REV GROUP, INC. Administration’s Dialogue and Evaluation of Monetary Situation and Outcomes of Operations. (kind 10-Okay)

Row of Camper Vans Motorhomes on the Ridge at Night. Mountain RV Camping in the Italian Dolomites. Starry Summer Sky.

[ad_1]

It is best to learn the next dialogue and evaluation of our monetary situation
and outcomes of operations along with our consolidated monetary statements
and the associated notes showing elsewhere on this Annual Report on Kind 10-Okay.
A few of the data contained on this dialogue and evaluation or set forth
elsewhere on this Annual Report on Kind 10-Okay, together with data with respect
to our plans and technique for our enterprise and associated financing, contains
forward-looking statements that contain dangers and uncertainties. It is best to learn
the "Cautionary Assertion About Ahead-Wanting Statements" and "Threat Components"
sections of this Annual Report on Kind 10-Okay for a dialogue of essential
elements that would trigger precise outcomes to vary materially from the outcomes
described in or implied by the forward-looking statements contained within the
following dialogue and evaluation.

This dialogue and evaluation ought to be learn together with the accompanying
audited consolidated monetary statements and associated notes showing elsewhere
on this Annual Report on Kind 10-Okay.

Overview

REV Group corporations are main designers, producers, and distributors of
specialty automobiles and associated aftermarket elements and companies. We serve a
diversified buyer base, primarily in the US and Canada, by means of
three segments: Hearth & Emergency, Industrial, and Recreation. We offer
personalized automobile options for purposes, together with important wants for
public companies (ambulances, hearth equipment, faculty buses, and transit buses),
business infrastructure (terminal vans and industrial sweepers) and shopper
leisure (leisure automobiles). Our numerous portfolio is made up of
well-established principal automobile manufacturers, together with lots of the most
recognizable names inside their trade. A number of of our manufacturers pioneered their
specialty automobile product classes and date again greater than 50 years. We
consider that in most of our markets, we maintain the primary, second or third market
share place and roughly 88% of our web gross sales throughout fiscal 12 months 2021
got here from merchandise the place we consider we maintain such share positions.

Segments

Hearth & Emergency - The Hearth & Emergency phase sells hearth equipment tools
underneath the Emergency One ("E-ONE"), Kovatch Cell Gear ("KME")Ferrara, and
Spartan Emergency Response ("Spartan ER") which consists of Spartan Emergency
Response, Smeal, and Ladder Tower manufacturers and ambulances underneath the American
Emergency Autos ("AEV"), Horton Emergency Autos ("Horton"), Chief
Emergency Autos ("Chief"), Street Rescue and Wheeled Coach manufacturers. We consider
we're the biggest producer by unit quantity of fireplace and emergency automobiles in
the US and have one of many trade's broadest portfolios of merchandise
together with Kind I ambulances (aluminum physique mounted on a heavy truck-style
chassis), Kind II ambulances (van conversion ambulance), Kind III ambulances
(aluminum physique mounted on a van-style chassis), pumpers (hearth equipment on a
customized or business chassis with a water pump and water tank to extinguish
fires), ladder vans (hearth equipment with chrome steel or aluminum ladders),
tanker vans and rescue, plane rescue firefighting ("ARFF"), customized cabs &
chassis and different automobiles. Every of our particular person manufacturers is distinctly
positioned and targets sure worth and have factors out there such that
sellers typically carry, and prospects typically purchase multiple REV Hearth & Emergency
product line.

Industrial - Our Industrial phase serves the bus market by means of the Collins
Bus and ENC manufacturers. We serve the terminal truck market by means of the Capability
model and the sweeper market by means of the Lay-Mor model. Our merchandise within the
Industrial phase embrace transit buses (massive municipal buses the place we construct
our personal chassis and physique), Kind A college buses (small faculty bus constructed on
business chassis), sweepers (three- and four-wheel variations utilized in highway
building actions), and terminal vans (specialised automobiles which transfer
freight in warehouses, intermodal yards, distribution and achievement facilities
and ports). Inside every market, we produce many personalized configurations to
deal with the various wants of our prospects.

Recreation - Our Recreation phase serves the RV market by means of the next
principal manufacturers: American Coach, Fleetwood RV, Vacation Rambler, Renegade,
Midwest and Lance. We consider our model portfolio accommodates a number of the longest
standing, most acknowledged manufacturers within the RV trade. Below these manufacturers, REV
offers quite a lot of extremely acknowledged motorized and towable RV fashions reminiscent of:
American Eagle, Bounder, Tempo Arrow, Discovery LXE, Verona, Weekender and Lance,
amongst others. Our merchandise within the Recreation phase embrace Class A motorized
RVs (motorhomes constructed on a heavy-duty chassis with both diesel or fuel engine
configurations), Class C and "Tremendous C" motorized RVs (motorhomes constructed on a
business truck or van chassis), Class B RVs (motorhomes constructed out inside a van
chassis and high-end luxurious van conversions), and towable journey trailers and
truck campers. The Recreation phase additionally contains Goldshield Fiberglass, which
produces a variety of customized molded fiberglass merchandise for the heavy-duty
truck, RV and broader industrial markets.

                                       38

——————————————————————————–

Desk of Contents

Components Affecting Our Efficiency

The first elements affecting our outcomes of operations embrace:

Basic Financial Situations

Our enterprise is impacted by the U.S. financial surroundings, employment ranges,
shopper confidence, municipal spending, municipal tax receipts, adjustments in
rates of interest and instability in securities markets all over the world, amongst
different elements. Particularly, adjustments within the U.S. financial local weather can affect
demand in key finish markets. As well as, we're vulnerable to provide chain
disruptions ensuing from the affect of tariffs and world macro-economic
elements (seek advice from "Affect of COVID-19" part beneath), which might have a dramatic
impact, both immediately or not directly, on the supply, lead-times and prices
related to uncooked supplies and elements.

RV purchases are discretionary in nature and subsequently delicate to the
availability of financing, shopper confidence, unemployment ranges, ranges of
disposable revenue and altering ranges of shopper house fairness, amongst different
elements. RV markets are affected by normal U.S. and world financial circumstances,
which create dangers that future financial downturns will additional scale back shopper
demand and negatively affect our gross sales.

Whereas much less economically delicate than the Recreation phase, the Hearth &
Emergency phase and the Industrial phase are additionally impacted by the general
financial surroundings. Native tax revenues are an essential supply of funding for
hearth and emergency response departments. Hearth and emergency merchandise and buses
are usually a bigger price merchandise for municipalities and their service life is
comparatively lengthy, making the acquisition extra deferrable, which may end up in
decreased demand for our merchandise. Along with business demand, native, state
and federal tax revenues might be an essential supply of funding for a lot of of our
bus merchandise together with Kind A college buses and transit buses. Volatility in tax
revenues or availability of funds by way of budgetary appropriation can have a
damaging affect on the demand for these merchandise.

A lower in employment ranges, shopper confidence or the supply of
financing, or different antagonistic financial occasions, or the failure of precise demand for
our merchandise to satisfy our estimates, may negatively have an effect on the demand for our
merchandise. Any decline in total buyer demand in markets wherein we function
may have a fabric antagonistic impact on our working efficiency.

Seasonality

In a typical 12 months, our working outcomes are impacted by seasonality.
Traditionally, the slowest gross sales quantity quarter has been the primary fiscal quarter
when the buying seasons for automobiles, reminiscent of faculty buses, RVs and sweepers
are the bottom because of the colder climate and the comparatively very long time till the
summer time trip season, and the truth that the college 12 months is underway with
municipalities and faculty bus contractors using their present fleets to
transport scholar populations. Gross sales of our merchandise have usually been greater
within the second, third and fourth fiscal quarters (with the fourth fiscal quarter
usually being the strongest) attributable to higher climate, the holiday season,
shopping for habits of RV sellers and end-users, timing of presidency/municipal
buyer fiscal years, and the start of a brand new faculty 12 months. Our quarterly
outcomes of operations, money flows, and liquidity are more likely to be impacted by
these seasonal patterns. Gross sales and earnings for different automobiles that we produce,
reminiscent of important emergency automobiles and business bus fleets, are much less
seasonal, however fluctuations in gross sales of those automobiles can be impacted by
timing surrounding the fiscal years of municipalities and business prospects,
in addition to the timing and quantities of multi-unit orders.

Affect of Acquisitions

We actively consider alternatives to enhance and broaden our enterprise by means of
focused acquisitions which are in line with our technique. We additionally might dispose
of sure parts of our enterprise that now not match inside our total
technique. Traditionally, a significant factor of our progress has been by means of
acquisitions of companies. We usually incur upfront prices as we combine
acquired companies and implement our working philosophy at newly acquired
corporations, together with consolidation of provides and supplies, purchases,
enhancements to manufacturing processes, and different restructuring initiatives. The
advantages of those integration efforts and divestiture actions might not
positively affect our monetary outcomes till subsequent durations.

We acknowledge acquired belongings and liabilities at honest worth. This contains the
recognition of recognized intangible belongings and goodwill which, within the case of
definite-life intangible belongings, are then amortized over their anticipated helpful
lives, which usually ends in a rise in amortization expense. In
addition, belongings acquired and liabilities assumed usually embrace tangible
belongings in addition to contingent belongings and liabilities. In the course of the second quarter
of fiscal 12 months 2020, we acquired Spartan ER, a number one designer, producer
and distributor of customized emergency response automobiles, cabs and chassis for the
emergency response market.

                                       39

——————————————————————————–

  Desk of Contents



Affect of COVID-19

Throughout our second quarter of fiscal 12 months 2020, the novel coronavirus often known as
"COVID-19" unfold all through the world creating a world pandemic. The pandemic
triggered a major downturn in world commerce and these difficult market
circumstances might proceed for an prolonged time frame. On account of the
unfold of COVID-19, we've additionally skilled disruption and delays in our provide
chain, buyer demand adjustments, and logistics challenges, together with our
prospects' potential to examine and take supply of automobiles.

Our Recreation automobiles vendor community was considerably impacted by the
pandemic and plenty of of them closed quickly earlier than reopening within the third
quarter of fiscal 12 months 2020 when shopper demand for recreation automobiles started
to speed up attributable to a rise in shopper desire to trip in a protected
and socially distant method. As of October 31, 2021 and 2020, backlog ranges
had been considerably greater than the identical interval within the prior years, respectively.

As the worldwide economic system continues to recuperate from COVID-19 associated disruption,
labor and vital provide chain challenges, reminiscent of shortages in
semiconductors, subcomponents and elevated costs of uncooked supplies, reminiscent of
metal and aluminum, have impacted operations of corporations on a world scale.
Such provide chain disruptions throughout the fiscal 12 months 2021 impacted our potential
to acquire sure uncooked supplies and bought parts which are essential to
our manufacturing processes, together with the flexibility to acquire chassis from third
social gathering suppliers. We proceed to watch these disruptions and take measures to
mitigate the related dangers.

In sure geographies there was a resurgence of COVID-19 variant circumstances and
governmental authorities proceed to implement quite a few measures in an try
to include and mitigate the unfold of COVID-19 and its variants. Whereas the
world market impacts, closures and limitations on motion are anticipated to be
non permanent, the length of any demand adjustments, manufacturing and provide chain
disruptions, and associated monetary impacts, can't be reliably estimated at this
time.

Outcomes of Operations

The next desk compares outcomes for fiscal years 2021, 2020 and 2019


                                                                Fiscal 12 months Ended
                                                 October 31,       October 31,       October 31,
(in thousands and thousands besides per share information)                 2021              2020              2019
Internet gross sales                                       $     2,380.8     $     2,277.6     $     2,403.7
Gross revenue                                            291.0             228.1             251.8
Promoting, normal and administrative                     189.0             204.9             199.3
Restructuring                                             2.5               9.9               5.7
Impairment costs                                        1.5              12.1               8.9
Loss on early extinguishment of debt                      1.4                 -                 -
Loss on sale of enterprise                                  2.8              11.1                 -
Loss on funding in China JV                            6.2                 -                 -
Loss (acquire) on acquisition of enterprise                    0.4              (8.6 )               -
Provision (profit) for revenue taxes                     11.3             (15.6 )            (3.5 )
Internet revenue (loss)                                        44.4             (30.5 )           (12.3 )

Internet revenue (loss) per widespread share
Primary                                           $        0.70     $       (0.48 )   $       (0.20 )
Diluted                                         $        0.69     $       (0.48 )   $       (0.20 )
Dividends declared per widespread share             $        0.10     $        0.10     $        0.20

Adjusted EBITDA                                 $       141.5     $        67.5     $       102.1
Adjusted Internet Revenue                             $        76.9     $         9.5     $        30.0




Internet Gross sales                                   Fiscal 12 months Ended
                 October 31,                    October 31,                   October 31,
(in thousands and thousands)       2021           Change          2020          Change          2019
Internet gross sales       $     2,380.8          4.5 %   $     2,277.6        -5.2 %   $     2,403.7


Internet Gross sales: Consolidated web gross sales elevated $103.2 million in fiscal 12 months 2021
primarily attributable to elevated Recreation phase web gross sales and the acquisition of
Spartan Emergency Response ("Spartan ER") in February of 2020, partially offset
by a lower in natural web gross sales within the Hearth & Emergency ("F&E") phase and a
lower in web gross sales within the Industrial phase, the latter of which,

                                       40

——————————————————————————–

Desk of Contents



associated to the divesture of two shuttle bus companies in Might of fiscal 12 months
2020. The rise in Recreation phase web gross sales in comparison with fiscal 12 months 2020
was primarily the results of elevated wholesale shipments throughout all classes
associated to elevated retail demand as outside actions elevated in reputation
rising from COVID-19. The decline in F&E natural web gross sales in comparison with fiscal
12 months 2020 was primarily the results of a lower in hearth truck and ambulance
shipments within the second half of fiscal 12 months 2021 associated to provide chain,
chassis and labor constraints that restricted automobile manufacturing, partially offset
by sturdy worth realization and favorable combine.

Consolidated web gross sales decreased $126.1 million in fiscal 12 months 2020 primarily
because of the divesture of two shuttle bus companies and a lower in natural web
gross sales within the F&E, Industrial and Recreation segments partially offset by the
acquisition of Spartan ER. The decline in F&E natural web gross sales in comparison with
fiscal 12 months 2019 was primarily the results of a lower in hearth truck and
ambulance shipments partially offset by elevated worth and blend inside the Hearth
division. The lower in Industrial phase web gross sales for fiscal 12 months 2020
in comparison with fiscal 12 months 2019 was primarily the results of decreased faculty bus
shipments as districts and contractors deferred purchases attributable to COVID-19
associated faculty closures, in addition to a major decline in gross sales of terminal
vans and avenue sweepers that had been in keeping with total finish market demand. The
lower in Recreation phase web gross sales for fiscal 12 months 2020 in comparison with fiscal
12 months 2019 was primarily attributable to manufacturing shutdowns and stay-at-home orders
associated to COVID-19 inside the second quarter of fiscal 12 months 2020.



Gross Revenue                                 Fiscal 12 months Ended
                  October 31,                   October 31,                   October 31,
(in thousands and thousands)        2021          Change          2020          Change          2019
Gross revenue     $       291.0        27.6 %   $       228.1        -9.4 %   $       251.8
% of web gross sales            12.2 %                        10.0 %                        10.5 %


Gross Revenue: Consolidated gross revenue elevated $62.9 million in fiscal 12 months
2021 primarily attributable to elevated gross revenue within the F&E and Recreation segments
partially offset by decreased gross revenue within the Industrial phase. The
improve in gross revenue within the F&E phase was primarily the results of
elevated efficiencies ensuing from operational enchancment initiatives and
sturdy worth realization, partially offset by decrease manufacturing volumes and
inefficiencies associated to provide chain, chassis and labor constraints. The
improve in gross revenue within the Recreation phase was primarily the results of
greater shipments and efficiencies associated to elevated manufacturing volumes and
sturdy worth realization associated to decrease reductions and gross sales allowances. The
lower in gross revenue within the Industrial phase was primarily the results of
decrease manufacturing volumes of municipal transit buses, in addition to Kind A college
buses associated to chassis constraints, and an unfavorable combine attributable to elevated
contribution of terminal vans and avenue sweepers unit gross sales, partially offset
by the sale of the 2 shuttle bus companies in Might of fiscal 12 months 2020.

Consolidated gross revenue decreased $23.7 million in fiscal 12 months 2020 primarily
attributable to a discount in gross revenue within the Industrial and Recreation segments,
partially offset by a rise in gross revenue within the F&E phase. Gross revenue
within the Industrial phase was negatively impacted by decrease manufacturing volumes of
terminal vans, avenue sweepers and Kind A college buses. Gross revenue within the
Recreation phase was negatively impacted by non permanent manufacturing shutdowns
associated to COVID-19 and lingering provide chain disruptions. The rise in
gross revenue within the F&E phase was primarily the results of the Spartan ER
acquisition in addition to elevated throughput at a main hearth plant, partially
offset by decrease ambulance shipments and damaging impacts attributable to absenteeism
associated to COVID-19 inside the phase.

Promoting, Basic and Administrative                                 Fiscal 12 months Ended
                                       October 31,                     October 31,                     October 31,
(in thousands and thousands)                             2021           Change           2020           Change           2019

Promoting, normal and administrative $ 189.0 -7.8 % $

  204.9           2.8 %   $       199.3




Promoting, Basic and Administrative: Consolidated promoting, normal and
administrative ("SG&A") prices decreased $15.9 million in fiscal 12 months 2021
primarily attributable to decreased company SG&A expense associated to sure restructuring
actions and the divestiture of two shuttle bus companies in Might of fiscal
12 months 2020, partially offset by the acquisition of Spartan ER, the return of
sure journey and commerce present associated prices that had been decreased in fiscal 12 months
2020 attributable to COVID-19, and a rise in incentive compensation in fiscal 12 months
2021.

                                       41

——————————————————————————–

Desk of Contents



Consolidated SG&A prices elevated $5.6 million in fiscal 12 months 2020 primarily due
to the Spartan ER acquisition partially offset by decreased discretionary spending
in addition to journey and commerce present associated prices and the divestiture of two
shuttle bus companies in Might of fiscal 12 months 2020.



Restructuring                               Fiscal 12 months Ended
                 October 31,                   October 31,                   October 31,
(in thousands and thousands)       2021          Change          2020          Change          2019
Restructuring   $         2.5       -74.7 %   $         9.9        73.7 %   $         5.7




Restructuring: Consolidated restructuring prices decreased $7.4 million in fiscal
12 months 2021. Restructuring prices of $2.5 million resulted from the introduced
closure of sure manufacturing operations inside the F&E phase and company
associated costs.

Consolidated restructuring prices elevated $4.2 million in fiscal 12 months 2020.
Restructuring prices of $9.9 million resulted from the transfer from a centralized to
a decentralized aftermarket elements enterprise, severance prices associated to
reductions in drive throughout all segments, vendor termination funds related
with the sundown of sure ambulance manufacturers, and lease termination prices associated
to the closure of a Spartan ER facility.

Restructuring prices for fiscal 12 months 2019 of $5.7 million had been primarily
attributable to headcount reductions within the F&E Phase and our company workplace
in addition to a facility closure within the Recreation Phase and lease termination
prices.



Impairment Expenses                               Fiscal 12 months Ended
                      October 31,                   October 31,                   October 31,
(in thousands and thousands)            2021          Change          2020          Change          2019
Impairment costs   $         1.5       -87.6 %   $        12.1        36.0 %   $         8.9




Impairment costs: Impairment costs for fiscal 12 months 2021 had been associated to the
sure buildings inside the F&E phase the place the Firm introduced the closure
of productions operations.

Impairment costs for fiscal 12 months 2020 had been associated to the liquidation of the
Firm's rental fleet, sure mounted belongings related to the
decentralization of the Firm's aftermarket elements enterprise and the worth of
commerce names related to sundown of sure ambulance manufacturers.

Impairment costs for fiscal 12 months 2019 had been primarily associated to belongings held
on the market and different belongings which had been liquidated throughout the 12 months.



Loss on Early Extinguishment of Debt                             Fiscal 12 months Ended
                                        October 31,                 October 31,                 October 31,
($ in thousands and thousands)                            2021          Change        2020          Change        2019
Loss on early extinguishment of debt   $         1.4         n/m   $           -         n/m   $           -


Loss on Early Extinguishment of Debt: Displays losses in fiscal 12 months 2021
acknowledged upon extinguishment of our 2017 ABL Facility and Time period Mortgage. The loss
is fully comprised of unamortized debt issuance prices that had been written off
in reference to this extinguishment.

Loss on sale of enterprise                                         Fiscal 12 months Ended
                                       October 31,                    October 31,                 October 31,
(in thousands and thousands)                             2021           Change          2020          Change        2019
Loss on sale of enterprise              $         2.8        -74.8 %   $        11.1         n/m   $           -




Loss on sale of Enterprise: Within the fourth quarter of fiscal 12 months 2021, in
reference to a strategic assessment of the product portfolio, we accomplished the
sale of our REV Brazil enterprise for $2.0 million money plus $2.0 million money to
be acquired over the following two years. Consequently, a lack of $2.8 million
was recorded throughout the fiscal 12 months ended 2021. Consult with Observe 7, Divestitures to
our 2021 audited consolidated monetary statements showing elsewhere on this
Annual Report on Kind 10-Okay.

                                       42

——————————————————————————–

Desk of Contents



Within the third quarter of fiscal 12 months 2020, we accomplished the sale of our shuttle
bus companies for $50.5 million in money. Consequently, we recorded a loss on
sale of $11.1 million throughout fiscal 12 months ended 2020. Consult with Observe 7,
Divestitures to our 2021 audited consolidated monetary statements showing
elsewhere on this Annual Report on Kind 10-Okay.



Loss on funding in China JV                                  Fiscal 12 months Ended
                                       October 31,                 October 31,                 October 31,
(in thousands and thousands)                             2021          Change        2020          Change        2019
Loss on funding in China JV        $         6.2         n/m   $           -         n/m   $           -




Loss on funding in China JV: Within the fourth quarter of fiscal 12 months 2021, the
Firm made the strategic determination to exit its pursuits within the China JV and
started soliciting affords to promote the funding and settle the mortgage. In
reference to this determination, the Firm recorded a lack of $6.2 million,
which represents the distinction between the carrying worth of the funding and
mortgage and the estimated proceeds to be acquired upon sale and settlement,
respectively.



Loss (acquire) on acquisition of enterprise                              Fiscal 12 months Ended
                                          October 31,                    October 31,                 October 31,
(in thousands and thousands)                                2021           Change          2020          Change        2019
Loss (acquire) on acquisition of enterprise   $         0.4       -104.7 %   $        (8.6 )       n/m   $           -




Loss (acquire) on acquisition of enterprise: In the course of the first quarter of fiscal 12 months
2021, buy worth allocation of the Spartan ER acquisition was up to date to
replicate immaterial measurement interval changes made to inventories, guarantee,
and sure different belongings acquired and liabilities assumed. These updates
resulted in a lower to the cumulative acquire on acquisition of $0.4 million.
Consult with Observe 3, Acquisition, to our 2021 audited consolidated monetary
statements showing elsewhere on this Annual Report on Kind 10-Okay.

Throughout the second quarter of fiscal 12 months 2020, we acquired Spartan ER for $47.3
million. We recorded the preliminary buy accounting, which resulted in a
acquire on acquisition of $8.6 million. Consult with Observe 3, Acquisition, to our 2021
audited consolidated monetary statements showing elsewhere on this Annual
Report on Kind 10-Okay.



Provision (profit) for Revenue Taxes                                Fiscal 12 months Ended
                                        October 31,                    October 31,                    October 31,
(in thousands and thousands)                              2021           Change          2020           Change          2019

Provision (profit) for revenue taxes $ 11.3 -172.4 % $

  (15.6 )      345.7 %   $        (3.5 )




Provision (profit) for revenue taxes: Consolidated revenue tax provision was
$11.3 million or 20.3% of pretax revenue and good thing about $15.6 million or 33.8% of
pretax loss for fiscal years 2021 and 2020, respectively. Tax provision for
fiscal 12 months 2021 was favorably impacted by tax advantages associated to web working
loss carrybacks allowable underneath the CARES Act of $4.2 million. Tax expense was
unfavorably impacted by the valuation allowances associated to the loss on our
China JV of $1.3 million.

Outcomes for fiscal 12 months 2020 had been favorably impacted by tax advantages associated to
loss carryback allowable underneath the CARES Act and the nontaxable acquire on the
acquisition of Spartan ER, for $3.5 million and $2.2 million, respectively.

Consolidated revenue tax profit was $15.6 million or 33.8% of pretax loss and
$3.5 million or 20.9% of pretax loss for fiscal years 2020 and 2019,
respectively. Outcomes for fiscal 12 months 2020 had been favorably impacted by tax
advantages associated to a loss carryback allowable underneath the CARES Act and the
nontaxable acquire on the acquisition of Spartan ER for $3.5 million and $2.2
million, respectively. Outcomes for fiscal 12 months 2019 had been favorably impacted by
incentives for U.S. analysis for $0.6 million and unfavorably impacted by
share-based compensation tax deductions for $0.8 million.



Internet revenue (loss)                               Fiscal 12 months Ended
                     October 31,                    October 31,                   October 31,
(in thousands and thousands)           2021           Change          2020          Change          2019
Internet revenue (loss)   $        44.4       -245.6 %   $       (30.5 )     148.0 %   $       (12.3 )




Internet revenue (loss): Consolidated web revenue elevated $74.9 million in fiscal
12 months 2021 primarily attributable to elevated gross revenue described above plus decrease
restructuring and restructuring associated costs, decrease losses associated to sale of
enterprise, and decrease curiosity expense, partially offset by greater provision for
revenue tax and loss on investments.

                                       43

——————————————————————————–

Desk of Contents



Consolidated web loss elevated $18.2 million in fiscal 12 months 2020 primarily due
to a discount in gross revenue described above plus elevated restructuring,
restructuring associated and impairment costs attributable to severance prices
associated to reductions in drive, management adjustments, decentralizing the Firm's
aftermarket elements enterprise, the sundown of sure ambulance manufacturers and
liquidation of automobiles in our rental enterprise, partially offset by decrease
curiosity expense and a better tax profit. The rise within the Firm's tax
profit in fiscal 12 months 2020 as in comparison with 2019, relates primarily to the
aforementioned tax adjustments.



Adjusted EBITDA                               Fiscal 12 months Ended
                   October 31,                   October 31,                   October 31,
(in thousands and thousands)         2021          Change          2020          Change          2019
Adjusted EBITDA   $       141.5       109.6 %   $        67.5       -33.9 %   $       102.1


Consolidated Adjusted EBITDA elevated $74.0 million in fiscal 12 months 2021 attributable to
greater Adjusted EBITDA within the F&E and Recreation segments, partially offset by
decrease Adjusted EBITDA within the Industrial phase.

Consolidated Adjusted EBITDA decreased $34.6 million in fiscal 12 months 2020 attributable to
decrease Adjusted EBITDA throughout all segments.

Consult with the “Adjusted EBITDA and Adjusted Internet Revenue” part of “Merchandise 7.
Administration’s Dialogue and Evaluation of Monetary Situation and Outcomes of
Operations” of this Annual Report on Kind 10-Okay for a reconciliation of Internet
Revenue (Loss) to Adjusted EBITDA tables and associated footnotes.

Adjusted Internet Revenue                               Fiscal 12 months Ended
                       October 31,                   October 31,                   October 31,
(in thousands and thousands)             2021          Change          2020         
Change          2019
Adjusted Internet Revenue   $        76.9       709.5 %   $         9.5       -68.3 %   $        30.0

Consult with the “Adjusted EBITDA and Adjusted Internet Revenue” part of “Merchandise 7.
Administration’s Dialogue and Evaluation of Monetary Situation and Outcomes of
Operations” of this Annual Report on Kind 10-Okay for a reconciliation of Internet
Revenue (Loss) to Adjusted Internet Revenue tables and associated footnotes.

Hearth & Emergency Phase



                                                                    Fiscal 12 months Ended
                                       October 31,                     October 31,                     October 31,
(in thousands and thousands)                             2021           Change           2020           Change           2019
Internet gross sales                             $     1,135.1           0.3 %   $     1,132.0          17.0 %   $       967.9
Adjusted EBITDA                                57.7          44.6 %            39.9          -7.6 %            43.2
Adjusted EBITDA % of web gross sales                  5.1 %                           3.5 %                           4.5 %




Internet Gross sales. F&E phase web gross sales elevated $3.1 million in fiscal 12 months 2021,
primarily because of the acquisition of Spartan ER in February of 2020. Excluding
the affect of Spartan ER, F&E web gross sales decreased by $46.4 million, or 5.0%
in comparison with the prior 12 months interval. The lower in natural web gross sales was
primarily associated to decrease shipments of fireplace vans and ambulance models within the
second half of fiscal 12 months 2021 associated to provide chain, chassis and labor
constraints, partially offset by sturdy worth realization and favorable combine.

F&E phase web gross sales elevated $164.1 million in fiscal 12 months 2020. Excluding
the affect of Spartan ER, F&E web gross sales decreased by $48.3 million, or 5.0%
in comparison with the prior 12 months interval. The lower in gross sales was primarily associated
to decrease shipments of fireplace vans from two different crops and decrease shipments of
ambulance models attributable to lingering COVID-19 associated provide chain disruptions and
the timing of deliveries partially offset by elevated throughput and improved
combine at a main hearth plant.

Adjusted EBITDA. F&E phase Adjusted EBITDA elevated $17.8 million in fiscal
12 months 2021. Excluding the affect of Spartan ER, F&E Adjusted EBITDA elevated by
$17.6 million, or 64.9% in comparison with the prior 12 months interval. The rise in
profitability was primarily associated to elevated efficiencies associated to
productiveness enchancment initiatives on the largest hearth and largest ambulance
crops, partially offset by inefficiencies associated to provide chain, chassis and
labor constraints, primarily within the second half of fiscal 12 months 2021.

F&E phase Adjusted EBITDA decreased $3.3 million in fiscal 12 months 2020. Spartan
ER contributed $12.8 million of Adjusted EBITDA throughout fiscal 12 months 2020.
Excluding the affect of Spartan ER, F&E Adjusted EBITDA decreased by $16.1
million
, or 37.3%

                                       44

——————————————————————————–

Desk of Contents



in comparison with the prior 12 months interval. The lower in profitability was primarily
associated to inefficiencies at two hearth crops and delayed deliveries of ambulance
models attributable to absenteeism and provide chain disruptions associated to COVID-19,
partially offset by elevated throughput at a big hearth plant.

Industrial Phase



                                                                   Fiscal 12 months Ended
                                       October 31,                    October 31,                    October 31,
(in thousands and thousands)                             2021           Change          2020           Change          2019
Internet gross sales                             $       387.3        -20.1 %   $       484.8        -32.7 %   $       720.0
Adjusted EBITDA                                31.0        -10.1 %            34.5        -38.4 %            56.0
Adjusted EBITDA % of web gross sales                  8.0 %                          7.1 %                          7.8 %




Internet Gross sales. Industrial phase web gross sales decreased $97.5 million in fiscal 12 months
2021 primarily attributable to a discount in web gross sales related to the disposition
of two shuttle bus companies in Might of fiscal 12 months 2020. Excluding the affect
of the shuttle bus divestiture, web gross sales decreased by $3.9 million, or 1.0%
in comparison with the prior fiscal 12 months. The lower in web gross sales was primarily due
to decrease shipments of Kind A college buses associated to the suspension of regular
manufacturing actions in fourth quarter fiscal 2021 attributable to restricted chassis
availability and decrease shipments of municipal transit buses, partially offset by
elevated shipments of terminal vans and avenue sweepers.

Industrial phase web gross sales decreased $235.2 million in fiscal 12 months 2020
primarily attributable to a discount in web gross sales related to the disposition of two
shuttle bus companies in Might of fiscal 12 months 2020. Excluding the affect of the
shuttle bus divestiture, web gross sales decreased by $100.5 million, or 20.6%
in comparison with the prior 12 months. The lower in web gross sales was primarily attributable to decrease
demand and associated shipments of Kind A college buses attributable to uncertainty
surrounding faculty attendance insurance policies, decrease shipments of avenue sweepers
associated to decreased capital budgets at massive prospects and decrease shipments of
terminal vans.

Adjusted EBITDA. Industrial phase Adjusted EBITDA decreased $3.5 million in
fiscal 12 months 2021. The lower in Adjusted EBITDA in comparison with the prior 12 months was
primarily attributable to decrease manufacturing volumes and shipments of college buses,
inefficiencies associated to the suspension of manufacturing actions talked about
above, and decrease shipments of municipal transit buses, partially offset by
elevated manufacturing volumes and shipments of terminal vans and avenue
sweepers.

Industrial phase Adjusted EBITDA decreased $21.5 million in fiscal 12 months 2020.
Adjusted EBITDA for the prior 12 months interval included $0.9 million of profitability
attributable to the shuttle bus companies. Excluding the affect of the shuttle
bus divestiture, Adjusted EBITDA decreased by $20.6 million, or 37.4% in contrast
to the prior 12 months. The lower in Adjusted EBITDA in comparison with the prior 12 months
was primarily attributable to decreased manufacturing quantity and shipments of Kind A college
buses, terminal vans and avenue sweepers.

Recreation Phase



                                                                   Fiscal 12 months Ended
                                       October 31,                    October 31,                    October 31,
(in thousands and thousands)                             2021           Change          2020           Change          2019
Internet gross sales                             $       858.5         30.5 %   $       657.8         -8.2 %   $       716.3
Adjusted EBITDA                                86.0        124.0 %            38.4        -17.9 %            46.8
Adjusted EBITDA % of web gross sales                 10.0 %                          5.8 %                          6.5 %




Internet Gross sales. Recreation phase web gross sales elevated $200.7 million in fiscal 12 months
2021 primarily attributable to elevated wholesale shipments throughout all classes
associated to elevated retail demand as outside actions elevated in reputation
rising from COVID-19 in addition to elevated pricing and decrease reductions and
gross sales allowances.

Recreation phase web gross sales decreased $58.5 million in fiscal 12 months 2020
primarily attributable to manufacturing shutdowns and Keep-At-Dwelling orders associated to
COVID-19 inside the second quarter of fiscal 12 months 2020.

Adjusted EBITDA. Recreation phase Adjusted EBITDA elevated $47.6 million
primarily attributable to elevated manufacturing volumes and shipments, sturdy worth
realization, and decrease reductions and gross sales allowances, partially offset by
inefficiencies associated to provide chain disruption and labor constraints.

                                       45

——————————————————————————–

Desk of Contents



Recreation phase Adjusted EBITDA decreased $8.4 million primarily attributable to decrease
shipments throughout most product classes attributable to non permanent manufacturing
shutdowns of all Recreation companies throughout the second quarter of fiscal 12 months
2020 and lingering provide chain disruptions by means of the rest of the 12 months.

Backlog

Backlog represents agency orders acquired from sellers or immediately from finish
prospects. The next desk presents a abstract of our backlog by phase:



                                                         Improve (Lower)
                    October 31,       October 31,
($ in thousands and thousands)        2021              2020               $              %
Hearth & Emergency   $     1,498.6     $       965.8     $      532.8        55.2 %
Industrial                 394.7             273.8            120.9        44.2 %
Recreation               1,234.5             538.9            695.6       129.1 %
Whole Backlog      $     3,127.8     $     1,778.5     $    1,349.3        75.9 %

Every of our three segments has a backlog of recent automobile orders that usually
extends out from two to twenty-four months in length.

Orders from our sellers and finish prospects are evidenced by a contract, agency
buy order or reserved manufacturing slot for supply of 1 or many automobiles.
These orders are reported in our backlog on the combination promoting costs, web of
reductions or allowances.

On the finish of fiscal 12 months 2021, our backlog was $3,127.8 million, in comparison with
$1,778.5 million on the finish of fiscal 12 months 2020. The rise in complete backlog
was attributable to elevated F&E, Industrial, and Recreation phase backlogs. The
improve in F&E phase backlog was primarily because of the results of sturdy demand
and orders for hearth equipment and ambulance models. The rise in Industrial
phase backlog was primarily the results of elevated orders for Kind A college
buses, terminal vans and avenue sweepers, partially offset by manufacturing
towards a big order inside the municipal transit backlog. The rise in
Recreation phase backlog was primarily the results of elevated orders throughout
all product classes.

Liquidity and Capital Sources

Basic

Our main necessities for liquidity and capital are working capital, the
enchancment and growth of present manufacturing amenities, debt service
funds and normal company wants. Traditionally, these money necessities have
been met by means of money supplied by working actions, money and money
equivalents and borrowings underneath our time period mortgage and ABL credit score facility.

We consider that our sources of liquidity and capital might be enough to
finance our continued operations, progress technique and extra bills we
anticipate to proceed to incur as a public firm. Nonetheless, we can not guarantee you
that money supplied by working actions and borrowings underneath the present
revolving credit score facility might be enough to satisfy our future wants. If we're
unable to generate enough money flows from operations sooner or later, and if
availability underneath the present revolving credit score facility isn't enough due
to the dimensions of our borrowing base or different exterior elements, we might must
receive further financing. If further capital is obtained by issuing
fairness, the pursuits of our present stockholders might be diluted. If we incur
further indebtedness, that indebtedness might include monetary and different
covenants that will considerably limit our operations or might contain greater
total rates of interest. We can not guarantee you that we can receive
refinancing or further financing on favorable phrases or in any respect.

                                       46

——————————————————————————–

  Desk of Contents



Money Circulate

The next desk exhibits abstract money flows for fiscal years 2021, 2020 and
2019:



                                                               Fiscal Years Ended
                                                 October 31,       October 31,       October 31,
(in thousands and thousands)                                       2021              2020              2019
Internet money supplied by working actions       $       158.3     $        55.7     $        52.5
Internet money (utilized in) supplied by investing
actions                                              (10.2 )             1.7               0.2
Internet money utilized in financing actions                  (146.2 )           (49.3 )           (61.3 )
Internet improve (lower) in money and money
equivalents                                     $         1.9     $         8.1     $        (8.6 )



Internet Money Offered by Working Actions

Internet money supplied by working actions for fiscal 12 months 2021 was $158.3
million, in comparison with $55.7 million for fiscal 12 months 2020. The rise in
constructive money technology from working actions for fiscal 12 months 2021 in contrast
to the prior 12 months was associated to the rise in web revenue and improved web
working capital effectivity, particularly associated to stock and buyer
advances.

Internet money supplied by working actions for fiscal 12 months 2020 was $55.7
million
, in comparison with $52.5 million for fiscal 12 months 2019. The rise in
constructive money technology from working actions for fiscal 12 months 2020 in contrast
to the prior 12 months was associated to improved web working capital effectivity,
particularly associated to receivables and stock.

Internet Money (Utilized in) Offered by Investing Actions

Internet money utilized by investing actions for fiscal 12 months 2021 was $10.2 million,
in comparison with $1.7 million money supplied by investing actions for fiscal 12 months
2020. The rise in web money utilized by investing actions was primarily attributable to
elevated funding of PPE partially offset by proceeds from the sale of
belongings.

Internet money supplied by investing actions for fiscal 12 months 2020 was $1.7 million,
in comparison with $0.2 million for fiscal 12 months 2019. The rise in web money supplied
by investing actions was primarily attributable to money proceeds from the sale of
shuttle bus, partially offset by money used to buy Spartan ER, and
reductions in proceeds from asset gross sales and capital expenditures.

Internet Money Used in Financing Actions

Internet money utilized in financing actions for fiscal 12 months 2021 was $146.2 million,
in comparison with $49.3 million for fiscal 12 months 2020. The rise in money used was
primarily because of the web proceeds from our 2021 ABL Facility offset by the use
of these proceeds to repay the 2017 ABL Facility and Time period Mortgage, funds for
debt issuance prices, share repurchases and funds for dividends.

Internet money utilized in financing actions for fiscal 12 months 2020 was $49.3 million,
in comparison with $61.3 million for fiscal 12 months 2019. The lower in money used was
primarily attributable to no inventory repurchases in fiscal 12 months 2020 and a discount in
dividends paid. The online money utilized in fiscal 12 months 2020 was primarily to repay
debt and pay dividends.

Dividends

Topic to legally obtainable funds and the discretion of our board of administrators,
we might or might not pay a quarterly money dividend sooner or later on our widespread
inventory. We introduced the suspension of our quarterly dividend starting the
second quarter of fiscal 12 months 2020. Within the 12 months ended October 31, 2020 we paid
money dividends of $9.5 million.

On June 3, 2021, our Board of Administrators reinstated a quarterly money dividend in
the quantity of $0.05 per share of widespread inventory, which equates to a price of $0.20
per share of widespread inventory on an annualized foundation, and declared the common
dividend for the three months ended April 30, 2021 and July 31, 2021, payable on
July 15, 2021 and October 15, 2021, to shareholders of document on June 30, 2021
and September 30, 2021, respectively. In the course of the fiscal 12 months 2021, we paid money
dividends of $6.6 million.

                                       47

——————————————————————————–

  Desk of Contents



Inventory Repurchase Program

Throughout fiscal 12 months 2018, the Firm's Board of Administrators licensed as much as
$100.0 million of repurchases of the Firm's issued and excellent widespread
inventory. Throughout fiscal 12 months 2019, the Firm repurchased 717,597 shares underneath
this repurchase program at a complete price of $8.3 million at a median worth per
share of $11.62. There have been no repurchases underneath this program throughout fiscal 12 months
2020 and this system expired on September 4, 2020.

On September 2, 2021, the Firm's Board of Administrators authorised the
authorization of a brand new share repurchase program that enables the repurchase of up
to $150.0 million of the Firm's excellent widespread inventory, efficient
instantly. The share repurchase authorization expires in 24 months and provides
administration the pliability to find out circumstances underneath which shares could also be
bought. Throughout fiscal 12 months 2021, the Firm repurchased 250,000 shares underneath
this repurchase program at a complete price of $3.9 million at a median worth of
$15.45.

2021 ABL Facility

On April 13, 2021, the Firm entered right into a $550.0 million revolving credit score
settlement (the "2021 ABL Facility" or "2021 ABL Settlement") with a syndicate of
lenders. The 2021 ABL Facility offers for revolving loans and letters of
credit score in an combination quantity of as much as $550.0 million. The entire credit score facility
is topic to a $30.0 million sublimit for swing line loans and a $35.0 million
sublimit for letters of credit score (plus as much as a further $20.0 million of
letters of credit score at issuing financial institution's discretion), together with sure borrowing
base and different customary restrictions as outlined within the 2021 ABL Settlement. The
2021 ABL Settlement permits for incremental amenities in an combination quantity of
as much as $100.0 million, plus the surplus, if any, of the borrowing base then in
impact over complete commitments then in impact. Any such incremental amenities
are topic to receiving further commitments from lenders and sure different
customary circumstances. The 2021 ABL Settlement serves as refinancing of
indebtedness and terminates the Firm's 2017 ABL Facility and Time period Mortgage. The
Firm repaid $303.4 million of present principal on the 2017 ABL Facility and
Time period Mortgage in reference to this refinancing. The Firm additionally paid $7.0
million of debt issuance prices and acknowledged a $1.4 million loss on early
extinguishment of debt, the latter of which is included within the Consolidated
Assertion of Operations and Complete Revenue (loss) for the twelve months
ended October 31, 2021. The debt issuance prices capitalized in reference to
the 2021 ABL Facility much less accrued amortization are included in different
long-term belongings within the Firm's Consolidated Stability Sheets.



The 2021 ABL Facility matures on April 13, 2026. The Firm might prepay
principal, in entire or partially, at any time with out penalty.



All revolving loans underneath the 2021 ABL Facility bear curiosity at charges equal to,
on the Firm's possibility, both a base price plus an relevant margin, or a
Eurodollar price plus an relevant margin. Relevant rate of interest margins are
initially 0.75% for all base price loans and 1.75% for all Eurodollar price loans
(with the Eurodollar price having a ground of 0.25%), topic to adjustment based mostly
on the Firm's mounted cost protection ratio in accordance with the 2021 ABL
Settlement. Curiosity is payable quarterly for all base price loans and is payable
the final day of any curiosity interval or each three months for all Eurodollar
price loans. The weighted-average rate of interest on borrowings excellent underneath
the 2021 ABL Facility was 1.75% as of October 31, 2021.



The lenders underneath the 2021 ABL Facility have a primary precedence safety curiosity
in considerably all private property belongings and sure actual property belongings
of the Firm. The 2021 ABL Facility's borrowing base is comprised of eligible
receivables and eligible stock, plus a set asset sublimit of sure
eligible actual property and eligible tools, which mounted asset sublimit
reduces by quarterly amortization as specified within the 2021 ABL Settlement.



The 2021 ABL Settlement accommodates customary representations and warranties,
affirmative and damaging covenants, topic in sure circumstances to customary
limitations, exceptions and exclusions. The 2021 ABL Settlement additionally accommodates
sure customary occasions of default. The incidence of an occasion of default underneath
the 2021 ABL Settlement may outcome within the termination of the commitments underneath
the 2021 ABL Facility and the acceleration of all excellent borrowings underneath
it. The 2021 ABL Settlement requires the Firm to keep up a minimal mounted
cost protection ratio of 1.10 to 1.00 throughout sure compliance durations as
specified within the 2021 ABL Settlement.

The Firm was in compliance with all monetary covenants underneath the 2021 ABL
Settlement as of October 31, 2021. As of October 31, 2021, the Firm’s
availability underneath the 2021 ABL Facility was $290.0 million.

                                       48

——————————————————————————–

Desk of Contents

The honest worth of the 2021 ABL Facility approximated e book worth on October 31,
2021
.

April 2017 ABL Facility

The 2017 ABL Facility consisted of: (i) Revolving Loans, (ii) Swing Line Loans,
and (iii) Letters of Credit score, aggregating as much as a mixed most of $500.0
million. The entire quantity borrowed underneath the 2017 ABL Facility was topic to a
$30.0 million sublimit for Swing Line loans and a $35.0 million sublimit for
Letters of Credit score, together with sure borrowing base and different customary
restrictions as outlined within the 2017 ABL Settlement.

The 2017 ABL Facility was set to mature on April 25, 2022. In reference to
the Firm's entry into the 2021 ABL Facility on April 13, 2021, the 2017 ABL
Facility was totally pay as you go as a part of the refinancing. All associated safety
pursuits had been cancelled.

The honest worth of the 2017 ABL Facility approximated e book worth on October
31, 2020
.

Time period Mortgage

 On April 29, 2020, the Firm entered right into a Fifth Amended and Restated $175.0
million time period mortgage settlement ("Time period Mortgage" and "Time period Mortgage Settlement"), as Borrower
with sure subsidiaries of the Firm, performing as guarantors of debt.
Principal could possibly be pay as you go at any time throughout the time period of the Time period Mortgage with out
penalty.

The Time period Mortgage settlement required quarterly funds of 0.25% of the unique
principal steadiness. The Time period Mortgage was set to mature on April 25, 2022. In
reference to the Firm's entry into the 2021 ABL Facility on April 13,
2021, the Time period Mortgage was totally pay as you go as a part of the refinancing. All associated
safety pursuits had been cancelled.

The honest worth of the Time period Mortgage approximated e book worth on October 31, 2020.

Consult with Observe 11, Lengthy-Time period Debt, to our 2021 audited consolidated monetary
statements showing elsewhere on this Annual Report on Kind 10-Okay.

Subsequent Occasions

The Firm evaluated subsequent occasions by means of December 15, 2021, the date on
which the monetary statements had been obtainable to be issued. Apart from the gadgets
famous beneath, no different occasions had been recognized.

Quarterly Dividend

On December 9, 2021, the Firm's Board of Administrators declared a quarterly money
dividend within the quantity of $0.05 per share of widespread inventory, which equates to a
price of $0.20 per share of widespread inventory on an annualized foundation, payable
on January 14, 2022 to shareholders of document on December 31, 2021.



Contractual Obligations

Important contractual commitments at October 31, 2021 are anticipated to have an effect on
our money flows in future durations as set forth within the desk beneath.


(in thousands and thousands)                    2022       2023       2024       2025       2026        Thereafter       Whole
Debt(a)                         $    -     $    -     $    -     $    -     $ 215.0     $          -     $ 215.0
Curiosity(b)                        3.8        3.8        3.8        3.8         1.9                -        17.1
Working leases                   7.7        5.0        2.9        1.5         0.7              4.8        22.6
Buying obligations(c)          7.2        7.2        1.6          -           -                -        16.0
Whole commitments(d)            $ 18.7     $ 16.0     $  8.3     $  5.3     $ 217.6     $        4.8     $ 270.7



(a) Consists of estimated principal funds due underneath our the 2021 ABL Facility as

of October 31, 2021.

(b) Based mostly on rates of interest in impact as of October 31, 2021.

                                       49

——————————————————————————–

  Desk of Contents




(c) Consists of obligations underneath non-cancellable buy orders for uncooked supplies

and chassis as of October 31, 2021.

(d) Unrecognized tax advantages totaling $3.6 million as of October 31, 2021,

excluding associated pursuits and penalties, usually are not included within the desk

as a result of the timing of their decision can’t be estimated. See Observe 17,

Revenue Taxes, to our 2021 audited consolidated monetary statements showing

elsewhere on this Annual Report on Kind 10-Okay for disclosures relating to

unsure revenue tax positions underneath ASC Subject 740.

Adjusted EBITDA and Adjusted Internet Revenue

In contemplating the monetary efficiency of the enterprise, administration analyzes
the first monetary efficiency measures of Adjusted EBITDA and Adjusted Internet
Revenue. Adjusted EBITDA is outlined as web revenue for the related interval earlier than
depreciation and amortization, curiosity expense, loss on early extinguishment of
debt and provision for revenue taxes, as adjusted for sure gadgets described
beneath that we consider usually are not indicative of our ongoing working efficiency.
Adjusted Internet Revenue is outlined as web revenue, as adjusted for sure gadgets
described beneath that we consider usually are not indicative of our ongoing working
efficiency.

We consider Adjusted EBITDA and Adjusted Internet Revenue are helpful to buyers
as a result of these efficiency measures are utilized by our administration and the Firm's
Board of Administrators for measuring and reporting the Firm's monetary
efficiency and as a measurement in incentive compensation for administration. These
measures exclude the affect of sure gadgets which we consider have much less bearing
on our core working efficiency as a result of they're gadgets that aren't wanted or
obtainable to the Firm's managers within the every day actions of their companies.
We consider that the core operations of our enterprise are these which might be
affected by our administration in a specific interval by means of their useful resource
allocation selections that have an effect on the underlying efficiency of our operations
carried out throughout that interval. We additionally consider that selections using Adjusted
EBITDA and Adjusted Internet Revenue permit for a extra significant comparability of
working fundamentals between corporations inside our markets by eliminating the
affect of capital construction and taxation variations between the businesses.

To find out Adjusted EBITDA, we alter Internet Revenue for the next gadgets:
non-cash depreciation and amortization, curiosity expense, loss on early
extinguishment of debt, revenue taxes and different gadgets as described beneath.
Inventory-based compensation expense and sponsor expense reimbursement is excluded
from each Adjusted Internet Revenue and Adjusted EBITDA as a result of it's an expense,
which can't be impacted by our enterprise managers. Inventory-based compensation
expense additionally displays a value which can obscure developments in our underlying automobile
companies for a given interval, because of the timing and nature of the fairness
awards. We additionally alter for distinctive gadgets, that are decided to be these
that in administration's judgment usually are not indicative of our ongoing working
efficiency and must be disclosed by advantage of their measurement, nature or
incidence, and embrace non-cash gadgets and gadgets settled in money. In figuring out
whether or not an occasion or transaction is phenomenal, administration considers
quantitative in addition to qualitative elements such because the frequency or
predictability of incidence.

Adjusted EBITDA and Adjusted Internet Revenue have limitations as analytical instruments.
These usually are not shows made in accordance with U.S. GAAP, usually are not measures
of economic situation and shouldn't be thought-about as an alternative choice to web
revenue or web loss for the interval decided in accordance with U.S. GAAP. The
most immediately comparable U.S. GAAP measure to Adjusted EBITDA and Adjusted Internet
Revenue is Internet Revenue for the related interval. Adjusted EBITDA and Adjusted Internet
Revenue usually are not essentially corresponding to equally titled measures utilized by different
corporations. Consequently, you shouldn't take into account this efficiency measure in
isolation from, or as an alternative evaluation for, our outcomes of operations as
decided in accordance with U.S. GAAP. Furthermore, such measures don't replicate:

• our money expenditures, or future necessities for capital expenditures or

        contractual commitments;


  • adjustments in, or money necessities for, our working capital wants;

• the money necessities essential to service curiosity or principal funds

        on our debt;


  • the money necessities to pay our taxes.


                                       50

——————————————————————————–

  Desk of Contents





The next desk reconciles web revenue (loss) to Adjusted EBITDA for the
durations offered:



                                                                Fiscal 12 months Ended
                                                 October 31,       October 31,       October 31,
(in thousands and thousands)                                       2021              2020              2019
Internet revenue (loss)                               $        44.4     $       (30.5 )   $       (12.3 )
Depreciation and amortization                            32.0              40.2              45.4
Curiosity expense, web                                    17.3              25.7              32.4
Loss on early extinguishment of debt                      1.4                 -                 -
Provision (profit) for revenue taxes                     11.3             (15.6 )            (3.5 )
EBITDA                                                  106.4              19.8              62.0
Transaction bills(a)                                   3.2               3.3               1.0
Sponsor expense reimbursement(b)                          0.4               0.5               1.4
Restructuring (c)                                         2.5               9.9               5.7
Restructuring associated costs(d)                          0.3              10.5                 -
Impairment costs(e)                                     1.5              12.1               8.9
Inventory-based compensation expense(f)                       7.8               7.8               7.2
Authorized issues(g)                                          4.0               1.8               7.7
Internet loss on sale of enterprise and belongings(h)                7.9              11.1                 -
Loss (acquire) on acquisition of enterprise(i)                 0.4              (8.6 )               -
Different gadgets (j)                                           6.1                 -                 -
Losses (earnings) attributable to belongings held
on the market(okay)                                               1.0              (0.8 )             4.7
Deferred buy worth fee(l)                          -               0.1               3.5
Adjusted EBITDA                                 $       141.5     $        67.5     $       102.1


The next desk reconciles Internet Revenue (loss) to Adjusted Internet Revenue for the
durations offered:



                                                                Fiscal 12 months Ended
                                                 October 31,       October 31,       October 31,
(in thousands and thousands)                                       2021              2020              2019
Internet revenue (loss)                               $        44.4     $       (30.5 )   $       (12.3 )
Amortization of intangible belongings                         9.8              13.3              17.4
Transaction bills(a)                                   3.2               3.3               1.0
Sponsor expense reimbursement(b)                          0.4               0.5               1.4
Restructuring (c)                                         2.5               9.9               5.7
Restructuring associated costs(d)                          0.3              10.5                 -
Impairment costs(e)                                     1.5              12.1               8.9
Inventory-based compensation expense(f)                       7.8               7.8               7.2
Authorized issues(g)                                          4.0               1.8               7.7
Internet Loss on sale of enterprise and belongings(h)                7.9              11.1                 -
Loss (acquire) on acquisition of enterprise(i)                 0.4              (8.6 )               -
Different Gadgets(j)                                            6.1                 -                 -
Losses (earnings) attributable to belongings held
on the market(okay)                                               1.0              (0.8 )             4.7
Deferred buy worth fee(l)                          -               0.1               3.5
Loss on early extinguishment of debt(m)                   1.4                 -                 -
Affect of tax price change(n)                             (4.2 )            (3.5 )               -
Revenue tax impact of changes(o)                      (9.6 )           (17.5 )           (15.2 )
Adjusted Internet Revenue                             $        76.9     $         9.5     $        30.0



(a) Displays prices incurred in reference to enterprise acquisitions,

inclinations and capital market transactions. These bills consist

primarily of authorized, accounting and due diligence bills.

(b) Displays the reimbursement of bills to the Firm’s main fairness

holder.

(c) Restructuring prices for fiscal 12 months 2021 incurred in reference to the

    introduced closure of sure amenities inside the F&E phase and
    termination and severance prices incurred inside the company phase.


                                       51

——————————————————————————–

Desk of Contents



Restructuring prices for fiscal 12 months 2020 resulted from the sundown of sure
ambulance manufacturers, transfer from a centralized to a decentralized aftermarket elements
enterprise, severance prices associated to reductions in drive throughout all segments,
and lease termination prices associated to the closure of a Spartan ER facility.

Restructuring prices for fiscal 12 months 2019 had been primarily attributable to
headcount reductions within the F&E Phase and our company workplace in addition to a
facility closure within the Recreation Phase and lease termination prices.

(d) Displays prices which are immediately attributable to restructuring actions,

together with management adjustments and stock liquidation related to the

decentralization of the Firm’s aftermarket elements enterprise, however don’t meet

the definition of restructuring underneath ASC 420.

(e) Displays impairment costs related to the closing of sure amenities

inside the F&E phase for fiscal 12 months 2021.

Displays impairment costs related to the liquidation of all rental
automobiles, sundown of sure ambulance manufacturers and decentralization of the
Firm’s aftermarket elements enterprise.

Consult with Observe 8, Restructuring and Impairments, to our 2021 audited consolidated
monetary statements showing elsewhere on this Annual Report on Kind 10-Okay.

(f) Displays bills related to the vesting of fairness awards and award

modifications.

(g) Displays authorized charges and prices incurred to litigate and settle authorized claims

towards us that are outdoors the conventional course of enterprise. Prices embrace

funds: (i) for charges and prices to litigate and settle non-ordinary course

mental property disputes, (ii) for charges and prices to litigate the

putative securities class actions and by-product motion pending towards us

    and sure of our administrators and officers and (iii) for charges to settle
    sure claims arising from a putative class motion within the state of
    California.

(h) Displays losses associated to the sale of REV Brazil of $2.8 million, and the

loss acknowledged on the Firm’s funding in its China JV of $6.2 million,

offset by a $1.1 million acquire associated to the sale of land inside the F&E

phase for fiscal 12 months 2021, and the losses associated to the sale of our

shuttle bus companies for fiscal 12 months 2020. Consult with Observe 7, Divestitures,

to our 2021 audited consolidated monetary statements showing elsewhere in

this Annual Report on Kind 10-Okay.

(i) Displays acquire cumulative on acquisition of Spartan ER. Consult with Observe 3,

Acquisitions, to our 2021 audited consolidated monetary statements showing

elsewhere on this Annual Report on Kind 10-Okay.

(j) Displays one-time prices together with (i) a recall marketing campaign introduced on Spartan

equipment that had been designed pre-acquisition for which the corporate is in search of

authorized indemnification of the losses incurred of $1.3 million; (ii) cumulative

prices associated to staff compensation liabilities of $4.2 million; (iii)

different prices that administration doesn’t consider to be recurring in nature of

$0.6 million.

(okay) Adjusted EBITDA attributable to companies that had been categorised as held for

sale throughout the respective interval.

(l) Displays the expense related to the deferred buy worth funds to

sellers of Lance. The Firm paid $5.0 million throughout the second quarter of

fiscal 12 months 2020 to totally settle the deferred legal responsibility.

(m) Displays losses acknowledged upon extinguishment of our 2017 ABL Facility and

Time period Mortgage. The loss is fully comprised of unamortized debt issuance prices

that had been written off in reference to this extinguishment.

(n) Displays the affect of web working loss carrybacks on account of the CARES

Act. Consult with Observe 17, Revenue Taxes, to our 2021 audited consolidated

monetary statements showing elsewhere on this Annual Report on Kind 10-Okay.

(o) Revenue tax impact of changes utilizing a 26.5% efficient revenue tax price for

fiscal years 2021, 2020 and 2019, aside from sure gadgets with differing tax

    remedies.



Off-Stability Sheet Preparations

We've got not created, and usually are not social gathering to, any special-purpose or off-balance
sheet entities for the aim of elevating capital, incurring debt or working
our enterprise. We should not have any off-balance sheet preparations or relationships
with entities that aren't consolidated into or disclosed in our consolidated
monetary statements which have, or are moderately more likely to have, a fabric
present or future impact on our monetary situation, revenues, bills, outcomes
of operations, liquidity, capital expenditures and capital assets. In
addition, we don't interact in buying and selling actions involving non-exchange traded
contracts. See Observe 18, Commitments and Contingencies, to our 2021 audited
consolidated monetary statements showing elsewhere on this Annual Report on
Kind 10-Okay for added dialogue.

                                       52

——————————————————————————–

  Desk of Contents



Seasonality

In a typical 12 months, our working outcomes are impacted by seasonality.
Traditionally, the slowest gross sales quantity quarter has been the primary fiscal quarter
when the buying seasons for automobiles, reminiscent of faculty buses, RVs and sweepers
are the bottom because of the colder climate and the comparatively very long time till the
summer time trip season, and the truth that the college 12 months is underway with
municipalities and faculty bus contractors using their present fleets to
transport scholar populations. Gross sales of our merchandise have usually been greater
within the second, third and fourth fiscal quarters (with the fourth fiscal quarter
usually being the strongest) attributable to higher climate, the holiday season,
shopping for habits of RV sellers and end-users, timing of presidency/municipal
buyer fiscal years, and the start of a brand new faculty 12 months. Our quarterly
outcomes of operations, money flows, and liquidity are more likely to be impacted by
these seasonal patterns. Gross sales and earnings for different automobiles that we produce,
reminiscent of important emergency automobiles and business bus fleets, are much less
seasonal, however fluctuations in gross sales of those automobiles can be impacted by
timing surrounding the fiscal years of municipalities and business prospects,
in addition to the timing and quantities of multi-unit orders.

Crucial Accounting Insurance policies and Estimates

Our vital accounting insurance policies are described in   Observe 2   to our 2021
audited consolidated monetary statements showing elsewhere on this Annual
Report on Kind 10-Okay for added dialogue. The preparation of consolidated
monetary statements in conformity with U.S. GAAP requires us to make estimates,
assumptions and judgments that have an effect on quantities of belongings and liabilities reported
in our consolidated monetary statements, the disclosure of contingent belongings
and liabilities as of the date of the consolidated monetary statements and
reported quantities of revenues and bills throughout the 12 months. We consider our
estimates and assumptions are cheap; nevertheless, future outcomes may differ
from these estimates. We take into account the next accounting estimates to be the
most important in understanding the judgments which are concerned in making ready our
consolidated monetary statements.

Inventories

Inventories are acknowledged on the decrease of combination price or web realizable worth.
Price is decided utilizing the first-in, first-out ("FIFO") technique. If stock
prices exceed anticipated web realizable worth attributable to obsolescence or portions on
hand are in extra of anticipated demand, the Firm information reserves for the
distinction between the price and the anticipated web realizable worth. These
reserves are recorded based mostly on numerous elements, together with latest gross sales historical past
and gross sales forecasts, trade market circumstances, automobile mannequin adjustments and
normal financial circumstances. The Firm evaluates these reserves a number of occasions
throughout the 12 months and makes changes as crucial based mostly on the elements noticed
above.

Goodwill and Indefinite-Lived Intangible Belongings

The Firm accounts for enterprise mixtures by estimating the honest worth of
consideration paid for acquired companies, together with contingent consideration,
and assigning that quantity to the honest values of belongings acquired and liabilities
assumed, with the rest assigned to goodwill. If the honest worth of belongings
acquired and liabilities assumed exceeds the honest worth of consideration paid, a
acquire on discount buy is acknowledged. The estimates of honest values are
decided using customary valuation procedures and methods, which
require us, amongst different issues, to estimate future money flows and low cost
charges. Such analyses contain vital judgments and estimations.

Goodwill and indefinite-lived intangible belongings, consisting of commerce names, are
not amortized, nevertheless, the Firm opinions goodwill and indefinite-lived
intangible belongings for impairment at the least yearly or extra typically if an occasion
happens or circumstances change which signifies that its carrying quantity might not
exceed its honest worth. The annual impairment assessment is carried out as of the primary
day of the fourth quarter of every fiscal 12 months based mostly upon data and
estimates obtainable at the moment. To carry out the impairment testing, the Firm
first assesses qualitative elements to find out whether or not it's extra probably than
not that the honest values of the Firm's reporting models or indefinite-lived
intangible belongings are lower than their carrying quantities as a foundation for
figuring out whether or not or to not carry out the quantitative impairment check.
Qualitative testing contains the analysis of financial circumstances, monetary
efficiency and different elements reminiscent of key occasions after they happen. The Firm
then estimates the honest worth of every reporting unit and every indefinite-lived
intangible asset not assembly the qualitative standards and compares their honest
values to their carrying values.

Below the quantitative technique, the honest worth of every reporting unit of the
Firm is decided by utilizing primarily the revenue strategy and includes the
use of great estimates and assumptions. The revenue strategy includes
discounting administration's projections of future interim and terminal money flows
to a gift worth at a risk-adjusted low cost price which corresponds with the
Firm's and market-participant weighted-average price of capital ("WACC"). Key
assumptions used within the revenue strategy embrace future gross sales progress, gross
margin and working bills developments, depreciation and amortization expense,
taxes, capital expenditures and adjustments in working capital. Projected future
money flows are based mostly on revenue forecasts and administration's data of the
present working surroundings and expectations for the Firm on a
going-forward foundation. The WACC represents a blended price of fairness and debt
capital relevant to the Firm based mostly on noticed market participant charges of
return for a gaggle of

                                       53

——————————————————————————–

Desk of Contents



comparable public corporations within the trade, makes use of market participant capital
construction assumptions by reference to the trade's common debt to complete
invested capital ratios, and can be being adjusted for relative danger premiums
particular to every reporting unit examined. The terminal residual worth is predicated
upon the projected money move for the ultimate projected 12 months and is calculated
utilizing a capitalization price based mostly on estimates of progress of the online money flows
based mostly on the Firm's estimate of sustainable progress for every monetary
reporting unit. The inputs and assumptions used within the dedication of honest
worth are thought-about Degree 3 inputs inside the honest worth hierarchy.

Below the market strategy, the Firm makes use of multiples of income and
earnings from different publicly traded corporations with comparable operations, to
decide the honest worth of the reporting unit.

If the honest worth of any reporting unit, as calculated utilizing the revenue strategy
and weighted as essential to the market strategy, when relevant, is lower than
its carrying worth, an impairment cost is recorded for any extra of the
reporting unit's carrying worth over it is honest worth, to not exceed the carrying
quantity of goodwill of that reporting unit.

When figuring out the honest worth of indefinite-lived commerce names, the Firm
makes use of the relief-from-royalty ("RFR") technique, inside the revenue strategy. The RFR
technique assumes that an intangible asset is efficacious as a result of the proprietor of the
asset avoids the price of licensing that asset. Below the RFR technique, an estimate
is made as to the suitable royalty revenue that will be negotiated in an
arm's-length transaction if the topic intangible asset had been licensed from an
unbiased third social gathering. The royalty financial savings are then calculated by multiplying
a royalty price, expressed as a proportion of revenues, occasions a decided
relevant degree of future revenues supplied per every commerce title as estimated by
the Firm. The royalty price is predicated on analysis of trade and market information
associated to transactions involving the licensing of comparable intangible belongings.
The ensuing future royalty financial savings are then discounted to their current worth
equal using market participant charges of return, adjusted for relative
danger premiums particular to every commerce title in addition to the reporting unit housing
it. In contemplating the honest worth of commerce names, the Firm additionally considers
relative age, constant use, high quality, growth potentialities, relative
profitability, relative market potential, and the way a market participant might
make use of these intangible belongings from a monetary and financial perspective.

In the course of the fiscal 12 months 2021, the Firm carried out its annual goodwill check
utilizing each a quantitative and qualitative strategy and didn't determine and
goodwill impairments and didn't determine any reporting models vulnerable to failing
the goodwill impairment check. The goodwill balances on the F&E phase are $88.6
million, Industrial phase of $26.2 million and Recreation phase of $42.5
million.

In the course of the fiscal 12 months 2021, the Firm carried out its annual indefinite-lived
commerce title intangibles and didn't determine any impairment and the intangibles
had been all in significantly in extra of their carrying worth.

Guarantee

Provisions for estimated guarantee and different associated prices are recorded in price
of gross sales and are periodically adjusted to replicate precise expertise. The quantity
of accrued guarantee legal responsibility displays administration's greatest estimate of the
anticipated future price of honoring our obligations underneath our restricted guarantee
plans. The prices of fulfilling our guarantee obligations principally contain
alternative elements, labor and typically journey for any discipline retrofit or recall
campaigns. Our estimates are based mostly on historic expertise, the variety of models
concerned and the price per declare. A major improve in alternative elements,
labor and journey may have a fabric antagonistic affect on our working outcomes.
If our reserve had been to alter by 5%, it will not have a fabric affect on our
web revenue for the 12 months ended October 31, 2021. Additionally, every quarter we assessment
precise guarantee claims to find out if there are systemic results that will
require a discipline retrofit or recall marketing campaign.

Current Accounting Pronouncements

Consult with Observe 2 to our 2021 audited consolidated monetary statements showing
elsewhere on this Annual Report on Kind 10-Okay for a dialogue of the affect of
new accounting requirements on the Firm's consolidated monetary statements.

                                       54

——————————————————————————–

Desk of Contents

© Edgar On-line, supply Glimpses

[ad_2]

Source link