Blue Bird(US:BLBD)2026-02-04 21:31Production and Supply Chain - Blue Bird's backlog decreased from approximately 4,400 units as of December 28, 2024, to about 3,070 units as of September 27, 2025, but increased to approximately 3,370 units as of December 27, 2025, including over 850 electric powered units[84]. - The company faced global supply chain constraints impacting production schedules and operational efficiencies, with increased costs from suppliers continuing during fiscal 2025 and 2026[78]. - The company continues to monitor supplier operations to ensure sufficient parts and supplies for production needs[87]. - The company is navigating supply chain challenges by sourcing from alternative suppliers and acquiring larger quantities of critical components[81]. - Changes in trade policies and tariffs began to impact procurement costs for imported inventory in the second half of fiscal 2025[82]. Financial Performance - Net sales for the first quarter of fiscal 2026 were $333.1 million, an increase of $19.2 million, or 6.1%, compared to $313.9 million for the same period in fiscal 2025[104]. - Adjusted EBITDA for the first quarter of fiscal 2026 was $50.1 million, compared to $45.8 million for the same period in fiscal 2025, reflecting an increase in the Adjusted EBITDA margin from 14.6% to 15.0%[104][105]. - Gross profit for the first quarter of fiscal 2026 was $71.2 million, an increase from $60.3 million in the first quarter of fiscal 2025[104]. - Operating profit rose to $37.7 million in Q1 fiscal 2026, an increase of $4.6 million from $33.0 million in Q1 fiscal 2025, driven by a $10.9 million increase in gross profit[111]. - Cash flows from operating activities totaled $36.6 million in Q1 fiscal 2026, an increase of $10.2 million from $26.4 million in Q1 fiscal 2025[138]. Sales and Pricing - Bus sales increased by $19.5 million, or 6.8%, with a 0.2% increase in unit bookings and a 6.5% increase in average sales price per unit[106]. - The company implemented cumulative price increases to mitigate the impact of increased procurement costs due to tariffs, contributing to the rise in net sales[106]. - Management's proactive communications and tariff pricing strategy helped increase orders in the first quarter of fiscal 2026[84]. Costs and Expenses - The cost of goods sold for the first quarter of fiscal 2026 was $261.9 million, up from $253.6 million in the same period of fiscal 2025[104]. - Selling, general and administrative expenses rose to $33.6 million in the first quarter of fiscal 2026, compared to $27.3 million in the same period of fiscal 2025[104]. - Interest expense decreased to $1.6 million in the first quarter of fiscal 2026 from $1.9 million in the same period of fiscal 2025[104]. - Total cost of goods sold increased by $8.3 million, or 3.3%, to $261.9 million in Q1 fiscal 2026, with the percentage of net sales improving from 80.8% to 78.6%[108]. Cash Flow and Liquidity - Cash and cash equivalents at the end of Q1 fiscal 2026 were $241.7 million, up from $136.1 million at the end of Q1 fiscal 2025[137]. - The company believes existing cash balances and expected cash flows will be sufficient to meet operating requirements for at least the next 12 months[134]. - Free Cash Flow for the three months ended December 27, 2025, was $31.1 million, an increase of $9.3 million from $21.8 million for the same period in 2024, driven by a $10.2 million increase in net cash provided by operating activities[143]. Investments and Financing - The company executed a $250.0 million five-year credit agreement on November 17, 2023, with a term loan facility of $100.0 million and a revolving credit facility of $150.0 million[122][123]. - Cash flows used in financing activities increased to $18.5 million for the three months ended December 27, 2025, compared to $12.9 million for the same period in 2024, reflecting a $5.6 million rise[141]. - The company purchased an additional $4.9 million of common stock as part of its share repurchase programs during the first three months of fiscal 2026 compared to the same period in fiscal 2025[142]. Tax and Liabilities - Income tax expense for Q1 fiscal 2026 was $9.1 million, compared to $8.7 million in Q1 fiscal 2025[115]. - A significant increase in accrued expenses, pension, and other liabilities of $42.8 million was noted in the first quarter of fiscal 2026, driven by an advanced payment from a customer[139]. - Outstanding letters of credit totaled $8.3 million at December 27, 2025, securing self-insured workers compensation and performance obligations related to environmental matters[144]. Customer and Accounts Management - Accounts receivable decreased significantly at the end of fiscal 2025 compared to fiscal 2024, impacting cash inflows during the three months ended December 27, 2025[139]. - A larger decrease in accounts payable during the first quarter of fiscal 2026 resulted in increased cash usage, attributed to lower production volume and strategic acquisitions[139]. - The company experienced a shift in customer mix, leading to increased accounts receivable balances towards the end of fiscal 2024, which were collected in the subsequent period[139].