Blue Bird Corporation · NASDAQ:BLBD
Blue Bird — Investor Presentation (March 2022)
30 slides from Blue Bird's investor presentation, March 2022
Slide 1: A Leader in zero- and low-emission transportation
“A Leader in zero- and low-emission transportation” BLUE BIRD CORPORATION (NASDAQ: BLBD) Investor Presentation March 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: Executive Summary
Executive Summary ▪ 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 alterna
Slide 6: School Bus Industry Overview
School Bus Industry Overview 6
Slide 7: School Bus Industry Products
School Bus Industry Products Type D FE Buses Type C Buses (Front Engine, Transit-Style) (Conventional) Seating Capacity: 54-90 Seating Capacity: 36-83 Fuel Type: Diesel Fuel Types: Diesel, Propane, CNG, Gasoline, Electric Type A Buses Type D RE Buses Seating Capacity: 10-30 (Rear Engine, Transit-Sty
Slide 8: 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 9: Type C & D School Bus Industry
Type C & D School Bus Industry Mean: 31,000 11111111111111 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 d
Slide 10: 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 35,000 43%+ of the fleet is 30,000 10 years and older 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 11: Company & Product Highlights
Company & Product Highlights 11
Slide 12: Dedicated Manufacturing Footprint
Dedicated Manufacturing Footprint Micro Bird JV Facility (Drummondville, Quebec, Canada) Micro Bird JV Facility Parts Distribution Center Parts Distribution Center (Drummondville, Quebec) (Delaware, Ohio) (Delaware, Ohio) Design, fabrication, and Electronically guided, houses Commentary assembly of
Slide 13: Our Exclusive Franchised Dealer Network
Our Exclusive Franchised Dealer Network ▪ Dedicated dealer network is key in the school bus market ▪ Relationship-based business with more than 10k school districts and more than 3k contractors ▪ Nearly all bus purchases are competitively bid ▪ More than 85% of Blue Bird dealers dedicated to bus sal
Slide 14: Proven Leadership in Clean Technologies
Proven Leadership in Clean Technologies 14000 Diesel Gas Propane CNG Electric Alt-Power mix 90% 12000 11,649 80% ▪ Proven track record of leadership in 11,317 11,017 new technologies; more than 50% of 10,378 10,616 unit sales are non- diesel 70% 10000 9,064 8,878 60% 50% 8000 50% ▪ Leader in electri
Slide 15: FY2022 Objectives
FY2022 Objectives 15
Slide 16: FY2022 Objectives & Focus Areas
FY2022 Objectives & Focus Areas Our People Lean Transformation Expanding Our TAM Scaling EV 16
Slide 17: FY2022 Focus Areas: Our People and Lean Transformation
FY2022 Focus Areas ▪ Lobby/Main cafeteria upgrades Our People ▪ Break areas renovations ▪ App for employees with real time schedule and production information ▪ Employee councils ▪ Visual management & 5S Transformation ▪ Daily stand-ups SQCDP Lean ▪ Focused on non-value added activities ▪ See clear
Slide 18: Expanding Our TAM and Scaling EV
FY2022 Focus Areas ▪ TAM over 30,000, effectively Expanding Our TAM doubling Blue Bird’s market Total Addressable Market ▪ Targeting High-end Motorhome (‘000’s of units) and Last Mile Delivery Stripped 31 Chassis 19 ▪ Minor modifications required to 12 current school bus chassis ▪ Progressing on eng
Slide 19: 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 20: Implemented Variable Pricing (PPI), Kept Fixed Price Option
Implemented Variable Pricing (PPI*), Kept Fixed Price Option Volume/ Concession New Variable Pricing Model Fixed Price + Escalator, or Only Variable Price (PPI) • The traditional school bus Variable Price (PPI) pricing model does not work in Only Variable Dealer/ the current inflationary Price (PPI)
Slide 21: Solid Growth Runway
Solid Growth Runway 21
Slide 22: Positive Long-Term Outlook
Positive Long-Term Outlook Continuing to deliver structural / margin improvements ▪ Gross margin should expand as production volume returns ▪ Supply chain shows some bright spots of improvement ▪ Total price increases of ~ 11% effective starting in 2H-FY2022 ▪ Additional 4% just announced; expected
Slide 23: 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 15,000 3,000 FY2022 Guidance 12,000-12,500 11,646 2,500 11,317 11,017 11,000-11,500 1,750-2,000 • Challenging 1H, with 10,000 8,878 1,250- 2,000 expected volume and 7,
Slide 24: Appendix
APPENDIX 24
Slide 25: FY2022 Guidance: First half significantly impacted by supply chain
FY2022 Guidance: First half significantly impacted by supply chain FY2021 FY2022 B/(W) $ Millions Guidance Net Revenue $684 $750 - $850 nnnll $66- $166 Adj. EBITDA1 $34 $30 - $50 $(4) - $16 Adj. Free Cash Flow1 $(62) $35 - $55 $97 - $117 ▪ 1H FY2022 impacted supply chain disruptions, limiting the un
Slide 26: FY2021 to FY2022 Adj. EBITDA Walk
FY2021 to FY2022 Adj. EBITDA Walk 1Q Unit Volume ($ Millions) FY2022 –1,149 FY2021 – 1,255 Variance – (106) 4% of Net Rev. 3% of Net Rev. Positive Adj. EBITDA, despite difficult supply chain environment, and with restored pay and engineering expense See appendix for additional detail regarding non-G
Slide 27: Balance Sheet and Liquidity
Balance Sheet and Liquidity As of ($ Millions) Jan 1, 2022 Debt $165.3 Cash 4.1 Net Debt $161.2 Net Debt / Adjusted EBITDA 5.0x Net Leverage Ratio 5.74x TTM EBITDA1 $28.0 versus a minimum required TTM EBITDA covenant of $14.5M Liquidity2 $92.8 versus a minimum required liquidity covenant level of $1
Slide 28: Balanced Costing and Pricing Actions
Balanced Costing and Pricing Actions Costing Actions 2H-22 Pricing Actions ▪ Backlog margin recovery actions ▪ Executed steel hedge for all of taken 2022 planned production ▪ Reduced quote guarantee from ▪ Engineering second or third 90 to 60 days source suppliers for key components ▪ Previously ann
Slide 29: FY2022 Balance Sheet and Cash Flow Summary
FY2022 Balance Sheet and Cash Flow Summary ($ Millions) 1Q FY2022 1Q FY2021 B/(W) Cash $4.1 $23.9 $(19.8) Debt $165.3 $171.0 $5.7 Operating Cash Flow $(33.1) $(11.5) $(21.6) Adj. Free Cash Flow1 $(34.1) $(13.9) $(20.2) Trade Working Capital* $(24.0) $(16.4) $(7.6) Free Cash Flow lower primarily due
Slide 30: School Bus & Commercial Classifications
School Bus & Commercial Classifications School Bus Commercial Classification Classification Type C Buses (Conventional) Class 5, 6 & 7 Seating Capacity: 36-83 Fuel Types: Diesel, Propane, CNG, Gasoline, Electric Type D RE/FE Buses (Transit-Style) Seating Capacity: 54-90 Fuel Types: Diesel, CNG, Elec