Blue Bird Corporation · NASDAQ:BLBD
Blue Bird — Stifel 2015 Industrials Conference
36 slides from Blue Bird's conference presentation, Jun 16, 2015
Slide 1: STIFEL 2015 Industrials Conference
STIFEL 2015 Industrials Conference New York Palace Hotel June 16, 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 • North American market share of 30% in 2014 is up 7 percentage points since 2010 Undisputed Leader in Alternative Fuel-Powered Bus Sales • Sold approximately 6x more
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 Ranked #1 in four of top five 65% Net Sales 22% Net Sales school bus product purchase (2014) (2014) considerations1 Leader in alternative fuels Exclusive engin
Slide 5: 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 6: Experienced Management Team
Experienced Management Team Years Auto Blue Name Position Key Prior Experience Industry Bird Phil Horlock President & Chief Executive Officer 37 5 Phil Tighe Chief Financial Officer 38 2 John Kwapis Chief Operating Officer 29 5 Dale Wendell Chief Commercial Officer 38 3 Mike McCurdy VP HR & External
Slide 7: What We've Done
What We’ve Done Why What Where Blue Bird We’ve Done We’re Going 7
Slide 8: 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 9: 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 10: 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 $14 3% 3% 4% 10 0 3% FY2010 FY2011 FY2012 FY2013 FY2014 FY2011 FY2012 FY2013 FY
Slide 11: Where We're Going
Where We’re Going Why What Where Blue Bird We’ve Done We’re Going 11
Slide 12: Future Growth & Profit Drivers
Future Growth & Profit Drivers Industry Volume Upside School Bus Market Recovery Future Market Share Growth Growth & Increasing Propane Penetration Profitability Continuous Product Enhancements Dealer Network Improvements Higher Operating Margins Drive Productivity Deliver Parts Growth Long-Term Fin
Slide 13: Early Stages of Industry Recovery
Early Stages of Industry Recovery Type C/D School Bus Recovery Historical Registrations Projected Registrations Historical Avg. ('85-'14) 40,000 37,641 34,882 35,000 31,600 Mean: 30,550 30,000 25,000 23,822 20,000 15,000 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015
Slide 14: Share Growth: Propane Opportunity
Share Growth: Propane Opportunity Fewer than 4% of Customers Have Tried Propane Propane is an effective conquest tool that drives market share growth Early penetration of the market Only ~360 of ~10,000 customers have tried propane Customers that try propane buses are buying more Order siz
Slide 15: Margin Expansion: Productivity
Margin Expansion: Productivity Lower Break-Even Labor Productivity 2014 Break-even volume based on Adj. EBITDA now less than 4,000 units 106% per year 102% Continuous improvement manufacturing mindset 96% Highly skilled workforce with average tenure of approximately 14 years 89% No significa
Slide 16: Margin Expansion: Growing Parts Business
Margin Expansion: Growing Parts Business ($ 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% $44 locations 40 New and experie
Slide 17: New Markets: International & Commercial
New Markets: International & Commercial Sell more School Buses in International Markets Expand Commercial Bus Business Domestically & Internationally Grow international & commercial bus business 17
Slide 18: Historic Financial Review
Historic Financial Review 18
Slide 19: Substantial Revenue Growth
Substantial Revenue Growth ($ 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 $84
Slide 20: Impressive Profit Growth
Impressive Profit Growth ($ in millions) 80 Adjusted EBITDA % of Revenue 10% 70 $67 9% 60 $50 8% 50 8% 7% 40 7% 6% 30 20 $17 5% $14 4% 10 3% 3% 0 3% FY2011 FY2012 FY2013 FY2014 Memo: GP Margin 9% 9% 12% 13% EBITDA has grown at a faster rate than revenue Note: Numbers have been rounded 20
Slide 21: Profit Drivers: FY2012 to FY2014
Profit Drivers: FY2012 to FY2014 ($ in millions) $29 $67 $(1) $21 $17 FY2012 Cost Reductions Volume & Mix Other FY2014 Adj. EBITDA Adj. EBITDA Relentless focus on cost competitiveness allows us to compete in all markets Note: Total Adj. EBITDA walk does not sum precisely due to rounding 21
Slide 22: Substantial Free Cash Flow
Substantial Free Cash Flow ($ 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 23: Financial Outlook
BLUE BIRD A heritage of looking ahead. Financial Outlook
Slide 24: 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 25: 2015 First Half Financial Overview
2015 First Half Financial Overview 1H Bus Volume 1H Net Sales 1H Adj. EBITDA 3,917 $348.9 $17.5 Units Million Million Up 149 Units Up $7.2 Million Down $(6.8) Million Results reflect typical seasonal variations in order timing/customer mix and investing in growth 25
Slide 26: 2015 Full-Year Guidance
2015 Full-Year Guidance 2015 Revenue 2015 Adj. EBITDA $918 - $940 $72 - $75 Million Million Up 7% - 10% Up 7% - 12% On track to grow Adjusted EBITDA 7-12% in FY2015 26
Slide 27: Wrap-Up
BLUE BIRD A heritage of looking ahead. Wrap-Up
Slide 28: Significant Momentum & Upside
Significant Momentum & Upside Iconic and fastest growing school bus brand Undisputed leader in alternative fuel-powered bus sales Downside risk mitigation Significant upside potential Experienced and committed management team that delivers results 28
Slide 29: Our Growth Objectives are Clear
Our Growth Objectives are Clear #1 in North American school bus market share with highest customer loyalty Differentiated and proprietary products and features that customers want and value Clear leader in affordable, alternative fuel- powered school buses Significant growth in parts sales
Slide 30: Q&A
BLUE BIRD A heritage of looking ahead. Q&A
Slide 31: Appendix
BLUE BIRD A heritage of looking ahead. Appendix
Slide 32: Blue Bird GAAP/Non-GAAP Reconciliation
Blue Bird GAAP/Non-GAAP Reconciliation Year Ended ($ in thousands) Net Income to Adjusted EBITDA Reconciliation October 1, 2011 September 29, 2012 September 28, 2013 September 27, 2014 Net income (loss) ($5,224) ($2,998) $54,208 $2,757 Loss (income) from discontinued operations, net of tax 1,625 328
Slide 33: Blue Bird Income Statement
Blue Bird Income Statement ($ in thousands, except per share values) Year Ended September 29, 2012 September 28, 2013 September 27, 2014 Net sales $598,330 $776,558 $855,735 Cost of goods sold 542,086 684,109 746,362 Gross profit $56,244 $92,449 $109,373 Operating expenses Selling, general and admin
Slide 34: Blue Bird Balance Sheet
Blue Bird Balance Sheet ($ in thousands) September 28, 2013 September 27, 2014 ASSETS Cash and cash equivalents $46,594 $61,137 Accounts receivables, net. 13,493 21,215 Inventories 62,603 71,300 Other current assets 3,125 4,353 Deferred tax asset 3,030 6,057 Total current assets $128,845 $164,062 Pr
Slide 35: Blue Bird Statement of Cash Flows
Blue Bird Statement of Cash Flows Year Ended ($ in thousands) September 29, 2012 September 28, 2013 September 27, 2014 Cash flows from operating activities Net income (loss) ($2,998) $54,208 $2,757 (Income) loss from discontinued operations, net of tax 328 159 (42) Adjustments to reconcile net incom
Slide 36: END
BLUE BIRD A heritage of looking ahead. END