Blue Bird Reports Fiscal 2024 First Quarter Record Results; Raises 2024 Guidance

Blue Bird Corporation (“Blue Bird”) (Nasdaq: BLBD), the leader in electric and low-emission school buses, announced today its fiscal 2024 first quarter results.

Highlights

(in millions except Unit Sales and EPS data)	Three Months Ended December 30, 2023			B/(W) Prior Year
Unit Sales		2,129			172
GAAP Measures:
Revenue	$	317.7		$	81.9
Net Income	$	26.2		$	37.4
Diluted EPS	$	0.81		$	1.16
Non-GAAP Measures1:
Adjusted EBITDA	$	47.6		$	51.1
Adjusted Net Income	$	29.7		$	39.4
Adjusted Diluted EPS	$	0.91		$	1.21
1 Reconciliation to relevant GAAP metrics shown below

"I am incredibly proud of our team’s continued progress in delivering record financial results in the first quarter,” said Phil Horlock, CEO of Blue Bird Corporation. “The Blue Bird team executed a rigorous transformational plan over the past two years to improve operations and throughput, control fixed costs, recover economics through pricing and expand our leadership position in alternative-powered buses. The market demand for our school buses remains very strong with approximately 4,600 units in our order backlog. Unit sales in the quarter were up 9% from a year ago and we grew revenue by an exceptional 35%, to $318 million. Adjusted EBITDA was an all-time quarterly record of $48 million, reflecting a 15% margin, which is an outstanding increase of $51 million compared with last year.

In expanding our leadership position in alternative-powered school buses, we achieved another record quarter of deliveries of our zero-emission EV buses. Additionally, at quarter-end, we had more than 400 electric school bus orders in our backlog. We saw strong growth in EV orders from the EPA’s Clean School Bus Program, which awarded nearly $1 billion in funding from Phase 1 of its $5 billion program in 2023. We are excited for new EV orders over the next year from the recently-announced Phase 2 (A and B) of the 5-year program, which provides at least $1.5 billion in grant and rebate funding for electric school buses. We’ve been working aggressively with our dealers and school districts in submitting applications and we are confident that continued, exciting growth is ahead for Blue Bird on the EV front!

Based on our strong start to the year and additional visibility into the 2024 operating environment, we have increased our full year financial guidance for Adjusted EBITDA to $130 million, with an 11% margin, which will be an all-time record for Blue Bird, and look forward to sustained profitable growth in the coming years, particularly as the global supply-chain recovery progresses.”

FY2024 Guidance Increased

“We are very pleased with the first quarter results, with an all-time record Adj. EBITDA margin,” said Razvan Radulescu, CFO of Blue Bird Corporation. “Our business transformation continues to yield great results, and ahead of plan. With better line-of-sight into 2024, we are raising our fiscal 2024 full-year guidance to Net Revenue to $1.15-1.25 Billion, Adj. EBITDA of $120-140 million and Adj. Free Cash Flow of $60-70 million. Additionally, we are reconfirming our long-term outlook of profitable growth towards ~$2 billion in revenues and Adjusted EBITDA margins of 12%+.”

Fiscal 2024 First Quarter Results

Net Sales

Net sales were $317.7 million for the first quarter of fiscal 2024, an increase of $81.9 million, or 34.8%, from the first quarter of last year. Bus sales increased $80.2 million, reflecting a 26.5% increase in average sales price per unit, resulting from pricing actions taken by management as well as product and customer mix changes, and an 8.8% increase in units booked. In the first quarter of fiscal 2024, 2,129 units were booked compared with 1,957 units booked for the same period in fiscal 2023. Additionally, Parts sales increased $1.7 million, or 7.7%, for the first quarter of fiscal 2024 compared with the first quarter of fiscal 2023. This increase is primarily attributed to price increases, driven by ongoing inflationary pressures, as well as higher fulfillment volumes and slight variations due to product and channel mix.

Gross Profit

First quarter gross profit of $63.6 million represented an increase of $56.1 million from the first quarter of last year. The increase was primarily driven by the $81.9 million increase in net sales, discussed above, as well as an increase of $25.8 million in cost of goods sold. The increase in cost of goods sold was primarily by the 8.8% increase in units booked, as well as increased raw material costs resulting from ongoing inflationary pressures.

Net Income

Net income was $26.2 million for the first quarter of fiscal 2024, which was a $37.4 million increase from the first quarter of last year. The increase was primarily driven by the $56.1 million increase in gross profit, discussed above. Partially offsetting this was the corresponding $11.4 million increase in income tax expense, as well as an increase of $8.8 million in SG&A, which was primarily due to an increase in labor costs.

Adjusted Net Income

Adjusted net income was $29.7 million, representing an increase of $39.4 million compared with the same period last year, primarily due to the $37.4 million increase in net income, discussed above.

Adjusted EBITDA

Adjusted EBITDA was $47.6 million, which was an increase of $51.1 million compared with the first quarter last year. This increase primarily results from the $37.4 million increase in net income as a result of the factors discussed above, as well as the corresponding $11.4 million increase in income tax expense.

Conference Call Details

Blue Bird will discuss its first quarter 2024 results in a conference call at 4:30 PM ET today. Participants may listen to the audio portion of the conference call either through a live audio webcast on the Company's website or by telephone. The slide presentation and webcast can be accessed via the Investor Relations portion of Blue Bird's website at www.blue-bird.com.

• Webcast participants should log on and register at least 15 minutes prior to the start time on the Investor Relations homepage of Blue Bird’s website at http://investors.blue-bird.com. Click the link in the events box on the Investor Relations landing page.

• Participants desiring audio only should dial 404-975-4839 or 833-470-1428

A replay of the webcast will be available approximately two hours after the call concludes via the same link on Blue Bird’s website.

About Blue Bird Corporation

Blue Bird (NASDAQ: BLBD) is recognized as a technology leader and innovator of school buses since its founding in 1927. Our dedicated team members design, engineer and manufacture school buses with a singular focus on safety, reliability, and durability. School buses carry the most precious cargo in the world – 25 million children twice a day – making them the most trusted mode of student transportation. The company is the proven leader in low- and zero-emission school buses with more than 20,000 propane, natural gas, and electric powered buses in operation today. Blue Bird is transforming the student transportation industry through cleaner energy solutions. For more information on Blue Bird's complete product and service portfolio, visit www.blue-bird.com.

Key Non-GAAP Financial Measures We Use to Evaluate Our Performance

This press release includes the following non-GAAP financial measures “Adjusted EBITDA,” "Adjusted EBITDA Margin," "Adjusted Net Income," "Adjusted Diluted Earnings per Share," “Free Cash Flow” and “Adjusted Free Cash Flow”. Adjusted EBITDA and Free Cash Flow are financial metrics that are utilized by management and the board of directors to determine (a) the annual cash bonus payouts, if any, to be made to certain members of management based upon the terms of the Company’s Management Incentive Plan, and (b) whether the performance criteria have been met for the vesting of certain equity awards granted annually to certain members of management based upon the terms of the Company’s Omnibus Equity Incentive Plan. Additionally, consolidated EBITDA, which is an adjusted EBITDA metric defined by our Amended Credit Agreement that could differ from Adjusted EBITDA discussed above as the adjustments to the calculations are not uniform, is used to determine the Company's ongoing compliance with several financial covenant requirements, including being utilized in the denominator of the calculation of the Total Net Leverage Ratio. Accordingly, management views these non-GAAP financial metrics as key for the above purposes and as a useful way to evaluate the performance of our operations as discussed further below.

Adjusted EBITDA is defined as net income or loss prior to interest income; interest expense including the component of operating lease expense (which is presented as a single operating expense in selling, general and administrative expenses in our U.S. GAAP financial statements) that represents interest expense on lease liabilities; income taxes; and depreciation and amortization including the component of operating lease expense (which is presented as a single operating expense in selling, general and administrative expenses in our U.S. GAAP financial statements) that represents amortization charges on right-of-use lease assets; as adjusted for certain non-cash charges or credits that we may record on a recurring basis such as share-based compensation expense and unrealized gains or losses on certain derivative financial instruments; net gains or losses on the disposal of assets as well as certain charges such as (i) significant product design changes; (ii) transaction related costs; (iii) discrete expenses related to major cost cutting and/or operational transformation initiatives; or (iv) costs directly attributed to the COVID-19 pandemic. While certain of the charges that are added back in the Adjusted EBITDA calculation, such as transaction related costs and operational transformation and major product redesign initiatives, represent operating expenses that may be recorded in more than one annual period, the significant project or transaction giving rise to such expenses is not considered to be indicative of the Company’s normal operations. Accordingly, we believe that these, as well as the other credits and charges that comprise the amounts utilized in the determination of Adjusted EBITDA described above, should not be used in evaluating the Company’s ongoing annual operating performance.

We define Adjusted EBITDA Margin as Adjusted EBITDA as a percentage of net sales. Adjusted EBITDA and Adjusted EBITDA Margin are not measures of performance defined in accordance with U.S. GAAP. The measures are used as a supplement to U.S. GAAP results in evaluating certain aspects of our business, as described below.

We believe that Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Diluted Earnings per Share are useful to investors in evaluating our performance because the measures consider the performance of our ongoing operations, excluding decisions made with respect to capital investment, financing, and certain other significant initiatives or transactions as outlined in the preceding paragraph. We believe the non-GAAP measures offer additional financial metrics that, when coupled with the GAAP results and the reconciliation to GAAP results, provide a more complete understanding of our results of operations and the factors and trends affecting our business.

Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income and Adjusted Diluted Earnings per Share should not be considered as alternatives to net income or GAAP earnings per share as an indicator of our performance or as alternatives to any other measure prescribed by GAAP as there are limitations to using such non-GAAP measures. Although we believe the non-GAAP measures may enhance an evaluation of our operating performance based on recent revenue generation and product/overhead cost control because they exclude the impact of prior decisions made about capital investment, financing, and other expenses, (i) other companies in Blue Bird’s industry may define Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Diluted Earnings per Share differently than we do and, as a result, they may not be comparable to similarly titled measures used by other companies in Blue Bird’s industry, and (ii) Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Diluted Earnings per Share exclude certain financial information that some may consider important in evaluating our performance.

We compensate for these limitations by providing disclosure of the differences between Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Diluted Earnings per Share and GAAP results, including providing a reconciliation to GAAP results, to enable investors to perform their own analysis of our operating results.

Our measures of “Free Cash Flow” and "Adjusted Free Cash Flow" are used in addition to and in conjunction with results presented in accordance with GAAP and free cash flow and adjusted free cash flow should not be relied upon to the exclusion of GAAP financial measures. Free cash flow and adjusted free cash flow reflect an additional way of viewing our liquidity that, when viewed with our GAAP results, provides a more complete understanding of factors and trends affecting our cash flows. We strongly encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.

We define Free Cash Flow as total cash provided by/used in operating activities as adjusted for net cash paid for the acquisition of fixed assets and intangible assets. We use Free Cash Flow, and ratios based on Free Cash Flow, to conduct and evaluate our business because, although it is similar to cash flow from operations, we believe it is a more conservative measure of cash flow since purchases of fixed assets and intangible assets are a necessary component of ongoing operations.

Forward Looking Statements

This press release includes forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to expectations for future financial performance, business strategies or expectations for our business. Specifically, forward-looking statements include statements in this press release regarding guidance, seasonality, product mix and gross profits and may include statements relating to:

• Inherent limitations of internal controls impacting financial statements
• Growth opportunities
• Future profitability
• Ability to expand market share
• Customer demand for certain products
• Economic conditions (including tariffs) that could affect fuel costs, commodity costs, industry size and financial conditions of our dealers and suppliers
• Labor or other constraints on the Company’s ability to maintain a competitive cost structure
• Volatility in the tax base and other funding sources that support the purchase of buses by our end customers
• Lower or higher than anticipated market acceptance for our products
• Other statements preceded by, followed by or that include the words “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “target” or similar expressions

These forward-looking statements are based on information available as of the date of this press release, and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. The factors described above, as well as risk factors described in reports filed with the SEC by us (available at www.sec.gov), could cause our actual results to differ materially from estimates or expectations reflected in such forward-looking statements.

BLUE BIRD CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(in thousands of dollars, except for share data)	December 30, 2023				September 30, 2023
Assets
Current assets
Cash and cash equivalents	$	77,296			$	78,988
Accounts receivable, net		11,107				12,574
Inventories		142,457				135,286
Other current assets		12,485				9,215
Total current assets	$	243,345			$	236,063
Property, plant and equipment, net	$	95,563			$	95,101
Goodwill		18,825				18,825
Intangible assets, net		44,956				45,424
Equity investment in affiliate		24,007				17,619
Deferred tax assets		1,001				2,182
Finance lease right-of-use assets		858				1,034
Other assets		2,723				1,518
Total assets	$	431,278			$	417,766
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$	113,911			$	137,140
Warranty		6,601				6,711
Accrued expenses		32,454				32,894
Deferred warranty income		8,351				8,101
Finance lease obligations		980				583
Other current liabilities		20,500				24,391
Current portion of long-term debt		5,000				19,800
Total current liabilities	$	187,797			$	229,620
Long-term liabilities
Revolving credit facility	$	36,220			$	—
Long-term debt		93,486				110,544
Warranty		8,682				8,723
Deferred warranty income		15,767				15,022
Deferred tax liabilities		2,516				2,513
Finance lease obligations		445				987
Other liabilities		8,522				7,955
Pension		2,266				2,404
Total long-term liabilities	$	167,904			$	148,148
Guarantees, commitments and contingencies
Stockholders' equity
Preferred stock, $0.0001 par value, 10,000,000 shares authorized, 0 shares outstanding at December 30, 2023 and September 30, 2023	$	—			$	—
Common stock, $0.0001 par value, 100,000,000 shares authorized, 32,198,592 and 32,165,225 shares outstanding at December 30, 2023 and September 30, 2023, respectively		3				3
Additional paid-in capital		187,159				177,861
Accumulated deficit		(29,550	)			(55,700	)
Accumulated other comprehensive loss		(31,753	)			(31,884	)
Treasury stock, at cost, 1,782,568 shares at December 30, 2023 and September 30, 2023		(50,282	)			(50,282	)
Total stockholders' equity	$	75,577			$	39,998
Total liabilities and stockholders' equity	$	431,278			$	417,766

BLUE BIRD CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
	Three Months Ended
(in thousands of dollars except for share data)	December 30, 2023				December 31, 2022
Net sales	$	317,660			$	235,732
Cost of goods sold		254,102				228,275
Gross profit	$	63,558			$	7,457
Operating expenses
Selling, general and administrative expenses		25,602				16,832
Operating profit (loss)	$	37,956			$	(9,375	)
Interest expense		(3,631	)			(4,196	)
Interest income		1,088				—
Other expense, net		(1,221	)			(236	)
Loss on debt refinancing or modification		(1,558	)			(537	)
Income (loss) before income taxes	$	32,634			$	(14,344	)
Income tax (expense) benefit		(8,446	)			2,981
Equity in net income of non-consolidated affiliate		1,962				69
Net income (loss)	$	26,150			$	(11,294	)
Earnings (loss) per share:
Basic weighted average shares outstanding		32,170,779				32,026,311
Diluted weighted average shares outstanding		32,429,127				32,026,311
Basic earnings (loss) per share	$	0.81			$	(0.35	)
Diluted earnings (loss) per share	$	0.81			$	(0.35	)

BLUE BIRD CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
	Three Months Ended
(in thousands of dollars)	December 30, 2023				December 31, 2022
Cash flows from operating activities
Net income (loss)	$	26,150			$	(11,294	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization expense		3,618				3,361
Non-cash interest expense		132				417
Share-based compensation expense		2,051				589
Equity in net income of non-consolidated affiliate		(1,962	)			(69	)
Dividend from equity investment in affiliate		2,991				—
Loss on disposal of fixed assets		4				—
Deferred income tax expense (benefit)		1,143				(2,986	)
Amortization of deferred actuarial pension losses		172				299
Loss on debt refinancing or modification		1,558				537
Changes in assets and liabilities:
Accounts receivable		1,467				3,409
Inventories		(7,171	)			13,857
Other assets		(3,095	)			(5,227	)
Accounts payable		(23,103	)			16,572
Accrued expenses, pension and other liabilities		(3,738	)			461
Total adjustments	$	(25,933	)		$	31,220
Total cash provided by operating activities	$	217			$	19,926
Cash flows from investing activities
Cash paid for fixed assets	$	(2,904	)		$	(1,146	)
Proceeds from sale of fixed assets		—				—
Total cash used in investing activities	$	(2,904	)		$	(1,146	)
Cash flows from financing activities
Revolving credit facility borrowings	$	36,220			$	5,000
Revolving credit facility repayments		—				(20,000	)
Term loan borrowings - new credit agreement		100,000				—
Term loan repayments - previous credit agreement		(131,800	)			(4,950	)
Principal payments on finance leases		(145	)			(141	)
Cash paid for debt costs		(3,128	)			(3,211	)
Repurchase of common stock in connection with stock award exercises		(301	)			(57	)
Cash received from stock option exercises		149				—
Total cash provided by (used in) financing activities	$	995			$	(23,359	)
Change in cash, cash equivalents, and restricted cash		(1,692	)			(4,579	)
Cash, cash equivalents, and restricted cash at beginning of period		78,988				10,479
Cash, cash equivalents, and restricted cash at end of period	$	77,296			$	5,900
Supplemental disclosures of cash flow information
Cash paid or received during the period:
Interest paid, net of interest received	$	1,807			$	3,170
Income tax paid (received), net of tax refunds		2				(90	)
Non-cash investing and financing activities:
Changes in accounts payable for capital additions to property, plant and equipment	$	953			$	672
Accrue debt modification costs		—				61
Right-of-use assets obtained in exchange for operating lease obligations		1,241				199
Warrants issued for equity investment in affiliate		7,416				—

Reconciliation of Net Income (Loss) to Adjusted EBITDA
	Three Months Ended
(in thousands of dollars)	December 30, 2023				December 31, 2022
Net income (loss)	$	26,150			$	(11,294	)
Adjustments:
Interest expense, net (1)		2,655				4,289
Income tax expense (benefit)		8,446				(2,981	)
Depreciation, amortization, and disposals (2)		4,210				3,815
Operational transformation initiatives		—				800
Share-based compensation expense		2,051				589
Stockholder transaction costs		1,221				—
Loss on debt refinancing or modification		1,558				537
Other		(82	)			—
Subtotal (Adjusted EBITDA as previously presented)	$	46,209			$	(4,245	)
Micro Bird Holdings, Inc. total interest expense, net; income tax expense or benefit; depreciation expense and amortization expense		1,395				709
Adjusted EBITDA	$	47,604			$	(3,536	)
Adjusted EBITDA margin (percentage of net sales)		15.0	%			(1.5	)%

___________________

(1) Includes $0.1 million for both fiscal periods, representing interest expense on operating lease liabilities, which are a component of lease expense and presented as a single operating expense in selling, general and administrative expenses on our Condensed Consolidated Statements of Operations. (2) Includes $0.6 million and $0.4 million for the three months ended December 30, 2023 and December 31, 2022, respectively, representing amortization charges on right-of-use lease assets, which are a component of lease expense and presented as a single operating expense in selling, general and administrative expenses on our Condensed Consolidated Statements of Operations.

Reconciliation of Free Cash Flow to Adjusted Free Cash Flow
	Three Months Ended
(in thousands of dollars)	December 30, 2023				December 31, 2022
Net cash provided by operating activities	$	217			$	19,926
Cash paid for fixed assets		(2,904	)			(1,146	)
Free cash flow	$	(2,687	)		$	18,780
Cash paid for operational transformation initiatives		—				800
Cash paid for stockholder transaction costs		1,221				—
Cash paid for other items		(82	)			—
Adjusted free cash flow		(1,548	)			19,580

Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss)
	Three Months Ended
(in thousands of dollars)	December 30, 2023				December 31, 2022
Net income (loss)	$	26,150			$	(11,294	)
Adjustments, net of tax benefit or expense (1)
Operational transformation initiatives		—				632
Share-based compensation expense		1,518				465
Stockholder transaction costs		904				—
Loss on debt modification		1,153				424
Other		(61	)			—
Adjusted net income (loss), non-GAAP	$	29,664			$	(9,773	)

___________________

(1) Amounts are net of estimated tax rates of 26% for the three months ended December 30, 2023, and 21% for the three months ended December 31, 2022.

Reconciliation of Diluted EPS to Adjusted Diluted EPS
	Three Months Ended
	December 30, 2023			December 31, 2022
Diluted earnings (loss) per share	$	0.81		$	(0.35	)
One-time charge adjustments, net of tax benefit or expense		0.10			0.05
Adjusted diluted earnings (loss) per share, non-GAAP	$	0.91		$	(0.30	)
Adjusted weighted average dilutive shares outstanding		32,429,127			32,243,213

 

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The Blue Bird Stock at the time of publication of the news with a raise of +1,38 % to 31,60USD on Nasdaq stock exchange (07. Februar 2024, 21:50 Uhr).