REV Group(US:REVG)2022-06-07 11:11Financial Performance - Consolidated net sales decreased by $67.3 million (10.5%) for the three months ended April 30, 2022, compared to the prior year quarter, primarily due to decreased unit shipments in the Fire and Emergency (F&E) and Commercial segments [101]. - Gross profit for the three months ended April 30, 2022, was $57.1 million, a decrease of $30.3 million (34.7%) from the prior year quarter, with a gross profit margin of 9.9% [103]. - Adjusted EBITDA for the three months ended April 30, 2022, was $23.8 million, down from $45.5 million in the prior year quarter [100]. - Consolidated net (loss) income decreased by $23.6 million for the six months ended April 30, 2022, compared to the prior year period [116]. - Adjusted EBITDA decreased by $26.8 million for the six months ended April 30, 2022, primarily due to lower performance in the F&E and Commercial segments [118]. - Adjusted EBITDA for the recreation segment was 11.9% of net sales for the three months ended April 30, 2022, compared to 10.6% in the prior year [129]. - Adjusted EBITDA for the six months ended April 30, 2022, was $42.1 million, down from $68.9 million in the same period of 2021, reflecting a decrease of approximately 38.8% [153]. - Adjusted Net Income for the six months ended April 30, 2022, was $18.6 million, down from $34.6 million in the same period of 2021, representing a decrease of approximately 46.3% [153]. Segment Performance - The F&E segment experienced a decrease in net sales due to lower unit shipments of fire apparatus and ambulances, impacted by supply chain constraints [102]. - The Commercial segment saw increased net sales primarily from higher shipments of school buses, terminal trucks, and street sweepers, partially offset by decreased shipments of municipal transit buses [102]. - The Recreation segment's net sales increased due to price realization and favorable mix, despite lower line rates and decreased unit shipments related to supply chain disruptions [102]. - F&E segment net sales decreased by $105.8 million for the six months ended April 30, 2022, attributed to decreased shipments and supply chain disruptions [122]. - Commercial segment net sales increased by $6.8 million for the six months ended April 30, 2022, driven by higher shipments of school buses and terminal trucks [126]. - Recreation segment net sales increased by $15.6 million for the six months ended April 30, 2022, driven by strong price realization and favorable mix [130]. Costs and Expenses - Consolidated selling, general and administrative (SG&A) costs increased by $2.3 million for the six months ended April 30, 2022, mainly due to higher travel and legal settlement costs [106]. - Consolidated restructuring costs increased by $5.6 million for the six months ended April 30, 2022, related to the transition of KME branded fire apparatus production [108]. - The company incurred restructuring costs of $6.6 million for the six months ended April 30, 2022, compared to $1.0 million for the same period in 2021 [154]. - Legal matters resulted in expenses of $5.2 million for the six months ended April 30, 2022, compared to $0.4 million in the same period of 2021 [153]. Cash Flow and Dividends - Net cash provided by operating activities for the six months ended April 30, 2022, was $27.4 million, a decrease from $37.1 million in the prior year [139]. - Net cash used in financing activities for the six months ended April 30, 2022, was $28.9 million, primarily due to share repurchases of $45.9 million [142]. - The company declared dividends of $0.05 per common share for the three months ended April 30, 2022 [100]. - The company expects to pay a quarterly cash dividend of $0.05 per share, with total dividends paid during the fiscal year 2022 amounting to $6.4 million [143]. Supply Chain and Economic Conditions - Supply chain disruptions, including shortages in semiconductors and increased prices of raw materials, have significantly impacted operations [97]. - The company is monitoring the ongoing impacts of the Russia-Ukraine war on macroeconomic conditions and supply chain disruptions [99]. - Consolidated gross profit decreased by $36.2 million for the six months ended April 30, 2022, primarily due to lower net sales in the F&E segment and supply chain inefficiencies [104]. - F&E segment Adjusted EBITDA decreased by $32.3 million for the six months ended April 30, 2022, due to lower sales volume and supply chain inefficiencies [124]. - Commercial segment Adjusted EBITDA decreased by $3.9 million for the three months ended April 30, 2022, primarily due to an unfavorable mix and supply chain disruptions [127]. - Commercial segment Adjusted EBITDA decreased by $3.3 million for the six months ended April 30, 2022, primarily due to supply chain disruptions and inflationary pressures [128]. Backlog and Future Opportunities - Total backlog as of April 30, 2022, was $3,622.1 million, up from $2,342.6 million as of April 30, 2021, indicating strong order intake across segments [135]. - The backlog for the Fire & Emergency segment increased to $1,788.3 million as of April 30, 2022, reflecting strong orders for fire apparatus and ambulance units [133]. - The company is actively evaluating acquisition opportunities to improve and expand its business, which has historically contributed to growth [94]. Other Financial Information - Consolidated income tax benefit was $2.2 million for the six months ended April 30, 2022, compared to a tax expense of $7.2 million for the same period in 2021 [114]. - The company has not engaged in any off-balance sheet arrangements that could materially affect its financial condition or results of operations [156]. - There were no material changes in the company's exposure to interest rate risk, foreign exchange risk, and commodity price risk from the previous fiscal year [159]. - The company adopted ASU 2019-12 in the first quarter of fiscal year 2022, simplifying the accounting for income taxes [157]. - The company recorded a loss of $3.8 million related to the divestment of its REV Brazil business during the six months ended April 30, 2021 [155].