##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2010
 Commission file number 0-20797
 RUSH ENTERPRISES, INC.
  Texas
    
    74-1733016(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)555 IH 35 South, New Braunfels, TX
    
    78130(Address of principal executive offices)
    
    (Zip Code)
 830) 626-5200
  Class A and Class B Common Stock, $.01 par value
    
    NASDAQ Global Select MarketTitle of each class
    
    Name of each exchange on which registered
 None
  o þ
  o þ
  þ o
  o o
 o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller Reporting Company o(Do not check if a smaller reporting company.)
  o þ
 SM
  DOCUMENTS INCORPORATED BY REFERENCE
 Portions of registrants definitive proxy statement for the registrants 2011 Annual Meeting of
Shareholders, to be filed with the Securities and Exchange Commission not later than April 30,
2011, are incorporated by reference into Part III of this Form 10-K .




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##### 



RUSH ENTERPRISES, INC.
 Index to Form 10-K
 Year ended December 31, 2010
 Page No.Part IItem 1 Business
    
    
    2Item 1A Risk Factors
    
    
    13Item 1B Unresolved Staff Comments
    
    
    20Item 2 Properties
    
    
    20Item 3 Legal Proceedings
    
    
    20Part IIItem 5 Market for Registrants Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities
    
    
    21Item 6 Selected Financial Data
    
    
    23Item 7 Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    24Item 7A Quantitative and Qualitative Disclosures about Market Risk
    
    
    38Item 8 Financial Statements and Supplementary Data
    
    
    40Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    71Item 9A Controls and Procedures
    
    
    72Item 9B Other Information
    
    
    73Part IIIItem 10 Directors and Executive Officers of the Registrant
    
    
    74Item 11 Executive Compensation
    
    
    74Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters
    
    
    74Item 13 Certain Relationships and Related Transactions
    
    
    74Item 14 Principal Accountant Fees and Services
    
    
    74Part IVItem 15 Exhibits and Financial Statement Schedules
    
    
    75Exhibit 10.10Exhibit 21.1Exhibit 23.1Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2




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NOTE REGARDING FORWARD-LOOKING STATEMENTS
 Certain statements contained in this Form 10-K (or otherwise made by the Company or on the
Companys behalf from time to time in other reports, filings with the Securities and Exchange
Commission, news releases, conferences, website postings or otherwise) that are not statements
of historical fact constitute forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as
amended(the Exchange Act), notwithstanding that such statements are not specifically
identified. Forward-looking statements include statements about the Companys financial
position, business strategy and plans and objectives of management of the Company for future
operations. These forward-looking statements reflect the best judgments of the Company about
the future events and trends based on the beliefs of the Companys management as well as
assumptions made by and information currently available to the Companys management. Use of
the words may, should, continue, plan, potential, anticipate, believe,
estimate, expect and intend and words or phrases of similar import, as they relate to
the Company or its subsidiaries or Company management, are intended to identify
forward-looking statements but are not the exclusive means of identifying such statements.
Forward-looking statements reflect the current view of the Company with respect to future
events and are subject to risks and uncertainties that could cause actual results to differ
materially from those in such statements. Important factors that could cause actual results to
differ materially from those in the forward-looking statements include, but are not limited
to, those set forth under Item 1ARisk Factors as well as future growth rates and margins for
certain of our products and services, future demand for our products and services, competitive
factors, general economic conditions, cyclicality, market conditions in the new and used
commercial vehicle markets, customer relations, relationships with vendors, the interest rate
environment, governmental regulation and supervision, seasonality, distribution networks,
product introductions and acceptance, technological change, changes in industry practices,
one-time events and other factors described herein and in the Companys quarterly and other
reports filed with the Securities and Exchange Commission (collectively, Cautionary
Statements). Although the Company believes that its expectations are reasonable, it can give
no assurance that such expectations will prove to be correct. Based upon changing conditions,
should any one or more of these risks or uncertainties materialize, or should any underlying
assumptions prove incorrect, actual results may vary materially from those described in any
forward-looking statements. All subsequent written and oral forward-looking statements
attributable to the Company or persons acting on its behalf are expressly qualified in their
entirety by the applicable Cautionary Statements. All forward-looking statements speak only as
the date on which they are made and the Company undertakes no duty to update or revise any
forward-looking statements.
 NOTE REGARDING INCORPORATION BY REFERENCE
 The Securities and Exchange Commission (SEC) allows us to disclose important information to
you by referring you to other documents we have filed with the SEC. The information we refer
to is incorporated by reference into this Form 10-K. Please read that information.
 NOTE REGARDING TRADEMARKS USED IN THIS FORM 10-K
 Peterbilt ® is a registered trademark of Peterbilt Motors Company.
PACCAR ® is a registered trademark of PACCAR, Inc. GMC ® is a registered
trademark of General Motors Corporation. Hino ® is a registered trademark of Hino
Motors, Ltd. UD ® is a registered trademark of UD Truck North America, Ltd.
Isuzu ® is a registered trademark of Isuzu Motors Limited. John Deere ® is
a registered trademark of Deere & Company. Kenworth ® is a registered trademark of
PACCAR, Inc. doing business as Kenworth Truck Company. Volvo ® is a registered
trademark of Volvo Trademark Holding AB. Freightliner ® is a registered trademark of
Freightliner Corporation. Mack ® is a registered trademark of Mack Trucks, Inc.
Navistar ® is a registered trademark of Navistar International Corporation.
Caterpillar ® is a registered trademark of Caterpillar, Inc. PacLease ® is
a registered trademark of PACCAR Leasing Corporation. CitiCapital ® is a registered
trademark of Citicorp. Ford ® is a registered trademark of Ford Motor Company.
Cummins ® is a registered trademark of Cummins Intellectual Property, Inc.
Eaton ® is a registered trademark of Eaton Corporation. Arvin Meritor ® is a registered trademark of Meritor Technology Inc. JPMorgan Chase ® is a
registered trademark of JP Morgan Chase & Co. SAP ® is a registered trademark of
SAP Aktiengesellschaft. International ® is a registered trademark of Navistar
International Transportation Corp. Blue Bird ® is a registered trademark of Blue
Bird Investment Corporation. Autocar ® is a registered trademark of Shem, LLC. IC
Bus ® is a registered trademark of IC Bus, LLC. Collins Bus Corporation ® is a registered trademark of Collins Bus Corporation. Fuso ® is a registered
trademark of Mitsubishi Fuso Truck and Bus Corporation. Workhorse ® is a registered
trademark of Workhorse Custom Chassis, LLC.
  1




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##### Table of Contents



PART I
 
 Item 1.
    
    Business
  Access to Company Information
  Form
10-K,
 General
      Rush Truck Centers.
  2




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##### Table of Contents



Rush Truck Center
    
    Heavy-Duty
    
    Medium-Duty and Bus
    
    
    
    
    
    BodyLocation
    
    Franchise(s)
    
    Franchise(s)
    
    Parts
    
    Service
    
    ShopAlabama:Mobile
    
    Peterbilt
    
    Peterbilt
    
    Yes
    
    Yes
    
    YesArizona:Flagstaff
    
    None
    
    None
    
    Yes
    
    Yes
    
    NoPhoenix
    
    Peterbilt
    
    Peterbilt, Hino
    
    Yes
    
    Yes
    
    YesTucson
    
    Peterbilt
    
    Peterbilt, Hino
    
    Yes
    
    Yes
    
    NoYuma
    
    Peterbilt
    
    Peterbilt
    
    Yes
    
    Yes
    
    NoCalifornia:Escondido
    
    Peterbilt
    
    Peterbilt, Hino
    
    Yes
    
    Yes
    
    NoFontana Heavy-Duty
    
    Peterbilt
    
    Peterbilt
    
    Yes
    
    Yes
    
    YesFontana Medium-Duty
    
    None
    
    Peterbilt, Hino, Isuzu, UD
    
    Yes
    
    Yes
    
    NoPico Rivera
    
    Peterbilt
    
    Peterbilt
    
    Yes
    
    Yes
    
    YesSan Diego
    
    Peterbilt
    
    Peterbilt, Hino
    
    Yes
    
    Yes
    
    YesSan Luis Obispo
    
    None
    
    None
    
    Yes
    
    Yes
    
    NoSylmar
    
    Peterbilt
    
    Peterbilt, UD
    
    Yes
    
    Yes
    
    NoColorado:Denver Heavy-Duty
    
    Peterbilt
    
    Peterbilt
    
    Yes
    
    Yes
    
    YesDenver Medium-Duty
    
    None
    
    Ford, Isuzu
    
    Yes
    
    Yes
    
    NoGreeley
    
    Peterbilt
    
    Peterbilt
    
    Yes
    
    Yes
    
    NoPueblo
    
    Peterbilt
    
    Peterbilt
    
    Yes
    
    Yes
    
    NoFlorida:Haines City
    
    Peterbilt
    
    Peterbilt, Diamond Coach
    
    Yes
    
    Yes
    
    YesJacksonville
    
    Peterbilt
    
    Peterbilt, Hino, Diamond Coach
    
    Yes
    
    Yes
    
    YesOrlando
    
    None
    
    Isuzu
    
    Yes
    
    Yes
    
    NoOrlando
    
    None
    
    Ford
    
    Yes
    
    Yes
    
    YesTampa
    
    Peterbilt
    
    Peterbilt, Diamond Coach
    
    Yes
    
    Yes
    
    NoWinter Garden
    
    Peterbilt
    
    Peterbilt, Isuzu, UD, Diamond Coach
    
    Yes
    
    Yes
    
    NoGeorgia:Atlanta
    
    None
    
    Hino, Isuzu, UD
    
    Yes
    
    Yes
    
    NoIdaho:Boise
    
    International
    
    International, IC Bus, Autocar, Kalmar
    
    Yes
    
    Yes
    
    YesHeyburn
    
    International
    
    International
    
    Yes
    
    Yes
    
    NoIdaho Falls
    
    International
    
    International, IC Bus, Kalmar
    
    Yes
    
    Yes
    
    YesLewiston
    
    International
    
    International
    
    Yes
    
    Yes
    
    NoTwin Falls
    
    International
    
    International
    
    Yes
    
    Yes
    
    NoNew Mexico:Albuquerque
    
    Peterbilt
    
    Peterbilt
    
    Yes
    
    Yes
    
    YesLas Cruces
    
    Peterbilt
    
    Peterbilt
    
    Yes
    
    Yes
    
    No
  3




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##### Table of Contents



Rush Truck Center
    
    Heavy-Duty
    
    Medium-Duty and Bus
    
    
    
    
    
    BodyLocation
    
    Franchise(s)
    
    Franchise(s)
    
    Parts
    
    Service
    
    ShopNorth Carolina:Charlotte
    
    Peterbilt
    
    Peterbilt, Hino, Isuzu
    
    Yes
    
    Yes
    
    NoCharlotte
    
    International
    
    International, Workhorse
    
    Yes
    
    Yes
    
    YesOklahoma:Ardmore
    
    Peterbilt
    
    Peterbilt
    
    Yes
    
    Yes
    
    NoOklahoma City
    
    Peterbilt
    
    Peterbilt, Hino, Ford, Isuzu
    
    Yes
    
    Yes
    
    YesTulsa
    
    Peterbilt
    
    Peterbilt, Hino
    
    Yes
    
    Yes
    
    YesOregon:Ontario
    
    International
    
    International
    
    Yes
    
    Yes
    
    NoTennessee:Nashville
    
    Peterbilt
    
    Peterbilt
    
    Yes
    
    Yes
    
    YesTexas:Abilene
    
    Peterbilt
    
    Peterbilt
    
    Yes
    
    Yes
    
    NoAlice
    
    Peterbilt
    
    Peterbilt, Blue Bird, Elkhart, Diamond Coach
    
    Yes
    
    Yes
    
    NoAustin
    
    Peterbilt
    
    Peterbilt, Hino, Isuzu, UD, Blue Bird, Elkhart, Diamond Coach
    
    Yes
    
    Yes
    
    NoDallas Heavy-Duty
    
    Peterbilt
    
    Peterbilt, Blue Bird, Elkhart, Diamond Coach
    
    Yes
    
    Yes
    
    YesDallas Medium-Duty
    
    None
    
    Peterbilt, Hino, UD, Blue Bird, Elkhart Diamond Coach
    
    Yes
    
    Yes
    
    NoDallas
    
    None
    
    Ford, Isuzu
    
    Yes
    
    Yes
    
    NoEl Paso
    
    Peterbilt
    
    Peterbilt, Hino, Isuzu
    
    Yes
    
    Yes
    
    YesFort Worth
    
    Peterbilt
    
    Peterbilt, UD, Blue Bird, Elkhart, Diamond Coach
    
    Yes
    
    Yes
    
    NoHouston
    
    Peterbilt
    
    Peterbilt, Hino, Blue Bird, Elkhart, Diamond Coach
    
    Yes
    
    Yes
    
    YesLaredo
    
    Peterbilt
    
    Peterbilt, Blue Bird, Elkhart, Diamond Coach
    
    Yes
    
    Yes
    
    YesLufkin
    
    Peterbilt
    
    Peterbilt, Blue Bird, Elkhart, Diamond Coach
    
    Yes
    
    Yes
    
    YesPharr
    
    Peterbilt
    
    Peterbilt, Hino, Blue Bird, Elkhart, Diamond Coach
    
    Yes
    
    Yes
    
    YesSan Antonio
    
    Peterbilt
    
    Peterbilt, Hino, Blue Bird, Elkhart, Diamond Coach
    
    Yes
    
    Yes
    
    YesSealy
    
    Peterbilt
    
    Peterbilt, Isuzu, Blue Bird, Elkhart, Diamond Coach
    
    Yes
    
    Yes
    
    NoTexarkana
    
    Peterbilt
    
    Peterbilt, Hino, Isuzu, Blue Bird, Elkhart, Diamond Coach
    
    Yes
    
    Yes
    
    NoTyler
    
    Peterbilt
    
    Peterbilt, Blue Bird, Elkhart, Diamond Coach
    
    Yes
    
    Yes
    
    NoWaco
    
    Peterbilt
    
    Peterbilt, Hino, Isuzu, Blue Bird, Elkhart, Diamond Coach
    
    Yes
    
    Yes
    
    NoUtah:Helper
    
    International
    
    International
    
    Yes
    
    Yes
    
    NoFarr West
    
    International
    
    International, IC Bus
    
    Yes
    
    Yes
    
    NoSalt Lake City
    
    International
    
    International, IC Bus, Autocar, Mitsubishi Fuso, Workhorse
    
    Yes
    
    Yes
    
    YesSpringville
    
    International
    
    International, Mitsubishi Fuso
    
    Yes
    
    Yes
    
    NoSt. George
    
    International
    
    International, Mitsubishi Fuso
    
    Yes
    
    Yes
    
    No
  4




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Leasing and Rental Services.
 Financial and Insurance Products.
 Industry
  Our Business Strategy
 Operating Strategy.
 
    
    One-Stop Centers. We have developed our commercial vehicle dealerships
as one-stop centers where, at one convenient location, our customers can do the
following: purchase new and used commercial vehicles; finance, lease or rent
commercial vehicles; purchase aftermarket parts and accessories; and have service
performed by certified technicians. We believe that this full-service strategy
also helps to mitigate cyclical economic fluctuations because the parts and
service sales at our dealerships generally tend to be less volatile than our new
and used commercial vehicle sales.
 
    
    Branding Program. We employ a branding program for our dealerships
through distinctive signage and uniform marketing programs to take advantage of
our existing name recognition and to communicate the standardized high quality of
our products and reliability of our services throughout our dealership network.
 
    
    Management by Dealership Units. At each of our dealerships, we operate
one or more of the following departments: new sales, used sales, financial
services, parts, service or body shop. Our general managers measure and manage the
operations of each of our dealerships according to the specific departments
operating at that location. We believe that this system enhances the profitability
of all aspects of a dealership and increases our overall operating margins.
Operating goals for each department at each of our dealerships are established
annually and managers are rewarded for performance.
 
    
    Integrated Management Information Systems. In order to efficiently
operate separate departments within each dealership, we rely upon our management
information systems to determine and monitor appropriate inventory levels and
product mix at each Rush Truck Center. Our parts reordering system assists each
Rush Truck Center in maintaining the proper inventory levels and typically permits
inventory delivery to each location, or directly to customers, within 24 hours
from the time the order is placed. In addition, by actively monitoring market
conditions, assessing product and expansion strategies and remaining abreast of
changes within the market, we are able to proactively address market-by-market
changes by realigning and, if necessary, adding product lines and models.
 Growth Strategy.
 
    
    Expansion Into New Geographic Areas. We plan to continue to expand our
dealership network by acquiring additional dealerships in geographic areas
contiguous to our current operations. We have successfully expanded our presence
from our Texas base into a coast-to-coast network of Rush Truck Centers. We
believe the geographic diversity of our Rush Truck Center network has
significantly
expanded our customer base while reducing the effects of local economic cycles.
Geographic diversification supports the sale of commercial vehicles and parts by
allowing us to allocate our inventory among the geographic regions we serve based on
market demand within these regions.
  5




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
    
    Expansion of Product Offerings. We intend to continue to expand our
product lines within our dealerships by adding product categories that are both
complementary to our existing product lines and well suited to our operating model
such as truck mounted cranes, refuse vehicles and towing vehicles.
 We believe that there are many additional product and service offerings that would
complement our primary product lines. We expect any product category expansion that
we pursue to satisfy our requirements that:
 
    
    the products serve a commercial customer base;
 
    
    the products provide opportunities for incremental income through
related aftermarket sales, service or financing; and
 
    
    Rush operating controls can be implemented to enhance the financial
performance of the business.
 
    
    Open New Rush Truck Centers in Existing Areas of Operation. We
continually evaluate opportunities to increase our market share by adding new Rush
Truck Centers to underserved markets within our current areas of operation. The
introduction of additional Rush Truck Centers enables us to enhance revenues from
our existing customer base as well as increase the awareness of the Rush brand
name for new customers. In identifying new areas for expansion, we analyze the
markets level of new truck registrations, customer buying and leasing trends and
the existence of competing franchises. We also assess the potential performance of
a parts and service center. After a market has been strategically reviewed, we
survey the region for a well-situated location. Whether we acquire existing
dealerships or open a new dealership, we introduce our branding program and
implement our integrated management system.
 Management of Our Dealerships
  Rush Truck Centers
  New Truck Sales
 Rush Truck Centers
  6




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Used Commercial Vehicle Sales
 Commercial Vehicle Parts and Service
   Truck Leasing and Rental
 Financial and Insurance Products
    7




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New and Used Commercial Vehicle Financing
 Sales and Marketing
   Facility Management
 Personnel.
     8




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Purchasing and Suppliers.
 Management Information Systems.
  Distribution and Inventory Management.
 Recent Acquisitions and Disposition
     9




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Competition
  
    
    the accessibility of dealership locations;
 
    
    the number of dealership locations;
 
    
    price, value, quality and design of the products sold; and
 
    
    attention to customer service (including technical service).
  Dealership Agreements
 Peterbilt.
 Other Commercial Vehicle Suppliers.
  10




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Floor Plan Financing
 Trucks.
   Product Warranties
   Trademarks
  Employees
  Seasonality
   11




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Backlog
  Environmental Standards and Other Governmental Regulations
        12




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Item 1A.
    
    Risk Factors
  Risks Related to Our Business
 We are substantially dependent upon PACCAR for the supply of Peterbilt trucks and parts, the
sale of which generates the majority of our revenues.
  
    
    maintaining our relationship with PACCAR;
 
    
    the manufacture and delivery of competitively-priced, high quality Peterbilt trucks
and parts by PACCAR in quantities sufficient to meet our requirements;
 
    
    the overall success of PACCAR and Peterbilt;
  13




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
    
    PACCARs continuation of its Peterbilt division;
 
    
    the goodwill associated with the Peterbilt trademark, which can be adversely
affected by decisions made by PACCAR and the owners of other Peterbilt dealerships;
and
 
    
    PACCAR and Peterbilts ability to offer vehicles that meet federal and state
emissions requirements.
  Our results of operations and financial condition have been adversely affected by the
conditions in the credit markets and unfavorable economic conditions in the United States.
   Our growth is subject to a number of economic risks.
     We may be required to obtain additional financing to maintain adequate inventory levels.
   14




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Changes in interest rates could have a material adverse effect on our profitability.
  Our dealership agreements may be terminable upon a change of control and we cannot control
whether our controlling shareholder and management maintain their current positions.
  If state dealer laws are repealed or weakened, our dealerships will be more susceptible to
termination, nonrenewal or renegotiation of their dealership agreements.
  Our dealership agreements have relatively short terms which could result in non-renewal or
imposition of less favorable terms upon renewal.
   15




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We depend on relationships with suppliers for sales incentives, discounts and similar programs
which are material to our operations.
  Substantial competition may affect our profitability.
  We could incur substantial business interruptions during our dealer management system
conversion
  If we lose key personnel or are unable to attract additional qualified personnel, our business
could be adversely affected because we rely on the industry knowledge and relationships of our
key personnel.
  Natural disasters and adverse weather events can disrupt our business.
   16




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The dollar amount of our backlog, as stated at any given time, is not necessarily indicative
of our future earnings.
   Our dealerships are subject to federal, state and local environmental regulations that may
result in claims and liabilities, which could be material.
    We are dependent on the ongoing success of the manufacturers we represent and adverse
conditions affecting the manufacturers we represent may negatively impact our revenues and
profitability.
   17




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Climate change legislation or regulations restricting emissions of greenhouse gases could
result in increased costs and reduced demand for our products and services.
  Negative conditions in global credit markets may impair our investments in auction rate
securities.
    18




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An impairment in the carrying value of goodwill and other indefinite-lived intangible assets
could negatively affect our operating results.
  Risks Related to Our Common Stock
 We are controlled by a single shareholder and his affiliates.
  The Class A common stock has limited voting power.
  Our dealership agreements could discourage another company from acquiring us and impede our
ability to issue additional stock to raise capital or as consideration for future
acquisitions.
    19




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Our Class B common stock has a low average daily trading volume. As a result, sales of our
Class B common stock could cause the market price of our Class B common stock to drop, and it
may be difficult for a stockholder to liquidate its position in our Class B common stock
quickly without adversely affecting the market price of such shares.
  
 Item 1B.
    
    Unresolved Staff Comments
  
 Item 2.
    
    Properties
     
 Item 3.
    
    Legal Proceedings
   20




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PART II
 
 Item 5.
    
    Market for Registrants Common Equity, Related Shareholder Matters, and Issuer Purchases
of Equity Securities
 SM
 SM
 2010
    
    
    2009High
    
    
    Low
    
    
    High
    
    
    LowClass A Common StockFirst Quarter
    
    $
    13.34
    
    
    $
    10.67
    
    
    $
    10.80
    
    
    $
    6.00Second Quarter
    
    
    16.94
    
    
    
    13.21
    
    
    
    14.91
    
    
    
    8.27Third Quarter
    
    
    15.59
    
    
    
    12.40
    
    
    
    14.88
    
    
    
    10.16Fourth Quarter
    
    
    21.22
    
    
    
    14.21
    
    
    
    13.04
    
    
    
    10.24Class B Common StockFirst Quarter
    
    $
    12.30
    
    
    $
    9.17
    
    
    $
    10.08
    
    
    $
    5.55Second Quarter
    
    
    14.84
    
    
    
    10.91
    
    
    
    12.84
    
    
    
    7.44Third Quarter
    
    
    14.04
    
    
    
    10.45
    
    
    
    12.71
    
    
    
    8.65Fourth Quarter
    
    
    20.21
    
    
    
    12.80
    
    
    
    10.93
    
    
    
    8.41
     21




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Maximum Number (orTotal Number of
    
    
    Approximate DollarShares Purchased
    
    
    Value) of Shares thatTotal Number
    
    
    Average Price
    
    
    as Part of Publicly
    
    
    May Yet Be Purchasedof Shares
    
    
    Paid Per
    
    
    Announced Plans
    
    
    Under the Plans orPeriod
    
    Purchased
    
    
    Share
    
    
    or Programs
    
    
    Programs (1)October 1
 31, 2010
    
    
    
    
    
    $
    0.00
    
    
    
    
    
    
    
    November 1
 6, 2010
    
    
    
    
    
    
    0.00
    
    
    
    
    
    
    
    4th Quarter Total
    
    
    
    
    
    $
    0.00
    
    
    
    
    
    
    
    
 (1)
    
    On November 6, 2010, the Companys Board of Directors terminated its $20,000,000 share
repurchase program initially approved by the Companys Board of Directors on July 22, 2008.
No share repurchases occurred in 2010 prior to the termination of this program. From the
inception of the share repurchase program, the Company acquired 1,639,843 shares of its Class
B common stock at a cost of $17.9 million pursuant to the program.   22




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Item 6.
    
    Selected Financial Data
  Year Ended December 31,2010
    
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006(in thousands, except per share amounts)SUMMARY OF INCOME STATEMENT DATARevenuesNew and used commercial vehicle sales
    
    $
    926,584
    
    
    $
    738,705
    
    
    $
    1,041,189
    
    
    $
    1,393,253
    
    
    $
    1,780,418Parts and service sales
    
    
    489,259
    
    
    
    395,133
    
    
    
    457,669
    
    
    
    459,985
    
    
    
    424,766Lease and rental
    
    
    67,423
    
    
    
    53,710
    
    
    
    54,813
    
    
    
    52,103
    
    
    
    41,776Finance and insurance
    
    
    7,922
    
    
    
    7,468
    
    
    
    11,801
    
    
    
    20,921
    
    
    
    18,453Other
    
    
    6,739
    
    
    
    5,437
    
    
    
    5,721
    
    
    
    7,387
    
    
    
    7,294Total revenues
    
    
    1,497,927
    
    
    
    1,200,453
    
    
    
    1,571,193
    
    
    
    1,933,649
    
    
    
    2,272,707Cost of products sold
    
    
    1,213,037
    
    
    
    984,812
    
    
    
    1,291,001
    
    
    
    1,600,270
    
    
    
    1,936,164Gross profit
    
    
    284,890
    
    
    
    215,641
    
    
    
    280,192
    
    
    
    333,379
    
    
    
    336,543Selling, general and administrative
    
    
    227,467
    
    
    
    192,296
    
    
    
    218,775
    
    
    
    231,877
    
    
    
    220,704Depreciation and amortization
    
    
    15,720
    
    
    
    15,890
    
    
    
    15,273
    
    
    
    14,377
    
    
    
    12,522Gain on sale of assets
    
    
    (36
    )
    
    
    162
    
    
    
    128
    
    
    
    199
    
    
    
    5Operating income
    
    
    41,667
    
    
    
    7,617
    
    
    
    46,272
    
    
    
    87,324
    
    
    
    103,322Interest expense, net
    
    
    5,363
    
    
    
    5,695
    
    
    
    7,230
    
    
    
    14,049
    
    
    
    14,888Income from continuing operations
before income
taxes
    
    
    36,304
    
    
    
    1,922
    
    
    
    39,042
    
    
    
    73,275
    
    
    
    88,434Provision (benefit) for income taxes
    
    
    11,737
    
    
    
    (3,173
    )
    
    
    13,864
    
    
    
    26,984
    
    
    
    33,079Income from continuing operations
    
    
    24,567
    
    
    
    5,095
    
    
    
    25,178
    
    
    
    46,291
    
    
    
    55,355Income from discontinued operations,
net of taxes
    
    
    6,715
    
    
    
    789
    
    
    
    3,687
    
    
    
    5,201
    
    
    
    3,431Net income
    
    $
    31,282
    
    
    $
    5,884
    
    
    $
    28,865
    
    
    $
    51,492
    
    
    $
    58,786Earnings per common share  Basic:Income from continuing operations
    
    $
    0.66
    
    
    $
    0.14
    
    
    $
    0.66
    
    
    $
    1.22
    
    
    $
    1.48Net income
    
    $
    0.84
    
    
    $
    0.16
    
    
    $
    0.76
    
    
    $
    1.35
    
    
    $
    1.57Earnings per common share  Diluted:Income from continuing operations
    
    $
    0.64
    
    
    $
    0.14
    
    
    $
    0.65
    
    
    $
    1.19
    
    
    $
    1.46Net income
    
    $
    0.82
    
    
    $
    0.16
    
    
    $
    0.75
    
    
    $
    1.33
    
    
    $
    1.55Weighted average shares outstanding:Basic
    
    
    37,307
    
    
    
    37,066
    
    
    
    38,089
    
    
    
    38,059
    
    
    
    37,476Diluted
    
    
    38,218
    
    
    
    37,597
    
    
    
    38,587
    
    
    
    38,746
    
    
    
    37,890
  23




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##### Table of Contents



Year Ended December 31,2010
    
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006OPERATING DATAUnit vehicle sales New vehicles
    
    
    7,680
    
    
    
    6,615
    
    
    
    9,289
    
    
    
    12,712
    
    
    
    16,492Used vehicles
    
    
    3,461
    
    
    
    2,875
    
    
    
    3,234
    
    
    
    4,101
    
    
    
    4,005Total unit vehicles sales
    
    
    11,141
    
    
    
    9,490
    
    
    
    12,523
    
    
    
    16,813
    
    
    
    20,497Truck lease and rental units (including units
under contract maintenance)
    
    
    3,809
    
    
    
    3,033
    
    
    
    2,570
    
    
    
    2,404
    
    
    
    2,345
 December 31,2010
    
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006(in thousands)BALANCE SHEET DATAWorking capital
    
    $
    143,778
    
    
    $
    164,165
    
    
    $
    177,117
    
    
    $
    197,805
    
    
    $
    156,297Inventories
    
    
    321,933
    
    
    
    252,219
    
    
    
    343,032
    
    
    
    345,568
    
    
    
    470,705Assets held for sale
    
    
    
    
    
    
    22,719
    
    
    
    24,479
    
    
    
    25,881
    
    
    
    18,956Total assets
    
    
    1,167,933
    
    
    
    977,297
    
    
    
    1,056,790
    
    
    
    1,031,591
    
    
    
    1,128,410Floor plan notes payable
    
    
    237,810
    
    
    
    189,256
    
    
    
    282,702
    
    
    
    273,653
    
    
    
    446,354Long-term debt, including current portion
    
    
    252,129
    
    
    
    209,502
    
    
    
    209,677
    
    
    
    198,945
    
    
    
    192,124Capital
lease obligations, including current portion
    
    
    42,202
    
    
    
    34,444
    
    
    
    14,820
    
    
    
    17,543
    
    
    
    17,732Shareholders equity
    
    
    464,919
    
    
    
    426,225
    
    
    
    416,041
    
    
    
    399,577
    
    
    
    339,608
 
 Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
 General
      24




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##### Table of Contents



Pending Acquisition
 ®
 Key Performance Indicator
 Absorption Rate.
 Critical Accounting Policies and Estimates
  Inventories
   25




---



##### Table of Contents



Goodwill
       Finance and Insurance Revenue Recognition
   26




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##### Table of Contents



Insurance Accruals
   Accounting for Income Taxes
     27




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##### Table of Contents



Derivative Instruments and Hedging Activities
  .
 Results of Operations
  Year Ended December 31,2010
    
    
    2009
    
    
    2008New and used commercial vehicle sales
    
    
    61.9
    %
    
    
    61.5
    %
    
    
    66.3
    %Parts and service sales
    
    
    32.7
    
    
    
    32.9
    
    
    
    29.1Lease and rental
    
    
    4.5
    
    
    
    4.5
    
    
    
    3.5Finance and insurance
    
    
    0.5
    
    
    
    0.6
    
    
    
    0.8Other
    
    
    0.4
    
    
    
    0.5
    
    
    
    0.3Total revenues
    
    
    100.0
    
    
    
    100.0
    
    
    
    100.0Cost of products sold
    
    
    81.0
    
    
    
    82.0
    
    
    
    82.2Gross profit
    
    
    19.0
    
    
    
    18.0
    
    
    
    17.8Selling, general and administrative
    
    
    15.2
    
    
    
    16.0
    
    
    
    13.9Depreciation and amortization
    
    
    1.0
    
    
    
    1.3
    
    
    
    1.0Operating income
    
    
    2.8
    
    
    
    0.7
    
    
    
    2.9Interest expense, net
    
    
    0.4
    
    
    
    0.5
    
    
    
    0.4Income from continuing operations before income taxes
    
    
    2.4
    
    
    
    0.2
    
    
    
    2.5Provision (benefit) for income taxes
    
    
    0.8
    
    
    
    (0.2
    )
    
    
    0.9Income from continuing operations
    
    
    1.6
    
    
    
    0.4
    
    
    
    1.6Income from discontinued operations
    
    
    0.4
    
    
    
    0.1
    
    
    
    0.2Net income
    
    
    2.0
    %
    
    
    0.5
    %
    
    
    1.8
    %
  28




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##### Table of Contents



% Change2010
    
    
    2009vs
    
    
    vs2010
    
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Vehicle unit sales:New heavy-duty vehicles
    
    
    4,746
    
    
    
    3,972
    
    
    
    5,516
    
    
    
    19.5
    %
    
    
    -28.0
    %New medium-duty vehicles
    
    
    2,934
    
    
    
    2,643
    
    
    
    3,773
    
    
    
    11.0
    %
    
    
    -29.8
    %Total new vehicle unit sales
    
    
    7,680
    
    
    
    6,615
    
    
    
    9,289
    
    
    
    16.1
    %
    
    
    -28.8
    %Used vehicles sales
    
    
    3,461
    
    
    
    2,875
    
    
    
    3,234
    
    
    
    20.4
    %
    
    
    -11.1
    %Vehicle revenue:New heavy-duty vehicles
    
    $
    595.4
    
    
    $
    467.1
    
    
    $
    665.5
    
    
    
    27.5
    %
    
    
    -29.8
    %New medium-duty vehicles
    
    
    190.1
    
    
    
    163.7
    
    
    
    222.1
    
    
    
    16.1
    %
    
    
    -26.3
    %Total new vehicle revenue
    
    $
    785.5
    
    
    $
    630.8
    
    
    $
    887.6
    
    
    
    24.5
    %
    
    
    -28.9
    %Used vehicle revenue
    
    $
    139.0
    
    
    $
    106.5
    
    
    $
    149.9
    
    
    
    30.5
    %
    
    
    -29.0
    %Other vehicle revenue(1)
    
    $
    2.1
    
    
    $
    1.4
    
    
    $
    3.7
    
    
    
    50.0
    %
    
    
    -62.2
    %Truck dealership absorption rate:
    
    
    105.5
    %
    
    
    95.7
    %
    
    
    105.5
    %
    
    
    10.2
    %
    
    
    -9.3
    %
 (1)
    
    Includes sales of glider kits, truck bodies, trailers and other new equipment. Industry
  Heavy-Duty Truck Market
    29




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##### Table of Contents



Medium-Duty Truck Market
   Year Ended December 31, 2010 Compared to Year Ended December 31, 2009
 Revenues
       30




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##### Table of Contents



Gross Profit
        31




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##### Table of Contents



Selling, General and Administrative Expenses
  Interest Expense, Net
  Income from Continuing Operations before Income Taxes
  Income Taxes
  Income from Discontinued Operations, net
  Year Ended December 31, 2009 Compared to Year Ended December 31, 2008
 Revenues
   32




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##### Table of Contents



Gross Profit
        33




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##### Table of Contents



Selling, General and Administrative Expenses
  Interest Expense, Net
  Income from Continuing Operations before Income Taxes
  Income Taxes
  Income from Discontinued Operations, net
  Effects of Inflation
  Liquidity and Capital Resources
    34




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##### Table of Contents



Cash Flows
   35




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##### Table of Contents



Cash Flows from Operating Activities
     Year Ended December 31,2010
    
    
    2009Net cash provided by operating activities (GAAP)
    
    $
    66,433
    
    
    $
    150,293(Payments) draws on floor plan notes payable
    
    
    43,724
    
    
    
    (93,446
    )Adjusted Cash Flows from Operating Activities (Non-GAAP)
    
    $
    110,157
    
    
    $
    56,847
 Cash Flows from Investing Activities
    36




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##### Table of Contents



Cash Flows from Financing Activities
     Cyclicality
  Off-Balance Sheet Arrangements
   37




---



##### Table of Contents



Contractual Obligations
  Payments Due by PeriodLess than 1
    
    
    1-3
    
    
    3-5
    
    
    More than 5Contractual Obligations
    
    Total
    
    
    year
    
    
    years
    
    
    years
    
    
    years(in thousands)Long-term debt obligations (1)
    
    $
    252,129
    
    
    $
    62,279
    
    
    $
    95,582
    
    
    $
    81,668
    
    
    $
    12,600Capital lease obligations(2)
    
    
    46,548
    
    
    
    9,186
    
    
    
    18,470
    
    
    
    13,836
    
    
    
    5,056Operating lease obligations(3)
    
    
    34,493
    
    
    
    7,233
    
    
    
    10,088
    
    
    
    5,621
    
    
    
    11,551Floor plan debt obligation
    
    
    237,810
    
    
    
    237,810
    
    
    
    
    
    
    
    
    
    
    
    Interest obligations (4)
    
    
    40,848
    
    
    
    20,158
    
    
    
    14,551
    
    
    
    5,782
    
    
    
    357Purchase obligations(5)
    
    
    6,062
    
    
    
    5,126
    
    
    
    936
    
    
    
    
    
    
    
    Total
    
    $
    617,890
    
    
    $
    341,792
    
    
    $
    139,627
    
    
    $
    106,907
    
    
    $
    29,564
 
 (1)
    
    Refer to Note 8 of Notes to Consolidated Financial Statements.(2)
    
    Refer to Note 10 of Notes to Consolidated Financial Statements. Amounts include interest.(3)
    
    Refer to Note 10 of Notes to Consolidated Financial Statements.(4)
    
    In computing interest expense, the Company used its weighted average interest rate
outstanding on fixed rate debt to estimate its interest expense on fixed rate debt. The
Company used its weighted average variable interest rate on outstanding variable rate debt at
December 31, 2010 and added 0.25 percent per year to estimate its interest expense on variable
rate debt.(5)
    
    Purchase obligations represent non-cancelable contractual obligations at December 31, 2010
related to the Companys SAP implementation and the construction contract for the dealership
in Fort Worth, Texas. 
 Item 7A.
    
    Quantitative and Qualitative Disclosures about Market Risk
     38




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39




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##### Table of Contents



Item 8.
    
    Financial Statements and Supplementary Data
 Report of Independent Registered Public Accounting Firm
    
    
    41Consolidated Balance Sheets as of December 31, 2010 and 2009
    
    
    42Consolidated Statements of Income for the Years Ended December 31, 2010, 2009 and 2008
    
    
    43Consolidated Statements of Shareholders Equity for the Years Ended December 31, 2010, 2009 and 2008
    
    
    44Consolidated Statements of Cash Flows for the Years Ended December 31, 2010, 2009 and 2008
    
    
    45Notes to Consolidated Financial Statements
    
    
    46
  40




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41




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##### Table of Contents



RUSH ENTERPRISES, INC. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
  December 31,2010
    
    
    2009AssetsCurrent assets:Cash and cash equivalents
    
    $
    168,976
    
    
    $
    149,095Accounts receivable, net
    
    
    43,513
    
    
    
    38,869Inventories, net
    
    
    321,933
    
    
    
    252,219Prepaid expenses and other
    
    
    14,104
    
    
    
    3,650Assets held for sale
    
    
    
    
    
    
    22,719Deferred income taxes, net
    
    
    10,281
    
    
    
    11,414Total current assets
    
    
    558,807
    
    
    
    477,966Investments
    
    
    7,575
    
    
    
    7,575Property and equipment, net
    
    
    445,919
    
    
    
    353,841Goodwill, net
    
    
    150,388
    
    
    
    136,761Other assets, net
    
    
    5,244
    
    
    
    1,154Total assets
    
    $
    1,167,933
    
    
    $
    977,297Liabilities and shareholders equityCurrent liabilities:Floor plan notes payable
    
    $
    237,810
    
    
    $
    189,256Current maturities of long-term debt
    
    
    62,279
    
    
    
    55,545Current maturities of capital lease obligations
    
    
    7,971
    
    
    
    5,730Trade accounts payable
    
    
    37,933
    
    
    
    22,427Accrued expenses
    
    
    69,036
    
    
    
    40,843Total current liabilities
    
    
    415,029
    
    
    
    313,801Long-term debt, net of current maturities
    
    
    189,850
    
    
    
    153,957Capital lease obligations, net of current maturities
    
    
    34,231
    
    
    
    28,714Other long-term liabilities
    
    
    364
    
    
    
    Deferred income taxes, net
    
    
    63,540
    
    
    
    54,600Shareholders equity:Preferred stock, par value $.01 per share; 1,000,000
shares authorized; 0 shares outstanding in 2010 and
2009
    
    
    
    
    
    
    Common stock, par value $.01 per share; 60,000,000
class A shares and 20,000,000 class B shares
authorized; 26,798,707 class A shares and 10,700,044
class B shares outstanding in 2010; and 26,437,848
class A shares and 10,689,375 class B shares
outstanding in 2009
    
    
    391
    
    
    
    388Additional paid-in capital
    
    
    195,747
    
    
    
    188,116Treasury stock, at cost: 1,639,843 class B shares
    
    
    (17,948
    )
    
    
    (17,948
    )Retained earnings
    
    
    286,951
    
    
    
    255,669Accumulated other comprehensive loss, net of tax
    
    
    (222
    )
    
    
    Total shareholders equity
    
    
    464,919
    
    
    
    426,225Total liabilities and shareholders equity
    
    $
    1,167,933
    
    
    $
    977,297
   42




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##### Table of Contents



RUSH ENTERPRISES, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF INCOME
  Year Ended December 31,2010
    
    
    2009
    
    
    2008Revenues:New and used commercial vehicle sales
    
    $
    926,584
    
    
    $
    738,705
    
    
    $
    1,041,189Parts and service sales
    
    
    489,259
    
    
    
    395,133
    
    
    
    457,669Lease and rental
    
    
    67,423
    
    
    
    53,710
    
    
    
    54,813Finance and insurance
    
    
    7,922
    
    
    
    7,468
    
    
    
    11,801Other
    
    
    6,739
    
    
    
    5,437
    
    
    
    5,721Total revenue
    
    
    1,497,927
    
    
    
    1,200,453
    
    
    
    1,571,193Cost of products sold:New and used commercial vehicle sales
    
    
    854,879
    
    
    
    695,334
    
    
    
    973,404Parts and service sales
    
    
    300,783
    
    
    
    241,933
    
    
    
    270,754Lease and rental
    
    
    57,375
    
    
    
    47,545
    
    
    
    46,843Total cost of products sold
    
    
    1,213,037
    
    
    
    984,812
    
    
    
    1,291,001Gross profit
    
    
    284,890
    
    
    
    215,641
    
    
    
    280,192Selling, general and administrative
    
    
    227,467
    
    
    
    192,296
    
    
    
    218,775Depreciation and amortization
    
    
    15,720
    
    
    
    15,890
    
    
    
    15,273(Loss) gain on sale of assets
    
    
    (36
    )
    
    
    162
    
    
    
    128Operating income
    
    
    41,667
    
    
    
    7,617
    
    
    
    46,272Interest income (expense):Interest income
    
    
    127
    
    
    
    54
    
    
    
    2,636Interest expense
    
    
    (5,490
    )
    
    
    (5,749
    )
    
    
    (9,866
    )Total interest expense, net
    
    
    5,363
    
    
    
    5,695
    
    
    
    7,230Income from continuing operations before taxes
    
    
    36,304
    
    
    
    1,922
    
    
    
    39,042Provision (benefit) for income taxes
    
    
    11,737
    
    
    
    (3,173
    )
    
    
    13,864Income from continuing operations
    
    
    24,567
    
    
    
    5,095
    
    
    
    25,178Income from discontinued operations, net of tax
    
    
    6,715
    
    
    
    789
    
    
    
    3,687Net income
    
    $
    31,282
    
    
    $
    5,884
    
    
    $
    28,865Earnings per common share  Basic:Income from continuing operations
    
    $
    0.66
    
    
    $
    0.14
    
    
    $
    0.66Net income
    
    $
    0.84
    
    
    $
    0.16
    
    
    $
    0.76Earnings per common share  Diluted:Income from continuing operations
    
    $
    0.64
    
    
    $
    0.14
    
    
    $
    0.65Net income
    
    $
    0.82
    
    
    $
    0.16
    
    
    $
    0.75
   43




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##### Table of Contents



RUSH ENTERPRISES, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY  (In Thousands)
 Common Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    AccumulatedShares
    
    
    $0.01
    
    
    Additional
    
    
    
    
    
    
    
    
    
    
    OtherOutstanding
    
    
    Par
    
    
    Paid-In
    
    
    Treasury
    
    
    Retained
    
    
    ComprehensiveClass A
    
    
    Class B
    
    
    Value
    
    
    Capital
    
    
    Stock
    
    
    Earnings
    
    
    Loss
    
    
    TotalBalance, December 31, 2007
    
    
    26,071
    
    
    
    12,265
    
    
    $
    383
    
    
    $
    178,274
    
    
    $
    
    
    
    $
    220,920
    
    
    $
    
    
    
    $
    399,577Stock options exercised
(including tax benefit of $791)
    
    
    130
    
    
    
    60
    
    
    
    2
    
    
    
    1,295
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,297Stock-based compensation related
to stock options and employee
stock purchase plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,632
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,632Issuance of common stock under
employee stock purchase plan
    
    
    55
    
    
    
    
    
    
    
    1
    
    
    
    617
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    618Common stock repurchases
    
    
    
    
    
    
    (1,640
    )
    
    
    
    
    
    
    
    
    
    
    (17,948
    )
    
    
    
    
    
    
    
    
    
    
    (17,948
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28,865
    
    
    
    
    
    
    
    28,865Balance, December 31, 2008
    
    
    26,256
    
    
    
    10,685
    
    
    
    386
    
    
    
    183,818
    
    
    
    (17,948
    )
    
    
    249,785
    
    
    
    
    
    
    
    416,041Stock options exercised
(including tax effect of ($191))
    
    
    23
    
    
    
    4
    
    
    
    
    
    
    
    (55
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (55
    )Stock-based compensation related
to stock options, restricted
shares and employee stock
purchase plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,664
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,664Vesting of restricted share awards
    
    
    68
    
    
    
    
    
    
    
    1
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Issuance of common stock under
employee stock purchase plan
    
    
    91
    
    
    
    
    
    
    
    1
    
    
    
    690
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    691Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,884
    
    
    
    
    
    
    
    5,884Balance, December 31, 2009
    
    
    26,438
    
    
    
    10,689
    
    
    
    388
    
    
    $
    188,116
    
    
    
    (17,948
    )
    
    
    255,669
    
    
    
    
    
    
    
    426,225Stock options exercised
(including tax benefit of $885)
    
    
    212
    
    
    
    11
    
    
    
    2
    
    
    
    2,486
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,488Stock-based compensation related
to stock options, restricted
shares and employee stock
purchase plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,468
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,468Vesting of restricted share awards
    
    
    83
    
    
    
    
    
    
    
    1
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Issuance of common stock under
employee stock purchase plan
    
    
    66
    
    
    
    
    
    
    
    
    
    
    
    678
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    678Fair value adjustment of interest
rate swaps, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (222
    )
    
    
    (222
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31,282
    
    
    
    
    
    
    
    31,282Balance, December 31, 2010
    
    
    26,799
    
    
    
    10,700
    
    
    $
    391
    
    
    $
    195,747
    
    
    $
    (17,948
    )
    
    $
    286,951
    
    
    $
    (222
    )
    
    $
    464,919
   44




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##### Table of Contents



RUSH ENTERPRISES, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
  Year Ended December 31,2010
    
    
    2009
    
    
    2008Cash flows from operating activities:Net income
    
    $
    31,282
    
    
    $
    5,884
    
    
    $
    28,865Adjustments to reconcile net income to net cash used in
operating activities, net of acquisitions-Depreciation and amortization
    
    
    45,920
    
    
    
    40,698
    
    
    
    38,508Gain on sale of property and equipment, net
    
    
    (36
    )
    
    
    (160
    )
    
    
    (276
    )Gain on disposition of equipment centers
    
    
    (10,091
    )
    
    
    
    
    
    
    Stock-based compensation expense related to employee stock
options and employee stock purchases
    
    
    4,468
    
    
    
    3,664
    
    
    
    3,632Provision (benefit) for deferred income tax expense
    
    
    10,215
    
    
    
    (2,980
    )
    
    
    9,944Excess tax provision (benefits) from stock-based compensation
    
    
    (885
    )
    
    
    191
    
    
    
    (791
    )Change in accounts receivable, net
    
    
    (217
    )
    
    
    16,405
    
    
    
    (4,821
    )Change in inventories
    
    
    (48,548
    )
    
    
    104,450
    
    
    
    30,057Change in prepaid expenses and other, net
    
    
    (10,252
    )
    
    
    (281
    )
    
    
    (1,670
    )Change in trade accounts payable
    
    
    15,331
    
    
    
    (9,103
    )
    
    
    (8,922
    )Change in accrued expenses
    
    
    29,246
    
    
    
    (8,473
    )
    
    
    (11,467
    )Net cash provided by operating activities
    
    
    66,433
    
    
    
    150,295
    
    
    
    83,059Cash flows from investing activities:Purchase of investments
    
    
    
    
    
    
    
    
    
    
    (355,575
    )Proceeds from the sale of investments
    
    
    
    
    
    
    
    
    
    
    348,000Acquisition of property and equipment
    
    
    (84,303
    )
    
    
    (50,485
    )
    
    
    (68,160
    )Proceeds from the sale of property and equipment
    
    
    305
    
    
    
    481
    
    
    
    1,487Business acquisitions
    
    
    (39,268
    )
    
    
    
    
    
    
    (37,397
    )Proceeds from disposition of equipment centers
    
    
    26,234
    
    
    
    
    
    
    
    Other
    
    
    325
    
    
    
    246
    
    
    
    602Net cash used in investing activities
    
    
    (96,707
    )
    
    
    (49,758
    )
    
    
    (111,043
    )Cash flows from financing activities:(Payments) draws on floor plan notes payable, net
    
    
    43,724
    
    
    
    (93,446
    )
    
    
    5,864Proceeds from long-term debt
    
    
    66,614
    
    
    
    50,417
    
    
    
    46,728Principal payments on long-term debt
    
    
    (55,575
    )
    
    
    (50,591
    )
    
    
    (43,344
    )Principal payments on capital lease obligations
    
    
    (7,595
    )
    
    
    (4,693
    )
    
    
    (5,672
    )Proceeds from issuance of shares relating to employee stock
options
and employee stock purchases
    
    
    2,281
    
    
    
    827
    
    
    
    1,124Excess tax (provision) benefits from stock-based compensation
    
    
    885
    
    
    
    (191
    )
    
    
    791Purchase of treasury stock
    
    
    
    
    
    
    
    
    
    
    (17,948
    )Debt issuance costs
    
    
    (179
    )
    
    
    (176
    )
    
    
    (157
    )Net cash provided by (used in) financing activities
    
    
    50,155
    
    
    
    (97,853
    )
    
    
    (12,614
    )Net increase (decrease) in cash and cash equivalents
    
    
    19,881
    
    
    
    2,684
    
    
    
    (40,598
    )Cash and cash equivalents, beginning of year
    
    
    149,095
    
    
    
    146,411
    
    
    
    187,009Cash and cash equivalents, end of year
    
    $
    168,976
    
    
    $
    149,095
    
    
    $
    146,411Supplemental disclosure of cash flow information:Cash paid during the year for:Interest
    
    $
    13,264
    
    
    $
    14,298
    
    
    $
    16,605Income taxes, net of refunds
    
    $
    7,544
    
    
    $
    2,392
    
    
    $
    6,387Noncash investing and financing activities:Note receivable related to disposition of equipment centers
    
    $
    4,453
    
    
    $
    
    
    
    $
    Assets acquired under capital leases
    
    $
    15,353
    
    
    $
    24,317
    
    
    $
    2,949
   45




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##### Table of Contents



RUSH ENTERPRISES, INC. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 ORGANIZATION AND OPERATIONS
   SIGNIFICANT ACCOUNTING POLICIES
 Principles of Consolidation
  Estimates in Financial Statements
  Cash and Cash Equivalents
  Allowance for Doubtful Receivables and Repossession Losses
  Inventories
   46




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##### Table of Contents



Property and Equipment
  Estimated Life2010
    
    
    2009
    
    
    (Years)Land
    
    $
    60,032
    
    
    $
    45,432
    
    
    
    Buildings and improvements
    
    
    143,989
    
    
    
    93,755
    
    
    
    31  39Leasehold improvements
    
    
    21,164
    
    
    
    20,584
    
    
    
    2  39Machinery and shop equipment
    
    
    31,287
    
    
    
    27,337
    
    
    
    5  20Furniture, fixtures and computers
    
    
    29,812
    
    
    
    26,037
    
    
    
    3  15Transportation equipment
    
    
    31,611
    
    
    
    28,464
    
    
    
    2  15Lease and rental vehicles
    
    
    258,847
    
    
    
    207,820
    
    
    
    2  8Construction in progress
    
    
    37,513
    
    
    
    46,082Accumulated depreciation and amortization
    
    
    (168,336
    )
    
    
    (141,670
    )Total
    
    $
    445,919
    
    
    $
    353,841
  Goodwill
    47




---



##### Table of Contents



Balance January 1, 2010
    
    $
    136,761Acquisition of Lake City International (See Note 16)
    
    
    9,231Acquisition of Joe Cooper Truck Center, LLC (See Note 16)
    
    
    1,100Acquisition of Metro Ford Truck Sales (See Note 16)
    
    
    2,957Other
    
    
    339Balance December 31, 2010
    
    $
    150,388
 Income Taxes
      48




---



##### Table of Contents



Revenue Recognition Policies
  Cost of Sales
  Taxes Assessed by a Governmental Authority
  Selling, General and Administrative Expenses
  Stock Based Compensation
   49




---



##### Table of Contents



2010
    
    
    2009
    
    
    2008Expected stock volatility
    
    
    50.7
    %
    
    
    46.3
    %
    
    35.7% - 36.7%Weighted-average stock volatility
    
    
    50.7
    %
    
    
    46.3
    %
    
    36.7%Expected dividend yield
    
    
    0.0
    %
    
    
    0.0
    %
    
    0.0%Risk-free interest rate
    
    
    2.39
    %
    
    
    1.87
    %
    
    2.41%Expected life (years)
    
    
    5.0
    
    
    
    5.0
    
    
    5.0Weighted-average fair value of
stock options granted
    
    $
    5.80
    
    
    $
    3.25
    
    
    $5.62
  Advertising Costs
  Accounting for Internal Use Software
   50




---



##### Table of Contents



Insurance
  Derivative Instruments and Hedging Activities
   SUPPLIER AND CUSTOMER CONCENTRATION
 Major Suppliers and Dealership Agreements
  Distributor
    
    Expiration DatesPeterbilt
    
    April 2011 through July 2013International
    
    May 2013 through May 2015Autocar
    
    June 2011Mitsubishi Fuso
    
    May 2015Isuzu
    
    IndefiniteHino
    
    IndefiniteUD
    
    IndefiniteFord
    
    IndefiniteBlue Bird
    
    August 2013IC Bus
    
    May 2015
    51




---



##### Table of Contents



Primary Lenders
   Concentrations of Credit Risks
    ACCOUNTS RECEIVABLE
  December 31,2010
    
    
    2009Trade accounts receivable from sale of vehicles
    
    $
    16,425
    
    
    $
    14,419Trade receivables other than vehicles
    
    
    13,450
    
    
    
    10,073Warranty claims
    
    
    4,283
    
    
    
    5,505Other accounts receivable
    
    
    10,674
    
    
    
    9,629Less allowance for bad debt and warranty receivable
    
    
    (1,319
    )
    
    
    (757
    )Total
    
    $
    43,513
    
    
    $
    38,869
  52




---



##### Table of Contents



INVENTORIES
  December 31,2010
    
    
    2009New commercial vehicles
    
    $
    209,969
    
    
    $
    147,213Used commercial vehicles
    
    
    27,002
    
    
    
    24,918Parts and accessories
    
    
    83,215
    
    
    
    80,550Other
    
    
    5,078
    
    
    
    4,403Less allowance
    
    
    (3,331
    )
    
    
    (4,865
    )Total
    
    $
    321,933
    
    
    $
    252,219
 VALUATION ACCOUNTS:
  Balance
    
    
    Net Charged
    
    
    
    
    
    
    
    
    
    
    BalanceBeginning
    
    
    to Costs and
    
    
    
    
    
    
    Net Write-
    
    
    Endof Year
    
    
    Expenses
    
    
    Acquisitions
    
    
    Offs
    
    
    of Year2010Reserve for accounts receivable
    
    $
    204
    
    
    $
    1,645
    
    
    
    
    
    
    $
    (809
    )
    
    $
    1,040Reserve for warranty receivable
    
    
    553
    
    
    
    794
    
    
    
    
    
    
    
    (1,068
    )
    
    
    279Reserve for parts inventory
    
    
    1,956
    
    
    
    1,360
    
    
    $
    43
    
    
    
    (1,304
    )
    
    
    2,055Reserve for construction equipment inventory
    
    
    1,497
    
    
    
    (1,497
    )
    
    
    
    
    
    
    
    
    
    
    Reserve for commercial vehicle inventory
    
    
    2,909
    
    
    
    4,024
    
    
    
    
    
    
    
    (5,658
    )
    
    
    1,2752009Reserve for accounts receivable
    
    $
    110
    
    
    $
    535
    
    
    
    
    
    
    $
    (441
    )
    
    $
    204Reserve for warranty receivable
    
    
    401
    
    
    
    512
    
    
    
    
    
    
    
    (360
    )
    
    
    553Reserve for parts inventory
    
    
    1,613
    
    
    
    1,638
    
    
    
    
    
    
    
    (1,295
    )
    
    
    1,956Reserve for construction equipment inventory
    
    
    723
    
    
    
    900
    
    
    
    
    
    
    
    (126
    )
    
    
    1,497Reserve for commercial vehicle inventory
    
    
    3,463
    
    
    
    13,277
    
    
    
    
    
    
    
    (13,831
    )
    
    
    2,9092008Reserve for accounts receivable
    
    $
    40
    
    
    $
    109
    
    
    
    
    
    
    $
    (39
    )
    
    $
    110Reserve for warranty receivable
    
    
    287
    
    
    
    360
    
    
    
    
    
    
    
    (246
    )
    
    
    401Reserve for parts inventory
    
    
    1,603
    
    
    
    933
    
    
    $
    315
    
    
    
    (1,238
    )
    
    
    1,613Reserve for construction equipment inventory
    
    
    328
    
    
    
    911
    
    
    
    
    
    
    
    (516
    )
    
    
    723Reserve for commercial vehicle inventory
    
    
    3,138
    
    
    
    15,413
    
    
    
    
    
    
    
    (15,088
    )
    
    
    3,463
 Allowance for Doubtful Receivables
    53




---



##### Table of Contents



Inventory
   FLOOR PLAN NOTES PAYABLE AND LINES OF CREDIT
 Floor Plan Notes Payable
        54




---



##### Table of Contents



December 31,2010
    
    
    2009Inventories, new and used vehicles at cost based on specific identification, net of allowance
    
    $
    235,429
    
    
    $
    168,606Inventories, new and used equipment at cost based on specific identification, net of allowance included in assets held for sale
    
    
    
    
    
    
    16,440Vehicle and equipment sale related accounts receivable
    
    
    16,425
    
    
    
    14,419Total
    
    $
    251,854
    
    
    $
    199,465Floor plan notes payable related to vehicles and equipment(1)
    
    $
    237,810
    
    
    $
    189,256
 (1)
    
    Floor plan notes payable include construction equipment inventory which is included in
assets held for sale for the year ended December 31, 2009. Lines of Credit
  LONG-TERM DEBT
  December 31,2010
    
    
    2009Variable interest rate term notes
    
    $
    82,707
    
    
    $
    44,543Fixed interest rate term notes
    
    
    169,422
    
    
    
    164,959Total debt
    
    
    252,129
    
    
    
    209,502Less: current maturities
    
    
    (62,279
    )
    
    
    (55,545
    )Total
    
    $
    189,850
    
    
    $
    153,957
  2011
    
    $
    62,2792012
    
    
    47,7542013
    
    
    47,8282014
    
    
    36,0052015
    
    
    45,663Thereafter
    
    
    12,600Total
    
    $
    252,129
   55




---



##### Table of Contents



FINANCIAL INSTRUMENTS AND FAIR VALUE
         56




---



##### Table of Contents



Interest Rate Swap Agreements
     FixedNotional
    
    
    Interest
    
    
    UnderlyingAgreement
    
    Amount
    
    
    Rate
    
    
    Rate
    
    
    Expiration Date
    
    
    Fair ValueInterest Rate
Swap
    
    $
    2,196
    
    
    
    5.075
    %
    
    3 month LIBOR
    
    July 1, 2015
    
    $
    (2
    )Interest Rate Swap
    
    
    4,536
    
    
    
    5.075
    %
    
    3 month LIBOR
    
    July 1, 2015
    
    
    (4
    )Interest Rate Swap
    
    
    7,847
    
    
    
    5.39
    %
    
    1 month LIBOR
    
    December 31, 2014
    
    
    (63
    )Interest Rate Swap
    
    
    1,517
    
    
    
    5.39
    %
    
    1 month LIBOR
    
    December 31, 2014
    
    
    (12
    )Interest Rate Swap
    
    
    2,700
    
    
    
    5.39
    %
    
    1 month LIBOR
    
    December 31, 2014
    
    
    (22
    )Interest Rate Swap
    
    
    6,109
    
    
    
    5.39
    %
    
    1 month LIBOR
    
    December 31, 2014
    
    
    (49
    )Interest Rate Swap
    
    
    5,616
    
    
    
    5.38
    %
    
    1 month LIBOR
    
    June 29, 2015
    
    
    (71
    )Interest Rate Swap
    
    
    864
    
    
    
    5.29
    %
    
    1 month LIBOR
    
    June 30, 2015
    
    
    (9
    )Interest Rate Swap
    
    
    1,656
    
    
    
    5.29
    %
    
    1 month LIBOR
    
    June 30, 2015
    
    
    (16
    )Interest Rate Swap
    
    
    8,352
    
    
    
    5.29
    %
    
    1 month LIBOR
    
    June 30, 2015
    
    
    (81
    )Interest Rate Swap
    
    
    720
    
    
    
    5.29
    %
    
    1 month LIBOR
    
    June 30, 2015
    
    
    (7
    )Interest Rate Swap
    
    
    2,894
    
    
    
    5.29
    %
    
    1 month LIBOR
    
    June 30, 2015
    
    
    (28
    )
  Derivatives Designated
    
    Asset Derivatives
    
    
    Liability Derivativesas Hedging Instruments
    
    Balance Sheet Location
    
    
    Fair Value
    
    
    Balance Sheet Location
    
    Fair ValueInterest Rate Swaps
    
    
    
    
    
    
    
    
    
    Other Long-Term Liabilities
    
    $
    364
  57




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##### Table of Contents



LEASING ACTIVITIES
 Vehicle Leases as Lessee
    Capital
    
    
    OperatingLeases
    
    
    Leases2011
    
    $
    9,186
    
    
    $
    2,6072012
    
    
    10,741
    
    
    
    2,1062013
    
    
    7,729
    
    
    
    1,4042014
    
    
    8,320
    
    
    
    6492015
    
    
    5,516
    
    
    
    208Thereafter
    
    
    5,056
    
    
    
    61Total minimum lease payments
    
    $
    46,548
    
    
    $
    7,035Less amount representing interest
    
    
    (4,346
    )Present value of net minimum capital lease payments
    
    
    42,202Less current portion
    
    
    (7,971
    )Obligations under capital leases less current portion
    
    $
    34,231
 Customer Vehicle Leases as Lessor
  2011
    
    $
    43,7892012
    
    
    36,2342013
    
    
    26,3562014
    
    
    18,5442015
    
    
    10,681Thereafter
    
    
    7,200Total
    
    $
    142,804
   58




---



##### Table of Contents



Other Leases  Land and Buildings
  2011
    
    $
    4,6262012
    
    
    3,5212013
    
    
    3,0572014
    
    
    2,5152015
    
    
    2,249Thereafter
    
    
    11,490Total
    
    $
    27,458
 SHARE BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS
 Employee Stock Purchase Plan
 SM
 Non-Employee Director Stock Option Plan
    59




---



##### Table of Contents



Employee Incentive Plans
   Valuation and Expense Information
    WeightedWeighted
    
    
    AverageAverage
    
    
    Remaining
    
    
    AggregateExercise
    
    
    Contractual
    
    
    IntrinsicOptions
    
    Shares
    
    
    Price
    
    
    Life (in Years)
    
    
    ValueBalance of Outstanding Options at January 1, 2010
    
    
    3,309,327
    
    
    $
    11.04Granted
    
    
    627,045
    
    
    
    7.67Exercised
    
    
    (222,495
    )
    
    
    4.97Forfeited
    
    
    (4,000
    )
    
    
    13.24Balance of Outstanding Options at December 31,
2010
    
    
    3,709,877
    
    
    $
    10.94
    
    
    
    6.28
    
    
    $
    34,823,889Vested and exercisable at December 31, 2010
    
    
    1,575,178
    
    
    $
    9.78
    
    
    
    4.25
    
    
    $
    16,610,401
   60




---



##### Table of Contents



WeightedAverageNumber of
    
    
    Grant DateNon-vested Shares
    
    Shares
    
    
    Fair ValueNon-vested at January 1, 2010
    
    
    1,980,585
    
    
    $
    4.69Granted
    
    
    627,045
    
    
    
    5.80Vested
    
    
    (468,931
    )
    
    
    5.09Forfeited
    
    
    (4,000
    )
    
    
    4.80Non-vested at December 31, 2010
    
    
    2,134,699
    
    
    $
    4.92
  Stock Awards
   WeightedAverageNumber of
    
    
    Grant DateNon-Vested Stock Awards
    
    Shares
    
    
    Fair ValueOutstanding, January 1, 2010
    
    
    148,610
    
    
    $
    10.24Granted
    
    
    125,245
    
    
    
    13.08Vested
    
    
    (83,296
    )
    
    
    12.33Forfeited
    
    
    
    
    
    
    Outstanding, December 31, 2010
    
    
    190,559
    
    
    $
    11.19
    61




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##### Table of Contents



Defined Contribution Plan
  Deferred Compensation Plan
   STOCK REPURCHASE PLAN
 Stock Repurchase Plan
   EARNINGS PER SHARE
   62




---



##### Table of Contents



2010
    
    
    2009
    
    
    2008Numerator-Numerator for basic and diluted earnings per share-Income from continuing operations available to
common shareholders
    
    $
    24,567,000
    
    
    $
    5,095,000
    
    
    $
    25,178,000Denominator-Denominator for basic earnings per share, weighted
average shares
    
    
    37,307,453
    
    
    
    37,065,654
    
    
    
    38,088,687Effect of dilutive securities-Stock options and restricted shares
    
    
    910,727
    
    
    
    530,853
    
    
    
    498,263Denominator for diluted earnings per share,
adjusted weighted average shares and assumed
conversions
    
    
    38,218,180
    
    
    
    37,596,507
    
    
    
    38,586,950Basic earnings per common share
    
    $
    0.66
    
    
    $
    0.14
    
    
    $
    0.66Diluted earnings per common share and common
share equivalents
    
    $
    0.64
    
    
    $
    0.14
    
    
    $
    0.65
  2010
    
    
    2009
    
    
    2008Options
    
    
    504,830
    
    
    
    1,557,356
    
    
    
    545,215Total anti-dilutive securities
    
    
    504,830
    
    
    
    1,557,356
    
    
    
    545,215
 INCOME TAXES
 Provision for Income Taxes
  Year Ended December 31,2010
    
    
    2009
    
    
    2008Current provision (benefit)-Federal
    
    $
    3,850
    
    
    $
    (688
    )
    
    $
    4,468State
    
    
    1,965
    
    
    
    889
    
    
    
    1,8055,815
    
    
    
    201
    
    
    
    6,273Deferred provision (benefit)-Federal
    
    
    9,962
    
    
    
    (2,614
    )
    
    
    9,809State
    
    
    253
    
    
    
    (255
    )
    
    
    14010,215
    
    
    
    (2,869
    )
    
    
    9,949(Benefit) provision for income taxes
    
    $
    16,030
    
    
    $
    (2,668
    )
    
    $
    16,222
  63




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##### Table of Contents



Year Ended December 31,2010
    
    
    2009
    
    
    2008Income taxes at the federal statutory rate
    
    $
    16,559
    
    
    $
    1,126
    
    
    $
    15,781State income taxes, net of federal benefit
    
    
    1,418
    
    
    
    422
    
    
    
    1,236Tax effect of permanent differences
    
    
    542
    
    
    
    540
    
    
    
    (684
    )Alternative fuel tax credits
    
    
    (2,461
    )
    
    
    (5,304
    )
    
    
    Federal tax settlement
    
    
    
    
    
    
    700
    
    
    
    Other, net
    
    
    (28
    )
    
    
    (152
    )
    
    
    (111
    )Provision (benefit) for income taxes
    
    $
    16,030
    
    
    $
    (2,668
    )
    
    $
    16,222
  2010
    
    
    2009
    
    
    2008Income tax provision (benefit) on continuing
operations
    
    $
    11,737
    
    
    $
    (3,173
    )
    
    $
    13,864Income tax provision from discontinued operations
    
    
    4,293
    
    
    
    505
    
    
    
    2,358Provision (benefit) for income taxes
    
    $
    16,030
    
    
    $
    (2,668
    )
    
    $
    16,222
  December 31,2010
    
    
    2009Current:Deferred tax assets:Inventory
    
    $
    2,222
    
    
    $
    3,915Accounts receivable
    
    
    72
    
    
    
    204Capital lease obligations
    
    
    3,896
    
    
    
    3,179Stock options
    
    
    958
    
    
    
    770Alternative fuel tax credits
    
    
    160
    
    
    
    933Accrued liabilities
    
    
    1,671
    
    
    
    1,129State net operating loss carry forward
    
    
    529
    
    
    
    600State tax credit
    
    
    572
    
    
    
    587Other
    
    
    201
    
    
    
    97Current deferred tax asset
    
    $
    10,281
    
    
    $
    11,414Non-Current:Deferred tax assets:Capital lease obligations
    
    $
    11,687
    
    
    $
    9,538Stock options
    
    
    3,833
    
    
    
    3,079Other
    
    
    142
    
    
    
    15,662
    
    
    
    12,617Deferred tax liabilities:Difference between book and tax basis-Depreciation
    
    
    (78,793
    )
    
    
    (66,399
    )LIFO inventory valuation
    
    
    (409
    )
    
    
    (818
    )Net non-current tax liability
    
    $
    (63,540
    )
    
    $
    (54,600
    )
   64




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##### Table of Contents



Unrecognized tax benefits at January 31, 2008
    
    $
    1,965,428Gross increases  tax positions in current year
    
    
    426,590Reductions due to lapse of statute of limitations
    
    
    (453,334
    )Unrecognized tax benefits at December 31, 2008
    
    
    1,938,684Gross increases  tax positions in prior year
    
    
    345,863Gross increases  tax positions in current year
    
    
    94,053Decreases related to settlements with taxing authorities
    
    
    (344,737
    )Reductions due to lapse of statute of limitations
    
    
    (272,468
    )Unrecognized tax benefits at December 31, 2009
    
    
    1,761,395Gross increases  tax positions in current year
    
    
    177,236Reductions due to lapse of statute of limitations
    
    
    (472,689
    )Unrecognized tax benefits at December 31, 2010
    
    $
    1,465,942
 COMMITMENTS AND CONTINGENCIES
    ACQUISITIONS
   65




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##### Table of Contents



Property and equipment, including real estate
    
    $
    1,645Inventory
    
    
    974Accounts receivable
    
    
    30Accrued expenses
    
    
    (14
    )Goodwill
    
    
    2,957Total
    
    $
    5,592
     Prepaid expenses
    
    $
    205Accounts and notes receivable
    
    
    5,955Inventories
    
    
    10,722Property and equipment, including real estate
    
    
    47,802Other assets
    
    
    309Accounts payable
    
    
    (175
    )Accrued expenses
    
    
    (3,622
    )Floor plan notes payable
    
    
    (275
    )Notes payable
    
    
    (178
    )Goodwill
    
    
    9,231Total
    
    $
    69,974
  66




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##### Table of Contents



Inventories
    
    $
    3,645Accrued expenses
    
    
    (27
    )Goodwill
    
    
    2,020Total
    
    $
    5,638
    Cash
    
    $
    1Inventories
    
    
    8,529Property and equipment
    
    
    99Accrued expenses
    
    
    (626
    )Goodwill
    
    
    5,383Total
    
    $
    13,386
    67




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##### Table of Contents



Cash
    
    $
    3,225Prepaid expenses
    
    
    44Accounts receivable
    
    
    1,672Inventories
    
    
    6,313Property and equipment
    
    
    3,071Other assets
    
    
    10Accrued expenses
    
    
    (2,587
    )Floor plan notes payable
    
    
    (3,185
    )Notes payable
    
    
    (2,379
    )Goodwill
    
    
    13,918Total
    
    $
    20,102
   DISCONTINUED OPERATIONS
     Year Ended December 31,2010
    
    
    2009
    
    
    2008Net Sales
    
    $
    25,819
    
    
    $
    38,836
    
    
    $
    83,763Earnings before income taxes:Results of operations from discontinued operations
before income taxes
    
    
    917
    
    
    
    1,294
    
    
    
    6,045Gain on disposition
    
    
    10,091
    
    
    
    
    
    
    
    Income tax (expense)
    
    
    (4,293
    )
    
    
    (505
    )
    
    
    (2,358
    )Net income from discontinued operations
    
    $
    6,715
    
    
    $
    789
    
    
    $
    3,687Basic earnings per common share from discontinued operations,
net of tax
    
    $
    0.18
    
    
    $
    0.02
    
    
    $
    0.10Diluted earnings per common share and common share equivalents
from discontinued operations, net of tax
    
    $
    0.18
    
    
    $
    0.02
    
    
    $
    0.10
  68




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##### Table of Contents



December 31,2010
    
    
    2009Inventories
    
    $
    
    
    
    $
    17,736Goodwill
    
    
    
    
    
    
    4,075Property and equipment, net
    
    
    
    
    
    
    908Assets held for sale
    
    $
    
    
    
    $
    22,719
 MEDIUM-DUTY GMC TRUCK FRANCHISES
  COMPREHENSIVE INCOME
  For the YearEnded December 31,2010
    
    
    2009Net income
    
    $
    31,282
    
    
    $
    5,884Other comprehensive income:Change in fair value of cash flow swaps
    
    
    (364
    )
    
    
    Income tax benefit associated with cash
flow swaps
    
    
    142
    
    
    
    Comprehensive income
    
    $
    31,060
    
    
    $
    5,884
  69




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##### Table of Contents



UNAUDITED QUARTERLY FINANCIAL DATA
  First
    
    
    Second
    
    
    Third
    
    
    FourthQuarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter2010Revenues
    
    $
    299,288
    
    
    $
    329,839
    
    
    $
    405,841
    
    
    $
    462,959Gross Profit
    
    
    58,063
    
    
    
    69,179
    
    
    
    78,197
    
    
    
    79,451Operating income from continuing operations
    
    
    4,368
    
    
    
    10,362
    
    
    
    13,732
    
    
    
    13,205Income from continuing operations before
income taxes
    
    
    3,071
    
    
    
    8,965
    
    
    
    12,375
    
    
    
    11,893Income from continuing operations
    
    
    1,922
    
    
    
    5,416
    
    
    
    8,031
    
    
    
    9,198Income from discontinued operations, net
of taxes
    
    
    315
    
    
    
    272
    
    
    
    6,128
    
    
    
    Net income
    
    $
    2,237
    
    
    $
    5,688
    
    
    $
    14,159
    
    
    $
    9,198Earnings per share  Basic:Income from continuing operations
    
    $
    0.05
    
    
    $
    0.15
    
    
    $
    0.22
    
    
    $
    0.25Net income
    
    $
    0.06
    
    
    $
    0.15
    
    
    $
    0.38
    
    
    $
    0.25Earnings per share  Diluted:Income from continuing operations
    
    $
    0.05
    
    
    $
    0.14
    
    
    $
    0.21
    
    
    $
    0.24Net income
    
    $
    0.06
    
    
    $
    0.15
    
    
    $
    0.37
    
    
    $
    0.242009Revenues
    
    $
    317,491
    
    
    $
    302,571
    
    
    $
    293,941
    
    
    $
    286,450Gross Profit
    
    
    58,754
    
    
    
    50,571
    
    
    
    55,121
    
    
    
    51,195Operating income (loss) from continuing
operations
    
    
    4,785
    
    
    
    (2,822
    )
    
    
    1,145
    
    
    
    4,509Income (loss) from continuing operations
before income taxes
    
    
    3,237
    
    
    
    (4,234
    )
    
    
    (283
    )
    
    
    3,202Income (loss) from continuing operations
    
    
    2,335
    
    
    
    (1,689
    )
    
    
    2,988
    
    
    
    1,461Income from discontinued operations, net
of taxes
    
    
    528
    
    
    
    168
    
    
    
    20
    
    
    
    73Net income
    
    $
    2,863
    
    
    $
    (1,521
    )
    
    $
    3,008
    
    
    $
    1,534Earnings per share  Basic:Income from continuing operations
    
    $
    0.06
    
    
    $
    (0.05
    )
    
    $
    0.08
    
    
    $
    0.04Net income
    
    $
    0.08
    
    
    $
    (0.04
    )
    
    $
    0.08
    
    
    $
    0.04Earnings per share  Diluted:Income from continuing operations
    
    $
    0.06
    
    
    $
    (0.05
    )
    
    $
    0.08
    
    
    $
    0.04Net income
    
    $
    0.08
    
    
    $
    (0.04
    )
    
    $
    0.08
    
    
    $
    0.04
 SEGMENTS
    70




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##### Table of Contents



Truck
    
    
    AllSegment
    
    
    Other
    
    
    Totals2010Revenues from external customers
    
    $
    1,482,742
    
    
    $
    15,185
    
    
    $
    1,497,927Interest income
    
    
    127
    
    
    
    
    
    
    
    127Interest expense
    
    
    5,092
    
    
    
    398
    
    
    
    5,490Depreciation and amortization
    
    
    15,019
    
    
    
    701
    
    
    
    15,720Segment income (loss) from continuing
operations before taxes
    
    
    37,690
    
    
    
    (1,386
    )
    
    
    36,304Segment assets
    
    
    1,143,385
    
    
    
    24,548
    
    
    
    1,167,933Goodwill
    
    
    147,828
    
    
    
    2,560
    
    
    
    150,388Expenditures for segment assets
    
    
    98,853
    
    
    
    633
    
    
    
    99,4862009Revenues from external customers
    
    $
    1,184,400
    
    
    $
    16,053
    
    
    $
    1,200,453Interest income
    
    
    54
    
    
    
    
    
    
    
    54Interest expense
    
    
    5,315
    
    
    
    434
    
    
    
    5,749Depreciation and amortization
    
    
    15,143
    
    
    
    747
    
    
    
    15,890Segment income (loss) from continuing
operations before taxes
    
    
    3,962
    
    
    
    (2,040
    )
    
    
    1,922Segment assets
    
    
    924,703
    
    
    
    52,594
    
    
    
    977,297Goodwill
    
    
    134,352
    
    
    
    2,409
    
    
    
    136,761Expenditures for segment assets
    
    
    74,519
    
    
    
    78
    
    
    
    74,5972008Revenues from external customers
    
    $
    1,553,298
    
    
    $
    17,895
    
    
    $
    1,571,193Interest income
    
    
    2,636
    
    
    
    
    
    
    
    2,636Interest expense
    
    
    9,359
    
    
    
    507
    
    
    
    9,866Depreciation and amortization
    
    
    14,483
    
    
    
    790
    
    
    
    15,273Segment income from continuing
operations before taxes
    
    
    38,549
    
    
    
    493
    
    
    
    39,042Segment assets
    
    
    1,000,470
    
    
    
    56,320
    
    
    
    1,056,790Goodwill
    
    
    135,191
    
    
    
    2,638
    
    
    
    137,829Expenditures for segment assets
    
    
    70,474
    
    
    
    312
    
    
    
    70,786
  
 Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
   71




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##### Table of Contents



Item 9A.
    
    Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control Over Financial Reporting
  Managements Report on Internal Control over Financial Reporting
     72




---



##### Table of Contents



Attestation Report of Independent Registered Public Accounting Firm
 Report of Independent Registered Public Accounting Firm
         
 
 Item 9B.
    
    Other Information
   73




---



##### Table of Contents



PART III
 
 Item 10.
    
    Directors and Executive Officers of the Registrant
  Code of Ethics
 www.rushenterprises.com
 
 Item 11.
    
    Executive Compensation
  
 Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related Shareholder
Matters
  
 Item 13.
    
    Certain Relationships and Related Transactions
  
 Item 14.
    
    Principal Accountant Fees and Services
   74




---



##### Table of Contents



PART IV
 
 Item 15.
    
    Exhibits and Financial Statement Schedules
 (a)(1) Financial Statements
  (a)(2) Financial Statement Schedules
   75




---



##### Table of Contents



(a)(3) Exhibits
 Index to Exhibits:
 ExhibitNo.
    
    Identification of Exhibit2.1
    
    
    Asset Purchase Agreement, dated March 19, 2010 (incorporated herein by reference
to Exhibit 2.1 of the Companys Current Report on Form 8-K (File No. 000-20797)
filed March 25, 2010)2.2
    
    
    Amendment #1, dated as of May 24, 2010, to Asset Purchase Agreement, dated March
19, 2010 (incorporated herein by reference to Exhibit 2.1 of the Companys
Current Report on Form 8-K (File No. 000-20797) filed May 26, 2010)3.1
    
    
    Restated Articles of Incorporation of Rush Enterprises, Inc. (incorporated
herein by reference to Exhibit 3.1 of the Companys Quarterly Report on Form
10-Q (File No. 000-20797) for the quarter ended June 30, 2008)3.2
    
    
    Rush Enterprises, Inc. Amended and Restated Bylaws (incorporated herein by
reference to Exhibit 3.2 of the Companys Quarterly Report on Form 10-Q (File
No. 000-20797) filed for the quarter ended June 30, 2009)4.1
    
    
    Specimen of certificate representing Common Stock (now Class B Common Stock),
$.01 par value, of Rush Enterprises, Inc. (incorporated herein by reference to
Exhibit 4.1 of the Companys Registration Statement No. 333-03346 on Form S-1
filed April 10, 1996)4.2
    
    
    Specimen of certificate representing Class A Common Stock, $.01 par value, of
the Registrant (incorporated herein by reference to Exhibit 4.1 of the Companys
Registration Statement on Form 8-A filed July 9, 2002)10.1
    
    
    Right of First Refusal dated April 1, 1996 between Peterbilt Motors Company and
W. Marvin Rush (incorporated herein by reference to Exhibit 10.76 of the
Companys Registration Statement No. 333-03346 on Form S-1 filed April 10, 1996)10.2
    
    
    Right of First Refusal dated April 1, 1996 between Peterbilt Motors Company and
Barbara Rush (incorporated herein by reference to Exhibit 10.77 of the Companys
Registration Statement No. 333-03346 on Form S-1 filed April 10, 1996)10.3
    
    
    Right of First Refusal dated April 1, 1996 between Peterbilt Motors Company and
W.M. Rusty Rush (incorporated herein by reference to Exhibit 10.78 of the
Companys Registration Statement No. 333-03346 on Form S-1 filed April 10, 1996)10.4
    
    
    Right of First Refusal dated April 1, 1996 between Peterbilt Motors Company and
Robin Rush (incorporated herein by reference to Exhibit 10.79 of the Companys
Registration Statement No. 333-03346 on Form S-1 filed April 10, 1996)10.5
    +
    
    Rush Enterprises, Inc. Long-Term Incentive Plan, as amended (incorporated herein
by reference to Exhibit 4.1 of the Companys Registration Statement No.
333-117305 on Form S-8 filed July 12, 2004)10.6
    +
    
    Form of Rush Enterprises, Inc. Long-Term Incentive Plan Stock Option Agreement
(incorporated herein by reference to Exhibit 10.85 of the Companys Registration
Statement No. 333-03346 on Form S-1 filed April 10, 1996)10.7
    +
    
    Rush Enterprises, Inc. Amended and Restated 1997 Non-Employee Director Stock
Option Plan, as amended (incorporated herein by reference to Exhibit 10.1 of the
Companys Quarterly Report on Form 10-Q (File No. 000-20797) for the quarter
ended September 30, 2010)10.8
    +
    
    Form of Rush Enterprises, Inc. 1997 Non-Employee Director Stock Option Agreement
(incorporated herein by reference to Exhibit 4.4 of the Companys Registration
Statement No. 333-117305 on Form S-8 filed July 12, 2004)
  76




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##### Table of Contents



ExhibitNo.
    
    Identification of Exhibit10.9
    +
    
    Rush Enterprises, Inc. 2004 Employee Stock Purchase Plan, as amended
(incorporated herein by reference to Exhibit 4.1 of the Companys Registration
Statement No. 333-121355 on Form S-8 filed December 17, 2004)10.10
    *+
    
    Rush Enterprises, Inc. Amended and Restated 2006 Non-Employee Director Stock Plan10.11
    +
    
    Form of Rush Enterprises, Inc. 2006 Non-Employee Director Stock Option Agreement
(incorporated herein by reference to Exhibit 4.4 of the Companys Registration
Statement No. 333-138556 on Form S-8 filed November 9, 2006)10.12
    +
    
    Rush Enterprises, Inc. 2007 Long-Term Incentive Plan (incorporated herein by
reference to Appendix A to the Companys Definitive Proxy Statement on Schedule
14A filed April 6, 2010)10.13
    +
    
    Form of Rush Enterprises Inc. 2007 Long-Term Incentive Plan Restricted Stock
Agreement (incorporated herein by reference to Exhibit 10.13 of the Companys
Form 10-K (File No. 000-20797) for the year ended December 31, 2008)10.14
    +
    
    Form of Rush Enterprises Inc. 2007 Long-Term Incentive Plan Stock Option
Agreement (incorporated herein by reference to Exhibit 4.4 of the Companys Form
S-8 (File No. 333-144821) filed July 24, 2007)10.15
    
    
    Form of dealer agreement between Peterbilt Motors Company and Rush Truck Centers
(incorporated herein by reference to Exhibit 10.18 of the Companys Form 10-K
(File No. 000-20797) for the year ended December 31, 1999)10.16
    
    
    Credit Agreement, dated December 31, 2010, by and among Rush Truck Centers of
Alabama, Inc., Rush Truck Centers of Arizona, Inc., Rush Truck Centers of
California, Inc., Rush Medium Duty Truck Centers of Colorado, Inc., Rush Truck
Centers of Colorado, Inc., Rush Truck Centers of Florida, Inc., Rush Truck
Centers of Georgia, Inc., Rush Truck Centers of New Mexico, Inc., Rush Truck
Centers of Oklahoma, Inc., Rush Truck Centers of Tennessee, Inc., Rush Truck
Centers of North Carolina, Inc., Rush Truck Centers of Idaho, Inc., Rush Truck
Centers of Utah, Inc., Rush Truck Centers of Oregon, Inc., Rush Truck Centers of
Texas, L.P., Rush Enterprises, Inc. and General Electric Capital Corporation
(incorporated herein by reference to Exhibit 10.1 of the Companys Current
Report on Form 8-K (File No. 000-20797) filed January 6, 2011)10.17
    
    
    Rush Enterprises, Inc. Deferred Compensation Plan (incorporated herein by
reference to Exhibit 10.1 of the Companys Current Report on Form 8-K (File No.
000-20797) filed November 12, 2010)10.18
    +
    
    Form of Indemnity Agreement (incorporated herein by reference to Exhibit 10.1 of
the Companys Current Report on Form 8-K (File No. 000-20797) filed February 27,
2007)10.19
    +
    
    Rush Enterprises, Inc. Executive Transition Plan (incorporated herein by
reference to Exhibit 10.1 of the Companys Current Report on Form 8-K (File No.
000-20797) filed July 25, 2008)21.1
    *
    
    Subsidiaries of the Company23.1
    *
    
    Consent of Ernst & Young LLP31.1
    *
    
    Certification of President and Chief Executive Officer pursuant to Rules
13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 200231.2
    *
    
    Certification of Vice President and Chief Financial Officer pursuant to Rules
13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 200232.1
    *++
    
    Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
906 of the Sarbanes-Oxley Act of 200232.2
    *++
    
    Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002
 *
    
    Filed herewith.+
    
    Management contract or compensatory plan or arrangement.++
    
    This exhibit shall not be deemed filed for purposes of Section 18 of
the Securities Exchange Act of 1934, or otherwise subject to the
liability of that section, and shall not be deemed to be incorporated
by reference into any filing under the Securities Act of 1933 or the
Securities Exchange Act of 1934.  77




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##### Table of Contents



SIGNATURES
  RUSH ENTERPRISES, INC.By:
    
    /s/ W. M. RUSTY RUSH

W. M. Rusty Rush
    
    
    
    Date: March 11, 2011President and Chief Executive Officer
  Signature
    
    Capacity
    
    Date/s/ W. MARVIN RUSH

W. Marvin Rush
    
    Chairman of the Board and Director
    
    March 11, 2011/s/ W. M. RUSTY RUSH

W. M. Rusty Rush
    
    President and Chief Executive
Officer, Director
(Principal Executive Officer)
    
    March 11, 2011/s/ STEVEN L. KELLER

Steven L. Keller
    
    Vice President and
Chief Financial Officer
(Principal Financial and Accounting Officer)
    
    March 11, 2011/s/ THOMAS A. AKIN

Thomas A. Akin
    
    Director
    
    March 11, 2011/s/ HAROLD D. MARSHALL

Harold D. Marshall
    
    Director
    
    March 11, 2011/s/ JAMES C. UNDERWOOD

James C. Underwood
    
    Director
    
    March 11, 2011/s/ GERALD R. SZCZEPANSKI

Gerald R. Szczepanski
    
    Director
    
    March 11, 2011
  78