MACON, Ga. — Blue Bird Corporation (“Blue Bird”) (Nasdaq: BLBD), the leader in electric and low-emission school buses, announced today its fiscal 2022 third quarter results.
“The Blue Bird team continued to execute a rigorous plan to improve operations, reduce fixed costs, and recover economics through pricing. All new bus orders reflected a 25% price increase year over year. In addition, we partnered with our valued dealer network to recover substantial pricing on backlog units. Our previously forecasted plan is starting to pay off in 2H 2022, despite continued inflationary pressures and global supply chain disruptions,” said Matthew Stevenson, President and CEO of Blue Bird Corporation. “Demand for Blue Bird’s best-in-class school buses remains strong and we have expanded our leadership position in zero- and low-emission school buses with firm orders of over 380 electric school buses. We expect demand for our EV school buses to further increase as the EPA’s 2022 Clean School Bus Rebate Program will accelerate adoption of zero-emission student transportation across the United States.”
Added Stevenson: “Blue Bird continues to expand its portfolio of innovative products and services to develop a complete EV ecosystem for school districts, bus fleet operators, and its dealer network. We recently launched our Blue Bird Energy Services business which provides a comprehensive charging infrastructure for EV buses, including site engineering, permitting, construction, customizable hardware and software, warranties, and maintenance. We are also building on our collaboration with Lightning eMotors. Together, we announced a flexible Class 5-6 electric chassis which will enable a broad range of zero-emission vehicles, including last-mile delivery step vans, motorhomes, and other specialty vehicles. Upfitters have responded favorably to our groundbreaking electric vehicle platform. Next, we will team up again to launch a repower program in 2023 for gasoline- and propane-powered Blue Bird Vision Type C school buses. Blue Bird customers can future-proof their school bus fleet by purchasing gasoline- or propane-powered vehicles and converting them easily and cost-effectively to zero-emission, electric buses when needed in the years to come. The repower program represents an excellent bridge strategy to the electrification for school bus fleets. All these developments clearly demonstrate that Blue Bird is well-positioned to shape the future of the student transportation industry.”
2022 Guidance Revised
“We delivered strong improvement in our results in the third quarter, in-line with our plan communicated during our previous earnings call. Margins are on track and improving, and aggressive cost control measures are in place. Despite these improvements, as we look ahead to Q4, production levels are still constrained by supply chain disruptions, and a recent temporary but critical supply shortage is limiting our EV production,” said Razvan Radulescu, CFO of Blue Bird Corporation. “With the supply-constraint lower volumes, combined with the EV semiconductor part shortage, we are revising our guidance for fiscal 2022 to Net Revenue of $750-800M, Adj. EBITDA of $5-15M and Adj. Free Cash Flow of $(45)-(35)M, with the Free Cash Flow being driven by peaked inventory levels at the end of Q3.”
Fiscal 2022 Third Quarter Results
Net sales were $206.1 million for the third quarter of fiscal 2022, an increase of $9.4 million, or 4.8%, from prior year period. Bus sales increased $4.9 million, reflecting a 20.4% increase in average sales price per unit, which was partially offset by a 14.7% decrease in units booked. In the third quarter of fiscal 2022, 1,726 units were booked compared to 2,024 units booked for the same period in fiscal 2021. The decrease in units sold was primarily due to constraints in the Company’s ability to produce and deliver buses due to shortages of critical components. The 20.4% increase in unit price for the third quarter of fiscal 2022 compared to the same period in fiscal 2021 reflects pricing actions taken by management as well as product and customer mix changes. Additionally, Parts sales increased $4.5 million for the third quarter of fiscal 2022 compared to the third quarter of fiscal 2021. This increase is primarily attributed to (a) more schools offering in-person learning during the 2021/2022 school year when compared with the 2020/2021 school year, which increased school bus units in operation and thus increased bus repair and maintenance activities and (b) pricing actions taken by management to offset increases in purchased parts costs.
Third quarter gross profit of $21.6 million represented a decrease of $4.6 million from the third quarter of last year. The decrease was primarily driven by increases in manufacturing costs attributable to a) increased raw materials costs resulting from ongoing inflationary pressures, b) supply chain disruptions that resulted in higher purchase costs for components and freight and c) increased manufacturing inefficiencies resulting from the shortage of certain critical components that required more off-line labor to produce buses. Gross profit margin declined 2.8 points to 10.5%.
Net (Loss) Income
Net (loss) income was $(6.4) million for the third quarter of fiscal 2022, which was a $10.8 million decrease compared to the same period last year. The decrease in income was primarily driven by the $4.6 million decrease in gross profit, discussed above. Also contributing was an increase of $2.4 million in SG&A, primarily due to an increase in professional services, largely relating to several cost cutting and operational transformation initiatives. Additionally, there was a $1.0 million increase in income tax expense.
Adjusted Net (Loss) Income
Adjusted Net (Loss) Income was $(2.9) million, representing a decrease of $8.1 million compared with the same period last year. This decrease is primarily due to the $10.8 million increase in net loss, partially offset by a $3.0 million increase in operational transformation initiatives, net of tax.
Adjusted EBITDA was $8.8 million, which was a decrease of $4.4 million compared with the third quarter last year. This decrease primarily results from the $10.8 million decrease in net income, as a result of the factors discussed above. This decrease was partially offset by a $4.1 million increase in operational transformation initiatives, $1.1 million increase in interest expense and $1.0 million increase in income tax expense as a result of the factors discussed above.
About Blue Bird Corporation
Blue Bird (NASDAQ: BLBD) is recognized as a technology leader and innovator of school buses since its founding in 1927. Our dedicated team members design, engineer and manufacture school buses with a singular focus on safety, reliability, and durability. Blue Bird buses carry the most precious cargo in the world – the majority of 25 million children twice a day – making us the most trusted brand in the industry. The company is the proven leader in low- and zero-emission school buses with more than 20,000 propane, natural gas, and electric powered buses in operation today. Blue Bird is transforming the student transportation industry through cleaner energy solutions. For more information on Blue Bird’s complete product and service portfolio, visit www.blue-bird.com.