REV GROUP, INC. Financial Report Fiscal Second Quarter 2020 N Y S E : R E V G June 8, 2020
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, m anagement believes that the evaluation of REV Group’s ongoing operating results may be enhanced by a presentation of Adjusted EBITDA an d 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 REV Group believes are not indicative of its underlying operating performance. Adjusted Net Income represents net income, as adjusted for certain items that we believe are not indicative of our ongoing operating performance. REV Group believes that the use of Adjusted EBITDA and Adjusted Net Income provides 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. See the Appendix to this presentation (and our other filings with the SEC) for reconciliations of Adjusted EBITDA and Adjusted Net Income to the most closely comparable financial measures calculated in accordance with GAAP. Cautionary Statement About Forward-Looking Statements This presentation contains statements that REV Group believes to be “forward - looking statements” within the meaning of the Priva te Securities Litigation Reform Act of 1995. 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 th roughout this presentation and include statements regarding REV Group’s intentions, beliefs, goals or current expectations concerning, amon g other things, its results of operations, financial condition, liquidity, prospects, growth, strategies and the industries in which we operate, inc luding REV Group’s outlook for the full-year fiscal 2020. REV Group’s forward -looking statements are subject to risks and uncertainties, including those highlighted under “Risk Factors” and “Cautionary Note Regarding on Forward - Looking Statements” in REV Group’s public filings with the SEC an d the other risk factors described from time to time in subsequent quarterly or annual reports on Forms 10-Q or 10-K, which 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 of this presentation. REV Group 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. 2
A Path Forward Initial Opportunity Assessment Short Term Actions • Structural cost reductions and scale leverage • Sustainable business operations improvements Building Capabilities – REV Business Systems (RBS) • Operating model and structure • Demand creation – building improved commercial “go -to- market” capabilities • Demand fulfillment – REV Production System (RPS) integration enterprise-wide Strategy/Use of Capital • Portfolio optimization and focus on core • Continued focus on debt reduction • Investment in new and improved products & technologies for platforming and simplification • Reinvestments driven by make versus buy decisions • Investment evaluations based on cash returns on investment 3
Second Quarter Fiscal 2020: Consolidated Results Adjusted EBITDA 1 Net Sales $800 $40 7% $36.1 $35 6% $ 615.0 $600 $30 $ 547.0 5.9 % 5% $25 ($millions) ($millions) 4% $20 $400 3% $15 2% $200 $10 $7.6 1.4 % 1% $5 $0 $0 0% Q2'19 Q2'20 Q2'19 Q2'20 • Net sales of $547 million, decreased 11.1% compared to prior year quarter 2 Adjusted EBITDA 1,2 of $7.6 million, down 78.9% compared to prior year quarter • • Adjusted EBITDA margin of 1.4%, down 450 basis points compared to prior year quarter • Year-to-date Corporate Adj. EBITDA expense down $2.8 million compared to prior year quarter 4 ¹ For a reconciliation of net income (loss) to Adjusted Net Income and Adjusted EBITDA, see the Appendix to this presentation. 2 Acquired Spartan Emergency Response sales totaled $62.6 million, Adjusted EBITDA $3.4 million
Second Quarter Fiscal 2020: Fire & Emergency Segment 1 F&E Revenue F&E Adj. EBITDA Outlook ($millions) ($millions) • Fire production and completion $289.3 $320 $18 schedules are returning to $15.1 10% $247.1 $15 normal, however inspection $240 8% $12 $10.2 and resulting deliveries will 6.1% 6% $160 $9 continue to be impacted by end 4% customers’ COVID -related $6 3.5% $80 2% policies $3 $0 $0 0% • $1,112 million total F&E backlog reflects Spartan ER acquisition and strong Ambulance inbound orders • • Spartan Emergency 2Q20 Adjusted EBITDA of Response second fiscal $10.2 million reflects • Future Ambulance production quarter revenue was productivity headwinds and shipments are dependent approximately $60 million on OE chassis production • Unplanned absenteeism schedules and resulting chassis • COVID-19 impacted resulted in lower productivity availability production rates across the segment • Future customer order rates • • Inspection and delivery Spartan ER is on track for its could be impacted by weaker was also impacted profitability and integration municipal budgets resulting plans from COVID-related shutdowns ¹ For a reconciliation of net income (loss) to Adjusted Net Income and Adjusted EBITDA, see the Appendix to this presentation. 5
Second Quarter Fiscal 2020: Commercial Segment 1 Commercial Revenue Commercial Adj. EBITDA Outlook ($millions) ($millions) • Divested shuttle bus business $14.7 12% $16 $200 $170.0 represented approximately $200 $14 10% $143.2 $12 million of TTM sales $150 8% 8.6% $10 $8.0 • School bus orders did not increase 6% $100 $8 5.6% $6 according to typical seasonality 4% $50 $4 within the quarter, and are 2% $2 expected to only materialize in a 0% $0 $0 fashion consistent with school district decisions regarding the upcoming fall semester • • Net sales of $142.3 million Adjusted EBITDA of $8.0 • Municipal transit bus production were down 15.8% vs. prior million, down 45.6% vs. 2Q19 continues against a large order year period • Profitability was impacted by • Backlog of $413.2 million at fiscal • Specialty sales decreased lower shipments and quarter end was inclusive of due to lower terminal truck unexpected absenteeism approximately $68 million of and street sweeper sales • Specialty division margins shuttle bus backlog, prior to • School bus shipments were also impacted by lower divestiture declined year-over-year due sales due to decreased to production disruptions capital programs at large and order rates accounts ¹ For a reconciliation of net income (loss) to Adjusted Net Income and Adjusted EBITDA, see the Appendix to this presentation. 6
Second Quarter Fiscal 2020: Recreation Segment 1 Recreation Revenue Recreation Adj. EBITDA Outlook ($millions) ($millions) • Indications since early May are $199.7 $17.3 10% $18 $200 encouraging for order trends 8% across all RV product 8.7% $150 $13 $114.0 categories 6% $100 $8 4% • Class A dealer inventories 2% remain near historic lows, and $50 $3 -$1.1 despite lingering COVID-19 0% $0 -1.0% related impacts, backlog -$2 -2% exiting the quarter was up 300% year-over-year • Net sales of $114 million • Adjusted EBITDA loss of $1.1 • A company specific non- reflects several weeks of million reflects a significant motorized backlog production shutdown and decline in revenue related to normalization is expected to muted dealer customer foot suspension of normal result in wholesale shipments traffic due to travel production activities that are more consistent with restrictions and stay-at- • retail sales for the rest of the home orders The Company continued to pay year employees’ healthcare costs • The decline in sales was despite temporary layoffs and mostly realized as lower furloughs, negatively impacting Class A and non-motorized profitability unit sales during the quarter 7 ¹ For a reconciliation of net income (loss) to Adjusted Net Income and Adjusted EBITDA, see the Appendix to this presentation.
Recommend
More recommend
