REV GROUP, INC. Management’s Discussion and Analysis of Financial Condition and Results of Operations. (form 10-Q)

This management's discussion and analysis should be read in conjunction with the
Condensed Unaudited Consolidated Financial Statements and risk factors contained
in this Form 10-Q as well as the Management's Discussion and Analysis and Risk
Factors and audited consolidated financial statements and the related notes
included in our Annual Report on Form 10-K filed on December 15, 2021.

Overview

REV Group companies are leading designers, manufacturers and distributors of
specialty vehicles and related aftermarket parts and services. We serve a
diversified customer base, primarily in the United States, through three
segments: Fire and Emergency ("F&E"), Commercial, and Recreation. We provide
customized vehicle solutions for applications, including essential needs for
public services (ambulances, fire apparatus, school buses, and transit buses),
commercial infrastructure (terminal trucks and industrial sweepers) and consumer
leisure (recreational vehicles). Our diverse portfolio is made up of
well-established principal vehicle brands, including many of the most
recognizable names within their industry. Several of our brands pioneered their
specialty vehicle product categories and date back more than 50 years. We
believe that we hold the first, second and third market share positions, and
approximately 89% of our net sales during the second quarter of fiscal year 2022
came from products where we believe we hold such share position.

Segments

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

Fire & Emergency - The F&E segment sells and distributes fire apparatus
equipment under the Emergency One ("E-ONE"), Kovatch Mobile Equipment ("KME"),
Ferrara, and Spartan Emergency Response ("Spartan ER"), which consists of
Spartan Emergency Response, Smeal, and Ladder Tower brands, and ambulances under
the American Emergency Vehicles ("AEV"), Horton Emergency Vehicles ("Horton"),
Leader Emergency Vehicles ("Leader"), Road Rescue and Wheeled Coach brands. We
believe we are the largest manufacturer by unit volume of fire and emergency
vehicles in the United States and have one of the industry's broadest portfolios
of products including Type I ambulances (aluminum body mounted on a heavy
truck-style chassis), Type II ambulances (van conversion ambulance), Type III
ambulances (aluminum body mounted on a van-style chassis), pumpers (fire
apparatus on a custom or commercial chassis with a water pump and water tank to
extinguish fires), ladder trucks (fire apparatus with stainless steel or
aluminum ladders), tanker trucks and rescue, aircraft rescue firefighting
("ARFF"), custom cabs & chassis and other vehicles. Each of our individual
brands is distinctly positioned and targets certain price and feature points in
the market such that dealers often carry, and customers often buy more than one
REV F&E product line.

Commercial - Our Commercial segment serves the bus market through the Collins
Bus and ENC brands. We serve the terminal truck market through the Capacity
brand and the sweeper market through the Lay-Mor brand. Our products in the
Commercial segment include transit buses (large municipal buses where we build
our own chassis and body), Type A school buses (small school bus built on
commercial chassis), sweepers (three- and four-wheel versions used in road
construction activities), and terminal trucks (specialized vehicles which move
freight in warehouses, intermodal yards, distribution and fulfillment centers
and ports). Within each market, we produce many customized configurations to
address the diverse needs of our customers.

Recreation - Our Recreation segment serves the RV market through the following
principal brands: American Coach, Fleetwood RV, Holiday Rambler, Renegade,
Midwest and Lance. We believe our brand portfolio contains some of the longest
standing, most recognized brands in the RV industry. Under these brands, REV
provides a variety of highly recognized motorized and towable RV models such as:
American Eagle, Bounder, Pace Arrow, Discovery LXE, Verona, Weekender and Lance,
among others. Our products in the Recreation segment include Class A motorized
RVs (motorhomes built on a heavy-duty chassis with either diesel or gas engine
configurations), Class C and "Super C" motorized RVs (motorhomes built on a
commercial truck or van chassis), Class B RVs (motorhomes built out within a van
chassis and high-end luxury van conversions), and towable travel trailers and
truck campers. The Recreation segment also includes Goldshield Fiberglass, which
produces a wide range of custom molded fiberglass products for the heavy-duty
truck, RV and broader industrial markets.


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Factors Affecting Our Performance

The primary factors affecting our results of operations include:

General Economic Conditions

Our business is impacted by the U.S. economic environment, employment levels,
consumer confidence, municipal spending, municipal tax receipts, changes in
interest rates and instability in securities markets around the world, among
other factors. In particular, changes in the U.S. economic climate can impact
demand in key end markets. In addition, we are susceptible to supply chain
disruptions resulting from the impact of tariffs and global macro-economic
factors (refer to "Impact of COVID-19" section below), which can have a dramatic
effect, either directly or indirectly, on the availability, lead-times and costs
associated with raw materials and parts.

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

While less economically sensitive than the Recreation segment, the F&E segment
and the Commercial segment are also impacted by the overall economic
environment. Local tax revenues are an important source of funding for fire and
emergency response departments. Fire and emergency products and buses are
typically a larger cost item for municipalities and their service life is
relatively long, making the purchase more deferrable, which can result in
reduced demand for our products. In addition to commercial demand, local, state
and federal tax revenues can be an important source of funding for many of our
bus products including Type A school buses and transit buses. Volatility in tax
revenues or availability of funds via budgetary appropriation can have a
negative impact on the demand for these products.

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

Seasonality

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

Impact of Acquisitions

We actively evaluate opportunities to improve and expand our business through
targeted acquisitions that are consistent with our strategy. We also may dispose
of certain components of our business that no longer fit within our overall
strategy. Historically, a significant component of our growth has been through
acquisitions of businesses. We typically incur upfront costs as we integrate
acquired businesses and implement our operating philosophy at newly acquired
companies, including consolidation of supplies and materials, purchases,
improvements to production processes, and other restructuring initiatives. The
benefits of these integration efforts and divestiture activities may not
positively impact our financial results until subsequent periods.

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



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Impact of COVID-19

During our second quarter of fiscal year 2020, the novel coronavirus known as
"COVID-19" spread throughout the world creating a global pandemic. The pandemic
triggered a significant downturn in global commerce and these challenging market
conditions may continue for an extended period of time. As a result of the
spread of COVID-19, we have also experienced disruption and delays in our supply
chain, availability of labor, customer demand changes, and logistics challenges,
including our customers' ability to inspect and take delivery of vehicles.

As the global economy continues to recover from COVID-19 related disruption,
labor and significant supply chain challenges, such as shortages in
semiconductors, subcomponents and increased prices of raw materials, such as
steel and aluminum, have impacted operations of companies on a global scale.
Such supply chain disruptions during the first and second quarters of fiscal
year 2022 impacted our ability to obtain certain raw materials and purchased
components that are necessary to our production processes, including the ability
to obtain chassis from third party suppliers. We continue to monitor these
disruptions and take measures to mitigate the associated risks.

In certain geographies there has been a resurgence of COVID-19 variant cases and
governmental authorities continue to implement numerous measures in an attempt
to contain and mitigate the spread of COVID-19 and its variants. While the
global market impacts, closures and limitations on movement are expected to be
temporary, the duration of any demand changes, production and supply chain
disruptions, and related financial impacts, cannot be reliably estimated at this
time.

Russia-Ukraine War

In late February 2022, Russia invaded Ukraine. As military activity proceeds and
sanctions, export controls and other measures are imposed against Russia,
Belarus and specific areas of Ukraine, the war is increasingly affecting the
global economy and financial markets, as well as exacerbating ongoing economic
challenges, including rising inflation and global supply-chain disruption.
Although we do not have direct suppliers based in Russia or Ukraine, additional
supply delays and possible shortages of critical components may arise as the
conflict progresses and if certain suppliers' operations and/or subcomponent
supply from affected countries are disrupted further. We will continue to
monitor and assess the impacts of the Russia-Ukraine war on macroeconomic
conditions, our suppliers' ability to deliver products and cybersecurity risks.
See "Risk Factors" below.

Results of Operations

                                        Three Months Ended              Six Months Ended
                                             April 30,                      April 30,
($ in millions)                        2022             2021           2022           2021
Net sales                           $     576.3      $    643.6     $  1,113.3     $  1,197.6
Gross profit                               57.1            87.4          112.9          149.1
Selling, general and
administrative                             50.5            48.7           98.1           95.8
Restructuring                               2.9               -            6.6            1.0
Loss on early extinguishment of
debt                                          -             1.4              -            1.4
Loss on sale of business or
business held for sale                      0.1               -            0.1            3.8
Loss on acquisition of business               -               -              -            0.4
(Benefit) provision for income
taxes                                      (0.4 )           7.2           (2.2 )          7.2
Net (loss) income                          (2.3 )          20.6           (3.0 )         20.6

Net (loss) income per common
share
Basic                               $     (0.04 )    $     0.32     $    (0.05 )   $     0.32
Diluted                             $     (0.04 )    $     0.31     $    (0.05 )   $     0.32
Dividends declared per common
share                               $      0.05      $        -     $     0.10     $        -

Adjusted EBITDA                     $      23.8      $     45.5     $     42.1     $     68.9
Adjusted Net Income                 $      10.6      $     25.7     $     18.6     $     34.6





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Net Sales                   Three Months Ended                          Six Months Ended
                   April 30,                   April 30,      April 30,                  April 30,
($ in millions)      2022         Change         2021            2022        Change         2021
Net sales         $     576.3       -10.5 %   $     643.6     $  1,113.3        -7.0 %   $  1,197.6



Net Sales: Consolidated net sales decreased $67.3 million for the three months
ended April 30, 2022 compared to the prior year quarter, primarily due to a
decrease in net sales within the F&E and Commercial segments, partially offset
by an increase in net sales within the Recreation segment. The decrease in net
sales in the F&E segment was primarily due to decreased unit shipments of fire
apparatus and ambulance units resulting from supply chain constraints and an
unfavorable mix of fire apparatus, partially offset by price realization. The
decrease in net sales in the Commercial segment was primarily due to decreased
shipments of municipal transit buses, partially offset by increased shipments of
terminal trucks and street sweepers, and price realization. The increase in net
sales in the Recreation segment was primarily the result of price realization
and favorable mix, partially offset by lower line rates and decreased unit
shipments related to supply chain disruption and labor constraints in certain
businesses.

Consolidated net sales decreased $84.3 million for the six months ended April
30, 2022 compared to the prior year period, primarily due to a decrease in net
sales within the F&E segment, partially offset by an increase in net sales
within the Commercial and Recreation segments. The decrease in sales in the F&E
segment was primarily due to decreased unit shipments of fire apparatus and
ambulance units resulting from supply chain and labor constraints, and an
unfavorable mix of fire apparatus, partially offset by price realization. The
increase in the Commercial segment net sales compared to the prior year period
was primarily due to increased shipments of school buses, terminal trucks and
street sweepers, and price realization, partially offset by decreased shipments
of municipal transit buses. The increase in Recreation segment net sales was
primarily the result of price realization and favorable mix, partially offset by
lower line rates and decreased unit shipments related to supply chain disruption
and labor constraints in certain businesses.


Gross Profit                Three Months Ended                           

Six Months Ended

                   April 30,                   April 30,       April 30,                   April 30,
($ in millions)      2022         Change         2021            2022         Change         2021
Gross profit      $      57.1       -34.7 %   $      87.4     $     112.9       -24.3 %   $     149.1
% of net sales            9.9 %                      13.6 %          10.1 %                      12.4 %


Gross Profit: Consolidated gross profit decreased $30.3 million for the three
months ended April 30, 2022 compared to the prior year quarter. The decrease in
gross profit was primarily attributable to lower net sales, inefficiencies
related to supply chain constraints and costs associated with relocating
production of KME branded fire apparatus to other F&E segment facilities within
the F&E segment, inflationary pressures, and an unfavorable mix within the F&E
and Commercial segments, partially offset by price realization and a favorable
mix in the Recreation segment.

Consolidated gross profit decreased $36.2 million for the six months ended April
30, 2022 compared to the prior year period. The decrease in gross profit was
primarily attributable to lower net sales within the F&E segment, inefficiencies
related to supply chain, labor constraints, and relocating production of KME
branded fire apparatus to other F&E segment facilities within the F&E segment,
inflationary pressures, and unfavorable mix within the F&E and Commercial
segments, partially offset by price realization and a favorable mix in the
Recreation segment.

Selling, General and Administrative              Three Months Ended                            Six Months Ended
                                       April 30,                    April 30,       April 30,                    April 30,
($ in millions)                          2022          Change         2021  

2022 Change 2021
Selling, general and administrative $ 50.5 3.7 % $ 48.7 $ 98.1 2.4 % $ 95.8


Selling, General and Administrative: Consolidated selling, general and
administrative ("SG&A") costs increased $1.8 million for the three months ended
April 30, 2022 compared to the prior year quarter. The increase in SG&A costs
for the three months ended April 30, 2022 was primarily due to an increase in
travel and legal settlement costs.

Consolidated SG&A costs increased $2.3 million for the six months ended April
30, 2022 compared to the prior year period. The increase in SG&A costs for the
six months ended April 30, 2022, was primarily due to an increase in travel and
legal settlement costs.


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Restructuring              Three Months Ended                         Six Months Ended
                  April 30,                 April 30,       April 30,                   April 30,
($ in millions)      2022         Change      2021            2022         Change         2021
Restructuring     $      2.9         n/m   $         -     $       6.6       560.0 %   $       1.0


Restructuring: Consolidated restructuring costs increased $2.9 million for the
three months ended April 30, 2022 compared to the prior year quarter.
Restructuring costs for the three months ended April 30, 2022 were related to
the transition of KME branded fire apparatus production to other REV fire group
facilities within the F&E segment. Refer to Note 8, Restructuring and Other
Related Charges, of the Notes to Condensed Unaudited Consolidated Financial
Statements.

Consolidated restructuring costs increased $5.6 million for the six months ended
April 30, 2022 compared to the prior year. Restructuring costs for the six
months ended April 30, 2022 were related to the transition of KME branded fire
apparatus production to other REV fire group facilities within the F&E segment.
Refer to Note 8, Restructuring and Other Related Charges, of the Notes to
Condensed Unaudited Consolidated Financial Statements.


Loss on Early
Extinguishment of Debt                   Three Months Ended                             Six Months Ended
                               April 30,                     April 30,       April 30,                     April 30,
($ in millions)                  2022           Change         2021             2022          Change         2021
Loss on early
extinguishment of debt       $           -       -100.0 %   $       1.4     

$ – -100.0 % $ 1.4

Loss on Early Extinguishment of Debt: Reflects losses recognized upon
extinguishment of our 2017 ABL Facility and Term Loan. The loss is entirely
comprised of unamortized debt issuance costs that were written off in connection
with this extinguishment.

Loss on Sale of Business or
Business Held for Sale                     Three Months Ended                          Six Months Ended
                                  April 30,                  April 30,       April 30,                   April 30,
($ in millions)                      2022         Change       2021            2022         Change         2021
Loss on sale of business or
business held for sale            $      0.1          n/m   $         -     $       0.1       -97.4 %   $       3.8


Loss on Sale of Business or Business Held for Sale: Consolidated losses on sale
of business or business held for sale increased by $0.1 million for the three
months ended April 30, 2022 compared to the prior year quarter. This was related
to the restructuring activities noted within Note 8, Restructuring and Other
Related Charges.

Consolidated losses on sale of business or business held for sale decreased by
$3.7 million for the six months ended April 30, 2022 compared to the prior year
period. In the first quarter of fiscal year 2021, in connection with a strategic
review of the product portfolio, we made the decision to divest our REV Brazil
business. As a result, a loss of $3.8 million was recorded during the six months
ended April 30, 2021. Refer to Note 7, Divestiture Activities, of the Notes to
Condensed Unaudited Consolidated Financial Statements for further details.

Loss on Acquisition of Business              Three Months Ended                             Six Months Ended
                                   April 30,                     April 30,       April 30,                    April 30,
($ in millions)                      2022            Change        2021            2022          Change         2021
Loss on acquisition of business   $         -             n/m   $         - 

$ – -100.0 % $ 0.4

Loss on Acquisition of Business: During the first quarter of fiscal year 2021,
the preliminary purchase price allocation of the Spartan ER acquisition was
updated to reflect immaterial measurement period adjustments made to
inventories, warranty, and certain other assets acquired and liabilities
assumed. These updates resulted in a decrease to the cumulative gain on
acquisition of $0.4 million.

(Benefit) Provision for Income Taxes              Three Months Ended                            Six Months Ended
                                        April 30,                    April 30,       April 30,                    April 30,
($ in millions)                           2022          Change         2021            2022          Change         2021

(Benefit) provision for income taxes $ (0.4 ) -105.6 % $ 7.2 $ (2.2 ) -130.6 % $ 7.2


(Benefit) Provision for Income Taxes: Consolidated income tax benefit was $0.4
million for the three months ended April 30, 2022, or 14.8% of pre-tax loss,
compared to $7.2 million of expense, or 25.8% of pretax income, for the three
months ended April 30, 2021. Results for the three months ended April 30, 2022
were unfavorably impacted by $0.3 million of net discrete tax expense related to
the loss of a tax attribute. Results for the three months ended April 30, 2021
were favorably impacted by $0.1 million of net discrete tax benefit primarily
related to stock-based compensation tax deductions.

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Consolidated income tax benefit was $2.2 million for the six months ended April
30, 2022, or 42.3% of pre-tax loss, compared to $7.2 million of expense, or
25.9% of pretax income, for the six months ended April 30, 2021. Results for the
six months ended April 30, 2022 were favorably impacted by $0.9 million of net
discrete tax benefit primarily related to stock-based compensation tax
deductions. Results for the six months ended April 30, 2021 were favorably
impacted by $1.2 million of net discrete tax benefit related primarily to the
recognition of deferred taxes on assets classified as held for sale and
stock-based compensation tax deductions.

Net (loss) income                            Three Months Ended                            Six Months Ended
                                   April 30,                    April 30,       April 30,                    April 30,
($ in millions)                      2022          Change         2021            2022          Change         2021
Net (loss) income                 $      (2.3 )     -111.2 %   $      20.6     $      (3.0 )     -114.6 %   $      20.6

Net (Loss) Income: Consolidated net (loss) income decreased $22.9 million for
the three months ended April 30, 2022 compared to the prior year quarter
primarily due to the factors detailed above.

Consolidated net (loss) income decreased $23.6 million for the six months ended
April 30, 2022 compared to the prior year period primarily due to the factors
detailed above.

Adjusted EBITDA             Three Months Ended                           Six Months Ended
                   April 30,                   April 30,       April 30,                   April 30,
($ in millions)      2022         Change         2021            2022         Change         2021
Adjusted EBITDA   $      23.8       -47.7 %   $      45.5     $      42.1       -38.9 %   $      68.9


Consolidated Adjusted EBITDA decreased $21.7 million for the three months ended
April 30, 2022 compared to the prior year quarter, primarily due to a decrease
in Adjusted EBITDA in the F&E and Commercial segments, partially offset by
higher Adjusted EBITDA in the Recreation segment.

Consolidated Adjusted EBITDA decreased $26.8 million for the six months ended
April 30, 2022 compared to the prior year period, due to a decrease in Adjusted
EBITDA in the F&E and Commercial segments, partially offset by higher Adjusted
EBITDA in the Recreation segment.

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

Adjusted Net Income                         Three Months Ended                           Six Months Ended
                                   April 30,                   April 30,       April 30,                   April 30,
($ in millions)                      2022         Change         2021            2022         Change         2021
Adjusted Net Income               $      10.6       -58.8 %   $      25.7   

$ 18.6 -46.2 % $ 34.6


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

Fire & Emergency Segment


                                            Three Months Ended                             Six Months Ended
                                  April 30,                     April 30,       April 30,                    April 30,
($ in millions)                     2022          Change           2021           2022          Change          2021
Net sales                        $     245.0         -20.4 %   $     307.6     $     482.4        -18.0 %   $     588.2
Adjusted EBITDA                         (2.2 )      -110.1 %          21.7            (0.4 )     -101.3 %          31.9
Adjusted EBITDA % of net sales          -0.9 %                         7.1 %          -0.1 %                        5.4 %



F&E segment net sales decreased $62.6 million for the three months ended April
30, 2022
compared to the prior year quarter. The decrease in net sales was
primarily due to decreased shipments of fire apparatus and ambulance units
resulting from supply chain disruptions and an unfavorable mix of fire
apparatus, partially offset by price realization.

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F&E segment net sales decreased $105.8 million for the six months ended April
30, 2022 compared to the prior year period. The decrease in net sales was
primarily due to decreased shipments of fire apparatus and ambulance units
resulting from supply chain disruption and labor constraints and an unfavorable
mix of fire apparatus, partially offset by price realization.

F&E segment Adjusted EBITDA decreased $23.9 million for the three months ended
April 30, 2022 compared to the prior year quarter. The decrease was primarily
due to lower sales volume, an unfavorable mix of fire apparatus, inefficiencies
related to supply chain disruptions, and inflationary pressures, partially
offset by price realization.

F&E segment Adjusted EBITDA decreased $32.3 million for the six months ended
April 30, 2022 compared to the prior year period. The decrease was primarily due
to lower sales volume, and inefficiencies related to supply chain disruption and
labor constraints, partially offset by price realization.

Commercial Segment

                                            Three Months Ended                           Six Months Ended
                                   April 30,                   April 30,       April 30,                   April 30,
($ in millions)                      2022         Change          2021           2022         Change          2021
Net sales                         $      90.7        -7.8 %   $      98.4     $     188.3         3.7 %   $     181.5
Adjusted EBITDA                           4.4       -47.0 %           8.3            12.2       -21.3 %          15.5
Adjusted EBITDA % of net sales            4.9 %                       8.4 %           6.5 %                       8.5 %



Commercial segment net sales decreased $7.7 million for the three months ended
April 30, 2022 compared to the prior year quarter. The decrease in net sales was
primarily due to decreased shipments of municipal transit buses, partially
offset by increased shipments of terminal trucks and street sweepers, and price
realization.

Commercial segment net sales increased $6.8 million for the six months ended
April 30, 2022 compared to the prior year period. The increase in net sales was
primarily due to increased shipments of school buses, terminal trucks and street
sweepers, and price realization, partially offset by decreased shipments of
municipal transit buses.

Commercial segment Adjusted EBITDA decreased $3.9 million for the three months
ended April 30, 2022 compared to the prior year quarter. The decrease was
primarily due to an unfavorable mix of school buses, lower shipments and an
unfavorable mix of municipal transit buses, inefficiencies related to supply
chain disruptions, and inflationary pressures, partially offset by increased
shipments and improved profitability of terminal trucks and price realization.

Commercial segment Adjusted EBITDA decreased $3.3 million for the six months
ended April 30, 2022 compared to the prior year period. The decrease was
primarily due to an unfavorable mix of school buses, lower shipments and an
unfavorable mix of municipal transit buses, inefficiencies related to supply
chain disruptions, and inflationary pressures, partially offset by increased
shipments of street sweepers, increased shipments and improved profitability of
terminal trucks, and price realization.

Recreation Segment

                                             Three Months Ended                            Six Months Ended
                                   April 30,                    April 30,       April 30,                    April 30,
($ in millions)                      2022          Change         2021            2022          Change         2021
Net sales                         $     241.0          1.3 %   $     237.9     $     443.6          3.6 %   $     428.0
Adjusted EBITDA                          28.7         14.3 %          25.1            45.8         13.9 %          40.2
Adjusted EBITDA % of net sales           11.9 %                       10.6 %          10.3 %                        9.4 %




Recreation segment net sales increased $3.1 million for the three months ended
April 30, 2022 compared to the prior year quarter. The increase was primarily
due to strong price realization and favorable mix, partially offset by lower
line rates and unit shipments related to supply chain disruption and labor
constraints in certain businesses.



Recreation segment net sales increased $15.6 million for the six months ended
April 30, 2022 compared to the prior year period. The increase was primarily due
to strong price realization and favorable mix, partially offset by lower line
rates and unit shipments related to supply chain disruption and labor
constraints in certain businesses.

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Recreation segment Adjusted EBITDA increased $3.6 million for the three months
ended April 30, 2022 compared to the prior year quarter. The increase was
primarily due to strong price realization and favorable mix, partially offset by
inefficiencies resulting from supply chain disruption and labor constraints in
certain businesses, and inflationary pressures.

Recreation segment Adjusted EBITDA increased $5.6 million for the six months
ended April 30, 2022 compared to the prior year period. The increase was
primarily due to strong price realization and favorable mix, partially offset by
inefficiencies resulting from supply chain disruption and labor constraints in
certain businesses, and inflationary pressures.

Backlog

Backlog represents firm orders received from dealers or directly from end
customers. The following table presents a summary of our backlog by segment:

                   April 30,       January 31,      April 30,
($ in millions)       2022            2022             2021
Fire & Emergency   $  1,788.3     $     1,655.1     $  1,099.0
Commercial              531.1             459.8          303.1
Recreation            1,302.7           1,282.6          940.5
Total Backlog      $  3,622.1     $     3,397.5     $  2,342.6

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

Orders from our dealers and end customers are evidenced by a contract, firm
purchase order or reserved production slot for delivery of one or many vehicles.
These orders are reported in our backlog at the aggregate selling prices, net of
discounts or allowances.

As of April 30, 2022, our backlog was $3,622.1 million compared to $2,342.6
million as of April 30, 2021. The increase in consolidated backlog was primarily
due to strong order intake within the segments, and lower throughput related to
supply chain and labor constraints in certain businesses. The increase in F&E
segment backlog was primarily the result of strong orders for fire apparatus and
ambulance units. The increase in Commercial segment backlog was primarily the
result of increased orders for school buses, municipal transit buses, terminal
trucks and street sweepers, partially offset by a decline in orders for
municipal transit buses. The increase in Recreation segment backlog was
primarily the result of strong order intake in several product categories and
pricing actions.

Liquidity and Capital Resources

General

Our primary requirements for liquidity and capital are working capital, the
improvement and expansion of existing manufacturing facilities, debt service
payments and general corporate needs. Historically, these cash requirements have
been met through cash provided by operating activities, cash and cash
equivalents and borrowings under our ABL credit facility.

We believe that our sources of liquidity and capital will be sufficient to
finance our continued operations, including working capital requirements,
dividends, share repurchases and growth strategy for at least twelve months.
However, we cannot assure you that cash provided by operating activities and
borrowings under the current ABL facility will be sufficient to meet our future
needs. If we are unable to generate sufficient cash flows from operations in the
future, and if availability under the current ABL facility is not sufficient due
to the size of our borrowing base or other external factors, we may have to
obtain additional financing. If additional capital is obtained by issuing
equity, the interests of our existing stockholders will be diluted. If we incur
additional indebtedness, that indebtedness may contain financial and other
covenants that may significantly restrict our operations or may involve higher
overall interest rates.

                                       26
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Cash Flow

The following table shows summary cash flows for the six months ended April 30,
2022 and April 30, 2021:

                                                        Six Months Ended
                                                            April 30,
($ in millions)                                         2022         2021
Net cash provided by operating activities             $    27.4     $  37.1

Net cash (used in) provided by investing activities (5.9 ) 3.3
Net cash used in financing activities

                     (28.9 )     (44.1 )
Net decrease in cash and cash equivalents             $    (7.4 )   $  (3.7 )





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Net Cash Provided by Operating Activities

Net cash provided by operating activities for the six months ended April 30,
2022 was $27.4 million and was primarily related to the increase of customer
advances and timing of payable payments, partially offset by a decrease in
accounts receivable receipts, an increase in inventory, and a net loss
recognized during the period. The generation of positive cash from operating
activities for the six months ended April 30, 2021, was related to higher net
income and a receipt of a tax refund related to the CARES Act, partially offset
by decreases from the timing of payables.


Net Cash (Used in) Provided by Investing Activities

Net cash used in investing activities for the six months ended April 30, 2022
was $5.9 million and was related to the cash paid for capital expenditures,
partially offset by cash received in connection with the sales of certain
assets. Net cash provided by investing activities for the six months ended April
30, 2021 was $3.3 million and was primarily related to the proceeds from the
sale of land for $8.7 million and other assets, partially offset by cash paid
for capital expenditures.

Net Cash Used in Financing Activities

Net cash used in financing activities for the six months ended April 30, 2022
was $28.9 million, which primarily consisted of share repurchases of $45.9
million, dividends paid of $6.4 million and the payment of taxes on vested share
based payment awards and other financing activities of $4.6 million, partially
offset by net proceeds from our 2021 ABL Facility for $28.0 million. Net cash
used in financing activities for the six months ended April 30, 2021 was $44.1
million, which primarily consisted of net proceeds from our 2021 ABL Facility
offset by the use of those proceeds to repay the 2017 ABL Facility and Term
Loan, and payments for debt issuance costs.

Dividends

Subject to legally available funds and the discretion of our board of directors,
we expect to pay a quarterly cash dividend at the rate of $0.05 per share on our
common stock. Our dividend policy has certain risks and limitations,
particularly with respect to liquidity, and we may not pay dividends according
to our policy, or at all. We cannot assure you that we will declare dividends or
have sufficient funds to pay dividends on our common stock in the future. A
quarterly cash dividend was declared in the amount of $.05 per share of common
stock payable on July 15, 2022, to shareholders of record on June 30, 2022.
During the second quarter of fiscal year 2022, we paid cash dividends of $3.1
million. To date during fiscal year 2022, we have paid cash dividends of $6.4
million.

2021 ABL Facility

On April 13, 2021, the Company entered into a $550.0 million revolving credit
agreement (the "2021 ABL Facility" or "2021 ABL Agreement") with a syndicate of
lenders. The 2021 ABL Facility provides for revolving loans and letters of
credit in an aggregate amount of up to $550.0 million. The total credit facility
is subject to a $30.0 million sublimit for swing line loans and a $35.0 million
sublimit for letters of credit (plus up to an additional $20.0 million of
letters of credit at issuing bank's discretion), along with certain borrowing
base and other customary restrictions as defined in the 2021 ABL Agreement. The
2021 ABL Agreement allows for incremental facilities in an aggregate amount of
up to $100.0 million, plus the excess, if any, of the borrowing base then in
effect over total commitments then in effect. Any such incremental facilities
are subject to receiving additional commitments from lenders and certain other
customary conditions.

The 2021 ABL Facility matures on April 13, 2026. We may prepay principal, in
whole or in part, at any time without penalty.

We were in compliance with all financial covenants under the 2021 ABL Agreement
as of April 30, 2022. As of April 30, 2022, the Company's availability under the
2021 ABL Facility was $293.6 million.

Refer to Note 9, Long-Term Debt, of the Notes to Condensed Unaudited
Consolidated Financial Statements for further details.

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Adjusted EBITDA and Adjusted Net Income

In considering the financial performance of the business, management analyzes
the primary financial performance measures of Adjusted EBITDA and Adjusted Net
Income. Adjusted EBITDA is defined as Net Income (Loss) for the relevant period
before depreciation and amortization, interest expense, income taxes and loss on
early extinguishment of debt, as adjusted for certain items described below that
we believe are not indicative of our ongoing operating performance. Adjusted Net
Income is defined as Net Income (Loss), as adjusted for certain items described
below that we believe are not indicative of our ongoing operating performance.

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

To determine Adjusted EBITDA, we adjust Net Income (Loss) for the following
items: non-cash depreciation and amortization, interest expense, income taxes,
loss on early extinguishment of debt and other items as described below.
Stock-based compensation expense and sponsor expense reimbursement is excluded
from both Adjusted Net Income and Adjusted EBITDA because it is an expense,
which cannot be impacted by our business managers. Stock-based compensation
expense also reflects a cost which may obscure trends in our underlying vehicle
businesses for a given period, due to the timing and nature of the equity
awards. We also adjust for exceptional items, which are determined to be those
that in management's judgment are not indicative of our ongoing operating
performance and need to be disclosed by virtue of their size, nature or
incidence, and include non-cash items and items settled in cash. In determining
whether an event or transaction is exceptional, management considers
quantitative as well as qualitative factors such as the frequency or
predictability of occurrence.

Adjusted EBITDA and Adjusted Net Income (Loss) have limitations as analytical
tools. These are not presentations made in accordance with U.S. GAAP, are not
measures of financial condition and should not be considered as an alternative
to net income or net loss for the period determined in accordance with U.S.
GAAP. The most directly comparable U.S. GAAP measure to Adjusted EBITDA and
Adjusted Net Income is Net Income for the relevant period. Adjusted EBITDA and
Adjusted Net Income are not necessarily comparable to similarly titled measures
used by other companies. As a result, you should not consider this performance
measure in isolation from, or as a substitute analysis for, our results of
operations as determined in accordance with U.S. GAAP. Moreover, such measures
do not reflect:

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

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

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

the cash requirements to pay our taxes.

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The following table reconciles Net (Loss) Income to Adjusted EBITDA for the
periods presented:

                                                 Three Months Ended            Six Months Ended
                                                      April 30,                    April 30,
($ in millions)                                 2022            2021          2022           2021
Net (loss) income                             $    (2.3 )     $    20.6     $    (3.0 )    $   20.6
Depreciation and amortization                       8.7             8.0          18.3          16.7
Interest expense, net                               3.5             5.5           6.9          11.0
Loss on early extinguishment of debt                  -             1.4             -           1.4
(Benefit) provision for income taxes               (0.4 )           7.2          (2.2 )         7.2
EBITDA                                              9.5            42.7          20.0          56.9
Transaction expenses(a)                             0.3             0.3           0.5           2.7
Sponsor expense reimbursement(b)                      -               -           0.1           0.2
Restructuring costs(c)                              2.9               -           6.6           1.0
Restructuring related charges(d)                    4.4             0.3           5.1           0.3
Stock-based compensation expense(e)                 2.2             1.7           4.5           3.6
Legal matters(f)                                    4.4               -           5.2           0.4
Net loss on sale of assets and business
held for sale(g)                                    0.1               -           0.1           2.7
Loss on acquisition of business(h)                    -               -             -           0.4
Losses attributable to assets held for
sale(i)                                               -             0.5             -           0.7
Adjusted EBITDA                               $    23.8       $    45.5     $    42.1      $   68.9




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

                                               Three Months Ended              Six Months Ended
                                                    April 30,                      April 30,
($ in millions)                               2022             2021           2022           2021
Net (loss) income                          $     (2.3 )     $     20.6     $     (3.0 )    $    20.6
Amortization of intangible assets                 2.0              2.5            4.4            5.1
Transaction expenses(a)                           0.3              0.3            0.5            2.7
Sponsor expense reimbursement(b)                    -                -            0.1            0.2
Restructuring costs(c)                            2.9                -            6.6            1.0
Restructuring related charges(d)                  4.4              0.3            5.1            0.3
Stock-based compensation expense(e)               2.2              1.7            4.5            3.6
Legal matters(f)                                  4.4                -            5.2            0.4
Net loss on sale of assets and business
held for sale(g)                                  0.1                -            0.1            2.7
Loss on acquisition of business(h)                  -                -              -            0.4
Losses attributable to assets held for
sale(i)                                             -              0.5              -            0.7
Loss on early extinguishment of debt(j)             -              1.4              -            1.4
Accelerated depreciation on certain
property, plant, and equipment (k)                0.9                -            2.3              -
Income tax effect of adjustments(l)              (4.3 )           (1.6 )         (7.2 )         (4.5 )
Adjusted Net Income                        $     10.6       $     25.7     $     18.6      $    34.6




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(a)

Reflects costs incurred in connection with business acquisitions, dispositions,
and capital market transactions. These expenses consist primarily of legal,
accounting and due diligence expenses.

(b)

Reflects the reimbursement of expenses to our primary equity holder.

(c)

Restructuring costs in the current fiscal year incurred in connection with the
announced closure of certain facilities within the F&E segment.

Restructuring expenses in the prior fiscal year consisted of personnel costs,
including severance, vacation and other employee benefit payments associated
with headcount reductions in Corporate.

(d)

Reflects costs that are directly attributable to restructuring activities, but
do not meet the definition of restructuring under ASC 420.

(e)

Reflects expenses associated with the vesting of equity awards including
employer payroll taxes.

(f)

Reflects legal fees and costs incurred to litigate and settle legal claims
against us which are outside the normal course of business. Costs include
payments: (i) for fees and costs to litigate and settle non-ordinary course
intellectual property and dealer disputes, (ii) for fees and costs to litigate
the putative securities class actions and derivative action pending against us
and certain of our directors and officers (iii) for fees to settle certain
claims arising from a putative class action in the state of California (iv) fees
and costs to settle indemnification liabilities and other claims arising of
previously disposed of businesses.

(g)

The current fiscal year reflects a loss on the sale of a business within the F&E
segment as part of the restructuring activities during the second quarter of
fiscal year 2022.

In the first quarter of fiscal year 2021, in connection with a strategic review
of the product portfolio, we made the decision to divest our REV Brazil
business. As a result, a loss of $3.8 million was recorded during the six months
ended April 30, 2021. We also recorded $1.1 million gain related to the sale of
land previously included within the F&E segment.

(h)

Reflects the initial gain and subsequent adjustments on the acquisition of
Spartan ER, which was completed on February 1, 2020.

(i)

Adjusted EBITDA attributable to businesses that are or were classified as held
for sale, which represents REV Brazil during the first and second quarters of
fiscal year 2021.

(j)

Reflects losses recognized upon extinguishment of our 2017 ABL Facility and Term
Loan. The loss is entirely comprised of unamortized debt issuance costs that
were written off in connection with this extinguishment.

(k)

Reflects accelerated deprecation that was incurred in connection with the
announced closure of certain facilities within the F&E segment.

(l)

Income tax effect of adjustments using a 26.5% effective income tax rate for the
three and six months ended April 30, 2022 and April 30, 2021, except for certain
transaction expenses and losses attributable to assets held for sale.

Off-Balance Sheet Arrangements

We have not created, and are not party to, any special-purpose or off-balance
sheet entities for the purpose of raising capital, incurring debt or operating
our business. We do not have any off-balance sheet arrangements or relationships
with entities that are not consolidated into or disclosed in our consolidated
financial statements that have, or are reasonably likely to have, a material
current or future effect on our financial condition, revenues, expenses, results
of operations, liquidity, capital expenditures and capital resources. In
addition, we do not engage in trading activities involving non-exchange traded
contracts. Refer to Note 13, Commitments and Contingencies, of the Notes to
Condensed Unaudited Consolidated Financial Statements for additional discussion.

Critical Accounting Policies and Estimates

The preparation of consolidated financial statements in conformity with GAAP
requires us to make estimates, assumptions and judgments that affect amounts
reported in the consolidated financial statements and accompanying notes. Our
disclosures of critical accounting policies are reported in our Annual Report on
Form 10-K for the fiscal year ended October 31, 2021. In the first quarter of
fiscal year 2022, we adopted ASU 2019-12 relating to Simplifying the Accounting
for Income Taxes, as discussed in Note 1 of the Notes to Condensed Unaudited
Consolidated Financial Statements.

Recent Accounting Pronouncements

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

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