REV Group (REVG) Q2 2024 earnings summary

Executive summary

• Q2 net sales were $616.9 million, down year-over-year mainly due to the Collins Bus divestiture and lower Recreational Vehicles sales; excluding Collins, net sales declined 2.7% as Specialty Vehicles growth offset RV declines.

• Adjusted EBITDA for Q2 was $37.5 million, up 18.3% year-over-year excluding Collins, driven by Specialty Vehicles outperformance; net income rose to $15.2 million, supported by divestiture gains.

• Returned $308.5 million to shareholders through a $179.3 million special dividend and $126 million in share repurchases, funded by Collins Bus divestiture proceeds.

• Completed leadership transition with Amy Campbell appointed CFO and board refresh, including new directors and reduced influence of former major shareholder.

• Consolidated backlog reached $4.34 billion, led by strong fire and ambulance order intake, while RV backlog declined.

Financial highlights

• Q2 2024 net sales were $616.9 million, down 9.4% year-over-year; adjusted EBITDA was $37.5 million; adjusted net income was $20.9 million, nearly flat year-over-year.

• Gross profit for the quarter was $77.3 million (12.5% margin); operating income was $22.9 million.

• Net debt at quarter end was $181.8 million, with $38.2 million cash on hand and $280.3 million available under the ABL facility.

• Adjusted free cash flow for the quarter was $67.2 million.

• Q2 2024 EPS was $0.29 basic, $0.28 diluted; adjusted diluted EPS was $0.39.

Outlook and guidance

• FY2024 net sales guidance updated to $2.4–$2.5 billion, reflecting lower RV and terminal truck sales, partially offset by fire and emergency strength.

• Adjusted EBITDA guidance raised to $151–$165 million; adjusted net income expected at $76–$90 million; net income at $230–$245 million.

• Adjusted free cash flow forecasted at $61–$72 million; capex at $30–$35 million; effective tax rate 25–27%.

• Net cash from operating activities forecasted at $20–$36 million, including $71 million in divestiture-related costs.

• Quarterly dividend of $0.05 per share declared, annualized at $0.20 per share.