REV Group, Inc.

Greetings and welcome to REV Group 2020 Fiscal Fourth Quarter and Full Year Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Drew Knopf. Vice President of Investor Relations and Corporate Development. Thank you. You may begin.

Thank you, Sherry. Good morning, and thanks for joining us. This morning, we issued our fourth quarter fiscal 2020 results. A copy of the release is available on our website at investors.revgroup.com. Today's call is being webcast, and a slide presentation, which includes a reconciliation of non-GAAP to GAAP financial measures, is available on our website. Please refer now to slide two of that presentation. Our remarks and answers will include forward-looking statements which are subject to risks that could cause actual results to differ from those expressed or implied by such forward-looking statements. These risks include, among others, matters that we have described in our Form 8K filed with the SEC this morning and other filings that we make with the SEC. We disclaim any obligation to update these forward-looking statements, which may not be updated until our next quarterly earnings call, if at all. All references on this call to the quarter or a year are to our fiscal quarter or fiscal year, unless otherwise stated. Joining me on the call today are our president and CEO, Rod Rushing, as well as our CFO, Mark Skanechny. Please turn now to slide three, and I'll turn the call over to Rod.

Thank you, Drew, and good morning, everyone, and thank you for joining our call this morning. I'd like to start by welcoming everyone back from what I hope was a healthy and happy holiday season. We are pleased to report improved earnings for the fourth quarter, where we achieved the high end of our guidance that we provided in our last quarterly call. Sales of $616 million were up 6% sequentially despite some lingering in-market challenges related to COVID-19, illustrating the benefit of a diverse portfolio of businesses, as well as momentum that we're building operationally. Our fiscal fourth quarter EBITDA of $28 million grew 45%. Our EBITDA margin increased 150 basis points on a year-over-year basis, despite a 6% decline in our revenue. Our business generated 31% more EDBA this quarter than we did in the third quarter, and we were able to convert those earnings into cash, allowing us to reduce our net debt by over $40 million within the quarter. We fully participated in the increased demand for recreational vehicles and showed market share gain in three out of five product categories. While our fire and emergency margins improved throughout the year, the commercial segment was able to address an organic drop in sales of $120 million and limit our full-year decremental EBITDA margin. During the last nine months, we faced difficulties and perhaps some unprecedented external challenges while delivering three-quarters of sequential margin improvement. We still have much work remaining, and we continue to operate through the challenges with parts supply and absenteeism tied to the COVID matter, However, we believe we're in a position to continue to deliver year-over-year improvements throughout the upcoming fiscal year through our operational disciplines and capabilities that we are building. One important cornerstone that we are committed to establish at REV is to have aligned and unified leadership team that operates under the principles of timely, data-driven, fact-based decision-making with a high sense of ownership and accountability. We have spent quite a bit of time the last few months focused on leadership alignment and organizational structure. We have completed our review of the business's and we have implemented a redesign of our operating model. This was a thoughtful examination of how the business operates, where decisions are made, and how we are structured to predictably deliver results, creating value for our customers and shareholders. The result aligns leadership and management on how we are going to run this business and where accountability sits within the organization while simplifying our business and optimizing our cost structure. There are many changes that were made to this process, and I will provide a bit of insight on a few examples. We made a decision to move our center-led parts business back to the business units. There was an initial hypothesis that growth would be achieved by implementing a consolidated centralized parts business stemming from some in-market synergies. That growth did not materialize. Our businesses inherently know our customers and products and have the institutional knowledge to answer questions and deliver results to our customers more efficiently. Further, the realignment will create a $5 million annual structural cost savings. combined outcome of reducing complexity for our customers, the unrealized growth, and what ended up being creating a duplicate cost structure drove the decision to make this change. This decision was the result of a careful reexamination of how to efficiently serve our customers and simplify our operations. Conversely, there are a few aspects of our operating model where we have moved more firmly to a center-led operation and becoming an operating company. These include development of a center-led activities related to operational excellence and commercial excellence, where scaling of capabilities and processes will yield value creation for our shareholders. Many of these capabilities have been discussed by management previously, but have lacked the commitment and rigor to yield sustainable improvements that create value. We are focused on changing that and made investments in new personnel and technologies to our operating model to build the disciplines necessary to drive sustainable improvement of performance. As part of our operational excellence, we are building capabilities to improve database decision-making, simplify operations, and improve efficiencies on our balance sheet. This includes discipline review and controls of corporate costs, manufacturing overhead, labor, and direct materials. It requires increased capabilities focused on engineering, manufacturing operations, supply chain, and purchasing. To accelerate the change process and create a best-in-class operations, we have made several main event changes. There are a couple that I'd like to highlight today. First, we've expanded the role of our commercial president, Brian Prairie, to include the role of Senior Vice President of Operations. In this role, Brian leads our manufacturing execution, operational excellence, and supply chain. Brian is a master black belt in Six Sigma, a lean sensei, and has extensive background in manufacturing operations and purchasing, making him the ideal person to build out our center-led operational efforts. He is well-positioned to take on this dual role while continuing to lead our commercial segment. In addition, we have hired Rob Dyslowski, as Vice President and Chief Supply Officer. Rob joins REV Group, having recently led Honeywell's Intelligrated Global Supply Chain and was Honeywell's Corporate Chief Procurement Officer. As CPO at Honeywell, he managed an $18 billion annual spend portfolio, as well as leading 3,000 global procurement specialists. Rob has a very broad industrial background from aerospace, automotive, paint and coatings, and includes logistics. He has had executive leadership roles with XPO Logistics, Valspar, Reynolds Group, and Alcoa. He rings the REV group both the vision and the execution capabilities to build the best class global sourcing organization we're looking for and purchasing supply chain organization, combined with a sense of urgency to do this at a pace. Rob has only been in the position at REV for a few weeks, but he's taken an exhausted look at our infrastructure and has quickly identified a list of opportunities. I'm very pleased to have Rob join our team, and I look forward to the impact that he will have on our business performance. In my nine months since joining REV, there have been challenges, some that were expected and some that were unexpected. We've implemented much change during that time. We began to see sequential improvements in our results. We have much work remaining in the months ahead, but I'm encouraged by the progress to date. I look forward to sharing more about the plans and the path forward with you during our Analyst Investor Day that we're planning for April. With that, I'm now going to turn over to Mark for details on our fourth quarter segment performance. Mark?