Business Segment Information

6 Months Ended

Apr. 30, 2024

Segment Reporting [Abstract]

Business Segment Information

Note 14. Business Segment Information

During the first fiscal quarter of 2024, the Company formed the Specialty Vehicles Segment by combining the Fire & Emergency and Commercial segment businesses. Additionally, the Recreation segment was renamed Recreational Vehicles. As a result, the Company is now organized into two reportable segments, which is aligned with the chief operating decision maker's internal reporting structure and with the chief operating decision maker's process for making operating decisions, allocating capital and measuring performance. All segment information has been recast to conform to the new reportable segments. The Company’s segments are as follows:

Specialty Vehicles: This segment includes Emergency One (“E-ONE”), Kovatch Mobile Equipment (“KME”), Ferrara, Spartan Emergency Response (“Spartan ER”), American Emergency Vehicles (“AEV”), Leader Emergency Vehicles (“Leader”), Horton Emergency Vehicles (“Horton”), REV Group Orlando, ENC, Capacity and LayMor. These businesses manufacture, market and distribute commercial and custom fire and emergency vehicles primarily for fire departments, airports, other governmental units, contractors, hospitals and other care providers in the United States and other countries, municipal transit buses primarily used for public transportation, trucks used in terminal type operations, i.e., rail yards, warehouses, rail terminals and shipping terminals/ports, and industrial sweepers for both the commercial and rental markets.

Recreational Vehicles: This segment includes REV Recreation Group, Renegade, Midwest, Lance and Goldshield Fiberglass, Inc., and their respective manufacturing facilities, service and parts divisions. REV Recreation Group primarily manufactures, markets and distributes Class A RVs in both gas and diesel models, and also distributes Class B and Class C RVs. Renegade primarily manufactures, markets and distributes Class C and “Super C” RVs. Midwest manufactures, markets and distributes Class B RVs and luxury vans. Lance manufactures, markets and distributes truck campers and towable campers. Goldshield manufactures, markets and distributes fiberglass reinforced molded parts to a diverse cross section of original equipment manufacturers and other commercial and industrial customers, including various components for REV Recreation Group’s Fleetwood family of brands.

For purposes of measuring financial performance of its business segments, the Company does not allocate to individual business segments costs or items that are of a corporate nature. The caption “Corporate, Other & Elims” includes corporate expenses, results of insignificant operations, intersegment eliminations and income and expense not allocated to reportable segments.

Total assets of the business segments exclude general corporate assets, which principally consist of cash and cash equivalents, certain property, plant and equipment and certain other assets pertaining to corporate and other centralized activities.

Intersegment sales generally include amounts invoiced by a segment for work performed for another segment. Amounts are based on actual work performed and agreed-upon pricing which is intended to be reflective of the contribution made by the supplying business segment. All intersegment transactions have been eliminated in consolidation.

Selected financial information of the Company’s segments is as follows:

	Three Months Ended April 30, 2024
	Specialty Vehicles		Recreational Vehicles		Corporate, Other & Elims			Consolidated
Net sales	$	437.4	$	179.7	$	(0.2	)	$	616.9
Depreciation and amortization	$	4.4	$	1.6	$	0.5		$	6.5
Capital expenditures	$	3.8	$	0.9	$	1.2		$	5.9
Total assets	$	873.6	$	392.1	$	64.7		$	1,330.4
Adjusted EBITDA	$	33.8	$	12.1	$	(8.4	)

	Three Months Ended April 30, 2023
	Specialty Vehicles		Recreational Vehicles		Corporate, Other & Elims			Consolidated
Net sales	$	425.0	$	256.6	$	(0.4	)	$	681.2
Depreciation and amortization	$	3.9	$	2.0	$	0.6		$	6.5
Capital expenditures	$	3.6	$	2.3	$	0.9		$	6.8
Total assets	$	986.1	$	366.6	$	39.8		$	1,392.5
Adjusted EBITDA	$	20.3	$	29.1	$	(7.5	)

	Six Months Ended April 30, 2024
	Specialty Vehicles		Recreational Vehicles		Corporate, Other & Elims			Consolidated
Net sales	$	854.6	$	349.1	$	(0.8	)	$	1,202.9
Depreciation and amortization	$	8.7	$	3.2	$	1.1		$	13.0
Capital expenditures	$	7.7	$	6.5	$	2.2		$	16.4
Total assets	$	873.6	$	392.1	$	64.7		$	1,330.4
Adjusted EBITDA	$	60.0	$	23.7	$	(15.7	)

	Six Months Ended April 30, 2023
	Specialty Vehicles		Recreational Vehicles		Corporate, Other & Elims			Consolidated
Net sales	$	783.0	$	482.6	$	(0.9	)	$	1,264.7
Depreciation and amortization	$	7.7	$	4.6	$	1.1		$	13.4
Capital expenditures	$	6.6	$	3.1	$	0.9		$	10.6
Total assets	$	986.1	$	366.6	$	39.8		$	1,392.5
Adjusted EBITDA	$	25.6	$	53.4	$	(15.8	)

In considering the financial performance of the business, the chief operating decision maker analyzes the primary financial performance measure of Adjusted EBITDA. Adjusted EBITDA is defined as net income or loss for the relevant period before depreciation and amortization, interest expense, and income taxes, as adjusted for items management believes are not indicative of the Company’s ongoing operating performance. Adjusted EBITDA is not a measure defined by U.S. GAAP but is computed using amounts that are determined in accordance with U.S. GAAP. A reconciliation of this performance measure to net income is included below.

The Company believes Adjusted EBITDA is useful to investors and used by management for measuring profitability because the measure excludes the impact of certain items which management believes have less bearing on the Company’s core operating performance, and allows for a more meaningful comparison of operating fundamentals between companies within its industries by eliminating the impact of capital structure and taxation differences between the companies. Additionally, Adjusted EBITDA is used by management to measure and report the Company’s financial performance to the Company’s Board of Directors, assists in providing a meaningful analysis of the Company’s operating performance and is used as a measurement in incentive compensation for management.

Provided below is a reconciliation of segment Adjusted EBITDA to Net income:

	Three Months Ended April 30,						Six Months Ended April 30,
	2024			2023			2024			2023
Specialty Vehicles Adjusted EBITDA	$	33.8		$	20.3		$	60.0		$	25.6
Recreational Vehicles Adjusted EBITDA		12.1			29.1			23.7			53.4
Corporate and Other Adjusted EBITDA		(8.4	)		(7.5	)		(15.7	)		(15.8	)
Depreciation and amortization		(6.5	)		(6.5	)		(13.0	)		(13.4	)
Interest expense, net		(6.5	)		(7.4	)		(13.4	)		(14.5	)
Provision for income taxes		(2.7	)		(5.8	)		(64.1	)		(0.7	)
Transaction expenses		(1.4	)		(0.2	)		(6.4	)		(0.4	)
Sponsor expense reimbursement		—			—			(0.2	)		(0.2	)
Restructuring		(3.7	)		—			(4.5	)		—
Restructuring related charges		—			(3.2	)		(6.1	)		(8.8	)
Impairment charges		—			—			(12.6	)		—
Stock-based compensation expense		(3.0	)		(1.6	)		(5.9	)		(7.5	)
Legal matters		—			(1.6	)		(2.9	)		(15.4	)
Gain (Loss) on sale of business		1.5			(1.1	)		259.0			(1.1	)
Other items		—			(0.3	)		—			(0.5	)
Net income	$	15.2		$	14.2		$	197.9		$	0.7