BROOKFIELD, Wis. – REV Group, Inc. (NYSE: REVG), a manufacturer of industry-leading specialty and recreational vehicles, today reported results for the three months ended July 31. Consolidated net sales in the third quarter 2024 were $579.4 million, compared to $680.0 million for the three months ended July 31, 2023. Net sales for the third quarter 2023 included $45.9 million attributable to Collins. Excluding the impact of the Collins divestiture, net sales decreased $54.7 million, or 8.6% compared to the prior year quarter. The decrease, excluding the impact of Collins, was primarily due to lower net sales in the Recreational Vehicles segment, partially offset by higher net sales in the Specialty Vehicles segment.
- Third quarter net sales of $579.4 million compared to $680.0 million in the prior year quarter
- Third quarter net income of $18.0 million compared to net income of $14.9 million in the prior year quarter
- Third quarter Adjusted EBITDA1 of $45.2 million compared to $39.4 million in the prior year quarter, the latter of which included $9.2 million of Adjusted EBITDA attributable to Collins Bus Corporation (“Collins”) which was divested on January 26, 2024
- Excluding the impact of the Collins divestiture, Adjusted EBITDA increased $15.0 million, or 49.7% compared to the prior year quarter.
- Third quarter Adjusted Net Income1 of $24.8 million compared to $20.9 million in the prior year quarter
- Updated full-year fiscal 2024 outlook:
- Net sales of $2.35 to $2.45 billion, net income of $226.0 to $240.0 million, Adjusted EBITDA of $155.0 to $165.0 million, and Adjusted Net Income of $76.0 to $89.0 million;
- Net cash from operating activities of $20.0 to $36.0 million, which includes approximately $71.0 million of income tax and transaction costs related to divestiture activities, and Adjusted Free Cash Flow1 of $61.0 to $72.0 million
The company’s third quarter 2024 net income was $18.0 million, or $0.35 per diluted share, compared to net income of $14.9 million, or $0.25 per diluted share, in the third quarter 2023. Adjusted Net Income for the third quarter 2024 was $24.8 million, or $0.48 per diluted share, compared to Adjusted Net Income of $20.9 million, or $0.35 per diluted share, in the third quarter 2023. Adjusted EBITDA in the third quarter 2024 was $45.2 million, compared to $39.4 million in the third quarter 2023. Adjusted EBITDA for the third quarter 2023 included $9.2 million attributable to Collins. Excluding the impact of the Collins divestiture, Adjusted EBITDA increased $15.0 million, or 49.7% compared to the prior year quarter. The increase was primarily due to the higher contribution from the Specialty Vehicles segment, partially offset by lower results in the Recreational Vehicles segment.
“We are pleased with the results of the Specialty Vehicles segment, which delivered double digit Adjusted EBITDA margin performance in the third quarter,” REV Group Inc. President and CEO, Mark Skonieczny, said. “Profitability benefited from another quarter of sequential and year-over-year improvements within the fire and ambulance businesses. The continued momentum demonstrated by these businesses positions us well for the future. Within the Recreational Vehicles segment, market conditions remain challenged, however, we continue to be proactive in managing our cost structure to align with end market demand and deliver operating margins in line with our expectations.”
REV Group Third Quarter Segment Highlights
Specialty Vehicles Segment
Specialty Vehicles segment net sales were $432.1 million in the third quarter 2024, a decrease of $34.1 million, or 7.3%, from $466.2 million in the third quarter 2023. Net sales for the third quarter 2023 included $45.9 million attributable to Collins. Excluding the impact of the Collins divestiture, net sales increased $11.8 million, or 2.8% compared to the prior year quarter. The increase in net sales compared to the prior year quarter was primarily due to price realization and increased shipments of fire apparatus, ambulance units, and municipal transit buses, partially offset by lower shipments of terminal trucks. Specialty Vehicles segment backlog at the end of the third quarter 2024 was $4,114.4 million compared to $3,728.2 million at the end of the third quarter 2023. Backlog at the end of the third quarter 2023 included $257.1 million related to Collins. Excluding the impact of the Collins divestiture, backlog increased $643.3 million compared to the prior year quarter. The increase was primarily the result of continued demand and order intake for fire apparatus and ambulance units, along with pricing actions, partially offset by a decrease in backlog related to the wind down of municipal transit bus operations, increased unit shipments, and lower order intake for terminal truck units.
Specialty Vehicles segment Adjusted EBITDA was $44.3 million in the third quarter 2024, an increase of $14.6 million, or 49.2%, from Adjusted EBITDA of $29.7 million in the third quarter 2023. Adjusted EBITDA for the third quarter 2023 included $9.2 million attributable to Collins. Excluding the impact of the Collins divestiture, Adjusted EBITDA increased $23.8 million, or 116.1% compared to the prior year quarter. Profitability within the segment benefited from price realization, higher sales volume of fire apparatus and ambulance units, and improved performance in the municipal transit bus business, partially offset by lower sales volume of terminal trucks.
Recreational Vehicles Segment
Recreational Vehicles segment net sales were $147.4 million in the third quarter 2024, a decrease of $67.1 million, or 31.3%, from $214.5 million in the third quarter 2023. The decrease in net sales compared to the prior year quarter was primarily due to decreased unit shipments and increased discounting. Recreational Vehicles segment backlog at the end of the third quarter 2024 was $240.3 million, a decrease of $168.3 million compared to $408.6 million at the end of the third quarter 2023. The decrease was primarily the result of lower order intake in certain categories, unit shipments against backlog, and order cancelations.
Recreational Vehicles segment Adjusted EBITDA was $9.4 million in the third quarter 2024, a decrease of $9.0 million, or 48.9%, from $18.4 million in the third quarter 2023. The decrease was primarily due to lower unit shipments, increased discounting, and inflationary pressures, partially offset by cost reduction actions.
Working Capital, Liquidity, and Capital Allocation
Net debt2 totaled $164.5 million as of July 31, 2024, including $50.5 million cash on hand. The company had $261.8 million available under its ABL revolving credit facility as of July 31, 2024, a decrease of $122.3 million as compared to the October 31, 2023 availability of $384.1 million. Trade working capital3 for the company as of July 31, 2024 was $322.7 million, compared to $318.5 million as of October 31, 2023. The increase was primarily due to a decrease in customer advances and accounts payable, partially offset by a decrease in accounts receivable and inventory. Capital expenditures in the third quarter 2024 were $5.9 million compared to $9.1 million in the third quarter 2023.
Quarterly Dividend
The company’s board of directors declared a regular quarterly cash dividend in the amount of $0.05 per share of common stock, payable on October 11, 2024, to shareholders of record on September 27, 2024, which equates to a rate of $0.20 per share of common stock on an annualized basis.
Conference Call
A conference call to discuss the company’s third quarter 2024 financial results and our outlook is scheduled for September 4, 2024, at 10:00 a.m. ET. A supplemental slide deck will be available on the REV Group, Inc. investor relations website. The call will be webcast simultaneously over the Internet. To access the webcast, listeners can go to http://investors.revgroup.com/investor-events-and-presentations/events at least 15 minutes prior to the event and follow instructions for listening to the webcast. An audio replay of the call and related question and answer session will be available for 12 months at this website.
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