Annual Report for Fiscal Year Ending October 31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the related notes appearing elsewhere in this Annual Report on Form 10-K. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report on Form 10-K, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. You should read the "Cautionary Statement About Forward-Looking Statements" and "Risk Factors" sections of this Annual Report on Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

This discussion and analysis should be read in conjunction with the accompanying audited consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K.

Overview

REV Group companies are leading designers, manufacturers and distributors of specialty vehicles and related aftermarket parts and services. We serve a diversified customer base, primarily in North America, through our two segments. We provide customized vehicle solutions for applications, including essential needs for public services (ambulances and fire apparatus), commercial infrastructure (terminal trucks and industrial sweepers) and consumer leisure (recreational vehicles). Our diverse portfolio is made up of well-established principal vehicle brands, including many of the most recognizable names within their industry.

Proposed Merger

On October 29, 2025, The Company entered into the Merger Agreement with Terex, Merger Sub 1 and Merger Sub 2. The Proposed Merger intends to form a leading specialty equipment manufacturer in emergency, waste, utilities, environmental and materials processing equipment with attractive end markets characterized by low cyclicality, resilient demand and long-term growth profiles.

The Merger Agreement provides that, among other things and subject to the terms and conditions of the Merger Agreement, (i) the First Merger will occur, with REV continuing as the surviving corporation in the First Merger and (ii) immediately following the First Merger, the Second Merger will occur, with Merger Sub 2 continuing as the surviving company in the Second Merger as a wholly owned subsidiary of Terex. At the Effective Time, each issued and outstanding share of the Company's common stock (other than certain excluded shares) will be converted into the right to receive (i) 0.9809 shares of common stock, par value $0.01 per share, of Terex, and (ii) $8.71 in cash (without interest), in each case subject to the terms and conditions of the Merger Agreement.

If the Proposed Merger is completed, our common stock will cease to be listed on the New York Stock Exchange and will be deregistered. The Proposed Merger is subject to approval by both our and Terex's shareholders, antitrust and regulatory approvals, and other customary closing conditions.

The preliminary Form S-4 related to the Proposed Merger with Terex was filed with the SEC on December 8, 2025.

Segments

Specialty Vehicles- Our Specialty Vehicles segment sells (i) fire apparatus equipment under the E-ONE, KME, and Ferrara brands, and Spartan ER, which consists of the Spartan Emergency Response, Smeal, Spartan Fire Chassis, and Ladder Tower brands, (ii) ambulances under the AEV, Horton, Leader, Road Rescue and Wheeled Coach brands, and (iii) terminal trucks and sweepers under the Capacity and Laymor brands, respectively. We believe we have one of the industry's broadest portfolios of products including Type I ambulances (aluminum body mounted on a heavy truck-style chassis), Type II ambulances (van conversion ambulance), Type III ambulances (aluminum body mounted on a van-style chassis), pumpers (fire apparatus on a custom or commercial chassis with a water pump and water tank to extinguish fires), aerial trucks (fire apparatus with stainless steel or aluminum ladders), tanker trucks, rescues, aircraft rescue firefighting ("ARFF"), custom cabs & chassis, terminal trucks (specialized vehicles which move freight in warehouses, intermodal yards, distribution and fulfillment centers and ports), and sweepers (three- and four-wheel versions used in road construction activities). 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 product type from our Specialty Vehicles brands.

Recreational Vehicles- Our Recreational Vehicles segment serves the RV market through the following principal brands: American Coach, Fleetwood RV, Holiday Rambler, Renegade RV and Midwest Automotive Designs. We believe our brand portfolio contains some of the longest standing, most recognized brands in the RV industry. Our products in the Recreational Vehicles 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 van or commercial truck chassis), and Class B RVs (motorhomes built out within a van chassis and high-end luxury van conversions). The Recreational Vehicles segment also includes Goldshield Fiberglass, which produces a wide range of custom molded fiberglass products for the Fleetwood family of brands, other RV manufacturers, and broader industrial markets.

Factors Affecting Our Performance

The primary factors affecting our results of operations include:

General Economic Conditions

Our business is impacted by the U.S. economic environment, employment levels, consumer confidence, municipal spending, municipal tax receipts, changes in interest rates and instability in securities markets around the world, among other factors. In particular, changes in the U.S. economic climate can impact demand in key end markets. In addition, we are susceptible to supply chain disruptions resulting from the impact of tariffs and global macro-economic factors 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 cost and 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 Recreational Vehicles segment, the Specialty Vehicles segment is also impacted by the overall economic environment. For example, local tax revenues are an important source of funding for fire and ambulance purchases from emergency response departments. Volatility in tax revenues or availability of funds via budgetary appropriation can have a negative impact on the demand for these products. Additionally, these products 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.

Seasonality

In a typical year, our operating results are impacted by seasonality. Historically, the slowest sales volume quarter has been the first fiscal quarter when the purchasing seasons for vehicles, such as RVs, are the lowest due to the colder weather and the relatively long time until the summer vacation season. Our first fiscal quarter also has fewer working days to complete and ship units due to the number of holidays and related vacation taken by employees. Sales of our products have typically been higher in the second, third and fourth fiscal quarters (with the fourth fiscal quarter typically being the strongest) due to better weather, the vacation season, buying habits of RV dealers and end-users, and timing of government and municipal customer fiscal years. 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, are less seasonal, but fluctuations in sales of these vehicles can also be impacted by timing surrounding the fiscal years of municipalities and commercial customers, as well as the timing and amounts of multi-unit orders.

Impact of Acquisitions and Divestitures

We actively evaluate opportunities to improve and expand our business through targeted acquisitions that are consistent with our strategy. We also may dispose of certain components of our business that no longer fit within our overall strategy.

In the first quarter of fiscal year 2024, we sold Collins Bus Corporation ("Collins"), a wholly owned subsidiary of Collins Industries, Inc. ("Collins Industries"), an indirect wholly-owned subsidiary of the Company. Refer to Note 6, Divestiture Activities, of the Notes to the Consolidated Financial Statements for further details. During the first quarter of fiscal year 2024, we announced the discontinuation of manufacturing operations at our ElDorado National (California) ("ENC") facility. Subsequently, in the fourth quarter of fiscal year 2024, we sold ENC. Collins and ENC are collectively referred to as the "Bus Manufacturing Businesses".

The Company also sold certain assets of our Fire Regional Technical Center ("Fire RTC") business in fiscal year 2024 and the stock of Lance Camper Mfg. Corp. ("Lance") and Avery Transport Inc. ("Avery") in fiscal year 2025; however, these business dispositions did not represent a material percentage of total revenue or earnings.

Results of Operations

The following table compares results for fiscal years 2025, 2024 and 2023

Net Sales: Consolidated net sales increased $83.3 million in fiscal year 2025 compared to the prior year. Excluding the impact of the Bus Manufacturing Businesses, which were divested in fiscal year 2024, net sales increased $246.8 million, or 11.1% compared to the prior year. The increase in net sales, excluding the impact of the Bus Manufacturing Businesses, was due to higher net sales in the Specialty Vehicles segment, partially offset by lower net sales in the Recreational Vehicles segment. The increase within the Specialty Vehicles segment, excluding the impact of the Bus Manufacturing Businesses, was primarily due to increased shipments of fire apparatus and ambulance units, a favorable mix of ambulance units, and price realization. The decrease within the Recreational Vehicles segment was primarily due to lower unit shipments, partially offset by favorable product mix in certain categories and pricing actions.

Consolidated net sales decreased $257.8 million in fiscal year 2024 compared to the prior year. Excluding the impact of Collins, which was divested on January 26, 2024, net sales decreased $110.8 million, or 4.4% compared to the prior year. The decrease in net sales, excluding the impact of Collins, is primarily due to lower net sales in the Recreational Vehicles segment, partially offset by higher net sales within the Specialty Vehicles segment. The decrease within the Recreational Vehicles segment was primarily due to lower unit shipments and increased retail assistance. The increase within the Specialty Vehicles segment, excluding the impact of the Collins divestiture, was primarily due to price realization and increased shipments of fire apparatus and ambulance units, partially offset by lower shipments of terminal trucks.

Gross Profit: Consolidated gross profit increased $72.5 million in fiscal year 2025 compared to the prior year. Excluding the impact of the Bus Manufacturing Businesses, gross profit increased $87.1 million, or 30.8% compared to the prior year quarter. The increase in gross profit, excluding the impact of the Bus Manufacturing Businesses, was primarily attributable to higher net sales, lower material costs, and benefits realized from programs put in place to increase operating efficiencies within the Specialty Vehicles segment.

Consolidated gross profit decreased $18.8 million in fiscal year 2024 compared to the prior year. Excluding the impact of the Collins divestiture, gross profit increased $18.5 million, or 6.6% compared to the prior year. The increase in gross profit, excluding the impact of Collins, was primarily attributable to higher net sales and gross margin in the Specialty Vehicles segment, partially offset by lower net sales and gross margin within the Recreational Vehicles segment.

Selling, General and Administrative: Consolidated selling, general and administrative ("SG&A") costs decreased $3.3 million in fiscal year 2025 compared to the prior year primarily due to lower professional fees and a decrease in SG&A attributable to the Bus Manufacturing Businesses, partially offset by higher legal and incentive compensation costs and transaction costs related to the Proposed Merger.

Consolidated selling, general and administrative ("SG&A") costs decreased $36.6 million in fiscal year 2024 compared to the prior year primarily due to the non-recurrence of legal costs associated with the legal case described in Note 16, Commitments and Contingencies of the Notes to the Consolidated Financial Statements, lower personnel and incentive compensation costs, and a decrease in SG&A attributable to Collins, partially offset by higher transaction expenses related to divestiture and capital market transactions.

Restructuring: Consolidated restructuring costs for fiscal year 2024 were associated with the discontinuation of manufacturing operations at the Company's ENC facility, as announced in the first quarter of fiscal year 2024. There were no restructuring costs for fiscal year 2025.

Impairment Charges: Consolidated impairment charges were $14.5 million for fiscal year 2024. The impairment charges were primarily related to the impairment of an indefinite-lived trade name and certain property, plant, and equipment due to the discontinuation of manufacturing operations at the Company's ENC facility, and the impairment of an indefinite-lived trade name within the Recreational Vehicles segment. There were no impairment charges for fiscal year 2025.

Loss (Gain) on Sale of Business: The loss on sale of business was $39.6 million for fiscal year 2025 and was due to the sale of the Lance and Avery businesses.

The gain on sale of business for fiscal year 2024 was due to the sale of the Bus Manufacturing Businesses and Fire RTC.

The loss on sale of business for fiscal year 2023 was due to the sale of non-core businesses within the Specialty Vehicles segment.

Provision for income taxes:Consolidated income tax provision was $22.3 million or 19.0% of pretax income for fiscal year 2025. The fiscal 2025 tax provision was favorably impacted by a tax loss on the sale of the Lance and Avery businesses and incentives for U.S. manufacturing and research and was unfavorably impacted by nondeductible expenses and additional unrecognized tax benefits recorded during the year.

Consolidated income tax provision was $82.8 million or 24.3% of pretax income for fiscal year 2024. The fiscal year 2024 tax provision was favorably impacted by incentives for U.S. research and stock-based compensation tax deductions and was unfavorably impacted by nondeductible expenses.

Consolidated income tax provision was $12.9 million or 22.2% of pretax income for fiscal year 2023. The fiscal year 2023 tax provision was favorably impacted by incentives for U.S. research and was unfavorably impacted by additional unrecognized tax benefits recorded during the year.

Net income:Consolidated net income decreased $162.4 million in fiscal year 2025 compared to the prior year primarily due to the factors detailed above.

Consolidated net income increased $212.3 million in fiscal year 2024 compared to the prior year primarily due to the factors detailed above.

Consolidated Adjusted EBITDA increased $66.7 million in fiscal year 2025 compared to the prior year. Excluding the impact of the Bus Manufacturing Businesses, consolidated Adjusted EBITDA increased $84.3 million, or 58.1% compared to the prior year quarter. The increase was primarily due to higher contribution from the Specialty Vehicles segment.

Consolidated Adjusted EBITDA increased $10.0 million in fiscal year 2024 compared to the prior year. Excluding the impact of the Collins divestiture, Adjusted EBITDA increased $42.8 million, or 35.7%, compared to the prior year. This increase is primarily due to an increase in Adjusted EBITDA in the Specialty Vehicles segment, partially offset by a decrease in Adjusted EBITDA in the Recreational Vehicles segment.

Refer to the "Adjusted EBITDA and Adjusted Net Income" tables and related footnotes below for a reconciliation of Net Income to Adjusted EBITDA.

Refer to the "Adjusted EBITDA and Adjusted Net Income" tables and related footnotes below for a reconciliation of Net Income to Adjusted Net Income.

Segment Information

Specialty Vehicles Segment

Net Sales: Specialty Vehicles segment net sales increased $88.4 million in fiscal year 2025 compared to the prior year. Excluding the impact of the Bus Manufacturing Businesses, net sales increased $251.9 million, or 16.1% compared to the prior year quarter. The increase in net sales was primarily due to increased shipments of fire apparatus and ambulance units, a favorable mix of ambulance units, and price realization.

Specialty Vehicles segment net sales decreased $1.6 million in fiscal year 2024 compared to the prior year. Excluding the impact of the Collins divestiture, segment net sales increased $145.4 million, or 9.2% compared to the prior year. The increase in net sales was primarily due to price realization and increased shipments of fire apparatus and ambulance units, partially offset by lower shipments of terminal trucks.

Adjusted EBITDA: Specialty Vehicles segment Adjusted EBITDA increased $72.1 million in fiscal year 2025 compared to the prior year. Excluding the impact of the Bus Manufacturing Businesses, Adjusted EBITDA increased $89.7 million, or 65.5%. The increase was primarily due to increased shipments and a favorable mix of ambulance units and price realization, partially offset by inflationary pressures.

Specialty Vehicles segment Adjusted EBITDA increased $59.7 million in fiscal year 2024 compared to the prior year. Excluding the impact of the Collins divestiture, segment Adjusted EBITDA increased $92.5 million, or 149.2% compared to the prior year. The increase was primarily related to price realization, a favorable mix of fire apparatus, and increased shipments of fire apparatus and ambulance units, partially offset by inflationary pressures and lower shipments of terminal trucks.

Recreational Vehicles Segment

Net Sales: Recreational Vehicles segment net sales decreased $5.4 million in fiscal year 2025 compared to the prior year primarily due to lower unit shipments and increased retail assistance in certain categories, partially offset by favorable product mix in certain categories and pricing actions.

Recreational Vehicles segment net sales decreased $257.7 million in fiscal year 2024 compared to the prior year primarily due to decreased unit shipments and increased retail assistance.

Adjusted EBITDA: Recreational Vehicles segment Adjusted EBITDA decreased $4.0 million in fiscal year 2024 compared to the prior year primarily due to inflationary pressures, including tariff impacts, lower unit shipments, and increased retail assistance on certain models, partially offset by pricing actions and favorable category mix.

Recreational Vehicles segment Adjusted EBITDA decreased $49.8 million in fiscal year 2024 compared to the prior year primarily due to lower unit shipments, increased retail assistance, and inflationary pressures, partially offset by cost reduction actions.

Backlog

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

Orders from our dealers and end customers are evidenced by a contract or firm purchase order or, in the case of the Recreational Vehicles segment and certain orders in our Specialty Vehicles segment, a reserved production slot. These orders are reported in our backlog at the aggregate selling prices, net of discounts or allowances. Orders included in the Recreational Vehicles segment backlog and certain orders within the Specialty Vehicles segment backlog generally can be cancelled or postponed at the option of the dealer at any time without penalty. As a result, this backlog may not necessarily be an accurate measure of future sales.

At the end of fiscal year 2025, our backlog was $4,635.2 million, compared to $4,471.3 million at the end of fiscal year 2024. The increase in consolidated backlog was due to an increase within the Specialty Vehicles segment, partially offset by a decrease within the Recreational Vehicles segment. The increase in Specialty Vehicles segment backlog was primarily the result of continued demand and order intake for fire apparatus and ambulance units along with pricing actions, partially offset by increased production and shipments of fire apparatus and ambulance units. The decrease in Recreational Vehicles segment backlog was primarily the result of lower order intake in certain product categories.

Liquidity and Capital Resources

General

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

We believe that our sources of liquidity and capital will be sufficient to finance our continued operations and growth strategy. However, we cannot assure that cash provided by operating activities and borrowings under the current revolving credit facility (the "Amended 2021 ABL Facility" or "Amended 2021 ABL Agreement") 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 Amended 2021 ABL Facility is not sufficient due to the size of our borrowing base or other external factors, we may have to obtain additional financing. If additional capital is obtained by issuing equity, the interests of our existing stockholders will be diluted. If we incur additional indebtedness, that indebtedness may contain financial and other covenants that may significantly restrict our operations or may involve higher overall interest rates. We are also subject to certain limitations on obtaining additional financing under the Merger Agreement. We cannot assure that we will be able to obtain refinancing or additional financing on favorable terms or at all.

Cash Flow

The following table shows summary cash flows for fiscal years 2025, 2024 and 2023:

Net Cash Provided by Operating Activities

Net cash provided by operating activities for fiscal year 2025 was $241.1 million, compared to $53.4 million for fiscal year 2024. The increase in cash from operating activities in fiscal year 2025 compared to the prior year was primarily related to higher cash net income generated during the period, disciplined inventory management, lower income tax payments, and higher receipts of customer advances, partially offset by higher accounts receivable driven by higher sales at the end of the period.

Net cash provided by operating activities for fiscal year 2024 was $53.4 million, compared to $126.5 million for fiscal year 2023. The decrease in cash from operating activities in fiscal year 2024 compared to the prior year was primarily related to higher income tax payments, including those associated with the sale of the Bus Manufacturing Businesses, lower receipts of customer advances, and higher accounts payable payments, partially offset by higher collections of accounts receivable and lower inventory purchases.

Net Cash (Used in) Provided by Investing Activities

Net cash used in investing activities for fiscal year 2025 was $50.3 million, compared to $348.5 million net cash provided by investing activities for fiscal year 2024. The decrease in net cash from investing activities was related to the non-recurrence of cash provided by the sale of the Bus Manufacturing Businesses and Fire RTC in 2024, and an increase in spending related to capital expenditures.

Net cash provided by investing activities for fiscal year 2024 was $348.5 million, compared to $29.9 million net cash used in investing activities for fiscal year 2023. The increase in net cash provided by investing activities was related to the cash received in connection with the sale of the Bus Manufacturing Businesses and Fire RTC.

Net Cash Used in Financing Activities

Net cash used in financing activities for fiscal year 2025 was $180.7 million, compared to $398.6 million for fiscal year 2024. The decrease in net cash used in financing activities was primarily due to lower dividends payments and a decrease in share repurchases.

Net cash used in financing activities for fiscal year 2024 was $398.6 million, compared to $95.7 million for fiscal year 2023. The increase in net cash used in financing activities was primarily due to higher dividends payments and share repurchases of $126.1 million.

Dividends

During fiscal year 2025 we paid a quarterly cash dividend at the rate of $0.06 per share on our common stock. During fiscal years 2024 and 2023, we paid a quarterly cash dividend at the rate of $0.05 per share on our common stock. During fiscal year 2024, we also paid a special cash dividend of $3.00 per share, or a total of $178.1 million, on our common stock.

Our dividend policy has certain risks and limitations, particularly with respect to liquidity. The dividend payment is at the discretion of our Board of Directors, and we may not pay dividends according to our policy, or at all. We cannot assure that we will have sufficient funds to pay dividends on our common stock in the future and we are also subject to certain limitations on paying dividends under the Merger Agreement. As such, there can be no assurance that future dividends will be paid.

Stock Repurchase Program

On June 1, 2023, the Company's Board of Directors approved a new share repurchase program that allowed the repurchase of up to $175.0 million of the Company's outstanding common stock (the "2023 Repurchase Program"). The 2023 Repurchase Program replaced the Company's prior share repurchase program. The 2023 Repurchase Program would have expired 24 months after the approval date and gave management flexibility to determine conditions under which the shares could be purchased, subject to certain limitations. During fiscal year 2023, the Company did not repurchase any shares under the 2023 Repurchase Program or the Company's prior share repurchase program. During fiscal year 2024, the Company repurchased and retired 8,000,000 shares under the 2023 Repurchase Program at a total cost of $126.1 million and at a price of approximately $15.76 per share. The Company incurred approximately $3.6 million in additional fees and excise taxes associated with the repurchase, which has been included within the total cost of the share repurchase and recorded directly within equity.

On December 5, 2024, the Company's Board of Directors authorized the Company to repurchase up to $250.0 million of the Company's outstanding common stock (the "2024 Repurchase Program"). The 2024 Repurchase Program replaced the 2023 Repurchase Program. The 2024 Repurchase Program expires 24 months after the authorization date and gives management flexibility to determine the conditions under which shares may be purchased from time to time through a variety of methods, including in privately negotiated or open market transactions, such as pursuant to a trading plan in accordance with Rule 10b5-1 and Rule 10b-18 of the Exchange Act or a combination of methods. The 2024 Repurchase Program does not obligate the Company to acquire any specific number of shares and it can be suspended or discontinued at any time without notice. We are subject to certain limitations on our ability to repurchase shares of the Company's common stock under the Merger Agreement. During the year ended October 31, 2025, the Company repurchased and retired 3,456,979 shares under the 2024 Share Repurchase Program at a cost of $107.6 million and at an average price of approximately $31.10 per share, excluding commissions, fees and excise taxes. As of October 31, 2025, the approximate dollar value of shares that may yet be purchased under the 2024 Repurchase program is $142.4 million.

ABL Facility

On February 20, 2025, the Company entered into a third amendment to its then existing ABL agreement (the "2021 ABL Agreement" or the "2021 ABL Facility"), hereafter referred to as the "Amended 2021 ABL Agreement" or the "Amended 2021 ABL Facility". The Amended 2021 ABL Facility provides for revolving loans and letters of credit in an aggregate amount of up to $450.0 million. The total credit facility is subject to a $45.0 million sublimit for swing line loans and a $35.0 million sublimit for letters of credit (plus up to an additional $20.0 million of letters of credit at issuing bank's discretion), along with certain borrowing base and other customary restrictions as defined in the Amended 2021 ABL Agreement. The Amended 2021 ABL Agreement allows for incremental facilities in an aggregate amount of up to $100.0 million, plus the excess, if any, of the borrowing base then in effect over total commitments then in effect. Any such incremental facilities are subject to receiving additional commitments from lenders and certain other customary conditions. Subject to certain conditions and limitations set forth in the Amended 2021 ABL Agreement, the Company is also permitted to enter into an additional secured term loan credit facility with financial institutions acceptable to the administrative agent. The debt issuance costs capitalized in connection with the Amended 2021 ABL Facility less accumulated amortization are included in Other long-term assets in the Company's Consolidated Balance Sheets. The debt issuance costs are amortized over the life of the debt on a straight-line basis. The Amended 2021 ABL Facility matures on February 20, 2030. The Company may prepay principal, in whole or in part, at any time without penalty.

The Company would become subject to compliance with a 1.0 to 1.0 minimum fixed charge coverage ratio financial covenant under the Amended 2021 ABL Agreement if the Company's borrowing base availability falls below the greater of $35.0 million or 12.5% of the borrowing base. As of October 31, 2025, the Company's outstanding debt under the Amended 2021 ABL Facility was $40.0 million, and the Company's availability under the Amended 2021 ABL Facility was $307.6 million.

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

Contractual Obligations

Significant contractual commitments at October 31, 2025 are expected to affect our cash flows in future periods as set forth in the table below.

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. Other than the items noted in Note 16, Commitments and Contingencies, to our 2025 audited consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K, we do not have any material off-balance sheet arrangements.

Adjusted EBITDA and Adjusted Net Income

In considering the financial performance of the business, management analyzes the primary financial performance measures of Adjusted EBITDA and Adjusted Net Income. Adjusted EBITDA is defined as Net Income for the relevant period before depreciation and amortization, interest expense and 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.

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

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

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

The following table reconciles Net income to Adjusted EBITDA for the periods presented:

The following table reconciles Net income to Adjusted Net Income for the periods presented:

Critical Accounting Policies and Estimates

Our significant accounting policies are described in Note 2 to our 2025 audited consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K. The preparation of consolidated financial statements in conformity with U.S. GAAP requires us to make estimates, assumptions and judgments that affect amounts of assets and liabilities reported in our consolidated financial statements, the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and reported amounts of revenues and expenses during the year. We believe our estimates and assumptions are reasonable; however, future results could differ from those estimates. We consider the following accounting estimates to be the most critical in understanding the judgments that are involved in preparing our consolidated financial statements.

Goodwill and Indefinite-Lived Intangible Assets

Goodwill and indefinite-lived intangible assets, consisting of trade names, are not amortized. However, the Company reviews goodwill and indefinite-lived intangible assets for impairment at least annually or more often if an event occurs or circumstances change which indicates that its carrying amount may not exceed its fair value. The annual impairment review is performed as of the first day of the fourth quarter of each fiscal year based upon information and estimates available at that time. To perform the impairment testing, the Company may first assess qualitative factors to determine whether it is more likely than not that the fair values of the Company's reporting units or indefinite-lived intangible assets are less than their carrying amounts as a basis for determining whether or not to perform the quantitative impairment test. Qualitative testing includes the evaluation of economic conditions, financial performance and other factors such as key events when they occur. The Company then estimates the fair value of each reporting unit and each indefinite-lived intangible asset not meeting the qualitative criteria and compares their fair values to their carrying values.

Under the quantitative method, the fair value of each reporting unit of the Company is determined by using the income approach and/or the market approach. The income approach involves discounting management's projections of future interim and terminal cash flows to a present value at a risk-adjusted discount rate which corresponds with the Company's and market-participant weighted-average cost of capital ("WACC"). Key assumptions used in the income approach include future sales growth, gross margin and operating expenses trends, depreciation and amortization expense, taxes, capital expenditures and changes in working capital. Projected future cash flows are based on income forecasts and management's knowledge of the current operating environment and expectations for the Company on a going-forward basis. The WACC represents a blended cost of equity and debt capital applicable to the Company based on observed market participant rates of return for a group of comparable public companies in the industry, utilizes market participant capital structure assumptions by reference to the industry's average debt to total invested capital ratios, and is also being adjusted for relative risk premiums specific to each reporting unit tested. The terminal residual value is based upon the projected cash flow for the final projected year and is calculated using a capitalization rate based on estimates of growth of the net cash flows based on the Company's estimate of sustainable growth for each financial reporting unit. The inputs and assumptions used in the determination of fair value are considered Level 3 inputs within the fair value hierarchy, as further described in Note 2, Basis of Presentation and Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements.

Under the market approach, the Company utilizes multiples of revenue and earnings from other publicly traded companies with comparable operations, to determine the fair value of the reporting unit. The inputs and assumptions used in the determination of fair value are considered Level 3 inputs within the fair value hierarchy, as further described in Note 2, Basis of Presentation and Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements.

If the fair value of any reporting unit, as calculated using the income approach and/or the market approach, when applicable, is less than its carrying value, an impairment charge is recorded for any excess of the reporting unit's carrying value over its fair value, not to exceed the carrying amount of goodwill of that reporting unit.

When determining the fair value of indefinite-lived trade names, the Company uses the relief-from-royalty ("RFR") method, within the income approach. The RFR method assumes that an intangible asset is valuable because the owner of the asset avoids the cost of licensing that asset. Under the RFR method, an estimate is made as to the appropriate royalty income that would be negotiated in an arm's-length transaction if the subject intangible asset were licensed from an independent third party. The royalty savings are then calculated by multiplying a royalty rate, expressed as a percentage of revenues, by a determined applicable level of future revenues provided per each trade name as estimated by the Company. The royalty rate is based on research of industry and market data related to transactions involving the licensing of comparable intangible assets. The resulting future royalty savings are then discounted to their present value equivalent utilizing market participant rates of return, adjusted for relative risk premiums specific to each trade name as well as the reporting unit housing it. In considering the fair value of trade names, the Company also considers relative age, consistent use, quality, expansion possibilities, relative profitability, relative market potential, and how a market participant may employ these intangible assets from a financial and economic point of view.

During fiscal year 2025, the Company performed its annual goodwill test using a quantitative approach and did not identify any goodwill impairments. The goodwill balances at the Specialty Vehicles segment and Recreational Vehicles segments are $95.2 million and $42.5 million, respectively.

During fiscal year 2025, the Company performed its annual indefinite-lived trade name test using both a quantitative and qualitative approach and did not identify any impairments.

Warranty

Provisions for estimated warranty and other related costs are recorded in cost of sales and are periodically adjusted to reflect actual experience. The amount of accrued warranty liability reflects management's best estimate of the expected future cost of honoring our obligations under our limited warranty plans. The costs of fulfilling our warranty obligations principally involve replacement parts, labor and sometimes travel for any field retrofit or recall campaigns. Our estimates are based on historical experience, the number of units involved and the cost per claim. A significant increase in replacement parts, labor and travel could have a material adverse impact on our operating results. If our warranty reserve were to change by 5%, it would not have a material impact on our gross profit for the fiscal year ended October 31, 2025.

Recent Accounting Pronouncements

Refer to Note 2 to our 2025 audited consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K for a discussion of the impact of new accounting standards on the Company's consolidated financial statements.