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Rush Enterprises Inc (RUSHA) Q1 2021 Earnings Call Transcript

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RUSHA earnings call for the period ending March 31, 2021.

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Rush Enterprises Inc (RUSHA 1.93%)
Q1 2021 Earnings Call
Apr 22, 2021, 10:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, and thank you for standing by, and welcome to the Rush Enterprises Inc. Reports First Quarter 2021 Earnings Results. At this time, all participations are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

[Operator Instructions] I would now like to hand the conference over to your speaker, Mr. Rusty Rush, Chairman, CEO and President. Please go ahead.

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

Good morning, and welcome to our first quarter 2021 earnings release conference call. On the call today are Mike McRoberts, Chief Operating Officer; Steve Keller, Chief Financial Officer; Derrek Weaver, Executive Vice President; Jay Hazelwood, Vice President and Controller; and Michael Goldstone, Vice President, General Counsel and Corporate Secretary.

Now, Steve will say a few words regarding forward-looking statements.

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, 2020, and then 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, in the first quarter, we achieved revenues of $1.2 billion and net income of $45.3 million or $0.79 per diluted share. We're also very proud to declare a cash dividend of $0.18 per common share. Our results were driven by the nationwide economic recovery and healthy activity for most market segments we support.

Gradual increases in parts and service activity and healthy demand for new Class 8 trucks and rising used truck values contributed to our strong quarter, along with our continued focus on expense management, which significantly increased our net income when compared to the first quarter of 2020.

As we look ahead, supply constraints will likely affect the availability of parts and new trucks in the next few quarters. However, we expect supply chain constraints to begin to subside late in the first -- third quarter -- late in the third quarter, and for demand for trucks and aftermarket services to remain strong throughout the year. We believe our financial results will be strong in 2021 as the economic -- as the economy continues to recover and business -- businesses reopen throughout the country.

In the aftermarket, our first quarter parts, service and body shop revenues were $415.7 million and our absorption ratio was 122.6%. Our aftermarket revenues decreased by 2.9% compared to the first quarter of 2020, but we are seeing some pockets of strength, particularly when it comes to parts sales and activity from refuse, construction and public sector customers.

Service revenues are recovering at a slower pace than parts, but we continue to add technicians to our dealership network in the first quarter in anticipation of increased demand later in the year.

As we look ahead, we expect supply constraints to impact parts availability in the industry for the next few quarters, but we are leveraging our nationwide inventory to lessen any impact that may have. We continue to focus on expanding our technician workforce and service offerings, especially contract maintenance and preventive maintenance. We believe this will contribute to increasing aftermarket demand as the national economy continues to recover through the rest of the year.

Turning to truck sales. In the first quarter, we sold 2,995 new Class 8 trucks, accounting for 5.4% of the total U.S. Class 8 market. Consumer spending and freight rates continue to be strong and customer demand was widespread, with particularly strong activity from over-the-road, vocational and construction customers.

ACT Research forecasts U.S. Class 8 retail sales to be 249,000 units in 2021, up 27.2% from 2020. While we expect the country's economic recovery to continue, component manufacturers' supply chain issues will limit the growth in Class 8 truck sales in the next few quarters. However, we do expect those supply constraints and truck production to improve late in the third quarter and for industry demand to remain strong, and that the annual industry sales forecast is due.

Our Class 4-7 new truck sales reached 2,334 in the first quarter, accounting for 3.8% of the U.S. market. Our decline was driven by weak demand from our leasing and rental customers and food service customers in addition to production shutdowns from some of the manufacturers we represent, and component supplier constraints affecting other manufacturers.

ACT Research forecasts U.S. Class 4-7 retail sales to be 251,500 units in 2021, up 8.4% from 2020. We expect demand from medium-duty vehicles to remain strong and for our annual Class 4-7 truck sales in 2021 to be relatively flat compared to 2020.

Our used truck sales reached 1,924 units in the first quarter, up 23.5% for the same time period in 2020. Demand for used trucks remained high in the first quarter due to new truck production constraints. Further, used truck values increased approximately 10% over the fourth quarter of 2020. We believe that demand and pricing may decrease somewhat as more new trucks are available, but will still remain strong this year. Further, we are confident that volume and pricing of our inventory will meet the needs of the market.

It is important for me to recognize our employees providing superior service to our customers while remaining focused on protecting the health and safety of those around them. Their hard work has directly contributed to our strong start to the year.

With that I'll take your questions.

Questions and Answers:

Operator

[Operator Instructions] Your first question comes from Jamie Cook.

Jamie Cook -- Credit Suisse-North America -- Analyst

Hi, good morning. Hope you're well, and nice quarter. I guess a few questions, Rusty. First, the margins in the first quarter on truck, the 9.4%. Was that used truck pricing or mix, so if you can help me there?

My second question relates to -- on the supply chain side, where are the shortages outside of semi? And I'm trying to balance how I think about the cadence of your sales as you're saying the second and third quarter will be impacted by supply chain, but you're also talking about market share gains for Rush. So I'm just trying to balance those two. So I guess why don't we start there? Thank you.

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

Sure, Jamie. No problem. Yes, you hit it on the head. From a margin perspective, in the first quarter, that was the largest -- highest used truck margin that I can ever remember that we've had, right? So, decent volume and high used truck margins. I expect going forward that used truck margins will still remain high, maybe not quite that high.

Supply side is probably the biggest issue. I feel we got a decent inventory. Supply of used trucks is across them, I mean just across the whole nation, is somewhat limited. So obviously, supply and demand [Indecipherable] driven prices up.

I mean, if you go back to COVID time, I mean, they're up 30% to -- 30%, 35% from last year, April of a year ago. So a lot -- we expect, as I said, those to still remain high. It might be difficult to keep the volume right there, but that's what drove the margins to be that high for sure.

When you talk about things outside of semiconductor, it's just a myriad of things, Jamie. One day it could be wiring harnesses, one day it could be clusters, dash clusters, [Indecipherable] seats. I think it's just across the board with your Tier 2 and Tier 3 suppliers. Their manufacturers are managing as best they can, but I think they keep getting hit with different issues with different suppliers.

So, I mean, when you had the freeze and the stuff down, you got hurt for stuff coming out of Mexico. And even just keeping up with it, I think everybody ramping up after all that COVID has been very difficult for Tier 2 and Tier 3 suppliers, not just on the semiconductor piece, so the chip piece, but it's just -- from a parts perspective, when you look at our parts inventories, we've got more parts backordered right now. That's one of the issues you run into. And there is a -- you can see that trickles not just their trucks, it actually trickles some parts and service too.

So, I do believe that those things will iron their selves out, they typically do. The chip piece could last longer from some stuff I read, I'm not an expert on it, but I would look for most everything else. I think we're the worst part of it right now from what I can see here in April and May, but I do think that everybody's known about it here for a couple months, could see it coming back in February. And I think you'll see it really get better as we get later into the summer, which will be into the third quarter obviously. And hopefully, we'll catch up with it and it won't be an issue for all that. Now, the chip piece, different people say it will last longer, I'm not the expert on it, but that's what I see it from a -- basically from the other.

As far as market share gains, well, if they're building less because of that or not as much, we're going to get our share. We're going to get our share of product and I do believe --but I do believe our deliveries for the year are going to be more back-end loaded, given these issues that we're having right now. We're going to sell trucks, don't worry about that. But I think any big gains which I expect to have, more units will be more in the three and four than Q2. I expect Q2 to still flat slightly up from Q1, slightly, not a lot, but slightly. And a lot has to do with these shortages, OK. I don't have my finger on the pulse of -- I mean, my finger on the pulse, but you never know how it's going to affect you from day to day or week to week or month to month.

But I do expect it to get cleared out, I do expect to deliver quite a few more trucks in the back half of the year, especially on the eight side and also in the medium side for sure. I don't expect to have the issues. We had some big leasing deliveries last year in the first quarter. I mean, we -- and then we didn't have any this quarter. And so -- and we also have issues with one OEM that's pretty much out of our production right now till we get to later in the year. So -- but that's one of the reasons I think deliveries overall will ramp up as we go through the year, just not as dramatically here in Q2 as you would have expected given the shortages, but they will continue to ramp throughout the year.

Jamie Cook -- Credit Suisse-North America -- Analyst

Thank you. I'll let someone else get in queue.

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

Okay.

Operator

Your next question comes from Joel Tiss.

Joel Tiss -- Bank of Montreal -- Analyst

I wonder if you can do your presentation over again, I couldn't understand you with your mask on. Just kidding.

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

That's my voice, Joel. You know it.

Joel Tiss -- Bank of Montreal -- Analyst

So I wonder if you can talk a little bit about your ability to -- like structurally what you've done to change your cost structure and the ability to keep the costs below where they've been historically?

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

Well, you learn a lot [Indecipherable] Joe, and then you learn a lot in 2020. And understand that we're trying to take some of the lessons we've learned and take them forward with us into the future, right, what is doing more with less in the same time. We will have -- if it continues to ramp at the pace it is, we will have some expense increase. You don't sell parts and service and trucks and things without things to do it, turning wrenches, making up bars, delivering bars, stopping bars, doing all the things you have to do. But we have goals internally in the company that we're going to spend less as we grow than we have in the past.

We feel we've learned a lot, we feel we've will be able to do that. Expenses will ramp, but they're not going to ramp as steep as they have in past cycles. So, we believe we can manage it that way. We've learned a lot, we're -- and we put some controls in place. I'm not going to get into those things. At the same time, you still got to be able -- you've still got to be able to grow [Technical Issues] people to take care of it.

So -- but it's just a balancing act and we'd like to believe that we've learned a lot last year during that process and we're having tighter controls and making sure making more thorough decisions on investments and things that we make. Those are all a part of it, it's not just one singular thing. But it is aligned with only growing expenses, a certain amount, depending on growth rates of the organization.

Joel Tiss -- Bank of Montreal -- Analyst

Is there anything like maybe not concrete, maybe too strong of a word, but anything you can share with us? Maybe like peak to peak, we think SG&A will be 100 basis points lower or anything like that that we could just sort of like ballpark think about?

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

Well, I hate to do that. Giving you some -- we have it internally, but the way I would express it, I really haven't looked at it from your perspective. I explained it internally to my folks, but it wouldn't make a lot of sense to you from an operating perspective. I haven't really extrapolated to tell you this many bps. It really -- remember Joe, you got to strip S away from G&A. S is going to do what truck sales do, OK. S is always going to be a component driven by sales. So, sales go up, sales go down, S will go up, S will go down. It's the G&A piece that we're focused on.

We'll spend less of every gross profit dollar that we create, but it can be -- but I don't want folks looking at it in a singular core. It's not a core thing. At different times of the year -- at different times of the year, you spend more. I will tell you, we'll spend 40% of the gross we create in Q2 probably from last year, Q2 year-over-year I think. But Q2 year-over-year was a tough year. That was the COVID quarter, right? That was the terrible quarter of last year. So -- but we will spend less of every gross profit dollar. And we have internal goals, but I'd rather just keep them to myself right now.

Joel Tiss -- Bank of Montreal -- Analyst

Okay, good. And then...

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

[Speech Overlap] Operating numbers, Joel.

Joel Tiss -- Bank of Montreal -- Analyst

An easy one for Steve, and then I'll leave it for everyone else. Why is the share count rising? And can you give us your estimate of the tax rate for the full year?

Steven L. Keller -- Chief Financial Officer and Treasurer

Yeah, the share count, Joel, especially compared back to 2020, it's a timing issue as much as anything. We continue to repurchase shares. However, a bulk of the shares we repurchased in 2020 happened in the first quarter. When the stock dipped, we were opportunistic and bought heavier then. Since that time, we continually repurchase, but not at a very high level.

And the other big difference is the way you calculate diluted shares. At this time, last year, our stock was trading in the low- to mid-20s and now we're trading in the -- whatever, upper $45 to $50. And our diluted shares outstanding when the stock price is higher, has contributed to the share count increase. That and options that were exercised last year during the last few quarters because the stock rate went up so much.

So, exercises of options and the higher price drove more diluted shares. Going forward, it should flatten out because we expect to continue to repurchase shares. And there'll be some exercise option -- exercise of options that'll probably offset that somewhat, but it should be landing in this 57-or-so percent range -- and 57 million share range that you saw us post this quarter.

On the tax, again, the rate was low in Q1, it was 20%. That probably -- that boosted Q1 earnings about $0.03 to $0.04 of what they will normally be throughout the rest of the year. The rest of the year, our tax rate will be in the 24.5% range. Without getting into all the detail, that's also related to some permanent differences between book and tax income that are discrete to the first quarter, mainly again around option vesting and share vest, equity award vesting and stock price. But for the rest of quarter, you need to forecast about 24.5% for the tax rate -- for the rest of the year, I'm sorry, each quarter.

Joel Tiss -- Bank of Montreal -- Analyst

Awesome. Thank you very much.

Operator

[Operator Instructions] Your next question comes from Justin Long. [Operator Instructions] Your next question comes from Justin Long.

Justin Long -- Stephens, Inc. -- Analyst

Thanks, and good morning.

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

Good morning Justin.

Justin Long -- Stephens, Inc. -- Analyst

So I was wondering, Rusty, if you could give us a sense for how parts and service revenue trended on a month-to-month basis throughout the quarter and maybe an update on April as well, just because weather clearly impacted February. So just wanted to get a better understanding of how the business was trending ex weather? And then for the full year, I think you'd talked about parts and service revenue approaching 2019 levels on the last earnings call, is that still a fair expectation?

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

Yeah, I think that's a fair expectation. It's been ramping up starting with January, except we did have a dip in February weather related. But prior to the weather week, everything was trending up then too. So we just sort of jumped over that week, and it trended up again in March. And so far, this two-thirds of the way through April, it's trending up over March. So as I said, it's not dramatically as gradual, but going in the right direction. And we expect it to continue to especially as we get into these warmer weather months -- as we get to these warmer weather months where you tend to have a lot of other things that you -- air conditions and things like air conditioners things like that that break. So we typically normally have a rise to seasonality just given during the summer months. So we do believe that this trend will continue and especially, with all the miles have been put on trucks out there right now, there is a lot of miles being driven so equipment is getting -- they haven't been able get as much new equipment in. So there's a lot of equipment being driven and work.

So I don't see any reason, why we won't continue -- you know, moving forward and get somewhere really close to that 2019 level, right? Remember, we started we were a little bit off of last year, but really flat if you just took out the weather week, but that was off the prior year. Because really COVID didn't take effect in the last two weeks of March last year. So in '19, we ramped up all the way through September, and then we had some -- look, some fall off in the last quarter of the year. I expect it to go the other direction. And continue that way throughout the year -- this year. So, we feel very good about that. We feel good about the initiatives we still got out there. It's not just happened for us. We believe, we have direct -- there is direct correlation between the investments that we made over the last four years or five years, and the results that have carried us through the COVID year. And the results are going to carry us through this year and the growth that we'll see in this year and going forward. So we're excited about that. And then our folks are doing an outstanding job in the field working and managing through that right now.

Justin Long -- Stephens, Inc. -- Analyst

Great. And what you said at the end was actually my next question on the parts and service initiatives. I know last year with the pandemic, it was probably all hands on deck, just dealing with the challenges of that. Can you just update us on where you said in terms of implementing parts and service initiatives? What inning are we in that process? And now that we're hopefully reopening the economy, across the country? Should we expect to see more of a benefit from those initiatives in 2021 and 2022?

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

No question. Without getting into specific customers, I have specific customers in my mind that we've been able to capture with those initiatives, or even over the last -- even during the COVID year. And I was out this week, myself. And last week, we were doing presentations with folks and myself out there. And there seemed to be thirst for some of the things that we can supply or we can give the market given the network, we've got the most expansive network out there, and what the investments that we made in these initiatives.

To answer your question, we might be top after the fourth. We want to ask what anymore, we might be through the first third, but we're not into the second third of the of the baseball game. We're just getting into it. I really, really believe that. And I think the numbers will bear that out going forward. I mean, and I believe it would be the next couple of years. I think we've got an outstanding the next couple of years, given regulations that will be coming into play in the front business, and with the growth in the economy that we -- everybody expects to see over the next couple of years. I think we're going to be in great shape with the investments we've made. Moving forward and just -- I think customers are going to desire, the things that we can provide to differentiate us from other folks.

Justin Long -- Stephens, Inc. -- Analyst

Great. I will leave it at that. Congrats on the quarter.

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

Thanks.

Operator

And your next question comes from Andrew Obin.

Andrew Obin -- Merrill Lynch -- Analyst

Hi, Rusty. How are you?

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

Very good Mr. Obin. Very good.

Andrew Obin -- Merrill Lynch -- Analyst

Congratulations to you and the team on great quarter.

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

That's more about the same, but thanks Andrew.

Andrew Obin -- Merrill Lynch -- Analyst

Just a question-a lot of questions have been answered. Can you just talk a little bit more about the end markets? How is the pace of recoveries proceeding? And just maybe you can look at geography and tell us, which regions look stronger and which end markets look stronger? And specifically, I also would love to hear your views, historically on parts and services, fracking has been a big meaningful component. It's been dead for a while. Is there any signs of life there? So sort of two part question.

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

Well, you said to me to go geographically. The coasts are both doing well. California surprisingly, even though it's shut down more than other states. It's surprising how well it's done. Florida is doing outstanding, Texas, West Texas is having a difficult time and I'll reference that back not difficult, but still -- still very successful. Just not to the level that we were, Oklahoma is doing well. We're seeing as we move up through the Midwest is coming back a little slower, but it is coming back, Chicago in that area around Illinois seems to be picking up, Carlisle seem to be picking up also. Well, they may not all be in the same innings, OK, but they are as states reopen, get back to what they're all. We're seeing it across the board. Just probably the coast have been the strongest, Florida and California seem like Dallas has done really well in the North Texas area. So those areas may be a little better than the others, but every one -- every region seems to be picking up. We don't have one that's really lagging just somewhere in different innings of there's a big enough.

End markets, again, we're seeing construction and refuse continues and but the over the road business is extremely. Now, that's what all was driving all these sales is the over the road market. But we're also -- it's pretty broad-based construction and revenue for us has continued to do well. I will tell you that you asked what are fracking. Fracking what? It's maybe up slightly, as we see consumption going up. I realized we're going to be zero carbon one day. But for now, we're not going to get there today. So as we see that continued rise in oil consumption go up, it'll be interesting to watch the back half of the year. We haven't seen it. We're not forecasting any big rise in the oil -- a big jump in rigs and stuff like that working. But it wouldn't surprise me if this economy continues to heat up. And the global economy follows somewhat better than consumption goes up. It wouldn't surprise me to see that happen. But I don't know if it is this year, it maybe next year in '22. Not here in '21. But I -- that's not in our numbers now. The numbers, you're saying that's one thing that I'm most proud of, if you look back the organization five years ago, and you compare it to now is how we were driven so much by O&G. And how little of our results are driven by oil and gas and how much more diversified we are across the whole organization. So if it did, it would just be bonuses. I can tell you that we'd be very happy to take it, if we could get some big up an oil and gas. But so far, we haven't seen it not projected in our future right now. But if it does happen, it's considered a bonus.

Andrew Obin -- Merrill Lynch -- Analyst

And just another question. So I think looking back even beyond a decade. I think your systems and you're sort of focus on software and things like telematics has always been sort of part of your secret sauce operationally. And sort of enable you to take advantage of the scale that you have? There's been a lot of talk about people accelerating the digital efforts, the software efforts as part of COVID. Can you just talk about, how have your systems delivered during COVID? And what lessons you've learned about sort of systems and software, and sort of driving the digital backbone of the organization going forward? Thank you.

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

You bet. There's no question, Andrew. I mean, it's there's two differently, are you talking about there's data, right? And that goes back to our SAP system that was so. Painstaking to do years ago. But with that data, we have taken that data and put it with sand extrapolated that they've learned how to use it, and turn it into revenue, whether it's through our whole Rush care profile of programs, and I'm not going to get into all those on the call, I'd be happy to. But that would take a little bit while, but our connectivity with customers showed well, throughout the COVID time. Without that, I'm not sure we can produce, I know, we couldn't produce the results that we produce, if we didn't have the tools that we have to connect with customers outside of touch, right? During this last year, we wouldn't have produced results we have. Parts Connect, Service Connect. Now all these different things that we have and other things that we have underneath the umbrella of Rush care. But I'm not going to go through all eight or nine of them here, while we're on this earnings call. But you're correct, when you say those investments are shining, and you can see the numbers.

As an easy way for me to tell you is it's in the numbers. It's in the numbers of what we're doing currently. And I'm very proud of the efforts of everyone in the organization over the last decade, to be able to implement these tools, and then to take those tools and turn them into revenue, right? And that's what we've seen happen. And we're super excited about where we're going and we're working on other things that I'm not going to get into right now, other investments. That's one of the things when you're in the position we're at right now. You can look at the balance sheet or we can see the cash in the organization has and lack of debt. We don't have that debt outside of leasing and leased trucks and floor plans. So the investments, we're going to continue to make the investments to stay on top of it, and try to stay on that leading edge, not bleeding edge, on that leading edge of technology going forward, that will hopefully will help continue to drive revenue especially in the parcel service side of our business.

Andrew Obin -- Merrill Lynch -- Analyst

Congratulations. Thanks a lot.

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

Thank you Andrew.

Operator

And you do have a follow-up question from Joel Tiss.

Joel Tiss -- Bank of Montreal -- Analyst

Hi everybody. Must be on vacation today. On the last -- on the last call, you mentioned that you think that this cycle could be more of a three-year upturn. And I wonder if you could update us on that, and give us some reasons why you think that?

Steven L. Keller -- Chief Financial Officer and Treasurer

Well, first of all, I think so, because let's go back to the current regulations that are going to kick in and come into play in '24, right? I think you're going to see -- there's going to be some scrambling around. Firstly, I think the regs are coming in too soon. I don't think that we're ready for the stringent regs and they're going to bring in I don't know how many states are tied up yet, could be up to 15. If all the states tagged on that would be 30% of the market, that we have customers in those states that will be scrambling to purchase trucks prior to because from what I understand, in those states, even diesel will go up a very large, I don't have a [Indecipherable] numbers anywhere between $12,000 and $20,000 plus on diesel engines to meet those restrictions, and I don't think people know yet. I think it's a little bit -- I think it's a little fast. I think these regulations will be put in a little faster should be more on. 2027 like the EPA, is that right now that I'm sure that could all change? We've had a change in obviously in government, so what to see how that all goes. But that was the number one thing. They said truck sales would be there. The other part is the economy. And then part of this year, may get tempered a little bit with suppliers [Indecipherable] I don't think a lot, but the economy stays strong, it's always the best driver there is for truck sales as they got me. So if it stays strong, and tied in with the 24 regulations coming on, with garb, etc. Then I believe that we should be for the next 2.5 years fairly strong credit markets and I think I'm-I don't think I'm the only one out there that is projecting that either. So there would be my answer for you, Joel.

Joel Tiss -- Bank of Montreal -- Analyst

Okay. And then any early things you're hearing about trade Navistar, that would like, for you to get ready? Will they be more aggressive on parts? Or will they rebrand products that will help devalue your franchise. Is anything early that you guys are picking up that you can adjust your business strategy?

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

No, I don't see anything right now this early. I don't think that sort of wait and see, I know, we're excited about it. I think the stability that it brings from a long-term perspective. The ability to get for technology, the breadth, the global view that we'll be able to scale, because they'll have from a technology perspective will be great. I don't have anything specific like parts or things like that this early there. That'll be something that'll play out, I think, as they take over, I don't see something early, I do believe that there have been I have been collaborating for a couple three years working on stuff anyway. And I think that's just only has been accelerating behind the scenes. And we're just excited about that new ownership that's coming on board and the ability and we'll give the Navistar group to continue to forge down the path that they've already been go ahead and now, but maybe even accelerate into the future.

Joel Tiss -- Bank of Montreal -- Analyst

All right. Great, thank you so much.

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

You bet Joel.

Operator

And there are no further questions at this time.

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

All right. Well, thank you ladies and gentlemen, and we will speak to you in July with the second quarter results. Good bye.

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

Jamie Cook -- Credit Suisse-North America -- Analyst

Joel Tiss -- Bank of Montreal -- Analyst

Justin Long -- Stephens, Inc. -- Analyst

Andrew Obin -- Merrill Lynch -- Analyst

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Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
336%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

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