REV Group has reported results for the three months ended Oct. 31, showing consolidated net sales in the fourth quarter 2019 were $652.9 million, representing a decline of 1 percent. The decline in sales was primarily the result of lower recreation segment shipments, partially offset by sales growth in the commercial and fire and emergency segments.
Consolidated net sales were $2.4 billion for the 12 months ended Oct. 31, which was an increase of 0.9 percent over the 12 months ended Oct. 31, 2018.
The company’s fourth quarter 2019 net loss was $9 million, which included $7.6 million of impairment charges for the write-down of certain assets and final accounting for previous divestiture activity as well as expenses related to certain restructuring activities.
Full year 2019 adjusted net income was $30 million, compared to $72.7 million for the full year 2018, which represents a decline of 59 percent resulting from lower earnings from operations in the fire and emergency and recreation segments, partially offset by higher earnings in the commercial segment, plus higher interest expense.
“Our businesses navigated tight labor markets and trade concerns to deliver results that would have been in the middle of our revised guidance range, absent the abnormally high health care cost experienced in the fourth quarter,” said Tim Sullivan, CEO REV Group. “Fire and emergency backlog grew 18 percent year over year, we received a pair of significant multi-year municipal transit contracts and won top design awards at the Elkhart RV Open House. We feel confident that the structural changes currently being implemented in fire and emergency and recreation will position us to begin moving our performance back to more acceptable levels.”
Recreation segment net sales were $173.7 million in the fourth quarter 2019, a decrease of $61.7 million, or 26.2 percent, from $235.4 million in the fourth quarter 2018. The decrease in net sales was primarily due to lower net sales attributable to our Class A business, and to lesser extent, lower Super C, towable and camper unit sales.
Recreation net sales for the full year 2019 were $716.3 million, an 11.8 percent decrease from $811.9 million in full year 2018. Recreation segment backlog at the end of the fourth quarter 2019 was $167.0 million, which was down 42.6 percent from $290.7 million at the end of fiscal year 2018, but up 28.8 percent sequentially from $129.7 million at the end of the third quarter 2019.
“All product categories enjoyed a successful Elkhart RV Open House in September, resulting in several design awards and new dealer wins in key, high volume territories,” said Sullivan. “The strength of our new product lineup was demonstrated at the show and we expect our product portfolio positions us to outperform the industry as wholesale shipments are anticipated to become more closely aligned with retail sales going forward. In addition, we believe the restructuring actions taken in this segment during fiscal 2019 will provide profitability tailwind in fiscal 2020 that is not tied to volumes.”
