Rev Group executives said Tuesday they expect supply chain disruptions and labor shortages to affect production rates through at least the remainder of 2022.
Chief Financial Officer Mark Skonieczny said shortages of critical parts and chassis negatively affected the manufacturer’s performance in its fiscal second quarter of 2022.
“We expect the current supply chain challenges will continue into calendar year 2023,” Skonieczny said, “versus our prior expectation for a recovery in the second half of the current fiscal year.”
The disruptions more heavily affected divisions other than Rev Group’s Recreation segment, the company said. Second-quarter net sales in the Recreation segment rose 1.3% from the second quarter of 2021 as second-quarter adjusted earnings rose 14.3% from the second quarter of 2021.
Rev Group said the segment’s positive performance came because of higher prices and a favorable mix of sales. Gains were partially offset, Rev Group said, by lower line rates and unit shipments related to supply chain disruptions and labor constraints. The manufacturer also cited inflationary pressures as a concern.
The Recreation segment’s backlog continued to increase, rising 38.5% from the second quarter of 2021 to $1.3027 billion. Rev Group said strong demand and order intake in several product categories drove backlog growth.
“Second-quarter results reflect continuing shortages of key components and lower chassis supply that limited new starts, throughput, and completions,” Rev Group President and CEO Rod Rushing said. “Within the quarter, we enacted additional pricing actions to align backlog and new orders with our current and future build costs. Backlog and demand for our vehicles remains strong and we believe the actions we are taking position us for improved results.”
