Rush Enterprises Inc

NASDAQ:RUSHA

Earnings Call Analysis

Challenging Market with Strategic Confidence

In 2023, the company achieved $7.9 billion in annual revenues and a net income of $347 million or $4.15 per diluted share with Q4 revenues of $2 billion and net income of $78 million or $0.95 per diluted share, despite challenging conditions including low freight rates and high interest rates. The firm sold 17,457 new Class 8 trucks and 13,644 new Class 4-7 trucks, with aftermarket revenues up 8% and annual absorption rate at 135.3% year-over-year. Moving forward, challenging conditions are expected to continue into the first half of 2024 but with flat to modest aftermarket growth anticipated. New Class 8 truck sales are projected to drop by 22% industry-wide, and demand for used trucks is expected to remain flat with a deceleration of depreciation. Despite this, the company is poised for solid performance in Class 4-7 truck sales and confident in its strategic positioning and operational decisions.

Overall Performance and Dividend Declaration

Despite a challenging economic landscape marked by low freight rates and high interest rates, the company successfully achieved an annual revenue of $7.9 billion and net income of $347 million, translating to $4.15 per diluted share. For the fourth quarter, revenue reached $2 billion with a net income of $78 million, or $0.95 per diluted share. Additionally, a cash dividend of $0.17 per common share was declared.

Aftermarket Growth and Staff Expansion

The company saw a robust 8% increase in aftermarket parts, service, and body shop revenues, totaling $2.6 billion. Key to this growth were 215 additional service technicians, enhancing service offerings, and strong sales from the energy, refuse, and leasing sectors. The aftermarket absorption rate registered at an impressive 135.3%.

Outlook on Aftermarket and Truck Sales Amid Economic Pressures

Looking forward, the company anticipates similar economic pressures to persist into the first half of 2024, comparable to the second half of 2023. Nevertheless, there is cautious optimism for the freight market softening to ease by summer. Strategies including a diversified customer base and strategic aftermarket initiatives are expected to deliver flat to modest aftermarket growth for the next year.

New and Used Truck Sales Dynamics

New Class 8 truck sales were 17,457 units in 2023, which is significant despite satisfying pent-up demand accumulation. However, an industry-wide projected downturn of approximately 22% is anticipated in 2024. Meanwhile, Class 4-7 truck sales were strong at 13,644 units. Demand for these vehicles remains robust, and production increases are expected to bolster sales in this category further. As for used trucks, sales maintained at 7,117 units, but declining values due to economic factors pose challenges for 2024, although stabilization in used truck values is forecasted.

Strategic Positioning and Workforce Appreciation

Amidst the economic hardships, the company is strategically positioned owing to a diversified customer base and growth of its technician workforce, which are key to achieving its long-term goals. The executive team took a moment to express gratitude towards employees for their excellent service and dedication throughout the difficult year of 2023.

Parts and Service Business Resilience

There is confidence in maintaining performance levels in the parts and service sector, even with a 12% drop in sales from smaller customer accounts. A focus on national accounts provided a counterbalance, showcasing substantial growth around 18-20%, and a strategic approach to customer diversity has bolstered overall growth despite high pressure from weaker segments of the business.

National Account Surge Amidst Small Customer Decline

National accounts reported a considerable growth rate, considerably up in the high teens, marking an important balance against the decline in smaller customer accounts, which make up 32% of the business. Vocational areas such as refuse and oil and gas experienced positive trends, with the diverse customer profile overall allowing the company to navigate a tumultuous period effectively.

First Quarter Outlook and Strategic Focus

The first quarter is set to see traditional increases in G&A expenses alongside an anticipated decline in truck sales. However, executives expect a performance better than the projected 22% industry setback. Growth in aftermarket parts and service is expected to be flat in the first half of 2024, but improvement initiatives may lead to share gains and subtle growth. Furthermore, potential prebuying activity in 2025 and 2026 due to upcoming EPA regulations adds another dynamic to market expectations.

Future Predictions: Prebuying and Allocation Market

The company predicts a return to an allocation market by 2025, a scenario where demand exceeds supply and manufacturers must allocate their products to dealerships. This anticipation ties in with the expected prebuying ahead of new EPA regulations effective January 2027.

Unwavering Confidence in Strategic Outlook

Executive confidence remains steadfast with no change to the previously maintained outlook. The company prefers to maintain, or even exceed, forecasted performance levels rather than adjust expectations downwards.

Market Bottoming and Sales Recovery Expectation

There is an expectation that truck sales will bottom by summer, with subsequent recovery towards year-end. Although used truck pricing is witnessing a continued decline, a stabilization is anticipated before the end of the year, which, along with improvement in the spot market for trucks, could lead to an uplift in demand and pricing.

Regional Economic Performance and Market Segmentation

Different regions exhibit varied performance, with Texas and Florida doing well, while some softness is observed in Ohio. By market segments, construction is perceived as robust, and municipal businesses show steady growth. Overall, there is confidence in continued execution and growth in the aftermarket segment despite a potentially softer truck market in 2024.

Summarizing the State of Affairs

Rush Enterprises is navigating an environment where the truck market is nearing its low point, but the broader economy remains stable, and the company's execution remains on track to meet its strategic goals.

Earnings Call Transcript 2023-Q4

[Operator]

Hello, and thank you for standing by. Welcome to Rush Enterprises, Inc. reports Fourth Quarter 2023 Earnings Results. [Operator Instructions]

I would now like to hand the conference over to Rusty Rush, President, CEO and Chairman of the Board. Sir, you may begin.

[W. Rush, executive]

Well, good morning, and welcome to our fourth quarter year-end 2023 earnings release call. On the call are Mike McRoberts, 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. Now Steve will say a few words regarding forward-looking statements.

[Steven Keller, executive]

Certain statements we may 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, 2022, and in our other filings with the Securities and Exchange Commission.

[W. Rush, executive]

As indicated in our news release, we achieved annual revenues of $7.9 billion and net income of $347 million or $4.15 per diluted share. In the fourth quarter, we achieved revenues of $2 billion and net income of $78 million or $0.95 per diluted share. In addition, we are pleased to declare a cash dividend of $0.17 per common share.

Throughout 2023, there was pent-up demand for new commercial vehicles due to limited new truck production over the past few years. With respect to new Class 8 trucks, that pent-up demand was largely fulfilled by the end of 2023. With respect to the Class 4-7 commercial vehicles, demand remains solid. The manufacturers we represent, where we will increase production throughout the year, which led us to significant -- which leads us to significantly outpacing the industry with respect to new Class 4-7 commercial vehicle sales.

Despite a challenging operating environment in 2023, caused by low freight rates and high interest rates which led to great general softness in parts and service sales industry-wide. We were able to achieve a healthy growth in aftermarket revenues. The growth was due primarily to our ability to support large fleets and strong demand from the diverse range of market segments we support, including our refuse, public sector, wholesale and energy customers. In addition, our aftermarket revenues also increased due to the addition of 215 service technicians to our network. Expanding our service technician workforce is a key aspect of -- and [ center ] of our strategic initiatives. Overall, we are very proud of both our operational and financial performance in 2023.

In the aftermarket, our annual parts, service and body shop revenues were $2.6 billion, up 8% over 2022 aftermarket results and our annual absorption rate was 135.3%. As I previously mentioned, we added 215 service technicians to our network last year, which enhanced our ability to execute on certain commercial [indiscernible] initiatives, including Xpress services, contract maintenance and mobile service offerings. We also experienced healthy parts sales growth from our energy, refuse and leasing customers.

Looking ahead, we expect the challenging freight conditions and high interest rates will continue to impact our customers and that aftermarket demand in the first half of 2024, will be similar to the second half of 2023. However, we are cautiously optimistic that the current freight recession may begin to ease in summer. In addition, we believe that our diverse customer base, our ability to support large national fleets and our ongoing focus on our strategic aftermarket initiatives will allow us to outpace the aftermarket industry and to achieve flat to modest aftermarket growth in 2024.

Turning to truck sales. We sold 17,457 new Class 8 trucks in 2023, accounting for 6.2% of the total U.S. Class 8 market and 2% of the Class 8 market in Canada. As previously stated, we experienced healthy demand from a variety of market segments. However, the pent-up demand on the Class 8 market has been satisfied. ACT Research forecasts Class 8 retail sales to be 214,300 units in 2024, down roughly 22% from 2023. Though the industry is expecting new Class 8 truck sales to be down significantly in 2024 due to challenging economic and industry conditions, we are confident that we'll be able to navigate a down year and outpace the industry in 2024 due to our strategic decisions we made in prior years to diversify our customer base and focus on vocational customers.

Our Class 4-7 new truck sales reached 13,644 units in 2023 or 5.1% of the U.S. market and 2.9% of the Canadian market. In addition, pent-up demand due to limited new [ medium-duty ] commercial vehicle production over the last few years, the manufacturers that we represent were able to increase production throughout the year. Those factors, along with our ongoing efforts to diversify our customer base and support large national accounts, allowed us to significantly outperform the industry in 2023.

We are still experiencing delays from truck body companies, and these delays impacted deliveries during the fourth quarter, which limited our growth somewhat. ACT Research forecast Class 4-7 retail sales to be 254,250 units in 2023, up slightly from 2023 -- 2022 -- as we look -- in 2023. As we look ahead, we expect they will continue to see improvements in the medium-duty commercial vehicle production for the manufacturers we represent and we expect customer demand to remain strong. If both of these things occur, we believe our Class 4-7 commercial vehicle sales will remain strong in 2024.

Our used truck sales reached 7,117 units in 2023, relatively flat compared to 2022. Due to high interest rates and soft freight rates, demand for used trucks was weak and used truck values declined throughout 2023. In 2024, we expect that demand for used trucks will remain flat, but the rate at which used trucks are depreciating will continue to decrease and the used truck values will stabilize somewhat over the course of the year. We are confident our diverse product mix and ability to move inventory throughout our network will help us to continue to effectively navigate the used truck market in 2024.

Looking ahead, we expect demand for Class 8 trucks to be soft while demand for Class 4-7 commercial vehicles remains healthy. It should be noted that delays from body companies may continue to impact deliveries of new Class 4-7 commercial vehicles. We will continue to monitor freight rates, interest rates, consumer spending and other economic factors that impact both commercial vehicle sales and after the market demand in our industry. Despite challenging market conditions, we are confident that the strategic decisions we've made in the past several years to diversify our customer base on supporting large national accounts and to add technicians to our workforce has us well positioned to perform in 2024.

As always, it is important that I take a moment to thank our employees for their incredible work during 2023 and providing world-class service to our customers while staying focused on our company's long-term goals.

With that, I'll take your questions.

[Operator]

[Operator Instructions] Our first question comes from the line of Justin Long with Stephens.

[Justin Long, analyst]

So I guess to start with the parts and service business, you've talked about the divergence in the trends between national accounts and the smaller customers. I'm curious how those 2 buckets performed in the fourth quarter? And just your general level of confidence on a net basis that the parts and service business has bottomed?

[W. Rush, executive]

Well, I'm pretty confident like I said in my notes that we expect to remain at least as good as where we are. I didn't want to -- I didn't want to push up. I think there's room for growth in parts and services in 2024. As I said, if it works, we would just be pacing along where we were in the second half of the year in 2023.

When you look at -- if you -- what I always love to do is take it to parts and pieces, right? At the end of the day, you look at the small accounts, right? We talked about this before, the last 6 months, last couple of calls. The fact that -- for the year, they were down almost 12%. Now quarter-wise, I don't have that in front of me, but I know it started only about 8% -- 7% to 8% in Q1 through [ help ] and ramped it up throughout the year. So I have got to believe that Q4 was probably down somewhere in the 13% to 14% range. And what we call those are unassigned accounts. But what you don't realize is sometimes those accounts still make up 32% of our business. So when you look at what we did and you talk about being down like that really continuing to decline over the year, you got to feel good about where you're at.

Like I've said before, maybe our margins were a [indiscernible] softer because some of the shift in what were the business we are doing over to more national accounts, which obviously demand a better pricing along with this one of their national accounts, right? So we were able to make up. That's 32% -- 1/3 of our business was down probably -- like I said, I don't have it in the fourth quarter, right, in front of me, but it was pushing 12% for the year. And I know it can decline more as the year [indiscernible] outside. I got to believe, it's in the 14% to 15% range in Q4, right?

So it's -- you got to feel good about where we're at, the focus that we've had. And it's not just over-the-road customers, right? We want to talk about the diversity of our customer base. I'm very proud of what we've done by putting a focus individually on each of these sectors. Assigning people at the highest corporate level through the mid-level to a site. We have over 300-plus outside parts and service salespeople. And while they focus on some of their local midsized accounts, we have really put the push on to the national accounts. And when you do that, you've got to -- you have to form relationships with both the high end of the corporation all the way down to the street level on -- in the individual areas that they have terminals or they have shops or whatever they have, whatever business they're in across the network.

So with that, that allowed us to achieve an 8% growth rate with it being down 12% on [ 1/3 ] of your business. So you can see -- you can extrapolate what -- how good -- what that net to the company, right? That's why it was a little softer because the unassigned accounts or your small accounts, and they're a little higher margin accounts, right? But we were able to overcome them the with -- I'd like to say -- overcome the 1/3 of your business being off 12% by the focus that we had. So we don't see that changing.

So when the small guy does come back, you got to feel real good about what -- where you're going to be when that does -- when that -- when it pivots back the other direction, which you've got to believe, we've been in a freight recession for what, 1.5 years, 2 years almost. It seems like -- while the company's been doing decently well, the freight market, as you know, all you got to do is read all the reports. It has been under a lot of stress here the last year [indiscernible].

[Justin Long, analyst]

That's helpful. And the national accounts, do you have a number on how much they were up for the full year just to compare that to what you're seeing with the unassigned accounts?

[W. Rush, executive]

Yes, they were up in the high teens. Around 20% -- somewhere between 18% and 20%. I don't -- I don't have the total number in which the stores we're talking about, but they were up somewhere in that. We break it into so many different segments too because we've still got a lot of midsized customers, too. As we get [indiscernible] while they're the largest growing thing we have going on, we still have a lot of midsized customers. We forget about they're a piece of it also. So you've got roughly, what, 32% in the small and you've got about 28%, we've got national accounts, okay, of our business. So the other 40% is really that middle bucket, which is the largest bucket we took, right? So the diversity of customers is really what's allowed us to navigate what has been a rough, rough time for a lot of our customer bases.

And that focus on vocational, right? When I talk about refuse being up, when I talk about oil and gas being up and our wholesale business still being up, [indiscernible] being up. All these other areas are up, they're up, okay? Regardless of whether they're national accounts or mid-level accounts. We break it into a lot of different buckets. But those are the areas that have allowed us to overcome with 32% of your customers are off 12% and still post on a positive year.

[Justin Long, analyst]

Got it. And I was wondering, too, if you could share anything on expectations for the first quarter maybe truck sales, parts and service? And Steve, I know typically, you see an uptick in G&A. So maybe some thoughts there as well.

[W. Rush, executive]

Yes. Well, first quarter is always -- G&A goes up. We didn't put it in the releases here. We put it over the last 25 years, but nothing has changed, right? All the equity comp and taxes and all that ramp back up and get expensed out in the first quarter. And that is natural for our business. You can go back in the model in every year. So we definitely expect that.

From a truck sales perspective, we are going to start declining, okay? There's no question that everyone knows, we've noted for a couple of years that 2024 was going to be a little bit soft due to -- and no one expected '23 to be as big as it was with all the demand, the pent-up demand. But the key thing in the truck sales side is, this is nothing that we didn't expect or we're not expecting. ACT is down about 22%. And I'm going to agree with that. I don't expect it to be down 22% in Q1, but I do expect it to be softer. And we expect to do better, by the way given the diversity of our customer base, right? I can tell you that the over-the-road business is going to be more like 30-plus for the whole year, I believe.

But the key thing is we've got '25 and '26 coming with EPA regulations of January 1 of '27, there will be -- I'm guessing as we get to the back half of this year, folks are going to wake up and realize that they are probably going to prebuy to '25 to '26 given -- not just the new technology, but I mean, I won't get into pricing, what the engines are going to cost? Can go up by January 1 of '27 with all the new aftermarket -- after treatment systems that are going into play to meet the new EP regulations. So as that we believe the freight market will go back to the [ older ] business is still the biggest piece of volume out there. So not in Rush, we're 50-50, right between [ vocation ] on that. But in the real market, it's still the [indiscernible] piece.

So those folks is -- they can get their feet underneath them here. It's been a long 1.5 years or 2, like I said, they get their feet under. I would expect some -- a prebuy to start possibly in the back quarter [indiscernible] in the back half of this year as folks realize what the cost and stuff will be around that equipment.

From an aftermarket perspective, yes, I said the first half would be flat when I went through it a minute ago. I have hopes that were up slightly, but I don't want to put that out there. I think some of the initiatives we have are still -- we keep rolling them out, and we still have [indiscernible] fruition on a lot of the ones that we have rolled out over the last couple of years. So I got to believe that we're still extremely focused on -- remember, we're also battling less inflation, okay? Regardless of the report yesterday. Overall, obviously, replacement is not what it was 2 years ago, or even in the first half of last year. So we're -- it will be real growth, it'll be taking share. That's what we focus on every day. We get up in the parts and service business is to take share.

So I've got to believe that we're going to be like -- I said flat. I have hopes to do way better or a little better. I'd love to say I can be low to mid-singles up for the year. But it's -- it's not as easy to look at as it was in the last couple of years, right? It's day-to-day, hand-to-hand [ compact ] type of work. But I have all the confidence in the world as I always do, and I think the results bear that out for the organization and our strategic initiatives that we've laid out there and what we're focused on as a -- as a group so that we can execute on those, right? I can believe we've executed in the past and we'll continue to execute as we go forward regardless of what the truck sales market is.

I can't make a truck market, but I expect to do better. I don't want to -- I am not going to guarantee but I expect to do better than 22%. I can promise you that. But that's going to be -- we're working that every day. You don't have the lead times. You don't have allocation like you had. That's out there anymore. So it's not like I've got a year long backlog of trucks. So I'll still say most of it, I can still sell you trucks and we won't sell in Q2, I'll give you some. So that's just where we're at. We're back to normal times. Okay. Let's just say that when it comes to truck sales.

I do think we'll be back to an allocation this time almost next year that I can -- I do believe that will come to pass, whether it's February, whether it's in April of next year. I can't tell you, but there's no doubt in my mind that we will be going back to an allocation market in '25.

[Justin Long, analyst]

Got it. And last one for me, Rusty, you've talked about earnings expectations and free cash flow expectations in the trough in 2024. Any change to your outlook there?

[W. Rush, executive]

None whatsoever. I don't take back anything I've said in the last couple of years, okay? And as usual, we're focused on -- I like to over-deliver about that.

[Operator]

Our next question comes from the line of Andrew Obin with Bank of America.

[Andrew Obin, analyst]

Are you calling the bottom of the cycle because that's what -- you know -- it's -- and have you called out? I don't think you've called the bottom of the cycle before. It seems that you're basically saying cycle will bottom sometime around this summer.

[W. Rush, executive]

Yes, I think so. I think we're -- you're going to have a little carryover. When it comes -- we're talking about truck sales, okay? I'm not talking about aftermarket business. Aftermarket business is totally different. But when it comes to Class 8 truck sales, I think that the summer is going to be a little more difficult than what we have experienced. There is some carryover into Q1 from finishing up the year. Remember, we're at the end of the frame. We don't manufacture them. We deliver them. A lot of times, trucks take bodies and things like that, and it can be up to 60 to 90 days for those trucks to get delivered to our customer base. So I say on the vocational side.

So Yes, I would tell you that it will [indiscernible] for us in Class 8 deliveries will probably be some time in summer. But again, like I said, I do expect -- the freight part, it cannot continue, I don't believe, to be as rough as it's been the last couple of years. So I would expect that to pick up. And along with what the EPA emissions loss of '27 -- in January 1, '27. I do firmly believe it will be a prebuy without question. Most people expect 2026 to be the biggest year in history, given decent economic conditions overall in the country, right?

So yes, I mean, I would tell you, truck sales will be softer in the second or the summer into Q2 and Q3 than what we have seen. But again, we believe -- when I say 22%, I think the majority of it will be in the summer, yes. But I expect to start bouncing back by the end of the year.

[Andrew Obin, analyst]

Excellent. And on -- can you just remind us when is used pricing bottoming?

[W. Rush, executive]

Well, is it -- I wish -- Andrew, if I could tell you that, you better give me a raise, which I would gladly take -- but any...

[Andrew Obin, analyst]

You're doing fine, Rusty. I think you're doing fine as it is.

[W. Rush, executive]

I would agree with that. I'm probably overpaid. Did I say that? Okay.

No, Andrew, I'll tell you, I will say this -- the decline in used truck pricing has continued. While it is not as dramatic as what it was, say, 1.5 years ago. It is still declining more than normal. I think our average used truck price was like [ 53,000 ] [indiscernible] and when you look at average and if you go back to '19 or was that [indiscernible] is in the high 40s or something like that, [ 47,000 ], [ 48,000 ]. So you got to believe with the inflationary of what trucks cost now, that spread has gotten only so far it could go. But the problem is that pricing is one thing. Demand is the other, right? And when you've got spot markets, which are the main driver of used truck values in such rough shape and down so much, it's still -- it will happen quick when it happens, you watch. I can't tell you when, though. That means I guess they don't get my raise, but exactly when, but I would tell you, I got to believe sometime before the year is out, but I don't look forward to the next.

It will continue to decline at a faster rate, but not as fast as it was declining. There are still trucks being put on the market over to a couple of batches this week in big numbers that people are driving on loads, which put pressure on it. It puts pressure on the market. But the most important thing is to create demand, which means you got to get the spot market back. You've got to have some of these other -- these over-the-road business spot market back to really stabilize it and make use truck values go up again -- it's still decelerating faster than what I would say normal percentages are, right?

[Andrew Obin, analyst]

Just a question. In terms of macro, and I always -- I love asking this question just because you have great systems. Can you just take us around the country just by region, how is the economy holding up relative to your expectations maybe 6 weeks ago? And I know that it's only 6 weeks, but you do have some of the best systems of anybody I cover. Just maybe you can take us around the country and tell us what Rusty Rush's, [indiscernible] view of the U.S. economy.

[W. Rush, executive]

Well, obviously, the biggest concentration we have would be in Texas, right? And Texas is doing just fine. Our Texas stores, there's still -- the state is still growing on the highest growing states in the nation and from both population and a business -- perspective for business is still coming in here. Florida is doing great. The -- what are we going to -- we're getting through, I would tell you, a little softer maybe lately in Ohio, I think -- and -- but I think Illinois is decent and doing well. We got West California is still in good shape. I do -- I worry about California with the new [ 24 hours ] car [indiscernible] that came in by the time we get to the back half of the year that they may be suffering on the truck sales side. Right now, they're doing fairly well, but we make sure to have some inventory, things like that to carry over into the markets out there. Oklahoma is still going strong. Arizona is decent.

So pretty decent across the Board. Like I said, a little softness in a state or so and really probably in Ohio for whatever reason, I've noticed it's a little softer up there recently, but I don't expect that to hold up. I expect that to then come back. So I hope it gives you some -- I mean -- go ahead.

I like looking at markets -- geographic markets. But other markets breaking it out in the good one. Construction is better. That's what we hope will help keep the order [indiscernible] better with the [indiscernible] hits that we're seeing on the road business, both for the large customer and for the small person, which we know pretty much how, right now out of our mix. But refuse is really going strong.

Construction is doing extremely well. Municipal business is holding in a strong with near moderate growth rates, as I said earlier, and we expect that to continue. It's like I said, the hardest thing we've got going is the small customer, right? That's why when the small customer does come back in the [indiscernible] business, we're going to be in really good shape because we're having overcome that 1/3 of our business being off double digits. So that's -- that will bring back. And I don't -- I expect vocational to continue to be strong, given the government monies that are out there that are being spent right now.

So look, '24 is not going to be what '23 was. But at the same time, it's going to be -- I'll stick to my guns as I was asked earlier by Justin about what I've said in the past, is we'll still execute -- the truck market, I can't make a truck market, right? I'll go in [indiscernible] to take share and grow in the aftermarket, and that's the goal of the organization. That's the highest most profitable business we do.

[Andrew Obin, analyst]

So if I were to summarize that truck market is bottoming, economy is solid, Rush Enterprises is executing. Is that a fair summary?

[W. Rush, executive]

That's what we like to think. I guess the proof of it is been in the numbers, but I think we've had a -- even going back to COVID year, right, in '20 and what we did in '21, what we did in '22, what we did in '23, we're going to execute really well, I believe, inside of what the '24 market with a 20-plus percent Class 8 decline, maybe not by us so maybe we're better than that. I don't want to guarantee anything, but I like to see us only be half of that, but I can't guarantee that because I still can build you something. It's still a moving target, right? We're back to normalized times. We get out of this allocation world we live in. And so everybody's got to sharpen up their tools and go to work and that there and take some share to the company -- is a little more competitive in the environment. But we've always been able to do that.

[Andrew Obin, analyst]

You know my view, you guys had built a high-quality organization.

[Operator]

Thank you. Ladies and gentlemen, I'm showing no further questions in the queue. I would now like to turn the call back over to Rusty for closing remarks.

[W. Rush, executive]

Yes. I want to thank everybody for joining us this morning, and we will see you in mid-April. And you and your love ones, have a Happy Valentine's Day. Thank you very much.

[Operator]

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.