Blue Bird Corporation · NASDAQ:BLBD
Blue Bird — Jefferies 11th Annual Industrials Conference (August 2015)
39 slides from Blue Bird's conference presentation, Aug 11, 2015
Slide 1: Jefferies Industrials Conference Investor Presentation
Jefferies Industrials Conference Investor Presentation August 11, 2015
Slide 2: Blue Bird Highlights & Agenda
Blue Bird Highlights & Agenda Iconic and Fastest Growing School Bus Brand Bus sales volume (units) up more than 40% since 2010 North American market share of 30% in 2014 is up 7 percentage points since 2010 Undisputed Leader in Alternative Fuel-Powered Bus Sales Sold approximately 6x more
Slide 3: Why Blue Bird
Why Blue Bird Why What Where Blue Bird We’ve Done We’re Going 3
Slide 4: Product-Focused Company
Product-Focused Company Full Product Range “Build the Best Bus” Expansive & innovative product cycle plans Type C Buses Type D Buses 65% Net Sales 22% Net Sales (2014) Leader in alternative fuels (2014) Exclusive engine offerings Differentiated product features Research-driven product enha
Slide 5: Product Leadership
Product Leadership 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 leadership in c
Slide 6: Diverse Customer Base & Strong Distribution
Diverse Customer Base & Strong Distribution Blue Bird Blue Bird FY2014 Sales by Customer Type North American Dealer Network 3 Nat’l Fleets Export 5% 2% GSA 5% ~3,400 Contractors ~10,000 School 21% Districts = Dealer Location S = Service Center 67% Note: Many dealers have multiple locations 49 U.S. &
Slide 7: Experienced Management Team
Experienced Management Team Years Auto Blue Name Position Key Prior Experience Industry Bird Phil Horlock President & Chief Executive Officer 38 6 Phil Tighe Chief Financial Officer 39 3 John Kwapis Chief Operating Officer 30 6 Dale Wendell Chief Commercial Officer 39 4 Mike McCurdy VP HR & External
Slide 8: What We've Done
What We’ve Done Why What Where Blue Bird We’ve Done We’re Going 8
Slide 9: Transformational Initiatives
Transformational Initiatives Reduced product cost and improved quality, cutting warranty claims by 39% Placed more than 85% of material purchases on long term contracts Launched several leading and proprietary product features Increased productivity by reducing assembly plants from 2 to 1 Cut comple
Slide 10: Propane Advantage
Propane Advantage Gained first mover advantage in propane with introduction in 2007 Exclusive relationships with both Ford and Roush CleanTech Advantages are compelling “With today's tight school budgets, using a Lower fuel and maintenance costs transportation fuel like propane autogas that
Slide 11: Strong Market Share and Profit Growth
Strong Market Share and Profit Growth ($ in millions) Market Share Adj. EBITDA Revenue 80 Adjusted EBITDA $856M % of Revenue 10% 30% 30% 70 $67 27% 9% 26% 60 Up 51% 8% 23% $50 8% 50 7% 40 7% 30 Revenue 6% $566M $17 5% 20 $14 3% 3% 4% 10 0 3% FY2010 FY2011 FY2012 FY2013 FY2014 FY2011 FY2012 FY2013 FY
Slide 12: Where We're Going
Where We’re Going Why What Where Blue Bird We’ve Done We’re Going 12
Slide 13: Future Growth & Profit Drivers
Future Growth & Profit Drivers Industry Volume Upside School Bus Market Recovery Future Market Share Growth Growth & Increasing Propane Penetration Profitability Continuous Product Enhancements Dealer Network Improvements Higher Operating Margins Drive Productivity Deliver Parts Growth Long-Term Fin
Slide 14: Early Stages of Industry Recovery
Early Stages of Industry Recovery Type C/D School Bus Recovery Historical Registrations Projected Registrations Historical Avg. ('85-'14) 40,000 37,641 34,882 35,000 31,600 Mean: 30,550 30,000 25,000 23,822 20,000 15,000 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015
Slide 15: Share Growth: Propane Opportunity
Share Growth: Propane Opportunity Fewer than 5% of Customers Have Tried Propane Less than ~450 of ~10,000 customers have tried propane 15
Slide 16: Share Growth: Propane Opportunity
Share Growth: Propane Opportunity “STI’s fleet of CNG and propane autogas vehicles now totals more than 1,300. That number is sure to grow as school districts learn more about our highly successful deployments in places like Omaha, NE, Monroeville, PA and Los Angeles, CA.” - Student Transportation I
Slide 17: Margin Expansion: Focused Approach
Margin Expansion: Focused Approach Processes Supporting Continuous Improvement 2014 Engineering team focused on design cost improvements – reduce cost & improve Break-even volume based functionality on Adj. EBITDA is ~3,800 units per year, over 20% Manufacturing focused on lower than 2010 impr
Slide 18: Margin Expansion: Growing Parts Business
Margin Expansion: Growing Parts Business ($ in millions) Parts Business Parts Sales Revenue & Gross Margin High margin business Revenue 2014 Gross Profit Margin ~180,000 Blue Bird buses in North 60 50% 17% $54 America 50 ~250 dealer-authorized service $46 45% $44 locations 40 Product line ex
Slide 19: New Products: Innovation Leadership
New Products: Innovation Leadership Recently Announced New Gasoline-Powered Bus Blue Bird is the only major manufacturer to offer a Type C gasoline-powered school bus Lower acquisition cost than other fuel types Maintenance and service is simpler for technicians Utilizes Ford’s modern and hi
Slide 20: New Markets: International & Commercial
New Markets: International & Commercial Sell more School Buses Expand Commercial Bus in International Markets Domestically & Internationally Grow international & commercial bus business 20
Slide 21: Financial Review
BLUE BIRD A heritage of looking ahead. Financial Review
Slide 22: Substantial Revenue Growth
Substantial Revenue Growth ($ in millions) Bus Parts Volume $856 $900 12,000 1 $800 $777 $54 $802 11,000 $46 $730 $700 $598 10,000 $600 $566 $44 $44 9,604 $500 $554 9,000 $522 $400 8,654 8,000 $300 7,000 6,882 $200 6,525 6,000 $100 $- 5,000 FY2011 FY2012 FY2013 FY2014 Memo: Revenue/Unit $80 $80 $84
Slide 23: Impressive Profit Growth
Impressive Profit Growth ($ in millions) 80 Adjusted EBITDA % of Revenue 10% 70 $67 9% 60 $50 8% 50 8% 7% 40 7% 6% 30 20 $17 5% $14 4% 10 3% 3% 0 3% FY2011 FY2012 FY2013 FY2014 Memo: GP Margin 9% 9% 12% 13% EBITDA has grown at a faster rate than revenue Note: Numbers have been rounded 23
Slide 24: Profit Drivers: FY2012 to FY2014
Profit Drivers: FY2012 to FY2014 ($ in millions) $29 $67 $(1) $21 $17 FY2012 Cost Reductions Volume & Mix Other FY2014 Adj. EBITDA Adj. EBITDA Relentless focus on cost competitiveness allows us to compete in all markets Note: Total Adj. EBITDA walk does not sum precisely due to rounding 24
Slide 25: Substantial Free Cash Flow
Substantial Free Cash Flow ($ in millions) Free Cash Flow $35 1 $31 $32 $30 $25 $20 $15 $15 $12 $10 $5 $- FY2011 FY2012 FY2013 FY2014 Memo: Capex $5 $4 $5 $6 Notes: Free Cash Flow is defined as Cash from Continuing Operations less Capex 1 FY2014 Free Cash Flow includes a $24.7 million special compen
Slide 26: Financial Outlook
BLUE BIRD A heritage of looking ahead. Financial Outlook
Slide 27: School Bus Business is Highly Seasonal
School Bus Business is Highly Seasonal Timing of sales influenced by R.L. Polk Unit school start Registration Seasonality Based on 3-Year Average FY2012-FY2014 First quarter is historically our lowest volume quarter and we 67% take planned shutdowns during this period 33% Company results follo
Slide 28: Net Sales & Adj. EBITDA Guidance
Net Sales & Adj. EBITDA Guidance ($ millions) Full Year 1H Metric Guidance Actual Fiscal 2015 Net Sales $349 $918-940 Adjusted EBITDA1 $17 $72-75 Reporting Fiscal 3Q Earnings Results on August 18 and will be reaffirming full-year guidance 1 Consistent with the information provided in our proxy sta
Slide 29: Wrap-Up
BLUE BIRD A heritage of looking ahead. Wrap-Up
Slide 30: Significant Momentum & Upside
Significant Momentum & Upside Iconic and fastest growing school bus brand Undisputed leader in alternative fuel-powered bus sales Downside risk mitigation Significant upside potential Experienced and committed management team that delivers results 30
Slide 31: Our Growth Objectives are Clear
Our Growth Objectives are Clear #1 in North American school bus market share with highest customer loyalty Differentiated and proprietary products and features that customers want and value Clear leader in affordable, alternative fuel- powered school buses Significant growth in parts sales
Slide 32: Q&A
BLUE BIRD A heritage of looking ahead. Q&A
Slide 33: Appendix
BLUE BIRD A heritage of looking ahead. Appendix
Slide 34: Income Statement - 1H 2015
Income Statement - 1H 2015 BLUE BIRD CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS) Three Months Ended Three Months Ended Six Months Ended ‘Six Months Ended (qm thousands except for share data) April 04, 2015 March 29, 2014 April 04, 2015
Slide 35: Balance Sheet - 1H 2015
Balance Sheet - 1H 2015 BLUE BIRD CORPORATION AND SUBSIDIARIES ‘CONDENSED CONSOLIDATED BALANCE SHEETS (thousands except for stare dt) As of April 4, 2018, Asef September 27, 204 (conned) (coon) Assets Current assets Cash and cash equivalents s 2618 $ 61,137 Accounts receivable, net 13,048 21.215 Inv
Slide 36: Statement of Cash Flows - 1H 2015
Statement of Cash Flows - 1H 2015 36
Slide 37: 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 38: Important Disclaimers
Important Disclaimers Non-GAAP Financial Measures Adjusted EBITDA, Adjusted EBITDA margin and adjusted net income from continuing operations should not be considered as an alternative to net income (loss) as an indicator of Blue Bird’s performance or as an alternative to any other measure prescribed
Slide 39: END
BLUE BIRD A heritage of looking ahead. END
Blue Bird — Jefferies 11th Annual Industrials Conference (August 2015) on 6ix