Rush Enterprises (RUSHA) risk factors, FY2025 10-K

Risks Related to Our Business Operations

1. 01We are dependent upon PACCAR for the supply of Peterbilt trucks and parts, as well as the financing of Peterbilt trucks, the sale of which generates the majority of our revenues
2. 02the maintenance of goodwill associated with the Peterbilt brand, which can be adversely affected by decisions made by PACCAR, Peterbilt and the owners of other Peterbilt dealerships
3. 03We are dependent upon International Motors for the supply of International trucks and parts and IC buses and parts, the sale of which generate a significant portion of our revenues
4. 04the overall success of International Motors; and
5. 05Our dealership agreements may be terminable upon a change of control, and we cannot control whether our controlling shareholder and management maintain their current ownership positions
6. 06Our dealership agreements are non-exclusive and have relatively short terms, which could result in nonrenewal or imposition of less favorable terms upon renewal
7. 07Our growth strategies may be unsuccessful if we are unable to successfully execute our strategic initiatives or identify and complete future acquisitions
8. 08In the long-term, technological advances in the commercial vehicle industry, including drivetrain electrification or other alternative fuel technologies, could have a material adverse effect on our business
9. 09We use AI in our business and challenges with properly incorporating AI into our business and managing its use could result in reputational harm, competitive harm and legal liabilityNew
10. 10Climate change concerns may impact our business in the future; natural disasters and adverse weather events can disrupt our business

Risks Related to Financial and Economic Matters

1. 11We may be required to obtain additional financing to maintain adequate inventory levels
2. 12Changes in interest rates could have a negative adverse effect on our profitability
3. 13The dollar amount of our backlog, as stated at any given time, is not necessarily indicative of our future earnings37% rewritten
4. 14Impairment in the carrying value of goodwill and other indefinite-lived intangible assets could negatively affect our operating results
5. 15Our business is subject to a number of economic risks
6. 16We depend on relationships with the manufacturers we represent and component suppliers for sales incentives, discounts and similar programs which are material to our operations
7. 17We 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

Risks Related to Legal and Regulatory Matters

1. 18If state dealer laws are repealed or weakened, our dealerships will be more susceptible to termination, nonrenewal or renegotiation of their dealership agreements
2. 19We are subject to risks associated with commercial vehicles and parts manufactured outside of the United States, and the Commercial Vehicle Tariffs may impact demand for certain of the commercial vehicles and parts that we sell45% rewritten
3. 20The commercial vehicles that we sell are subject to federal and state regulations focused on reducing engine emissions, and we are dependent on the manufacturers that we represent to produce or supply engines that comply with such regulations72% rewritten
4. 21Disruptions to our information technology systems and breaches in data or system security could adversely affect our business
5. 22We are exposed to a variety of claims relating to our business and the liability associated with such claims may exceed the level of our insurance coverage
6. 23Our dealerships are subject to federal, state and local environmental regulations that may result in claims and liabilities, which could be material
7. 24We have operations in Canada. As a result, we may incur losses from the impact of foreign currency fluctuations and have higher costs than we otherwise would have due to the need to comply with foreign laws

Risks Related to Our Common Stock

1. 25We are controlled by one shareholder and his affiliate
2. 26Our dealership agreements could discourage another company from acquiring us
3. 27Our Class A common stock has limited voting power