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
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
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240207905147/en/
Mark Benfield Investor Relations (478) 822-2315
Mark.Benfield@blue-bird.com
Blue Bird (NASDAQ:BLBD)
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