INVESTOR PRESENTATION

Transcription

1 REV GROUP, INC. INVESTOR PRESENTATION NYSE:REVG April 2018

2 Cautionary Statements & Non GAAP Measures Disclaimers Note Regarding Non-GAAP Measures REV Group reports its financial results in accordance with U.S. generally accepted accounting principles ( GAAP ). However, management believes that the evaluation of REV Group s ongoing operating results may be enhanced by a presentation of Adjusted EBITDA and Adjusted Net Income, which are non-gaap financial measures. Adjusted EBITDA represents net income before interest expense, income taxes, depreciation and amortization as adjusted for certain non-recurring, one-time and other adjustments which REV Group believes are not indicative of its underlying operating performance. Adjusted Net Income represents net income, as adjusted for certain items described below that we believe are not indicative of our ongoing operating performance. REV Group believes that the use of Adjusted EBITDA and Adjusted Net Income provides additional meaningful methods of evaluating certain aspects of its operating performance from period to period on a basis that may not be otherwise apparent under GAAP when used in addition to, and not in lieu of, GAAP measures. See the Appendix to this presentation (and our other filings with the SEC) for reconciliations of Adjusted EBITDA and Adjusted Net Income to the most closely comparable financial measures calculated in accordance with GAAP. Cautionary Statement About Forward-Looking Statements This presentation contains statements that REV Group believes to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms believes, estimates, anticipates, expects, strives, goal, seeks, projects, intends, forecasts, plans, may, will or should or, in each case, their negative or other variations or comparable terminology. They appear in a number of places throughout this presentation and include statements regarding REV Group s intentions, beliefs, goals or current expectations concerning, among other things, its results of operations, financial condition, liquidity, prospects, growth, strategies and the industries in which we operate, including REV Group s outlook for the full-year fiscal REV Group s forward-looking statements are subject to risks and uncertainties, including those highlighted under Risk Factors and Cautionary Note Regarding on Forward-Looking Statements in REV Group s public filings with the SEC and the other risk factors described from time to time in subsequent quarterly or annual reports on Forms 10-Q or 10-K, which may cause actual results to differ materially from those projected or implied by the forward-looking statement. Forward-looking statements are based on current expectations and assumptions and currently available data and are neither predictions nor guarantees of future events or performance. You should not place undue reliance on forward-looking statements, which only speak as of the date of this presentation. REV Group does not undertake to update or revise any forward-looking statements after they are made, whether as a result of new information, future events, or otherwise, expect as required by applicable law. 2

3 Investment Highlights 1 A Market Leader with Iconic Brands and One of the Largest Installed Bases of Vehicles 2 3 Serves Attractive, Diverse & Growing End-Markets with Strong Macro Tailwinds & Significant Pent-Up Demand Multiple Controllable Growth & Synergy Levers to Drive Significant Earnings Growth and a long-term goal of a 10% EBITDA Margin 4 Opportunity to Leverage Proven Track Record of Successful Acquisitions to Realize Incremental Upside from M&A 5 Unique and Attractive Financial Profile 6 Proven, Experienced and Aligned Management Team 3

4 COMPANY OVERVIEW

5 REV HAS A DIVERSE PORTFOLIO OF VEHICLES, EACH DISTINCTLY POSITIONED TO TARGET SPECIFIC CUSTOMER REQUIREMENTS & PRICE POINTS One of the Industry s Broadest Product Portfolios of Specialty Vehicles FIRE + EMERGENCY PUMPER/TANKER AERIEL FIRE TRUCK WITH LADDER AIRCRAFT RESCULE FIRE FIGHTER AMBULANCE TYPE I AMBULANCE TYPE II AMBULANCE TYPE III COMMERCIAL TYPE A SCHOOL BUSES TRANSIT BUS MOTORCOACH SHUTTLE BUS TERMINAL TRUCKS SWEEPERS MOBILITY VAN RECREATION CLASS A DIESEL CLASS A GASOLINE CLASS B CLASS C SUPER C TRUCK CAMPERS TRAVEL TRAILERS 5

6 REV at a Glance NET SALES BY SEGMENT Commercial 29% Fire & Emergency 44% Recreation 27% $2.3B IN 2017 SALES $163M IN 2017 ADJ. EBITDA 6

7 REV Sales at a Glance Sales Mix 1 BY VEHICLE TYPE BY CUSTOMER TYPE BY CHANNEL RV 29% Specialty 6% Ambulance 23% Fire Apparatus 21% Industrial / Commercial, Private 12% Contractor, 10% Consumer, 28% Government, 50% Direct 27% Dealer 73% Transit Bus 7% Commercial Bus 8% Type A School Bus 6% 1 Represents full year Fiscal 2017, ended October 31,

8 OVER 5 MILLION SQUARE FEET OF NATIONAL MANUFACTURING, SALES, & SERVICE FACILITIES PROVIDE REV WITH A COMPETITIVE ADVANTAGE A Leading Plant and Service Network 22 Manufacturing Locations 4 Ambulance Plants 5 Fire Plants 7 REV Technical Centers for Fire & Emergency 6 RV Plants 4 Parts Warehouse 4 Bus Plants 3 REV Technical Centers ("RTC") for RVs 2 Specialty Plants 1 REV Corp. Office Additional International Plants: Sorocaba, Brazil; Wuhu, China (JV) 14 After Market Parts and Service Locations 8

9 REPLACEMENT DEMAND FOR THE AGING FLEET OF REV S PRODUCTS REPRESENTS A SIGNIFICANT REVENUE GROWTH OPPORTUNITY Large Installed Base Drives Recurring Replacement Sales REPLACEMENT VALUE OF REV S INSTALLED BASE AVERAGE LIFE CYCLE & SELLING PRICE INCREMENTAL IMPACT OF RECENT ACQUISITIONS WHY CUSTOMERS CHOOSE REV FOR REPLACEMENT FIRE PUMPER TRUCKS: YEARS ($160K- $650K) AERIAL FIRETRUCKS: YEARS ($475K- $1.2MM) Repeat purchase to match in-service fleets ~$36 AMBULANCE AMBULANCE: 5-7 YEARS ($65K- $350K) Brand loyalty and reputation for value, quality, and reliability BILLION REPLACEMENT VALUE OF REV S IN- SERVICE FLEET 1 BUS SHUTTLE BUS: 5-10 YEARS ($40K- $190K) TRANSIT BUS: 12 YEARS ($100K- $500K) SCHOOL BUS: 8-10 YEARS ($35K- $55K) LUXURY BUSES Long-standing customer relationships Broad, customizable vehicle platform SPECIALTY SPECIALTY VEHICLES: 5-7 YEARS ($25K- $165K) Superior product quality and safety RV RECREATION VEHICLES: 8-15 YEARS ($65K- $600K) CLASS B RVS Network of aftermarket parts and service centers Source: Management estimate Note: Replacement sales opportunity is calculated as the average number of annual units sold multiplied by the average useful life multiplied by the average selling price. ¹ Does not include the replacement value of the fleets from the 2017 and 2018 acquisitions. 9

10 REV S END- MARKETS HAVE POSITIVE TAILWINDS ACROSS EACH SEGMENT AS UNIT SALES CONTINUE TO TREND TOWARD PRE- RECESSION LEVELS Growing End-Markets Benefit from Significant Incremental Pent-Up Demand KEY FACTS & COMMENTARY END- MARKET GROWTH FIRE + EMERGENCY Aging population and urbanization drives demand Fire and Ambulance demand rising since ,000 10,000 8,000 6,000 FIRE APPARATUS UNIT SALES Cumulative Pent-Up Demand of 14,000 units 12,000 10,000 8,000 6,000 AMBULANCE UNIT SALES Cumulative Pent-Up Demand of 4,500 units Pent-up demand of 18,500 units for fire apparatus & ambulances since 2008 recession 4,000 2,000 0 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 ' ,000 2,000 0 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 44% of Net Sales 2 Pre-2008 Average Actual Cumulative Pent-up Demand Pre-2008 Average Actual Cumulative Shortfall COMMERCIAL Urbanization increasing demand for buses Outsourcing of transportation services SHUTTLE BUS UNIT SALES (000s) Growth expected to continue U.S. SCHOOL BUS SALES (000s) Unit Sales Below 2006 peak Legislated replacement requirements 29% of Net Sales RECREATION 27% of Net Sales 2 Poised for long-term growth with industry recovery Increasing participation rates demonstrate longterm trend toward RV ownership MOTORIZED RV UNIT SALES (000s) CLASS A MOTORIZED RV UNIT SALES (000s) Recreation sales below pre-recession average Pre-Rec. Avg Pre-Rec. Avg Pre-Recession Average 1 Pre-Recession Average 1 Source: FAMA, NTEA AMD, RVIA, Mid-Size Bus Manufacturers Association ( MSBMA ), Management Estimate ¹ Pre-recession average reflects the average from 1989 to Percentage of FY2017 net sales. 10

11 REV BELIEVES THE AFTERMARKET PARTS OPPORTUNITY FOR ITS VEHICLES IN SERVICE IS ~$800 MILLION ANNUALLY Multiple Controllable Growth Levers Large Aftermarket Parts Growth Opportunity REV AFTERMARKET OPPORTUNITY & CAPABILITIES REV MARKET SHARE OF ~$800 MILLION PARTS OPPORTUNITY ~$800 MILLION ANNUAL VALUE OF REV AFTERMARKET PARTS OPPORTUNITY 14 AFTERMARKET AND PARTS FACILITIES ~240,000 UNIT INSTALLED BASE ~$27 MILLION INVESTMENT IN FY CURRENT MARKET SHARE 1 REV 10% UPSIDE OPPORTUNITY Expand market share in high margin aftermarket parts and service Dedicated management team to oversee aftermarket business executing comprehensive aftermarket strategy Investing in building out capabilities including 4 dedicated parts warehouses ONLINE TECHNOLOGY PLATFORM Centralizing aftermarket parts and services business to broaden market coverage Establishing a web-based platform to provide customers with real time data on parts availability REV ANNOUNCED THE START OF A NEW COLLABORATIVE CONNECTION WITH FORD MOTOR COMPANY DEALERS FOR PARTS IN SEPTEMBER 2017 AND THE START OF A NEW SERVICE PARTNERSHIP WITH RYDER SYSTEM IN MAY 2017 Establishing new partnerships to enhance capabilities and availability of parts in efficient manner ¹ Market share management estimate based on FY2017 results. 11

12 ROADMAP TO DRIVE EBITDA GROWTH OVER THE LONG- TERM WITH ADDITIONAL UPSIDE THROUGH M&A, FUTHER END MARKET RECOVERY, AND ENTRY INTO NEW ADJACENT MARKET SEGMENTS Multiple Controllable Growth Levers Many Achievable Paths to Significant EBITDA Growth ~6% ADJ. EBITDA MARGIN ~7% ADJ. EBITDA MARGIN $163 A B C D E F G ~10% ADJ. EBITDA MARGIN $123 CONTROLLABLE FACTORS 2016 ADJ. EBITDA 2017 ADJ. EBITDA COST & EFFICIENCY AFTERMARKET GROWTH MARKET SHARE GROWTH NEW PRODUCT AND INITIATIVES CONSERVATIVE MARKET GROWTH LONG- TERM EBITDA MARGIN TARGET M&A UPSIDE MARKET RECOVERY UPSIDE EBITDA WITH UPSIDE OPPORTUNITY A COST & EFFICIENCY B AFTERMARKET GROWTH MARKET SHARE GROWTH C D NEW PRODUCTS & INITATIVES Continued facility consolidation and optimization Cost of quality/warranty reduction Procurement optimization ~$800mm 1 annual sales opportunity ~$36 billion 1 installed base Higher margin opportunity Continue broadening dealer coverage Entrance into previously underaddressed end-markets RV re-entry into Class C category and improved Class A share Ambulance remounts Continued product innovation expands addressable market 18 new products launched in 2017 E Market Growth F M&A G Additional Market Recovery F&E: Municipal spending and pent-up demand Commercial: Urbanization, aging population, municipal spending Recreation: Continued recovery in volumes to pre-recession levels Highly fragmented market Large number of bolt-on opportunities Potential for transformative M&A INCREMENTAL UPSIDE Many end-markets are still below historical averages Significant upside if end-markets continue to recover to pre-recession levels INCREMENTAL UPSIDE Note: These targets are forward-looking, are subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the control of the Company and its management, and are based upon assumptions with respect to future decisions, which are subject to change. Actual results may vary and these variations may be material. For discussion of some of the important factors that could cause these variations, please consult the "Risk Factors" section of the Company s Form 10-K. Nothing in this presentation should be regarded as a representation by any person that these goals will be achieved and the Company undertakes no duty to update its goals. 12

13 China JV Joint venture to manufacture RVs, ambulances and other specialty vehicles for distribution within China and select international markets The RV industry in China will be fueled by an increased level of spending on travel and leisure, with support from the Chinese government SYNERGY OPPORTUNITIES: The ambulance industry in China is poised for strong growth, with replacement demand, more stringent regulatory requirement, an aging population and increase in healthcare budget Partnership commenced in December

14 China JV RVs Ambulances Truck Camper Low-tier Class B Mid-tier Class C Top-tier 14

15 Daimler Strategic Alliance Strategic partnership (JV) with Daimler in which REV will be the exclusive general distributor for Setra motorcoaches in North America. As the general distributor, REV represents the Setra brand in: New and used sales Aftermarket parts and service REV is now supporting current Setra operators and leverage existing relationships with SYNERGY OPPORTUNITIES: motorcoach charter companies to enhance Setra s market share position Broader strategic opportunities actively being discussed to further enhance long-term market presence Partnership commenced in December

16 Daimler Strategic Alliance Products 16

17 REV is a Consolidator Disrupting the Specialty Vehicle Industry REV IS POISED TO CAPITALIZE ON MOMENTUM TO CONTINUE REDEFINING THE SPECIALTY VEHICLE INDUSTRY Unique size and scale amongst specialty vehicle manufacturers As a multi-line producer, offers unique cross-selling and cost synergy opportunities Differentiated business model versus competitors 14 acquisitions completed since 2006 ASV IS FORMED $1.2 BILLION IN SALES 1 $1.9 BILLION IN SALES 2 TIM SULLIVAN BECOMES ASV CEO 1960s SEVERAL BRANDS FOUNDED THEIR SPECAILTY VEHICLE SEGMENTS AND DATE BACK MORE THAN 50 YEARS ASV RENAMED AND REBRANDED REV GROUP AIP PORTFOLIO COMPANIES FUTURE Acquisitions Milestones ¹ Represents FY Represents FY

18 FINANCIAL OVERVIEW

19 REV s Sales Growth Impressive Growth and Significant Upside Opportunity Revenue ($ millions) $1,721 $1,735 $1,926 $2,268 $2,700 $2,400 Upper end Lower end Outlook 19

20 REV s Earnings Growth Impressive Growth and Significant Upside Opportunity Adjusted EBITDA 1 $163 $220 $200 Upper end Lower end $123 $62 $ Outlook Margin (%) 3.6% 5.2% 6.4% 7.2% 1 See appendix of this presentation for a reconciliation of Adj. EBITDA to Net Income. Note: Refer to the company s form S-1 dated January 17, 2017 for reconciliations of GAAP to Non-GAAP metrics for fiscal years Refer to the company s form 8-K filed on December 19, 2017 for reconciliations of GAAP to Non-GAAP metrics for fiscal year

21 Impressive Growth and Continued Growth Opportunities ADJUSTED NET INCOME RETURN ON INVESTED CAPITAL ($ millions) $53 $ % 15.8% 16.3% $34 9.1% $14 Margin (%) 0.8% % 2.9% 3.3% ROIC Return on Invested Capital defined as after-tax Adj. EBITDA divided by total debt, less current maturities, plus total shareholders equity; assumes 36.5% effective tax rate for all years presented. 21

22 Balance Sheet Strength & Liquidity Focus to improve conversion of working capital to cash Existing debt reduced with excess cash Earnings growth drives increased liquidity Capacity to pursue opportunistic acquisitions Net Debt Net Working Capital % Sales Total Leverage $ in millions $225 $213 $256 $ % 16.7% 18.8% 20.0% 3.4x 2.3x 2.0x 1.3x Note: Net Debt equals total debt less cash and cash equivalents; Net working capital equals A/R + Inventory A/P; Total leverage is calculated as Net Debt divided by Adjusted EBITDA. 22

23 Seasonality of Sales and EBITDA Trend Quarterly Sales and Adj. EBITDA Fiscal Adj. EBITDA $70 $60 $50 $40 $30 $20 $10 $0 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 $800 $700 $600 $500 $400 $300 $200 $100 $0 Sales Quarterly Sales Quarterly Adj. EBITDA 23

24 ATTRACTIVE CHARACTERISTICS INCLUDING VARIABLE COST STRUCTURE AND BALANCE SHEET FLEXIBILITY Unique and Attractive Financial Profile VARIABLE COST STRUCTURE ADJUSTED EBITDA 1 LONG- TERM TARGETS ~85% of costs of goods sold are variable COGS BREAKDOWN Focus on achieving ~10% long-term EBITDA margin target Scaled and synergistic platform leveraging procurement, engineering, distribution, and support functions across businesses MANUFACTURING OVERHEAD LABOR CHASSIS OTHER COGS MATERIALS (EX. CHASSIS) 85% OF COGS ARE VARIABLE FLEXIBLE BALANCE SHEET Cash and equivalents of $12.7 million with approximately $143 million available under our existing credit facilities as of January 31, 2018 Leverage just over 2.0x at the end of Q1 Fiscal 2018 due to seasonality of business. Leverage expected to be < 2.0x by the end of Q3 Fiscal 2018 LONG- TERM < 2.0x EBITDA LEVERAGE TARGET VISIBLE AND RECURRING REVENUE RECREATION Primarily replacement nature of demand and, in many products, backlog provides revenue visibility Strong growth potential in recurring parts sales with highly attractive margins Source: Company management. Note: Some targets are forward-looking, are subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the control of the Company and its management, and are based upon assumptions with respect to future decisions, which are subject to change. Actual results may vary and these variations may be material. For discussion of some of the important factors that could cause these variations, please consult the "Risk Factors" section of the Company s Form 10-K. Nothing in this presentation should be regarded as a representation by any person that these goals will be achieved and the Company undertakes no duty to update its goals. $1,500 $1,000 $500 $0 F&E Commecial RV Total Q1 FY18 Backlog Q1 FY17 24

25 Consolidated First Quarter FY2018 Results FIRST QUARTER RESULTS IN LINE WITH EXPECTATIONS WITH CONTINUED STRENGTH IN DEMAND Strong 16.2% sales growth reflects the impact of acquisitions and sales increases in all segments $ 700 Net Sales Adjusted EBITDA 1 $ 40 Adjusted Net Income 1 of $9.7 million, an increase of 72% resulting from benefit of acquisitions, lower interest expense, and favorable impact of recently enacted U.S. tax reform $ 600 $ 500 $ 400 $ 300 $ 443 $ 515 $ 30 $ 20 $21.1 $21.3 Adjusted EBITDA 1 of $21.3 million was roughly flat compared to the prior year; margin negatively impacted by unfavorable mix in certain product categories and higher corporate expenses $ 200 $ 100 $ 0 1Q FY2017 Net Sales ($mm) 1Q FY2018 $ 10 $ 0 1Q 1Q FY2017 FY2018 Adj. EBITDA ($mm) ¹ For a reconciliation of net income to Adjusted Net Income and Adjusted EBITDA, see the Appendix to this presentation. 25

26 Fire & Emergency 1Q FY2018 Results F&E BACKLOG INCREASED 5% SINCE YEAR END 2017 Net Sales growth of 16.1% driven by higher fire and ambulance unit volumes, and the impact of the Ferrara acquisition Net Sales Adjusted EBITDA 1 Aerial unit delivery delay from Q1 to Q2; Ambulance sales mix impacted sales and EBITDA, volumes remain strong Ambulance remount business continues to grow year over year $ 300 $ 200 $ 185 $ 215 $25 $20 $15 $16.7 $18.2 Adjusted EBITDA 1 increased 8.7%, partially driven by the impact of the Ferrara acquisition $ 100 $10 $5 Ferrara integration is on track We see continued strength of demand in both the fire and ambulance markets, supported by 5% increase in segment backlog during the quarter $ 0 1Q FY2017 Net Sales ($mm) 1Q FY2018 $0 1Q FY2017 1Q FY2018 Adj. EBITDA ($mm) ¹ For a reconciliation of net income (loss) to Adjusted Net Income and Adjusted EBITDA, see the Appendix to this presentation. 26

27 Commercial 1Q FY2018 Results COMMERCIAL END MARKETS REMAIN STRONG, MARGINS EXPECTED TO IMPROVE Net Sales increased 1.5% over prior year driven by higher unit sales in all segment product categories, excluding school bus $ 200 Net Sales Adjusted EBITDA 1 $ 10 Commercial Adjusted EBITDA 1 declined $3.7 million year-over-year due to lower school bus sales, a shift in timing of transit bus unit shipments and higher shuttle bus sales $ 150 $ 100 $ 130 $ 132 $ 8 $ 6 $ 4 $8.2 $4.5 Adjusted EBITDA margin also impacted by costs related to manufacturing process improvements at one shuttle bus facility $ 50 $ 0 1Q FY2017 1Q FY2018 $ 2 $ 0 1Q FY2017 1Q FY2018 Monitoring a strong pipeline of sales opportunities Net Sales ($mm) Adj. EBITDA ($mm) ¹ For a reconciliation of net income (loss) to Adjusted Net Income and Adjusted EBITDA, see the Appendix to this presentation. 27

28 Recreation 1Q FY2018 Results STRONG EARNINGS GROWTH AND OPERATING LEVERAGE FOLLOWING COST INITIATIVES AND ACQUISITIONS Net Sales grew 32.0% from improving market position and impact of acquisitions; Renegade and Midwest Q1 sales were up over prior year Q1 Adjusted EBITDA 1 grew significantly driven by higher unit volumes, product mix, continued benefit from ongoing operating initiatives and the results from acquired companies $ 180 $ 160 $ 140 $ 120 $ 100 Net Sales Adjusted EBITDA 1 $ 167 $ 12 $ 127 $ 9 $8.2 We continue to rationalize our models and floorplans within the Class A product line, this resulted in lower Class A shipments in Q1 FY18 vs. Q1 FY17 $ 80 $ 60 $ 40 $ 6 $ 3 $2.8 Segment backlog at the end of the first quarter was $281.8 million, up 94.6 percent from the end of fiscal year 2017 $ 20 $ 0 1Q FY2017 1Q FY2018 $ 0 1Q FY2017 1Q FY2018 Net Sales ($mm) Adj. EBITDA ($mm) ¹ For a reconciliation of net income (loss) to Adjusted Net Income and Adjusted EBITDA, see the Appendix to this presentation. 28

29 Full Year Fiscal 2018 Guidance DOUBLE DIGIT SALES GROWTH COUPLED WITH GREATER ADJUSTED EBITDA GROWTH FULL YEAR 2017 OUTLOOK Net Sales: $2.4 billion to $2.7 billion Net Income of $90 million to $110 million Continues prior historical trend of strong top line annual growth exceeded by earnings growth Adjusted EBITDA: $200 million to $220 million Adjusted Net Income of $110 million to $125 million Capital expenditures of $40 - $45 million ~30% growth in Adjusted EBITDA in 2018 long-term target of 10% EBITDA margin 29

30 APPENDIX

31 Reconciliation of Net Income (Loss) to Adjusted EBITDA by Segment FIRST QUARTER 2018 REV GROUP, INC. ADJUSTED EBITDA BY SEGMENT (Unaudited; in thousands) Three Months Ended January 31, 2018 Fire & Emergency Commercial Recreation Corporate & Other Total Net Income (loss) $ 11,557 $ 460 $ 2,845 $ (5,441) $ 9,421 Depreciation & amortization 4,522 2,836 2, ,017 Interest expense, net 1, ,606 5,417 Benefit for income taxes (13,842) (13,842) EBITDA 17,127 3,941 5,898 (14,953) 12,013 Restructuring costs 56-2,254 1,742 4,052 Transaction expenses ,398 1,555 Stock-based compensation expense ,750 1,750 Non-cash purchase accounting expense Sponsor expenses Legal Settlements Deferred purchase price payment Adjusted EBITDA $ 18,166 $ 4,460 $ 8,152 $ (9,476) $ 21,302 31

32 Reconciliation of Net Income (Loss) to Adjusted EBITDA by Segment FIRST QUARTER 2017 REV GROUP, INC. ADJUSTED EBITDA BY SEGMENT (Unaudited; in thousands) Three Months Ended January 28, 2017 Fire & Emergency Commercial Recreation Corporate & Other Total Net Income (loss) $ 12,698 $ 4,563 $ 139 $ (30,703) $ (13,303) Depreciation & amortization 2,809 1,930 2, ,421 Interest expense, net 1, ,447 7,478 Provision (benefit) for income taxes (7,833) (7,829) EBITDA 16,683 7,310 2,338 (32,564) (6,233) Restructuring costs Transaction expenses Stock-based compensation expense ,506 25,506 Non-cash purchase accounting expense Sponsor expenses Adjusted EBITDA $ 16,713 $ 8,174 $ 2,773 $ (6,549) $ 21,111 32

33 Reconciliation of Net Income (Loss) to Adjusted Net Income FIRST QUARTER 2017 & 2018 REV GROUP, INC. ADJUSTED NET INCOME (Unaudited; in thousands) Three Months Ended January 31, 2018 January 28, 2017 Net income (loss) $ 9,421 $ (13,303) Amortization of Intangible Assets 4,766 2,614 Restructuring Costs 4, Transaction Expenses 1, Stock-based Compensation Expense 1,750 25,506 Non-cash Purchase Accounting Expense Sponsor Expenses Legal Settlements 710 Deferred Purchase Price Payment 392 Impact of Tax Rate Change (10,414) Income Tax Effect of Adjustments (3,313) (10,987) Adjusted Net Income $ 9,749 $ 5,668 33

34 111 E. KILBOURN AVENUE, SUITE 2600, MILWAUKEE, WI (414) REVGROUP.COM