Blue Bird Corporation · NASDAQ:BLBD
Blue Bird — Q3 FY2019 Earnings Presentation
25 slides from Blue Bird's earnings presentation, Aug 7, 2019
Slide 1: Fiscal 2019 Third Quarter Results
Blue Bird Corporation (Nasdaq: BLBD) Fiscal 2019 Third Quarter Results Earnings Conference Call August 7, 2019
Slide 2: Agenda
Agenda ▪ Introductions & Forward-Looking Statements – Mark Benfield – Director, Investor Relations ▪ Business Overview – Phil Horlock – President & CEO ▪ Financial Results – Phil Tighe – CFO ▪ Outlook and Guidance – Phil Horlock – President & CEO ▪ Q&A – Group This presentation includes forward-look
Slide 3: Business Overview
Phil Horlock President & CEO BUSINESS OVERVIEW 3
Slide 4: Overview
Overview ▪ Strong 3Q result with Adjusted EBITDA up 20% • Adjusted EBITDA of $29.0M, $4.9M above last year; fourth consecutive quarter of increased profit • 3,420 buses sold, 326 buses lower than last year, primarily due to customer-delivery timing • Total Net Sales of $308.8M, $5.4M or 2% below las
Slide 5: Significant Operating Achievements
Significant Operating Achievements All-New Paint Facility Significant increase in Introduced New and Quality selling price per bus Exclusive “X-Parts” Brand Costs for School Buses +$6k Capacity k Adj. EBITDA Margin k Transformational Soft Launch commenced; Service and maintenance initiatives on trac
Slide 6: YTD and 3Q Financial Results
YTD and 3Q Financial Results Bus Sales Total Net Sales YTD 3Q YTD 3Q $626.4M $292.2M $675.3M $308.8M Down $21.1M Down $5.5M Down $18.0M Down $5.4M Parts Sales Adj. EBITDA1 YTD 3Q YTD 3Q $48.9M $16.6M $48.5M $29.0M Up $3.1M Up $0.1M Up $7.2M Up $4.9M YTD bus sales shortfall will narrow in 4Q. Profits
Slide 7: Alternative-Fuel Leadership
Alternative-Fuel Leadership FY2019 3Q Highlights ▪ 3Q alternative-fuel unit sales were 38% higher than prior year and record 3Q sales mix at 53% ▪ YTD 1 unit sales and order backlog up 21% ▪ Electric bus interest is very strong Up ~20% ▪ Adding 150+ new alternative fuel customers in FY2019 + Opportu
Slide 8: Driving Down Total Costs
Driving Down Total Costs Purchased Material Commercial Sourcing Material & Design Operating Costs Cost of Production New Paint Facility First-Time Pass Rate 1 Straight Time Capacity Labor Cost Material Cost Warranty Expense Plant Rearrangement Re-Organize Stations Labor Efficiencies 2 Waste In-Line
Slide 9: 3Q Financial Results
Phil Tighe CFO 3Q FINANCIAL RESULTS 9
Slide 10: 3Q Results – Summary
3Q Results – Summary ($ Millions unless noted) 3Q FY2019 3Q FY2018 B/(W) Unit Volume 3,420 3,746 (326) Net Revenue $308.8 $314.2 $(5.4) Bus Rev./Unit ($000's) $85.4 $79.5 $6.0 Gross Margin 13.5% 11.8% 1.7 pts. Net (Loss) Income $14.6 $21.9 $(7.3) Adj. Net Income1 $18.3 $26.2 $(7.9) Adj. EBITDA1 $29.
Slide 11: 3Q FY2018 to FY2019 Adj. EBITDA Walk
3Q FY2018 to FY2019 Adj. EBITDA Walk Bus volume down 326 ($ Millions) units, improved mix and higher parts profits Commodity & other cost increases Pricing and cost reductions through Transformational Initiatives drive higher profits despite lower volume and higher commodity and other costs 1See app
Slide 12: 3Q FY2019 Free Cash Flow
3Q FY2019 Free Cash Flow 3Q ($ Millions) FY2019 FY2018 Adjusted EBITDA $ 29.0 $ 24.2 Cash Paid for Interest (Net) (2.9) (1.6) Trade Working Capital1 (20.7) 14.8 CAPEX (7.4) (8.6) Cash Taxes (0.1) (0.1) Other2 6.1 7.5 Adjusted Free Cash Flow $ 4.0 $ 36.2 Operational Transformation (0.7) (3.2) Initiat
Slide 13: Improving Net Debt, Leverage & Liquidity
Improving Net Debt, Leverage & Liquidity ($ Millions) As of June 29, 2019 Debt $210.4 Cash 29.1 Net Debt $181.3 Net Debt / Adjusted EBITDA 2.3x Net Leverage Ratio 2.6x Compared with minimum bank Net Leverage Ratio covenant of 4.0x Liquidity1 $97.2 1 Liquidity is defined as cash and cash equivalents
Slide 14: Outlook & Guidance
Phil Horlock President & CEO Outlook & Guidance 14
Slide 15: Profit and Margin Growth Targeted for FY2019
Profit and Margin Growth Targeted for FY2019 ▪ School bus market on track for another strong ~34-35,000 unit industry, supported by continued growth in property taxes, age of the fleet and funding from VW Settlement ▪ Blue Bird expects substantially higher gross profit margins than FY2018 due to: ◦
Slide 16: 4Q FY2018 to FY2019 Adj. EBITDA Outlook
4Q FY2018 to FY2019 Adj. EBITDA Outlook ($ Millions) Five consecutive quarters of profit growth driven by consistent strategy 1See appendix for additional detail regarding Adjusted EBITDA 16
Slide 17: Reaffirming FY2019 Full Year Guidance
Reaffirming FY2019 Full Year Guidance 4Q FY 2019 FY2018 FY2019 FY2019G Outlook (to midpoint of $ Millions Actual Guidance B/(W) FY2018 YTD FY2019 Guidance) $990 - Net Sales $1,025 $(35) - $0 $675 $333 $1,025 Adj. EBITDA1 $70 80-85 $10 - $15 $48 $34 Adj. Free Cash $40 $24 - $28 $(12) - $(16) $(38) $6
Slide 18: (2) BLUE BIRD.
(2) BLUE BIRD.
Slide 19: Appendix
Appendix (2) BLUE BIRD.
Slide 20: Adj. EBITDA Reconciliation
Adj. EBITDA Reconciliation Reconciliation of Net Income to Adjusted EBITDA Three Months Ended Nine Months Ended (in thousands of dollars) June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Net income $ 14,601 $ 21,891 $ 12,708 $ 15,888 Adjustments: Discontinued operations income — — — (81) Inte
Slide 21: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation Reconciliation of Free Cash Flow to Adjusted Free Cash Flow Three Months Ended Nine Months Ended (in thousands of dollars) June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Net cash provided by (used in) operating activities $ 7,659 $ 40,079 $ (19,113) $ 7,022 Cas
Slide 22: Adjusted EPS Reconciliation
Adjusted EPS Reconciliation Reconciliation of Net Income to Adjusted Net Income Three Months Ended Nine Months Ended (in thousands of dollars) June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018 Net income $ 14,601 $ 21,891 $ 12,708 $ 15,888 Adjustments, net of tax benefit or expense (1) Operati
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.