<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
--------------- -----------------
Commission file number 0-20797
--------------
RUSH ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
Texas 74-1733016
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8810 I.H. 10 East
San Antonio, Texas 78219
(Address of principal executive offices)
(Zip Code)
(210) 661-4511
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
--------------
Indicated below is the number of shares outstanding of the registrant's
only class of common stock, as of November 7, 1999.
<TABLE>
<CAPTION>
Number of
Shares
Title of Class Outstanding
-------------- -----------
<S> <C>
Common Stock, $.01 Par Value 7,002,044
</TABLE>
<PAGE> 2
RUSH ENTERPRISES, INC., AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - September 30, 1999 (unaudited) and December 31, 1998 ......................3
Consolidated Statements of Income - For the Three and Nine Months
Ended September 30, 1999 and 1998 (unaudited) ...........................................................4
Consolidated Statements of Cash Flows - For the Nine Months Ended
September 30, 1999 and 1998 (unaudited) .................................................................5
Notes to Consolidated Financial Statements ..............................................................6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations ........................................................................9
Item 3. Quantitative and Qualitative Disclosures about Market Risk ........................................17
PART II. OTHER INFORMATION .........................................................................................18
SIGNATURES ..........................................................................................................20
</TABLE>
2
<PAGE> 3
RUSH ENTERPRISES, INC., AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
(Unaudited) (Audited)
-------------- --------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 29,917 $ 22,516
Accounts receivable, net 25,154 19,478
Inventories 144,299 107,140
Prepaid expenses and other 388 607
-------------- --------------
Total current assets 199,758 149,741
PROPERTY AND EQUIPMENT, net 79,064 54,448
OTHER ASSETS, net 18,050 16,511
-------------- --------------
Total assets $ 296,872 $ 220,700
============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Floor plan notes payable $ 134,420 $ 89,212
Current maturities of long-term debt 6,379 7,095
Advances outstanding under lines of credit 10 10
Trade accounts payable 8,510 6,926
Accrued expenses 16,148 20,086
Note payable to shareholder 8,600 10,700
-------------- --------------
Total current liabilities 174,067 134,029
LONG-TERM DEBT, net of current maturities 54,970 32,164
DEFERRED INCOME TAXES, net 3,576 1,638
COMMITMENTS AND CONTINGENCIES (Note 2)
SHAREHOLDERS' EQUITY:
Preferred stock, par value $.01 per share; 1,000,000 shares authorized; 0 shares
outstanding in 1998 and 1999 -- --
Common stock, par value $.01 per share; 25,000,000 shares authorized; 6,643,730 and
6,646,488 shares outstanding in 1998 and 1999, respectively 66 66
Additional paid-in capital 33,342 33,342
Retained earnings 30,851 19,461
-------------- --------------
Total shareholders' equity 64,259 52,869
-------------- --------------
Total liabilities and shareholders' equity $ 296,872 $ 220,700
============== ==============
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
3
<PAGE> 4
RUSH ENTERPRISES, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT EARNINGS PER SHARE - UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------------- -----------------------------
1999 1998 1999 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
REVENUES:
New and used truck sales $ 149,931 $ 105,864 $ 401,222 $ 308,243
Parts and service 32,949 28,806 94,567 79,182
Construction equipment sales 16,592 6,828 41,191 24,741
Lease and rental 6,936 4,665 18,273 13,640
Finance and insurance 3,326 2,743 10,829 8,140
Retail sales 4,076 4,454 13,565 9,705
Other 558 656 2,452 1,947
------------- ------------- ------------- -------------
TOTAL REVENUES 214,844 153,540 582,099 445,598
COST OF PRODUCTS SOLD 181,179 126,366 485,066 370,193
------------- ------------- ------------- -------------
GROSS PROFIT 33,665 27,174 97,033 75,405
SELLING, GENERAL AND ADMINISTRATIVE 23,229 19,663 68,436 56,173
DEPRECIATION AND AMORTIZATION 1,483 1,266 4,270 3,340
------------- ------------- ------------- -------------
OPERATING INCOME 8,953 6,245 24,327 15,892
INTEREST EXPENSE 1,977 1,467 5,343 4,335
------------- ------------- ------------- -------------
INCOME BEFORE INCOME TAXES 6,976 4,778 18,984 11,557
PROVISION FOR INCOME TAXES 2,791 1,910 7,594 4,622
------------- ------------- ------------- -------------
NET INCOME $ 4,185 $ 2,868 $ 11,390 $ 6,935
============= ============= ============= =============
EARNINGS PER SHARE:
Basic $ 0.63 $ 0.43 $ 1.71 $ 1.04
============= ============= ============= =============
Diluted $ 0.61 $ 0.43 $ 1.68 $ 1.04
============= ============= ============= =============
Weighted average shares outstanding
Basic 6,646 6,644 6,646 6,644
============= ============= ============= =============
Diluted 6,860 6,664 6,799 6,664
============= ============= ============= =============
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
4
<PAGE> 5
RUSH ENTERPRISES, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
1999 1998
---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 11,390 $ 6,935
Adjustments to reconcile net income to net cash (used in) provided by
operating activities- net of acquisitions
Depreciation and amortization 5,702 3,340
Gain on sale of property and equipment (80) (35)
Provision for deferred income tax expense 1,938 502
Change in accounts receivable, net (5,676) 2,531
Change in inventories (26,450) (10,845)
Change in prepaid expenses and other, net 219 (100)
Change in trade accounts payable 1,584 95
Change in accrued expenses (3,990) 3,508
---------- ----------
Net cash (used in) provided by operating activities (15,363) 5,931
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment (30,428) (11,621)
Proceeds from the sale of property and equipment 1,112 288
Business acquisitions (4,113) (8,625)
Change in other assets (2,059) 232
---------- ----------
Net cash used in investing activities (35,488) (19,726)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from debt 27,870 15,070
Principal payments on debt (7,880) (5,040)
Draws on floor plan notes payable, net 38,262 7,070
---------- ----------
Net cash provided by financing activities 58,252 17,100
---------- ----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 7,401 3,305
CASH AND CASH EQUIVALENTS, beginning of period 22,516 19,816
---------- ----------
CASH AND CASH EQUIVALENTS, end of period $ 29,917 $ 23,121
========== ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for-
Interest $ 5,298 $ 4,394
========== ==========
Income taxes $ 7,164 $ 3,956
========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
5
<PAGE> 6
RUSH ENTERPRISES, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1 - PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION
The interim consolidated financial statements included herein have been
prepared by Rush Enterprises, Inc. and its subsidiaries (collectively referred
to as the "Company"), without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission ("SEC"). All adjustments have been made
to the accompanying interim consolidated financial statements which are, in the
opinion of the Company's management, necessary for a fair presentation of the
Company's operating results. All adjustments are of a normal recurring nature.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations. It is
recommended that these interim consolidated financial statements be read in
conjunction with the consolidated financial statements and the notes thereto
included in the Company's Annual Report on form 10-K for the year ended December
31, 1998. Certain reclassifications have been made in prior period financial
statements to conform with the current period presentation.
2 - COMMITMENTS AND CONTINGENCIES
The Company is contingently liable to certain finance companies for
certain promissory notes and finance contracts, related to the sale of trucks
and construction equipment, sold to such finance companies. The Company's
recourse liability related to sold finance contracts is limited to 15 to 25
percent of the outstanding balance of each note sold to a finance company, with
the aggregate recourse liability for 1999 limited to $600,000.
The Company provides an allowance for repossession losses and early
repayment penalties.
The Company is involved in various claims and legal actions arising in
the ordinary course of business. The Company believes it is unlikely that the
final outcome of any of the claims or proceedings to which the Company is a
party would have a material adverse effect on the Company's financial position
or results of operations. However, due to the inherent uncertainty of
litigation, there can be no assurance that the resolution of any particular
claim or proceeding would not have a material adverse effect on the Company's
results of operations for the fiscal period in which such resolution occurred.
The Company has consulting agreements with certain individuals for an
aggregate monthly payment of $25,558. The agreements expire in 2000 through
2001.
6
<PAGE> 7
3 - EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted
earnings per share:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,
1999 1998 1999 1998
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Numerator:
Net income- numerator for basic and diluted
earnings per share $ 4,185,000 $ 2,868,000 $ 11,390,000 $ 6,935,000
Denominator:
Denominator for basic earnings per share-
weighted average shares 6,646,488 6,643,730 6,646,488 6,643,730
Effect of dilutive securities:
Employee and Director stock options 213,088 20,782 152,593 10,225
-------------- -------------- -------------- --------------
Denominator for diluted earnings per
share-adjusted weighted average shares 6,859,576 6,664,512 6,799,081 6,653,955
============== ============== ============== ==============
Basic earnings per share $ .63 $ .43 $ 1.71 $ 1.04
============== ============== ============== ==============
Diluted earnings per share $ .61 $ .43 $ 1.68 $ 1.04
============== ============== ============== ==============
</TABLE>
4 - SEGMENT INFORMATION
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 131 "Disclosures about Segments of an Enterprise and
Related Information" (SFAS 131). This statement requires that public business
enterprises report certain information about operating segments in complete sets
of financial statements of the enterprise and in condensed financial statements
of interim periods issued to shareholders. It also requires that public business
enterprises report certain information about their products and services, the
geographic areas in which they operate, and their major customers. The effective
date for SFAS 131 is for fiscal years beginning after December 15, 1997.
The Company has two reportable segments: the Heavy Duty Truck segment,
and the Construction Equipment segment. The Heavy Duty Truck segment operates a
regional network of truck centers that provides an integrated one-stop source
for the trucking needs of its customers, including retail sales of new Peterbilt
and used heavy-duty trucks; after-market parts, service and body shop
facilities; and a wide array of financial services, including the financing of
new and used truck purchases, insurance products and truck leasing and rentals.
The Heavy Duty Truck segment has locations in Texas, California, Colorado,
Oklahoma and Louisiana. The Construction Equipment segment, formed during 1997,
operates full-service John Deere dealerships that serves the Houston, Texas
Metropolitan and surrounding areas and 54 counties in western Michigan.
Dealership operations include the retail sale of new and used construction
equipment, after-market parts and service facilities, equipment rentals, and the
financing of new and used equipment.
The accounting policies of the segments are the same as those described
in the summary of significant accounting policies included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1998. The Company
evaluates performance based on income before income taxes not including
extraordinary items.
The Company accounts for intersegment sales and transfers at current
market prices as if the sales or transfers were to third parties. There were no
intersegment sales during the three months ended September 30, 1999.
7
<PAGE> 8
The Company's reportable segments are strategic business units that
offer different products and services. They are managed separately because each
business requires different technology and marketing strategies. Business units
were maintained through expansion and acquisitions. The following table contains
summarized information about reportable segment revenue, operating income and
segment assets, for the three and nine months ended September 30, 1999 and 1998:
(in thousands)
<TABLE>
<CAPTION>
HEAVY-DUTY CONSTRUCTION
TRUCK EQUIPMENT
SEGMENT SEGMENT ALL OTHER TOTALS
------- ------- --------- ------
<S> <C> <C> <C> <C>
Three months ended September 30, 1999
Revenues from external customers $ 183,837 $ 24,566 $ 6,441 $ 214,844
Segment income before taxes 6,156 337 483 6,976
Segment assets 204,913 74,119 17,840 296,872
Nine months ended September 30, 1999
Revenues from external customers $ 499,442 $ 62,016 $ 20,641 $ 582,099
Segment income before taxes 16,788 951 1,245 18,984
Segment assets 204,913 74,119 17,840 296,872
Three months ended September 30, 1998
Revenues from external customers $ 136,180 $ 10,644 $ 6,716 $ 153,540
Segment income before taxes 4,649 104 25 4,778
Segment assets 125,482 52,016 19,044 196,542
Nine months ended September 30, 1998
Revenues from external customers $ 393,839 $ 34,920 $ 16,839 $ 445,598
Segment income before taxes 10,901 328 328 11,557
Segment assets 125,482 52,016 19,044 196,542
</TABLE>
Revenues from segments below the reportable quantitative thresholds are
attributable to four operating segments of the Company. Those segments include a
tire company, a farm and ranch retail center, an insurance company, and a
hunting lease operation. None of those segments has ever met any of the
quantitative thresholds for determining reportable segments.
5 - SUBSEQUENT EVENTS
On October 4, 1999, the Company, acquired the assets of Southwest
Peterbilt, Inc., Southwest Truck Center, Inc., and New Mexico Peterbilt, Inc.
(Southwest) a Peterbilt truck dealer. The transaction was valued at $23.9
million with the purchase price paid in a combination of cash and the Company's
stock.
In September 1999, the Company entered into an agreement with Norm Pressley
Truck Center, Inc. (Pressley) to purchase the assets of three Peterbilt
dealerships in the southwestern United States. The Company anticipates the
purchase price for Pressley will be approximately $2.5 million for the net book
value of acquired assets plus $2.9 million in goodwill. An additional $700,000
may be paid based on achievement of a performance-based objective. The Pressley
acquisition is subject to customary closing conditions and is expected to close
on or about December 1, 1999. No assurances can be made that the Company will
consummate the Pressley acquisition.
8
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Certain statements contained in this Form 10-Q are "forward-looking
statements" within the meaning of the Section 27A of the Securities Act of 1933
and Section 21E of the Exchange Act of 1934. Specifically, all statements other
than statements of historical fact included in this Form 10-Q regarding the
Company's financial position, business strategy and plans and objectives of
management of the Company for future operations are forward-looking statements.
These forward-looking statements are based on the beliefs of the Company's
management, as well as assumptions made by and information currently available
to the Company's management. When used in this report, the words "anticipate,"
"believe," "estimate," "expect" and "intend" and words or phrases of similar
import, as they relate to the Company or its subsidiaries or Company management,
are intended to identify forward-looking statements. Such statements reflect the
current view of the Company with respect to future events and are subject to
certain risks, uncertainties and assumptions related to certain factors
including, without limitation, competitive factors, general economic conditions,
customer relations, relationships with vendors, the interest rate environment,
governmental regulation and supervision, seasonality, distribution networks,
product introductions and acceptance, technological change, changes in industry
practices, onetime events and other factors described herein and in the
Company's Registration Statement on Form S-1 (File No. 333-3346) and in the
Company's annual, quarterly and other reports filed with the Securities and
Exchange Commission (collectively, "cautionary statements"). Although the
Company believes that its expectations are reasonable, it can give no assurance
that such expectations will prove to be correct. Based upon changing conditions,
should any one or more of these risks or uncertainties materialize, or should
any underlying assumptions prove incorrect, actual results may vary materially
from those described herein as anticipated, believed, estimated, expected, or
intended. All subsequent written and oral forward-looking statements
attributable to the Company or persons acting on its behalf are expressly
qualified in their entirety by the applicable cautionary statements. The Company
does not intend to update these forward-looking statements.
The following comments should be read in conjunction with the Company's
consolidated financial statements and related notes included elsewhere in this
Quarterly Report on Form 10-Q.
GENERAL
Rush Enterprises was incorporated in Texas in 1965 and currently
consists of a Heavy Duty Truck segment and a Construction Equipment segment. The
Heavy Duty Truck segment operates a regional network of truck centers in Texas,
California, Oklahoma, Colorado and Louisiana that provide an integrated one-stop
source for the trucking needs of its customers, including retail sales of new
and used Peterbilt heavy-duty trucks; parts, service and body shop facilities;
and a wide array of financial services, including the financing of new and used
truck purchases, insurance products and truck leasing and rentals. The
Construction Equipment segment operates a network of equipment centers in Texas
and Michigan, whose operations include the retail sale of new and used
equipment; after-market parts and service facilities; equipment rentals; and the
financing of new and used equipment. The Company also operates a retail division
selling farm and ranch supplies through its acquisition in March 1998, for
approximately $10.5 million, of D&D Farm and Ranch Supermarket in the San
Antonio, Texas area.
The Company has undertaken significant acquisitions and expansion
efforts in both the Heavy Duty Truck and Construction Equipment segments in the
past two years. Its growth strategy is to realize economies of scale, favorable
purchasing power and cost savings in centralized management through acquisitions
and growth inside existing territories. There can be no assurance, however, that
as the Company continues to develop its networks, it will realize these
benefits.
9
<PAGE> 10
In 1997, the Company acquired two full service Peterbilt dealerships in
Denver and Greeley, Colorado, for approximately $7.9 million and opened a new
full service Peterbilt dealership in Pharr, Texas. In 1998 it opened a used
truck sales lot in Austin, Texas and expanded and relocated its facilities in
Laredo, Texas and Bosier City, Louisiana.
In 1997, the Company acquired its first full service John Deere
dealership in Houston, Texas for approximately $30.2 million. In 1998 it opened
a combination heavy duty truck and construction equipment dealership in
Beaumont, Texas, a location positioned to take advantage of synergies between
heavy duty truck and construction equipment customers in the Houston Gulf Coast
area. In 1998, the Company also acquired four John Deere dealerships covering 54
counties in western Michigan through the acquisition of Klooster Equipment, Inc.
for approximately $13.1 million.
In August 1999, the Company acquired the assets of Calvert Equipment
Inc., (Calvert), a John Deere construction equipment dealership. The acquisition
encompasses 13 counties in Eastern Michigan, including two full-service
dealerships located in the Detroit and Flint areas. The transaction was valued
at $11.1 million with the purchase price paid in a combination of cash and notes
payable.
In October 1999, the Company acquired the assets of Southwest Peterbilt
Inc., Southwest Truck Center Inc., and New Mexico Peterbilt Inc., (Southwest) a
Peterbilt truck dealer. The acquisition provides Rush with the exclusive rights
to sell Peterbilt trucks and parts from five new locations encompassing most of
Arizona and New Mexico, including the cities of Phoenix, Tucson, Flagstaff and
Albuquerque. Rush now operates 29 truck locations in 7 states. The transaction
was valued at $23.9 million with the purchase price paid in a combination of
cash and the Company's common stock. An additional $4.0 million may be paid
based on achievement of a performance-based objective.
In September 1999, the Company entered into an agreement with Norm
Pressley Truck Center, Inc. (Pressley) to purchase the assets of three Peterbilt
dealerships in the southwestern United States. The Company anticipates the
purchase price for Pressley will be approximately $2.5 million for the net book
value of acquired assets plus $2.9 million in goodwill. An additional $700,000
may be paid based on achievement of a performance-based objective.
These acquisitions are intended to take advantage of increasing truck
traffic along major highway corridors in the South and Southwest and border
traffic between the U.S. and Mexico. The Pressley acquisition is subject to
customary closing conditions and is expected to close on or about December 1,
1999. No assurances can be made that the Company will consummate the Pressley
acquisition.
10
<PAGE> 11
RESULTS OF OPERATIONS
The following discussion and analysis is of the Company's results of
operations for the three and nine months ended September 30, 1999 and 1998.
The following table sets forth for the periods indicated certain
financial data as a percentage of total revenues:
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------- -----------------------
1999 1998 1999 1998
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
New and used truck sales 69.8% 68.9% 68.9% 69.2%
Parts and service 15.3 18.8 16.3 17.8
Construction equipment sales 7.7 4.5 7.1 5.5
Lease and rental 3.2 3.0 3.1 3.1
Finance and insurance 1.6 1.8 1.9 1.8
Retail sales 2.1 2.6 2.3 2.2
Other 0.3 0.4 0.4 0.4
---------- ---------- ---------- ----------
Total revenues 100.0 100.0 100.0 100.0
Cost of products sold 84.3 82.3 83.3 83.1
---------- ---------- ---------- ----------
Gross profit 15.7 17.7 16.7 16.9
Selling, general and administrative
expenses 10.8 12.8 11.8 12.6
Depreciation and amortization 0.7 0.8 0.7 0.7
---------- ---------- ---------- ----------
Operating income 4.2 4.1 4.2 3.6
Interest expense 0.9 1.0 0.9 1.0
---------- ---------- ---------- ----------
Income before income taxes 3.3 3.1 3.3 2.6
Provision for income taxes 1.3 1.2 1.3 1.0
---------- ---------- ---------- ----------
Net income 2.0% 1.9% 2.0% 1.6%
========== ========== ========== ==========
</TABLE>
THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1998
Revenues
Revenues increased by approximately $61.3 million, or 39.9%, from
$153.5 million to $214.8 million from the third quarter of 1998 to the third
quarter of 1999. Approximately, $11.5 million in sales is attributable to the
addition of the Michigan John Deere construction equipment dealerships, while
the remaining increase of $49.8 million, or 32.4%, is attributable to same store
growth. Sales of new and used trucks increased by approximately $44.1 million,
or 41.6%, from $105.8 million to $149.9 million from the third quarter of 1998
to the third quarter of 1999. Unit sales of new trucks increased by 35.2% from
the third quarter of 1998 to the third quarter of 1999, while new truck average
revenue per unit increased by 13.9%. Unit sales of used trucks decreased by
approximately 5.0% from the third quarter of 1998 to the third quarter of 1999.
The average sales price per used unit remained relatively flat, resulting in an
overall decrease of $1.2 million in used truck sales. Quarterly new unit
deliveries are affected by manufacturing schedules and the timing of fleet
deliveries. Average new truck prices increased due to a change in product mix
and customary price increases. Used truck sales were affected by the lack of
availability of quality used truck inventory in the market.
11
<PAGE> 12
Parts and service sales increased by approximately $4.1 million, or
14.4%, from $28.8 million to $32.9 million from the third quarter of 1998 to the
third quarter of 1999. The increase was due to same store growth of $1.9 million
or 6.6%, and parts and service sales of $2.2 million from the Michigan John
Deere construction equipment dealerships.
Sale of new and used construction equipment increased approximately
$9.8 million, or 143.0%, from $6.8 million to $16.6 million from the third
quarter of 1998 to the third quarter of 1999. The increase is primarily due to
the acquisition of the Michigan John Deere construction equipment stores. New
and used construction equipment unit sales were 84 and 32, respectively, during
the third quarter of 1999, compared to 45 and 27 during the third quarter of
1998.
Lease and rental revenues increased by approximately $2.3 million, or
48.7% from $4.7 million to $6.9 million. Approximately $1.2 million of the
increase is attributable to the addition of the Michigan John Deere construction
equipment stores, with the remaining increase of $1.1 million due to same store
growth.
Finance and insurance revenues increased by approximately $583,000, or
21.3%, from $2.7 million to $3.3 million from the third quarter of 1998 to the
third quarter of 1999. The increase resulted from the increase in truck
revenues. Finance and insurance revenues have limited direct costs and,
therefore contribute a disproportionate share of operating profits.
Gross Profit
Gross profit increased by approximately $6.5 million, or 23.9%, from
$27.2 million to $33.7 million from the third quarter of 1998 to the third
quarter of 1999. Gross profit as a percentage of sales decreased from 17.7% in
the third quarter of 1998 to 15.7% in the third quarter of 1999. The decrease in
gross profit as a percentage of sales was a result of a change in sales mix.
Parts and service, and finance and insurance sales are higher margin profit
centers and decreased as a percentage of revenues, while truck and construction
equipment sales, lower margin profit centers, increased as a percentage of
revenues.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased by approximately
$3.5 million, from $19.7 million to $23.2 million, or 18.1%, from the third
quarter of 1998 to the third quarter of 1999. Selling, general and
administrative expenses as a percentage of sales decreased from 12.8% to 10.8%
from the third quarter of 1998 to the third quarter of 1999. This decrease as a
percentage of sales is a result of operating efficiencies and lower commission
expense due to decreased gross margins.
Interest Expense
Interest expense increased by approximately $510,000 or 34.8%, from
$1.5 million to $2.0 million, from the third quarter of 1998 to the third
quarter of 1999, primarily as the result of increased levels of indebtedness due
to higher floor plan liability levels, and additional real estate and leased
unit borrowings.
Income before Income Taxes
Income before income taxes increased by $2.2 million, or 46.0%, from
$4.8 million to $7.0 million from the third quarter of 1998 to the third quarter
of 1999, as a result of the factors described above.
Income Taxes
The Company has provided for taxes at a 40% effective rate.
12
<PAGE> 13
NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 1998
Revenues
Revenues increased by approximately $136.5 million, or 30.6%, from
$445.6 million to $582.1 million from the first nine months of 1998 to the first
nine months of 1999. Sales of new and used trucks increased by approximately
$93.0 million, or 30.2%, from $308.2 million to $401.2 million from the first
nine months of 1998 to the first nine months of 1999. Unit sales of new and used
trucks increased by 24.7% and 2.2%, respectively, from the first nine months of
1998 to the first nine months of 1999, while new and used truck average revenue
per unit increased by 8.8% and 6.3%, respectively. Average new truck prices
increased due to a change in product mix and customary price increases. Although
used truck prices increased due to a change in product mix and increased demand
for late model products, the rate of growth was affected by the lack of
availability of quality used truck inventory in the market.
Parts and service sales increased by approximately $15.4 million, or
19.4%, from $79.2 million to $94.6 million. The increase consisted of same store
growth of $8.9 million or 11.2%, and parts and service sales associated with
addition of the Michigan John Deere construction equipment dealerships of $6.5
million.
Sale of new and used construction equipment increased approximately
$16.5 million, or 66.5% from $24.7 million to $41.2 million from the first nine
months of 1998 to the first nine months of 1999. The increase is primarily due
to the acquisition of the Michigan John Deere construction equipment
dealerships. New and used equipment unit sales were 370 and 175, respectively,
during the first nine months of 1999, compared to 173 and 121 during the first
nine months of 1998.
Lease and rental revenues increased by approximately $4.6 million, or
34.0% from $13.7 million to $18.3 million from the first nine months of 1998 to
the first nine months of 1999. The increase was due to $2.4 million of lease and
rental revenues generated by the Michigan John Deere construction equipment
stores acquired in September 1998 and August 1999, and same store growth in
revenues of $1.1 million or 12.2%.
Finance and insurance revenues increased by approximately $2.7 million,
or 33.0%, from $8.1 million to $10.8 million from the first nine months of 1998
to the first nine months of 1999. The increase resulted from the increase in
truck revenues and rate increases. Finance and insurance revenues have limited
direct costs and, therefore, contribute a disproportionate share of operating
profits.
Gross Profit
Gross profit increased by approximately $21.6 million, or 28.7%, from
$75.4 million to $97.0 million from the first nine months of 1998 to the first
nine months of 1999. Gross profit as a percentage of sales decreased slightly
from 16.9% to 16.7% from the first nine months of 1998 to the first nine months
of 1999.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased by approximately
$12.3 million, from $56.2 million to $68.4 million, or 21.8%, from the first
nine months of 1998 to the first nine months of 1999. The increase resulted from
approximately $4.9 million of selling, general and administrative expenses
related to the acquisition and integration of the Michigan John Deere
construction equipment dealerships and D & D Farm and Ranch Supermarket, Inc.
Selling, general and administrative expenses as a percentage of revenue
decreased from 12.6% in the first nine months of 1998 to 11.8% in the first nine
months of 1999.
13
<PAGE> 14
Interest Expense
Interest expense increased by approximately $1.0 million from $4.3
million to $5.3 million, or 23.3%, from the first nine months of 1998 to the
first nine months of 1999, primarily as the result of increased levels of
indebtedness due to higher floor plan liability levels, and additional real
estate and leased unit borrowings.
Income before Income Taxes
Income before income taxes increased by $7.4 million, or 64.3% from
$11.6 million to $19.0 million from the first nine months of 1998 to the first
nine months of 1999, as a result of the factors described above.
Income Taxes
The Company has provided for taxes at a 40% effective rate.
LIQUIDITY AND CAPITAL RESOURCES
The Company's short-term cash needs are primarily for working capital,
including inventory requirements, expansion of existing facilities and the
acquisition of new facilities. These short-term cash needs have historically
been financed with retained earnings and borrowings under credit facilities
available to the Company. The Company believes that its existing cash balances,
existing sources of liquidity and anticipated revenues from operations will
satisfy its projected working capital and other cash requirements.
At September 30, 1999, the Company had working capital of approximately
$25.7 million, including $29.9 million in cash and cash equivalents, $25.2
million in accounts receivable, $144.3 million in inventories, and $0.4 million
in prepaid expenses and other, less $24.7 million of trade accounts payable and
accrued expenses, $6.4 million of current maturities of long-term debt, $8.6
million in a note payable to a shareholder, and $134.4 million outstanding under
floor plan financing. The aggregate maximum borrowing limits under working
capital lines of credit with the Company's primary lender is approximately $8.0
million. The Company's floor plan agreements with various finance providers
limit the aggregate amount of borrowings based on the number of new and used
trucks and the book value of construction equipment inventory.
On October 4, 1999, the Company, acquired the assets of Southwest
Peterbilt, Inc., Southwest Truck Center, Inc., and New Mexico Peterbilt, Inc.
(Southwest) a Peterbilt truck dealer. The total consideration paid by the
Company to Southwest was approximately $23.9 million which consisted of 355,556
shares of common stock, $.01 par value, of the Company and cash of approximately
$18.3 million, of which $6.8 million was drawn under Rush's credit agreements
with General Motors Acceptance Corporation and PACCAR, Inc., and $11.5 million
was derived from the Company's internal funds. An additional $4.0 million in
cash may be paid by the Company to Southwest based upon the achievement of
certain performance based objectives.
In September 1999 the Company entered into an agreement with Norm
Pressley Truck Center, Inc. (Pressley) to purchase the assets of three Peterbilt
dealerships in the southwestern United States. The Company anticipates the
purchase price for Pressley will be approximately $2.5 million for the net book
value of acquired assets plus $2.9 million in goodwill. The Company anticipates
closing this transaction in December 1999, at which time the Company will pay
cash of approximately $5.8 million to Pressley. An additional $700,000 may be
paid based on achievement of a performance based objective.
14
<PAGE> 15
For the first nine months of 1999, operating activities resulted in net
cash used in operations of approximately $15.4 million. Net income of $11.4
million, an increase in other assets of $0.2 million, an increase in accounts
payable of $1.6 million, coupled with provisions for depreciation, amortization
and deferred taxes totaling $7.6 million was more than offset by an increase in
accounts receivable of $5.7 million, a decrease in accrued expenses of $4.0
million, and an increase in inventories of $26.5 million.
During the first nine months of 1999, the Company used $35.5 million in
investing activities, including purchases of property and equipment of $30.4
million, cash used in a business acquisition of $4.1 million and an increase in
other assets of $2.1 million, offset by proceeds from the sale of property and
equipment of $1.1 million.
Net cash generated from financing activities in the first nine months
of 1999 amounted to $58.3 million. Proceeds from additional floor plan financing
and increased notes payable of $38.2 million and $27.9 million, respectively,
more than offset principal payments on notes payable of $7.8 million.
Substantially all of the Company's truck purchases from PACCAR are made
on terms requiring payment within 15 days or less from the date of shipment from
the factory. The Company finances all, or substantially all, of the purchase
price of its new truck inventory, and 75% of the loan value of its used truck
inventory, under a floor plan arrangement with GMAC under which GMAC pays PACCAR
directly with respect to new trucks. The Company makes monthly interest payments
on the amount financed but is not required to commence loan principal repayments
to GMAC prior to the sale of new vehicles for a period of 12 months and for used
vehicles for a period of three months. At September 30, 1999, the Company had
approximately $78.2 million outstanding under its floor plan financing
arrangement with GMAC. GMAC permits the Company to earn, for up to 50% of the
amount borrowed under its floor plan financing arrangement with GMAC, interest
at the prime rate less one-half percent on overnight funds deposited by the
Company with GMAC.
The Company finances all, or substantially all, of the purchase price
of its new equipment inventory under its floor plan facilities with John Deere
and Associates Commercial Corp. The agreement with John Deere provides for an
immediate 3% discount if the equipment is paid for within 30 days from the date
of purchase, or interest free financing for five months, after which time the
amount financed is required to be paid in full. When the equipment is sold prior
to the expiration of the five-month period, the Company is required to repay the
principal within approximately 15 days of the date of the sale. Should the
equipment financed by John Deere not be sold within the five month period, it is
transferred to the Associates Commercial Corp. floor plan arrangement. The
Company makes principal payments to Associates Commercial Corp., for sold
inventory, and interest payments for all inventory, on the 15th day of each
month. Used and rental equipment, to a maximum of book value, is financed under
a floor plan arrangement with Associates Commercial Corp. The Company makes
monthly interest payments on the amount financed and is required to commence
loan principal repayments on rental equipment as book value reduces. Principal
payments, for sold inventory, on used equipment are made the 15th day of each
month following the sale. The loans are collateralized by a lien on the
equipment. The Company's floor plan agreements limit the aggregate amount of
borrowings based on the book value of new and used equipment units. As of
September 30, 1999, the Company's floor plan arrangement with Associates
Commercial Corp. permits the financing of up to $25 million in construction
equipment. At September 30, 1999, the Company had $39.3 million and $16.9
million, outstanding under its floor plan financing arrangements with John Deere
and Associates Commercial Corp., respectively.
Backlogs
The Company enters firm orders into its backlog at the time the order
is received. Currently, customer orders are being filled in approximately six to
nine months and customers have historically placed orders expecting delivery
within three to six months. However, certain customers, including fleets and
governments, typically place orders up to one year in advance of their desired
delivery date. The Company in the past has typically allowed customers to cancel
orders at any time prior to delivery, and the Company's level of cancellations
is affected by general economic conditions, economic recessions and customer
business cycles. As a percentage of orders, cancellations historically have
ranged from 5% to 12% of annual order volume. The Company's backlogs as of
September 30, 1999, and 1998, were approximately $185 million
15
<PAGE> 16
and $185 million, respectively. Backlogs increased principally due to the above
noted longer lead times for truck deliveries and a strong demand for trucks.
Seasonality
The Company's heavy-duty truck business is moderately seasonal.
Seasonal effects on new truck sales related to the seasonal purchasing patterns
of any single customer type are mitigated by the Company's diverse customer
base, which includes small and large fleets, governments, corporations and owner
operators. However, truck, parts and service operations historically have
experienced higher volumes of sales in the second and third quarters. The
Company has historically received benefits from volume purchases and meeting
vendor sales targets in the form of cash rebates, which are typically recognized
when received. Approximately 40% of such rebates are typically received in the
fourth quarter, resulting in a seasonal increase in gross profit.
Seasonal effects in the construction equipment business are primarily
driven by the weather. Seasonal effects on construction equipment sales related
to the seasonal purchasing patterns of any single customer type are mitigated by
the Company's diverse customer base that includes contractors, for both
residential and commercial construction, utility companies, federal, state and
local government agencies, and various petrochemical, industrial and material
supply type businesses that require construction equipment in their daily
operations.
Cyclicality
The Company's business, as well as the entire retail heavy-duty truck
and construction equipment industries, are dependent on a number of factors
relating to general economic conditions, including fuel prices, interest rate
fluctuations, economic recessions and customer business cycles. In addition,
unit sales of new trucks and construction equipment have historically been
subject to substantial cyclical variation based on such general economic
conditions. Although the Company believes that its geographic expansion and
diversification into truck and construction equipment related services,
including financial services, leasing, rentals and service and parts, will
reduce the overall impact to the Company resulting from general economic
conditions affecting heavy-duty truck sales, the Company's operations may be
materially and adversely affected by any continuation or renewal of general
downward economic pressures or adverse cyclical trends.
Effects of Inflation
The Company believes that the relatively moderate inflation over the
last few years has not had a significant impact on the Company's revenue or
profitability. The Company does not expect inflation to have any near-term
material effect on the sales of its products, although there can be no assurance
that such an effect will not occur in the future.
Year 2000
The Year 2000 disclosure below constitutes a "Year 2000 Readiness Disclosure" as
defined in The Year 2000 Information and Readiness Disclosure Act (the "Act"),
which was signed into law on October 19, 1998. The Act provides added protection
from liability for certain public and private statements concerning a company's
Year 2000 readiness.
The year 2000 problem refers to the limitations of the programming code in
certain existing software programs to recognize date sensitive information for
the year 2000 and beyond. Unless modified prior to the year 2000, such systems
may not properly recognize such information and could generate erroneous data or
cause a system to fail to operate properly. The efficient operation of the
Company's business is dependent on the proper functioning of its computer
software programs, network and operating systems (collectively, "Programs and
Systems"). These Programs and Systems are used in several key areas of the
Company's business, including inventory management, information management
services and financial reporting, as well as in various administrative
functions.
16
<PAGE> 17
The Company engaged an outside consultant to assist it in performing an
inventory of its Programs and Systems to identify potential year 2000 compliance
problems, as well as manual processes, external interfaces with suppliers,
customers and vendors, and services supplied by vendors to coordinate year 2000
compliance and conversion. This inventory was completed during the first quarter
of 1999 and evaluated the Programs and Systems, the Company's other devices
which have imbedded computer processors or microchips and telecommunication,
HVAC and security systems. Based on the Company's Programs and Systems inventory
and information supplied by the Company's vendors and suppliers, the Company
believes that its Programs and Systems are currently year 2000 compliant.
The primary operating systems of the Company are Karmak and PFW. The Company
believes, based upon representations made by the vendors of Karmak and PFW, that
both operating systems are currently year 2000 compliant.
The Company believes that the year 2000 problem will not pose a significant
operational problem for the Company. However, because most computer systems are,
by their very nature, interdependent, it is possible that non-compliant third
party computers may not interface properly with the Company's computer systems.
The Company could be adversely affected by the year 2000 problem if it or
unrelated parties fail to successfully address this issue.
In the event the Company's plan for the year 2000 problem is inadequate, the
Company may need to devote more resources to the process and additional costs
may be incurred, which could have a material adverse effect on the Company's
financial condition and results of operations. Problems encountered by the
Company's vendors, customers and other third parties also may have a material
adverse effect on the Company's financial condition and results of operations.
In the event the Company determines following the year 2000 date change that its
Programs and Systems are not year 2000 compliant, the Company will likely
experience considerable delays in processing customer orders and invoices,
compiling information required for financial reporting and performing various
administrative functions. In the event of such occurrence to either the
Company's network or its primary operating systems, Karmak and PFW, the
Company's contingency plans call for it to obtain, either from its current or
other vendors, as soon as is feasible, hardware and/or software that is 2000
compliant. Until such hardware and/or software can be obtained, the Company will
plan to use non-computer systems and manual processes for its business,
including information management services and financial reporting, as well as
its various administrative functions. Non-critical hardware or software will be
replaced, consistent with the Company's current policy, on an as-needed basis.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk represents the risk of loss that may impact the financial
position, results of operations, or cash flows of the Company due to adverse
changes in financial market prices, including interest rate risk, and other
relevant market rate or price risks.
The Company is exposed to some market risk through interest rates,
related to its floor plan borrowing arrangements and discount rates related to
finance sales. Floor plan borrowings are based on the Prime Rate of interest and
are used to meet working capital needs. As of September 30, 1999, the Company
had floor plan borrowings of approximately $134,420,000. Assuming an increase in
the Prime Rate of interest of 100 basis points, future cash flows would be
negatively affected by $1,3442,000. The interest rate variability on all other
debt would not have a material adverse effect on the Company's financial
statements. The Company provides all customer financing opportunities to various
finance providers. The Company receives all finance charges, in excess of a
negotiated discount rate, from the finance providers within 30 days. The
negotiated discount rate is variable, thus subject to interest rate
fluctuations. This interest rate risk is mitigated by the Company's ability to
pass discount rate increases to customers through higher financing rates.
17
<PAGE> 18
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Not Applicable
Item 2. Changes in Securities
(a) Not Applicable
(b) Not Applicable
(c) On October 4, 1999, the Company completed the
acquisition of substantially all of the assets of
Southwest Peterbilt, Inc. and its affiliates, Southwest
Truck Center, Inc. and New Mexico Peterbilt, Inc. (the
"Acquisition"). Part of the consideration paid by the
Company in the Acquisition consisted of 355,556 shares
(the "Shares") of common stock, $.01 par value, of the
Company. The Shares issued pursuant to the Acquisition
were not registered under the Securities Act of 1933, as
amended (the "Securities Act"), pursuant to Section 4(2)
of the Securities Act and Regulation D promulgated
thereunder. The Company relied on certain
representations and warranties of the former
shareholders of the acquired companies (the "Former
Shareholders"), including, among other things, each of
such Former Shareholders' ability to evaluate the merits
and risks of an investment in the Shares, each of such
Former Shareholders' status as an "accredited investor"
(as that term is defined in Rule 501 (a) of Regulation
D) and that the Shares were acquired solely for each of
such Former Shareholders' own account for investment and
not with a view to distribution.
(d) Not Applicable
Item 3. Defaults upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable
Item 5. Other Information
Not Applicable
18
<PAGE> 19
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
Exhibit
Number Description
------- -----------
2.1 Asset Purchase Agreement dated September 22, 1999
by and among Rush Truck Centers of Arizona, Inc.,
Southwest Peterbilt, Inc., Southwest Truck
Center, Inc., and Edward Donahue, Sr.
(Incorporated herein by reference to Exhibit 2.1
of the Company's current report on Form 8-K filed
on October 19, 1999)
2.2 Asset Purchase Agreement dated September 22, 1999 by
and among Rush Truck Centers of New Mexico, Inc.,
New Mexico Peterbilt, Inc. and Edward Donahue, Sr.
(Incorporated herein by reference to Exhibit 2.2 of
the Company's current report on Form 8-K filed on
October 19, 1999)
10.1 Registration Rights Agreement dated October 1, 1999
by and among Rush Enterprises, Inc., Southwest
Peterbilt, Inc., Southwest Truck Center, Inc. and
New Mexico Peterbilt, Inc. (Incorporated herein by
reference to Exhibit 10.1 of the Company's current
report on Form 8-K filed on October 19, 1999)
27.1* Financial data schedule
* Filed herewith
b) Reports on Form 8-K
a) Form 8-K dated October 19, 1999, describing the acquisition
of assets from Southwest Peterbilt, Inc. and its Affiliates,
Southwest Truck Center, Inc., and New Mexico Peterbilt, Inc.
19
<PAGE> 20
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
RUSH ENTERPRISES, INC.
Date: November 13, 1999 By: /S/ W. MARVIN RUSH
--------------------------------
Name: W. Marvin Rush
Title: Chairman and Chief Executive
Officer
(Principal Executive Officer)
Date: November 13, 1999 By: /S/ Martin A. Naegelin, Jr.
--------------------------------
Name: Martin A. Naegelin, Jr.
Title: Vice President and Chief
Financial Officer
(Principal Financial and
Accounting Officer)
20
<PAGE> 21
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
27.1 Financial Data Schedule
</TABLE>
21
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF RUSH ENTERPRISES, INC FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH 10-Q.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 29,917
<SECURITIES> 0
<RECEIVABLES> 25,154
<ALLOWANCES> 0
<INVENTORY> 144,299
<CURRENT-ASSETS> 199,758
<PP&E> 94,099
<DEPRECIATION> (15,035)
<TOTAL-ASSETS> 296,872
<CURRENT-LIABILITIES> 174,067
<BONDS> 54,970
0
0
<COMMON> 66
<OTHER-SE> 64,193
<TOTAL-LIABILITY-AND-EQUITY> 296,872
<SALES> 582,099
<TOTAL-REVENUES> 582,099
<CGS> 485,066
<TOTAL-COSTS> 557,772
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,343
<INCOME-PRETAX> 18,984
<INCOME-TAX> 7,594
<INCOME-CONTINUING> 11,390
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,390
<EPS-BASIC> 1.71
<EPS-DILUTED> 1.68
</TABLE>
