REV Group, Inc. (NYSE:REVG) Q3 2019 Earnings Conference Call - Final Transcript
Sep 05, 2019 • 11:00 am ET
Greetings, and welcome to the REV Group, Inc. Third Quarter 2019 Earnings Conference Call. [Operator Instructions] A brief question-and-answer session will follow the formal presentation. [Operator Instructions]
It is now my pleasure to introduce your host Mr. Drew Konop, Vice President of Investor Relations. Thank you. You may begin.
Thanks, Michelle. Good morning, and thank you for joining us. Last night, we issued our third quarter 2019 results. A copy of the release is available on our website at investors.revgroup.com. Today's call is being webcast and is accompanied by a slide presentation, which includes reconciliation of non-GAAP to GAAP financial measures that we will use during this call. It is also available on our website.
Please refer now to Slide 2 of that presentation. Our remarks and answers will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements are subject to risks, that could cause actual results to be materially different from those expressed or implied by such forward-looking statements. These risks include among others, matters that we have described in our Form 8-K filed with the SEC last night and other filings we make with the SEC.
We disclaim any obligation to update these forward-looking statements, which may not be updated until our next quarterly earnings conference call, if at all. All references on this call to a quarter or a year are our fiscal quarter or fiscal year, unless otherwise stated. Joining me on the call today are our President and CEO, Tim Sullivan; and CFO, Dean Nolden. Please turn to Slide 3.
I'll now turn the call over to Tim.
Thanks, Drew. Good morning, everyone and thank you for joining us to discuss REV Group's third quarter results. So what happened in the past three months that caused us to fall short of our goals in the third quarter and reduce our full year earnings guidance by approximately 30%. A large portion of the change can be defined in one word, labor. Strategic decisions we made pertaining to labor during this fiscal year cannot be blamed entirely on our current situation with the tariffs, but they were a significant contributor.
I will provide some commentary on what has transpired and then Dean will follow with details on our Q3 financial performance, as well as a detailed financial analysis of our revised guidance. First and foremost, we believe the fundamentals that drive our business remained strong with the exception of softness in the RV market. Notwithstanding the overall strength of our markets and backlog, third quarter performance was well below our expectations and we now know that what occurred in the third quarter will flow into our fourth quarter.
Slide 3 identifies three primary drivers of underperformance, as well as some positives within the quarter, including the actions we are taking to improve our financial results and drive shareholder value. I'll walk you through the challenges we face in the quarter and order of the impact it had on our third quarter