REV Group Inc. reported a 12.8% gain in sales to $595.6 million during its third quarter, ended July 29, compared with $528.2 million the year prior.
This increase was driven by strong growth in the fire & emergency and recreation segments, offset slightly by the impact of a chassis recall, which delayed shipments in both the fire & emergency and commercial segments. Year-to-date consolidated net sales were $1.6 billion, an increase of 14.7% over the first nine months of fiscal 2016.
Net income during the quarter was $15.2 million, or 23 cents per diluted share, compared with $13 million, or 25 cents per share, a year ago. Net income for the first nine months was $8.7 million, or 14 cents per diluted share, versus $18.1 million, or 35 cents per diluted share, in the year ago period. REV attributed the drop in net income for the nine months to several one-time expense items, the largest of which related to the company’s IPO and subsequent debt refinancings.
REV President and CEO Tim Sullivan said, “We are pleased to report our third straight quarter of strong earnings as a public company. The quarter was one of significant progress where we both delivered significant growth in net sales and EBITDA as well as made anticipated progress on many of our longer-term growth strategies in parts and service, operational and commercial excellence, new product introductions, and value creating capital allocation.
“… Looking ahead to the fourth quarter, parts to repair the vehicles impacted by the chassis recall are now available and we are again able to ship the impacted vehicles,” he added. “Through the first nine months of the year, we are on track with our expectations for full-year 2017 earnings and therefore we are reaffirming previous guidance for the full year. In summary, it was a strong quarter and we continue to make incremental progress towards our enterprisewide EBITDA margin goal as well as our organic and inorganic growth objectives.”
The company’s ecreation segment grew net sales to $177.9 million in the third quarter 2017, representing an increase of 39.9% over the prior year period. Recreation segment sales growth was partially driven by the acquisition of Renegade RV and Midwest Automotive Designs which were completed on Dec. 30, 2016, and April 13, 2017, respectively.
Recreation net sales excluding the acquisitions of Renegade and Midwest increased 9.3% during the quarter due to increased unit sales volumes and higher average selling prices. In addition to the growth in unit sales for the segment’s Class A coaches, the segment is also benefiting from expansion of its Class C line of products as well as overall growth in its end markets.
Recreation net sales for the nine months were $470.9 million, an increase of 31.7% over net sales of $357.5 million for the first nine months of fiscal 2016. Excluding acquired companies, year-to-date Recreation net sales increased 13.0% compared to the same period in 2016. Recreation segment backlog at the end of the third quarter 2017 was $116.2 million, which was up 44.4% from $80.4 million at the end of fiscal year 2016 and up 3.1% sequentially from $112.7 million at the end of the second quarter 2017.
REV Group also reported that effective Sept. 5, REV established a collaborative connection with Ford Motor Co. dealers to provide a complete catalog of genuine Ford chassis parts through its REV Parts Division to all of REV’s dealers. This access to Ford parts cataloging information allows REV dealers to order genuine Ford chassis parts through REV’s online parts system for a complete range of REV vehicle brands built on Ford chassis.