Blue Bird Corporation · NASDAQ:BLBD
Blue Bird — UBS Industrials & Transportation Conference 2015
52 slides from Blue Bird's conference presentation, Nov 19, 2015
Slide 1: Blue Bird Corporation
Blue Bird Corporation UBS Industrials & Transportation Conference November 19, 2015
Slide 2: Blue Bird Highlights & Agenda
Blue Bird Highlights & Agenda Iconic and Fastest Growing School Bus Brand Bus sales volume (units) up more than 40% since 2010 Market leader in combined Type A/C/D school bus volume North American market share of 30% in 2014 is up 7 percentage points since 2010 Recently announced four new
Slide 3: Why Blue Bird
Why Blue Bird Why What Where Blue Bird We’ve Done We’re Going 3
Slide 4: Product-Focused Company
Product-Focused Company Full Product Range “Build the Best Bus” Expansive & innovative product cycle plans Type C Buses Type D Buses 65% Net Sales 22% Net Sales (2014) Leader in alternative fuels (2014) Exclusive engine offerings Differentiated product features Research-driven product enha
Slide 5: Product Leadership
Product Leadership Product Attributes Blue Competitor Competitor Ranked in Order of Bird A B Importance1 #1 Safety -- -- #2 Quality, Reliability and -- -- Durability #3 Operating Costs -- -- #4 Acquisition Cost -- -- #5 How the Bus Drives -- -- 1 Checkmarks/Corporate Logo indicate leadership in ca
Slide 6: Diverse Customer Base & Strong Distribution
Diverse Customer Base & Strong Distribution Blue Bird Blue Bird FY2014 Sales by Customer Type North American Dealer Network 3 Nat’l Fleets Export 5% 2% GSA 5% ~3,400 Contractors ~10,000 School 21% Districts = Dealer Location S = Service Center 67% Note: Many dealers have multiple locations 49 U.S. &
Slide 7: Experienced Management Team
Experienced Management Team Years Auto Blue Name Position Key Prior Experience Industry Bird Phil Horlock President & Chief Executive Officer 38 6 Phil Tighe Chief Financial Officer 39 3 John Kwapis Chief Operating Officer 30 6 Dale Wendell Chief Commercial Officer 39 4 Mike McCurdy VP HR & External
Slide 8: What We've Done
What We’ve Done Why What Where Blue Bird We’ve Done We’re Going 8
Slide 9: Transformational Initiatives
Transformational Initiatives Reduced product cost and improved quality, cutting warranty claims by 39% Placed more than 85% of material purchases on long term contracts Launched several leading and proprietary product features Increased productivity by reducing assembly plants from 2 to 1 Cut comple
Slide 10: Propane Advantage
Propane Advantage Gained first mover advantage in propane with introduction in 2007 Exclusive relationships with both Ford and Roush CleanTech Advantages are compelling “With today's tight school budgets, using a Lower fuel and maintenance costs transportation fuel like propane autogas that
Slide 11: Propane – Positive Press & Product Innovations
Propane – Positive Press & Product Innovations “Broward County saves “DeKalb County adds environmentally-friendly over $600,000 with Blue propane school buses” Bird propane-powered Propane is much cheaper (than diesel), at 89 cents a buses” gallon School Transportation News The district has 60 b
Slide 12: Strong Market Share and Profit Growth
Strong Market Share and Profit Growth ($ in millions) Market Share Adj. EBITDA Revenue 80 Adjusted EBITDA $856M % of Revenue 10% 30% 30% 70 $67 27% 9% 26% 60 Up 51% 8% 23% $50 8% 50 7% 40 7% 30 Revenue 6% $566M $17 5% 20 $14 3% 3% 4% 10 0 3% FY2010 FY2011 FY2012 FY2013 FY2014 FY2011 FY2012 FY2013 FY
Slide 13: Where We're Going
Where We’re Going Why What Where Blue Bird We’ve Done We’re Going 13
Slide 14: Future Growth & Profit Drivers
Future Growth & Profit Drivers Industry Volume Upside School Bus Market Recovery Future Market Share Growth Growth & Increasing Propane Penetration Profitability Continuous Product Enhancements Dealer Network Improvements Higher Operating Margins Drive Productivity Deliver Parts Growth Long-Term Fin
Slide 15: Early Stages of Industry Recovery
Early Stages of Industry Recovery Type C/D School Bus Recovery Historical Registrations Projected Registrations Historical Avg. ('85-'14) 40,000 37,641 34,882 35,000 31,600 Mean: 30,550 30,000 25,000 23,822 20,000 15,000 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015
Slide 16: Growing number of Enrolled Students
Growing number of Enrolled Students Total Projected U.S. Enrollment (000’s of Enrolled Students) 57,066 56,635 56,257 55,930 55,600 55,307 55,053 2014 2015 2016 2017 2018 2019 2020 2014 - 2020 Enrollment Growth of ~2 Million Students; 4% Growth U.S. Student Enrollment Largest Growth States (2014-202
Slide 17: Positive Outlook on Availability of Funds
Positive Outlook on Availability of Funds US Housing Price Index vs. NA New Registrations with Projection 40,000 250.00 35,000 200.00 30,000 25,000 150.00 20,000 100.00 15,000 10,000 50.00 5,000 0 - 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E 2018E New Registrations (North Am
Slide 18: Share Growth: Propane Opportunity
Share Growth: Propane Opportunity Fewer than 5% of Customers Have Tried Propane Just over 450 customers out of ~10,000 districts have tried propane 18
Slide 19: Share Growth: Propane Opportunity
Share Growth: Propane Opportunity “STI’s fleet of CNG and propane autogas vehicles now totals more than 1,300. That number is sure to grow as school districts learn more about our highly successful deployments in places like Omaha, NE, Monroeville, PA and Los Angeles, CA.” - Student Transportation I
Slide 20: Margin Expansion: Focused Approach
Margin Expansion: Focused Approach Processes Supporting Continuous Improvement 2014 Engineering team focused on design cost improvements – reduce cost & improve Break-even volume based functionality on Adj. EBITDA is ~3,800 units per year, over 20% Manufacturing focused on lower than 2010 impr
Slide 21: Margin Expansion: Growing Parts Business
Margin Expansion: Growing Parts Business ($ in millions) Parts Business Parts Sales Revenue & Gross Margin High margin business Revenue 2014 Gross Profit Margin ~180,000 Blue Bird buses in North 60 50% 17% $54 America 50 ~250 dealer-authorized service $46 45% $44 locations 40 Product line ex
Slide 22: New Products: Innovation Leadership
New Products: Innovation Leadership Unprecedented pace of new product launches Four all-new powertrains to begin shipping in 2016 Ford ROUSH 6.8L V10 Gasoline Engine Ford ROUSH 6.8L V10 CNG Engine Cummins ISV 5.0L V8 Engine Eaton Procision Duel-Clutch, 7-Speed Transmission Demonstrates
Slide 23: New Products: Innovation Leadership
New Products: Innovation Leadership New Gasoline-Powered Vision Blue Bird is the only major manufacturer to offer a Type C gasoline-powered school bus Lower acquisition cost than other fuel types Maintenance and service is simpler for technicians Utilizes Ford’s modern and highly efficient 6
Slide 24: New Products: Innovation Leadership
New Products: Innovation Leadership New CNG-Powered Vision Lower acquisition cost than Type D CNG-powered school bus Lower fuel and maintenance cost than diesel with better emissions performance Utilizes Ford’s modern and highly efficient 6.8L V10 engine with a 5- year/unlimited mileage warran
Slide 25: New Products: Innovation Leadership
New Products: Innovation Leadership New V8 Diesel-Powered Vision Blue Bird is the only manufacturer to offer the Cummins ISV 5.0L V8 diesel in a school bus Lower acquisition cost than other diesel offerings Improved fuel economy in urban environments New standard for being the quietest diese
Slide 26: New Products: Innovation Leadership
New Products: Innovation Leadership New Eaton Procision Transmission First dual-clutch, seven-speed automatic transmission available for Class 6-7 vehicles in North America Electronic shifting provides optimal fuel efficiency and smooth, continuous delivery of torque Efficiently accelerates an
Slide 27: New Markets: International & Commercial
New Markets: International & Commercial Sell more School Buses Expand Commercial Bus in International Markets Domestically & Internationally Grow international & commercial bus business 27
Slide 28: Financial Review
BLUE BIRD A heritage of looking ahead. Financial Review
Slide 29: Substantial Revenue Growth
Substantial Revenue Growth ($ in millions) Bus Parts Volume $856 $900 12,000 1 $800 $777 $54 $802 11,000 $46 $730 $700 $598 10,000 $600 $566 $44 $44 9,604 $500 $554 9,000 $522 $400 8,654 8,000 $300 7,000 6,882 $200 6,525 6,000 $100 $- 5,000 FY2011 FY2012 FY2013 FY2014 Memo: Revenue/Unit $80 $80 $84
Slide 30: Impressive Profit Growth
Impressive Profit Growth ($ in millions) 80 Adjusted EBITDA % of Revenue 10% 70 $67 9% 60 $50 8% 50 8% 7% 40 7% 6% 30 20 $17 5% $14 4% 10 3% 3% 0 3% FY2011 FY2012 FY2013 FY2014 Memo: GP Margin 9% 9% 12% 13% EBITDA has grown at a faster rate than revenue Note: Numbers have been rounded 30
Slide 31: Profit Drivers: FY2012 to FY2014
Profit Drivers: FY2012 to FY2014 ($ in millions) $29 $67 $(1) $21 $17 FY2012 Cost Reductions Volume & Mix Other FY2014 Adj. EBITDA Adj. EBITDA Relentless focus on cost competitiveness allows us to compete in all markets Note: Total Adj. EBITDA walk does not sum precisely due to rounding 31
Slide 32: Substantial Free Cash Flow
Substantial Free Cash Flow ($ in millions) Free Cash Flow $35 1 $31 $32 $30 $25 $20 $15 $15 $12 $10 $5 $- FY2011 FY2012 FY2013 FY2014 Memo: Capex $5 $4 $5 $6 Notes: Free Cash Flow is defined as Cash from Continuing Operations less Capex 1 FY2014 Free Cash Flow includes a $24.7 million special compen
Slide 33: FY2015 Outlook
BLUE BIRD A heritage of looking ahead. FY2015 Outlook
Slide 34: School Bus Business is Highly Seasonal
School Bus Business is Highly Seasonal Timing of sales influenced by R.L. Polk Unit school start Registration Seasonality Based on 3-Year Average FY2012-FY2014 First quarter is historically our lowest volume quarter and we 67% take planned shutdowns during this period 33% Company results follo
Slide 35: 4Q Outlook Supports Full-Year Guidance
4Q Outlook Supports Full-Year Guidance Bus Unit Sales Strong 4Q bus sales forecast 2014 2015 is fully supported by firm orders Up 6% Projected 4Q margins are higher than the first nine months based on units Up 10+% already shipped and orders in hand 1st 9 Months 4Q Actual Forecast Anticipating a
Slide 36: FY2015 Net Sales & Adj. EBITDA Guidance
FY2015 Net Sales & Adj. EBITDA Guidance ($ millions) 3Q FYTD 4Q Full Year Guidance Actual Forecast Fiscal 2015 Net Sales $612 $306-328 $918-940 Adjusted EBITDA1 $40 $32-35 $72-75 FY2015 earnings results and FY2016 guidance to be announced on December 15, 2015 1 Consistent with the information provid
Slide 37: Wrap-Up
BLUE BIRD A heritage of looking ahead. Wrap-Up
Slide 38: Significant Momentum & Upside
Significant Momentum & Upside Iconic and fastest growing school bus brand Announced four all-new powertrains that will begin shipping in 2016 Undisputed leader in alternative fuel-powered bus sales Downside risk mitigation Significant upside potential Experienced and committed management
Slide 39: Our Growth Objectives are Clear
Our Growth Objectives are Clear #1 in North American school bus market share with highest customer loyalty Differentiated and proprietary products and features that customers want and value Clear leader in affordable, alternative fuel- powered school buses Significant growth in parts sales
Slide 40: Q&A
BLUE BIRD A heritage of looking ahead. Q&A
Slide 41: Appendix
BLUE BIRD A heritage of looking ahead. Appendix
Slide 42: Balance Sheet
Balance Sheet (@ thousands except for share data) presen sock 8.0001 par valu, 10,000,000 stares suteoxiand, 500,000 lagudanon preference Series A issued at July 4, 2015 and ‘Common stock, $0.0001 par value, 100,000,000 $00,000 rosie and oustanaing at fly #2018 aad Seprenber37 5014 * 204,177 $ 21118
Slide 43: Income Statement
Income Statement (@ thousands except for share dara) Net sales Cost of goods sold Gross profit Operating expenses Operating profit Interest expense Interest income (Other income, net ‘Income (loss) before income taxes Income tax (expense) benefit in net income of non-consolidated affiliate, net of E
Slide 44: Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows 44
Slide 45: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation Note: See slide 13 for a reconciliation of free cash flow and Adjusted Free Cash Flow 45
Slide 46: 3Q Adjusted EBITDA Reconciliation
3Q Adjusted EBITDA Reconciliation 46
Slide 47: FYTD Adjusted EBITDA Reconciliation
FYTD Adjusted EBITDA Reconciliation 47
Slide 48: Net Income to Adjusted Net Income
Net Income to Adjusted Net Income 48
Slide 49: Adjusted Non-GAAP Diluted EPS
Adjusted Non-GAAP Diluted EPS 49
Slide 50: 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 51: Important Disclaimers
Important Disclaimers Non-GAAP Financial Measures Adjusted EBITDA, Adjusted EBITDA margin, adjusted net income from continuing operations and adjusted diluted EPS should not be considered as an alternative to net income (loss) as an indicator of Blue Bird’s performance or as an alternative to any ot
Slide 52: END
E> .LUvE BIRD A heritage of looking ahead.
Blue Bird — UBS Industrials & Transportation Conference 2015 on 6ix