Net Sales of $317.7M, up 35% and GAAP Net Income of $26.2M, up $37.4M

All-Time Record Adj. EBITDA of $47.6M, up $51.1M with 2,129 Buses Sold, up 9%

FY2024 Adj. EBITDA Guidance Raised to $130M or 11% of Revenue

MACON, Ga.–(BUSINESS WIRE)– 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 Measures 1:    
Adjusted EBITDA$47.6 $51.1 
Adjusted Net Income$29.7 $39.4 
Adjusted Diluted EPS$0.91 $1.21 
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.

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:

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 SUBSIDIARIESCONDENSED 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 SUBSIDIARIESCONDENSED 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 SUBSIDIARIESCONDENSED 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 

Mark Benfield
Investor Relations
(478) 822-2315
Mark.Benfield@blue-bird.comSource: Blue Bird Corporation