The Complaint Alleges that REV Group, Inc. (REVG) Misstated Financials in its Offering Documents

According to the recently filed class action complaint, REV Group, Inc. (REVG) touted that it had achieved sustained growth across its operating metrics and that its ability to control costs and its unique visibility into future revenue streams were key competitive advantages that would allow it to grow margins and provide investors with predictable financial results. The complaint alleges that REV failed to disclose that its pre-IPO acquisitions resulted in an organizational structure that prevented it from operating efficiently and controlling costs. The complaint also alleges that REV did not have leverage over its suppliers, subjecting it to sudden and substantial cost increases on critical parts and materials.

REV's September 5, 2018 release of its 2018 third quarter results further rocked the company when it reduced its full year 2018 outlook and revealed "certain business units …. have underperformed." The company also revealed that it encountered production inefficiencies, which "delayed product shipments beyond the quarter within all three of segments."

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