RUSHA - NASDAQ

And good day, and thank you for standing by. Welcome to the Rush Enterprises, Inc. fourth quarter 2024 earnings results. At this time, all participants are in listen-only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Rusty Rush, Chairman of the Board, Chief Executive Officer, and President. Please go ahead.

Well, good morning, everyone. Thanks for joining our fourth quarter and year-end 2024 conference call. I have with me today Jason Wilder, Chief Operating Officer, Steve Keller, Chief Financial Officer, Jay Hazelwood, Vice President, Controller, and Michael Goldstone, Senior Vice President, General Counsel, and Corporate Secretary. Now Steve Keller 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, 2023, and other filings with the Securities and Exchange Commission.

As we mentioned in our news release, we had $7.8 billion in annual revenues for 2024. And our net income was $304.2 million or $3.72 per diluted share. For the fourth quarter, our revenues were $2 billion, and our net income was $74.7 million or $0.91 per diluted share. We are also happy to announce a cash dividend of $0.18 per common share. 2024 was a challenging year for the industry, which faced persistent headwinds, including the ongoing freight recession, high interest rates, and economic uncertainty. These factors hit over-the-road carriers hard, leading to weak demand for new Class 8 trucks from that customer segment. However, our strength in public sector and vocational markets helped balance things out, and we managed to hold our ground in a tough Class 8 environment. Our Class 4 through 7 truck sales were strong across various customer segments, and we outperformed the market in medium-duty truck sales. The used truck market remains challenging, but we continue to execute well on our sales strategy, and we were able to deliver strong results. The same challenging operating conditions that impact new Class 8 truck sales also impacted the aftermarket industry. But our sales force's dedication to our strategic initiatives helped us to slightly outperform the industry. Despite the difficult operating environment that we faced in 2024, I am very proud of our financial results. Focusing on the aftermarket, our parts, service, and body shop revenues of $2.5 billion last year were down 1.8% from 2023. Our absorption ratio was 132.2% compared to 135.3% in 2023. Even though our aftermarket revenues were slightly down, we grew our market share by expanding our national account sales force, which allowed us to enhance our service to large strategic accounts. Demand was sluggish for the over-the-road, energy, and wholesale customers, but we saw strong sales to vocational, public sector, and medium-duty leasing customers. In 2025, we expect aftermarket demand to remain soft in the first few months due to the freight market continuing to struggle, which results in lower over-the-road fleet utilization rates. However, we are optimistic that demand will pick up as the year goes on and the freight market improves. We believe that our focus on growing our national account customer base and our other aftermarket strategic initiatives will result in revenue growth this year. We are also committed to expanding our technician workforce in 2025, particularly mobile technicians, which will allow us to reduce vehicle downtime in our shops, better serve our customers, increase back counter parts sales, and grow market share. Regarding truck sales, we sold 15,465 new Class 8 trucks in 2024, down 11.4% year-over-year, representing 6.1% of the US market and 1.7% of the Canadian market. Market conditions were tough with high inventory levels and competitive pricing. However, our sales to specialty market customers helped offset weak demand from our over-the-road customers. ACT Research forecasts US and Canadian sales of new Class 8 trucks to be 277,200 units in 2025, basically flat with 2024. We expect sales to be challenging in the first half of 2025, but we anticipate that demand will improve in the second half of the year as freight rates recover. In addition, despite uncertainty around engine emissions regulations, we believe the EPA's clean diesel regulations will drive some pre-buy activity later this year. We are optimistic that pre-buys along with strong vocational sales will allow us to achieve strong new Class 8 truck sales and keep pace with the market in 2025. Our Class 4 through 7 new truck sales were up 5.1% year-over-year, with 13,935 units sold in 2024, representing 5.3% of the US market and 3.1% of the Canadian market. Medium-duty vehicle production stabilized, and delivery lead times improved throughout the year. Our strategic focus on diversifying our customer base and focusing on large national accounts paid off, and we outperformed the market in new Class 4 to 7 truck sales. ACT Research forecasts US and Canadian sales of new Class 4 through 7 trucks to be 282,250 units in 2025, up 5.3% from 2024. However, supply has caught up with demand, and we believe the medium-duty market may begin to slow in 2025. Nevertheless, we believe that our expertise in the medium-duty sector and our ready-to-roll program will help us achieve strong medium-duty commercial sales in 2025. We sold 7,110 used trucks in 2024, basically flat year-over-year. The used truck market was challenged due to values continuing to fall and tight credit, but our disciplined inventory and pricing strategies helped us deliver strong results. With freight rates showing signs of improvement and used truck values stabilizing, we are cautiously optimistic about 2025. Leasing and rental revenue was $354.9 million, basically flat from 2023. Our Rush Truck Leasing division continues to be a key contributor to our overall performance. While rental revenue was slightly down in the fourth quarter, leasing revenue increased as we replaced 1,500 units in our fleet. As the age of our leasing and rental fleet decreases, we should recognize higher revenue and lower maintenance and operating costs going forward. We expect our leasing and rental business to remain strong in 2025. I wanted to remind everyone that due to seasonal increases in employee benefits and payroll taxes that occur in the first quarter of every year, we expect our G&A expenses to be sequentially higher in the first quarter of 2025 compared to the fourth quarter of 2024. Lastly, I want to make a final comment on the proposed tariffs that may impact vehicles and component parts manufactured in Canada, Mexico, or China. We are currently monitoring this situation closely. If such tariffs are enacted and significantly increase the aggregate price of new commercial vehicles or parts, we believe the demand for new commercial vehicles and parts could decrease in 2025. Before we wrap up, I want to thank our employees for their hard work and dedication in 2024. Despite the challenges, they stayed focused on our strategic initiatives and expense reduction goals, helping us achieve strong financial results. With that, I will take your questions.

Thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Our first question comes from the line of Andrew Obin of Bank of America. Your line is now open.

Yes. Good morning. Can you hear me?

Yes. We have got you, Andrew.

Excellent. Rusty, given your commentary about second-half recovery, how should we think about earnings seasonality in 2025 versus a normal seasonal pattern? And I will just throw in, specifically, when does parts and service turn positive again? So two-part question. Thank you.

You got it. No, Andrew. It is going to be an interesting year. The first half of the year, we are still feeling any lingering effects of the freight recession. Without question here in the first quarter. We do expect that, but we are seeing signs of activity. Regardless of what the numbers showed, like in December, then their order numbers were down in January. We are seeing the last few weeks signs of activity. That so do not tell me that we are going to get better in the over-the-road business in the back half. Vocational businesses are still strong. But we believe that you are getting, I think if you check with the large over-the-road guys, they are starting to get low signal to, you know, maybe up to try to get maybe the mid-single digits on the contracts that are coming up. So that has to take hold. Right? That has to take effect. Right? And it just does not happen overnight. But it shows, you know, they have reached confidence in the over-the-road carriers. And it is the fact that, okay, we are, you know, we have for sure thought about in the back half of last year like we talked about. We talked about it prior. Well, now we started getting confidence going forward in where we are at going into, you know, going on into later into this year. And then I will talk a little more in a minute if someone would like me to about what we see when it comes to the government regulations and all with everything up in the air right now. But I do believe I will get to the parts and service here in a second. I do believe that when you ask about what the year is going to look like, the year is going to ramp up from beginning to the end. A tough, you know, a tougher start. But I do see and believe by the time we get into the back half of the year, definitely going to be on the upswing. Again, when it comes to, you know, I looked at the overall deliveries in retail in the US in January. We are down 2,000 units from last January. So it is only a couple thousand you are starting. Being a little softer in January from where you were last year. But we do firmly believe that the back half of the year will continue to ramp up. And I think that you are still, it is hard to talk about pre-buys and all. Because we have got too many regulation uncertainties out there, which I do not mind getting into if someone would like in a minute. There are still to be, you know, there is still to be, we are going to figure them out. We have got to see what the government does right after the administration. He has only been in office, what, 30 days now. The new administration, and obviously, I do not have to tell everyone that there is a lot of uncertainties to a lot of things. Whether it is tariffs or EPA regulations or any of this stuff. Are going to shake out right now. We have got thoughts about it. We are not sure. But I do believe that overall, it is going to be a ramp up throughout the year from beginning to end. Maybe, you know, with, you know, a better close than what we had in 2024. That would be my plan. The back half will definitely should be stronger than the front half. We are just going to work our way through it. Look. We had to work last year extremely hard. You remember I always called it hand to mouth, man. We are back in normal regular times where you could get a, if you were not, you did not have allocation. Right? You were working to get trucks, and you could get them in 60 to 90 days. Well, guess what? That is still the environment we are in right now. From a parts and service perspective, it is going to, this goes right along with what I see. From when I talk about where we are at. It goes right along with truck sales, to be honest, ramping up throughout the year. I just think we may get a little bit more inflation. Which will have, going to have a sometimes a positive effect on parts and service. Totals when you get through them all, but we will have to see how that all shakes out again. But we do believe that it will ramp up. We will get up into maybe not the first half of the year. I looked like I said, the first few months fairly flat. But ramping up to mid-single digits and, you know, growth when we get into the back half of the year is how I would look at it. You know, you do not need to want to do more, but right now, I do not want to get you all to be conservative with my outlook. I am not one to really get out of, yeah, over my skis too far. As you have known me for 28 years. So but we have confidence that we will be all over the market. As it begins to ramp back up, and we will continue to, you know, you know, drive. We still got, there is still runway left. Yeah. And a lot of our strategic initiatives are always working on others. Behind the scenes. And I mean, I talk about. So, anyway, that would be my take on the year. And it is pretty similar both on both sides. Ramping up. Especially once we get settled out with all these uncertainties we are out there right now.

I see. And just a follow-up question. As things ramp up, how should we think about, you know, SG&A was one of the sources of upside in the quarter. Do we think about SG&A control as you ramp into the next cycle? Will it look similar to the prior cycle, or, you know, are there any incremental savings as you get efficiency? And that will be it for me. Thank you.

There you go. Put the heat on me on G&A. Remember one thing. S is S. S is directly tied to selling trucks. Okay? So we run the business all with G&A. Our S is going to be, you know, that 25% range or so all the time related to the gross profit of trucks. The G&A piece is what we, you know, we manage on a daily basis. I mean, you can look back at, you know, that was a big contributor this last year. Big contributor. You know, we were down almost 5%. We have got 4.9%. Year over year. In Q4. If I am not mistaken, it was similar, I feel like 7, usually, and it was sequentially. We were supposedly flat with 3 and 4. But 3 was down, like, 0.52, if I remember right, over 2. So we did an outstanding job from my perspective in managing that G&A. As it ramps up, as you ramp up parts and service, you know, it is not like welding cash. Rolling money to someone. It does come with a G&A expense. And our goals will be to try to keep, you know, the gross profit dollars recreated on the back ends, we are going to try to keep 40% or so of that. You know, I have got a goal to keep 50 or more, but typically, it averages out if you go in the ramp-up period over a three-year cycle and we average that in that 40% range. Yeah. Because we are handling parts. We are doing this. We are doing that. We are working with whole goods. Right? So you know, it takes people to do all that work, but that is a great situation to be in. If we can stay close to that 50% number, in a ramp-up period, then I will be very happy about it. And we will continue to, you know, we are looking for that. Okay? I am looking to get back, you know, we were 135 down to 132 in absorption. And that is a direct correlation, obviously, with gross profit on parts and gross profit and expenses. You know, we lost some gross profit last year. But we managed our expenses well to keep it that tight. Of a number to produce a year like that. When you are going negative, on your parts and service, and that is not easy. Okay. So I would expect us to even do a better job. I am not going to get into specifics as to why I believe that, but the world continues to evolve. You know, e-commerce continues to evolve, which actually helps when it comes to expenses, it is not all the way there, but it is only going one direction. So always, we should be able to do business, hopefully, cheaper, okay, in the future. It is not all the way there yet. We are in the truck business. We are not the most highly technical business in the world. So but it is evolving. And I think there will be opportunities for us to take some of that normal what we see in expenses when the cycle ramps up. Hopefully, we will be able to take some of that out. You know, with technology as we move forward. It is not ever going to go all the way. But at the same time, we ought to be able to do a better job of trying to squeeze those expenses, but it is still, you know, we still have 390 outside salespeople. Right? On the parts and service side. So, you know, they are not going away. But, you know, business I can see a shift in our business. Now this is over a longer period, you know, to, you know, to get it, it continues to shift right now. More towards e-commerce, etcetera, etcetera. Which you would hope you could take some cost out. But it can also bring in make it a more competitive landscape too. So there is a, you know, there is a yin and yang there that you have got going with it, but I know I am giving you a long-winded answer, but you are used to my long-winded answers. So trust me, we will, I think we will do a better job on G&A at the ramp-up we have is.

Thank you so much.

You bet, Jim.

Thank you. One moment for our next question. Our next question comes from the line of Daniel Imbro of Stephens. Your line is now open.

Yeah. Thanks. Good morning, everyone. This is Brady on for Daniel. Rusty, I wanted to start by asking about your different end markets. You know, you have talked about how resilient vocational has been in recent years. How did that market end the year? You know, while we talked about how Class 8 fleet sales, you know, probably likely take until the back half to recover. How are you thinking about that vocational side of the business in 2025?

Okay. Yeah. No. We believe that it will still remain strong. I mean, we have not seen, I would say we are starting to fulfill some of that, but there is still strength in vocational. You know? I mean, our construction business, I could possibly see a, I cannot believe I am saying this, a little more in the oilfield pickup, which we have not had. To help offset anything else. The refuse business is still strong. 2025. So, I mean, you know, I see vocational remaining strong. Maybe not as deep or as big a backlog right at the moment, but still strong in demand. Right. So because you had a, you know, like, you had a transmission issue for a while a year ago, that actually pushed, and we were not able to get to all of it. Now we are chewing away at that, but we still got good demand. And, you know, you never know. Like I said, it is crazy for me to think, well, with oil and gas, what the last four years, you know, that was a bad word. But, you know, you are obviously within the current administration there, you are seeing some activity around that sector too, which we have not had. So feel pretty good about it. You know? It is again, though, look. We are not backlogged with, you can, I can go just over the 60 days if you wanted? Okay. It is not like we have got these huge one-year backlogs like we had in 2023. Okay. That is not the case at all. So you know, there is no such thing as allocation. There is plenty of opportunity to build trucks out there right now. Because most factories, I do not believe, are running full tilt at the moment. I mean, they are running. They are running. Shut down the issue, things like that. But they could ramp up build if demand gave them life, which is something remember in this industry, when demand hits that over-the-road side, it happens fast. And it happens really quick. So, you know, as we get into the back half of the year, you know, I would not be surprised to see, you know, I am not going to call for allocation in 2026 yet. But I could see it getting there. A lot has to do with regulations. And things. But back to your recent question, vocational is still strong, man. And so we feel good about it.

Okay. Great. Thanks for that color. I wanted to switch gears a bit for my second question, see if we could touch on medium duty. You know, medium duty has been very strong for you guys in recent years. Could you just talk a little bit about what is driving that strength and what you are expecting from medium duty in 2025?

Sure. What drove that strength? Now listen. Put end of the year, medium duty had a big backlog. Right? They chewed away at it. It all happens. You have to go back when we had supply issues in 2022 and 2023. Because manufacturers that both built both medium and heavy chose to take componentry and put it towards heavy because they make more money on it. Well, that gave the medium duty. So you had pent-up demand. Medium duty was really stretched out. They were not running in this fast and hard. I mean, anybody who does both. Well, guess what? Once Class 8 slowed down last year, Jerome, like, chewed out the medium duty backlog. So medium duty right now is just like Class 8. I can get you one in 60 days. Okay? It is not that hard to get a medium truck at the moment. So while we expect, I mentioned in the call, I know that the ACT has medium duty at 5 something percent. Kenny is a great friend of mine. Not sold on all that right at the moment for 2025, to be honest. This is the first I am being. But I do expect, you know, we are going to have a good year. We have got some, I know in the back half, we have got some good stuff back in the fourth quarter, but that is a particular transaction. And but we still should remain, you know, I expect to be flat if you want to know the truth in medium throughout the year. That would be about where I would think our medium is. So that is wrong. You said, we have got strong results. I expect you to remain strong. Is there a lot more to give this year there? I do not think so. I do not see it right now. But you know, because we have caught up with that pent-up demand that was created by mainly not being the focus, but by Class 8 being the focus of the supply side of. The supply side has caught up. So medium duty has caught up. So but there is still, you know, there is still good demand out there. It is just you do not have these ends up big backlogs like we used to have. So I hope that sends a little color on it. So I am just personally, I am thinking it is going to be probably flat. I think, you know, both sides of it. But I do expect.

Okay. Great. Thanks for the time this morning, Rusty. I will pass it along.

You bet.

Thank you. One moment for our next question. Our next question comes from the line of Avi Jaroslawicz of UBS. Your line is now open.

Hey. Good morning.

Good morning.

It sounds like you are interested in talking about some of the policy uncertainties. So interested in unpacking some of that. So starting with the emissions regulations, and the engine changeover, you know, what are the latest cost conversations with customers looking like around the pre-buy? Are you hearing any more uncertainty or less?

Yeah. Well, I mean, you know, it is interesting. Right? Because you know, you have got to know a map, right, when you go someplace. And you are going into unknown territories, it is always good to have a map where you can go at. Well, we thought we had a very clear map. As to where things were headed, as clear as mud is anyway. As to what, you know, what was going to happen and what happened in 2024 in California. What was going to happen in 2027. Well, the new and I am not going to say I am going to speak like I am a customer. Because I am a customer. Okay? I am the middle guy. I am a customer also. So clarity, not right now. If you look back in the last, oh, back in prior to the new administration coming on, ACF or what it points you trucks, that was for our customer base. They were going to have to roll in electric, you know, BEV trucks and stuff over a time frame. That was thrown out. Okay? Right now, as of last Friday for Valentine's Day, the EPA is challenging ACT or clean truck which affects all the OEMs. Which is how they are going to have to sell this many electric and do this much, you know, all these rules and regulations. I am not going to get in all detail or got a lot of, I got three or four people on my staff that are way more diligent about it than I am. I know just enough to be dangerous. Okay? So that is up in the air. Because it got approved outside of Congress. They are saying it should have been approved in Congress. So they are taking it to Congress. Now how it all sorts itself out, that is the new administration. Which is obviously totally different than the prior administrations. You know? Okay? They are promoting, you know, big promoters. Meanwhile, still, we understand there is an environment issue, but you know, they are staying with, you know, with carbon fuels for all. Right? While we still work on the technology piece, which in truth, is the right thing. So I do not know how it is going to shake out. I do not expect the diesel emissions regs. That are in place to go into place in 2027 to change. I think it could line up. You know, he had a point two and a point was refi. I personally think I am going to be wrong. They will probably end up settling in this. It is just my personal opinion. Can they go on go aligning it at o three five? Well, that is still you have got to clean it up more. Okay? Remember, we are just talking about diesel. It is still diesel. Taking the BEV piece and taking the electric piece and pushing it out. That is what is going to happen. That then taking some of your greenhouse gas stuff and which is tied to the BEV in 2030 and all these other years I expect all that to get stretched out. That is my opinion. Okay? I do expect the new rules of regs around diesel to stay. Now are they going to stay in the same context the way they are written now? Where you have got these huge long warranties on after treatment that have never existed. They take up a lot of the cost. You know? You are talking nobody is really giving a price of it. They are like, all manufacturers all manufacturers wait and then surprise you. Let me know if we are talking about $15,000, $20,000 in, you know, with after treatment. Now a lot of that is around the is written in is because of the warranties. Could those could those change? I hear rumors all the time. That they might, you know, that they might change a lot of that cost. So that would change some of the costing of it. I do not know if it will or it will not. But all those types of issues are what are going to be vetted here very quickly. We are still, we have been cleaning diesel up for a long time. I mean, go back to 1988. Sixty. I said sixty trucks today produced, what, one truck? Produced back then when it comes to knocks and things like that. That is a crazy number to me. We cleaned it up in 2004. We cleaned it up in 2007. We cleaned it up in 2010. So we are going to clean it up again. I do not but we are going to slow down. What those numbers turn out to be, what those warranties, I cannot tell you yet. Because, you know, that was Friday. It was happy Valentine's Day. Later, they just announced the EPA that they are going, you know, and trying to run this all back to Congress. And I but OEMs have spent way too much money on this after treatment stuff. Preparing for this. I do not see it going away. That is just my all we are doing is cleaning up diesel, man. We have done it a lot. We have done it for decades. Okay? So there is nothing. That is the right thing to do. Right thing to do is to do that push out some of these BEV requirements because they are way ahead. I mean, look, we got a hundred and I am sorry. I am just talking blank. We got a hundred and twenty years hundred and twenty years of infrastructure. Around internal combustion. And we are going to change it. In six, seven years. Give me a break. Okay. We do not have a grid. We do not have the infrastructure. There are so many. Is it the right thing? Probably to do long term? Yes. But, also, doing it with automotive is different. Than trucks. Trucks do so many different applications. You know what a car does? I do not care if it is a Kia or a Ferrari. It goes from point A to point B. Okay? That is what the car does. Trucks, I do not care if they are picking up garbage pouring concrete, hanging sides in the oil field. Over the road. They did so many different applications that I expected to be in moldy. From answer when we get there. But if it does not get done in this short period of time. So, you know, there you get Rusty scrambling on about his own thoughts. We will get it done in twenty years. We will get BEV will be more. BEV will be for a lot of applications, you know, around town and this and that and the other. But we do not have the necessary components. I mean, you know, I use this in my simple wells. Some people think it is like plugging in a hair dryer. Let me tell you something. It is not. Okay. It is way more complicated than that because of the grid of an infrastructure and everything. We cannot even catch up on the cars. Right, automobiles will be way easier to do the infraps because of all the different applications. So you are getting a long rambling answer, as I always say, but I expect we are going to go through with the diesel changes. They could tweak them, but if we could tweak the warranties, but we are not going to change flipping the diesel switch again in 2027 because of too much spam. Too much prep. We will go through in some form or fashion. But what will happen is the other stuff will get pushed out to give to give to give our industries time to refine the technology and the things that are needed to do it properly. Okay? We are not there, man. And to do all that we were trying to do it was well, I get I am understand we got to do a better job cleaning the environment up, but we got to do it within the bounds of reality. There is your answer. I think there will be a pre-buy. I do not know how it all shake out to how much because anytime you come with new after treatment and stuff, boy, do I remember 2010. Okay? Everything was dulled as DPS, clogged everywhere, etcetera, etcetera. I am not saying that that will be the case. I am saying there always is. We will be dealing with issues with all the traditional technology. Which is typical. Okay, when you do things like this. That is how it works. But it is something we could work on and do, something we have got a hundred plus years dealing with. Right? So we will figure all that while behind the scenes. We do the right things to get into these other technologies, whether you know, whether it is not everything is going to be electric and hydrogen and fuel cell and all this other while that continues to progress. And then, you know, it will take its place over the next twenty years. That makes sense.

Me and I appreciate shifting over to tariffs. So I know you noticed that you know, the uncertainty around that and the, you know, prospect that it could really increase the price of trucks and squeeze demand. Oh, man. So I guess two things there. One, just you help frame for us what that impact beyond the cost of a new truck? And, also, you know, with the urgency, are you doing anything differently this year in terms of managing your inventory to try to mitigate that risk?

Well, first off, about seventeen days ago, maybe eighteen. On a Saturday. I am good. Are you kidding me? Okay. We are really going to put 25% tariffs on Mexico and Canada. I understand the Chinese part. But the automotive sector. And I am not just talking trucks, there is nothing more tied to Mexico than the automotive sector. Okay? I mean, all the suppliers, all the manufacturers, everybody has got plans down there and stuff. And it is like you got to be kidding me. You know, I understand, you know, I do not understand Sentinel, but I read about it. And I understand the immigration issues, but you are messing with an economy now. Let me tell you. You are, you know, you are talking if it is manufactured down there, you are talking $30,000, $40,000 in a truck. Even the trucks that are manufactured in the US, they will have components for you. You know? If you put a 25% tariff on there, that is probably be another $10,000. Automobiles will be $6,000, $8,000 depending on who and where and what. I mean, it gets always remember that was not detail on the fine print. Right? So I am not the expert on all of that, but I got to tell you, that makes absolutely zero sense to me. I believe I have told everybody since, you know, new administration was announced back in November that, you know, it is a negotiation. I cannot believe that we would go do that. Look. Those factories, it is not like China. Are our factories. I am on the border. I have been on the border. I am more than raised in Texas. Okay? I have the old border for Peterbilt all the way from Tijuana to Brownsville. I understand. We built those but you know the work lands back in the eighties. Okay? There are stuff and more and more and more. I do not see doing that. I just truly cannot see. That we own them. It is not like seventy-five giant. We own those factories. Okay? It just makes absolutely zero sense to me. We need a strong, you know, solid neighbor on the south. And it is just a labor position. We, you know, we build all that stuff out there, but it is all our stuff, man. So it, you know, really does not make any sense to me. Would there be a disruption? Yes. Is there something I can do? Well, first, somebody tell me a date. I got two weeks. Okay. No. I cannot do anything in two weeks. We would just deal with it. But you talk about triple an endless you got to realize, like, Laredo, Texas, that is the biggest port in the United States. I do not care about these ocean ports. There is more freight coming through out of Mexico than the EVA. I am on I-35. I would look up my window right back. Over half the vehicles are trucks. Going up and down the highway. Okay? And it is all, you know, from manufacturing that goes on. It is in the south. And you know, I do not know what we would come up with the workforce to do it all anyway. As we work our way through it. But, you know, I am getting into my own personal views here about all that, but you are going to know because I do not mind telling them. So it just makes no sense to me. I have got to believe it is saber rattling in negotiations. Maybe there will be some man slaps and things like that on the wrist or something. Time not close enough to the government. There is really no what they are thinking. But I do not see doing that with your two bordering neighbors, one to the north and one to the south, the only ones you border. Okay. I do not, I have a hard time making sense out of that personally, especially when we build it all. Okay. So, I mean, we drove all that ourselves. Was not driven by it. How over need that. You know, the people have plans. Yeah. OEMs have contingency plans. Around how they would get around it. But it would be costly. And it would be cumbersome. To implement and take time, but sure they do. You know, when you, you know, OEMs are thinking about it. I they have to. I have to. Yes. I thought about it. But I have a hard time believing we are really going to do this with my twin. Again, that is just my opinion. I could be deadass when I was confusing me. Dead wrong. But you know, do not worry that we thought about it. Behind the scenes. Yes. There are plans as to what we would do. How would we, how we would react. I just have a hard time believing what we are really doing.

That makes sense. Guess moving a little bit away from the uncertainty or up towards what we are seeing today. So I know second half last year, there was a bit of discounting on new truck pricing. And so just wondering if that is something that we should be expecting here for the first half of 2025 as well.

The stuff that we are doing right now, no. I expect most of it is pretty flat. Slight, I mean, slight. Maybe increase. I do not see a lot of discounting. Maybe a one-off deal here or there, but there is not broad-based discounting going on. I mean, we had already taken margin out. Last year. Okay? Somewhere when I say that, you know, the manufacturers and through us, and we have managed to maintain a good blended margin as well. I always tell folks, remember, we also just have the data. We sell medium. We sell used. So we have done that pretty good job. I will keep it over 9% or better. Blended margin. So was new compressed a little bit? Yes. Do I see it getting compressed a whole lot more? No. I think we will be pretty, you know, we have already been, you know, a little bit compressed on it. So I do not, I would say most OEMs what we have been planning on having a pre-buy. Right? So, you know, they were trying to maintain what they felt. Maybe you can look at their margins are off some. You can look at it later in the late back half of last year. There is no question. But do not know how much more there is to take out of that. I think there will be enough demand to keep things pretty flat, to be honest with you, without getting any increases in anything. You know, I expected everything to be pretty flat.

Alright. Very helpful. That is it for me. Appreciate the time. Thank you.

You bet. Thank you, sir.

Thank you. I am showing no further questions at this time. I would now like to turn it back to Rusty Rush for closing remarks.

Okay. I guess, I look forward to talking to everybody in April. This is the shortest time between calls. I am about to talk to everybody in about two months. And thank you for your participation today.