Blue Bird Corporation · NASDAQ:BLBD
Blue Bird — Q2 FY2022 Earnings Presentation
29 slides from Blue Bird's earnings presentation, May 12, 2022
Slide 1: Fiscal 2022 Second Quarter Results
BLUE BIRD CORPORATION (NASDAQ: BLBD) Fiscal 2022 Second Quarter Results Earnings Conference Call May 12, 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 Business Update Matthew Stevenson President & CEO Q&A Group This presentation includes forward-lookin
Slide 3: 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 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.” Adjusted EBITDA is def
Slide 5: Results and Highlights
RESULTS AND HIGHLIGHTS Matthew Stevenson President & CEO 5
Slide 6: FY2022 2Q Overview
FY2022 2Q Overview Supply Chain Continues to Conscious of Inflationary Market Demand is Strong Hinder Production Volume Pressures ▪ Supplier allocation and ▪ Raw material cost increases and ▪ Demand continues at pre- shortages are still prevalent delayed production compressed Covid levels across var
Slide 7: Challenges and Mitigation Actions
Challenges and Mitigation Actions ▪ Marginal improvements at beginning of Q2 materially declined post Ukraine ▪ Recruited seasoned supply chain executive, Jim invasion and China lockdowns Nelles to lead function ▪ Suppliers having difficulty retaining labor with the high inflation costs ▪ Increased
Slide 8: 2QFY2022 Financial Results and Ongoing Business Highlights
2QFY2022 Financial Results and Ongoing Business Highlights Second Quarter FY2022 Phase 1 of EPA Funding Plan Rolled Out Launched FINANCIAL HIGHLIGHTS BUSINESS HIGHLIGHTS Commercial chassis UNITS NET at ACT EXPO SOLD SALES 1,931 $208M ~360 EV’s in firm order Backlog1 442 vs.’21 $43M vs.’21 Record Onl
Slide 9: Financial Results
FINANCIAL RESULTS Razvan Radulescu CFO 9
Slide 10: FY2022 2Q Income Statement
FY2022 2Q Income Statement ($ Millions) FY2022 FY2021 B/(W) Unit Volume 1,931 1,489 442 Unit Backlog 6,607 2,511 4,096 Net Revenue $207.7 $164.7 $43.0 Bus Rev./Unit ($000's) $97.6 $100.9 $(3.3) Gross Margin 1.5% 11.2% (970) bps Adj. Net Income1 $(10.1) $1.4 $(11.5) Adj. EBITDA1 $(10.7) $7.5 $(18.2)
Slide 11: FY2021 Q2 to FY2022 Q2 Actuals Adj. EBITDA Walk
FY2021 Q2 to FY2022 Q2 Actuals Adj. EBITDA Walk 2Q Unit Volume ($ Millions) Backlog margin FY2021 1,489 compression, FY2022 1,931 mainly material Variance +442 cost increases $6.5 4.6% of Plant inefficiencies driven Net Rev. by missing parts and higher $7.5 inbound freight costs 4.6% of Net Rev. $(1
Slide 12: Normalized Q2 result w/o supply chain constraints at ~$25M
Normalized Q2 result w/o supply chain constraints at ~$25M 2Q Unit Volume Without disruptions, booking ($ Millions) Backlog margin FY2021 1,489 for the period would have compression, ~$25M FY2022 1,931 been up to ~1k units higher mainly material Variance +442 cost increases Result w. additional $6.5
Slide 13: Balance Sheet and Liquidity
Balance Sheet and Liquidity As of ($ Millions) April 2, 2022 Debt1 $156.9 Cash1 14.9 Net Debt1 $142.0 Net Debt / Adjusted EBITDA1 10.4x Net Leverage Ratio2 12.4x TTM EBITDA2 $12.3 versus a minimum required TTM EBITDA covenant of $(4.5)M Liquidity2 3 $108.6 versus a minimum required liquidity covenan
Slide 14: Balance Sheet and Cash Flow Summary
Balance Sheet and Cash Flow Summary ($ Millions) 2Q FY2022 2Q FY2021 B/(W) Cash $14.9 $18.7 $(3.8) Debt $156.9 $168.8 $11.9 Operating Cash Flow $21.7 $0.3 $21.4 Adj. Free Cash Flow1 $21.6 $(1.6) $23.3 Trade Working Capital* $31.2 $5.0 $26.3 Strong Free Cash Flow reported, primarily due to increased
Slide 15: Half of the FY22 volumes comes from FY21 orders
Half of the FY22 volumes comes from FY21 orders ▪ With every quarter, the SGM is slowly improving due to price increases Volume Volume Risk taking hold, as we are Structure Supply Chain working through the old backlog Q2FY22 Orders ▪ However, the current Ukraine situation created uncertainty on both
Slide 16: The Steel markets began to normalize during Nov-Feb time period
The Steel markets began to normalize during Nov-Feb time period US Steel Prices, USD/ST Sep ‘21– Dec ‘22 US Diesel Prices ($/gal) HR HDG Scrap CR April Futures HR Fut. HDG Fut. Scrap Fut. 2,500 2/17 4/21 2,200 1,870 2,000 1,926 1,680 1,840 FEB Steel Premises: 1,760 1,500 Prices continue1,575 to norm
Slide 17: The Ukraine war spiked Steel and Diesel prices in March and April
The Ukraine war spiked Steel and Diesel prices in March and April US Steel Prices, USD/ST Sep ‘21– Dec ‘22 US Diesel Prices ($/gal) HR HDG Scrap CR April Futures HR Fut. HDG Fut. Scrap Fut. 2,500 2/17 4/21 2,200 1,870 2,000 1,926 1,680 1,840 APR Steel Premises: 1,760 1,500 Actual prices spiked 1,575
Slide 18: Revising FY2022 Guidance
Revising FY2022 Guidance ▪ 1H FY2022 Actuals impacted supply Initial Revised FY2021 FY2022 FY2022 B/(W) chain disruptions, limiting the units $ Millions Act. Guidance Guidance Vs. Prior Year sold and creating inefficiencies ▪ Significant margin compression for 1H Net Revenue $684 $750 - $850 $800 -
Slide 19: Business Update
BUSINESS UPDATE Matthew Stevenson President & CEO 19
Slide 20: FY2022 Objectives & Focus Areas
FY2022 Objectives & Focus Areas Our People Lean Transformation Expanding Our TAM Scaling EV 20
Slide 21: Transformation: FY2022 Focus Areas
FY2022 Focus Areas ▪ Leadership team transformation near completion Our People ▪ Rolled out a comprehensive employee engagement survey and action plan ▪ Continuing upgrades in the manufacturing facility ▪ Improving the span of control and Britton Smith Jim Nelles accountability in manufacturing SVP,
Slide 22: Expanding Our TAM
FY2022 Focus Areas ▪ Expanding Our TAM Launched prototype EV commercial chassis at ACT Expo ▪ TAM over 30,000, effectively doubling Blue Bird’s market ▪ Targeting Last Mile Delivery Stripped Chassis & High-end Motorhomes ▪ Expect sales in 2H of CY2023 ▪ Construction started on ~40,000 sq. ft. buildi
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 2022 Notified October 2022 – (Up to 25 buses/applicant) October 2022 April 2023 EV ▪ Award amount for ZEV between $250k (non-priority) and $
Slide 24: Positive Long-Term Outlook
Positive Long-Term Outlook Continuing to deliver operational improvements ▪ Gross margin should expand with recent pricing initiatives as the backlog is consumed ▪ Total price increases of ~ 25% now effective on new orders ▪ Policies in place to ensure pricing aligns with the inflationary environmen
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 Six Months Ended (in thousands of dollars) April 2, 2022 April 3, 2021 April 2, 2022 April 3, 2021 Net loss $ (12,147) $ (619) $ (16,229) $ (2,233) Adjustments: Interest expense, net (1) 2,563 2,422 5,720 4
Slide 28: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation Reconciliation of Free Cash Flow to Adjusted Free Cash Flow 28
Slide 29: Adjusted EPS Reconciliation
Adjusted EPS Reconciliation Reconciliation of Net Income to Adjusted Net Income and of Diluted EPS to Adjusted Diluted EPS (1) Amounts are net of estimated statutory tax rates of 25%. (2) Primarily costs incurred for third party cleaning services and personal protective equipment for our employees i