REV Group Inc. reported consolidated net sales in the fourth quarter, ended Oct. 31, were $683.9 million, growing 25.5% from $544.7 million in the same period a year ago. The increase was driven by strong growth in the fire and emergency and recreation segments. For the full year, net sales were $2.27 billion, an increase of 17.7% from $1.9 million in the prior year period.
The company’s fourth quarter 2017 net income was $22.7 million, or 35 cents per diluted share, compared with $12 million, or 24 cents per share, in the prior year period. Net income for the full year 2017 was $31.4 million, or 50 cents per diluted share, compared with $30.2 million, or 58 cents per share, a year ago. Full year 2017 net income was negatively impacted by several one-time expense items, the largest of which related to the company’s IPO and subsequent debt refinancings.
Full year adjusted net income was $75.9 million compared to $53.2 million for the full year 2016, which represents an increase of 42.7% resulting from higher earnings from operations, positive impact from our acquisitions, as well as lower interest expense.
Adjusted EBITDA in the fourth quarter 2017 was $58.4 million, representing growth of 39.1% over adjusted EBITDA of $42.0 million in the fourth quarter 2016. A number of factors including increased vehicle sales, ongoing procurement and production cost optimization initiatives, strategic pricing actions, and the impact of acquisitions drove the higher adjusted EBITDA in the quarter. Full year 2017 adjusted EBITDA was $162.5 million, which reflects a 32.3% increase over full year 2016.
REV Group, Inc. President and CEO, Tim Sullivan said, “We are pleased to report another quarter of strong earnings and year-over-year growth. Our strong fourth quarter completed the first successful year for REV Group as a public company. The combination of successful commercial and product strategies, higher sales volumes and our team’s focus on operational improvement initiatives drove improved profit margins across all our businesses on a year over year basis.
“I am proud to report 18% sales growth and 32% growth in adjusted EBITDA in 2017, but even more importantly, I am pleased to report that all three of our segments continue to have strong outlooks. We plan to continue this trajectory of earnings growth in excess of sales growth into next year. In summary, it was a strong quarter and year, we are well positioned for continued growth in fiscal 2018 and we will continue to make progress towards our enterprise-wide EBITDA margin goal of 10%.”
REV Group’s recreation segment adjusted EBITDA grew 249.4% in the fourth quarter 2017 to $14.5 million compared to $4.2 million in the fourth quarter 2016. Adjusted EBITDA margin in the fourth quarter grew 423 basis points to 7.7% of net sales compared to 3.4% in the fourth quarter 2016. The strong expansion in profitability is attributable to higher unit volumes, better product mix and continued benefit from our ongoing procurement, cost of quality and other operating initiatives. Excluding the impact of acquisitions, recreation Adjusted EBITDA in the fourth quarter 2017 increased 166.8 percent compared to the fourth quarter 2016.
REV Group builds motorhomes under the American Coach, Fleetwood, Monaco and Holiday Rambler brand names. Through acquisition, the company’s portfolio also includes Renegade RV and Midwest Automotive Designs.
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