Blue Bird Corporation · NASDAQ:BLBD
Blue Bird — Q3 2023 Earnings Presentation
33 slides from Blue Bird's earnings presentation, Aug 9, 2023
Slide 1: Third Quarter Results Earnings Conference Call
BLUE BIRD CORPORATION (NASDAQ: BLBD) FY2023 Third Quarter Results Earnings Conference Call August 9, 2023
Slide 2: Agenda
Agenda Introductions & Mark Benfield Forward-Looking Statements Executive Director, Investor Relations Results and Highlights Phil Horlock CEO Financial Results Razvan Radulescu CFO Outlook Phil Horlock CEO Q&A Group This presentation includes forward-looking statements, including statements regardi
Slide 3: 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 4: 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.” Additional information
Slide 5: Results & Highlights
RESULTS & HIGHLIGHTS Phil Horlock CEO 5
Slide 6: Key Takeaways for the Fiscal Year 2023 Q3
Key Takeaways for the Fiscal Year 2023 Q3 Robust Market Demand & Backlog Legacy-Priced Backlog is Behind Us EV Backlog and Production Continues to Grow Reinvesting in the Business – People, Processes, Facilities Improved Operational Performance Led to Strong Q3 Results Significantly Beat Q3 Guidance
Slide 7: FY2023 Q3 Financial Results and Ongoing Business Highlights
FY2023 Q3 Financial Results and Ongoing Business Highlights FY2023 Q3 Results BUSINESS HIGHLIGHTS FINANCIAL HIGHLIGHTS Alt. Power sales Launched All-New UNITS NET Extended-Range SOLD SALES Strong mix of 63% Battery $750M+ ~130 miles range 2,137 $294M Backlog of 5.2k Units1 EV 411 vs.’22 $88M vs.’22
Slide 8: Continuing Operational Improvements
Continuing Operational Improvements Operational Performance Significant Year-Over-Year Improvement ✓ Set-ups ✓ EV Throughput ✓ Plant Efficiency ✓ Hours per bus ✓ Overtime ✓ Setup-to-booking time Another strong quarter –- business performance trending above historic financial benchmarks 8
Slide 9: Reminder of Key Focus Areas in FY2023
Reminder of Key Focus Areas in FY2023 Our People Lean Transformation • Wage and salary increase • Quality Leadership Teams trained and launched • Paid vacation days added • 6 Sigma, 5S, Kaizen, Kanban … • Working environment enhanced • Rapid quality-feedback process • Span of control narrowed with d
Slide 10: Increasing EV Throughput with New EV Build Up Center
Increasing EV Throughput with New EV Build Up Center ▪ Increased production in Third Quarter from 2 EV’s per day to 4 per day, on one shift ▪ Later this year, increasing production up to 6 EV’s per day on one shift ▪ Opportunity to build 12 per day on two shifts ▪ New footprint will support expansio
Slide 11: EPA Clean School Bus Rebate Program
EPA Clean School Bus Rebate Program Program Overview Phase I – 2022 Lottery Results • $5B funding over 5 years Blue Bird Corporate and Dealers • ~$1B released in 2022 (Phase I) Other OEMs ~300 Loyal BB Customers and 690 Channel Partners • ~2k buses to be ordered, from ~2.5k awards ~250 • Some distri
Slide 12: EPA Clean School Bus Grant Program - Phase II
EPA Clean School Bus Grant Program - Phase II Phase II - $400M Competitive Grant Program Timeline Application period Anticipated Selection Anticipated Orders May – Aug 2023 Nov 2023 – Jan 2024 Jan – Mar 2024 • Extensive project narrative and evaluation criteria • School district applicants: 15-50 bu
Slide 13: Financial Results
FINANCIAL RESULTS Razvan Radulescu CFO 13
Slide 14: FY2023 Q3 and YTD Financial Results
FY2023 Q3 and YTD Financial Results FY2023 Q3 Results FY2023 YTD Results FINANCIAL HIGHLIGHTS FINANCIAL HIGHLIGHTS UNITS NET UNITS NET SOLD SALES SOLD SALES 2,137 $294M 6,398 $830M +411 vs.’22 +$88M vs.’22 +1,592 vs.’22 +$287M vs.’22 Adjusted Adjusted Adjusted Adjusted EBITDA FCF EBITDA FCF $28M $43
Slide 15: Q3 Income Statement
Q3 Income Statement ($ Millions) FY2023 FY2022 B/(W) Unit Volume 2,137 1,726 411 Unit Backlog 5,199 6,297 (1,098) Net Revenue $294.3 $206.1 $88.2 Bus Rev./Unit ($000's) $126.5 $108.1 $18.4 Gross Margin 15.5% 10.5% 500 bps Adj. Net Income1 $14.5 $(2.9) $17.4 Adj. EBITDA1 $28.0 $8.8 $19.2 Adj. EBITDA
Slide 16: Q3 Balance Sheet and Cash Flow
Q3 Balance Sheet and Cash Flow ($ Millions) FY2023 FY2022 B/(W) Cash $50.5 $26.5 $24.0 Debt $(134.9) $(213.6) $78.7 Liquidity 1 $134.2 $60.2 $74.0 Operating Cash Flow $39.4 $(43.0) $82.4 Adj. Free Cash Flow 2 $42.8 $(40.2) $83.0 Trade Working Capital* $2.0 $(45.5) $47.5 Strong Free Cash-Flow for FY2
Slide 17: FY2022-Q3 to FY2023-Q3 Adj. EBITDA Walk
FY2022-Q3 to FY2023-Q3 Adj. EBITDA Walk ($ Millions) +19.2 Q3 Unit Volume (+219%) FY2022 1,726 FY2023 2,137 Delta +411 3.6 6.7 28.0 (4.9) 13.8 8.8 4.3% of 9.5% of Net Rev. Net Rev. FY22-Q3 Bus Vol., Bus Parts Gross OPEX/Other FY23-Q3 Adj. EBITDA Price-Mat. Operations Profit Adj. EBITDA Significant i
Slide 18: Legacy backlog units behind us, FY23-H2 back to normal margins
Legacy backlog units behind us, FY23-H2 back to normal margins Status 07/01/23 Production Quarter FY23 Orders to go 28% 31% FY23 Backlog (20-25% pricing) FY22 Newer Backlog (11-15% pricing) 64% FY21 Old Backlog (0-5% pricing) 74% 82% 92% 100% 100% 57% FY2024 Model Year 72% price increase 26% 36% 16%
Slide 19: US Steel Price
After increases in CY23-Q2, US spot steel prices declined in CY23-Q3, with futures suggesting relatively stable pricing over the summer US Steel Prices, USD/ST, Jan ‘21– Oct ‘23 HR CR 2,500 2,000 US Steel Price 1,500 $/ST Futures 1,000 Corridor 500 Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan
Slide 20: Raising guidance for a strong finish in FY2023, driving $70M+
Raising guidance for a strong finish in FY2023, driving $70M+ Rev. $235 $300 $294 $280 - $300 $1,110 - $1,130 $M 1 Adj. EBITDA ✓ Q3 Adj. EBITDA guidance exceeded 73 ✓ Raising Q4 and FY23 Adj. EBITDA guidance 70 - 76 ✓ Record Revenues and Record EVs in FY2023 28 29 20 26 - 32 ~9% ~10% ~7% ~6.5% (4) ~
Slide 21: FY2023 Guidance Raised: Strong profitability in FY2023
FY2023 Guidance Raised: Strong profitability in FY2023 FY2022 FY2023 FY2023 FY2023 FY2023 B/(W) $ Millions Actuals Initial Dec. Feb. Updated May Updated Aug. Updated Vs. Prior Year Guidance Guidance Guidance Guidance Net $800 $900 – $1,000 $1,000 - $1,050 $1,085 - $1,135 $1,110 - $1,130 $310 - $330
Slide 22: FY24 Base Case Guidance shows improvement over FY23
FY24 Base Case Guidance shows improvement over FY23 1 +12 Adj. EBITDA (+16%) ($M) 85 73 75 - 95 70 - 76 FY24 Guidance Downside Base Case Upside Supply Chain Units 8,000 8,500 9,000 Revenues $M $1,100 $1,150 $1,200 Adj. EBITDA $M $75 $85 $95 Adj. EBITDA % ~7.0% ~7.5% ~8.0% ~6.5% ~7.5% FY23 FY24 With
Slide 23: Long-term Outlook Driven by EV growth and Lean Transformation
Long-term Outlook Driven by EV growth and Lean Transformation Revenues $M Gas/Propane EV Units Diesel CNG 2023 2024 Outlook → Rev. $M Guidance Guidance 12,000 12,000 11,317 11,646 11,017 11,000 3,000 10,500 10,000 8,878 9,500 2,500 8,400 8,500 2,000 8,000 6,679 6,822 1,750 2,000 6,000 1,500 1,500 1,
Slide 24: Outlook
4 eal §=OUTLOOK i | — Phil Horlock CEO
Slide 25: Positioned for Strong Recovery in FY2023 & Beyond
Positioned for Strong Recovery in FY2023 & Beyond 45,000 NA School Bus Industry Bookings 23%+ = ~8,400 units Class 6-7* 39.6k 40,000 38.7k 36.8k 36.6k 35.8k 36.1k 35,000 32.6k Revenue 40%+ = ~$1.1 Billion 29.6k 29.5k 30,000 26.4k 25.7k 25,000 Parts Revenue 20%+ = $92+ Million 20,000 ~10% CAGR 15,000
Slide 26: 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 27: Q&A
Q&A 27
Slide 28: Appendix
APPENDIX 28
Slide 29: Adj. EBITDA Reconciliation
Adj. EBITDA Reconciliation 29
Slide 30: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation 30
Slide 31: Adjusted EPS Reconciliation
Adjusted EPS Reconciliation 31
Slide 32: Secondary Offering Summary – June 7, 2023
Secondary Offering Summary – June 7, 2023 Issuer Blue Bird Corporation Ticker / Exchange BLBD / Nasdaq Global Market Securities Offered Common Stock Pricing / Base Spread $20/share / 4% paid by Blue Bird (~$4M expense in OI/OE) + Legal Fees (~$1.5M) Base Offering Size 4,500,000 (100% Secondary) – 3,
Slide 33: End
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