator Instructions] And our next question comes from Joel Tiss from BMO.

[Joel Tiss, BMO]

Hey guys. How things are going?

[Rusty Rush, Chairman, CEO and President]

Going well, Joel. How are you.

[Joel Tiss, BMO]

All right, that’s quite the entourage you have to introduce at the beginning of every call now.

[Rusty Rush, Chairman, CEO and President]

I don't think it changed much. You just [Multiple Speakers] it does. I don’t think so. But that's okay. And same one when I'm introducing last couple years, but you're also getting [Multiple Speakers] you're getting up there. Joel, it's okay.

[Joel Tiss, BMO]

Yes, I was going to say maybe my hearing aid batteries haven't been updated lately?

[Rusty Rush, Chairman, CEO and President]

Probably not. But if you need help, I'll get you a good one, good place you’ll be able to replace.

[Joel Tiss, BMO]

Could you talk a little about where your parts and service mix might be three years from now like just sort of the flow of what you're looking at, and what you've announced in terms of acquisitions and the growth rates and all that? Just trying to give us a little bit of a guidepost?

[Rusty Rush, Chairman, CEO and President]

Well, the growth rates I gave you was on current same store basis. I've got to bring these other stores in to our organization. I think there's some upside as well, there’s certainly no question. But I think with some of our systems and some of our stuff, I think there's some upside on the acquisitions, especially from a technician perspective. When you look out there and I got 500 mobile folks, they got a couple. I mean, things like that. There'll be some of the things we do and there's some of our initiatives, that's one of our big initiatives mix go for years is to increase our mobiles with a lot. Like I said, high single digits for same-store growth, parts and service, parts growth, service growth will probably be more steady and gradual. I think I don't mind by looking back three years ago. We had always said things, we did real good the first year. Then the second year, we just added technicians but they really weren't good technicians. So we had deferred some, which we have, which is our proficiency backup.

Now, we’re actually adding back much more strategically, much more gradual. And our returns are way higher and we're going to keep it at that pace. We'd like to add a couple of hundred technicians over this year to our same-store growth next year, not 500 like we wanted to do years ago, so I don't think it's possible to do that and do it right with the right profession technicians. But you can't add skilled ones all the time, you have to take ones that are level ones and twos and train them up and assist, you’re overburdening, I mean you have to carry, they're not producing for theirselves. But we think we can continue to gradually add service. I think the parts business will continue to go up. And look inflation is going to help large part of itself to begin with from a revenue perspective.

When you look at what some of the prices that are coming in on the price base on parts, they're going by trucks, like everything you see in the grocery store too right now, as I said, it’s one of the things you worry about. But I think we will still out -- we're going to flat outrun the market and take share. We had a little hiccup last year, but we feel really good that we're taking share right now. And going back -- getting back on track, I know we are, results speak for that. What we want to do? We just want to take share. We want -- if the market is up 7%, I want to be up 9%. I don't think to take it all one day, but just consistently take share over time. And believe we could do that, especially when you look at -- I guess that you plug in this new acquisition, the integration of these stores into our math, it's a differentiator in my mind, it helps continue to allow us to differentiate from a geographic perspective.

Now, it’s what you do with that geography and how you go-to-market and that's what we're trying to do is tie everything together that we have as best we can from a -- keep trucks up and running. Different when you go-to-market with us, you get same price and you get all that from one coast to the other coast, you don't like 20 -- I mean it just stays within 27, 28 and we'll cover probably 70% or more of all the trucks sold inside our geography. So we'll continue to press that forward and hopefully that allows us with our systems and stuff to gain share, that's our goal on the part side and it’d be our goal on the other side [Technical Difficulty] acquisition, we got to go the next five years I want to double my mobile service fleet and I'm throwing it out there, but that's a new goal we came up with our last strategic outside meeting. We believe that the customer base is going to be demanding that.

We believe, especially with technology changes that are coming and things like that, you see in the automotive side and we've always done it here, but we're going to do a better job of it. We've got the biggest one from any dealership perspective by far mobile service lead out there, we're going to get bigger. So we got the ability to do it. We got the expertise and we obviously get the assets. So those are just different things we've got going to feed. I know I'm not giving you exact numbers but I'm trying to tell you the tools in the toolbox, we believe we've got those tools and we're going to keep pressing forward with.

[Joel Tiss, BMO]

And any unusual opportunities from all these trucking businesses being separated from their kind of conglomerate parents?

[Rusty Rush, Chairman, CEO and President]

Trucking businesses, I'm trying to follow you…

[Joel Tiss, BMO]

So like if that go getting spun out and the freight liner business coming out of…

[Rusty Rush, Chairman, CEO and President]

No, I don’t see anything for us right now. You know I don’t see any. My two Class 8 OEMs, what he said. I've got two, I'm not going to be able to be with the others, they're not going to allow me. Maybe their state laws and things -- franchise things inside of the agreements, I'm going to -- I’m a [Indiscernible] Peterbilt and that was to when it comes to Class 8 person. That could be -- I think, there might be other opportunities. Now my OEMs with new technologies coming, it's going to breed a little confusion in the marketplace, not yet everybody talks about it all right now, just wait for a couple three years and see. And I believe our OEMs will be leading the pack in that, but there are other independent people out there. Well, there’s technologies that it's going to be interesting to watch and we’ll have our eyes out there. But I do believe in our OEMs and their capabilities to meet the changing technologies that are going to be demanded by the governments, I do believe.

We might be pushing a little too far. I think that some of the demands -- you know when we talk about electric and hydrogen and fuel cell and all the other good stuff, the governments better be careful pressing in too hard, because we got to get -- we had catched up to what we want. I know we've got to clean things up. But those types of things will be where opportunities might come, but I can't see right now. But tight now with the OEMs I have participated in that transition, this is a transitioning decade like never seen. Transition creates a little bit confusion, which creates opportunity, trust they were poised.

[Joel Tiss, BMO]

And just last and maybe you're kind of already answered it that's too far away. But any -- do you feel any need to get into like easy charging business or anything like that, like things that you’re thinking about kind of couple of years out or it's just…

[Rusty Rush, Chairman, CEO and President]

No, I know it's not way too early. We're looking in a lot of stuff. By this time next year, every store in California will be slower to have all the charging stuff. Obviously, we've got to meet the needs of the -- California is the leader in it. So we'll be there a year from now. That'll be where we're learning. We're learning with customers. We have trucks resold, we have electric trucks resold in different marketplaces, I'm not going get into specifics. And we look forward to doing more around that space. But again, I believe I'm not going to go and listening to all, I think you probably already heard enough. But I believe it's going to be market segment driven as to what technologies went up.

Obviously, in Class 6, 7, finally get to the end of this decade, I'm not sure it will be 15% or more, it's not going to be that way on heavy. You’re not going to see that on the TL side. You’ll get it in certain applications and certain market segments, but that's not going to, I believe, work for just pure TL over the road, at least not now, it could be in 20 years or so. But I don't think we're there with that. But you know you got folks to -- I know, hydrogen and I see some people will go no, some people oh, yes. There's a lot of things going on and that's what's going to create some confusion as things transition over the next decade, driven by -- we all have to deal with ESG and it’s real and the environmental piece. But I think as I said technologies will be driven just by market segments we'll adapt to whatever makes sense. This was not -- these still will be phased out over time, it needs to be. But it's not going away right now. We're going to be multipronged and working with whatever technology is out there, but always trying to be on the leading not bleeding edge.

[Operator]

Thank you. And I'm showing no further questions. I would now like to turn the call back to Mr. Rusty Rush, Chairman, CEO and President for closing remarks.

[Rusty Rush, Chairman, CEO and President]

Thank you. Well, I appreciate everybody's time. Obviously, it'll be a little longer time period till we talk in February. So I want to wish everyone happy holidays and enjoy your families and enjoy the time that you get to spend with them. And we will talk to you in February. Thank you very much.

[Operator]

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