Blue Bird Corporation · NASDAQ:BLBD
Blue Bird — Q3 FY2022 Earnings Presentation
29 slides from Blue Bird's earnings presentation, Aug 10, 2022
Slide 1: Fiscal 2022 Third Quarter Results
BLUE BIRD CORPORATION (NASDAQ: BLBD) Fiscal 2022 Third Quarter Results Earnings Conference Call August 10, 2022
Slide 2: Agenda
Agenda Introductions & Mark Benfield Forward-Looking Statements Executive Director, Investor Relations Results and Highlights Matthew Stevenson President & CEO Financial Results Razvan Radulescu CFO Outlook Matthew Stevenson President & CEO Q&A Group This presentation includes forward-looking statem
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 and Highlights
RESULTS AND HIGHLIGHTS Matthew Stevenson President & CEO 5
Slide 6: 3QFY2022 Financial Results and Ongoing Business Highlights
3QFY2022 Financial Results and Ongoing Business Highlights Third Quarter FY2022 Record FINANCIAL HIGHLIGHTS Backlog BUSINESS HIGHLIGHTS 6.3k Units1 UNITS NET (~$700M) SOLD SALES Driving Alt. Power mix of 380+ EV’s in 1,726 $206M Pricing actions taking 63% in backlog, up 11 pts. firm order Backlog1 (
Slide 7: Key Takeaways for the Quarter
Key Takeaways for the Quarter Strong Market Demand & Backlog Aggressive Cost Mitigation Actions Improving Pricing on Backlog & New Orders Improving Parts Availability and Quality and Reducing Manuf. Costs Continuing Leadership in EV & Alternative Fuels Improving operating environment; however, conce
Slide 8: FY2022 3Q Overview
FY2022 3Q Overview Aggressive Cost Pricing for Market Demand is Strong Mitigation Actions Economics ▪ Industry YTD order intake ~30% ▪ Right-sized organization to the ▪ Partnered with franchised dealers to higher than prior year and ~14% current production rate partially recover pricing on the highe
Slide 9: FY2022 3Q Overview (cont.)
FY2022 3Q Overview (cont.) Improving Improving Continuing Leadership in EV Parts Availability Quality & Reducing Cost & Alternative Fuels ▪ Focused leadership, new ▪ 3Q DPU’s reduced by nearly 50% ▪ Recently announced EV Repower processes, and increased vs 1Q program for Gas and Propane resources in
Slide 10: Financial Results
FINANCIAL RESULTS Razvan Radulescu CFO 10
Slide 11: Q3 Income Statement
Q3 Income Statement ($ Millions) FY2022 FY2021 B/(W) Unit Volume 1,726 2,024 (298) Unit Backlog 6,297 3,946 2,351 Net Revenue $206.1 $196.7 $9.4 Bus Rev./Unit ($000's) $108.1 $89.8 $18.3 Gross Margin 10.5% 13.3% (280) bps Adj. Net Income1 $(2.9) $5.2 $(8.1) Adj. EBITDA1 $8.8 $13.2 $(4.4) Adj. EBITDA
Slide 12: FY2021 Q3 to FY2022 Q3 Actuals Adj. EBITDA Walk
FY2021 Q3 to FY2022 Q3 Actuals Adj. EBITDA Walk Q3 Unit Volume ($ Millions) FY2021 2,024 Strong parts FY2022 1,726 volume and Variance (298) margin growth Cost controls, $13.2 $0.2 partially offset by lower JV profits $(0.6) $0.1 $8.8 Pricing starting catch up to material cost $(4.1) increases Suppl
Slide 13: Normalized Q3 result w/o supply chain constraints at ~$21M
Normalized Q3 result w/o supply chain constraints at ~$21M Q3 Unit Volume ($ Millions) Strong parts FY2021 2,024 ~$21 FY2022 1,726 volume and margin growth Result w. Variance (298) additional 500 missed volume ~$5 opportunity (at 2.5k units) Cost controls, $13.2 $0.2 partially offset by lower JV pro
Slide 14: FY22 Q3 vs Q2 Income Statement strong financials recovery
FY22 Q3 vs Q2 Income Statement strong financials recovery ($ Millions) FY2022 Q3 FY2022 Q2 B/(W) Unit Volume 1,726 1,931 (205) Unit Backlog 6,297 6,607 (310) Net Revenue $206.1 $207.7 (1.6) Bus Rev./Unit ($000's) $108.1 $97.6 $10.5 Gross Margin 10.5% 1.5% 9.0% Adj. Net Income1 $(2.9) $(10.1) 7.2 Adj
Slide 15: Balance Sheet and Liquidity
Balance Sheet and Liquidity As of ($ Millions) July 2, 2022 Debt1 $213.6 Cash1 26.5 Net Debt1 $187.1 Net Debt / Adjusted EBITDA1 20.1x Net Leverage Ratio2 23.7x TTM EBITDA2 $8.7 versus a minimum required TTM EBITDA covenant of $(6.8)M Liquidity2 3 $60.2 versus a Q3 minimum required liquidity covenan
Slide 16: Balance Sheet and Cash Flow Summary
Balance Sheet and Cash Flow Summary ($ Millions) 3Q FY2022 3Q FY2021 B/(W) Cash $26.5 $11.2 $15.3 Debt $213.6 $166.6 $(47.0) Operating Cash Flow $(43.0) $(3.0) $(40.0) Adj. Free Cash Flow1 $(40.2) $(5.5) $(34.7) Trade Working Capital* $(45.5) $(13.2) $(32.3) Free Cash Flow decreased primarily due to
Slide 17: Inventory increase due to supply chain constraints and strategic pre-buys
Inventory increase due to supply chain constraining planned Q3 production ramp-up, and strategic pre-buys $M 1 month +58 -15 ▪ Q3 Production ramp-up was constrained 212 197 ▪ Production ramp-up initiated in February for Q3 60 Almost 600 ▪ Ukraine war / China COVID lockdowns created new shortages Bus
Slide 18: Almost half of the FY22 volumes comes from FY21 orders
Almost half of the FY22 volumes comes from FY21 orders ▪ SGM is improving every Volume quarter, as planned, due to price increases taking hold Structure as we are working through the old backlog SGM/Unit Units/Mo ▪ Together with our Dealers, Q3FY22 Orders further pricing and backlog- mix measures we
Slide 19: Tailwind from Steel reductions for Q1-FY23. Diesel still high.
Tailwind from Steel reductions for Q1-FY23. Diesel still high. US Spot Steel Prices, USD/ST, Sep ‘21– Nov ‘22 US Diesel Prices ($/gal) HR HDG Scrap CR Increase impacts Futures HR Fut. HDG Fut. Scrap Fut. our Q4 cost 2,500 2,000 1,870 1,510 1,480 1,441 1,500 1,270 1,020 1,039 1,250 1,000 679 612 890
Slide 20: FY2022 Guidance: Strong Q3, EV Chip shortage in Q4
FY2022 Guidance: Strong Q3, EV Chip shortage in Q4 Initial Q2 Revised Q3 Updated ▪ 1H FY2022 was impacted supply FY2021 FY2022 FY2022 FY2022 B/(W) chain disruptions limiting the units $ Millions Act. Guidance Guidance Guidance Vs. Prior Year sold and creating inefficiencies; backlog margin compressi
Slide 21: Outlook
OUTLOOK Matthew Stevenson President & CEO 21
Slide 22: FY2022 Objectives & Focus Areas
FY2022 Objectives & Focus Areas Our People Lean Transformation Expanding Our TAM Scaling EV 22
Slide 23: EPA 2022 Clean School Bus Rebate Program
EPA 2022 Clean School Bus Rebate Program $500M of $5B released in 2022 Expected Orders Lottery Application Period Lottery Winners Payment to Winners May-August 19, 2022 Notified October 2022 – (Up to 25 buses/applicant) October 2022 April 2023 EV ▪ Award amount for ZEV between $250k (non-priority) a
Slide 24: Positive Business Outlook
Positive Business Outlook Fundamentals of our industry and demand for Blue Bird buses are strong ▪ Blue Bird’s record backlog of 6,300 buses worth $700m Recovering economics through pricing ▪ Gross margin should continue to expand as fully-priced units in the backlog are built and sold ▪ Total price
Slide 25: Q&A
Q&A 25
Slide 26: Appendix
APPENDIX 26
Slide 27: Adj. EBITDA Reconciliation
Adj. EBITDA Reconciliation Reconciliation of Net Income to Adjusted EBITDA Three Months Ended Nine Months Ended (in thousands of dollars) July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021 Net (loss) income $ (6,435) $ 4,332 $ (22,664) $ 2,099 Adjustments: Interest expense, net (1) 3,976 2,887 9,69
Slide 28: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation Reconciliation of Free Cash Flow to Adjusted Free Cash Flow Three Months Ended Nine Months Ended (in thousands of dollars) July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021 Net cash used in operating activities $ (43,041) $ (3,040) $ (54,451) $ (14,238) Cash paid for
Slide 29: Adjusted EPS Reconciliation
Adjusted EPS Reconciliation Reconciliation of Net Income to Adjusted Net Income and of Diluted EPS to Adjusted Diluted EPS Three Months Ended Nine Months Ended (in thousands of dollars) July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021 Net (loss) income $ (6,435) $ 4,332 $ (22,664) $ 2,099 Adjustm