REV Group Stock

REV Group, Inc designs, manufactures, and distributes specialty vehicles and related aftermarket parts and services.

The company serves a diversified customer base, primarily in the United States and Canada. The company's products are sold to municipalities, government agencies, private contractors, consumers, and industrial and commercial end users. The company has a diverse customer base with its top 10 customers representing approximately 19% of its net sales in year ended October 31, 2023. The company's business consists primarily of design, engineering, technology application, integration, and assembly activities.

Segments

The company operates through three segments: Fire & Emergency, Commercial, and Recreation.

Fire & Emergency segment

This segment sells fire apparatus equipment under the Emergency One (E-ONE), Kovatch Mobile Equipment (KME), Ferrara and Spartan Emergency Response (Spartan ER), which consists of Spartan Emergency Response, Smeal, Spartan Fire Chassis, and Ladder Tower brands, and ambulances under the American Emergency Vehicles (AEV), Horton Emergency Vehicles (Horton), Leader Emergency Vehicles (Leader), Road Rescue and Wheeled Coach brands.

The company is the largest manufacturer of fire and emergency vehicles in the United States and has a portfolio of products, including Type I ambulances (aluminum body mounted on a heavy truck-style chassis), Type II ambulances (van conversion ambulance), Type III ambulances (aluminum body mounted on a van-style chassis), pumpers (fire apparatus on a custom or commercial chassis with a water pump and water tank to extinguish fires), aerial trucks (fire apparatus with stainless steel or aluminum ladders), tanker trucks and rescues, aircraft rescue firefighting (ARFF), custom cabs & chassis and other vehicles. Each of its individual brands is distinctly positioned and targets certain feature points in the market such that dealers often carry, and customers often buy more than one REV Fire & Emergency product line.

Commercial

This segment sells small Type A school buses, transit buses, terminal trucks and sweepers. The company serves municipal segments through the Collins Bus (Collins Bus Corporation), Magellan and Eldorado National (California) (ENC) brands. It serves the terminal truck market through the Capacity (Capacity of Texas, Inc.) brand and the sweeper market through the LayMor brand. The company's products in the Commercial segment include transit buses (large municipal buses where the company builds its own chassis and body), Type A school buses (small school bus built on commercial chassis), sweepers (three- and four-wheel versions used in road construction activities), and terminal trucks (specialized vehicles, which move freight in warehouses, intermodal yards, distribution and fulfillment centers and ports). Within each market, the company produces many customized configurations to address the diverse needs of its customers.

Recreation

This segment serves the RV market through the following principal brands: American Coach, Fleetwood RV, Holiday Rambler, Renegade RV, Midwest Automotive Designs and Lance Camper. The company's brand portfolio contains some of the recognized brands in the RV industry. Under these brands, the company provides a variety of recognized motorized and towable RV models, such as: American Eagle, Bounder, Discovery LXE, Renegade Verona, Renegade XL, among others. The company's products in the Recreation segment include Class A motorized RVs (motorhomes built on a heavy-duty chassis with either diesel or gas engine configurations), Class C and 'Super C' motorized RVs (motorhomes built on a commercial truck or van chassis), Class B RVs (motorhomes built out within a van chassis and high-end luxury van conversions), and towable travel trailers and truck campers. The Recreation segment also includes Goldshield Fiberglass (Goldshield Fiberglass, Inc.), which produces a range of custom molded fiberglass products for the Fleetwood family of brands, RV, and broader industrial markets.

Markets

The company operates primarily in the United States in the fire and emergency, commercial and recreation markets. It sells internationally through dealers and agents to end markets that utilize the U.S.-style chassis and product configurations.

Fire and Emergency Markets: Fire and emergency products are used by municipalities and private contractors to provide essential services, such as fire suppression, emergency/rescue response, disaster relief, wildland, aircraft rescue and firefighting, and patient transport. Additionally, the company provides remounting services to its ambulance dealers and customers, where it remounts ambulance bodies onto new chassis, thereby extending the life of the body. The company conducts these services in two locations, Grove City, Ohio and Jefferson, North Carolina.

Commercial Markets: The company's Commercial segment addresses various products and end markets. The transit bus markets include applications, such as airport car rental, airport shuttle, college and university transit, city transit and numerous other applications.

Recreation Markets: The RV industry includes various types and configurations of both motorized and towable RVs of which the company manufactures and sells Class A, Class B, Class C, and Class Super-C motorized RVs, travel trailers and truck campers. Motorized RVs are self-contained units built on motor vehicle chassis with their own lighting, plumbing, heating, cooking, refrigeration, sewage holding and water storage facilities. Class A RVs are constructed on purpose-built chassis for reaction travel complete with engine and drivetrain components. Class B RVs are built on a consumer van chassis with the living area contained within the existing van frame. Class C RVs are built on consumer truck or van chassis, which include an engine, drivetrain and a finished cab section. In Class Cs, the company designs, fabricates and installs the living area to connect to the driver's compartment and the cab section. Super Class C RVs are heavy duty Class C motorhomes built on a commercial truck chassis that could be used in conjunction with other outdoor or sporting activities because of a larger towing capacity. The company also designs and manufactures a portfolio of towable travel trailers and truck campers. These trailers and campers include a self-contained living area with their own heating, lighting, plumbing, cooking, refrigeration, sleeping and bathroom facilities but excluding a motor vehicle chassis. These products require the RV owner to utilize a motor vehicle to pull or carry them between destinations.

Customers and End Markets

The company's end markets include the municipal market (vehicles for essential services, such as emergency response, firefighting patient transportation and student transportation), the consumer market (vehicles for transportation and leisure needs) and the industrial/commercial markets (vehicles for transportation, construction projects and global port and intermodal transportation applications), and the private contractor market (privately owned fleets that provide transportation services).

Strategy

The key elements of the company's strategy include to develop innovative new customer offerings; enhance sales and distribution model; accelerate aftermarket growth; and pursue value enhancing acquisitions.

Distribution

The company distributes either through its direct sales force or its established dealer network, including approximately 530 dealers. Substantially all of its dealers are independently owned. Whether it sells directly to the customer or through a dealer depends largely on the product line, the customer base and applicable regulations. The company provides its direct sales force representatives and dealers with training on the operation and specifications of its products.

Fire & Emergency segment

The company's fire apparatus business partners with a combination of independent dealer networks and a direct sales force to sell its products. Its North American dealer network includes 86 dealers in the United States and Canada. Globally, there are 30 international dealers. Additionally, the company sells the Spartan cab chassis to approximately 36 original equipment manufacturers (OEM). Brands in the fire segment participate in Government Services Agency (GSA) Schedules Program and Defense Logistics Agency (DLA) troop support.

The company sells its ambulances through internal direct sales personnel, as well as a select group of independent dealers in the United States. Its direct sales force is responsible for sales to key accounts that operate in multiple states or require a direct OEM relationship to service their business. Approximately 50 independent dealers provide full coverage of the U.S. domestic market and provide both sales and service to its customers. In addition, the company participates in Government Services Agency (GSA) Schedules Program and it exports to most of the international markets that participate in this program. These include countries in the Middle East, Latin America, and the Caribbean basin.

Commercial segment

The company utilizes dealer distribution in markets where a local, experienced dealer is available to sell and service its vehicles. In addition to its dealer network, the company also utilizes direct national accounts, such as transit agencies, school transportation contractors and rental car companies. The Capacity brand utilizes a combination of a direct sales force, international agents and dealers to market its products worldwide. Capacity also utilizes a network of dealers in the United States and Canada.

The LayMor brand is principally marketed in both commercial and rental markets through the manufacturer's representatives and distributors who are supported by the company's internal sales efforts with key customers, such as national equipment rental companies and government agencies. Its direct sales personnel work directly with national customers to ensure that LayMor equipment meets customers' specifications and is qualified for sale throughout their national network.

Recreation segment

The company sells its RV products through a national independent dealer network with internal sales personnel responsible for direct engagement with these dealers.

Suppliers and Materials

In 2023, the company purchases chassis, direct materials and other components from outside suppliers. The largest component of these purchases was for vehicle chassis, representing approximately 28% of the total purchase amount. These chassis are sourced from major automotive manufacturers, including Ford, Freightliner, General Motors, Mercedes, and other original equipment manufacturers (OEMs).

Intellectual Property

The company owns a portfolio of intellectual property, including approximately 54 patents, 7 pending patent applications, confidential technical information, and technological expertise in manufacturing specialty vehicles. It also owns approximately 187 registered trademarks in the United States for certain trade names and important products. The company's recognized proprietary trade names include E-ONE, KME, Ferrara, Spartan, Smeal, Ladder Tower Company, Wheeled Coach, American Emergency Vehicles (AEV), Horton Emergency Vehicles (Horton), Leader Emergency Vehicles (Leader), Collins, Magellan ENC, Capacity, LayMor, Fleetwood RV, Monaco, American Coach, Holiday Rambler, Renegade, Midwest, and Lance.

Research and Development

For the year ended October 31, 2023, the company's research and development expenses included $4.7 million.

Competition

In the Fire & Emergency segment, the company's competition includes Pierce Manufacturing (Oshkosh Corp.), Rosenbauer International, Demers Braun Crestline, FWD Seagrave and Life Line Emergency Vehicles, among others. In the Commercial segment, the company's competition includes New Flyer Industries, Inc.; Thomas Bus (Daimler); Blue Bird Corporation; Gillig, IIC Bus (TRATON); TICO; and Kalmar (Cargotec), among others. In the Recreation segment, the company's competition includes Thor Industries, Inc.; Winnebago Industries, Inc.; and Forest River; among others.

History

REV Group, Inc. was incorporated in 2008. The company was formerly known as Allied Specialty Vehicles, Inc. and changed its name to REV Group, Inc. in 2015.