Unit Sales up 6%, Net Sales up 4% and Adjusted EBITDA down $2.7
million
Full Year Net Sales, Adjusted EBITDA and Adjusted Free Cash Flow
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
its fiscal 2017 first quarter results.
Highlights
-
Unit sales for the quarter totaled 1,493 buses, 85 units above the
same period last year
-
Generated net sales of $136.7 million, $5.3 million higher than the
same period last year
-
First quarter loss from continuing operations of $8.4 million, down
$6.1 million compared with the same period last year. Loss from
continuing operations was impacted by $10.1 million of debt
extinguishment costs
-
First quarter Adjusted EBITDA1 of $2.6 million was down
$2.7 million compared with the same period last year. The decline was
primarily driven by timing of customer orders and engineering expenses
-
Adjusted Free Cash Flow1 was an outflow of $34.7 million in
the quarter, an improvement of $8.4 million compared with last year
-
The Company executed a new $160 million term loan and $75 million
revolving line of credit. The new credit facility reduces the
Company’s effective interest rate paid by approximately 4 pts.,
representing interest savings of approximately $5 million in FY2017.
Proceeds from the new credit facility were used to extinguish the
previous facility
-
Gross margins in the quarter were 13.3%, down 1 pt. from last year.
The deterioration was primarily driven by timing of certain customer
orders
-
The Company was awarded $4.4 million from the Department of Energy to
develop a zero-emissions electric-powered school bus with
"Vehicle-to-Grid" technology
-
Reaffirming full-year fiscal 2017 net sales guidance of $980 million -
1,010 million, Adjusted EBITDA guidance of $72 - 76 million and
Adjusted Free Cash Flow guidance of $38 - 42 million
|
| |
| |
| | Three Months Ended December 31, 2016 |
| B/(W)
2016 |
| Unit Sales | |
1,493
| | |
85
| |
| GAAP Measures: | | | | |
| Revenue (Mils.) | |
$
|
136.7
| | |
$
|
5.3
| |
| Loss from Continuing Operations (Mils.) | |
$
|
(8.4
|
)
| |
$
|
(6.1
|
)
|
| Diluted Earnings per Share | |
$
|
(0.42
|
)
| |
$
|
(0.26
|
)
|
| Non-GAAP Measures: | | | | |
| Adjusted EBITDA1 (Mils.) | |
$
|
2.6
| | |
$
|
(2.7
|
)
|
| Adjusted loss from Continuing Operations1
(Mils.) | |
$
|
(2.1
|
)
| |
$
|
(0.5
|
)
|
| Adjusted Diluted Earnings per Share1 | |
$
|
(0.13
|
)
| |
$
|
(0.01
|
)
|
1 Reconciliation to appropriate GAAP metrics shown below
|
| | | | | | | |
|
“We had a great start to our 90th year at Blue Bird! We delivered solid
growth in top-line revenue and unit sales and secured a number of
first-time accounts,” said Phil Horlock, President and Chief Executive
Officer of Blue Bird Corporation. “We are pleased that our
gasoline-powered bus is generating excitement in the market and our
initial customer-feedback has been very positive. Blue Bird's propane
bus continues to be the leading alternative-fuel choice and we are
excited to have been awarded the DoE grant to develop an electric school
bus, further strengthening our leadership position in alternative fuels.
We are pleased to reaffirm our full-year fiscal 2017 net revenue
guidance of $980 million - 1,010 million, Adjusted EBITDA guidance of
$72 - 76 million and Adjusted Free Cash Flow guidance of $38 - 42
million.”
First Quarter 2017 Results
Net Sales
Total net sales were $136.7 million for the first quarter of fiscal
2017, an increase of $5.3 million, or 4.1%, from prior year period. Bus
unit sales were 1,493 units for the quarter compared with 1,408 units
for the same period last year.
Gross Profit
First quarter gross profit of $18.2 million represents a decrease of
$0.6 million from the first quarter of last year.
Adjusted EBITDA
Adjusted EBITDA was $2.6 million, or 1.9% of net sales, for the first
quarter of fiscal 2017, a decrease of $2.7 million compared with $5.3
million, or 4.0% of net sales, for the first quarter of the prior year.
The decrease in adjusted EBITDA is primarily driven by timing of
customer orders and engineering expenses.
Loss from Continuing Operations
Loss from continuing operations was $8.4 million for the first quarter
of fiscal 2017, a decrease of $6.1 million compared with the same period
last year. The decrease was primarily driven by debt extinguishment
costs of $10.1 million.
Adjusted Loss from Continuing Operations was $2.1 million, representing
a decrease of $0.5 million compared with the same period last year.
Conference Call Details
Blue Bird will discuss its first quarter 2017 results and other related
matters 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 877-407-4018 or
201-689-8471.
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 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
This press release may include the following non-GAAP financial
measures: “Adjusted EBITDA,” “Adjusted Income from Continuing
Operations,” “Adjusted Diluted Earnings per Share,” “Free Cash Flow” and
“Adjusted Free Cash Flow.” Adjusted EBITDA is defined as income from
continuing operations prior to interest income, interest expense, income
taxes, and depreciation, amortization, and disposals, as adjusted to add
back certain charges that we may record each year, such as
stock-compensation expense and transaction costs, as these expenses are
not considered an indicator of ongoing company performance. Adjusted net
income is defined as net income, as adjusted to add back certain
transaction costs not considered an indicator of ongoing company
performance. Adjusted diluted earnings per share represents adjusted
income (loss) from continuing operations divided by diluted weighted
average common shares outstanding (as if we had GAAP net income during
the respective period). Adjusted net income from continuing operations
and adjusted diluted earnings per share are calculated net of taxes.
Free cash flow represents net cash provided by continuing operations
minus cash paid for fixed assets. Adjusted Free Cash flow represents
free cash flow excluding cash paid for special compensation and other
business combination expenses.
There are limitations to using non-GAAP measures. Although Blue Bird
believes that such measures may enhance an evaluation of Blue Bird’s
operating performance and cash flows, (i) other companies in Blue Bird’s
industry may define such measures 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) such measures
may exclude certain financial information that some may consider
important in evaluating Blue Bird’s performance and cash flows.
Forward Looking Statements
This press release includes 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 in this press release regarding guidance,
seasonality, product mix and gross profits 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
-
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 us (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 AND SUBSIDIARIES |
| CONSOLIDATED BALANCE SHEETS |
| (Unaudited) |
| | | |
|
| (in thousands except for share data) | | December 31, 2016 | | October 1, 2016 |
| Assets | | | | |
|
Current assets
| | | | |
|
Cash and cash equivalents
| |
$
|
12,999
| | |
$
|
52,309
| |
|
Accounts receivable, net
| |
18,952
| | |
20,315
| |
|
Inventories
| |
71,865
| | |
53,806
| |
|
Other current assets
| |
6,327
|
| |
6,104
|
|
|
Total current assets
| |
$
|
110,143
|
| |
$
|
132,534
|
|
|
Property, plant and equipment, net
| |
33,000
| | |
33,466
| |
| Goodwill | |
18,825
| | |
18,825
| |
|
Intangible assets, net
| |
59,024
| | |
59,491
| |
|
Equity investment in affiliate
| |
13,693
| | |
12,944
| |
|
Deferred tax asset
| |
22,308
| | |
19,080
| |
|
Other assets
| |
833
|
| |
1,526
|
|
|
Total assets
| |
$
|
257,826
|
| |
$
|
277,866
|
|
| Liabilities and Stockholders' Deficit | | | | |
|
Current liabilities
| | | | |
|
Accounts payable
| |
$
|
67,949
| | |
$
|
80,646
| |
|
Warranty
| |
7,327
| | |
7,972
| |
|
Accrued expenses
| |
17,232
| | |
20,455
| |
|
Deferred warranty income
| |
5,653
| | |
5,666
| |
|
Other current liabilities
| |
4,217
| | |
4,032
| |
|
Current portion of senior term debt
| |
8,000
|
| |
11,750
|
|
|
Total current liabilities
| |
$
|
110,378
|
| |
$
|
130,521
|
|
|
Long-term liabilities
| | | | |
|
Long-term debt
| |
$
|
148,720
| | |
$
|
140,366
| |
|
Warranty
| |
10,991
| | |
11,472
| |
|
Deferred warranty income
| |
10,156
| | |
10,521
| |
|
Other liabilities
| |
15,759
| | |
15,592
| |
|
Pension
| |
54,940
|
| |
56,368
|
|
Total long-term liabilities
| |
$
|
240,566
|
| |
$
|
234,319
|
|
|
Stockholder’s deficit
| | | | |
|
Preferred stock, $0.0001 par value, 10,000,000 shares authorized,
500,000 issued and liquidation preference of $50,000 | |
$
|
50,000
| | |
$
|
50,000
| |
|
Common stock, $0.0001 par value, 100,000,000 shares authorized,
22,813,578 and 22,518,058 issued and outstanding at December 31,
2016 and October 1, 2016, respectively.
| |
2
| | |
2
| |
|
Additional paid-in capital
| |
51,995
| | |
50,771
| |
|
Accumulated deficit
| |
(137,379
|
)
| |
(128,856
|
)
|
|
Accumulated other comprehensive loss
| |
(57,736
|
)
| |
(58,891
|
)
|
|
Total stockholders' deficit
| |
$
|
(93,118
|
)
| |
$
|
(86,974
|
)
|
|
Total liabilities and stockholders' deficit
| |
$
|
257,826
|
| |
$
|
277,866
|
|
| | | | | | | |
|
|
| |
| BLUE BIRD CORPORATION AND SUBSIDIARIES |
| CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS |
| (Unaudited) |
| |
|
| | Three Months Ended |
| (in thousands except for share data) | | December 31, 2016 |
| January 2, 2016 |
| Net sales | |
$
|
136,660
| | |
$
|
131,333
| |
|
Cost of goods sold
| |
118,462
|
| |
112,580
|
|
|
Gross profit
| |
$
|
18,198
|
| |
$
|
18,753
|
|
| Operating expenses | | | | |
|
Selling, general and administrative expenses
| |
18,192
|
| |
17,079
|
|
|
Operating profit
| |
$
|
6
| | |
$
|
1,674
| |
|
Interest expense
| |
(2,688
|
)
| |
(4,243
|
)
|
|
Interest income
| |
7
| | |
22
| |
|
Other income, net
| |
—
| | |
16
| |
|
Loss on debt extinguishment
| |
(10,142
|
)
| |
—
|
|
|
Loss before income taxes
| |
$
|
(12,817
|
)
| |
$
|
(2,531
|
)
|
|
Income tax benefit (expense)
| |
3,626
| | |
(209
|
)
|
|
Equity in net income of non-consolidated affiliate
| |
749
|
| |
421
|
|
|
Net loss from continuing operations
| |
$
|
(8,442
|
)
| |
$
|
(2,319
|
)
|
|
Loss from discontinued operations, net of tax
| |
(81
|
)
| |
(18
|
)
|
| Net loss | |
$
|
(8,523
|
)
| |
$
|
(2,337
|
)
|
|
Defined benefit pension plan, net of tax expense of $567 and $419,
respectively
| |
(1,006
|
)
| |
778
| |
|
Cash flow hedge gain, net of tax expense of $80 and $0, respectively
| |
(149
|
)
| |
—
|
|
|
Comprehensive loss
| |
$
|
(9,678
|
)
| |
$
|
(1,559
|
)
|
|
Net loss (from above)
| |
$
|
(8,523
|
)
| |
$
|
(2,337
|
)
|
|
Less: preferred stock dividends
| |
953
|
| |
998
|
|
|
Net income available to common stockholders
| |
$
|
(9,476
|
)
| |
$
|
(3,335
|
)
|
| | | |
|
| Earnings per share: | | | | |
|
Basic weighted average shares outstanding
| |
22,596,314
| | |
20,897,789
| |
|
Basic earnings (loss) per share
| |
$
|
(0.42
|
)
| |
$
|
(0.16
|
)
|
|
Diluted weighted average shares outstanding
| |
22,596,314
| | |
20,897,789
| |
|
Diluted earnings (loss) per share
| |
$
|
(0.42
|
)
| |
$
|
(0.16
|
)
|
| | | | | | | |
|
|
| |
| BLUE BIRD CORPORATION AND SUBSIDIARIES |
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (Unaudited) |
| |
|
| | Three Months Ended |
|
(in thousands of dollars)
| | December 31, 2016 |
| January 2, 2016 |
| Cash flows from operating activities | | | | |
|
Net loss
| |
$
|
(8,523
|
)
| |
$
|
(2,337
|
)
|
|
Loss from discontinued operations, net of tax
| |
81
| | |
18
| |
|
Adjustments to reconcile net loss to net cash used in continuing
operations
| | | | |
|
Depreciation and amortization
| |
2,023
| | |
1,994
| |
|
Amortization of debt costs
| |
514
| | |
719
| |
|
Share-based compensation
| |
—
| | |
1,138
| |
|
Equity in net income of affiliate
| |
(749
|
)
| |
(421
|
)
|
|
Deferred taxes
| |
(3,875
|
)
| |
(88
|
)
|
|
Provision for bad debt
| |
—
| | |
(5
|
)
|
|
Amortization of deferred actuarial pension losses
| |
1,573
| | |
1,197
| |
|
Loss on debt extinguishment
| |
10,142
| | |
—
| |
|
Changes in assets and liabilities:
| | | | |
|
Accounts receivable
| |
1,363
| | |
1,345
| |
|
Inventories
| |
(18,059
|
)
| |
(22,308
|
)
|
|
Other assets
| |
(23
|
)
| |
(392
|
)
|
|
Accounts payable
| |
(10,831
|
)
| |
(12,322
|
)
|
|
Accrued expenses, pension and other liabilities
| |
(5,715
|
)
| |
(10,086
|
)
|
|
Dividend from equity investment in affiliate
| |
—
|
| |
—
|
|
| Total adjustments | |
$
|
(23,637
|
)
| |
$
|
(39,229
|
)
|
| Net cash used in continuing operations | |
$
|
(32,079
|
)
| |
$
|
(41,548
|
)
|
| Net cash used in discontinued operations | |
(127
|
)
| |
(18
|
)
|
| Total cash used in operating activities | |
$
|
(32,206
|
)
| |
$
|
(41,566
|
)
|
| Cash flows from investing activities | | | | |
|
Cash paid for fixed assets
| |
(2,956
|
)
| |
(1,671
|
)
|
| Total cash used in investing activities | |
$
|
(2,956
|
)
| |
$
|
(1,671
|
)
|
| Cash flows from financing activities | | | | |
|
Net Borrowings/Repayments under the senior credit facility
| |
$
|
—
| | |
$
|
10,000
| |
|
Repayments under the senior term loan
| |
(161,500
|
)
| |
(2,938
|
)
|
|
Borrowings under new term loan
| |
156,887
| | |
—
| |
|
Cash paid for capital leases
| |
(42
|
)
| |
(54
|
)
|
|
Cash paid for debt issuance costs
| |
(210
|
)
| |
—
| |
|
Cash paid to extinguish debt
| |
(507
|
)
| |
—
| |
|
Payment of dividend on preferred stock
| |
(953
|
)
| |
—
| |
|
Cash paid for employee taxes on stock option exercises
| |
(613
|
)
| |
—
| |
|
Proceeds from exercises of warrants
| |
2,790
|
| |
—
|
|
| Total cash (used in) provided by financing activities | |
$
|
(4,148
|
)
| |
$
|
7,008
|
|
| Change in cash and cash equivalents | |
(39,310
|
)
| |
(36,229
|
)
|
| Cash and cash equivalents, beginning of period | |
24,908
|
| |
61,137
|
|
| Cash and cash equivalents, end of period | |
$
|
(14,402
|
)
| |
$
|
24,908
|
|
| | | |
|
| Supplemental disclosures of cash flow information | | | | |
| Cash paid during the period for: | | | | |
|
Interest paid, net of interest received
| |
$
|
1,866
| | |
$
|
3,462
| |
|
Income tax paid, net of tax refunds
| |
503
| | |
218
| |
| Non-cash Investing and Financing activities | | | | |
|
Change in accounts payable capital additions to property, plant and
equipment
| |
(1,866
|
)
| |
618
| |
|
Common stock dividend on Series A preferred stock (market value of
common shares)
| |
—
| | |
998
| |
|
Cashless exercise of stock options
| |
2,900
| | |
—
| |
| | | | | |
|
|
| |
| Reconciliation of GAAP Net Loss to Adjusted EBITDA |
| (Unaudited) |
| |
|
| | Three Months Ended |
|
(in thousands of dollars)
| | December 31, 2016 |
| January 2, 2016 |
|
Net loss
| |
$
|
(8,523
|
)
| |
$
|
(2,337
|
)
|
|
Loss from discontinued operations, net of tax
| |
(81
|
)
| |
(18
|
)
|
|
Loss from continuing operations
| |
$
|
(8,442
|
)
| |
$
|
(2,319
|
)
|
|
Interest expense
| |
2,688
| | |
4,243
| |
|
Interest income
| |
(7
|
)
| |
(22
|
)
|
|
Income tax expense
| |
(3,626
|
)
| |
209
| |
|
Depreciation and amortization
| |
2,023
| | |
1,994
| |
|
Loss on debt extinguishment
| |
10,142
| | |
—
| |
|
Business combination expenses
| |
(174
|
)
| |
54
| |
|
Share-based compensation
| |
—
|
| |
1,138
|
|
|
Adjusted EBITDA
| |
$
|
2,604
|
| |
$
|
5,297
|
|
|
Adjusted EBITDA margin (percentage of net sales)
| |
1.9
|
%
| |
4.0
|
%
|
| | | | | |
|
|
| |
| Reconciliation of Free Cash Flow and Adjusted Free Cash Flow |
| (Unaudited) |
| |
|
| | Three Months Ended |
|
(in thousands of dollars)
| | December 31, 2016 |
| January 2, 2016 |
|
Net cash used in continuing operations
| |
$
|
(32,079
|
)
| |
$
|
(41,548
|
)
|
|
Cash paid for fixed assets
| |
(2,956
|
)
| |
(1,671
|
)
|
|
Free cash flow
| |
$
|
(35,035
|
)
| |
$
|
(43,219
|
)
|
|
Cash paid for business combination expenses
| |
(313
|
)
| |
(54
|
)
|
|
Adjusted free cash flow
| |
(34,722
|
)
| |
(43,165
|
)
|
| | | | | |
|
|
| |
| Reconciliation of Net Loss to Adjusted Loss from Continuing
Operations |
| (Unaudited) |
| |
|
| | Three Months Ended |
|
(in thousands of dollars)
| | December 31, 2016 |
| January 2, 2016 |
|
Net loss, GAAP
| |
$
|
(8,523
|
)
| |
$
|
(2,337
|
)
|
|
Add: loss from discontinued operations, net of tax, GAAP
| |
81
|
| |
18
|
|
|
Loss from continuing operations, GAAP
| |
(8,442
|
)
| |
(2,319
|
)
|
|
One-time charge adjustments, net of tax benefit or expense (1)
| | | | |
|
Loss on debt extinguishment
| |
6,491
| | |
—
| |
|
Business combination expenses
| |
(111
|
)
| |
35
| |
|
Share-based compensation
| |
—
|
| |
728
|
|
|
Adjusted loss from continuing operations, non-GAAP
| |
$
|
(2,062
|
)
| |
$
|
(1,556
|
)
|
____________
| | | | | | | | |
(1) Amounts are net of estimated statutory tax rates of 36%.
|
| | | | | | | |
|
|
| |
| Reconciliation of GAAP Diluted EPS to Non-GAAP Diluted EPS |
| (Unaudited) |
| |
|
| | Three Months Ended |
| | December 31, 2016 |
| January 2, 2016 |
|
Diluted earnings (loss) per share, GAAP
| |
$
|
(0.42
|
)
| |
$
|
(0.16
|
)
|
|
One-time charge adjustments, net of tax benefit or expense
| |
0.29
|
| |
0.04
|
|
|
Adjusted diluted earnings (loss) per share, non-GAAP (1)
| |
$
|
(0.13
|
)
| |
$
|
(0.12
|
)
|
|
Weighted average dilutive shares outstanding
| |
22,596,314
| | |
20,897,789
| |
____________
| | | | | | |
(1) Numerator is adjusted loss from continuing operations,
non-GAAP.
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170209006193/en/
Blue Bird Corporation
Mark Benfield, 478-822-2315
Investor
Relations & New Business Development
[email protected]
Source: Blue Bird Corporation