Blue Bird(US:BLBD)2025-05-07 20:32Backlog 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]