MACON, Ga. — Blue Bird Corporation (“Blue Bird”) (Nasdaq: BLBD), the leader in electric and low-emission school buses, announced today its fiscal 2023 fourth quarter and full-year results.
“I am incredibly proud of our team’s progress in transforming our business in 2023, and the outcome of all the hard work is evident in our record financial results,” said Phil Horlock, CEO of Blue Bird Corporation. “The Blue Bird team executed a rigorous transformational plan over the past two years to improve operations and throughput, control fixed costs, recover economics through pricing and expand our leadership position in alternative-powered buses. The market demand for Blue Bird’s school buses remains very strong with approximately 4,600 units in our order backlog. Unit sales in the year were up 25% from a year ago and we grew revenue by an exceptional 41%, to a record $1.13 billion. Adjusted EBITDA was a record $88 million, which is an outstanding increase of $103 million compared with last year, while our Adjusted Free Cash Flow in 2023 was another record high and $144 million better than last year.
In expanding our leadership position in alternative-powered school buses, we achieved outstanding growth in zero-emission EV unit sales, which more than doubled from last year. Additionally, at fiscal year end, we had almost 600 electric school bus orders in our backlog, representing a 12% mix. We have seen strong growth in EV orders from the EPA’s Clean School Bus Program, which awarded nearly $1 billion in funding from Phase 1 of the program in 2023. We are excited to see the launch of Phase 2 (A and B) of the 5-year program, offering a combined $900M+ in grant and rebate funding for electric school buses. We’ve been working aggressively with our dealers and school districts in submitting applications and we are confident that exciting growth is ahead for Blue Bird on the EV front!
Based on our substantial progress this year and additional visibility into the 2024 operating environment, we increased our full year financial guidance for next year to 10% Adjusted EBITDA and look forward to sustained profitable growth in the coming years, particularly as the global supply chain recovery progresses.”
FY2024 Guidance Increased
“We are very pleased with the FY2023 results, with record Revenues and Adj. EBITDA coming in above guidance,” said Razvan Radulescu, CFO of Blue Bird Corporation. “Our business transformation is already generating record levels of profitability compared with historical levels, and more improvements are still to come. With the strong finish to 2023 and better line-of-sight into 2024, we are raising our fiscal 2024 guidance to Net Revenue to $1.15-1.25 Billion, Adj. EBITDA of $105-125 million and Adj. Free Cash Flow of $50-60 million. Additionally, we are reconfirming our long-term outlook of profitable growth towards ~$2 billion in revenues and Adjusted EBITDA margins of 12%+.”
Fiscal 2023 Fourth Quarter Results
Net Sales
Net sales were $303.0 million for the fourth quarter of fiscal 2023, an increase of $45.3 million, or 17.6%, from prior year period. Bus sales increased $41.7 million, reflecting a 12.1% increase in average sales price per unit, resulting from product and mix changes, as well as pricing actions taken by management in response to increased inventory purchase costs, and a 5.0% increase in units booked. In the fourth quarter of fiscal 2023, 2,116 units were booked compared with 2,016 units booked for the same period in fiscal 2022. Additionally, Parts sales increased $3.6 million, or 16.7%, for the fourth quarter of fiscal 2023 compared with the fourth quarter of fiscal 2022. This increase is primarily attributed to pricing actions taken by management to offset increases in purchased parts costs, increased demand due to the aging school bus fleet as well as product mix.
Gross Profit
Fourth quarter gross profit of $50.0 million represented an increase of $54.4 million from the fourth quarter of last year. The increase was primarily driven by the $45.3 million increase in net sales, discussed above, as well as a decrease of $9.1 million in cost of goods sold, primarily due to certain Bus segment inventory that had an approximate $8.8 million cumulative cost in excess of net realizable value that was recognized as a loss in fiscal 2022 with no similar activity in fiscal 2023.
Net Income
Net income was $18.6 million for the fourth quarter of fiscal 2023, which was a $41.7 million increase compared with the same period last year. The increase was primarily driven by the $54.4 million increase in gross profit discussed above. Partially offsetting this was the corresponding $13.8 million increase in income tax expense.
Adjusted Net Income
Adjusted net income was $21.3 million, representing an increase of $42.7 million compared with the same period last year, primarily due to the $41.7 million increase in net income discussed above.
Adjusted EBITDA
Adjusted EBITDA was $40.7 million, which was an increase of $57.0 million compared with the fourth quarter last year. This increase primarily results from the $41.7 million increase in net income as a result of the factors discussed above as well as the corresponding $13.8 million increase in income tax expense.
Full Year Fiscal 2023 Results
Net Sales
Net sales were $1,132.8 million for the qw months ended September 30, 2023, an increase of $332.2 million, or 41.5%, compared with the same period in fiscal 2022. Bus sales increased $311.1 million, or 43.0%, reflecting a 24.8% increase in units booked and a 14.6% increase in average sales price per unit. There were 8,514 units booked in the twelve months ended September 30, 2023 compared with 6,822 units booked during the same period in fiscal 2022. The increase in units sold was primarily due to constraints in the Company’s ability to produce and deliver buses due to shortages of critical components in fiscal 2022. The increase in unit price for fiscal 2023 compared to fiscal 2022 reflects pricing actions taken by management as well as product and customer mix changes. Parts sales increased $21.0 million, or 27.3%, for the twelve months ended September 30, 2023 compared with the twelve months ended October 1, 2022. This increase is primarily attributed to pricing actions taken by management to offset increases in purchased parts costs and increased inventory availability as supply chain constraints began to improve during fiscal 2023 relative to fiscal 2022.
Gross Profit
Gross profit for the 12months ended September 30, 2023 was $138.9 million, an increase of $102.3 million compared with the same period in the prior year. The increase was primarily driven by the $332.2 million increase in net sales. This was partially offset by an increase of $229.9 million in cost of goods sold, primarily corresponding the increase net sales.
Net Income
Net income was $23.8 million for the twelve months ended September 30, 2023, which was a $69.6 million increase from the same period in the prior year. The increase in net income was primarily driven by the $102.3 million increase in gross profit, discussed above, and a $11.1 million increase in equity in net income of non-consolidated affiliate. These increases were partially offset by a corresponding $20.4 million increase in income tax expense, as well as a $9.9 million increase in SG&A, a $3.3 million increase in interest expense, and a $11.3 million increase in other expense. The increase in SG&A was primarily driven by an increase in labor cost, the increase in interest expense was primarily attributable to higher interest rates in fiscal 2023 compared to fiscal 2022, and the increase in other expense was primarily due to expenses we were required to pay on behalf of several stockholders in connection with their sale of shares of common stock during the twelve months ended September 30, 2023, with no similar expense recorded during the same period of fiscal 2022.
Adjusted Net Income
Adjusted net income for the twelve months ended September 30, 2023 was $34.5 million, an increase of $70.5 million compared with the same period last year, primarily due to the $69.6 million increase in net income, discussed above.
Adjusted EBITDA
Adjusted EBITDA was $87.9 million for the twelve months ended September 30, 2023, an increase of $102.7 million compared with the same period in the prior year. This is primarily due to the $69.6 million increase in net income, discussed above, the corresponding $20.4 million increase in income tax expense, $7.4 million for the stockholder transaction costs discussed above, and a $5.5 million increase in Micro Bird’s total interest expense, net; income tax expense or benefit; depreciation expense and amortization expense, which primarily resulted from a $4.2 million increase in income tax expense as a result of Micro Bird reporting net income during fiscal 2023 and a net loss in fiscal 2022.
Conference Call Details
Blue Bird will discuss its fourth quarter 2023 results in a conference call at 4:30 PM ET today. Participants may listen to the audio portion of the conference call either through a live audio webcast on the Company’s website or by telephone. The slide presentation and webcast can be accessed via the Investor Relations portion of Blue Bird’s website at www.blue-bird.com.
Webcast participants should log on and register at least 15 minutes prior to the start time on the Investor Relations homepage of Blue Bird’s website at http://investors.blue-bird.com. Click the link in the events box on the Investor Relations landing page.
Participants desiring audio only should dial 404-975-4839 or 833-470-1428
A replay of the webcast will be available approximately two hours after the call concludes via the same link on Blue Bird’s website.
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.
