Sep. 5th, 2018
-
Net sales of $597.7 million, representing growth of 0.4% compared to
the prior year1 quarter
-
Third quarter net income of $18.3 million ($0.28 per diluted share),
an increase of 20.4% compared to the prior year quarter
-
Third quarter Adjusted EBITDA2 of $47.6 million (8.0% of
net sales) was $2.1 million better than the prior year quarter
-
Third quarter Adjusted Net Income of $24.7 million ($0.38 per diluted
share) vs. $21.9 million ($0.33 per diluted share) in the prior year
quarter
-
End markets remain positive with total backlog of $1,276.0 million as
of July 31, 2018 an increase of 34.1% compared to the prior year
quarter
-
Third quarter continued to be impacted by chassis and material
availability issues which are expected to persist through the end of
the calendar year
-
Company reduces its full-year 2018 outlook primarily due to continued
chassis availability issues and impact of longer material lead times
-
Company repurchased approximately 2.5 million shares for $40.7 million
under its share repurchase authorization during the third quarter
(average share repurchase price of $16.42); REV Board has authorized
an additional $50 million share repurchase program which can be
completed over the next 24 months
MILWAUKEE--(BUSINESS WIRE)--
REV Group, Inc. (NYSE: REVG), a manufacturer of industry-leading
specialty vehicle brands, today reported results for the three months
ended July 31, 2018 (“third quarter 2018”). Consolidated net sales in
the third quarter 2018 were $597.7 million, representing growth of 0.4%
over the three months ended July 29, 2017 (“third quarter 2017”). The
Company’s third quarter 2018 net income was $18.3 million, or $0.28 per
diluted share, representing net income growth of 20.4% compared to the
third quarter 2017. Adjusted Net Income2 for the third
quarter 2018 was $24.7 million, or $0.38 per diluted share, an increase
of 12.8% compared to $21.9 million, or $0.33 per diluted share, in the
third quarter 2017. Adjusted EBITDA2 in the third quarter
2018 was $47.6 million, $2.1 million better than the third quarter 2017.
The Company ended the quarter with total backlog of $1,276.0 million, up
0.4% sequentially, representing growth in line with historical
seasonality of its businesses, and up 34.1% versus third quarter 2017.
“The availability of commercial chassis was a bigger headwind in the
third quarter than previously anticipated, and we now don’t anticipate a
return to normalcy until the end of the calendar year. In addition,
during the quarter we experienced a significant lengthening of other
material lead times creating additional production inefficiencies.
Together these issues delayed product shipments beyond the quarter
within all three of our segments and we expect this to continue through
the fourth quarter,” commented Tim Sullivan, CEO REV Group. “In
addition, certain business units including our Class A RV, specialty
products, and parts business have underperformed our targets and we are
taking specific actions to address these areas. We believe the material
and chassis availability issues can be resolved by calendar year end.
More importantly, we were able to largely mitigate the impacts of cost
inflation and preserve margins in the quarter through price increases
and our previously announced cost reductions.”
Mr. Sullivan added, “We remain encouraged by continued strength of
orders for most of our product categories and our resulting backlogs at
the end of the quarter. We have not changed our long-term objectives and
believe in our opportunities for continued margin expansion in fiscal
2019 and beyond despite the current supply chain issues. In addition,
our leadership position in our markets remains strong. We expect to
close the year with good momentum going into fiscal 2019 supported by
strong backlogs and a reduced cost infrastructure. We will continue to
evaluate opportunities to drive increased returns to shareholders in the
upcoming quarter and in the next fiscal year and beyond. In the third
quarter 2018 we repurchased $40.7 million of our shares and our board of
directors recently increased our share repurchase authorization by an
additional $50 million, for a total of $55 million remaining under board
authorizations.”
______________________
1 REV Group, Inc. changed its fiscal year end from the last
Saturday to the last calendar day in October of each year. In addition,
starting in fiscal 2018, the Company’s fiscal quarters will end on the
last day of January, April, July and October.
2 REV Group, Inc. Adjusted Net Income and Adjusted EBITDA are
non-GAAP measures that are reconciled to their nearest GAAP measure
later in this release. Note: These figures do not include the impact of
acquisitions before their acquisition dates.
REV Group Segment Highlights
Fire & Emergency Segment
Fire & Emergency (“F&E”) segment net sales were $238.9 million in the
third quarter 2018, a decrease of $23.2 million, or 8.9%, from $262.1
million in the third quarter 2017. The decrease in net sales was
primarily due to chassis supply disruptions which resulted in lower
ambulance unit shipments for the quarter as well as by the timing of
fire truck shipments compared to the prior year period. F&E backlog at
the end of the third quarter 2018 was up 2.7% to $606.5 million compared
to $590.3 million at the end of fiscal year 2017, and down per normal
seasonality from $633.8 million at the end of the second quarter 2018.
F&E segment Adjusted EBITDA was $25.3 million in the third quarter 2018,
a decrease of $3.7 million, or 12.8%, from $29.0 million in the third
quarter 2017. The decrease in Adjusted EBITDA was due to decreased gross
profit driven by a decrease in ambulance shipments partially offset by
favorable selling, general and administrative expenses. Third quarter
2018 F&E segment Adjusted EBITDA margin was 10.6% of net sales compared
to 11.1% in the third quarter 2017 and up sequentially from 8.6% in the
second quarter 2018.
Mr. Sullivan commented, “Our backlog is healthy, and we expect to
continue benefiting from positive macro trends that are driving demand
for our Fire & Emergency products. We also remain encouraged by our
opportunity to drive margin expansion in fiscal 2019 and over the
long-term in this segment, as we anticipate profitability levels of
acquired businesses will continue to improve and our recent pricing
actions will offset to a greater degree our material cost increases. We
believe the chassis and material lead time issues which impacted our
third quarter and will continue to impact the segment in the fourth
quarter should result in future earnings and cash generation when
delayed shipments are fulfilled.”
Commercial Segment
Commercial segment net sales were $157.6 million in the third quarter
2018, an increase of $3.2 million, or 2.1%, from $154.4 million in the
third quarter of 2017. The increase in net sales was due primarily to an
increase in shuttle bus, school bus, mobility van and terminal truck
units sold compared to the prior year period. Commercial sales were also
negatively impacted by chassis availability in the quarter, specifically
in our Bus division. Commercial backlog at the end of the third quarter
was $420.0 million, an increase of 14.6% compared to $366.4 million at
the end of fiscal year 2017, and up 5.7% from $397.2 million at the end
of the second quarter 2018.
Commercial segment Adjusted EBITDA was $11.8 million in the third
quarter 2018, a decrease of $1.1 million, or 8.5%, from $12.9 million in
the third quarter 2017. This decrease was primarily due to mix as a
result of reduced volumes of product lines such as transit bus units
sold compared to the prior year. In addition, our specialty product
lines underperformed our expectations and we are taking actions to
address the underlying issues. Adjusted EBITDA margin was 7.5% of net
sales in the third quarter 2018 compared to 8.4% in the third quarter
2017 and up sequentially from 6.0% in the second quarter 2018.
Mr. Sullivan commented, “We’re maintaining strong market share in school
buses and have begun participating in more commercial bus activity
recently. We were pleased to see sequential margin improvement in the
segment during the quarter despite complications related to the
availability of certain commercial chassis. We also expect the return to
prior year and greater product sales volumes of both transit buses and
commercial school buses in fiscal 2019 which will provide a significant
tailwind to our Commercial segment profitability.”
Recreation Segment
Recreation segment net sales were $197.3 million in the third quarter
2018, an increase of $19.4 million, or 10.9%, from $177.9 million in the
third quarter 2017. The increase in net sales was due to net sales
attributable to our recent acquisition of Lance and increases in net
sales across our brand line-up except for Class A motorhomes, which
declined compared to the prior year period due to a strategic reduction
in the number of models produced and the timing of new model year
introductions this fiscal year. Excluding the impact of net sales from
Lance, Recreation segment net sales decreased by $15.2 million compared
to the prior year period, as a result of the reduction in Class A unit
volume. Sales for all other Recreation segment product categories were
up in the third quarter 2018 by double-digit percentages versus the same
period in the prior year. Recreation segment backlog at the end of the
third quarter 2018 was $249.5 million, which was up 72.3% from $144.8
million at the end of fiscal year 2017, and up 4.2% from the end of the
second quarter 2018.
Recreation segment Adjusted EBITDA was $17.9 million in the third
quarter 2018, an increase of $6.2 million, or 53.0%, from $11.7 million
for the third quarter 2017. The increase in Adjusted EBITDA was due to
the impact of the acquisition of Lance and increased profitability at
our Midwest and Renegade businesses along with our Goldshield fiberglass
business. Adjusted EBITDA margin improved by 250 basis points to 9.1% of
net sales in the third quarter 2018 compared to 6.6% in the third
quarter 2017 and up from 6.4% in the second quarter of 2018. Excluding
the impact of the acquisition of Lance, Recreation segment Adjusted
EBITDA increased 7.3% in the third quarter 2018 compared to the prior
year period.
Mr. Sullivan commented, “We were pleased with our ability to drive
margin improvement across our Recreation business lines during the third
quarter despite ongoing efforts to reposition our Class A product
portfolio. The strength of recent acquisitions continues to improve
profitability of this segment but also highlights the benefits of our
overall acquisition growth strategy. We believe the diversification of
our Recreation segment will continue enabling us to participate in the
stronger areas of this market and further broaden our product portfolio
and value proposition for dealer partners. Additionally, we expect the
Lance acquisition to help accelerate the pace of profitability
improvement in the segment over the course of the next several quarters.”
Working Capital, Liquidity, and Capital Allocation
Net working capital3 for the Company at July 31, 2018 was
$434.8 million compared to $299.7 million at the end of fiscal year 2017
and $358.1 million in the prior year quarter. The increase in working
capital versus the prior year quarter was due to the impact of the Lance
acquisition, indirect impact from the chassis availability and material
lead time issues and higher seasonal fourth quarter production and
shipment expectations. Per our normal seasonality, we expect net working
capital to be a source of cash in our fiscal fourth quarter.
Cash and equivalents totaled $14.7 million at July 31, 2018. Net debt4
at July 31, 2018 was $427.0 million. As of July 31, 2018, the Company
had $119.4 million available under its ABL revolving credit facility.
Capital expenditures in the third quarter 2018 were $8.2 million
compared to $11.8 million in the prior year quarter. During the quarter
the Company repurchased a total of 2,475,967 of its own shares for $40.7
million, an average repurchase price of $16.42 per share. To date the
company has repurchased a total of 2,714,514 shares for a total of $45.5
million. Shares outstanding as of July 31, 2018 were 63,191,445.
______________________
3 Net Working Capital is defined as current assets (excluding
cash) less current liabilities (excluding current portion of long term
debt)
4 Net Debt is defined as total debt (net of deferred
financing costs) less cash and cash equivalents.
Outlook
REV has revised its full-year 2018 outlook to reflect
lower-than-expected third-quarter performance and a continuation of
negative factors that impacted sales and earnings during the prior two
quarters through the end of the fiscal year. The Company now expects
full-year 2018 results in the following ranges:
-
Full-year 2018 revenue of $2.4 to $2.5 billion
-
Net Income of $57.9 to $69.0 million
-
Adjusted EBITDA of $160.0 to $170.0 million
-
Adjusted Net Income of $80.7 to $88.8 million
Mr. Sullivan commented, “We are disappointed with our financial results
through the first three quarters of this year and our expectations today
for the full fiscal year. We are focused on quickly addressing the
issues which have impacted our financial performance this year and
remain steadfast regarding our opportunity to grow our sales and
earnings in fiscal 2019 and over the long term. The supply chain
imbalances that have developed this year and were triggered by the
tariff discussions will take months to work through the system, but they
are not permanent, and we are very bullish on our long-term prospects.
Fiscal 2019 is setting up to be a strong year, especially with the
rebound we foresee in some of the higher margin businesses that have
experienced lower volumes this fiscal year.”
Quarterly Dividend
Our board of directors declared a quarterly dividend for our third
quarter of 2018, payable on November 30, 2018, to holders of record on
October 31, 2018, in the amount of $0.05 per share of common stock,
which equates to a rate of $0.20 per share of common stock on an
annualized basis.
Conference Call
REV Group, Inc. will host a conference call to discuss its third quarter
2018 results and outlook on September 6th at 11:00 a.m. EDT.
A supplemental earnings slide deck will be available tomorrow morning on
the REV Group, Inc. investor relations website prior to the call. 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.
About REV Group
REV Group, Inc. (NYSE: REVG) is a leading designer, manufacturer and
distributor of specialty vehicles and related aftermarket parts and
services. We serve a diversified customer base primarily in the United
States through three segments: Fire & Emergency, Commercial and
Recreation. We provide customized vehicle solutions for applications
including: essential needs (ambulances, fire apparatus, school buses,
mobility vans and municipal transit buses), industrial and commercial
(terminal trucks, cut-away buses and street sweepers) and consumer
leisure (recreational vehicles (“RVs”) and luxury buses). Our brand
portfolio consists of 30 well-established principal vehicle brands
including many of the most recognizable names within our served markets.
Several of our brands pioneered their specialty vehicle product
categories and date back more than 50 years.
Note Regarding Non-GAAP Measures
The Company reports its financial results in accordance with U.S.
generally accepted accounting principles (“GAAP”). However, management
believes that the evaluation of our ongoing operating results may be
enhanced by a presentation of Adjusted EBITDA and Adjusted Net Income,
which are non-GAAP financial measures. Adjusted EBITDA represents net
income before interest expense, income taxes, depreciation and
amortization as adjusted for certain non-recurring, one-time and other
adjustments which we believe are not indicative of our underlying
operating performance. Adjusted Net Income represents net income as
adjusted for certain after-tax, non-recurring, one-time and other
adjustments which we believe are not indicative of our underlying
operating performance as well as for the add-back of non-cash intangible
asset amortization and stock-based compensation.
The Company believes that the use of Adjusted EBITDA and Adjusted Net
Income provide additional meaningful methods of evaluating certain
aspects of its operating performance from period to period on a basis
that may not be otherwise apparent under GAAP when used in addition to,
and not in lieu of, GAAP measures. A reconciliation of Adjusted EBITDA
and Adjusted Net Income to the most closely comparable financial
measures calculated in accordance with GAAP is included in the financial
appendix of this news release.
Forward Looking Statements
This news release contains statements that the Company believes to be
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. This news release includes
statements that express our opinions, expectations, beliefs, plans,
objectives, assumptions or projections regarding future events or future
results and therefore are, or may be deemed to be, “forward-looking
statements.” These forward-looking statements can generally be
identified by the use of forward-looking terminology, including the
terms “believes,” “estimates,” “anticipates,” “expects,” “strives,”
“goal,” “seeks,” “projects,” “intends,” “forecasts,” “plans,” “may,”
“will” or “should” or, in each case, their negative or other variations
or comparable terminology. They appear in a number of places throughout
this news release and include statements regarding our intentions,
beliefs, goals or current expectations concerning, among other things,
our results of operations, financial condition, liquidity, prospects,
growth, strategies and the industries in which we operate.
Our forward-looking statements are subject to risks and uncertainties,
including those highlighted under “Risk Factors” and “Cautionary
Statement on Forward-Looking Statements” in the Company’s annual report
on Form 10-K, and in the Company’s subsequent quarterly reports on Form
10-Q, together with the Company’s other filings with the SEC, which
risks and uncertainties may cause actual results to differ materially
from those projected or implied by the forward-looking statement.
Forward-looking statements are based on current expectations and
assumptions and currently available data and are neither predictions nor
guarantees of future events or performance. You should not place undue
reliance on forward-looking statements, which only speak as of the date
hereof. The Company does not undertake to update or revise any
forward-looking statements after they are made, whether as a result of
new information, future events, or otherwise, expect as required by
applicable law.
Investors-REVG
|
| |
| |
| REV GROUP, INC. |
| CONDENSED UNAUDITED CONSOLIDATED BALANCE SHEETS |
| (Dollars in millions) |
| | | |
|
| | (Unaudited) | | |
| | July 31, | | October 31, |
| | 2018 | | 2017 |
|
ASSETS
| | | | |
|
Current assets:
| | | | |
|
Cash and cash equivalents
| |
$
|
14.7
| |
$
|
17.8
|
|
Accounts receivable, net
| | |
232.8
| | |
243.2
|
|
Inventories, net
| | |
531.5
| | |
452.4
|
|
Other current assets
| |
|
24.2
| |
|
13.4
|
|
Total current assets
| | |
803.2
| | |
726.8
|
| | | |
|
|
Property, plant and equipment, net
| | |
241.1
| | |
217.1
|
|
Goodwill
| | |
162.6
| | |
133.2
|
|
Intangibles assets, net
| | |
179.9
| | |
167.9
|
|
Other long-term assets
| |
|
16.3
| |
|
9.4
|
|
Total assets
| |
$
|
1,403.1
| |
$
|
1,254.4
|
| | | |
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
| | | | |
|
Current liabilities:
| | | | |
|
Current portion of long-term debt
| |
$
|
1.3
| |
$
|
0.8
|
|
Accounts payable
| | |
167.2
| | |
217.2
|
|
Customer advances
| | |
110.8
| | |
95.8
|
|
Accrued warranty
| | |
19.6
| | |
26.0
|
|
Other current liabilities
| |
|
56.1
| |
|
70.2
|
Total current liabilities
| | |
355.0
| | |
410.0
|
| | | |
|
|
Long-term debt, less current maturities
| | |
440.4
| | |
229.1
|
|
Deferred income taxes
| | |
24.5
| | |
22.5
|
|
Other long-term liabilities
| |
|
19.8
| |
|
20.3
|
|
Total liabilities
| | |
839.7
| | |
681.9
|
| | | |
|
|
Commitments and contingencies
| | | | |
|
Shareholders’ equity
| |
|
563.4
| |
|
572.5
|
| | | |
|
|
Total liabilities and shareholders’ equity
| |
$
|
1,403.1
| |
$
|
1,254.4
|
| | | | | |
|
|
| |
| |
| |
| |
| REV GROUP, INC. |
| CONDENSED UNAUDITED CONSOLIDATED STATEMENTS OF INCOME |
| (Unaudited; dollars in millions, except shares and per share
amounts) |
| | | | | | | |
|
| | Three Months Ended | | Nine Months Ended |
| | July 31,
2018 | | July 29,
2017 | | July 31,
2018 | | July 29,
2017 |
| | | | | | | |
|
|
Net sales
| |
$
|
597.7
| |
$
|
595.6
| |
$
|
1,721.4
| | |
$
|
1,583.9
|
| | | | | | | |
|
|
Cost of sales
| |
|
518.2
| |
|
517.6
| |
|
1,516.6
|
| |
|
1,385.5
|
| | | | | | | |
|
|
Gross profit
| | |
79.5
| | |
78.0
| | |
204.8
| | | |
198.4
|
| | | | | | | |
|
|
Operating expenses:
| | | | | | | | |
|
Selling, general and administrative
| | |
43.5
| | |
40.6
| | |
133.2
| | | |
139.7
|
|
Research and development costs
| | |
1.6
| | |
1.2
| | |
4.9
| | | |
3.4
|
|
Restructuring
| | |
0.9
| | |
2.3
| | |
6.9
| | | |
3.5
|
|
Amortization of intangible assets
| |
|
4.6
| |
|
5.1
| |
|
13.6
|
| |
|
10.4
|
| | | | | | | |
|
|
Total operating expenses
| |
|
50.6
| |
|
49.2
| |
|
158.6
|
| |
|
157.0
|
| | | | | | | |
|
|
Operating income
| | |
28.9
| | |
28.8
| | |
46.2
| | | |
41.4
|
| | | | | | | |
|
|
Interest expense, net
| | |
6.8
| | |
4.5
| | |
18.3
| | | |
15.4
|
|
Loss on early extinguishment of debt
| |
|
—
| |
|
—
| |
|
—
|
| |
|
11.9
|
| | | | | | | |
|
|
Income before provision (benefit) for income taxes
| | |
22.1
| | |
24.3
| | |
27.9
| | | |
14.1
|
| | | | | | | |
|
|
Provision (benefit) for income taxes
| |
|
3.8
| |
|
9.1
| |
|
(7.2
|
)
| |
|
5.4
|
| | | | | | | |
|
|
Net income
| |
$
|
18.3
| |
$
|
15.2
| |
$
|
35.1
|
| |
$
|
8.7
|
| | | | | | | |
|
| Income per common share: | | | | | | | | |
|
Basic
| |
$
|
0.29
| |
$
|
0.24
| |
$
|
0.55
| | |
$
|
0.15
|
|
Diluted
| |
$
|
0.28
| |
$
|
0.23
| |
$
|
0.53
| | |
$
|
0.14
|
| | | | | | | |
|
| Dividends declared per common share | |
$
|
0.05
| |
$
|
0.05
| |
$
|
0.15
| | |
$
|
0.10
|
| | | | | | | |
|
| Adjusted earnings per common share: | | | | | | | | |
|
Basic
| |
$
|
0.39
| |
$
|
0.34
| |
$
|
0.79
| | |
$
|
0.78
|
|
Diluted
| |
$
|
0.38
| |
$
|
0.33
| |
$
|
0.77
| | |
$
|
0.76
|
| | | | | | | |
|
| Weighted Average Shares Outstanding: | | | | | | | | |
|
Basic
| | |
63,993,398
| | |
63,769,388
| | |
64,258,655
| | | |
59,617,447
|
|
Diluted
| | |
64,847,561
| | |
65,528,691
| | |
65,832,682
| | | |
61,301,236
|
| | | | | | | |
|
|
| |
| |
| REV GROUP, INC. |
| CONDENSED UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (Unaudited; dollars in millions) |
| | | |
|
| | Nine Months Ended |
| | July 31,
2018 | | July 29,
2017 |
| | | |
|
|
Cash flows from operating activities:
| | | | |
|
Net income
| |
$
|
35.1
| | |
$
|
8.7
| |
|
Adjustments to reconcile net income to net cash used in operating
activities:
| | | | |
|
Depreciation and amortization
| | |
33.9
| | | |
26.8
| |
|
Amortization of debt issuance costs
| | |
1.3
| | | |
1.3
| |
|
Amortization of Senior Note discount
| | |
-
| | | |
0.1
| |
|
Stock-based compensation expense
| | |
5.1
| | | |
26.1
| |
|
Deferred income taxes
| | |
(0.8
|
)
| | |
(5.1
|
)
|
|
Loss on early extinguishment of debt
| | |
-
| | | |
11.9
| |
|
Gain on disposal of property, plant and equipment
| | |
(2.2
|
)
| | |
(0.6
|
)
|
| | | |
|
|
Changes in operating assets and liabilities, net of effects of
business acquisitions:
| |
|
(129.2
|
)
| |
|
(129.2
|
)
|
| | | |
|
|
Net cash used in operating activities
| | |
(56.8
|
)
| | |
(60.0
|
)
|
| | | |
|
|
Cash flows from investing activities:
| | | | |
|
Purchase of property, plant and equipment
| | |
(31.9
|
)
| | |
(49.9
|
)
|
|
Purchase of rental fleet vehicles
| | |
(15.9
|
)
| | |
(9.7
|
)
|
|
Proceeds from sale of property, plant and equipment
| | |
6.4
| | | |
3.6
| |
|
Investment in China JV
| | |
(7.6
|
)
| | |
-
| |
|
Acquisition of businesses, net of cash acquired
| |
|
(60.1
|
)
| |
|
(155.1
|
)
|
| | | |
|
|
Net cash used in investing activities
| | |
(109.1
|
)
| | |
(211.1
|
)
|
| | | |
|
|
Cash flows from financing activities:
| | | | |
|
Net proceeds from borrowings under revolving credit facility
| | |
161.5
| | | |
146.4
| |
|
Proceeds from Term Loan
| | |
50.0
| | | |
75.0
| |
|
Net proceeds from initial public offering
| | |
-
| | | |
253.6
| |
|
Payment of dividends
| | |
(9.7
|
)
| | |
(3.2
|
)
|
|
Payment of debt issuance costs
| | |
(0.9
|
)
| | |
(6.7
|
)
|
|
Repayment of long-term debt
| | |
-
| | | |
(180.0
|
)
|
|
Senior Note prepayment premium
| | |
-
| | | |
(7.7
|
)
|
|
Redemption of common stock options including employer payroll taxes
| | |
(1.9
|
)
| | |
(3.3
|
)
|
|
Payments of withholding and employer payroll taxes for vesting of
restricted stock
| | |
(0.1
|
)
| | |
-
| |
|
Proceeds from exercise of common stock options, net of employer
payroll taxes
| | |
9.4
| | | |
0.3
| |
|
Repurchase and retirement of common stock
| |
|
(45.5
|
)
| |
|
-
|
|
| | | |
|
|
Net cash provided by financing activities
| |
|
162.8
|
| |
|
274.4
|
|
| | | |
|
|
Net (decrease) increase in cash and cash equivalents
| | |
(3.1
|
)
| | |
3.3
| |
|
Cash and cash equivalents, beginning of period
| |
|
17.8
|
| |
|
10.8
|
|
| | | |
|
|
Cash and cash equivalents, end of period
| |
$
|
14.7
|
| |
$
|
14.1
|
|
| | | |
|
|
|
| REV GROUP, INC. |
| SEGMENT INFORMATION |
| (Unaudited; dollars in millions) |
|
| |
| |
| |
| |
| |
| | Three Months Ended | | Nine Months Ended | | |
| | July 31,
2018 | | July 29,
2017 | | July 31,
2018 | | July 29,
2017 | | |
Net Sales: | | | | | | | | | | |
|
Fire & Emergency
| |
$
|
238.9
| | |
$
|
262.1
| | |
$
|
706.1
| | |
$
|
666.5
| | | |
|
Commercial
| | |
157.6
| | | |
154.4
| | | |
447.9
| | | |
444.2
| | | |
|
Recreation
| | |
197.3
| | | |
177.9
| | | |
563.4
| | | |
470.9
| | | |
|
Corporate & Other
| |
|
3.9
|
| |
|
1.2
|
| |
|
4.0
|
| |
|
2.3
|
| | |
|
Total Company Net Sales
| |
$
|
597.7
|
| |
$
|
595.6
|
| |
$
|
1,721.4
|
| |
$
|
1,583.9
|
| | |
| | | | | | | | | |
|
Adjusted EBITDA: | | | | | | | | | | |
|
Fire & Emergency
| |
$
|
25.3
| | |
$
|
29.0
| | |
$
|
65.5
| | |
$
|
70.2
| | | |
|
Commercial
| | |
11.8
| | | |
12.9
| | | |
25.7
| | | |
35.6
| | | |
|
Recreation
| | |
17.9
| | | |
11.7
| | | |
38.7
| | | |
21.8
| | | |
|
Corporate & Other
| |
|
(7.4
|
)
| |
|
(8.1
|
)
| |
|
(25.6
|
)
| |
|
(23.5
|
)
| | |
|
Total Company Adjusted EBITDA
| |
$
|
47.6
|
| |
$
|
45.5
|
| |
$
|
104.3
|
| |
$
|
104.1
|
| | |
| | | | | | | | | |
|
Adjusted EBITDA Margin: | | | | | | | | | | |
|
Fire & Emergency
| | |
10.6
|
%
| | |
11.1
|
%
| | |
9.3
|
%
| | |
10.5
|
%
| | |
|
Commercial
| | |
7.5
|
%
| | |
8.4
|
%
| | |
5.7
|
%
| | |
8.0
|
%
| | |
|
Recreation
| | |
9.1
|
%
| | |
6.6
|
%
| | |
6.9
|
%
| | |
4.6
|
%
| | |
|
Corporate & Other
| | |
n/m
| | | |
n/m
| | | |
n/m
| | | |
n/m
| | | |
|
Total Company Adjusted EBITDA Margin
| | |
8.0
|
%
| | |
7.6
|
%
| | |
6.1
|
%
| | |
6.6
|
%
| | |
| | | | | | | | | |
|
| | | | | | | | | |
|
| | | | | | | | | |
|
Period-End Backlog: | | July 31,
2018 | | April 30,
2018 | | January 31,
2018 | | October 31,
2017 | | July 29,
2017 |
|
Fire & Emergency
| |
$
|
606.5
| | |
$
|
633.8
| | |
$
|
622.3
| | |
$
|
590.3
| | |
$
|
580.6
|
|
Commercial
| | |
420.0
| | | |
397.2
| | | |
337.8
| | | |
366.4
| | | |
254.8
|
|
Recreation
| |
|
249.5
|
| |
|
239.5
|
| |
|
281.8
|
| |
|
144.8
|
| |
|
116.1
|
|
Total Company Backlog
| |
$
|
1,276.0
|
| |
$
|
1,270.5
|
| |
$
|
1,241.9
|
| |
$
|
1,101.5
|
| |
$
|
951.5
|
| | | | | | | | | |
|
|
| |
| |
| |
| |
| |
| REV GROUP, INC. |
| ADJUSTED EBITDA BY SEGMENT |
| (Unaudited; dollars in millions) |
| | | | | | | | | |
|
| | Three Months Ended July 31, 2018 |
| | Fire & Emergency | | Commercial | | Recreation | | Corporate & Other | | Total |
| | | | | | | | | |
|
|
Net Income (loss)
| |
$
|
21.0
| |
$
|
9.3
| |
$
|
13.8
| |
$
|
(25.8
|
)
| |
$
|
18.3
|
| | | | | | | | | |
|
|
Depreciation & amortization
| | |
3.3
| | |
1.9
| | |
3.6
| | |
2.9
| | | |
11.7
|
|
Interest expense, net
| | |
0.9
| | |
0.6
| | |
—
| | |
5.3
| | | |
6.8
|
|
Provision for income taxes
| |
| — | |
| — | |
| — | |
| 3.8 |
| |
| 3.8 |
|
EBITDA
| | |
25.2
| | |
11.8
| | |
17.4
| | |
(13.8
|
)
| | |
40.6
|
| | | | | | | | | |
|
|
Sponsor expenses
| | |
—
| | |
—
| | |
—
| | |
0.2
| | | |
0.2
|
|
Restructuring costs
| | |
0.1
| | |
—
| | |
—
| | |
0.8
| | | |
0.9
|
|
Stock-based compensation expense
| | |
—
| | |
—
| | |
—
| | |
1.4
| | | |
1.4
|
|
Non-cash purchase accounting
| | |
—
| | |
—
| | |
0.5
| | |
—
| | | |
0.5
|
|
Legal matters
| | |
—
| | |
—
| | |
—
| | |
1.1
| | | |
1.1
|
|
Initial public company costs
| | |
—
| | |
—
| | |
—
| | |
1.0
| | | |
1.0
|
|
Deferred purchase price payment
| |
| — | |
| — | |
| — | |
| 1.9 |
| |
| 1.9 |
|
Adjusted EBITDA
| | $ | 25.3 | | $ | 11.8 | | $ | 17.9 | | $ | (7.4 | ) | | $ | 47.6 |
| | | | | | | | | |
|
| | | | | | | | | |
|
| | Three Months Ended July 29, 2017 |
| | Fire & Emergency | | Commercial | | Recreation | | Corporate & Other | | Total |
| | | | | | | | | |
|
|
Net Income (loss)
| |
$
|
21.9
| |
$
|
8.9
| |
$
|
7.5
| |
$
|
(23.1
|
)
| |
$
|
15.2
|
| | | | | | | | | |
|
|
Depreciation & amortization
| | |
4.5
|
| |
2.4
|
| |
3.5
|
| |
1.2
| | | |
11.6
|
|
Interest expense, net
| | |
1.0
|
| |
0.5
|
| |
—
|
| |
3.0
| | | |
4.5
|
|
Provision for income taxes
| |
|
—
|
|
|
—
|
|
|
—
|
|
|
9.1
|
| |
| 9.1 |
|
EBITDA
| | |
27.4
| | |
11.8
| | |
11.0
| | |
(9.8
|
)
| | |
40.4
|
| | | | | | | | | |
|
|
Transaction expenses
| | |
—
|
| |
—
|
| |
—
|
| |
0.5
| | | |
0.5
|
|
Sponsor expenses
| | |
—
|
| |
—
|
| |
—
|
| |
0.1
| | | |
0.1
|
|
Restructuring costs
| | |
0.4
|
| |
1.1
|
| |
—
|
| |
0.8
| | | |
2.3
|
|
Stock-based compensation expense
| | |
—
|
| |
—
|
| |
—
|
| |
0.3
| | | |
0.3
|
|
Non-cash purchase accounting
| |
|
1.2
|
|
|
—
|
|
|
0.7
|
|
|
—
|
| |
|
1.9
|
|
Adjusted EBITDA
| |
$
|
29.0
| |
$
|
12.9
| |
$
|
11.7
| |
$
|
(8.1
|
)
| |
$
|
45.5
|
| | | | | | | | | |
|
|
| |
| |
| |
| |
| |
| REV GROUP, INC. |
| ADJUSTED EBITDA BY SEGMENT |
| (Unaudited; dollars in millions) |
| | | | | | | | | |
|
| | Nine Months Ended July 31, 2018 |
| | Fire & Emergency | | Commercial | | Recreation | | Corporate & Other | | Total |
| | | | | | | | | |
|
|
Net Income (loss)
| |
$
|
49.0
| |
$
|
15.5
| |
$
|
26.0
| |
$
|
(55.4
|
)
| |
$
|
35.1
| |
| | | | | | | | | |
|
|
Depreciation & amortization
| | |
11.9
| | |
7.4
| | |
9.5
| | |
5.1
| | | |
33.9
| |
|
Interest expense, net
| | |
2.9
| | |
2.0
| | |
0.3
| | |
13.1
| | | |
18.3
| |
|
Benefit for income taxes
| |
| — | |
| — | |
| — | |
| (7.2 | ) | |
| (7.2 | ) |
|
EBITDA
| | |
63.8
| | |
24.9
| | |
35.8
| | |
(44.4
|
)
| | |
80.1
| |
| | | | | | | | | |
|
|
Restructuring costs
| | |
0.4
| | |
0.2
| | |
2.4
| | |
3.9
| | | |
6.9
| |
|
Transaction expenses
| | |
0.2
| | |
—
| | |
—
| | |
1.9
| | | |
2.1
| |
|
Stock-based compensation expense
| | |
—
| | |
—
| | |
—
| | |
5.1
| | | |
5.1
| |
|
Non-cash purchase accounting expense
| | |
0.4
| | |
0.3
| | |
0.5
| | |
—
| | | |
1.2
| |
|
Sponsor expenses
| | |
—
| | |
—
| | |
—
| | |
0.5
| | | |
0.5
| |
|
Legal matters
| | |
0.7
| | |
0.3
| | |
—
| | |
1.8
| | | |
2.8
| |
|
Initial public company costs
| | |
—
| | |
—
| | |
—
| | |
1.5
| | | |
1.5
| |
|
Deferred purchase price payment
| |
| — | |
| — | |
| — | |
| 4.1 |
| |
| 4.1 |
|
|
Adjusted EBITDA
| | $ | 65.5 | | $ | 25.7 | | $ | 38.7 | | $ | (25.6 | ) | | $ | 104.3 |
|
| | | | | | | | | |
|
| | | | | | | | | |
|
| | Nine Months Ended July 29, 2017 |
| | Fire & Emergency | | Commercial | | Recreation | | Corporate & Other | | Total |
| | | | | | | | | |
|
|
Net Income (loss)
| |
$
|
54.5
| |
$
|
25.5
| |
$
|
11.5
| |
$
|
(82.8
|
)
| |
$
|
8.7
| |
| | | | | | | | | |
|
|
Depreciation & amortization
| | |
10.2
| | |
6.0
| | |
8.3
| | |
2.3
| | | |
26.8
| |
|
Interest expense, net
| | |
3.2
| | |
1.8
| | |
—
| | |
10.4
| | | |
15.4
| |
|
Provision for income taxes
| | |
—
| | |
—
| | |
—
| | |
5.4
| | | |
5.4
| |
|
Loss on early extinguishment of debt
| |
| — | |
| — | |
| — | |
| 11.9 |
| |
| 11.9 |
|
|
EBITDA
| | |
67.9
| | |
33.3
| | |
19.8
| | |
(52.8
|
)
| | |
68.2
| |
| | | | | | | | | |
|
|
Transaction expenses
| | |
0.7
| | |
—
| | |
—
| | |
2.0
| | | |
2.7
| |
|
Sponsor expenses
| | |
—
| | |
—
| | |
—
| | |
0.4
| | | |
0.4
| |
|
Restructuring costs
| | |
0.4
| | |
2.3
| | |
—
| | |
0.8
| | | |
3.5
| |
|
Stock-based compensation expense
| | |
—
| | |
—
| | |
—
| | |
26.1
| | | |
26.1
| |
|
Non-cash purchase accounting
| |
| 1.2 | |
|
—
| |
| 2.0 | |
|
—
|
| |
| 3.2 |
|
|
Adjusted EBITDA
| | $ | 70.2 | | $ | 35.6 | | $ | 21.8 | | $ | (23.5 | ) | | $ | 104.1 |
|
| | | | | | | | | |
|
|
| |
| |
| |
| |
| REV GROUP, INC. |
| ADJUSTED NET INCOME |
| (Unaudited; dollars in millions) |
| | | | | | | |
|
| | Three Months Ended | | Nine Months Ended |
| | July 31, 2018 | | July 29, 2017 | | July 31, 2018 | | July 29, 2017 |
|
Net income
| |
$
|
18.3
| | |
$
|
15.2
| | |
$
|
35.1
| | |
$
|
8.7
| |
|
Amortization of Intangible Assets
| | |
4.6
| | | |
5.1
| | | |
13.7
| | | |
10.4
| |
|
Restructuring Costs
| | |
0.9
| | | |
2.3
| | | |
6.9
| | | |
3.5
| |
|
Transaction Expenses
| | |
-
| | | |
0.5
| | | |
2.1
| | | |
2.7
| |
|
Stock-based Compensation Expense
| | |
1.4
| | | |
0.3
| | | |
5.1
| | | |
26.1
| |
|
Non-cash Purchase Accounting Expense
| | |
0.5
| | | |
1.9
| | | |
1.2
| | | |
3.2
| |
|
Loss on Early Extinguishment of Debt
| | |
-
| | | |
-
| | | |
-
| | | |
11.9
| |
|
Sponsor Expenses
| | |
0.2
| | | |
0.1
| | | |
0.5
| | | |
0.4
| |
|
Legal Matters
| | |
1.1
| | | |
-
| | | |
2.8
| | | |
-
| |
|
Initial Public Company Costs
| | |
1.0
| | | |
-
| | | |
1.5
| | | |
-
| |
|
Deferred Purchase Price Payment
| | |
1.9
| | | |
-
| | | |
4.1
| | | |
-
| |
|
Impact of Tax Rate Change
| | |
(2.1
|
)
| | |
-
| | | |
(12.5
|
)
| | |
-
| |
|
Income Tax Effect of Adjustments
| |
|
(3.1
|
)
| |
|
(3.5
|
)
| |
|
(9.5
|
)
| |
|
(20.2
|
)
|
|
Adjusted net income
| |
$
|
24.7
|
| |
$
|
21.9
|
| |
$
|
51.0
|
| |
$
|
46.7
|
|
| | | | | | | |
|
|
| |
| |
| REV GROUP, INC. |
| ADJUSTED EBITDA OUTLOOK RECONCILIATION |
| (Dollars in millions) |
|
|
| | Fiscal Year 2018 |
| | Low | | High |
|
Net Income
| |
$
|
57.9
| |
$
|
69.0
|
|
Depreciation and Amortization
| | |
46.0
| | |
45.0
|
|
Interest Expense, net
| | |
24.0
| | |
23.0
|
|
Income Tax Expense
| |
|
3.0
| |
|
6.0
|
| | | |
|
|
EBITDA
| | |
130.9
| | |
143.0
|
| | | |
|
|
Restructuring Costs
| | |
7.0
| | |
7.0
|
|
Transaction Expenses
| | |
2.1
| | |
2.1
|
|
Stock-based Compensation Expense
| | |
6.0
| | |
5.0
|
|
Non-cash Purchase Accounting Expense
| | |
1.2
| | |
1.2
|
|
Legal Matters
| | |
4.5
| | |
3.5
|
|
Initial Public Company Costs
| | |
1.7
| | |
1.7
|
|
Sponsor Expenses
| | |
0.6
| | |
0.5
|
|
Deferred Purchase Price Payout
| |
|
6.0
| |
|
6.0
|
|
Adjusted EBITDA
| |
$
|
160.0
| |
$
|
170.0
|
| | | |
|
|
| |
| |
| REV GROUP, INC. |
| ADJUSTED NET INCOME OUTLOOK RECONCILIATION |
| (Dollars in millions) |
|
|
| | Fiscal Year 2018 |
| | Low | | High |
|
Net Income
| |
$
|
57.9
| | |
$
|
69.0
| |
|
Amortization of Intangible Assets
| | |
17.5
| | | |
15.5
| |
|
Restructuring Costs
| | |
7.0
| | | |
7.0
| |
|
Transaction Expenses
| | |
2.1
| | | |
2.1
| |
|
Stock-based Compensation Expense
| | |
6.0
| | | |
5.0
| |
|
Non-cash Purchase Accounting Expense
| | |
1.2
| | | |
1.2
| |
|
Legal Matters
| | |
4.5
| | | |
3.5
| |
|
Initial Public Company Costs
| | |
1.7
| | | |
1.7
| |
|
Sponsor Expenses
| | |
0.6
| | | |
0.5
| |
|
Deferred Purchase Price Payout
| | |
6.0
| | | |
6.0
| |
|
One-time Benefit of U.S. Tax Reform
| | |
(12.0
|
)
| | |
(12.0
|
)
|
|
Income Tax Effect of Adjustments
| |
|
(11.8
|
)
| |
|
(10.7
|
)
|
|
Adjusted Net Income
| |
$
|
80.7
|
| |
$
|
88.8
|
|
| | | |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20180905005898/en/
REV Group, Inc.
Sandy Bugbee, 1-888-738-4037 (1-888-REVG-037)
VP,
Treasurer and Investor Relations
[email protected]
Source: REV Group, Inc.
