REV Group, Inc.
- Company Name
- REV Group, Inc.
- Stock Symbol
- Class Period
- Purchasers of REV Group publicly traded securities pursuant and/or traceable to the Company’s January 27, 2017 initial public offering
- Motion Deadline
- August 7, 2018
- Central District of California
The complaint charges REV Group and certain of its officers with violations of the Securities Act of 1933. REV Group designs, manufactures and distributes specialty vehicles in the United States, Canada, Europe, Africa, the Middle East and internationally.
On October 24, 2016, REV Group filed a Registration Statement with the SEC in connection with its initial public offering (“IPO”). After several amendments, the Registration Statement was declared effective by the SEC on January 26, 2017. On or about January 27, 2017, the Company completed its IPO, selling 12.5 million shares at $22 per share and raising approximately $275 million.
The complaint alleges that defendants made false and misleading statements and/or failed to disclose adverse information regarding REV Group’s business and prospects in the Registration Statement for the IPO. Contrary to defendants’ statements in the Registration Statement that the “business carries a high-quality backlog which enables strong visibility into future net sales which ranges from two to nine months depending on the product and market,” which would enable the Company “to more effectively plan and predict [its] business,” and their positive statements regarding the efficiency and low cost of the Company’s manufacturing and service capabilities, defendants failed to disclose that REV Group was unable to use its “strong visibility into future net sales” to “effectively plan” and manage its backlog of vehicles, and REV Group’s facilities were not operating efficiently or at a low enough cost to satisfy customer demand.
On June 6, 2018, after the close of the market, REV Group reported its second quarter 2018 financial results for the quarter ended April 30, 2018. The Company reported that its “results were below . . . expectations and were impacted by a number of factors,” including “near term commodity price inflation, supply chain constraints and shortfalls in [its] Commercial Segment.” According to the Company, “cost inflation across many of the commodities and services [it] buy[s] was significant in the quarter and due to the length of [its] backlogs [it was] not able to mitigate these increases.” The Company estimated the cost inflation would “have an approximate $19 million impact on [its] current fiscal year.” On this news, the price of REV Group shares fell $3.39 per share, or nearly 19%, to close at $14.52 per share on June 7, 2018 – 34% below the $22 per share IPO price.