Blue Bird Corporation · NASDAQ:BLBD
Blue Bird — Craig-Hallum Alpha Select Conference (November 2016)
52 slides from Blue Bird's conference presentation, Nov 16, 2016
Slide 1: Blue Bird Corporation
Blue Bird Corporation (Nasdaq: BLBD) Craig-Hallum Alpha Select Conference New York November 16, 2016
Slide 2: 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 3: Important Disclaimers: Non-GAAP Financial Measures
Important Disclaimers Non-GAAP Financial Measures This presentation includes the following non-GAAP financial measures: “Adjusted EBITDA,” “Adjusted Net Income,” “Adjusted Diluted Earnings per Share,” “Free Cash Flow” and “Adjusted Free Cash Flow.” Adjusted EBITDA is defined as net income prior to i
Slide 4: Narrowing Guidance
Narrowing Guidance We are confirming and narrowing our fiscal 2016 guidance to the following ranges (in millions): Revenue: $931-935 (midpoint $933) Adj. EBITDA: $70-72 (midpoint $71) Free Cash Flow: $32-34 (midpoint $33) All 2016 dollar figures in this presentation represent the mid-point
Slide 5: Agenda
Agenda Industry Overview Blue Bird Overview Product Focus Financials Future Growth & Profit Drivers Why Invest Q&A This presentation includes forward-looking statements, including statements regarding full-year guidance and seasonality, that are subject to risks that could cause actual
Slide 6: Industry Overview
Industry Overview BLUE BIRD A heritage of looking ahead.
Slide 7: Industry Overview
Industry Overview 26 million students daily represents just over 50% of total enrollment Average passengers per bus is about 50 Conservative estimate is that each bus replaces at least 20 cars per day (each way) or over 20 million trips per day School buses ensure that students have a reliab
Slide 8: Industry Overview
Industry Overview School Bus Customers U.S. School Bus and Student Population U.S. School Buses 50% 50% Top 10 States 258K buses 27M students ~3,400 105 students/bus Contractors Texas Other States ~10,000 260K buses New York Illinois School 24M students 92 students/bus Florida Districts Enrolled Stu
Slide 9: Market Recovery
Market Recovery Type C/D School Bus Recovery Historical Registrations Projected Registrations Historical Avg. ('85-'15) 40,000 37,641 34,884 FY2016E: FY2020P: 35,000 33,800 31,500 Mean: 30,530 30,000 25,000 23,821 20,000 15,000 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 20
Slide 10: Positive Outlook
Positive Outlook New School Bus Registrations vs. CoreLogic Housing Price Index New Registrations (North America) HPI 40 250 35 Thousands of Buses 200 30 25 150 20 15 100 10 50 5 0 - 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E 2018E Source: HPI data from CoreLogic, normalized
Slide 11: Total Projected U.S. Enrollment
Total Projected U.S. Enrollment (000’s of Enrolled Students) 57,023 56,684 56,343 56,010 55,671 55,380 55,132 54,731 54,790 Fall 2015 2016 2017 2018 2019 2020 2021 2022 2023 Source: Enrollment data from NCES projections 2015 – 2023 Enrollment Growth of +2 Million Students Student enrollment growing;
Slide 12: Market Share Growth
Market Share Growth Market Share Drivers North American Type C & D School Bus Market Bus focused dealers; strong 46% BB IC TH customer relationships 44% Upgrading dealers where 40% required 36% 38% Reduced complexity and 35% 35% 35% substantial quality gains 34% 34% 33% 33% Clear leader in a
Slide 13: Blue Bird Overview
Blue Bird Overview BLUE BIRD A heritage of looking ahead.
Slide 14: Blue Bird Highlights
Blue Bird Highlights Leading Brand With Focus on Innovation First-Mover Advantage in High Growth Propane Segment Favorable Industry Dynamics Strong Free Cash Flow Generation and Liquidity Strong Distribution Model Experienced and Committed Management Focused on Optimizing Business 14
Slide 15: Blue Bird FY2016 Highlights
Blue Bird FY2016 Highlights Launched second shift Achieved 70 units-per-day production, up TBD units-per-day compared with FY2012 First to market with gas-powered Type C offering Commenced shipping in September, selling over 400 units in the month Very promising product – customer interest
Slide 16: Blue Bird Alternative Fuels
Blue Bird Alternative Fuels FY2016 Units Sales Gas CNG 7,863 4% 1% Propane 21% 2,240 406 107 Diesel Diesel Propane Gas CNG 74% Alternative Fuels Growth Competition Alt. Fuel Sales (Propane, CNG, Gas) % of Mix IC entered propane market in 2016 3,000 2,753 40.0% Offering: Power Solutions Inc. (PSI
Slide 17: Track Record of Growing Sales
Track Record of Growing Sales ($ in millions) Bus Net Sales Parts Net Sales Bus Units Sales $1,000 $919 $933 15,000 $900 $856 $57 14,000 1 $777 $54 $800 $862 $46 $802 13,000 $730 $700 $598 12,000 $566 $44 10,616 $600 $44 10,378 11,000 $554 $522 $500 9,604 10,000 $400 8,654 9,000 $300 8,000 $200 6,88
Slide 18: Product Focused
Product Focused BLUE BIRD A heritage of looking ahead.
Slide 19: Product-Focused Company
Product-Focused Company Full Product Range Type C Buses 66% Net Sales Type D Buses Diesel 22% Net Sales Propane Diesel Gas CNG CNG (FY2017) Aftermarket Parts 6% Net Sales Type A Buses1 Diesel Specialty Buses Propane 5% Net Sales Gas Diesel 1 Unconsolidated Joint Venture Note: Based on FY2015 sales.
Slide 20: Positive Press on Propane Cost Savings
Positive Press on Propane Cost Savings % Change in National Avg. Fuel Prices “Broward County saves over Gasoline Diesel Propane CNG $600,000 with Blue Bird “Washingtonville Central 40% propane-powered buses” School District School Transportation News maintenance costs drop August 14, 2015 30% with p
Slide 21: Launched Four New Powertrains
Launched Four New Powertrains Gasoline Engine V8 Diesel Engine Blue Bird is the only manufacturer to offer a Type C Blue Bird is the only gasoline-powered school bus manufacturer to offer the Cummins ISV 5.0L V8 diesel Lower acquisition cost than in a school bus other fuel types Lower acquis
Slide 22: Broadest Range of Product Offerings
Broadest Range of Product Offerings Type D Rear Engine Alternative Fuel Type D Rear Engine Cummins ISL-G CNG Traditional Type C Cummins ISB/ISL Diesel Alternative Fuel Type D Front Engine Ford/ROUSH CNG Traditional Type C Cummins ISB Diesel Alternative Fuel Type C Ford/ROUSH Propane Traditional Type
Slide 23: Financials
Financials BLUE BIRD A heritage of looking ahead.
Slide 24: Impressive Profit Growth
Impressive Profit Growth ($ in millions) Adjusted EBITDA Adjusted EBITDA Margin $80 $70 $71 14% $70 $67 12% $60 $50 10% $50 8% 8% 8% 8% $40 6% $30 6% 4% $17 $20 $14 $10 3% 2% 2% $- 0% FY2011 FY2012 FY2013 FY2014 FY2015 FY2016G Midpoint Consistent improvement with 3-5 year target of 10% of revenue 24
Slide 25: Strong Cash Flow Generation
Strong Cash Flow Generation ($ in millions) 1 Adjusted Free Cash Flow $59 $45 $33 $31 $15 $12 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016G Midpoint Business generates strong free cash flow 1Adjusted for Business Combination and Special Compensation Payments in FY2014, FY2015 and FY2016G 25
Slide 26: Improving Net Debt, Leverage & Liquidity
Improving Net Debt, Leverage & Liquidity As of July 2, 2016 ($ Millions) Debt $ 154.3 Cash 42.7 Net Debt $111.6 Net Debt / Adjusted EBITDA (LTM) 1.5x Net Leverage Ratio 1.7x Compared with minimum bank Net Leverage Ratio covenant of 4.5x Liquidity1 $ 97.6 1 Liquidity is defined as cash and cash equiv
Slide 27: Very Seasonal Business
Very Seasonal Business Industry New School Bus Registrations Based on 3-Year Average FY2013-FY2015* 67% 33% Oct. - Mar. Apr. - Sep. (First Half) (Second Half) School districts generally prefer to take delivery just prior to start of new school year * RL Polk registration data 27
Slide 28: Future Growth & Profit Drivers
Future Growth & Profit Drivers 28
Slide 29: Future Growth & Profit Drivers
Future Growth & Profit Drivers Industry Volume Upside Growing Student Enrollment & Improved Funding Future Market Share Growth Growth & Increasing Alternative Fuel Penetration Profitability Continuous Product Enhancements Dealer Network Improvements Higher Operating Margins Second Shift Drive Produc
Slide 30: Summary
BLUE BIRD A heritage of looking ahead.
Slide 31: Strong Outlook
Strong Outlook Fundamentals are strong Industry is growing Positive outlook with growing student population Increasing house prices provide funding growth Growing interest in replacing old buses Blue Bird Advantages Acknowledged leader in propane First to market with Gasoline Bus F
Slide 32: Blue Bird
BLUE BIRD A heritage of looking ahead.
Slide 33: Appendix
Appendix BLUE BIRD A heritage of looking ahead.
Slide 34: Blue Bird Alternative Fuels
Blue Bird Alternative Fuels Iconic and Fastest Growing School Bus Brand Bus sales volume (units) up more than 60% since 2010 North American market share of 30% in 2015 is up 7 percentage points since 2010 Undisputed Leader in Alternative Fuel-Powered Bus Sales Sold ~6x more alternative-fue
Slide 35: Blue Bird Key Facts
Blue Bird Key Facts Leading independent designer and manufacturer of school buses Over 1,800 Employees Fabrication and assembly plants in Fort Valley, GA Service parts distribution center in Delaware, OH Type A small bus joint venture in Drummondville, Quebec Almost 90% of volume is sold
Slide 36: Key Senior Executives
Key Senior Executives Years Experience Auto Name Position Key Prior Experience Blue Bird Industry Phil Horlock President & Chief Executive Officer 38 7 Phil Tighe Chief Financial Officer 39 4 John Kwapis Chief Operating Officer 30 6 Tom Roberts Chief Administrative Officer 6 6 Mark Terry Chief Comme
Slide 37: Iconic History
Iconic History 2016 American Securities becomes majority shareholder 89 Years of Innovation 37
Slide 38: Customer View of Blue Bird
Customer View of Blue Bird 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 leadersh
Slide 39: FY2015 Year-End Balance Sheet
FY2015 Year-End Balance Sheet 39
Slide 40: FY2015 Income Statement
FY2015 Income Statement BLUE BIRD CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME((LOSS) Income tax (expense) benefit Equity in net income of non-consolidated affiliate Income from continued operations (Loss) income from discontinued operations, net of tax
Slide 41: FY2015 Consolidated Statement of Cash Flows
FY2015 Consolidated Statement of Cash Flows 41
Slide 42: FY2015 Cash Flow Reconciliations
FY2015 Cash Flow Reconciliations The following table sets forth the reconciliations of both Free Cash Flow and Adjusted Free Cash Flow for fiscal years 2013, 2014 and 2015: Memo: (in thousands of dollars) 2015 2014 2013 4Q2015 Net cash provided by continuing operations $ 23,495 $ 37,412 $ 35,981 $ 5
Slide 43: FY2015 Adjusted EBITDA Reconciliation
FY2015 Adjusted EBITDA Reconciliation 43
Slide 44: FY2015 Net Income to Adjusted Net Income
FY2015 Net Income to Adjusted Net Income 44
Slide 45: FY2015 Adjusted Non-GAAP Diluted EPS
FY2015 Adjusted Non-GAAP Diluted EPS 45
Slide 46: FY2015 Segment Revenue and Gross Profit
FY2015 Segment Revenue and Gross Profit 46
Slide 47: FY2016 3Q Balance Sheet
FY2016 3Q Balance Sheet (Gn thousands except for share data) Assets Current assets Cach and cach equivalents $ Accounts receivable, net Inventories Other current assets Deferred tax asset Total current assets $ Property, plant and equipment, net Goodwill Intangible assets, net Equity investment in a
Slide 48: FY2016 3Q Income Statement
FY2016 3Q Income Statement 48
Slide 49: FY2016 3Q Consolidated Statement of Cash Flows
FY2016 3Q Consolidated Statement of Cash Flows 49
Slide 50: FY2016 3QYTD Adjusted EBITDA
FY2016 3QYTD Adjusted EBITDA 50
Slide 51: FY2016 3QYTD Free Cash Flow
FY2016 3QYTD Free Cash Flow 51
Slide 52: END
BLUE BIRD A heritage of looking ahead.
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