Blue Bird Corporation · NASDAQ:BLBD
Blue Bird — Investor Presentation (September 2022)
30 slides from Blue Bird's investor presentation, September 2022
Slide 1: Blue Bird Corporation Investor Presentation September 2022
“A Leader in zero- and low-emission transportation” BLUE BIRD CORPORATION (NASDAQ: BLBD) Investor Presentation September 2022
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 Executive Summary School Bus Industry Overview Company & Product Highlights Priorities & Outlook 4
Slide 5: Investment Highlights
Investment Highlights Well positioned for growth given the backdrop of an aging school bus fleet Primed to be a direct beneficiary of $5B of infrastructure US Government’s commitment to electrification of school buses Leading market position in alternative power with a scaling EV business and an exp
Slide 6: Company & Product Highlights
Company & Product Highlights 6
Slide 7: 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) ▪ ~50% of Blue Bird sales are non-diesel; <10-20% for competitors Footprint Parts Distributi
Slide 8: Proven Leadership in Clean Technologies
Proven Leadership in Clean Technologies 14000 Diesel Gas Propane CNG Electric Alt-Power mix 90 % ▪ Proven track record of leadership in new technologies; more than 50% of unit sales are non- diesel 80 % 12000 11,649 11,317 11,017 10,378 10,616 70 % ▪ Leader in electric and propane- 9,064 10000 power
Slide 9: EPA 2022 Clean School Bus Rebate Program
EPA 2022 Clean School Bus Rebate Program $500M of $5B released in 2022 Expected Orders Lottery Application Period Lottery Winners Payment to Winners May-August 19, 2022 Notified October 2022 – (Up to 25 buses/applicant) October 2022 April 2023 EV ▪ Award amount for ZEV between $250k (non-priority) a
Slide 10: School Bus Industry Overview
School Bus Industry Overview 10
Slide 11: 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 12: 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 ~510,000 units and average age is about 10 years ▪ Industry size is driven by: ▪ Num
Slide 13: Fleet Age Profile Supports Industry Levels
Fleet Age Profile Supports Industry Levels ~510K School Buses on the Road as of the end of FY2021 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 - 0 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 ~219K buse
Slide 14: FY2022 Objectives
FY2022 Objectives 14
Slide 15: FY2022 Objectives & Focus Areas
FY2022 Objectives & Focus Areas Our People Lean Transformation Expanding Our TAM Scaling EV 15
Slide 16: FY2022 Focus Areas
FY2022 Focus Areas Focus Area Completed Future Levers ✓ Leadership team transformation near completion o Continuing upgrades in the manufacturing facility ✓ Recruited senior-level talent in a variety of areas o Improving the span of control and accountability in Our People ✓ Rolled out a comprehensi
Slide 17: 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 18: Solid Growth Runway
Solid Growth Runway 18
Slide 19: Positive Business Outlook
Positive Business Outlook 1. Fundamentals of our industry and demand for Blue Bird buses are strong ▪ Blue Bird’s record backlog of 6,300 buses worth $700m 2. Recovering economics through pricing ▪ Gross margin should continue to expand as fully-priced units in the backlog are built and sold ▪ Total
Slide 20: Almost half of the FY22 volumes comes from FY21 orders
Almost half of the FY22 volumes comes from FY21 orders ▪ Standard Gross Margin Volume (SGM) quarterly improvement driven by Structure price increases and maturing backlog SGM/Unit Units/Mo ▪ Collaborated with our Q3FY22 Orders Dealers to combat increased costs through Q2FY22 Orders pricing and backl
Slide 21: Long-Term Outlook Driven by Market Recovery, EV, and Lean Transformation
Long-Term Outlook Driven by Market Recovery, EV, and Lean Transformation Units Revenues $M Gas CNG Outlook Rev. $M Diesel Propane EV FY2022 Guidance 15,000 3,000 12,000-12,500 • FY2022 was impacted 11,317 11,646 11,000-11,500 2,500 11,017 1,750-2,000 supply chain disruptions 10,000 8,878 1,250- 2,00
Slide 22: 3Q22 Financials
3Q22 Financials 22
Slide 23: Q3 Income Statement
Q3 Income Statement ($ Millions) FY2022 FY2021 B/(W) Unit Volume 1,726 2,024 (298) Unit Backlog 6,297 3,946 2,351 Net Revenue $206.1 $196.7 $9.4 Bus Rev./Unit ($000's) $108.1 $89.8 $18.3 Gross Margin 10.5% 13.3% (280) bps Adj. Net Income1 $(2.9) $5.2 $(8.1) Adj. EBITDA1 $8.8 $13.2 $(4.4) Adj. EBITDA
Slide 24: FY2021 Q3 to FY2022 Q3 Actuals Adj. EBITDA Walk
FY2021 Q3 to FY2022 Q3 Actuals Adj. EBITDA Walk Q3 Unit Volume ($ Millions) FY2021 2,024 Strong parts FY2022 1,726 volume and Variance (298) margin growth Cost controls, $13.2 $0.2 partially offset by lower JV profits $(0.6) $0.1 $8.8 Pricing starting catch up to material cost $(4.1) increases Suppl
Slide 25: Normalized Q3 result w/o supply chain constraints at ~$21M
Normalized Q3 result w/o supply chain constraints at ~$21M Q3 Unit Volume ($ Millions) Strong parts FY2021 2,024 ~$21 FY2022 1,726 volume and margin growth Result w. Variance (298) additional 500 missed volume ~$5 opportunity (at 2.5k units) Cost controls, $13.2 $0.2 partially offset by lower JV pro
Slide 26: Balance Sheet and Liquidity
Balance Sheet and Liquidity As of ($ Millions) July 2, 2022 Debt1 $213.6 Cash1 26.5 Net Debt1 $187.1 Net Debt / Adjusted EBITDA1 20.1x Net Leverage Ratio2 23.7x TTM EBITDA2 $8.7 versus a minimum required TTM EBITDA covenant of $(6.8)M Liquidity2 3 $60.2 versus a Q3 minimum required liquidity covenan
Slide 27: Balance Sheet and Cash Flow Summary
Balance Sheet and Cash Flow Summary ($ Millions) 3Q FY2022 3Q FY2021 B/(W) Cash $26.5 $11.2 $15.3 Debt $213.6 $166.6 $(47.0) Operating Cash Flow $(43.0) $(3.0) $(40.0) Adj. Free Cash Flow1 $(40.2) $(5.5) $(34.7) Trade Working Capital* $(45.5) $(13.2) $(32.3) Free Cash Flow decreased primarily due to
Slide 28: FY2022 Guidance: Strong Q3, EV Chip shortage in Q4
FY2022 Guidance: Strong Q3, EV Chip shortage in Q4 Initial Q2 Revised Q3 Updated ▪ 1H FY2022 was by impacted supply FY2021 FY2022 FY2022 FY2022 B/(W) chain disruptions limiting the units $ Millions Act. Guidance Guidance Guidance Vs. Prior Year sold and creating inefficiencies; backlog margin compre
Slide 29: Wrap-Up
Wrap-Up ▪ Schools have broadly reopened; good news for bus ▪ Full range of chassis that can be offered to third parties, orders led by EV ▪ Aging school bus fleet ▪ Reducing structural costs through lean transformation, scaling EV business and expanding the firm’s Total ▪ Leader in alternative power
Slide 30: End
End 30