Financial Data and Key Metrics Changes - Blue Bird reported Q1 revenue of $333 million, a 6% increase from the previous year, driven by pricing actions including tariffs [6][12] - Adjusted EBITDA for the quarter was $50 million, $4 million higher than last year, reflecting a 15% margin [12][16] - Free cash flow reached a record $31 million, up $9 million from the prior year [13][18] - The company ended the quarter with a liquidity position of $385 million, a $106 million increase compared to a year ago [18] Business Line Data and Key Metrics Changes - The company sold 2,135 buses in Q1, with bus net revenue at $308 million, up $20 million year-over-year [14][15] - EV sales accounted for 121 units, representing 6% of unit volume, with a backlog of 855 EVs pushing into 2027 [8][14] - Parts sales totaled $25 million for the quarter, remaining strong due to increased demand from aging buses [15] Market Data and Key Metrics Changes - Order intake for Q1 was up 45% from the first quarter of 2025, resulting in a backlog of 3,400 units [4][6] - The average selling price for buses increased by nearly $8,800 per unit year-over-year, influenced by tariff recovery [7][15] - The market fundamentals remain strong, with an aging fleet and a heavy replacement cycle anticipated [7][10] Company Strategy and Development Direction - Blue Bird aims to maintain its leadership in the All Power segment, focusing on EVs and propane buses as part of its long-term strategy [4][5] - The company is investing in automation and manufacturing efficiencies to improve cost structures and margins [5][26] - The new assembly plant scheduled to launch in 2028 is a key part of the company's strategy to enhance production capabilities and support growth [25][26] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing strong order intake and a favorable market environment for school buses [7][10] - The company is navigating tariff volatility effectively, aiming for a margin-neutral outcome [5][10] - The outlook for EVs remains positive, with expectations of 800 EV unit sales for fiscal 2026 [8][19] Other Important Information - The company confirmed a $80 million contract with the DOE for funding towards the new plant, which will create 400 jobs [10] - Blue Bird's long-term revenue target is projected to reach $2 billion, with adjusted EBITDA of $320 million by 2029 and beyond [21][22] Q&A Session Summary Question: Margin dynamics and pricing impact - Management indicated that approximately two-thirds of margin improvement came from pricing, while one-third was due to efficiency gains [30] Question: EV market share and diesel trends - The company reported a strong EV backlog and noted that diesel sales remained robust, with potential pre-buy activity due to upcoming emission regulations [36][38] Question: Propane market trends - Management highlighted that propane remains a preferred option for school districts due to its total cost of operation and ease of infrastructure conversion [42] Question: Capital allocation strategy - The company is focused on strategic growth opportunities and vertical integration, with a strong balance sheet enabling flexibility in capital allocation [48][56] Question: Automation impact on margins - Management confirmed that ongoing automation initiatives are expected to provide favorable returns and support margin improvements over the long term [52][53]

Production and Supply Chain - Blue Bird's backlog decreased from approximately 4,400 units as of December 28, 2024, to about 3,070 units as of September 27, 2025, but increased to approximately 3,370 units as of December 27, 2025, including over 850 electric powered units[84]. - The company faced global supply chain constraints impacting production schedules and operational efficiencies, with increased costs from suppliers continuing during fiscal 2025 and 2026[78]. - The company continues to monitor supplier operations to ensure sufficient parts and supplies for production needs[87]. - The company is navigating supply chain challenges by sourcing from alternative suppliers and acquiring larger quantities of critical components[81]. - Changes in trade policies and tariffs began to impact procurement costs for imported inventory in the second half of fiscal 2025[82]. Financial Performance - Net sales for the first quarter of fiscal 2026 were $333.1 million, an increase of $19.2 million, or 6.1%, compared to $313.9 million for the same period in fiscal 2025[104]. - Adjusted EBITDA for the first quarter of fiscal 2026 was $50.1 million, compared to $45.8 million for the same period in fiscal 2025, reflecting an increase in the Adjusted EBITDA margin from 14.6% to 15.0%[104][105]. - Gross profit for the first quarter of fiscal 2026 was $71.2 million, an increase from $60.3 million in the first quarter of fiscal 2025[104]. - Operating profit rose to $37.7 million in Q1 fiscal 2026, an increase of $4.6 million from $33.0 million in Q1 fiscal 2025, driven by a $10.9 million increase in gross profit[111]. - Cash flows from operating activities totaled $36.6 million in Q1 fiscal 2026, an increase of $10.2 million from $26.4 million in Q1 fiscal 2025[138]. Sales and Pricing - Bus sales increased by $19.5 million, or 6.8%, with a 0.2% increase in unit bookings and a 6.5% increase in average sales price per unit[106]. - The company implemented cumulative price increases to mitigate the impact of increased procurement costs due to tariffs, contributing to the rise in net sales[106]. - Management's proactive communications and tariff pricing strategy helped increase orders in the first quarter of fiscal 2026[84]. Costs and Expenses - The cost of goods sold for the first quarter of fiscal 2026 was $261.9 million, up from $253.6 million in the same period of fiscal 2025[104]. - Selling, general and administrative expenses rose to $33.6 million in the first quarter of fiscal 2026, compared to $27.3 million in the same period of fiscal 2025[104]. - Interest expense decreased to $1.6 million in the first quarter of fiscal 2026 from $1.9 million in the same period of fiscal 2025[104]. - Total cost of goods sold increased by $8.3 million, or 3.3%, to $261.9 million in Q1 fiscal 2026, with the percentage of net sales improving from 80.8% to 78.6%[108]. Cash Flow and Liquidity - Cash and cash equivalents at the end of Q1 fiscal 2026 were $241.7 million, up from $136.1 million at the end of Q1 fiscal 2025[137]. - The company believes existing cash balances and expected cash flows will be sufficient to meet operating requirements for at least the next 12 months[134]. - Free Cash Flow for the three months ended December 27, 2025, was $31.1 million, an increase of $9.3 million from $21.8 million for the same period in 2024, driven by a $10.2 million increase in net cash provided by operating activities[143]. Investments and Financing - The company executed a $250.0 million five-year credit agreement on November 17, 2023, with a term loan facility of $100.0 million and a revolving credit facility of $150.0 million[122][123]. - Cash flows used in financing activities increased to $18.5 million for the three months ended December 27, 2025, compared to $12.9 million for the same period in 2024, reflecting a $5.6 million rise[141]. - The company purchased an additional $4.9 million of common stock as part of its share repurchase programs during the first three months of fiscal 2026 compared to the same period in fiscal 2025[142]. Tax and Liabilities - Income tax expense for Q1 fiscal 2026 was $9.1 million, compared to $8.7 million in Q1 fiscal 2025[115]. - A significant increase in accrued expenses, pension, and other liabilities of $42.8 million was noted in the first quarter of fiscal 2026, driven by an advanced payment from a customer[139]. - Outstanding letters of credit totaled $8.3 million at December 27, 2025, securing self-insured workers compensation and performance obligations related to environmental matters[144]. Customer and Accounts Management - Accounts receivable decreased significantly at the end of fiscal 2025 compared to fiscal 2024, impacting cash inflows during the three months ended December 27, 2025[139]. - A larger decrease in accounts payable during the first quarter of fiscal 2026 resulted in increased cash usage, attributed to lower production volume and strategic acquisitions[139]. - The company experienced a shift in customer mix, leading to increased accounts receivable balances towards the end of fiscal 2024, which were collected in the subsequent period[139].

BLUE BIRD CORPORATION (NASDAQ: BLBD) FY2026 First Quarter Results February 4, 2026 1 Agenda Introductions & Forward-Looking Statements Mark Benfield Investor Relations Lead | Key Results and Highlights | John Wyskiel | | --- | --- | | | President & CEO | | Financial Results | Razvan Radulescu | | | CFO | | Outlook | John Wyskiel | | | President & CEO | | Q&A | Group | This presentation includes forward-looking statements, including statements regarding full-year guidance and seasonality, that are subject to ...

Financial Performance - Net sales for Q1 FY2026 were $333.1 million, an increase of $19.2 million or 6.1% compared to Q1 FY2025[6] - GAAP net income for Q1 FY2026 was $30.8 million, up $2.0 million from the same period last year[10] - Adjusted EBITDA reached $50.1 million with a margin of 15%, marking a record for the first quarter[12] - Gross profit for Q1 FY2026 was $71.2 million, an increase of $10.9 million from the previous year[9] - Adjusted net income for Q1 FY2026 was $32.5 million, up $1.9 million from the same period last year[11] - Operating profit improved to $37,677, a 14.3% increase from $33,042 year-over-year[30] - Net income for the quarter was $30,756, up 7.1% from $28,722 in the same quarter of the previous year[30] - Adjusted EBITDA for the three months ended December 27, 2025, was $50,058, reflecting a margin of 15.0% compared to 14.6% in the prior year[34] - Free cash flow for the quarter was $31,114, an increase of 42.5% from $21,816 in the same period last year[37] - Basic earnings per share for the quarter was $0.97, compared to $0.89 in the same quarter last year[30] Sales and Units - Unit sales totaled 2,135 buses, reflecting a slight increase of 5 units compared to Q1 FY2025[3] - Bus sales increased by $19.5 million or 6.8%, driven by a 0.2% increase in unit bookings and a 6.5% rise in average sales price per unit[7] Guidance and Future Outlook - The company raised its full-year 2026 Adjusted EBITDA guidance to $225 million, expecting a slight improvement over the all-time record result of 2025[5] - The company has over 850 electric-powered buses in its firm order backlog, supporting its EV sales target for 2026[4] Assets and Equity - Cash and cash equivalents at the end of the period were $241,739, up from $229,313 at the beginning of the period[32] - Total assets increased to $642,342, compared to $625,255 in the previous quarter[29] - Total stockholders' equity rose to $271,368, up from $255,415 in the prior quarter[29] Parts Sales - Parts sales decreased by $0.3 million or 1.2% compared to Q1 FY2025, attributed to product and channel mix variations[8]

Core Viewpoint - Blue Bird Corporation, a leader in electric and cleaner-emission school buses, will release its fiscal 2026 first quarter results on February 4, 2026, with an audio webcast featuring key executives discussing the results [1]. Company Overview - Blue Bird Corporation (Nasdaq: BLBD) has been a technology leader and innovator in the school bus industry since its founding in 1927, focusing on safety, reliability, and durability [3]. - The company has sold over 25,000 propane, natural gas, and electric-powered buses, establishing itself as a leader in low- and zero-emission school buses [3]. - Blue Bird is committed to transforming the student transportation industry through cleaner energy solutions, emphasizing the importance of safety for the 25 million children transported daily [3].

Core Insights - Blue Bird Corporation shares closed at $50.91 on December 10, 2025, reflecting a 27.24% increase over the trailing year, with CFO Razvan Radulescu retaining a holding valued at approximately $2.5 million post-sale [1][5] - The company specializes in manufacturing school buses and related parts, including alternative fuel and electric vehicle offerings, leveraging nearly a century of operational experience [6] - Radulescu's recent share sale of 7,984 shares for approximately $402,300 was executed under a Rule 10b5-1 trading plan, indicating a prearranged schedule for transactions [7][5] Financial Performance - Blue Bird Corporation reported record financial results for fiscal year 2025, with the highest revenue and adjusted EBITDA to date [9] - The company reaffirmed its full-year 2026 guidance for net revenue at approximately $1.5 billion and adjusted EBITDA guidance of $220 million, with a long-term profit outlook targeting an adjusted EBITDA margin of over 16% on approximately $2 billion in revenue [9] Market Position - The stock has outperformed the S&P 500 over the past year, returning over 27% compared to the benchmark's gain of about 14%, and has increased by 137% over the past five years compared to the market's 83% gain [8] - Blue Bird's focus on innovation and alternative energy solutions positions it as a key supplier for safe, efficient, and sustainable transportation for students [6]

Industry Overview - The auto industry is undergoing a transformation with electric vehicles (EVs) and autonomous vehicles (AVs) reshaping the future of mobility, driven by advances in battery technology and a growing charging network [1] - The adoption of EVs varies by region, with the U.S. facing temporary obstacles due to policy changes, while China leads the transition supported by competitive pricing and government backing [3] - Global EV sales are projected to reach nearly 90 million units by 2040, accounting for 27.5% of total sales in 2026, 43.2% by 2030, and over 83% by 2040 [4] Competitive Landscape - Tesla has historically led the EV market, but competition is intensifying with the emergence of Chinese automakers and new EV-only startups, providing consumers with more choices [2] - The autonomous vehicle market is valued at approximately $1.5 trillion in 2022 and is expected to exceed $13.6 trillion by 2030, growing at a compound annual growth rate of 32% from 2023 to 2030 [4] Key Companies - **Blue Bird Corporation (BLBD)**: A leading provider of low- and zero-emission school buses, with over 20,000 buses in operation. The company is expanding its services and is well-positioned to benefit from trends in clean transportation [8][10] - **WeRide Inc. (WRD)**: A leader in autonomous driving with a fleet of over 1,600 AVs, including robotaxis. The company is expanding its operations globally and commercializing various autonomous vehicle solutions [11][14] - **Workhorse Group Inc. (WKHS)**: Focused on electric commercial vehicles, the company has a strong sales pipeline and partnerships with major fleets. It aims to capture growth in the medium-duty truck market [15][17] - **Amazon (AMZN)**: Through its subsidiary Zoox, Amazon is entering the autonomous driving space with robotaxi services in Las Vegas and plans for expansion. Zoox's unique design positions it as a competitor in the robotaxi market [18][20]

Core Viewpoint - Blue Bird Corporation announced the immediate resignation of Phil Horlock from its Board of Directors, marking a significant leadership change for the company [1] Company Summary - Phil Horlock served as President & CEO of Blue Bird for over 12 years, during which he led the company through transformative growth and operational excellence [1] - The company is recognized as a leader in electric and clean-emission school buses, indicating its commitment to sustainability and innovation in the transportation sector [1]

Industry Overview - The auto industry in 2025 is navigating policy uncertainty and shifting incentives, with U.S. new-vehicle sales expected to reach about 16.3 million units, the strongest level since 2019 [1] - Sales are projected to settle near 16 million units in 2026 as pricing, inventory, and dealer supply normalize, with growth driven by real consumer demand rather than short-term incentives [2] - Affordability remains a key theme, with higher-income buyers supporting demand for larger vehicles while cost-conscious shoppers lean towards used and off-lease options [3] Company Insights Garrett Motion - Garrett Motion develops advanced turbocharging and zero-emission technologies, securing new light-vehicle turbo programs and expecting over $40 million in lifetime revenues from turbochargers used in data-center backup power systems [6][7] - The company raised its 2025 profit outlook and approved a $250 million share repurchase program for 2026, with a Wall Street average price target of $20.75/share suggesting a nearly 19% upside [8] Standard Motor Products - Standard Motor Products specializes in premium automotive replacement parts, with demand driven by an aging vehicle fleet and long-term growth themes like electrification and affordability [9] - The acquisition of Nissens in November 2024 is expected to deliver $8-12 million in annualized cost savings, with a Wall Street average price target of $47/share suggesting a nearly 25% upside [11][12] Blue Bird Corporation - Blue Bird is a leader in low- and zero-emission school buses, with a record delivery of 901 electric buses in fiscal 2025 and an order backlog of 680 electric buses supporting its 2026 sales outlook [13][14] - The company targets $1.5 billion in revenues and $220 million in adjusted EBITDA for fiscal 2026, with a Wall Street average price target of $56.71/share suggesting a nearly 12% upside [15] WeRide Inc. - WeRide is a leader in the autonomous driving space with a fleet of over 1,600 AVs, including robotaxis and driverless licenses across eight countries, and is expanding its commercial operations [16][17] - The company has an attractive average broker recommendation of 1.42, with a Wall Street average price target of $15/share suggesting a nearly 72% upside [18]

Company Performance - Blue Bird (BLBD) closed at $50.74, down 2.12% from the previous trading session, which is less than the S&P 500's daily loss of 0.03% [1] - Over the past month, shares of Blue Bird have decreased by 1.71%, underperforming the Auto-Tires-Trucks sector, which gained 12.09%, and the S&P 500, which gained 2.57% [1] Upcoming Earnings - Blue Bird is expected to report an EPS of $0.8, reflecting a decrease of 13.04% from the prior-year quarter, with anticipated revenue of $350 million, indicating an 11.51% increase from the same quarter last year [2] Annual Estimates - For the annual period, Zacks Consensus Estimates project earnings of $4.21 per share and revenue of $1.57 billion, representing changes of -3.88% and +5.74% respectively from the previous year [3] Analyst Sentiment - Recent changes to analyst estimates for Blue Bird suggest optimism regarding the business and profitability, as positive revisions typically reflect favorable near-term business trends [3] Zacks Rank - Blue Bird currently holds a Zacks Rank of 2 (Buy), with the consensus EPS projection having increased by 1.63% in the past 30 days [5] Valuation Metrics - Blue Bird has a Forward P/E ratio of 12.31, which is lower than the industry average of 16.69, indicating that Blue Bird is trading at a discount [6] - The company has a PEG ratio of 2.37, compared to the industry average PEG ratio of 1.97 [6] Industry Overview - The Automotive - Domestic industry, which includes Blue Bird, has a Zacks Industry Rank of 76, placing it in the top 31% of over 250 industries [7] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]