10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 30, 2019

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-37999

REV Group, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware	26-3013415
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
111 East Kilbourn Avenue, Suite 2600 Milwaukee, WI	53202
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (414) 290-0190

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock ($0.001 Par Value)	REVG	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Small reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

As of June 4, 2019, the registrant had 62,397,398 shares of common stock, $0.001 par value per share, outstanding.

Table of Contents

		Page
Cautionary Statement About Forward-Looking Statements		3
Website and Social Media Disclosure		3
PART I.	FINANCIAL INFORMATION	4
Item 1.	Financial Statements	4
	Condensed Unaudited Consolidated Balance Sheets	4
	Condensed Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss)	5
	Condensed Unaudited Consolidated Statements of Cash Flows	6
	Condensed Unaudited Consolidated Statements of Shareholders’ Equity	7
	Notes to Condensed Unaudited Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	29
PART II.	OTHER INFORMATION	29
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 6.	Exhibits	31
Signatures		32

2

Cautionary Statement About Forward-Looking Statements

This Quarterly Report on Form 10-Q may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue,” “contemplate,” “aim” and other similar expressions, and include our segment net sales and other expectations described under “Overview” below, although not all forward-looking statements contain these identifying words. Investors are cautioned that forward-looking statements are inherently uncertain. A number of factors could cause actual results to differ materially from these statements, including, but not limited to increases in interest rates, availability of credit, low consumer confidence, availability of labor, significant increases in repurchase obligations, inadequate liquidity or capital resources, availability and price of fuel, a slowdown in the economy, increased material and component costs, availability of chassis and other key component parts, sales order cancellations, slower than anticipated sales of new or existing products, new product introductions by competitors, the effect of global tensions and integration of operations relating to mergers and acquisitions activities. Additional information concerning certain risks and uncertainties that could cause actual results to differ materially from that projected or suggested is contained in the “Risk Factors” section in our filings with the U.S. Securities and Exchange Commission (“SEC”). We disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this Form 10-Q or to reflect any changes in expectations after the date of this release or any change in events, conditions or circumstances on which any statement is based, except as required by law.

Website and Social Media Disclosure

We use our website (www.revgroup.com) and corporate Twitter account (@revgroupinc) as routine channels of distribution of company information, including news releases, analyst presentations, and supplemental financial information, as a means of disclosing material non-public information and for complying with our disclosure obligations under SEC Regulation FD. Accordingly, investors should monitor our website and our corporate Twitter account in addition to following press releases, SEC filings and public conference calls and webcasts. Additionally, we provide notifications of news or announcements as part of our investor relations website. Investors and others can receive notifications of new information posted on our investor relations website in real time by signing up for email alerts.

None of the information provided on our website, in our press releases, public conference calls and webcasts, or through social media channels is incorporated into, or deemed to be a part of, this Quarterly Report on Form 10-Q or in any other report or document we file with the SEC, and any references to our website or our social media channels are intended to be inactive textual references only.

3

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

REV Group, Inc. and Subsidiaries

Condensed Unaudited Consolidated Balance Sheets

(Dollars in millions, except share and per share amounts)

	April 30, 2019			October 31, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	6.5		$	11.9
Accounts receivable, net		281.5			266.9
Inventories, net		536.3			514.0
Other current assets		40.3			50.3
Total current assets		864.6			843.1
Property, plant and equipment, net		206.5			214.3
Goodwill		159.8			161.8
Intangibles assets, net		167.7			174.6
Other long-term assets		14.7			14.3
Total assets	$	1,413.3		$	1,408.1
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt	$	1.8		$	1.3
Accounts payable		196.5			218.1
Customer advances		123.8			117.8
Other current liabilities		78.2			80.0
Total current liabilities		400.3			417.2
Long-term debt, less current maturities		460.0			420.6
Deferred income taxes		23.2			19.9
Other long-term liabilities		13.5			18.0
Total liabilities		897.0			875.7
Commitments and contingencies
Shareholders' Equity:
Common stock ($.001 par value, 605,000,000 shares authorized; 62,397,398    and 62,683,808 shares issued and outstanding, respectively)		0.1			0.1
Additional paid-in capital		491.6			492.1
Retained earnings		25.2			40.6
Accumulated other comprehensive loss		(1.6	)		(1.4	)
Total REV's shareholders' equity		515.3			531.4
Non-controlling interest		1.0			1.0
Total shareholders' equity		516.3			532.4
Total liabilities and shareholders' equity	$	1,413.3		$	1,408.1

See Notes to Condensed Unaudited Consolidated Financial Statements.

4

REV Group, Inc. and Subsidiaries

Condensed Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss)

(Dollars in millions, except per share amounts)

	Three Months Ended April 30,						Six Months Ended April 30,
	2019			2018			2019			2018
Net sales	$	615.0		$	608.9		$	1,133.7		$	1,123.8
Cost of sales		542.6			536.0			1,015.0			998.4
Gross profit		72.4			72.9			118.7			125.4
Operating expenses:
Selling, general and administrative		48.6			48.8			96.3			89.7
Research and development costs		1.2			1.5			2.5			3.2
Amortization of intangible assets		4.6			4.3			9.3			9.1
Restructuring		1.8			1.9			2.9			6.0
Impairment charges		0.1			—			2.8			—
Total operating expenses		56.3			56.5			113.8			108.0
Operating income		16.1			16.4			4.9			17.4
Interest expense, net		8.0			6.1			15.8			11.5
Income (loss) before provision (benefit) for income taxes		8.1			10.3			(10.9	)		5.9
Provision (benefit) for income taxes		2.5			2.9			(1.9	)		(11.0	)
Net income (loss)	$	5.6		$	7.4		$	(9.0	)	$	16.9
Other comprehensive loss, net of tax		(0.2	)		(0.5	)		(0.2	)		(0.8	)
Comprehensive income (loss)	$	5.4		$	6.9		$	(9.2	)	$	16.1
Income (loss) per common share:
Basic	$	0.09		$	0.12		$	(0.14	)	$	0.26
Diluted	$	0.09		$	0.11		$	(0.14	)	$	0.25
Dividends declared per common share	$	0.05		$	0.05		$	0.10		$	0.10

See Notes to Condensed Unaudited Consolidated Financial Statements.

5

REV Group, Inc. and Subsidiaries

Condensed Unaudited Consolidated Statements of Cash Flows

(Dollars in millions)

	Six Months Ended April 30,
	2019			2018
Cash flows from operating activities:
Net (loss) income	$	(9.0	)	$	16.9
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation and amortization		23.8			22.1
Amortization of debt issuance costs		1.0			0.9
Stock-based compensation expense		4.8			3.7
Deferred income taxes		3.3			(10.4	)
Gain on disposal of property, plant and equipment		(1.4	)		(2.0	)
Impairment charges		2.8			—
Changes in operating assets and liabilities, net of effects of business acquisitions		(64.5	)		(75.0	)
Net cash used in operating activities		(39.2	)		(43.8	)
Cash flows from investing activities:
Purchase of property, plant and equipment		(9.4	)		(23.6	)
Purchase of rental fleet vehicles		(3.0	)		(14.2	)
Proceeds from sale of property, plant and equipment		17.1			5.8
Acquisition of businesses, net of cash acquired		—			(57.2	)
Net cash provided by (used in) investing activities		4.7			(89.2	)
Cash flows from financing activities:
Net (repayments) proceeds from borrowings under revolving credit facility		(9.0	)		139.6
Net proceeds from borrowings of Term Loan		49.2			—
Payment of dividends		(6.3	)		(6.4	)
Repurchase and retirement of common stock		(5.3	)		(4.8	)
Other financing activities		0.5			—
Net cash provided by financing activities		29.1			128.4
Net decrease in cash and cash equivalents		(5.4	)		(4.6	)
Cash and cash equivalents, beginning of period		11.9			17.8
Cash and cash equivalents, end of period	$	6.5		$	13.2

Supplemental disclosures of cash flow information:
Cash paid (received) for:
Interest	$	15.6		$	10.3
Income taxes, net of refunds	$	(8.0	)	$	14.9

See Notes to Condensed Unaudited Consolidated Financial Statements.

6

REV Group, Inc. and Subsidiaries

Condensed Unaudited Consolidated Statements of Shareholders’ Equity

(Dollars in millions, except share amounts)

	Common Stock					Additional Paid-in			Retained			Accumulated Other Comprehensive			Total Shareholders'
	Amount		# Shares			Capital			Earnings			Loss			Equity
Balance, October 31, 2017	$	0.1		64,145,945 Sh.		$	532.0		$	40.4		$	—		$	572.5
Net income										9.4						9.4
Other comprehensive loss, net of tax													(0.3	)		(0.3	)
Stock-based compensation expense							0.5									0.5
Exercise of common stock options		—		418,116 Sh.			2.8									2.8
Vesting of restricted stock, net of employee tax withholding		—		9,688 Sh.			(0.1	)								(0.1	)
Dividends declared on common stock										(3.2	)					(3.2	)
Balance, January 31, 2018	$	0.1		64,573,749 Sh.		$	535.2		$	46.6		$	(0.3	)	$	581.6
Net income										7.4						7.4
Other comprehensive loss, net of tax													(0.5	)		(0.5	)
Stock-based compensation expense							1.0									1.0
Vesting of restricted stock, net of employee tax withholding		—		3,543 Sh.												—
Dividends declared on common stock										(3.3	)					(3.3	)
Repurchase and retirement of common stock				(238,547 Sh.	)		(4.8	)								(4.8	)
Balance, April 30, 2018	$	0.1		64,338,745 Sh.		$	531.4		$	50.7		$	(0.8	)	$	581.4
	Common Stock					Additional Paid-in			Retained			Accumulated Other Comprehensive			Total Shareholders'
	Amount		# Shares			Capital			Earnings			Loss			Equity
Balance, October 31, 2018	$	0.1		62,683,808 Sh.		$	492.1		$	40.6		$	(1.4	)	$	531.4
Net loss										(14.6	)					(14.6	)
Other comprehensive income (loss), net of tax													—			—
Stock-based compensation expense							1.4									1.4
Exercise of common stock options		—		20,000 Sh.			0.1									0.1
Vesting of restricted and performance stock, net of shares withheld for employee taxes		—		94,237 Sh.			—									—
Dividends declared on common stock										(3.2	)					(3.2	)
Balance, January 31, 2019	$	0.1		62,798,045 Sh.		$	493.6		$	22.8		$	(1.4	)	$	515.1
Net income										5.6						5.6
Other comprehensive loss, net of tax													(0.2	)		(0.2	)
Stock-based compensation expense							2.9									2.9
Exercise of common stock options		—		54,000 Sh.			0.4									0.4
Vesting of restricted and performance stock, net of shares withheld for employee taxes		—		40,828 Sh.			—									—
Dividends declared on common stock										(3.2	)					(3.2	)
Repurchase and retirement of common stock				(495,475 Sh.	)		(5.3	)								(5.3	)
Balance, April 30, 2019	$	0.1		62,397,398 Sh.		$	491.6		$	25.2		$	(1.6	)	$	515.3

See Notes to Condensed Unaudited Consolidated Financial Statements.

7

REV Group, Inc. and Subsidiaries

Notes to the Condensed Unaudited Consolidated Financial Statements

(All tabular amounts presented in millions, except share and per share amounts)

Note 1. Basis of Presentation

The Condensed Consolidated Financial Statements include the accounts of REV Group, Inc. (“REV” or “the Company”) and all its subsidiaries. In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements contain all adjustments (which include normal recurring adjustments, unless otherwise noted) necessary to present fairly the financial position, results of operations and cash flows for the periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP) have been condensed or omitted pursuant to the rules and regulations of the U.S. Securities and Exchange Commission. These Condensed Consolidated Financial Statements should be read in conjunction with the audited financial statements and notes thereto included in the Annual Report on Form 10-K of the Company for the year ended October 31, 2018. The interim results are not necessarily indicative of results for the full year. Certain reclassifications have been made to the fiscal 2018 financial statements to conform to the fiscal 2019 presentation.

Equity Sponsor: The Company’s primary equity holders are funds and an investment vehicle associated with AIP CF IV, LLC, which the Company collectively refers to as “American Industrial Partners,” “AIP” or “Sponsor” and which indirectly own approximately 53.8% of REV Group’s voting equity as of April 30, 2019. AIP is an operations and engineering-focused private equity firm headquartered in New York, New York.

Related Party Transactions: During the three months ended April 30, 2019 and April 30, 2018, the Company reimbursed expenses of its primary equity holder in the amount of $0.1 million and $0.1 million, respectively. During the six months ended April 30, 2019 and April 30, 2018, the Company reimbursed expenses of its primary equity holder in the amount of $0.6 million and $0.3 million, respectively. These expenses are included in selling, general and administrative expenses in the Company’s consolidated statements of operations.

Certain production facilities and offices for two of the Company’s subsidiaries are leased from related parties owned by certain members of management. Rent expense under these arrangements totaled $0.5 million and $0.4 million for the three months ended April 30, 2019, and April 30, 2018, respectively. Rent expense under these arrangements totaled $1.0 million and $0.6 million for the six months ended April 30, 2019 and April 30, 2018, respectively.

Recent Accounting Pronouncements

Accounting Pronouncements Recently Adopted

The following accounting pronouncements did not have a material impact on the Company’s consolidated financial statements:

• ASU 2018-02, “Income Statement—Reporting Comprehensive Income (Topic 220)” (“ASU 2018-02”)

• In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”) which outlines a single comprehensive model for entities to use in accounting for revenue from contracts with customers. The standard superseded most current revenue recognition guidance.

The Company adopted the new guidance on November 1, 2018 and applied the standard to all of its contracts using the modified retrospective approach. Under this method, the Company must recognize the cumulative effect of the changes in retained earnings on the date of adoption. The Company has determined the adoption of ASU 2014-09 did not have a material impact on its financial statements at the date of adoption. Accordingly, no cumulative effect adjustment to retained earnings was required and there are no other financial statement line items that were impacted by the adoption.

8

Accounting Pronouncements to be Adopted

• In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, “Leases” (Topic 842). Topic 842 is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-02 is effective for the Company beginning November 1, 2019.

The Company has established an implementation plan and is in the process of surveying its businesses, assessing its lease population, and compiling information on its active leases. In addition, the Company is determining needed changes to its policies, business processes, internal controls, and disclosures. While the Company continues to make progress on its implementation, the Company is still evaluating the impact of the adoption on its consolidated financial statements.

Note 2. Revenue Recognition

Substantially all of the Company’s revenue is recognized from contracts with customers with product shipment destinations in the United States and Canada. The Company accounts for a contract when it has approval and commitment from both parties, the rights and payment terms of the parties are identified, the contract has commercial substance and collectability of consideration is probable. The Company determines the transaction price for each contract at inception based on the consideration that it expects to receive for the goods and services promised under the contract. The Company made an accounting policy election so that the transaction price excludes sales and usage-based taxes collected.

The Company’s primary source of revenue is generated from the manufacture and sale of specialty vehicles through its direct sales force or dealer network. The Company also generates revenue through separate contracts that relate to the sale of aftermarket parts and services. Revenue is typically recognized at a point-in-time, when control is transferred, which generally occurs when the product has been shipped to the customer or when it has been picked-up from the Company’s manufacturing facilities. The Company has made an accounting policy election to account for any shipping and handling costs that occur after the transfer of control as a fulfillment cost that is accrued when control is transferred. Periodically, certain customers request bill and hold transactions. In such cases, revenue is not recognized until after control has transferred which is generally when the customer has requested such transaction and has been notified that the product (i) has been completed according to customer specifications, (ii) has passed our quality control inspections, and (iii) has been separated from our inventory and is ready for physical transfer to the customer. Warranty obligations associated with the sale of a unit are assurance-type warranties that are a guarantee of the unit’s intended functionality and, therefore, do not represent a distinct performance obligation within the context of the contract. The Company does not disclose information about remaining performance obligations at period end because the Company’s contracts generally have original expected durations of one year or less.

Contract Assets and Contract Liabilities

The Company is generally entitled to bill its customers upon satisfaction of its performance obligations, and payment is usually received shortly after billing. Payments for certain contracts are received in advance of satisfying the related performance obligations. Such payments are recorded as customer advances in the Company’s consolidated balance sheet. The corresponding performance obligations are generally satisfied within one year of the contract inception. The Company recognized $30.4 million and $74.0 million of revenue that was included in the opening customer advances balance during the three and six months ended April 30, 2019, respectively. The Company’s payment terms do not include a significant financing component and the Company does not have significant contract assets.

Note 3. Inventories

Inventories, net of reserves, consisted of the following:

	April 30, 2019			October 31, 2018
Chassis	$	46.9		$	53.3
Raw materials		205.4			188.4
Work in process		201.5			195.7
Finished products		94.3			91.6
		548.1			529.0
Less: reserves		(11.8	)		(15.0	)
Total inventories, net	$	536.3		$	514.0

9

Note 4. Property, Plant and Equipment

Property, plant and equipment consisted of the following:

	April 30, 2019			October 31, 2018
Land & land improvements	$	23.9		$	23.9
Buildings & improvements		103.8			102.5
Machinery & equipment		82.6			77.1
Rental fleet		31.4			35.4
Computer hardware & software		56.6			56.1
Office furniture & fixtures		4.8			5.1
Construction in process		16.5			14.7
		319.6			314.8
Less: accumulated depreciation		(113.1	)		(100.5	)
Total property, plant and equipment, net	$	206.5		$	214.3

Depreciation expense was $7.0 million and $6.8 million for the three months ended April 30, 2019, and April 30, 2018, respectively, and $14.5 million and $13.0 million for the six months ended April 30, 2019, and April 30, 2018, respectively.

Note 5. Goodwill and Intangible Assets

The table below represents goodwill by segment:

	April 30, 2019		October 31, 2018
Fire & Emergency	$	88.6	$	88.6
Commercial		28.7		28.7
Recreation		42.5		44.5
Total goodwill	$	159.8	$	161.8

The change in the net carrying value amount of goodwill consisted of the following:

	Six Months Ended April 30,
	2019			2018
Balance at beginning of period	$	161.8		$	133.2
Activity during the period:
Activity from prior year acquisitions		(2.0	)		2.4
Activity from current year acquisitions		—			51.4
Balance at end of period	$	159.8		$	187.0

Intangible assets (excluding goodwill) consisted of the following:

	Weighted- Average Life		April 30, 2019			October 31, 2018
Finite-lived intangible assets:
Customer relationships		8.0	$	126.7		$	124.7
Order backlog		1.0		6.7			6.7
Non-compete agreements		5.0		2.0			2.0
Trade names		7.0		3.5			3.5
Technology-related		7.0		0.7			0.7
				139.6			137.6
Less: accumulated amortization				(87.8	)		(78.9	)
				51.8			58.7
Indefinite-lived trade names				115.9			115.9
Total intangible assets, net			$	167.7		$	174.6

10

Amortization expense was $4.6 million and $4.3 million for the three months ended April 30, 2019, and April 30, 2018, respectively, and $9.3 and $9.1 million for the six months ended April 30, 2019, and April 30, 2018, respectively.

Note 6. Divestiture Activities

In fiscal year 2018, management decided to divest certain businesses and assets which include the Revability business, one Regional Technical Center (“RTC”), the Company’s rental fleet, and certain other assets. On December 21, 2018, the Company completed the sale of its mobility van business, Revability, with annual sales of approximately $40 million. All assets and operations at the Clarkston and Davisburg, Michigan facilities were transferred to the buyer. On February 21, 2019, the Company completed the sale of the RTC for net cash proceeds of $11.4 million. In connection with this sale, the Company recognized a gain on sale of $1.2 million.

The assets and liabilities related to the businesses that met the held for sale criteria are included in Other current assets and Other current liabilities in the Condensed Unaudited Consolidated Balance Sheets at estimated fair value, less cost to sell.

As of April 30, 2019, assets and liabilities held for sale were comprised of the following: property, plant and equipment, net—$1.4 million, inventories, net—$3.0 million, accounts receivable, net—$6.4 million, other current and long-term assets—$1.2 million, accounts payable—$4.7 million, current portion of long-term debt—$1.4 million and other current and long-term liabilities—$0.6 million.

Note 7. Long-Term Debt

The Company was obligated under the following debt instruments:

	April 30, 2019			October 31, 2018
Senior secured facility:
Revolving credit ABL facility	$	291.0		$	300.0
Term Loan, net of debt issuance costs ($2.3 and $1.9)		170.8			121.9
		461.8			421.9
Less: current maturities		(1.8	)		(1.3	)
Long-term debt, less current maturities	$	460.0		$	420.6

April 2017 ABL Facility

Effective April 25, 2017, the Company entered into a $350.0 million revolving credit and guaranty agreement (the “April 2017 ABL Facility” or “ABL Agreement”) with a syndicate of lenders. The April 2017 ABL Facility consists of: (i) Revolving Loans, (ii) Swing Line Loans, and (iii) Letters of Credit, aggregating up to a combined maximum of $350.0 million. The total amount borrowed under the April 2017 ABL Facility is subject to a $30.0 million sublimit for Swing Line loans and a $35.0 million sublimit for Letters of Credit, along with certain borrowing base and other customary restrictions as defined in the ABL Agreement. The Company incurred $4.9 million of debt issuance costs related to the April 2017 ABL Facility. The amount of debt issuance costs is included in other long-term assets in the Company’s consolidated balance sheets.

The April 2017 ABL Facility allows for incremental borrowing capacity in an aggregate amount of up to $100.0 million, plus the excess, if any, of the borrowing base then in effect over total commitments then in effect. Any such incremental borrowing capacity is subject to receiving additional commitments from lenders and certain other customary conditions. The April 2017 ABL Facility matures on April 25, 2022. The Company may prepay principal, in whole or in part, at any time without penalty.

On December 22, 2017 the Company exercised a $100.0 million incremental borrowing capacity option under the April 2017 ABL Facility, which increased total borrowing capacity under the facility from $350.0 million to $450.0 million. The Company incurred an additional $0.4 million of debt issuance costs related to the incremental borrowing capacity option under the April 2017 ABL Facility.

Revolving Loans under the April 2017 ABL Facility bear interest at rates equal to, at the Company’s option, either a base rate plus an applicable margin, or a Eurodollar rate plus an applicable margin. Applicable interest rate margins are initially 0.75% for all base rate loans and 1.75% for all Eurodollar rate loans (with the Eurodollar rate having a floor of 0%), subject to adjustment based on utilization in accordance with the ABL Agreement. Interest is payable quarterly for all base rate loans and is payable monthly or quarterly for all Eurodollar rate loans.

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The lenders under the April 2017 ABL Facility have a first priority security interest in substantially all accounts receivable and inventory of the Company, and a second priority security interest in substantially all other assets of the Company.

The April 2017 ABL Facility contains customary representations and warranties, affirmative and negative covenants, subject in certain cases to customary limitations, exceptions and exclusions. The April 2017 ABL Facility also contains certain customary events of default, which should such events occur, could result in the termination of the commitments under the April 2017 ABL Facility and the acceleration of all outstanding borrowings under it. The April 2017 ABL Facility contains a financial covenant restricting the Company from allowing its fixed charge coverage ratio to drop below 1.00 to 1.00 during a compliance period, which is triggered when the availability under the April 2017 ABL Facility falls below a threshold set forth in the credit agreement.

The Company was in compliance with all financial covenants under the April 2017 ABL Facility as of April 30, 2019. As of April 30, 2019, the Company’s availability under the April 2017 ABL Facility was $145.2 million.

The fair value of the April 2017 ABL Facility approximated book value at both April 30, 2019 and October 31, 2018.

Term Loan

Effective April 25, 2017, the Company entered into a $75.0 million term loan agreement (“Term Loan” and “Term Loan Agreement”), as Borrower with certain subsidiaries of the Company, acting as guarantors of debt. Principal may be prepaid at any time during the term of the Term Loan without penalty. The Company incurred $2.0 million of debt issuance costs related to the Term Loan.

The Term Loan Agreement allows for incremental facilities in an aggregate amount of up to $125.0 million. Any such incremental facilities are subject to receiving additional commitments from lenders and certain other customary conditions. The Term Loan agreement requires quarterly payments of 0.25% of the original principal balance, with remaining principal payable at maturity, April 25, 2022.

On July 18, 2018, the Company exercised a $50.0 million incremental commitment option under the Term Loan Agreement, which increased total borrowing under the facility from $75.0 million to $125.0 million. The Company incurred an additional $0.6 million of debt issuance costs related to the incremental commitment option under the Term Loan. Proceeds from the incremental commitment were used to repay a portion of the outstanding borrowings under the April 2017 ABL Facility.

On March 29, 2019, the Company exercised a $50.0 million incremental commitment option under the Term Loan Agreement, which increased total borrowing under the facility from $125.0 million to $175.0 million. The Company incurred an additional $0.8 million of debt issuance costs related to the incremental commitment option under the Term Loan. Proceeds from the incremental commitment were used to repay a portion of the outstanding borrowings under the April 2017 ABL Facility.

Applicable interest rate margins for the Term Loan are 2.50% for base rate loans and 3.50% for Eurodollar rate loans (with the Eurodollar rate having a floor of 1.00%). Interest is payable quarterly for all base rate loans and is payable monthly or quarterly for all Eurodollar rate loans. The weighted-average interest rate on borrowings outstanding under the Term Loan at April 30, 2019 was 5.98%.

The Term Loan Agreement contains customary representations and warranties, affirmative and negative covenants, in each case, subject to customary limitations, exceptions and exclusions. The Term Loan Agreement also contains certain customary events of default. The Term Loan Agreement requires the Company to maintain a specified secured leverage ratio, which will be tested quarterly and become more restrictive over the term of the term loan. Annually, in the third quarter of each fiscal year, the ratio declines by 25 basis points. The initial maximum secured leverage ratio is 4.00 to 1.00 and declines to 3.00 to 1.00 by July 31, 2021. The maximum leverage ratio for April 30, 2019 is 3.75 to 1.00.

The Company was in compliance with all financial covenants under the Term Loan as of April 30, 2019.

The fair value of the Term Loan approximated book value at both April 30, 2019 and October 31, 2018.

Note 8. Warranties

The Company’s products generally carry explicit warranties that extend from several months to several years, based on terms that are generally accepted in the marketplace. Selected components (such as engines, transmissions, tires, etc.) included in the Company’s end products may include warranties from original equipment manufacturers (“OEM”). These OEM warranties are passed on to the end customer of the Company’s products, and the customer deals directly with the applicable OEM for any issues encountered on those components.

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Changes in the Company’s warranty liability consisted of the following:

	Six Months Ended April 30,
	2019			2018
Balance at beginning of period	$	30.8		$	40.2
Warranty provisions		9.2			14.0
Settlements made		(14.9	)		(17.5	)
Warranties for current year acquisitions		—			1.4
Changes in liability of pre-existing warranties		(0.6	)		(1.3	)
Balance at end of period	$	24.5		$	36.8

Accrued warranty is classified in the Company’s consolidated balance sheets as follows:

	April 30, 2019		October 31, 2018
Current liabilities	$	15.2	$	19.0
Other long-term liabilities		9.3		11.8
Total warranty liability	$	24.5	$	30.8

Note 9. Stock Repurchase Program

As discussed in the Company’s Annual Report on Form 10-K filed on December 19, 2018, on March 20, 2018 the Company’s Board of Directors authorized up to $50.0 million of repurchases of the Company’s issued and outstanding common stock with an expiration date of March 19, 2020. On September 5, 2018 the Company’s Board of Directors authorized an additional $50.0 million of repurchases of the Company’s issued and outstanding common stock with an expiration date of September 4, 2020. During the three and six months ended April 30, 2019, the Company repurchased 495,475 shares under this repurchase program at a total cost of $5.3 million at an average price per share of $10.77. As of April 30, 2019, the Company had $41.3 million of authorization remaining under this program.

Note 10. Earnings Per Share

Basic earnings per common share (“EPS”) is computed by dividing net (loss) income by the weighted average number of common shares outstanding. Diluted EPS is computed by dividing net (loss) income by the weighted-average number of common shares outstanding assuming dilution. The difference between basic EPS and diluted EPS is the result of the dilutive effect of outstanding stock options, performance stock units and restricted stock units. The table below reconciles basic weighted-average common shares outstanding to diluted weighted-average shares outstanding for the three and six months ended April 30, 2019 and April 30, 2018:

	Three Months Ended April 30,				Six Months Ended April 30,
	2019		2018		2019		2018
Basic weighted-average common shares outstanding		62,957,854		64,577,469		62,994,738		64,429,854
Dilutive stock options		169,913		1,689,419		—		1,944,297
Dilutive restricted stock units		219,847		706		—		14,616
Dilutive performance stock units		—		—		—		—
Diluted weighted-average common shares outstanding		63,347,614		66,267,594		62,994,738		66,388,767

The table below represents exclusions from the calculation of weighted-average shares outstanding assuming dilution due to the anti-dilutive effect of the common stock equivalents for the three and six months ended April 30, 2019 and April 30, 2018: 

	Three Months Ended April 30,				Six Months Ended April 30,
	2019		2018		2019		2018
Anti-dilutive stock options		172,951		77,085		988,551		77,085
Anti-dilutive restricted stock units		497,925		503,412		1,750,723		376,239
Anti-dilutive performance stock units		18,408		—		18,408		—
Anti-dilutive common stock equivalents		689,284		580,497		2,757,682		453,324

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Note 11. Income Taxes

For interim financial reporting, the Company estimates its annual effective tax rate based on the projected income for its entire fiscal year and records a provision (benefit) for income taxes on a quarterly basis based on the estimated annual effective income tax rate, adjusted for any discrete tax items.

The Company recorded income tax expense of $2.5 million for the three months ended April 30, 2019, or 30.8% of pre-tax income, compared to income tax expense of $2.9 million, or 27.9% of pre-tax income, for the three months ended April 30, 2018. Results for the three months ended April 30, 2019 were unfavorably impacted by $0.4 million of net discrete expense primarily related to share-based compensation tax deductions. Results for the three months ended April 30, 2018 were unfavorably impacted by $0.1 million of net discrete tax expense primarily as a result of new tax legislation in the United States.

The Company recorded income tax benefit of $1.9 million for the six months ended April 30, 2019, or 17.8% of pre-tax loss, compared to income tax benefit of $11.0 million, or (185.8)% of pre-tax income, for the six months ended April 30, 2018. Results for the six months ended April 30, 2019 were unfavorably impacted by $0.8 million of net discrete expense primarily related to share-based compensation tax deductions. Results for the six months ended April 30, 2018 were favorably impacted by $12.6 million of net discrete tax benefits, including a $2.3 million benefit related to share-based compensation tax deductions and a $10.4 million benefit related to the remeasurement of net deferred tax liabilities as a result of new tax legislation in the United States.

On December 22, 2017, the Tax Reform Act was signed into law by President Trump. The Tax Reform Act significantly revised the U.S. corporate income tax regime by, among other things, lowering the U.S. corporate tax rate from 35% to 21% effective January 1, 2018, while also repealing the deduction for domestic production activities, limiting interest expense deductions, implementing a territorial tax system, imposing a repatriation tax on deemed repatriated earnings of foreign subsidiaries (the “Transition Tax”), and creating new taxes on certain foreign-sourced earnings. U.S. GAAP requires that the impact of tax legislation be recognized in the period in which the law was enacted. The U.S. Securities and Exchange Commission issued Staff Accounting Bulletin (SAB) No. 118, which provided guidance on how to account for the effects of the Tax Reform Act under ASC 740, Income Taxes. SAB No. 118 enabled companies to record a provisional amount for the effects for the Tax Reform Act based on a reasonable estimate, subject to adjustment during a measurement period of up to one year.

In the first quarter of fiscal year 2019, the Company completed its accounting for the Tax Reform Act under SAB No. 118 resulting in no change to the estimated cumulative tax benefit recorded in fiscal year 2018. In full fiscal year 2018, the Company recorded $11.3 million of cumulative tax benefit related to remeasurement of net deferred tax liabilities.

The Company periodically evaluates its valuation allowance requirements in light of changing facts and circumstances and may adjust its deferred tax asset valuation allowances accordingly. It is reasonably possible that the Company will either add to or reverse a portion of its existing deferred tax asset valuation allowances in the future. Such changes in the deferred tax asset valuation allowances will be reflected in the current operations through the Company’s effective income tax rate. During the three and six months ended April 30, 2019, there were no changes to the Company’s valuation allowances.

The Company’s liability for unrecognized tax benefits, including interest and penalties, was $2.4 million as of April 30, 2019 and $2.2 million as of October 31, 2018. The unrecognized tax benefits are presented in other long-term liabilities in the Company’s consolidated balance sheets. During the next twelve months, it is reasonably possible that $0.2 million of the unrecognized tax benefits, if recognized, would affect the annual effective income tax rate. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes in its consolidated statement of operations.

The Company regularly assesses the likelihood of an adverse outcome resulting from examinations to determine the adequacy of its tax reserves. As of April 30, 2019, the Company believes that it is more likely than not that the tax positions it has taken will be sustained upon the resolution of its audits resulting in no material impact on its consolidated financial position and the results of operations and cash flows. However, the final determination with respect to any tax audits, and any related litigation, could be materially different from the Company’s estimates and/or from its historical income tax provisions and income tax liabilities and could have a material effect on operating results and/or cash flows in the periods for which that determination is made. In addition, future period earnings may be adversely impacted by litigation costs, settlements, penalties, and/or interest assessments related to income tax examinations.

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Note 12. Commitments and Contingencies

Personal Injury Actions and Other: Product and general liability claims arise against the Company from time to time in the ordinary course of business. These claims are generally covered by third-party insurance. There is inherent uncertainty as to the eventual resolution of unsettled claims. Management, however, believes that any losses will not have a material adverse effect on the Company’s consolidated financial condition, results of operations or cash flows.

Market Risks: The Company is contingently liable under bid, performance and specialty bonds and has open standby letters of credit issued by the Company’s banks in favor of third parties as follows:

	April 30, 2019		October 31, 2018
Performance, bid and specialty bonds	$	212.8	$	228.2
Open standby letters of credit		13.8		13.0
Total	$	226.6	$	241.2

Chassis Contingent Liabilities: The Company obtains certain vehicle chassis from automobile manufacturers under converter pool agreements. These agreements generally provide that the manufacturer will supply chassis at the Company’s various production facilities under the terms and conditions set forth in the agreement. The manufacturer does not transfer the certificate of origin to the Company and, accordingly, the chassis are treated as consigned inventory of the automobile manufacturer. Upon being put into production, the Company becomes obligated to pay the manufacturer for the chassis. Chassis are typically converted and delivered to customers within 90 to 120 days of receipt. If the chassis are not converted within this timeframe of delivery, the Company generally purchases the chassis and records inventory, or the Company is obligated to begin paying an interest charge on this inventory until purchased. Such agreements are customary in the industries in which the Company operates and the Company’s exposure to loss under such agreements is limited by the value of the vehicles that would be repossessed and resold to mitigate any losses. The Company’s contingent liability under such agreements was $55.0 million and $54.5 million as of April 30, 2019 and October 31, 2018, respectively.

Repurchase Commitments: The Company has entered into repurchase agreements with certain lending institutions. The repurchase commitments are on an individual unit basis with a term from the date it is financed by the lending institution through payment date by the dealer or other customer, generally not exceeding two years. The Company’s outstanding obligations under such agreements were $258.8 million and $310.5 million as of April 30, 2019 and October 31, 2018, respectively. This value represents the gross value of all vehicles under repurchase agreements and does not take into consideration proceeds that would be received upon resale of repossessed vehicles, which would be used to reduce the Company’s ultimate net liability. Such agreements are customary in the industries in which the Company operates and the Company’s exposure to loss under such agreements is limited by the potential loss on the resale value of the inventory which is required to be repurchased. Losses incurred under such arrangements have not been significant and the Company expects this pattern to continue. The reserve for losses included in other liabilities on contracts outstanding at April 30, 2019 and October 31, 2018 is immaterial.

Guarantee Arrangements: The Company is party to multiple agreements whereby it guarantees indebtedness of others, including losses under loss pool agreements. The Company estimated that its maximum loss exposure under these contracts was $26.1 million and $25.2 million at April 30, 2019 and October 31, 2018, respectively. Under the terms of these and various related agreements and upon the occurrence of certain events, the Company generally has the ability to, among other things, take possession of the underlying collateral. If the financial condition of the customers and dealers were to deteriorate and result in their inability to make payments, then additional accruals may be required. While the Company does not expect to experience losses under these agreements that are materially in excess of the amounts reserved, it cannot provide any assurance that the financial condition of the third parties will not deteriorate resulting in the third party’s inability to meet their obligations.

In the event that third parties are unable to meet obligations under these agreements, the Company cannot guarantee that the collateral underlying the agreements will be available or sufficient to avoid losses materially in excess of the amounts reserved. Any losses under these guarantees would generally be mitigated by the value of any underlying collateral, including financed equipment, and are generally subject to the finance company’s ability to provide the Company clear title to foreclosed equipment and other conditions. During periods of economic weakness, collateral values generally decline and can contribute to higher exposure to losses.

Other Matters: The Company is, from time to time, party to various legal proceedings arising out of ordinary course of business. The amount of alleged liability, if any, from these proceedings cannot be determined with certainty; however, the Company believes that its ultimate liability, if any, arising from pending legal proceedings, as well as from asserted legal claims and known potential legal claims, which are probable of assertion, taking into account established accruals for estimated liabilities, should not be material to the business, financial condition or results of operations.

15

A consolidated federal putative securities class action and a consolidated state putative securities class action are pending against the Company and certain of its officers and directors, each on behalf of a putative class of purchasers of the Company’s common stock in or traceable to its January 2017 IPO and of purchasers in its secondary offering of common stock in October 2017, as well as, for the federal action, purchasers from October 10, 2017 through June 7, 2018. The actions also name certain of the underwriters for the Company’s IPO or secondary offering as defendants. The federal and state courts each consolidated multiple separate actions pending before them, the first of which was filed on June 8, 2018. The actions allege certain violations of the Securities Act of 1933 and, for the federal action, the Securities Exchange Act of 1934.

Collectively, the actions seek certification of the putative classes asserted and compensatory damages and attorneys’ fees and costs. The underwriter defendants have notified the Company of their intent to seek indemnification from the Company pursuant to the IPO underwriting agreement regarding the claims asserted with respect to the IPO, and the Company expects the underwriters to do the same in regard to the claims asserted with respect to the October 2017 offering. Two purported derivative actions, which have since been consolidated, were also filed in federal court in Delaware in 2019 against the Company’s directors (with the Company as a nominal defendant), premised on allegations similar to those asserted in the consolidated federal securities litigation. The Company and the other defendants intend to defend these lawsuits vigorously. Additional lawsuits may be filed and, at this time, the Company is unable to predict the outcome of the lawsuits, the possible loss or range of loss, if any, associated with the resolution of the lawsuits, or any potential effect that it may have on the Company or its operations.

Note 13. Business Segment Information

The Company is organized into three reportable segments based on management’s process for making operating decisions, allocating capital and measuring performance, and based on the similarity of products, customers served, common use of facilities, and economic characteristics. The Company’s segments are as follows:

Fire & Emergency: This segment includes KME, E-One, Inc., Ferrara, American Emergency Vehicles, Inc., Leader Emergency Vehicles, Inc., Horton Enterprises, Inc., REV Ambulance Orlando and REV Brazil. These business units manufacture and market 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.

Commercial: This segment includes Collins Bus, Champion Bus, Inc., ENC, ElDorado National (Kansas), Inc., Capacity, Lay-Mor and REV Coach. Collins Bus manufactures, markets and distributes school buses, normally referred to as Type A school buses, as well as shuttle buses used for churches, transit authorities, hotels and resorts, retirement centers and other similar uses. Champion Bus, Inc., ENC and ElDorado National (Kansas), Inc. manufacture, market and distribute shuttle buses, transit buses, airport car rental and hotel/motel shuttles, tour and charter operations and other uses under several well-established brand names. Capacity manufactures, markets and distributes trucks used in terminal type operations, i.e., rail yards, warehouses, rail terminals and shipping terminals/ports. Lay-Mor manufactures, markets and distributes industrial sweepers for both the commercial and rental markets.

Recreation: This segment includes REV Recreation Group, Inc. (“RRG”), Goldshield Fiberglass, Inc. (“Goldshield”), Renegade, Midwest and Lance, and their respective manufacturing facilities, service and parts divisions. RRG primarily manufactures, markets and distributes Class A mobile RVs in both gas and diesel models. Renegade primarily manufacturers Class C and “Super C” RVs and heavy-duty special application trailers. 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 RRG, which is one of Goldshield’s primary customers. Midwest manufactures Class B RVs and luxury vans. Lance designs, engineers and manufactures truck campers, towable campers and toy haulers.

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 office 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.

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

	Three Months Ended April 30, 2019
	Fire & Emergency		Commercial		Recreation		Corporate, Other & Elims			Consolidated
Net sales	$	247.1	$	170.0	$	199.7	$	(1.8	)	$	615.0
Depreciation and amortization	$	3.5	$	2.1	$	4.3	$	1.7		$	11.6
Capital expenditures	$	1.8	$	1.1	$	1.0	$	(0.8	)	$	3.1
Total assets	$	627.2	$	322.3	$	356.6	$	107.2		$	1,413.3
Adjusted EBITDA	$	15.1	$	14.7	$	17.3	$	(11.0	)

	Three Months Ended April 30, 2018
	Fire & Emergency		Commercial		Recreation		Corporate, Other & Elims			Consolidated
Net sales	$	252.0	$	158.0	$	198.8	$	0.1		$	608.9
Depreciation and amortization	$	4.0	$	2.8	$	3.1	$	1.2		$	11.1
Capital expenditures	$	1.1	$	1.3	$	2.9	$	4.7		$	10.0
Total assets	$	613.7	$	288.0	$	337.5	$	119.5		$	1,358.7
Adjusted EBITDA	$	21.8	$	9.5	$	12.7	$	(10.0	)

	Six Months Ended April 30, 2019
	Fire & Emergency		Commercial		Recreation		Corporate, Other & Elims			Consolidated
Net sales	$	451.2	$	310.6	$	375.9	$	(4.0	)	$	1,133.7
Depreciation and amortization	$	7.0	$	4.7	$	8.3	$	3.8		$	23.8
Capital expenditures	$	3.2	$	1.7	$	2.4	$	2.1		$	9.4
Total assets	$	627.2	$	322.3	$	356.6	$	107.2		$	1,413.3
Adjusted EBITDA	$	23.4	$	19.7	$	26.5	$	(21.2	)

	Six Months Ended April 30, 2018
	Fire & Emergency		Commercial		Recreation		Corporate, Other & Elims			Consolidated
Net sales	$	467.3	$	290.2	$	366.0	$	0.3		$	1,123.8
Depreciation and amortization	$	8.5	$	5.6	$	5.9	$	2.1		$	22.1
Capital expenditures	$	2.7	$	2.3	$	4.2	$	14.4		$	23.6
Total assets	$	613.7	$	288.0	$	337.5	$	119.5		$	1,358.7
Adjusted EBITDA	$	39.9	$	13.9	$	20.8	$	(19.2	)

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 for the relevant period before depreciation and amortization, interest expense and benefit for 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 (loss) 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.

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Provided below is a reconciliation of segment Adjusted EBITDA to net income (loss):

	Three Months Ended April 30,						Six Months Ended April 30,
	2019			2018			2019			2018
Fire & Emergency Adjusted EBITDA	$	15.1		$	21.8		$	23.4		$	39.9
Commercial Adjusted EBITDA		14.7			9.5			19.7			13.9
Recreation Adjusted EBITDA		17.3			12.7			26.5			20.8
Corporate and Other Adjusted EBITDA		(11.0	)		(10.0	)		(21.2	)		(19.2	)
Depreciation and amortization		(11.6	)		(11.1	)		(23.8	)		(22.1	)
Interest expense, net		(8.0	)		(6.1	)		(15.8	)		(11.5	)
(Provision) benefit for income taxes		(2.5	)		(2.9	)		1.9			11.0
Transaction expenses		—			(0.5	)		(0.2	)		(2.1	)
Sponsor expense reimbursement		(0.1	)		(0.1	)		(0.6	)		(0.3	)
Restructuring costs		(1.8	)		(1.9	)		(2.9	)		(6.0	)
Stock-based compensation expense		(3.4	)		(1.9	)		(4.8	)		(3.7	)
Non-cash purchase accounting expense		—			—			—			(0.7	)
Legal matters		(2.4	)		(0.2	)		(4.5	)		(0.9	)
Impairment charges		(0.1	)		—			(2.8	)		—
Losses attributable to assets held for sale		—			—			(1.7	)		—
Deferred purchase price payment		(0.6	)		(1.9	)		(2.2	)		(2.2	)
Net income (loss)	$	5.6		$	7.4		$	(9.0	)	$	16.9

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This management’s discussion and analysis should be read in conjunction with the Unaudited Consolidated Financial Statements and risk factors contained in this Form 10-Q as well as the Management’s Discussion and Analysis and Risk Factors and audited consolidated financial statements and the related notes included in our Annual Report on Form 10-K filed on December 19, 2018.

Overview

REV is a leading designer, manufacturer and distributor of specialty vehicles and related aftermarket parts and services. We provide customized vehicle solutions for applications including: essential needs (ambulances, fire apparatus, school buses and municipal transit buses), industrial and commercial (terminal trucks, cut-away buses and street sweepers) and consumer leisure (recreational vehicles “RVs” and luxury buses). Our brand portfolio consists of 29 well-established principal vehicle brands including many of the most recognizable names within our served markets. Several of our brands pioneered their specialty vehicle product categories and date back more than 50 years. We believe that in most of our markets we hold the first or second market share position and approximately 61% of our net sales during the second quarter of fiscal 2019 came from products where we believe we hold such share positions.

Segments

We serve a diversified customer base primarily in the United States through the following segments:

Fire & Emergency – The Fire & Emergency segment sells fire apparatus equipment under the Emergency One (E-ONE), Kovatch Mobile Equipment (KME) and Ferrara brands and ambulances under the American Emergency Vehicles (AEV), Horton Emergency Vehicles (HEV), Leader Emergency Vehicles (LEV), Marque, McCoy Miller, Road Rescue, Wheeled Coach and Frontline brands. We believe we are the largest manufacturer by unit volume of fire and emergency vehicles in the United States and have one of the industry’s broadest portfolios of products including Type I ambulances (aluminum body mounted on a heavy truck-style chassis), Type II ambulances (van conversion ambulance typically favored for non-emergency patient transportation), 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 small tank to extinguish fires), ladder trucks (fire apparatus with stainless steel or aluminum ladders), tanker trucks and rescue and other vehicles. Each of our individual brands is distinctly positioned and targets certain price and feature points in the market such that dealers often carry, and customers often buy more than one REV Fire & Emergency product line.

Commercial – Our Commercial segment serves the bus market through the following principal brands: Collins Bus, Goshen Coach, ENC, ElDorado National, Federal Coach, Champion and World Trans. In addition, we have a joint venture partnership with Daimler to distribute and service Setra branded motor coaches to customers in the United States. We serve the terminal truck market through the Capacity brand and the sweeper market through the Lay-Mor brand. We are a leading producer of small- and medium-sized buses, Type A school buses, transit buses, terminal trucks and street sweepers in the United States. Our products in the Commercial segment include cut-away buses (customized body built on various types and sizes of commercial chassis), transit buses (large municipal buses where we build our own chassis and body), luxury buses (bus-style limo or high-end luxury conversions), Type A school buses (small school bus built on commercial chassis), street sweepers (three- and four-wheel versions used in road construction activities), and terminal trucks (specialized vehicles which move freight in warehouses or intermodal yards and ports). Within each market segment, we produce many customized configurations to address the diverse needs of our customers.

Recreation – Our Recreation segment serves the RV market through seven principal brands: American Coach, Fleetwood RV, Monaco Coach, Holiday Rambler, Renegade, Midwest and Lance. We believe our brand portfolio contains some of the longest standing, most recognized brands in the RV industry. Under these seven brands, REV provides a variety of highly recognized motorized and towable RV models such as: American Eagle, Signature, Marquis, Bounder, Pace Arrow, Verona, Weekender and Lance, among others. Our 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 on a van chassis), and towable travel trailers and truck campers. The Recreation segment also includes Goldshield Fiberglass, which produces a wide range of custom molded fiberglass products for the heavy-duty truck, RV and broader industrial markets.

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Factors Affecting Our Performance

The primary factors affecting our results of operations include:

General Economic Conditions

Our business is impacted by the U.S. economic environment, employment levels, consumer confidence, municipal spending, changes in interest rates and instability in securities markets around the world, among other factors. In particular, changes in the U.S. economic climate can impact demand in key end markets. In addition, the impact of tariffs can have a dramatic effect on the availability, lead-times and costs associated with raw materials and parts.

RV purchases are discretionary in nature and therefore sensitive to the availability of financing, consumer confidence, unemployment levels, levels of disposable income and changing levels of consumer home equity, among other factors. Although RV sales have increased in recent years, these markets are affected by general U.S. and global economic conditions, which create risks that future economic downturns will further reduce consumer demand and negatively impact our sales.

While less economically sensitive than the Recreation segment, the Fire & Emergency segment and the Commercial segment are also impacted by the overall economic environment. Local tax revenues are an important source of funding for fire and emergency response departments. As fire and emergency products and buses are typically a larger cost item for municipalities and their service life is relatively long making the purchase more deferrable, which can result in reduced demand for our products.

A decrease in employment levels, consumer confidence or the availability of financing, or other adverse economic events, or the failure of actual demand for our products to meet our estimates, could negatively affect the demand for our products. Any decline in overall customer demand in markets in which we operate could have a material adverse effect on our operating performance.

Seasonality

In a typical year, our operating results are impacted by seasonality. Historically the slowest quarters have been the first and second fiscal quarters when the purchasing seasons for vehicles such as school buses, RVs and sweepers are the lowest due to the colder weather and the relatively long time until the summer vacation season, and the fact that the school year is underway with municipalities and school bus contractors utilizing their existing fleets to transport student populations. Sales of our products have typically been higher in the third and fourth fiscal quarters (with the fourth fiscal quarter typically being the strongest) due to better weather, the vacation season, buying habits of RV dealers and end-users, timing of government/municipal customer fiscal years, and the beginning of a new school year. Our quarterly results of operations, cash flows, and liquidity are likely to be impacted by these seasonal patterns. Sales and earnings for other vehicles that we produce, such as essential emergency vehicles and commercial bus fleets, are less seasonal, but fluctuations in sales of these vehicles can also be impacted by timing surrounding the fiscal years of municipalities and commercial customers, as well as the timing and amounts of multi-unit orders

Impact of Acquisitions

For the past several years, a significant component of our growth has been the addition of businesses through acquisitions. We typically incur upfront costs as we integrate acquired businesses and implement our operating philosophy at newly acquired companies, including consolidation of supplies and materials, purchases, improvements to production processes, and other restructuring initiatives. The benefits of these integration efforts may not positively impact our financial results until subsequent periods. Operational and financial integration of our recently acquired businesses could be ongoing.

We recognize acquired assets and liabilities at fair value. This includes the recognition of identified intangible assets and goodwill which, in the case of definite-life intangible assets, are then amortized over their expected useful lives, which typically results in an increase in amortization expense. In addition, assets acquired and liabilities assumed generally include tangible assets, as well as contingent assets and liabilities.

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Results of Operations

	Three Months Ended April 30,				Six Months Ended April 30,
($ in millions)	2019		2018		2019			2018
Net sales	$	615.0	$	608.9	$	1,133.7		$	1,123.8
Gross profit		72.4		72.9		118.7			125.4
Operating income		16.1		16.4		4.9			17.4
Net income (loss)		5.6		7.4		(9.0	)		16.9
Adjusted EBITDA	$	36.1	$	34.0	$	48.4		$	55.4
Adjusted Net Income	$	15.2	$	15.5	$	12.3		$	25.4

Net Sales. Consolidated net sales were $615.0 million for the three months ended April 30, 2019, an increase of $6.1 million, or 1.0%, from $608.9 million for the three months ended April 30, 2018. The increase in consolidated net sales was primarily due to an increase in net sales in the Commercial and Recreation segments offset by a slight decrease in net sales in the Fire & Emergency segment. The increase in Commercial segment net sales was primarily due to an increase in sales of school and transit buses and terminal trucks, partially offset by a decrease in sales of shuttle buses and the impact of the sale of our mobility van business. The increase in Recreation segment net sales was primarily due to increases in sales across our RV brand line up, partially offset by a decrease in sales of Class A motorhomes.  The decrease in Fire & Emergency segment net sales was primarily due to fewer shipments of firetrucks compared to the prior year period due to the challenges experienced with ramping up production levels to react to strong end market demand.

Consolidated net sales were $1,133.7 million for the six months ended April 30, 2019, an increase of $9.9 million, or 0.9%, from $1,123.8 million for the six months ended April 30, 2018. The increase in consolidated net sales was primarily due to an increase in net sales in the Commercial and Recreation segments offset by a decrease in net sales in the Fire & Emergency segment. The increase in Commercial segment sales was primarily due to an increase in sales of school and transit buses and terminal trucks, partially offset by lower sales of shuttle buses and the impact of the sale of our mobility van business. The increase in Recreation segment net sales was primarily due to the acquisition of Lance and increases in sales across our RV brand line-up, except Class A motorhomes. The decrease in Fire & Emergency segment net sales was primarily due a decrease in sales of ambulances during the first quarter resulting from the material and chassis supply disruptions that lingered into the current fiscal year and a decrease in sales of firetrucks as we experienced challenges with ramping up production levels in the second quarter to react to strong end market demand.

Gross Profit. Consolidated gross profit was $72.4 million for the three months ended April 30, 2019, compared to $72.9 million for the three months ended April 30, 2018. Consolidated gross profit, as a percentage of consolidated net sales, was 11.8% for the three months ended April 30, 2019, a slight decrease compared to 12.0% for the three months ended April 30, 2018. The decrease was primarily due to a decrease in gross profit in the Fire & Emergency segment, partially offset by increases in the Commercial and Recreation segments.

Consolidated gross profit was $118.7 million for the six months ended April 30, 2019, compared to $125.4 million for the six months ended April 30, 2018. Consolidated gross profit, as a percentage of consolidated net sales, was 10.5% for the six months ended April 30, 2019, a decrease compared to 11.2% for the six months ended April 30, 2018. The decrease was primarily due to a decrease in gross profit in the Fire & Emergency segment, partially offset by increases in the Commercial and Recreation segments.

Operating Income. Consolidated operating income was $16.1 million for the three months ended April 30, 2019, a decrease of $0.3 million, from consolidated operating income of $16.4 million for the three months ended April 30, 2018. The decrease was primarily due to the decreases in gross profit described above.

Consolidated operating income was $4.9 million for the six months ended April 30, 2019, a decrease of $12.5 million, from consolidated operating income of $17.4 million for the six months ended April 30, 2018. The decrease was primarily due to the decreases in gross profit described above, along with higher legal and stock compensation expenses in the current year period.  

Income Taxes. Consolidated income tax expense was $2.5 million for the three months ended April 30, 2019, or 30.8% of pre-tax income, compared to income tax expense of $2.9 million, or 27.9% of pre-tax income, for the three months ended April 30, 2018. The increase in the Company’s effective income tax rate for the three months ended April 30, 2019 relative to the prior year period was primarily due to expense related to share-based compensation tax deductions.

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Consolidated income tax benefit was $1.9 million for the six months ended April 30, 2019, or 17.8% of pre-tax loss, compared to $11.0 million, or (185.8)% of pre-tax income, for the six months ended April 30, 2018. Results for the six months ended April 30, 2019 were unfavorably impacted by $0.8 million of net discrete expensesprimarily related to share-based compensation tax deductions. Results for the six months ended April 30, 2018 were favorably impacted by $12.6 million of net discrete tax benefits, including a $2.3 million benefit related to share-based compensation tax deductions and a $10.4 million benefit related to the remeasurement of net deferred tax liabilities as a result of new tax legislation in the United States.

Net Income (Loss). Consolidated net income was $5.6 million for the three months ended April 30, 2019, a decrease of $1.8 million, or 24.3%, from consolidated net income of $7.4 million for the three months ended April 30, 2018. The decrease was primarily due to the decrease in gross profit and higher stock compensation expenses.  

Consolidated net loss was $9.0 million for the six months ended April 30, 2019, a decrease of $25.9 million, or 153.3%, from consolidated net income of $16.9 million for the six months ended April 30, 2018. The decrease was primarily due to the decrease in gross profit, higher expenses for interest, stock compensation, legal fees and settlements, and tax provision, partially offset by a decrease in restructuring costs and transactions expenses.

Adjusted EBITDA. Consolidated Adjusted EBITDA was $36.1 million for the three months ended April 30, 2019, an increase of $2.1 million, or 6.2% from $34.0 million for the three months ended April 30, 2018. The increase in consolidated Adjusted EBITDA was primarily due to an increase in Adjusted EBITDA in the Commercial and Recreation segments offset by a decrease in the Fire & Emergency segment Adjusted EBITDA.

Consolidated Adjusted EBITDA was $48.4 million for the six months ended April 30, 2019, a decrease of $7.0 million, or 12.6% from $55.4 million for the six months ended April 30, 2018. The decrease in consolidated Adjusted EBITDA was primarily due to a decrease in the Fire & Emergency segment Adjusted EBITDA, partially offset by increases in Adjusted EBITDA in the Commercial and Recreation segments.

Refer to Adjusted EBITDA and Adjusted Net Income section of “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report on Form 10-Q for a reconciliation of Net Income (Loss) to Adjusted EBITDA tables and related footnotes.

Adjusted Net Income. Consolidated Adjusted Net Income was $15.2 million for the three months ended April 30, 2019, a decrease of $0.3 million, or 1.9% from consolidated Adjusted Net Income of $15.5 million for the three months ended April 30, 2018.

Consolidated Adjusted Net Income was $12.3 million for the six months ended April 30, 2019, a decrease of $13.1 million, or 51.6% from consolidated Adjusted Net Income of $25.4 million for the six months ended April 30, 2018.

Refer to Adjusted EBITDA and Adjusted Net Income section of “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report on Form 10-Q for a reconciliation of Net Income (Loss) to Adjusted Net Income tables and related footnotes.

Fire & Emergency Segment

	Three Months Ended April 30,						Six Months Ended April 30,
($ in millions)	2019			2018			2019			2018
Net sales	$	247.1		$	252.0		$	451.2		$	467.3
Adjusted EBITDA		15.1			21.8			23.4			39.9
Adjusted EBITDA % of net sales		6.1	%		8.7	%		5.2	%		8.5	%

Fire & Emergency segment net sales were $247.1 million for the three months ended April 30, 2019, a decrease of $4.9 million, or 1.9%, from $252.0 million for the three months ended April 30, 2018. The decrease in net sales compared to the prior year period was primarily due to a decrease in sales of firetrucks as we were in the process of and experienced challenges in ramping up production levels to react to strong end market demand during the quarter. Net sales of ambulances were flat compared to the same period in the prior year.

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Fire & Emergency segment net sales were $451.2 million for the six months ended April 30, 2019, a decrease of $16.1 million, or 3.4%, from $467.3 million for the six months ended April 30, 2018.The decrease in net sales compared to the prior year period was primarily due to a decrease in sales of ambulances resulting from the material and chassis supply disruptions in the first quarter that lingered into the second fiscal quarter, and a decrease in sales of firetrucks as we ramped up production levels in the second quarter to react to strong end market demand.

Fire & Emergency segment Adjusted EBITDA was $15.1 million for the three months ended April 30, 2019, a decrease of $6.7 million, or 30.7%, from $21.8 million for the three months ended April 30, 2018. The decrease in Adjusted EBITDA compared to prior year period was primarily due to a decrease in sales of firetrucks and the mix of ambulance sales in the quarter.

Fire & Emergency segment Adjusted EBITDA was $23.4 million for the six months ended April 30, 2019, a decrease of $16.5 million, or 41.4%, from $39.9 million for the six months ended April 30, 2018. The decrease in Adjusted EBITDA compared to prior year period was primarily due to a decrease in sales of ambulances and firetrucks as well as higher costs of production due to inefficiencies resulting from the material and chassis supply disruptions that lingered into the first quarter and the ramp up of firetruck production in the second quarter.

Commercial Segment

	Three Months Ended April 30,						Six Months Ended April 30,
($ in millions)	2019			2018			2019			2018
Net sales	$	170.0		$	158.0		$	310.6		$	290.2
Adjusted EBITDA		14.7			9.5			19.7			13.9
Adjusted EBITDA % of net sales		8.6	%		6.0	%		6.3	%		4.8	%

Commercial segment net sales were $170.0 million for the three months ended April 30, 2019, an increase of $12.0 million, or 7.6%, from $158.0 million for the three months ended April 30, 2018. The increase in net sales compared to the prior year period was primarily due to an increase in sales of school and transit buses and terminal trucks, partially offset by a decrease in shipments of shuttle buses and the impact of the sale of our mobility van business in the first quarter of fiscal 2019. Refer to Note 6, Divestiture Activities, of the Notes to Condensed Unaudited Consolidated Financial Statements for further details.

Commercial segment net sales were $310.6 million for the six months ended April 30, 2019, an increase of $20.4 million, or 7.0%, from $290.2 million for the six months ended April 30, 2018. The increase in net sales compared to the prior year period was primarily due to an increase in sales of school and transit buses and terminal trucks, partially offset by a decrease in shipments of shuttle buses and the impact of the sale of our mobility van business.

Commercial segment Adjusted EBITDA was $14.7 million for the three months ended April 30, 2019, an increase of $5.2 million, or 54.7%, from $9.5 million for the three months ended April 30, 2018. The increase in Adjusted EBITDA compared to the prior year period was primarily due to increased volumes of certain higher margin school and transit buses and terminal trucks and the disposition of the underperforming mobility van business in the first quarter of fiscal 2019.

Commercial segment Adjusted EBITDA was $19.7 million for the six months ended April 30, 2019, an increase of $5.8 million, or 41.7%, from $13.9 million for the six months ended April 30, 2018. The increase in Adjusted EBITDA compared to the prior year period was primarily due to increased volumes of certain higher margin school and transit buses and terminal trucks and the disposition of the underperforming mobility van business in the first quarter of fiscal 2019.

Recreation Segment

	Three Months Ended April 30,						Six Months Ended April 30,
($ in millions)	2019			2018			2019			2018
Net sales	$	199.7		$	198.8		$	375.9		$	366.0
Adjusted EBITDA		17.3			12.7			26.5			20.8
Adjusted EBITDA % of net sales		8.7	%		6.4	%		7.0	%		5.7	%

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Recreation segment net sales were $199.7 million for the three months ended April 30, 2019, an increase of $0.9 million, or 0.5%, from $198.8 million for the three months ended April 30, 2018.The increase in net sales compared to the prior year period was primarily due toincreases in sales across our RV brand line up, partially offset by a decrease in sales of Class A motorhomes. Class A RV volume declined compared to the prior year period due to a decision to rationalize the Class A model line-up, which resulted in a reduction in the number of models produced, as well as a recent slowdown in the overall end market.

Recreation segment net sales were $375.9 million for the six months ended April 30, 2019, an increase of $9.9 million, or 2.7%, from $366.0 million for the six months ended April 30, 2018. The increase in net sales compared to the prior year period was primarily due to increases in sales across our RV brand line up, partially offset by a decrease in sales of Class A motorhomes.

Recreation segment Adjusted EBITDA was $17.3 million for the three months ended April 30, 2019, an increase of $4.6 million, or 36.2%, from $12.7 million for the three months ended April 30, 2018. The increase in Adjusted EBITDA compared to the prior year period was primarily due to higher volumes in the more profitable Class B and Super C product categories and improved profitability in our towables product line.

Recreation segment Adjusted EBITDA was $26.5 million for the six months ended April 30, 2019, an increase of $5.7 million, or 27.4%, from $20.8 million for the six months ended April 30, 2018. The increase in Adjusted EBITDA compared to the prior year period was primarily due to the impact of the acquisition of Lance in January 2018, as well as higher volumes in the more profitable Class B, Super C and towable product categories (for the similar period of ownership in each year).

Backlog

Backlog represents firm orders received from dealers or directly from end customers. Backlog does not include purchase options or verbal orders. The following table presents a summary of our backlog by segment:

($ in millions)	April 30, 2019		April 30, 2018
Fire & Emergency	$	786.5	$	633.8
Commercial		435.9		397.2
Recreation		169.0		239.5
Total Backlog	$	1,391.4	$	1,270.5

Each of our three segments has a backlog of new vehicle orders that generally extends out from two to twelve months in duration. 

Our businesses take orders from our dealers and end customers that are evidenced by a contract, firm purchase order or reserved production slot for delivery of one or many vehicles with a given specification over a period of time. These orders are placed in our backlog and reported at the aggregate selling prices, net of discounts or allowances, at the time the order is received.

As of April 30, 2019, our backlog was $1,391.4 million compared to $1,270.5 million as of April 30, 2018. The increase in Fire & Emergency backlog was primarily due to an increase in firetruck orders and the timing of deliveries. The increase in the Commercial backlog was due to increases in orders for school and transit buses and terminal trucks. The decrease in Recreation backlog was reflective of the softer market for recreational vehicles.

Liquidity and Capital Resources

General

Our primary requirements for liquidity and capital are working capital, acquiring machinery and equipment, acquiring and building manufacturing facilities, the improvement and expansion of existing manufacturing facilities, debt service payments, regular quarterly dividend payments, general corporate needs, and common stock repurchases under the Company’s authorized stock buyback program. Historically, these cash requirements have been met through cash provided by operating activities, cash and cash equivalents and borrowings under our term loan and revolving credit facility.

We believe that our sources of liquidity and capital will be sufficient to finance our continued operations, growth strategy, cash dividends and additional expenses we expect to incur as a public company. However, we cannot assure that cash provided by operating activities and borrowings under the current revolving credit facility will be sufficient to meet our future needs. If we are unable to generate sufficient cash flows from operations in the future, and if availability under the current revolving credit facility is

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not sufficient due to the size of our borrowing base or other external factors, we may have to obtain additional financing. If additional capital is obtained by issuing equity, the interests of our existing stockholders will be diluted. If we incur additional indebtedness, that indebtedness may contain financial and other covenants that may significantly restrict our operations, or which may be at higher overall interest rates. We cannot assure that we will be able to obtain refinancing or additional financing on favorable terms or at all.

Cash Flow

The following table shows summary cash flows for the six months ended April 30, 2019 and April 30, 2018:

	Six Months Ended April 30,
($ in millions)	2019			2018
Net cash used in operating activities	$	(39.2	)	$	(43.8	)
Net cash provided by (used in) investing activities		4.7			(89.2	)
Net cash provided by financing activities		29.1			128.4
Net decrease in cash and cash equivalents	$	(5.4	)	$	(4.6	)

Net Cash Used in Operating Activities

Net cash used in operating activities for the six months ended April 30, 2019 was $39.2 million, compared to $43.8 million for the six months ended April 30, 2018. The reduction in cash used in operating activities for the six months ended April 30, 2019, compared to the prior year period was related to our focus on more efficient management of net working capital and cash, partially offset by a decrease in net income.

Net Cash Provided by (Used in) Investing Activities

Net cash provided by investing activities for the six months ended April 30, 2019 was $4.7 million, compared to net cash used in investing activities of $89.2 million for the six months ended April 30, 2018. The decrease in net cash used in investing activities for the six months ended April 30, 2019, compared to the prior year period, was primarily due to a decrease in business acquisition activity, a decrease in capital expenditures, and the benefit from the sale of certain other assets.

Net Cash Provided by Financing Activities

Net cash provided by financing activities for the six months ended April 30, 2019 was $29.1 million, which primarily consisted of net borrowings to fund working capital requirements, to repurchase the Company’s common stock and to pay regular quarterly dividends. Net cash provided by financing activities for the six months ended April 30, 2018 was $128.4 million, which primarily consisted of net borrowings to fund acquisitions, capital expenditures and to repurchase the Company’s common stock.

Dividends

Subject to legally available funds and the discretion of our board of directors, we expect to pay a quarterly cash dividend at the rate of $0.05 per share on our common stock. We expect to pay this quarterly dividend on or about the last day of the first month following each fiscal quarter to shareholders of record on the last day of such fiscal quarter. Our dividend policy has certain risks and limitations, particularly with respect to liquidity, and we may not pay dividends according to our policy, or at all. We cannot assure you that we will declare dividends or have sufficient funds to pay dividends on our common stock in the future. In the six months ended April 30, 2019, the Company paid cash dividends of $6.3 million.

On June 5, 2019, our board of directors declared a cash dividend of $0.05 per share on our common stock, payable in respect of the second quarter of fiscal year 2019. The dividend is payable on August 30, 2019 to holders of record as of July 30, 2019.

Stock Repurchase Program

On March 20, 2018 the Company’s Board of Directors authorized up to $50.0 million of repurchases of the Company’s issued and outstanding common stock with an expiration date of March 19, 2020. The Company’s share repurchase program is executed from time to time through open market purchases or through private transactions. Shares purchased under the share repurchase program are retired and returned to authorized and unissued status. On September 5, 2018 the Company’s Board of Directors authorized an additional $50.0 million of repurchases of the Company’s issued and outstanding common stock with an expiration date of September 4, 2020. During the three and six months ended April 30, 2019, the Company repurchased 495,475 shares under this repurchase program at a total cost of $5.3 million at an average price per share of $10.77. As of April 30, 2019, the Company had $41.3 million of authorization remaining under this program.

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Term Loan

On April 25, 2017, we entered into a $75.0 million term loan (“Term Loan” or “Term Loan Agreement”), as Borrower, certain subsidiaries of the Company, as Guarantor Subsidiaries. Principal may be prepaid at any time during the term of the Term Loan without penalty. The Company incurred $2.0 million in debt issuance costs related to the Term Loan. The Term Loan Agreement expires on April 25, 2022.

On July 18, 2018 the Company exercised a $50.0 million incremental commitment option under the Term Loan Agreement, which increased total borrowing under the facility from $75.0 million to $125.0 million. The Company incurred an additional $0.6 million of debt issuance costs related to the incremental commitment option under the Term Loan. Proceeds from the increase in the Term Loan were used to repay a portion of the borrowings under the April 2017 ABL Facility.

On March 29, 2019, the Company exercised a $50.0 million incremental commitment option under the Term Loan Agreement, which increased total borrowing under the facility from $125.0 million to $175.0 million. The Company incurred an additional $0.8 million of debt issuance costs related to the incremental commitment option under the Term Loan. Proceeds from the incremental commitment were used to repay a portion of the outstanding borrowings under the April 2017 ABL Facility.

The Company may voluntarily prepay principal, in whole or in part, at any time, without penalty. The Company is obligated to prepay certain minimum amounts based on the Company’s excess cash flow, as defined in the Term Loan Agreement. We are not required to make any such excess cash flow payments in fiscal year 2019. The Term Loan is also subject to mandatory prepayment if the Company or any of its restricted subsidiaries receives proceeds from certain events, including certain asset sales and casualty events, and the issuance of certain debt and equity interests.

April 2017 ABL Facility

On April 25, 2017, we entered into a new $350.0 million ABL revolving credit agreement with a syndicate of lenders (the “April 2017 ABL Facility” or “ABL Agreement”). The April 2017 ABL Facility provides for revolving loans and letters of credit in an aggregate amount of up to $350.0 million. The total April 2017 ABL Facility is subject to a $30.0 million sublimit for swing line loans and a $35.0 million sublimit for letters of credit, along with certain borrowing base and other customary restrictions as defined in the ABL Agreement. The April 2017 ABL Facility expires on April 25, 2022.

On December 22, 2017 the Company exercised its $100.0 million incremental commitment option under the April 2017 ABL Facility, which increased the facility to $450.0 million.

Principal may be repaid at any time during the term of the ABL Facility without penalty. The April 2017 ABL Facility contains certain financial covenants. We were in compliance with all financial covenants under the ABL Facility as of April 30, 2019. As of April 30, 2019, our availability under the April 2017 ABL Facility was $145.2 million.

Adjusted EBITDA and Adjusted Net Income

In considering the financial performance of the business, management analyzes the primary financial performance measures of Adjusted EBITDA and Adjusted Net Income. Adjusted EBITDA is defined as net income for the relevant period before depreciation and amortization, interest expense and provision for income taxes, as adjusted for certain items described below that we believe are not indicative of our ongoing operating performance. Adjusted Net Income is defined as net income, as adjusted for certain items described below that we believe are not indicative of our ongoing operating performance. Neither Adjusted EBITDA nor Adjusted Net Income is a measure defined by GAAP. The most directly comparable GAAP measure to Adjusted EBITDA and Adjusted Net Income is Net Income for the relevant period.

We believe Adjusted EBITDA and Adjusted Net Income are useful to investors because these performance measures are used by our management for measuring profitability. These measures exclude the impact of certain items which we believe have less bearing on our core operating performance because they are items that are not needed or available to the Company’s managers in the daily activities of their businesses. We believe that the core operations of our business are those which can be affected by our management in a particular period through their resource allocation decisions that affect the underlying performance of our operations conducted during that period. We also believe that decisions utilizing Adjusted EBITDA and Adjusted Net Income allow for a more meaningful comparison of operating fundamentals between companies within our markets by eliminating the impact of capital structure and taxation differences between the companies.

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To determine Adjusted EBITDA, we adjust NetIncome for the following items: non-cash depreciation and amortization, interest expense and income taxes. Stock-based compensation expense is excluded from both Adjusted Net Income and Adjusted EBITDA because it is an expense that is measured based upon external inputs such as our current share price and the movement of share price of peer companies, which cannot be impacted by our business managers. Stock-based compensation expense also reflects a cost which may obscure trends in our underlying vehicle businesses for a given period, due to the timing and nature of the equity awards.

We also adjust for exceptional items, such as, impairment charges, losses attributable to assets held for sale, and deferred purchase price payment, which are determined to be those that in management’s judgment need to be disclosed by virtue of their size, nature or incidence, and include non-cash items and items settled in cash. In determining whether an event or transaction is exceptional, management considers quantitative as well as qualitative factors such as the frequency or predictability of occurrence. Adjusted EBITDA is used by management to measure and report the Company’s financial performance to the Company’s Board of Directors, to assist in providing a meaningful analysis of the Company’s operating performance, and is used as a measurement in incentive compensation for management. Based on the foregoing factors, management considers the adjustment for non-cash purchase accounting, certain legal matters, transaction expenses, stock-based compensation expense, restructuring costs, sponsor expense reimbursement, impairment charges, losses attributable to assets held for sale and deferred purchase price payment to be exceptional items.

Adjusted EBITDA and Adjusted Net Income have limitations as analytical tools. These are not presentations made in accordance with GAAP, nor are they measures of financial condition and should not be considered as an alternative to net income or net loss for the period determined in accordance with GAAP. Adjusted EBITDA and Adjusted Net Income are not necessarily comparable to similarly titled measures used by other companies. As a result, you should not consider this performance measure in isolation from, or as a substitute analysis for, our results of operations as determined in accordance with GAAP. Moreover, such measures do not reflect:

• our cash expenditures, or future requirements for capital expenditures or contractual commitments;

• changes in, or cash requirements for, our working capital needs;

• the cash requirements necessary to service interest or principal payments on our debt;

• the cash requirements to pay our taxes.

The following table reconciles net income (loss) to Adjusted EBITDA for the periods presented:

	Three Months Ended April 30,				Six Months Ended April 30,
($ in millions)	2019		2018		2019			2018
Net income (loss)	$	5.6	$	7.4	$	(9.0	)	$	16.9
Depreciation and amortization		11.6		11.1		23.8			22.1
Interest expense, net		8.0		6.1		15.8			11.5
Provision (benefit) for income taxes		2.5		2.9		(1.9	)		(11.0	)
EBITDA		27.7		27.5		28.7			39.5
Transaction expenses(a)		—		0.5		0.2			2.1
Sponsor expense reimbursement(b)		0.1		0.1		0.6			0.3
Restructuring costs(c)		1.8		1.9		2.9			6.0
Stock-based compensation expense(d)		3.4		1.9		4.8			3.7
Non-cash purchase accounting expense(e)		—		—		—			0.7
Legal matters(f)		2.4		0.2		4.5			0.9
Impairment charges(g)		0.1		—		2.8			—
Losses attributable to assets held for sale(h)		—		—		1.7			—
Deferred purchase price payment(i)		0.6		1.9		2.2			2.2
Adjusted EBITDA	$	36.1	$	34.0	$	48.4		$	55.4

27

The following table reconciles netincome (loss) to Adjusted Net Income for the periods presented:

	Three Months Ended April 30,						Six Months Ended April 30,
($ in millions)	2019			2018			2019			2018
Net income (loss)	$	5.6		$	7.4		$	(9.0	)	$	16.9
Amortization of intangible assets		4.6			4.3			9.3			9.1
Transaction expenses(a)		—			0.5			0.2			2.1
Sponsor expense reimbursement(b)		0.1			0.1			0.6			0.3
Restructuring costs(c)		1.8			1.9			2.9			6.0
Stock-based compensation expense(d)		3.4			1.9			4.8			3.7
Non-cash purchase accounting expense(e)		—			—			—			0.7
Legal matters(f)		2.4			0.2			4.5			0.9
Impairment charges(g)		0.1			—			2.8			—
Losses attributable to assets held for sale(h)		—			—			1.7			—
Deferred purchase price payment(i)		0.6			1.9			2.2			2.2
Impact of tax rate change(j)		—			—			—			(10.4	)
Income tax effect of adjustments(k)		(3.4	)		(2.7	)		(7.7	)		(6.1	)
Adjusted Net Income	$	15.2		$	15.5		$	12.3		$	25.4

(a) Reflects costs incurred in connection with business acquisitions, divestitures and capital market transactions. These expenses consist primarily of legal, accounting, due diligence, and one-time post-acquisition expenses in addition to costs related to offerings of our common stock.

(b) Reflects the reimbursement of expenses to the Company’s primary equity holder.

(c) Restructuring expenses in the current fiscal year consisted of personnel costs, including severance, vacation and other employee benefit payments as well as facility closure and lease termination costs.

Restructuring expenses in the prior year period included costs incurred to restructure certain management positions in the Fire & Emergency, Commercial and Recreation segments as well as in the Corporate office, consisting of personnel costs, including severance and other employee benefit payments, as well as facility closure and lease termination costs.

(d) Reflects expenses associated with the redemption of stock options and vesting of restricted and performance stock units.

(e) Reflects the amortization of the difference between the book value and fair market value of certain acquired inventory that was subsequently sold after the acquisition date.

(f) Reflects legal fees and costs incurred to litigate and settle legal claims against us which are outside the normal course of business. Current year costs include payments: (i) to settle certain claims arising from a putative employee class action in the state of California, (ii) for fees and costs to litigate and settle non-ordinary course product, intellectual property and employment disputes and (iii) for fees and costs to litigate the putative securities class actions and derivative action pending against us and certain of our directors and officers.

(g) Reflects additional non-cash impairment charges related to the sale of Revability. Refer to Note 6, Divestiture Activities, of the Notes to Condensed Unaudited Consolidated Financial Statements for further details.

(h) Losses attributable to businesses that are or were classified as assets held for sale during the respective period.

(i) Reflects the expense associated with the deferred purchase price payment owed to sellers of Lance, who are now employees of the Company. The Company made a payment of $5.0 million on the 12-month anniversary date from the acquisition date and may make another payment of $5.0 million on the 24-month anniversary date from the acquisition date, subject to conditions in the purchase agreement.

(j) Reflects the one-time provisional impact of net deferred tax liability remeasurement as a result of the U.S. Tax Reform Act enacted in the first quarter of fiscal year 2018.

(k) Income tax effect of adjustments using a 26.5% effective income tax rate for the three and six months ended April 30, 2019 and April 30, 2018, except for certain transaction expenses, impact of tax rate change and losses attributable to assets held for sale.

28

Off-Balance Sheet Arrangements

We have not created, and are not party to, any special-purpose or off-balance sheet entities for the purpose of raising capital, incurring debt or operating our business. With the exception of operating lease obligations, we do not have any off-balance sheet arrangements or relationships with entities that are not consolidated into or disclosed in our consolidated financial statements that have, or are reasonably likely to have, a material current or future effect on our financial condition, revenues, expenses, results of operations, liquidity, capital expenditures and capital resources. In addition, we do not engage in trading activities involving non-exchange traded contracts.

Critical Accounting Policies and Estimates

The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates, assumptions and judgments that affect amounts reported in the consolidated financial statements and accompanying notes. The Company's disclosures of critical accounting policies are reported in its 2018 Annual Report on Form 10-K for the fiscal year ended October 31, 2018. In the first quarter of fiscal year 2019, the Company adopted ASU 2014-09 relating to revenue recognition, as discussed in Note 1 and Note 2 of the Notes to Condensed Unaudited Consolidated Financial Statements.

Recent Accounting Pronouncements

See Note 1 of the Notes to Condensed Unaudited Consolidated Financial Statements for a discussion of the impact on our financial statements of new accounting standards.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

There have been no material changes in our exposure to interest rate risk, foreign exchange risk and commodity price risk from the information provided in the Company’s Annual Report on Form 10-K filed on December 19, 2018.

Item 4. Controls and Procedures.

The Company maintains “disclosure controls and procedures”, as such term is defined under Exchange Act Rule 13a-15(e), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and our management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. The Company has carried out an evaluation, as of the end of the period covered by this report, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective at attaining the level of reasonable assurance noted above.

During the quarter ended April 30, 2019, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

For a description of our legal proceedings, see Note 12, Commitments and Contingencies, of the Notes to Condensed Consolidated Financial Statements, included in this Quarterly Report on Form 10-Q.

Item 1A. Risk Factors.

There have been no material changes to the risk factors associated with our business previously disclosed in “Item 1A. Risk Factors,” in 2018 Annual Report on Form 10-K for the fiscal year ended October 31, 2018.

29

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Common Stock Repurchases

The following table sets forth information with respect to purchases of common stock made by the Company during the second quarter of fiscal year 2019 (in millions, except share and per share amounts):

Period	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (1)
February 1 - February 28		—		—		—	$	46.7
March 1 - March 31		334,234	$	10.68		334,234	$	43.1
April 1 - April 30		161,241	$	10.95		161,241	$	41.3
Total		495,475				495,475

(1) On March 20, 2018 the Company’s Board of Directors authorized up to $50.0 million of repurchases of the Company’s issued and outstanding common stock with an expiration date of March 19, 2020. The Company’s share repurchase program is executed from time to time through open market purchases or through private transactions. Shares purchased under the share repurchase program are retired and returned to authorized and unissued status. On September 5, 2018 the Company’s Board of Directors authorized an additional $50.0 million of repurchases of the Company’s issued and outstanding common stock with an expiration date of September 4, 2020.

30

Item 6. Exhibits.

Exhibit Number	Description
31.1*	Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith.

31

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	REV GROUP, INC.
Date: June 5, 2019	By:	/s/    Timothy Sullivan
		Timothy Sullivan
		Chief Executive Officer
Date: June 5, 2019	By:	/s/    Dean J. Nolden
		Dean J. Nolden
		Chief Financial Officer

32

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO EXCHANGE ACT RULES 13a-14 AND 15d-14, AS ADOPTED PURSUANT TO SECTION 302 OF SARBANES-OXLEY ACT OF 2002

I, Timothy Sullivan, certify that:

1. I have reviewed this Form 10-Q of REV Group, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: June 5, 2019	By:	/s/ Timothy Sullivan
		Timothy Sullivan
		Chief Executive Officer (Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO EXCHANGE ACT RULES 13a-14 AND 15d-14, AS ADOPTED PURSUANT TO SECTION 302 OF SARBANES-OXLEY ACT OF 2002

I, Dean Nolden, certify that:

1. I have reviewed this Form 10-Q of REV Group, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: June 5, 2019	By:	/s/ Dean Nolden
		Dean Nolden
		Chief Financial Officer (Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of REV Group, Inc. (the “Company”) on Form 10-Q for the period ended April 30, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement has been provided to REV Group, Inc. and will be retained by REV Group, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

Dated: June 5, 2019	By:	/s/ Timothy Sullivan
		Timothy Sullivan
		Chief Executive Officer (Principal Executive Officer)

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of REV Group, Inc. (the “Company”) on Form 10-Q for the period ended April 30, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement has been provided to REV Group, Inc. and will be retained by REV Group, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

Dated: June 5, 2019	By:	/s/ Dean Nolden
		Dean Nolden
		Chief Financial Officer (Principal Financial Officer)

XML

Document and Entity Information - shares	6 Months Ended
	Apr. 30, 2019	Jun. 04, 2019
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Apr. 30, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Trading Symbol	REVG
Entity Registrant Name	REV Group, Inc.
Entity Central Index Key	0001687221
Current Fiscal Year End Date	--10-31
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		62,397,398

XML

Condensed Unaudited Consolidated Balance Sheets - USD ($) $ in Millions	Apr. 30, 2019	Oct. 31, 2018
Current assets:
Cash and cash equivalents	$ 6.5	$ 11.9
Accounts receivable, net	281.5	266.9
Inventories, net	536.3	514.0
Other current assets	40.3	50.3
Total current assets	864.6	843.1
Property, plant and equipment, net	206.5	214.3
Goodwill	159.8	161.8
Intangibles assets, net	167.7	174.6
Other long-term assets	14.7	14.3
Total assets	1,413.3	1,408.1
Current liabilities:
Current portion of long-term debt	1.8	1.3
Accounts payable	196.5	218.1
Customer advances	123.8	117.8
Other current liabilities	78.2	80.0
Total current liabilities	400.3	417.2
Long-term debt, less current maturities	460.0	420.6
Deferred income taxes	23.2	19.9
Other long-term liabilities	13.5	18.0
Total liabilities	897.0	875.7
Commitments and contingencies
Shareholders' Equity:
Common stock ($.001 par value, 605,000,000 shares authorized; 62,397,398 and 62,683,808 shares issued and outstanding, respectively)	0.1	0.1
Additional paid-in capital	491.6	492.1
Retained earnings	25.2	40.6
Accumulated other comprehensive loss	(1.6)	(1.4)
Total REV's shareholders' equity	515.3	531.4
Non-controlling interest	1.0	1.0
Total shareholders' equity	516.3	532.4
Total liabilities and shareholders' equity	$ 1,413.3	$ 1,408.1

XML

Condensed Unaudited Consolidated Balance Sheets (Parenthetical) - $ / shares	Apr. 30, 2019	Oct. 31, 2018
Statement Of Financial Position [Abstract]
Common stock, par value	$ 0.001	$ 0.001
Common stock, authorized shares	605,000,000	605,000,000
Common stock, shares issued	62,397,398	62,683,808
Common stock, shares outstanding	62,397,398	62,683,808

XML

Condensed Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Apr. 30, 2019	Apr. 30, 2018	Apr. 30, 2019	Apr. 30, 2018
Income Statement [Abstract]
Net sales	$ 615.0	$ 608.9	$ 1,133.7	$ 1,123.8
Cost of sales	542.6	536.0	1,015.0	998.4
Gross profit	72.4	72.9	118.7	125.4
Operating expenses:
Selling, general and administrative	48.6	48.8	96.3	89.7
Research and development costs	1.2	1.5	2.5	3.2
Amortization of intangible assets	4.6	4.3	9.3	9.1
Restructuring	1.8	1.9	2.9	6.0
Impairment charges	0.1		2.8
Total operating expenses	56.3	56.5	113.8	108.0
Operating income	16.1	16.4	4.9	17.4
Interest expense, net	8.0	6.1	15.8	11.5
Income (loss) before provision (benefit) for income taxes	8.1	10.3	(10.9)	5.9
Provision (benefit) for income taxes	2.5	2.9	(1.9)	(11.0)
Net income (loss)	5.6	7.4	(9.0)	16.9
Other comprehensive loss, net of tax	(0.2)	(0.5)	(0.2)	(0.8)
Comprehensive income (loss)	$ 5.4	$ 6.9	$ (9.2)	$ 16.1
Income (loss) per common share:
Basic	$ 0.09	$ 0.12	$ (0.14)	$ 0.26
Diluted	0.09	0.11	(0.14)	0.25
Dividends declared per common share	$ 0.05	$ 0.05	$ 0.10	$ 0.10

XML

Condensed Unaudited Consolidated Statements of Cash Flows - USD ($) $ in Millions	6 Months Ended
	Apr. 30, 2019	Apr. 30, 2018
Cash flows from operating activities:
Net (loss) income	$ (9.0)	$ 16.9
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation and amortization	23.8	22.1
Amortization of debt issuance costs	1.0	0.9
Stock-based compensation expense	4.8	3.7
Deferred income taxes	3.3	(10.4)
Gain on disposal of property, plant and equipment	(1.4)	(2.0)
Impairment charges	2.8
Changes in operating assets and liabilities, net of effects of business acquisitions	(64.5)	(75.0)
Net cash used in operating activities	(39.2)	(43.8)
Cash flows from investing activities:
Purchase of property, plant and equipment	(9.4)	(23.6)
Purchase of rental fleet vehicles	(3.0)	(14.2)
Proceeds from sale of property, plant and equipment	17.1	5.8
Acquisition of businesses, net of cash acquired		(57.2)
Net cash provided by (used in) investing activities	4.7	(89.2)
Cash flows from financing activities:
Net (repayments) proceeds from borrowings under revolving credit facility	(9.0)	139.6
Net proceeds from borrowings of Term Loan	49.2
Payment of dividends	(6.3)	(6.4)
Repurchase and retirement of common stock	(5.3)	(4.8)
Other financing activities	0.5
Net cash provided by financing activities	29.1	128.4
Net decrease in cash and cash equivalents	(5.4)	(4.6)
Cash and cash equivalents, beginning of period	11.9	17.8
Cash and cash equivalents, end of period	6.5	13.2
Cash paid (received) for:
Interest	15.6	10.3
Income taxes, net of refunds	$ (8.0)	$ 14.9

XML

Condensed Unaudited Consolidated Statements of Shareholders' Equity - USD ($) $ in Millions	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive (Loss) [Member]
Balance at Oct. 31, 2017	$ 572.5	$ 0.1	$ 532.0	$ 40.4
Balance, shares at Oct. 31, 2017		64,145,945
Net income (loss)	9.4			9.4
Other comprehensive income (loss), net of tax	(0.3)				$ (0.3)
Stock-based compensation expense	0.5		0.5
Exercise of common stock options	2.8		2.8
Exercise of common stock options, shares		418,116
Vesting of restricted stock, net of employee tax withholding	(0.1)		(0.1)
Vesting of restricted stock, net of employee tax withholding, shares		9,688
Dividends declared on common stock	(3.2)			(3.2)
Balance at Jan. 31, 2018	581.6	$ 0.1	535.2	46.6	(0.3)
Balance, shares at Jan. 31, 2018		64,573,749
Balance at Oct. 31, 2017	572.5	$ 0.1	532.0	40.4
Balance, shares at Oct. 31, 2017		64,145,945
Net income (loss)	16.9
Other comprehensive income (loss), net of tax	(0.8)
Balance at Apr. 30, 2018	581.4	$ 0.1	531.4	50.7	(0.8)
Balance, shares at Apr. 30, 2018		64,338,745
Balance at Jan. 31, 2018	581.6	$ 0.1	535.2	46.6	(0.3)
Balance, shares at Jan. 31, 2018		64,573,749
Net income (loss)	7.4			7.4
Other comprehensive income (loss), net of tax	(0.5)				(0.5)
Stock-based compensation expense	1.0		1.0
Vesting of restricted stock, net of employee tax withholding, shares		3,543
Dividends declared on common stock	(3.3)			(3.3)
Repurchase and retirement of common stock	(4.8)		(4.8)
Repurchase and retirement of common stock, Shares		(238,547)
Balance at Apr. 30, 2018	581.4	$ 0.1	531.4	50.7	(0.8)
Balance, shares at Apr. 30, 2018		64,338,745
Balance at Oct. 31, 2018	531.4	$ 0.1	492.1	40.6	(1.4)
Balance, shares at Oct. 31, 2018		62,683,808
Net income (loss)	(14.6)			(14.6)
Stock-based compensation expense	1.4		1.4
Exercise of common stock options	0.1		0.1
Exercise of common stock options, shares		20,000
Vesting of restricted and performance stock, net of shares withheld for employee taxes, share		94,237
Dividends declared on common stock	(3.2)			(3.2)
Balance at Jan. 31, 2019	515.1	$ 0.1	493.6	22.8	(1.4)
Balance, shares at Jan. 31, 2019		62,798,045
Balance at Oct. 31, 2018	531.4	$ 0.1	492.1	40.6	(1.4)
Balance, shares at Oct. 31, 2018		62,683,808
Net income (loss)	(9.0)
Other comprehensive income (loss), net of tax	(0.2)
Repurchase and retirement of common stock		$ (5.3)
Repurchase and retirement of common stock, Shares		(495,475)
Balance at Apr. 30, 2019	515.3	$ 0.1	491.6	25.2	(1.6)
Balance, shares at Apr. 30, 2019		62,397,398
Balance at Jan. 31, 2019	515.1	$ 0.1	493.6	22.8	(1.4)
Balance, shares at Jan. 31, 2019		62,798,045
Net income (loss)	5.6			5.6
Other comprehensive income (loss), net of tax	(0.2)				(0.2)
Stock-based compensation expense	2.9		2.9
Exercise of common stock options	0.4		0.4
Exercise of common stock options, shares		54,000
Vesting of restricted and performance stock, net of shares withheld for employee taxes, share		40,828
Dividends declared on common stock	(3.2)			(3.2)
Repurchase and retirement of common stock	(5.3)	$ (5.3)	(5.3)
Repurchase and retirement of common stock, Shares		(495,475)
Balance at Apr. 30, 2019	$ 515.3	$ 0.1	$ 491.6	$ 25.2	$ (1.6)
Balance, shares at Apr. 30, 2019		62,397,398

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Basis of Presentation

6 Months Ended

Apr. 30, 2019

Accounting Policies [Abstract]

Basis of Presentation

Note 1. Basis of Presentation

The Condensed Consolidated Financial Statements include the accounts of REV Group, Inc. (“REV” or “the Company”) and all its subsidiaries. In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements contain all adjustments (which include normal recurring adjustments, unless otherwise noted) necessary to present fairly the financial position, results of operations and cash flows for the periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP) have been condensed or omitted pursuant to the rules and regulations of the U.S. Securities and Exchange Commission. These Condensed Consolidated Financial Statements should be read in conjunction with the audited financial statements and notes thereto included in the Annual Report on Form 10-K of the Company for the year ended October 31, 2018. The interim results are not necessarily indicative of results for the full year. Certain reclassifications have been made to the fiscal 2018 financial statements to conform to the fiscal 2019 presentation.

Equity Sponsor: The Company’s primary equity holders are funds and an investment vehicle associated with AIP CF IV, LLC, which the Company collectively refers to as “American Industrial Partners,” “AIP” or “Sponsor” and which indirectly own approximately 53.8% of REV Group’s voting equity as of April 30, 2019. AIP is an operations and engineering-focused private equity firm headquartered in New York, New York.

Related Party Transactions: During the three months ended April 30, 2019 and April 30, 2018, the Company reimbursed expenses of its primary equity holder in the amount of $0.1 million and $0.1 million, respectively. During the six months ended April 30, 2019 and April 30, 2018, the Company reimbursed expenses of its primary equity holder in the amount of $0.6 million and $0.3 million, respectively. These expenses are included in selling, general and administrative expenses in the Company’s consolidated statements of operations.

Certain production facilities and offices for two of the Company’s subsidiaries are leased from related parties owned by certain members of management. Rent expense under these arrangements totaled $0.5 million and $0.4 million for the three months ended April 30, 2019, and April 30, 2018, respectively. Rent expense under these arrangements totaled $1.0 million and $0.6 million for the six months ended April 30, 2019 and April 30, 2018, respectively.

Recent Accounting Pronouncements

Accounting Pronouncements Recently Adopted

The following accounting pronouncements did not have a material impact on the Company’s consolidated financial statements:

• ASU 2018-02, “Income Statement—Reporting Comprehensive Income (Topic 220)” (“ASU 2018-02”)

• In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”) which outlines a single comprehensive model for entities to use in accounting for revenue from contracts with customers. The standard superseded most current revenue recognition guidance.

The Company adopted the new guidance on November 1, 2018 and applied the standard to all of its contracts using the modified retrospective approach. Under this method, the Company must recognize the cumulative effect of the changes in retained earnings on the date of adoption. The Company has determined the adoption of ASU 2014-09 did not have a material impact on its financial statements at the date of adoption. Accordingly, no cumulative effect adjustment to retained earnings was required and there are no other financial statement line items that were impacted by the adoption.

Accounting Pronouncements to be Adopted

• In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, “Leases” (Topic 842). Topic 842 is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-02 is effective for the Company beginning November 1, 2019.

The Company has established an implementation plan and is in the process of surveying its businesses, assessing its lease population, and compiling information on its active leases. In addition, the Company is determining needed changes to its policies, business processes, internal controls, and disclosures. While the Company continues to make progress on its implementation, the Company is still evaluating the impact of the adoption on its consolidated financial statements.

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Revenue Recognition

6 Months Ended

Apr. 30, 2019

Revenue From Contract With Customer [Abstract]

Revenue Recognition

Note 2. Revenue Recognition

Substantially all of the Company’s revenue is recognized from contracts with customers with product shipment destinations in the United States and Canada. The Company accounts for a contract when it has approval and commitment from both parties, the rights and payment terms of the parties are identified, the contract has commercial substance and collectability of consideration is probable. The Company determines the transaction price for each contract at inception based on the consideration that it expects to receive for the goods and services promised under the contract. The Company made an accounting policy election so that the transaction price excludes sales and usage-based taxes collected.

The Company’s primary source of revenue is generated from the manufacture and sale of specialty vehicles through its direct sales force or dealer network. The Company also generates revenue through separate contracts that relate to the sale of aftermarket parts and services. Revenue is typically recognized at a point-in-time, when control is transferred, which generally occurs when the product has been shipped to the customer or when it has been picked-up from the Company’s manufacturing facilities. The Company has made an accounting policy election to account for any shipping and handling costs that occur after the transfer of control as a fulfillment cost that is accrued when control is transferred. Periodically, certain customers request bill and hold transactions. In such cases, revenue is not recognized until after control has transferred which is generally when the customer has requested such transaction and has been notified that the product (i) has been completed according to customer specifications, (ii) has passed our quality control inspections, and (iii) has been separated from our inventory and is ready for physical transfer to the customer. Warranty obligations associated with the sale of a unit are assurance-type warranties that are a guarantee of the unit’s intended functionality and, therefore, do not represent a distinct performance obligation within the context of the contract. The Company does not disclose information about remaining performance obligations at period end because the Company’s contracts generally have original expected durations of one year or less.

Contract Assets and Contract Liabilities

The Company is generally entitled to bill its customers upon satisfaction of its performance obligations, and payment is usually received shortly after billing. Payments for certain contracts are received in advance of satisfying the related performance obligations. Such payments are recorded as customer advances in the Company’s consolidated balance sheet. The corresponding performance obligations are generally satisfied within one year of the contract inception. The Company recognized $30.4 million and $74.0 million of revenue that was included in the opening customer advances balance during the three and six months ended April 30, 2019, respectively. The Company’s payment terms do not include a significant financing component and the Company does not have significant contract assets.

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Inventories

6 Months Ended

Apr. 30, 2019

Inventory Disclosure [Abstract]

Inventories

Note 3. Inventories

Inventories, net of reserves, consisted of the following:

	April 30, 2019			October 31, 2018
Chassis	$	46.9		$	53.3
Raw materials		205.4			188.4
Work in process		201.5			195.7
Finished products		94.3			91.6
		548.1			529.0
Less: reserves		(11.8	)		(15.0	)
Total inventories, net	$	536.3		$	514.0

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Property, Plant and Equipment

6 Months Ended

Apr. 30, 2019

Property Plant And Equipment [Abstract]

Property, Plant and Equipment

Note 4. Property, Plant and Equipment

Property, plant and equipment consisted of the following:

	April 30, 2019			October 31, 2018
Land & land improvements	$	23.9		$	23.9
Buildings & improvements		103.8			102.5
Machinery & equipment		82.6			77.1
Rental fleet		31.4			35.4
Computer hardware & software		56.6			56.1
Office furniture & fixtures		4.8			5.1
Construction in process		16.5			14.7
		319.6			314.8
Less: accumulated depreciation		(113.1	)		(100.5	)
Total property, plant and equipment, net	$	206.5		$	214.3

Depreciation expense was $7.0 million and $6.8 million for the three months ended April 30, 2019, and April 30, 2018, respectively, and $14.5 million and $13.0 million for the six months ended April 30, 2019, and April 30, 2018, respectively.

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Goodwill and Intangible Assets

6 Months Ended

Apr. 30, 2019

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Note 5. Goodwill and Intangible Assets

The table below represents goodwill by segment:

	April 30, 2019		October 31, 2018
Fire & Emergency	$	88.6	$	88.6
Commercial		28.7		28.7
Recreation		42.5		44.5
Total goodwill	$	159.8	$	161.8

The change in the net carrying value amount of goodwill consisted of the following:

	Six Months Ended April 30,
	2019			2018
Balance at beginning of period	$	161.8		$	133.2
Activity during the period:
Activity from prior year acquisitions		(2.0	)		2.4
Activity from current year acquisitions		—			51.4
Balance at end of period	$	159.8		$	187.0

Intangible assets (excluding goodwill) consisted of the following:

	Weighted- Average Life		April 30, 2019			October 31, 2018
Finite-lived intangible assets:
Customer relationships		8.0	$	126.7		$	124.7
Order backlog		1.0		6.7			6.7
Non-compete agreements		5.0		2.0			2.0
Trade names		7.0		3.5			3.5
Technology-related		7.0		0.7			0.7
				139.6			137.6
Less: accumulated amortization				(87.8	)		(78.9	)
				51.8			58.7
Indefinite-lived trade names				115.9			115.9
Total intangible assets, net			$	167.7		$	174.6

Amortization expense was $4.6 million and $4.3 million for the three months ended April 30, 2019, and April 30, 2018, respectively, and $9.3 and $9.1 million for the six months ended April 30, 2019, and April 30, 2018, respectively.

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Divestiture Activities

6 Months Ended

Apr. 30, 2019

Discontinued Operations And Disposal Groups [Abstract]

Divestiture Activities

Note 6. Divestiture Activities

In fiscal year 2018, management decided to divest certain businesses and assets which include the Revability business, one Regional Technical Center (“RTC”), the Company’s rental fleet, and certain other assets. On December 21, 2018, the Company completed the sale of its mobility van business, Revability, with annual sales of approximately $40 million. All assets and operations at the Clarkston and Davisburg, Michigan facilities were transferred to the buyer. On February 21, 2019, the Company completed the sale of the RTC for net cash proceeds of $11.4 million. In connection with this sale, the Company recognized a gain on sale of $1.2 million.

The assets and liabilities related to the businesses that met the held for sale criteria are included in Other current assets and Other current liabilities in the Condensed Unaudited Consolidated Balance Sheets at estimated fair value, less cost to sell.

As of April 30, 2019, assets and liabilities held for sale were comprised of the following: property, plant and equipment, net—$1.4 million, inventories, net—$3.0 million, accounts receivable, net—$6.4 million, other current and long-term assets—$1.2 million, accounts payable—$4.7 million, current portion of long-term debt—$1.4 million and other current and long-term liabilities—$0.6 million.

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Long-Term Debt

6 Months Ended

Apr. 30, 2019

Debt Disclosure [Abstract]

Long-Term Debt

Note 7. Long-Term Debt

The Company was obligated under the following debt instruments:

	April 30, 2019			October 31, 2018
Senior secured facility:
Revolving credit ABL facility	$	291.0		$	300.0
Term Loan, net of debt issuance costs ($2.3 and $1.9)		170.8			121.9
		461.8			421.9
Less: current maturities		(1.8	)		(1.3	)
Long-term debt, less current maturities	$	460.0		$	420.6

April 2017 ABL Facility

Effective April 25, 2017, the Company entered into a $350.0 million revolving credit and guaranty agreement (the “April 2017 ABL Facility” or “ABL Agreement”) with a syndicate of lenders. The April 2017 ABL Facility consists of: (i) Revolving Loans, (ii) Swing Line Loans, and (iii) Letters of Credit, aggregating up to a combined maximum of $350.0 million. The total amount borrowed under the April 2017 ABL Facility is subject to a $30.0 million sublimit for Swing Line loans and a $35.0 million sublimit for Letters of Credit, along with certain borrowing base and other customary restrictions as defined in the ABL Agreement. The Company incurred $4.9 million of debt issuance costs related to the April 2017 ABL Facility. The amount of debt issuance costs is included in other long-term assets in the Company’s consolidated balance sheets.

The April 2017 ABL Facility allows for incremental borrowing capacity in an aggregate amount of up to $100.0 million, plus the excess, if any, of the borrowing base then in effect over total commitments then in effect. Any such incremental borrowing capacity is subject to receiving additional commitments from lenders and certain other customary conditions. The April 2017 ABL Facility matures on April 25, 2022. The Company may prepay principal, in whole or in part, at any time without penalty.

On December 22, 2017 the Company exercised a $100.0 million incremental borrowing capacity option under the April 2017 ABL Facility, which increased total borrowing capacity under the facility from $350.0 million to $450.0 million. The Company incurred an additional $0.4 million of debt issuance costs related to the incremental borrowing capacity option under the April 2017 ABL Facility.

Revolving Loans under the April 2017 ABL Facility bear interest at rates equal to, at the Company’s option, either a base rate plus an applicable margin, or a Eurodollar rate plus an applicable margin. Applicable interest rate margins are initially 0.75% for all base rate loans and 1.75% for all Eurodollar rate loans (with the Eurodollar rate having a floor of 0%), subject to adjustment based on utilization in accordance with the ABL Agreement. Interest is payable quarterly for all base rate loans and is payable monthly or quarterly for all Eurodollar rate loans.

The lenders under the April 2017 ABL Facility have a first priority security interest in substantially all accounts receivable and inventory of the Company, and a second priority security interest in substantially all other assets of the Company.

The April 2017 ABL Facility contains customary representations and warranties, affirmative and negative covenants, subject in certain cases to customary limitations, exceptions and exclusions. The April 2017 ABL Facility also contains certain customary events of default, which should such events occur, could result in the termination of the commitments under the April 2017 ABL Facility and the acceleration of all outstanding borrowings under it. The April 2017 ABL Facility contains a financial covenant restricting the Company from allowing its fixed charge coverage ratio to drop below 1.00 to 1.00 during a compliance period, which is triggered when the availability under the April 2017 ABL Facility falls below a threshold set forth in the credit agreement.

The Company was in compliance with all financial covenants under the April 2017 ABL Facility as of April 30, 2019. As of April 30, 2019, the Company’s availability under the April 2017 ABL Facility was $145.2 million.

The fair value of the April 2017 ABL Facility approximated book value at both April 30, 2019 and October 31, 2018.

Term Loan

Effective April 25, 2017, the Company entered into a $75.0 million term loan agreement (“Term Loan” and “Term Loan Agreement”), as Borrower with certain subsidiaries of the Company, acting as guarantors of debt. Principal may be prepaid at any time during the term of the Term Loan without penalty. The Company incurred $2.0 million of debt issuance costs related to the Term Loan.

The Term Loan Agreement allows for incremental facilities in an aggregate amount of up to $125.0 million. Any such incremental facilities are subject to receiving additional commitments from lenders and certain other customary conditions. The Term Loan agreement requires quarterly payments of 0.25% of the original principal balance, with remaining principal payable at maturity, April 25, 2022.

On July 18, 2018, the Company exercised a $50.0 million incremental commitment option under the Term Loan Agreement, which increased total borrowing under the facility from $75.0 million to $125.0 million. The Company incurred an additional $0.6 million of debt issuance costs related to the incremental commitment option under the Term Loan. Proceeds from the incremental commitment were used to repay a portion of the outstanding borrowings under the April 2017 ABL Facility.

On March 29, 2019, the Company exercised a $50.0 million incremental commitment option under the Term Loan Agreement, which increased total borrowing under the facility from $125.0 million to $175.0 million. The Company incurred an additional $0.8 million of debt issuance costs related to the incremental commitment option under the Term Loan. Proceeds from the incremental commitment were used to repay a portion of the outstanding borrowings under the April 2017 ABL Facility.

Applicable interest rate margins for the Term Loan are 2.50% for base rate loans and 3.50% for Eurodollar rate loans (with the Eurodollar rate having a floor of 1.00%). Interest is payable quarterly for all base rate loans and is payable monthly or quarterly for all Eurodollar rate loans. The weighted-average interest rate on borrowings outstanding under the Term Loan at April 30, 2019 was 5.98%.

The Term Loan Agreement contains customary representations and warranties, affirmative and negative covenants, in each case, subject to customary limitations, exceptions and exclusions. The Term Loan Agreement also contains certain customary events of default. The Term Loan Agreement requires the Company to maintain a specified secured leverage ratio, which will be tested quarterly and become more restrictive over the term of the term loan. Annually, in the third quarter of each fiscal year, the ratio declines by 25 basis points. The initial maximum secured leverage ratio is 4.00 to 1.00 and declines to 3.00 to 1.00 by July 31, 2021. The maximum leverage ratio for April 30, 2019 is 3.75 to 1.00.

The Company was in compliance with all financial covenants under the Term Loan as of April 30, 2019.

The fair value of the Term Loan approximated book value at both April 30, 2019 and October 31, 2018.

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Warranties

6 Months Ended

Apr. 30, 2019

Guarantees [Abstract]

Warranties

Note 8. Warranties

The Company’s products generally carry explicit warranties that extend from several months to several years, based on terms that are generally accepted in the marketplace. Selected components (such as engines, transmissions, tires, etc.) included in the Company’s end products may include warranties from original equipment manufacturers (“OEM”). These OEM warranties are passed on to the end customer of the Company’s products, and the customer deals directly with the applicable OEM for any issues encountered on those components.

Changes in the Company’s warranty liability consisted of the following:

	Six Months Ended April 30,
	2019			2018
Balance at beginning of period	$	30.8		$	40.2
Warranty provisions		9.2			14.0
Settlements made		(14.9	)		(17.5	)
Warranties for current year acquisitions		—			1.4
Changes in liability of pre-existing warranties		(0.6	)		(1.3	)
Balance at end of period	$	24.5		$	36.8

Accrued warranty is classified in the Company’s consolidated balance sheets as follows:

	April 30, 2019		October 31, 2018
Current liabilities	$	15.2	$	19.0
Other long-term liabilities		9.3		11.8
Total warranty liability	$	24.5	$	30.8

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Stock Repurchase Program

6 Months Ended

Apr. 30, 2019

Equity [Abstract]

Stock Repurchase Program

Note 9. Stock Repurchase Program

As discussed in the Company’s Annual Report on Form 10-K filed on December 19, 2018, on March 20, 2018 the Company’s Board of Directors authorized up to $50.0 million of repurchases of the Company’s issued and outstanding common stock with an expiration date of March 19, 2020. On September 5, 2018 the Company’s Board of Directors authorized an additional $50.0 million of repurchases of the Company’s issued and outstanding common stock with an expiration date of September 4, 2020. During the three and six months ended April 30, 2019, the Company repurchased 495,475 shares under this repurchase program at a total cost of $5.3 million at an average price per share of $10.77. As of April 30, 2019, the Company had $41.3 million of authorization remaining under this program.

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Earnings Per Share

6 Months Ended

Apr. 30, 2019

Earnings Per Share [Abstract]

Earnings Per Share

Note 10. Earnings Per Share

Basic earnings per common share (“EPS”) is computed by dividing net (loss) income by the weighted average number of common shares outstanding. Diluted EPS is computed by dividing net (loss) income by the weighted-average number of common shares outstanding assuming dilution. The difference between basic EPS and diluted EPS is the result of the dilutive effect of outstanding stock options, performance stock units and restricted stock units. The table below reconciles basic weighted-average common shares outstanding to diluted weighted-average shares outstanding for the three and six months ended April 30, 2019 and April 30, 2018:

	Three Months Ended April 30,				Six Months Ended April 30,
	2019		2018		2019		2018
Basic weighted-average common shares outstanding		62,957,854		64,577,469		62,994,738		64,429,854
Dilutive stock options		169,913		1,689,419		—		1,944,297
Dilutive restricted stock units		219,847		706		—		14,616
Dilutive performance stock units		—		—		—		—
Diluted weighted-average common shares outstanding		63,347,614		66,267,594		62,994,738		66,388,767

The table below represents exclusions from the calculation of weighted-average shares outstanding assuming dilution due to the anti-dilutive effect of the common stock equivalents for the three and six months ended April 30, 2019 and April 30, 2018: 

	Three Months Ended April 30,				Six Months Ended April 30,
	2019		2018		2019		2018
Anti-dilutive stock options		172,951		77,085		988,551		77,085
Anti-dilutive restricted stock units		497,925		503,412		1,750,723		376,239
Anti-dilutive performance stock units		18,408		—		18,408		—
Anti-dilutive common stock equivalents		689,284		580,497		2,757,682		453,324

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Income Taxes

6 Months Ended

Apr. 30, 2019

Income Tax Disclosure [Abstract]

Income Taxes

Note 11. Income Taxes

For interim financial reporting, the Company estimates its annual effective tax rate based on the projected income for its entire fiscal year and records a provision (benefit) for income taxes on a quarterly basis based on the estimated annual effective income tax rate, adjusted for any discrete tax items.

The Company recorded income tax expense of $2.5 million for the three months ended April 30, 2019, or 30.8% of pre-tax income, compared to income tax expense of $2.9 million, or 27.9% of pre-tax income, for the three months ended April 30, 2018. Results for the three months ended April 30, 2019 were unfavorably impacted by $0.4 million of net discrete expense primarily related to share-based compensation tax deductions. Results for the three months ended April 30, 2018 were unfavorably impacted by $0.1 million of net discrete tax expense primarily as a result of new tax legislation in the United States.

The Company recorded income tax benefit of $1.9 million for the six months ended April 30, 2019, or 17.8% of pre-tax loss, compared to income tax benefit of $11.0 million, or (185.8)% of pre-tax income, for the six months ended April 30, 2018. Results for the six months ended April 30, 2019 were unfavorably impacted by $0.8 million of net discrete expense primarily related to share-based compensation tax deductions. Results for the six months ended April 30, 2018 were favorably impacted by $12.6 million of net discrete tax benefits, including a $2.3 million benefit related to share-based compensation tax deductions and a $10.4 million benefit related to the remeasurement of net deferred tax liabilities as a result of new tax legislation in the United States.

On December 22, 2017, the Tax Reform Act was signed into law by President Trump. The Tax Reform Act significantly revised the U.S. corporate income tax regime by, among other things, lowering the U.S. corporate tax rate from 35% to 21% effective January 1, 2018, while also repealing the deduction for domestic production activities, limiting interest expense deductions, implementing a territorial tax system, imposing a repatriation tax on deemed repatriated earnings of foreign subsidiaries (the “Transition Tax”), and creating new taxes on certain foreign-sourced earnings. U.S. GAAP requires that the impact of tax legislation be recognized in the period in which the law was enacted. The U.S. Securities and Exchange Commission issued Staff Accounting Bulletin (SAB) No. 118, which provided guidance on how to account for the effects of the Tax Reform Act under ASC 740, Income Taxes. SAB No. 118 enabled companies to record a provisional amount for the effects for the Tax Reform Act based on a reasonable estimate, subject to adjustment during a measurement period of up to one year.

In the first quarter of fiscal year 2019, the Company completed its accounting for the Tax Reform Act under SAB No. 118 resulting in no change to the estimated cumulative tax benefit recorded in fiscal year 2018. In full fiscal year 2018, the Company recorded $11.3 million of cumulative tax benefit related to remeasurement of net deferred tax liabilities.

The Company periodically evaluates its valuation allowance requirements in light of changing facts and circumstances and may adjust its deferred tax asset valuation allowances accordingly. It is reasonably possible that the Company will either add to or reverse a portion of its existing deferred tax asset valuation allowances in the future. Such changes in the deferred tax asset valuation allowances will be reflected in the current operations through the Company’s effective income tax rate. During the three and six months ended April 30, 2019, there were no changes to the Company’s valuation allowances.

The Company’s liability for unrecognized tax benefits, including interest and penalties, was $2.4 million as of April 30, 2019 and $2.2 million as of October 31, 2018. The unrecognized tax benefits are presented in other long-term liabilities in the Company’s consolidated balance sheets. During the next twelve months, it is reasonably possible that $0.2 million of the unrecognized tax benefits, if recognized, would affect the annual effective income tax rate. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes in its consolidated statement of operations.

The Company regularly assesses the likelihood of an adverse outcome resulting from examinations to determine the adequacy of its tax reserves. As of April 30, 2019, the Company believes that it is more likely than not that the tax positions it has taken will be sustained upon the resolution of its audits resulting in no material impact on its consolidated financial position and the results of operations and cash flows. However, the final determination with respect to any tax audits, and any related litigation, could be materially different from the Company’s estimates and/or from its historical income tax provisions and income tax liabilities and could have a material effect on operating results and/or cash flows in the periods for which that determination is made. In addition, future period earnings may be adversely impacted by litigation costs, settlements, penalties, and/or interest assessments related to income tax examinations.

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Commitments and Contingencies

6 Months Ended

Apr. 30, 2019

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 12. Commitments and Contingencies

Personal Injury Actions and Other: Product and general liability claims arise against the Company from time to time in the ordinary course of business. These claims are generally covered by third-party insurance. There is inherent uncertainty as to the eventual resolution of unsettled claims. Management, however, believes that any losses will not have a material adverse effect on the Company’s consolidated financial condition, results of operations or cash flows.

Market Risks: The Company is contingently liable under bid, performance and specialty bonds and has open standby letters of credit issued by the Company’s banks in favor of third parties as follows:

	April 30, 2019		October 31, 2018
Performance, bid and specialty bonds	$	212.8	$	228.2
Open standby letters of credit		13.8		13.0
Total	$	226.6	$	241.2

Chassis Contingent Liabilities: The Company obtains certain vehicle chassis from automobile manufacturers under converter pool agreements. These agreements generally provide that the manufacturer will supply chassis at the Company’s various production facilities under the terms and conditions set forth in the agreement. The manufacturer does not transfer the certificate of origin to the Company and, accordingly, the chassis are treated as consigned inventory of the automobile manufacturer. Upon being put into production, the Company becomes obligated to pay the manufacturer for the chassis. Chassis are typically converted and delivered to customers within 90 to 120 days of receipt. If the chassis are not converted within this timeframe of delivery, the Company generally purchases the chassis and records inventory, or the Company is obligated to begin paying an interest charge on this inventory until purchased. Such agreements are customary in the industries in which the Company operates and the Company’s exposure to loss under such agreements is limited by the value of the vehicles that would be repossessed and resold to mitigate any losses. The Company’s contingent liability under such agreements was $55.0 million and $54.5 million as of April 30, 2019 and October 31, 2018, respectively.

Repurchase Commitments: The Company has entered into repurchase agreements with certain lending institutions. The repurchase commitments are on an individual unit basis with a term from the date it is financed by the lending institution through payment date by the dealer or other customer, generally not exceeding two years. The Company’s outstanding obligations under such agreements were $258.8 million and $310.5 million as of April 30, 2019 and October 31, 2018, respectively. This value represents the gross value of all vehicles under repurchase agreements and does not take into consideration proceeds that would be received upon resale of repossessed vehicles, which would be used to reduce the Company’s ultimate net liability. Such agreements are customary in the industries in which the Company operates and the Company’s exposure to loss under such agreements is limited by the potential loss on the resale value of the inventory which is required to be repurchased. Losses incurred under such arrangements have not been significant and the Company expects this pattern to continue. The reserve for losses included in other liabilities on contracts outstanding at April 30, 2019 and October 31, 2018 is immaterial.

Guarantee Arrangements: The Company is party to multiple agreements whereby it guarantees indebtedness of others, including losses under loss pool agreements. The Company estimated that its maximum loss exposure under these contracts was $26.1 million and $25.2 million at April 30, 2019 and October 31, 2018, respectively. Under the terms of these and various related agreements and upon the occurrence of certain events, the Company generally has the ability to, among other things, take possession of the underlying collateral. If the financial condition of the customers and dealers were to deteriorate and result in their inability to make payments, then additional accruals may be required. While the Company does not expect to experience losses under these agreements that are materially in excess of the amounts reserved, it cannot provide any assurance that the financial condition of the third parties will not deteriorate resulting in the third party’s inability to meet their obligations.

In the event that third parties are unable to meet obligations under these agreements, the Company cannot guarantee that the collateral underlying the agreements will be available or sufficient to avoid losses materially in excess of the amounts reserved. Any losses under these guarantees would generally be mitigated by the value of any underlying collateral, including financed equipment, and are generally subject to the finance company’s ability to provide the Company clear title to foreclosed equipment and other conditions. During periods of economic weakness, collateral values generally decline and can contribute to higher exposure to losses.

Other Matters: The Company is, from time to time, party to various legal proceedings arising out of ordinary course of business. The amount of alleged liability, if any, from these proceedings cannot be determined with certainty; however, the Company believes that its ultimate liability, if any, arising from pending legal proceedings, as well as from asserted legal claims and known potential legal claims, which are probable of assertion, taking into account established accruals for estimated liabilities, should not be material to the business, financial condition or results of operations.

A consolidated federal putative securities class action and a consolidated state putative securities class action are pending against the Company and certain of its officers and directors, each on behalf of a putative class of purchasers of the Company’s common stock in or traceable to its January 2017 IPO and of purchasers in its secondary offering of common stock in October 2017, as well as, for the federal action, purchasers from October 10, 2017 through June 7, 2018. The actions also name certain of the underwriters for the Company’s IPO or secondary offering as defendants. The federal and state courts each consolidated multiple separate actions pending before them, the first of which was filed on June 8, 2018. The actions allege certain violations of the Securities Act of 1933 and, for the federal action, the Securities Exchange Act of 1934.

Collectively, the actions seek certification of the putative classes asserted and compensatory damages and attorneys’ fees and costs. The underwriter defendants have notified the Company of their intent to seek indemnification from the Company pursuant to the IPO underwriting agreement regarding the claims asserted with respect to the IPO, and the Company expects the underwriters to do the same in regard to the claims asserted with respect to the October 2017 offering. Two purported derivative actions, which have since been consolidated, were also filed in federal court in Delaware in 2019 against the Company’s directors (with the Company as a nominal defendant), premised on allegations similar to those asserted in the consolidated federal securities litigation. The Company and the other defendants intend to defend these lawsuits vigorously. Additional lawsuits may be filed and, at this time, the Company is unable to predict the outcome of the lawsuits, the possible loss or range of loss, if any, associated with the resolution of the lawsuits, or any potential effect that it may have on the Company or its operations.

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Business Segment Information

6 Months Ended

Apr. 30, 2019

Segment Reporting [Abstract]

Business Segment Information

Note 13. Business Segment Information

The Company is organized into three reportable segments based on management’s process for making operating decisions, allocating capital and measuring performance, and based on the similarity of products, customers served, common use of facilities, and economic characteristics. The Company’s segments are as follows:

Fire & Emergency: This segment includes KME, E-One, Inc., Ferrara, American Emergency Vehicles, Inc., Leader Emergency Vehicles, Inc., Horton Enterprises, Inc., REV Ambulance Orlando and REV Brazil. These business units manufacture and market 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.

Commercial: This segment includes Collins Bus, Champion Bus, Inc., ENC, ElDorado National (Kansas), Inc., Capacity, Lay-Mor and REV Coach. Collins Bus manufactures, markets and distributes school buses, normally referred to as Type A school buses, as well as shuttle buses used for churches, transit authorities, hotels and resorts, retirement centers and other similar uses. Champion Bus, Inc., ENC and ElDorado National (Kansas), Inc. manufacture, market and distribute shuttle buses, transit buses, airport car rental and hotel/motel shuttles, tour and charter operations and other uses under several well-established brand names. Capacity manufactures, markets and distributes trucks used in terminal type operations, i.e., rail yards, warehouses, rail terminals and shipping terminals/ports. Lay-Mor manufactures, markets and distributes industrial sweepers for both the commercial and rental markets.

Recreation: This segment includes REV Recreation Group, Inc. (“RRG”), Goldshield Fiberglass, Inc. (“Goldshield”), Renegade, Midwest and Lance, and their respective manufacturing facilities, service and parts divisions. RRG primarily manufactures, markets and distributes Class A mobile RVs in both gas and diesel models. Renegade primarily manufacturers Class C and “Super C” RVs and heavy-duty special application trailers. 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 RRG, which is one of Goldshield’s primary customers. Midwest manufactures Class B RVs and luxury vans. Lance designs, engineers and manufactures truck campers, towable campers and toy haulers.

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 office 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, 2019
	Fire & Emergency		Commercial		Recreation		Corporate, Other & Elims			Consolidated
Net sales	$	247.1	$	170.0	$	199.7	$	(1.8	)	$	615.0
Depreciation and amortization	$	3.5	$	2.1	$	4.3	$	1.7		$	11.6
Capital expenditures	$	1.8	$	1.1	$	1.0	$	(0.8	)	$	3.1
Total assets	$	627.2	$	322.3	$	356.6	$	107.2		$	1,413.3
Adjusted EBITDA	$	15.1	$	14.7	$	17.3	$	(11.0	)

	Three Months Ended April 30, 2018
	Fire & Emergency		Commercial		Recreation		Corporate, Other & Elims			Consolidated
Net sales	$	252.0	$	158.0	$	198.8	$	0.1		$	608.9
Depreciation and amortization	$	4.0	$	2.8	$	3.1	$	1.2		$	11.1
Capital expenditures	$	1.1	$	1.3	$	2.9	$	4.7		$	10.0
Total assets	$	613.7	$	288.0	$	337.5	$	119.5		$	1,358.7
Adjusted EBITDA	$	21.8	$	9.5	$	12.7	$	(10.0	)

	Six Months Ended April 30, 2019
	Fire & Emergency		Commercial		Recreation		Corporate, Other & Elims			Consolidated
Net sales	$	451.2	$	310.6	$	375.9	$	(4.0	)	$	1,133.7
Depreciation and amortization	$	7.0	$	4.7	$	8.3	$	3.8		$	23.8
Capital expenditures	$	3.2	$	1.7	$	2.4	$	2.1		$	9.4
Total assets	$	627.2	$	322.3	$	356.6	$	107.2		$	1,413.3
Adjusted EBITDA	$	23.4	$	19.7	$	26.5	$	(21.2	)

	Six Months Ended April 30, 2018
	Fire & Emergency		Commercial		Recreation		Corporate, Other & Elims			Consolidated
Net sales	$	467.3	$	290.2	$	366.0	$	0.3		$	1,123.8
Depreciation and amortization	$	8.5	$	5.6	$	5.9	$	2.1		$	22.1
Capital expenditures	$	2.7	$	2.3	$	4.2	$	14.4		$	23.6
Total assets	$	613.7	$	288.0	$	337.5	$	119.5		$	1,358.7
Adjusted EBITDA	$	39.9	$	13.9	$	20.8	$	(19.2	)

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 for the relevant period before depreciation and amortization, interest expense and benefit for 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 (loss) 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 (loss):

	Three Months Ended April 30,						Six Months Ended April 30,
	2019			2018			2019			2018
Fire & Emergency Adjusted EBITDA	$	15.1		$	21.8		$	23.4		$	39.9
Commercial Adjusted EBITDA		14.7			9.5			19.7			13.9
Recreation Adjusted EBITDA		17.3			12.7			26.5			20.8
Corporate and Other Adjusted EBITDA		(11.0	)		(10.0	)		(21.2	)		(19.2	)
Depreciation and amortization		(11.6	)		(11.1	)		(23.8	)		(22.1	)
Interest expense, net		(8.0	)		(6.1	)		(15.8	)		(11.5	)
(Provision) benefit for income taxes		(2.5	)		(2.9	)		1.9			11.0
Transaction expenses		—			(0.5	)		(0.2	)		(2.1	)
Sponsor expense reimbursement		(0.1	)		(0.1	)		(0.6	)		(0.3	)
Restructuring costs		(1.8	)		(1.9	)		(2.9	)		(6.0	)
Stock-based compensation expense		(3.4	)		(1.9	)		(4.8	)		(3.7	)
Non-cash purchase accounting expense		—			—			—			(0.7	)
Legal matters		(2.4	)		(0.2	)		(4.5	)		(0.9	)
Impairment charges		(0.1	)		—			(2.8	)		—
Losses attributable to assets held for sale		—			—			(1.7	)		—
Deferred purchase price payment		(0.6	)		(1.9	)		(2.2	)		(2.2	)
Net income (loss)	$	5.6		$	7.4		$	(9.0	)	$	16.9

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Basis of Presentation (Policies)

6 Months Ended

Apr. 30, 2019

Accounting Policies [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Accounting Pronouncements Recently Adopted

The following accounting pronouncements did not have a material impact on the Company’s consolidated financial statements:

• ASU 2018-02, “Income Statement—Reporting Comprehensive Income (Topic 220)” (“ASU 2018-02”)

• In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”) which outlines a single comprehensive model for entities to use in accounting for revenue from contracts with customers. The standard superseded most current revenue recognition guidance.

The Company adopted the new guidance on November 1, 2018 and applied the standard to all of its contracts using the modified retrospective approach. Under this method, the Company must recognize the cumulative effect of the changes in retained earnings on the date of adoption. The Company has determined the adoption of ASU 2014-09 did not have a material impact on its financial statements at the date of adoption. Accordingly, no cumulative effect adjustment to retained earnings was required and there are no other financial statement line items that were impacted by the adoption.

Accounting Pronouncements to be Adopted

• In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, “Leases” (Topic 842). Topic 842 is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-02 is effective for the Company beginning November 1, 2019.

The Company has established an implementation plan and is in the process of surveying its businesses, assessing its lease population, and compiling information on its active leases. In addition, the Company is determining needed changes to its policies, business processes, internal controls, and disclosures. While the Company continues to make progress on its implementation, the Company is still evaluating the impact of the adoption on its consolidated financial statements.

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Inventories (Tables)

6 Months Ended

Apr. 30, 2019

Inventory Disclosure [Abstract]

Schedule of Inventories, Net of Reserves

Inventories, net of reserves, consisted of the following:

	April 30, 2019			October 31, 2018
Chassis	$	46.9		$	53.3
Raw materials		205.4			188.4
Work in process		201.5			195.7
Finished products		94.3			91.6
		548.1			529.0
Less: reserves		(11.8	)		(15.0	)
Total inventories, net	$	536.3		$	514.0

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Property, Plant and Equipment (Tables)

6 Months Ended

Apr. 30, 2019

Property Plant And Equipment [Abstract]

Summary of Property, Plant and Equipment

Property, plant and equipment consisted of the following:

	April 30, 2019			October 31, 2018
Land & land improvements	$	23.9		$	23.9
Buildings & improvements		103.8			102.5
Machinery & equipment		82.6			77.1
Rental fleet		31.4			35.4
Computer hardware & software		56.6			56.1
Office furniture & fixtures		4.8			5.1
Construction in process		16.5			14.7
		319.6			314.8
Less: accumulated depreciation		(113.1	)		(100.5	)
Total property, plant and equipment, net	$	206.5		$	214.3

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Goodwill and Intangible Assets (Tables)

6 Months Ended

Apr. 30, 2019

Goodwill And Intangible Assets Disclosure [Abstract]

Summary of Goodwill by Segment and Change in Net Carrying Value of Goodwill

The table below represents goodwill by segment:

	April 30, 2019		October 31, 2018
Fire & Emergency	$	88.6	$	88.6
Commercial		28.7		28.7
Recreation		42.5		44.5
Total goodwill	$	159.8	$	161.8

The change in the net carrying value amount of goodwill consisted of the following:

	Six Months Ended April 30,
	2019			2018
Balance at beginning of period	$	161.8		$	133.2
Activity during the period:
Activity from prior year acquisitions		(2.0	)		2.4
Activity from current year acquisitions		—			51.4
Balance at end of period	$	159.8		$	187.0

Summary of Intangible Assets Excluding Goodwill

Intangible assets (excluding goodwill) consisted of the following:

	Weighted- Average Life		April 30, 2019			October 31, 2018
Finite-lived intangible assets:
Customer relationships		8.0	$	126.7		$	124.7
Order backlog		1.0		6.7			6.7
Non-compete agreements		5.0		2.0			2.0
Trade names		7.0		3.5			3.5
Technology-related		7.0		0.7			0.7
				139.6			137.6
Less: accumulated amortization				(87.8	)		(78.9	)
				51.8			58.7
Indefinite-lived trade names				115.9			115.9
Total intangible assets, net			$	167.7		$	174.6

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Long-Term Debt (Tables)

6 Months Ended

Apr. 30, 2019

Debt Disclosure [Abstract]

Summary of Long-Term Debt

The Company was obligated under the following debt instruments:

	April 30, 2019			October 31, 2018
Senior secured facility:
Revolving credit ABL facility	$	291.0		$	300.0
Term Loan, net of debt issuance costs ($2.3 and $1.9)		170.8			121.9
		461.8			421.9
Less: current maturities		(1.8	)		(1.3	)
Long-term debt, less current maturities	$	460.0		$	420.6

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Warranties (Tables)

6 Months Ended

Apr. 30, 2019

Guarantees [Abstract]

Schedule of Changes in Warranty Liability

Changes in the Company’s warranty liability consisted of the following:

	Six Months Ended April 30,
	2019			2018
Balance at beginning of period	$	30.8		$	40.2
Warranty provisions		9.2			14.0
Settlements made		(14.9	)		(17.5	)
Warranties for current year acquisitions		—			1.4
Changes in liability of pre-existing warranties		(0.6	)		(1.3	)
Balance at end of period	$	24.5		$	36.8

Accrued Warranty Classified in Consolidated Balance Sheet

Accrued warranty is classified in the Company’s consolidated balance sheets as follows:

	April 30, 2019		October 31, 2018
Current liabilities	$	15.2	$	19.0
Other long-term liabilities		9.3		11.8
Total warranty liability	$	24.5	$	30.8

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Earnings Per Share (Tables)

6 Months Ended

Apr. 30, 2019

Earnings Per Share [Abstract]

Reconciliation of Basic Weighted-Average Common Shares Outstanding to Diluted Weighted-Average Shares Outstanding

The table below reconciles basic weighted-average common shares outstanding to diluted weighted-average shares outstanding for the three and six months ended April 30, 2019 and April 30, 2018:

	Three Months Ended April 30,				Six Months Ended April 30,
	2019		2018		2019		2018
Basic weighted-average common shares outstanding		62,957,854		64,577,469		62,994,738		64,429,854
Dilutive stock options		169,913		1,689,419		—		1,944,297
Dilutive restricted stock units		219,847		706		—		14,616
Dilutive performance stock units		—		—		—		—
Diluted weighted-average common shares outstanding		63,347,614		66,267,594		62,994,738		66,388,767

Exclusions from Calculation of Weighted-Average Shares Outstanding Assuming Dilution Due to Anti-Dilutive Effect of Common Stock Equivalents

The table below represents exclusions from the calculation of weighted-average shares outstanding assuming dilution due to the anti-dilutive effect of the common stock equivalents for the three and six months ended April 30, 2019 and April 30, 2018: 

	Three Months Ended April 30,				Six Months Ended April 30,
	2019		2018		2019		2018
Anti-dilutive stock options		172,951		77,085		988,551		77,085
Anti-dilutive restricted stock units		497,925		503,412		1,750,723		376,239
Anti-dilutive performance stock units		18,408		—		18,408		—
Anti-dilutive common stock equivalents		689,284		580,497		2,757,682		453,324

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Commitments and Contingencies (Tables)

6 Months Ended

Apr. 30, 2019

Commitments And Contingencies Disclosure [Abstract]

Schedule of Contingent Liabilities

The Company is contingently liable under bid, performance and specialty bonds and has open standby letters of credit issued by the Company’s banks in favor of third parties as follows:

	April 30, 2019		October 31, 2018
Performance, bid and specialty bonds	$	212.8	$	228.2
Open standby letters of credit		13.8		13.0
Total	$	226.6	$	241.2

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Business Segment Information (Tables)

6 Months Ended

Apr. 30, 2019

Segment Reporting [Abstract]

Selected Financial Information of Segments

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

	Three Months Ended April 30, 2019
	Fire & Emergency		Commercial		Recreation		Corporate, Other & Elims			Consolidated
Net sales	$	247.1	$	170.0	$	199.7	$	(1.8	)	$	615.0
Depreciation and amortization	$	3.5	$	2.1	$	4.3	$	1.7		$	11.6
Capital expenditures	$	1.8	$	1.1	$	1.0	$	(0.8	)	$	3.1
Total assets	$	627.2	$	322.3	$	356.6	$	107.2		$	1,413.3
Adjusted EBITDA	$	15.1	$	14.7	$	17.3	$	(11.0	)

	Three Months Ended April 30, 2018
	Fire & Emergency		Commercial		Recreation		Corporate, Other & Elims			Consolidated
Net sales	$	252.0	$	158.0	$	198.8	$	0.1		$	608.9
Depreciation and amortization	$	4.0	$	2.8	$	3.1	$	1.2		$	11.1
Capital expenditures	$	1.1	$	1.3	$	2.9	$	4.7		$	10.0
Total assets	$	613.7	$	288.0	$	337.5	$	119.5		$	1,358.7
Adjusted EBITDA	$	21.8	$	9.5	$	12.7	$	(10.0	)

	Six Months Ended April 30, 2019
	Fire & Emergency		Commercial		Recreation		Corporate, Other & Elims			Consolidated
Net sales	$	451.2	$	310.6	$	375.9	$	(4.0	)	$	1,133.7
Depreciation and amortization	$	7.0	$	4.7	$	8.3	$	3.8		$	23.8
Capital expenditures	$	3.2	$	1.7	$	2.4	$	2.1		$	9.4
Total assets	$	627.2	$	322.3	$	356.6	$	107.2		$	1,413.3
Adjusted EBITDA	$	23.4	$	19.7	$	26.5	$	(21.2	)

	Six Months Ended April 30, 2018
	Fire & Emergency		Commercial		Recreation		Corporate, Other & Elims			Consolidated
Net sales	$	467.3	$	290.2	$	366.0	$	0.3		$	1,123.8
Depreciation and amortization	$	8.5	$	5.6	$	5.9	$	2.1		$	22.1
Capital expenditures	$	2.7	$	2.3	$	4.2	$	14.4		$	23.6
Total assets	$	613.7	$	288.0	$	337.5	$	119.5		$	1,358.7
Adjusted EBITDA	$	39.9	$	13.9	$	20.8	$	(19.2	)

Reconciliation of Segment Adjusted EBITDA to Net Income (Loss)

Provided below is a reconciliation of segment Adjusted EBITDA to net income (loss):

	Three Months Ended April 30,						Six Months Ended April 30,
	2019			2018			2019			2018
Fire & Emergency Adjusted EBITDA	$	15.1		$	21.8		$	23.4		$	39.9
Commercial Adjusted EBITDA		14.7			9.5			19.7			13.9
Recreation Adjusted EBITDA		17.3			12.7			26.5			20.8
Corporate and Other Adjusted EBITDA		(11.0	)		(10.0	)		(21.2	)		(19.2	)
Depreciation and amortization		(11.6	)		(11.1	)		(23.8	)		(22.1	)
Interest expense, net		(8.0	)		(6.1	)		(15.8	)		(11.5	)
(Provision) benefit for income taxes		(2.5	)		(2.9	)		1.9			11.0
Transaction expenses		—			(0.5	)		(0.2	)		(2.1	)
Sponsor expense reimbursement		(0.1	)		(0.1	)		(0.6	)		(0.3	)
Restructuring costs		(1.8	)		(1.9	)		(2.9	)		(6.0	)
Stock-based compensation expense		(3.4	)		(1.9	)		(4.8	)		(3.7	)
Non-cash purchase accounting expense		—			—			—			(0.7	)
Legal matters		(2.4	)		(0.2	)		(4.5	)		(0.9	)
Impairment charges		(0.1	)		—			(2.8	)		—
Losses attributable to assets held for sale		—			—			(1.7	)		—
Deferred purchase price payment		(0.6	)		(1.9	)		(2.2	)		(2.2	)
Net income (loss)	$	5.6		$	7.4		$	(9.0	)	$	16.9

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Basis of Presentation - Additional Information (Detail) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
	Apr. 30, 2019	Apr. 30, 2019	Apr. 30, 2018	Apr. 30, 2019	Apr. 30, 2018
Primary Equity Holder [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Selling, general and administrative expenses charged by primary equity holder		$ 0.1	$ 0.1	$ 0.6	$ 0.3
Management [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Rent expense		$ 0.5	$ 0.4	$ 1.0	$ 0.6
American Industrial Partners [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Equity interest held by operating partnership, voting equity	53.80%

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Revenue Recognition - Additional Information (Detail 1)	Apr. 30, 2019
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2019-05-01
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items]
Revenues remaining performance obligations expected to be satisfied period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2020-05-01
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items]
Revenues remaining performance obligations expected to be satisfied period

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Revenue Recognition - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Apr. 30, 2019	Apr. 30, 2019
Revenue From Contract With Customer [Abstract]
Revenue recognized included in customer advances	$ 30.4	$ 74.0

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Inventories - Schedule of Inventories, Net of Reserves (Detail) - USD ($) $ in Millions	Apr. 30, 2019	Oct. 31, 2018
Inventory Disclosure [Abstract]
Chassis	$ 46.9	$ 53.3
Raw materials	205.4	188.4
Work in process	201.5	195.7
Finished products	94.3	91.6
Inventory, Gross, Total	548.1	529.0
Less: reserves	(11.8)	(15.0)
Total inventories, net	$ 536.3	$ 514.0

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Property, Plant and Equipment - Summary of Property, Plant and Equipment (Detail) - USD ($) $ in Millions	Apr. 30, 2019	Oct. 31, 2018
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 319.6	$ 314.8
Less: accumulated depreciation	(113.1)	(100.5)
Total property, plant and equipment, net	206.5	214.3
Land and Land Improvements [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	23.9	23.9
Building and Improvements [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	103.8	102.5
Machinery and Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	82.6	77.1
Rental Fleet [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	31.4	35.4
Computer Hardware and Software [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	56.6	56.1
Office Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	4.8	5.1
Construction in Progress [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 16.5	$ 14.7

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Property, Plant and Equipment - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Apr. 30, 2019	Apr. 30, 2018	Apr. 30, 2019	Apr. 30, 2018
Property Plant And Equipment [Abstract]
Depreciation expense	$ 7.0	$ 6.8	$ 14.5	$ 13.0

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Goodwill and Intangible Assets - Summary of Goodwill by Segment (Detail) - USD ($) $ in Millions	Apr. 30, 2019	Oct. 31, 2018	Apr. 30, 2018	Oct. 31, 2017
Goodwill [Line Items]
Goodwill	$ 159.8	$ 161.8	$ 187.0	$ 133.2
Fire & Emergency [Member]
Goodwill [Line Items]
Goodwill	88.6	88.6
Commercial [Member]
Goodwill [Line Items]
Goodwill	28.7	28.7
Recreation [Member]
Goodwill [Line Items]
Goodwill	$ 42.5	$ 44.5

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Goodwill and Intangible Assets - Summary of Change in Net Carrying Value of Goodwill (Detail) - USD ($) $ in Millions	6 Months Ended
	Apr. 30, 2019	Apr. 30, 2018
Goodwill And Intangible Assets Disclosure [Abstract]
Balance at beginning of period	$ 161.8	$ 133.2
Activity from prior year acquisitions	(2.0)	2.4
Activity from current year acquisitions		51.4
Balance at end of period	$ 159.8	$ 187.0

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Goodwill and Intangible Assets - Summary of Intangible Assets Excluding Goodwill (Detail) - USD ($) $ in Millions	6 Months Ended
	Apr. 30, 2019	Oct. 31, 2018
Intangible Assets Excluding Goodwill [Line Items]
Finite-lived intangible assets, gross	$ 139.6	$ 137.6
Less: accumulated amortization	(87.8)	(78.9)
Finite-lived intangible assets, net	51.8	58.7
Indefinite-lived trade names	115.9	115.9
Total intangible assets, net	$ 167.7	174.6
Customer Relationships [Member]
Intangible Assets Excluding Goodwill [Line Items]
Finite-lived intangible assets, Weighted-Average Life	8 years
Finite-lived intangible assets, gross	$ 126.7	124.7
Order Backlog [Member]
Intangible Assets Excluding Goodwill [Line Items]
Finite-lived intangible assets, Weighted-Average Life	1 year
Finite-lived intangible assets, gross	$ 6.7	6.7
Non-compete Agreements [Member]
Intangible Assets Excluding Goodwill [Line Items]
Finite-lived intangible assets, Weighted-Average Life	5 years
Finite-lived intangible assets, gross	$ 2.0	2.0
Trade Names [Member]
Intangible Assets Excluding Goodwill [Line Items]
Finite-lived intangible assets, Weighted-Average Life	7 years
Finite-lived intangible assets, gross	$ 3.5	3.5
Technology-related Intangible Assets [Member]
Intangible Assets Excluding Goodwill [Line Items]
Finite-lived intangible assets, Weighted-Average Life	7 years
Finite-lived intangible assets, gross	$ 0.7	$ 0.7

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Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Apr. 30, 2019	Apr. 30, 2018	Apr. 30, 2019	Apr. 30, 2018
Goodwill And Intangible Assets Disclosure [Abstract]
Amortization expense	$ 4.6	$ 4.3	$ 9.3	$ 9.1

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Divestiture Activities - Additional Information (Detail) - USD ($) $ in Millions	Feb. 21, 2019	Dec. 21, 2018	Apr. 30, 2019
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items]
Property, plant and equipment, net			$ 1.4
Inventories, net			3.0
Accounts receivable, net			6.4
Other current and long-term assets			1.2
Accounts payable			4.7
Current portion of long-term debt			1.4
Other current and long-term liabilities			$ 0.6
Mobility Van Business [Member] | Commercial Segment [Member]
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items]
Annual sales of discontinued operation		$ 40.0
Regional Technical Center [Member]
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items]
Net cash proceeds from sale of business	$ 11.4
Gain on sale of business	$ 1.2

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Long-Term Debt - Summary of Long-Term Debt (Detail) - USD ($) $ in Millions	Apr. 30, 2019	Oct. 31, 2018
Debt Instruments [Abstract]
Revolving credit ABL facility	$ 291.0	$ 300.0
Term Loan, net of debt issuance costs ($2.3 and $1.9)	170.8	121.9
Long term debt including current maturities	461.8	421.9
Less: current maturities	(1.8)	(1.3)
Long-term debt, less current maturities	$ 460.0	$ 420.6

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Long-Term Debt - Summary of Long-Term Debt (Parenthetical) (Detail) - USD ($) $ in Millions	Apr. 30, 2019	Mar. 29, 2019	Oct. 31, 2018	Jul. 18, 2018	Apr. 25, 2017
Term Loan [Member]
Debt Instrument [Line Items]
Debt issuance costs	$ 2.3	$ 0.8	$ 1.9	$ 0.6	$ 2.0

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Long-Term Debt - Additional Information (Detail) - USD ($)					6 Months Ended
	Mar. 29, 2019	Jul. 18, 2018	Dec. 22, 2017	Apr. 25, 2017	Apr. 30, 2019	Jul. 31, 2021	Oct. 31, 2018
Debt Instrument [Line Items]
Secured leverage declined basis points					0.25%
Maximum [Member]
Debt Instrument [Line Items]
Secured leverage ratio				4.00%	3.75%
Maximum [Member] | Scenario, Forecast
Debt Instrument [Line Items]
Secured leverage ratio						3.00%
April 2017 Asset Based Lending Facility [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity				$ 350,000,000
Debt issuance costs			$ 400,000	4,900,000
Additional increase in borrowing capacity				$ 100,000,000
Debt instrument maturity date				Apr. 25, 2022
Additional increase in borrowing capacity			100,000,000
Available current borrowing capacity					$ 145,200,000
April 2017 Asset Based Lending Facility [Member] | Minimum [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity			350,000,000
April 2017 Asset Based Lending Facility [Member] | Maximum [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity			$ 450,000,000
Fixed charge coverage ratio					100.00%
April 2017 Asset Based Lending Facility [Member] | Base Rate
Debt Instrument [Line Items]
Debt instrument applicable interest rate margins			0.75%
April 2017 Asset Based Lending Facility [Member] | Eurodollar
Debt Instrument [Line Items]
Debt instrument applicable interest rate margins			1.75%
Required annual payment percentage			0.00%
April 2017 Asset Based Lending Facility [Member] | Swing Lines Loan [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity				$ 30,000,000
April 2017 Asset Based Lending Facility [Member] | Letter of Credit [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity				35,000,000
Term Loan [Member]
Debt Instrument [Line Items]
Debt issuance costs	$ 800,000	$ 600,000		$ 2,000,000	$ 2,300,000		$ 1,900,000
Debt instrument maturity date					Apr. 25, 2022
Additional increase in borrowing capacity	50,000,000	50,000,000
Required annual payment percentage				0.25%
Debt principal amount				$ 75,000,000
Weighted-average interest rate on term loan					5.98%
Term Loan [Member] | Minimum [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity	125,000,000	75,000,000
Term Loan [Member] | Maximum [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 175,000,000	$ 125,000,000
Additional increase in borrowing capacity					$ 125,000,000
Term Loan [Member] | Base Rate
Debt Instrument [Line Items]
Debt instrument applicable interest rate margins				2.50%
Debt instrument frequency of payment					Quarterly
Term Loan [Member] | Eurodollar
Debt Instrument [Line Items]
Debt instrument applicable interest rate margins				3.50%
Debt instrument , floor interest rate				1.00%
Debt instrument frequency of payment					Monthly or Quarterly

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Warranties - Schedule of Changes in Warranty Liability (Detail) - USD ($) $ in Millions	6 Months Ended
	Apr. 30, 2019	Apr. 30, 2018
Guarantees [Abstract]
Balance at beginning of period	$ 30.8	$ 40.2
Warranty provisions	9.2	14.0
Settlements made	(14.9)	(17.5)
Warranties for current year acquisitions		1.4
Changes in liability of pre-existing warranties	(0.6)	(1.3)
Balance at end of period	$ 24.5	$ 36.8

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Warranties - Accrued Warranty Classified in Consolidated Balance Sheet (Detail) - USD ($) $ in Millions	Apr. 30, 2019	Oct. 31, 2018	Apr. 30, 2018	Oct. 31, 2017
Guarantees [Abstract]
Current liabilities	$ 15.2	$ 19.0
Other long-term liabilities	9.3	11.8
Total warranty liability	$ 24.5	$ 30.8	$ 36.8	$ 40.2

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Stock Repurchase Program - Additional Information (Detail) - USD ($)			3 Months Ended		6 Months Ended
	Sep. 05, 2018	Mar. 20, 2018	Apr. 30, 2019	Apr. 30, 2018	Apr. 30, 2019
Equity Class Of Treasury Stock [Line Items]
Stock repurchase program, total cost			$ 5,300,000	$ 4,800,000
Common Stock [Member]
Equity Class Of Treasury Stock [Line Items]
Stock repurchase program, authorized amount to repurchase issued and outstanding common stock	$ 50,000,000
Stock repurchase program, expiration date	Sep. 04, 2020	Mar. 19, 2020
Stock repurchase program, remaining authorized, amount			$ 41,300,000		$ 41,300,000
Stock repurchase program, number of remaining shares purchased			495,475	238,547	495,475
Stock repurchase program, total cost			$ 5,300,000		$ 5,300,000
Stock repurchase program, average price per share			$ 10.77		$ 10.77
Common Stock [Member] | Maximum [Member]
Equity Class Of Treasury Stock [Line Items]
Stock repurchase program, authorized amount to repurchase issued and outstanding common stock		$ 50,000,000

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Earnings per Share - Reconciliation of Basic Weighted-Average Common Shares Outstanding to Diluted Weighted-Average Shares Outstanding (Detail) - shares	3 Months Ended		6 Months Ended
	Apr. 30, 2019	Apr. 30, 2018	Apr. 30, 2019	Apr. 30, 2018
Earnings Per Share [Abstract]
Basic weighted-average common shares outstanding	62,957,854	64,577,469	62,994,738	64,429,854
Dilutive stock options	169,913	1,689,419	0	1,944,297
Dilutive restricted stock units	219,847	706	0	14,616
Dilutive performance stock units	0	0	0	0
Diluted weighted-average common shares outstanding	63,347,614	66,267,594	62,994,738	66,388,767

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Earnings per Share - Exclusions from Calculation of Weighted-Average Shares Outstanding Assuming Dilution Due to Anti-Dilutive Effect of Common Stock Equivalents (Detail) - shares	3 Months Ended		6 Months Ended
	Apr. 30, 2019	Apr. 30, 2018	Apr. 30, 2019	Apr. 30, 2018
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive common stock equivalents	689,284	580,497	2,757,682	453,324
Stock Options [Member]
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive common stock equivalents	172,951	77,085	988,551	77,085
Restricted Stock Units [Member]
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive common stock equivalents	497,925	503,412	1,750,723	376,239
Performance Stock Units [Member]
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive common stock equivalents	18,408	0	18,408	0

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Income Taxes - Additional Information (Detail) - USD ($) $ in Millions	2 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended
	Dec. 31, 2017	Apr. 30, 2019	Apr. 30, 2018	Apr. 30, 2019	Apr. 30, 2018	Oct. 31, 2018
Income Tax Disclosure [Abstract]
Income tax expense (benefit)		$ 2.5	$ 2.9	$ (1.9)	$ (11.0)
Pre-tax (income) loss		30.80%	27.90%	17.80%	(185.80%)
Net discrete tax expense (benefit) related to share-based compensation		$ 0.4		$ 0.8	$ (2.3)
Net discrete tax expense (benefit) realted to new tax legislation			$ 0.1
Net discrete tax benefits					(12.6)
Tax reform act, benefit related to remeasurement of net deferred tax liabilities					$ 10.4	$ 11.3
Corporate tax rate	35.00%			21.00%
Change in valuation allowance		0.0		$ 0.0
Unrecognized tax benefits		2.4		2.4		$ 2.2
Unrecognized tax benefits that would affect the annual effective income tax rate if recognized		$ 0.2		$ 0.2

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Commitments and Contingencies - Schedule of Contingent Liabilities (Detail) - USD ($) $ in Millions	Apr. 30, 2019	Oct. 31, 2018
Loss Contingencies [Line Items]
Performance, bid and specialty bonds	$ 212.8	$ 228.2
Total	226.6	241.2
Letter of Credit [Member]
Loss Contingencies [Line Items]
Open standby letters of credit	$ 13.8	$ 13.0

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Commitments and Contingencies - Additional Information (Detail) - USD ($)	6 Months Ended	12 Months Ended
	Apr. 30, 2019	Oct. 31, 2018
Loss Contingencies [Line Items]
Contingent liability under purchase agreements for future chassis inventory purchases	$ 55,000,000	$ 54,500,000
Repurchase agreement	2 years
Represents the gross value of all vehicles under repurchase agreements	$ 258,800,000	310,500,000
Maximum [Member]
Loss Contingencies [Line Items]
Estimated loss exposure under contract	$ 26,100,000	$ 25,200,000

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Business Segment Information - Additional Information (Detail)	6 Months Ended
	Apr. 30, 2019 Segment
Segment Reporting [Abstract]
Number of reportable segments	3

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Business Segment Information - Schedule of Selected Financial Information (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Apr. 30, 2019	Apr. 30, 2018	Apr. 30, 2019	Apr. 30, 2018	Oct. 31, 2018
Segment Reporting Information [Line Items]
Net sales	$ 615.0	$ 608.9	$ 1,133.7	$ 1,123.8
Depreciation and amortization	11.6	11.1	23.8	22.1
Capital expenditures	3.1	10.0	9.4	23.6
Total assets	1,413.3	1,358.7	1,413.3	1,358.7	$ 1,408.1
Fire & Emergency [Member]
Segment Reporting Information [Line Items]
Net sales	247.1	252.0	451.2	467.3
Depreciation and amortization	3.5	4.0	7.0	8.5
Capital expenditures	1.8	1.1	3.2	2.7
Total assets	627.2	613.7	627.2	613.7
Adjusted EBITDA	15.1	21.8	23.4	39.9
Commercial [Member]
Segment Reporting Information [Line Items]
Net sales	170.0	158.0	310.6	290.2
Depreciation and amortization	2.1	2.8	4.7	5.6
Capital expenditures	1.1	1.3	1.7	2.3
Total assets	322.3	288.0	322.3	288.0
Adjusted EBITDA	14.7	9.5	19.7	13.9
Recreation [Member]
Segment Reporting Information [Line Items]
Net sales	199.7	198.8	375.9	366.0
Depreciation and amortization	4.3	3.1	8.3	5.9
Capital expenditures	1.0	2.9	2.4	4.2
Total assets	356.6	337.5	356.6	337.5
Adjusted EBITDA	17.3	12.7	26.5	20.8
Corporate, Other and Elims [Member]
Segment Reporting Information [Line Items]
Net sales	(1.8)	0.1	(4.0)	0.3
Depreciation and amortization	1.7	1.2	3.8	2.1
Capital expenditures	(0.8)	4.7	2.1	14.4
Total assets	107.2	119.5	107.2	119.5
Adjusted EBITDA	$ (11.0)	$ (10.0)	$ (21.2)	$ (19.2)

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Business Segment Information - Reconciliation of Segment Adjusted EBITDA to Net Income (Loss) (Detail) - USD ($) $ in Millions	3 Months Ended				6 Months Ended
	Apr. 30, 2019	Jan. 31, 2019	Apr. 30, 2018	Jan. 31, 2018	Apr. 30, 2019	Apr. 30, 2018
Segment Reporting Information [Line Items]
Interest expense, net	$ (8.0)		$ (6.1)		$ (15.8)	$ (11.5)
(Provision) benefit for income taxes	(2.5)		(2.9)		1.9	11.0
Restructuring costs	(1.8)		(1.9)		(2.9)	(6.0)
Stock-based compensation expense					(4.8)	(3.7)
Impairment charges	(0.1)				(2.8)
Net income (loss)	5.6	$ (14.6)	7.4	$ 9.4	(9.0)	16.9
Fire & Emergency [Member]
Segment Reporting Information [Line Items]
Adjusted EBITDA	15.1		21.8		23.4	39.9
Commercial [Member]
Segment Reporting Information [Line Items]
Adjusted EBITDA	14.7		9.5		19.7	13.9
Recreation [Member]
Segment Reporting Information [Line Items]
Adjusted EBITDA	17.3		12.7		26.5	20.8
Corporate and Other [Member]
Segment Reporting Information [Line Items]
Adjusted EBITDA	(11.0)		(10.0)		(21.2)	(19.2)
Operating Segment [Member] | Fire & Emergency [Member]
Segment Reporting Information [Line Items]
Adjusted EBITDA	15.1		21.8		23.4	39.9
Operating Segment [Member] | Commercial [Member]
Segment Reporting Information [Line Items]
Adjusted EBITDA	14.7		9.5		19.7	13.9
Operating Segment [Member] | Recreation [Member]
Segment Reporting Information [Line Items]
Adjusted EBITDA	17.3		12.7		26.5	20.8
Reconciling Items [Member]
Segment Reporting Information [Line Items]
Depreciation and amortization	(11.6)		(11.1)		(23.8)	(22.1)
Interest expense, net	(8.0)		(6.1)		(15.8)	(11.5)
(Provision) benefit for income taxes	(2.5)		(2.9)		1.9	11.0
Transaction expenses			(0.5)		(0.2)	(2.1)
Sponsor expense reimbursement	(0.1)		(0.1)		(0.6)	(0.3)
Restructuring costs	(1.8)		(1.9)		(2.9)	(6.0)
Stock-based compensation expense	(3.4)		(1.9)		(4.8)	(3.7)
Non-cash purchase accounting expense						(0.7)
Legal matters	(2.4)		(0.2)		(4.5)	(0.9)
Impairment charges	(0.1)				(2.8)
Losses attributable to assets held for sale					(1.7)
Deferred purchase price payment	$ (0.6)		$ (1.9)		$ (2.2)	$ (2.2)