Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the related notes appearing elsewhere in this Annual Report on Form 10-K. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report on Form 10-K, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. You should read the “Cautionary Statement About Forward-Looking Statements” and “Risk Factors” sections of this Annual Report on Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
This discussion and analysis should be read in conjunction with the accompanying audited consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K.
Overview
REV Group companies are leading designers, manufacturers and distributors of specialty vehicles and related aftermarket parts and services. We serve a diversified customer base, primarily in North America, through our two segments. We provide 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). Our diverse portfolio is made up of well-established principal vehicle brands, including many of the most recognizable names within their industry.
Proposed Merger
On October 29, 2025, The Company entered into the Merger Agreement with Terex, Merger Sub 1 and Merger Sub 2. The Proposed Merger intends to form a leading specialty equipment manufacturer in emergency, waste, utilities, environmental and materials processing equipment with attractive end markets characterized by low cyclicality, resilient demand and long-term growth profiles.
The Merger Agreement provides that, among other things and subject to the terms and conditions of the Merger Agreement, (i) the First Merger will occur, with REV continuing as the surviving corporation in the First Merger and (ii) immediately following the First Merger, the Second Merger will occur, with Merger Sub 2 continuing as the surviving company in the Second Merger as a wholly owned subsidiary of Terex. At the Effective Time, each issued and outstanding share of the Company's common stock (other than certain excluded shares) will be converted into the right to receive (i) 0.9809 shares of common stock, par value $0.01 per share, of Terex, and (ii) $8.71 in cash (without interest), in each case subject to the terms and conditions of the Merger Agreement.
If the Proposed Merger is completed, our common stock will cease to be listed on the New York Stock Exchange and will be deregistered. The Proposed Merger is subject to approval by both our and Terex's shareholders, antitrust and regulatory approvals, and other customary closing conditions.
The preliminary Form S-4 related to the Proposed Merger with Terex was filed with the SEC on December 8, 2025.
Segments
Specialty Vehicles – Our Specialty Vehicles segment sells (i) fire apparatus equipment under the E-ONE, KME, and Ferrara brands, and Spartan ER, which consists of the Spartan Emergency Response, Smeal, Spartan Fire Chassis, and Ladder Tower brands, (ii) ambulances under the AEV, Horton, Leader, Road Rescue and Wheeled Coach brands, and (iii) terminal trucks and sweepers under the Capacity and Laymor brands, respectively. We believe we 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), 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), and sweepers (three- and four-wheel versions used in road construction activities). 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 product type from our Specialty Vehicles brands.
Recreational Vehicles – Our Recreational Vehicles segment serves the RV market through the following principal brands: American Coach, Fleetwood RV, Holiday Rambler, Renegade RV and Midwest Automotive Designs. We believe our brand portfolio contains some of the longest standing, most recognized brands in the RV industry. Our 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), and Class B RVs (motorhomes built out within a van chassis and high-end luxury van conversions). 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.
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, municipal tax receipts, 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, we are susceptible to supply chain disruptions resulting from the impact of tariffs and global macro-economic factors which can have a dramatic effect, either directly or indirectly, on the availability, lead-times and costs associated with raw materials and parts.
RV purchases are discretionary in nature and therefore sensitive to the cost and availability of financing, consumer confidence, unemployment levels, levels of disposable income and changing levels of consumer home equity, among other factors. RV 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 Recreational Vehicles segment, the Specialty Vehicles segment is also impacted by the overall economic environment. For example, local tax revenues are an important source of funding for fire and ambulance purchases from emergency response departments. Volatility in tax revenues or availability of funds via budgetary appropriation can have a negative impact on the demand for these products. Additionally, these products 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.
Seasonality
In a typical year, our 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. Our 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 our products have typically been higher in the second, 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, and timing of government and municipal customer fiscal years. 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, 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 and Divestitures
We actively evaluate opportunities to improve and expand our business through targeted acquisitions that are consistent with our strategy. We also may dispose of certain components of our business that no longer fit within our overall strategy.
In the first quarter of fiscal year 2024, we sold Collins Bus Corporation (“Collins”), a wholly owned subsidiary of Collins Industries, Inc. (“Collins Industries”), an indirect wholly-owned subsidiary of the Company. Refer to Note 6, Divestiture Activities, of the Notes to the Consolidated Financial Statements for further details. During the first quarter of fiscal year 2024, we announced the discontinuation of manufacturing operations at our ElDorado National (California) (“ENC”) facility. Subsequently, in the fourth quarter of fiscal year 2024, we sold ENC. Collins and ENC are collectively referred to as the “Bus Manufacturing Businesses”.
The Company also sold certain assets of our Fire Regional Technical Center (“Fire RTC”) business in fiscal year 2024 and the stock of Lance Camper Mfg. Corp. (“Lance”) and Avery Transport Inc. (“Avery”) in fiscal year 2025; however, these business dispositions did not represent a material percentage of total revenue or earnings.
Results of Operations
The following table compares results for fiscal years 2025, 2024 and 2023
Fiscal Year Ended
(in millions except per share data)
October 31,
October 31,
October 31,
Net sales
Gross profit
Selling, general and administrative
Restructuring
Impairment charges
Loss (Gain) on sale of business
Provision for income taxes
Net income
Net income per common share
Basic
Diluted
Dividends declared per common share
Adjusted EBITDA
Adjusted Net Income
Net Sales
Fiscal Year Ended
(in millions)
October 31,
Change
October 31,
Change
October 31,
Net sales
Net Sales : Consolidated net sales increased $83.3 million in fiscal year 2025 compared to the prior year. Excluding the impact of the Bus Manufacturing Businesses, which were divested in fiscal year 2024, net sales increased $246.8 million, or 11.1% compared to the prior year. The increase in net sales, excluding the impact of the Bus Manufacturing Businesses, was due to higher net sales in the Specialty Vehicles segment, partially offset by lower net sales in the Recreational Vehicles segment. The increase within the Specialty Vehicles segment, excluding the impact of the Bus Manufacturing Businesses, was primarily due to increased shipments of fire apparatus and ambulance units, a favorable mix of ambulance units, and price realization. The decrease within the Recreational Vehicles segment was primarily due to lower unit shipments, partially offset by favorable product mix in certain categories and pricing actions.
Consolidated net sales decreased $257.8 million in fiscal year 2024 compared to the prior year. Excluding the impact of Collins, which was divested on January 26, 2024, net sales decreased $110.8 million, or 4.4% compared to the prior year. The decrease in net sales, excluding the impact of Collins, is primarily due to lower net sales in the Recreational Vehicles segment, partially offset by higher net sales within the Specialty Vehicles segment. The decrease within the Recreational Vehicles segment was primarily due to lower unit shipments and increased retail assistance. The increase within the Specialty Vehicles segment, excluding the impact of the Collins divestiture, was primarily due to price realization and increased shipments of fire apparatus and ambulance units, partially offset by lower shipments of terminal trucks.
Gross Profit
Fiscal Year Ended
(in millions)
October 31,
Change
October 31,
Change
October 31,
Gross profit
% of net sales
Gross Profit : Consolidated gross profit increased $72.5 million in fiscal year 2025 compared to the prior year. Excluding the impact of the Bus Manufacturing Businesses, gross profit increased $87.1 million, or 30.8% compared to the prior year quarter. The increase in gross profit, excluding the impact of the Bus Manufacturing Businesses, was primarily attributable to higher net sales, lower material costs, and benefits realized from programs put in place to increase operating efficiencies within the Specialty Vehicles segment.
Consolidated gross profit decreased $18.8 million in fiscal year 2024 compared to the prior year. Excluding the impact of the Collins divestiture, gross profit increased $18.5 million, or 6.6% compared to the prior year. The increase in gross profit, excluding the impact of Collins, was primarily attributable to higher net sales and gross margin in the Specialty Vehicles segment, partially offset by lower net sales and gross margin within the Recreational Vehicles segment.
Selling, General and Administrative
Fiscal Year Ended
(in millions)
October 31,
Change
October 31,
Change
October 31,
Selling, general and administrative
Selling, General and Administrative : Consolidated selling, general and administrative (“SG&A”) costs decreased $3.3 million in fiscal year 2025 compared to the prior year primarily due to lower professional fees and a decrease in SG&A attributable to the Bus Manufacturing Businesses, partially offset by higher legal and incentive compensation costs and transaction costs related to the Proposed Merger.
Consolidated selling, general and administrative (“SG&A”) costs decreased $36.6 million in fiscal year 2024 compared to the prior year primarily due to the non-recurrence of legal costs associated with the legal case described in Note 16, Commitments and Contingencies of the Notes to the Consolidated Financial Statements, lower personnel and incentive compensation costs, and a decrease in SG&A attributable to Collins, partially offset by higher transaction expenses related to divestiture and capital market transactions.
Restructuring
Fiscal Year Ended
(in millions)
October 31,
Change
October 31,
Change
October 31,
Restructuring
Restructuring : Consolidated restructuring costs for fiscal year 2024 were associated with the discontinuation of manufacturing operations at the Company's ENC facility, as announced in the first quarter of fiscal year 2024. There were no restructuring costs for fiscal year 2025.
Impairment Charges
Fiscal Year Ended
(in millions)
October 31,
Change
October 31,
Change
October 31,
Impairment charges
Impairment Charges : Consolidated impairment charges were $14.5 million for fiscal year 2024. The impairment charges were primarily related to the impairment of an indefinite-lived trade name and certain property, plant, and equipment due to the discontinuation of manufacturing operations at the Company's ENC facility, and the impairment of an indefinite-lived trade name within the Recreational Vehicles segment. There were no impairment charges for fiscal year 2025.
Loss (Gain) on sale of business
Fiscal Year Ended
(in millions)
October 31,
Change
October 31,
Change
October 31,
Loss (Gain) on sale of business
Loss (Gain) on Sale of Business : The loss on sale of business was $39.6 million for fiscal year 2025 and was due to the sale of the Lance and Avery businesses.
The gain on sale of business for fiscal year 2024 was due to the sale of the Bus Manufacturing Businesses and Fire RTC.
The loss on sale of business for fiscal year 2023 was due to the sale of non-core businesses within the Specialty Vehicles segment.
Provision for Income Taxes
Fiscal Year Ended
(in millions)
October 31,
Change
October 31,
Change
October 31,
Provision for income taxes
Provision for income taxes: Consolidated income tax provision was $22.3 million or 19.0% of pretax income for fiscal year 2025. The fiscal 2025 tax provision was favorably impacted by a tax loss on the sale of the Lance and Avery businesses and incentives for U.S. manufacturing and research and was unfavorably impacted by nondeductible expenses and additional unrecognized tax benefits recorded during the year.
Consolidated income tax provision was $82.8 million or 24.3% of pretax income for fiscal year 2024. The fiscal year 2024 tax provision was favorably impacted by incentives for U.S. research and stock-based compensation tax deductions and was unfavorably impacted by nondeductible expenses.
Consolidated income tax provision was $12.9 million or 22.2% of pretax income for fiscal year 2023. The fiscal year 2023 tax provision was favorably impacted by incentives for U.S. research and was unfavorably impacted by additional unrecognized tax benefits recorded during the year.
Net income
Fiscal Year Ended
(in millions)
October 31,
Change
October 31,
Change
October 31,
Net income
Net income: Consolidated net income decreased $162.4 million in fiscal year 2025 compared to the prior year primarily due to the factors detailed above.
Consolidated net income increased $212.3 million in fiscal year 2024 compared to the prior year primarily due to the factors detailed above.
Adjusted EBITDA
Fiscal Year Ended
(in millions)
October 31,
Change
October 31,
Change
October 31,
Adjusted EBITDA
Consolidated Adjusted EBITDA increased $66.7 million in fiscal year 2025 compared to the prior year. Excluding the impact of the Bus Manufacturing Businesses, consolidated Adjusted EBITDA increased $84.3 million, or 58.1% compared to the prior year quarter. The increase was primarily due to higher contribution from the Specialty Vehicles segment.
Consolidated Adjusted EBITDA increased $10.0 million in fiscal year 2024 compared to the prior year. Excluding the impact of the Collins divestiture, Adjusted EBITDA increased $42.8 million, or 35.7%, compared to the prior year. This increase is primarily due to an increase in Adjusted EBITDA in the Specialty Vehicles segment, partially offset by a decrease in Adjusted EBITDA in the Recreational Vehicles segment.
Refer to the “Adjusted EBITDA and Adjusted Net Income” tables and related footnotes below for a reconciliation of Net Income to Adjusted EBITDA.
Adjusted Net Income
Fiscal Year Ended
(in millions)
October 31,
Change
October 31,
Change
October 31,
Adjusted Net Income
Refer to the “Adjusted EBITDA and Adjusted Net Income” tables and related footnotes below for a reconciliation of Net Income to Adjusted Net Income.
Segment Information
Specialty Vehicles Segment
Fiscal Year Ended
(in millions)
October 31,
Change
October 31,
Change
October 31,
Net sales
Adjusted EBITDA
Adjusted EBITDA % of net sales
Net Sales : Specialty Vehicles segment net sales increased $88.4 million in fiscal year 2025 compared to the prior year. Excluding the impact of the Bus Manufacturing Businesses, net sales increased $251.9 million, or 16.1% compared to the prior year quarter. The increase in net sales was primarily due to increased shipments of fire apparatus and ambulance units, a favorable mix of ambulance units, and price realization.
Specialty Vehicles segment net sales decreased $1.6 million in fiscal year 2024 compared to the prior year. Excluding the impact of the Collins divestiture, segment net sales increased $145.4 million, or 9.2% compared to the prior year. The increase in net sales was primarily due to price realization and increased shipments of fire apparatus and ambulance units, partially offset by lower shipments of terminal trucks.
Adjusted EBITDA : Specialty Vehicles segment Adjusted EBITDA increased $72.1 million in fiscal year 2025 compared to the prior year. Excluding the impact of the Bus Manufacturing Businesses, Adjusted EBITDA increased $89.7 million, or 65.5%. The increase was primarily due to increased shipments and a favorable mix of ambulance units and price realization, partially offset by inflationary pressures.
Specialty Vehicles segment Adjusted EBITDA increased $59.7 million in fiscal year 2024 compared to the prior year. Excluding the impact of the Collins divestiture, segment Adjusted EBITDA increased $92.5 million, or 149.2% compared to the prior year. The increase was primarily related to price realization, a favorable mix of fire apparatus, and increased shipments of fire apparatus and ambulance units, partially offset by inflationary pressures and lower shipments of terminal trucks.
Recreational Vehicles Segment
Fiscal Year Ended
(in millions)
October 31,
Change
October 31,
Change
October 31,
Net sales
Adjusted EBITDA
Adjusted EBITDA % of net sales
Net Sales : Recreational Vehicles segment net sales decreased $5.4 million in fiscal year 2025 compared to the prior year primarily due to lower unit shipments and increased retail assistance in certain categories, partially offset by favorable product mix in certain categories and pricing actions.
Recreational Vehicles segment net sales decreased $257.7 million in fiscal year 2024 compared to the prior year primarily due to decreased unit shipments and increased retail assistance.
Adjusted EBITDA : Recreational Vehicles segment Adjusted EBITDA decreased $4.0 million in fiscal year 2024 compared to the prior year primarily due to inflationary pressures, including tariff impacts, lower unit shipments, and increased retail assistance on certain models, partially offset by pricing actions and favorable category mix.
Recreational Vehicles segment Adjusted EBITDA decreased $49.8 million in fiscal year 2024 compared to the prior year primarily due to lower unit shipments, increased retail assistance, and inflationary pressures, partially offset by cost reduction actions.
Backlog
Backlog represents orders received from dealers or directly from end customers. The following table presents a summary of our backlog by segment:
Increase (Decrease)
($ in millions)
October 31,
October 31,
Specialty Vehicles
Recreational Vehicles
Total Backlog
Orders from our dealers and end customers are evidenced by a contract or firm purchase order or, in the case of the Recreational Vehicles segment and certain orders in our Specialty Vehicles segment, a reserved production slot. These orders are reported in our backlog at the aggregate selling prices, net of discounts or allowances. Orders included in the Recreational Vehicles segment backlog and certain orders within the Specialty Vehicles segment backlog generally can be cancelled or postponed at the option of the dealer at any time without penalty. As a result, this backlog may not necessarily be an accurate measure of future sales.
At the end of fiscal year 2025, our backlog was $4,635.2 million, compared to $4,471.3 million at the end of fiscal year 2024. The increase in consolidated backlog was due to an increase within the Specialty Vehicles segment, partially offset by a decrease within the Recreational Vehicles segment. The increase in Specialty Vehicles segment backlog was primarily the result of continued demand and order intake for fire apparatus and ambulance units along with pricing actions, partially offset by increased production and shipments of fire apparatus and ambulance units. The decrease in Recreational Vehicles segment backlog was primarily the result of lower order intake in certain product categories.
Liquidity and Capital Resources
General
Our primary requirements for liquidity and capital are working capital, the improvement and expansion of existing manufacturing facilities, general corporate needs and debt service payments. Historically, these cash requirements have been met through cash provided by operating activities and borrowings under our asset-based lending (“ABL”) credit facility.
We believe that our sources of liquidity and capital will be sufficient to finance our continued operations and growth strategy. However, we cannot assure that cash provided by operating activities and borrowings under the current revolving credit facility (the “Amended 2021 ABL Facility” or “Amended 2021 ABL Agreement”) 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 Amended 2021 ABL Facility is 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 may involve higher overall interest rates. We are also subject to certain limitations on obtaining additional financing under the Merger Agreement. 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 fiscal years 2025, 2024 and 2023:
Fiscal Years Ended
(in millions)
October 31,
October 31,
October 31,
Net cash provided by operating activities
Net cash (used in) provided by investing activities
Net cash used in financing activities
Net increase in cash and cash equivalents
Net Cash Provided by Operating Activities
Net cash provided by operating activities for fiscal year 2025 was $241.1 million, compared to $53.4 million for fiscal year 2024. The increase in cash from operating activities in fiscal year 2025 compared to the prior year was primarily related to higher cash net income generated during the period, disciplined inventory management, lower income tax payments, and higher receipts of customer advances, partially offset by higher accounts receivable driven by higher sales at the end of the period.
Net cash provided by operating activities for fiscal year 2024 was $53.4 million, compared to $126.5 million for fiscal year 2023. The decrease in cash from operating activities in fiscal year 2024 compared to the prior year was primarily related to higher income tax payments, including those associated with the sale of the Bus Manufacturing Businesses, lower receipts of customer advances, and higher accounts payable payments, partially offset by higher collections of accounts receivable and lower inventory purchases.
Net Cash (Used in) Provided by Investing Activities
Net cash used in investing activities for fiscal year 2025 was $50.3 million, compared to $348.5 million net cash provided by investing activities for fiscal year 2024. The decrease in net cash from investing activities was related to the non-recurrence of cash provided by the sale of the Bus Manufacturing Businesses and Fire RTC in 2024, and an increase in spending related to capital expenditures.
Net cash provided by investing activities for fiscal year 2024 was $348.5 million, compared to $29.9 million net cash used in investing activities for fiscal year 2023. The increase in net cash provided by investing activities was related to the cash received in connection with the sale of the Bus Manufacturing Businesses and Fire RTC.
Net Cash Used in Financing Activities
Net cash used in financing activities for fiscal year 2025 was $180.7 million, compared to $398.6 million for fiscal year 2024. The decrease in net cash used in financing activities was primarily due to lower dividends payments and a decrease in share repurchases.
Net cash used in financing activities for fiscal year 2024 was $398.6 million, compared to $95.7 million for fiscal year 2023. The increase in net cash used in financing activities was primarily due to higher dividends payments and share repurchases of $126.1 million.
Dividends
During fiscal year 2025 we paid a quarterly cash dividend at the rate of $0.06 per share on our common stock. During fiscal years 2024 and 2023, we paid a quarterly cash dividend at the rate of $0.05 per share on our common stock. During fiscal year 2024, we also paid a special cash dividend of $3.00 per share, or a total of $178.1 million, on our common stock.
Our dividend policy has certain risks and limitations, particularly with respect to liquidity. The dividend payment is at the discretion of our Board of Directors, and we may not pay dividends according to our policy, or at all. We cannot assure that we will have sufficient funds to pay dividends on our common stock in the future and we are also subject to certain limitations on paying dividends under the Merger Agreement. As such, there can be no assurance that future dividends will be paid.
Stock Repurchase Program
On June 1, 2023, the Company’s Board of Directors approved a new share repurchase program that allowed the repurchase of up to $175.0 million of the Company’s outstanding common stock (the “2023 Repurchase Program”). The 2023 Repurchase Program replaced the Company's prior share repurchase program. The 2023 Repurchase Program would have expired 24 months after the approval date and gave management flexibility to determine conditions under which the shares could be purchased, subject to certain limitations. During fiscal year 2023, the Company did not repurchase any shares under the 2023 Repurchase Program or the Company's prior share repurchase program. During fiscal year 2024, the Company repurchased and retired 8,000,000 shares under the 2023 Repurchase Program at a total cost of $126.1 million and at a price of approximately $15.76 per share. The Company incurred approximately $3.6 million in additional fees and excise taxes associated with the repurchase, which has been included within the total cost of the share repurchase and recorded directly within equity.
On December 5, 2024, the Company’s Board of Directors authorized the Company to repurchase up to $250.0 million of the Company’s outstanding common stock (the “2024 Repurchase Program”). The 2024 Repurchase Program replaced the 2023 Repurchase Program. The 2024 Repurchase Program expires 24 months after the authorization date and gives management flexibility to determine the conditions under which shares may be purchased from time to time through a variety of methods, including in privately negotiated or open market transactions, such as pursuant to a trading plan in accordance with Rule 10b5-1 and Rule 10b-18 of the Exchange Act or a combination of methods. The 2024 Repurchase Program does not obligate the Company to acquire any specific number of shares and it can be suspended or discontinued at any time without notice. We are subject to certain limitations on our ability to repurchase shares of the Company’s common stock under the Merger Agreement. During the year ended October 31, 2025, the Company repurchased and retired 3,456,979 shares under the 2024 Share Repurchase Program at a cost of $107.6 million and at an average price of approximately $31.10 per share, excluding commissions, fees and excise taxes. As of October 31, 2025, the approximate dollar value of shares that may yet be purchased under the 2024 Repurchase program is $142.4 million.
ABL Facility
On February 20, 2025, the Company entered into a third amendment to its then existing ABL agreement (the “2021 ABL Agreement” or the “2021 ABL Facility”), hereafter referred to as the “Amended 2021 ABL Agreement” or the “Amended 2021 ABL Facility”. The Amended 2021 ABL Facility provides for revolving loans and letters of credit in an aggregate amount of up to $450.0 million. The total credit facility is subject to a $45.0 million sublimit for swing line loans and a $35.0 million sublimit for letters of credit (plus up to an additional $20.0 million of letters of credit at issuing bank’s discretion), along with certain borrowing base and other customary restrictions as defined in the Amended 2021 ABL Agreement. The Amended 2021 ABL Agreement allows for incremental facilities 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 facilities are subject to receiving additional commitments from lenders and certain other customary conditions. Subject to certain conditions and limitations set forth in the Amended 2021 ABL Agreement, the Company is also permitted to enter into an additional secured term loan credit facility with financial institutions acceptable to the administrative agent. The debt issuance costs capitalized in connection with the Amended 2021 ABL Facility less accumulated amortization are included in Other long-term assets in the Company’s Consolidated Balance Sheets. The debt issuance costs are amortized over the life of the debt on a straight-line basis. The Amended 2021 ABL Facility matures on February 20, 2030. The Company may prepay principal, in whole or in part, at any time without penalty.
The Company would become subject to compliance with a 1.0 to 1.0 minimum fixed charge coverage ratio financial covenant under the Amended 2021 ABL Agreement if the Company’s borrowing base availability falls below the greater of $35.0 million or 12.5% of the borrowing base. As of October 31, 2025, the Company’s outstanding debt under the Amended 2021 ABL Facility was $40.0 million, and the Company’s availability under the Amended 2021 ABL Facility was $307.6 million.
Refer to Note 9, Long-Term Debt, of the Notes to the Consolidated Financial Statements for further details.
Contractual Obligations
Significant contractual commitments at October 31, 2025 are expected to affect our cash flows in future periods as set forth in the table below.
(in millions)
Thereafter
Total
Debt(a)
Interest(b)
Operating leases
Purchasing commitments(c)
Total commitments
Includes estimated principal payments due under the Amended 2021 ABL Facility as of October 31, 2025.
Based on interest rates in effect and outstanding principal balance as of October 31, 2025.
Includes purchase commitments for certain raw materials and chassis that are either non-cancellable or cancellable with significant penalty as of October 31, 2025.
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. Other than the items noted in Note 16, Commitments and Contingencies, to our 2025 audited consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K, we do not have any material off-balance sheet arrangements.
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 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.
We believe Adjusted EBITDA and Adjusted Net Income are useful to investors because these performance measures are used by our management and our Board of Directors for measuring and reporting our financial performance and as a measurement in incentive compensation for management. 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 our 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.
To determine Adjusted EBITDA, we adjust Net Income for the following items: non-cash depreciation and amortization, interest expense, income taxes and other items as described below. Stock-based compensation expense and, for periods prior to the exit of our former Sponsor, sponsor expense reimbursement are excluded from both Adjusted Net Income and Adjusted EBITDA because they are expenses 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, which are determined to be those that in management’s judgment are not indicative of our ongoing operating performance and 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 and Adjusted Net Income have limitations as analytical tools. They are not presentations made in accordance with U.S. GAAP, are not 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 U.S. GAAP. The most directly comparable U.S. GAAP measure to Adjusted EBITDA and Adjusted Net Income is Net Income for the relevant period. 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 U.S. 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 to Adjusted EBITDA for the periods presented:
Fiscal Year Ended
(in millions)
October 31,
October 31,
October 31,
Net income
Depreciation and amortization
Interest expense, net
Provision for income taxes
EBITDA
Transaction expenses(a)
Sponsor expense reimbursement(b)
Restructuring costs(c)
Restructuring related charges(d)
Impairment charges(e)
Stock-based compensation expense(f)
Legal and related matters(g)
Net (gain) loss on sale of business and assets(h)
Other items (i)
Adjusted EBITDA
The following table reconciles Net income to Adjusted Net Income for the periods presented:
Fiscal Year Ended
(in millions)
October 31,
October 31,
October 31,
Net income
Amortization of intangible assets
Transaction expenses(a)
Sponsor expense reimbursement(b)
Restructuring costs(c)
Restructuring related charges(d)
Impairment charges(e)
Stock-based compensation expense(f)
Legal and related matters(g)
Net (gain) loss on sale of business and assets(h)
Other items(i)
Income tax effect of adjustments(j)
Adjusted Net Income
Reflects costs incurred in connection with business acquisitions, dispositions, and capital market transactions. Transaction expenses for fiscal year 2025 include costs incurred in connection with the sale of Lance and Avery and the Proposed Merger which consists primarily of legal, due diligence, and investment banking expenses. Transaction expenses for fiscal year 2024 include costs incurred in connection with the Offerings and expenses that were incurred in connection with the sale of the Bus Manufacturing Businesses and Fire RTC, which consist primarily of success bonuses and legal and accounting expenses.
Reflects the reimbursement of expenses to our former Sponsor.
Fiscal year 2024 reflects restructuring costs incurred in connection with the discontinuation of manufacturing operations at the Company’s ENC facility.
Reflects costs that are directly attributable to restructuring activities that do not meet the definition of, or qualify as, restructuring costs under ASC 420, Exit or Disposal Cost Obligations. Restructuring related charges for fiscal year 2024, which consist primarily of losses on inventory for next generation propulsion products that were abandoned in connection with the
discontinuation of manufacturing operations at the Company’s ENC facility. Restructuring related charges for fiscal year 2023 relates to costs associated with a reduction in force impacting corporate employees.
The impairment charges for fiscal year 2024 were primarily related to the impairment of an indefinite-lived trade name and certain property, plant, and equipment due to the discontinuation of manufacturing operations at the Company's ENC facility, and the impairment of an indefinite-lived trade name within the Recreational Vehicles segment.
Reflects expenses associated with the vesting and modifications of equity awards, including employer payroll taxes, net of forfeitures.
Reflects legal fees and other costs incurred in relation to legal matters that are outside the normal course of business. Fiscal year 2023 includes fees and costs to settle claims brought through the acquisition of certain assets as described in Note 16.
Fiscal year 2025 reflects the loss on sale of Lance and Avery within the Recreational Vehicles segment, partially offset by the gain on sale of a building in the Recreational Vehicles segment. Fiscal year 2024 reflects the pre-tax gain recognized in connection with the sale of the Bus Manufacturing Businesses and Fire RTC. Fiscal year 2023 includes the loss on the sale of a business within the Specialty Vehicles segment, which is fully offset by a gain on the sale of certain assets also within the Specialty Vehicles segment.
Fiscal year 2025 reflects the penalty amount paid to early terminate a lease within the Recreational Vehicles segment. Fiscal year 2023 reflects a loss on the disposition of a company investment, and other insignificant adjusting items.
Income tax effect of adjustments using estimated tax rates.
Critical Accounting Policies and Estimates
Our significant accounting policies are described in Note 2 to our 2025 audited consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K. The preparation of consolidated financial statements in conformity with U.S. GAAP requires us to make estimates, assumptions and judgments that affect amounts of assets and liabilities reported in our consolidated financial statements, the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and reported amounts of revenues and expenses during the year. We believe our estimates and assumptions are reasonable; however, future results could differ from those estimates. We consider the following accounting estimates to be the most critical in understanding the judgments that are involved in preparing our consolidated financial statements.
Goodwill and Indefinite-Lived Intangible Assets
Goodwill and indefinite-lived intangible assets, consisting of trade names, are not amortized. However, the Company reviews goodwill and indefinite-lived intangible assets for impairment at least annually or more often if an event occurs or circumstances change which indicates that its carrying amount may not exceed its fair value. The annual impairment review is performed as of the first day of the fourth quarter of each fiscal year based upon information and estimates available at that time. To perform the impairment testing, the Company may first assess qualitative factors to determine whether it is more likely than not that the fair values of the Company’s reporting units or indefinite-lived intangible assets are less than their carrying amounts as a basis for determining whether or not to perform the quantitative impairment test. Qualitative testing includes the evaluation of economic conditions, financial performance and other factors such as key events when they occur. The Company then estimates the fair value of each reporting unit and each indefinite-lived intangible asset not meeting the qualitative criteria and compares their fair values to their carrying values.
Under the quantitative method, the fair value of each reporting unit of the Company is determined by using the income approach and/or the market approach. The income approach involves discounting management’s projections of future interim and terminal cash flows to a present value at a risk-adjusted discount rate which corresponds with the Company’s and market-participant weighted-average cost of capital (“WACC”). Key assumptions used in the income approach include future sales growth, gross margin and operating expenses trends, depreciation and amortization expense, taxes, capital expenditures and changes in working capital. Projected future cash flows are based on income forecasts and management’s knowledge of the current operating environment and expectations for the Company on a going-forward basis. The WACC represents a blended cost of equity and debt capital applicable to the Company based on observed market participant rates of return for a group of comparable public companies in the industry, utilizes market participant capital structure assumptions by reference to the industry’s average debt to total invested capital ratios, and is also being adjusted for relative risk premiums specific to each reporting unit tested. The terminal residual value is based upon the projected cash flow for the final projected year and is calculated using a capitalization rate based on estimates of growth of the net cash flows based on the Company’s estimate of sustainable growth for each financial reporting unit. The inputs and assumptions used in the determination of fair value are considered Level 3 inputs within the fair value hierarchy, as further described in Note 2, Basis of Presentation and Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements.
Under the market approach, the Company utilizes multiples of revenue and earnings from other publicly traded companies with comparable operations, to determine the fair value of the reporting unit. The inputs and assumptions used in the determination of fair value are considered Level 3 inputs within the fair value hierarchy, as further described in Note 2, Basis of Presentation and Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements.
If the fair value of any reporting unit, as calculated using the income approach and/or the market approach, when applicable, is less than its carrying value, an impairment charge is recorded for any excess of the reporting unit’s carrying value over its fair value, not to exceed the carrying amount of goodwill of that reporting unit.
When determining the fair value of indefinite-lived trade names, the Company uses the relief-from-royalty (“RFR”) method, within the income approach. The RFR method assumes that an intangible asset is valuable because the owner of the asset avoids the cost of licensing that asset. Under the RFR method, an estimate is made as to the appropriate royalty income that would be negotiated in an arm’s-length transaction if the subject intangible asset were licensed from an independent third party. The royalty savings are then calculated by multiplying a royalty rate, expressed as a percentage of revenues, by a determined applicable level of future revenues provided per each trade name as estimated by the Company. The royalty rate is based on research of industry and market data related to transactions involving the licensing of comparable intangible assets. The resulting future royalty savings are then discounted to their present value equivalent utilizing market participant rates of return, adjusted for relative risk premiums specific to each trade name as well as the reporting unit housing it. In considering the fair value of trade names, the Company also considers relative age, consistent use, quality, expansion possibilities, relative profitability, relative market potential, and how a market participant may employ these intangible assets from a financial and economic point of view.
During fiscal year 2025, the Company performed its annual goodwill test using a quantitative approach and did not identify any goodwill impairments. The goodwill balances at the Specialty Vehicles segment and Recreational Vehicles segments are $95.2 million and $42.5 million, respectively.
During fiscal year 2025, the Company performed its annual indefinite-lived trade name test using both a quantitative and qualitative approach and did not identify any impairments.
Warranty
Provisions for estimated warranty and other related costs are recorded in cost of sales and are periodically adjusted to reflect actual experience. The amount of accrued warranty liability reflects management’s best estimate of the expected future cost of honoring our obligations under our limited warranty plans. The costs of fulfilling our warranty obligations principally involve replacement parts, labor and sometimes travel for any field retrofit or recall campaigns. Our estimates are based on historical experience, the number of units involved and the cost per claim. A significant increase in replacement parts, labor and travel could have a material adverse impact on our operating results. If our warranty reserve were to change by 5%, it would not have a material impact on our gross profit for the fiscal year ended October 31, 2025.
Recent Accounting Pronouncements
Refer to Note 2 to our 2025 audited consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K for a discussion of the impact of new accounting standards on the Company’s consolidated financial statements.
Item 7A. Quantitative and Qualitati ve Disclosures About Market Risk.
We are exposed to market risk based on fluctuations in interest rates and certain commodity market prices for key raw material inputs. Changes in these factors could cause fluctuations in the results of our operations and cash flows.
Interest Rate Risk
We are exposed to market risk based on fluctuations in market interest rates. Our exposure to fluctuating interest rate risk consists of floating rate debt instruments that are indexed to short-term benchmark interest rates. As of October 31, 2025, we had $40.0 million of principal outstanding under our Amended 2021 ABL Facility at an average rate of 5.6% per annum. On an annualized basis, a 100-basis point increase in our floating interest rates under the Amended 2021 ABL Facility would have increased interest expense by $0.4 million. A similar 100-basis point decrease in our floating interest rates would have decreased interest expense by $0.4 million.
Commodity Price Risk
We are a purchaser of certain commodities, including aluminum and raw steel. In addition, we are a purchaser of components and parts containing various commodities, including aluminum, fiberglass, copper and steel, which are integrated into our end products. We generally buy these commodities and components based on fixed market prices that are established with the vendor as part of the purchase process. Currently, purchase contracts generally do not have an indexed price escalation formula to account for economic fluctuations between the contract date and the delivery date. Moving forward, we may include Raw Material Index movement protocols into supplier pricing agreements where appropriate. We are typically unable to pass along increased costs due to economic fluctuations to our customers but have implemented general price increases for our products to offset commodity price increases. We rarely use commodity financial instruments to hedge commodity prices. We sometimes fix our prices for certain materials over an agreed upon amount of time between three months to 24 months through contracts with our vendors.
Item 8. Financial Statemen ts and Supplementary Data.
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of REV Group, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of REV Group, Inc. and its subsidiaries (the Company) as of October 31, 2025 and 2024, the related consolidated statements of income and comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended October 31, 2025, and the related notes to the consolidated financial statements (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of October 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended October 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of October 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013, and our report dated December 10, 2025, expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Valuation of Reporting Units for Goodwill Testing
As described in Notes 2 and 8 to the consolidated financial statements, as of October 31, 2025, the Company’s consolidated goodwill balance was $137.7 million. The Company tests for impairment of goodwill annually as of the first day of the fourth quarter, or more frequently if events or circumstances indicate a potential impairment. To evaluate goodwill for potential impairment, management first assesses qualitatively whether it is necessary to perform a quantitative test. For certain reporting units, management determined that a quantitative test was appropriate. The Company determines the fair value of these reporting units using the market approach with a reconciliation to the market capitalization of the Company. To quantitatively measure goodwill impairment, the Company compares the fair value of each reporting unit to its carrying value. When determining the fair value of each reporting unit management makes significant estimates and assumptions, including projected revenue and earnings as well as comparable market data.
Given the significant estimates and assumptions management makes to determine the fair value of the reporting units, we identified management’s assumptions related to projected revenue, earnings and comparable market data utilized in the estimation of fair value of the reporting units as a critical audit matter. Auditing the reasonableness of management’s estimates and assumptions required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.
Our audit procedures related to projected revenue and earnings and comparable market data included the following procedures, among others:
We obtained an understanding of the relevant controls related to the valuation of the Company’s reporting units and tested such controls for design and operating effectiveness, including management review controls related to projected revenue and earnings and the selection of comparable market data.
We evaluated the appropriateness of the market approach.
We evaluated the reasonableness of management’s assumptions related to projected revenue and earnings by comparing to: (1) historical results, (2) external market and industry data and (3) evidence obtained in other areas of the audit.
With the assistance of our fair value specialist, we evaluated the appropriateness of valuation models and the reasonableness of management’s selection of market data used in the market approach. We also tested the relevance and reliability of source information underlying management’s assumptions.
Valuation of Indefinite-lived Intangible Assets
As described in Notes 2 and 8 to the consolidated financial statements, the Company’s consolidated indefinite-lived trade names balance was $85.8 million as of October 31, 2025. Management conducts an impairment analysis annually as of the first day of the fourth quarter, or more frequently if events or circumstances indicate that the assets might be impaired. An impairment exists when the indefinite-lived trade names’ carrying value exceeds fair value. To evaluate indefinite-lived trade names for impairment, management first considers qualitative factors to determine whether it is more likely than not that impairment exists. For certain indefinite-lived trade names, the Company performed a quantitative test. The fair values of these trade names utilized in the quantitative tests are based on the prospective stream of hypothetical after-tax royalty cost savings discounted at rates of return appropriate for those assets. The assumptions used in management’s estimate which have the most significant effect on the estimated fair value of the Company’s tradenames are the projected revenue growth attributable to the trade names, royalty rates and discount rates.
Given the significant estimates and assumptions management makes to determine the fair value of trade names quantitatively tested for impairment, we identified management’s assumptions related to projected revenue growth, royalty rates and discount rates as a critical audit matter. Auditing the reasonableness of management’s estimates and assumptions required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.
Our audit procedures related to the projected revenue growth, royalty rates and discount rates included the following, among others:
We obtained an understanding of the relevant controls related to estimating the fair value of trade names and tested such controls for design and operating effectiveness, including management review controls related to projected revenue growth attributable to the trade names, royalty rates and discount rates.
We evaluated the reasonableness of management’s assumptions related to projected revenue growth attributable to trade names by comparing to: (1) current and past performance of branded products, (2) external data and (3) evidence obtained in other areas of the audit.
With the assistance of our fair value specialist, we evaluated the reasonableness of the royalty rates and discount rates and tested the relevance and reliability of source information underlying the determination of such rates.
/s/ RSM US LLP
We have served as the Company’s auditor since 2006.
Milwaukee, Wisconsin
December 10, 2025
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of REV Group, Inc.
Opinion on the Internal Control Over Financial Reporting
We have audited REV Group, Inc.'s (the Company) internal control over financial reporting as of October 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of October 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements of the Company and our report dated December 10, 2025, expressed an unqualified opinion.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company's internal control over financial reporting is a process designed 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. A company's internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ RSM US LLP
Milwaukee, Wisconsin
December 10, 2025
REV Group, Inc. and Subsidiaries
Consolidated Balance Sheets
(Dollars in millions, except per share amounts)
October 31,
October 31,
ASSETS
Current assets:
Cash and cash equivalents
Accounts receivable, net
Inventories, net
Prepaid expenses and other current assets
Total current assets
Property, plant and equipment, net
Goodwill
Intangible assets, net
Right of use assets
Deferred income taxes
Other long-term assets
Total assets
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable
Short-term customer advances
Accrued compensation
Short-term accrued warranty
Short-term lease obligations
Other current liabilities
Total current liabilities
Long-term debt
Long-term customer advances
Long-term lease obligations
Other long-term liabilities
Total liabilities
Commitments and contingencies
Shareholders' Equity:
Preferred stock ($ .001 par value, 95,000,000 shares authorized; none issued or outstanding)
Common stock ($ .001 par value, 605,000,000 shares authorized; 48,806,145 and 52,131,600 shares issued and outstanding, respectively)
Additional paid-in capital
Retained earnings
Accumulated other comprehensive income
Total shareholders' equity
Total liabilities and shareholders' equity
See Notes to Consolidated Financial Statements.
REV Group, Inc. and Subsidiaries
Consolidated State ments of Income and Comprehensive Income
(Dollars in millions, except per share amounts)
Fiscal Year Ended
October 31,
October 31,
October 31,
Net sales
Cost of sales
Gross profit
Operating expenses:
Selling, general and administrative
Restructuring
Impairment charges
Total operating expenses
Operating income
Interest expense, net
Loss (Gain) on sale of business
Other expense
Income before provision for income taxes
Provision for income taxes
Net income
Other comprehensive loss, net of tax
Comprehensive income
Net income per common share:
Basic
Diluted
Dividends declared per common share
See Notes to Consolidated Financial Statements.
REV Group, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Dollars in millions)
Fiscal Year Ended
October 31,
October 31,
October 31,
Cash flows from operating activities:
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
Stock-based compensation expense
Deferred income taxes
Impairment charges
Net Loss (Gain) on sale of business
Other non-cash adjustments
Changes in operating assets and liabilities, net
Receivables, net
Inventories, net
Other current assets
Accounts payable
Accrued warranty
Customer advances
Other liabilities
Long-term assets
Net cash provided by operating activities
Cash flows from investing activities:
Purchase of property, plant and equipment
Proceeds from sale of assets
Proceeds from sale of businesses
Other investing activities
Net cash (used in) provided by investing activities
Cash flows from financing activities:
Net payments from borrowings on revolving credit
Payment of dividends
Repurchase and retirement of common stock
Payments of withholding taxes for vesting of stock awards
Other financing activities
Net cash used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
Supplemental disclosures of cash flow information:
Cash paid for interest
Cash paid for income taxes, net
Cash paid for operating lease liabilities
Operating right-of-use assets obtained
See Notes to Consolidated Financial Statements.
REV Group, Inc. and Subsidiaries
Consolidated Statement of Shareholders’ Equi ty
(Dollars in millions)
Common Stock
Additional Paid-in
Retained
Accumulated
Other
Comprehensive
Total
Shareholders'
Amount
# Shares
Capital
Earnings
Income (Loss)
Equity
Balance, October 31, 2022
Net income
Stock-based compensation expense
Exercise of common stock options
Vesting of restricted and performance stock units, net of forfeitures and employee tax withholdings
Other comprehensive loss, net of tax
Forfeitures of restricted stock awards and employee tax withholdings on vested awards, net of issuances
Dividends declared on common stock
Balance, October 31, 2023
Net income
Stock-based compensation expense
Vesting of restricted and performance stock units, net of forfeitures and employee tax withholdings
Issuances of restricted stock awards, net of employee tax withholdings on vested awards
Repurchase and retirement of common stock, including fees and excise taxes
Dividends declared on common stock
Balance, October 31, 2024
Net income
Stock-based compensation expense
Vesting of restricted stock units, net of forfeitures and employee tax withholdings
Employee tax withholdings on vesting of restricted stock awards
Repurchase and retirement of common stock, including fees and excise taxes
Dividends declared on common stock
Balance, October 31, 2025
See Notes to Consolidated Financial Statements.
REV Group, Inc. and Subsidiaries
Notes to the Consolidated Financial Statements
(All tabular amounts presented in millions, except share and per share amounts)
Note 1. Nature of Operations, Equity Sponsor and Related Party Transactions
Nature of Operations : REV Group, Inc. (“REV” or “the Company”) companies are leading designers, manufacturers and distributors of specialty vehicles and related aftermarket parts and services, serving a diversified customer base, primarily in North America. Effective January 31, 2024, the Company combined its Fire & Emergency segment and Commercial segment into a new segment— the Special ty Vehicles segment. Additionally, the Recreation segment was renamed the Recreational Vehicles segment. With this change, the Company’s businesses are aligned in two reportable segments: Specialty Vehicles and Recreational Vehicles. The Company’s Specialty Vehicles business is conducted primarily under the following brands: E-One, Ferrara, KME, Spartan Emergency Response, Smeal, Spartan Fire Chassis, Ladder Tower, AEV, Horton, Leader, Road Rescue, Wheeled Coach, Capacity, and LayMor. The Company’s Recreational Vehicles business is conducted primarily under the following brands: American Coach, Fleetwood RV, Holiday Rambler, Renegade RV and Midwest Automotive Designs.
Equity Sponsor Exit : Prior to the second quarter of fiscal year 2024, the Company’s largest equity holder was comprised of (i) American Industrial Partners Capital Fund IV, LP, (ii) American Industrial Partners Capital Fund IV (Parallel), LP and (iii) AIP/CHC Holdings, LLC, which the Company collectively refers to as “AIP” or “Sponsor”.
During fiscal year 2024, the Company completed two underwritten public offerings (the “Offerings”) in which a total of 25,795,191 shares of common stock previously held by AIP were sold. Refer to Note 13, Shareholders’ Equity, for additional information related to these offerings.
Upon completion of the second of the two Offerings, AIP ceased to beneficially own at least 15 % of the Company’s outstanding shares of common stock, in the aggregate. As a result, under the terms of the Amended and Restated Shareholders Agreement, dated as of February 1, 2017 (as amended), AIP no longer had significant influence over the Company, including control over decisions that require the approval of stockholders, and no longer has the right to nominate any directors to the Board of Directors of the Company. Each of the board members previously nominated by AIP resigned from the Board of Directors of the Company, effective upon the completion of the second of the two Offerings. AIP is no longer considered a sponsor or related party of the Company.
Proposed Merger : On October 29, 2025, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Terex Corporation, a Delaware Corporation (“Terex”), Tag Merger Sub 1 Inc., a Delaware corporation and a directly wholly owned subsidiary of Terex (“Merger Sub 1”), and Tag Merger Sub 2 LLC, a Delaware limited liability company and a direct wholly owned subsidiary of Terex (“Merger Sub 2”). The proposed merger (“Proposed Merger”) intends to form a leading specialty equipment manufacturer in emergency, waste, utilities, environmental and materials processing equipment with attractive end markets characterized by low cyclicality, resilient demand and long-term growth profiles
The Merger Agreement provides that, among other things and subject to the terms and conditions of the Merger Agreement, (i) Merger Sub 1 will be merged with and into REV (the “First Merger”), with REV continuing as the surviving corporation in the First Merger (the time the First Merger becomes effective, the “Effective Time”) and (ii) immediately following the First Merger, REV will be merged with and into Merger Sub 2, with Merger Sub 2 continuing as the surviving company in the Second Merger as a wholly owned subsidiary of Terex. At the Effective Time, each issued and outstanding share of the Company's common stock (other than certain excluded shares) will be converted into the right to receive (i) 0.9809 shares of common stock, par value $ 0.01 per share, of Terex, and (ii) $ 8.71 in cash (without interest), in each case subject to the terms and conditions of the Merger Agreement.
If the Proposed Merger is completed, our common stock will cease to be listed on the New York Stock Exchange and will be deregistered. The Proposed Merger is subject to shareholder approval by both the Company's and Terex's shareholders, antitrust and regulatory approvals, and other customary closing conditions.
The preliminary Form S-4 related to the Proposed Merger with Terex was filed with the Securities and Exchange Commission on December 8, 2025.
Related Party Transactions : During fiscal years 2024 and 2023 , the Company reimbursed its former Sponsor for expenses in the amount of $ 0.2 million and $ 0.3 million, respectively. Additionally, in 2024 t he Company incurred expenses associated with its former Sponsor in connection with the Offerings and the related share repurchase. All related party expenses are included in Selling, general and administrative expenses in the Company’s Consolidated Statements of Income and Comprehensive Income. There were no significant related party transactions during fiscal year 2025.
Note 2. Basis of Presentation and Summary of Significant Accounting Policies
Principles of Consolidation : The consolidated financial statements include the accounts of REV and all of its subsidiaries and are prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). All significant intercompany accounts and transactions have been eliminated in consolidation.
Fiscal Year : The Company’s fiscal year is from November 1 to October 31. Unless otherwise stated, references to fiscal years 2025, 2024 and 2023 relate to the fiscal years ended October 31, 2025, 2024 and 2023 , respectively.
Use of Estimates : The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.
Cash and Cash Equivalents : The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash equivalents consist principally of bank deposits and overnight sweep accounts. The Company performs periodic evaluations of the relative credit standing of these financial institutions.
Under our cash management system, book overdraft balances may exist for our disbursement accounts, which represent uncleared checks in excess of cash balances in individual bank accounts. Such amounts are recorded in Accounts payable in the Consolidated Balance Sheets and are reflected as an operating activity in the Consolidated Statements of Cash Flows. As of October 31, 2025 and October 31, 2024 , the Company had net book overdrafts of $ 3.4 million and $ 17.7 million, respectively.
Accounts Receivable : Accounts Receivable consist of amounts billed and due from customers. The Company extends credit to customers in the normal course of business and maintains an allowance for uncollectible accounts resulting from the inability or unwillingness of customers to make required payments. Management determines the allowance for uncollectible accounts by evaluating individual customer receivables and considering a customer’s financial condition, credit history, the age of accounts receivable and current economic conditions.
Receivables are written off when management determines collection is highly unlikely and collection efforts have ceased. The change in the allowance for uncollectible accounts is as follows:
Fiscal Year Ended
October 31,
October 31,
October 31,
Beginning balance
Net recorded expense
Write-offs, net of recoveries/payments
Ending balance
Concentrations of Credit Risk : Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of accounts receivable and cash and cash equivalents. Concentration of credit risk with respect to accounts receivable is limited due to the large number of customers and their dispersion within North America. The Company continuously monitors credit risk associated with its receivables. The Company’s top five customers accounted for approximately 15 %, 14 % and 14 % of its net sales for fiscal years 2025, 2024 and 2023, respectively.
Concentration of credit risk with respect to cash and cash equivalents is related to deposits held with financial institutions, which may exceed the amount of insurance provided on such deposits. These deposits may be redeemed upon demand and are maintained with major financial institutions within the United States. As of October 31, 2025 and October 31, 2024 , the Company had $ 34.4 million and $ 24.3 million of uninsured cash balances in excess of Federal Depository Insurance Company limits, respectively.
Inventories : Inventories are stated at the lower of aggregate cost or net realizable value. Cost is determined using predominantly the first-in, first-out (“FIFO”), as well as the weighted-average method. If inventory costs exceed expected net realizable value due to obsolescence or other factors, or quantities on hand are in excess of expected demand, the Company records reserves for the difference between the cost and the expected net realizable value. These reserves are recorded based on various factors, including recent sales history and sales forecasts, industry market conditions, vehicle model changes and general economic conditions.
Property, Plant and Equipment : Property, plant and equipment are recorded at cost, except when acquired in a business combination where property, plant and equipment are recorded at fair value. Depreciation of property, plant and equipment is recognized over the estimated useful lives of the respective assets using the straight-line method. The estimated useful lives are as follows:
Years
Buildings, related improvements & land improvements
Machinery & equipment
Computer hardware & software
Office, furniture & other
Expenditures that extend the useful life of existing property, plant and equipment are capitalized and depreciated over the remaining useful life of the related asset. Expenditures for repairs and maintenance are expensed as incurred. When property, plant and equipment are retired or sold, the cost and related accumulated depreciation is removed from the Company’s balance sheet, with any gain or loss reflected in operations.
Goodwill and Indefinite-Lived Intangible Assets : Goodwill and Indefinite-lived intangible assets, consisting of trade names, are reviewed for impairment by applying a fair-value based test on an annual basis, or more frequently if events or circumstances indicate a potential impairment. The annual impairment review is performed as of the first day of the fourth quarter of each fiscal year based upon information and estimates available at that time. As part of the annual test on both goodwill and indefinite-lived intangible assets, the Company may utilize a qualitative approach rather than a quantitative approach to determine if an impairment exists, considering various factors including industry changes, actual results as compared to forecasted results, or the timing of a recent acquisition, if applicable. When the fair value of the reporting unit or trade name is thought to be less than its carrying value, a further analysis is performed to measure and recognize the amount of the impairment loss, if any. Impairment losses, limited to the carrying value of the related asset, are recorded for the amount by which the carrying amount exceeds fair value.
Long-Lived Assets Including Definite-Lived Intangible Assets : Property, plant and equipment and intangible assets with definite lives are reviewed for potential impairment when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Recoverability of assets to be held and used is measured by comparing the carrying value of such assets to the undiscounted future cash flows expected to be generated by such assets. If the carrying value of an asset exceeds its estimated undiscounted future cash flows, an impairment provision is recognized to the extent that the fair value exceed its carrying amount. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market value and third-party independent appraisals, as considered necessary.
Self-Insurance: The Company self-insures a portion of its workers' compensation, product and general liability, and medical claims exposure. Under these self-insurance plans, liabilities are recognized for claims incurred, including those incurred but not reported. The Company may use third party administrators and actuaries who use historical claims experience, state and industry specific development factors and various state statutes to assist in the determination of the accrued liability balance. As the Company pays the claims, the reserve is released for incurred and reported claims.
Advertising costs: Advertising costs are included in Selling, general and administrative expense and are expensed as incurred. Advertising costs totaled $ 6.9 million, $ 7.9 million, and $ 8.5 million for the fiscal years ended October 31, 2025, 2024, and 2023 , respectively.
Research and Development costs: Research and development (“R&D”) costs are included as part of Selling, general, and administrative expenses and are expensed as incurred. R&D costs totaled $ 5.8 million, $ 3.3 million and $ 4.7 million for the fiscal years ended October 31, 2025, 2024 and 2023 , respectively.
Revenue Recognition : Substantially all of the Company’s revenue is recognized from contracts with customers with product shipment destinations in North America. 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 transaction price excludes sales and usage-based taxes collected and certain “pass-through” amounts collected on behalf of third parties. The Company has elected to expense incremental costs to obtain a contract when the amortization period of the related asset is expected to be less than one year.
The Company’s primary source of revenue is generated from the manufacture and sale of specialty vehicles through its direct sales force and dealer network. The Company also generates revenue through separate contracts that relate to the sale of aftermarket parts and services. Revenue is primarily 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. Revenue from services and revenue from when the entity's performance enhances an asset the customer controls are recognized over time based on a cost input method. Revenues generated over time are considered an immaterial percentage of total revenue. Shipping and handling costs that occur after the transfer of control are fulfillment costs that are recorded in Cost of sales in the Consolidated Statements of Income and Comprehensive Income when incurred or when the related product revenue is recognized, whichever is earlier. Certain customers may request bill and hold transactions according to the terms in the contract. 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, (iii) has been separated from our inventory and is ready for physical transfer to the customer, and (iv) the Company cannot use the product or redirect the product to another 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.
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 Sheets. The Company reduces the contract liabilities when the Company transfers control of the promised good or service. During fiscal year 2025 , the Company recognized $ 146.6 million of revenue that was included in the customer advances balance of $ 318.1 million as of October 31, 2024. During fiscal year 2024 , the Company recognized $ 166.3 million of revenue that was included in the customer advances balance of $ 357.4 million as of October 31, 2023. During fiscal year 2023 , the Company recognized $ 166.1 million of revenue that was included in the customer advances balance of $ 332.8 million as of October 31, 2022. Within the Specialty Vehicles segment, customers earn interest on customer advances at a rate determined at contract inception. Interest charges incurred on customer advances during the years ended October 31, 2025 , 2024, and 2023 of $ 13.8 million, $ 10.4 million, and $ 8.7 million respectively, were recorded in Interest expense in the Consolidated Statement of Income and Comprehensive Income. The Company does not have significant contract assets.
Remaining Performance Obligations
As of October 31, 2025 , the Company had unsatisfied performance obligations for non-cancelable contracts with an original duration greater than one year totaling $ 3,494.6 million, of which $ 1,453.6 million is expected to be satisfied and revenue recognized in fiscal year 2026 and $ 2,041.0 million is expected to be satisfied and recognized in revenue thereafter .
Warranty : Provisions for estimated warranty and other related costs are recorded in cost of sales and are periodically adjusted to reflect actual experience. The amount of accrued warranty liability reflects management’s estimate of the expected future cost of settling the Company’s obligations under its warranty programs. The costs of fulfilling the Company’s warranty obligations primarily consist of replacement parts, labor and sometimes travel for any field retrofit or recall campaigns. The Company’s estimates are based on historical warranty expenditures, length of the warranty obligations for units sold, and the number of units under warranty. If a warranty cost is incurred due to a defect in purchased material, the Company will seek reimbursement from the vendor.
Fair Value Measurements : The Company’s financial instruments not required to be adjusted to fair value on a recurring basis consist principally of cash, receivables, long-term debt and accounts payable. The Company believes cash, accounts receivable, and accounts payable are recorded at amounts that approximate their current market values based on their short-term nature.
The Company determines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between unrelated market participants at the measurement date. The Company utilizes valuation techniques that maximize the use of observable inputs (Levels 1 and 2) and minimize the use of unobservable inputs (Level 3) within the fair value hierarchy established by the Financial Accounting Standards Board (“FASB”).
For illustrative purposes, the levels within the FASB fair value hierarchy are as follows:
Level 1 Quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities;
Level 2 Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly;
Level 3 Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable, including the company’s own assumptions in determining fair value.
The Company applies fair value accounting for all financial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements.
Income Taxes : Deferred income tax assets and liabilities are based on the temporary differences between the financial reporting basis and the income tax basis of the Company’s assets and liabilities using currently enacted tax rates and laws. Valuation allowances are established to reduce deferred tax assets to the amount ultimately expected to be realized. The realization of deferred tax assets is dependent upon the generation of taxable income during the periods in which those temporary differences become deductible for income tax purposes. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax-planning strategies in making the assessment of the realizability of deferred tax assets. The Company will continue to evaluate its valuation allowance requirements in light of changing facts and circumstances and may adjust its deferred tax 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 allowance in the future.
The Company recognizes liabilities for uncertain income tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step requires the Company to estimate and measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. It is inherently difficult and subjective to estimate such amounts, as the Company must determine the probability of various possible outcomes. The Company evaluates these uncertain tax positions on a quarterly basis or when new information becomes available to management. The evaluations are based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, successfully settled issues under audit and new audit activity. Such a change in recognition or measurement could result in the recognition of a tax benefit or an increase to the related provision.
The Company includes interest and penalties related to income tax liabilities in Provision for income taxes in the Company’s Consolidated Statements of Income and Comprehensive Income. Liabilities for income taxes payable, accrued interest and penalties that are due within one year of the balance sheet date are included in Other current liabilities.
The Company regularly assesses the likelihood of an adverse outcome resulting from examinations to determine the adequacy of its tax reserves. As of October 31, 2025, 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.
Stock-Based Compensation : Stock compensation expense for restricted stock units and awards is recorded over the service period based on the grant date fair value of the awards. The grant date fair value is equal to the closing share price of the Company’s common stock on the date of grant. Forfeitures of restricted stock units and awards are recognized as they occur.
Stock compensation expense for performance stock unit awards is recorded over the service period based on the grant date fair value of the awards if achievement of specified performance targets is considered probable. The grant date fair value is equal to the closing share price of the Company’s common stock on the date of grant. Forfeitures of performance stock units and awards are recognized as they occur.
Reclassifications: Certain reclassifications have been made to the prior period financial statements to conform with the fiscal year 2025 presentation and improve comparability between periods.
Recent Accounting Pronouncements
Accounting Pronouncement - Adopted
In September 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-04 “Liabilities-Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations”. The amendments in this ASU require that a company that uses a supplier finance program in connection with the purchase of goods or services disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. ASU 2022-04 is effective for fiscal years beginning after December 15, 2022 , except for the amendment on rollfoward information, which is effective for fiscal years beginning after December 15, 2023. We adopted ASU 2022-04 in the first quarter of fiscal year 2024, and we adopted the amendment on rollforward information in the fourth quarter of fiscal year 2025. Refer to Note 3, Supply Chain Finance Program, for further details.
In November 2023, the FASB issued ASU 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”. The amendments in this ASU require public entities to disclose information about their reportable segments’ significant expenses on an interim and annual basis. The ASU is effective for fiscal years beginning after December 15, 2023 , and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. We adopted the annual requirements of ASU 2023-07 in fiscal year 2025 and plan to adopt the interim requirements of ASU 2023-07 in fiscal year 2026. Refer to Note 18, Business Segment Information, for further details.
Accounting pronouncements - To be Adopted
In December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. This update requires public entities to disclose specific categories in the rate reconciliation on an annual basis, and to provide additional information for reconciling items that meet a quantitative threshold. Additionally, this ASU requires that public entities disclose certain disaggregated information related to income taxes paid, income or loss from continuing operations and income tax expense or benefit. The ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. We expect to adopt ASU 2023-09 in fiscal year 2026 and are currently evaluating the impact of ASU 2023-09 on our consolidated financial statements.
Note 3. Supply Chain Finance Program
The Company has an unsecured agreement with a third-party financial institution to facilitate a supply chain finance (“SCF”) program. The SCF prog ram allows qualifying suppliers to sell their receivables due from the Company, on an invoice level at the selection of the supplier, to the financial institution and negotiate their outstanding receivable arrangements and associated fees directly with the financial institution. The Company is not party to the agreements between the supplier and the financial institution. The supplier invoices that have been confirmed as valid under the program require payment in full by the Company within 120 days of the invoice date.
All outstanding amounts related to suppliers participating in the SCF program are confirmed with the third-party financial institution and are recorded in Accounts payable in the Consolidated Balance Sheets. The Company’s outstanding obligation under the SCF program was $ 11.2 million and $ 9.1 million as of October 31, 2025 and October 31, 2024, respectively.
The changes in our payment obligations were as follows:
October 31,
Balance at beginning of year
Invoices confirmed during the year
Invoices paid during the year
Balance at end of year
Note 4. Inventories
Inventories, net of reserves, consisted of the following:
October 31,
October 31,
Chassis
Raw materials & parts
Work in process
Finished products
Less: reserves
Total inventories, net
Note 5. Property, Plant and Equipment
Property, plant and equipment consisted of the following:
October 31,
October 31,
Land & land improvements
Buildings & improvements
Machinery & equipment
Computer hardware & software
Office furniture & fixtures
Construction in process
Less: accumulated depreciation
Total property, plant and equipment, net
Depreciation expense was $ 24.3 million, $ 23.2 million and $ 22.7 million for fiscal years 2025, 2024 and 2023, respectively. In connection with the discontinuation of manufacturing operations at the Company's ElDorado National (California) (“ENC”) facility, the Company recorded impairment charges of property, plant, and equipment of $ 4.4 million during fiscal year 2024. The fair value used in this impairment assessment was based on Level 3 inputs as defined by Accounting Standards Codification (“ASC”) 820, Fair Value Measurements. Re fer to Note 7, Restructuring and Other Related Charges, for further details.
Note 6. Divestitures
On January 26, 2024, the Company entered into a Stock Purchase Agreement (the “Collins Stock Purchase Agreement”) by and among the Company, Collins Industries, Collins, Forest River, Inc. and Forest River Bus, LLC (“Forest River”), pursuant to which Collins Industries agreed to sell all of the issued and outstanding shares of capital stock of Collins to Forest River. The sale optimized the Company's portfolio of products and created a more focused operating structure aligned with markets where the Company has a strong presence of industry leading brands. The transactions under the Collins Stock Purchase Agreement closed on January 26, 2024. I n connection with the completion of the sale of Collins, the Company received cash consideration of $ 309.6 million and recorded a gain on sale of $ 258.9 million, which is included in the Company’s Consolidated Statements of Income and Comprehensive Income . The Company incurred $ 5.0 million of transaction costs in connection with this sale, which are included in the Selling, general and administrative expense in the Company’s Consolidated Statements of Income and Comprehensive Income for the fiscal year ended October 31, 2024. Collins was previously reported as part of the Specialty Vehicles segment.
On April 30, 2024, in connection with a strategic review of the product portfolio, the Company sold certain assets of the Fire RTC business. In connection with the sale, the Company recorded a gain of $ 1.5 million, which is included in the Company’s Consolidated Statements of Income and Comprehensive Income. The remaining assets and liabilities of the Fire RTC business are included within the Specialty Vehicles segment.
On October 18, 2024, in connection with the strategic decision to wind down operations and exit the bus manufacturing business, the Company entered into a Stock Purchase Agreement (the “ENC Stock Purchase Agreement”) by and among the Company, ENC, and Rivaz, Inc. (“Rivaz”), pursuant to which the Company agreed to sell all of the issued and outstanding shares of capital stock of ENC to Rivaz . In connection with the completion of this sale on October 18, 2024, the Company received cash consideration of $ 52.0 million and recorded a gain on sale of $ 28.9 million, which is included in the Company's Consolidated Statements of Income and Comprehensive Income. ENC was previously reported as part of the Specialty Vehicles Segment.
On June 26, 2025, in connection with a strategic decision to exit its non-motorized recreational vehicle manufacturing business, the Company entered into a Stock Purchase Agreement (the “Lance Stock Purchase Agreement”) by and among REV Recreation Group Funding, Inc. (“RRG Funding”), Lance Camper Mfg. Corp. (“Lance”), Avery Transport Inc. (“Avery”), and Vision Kore, Inc. and certain of its affiliates, pursuant to which RRG Funding agreed to sell all of the issued and outstanding shares of capital stock of Lance and Avery to Vision Kore, Inc. The transactions under the Lance Stock Purchase Agreement closed on June 26, 2025. In connection with the completion of the sale of Lance and Avery, the Company recorded a non-cash loss of $ 39.6 million which is included in the Consolidated Statements of Income and Comprehensive Income for the fiscal year ended October 31, 2025 . Lance and Avery were previously reported as part of the Recreational Vehicles segment.
Note 7. Restructuring and Other Related Charges
On January 29, 2024, the Company announced that it would discontinue manufacturing operations at the Company’s ENC facility in Riverside, California. The discontinuation of manufacturing at ENC created a more focused portfolio that provided opportunities for growth, consistent cash generation and improved margin performance. As noted in Note 6, Divestitures, the Company sold ENC in the fourth quarter of fiscal year 2024.
The Company incurred certain restructuring and other related charges in connection with the decision to discontinue manufacturing at the ENC facility. During fiscal year 2024 , the Company recorded restructuring charges related to this matter of $ 12.3 million, primarily related to severance and retention costs, and contract cancelation costs. During fiscal year 2024, the Company also incurred restructuring related charges from this activity consisting of $ 11.6 million of impairment charges related to intangible assets and property, plant, and equipment, $ 7.5 million of inventory charges, and $ 0.3 million of other costs. With the finalization of the discontinuation of manufacturing operations and the sale of ENC, this restructuring activity is complete. T here is no remaining restructuring liability as of October 31, 2025 . ENC was previously reported as part of the Specialty Vehicles Segment.
Note 8. Goodwill and Intangible Assets
The table below represents goodwill by segment:
October 31,
October 31,
Specialty Vehicles
Recreational Vehicles
Total goodwill
The change in the net carrying value of goodwill consisted of the following:
October 31,
October 31,
Balance at beginning of period
Divestitures (Note 6)
Balance at end of period
Intangible assets (excluding goodwill) consisted of the following:
October 31, 2025
Gross
Accumulated
Amortization
Net
Finite-lived customer relationships:
Indefinite-lived trade names
Total intangible assets, net
October 31, 2024
Gross
Accumulated
Amortization
Net
Finite-lived customer relationships
Indefinite-lived trade names
Total intangible assets, net
The change in the net carrying value of indefinite-lived trade names consisted of the following:
October 31,
October 31,
Balance at beginning of period
Impairment charges
Divestiture (Note 6)
Balance at end of period
Amortization expense was $ 1.7 million, $ 2.2 million and $ 3.5 million for fiscal years 2025, 2024 and 2023 , respectively. The estimated future amortization expense of intangible assets for the subsequent five fiscal years is as follows: 2026 - $ 1.2 million; 2027 - $ 1.2 million; 2028 - $ 1.2 million; 2029 - $ 0.6 million, at which point all finite-lived intangible assets will be fully amortized. As of October 31, 2025, fully amortized intangible assets and the related accumulated amortization were written off.
In connection with the discontinuation of manufacturing operations at the ENC facility, the Company recorded an impairment charge of an indefinite-lived trade name of $ 7.2 million during fiscal year 2024. Refer to Note 7, Restructuring and Other Related Charges, for further details related to this discontinuation. Additionally, during fiscal year 2024, the Company recorded a $ 1.9 million impairment charge of an indefinite-lived trade name included within the Recreational Vehicles segment, which was due to lower-than-expected operating results at a specific business unit. These impairments were based on Level 3 inputs, as defined by ASC 820, Fair Value Measurements .
Note 9. Long-Term Debt
The Company was obligated under the following debt instruments:
October 31,
October 31,
ABL Facility
ABL Facility
On February 20, 2025, the Company entered into a third amendment to its then existing ABL agreement (the “2021 ABL Agreement” or the “2021 ABL Facility”), hereafter referred to as the “Amended 2021 ABL Agreement” or the “Amended 2021 ABL Facility”. The Amended 2021 ABL Facility provides for revolving loans and letters of credit in an aggregate amount of up to $ 450.0 million. The total credit facility is subject to a $ 45.0 million sublimit for swing line loans and a $ 35.0 million sublimit for letters of credit (plus up to an additional $ 20.0 million of letters of credit at issuing bank’s discretion), along with certain borrowing base and other customary restrictions as defined in the Amended 2021 ABL Agreement. The Amended 2021 ABL Agreement allows for incremental facilities 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 facilities are subject to receiving additional commitments from lenders and certain other customary conditions. Subject to certain conditions and limitations set forth in the Amended 2021 ABL Agreement, the Company is also permitted to enter into an additional secured term loan credit facility with financial institutions acceptable to the administrative agent. The debt issuance costs capitalized in connection with the Amended 2021 ABL Facility less accumulated amortization are included in Other long-term assets in the Company’s Consolidated Balance Sheets. The debt issuance costs are amortized over the life of the debt on a straight-line basis. The Amended 2021 ABL Facility matures on February 20, 2030 . The Company may prepay principal, in whole or in part, at any time without penalty.
The following table summarizes the gross borrowing and gross payments of long-term debt:
October 31,
October 31,
October 31,
Gross borrowings
Gross payments
Total net borrowings
All revolving loans under the Amended 2021 ABL Facility bear interest at rates equal to, at the Company’s option, either a base rate plus an applicable margin, or a SOFR rate plus an applicable margin and credit spread adjustment of 0.1 % for all interest periods. As of October 31, 2025 , the interest rate margins are 0.5 % for all base rate loans and 1.5 % for all SOFR rate loans (with the SOFR rate having a floor of 0.0 %), subject to adjustment based on the calculation of average quarterly availability in relation to the total revolving loan commitment. Interest is payable quarterly for the swing line loan and all base rate loans, and is payable on the last day of any interest period or every three months for all SOFR rate lo ans. The weighted-average interest rate on borrowings outstanding under the Amended 2021 ABL Facility was 5.6 % as of October 31, 2025. The weighted-average interest rate on borrowings outstanding under the 2021 ABL Facility was 6.8 % as of October 31, 2024.
The lenders under the Amended 2021 ABL Facility have a first priority security interest in substantially all personal property assets of the Company. The Amended 2021 ABL Facility’s borrowing base is comprised of eligible receivables and eligible inventory.
The Amended 2021 ABL Agreement contains customary representations and warranties, affirmative and negative covenants, subject in certain cases to customary limitations, exceptions and exclusions. The Amended 2021 ABL Agreement also contains certain customary events of default. The occurrence of an event of default under the Amended 2021 ABL Agreement could result in the termination of the commitments under the Amended 2021 ABL Facility and the acceleration of all outstanding borrowings under it.
The Company would become subject to compliance with a 1.0 to 1.0 minimum fixed charge coverage ratio financial covenant under the Amended 2021 ABL Agreement if the Company’s borrowing base availability falls below the greater of $ 35.0 million or 12.5 % of the borrowing base. As of October 31, 2025, the Company’s availability under the Amended 2021 ABL Fa cility was $ 307.6 m illion.
As of October 31, 2024 , the Company’s availability under the 2021 ABL Facility was $ 349.6 million.
The fair value of the Amended 2021 ABL Facility approximated book value on October 31, 2025 and October 31, 2024 .
Note 10. 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 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:
October 31,
October 31,
Balance at beginning of year
Warranty provisions
Settlements made
Divestiture (Note 6)
Balance at end of year
Accrued warranty is classified in the Company’s consolidated balance sheets as follows:
October 31,
October 31,
Current liabilities
Other long-term liabilities
Total warranty liability
Note 11. Leases
The Company leases certain administrative and production facilities and equipment under long-term, non-cancelable operating lease agreements. The Company determines if an arrangement is or contains a lease at contract inception and recognizes a right of use ( “ ROU ” ) asset and a lease liability based on the present value of fixed, and certain index-based, lease payments at the lease commencement date. Variable payments are excluded from the present value of lease payments and are recognized in the period in which the payment is made. Lease agreements may include options to extend or terminate the lease or purchase the underlying asset. In situations where the Company is reasonably certain to exercise such options, they are considered in determining the lease term and the associated option payments, or the exercise price in the case of an option to purchase, are included in the measurement of the lease liabilities and ROU assets. The Company’s leases generally do not include restrictive financial or other covenants, or residual value guarantees. The Company generally uses its incremental borrowing rate as the discount rate for measuring its lease liabilities, as the Company cannot determine the interest rate implicit in the lease because it does not have access to certain lessor specific information. Lease expense is recognized on a straight-line basis over the lease term. The Company does not have significant finance leases. The Company has elected not to separate payments for lease components from payments for non-lease components for all classes of leases. Additionally, the Company has elected the short-term lease recognition exemption for all leases that qualify, which means ROU assets and lease liabilities will not be recognized for leases with an initial term of twelve months or less.
During fiscal years 2025, 2024, and 2023 , the Company recognized total operating lease costs resulting from fixed lease payments of $ 9.4 million, $ 10.8 million, and $ 10.7 million, respectively.
At October 31, 2025, future minimum payments for operating leases having initial or remaining non-cancelable terms in excess of one year are summarized by fiscal year in the table below:
Thereafter
Total undiscounted lease payments
Less: Imputed interest
Total lease liabilities
As of October 31, 2025 , the weighted average remaining lease term and the weighted average discount rate for operating leases was 5.4 years and 6.4 %, respectively.
As of October 31, 2024 , the weighted average remaining lease term and the weighted average discount rate for operating leases was 5.3 years and 6.8 %, respectively.
Note 12. Employee Benefits
The Company has a defined contribution 401(k) plan covering substantially all employees. The plan allows employees to defer up to 100 % of their employment income (subject to annual contribution limits imposed by the I.R.S.) after all taxes and applicable benefit deductions. Each employee who elects to participate is eligible to receive Company matching contributions that are based on employee contributions to the plans, subject to certain limitations. Amounts expensed for the Company’s matching contributions were $ 10.4 million, $ 10.7 million and $ 10.6 million during fiscal years 2025, 2024 and 2023 , respectively.
Note 13. Shareholders' Equity
Share Repurchases: On June 1, 2023, the Company’s Board of Directors approved a new share repurchase program that allowed the repurchase of up to $ 175.0 million of the Company’s outstanding common stock (the “2023 Repurchase Program”). The 2023 Repurchase Program replaced the Company's prior share repurchase program. The 2023 Repurchase Program would have expired 24 months after the approval date and gave management flexibility to determine conditions under which the shares may be purchased, subject to certain limitations. During fiscal year 2023, the Company did no t repurchase any shares under the 2023 Repurchase Program or the Company's prior repurchase program. During fiscal year 2024, the Company repurchased and retired 8,000,000 shares under this repurchase program at a total cost of $ 126.1 million and at a price of approximately $ 15.76 per share, as described further below. The Company incurred approximately $ 3.6 million in additional fees and excise taxes associated with the repurchase which has been included within the total cost of the share repurchase and recorded directly within equity.
On December 5, 2024, the Company’s Board of Directors authorized the Company to repurchase up to $ 250.0 million of the Company’s outstanding common stock (the “2024 Repurchase Program”). The 2024 Repurchase Program replaced the 2023 Repurchase Program. The 2024 Repurchase Program expires 24 months after the authorization date and gives management flexibility to determine the conditions under which shares may be purchased from time to time through a variety of methods, including in privately negotiated or open market transactions, such as pursuant to a trading plan in accordance with Rule 10b5-1 and Rule 10b-18 of the Exchange Act or a combination of methods. The 2024 Repurchase Program does not obligate the Company to acquire any specific number of shares and it can be suspended or discontinued at any time without notice. During the year ended October 31, 2025 , the Company repurchased and retired 3,456,979 shares under the 2024 Share Repurchase Program at a cost of $ 107.6 million and at an average price of approximately $ 31.10 per share, excluding commissions, fees and excise taxes.
Special Dividend: On February 16, 2024 , the Company paid the previously declared special cash dividend equal to $ 3.00 per share of common stock to shareholders of record on February 9, 2024 .
Offerings: On February 20, 2024, the Company closed the first of the Offerings, which included the sale of 18,400,000 shares of its common stock held by AIP. 10,400,000 of these shares were sold to the public at the public offering price of $ 16.50 per share. The Company repurchased from the underwriters 8,000,000 of these shares at a price per common share of approximately $ 15.76 , which is equal to the price paid by the underwriters to AIP.
On March 15, 2024, the Company closed the second of the Offerings, which included the sale of 7,395,191 shares of the Company’s common stock by AIP, all of which were sold to the public at a public offering price of $ 18.00 per share.
The Company did not sell any shares of common stock and did not receive any proceeds from the Offerings. The Company incurred approximately $ 1.4 million in offering costs during the year ended October 31, 2024, which are included within Selling, general and administrative expenses in the Company’s Consolidated Statements of Income and Comprehensive Income.
Note 14. Stock Compensation
The 2016 Omnibus Incentive Plan had 8,000,000 shares authorized for issuance. During fiscal year 2024, the 2016 Omnibus Incentive Plan was amended and restated (the “Amended and Restated 2016 Plan”), which resulted in an increase to the maximum number of shares available for issuance. As of October 31, 2025 there were 2,480,267 shares remaining under the Amended and Restated 2016 Plan, which excludes shares underlying outstanding awards.
Under the Amended and Restated 2016 Plan, officers, directors, including non-employee directors, employees and consultants of the Company may be granted restricted stock awards (“RSAs”), restricted stock units (“RSUs”) performance stock units (“PSUs”), stock options or other awards. RSAs and RSUs generally vest over a one to four-year service period following the grant date, provided the recipient is still our employee, consultant, or non-employee director, at the time of vesting. PSUs generally vest over a one to three-year service period following the grant date, provided the recipient is still our employee at the time of vesting, and provided the achievement of any performance targets applicable to each award are achieved.
For fiscal years 2025, 2024, and 2023 , the Company recorded stock-based compensation expense, including employer payroll taxes incurred when awards are vested, of $ 12.6 million, $ 12.7 million, and $ 14.4 million, respectively, within Selling, general and administrative expenses in the Company’s Consolidated Statements of Income and Comprehensive Income. The actual income tax benefit realized totaled $ 2.3 million, $ 2.3 million, and $ 2.9 million for those same periods.
Restricted Stock Awards : For fiscal year 2025, the change in the number of nonvested RSAs outstanding consisted of the following:
Number of Awards
Weighted-Average Grant Date
Fair Value Per Award
Nonvested, beginning of year
Granted
Vested
Forfeited
Nonvested, end of year
There were no RSAs granted during fiscal year 2025. The weighted average grant date fair value of RSAs granted during fiscal years 2024 and 2023 was $ 17.04 and $ 13.01 per award, respectively. The total fair value of RSAs that vested during fiscal years 2025, 2024, and 2023 was $ 4.9 million, $ 6.7 million, and $ 7.4 million, respectively.
As of October 31, 2025 , the Company had $ 2.7 million of unrecognized compensation expense related to RSAs, which will be recognized over a weighted-average period of 1.9 years.
Restricted Stock Units : For fiscal year 2025, the change in the number of nonvested RSUs outstanding consisted of the following:
Number of Units
Weighted-Average Grant Date
Fair Value Per Unit
Nonvested, beginning of year
Granted
Vested
Forfeited
Nonvested, end of year
The weighted average grant date fair value of RSUs granted during fiscal years 2025, 2024, and 2023 was $ 31.39 , $ 18.22 , and $ 12.93 per unit, respectively. The total fair value of RSUs that vested during fiscal years 2025, 2024, and 2023 was $ 9.3 million, $ 6.3 million, and $ 4.1 million, respectively.
As of October 31, 2025 , the Company had $ 8.9 million of unrecognized compensation expense related to RSUs, which will be recognized over a weighted-average period of 1.9 years.
Performance Stock Units : For fiscal year 2025, the change in the number of nonvested PSUs consisted of the following:
Number of Units
Weighted-Average Grant Date
Fair Value Per Unit
Nonvested, beginning of year
Granted
Earned
Vested
Forfeited
Nonvested, end of year
The weighted average grant date fair value of PSUs granted during fiscal years 2025 and 2023 was $ 31.44 and $ 12.41 per unit, respectively. There were no PSUs granted during fiscal year 2024. There were no PSUs vested during fiscal year 2025. The total fair value of PSUs that vested during fiscal years 2024 and 2023 was million, $ 14.9 million and $ 3.6 million, respectively.
As of October 31, 2025 , the Company had $ 1.5 million of unrecognized compensation expense related to PSUs, which will be recognized over a weighted-average period of 1.5 years.
Note 15. Income Taxes
Income is taxed in the following jurisdictions:
Fiscal Year Ended
October 31,
October 31,
October 31,
Domestic
Foreign
Income before provision for income taxes
Provision for income taxes is summarized as follows:
Fiscal Year Ended
October 31,
October 31,
October 31,
Current:
Federal
State
Foreign
Total Current
Deferred:
Federal
State
Total Deferred
Provision for income taxes
Income tax provision at the federal statutory rate is reconciled to the Company’s provision for income taxes as follows:
Fiscal Year Ended
October 31,
October 31,
October 31,
Income tax provision at federal statutory rate
State expense
Manufacturing and research incentives
Nondeductible items
Uncertain tax positions
Valuation allowance
Stock-based compensation
Sale of business
Provision for income taxes
Tax expense for fiscal year 2025 was favorably impacted by a tax loss on the sale of the Lance and Avery businesses and incentives for U.S. manufacturing and research. Tax expense was unfavorably impacted by nondeductible expenses and additional unrecognized tax benefits recorded during the year.
Tax expense for fiscal year 2024 was favorably impacted by incentives for U.S. research and stock-based compensation tax deduction and was unfavorably impacted by nondeductible expenses.
Tax expense for fiscal year 2023 was favorably impacted by incentives for U.S. research. Tax expense was unfavorably impacted by additional unrecognized tax benefits recorded during the year.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted. The OBBBA contains provisions to enhance and expand bonus depreciation, allow immediate expensing of domestic research costs, accelerate deductions of previously deferred domestic research costs, and modify the international tax framework. The impact of OBBBA was not material to the Company’s financial statements for fiscal year 2025.
Temporary differences and carryforwards that give rise to deferred tax assets and liabilities include the following items:
October 31,
October 31,
Deferred tax assets:
Product warranty
Inventory
Deferred employee benefits
Net operating loss and credit carryforwards
Lease obligations
Capitalized research expenditures
Other reserves and allowances
Gross deferred tax assets
Less: valuation allowance
Deferred tax assets
Deferred tax liabilities:
Intangible assets
Property, plant and equipment
Right of use asset
Other
Deferred tax liabilities
Net deferred tax asset
The net deferred tax assets and liabilities recorded in the consolidated balance sheet are as follows:
October 31,
October 31,
Noncurrent deferred tax asset
Noncurrent deferred tax liability
Net deferred tax asset
The Company has state net operating loss carryforwards of approximately $ 83.0 million, which begin to expire in 2029 and are partially offset by a valuation allowance. As of October 31, 2025, the Company also has state capital loss carryforwards of $ 1.6 million, offset by a valuation allowance. The Company has state tax credit carryforwards of $ 2.1 million, which will begin to expire in 2026 and are partially offset by a valuation allowance.
The Company, or one of its subsidiaries, files income tax returns in the U.S, India, and various state jurisdictions. Fiscal years 2022 through 2024 remain open to tax examination by U.S. federal authorities and fiscal years 2021 through 2024 remain open to tax examination by state tax authorities. The Company regularly assesses the likelihood of an adverse outcome resulting from examinations to determine the adequacy of its tax reserves.
A reconciliation of the beginning and ending amount of unrecognized tax benefits are as follows:
Fiscal Year Ended
October 31,
October 31,
October 31,
Balance at beginning of year
Additions for tax positions in prior year
Additions for tax positions in current year
Cash settlements with taxing authorities
Statute of limitations
Balance at end of year
If recognized, $ 7.4 million, $ 3.9 million, and $ 5.6 million of the Company’s unrecognized tax benefits as of October 31, 2025, October 31, 2024 and October 31, 2023, respectively, would affect the Company’s effective income tax rate.
Note 16. Commitments and Contingencies
The Company is, from time to time, party to various legal proceedings, including product and general liability claims, arising out of the ordinary course of business. Assessments of legal proceedings can involve complex judgments about future events that may rely on estimates and assumptions. When assessing whether to record a liability related to legal proceedings, the Company adheres to the requirements of ASC 450, Contingencies , and other applicable guidance as necessary, and records liabilities in those instances where it can reasonably estimate the amount of the loss and when the loss is probable. When a range exists that is reasonably estimable and the loss is probable, the Company records an accrual in its financial statements equal to the most likely estimate of the loss, or the low end of the range, if there is no one best estimate. Additionally, these claims are sometimes covered by third-party insurance, which for some insurance policies is subject to a retention for which the Company is responsible. In the event the loss amount recorded for a claim exceeds the Company's retention, an indemnification receivable is recorded for the difference as long as the receivable is probable of collection.
Market Risks : The Company is contingently liable under bid, performance and specialty bonds issued by the Company's surety companies and has open standby letters of credit issued by the Company’s banks in favor of third parties as follows:
October 31,
October 31,
Performance, bid and specialty bonds
Open standby letters of credit
Total
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 upon delivery. Accordingly, the chassis are not owned by the Company when delivered, and therefore, are excluded from
the Company’s inventory. Upon being put into production, the Company owns the inventory and becomes obligated to pay the manufacturer for the chassis. Chassis are typically placed into production within 90 to 120 days of delivery to the Company. If the chassis are not placed into production within this timeframe, 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 vehicle chassis that would be resold to mitigate any losses. The Company’s contingent liability under such agreements was $ 25.6 million and $ 20.8 million as of October 31, 2025 and October 31, 2024, respectively.
From time to time, the Company’s customers may provide their own vehicle chassis, at their sole discretion, in connection with specific vehicle orders. These vehicle chassis are stored at the Company’s various production facilities until the related value-added work is completed and the finished unit is shipped back to the customer. The customer does not transfer the vehicle chassis certificate of origin to the Company. Accordingly, such chassis are not owned by the Company when delivered or throughout the production process, and are, therefore, excluded from the Company’s inventory. The Company’s maximum contingent liability related to these vehicle chassis was $ 27.5 million and $ 38.1 million as of October 31, 2025 and October 31, 2024, respectively. Losses incurred related to these arrangements have not been significant.
Repurchase Commitments : The Company has 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 also repurchases inventory from dealers from time to time due to state law or regulatory requirements that require manufacturers to repurchase inventory if a dealership exits the business. The Company’s maximum contingent liability under such agreements were $ 451.9 million and $ 380.6 million as of October 31, 2025, and October 31, 2024, respectively, which represents the gross value of all vehicles under repurchase agreements. 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 resale value of the units which is required to be repurchased. Losses incurred under such arrangements have not been significant. The reserve for losses included in other liabilities on contracts outstanding at October 31, 2025 and October 31, 2024 is immaterial.
Guarantee Arrangements : The Company is party to multiple agreements whereby it guaranteed an aggregate of $ 14.4 million and $ 21.7 million at October 31, 2025 and October 31, 2024 , respectively, of indebtedness of others, including losses under loss pool agreements. The Company estimated that its maximum loss exposure under these contracts was $ 2.8 million and $ 4.0 million at October 31, 2025 and October 31, 2024, 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. 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. Additionally, the Company cannot guarantee that the collateral underlying the agreements will be available or sufficient to avoid losses materially in excess of the amount reserved.
Other Matters : In January 2023, the Company agreed, in principle, to settle a claim brought by a plaintiff who was injured as a passenger in an accident involving a shuttle bus that was manufactured by Krystal Bus prior to the Company’s acquisition of certain assets related to that business. The Company did not admit to any liability on the merits of the claim but deemed a settlement to be in its best interest based on the facts and circumstances of the claim, as they developed in the first quarter of fiscal year 2023. The Company was also involved in additional lawsuits filed by plaintiffs who were passengers on the shuttle bus that was in the same accident. The Company settled all of these claims for an aggregate amount of $ 13.7 million, which was expensed and paid during fiscal year 2023, and as such, there was no remaining liability as of October 31, 2023. The losses associated with the collective group of claims are included within Selling, general and administrative expenses in the Company’s Consolidated Statements of Income and Comprehensive Income for the fiscal year ended October 31, 2023. The Company is in the process of seeking reimbursement of the settlement payments from its insurers; however, no loss recovery asset has been recorded as of October 31, 2025 .
Note 17. Earnings Per Common Share
Basic earnings per common share (“EPS”) is computed by dividing net income by the weighted average number of common shares outstanding. Diluted EPS is computed by dividing net 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, PSUs, RSUs, and RSAs. The table below reconciles basic weighted-average common shares outstanding to diluted weighted-average shares outstanding:
Fiscal Year Ended
October 31,
October 31,
October 31,
Basic weighted-average common shares outstanding
Dilutive stock options
Dilutive RSAs
Dilutive RSUs
Dilutive PSUs
Diluted weighted-average common shares
The table below represents exclusions from the calculation of diluted weighted-average shares outstanding due to their anti-dilutive effect:
Fiscal Year Ended
October 31,
October 31,
October 31,
Anti-Dilutive Shares
Note 18. Business Segment Information
During the first fiscal quarter of 2024, the Company formed the Specialty Vehicles Segment by combining the Fire & Emergency and Commercial segment businesses. Additionally, the Recreation segment was renamed Recreational Vehicles. As a result, the Company is organized into two reportable segments, which is aligned with the chief operating decision maker's (“CODM”) internal reporting structure and with the CODM's process for making operating decisions, allocating capital and measuring performance. The President and Chief Executive Officer is the Company's CODM. All segment information has been recast to conform to the new reportable segments. The Company’s segments are as follows:
Specialty Vehicles : This segment includes E-One, Ferrara, KME, Spartan Emergency Response, Smeal, Spartan Fire Chassis, Ladder Tower, AEV, Horton, Leader, Road Rescue, Wheeled Coach, Capacity, and LayMor. These businesses manufacture, market and distribute commercial and custom fire and ambulance vehicles primarily for fire departments, airports, other governmental units, contractors, hospitals and other care providers in the United States and other countries, trucks used in terminal type operations, i.e., rail yards, warehouses, rail terminals and shipping terminals/ports; and industrial sweepers for both the commercial and rental markets.
Recreational Vehicles : This segment includes American Coach, Fleetwood RV, Holiday Rambler, Renegade RV, and Midwest Automotive Designs, and their respective manufacturing facilities, service and parts divisions. REV Recreation Group primarily manufactures, markets and distributes Class A RVs in both gas and diesel models, and also distributes Class B and Class C RVs. Renegade primarily manufactures, markets and distributes Class C and “Super C” RVs. Midwest manufactures, markets and distributes Class B RVs and luxury vans. Goldshield manufactures, markets and distributes fiberglass reinforced molded parts to a diverse cross section of original equipment manufacturers and other commercial and industrial customers, including various components for REV Recreation Group’s Fleetwood family of brands.
For purposes of measuring financial performance of its business segments, the Company does not allocate to individual business segments costs or items that are of a corporate nature. The caption “Corporate, Other & Elims” includes corporate expenses, results of insignificant operations, intersegment eliminations and income and expense not allocated to reportable segments.
Total assets of the business segments exclude general corporate assets, which principally consist of cash and cash equivalents, certain property, plant and equipment and certain other assets pertaining to corporate and other centralized activities.
Intersegment sales generally include amounts invoiced by a segment for work performed for another segment. Amounts are based on actual work performed and agreed-upon pricing which is intended to be reflective of the contribution made by the supplying business segment. All intersegment transactions have been eliminated in consolidation.
The CODM uses Adjusted EBITDA to evaluate the performance of the reportable segments as well as in the budgeting and forecasting process. In making this evaluation, the CODM regularly evaluates Adjusted EBITDA in relation to prior period results and forecasted amounts. The CODM also uses Adjusted EBITDA to determine the allocation of resources, investment in strategic initiatives and capital investments, and to make overall operating decisions for the reportable segments. Adjusted EBITDA is defined as net income for the relevant period before depreciation and amortization, interest expense, and income taxes, as adjusted for items management believes are not indicative of the Company’s ongoing operating performance. Adjusted EBITDA is not a measure defined by U.S. GAAP but is computed using amounts that are determined in accordance with U.S. GAAP. A reconciliation of this performance measure to net income is included below.
The Company believes Adjusted EBITDA is useful to investors and used by management for measuring profitability because the measure excludes the impact of certain items which management believes have less bearing on the Company’s core operating performance, and allows for a more meaningful comparison of operating fundamentals between companies within its industries. 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.
Below is a breakout of Net Sales, significant segment expenses, and a reconciliation of segment Adjusted EBITDA to Net income:
Fiscal Year 2025
Specialty Vehicles
Recreational
Vehicles
Corporate,
Other & Elims
Consolidated
Net Sales
Cost of Sales
Selling, general and administrative
Other segment items(a)
Adjusted EBITDA
Depreciation and amortization
Interest expense, net
Provision for income taxes
Transaction expenses
Stock-based compensation expense
Legal and related matters
Net loss on sale of business and assets
Other items
Net Income
Fiscal Year 2024
Specialty Vehicles
Recreational
Vehicles
Corporate,
Other & Elims
Consolidated
Net Sales
Cost of Sales
Selling, general and administrative
Other segment items(a)
Adjusted EBITDA
Depreciation and amortization
Interest expense, net
Provision for income taxes
Transaction expenses
Sponsor expense reimbursement
Restructuring
Restructuring related charges
Impairment charges
Stock-based compensation expense
Legal and related matters
Gain on sale of business and assets
Net Income
Fiscal Year 2023
Specialty Vehicles
Recreational
Vehicles
Corporate,
Other & Elims
Consolidated
Net Sales
Cost of Sales
Selling, general and administrative
Other segment items(a)
Adjusted EBITDA
Depreciation and amortization
Interest expense, net
Provision for income taxes
Transaction expenses
Sponsor expense reimbursement
Restructuring related charges
Stock-based compensation expense
Legal and related matters
Other items
Net Income
(a) Other segment items primarily includes depreciation, amortization, stock-based compensation expense, and other amounts included in Cost of Sales and/or Selling, general and administrative expense, which are not included in the measurement of Adjusted EBITDA.
Selected financial information of the Company's segments is as follows:
Fiscal Year Ended
Capital Expenditures
October 31,
October 31,
October 31,
Specialty Vehicles
Recreational Vehicles
Corporate and Other
Consolidated
Total Assets
October 31,
October 31,
Specialty Vehicles
Recreational Vehicles
Corporate and Other
Consolidated
The following tables present net sales by geographic region based on product shipment destination for fiscal years 2025, 2024 and 2023:
Fiscal Year 2025
North America
Rest of World
Total
Specialty Vehicles
Recreational Vehicles
Corporate, Other & Elims
Total Net Sales
Fiscal Year 2024
North America
Rest of World
Total
Specialty Vehicles
Recreational Vehicles
Corporate, Other & Elims
Total Net Sales
Fiscal Year 2023
North America
Rest of World
Total
Specialty Vehicles
Recreational Vehicles
Corporate, Other & Elims
Total Net Sales
