Press Releases

BLUE BIRD FISCAL FIRST QUARTER RESULTS

FORT VALLEY, Ga.--(BUSINESS WIRE)-- Blue Bird Corporation (“Blue Bird”) (Nasdaq: BLBD), the leading independent designer and manufacturer of school buses, announced today fiscal first quarter 2015 results and reaffirmed full-year guidance.

 

First Quarter Highlights

  • Total unit sales of 1,824 buses, an 18% increase over the first quarter of 2014
  • Total net sales of $165.8 million, a 14% increase over the same period last year
  • Parts sales of $13.8 million, a 15% increase over the same period last year
  • Adjusted EBITDA of $7.4 million in the lowest volume quarter of the year. This represents a decrease of $2.2 million compared with prior year as we invested in winning new customers and growing sales. This is the second consecutive year of positive Adjusted EBITDA in the first quarter and is consistent with our plan and supplemental proxy statement
  • Net loss from continuing operations of $0.6 million compared to net income of $4.1 million last year, driven primarily by a $4.9 million increase in net interest expense
  • Reaffirming full-year estimates for net sales of $918-$940 million and adjusted EBITDA of $72-$75 million

“We are very excited to have recently completed the business combination transaction with Hennessy Capital Acquisition Corporation and to begin operating Blue Bird as a public company traded on Nasdaq,” said Phil Horlock, President and Chief Executive Officer of Blue Bird Corporation. “Our results in the first quarter reflect our commitment to growth as we delivered double-digit sales increases. Differentiating products such as our propane-powered school buses continued to bring in new customers, with over half of the propane bus customers in the quarter buying their first propane buses. We are positive on the outlook and are reaffirming full-year guidance of net sales of $918-$940 million and EBITDA of $72-$75 million.”

First Quarter 2015 Results

Seasonality

It is important to note when reviewing the first quarter results that the school bus industry is seasonal. The first quarter is historically the lowest volume quarter of the year.

Approximately one-third of annual new school bus registrations occur during the first half of the fiscal year (October-March) based on R.L. Polk registration data. The majority of Blue Bird’s annual sales and profits occur in the fiscal third and fourth quarters (April-September).

Sales

Total net sales for the first quarter of 2015 were $165.8 million, up 14% from last year.

This reflects an 18% increase in bus units sold. Bus unit sales were 1,824 units for the first quarter of fiscal 2015 compared to 1,545 units for the first quarter of fiscal 2014. Net bus sales of $152.0 million in the quarter were 13% higher compared to the prior year.

Net parts sales for the first quarter of 2015 were $13.8 million, up 15% from $12.1 million in the first quarter 2014.

Gross Profit

Gross profit in the first quarter was $19.5 million, down $1.0 million compared to the prior year period. This reduction was driven by lower gross profits in the bus segment partially offset by an increase in parts gross profits.

Bus gross profits for the quarter were $14.3 million compared to $16.0 million in 2014. The favorable profit impact of higher volumes, improved mix of propane bus sales and productivity was more than offset by higher investment to achieve conquest sales and other one-time factors. We do not expect the lower first quarter bus gross profits to result in a change to our full-year adjusted EBITDA guidance.

Gross profits for the parts segment during the quarter improved to $5.2 million. This is $0.7 million higher than the prior year period as a result of higher sales.

Adjusted EBITDA

Adjusted EBITDA for the quarter was $7.4 million, compared with $9.6 million a year ago, representing the second consecutive year of positive Adjusted EBITDA in the first quarter. Results were consistent with our plan and supplemental proxy statement. The $2.2 million reduction in adjusted EBITDA was the result of program incentives we utilized to win incremental new business, a non-recurring positive warranty credit that occurred in 2014, and additions to our sales team to drive growth. This was partially offset by higher sales volume, a higher mix of propane-powered buses, improved manufacturing productivity and lower material costs. Although adjusted EBITDA was down versus prior year in the first quarter, Blue Bird continues to expect full-year adjusted EBITDA to grow 7%-12% and come in at $72-75 million.

Net Income

Net loss from continuing operations during the first quarter was $0.6 million, compared with net income of $4.1 million in the same period last year. The largest contributor to this change was interest expense. Net interest expense was $5.1 million for the first quarter of fiscal 2015, an increase of $4.9 million over the first quarter last year. The increase was primarily due to average borrowing levels in the first quarter of fiscal 2015 of $234.9 million compared with $12.5 million in the first quarter of fiscal 2014. Blue Bird obtained a term loan facility in June 2014 to fund the dividend recapitalization, entering into a $235 million first lien credit agreement and a $60 million revolving credit agreement. Interest expense will continue to be substantially higher than prior year in the second and third quarters as well.

Other Highlights

  • Over half of the customers who purchased Blue Bird propane-powered buses were first time buyers of the product
  • Labor productivity for the first quarter improved about 2%
  • Introduced a new Type A bus through our joint venture with Micro Bird based on an all-new Ford chassis. Blue Bird is first in market with this product, which provides an approximate 20% improvement in fuel economy and the lowest operating costs in its segment
  • Introduced several new product features that differentiate Blue Bird including our new kid-friendly “E-Z” windows, durable sealed luggage compartments and a superior factory-installed air conditioning option

“Growing our customer base, improving our productivity and differentiating our buses with new features are helping to drive Blue Bird forward and deliver results,” Horlock said. “We are looking forward to a great first year as a public company as we deliver on our commitment to design, build, sell and service the world’s finest school bus.”

Blue Bird to Host Conference Call Today at 8:00 AM EST

Blue Bird will discuss its first quarter 2015 results and other related matters in a conference call at 8:00 AM EST 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 ten minutes prior to the start time at http://public.viavid.com/index.php?id=113333. The event number is 113333. For audio-only, participants should dial 877-407-4018. A replay of the webcast will be available approximately two hours after the call concludes via the same link. This will also be available on Blue Bird’s corporate website on the Investor Relations homepage.

About Blue Bird Corporation

Blue Bird is the leading independent designer and manufacturer of school buses, with more than 550,000 buses sold since its formation in 1927 and approximately 180,000 buses in operation today. Blue Bird’s longevity and reputation in the school bus industry have made it an iconic American brand. Blue Bird distinguishes itself from its principal competitors by its singular focus on the design, engineering, manufacture and sale of school buses and related parts. As the only manufacturer of chassis and body production specifically designed for school bus applications, Blue Bird is recognized as an industry leader for school bus innovation, safety, product quality/reliability/durability, operating costs and drivability. In addition, Blue Bird is the market leader in alternative fuel applications with its propane-powered and compressed natural gas-powered school buses. Blue Bird manufactures school buses at two facilities in Fort Valley, Georgia. Its Micro Bird joint venture operates a manufacturing facility in Drummondville, Quebec, Canada. Service and after-market parts are distributed from Blue Bird’s parts distribution center located in Delaware, Ohio.

Non-GAAP Financial Measures

Adjusted EBITDA should not be considered as an alternative to net income (loss) as an indicator of Blue Bird’s performance or as an alternative to any other measure prescribed by GAAP. There are limitations to using non-GAAP measures such as Adjusted EBITDA. Although Blue Bird believes that Adjusted EBITDA may enhance an evaluation of Blue Bird’s operating performance based on recent revenue generation and product/overhead cost control because they exclude the impact of prior decisions made about investment and financing, (i) other companies in Blue Bird’s industry may define Adjusted EBITDA margin differently than Blue Bird does 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 may exclude certain financial information that some may consider important in evaluating Blue Bird’s performance. Attached to this press release is a schedule that reconciles Adjusted EBITDA to Net Income.

Forward Looking Statements

This press release may include 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 regarding guidance and seasonality, 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 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
  • Ability to be successful in the Company’s appeal of the delisting determination by the staff of the Listing Qualifications Department of the NASDAQ Stock Market and to meet NASDAQ’s listing standards, including having the requisite number of stockholders
  • 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 HCAC or Blue Bird Corporation (available at www.sec.gov), could cause our actual results to differ materially from estimates or expectations reflected in such forward-looking statements.

 
School Bus Holdings, Inc. and Subsidiaries
Consolidated Statements of Operations and Comprehensive Income (Loss)
Three Months Ended January 3, 2015, December 28, 2013
 
 
(in thousands except for share data)      

Three Months Ended January
3, 2015

   

Increase/
Decrease

   

Three Months Ended
December 28, 2013

        (unaudited)    

$

   

%

    (unaudited)
                           
Net sales       $ 165,833       $ 19,840       13.6       $ 145,993  
Cost of goods sold         146,355         20,822       16.6         125,533  
Gross profit         19,478         (982 )     (4.8 )       20,460  
Operating expenses                          
Selling, general and administrative expenses         15,459         1,357       9.6         14,102  
                           
Operating profit (loss)         4,019         (2,339 )     (36.8 )       6,358  
Interest expense         (5,135 )       (4,860 )     1,767.3         (275 )
Interest income         32         7       28.0         25  
Other income (expense), net         11         (10 )     (47.6 )       21  
                           
Income (loss) before income taxes         (1,073 )       (7,202 )     (117.5 )       6,129  
Income tax (expense) benefit         431         2,584       (120.0 )       (2,153 )

Equity in net income (loss) of non-consolidated affiliate, net of tax

        18         (75 )     (80.6 )       93  
                           
Income (loss) from continued operations         (624 )       (4,693 )     (115.3 )       4,069  
Income (loss) from discontinued operations, net of tax         (4 )       2       (33.3 )       (6 )
                           
Net income (loss)       $ (628 )     $ (4,691 )     (115.5 )     $ 4,063  
                           
Other financial data:                          
Adjusted EBITDA       $ 7,402         (2,191 )     (22.8 )     $ 9,593  
Adjusted EBITDA margin         4.5 %     (2.1) pts.     (32.1 )       6.6 %
                           

The following provides an analysis of the results of operations of Blue Bird’s two reportable segments:

                         
                           

Net Sales by Segment

                         
Bus       $ 151,984         18,059       13.5       $ 133,925  
Parts       $ 13,849         1,781       14.8       $ 12,068  
                           
Cost of Goods Sold by Segment:                          
Bus       $ 137,682         19,762       16.8       $ 117,920  
Parts       $ 8,673         1,060       13.9       $ 7,613  
                           
                           
                           
Bus GM       $ 14,302       $ (1,703 )     (10.6 )     $ 16,005  
Parts GM       $ 5,176       $ 721       16.2       $ 4,455  
                                         
 
School Bus Holdings, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
January 3, 2015 and September 27, 2014
 
 
(in thousands except for share data)       As of January 3, 2015     As of September 27, 2014
Assets       (unaudited)     (unaudited)
Current assets              
Cash and cash equivalents       $ 23,485       $ 61,137  
Accounts receivable, net         14,296         21,215  
Inventories         68,916         71,300  
Other current assets         3,682         4,353  
Deferred tax asset         6,089         6,057  
Total current assets         116,468         164,062  
               
Property, plant, and equipment, net         28,305         29,949  
Goodwill         18,825         18,825  
Intangible assets, net         61,775         62,240  
Equity investment in affiliate         9,899         9,871  
Deferred tax asset         3,734         4,073  
Restricted cash         -         -  
Other assets         2,757         2,912  
Total assets       $ 241,763       $ 291,932  
               
Liabilities and Stockholder’s Deficit              
Current liabilities              
Accounts payable       $ 65,746       $ 94,294  
Accrued warranty costs—current portion         6,547         6,594  
Accrued expenses         23,615         37,319  
Deferred warranty income—current portion         4,143         4,117  
Other current liabilities         1,490         5,668  
Current portion of senior term debt         11,750         11,750  
Total current liabilities         113,291         159,742  
               
Long-term liabilities              
Long-term term debt         208,842         211,118  
Accrued warranty costs         8,679         8,965  
Deferred warranty income         7,932         7,886  
Other liabilities         12,314         12,136  
Accrued pension liability         39,535         40,881  
Total long-term liabilities         277,302         280,986  
               
Commitments and contingencies              
Stockholder’s deficit              
Common stock, $0.01 par value—100 shares authorized, issued and outstanding         1         1  
Additional paid-in capital         -         -  
Retained deficit         (102,857 )       (102,229 )
Accumulated other comprehensive loss         (45,974 )       (46,568 )
Total stockholder’s deficit         (148,830 )       (148,796 )
               
Total liabilities and stockholder’s deficit       $ 241,763       $ 291,932  
                       
 
School Bus Holdings Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
Three Months Ended January 3, 2015, December 28, 2013
 
 
(in thousands of dollars)      

Three Months Ended January
3, 2015

   

Three Months Ended
December 28, 2013

        (unaudited)     (unaudited)
Cash flows from operating activities              
Net (loss) income       $ (628 )     $ 4,063  
Loss from discontinued operations, net of tax         4         6  
Adjustments to reconcile net (loss) income to net cash provided by operating activities              
Depreciation and amortization         2,263         2,435  
Amortization of debt costs         809         25  
Equity in net income of affiliate         (18 )       (94 )
Impairment loss on fixed assets         -         -  
Loss on disposal of fixed assets         469         11  
Loss on sale of assets held for sale         -         -  
Deferred taxes         (21 )       969  
Change in uncertain tax position         -         -  
Provision for bad debt         (33 )       (19 )
Non-cash interest expense         -         -  
Amortization of deferred actuarial pension losses         913         701  
Changes in assets and liabilities              
Accounts receivable         6,952         3,894  
Inventories         2,384         (9,559 )
Other assets         684         497  
Accounts payable         (25,452 )       (8,943 )
Accrued expenses, pension and other liabilities         (19,276 )       (13,457 )
Total adjustments         (30,326 )       (23,540 )
               
Net cash used in continuing operations         (30,950 )       (19,471 )
Net cash used in discontinued operations         (4 )       (6 )
Total cash used in operating activities         (30,954 )       (19,477 )
               
Cash flows from investing activities              
Change in net investment in discounted leases         -         83  
Cash paid for fixed assets         (861 )       (613 )
Proceeds from sale of assets         -         23  
Restricted cash         -         362  
               
Total cash used in investing activities         (861 )       (145 )
               
Cash flows from financing activities              
Borrowings under the senior credit facility         -         837  
Payments under the senior credit facility         -         (906 )
Borrowings under the senior term loan         -         -  
Repayments under the subordinated term loans         (2,938 )       (542 )
Cash paid for capital leases         (27 )       (224 )
Cash paid for debt costs         (2,872 )       -  
Cash paid for dividends         -         -  
Change in advances collateralized by discounted leases         -         (83 )
               
Total cash used in financing activities         (5,837 )       (918 )
               
Change in cash and cash equivalents         (37,652 )       (20,540 )
Cash and cash equivalents at beginning of period         61,137         46,594  
               
Cash and cash equivalents at end of period       $ 23,485       $ 26,054  
               
Supplemental disclosures of cash flow information              
Cash paid for interest       $ 8,313       $ 236  
Cash received for interest         32         11  
Cash paid for income taxes         359         37  
Cash received for tax refund         -         48  
Non-cash investing and financing activity              
Capital lease acquisitions         -         166  
Change in accounts payable for capital additions to property, plant and equipment         224         94  
               
 
School Bus Holdings Inc. and Subsidiaries
Adjusted EBITDA Reconciliation
Three Months Ended January 3, 2015, December 28, 2013
               

(in thousands of dollars)

     

Three Months Ended January
3, 2015

   

Three Months Ended
December 28, 2013

        (unaudited)     (unaudited)
               
Net (loss) Income       $ (628 )     $ 4,063  
Loss (income) from discontinued operations, net of tax         (4 )       (6 )
Income from continuing operations         (624 )       4,069  
Interest expense         5,135         275  
Interest income         (32 )       (25 )
Income tax expense         (431 )       2,153  
Depreciation and amortization         2,264         2,450  
Restructuring costs         -         -  
Special compensation payment         -         -  
Management incentive compensation         -         631  
Tax expense, non-consolidated         10         40  
Business combination expenses         611         -  
Loss on disposal of fixed assets         469         -  
Adjusted EBITDA       $ 7,402       $ 9,593  
Adjusted EBITDA margin (percentage of net sales)         4.5 %       6.6 %
               

 

Blue Bird Corporation
Jeff Merten, 478-822-2496
Director, Investor Relations & New Business Development
Jeff.Merten@blue-bird.com

 

Posted on 2015-02-27

As a Blue Bird customer for over 25 years, our district has a solid Blue Bird fleet of the Vision, All American and Micro Bird buses. We choose to standardize our fleet to solely Blue Bird because of the quality of the buses. Our Blue Bird school buses are dependable, our drivers love driving the buses and we receive excellent parts and service support from Blue Bird and our local dealer, New York Bus Sales.
Fred Paye
Director of Transportation
Hilton Central School District
Hilton, NY

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