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Core Insights - Blue Bird (BLBD) reported quarterly earnings of $1.32 per share, exceeding the Zacks Consensus Estimate of $0.97 per share, and showing an increase from $0.77 per share a year ago, resulting in an earnings surprise of +36.08% [1] - The company achieved revenues of $409.37 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 7.73% and up from $350.21 million year-over-year [2] - Blue Bird shares have increased approximately 39.3% since the beginning of the year, outperforming the S&P 500's gain of 12.3% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.86 on revenues of $350 million, while for the current fiscal year, the estimate is $4.15 on revenues of $1.57 billion [7] - The estimate revisions trend for Blue Bird was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Automotive - Domestic industry, to which Blue Bird belongs, is currently ranked in the top 36% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Another company in the same industry, REV Group (REVG), is expected to report quarterly earnings of $0.78 per share, reflecting a year-over-year change of +52.9% with revenues projected at $647.12 million, up 8.2% from the previous year [9]

Financial Data and Key Metrics Changes - Blue Bird achieved record sales and adjusted EBITDA for Fiscal 2025, with adjusted EBITDA of $221 million, representing 15% of revenue, which is $38 million higher than the previous year [7][20][21] - Total revenue for Fiscal 2025 reached $1.48 billion, an increase of $133 million compared to the prior year [7][19] - Adjusted net income for the fourth quarter was $43.4 million, a 68% improvement year-over-year [17] Business Line Data and Key Metrics Changes - The company sold 9,409 buses in Fiscal 2025, with an average bus revenue per unit of $146,000, up $8,000 from the previous year [7][19] - Electric vehicle (EV) sales totaled 901 units for the year, marking a 30% increase compared to the previous year [7][19] - Parts revenue for the year remained flat at $103 million, indicating strong demand due to an aging fleet [19] Market Data and Key Metrics Changes - The backlog at the end of Q4 was 3,100 units, which included 680 EVs, but has since increased to nearly 4,000 units [8][16] - Year-over-year selling prices for buses increased by almost $8,300 per unit, reflecting pricing actions and tariff recovery [9] - The company maintains a strong position in the alternative powered vehicles segment, with all powered buses representing 56% of mixed unit sales for the year [9] Company Strategy and Development Direction - Blue Bird is focusing on long-term manufacturing strategies, including automation and production efficiency improvements [4][6] - The company plans to invest in projects with clear returns and aims to maintain a disciplined pricing strategy [5][6] - The outlook for EVs remains optimistic, with expectations of stable demand supported by government funding programs [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating tariff volatility and maintaining margin-neutral outcomes [7] - The company anticipates a heavy replacement cycle in the school bus market, driven by an aging fleet and pent-up demand [9] - Management remains cautious about the impact of tariffs and material costs but expects strong demand to continue [24] Other Important Information - Blue Bird ended the year with $229 million in cash and a liquidity of $371 million, reflecting a strong financial position [22][23] - The company has repurchased $40 million worth of shares during the year and plans to continue returning value to shareholders [23][30] Q&A Session Summary Question: Importance of federal EV bus program for Fiscal 2026 guidance - Management indicated that Fiscal 2026 guidance does not rely on rounds four and five of the federal EV program, with a strong backlog supporting the outlook [39][41] Question: Order season and demand outlook - Management acknowledged that while the order season typically picks up after the Christmas break, they are confident in the underlying demand fundamentals [43][45] Question: Commercial chassis project details - Management confirmed that prototypes are being tested and received positively by customers, indicating potential for market entry [47][48] Question: EV backlog and state incentive programs - Management noted that New Jersey's updated incentive program reflects a trend of increasing state-level funding for EVs, which is expected to continue [70][72] Question: Pricing dynamics and guidance for first half versus second half - Management explained that pricing stability and the new price increase will impact the second half of the fiscal year, with a ramp expected in production [60][80]

Financial Data and Key Metrics Changes - Blue Bird achieved record sales and Adjusted EBITDA for fiscal 2025, with Adjusted EBITDA at $221 million, representing 15% of revenue, which is $38 million higher than the previous year [7][20][34] - Total revenue for fiscal 2025 reached $1.48 billion, an increase of $133 million compared to the prior year [7][20] - Free cash flow for the year was $153 million, marking a significant achievement [8][22] Business Line Data and Key Metrics Changes - The company sold 9,409 buses in fiscal 2025, with an average bus revenue per unit of $146,000, up $8,000 from the previous year [7][19] - Electric vehicle (EV) sales totaled 901 units, representing a 30% increase year-over-year [7][19] - Parts revenue remained stable at $103 million, reflecting strong demand due to an aging fleet [19] Market Data and Key Metrics Changes - The backlog at the end of fiscal 2025 was 3,100 units, which is expected to increase to nearly 4,000 units, including 850 EVs [4][16] - Year-over-year selling prices for buses increased by approximately $8,300 per unit, driven by pricing actions and tariff recovery [9][19] - The company noted that the fleet is aging, leading to a heavy replacement cycle and pent-up demand in the market [8][9] Company Strategy and Development Direction - Blue Bird is focusing on long-term manufacturing strategies, including automation and production efficiency improvements [4][6] - The company aims to maintain its leadership in alternative powered vehicles, particularly in the EV segment, with a strong outlook for future demand [5][10] - Investment in projects with clear returns is a priority, with plans to enhance manufacturing capabilities and product offerings [6][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating tariff volatility and maintaining margin-neutral outcomes [7][11] - The outlook for EVs remains optimistic, supported by government funding programs and stable demand [10][34] - The company anticipates a strong demand driven by an aging fleet and stable pricing, despite some headwinds from tariffs and material costs [22][23] Other Important Information - Blue Bird's liquidity reached a record $371 million, with $229 million in cash at year-end [22] - The company plans to invest up to $200 million in manufacturing capabilities over the next two years while also returning value to shareholders through stock buybacks [28][29] Q&A Session Summary Question: Importance of federal EV bus program for fiscal 2026 guidance - Management indicated that fiscal 2026 guidance does not rely on federal funding rounds four and five, with a strong backlog supporting the outlook for 750 EV sales [37][39] Question: Order season and demand outlook - Management acknowledged strong fundamentals and a stable demand outlook, with confidence in production capabilities to meet potential increases in demand [41][42] Question: Commercial chassis project details - Prototypes are undergoing testing, and initial customer feedback has been positive, indicating a favorable market reception [44][45] Question: EV backlog and state incentive programs - Management confirmed an increase in EV backlog and noted that state-level funding programs are becoming increasingly significant drivers of demand [65][68] Question: Competitive dynamics in the school bus market - Management stated it is too early to assess any significant competitive shifts in the market, with no meaningful changes observed so far [83][88]

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Financial Data and Key Metrics Changes - Blue Bird achieved record sales and adjusted EBITDA for Fiscal 2025, with adjusted EBITDA of $221 million, representing 15% of revenue, which is $38 million higher than the previous year [6][18][33] - Total revenue for Fiscal 2025 reached $1.48 billion, an increase of $133 million compared to the prior year [6][18] - The company sold 9,409 buses in 2025, with an average bus revenue per unit of $146,000, up $8,000 from the previous year [6][17] Business Line Data and Key Metrics Changes - Bus net revenue for the year was $1.377 billion, an increase of $134 million or 11% year-over-year [12][18] - Electric vehicle (EV) sales totaled 901 units, a 30% increase from the previous year, representing 9.6% of total volume [6][17] - Parts revenue remained flat at $103 million, maintaining strong demand due to an aging fleet [17][18] Market Data and Key Metrics Changes - The backlog at the end of Q4 was 3,100 units, including 680 EVs, but has since increased to nearly 4,000 units, with over 850 EVs [7][14] - Year-over-year selling prices for buses increased by nearly $8,300 per unit, reflecting pricing actions and tariff recovery [8][12] - The company noted that the fleet is aging, leading to a heavy replacement cycle and pent-up demand in the market [8][22] Company Strategy and Development Direction - Blue Bird is focusing on long-term manufacturing strategies, including automation and production efficiency improvements [4][5] - The company plans to invest in projects with clear returns and is optimistic about the EV market, particularly in the school bus sector [5][9] - The strategy includes maintaining pricing discipline and managing tariff impacts to achieve margin-neutral outcomes [6][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating tariff volatility and highlighted a strong outlook for EVs, supported by state mandates and funding programs [9][22] - The company anticipates a significant increase in EV sales in the second half of Fiscal 2026, similar to the previous year [22][23] - Management remains cautious about the operating environment due to unpredictable tariffs and material costs but maintains a positive long-term outlook [21][22] Other Important Information - Blue Bird ended the year with $229 million in cash and a record liquidity of $371 million [20][21] - The company repurchased $40 million worth of shares during the year and plans to continue returning value to shareholders [20][28] - The upcoming commercial chassis products are expected to contribute to growth, with positive early feedback from customers [40][41] Q&A Session Summary Question: Importance of federal EV bus program for Fiscal 2026 guidance - Management indicated that the Fiscal 2026 guidance does not rely on rounds four and five of the federal EV program, with a strong backlog supporting the outlook [35][36] Question: Order season and demand outlook - Management acknowledged a conservative stance until post-holiday orders are received, but noted strong fundamentals supporting demand [38][39] Question: Commercial chassis project details - The commercial chassis prototypes are undergoing testing, with positive initial reactions from customers [40][41] Question: EV backlog and state incentive programs - Management confirmed an increase in EV backlog and noted that state-level funding programs are becoming more significant drivers of demand [48][49] Question: Competitive dynamics in the school bus market - Management stated it is too early to determine any significant competitive shifts in the school bus market due to tariffs affecting other segments [53][54]

Sales and Market Performance - In fiscal 2025, the company sold 9,409 buses globally, with approximately 92.6% sold through distributors and dealers[37]. - The company has delivered its 2,000th electric school bus in fiscal 2024, indicating strong demand for electric vehicle offerings[32]. - The U.S. and Canadian school bus industry is projected to achieve approximately 31,000 unit sales in 2025, reflecting a 30.8% increase compared to 2024[48]. - In fiscal 2025, the company sold 9,409 Type C and Type D buses, with Type C buses accounting for 82% of unit sales[71]. - The company sold 5,275 alternative powered buses in fiscal 2025, maintaining a market leadership position with approximately 64% of all alternative powered school buses sold from fiscal 2015 through fiscal 2025[66]. - The company experienced a 28.0% increase in sales of Type C and Type D electric vehicles in fiscal 2025, with 901 units sold[67]. - New bus orders remained robust, with a backlog of approximately 4,800 units as of September 28, 2024, despite selling 9,000 units in fiscal 2024[211]. Financial Performance and Investments - Parts sales represented 7.0% of the company's net sales in fiscal 2025, highlighting the importance of the Parts segment[44]. - The company received an approximate $80 million grant from the U.S. Department of Energy to convert a manufacturing site for diesel powered motorhomes into a facility for all powertrains, including electric[41]. - The company has updated its plans to increase investment in a new manufacturing facility to expand production capabilities for electric and low-emission vehicles[41]. - The company has received approximately $965 million in funding from the EPA's Clean School Bus Program in October 2022, with over 2,300 zero- and low-emission school buses ordered[57]. - The cumulative total return of the company's stock increased to 481 by September 27, 2025, compared to 100 at the start of the period on October 3, 2020[199]. Supply Chain and Production Challenges - The company has faced significant supplier shortages due to ongoing supply chain disruptions since the latter half of fiscal 2021, impacting production processes for certain units scheduled for delivery[79]. - The school bus industry has been operating below its historical long-term average of approximately 30,500 unit sales per year due to supply chain constraints since the pandemic[54]. - Supply chain disruptions continued into fiscal 2025, impacting the number and mix of school buses produced and sold, but management's actions allowed for consistent production to fulfill sales orders[210]. - The company continues to monitor supplier operations to ensure sufficient parts and supplies for production needs[213]. - The company has experienced significant supply chain constraints starting in the second half of fiscal 2021, which adversely impacted operations and results due to higher purchasing costs and manufacturing inefficiencies[208]. Safety and Compliance - The company is implementing industry-first safety features, including three-point seat belts for all student passengers starting in fiscal 2025[29]. - Compliance with various legal, environmental, health, and safety requirements adds to manufacturing costs, and failure to comply could lead to substantial regulatory costs[85]. - The company has invested in a safety and health department staffed with trained medical personnel to prioritize employee safety[102]. Employee and Labor Relations - The company employs 2,012 employees, with 2,008 being full-time as of September 27, 2025[103]. - A three-year collective bargaining agreement was executed with the United Steel Workers Union covering more than 1,580 employees as of September 27, 2025[104]. - The company has made significant investments in talent development, recognizing that employee growth is essential for continued success[100]. Risks and Regulatory Environment - The ongoing supply chain disruptions due to geopolitical conflicts, particularly the Russia-Ukraine war, have led to increased costs for critical components and limited access to inventory, impacting the company's ability to fulfill orders[113]. - Economic conditions significantly influence demand for school buses, with potential reductions in orders if municipal budgets deteriorate or housing prices decline[115]. - The company faces risks of product liability claims and recalls, which could lead to significant costs and adversely affect financial condition and cash flows[135]. - Recent trade policies and tariffs have increased costs for components sourced from Canada, China, and Mexico, potentially impacting pricing strategies and sales volumes[125]. Manufacturing and Operational Efficiency - The company launched a state-of-the-art 60,000 square foot paint facility in July 2019, designed to enhance manufacturing efficiency and environmental sustainability[33]. - The company operates a fabrication plant and an integrated chassis manufacturing and body assembly plant in Fort Valley, Georgia, with approximately 1.5 million square feet of owned facilities[82]. - The company is expanding its manufacturing capabilities in Fort Valley, Georgia, to support the production of electric and low-emission vehicles, backed by an $80 million grant from the DOE[63]. Cybersecurity and Risk Management - The company has a cybersecurity program in place, but there is no assurance it will prevent all threats or that insurance will cover all costs related to incidents[169]. - The cybersecurity risk management program includes regular vulnerability scans, penetration tests, and a Business Continuity Plan to identify potential threats and impacts[181]. - The Audit Committee oversees the implementation of the cybersecurity risk management program and receives quarterly updates on strategic objectives and key risks[185]. Shareholder and Stock Information - The company does not currently intend to pay cash dividends on its common stock, relying on appreciation for stockholder returns[170]. - The company has authorized a share repurchase program for up to $60 million of outstanding shares, expiring January 31, 2026, and a second program for up to $100 million, expiring January 1, 2028[200][201]. - As of September 27, 2025, the company repurchased a total of 12,387 shares at an average price of $43.01 per share, with a total approximate dollar value of shares that may yet be purchased under the plans amounting to $110.6 million[204].

BLUE BIRD CORPORATION (NASDAQ: BLBD) FY2025 Fourth Quarter & Full Year Results Earnings Conference Call November 24, 2025 Agenda | Introductions & | Mark Benfield | | --- | --- | | Forward-Looking Statements | Executive Director, Investor Relations | | Key Results and Highlights | John Wyskiel | | | President & CEO | | Financial Results | Razvan Radulescu | | | CFO | | Outlook | John Wyskiel | | | President & CEO | | Q&A | Group | This presentation includes forward-looking statements, including statements r ...

Financial Performance - Net sales for fiscal 2025 reached $1,480.1 million, an increase of $132.9 million or 9.9% compared to fiscal 2024[13] - Adjusted EBITDA for fiscal 2025 was $221.3 million, reflecting an increase of $38.4 million compared to the prior year, with a margin of 15%[19] - Net income for fiscal 2025 was $127.7 million, an increase of $22.2 million from the previous year[17] - Adjusted net income for fiscal 2025 was $144.1 million, up $28.8 million compared to fiscal 2024[18] - Gross profit for fiscal 2025 was $303.5 million, an increase of $47.4 million from the prior year[16] - For Q4 fiscal 2025, net sales were $409.4 million, up $59.2 million or 16.9% from Q4 fiscal 2024[6] - Net income for the twelve months ended September 27, 2025, was $127.720 million, an increase of 20.9% from $105.547 million in 2024[38] - Adjusted EBITDA for the twelve months ended September 27, 2025, reached $221,336,000, up 21% from $182,909,000 in the previous year, with an adjusted EBITDA margin of 15.0%[42] Sales and Production - The company sold 9,409 buses in fiscal 2025, an increase of 409 units or 4.5% from the previous year[14] - The company delivered a record 901 electric-powered buses in fiscal 2025, with a backlog of approximately 680 EV buses[4] - The average sales price per bus increased by 6.0% in fiscal 2025, contributing to the overall revenue growth[14] - Net sales for the three months ended September 27, 2025, were $409.365 million, an increase of 16.8% compared to $350.212 million for the same period in 2024[38] Earnings and Cash Flow - Basic earnings per share for the three months ended September 27, 2025, were $1.15, up from $0.76 in the same period of 2024, marking a 51.3% increase[38] - Adjusted diluted earnings per share for the twelve months ended September 27, 2025, was $4.38, compared to $3.46 in the previous year, marking a 27% increase[49] - Free cash flow for the three months ended September 27, 2025, was $60,461,000, representing a 20% increase from $50,226,000 in the same quarter of 2024[45] - Net cash provided by operating activities for the twelve months ended September 27, 2025, was $176,214,000, significantly higher than $111,112,000 in the previous year[45] Assets and Liabilities - Total current assets increased to $411.628 million as of September 27, 2025, from $323.379 million a year earlier, reflecting a growth of 27.3%[36] - Total liabilities increased to $369.840 million as of September 27, 2025, compared to $365.330 million in 2024, indicating a rise of 1.4%[36] - Cash and cash equivalents at the end of the fiscal year were $229.313 million, up from $127.687 million in 2024, representing an increase of 79.5%[40] Guidance and Future Outlook - The company reaffirmed its 2026 revenue guidance at approximately $1.5 billion and adjusted EBITDA guidance of $220 million[5] Other Financial Metrics - Operating profit for the three months ended September 27, 2025, was $50.344 million, compared to $25.579 million for the same period in 2024, representing a growth of 96.9%[38] - The company reported a Clean Bus Solutions impairment of $7,394,000 for the three months ended September 27, 2025[42] - Share-based compensation expense for the twelve months ended September 27, 2025, totaled $14,785,000, compared to $8,609,000 in the previous year[42] - Interest expense for the three months ended September 27, 2025, was $(74,000), a decrease from $1,118,000 in the same period of 2024[42]

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