Blue Bird Corporation · NASDAQ:BLBD
Blue Bird — Q2 2020 Earnings Presentation
25 slides from Blue Bird's earnings presentation, May 14, 2020
Slide 1: Fiscal 2020 Second Quarter Results
Blue Bird Corporation (Nasdaq: BLBD) Fiscal 2020 Second Quarter Results Earnings Conference Call May 14, 2020
Slide 2: Agenda
Agenda ▪ Introductions & Forward-Looking Statements – Mark Benfield – Executive Director, Profitability & Investor Relations ▪ Business Overview – Phil Horlock – President & CEO ▪ Financial Results – Phil Tighe – CFO ▪ FY2020 Outlook – Phil Horlock – President & CEO ▪ Q&A – Group This presentation i
Slide 3: Business Overview
Phil Horlock President & CEO BUSINESS OVERVIEW 3
Slide 4: State of Business is Strong Despite Uncertainty
State of Business is Strong Despite Uncertainty Blue Bird ❖ Delivered strong 2Q financial results ➢ Significant growth in volume, net sales revenue and average selling price ➢ Maintained alternative-fuel leadership with record 2Q sales mix ➢ Progressing transformational initiatives to drive down cos
Slide 5: Strong 2Q Financial Results
Strong 2Q Financial Results ❖ Achieved second highest 2Q profit in more than 10 years, despite incurring costs of about $3M due to COVID-19 ➢ Adjusted EBITDA of $12.7M, $0.5M above last year ➢ Seventh consecutive quarter of increased Adjusted EBITDA over prior year ➢ 2,594 buses sold, 14% above last
Slide 6: 1H and 2Q Financial Results
1H and 2Q Financial Results Bus Sales Total Net Sales 1H 2Q 1H 2Q $373.5M $238.7M $408.6M $255.4M Up $39.2M Up $43.6M Up $42.1M Up $43.8M Parts Sales Adj. EBITDA1 1H 2Q 1H 2Q $20.7 $12.7 $35.2M $16.7M Million Million Up $2.9M Up $0.1M Up $1.3M Up $0.5M Our 2Q results were positive; key is to maintai
Slide 7: Alternative-Fuel Leadership
Alternative-Fuel Leadership FY2020 YTD Highlights ▪ Alt-Fuel mix at 46%, equal to prior year ▪ ~65% market share fiscal year through March ▪ 216 new Alt-Fuel customers added ▪ 99 conquest customer added ▪ 130+ electric buses booked and in backlog Opportunities ▪ VW mitigation funds ◦ 50 states have
Slide 8: COVID-19 Impact on FY2020 School Bus Business
COVID-19 Impact on FY2020 School Bus Business ❖ School Closings – first closing was on March 15 and by the end of March over 90% of US states and Canadian provinces had closed their schools. Only 6 states and provinces have announced re-openings in May ❖ Impact on Orders for New Buses – school closi
Slide 9: Business-Continuity Response to COVID-19
Business-Continuity Response to COVID-19 ▪ Implemented protocols to ensure safe workplace Employee ▪ Suspended production for three weeks Safety & ▪ Working with Georgia National Guard to have all Blue Bird Well-Being employees in Georgia tested for COVID-19 ▪ Working with key suppliers to ensure su
Slide 10: Transformational Initiatives Drive Down Cost
Transformational Initiatives Drive Down Cost FY2018 FY2019 FY2020+ Phase 1 Phase 2 Phase 3 Purchased Material Purchased Material Purchased Material – Commercial – Commercial – Commercial – Sourcing – Sourcing – Sourcing – Initial design – Design Build and Launch New Paint Facility New Paint Facility
Slide 11: Financial Results & Outlook
Phil Tighe CFO FINANCIAL RESULTS & OUTLOOK 11
Slide 12: 2Q Results – Summary
2Q Results – Summary ($ Millions unless noted) 2Q FY2020 2Q FY2019 B/(W) Unit Volume 2,594 2,271 323 Net Revenue $255.4 $211.6 $43.8 Bus Rev./Unit ($000's) $92.0 $85.9 $6.1 Gross Margin 9.5% 12.3% (280) bps. Net Income $(0.6) $(0.7) $— Adj. Net Income1 $2.8 $3.9 $(1.1) Adj. EBITDA1 $12.7 $12.2 $0.5
Slide 13: 2Q FY2019 to FY2020 Adj. EBITDA Walk
2Q FY2019 to FY2020 Adj. EBITDA Walk ($ Millions) Volume, Product Mix, Customer Mix and Pricing Scrap, Healthcare, and Productivity $ COVID-19 and Launch costs Improved market-related factors and cost reductions through Transformational Initiatives drive higher profits, despite unusual events (inclu
Slide 14: FY2020 Free Cash Flow
FY2020 Free Cash Flow 2Q ($ Millions) FY2020 FY2019 Adjusted EBITDA $ 12.7 $ 12.2 Cash Paid for Interest (Net) (2.6) (2.6) Trade Working Capital1 36.4 5.0 CAPEX (5.0) (11.9) Cash Taxes (0.3) (2.3) Other2 (3.0) 13.1 Adjusted Free Cash Flow $ 38.2 $ 13.5 Operational Transformation Initiatives/Other (1
Slide 15: Improving Net Debt, Leverage & Liquidity
Improving Net Debt, Leverage & Liquidity ($ Millions) As of April 4, 2020 Debt $208.6 Cash 34.1 Net Debt $174.5 Net Debt / Adjusted EBITDA 2.1x Net Leverage Ratio 2.4x Compared with minimum bank Net Leverage Ratio covenant of 3.75x Liquidity1 $97.2 1 Liquidity is defined as cash and cash equivalents
Slide 16: FY2020 Outlook
Phil Horlock President & CEO FY2020 Outlook 16
Slide 17: FY2020 Outlook – Confident but Economy Uncertain
FY2020 Outlook – Confident but Economy Uncertain ❖ As 2Q results showed, Blue Bird’s business fundamentals remain strong – increased bus selling price, lowered cost and achieved higher mix of alternative fueled-buses ❖ Demand for new school buses remains high with 25% of US and Canadian fleet aged 1
Slide 18: BLUE BIRD.
(2) BLUE BIRD.
Slide 19: Appendix
Appendix (2) BLUE BIRD.
Slide 20: Adj. EBITDA Reconciliation
Adj. EBITDA Reconciliation Reconciliation of Net Loss to Adjusted EBITDA Three Months Ended Six Months Ended (in thousands of dollars) April 4, 2020 March 30, 2019 April 4, 2020 March 30, 2019 Net loss $ (639) $ (673) $ (1,042) $ (1,893) Adjustments: Interest expense, net (1) 5,754 4,102 7,747 7,070
Slide 21: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation Reconciliation of Free Cash Flow to Adjusted Free Cash Flow Three Months Ended Six Months Ended (in thousands of dollars) April 4, 2020 March 30, 2019 April 4, 2020 March 30, 2019 Net cash provided by operating activities $ 37,779 $ 21,436 $ (48,209) $ (26,772) Cash pai
Slide 22: Adjusted EPS Reconciliation
Adjusted EPS Reconciliation Reconciliation of Net Loss to Adjusted Net Income Three Months Ended Six Months Ended (in thousands of dollars) April 4, 2020 March 30, 2019 April 4, 2020 March 30, 2019 Net loss $ (639) $ (673) $ (1,042) $ (1,893) Adjustments, net of tax benefit or expense (1) Operationa
Slide 23: Important Disclaimers
Important Disclaimers Forward Looking Statements This presentation includes forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to expectations for future financial performance,
Slide 24: Important Disclaimers
Important Disclaimers Non-GAAP Financial Measures This presentation may include the following non-GAAP financial measures: “Adjusted EBITDA,” "Adjusted EBITDA Margin," “Adjusted Net Income,” “Adjusted Diluted Earnings per Share,” “Free Cash Flow” and “Adjusted Free Cash Flow.” Adjusted EBITDA is def
Slide 25: END
(2) BLUE BIRD.