REV Group(US:REVG)2025-12-10 16:02Financial Data and Key Metrics Changes - Full year 2025 consolidated net sales reached $2.46 billion, an increase of $83 million, or 3.5%, compared to the prior year. Adjusting for the exit of bus manufacturing, net sales increased by $247 million, or 11.1% year over year [13][14] - Full year consolidated Adjusted EBITDA was $229.5 million, an increase of $66.7 million, or 41%, year over year. Adjusted for exited bus manufacturing earnings, Adjusted EBITDA increased by $84.3 million, or 58.1% [14] - Fourth quarter consolidated Adjusted EBITDA margin of 10.5% exceeded the low end of the 10%-12% target range for fiscal year 2027 [15] Business Line Data and Key Metrics Changes - Specialty vehicle segment sales for the fourth quarter were $507.4 million, an increase of $67.5 million compared to the prior year. Excluding bus manufacturing, net sales increased by $77.3 million, or 18% [16] - Specialty vehicle segment Adjusted EBITDA of $70.5 million increased by $20.3 million, with a margin of 13.9%, representing a 220 basis point improvement year over year [17] - Recreational vehicle segment sales were approximately flat at $157 million, with Adjusted EBITDA of $9 million, an increase of $900,000 versus the prior year [19] Market Data and Key Metrics Changes - Specialty vehicle segment backlog increased to $4.4 billion, reflecting strong demand for fire and emergency vehicles, with a book-to-bill ratio greater than one [17][18] - Recreational vehicle segment backlog was $233 million at year-end, a 20% decline versus the prior year, indicating a challenging retail environment [20] Company Strategy and Development Direction - The merger with Terex Corporation is viewed as a unique opportunity to create meaningful value for shareholders, with a focus on operational synergies and product innovation [4][5] - Investments are being made to enhance efficiency, expand capacity, and modernize facilities, aimed at achieving industry-leading performance in quality and lead time [10][11] Management's Comments on Operating Environment and Future Outlook - Management remains encouraged by order rates and strong demand, despite not providing guidance for fiscal year 2026 due to the pending merger [27] - The specialty vehicle market is expected to normalize, driven by strong municipal tax budgets and secular tailwinds [42][43] Other Important Information - The company returned approximately $121 million to shareholders through share repurchases and dividends during the year [13] - Trade working capital decreased to $161.3 million, primarily due to disciplined inventory management [21] Q&A Session Summary Question: Insights on specialty orders and pricing - Management noted strong order rates and a backlog holding steady, but refrained from providing specific pricing guidance for 2026 [26][27] Question: Market share and customer behavior shifts due to tariffs - Management indicated no material competitive advantage or disadvantage due to tariffs, as most competitors have similar cost structures [28][29] Question: Efficiency gains in specialty vehicles - Management described the efficiency improvement process as being in the middle innings, with more potential for operational enhancements [35][36] Question: Demand breakdown by RV class - Demand remains lumpy for Class A units, while Class C units are performing well, with Class B units facing challenges [37] Question: Investment opportunities within the network - Management highlighted targeted investments in automation and specific facilities to enhance throughput and efficiency [40][41] Question: Demand cycle within the specialty vehicle segment - Management noted strong secular tailwinds in the fire and emergency markets, with expectations for normalization in demand [42][43]