MILWAUKEE, Wis. — REV Group Inc. has reported results for the three months ended July 31. Consolidated net sales in the third quarter 2018 were $597.7 million, representing growth of 0.4 percent over the three months ended July 29, 2017.
The company’s third quarter 2018 net income was $18.3 million, or $0.28 per diluted share, representing net income growth of 20.4 percent compared to the third quarter 2017. Adjusted Net Income2 for the third quarter 2018 was $24.7 million, or $0.38 per diluted share, an increase of 12.8 percent compared to $21.9 million, or $0.33 per diluted share, in the third quarter 2017.
Adjusted EBITDA2 in the third quarter 2018 was $47.6 million, $2.1 million better than the third quarter 2017. The company ended the quarter with total backlog of $1,276.0 million, up 0.4 percent sequentially, representing growth in line with historical seasonality of its businesses, and up 34.1 percent versus third quarter 2017.
“The availability of commercial chassis was a bigger headwind in the third quarter than previously anticipated, and we now don’t anticipate a return to normalcy until the end of the calendar year. In addition, during the quarter we experienced a significant lengthening of other material lead times creating additional production inefficiencies. Together these issues delayed product shipments beyond the quarter within all three of our segments and we expect this to continue through the fourth quarter,” commented Tim Sullivan, CEO REV Group.
He added, “In addition, certain business units including our Class A RV, specialty products, and parts business have under-performed our targets and we are taking specific actions to address these areas. We believe the material and chassis availability issues can be resolved by calendar year end. More importantly, we were able to largely mitigate the impacts of cost inflation and preserve margins in the quarter through price increases and our previously announced cost reductions.”
Sullivan added, “We remain encouraged by continued strength of orders for most of our product categories and our resulting backlogs at the end of the quarter. We have not changed our long-term objectives and believe in our opportunities for continued margin expansion in fiscal 2019 and beyond despite the current supply chain issues. In addition, our leadership position in our markets remains strong. We expect to close the year with good momentum going into fiscal 2019 supported by strong backlogs and a reduced cost infrastructure. We will continue to evaluate opportunities to drive increased returns to shareholders in the upcoming quarter and in the next fiscal year and beyond. In the third quarter 2018 we repurchased $40.7 million of our shares and our board of directors recently increased our share repurchase authorization by an additional $50 million, for a total of $55 million remaining under board authorizations.”
SOURCE: REV Group press release