REV Group, Inc. designs, manufactures, and distributes specialty vehicles and related aftermarket parts and services.
The company serves a diversified customer base, primarily in the United States. The company provides customized vehicle solutions for applications, including essential needs for public services (ambulances and fire apparatus), commercial infrastructure (terminal trucks and industrial sweepers) and consumer leisure (recreational vehicles). The company’s diverse portfolio is made...
REV Group, Inc. designs, manufactures, and distributes specialty vehicles and related aftermarket parts and services.
The company serves a diversified customer base, primarily in the United States. The company provides customized vehicle solutions for applications, including essential needs for public services (ambulances and fire apparatus), commercial infrastructure (terminal trucks and industrial sweepers) and consumer leisure (recreational vehicles). The company’s diverse portfolio is made up of well-established principal vehicle brands, including many of the most recognizable names within their industry.
The specialty vehicle market is a complex and attractive market characterized by: numerous niche markets, highly customized vehicle configurations addressing unique customer applications and specialized customer bases and distribution channels (both dealer and direct).
The company’s products are sold to municipalities, government agencies, private contractors, consumers, and industrial and commercial end users. The company has a diverse customer base with its top 10 customers representing approximately 21% of its net sales in fiscal year 2024, with no single customer representing more than 5% of its net sales over the same period. The company’s diverse end markets are favorably exposed to multiple secular growth drivers such as: municipal spending, overall population growth, a growing aged population, the increasing popularity of outdoor and active lifestyles, technological advances, and the replacement of existing in-service vehicles including legislated replacements.
The company’s business model utilizes its scale to drive profitable organic and acquisitive growth. The company’s business consists primarily of design, engineering, technology application, integration, and assembly activities, which require relatively low levels of maintenance capital expenditures. Furthermore, the company’s broad presence across the specialty vehicle market and large manufacturing and distribution network are important differentiators in its potential to grow through acquisitions.
To enhance its market-leading positions, the company enhances organic growth with iterative product development and new product launches across its two segments. Product development is primarily designed to provide its customers with high-quality products that have varied and unique feature sets and product capabilities at attractive price points. In addition to product development, the company’s businesses are continuously adapting and customizing its vehicles to meet individual customers’ needs and applications. In its Recreational Vehicles segment specifically, the company’s new model design cycle follows similar timelines as the automotive industry, whereby new models and configurations are introduced or upgraded annually.
The company continues to focus on initiatives to accelerate growth. These initiatives include: reviewing its product portfolio, improving brand management, developing new products, strengthening distribution, leveraging a centralized enterprise-wide procurement strategy, growing aftermarket products, improving production processes within its facilities.
Products and Markets
The company sells new specialty vehicles which it designs, engineers and assembles in its production facilities. The company’s aftermarket business consists of parts sales and service. The majority of the company’s new vehicle sales represent the replacement of in-service vehicles which are past their useful life, with additional sales derived from fleet expansions, new customers and new product introductions.
The company’s Specialty Vehicles segment sells fire apparatus equipment under the Emergency One (E-ONE), Kovatch Mobile Equipment (KME), and Ferrara brands, and Spartan Emergency Response (Spartan ER), which consists of the Spartan Emergency Response, Smeal, Spartan Fire Chassis, and Ladder Tower brands; ambulances under the American Emergency Vehicles (AEV), Horton Emergency Vehicles (Horton), Leader Emergency Vehicles (Leader), Road Rescue and Wheeled Coach brands; and terminal trucks and sweepers under the Capacity and Laymor brands respectively. The company has 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), Type III ambulances (aluminum body mounted on a van-style chassis), pumpers (fire apparatus on a custom or commercial chassis with a water pump and water tank to extinguish fires), aerial trucks (fire apparatus with stainless steel or aluminum ladders), tanker trucks, rescues, aircraft rescue firefighting (ARFF), custom cabs & chassis, terminal trucks (specialized vehicles which move freight in warehouses, intermodal yards, distribution and fulfillment centers and ports), sweepers (three- and four-wheel versions used in road construction activities), and other vehicles. Each of the company’s 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 product type from its Specialty Vehicles segment brands.
The company’s Recreational Vehicles segment serves the recreational vehicles (RV) market through the following principal brands: American Coach, Fleetwood RV, Holiday Rambler, Renegade RV, Midwest Automotive Designs and Lance Camper. The company’s brand portfolio contains some of the longest standing and most recognized brands in the RV industry. The company’s products in the Recreational Vehicles 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 van or commercial truck chassis), Class B RVs (motorhomes built out within a van chassis and high-end luxury van conversions), and towable travel trailers and truck campers. The Recreational Vehicles segment also includes Goldshield Fiberglass, which produces a wide range of custom molded fiberglass products for the Fleetwood family of brands, other RV manufacturers, and broader industrial markets.
Markets
For fiscal year 2024, the company’s net sales within North America represented approximately 99% of its overall net sales. At the international level, the company sells through dealers and agents to end markets that utilize U.S.-style chassis and product configurations.
Specialty Vehicle Markets
Fire and ambulance products are primarily used by municipalities and private contractors to provide essential services, such as fire suppression, emergency/rescue response, disaster relief, aircraft rescue and firefighting and patient transport. Nearly all fire apparatus and ambulances are customized in some form; however, they share many common production and component attributes, such as similar manufacturing and engineering processes, raw materials (aluminum, lights, wire harnesses, paint and coatings). Demand is driven primarily by the replacement of in-service fleets, as well as by factors, such as a growing aged population and a growing overall population with longer life expectancy (driving increased patient transportation and emergency response needs), new real estate developments, urbanization and taller buildings (requiring more aerial vehicles), international airport growth (requiring Federal Aviation Administration-specified ARFF vehicles), rising municipal funding levels, and the increasing use of emergency vehicles for non-critical care transport. Local tax revenues are an important source of funding for fire and ambulance purchases for emergency departments in addition to Federal grant money and other state and locally raised funding.
Additionally, the company provides remounting services to its ambulance dealers and customers, where it remounts ambulance bodies onto new chassis, thereby extending the life of the body.
Terminal truck and sweeper products are primarily used to move freight in warehouses, intermodal yards, distribution and fulfillment centers and ports, and in road construction activities, respectively. Terminal truck demand is driven by replacement of in-service fleets, growth in trade and the increased use of intermodal freight services and warehouses. The company anticipates that ongoing growth in global trade will result in higher future intermodal freight traffic growth. Sweeper demand is also driven by replacement of in-service fleets by contractors and rental companies as well as growth in infrastructure and construction spending.
Recreational Vehicles Markets
The RV industry includes various types and configurations of both motorized and towable RVs, of which the company manufactures and sells Class A, Class B, Class C and Class Super-C motorized RVs, travel trailers & truck campers. Motorized RVs are self-contained units built on motor vehicle chassis with their own lighting, plumbing, heating, cooking, refrigeration, sewage holding and water storage facilities. Class A RVs are generally constructed on purpose-built chassis for recreation travel complete with engine and drivetrain components. The company then builds the vehicle body, and design, fabricate and install the living area and driver’s compartment of these motorized RVs. Class B RVs are built on a consumer van chassis with the entire living area contained within the van frame. Class C RVs are built on standard van chassis which include an engine, drivetrain and a finished cab section. In Class Cs it designs, fabricates, and installs the living area to connect to the driver’s compartment and the cab section. Super Class C RVs are heavy duty Class C motorhomes built on a commercial truck chassis that can be used in conjunction with other outdoor or sporting activities because of a larger towing capacity. The company also designs and manufactures a portfolio of towable travel trailers and truck campers. These trailers and campers consists of a self-contained living area with their own heating, lighting, plumbing, cooking, refrigeration, sleeping and bathroom facilities but excluding a motor vehicle chassis. These products require the RV owner to utilize a motor vehicle to pull or carry them between destinations.
Customers and End Markets
The company’s end markets include the municipal market (vehicles for essential services, such as emergency response, firefighting and patient transportation), the consumer market (vehicles for transportation and leisure needs), the industrial/commercial markets (vehicles for construction projects and global port and intermodal transportation applications), and the private contractor market (privately owned fleets that provide transportation services).
The company’s top 10 customers combined accounted for approximately 21% of its net sales for fiscal year 2024, with no customer representing more than 5% of its net sales in the same period.
In fiscal year 2024, the company’s approximate direct or indirect net sales by end market was as follows: 47% government, including municipalities, such as fire departments, hospitals and the U.S. federal government, 25% consumer, 23% industrial/commercial, and 5% private contractor.
For fiscal year 2024, approximately 99% of the company’s net sales were to customers located in North America.
Growth Strategies
The company plans to continue pursuing several strategies to grow its earnings, expand its market share and further diversify its revenue stream. The key elements of the company’s strategy are to develop innovative new customer offerings; enhance sales and distribution model; accelerate aftermarket growth; and pursue value enhancing acquisitions.
Distribution
The company distributes its brands either through its direct sales force or its well-established dealer network. Whether the company sells directly to the customer or through a dealer depends largely on the product line, the customer base and applicable regulations. The company provides its direct sales force representatives and dealers with training on the operation and specifications of its products.
As one of the leaders in each of its main markets, the company’s distribution network consists of many of the leading dealers within each segment. The company continues to grow and enhance its distribution network into underserved areas. In addition, the company evaluates export opportunities from time to time in select international markets through its direct sales force and its established international dealerships and agents.
Specialty Vehicles Segment
The company’s fire apparatus business partners with a combination of independent dealer networks and a direct sales force to sell its products in the North American market. Additionally, the company sells Spartan cab chassis to OEM manufacturers. Dealers hold a strong position in their assigned territories, providing the company with a significant competitive advantage. Brands in the fire segment participate in the Government Services Agency (GSA) Schedules Program and Defense Logistics Agency (DLA) troop support.
The company sells its ambulances through internal direct sales personnel, as well as a select group of independent dealers in North America. The company’s direct sales force is responsible for sales to key accounts that operate in multiple states or require a direct OEM relationship to service their business. Independent dealers provide full coverage of the U.S. domestic market and provide both sales and service to its customers. The company’s dealers hold strong positions in their assigned territories, providing it with a significant competitive advantage. In addition, the company participates in GSA Schedules Program, and it exports to most of the international markets that participate in this program. These include countries in the Middle East, Latin America and the Caribbean basin.
The Capacity brand utilizes its direct sales force and an extensive network of dealers in North America, along with a combination of a direct sales force, international agents and dealers to market its products worldwide.
The LayMor brand is principally marketed in both commercial and rental markets through manufacturer’s representatives and distributors who are supported by the company’s internal sales efforts with key customers, such as national equipment rental companies and government agencies. The company’s direct sales personnel work directly with national customers to ensure that LayMor equipment meets customers’ specifications and is qualified for sale throughout their national network.
The company continues to expand its distribution network into new markets. There are opportunities to grow the company’s dealer footprint to serve these markets.
Recreational Vehicles Segment
The company sells its RV products through a national independent dealer network with internal sales personnel responsible for direct distribution engagement with these dealers. RV purchases are sensitive to wholesale and retail financing, consumer confidence and disposable income, making them discretionary products. Additionally, many buyers of RVs are brand loyal, repeat purchasers who make decisions based on brand, product configuration (primarily floor plan design, features and product styling), service and price.
Research and Development (R&D)
The company’s R&D costs totaled $3.3 million for fiscal year 2024 (year ended October 31, 2024).
Suppliers and Materials
The largest component of these purchases was for vehicle chassis, representing approximately 26% of the total purchase amount. These chassis are sourced from major automotive manufacturers, including Ford, Freightliner, General Motors, Mercedes, and other original equipment manufacturers (OEMs). These OEMs provide the company with standardized, mass-produced chassis models, which it then converts for its customers under approved authorized converter agreements with the OEMs.
Intellectual Property
The company owns a portfolio of intellectual property, including patents, confidential technical information, and technological expertise in manufacturing specialty vehicles. The company also owns registered trademarks in the United States for certain trade names and important products. Due to the markets in which it operates ,its trade names are the most valuable component of its intellectual property. The company’s well-respected and widely recognized proprietary trade names include: E-ONE, KME, Ferrara, Spartan, Smeal, Ladder Tower Company, Wheeled Coach, Road Rescue, AEV, Horton, Leader, Capacity, LayMor, Fleetwood RV, Monaco, American Coach, Holiday Rambler, Renegade, Midwest Automotive Designs, Goldshield and Lance Camper.
Competition
In the Specialty Vehicles segment, the company’s competition includes Pierce Manufacturing (Oshkosh Corp.), Rosenbauer International, Demers Braun Crestline, FWD Seagrave, Life Line Emergency Vehicles, TICO, and Cargotec, among others. In the Recreational Vehicles segment, the company’s competition includes Thor Industries, Inc., Winnebago Industries, Inc., and Forest River Inc., among others.
Seasonality
In a typical year, the company’s operating results are impacted by seasonality. Historically, the slowest sales volume quarter has been the first fiscal quarter when the purchasing seasons for vehicles, such as RVs, are the lowest due to the colder weather and the relatively long time until the summer vacation season. The company’s first fiscal quarter also has fewer working days to complete and ship units due to the number of holidays and related vacation taken by employees. Sales of the company’s products have typically been higher in the second, third and fourth fiscal quarters (with the fourth fiscal quarter (year ended October 31, 2024) typically being the strongest) due to better weather, the vacation season, buying habits of RV dealers and end-users, and timing of government and municipal customer fiscal years. The company’s quarterly results of operations, cash flows, and liquidity are likely to be impacted by these seasonal patterns. Sales and earnings for other vehicles that it produces, such as essential emergency vehicles, 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.
History
The company was incorporated in 2008. The company was formerly known as Allied Specialty Vehicles, Inc. and changed its name to REV Group, Inc. in 2015.
