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Rush Enterprises Inc (RUSHA -5.67%) (RUSHB -6.31%)
Q3 2020 Conference Call
Oct. 22, 2020, 10:00 a.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Good morning, ladies and gentlemen, and welcome to Rush Enterprises Incorporated Results Third Quarter 2020 Earnings Results Call. [Operator Instructions] I would now like to turn the conference over to your host today, Mr. Rusty Rush, Chairman, CEO and President.
Sir, the floor is yours.
W.M. Rusty Rush -- Chairman of the Board, Chief Executive Office and President
Good morning, and welcome to our third quarter 2020 earnings release conference call. On the call today are Mike McRoberts, Chief Operating Officer; Steve Keller, Chief Financial Officer; Derrek Weaver, Executive Vice President; Jay Hazelwood, Vice President and Controller and Michael Goldstone, Vice President, General Counsel and Corporate Secretary.
Now, Steve will say a few words regarding forward-looking statements.
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 risk 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, 2019 and our other filings with the Securities and Exchange Commission.
W.M. Rusty Rush -- Chairman of the Board, Chief Executive Office and President
As indicated in our news release, we achieved quarterly revenues of $1.18 billion and net income of $34 million or $0.60 per diluted share. We delivered a cash dividend of $0.14 per common share and as previously announced, we declared a three-for-two stock split, earlier in the quarter.
The COVID-19 pandemic along with the previous anticipated industry downturn continue to have a direct result on our financial results in the third quarter. However, when compared with second quarter of 2020, we experienced a notable increase in revenues, primarily from an increase in truck sales and increased profitability due to our previously implemented expense reduction measures. We remain focused on monitoring COVID-19 and its effect on economy and our industry, and we are cautiously optimistic that we are not only rightsized to support our customers but that the economic recovery though gradual will continue.
Turning to our operations. In the aftermarket, our annual parts, service and body shop revenues were $400 million. Our absorption ratio was 119.4%. While our revenues declined year-over-year, they did improve 6% when compared to the second quarter of 2020. This was due to increased aftermarket activity in August and September, especially from refuse, construction and over-the-road customers.
Looking ahead, uncertainties remain about the pandemic and overall strength of the economy. And the energy sector is still much slower than normal and likely will not improve significantly for some time. That said though, we expect some typical seasonal decline through the winter. We believe that the gradual recovery of the aftermarket business will continue.
In truck sales, we sold 2,584 Class 8 new trucks, which accounted for 5% of the total U.S. Class 8 market. Due to the pandemic and an industrywide downturn --slowdown in Class 8 truck sales, our results were down significantly year-over-year as we expected. However, our new Class 8 truck sales did improve 38% when compared to the second quarter of 2020, and our used truck sales increased 16%, compared to the same time period.
Government stimulus payments issued earlier this year, combined with state reopenings have bolstered consumer spending in the third quarter, with strength in freight and spot market rates throughout the country. As a result, we experienced an improvement in quoting and sales activity for new trucks, primarily from over-the-road customers. Further, the availability of new trucks off the production line was limited due to manufacturing shutdowns earlier in the year. This resulted in an increased demand for stock truck and used truck sales and improved used truck values, which is consistent with what the industry experienced.
ACT Research adjusted its Class 8 retail sales forecast to 186,300 units in 2020, a significant increase from earlier estimates. We are encouraged by our third quarter truck sales results, but we expect COVID-19 and uncertainties about our economic recovery to continue to impact Class 8 new truck sales for the foreseeable future. We believe our Class 8 new truck sales in the fourth quarter will be consistent though with our third quarter results and our used commercial vehicles sales will also remain solid.
Our Class 4-7 new truck sales were 2,941 units, accounting for 4.8% of the U.S. market. These results were up 26% over the second quarter, primarily due to increased activity from landscaping, residential construction and other small businesses. ACT Research is forecasting U.S. Class 4-7 retail sales to be 216,100 units in 2020, another significant increase from earlier estimates. Although we expect medium-duty truck sales will continue to be directly impacted by the uncertainties around the pandemic and the economy in general, we believe our Class 4-7 truck sales in the fourth quarter will remain on pace with our third quarter results.
I am truly grateful to our dedicated employees for focusing on what's important, protecting the health and safety of themselves, and those around them while serving our customers and helping our country recover from these challenging times.
With that I'll take your questions.
Questions and Answers:
Operator
[Operator Instructions] We have our first question from the line of Mr. Justin Long from Stephens. Your line is open.
Justin Long -- Stephens, Inc. -- Analyst
Thanks, good morning and congrats on the quarter.
W.M. Rusty Rush -- Chairman of the Board, Chief Executive Office and President
Hey, thanks, Justin.
Justin Long -- Stephens, Inc. -- Analyst
So, maybe to start with G&A, continue to see some pretty positive trends on that front, in the third quarter. How should we be thinking about G&A in the fourth quarter and then looking into next year, assuming that ACT number is right on truck sales, what kind of G&A would we see in that environment?
W.M. Rusty Rush -- Chairman of the Board, Chief Executive Office and President
All right. G&A, one thing I am very proud of, is the reduction in G&A that we've been able to accomplish so far this year. And of course, that's always the question, right? What does it look like going forward? From a Q4 perspective, I'm going to tell you, we're going be relatively flat. We have to eat into some holidays, which you have a few less -- which you have a few less working days, that offset that. So I would tell you probably, relatively flat with Q3.
We are seeing some gradual increases and so the expenses as our parts and service business has picked up. As I've told you, we've got some goals going forward and how much we're going to retain as gross profit continues to grow. We will try to spend less than what we have historically. And I'm very confident that we're going to be able to do that. I just finished a conference with all our folks. And I think everybody has got their heads wrapped around it pretty good as we come out of this, where we've been with what looks like a pretty good run going ahead of us here, we believe, once we get through this pandemic and all things settled down, that from an industry perspective that we're going to do a better job of managing these expenses and that where we've taken them down to as we go forward.
Understanding though, it does take a little extra expense and more gross profit, right? We sell parts, we turn wrenches, we do all those things for a living and that's how we make money. But looking out into next year, oh, I would tell you, our goal is to be somewhere in that 35% -- you know, every gross profit dollar we produce in parts and service is to be somewhere 35%. Of that, we will probably spend, the rest hopefully dropping to the bottom line. But as a basis, we're using -- I would tell you look at Q2, not Q3, because we are already seeing -- we're already starting to increase some stuff, but I still believe we'll be close to flat, maybe slightly up in the fourth quarter. We'll just have to wait and see how it pans out. There won't be any big rise for sure.
So that is the goal. So using -- certainly Q2 is your baseline, not Q3, from an expense perspective, that would be as we grow gross profit off of the Q2 level with the expense from there, back-end gross profit number. We're not talking about trucks here, we're talking about parts and service. So I'm not talking about trucks and while we split, there's S and G&A. We look at it, we manage it separately because S is always a variable component tied to truck sales and G&A is the overall cost of running the business. So, I hope it gives you some flavor on it.
Justin Long -- Stephens, Inc. -- Analyst
That does. Thanks. And with parts and service, it sounds like things really picked up in August and September. Have you seen that strength continue into October and any thoughts on parts and service top-line performance in the fourth quarter versus what you just saw in the third?
W.M. Rusty Rush -- Chairman of the Board, Chief Executive Office and President
Well, yeah, I don't know that we're going to increase a lot. When you look at it -- we look at it as a working days a lot. And the fourth quarter is the shortest working day quarter of the year, right? You've got really three less -- now we work on Saturdays and stuff, but we measure it by how many Mondays and Fridays you got, you've got three less working days in Q4. So I'm going to believe that we will be slightly off because three less working days -- you have 62 days versus 65. So I'm going to believe we'll be slightly off, but I do expect to maintain at least the average per day where we're at. It's always a little bit -- winter time is always -- November, December, January and February are not always my favorite months from a parts and service perspective. Holidays are nice, but they're not exactly good sometimes for our business. So -- but that said, I do believe we'll maintain. Some years we go backwards a little bit, in gross profit per day average, but I don't expect that to happen, but you just have less working days. So slightly down from the gross profit perspective, but not dramatically.
We've picked up, we really -- it was interesting that we went from like April, May, June and July, were all very similar. We dropped, obviously as I told you all last call, March was -- it's a 13-month year, there were two Marchs. But once we dropped into April it stay flat, but we started to see the increase come back in August and parts more dramatically some in service, to be honest. But I think it's sustainable. And I think once we get through the winter time, I think you'll see us start growing it again. Okay. I really believe that.
Justin Long -- Stephens, Inc. -- Analyst
Okay, great. I'll leave it at that. Congrats again on the quarter.
W.M. Rusty Rush -- Chairman of the Board, Chief Executive Office and President
You bet. We're excited about what we're doing.
Operator
We have our next question from the line of Jamie Cook from Credit Suisse. Your line is open.
Jamie Cook -- Credit Suisse -- Analyst
Hi, good morning. Hope you guys are well. Nice quarter. I guess just first question, Rusty, the margins on the truck side were fairly good in the quarter, up from where you were in the second quarter. So can you just talk broadly about trends, how you expect that to progress in trends you're seeing in terms of ordering from the big fleet guys versus more of the vocational markets where potentially people are slightly more concerned about going forward, just there's concerns on like state and muni budgets and stuff like that.
And then I just guess my second question, if you could just decipher more within your parts and service business, the margins were a little lower this quarter relative to where they've been trending. Any view on that or just color on what you're seeing parts versus service with -- in terms of mix within that segment? Thank you.
W.M. Rusty Rush -- Chairman of the Board, Chief Executive Office and President
You bet. Around truck sales, I would tell you that in new truck sales, Class 8 were slightly up. I think used margins were dramatically up, even though they make up a lot less sales, that where -- used margins were almost -- they were in the sixes last quarter and they were 12. And that was indicative, okay.
Jamie Cook -- Credit Suisse -- Analyst
Wow. Okay.
W.M. Rusty Rush -- Chairman of the Board, Chief Executive Office and President
That's what really has -- had some effect on it. We were up slightly, I think five-tenths in new from Q2 – but in Class 8 new. But really used truck margins were up, because you know -- you got to remember the used truck market took the hit right in March, boom, you lose 10% to 12% out of everything, right? So you rightsize your inventory as we always do. If you finish Q2 and then you roll in the Q3 and here comes the market, right? So market picks back up, values go up and fortunately we captured some of it, right? You're marking the market on used all the time, because that's a moving target.
So we got the good side of it this time, where 6% of Q2 was down from our typical 8% to 10% because you had the COVID hit and nobody was buying anything for a while and then when everything picked back up because it’s when inventory started to move, both on the stock inventories on the new side and on the used side. So that helped truck margins right there. From a parts and service perspective – we -- parts more than doubled the growth of service, okay, in the quarter. So, and remember, parts are a lot less margin than service. Parts run, say in the 28% range, just varying, it just bounces.. But service is typically is 65%. So it's sort of a mix issue right there. I would expect that what you saw, I think is going to be trough for combined fee in parts and service margins. I don't -- because I think service is going to start accelerating back up, keep more in line with the parts growth, as we go forward, like I said earlier to Justin. I'm not sure that it will pick up a lot per day here in Q4 but staying where we're at, maybe picking up slightly on a per day basis is better than we usually do in November, December, January and February. It's just the way it works. So, the reason for the overall margins being -- blended margins being down was basically a mix issue, to be honest, with parts growing at a much higher rate than service, in the quarter.
Jamie Cook -- Credit Suisse -- Analyst
Okay. And then just a follow-up on, you talked about why the margins were better on the truck side but how concerned are you about sort of or what you're seeing specifically on vocational trends and just concerns out there with the state and municipal budgets. I'm just trying to understand your viewpoint on that.
W.M. Rusty Rush -- Chairman of the Board, Chief Executive Office and President
Yeah, I guess, I don't tie vocational totally to government. Okay. I look at it in a broader perspective, when you still see -- residential construction is still strong, okay. At least in a lot of areas we're at, I can tell you. I just barely got here for the call between a truck and all the -- so I had to go over 3 different ways this morning to get here. You couldn't believe how many trucks I had to try to get around all in aggregate stuff this morning. But, no, you see we still believe that the vocational side will -- outside of oil and gas, okay. And I understand where commercial building is at. But residential construction in a lot of areas we're at is still pretty strong and we're still -- when it comes to customers that are in that type of construction, housing construction, road construction, stuff like that, we are still seeing -- there's still been a lot of money spent around those areas. Now sustainability, folks, I'm not -- I don't know what I can tell you, how it’s sustainable, I got a 6-month window. I don't -- it's hard for me right now, in this environment, I challenge anyone. I mean everybody puts stuff out there, but to give you a 12 to 18-month outlook, with all the uncertainties we've got right now. But I feel decently blessed. The margins you saw in the quarter, other than used, I don't think that 12 is sustainable, we still be solid, not 6, more in line with our typical 8 to 10. I would look at the truck margins to remain where they are at, to be honest.
Jamie Cook -- Credit Suisse -- Analyst
Okay, great, that's helpful. Thanks again, be well.
W.M. Rusty Rush -- Chairman of the Board, Chief Executive Office and President
Thank you, Jamie. Good to hear from you.
Operator
And we have our next question from Andrew Obin from Bank of America. Your line is open.
Andrew Obin -- Merrill Lynch -- Analyst
Good morning.
W.M. Rusty Rush -- Chairman of the Board, Chief Executive Office and President
Good morning, Mr. Obin.
Andrew Obin -- Merrill Lynch -- Analyst
So a couple of questions. So how should we think about Rush in an upturn, because you do have specific brands, Peterbilt and Navistar are the big ones, I guess, International. And Peterbilt behaves in terms of market share, right. It sort of does not behave like the rest of the market and then you have your own very industry specific exposure relative to the industry. So how should we think about your market share relative to the industry in an upturn over the next, let's say 12 to 24 months? Are there going to be any big differences.
W.M. Rusty Rush -- Chairman of the Board, Chief Executive Office and President
No, I don't believe so. Andrew, I mean, when you look back, I would tell you this. I would hope that our market share from Class 8 troughed in Q3. That, that 5% is the bottom, we have historically been high 5s to low 6s, in that range depending on what the volume is. And I would anticipate that -- I would anticipate that we will -- I don't think Peterbilt's market share is going to fall off. I look back at what they were in 2019, a big year and it was solid, with solid on historical terms.
And Navistar's market share, I believe will continue to grow as they go forward. So I feel pretty good about where my Class 8 OEMs are. And I would look for us to maintain where we historically have been. And probably the biggest headwind for us, to be honest with you, I think we're capturing new customers, but folks, we used to sell, oil and gas trucks. I feel like that we're -- that's one of the reasons I'm so proud of the print, you know and the prints we've been having, is because we've done that without O&G and we couldn't have done that 4, 5 years ago. So the organization has done a very nice job. When you look at our exposure, Oklahoma, Texas, Colorado, New Mexico, lots of oil and gas places, right? And we had to do all this, with huge declines in those areas. And sort of reinvent ourselves around it. And I'll let the results speak for their selves.
Andrew Obin -- Merrill Lynch -- Analyst
I guess I was -- Yeah, what I was referring to, maybe we can take it offline, but I always thought you have more exposure to vocational and so you know at the peak of the cycle when large fleets come in, that's when you sort of lose some market shares just structurally. And particularly Peterbilt would, but that's what I was referring to specifically.
W.M. Rusty Rush -- Chairman of the Board, Chief Executive Office and President
I think if you look -- historically, you could have been right, Andrew, back years ago, but if you look at the last uptick, no disrespect, in ‘18' and ‘19 they grew market share. Okay. And those were big market over-the-road years too. So they have broadened their customer base and from our perspective, Navistar's back in the game. Okay. So we feel very good. I'm not worried about the size of the market that's getting our share, just to answer. I wish we -- I wish I had oil and gas. I would do a whole lot better than what you are seeing, but I don't, but we're picking up more over-the-road business than we historically have.
Andrew Obin -- Merrill Lynch -- Analyst
So I can model you in line with ACT forecast effectively?
W.M. Rusty Rush -- Chairman of the Board, Chief Executive Office and President
That would be correct. I'm buying into their numbers. Right now, I mean it's like, I said, it's hard to look at 18 months to 15 months, to me, but I feel pretty solid about activity that we're seeing right now and stuff that we're booking, much better than we've seen over the -- obviously during the pandemic but even right prior to the pandemic, we were not -- didn't seem to be getting the order intake that I've seen over the last 45 to 60 days.
Andrew Obin -- Merrill Lynch -- Analyst
Got you. And just a follow-up question, Rusty. You've done it in the past, but could you just walk us through some of your key geographies in terms of and just walk us through what are you seeing in terms of economic activity by key geography? Thank you.
W.M. Rusty Rush -- Chairman of the Board, Chief Executive Office and President
Sure. Look at the coast. Let's start on the end, both ends, both are strong. Surprisingly California, as with everything going on, California has been pretty strong, especially from our parts and service perspective. From an over-the-road in Florida -- Florida, while it took a dip, there again we have a lot of Orlando stores, right with Micky World -- Mickey Mouse closed for a while and all the other stuff there. But it is -- with the growth in Florida, driven by growth in population and construction, it has been good.
And also, Florida has always been, a lot of car haulers. Well you see what the automotive business has done. Right. So they've had it varying factors has picked Florida. As I work my way around the country, we've hit some -- from a truck sales it is different. Right. In my viewing from a truck sales or parts and service perspective, pretty solid, Virginia, North Carolina, pretty solid, Ohio, truck orders intake was good. Illinois coming around. If you look for negatives, we're still suffering in some of those areas. Arizona is strong too by the way. Because, I would tell you, Arizona, California and Florida being the strongest, but we're still suffering, in some areas, they are oil and gas related. Not doing as well as we like out in West Texas and into New Mexico and Colorado, so-so, picking up better than what we were last year from a return perspective, up in the mountain west in Utah and in Idaho. So, I mean -- I am just running around the map, I'm looking at the map, over here to my side and I will say it's broad based but those would be the ones that stand out.
Andrew Obin -- Merrill Lynch -- Analyst
And my congratulations to you and your team on all the hard work and great results.
W.M. Rusty Rush -- Chairman of the Board, Chief Executive Office and President
Thank you. We appreciate the comments. As I said, it's the print that I am pretty proud of.
Operator
[Operator Instructions] Your next question comes from the line of Joel Tiss from BMO. Your line is open.
W.M. Rusty Rush -- Chairman of the Board, Chief Executive Office and President
Mr. Tiss, take it off mute Joel. Thanks for the question, Joel.
Operator
Your line is open. I think we have to move on, we have two more questions. We have a question from the line of Shawn Kim from Gabelli Funds. Your line is open.
Shawn Kim -- Gabelli Funds -- Analyst
Hey, good morning guys. I'm not, Joel, but hopefully I suffice here.
W.M. Rusty Rush -- Chairman of the Board, Chief Executive Office and President
You do.
Shawn Kim -- Gabelli Funds -- Analyst
I just had a quick question for you guys. Had a quick question for you guys. Wanted to follow up on the big news from Friday, obviously you guys have it near the payment but, Rusty, wanted to get your thoughts on the Navistar trade announcement? When you think the final documents would be signed or anything else that could shed some light on that combination and how that impacts you guys long-term?
W.M. Rusty Rush -- Chairman of the Board, Chief Executive Office and President
Well, as far as the closure of the deal, I'm not totally in the middle of all that. I would expect -- I would imagine that they've already done, we have been pretty far along the path from a due diligence perspective, they announced that prior, remember. So I would expect that they'll get the documents signed here -- I would say maybe the next month or so and then I would imagine working through the SEC and things like that, sometimes close, sometime this Spring I would think, late winter or spring time would be my guess but that's something they would have to tell you. I am just -- That's a little conjecture on my part.
What do I think about it? I think it is great. I think it's great long-term. It brings it brings a global -- a strong global partner. When you talk about [Indecipherable] as being a partner to leverage off of -- from a new product perspective going forward, especially with the amount of money it's going to take with all this new technology. With the green wave and new technology over the next decade or plus, as we transition. The transition is going to happen. Sometimes, I tell you it's not going to be as fast as people say but that transition will happen and that takes a lot of money. So they have the ability to leverage off the global efforts of Traton, not just a stand-alone. So from our perspective that's a win-win big for both organizations.
Obviously, most likely in a trades job [Technical Issues] North American brand. It is going to come into this country and start from scratch. It just doesn't work that way in commercial truck business. So, I feel good about it. I really do. I am excited about it and I think it's needed to happen, no disrespect to the old Navistar but from a long-term [Technical Issues] and growth of the organization, it's product based. That's great, it's great. I look forward to it. It's not something [Technical Issues] but remember they've already been -- they've already had LTAs and agreements, good costs and things like that are already has joined forces over the last. So I think that unlike a normal acquisition. They are well on [Technical Issues] started prior to this.
I mean, this is just the conclusion or culmination of what way it was supposed to work, when -- when Traton bought a piece out three, four years ago.
Shawn Kim -- Gabelli Funds -- Analyst
Got it. Appreciate the color. Thanks Rusty. Congrats again on the quarter.
W.M. Rusty Rush -- Chairman of the Board, Chief Executive Office and President
Thank you very much.
Operator
Thank you. I think we have the line of Joel Tiss from BMO. Your line is open.
Joel Tiss -- Bank of Montreal -- Analyst
Okay. Can you hear me now?
W.M. Rusty Rush -- Chairman of the Board, Chief Executive Office and President
Okay, I was making sure you were awake, Joel. That's all. I was worried that you had fallen asleep.
Joel Tiss -- Bank of Montreal -- Analyst
Oh, OK. The first question is the most important one. Rusty, how did you manage with a 25% salary cut? I think everybody knows you're kind of paycheck to paycheck.
W.M. Rusty Rush -- Chairman of the Board, Chief Executive Office and President
Yeah, well, actually I'm still given -- I still haven't taken mine. We did bring back by the way, to answer the question? We did bring that all by October, we started bringing it back, some of it was in Q3 and that's part of -- We have a little bit of expense creep as we reinstate. The only thing we haven't reinstated is my paycheck and our 401K, but they're all a normal reduction things that we did those things will be reinstated as we -- Our plan is as we continue to get more clarity, I'd be able, one day, maybe to get my money back. Not back, just get started back because my creditors are seriously after me, Joel. You're right.
Steven L. Keller -- Chief Financial Officer and Treasurer
Joel, we're making sure he has enough money for tequila and food.
W.M. Rusty Rush -- Chairman of the Board, Chief Executive Office and President
That's all I get.
Joel Tiss -- Bank of Montreal -- Analyst
Oh, OK.
W.M. Rusty Rush -- Chairman of the Board, Chief Executive Office and President
I get a tequila and food allowance. That's it.
Joel Tiss -- Bank of Montreal -- Analyst
That's good and everyone's kind of dancing around and I just wondered, do you think like on a three to five year basis that your Navistar dealerships are going to be a lot more profitable, with what's going on with Traton or it's too early to tell or it's not going to matter?
W.M. Rusty Rush -- Chairman of the Board, Chief Executive Office and President
No it -- You better believe it matters because I -- still the returns are not anywhere where I'd like them. Right. I don't have to go back to the history of the last decade. So those returns have not gotten there. Are they getting better? You better believe it. Okay. For two reasons, one, this -- with the growth of the order to Navistar's getting back on solid footing, for getting Traton. Our internal goal is taken after we got through all the max force and then our internal from a personnel perspective and from many other perspective, is getting our arms around it. So when you add that together and you throw Traton to the mix, you better believe that's still what I believe is one of the biggest growth pieces of the organization, right. We believe we don't have the 55 years of being a Peterbilt dealer, like we do with -- with Navistar. So that's only going to get better. With Tarton getting it, that’s only going to help, like I said. They can stay in the ballgame from -- with all these new technologies stuff and not be having to worry about capex, budget is quite as tight, is probably had to -- have been. So, the investments that will be made in product and people and the whole thing across the board can be nothing but a win and we're still -- look we're still in the third inning and running these things and we're getting better.
I've feel much better about where we were from now and where we were a few years ago, so yeah, that's got a lot of runway on it, in my mind, you better believe it.
Joel Tiss -- Bank of Montreal -- Analyst
And then with all the disruption in the market -- this is last one from me. All the disruption in the market, are you finding more acquisitions? Or is that something you're likely to get back into that? Or there is too much work to do internally to drive profitability?
W.M. Rusty Rush -- Chairman of the Board, Chief Executive Office and President
I'd like to find some, but unlike me, they all spell PPP. Okay, so that propped up everybody and then the market has come back strong. It was such a sharp steep decline and then rose back up with what happened with the freight markets. As freight just rocketed back up because everybody was buying whole goods with all the money they got. So, everybody -- you didn't see -- if you'd told me what was -- I didn't really foresee exactly that happening back in say, May and June, but that's exactly what happened. It was such a steep drop and then a comeback from a transportation perspective because you had to fill the shelves back up, first you had to fill the inventories -- beginning to fill the shelves back up. So you've seen what freight's been doing and what everybody – the miles being run. So, unfortunately, I haven't -- there hasn't been much M&A but don't think we are not always looking.
Something will always show up somewhere, I am sure, somewhere down the line.
Joel Tiss -- Bank of Montreal -- Analyst
Alright. Thank you very much.
W.M. Rusty Rush -- Chairman of the Board, Chief Executive Office and President
You bet.
Operator
Thank you. [Operator Instructions]
W.M. Rusty Rush -- Chairman of the Board, Chief Executive Office and President
Okay.
Operator
Speakers, I'm not showing any further questions at this time. I would like to turn the conference back to Mr. Rusty Rush, Chairman, CEO and President.
W.M. Rusty Rush -- Chairman of the Board, Chief Executive Office and President
Well, this will be the last time I speak with everyone, once we get through the election and then the holidays and everything else. And I'm not going to worry about the Presidential Election. But from a holiday perspective, I wish each and every one of you all, all the best with your families. It's been a long year for everyone so please make sure to enjoy and savor the moments with your families throughout the holidays.
Other than that, we will see you and talk to you again in February. Thank you very much.
Operator
[Operator Closing Remarks]
Duration: 34 minutes
Call participants:
W.M. Rusty Rush -- Chairman of the Board, Chief Executive Office and President
Steven L. Keller -- Chief Financial Officer and Treasurer
Justin Long -- Stephens, Inc. -- Analyst
Jamie Cook -- Credit Suisse -- Analyst
Andrew Obin -- Merrill Lynch -- Analyst
Shawn Kim -- Gabelli Funds -- Analyst
Joel Tiss -- Bank of Montreal -- Analyst
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