REV Group, Inc.

Greetings, and welcome to the REV Group fourth quarter and full year fiscal 2025 earnings conference call. At this time, all participants are in a listen-only mode. A brief 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. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Drew Conop, Vice President, Investor Relations. Thank you, sir. You may begin.

Good morning. Earlier today, we issued our fourth quarter and full year fiscal 2025 results. A copy of the release is available on our website at investors.revgroup.com. Today's call is being web... A webcast and a slide presentation including reconciliations of non-GAAP to GAAP financial measures is available on the investor section of our website. Please refer now to slide two of that presentation. Our remarks and answers may 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've described in our form 8K filed with the SEC earlier today and other filings 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 conference call, if at all. All references on this call to a quarter or year are to our fiscal quarter or fiscal year unless otherwise stated. Please note that due to the pending transaction with Terex, we will not be providing guidance for fiscal year 2026 and we are limited in what we can say beyond our scripted comments and what we have previously disclosed. Joining me on the call today is our president and CEO, Mark Skonechny, as well as our CFO, Amy Campbell. Please turn to slide three, and I'll turn the call over to Mark.

Thank you, Drew, and good morning to everyone joining us on today's call. Today, I will discuss select accomplishments as we exited the year, as well as our fiscal 2025 consolidated results and then move on to our consolidated fourth quarter financial performance. I will then turn it over to Amy to discuss our detailed segment financials. Before discussing our results, I would like to begin on slide three by providing an update on the strategic merger with Terex Corporation that was announced on October 30th. The preliminary S4 for the merger was filed with the SEC earlier this week, and the deal remains on track to close in the first half of calendar 2026. We are excited to be joining forces with Terex and to be embarking on the next chapter of our organizational transformation, creating an even stronger company with new opportunities to leverage our combined scale and operating systems to drive additional growth through product innovation and even greater efficiency. Before finalizing the agreement, we took a hands-on approach to diligence. Simon Meester, Terex's CEO and I, along with our respective operations leadership, spent meaningful time together visiting each other's facilities as we wanted to see operations firsthand and understand the day-to-day execution that drives each organization's success. Those visits confirmed the strength of both businesses and importantly revealed complementary capabilities and cultures that create real opportunities for value creation and product development over the long term. Across the networks, we identified clear areas where each company brings strengths that can be shared to enhance the combined enterprise. These include advancements in product and process simplification, greater use of automation capabilities to improve efficiency and consistency, and the potential to leverage the success of our centralized supply chain management team. Together, these opportunities will position the combined company to operate with greater speed consistency, and scale while maintaining the operational excellence and customer focus that define both organizations. As we move into the integration planning phase, we're applying that same level of diligence and collaboration to how we will structure the combined company. Our teams are actively creating detailed plans to capture operational synergies, align processes, and optimize organizational design. We're taking a best athlete approach across corporate functions by conducting ongoing interviews and evaluations to ensure we place the strongest talent from both organizations in the right roles. This thoughtful, deliberate process will help us build a unified team that's equipped to execute on a shared vision and deliver long-term value for our customers and shareholders with minimal execution risk. Furthermore, Because the segment management teams that have been responsible for driving the operational change and delivering the financial performance we are highlighting today will remain intact, they can continue to focus on building on the momentum demonstrated by our 2025 results. With a transaction that is essentially lift and shift, creating a new segment within Terex, we will be able to preserve REV's core strengths while integrating our systems, processes, and governance in a controlled and deliberate way. By combining careful planning with the operational diligence already completed, we can accelerate value creation from day one while maintaining stability for employees, customers, and other stakeholders. We view the merger of REV Group and Terex as a unique opportunity that will create meaningful value for our shareholders in the years ahead. Moving on to operational highlights, Throughout the year, we continue to make meaningful progress on increased throughput and shipments across our specialty vehicle operations. Our teams have continued to refine workflow sequencing, eliminating bottlenecks, and implementing lean practices that improve line efficiency and scheduling discipline. Though there is still work ahead, these operational improvements combined with better labor planning and stronger supplier coordination have allowed us to build buffer stocks of key sub-assemblies within the specialty vehicle segment that are needed to reduce production line gaps, lower cycle times, and delivery units at a faster, more consistent pace. Within recreational vehicles, disciplined cost management has limited the impacts of increased retail assistance and tariffs during a period of relatively flat retail sales and cautious dealer activity. Over the course of the year, we also saw tangible benefits from cross-functional initiatives focused on parts availability and quality. By improving visibility across our supply chain and aligning component deliveries more closely with production schedules, we reduced consolidated operating inventory by 58 million and increased daily output rates in the specialty vehicle segment. The gains in execution efficiency are translating directly into stronger performance on the floor, improved delivery times for our customers, and strong cash conversion. On the profitability side, higher production levels and rigorous cost controls have driven a clear step change in our consolidated financial performance. We delivered expanded adjusted EBITDA margins supported by higher throughput, greater operating leverage, and focused financial discipline. Importantly, Our supply chain teams have demonstrated outstanding execution in the face of a dynamic tariff environment, successfully mitigating cost pressures through proactive sourcing strategies and supplier diversification. The combination of these efforts resulted in fiscal fourth quarter consolidated adjusted EBITDA margin surpassing the low end of the fiscal 2027 target range communicated during last December's 2024 investor day. With our operations having stabilized from post pandemic disruptions and performing at a higher level, we're in a strong position to reinvest organically in the business. During the second quarter call, we announced that we are expanding our investments in our facilities to build on the momentum we've created and to further strengthen our production capabilities. These investments are focused on areas we can unlock the greatest value by enhancing efficiency, expanding capacity, and advancing the technologies and processes that will drive further sustained growth. Ultimately, these investments are about reaching industry leading performance in terms of both quality and lead time. By modernizing our facilities and deepening our operational capabilities, we're positioning the company to serve customers faster, more reliably, and with the highest product quality in the market. Our ability to make these investments is a direct result of the strong execution by our teams across the organization. Their focus on operational excellence has delivered meaningful earnings growth and improvements in working capital management with tighter inventory control, faster receivables collection, and thoughtful supplier collaboration, all contributing to our strong cash conversion and free cash flow delivered in fiscal 2025. Our high level of cash generation reflects not only the quality of our earnings, but also the rigor and accountability our teams have brought to managing every aspect of the balance sheet. I want to thank our employees for their hard work and commitment. Their efforts have been fundamental to our ability to continue delivering value to our stakeholders. In addition to reinvesting for growth, we remain firmly committed to returning cash to our shareholders. During the year, we returned approximately $121 million through a combination of share repurchases and regular cash dividends. This balanced approach of investing in the business while also returning excess capital shareholders is driving both near-term value and building an even stronger foundation for sustainable growth over time. Turning to slide four, full year 2025 consolidated net sales of $2.46 billion increased $83 million or 3.5% versus the prior year. Fiscal 2024 net sales include $164 million related to the bus manufacturing businesses that were exited within fiscal 2024. Adjusting for the exit, net sales increased $247 million or 11.1% year over year. Higher net sales were primarily driven by production ramps and efficiencies that increased shipments and price realization within the specialty vehicle segment throughout the fiscal year. Recreational vehicle segment sales were roughly flat compared to the prior year, reflecting solid performance in a challenging end market. Full-year consolidated adjusted EBITDA of $229.5 million increased 66.7 million, or 41%, year over year. Adjusting for $17.6 million of fiscal 2024 earnings related to the exited bus manufacturing businesses, adjusted EBITDA increased by 84.3 million, or 58.1%, and consolidated margin improved by 280 basis points. Programs aimed at improving operating efficiencies, focused supply chain management within a dynamic tariff environment, and price realization contributed to the consolidated margin increase versus the prior year. Please turn to page five of the slide deck as I move to review of our fourth quarter consolidated financial results. Fourth quarter sales were $664.4 million. As a reminder, the prior year's quarter included $9.8 million in net sales attributed to the bus manufacturing businesses. Excluding the impact from the exit of bus manufacturing, net sales increased $76.3 million or 13% compared to the prior year quarter. Consolidated adjusted EBITDA of 69.7 million increased 20.1 million. Excluding the impact of bus manufacturing, which was being wound down in the prior year quarter, adjusted EBITDA increased 19.8 million or 39.7%. As I mentioned earlier, fourth quarter consolidated adjusted EBITDA margin of 10.5% exceeds the low end of the 10 to 12% in our target range. provided for fiscal year 2027 at last year's investor day. We are pleased to achieve this level of performance and feel it demonstrates our current strength and supports continued advancement toward our goals. With that, please turn to slide six, and I'll turn the call over to Amy for detailed segment financials.