Rush Enterprises Inc (RUSHB) 2017 Q1 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Rush Enterprises, Inc. First Quarter 2017 Earnings Results Conference Call. (Operator Instructions)

I would now like to turn the call over to Mr. Rusty Rush, Chairman, CEO and President of Rush Enterprises. Please go ahead.

Good morning, everyone, and welcome to our first quarter 2017 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, General Counsel and Corporate Secretary. Now Steve will say a few words regarding forward-looking statements.

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, 2016, and in our other filings with the Securities and Exchange Commission.

As indicated in our news release, we achieved revenues of $1 billion -- excuse me, $1.5 billion and net income of $14.5 million or $0.36 per diluted share in the first quarter. I am pleased with our financial results this quarter, especially considering the continued challenges in the Class 8 market. However, modest increases and activity from energy and construction sectors positively impacted all parts of our business. Our Class 8 truck sales outpace the market this quarter and while our Class 4-7 results were negatively impacted by timing levels of 2 large fleets, we expect a solid year for both.

Afternoon revenues were up slightly in the first quarter. Further, we better aligned our operations by reorganizing certain positions by leadership team, also allowing us to heighten efforts on our strategic initiatives. In the aftermarket, our parts service and body shop revenues were over $350 million, and our absorption ratio was 113.4%. Vocational aftermarket business remains steady with growth on both coasts, primarily due to construction activity. We also see modest growth in the energy sector, and we believe this pace of growth will remain throughout the year.

Our dealerships continue to diligently manage costs and gain efficiencies, which have contributed to our overall operating profit this quarter.

Turning to truck sales. We sold 2,706 new Class 8 trucks in the first quarter, up 1% compared to the first quarter of 2016. Our results again are for 7.1% share of the total U.S. Class 8 market.

Although the road fleets are still challenging, moderate increases in stock trucks, small fleet and vocational truck sales contributed to a strong quarter for us when compared to the overall truck market. That said, an oversupply of used trucks continues, keeping residual values low. But we believe our used truck inventory is positioned to aggressively pursue sales given these current market conditions.

For 2017, ACT Research currently forecasts U.S. Class 8 retail sales to be 168,000 units, down approximately 15% compared to 2016. However, because we are seeing an increase in order activity from construction and energy, as well as general improvements in the economy, we believe Class 8 truck sales in 2017 could be better than previously anticipated.

In medium-duty, our Class 4-7 new truck sales reached 2,553 units in the first quarter and accounted for 4.5% share of the U.S. medium market. Our results show a decline in medium-duty truck sales in the first quarter, but this is due to the timing of several large fleet deliveries. The U.S. medium-duty market was down 2% over the same time period. ACT Research forecast U.S. class 4-7 retail sales to be 233,800 units this year, up 3% from 2016. Demand remains strong in the lease and rental markets as well as our ready-to-roll inventory, particularly in the Southeastern United States, where construction activity continues to grow. We expect our Class 4-7 results will be on pace with the industry for the rest of the year.

In the area of growth, we expanded our footprint with the opening of 2 new Rush Truck Centers in New Mexico and Texas, and continued renovations of several facilities throughout our network. Of note, as in past years, employee benefits and payroll taxes contributed to increased expenses in the first quarter of 2017. Even with these increased expenses, our cash position remains strong, allowing us the opportunities for future growth.

As always, it is important that I take a moment to thank our employees for their hard work, for continuing to provide excellent service to our customers while diligently managing expenses and remaining focused on our strategic initiatives.

With that, I'll take your questions.

(Operator Instructions) Our first question is from Bill Armstrong with CL King Associates.

You have said employing 1% market share, that's the highest it's been in a while. Is that really coming mostly from the oil and gas sector recovery? Or are you seeing maybe a broader share increase outside of the oil patch?

Well, no. I think it's more broad than that, to be honest with you, Bill. As we've got into April here, we continue to see activity from basically all sectors. That's what my note said in my release, and that's surely what we're seeing as a free broad base, which no question, we're removing -- we're receiving more activity in the oil sector, right? But at the same time, we're seeing construction-related business when it comes to refuse used trucks and over other vocational -- more different than -- our vocational activity is just up across the board. And while largely still remain difficult given the valuation of used trucks, I still -- we're still hitting a few deals there, too. So I have to tell you, I was pretty pleased as to how it looked. When you take -- it's not all focused in just one area. But there's no question that energy did contribute to it. Most of the energy orders, to be honest with you, Bill, have not been delivered yet. So they were -- it was just activity that was received during the first quarter.

And can -- I guess, the same can be said then for the parts and service business as well, especially going into the energy sector?

If you really -- yes, some of it. I mean, if you look at our parts and service, let's take a same-store look. You all look at the overall, but you got to remember, we consolidated, shut down some stores last year. So when you take a same-store evaluation, we were up a little over 6% in parts and service, but that was spread nicely too, to be honest with you. Definitely, energy was up some, but there was also activity in other sectors on the East Coast. Florida was -- Ohio was up. On the West Coast, it was, yes, slightly up, but like I said, there are certain regions, different pockets. It's pretty broadly based, to be honest with you.

Our next question is from Neil Frohnapple with Longbow Research.

Could you provide an update, Rusty, on the parts, service and body shop sales outlook for this year? I believe last quarter, you indicated maybe mid- to high single digits could be attainable. So I wonder if that projection has changed at all given Q1 performance and activity you're seeing in the market.

No. As I just mentioned to Bill a second ago, when you take a same-store look, we were over 6%. And I would look to, hopefully, increase that a little bit, to be honest with you. I mean, it's -- we haven't -- and obviously, the year is still to play out. But at the same time, I still feel we're just beginning to get traction on some of our strategic initiatives. I also mentioned to you all before, I was probably out over my skis a little bit last year thinking that we would take off right away on some of those initiatives. But the foundation was laid, the infrastructure from a personnel and the systems, and we're continuing to invest in those things. We continue to gain steam. And I think when you add those to some of the organizational changes that we made during the first quarter and moves we made from personnel perspective, I'm extremely excited we'll be able to hit the numbers that I've mentioned before.

Okay, great. And then could you talk more about the new and used truck gross margin in the quarter that's 7.5%. I believe that was the highest in a number of years. And whether that was mixed, or anything else you could point to that drove that?

A lot of it was mixed. There was some -- there was one batch of trucks, one sort of truck that had special incentive on them. They actually did extremely well. But overall, yes, the margin was higher. I would expect margins going forward probably not quite as high. I can't -- you can't hit it right on the head, but volumes will -- I think volumes will be increasing as we go forward. But -- so we feel really good. We hope -- I would have to tell you that I hope the results from a truck sales perspective, they're painting a good picture of the rest of the year. But it's still a work in progress. We are still building -- we still get trucks built in July, right? So it's -- but that's a -- it's further out than it has been in the last year, but at the same time, we're excited about the activity that we have seen. So we're continuing to really see currently even in the last few weeks.

Okay, great. And one just housekeeping, maybe for Steve. Steve, could you provide the gross margin breakdown by truck in the quarter between heavy, medium, light and used?

Yes. Heavy is 8.2%; medium, 6.7%; light, 5.1%; and used, 8.6%.

Our next question is from Brian Sponheimer with Gabelli.

So just kind of digging in from a brand perspective. You mentioned some medium in the Southeast. That's obviously international acceptance there. Just kind of thinking about the fleet side of the business, is there anything from a brand perspective that is holding Navistar back still from a used value perspective relative to PACCAR or relative to freightliners you're seeing in the industry?

Well, we still got a little bit MAXXFORCE overhang, okay? Understanding that, that's still out there, yes, we're -- yes, remember, we've just reached the 4-year point since they built the last MAXXFORCE engine. So are we over the top? Yes. We are currently -- clearing this hurdle. But are we all the way through it? No. I still think we have just got to deal with that overhang. But the good part is the overhang gets less and less every week that goes by, every month that goes by. As the trucks continue to devalue -- as they continue the residuals, continuing to come down as they're depreciated on balance sheets, that's still one of the biggest overhang. And then you've got -- the product is great. There's no problem with the product. They've -- the new LT, what they came out with last fall is performing admirably with the Cummins engine in it, and that was a -- that truck was a fine truck that crossed over to become an engine prior to the MAXXFORCE engine. So I -- we feel good about that on the international side, and we're -- our quoting activity is up. But you still have -- there's still certain bad taste in some people's mouths, and you just have to get through them, right? And you get through that, our people are working extremely hard with the manufacturer to work our way through those residual aftereffects that people face that people have, right? So -- but we're confident that there's no more -- it's only going to go one direction from here. Now, the pace of that direction, I'm not sure I can totally give you total insight into that. But we do know that the pace is -- it's going to be an upward trend, not a negative trend like we had to deal with a couple 3 years ago.

I guess, along those lines, with them now being partnered with Volkswagen, what's been the customer response to that, particularly those that have been used to purchasing the vehicles with a Cummins engine?

Well, I don't think there's any question there. It's a positive, right? How could it not be? Because all of a sudden, it made them a global employer, right, which you really have to be if you're going to be competitive. Navistar was -- needed to be a global player in some form or fashion. And Volkswagen brings a lot stronger balance sheet. So what that brings is credibility from a customer perspective, from an internal employee perspective, just from an overall perspective. It brings long-term stability when people look at the product and they look at the company. And so that's -- that was the positive. The -- as they integrate in what they're going to do, they know more about it. Troy Clark and his team know more about where they're headed than I do from that perspective as they continue to integrate the ideas and where they're integrating on all sides. But I don't think Troy speaks about it. So I'm not going to speak to what he speaks about. But it's a positive. It has to be. There's nothing negative that you can say about it as you look. You've got to believe that the future is brighter from that side of our business. But at the same time, the Peterbilt side of the business is performing admirably right now, especially in the first quarter and going forward. We're very pleased there. So as Navistar continues to catch up in their arena, we think that bodes extremely well for our future.

Our next question is from Brad Delco with Stephens.

Rusty, appreciate the comments on the Class 8 truck sale customers, I think you said stock, small, fleet and vocational. What are the small fleets trading in and what are those deals look like that you're able to work with, those customers?

Some of those have been without -- some of them were vocational small fleets. So when I -- I guess I should have better clarified that. There's been a lot of -- we've been -- on the international side, we've been picking up some business from just small fleet trucks, right? We're taking them out of MAXXFORCE's or our Conquest accounts, they might be but the majority of it, which would be on the PACCAR side, Peterbilt side, and a lot of vocational small stuff, right? You've had -- there's a lot of construction in some of the areas that we're located. I mean, what I've seen -- someone said the Southeast and mentioned Navistar, but Florida, we're doing really well in right now. Even Texas with oil and gas picking back up, especially in the Permian basin. And even down the Eagle Ford right now with the amount of rigs, you're having customers pop back up again that have been pretty much ground out from the last couple of years. And what happened was a lot of that stuff got dispersed into other markets, right? So there has to be a build back up from it. That's easy. You've got to reignite the candle, right? So that's what you see going on, whether people from water or sand perspective in the oilfield side. New construction site is still good. Housing starts are still good and continuing to be better. So I mean, it's a lot of businesses that are wrapped around that type of stuff. I don't -- we're getting some small regular fleet business and we're trading for some trucks, but it's still -- I expect that to get better because some of the people have hung on in the last so 8 to 12 months to trucks a little bit longer given that they were maybe the depreciation cycle changed because residual values change. So I expect that part of the business to actually pick up a little bit. I'll be interested to see, and I don't have the answer for you, what the effect of ELDs are at the end of the year. But I'm not sure I have the proper answer. I've read about 4 different answers on that as to how it affects things. But I think that'll bode well for freight rates, which is our over-the-road customers. I do believe that. So -- which is good to see. That had stuff last 1.5 years. So freight rates have a -- they have a good couple of years so you go back prior to that. So I think that bodes well as we go forward. These are all just anecdotes I have and thoughts I have on why I think we'll see the -- hoping that the only problem you've got getting deliveries is that used truck overhang. Remember, if it's on a 4-year cycle, we still haven't taken back the 2 biggest years, which were 2014 and '15 when we sold 227,000 U.S. retail in '14, and if I remember it right, it was 253,000 U.S. retail in '15. So on a 4-year cycle, those still have to come back. So if we can make -- if the economy can remain fairly strong, hopefully, and maybe we can absorb those trucks and keep the values where they're at so that we'll be able to help trade out of these trucks. And I know I'm giving you a long answer to a short question but these are all the different things that we watch and pay attention to and look as we go forward. But from a truck sales perspective, we feel pretty good about the finish out of this year. We're not finished by any stretch but we've got some pretty good momentum going. And If you like real color, I think I told you all, going into the last call, I said, my goal was to maintain with -- the market was going to be up 20%, or so as we thought it was back, say, in early February when I talked to you all last. Now ACT is down about 15%. And when it was 20%, I said, "well, I -- we need to be in Rush. We need to stay at least no less than 10% off." I would tell you now that I would be highly disappointed if we weren't flat or up, slightly up, given what -- the activity levels that we're seeing. So I would expect that out of us this year. I'm pretty confident in that.

And the major change in that outlook, is it related to energy, or construction, or both? Is it -- does that vary?

To go back to what I said earlier, it's pretty broad based. I think that definitely will pick itself up. Look, you really want to know, and I'll give you a really long-winded answer. If he goes to doing business with us and he goes to doing business with our people, and the services that we provide are 20% to 25% of my car technicians are out in the field in mobile trucks. They're in shops, they're here. It's not just selling a truck anymore. It's not just cost of sales. There's so much more involved in it. It's connectivity. It's all these different things that you don't want to listen to me ramble on about but it's what we've invested in for 20-plus years. And so today, we went public 21 years ago in June 6, and continue to invest, and that customer answer and the continuing consolidating of our customer base is asking for the things that we believe we can do better than others.

And just a real quick add-on Rusty, can you talk about progress on the all-mixed parts business? And what kind of growth you're seeing there versus your just pure service business?

Yes. You know, and I'd go back to what I said earlier. We're starting to get some traction. And it's up over 8%, but that's not good enough by any stretch. Okay? That's in our catalog stuff. But as I said earlier, I got out over my skis a little bit. I started talking about a little over a year ago, right? And (inaudible) before I started talking about this. It was maybe in the first quarter call of '16. But the foundation has been laid. I am just as confident as I was Day 1 we started this. My timeline, as I said, might have been a little off, but the goal will not be off. We won't miss the goal, and we'll double it. We'll double it. You watch. And just sometimes, you get out over the skis a little bit on the timeline. But I have all the confidence in the world that we'll gain traction. Some of these recent moves here I mentioned in my release and in my notes earlier, I feel confident with the staff that we've built here to help push that out through the field, our approach to national accounts, our approach to just redefining what a dealership is from our -- what we believe we should be doing at the field level and taking advantage and leveraging off the biggest asset we have. Well, the biggest asset we have is our people, first and foremost. But then it's our network, right? That's the differentiator for us, and we have to do that. So as I said, that simple rate is 7%, which is nothing to write home about in that area. But trust me, we're going to get traction later this year. We just will.

Our next question is from Jamie Cook with Crédit Suisse.

I guess, Rusty, 2 questions. One, when we think about -- or Steve, I guess, as well, when we think about -- you mentioned on the medium-duty side that the timing of orders, and that's why the first -- and that hurt your first quarter and will help the rest of the year. Can you just give more color on that? And I guess what intrigued me is you put up $0.36 with a timing issue on -- you know what I mean, on -- ended up -- which implies the run rate for the rest of the year in terms of earnings should be higher, assuming things continue to move along at this pace. And then I guess my second question, my second question is there's been, I think the -- as you mentioned earlier, the Class 8 truck orders have obviously been surprising on the upside. I mean, I guess how sustainable do you think that is? And just sort of your view, I know the vocational market's been strong, but just sort of your view of the light haul market.

You got it. Well, on the medium-duty side, it was a couple of 300 units -- 250, 300 units, but never -- those are lower-margin units when you say Class 8 units. So while they're still very important to us and where we're at, it was just some delays. There were some manufacturers, some timing issues. But we expect to maintain pace the rest of the year where we should be, which was pace with where the market is, which is slightly up. I think it's almost down a couple of percent in Q1. I think it's forecasted 3% up. I mean, to me, that's basically flat either way. So we -- that's where we anticipate ending up the year at. So we feel good about that activity. Still strong. It's still good. I think it's good. I want -- it seemed stronger maybe back in January, but it's still good. So sometimes, you hit 1 month and it fazes you. They're not quite as strong the next month, but we're still doing a nice job in the field, executing there. When it comes to earnings, you asked me 3 questions, I think. You know I don't give EPS guidance, but I would say this: Obviously, I feel better about the year, right? But the year is not done, okay? The year is not done by any stretch. Like I said, I can still get trucks in July. But we have executed on some of the activity, the quoting activity here in the last 60 days or so. So I'm pleased with that. I'm pleased with the outlook. And I just -- but I can still get trucks in July so the year is not done. But as I said earlier, there's no way -- well, not that there's no way. We're not -- we're going to deliver at least as many trucks that's not similar than what we did last year. Now how you tie that in, and I expect our absorption rates to be solid, right, if not better -- a little better than last year. I expect some of that activity to pick up later in the year. I mean, I don't anticipate -- I can't see all of Q3, but I mean, I'm not going to give you -- similar quarter, Q2, what we've just finished-or-so. There's some indicator. So that's where I would -- I believe, but we still got to go out, turn the wrenches and sell parts and sell service every day. That's not finished yet. And continue to drive deliveries, inventory -- stock inventory we've got for the next 2 months, 2.5 months to finish up this quarter and continue to build for the third quarter. I feel pretty good about trucks in the third quarter already. So -- and we still got time to sell more. So that pretty much starts filling out the year, right, then you're into Q4 already. And I'm not ready to look into '18, but '18, you want to look what the world macro market is. But I think I've given you just enough color there that you can see, I hope, knock on wood here, that we continue to execute like we have been. Look, if you had told me, and you know what I said before, this is one time I'm glad to be wrong, by the way. I was wrong. I did not anticipate this much activity in areas we've been. Whatever the reason, my only concern is, as you said, as you look out -- and how strong are the legs underneath it, right? I mean, what's the footing in the foundation. I think I can look pretty much to 2 to 3 quarters of the year and feel pretty good about it, and we still got a long time to build the Q4. So I guess -- but I'm glad I was wrong. You asked me in December, I would have been very happy to just say flat for the year, as I've told everybody. But I won't be happy if that's the case this year now.

Our next question is from Joel Tiss with BMO.

This is John Joyner for Joel. So just real quick. I mean, you touched on international and the kind of the new products there, but can you talk about the new products that have been rolled out by OEMs over the past couple of years and any traction that's being gained, whether certain nameplates or models? We listen to the OEMs all tell you that they're gaining traction. They're all gaining market share, but what are you seeing?

I think I'm going to step back and I'm going to speak to the OEMs that I represent. PACCAR has been gaining market share in the last 1.5 year, and I expect them to continue to gain some more market share. They've done a great job from the product perspective, and they've got a great foundation. The company is -- continues to be poised well. I think if you look at the order intake last year and you look at it so far this year, they've been really doing a nice job, and I don't expect that to change going forward. And their continued investment in technology and the high-end prime -- high-quality product has never, never wavered throughout the years, and continues to. I mean, when they came out with the 579s, it's going to hit a great model with repeatable side. They come out many other miles. I'm not going get all the numbers, but there is a consistent investment program and a consistent investment program going forward from what they tell me. So I have all the confidence in the world there. On the Navistar side, I mean, the product -- they had tough years there, right, and not a lot of products at risk. But starting last year in the first quarter, will be HT, I think, that came out -- HX. Excuse me, HX, I got wrong here. And then the remodel of the Prostar that came out in the fall, the LT. They're new products so they -- and they continue to invest now. They've got refocused because they went so many years there, where they only focused on engines instead of products. So that only bodes well for us and the future, and then I'm sure, like I said earlier, I talked to Troy more about the -- where the integration with Volkswagen is going because I'm not really behind the scenes on all that, but it's got to be a good thing for him. So I -- their bottom -- their market share has to bottom, okay? You've got to believe that. So you've got to believe, for both sides, that we represent on the 8 side. I'm not getting into -- and I think both companies have fine Class 6 and 7 markets, okay, and growing. I expect both of those to grow. So I think for the manufacturing -- to the main manufactures we represent, whether it'd be the 6, 7 or the 8, I feel very, very good about where our product is. One is just ramping back up, and one is continuing to invest throughout the years and has the foundation to work with going forward. So -- and when it comes to the other, we represent. We're the largest Hino and the largest Isuzu dealer. And the largest -- we do a lot of Ford business. So we feel very good about that. The Hino side has a new product out right now. So I mean, those investments continue across the board. I know I'm -- what I just said earlier, everybody says they're investing. Everybody has new products. But I will say I feel very comfortable with the brands that we represent and where they're headed in the future.

Okay. Can I get one more?

Sure. I've got all day.

But so -- I know Jamie touched on this a bit in terms of the new orders, but when I look at the new orders and then the continued weakness in retail sales and the kind of tepid freight, so there's obviously a disconnect there, right? And the production levels that are down year-over-year. So when I hear you kind of attribute some of that to timing on the retail sales side, and it seems like your outlook for the rest of the year is a bit more optimistic, so I mean, is that fair to say that there is a disconnect? Or am I just missing something?

You have got to remember, we do a lot of vocational business. And so we continue to see investments, and I don't know which one of them. (inaudible) we're at. We continue to seek investments in construction. And activity is strong. And I mean, obviously, we're in the oil business, in the oilfield areas in Oklahoma, Texas, New Mexico and Colorado. We see strength in those areas. There's no question that retail is up. That's why to go back to what I said, my main concern are rates at the carrier base, right, from the over-the-road business. But that's just one piece of what we do, and why we've always had a diversified portfolio, and not so tied just to one piece of it. But I do expect that we'll start to see some rate increases later this year if there's -- if some capacity is taken out of the market due to ELDs. And I believe there has to be some collateral. I don't see how -- I just don't see how there's not some capacity that comes out of the market. Not like a (inaudible) consider. It's like 10%. But there's got to be a 3% or 4%, I would think, capacity coming out of the market by the first quarter of next year, which should help to ship -- it should help the freight guys from a rate perspective because the shippers have been doing a pretty good job of beating them out the last 1.5 years. So -- and I hear you on retail sales, but a lot of ours reflects, I don't want to say infrastructure, this activity, this -- in the areas that we're located at, I'll be honest with you. And again, a lot of that I attribute to our network. We're doing -- we're getting Conquest customers, Okay? We are getting Conquest customers. Sometimes people lose sight of the fact that customers continue to consolidate and get bigger. I mean, look at ELD, just going to continue to take out some of the smaller folks. And so when they are that broad-based across and, like, -- when you do have the largest network, which we do, you can provide services that distinctly makes -- it differentiates you from everyone else. Okay? so from that perspective then, we work at it very hard on the service side of the business to help drive truck sales because as you saw in my release, I think the 67% of our margin, and all comes out of parts and service sales, not truck sales. So...

Our next question is from Rhem Wood with Seaport Global.

First question. What was the same-store absorption ratio in the quarter?

Oh, I think it was 107 or 108 last year, something like that.

That was last year's.

It was 113 this year. I think the last year, same-store, you want year-over-year?

It's 107 last year.

Yes, we're 113 this year.

Same, Rhem. It's flat.

So Rusty, you've said you've added 2 new dealerships. What's the plan for adding dealerships going forward? And then, I think you mentioned that the absorption ratio should be up. But can you give me some context there, how much if you had dealerships artificially?

From a dealership perspective, we added 2, a little one in Farmington, and then another one. But then we've also got a couple of more now. We've got another one in Houston, the Northwest side of Houston, a nice pretty large-sized store. There was 2 in the Houston area or outside in Philly. We will continue to greenfield where it makes sense. Well, on the Peterbilt side, I know we've probably got 3 or 4 that are on -- that we're looking at right now. I have -- I haven't done anything about it, but we are continuing to look. We'll always. If you look back historically, we will always open 2, 3, 4 greenfield stores a year in our territories as territories continue to grow because we -- fortunately, we've been in so all the states, Rhem, say, Texas or even in Florida or whatever, we're in some pretty growth areas, right? So as populations grow, starting on construction, infrastructure gets built in. Where it makes sense, we'll add stores. I don't really want to project out on the absorption rate, Rhem, but I feel good about it given our strategic initiatives. I look forward to seeing how well we can manage expenses. This has always -- first, when you get a pick-up, like we -- we picked up, right? But it's been -- in the last 30 days really, it really - it hasn't -- it picked up in January from a parts and service perspective. Yes, it's a little flat the last 30 days on a per-day average. But I hope that we'll see sometimes around tax time, things like here in April, it's a little -- just a little cloudy. But I hope as we get through May and June and July, I would like us to start picking up. Last year, we stayed pretty flat. Typically, we get some seasonal pickup throughout -- between now until October. But last year, we didn't get it, okay? I'm hoping this year, we go back to what I've generally seen in the past, that we'll continue to slightly ramp up month to month to month throughout the summer as we go forward. This is the -- as the highway heat up, and everybody's working. You don't have snow days. You don't have ice and all those other stuff. And in the south, it gets extremely hot, and stuff tends to break more often. And so we would hope that we would get back to the seasonal ramp-up that we historically have seen that we didn't see last year. But we did see a ramp-up in the first quarter, kind of flat here April compared to March, not down, though. And hopefully, we'll get a ramp-up as we go forward. Again, our strategic initiatives are going to take effect, I know they are, as we get that more into the back half of this year. I've said, I have not -- we have not really -- we're getting a little traction. We're not where we want to be. So what that means to me is just opportunity. When you look at the results and how well we've done so far and for the year, how well our people have worked and how well we managed those and the expenses in the business while continuing to grow it some, it just continues to bode well long-term, which is what I'm worried about. The cycle is a cycle, but long-term, it bodes well for us, I believe.

Okay. And then did I hear you say that you've taken a lot of energy orders that haven't been delivered yet?

I don't want to say a lot, but I've taken some. You heard me say a lot of them have been delivered, right? We did. Because most of those orders came in the first quarter, right? So they will be a part of our business going forward. Most of that stuff was orders taken first quarter, delivered Q2, Q3 from numerous customers. So -- but not -- but it was a piece, but that's not the only thing. As I keep saying it was pretty broad-based. I had some over-the-road business, too, that was taken here. I had some construction business. I can think of 3 or 4 mixer deals off the top of my head. I can think of some revenue stuff. I can -- and I'm not privy to all of them. I'm not in 100 stores out there looking at every deal every day, but I do pay a little bit of attention every now and then. And so I think it's fairly broad-based, which is what you want, right? The only problem will be the over-the-road with a lot of heavy trade-ins, but I'm hoping we've seen -- look, the used truck market hasn't decline (inaudible) ask you truck questions, which is kind of interesting. Yes, that's the first question I get. But it hasn't -- the steepness of the decline is more on a normalized residual value decline right now. But we've already taken the hit. But it's not coming up right now. And I still -- as I've said, I talked about it earlier, there still have got to be some type of overhang from before that at least will take a 4-year cycle. And we still I think I've read, whether there's like 15% more used trucks coming into the marketplace, something like that this year. So those have got to be (inaudible). Those have got to be enough, okay? Those have got to be disposed of. So we'll just have -- because I think there's still quite a few used trucks parts from fields out there right now that create an overhang even though what's being sold, the values have not -- they have not -- they're not coming down as steeply as they were in the last couple of years.

Okay, great. And then last one, just on the energy business again, you -- I mean, you've talked about it as you lost $0.50 from '14 to '15. Where are we getting that back? And then how many more mobile techs can you add at this point?

I'm not going to -- we're not as hot as we were -- I don't think I've ever seen it as high as it was in '14, okay? That was crazy hot on fire. The energy business is better. But oil is not $100 a barrel last time I checked so -- anymore, okay. So now the good thing is technology has allowed the oil companies all combine the services and the drillers and everyone else to figure out how to get out of the ground a lot cheaper than we could years ago through efficiencies and technology and everything else. It just so happens that the 2 cheapest places to do it are in the Permian Basin and in the Eagle Ford, which where we happen to be located. So that's a little bit of godsend, I guess. But it's -- obviously, this is better but it's not -- I'm not going to quantify it into the $0.50 of how much is backed. But some is backed, okay? How about that? And we have added mobile techs in the first quarter and -- but the legs on that -- and actually, the good part is it's not just in the oilfield. You go back and look at us 10 years ago. If we've taken a hit in the service business that we took from a mobile side last year, it really all went down on us first quarter of '15. It just fell off on me. We would have -- I remember why, I can go way back, we went down to 5 mobile techs, but our mobile tech business is much more broad-based nowadays, much more broad-based. Because we do it across-the-board and we do it extremely well on the Peterbilt side, we're getting better on the Navistar side. We're adding on that side of the business, too, now. So I think the opportunities are there for us, just with all customers. When you look at congestion inside of urban areas there are right now and what it costs a customer to take a truck to a shop, the rates are paid to people and the downtime and all the stuff that are involved. People don't mind paying a little extra to get it fixed on their yards. I mean, you can't go overhaul an engine, but we're seeing more and more people gravitate towards that type of answer, and that's where we shine the best. But how many can I add? As many as I can get sold. Okay. We'll continue -- to train, right? Obviously, the technician is still the toughest part, but we've got a pretty good program here and have excelled at it for years. So I'm not going to quantify it for you in numbers but I'm just tell you it continues to grow for us and I don't see any reason it's going to continue not to grow. Anymore more broad-based way than it did historically with our company 10 years ago, 80%, 90% of them were in the oilfield. Now it's not even 50%, okay? So I mean, it may not even be 40%. I have to go look at the numbers, but it's way different, our mobile tech service business is than it used to be. So that excites me. As you look forward, you look at the big cities you were in. You look at how hard -- how much traffic is in those cities and how expensive it is to paint the truck at someone's dealership. So the opportunities, I think, going forward, I don't want to say -- yes, I will say, they're endless for us in that arena as we go forward because the capital of the investment is the easy part.

And I'm showing no further questions. I would now like to turn the call back over to Mr. Rush for any further remarks.

Okay. Well, I appreciate everyone's attention to the call this morning. And we look forward to talking to everyone, I guess, that will be in July. Thank you all very much.

Ladies and gentlemen, thank you for participating in today's conference. You may all disconnect. Everyone, have a great day.