Slide 1: FY2023 Fourth Quarter and Full Year Results
BLUE BIRD CORPORATION (NASDAQ: BLBD) FY2023 Fourth Quarter and Full Year Results Earnings Conference Call December 11, 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: Record Results in Fiscal Year 2023 – Key Takeaways
Record Results in Fiscal Year 2023 – Key Takeaways Record Q4 and Full Year Financial Results. Significantly Beat Guidance Every Quarter Robust Market Demand and Strong Backlog Supply Chain Largely Stable; Highly Engaged with Select Constrained Suppliers Legacy-Priced Backlog is Behind Us and New Pri
Slide 7: FY2023 Financial Results and Key Business Highlights
FY2023 Financial Results and Key Business Highlights FY2023 Full Year Results FINANCIAL HIGHLIGHTS BUSINESS HIGHLIGHTS UNITS NET Alt. Power sales Launched 2nd EV SOLD SALES Strong mix of 62% Battery Supplier 8,514 $1,133M $670M+ Backlog of 4.6k Units1 EV ~130 miles range +1,692 vs.’22 +$332M vs.’22
Slide 8: Financial Results
FINANCIAL RESULTS Razvan Radulescu CFO 8
Slide 9: 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 +$332M vs.’22 Adjusted Adjusted Adjusted Adjusted EBITDA FCF EBITD
Slide 10: Fourth Quarter Income Statement
Fourth Quarter Income Statement ($ 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 $(16.2)
Slide 11: Full Year Income Statement
Full Year Income Statement ($ 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) $102
Slide 12: Balance Sheet and Cash Flow Summary
Balance Sheet and Cash Flow Summary ($ 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 13: 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 14: FY22 to FY23 Adj. EBITDA Walk: $103M YoY Improvement
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 15: 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 16: 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 17: 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 18: 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 19: 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 20: 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 21: 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 -2,503 Normal Rev. $M Updated 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 22: Outlook
ee ~=OUTLOOK | Ss | = Phil Horlock CEO
Slide 23: 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 23
Slide 24: 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 25: 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 26: Wrap-Up: Record Profit Outlook in FY2024 & Beyond
Wrap-Up: 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,
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: End
End 32