Blue Bird Corporation · NASDAQ:BLBD
Blue Bird — 28th Annual Roth Conference 2016
43 slides from Blue Bird's conference presentation, March 2016
Slide 1: Blue Bird Corporation - 28th Annual Roth Conference
Blue Bird Corporation (Nasdaq: BLBD) 28th ANNUAL ROTH CONFERENCE March 13-16, 2016
Slide 2: Agenda
Agenda Industry Overview Blue Bird Overview Future Growth & Profit Drivers Financials 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 results to be m
Slide 3: Industry Overview
Industry Overview E> .LUvE BIRD A heritage of looking ahead.
Slide 4: Industry Overview
Industry Overview School Bus Customers ~3,400 Contractors ~10,000 School Districts School buses are an important part of America’s infrastructure 4
Slide 5: Market Recovery
Market Recovery Type C/D School Bus Recovery Historical Registrations Projected Registrations Historical Avg. ('85-'15) 40,000 37,641 34,884 35,000 32,200 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 2013 2015 2017 2019 Source:
Slide 6: 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 Total Projected U.S. Enrollment (000’s of E
Slide 7: Attributes Considered When Buying a Bus
Attributes Considered When Buying a Bus Product Attributes Ranked in Order of Importance #1 Safety #2 Quality, Reliability and Durability #3 Operating Costs #4 Acquisition Cost #5 How the Bus Drives Safety is the most important attribute considered Source: Freedonia Custom Research, Inc. 9/4/2013 (s
Slide 8: 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 8
Slide 9: Blue Bird Overview
Blue Bird Overview E> .LUvE BIRD A heritage of looking ahead.
Slide 10: Iconic History
Iconic History Biue Bird #1 Built by Company [RO BIRD 20 Se MICRO.B Established Joint Venture — with Girardin to Produce ‘Type A Buses First Bectrio-Powered 702000 Type D Bus Soni oe 88 YEARS OF INNOVATION 10
Slide 11: 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 12: Blue Bird Highlights
Blue Bird Highlights 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-fuel buses
Slide 13: Product-Focused Company
Product-Focused Company Full Product Range “Build the Best Bus” Expansive & innovative Type C Buses Type D Buses product cycle plans 66% Net Sales 22% Net Sales Leader in alternative fuels Exclusive engine offerings Differentiated product features Research-driven product Type A Buses enhan
Slide 14: 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 15: Future Growth & Profit Drivers
Future Growth & Profit Drivers 15
Slide 16: Future Growth & Profit Drivers
Future Growth & Profit Drivers Industry Volume Upside School Bus Market Recovery Future Market Share Growth Growth & Increasing Propane Penetration Profitability Continuous Product Enhancements Dealer Network Improvements Higher Operating Margins Second Shift Drive Productivity Deliver Parts Growth
Slide 17: Continued Propane Momentum
Continued Propane Momentum Propane Market Leadership Propane Sales Propane Customers 14% unit volume growth over FY2014 +14% 1,688 33% increase in propane customers over FY2014 1,476 478 6x more propane-powered buses +33% registered than other manufacturers1 Highest owner loyalty in the mark
Slide 18: Positive Press on Propane Cost Savings
Positive Press on Propane Cost Savings “Broward County saves “DeKalb County adds environmentally-friendly over $600,000 with Blue Bird propane school buses” propane-powered buses” Propane is much cheaper (than diesel), at 89 cents a gallon School Transportation News August 14, 2015 District hope
Slide 19: Launching Four New Powertrains
Launching Four New Powertrains Gasoline Engine V8 Diesel Engine Blue Bird is the only manufacturer to offer a Type C Blue Bird is the only gasoline-powered school bus manufacturer to offer the Cummins ISV 5.0L V8 diesel Lower acquisition cost than in a school bus other fuel types Lower acqui
Slide 20: Broadest Range of Product Offerings
Broadest Range of Product Offerings Type D Rear Engine Alternative Fuel Type D Rear Engine Cummins ISL-G CNG Traditional Type C Cummins ISB/ISL Diesel Alternative Fuel Type D Front Engine Ford/ROUSH CNG Traditional Type C Cummins ISB Diesel Alternative Fuel Type C Ford/ROUSH Propane Traditional Type
Slide 21: New Markets & Products
New Markets & Products New Blue Bird team assembled to focus on international and commercial operations Currently only ~5% of revenue but plan to grow Expand into new international markets Expand commercial bus business in North America Continue to be preferred vehicle choice for U.S. Gove
Slide 22: Financials
Financials E> .LUvE BIRD A heritage of looking ahead.
Slide 23: Substantial Revenue Growth
Substantial Revenue Growth Bus Net Sales Parts Net Sales Bus Units Sales ($ in millions) $1,200 15,000 14,000 $1,000 $960-$985 $919 13,000 $856 $57 1 $800 $777 $54 $862 12,000 $46 $802 $598 $730 11,000 $600 $566 10,378 $44 $44 9,604 10,000 $554 $522 $400 8,654 9,000 8,000 $200 6,882 6,525 7,000 $- 6
Slide 24: Impressive Profit Growth
Impressive Profit Growth ($ in millions) Adjusted EBITDA Adjusted EBITDA Margin $80 $72-$75 14% $70 $70 $67 12% $60 $50 10% $50 8% $40 8% 8% 6% $30 6% $17 4% $20 $14 $10 3% 2% 2% $- 0% FY2011 FY2012 FY2013 FY2014 FY2015 FY2016G Guidance Memo GP Margin: 9% 9% 12% 13% 13% Consistent improvement with 3
Slide 25: Strong Cash Flow Generation
Strong Cash Flow Generation ($ in millions) Adjusted Free Cash Flow 1 $59 1 $45 $30-$35 $31 $15 $12 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016G Guidance Memo Capex: $5 $4 $5 $6 $5 $10-15 Business generates strong free cash flow 1Adjusted for Business Combination Expenses of $2M and $13M and Special C
Slide 26: Very Seasonal Business
Very Seasonal Business Industry New School Bus Registrations Based on 3-Year Average FY2013-FY2015* 67% 33% Oct. - Mar. Apr. - Sep. (First Half) (Second Half) School districts generally prefer to take delivery just prior to start of new school year * RL Polk registration data 26
Slide 27: Great Time to Invest
Great Time to Invest E> .LUvE BIRD A heritage of looking ahead.
Slide 28: Great Time to Invest in Blue Bird!!
Great Time to Invest in Blue Bird!! Fundamentals are strong Excellent sales momentum Industry recovering Big growth opportunity with propane Exciting new products launching Financial stability Outstanding free cash flow Not difficult to understand Only three competitors High barr
Slide 29: E> .LUvE BIRD
E> .LUvE BIRD A heritage of looking ahead.
Slide 30: Appendix
Appendix E> .LUvE BIRD A heritage of looking ahead.
Slide 31: FY2016 1Q Results Overview
FY2016 1Q Results Overview Overview Seasonality More Pronounced as Expected Softer quarter, as expected, with more units planned in the Second Half in alignment with natural customer demand; enabled by the launch of our new second shift Total net sales revenue down 21% from last year Gross m
Slide 32: Net Debt, Leverage & Liquidity
Net Debt, Leverage & Liquidity As of January 2, 2016 ($ Millions) Debt $ 194.9 Cash 16.6 Net Debt $ 178.3 Net Debt / Adjusted EBITDA (LTM) 2.6x Net Leverage Ratio (compared to minimum bank Net Leverage Ratio 2.5x covenant of 4.5x) Liquidity1 $ 61.5 1 Liquidity is defined as cash and cash equivalents
Slide 33: FY2015 Year-End Balance Sheet
FY2015 Year-End Balance Sheet 33
Slide 34: 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 35: FY2015 Consolidated Statement of Cash Flows
FY2015 Consolidated Statement of Cash Flows 35
Slide 36: 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 37: FY2015 Adjusted EBITDA Reconciliation
FY2015 Adjusted EBITDA Reconciliation 37
Slide 38: FY2015 Net Income to Adjusted Net Income
FY2015 Net Income to Adjusted Net Income 38
Slide 39: FY2015 Adjusted Non-GAAP Diluted EPS
FY2015 Adjusted Non-GAAP Diluted EPS 39
Slide 40: FY2015 Segment Revenue and Gross Profit
FY2015 Segment Revenue and Gross Profit 40
Slide 41: 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 42: Important Disclaimers
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 43: END
E> .LUvE BIRD A heritage of looking ahead.