FISCAL FOURTH QUARTER 2025 RESULTS DECEMBER 10, 2025 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, Adjusted Free Cash Flow, and Return on Invested Capital, which are non-GAAP f ...

Fund Performance - The FPA Queens Road Small Cap Value Fund returned 7.46% in Q3 2025, underperforming the Russell 2000 Value Index which returned 12.60% [1] - For the first three quarters of 2025, the Fund achieved a return of 13.77%, compared to 9.04% for the index [1] - The Fund's strategy focuses on a diligent, disciplined, and patient process, expecting to outperform in down markets and underperform in speculative markets [1] Company Highlight: REV Group, Inc. - REV Group, Inc. (NYSE:REVG) is a manufacturer of specialty vehicles, primarily focusing on municipal vehicles such as fire trucks and ambulances [3] - The company reported a one-month return of -18.15% but has seen a 57.50% increase in share value over the last 52 weeks, with a closing stock price of $50.32 and a market capitalization of $2.456 billion as of November 21, 2025 [2] - REV Group generated net sales of $644.9 million in Q3 2025, an increase from $579.4 million in Q3 2024 [4] Operational Developments - CEO Mark Skonieczny has implemented significant operational restructuring, divesting from the less profitable bus business and using the proceeds for stock buybacks [3] - The company has reported a significant backlog and pricing growth, particularly in its municipal business, indicating strong demand [3]

Core Points - Horton Emergency Vehicles, a brand of REV Group Inc., is expanding its manufacturing operations in Grove City, Ohio, with a $2.6 million acquisition of an adjacent building [1] - The new facility will cover 20,000 square feet and will focus on final assembly and delivery processes, aiming to reduce delivery times and enhance customer experience [1] - The expansion will also create additional space in the current assembly operations [1]

Company Overview - REV Group's revenue for the trailing twelve months (TTM) ended April 30, 2024, was $2.6 billion[15] - As of April 30, 2024, REV Group had $38.2 million in cash and net debt of $181.8 million[15] - The market capitalization of REV Group as of June 6, 2024, was $1,428 million[15] - As of May 29, 2024, the shares outstanding were 51.9 million, with a closing price of $27.51 on June 6, 2024[15] Strategic Actions - REV Group sold Collins Bus for $303 million in an all-cash transaction[17] - The company expects net cash proceeds of over $250 million from strategic actions[17] - REV Group returned approximately $311 million to shareholders year-to-date, including ~$179 million in special cash dividends, ~$126 million in share repurchases, and ~$6 million in regular quarterly dividends[19] Financial Performance - The company's leverage ratio is 1.1x net debt to trailing twelve-month Adjusted EBITDA[44] - REV Group anticipates $67 million in adjusted free cash flow for FY24E[50] - From FY20 to FY23, REV Group generated $333 million of free cash flow, compared to an outflow of ($90 million) in FY17-FY19[50] Specialty Vehicles Segment - The Specialty Vehicles segment has an installed base of over 70,000 units[27] - The backlog for Specialty Vehicles is $4.064 billion as of 2Q24[27]

Financial Data and Key Metrics Changes - Consolidated net sales for Q2 2025 were $629.1 million, an increase of $45.1 million or 7.7% compared to Q2 2024, excluding the impact of the divested E and C transit bus business [24][25] - Consolidated adjusted EBITDA was $58.9 million, up from $37.5 million in Q2 2024, representing a 63.6% year-over-year increase when excluding the impact of the divested bus business [25][27] - The company repurchased approximately 2.9 million shares for $88 million during the quarter under a $250 million share repurchase authorization [20][39] Business Line Data and Key Metrics Changes - Specialty Vehicles segment sales increased by $16.5 million to $453.9 million, with a 12.2% increase when excluding the divested transit bus business [27][28] - Specialty Vehicles adjusted EBITDA increased by $24 million or 74.3% year-over-year, driven by higher unit production and manufacturing efficiencies [28][29] - Recreational Vehicle segment sales decreased by $4.4 million or 2.4% due to lower unit shipments amid soft market demand, but maintained a 6.2% adjusted EBITDA margin [32][33] Market Data and Key Metrics Changes - Specialty Vehicles segment backlog was $4.3 billion, reflecting strong demand for fire apparatus and a book-to-bill ratio of 1.1 in Q2 [29] - Recreational Vehicle segment backlog declined by 2% to $268 million, attributed to soft end market demand and dealer caution [35] - REV brand retail sales decreased by 10% year-over-year, compared to a 13% decline in the broader industry [33] Company Strategy and Development Direction - The company is focusing on operational excellence, investing in people and equipment, and product innovation to drive sustainable growth [8][21] - A strategic decision was made to exit the non-motorized travel trailer and truck camper product categories to concentrate on scalable operations with stronger competitive positioning [15][16] - The company plans to increase capital expenditures to enhance throughput and efficiency across its operations [21][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to manage tariff impacts and maintain updated financial guidance for the year [11][40] - The company anticipates continued growth in the Specialty Vehicles segment, with mid-teens revenue growth expected for the second half of the fiscal year [30][40] - Management noted that the demand for fire and ambulance products is returning to long-term trend levels, with expectations for normalized demand in the back half of the year [61] Other Important Information - The company celebrated the 50th anniversary of its ambulance group, highlighting its commitment to innovation and quality [12][13] - The company has maintained a strong cash flow profile, generating $117 million in cash from operating activities during the quarter [38][42] - The company updated its full-year fiscal 2025 guidance, raising consolidated top-line expectations to a range of $2.35 billion to $2.45 billion [40][41] Q&A Session Summary Question: What is the timeframe for tariff impacts to wash through the backlog and output? - Management expects the RV tariff impact to primarily affect the back half of fiscal 2025, with some potential carryover into early 2026 [44][46] Question: What is the expected return on the $20 million investment in the Brandon facility? - Management indicated that the investment aims to reduce lead times and increase production, but specific return metrics were not disclosed [47][48] Question: How does the sale of Lance impact long-term EBITDA goals? - Management clarified that Lance represents less than 10% of total sales for recreation, thus having no material impact on the 2027 targets [49] Question: Will dealer assistance continue to increase in the second half? - Management expects a softer second half due to consumer confidence risks and the impact of tariffs, but dealer inventory is healthier overall [54][56] Question: What is the demand outlook for the S-one 80 program? - Demand for the S-one 80 program remains strong, with orders increasing across various brands [58][59] Question: What is the current state of wholesale versus retail demand in recreational vehicles? - Retail shipments showed a sequential increase for the first time in 28 months, indicating positive signs, while wholesale orders are expected to improve due to healthier dealer inventory [68][70]