MACON, Ga. — Blue Bird Corporation (“Blue Bird”) (Nasdaq: BLBD), the leading independent designer and manufacturer of school buses, announced today its fiscal 2020 fourth quarter and full-year results. GAAP net income for the fourth quarter and full-year were $11.9 million and $12.2 million, respectively, up $0.3 million and down $12.1 million from comparable FY2019 periods. Adjusted EBITDA for the quarter and year were $21.9 million and $54.7 million, respectively.
“The second half of fiscal 2020 was challenging for Blue Bird as operations were significantly impacted by COVID-19,” said Phil Horlock, president and chief executive officer of Blue Bird Corporation. “School shutdowns delayed orders and supplier disruptions impacted our efficiencies. Through the fourth quarter, however, we saw significant stabilization in our supply base and manufacturing processes.
“While working through these challenges, I am very pleased with our progress in improving our underlying business structure that is key to achieving our near-term EBITDA margin target of at least 10 percent. Full-year average selling price per bus increased by more than $6,000, or 7 percent, over last year. The increase was due to a combination of pricing and a richer mix of higher-priced vehicles, including electric-powered buses. Despite the significant COVID impact on orders, we had another strong year of alternative-fuel bus sales, with a record sales mix of 48 percent, equal to last year. We saw substantial growth in our electric-powered bus sales this year, with 158 buses sold and a strong growth runway in that segment. Our alternative-fuel market share remained strong in fiscal 2020, led by propane at 76 percent, followed by electric at 58 percent and we maintained our position as the undisputed leader in alternative fuels.
“We also announced the upcoming product launch of our all-new and exclusive 7.3-liter engine, developed with Ford and Roush, which will power our class-leading propane- and gas-powered Blue Bird Vision, described by our tagline, “The best just got better!” We also continued to make great progress in driving down structural costs with our Transformational Initiatives, which improved profits by $14.4 million in the full year. In fact, this initiative has reduced our structural costs by more than $50 million since its inception three years ago. In addition, we successfully moved to a single shift production schedule late in the third quarter, which drove efficiency and quality improvements through the balance of the year. We are making changes in our plant so that by spring of 2021, we will have the same daily capacity on one shift that we previously had on two shifts.
“With these business structure improvements, we are well-positioned to capitalize on the market recovery as schools get back to in-classroom learning. We have a history of robust cash generation and strong liquidity, a culture of winning and leadership in growing segments, a clearly defined margin-growth strategy and an experienced team with a proven track record of delivering results and handling difficult times. As we look at guidance for FY2021, there is a lot of uncertainty around timing of a return-to-normalcy for schools. Recent news around the approval and distribution of COVID-19 vaccines, however, provides confidence that an industry rebound is in sight. We are providing a wide range for our guidance metrics, which we will narrow through the year as the control of the pandemic become clearer. We are announcing initial net revenue guidance of $750M-975M, with Adj. EBITDA between $40M-$65M and Adjusted Free Cash Flow of $(5)-$20M.”
Fiscal 2020 Fourth Quarter Results
Net Sales
Net sales were $281.4 million for the fourth quarter of fiscal 2020, a decrease of $62.1 million, or 18.1 percent, from prior-year period. Bus unit sales were 2,876 units for the quarter compared with 3,726 units for the same period last year.
Gross Profit
Fourth-quarter gross profit of $29.6 million represented a decrease of $17.0 million from the fourth quarter of last year. Gross profit margin declined 3.1 points to 10.5 percent. The decline was driven by lower volumes and manufacturing disruptions due to COVID-19, partially offset by bus pricing and cost reductions.
Net Income
Net income was $11.9 million for the fourth quarter of fiscal 2020, an increase of $0.3 million compared with the same period last year.
Adjusted Net Income
Adjusted Net Income was $13.3 million, representing a decrease of $6.7 million compared with the same period last year.
Adjusted EBITDA
Adjusted EBITDA was $21.9 million, representing a decrease of $11.5 million compared with the fourth quarter last year. The decrease was driven by lower volume and production inefficiencies due to COVID-19, partially offset by bus pricing and cost reductions.
Full Year 2020 Results
Net Sales
Net sales were $879.2 million for the fiscal year ended October 3, 2020, a decrease of $139.7 million, or 13.7 percent, compared with the prior year. Bus unit sales were 8,878 units for the fiscal year ended October 3, 2020, compared with 11,017 units for the same period last year.
Gross Profit
Full-year gross profit was $96.2 million, a decrease of $37.3 million from the prior year.
Net Income
Net income was $12.2 million for the fiscal year ended October 3, 2020, which was $12.1 million below the prior year.
Adjusted Net Income
Year-to-date Adjusted Net Income was $22.1 million, representing a decrease of $21.3 million compared with the prior year. The decline is more than accounted for by the decline in profits due to COVID-19 disruptions.
Adjusted EBITDA
Adjusted EBITDA was $54.7 million for the fiscal year ended October 3, 2020, a decrease of $27.1 million below the prior year.
About Blue Bird Corporation
Blue Bird is the leading independent designer and manufacturer of school buses, with more than 570,000 buses sold since its formation in 1927 and approximately 180,000 buses in operation today. Blue Bird’s longevity and reputation in the school bus industry have made it an iconic American brand. Blue Bird distinguishes itself from its principal competitors by its singular focus on the design, engineering, manufacture and sale of school buses and related parts. As the only manufacturer of chassis and body production specifically designed for school bus applications, Blue Bird is recognized as an industry leader for school bus innovation, safety, product quality/reliability/durability, operating costs and drivability. In addition, Blue Bird is the market leader in alternative fuel applications with its propane-powered and compressed natural gas-powered school buses. Blue Bird manufactures school buses at two facilities in Fort Valley, Georgia. Its Micro Bird joint venture operates a manufacturing facility in Drummondville, Quebec, Canada. Service and after-market parts are distributed from Blue Bird’s parts distribution center located in Delaware, Ohio.
