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Rush Enterprises Inc  (NASDAQ:RUSHB)
Q1 2019 Earnings Call
April 25, 2019, 10:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, ladies and gentlemen, and welcome to the Rush Enterprises First Quarter 2019 Earnings Result. (Operator Instructions) As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Chairman, CEO and President of Rush Enterprises, Mr. Rusty Rush. You may begin, sir.

W.M. Rusty Rush -- Chairman of the Board, President and Chief Executive Officer

Good morning, everyone, and welcome to our First Quarter 2019 Earnings Release Conference Call. On the call today are Steve Keller, Chief Financial Officer; Derrek Weaver, Executive Vice President; Jay Hazelwood, Vice President and Controller; Michael Goldstone, Vice President, General Counsel and Corporate Secretary; and Steve Taylor, Vice President Medium-Duty Trucks. I would like now to turn it over to Steve Keller for some forward-looking statements. Steve?

Steven L. Keller -- Chief Financial Officer and Treasurer

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, 2018, and in our other filings with the Securities and Exchange Commission.

W.M. Rusty Rush -- Chairman of the Board, President and Chief Executive Officer

As stated in our news release, we achieved quarterly revenues of $1.3 billion and net income of $37 million, or $0.98 per diluted share. We're extremely proud of our strong financial performance this quarter, which was driven by our focus on our strategic initiatives and positively impacted by the strengthening economy and robust industry activity. We are also pleased to declare another quarterly cash dividend of $0.12 per common share.

In the aftermarket, our parts, service and body shop revenues were $438 million, up 9.5% from the first quarter of 2018. Our aftermarket gross profit grew at an even faster pace than our revenue, resulting in aftermarket growth profit margins of 37.7% in the first quarter of 2019, compared to 36.4% in the same quarter of 2018. Our absorption ratio for the first quarter was 121.5%. Our aftermarket growth was primarily attributable to the successful execution of our strategic initiatives, particularly expanded All-Makes Parts offerings and technologies, increase in hours of operations, new service offerings and additional technicians in our network.

There was healthy activity from most locational customers, but the energy sector activity was down approximately 30% year-over-year. Given the decline in the energy section -- sector, I'm very pleased with our overall first quarter aftermarket growth. We expect industrywide aftermarket activity to remain strong and believe that aftermarket activity in the energy sector will improve modestly throughout the remainder of the year. With our continued efforts to drive (inaudible) efficiencies and reduce dwell time through our initiatives, we believe our overall aftermarket growth will be on pace with our first quarter results.

Turning to truck sales. We sold 3,558 new Class 8 trucks, up 7% year-over-year and accounting for 5.5% of the total U.S. Class 8 market. Our solid truck sales performance was a result of a strong economy and widespread activity throughout the country. ACT Research currently forecast U.S. Class 8 retail sales to be 264,000 units in 2019. Our backlog has decreased from late 2018, but it remains strong, and we are confident that our truck sales in the second and third quarter will be on pace with the first quarter. We continue to closely watch several market factors, which may impact the market in the fourth quarter and beyond.

In medium-duty, our Class 4-7 new truck sales reached 2,614 units and accounted for 4.2% of the U.S. market. We had another strong quarter of medium-duty truck sales due to our abilities to provide work-ready trucks to customers nationwide. ACT Research forecast U.S. Class 4-7 retail sales to be 262,300 units this year, up 1.6% from 2018. We expect our Class 4-7 results will accelerate throughout 2019, which will help to partially offset any downturn in the Class 8 market later in the year. Our used truck unit sales were essentially flat year-over-year, but our revenue increased 3%. Used truck values remain stable, but may face price pressure later this year. We believe our used truck inventory and pricing can be effectively -- can effectively support market demand. In the area of network growth, the company subsidiary completed the purchase of 50% of the equity in Rush Truck Centers of Canada Limited, which now operates 14 dealerships in Ontario, Canada. We're excited about this strategic expansion of our network and the opportunity to support customers operating in Canada.

As in past years, employee benefits and payroll taxes contributed to increased expenses in the first quarter. Even with these normal seasonal increases, our balance sheet is strong, and we have been able to invest in our future while returning capital to our shareholders. I would like to thank our employees for their commitment to our customers and our long-term goals. It is their hard work and dedication that allows us to announce these positive financial results.

With that, I'll take your questions.

Questions and Answers:

Operator

Thank you. (Operator Instructions) And our first question comes from Brad Delco with Stephens. You may proceed.

Brad Delco -- Stephens -- Analyst

Hey Rusty, Gentlemen, good morning.

W.M. Rusty Rush -- Chairman of the Board, President and Chief Executive Officer

Good morning, Brad.

Brad Delco -- Stephens -- Analyst

Rusty, I want to ask you about the parts and service gross margins. I think they were 37.7%. If I recall correctly, you guys were sort of talking to us about that being sort of in the 35% to 37% range because of mix with some Navistar. But we have seen that number continue to trend higher. Do you have any updated thoughts on where that number could or should go?

W.M. Rusty Rush -- Chairman of the Board, President and Chief Executive Officer

Well, we expect to continue to trend higher. Obviously, if I look back in history, a lot has to do with mix spread. I mean, sometimes you are breaking parts and service apart. I know we don't report it that way, but we've always reported it as a mixed number. But I would tell you with the initiatives that we still have going, we believe it can sell trend upward, especially from the service side, obviously, when you get more service mix. And our service -- you got to remember, our service initiatives and the growth around our service area are much more -- very much younger than the goals we have had on the parts side.

We've been working hard on the parts side for over 3 years -- 3 or 4 years. At the same time, we've been ruing on the service side for 1.5 years or so to 2 years. But we do believe that we have room to grow on both sides of the house from a margin perspective. You got to remember one of the things from the Navistar side that hurt it historically how the margin piece was, they used to be dominated by their own proprietary engine, right? But because of the mix of engine on the Cummins side, that has a little bit more competitive, say, pricing than the proprietary engines. It takes some of your proprietary content out. But we've been able to offset that with some of the strategic initiatives, which I don't really like to get into all of them because I consider some of them trade secrets.

But we've got to going on, but you can see in the numbers that it's trending upwards. Is there a cap on that? Of course, there is, but unless we grew service at a much higher rate than we grew parts margin -- part sales, just given the margins in service. But I would say we've still got some runway, another point or so. I would tell you given that if we keep this more to historical mix, I would say we probably can get -- the mix didn't move a lot. I'd say there's probably another point or so in there.

Brad Delco -- Stephens -- Analyst

Okay, but it.

W.M. Rusty Rush -- Chairman of the Board, President and Chief Executive Officer

That's over time. We don't expect it to happen next quarter because we have -- you've got to keep these initiatives that we've been rolling out consistently over the last couple years. I'll tell you not all of them are running at full speed at the moment, right? We are gaining traction all the time. So it's sort of swagging at it here because for the proof of the pudding is beginning to eat right as we go forward with this. But I do believe there is still some runway that I just hate to -- it's hard for me to pick an exact number given those variables.

Brad Delco -- Stephens -- Analyst

Got it. But nothing within your view today that says that number should -- the margin should see pressure throughout the rest of 2019?

W.M. Rusty Rush -- Chairman of the Board, President and Chief Executive Officer

No. I mean, I can see when you get into it. We were hit -- the country was hit with recession sometime. I could see some slight deterioration, but I don't believe -- it can be hard for me to see a lot, OK? And I do believe that you can go back a couple years, we were down to 35% range, right?

Brad Delco -- Stephens -- Analyst

Yes.

W.M. Rusty Rush -- Chairman of the Board, President and Chief Executive Officer

So we've made some pretty good progress here with that. It is not all at the point of sale. There is a lot of things that go into it, probably back -- it's from the acquisition side also, right? It's not necessarily from how you purchase also, how you purchase too. It's not just how you sell. But it's in all sides and there's a lot of other initiatives as I said that we've got wrapped around for some of these areas -- both of these areas, and I'm not really going to get into all the details of those, but you'll see it in the margin.

Brad Delco -- Stephens -- Analyst

And then maybe kind of a longer-term question. Some of the, I guess, act has Class 8 sales down a lot in 2020, let's call it 25% to 30%. What do you think your parts and service business could do in an environment where Class 8 sales are down 30%?

W.M. Rusty Rush -- Chairman of the Board, President and Chief Executive Officer

Right. Consider -- I think we can continue to grow. I really do. I would hope we can continue to grow at this rate. Obviously, the hill -- the higher up you go, the harder it is to climb because your comps gets tougher and tougher. But we still believe we've got -- and that's one of things I was really proud about from the quarter, and I mentioned that was -- let's go back a few years when oil and gas had rough 30%, you would have been seeing almost double-digit growth, especially on the margin side that we showed in the first quarter.

So even with truck sales down, they make up less of a piece of what we do than what they used to. There's an upgrading involved in trucks, but they make up even less than what they historically did with us just because of our growth of taking share in the real parts market, not just tied to your vehicles. So I personally believe, we still stand at high single digits and positively low double digits even with the market going backwards, but never -- when you stop selling, that means your fleet starts aging too, right? So the counterbalance to it all is, your fleet -- if you sell those units, you're a little bit below replacement, then the fleet starts to age again, which means requires more parts and service.

So our sweet spot is usually from trucks, say, year 4 through year -- year 3, 4 -- year 4 through year 7 is our sweet spot. So there's a little bit of an upside to when you really don't like it when you sell those trucks, the average age increases and they could -- and that's when they -- when the age goes out a little bit, that's when you hit peak parts consumption.

Brad Delco -- Stephens -- Analyst

Okay, great. Thanks for the time I'll get back in queue. You bet.

W.M. Rusty Rush -- Chairman of the Board, President and Chief Executive Officer

Thank you Brad.

Operator

And our next question comes from Jamie Cook with Credit Suisse. You may proceed.

Jamie Cook -- Credit Suisse -- Analyst

Hi good morning nice quarter. I guess, two questions, Rusty. One, if we look at what you're saying for the sales cadence for Class 8 in the second and third quarter, it seems like your expectations at least have come down a little from what you were saying last quarter with regards to the first half of 2019.

So if you could put some color around that? And then my second question is, I thought the comments you made on energy were interesting, being down 30%, in particular, the profitability that you put up. But with oil prices higher, are you seeing any change? And how do we think about the trajectory of things for covering potentially?

W.M. Rusty Rush -- Chairman of the Board, President and Chief Executive Officer

Yes. I'm going to take in -- well, I was taking in the order you asked. You're right, I did last night thought we were going to deliver a few more units in Q1 and we did. I think it as much timing as anything. I would hope, we would at least deliver as much in Q1 as we in Q2. I'm not going to -- I'm sorry, I may have missed a little. I expected to deliver a few 100 more units to be honest with you. I did not expect to deliver what we did in Q4, OK? Q4 was an extraordinary quarter, a record quarter.

But we had some big fleet business in there, right? The mix was a little different here in Q1, and I think that's what you saw the margins, but we sold a lot of stuff surprising. In the first quarter, we had a lot of inventory we sold. At the same time, not smaller deals and that's typical with this piece of the cycle and over the road stuff is you are selling smaller deals if you get further into it, right? And that's somewhat typical from what I have experienced over the years. So I feel comfortable. I don't want to overstate it, like you said. I might hit a little bit too hard.

Maybe -- you maybe thought we're going to do a little bit more than what we did. But backlogs are coming down. Our backlog is down. But so is the margin -- so is everybody. So are OEMs, right? You can't have 50,000 units in 3 months of order intake when you're building at the rates that we're building at currently, right? And we have a total of 50,000 in 3 months. You're going to chew up on some backlogs out of the OEMs just like ourselves. And I always -- look, I've been doing this a long time. I don't count anything really up past 120 days. So let's -- you'll never review -- that's why I'm always a little bit fuzzy and something to see like Q4 right now.

But our backlog is saying all that. It is still strong and as I said, my medium-duty backlog is biggest it's ever been. Let's just say that. So -- and I think that's going to be one of the keys. I don't look at base a little bit. I will say just one thing, you got to understand about the organization. Remember, we're not just a Class 8 dealer, OK? Now I realized the -- they are half the cost. They cost half as much and they make a little less margin. But there's still a big piece of what we do.

We're not just the largest we ruled natural or large. With larger sizes and we have quite a few Ford deals too. So you've got to keep that in mind too because that market should remain stable for the next few years. I think that may be go unseen. That's not the same, but what does it help. When you look at all the franchises we've got out here, we've got more than anybody else across the board on those and that will help us is the Class 8 market is going to be more cyclical as the dynamics of distribution change, I think everybody understands last mile or another stuff happens.

I think you -- that's going to be one of the things that's going to help us out over the next couple years. We know -- you've got to believe that Class 8 is going to be out 25% to 30% next year. But we don't believe that's going to be the case on the medium side, and given our focus, what we've done over the last 16 years in the growth and I think that's going to help. Back to oil and gas -- over to oil and gas. It's -- I was a little off last quarter when I was talking to you all on the 1st of Feb, where I said, well, let's hang in there. While I was sitting in this chair, it was starting to drop off, OK?

It had dropped off. I just didn't recognize at that time, I started looking at numbers a couple weeks and then I ago, wow. We're seeing a little softness on the parts and service side. We have very little truck sales involved. I think when you look at the big oil field supplier services companies, their inventory builds are pretty heavy, OK? They had lots of inventory, OK? And I think now, we're starting to hopefully be chewing away at that inventory. You had time line issues of getting oil and gas out, getting all out of the Permian and stuff like that.

There's pipelines coming on. You see where oil prices are. So you've got to feel pretty good that we've troughed. What we're seeing, we believe, from a parts and service perspective and from a sales perspective, I believe is pretty trough right now. So that's one of the heartening things to me is putting up numbers like this when you believe you're troughing and probably should be -- and I'm just reading what people say where oil should fall in play, where oil prices should remain for the next year or so. And as some of the inventory gets build up, it's not just trucks, it's all kinds of equipment that we build and things we do and stuff we service throughout this country, not just in the Permian or the Eagle Ford.

We do a lot of mobile stuff and that's where we saw some softening. But I do believe it will hit back up. The one thing that we have to be cognizant of is the efficiencies that are out there. It doesn't take as many rigs to drill as many wells. But we've got -- got pretty good at that stuff. At the same time, given that I do believe we're at trough, but I do believe as I said, we can see some moderate increases from a parts and service perspective. And we through the year and in the next year, I would see the CapEx equipment purchasing to whether it's cranes or different makeups or trailers and things like that we're pretty proficient at. I would expect that to pick back up those inventories get depleted now.

Jamie Cook -- Credit Suisse -- Analyst

Okay. Thank you. Get back in queue.

Operator

Our next question comes from Neil Frohnapple with Buckingham Research.

Neil Frohnapple -- Buckingham Research -- Analyst

Hey, good morning, guys and Congrats on a great quarter. Rusty, just wanted to get your thoughts more on the heavy truck cycle from here. I mean, you talked about the potential pressure on new stock values later in 2019. But are you starting to actually see any initial signs of weakness like -- and sleepers? And I'm curious if you've experienced any increases in Class 8 order cancellations? Or are those still pretty needed for you guys?

W.M. Rusty Rush -- Chairman of the Board, President and Chief Executive Officer

I think cancellations are pretty new, but intake is needed too, right? You can't have these 15,000 across the whole network, across whole country and not feeling to sell. I haven't seen a lot of cancellations, but I have seen a couple people that were not adding, like maybe they thought they were going to add an idea 120 days ago, they might talk about it. And I think, look, freight rate, because we all know freight rates are down and was one of the biggest drivers. Our freight rates are flat, let's say. I read something the other day, one shipper reports it to be up maybe 1% across the board. Some people are just hoping to keep flat, which is contrasting it less and things like that.

So that's -- I mean -- but that was a record year in 2018. Let's don't lose sight of that. Our customers had record rate increases in 2018, but then -- and a wild little story. I don't think you can continue that way. But everybody knows that's not how it works. So I'm watching that closely. Used truck values will be -- less shoot. I believe has to drop at sometime. I think right now, I know from our perspective, I don't believe -- I think last year would be peak margins on used trucks. I don't expect -- I don't know whether we will be able to maintain -- we have record margins last year on either split. I think that we can maintain our turns and our volumes go up, we might have to give up a little bit of margin to do that. So I -- but we'll be watching closely.

I mean, somethings I read, volume was pretty good in March, but some stuff brought a lot less money in March, and we're in the middle of April. I have talked to my -- I was talking to my used truck manager -- Vice President the other day, and he is pretty much (inaudible) our volumes are holding up, picking back up. Once again through January and February, they're always stuff. Our volumes pick back up in March. They're projected to be up by the time we get to the end of April.

So, which is normal seasonal type stuff. But I will be watching close. I've just got to believe with values being so strong last year, but there is going to be some -- there's going to be used truck yet somewhere along the line or has to be. But so far, it's maintaining. And we'll be watching it closely and make sure our inventory price right in their, right. So I mean, I'm not giving any definitive answer.

Maybe I told you it was going to go down last year in the third, fourth quarter. (inaudible) volumes in winters, I was wrong. Like I told you in last call, I was glad to be wrong and I'm glad it's still stretching out, but I'm not foolish enough and I have done this enough times to know there will be an adjustment out there. I just -- now I guess, I'm not as good as I used to be when it comes to projecting exactly what it is, but I do know it will be there and I got to believe it will be before year-end sometimes and that's why I'm little -- as I said, I don't look past 120 days in my mind.

We have OEMs -- well, I'm billed for the year, I'm sold out. They can talk all they want, but until they get they can be all, I can say all that they want, but don't you give-I don't look past 120 days. So because of those variables, because of used truck variables, because of the rate variables, I mean, (inaudible) the spot market for share bid off. So anyway, I'm not giving the exact answer. But I got to believe sometime later this year we will have some used truck devaluation outside of just a normal calendar devaluation. There will be some type of devaluation in used, but I would love to be wrong, but we will be watching closely.

Neil Frohnapple -- Buckingham Research -- Analyst

Now that's helpful and certainly your new truck gross margin of 8.3% probably one of the highest. If used was...

W.M. Rusty Rush -- Chairman of the Board, President and Chief Executive Officer

Yes. That was a record. I don't look for that to hold. That was -- I mean, look, that was a record all time. You can go look. I mean, Q1, it was a mix. We had a lot of stock, a lot of constructions. There was a lot of small stuff in there and they made that up, not a lot when compared to where we had a lot of fleet business in Q4. So sometimes it's about the mix, right?

Neil Frohnapple -- Buckingham Research -- Analyst

Right. And then just I guess a question for Steven. Are you able to provide the gross margin breakdown by truck in the quarter to get to the 8.3%?

Steven L. Keller -- Chief Financial Officer and Treasurer

Yes. Heavy was 8.9%, medium was 5.9%, light was 5.2% and used was 10.6%.

W.M. Rusty Rush -- Chairman of the Board, President and Chief Executive Officer

As I said, those were way out ahead and it was a mix of a bunch of small stuff, which is what you see at this time of the cycle from sales, so a Class 8 side.

Operator

(Operator Instructions) And our next question comes from Andrew Obin with Bank of America. You may proceed.

Andrew Obin -- Bank of America -- Analyst

Good morning.

W.M. Rusty Rush -- Chairman of the Board, President and Chief Executive Officer

Good morning.

Andrew Obin -- Bank of America -- Analyst

I have a question on S, COGS and SG&A, actually, SG&A specifically. Can you just talk about puts and takes for SG&A between, let's say, 2015 and this year 2020? What are the big puts and takes? How should we think about it? I guess, what permanent components -- I know that SG&A is sort of variable, but what structural things have you done to SG&A both positive and negative?

W.M. Rusty Rush -- Chairman of the Board, President and Chief Executive Officer

Yeah well, let's strip it apart. Yes, it's going to be tied pretty much directly to -- S is when they -- this could be tied in truck sales. That S piece is going to be decided -- that variable piece is going to go up and down, there's going to be a certain percentage of gross profits on truck sales. We strip it out. We meant -- as long as we keep that in a range it typically is and we typically do, there's going to be a component of percentage of gross profit on truck sales.

That's what the S makes up. So it's just going to fluctuate with that. So you can watch what the truck sales are and you'd be able to just see if S is going up or S is going down. G&A, well, G&A, obviously, I don't -- going back to 2015, Andrew, might be a little bit stress for an old man like me, but I know we've invested a bunch. Our G&A by quarter, you know, as I said earlier, the first quarter is always the toughest because it's got lots of -- lot of employee benefits, comps, stuff like that, stock, all that good stuff, even the taxes and everything else kicks fully on in Q1.

So that's why you always see sequentially typically that Q1 jumps up. We have been investing a lot. When you -- even if you look at -- if you want to go to same-store because when we've been -- when we were going to independent strategy. So if you strip so much stuff out we rolled out in the last 8 or 10 months and just look at same stores, we're up. The good part is we're driving. The absorption number and then there is an absolute dollar number. The good part is, we're not keeping as much as I'd like right now, but we're continuing to invest.

That's what's been driving (inaudible) quarter number 12. This is the first one slightly under double-digit, but quarter 11 in a row. But I can remember we've been driving that revenue up. I was telling everyone, it doesn't come from 3. I'm not alone in money. I'm not alone in that money or stuff. I'm trying to return into wrenches and sell in parts and deliver the stuff. It takes people. It takes a lot of that to do it. Plus, with technology spend that we believe is helping our people with better information and as we move in, the world continues to evolve, we're on top of it, like rolling out our e-commerce platform.

I mentioned that in the press release, I believe, we rolled that out in March. That didn't come for free. And we're not getting the bang for our buck on that, but we're going to. These are investments and so I -- when you look at G&A, are there adjustments we could make if things went backwards? Of course, there are. But right now, we're going to continue down the path we are -- have been on.

And our G&A is not going -- it will -- it's not going to stay flat year-over-year, which is not. With double-digit growth rate, I cannot keep it flat. You don't get to keep it on. You got to spend some of it to make money. So I don't know if I answered your question. I don't know what you're really looking for.

Andrew Obin -- Bank of America -- Analyst

Yes, I guess, what I'm looking for is, so let's say, you're sort of talking about Class 8 down 30% in 2020, and let's call it bad. I'm just sort of thinking if we're going back to sort of revenue level of, let's call it, close to $5 billion or under $5 billion similar to what we had in 2015. And then 2015 SG&A was, let's call it, $620 million just to round things up. Just how much permanent cost have we added on G&A side versus 2015.

So even a simpler question than that. Should I add $50 million to that? Should I add $100 million to that? Should I add $20 million to that? I mean, just a very simple question like that. That's what I was asking. Sorry, I think it was simpler.

W.M. Rusty Rush -- Chairman of the Board, President and Chief Executive Officer

Yes, well, Andrew, maybe (inaudible) will go back and dig up '15, I'll get you dig '15 numbers up. I don't have them sitting here in front of me. So it's going to be a little difficult for me to jump back to '15. I don't have them...

Andrew Obin -- Bank of America -- Analyst

Just color, just color, just color to...

W.M. Rusty Rush -- Chairman of the Board, President and Chief Executive Officer

Okay? I can go back to '18 and probably take you back to '17, but jumping back to '15 is going to be a little tough on me. But I can do it. But I can't do it right now on this call.

Andrew Obin -- Bank of America -- Analyst

Okay. I will follow up off-line.

W.M. Rusty Rush -- Chairman of the Board, President and Chief Executive Officer

Yes, follow up and we will be happy to go -- I'll be happy to go through it. I mean, there is no question. Remember, we always going to spend some of that money we make and make gross profit. It takes money to make -- you got to spend money in the truck business to get return. But the key part is how much you get to keep, right? My goal is always to keep somewhere around 40% to 50%. Right now we're not keeping that much because our investments are higher.

We're probably keeping more like a 30% range of every gross profit dollar. And our G&A, we're spending about $0.70 to deliver gross profit dollar. My goal is to get it back closer to $0.50. But when you are able to continuing into invest and that's difficult when you're trying to -- you're running as hard as you can, growing especially when you think you've got share gain. We believe we can gain share. This was a 5-year plan we put together to get share. And it was to take our share where we were less than 4% of the parts business. We want 6% plus.

And we're going to get. And we're not going to get it without spending a little bit of money, and I say so we -- I have manged it -- gross profit dollars, and I have to spend some of those gross profit dollars to keep creating gross profit dollars. At the end of the day, you pay me for making absolute dollars, not percentages. And I think you can see in the numbers we're producing on the parts and service side, we're making a lot of money.

Andrew Obin -- Bank of America -- Analyst

Thank you.

W.M. Rusty Rush -- Chairman of the Board, President and Chief Executive Officer

You're welcome.

Operator

Thank you. Ladies and gentlemen, this now concludes our Q&A portion of today's conference. I would now like to turn the call back over to Mr. Rusty Rush for any closing comments.

W.M. Rusty Rush -- Chairman of the Board, President and Chief Executive Officer

Well, I really don't have any closing comments. That was short and sweet. I appreciate everyone listening in, and we look forward to talking to you with the second quarter call in July sometime. Thank you very much.

Operator

Ladies and gentlemen, thank you for attending today's conference. This does conclude our program, you may all disconnect. Everyone, have a great day.

Duration: 31 minutes

Call participants:

W.M. Rusty Rush -- Chairman of the Board, President and Chief Executive Officer

Steven L. Keller -- Chief Financial Officer and Treasurer

Brad Delco -- Stephens -- Analyst

Jamie Cook -- Credit Suisse -- Analyst

Neil Frohnapple -- Buckingham Research -- Analyst

Andrew Obin -- Bank of America -- Analyst

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