Blue Bird Corporation · NASDAQ:BLBD
Blue Bird — Investor Presentation (September 2023)
36 slides from Blue Bird's investor presentation, September 2023
Slide 1: Blue Bird Corporation Investor Presentation September 2023
“A Leader in zero- and low-emission transportation” BLUE BIRD CORPORATION (NASDAQ: BLBD) Investor Presentation September 2023
Slide 2: Important Disclaimers: Forward Looking Statements
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 3: Important Disclaimers: Non-GAAP Financial Measures
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 4: Agenda
Agenda Investment Highlights School Bus Industry Overview Company & Product Highlights FY2023 Objectives Growth Runway 4
Slide 5: Investment Highlights
Investment Highlights Countercyclical Strong industry growth ahead with a backdrop of healthy funding and an aging school bus fleet National Commitment Beneficiary of $5B US Government’s commitment to the electrification of school buses The Leader Leading market position in alternative power and ele
Slide 6: School Bus Industry Overview
School Bus Industry Overview 6
Slide 7: Industry Highlights
Industry Highlights OEMs School Bus Customers Lion ~3,400 Contractors 500k+ Thomas Blue Bird ~10,000 School Districts IC High barriers to entry Highly specialized product -- Complex state and customer requirements -- Dealer and service network -- Customer relationship driven business Demand Drivers
Slide 8: Type C & D School Bus Industry
Type C & D School Bus Industry Mean: 31,000 Historical Registrations Long Term Avg. ('85-'19) ▪ Industry avg size (pre-COVID) is 31,000 new units annually based on Polk registrations ▪ Total fleet of school buses is ~515,000 units and average age is about 10 years ▪ Industry size is driven by: ▪ Num
Slide 9: Fleet Age Profile Supports Industry Levels
Fleet Age Profile Supports Industry Levels ~515K School Buses on the Road as of the end of CY2022 40,000 43%+ of the fleet is 35,000 10 years and older 30,000 25,000 20,000 15,000 10,000 5,000 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 ~221K bus
Slide 10: Company & Product Highlights
Company & Product Highlights 10
Slide 11: Introduction to Blue Bird
Introduction to Blue Bird ▪ Headquartered in Macon, Georgia Dedicated Manufacturing Micro Bird JV Facility ▪ Leader in alternative power; #1 in electric & propane school buses (Drummondville, Quebec, Canada) ▪ ~60% of Blue Bird sales are non-diesel; <10-20% for competitors Footprint Parts Distributi
Slide 12: Proven Leadership in Clean Technologies
Proven Leadership in Clean Technologies 14000 70% Diesel Gas Propane CNG Electric Alt-Power mix ▪ Proven track record of leadership in 12000 60% new technologies; more than 50% of 11,649 11,317 11,017 unit sales are non- diesel 10,616 58% 10,378 10000 9,064 48% 48% 50% ▪ Leader in electric and propa
Slide 13: EPA Clean School Bus Rebate Program
EPA Clean School Bus Rebate Program Program Overview Phase I – 2022 Lottery Results • $5B funding over 5 years Blue Bird Corporate and Dealers • ~$1B released in 2022 (Phase I) Other OEMs ~300 Loyal BB Customers and 690 Channel Partners • ~2k buses to be ordered, from ~2.5k awards ~250 • Some distri
Slide 14: EPA Clean School Bus Grant Program - Phase II
EPA Clean School Bus Grant Program - Phase II Phase II - $400M Competitive Grant Program Timeline Application period Anticipated Selection Anticipated Orders May – Aug 2023 Nov 2023 – Jan 2024 Jan – Mar 2024 • Extensive project narrative and evaluation criteria • School district applicants: 15-50 bu
Slide 15: Build Complete Ecosystem for EV School Bus Deployment
Build Complete Ecosystem for EV School Bus Deployment END OF LIFE ASSESSMENT Determine recycling program for Determine what bus best fits the used batteries after use customer’s needs based on terrain, climate and route planning SERVICE & SUPPORT FINANCING Connect with dealer and EV system Identify
Slide 16: FY2023 Objectives
FY2023 Objectives 16
Slide 17: Reminder of Key Focus Areas in FY2023
Reminder of Key Focus Areas in FY2023 Our People Lean Transformation • Wage and salary increase • Quality Leadership Teams trained and launched • Paid vacation days added • 6 Sigma, 5S, Kaizen, Kanban … • Working environment enhanced • Rapid quality-feedback process • Span of control narrowed with d
Slide 18: Increasing EV Throughput with New EV Build Up Center
Increasing EV Throughput with New EV Build Up Center ▪ Increased production in Third Quarter from 2 EV’s per day to 4 per day, on one shift ▪ Later this year, increasing production up to 6 EV’s per day on one shift ▪ Opportunity to build 12 per day on two shifts ▪ New footprint will support expansio
Slide 19: Legacy backlog units behind us, FY23-H2 back to normal margins
Legacy backlog units behind us, FY23-H2 back to normal margins Status 07/01/23 Production Quarter FY23 Orders to go 28% 31% FY23 Backlog (20-25% pricing) FY22 Newer Backlog (11-15% pricing) 64% FY21 Old Backlog (0-5% pricing) 74% 82% 92% 100% 100% 57% FY2024 Model Year 72% price increase 26% 36% 16%
Slide 20: Raising guidance for a strong finish in FY2023
Raising guidance for a strong finish in FY2023, driving $70M+ Rev. $235 $300 $294 $280 - $300 $1,110 - $1,130 $M 1 Adj. EBITDA ✓ Q3 Adj. EBITDA guidance exceeded 73 ✓ Raising Q4 and FY23 Adj. EBITDA guidance 70 - 76 ✓ Record Revenues and Record EVs in FY2023 28 29 20 26 - 32 ~9% ~10% (4) ~7% ~6.5% ~
Slide 21: FY2023 Guidance Raised: Strong profitability in FY2023
FY2023 Guidance Raised: Strong profitability in FY2023 FY2022 FY2023 FY2023 FY2023 FY2023 B/(W) $ Millions Actuals Initial Dec. Feb. Updated May Updated Aug. Updated Vs. Prior Year Guidance Guidance Guidance Guidance Net $800 $900 – $1,000 $1,000 - $1,050 $1,085 - $1,135 $1,110 - $1,130 $310 - $330
Slide 22: Positioned for Strong Recovery in FY2023 & Beyond
Positioned for Strong Recovery in FY2023 & Beyond 45,000 NA School Bus Industry Bookings 23%+ = ~8,400 units Class 6-7* 39.6k 40,000 38.7k 36.8k 36.6k 35.8k 36.1k 35,000 32.6k Revenue 40%+ = ~$1.1 Billion 29.6k 29.5k 30,000 26.4k 25.7k 25,000 Parts Revenue 20%+ = $92+ Million 20,000 ~10% CAGR 15,000
Slide 23: FY24 Base Case Guidance shows improvement over FY23
FY24 Base Case Guidance shows improvement over FY23 1 +12 Adj. EBITDA (+16%) ($M) 85 73 75 - 95 70 - 76 FY24 Guidance Downside Base Case Upside Supply Chain Units 8,000 8,500 9,000 Revenues $M $1,100 $1,150 $1,200 Adj. EBITDA $M $75 $85 $95 Adj. EBITDA % ~7.0% ~7.5% ~8.0% ~6.5% ~7.5% FY23 FY24 With
Slide 24: Solid Growth Runway
Solid Growth Runway 24
Slide 25: Long-term Outlook Driven by EV growth and Lean Transformation
Long-term Outlook Driven by EV growth and Lean Transformation Revenues $M Gas/Propane EV Units Diesel CNG 2023 2024 Outlook → Rev. $M Guidance Guidance 12,000 12,000 11,317 11,646 11,017 11,000 3,000 10,500 10,000 8,878 9,500 2,500 8,400 8,500 2,000 8,000 6,679 6,822 1,750 2,000 6,000 1,500 1,500 1,
Slide 26: Strong Outlook Ahead for Blue Bird / Investment Highlights
Strong Outlook Ahead for Blue Bird / Investment Highlights Countercyclical Strong industry growth ahead with a backdrop of healthy funding and an aging school bus fleet National Commitment Beneficiary of $5B US Government’s commitment to the electrification of school buses The Leader Leading market
Slide 27: Appendix
Appendix 27
Slide 28: FY2023 Q3 and YTD Financial Results
FY2023 Q3 and YTD Financial Results FY2023 Q3 Results FY2023 YTD Results FINANCIAL HIGHLIGHTS FINANCIAL HIGHLIGHTS UNITS NET UNITS NET SOLD SALES SOLD SALES 2,137 $294M 6,398 $830M +411 vs.’22 +$88M vs.’22 +1,592 vs.’22 +$287M vs.’22 Adjusted Adjusted Adjusted Adjusted EBITDA FCF EBITDA FCF $28M $43
Slide 29: Q3 Income Statement
Q3 Income Statement ($ Millions) FY2023 FY2022 B/(W) Unit Volume 2,137 1,726 411 Unit Backlog 5,199 6,297 (1,098) Net Revenue $294.3 $206.1 $88.2 Bus Rev./Unit ($000's) $126.5 $108.1 $18.4 Gross Margin 15.5% 10.5% 500 bps Adj. Net Income1 $14.5 $(2.9) $17.4 Adj. EBITDA1 $28.0 $8.8 $19.2 Adj. EBITDA
Slide 30: Q3 Balance Sheet and Cash Flow
Q3 Balance Sheet and Cash Flow ($ Millions) FY2023 FY2022 B/(W) Cash $50.5 $26.5 $24.0 Debt $(134.9) $(213.6) $78.7 Liquidity 1 $134.2 $60.2 $74.0 Operating Cash Flow $39.4 $(43.0) $82.4 Adj. Free Cash Flow 2 $42.8 $(40.2) $83.0 Trade Working Capital* $2.0 $(45.5) $47.5 Strong Free Cash-Flow for FY2
Slide 31: FY2022-Q3 to FY2023-Q3 Adj. EBITDA Walk
FY2022-Q3 to FY2023-Q3 Adj. EBITDA Walk ($ Millions) +19.2 Q3 Unit Volume (+219%) FY2022 1,726 FY2023 2,137 Delta +411 3.6 6.7 28.0 (4.9) 13.8 8.8 4.3% of 9.5% of Net Rev. Net Rev. FY22-Q3 Bus Vol., Bus Parts Gross OPEX/Other FY23-Q3 Adj. EBITDA Price-Mat. Operations Profit Adj. EBITDA Significant i
Slide 32: US Steel Price
After increases in CY23-Q2, US spot steel prices declined in CY23-Q3, with futures suggesting relatively stable pricing over the summer US Steel Prices, USD/ST, Jan ‘21– Oct ‘23 HR CR 2,500 2,000 US Steel Price 1,500 $/ST Futures 1,000 Corridor 500 Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan
Slide 33: Adj. EBITDA Reconciliation
Adj. EBITDA Reconciliation 33
Slide 34: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation 34
Slide 35: Adjusted EPS Reconciliation
Adjusted EPS Reconciliation 35
Slide 36: Investor Relations Contact Information
Investor Relations Contact Information Mark Benfield Mark.Benfield@Blue-Bird.com 36