Financial Data and Key Metrics Changes - The company achieved record quarterly revenue of $359 million, which is $13 million higher than the previous year [11][22] - Adjusted EBITDA reached $49 million, representing a 14% margin, which is 6.5% better than the same quarter last year [10][12] - Adjusted free cash flow for the quarter was $19 million, a decrease of $35 million year-over-year primarily due to a tax carryforward benefit in 2024 [13][22] - The company ended the quarter with $131 million in cash and reduced debt by approximately $5 million over the last year [27] Business Line Data and Key Metrics Changes - The company sold 2,295 buses in Q2, with EV sales reaching 265 units, which is a 26% increase compared to last year [11][24] - Parts sales totaled $26 million, flat compared to Q1 but a slight decrease of $2 million from the prior year [24] - The average selling price for buses increased by approximately 3%, from $141,000 to $145,000 per unit [24] Market Data and Key Metrics Changes - The company ended the quarter with a backlog of nearly 5,000 units, including over 700 EVs, representing approximately $770 million in revenue [13][23] - Alternative power vehicles accounted for 57% of unit sales in Q2, significantly higher than the typical 10% to 15% mix for major competitors [14] Company Strategy and Development Direction - The company is focused on maintaining its lead in the alternative power vehicle segment and is reinvesting in operations and product development [9][10] - The introduction of a new commercial chassis is planned for 2026, with strong interest from various sectors [18][19] - The company aims to position itself as a strong long-term investment, with a target of achieving $200 million in adjusted EBITDA for the year [33][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the challenges posed by tariffs and maintaining operational stability [10][28] - The company is optimistic about the continuation of the Clean School Bus program, which is seen as a bipartisan initiative [45] - There is a cautious outlook on bookings, with a projected revenue increase of 8% from the previous fiscal year [43] Other Important Information - The company has implemented a 2% price increase on all units sold and an additional 2% increase on new orders due to tariff impacts [32] - The company is working closely with dealers and customers to manage the effects of tariffs and pricing adjustments [67][70] Q&A Session Summary Question: Margin improvements and long-term targets - Management indicated it is early to speculate on margin improvements but emphasized a strong operational background that could support future enhancements [50][52] Question: EV pricing expectations - Current tariffs are hindering the goal of reducing EV prices, with a pause in the journey to improve total cost of ownership [54][55] Question: Impact of tariffs on guidance - The company noted that while EVs face headwinds, the outlook for ICE and propane buses has improved, allowing for a stable overall guidance [56][58] Question: Dealer network response to pricing - The dealer network is collaborating closely with the company to navigate tariff challenges, and similar pricing actions have been observed across competitors [66][71] Question: Clean School Bus program funding - Funding for the Clean School Bus program remains balanced between state and federal sources, with optimism for future rounds [72][74] Question: Interest in propane and gasoline buses - The company is uniquely positioned in the alternative power segment, with strong interest in propane solutions amid EV tariff concerns [75][93] Question: Commercial chassis development - Initial customer feedback indicates greater interest in propane, with the company well-positioned to meet market demand [92][94]

Financial Performance Highlights - Blue Bird achieved record quarterly sales of $359 million, a $13 million increase compared to FY2024 Q2[20, 57] - The company's Adjusted EBITDA for Q2 was $49 million, up $3 million from the same period last year[20, 57] - Adjusted Free Cash Flow for the quarter reached $19 million[20] - The Adjusted EBITDA margin was 13.7%, an increase of 0.5 percentage points year-over-year[30] - For the first half of FY2025, net sales reached $673 million, a $9 million increase compared to the first half of FY2024[28] - First half Adjusted EBITDA was $95 million, up $2 million from the previous year[28] Alternative Power and EV Focus - Alternative power sales accounted for 57% of the sales mix[20] - The firm order backlog for EVs is approximately $233 million[20] - Blue Bird has over 1,100 EVs booked and in backlog[20] Guidance and Outlook - The company is maintaining its full-year revenue guidance of $1.425 billion to $1.475 billion[41, 43] - Blue Bird confirmed its full-year Adjusted EBITDA guidance of $200 million, with an approximate 14% margin[43, 45]

Backlog and Demand - Blue Bird's backlog remained strong at approximately 4,900 units as of September 28, 2024, and 4,400 units as of March 29, 2025, despite selling 9,000 units in fiscal 2024 and over 4,400 units in the first half of fiscal 2025[92] - New bus orders during fiscal 2024 and continuing into fiscal 2025 remained robust, driven by pent-up demand from the COVID-19 pandemic and supply chain challenges[92] - The cumulative effect of the COVID-19 pandemic has led to a strong demand for school buses, contributing to the robust order backlog[92] Supply Chain and Costs - The company experienced higher purchasing costs and manufacturing inefficiencies due to supply chain disruptions, but cumulative increases in sales prices outpaced these costs, resulting in gross profit and gross margin consistent with or better than historic levels[90] - Supply chain disruptions continued into the first half of fiscal 2025, impacting the number and mix of school buses produced and increasing manufacturing costs[91] - Management believes that ongoing supply chain disruptions could materially impact results if parts and supplies cannot be obtained in sufficient quantities[93] - Supply chain constraints have negatively affected inventory procurement costs, gross profit, income, and cash flows since the second half of fiscal 2021[94] - The company experienced increased costs due to supply chain disruptions and inflation, impacting the cost of goods sold[103] Financial Performance - Net sales for the second quarter of fiscal 2025 were $358.9 million, an increase of $12.9 million, or 3.7%, compared to $345.9 million for the same period in fiscal 2024[113] - Gross profit for the second quarter of fiscal 2025 was $70.9 million, up from $63.6 million in the same quarter of fiscal 2024, reflecting a gross profit margin increase[113] - Adjusted EBITDA for the second quarter of fiscal 2025 was $49.2 million, compared to $45.8 million for the same quarter in fiscal 2024, resulting in an Adjusted EBITDA margin of 13.7%[113][114] - The Bus segment generated net sales of $332.7 million in the second quarter of fiscal 2025, an increase from $318.0 million in the same quarter of fiscal 2024[114] - Parts segment net sales decreased to $26.1 million in the second quarter of fiscal 2025 from $28.0 million in the same quarter of fiscal 2024[114] - Operating profit for the second quarter of fiscal 2025 was $33.7 million, slightly down from $36.1 million in the same quarter of fiscal 2024[113] - Net income for the second quarter of fiscal 2025 was $26.0 million, compared to $26.0 million in the same quarter of fiscal 2024, indicating stable profitability[113] Tax and Cash Flow - Income tax expense for the six months ended March 29, 2025, was $17.8 million, compared to $16.7 million for the six months ended March 30, 2024[148] - The effective tax rate for the six months ended March 29, 2025, was 25.8%, slightly higher than the 25.7% for the six months ended March 30, 2024[149][150] - Total cash provided by operating activities was $54.2 million for the six months ended March 29, 2025, consistent with $54.8 million for the same period in 2024[172] - Free Cash Flow for the six months ended March 29, 2025 was $40.564 million, which is $8.6 million lower than the $49.128 million reported for the six months ended March 30, 2024[177] - The decrease in Free Cash Flow was attributed to a $0.6 million decrease in net cash provided by operating activities and an $8.0 million increase in cash paid for fixed assets[177] Financing and Credit - The Company had $130.7 million of available cash and $143.3 million of additional borrowings available under its revolving credit facility as of March 29, 2025[153] - The Company entered into a $250.0 million five-year credit agreement on November 17, 2023, which includes a term loan facility of $100.0 million and a revolving credit facility of $150.0 million[154][155] - Total cash used in financing activities was $37.0 million for the six months ended March 29, 2025, compared to $35.0 million for the same period in 2024, reflecting a $2.0 million increase[174] Regulatory Environment - The company continues to navigate regulatory environments affecting pricing and purchasing decisions in the school bus market[102] - Changes in governmental policies and regulations could materially impact results in future periods, leading to significant economic disruption[98] - The company is taking actions to mitigate the impact of changes in trade policies and tariffs, including increasing the volume of steel purchased at fixed prices[95] Shareholder Activities - The Company purchased $30.1 million of common stock in connection with its share repurchase program during the first six months of fiscal 2025, with no similar activity in the same period of fiscal 2024[175]

BLUE BIRD REPORTS FISCAL 2025 SECOND QUARTER RESULTS; BEATS SECOND QUARTER GUIDANCE WITH RECORD RESULT; REAFFIRMS 2025 GUIDANCE AND LONG-TERM OUTLOOK Net Sales of $359M and GAAP Net Income of $26M Adj. EBITDA of $49M with 14% Margin and 2,295 Buses Sold FY2025 Adj. EBITDA Guidance Reaffirmed at $200M or 14% of Revenue MACON, Ga. (May 7, 2025) – Blue Bird Corporation ("Blue Bird") (Nasdaq: BLBD), the leader in electric and low-emission school buses, announced today its fiscal 2025 second quarter results. Hig ...

Blue Bird Corporation (BLBD) is slated to release second-quarter fiscal 2025 results on May 7, after the closing bell. The Zacks Consensus Estimate for the to-be-reported quarter's earnings per share (EPS) and revenues is pegged at 96 cents and $390 million, respectively. For the fiscal second quarter, the consensus estimate for Blue Bird's earnings has moved up 4 cents in the past 90 days. Its bottom-line estimates imply 7.87% growth from the year-ago reported numbers. The Zacks Consensus Estimate for BLBD ...

Group 1 - Blue Bird Corporation (BLBD) has lost most of its gains from May 2024 due to uncertainty surrounding a key industry tailwind for electric vehicle (EV) school buses [1] - The company operates in a sector that is influenced by various factors, including market demand for EVs and regulatory support for electric school buses [1] Group 2 - The investment focus is on value-oriented opportunities, particularly in sectors such as chemicals, homebuilders, building materials, industrials, and metals & mining [1] - The investment strategy emphasizes acquiring stocks that are undervalued and have potential catalysts within a time frame of one quarter to two years [1]

Company Performance - Blue Bird (BLBD) closed at $35.36, reflecting a -0.69% change from the previous day, underperforming the S&P 500's 0.58% gain [1] - Over the past month, Blue Bird's shares have increased by 9.98%, surpassing the Auto-Tires-Trucks sector's gain of 5.01% and the S&P 500's loss of 0.84% [1] Earnings Forecast - Blue Bird is expected to release earnings on May 7, 2025, with a forecasted EPS of $0.96, indicating a 7.87% increase from the same quarter last year [2] - The Zacks Consensus Estimate projects net sales of $390 million, up 12.74% from the previous year [2] Annual Estimates - For the annual period, the Zacks Consensus Estimates predict earnings of $4 per share and revenue of $1.45 billion, representing increases of +15.61% and +7.92% respectively from the last year [3] - Recent revisions to analyst forecasts for Blue Bird are crucial as they reflect changing business trends and analysts' outlook on the company's health and profitability [3] Valuation Metrics - Blue Bird's current Forward P/E ratio is 8.91, which is lower than the industry's average Forward P/E of 9.95, indicating a valuation discount [6] - The company has a PEG ratio of 0.82, aligning with the average PEG ratio of the Automotive - Domestic industry [7] Industry Context - The Automotive - Domestic industry, part of the Auto-Tires-Trucks sector, holds a Zacks Industry Rank of 202, placing it in the bottom 19% of over 250 industries [8] - Research indicates that industries in the top 50% of the Zacks Industry Rank outperform those in the bottom half by a factor of 2 to 1 [8]

Industry Overview - The Zacks Domestic Auto industry encompasses companies involved in designing, manufacturing, and retailing various types of vehicles, including passenger cars, trucks, and electric vehicles [2] - The industry is highly consumer cyclic and is undergoing significant transformation due to technological advancements and digitization [2] Factors Affecting Industry Prospects - The newly introduced tariff by President Trump is expected to worsen affordability issues, with average new car prices nearing $50,000, potentially leading to higher costs for consumers [3] - Economic uncertainty is projected to impact demand, with the Fed reducing its GDP growth forecast for 2025 from 2.1% to 1.7% and raising core inflation estimates to 2.8% [4] - The introduction of more affordable electric vehicles (EVs), priced at $35,000 or less, is anticipated to attract buyers despite economic challenges [5] Current Industry Ranking and Performance - The Zacks Automotive – Domestic industry currently holds a Zacks Industry Rank of 188, placing it in the bottom 23% of 250 Zacks industries, indicating dim near-term prospects [6][7] - The industry's earnings estimates for 2025 and 2026 have decreased by 42.9% and 15.6%, respectively, over the past year, reflecting a negative earnings outlook [8] Market Performance - Over the past year, the Domestic Auto industry has outperformed the auto sector but lagged behind the Zacks S&P 500 composite, with a decline of 4.2% compared to the sector's 16.4% and S&P 500's 1.9% [11] Valuation Metrics - The industry is currently trading at an EV/EBITDA ratio of 26.02X, significantly higher than the S&P 500's 14.96X and the sector's 14.69X, indicating a premium valuation despite being debt-laden [14] Company Highlights - **Blue Bird Corporation (BLBD)**: Engaged in manufacturing school buses, with a strong order backlog of nearly 4,400 units. The company expects a record full-year adjusted EBITDA margin of 14% for fiscal 2025 [19][20] - **Tesla, Inc. (TSLA)**: Recognized as a technology innovator in the EV space, with plans for Full Self-Driving services and new product launches expected to enhance profitability. The Zacks Consensus Estimate for 2025 sales and EPS implies year-over-year growth of 7.54% and 9.92%, respectively [23][24] - **General Motors Company (GM)**: Holds a 16.5% market share in the U.S. and has achieved significant cost reductions. The Zacks Consensus Estimate for GM's 2025 EPS indicates year-over-year growth of 8.58% [27][28]

Core Insights - Economic and political policy changes can have both positive and negative impacts on companies, highlighting the importance of monitoring these factors for investment decisions [1]. Company Overview - Blue Bird Corporation (NASDAQ: BLBD) has gained attention since July 2023, indicating a potential undervaluation or overlooked investment opportunity by the market [1]. Analyst Background - The analyst, Dilantha De Silva, has over 10 years of experience in the investment industry, focusing on small-cap stocks that are often overlooked by Wall Street [1]. - Dilantha is a CFA Level III candidate and an Associate Member of the Chartered Institute for Securities and Investment (CISI), showcasing a strong professional background [1]. - His work has been featured on major financial platforms such as CNBC, Bloomberg, Nasdaq, and Yahoo Finance, indicating a reputable presence in the investment community [1].

Company Overview - Blue Bird Corporation (BLBD) is experiencing significant attention from investors due to high implied volatility in its options market, particularly the Apr 17, 2025 $22.50 Call option [1] - The company currently holds a Zacks Rank 2 (Buy) in the Automotive - Domestic industry, which is positioned in the bottom 17% of the Zacks Industry Rank [3] Analyst Insights - Over the past 60 days, one analyst has raised the earnings estimate for Blue Bird for the current quarter from 92 cents per share to 96 cents, indicating a positive outlook [3] - No analysts have revised their earnings estimates downward during this period, suggesting a stable or improving sentiment towards the company's performance [3] Market Sentiment - The high implied volatility suggests that options traders are anticipating a significant price movement for Blue Bird shares, which could be indicative of an upcoming event that may lead to a substantial rally or sell-off [2][4] - Options traders often seek to capitalize on high implied volatility by selling premium, aiming for the underlying stock to not move as much as expected by expiration [4]