News Details

Bus Unit Sales Rise 18% on Net Sales of $165.8 Million

Full-Year Revenue and EBITDA Guidance Reaffirmed

FORT VALLEY, Ga.--(BUSINESS WIRE)-- Blue Bird Corporation (“Blue Bird”) (Nasdaq: BLBD), the leading independent designer and manufacturer of school buses, announced today fiscal first quarter 2015 results and reaffirmed full-year guidance.

First Quarter Highlights

• Total unit sales of 1,824 buses, an 18% increase over the first quarter of 2014
• Total net sales of $165.8 million, a 14% increase over the same period last year
• Parts sales of $13.8 million, a 15% increase over the same period last year
• Adjusted EBITDA of $7.4 million in the lowest volume quarter of the year. This represents a decrease of $2.2 million compared with prior year as we invested in winning new customers and growing sales. This is the second consecutive year of positive Adjusted EBITDA in the first quarter and is consistent with our plan and supplemental proxy statement
• Net loss from continuing operations of $0.6 million compared to net income of $4.1 million last year, driven primarily by a $4.9 million increase in net interest expense
• Reaffirming full-year estimates for net sales of $918-$940 million and adjusted EBITDA of $72-$75 million

“We are very excited to have recently completed the business combination transaction with Hennessy Capital Acquisition Corporation and to begin operating Blue Bird as a public company traded on Nasdaq,” said Phil Horlock, President and Chief Executive Officer of Blue Bird Corporation. “Our results in the first quarter reflect our commitment to growth as we delivered double-digit sales increases. Differentiating products such as our propane-powered school buses continued to bring in new customers, with over half of the propane bus customers in the quarter buying their first propane buses. We are positive on the outlook and are reaffirming full-year guidance of net sales of $918-$940 million and EBITDA of $72-$75 million.”

First Quarter 2015 Results

Seasonality

It is important to note when reviewing the first quarter results that the school bus industry is seasonal. The first quarter is historically the lowest volume quarter of the year.

Approximately one-third of annual new school bus registrations occur during the first half of the fiscal year (October-March) based on R.L. Polk registration data. The majority of Blue Bird’s annual sales and profits occur in the fiscal third and fourth quarters (April-September).

Sales

Total net sales for the first quarter of 2015 were $165.8 million, up 14% from last year.

This reflects an 18% increase in bus units sold. Bus unit sales were 1,824 units for the first quarter of fiscal 2015 compared to 1,545 units for the first quarter of fiscal 2014. Net bus sales of $152.0 million in the quarter were 13% higher compared to the prior year.

Net parts sales for the first quarter of 2015 were $13.8 million, up 15% from $12.1 million in the first quarter 2014.

Gross Profit

Gross profit in the first quarter was $19.5 million, down $1.0 million compared to the prior year period. This reduction was driven by lower gross profits in the bus segment partially offset by an increase in parts gross profits.

Bus gross profits for the quarter were $14.3 million compared to $16.0 million in 2014. The favorable profit impact of higher volumes, improved mix of propane bus sales and productivity was more than offset by higher investment to achieve conquest sales and other one-time factors. We do not expect the lower first quarter bus gross profits to result in a change to our full-year adjusted EBITDA guidance.

Gross profits for the parts segment during the quarter improved to $5.2 million. This is $0.7 million higher than the prior year period as a result of higher sales.

Adjusted EBITDA

Adjusted EBITDA for the quarter was $7.4 million, compared with $9.6 million a year ago, representing the second consecutive year of positive Adjusted EBITDA in the first quarter. Results were consistent with our plan and supplemental proxy statement. The $2.2 million reduction in adjusted EBITDA was the result of program incentives we utilized to win incremental new business, a non-recurring positive warranty credit that occurred in 2014, and additions to our sales team to drive growth. This was partially offset by higher sales volume, a higher mix of propane-powered buses, improved manufacturing productivity and lower material costs. Although adjusted EBITDA was down versus prior year in the first quarter, Blue Bird continues to expect full-year adjusted EBITDA to grow 7%-12% and come in at $72-75 million.

Net Income

Net loss from continuing operations during the first quarter was $0.6 million, compared with net income of $4.1 million in the same period last year. The largest contributor to this change was interest expense. Net interest expense was $5.1 million for the first quarter of fiscal 2015, an increase of $4.9 million over the first quarter last year. The increase was primarily due to average borrowing levels in the first quarter of fiscal 2015 of $234.9 million compared with $12.5 million in the first quarter of fiscal 2014. Blue Bird obtained a term loan facility in June 2014 to fund the dividend recapitalization, entering into a $235 million first lien credit agreement and a $60 million revolving credit agreement. Interest expense will continue to be substantially higher than prior year in the second and third quarters as well.

Other Highlights

• Over half of the customers who purchased Blue Bird propane-powered buses were first time buyers of the product
• Labor productivity for the first quarter improved about 2%
• Introduced a new Type A bus through our joint venture with Micro Bird based on an all-new Ford chassis. Blue Bird is first in market with this product, which provides an approximate 20% improvement in fuel economy and the lowest operating costs in its segment
• Introduced several new product features that differentiate Blue Bird including our new kid-friendly “E-Z” windows, durable sealed luggage compartments and a superior factory-installed air conditioning option

“Growing our customer base, improving our productivity and differentiating our buses with new features are helping to drive Blue Bird forward and deliver results,” Horlock said. “We are looking forward to a great first year as a public company as we deliver on our commitment to design, build, sell and service the world’s finest school bus.”

Blue Bird to Host Conference Call Today at 8:00 AM EST

Blue Bird will discuss its first quarter 2015 results and other related matters in a conference call at 8:00 AM EST 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 ten minutes prior to the start time at http://public.viavid.com/index.php?id=113333. The event number is 113333. For audio-only, participants should dial 877-407-4018. A replay of the webcast will be available approximately two hours after the call concludes via the same link. This will also be available on Blue Bird’s corporate website on the Investor Relations homepage.

About Blue Bird Corporation

Blue Bird is the leading independent designer and manufacturer of school buses, with more than 550,000 buses sold since its formation in 1927 and approximately 180,000 buses in operation today. Blue Bird’s longevity and reputation in the school bus industry have made it an iconic American brand. Blue Bird distinguishes itself from its principal competitors by its singular focus on the design, engineering, manufacture and sale of school buses and related parts. As the only manufacturer of chassis and body production specifically designed for school bus applications, Blue Bird is recognized as an industry leader for school bus innovation, safety, product quality/reliability/durability, operating costs and drivability. In addition, Blue Bird is the market leader in alternative fuel applications with its propane-powered and compressed natural gas-powered school buses. Blue Bird manufactures school buses at two facilities in Fort Valley, Georgia. Its Micro Bird joint venture operates a manufacturing facility in Drummondville, Quebec, Canada. Service and after-market parts are distributed from Blue Bird’s parts distribution center located in Delaware, Ohio.

Non-GAAP Financial Measures

Adjusted EBITDA should not be considered as an alternative to net income (loss) as an indicator of Blue Bird’s performance or as an alternative to any other measure prescribed by GAAP. There are limitations to using non-GAAP measures such as Adjusted EBITDA. Although Blue Bird believes that Adjusted EBITDA may enhance an evaluation of Blue Bird’s operating performance based on recent revenue generation and product/overhead cost control because they exclude the impact of prior decisions made about investment and financing, (i) other companies in Blue Bird’s industry may define Adjusted EBITDA margin differently than Blue Bird does and, as a result, they may not be comparable to similarly titled measures used by other companies in Blue Bird’s industry and (ii) Adjusted EBITDA may exclude certain financial information that some may consider important in evaluating Blue Bird’s performance. Attached to this press release is a schedule that reconciles Adjusted EBITDA to Net Income.

Forward Looking Statements

This press release may include forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to expectations for future financial performance, business strategies or expectations for our business. Specifically, forward-looking statements, include statements regarding guidance and seasonality, and may include statements relating to:

• Inherent limitations of internal controls impacting financial statements
• Growth opportunities
• Future profitability
• Ability to expand market share
• Customer demand for certain products
• Economic conditions that could affect fuel costs, commodity costs, industry size and financial conditions of our dealers and suppliers
• Labor or other constraints on the Company’s ability to maintain a competitive cost structure
• Volatility in the tax base and other funding sources that support the purchase of buses by our end customers
• Lower or higher than anticipated market acceptance for our products
• Ability to be successful in the Company’s appeal of the delisting determination by the staff of the Listing Qualifications Department of the NASDAQ Stock Market and to meet NASDAQ’s listing standards, including having the requisite number of stockholders
• Other statements preceded by, followed by or that include the words “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “target” or similar expressions

These forward-looking statements are based on information available as of the date of this press release, and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. The factors described above, as well as risk factors described in reports filed with the SEC by HCAC or Blue Bird Corporation (available at www.sec.gov), could cause our actual results to differ materially from estimates or expectations reflected in such forward-looking statements.

Blue Bird Corporation
Jeff Merten, 478-822-2496
Director, Investor Relations & New Business Development
[email protected]

Source: Blue Bird Corporation