REV Group, Inc. Q4 FY2024 earnings call

• Full - year consolidated net sales decreased by $258 million or 9.8% compared to the prior year. Adjusting for the $147 million revenue from Collins in the last three quarters of 2023, net sales decreased by $111 million or 4.4% year - over - year. - The fire and emergency groups had a 23% year - over - year increase in net sales, benefiting from production ramps and price realization. - Throughout the year, the fire and emergency production rates exceeded pre - pandemic levels, a result of operational excellence with lean initiatives. - Completed the wind - down of the Eldorado National California (ENC) municipal transit bus business and sold ENC for approximately $52 million before transaction costs.

Fourth - quarter Specialty Vehicles segment sales were approximately $440 million, a decrease of $38.9 million compared to the prior year. Excluding the impact of the Collins divestiture, net sales increased by $15.3 million or 3.6% compared to the prior year quarter. Segment adjusted EBITDA was $50.2 million, an increase of $6.9 million. Excluding the impact of the Collins divestiture, adjusted EBITDA increased by $20.3 million or 68% compared to the prior year quarter. Recreational vehicle segment sales in the fourth quarter were $158 million, a decrease of 26.5% versus the prior year's fourth quarter. Adjusted EBITDA of the recreational vehicle segment was $8.1 million, a decrease of $11 million compared to the prior year.

• 2025 fiscal full - year net sales are expected to be in the range of $2.3 billion to $2.4 billion. - Adjusted EBITDA is expected to be between $192 million and $220 million. - Net income is expected to be between $98 million and $125 million, and adjusted net income is expected to be between $116 million and $140 million. - Free cash flow is expected to be in the range of $90 million to $110 million.

• Risks include matters described in Form 8 - Ks and Form 10 - Ks filed with the SEC, such as supply chain disruptions, inflationary pressures, and demand fluctuations in cyclical segments like the recreational vehicle segment.

Q: Where is the company operationally and about M&A?

A: Mark said there is still work to be done on the fire side, and the plan is being executed as expected. The company is constantly looking for opportunities across the enterprise. Regarding M&A, if the right opportunity comes, it will be considered, and the company has the flexibility given the share repurchase program and debt level.

Q: What's the right M&A opportunity?

A: Something that fits into the specialty vehicle space, such as related to refuse, utilities, etc., which are tangential to the company's current wheelhouse.

Q: Are there additional room to adjust or divest?

A: The company constantly assesses its portfolio, having proven with the bus businesses, and will look at other opportunities if they create shareholder value.

Q: About the recreation business growth?

A: It is reliant on what is seen at the Tampa show. There are orders, but dealers are hesitant to release orders for production, and it is a second - half story.

Q: About free cash flow conversion?

A: Amy said it is related to working capital management, such as the decline in customer deposits and inventory management.

Q: Are the specialty margins sustainable?

A: Amy said the 14% - 16% margin at the Specialty Vehicles segment by 2027 is structurally sustainable.

Q: What's the approach for the buyback authorization?

A: The buyback gives management flexibility, and the company can be programmatic or opportunistic in deploying the capital based on various factors.