Rev Group Stock Falls On Q4 Miss, FY22 Sales Outlook Below Consensus

Rev Group Stock Falls On Q4 Miss, FY22 Sales Outlook Below Consensus

Rev Group Inc REVG reported a fourth-quarter sales decline of 4.3% year-over-year to $589.9 million, missing the consensus of $600.72 million.

  • Sales by segments: Fire & Emergency $277.3 million (-15.9% Y/Y), Commercial $94.5 million (+3.8% Y/Y) and Recreation $217.9 million (+12.2% Y/Y).
  • Adjusted EPS improved to $0.27 from $0.19 in 4Q20, missing the consensus of $0.29.
  • The gross margin expanded by 106 bps to 11.1%. The operating income recovered to $10.9 million from a loss of $(2.1) million a year ago, and the margin was 1.8%.
  • Adjusted EBITDA increased 11.1% Y/Y to $31.1 million, and margin expanded by 80 bps to 5.3%.
  • Rev Group generated cash from operating activities for the year of $158.3 million, compared to $55.7 million a year ago. It held cash and equivalents of $13.3 million as of October 31, 2021.
  • The company's backlog increased 76% Y/Y to ~$3.13 billion as of October-end.
  • Rev Group's quarterly cash dividend of $0.05 per share is payable on January 14, 2022, to shareholders of record on December 31, 2021.
  • FY22 Outlook: Rev Group expects net sales of $2.3 billion - $2.55 billion versus the consensus of $2.59 billion.
  • It expects Adjusted EBITDA of $125 million - $155 million, Adjusted Net Income of $64 million - $89 million, and Free Cash Flow of $58 million - $80 million.
  • Price Action: REVG shares are trading lower by 10.2% at $14.30 during the premarket session on Wednesday.

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