Blue Bird Corporation · NASDAQ:BLBD
Blue Bird — Investor Presentation (February 2024)
36 slides from Blue Bird's investor presentation, February 2024
Slide 1: Blue Bird Corporation Investor Presentation February 2024
“A Leader in zero- and low-emission transportation” BLUE BIRD CORPORATION (NASDAQ: BLBD) Investor Presentation February 2024
Slide 2: 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 3: 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 4: Agenda
Agenda Investment Highlights School Bus Industry Overview Company & Product Highlights FY2024 Objectives Growth Runway 4
Slide 5: Investment Highlights
Investment Highlights Countercyclical Strong industry growth ahead with a backdrop of healthy funding and an aging school bus fleet National Commitment Beneficiary of $5B US Government’s commitment to the electrification of school buses The Leader Leading market position in alternative power and ele
Slide 6: School Bus Industry Overview
School Bus Industry Overview 6
Slide 7: Industry Highlights
Industry Highlights OEMs School Bus Customers Lion ~3,400 Contractors 500k+ Thomas Blue Bird ~10,000 School Districts IC High barriers to entry Highly specialized product -- Complex state and customer requirements -- Dealer and service network -- Customer relationship driven business Demand Drivers
Slide 8: Type C & D School Bus Industry
Type C & D School Bus Industry ▪ Industry avg size is 30,500 new units annually based on Polk registrations ▪ Total fleet of school buses is ~515,000 units and average age is about 10 years ▪ Industry size is driven by: ▪ Number of school age children ▪ Age of existing fleet – most states set 15 yea
Slide 9: Fleet Age Profile Supports Industry Levels
Fleet Age Profile Supports Industry Levels ~515K School Buses on the Road as of the end of CY2022 40,000 43%+ of the fleet is 35,000 10 years and older 30,000 25,000 20,000 15,000 10,000 5,000 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 ~221K bus
Slide 10: Company & Product Highlights
Company & Product Highlights 10
Slide 11: Introduction to Blue Bird
Introduction to Blue Bird ▪ Headquartered in Macon, Georgia Dedicated Manufacturing Micro Bird JV Facility ▪ Leader in alternative power; #1 in electric & propane school buses (Drummondville, Quebec, Canada) ▪ 60%+ of Blue Bird sales are non-diesel; <10-20% for competitors Footprint Parts Distributi
Slide 12: Proven Leadership in Clean Technologies
Proven Leadership in Clean Technologies ▪ Proven track record of leadership in new technologies; more than 60% of unit sales are non- diesel ▪ Leader in electric and propane- powered school buses; the future of school transportation ▪ $5B of Federal funding secured in the infrastructure bill for ele
Slide 13: 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 – $5B Funding over 5 years: Round 2 (2023 Grant Program) Round 3 (2023 Rebate Program) ▪ Fin
Slide 14: Build Complete Ecosystem for EV School Bus Deployment
Build Complete Ecosystem for EV School Bus Deployment END OF LIFE ASSESSMENT Determine recycling program for Determine what bus best fits the used batteries after use customer’s needs based on terrain, climate and route planning SERVICE & SUPPORT FINANCING Connect with dealer and EV system Identify
Slide 15: 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 16: FY2024 Objectives
FY2024 Objectives 16
Slide 17: 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 17
Slide 18: Significant Investments Starting in 2024
Significant Investments Starting in 2024 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 benef
Slide 19: FY2024 Guidance Raised to $130M and ~11% EBITDA
FY2024 Guidance Raised to $130M and ~11% EBITDA 1 +42 Adj. EBITDA (+48%) ($M) 130 120 - 140 FY24 Updated Scenarios 88 Downside Guidance Upside FY24 Q2-Q4: Supply Chain Qtr. 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 $12
Slide 20: FY2024 Guidance Raised to $130M and ~11% EBITDA
FY2024 Guidance Raised to $130M and ~11% EBITDA FY2024 FY2024 FY2023 Dec. Feb. Updated B/(W) $ Millions Actuals Vs. Prior Year Guidance Guidance Net Revenue $1,133 $1,150 - $1,250 $1,150 - $1,250 $17 - $117 Adj. EBITDA1 $88 $105 - $125 $120 - $140 $32 - $52 Adj. Free Cash Flow1 $121 $50 - $60 $60 -
Slide 21: Capital Allocation - Share Repurchase Program
Capital Allocation - Share Repurchase Program Sources of Cash Uses of Cash Cash Flow from Operations FY24 R&D Expenditures <$25M Growth (incl. Tax, Interest, ∆WoC; excl. R&D) $148M CAPEX (incl. maintenance) <$25M JV CBS / Small M&A <$25M Existing Cash at YE23 $77M Total Funds Shareholders Available
Slide 22: Wrap-Up: Record Profit Outlook in FY2024 & Beyond
Wrap-Up: Record Profit Outlook in FY2024 & Beyond NA School Bus Industry Thousands Bookings 3%+ = ~8,750 units Class 6-7* 39.6 38.7 36.8 36.1 36.6 35.8 32.5 Revenue 6%+ = ~$1.2 Billion 29.6 30.5 26.4 25.7 ~7% Adj. EBITDA 47%+ = ~$130 Million CAGR Adj. EBITDA 3 ppts+ = ~11% Margin EV Bookings 47%+ =
Slide 23: Solid Growth Runway
Solid Growth Runway 23
Slide 24: Profitable Growth Driven by EV and Lean Transformation
Profitable Growth Driven by EV and Lean Transformation Revenue $M Gas/Propane EV February Short Outlook Long Rev. Diesel CNG Units Updated Term Term $M 11,646 Guidance 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 1,700 6,000 1,350
Slide 25: Strong Outlook Ahead for Blue Bird / Investment Highlights
Strong Outlook Ahead for Blue Bird / Investment Highlights Countercyclical Strong industry growth ahead with a backdrop of healthy funding and an aging school bus fleet National Commitment Beneficiary of $5B US Government’s commitment to the electrification of school buses The Leader Leading market
Slide 26: Appendix
Appendix 26
Slide 27: FY2024 Q1 Financial Results – Record Adj. EBITDA of $48M
FY2024 Q1 Financial Results – Record Adj. EBITDA of $48M FY2024 Q1 Results FINANCIAL HIGHLIGHTS UNITS NET SOLD SALES 2,129 $318M 172 vs.’23 $82M vs.’23 Adjusted Adjusted EBITDA FCF FY24-Q1 Results $48M $(2)M Record Q1 Revenue $318M $51M vs.’23 $(21)M vs.’23 Record EVs 206 Units Record Adj. EBITDA $4
Slide 28: Income Statement
Income Statement ($ Millions) FY2024-Q1 FY2023-Q1 B/(W) Unit Volume 2,129 1,957 172 Unit Backlog 4,570 5,335 (765) Net Revenue $317.7 $235.7 $82.0 Bus Rev./Unit ($000's) $137.8 $109.0 $28.8 / 26.4% Gross Margin 20.0% 3.2% 16.8 ppts Adj. EBITDA1 $47.6 $(3.5) $51.1 Adj. EBITDA Margin1 15.0% (1.5)% 16.
Slide 29: FY23-Q1 to FY24-Q1 Adj. EBITDA Walk: +$51M YoY
FY23-Q1 to FY24-Q1 Adj. EBITDA Walk: +$51M YoY ($ Millions) +51.1 Unit Volumes Pricing, 1.1 FY23-Q1 1,957 EV Mix 6.4 FY24-Q1 2,129 47.6 Delta 172 48.6 Higher Rev. (5.0) and Margins Labor Costs t/o EV Volumes Operational FY23-Q1 92 Improvements SG&A and FY24-Q1 206 Engineering Delta 114 15.0% (1.5)%
Slide 30: Balance Sheet and Cash Flow
Balance Sheet and Cash Flow ($ Millions) FY2024-Q1 FY2023-Q1 B/(W) Cash $77.3 $5.7 $71.6 Debt $(134.7) $(149.1) $14.4 Liquidity $184.3 $84.3 $100.0 Operating Cash Flow $0.2 $19.9 $(19.7) Adj. Free Cash Flow1 $(1.5) $19.6 $(21.1) Trade Working Capital* $(28.8) $33.8 $(62.6) Breakeven Operating Cash F
Slide 31: 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 32: TTM Performance Shows Sustained Profitable Growth
TTM Performance Shows Sustained Profitable Growth Rev. $300 $294 $303 $318 $1,215 $M 1 ~140 Adj. EBITDA ✓ Consistent Revenue in the $300M range and growing ✓ Improved EV mix and Pricing realization every quarter ✓ We beat and raised guidance for the last four quarters ✓ Record levels of 10%+ Adj. EB
Slide 33: Adj. EBITDA Reconciliation
Adj. EBITDA Reconciliation 33
Slide 34: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation 34
Slide 35: Adjusted EPS Reconciliation
Adjusted EPS Reconciliation 35
Slide 36: Investor Relations Contact Information
Investor Relations Contact Information Mark Benfield Mark.Benfield@Blue-Bird.com 36