REV Group has reported results for the three months ended Jan. 31, showing that consolidated net sales were $518.7 million, representing growth of 0.7 percent over the three months ended Jan. 31, 2018. The increase in consolidated net sales was driven by continued sales growth in both the commercial and recreation segments, which was partially offset by lower net sales in the fire and emergency segment.
“As we mentioned last quarter, the beginning of fiscal year 2019 would include a reset of our operations and production cadence as a result of the many supply headwinds we faced in fiscal 2018,” said Tim Sullivan, CEO REV Group. “In addition, we experienced order growth across most of our product categories during the first quarter translating into sequentially higher backlog levels and setting us up well for the remainder of the year. As a result of our focus on net working capital management we drove stronger year-over-year cash flow results.”
The company’s first quarter 2019 net loss was $14.6 million, compared to net income of $9.4 million in the first quarter of 2018.
Recreation segment net sales were $176.3 million for the first quarter 2019, an increase of $9 million, or 5.4 percent, from $167.3 million for the first quarter 2018. Recreation segment sales growth was primarily due to higher sales of our Super C and Class B RVs, as well as a full quarter of Lance towable and camper sales, partially offset by a reduction in Class A sales. Excluding the impact of net sales from Lance, which was acquired late in the first quarter 2018, Recreation segment net sales decreased $7.8 million in the first quarter 2019 compared to the first quarter 2018. Recreation segment backlog at the end of the first quarter 2019 was $225.2 million, which was down 22.5 percent from $290.7 million at the end of fiscal year 2018. This decrease in backlog is reflective of the softer Class A RV market, somewhat offset by growth in our Class B and Super C’s.
“We continue to see strength in our recreation segment, particularly, in our Class B and Super C’s,” said Sullivan. “Our efforts to realign our Class A product line have progressed nicely. The Class B market remains strong and we believe we are well positioned to capture share in the market. Although we have recently seen the RV market soften in certain categories, we continue to believe our focus on new product introductions with attractive features and price points should enable us to outperform the industry. We are confident that our first-class brands and ongoing performance improvements in this segment will support continued growth in profitability in this segment in fiscal year 2019.”
