Good day and thank you for standing by and welcome to the RUS Enterprises Inc. Reports 3rd Quarter 2021 Earnings Results Call. At this time, all participants are in a listen only mode. Please be advised that today's call is being recorded. I would now like to hand the conference over to Mr.
Rusty Russ, Chairman, CEO and President. Thank you.
Well, good morning, and welcome to our Q3 2021 earnings release conference call. On the call today are Mike McRoberts, Chief Operating Officer Steve Keller, Chief Financial Officer Derek Weaver, Executive Vice President Jay Hazelwood, Vice President and Controller and Michael Goldstone, Vice President, General Counsel and Corporate Secretary. Now Steve will say a few words regarding forward looking statements.
Certain statements we will make today are considered forward looking statements as defined in the Private Securities Litigation Reform Act of 1995. Because these statements include risks and uncertainties, our actual results may differ materially from those expressed or implied by such forward looking statements. Important factors that could cause actual results to differ materially from those expressed or implied by such forward looking statements include, but are not limited to, those discussed in our annual report on Form 10 ks for the year ended December 31, 2020, and in our other filings with the Securities and Exchange Commission.
As indicated in our news release, in the Q3, we achieved revenues of $1,270,000,000 And record high net income was $69,400,000 or $1.20 per diluted share. We are proud to declare a cash dividend of $0.19 per common share. We continue to see economic recovery and a strong freight environment throughout the country, which has created widespread demand for new and used trucks as well as aftermarket products and services. Our profitability was largely driven by our diligent expense management during the quarter. During 2020, we made it a priority to implement new processes and tools throughout our organization to control expenses throughout the truck cycle.
We believe these processes will allow us to effectively control expenses as we continue to implement our strategic growth initiatives and And we'll continue to contribute to higher pre tax profit margins than we have historically experienced. Looking ahead though, demand remains healthy for new trucks and aftermarket parts and services. Component supply chain issues continue to challenge the industry, pushing new truck deliveries into 2022 and impacting the availability of aftermarket parts. These supply constraints coupled with normal seasonal aftermarket softness In the winter months and the fact that we have 5 fewer working days in the 4th quarter compared to the 3rd quarter will negatively impact our earnings in the 4th quarter. However, we believe customer demand will remain robust and supply constraints will subside and that 2022 will be a strong year for the commercial vehicle industry and Rush.
In the aftermarket, our parts, service and body shop revenues were $463,000,000 and our absorption ratio was 134% in the 3rd quarter. Our aftermarket revenues increased 15.7% year over year, which is primarily a result of our continued focus on our strategic initiatives In the limited availability of new trucks, which helps drive demand for parts and services of vehicles that are in operation, Our parts sales were historically high and we experienced healthy activity in most market segments. Service revenues are accelerating gradually, largely due to hiring more technicians and improving the proficiency of our workforce, as well as our enhanced service offerings. We believe demand for aftermarket parts and service is strong, but we expect supply constraints to continue to impact the industry through the middle of 2022. We continue to focus on our strategic aftermarket initiatives and expect our 4th quarter performance to remain strong, though we expect normal seasonal decline over the next couple of months.
Turning to truck sales, in the Q2, we sold 2,537 new Class 8 trucks, accounting for 4.7% of the total U. S. Class 8 market. The healthy economy, strong freight rates led to widespread demand for new Class A trucks, but our results were negatively impacted by manufacturers limited production capabilities. ACT Research forecasts U.
S. Retail sales to be 228,500 Units in 2021, up 16.8 percent from 2020. We expect component supply constraints will continue to delay some Class 8 Truck push some Class Truck Sales into next year, which will likely impact our performance in the Q4. However, We believe Class 8 new truck sales will accelerate in 2022 when manufacturers are able to increase production. Our Class 4-seven new truck sales reached 2,792 units in the 3rd quarter, accounting for 4.7% of the U.
S. Market. We experienced healthy activity for many market segments, particularly food service and lease and rental, but the limited production of new medium duty trucks Navily impacted our results. ACT Forrester forecasts U. S.
Class 4-seven retail sales to be 251,000 units in 20 21, up 8% from 2020. As we look ahead, we believe Class 4 through 7 truck production will not increase as quickly as Class 8. We are pleased that HINO is back in production, but we do not expect the other medium duty manufacturers we represent to significantly ramp up production for some time. That said, demand remains strong and we believe our 4th quarter Class 4-seven results will be on pace with our 3rd quarter results. Our used truck sales reached 17 12 units in the 3rd quarter, down 16.7% year over year.
While our unit sales are down compared to last year, used truck demand and values remain strong, largely due to production limitations of new Class 8 trucks. We expect used truck demand and values to remain strong in the 4th quarter and begin to normalize when new truck production catches up Eventually with customer demand. It is becoming more challenging to maintain a healthy used truck inventory, but we believe our 4th quarter used truck sales will be consistent Regarding network growth, this week we acquired an independent parts and service facility in Victorville, California that we will convert into a full service Peterbilt dealership. We also have plans to acquire full service Hino and Isuzu dealership in Elk Grove, Illinois next month. Further, we entered into an agreement with the Summit Truck Group to acquire full service dealerships in several states, representing International, IC Bus, Ideal Lease, Isuzu and other manufacturers.
We expect that transition to close in December. Additionally, we plan to close our previously announced agreement with Cummins to acquire 50% of interest in Momentum Fuel Technologies later this year. It is important that I thank our employees for their unwavering commitment to growing our business and supporting our customers In recognition of their hard work on the front lines during the pandemic, we are happy to issue a one time discretionary $1,000 bonus to all employees in mid December. This is one way for us to express our gratitude to our employees for their impressive work over the past year. With that, I'll take your questions.
And thank you. And our first question comes from Jamie Cook from Credit Suisse. Your line is now
open. Good morning, Jamie.
Jamie, is your line on mute? Could you please unmute your phone?
Sorry. Sorry, I was on mute. Good morning, everyone, and good job on execution as usual. I guess, Rusty, first question, you talked about Class ramping faster than 4% to 7%, if you could just provide some color on that and how you think about production ramping in general in 2022? My second question is, can you sort of address the market's approach to pricing with the incremental costs?
And then I guess last, Just any color you can provide on sort of the acquisitions in the JV that you announced and sort of incremental earnings accretion to 2022? Thanks.
Okay, Jamie.
I'll start
at the high top. Well, when you compare Class 4 through 7 versus Class 8, and why did I say Class 4 through 7 will ramp up slower, is the fact And it mainly is it the 2 large manufacturers that you will probably see Class 8 because demand is extremely strong on the 8 side, right? And also, there's a more expensive larger product. And I think even for us, if you look historically, Margins typically tend to be better on the 8 side. So, when you're in a supply constraint arena, which you are now, you have to pick and choose, right, Because there are a lot of same you have a lot of same components, right?
So obviously, the 8 demand, I think, is even stronger than 4 through 7 right now. And given the vehicles themselves, you have to pick and choose. You got to make decisions because of the supply constraints we've been dealing with. So I think In the favor of the Class 8 right now given the demand and also the profitability of the products, you want to get real Because it's cost twice as much, right? So obviously, so it only makes sense that margins tend to be better Based on the revenues, I know to begin with.
Do you before you go
to the next part, do you see any evidence of double loading? Are you worried about that? People worry about double ordering if some of this demand is fake.
No, I don't feel I know I don't feel that way about our order board. I don't I think that look, in my mind, what's happened is demand we look how things ramped up since July of last year. I mean, the country blew up, right, from a freight perspective. Everybody had money, we were buying everything. And so demand was there.
So We ended up when we ran into these supply shortages, starting in really March, April, By the time the year is out, if you ask me, we probably pushed 40,000 or more on the bottom side, 40,000 Class 8 units that should have been built this year that are not going to be built. Well, when you think about it, all you're doing is pressing that demand Into 'twenty two. 'twenty two was supposed to be a pretty good year. Then you run into 'twenty three, right? You run into 'twenty three and you got CARB and pre buy In those states, those 15 states, if it all goes down that fast in those other states, but for sure in California, Because the price of diesel engines is going through going way up.
I know there's a lot of different numbers as to how much, but they're going way up in 'twenty four. So I don't see this thing slowing down till 'twenty four. Outside,
there's
some big economic issue, okay, Because I don't see that we're going to catch up to demand right now. I mean, manufacturers are not meeting demand at the moment. And so it just keeps pushing it out and pushing it out. Unless there's some big economic downturn in the country, I don't see that demand going away because you're not really going to be You're just going to be running the right replacement. I think replacement is in the 220s now.
And that's what this is U. S. Retail. So I don't think You know, when you look, last year was under that, obviously, like 190 or something, 192 or something. So, I think you had this huge Increased backup in GDP and freight and given what we see in 2022 and 2023, I don't see double ordering.
I mean, I don't
think
we have it. I mean, I can let me give you some data points. When I talk about what I really care about is what's happening in 2022 and 2023. Our backlog A year ago at this time was about $1,100,000,000 okay? Into Q3 excuse me, into Q2, it was $2,200,000,000 and it's $2,700,000,000 now.
Could there be a little something in there? Of course, there can. There probably is there's never an order board that's perfectly clean. But I don't see any evidence Based in there that even if there was a little bit, there's still backlogs big. So we've got to catch up with what we've missed.
So I'll try to I'll leave that one alone. I mean, I reserve a little
bit But then Russ, with the $2,700,000,000 in backlog, can you just address How you're approaching sort of pricing then, like with just material
cost pricing? I'm sort
of being driven a lot by right, you're right. I'm being driven a lot by the OEMs, Okay. Okay. We all know what costs have gone up. Everybody has been scrambling on the OEM side and the supplier side, And they're paying more.
Obviously, prices of trucks are going up. Anybody can't see the inflationary pressures that are out there. Sometimes, I know people talk about them a little bit, but I see them are much larger sometimes just in my in real life, I for sure see it in our business That they're out there. When you ask about pricing, you better believe pricing is up. So, but it's Trying to keep up from the change.
It's not just the OEMs, they're getting hit for pricing, right? They're getting hit hard on little not just Supply, but if you can't get supply, whether they're getting hit on the pricing at the same time because it's the old supply and demand. It's been like that forever. And so that's really, it just feeds from the bottom of the food chain up to the top. And I think that's what you're seeing out there right now.
I don't have exact numbers, But obviously, that ends up getting passed on to the end user, right, at the end of the day. Or it either comes out of margin or it gets passed on, 1 or the other. So, I would imagine sometimes on the front side because it accelerates so fast, it's hard to get it passed on. But this didn't just start yesterday. It started last year or 9 months ago, 10 months ago.
So as you clear out What you should be putting into your backlog in 2022 should catch up with the pricing pressures that you've had. That's the way it's supposed to work. Okay. It will work. So you got a backlog, and so that makes it hard to work your way through commitments, So hopefully, most people do.
And then get new pricing out into the products that you're selling now The problem is you've got so much to post out because you got it. There's been no supply. I mean, look, we delivered only 2,500 and something trucks, Class And that's why I'm so proud of the quarter is because the quarter was you look at it from a whole, what everybody used to view our company, We have so many trucks, okay? And you look at the performance and it's just driving to the things we've talked about doing for a long time. And I think you're seeing the fruition of it and the results in these numbers.
And you asked what was your third question, Jamie?
My third question was just I'm just trying Figure out all the M and A that you're doing like what's incremental
earnings. Oh, I'd love to talk about that. It's been so long since I've never been able to talk about M and A. You bet I'll talk about it. Well, it gets hard out there, right, to find stuff.
But a little deal, we just talked about it as a nice independent deal we closed. Just to add on, it's about single. The deal is hopefully in the Midwest and Elk Grove is about single. The Summit deal though, on the other hand, You know, represents quite a bit of growth for us. When you look at it, it's the 2nd largest international dealer, okay?
It fills in 3 states. It fills in 3 states. We're really you're going to get some rusty silliness here. But if you look at Kansas, you look at Missouri, and you look at Arkansas, We don't have anything there. And Memphis and so I don't know, 17, 18 stores.
And as I tell people, it's like you've Making that puzzle and the dog took a piece and chewed it up, we can't find it. Well, those 3 states plug right into our map. I'm looking at my map right It makes me on the wall here and it's a perfect fit. And it would be hard for us to have found something that fits more perfectly from a geographic perspective. Now, It's a good well run group.
We hope we can run it even better. And it will take, we'll mold that group into our over time. We'll close it in the middle of December. We're excited about that. The Cummins JV, super excited about that.
Momentum, we've been in that fuel system business since 14, you remember back in that days natural gas was going to be 10% of the market by 2017, never got off of 2, Okay. But Cummins must believe something about the future and we do too. We believe that RNG We'll be a bridge technology as we get deeper into this decade, okay? And so we're excited. And this is not something that's going We finally got that I finally get that business to breakeven on our own, okay, This last year or so, but there is going to be an opportunity in 'twenty five or 'twenty six or 'twenty seven For that to be a bridge technology, and we believe partnering with Cummins, I was looking the other day and I thought they had pretty good brand equity It will make a great partner in the fuel system business because they're the only ones that build a natural gas engine.
You may not have seen, but last week they announced They're going to build a 15 liter natural gas engine, which is really going to open up the market, we believe from mid decade, as I said. So we're Pretty excited about that too. So, there you go. Again, I tried to answer
the line
as best I could.
You did. Thank you so much. All right. And good job as usual. I'll let someone else ask the question.
Thanks.
And thank you. And our next question comes from Justin Long from Stephens. Your line is now open.
Good morning and congrats on the quarter. Thanks, Justin. So maybe to just put a bow on the Q4, I know typically you see a seasonal decline. Rusty, You called out 5 fewer working days, but is there any way you can help us think about the magnitude of the impact from 5 fewer working days in the 4th quarter?
Sure. It's 2 things. Look, these are just little bumps. We know about Supply chain issues, we're dealing with them right now. The problem I'm going to answer your first question and then I'll add to it and we'll get past this.
4th quarter, we're going to have a good 4th quarter. Point being though, the way it falls out, we've got 5 less working days. Typically, the 4th quarter is about 3, but the way the holidays have worked this year And we're pulling a holiday out of 'twenty two and sticking it back in 'twenty one because that's January 1 and we're giving off December 31, which is the right thing to do on a Friday. So impactfully, without getting into all that mess, we do $2,600,000 of gross profit a day in parts and service. So, you can do the math, that's about 13%.
I think truck gross might be down some, just given we've had a lot of supply chain issues. But as I said, I'm not worried it's going to be a good quarter. It won't be the 3rd quarter, but it will be a great quarter, really good quarter. The good part is 2022 and 2020, so you're talking about maybe $20,000,000 of gross profit or so. But at the same time, you can extrapolate it from there.
Other than that, everything should be running smooth and good. And we just want to be a better Q4 than last year. And But Q3 is always typically our best quarter. If you go back historically, not every time, but historically, the Q3 is always our best quarter. So, but listen, 2022 and 2023 are set up.
When you look at the growth we've had in parts and service And look, with the backlog, I talked about it a minute ago, I'm so I'm very and these acquisitions that we're plugging in, As they as we get them implemented and integrated into the organization, things look great, so from that perspective.
Well, and that's where I wanted to go with my next question as we kind of zoom out and look at the next couple of years. You talked earlier about the Truck cycle being extended through 2023, but could you maybe expand a little bit more on the parts and service business? How you See that growing the next couple of years and then incremental margins as well because I think when you put together the truck cycle with Parts and service recovering and incremental margins, it implies that EPS can still grow nicely the next couple of years, but would love to get your thoughts around all of that.
Sure. No, I would agree with that. And you have one piece out and that's M and A, right? I never really gave an answer because I'm going to integrate it, but I can tell you this, it's accretive, Okay. We're not doing it to be unaccretive, I can promise you.
So we'll sort out exactly what the M and A brings to the organization, but it will be nice. From a margin perspective, we had super high margins all this quarter, but I see nothing that's going to stay in the way You know, of us continuing on the parts and service side to continue to grow. Now, I can't pronounce 15% growth rates quarter over quarter. Remember last year, we were coming out of COVID, etcetera. So your baseline was there, but it is We are targeting high single, 8%, 9% growth rates next year, which I do believe in parts and service Are doable and very achievable.
And I'm not going to count, I'm not going to talk about any more than that, But I do believe that we will continue to see those type of growth rates in the first half and into next year. I think we can do that. If Look at all the initiatives over the last few years, if you look at some of the other things we're doing now that I don't want to talk about, but some of the things we're doing to go to market. And that's the piece of the business. I mean, we ran 134 percent absorption.
That's a record for us. It was just an operating metric, but it's something we've key on Pretty, quite heavily. So, from a parts and service perspective, it's there. You heard me talk about the backlog from a truck sales perspective. It's there.
It just can take some execution on our part and I'll let history speak about whether we can execute or not. So We've been able to do it before and I don't and our team only continues to get better. It's not me, it's all the folks throughout the organization and Just excited about where we're going. And those are easy things to look at. We do believe margins are sustainable.
And maybe not all of the exact Where they are, they're going to be sustainable higher than what they were a couple of years ago for sure. We ran pretty high margins in parts and service, probably as big as we ever have this last quarter. Well, they'll be up in that range. And you add in some, like I said, 9% growth rates and stuff like that next year, which I'm hoping to do better, but if we're going to do that, I hope, believe. You can you all can extrapolate the numbers from there.
With the managed expense piece, don't lose sight The managed expense fees, G and A sequentially was down actually. And I don't expect that to stay down, but it was actually down a couple of points from Q2. So, but I do expect us to be able to manage. I talked about that a couple of years ago, if you remember, about when we come out of all We're going to do a better job, really last year, we're going to do a better job of managing our expenses As we grow our revenues and our gross profits. So, so far so good, and we look forward to continuing that into the next couple of years.
Great. Very helpful. Thanks, Rusty.
You bet. Thank you, sir.
And thank you. And our next question comes from Andrew Obin from Bank of America. Your line is now open.
Hey, Rusty. How are you?
Good. Andrew, how are you today?
I'm good. Thank So just go back to this comment on expanding margin and expense management, you sort of highlighted Expense management statement early on in your prepared remarks, I think this is sort of a new focus. Can you just expand? It does seem that your approach to cost in the cycle a little bit different because I think historically Once things went up, right, you were very good at sort of keeping costs in control early on in the cycle. But as the cycle sort of got going, costs came back.
Can you
just go more in-depth just to talk about what are you guys doing? What initiatives do you have internally to sort of change your approach to costs This time around because execution seems to be superb. Thank you.
Thank you, Andrew. I appreciate that. Well, Without giving, I won't give you as much detail as I can. Training, I think our managers, we have put in some new processes And new controls that as we grow back, we're only going to spend so much money of what we grow. If our gross profit goes up X, we're going to spend X, right?
And that's what we're going to spend, and we're going to stick to it. We almost internally, we call it A salary cap. It's like in sports sometimes, right? Doesn't mean you can't grow because remember, we're not I don't loan money. I don't do this.
I work on trucks. I work on parts. I deliver Self parts, we deliver them, we do this. It takes people, but we want to make sure we are staffed. Remember, 2 thirds of our costs are people At the end of the day, so we will make sure that we don't get out ahead of our skis and overstaff.
It doesn't mean we don't grow, we don't add people, but we do it with some tools That everyone is pretty dialed into. It took a lot of work this year. Now, we've got to continue that in the future, but we're pretty dialed in So, we're only going to spend X of every dollar we get in the growth spot. So, we're not going to get way out over it. And these 2 layers, it's a salary cap, it's this, we We can call it, there's other tools, the names we can give to it.
But the guys have been very, very folks, all the managers have been very diligent. I'm proud of them And the teams have too. And this is in spite of just these last few months were tough from a COVID perspective, but I had the 2nd, 4th worst month In the Q3 that I've ever had with people out, dealing with. So these controls are not leaving the organization And we're still going to continue to invest on the corporate side. We're going to continue to invest, but just at a proper pace.
Hopefully, you learn something as you get a little bit older. It's not that difficult. I say that, but sometimes everybody gets caught up. We are running and things are growing and you're just not as diligent as you should be. I think there's some of the lessons that we have learned And the last 2 years are just going to continue to bode well and we're focused on it.
We will Expenses will grow, but they will grow in relation to what gross profits grow. And we will end up keeping more of it than we historically have. And I'm very confident Our ability to do that.
Thank you, Rusty. And just to follow-up the question, you guys have very good systems. Just the usual question for me. Could you just walk us through what you're seeing by key industry verticals, residential, nonresidential, oil and gas, The corporate customers' ways, maybe what we're seeing across the country in terms of macro because you do have very unique footprints. Thank you.
You bet. I don't want to say everything is good, but because oil and gas is still oil and gas. I don't expect to see the CapEx spend in it, but we've seen a slight pickup here recently and the services that are being asked for, We sure have. As you've seen, the price of oil obviously has gone up. We've seen a slight pickup, but I don't think people I don't expect companies to be as undisciplined as they were historically Our money to flow like it did historically, but I do think there's some upside still there as it's gradually been picking up from its trough.
Other industries, the over the road business, I mean, is great, right? I mean, it's really good because remember, if we're 40,000 trucks Short of what demand was, that means people are running their trucks longer, right? So when you look at the TL side, the LTL side, Extremely strong for those customers, customers we have. We've got a couple of 3 or 4 big LTL carriers and our business with them is good. When you look at housing and construction, still strong.
Demand for mixer trucks, demand For garbage trucks in the refuse side, very strong. Parts and service, strong in those sectors. I mean, I'm sounding like a broken record repeating my So, but that's what we are truly rental and leasing customers. They're look at well, I need to point out, our leasing division It's had the most outstanding year they've ever had. I mean, it's just been over the top.
If you look at our leasing margins and rental margins, I mean, they're just They're above and beyond what I would thought we could have been able to do. And it's not all driven by gain on sale. They're operating because rental is utilized strong and leasing strong. Now I will tell you this, because of lack of product, you're having to extend leases and do things on other trucks that normally you would be taking out of service because you can't get trucks as You can't get as many trucks as you need, but that still won't inhibit, we believe them from having outstanding year in 'twenty two. So Andrew, I know it sounds a little bit, I mean, Even municipal hasn't been that.
Bus has school buses have been decent. I mean, There's a lot of it's been a pretty rosy picture, which always scares you when it looks that rosy out there. But at the same time, it is what you can see now. Right now, I don't see that changing a lot. Like I'm not an economist or anything like that.
My biggest concern is inflation, I'll be honest with you, Runaway inflation, because I see the inflation out there. Sometimes I look at the numbers that are printed and I go, okay. But You know, other than that, our business as an industry, broadly looking at it across and that goes from Florida to California. I don't see any reason that is having is bad right now. Some better than others, but broadly speaking, everything looks Good.
No slowdown on resi as far as I know because on light commercial, once
We haven't seen it yet. We haven't seen it yet because there's still I believe there's something out there, Randall lurking, But we have not seen it in some of our areas, especially here in Texas and whatever. I mean, they're putting up sufficient everywhere around here. This is the state we're typically some of the states we're in like Florida and here, they're still growing, Okay. So, I mean, I'm sure I can pick a residential pocket in some area, but I'm not up to date to pick it by state.
But I can tell you here in Florida, a couple other states, it's still blowing up pretty good.
Well, Rusty, thank you. And I'm glad to see that the market today is rewarding your team for all the hard
And our next question comes from Joel Tiss from BMO. Your line is now open.
Hey, guys. How is it going?
Going well, Joel. How are you?
All right. That's quite the entourage you have You introduced at the beginning of every call now.
That hasn't changed much.
Yes. You just do.
It does. I don't think so, but that's okay. The same one I've introduced in the last couple of years. It's okay, Julien. I know you're getting up there, Joel.
It's okay.
Yes. I was going to say maybe my hearing aid batteries haven't been updated lately.
Probably not. But if you need help, I'll get you a good one. We're in a good place to go get them replaced. There you go.
Can you talk a little about where your parts and service mix might be 3 years from now? Like just sort of the flow of what you're looking at And what you've announced in terms of acquisitions and the growth rates and all that, just trying to give us a little bit of a guidepost?
Well, the growth rates I gave you was on current same store basis, right? I've got to bring these other stores in to our organization. I think there's some upside. Look, it's a well run company, no question. Well, I think with some of our systems and some of our stuff, I think there's some upside on the acquisition, especially from a technician perspective.
You look out there and I got 500 mobile trucks, they got a couple. I mean, things like that. There'll be some of the things we do and Some of our initiatives, which actually one of our big initiatives in the next couple of years, is to increase our mobile fleet a lot. Like I said, high single digits For same store growth, parts and service,
parts
growth, service growth will probably be more steady and gradual. You know, Hank, I don't mind looking back 3 years ago. We had all those technicians. We did real good the 1st year. Then the 2nd year, we just added technicians, but they really weren't good technicians.
So we had to purge some, which we have, which is our proficiency backup. Now we're actually adding back much more strategically, much more gradual and our returns Way higher and we're going to keep it at that pace. We'd like to add a couple of 100 technicians over this year to our same store growth next year, not 500 like we wanted to Few years ago, I don't think it's possible to do that and do it right with the right proficient technicians, because you can't have skilled ones all the time. You have to take 1 is their level 1s and 2s and train them up. And it's just you're overburdening and you have to carry, they're not producing for themselves.
But we think we can continue to gradually add service. I think the parts business will continue to go up. Look, inflation is going to help drive part of itself to begin with, when it comes from a revenue perspective. When you look at what some of the prices that are coming in on the price tapes on parts, they're going up like trucks, like everything you see in the grocery store too right now, as I said. It's one of the things you worry about.
But I think we will still out we're going to try to outrun the market And take share. We had a little hiccup last year, but we feel really good that we're taking share right now And going back, getting back on track, I know we are, results speak to that, of what we want to do. We just want to take share. We want If the market is up 7%, I want to be up 9%, right? I don't need to take it all one day, but just consistently take share over time and we believe we can do that, Especially when you look at like I said, we plug in this new acquisition, the integration of these stores into our map, Well, it's a differentiator in my mind.
It helps continue to allow us to differentiate from a geographic perspective. Now, it's what you do with that geography and how you go to market. And that's what we're trying to do is tie everything together that we have as best we can From a keep trucks up and running, right? Different when you go to market with us, you get the same price and you get all that from one coast to the other coast. In like 20, I don't know how many states we've been, 27, 28, and we'll cover probably 70% or more of all the trucks sold inside our geography.
So, we'll continue to press that forward and hopefully that allows us with our systems and stuff to gain share. That's our goal on the parts side and then we got our goal on the other side. As I said in the acquisition, we've got a goal in the next 5 years, I want to double my mobile service fleet. I I know I'm throwing it out there, but that's a good goal we came up with at our last strategic off-site meeting. We believe that the customer base is going to be demanding that.
We believe, especially with technology changes that are coming and things like that, you see it in the automotive side. And we've always done it here, but we're going to do a better job of it, Even though we've got the biggest one from any dealership perspective by far, mobile service fleet, we're going to get bigger. So, we've got the ability to do it. We've got the expertise and then we obviously get the assets. So those are just different things we've got going to I know I'm not giving you exact numbers, but I'm trying to tell you that the tools in the toolbox, we believe we've got those tools and we're going to keep pressing forward with them.
And any unusual opportunities from all these trucking businesses being separated from their kind of conglomerate parents?
Trucking businesses, I'm trying to follow you.
So like Avecho getting Spun out and the Freightliner business coming out of Daimler and
No, I don't see anything for us right now. You know, I don't see any look, my 2 Class 8 OEMs are pretty set, okay. I've got 2. I'm not going to be able to be with the others, okay. They're not going to allow me, Okay.
Remember there are state laws and things, franchise things inside of agreements. I'm going to I'm a pack our Peterbilt And an Avastro when it comes to Class A person. There could be, I think there might be other opportunities. Now my OEMs with new technologies coming, It's going to breed a little confusion in the marketplace, not yet. Everybody talks about it all right now.
Just wait for a couple of 3 years and see. And I believe our OEMs will be leading the back in that. But there are other independent people out there, other technologies that it's going to be interesting to watch, and we'll have our eyes out there. But I do believe in our OEMs and their The ability is to meet the changing technologies that are going to be demanded by government by the governments. I didn't believe We might be pushing it a little too far.
I think that some of the demands, when we talk about electric And hydrogen and fuel cell and all the other good stuff, the government's better be careful pressing it too hard because we got to catch up I know we've got to clean things up. But those types of things will be where opportunities might come that I can't see right now. But I'm very comfortable with the OEMs I have Participating in that transition. This is a transitionary decade like never seen. Transition creates a little bit of confusion, which creates opportunity.
Trust me, we're poised.
And just last and maybe you kind of already answered it that it's too far away, but any do you feel any need To get into like EV charging business or anything like that, like things that you're thinking about kind of couple of years out Or it's just way too early.
No, I know it's not way too early. We're looking at a lot of stuff. By this time next year, every store in California We'll be solar and have all the charging stuff in, okay. Obviously, we've got to meet the needs of the California is the leader in it, right. So we'll be there a year from now.
That'll be where we're learning, right. We're learning with customers. We have trucks we sold. We have electric trucks we Sold in different marketplaces. I'm not going to get into specifics.
And we look forward to doing more around that space. But again, I believe I'm not here, you all don't want to listen to me talk. You probably already heard enough. But I believe it's going to be market segment driven as to what technologies went out. I think we have a lot of obviously in class 6, 7, Time we get to the end of this decade, I'm not sure it will be 50% or more.
Electric, it's not going to be that way. I'm heavy, Yes, I see that on the TL side. You'll get it in certain applications and certain market segments, but that's not going to, I believe, work for just Pure TL over the road, at least not now. It could be in 20 years or so, but I don't think we're there with that. But you've got folks that I know hydrogen, some people go no, some people go, oh, yeah.
There's a lot of things going on, and that's what's going to create some confusion As I think it's transition over the next decade driven by we all had to deal with ESG and it's real, The environmental piece and but I think as I said, technologies will We driven just by market segments, we'll adapt to whatever makes sense. Diesel is not diesel will be phased out over time. It needs to be, But it's not going away right now, okay. We're going to be multi pronged and working with whatever technology is out there, But always try to be on the leading, not bleeding edge.
Okay. That's awesome. Thank you so much.
Thank you, Joe. See you soon.
And thank you. And I'm showing no further questions. I would now like to turn the call back to Mr. Rusty Rush, Chairman and Chief Executive Officer for closing remarks.
Thank you. Well, I appreciate everybody's time. Obviously, It'll be a longer time period till we talk in February. So I want to wish everyone happy holidays in between. Enjoy your families and enjoy the time that you get to spend with them.
And we will talk to you in February. Thank you very much.
Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.