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Blue Bird Reports Fiscal 2021 Second Quarter Results; Focused on Margin Expansion, EV Growth and Industry Recovery; Fiscal 2021 Guidance Reaffirmed

  • Net Sales of $164.7M and GAAP Net Loss of $0.6M
  • Bus Average Selling Price up 9.7%
  • Electric Bus Sales up 50%
  • Adjusted EBITDA of $7.5M in Second Lowest-Volume Quarter with 1,489 Buses Sold

MACON, Ga. — Blue Bird Corporation (“Blue Bird”) (Nasdaq: BLBD), the leading independent designer and manufacturer of school buses, announced today its fiscal 2021 second quarter results. GAAP net loss for the quarter of $0.6 million was equal to the comparable FY2020 fiscal period. Adjusted EBITDA for the quarter was $7.5 million, $4.7 million below last year, reflecting 1,105 lower unit sales resulting from the pandemic impact on schools.

“We are very pleased with our second quarter performance and results,” said Phil Horlock, President and Chief Executive Officer of Blue Bird Corporation. “The Blue Bird team executed well despite the pandemic resulting in the majority of schools operating in virtual or hybrid mode for most of the second quarter and supply chain issues creating inefficiencies in our manufacturing operations; nevertheless, we increased our gross margin by 1.7 points, compared with last year, despite a 43-percent drop in unit sales. We are increasingly confident in schools fully reopening for in-classroom teaching as we head toward the next school year, supported by progressively higher quote and order rate activity during the quarter and our firm-order backlog, which is now 15 percent above the prior-year quarter.

“As we move toward a school-bus industry recovery beginning in the second half of our fiscal year, I am encouraged with our progress in improving our underlying business structure, which is key to achieving our near-term EBITDA margin target of at least 10 percent. We increased our second quarter average selling price per bus by $8,900, or 9.7 percent, over last year. We realized manufacturing efficiency improvements, despite the supplier disruptions we experienced, and benefited from lower operating expenses as a result of cost control actions that we implemented last year. Our alternative-powered bus sales mix was 43 percent in the quarter, slightly below prior year. This decline was entirely driven by the March launch timing of our all-new and exclusive Ford and Roush CleanTech propane and gasoline engines. We expect full-year alternative power sales mix to exceed 50 percent of total sales, supported by a very strong order backlog for our new and class-leading 7.3L V8 engine, and we are a strong No. 1 in North American market share in both electric and propane-powered school buses over the past year. The interest in electric buses is unprecedented and our Fiscal 2021 bookings and order backlog has grown 10 percent over prior year, with second quarter sales up 50 percent from a year ago. In fact, our total sold units and order backlog since we began production just three years ago, is now approaching 500 electric buses, covering Type A, C and D configurations. With the growth rate we are seeing, and the breadth of chassis and powertrain choices that we offer, we are increasing our focus and resources in the EV business. We previously announced our intention to offer Blue Bird chassis with factory-installed electric drivetrains to commercial vehicle manufacturers and are in preliminary discussions with a number of commercial-vehicle customers. With the new Administration’s proposed $20-25 billion infrastructure-related bills to accelerate the adoption of electric-powered school buses in the U.S. over the next eight to 10 years, these are exciting times at Blue Bird.

“With our business structure and margin improvements, we are well positioned to capitalize on the market recovery as schools continue to resume full 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 COVID-19 vaccinations accelerate, coupled with the new Administration’s commitment to open schools within 100 days of its term start, we are confident that an industry rebound is in sight, and our increased order rate supports this. We are maintaining our previously provided guidance for net revenue of $750 million to $975 million, Adjusted EBITDA between $40 million to $65 million and Adjusted Free Cash Flow of $(5) million to $20 million.”

Fiscal 2021 Second Quarter Results

Net Sales

Net sales were $164.7 million for the second quarter of fiscal 2021, a decrease of $90.7 million, or 35.5 percent, from prior-year period. Bus unit sales were 1,489 units for the quarter compared with 2,594 units for the same period last year.

Gross Profit

Second quarter gross profit of $18.5 million represented a decrease of $5.7 million from the second quarter of last year. The decline was primarily driven by lower bus and parts volumes. Gross profit margin improved 1.7 points to 11.2 percent, as price increases, coupled with improved manufacturing efficiency and lower manufacturing overhead more than offset the loss of fixed cost absorption from lower volume.

Net Loss

Net loss was $0.6 million for the second quarter of fiscal 2021, which was comparable with the same period last year.

Adjusted Net Income

Adjusted Net Income was $1.4 million, representing a decrease of $1.1 million compared with the same period last year.

Adjusted EBITDA

Adjusted EBITDA was $7.5 million, which was a decrease of $4.7 million compared with the second quarter last year. The decrease was driven by lower volume, partially offset by bus pricing and cost and efficiency improvements.

Year-to-Date 2021 Results

Net Sales

Net sales were $295.1 million for the six months ended April 3, 2021, a decrease of $113.5 million, or 27.8 percent, compared with the prior year. Bus unit sales were 2,744 units for the six months ended April 3, 2021 compared with 4,054 units for the same period last year.

Gross Profit

Full year gross profit was $33.0 million, a decrease of $12.5 million from the prior year.

Net Loss

Net loss was $2.2 million for the six months ended April 3, 2021, which was $1.2 million below the prior year.

Adjusted Net Income

Year-to-date Adjusted Net Income was $1.4 million, representing a decrease of $3.1 million compared with the prior year.

Adjusted EBITDA

Adjusted EBITDA was $13.3 million for the six months ended April 3, 2021, a decrease of $7 million from the prior year. The decrease was driven entirely by lower volume, partially offset by bus pricing and cost and efficiency improvements.

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.

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