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Blue Bird(BLBD) - 2025 Q1 - Earnings Call Transcript
BLBDBlue Bird(BLBD)2025-02-06 00:57
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Financial Data and Key Metrics Changes - The company achieved near record adjusted EBITDA of 46million,just46 million, just 2 million below last year's record, with an exceptional adjusted EBITDA margin of 15% [12][39] - Revenue for the first quarter was 314million,nearlythesameaslastyear,withadjustedfreecashflowincreasingby314 million, nearly the same as last year, with adjusted free cash flow increasing by 23 million to 22million[15][39]−Theliquiditypositionattheendofthequarterwasarecord22 million [15][39] - The liquidity position at the end of the quarter was a record 280 million, with a significant reduction in debt by over 40millioncomparedtothepreviousyear[47][39]BusinessLineDataandKeyMetricsChanges−Thecompanysold2,130busesinthefirstquarter,witharevenuebreakdownshowingbusnetrevenueat40 million compared to the previous year [47][39] Business Line Data and Key Metrics Changes - The company sold 2,130 buses in the first quarter, with a revenue breakdown showing bus net revenue at 288 million, down by 5millionduetoalowerEVmix[13][40]−Partssalestotaled5 million due to a lower EV mix [13][40] - Parts sales totaled 26 million, representing a solid 6% growth over last year [17][41] - The EV sales in Q1 were 132 units, which is 36% lower than last year, while alternative powered buses represented a 51% mix of unit sales [41][18] Market Data and Key Metrics Changes - The backlog for Blue Bird school buses was at a healthy 4,400 units at the end of the first quarter, representing almost six months of production [7][16] - The current backlog of electric vehicles represents about 250millioninrevenue,whichisalmostdoublethevaluefromthesametimelastyear[19]−TheaveragesellingpriceforeachICEbuswasabout6250 million in revenue, which is almost double the value from the same time last year [19] - The average selling price for each ICE bus was about 6% higher than a year ago, reflecting both pricing and richer options [17] Company Strategy and Development Direction - The company is focused on making significant improvements across its entire business, including upgrading facilities and developing new products [10] - The company plans to grow its margin to 15% and beyond over the next few years, with a target of 1,000 EV unit sales for fiscal 2025 [62][70] - The company is also expanding its addressable market by supplying commercial chassis to U.S. last mile delivery businesses and doubling Micro Bird JV bus capacity [70] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand for school buses and the potential for pricing stability and profit margins [7][8] - The company is optimistic about the resumption of the Clean School Bus funding program, which is seen as critical for future EV sales [68][70] - Management acknowledged the challenges posed by executive orders and tariffs but remains confident in the company's ability to navigate these issues [20][33] Other Important Information - The company announced a leadership change, with Phil Horlock stepping down as President and CEO, to be replaced by John Wyskiel [23] - The company has a contractual agreement with the DOE for 50% funding of a new plant expansion, representing 80 million of a total investment of 160 million [21] Q&A Session Summary Question: Scenarios for reaching the high end of EBITDA guidance - Management indicated strong Q1 performance and momentum in non-EV powertrains, suggesting that higher EV sales could help reach the upper end of guidance [74][75] Question: Clarification on unspent funds and EPA program - Management confirmed that 250 buses have firm orders with approved rebates, and there have been no cancellations since the pause [80][81] Question: Pricing strategy in response to tariffs - Management stated that they are prepared to pass through potential tariff costs to customers, similar to a sales tax [84][86] Question: EV mix progression throughout the year - Management forecasted an increase in EV sales throughout the year, with a low mix in Q1 due to timing of EPA funding [90][91] Question: Inventory increase in the last quarter - Management explained that inventory was increased to ensure supply chain stability and to pre-buy components, particularly for EVs [94] Question: Long-term growth without EV funding - Management expressed confidence in multiple growth avenues, including state and local funding for EVs and expansion into new markets [100] Question: Exposure to tariffs on China - Management indicated limited exposure to China, with plans to evaluate and potentially resourcing parts from other countries [103][104] Question: Risks regarding labor availability and components - Management reported a strong labor force and good supply chain conditions, with no current concerns [108][109] Question: Cost structure on EV school buses - Management announced a reduction in EV bus prices by 25,000 and ongoing efforts to drive down costs through alternative suppliers [112][114] Question: Potential for propane as an alternative - Management confirmed that propane is a logical alternative for customers, offering the lowest total cost of ownership without subsidies [120][122]