Blue Bird(BLBD) - 2025 Q3 - Quarterly Report

PART I – FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) The unaudited financial statements for the period ended June 28, 2025, show significant growth in revenue and net income Condensed Consolidated Balance Sheets Total assets grew to $575.5 million while stockholders' equity increased to $221.8 million, reflecting strong earnings growth Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | June 28, 2025 | September 28, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $173,066 | $127,687 | | Inventories | $151,042 | $127,798 | | Total current assets | $360,673 | $323,379 | | Total assets | $575,450 | $524,894 | | Liabilities & Equity | | | | Total current liabilities | $228,579 | $235,973 | | Total liabilities | $353,603 | $365,330 | | Total stockholders' equity | $221,847 | $159,564 | Condensed Consolidated Statements of Operations The company reported strong year-over-year growth in net sales and net income for both Q3 and the first nine months of fiscal 2025 Three Months Ended Performance (in thousands, except per share data) | Metric | June 28, 2025 | June 29, 2024 | Change | | :--- | :--- | :--- | :--- | | Net sales | $398,011 | $333,367 | +19.4% | | Gross profit | $85,928 | $69,353 | +23.9% | | Operating profit | $50,069 | $39,728 | +26.0% | | Net income | $36,455 | $28,711 | +27.0% | | Diluted EPS | $1.12 | $0.85 | +31.8% | Nine Months Ended Performance (in thousands, except per share data) | Metric | June 28, 2025 | June 29, 2024 | Change | | :--- | :--- | :--- | :--- | | Net sales | $1,070,734 | $996,942 | +7.4% | | Gross profit | $217,099 | $196,550 | +10.4% | | Operating profit | $116,822 | $113,752 | +2.7% | | Net income | $91,223 | $80,884 | +12.8% | | Diluted EPS | $2.76 | $2.43 | +13.6% | Condensed Consolidated Statements of Cash Flows Net cash from operations nearly doubled year-over-year, driven by higher net income and favorable working capital changes Nine Months Ended Cash Flow Summary (in thousands) | Cash Flow Activity | June 28, 2025 | June 29, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $111,096 | $55,760 | | Net cash used in investing activities | ($19,065) | ($10,137) | | Net cash used in financing activities | ($46,652) | ($36,195) | | Change in cash and cash equivalents | $45,379 | $9,428 | - Financing activities in the first nine months of fiscal 2025 were significantly impacted by a $39.0 million share repurchase program, which was not present in the prior-year period[17] Notes to Condensed Consolidated Financial Statements The notes detail accounting policies, segment performance, and the initiation of a $60 million share repurchase program - The company continues to be impacted by global supply chain constraints, but pricing actions have allowed it to report gross margins exceeding pre-pandemic levels[27] - On January 31, 2024, the Board authorized a share repurchase program for up to $60 million, and through June 28, 2025, the company repurchased 1,048,051 shares for $39.0 million, with $11.1 million remaining[73][74] Segment Net Sales (in thousands) | Segment | Q3 2025 | Q3 2024 | 9 Months 2025 | 9 Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Bus | $372,240 | $308,037 | $993,099 | $919,433 | | Parts | $25,771 | $25,330 | $77,635 | $77,509 | Revenue by Product Category - Nine Months Ended (in thousands) | Product Category | June 28, 2025 | June 29, 2024 | | :--- | :--- | :--- | | Diesel buses | $367,855 | $318,239 | | Alternative power buses | $582,757 | $560,944 | | Parts | $75,651 | $75,678 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes strong performance to robust demand and effective pricing, resulting in a strong backlog and increased Adjusted EBITDA Executive Overview and Business Impacts The company navigated supply chain disruptions through pricing actions, maintaining strong margins and a backlog of approximately 3,900 units - The company is the market leader in alternative powered school buses, including propane, gasoline, and all-electric models[86] - Despite ongoing supply chain challenges, pricing actions have allowed the company to report gross profit and margins consistent with fiscal 2024 levels[92] - The company's sales backlog remained strong at approximately 3,900 units as of June 28, 2025[93] Results of Operations Q3 net sales grew 19.4% and nine-month net sales rose 7.4%, driven by increased unit bookings and higher pricing - The increase in Bus sales for Q3 was driven by a 14.7% increase in unit bookings (2,467 units vs 2,151) and a 5.4% increase in average sales price per unit[118] Q3 2025 vs Q3 2024 Performance Summary (in thousands) | Metric | Q3 2025 | Q3 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $398,011 | $333,367 | +19.4% | | Gross Profit | $85,928 | $69,353 | +23.9% | | Net Income | $36,455 | $28,711 | +27.0% | | Adjusted EBITDA | $58,479 | $48,246 | +21.2% | | Adjusted EBITDA Margin | 14.7% | 14.5% | +0.2 p.p. | Nine Months 2025 vs 2024 Performance Summary (in thousands) | Metric | 9M 2025 | 9M 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $1,070,734 | $996,942 | +7.4% | | Gross Profit | $217,099 | $196,550 | +10.4% | | Net Income | $91,223 | $80,884 | +12.8% | | Adjusted EBITDA | $153,438 | $141,601 | +8.4% | | Adjusted EBITDA Margin | 14.3% | 14.2% | +0.1 p.p. | Liquidity and Capital Resources The company maintains a strong liquidity position, generating $92.9 million in free cash flow during the first nine months of fiscal 2025 - Primary sources of liquidity are cash from operations, cash on hand, and borrowings under the revolving credit facility[156] Liquidity Position as of June 28, 2025 (in millions) | Item | Amount | | :--- | :--- | | Cash and cash equivalents | $173.1 | | Available borrowings on revolving credit facility | $141.7 | Free Cash Flow - Nine Months Ended (in thousands) | Metric | June 28, 2025 | June 29, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $111,096 | $55,760 | | Cash paid for fixed assets | ($18,215) | ($10,137) | | Free Cash Flow | $92,881 | $45,623 | Item 3. Quantitative and Qualitative Disclosures About Market Risk The company reported no material changes to its market risk exposures since its fiscal 2024 Form 10-K filing - There have been no material changes to the company's market risk exposures since the fiscal year 2024 Form 10-K filing[183] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 28, 2025[185] - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[186] PART II – OTHER INFORMATION Item 1. Legal Proceedings The company does not expect pending legal proceedings to have a material adverse effect on its financial condition - Management does not believe that the outcome of any pending legal proceedings will have a material adverse effect on the company's financial statements[188] Item 1A. Risk Factors The company highlights risks from potential changes in trade policies, tariffs, and government incentive programs - Changes in trade policies and tariffs could increase the cost of components, negatively impacting production costs, profitability, and cash flows[190] - Changes in laws or government programs involving grants and subsidies for alternative-powered school buses may negatively impact customer purchasing decisions[191] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company repurchased 245,249 shares for approximately $8.9 million during the third quarter of fiscal 2025 - On January 31, 2024, the Board approved a share repurchase program for up to $60 million of common stock over 24 months[193] - As of June 28, 2025, the approximate dollar value of shares that may yet be purchased under the program is $11.1 million[197] Share Repurchase Activity - Quarter Ended June 28, 2025 | Period (Fiscal Month) | Total Shares Repurchased | Average Price Paid per Share | | :--- | :--- | :--- | | March 30 - April 26, 2025 | 73,400 | $34.08 | | April 27 - May 24, 2025 | 70,150 | $36.17 | | May 25 - June 28, 2025 | 101,699 | $38.36 | | Total | 245,249 | | Item 5. Other Information No company directors or officers adopted or terminated Rule 10b5-1 trading arrangements during the third quarter - No directors or officers adopted or terminated any "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" during the third quarter of fiscal 2025[198] Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including officer certifications and XBRL interactive data files - The exhibits filed with the report include CEO and CFO certifications pursuant to Rule 13a-14(a) and Section 906 of the Sarbanes-Oxley Act, as well as XBRL data files[199]