##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number 0-20797
 RUSH ENTERPRISES, INC.
  Texas
    
    74-1733016(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)
 
 
  þ o
  o o
  Large accelerated filer oAccelerated filer þ
Non-accelerated filer o
(Do not check if a smaller reporting company)Smaller reporting company 
o  o þ
  Number ofSharesTitle of Class
    
    OutstandingClass A Common Stock, $.01 Par Value
    
    
    26,657,377Class B Common Stock, $.01 Par Value
    
    
    10,692,641




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##### 



RUSH ENTERPRISES, INC. AND SUBSIDIARIES
 INDEX
  
 PagePART I. FINANCIAL INFORMATIONItem 1.
    
    Financial StatementsConsolidated Balance Sheets - June 30, 2010 (unaudited) and December 31, 2009
    
    
    3Consolidated Statements of Operations - For the Three Months and Six Months Ended June 30, 2010 and 2009 (unaudited)
    
    
    4Consolidated Statements of Cash Flows - For the Six Months Ended June 30, 2010 and 2009 (unaudited)
    
    
    5Notes to Consolidated Financial Statements (unaudited)
    
    
    6Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    12Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    27Item 4.
    
    Controls and Procedures
    
    
    27PART II. OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    28Item 1A.
    
    Risk Factors
    
    
    28Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    28Item 3.
    
    Defaults Upon Senior Securities
    
    
    28Item 5.
    
    Other Information
    
    
    28Item 6.
    
    Exhibits
    
    
    29SIGNATURES
    
    
    30EX-31.1EX-31.2EX-32.1EX-32.2
   2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 ITEM 1. Financial Statements.
 
 RUSH ENTERPRISES, INC. AND SUBSIDIARIES  CONSOLIDATED BALANCE SHEETS  JUNE 30, 2010 AND DECEMBER 31, 2009  (In Thousands, Except Shares)
 June 30,
    
    
    December 31,2010
    
    
    2009(Unaudited)AssetsCurrent assets:Cash and cash equivalents
    
    $
    135,779
    
    
    $
    149,095Accounts receivable, net
    
    
    54,620
    
    
    
    38,869Inventories, net
    
    
    308,891
    
    
    
    252,219Prepaid expenses and other
    
    
    3,109
    
    
    
    3,650Assets held for sale
    
    
    23,929
    
    
    
    22,719Deferred income taxes, net
    
    
    9,195
    
    
    
    11,414Total current assets
    
    
    535,523
    
    
    
    477,966Investments
    
    
    7,575
    
    
    
    7,575Property and equipment, net
    
    
    410,098
    
    
    
    353,841Goodwill, net
    
    
    146,114
    
    
    
    136,761Other assets, net
    
    
    3,223
    
    
    
    1,154Total assets
    
    $
    1,102,533
    
    
    $
    977,297Liabilities and shareholders equityCurrent liabilities:Floor plan notes payable
    
    $
    238,590
    
    
    $
    189,256Current maturities of long-term debt
    
    
    63,457
    
    
    
    55,545Current maturities of capital lease obligations
    
    
    6,456
    
    
    
    5,730Trade accounts payable
    
    
    38,686
    
    
    
    22,427Accrued expenses
    
    
    55,640
    
    
    
    40,843Total current liabilities
    
    
    402,829
    
    
    
    313,801Long-term debt, net of current maturities
    
    
    179,681
    
    
    
    153,957Capital lease obligations, net of current maturities
    
    
    28,902
    
    
    
    28,714Deferred income taxes, net
    
    
    52,951
    
    
    
    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; 26,624,753 class A shares and
10,692,641 class B shares outstanding in 2010;
and 26,437,848 class A shares and 10,689,375
class B shares outstanding in 2009
    
    
    389
    
    
    
    388Additional paid-in capital
    
    
    192,135
    
    
    
    188,116Treasury stock, at cost: 1,639,843 class B shares
    
    
    (17,948
    )
    
    
    (17,948
    )Retained earnings
    
    
    263,594
    
    
    
    255,669Total shareholders equity
    
    
    438,170
    
    
    
    426,225Total liabilities and shareholders equity
    
    $
    1,102,533
    
    
    $
    977,297
   3




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##### Table of Contents



RUSH ENTERPRISES, INC. AND SUBSIDIARIES  CONSOLIDATED STATEMENTS OF OPERATIONS  (In Thousands, Except Per Share Amounts)
(Unaudited)
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Revenues:New and used truck sales
    
    $
    191,309
    
    
    $
    187,154
    
    
    $
    371,913
    
    
    $
    383,142Parts and service
    
    
    118,529
    
    
    
    98,706
    
    
    
    220,357
    
    
    
    203,466Construction equipment sales
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Lease and rental
    
    
    16,255
    
    
    
    13,236
    
    
    
    30,287
    
    
    
    26,712Finance and insurance
    
    
    2,047
    
    
    
    2,230
    
    
    
    3,532
    
    
    
    3,871Other
    
    
    1,699
    
    
    
    1,245
    
    
    
    3,038
    
    
    
    2,871Total revenue
    
    
    329,839
    
    
    
    302,571
    
    
    
    629,127
    
    
    
    620,062Cost of products sold:New and used truck sales
    
    
    174,817
    
    
    
    179,846
    
    
    
    341,163
    
    
    
    362,673Parts and service
    
    
    72,222
    
    
    
    60,565
    
    
    
    134,851
    
    
    
    124,547Construction equipment sales
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Lease and rental
    
    
    13,621
    
    
    
    11,589
    
    
    
    25,871
    
    
    
    23,517Total cost of products sold
    
    
    260,660
    
    
    
    252,000
    
    
    
    501,885
    
    
    
    510,737Gross profit
    
    
    69,179
    
    
    
    50,571
    
    
    
    127,242
    
    
    
    109,325Selling, general and administrative
    
    
    55,148
    
    
    
    48,735
    
    
    
    105,285
    
    
    
    98,917Depreciation and amortization
    
    
    3,676
    
    
    
    4,680
    
    
    
    7,223
    
    
    
    8,523Gain (loss) on sale of assets
    
    
    7
    
    
    
    22
    
    
    
    (4
    )
    
    
    78Operating income (loss)
    
    
    10,362
    
    
    
    (2,822
    )
    
    
    14,730
    
    
    
    1,963Interest expense, net
    
    
    1,397
    
    
    
    1,412
    
    
    
    2,694
    
    
    
    2,960Income (loss) from continuing operations before taxes
    
    
    8,965
    
    
    
    (4,234
    )
    
    
    12,036
    
    
    
    (997
    )Provision (benefit) for income taxes
    
    
    3,549
    
    
    
    (2,545
    )
    
    
    4,698
    
    
    
    (1,643
    )Income (loss) from continuing operations
    
    
    5,416
    
    
    
    (1,689
    )
    
    
    7,338
    
    
    
    646Income from discontinued operations, net of tax
    
    
    272
    
    
    
    168
    
    
    
    587
    
    
    
    696Net income (loss)
    
    $
    5,688
    
    
    $
    (1,521
    )
    
    $
    7,925
    
    
    $
    1,342Earnings (loss) per common share  Basic:Income (loss) from continuing operations
    
    $
    .15
    
    
    $
    (.05
    )
    
    $
    .20
    
    
    $
    .02Net income (loss)
    
    $
    .15
    
    
    $
    (.04
    )
    
    $
    .21
    
    
    $
    .04Earnings (loss) per common share  Diluted:Income (loss) from continuing operations
    
    $
    .14
    
    
    $
    (.05
    )
    
    $
    .19
    
    
    $
    .02Net income (loss)
    
    $
    .15
    
    
    $
    (.04
    )
    
    $
    .21
    
    
    $
    .04Weighted average shares outstanding:Basic
    
    
    37,292
    
    
    
    37,039
    
    
    
    37,232
    
    
    
    37,015Diluted
    
    
    38,189
    
    
    
    37,039
    
    
    
    38,014
    
    
    
    37,389
   4




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RUSH ENTERPRISES, INC. AND SUBSIDIARIES  CONSOLIDATED STATEMENTS OF CASH FLOWS  (In Thousands)
(Unaudited)
 Six Months EndedJune 30,2010
    
    
    2009Cash flows from operating activities:Net income
    
    $
    7,925
    
    
    $
    1,342Adjustments to reconcile net income to net cash provided by operating
activities:Depreciation and amortization
    
    
    21,312
    
    
    
    20,824(Gain) on sale of property and equipment
    
    
    (36
    )
    
    
    (77
    )Stock-based compensation expense related to stock options
and employee stock purchases
    
    
    2,902
    
    
    
    2,481Provision (benefit) for deferred income tax expense
    
    
    570
    
    
    
    (4,304
    )Excess tax benefits from stock-based compensation
    
    
    (209
    )
    
    
    (206
    )Change in accounts receivable, net
    
    
    (11,354
    )
    
    
    6,176Change in inventories
    
    
    (43,902
    )
    
    
    70,308Change in prepaid expenses and other, net
    
    
    743
    
    
    
    1,019Change in trade accounts payable
    
    
    16,084
    
    
    
    (8,106
    )Change in accrued expenses
    
    
    11,451
    
    
    
    (11,462
    )Net cash provided by operating activities
    
    
    5,486
    
    
    
    77,995Cash flows from investing activities:Acquisition of property and equipment
    
    
    (28,558
    )
    
    
    (23,513
    )Proceeds from the sale of property and equipment
    
    
    123
    
    
    
    132Business acquisitions
    
    
    (32,450
    )
    
    
    Change in other assets
    
    
    (1,996
    )
    
    
    5Net cash (used in) investing activities
    
    
    (62,881
    )
    
    
    (23,376
    )Cash flows from financing activities:Draws (payments) on floor plan notes payable, net
    
    
    44,504
    
    
    
    (64,022
    )Proceeds from long-term debt
    
    
    26,854
    
    
    
    6,137Principal payments on long-term debt
    
    
    (24,806
    )
    
    
    (20,550
    )Principal payments on capital lease obligations
    
    
    (3,518
    )
    
    
    (2,217
    )Debt issuance costs
    
    
    (73
    )
    
    
    (17
    )Excess tax benefits from stock-based compensation
    
    
    209
    
    
    
    206Proceeds from issuance of shares relating to employee stock options and
employee stock purchases
    
    
    909
    
    
    
    384Net cash (used in) financing activities
    
    
    44,079
    
    
    
    (80,079
    )Net (decrease) in cash and cash equivalents
    
    
    (13,316
    )
    
    
    (25,460
    )Cash and cash equivalents, beginning of period
    
    
    149,095
    
    
    
    146,411Cash and cash equivalents, end of period
    
    $
    135,779
    
    
    $
    120,951Supplemental disclosure of cash flow information:Cash paid during the period for:Interest
    
    $
    6,528
    
    
    $
    7,234Income taxes, net of refunds
    
    $
    (3,147
    )
    
    $
    3,500Noncash operating activities:Asset impairment (See Note 11)
    
    $
    
    
    
    $
    4,920Noncash investing activities:Assets acquired under capital leases
    
    $
    4,432
    
    
    $
    6,240
   5




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RUSH ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited
 1  Principles of Consolidation and Basis of Presentation
  2  Goodwill and Other Intangible Assets
      6




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3  Commitments and Contingencies
    4  Earnings Per Share
  Three Months Ended June 30,
    
    
    Six Months Ended June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Numerator:Numerator for basic and diluted earnings per
share, net income (loss) available to common
shareholders
    
    $
    5,688,000
    
    
    $
    (1,521,000
    )
    
    $
    7,925,000
    
    
    $
    1,342,000Denominator:Denominator for basic earnings per share,
adjusted weighted average shares outstanding
    
    
    37,291,659
    
    
    
    37,038,835
    
    
    
    37,231,524
    
    
    
    37,015,257Effect of dilutive securities:Employee and director stock
options and restricted share awards
    
    
    897,669
    
    
    
    
    
    
    
    782,900
    
    
    
    374,184Denominator for diluted earnings per share,
adjusted weighted average shares outstanding
and assumed conversions
    
    
    38,189,328
    
    
    
    37,038,835
    
    
    
    38,014,424
    
    
    
    37,389,441Basic earnings (loss) per common share
    
    $
    .15
    
    
    $
    (.04
    )
    
    $
    .21
    
    
    $
    .04Diluted earnings (loss) per common share and common
share equivalents
    
    $
    .15
    
    
    $
    (.04
    )
    
    $
    .21
    
    
    $
    .04
  Three Months Ended June 30,
    
    
    Six Months Ended June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Options in the money and
non-vested restricted share
awards
    
    
    
    
    
    
    1,910,291
    (1)
    
    
    
    
    
    
    Other options
    
    
    990,330
    
    
    
    1,572,231
    
    
    
    990,330
    
    
    
    1,961,028Total anti-dilutive securities
    
    
    990,330
    
    
    
    3,482,522
    
    
    
    990,330
    
    
    
    1,961,028
 (1)
    
    The Company cannot include potentially dilutive common shares in the
computation of any diluted per-share amount when a loss from continuing operations
exists. If the Company had not recorded a loss from continuing operations in the
second quarter of 2009, 505,322 dilutive shares would have been included in diluted
earnings per share.  7




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5  Stock Options and Restricted Stock Awards
 Valuation and Expense Information
  6  Investments
      7  Inventory
   8




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##### Table of Contents



8  Segment Information
      TruckSegment
    
    
    All Other
    
    
    TotalsAs of and for the three months ended June 30, 2010Revenues from external customers
    
    $
    325,673
    
    
    $
    4,166
    
    
    $
    329,839Segment income from continuing operations before taxes
    
    
    8,857
    
    
    
    108
    
    
    
    8,965Segment assets
    
    
    1,049,053
    
    
    
    53,480
    
    
    
    1,102,533As of and for the six months ended June 30, 2010Revenues from external customers
    
    $
    621,431
    
    
    $
    7,696
    
    
    $
    629,127Segment income (loss) from continuing operations
before taxes
    
    
    12,347
    
    
    
    (311
    )
    
    
    12,036As of and for the three months ended June 30, 2009Revenues from external customers
    
    $
    298,266
    
    
    $
    4,305
    
    
    $
    302,571Segment (loss) from continuing operations before taxes
    
    
    (3,838
    )
    
    
    (396
    )
    
    
    (4,234
    )Segment assets
    
    
    907,990
    
    
    
    57,488
    
    
    
    965,478As of and for the six months ended June 30, 2009Revenues from external customers
    
    $
    611,510
    
    
    $
    8,552
    
    
    $
    620,062Segment (loss) from continuing operations before taxes
    
    
    (125
    )
    
    
    (872
    )
    
    
    (997
    )
  9  Income Taxes
   9




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10  Fair Value of Financial Instruments
   11  Medium-Duty GMC Truck Franchises
  12  Acquisition
   Prepaid expenses
    
    $
    205Accounts and notes receivable
    
    
    5,955Inventories
    
    
    10,722Property and equipment, including real estate
    
    
    47,802Other assets
    
    
    309Accounts payable
    
    
    (175
    )Accrued expenses
    
    
    (3,555
    )Floor plan notes payable
    
    
    (275
    )Notes payable
    
    
    (178
    )Goodwill
    
    
    9,164Total
    
    $
    69,974
  10




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13  Discontinued Operations
     Three months ended
    
    
    Six months endedJune 30,
    
    
    June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Net Sales
    
    $
    9,102
    
    
    $
    9,557
    
    
    $
    18,210
    
    
    $
    21,152Earnings before income taxes:Results of operations from
discontinued operations before
income taxes
    
    
    469
    
    
    
    276
    
    
    
    1,012
    
    
    
    1,141Income tax (expense)
    
    
    (197
    )
    
    
    (108
    )
    
    
    (425
    )
    
    
    (445
    )Net income from discontinued operations
    
    $
    272
    
    
    $
    168
    
    
    $
    587
    
    
    $
    696
  2010
    
    
    2009Inventories
    
    $
    19,168
    
    
    $
    17,736Goodwill
    
    
    4,075
    
    
    
    4,075Property and equipment, net
    
    
    683
    
    
    
    908Prepaid expenses
    
    
    3
    
    
    
    Assets held for sale
    
    $
    23,929
    
    
    $
    22,719
  11




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##### Table of Contents



ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations.
 Certain statements contained in this Form 10-Q (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 in the Companys Annual Report on Form 10-K
for the year ended December 31, 2009 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 and equipment markets, customer relations, relationships with vendors, approval by
John Deere of the disposition of Rush Equipment Centers, 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 Trademarks Used in This Form 10-Q
 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.  Case ® is a
registered trademark of Case Corporation. Komatsu ® is a registered trademark of
Kabushiki Kaisha Komatsu Seisakusho Corporation Japan. The CIT Group ® is a
registered trademark of CIT Group Holdings, 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.
 General
   12




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Critical Accounting Policies and Estimates
  Inventories
  Goodwill
     13




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Finance and Insurance Revenue Recognition
   Insurance Accruals
   Accounting for Income Taxes
    14




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Stock-Based Compensation Expense
    15




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##### Table of Contents



Results of Operations
   Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009New and used truck sales
    
    
    58.0
    %
    
    
    61.9
    %
    
    
    59.1
    %
    
    
    61.8
    %Parts and service
    
    
    36.0
    
    
    
    32.6
    
    
    
    35.0
    
    
    
    32.8Construction equipment sales
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Lease and rental
    
    
    4.9
    
    
    
    4.4
    
    
    
    4.8
    
    
    
    4.3Finance and insurance
    
    
    0.6
    
    
    
    0.7
    
    
    
    0.6
    
    
    
    0.6Other
    
    
    0.5
    
    
    
    0.4
    
    
    
    0.5
    
    
    
    0.5Total revenues
    
    
    100.0
    
    
    
    100.0
    
    
    
    100.0
    
    
    
    100.0Cost of products sold
    
    
    79.0
    
    
    
    83.3
    
    
    
    79.8
    
    
    
    82.4Gross profit
    
    
    21.0
    
    
    
    16.7
    
    
    
    20.2
    
    
    
    17.6Selling, general and administrative
    
    
    16.8
    
    
    
    16.1
    
    
    
    16.7
    
    
    
    15.9Depreciation and amortization
    
    
    1.1
    
    
    
    1.5
    
    
    
    1.1
    
    
    
    1.4Gain on sale of assets
    
    
    0.0
    
    
    
    0.0
    
    
    
    0.0
    
    
    
    0.0Operating income
    
    
    3.1
    
    
    
    (0.9
    )
    
    
    2.4
    
    
    
    0.3Interest expense, net
    
    
    0.4
    
    
    
    0.5
    
    
    
    0.4
    
    
    
    0.5Income from continuing operations before income taxes
    
    
    2.7
    
    
    
    (1.4
    )
    
    
    2.0
    
    
    
    (0.2
    )Provision for income taxes
    
    
    1.1
    
    
    
    (0.8
    )
    
    
    0.8
    
    
    
    (0.3
    )Income from continuing operations
    
    
    1.6
    
    
    
    (0.6
    )
    
    
    1.2
    
    
    
    0.1Income from discontinued operations
    
    
    0.1
    
    
    
    0.1
    
    
    
    0.1
    
    
    
    0.1Net income
    
    
    1.7
    %
    
    
    (0.5
    )%
    
    
    1.3
    %
    
    
    0.2
    %
  Three Months Ended
    
    
    
    
    
    
    Six Months EndedJune 30,
    
    
    %
    
    
    June 30,
    
    
    %2010
    
    
    2009
    
    
    Change
    
    
    2010
    
    
    2009
    
    
    ChangeTruck unit sales:New heavy-duty trucks
    
    
    813
    
    
    
    954
    
    
    
    (14.8
    %)
    
    
    1,782
    
    
    
    1,986
    
    
    
    (10.3
    %)New medium-duty trucks
    
    
    828
    
    
    
    638
    
    
    
    29.8
    %
    
    
    1,439
    
    
    
    1,392
    
    
    
    3.4
    %Total new truck unit sales
    
    
    1,641
    
    
    
    1,592
    
    
    
    3.1
    %
    
    
    3,221
    
    
    
    3,378
    
    
    
    (4.6
    %)Used truck unit sales
    
    
    889
    
    
    
    776
    
    
    
    14.6
    %
    
    
    1,575
    
    
    
    1,353
    
    
    
    16.4
    %Truck revenue:New heavy-duty trucks
    
    $
    104.7
    
    
    $
    116.3
    
    
    
    (10.0
    %)
    
    $
    222.9
    
    
    $
    240.3
    
    
    
    (7.2
    %)New medium-duty trucks
    
    
    50.3
    
    
    
    40.7
    
    
    
    23.6
    %
    
    
    87.7
    
    
    
    89.5
    
    
    
    (2.0
    %)Total new truck revenue
    
    $
    155.0
    
    
    $
    157.0
    
    
    
    (1.3
    %)
    
    $
    310.6
    
    
    $
    329.8
    
    
    
    (5.8
    %)Used truck revenue
    
    $
    35.5
    
    
    $
    29.8
    
    
    
    19.1
    %
    
    $
    60.1
    
    
    $
    52.5
    
    
    
    14.5
    %Other revenue:(1)
    
    $
    0.8
    
    
    $
    0.3
    
    
    
    166.7
    %
    
    $
    1.2
    
    
    $
    0.8
    
    
    
    50.0
    %Absorption rate:
    
    
    104.3
    %
    
    
    95.2
    %
    
    
    9.6
    %
    
    
    100.8
    %
    
    
    96.2
    %
    
    
    4.8
    %
 (1)
    
    Includes sales of truck bodies, trailers and other new equipment.  16




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##### Table of Contents



Key Performance Indicator
 Absorption Rate
  Three Months Ended June 30, 2010, Compared to Three Months Ended June 30, 2009
        17




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Revenues
          18




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Gross Profit
        Selling, General and Administrative Expenses
   19




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##### Table of Contents



Interest Expense, Net
  Income from Continuing Operations before Income Taxes
  Income Taxes
  Income from Discontinued Operations, net
  Six Months Ended June 30, 2010, Compared to Six Months Ended June 30, 2009
       20




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Gross Profit
        Selling, General and Administrative Expenses
  Interest Expense, Net
  Income from Continuing Operations before Income Taxes
  Provision for Income Taxes
   21




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##### Table of Contents



Income from Discontinued Operations, net
  Liquidity and Capital Resources
          22




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##### Table of Contents



Cash Flows
  Cash Flows from Operating Activities
     Six Months EndedJune 30,2010
    
    
    2009Net cash provided by operating activities (GAAP)
    
    $
    5,486
    
    
    $
    77,995(Draws) payments on floor plan notes payable
    
    
    44,504
    
    
    
    (64,022
    )Adjusted Cash Flows from Operating Activities (Non-GAAP)
    
    $
    49,990
    
    
    $
    13,973
  23




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##### Table of Contents



Cash Flows from Investing Activities
   Cash Flows from Financing Activities
    th
  24




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##### Table of Contents



Backlog
  Seasonality
  Cyclicality
  Environmental Standards and Other Governmental Regulations
     25




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##### Table of Contents



26




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##### Table of Contents



ITEM 3. Quantitative and Qualitative Disclosures about Market Risk.
       
 ITEM 4. Controls and Procedures.
    27




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##### Table of Contents



PART II. OTHER INFORMATION
 
 ITEM 1. Legal Proceedings.
  
 ITEM 1A. Risk Factors.
   
 ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds.
   Total Number of
    
    
    Maximum NumberShares
    
    
    (or ApproximatePurchased as
    
    
    Dollar Value) ofTotal
    
    
    Average
    
    
    Part of Publicly
    
    
    Shares that MayNumber of
    
    
    Price
    
    
    Announced
    
    
    Yet Be PurchasedShares
    
    
    Paid Per
    
    
    Plans or
    
    
    Under the Plans orPeriod
    
    Purchased
    
    
    Share
    
    
    Programs
    
    
    Programs (1)(2)April 1 - 30, 2010
    
    
    
    
    
    $
    0.00
    
    
    
    
    
    
    $
    2,093,321May 1 - 31, 2010
    
    
    
    
    
    
    0.00
    
    
    
    
    
    
    
    2,093,321June 1 - 30, 2010
    
    
    
    
    
    
    0.00
    
    
    
    
    
    
    
    2,093,3212nd Quarter Total
    
    
    
    
    
    $
    0.00
    
    
    
    
    
    
    $
    2,093,321
 (1)
    
    On July 22, 2008, the Companys Board of Directors approved a stock repurchase program
authorizing the Company to repurchase, from time to time, up to an aggregate of $20,000,000 of
its shares of Class A Common Stock and/or Class B Common Stock. The stock repurchase program
has no expiration date and may be suspended or discontinued at any time.(2)
    
    As of June 30, 2010, the Company has repurchased 1,639,843 shares of its Class B common
stock at a cost of $17.9 million, none of which occurred during the second quarter of 2010. 
 ITEM 3. Defaults Upon Senior Securities.
  
 ITEM 5. Other Information.
   28




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##### Table of Contents



ITEM 6. Exhibits.
 ExhibitNumber
    
    Exhibit Title2.1
    
    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 3.1 of the
Companys Current Report on Form 8-K (File No. 000-20797)
filed December 9, 2008)10.1
    
    Amended and Restated Rush Enterprises, Inc. 2007 Long-Term
Incentive Plan (incorporated herein by reference to the
Companys Definitive Proxy Statement on Schedule 14A, filed
with the Securities and Exchange Commission on April 6,
2010)10.2
    
    Amended and Restated 2006 Non-Employee Director Stock Plan,
as amended (incorporated by reference to Exhibit 10.2 of
the Companys Current Report on Form 8-K (File No.
000-20797) filed May 21, 2010)31.1*
    
    Certification of CEO pursuant to Rules 13a-14(a) and
15d-14(a) adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.31.2*
    
    Certification of CFO pursuant to Rules 13a-14(a) and
15d-14(a) adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.32.1**
    
    Certification of CEO pursuant to 18 U.S.C. Section 1350 as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.32.2**
    
    Certification of CFO pursuant to 18 U.S.C. Section 1350 as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
 *
    
    filed herewith**
    
    furnished herewith  29




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##### Table of Contents



SIGNATURES
  RUSH ENTERPRISES, INC.Date: August 9, 2010
    By:
    /S/ W.M. RUSTY RUSHW.M. Rusty RushPresident and Chief Executive Officer
(Principal Executive Officer)Date: August 9, 2010
    By:
    /S/ STEVEN L. KELLERSteven L. KellerVice President and Chief Financial Officer
(Principal Financial and Accounting Officer)  30




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EXHIBIT INDEX
 ExhibitNumber
    
    Exhibit Title31.1*
    
    Certification of CEO pursuant to Rules 13a-14(a) and
15d-14(a) adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.31.2*
    
    Certification of CFO pursuant to Rules 13a-14(a) and
15d-14(a) adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.32.1**
    
    Certification of CEO pursuant to 18 U.S.C. Section 1350 as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.32.2**
    
    Certification of CFO pursuant to 18 U.S.C. Section 1350 as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
 *
    
    filed herewith**
    
    furnished herewith  31