MACON, Ga. -Blue Bird Corporation (“Blue Bird”) (Nasdaq: BLBD), the leader in electric and low-emission school buses, announced today its fiscal 2023 third quarter results.
“I am incredibly proud of the progress by our team in completing our business turnaround, and the outcome of all the hard work is evident in our financial results. The Blue Bird team has been executing a rigorous plan for over 18 months to improve operations, reduce fixed costs and recover economics through pricing,” said Phil Horlock, CEO of Blue Bird Corporation. “The market demand for Blue Bird’s school buses remains very strong with nearly 5,200 units in our order backlog. Unit sales were 24% higher than a year ago and we grew revenue by an exceptional 43% in the third quarter. Adjusted EBITDA was over 3X last year’s third quarter, in summary, a terrific quarter for Blue Bird, with an Adjusted EBITDA margin of almost 10%.
“We expanded our leadership position in alternative-powered school buses, particularly in zero-emission school buses where we achieved outstanding growth in EV bookings, which were up nearly 150% from last year’s third quarter; additionally, we have more than 550 electric school bus orders in our backlog. We have seen steady growth in EV orders from the EPA’s 2022 Clean School Bus Rebate Program, which awarded nearly $1 billion in funding from Phase 1 of the program. This funding alone will generate orders for at least 550 Blue Bird buses. In addition, we are excited to see further progress with the announcement of Phase 2 of the program, offering a $400M competitive grant program for electric school buses. Exciting growth ahead for Blue Bird on the EV front!
“Based on our substantial progress, we increased our full year financial guidance again and look forward to sustained profitable growth, particularly as the global supply chain recovery progresses.”
FY2023 Guidance Increased
“We are very excited with the FY2023-Q3 results, with Revenues coming in at the top end of our guidance and Adjusted EBITDA above guidance” said Razvan Radulescu, CFO of Blue Bird Corporation. “Our turnaround is completed and we have returned to historical profitability, and expect further increased performance for fiscal Q4, as shown in the forecast shared during the earnings call. We are raising full year fiscal 2023 guidance to Net Revenue of just over $1.1 Billion, Adj. EBITDA of $70-76 million and Adj. Free Cash Flow of $70-80 million. Additionally, we are reconfirming our long-term outlook of profitable growth towards $2 billion in revenues and Adjusted EBITDA margins of 12%, or $250 million.”
Fiscal 2023 Third Quarter Results
Net Sales:
Net sales were $294.3 million for the third quarter of fiscal 2023, an increase of $88.2 million, or 42.8%, from prior year period. Bus sales increased $83.7 million, reflecting a 17.0% increase in average sales price per unit, resulting from pricing actions taken by management as well as product and customer mix change, and a 23.8% increase in units booked. In the third quarter of fiscal 2023, 2,137 units were booked compared to 1,726 units booked for 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 the third quarter of fiscal 2022. Additionally, Parts sales increased $4.6 million, or 23.4%, for the third quarter of fiscal 2023 compared to the third quarter of fiscal 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 the third quarter of fiscal 2023 relative to the third quarter of fiscal 2022.
Gross Profit:
Third quarter gross profit of $45.8 million represented an increase of $24.2 million from the third quarter of last year. The increase was primarily driven by the $88.2 million increase in net sales, discussed above. This was partially offset by an increase of $64.0 million in cost of goods sold, primarily corresponding the increase net sales.
Net Income:
Net income was $9.4 million for the third quarter of fiscal 2023, which was a $15.8 million increase compared to the same period last year. The increase was primarily driven by the $24.2 million increase in gross profit, discussed above. Partially offsetting this was an increase of $7.2 million in other expense, 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 third quarter of fiscal 2023, with no similar expense recorded during the same period of fiscal 2022.
Adjusted Net Income:
Adjusted net income was $14.5 million, representing an increase of $17.4 million compared with the same period last year, primarily due to the $15.8 million increase in net income, discussed above.
Adjusted EBITDA:
Adjusted EBITDA was $28.0 million, which was an increase of $19.2 million compared with the third quarter last year. This increase primarily results from the $15.8 million increase in net income as a result of the factors discussed above as well as a $1.8 million increase in depreciation, amortization, and disposals and a $5.5 million increase in stockholder transaction costs, which were partially offset by a $3.9 million decrease in operational transformation initiative costs that we incurred in fiscal 2022 to address the supply chain constraints that were having a significant adverse impact on our operations and financial results, with only relative minor amounts of such activity recorded during fiscal 2023.
Year-to-Date Fiscal 2023 Results
Net Sales:
Net sales were $829.8 million for the nine months ended July 1, 2023, an increase of $286.9 million, or 52.8%, compared with the same period in fiscal 2022. Bus sales increased $269.5 million, or 55.3%, reflecting a 33.1% increase in units booked and a 16.6% increase in average sales price per unit. 6,398 units booked in the nine months ended July 1, 2023 compared with 4,806 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 the three quarters of fiscal 2022. The increase in unit price for the first three quarters of fiscal 2023 compared to the same period in fiscal 2022 reflects pricing actions taken by management as well as product and customer mix changes. Parts sales increased $17.4 million, or 31.4%, for the nine months ended July 1, 2023 compared to the nine months ended July 2, 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 slightly during the first three quarters of fiscal 2023 relative to the first three quarters of fiscal 2022.
Gross Profit:
Gross profit for the nine months ended July 1, 2023 was $88.9 million, an increase of $47.9 million compared to the same period in the prior year. The increase was primarily driven by the $286.9 million increase in net sales. This was partially offset by an increase of $239.0 million in cost of goods sold, primarily corresponding the increase net sales.
Net Income:
Net income was $5.2 million for the nine months ended July 1, 2023, which was a $27.9 million increase from the same period in the prior year. The increase in net income was primarily driven by the $47.9 million increase in gross profit, discussed above, and a $7.7 million increase in equity in net income of non-consolidated affiliate. These increases were partially offset by a corresponding $6.6 million increase in income tax expense, as well as a $7.8 million increase in SG&A, a $4.4 million increase in interest expense, and a $9.2 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 an increase in the stated term loan interest rate from 7.9% at July 2, 2022 to 11.1% at July 1, 2023, 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 nine months ended July 1, 2023, with no similar expense recorded during the same period of fiscal 2022.
Adjusted Net Income:
Adjusted net income for the nine months ended July 1, 2023 was $13.1 million, an increase of $28.1 million compared with the same period last year, primarily due to the $27.9 million increase in net income, discussed above.
Adjusted EBITDA:
Adjusted EBITDA was $43.6 million for the nine months ended July 1, 2023, an increase of $41.9 million compared to the same period in the prior year. This is primarily due to the $27.9 million increase in net income, discussed above, the corresponding $6.6 million increase in income tax expense, and $6.3 million for the stockholder transaction costs discussed above.
Conference Call Details:
Blue Bird will discuss its third 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.
