Blue Bird Corporation · NASDAQ:BLBD
Blue Bird — Investor Presentation (December 2023)
38 slides from Blue Bird's investor presentation, December 2023
Slide 1: Blue Bird Corporation Investor Presentation December 2023
“A Leader in zero- and low-emission transportation” BLUE BIRD CORPORATION (NASDAQ: BLBD) Investor Presentation December 2023
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 Investment Highlights School Bus Industry Overview Company & Product Highlights FY2024 Objectives Growth Runway 4
Slide 5: Investment Highlights
Investment Highlights Countercyclical Strong industry growth ahead with a backdrop of healthy funding and an aging school bus fleet National Commitment Beneficiary of $5B US Government’s commitment to the electrification of school buses The Leader Leading market position in alternative power and ele
Slide 6: School Bus Industry Overview
School Bus Industry Overview 6
Slide 7: 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 8: Type C & D School Bus Industry
Type C & D School Bus Industry ▪ Industry avg size is 30,500 new units annually based on Polk registrations ▪ Total fleet of school buses is ~515,000 units and average age is about 10 years ▪ Industry size is driven by: ▪ Number of school age children ▪ Age of existing fleet – most states set 15 yea
Slide 9: Fleet Age Profile Supports Industry Levels
Fleet Age Profile Supports Industry Levels ~515K School Buses on the Road as of the end of CY2022 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 - 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 35 ~221K bus
Slide 10: Company & Product Highlights
Company & Product Highlights 10
Slide 11: 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) ▪ 60%+ of Blue Bird sales are non-diesel; <10-20% for competitors Footprint Parts Distributi
Slide 12: Proven Leadership in Clean Technologies
Proven Leadership in Clean Technologies ▪ Proven track record of leadership in new technologies; more than 60% of unit sales are non- diesel ▪ Leader in electric and propane- powered school buses; the future of school transportation ▪ $5B of Federal funding secured in the infrastructure bill for ele
Slide 13: EPA Clean School Bus Program Round 2 and Round 3
EPA Clean School Bus Program Round 2 and Round 3 The Bipartisan Infrastructure Law of 2021 authorizes EPA to offer rebates and grants to replace existing school buses with clean and zero-emission (ZE) models. Round 2 (2023 Grant Program) Round 3 (2023 Rebate Program) ▪ $400 Million available ▪ $500
Slide 14: 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 15: Fueling Our EV Long-Term Growth: Fleet-as-a-Service JV
Fueling Our EV Long-Term Growth: Fleet-as-a-Service JV ➢ Formed “Clean Bus Solutions” – 50/50 JV with Generate Capital and Blue Bird to accelerate electric school bus adoption; exclusive to Blue Bird customers and dealers ➢ Buses purchased By JV through dealer network ➢ Offers affordable monthly ser
Slide 16: FY2024 Objectives
FY2024 Objectives 16
Slide 17: 2024 Priorities Align with Our Strategy
2024 Priorities Align with Our Strategy Leader in Safety Best Great Products Service & Features Highest Competitive Quality & Cost Durability Alt Power Leader Our core strategies drive our plans towards profitable growth 17
Slide 18: Significant Investments Starting in FY2024
Significant Investments Starting in FY2024 Products and Powertrain Manufacturing and Supply Chain People and Processes • Next gen Ford Gas / Propane • Evaluate capacity expansion • Inflationary pressures and labor • Product enhancements for EV • Production facility updates • Competitive employee ben
Slide 19: Legacy Units Behind, New Normal Backlog Margins Ahead
Legacy Units Behind, “New Normal” Backlog Margins Ahead Status 09/30/23 FY23 Backlog (20-25% pricing) FY22 Newer Backlog (11-15% pricing) Production Quarter FY21 Old Backlog (0-5% pricing) 28% 31% 64% 74% 82% 92% FY2024 Mid-Year 100% 100% 57% price increase of 72% $2,500/bus for orders 26% 36% after
Slide 20: FY2024 Guidance Raised to $115M and ~10% EBITDA
FY2024 Guidance Raised to $115M and ~10% EBITDA 1 +27 Adj. EBITDA (+30%) ($M) 115 105 - 125 88 FY24 Updated Scenarios Downside Guidance Upside FY24 QTRs: Supply Chain Revenue $275 - $325M Units 8,500 8,750 9,000 Adj. EBITDA Revenue $M $1,150 $1,200 $1,250 $25 - $35M 9% - 11% Adj. EBITDA $M $105 $115
Slide 21: FY2024 Guidance Raised to $115M and ~10% EBITDA
FY2024 Guidance Raised to $115M and ~10% EBITDA FY2023 FY2024 FY2024 B/(W) $ Millions Actuals Initial Aug. Dec. Updated Vs. Prior Year Guidance Guidance Net Revenue $1,133 $1,100 – $1,200 $1,150 - $1,250 $17 - $117 Adj. EBITDA1 $88 $75 - $95 $105 - $125 $17 - $37 Adj. Free Cash Flow1 $121 N/A $50 -
Slide 22: Record Profit Outlook in FY2024 & Beyond
Record Profit Outlook in FY2024 & Beyond Bookings 3%+ = ~8,750 units Revenue 6%+ = ~$1.2 Billion ~10% Adj. EBITDA 30%+ = ~$115 Million CAGR Adj. EBITDA 2 ppts+ = ~10% Margin EV Bookings 65%+ = ~900 units *ACT Retail Sales – as of October 2023 EBITDA margins of ~10% NOW and 11%-12% mid term, in a nor
Slide 23: Solid Growth Runway
Solid Growth Runway 23
Slide 24: Profitable Growth Driven by EV and Lean Transformation
Profitable Growth Driven by EV and Lean Transformation Revenue $M Gas/Propane EV Units December Updated Outlook → Diesel CNG Rev. $M -2,503 Updated Normal 11,646 (-23%) Guidance Year 12,000 12,000 11,317 11,017 11,000 3,000 10,500 10,000 8,878 9,500 2,500 8,514 8,750 8,000 6,679 6,822 2,000 2,000 1,
Slide 25: Strong Outlook Ahead for Blue Bird / Investment Highlights
Strong Outlook Ahead for Blue Bird / Investment Highlights Countercyclical Strong industry growth ahead with a backdrop of healthy funding and an aging school bus fleet National Commitment Beneficiary of $5B US Government’s commitment to the electrification of school buses The Leader Leading market
Slide 26: Appendix
Appendix 26
Slide 27: FY2023 Q4 and Full Year Financial Results
FY2023 Q4 and Full Year Financial Results FY2023 Q4 Results FY2023 Full Year Results FINANCIAL HIGHLIGHTS FINANCIAL HIGHLIGHTS UNITS NET UNITS NET SOLD SALES SOLD SALES 2,116 $303M 8,514 $1,133M +100 vs.’22 +$45M vs.’22 +1,692 vs.’22 +$332M vs.’22 Adjusted Adjusted Adjusted Adjusted EBITDA FCF EBITD
Slide 28: Fourth Quarter Income Statement
Fourth Quarter Income Statement ($ Millions) FY23-Q4 FY22-Q4 B/(W) Unit Volume 2,116 2,016 100 Unit Backlog 4,559 5,016 (457) Net Revenue $303.0 $257.7 $45.3 Bus Rev./Unit ($000's) $131.2 $117.0 $14.2 Gross Margin 16.5% (1.7)% 18.2 ppts Adj. Net Income1 $21.3 $(21.4) $42.7 Adj. EBITDA1 $40.7 $(16.2)
Slide 29: Full Year Income Statement
Full Year Income Statement ($ Millions) FY2023 FY2022 B/(W) Unit Volume 8,514 6,822 1,692 Unit Backlog 4,559 5,016 (457) Net Revenue $1,132.8 $800.6 $332.2 Bus Rev./Unit ($000's) $121.5 $106.1 $15.4 Gross Margin 12.3% 4.6% 7.7 ppts Adj. Net Income1 $34.5 $(36.0) $70.5 Adj. EBITDA1 $87.9 $(14.7) $102
Slide 30: Balance Sheet and Cash Flow Summary
Balance Sheet and Cash Flow Summary ($ Millions) FY2023 FY2022 B/(W) Cash $79.0 $10.5 $68.5 Debt $(130.3) $(170.2) $39.9 Liquidity $163.4 $85.3 $78.1 Operating Cash Flow $119.9 $(24.4) $144.3 Adj. Free Cash Flow1 $121.1 $(22.8) $143.9 Trade Working Capital* $36.4 $6.0 $30.4 Strong Operating Cash Flo
Slide 31: New Debt Agreement in Place Confirms Our Strong Position
New Debt Agreement in Place Confirms Our Strong Position ▪ Duration 5 years, November 17 2023 - 2028 Pricing Grid SOFR ▪ Term loan $100M, 5% per year amortization SOFR Unused Net Leverage Ratio Margin Fee ▪ Revolver $150M, no amortization > 2.25x 325 bps 45 bps ▪ Accordion Upsize option $100M or TTM
Slide 32: FY23 Best Year EVER
FY22 to FY23 Adj. EBITDA Walk: $103M YoY Improvement 1 Adj. EBITDA + 103 ($M) 88 Unit Volumes FY2022 6,822 FY23 Best Year EVER FY2023 Delta 8,514 1,692 Record Revenue +40% Record EVs +100% Record Adj. EBITDA +$103M YoY Record Cash Flow +$144M YoY 8% (2)% Units up 25% from ~6,800 to ~8,500, EV double
Slide 33: FY22 to FY23 Adj. EBITDA Walk: $103M YoY Improvement
FY22 to FY23 Adj. EBITDA Walk: $103M YoY Improvement ($ Millions) +103 Unit Volumes FY2022 6,822 17 FY2023 8,514 Delta 1,692 17 88 Pricing, JV Net Income (17) EV Mix 20 + ITDA Addback Labor Costs 66 Higher Rev. SG&A and and Margins Engineering Efficiency Improvements, Operating Leverage 8% (2)% (15)
Slide 34: After Rising Recently, Steel Prices Are Expected to Flatten
After Rising Recently, Steel Prices Are Expected to Flatten US Steel Prices, USD/ST, Jan ‘22– Apr ‘24 HR HR Fut. CR Scrap Scrap Fut. Futures 2,000 12/8 6/8 12/7 1,500 1,300 1,200 US Steel Price $/ST 1,000 880 1,054 930 683 500 429 317 357 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar A
Slide 35: Adj. EBITDA Reconciliation
Adj. EBITDA Reconciliation 35
Slide 36: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation 36
Slide 37: Adjusted EPS Reconciliation
Adjusted EPS Reconciliation 37
Slide 38: Investor Relations Contact Information
Investor Relations Contact Information Mark Benfield Mark.Benfield@Blue-Bird.com 38