REV Group shared a positive update on its financial health Thursday morning as many of its plants resume production this month.
The RV and specialty vehicle manufacturer indicated a solid liquid position in a letter to investors on April 30. Production and delivery at REV Group’s Midwest Automotive Design and Renegade RV resumed operation the weeks of April 20 and April 27, respectively.
Jake Stephenson, regional sales manager at Midwest Automotive Design, told RV News on Thursday the manufacturer is running “full production” with its complete staff.
“Most of our vendors are still open, and we’re vertically integrated enough where we build most of the products inside our vehicles,” Stephenson said.
He said Midwest Automotive Design is on track thanks to a group of supervisors who returned to work before the rest of the team to ease the transition.
“We’re just glad to be back and running,” Stephenson said. “We’re always working to improve the product and come up with new, cool things.”
On Thursday, REV Group announced it is in a stable position after obtaining financial relief it requested under an existing $175 million loan agreement. Effective April 30, the company has less stringent compliance requirements regarding its leverage ratio on the loan agreement.
REV Group President and CEO Rod Rushing said the adjusted agreement will help the company better respond to the current economy.
“This amendment further solidifies our liquidity position to address the current economic environment. We believe we are now very well situated to take advantage of our market leading position as the U.S. economy begins to re-open and recover,” Rushing said.
He also confirmed REV Group’s plans to reopen production plants in Indiana and California in the next few weeks.
“Today we are also excited to announce our plan to return to normal production at our four RV facilities in Indiana and California after a temporary suspension began in late March,” Rushing said.
Under current conditions, production of American Coach, Fleetwood RV and Holiday Rambler motorhomes are scheduled to begin May 4. Lance Camper, located in Lancaster, CA, has a tentative restart date of May 18.
Production at each facility is scheduled to grow at a pace “commensurate with material availability and customer demand,” the company announced.
“Enhanced health and safety protocols that are consistent with CDC recommendations, and currently in use at all REV facilities, have been implemented at our recreation plants to protect employee safety as they return to work,” Rushing said.
Full details on the company’s amended term loan agreement are included below.
REV Group, Inc. (NYSE: REVG), a manufacturer of industry-leading specialty vehicles, announced today that it has obtained financial covenant relief requested under an amendment to the Company’s existing $175 million Term Loan Agreement (“Agreement”) and provided an update on Recreation manufacturing operations.
Effective April 30, 2020, the Company’s amended Agreement eliminates the requirement for quarterly compliance with the net leverage ratio covenant test and replaces it with an updated fixed charge coverage ratio test minimum of 1.25x through the end of fiscal 2020. At the end of the fiscal 2021 first quarter, the Agreement’s fixed charge coverage ratio will revert to a quarterly net leverage ratio test of less than 5.25x, which will be reduced by 0.25x each fiscal quarter thereafter until it reaches 4.25x by the end of the fiscal 2022 first quarter.
Click here to read the full news release from REV Group.
