Blue Bird Corporation · NASDAQ:BLBD
Blue Bird — Q2 FY2019 Earnings Presentation
24 slides from Blue Bird's earnings presentation, May 9, 2019
Slide 1: Fiscal 2019 Second Quarter Results
Blue Bird Corporation (Nasdaq: BLBD) Fiscal 2019 Second Quarter Results Earnings Conference Call May 9, 2019
Slide 2: Agenda
Agenda ▪ Introductions & Forward-Looking Statements – Mark Benfield – Director, Investor Relations ▪ Business Overview – Phil Horlock – President & CEO ▪ Financial Results – Phil Tighe – CFO ▪ Outlook and Guidance – Phil Horlock – President & CEO ▪ Q&A – Group This presentation includes forward-look
Slide 3: Business Overview
Phil Horlock President & CEO BUSINESS OVERVIEW 3
Slide 4: Overview
Overview ▪ Strong 2Q result with Adjusted EBITDA up 22% from last year ◦ Adjusted EBITDA of $12.2M, $2.2M above last year and second best result in 12 years ◦ 2,271 buses sold, 170 buses lower than last year, due to supplier production shortage ◦ Total Net Sales of $211.6M, $5.0M below last year; bu
Slide 5: Significant Operating Achievements
Significant Operating Achievements Increased prices to offset 2Q Customers Quality All-New Paint Facility impact of higher steel Cost and freight costs 16% Capacity k k Gross Profit Margin Adj. EBITDA Margin Transformational Equipment is installed; Bus Rev./Unit is 4% 16% of our customers initiative
Slide 6: YTD and 2Q Financial Results
YTD and 2Q Financial Results Bus Sales Total Net Sales YTD 2Q YTD 2Q $334.3M $195.1M $366.6M $211.6M Down $15.6M Down $6.7M Down $12.6M Down $5.0M Parts Sales Adj. EBITDA1 YTD 2Q YTD 2Q $32.3M $16.6M $19.4M $12.2M Up $3.0M Up $1.7M Up $2.3M Up $2.2M Bus sales shortfall in 2Q will be recovered in 2H;
Slide 7: Alternative-Fuel Leadership
Alternative-Fuel Leadership FY2019 2Q Highlights ▪ Alternative-fuel bus sales 15% above prior year ▪ YTD 1 sales and order backlog up 24%; record 46% + mix of total sales ▪ Strong electric bus interest; 100+ units ordered Opportunities ▪ VW mitigation funds ◦ 30 states earmarked specific funds for s
Slide 8: Driving Down Total Costs
Driving Down Total Costs Purchased Material Commercial Sourcing Material & Design Operating Costs Cost of Production New Paint Facility First-Time Pass Rate 1 Straight Time Capacity Labor Cost Material Cost Warranty Expense Plant Rearrangement Re-Organize Stations Labor Efficiencies 2 Waste In-Line
Slide 9: Financial Results & Outlook
Phil Tighe CFO FINANCIAL RESULTS & OUTLOOK 9
Slide 10: 2Q Results – Summary
2Q Results – Summary ($ Millions unless noted) 2Q FY2019 2Q FY2018 B/(W) Unit Volume 2,271 2,441 (170) Net Revenue $211.6 $216.6 $(5.0) Bus Rev./Unit ($000's) $85.9 $82.7 $3.2 Gross Margin 12.3% 10.0% 2.3 pts. Net (Loss) Income $(0.7) $1.8 $(2.5) Adj. Net Income1 $3.9 $4.6 $(0.7) Adj. EBITDA1 $12.2
Slide 11: 2Q FY2018 to FY2019 Adj. EBITDA Walk
2Q FY2018 to FY2019 Adj. EBITDA Walk Bus volume down 170 ($ Millions) units, improved mix and higher parts profits Commodity & other cost increases Pricing to offset economics and cost reductions through Transformational Initiatives drove higher profits 1See appendix for additional detail regarding
Slide 12: 2Q FY2019 Free Cash Flow
2Q FY2019 Free Cash Flow 2Q ($ Millions) FY2019 FY2018 Adjusted EBITDA $ 12.2 $ 10.0 Cash Paid for Interest (Net) (2.6) (1.7) Trade Working Capital1 5.0 (1.5) CAPEX (11.9) (3.6) Cash Taxes (2.3) (3.6) Other2 14.0 1.5 Adjusted Free Cash Flow $ 14.4 $ 1.1 Operational Transformation Initiatives/Other (
Slide 13: Improving Net Debt, Leverage & Liquidity
Improving Net Debt, Leverage & Liquidity As of March 30, ($ Millions) 2019 Debt $207.6 Cash 25.6 Net Debt $182.0 Net Debt / Adjusted EBITDA 2.5x Net Leverage Ratio 2.5x Compared with minimum bank Net Leverage Ratio covenant of 4.0x Liquidity1 $98.7 1 Liquidity is defined as cash and cash equivalents
Slide 14: Outlook & Guidance
Phil Horlock President & CEO Outlook & Guidance 14
Slide 15: Profit and Margin Growth Targeted for FY2019
Profit and Margin Growth Targeted for FY2019 ▪ School bus market on track for another strong ~35,000 unit industry, supported by continued growth in property taxes, age of the fleet and funding from VW Settlement ▪ Blue Bird expects substantially higher gross profit margins than FY2018 due to: ◦ Pri
Slide 16: Reaffirming FY2019 Full Year Guidance
Reaffirming FY2019 Full Year Guidance Memo: FY2019 2H FY2018 FY2019 FY2019G FY2019 B/(W) $ Millions Actual Guidance B/(W) FY2018 2H FY2018 2H Net Sales $1,025 $990 - $1,025 $(35) - $0 $623 - $658 $(23) - $12 Adj. EBITDA1 $70 $80 - $85 $10 - $15 $61 - $66 $8 - $13 Adj. Free Cash Flow1 $40 $24 - $28 $
Slide 17: (2) BLUE BIRD.
(2) BLUE BIRD.
Slide 18: Appendix
Appendix (2) BLUE BIRD.
Slide 19: Adj. EBITDA Reconciliation
Adj. EBITDA Reconciliation Reconciliation of Net (Loss) Income to Adjusted EBITDA Three Months Ended Six Months Ended (in thousands of dollars) March 30, 2019 March 31, 2018 March 30, 2019 March 31, 2018 Net (loss) income $ (673) $ 1,836 $ (1,893) $ (6,003) Adjustments: Discontinued operations loss
Slide 20: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation Reconciliation of Free Cash Flow to Adjusted Free Cash Flow Three Months Ended Six Months Ended (in thousands of dollars) March 30, 2019 March 31, 2018 March 30, 2019 March 31, 2018 Net cash provided by (used in) operating activities $ 21,436 $ 751 $ (26,772) $ (33,057)
Slide 21: Adjusted EPS Reconciliation
Adjusted EPS Reconciliation Reconciliation of Net (Loss) Income to Adjusted Net Income Three Months Ended Six Months Ended (in thousands of dollars) March 30, 2019 March 31, 2018 March 30, 2019 March 31, 2018 Net (loss) income $ (673) $ 1,836 $ (1,893) $ (6,003) Adjustments, net of tax benefit or ex
Slide 22: 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 23: Important Disclaimers
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 24: END
(2) BLUE BIRD.