REV Group (REVG) Q3 2024 earnings summary

Executive summary

• Net income for Q3 2024 rose to $18.0 million from $14.9 million year-over-year, with net sales of $579.4 million, reflecting the Collins Bus divestiture and strong Specialty Vehicles performance.

• Adjusted EBITDA increased to $45.2 million, up 14.7% year-over-year, with a 49.7% rise excluding Collins, driven by Specialty Vehicles margin expansion and operational improvements.

• Specialty Vehicles segment achieved a 10.3% Adjusted EBITDA margin in Q3, with a $4.1 billion backlog and sequential profitability improvements in fire and ambulance businesses.

• Successfully navigated RV market headwinds and accelerated the wind-down of the ENC municipal transit bus business.

• Maintained a strong balance sheet with net debt below 1x trailing twelve-month Adjusted EBITDA and ample liquidity.

Financial highlights

• Q3 2024 net sales were $579.4 million, down $101 million year-over-year; excluding Collins Bus, sales declined $54.7 million or 8.6%.

• Adjusted EBITDA was $45.2 million, up $5.8 million year-over-year; excluding Collins, Adjusted EBITDA increased $15 million or 49.7%.

• Net income for Q3 2024 was $18.0 million; Adjusted Net Income was $24.8 million.

• Gross profit for Q3 2024 was $78.3 million (13.5% margin), with SG&A expenses down 21% year-over-year to $42.6 million.

• Net debt at quarter end was $164.5 million, with $262 million available under the ABL revolving credit facility.

Outlook and guidance

• Fiscal 2024 net sales guidance is $2.35–$2.45 billion; Adjusted EBITDA guidance is $155–$165 million.

• Adjusted Net Income expected at $76–$89 million; net income at $226–$240 million.

• Adjusted Free Cash Flow guidance is $61–$72 million; capital expenditures $30–$35 million; interest expense $26–$28 million.

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

• Double-digit margins in Specialty Vehicles expected to continue into fiscal 2025.