FISCAL THIRD QUARTER 2021 RESULTS SEPTEMBER 8, 2021 CAUTIONARY STATEMENT & NON-GAAP MEASURES Disclaimers Note Regarding Non-GAAP Measures REV Group reports its financial results in accordance with U.S. generally accepted accounting principles ("GAAP"). However, management believes that the evaluation of REV Group's ongoing operating results may be enhanced by a presentation of Adjusted EBITDA, Adjusted Net Income, Free Cash Flow and Return on Invested Capital, which are non-GAAP financial measures. Adjusted ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-37999 REV Group, Inc. Securities registered pursuant to Section 12(b) of the Act: | Title of each class | Trading Symbol | Name of each exchange on which registered ...

Financial Data and Key Metrics Changes - The company reported second quarter net sales of $644 million, an 18% increase compared to the same quarter last year, with organic sales growth of 26% when excluding divested shuttle businesses [9][10] - Adjusted EBITDA for the quarter was $45.5 million, with an adjusted EBITDA margin of 7.1%, marking the best second quarter adjusted EBITDA results since the company's IPO in 2017 [7][11] - Year-to-date cash conversion improved to 82%, with a target of over 90% free cash flow conversion on adjusted net income [14][50] Business Line Data and Key Metrics Changes - Fire & Emergency segment sales were $308 million, a 6% increase year-over-year, driven by higher shipments of fire apparatus and price realization [31] - Recreation segment sales surged 190% to $238 million, attributed to increased unit shipments across all categories and lower discounts [42] - Commercial segment sales decreased by 31% to $98 million, primarily due to the divestiture of shuttle bus businesses, but adjusted EBITDA increased by 4% to $8.3 million [37][39] Market Data and Key Metrics Changes - The company exited the second quarter with a record backlog of $2.3 billion, with a book-to-bill ratio of 1.5 [10] - The Fire & Emergency backlog was $1.1 billion, down 1% year-over-year, while the Recreation segment backlog increased to $941 million, marking the fourth consecutive quarterly record [35][45] - The commercial segment backlog was $303 million, reflecting strong order intake, including improved orders for school buses [40] Company Strategy and Development Direction - The company is focused on operational excellence, reducing complexity, and improving efficiencies to enhance performance and expand margins [15][22] - There is a commitment to electrification of the commercial vehicle fleet, with several announcements regarding electric vehicle technologies and partnerships [23][24] - The company has restructured its capital to a new $550 million revolver, allowing for flexibility in pursuing financial objectives and returning cash to shareholders [12][13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing challenges in supply chain and labor constraints but expressed confidence in mitigating these impacts through operational improvements [7][11] - The company expects continued margin improvement in the long term, despite facing supply chain disruptions [11] - Management reiterated guidance for fiscal year 2021, expecting sales between $2.45 billion and $2.6 billion, with adjusted EBITDA raised to a range of $145 million to $160 million [51][52] Other Important Information - The board reinstated the quarterly dividend, reflecting confidence in the company's long-term financial outlook [14][50] - The company is actively evaluating capacity expansion in response to strong demand, particularly in the RV segment [64] Q&A Session Summary Question: Are customers placing orders early for 2022 due to supply chain concerns? - Management noted some early orders in the RV segment but did not see broad movements related to supply chain issues [63] Question: Are there plans to expand capacity in the RV segment? - Management is evaluating facilities to optimize margins and prepare for potential market slowdowns while currently seeing strong demand [64] Question: What is the margin differential for Class A products? - Class A margins are expected to be in the mid-single digits, while other segments perform at double-digit margins [71] Question: How did the quarter shape the updated guidance? - The guidance increase reflects strong throughput and improved performance, particularly in the Recreation segment [73][76] Question: What is the outlook for fiscal 2023 targets? - Management remains confident in achieving fiscal 2023 targets, with potential adjustments as the year progresses [78] Question: Can you discuss the supply chain management approach compared to previous management? - Management highlighted significant changes in procurement and supply chain strategies, leading to better management of current shortages [83][86] Question: How is the company managing price-cost dynamics? - The company has been able to offset inflation through price realization and purchasing initiatives, with a focus on maintaining positive price-cost relationships [90][102]

FISCAL SECOND QUARTER 2021 RESULTS JUNE 8, 2021 CAUTIONARY STATEMENT & NON-GAAP MEASURES Disclaimers Note Regarding Non-GAAP Measures REV Group reports its financial results in accordance with U.S. generally accepted accounting principles ("GAAP"). However, management believes that the evaluation of REV Group's ongoing operating results may be enhanced by a presentation of Adjusted EBITDA, Adjusted Net Income, Free Cash Flow and Return on Invested Capital, which are non-GAAP financial measures. Adjusted EBI ...

[Cautionary Statement About Forward-Looking Statements](index=3&type=section&id=Cautionary%20Statement%20About%20Forward-Looking%20Statements) Forward-looking statements are inherently uncertain and subject to various factors that could cause actual results to differ materially - Forward-looking statements are identified by words such as "**anticipate**," "**believe**," "**estimate**," "**expect**," "**intend**," and are inherently uncertain[9](index=9&type=chunk) - Factors that could cause actual results to differ materially include increases in interest rates, availability of credit, low consumer confidence, labor availability, increased material and component costs, supply chain disruptions, global tensions, and the overall impact of the COVID-19 pandemic[9](index=9&type=chunk) [Website and Social Media Disclosure](index=3&type=section&id=Website%20and%20Social%20Media%20Disclosure) The company uses its website and Twitter for routine information distribution and SEC compliance, with content not incorporated into this report - The company uses its website (www.revgroup.com) and corporate Twitter account (@revgroupinc) as routine channels for distributing company information, including material non-public information, and for complying with SEC Regulation FD[11](index=11&type=chunk) - Information provided on the company's website or social media channels is not incorporated into, or deemed part of, this Quarterly Report on Form 10-Q[12](index=12&type=chunk) [PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the company's comprehensive financial information, including statements, notes, and management's discussion and analysis [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the company's unaudited condensed consolidated financial statements, including balance sheets, statements of operations and comprehensive income (loss), cash flows, and shareholders' equity, along with detailed notes explaining accounting policies, significant transactions, and financial statement line items [Condensed Unaudited Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Unaudited%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's assets, liabilities, and shareholders' equity at specific points in time | Metric | April 30, 2021 ($ millions) | October 31, 2020 ($ millions) | Change ($ millions) | | :-------------------------------------- | :-------------------------- | :-------------------------- | :------------------ | | Total Assets | 1,292.9 | 1,312.3 | (19.4) | | Total Liabilities | 794.1 | 840.0 | (45.9) | | Total Shareholders' Equity | 498.8 | 472.3 | 26.5 | | Cash and cash equivalents | 7.7 | 11.4 | (3.7) | | Inventories, net | 532.9 | 537.2 | (4.3) | | Long-term debt, less current maturities | 306.0 | 340.5 | (34.5) | [Condensed Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss)](index=5&type=section&id=Condensed%20Unaudited%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) This section details the company's revenues, expenses, and net income (loss) over specific periods, reflecting operational performance | Metric | April 30, 2021 ($ millions) | April 30, 2020 ($ millions) | Change ($ millions) | Change (%) | | :-------------------------------------- | :-------------------------- | :-------------------------- | :------------------ | :--------- | | Net sales | 643.6 | 547.0 | 96.6 | 17.7% | | Gross profit | 87.4 | 52.4 | 35.0 | 66.8% | | Operating income (loss) | 34.7 | (13.5) | 48.2 | N/A | | Net income (loss) | 20.6 | (7.6) | 28.2 | 371.1% | | Basic EPS | 0.32 | (0.12) | 0.44 | N/A | | Diluted EPS | 0.31 | (0.12) | 0.43 | N/A | | Metric | April 30, 2021 ($ millions) | April 30, 2020 ($ millions) | Change ($ millions) | Change (%) | | :-------------------------------------- | :-------------------------- | :-------------------------- | :------------------ | :--------- | | Net sales | 1,197.6 | 1,079.1 | 118.5 | 11.0% | | Gross profit | 149.1 | 99.8 | 49.3 | 49.4% | | Operating income (loss) | 44.4 | (17.9) | 62.3 | N/A | | Net income (loss) | 20.6 | (16.7) | 37.3 | 223.4% | | Basic EPS | 0.32 | (0.27) | 0.59 | N/A | | Diluted EPS | 0.32 | (0.27) | 0.59 | N/A | [Condensed Unaudited Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Unaudited%20Consolidated%20Statements%20of%20Cash%20Flows) This section outlines the cash inflows and outflows from operating, investing, and financing activities over specific periods | Metric | April 30, 2021 ($ millions) | April 30, 2020 ($ millions) | Change ($ millions) | | :-------------------------------------- | :-------------------------- | :-------------------------- | :------------------ | | Net cash provided by operating activities | 37.1 | 22.0 | 15.1 | | Net cash provided by (used in) investing activities | 3.3 | (58.5) | 61.8 | | Net cash (used in) provided by financing activities | (44.1) | 54.7 | (98.8) | | Net (decrease) increase in cash and cash equivalents | (3.7) | 18.2 | (21.9) | | Cash and cash equivalents, end of period | 7.7 | 21.5 | (13.8) | [Condensed Unaudited Consolidated Statements of Shareholders' Equity](index=7&type=section&id=Condensed%20Unaudited%20Consolidated%20Statements%20of%20Shareholders'%20Equity) This section details changes in the company's equity accounts, including common stock, additional paid-in capital, and retained earnings | Metric | April 30, 2021 ($ millions) | October 31, 2020 ($ millions) | Change ($ millions) | | :-------------------------- | :-------------------------- | :-------------------------- | :------------------ | | Common Stock | 0.1 | 0.1 | 0.0 | | Additional Paid-in Capital | 502.2 | 496.1 | 6.1 | | Retained Deficit | (0.5) | (21.1) | 20.6 | | Accumulated Other Comprehensive Loss | (3.0) | (2.8) | (0.2) | | Total Shareholders' Equity | 498.8 | 472.3 | 26.5 | - Net income of **$20.6 million** contributed to the increase in retained deficit from **$(21.1) million** to **$(0.5) million** for the six months ended April 30, 2021[19](index=19&type=chunk) [Notes to Condensed Unaudited Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Unaudited%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [Note 1. Basis of Presentation](index=8&type=section&id=Note%201.%20Basis%20of%20Presentation) This note describes the accounting principles, ownership structure, and recent accounting standard adoptions relevant to the financial statements - American Industrial Partners (AIP) indirectly owns approximately **52.2%** of REV Group's voting equity as of April 30, 2021[22](index=22&type=chunk) - The Company reimbursed expenses of its primary equity holder in the amount of **$0.2 million** for the six months ended April 30, 2021, and **$0.1 million** for the same period in 2020[23](index=23&type=chunk) - The Company adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), on November 1, 2020, with no material impact on its consolidated financial statements[24](index=24&type=chunk) - ASU 2019-12, Income Taxes (Topic 740), will be adopted as of November 1, 2021, and the Company is currently evaluating its impact[25](index=25&type=chunk) [Note 2. Revenue Recognition](index=9&type=section&id=Note%202.%20Revenue%20Recognition) This note explains the company's policies for recognizing revenue from the sale of specialty vehicles and aftermarket parts and services - The Company's primary revenue is generated from the manufacture and sale of specialty vehicles and aftermarket parts and services, mainly in the United States and Canada[26](index=26&type=chunk)[27](index=27&type=chunk) - Revenue is typically recognized at a point-in-time when control is transferred, generally upon product shipment or customer pickup from manufacturing facilities[27](index=27&type=chunk) | Period | Revenue Recognized from Customer Advances ($ millions) | | :----- | :--------------------------------------------------- | | 2021 | 85.1 | | 2020 | 80.6 | [Note 3. Leases](index=9&type=section&id=Note%203.%20Leases) This note provides details on the company's operating lease costs, cash payments, and future undiscounted lease payment obligations | Period | Operating Lease Costs ($ millions) | Cash Paid for Lease Liabilities ($ millions) | | :----- | :--------------------------------- | :------------------------------------------- | | 2021 | 4.7 | 4.8 | | 2020 | 4.8 | 4.5 | | Fiscal Year | Undiscounted Lease Payments ($ millions) | | :---------- | :--------------------------------------- | | Remaining 2021 | 4.6 | | 2022 | 7.8 | | 2023 | 4.9 | | 2024 | 3.0 | | 2025 | 1.1 | | Thereafter | 2.4 | | Total Undiscounted | 23.8 | | Less: Imputed Interest | (2.2) | | Total Lease Liabilities | 21.6 | - As of April 30, 2021, the weighted average remaining lease term for operating leases was **4.3 years**, and the weighted average discount rate was **5.0%**[30](index=30&type=chunk) [Note 4. Acquisition](index=9&type=section&id=Note%204.%20Acquisition) This note details the acquisition of Spartan Emergency Response, including its purchase price, financial impact, and strategic rationale - On February 1, 2020, the Company acquired Spartan Emergency Response (Spartan ER) for an initial purchase price of **$54.8 million**, later adjusted to **$47.3 million**[32](index=32&type=chunk)[33](index=33&type=chunk) - The acquisition resulted in a cumulative gain of **$8.2 million**, after immaterial measurement period adjustments[34](index=34&type=chunk)[35](index=35&type=chunk) - Spartan ER is reported as part of the Fire & Emergency segment, increasing the Company's market share and access to new municipalities[32](index=32&type=chunk) [Note 5. Inventories](index=10&type=section&id=Note%205.%20Inventories) This note provides a breakdown of the company's inventory components, including chassis, raw materials, work in process, and finished products | Category | April 30, 2021 ($ millions) | October 31, 2020 ($ millions) | Change ($ millions) | | :-------------------- | :-------------------------- | :-------------------------- | :------------------ | | Chassis | 50.8 | 61.1 | (10.3) | | Raw materials & parts | 197.9 | 195.6 | 2.3 | | Work in process | 246.1 | 230.3 | 15.8 | | Finished products | 53.4 | 70.0 | (16.6) | | Total Inventories, net | 532.9 | 537.2 | (4.3) | [Note 6. Property, Plant and Equipment](index=11&type=section&id=Note%206.%20Property,%20Plant%20and%20Equipment) This note details the composition of the company's property, plant, and equipment, including land, buildings, machinery, and construction in process | Category | April 30, 2021 ($ millions) | October 31, 2020 ($ millions) | Change ($ millions) | | :-------------------------- | :-------------------------- | :-------------------------- | :------------------ | | Land & land improvements | 18.9 | 27.0 | (8.1) | | Buildings & improvements | 103.8 | 103.9 | (0.1) | | Machinery & equipment | 87.6 | 90.8 | (3.2) | | Rental & used vehicles | 2.6 | 4.9 | (2.3) | | Computer hardware & software | 56.9 | 51.9 | 5.0 | | Office furniture & fixtures | 4.4 | 5.1 | (0.7) | | Construction in process | 7.1 | 8.1 | (1.0) | | Total PP&E, net | 154.5 | 168.4 | (13.9) | | Period | 2021 ($ millions) | 2020 ($ millions) | Change ($ millions) | Change (%) | | :----- | :---------------- | :---------------- | :------------------ | :--------- | | Three Months | 5.5 | 7.5 | (2.0) | (26.7%) | | Six Months | 11.6 | 14.3 | (2.7) | (18.9%) | [Note 7. Goodwill and Intangible Assets](index=11&type=section&id=Note%207.%20Goodwill%20and%20Intangible%20Assets) This note presents the breakdown of goodwill by segment and the composition of intangible assets, including finite-lived and indefinite-lived assets | Segment | April 30, 2021 ($ millions) | October 31, 2020 ($ millions) | | :-------------- | :-------------------------- | :-------------------------- | | Fire & Emergency | 88.6 | 88.6 | | Commercial | 26.2 | 26.2 | | Recreation | 42.5 | 42.5 | | Total Goodwill | 157.3 | 157.3 | | Category | April 30, 2021 ($ millions) | October 31, 2020 ($ millions) | Change ($ millions) | | :-------------------------- | :-------------------------- | :-------------------------- | :------------------ | | Finite-lived intangible assets | 23.7 | 28.7 | (5.0) | | Indefinite-lived trade names | 107.4 | 107.4 | 0.0 | | Total Intangible Assets, net | 131.1 | 136.1 | (5.0) | | Period | 2021 ($ millions) | 2020 ($ millions) | Change ($ millions) | Change (%) | | :----- | :---------------- | :---------------- | :------------------ | :--------- | | Three Months | 2.5 | 3.4 | (0.9) | (26.5%) | | Six Months | 5.1 | 7.4 | (2.3) | (31.1%) | [Note 8. Divestiture Activities](index=12&type=section&id=Note%208.%20Divestiture%20Activities) This note outlines the company's divestiture of its shuttle bus businesses and the decision to divest its REV Brazil business, including associated financial impacts - The Company completed the sale of its shuttle bus businesses on May 8, 2020, for approximately **$49.0 million** in cash, resulting in a loss of **$8.8 million**[41](index=41&type=chunk) - In the first quarter of fiscal year 2021, the Company decided to divest its REV Brazil business, resulting in a loss of **$3.8 million** on business held for sale[42](index=42&type=chunk) | Category | Amount ($ millions) | | :-------------------------- | :------------------ | | Property, plant and equipment, net | 0.8 | | Inventories, net | 2.1 | | Accounts receivable, net | 5.7 | | Accounts payable | 4.3 | | Other current and long-term liabilities | 4.5 | [Note 9. Long-Term Debt](index=12&type=section&id=Note%209.%20Long-Term%20Debt) This note details the company's long-term debt, including the new ABL facility, refinancing activities, and compliance with financial covenants - On April 13, 2021, the Company entered into a new **$550.0 million** revolving credit agreement (2021 ABL Facility) maturing on April 13, 2026[45](index=45&type=chunk)[46](index=46&type=chunk) - The 2021 ABL Facility refinanced the 2017 ABL Facility and Term Loan, involving a **$303.4 million** repayment of existing principal and a **$1.4 million** loss on early extinguishment of debt[45](index=45&type=chunk) - As of April 30, 2021, the Company was in compliance with all financial covenants under the 2021 ABL Agreement, with **$223.1 million** available[50](index=50&type=chunk) | Debt Instrument | April 30, 2021 ($ millions) | October 31, 2020 ($ millions) | Change ($ millions) | | :-------------- | :-------------------------- | :-------------------------- | :------------------ | | 2021 ABL facility | 306.0 | — | 306.0 | | 2017 ABL facility | — | 175.0 | (175.0) | | Term Loan | — | 167.2 | (167.2) | | Total Long-term debt, less current maturities | 306.0 | 340.5 | (34.5) | [Note 10. Warranties](index=14&type=section&id=Note%2010.%20Warranties) This note provides an analysis of the company's warranty liability, including provisions, settlements, and adjustments - The Company's total warranty liability increased from **$37.0 million** at October 31, 2020, to **$38.2 million** at April 30, 2021[58](index=58&type=chunk)[59](index=59&type=chunk) | Metric | 2021 ($ millions) | 2020 ($ millions) | | :-------------------------------- | :---------------- | :---------------- | | Balance at beginning of period | 37.0 | 22.6 | | Warranty provisions | 16.7 | 14.8 | | Settlements made | (16.7) | (14.0) | | Warranties for prior year acquisition | 1.2 | — | | Warranties for current year acquisition | — | 10.2 | | Divestiture adjustments | — | (0.6) | | Changes in liability of pre-existing warranties | — | (0.6) | | Balance at end of period | 38.2 | 32.4 | [Note 11. Earnings Per Share](index=14&type=section&id=Note%2011.%20Earnings%20Per%20Share) This note details the calculation of basic and diluted earnings per share, including the weighted-average common shares outstanding and dilutive securities | Metric | April 30, 2021 | April 30, 2020 | | :-------------------------------------- | :------------- | :------------- | | Basic weighted-average common shares outstanding | 63,730,382 | 62,941,904 | | Dilutive stock options | 89,115 | — | | Dilutive restricted stock awards | 347,630 | — | | Dilutive restricted stock units | 455,164 | — | | Dilutive performance stock units | 373,900 | — | | Diluted weighted-average common shares outstanding | 64,996,191 | 62,941,904 | - For the six months ended April 30, 2021, diluted EPS was **$0.32**, consistent with basic EPS, reflecting the dilutive effect of outstanding stock options, performance stock units, and restricted stock units[16](index=16&type=chunk)[60](index=60&type=chunk) [Note 12. Income Taxes](index=15&type=section&id=Note%2012.%20Income%20Taxes) This note provides information on the company's income tax expense (benefit), pre-tax income (loss), and effective tax rates, along with discrete tax impacts | Period | 2021 ($ millions) | 2020 ($ millions) | Pre-tax Income (Loss) 2021 ($ millions) | Pre-tax Income (Loss) 2020 ($ millions) | Effective Tax Rate 2021 | Effective Tax Rate 2020 | | :----- | :---------------- | :---------------- | :-------------------------------------- | :-------------------------------------- | :---------------------- | :---------------------- | | Three Months | 7.2 | (10.1) | 27.8 | (17.7) | 25.8% | 56.1% (benefit) | | Six Months | 7.2 | (12.7) | 27.8 | (29.4) | 25.9% | 42.5% (benefit) | - Q2 FY2021 income tax expense was favorably impacted by **$0.1 million** of net discrete tax benefits, primarily from stock-based compensation tax deductions[63](index=63&type=chunk) - Q2 FY2020 income tax benefit was favorably impacted by **$5.7 million** of net discrete tax benefits, primarily from net operating loss carrybacks under the CARES Act and the nontaxable gain on the Spartan ER acquisition[63](index=63&type=chunk) [Note 13. Commitments and Contingencies](index=15&type=section&id=Note%2013.%20Commitments%20and%20Contingencies) This note discloses the company's various commitments and contingent liabilities, including bonds, letters of credit, and legal proceedings | Category | April 30, 2021 ($ millions) | October 31, 2020 ($ millions) | Change ($ millions) | | :-------------------------- | :-------------------------- | :-------------------------- | :------------------ | | Performance, bid and specialty bonds | 372.9 | 328.6 | 44.3 | | Open standby letters of credit | 20.9 | 11.0 | 9.9 | | Total | 393.8 | 339.6 | 54.2 | - Chassis contingent liability decreased from **$40.4 million** at October 31, 2020, to **$20.8 million** at April 30, 2021[70](index=70&type=chunk) - A class settlement for consolidated federal and state putative securities class actions was stipulated on May 19, 2021, with the settlement payment expected to be fully covered by the Company's insurers[76](index=76&type=chunk) [Note 14. Business Segment Information](index=17&type=section&id=Note%2014.%20Business%20Segment%20Information) This note provides financial data by business segment, including net sales and Adjusted EBITDA, reflecting performance across Fire & Emergency, Commercial, and Recreation divisions - The Company is organized into three reportable segments: Fire & Emergency, Commercial, and Recreation, based on management's operating decisions, capital allocation, and performance measurement[78](index=78&type=chunk) | Segment | 2021 ($ millions) | 2020 ($ millions) | Change ($ millions) | Change (%) | | :-------------- | :---------------- | :---------------- | :------------------ | :--------- | | Fire & Emergency | 307.6 | 289.3 | 18.3 | 6.3% | | Commercial | 98.4 | 143.2 | (44.8) | (31.3%) | | Recreation | 237.9 | 114.0 | 123.9 | 108.7% | | Consolidated | 643.6 | 547.0 | 96.6 | 17.7% | | Segment | 2021 ($ millions) | 2020 ($ millions) | Change ($ millions) | Change (%) | | :-------------- | :---------------- | :---------------- | :------------------ | :--------- | | Fire & Emergency | 21.7 | 10.2 | 11.5 | 112.7% | | Commercial | 8.3 | 8.0 | 0.3 | 3.8% | | Recreation | 25.1 | (1.1) | 26.2 | 2381.8% | | Consolidated | 45.5 | 7.6 | 37.9 | 498.7% | [Note 15. Subsequent Event](index=19&type=section&id=Note%2015.%20Subsequent%20Event) This note discloses a significant event occurring after the reporting period, specifically the reinstatement of a quarterly cash dividend - On June 3, 2021, the Board of Directors reinstated a quarterly cash dividend of **$0.05 per share** of common stock, payable on July 15, 2021, to shareholders of record on June 30, 2021[87](index=87&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, discussing key performance drivers, segment performance, liquidity, and capital resources. It highlights significant improvements in net sales, gross profit, and a shift from net loss to net income, driven by higher sales volumes, price realization, and productivity initiatives, despite divestitures and ongoing COVID-19 impacts [Overview](index=20&type=section&id=Overview) This section provides a high-level description of REV Group's business, its market position, and operational segments - REV Group is a leading designer, manufacturer, and distributor of specialty vehicles and related aftermarket parts and services, primarily serving a diversified customer base in the United States[90](index=90&type=chunk) - The company operates through three segments: Fire & Emergency, Commercial, and Recreation, providing customized vehicle solutions for public services, commercial infrastructure, and consumer leisure[90](index=90&type=chunk) - Approximately **89%** of net sales during the second quarter of fiscal year 2021 came from products where the company believes it holds a first, second, or third market share position[90](index=90&type=chunk) [Factors Affecting Our Performance](index=21&type=section&id=Factors%20Affecting%20Our%20Performance) This section discusses external and internal factors influencing the company's financial performance, including economic conditions, seasonality, and the impact of the COVID-19 pandemic - The business is impacted by general economic conditions, including employment levels, consumer confidence, municipal spending, municipal tax receipts, and changes in interest rates[95](index=95&type=chunk) - RV purchases are discretionary and sensitive to financing availability, consumer confidence, unemployment levels, and disposable income[96](index=96&type=chunk) - Operating results are typically seasonal, with the first fiscal quarter being the slowest and the fourth fiscal quarter usually being the strongest, influenced by weather, vacation seasons, and customer buying habits[99](index=99&type=chunk) - The COVID-19 pandemic has caused labor disruptions, supply chain delays (e.g., semiconductors, subcomponents), increased raw material prices (e.g., steel, aluminum), and logistics challenges[102](index=102&type=chunk)[106](index=106&type=chunk) - The Recreation segment's backlog significantly increased due to an acceleration in consumer demand for recreation vehicles during the pandemic[105](index=105&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, detailing changes in net sales, gross profit, expenses, and net income for the reported periods | Metric | 2021 ($ millions) | 2020 ($ millions) | Change ($ millions) | Change (%) | | :-------------------------- | :---------------- | :---------------- | :------------------ | :--------- | | Net sales | 643.6 | 547.0 | 96.6 | 17.7% | | Gross profit | 87.4 | 52.4 | 35.0 | 66.8% | | SG&A | 48.7 | 58.1 | (9.4) | (16.2%) | | Restructuring | — | 2.9 | (2.9) | (100.0%) | | Net income (loss) | 20.6 | (7.6) | 28.2 | 371.1% | | Basic EPS | 0.32 | (0.12) | 0.44 | N/A | | Diluted EPS | 0.31 | (0.12) | 0.43 | N/A | | Adjusted EBITDA | 45.5 | 7.6 | 37.9 | 498.7% | | Metric | 2021 ($ millions) | 2020 ($ millions) | Change ($ millions) | Change (%) | | :-------------------------- | :---------------- | :---------------- | :------------------ | :--------- | | Net sales | 1,197.6 | 1,079.1 | 118.5 | 11.0% | | Gross profit | 149.1 | 99.8 | 49.3 | 49.4% | | SG&A | 95.8 | 104.1 | (8.3) | (8.0%) | | Restructuring | 1.0 | 3.5 | (2.5) | (71.4%) | | Net income (loss) | 20.6 | (16.7) | 37.3 | 223.4% | | Basic EPS | 0.32 | (0.27) | 0.59 | N/A | | Diluted EPS | 0.32 | (0.27) | 0.59 | N/A | | Adjusted EBITDA | 68.9 | 18.4 | 50.5 | 274.5% | - Gross profit margin increased to **13.6%** (Q2 FY2021) from **9.6%** (Q2 FY2020) and to **12.4%** (six months FY2021) from **9.3%** (six months FY2020), driven by greater price realization, lower discounting, and improved operating leverage[111](index=111&type=chunk)[113](index=113&type=chunk) - Consolidated SG&A costs decreased by **$9.4 million** (three months) and **$8.3 million** (six months) primarily due to reduced restructuring-related charges, travel, marketing costs, and lower depreciation expense[114](index=114&type=chunk)[115](index=115&type=chunk) - A **$1.4 million** loss on early extinguishment of debt was recognized in Q2 FY2021 due to the refinancing of the 2017 ABL Facility and Term Loan[118](index=118&type=chunk) - A **$3.8 million** loss on business held for sale was recorded in Q1 FY2021 related to the decision to divest the REV Brazil business[119](index=119&type=chunk) [Fire & Emergency Segment](index=26&type=section&id=Fire%20%26%20Emergency%20Segment) This section analyzes the financial performance of the Fire & Emergency segment, detailing changes in net sales and Adjusted EBITDA | Metric | 2021 ($ millions) | 2020 ($ millions) | Change ($ millions) | Change (%) | | :-------------------------- | :---------------- | :---------------- | :------------------ | :--------- | | Net sales | 307.6 | 289.3 | 18.3 | 6.3% | | Adjusted EBITDA | 21.7 | 10.2 | 11.5 | 112.7% | | Adjusted EBITDA % of net sales | 7.1% | 3.5% | 3.6 pp | N/A | | Metric | 2021 ($ millions) | 2020 ($ millions) | Change ($ millions) | Change (%) | | :-------------------------- | :---------------- | :---------------- | :------------------ | :--------- | | Net sales | 588.2 | 495.8 | 92.4 | 18.6% | | Adjusted EBITDA | 31.9 | 12.1 | 19.8 | 163.6% | | Adjusted EBITDA % of net sales | 5.4% | 2.4% | 3.0 pp | N/A | - The increase in net sales was primarily due to increased unit shipments of fire apparatus and price realization, partially offset by decreased ambulance unit shipments[132](index=132&type=chunk)[133](index=133&type=chunk) - Adjusted EBITDA increased due to higher sales volume within the fire group and productivity initiatives, including direct labor efficiencies and lower operating expenses[134](index=134&type=chunk)[135](index=135&type=chunk) [Commercial Segment](index=26&type=section&id=Commercial%20Segment) This section analyzes the financial performance of the Commercial segment, detailing changes in net sales and Adjusted EBITDA | Metric | 2021 ($ millions) | 2020 ($ millions) | Change ($ millions) | Change (%) | | :-------------------------- | :---------------- | :---------------- | :------------------ | :--------- | | Net sales | 98.4 | 143.2 | (44.8) | (31.3%) | | Adjusted EBITDA | 8.3 | 8.0 | 0.3 | 3.8% | | Adjusted EBITDA % of net sales | 8.4% | 5.6% | 2.8 pp | N/A | | Metric | 2021 ($ millions) | 2020 ($ millions) | Change ($ millions) | Change (%) | | :-------------------------- | :---------------- | :---------------- | :------------------ | :--------- | | Net sales | 181.5 | 301.3 | (119.8) | (39.8%) | | Adjusted EBITDA | 15.5 | 17.9 | (2.4) | (13.4%) | | Adjusted EBITDA % of net sales | 8.5% | 5.9% | 2.6 pp | N/A | - The decrease in net sales was primarily due to the divestiture of shuttle bus businesses and lower shipments of school and municipal transit buses, partially offset by increased shipments of terminal trucks and street sweepers[137](index=137&type=chunk)[138](index=138&type=chunk) - Adjusted EBITDA was positively impacted by improved profitability and productivity in terminal truck and street sweeper businesses and SG&A reductions, offsetting lower sales volume within the bus group[139](index=139&type=chunk)[140](index=140&type=chunk) [Recreation Segment](index=28&type=section&id=Recreation%20Segment) This section analyzes the financial performance of the Recreation segment, detailing changes in net sales and Adjusted EBITDA | Metric | 2021 ($ millions) | 2020 ($ millions) | Change ($ millions) | Change (%) | | :-------------------------- | :---------------- | :---------------- | :------------------ | :--------- | | Net sales | 237.9 | 114.0 | 123.9 | 108.7% | | Adjusted EBITDA | 25.1 | (1.1) | 26.2 | 2381.8% | | Adjusted EBITDA % of net sales | 10.6% | (1.0%) | 11.6 pp | N/A | | Metric | 2021 ($ millions) | 2020 ($ millions) | Change ($ millions) | Change (%) | | :-------------------------- | :---------------- | :---------------- | :------------------ | :--------- | | Net sales | 428.0 | 280.9 | 147.1 | 52.4% | | Adjusted EBITDA | 40.2 | 5.9 | 34.3 | 581.4% | | Adjusted EBITDA % of net sales | 9.4% | 2.1% | 7.3 pp | N/A | - Net sales growth was primarily due to increased unit sales in all product categories and lower discounting, recovering from COVID-19 related production suspensions in the prior year[141](index=141&type=chunk)[142](index=142&type=chunk) - Adjusted EBITDA improvement was driven by increased sales volume, lower discounting, and productivity initiatives across all businesses[143](index=143&type=chunk)[144](index=144&type=chunk) [Backlog](index=28&type=section&id=Backlog) This section provides an overview of the company's order backlog by segment, highlighting significant changes and underlying drivers | Segment | April 30, 2021 ($ millions) | April 30, 2020 ($ millions) | Change ($ millions) | Change (%) | | :-------------- | :-------------------------- | :-------------------------- | :------------------ | :--------- | | Fire & Emergency | 1,099.0 | 1,111.7 | (12.7) | (1.1%) | | Commercial | 303.1 | 413.2 | (110.1) | (26.7%) | | Recreation | 940.5 | 122.9 | 817.6 | 665.3% | | Total Backlog | 2,342.6 | 1,647.8 | 694.8 | 42.2% | - The significant increase in total backlog was primarily driven by strong order intake across all product categories in the Recreation segment[148](index=148&type=chunk) - Fire & Emergency backlog decreased due to increased throughput and lower orders for legacy fire apparatus, partially offset by increased ambulance orders[148](index=148&type=chunk) - Commercial backlog decreased due to the shuttle bus divestiture, lower school bus orders (COVID-19 disruptions), and timing of a large municipal transit order[148](index=148&type=chunk) [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's ability to meet its financial obligations, including working capital, debt service, and capital expenditures, and its sources of funding - Primary liquidity requirements include working capital, facility improvements, debt service payments, and general corporate needs, historically met through operating activities, cash, and ABL credit facility borrowings[149](index=149&type=chunk) | Metric | 2021 ($ millions) | 2020 ($ millions) | Change ($ millions) | | :-------------------------------------- | :---------------- | :---------------- | :------------------ | | Net cash provided by operating activities | 37.1 | 22.0 | 15.1 | | Net cash provided by (used in) investing activities | 3.3 | (58.5) | 61.8 | | Net cash (used in) provided by financing activities | (44.1) | 54.7 | (98.8) | | Net (decrease) increase in cash and cash equivalents | (3.7) | 18.2 | (21.9) | - Net cash provided by operating activities increased to **$37.1 million** (six months FY2021) from **$22.0 million** (six months FY2020), driven by higher net income and a tax refund related to the CARES Act[152](index=152&type=chunk) - Net cash used in financing activities was **$44.1 million** (six months FY2021), primarily due to repaying the 2017 ABL Facility and Term Loan with proceeds from the new 2021 ABL Facility[154](index=154&type=chunk) - The Board of Directors reinstated a quarterly cash dividend of **$0.05 per share** on June 3, 2021, after suspending it in Q2 FY2020[155](index=155&type=chunk)[156](index=156&type=chunk) - The new **$550.0 million** 2021 ABL Facility matures on April 13, 2026, and had **$223.1 million** available as of April 30, 2021[157](index=157&type=chunk)[158](index=158&type=chunk) [Adjusted EBITDA and Adjusted Net Income](index=30&type=section&id=Adjusted%20EBITDA%20and%20Adjusted%20Net%20Income) This section defines and reconciles non-GAAP financial measures, Adjusted EBITDA and Adjusted Net Income, used by management to assess core operating performance - Adjusted EBITDA and Adjusted Net Income are non-GAAP financial measures used by management and the Board of Directors for measuring financial performance and as a basis for incentive compensation[159](index=159&type=chunk)[160](index=160&type=chunk) - These measures exclude non-cash depreciation and amortization, interest expense, income taxes, loss on early extinguishment of debt, stock-based compensation, sponsor expense reimbursement, and other exceptional items to provide a clearer view of core operating performance[161](index=161&type=chunk) | Metric | 2021 ($ millions) | 2020 ($ millions) | Change ($ millions) | Change (%) | | :-------------------------- | :---------------- | :---------------- | :------------------ | :--------- | | Adjusted EBITDA (3 months) | 45.5 | 7.6 | 37.9 | 498.7% | | Adjusted EBITDA (6 months) | 68.9 | 18.4 | 50.5 | 274.5% | | Adjusted Net Income (3 months) | 25.7 | (5.8) | 31.5 | 543.1% | | Adjusted Net Income (6 months) | 34.6 | (8.8) | 43.4 | 493.2% | [Off-Balance Sheet Arrangements](index=33&type=section&id=Off-Balance%20Sheet%20Arrangements) This section confirms the absence of material off-balance sheet arrangements that could significantly impact the company's financial condition or results of operations - The Company has not created, and is not party to, any special-purpose or off-balance sheet entities for capital raising or debt[166](index=166&type=chunk) - There are no off-balance sheet arrangements reasonably likely to have a material current or future effect on the Company's financial condition, revenues, expenses, results of operations, liquidity, capital expenditures, and capital resources[166](index=166&type=chunk) [Critical Accounting Policies and Estimates](index=33&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section refers to the company's critical accounting policies and estimates, noting recent accounting standard adoptions and their impact - Critical accounting policies and estimates are disclosed in the Annual Report on Form 10-K for the fiscal year ended October 31, 2020[167](index=167&type=chunk) - The Company adopted ASU 2016-13 (Credit Losses) in the first quarter of fiscal year 2021, which did not have a material impact on its consolidated financial statements[167](index=167&type=chunk) [Recent Accounting Pronouncements](index=34&type=section&id=Recent%20Accounting%20Pronouncements) This section directs readers to the notes to financial statements for details on the impact of new accounting standards - Refer to Note 1 of the Notes to Condensed Unaudited Consolidated Financial Statements for a discussion of the impact of new accounting standards[168](index=168&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that there have been no material changes in the company's exposure to interest rate risk, foreign exchange risk, and commodity price risk since the information provided in its Annual Report on Form 10-K - There have been no material changes in the Company's exposure to interest rate risk, foreign exchange risk, and commodity price risk from the information provided in its Annual Report on Form 10-K filed on January 7, 2021[169](index=169&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the Chief Executive Officer and Chief Financial Officer, concluded that the company's disclosure controls and procedures were effective as of April 30, 2021. No material changes in internal control over financial reporting occurred during the quarter - The Company's disclosure controls and procedures were effective as of April 30, 2021, as concluded by management, including the Chief Executive Officer and Chief Financial Officer[170](index=170&type=chunk) - No changes in internal control over financial reporting materially affected, or are reasonably likely to materially affect, internal control over financial reporting during the quarter ended April 30, 2021[171](index=171&type=chunk) [PART II.OTHER INFORMATION](index=34&type=section&id=PART%20II.OTHER%20INFORMATION) This section provides additional information not covered in the financial statements, including legal proceedings, risk factors, and exhibits [Item 1. Legal Proceedings](index=34&type=section&id=Item%201.%20Legal%20Proceedings) This section refers readers to Note 13, Commitments and Contingencies, for a detailed description of the company's legal proceedings - For a description of the Company's legal proceedings, refer to Note 13, Commitments and Contingencies, in the Notes to Condensed Unaudited Consolidated Financial Statements[172](index=172&type=chunk) [Item 1A. Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) This section states that there have been no material changes to previously disclosed risk factors, except for an updated discussion on the ongoing and uncertain impact of the COVID-19 pandemic on the company's business, including potential disruptions to demand, supply chain, internal operations, and capital markets - There have been no material changes to the risk factors associated with the business previously disclosed in the Annual Report on Form 10-K, other than an updated discussion on the COVID-19 pandemic[173](index=173&type=chunk) - The COVID-19 pandemic continues to impact operations, causing disruptions in demand, supply chain delays (e.g., component shortages), and internal operational challenges (e.g., workforce illness, remote work risks)[173](index=173&type=chunk)[174](index=174&type=chunk)[175](index=175&type=chunk) - The full nature, extent, and duration of COVID-19's impact are highly uncertain and could severely affect business, results of operations, and financial condition, including potential asset impairment or difficulty raising capital[173](index=173&type=chunk)[179](index=179&type=chunk) [Item 6. Exhibits](index=35&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the Credit Agreement for the 2021 ABL Facility, certifications by the CEO and CFO, and various Inline XBRL documents - Exhibits include the Credit Agreement for the 2021 ABL Facility, certifications by the Chief Executive Officer and Chief Financial Officer pursuant to the Sarbanes-Oxley Act, and various Inline XBRL documents[181](index=181&type=chunk) [Signatures](index=37&type=section&id=Signatures) This section confirms the official signing of the report by the Chief Executive Officer and Chief Financial Officer - The report was signed on June 7, 2021, by Rodney N. Rushing, Chief Executive Officer, and Mark A. Skonieczny, Chief Financial Officer[186](index=186&type=chunk)

REV Group, Inc. (NYSE:REVG) Q1 2021 Earnings Conference Call March 10, 2021 10:00 AM ET Company Participants Drew Konop - Vice President of Investor Relations Rod Rushing - President & Chief Executive Officer Mark Skonieczny - Chief Financial Officer Conference Call Participants Mig Dobre - Robert W. Baird Stephen Volkmann - Jefferies Jerry Revich - Goldman Sachs Courtney Yakavonis - Morgan Stanley Joel Tiss - BMO Capital Markets Operator Greetings. Welcome to the REV Group Incorporated First Quarter 2021 E ...

Financial Performance - REV Group's net sales increased by 4.1% to $554.0 million compared to the prior year quarter[6,7] - Adjusted EBITDA increased by 105% to $23.2 million compared to the prior year quarter[6,7] - Adjusted EBITDA margin increased by 210 basis points to 4.2% compared to the prior year quarter[6,7] Segment Results - Fire & Emergency segment revenue was $280.6 million[11] - Commercial segment organic backlog was $234.0 million[14] - Recreation segment net sales were $190.2 million[17] and backlog was $754.3 million[17] Fiscal Year 2021 Guidance - Net sales are projected to be between $2.45 billion and $2.6 billion[22] compared to $2.3 billion in 2020[22] - Adjusted EBITDA is expected to be between $125 million and $135 million[22] compared to $67.5 million in 2020[22] - Adjusted net income is projected to be between $56 million and $70 million[22] compared to $9.5 million in 2020[22]

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section provides the unaudited condensed consolidated financial information for REV Group, Inc., including financial statements, management's discussion and analysis, and disclosures on market risk and controls [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents REV Group, Inc.'s unaudited condensed consolidated financial statements for Q1 2021, including balance sheets, operations, cash flows, and detailed notes [Condensed Unaudited Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Unaudited%20Consolidated%20Balance%20Sheets) As of January 31, 2021, total assets decreased to $1,259.1 million, total liabilities decreased to $783.8 million, and shareholders' equity slightly increased to $475.3 million Consolidated Balance Sheet Highlights (in millions) | Account | Jan 31, 2021 | Oct 31, 2020 | | :--- | :--- | :--- | | **Total Current Assets** | $777.3 | $812.0 | | **Total Assets** | $1,259.1 | $1,312.3 | | **Total Current Liabilities** | $403.1 | $447.3 | | **Total Liabilities** | $783.8 | $840.0 | | **Total Shareholders' Equity** | $475.3 | $472.3 | [Condensed Unaudited Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Unaudited%20Consolidated%20Statements%20of%20Operations) For Q1 2021, net sales increased to $554.0 million, gross profit rose to $61.7 million, and the company achieved breakeven net income, a significant improvement from a prior-year loss Statement of Operations Summary (in millions) | Metric | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | **Net Sales** | $554.0 | $532.1 | | **Gross Profit** | $61.7 | $47.4 | | **Operating Income (Loss)** | $9.7 | $(4.7) | | **Net Income (Loss)** | $0.0 | $(9.4) | | **Diluted EPS** | $0.00 | $(0.15) | [Condensed Unaudited Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Unaudited%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities turned positive at $1.9 million in Q1 2021, investing activities provided $7.1 million, and financing activities used $11.3 million, leading to a $2.3 million net decrease in cash Cash Flow Summary (in millions) | Cash Flow Activity | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | **Net cash from operating activities** | $1.9 | $(13.3) | | **Net cash from investing activities** | $7.1 | $(1.3) | | **Net cash from financing activities** | $(11.3) | $78.6 | | **Net (decrease) increase in cash** | $(2.3) | $64.0 | [Notes to Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Unaudited%20Consolidated%20Financial%20Statements) Notes detail the Spartan ER acquisition, the divestiture of REV Brazil resulting in a $3.8 million loss, and the company's debt structure, confirming compliance with all covenants - On February 1, 2020, the company acquired Spartan Emergency Response (Spartan ER) for an adjusted purchase price of **$47.3 million**, funded via its ABL credit facility, resulting in an **$8.2 million gain**[32](index=32&type=chunk)[33](index=33&type=chunk)[35](index=35&type=chunk) - In Q1 2021, the company decided to divest its REV Brazil business, classifying it as held for sale and recognizing a **$3.8 million loss**[41](index=41&type=chunk) - As of January 31, 2021, total debt was **$332.1 million**, with **$165.0 million** under the ABL facility and **$167.1 million** under the Term Loan, and **$230.0 million** availability under the ABL Facility[43](index=43&type=chunk)[49](index=49&type=chunk) - The company is involved in pending putative securities class actions and derivative actions related to its 2017 IPO and secondary offering, with an undetermined outcome[73](index=73&type=chunk)[74](index=74&type=chunk) [Management's Discussion and Analysis (MD&A)](index=20&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2021 performance, highlighting a **4.1% increase** in consolidated net sales to **$554.0 million**, improved gross profit margin to **11.1%**, and a doubling of Adjusted EBITDA to **$23.2 million**, with total backlog exceeding **$2.0 billion** Q1 2021 vs Q1 2020 Performance Highlights (in millions) | Metric | Q1 2021 | Q1 2020 | Change | | :--- | :--- | :--- | :--- | | **Net Sales** | $554.0 | $532.1 | +4.1% | | **Gross Profit** | $61.7 | $47.4 | +30.2% | | **Net Income (Loss)** | $0.0 | $(9.4) | +100.0% | | **Adjusted EBITDA** | $23.2 | $11.3 | +105.3% | - The company is in the process of refinancing its term loan and ABL credit facility, with completion expected by the end of Q2 fiscal year 2021[126](index=126&type=chunk) [Results of Operations](index=22&type=section&id=Results%20of%20Operations) Consolidated net sales growth was driven by the Spartan ER acquisition and Recreation segment performance, while Commercial sales declined due to divestitures and market softness, leading to expanded gross profit margin and varied Adjusted EBITDA across segments - Consolidated net sales increased by **$21.9 million (4.1%)** year-over-year, primarily due to the Spartan ER acquisition and favorable mix in the Recreation segment[103](index=103&type=chunk)[104](index=104&type=chunk) - Gross profit margin improved to **11.1%** from **8.9%** year-over-year, driven by increased net sales, lower sales discounts, and operational enhancements[105](index=105&type=chunk) [Segment Performance](index=24&type=section&id=Segment%20Performance) Fire & Emergency net sales grew **35.9%** due to the Spartan ER acquisition, Commercial net sales fell **47.5%** due to divestitures, and Recreation net sales increased **14.0%** from favorable product mix Segment Net Sales (in millions) | Segment | Q1 2021 | Q1 2020 | % Change | | :--- | :--- | :--- | :--- | | **Fire & Emergency** | $280.6 | $206.5 | +35.9% | | **Commercial** | $83.1 | $158.2 | -47.5% | | **Recreation** | $190.2 | $166.8 | +14.0% | Segment Adjusted EBITDA (in millions) | Segment | Q1 2021 | Q1 2020 | % Change | | :--- | :--- | :--- | :--- | | **Fire & Emergency** | $10.2 | $1.7 | +500.0% | | **Commercial** | $7.1 | $10.8 | -34.3% | | **Recreation** | $15.1 | $7.0 | +115.7% | [Backlog](index=25&type=section&id=Backlog) Total company backlog significantly increased to **$2,006.2 million** as of January 31, 2021, driven by strong growth in Recreation and Fire & Emergency segments, while Commercial backlog decreased Backlog by Segment (in millions) | Segment | Jan 31, 2021 | Jan 31, 2020 | | :--- | :--- | :--- | | **Fire & Emergency** | $1,017.9 | $807.3 | | **Commercial** | $234.0 | $455.6 | | **Recreation** | $754.3 | $158.3 | | **Total Backlog** | **$2,006.2** | **$1,421.2** | [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) Primary liquidity sources are cash from operations and the ABL credit facility, with net cash from operations improving to **$1.9 million** in Q1 2021, and **$230.0 million** availability under the ABL Facility - The company suspended its quarterly dividend starting in Q2 fiscal year 2020, with future reassessment[132](index=132&type=chunk) - As of January 31, 2021, the company had **$230.0 million** in availability under its ABL Facility and was in compliance with all financial covenants[135](index=135&type=chunk)[137](index=137&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes occurred in the company's exposure to market risks, including interest rate, foreign exchange, and commodity price risks, since the last annual report - There have been no material changes in the company's exposure to interest rate, foreign exchange, and commodity price risks since the last annual report[152](index=152&type=chunk) [Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of January 31, 2021, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation as of January 31, 2021, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[153](index=153&type=chunk) - There were no material changes in the company's internal control over financial reporting during the quarter ended January 31, 2021[154](index=154&type=chunk) [PART II. OTHER INFORMATION](index=31&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides additional information, including details on legal proceedings, risk factors, and a list of exhibits filed with the report [Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 13 for details on pending consolidated federal and state putative securities class actions related to the company's 2017 IPO and secondary offering - The company is facing pending securities class action lawsuits related to its 2017 IPO and secondary offering, which it intends to vigorously defend[73](index=73&type=chunk)[74](index=74&type=chunk)[155](index=155&type=chunk) [Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred to the risk factors previously disclosed in the Annual Report on Form 10-K for the fiscal year ended October 31, 2020 - There have been no material changes to the business's risk factors since the last Annual Report on Form 10-K[156](index=156&type=chunk) [Exhibits](index=33&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL documents containing financial data - Exhibits filed include CEO and CFO certifications under Sarbanes-Oxley Act Sections 302 and 906, and Inline XBRL data files[158](index=158&type=chunk)

R E V G R O U P, I N C . Financial Report Fiscal Fourth Quarter 2020 N Y S E : R E V G January 7, 2021 Cautionary Statement & Non-GAAP Measures Disclaimers Note Regarding Non-GAAP Measures REV Group reports its financial results in accordance with U.S. generally accepted accounting principles ("GAAP"). However, management believes that the evaluation of REV Group's ongoing operating results may be enhanced by a presentation of Adjusted EBITDA and Adjusted Net Income, which are non-GAAP financial measures. A ...

REV Group, Inc. (NYSE:REVG) Q4 2020 Earnings Conference Call January 7, 2021 10:00 AM ET Company Participants Drew Konop - VP of IR Rod Rushing - President & CEO Mark Skonieczny - CFO Conference Call Participants Jerry Revich - Goldman Sachs Jamie Cook - Credit Suisse Courtney Yakavonis - Morgan Stanley Raj Patel - Jefferies Mig Dobre - Baird Operator Greetings, and welcome to REV Group 2020 Fiscal Fourth Quarter and Full Year Earnings Conference Call. At this time, all participants are in a listen-only mod ...