Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~September~~March 3, ~~2019,~~2020, the registrant had ~~62,207,841~~63,258,385 shares of common stock, $0.001 par value per share, ~~outstanding.~~

This Quarterly Report on Form 10-Q may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue,” “contemplate,” “aim” and other similar expressions, and include our segment net sales and other expectations described under “Overview” below, although not all forward-looking statements contain these identifying words. Investors are cautioned that forward-looking statements are inherently uncertain. A number of factors could cause actual results to differ materially from these statements, including, but not limited to increases in interest rates, availability of credit, low consumer confidence, availability of labor, significant increases in repurchase obligations, inadequate liquidity or capital resources, availability and price of fuel, a slowdown in the economy, increased material and component costs, availability of chassis and other key component parts, sales order cancellations, slower than anticipated sales of new or existing products, new product introductions by competitors, the effect of global tensions and integration of operations relating to mergers and acquisitions activities. Additional information concerning certain risks and uncertainties that could cause actual results to differ materially from that projected or suggested is contained in the “Risk Factors” section in our filings with the U.S. Securities and Exchange Commission (“SEC”). We disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this Form 10-Q or to reflect any changes in expectations after the date of this release or any change in events, conditions or circumstances on which any statement is based, except as required by law.

We use our website (www.revgroup.com) and corporate Twitter account (@revgroupinc) as routine channels of distribution of company information, including news releases, analyst presentations, and supplemental financial information, as a means of disclosing material non-public information and for complying with our disclosure obligations under SEC Regulation FD. Accordingly, investors should monitor our website and our corporate Twitter account in addition to following press releases, SEC filings and public conference calls and webcasts. Additionally, we provide notifications of news or announcements as part of our investor relations website. Investors and others can receive notifications of new information posted on our investor relations website in real time by signing up for email alerts.

None of the information provided on our website, in our press releases, public conference calls and webcasts, or through social media channels is incorporated into, or deemed to be a part of, this Quarterly Report on Form 10-Q or in any other report or document we file with the SEC, and any references to our website or our social media channels are intended to be inactive textual references only.

										(Audited)
	July 31, 2019			October 31, 2018			January 31, 2020			October 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	19.8		$	11.9		$	67.3		$	3.3
Accounts receivable, net		236.2			266.9			230.5			253.5
Inventories, net		557.9			514.0			532.7			513.4
Other current assets		51.3			50.3			22.9			19.4
Assets held for sale								—			19.5
Total current assets		865.2			843.1			853.4			809.1
Property, plant and equipment, net		203.2			214.3			198.5			201.7
Goodwill		159.8			161.8			159.8			159.8
Intangible assets, net		163.9			174.6			155.9			159.9
Right of use assets								21.9			—
Other long-term assets		14.0			14.3			16.5			16.6
Total assets	$	1,406.1		$	1,408.1		$	1,406.0		$	1,347.1
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt	$	1.8		$	1.3		$	3.4		$	3.6
Accounts payable		211.0			218.1			187.4			200.8
Customer advances		128.1			117.8			139.3			129.9
Accrued warranty		13.8			19.0			15.6			16.1
Short-term lease obligations								7.2			—
Liabilities held for sale								—			15.4
Other current liabilities		63.2			55.5			55.0			70.2
Liabilities held for sale		16.6			5.5
Total current liabilities		434.5			417.2			407.9			436.0
Long-term debt, less current maturities		416.8			420.6			458.3			376.6
Deferred income taxes		23.4			19.9			17.2			15.4
Long-term lease obligations								14.7			—
Other long-term liabilities		13.9			18.0			12.0			13.9
Total liabilities		888.6			875.7			910.1			841.9
Commitments and contingencies
Shareholders' Equity:
Common stock ($.001 par value, 605,000,000 shares authorized; 62,207,841 and 62,683,808 shares issued and outstanding, respectively)		0.1			0.1
Common stock ($.001 par value, 605,000,000 shares authorized; 62,680,472 and 62,217,486 shares issued and outstanding, respectively)								0.1			0.1
Additional paid-in capital		490.4			492.1			494.2			490.8
Retained earnings		27.6			40.6			3.3			15.8
Accumulated other comprehensive loss		(1.6	)		(1.4	)		(1.7	)		(1.7	)
Total REV's shareholders' equity		516.5			531.4			495.9			505.0
Non-controlling interest		1.0			1.0			—			0.2
Total shareholders' equity		517.5			532.4			495.9			505.2
Total liabilities and shareholders' equity	$	1,406.1		$	1,408.1		$	1,406.0		$	1,347.1

Condensed Unaudited Consolidated Statements of Operations and Comprehensive ~~Income (Loss)~~Loss

	Three Months Ended July 31,					Nine Months Ended July 31,						Three Months Ended January 31,
	2019		2018			2019			2018			2020			2019
Net sales	$	617.0	$	597.7		$	1,750.8		$	1,721.4		$	532.1		$	518.7
Cost of sales		545.7		518.2			1,560.7			1,516.6			484.7			472.4
Gross profit		71.3		79.5			190.1			204.8			47.4			46.3
Operating expenses:
Selling, general and administrative		48.9		43.5			145.3			133.2			46.3			47.8
Research and development costs		1.2		1.6			3.7			4.9			1.2			1.3
Amortization of intangible assets		4.0		4.6			13.2			13.6			4.0			4.6
Restructuring		1.3		0.9			4.2			6.9			0.6			1.1
Impairment charges		—		—			2.8			—			—			2.7
Total operating expenses		55.4		50.6			169.2			158.6			52.1			57.5
Operating income		15.9		28.9			20.9			46.2
Operating loss													(4.7	)		(11.2	)
Interest expense, net		8.4		6.8			24.2			18.3			7.3			7.8
Income (loss) before provision (benefit) for income taxes		7.5		22.1			(3.3	)		27.9
Provision (benefit) for income taxes		1.9		3.8			—			(7.2	)
Net income (loss)	$	5.6	$	18.3		$	(3.3	)	$	35.1
Loss before benefit for income taxes													(12.0	)		(19.0	)
Benefit for income taxes													(2.6	)		(4.4	)
Net loss												$	(9.4	)	$	(14.6	)

Other comprehensive loss, net of tax		—		(0.4	)		(0.2	)		(1.2	)		—			—
Comprehensive income (loss)	$	5.6	$	17.9		$	(3.5	)	$	33.9
Comprehensive loss												$	(9.4	)	$	(14.6	)

Income (loss) per common share:
Loss per common share:
Basic	$	0.09	$	0.29		$	(0.05	)	$	0.55		$	(0.15	)	$	(0.23	)
Diluted	$	0.09	$	0.28		$	(0.05	)	$	0.53		$	(0.15	)	$	(0.23	)
Dividends declared per common share	$	0.05	$	0.05		$	0.15		$	0.15		$	0.05		$	0.05

	Nine Months Ended July 31,						Three Months Ended January 31,
	2019			2018			2020			2019
Cash flows from operating activities:
Net (loss) income	$	(3.3	)	$	35.1
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Net loss							$	(9.4	)	$	(14.6	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		34.8			33.9			10.8			12.4
Amortization of debt issuance costs		1.5			1.3			0.5			0.4
Stock-based compensation expense		7.3			5.1			2.6			1.4
Deferred income taxes		3.5			(0.8	)		1.8			2.9
Gain on sale of assets		(1.7	)		(2.2	)		(0.5	)		(0.3	)
Impairment charges		2.8			—			—			2.7
Changes in operating assets and liabilities, net of effects of business acquisitions		(22.9	)		(129.2	)
Net cash provided by (used in) operating activities		22.0			(56.8	)
Changes in operating assets and liabilities, net								(19.1	)		(44.3	)
Net cash used in operating activities								(13.3	)		(39.4	)
Cash flows from investing activities:
Purchase of property, plant and equipment		(14.1	)		(31.9	)		(3.2	)		(6.3	)
Purchase of rental fleet vehicles		(3.0	)		(15.9	)
Purchase of rental and used vehicles								(2.7	)		(3.0	)
Proceeds from sale of assets		22.6			6.4			3.5			2.1
Investment in China JV		—			(7.6	)
Acquisition of businesses, net of cash acquired		—			(60.1	)
Net cash provided by (used in) investing activities		5.5			(109.1	)
Proceeds from sale of business, net								1.1			—
Net cash used in investing activities								(1.3	)		(7.2	)
Cash flows from financing activities:
Net (repayments) proceeds from borrowings under revolving credit facility		(52.0	)		161.5
Net proceeds from borrowings of Term Loan		49.2			50.0
Net proceeds from borrowings under April 2017 ABL Facility								82.0			51.2
Payment of dividends		(9.4	)		(9.7	)		(3.1	)		(3.1	)
Repurchase and retirement of common stock		(8.3	)		(45.5	)
Other financing activities		0.9			6.5			(0.3	)		0.1
Net cash (used in) provided by financing activities		(19.6	)		162.8
Net increase (decrease) in cash and cash equivalents		7.9			(3.1	)
Net cash provided by financing activities								78.6			48.2
Net increase in cash and cash equivalents								64.0			1.6
Cash and cash equivalents, beginning of period		11.9			17.8			3.3			11.9
Cash and cash equivalents, end of period	$	19.8		$	14.7		$	67.3		$	13.5

Supplemental disclosures of cash flow information:
Cash paid (received) for:
Interest	$	22.6		$	16.7	$	7.5	$	7.4
Income taxes, net of refunds	$	(9.0	)	$	15.2	$	—	$	(8.4	)

Condensed Unaudited Consolidated ~~Statements~~Statement of Shareholders’ Equity

	Common Stock					Additional Paid-in			Retained			Accumulated Other Comprehensive			Total REV's Shareholders'			Common Stock				Additional Paid-in		Retained			Non-controlling			Accumulated Other Comprehensive			Total REV's Shareholders'
	Amount		# Shares			Capital			Earnings			Loss			Equity			Amount		# Shares		Capital		Earnings			Interest			Loss			Equity
Balance, October 31, 2017	$	0.1		64,145,945 Sh.		$	532.0		$	40.4		$	—		$	572.5
Net income										9.4						9.4
Balance, October 31, 2019																		$	0.1		62,217,486 Sh.	$	490.8	$	15.8		$	0.2		$	(1.7	)	$	505.2
Net loss																									(9.4	)								(9.4	)
Sale of business																												(0.2	)					(0.2	)
Other comprehensive loss, net of tax													(0.3	)		(0.3	)														—			—
Stock-based compensation expense							0.5									0.5							2.6											2.6
Exercise of common stock options		—		418,116 Sh.			2.8									2.8			—		102,000 Sh.		0.8											0.8
Vesting of restricted stock, net of employee tax withholding		—		9,688 Sh.			(0.1	)								(0.1	)
Vesting of restricted and performance stock, net of employee tax withholdings																			—		360,986 Sh.		—											—
Dividends declared on common stock										(3.2	)					(3.2	)								(3.1	)								(3.1	)
Balance, January 31, 2018	$	0.1		64,573,749 Sh.		$	535.2		$	46.6		$	(0.3	)	$	581.6
Net income										7.4						7.4
Other comprehensive loss, net of tax													(0.5	)		(0.5	)
Stock-based compensation expense							1.0									1.0
Vesting of restricted stock, net of employee tax withholding		—		3,543 Sh.												—
Dividends declared on common stock										(3.3	)					(3.3	)
Repurchase and retirement of common stock				(238,547 Sh.	)		(4.8	)								(4.8	)
Balance, April 30, 2018	$	0.1		64,338,745 Sh.		$	531.4		$	50.7		$	(0.8	)	$	581.4
Net income										18.3						18.3
Other comprehensive loss, net of tax													(0.4	)		(0.4	)
Stock-based compensation expense							1.1									1.1
Exercise of common stock options				1,328,667 Sh.			6.8									6.8
Dividends declared on common stock										(3.1	)					(3.1	)
Repurchase and retirement of common stock				(2,475,967 Sh.	)		(40.7	)								(40.7	)
Balance, July 31, 2018	$	0.1		63,191,445 Sh.		$	498.6		$	65.9		$	(1.2	)	$	563.4
Balance, January 31, 2020																		$	0.1		62,680,472 Sh.	$	494.2	$	3.3		$	—		$	(1.7	)	$	495.9


	Common Stock					Additional Paid-in			Retained			Accumulated Other Comprehensive			Total REV's Shareholders'			Common Stock				Additional Paid-in		Retained			Accumulated Other Comprehensive			Total REV's Shareholders'
	Amount		# Shares			Capital			Earnings			Loss			Equity			Amount		# Shares		Capital		Earnings			Loss			Equity
Balance, October 31, 2018	$	0.1		62,683,808 Sh.		$	492.1		$	40.6		$	(1.4	)	$	531.4		$	0.1		62,683,808 Sh.	$	492.1	$	40.6		$	(1.4	)	$	531.4
Net loss										(14.6	)					(14.6	)								(14.6	)					(14.6	)
Other comprehensive income (loss), net of tax													—			—												—			—
Stock-based compensation expense							1.4									1.4							1.4								1.4
Exercise of common stock options		—		20,000 Sh.			0.1									0.1			—		20,000 Sh.		0.1								0.1
Vesting of restricted and performance stock, net of shares withheld for employee taxes		—		94,237 Sh.			—									—
Vesting of restricted and performance stock, net of employee tax withholdings																			—		94,237 Sh.		—								—
Dividends declared on common stock										(3.2	)					(3.2	)								(3.2	)					(3.2	)
Balance, January 31, 2019	$	0.1		62,798,045 Sh.		$	493.6		$	22.8		$	(1.4	)	$	515.1		$	0.1		62,798,045 Sh.	$	493.6	$	22.8		$	(1.4	)	$	515.1
Net income										5.6						5.6
Other comprehensive loss, net of tax													(0.2	)		(0.2	)
Stock-based compensation expense							2.9									2.9
Exercise of common stock options		—		54,000 Sh.			0.4									0.4
Vesting of restricted and performance stock, net of shares withheld for employee taxes		—		40,828 Sh.			—									—
Dividends declared on common stock										(3.2	)					(3.2	)
Repurchase and retirement of common stock				(495,475 Sh.	)		(5.3	)								(5.3	)
Balance, April 30, 2019	$	0.1		62,397,398 Sh.		$	491.6		$	25.2		$	(1.6	)	$	515.3
Net income										5.6						5.6
Other comprehensive loss, net of tax													—			—
Stock-based compensation expense							1.7									1.7
Exercise of common stock options		—		25,999 Sh.			0.1									0.1
Vesting of restricted and performance stock, net of shares withheld for employee taxes		—		6,566 Sh.			—									—
Dividends declared on common stock										(3.2	)					(3.2	)
Repurchase and retirement of common stock				(222,122 Sh.	)		(3.0	)								(3.0	)
Balance, July 31, 2019	$	0.1		62,207,841 Sh.		$	490.4		$	27.6		$	(1.6	)	$	516.5

The unaudited Condensed Consolidated Financial Statements include the accounts of REV Group, Inc. (“REV” or “the Company”) and all its subsidiaries. In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements contain all adjustments (which include normal recurring adjustments, unless otherwise noted) necessary to present fairly the financial position, results of operations and cash flows for the periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP) have been condensed or omitted pursuant to the rules and regulations of the U.S. Securities and Exchange Commission. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited financial statements and notes thereto included in the Annual Report on Form 10-K of the Company for the year ended October 31, ~~2018.~~2019. The interim results are not necessarily indicative of results for the full year. Certain reclassifications have been made to the fiscal year ~~2018~~2019 financial statements to conform to the fiscal year ~~2019~~2020 presentation.

Equity Sponsor: The Company’s primary equity holders are funds and an investment vehicle associated with AIP CF IV, LLC, which the Company collectively refers to as “American Industrial Partners,” “AIP” or “Sponsor” and which indirectly own approximately ~~54.3%~~53.9% of REV Group’s voting equity as of ~~July~~January 31, ~~2019.~~2020. AIP is an operations and engineering-focused private equity firm headquartered in New York, New York.

Related Party Transactions: During the three months ended ~~July~~January 31, ~~2019~~2020 and ~~July~~January 31, ~~2018, the Company reimbursed expenses of its primary equity holder of less than $0.1 million and $0.2 million, respectively. During the nine months ended July 31,~~ 2019, ~~and July 31, 2018,~~ the Company reimbursed expenses of its primary equity holder in the amount of ~~$0.6~~$0.1 million and $0.5 million, respectively. These expenses are included in selling, general and administrative expenses in the Company’s Condensed Unaudited Consolidated Statements of Operations.

Certain production facilities and offices for two of the Company’s subsidiaries are leased from ~~related parties owned by~~ certain members of management. Rent expense under these arrangements totaled $0.5 million and ~~$0.4~~$0.5 million for the three months ended ~~July~~January 31, ~~2019,~~2020, and ~~July~~January 31, ~~2018, respectively. Rent expense under these arrangements totaled $1.5 million and $1.0 million for the nine months ended July 31,~~ 2019, ~~and July 31, 2018,~~ respectively.

~~The following accounting pronouncements did not have a material impact on the Company’s consolidated financial statements:~~

assets on the balance sheet and disclosing key information about leasing arrangements. The Company adopted the new ~~guidance~~standard on November 1, 2018 and applied the standard to all of its contracts using the modified retrospective approach. Under this method, the Company must recognize the cumulative effect of the changes in retained earnings on the date of adoption. The Company has determined the adoption of ASU 2014-09 did not have a material impact on its financial statements at the date of adoption. Accordingly, no cumulative effect adjustment to retained earnings was required and there are no other financial statement line items that were impacted by the adoption.

The Company is currently evaluating its lease population to assess the effect of the new guidance on the Company’s consolidated financial statements. It is also focused on changing its policies, business processes, internal controls, and disclosures to support the Company’s implementation and compliance with Topic 842. The Company plans to adopt the new standard using2019, following the optional transition method provided by ~~accounting pronouncement,~~ ASU No. ~~2018-11, through a cumulative effect adjustment~~2018-11. Accordingly, prior period comparative information was not recast to retained earnings as of the beginning of the period of adoption. While the Company continues to make progress on its implementation and compliance with the requirements of the new standard, the Company is still evaluatingreflect the impact of the new guidance and therefore continues to be reported under the accounting guidance in effect during those periods (ASC 840). The most significant impact of the Company’s adoption of ASC 842 is the recognition of ROU assets and lease liabilities on the balance sheet for operating leases. The adoption did not have any impact on the Company’s results of operations or cash flows.

ASC 842 provides a number of optional transition related practical expedients. The Company elected to adopt the standard using the package of practical expedients, which allowed the Company not to reassess prior conclusions about the identification of leases, the classification of leases, and the treatment of initial direct costs. ASC 842 also provides a number of optional practical expedients for an entity’s ongoing lessee accounting. In connection with our evaluation of these practical expedients, the Company has elected not to separate payments for lease components from payments for non-lease components for all classes of leases. Additionally, the Company has elected the short-term lease recognition exemption for all leases that qualify, which means ROU assets and lease liabilities will not be recognized for leases with an initial term of twelve months or less.

On February 1, 2020, the Company acquired Spartan Emergency Response (“Spartan ER”), a leading designer, manufacturer and distributor of custom emergency response vehicles, cabs and chassis for the emergency response market, and its ~~consolidated financial statements.~~brands, from Spartan Motors, Inc. (NASDAQ: SPAR). The Company acquired certain assets of Spartan ER for approximately $55 million in cash, subject to a customary capital adjustment.

Substantially all of the Company’s revenue is recognized from contracts with customers with product shipment destinations in the United States and Canada. The Company accounts for a contract when it has approval and commitment from both parties, the rights and payment terms of the parties are identified, the contract has commercial substance and collectability of consideration is probable. The Company determines the transaction price for each contract at inception based on the consideration that it expects to receive for the goods and services promised under the contract. The ~~Company made an accounting policy election so that the~~ transaction price excludes sales and usage-based taxes collected.

The Company’s primary source of revenue is generated from the manufacture and sale of specialty vehicles through its direct sales force or dealer network. The Company also generates revenue through separate contracts that relate to the sale of aftermarket parts and services. Revenue is typically recognized at a point-in-time, when control is transferred, which generally occurs when the product has been shipped to the customer or when it has been picked-up from the Company’s manufacturing facilities. ~~The Company has made an accounting policy election to account for any shipping~~Shipping and handling costs that occur after the transfer of control ~~as a~~are fulfillment ~~cost~~costs that isare accrued when control is transferred. Periodically, certain customers request bill and hold transactions. In such cases, revenue is not recognized until after control has transferred which is generally when the customer has requested such transaction and has been notified that the product (i) has been completed according to customer specifications, (ii) has passed our quality control inspections, and (iii) has been separated from our inventory and is ready for physical transfer to the customer. Warranty obligations associated with the sale of a unit are assurance-type warranties that are a guarantee of the unit’s intended functionality and, therefore, do not represent a distinct performance obligation within the context of the contract. ~~The Company does not disclose information about remaining performance obligations at period end because the Company’s contracts generally have original expected durations of one year or less.~~

The Company is generally entitled to bill its customers upon satisfaction of its performance obligations, and payment is usually received shortly after billing. Payments for certain contracts are received in advance of satisfying the related performance obligations. Such payments are recorded as customer advances in the Company’s Condensed Unaudited Consolidated Balance Sheets. The corresponding performance obligations are generally satisfied within one year of the contract inception. During the ~~nine~~three months ended ~~July~~January 31, 2020 and January 31, 2019, the Company recognized ~~$69.9~~$54.4 million and $43.7 million, respectively, of revenue that was included in the customer ~~advances balance~~advance balances as of October 31, ~~2018.~~2019 and October 31, 2018, respectively. The Company’s payment terms do not include a significant financing component and the Company does not have significant contract assets.

The Company leases certain administrative and production facilities and equipment under long-term, non-cancelable operating lease agreements. The Company determines if an arrangement is or contains a lease at contract inception and recognizes a ROU asset and a lease liability based on the present value of fixed, and certain index-based lease payments at the lease commencement date. Variable payments are excluded from the present value of lease payments and are recognized in the period in which the payment is made. Lease agreements may include options to extend or terminate the lease or purchase the underlying asset. In situations where the Company is reasonably certain to exercise such options, they are considered in determining the lease term and the associated option payments, or exercise price in the case of an option to purchase, are included in the measurement of the lease liabilities and ROU assets. The Company’s leases generally do not include restrictive financial or other covenants, or residual value guarantees. The Company generally uses its incremental borrowing rate as the discount rate for measuring its lease liabilities, as the Company cannot determine the interest rate implicit in the lease because it does not have access to certain lessor specific information. Lease expense is recognized on a straight-line basis over the lease term. The Company does not have significant finance leases.

During the three months ended January 31, 2020, the Company recognized total operating lease costs of approximately $2.3 million and paid cash of $2.2 million for amounts included in the measurement of lease liabilities.

At January 31, 2020, future minimum operating lease payments due under ASC 842 are summarized by year in the table below:

As of January 31, 2020, the weighted average remaining lease term and the weighted average discount rate for operating leases was 3.3 years and 5.1%, respectively.

As of October 31, 2019, future minimum operating lease payments (under ASC 840) were as follows:

	July 31, 2019			October 31, 2018			January 31, 2020			October 31, 2019
Chassis	$	46.8		$	53.3		$	60.4		$	44.9
Raw materials		220.3			188.4			195.2			198.1
Work in process		202.5			195.7			212.3			200.8
Finished products		100.1			91.6			74.7			79.6
		569.7			529.0			542.6			523.4
Less: reserves		(11.8	)		(15.0	)		(9.9	)		(10.0	)
Total inventories, net	$	557.9		$	514.0		$	532.7		$	513.4

	July 31, 2019			October 31, 2018			January 31, 2020			October 31, 2019
Land & land improvements	$	24.0		$	23.9		$	24.3		$	24.2
Buildings & improvements		106.1			102.5			107.8			107.6
Machinery & equipment		84.9			77.1			94.3			93.1
Rental fleet		25.2			35.4
Rental & used vehicles								22.5			24.4
Computer hardware & software		57.2			56.1			62.3			58.1
Office furniture & fixtures		5.7			5.1			5.7			5.8
Construction in process		17.2			14.7			9.0			11.4
		320.3			314.8			325.9			324.6
Less: accumulated depreciation		(117.1	)		(100.5	)		(127.4	)		(122.9	)
Total property, plant and equipment, net	$	203.2		$	214.3		$	198.5		$	201.7

Depreciation expense was ~~$6.7~~$6.8 million and ~~$7.1~~$7.8 million for the three months ended ~~July~~January 31, 2020, and January 31, 2019, ~~and July 31, 2018, respectively, and $21.5 million and $20.2 million for the nine months ended July 31, 2019, and July 31, 2018,~~ respectively.

	July 31, 2019		October 31, 2018		January 31, 2020		October 31, 2019
Fire & Emergency	$	88.6	$	88.6	$	88.6	$	88.6
Commercial		28.7		28.7		28.7		28.7
Recreation		42.5		44.5		42.5		42.5
Total goodwill	$	159.8	$	161.8	$	159.8	$	159.8

The change in the net carrying value amount of goodwill consisted of the following:

	Nine Months Ended July 31,					Three Months Ended January 31,
	2019			2018		2020		2019
Balance at beginning of period	$	161.8		$	133.2	$	159.8	$	161.8
Activity during the period:
Acquisitions		(2.0	)		29.4		—		(2.0	)
Balance at end of period	$	159.8		$	162.6	$	159.8	$	159.8

									January 31, 2020
	Weighted- Average Life		July 31, 2019			October 31, 2018			Weighted- Average Life		Gross		Accumulated Amortization			Net
Finite-lived intangible assets:
Customer relationships		8.0	$	126.7		$	124.7			8.0	$	111.6	$	(72.9	)	$	38.7
Order backlog		1.0		6.7			6.7			1.0		5.2		(5.2	)		—
Non-compete agreements		5.0		2.0			2.0			5.0		2.1		(1.4	)		0.7
Trade names		7.0		3.5			3.5			7.0		3.5		(2.9	)		0.6
Technology-related		7.0		0.9			0.7			7.0		0.9		(0.9	)		—
				139.8			137.6					123.3		(83.3	)		40.0
Less: accumulated amortization				(91.8	)		(78.9	)
				48.0			58.7
Indefinite-lived trade names				115.9			115.9					115.9		—			115.9
Total intangible assets, net			$	163.9		$	174.6				$	239.2	$	(83.3	)	$	155.9

Amortization expense was ~~$4.1~~$4.0 million and $4.6 million for the three months ended ~~July~~January 31, 2020, and January 31, 2019, respectively. As of January 31, 2020, we wrote off fully amortized intangible assets and ~~July 31, 2018, respectively, and $13.3 and $13.7 million for~~ the ~~nine months ended July 31, 2019, and July 31, 2018, respectively.~~related accumulated amortization.

In fiscal year 2018, management decided to divest certain businesses and assets which include the Revability business, one Regional Technical Center (“RTC”), a portion of the Company’s rental fleet, and certain other assets. ~~On December 21, 2018,~~In the first quarter of fiscal year 2019, the Company completed the sale of its mobility van business, Revability, with annual sales of approximately $40 million. All assets and operations at the Clarkston and Davisburg, Michigan facilities were transferred to the buyer. ~~On February 21,~~In the second quarter of fiscal year 2019, the Company completed the sale of the RTC for net cash proceeds of $11.4 million. In connection with this sale, the Company recognized a gain on sale of $1.2 million.

The assets and liabilities related to the businesses that met the held for sale criteria are included in Other current assets and Liabilities held for sale in the Condensed Unaudited Consolidated Balance Sheets at estimated fair value, less cost to sell.

As of ~~July~~October 31, 2019, assets and liabilities held for sale ~~were comprised~~consisted of the following: property, plant and equipment, net—$0.2 million, inventories, net—$~~17.1~~14.0 million, accounts receivable, net—$~~0.5~~0.4 million, other current and long-term assets—$~~3.8~~4.9 million, accounts payable—$~~12.8~~11.7 million and other current and long-term liabilities—$~~3.8~~3.7 million.

In the first quarter of fiscal year 2020, the Company completed the sale of REV Coach. The Company received cash proceeds of $1.1 million in the first quarter of fiscal year 2020, and the remaining $1.0 million is expected to be received in the second quarter of fiscal year 2020. Buyer will also purchase spare parts related to the REV Coach business during the second quarter of fiscal year 2020.

There were no assets and liabilities held for sale on the Company’s Condensed Unaudited Consolidated Balance Sheets as of January 31, 2020.

Effective April 25, 2017, the Company entered into a $350.0 million revolving credit and guaranty agreement (the “April 2017 ABL Facility” or “ABL Agreement”) with a syndicate of lenders. The April 2017 ABL Facility consists of: (i) Revolving Loans, (ii) Swing Line Loans, and (iii) Letters of Credit, aggregating up to a combined maximum of $350.0 million. The total amount borrowed under the April 2017 ABL Facility is subject to a $30.0 million sublimit for Swing Line loans and a $35.0 million sublimit for Letters of Credit, along with certain borrowing base and other customary restrictions as defined in the ABL Agreement. The Company incurred $4.9 million of debt issuance costs related to the April 2017 ABL Facility. The amount of debt issuance costs is included in other long-term assets in the Company’s Condensed Unaudited Consolidated Balance Sheets.

The April 2017 ABL Facility allows for incremental borrowing capacity 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 borrowing capacity is subject to receiving additional commitments from lenders and certain other customary conditions. The April 2017 ABL Facility matures on April 25, 2022. The Company may prepay principal, in whole or in part, at any time without penalty.

Revolving Loans under the April 2017 ABL Facility bear interest at rates equal to, at the Company’s option, either a base rate plus an applicable margin, or a Eurodollar rate plus an applicable margin. Applicable interest rate margins are initially 0.75% for all base rate loans and 1.75% for all Eurodollar rate loans (with the Eurodollar rate having a floor of 0%), subject to adjustment based on utilization in accordance with the ABL Agreement. Interest is payable quarterly for all base rate loans and is payable monthly or quarterly for all Eurodollar rate loans.

The lenders under the April 2017 ABL Facility have a first priority security interest in substantially all accounts receivable and inventory of the Company, and a second priority security interest in substantially all other assets of the Company.

The April 2017 ABL Facility contains customary representations and warranties, affirmative and negative covenants, subject in certain cases to customary limitations, exceptions and exclusions. The April 2017 ABL Facility also contains certain customary events of default, which should such events occur, could result in the termination of the commitments under the April 2017 ABL Facility and the acceleration of all outstanding borrowings under it. The April 2017 ABL Facility contains a financial covenant restricting the Company from allowing its fixed charge coverage ratio to drop below 1.00 to 1.00 during a compliance period, which is triggered when the availability under the April 2017 ABL Facility falls below a threshold set forth in the credit agreement.

The Company was in compliance with all financial covenants under the April 2017 ABL Facility as of ~~July~~January 31, ~~2019.~~2020. As of ~~July~~January 31, ~~2019,~~2020, the Company’s availability under the April 2017 ABL Facility was ~~$186.9~~$196.6 million.

The fair value of the April 2017 ABL Facility approximated book value at both ~~July~~January 31, ~~2019~~2020 and October 31, ~~2018.~~2019.

Effective April 25, 2017, the Company entered into a $75.0 million term loan agreement (“Term Loan” and “Term Loan Agreement”), as Borrower with certain subsidiaries of the Company, acting as guarantors of debt. Principal may be prepaid at any time during the term of the Term Loan without penalty. The Company incurred $2.0 million of debt issuance costs related to the Term Loan.

The Term Loan Agreement allows for incremental facilities in an aggregate amount of up to $125.0 million. Any such incremental facilities are subject to receiving additional commitments from lenders and certain other customary conditions. The Term Loan agreement requires quarterly payments of 0.25% of the original principal balance, with remaining principal payable at maturity, April 25, 2022.

The lenders under the Term Loan have a second priority security interest in substantially all accounts receivable and inventory of the Company.

Applicable interest rate margins for the Term Loan are 2.50% for base rate loans and 3.50% for Eurodollar rate loans (with the Eurodollar rate having a floor of 1.00%). Interest is payable quarterly for all base rate loans and is payable monthly or quarterly for all Eurodollar rate loans. The weighted-average interest rate on borrowings outstanding under the Term Loan at ~~July~~January 31, ~~2019~~2020 was ~~5.77%~~5.15%.

The Term Loan Agreement contains customary representations and warranties, affirmative and negative covenants, in each case, subject to customary limitations, exceptions and exclusions. The Term Loan Agreement also contains certain customary events of default. The Term Loan Agreement requires the Company to maintain a specified secured leverage ratio, which will be tested quarterly and become more restrictive over the term of the ~~term~~ loan. Annually, in the third quarter of each fiscal year, the ratio declines by 25 basis points. The initial maximum secured leverage ratio is 4.00 to 1.00 and declines to 3.00 to 1.00 by July 31, 2021. The maximum leverage ratio for July 31, 2019 is 3.50 to 1.00.

The Company was in compliance with all financial covenants under the Term Loan as of ~~July~~January 31, ~~2019.~~2020.

The fair value of the Term Loan approximated book value at both ~~July~~January 31, ~~2019~~2020 and October 31, ~~2018.~~2019.

The Company’s products generally carry explicit warranties that extend from several months to several years, based on terms that are generally accepted in the marketplace. Selected components (such as engines, transmissions, tires, etc.) included in the Company’s end products may include warranties from original equipment manufacturers (“OEM”). These OEM warranties are passed on to the end customer of the Company’s products, and the customer deals directly with the applicable OEM for any issues encountered on those components.

	Nine Months Ended July 31,						Three Months Ended January 31,
	2019			2018			2020			2019
Balance at beginning of period	$	30.8		$	40.2		$	22.6		$	30.8
Warranty provisions		14.6			13.2			5.6			5.4
Settlements made		(22.4	)		(19.7	)		(7.6	)		(8.0	)
Warranties for current year acquisitions		—			1.4
Changes in liability of pre-existing warranties		0.1			(1.7	)
Balance at end of period	$	23.1		$	33.4		$	20.6		$	28.2

Accrued warranty is classified in the Company’s ~~consolidated balance sheets~~Condensed Unaudited Consolidated Balance Sheets as follows:

	July 31, 2019		October 31, 2018		January 31, 2020		October 31, 2019
Current liabilities	$	13.8	$	19.0	$	15.6	$	16.1
Other long-term liabilities		9.3		11.8		5.0		6.5
Total warranty liability	$	23.1	$	30.8	$	20.6	$	22.6

~~As discussed in the Company’s Annual Report on Form 10-K filed on December 19, 2018, on~~On March 20, 2018 the Company’s Board of Directors authorized up to $50.0 million of repurchases of the Company’s issued and outstanding common stock with an expiration date of March 19, 2020. On September 5, 2018 the Company’s Board of Directors authorized an additional $50.0 million of repurchases of the Company’s issued and outstanding common stock with an expiration date of September 4, 2020. The Company’s share repurchase program is executed from time to time through open market or through private transactions. Shares purchased under the share repurchase program are retired and returned to authorized and unissued status. During ~~the three months ended July 31, 2019,~~fiscal year 2018, the Company repurchased ~~222,122~~3,233,352 shares under this repurchase program at a total cost of ~~$3.0~~$53.3 million ~~and~~at an average price per share of ~~$13.53.~~$16.47. During ~~the nine months ended July 31,~~fiscal year 2019, the Company repurchased 717,597 shares under this repurchase program at a total cost of $8.3 million ~~and~~at an average price per share of $11.62. There were no repurchases under this program during the three months ended January 31, 2020 and January 31, 2019, respectively. As of ~~July~~January 31, ~~2019,~~2020, the Company had $38.3 million of authorization remaining under this program.

Basic earnings per common share (“EPS”) is computed by dividing net (loss) income by the weighted average number of common shares outstanding. Diluted EPS is computed by dividing net (loss) income by the weighted-average number of common shares outstanding assuming dilution. The difference between basic EPS and diluted EPS is the result of the dilutive effect of outstanding stock options, performance stock units and restricted stock units. The table below reconciles basic weighted-average common shares outstanding to diluted weighted-average shares outstanding for the three ~~and nine~~ months ended ~~July~~January 31, ~~2019~~2020 and ~~July~~January 31, ~~2018:~~2019:

	Three Months Ended July 31,				Nine Months Ended July 31,				Three Months Ended January 31,
	2019		2018		2019		2018		2020		2019
Basic weighted-average common shares outstanding		62,641,436		63,993,398		62,875,677		64,258,655		62,783,080		63,023,076
Dilutive stock options		273,717		854,163		—		1,571,864		—		—
Dilutive restricted stock units		509,452		—		—		2,163		—		—
Dilutive performance stock units		—		—		—		—		—		—
Diluted weighted-average common shares outstanding		63,424,605		64,847,561		62,875,677		65,832,682		62,783,080		63,023,076

The table below represents exclusions from the calculation of weighted-average shares outstanding assuming dilution due to the anti-dilutive effect of the common stock equivalents for the three ~~and nine~~ months ended ~~July~~January 31, ~~2019~~2020 and ~~July~~January 31, ~~2018:~~2019:

	Three Months Ended July 31,				Nine Months Ended July 31,				Three Months Ended January 31,
	2019		2018		2019		2018		2020		2019
Anti-dilutive stock options		48,951		40,951		988,551		97,085		779,600		988,551
Anti-dilutive restricted stock units		422,169		528,515		1,773,255		541,584		2,447,696		1,590,393
Anti-dilutive performance stock units		18,408		91,509		18,408		91,509		—		91,509
Anti-dilutive common stock equivalents		489,528		660,975		2,780,214		730,178		3,227,296		2,670,453

For interim financial reporting, the Company estimates its annual effective tax rate based on the projected income for its entire fiscal year and records a provision (benefit) for income taxes on a quarterly basis based on the estimated annual effective income tax rate, adjusted for any discrete tax items.

The Company recorded income tax expense of $1.9 million for the three months ended July 31, 2019, or 25.7% of pre-tax income, compared to income tax expense of $3.8 million, or 17.2% of pre-tax income, for the three months ended July 31, 2018. Results for the three months ended July 31, 2019 were unfavorably impacted by $0.1 million of net discrete expense primarily related to a federal provision-to-return adjustment. Results for the three months ended July 31, 2018 were favorably impacted by $2.1 million of net discrete tax benefits, primarily related to the remeasurement of net deferred tax liabilities as a result of new tax legislation in the United States.

The Company recorded income tax ~~expense~~benefit of ~~less than $0.1~~$2.6 million for the ~~nine~~three months ended ~~July~~January 31, ~~2019,~~2020, or ~~(0.2)%~~22.0% of pre-tax loss, compared to ~~income tax benefit of $7.2~~$4.4 million, or ~~(25.8)%~~23.3% of pre-tax ~~income,~~loss, for the ~~nine~~three months ended ~~July~~January 31, ~~2018.~~2019. Results for the ~~nine~~three months ended ~~July~~January 31, 2020 were unfavorably impacted by $0.2 million of net discrete tax expenses primarily related to stock-based compensation tax deductions. Results for the three months ended January 31, 2019 were unfavorably impacted by ~~$0.8 million of net discrete expense primarily related to share-based compensation tax deductions. Results for the nine months ended July 31, 2018 were favorably impacted by $14.7~~$0.3 million of net discrete tax ~~benefits, including a $1.1 million benefit~~expenses related to ~~a federal provision-to-return adjustment and a $12.5 million benefit related to the remeasurement of net deferred~~stock-based compensation tax ~~liabilities as a result of new tax legislation in the United States.~~

On December 22, 2017, the Tax Reform Act was signed into law by President Trump. The Tax Reform Act significantly revised the U.S. corporate income tax regime by, among other things, lowering the U.S. corporate tax rate from 35% to 21% effective January 1, 2018, while also repealing the deduction for domestic production activities, limiting interest expense deductions, implementing a territorial tax system, imposing a repatriation tax on deemed repatriated earnings of foreign subsidiaries (the “Transition Tax”), and creating new taxes on certain foreign-sourced earnings. U.S. GAAP requires that the impact of tax legislation be recognized in the period in which the law was enacted. The U.S. Securities and Exchange Commission issued Staff Accounting Bulletin (SAB) No. 118, which provided guidance on how to account for the effects of the Tax Reform Act under ASC 740, Income Taxes. SAB No. 118 enabled companies to record a provisional amount for the effects for the Tax Reform Act based on a reasonable estimate, subject to adjustment during a measurement period of up to one year.

In the first quarter of fiscal year 2019, the Company completed its accounting for the Tax Reform Act under SAB No. 118 resulting in no change to the estimated cumulative tax benefit recorded in fiscal year 2018. In full fiscal year 2018, the Company recorded $11.3 million of cumulative tax benefit related to remeasurement of net deferred tax liabilities.deductions.

The Company periodically evaluates its valuation allowance requirements in light of changing facts and circumstances and may adjust its deferred tax asset valuation allowances accordingly. It is reasonably possible that the Company will either add to or reverse a portion of its existing deferred tax asset valuation allowances in the future. Such changes in the deferred tax asset valuation allowances will be reflected in the current operations through the Company’s effective income tax rate. During the three ~~and nine~~ months ended ~~July~~January 31, ~~2019,~~2020, there were no changes to the Company’s valuation allowances.

The Company’s liability for unrecognized tax benefits, including interest and penalties, was ~~$2.5~~$2.7 million as of ~~July~~January 31, ~~2019~~2020 and ~~$2.2~~$2.6 million as of October 31, ~~2018.~~2019. The unrecognized tax benefits are presented in other long-term liabilities in the Company’s Condensed Unaudited Consolidated Balance ~~Sheets.~~Sheets for the period ended January 31, 2020. During the next twelve months, it is reasonably possible that ~~$0.2~~$0.3 million of the unrecognized tax benefits, if recognized, would affect the annual effective income tax rate. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes in its ~~consolidated statement~~Condensed Unaudited Consolidated Statement of ~~operations.~~Operations.

The Company regularly assesses the likelihood of an adverse outcome resulting from examinations to determine the adequacy of its tax reserves. As of ~~July~~January 31, ~~2019,~~2020, the Company believes that it is more likely than not that the tax positions it has taken will be sustained upon the resolution of its audits resulting in no material impact on its consolidated financial position and the results of operations and cash flows. However, the final determination with respect to any tax audits, and any related litigation, could be materially different from the Company’s estimates and/or from its historical income tax provisions and income tax liabilities and could

have a material effect on operating results and/or cash flows in the periods for which that determination is made. In addition, future period earnings may be adversely impacted by litigation costs, settlements, penalties, and/or interest assessments related to income tax examinations.

Personal Injury Actions and Other: Product and general liability claims arise against the Company from time to time in the ordinary course of business. These claims are generally covered by third-party insurance. There is inherent uncertainty as to the eventual resolution of unsettled claims. Management, however, believes that any losses will not have a material adverse effect on the Company’s consolidated financial condition, results of operations or cash flows.

Market Risks: The Company is contingently liable under bid, performance and specialty bonds and has open standby letters of credit issued by the Company’s banks in favor of third parties as follows:

	July 31, 2019		October 31, 2018		January 31, 2020		October 31, 2019
Performance, bid and specialty bonds	$	204.5	$	228.2	$	257.1	$	229.9
Open standby letters of credit		15.1		13.0		11.4		14.3
Total	$	219.6	$	241.2	$	268.5	$	244.2

Chassis Contingent Liabilities: The Company obtains certain vehicle chassis from automobile manufacturers under converter pool agreements. These agreements generally provide that the manufacturer will supply chassis at the Company’s various production facilities under the terms and conditions set forth in the agreement. The manufacturer does not transfer the certificate of origin to the Company and, accordingly, the chassis are treated as consigned inventory of the automobile manufacturer. Upon being put into production, the Company becomes obligated to pay the manufacturer for the chassis. Chassis are typically converted and delivered to customers within 90 to 120 days of receipt. If the chassis are not converted within this timeframe of delivery, the Company generally purchases the chassis and records inventory, or the Company is obligated to begin paying an interest charge on this inventory until purchased. Such agreements are customary in the industries in which the Company operates and the Company’s exposure to loss under such agreements is limited by the value of the vehicles that would be repossessed and resold to mitigate any losses. The Company’s contingent liability under such agreements was ~~$53.3~~$38.8 million and ~~$54.5~~$48.6 million as of ~~July~~January 31, ~~2019~~2020 and October 31, ~~2018,~~2019, respectively.

Repurchase Commitments: The Company has entered into repurchase agreements with certain lending institutions. The repurchase commitments are on an individual unit basis with a term from the date it is financed by the lending institution through payment date by the dealer or other customer, generally not exceeding two years. The Company’s outstanding obligations under such agreements were ~~$243.6~~$209.3 million and ~~$310.5~~$212.5 million as of ~~July~~January 31, ~~2019~~2020, and October 31, ~~2018,~~2019, respectively. This value represents the gross value of all vehicles under repurchase agreements and does not take into consideration proceeds that would be received upon resale of repossessed vehicles, which would be used to reduce the Company’s ultimate net liability. Such agreements are customary in the industries in which the Company operates and the Company’s exposure to loss under such agreements is limited by the potential loss on the resale value of the inventory which is required to be repurchased. Losses incurred under such arrangements have not been significant and the Company expects this pattern to continue. The reserve for losses included in other liabilities on contracts outstanding at ~~July~~January 31, ~~2019~~2020 and October 31, ~~2018~~2019 is immaterial.

Guarantee Arrangements: The Company is party to multiple agreements whereby it guarantees indebtedness of others, including losses under loss pool agreements. The Company estimated that its maximum loss exposure under these contracts was ~~$26.8~~$24.7 million and ~~$25.2~~$25.5 million at ~~July~~January 31, ~~2019~~2020 and October 31, ~~2018,~~2019, respectively. Under the terms of these and various related agreements and upon the occurrence of certain events, the Company generally has the ability to, among other things, take possession of the underlying collateral. If the financial condition of the customers and dealers were to deteriorate and result in their inability to make payments, then additional accruals may be required. While the Company does not expect to experience losses under these agreements that are materially in excess of the amounts reserved, it cannot provide any assurance that the financial condition of the third parties will not deteriorate resulting in the third party’s inability to meet their obligations.

In the event that third parties are unable to meet obligations under these agreements, the Company cannot guarantee that the collateral underlying the agreements will be available or sufficient to avoid losses materially in excess of the amounts reserved. Any losses under these guarantees would generally be mitigated by the value of any underlying collateral, including financed equipment, and are generally subject to the finance company’s ability to provide the Company clear title to foreclosed equipment and other conditions. During periods of economic weakness, collateral values generally decline and can contribute to higher exposure to losses.

Other Matters: The Company is, from time to time, party to various legal proceedings arising out of ordinary course of business. The amount of alleged liability, if any, from these proceedings cannot be determined with certainty; however, the Company believes that its ultimate liability, if any, arising from pending legal proceedings, as well as from asserted legal claims and known potential legal claims, which are probable of assertion, taking into account established accruals for estimated liabilities, should not be material to the business, financial condition or results of operations.

A consolidated federal putative securities class action and a consolidated state putative securities class action are pending against the Company and certain of its officers and ~~directors, each~~directors. These actions collectively purport to assert claims on behalf of a putative ~~class~~classes of purchasers of the Company’s common stock in or traceable to its January 2017 ~~IPO and of~~Initial Public Offering (“IPO”), purchasers in its secondary offering of common stock in October 2017, ~~as well as, for the federal action,~~and purchasers from October 10, 2017 through June 7, 2018. The ~~actions~~state action also ~~name~~names certain of the underwriters for the Company’s IPO or secondary offering as defendants. The federal and state courts each consolidated multiple separate actions pending before them, the first of which was filed on June 8, 2018. The actions ~~allege~~have alleged certain violations of the Securities Act of 1933 and, for the federal action, the Securities Exchange Act of 1934.

Collectively, the actions seek certification of the putative classes asserted and compensatory damages and attorneys’ fees and costs. The underwriter defendants have notified the Company of their intent to seek indemnification from the Company pursuant to the IPO underwriting agreement regarding the claims asserted with respect to the IPO, and the Company expects the underwriters to do the same in regard to the claims asserted with respect to the October 2017 offering. Two purported derivative actions, which have since been consolidated, were also filed in federal court in Delaware in 2019 against the Company’s directors (with the Company as a nominal defendant), premised on allegations similar to those asserted in the consolidated federal securities litigation. The Company and the other defendants intend to defend these lawsuits vigorously. Additional lawsuits may be filed and, at this time, the Company is unable to predict the outcome of the lawsuits, the possible loss or range of loss, if any, associated with the resolution of the lawsuits, or any potential effect that it may have on the Company or its operations.

The Company is organized into three reportable segments based on management’s process for making operating decisions, allocating capital and measuring performance, and based on the similarity of products, customers served, common use of facilities, and economic characteristics. The Company’s segments are as follows:

Fire & Emergency: This segment includes KME, E-One, Ferrara, American Emergency Vehicles, Leader Emergency Vehicles, Horton Emergency Vehicles, REV Ambulance Orlando and REV Brazil. These business units manufacture and market commercial and custom fire and emergency vehicles primarily for fire departments, airports, other governmental units, contractors, hospitals and other care providers in the United States and other countries.

Commercial: This segment includes Collins Bus, Champion Bus, ENC, ElDorado National (Kansas), Capacity ~~Lay-Mor~~ and ~~REV Coach.~~Lay-Mor. Collins Bus manufactures, markets and distributes school buses, normally referred to as Type A school buses, as well as shuttle buses used for churches, transit authorities, hotels and resorts, retirement centers and other similar uses. Champion Bus, ENC and ElDorado National (Kansas) manufacture, market and distribute shuttle buses, transit buses, airport car rental and hotel/motel shuttles, tour and charter operations and other uses under several well-established brand names. Capacity manufactures, markets and distributes trucks used in terminal type operations, i.e., rail yards, warehouses, rail terminals and shipping terminals/ports. Lay-Mor manufactures, markets and distributes industrial sweepers for both the commercial and rental markets.

Recreation: This segment includes REV Recreation Group (“RRG”), Goldshield Fiberglass, Inc. (“Goldshield”), Renegade, Midwest and Lance, and their respective manufacturing facilities, service and parts divisions. RRG primarily manufactures, markets and distributes Class A mobile RVs in both gas and diesel models. Renegade primarily manufacturers, markets and distributes Class C and “Super C” ~~RVs and heavy-duty special application trailers.~~RVs. Goldshield manufactures, markets and distributes fiberglass reinforced molded parts to a diverse cross section of original equipment manufacturers and other commercial and industrial customers, including various components for RRG, which is one of Goldshield’s primary customers. Midwest manufactures, markets and distributes Class B RVs and luxury vans. Lance ~~designs, engineers~~manufactures, markets and ~~manufactures~~distributes truck campers, towable campers and toy haulers.

For purposes of measuring financial performance of its business segments, the Company does not allocate to individual business segments costs or items that are of a corporate nature. The caption “Corporate, Other & Elims” includes corporate office expenses, results of insignificant operations, intersegment eliminations and income and expense not allocated to reportable segments.

Total assets of the business segments exclude general corporate assets, which principally consist of cash and cash equivalents, certain property, plant and equipment and certain other assets pertaining to corporate and other centralized activities.

Intersegment sales generally include amounts invoiced by a segment for work performed for another segment. Amounts are based on actual work performed and agreed-upon pricing which is intended to be reflective of the contribution made by the supplying business segment. All intersegment transactions have been eliminated in consolidation.

	Three Months Ended July 31, 2019											Three Months Ended January 31, 2020
	Fire & Emergency		Commercial		Recreation		Corporate, Other & Elims			Consolidated		Fire & Emergency		Commercial		Recreation		Corporate, Other & Elims			Consolidated
Net sales	$	247.7	$	203.8	$	166.7	$	(1.2	)	$	617.0	$	206.5	$	158.2	$	166.8	$	0.6		$	532.1
Depreciation and amortization	$	3.6	$	2.0	$	3.6	$	1.7		$	10.9	$	3.5	$	1.9	$	3.5	$	1.9		$	10.8
Capital expenditures	$	2.1	$	1.4	$	0.6	$	0.6		$	4.7	$	1.7	$	0.6	$	0.8	$	0.1		$	3.2
Total assets	$	622.8	$	328.5	$	336.6	$	118.2		$	1,406.1	$	632.0	$	272.8	$	330.3	$	170.9		$	1,406.0
Adjusted EBITDA	$	12.1	$	19.4	$	12.8	$	(10.8	)			$	1.7	$	10.8	$	7.0	$	(8.2	)

	Nine Months Ended July 31, 2018											Three Months Ended January 31, 2019
	Fire & Emergency		Commercial		Recreation		Corporate, Other & Elims			Consolidated		Fire & Emergency		Commercial		Recreation		Corporate, Other & Elims			Consolidated
Net sales	$	706.1	$	447.9	$	563.4	$	4.0		$	1,721.4	$	204.1	$	140.7	$	176.3	$	(2.4	)	$	518.7
Depreciation and amortization	$	11.8	$	7.5	$	9.5	$	5.1		$	33.9	$	3.5	$	2.6	$	4.0	$	2.3		$	12.4
Capital expenditures	$	4.8	$	3.4	$	6.3	$	17.4		$	31.9	$	1.4	$	0.6	$	1.4	$	2.9		$	6.3
Total assets	$	607.4	$	299.2	$	359.9	$	136.6		$	1,403.1	$	614.2	$	291.7	$	352.7	$	116.0		$	1,374.6
Adjusted EBITDA	$	65.5	$	25.7	$	38.7	$	(25.6	)			$	8.4	$	5.0	$	9.1	$	(10.2	)

In considering the financial performance of the business, the chief operating decision maker analyzes the primary financial performance measure of Adjusted EBITDA. Adjusted EBITDA is defined as net income for the relevant period before depreciation and amortization, interest expense and benefit for income taxes, as adjusted for items management believes are not indicative of the Company’s ongoing operating performance. Adjusted EBITDA is not a measure defined by U.S. GAAP but is computed using amounts that are determined in accordance with U.S. GAAP. A reconciliation of this performance measure to net income (loss) is included below.

The Company believes Adjusted EBITDA is useful to investors and used by management for measuring profitability because the measure excludes the impact of certain items which management believes have less bearing on the Company’s core operating performance, and allows for a more meaningful comparison of operating fundamentals between companies within its industries by eliminating the impact of capital structure and taxation differences between the companies. Additionally, Adjusted EBITDA is used by management to measure and report the Company’s financial performance to the Company’s Board of Directors, assists in providing a meaningful analysis of the Company’s operating performance and is used as a measurement in incentive compensation for management.

Provided below is a reconciliation of segment Adjusted EBITDA to net ~~income (loss):~~

	Three Months Ended July 31,						Nine Months Ended July 31,						Three Months Ended January 31,
	2019			2018			2019			2018			2020			2019
Fire & Emergency Adjusted EBITDA	$	12.1		$	25.3		$	35.8		$	65.5		$	1.7		$	8.4
Commercial Adjusted EBITDA		19.4			11.8			39.7			25.7			10.8			5.0
Recreation Adjusted EBITDA		12.8			17.9			39.4			38.7			7.0			9.1
Corporate and Other Adjusted EBITDA		(10.8	)		(7.4	)		(32.2	)		(25.6	)		(8.2	)		(10.2	)
Depreciation and amortization		(10.9	)		(11.7	)		(34.8	)		(33.9	)		(10.8	)		(12.2	)
Interest expense, net		(8.4	)		(6.8	)		(24.2	)		(18.3	)		(7.3	)		(7.8	)
(Provision) benefit for income taxes		(1.9	)		(3.8	)		—			7.2
Benefit for income taxes														2.6			4.4
Transaction expenses		(0.5	)		—			(0.7	)		(2.1	)		(1.1	)		(0.2	)
Sponsor expense reimbursement		—			(0.2	)		(0.6	)		(0.5	)		(0.1	)		(0.5	)
Restructuring costs		(1.3	)		(0.9	)		(4.2	)		(6.9	)		(0.6	)		(1.1	)
Stock-based compensation expense		(2.5	)		(1.4	)		(7.3	)		(5.1	)		(2.6	)		(1.4	)
Non-cash purchase accounting expense		—			(0.5	)		—			(1.2	)
Legal matters		(0.8	)		(1.1	)		(5.3	)		(2.8	)		(0.1	)		(2.1	)
Impairment charges		—			—			(2.8	)		—			—			(2.7	)
Losses attributable to assets held for sale		(1.0	)		—			(3.3	)		—			(0.6	)		(1.7	)
Deferred purchase price payment		(0.6	)		(1.9	)		(2.8	)		(4.1	)		(0.1	)		(1.6	)
First year public company costs		—			(1.0	)		—			(1.5	)
Net income (loss)	$	5.6		$	18.3		$	(3.3	)	$	35.1
Net loss													$	(9.4	)	$	(14.6	)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

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 ~~19, 2018.~~18, 2019.

REV is a leading designer, manufacturer and distributor of specialty vehicles and related aftermarket parts and services. We provide customized vehicle solutions for applications including: essential needs (ambulances, fire apparatus, school buses and municipal transit buses), industrial and commercial (terminal trucks, cut-away buses and ~~street~~ sweepers) and consumer leisure (recreational vehicles, ~~“RVs”~~referred to as “RVs,” and luxury ~~buses)~~coaches). Our ~~brand~~diverse portfolio ~~consists~~is made up of 29 well-established principal vehicle brands including many of the most recognizable names within ~~our served markets.~~their industry. Several of our brands pioneered their specialty vehicle product categories and date back more than 50 years. We believe that in most of our markets, we hold the first or second market share position and approximately ~~64%~~57% of our net sales during the ~~third~~first quarter of fiscal year ~~2019~~2020 came from products where we believe we hold such share positions.

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

Fire & Emergency – ~~The~~Our Fire & Emergency segment sells fire apparatus equipment under the Emergency One (E-ONE), Kovatch Mobile Equipment (KME) and Ferrara brands and ambulances under the American Emergency Vehicles (AEV), Horton Emergency Vehicles (HEV), Leader Emergency Vehicles (LEV), Marque, McCoy Miller, Road Rescue, Wheeled Coach and Frontline 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 typically favored for non-emergency patient transportation), 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 small tank to extinguish fires), ladder trucks (fire apparatus with stainless steel or aluminum ladders), tanker trucks and rescue 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 Fire & Emergency product line. On February 1, 2020, the Company acquired Spartan Emergency Response (“Spartan ER”), a leading designer, manufacturer and distributor of custom emergency response vehicles, cabs and chassis for the emergency response market.

Commercial – Our Commercial segment serves the bus market through the following principal brands: Collins Bus, Goshen Coach, ENC, ElDorado National, Federal Coach, Champion and World Trans. ~~In addition, we have a joint venture partnership with Daimler to distribute and service Setra branded motor coaches to customers in the United States.~~ We serve the terminal truck market through the Capacity brand and the sweeper market through the Lay-Mor brand. We are a leading producer of small- and medium-sized buses, Type A school buses, transit buses, terminal trucks and street sweepers in the United States. Our products in the Commercial segment include cut-away buses (customized body built on various types and sizes of commercial chassis), transit buses (large municipal buses where we build our own chassis and body), luxury buses (bus-style limo or high-end luxury conversions), Type A school buses (small school bus built on commercial chassis), street sweepers (three- and four-wheel versions used in road construction activities), and terminal trucks (specialized vehicles which move freight in warehouses or intermodal yards and ports). Within each market segment, we produce many customized configurations to address the diverse needs of our customers.

Recreation – Our Recreation segment serves the RV market through seven principal brands: American Coach, Fleetwood RV, Monaco Coach, 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~~line-makes such as: American Eagle, Bounder, Pace Arrow, 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 on a van chassis), 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.

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, the Company is susceptible to supply chain disruptions resulting from the impact of tariffs and global macro-economic factors, which can have a dramatic effect, either directly or indirectly, on the availability, lead-times and costs associated with raw materials and parts.

RV purchases are discretionary in nature and therefore sensitive to the 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 Fire & Emergency 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, transit buses and shuttle 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.

In a typical year, our operating results are impacted by seasonality. Historically, the slowest quarters have been the first and second fiscal quarters when the purchasing seasons 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, and the fact that the school year is underway with municipalities and school bus contractors utilizing their existing fleets to transport student populations. Sales of our products have typically been higher in the 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.

~~For the past several years,~~We actively evaluate opportunities to improve and expand our business through targeted acquisitions that are consistent with our strategy. On occasion, 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 ~~the addition~~through acquisitions of ~~businesses through acquisitions.~~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. ~~Operational and financial integration of our recently acquired businesses could be ongoing.~~

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.

Three Months Ended January 31, 2020 Compared with Three Months Ended January 31, 2019

	Three Months Ended July 31,				Nine Months Ended July 31,					Three Months Ended January 31,
($ in millions)	2019		2018		2019			2018		2020			2019
Net sales	$	617.0	$	597.7	$	1,750.8		$	1,721.4	$	532.1		$	518.7
Gross profit		71.3		79.5		190.1			204.8		47.4			46.3
Operating income		15.9		28.9		20.9			46.2
Net income (loss)		5.6		18.3		(3.3	)		35.1
Operating loss											(4.7	)		(11.2	)
Net loss											(9.4	)		(14.6	)

Adjusted EBITDA	$	33.5	$	47.6	$	82.7		$	104.3	$	11.3		$	12.3
Adjusted Net Income	$	13.6	$	24.7	$	26.6		$	51.0
Adjusted Net Loss										$	(2.7	)	$	(2.9	)

Net Sales. Consolidated net sales were ~~$617.0~~$532.1 million for the three months ended ~~July~~January 31, ~~2019,~~2020, an increase of ~~$19.3~~$13.4 million, or ~~3.2%~~2.6%, from ~~$597.7~~$518.7 million for the three months ended ~~July~~January 31, ~~2018.~~2019. The increase in consolidated net sales was primarily due to an increase in net sales of $2.4 million and $17.5 million in the ~~Commercial and~~ Fire & Emergency and Commercial segments, ~~partially~~respectively, offset by a decrease in net sales of $9.5 million in the Recreation segment.

Gross Profit. Consolidated gross profit was $47.4 million for the three months ended January 31, 2020, compared to $46.3 million for the three months ended January 31, 2019. The increase ~~in Commercial net sales compared to the prior year period was~~is primarily due to a broad-based increase in most of the segment’s product categories. Sales of school, transit and shuttle buses as well as terminal trucks were all higher in the third quarter of fiscal year 2019 compared to the third quarter of fiscal year 2018. Growth drivers are attributable to new models and end market strength in the Class A school bus product line and the delivery against our larger municipal transit bus orders. The increase in Fire & Emergency net sales compared to the prior year period was primarily due to the impact of unit mix and slightly higher shipments of fire trucks and ambulances in the quarter. The decrease in Recreation net sales compared to the prior year period was primarily due to decreases in sales of Class A motorhomes as well as truck campers, partially offset by the benefit of delivering on existing backlogs in our other RV categories.

Consolidated net sales were $1,750.8 million for the nine months ended July 31, 2019, an increase of $29.4 million, or 1.7%, from $1,721.4 million for the nine months ended July 31, 2018. The increase in consolidated net sales was primarily due to an increase in net sales inprofitability within the Commercial segment, partially offset by a decrease in ~~net sales~~profitability in the Fire & Emergency and Recreation segments. The increase in Commercial segment sales was primarily due to an increase in volume and improved mix of school buses, transit buses and terminal trucks, partially offset by lower volume of shuttle buses and the impact of the sale of our mobility van business. The decrease in Fire & Emergency segment net sales was primarily due to a decrease in the volume of fire truck and ambulance shipments, partially offset by improved pricing of fire trucks and ambulances and improved mix. The decrease in Recreation segment net sales was primarily due to a decrease in the pricing and volume of Class A motorhome shipments, partially offset by an increase in camper sales resulting from the acquisition of Lance in January 2018 and increases in our other RV categories.

~~Gross Profit. Consolidated gross profit was $71.3 million for the three months ended July 31, 2019, compared to $79.5 million for the three months ended July 31, 2018.~~segment. Consolidated gross profit, as a percentage of consolidated net sales, was ~~11.6%~~8.9% for the three months ended ~~July~~January 31, ~~2019, a decrease compared to 13.3%~~2020 and January 31, 2019.

Operating Loss. Consolidated operating loss was $4.7 million for the three months ended ~~July~~January 31, ~~2018.~~ 2020, a decrease of $6.5 million, from consolidated operating loss of $11.2 million for the three months ended January 31, 2019. The decrease was primarily due to ~~a decrease in gross profit in the Fire & Emergency~~reduced selling, general and ~~Recreation segments, partially offset by an increase in the Commercial segment. The decrease in Fire & Emergency was driven by inefficiencies~~administrative expenses, primarily related to increasing capacity and the ramp up in production of fire trucks as well as lingering inefficiencies related to one ambulance plant. The decrease in Recreation was driven by a decrease in volume of Class A motorhomes and higher discounts required by dealers. The increase in Commercial was primarily ~~due to increased volumes of higher margin transit and school bus shipments and operational improvements across the segment resulting from the implementation of REV Production System (RPS)~~.

Consolidated gross profit was $190.1 million for the nine months ended July 31, 2019, compared to $204.8 million for the nine months ended July 31, 2018. Consolidated gross profit, as a percentage of consolidated ~~net sales, was 10.9% for the nine months ended July 31, 2019, a decrease compared to 11.9% for the nine months ended July 31, 2018. The decrease was primarily due~~ to a decrease in ~~gross profit~~expenses related to legal matters, and an impairment charge in fiscal year 2019 that did not repeat in the Fire & Emergency segment, partially offset by increases in the Commercial and Recreation segments. The decrease in the Fire & Emergency segment was driven by inefficiencies related to increasing capacity and the ramp up in production of fire trucks as well as lingering inefficiencies related to one ambulance plant. ~~The increase in Recreation was primarily due to the impact of the acquisition of Lance in January 2018, as well as higher volumes in the more profitable Class B and Super C product categories.~~ The increase in Commercial was primarily due to increased volumes of higher margin transit bus, school bus and terminal truck shipments and operational improvements resulting from the implementation of RPS throughout the segment.current fiscal year period.

~~Operating Income~~. Consolidated operating income was $15.9 million for the three months ended July 31, 2019, a decrease of $13.0 million, from consolidated operating income of $28.9 million for the three months ended July 31, 2018. Consolidated operating income was $20.9 million for the nine months ended July 31, 2019, a decrease of $25.3 million, from consolidated operating income of $46.2 million for the nine months ended July 31, 2018. ~~The decreases in the three- and nine-month periods were primarily due to the decreases in gross profit described above, along with higher legal and stock compensation expenses.~~

Income Taxes. Consolidated income tax ~~expense~~benefit was ~~$1.9~~$2.6 million for the three months ended ~~July~~January 31, ~~2019,~~2020, or ~~25.7%~~22.0% of pre-tax ~~income,~~loss, compared to ~~income tax expense of $3.8~~$4.4 million, or ~~17.2%~~23.3% of pre-tax ~~income,~~loss, for the three months ended ~~July~~January 31, ~~2018. Results~~2019. Income tax benefit for the three months ended ~~July~~January 31, ~~2019 were~~2020, was unfavorably impacted by ~~$0.1~~$0.2 million of net discrete ~~expense~~tax expenses primarily related to ~~a federal provision-to-return adjustment. Results~~the impact of stock-based compensation. Income tax benefit for the three months ended ~~July~~January 31, ~~2018 were favorably~~2019 was also unfavorably impacted by ~~$2.1~~$0.3 million of net discrete tax ~~benefits, primarily~~expenses related to ~~the remeasurement of net deferred tax liabilities as a result of new tax legislation in the United States~~.stock-based compensation.

Consolidated income tax expense was less than $0.1 million for the nine months ended July 31, 2019, or (0.2)% of pre-tax loss, compared to income tax benefit of $7.2 million, or (25.8)% of pre-tax income, for the nine months ended July 31, 2018. Results for the nine months ended July 31, 2019 were unfavorably impacted by $0.8 million of net discrete expense primarily related to share-based compensation tax deductions. Results for the nine months ended July 31, 2018 were favorably impacted by $14.7 million of net discrete tax benefits, including a $1.1 million benefit related to federal provision-to-return adjustment and a $12.5 million benefit related to the remeasurement of net deferred tax liabilities as a result of new tax legislation in the United States.

Net ~~Income (Loss)~~Loss. Consolidated net ~~income~~loss was ~~$5.6~~$9.4 million for the three months ended ~~July~~January 31, ~~2019,~~2020, a decrease of ~~$12.7~~$5.2 million, or ~~69.4%~~35.6%, from consolidated net ~~income~~loss of ~~$18.3~~$14.6 million for the three months ended ~~July~~January 31, ~~2018.~~ ~~The decrease was~~ ~~primarily due to the decrease in operating income and higher interest expenses partially offset by lower income tax expense.~~

Consolidated net loss was $3.3 million for the nine months ended July 31, 2019, a decrease of $38.4 million, or 109.4%, from consolidated net income of $35.1 million for the nine months ended July 31, 2018. ~~The decrease was~~ ~~primarily due to the decrease in operating income, higher expenses for interest, impairment charges and taxes.~~2019.

Adjusted EBITDA. Consolidated Adjusted EBITDA was ~~$33.5~~$11.3 million for the three months ended ~~July~~January 31, ~~2019,~~2020, a decrease of ~~$14.1~~$1.0 million, or ~~29.6%~~8.1% from ~~$47.6~~$12.3 million for the three months ended ~~July~~January 31, 2018. The decrease in consolidated Adjusted EBITDA was primarily due to a decrease in Adjusted EBITDA in the Fire & Emergency and Recreation segments, partially offset by an increase in the Commercial segment Adjusted EBITDA.

Consolidated Adjusted EBITDA was $82.7 million for the nine months ended July 31, 2019, a decrease of $21.6 million, or 20.7% from $104.3 million for the nine months ended July 31, 2018. The decrease in consolidated Adjusted EBITDA was primarily due to a decrease in the Fire & Emergency segment Adjusted EBITDA, partially offset by increases in Adjusted EBITDA in the Commercial and Recreation segments.2019.

Refer to Adjusted EBITDA and Adjusted Net ~~Income~~Loss 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 Income (Loss) to Adjusted EBITDA tables and related footnotes.

Adjusted Net ~~Income~~Loss. Consolidated Adjusted Net ~~Income~~Loss was ~~$13.6~~$2.7 million for the three months ended ~~July~~January 31, ~~2019,~~2020, a decrease of ~~$11.1~~$0.2 million, or ~~44.9%~~6.9% from consolidated Adjusted Net ~~Income~~Loss of ~~$24.7~~$2.9 million for the three months ended ~~July~~January 31, ~~2018.~~2019.

Consolidated Adjusted Net Income was $26.6 million for the nine months ended July 31, 2019, a decrease of $24.4 million, or 47.8% from consolidated Adjusted Net Income of $51.0 million for the nine months ended July 31, 2018.

	Three Months Ended July 31,						Nine Months Ended July 31,						Three Months Ended January 31,
($ in millions)	2019			2018			2019			2018			2020			2019
Net sales	$	247.7		$	238.9		$	699.0		$	706.1		$	206.5		$	204.1
Adjusted EBITDA		12.1			25.3			35.8			65.5			1.7			8.4
Adjusted EBITDA % of net sales		4.9	%		10.6	%		5.1	%		9.3	%		0.8	%		4.1	%

Fire & Emergency segment net sales were ~~$247.7~~$206.5 million for the three months ended ~~July~~January 31, ~~2019,~~2020, an increase of ~~$8.8~~$2.4 million, or ~~3.7%~~1.2%, from ~~$238.9~~$204.1 million for the three months ended ~~July~~January 31, ~~2018.~~2019. The increase in net sales compared to the prior year period was primarily due to the benefit of new chassis and cab lines at a primary fire plant which helped to increase production and sales of fire units, and the impact of higher pricing on select fire trucks and ambulance brands, partially offset by the impact of unit mix and ~~slightly higher shipments~~timing of ~~fire trucks and ambulances in the quarter.~~deliveries.

Fire & Emergency segment Adjusted EBITDA was $1.7 million for the three months ended January 31, 2020, a decrease of $6.7 million, or 79.8%, from $8.4 million for the three months ended January 31, 2019. The decrease in Adjusted EBITDA compared to prior year period was primarily due to an expected reduction in gross profit margin resulting from the ongoing efforts to increase production capacity at our largest fire plant and the impact of unit mix, partially offset by improvements in labor efficiency in our largest ambulance plant.

Commercial segment net sales were ~~$699.0~~$158.2 million for the ~~nine~~three months ended ~~July~~January 31, ~~2019,~~2020, an increase of $17.5 million, or 12.4%, from $140.7 million for the three months ended January 31, 2019. The increase in net sales compared to the prior year period was due primarily to an increase in transit bus sales, partially offset by lower sales of terminal trucks.

Commercial segment Adjusted EBITDA was $10.8 million for the three months ended January 31, 2020, an increase of $5.8 million, or 116.0%, from $5.0 million for the three months ended January 31, 2019. The increase in Adjusted EBITDA compared to the prior year period was primarily due to favorable product mix as a result of higher volumes of transit bus units sold, improved pricing of buses and continued improvements in operational efficiencies across the segment.

Recreation segment net sales were $166.8 million for the three months ended January 31, 2020, a decrease of ~~$7.1~~$9.5 million, or ~~1.0%~~5.4%, from ~~$706.1~~$176.3 million for the ~~nine~~three months ended ~~July~~January 31, ~~2018.~~2019. The decrease in net sales compared to the prior year period was primarily due to ~~a decrease in the volume of fire truck~~lower net sales attributable to our Class A motorhomes and ~~ambulance shipments,~~lower towable sales, partially offset by ~~improved pricing of fire trucks and ambulances and improved mix.~~higher Class B sales.

~~Fire & Emergency~~Recreation segment Adjusted EBITDA was ~~$12.1~~$7.0 million for the three months ended ~~July~~January 31, ~~2019,~~2020, a decrease of ~~$13.2~~$2.1 million, or ~~52.2%~~23.1%, from ~~$25.3~~$9.1 million for the three months ended ~~July~~January 31, 2018. Third quarter profitability in the Fire & Emergency segment was negatively impacted primarily by the results at one of its Fire business units and one of its Ambulance business units. Profitability at the largest Fire business unit was negatively impacted by additional labor costs associated with staffing and training for its production ramp. Profitability at the largest Ambulance business unit was lower than the prior year period due to the timing of incoming orders that affected its production flow and cost base in the quarter.

Fire & Emergency segment Adjusted EBITDA was $35.8 million for the nine months ended July 31, 2019, a decrease of $29.7 million, or 45.3%, from $65.5 million for the nine months ended July 31, 2018.2019. The decrease in Adjusted EBITDA compared to the prior year period was primarily due to a decrease in the volume of fire truck and ambulance shipments as well as higher costs associated with the increase in capacity and ramp up of production of fire trucks, and the effects of material and supply chain inefficiencies at one ambulance facility.

Commercial segment net sales were $203.8 million for the three months ended July 31, 2019, an increase of $46.2 million, or 29.3%, from $157.6 million for the three months ended July 31, 2018. The increase in net sales compared to the prior year period was primarilydecreased profitability due to ~~an increase in the volume of transit~~reduced production and ~~school bus shipments, and improved pricing on transit buses associated with our larger municipal transit bus orders. Net sales also increased for shuttle buses and terminal trucks.~~

Commercial segment net sales were $514.5 million for the nine months ended July 31, 2019, an increase of $66.6 million, or 14.9%, from $447.9 million for the nine months ended July 31, 2018. The increase in net sales compared to the prior year period was primarily due to an increase in volume of transit bus, school bus and terminal truck shipments, and improved pricing on transit buses associated with our larger municipal transit bus orders, partially offset by lower volume and pricing on shuttle buses and the impact of the sale of our mobility van business in the first quarter of fiscal year 2019. Refer to Note 6, Divestiture Activities, of the Notes to Condensed Unaudited Consolidated Financial Statements for further details.shipment volumes.

Commercial segment Adjusted EBITDA was $19.4 million for the three months ended July 31, 2019, an increase of $7.6 million, or 64.4%, from $11.8 million for the three months ended July 31, 2018. The increase in Adjusted EBITDA compared to the prior year period was primarily due to increased sales of higher margin school and transit buses, terminal trucks, and improved efficiencies from the implementation of REV Production System (RPS), which started in late fiscal year 2018.Backlog

Commercial segment Adjusted EBITDA was $39.7 million for the nine months ended July 31, 2019, an increase of $14.0 million, or 54.5%, from $25.7 million for the nine months ended July 31, 2018. The increase in Adjusted EBITDA compared to the prior year period was primarily due to increased volumes of higher margin transit bus, school bus and terminal truck shipments and operational improvements resulting from implementation of RPS throughout the segment.

Recreation segment net sales were $166.7 million for the three months ended July 31, 2019, a decrease of $30.6 million, or 15.5%, from $197.3 million for the three months ended July 31, 2018. The decrease in net sales compared to the prior year period was primarily due to decreases in sales of Class A motorhomes as well as truck campers, partially offset by the benefit of delivering on existing backlogs in our other RV categories.

Recreation segment net sales were $542.6 million for the nine months ended July 31, 2019, a decrease of $20.8 million, or 3.7%, from $563.4 million for the nine months ended July 31, 2018. The decrease in net sales compared to the prior year period was primarily due to a decrease in the pricing and shipment volume of Class A motorhomes, partially offset by an increase in camper sales resulting from the acquisition of Lance in January 2018 and increases in Class B and Super C shipments.

Recreation segment Adjusted EBITDA was $12.8 million for the three months ended July 31, 2019, a decrease of $5.1 million, or 28.5%, from $17.9 million for the three months ended July 31, 2018. The reduction in profitability was solely due to the lower shipment volumes in the Class A product category. Profit margins in the other RV categories within the Recreation segment continued to be solid in the quarter.

Recreation segment Adjusted EBITDA was $39.4 million for the nine months ended July 31, 2019, an increase of $0.7 million, or 1.8%, from $38.7 million for the nine months ended July 31, 2018. The increase in Adjusted EBITDA compared to the prior year period was primarily due to the impact of the acquisition of Lance in January 2018, as well as higher volumes in the more profitable Class B and Super C product categories, partially offset by the pricing and shipment volume of Class A motorhomes.

Backlog represents firm orders received from dealers or directly from end customers. Backlog does not include purchase options or verbal orders. The following table presents a summary of our backlog by segment:


($ in millions)	July 31, 2019		July 31, 2018		January 31, 2020		January 31, 2019
Fire & Emergency	$	775.7	$	606.5	$	807.3	$	738.2
Commercial		395.3		420.0		455.6		427.5
Recreation		129.7		249.5		158.3		225.2
Total Backlog	$	1,300.7	$	1,276.0	$	1,421.2	$	1,390.9

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

~~Our businesses take orders~~Orders from our dealers and end customers ~~that~~ are evidenced by a contract, firm purchase order or reserved production slot for delivery of one or many ~~vehicles with a given specification over a period of time.~~vehicles. These orders are ~~placed~~reported in our backlog ~~and reported~~ at the aggregate selling prices, net of discounts or ~~allowances, at the time the order is received.~~allowances.

As of ~~July~~January 31, ~~2019,~~2020, our backlog was ~~$1,300.7~~$1,421.2 million compared to ~~$1,276.0~~$1,390.9 million as of ~~July~~January 31, ~~2018.~~2019. The increase in Fire & Emergency backlog was ~~primarily due to an~~reflecting strong order inflow in both the Fire and Ambulance divisions over the trailing twelve months. The increase ~~in orders across the fire truck and ambulance brand categories. The decrease~~ in the Commercial backlog was due primarily to ~~decreases in school bus and terminal truck orders,~~a large municipal transit order, partially offset by ~~an increase~~a decrease in ~~shuttle bus orders.~~backlog for terminal trucks. The decrease in Recreation backlog was primarily due to ~~decreases~~a decrease in backlog for towable campers, offset by increases in backlog for Class A ~~motorhome~~ and Class B motorhomes. However, in the first quarter of fiscal year 2020, orders increased compared to the prior year period primarily due to increased demand for Class A and Class B motorhomes, partially offset by a decrease in orders for towable ~~orders, and is reflective of the softer market for recreational vehicles.~~campers.

Our primary requirements for liquidity and capital are working capital, ~~acquiring~~the acquisition of machinery and equipment, ~~acquiring~~the acquisition and ~~building~~construction of manufacturing facilities, the improvement and expansion of existing manufacturing facilities, debt service payments, regular quarterly dividend payments, general corporate needs, and common stock repurchases under the Company’s authorized stock buyback program. Historically, these cash requirements have been met through cash provided by operating activities, cash and cash equivalents and borrowings under our term loan and revolving credit facility.

We believe that our sources of liquidity and capital will be sufficient to finance our continued operations, growth strategy, cash dividends and additional expenses we expect to continue to incur as a public company. However, we cannot assure you that cash provided by operating activities and borrowings under the current revolving credit 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 revolving credit 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 ~~which~~ may ~~be at~~involve higher overall interest rates. We cannot assure you that we will be able to obtain refinancing or additional financing on favorable terms or at all.

The following table shows summary cash flows for the ~~nine~~three months ended ~~July~~January 31, ~~2019~~2020 and ~~July~~January 31, ~~2018:~~2019:

Net ~~cash provided by operating activities for the nine months ended July 31, 2019 was $22.0 million, compared to net~~ cash used in operating activities ~~of $56.8~~for the three months ended January 31, 2020 was $13.3 million, compared to $39.4 million for the ~~nine~~three months ended ~~July~~January 31, ~~2018.~~2019. The reduction in cash used in operating activities for the ~~nine~~three months ended ~~July~~January 31, ~~2019,~~2020, compared to the prior year period was related to ~~improved~~a lower net loss and continued improvements in net working capital ~~offset by a decrease in net income.~~usage.

Net cash ~~provided by~~used in investing activities for the ~~nine~~three months ended ~~July~~January 31, ~~2019~~2020 was ~~$5.5~~$1.3 million, compared to ~~net cash used in investing activities of $109.1~~$7.2 million for the ~~nine~~three months ended ~~July~~January 31, ~~2018.~~2019. The decrease in net cash used in investing activities for the ~~nine~~three months ended ~~July~~January 31, 2019, compared to the prior year period, was primarily due to a decrease in ~~business acquisition activity, a decrease in~~ capital expenditures and ~~the benefit~~an increase in proceeds from ~~the~~ sale of ~~certain assets.~~assets and sale of business.

Net cash used in financing activities for the nine months ended July 31, 2019 was $19.6 million, which primarily consisted of net borrowings to fund working capital requirements and to repay long-term debt, to repurchase the Company’s common stock and to pay regular quarterly dividends. Net cash provided by financing activities for the ~~nine~~three months ended ~~July~~January 31, ~~2018~~2020 was ~~$162.8 million, which~~$78.6 million. Net cash provided by financing activities for the three months ended January 31, 2019 was $48.2 million. Net cash provided by financing activities primarily consisted of net ~~borrowings to fund acquisitions, capital expenditures, to repurchase~~proceeds from our April 2017 ABL facility in advance of our purchase of the ~~Company’s common stock and to pay regular quarterly~~Spartan ER business effective February 1, 2020, net of payment of 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. We expect to pay this quarterly dividend on or about the last day of the first month following each fiscal quarter to shareholders of record on the last day of such fiscal quarter. 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. In the ~~nine~~three months ended ~~July~~January 31, ~~2019,~~2020, the Company paid cash dividends of ~~$9.4~~$3.1 million.

On ~~September~~March 4, ~~2019,~~2020, our board of directors declared a cash dividend of $0.05 per share on our common stock, payable in respect of the ~~third~~first quarter of fiscal year ~~2019.~~2020. The dividend is payable on ~~November~~May 29, ~~2019~~2020 to holders of record as of ~~October~~April 30, ~~2019.~~2020.

On March 20, 2018 the Company’s Board of Directors authorized up to $50.0 million of repurchases of the Company’s issued and outstanding common stock with an expiration date of March 19, 2020. The Company’s share repurchase program is executed from time to time through open market purchases or through private transactions. Shares purchased under the share repurchase program are retired and returned to authorized and unissued status. On September 5, 2018 the Company’s Board of Directors authorized an additional $50.0 million of repurchases of the Company’s issued and outstanding common stock with an expiration date of September 4, 2020. ~~During~~The Company’s share repurchase program is executed from time to time through open market or through private transactions. Shares purchased under the share repurchase program are retired and returned to authorized and unissued status. There were no repurchases under this program during the three months ended ~~July~~January 31, 2020 and January 31, 2019, the Company repurchased 222,122 shares under this repurchase program at a total cost of $3.0 million and an average price per share of $13.53. During the nine months ended July 31, 2019, the Company repurchased 717,597 shares under this repurchase program at a total cost of $8.3 million and an average price per share of $11.62.respectively. As of ~~July~~January 31, ~~2019,~~2020, the Company had $38.3 million of authorization remaining under this program.

On April 25, 2017, we entered into a $75.0 million term loan (“Term Loan” or “Term Loan Agreement”), as Borrower, certain subsidiaries of the Company, as Guarantor Subsidiaries. Principal may be prepaid at any time during the term of the Term Loan without penalty. The Company incurred $2.0 million in debt issuance costs related to the Term Loan. The Term Loan Agreement expires on April 25, 2022.

On July 18, 2018 the Company exercised aits $50.0 million incremental commitment option under the Term Loan Agreement, which increased total borrowing under the facility from $75.0 million to $125.0 million. The Company incurred an additional $0.6 million of debt issuance costs related to the incremental commitment option under the Term Loan. Proceeds from the increase in the Term Loan were used to repay a portion of the borrowings under the April 2017 ABL Facility.

On March 29, 2019, the Company exercised a $50.0 million incremental commitment option under the Term Loan Agreement, which increased total borrowing under the facility from $125.0 million to $175.0 million. The Company incurred an additional $0.8 million of debt issuance costs related to the incremental commitment option under the Term Loan. Proceeds from the incremental commitment were used to repay a portion of the outstanding borrowings under the April 2017 ABL Facility.

On October 18, 2019, the Company amended the term loan agreement to raise the maximum net leverage ratio to 4.00 to 1.00 from 3.50 to 1.00. The ratio will decline by 25 basis points in the third quarter of each fiscal year after the amendment date, reaching a final maximum leverage ratio of 3.50 to 1.00 on July 31, 2021. Additionally, the Company received a waiver related to the excess cash flow calculation payment for fiscal year 2019. The Company incurred $0.2 million of debt issuance costs related to the amendment raising the maximum leverage ratio and the waiver for the excess cash flow calculation payment under the Term Loan Agreement.

On January 31, 2020, the Company amended the term loan agreement, in contemplation of its pending acquisition of the Spartan ER, to raise the maximum net leverage ratio to 5.00 to 1.00 from 4.00 to 1.00. The ratio will decline by 25 basis points in the fourth quarter of fiscal year 2020, and each fiscal quarter ending thereafter, reaching a final maximum leverage ratio of 3.75 to 1.00 on October 31, 2021. The Company incurred $0.4 million of debt issuance costs related to this amendment.

The Company may voluntarily prepay principal, in whole or in part, at any time, without penalty. ~~The~~Commencing with fiscal year 2018 and payable in fiscal year 2019, the Company is obligated to prepay certain minimum amounts based on the Company’s excess cash flow, as defined in the Term Loan Agreement. ~~We are not required to make any such excess cash flow payments in fiscal year 2019.~~ The Term Loan is also subject to mandatory prepayment if the Company or any of its restricted subsidiaries receives proceeds from certain events, including certain asset sales and casualty events, and the issuance of certain debt and equity interests.

The Term Loan Agreement contains certain financial covenants. The Company was in compliance with all financial covenants under the Term Loan as of January 31, 2020.

On April 25, 2017, we entered into a new $350.0 million ABL revolving credit agreement with a syndicate of lenders (the “April 2017 ABL Facility” or “ABL Agreement”). The April 2017 ABL Facility provides for revolving loans and letters of credit in an aggregate amount of up to $350.0 million. The total April 2017 ABL Facility is subject to a $30.0 million sublimit for swing line loans and a $35.0 million sublimit for letters of credit, along with certain borrowing base and other customary restrictions as defined in the ABL Agreement. The April 2017 ABL Facility expires on April 25, 2022.

On December 22, 2017, the Company exercised its $100.0 million incremental commitment option under the April 2017 ABL Facility to fund the Lance Camper acquisition, which increased the facility to $450.0 million.

On January 31, 2020, the Company increased total borrowing capacity under the facility, in anticipation of its acquisition of Spartan ER, from $450.0 million to $500.0 million. The Company incurred an additional $0.3 million of debt issuance costs related to the incremental borrowing capacity option under the April 2017 ABL Facility.

Principal may be repaid at any time during the term of the ABL Facility without penalty.

The April 2017 ABL Facility contains certain financial covenants. We were in compliance with all financial covenants under the ABL Facility as of ~~July~~January 31, ~~2019.~~2020. As of ~~July~~January 31, ~~2019,~~2020, our availability under the April 2017 ABL Facility was ~~$186.9~~$196.6 million.

Refer to Note 8, Long-Term Debt, of the Notes to Condensed Unaudited Consolidated Financial Statements for further details.

In considering the financial performance of the business, management analyzes the primary financial performance measures of Adjusted EBITDA and Adjusted Net Income. Adjusted EBITDA is defined as net income for the relevant period before depreciation and amortization, interest expense and provision for income taxes, as adjusted for certain items described below that we believe are not indicative of our ongoing operating performance. Adjusted Net Income is defined as net income, as adjusted for certain items described below that we believe are not indicative of our ongoing operating performance. Neither Adjusted EBITDA nor Adjusted Net Income is a measure defined by GAAP. The most directly comparable GAAP measure to Adjusted EBITDA and Adjusted Net Income is Net Income for the relevant period.

We believe Adjusted EBITDA and Adjusted Net Income are useful to investors because these performance measures are used by our management for measuring profitability. 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 the Company’s 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 for the following items: non-cash depreciation and amortization, interest expense, income taxes and ~~income taxes.~~ other items as described below. Stock-based compensation expense is excluded from both Adjusted Net Income and Adjusted EBITDA because it is an expense, ~~that is measured based upon external inputs such as our current share price and the movement of share price of peer companies,~~ 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, such as impairment charges, losses attributable to assets held for sale, and deferred purchase price ~~payment,~~payments, which are determined to be those that in management’s judgment 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 is used by management to measure and report the Company’s financial performance to the Company’s Board of Directors, to assist in providing a meaningful analysis of the Company’s operating performance and is used as a measurement in incentive compensation for management. Based on the foregoing factors, management considers the adjustment for ~~non-cash purchase accounting,~~ certain legal matters, transaction expenses, stock-based compensation expense, restructuring costs, sponsor expense reimbursement, impairment charges, losses attributable to assets held for sale and deferred purchase price payment to be exceptional items.

Adjusted EBITDA and Adjusted Net Income have limitations as analytical tools. These are not presentations made in accordance with GAAP, ~~nor~~ are ~~they~~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 GAAP. 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 GAAP. Moreover, such measures do not reflect:

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

•

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

the cash requirements to pay our taxes.

The following table reconciles ~~net income (loss)~~Net Loss to Adjusted EBITDA for the periods presented:

	Three Months Ended July 31,				Nine Months Ended July 31,						Three Months Ended January 31,
($ in millions)	2019		2018		2019			2018			2020			2019
Net income (loss)	$	5.6	$	18.3	$	(3.3	)	$	35.1
Net loss											$	(9.4	)	$	(14.6	)
Depreciation and amortization		10.9		11.7		34.8			33.9			10.8			12.2
Interest expense, net		8.4		6.8		24.2			18.3			7.3			7.8
Provision (benefit) for income taxes		1.9		3.8		—			(7.2	)
Benefit for income taxes												(2.6	)		(4.4	)
EBITDA		26.8		40.6		55.7			80.1			6.1			1.0
Transaction expenses(a)		0.5		—		0.7			2.1			1.1			0.2
Sponsor expense reimbursement(b)		—		0.2		0.6			0.5			0.1			0.5
Restructuring costs(c)		1.3		0.9		4.2			6.9			0.6			1.1
Stock-based compensation expense(d)		2.5		1.4		7.3			5.1			2.6			1.4
Non-cash purchase accounting expense(e)		—		0.5		—			1.2
Legal matters(f)		0.8		1.1		5.3			2.8
Impairment charges(g)		—		—		2.8			—
Losses attributable to assets held for sale(h)		1.0		—		3.3			—
Deferred purchase price payment(i)		0.6		1.9		2.8			4.1
First year public company costs(j)		—		1.0		—			1.5
Legal matters(e)												0.1			2.1
Impairment charges(f)												—			2.7
Losses attributable to assets held for sale(g)												0.6			1.7
Deferred purchase price payment(h)												0.1			1.6
Adjusted EBITDA	$	33.5	$	47.6	$	82.7		$	104.3		$	11.3		$	12.3

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

Three Months Ended
July 31,

Nine Months Ended
July 31,

($ in millions)

2019

2018

2019

2018

Net income (loss)

$
5.6

$
18.3

$
(3.3
)

$
35.1

Amortization of intangible assets

4.1

4.6

13.3

13.7

Transaction expenses(a)

0.5

—

0.7

2.1

Sponsor expense reimbursement(b)

—

0.2

0.6

0.5

Restructuring costs(c)

1.3

0.9

4.2

6.9

Stock-based compensation expense(d)

2.5

1.4

7.3

5.1

Non-cash purchase accounting expense(e)

—

0.5

—

1.2

Legal matters(f)

0.8

1.1

5.3

2.8

Impairment charges(g)

—

—

2.8

—

Losses attributable to assets held for sale(h)

1.0

—

3.3

—

Deferred purchase price payment(i)

0.6

1.9

2.8

4.1

First year public company costs(j)

—

1.0

—

1.5

Impact of tax rate change(k)

—

(2.1
)

—

(12.5
)
Income tax effect of adjustments(l)

(2.8
)

(3.1
)

(10.4
)

(9.5
)
Adjusted Net Income

$
13.6

$
24.7

$
26.6

$
51.0

	Three Months Ended January 31,
($ in millions)	2020			2019
Net loss	$	(9.4	)	$	(14.6	)
Amortization of intangible assets		4.0			4.6
Transaction expenses(a)		1.1			0.2
Sponsor expense reimbursement(b)		0.1			0.5
Restructuring costs(c)		0.6			1.1
Stock-based compensation expense(d)		2.6			1.4
Legal matters(e)		0.1			2.1
Impairment charges(f)		—			2.7
Losses attributable to assets held for sale(g)		0.6			1.7
Deferred purchase price payment(h)		0.1			1.6
Income tax effect of adjustments(i)		(2.5	)		(4.2	)
Adjusted Net Loss	$	(2.7	)	$	(2.9	)

Restructuring expenses in the prior year period included costs incurred to restructure certain management positions in the Fire & Emergency, Commercial and Recreation segments as well as in the Corporate office, consisting of personnel costs, including severance and other employee benefit payments, as well as facility closure and lease termination costs.

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. ~~With the exception of operating lease obligations, we~~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.

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. The Company's disclosures of critical accounting policies are reported in its ~~2018~~2019 Annual Report on Form 10-K for the fiscal year ended October 31, ~~2018.~~2019. In the first quarter of fiscal year ~~2019,~~2020, the Company adopted ASU ~~2014-09~~2016-02 relating to ~~revenue recognition,~~leases, as discussed in Note 1 and Note 23 of the Notes to Condensed Unaudited Consolidated Financial Statements.

See 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.

There have been no material changes in our exposure to interest rate risk, foreign exchange risk and commodity price risk from the information provided in the Company’s Annual Report on Form 10-K filed on December ~~19, 2018.~~18, 2019.

The Company maintains “disclosure controls and procedures”, as such term is defined under Exchange Act Rule 13a-15(e), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and our management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. The Company has carried out an evaluation, as of the end of the period covered by this report, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective ~~at attaining the level~~as of ~~reasonable assurance noted above.~~January 31, 2020.

During the quarter ended ~~July~~January 31, ~~2019,~~2020, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

For a description of our legal proceedings, see Note ~~12,~~13, Commitments and Contingencies, of the Notes to Condensed Unaudited Consolidated Financial Statements, included in this Quarterly Report on Form 10-Q.

There have been no material changes to the risk factors associated with our business previously disclosed in “Item 1A. Risk Factors,” in ~~2018~~2019 Annual Report on Form 10-K for the fiscal year ended October 31, ~~2018.~~2019, other than as follows:

~~Item 2. Unregistered Sales~~A disruption, termination or alteration of ~~Equity Securities~~the supply of vehicle chassis or other critical components from third-party suppliers could materially adversely affect the sales of our products.

Our sales and ~~Use~~our manufacturing processes depend on the supply of ~~Proceeds.~~manufactured vehicle chassis and other critical components such as engines, transmissions and axles from major auto manufacturers and other original equipment manufacturers (“OEMs”), including Allison Transmission, Chrysler, Cummins, Ford, Freightliner, General Motors, Navistar and Volvo, among others. For the standardized, mass-produced chassis models, we convert the chassis for our customers under approved “authorized converter” agreements with the OEMs. We have tailored our products and processes to the specifications of these OEM agreements and have built customer expectations and planning around these designs. We are therefore reliant on a consistent supply of chassis and the maintenance of our status as “approved converters” in order to maintain our sales. If these manufacturers experience production delays, we may receive a lower allocation of chassis than anticipated, or if the quality or design of their chassis changes, or if these manufacturers implement recalls, we could incur significant costs or disruptions to our business, which could have a material adverse effect on our net sales, financial condition, profitability and/or cash flows. At various times, we may carry increased inventory to protect against these concerns, which may negatively impact our results of operations.

~~Common Stock Repurchases~~We purchase a significant number of components from domestic suppliers. To the extent tariffs increase the price of imported products, the industry may move more component orders to domestic suppliers, which could strain the capacity of our suppliers, putting the normal, uninterrupted supply of components at risk. In addition, our suppliers may experience operational delays or disruptions, including as a result of the outbreak of epidemics or other public health crises, which could in turn affect our manufacturing processes and sales. For example, we have experienced delays in the supply of certain components for our vehicles as a result of the ongoing outbreak of a novel coronavirus (COVID-19) in China and the restrictive measures put in place in response to the outbreak. Should these delays continue, or should our supply of such components be interrupted, our business and results of operations may be adversely affected. Additionally, certain important components that we use in our vehicles, such as engines and transmissions, are produced by a limited number of qualified suppliers or we may have a single supplier sourcing a specific component, and any disruption in their supply of such components to us would have a negative impact on our business.

~~The following table sets forth information with respect~~Volatility in the financial markets generally, and in the truck and automotive sectors in particular, could impact the financial viability of certain of our key third-party suppliers, or could cause them to ~~purchases of common stock made by~~exit certain business lines, or change the ~~Company~~terms on which they are willing to provide products. For example, during the ~~third quarter~~2008-2010 automotive industry crisis, many vehicle manufacturers, including Ford and General Motors, idled factories and reduced their output of ~~fiscal year~~vehicle chassis. During 2018 and 2019, ~~(in millions, except share~~many of our vehicle manufacturers encountered production issues and ~~per share amounts):~~delivery delays due to factors which included a vendor factory fire, new plant location inefficiencies, unplanned work stoppages and indirect impacts from the implementation of tariffs. A recurrence of either of these events or another similar development could lead to difficulties in meeting our customers’ demands and reduce our overall sales volume. Further, any changes in quality or design, capacity limitations, shortages of raw materials or other problems could result in shortages or delays in the supply of vehicle chassis or components to us. Our business, operating results and financial condition could suffer if our suppliers reduce output or introduce new chassis models that are unpopular with our customers or are incompatible with our current product designs or production process.

Our international operations are subject to exchange rate fluctuations and other risks relating to doing business internationally.

Although the amount of our sales and costs denominated in foreign currencies is not currently significant, we may increase our international operations in the future, which would increase our exposure to risks of doing business internationally, including fluctuations in foreign currencies, changes in the economic strength of the countries in which we do business, difficulties in enforcing contractual obligations and intellectual property rights, burdens of complying with a wide variety of international and U.S. export and import laws and social, political and economic instability and the widespread outbreak of infectious diseases, including the ongoing coronavirus outbreak in China and other countries as a result of our joint venture with China’s Chery Holding Group, under which we intend to sell specialty vehicles in China and internationally through Chery’s existing distribution network. In particular, changes in currency values could also impact the level of foreign competition in our domestic market as international products become more or less costly due to the relationship of the U.S. Dollar to other currencies. Currency exchange rates have fluctuated significantly over the past few years and may continue to do so in the future. Such fluctuations could have a material effect on our results of operations, balance sheets and cash flows and impact the comparability of our results between financial periods.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Delaware	26-3013415
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

111 East Kilbourn Avenue, Suite 2600 Milwaukee, WI	53202
(Address of principal executive offices)	(Zip Code)

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock ($0.001 Par Value)	REVG	New York Stock Exchange

		Page

Cautionary Statement About Forward-Looking Statements		3
Website and Social Media Disclosure		3
PART I.	FINANCIAL INFORMATION	4
Item 1.	Financial Statements	4
	Condensed Unaudited Consolidated Balance Sheets	4
	Condensed Unaudited Consolidated Statements of Operations and Comprehensive ~~Income (Loss)~~Loss	5
	Condensed Unaudited Consolidated Statements of Cash Flows	6
	Condensed Unaudited Consolidated ~~Statements~~Statement of Shareholders’ Equity	7
	Notes to Condensed Unaudited Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1920
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	3029
PART II.	OTHER INFORMATION	30
Item 1.	Legal Proceedings	3029
Item 1A.	Risk Factors	30
~~Item 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds~~	30
Item 6.	Exhibits	31
Signatures		32

	July 31, 2019			October 31, 2018
Senior secured facility:
Revolving credit ABL facility	$	248.0		$	300.0
Term Loan, net of debt issuance costs ($2.2 and $1.9)		170.6			121.9
		418.6			421.9
Less: current maturities		(1.8	)		(1.3	)
Long-term debt, less current maturities	$	416.8		$	420.6

	January 31, 2020			October 31, 2019
April 2017 ABL facility	$	292.0		$	210.0
Term Loan, net of debt issuance costs ($2.4 and $2.2)		169.7			170.2
		461.7			380.2
Less: current maturities		(3.4	)		(3.6	)
Long-term debt, less current maturities	$	458.3		$	376.6

Large accelerated filer	☐		Accelerated filer	☒

Non-accelerated filer	☐		Small reporting company	☐
Emerging growth company		☐

Remaining nine months of fiscal year 2020	$	6.2
2021		7.4
2022		5.7
2023		3.0
2024		1.4
Thereafter		0.1
Total undiscounted lease payments		23.8
Less: imputed interest		(1.9	)
Total lease liabilities	$	21.9

	October 31, 2019
	Weighted- Average Life		Gross		Accumulated Amortization			Net
Finite-lived intangible assets:
Customer relationships		8.0	$	126.7	$	(84.0	)	$	42.7
Order backlog		1.0		6.7		(6.7	)		—
Non-compete agreements		5.0		2.0		(1.3	)		0.7
Trade names		7.0		3.5		(3.0	)		0.5
Technology-related		7.0		0.9		(0.8	)		0.1
				139.8		(95.8	)		44.0
Indefinite-lived trade names				115.9		—			115.9
Total intangible assets, net			$	255.7	$	(95.8	)	$	159.9

	Three Months Ended July 31, 2018
	Fire & Emergency		Commercial		Recreation		Corporate, Other & Elims			Consolidated
Net sales	$	238.9	$	157.6	$	197.3	$	3.9		$	597.7
Depreciation and amortization	$	3.3	$	1.9	$	3.6	$	2.9		$	11.7
Capital expenditures	$	2.1	$	1.1	$	2.1	$	2.9		$	8.2
Total assets	$	607.4	$	299.2	$	359.9	$	136.6		$	1,403.1
Adjusted EBITDA	$	25.3	$	11.8	$	17.9	$	(7.4	)

	Nine Months Ended July 31, 2019
	Fire & Emergency		Commercial		Recreation		Corporate, Other & Elims			Consolidated
Net sales	$	699.0	$	514.5	$	542.6	$	(5.3	)	$	1,750.8
Depreciation and amortization	$	10.6	$	6.7	$	12.0	$	5.5		$	34.8
Capital expenditures	$	5.3	$	3.1	$	3.0	$	2.7		$	14.1
Total assets	$	622.8	$	328.5	$	336.6	$	118.2		$	1,406.1
Adjusted EBITDA	$	35.8	$	39.7	$	39.4	$	(32.2	)

Period	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (1)
May 1 - May 31		—		—		—	$	41.3
June 1 - June 30		222,122	$	13.53		222,122	$	38.3
July 1 - July 31		—		—		—	$	38.3
Total		222,122				222,122

Exhibit Number		Description

10.1*		First Amendment to Revolving Credit and Guaranty Agreement, dated as of June 22, 2018, by and among the Company, as Borrower, certain subsidiaries of the Company, as Guarantor Subsidiaries, Ally Bank, as Administrative Agent and Ally Bank and BMO Harris Bank N.A., as Co-Collateral Agents, and certain other lenders and agents party thereto.
10.2*		Second Amendment to Revolving Credit and Guaranty Agreement, dated as of January 31, 2020, by and among the Company, as Borrower, certain subsidiaries of the Company, as Guarantor Subsidiaries, Ally Bank, as Administrative Agent and Ally Bank and BMO Harris Bank N.A., as Co-Collateral Agents, and certain other lenders and agents party thereto.
10.3*		First Amendment to Term Loan and Guaranty Agreement, dated as of June 22, 2018, by and among the Company, as Borrower, certain subsidiaries of the Company, as Guarantor Subsidiaries, Ally Bank, as Administrative Agent and Collateral Agent, and certain other lenders and agents party thereto.
10.4*		Second Amendment to Term Loan and Guaranty Agreement, dated as of September 24, 2018, by and among the Company, as Borrower, certain subsidiaries of the Company, as Guarantor Subsidiaries, Ally Bank, as Administrative Agent and Collateral Agent, and certain other lenders and agents party thereto.
10.5*		Third Amendment to Term Loan and Guaranty Agreement, dated as of October 18, 2019, by and among the Company, as Borrower, certain subsidiaries of the Company, as Guarantor Subsidiaries, Ally Bank, as Administrative Agent and Collateral Agent, and certain other lenders and agents party thereto.
10.6*		Fourth Amendment to Term Loan and Guaranty Agreement, dated as of January 31, 2020, by and among the Company, as Borrower, certain subsidiaries of the Company, as Guarantor Subsidiaries, Ally Bank, as Administrative Agent and Collateral Agent, and certain other lenders and agents party thereto.
31.1*		Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*		Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*		Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*		XBRL Instance Document
101.SCH*		XBRL Taxonomy Extension Schema Document
101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document

	REV GROUP, INC.

Date: ~~September~~March 4, ~~2019~~2020	By:	/s/ Timothy Sullivan
		Timothy Sullivan
		Chief Executive Officer

Date: ~~September~~March 4, ~~2019~~2020	By:	/s/ Dean J. Nolden
		Dean J. Nolden
		Chief Financial Officer