Blue Bird Corporation · NASDAQ:BLBD
Blue Bird — Investor Presentation (August 2024)
41 slides from Blue Bird's investor presentation, August 2024
Slide 1: Blue Bird Corporation Investor Presentation August 2024
“A Leader in zero- and low-emission transportation” BLUE BIRD CORPORATION (NASDAQ: BLBD) Investor Presentation August 2024
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 Elevated Replacement Demand
Fleet Age Profile Supports Elevated Replacement Demand ~570K School Buses on the Road as of March 2024 Low replacements due to 40,000 supply chain challenges Average fleet age ~11 years 35,000 30,000 25,000 47%+ of School Buses are 20,000 10 years and older! 15,000 10,000 5,000 - 1 2 3 4 5 6 7 8 9 1
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: Significant Federal Funding for EV School Buses
Significant Federal Funding for EV School Buses The Bipartisan Infrastructure Law of 2021 authorizes EPA to offer rebates and grants to New Program announced, utilizing Inflation replace existing school buses with clean / zero-emission models – $5B Funding over 5 years Reduction Act funding EPA CSB
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 Sustained Profitable Growth 8% 13% 15% EBITDA Margin Highest Competitive Quality & Cost Durability Alt Power Leader Our core strategies drive our plans towards profitable growth 17
Slide 18: FY2024 Guidance Raised to $175M and 13% EBITDA
FY2024 Guidance Raised to $175M and 13% EBITDA 1 +87 Adj. EBITDA (+100%) ($M) 175 170 - 180 FY24 Updated Scenarios Downside Guidance Upside FY24 Q4: Supply Chain Qtr. Revenue 88 $300 - $330M Units 8,600 8,800 9,000 Adj. EBITDA Revenue $M $1,300 $1,315 $1,330 $30 - $40M 10% - 12% Adj. EBITDA $M $170
Slide 19: FY2024 Guidance Raised to $175M and 13% EBITDA
FY2024 Guidance Raised to $175M and 13% EBITDA FY2024 FY2024 FY2023 May Aug Updated B/(W) $ Millions Actuals Vs. Prior Year Guidance Guidance Net Revenue $1,133 $1,275 - $1,325 $1,300 - $1,330 $167 - $197 Adj. EBITDA1 $88 $145 - $165 $170 - $180 $82 - $92 Adj. Free Cash Flow1 $121 $70 - $80 $80 - $9
Slide 20: Wrap-Up: Record Profit Outlook in FY2024 & Beyond
Wrap-Up: Record Profit Outlook in FY2024 & Beyond NA School Bus Industry Thousands Bookings 3%+ = ~8,800 units Class 6-7* 39.6 40.0 40.5 38.7 36.8 36.1 36.6 35.8 32.8 Revenue 15%+ = ~$1.3 Billion 29.6 30.5 26.4 25.7 ~7% Adj. EBITDA ~2x = ~$175 Million CAGR Adj. EBITDA 5 ppts+ = ~13% Margin EV Bookin
Slide 21: Solid Growth Runway
Solid Growth Runway 21
Slide 22: FY2025 Preliminary Guidance and Scenarios
FY2025 Preliminary Guidance and Scenarios Tailwinds FY25 Scenarios Headwinds Downside Prel. Guidance Upside • Strong demand Supply Chain • Supply chain Units 9,000 9,250 9,500 • Stable Pricing t/o EV Units 1,000 1,150 1,300 • Labor Costs (USW) • Propane exclusive Revenue $M $1,400 $1,450 $1,500 • Ma
Slide 23: We Are Increasing Our Long Term Outlook to 15% EBITDA
We Are Increasing Our Long Term Outlook to 15% EBITDA Revenue $M Diesel Gas/Propane EV 2024 Aug 2025 Outlook Outlook Rev. Units Mid Term Long Term (2027+) Updated Prelim. $M 11,317 11,646 Guidance Guidance 12,000 12,000 11,017 11,000 3,000 10,000 10,000 8,878 8,800 9,250 2,500 8,514 8,000 6,679 6,82
Slide 24: We Are Increasing Our Long Term Outlook to 15% EBITDA
We Are Increasing Our Long Term Outlook to 15% EBITDA Revenue $M Diesel Gas/Propane EV QTR Full YR 2024 Aug 2025 Outlook Outlook Rev. Units Updated Prelim. Mid Term Long Term (2027+) $M Guidance Guidance 12,000 2,500 2,304 2,254 400 12,000 11,000 3,000 2,137 2,116 2,129 2,151 10,000 2,000 10,000 8,8
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: Key Q3 Takeaways – All-Time Record Profit for a Quarter
Key Q3 Takeaways – All-Time Record Profit for a Quarter Record Quarterly Profit; Increasing Full Year Guidance and Long-Term Outlook Robust Market Demand, Increasing Order Share and Continuing Strong Backlog Supply Chain Largely Stable; Highly Engaged with Two Key Constrained Suppliers Substantially
Slide 28: FY24 Q3 Financial Results and Key Business Highlights
FY24 Q3 Financial Results and Key Business Highlights FY24 Q3 Results QUARTERLY HIGHLIGHTS BUSINESS HIGHLIGHTS Alt. Power Sales UNITS NET Mix of 59%; Signed first collective SOLD SALES Strong 60% YTD bargaining agreement with USW ~$775M 2,151 $333M Backlog of 5.2k Units1 EV Selected for +14 vs.’23 +
Slide 29: FY2024 Q3 and YTD Financial Results
FY2024 Q3 and YTD Financial Results FY2024 Q3 Results FY2024 YTD Results QUARTERLY HIGHLIGHTS Q3 YTD HIGHLIGHTS UNITS NET UNITS NET SOLD SALES SOLD SALES 2,151 $333M 6,534 $997M +14 vs.’23 +$39M vs.’23 +136 vs.’23 +$167M vs.’23 Adjusted Adjusted Adjusted Adjusted EBITDA FCF EBITDA FCF $48M $(4)M $14
Slide 30: Income Statement
Income Statement ($ Millions) FY2024-Q3 FY2023-Q3 B/(W) Unit Volume 2,151 2,137 14 Backlog Units 5,218 5,199 19 Net Revenue $333.4 $294.3 $39.1 Bus Rev./Unit ($000's) $143.2 $126.5 $16.7 / 13% Gross Margin 20.8% 15.5% 5.3 ppts Adj. EBITDA1 $48.2 $29.7 $18.5 Adj. EBITDA Margin1 14.5% 10.1% 4.4 ppts A
Slide 31: FY23-Q3 to FY24-Q3 Adj. EBITDA Walk: +$19M YoY
FY23-Q3 to FY24-Q3 Adj. EBITDA Walk: +$19M YoY ($ Millions) Unit Volumes FY23-Q3 2,137 +18.5 FY24-Q3 2,151 Delta +14 (+62%) 25.0 1.2 t/o EV Volumes (2.7) 48.2 FY23-Q3 148 FY24-Q3 204 Higher Rev. (5.0) Labor and OH and Margins Delta +56 Warranty Labor Costs Freight SG&A and 29.7 Engineering Pricing,
Slide 32: FY23-Q3 YTD to FY24-Q3 YTD Adj. EBITDA Walk: +$94M YoY
FY23-Q3 YTD to FY24-Q3 YTD Adj. EBITDA Walk: +$94M YoY ($ Millions) +94.4 Unit Volumes (+200%) FY23-Q3 YTD 6,398 117.6 FY24-Q3 YTD 6,534 3.8 Delta +136 141.6 (13.7) Higher Rev. (13.3) t/o EV Volumes Labor and OH and Margins FY23-Q3 YTD 375 Warranty Labor Costs FY24-Q3 YTD 620 Freight Delta +245 SG&A
Slide 33: Balance Sheet and Cash Flow
Balance Sheet and Cash Flow ($ Millions) FY2024-Q3 FY2023-Q3 B/(W) Cash $88.4 $50.5 $37.9 Debt $(96.1) $(134.9) $38.8 Liquidity $231.7 $134.2 $97.5 Operating Cash Flow $1.0 $39.4 $(38.4) Adj. Free Cash Flow1 $(3.5) $42.7 $(46.2) Trade Working Capital2 $(34.0) $2.0 $(36.0) Adj. Free Cash Flow decreas
Slide 34: TTM Performance Shows Sustained Profitable Growth
TTM Performance Shows Sustained Profitable Growth Rev. $303 $318 $346 $333 $1,300 $M Adj. EBITDA 1 182 ✓ Consistent Revenue in the $300M - $350M range ✓ Improved EV mix and Pricing realization maintained ✓ We beat and raised guidance for the last six quarters ✓ Record levels of 13%-15% Adj. EBITDA i
Slide 35: Capital Allocation Update
Capital Allocation Update Sources of Cash Uses of Cash Cash Flow from Operations FY24 R&D Expenditures <$25M Growth (incl. Tax, Interest, ∆WoC; excl. R&D) ~$158M CAPEX (incl. maintenance) <$25M JV CBS / Small M&A <$25M Existing Cash at YE23 ~$77M Total Funds Shareholders Available Share Repurchase P
Slide 36: First CBA agreement in place with USW
First CBA agreement in place with USW Key Contract Terms Run-rate Financial Impact One-time Impacts • Three years agreement (‘24-’27) • Avg. wage +12% in Year 1 • Signing bonus $750/person Jun’24 • ~1,500 people in scope • Year 2 at +4%, Year 3 at +4% • Signing bonus in Other Expense • Enhances pay
Slide 37: Working Capital – Dealer vs. Fleet / GSA Customer Segment
Working Capital – Dealer vs. Fleet / GSA Customer Segment Dealer Sales Flow RAW Inv. WIP Inv. FG Inv. BB Cash Transit PDI Customer (AP) Dealer Floor Plan (~2 days) Fleet / GSA Sales Flow RAW Inv. Customer WIP Inv. FG Inv. Transit PDI BB Cash (AP) (AR) 1-2 weeks 1-4 weeks 30+ days Unit sold 6 – 12+ w
Slide 38: Adj. EBITDA Reconciliation
Adj. EBITDA Reconciliation 38
Slide 39: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation 39
Slide 40: Adjusted EPS Reconciliation
Adjusted EPS Reconciliation 40
Slide 41: Investor Relations Contact Information
Investor Relations Contact Information Mark Benfield Mark.Benfield@Blue-Bird.com 41