REV Group Inc., parent of REV Recreation Group, reported that consolidated net sales in the first quarter were $518.7 million, representing growth of 0.7% over the prior year quarter.
During the period, the company incurred a net loss of $14.6 million, or 23 cents per diluted share, compared to net income of $9.4 million, or 14 cents per diluted share, in the first quarter of 2018.
The increase in consolidated net sales was driven by continued sales growth in both the commercial and recreation segments, which was partially offset by lower net sales in the fire & emergency segment.
“Results for the first quarter of fiscal 2019 came in generally as expected. As we mentioned last quarter, the beginning of fiscal year 2019 would include a reset of our operations and production cadence as a result of the many supply headwinds we faced in fiscal 2018. In addition, we experienced order growth across most of our product categories during the first quarter translating into sequentially higher backlog levels and setting us up well for the remainder of the year,” said REV Group CEO Tim Sullivan. “As a result of our focus on net working capital management we drove stronger year-over-year cash flow results. I am proud of our team’s ability to effectively manage through several short-term issues and I believe that most of those are now behind us. We continue to expect a successful return to organic top-line growth and improved profitability in fiscal 2019 and we remain on track to meet our full year objectives.”
Other highlights include:
- First quarter net operating loss of $11.2 million.
- First quarter adjusted EBITDA of $12.3 million and adjusted net loss of $2.9 million.
- First quarter net cash used in operating activities was $39.4 million compared to $72.4 million in the prior year quarter, a 45.6% improvement.
- Total backlog increased to $1.4 billion as of Jan. 31.
Recreation segment net sales were $176.3 million for the first quarter 2019, an increase of $9 million, or 5.4%, from $167.3 million for the first quarter 2018. Recreation segment sales growth was primarily due to higher sales of our Super C and Class B RVs as well as a full quarter of towable and camper sales through the acquisition of Lance Camper Mfg. Corp. The increase was partially offset by a reduction in Class A sales. Excluding the impact of net sales from Lance, which was acquired late in the first quarter 2018, recreation segment net sales decreased $7.8 million in the first quarter 2019 compared to the first quarter 2018. Recreation segment backlog at the end of the first quarter 2019 was $225.2 million, which was down 22.5% from $290.7 million at the end of fiscal year 2018. This decrease in backlog is reflective of the softer Class A RV market, somewhat offset by growth in our Class B and Super C’s.
Sullivan concluded, “First quarter results were in-line with our expectations for the most part and our view of end market demand and macro conditions remains consistent. Therefore, we are reaffirming our prior full year guidance and are still expecting fiscal year 2019 revenues of $2.4 to $2.6 billion, Adjusted EBITDA of $150 to $170 million, net income of $43 to $63 million, and Adjusted Net Income of $66 to $84 million.”
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