Why Specialty Vehicles Maker REV Group Shares Are Gearing Up Today

REV Group, Inc. REVG reported a fourth-quarter FY23 sales growth of 11.2% year-over-year to $693.3 million, beating the consensus of $666.13 million. 

The increase in consolidated net sales was primarily due to higher net sales within the Fire & Emergency and Commercial segments.

The company, which manufactures specialty vehicles and related aftermarket parts and services, reported an Adjusted EPS of $0.53, beating the consensus of $0.34.

Gross profit soared 42.9% to $95.5 million, and the margin expanded by 306 bps to 13.8%.

Adjusted EBITDA was $54 million compared to $33.5 million in 4Q22, margin expanded by 242 bps to 7.8%.

The company's backlog increased to $4.46 billion at the end of the quarter, compared with $4.23 billion a year ago.

REVG's net cash provided by operating activities for the fiscal totaled $126.5 million, compared to $91.6 million a year ago. REV Group held cash and equivalents of $21.3 million, with a net debt of $128.7 million.

REV Group had $384.1 million available under its ABL revolving credit facility as of October 31, 2023.

"We exited our 2023 fiscal year with a strong balance sheet, solid municipal end markets, and a record Fire & Emergency backlog which we believe positions us well for fiscal 2024," commented REV Group CEO Mark Skonieczny.

Dividend: REV Group declared a quarterly cash dividend of $0.05 per share of common stock, payable on January 12, 2024, to shareholders of record on December 26, 2023.

FY24 Outlook: REV Group expects net sales of $2.6 billion-$2.7 billion vs. consensus of $2.63 billion.

The company sees an adjusted net income of $82 million-$99 million, adjusted EBITDA of $165 million-$185 million, and free cash flow of $70 million-$85 million.

Price Action: REVG shares are trading higher by 5.33% at 17.96 premarket on Wednesday.

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